Hanover Vs Vemma-April 2016

Case 2:16-cv-01071-BSB Document 1 Filed 04/15/16 Page 1 of 55
1 Mark G. Worischeck/Bar No. 011147

Ryan P. Sandstrom/Bar No. 029862
2 SANDERS & PARKS, P.C.
3030 North Third Street, Suite 1300
3 Phoenix, AZ 85012-3099
Direct Phone: (602) 532-5795
4 Direct Fax: (602) 230-5054
Mark.Worischeck@sandersparks.com
5 Ryan.Sandstrom@sandersparks.com
6 Attorneys for Plaintiff Hanover Insurance Company
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Hanover Insurance Company, a Delaware

10 corporation,
Plaintiff,
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Case No.:
COMPLAINT FOR
DECLARATORY JUDGMENT
12 v.
13 Vemma International Holdings, Inc., an
Arizona corporation; Vemma Nutrition
14 Company, an Arizona corporation; and
Benson K. Boreyko, an individual,
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Defendants.
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______________________________________
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Plaintiff Hanover Insurance Company (Hanover), files its Complaint for
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Declaratory Judgment pursuant to 28 U.S.C. 2201, et seq. against Defendants Vemma
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International Holdings, Inc., Vemma Nutrition Company (collectively, Vemma), and
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Benson K. Boreyko, and alleges as follows:

I. INTRODUCTION
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1.
This lawsuit involves an insurance coverage dispute.
Defendants are
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seeking coverage for an underlying lawsuit that alleges Defendants operated an
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international pyramid scheme which targets young adults, including college students
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to sell dietary supplements, and bilking these young consumers out of more than $185
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million. Specifically, on August 17, 2015, the Federal Trade Commission (FTC) filed a
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lawsuit against Defendants for their alleged violations of the FTC Act for operating of an
illegal pyramid scheme (the FTC Lawsuit). On September 18, 2015, the Arizona
District Court granted a Preliminary Injunction against Defendants, stating [t]he
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evidence before the Court leaves little doubt that the FTC will ultimately succeed on the
merits in demonstrating that Vemma is operating a pyramid scheme and finding the FTC
has a likelihood of success on the merits in demonstrating Vemma and Mr. Boreyko are
operating a pyramid scheme.
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2.
Hanover issued certain claims-made Private Company Management
Liability Insurance Policies to Defendant Vemma. Specifically, the 2015-16 Policy

expressly cautions:
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NOTICE: THE LIABILITY COVERAGE PARTS ARE

WRITTEN ON A CLAIMS-MADE BASIS. SUBJECT
TO ITS TERMS, THIS POLICY APPLIES ONLY TO
CLAIMS FIRST MADE AGAINST THE INSUREDS
DURING THE POLICY PERIOD (Underlying added,
capitals and bold in original.)
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Here, the FTC Lawsuit was filed during the Hanover 2015-16 Policy Period. However,
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the Policy also provides all Related Claims will be considered as a single Claim made
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in the Policy Periodin which the earliest of such Related Claims was first made.
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3.
Indeed, on February 9, 2012, during the Hanover 2011-2012 Policy Period,
a company called BLS, LLC (BLS) commenced an arbitration proceeding (the

Arizona Pyramid Arbitration) against Vemma and Boreyko in Arizona alleging that
Vemma was an illegal pyramid promotional scheme under state and federal law. BLS
sought more than $200,000 in damages against Vemma including under the Arizona
Pyramid Scheme statute. The Arizona Pyramid Arbitration was a Claim that should
have been reported to Hanover, but was not.
4.
Then, beginning during the Hanover 2012-13 Policy Period, identical to the
FTC Lawsuit, more than 100 similar Consumer Complaints (of which many are
Claims) were filed against Vemma (before the Oregon Department of Justice, the
Arizona Better Business Bureau, and the FTC) alleging Vemma was a pyramid scheme
i.e., [my teenage son] made the mistake of buying into the pyramid product, Vemma
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operates as apyramid scheme, where income is primarily derived from signing up new
members rather than sales of actual products, [Vemma] is the standard ponzi/pyramid
scheme. The problem I have is them targeting MINORS to do their dirty work. Adults
know better, kids do not (the Consumer Complaints).
5.
In addition, on June 10, 2013, Italian regulators (i.e., the Italian FTC)
commenced a proceeding against Vemma for its alleged operation of an illegal pyramid
scheme in Italy, in violation of the Italian Consumer Code (the Italian Proceeding). On
March 10, 2014, the Italian proceeding found Vemmas sale of dietary supplements was
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an illegal pyramid scheme in violation of Italian laws, and a fine and judgment were
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entered against Vemma.
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6.
Because the pyramid-scheme allegations of the FTC Lawsuit (filed in the
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2015-16 Policy Period) are identical to the pyramid-scheme allegations of the Claims
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made during the earlier Hanover Policy Periods (i.e., the Arizona Pyramid Arbitration,
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more than 100 Consumer Complaints (including an Oregon DOJ Claim), and the Italian
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Proceeding), and because the Policy provides all related Claims constitute a single
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Claim and made in the Policy Periodin which the earliest of such Related Claims
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was first made i.e., the 2011-12 Policy Period, the FTC Lawsuit is not a claim that was
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first made during the Hanover 2015-16 Policy Period, precluding coverage for the FTC
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Lawsuit under that Policy.
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7.
Under the Notice Provisions, Defendants were required to provide to
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Hanover written notice of the Claim,as soon as practicable during the Policy
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Periodbut in no event later than 90 days after such Claim is first made. Defendants
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never provided notice to Hanover of the Arizona Pyramid Arbitration, the Consumer
Complaints, nor of the Italian Proceeding, so these Claims are not afforded coverage
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under the Policy. And because the FTC Lawsuit is a related Claim, Vemmas failure to
provide notice of the original Claims (the Arizona Pyramid Arbitration, the Consumer
Complaints, the Italian Proceeding) similarly means there is no coverage under the Policy
for the FTC Lawsuit.
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8.
Separately, the Policy contains an Unfair Business Practices Exclusion that
bars coverage for any Claim (e.g., lawsuit) directly or indirectly based upon, arising
out of, or attributable tounfair business practices. Each and every substantive
allegation against Defendants in the FTC Lawsuit is set forth under the heading,
DEFENDANTS BUSINESS PRACTICES (emphasis in original), and includes four
causes of action, each stating that Defendants acts or omissions constitute a deceptive
act or practice in violation of the FTC Act. Accordingly, the Unfair Business Practices
Exclusion applies to bar coverage under the Policy for the FTC Lawsuit.
9.
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Alternatively, because Vemma failed to disclose the Arizona Pyramid
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Arbitration, more than 100 Consumer Complaints, and/or the Italian Proceeding in
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Hanovers Policy Application, Hanovers Known Claim Exclusion applies to bar
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coverage for the FTC Lawsuit, as well as the application of other Policy terms, conditions
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and exclusions that bar coverage for some and/or all of the FTC Lawsuit.
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10.
An actual controversy exists between Defendants and Hanover regarding
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Hanovers purported obligation to provide them with a defense and indemnity for the
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FTC Lawsuit, which cannot be resolved without a declaration of the rights and
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responsibilities of the parties by this Court.
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II.
PARTIES
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11.
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Plaintiff Hanover is a company incorporated under the laws of Delaware
with its principal place of business at 440 Lincoln Street, Worcester, Massachusetts.
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is an Arizona corporation with its principal place of business at 1621 West Rio Salado
Parkway, Tempe, Arizona 85281.
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On information and belief, Defendant Vemma International Holdings, Inc.,
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On information and belief, Defendant Vemma Nutrition Company, is an
Arizona corporation with its principal place of business at 1621 West Rio Salado
Parkway, Tempe, Arizona 85281.
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citizen of Arizona.1
III.
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On information and belief, Defendant Benson K. Boreyko is a resident and
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JURISDICTION AND VENUE
This court has jurisdiction over this action pursuant to 28 U.S.C. 1332
respecting diversity jurisdiction insofar as it involves citizens of different states and the
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amount in controversy exceeds $75,000, exclusive of interest and costs.

16.
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Venue is appropriate under 28 U.S.C. 1391 because a substantial part of
the relevant events occurred in this District, including the issuance of the Policy to
Defendants at 8322 E. Hartford Drive, Scottsdale, Arizona 85255.
IV.
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A.
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BACKGROUND FACTS
The Relevant Policies

17.
For the purposes of this Complaint, Hanover issued two policies to Vemma
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of relevance, both are a Private Company Management Liability Insurance Policy, with a
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policy number of LH4-8827059, with a limit of liability of $5,000,000, and with a Policy
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Period of: (i) August 1, 2015 to August 1, 2016 (the 2015-16 Policy); and (ii) August 1,
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2011 to August 1, 2012 (the 2011-12 Policy).
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In Defendant Benson K. Boreykos Answer to the FTC Lawsuit, which is filed in the United
States District Court for the District of Arizona, he states that, Boreyko admitsthat he resides
in this District. See, FTC Lawsuit, 2:15-cv-01578-JJT, Doc. #125, 8.
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1 and is incorporated herein by reference.
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19.
A true and correct copy of the 2015-16 Policy is attached hereto as Exhibit
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Both the 2011-12 Policy and the 2015-16 Policy are claims-made
policies.
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21.
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Specifically, in the Policy Declarations for the 2015-16 Policy, it states (in
CAPITAL LETTERS and in bold):
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NOTICE: THE LIABILITY COVERAGE PARTS ARE

WRITTEN ON A CLAIMS-MADE BASIS. SUBJECT
TO ITS TERMS, THIS POLICY APPLIES ONLY TO
DURING THE POLICY PERIOD OR ANY
APPLICABLE EXTENDED REPORTING PERIOD.
(Underlying added.)
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Thereafter, on the top of the first page of the Directors and Officer
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(D&O) Coverage Part for the 2015-16 Policy, it states (in CAPITAL LETTERS and in
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bold):
NOTICE: THIS COVERAGE PART IS WRITTEN ON A
CLAIMS-MADE BASIS. SUBJECT TO ITS TERMS,
THIS COVERAGE PART APPLIES ONLY TO
DURING THE POLICY PERIOD OR ANY
APPLICABLE EXTENDED REPORTING PERIOD.
(Underlying added.)
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23.
The respective relevant Insuring Provisions of the 2015-16 Policy (Sections
I.A. and B. of the D&O Coverage Part), states:
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The Insurer will pay on behalf of the Insured Entity, Loss

which the Insured Individual is legally obligated to pay due
to a Claim first made against the Insured Individual during
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the Policy Period, or the Extended Reporting Period if

applicable, but only to the extent the Insured Entity
indemnifies the Insured Individual for such Loss.
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The Insurer will pay on behalf of an Insured Entity, Loss

which the Insured Entity is legally obligated to pay due to a
Claim first made against the Insured Entity during the
Policy Period, or the Extended Reporting Period if
applicable. (Emphasis added.)
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B.
The Claims Against Vemma and/or Boreyko
1.
During the 2011-12, 2012-13, 2013-14, and the 2014-15 Policy Periods
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Under the terms of the 2011-12 Policy, 2012-13 Policy, the 2013-14 Policy,
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and/or the 2014-15 Policy, Claim is defined to include: [a]ny written demand
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presented for monetary Damages or non-monetary relief for a Wrongful Act.
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26.
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A true and correct copy of the 2013-14 Policy, without its application, is
attached hereto as Exhibit 4 and is incorporated herein by reference.

27.
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a.
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The Arizona Pyramid Arbitration
On or about February 29, 2012, BLS, LLC (BLS) submitted a Demand
for Arbitration against Vemma with the American Arbitration Association (the Arizona
Pyramid Arbitration).
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On or about April 7, 2012, BLS submitted a second Demand for
Arbitration naming Vemma and adding Defendant Boreyko.

30.
On or about September 3, 2012, BLS submitted a third Demand for
Arbitration naming Vemma and Boreyko.
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31.
In the Arizona Pyramid Arbitration, BLS asserted claims against
Defendants for violations of the Federal RICO statute, the Arizona Pyramid statute,
common law fraud, and securities fraud under Arizona law.
32.
BLS alleged in its Demand for Arbitration that Vemma is an illegal
pyramid promotional scheme under state and federal law.
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33.
In the Demand for Arbitration, BLS sought more than $200,000 in
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damages from Vemma arising out of an alleged illegal pyramid scheme.

34.
Arbitration) was a Claim as defined by the 2011-2012 Policy Period.

35.
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Vemma received a copy of the February 29, 2012 Demand for
Arbitration between August 1, 2011 and August 1, 2012.

36.
Boreyko received a copy of the April 7, 2012 Demand for Arbitration
between August 1, 2011 and August 1, 2012.

37.
Vemma and Boreyko were represented by the law firm Coppersmith
Schermer & Brockelman PLC in the Arizona Pyramid Arbitration.

38.
A true and correct copy of the February 29, 2012 Demand for Arbitration
is attached hereto as Exhibit 6 and is incorporated herein by reference.

39.
A true and correct copy of the April 7, 2012 Demand for Arbitration is
attached hereto as Exhibit 7 and is incorporated herein by reference.

40.
A true and correct copy of the September 3, 2012 Demand for Arbitration
is attached hereto as Exhibit 8 and is incorporated herein by reference.
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The February 29, 2012 Demand for Arbitration (i.e., the Arizona Pyramid
b.
41.
The Italian Proceeding
During the 2012-13 Policy Period, on June 10, 2013, Italian regulators (i.e.,
the Italian FTC) commenced a proceeding against Vemma for its alleged operation of a
pyramid scheme in Italy, through its sale of dietary supplements, in violation of the
Italian Consumer Code (the Italian Proceeding).
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42.
On March 10, 2014, in the Italian Proceeding, Vemmas business practices
were found to be an illegal pyramid scheme in violation of Italian laws, and a fine and
judgment were entered against Vemma (the Italian Order).
43.
The Italian Consumer Code, Article 23, Par. I, letter p), defines as unfair
the conduct of a business organization any business that starts, manages or promotes A
pyramid promotional scheme where consumers provide a contribution in exchange for
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the possibility of receiving payment mainly from the enrollment of other consumers into
the scheme, rather than from the sale or consumption of products.
44.
The Italian Order states that, in pyramid sales schemes the sponsors
income does not depend only on the total sales volumes generated together with the
associates he/she sponsors, (to which, moreover, they are not directly linked) but results
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mainly by the enrollment of other persons in the sales or promotional network, this being
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the primary aspect of this scheme, which determines the earnings level that will be
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recognized to sponsor. In other words, in a pyramid sales scheme the product or
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service to be sold becomes secondary, simply providing the pretext and opportunity to
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enroll other consumers to participate in the pyramid by making personal orders
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(purchases), thus artificially enabling the scheme to feed on itself.
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45.
The Italian Order stated that the Vemma network is in fact a pyramid
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scheme, because Vemma makes a profit mainly from the enrollment of associates and
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the purchases of product made directly by the latter, and where the associates
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promotional effort is aimed at constantly enrolling new associates and creating a purchase
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network (with purchases made by the participants themselves), rather than generating
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product sales.
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46.
A true and correct copy of the translation of the March 10, 2014 Italian
Order in the Italian Proceeding is attached hereto as Exhibit 9 and incorporated herein by
reference (the translated decision in the Italian Proceeding is also attached to the FTC
Lawsuit, 2:15-cv-01578-JJT, Doc. 13-1).
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c.
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47.
and the 2014-15 Policy Period (from August 1, 2014 to August 1, 2015), Vemma
received notice of more than 100 Consumer Complaints from the Oregon DOJ, the
Federal Trade Commission (FTC), and the Arizona Better Business Bureau, with more
than three dozen alleging that Vemma was an illegal pyramid scheme.
(1.)
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The Oregon DOJ Claim
By letter dated December 4, 2012, the Oregon Department of Justice, Civil
Enforcement Division (Oregon DOJ), advised Vemma that it had received a complaint
from Barb Raines (the Oregon DOJ Claim).
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During the term of the 2012-13 Policy Period (from August 1, 2012 to
August 1, 2013), the 2013-14 Policy Period (from August 1, 2013 to August 1, 2014),
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The Consumer Claims
A true and correct copy of the December 4, 2012 letter from the Oregon
DOJ is attached hereto as Exhibit 10 and is incorporated herein by reference.2

50.
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By email dated December 10, 2012, from Ms. Michelle Lottner of Vemma
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(Compliance Analyst) to Ms. Raines, Ms. Lottner stated: Dear Ms. Raines, This letter is
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in response to the complaint you filed with the Oregon Department of Justice dated
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November 21, 2012 stating that Vemma is a pyramid type of program targeting high
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school students (complaint FF11267-12-Barb Raines).
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A true and correct copy of Ms. Lottners December 10, 2012 email is
attached hereto as Exhibit 11 and incorporated herein by reference.
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(2.)
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52.
The Arizona BBB Claims
In correspondence dated December 22, 2012, from Ms. Andrea Garcia of
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the Better Business Bureau (BBB) to Ms. Michelle Cohen of Vemma, Ms. Garcia sets
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forth a complaint against Vemma received by the BBB from Angela Ramon.
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Exhibit 10 does not contain the purported Enclosure: Consumer Complaint EZ-E1.
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53.
A true and correct copy of the correspondence dated December 22, 2012,
from Ms. Garcia to Ms. Cohen is attached hereto as Exhibit 12 and incorporated herein
by reference.
54.
As stated in Ms. Ramons Claim: I am Nickys mom, Nick was
approached about Vemma and made the mistake of buying into the pyramid product.
The initial cost was $150 for product/shipping. As in most cases, Nick was only able to
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find one person who would buy into this scheme.
He ordered the first product in
October, and the next autoship product came in November. Nick is a freshman in college
and, of course, the most college kids, they want to make quick money. I didnt find out
about this until Nick received an overdraft on his November account when the autoship
came through. I, at that point in time (12/4/12), contacted Vemma and spoke with Kevin
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and cancelled the product (Conf #3904506). I was told that Nick could only return the
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latest pack. They would not give him a refund for the first product that was delivered in
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October[a]fter several days of not receiving anything and not receiving a refund and
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Derek not taking my calls, I called again and spoke with Alecia on 12/20/12. She was
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very friendly and said it would take 3-4 weeks for a refund, but did speed up the process
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and had the refund deposited on 12/21/12. However, Firstbank called to inform me that
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only $130 had been deposited (because I filed a dispute with my bank over Vemma, they
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are watching the account carefully). I did ask for information where legal matters should
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be sent to, and they were very reluctant and after several conversations with her
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supervisor, they finally provided me an address and email (but said there was no
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number). I dont really want to get my lawyer involved, so I thought I would try this
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route first[i]t cost Nick $223.44 for product he cannot get rid of. I understand young
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college students are adults, but I also believe that Vemma preys on these young adults
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because, although they may be book smart, they are not world smart. Its a lesson Nick
has learned, but Im hoping it will not continue to happen to other individuals.
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55.
Thereafter, Vemma (by Ms. Michelle Lottner, Compliance Analyst)
responded in writing to the BBB (to Ms. Garcia) about the allegations made by Ms.
Ramon, and Vemma stated: In response to Angies allegations that Vemma is a
pyramid-type business, we offer the following: Vemma was incorporated in September
2004 in the State of Arizona, Vemmas parent company, New Vision USA, Inc. was
established in 1995 by the Boreyko family and is a proud member of both the Direct
Selling Association and Better Business Bureau of Central/Northern Arizonaany
company that ties compensation and financial success solely to recruiting efforts rather
than actual sales for ultimate use by Consumers is an illegal pyramid scheme and
ultimately destined to collapseVemma has also adopted and enforces other policies to
ensure compliance with federal and state laws and to make certain that many of the
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abuses commonly associated with illegal pyramids, such as inventory loading, cannot
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occur.
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56.
A true and correct copy of the correspondence from Ms. Lottner to Ms.
Garcia is attached hereto as Exhibit 13 and incorporated herein by reference.

57.
In correspondence dated January 16, 2013, from Ms. Alexandria Nock of
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the BBB to Ms. Michelle Cohen of Vemma, Ms. Nock sets forth a complaint against
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Vemma received by the BBB from Mike Gleeson, which states: Vemma operates as a
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virtual pyramid scheme, where income is primarily derived from signing up new
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members rather than sales of actual products.
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58.
A true and correct copy of the January 16, 2013 correspondence from Ms.
Nock to Ms. Cohen is attached hereto as Exhibit 14 and incorporated herein by reference.
59.
By email dated January 21, 2013 from Michelle Lottner of Vemma to Ms.
Nock, the email states: Mr. Gleesons complaint states that Vemma operates as a virtual
pyramid scheme, where income is primarily derived from signing up new members rather
than sales of actual products..
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A true and correct copy of the email dated January 21, 2013 from Ms.
Lottner to Ms. Nock is attached hereto as Exhibit 15 and incorporated herein by

reference.
61.
By correspondence dated February 7, 2013 from Ms. Alexandria Nock of
the BBB to Ms. Michelle Cohen of Vemma, Ms. Nock sets forth a complaint against
Vemma received by the BBB from Amy Dunagan, which complains: I have been
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repeatedly contacted by both email and cell phone by marketers that left Herbalife and
started with Vemma. I contacted Vemma when they started and they denied having those
members as part of their company. They have my number and have been sending
automated calls to it promoting their business. I am certain it is members of Vemma
because they have sent me links to their website and tonight a text message promoting it.
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They are supposedly an MLM company, but I dont see these people trying to sell any
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product. They repeated want you to buy in and be a part of their team. It is a pyramid
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scheme and they are attempting it with another company.
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unscrupulous to take numbers with you and continue to harass people when they have not
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contacted you.I want them to stop and I do not think they should be allowed to
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continue this practice.
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62.
I believe I this very
A true and correct copy of the correspondence dated February 7, 2013 from
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Ms. Nock to Ms. Cohen is attached hereto as Exhibit 16 and incorporated herein by
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reference.
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63.
In correspondence from Ms. Michelle Lottner of Vemma to Ms. Nock of
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the BBB, Ms. Lottner acknowledges complaint 9412328 from Amy Dunagan and Ms.
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Dunagans claim that Vemma is a pyramid scheme.
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64.
A true and correct copy of the correspondence from Ms. Lottner to Ms.
Nock is attached hereto as Exhibit 17 and incorporated herein by reference.

65.
In correspondence dated April 4, 2013 from Ms. Michelle Cohen
(Compliance Analyst) of Vemma to Ms. Alexandra Nock of the BBB, Vemma

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acknowledged being accused of operating a pyramid scheme in a complaint filed by
Kristina Brennen, stating: [i]n response to Ms. Brennens allegations that Vemma is a
pyramid-type business.3
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66.
A true and correct copy of the correspondence dated April 4, 2013 from
Ms. Cohen to Ms. Nock is attached hereto as Exhibit 18 and incorporated herein by
reference.
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In correspondence dated August 27, 2013 from Ms. Samantha Oberdank of
the BBB to Ms. Michelle Lottner of Vemma, Ms. Oberdank sets forth a complaint against
Vemma received by the BBB from Lisa Vigna, which states: This company is soliciting
money from high school students ($500) and putting high pressure sales, and the claim of
making a lot of money as part of the enticement. This cannot be legal to get teenaged
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kids, not even 18 yet, to sell their product. Not actually selling the product itself, but
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getting their friends to buy into the company for $500 and then turning around and trying
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to solicit their friends and classmates to do the same which is how you make money. It
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is the standard ponzi/pyramid scheme. The problem I have is them targeting MINORS to
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do their dirty work. Adults know better, kid do notI would like the company to pull
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out of Basking Ridge NJ and stop enticing the High School kids and to cease any and all
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operations with my town and any towns surrounding the immediate area.
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68.
A true and correct copy of the correspondence dated August 27, 2013 from
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Ms. Oberdank to Ms. Lottner is attached hereto as Exhibit 19 and incorporated herein by
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reference.
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69.
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By correspondence from Ms. Michelle Lottner of Vemma to Ms. Oberdank,
Vemma acknowledged being accused of operating a pyramid scheme, stating: regarding
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A copy of Ms. Kristina Brennens April 2, 2013 complaint (ID No. 9485820) was not provided
by Vemma to Hanover.
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complaint ID 9683077 from Lisa VignaMs. Vignas claim that Vemma is a
pyramid/ponzi scheme.
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70.
A true and correct copy of the correspondence from Ms. Michelle Lottner
of Vemma to Ms. Oberdank is attached hereto as Exhibit 20 and incorporated herein by

reference.
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71.
By correspondence dated August 29, 2013 from Ms. Samantha Oberdank of
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the BBB to Ms. Michelle Lottner of Vemma, Ms. Oberdank sets forth a complaint against
Vemma received by the BBB from Julia Guise, which complains: This is a multiple
issue. My son was presented with a business opportunity, from his friend to join Vemma,
as a brand partner with the potential to retire his parents and other unrealistic
promises. He was given a minor/parent/legal guardian application form for me to sign to
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give my son consent for him to become a brand Partner of the Vemma Nutrition
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Company. My son is 16. I did not give my consent and I am still in possession of this
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application. Without my parental consent on 8/27/13 they set my son up with a website
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to market and sell their products, and on 8/28/13 they withdrew (fraudulently) $580.83
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my sons teen checking accountDisputed Amount: $580.83Desired Settlement: Full
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refund and held accountable for their unlawful/unethical business practices.
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72.
A true and correct copy of the correspondence dated August 29, 2013 from
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Ms. Oberdank to Ms. Lottner is attached hereto as Exhibit 21 and incorporated herein by
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reference.
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(3.)
73.
The FTC Consumer Claims
On July 31, 2014, Ms. Allison Tengan of Vemma made a Freedom of
Information Act (FOIA) request to the FTC.

74.
By email dated August 4, 2014 from Mr. Jonathan Hill of the FTC to Ms.
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Allison Tengan of Vemma, Mr. Hill stated: This acknowledges receipt of your FOIA
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request to the Federal Trade Commission dated Thursday July 31, 2014 and [f]or your
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convenience, please be advised that all consumer complaints received by FTC through
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June 15, 2014 regarding Vemma are publicly available on the FTC website at
http://www.ftc.gov/about-ftc/foia/foia-reading-rooms/frequently-requested-records.
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75.
By email dated August 4, 2014 from Ms. Allison Tengan of Vemma to Mr.
Jonathan Hill of the FTC, Ms. Tengan stated: I am looking to find all consumer
complaints, investigative records and public records for Vemma Nutrition Company.
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76.
A true and correct copy of the various emails (dated July 31, 2014, August
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4, 2014 (two), and August 5, 2014) between Ms. Tengan of Vemma and Mr. Hill of the
FTC are attached hereto as Exhibit 22 and incorporated herein by reference.
77.
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No later than August 4, 2014, Vemma was on notice of the following
complaint on the FTC website:4 As a U.S. citizen, I am very concerned about a company
called VEMMA that is based in Scottsdale, AZ. The CEO and founder of VEMMA is
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B.K. Boreyko. The purpose of this letter is to file a complaint about this company with
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your office. It is my perception that this company, VEMMA, is run on a pyramid based
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business. Furthermore, it is my understanding that any business that is structured in this
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manner is a illegal. Unfortunately, my son has been introduced to this company (about a
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year ago) and has dropped out of college with the pursuit of getting rich without having
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to go to college. The audience and recruitment that VEMMA targets are high school
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graduates and enrolled college students. Their website and social network marketing
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entices youth to drop out of college and join their company to earn an unlimited income
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while bypassing higher education. So, in an indirect way, VEMMA influences this group
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of people by advertising that they can get rich quickly on a high school diploma. Please
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take the time to visit http:www.vemma.comopportunityget-paid.cfm and go to the
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Opportunity section and drop down to how to get paid section and view a video that
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tries to pursued and influence youth. http:www.vemma.comopportunityget-paid.cfm In
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my personal family life, this company has interfered with my sons desire to complete his
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All entries from the FTC website that are included with this Complaint are set forth as reflected
on the FTC website, with the same spelling and grammatical errors as set forth on the website.
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college degree. He was in his third year of college when he dropped out. The basis of
VEMMA is a get rich program that entices young minds to pursue a part time job making
an unlimited income and earning a free car for their efforts. I am a concerned father and
my son has been influenced with this company in a negative way. His mother and I have
seen dramatic change in his behavior and ability to think for himself. As his father, I am
very concerned about the misleading and negative influence that VEMMA has had with
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my son. Not only did he drop out of college, but he has been living on the streets in his
car for the past three weeks. My son has been persuaded, by VEMMAs training and
negative influences, to have unrealistic expectations for earning an income. I believe he
is not able to think for himself, yet turns to VEMMA for guidance over his family. As a
safety precaution, his mother and I are concerned that our son has been brainwashed with
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this company tactics and methods. Please accept this letter as filing a complaint with
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VEMMA. PS9000: Vemma Nutritional Drink Other-Other Update: 07/05/2013
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Consumer wanted to update his complaint that this energy drink is causing his son to run
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away and misbehave. His son is involved with political group, parmerlj UPDATE
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7/12/13: The consumer wants the FTC to labwork on the Vemma. drink. He want to
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know if there are any drug in the drink that are not listed on the lable. RFields
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78.
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complaint on the FTC website: I was approached and asked to join this company. They
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stated you make alot of money quick and just join its only 500$. They said to me you
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dont have to sell the product, you only need to get more people to join and thats how we
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will be rich. This company is a pyramidPonzi scam and it is getting away with making
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millions of dollars. If you dont have to sell any product and just get paid of people joining
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the company that would classify this as a PyramidPonzi scheme. The founder has been in
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trouble with you guys before and this needs to be looked into. I never heard of an energy
drink mailing millions of dollars that isnt sold in ONE store in the whole United States.
The drink is a cover up and they are pulling one over on you. They dont advertise
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anything they say thats what the people do instead. Not only is Benson Boreyko lying and
stealing from his brand partners he is getting them to lie to everyone else to help him
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scam more millions out of people. This is going around at all college campuses in the US.
They ask you to join and just come to a meeting usually in a basement in someones house
where then they lie to you to convince you to join company for 500$. How is a company
making millions of dollars when you cant go into a 711 or a gas station or convenience
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store to buy it. Because it is a SCAM! Open up your eyes and realize the lies of Boreyko
and the Vemmaverve company. On the site they have a chart which it shows the
percentage of the company earnings with the percentage of the people in the company. 90
of the company isnt making over 7000$ a year but the top 3 is making all the millions.
They are getting the people to join for 500$ and keeping it thats why 90 of the company
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is only making 7000$ a year! This needs to stop please look into this and put an end to
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it.
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79.
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complaint on the FTC website: MAIL: Consumers letter was forwarded by the U.S.
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Securities and Exchange Commission. Consumer is anonymous in his letter. Consumer
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states that Vemma is a pyramid scheme. Consumer states the company is offering a
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business opportunity but no salaries are involved and you are only paid if you bring
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people in.
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80.
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complaint on the FTC website: I am interested in registering a general complaint against
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Vemma Nutrition Company over concern for the general public. While I havent been
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contacted by anyone in the company, I have seen interactions by the companys brand
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partners (via social media) that are cause for concern in the community where I live as
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well as the rest of the United States. These interactions include soliciting high school
students to join their company as a brand partner, encouraging college and high school
students to drop out of school to work for Vemma full time and creating hostile
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environments between themselves, family and friends.
There is fairly significant
evidence that Vemma is operating a product based pyramid scheme. While there are
dozens of companies like this operating out there, I believe that this company is a far
greater threat to our future than other Multi Level Marketing companies due to the
demographic that theyre targeting. Please consider looking further into the practices this
company is using to recruit employees as well as how theyre generating income. I feel
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that at the rate this company is expanding, it could cause significant harm in developing
the next generation of leaders in this country. Thank you.
81.
complaint on the FTC website: I believe Vemma Nutrition Company is a Pyramid

scheme. I have had many of their Brand Partners attempt to solicit money from me,
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claiming that they have a great business opportunity and all I have to do is find other
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brand partners to be put under me to make money. As a part of their business model one
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does not actual sell a legitimate product but rather is paid by getting others to market
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their product, and must pay an initial fee to receive their product, which they do not
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actual sell. I have seen many fall victim to this scheme and am wondering why such
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business practices are allowed to go on.
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82.
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complaint on the FTC website: Our college freshman daughter was contacted about a
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business opportunity. She was to invest approximately $500 and would receive Verve
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energyhealth drinks. (She personally invested $150 before approaching us about giving
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her the balance.) She was also encouraged to get on their automatic replenishment service
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in order to make the most money. Her primary objective was really not to sell these
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drinks but was to encourage her friends to join this opportunity. The more people she
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signed up, the more she would receive back. Little focus was to be placed on actually
selling the drink - they would either sell themselves or would be used in the actual
recruiting process of the friends. From everything I heard and from my research this
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appears to be a pyramid scheme thinly veiled by having a product. They are targeting
college students with little experience and big dreams. They are also capitalizing upon the
fact that it is easy for these students to go into debt. I urge you to please investigate this
company. Representatives state that this couldnt be a pyramid scheme because that is
illegal.
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83.
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complaint on the FTC website: Consumer called to report that his son signed up to bring
sales into Vemma and states that its a pyramid scam selling an energy drink. Consumer
had paid $500 upfront and the first monthly payment of $160. Consumer states that this
is being marketing to college kids. Consumer states that his son is still sucked into this
and believes that he is going to make money. Consumer was drafted by another student.
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Consumer states that no sales are being made to the public all sales are being made to
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other members.
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84.
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complaint on the FTC website: This is an Multi-Level Marketing company. I was not
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contacted by any employee of the company but by a friend who bought their Verve
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energy drink as a product and is an recuiter with Vemma. Without telling me too much
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about it, he invited me to a presentation about the product. It was conducted in a house
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with 50 other young adolescents. A few of the veteran recuiters to tell us about a way to
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make money. Now they were not even selling the product. They briefly glossed over
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some bullshit about Vemma products its creation, nutritional value, and how it fights
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cancer. But most of the presentation was focused on how we can make tons of money
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with a proven method. In fact, they said anyone can make money with some work and
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an intial investment. They did not care about value of the product itself- most of the
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recruiters even admitted that it tastes like crap I bet that is why it would never sell in
supermarkets or connivence stores. No, rather than promote non existent values they tried
to get the 50 or so young people to pay into this ploy by us that we too can start selling
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Verve. The FTC has guidelines about which MLCs are pyramid schemes. Without
knowing how Vemma operates in other parts of the nation, it seems very clear that at
least the group of Vemma salesmen and saleswomen in this Brooklyn house are just
using Vemma products as a tool for a pyramid scheme. The head organizers of this event
implied that with their downlines they were the top salespeople in Brooklyn and quickly
going to be the best salespeople in New York City. They also mentioned how they
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traveled to conferences in Las Vegas and meet with Vemma executives and other
salespeople. It was implied that the company advises their top salespeople and often
shapes recruitment operations.
Bear in mind at this large house gathering, which I am
told happens weekly and at a few other locations, there was no marketing at using Verve,
the only selling point and only thing they were selling was buying multiple cases of
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Verve, for hundreds of dollars, so that we can each start selling Verve to our friends and
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family and become well-off too. What was shocking is the that most of the people that
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there were targeted were in high school. Admittedly, some of the salesmen were high
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school students themselves, selling Verve to their peers and classmates. Yet, I am sure
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that for every teenager, or adult for that matter, who profitably marketed Verve to their
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personal network there are 50 who failed. It is ridiculous that this is happening in high
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schools. I am appalled by the level of penetration Vemma had in certain Brooklyn High
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Schools. Moreover, it is very clear that this group was targeting immigrant and low-
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income students. A selling point that they touted was wouldnt you love to be able to give
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your parents a few hundred bucks? As a college graduate with a math degree it was very
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clear that the Verve networking market was going to get saturated, and that this business
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model while not only being unsustainable but very predatory. The salepeople were happy
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to mention success stories to get more people to buy the product so their fat wallets can
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expand, but they never mentioned how what percentage of people make money or the
retention rate. Furthermore, they acted as if anyone could make money recruiting more
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people into the Verve market. By simple numerical facts, that is clearly false. At best this
business advertises falsely and egregiously but I suspect it is a pyramid sch
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85.
complaint on the FTC website: The consumer wanted to remain Annonymous . The
consumer said that a company that sells Health Supplements.
The consumer said the
company is called Velma. They make their money by offering consumers money to get
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people to join their organizations.
consumer wanted to point out the company Markets toward Young College Students.
86.
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The consumer believes this a Pyramid Scheme. The
complaint on the FTC website: This company is soliciting money from high school
students ($500) and putting high pressure sales, and the claim of making alot of money as
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part of the enticement. This can not be legal, to get teenaged kids, not even 18 yet, to sell
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their product. Not actually selling the product iteself, but getting their friends to buy into
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the company for $500 and then turning around and trying to solicit their friends and
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classmates to do the same - which is how you make money. It is the standard
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ponzi/pyramid scheme. The problem I have is them targeting MINORS to do their dirty
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work. Adults know better, kids do not. --- Additional Comments: I would like the
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company to pull out of Basking Ridge NJ and stop enticing the High School kids and to
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cease any and all operations with my town and any towns surrounding the immediate
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area.
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87.
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complaint on the FTC website: I was invited to an event by a close personal friend.
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The brand partner involved told my friend that he was not to disclose to me the reason for
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the event. When I arrived, I was introduced to several brand partners. These partners
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showed me videos meant to be inspirational and told me stories of how the business had
supposedly helped them. One person claimed that the product helped get his mother off
of medication. I was told that in order to make money, I had to recruit my friends in the
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same way that they were attempting to recruit me. They failed to mention that in order to
be recruited, you must purchase approximately $150 of their product. In order to make
money in their business, your recruits must also purchase their product, from which you
earn a commission. They consistently urged me that this business was not a pyramid
scheme because it was endorsed by Dr. Oz. However, the structure of their business is
far too similar to that of a multi-level marketing or pyramid scheme. My close friend fell
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into their trap and I want to help put a stop to it.

88.
complaint on the FTC website: The consumers father states she got involved in a
pyramid scheme with company called Vemma in Tempe. AZ. He states his daughter got
involed in the healthe drink section. All you do is recruit people. You buy into different
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levels. Everytime you get someone to join you get a portion. his daughter purchased the
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$150 level. They are targeting young kids.
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89.
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complaint on the FTC website: Im wondering how long this business will last (if its
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even legal?) People seem to be making money but it looks like a pyramid scheme to me.
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90.
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complaint on the FTC website: I was approached by b(6) with what he called a business
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opportunity which actually turned out to be a solicitation to purchase a starter kit for
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Vemma nutrition co. After doing my own research and hearing other victims accounts
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of their experience with the company, it has become abundantly clear that Vemma is not
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a Multi-Level Marketing Company as they claim but is in actuality a pyramid scheme, as
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the only possible way to make money is by recruiting new prospects into the chain. b(6)
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even stated that the Verve energy drinks were used for promotional purposes only and
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would not be sold, as the real income comes from the recruitment process.
91.
complaint on the FTC website: I was contacted several times this past summer to join
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the YPR Vemma MLM organization. I was told Id be rich quick, I was told I was my
own boss, I was told it was NOT a pyramid scheme. Further more, I was almost bullied
by those who have joined ( calling me uneducated, ignorant, lazy etc). I do not hold any
of those traits. As an eagle scout, college student, and volunteer, I have been and will
continue to be a good citizen.
Unfortunately, my friends of many years have joined in
spite of my warnings. After a few months of loosing substantial amounts of money to the
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system they quit. I know one person in my area who has attained the praised BMW. After
religiously reading and analyzing the FTCs defining of a pyramid scheme, I am
confident that this is just that. -What is the retail price of vemma? Why have I NEVER
seen it sold in a store-Technically, once I join, I can throw out the cumbersome cases of
vemma because they are just a cover- a symbol of my new subscription-Why promise so
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many kids wealth? Why feed kids lies and preach that college is not useful anymore, and
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to be successful you need to take tasks such as soliciting useless products upon your self.
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They know children want the car, they want to be their own boss. It is obviously who
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the target audience is.-Why would the CEO and wonder child Alex Morton claim Coke
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attempted to buy Vemma for 2.2 Billion. Shortly after they both posted this libel on
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instagram and twitter, it was later revoked as a rumor. Wouldnt the CEO know if it was
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a rumor first? Sure they took it back, but how many kids saw that and gave them
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confidence to invest? I know I was younger and less wize, seeing such a claim with a
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creditable company such as Coke would win me over instantly! Having attended one, Im
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aware the Vemma meetings are basically propaganda sessions, filling kids heads with
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lies. Ive even heard one partner claim American Capitalism is a pyramid scheme. You
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are NOT selling a product. You are simply getting paid to get more people to join. Simple
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as that. I would really appreciate an investigation, as the number of people I see seriously
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financially effected by this increasing. For the record, I am not a business major nor am I
a business owner. However, I am an engineer who is more than capable of viewing a
system and pointing out obviously infidelities.
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92.
complaint on the FTC website: There is a company by the name of Vemma scamming
hundreds of high school underage children into joining their pyrammid scheme. They
make them buy-in $500, give out free product and then sign up friends to make a $40
commission.My little brother has stopped going to school trying to make his money back,
and like him there are hundreds of kids paying hundreds of dollars to this failed energy
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drink company. PLEASE do something about it!!

93.
complaint on the FTC website: Hi, My 19 year old son recently told me that he became
a brand partner with Vemma about 3 months ago.
He was a good student with a
promising future, bi-lingual, musically talented, and happily studying as a sophomore in
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college. Since becoming involved with Vemma, he is no longer interested in college or
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music, and tells me Vemma is his only career plan. I researched the company and found
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several mis-truths in their videos (BBB rating, NBA, Dr. Oz, prior FTC rulings, etc.) and
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explained the non-sustainable business model to him. But it is as though he has been
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brain washed. He is buying product monthly as required at about $168 per month and
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has purchased a kit for $500, so he is probably out about $1000 so far. He has saved his
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birthday money, etc. ever since he was a child, so he does have access to a few thousand
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dollars. Otherwise, we have saved and pay his tuition and living expenses. I believe
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marketing a pyramid scheme to naive teen agers is a very evil way to make money. I
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suppose losing his money is a lesson for him and I dont really mind that so much. But I
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know there are other young people who are not in a good financial position and this
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would be a terrible hardship to them. The aspect that I find very troubling is the brain
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washing and the discouragement of education. They will say that they have established a
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tuition reimbursement program, but that is smoke and mirrors.
Their videos and
motivational techniques all point out that college is a waste of time and resources. And
the young people of course find that appealing. I am not sure if they are breaking the law
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or not. The emphasis is on recruiting brand partners on your downline, not selling
product, which sounds to me like fitting the pyramid model. But even if not illegal, this
company is highly unethical and is ruining our future generation. I did not warn my son
of this kind of business in advance and they seem to have discouraged him from telling
me until he was fully integrated so now I cannot seem to reach him. I suppose he will
figure it out eventually but he is losing valuable time in preparing for his future. I would
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like to ask that you investigate them and try to find a way to shut them down if at all
possible. I am glad to provide any information that I can to help. It would also be good
if you could warn the colleges and the young people of this kind of business. It is much
easier for them to say no if they are familiar with the concept in advance. I never
imagined that this would be such a problem. I warned my children of drugs, alcohol,
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diseases, and credit cards. I just did not realize these kind of companies were still in
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existence and preying on young people. Thank you, b(6).
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94.
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complaint on the FTC website: This woman/company defrauded my elderly senile 80
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year old father for over $8000 with her scam pyramid scheme. In the matter of just a few
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days, she involved 4 entities to charge his card up over $8000 by convincing him to buy
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into some Miracle healthy drink that would supposedly fix all his medical problems. I
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need help to get his money back!!!
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95.
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complaint on the FTC website: Vemmma solicits people for money and promisese
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financial freedom. Their pyramid scheme is somehow able to bypass FTC regulations or
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they have found some legal loophole to allow them to exist. They continually scam
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thousands of people, mainly young naive high school students and mislead them into
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automatic inventory loading and recruiting. There business model is a masked pyramid
scheme plain and simple. By using their direct sales techniques theres a risk transfer
taking place from the corporation to the individual distributor. This is fine when the
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distributor has better information than corporate, like franchises, but vemmas business
model lacks that component altogether. They offload their risk to to distributors using
highly skewed illegal incentives. Furthermore, they substantiate most of their claims
through false celebrity endorsments and partake in plain advertising fraud. Vemma uses
its auto-delivery (requirement of products to be automatically purchased by their
distributors) as their primary revenue source. Their product sales are not true consumer
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product sales ...they are simply forcing their own distributors to buy an arbitrary amount
of product each month to qualify getting paid by Vemma. This is a process commonly
referred to as frontloading.Here are a few other indisputable, undeniable facts about
Vemma:- BK Boreyko changed his name from Benson Boreyko so that Google search
engines wouldnt turn up the fact that he lied to parents about being able to cure their
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childrens ADHD. He lied about it repeatedly even though there is documented proof he
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did this.- Vemmas exorbitant pricing is not a reflection of its quality- Vemma affiliates
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have lied multiple times about their income or current paid rank. BK Boreyko has full
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knowledge of this (he can verify his elites incomes if he wants to) yet still brings them
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on webinars, training calls and allows them to represent the company.- BK Boreyko
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wrote a letter in 2006 to the FTC asking them not to make MLMs verify and make public
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their customer base. Whether or not an MLM has a majority customer base is the ONLY
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WAY they distinguish themselves from being a pyramid schemes. Yet BK Boreyko (and
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the DSA) actively fight any attempt to have their customer base be analyzed or available
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to the public (circumstantial evidence says it doesnt exist).- Well over 90% of Vemma
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affiliates will (it has remained consistent for the past few years) make less than minimum
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wage. The income is even less considering that Vemma affiliates are forced to purchase a
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set amount of product ever month for no good reason other than to generate commissions
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for the top of the pyramid.In short, a pyramid scheme is a scam in which the vast
majority of income comes from recruitment. That is all. It doesnt matter if a companyhas a product- has notable sponsors- hasnt been shut down yet All it has to do is draw
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the majority of its income from recruitment and it operates as a pyramid scheme, which is
illegal in the United States because it is inherently deceptive and unsustainable by its very
nature.
I ask the FTC to please do something to protect the public by initiating a
thorough investigation into Vemmas illegal existence.

96.
complaint on the FTC website: I was approached by friends who Ive known since
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middle school. They told me they wanted to talk about a business opportunity, and told
me I would be perfect for the business. They told me about Vemma, the process and the
rewards and so on. After politely telling them know they preceded to belittle me. Tell me
that attending college was a waste of time and that I was doing nothing with your life.
All members of Vemma proceeded to block me on social media sites. While I feel that
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Vemma has negatively affected social aspects of my life I feel it is necessary to file a
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complaint on the grounds that the business did not approach me about the product itself.
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Instead, the calls and personally meetings I had attended were about buying into the
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business itself. The meetings did not aim to promote me, as a consumer, to drink vemma
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products but to pay for a builders kit to become a brand partner to sell the drink as
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well, which makes it mandatory to buy arbitrary amounts of Vemma product a month. I
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request that the 70-30 rule be applied in the investigation of Vemma and that Vemma be
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acknowledged as a pyramid scheme.
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97.
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complaint on the FTC website: MAIL: The consumers anonymous complaint was
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forwarded to us by the U.S. Securities and Exchange Commission. They claim that
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Vemma Nutrition Company is a pyramid scheme that scams thousands of people into
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automatic inventory loading and recruiting and should be shut down.
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98.
complaint on the FTC website: My college age son joined Vemma a month ago and it
appears to be a pyramid scheme. He will receive monthly shipments of the product
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whether he sells it or not. He is encouraged to get his investment back by recruiting

others to join. It cost $500 to join and the shipments are $160 every month. He hasnt
made any money yet; no customers have bought the product and he has no recruits either.
When I suggested stopping the monthly shipments until he sells what he has, he says he
cant do that because then he wouldnt be able to recruit others. This company preys on
young adults who do not have the life experience to discern the possibility of a scam;
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they hold meetings where they tell them what they want to hear to get them to join. He is
under the impression that he will soon be making large amounts of money while
attending college full-time. Has this company ever been investigated?
99.
complaint on the FTC website: The FTC brought a complaint against New Vision
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International, Benson K. Boreyko, and others. Docket No. C-3856 dated 3 March 1999.
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These individuals have moved their operations to Boca Raton, FL and are operating
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under the name Vemma Nutrition. They are selling an energy drink by recruiting college
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students, taking money from them under false hopes which in some cases includes
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student loan proceeds. It is a typical "pyrimid skeem" which they are calling
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"multi level marketing aka mlm." The process works as follws: they recruit a
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college student and claim that they can make 100,000s of dollars and have a cash flow
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for life if they join the group (like family.) The cost to the student is $500.00 down and
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$150 per month. The student is then expected to recruit other friends and students with
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the promise that they will get a percent of all moneys brought in by their recruits who in
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turn are promised the same thing. The product is an energy drink with vitamins. They
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claim however that it will reduce blood pressure, prevent turmors etc. All of of this is
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done via telephone and texting not on their web site. Your order resolving the case
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mentioned above resulted in a ban from this activity for 20 years. They just moved to
Florida and changed the product name. Other-Other Update.
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100.
complaint on the FTC website: MAIL: Consumers letter was forwarded by the U.S.
Securities and Exchange Commission. Consumer states that Vemma Nutrition Company
fits the description of a pyramid scheme. Consumer states that they recruit people into the
group and not sell the product.
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101.
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complaint on the FTC website: It seems that Vemma is getting more active in
Switzerland (and Europe in general) since last year. A couple of People I know have
become brand partners, so Ive looked into their promises. In my opinion Vemma is
clearly a pyramid scheme (looks pretty much the same as Herbalife) and can not work out
for 99% of the people who join. Im pretty sure that they are not able to make 70%
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through retail sales, which would make them Illegal in the U.S.A. or Canada. As the
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Headquarters of Vemma lies within your jurisdiction, Im sending this complaint to you.
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I know that the FTC is currently investigating Herbalife, so I would urge you to also take
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a closer look at Vemma. Thank you very much and best regards!
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102.
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complaint on the FTC website: I have been, over the course of a year, been solicited the
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company "Vemma." I say company because, although they have a tangible
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product, what was being sold was the integration into their business as a "brand
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partner." It was explained to me that in order to get into the company I would have
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to first invest five hundred dollars of my own money, at which point my the primary
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method for me to make money would be to recruit others who would also be paying this
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five hundred dollars. On top of that it was made clear to me that a residual monthly
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expense of 160 dollars worth of product would be billed to me, assuring that my residual
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income would be secured if this was paid. I would like to complain about Vemma, which
is very clearly a pyramid scheme, and by the definition of the FTC which requires a
certain percentage of a customer base in order to be sustainable, it falls short of this mark.
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Unfortunately I do not have privileged access to those type of statistics, but the model
alone insinuates revenues come from the distributors involved and not by sale of the
actual product.I am a business student studying at the University of New Haven,
Connecticut. I pride myself that I am being educated on the fundamental of business
practice by people who are veterans of the field. Every day I am forced to witness
Freshman (especially those in the College of Business) being conned into this scheme.
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Therefore, on top of the fact that this is an illegal business practice, I am also asserting
that the business is the poisoning the minds of the promising youth of our country and
that steps should be taken to remedy this.Vemma, unlike companies similar to it,
glamorizes their company in such a way that it attracts a particular demographic who are
promised success in return for their loyalty. I am convinced it is their passion which fuels
this scam. Other-Other Update.
103.
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complaint on the FTC website: Consumer states that he is aware Vemman is a Pyramid
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scam. Consumer states that this company use to be New Vision Internation. He wanted to
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file a compalint due to it seems as this company is scamming the Students.
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104.
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complaint on the FTC website: Consumer states that a company called Vemma that sells
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energy drinks and the company recruits people to buy products from the company
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website only and customers have to pay a $250 enrollment fee. Consumer heard about
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the company through his minor son. The caller states that current customers, usually
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minor aged, bring in other customers to purchase the products. Caller states that the
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customers usually will use their parents credit cards to make the purchases from the
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website without the parents knowledge. Caller states that the company holds private
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meetings for the minor aged customers in his area. The caller states that the company
uses the ruse of claiming that the customers earn money by bringing in new customers
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which is basically a pyramid scheme. Caller states that the minor aged customers do not
make any money.
105.
complaint on the FTC website: This company has made a huge and sudden impact on
my generation. It has exploded through social media, mostly promoting for people to join
in the marketing campaign. With a little research it becomes evident that this is a typical
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pyramid scheme, convincing people to buy inventory of the product and then recruit
others to sell beneath them, keeping some of the profits. In this way, the top of the line is
making much more money simply by recruiting more people to buy the required
inventory than actually by selling the product. The second problem that I see with this
product are the false health claims made by the representatives of the company to
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improve immune function, cure high cholesterol, and relieve inflammation and pain. The
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company also boasts about clinical studies performed, and upon reading these studies I
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can easily tell that they are not nearly up to par with any study worthy of publishing in
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American Journals. The claims are not supported by the studies and the product is not
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available in stores, leading me to believe that the company is simply trying to get as
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much money as possible out of the representatives that have bought in to the promise of
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six-figure earning and a Mercedes as a bonus. I am hoping that something can be done
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before too many people put their savings on the line just to make money for a few people
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at the top of the pyramid, all while possibly placing the lives of other consumers in
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danger by disseminating misleading information.
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106.
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complaint on the FTC website: ive been contacted by sevwral representatives of vemma.
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i attended a meeting where everybody is so pumped up and excited and this opportunity
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is made out to seem as if it will be life changing. the person in charge of the meetinf and
according to everybody he is at the higheat level and qualifies for a mercedes benz ans
makes 6 figures a year was only 16. so after they sell you this story they tell you that
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investing these $500 and reffering people you can can have it all. personally it sounds
like a pyramid. the sad thing is that tjey prey on college students and recent collegw
grads.
107.
complaint on the FTC website: Hello, My name is b(6) and I am not, and never will
be, an active member of the fraudulent, brainwashing company called Vemma. Im an
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informed college freshman at the University of Indianapolis, and I have literally watched
some of my friends get sucked in by this company. From what I have researched,
everything about Vemma represents an illegal pyramid scheme. Yes, they sell product,
but the consumers are prodded to recruit new members over selling the product. These
kids go as far as traveling to Chicago to run demonstrations and get more people to sign
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up so they can make money. Its ALL about how many people you recruit. They have
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these guys drive around nice cars and give these presentations telling these naive
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teenagers that they are going to reach financial freedom if they just buy this product and
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recruit more members. Over 75% make less $1,400 in a year. A minimum wage job,
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worked at just 20 hrs/week will make $8,000 in a year. The number of people that make
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any type of substantial money from this is less than 1%. This company has brainwashed
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these kids into thinking they are literally changing the world and making lives better by
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recruiting new members. They connect these quotes about success and making lives
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better to this company, and its a shame. Anyone who objects to the system needs to be
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better informed about it. Its sickening, and its a travesty. I truly hope that you will do
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everything in your power to shut this company down. Benson BK Boreyko is a fraud,
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and he is raking in money from teenagers through this pyramid scheme. I cannot bear to
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watch these kids think they are quickly on the way to mansion, yachts, and fancy cars.
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99.8% of people lose their investment amount. Again, this company makes it very clear
that your main goal is to recruit new members - they offer more compensation for
recruiting members. They promise this road to financial freedom, but kids are losing
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more money. They make you pay $180 a month to stay in the program, and they make
new recruits buy a $500 starter pack. In short, if the consumer fails, Vemma has made
their money off of them. If the consumer breaks even, Vemma has made money off of
them. If the consumer makes money, Vemma has made money off of them. Its
incredible that no national spotlight has been shined on this company. They are
convincing kids into thinking that the way to change the world is to join Vemma. Its
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awful and it needs to be stopped. Thank you for your time. I look forward to seeing some
sort of action being taken. A very angry consumer, b(6).
108.
complaint on the FTC website: I discovered this company (vemma) when my nephew
was recruited as a distributor and tried to recruit my son into the scheme late last year. I
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researched the company and believe it is an illegal pyramid scheme. While vemma does
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have products, the products are not competitively priced with its peers and are mainly
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sold to distributors with little or no sales to people outside of the business. The distributor
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is required to purchase products through a monthly auto-ship program in order to qualify
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to be paid by the company. The company targets high school and college kids, luring
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them in with visions of lots of cash (up to $100k/month!), a life of residual income,
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retiring their parents, driving fancy cars, and travelling the world. I have watched several
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of the vemma reps presentations and there is very little mention of retail product sales
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but heavy emphasis on recruitment. Whenever the product is mentioned, it is touted as
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being some clinically tested wonder drink responsible for preventing leukemia and
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diabetes (while stating the competition energy drinks (eg redbull) cause cancer). Like
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many MLM companies, the vast majority of vemmas distributors make little or no
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money as per vemmas own payment disclosure, however there is a constant barrage of
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exotic cars, world travel, and a life of leisure after "grinding" the business.
The concept that it is the distributors own work ethic that will determine success or
failure is also presented and there is no disclosure of the actual percentage of distributors
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that make even a minimum wage equivalent. There is also a car lease bonus program,
enticing these kids and young adults with the vision of driving an expensive BMW,
Mercedes, or even a Lamborghini. Fortunately, my son was able to see this scheme for
what it actually is and did not join. My nephew, however, is convinced he will be in that
<1% to get into a 6 figure and above income level. My son and nephew are both
students at Marshall University and apparently vemma is spreading like a virus on
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campus. I am afraid that there will be several students abandon college based on the false
hopes and dreams of this scheme. I believe that vemma qualifies as an illegal pyramid
scheme and ask that the FTC look into vemmas and its distributors business practices.
Thank you for your attention to this matter. Sincerely, b(6) Other-Other Update.
109.
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complaint on the FTC website: My name is b(6). My 17 year old daughter has become
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involved with what I consider a pyramid scheme. The company is Vemma, which from
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my googling the name came across many articles about complaints to the FTC and BBB.
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I contacted my local Ags office. They refered me to the department of business
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regulation who in turn gave me 3 options of which one was to contact the Ags office.
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Why am I not surprised I got the run around. I attended a meeting a few weeks ago with
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my daughter. Their own rules due to a settlement prohibits 17 and below from becoming
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involved with the company but yet my daughter was allowed to become involved. The
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main emphasis of the plan is to recruit more people. You cannot sell the product and
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make money you have to recruit and spend $150.00 monthly to qualify for any payment.
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They also push a $500.00 one time investment to qualify for everything they offer. That
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is what they recommend to everyone. I asked 3 people how they make the majority of
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their money. By selling the drink or recruiting. All 3 dodged the question and never
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answered my question. Speakers boldly telling possible recruits you think you cant
afford $500.00 sell what ever you have to to raise the $500,00. Its a drop in the bucket
compared to the return you will get back in a short amount of time. They were making
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health claims that it lowers cholesterol. One speaker said a family member lowered their
cholesterol 40 points just by drinking the verve drink. They also tout $50,000 BMW as a
bonus when you get to a certain level. One speaker showed the keys to the BMW that he
qualified for. After googling Vemma. I came across more than a few blogs and you tube
videos that stated that you actually lease the BMW and you get bonuses to pay towards
the lease. Making outrageous income claims of thousands a month in a few months. No
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proof to back up these claims. Just words and fast talk speaking. They are specifically
targeting teens and college students calling it the YPR ( young peoples revolution ). One
of the speakers claims a person he knows dropped out of the last year of college to go full
time with Vemma. I cannot get through to my daughter what a scam this is. She works a
part time job and it took her 6 months to save $900.00 she was saving for a car. Someone
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invited her to one of the Vemma meetings and now she is hooked and $150.00 into this
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scam. Im really worried that she is going to end up with the monthly commitment of
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$150.00. She is mad at me for not supporting her. Cant do that when I know where this
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is going to end up. It really angers me that they get away with this crap. Im losing sleep
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over this. Shes going to lose all her money. I cant convince her of that. Why are these
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people constantly getting away with this?
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110.
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complaint on the FTC website: On Dec. 26, 2013 I was recruited into the Vemma
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Nutrition Company through a third party VemmaBuilder. b(6) my enroller who I never
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heard from after he convinced me to join this Multi Level Marketing Scam for
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$19.95/mo. plus the cost of some very expensive products. I was convinced to purchase
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the most expensive but supposedly the best one for $80.00/mo. and my wife was
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convinced to purchase the weight loss products two boxes with 16 servings and a shaker
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bottle for $112.00. The Bode-e Rest for nighttime tastes like urine and the Bode-e Burn
have not helped at all. We spent well over $1,431.13 from Dec-Mar. were discriminated
upon by their inadequate and false advertising of their product and business opportunity.
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My number one complaint. Now in March I decided that the $19.95 I was paying them to
help me build my business with more recruits which they said they would take care of by
recruiting 80% of members placed in my Success Line. Yes they placed over 3000 people
in my ACCT none under my Success Line where I would get paid for the sales. After 3
months we decided the $19.95 a month was a waste of money we didnt get any payment
for the recruits and the products we bought. I called Home Office and explained that
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VemmaBuilder was not holding up to their claim of making some money within a couple
of months with their $19.95/mo. system. The Rep. informed me to resign from
VemmaBuilder which she did right on the phone with me and then instructed me to go to
the Company Website and open another account without the third party. That was March
19, 2014 on March 21, 2014 I opened another account and asked the people I enrolled to
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do the same so they would continue to be in my MLM. One of my recruits didnt close
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his account and just opened another one so that gave him two active ACCTS, then there
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were several other members one with four accounts, and three more with two active
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accounts each! I called to inform them of this the Rep. terminated me after having bought
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$1400+ of products --- Additional Comments: I would like to be reimbursed for all the
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products that we bought $1431.13 plus $13,568.87 for a total of $15,000.00 which is the
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amount I could have made in a one month period if I would have had the opportunity
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which they Discriminately and Unjustly took away from me while at the same time
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allowing other people to keep their accounts even though they had two active accounts
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and I only had one active account and one that they had me resign from this was not my
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doing as they are implying.
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111.
complaint on the FTC website: I had signed up for the vemma business under the
impression that this was a legitimate business. I had to purchase product at $85.36 in
order to get involved, once involved I realized that the company was asking for more and
more money and was not only not a legitimate business but a pyramid scheme. I then sent
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an e-mail asking that they remove me from the call list that I was no longer interested and
since then they have continued to pull funds from my account that I have not agreed to.
Now they are telling me that I must pay $39.95 more for the product or return it, and an
additional $29.95. I am not sure what they are saying that is for. --- Additional
Comments: I would like to have my funds returned to me, but more importantly I want to
make sure that they can not take any more out of my account. What they are doing now is
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stealing from me and I dont appreciate it.

112.
complaint on the FTC website: A friend asked me to join the Vemma meetings at the
collage (MSU) and he mention this would be a great was to make money on the side. I
attended 2-3 meetings before I agreed to sign up as a Business Partner. which means
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Vemma takes over $500.00 for the starter package. Vemma is a company that sells
14
energy drinks, weight loss drinks and shakes and Anti-oxident drinks. In the meetings, it
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is said that all the drinks have a high volume of vitamins and other natural herbs to care
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for the free radicals within the body. Along with other herbs to maximize the vitamins. I
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was in class and my Professor stated that his wife needs more iron and vitamin Bs for
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her to get treated for Chemo. I brought him and his wife samples of the Anti-oxidant
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shots and the free sugar vemma that has all the vitamins in each drink.
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fallowing week, My Professor handed me a pile of papers from Etablishment Inspector
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Report, United States of America Federal Trade Commission, ect.. I asked how he got all
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the papers and he stated that his wife has worked for the pharmaceutical company
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checking the medicine for over 30 years and in fact she did the research. I read all the
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fine prints and was shocked to read that Vemma has been known to have allergic
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reactions, hospitalization, swelling of the joints and even high amount of lead in each
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After class the
drink and a pyramid scam, plus more. I called my friends that I have given these product
to and asked them to throw it away. These drinks may cause cancer and not to drink any
of it. b(6) I got in time ( heart surgery), but b(6) drank the full care with his associates
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and costumers. (I gave b(6) a case for he welcome open business). I called Vemma and
asked why no one knows about the lead in the drinks? I also stated that I want my money
back and she said she would give me a label to get he product there with no charge and I
only get money for what I have. I explained to her that I was giving these drinks to
promote Vemma and many student are unaware of the truth --- Additional Comments: I
have proof of the money Vemma has taken from my account and want all of it back, I
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have only been associated with this company from 1-13-14 /2-23-14. A shade over 30
days.
01-13-14 $530.95 02-11-14 $150.90 02-13-14 $79.95 I have a statement that
proves Vemma took $150. and two days later I ordered $79.95 for a friend with his
welcome open business. If I would of known the full truth about what contains within
the drinks, I would have stayed clear away from it from the star.
113.
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complaint on the FTC website: Why are these for sale on Amazon at 1/2 price? Are
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college students being taken advantage of?Michelle CelarierApril 3, 2014 |
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NYPOSTVerve energy drink company tries to stay off regulators radarVemma, the high-
17
flying company behind Verve energy drinks, wants to stay off regulators radar.Founder
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& CEO Benson K. Boreyko said the nine-year-old multilevel marketing company is
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changing its business practices to get ahead of any possible fallout from the Federal
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Trade Commissions investigation into Herbalife, which has a similar business model. I
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always want to stay on the good side of the FTC because they have guns, Boreyko told
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The Post.Vemma, which recruits students to sell its caffeine-fueled drinks on college
23
campuses, will no longer require salespeople to make minimum monthly product
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purchases of $150 to qualify for commissions. The company will also end sign-up fees.
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The changes, which went into effect on April 1, set Vemma apart from many MLMs,
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including Herbalife, which requires distributors & their sales recruits to make
minimum product purchases of more than $2,000 to qualify for royalties. Even those
uninterested in recruiting have to buy an introductory member pack & pay an
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annual membership fee after the first year. Critics of multilevel marketing companies
contend that these out-of-pocket expenses can quickly add up and that most salespeople
end up losing money. But they are lucrative for the companies. Boreyko acknowledges
that the changes at Vemma, with revenues last year of about $200 million, could hurt
sales initially. But why not clean up now before I hit a billion dollars and get bulletproof
so when the regulators hear your name, theyll say, This is the way it should be done,
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Boreyko said. Herbalife is under attack from activist investor Bill Ackman, who claims it
is a pyramid scheme in which salespeople make more money recruiting new sales agents
than selling products to consumers.Last month, the Los Angeles-based nutritional
products company disclosed that the FTC had opened an investigation, but has
vehemently denied it is a pyramid scheme. The Vemma changes highlight some lingering
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issues for MLMs, which remain controversial years after the FTCs probe of Amway set
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guidelines for the industry, experts said. In cases where MLMs have been found to be
15
pyramid schemes, the money brought in by recruitment in form of fees and product
16
purchases have been the mechanisms that have allowed the pyramids to exist, said MLM
17
expert William Keep, dean of the School of Business at The College of New Jersey. Even
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some industry insiders think product purchase requirements have to go. It would fix a lot
19
of issues, MLM lawyer Kevin Thompson suggested on a conference call last month with
20
Barclays analyst Meredith Alder. What happens is a lot of people buy stuff they never
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would buy in quantities, they would never have purchased just to qualify for bonuses.
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Thompson admitted the change could make it difficult for some MLM companies to
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survive. Although Boreyko said he doesnt want to throw the [MLM] industry under the
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bus, he now considers his company an affiliate marketer focused on customer sales,
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with e-commerce Web sites, free back office support and free mobile apps. We want to
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be more like Amazon than Amway, he said. Youve never heard anyone call Amazon a
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pyramid scheme. FILED UNDERBILL ACKMAN, ENERGY DRINKS, FTC OtherOther Update.
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114.
complaint on the FTC website: I was first introduced to Vemma through a high school
friend of mine named b(6). He had messaged me on facebook about this really profitable
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opportunity. He would not tell me about what this was until I was in a room with him.
So he invited me to his house for a barbecue where he explained to me what this Vemma
was. At first I was very skeptical of investing my money into this business. So I went
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home and spent two months researching this company. Communications were lost with
b(6) during that two month time period. It was in August where I decided that I wanted to
get involved with this. I had reached out to b(6) to get involved. To get involved, one
must pay 568 dollars and 12 cents. While I was researching about the company, the idea
of a car kept coming up. For someone to be qualified to be an associate of Vemma and to
13
receive a car and full benefits, he or she must pay 1136.24 to be qualified. Therefore that
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individual has to buy one thousand dollars worth of product in two months. Something
15
that is not mentioned is that each month 568 dollars will be deducted out of your bank
16
account for the autodeliverly. It was on August 17th when I placed my first order for
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Vemma. Once the order was placed, the only way I would get my money back is by
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recruiting other individuals and having them sign up for Vemma. I would get points for
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every person that I recruited which would build on the money I would earn. After a
20
couple days into this company I realized that this was a multilevel scheme. I contacted
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the company and was able to receive a full refund on my product. I had lost the money
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for taxes and shipping which would be around two hundred dollars. Vemma is targeting
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young adults because they are vulnerable and easily fooled. Young adults love making
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money and energy drinks, so this is an easy way to make money on this population. I
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want to file this complaint because I cannot see another child be taken advantage of by
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this company. This is a pure and simple multilevel marketing scheme that needs to be
taken down.
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115.
complaint on the FTC website: My first encounter with Vemma was on June 22nd at
6:26 pm. I was messaged on facebook by an old high school friend named b(6). During
the conversation, their was no mention of Vemma. Instead he had asked me if I was
interested in a really profitable oppurtunity. How it works is that the brand partner
(someone who pad the 1126.24 to get involved) invites you to a home event to inform
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you of the company. The individuals at this part belittle for not being involved. These
individuals will then go on to explain what Vemma is and how it is NOT A PYRAMID
SCHEME. I attended the event and was very skeptical on what I haerd. That evening I
went hom and began researching what Vemma is. I started a new job and forgot all about
this. It wasnt until August when I decided that I would give Vemma a shot.
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Communication between b(6) and I were lost so I had to find a new brand partner to sign
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me up. I found ?b(6) to be my guy. It was under him whom I had siged up to become a
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brand partner of Vemma. To become a brand parnter one must be ove the age of 18 and
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purchase 1126.24 dollars worth of useless energy drinks. That is two purchase of 563.12.
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While I was at the parties, I was promised a car for signing up as well as my money. No
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car wa given to me when I signed up and neither was my money. It was after I signed up
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that I was told that I had to recruit twelve indiviudlas for my money to be earned back.
20
The only way to get the car is by having two purchase cycles. When I signed up I was not
21
informed that 563.12 would be deducted from my back account each month. Luckily I
22
had signed up for Vemma during the first week of my Freshman year at college. I had
23
told one of my professors about this and he had infomed me that I had just gotten myslef
24
into a multi-level marketing scheme. It was at that moment when I had contacted the
25
company for a full refund. I was lucky to fall between the 30 day return policy. I returned
26
27
28
my product and was able to recieve a full refund minus the two hundread spent on
shipping and taxes. My intentions for this complaint is to have Vemma shut down for
running a multi level marketing company. As a future teacher, it hurts me to see
42
1
2
3
4
5
6
individuals lose money to schemes like these. Even though I was fortunte to get my
money back, many are not. Vemma needs to be stopped!!!
Update 05/08/2014,
Consumer was calling to ask our role as the FTC.Bmiera.

116.
complaint on the FTC website: I have invested several thousand dollars with this
company over the past year. I have filled a complain and fraud alert discussing the
7
8
9
10
11
12
actions of this company. They are operating an elaborate pyramid scheme, and the
affiliates that represent the company claim many things that are not true. Should I
recieve this settlement I will not proceed further into taking legal action with my
Attorney. --- Additional Comments: I seek full reimbursement for all items purchased
from this company, to the tune of $2500. This is a rough estimate as I can not calculate
13
the total of all orders placed with Vemma since they will not allow me to access this
14
information due to me not ordering $60 or more of their products in the past month.
15
117.
Many (or all) of the Consumer Complaints set forth above in this
16
Declaratory Judgment Complaint constitutes a Claim under the Policies issued by
17
Hanover during the terms of the 2012-13 Policy Period (from August 1, 2012 to August
18
1, 2013), the 2013-14 Policy Period (from August 1, 2013 to August 1, 2014), and the
19
2014-15 Policy Period (from August 1, 2014 to August 1, 2015).
20
2.
During the 2015-16 Policy Period: The FTC Lawsuit
21
118.
The Hanover 2015-16 Policy issued to Vemma was effective from August
22
23
1, 2015 through August 1, 2016.

119.
On August 17, 2015, the FTC filed the FTC Lawsuit against Defendants
24
(and others) seeking monetary relief and also a Permanent Injunction for Defendants
25
alleged violation the FTC Act for its operation of a pyramid scheme.
26
120.
Specifically, the FTC Lawsuit alleges that Vemmas business model
27
depends on recruiting individuals to participate in Vemmaand encouraging them to
28
purchase Vemma Productsrather than selling products to ultimate-use consumers, and

43
that Vemmas marketing effortstargets young adults, including college students, and
Vemmas marketing materials prominently feature young, seemingly affluent
3
4
individuals surrounded by conspicuous displays of wealth, such as luxury vehicles, jets,

and yachts.
5
6
121.
A true and correct copy of the FTC Lawsuit is attached hereto as Exhibit 23
and incorporated herein by reference (captioned Federal Trade Commission v. Vemma
7
8
9
Nutrition Company, et al., case no. CV-15-01578-PHX-JJT, filed before the United
States District Court for the District of Arizona).
122.
10
11
12
On September 18, 2015, after an evidentiary hearing, the Arizona District
Court granted a Preliminary Injunction against the Defendants, finding: (i) [t]he
evidence before the Court leaves little doubt that the FTC will ultimately succeed on the
13
merits in demonstrating that Vemma is operating a pyramid scheme; and (ii) that the
14
FTC has a likelihood of success on the merits in demonstrating Vemma and Mr.
15
Boreyko are operating a pyramid scheme. See, the FTC Lawsuit, 2:15-cv-01578-JJT,
16
Doc. 118, p. 6, 8.
17
C.
Vemma Provides Notice of the FTC Lawsuit to Hanover

123.
18
During the August 1, 2015-16 Policy Period, on or about October 5, 2015,
19
Vemma provided notice to Hanover of the FTC Lawsuit, which was filed on August 17,
20
2015.
21
22
23
24
25
26
124.
Pursuant to the 2015-16 Policy, Section II of the 2015-16 Policy (Common
Policy Terms & Conditions) defines what constitutes Related Claims:

Related Claims means all Claims based upon, arising from or
in any way related to the same facts, circumstances,
situations, transactions, results, damage or events or the same
series of facts, circumstances, situations, transactions, results,
damage or events.
27
28
44
1
2
125.
Under Section VI of the 2015-16 Policy (Common Policy Terms &
Conditions), it provides:
3
4
RELATED CLAIMS
With respect to the Liability Coverage Parts all Related

Claims will be considered as a single Claim made in the
Policy Period in which the earliest of such Related Claims
was first made pursuant to the applicable Coverage Part.
All Related Claims are subject to the Limits of Liability,
Retention and other terms and conditions applicable to the
earliest Related Claim. (Emphasis added.)
6
7
8
9
10
11
126.
Unbeknownst to Hanover, during the 2011-12 Policy, the 2012-13 Policy,
12
the 2013-14 Policy, and the 2014-15 Policy: (i) the Arizona Pyramid Arbitration was
13
commenced alleging that Vemma violated the Arizona Pyramid Scheme Act (44 A.R.S.
14
1733, et seq.) among other statutes; (ii) the Oregon DOJ Claim was commenced against
15
Vemma alleging it is a pyramid scheme; (iii) more than 100 Consumer Complaints
16
were filed against Vemma, more than three dozen of which alleged Vemma was a
17
pyramid scheme; and (iv) the Italian regulators commenced the Italian Proceeding
18
against Vemma for its alleged operation of a pyramid scheme in Italy, through its sale of
19
dietary supplements, in violation of the Italian Consumer Code.
20
21
22
23
24
25
26
27
127.
On March 10, 2014, Vemmas sale of dietary supplements was found to be
entered against Vemma.
128.
Because the FTC Lawsuit, the Arizona Pyramid Arbitration, the Oregon
DOJ Claim, the Consumer Complaints, and the Italian Proceeding are all based upon,
arising from or in any way related to the same facts, circumstances, situations,
transactions, results, damage or events or the same series of facts, circumstances,
28
45
1
2
3
4
5
6
situations, transactions, results, damage or events, they constitute Related Claims

under the Policy.
129.
Pursuant to Section VI of the Policy, all Related Claims will be considered
as a single Claim made in the Policy Period in which the earliest of such Related
Claims was first made i.e., during the 2011-12 Policy, when the Arizona Pyramid
Arbitration was first filed and noticed to Defendants.
7
8
COUNT I
Not a Claim First Made During 2015-16 Policy Period
10
11
12
130.
Hanover incorporates and restates each and every allegation set forth in
preceding paragraphs of this Complaint as if alleged in this Paragraph.

131.
Pursuant to the applicable insuring agreements in the Hanover 2015-16
13
Policy, coverage is only available to Defendants for any Claim first made against them
14
during the 2015-16 Policy Period.
15
132.
Although the FTC Lawsuit was filed during the Hanover 2015-16 Policy
16
Period, the Policy provides all Related Claims will be considered as a single Claim
17
made in the Policy Periodin which the earliest of such Related Claims was first
18
made.
19
20
21
22
23
24
25
26
27
133.
During the Hanover 2011-12 Policy Period, the 2012-13 Policy Period, the
2013-14 Policy Period, and the 2014-15 Policy Period, Claims were made against
Defendants including: (i) the Arizona Pyramid Arbitration; (ii) the Oregon DOJ Claim
alleging Vemma was a pyramid scheme; (iii) more than 100 Consumer Complaints, of
which more than three dozen alleged Vemma was a pyramid scheme; and (iv) the
Italian Proceeding was commenced and found Vemmas sale of dietary supplement was
entered against Vemma
28
46
1
2
3
4
5
6
7
8
9
10
11
12
134.
Because the pyramid-scheme and other allegations of the FTC Lawsuit
(filed during the 2015-16 Policy Period) are the same as the pyramid-scheme and other
allegations of the Claims made during the 2011-12 Policy Period; the 2012-13 Policy
Period, the 2013-14 Policy Period, and the 2014-15 Policy Period (i.e., the Arizona
Pyramid Arbitration, the Oregon DOJ Claim, the Consumer Claims, and the Italian
Proceeding), the Policy provides all related Claims constitute a single Claim and
made in the Policy Periodin which the earliest of such Related Claims was first
made i.e., during the 2011-12 Policy Period.
135.
Although the FTC Lawsuit was filed during the 2015-16 Policy Period, the
other Related Claims made against Defendants were first made against Defendants
prior to the 2015-16 Policy Period and, therefore, the FTC Lawsuit was not a claim that
13
was first made during the 2015-16 policy period, precluding coverage for the FTC
14
Lawsuit (and the other Related Claims) under the insuring agreements contained in the
15
2015-16 Policy.
COUNT II
Late Notice
16
17
18
19
20
136.

137.
Under the Notice Provision of the 2011-12 Hanover Policy (and
21
alternatively under the 2012-13, 2013-14, and 2014-15 Policies), Vemma was required to
22
provide to Hanover written notice of the Claimas soon as practicable during the
23
Policy Periodbut in no event later than 90 days after such Claim is first made.
24
(Emphasis added.)
25
138.
Vemma never provided notice to Hanover of the Arizona Pyramid
26
Arbitration (and alternatively of the Oregon DOJ Claim, the Consumer Complaints, nor
27
the Italian Proceeding) in compliance with the notice provision of the 2011-12 Policy
28
47
1
2
3
4
5
(and alternatively under the notice provisions of the 2012-13, 2013-14, and the 2014-15
Policies).
139.
Policy (and alternatively not afforded coverage under the 2012-13, 2013-14, and the
2014-15 Policies).
6
140.
7
8
9
10
11
Accordingly, these Claims are not afforded coverage under the 2011-12
Because the FTC Lawsuit is a Related Claim to these earlier Claims,
Vemmas failure to provide notice of the original Claim (i.e., the Arizona Pyramid
Arbitration), and alternatively all of the other Claims (i.e., the Oregon DOJ Claim, the
Consumer Complaints, and the Italian Proceeding) means there is no coverage under the
2011-12 Policy (and alternatively under any of the Policies) for the FTC Lawsuit.
COUNT III
Unfair Business Practices Exclusion
12
13
14
15
16
17
141.

142.
The Hanover 2011-12 Policy contains the Unfair Business Practices
Exclusion, which provides:
18
19
20
21
22
23
24
25
26
27
28
This insurance does not apply to Loss on account of any

Claim made against any Insured:
R. Directly or indirectly based upon, arising out of, or
attributable to anti-trust violations or unfair business
practices, including but not limited to any actual or alleged
price fixing, price discrimination, restraint of trade, unfair
business practices, monopolistic practices or any actual or
alleged violations of the Sherman Antitrust Act of 1890, the
Clayton Act of 1914, and any amendments thereto, the
Robinson Patman Act of 1938, the Federal Trade
Commission Act of 1914 or any rules or regulations
promulgated in connection with the statutes described above;
or similar provision of any federal, state or local statutory law
or common law. (Emphasis added.)
48
1
2
3
4
5
6
143.
The FTC Lawsuit constitutes a Claim made against any Insured
which is [d]irectly or indirectly based upon, arising out of, or attributable to unfair
business practices, including but not limited to anyallegedunfair business
practices. (Emphasis added.)
144.
Each and every substantive allegation against Defendants in the FTC
Lawsuit is set forth under the heading, DEFENDANTS BUSINESS PRACTICES.
7
8
9
10
11
12
13
14
(Emphasis in original.) The FTC Lawsuit contains four causes of action, each stating that
the acts or omissions alleged therein constitute a deceptive act or practice in violation
of Section 5(a) of the FTC Act. Accordingly, based on the allegations of the FTC Lawsuit
which set forth the Defendants deceptive and unfair business practices, the Unfair
Business Practices Exclusion applies to bar coverage under the Policy for the FTC
Lawsuit.
145.
In addition, in the Italian Proceeding, which is a Related Claim to the
15
FTC Lawsuit, the Italian Authority brought the proceeding against Vemma, alleging
16
Vemma had committed unfair business practices in violation of Articles 20, 21and
17
23,of the Consumer Code, and ultimately the Authority found the business
18
practice under examination to be unfair pursuant to Articles 20, 21,and 23,of the
19
Consumer Code, on the basis of the following considerations: any pyramid
20
promotional scheme is deceitful. Under the terms of the Policy, all Related Claims
21
will be considered as a single Claim, and because Vemma has been found liable for
22
any actualunfair business practice in the Italian Proceeding (the Authority found the
23
business practiceto be unfair), there similarly is no coverage for the FTC Lawsuit
24
based on the Unfair Business Practices Exclusion.
25
COUNT IV
26
The Profit/Advantage Exclusion
27
28
146.

49
1
2
147.
The Hanover 2011-12 Policy contains a Profit/Advantage Exclusion, which
provides:
3
4
A. Directly or indirectly based upon, arising out of, or

attributable to an Insured gaining any profit, remuneration
or advantage to which such Insured was not legally entitled;
or
5
6
7
8
However, Paragraphs A., B., and C. above shall not apply

unless a judgment or other final adjudication adverse to any
of the Insureds in such a Claim is obtained. (Emphasis
added.)
9
10
11
12
148.
As set forth above, the FTC Lawsuit and the Italian Proceeding each
13
constitute Related Claims which, pursuant to the Policy, shall be deemed a single
14
Claim.
15
Proceeding, it has been established that Vemma was gaining any profit, remuneration or
16
advantage to which [Vemma] was not legally entitled, and the Profit/Advantage
17
Exclusion applies to exclude coverage for the FTC Lawsuit.
Because a judgment has been entered against Vemma in the Italian
18
COUNT V
The Dishonesty/Fraud Exclusion
19
20
21
22
23
149.

150.
The Hanover 2011-12 Policy contains a Dishonesty/Fraud Exclusion,
which provides:
24
25
26
27

B. Directly or indirectly based upon, arising out of, or
attributable to any dishonest or fraudulent act or omission,
28
50
any criminal act or omission or any willful violation of any

statute or regulation by such Insured;
1
2
However, Paragraphs A., B., and C. above shall not apply

unless a judgment or other final adjudication adverse to any
of the Insureds in such a Claim is obtained. (Emphasis
added.)
3
4
5
6
7
8
9
10
11
12
151. As set forth above, the FTC Lawsuit and the Italian Proceeding each
constitute Related Claims which, pursuant to the Policy, shall be deemed a single
Claim.
Because a judgment has been entered against Vemma in the Italian
Proceeding, it has been established that Vemma committed a dishonest or fraudulent

act or omission.
Indeed, in entering the Preliminary Injunction against Vemma, the
District Court quoted the Ninth Circuits Omnitrition decision (79 F.3d at 781) that,
13
[p]yramid schemes are said to be inherently fraudulent because they must eventually
14
collapse. Accordingly, the Dishonesty/Fraud Exclusion applies to exclude coverage for
15
the FTC Lawsuit.

COUNT VI
Alternatively, Known Claim Exclusion
16
17
18
19
20
21
152.

153.
Pleading solely in the alternative, for the 2015-16 Policy Application,
Vemma submitted to Hanover a Policy Application in which Vemma was asked:
22
Is any Insured proposed for coverage aware of any fact,
circumstance, situation that might reasonably be expected to
result in a Claim that would within the scope of the proposed
Liability Coverage Parts?
23
24
25
26
27
154.
The 2015-16 Policy further provides a Known Claim Exclusion as to any
misrepresentation in the 2015-16 Policy Application:
28
51
B. If the Application contains any misrepresentations made

with the intent to deceive or contains misrepresentations
which materially affect the acceptance of the risk or the
hazard assumed by the Insurer under this Policy, then no
coverage shall be afforded for any Claim based upon, arising
from, or in consequence, of any such misrepresentation with
respect to:
1
2
3
4
5
6
1. Any Insured Individual who knew of such

misrepresentations (whether or not such individual knew such
Application contained such misrepresentations) or any
Insured Entity to the extent it indemnifies any such Insured
Individual; or
7
8
9
10
2. Any Insured Entity if any past or present chief executive

officer, chief financial officer or chief information officer (or
any equivalent position) of the Insured Entity knew of such
misrepresentation (whether or not such individual knew such
Application contained such misrepresentations).
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
155.
At the time the 2015-16 Policy Application was submitted, the Defendants
were aware of any fact, circumstance, situation that might reasonably be expected to
result in a Claim that would within the scope of the proposed Liability Coverage Parts,
but Defendants failed to disclose the same to Hanover. Specifically, Defendants knew
that Vemma was a pyramid scheme, knew of the Arizona Pyramid Arbitration, more than
100 Consumer Complaints (including an Oregon DOJ Claim), and the Italian Proceeding,
and also knew that the failure to disclose the same constituted a misrepresentation which
materially affect the acceptance of the risk or the hazard assumed by the Insurer under
this Policy.
156.
Because the FTC Lawsuit is a Claim based upon, arising from, or in
consequence, of any such misrepresentation (i.e., the failure to disclose Vemma was a
26
pyramid scheme, the Arizona Pyramid Arbitration, more than 100 Consumer Complaints
27
(including an Oregon DOJ Claim), and the Italian Proceeding), the Known Claim
28
Exclusion in the 2015-16 Policy excludes coverage for the FTC Lawsuit.
52
COUNT VII
No Pre-Notice Fees and Costs
2
3
4
5
6
7
8
157.

158.
The Policy provides that the Defendants will not incur any expense related
to a Claim without Hanovers consent.

159.
The FTC Lawsuit was filed on August 17, 2015, and Defendants failed to
provide Hanover with a copy of the FTC Lawsuit until October 5, 2015. Accordingly,
10
any pre-notice fees and costs incurred by Defendants related to the FTC Lawsuit are not
11
covered under the Policy.
12
160.
Pending final resolution of the FTC Lawsuit and the completion of the
13
discovery period in this litigation, Hanover expressly reserves (and does not waive) any
14
and all of its rights, remedies and defenses at law, in equity, and under the 2011-12
15
Policy, the 2012-13 Policy, the 2013-14 Policy, the 2014-15 Policy, and/or the 2015-16
16
Policy (and the Policy Applications thereto (and rescission)) including, but not limited to,
17
the right to raise any of the terms, conditions, exclusions and/or endorsements to the
18
2011-12 Policy, the 2012-13 Policy, the 2013-14 Policy, the 2014-15 Policy, and/or the
19
2015-16 Policy (and Policy Applications thereto (and rescission)) as warranted.
20
21
161.
Plaintiff Hanover is entitled to an award of its attorneys fees pursuant to
A.R.S. 12-341.01 because this matter arises out of contract.
22
23
24
25
WHEREFORE, Hanover respectfully requests the following affirmative relief and

declaration:
A.
26
27
28
That the 2011-12 Policy (or, alternatively, the 2015-16 Policy) provisions
preclude coverage for the Defendants for the FTC Lawsuit;
B.
That Hanover has no duty to defend and no duty to indemnify the

Defendants for any Loss related to the FTC Lawsuit;
53
C.
2
3
4
That Hanover is entitled to its attorneys fees, costs and recoverable interest
in this action; and
D.
That Hanover is entitled such other and further relief as this Court deems
just and equitable under the circumstances.
5
6
7
8
DEMAND FOR JURY TRIAL

Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff Hanover
Insurance Company hereby demands a trial by jury.
9
10
11
12
13
14
15
DATED this 15th day of April, 2016.

SANDERS & PARKS, PC
By: s/Mark G. Worischeck
Mark G. Worischeck
Ryan P. Sandstrom
3030 North Third Street, Suite 1300
Phoenix, AZ 85012-3099
16
17
18
19
20
21
22
James K. Thurston
Daniel Tranen
WILSON ELSER MOSKOWITZ
EDELMAN & DICKER LLP
55 West Monroe Street, Suite 3800
Chicago, Illinois 60603
Attorneys for Plaintiff Hanover Insurance
Company
23
24
25
26
27
28
54
CERTIFICATE OF SERVICE
1
2
3
I hereby certify that on April 15, 2016, I electronically transmitted the attached
document to the Clerks Office using the CM/ECF System for filing.
4
5
By s/Annalisa Burns
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
55
Case 2:16-cv-01071-BSB Document 1-1 Filed 04/15/16 Page 1 of 2
INDEX OF EXHIBITS TO COMPLAINT

Hanover Insurance Company v. Vemma International Holdings, Inc., et al.
Exhibit No.
Description
Hanover Insurance Group Private Company Management Liability Policy,

2011-2012

2015-2016

2012-2013

2013-2014

2014-2015
Demand for Arbitration dated February 29, 2012
Demand for Arbitration dated April 7, 2012
Demand for Arbitration dated September 3, 2012
Translation of the March 10, 2014 Italian Order in the Italian Proceeding
10
December 4, 2012 Letter from the Oregon Department of Justice
11
Email dated December 10, 2012 from Michelle Lottner of Vemma to Ms.
Raines.
12
December 22, 2012 Correspondence from Andrea Garcia of the Better

Business Bureau to Michelle Cohen of Vemma
13
Correspondence from Michele Lottner to Ms. Garcia
14
January 16, 2013 Correspondence from Alexandria Nock of the Better

Business Bureau to Michelle Cohen of Vemma
15
January 21, 2013 Email from Michelle Lottner to Ms. Nock
16
February 7, 2013 Correspondence from Alexandria Nock to Michelle

Cohen
17
Correspondence from Michelle Lottner to Alexandria Nock
18
April 4, 2013 Correspondence from Michelle Cohen to Alexandria Nock
19
August 27, 2013 Correspondence from Samantha Oberdank to Michelle

Lottner
20
Correspondence from Michelle Lottner to Ms. Oberdank

Index of Exhibits - 1
21
August 29, 2013 Correspondence from Ms. Oberdank to Ms. Lottner
22
Various Emails (dated July 31, 2014, August 4, 2014 (two) and August 5,
2014) between Ms. Tengan of Vemma and Mr. Hill of the FTC
23
Copy of FTC Lawsuit Captioned Federal Trade Commission v. Vemma

Nutrition Company, et al.
Index of Exhibits - 2
Case 2:16-cv-01071-BSB
Document 1-2
Filed 04/15/16
EXHIBIT 1
Page
1 of 94
Document 1-2
Filed 04/15/16
Page
2 of 94
The
Insurance
Group-
Private
Company
PRIVATE COMPANY MANAGEMENT LIABILITY INSURANCE

POLICY DECLARATIONS
Coverage is provided by:
Policy Number
Hanover Insurance
LHF 8827059
Company
Agency
Agency Code
Hub International
5701024
NOTICE: THE "LIABILITY COVERAGE PARTS" (WHICHEVER ARE PURCHASED) PROVIDES COVERAGE ON A
CLAIMS-MADE AND REPORTED BASIS. SUBJECT TO ITS TERMS, THIS "POLICY" APPLIES ONLY TO "CLAIMS"
FIRST MADE AGAINST THE "INSUREDS" AND REPORTED TO THE INSURER DURING THE "POLICY PERIOD",
OPTIONAL EXTENDED REPORTING PERIOD OR ANY EXTENDED REPORTING PERIOD THAT MAY APPLY. PLEASE
READ THE "POLICY" CAREFULLY TO DETERMINE RIGHTS, DUTIES, COVERAGE AND COVERAGE RESTRICTIONS.
THIS IS A DEFENSE WITHIN LIMITS POLICY, UNLESS AMENDED BY ENDORSEMENT.

DEFENSE COSTS WILL BE APPLIED AGAINST THE RETENTION AND SHALL REDUCE
OR MAY EXHAUST THE LIMITS OF LIABILITY.
PLEASE REFER TO THE "COVERAGE
Whenever printed in this Declarations

indicated in the "Policy".
Item 1.
PART(S)"
PURCHASED FOR DEFENSE-RELATED DETAILS.
Page, the items
in
quotations shall
Person
Designated to receive
Brademeyer
all
correspondence
as
from the Insurer:
Title:
of Finance
Vp
POLICY PERIOD
From: 08/01/2011 To: 08/01/2012 (12:01
Item 4.
meanings
Holdings, Inc
Name: Jeff
Item 3.
same
NAMED INSURED AND ADDRESS

New Vision International
8322 E Hartford Dr
Scottsdale, AZ 85255
Item 2.
have the
AM local time at the address shown in Item
1)
OPTIONAL COMBINED AGGREGATE LIMIT OF LIABILITY

Combined
Aggregate Limit of Liability
purchased
as
for all
"Liability Coverage
Parts"
$5, 000, 000
indicated below.
PURCHASED COVERAGE SECTIONS
Directors, Officers and Corporate Liability Insurance Coverage Part:
Employment
Practices
Fiduciary Liability
Crime
Liability Insurance Coverage Part:
Insurance
Coverage
Part:
Coverage Part:
Kidnap Ransom and Extortion Coverage Part
Yes
EI
No
Yes
No
Yes
No
Yes
El
No
Yes
No
Page
904-0002 08 09
1 of 2
Item 5.
Document 1-2
Filed 04/15/16
Page
3 of 94
FORMS AND ENDORSEMENTS FORMING PART OF THIS "COVERAGE PART" WHEN ISSUED:
Policy
Form:
904-0001 (08-09) Common Policy Terms and Conditions Section

401-1127 (01-08) Offer of Terrorism Coverage
401-1192 (01-09) Notice to Policyholders-Terrorism Coverage Acceptance
422-0082 (01-09) Cap On Losses From Certified Acts of Terrorism Endorsement
422-0083 (01-09) Exclusion of Punitive Damages Related to a Certified
Act of Terrorism Endorsement
904-0048 (08-09) AZ CPTC Amendatory
904-0503 (08-09) Addition to Section V. Waiver of Retention if No Liability
904-0812 (08-09) Addition to Section VIII. Non-Rescindable Side A
Endorsement
SIG-0001 (06-05) Signature Page
Item 6.
PREMIUM FOR POLICY
State Surcharge* and Tax:

Total Premium:
*See State
N/A
34, 066
Surcharge Notice(s) to Policyholder, if applicable
THESE DECLARATIONS, TOGETHER WITH THE COMMON POLICY TERMS AND CONDITIONS SECTION,
COVERAGE PART(S) AND ANY ENDORSEMENT(S), COMPLETE THE ABOVE NUMBERED "POLICY".
Page
904-0002 08 09
2 of 2
Document 1-2
Filed 04/15/16
4Hanover
Insurance
Group-
Page
4 of 94
Private
Company
DIRECTORS, OFFICERS AND CORPORATE LIABILITY INSURANCE

COVERAGE PART DECLARATIONS
NOTICE: THIS "COVERAGE PART" PROVIDES COVERAGE ON A CLAIMS-MADE AND REPORTED BASIS. SUBJECT
TO ITS TERMS, THIS "COVERAGE PART" APPLIES ONLY TO "CLAIMS" FIRST MADE AGAINST THE "INSUREDS"
AND REPORTED TO THE INSURER DURING THE "POLICY PERIOD" OR ANY EXTENDED REPORTING PERIOD THAT
MAY APPLY. THE LIMIT OF LIABILITY TO PAY DAMAGES OR SETTLEMENTS WILL BE REDUCED AND MAY BE
EXHAUSTED, UNLESS OTHERWISE PROVIDED HEREIN, BY "DEFENSE EXPENSES". "DEFENSE EXPENSES" WILL
BE APPLIED AGAINST THE RETENTION AMOUNT. PLEASE READ THE "POLICY" CAREFULLY TO DETERMINE
RIGHTS, DUTIES, COVERAGE AND COVERAGE RESTRICTIONS.

Item 1.
the items in
quotations shall
have the
same
meanings
as
NAMED INSURED
Item 2.
Page,
Holdings, Inc
LIMITS OF LIABILITY
Directors, Officers and Corporate Liability Insurance
$5, 000, 000

Item 3.
in the
aggregate for
all "Claims"
RETENTION
Insuring Agreement A: Individual Non-Indemnified Liability Coverage

Insuring Agreement B: Individual Indemnified Liability Coverage
Insuring Agreement C: Corporate Entity Coverage
Item 4.
0 each "Claim"
50, 000 each "Claim"
PRIOR AND PENDING LITIGATION DATES

1.
Insuring Agreements
A and B:
05/01/2005
2.
Insuring Agreements C:
05/01/2005
Page
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1 of 2
Item 5.
Document 1-2
Filed 04/15/16
Page
5 of 94
Policy
Form:
905-0001 (08-09) Directors, Officers and Corporate Liability Insurance

Coverage Part
905-0320 (08-09) Addition to Section III. Domestic Partner Coverage
905-0434 (08-09) Addition to Section IV. Products and Services Liability
Exclusion
905-0104
(08-09) Addition
to Section I. Crisis
Management Supplemental
Coverage
905-0432 (08-09) Modification to Section IV. Insured Versus Insured
Carve-Out
905-0319 (08-09) Addition to Section III. Employed Lawyers Coverage
Page 2
905-0002 08 09
of 2
4The
Document 1-2
Filed 04/15/16
Page
Hanover
Insurance
Group.
6 of 94
Private
Company
EMPLOYMENT PRACTICES LIABILITY INSURANCE

EXHAUSTED UNLESS OTHERWISE PROVIDED HEREIN, BY "DEFENSE EXPENSES". ANY "DEFENSE EXPENSES"
WILL BE APPLIED AGAINST THE RETENTION AMOUNT. PLEASE READ THE "POLICY" CAREFULLY TO DETERMINE

Item 1.
in
quotations shall
have the
same
meanings
as
NAMED INSURED
Item 2.
Page, the items
Holdings, Inc
LIMITS OF LIABILITY
Employment Practices Liability Insurance

$5, 000, 000
Item 3.
in the
aggregate for all "Claims"
RETENTION
Insuring Agreement A: Employment Practices Liability Coverage

Item 4.
Insuring Agreement
A:
Employment Practices Insurance Coverage Part:
05/01/2005
Item 5.
Policy
Form:
906-0001
906-0303
(08-09) Employment Practices Liability Insurance Coverage Part

(08-09) Addition to Section III. Illegal Alien Investigative
Proceeding With Sub limit
906-0314 (08-09) Addition to Section III. Third Party Liability Coverage
906-0404 (08-09) Modification to Section IV. Wage and Hour Laws
Exclusion With Defense Expense Sub limit
906-0105 (08-09) Addition to Section I. Executive Officer Replacement
Expenses Supplemental Coverage
906-0107 (08-09) Addition to Section I. Kidnap Expense Supplemental
Coverage
COVERAGE PART(S) AND ANY ENDORSEMENT(S), COMPLETE THE ABOVE-NUMBERED "POLICY".
Page 1
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Page
knanover
Group..
Insurance
7 of 94
Private
Company
FIDUCIARY LIABILITY INSURANCE

TO ITS TERMS, THIS "COVERAGE PART" APPLIES ONLY TO "CLAIMS" MADE AGAINST THE "INSUREDS" AND
REPORTED TO THE INSURER DURING THE "POLICY PERIOD" OR ANY EXTENDED REPORTING PERIOD THAT MAY
APPLY. THE LIMIT OF LIABILITY TO PAY DAMAGES OR SETTLEMENTS WILL BE REDUCED AND MAY BE

Item 1.
have the
same
meanings
as
NAMED INSURED
Item 2.
Page, the items in quotations shall
Holdings, Inc
LIMITS OF LIABILITY (Inclusive of Damages and Defense Expenses)

Fiduciary Liability Insurance
$1, 000, 000 in the aggregate for all "Claims"

Item 3.
RETENTIONS
Insuring Agreement A- Fiduciary Liability Coverage:

Insuring Agreement B- Compliance Resolution Penalties Coverage:
Item 4.
0 each "Claim"
0 each "Claim"
Fiduciary Liability Insurance Coverage Part:
Item 5.
1.
Insuring Agreements
A:
05/01/2005
2.
Insuring Agreements
B:
05/01/2005
FORMS AND ENDORSEMENTS FORMING PART OF THIS "COVERAGE PART" WHEN

ISSUED:
Page 1 of 2
907-0002 08 09
Document 1-2
Filed 04/15/16
Page
8 of 94
Policy Form:
907-0001 (08-09) Fiduciary Liability Insurance Coverage Part
Page
907-0002 08 09
2 of 2
Document 1-2
Filed 04/15/16
Hanover
4The
Group,
Insurance
Page
9 of 94
Private
Company
CRIME INSURANCE
PLEASE READ THIS "COVERAGE PART" CAREFULLY TO DETERMINE RIGHTS, DUTIES, COVERAGE AND COVERAGE
RESTRICTIONS.
Item 1. NAMED INSURED

Holdings,
Inc
Item 2. INSURING AGREEMENTS, LIMITS OF
LIABILITY, AND RETENTIONS
INSURING AGREEMENTS
LIMIT OF LIABILITY
Per Occurrence
A.
Employee Theft
Fidelity
C. Employee Theft of Client Property
D. Forgery or Alteration
E. Theft of Money and Securities (Inside the
Premises)
F. Robbery or Safe Burglary of Other Property
(Inside the Premises)
B. ERISA
G. Outside the Premises

H.
Computer
1.
2.
RETENTION AMOUNT
Per Occurrence
$2, 000, 000
$50, 000
$N/A
$N/A
$2, 000, 000

$2, 000, 000
$50, 000
$2,000, 000
$50, 000
$50, 000
$2, 000, 000
$50, 000
$2, 000, 000
$50, 000
$2, 000, 000

$10, 000
$50, 000
$1, 000
$2, 000, 000

$2, 000, 000
$2, 000, 000
$50, 000
$50, 000
$50, 000
Crime
Computer Fraud
Computer Program and Electronic Data
Restoration Expense
I. Funds Transfer Fraud
J.
Credit, Debit
K.
Money Orders and Counterfeit Money
or
Charge
Card Fraud
L. Personal Accounts Protection
$2, 000, 000

$50, 000
Forgery or Alteration
2. Identity Fraud Expense Reimbursement
$10, 000
$1, 000
M. Investigative Expense
$10, 000
$1, 000
If "Not Covered" is inserted above opposite any specified Insuring Agreement or if no amount is included in the Limit
Liability, such Insuring Agreement and any other reference thereto is in this "Coverage Part" is deemed to be deleted.
1. Personal Accounts
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Item 3. FORMS AND ENDORSEMENTS FORMING PART OF THIS "COVERAGE PART" WHEN ISSUED:
Policy Form: Policy Form:
908-0001
908-0035
(08-09)
(08-09)
Crime Insurance Coverage Part

AZ Crime Amendatory
CANCELLATION OF PRIOR INSURANCE ISSUED BY US:

By acceptance of this "Coverage Part" you are deemed to have given us notice canceling prior
8827059 01; the cancellation to be effective at the time this "Coverage Part" becomes effective.
policy Nos.
THESE DECLARATIONS, TOGETHER WITH THE COMMON POLICY TERMS AND CONDITIONS
SECTION,
Page
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LHF
2 of 2
Document 1-2
4The
Filed 04/15/16
Hanover
Insurance
Group-
Page
11 of 94
Private
Company
KIDNAP/RANSOM AND EXTORTION

PLEASE READ THIS "COVERAGE PART"

COVERAGE RESTRICTIONS.

CAREFULLY TO
Page,
the items in
RIGHTS, DUTIES, COVERAGE AND
DETERMINE
quotations
shall have the
same
meanings
as

Item 2. INSURING
Holdings,
Inc
AGREEMENTS, LIMITS OF LIABILITY, AND RETENTIONS
INSURING AGREEMENTS
Kidnap/Ransom and Extortion Threat

Coverage
B. Expenses Coverage
C. Detention and Hijack Coverage
D. In-Transit Coverage
A.
LIMIT OF LIABILITY
Per Occurrence
RETENTION AMOUNT
Per Occurrence
$1, 000, 000
$10, 000
$1, 000, 000
$10, 000
$1, 000, 000

$1, 000, 000
$10, 000
$10, 000
$N/A
$N/A
If "Not Covered" is inserted above opposite any specified Insuring Agreement, or if no amount is included in the
Limit of Insurance, such Insuring Agreement and any other reference thereto in this "Coverage Part" is deemed to
be deleted.
Item 3. NAME AND ADDRESS OF SECURITY FIRM

WATER PARK PLACE, 20 BAY STREET SUITE 1205
TORONTO, ON M5J-2N8
Page
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Policy Form:
909-0001
909-0029
(08-09) Kidnap/Ransom and Extortion

(08-09) AZ K&R Amendatory
Insurance
Coverage
Part

By acceptance of this "Coverage Part" you are deemed to have given us notice canceling prior policy
Nos. LHF 8827059 01; the cancellation to be effective at the time this "Coverage Part" becomes effective.
Page
909-0002 08 09
2 of 2
Document 1-2
Filed 04/15/16
Page
13 of 94
COMMON POLICY TERMS AND CONDITIONS SECTION

CLAIMS MADE WARNING FOR POLICY
NOTICE: THE "LIABILITY COVERAGE PARTS" PROVIDE COVERAGE ON A CLAIMS-MADE AND REPORTED BASIS.
SUBJECT TO ITS TERMS, THIS "POLICY" APPLIES ONLY TO "CLAIMS" FIRST MADE AGAINST THE "INSUREDS" AND
REPORTED TO THE INSURER DURING THE "POLICY PERIOD", OPTIONAL EXTENDED REPORTING PERIOD OR ANY
EXTENDED REPORTING PERIOD THAT MAY APPLY. THE LIMIT OF LIABILITY TO PAY DAMAGES OR SETTLEMENTS
WILL BE REDUCED AND MAY BE EXHAUSTED, UNLESS OTHERWISE PROVIDED HEREIN, BY "DEFENSE EXPENSES".
"DEFENSE EXPENSES" WILL BE APPLIED AGAINST THE RETENTION AMOUNT. PLEASE READ THE "POLICY"
CAREFULLY TO DETERMINE RIGHTS, DUTIES, COVERAGE AND COVERAGE RESTRICTIONS.
Throughout this insurance "Policy" the words "you" and "your" refer to the "Insured" as defined in SECTION III of the
Common Policy Terms and Conditions Section and any purchased "Coverage Parts". The words "we", "us" and
"our" refer to the Company providing this insurance.
Words that appear in quotation marks have
descriptions in the Headings of this "Policy"
of coverage.
special meaning. They

are
solely
are defined in SECTION III

DEFINITIONS. The
for convenience and form no part of the terms and conditions
In consideration of the premium paid and in reliance on the correctness and completeness of your "Application",
which is attached to and becomes part of this insurance "Policy", we agree to provide coverage as shown in the
Declarations and described below. Coverage may be denied or canceled with respect to any applicant or "Insured"
who provides incomplete or inaccurate information to us.
COMMON POLICY TERMS AND CONDITIONS
The Common Policy Terms and Conditions Section of this "Policy" shall apply to all "Coverage Parts".
Unless stated to the contrary in any "Coverage Part", the terms and conditions of each "Coverage Part" of this
"Policy" shall apply only to that "Coverage Part" and shall not apply to any other "Coverage Part" of this "Policy".
If any provision in this Common Policy Terms and Conditions Section is inconsistent or in conflict with the
terms and conditions of any "Coverage Part", the terms and conditions of such "Coverage Part" shall control for
purposes of that "Coverage Part". Any defined term referenced in this Common Policy Terms and Conditions
Section and also defined in a "Coverage Part" shall, for purposes of coverage under that "Coverage Part", have
the meaning set forth in that "Coverage Part". A "Coverage Part" shall only apply if designated in the
Declarations and attached hereto.
II.
OPTIONAL EXTENDED REPORTING PERIOD
Optional Extended Reporting Period as described below:

Liability Coverage Parts
1. If this "Policy" is canceled, terminated or not renewed, you shall have the right, upon payment of an
additional premium, to an extension of the Reporting Period for any "Claim" first made and reported
against the "Insured" after the date upon which the "Policy Period" ends, but only with respect to
"Wrongful Acts" committed prior to the end of the "Policy Period" and otherwise covered by this "Policy".
Such period shall be referred to as the Optional Extended Reporting Period.
2. You must request the Optional Extended Reporting Period in writing and must pay us the additional
premium within 60 days following the date of such cancellation, or termination or non-renewal. If we do
not receive your request and premium payment within 60 days following the date of such cancellation,
termination or nonrenewal, the "Named Insured's" right to purchase the Optional Extended Reporting
We will
A.
provide
an
Period shall
3.
cease.
If similar insurance is in force
covering
any "Claims" first made
Period, coverage provided by this "Policy" shall be
excess over
during this Optional Extended Reporting

any such other insurance.
4.
If we cancel for non-payment of premium, the "Named Insured" may purchase the Optional Extended
Reporting Period only after any earned premium due us is paid within 10 days after the date of
cancellation or "Policy" expiration, whichever comes first.
5.
All premiums paid for an Optional Extended Reporting Period shall be deemed fully earned as of the
first day of the Optional Extended Reporting Period. The Optional Extended Reporting Period may not
be canceled.
Page
904-0001 08 09
1 of 8
6.
B.
Page
14 of 94
Optional Extended Reporting Period shall not increase any Limits of Liability stated in Item 2. of the
applicable "Coverage Parts" Declarations. For the purpose of "Policy" limits, the Reporting Periods are
part of, not in addition to, the "Policy Period".
The
Non-Liability Coverage Parts

Solely with respect to the "Non-Liability Coverage Parts",
done
so
Coverage
III.
Filed 04/15/16
Document 1-2
in accordance with SECTION II

Parts".
any Extended Reporting Period offered shall be

EXTENDED REPORTING PERIOD of the "Non-Liability
DEFINITIONS
The
following words,
A.
"Application"
either in the
singular
or
plural, shall have the meanings indicated below.
means:
1.
The form titled "Application" submitted to

materials submitted with it;
2.
All similar forms, including any material submitted with them, submitted to
issued by us of which this "Policy" is a renewal or replacement; and
3.
All other materials
or
information
request this "Policy", including any documents
provided by
the "Insured" for the
or
other
request previous policies
underwriting
issuance of this
or
"Policy".
All such forms, documents and other materials shall be deemed
attached to it.
B.
C.
"Claim" shall have the
meaning
as
defined in the
part of this "Policy"
if
as
physically
applicable "Coverage Part".
E.
"Coverage Part" means individually or collectively the purchased "Coverage Parts" as set
"Policy" Declarations and attached hereto.
"Damages" shall have the meaning as defined in the applicable "Coverage Part".
"Defense Expense" shall have the meaning as defined in the applicable "Coverage Part".
F.
"Executive"
forth in Item 4. of
the
D.
means
any natural individual who is, was,
or
shall become:
1.
A duly-elected or
"Insured Entity"; or
2.
Any past, present or future members of any duly-constituted commissions, boards, committees
units operated under the "Insured Entity's" charter or with the "Insured Entity's" written approval.
appointed director, officer, manager, in-house general counsel,
or
trustee of the
Solely with respect to the "Non-Liability Coverage Parts", "Executive" shall have the meaning
applicable "Non-Liability Coverage Part".
or
other
defined in
as
the
G.
H.
"Insured Individual"
means:
1.
Any "Executive" of the "Insured

with the "Insured Entity" or while
2.
Any past, present or future employees of the "Insured Entity" while acting solely within the course and
scope of employment by the "Insured Entity" or while performing duties related to the conduct of the
"Insured Entity";
3.
Any natural individual providing volunteer services for the "Insured Entity"
Entity" and under the "Insured Entity's" direction and control;
4.
The estates, heirs, legal representatives

Individuals" at the time of the "Wrongful Act"
Entity" while acting solely within the course and scope of employment
performing duties related to the conduct of the "Insured Entity",
or
on
at the
request of
assigns of deceased individuals

which
who
the "Insured
were
"Insured
"Claim" is based;
legal representatives or assigns of an "Insured Individual"

incompetence, insolvency or bankruptcy; and
6.
The
7.
The lawful spouse of an "Insured Individual" under Paragraph G.4, but solely with respect to such
spouse's status as a spouse or such spouse's ownership interest in property that a claimant seeks as
recovery for an alleged "Wrongful Act", and not for any "Wrongful Act" actually or allegedly committed by
the spouse.
"Insured" shall have the
meanings
as
defined in the applicable
in the event of the "Insured Individual's"
"Coverage
Part".
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the "Named Insured" and any
L.
"Subsidiary".
"Liability Coverage Part" means the Directors, Officers and Corporate Liability, Employment Practices
Liability and Fiduciary Liability Coverage Parts as set forth in Item 4. of the "Policy" Declarations.
"Loss" shall have the meaning as defined in the applicable "Liability Coverage Part".
"Named Insured" means the entity designated in Item 1. of the "Policy" Declarations.
M.
"Non-Liability Coverage
I.
J.
K.
"Insured
Entity"
means
Event"
the "Occurrence" which must be sustained
means
or
discovered in order to
invoke coverage.
N.
"Non-Liability Coverage Part"
means
Random and Extortion Parts
as
0.
"Occurrence" shall have the
P.
"Outside
Q.
R.
S.
individually
or
collectively the Crime Coverage

"Policy" Declarations.
Parts and
Kidnap
set forth in Item 4. of the
meaning
as
defined in the
Entity" shall have the meaning as defined in the applicable "Coverage Part".
"Policy" means, collectively, the Declarations, the Common Policy Terms and Conditions Section, the
purchased "Coverage Parts", applicable endorsements and the "Application".
"Policy Period" means the period of time from the inception date shown in Item 2. of the "Policy"
Declarations to the earlier of the expiration date shown in Item 2. of the "Policy" Declarations or the
effective date of termination of this "Policy".
"Pollutants" means any solid, liquid, gaseous or thermal irritants or contaminants, including smoke, vapors,
soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or
reclaimed.
T.
"Subsidiary"
1.
An
means:
entity
in which the "Named Insured"

or issued and
assets, liabilities, equity,

Period"; or
of its "Subsidiaries" owns 50 percent or more of the

outstanding stock on or before the inception of the "Policy
or one
entity, subject to the terms of SECTION V.A. of the "Coverage Part", that the "Insured" forms
acquires after the inception of the "Policy Period".
Coverage shall apply to a "Subsidiary" only during the time it qualifies as a "Subsidiary".
2.
U.
An
"Wrongful
Act" shall have the
meaning
as
defined in the
or
applicable "Liability Coverage Part".
IV. EXCLUSIONS
This insurance does not apply to "Loss" on account of any "Claim" made
indirectly based upon, arising out of, or attributable to:
A.
against
any "Insured"
directly
or
Pollution
1.
The actual,
"Pollutants";
alleged
or
threatened
discharge, dispersal, seepage, migration, release
or
escape of
or
2.
"Loss", cost or expense arising out of any request, demand, order or statutory or regulatory requirement
that any "Insured" or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or
in any way respond to or assess the effects of "Pollutants"; or
3.
"Claim"
by or on behalf of a governmental authority for "Damages" because of testing for, monitoring,

removing, containing, treating, detoxifying or neutralizing, or in any way responding to or assessing the
effects of "Pollutants".
B.
Nuclear
The radioactive, toxic, or explosive properties of nuclear material which includes, but is not limited to,
Source Material, Special Nuclear Material and Byproduct Material as those terms are defined in the Atomic
Energy Act of 1954 and any amendments thereto and any similar provisions of any federal, state or local
statutory or common law.
V.
LIMITS OF LIABILITY AND RETENTIONS

A.
Limits of
1.
Liability
Regardless of the number of "Insureds" involved, "Claims" made or individuals
"Claims", our liability under the "Policy" solely with respect to all "Liability Coverage
entities making
Parts" is limited as
or
follows:
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a.
If the Combined Aggregate Limit of Liability as set forth in Item 3. of the Declarations is purchased,
then the maximum limit of liability for all "Loss" arising out of all "Claims" first made against the
"Insureds" during the "Policy Period" that may apply under all "Coverage Parts" shall not exceed the
combined Aggregate Limit of Liability stated in Item 3. of the "Policy" Declarations.
b.
If the Separate Aggregate Limit of Liability for each "Coverage Part" is purchased, the maximum
limit of liability for "Loss" arising out of all "Claims" first made against the "Insureds" during the
"Policy Period" that may apply shall not exceed the Separate Aggregate Limit of Liability for each
"Coverage Part" stated in Item 2. of the applicable "Coverage Part's" Declarations.
In the event a "Claim" is covered under more than one "Coverage Part", any "Loss" for such "Claim"
shall first be paid under, and subject to, the available Limit of Liability applicable to the Employment
Practices Liability Insurance Coverage Part.
Any remaining "Loss" for such "Claim" that is covered by any other "Coverage Part" of this "Policy", and
is not paid under the Employment Practices Liability Insurance Coverage Part, shall be covered as
provided in, and subject to, the remaining Limit of Liability applicable to the appropriate "Coverage
Parts". However, the remaining Limit of Liability of the applicable "Coverage Part" for such "Claim" shall
be reduced by the amount of "Loss" paid under the Employment Practices Liability Coverage Part.
In the event a "Claim" is covered under more then one "Coverage Part", and the Employment
Practices Liability Insurance Coverage Part does not apply, the highest remaining applicable Limit of
Liability at the time the "Claim" is first made shall apply.
c.
"Defense Expenses" are included in the Limits of Liability specified in Item 2. of the applicable
"Coverage Part's" Declarations. Our payments of "Defense Expenses" for any "Claim" will reduce
the Limits of Liability. When an applicable Limit of Liability has been exhausted by payment of
"Loss" or "Defense Expenses", our obligation to defend, continue to defend or to pay "Defense
Expenses" under the "Coverage Part(s)" or to which that Limit of Liability applies shall cease.
d.
The Limit of Liability for any Extended Reporting Period, if applicable, shall be a
addition to the respective Limit of Liability of the "Policy" to which the Extended
part of and not in

Reporting Period
applies.
2.
B.
with the respect to the "Non-Liability

Limit of Liability described in the applicable
Solely
Coverage Part", the maximum liability

'Non-Liability Coverage Part".
shall be the
respective
Retentions
"Policy" applies only to that part of covered "Loss" for each "Claim" which
applicable Retentions set forth in the applicable "Coverage Part's" Declarations.
is in
of the
1.
This
2.
You shall pay the Retentions.
3.
with respect to any "Liability Coverage Part", if different parts of a single "Claim" are subject to
different Retentions, the applicable Retentions will be applied separately to each part of such "Claim",
but the sum of such Retentions shall not exceed the largest applicable Retention. One Retention applies
to all "Claims" arising out of a single "Wrongful Act".
4.
Solely with respect to any "Non-Liability Coverage Part", if an "Insured" receives payment under another
"Policy" or bond, after applying a Retention for "Loss" also covered hereunder, the Retention amount set
forth in the Declarations for the applicable "Non-Liability Coverage Part" shall be reduced by the
Retention previously applied to such "Loss".
excess
Solely
VI. DEFENSE OF CLAIMS

We have the right and duty to defend "Claims", even if the allegations in such "Claims" are groundless, false or
fraudulent. We have no duty to defend "Claims" or pay related "Defense Expenses" for "Claims" to which this
insurance does not apply.
A.
With
respect
to "Claims"
we
defend
of
we
"Claim"
may:
deem necessary; and
1.
Make any
2.
Settle any resulting "Claim" provided that

which shall not be unreasonably withheld.
investigation
we
we
have the "Named Insured's" written consent to settle,
Page
904-0001 08 09
4 of 8
B.
C.
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Page
17 of 94
If the "Named Insured" refuses to consent to the settlement of any "Claim" which we recommend and which
is acceptable to the claimant, subject to any applicable Limit of Liability or Retention, our liability for the
"Claim" is limited to:
1.
What we would have contributed to the settlement if you had consented to the settlement,
"Defense Expenses" incurred up to the date of such refusal; and
2.
75
percent of such "Loss"
excess
including
of the amount for which the "Claim" could have been settled.
right and duty to defend, to continue to defend or to pay "Defense Expenses" under the "Policy" shall
when the applicable Limit of Liability provided under Item 2. of the applicable "Coverage Part's"
Declarations has been exhausted by payment of "Loss". This applies to "Claims" pending and "Claims" filed
after the Limit of Liability has been exhausted.
Our
cease
VII. DUTIES IN THE EVENT OF WRONGFUL ACTS OR CLAIMS

A.
No "Insured" will, except at that "Insured's" own expense, voluntarily make

to a settlement or incur any expense related to a "Claim" without
obligation, agree
payment,
our
assume
any
consent.
B.
If you receive a "Claim", you and any other involved "Insured" shall send us written notice of the "Claim",
with full details including the date received, as soon as practicable during the "Policy Period" or any
Extended Reporting Period, but in no event later than 90 days after such "Claim" is first made.
C.
You and any other involved "Insured" must:
D.
E.
1.
Immediately send us copies of any demands, notices,

connection with the "Claim";
2.
Authorize
G.
to obtain records and other
with
in the
or
legal
investigation, defense
in
settlement of the "Claim"; and
3.
Cooperate
Assist us, upon our request, in the enforcement of any right against any individual
be liable to the "Insured" because of "Damages" to which this insurance may apply.
us
papers received
information;
4.
or
or
entity which may
If you become aware of a "Wrongful Act" or other circumstance that may subsequently give rise to a "Claim",
you must give written notice to us as soon as practicable, but in no event later than the end of the "Policy
Period" or any Extended Reporting Period we provide. To the extent possible, notice should include:
1.
How, when and where the "Wrongful Act" took place; and
2.
The
names
and addresses of any individuals and entities involved.
out of a "Wrongful Act" which is subsequently made against you shall be deemed to
have been first made at the time we received such written notice from you, if:
Any "Claim" arising
It is not otherwise excluded
the terms of this
"Policy"; and
2. We receive proper notice of the "Wrongful Act" according to Paragraph D. above.
The date of mailing shall constitute the date that such notice was given and proof of mailing shall be
sufficient proof of notice.
Solely with respect to the Crime Coverage Part, reporting of a "Coverage Event" shall be in accordance with
the DUTIES IN THE EVENT OF A LOSS section of the Crime Insurance Coverage Part.
Solely with respect to the Kidnap/Ransom and Extortion Coverage Part, reporting of a "Coverage Event"
1.
F.
us
summonses
shall
by
be in accordance with the DUTIES IN THE EVENT OF

and Extortion Insurance Coverage Part.
AN
OCCURRENCE section of the
Kidnap/Ransom
VIII.GENERAL CONDITIONS
A.
Cancellation and Non Renewal

1.
We may not cancel this "Policy" except for failure to pay premium when due, in which
20 days written notice to the "Named Insured" before such cancellation is effective.
2.
The "Named Insured" may cancel this "Policy" for itself and all other "Insureds" by written notice to us
stating when the cancellation shall be effective. If the "Named Insured" cancels, earned premium shall
be computed in accordance with the customary short rate proportion of the premium.
3.
We
are
"Policy"
case we
will
give
not required to renew this "Policy". However, written notice of our intent to nonrenew this
shall be sent to the "Named Insured" at least 60 days prior to expiration of the "Policy Period".
Page 5 of 8
904-0001 08 09
4.
B.
Page
18 of 94
to the "Non-Liability Coverage Parts", any Cancellation or Non Renewal shall be

done in accordance with the Cancellation and Non Renewal section of the "Non-Liability Coverage
Part'.
Solely with respect
Representations and Application
By accepting
this
"Policy" you agree
that:
1.
The declarations and statements in the

and are accurate and complete;
2.
representations made in your "Application" are the basis of this "Policy" and are to be considered as
incorporated into and constituting a part of this "Policy";
Those representations are material to the acceptance of the risk we assumed under this "Policy";
We have issued this "Policy" in reliance upon the truth and completeness of such representations; and
The "Application" shall be interpreted as a separate application for Coverage by each "Insured". No
statement in the "Application", fact pertaining to, or knowledge possessed by any "Insured" shall be
imputed to any other "Insured" for the purpose of determining if Coverage is available. However, if the
Chairperson of the Board, Chief Executive Officer, President or Chief Financial Officer of the "Insured
Entity" knew as of the "Policy" inception date that such declarations and statements in the "Application",
were untrue, inaccurate or incomplete, such knowledge will be imputed to the "Insured Entity" for the
purpose of determining coverage.
3.
4.
5.
C.
Filed 04/15/16
Document 1-2
"Application"
for this insurance
"Policy"
are
your
representations
The
Legal
Against Us
entity has
Action
No individual
right under this "Policy":

as a party or otherwise bring us into a suit asking for "Damages" from
on this "Policy" unless all of its terms have been fully complied with.
or
1.
To
join
2.
To
sue us
us
an
"Insured";
or
An individual or entity may sue us to recover on an agreed settlement or on a final judgment against an
"Insured"; but we will not be liable for "Damages" that are not payable under the terms of this "Policy" or that
are in excess of the applicable Limit of Liability. An agreed settlement means a settlement and release of
liability signed by us, the "Insured" and the claimant or the claimant's legal representative.
D.
Change in Ownership, Control or Exposure

1. If during the "Policy Period":
a.
Another individual or entity or group of
assets of the "Named
Insured";
individuals
or
entities
acquires
more
than 50 percent of the
or
Another individual or entity, or group of individuals or entities, acquires an amount of the

outstanding securities representing more than 50 percent of the voting power for the election of the
"Named Insured's" directors or trustees; or
c.
The "Named Insured" consolidates with
you shall
notify
"Transaction",
us
as
Transaction and
of the
soon
provide
or
merges with another
entity,
change described in the above Paragraphs a., b., or c., herein referred to as
as practicable, but not later than 30 days after the effective date of the
such additional information as we require.
2.
If a Transaction occurs, coverage under this "Policy" shall continue until termination of the "Policy
Period" but only with respect to "Claims" made for "Wrongful Acts" which take place prior to the
Transaction.
3.
If you fail to provide notice as described in D.1., coverage

shall terminate as of the date of the Transaction.
4.
The entire
5.
In the event of
premium for this "Policy"
shall be deemed
fully
provided
to the "Insured" under this
earned upon the
occurrence
of
"Policy"
Transaction.
Transaction, the "Named Insured" will have the right, upon payment of an additional
appropriate percentage of the premium, to an extension of coverage under the "Policy" for a "Claim" first
made and reported during the 12 months after the Transaction but, only with respect to any "Wrongful
Act" occurring prior to the Transaction and otherwise covered by this "Policy". The 12-month period shall
be referred to as the Run-Off Period.
a
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904-0001 08 09
6 of 8
Page
19 of 94
The rights contained in Paragraph D. shall terminate unless written notice of the election and the
additional premium due is received by us within 60 days of the Transaction.
7.
In the event of a Transaction, the "Named Insured" has the right to purchase the Run-Off Period but has
no right to purchase the Extended Reporting Period described in SECTION ll of the "Policy".
8.
The additional premium for the Run-Off Period shall be fully earned at the
Period. The coverage provided by the Run-Off Period is not cancelable.
9.
The Limit of Liability for the Run-Off Period is part of and not in addition to the Limit of
of the applicable "Coverage Part's" Declarations.
inception of the Run-Off
Liability
in Item 2.
Rights of Recovery Against Others to Us

If you have rights to recover all or part of any payment we have made under this "Policy", these rights are
transferred to us. You must do nothing after "Loss" to impair these rights. At our request, you will sue those
responsible or transfer those rights to us and help us enforce them. In the event of any payment under this
"Policy", we shall be subrogated to the extent of such payment to all of your rights of recovery. You shall
execute and deliver such instruments and papers and do whatever else is necessary to secure such rights
and shall do nothing to prejudice or compromise such rights without our express written consent.
Transfer of
F.
Assignment
No
by
H.
Filed 04/15/16
6.
E.
G.
Document 1-2
change in, modification of
or
written endorsement to the
assignment
"Policy".
of interest in this
"Policy" shall
be effective
Agent for the Insured

By accepting this "Policy", you agree that only the "Named Insured" is authorized
"Insureds" with respect to any rights provided under this "Policy".
except when made
Sole
to act
on
behalf of all
Coverage Territory and Valuation

1. This "Policy" applies to a "Wrongful Act" committed anywhere in the world provided that the "Claim" is
made and suit is brought against the "Insured" within the United States, its territories or possessions or
Canada.
I.
2.
All premiums, limits, Retentions, "Loss" and other amounts are expressed and payable in the currency
of the United States of America. If a judgment is rendered, a settlement is denominated or another
element of "Loss" under this "Policy" is stated in a currency other than the United States of America
dollars, payment under this "Policy" shall be made in United States of America dollar equivalent
determined by the rate of exchange published in the Wall Street Journal on the date the judgment
becomes final, the amount of the settlement is agreed upon or any element of "Loss" is due,
3.
to each Non-Liability Coverage Part, Coverage Territory and Valuation shall be in

accordance with the applicable Territory Section and Valuation and Settlement Section of each NonLiability Coverage Part.
respectively.
with respect
Solely
Other Insurance
1.
If other valid and collectible insurance is available to the "Insured" for "Loss" covered under this "Policy",
the insurance provided by this "Policy" shall be excess over such other insurance, regardless of whether
or not such insurance is primary, contributory, excess, contingent or otherwise.
2.
When this insurance is excess we have no duty to defend the "Insured" against any "Claim" if any other
Insurer has a duty to defend the "Insured" against the "Claim". If no other insurer defends we will
undertake to do so but we will be entitled to the "Insured's" rights against those other "Insurers".
3.
When this insurance is

if any, that exceeds the
excess over
sum
other insurance
we
will pay
only
our
share of the amount of "Loss",
of:
a.
The total amount that all such other insurance would pay for the "Loss" in the absence of this
b.
The total of all deductibles, self-insurance and retentions under all that other insurance; and
c.
Any indemnification available from
insurance;
an
"Outside
Entity"
to
an
"Insured".
We will share the remaining "Loss", if any, with any other insurance that is not described in this provision
and was not bought specifically to apply in excess of the Limit of Liability shown in Item 2. of the
applicable "Coverage Parts" Declarations of this "Policy".
Page
904-0001 08 09
7 of 8
4.
Method of
Document 1-2
Filed 04/15/16
Page
20 of 94
Sharing
If all the other insurance permits contribution by equal shares, we will follow this method also. Under this
approach each insurer contributes equal amounts until it has paid its applicable Limit of Liability or none
of the "Loss" remains, whichever
comes
first.
If any other insurance does not permit contribution by equal shares, we will contribute by limits. Under
this method, each "Insurer's" share is based on the ratio of its applicable limit of liability to the total
applicable Limits of Liability of all "Insurers".
5.
J.
Solely with respect to each "Non-Liability Coverage Part", the application of Other Insurance shall be in
accordance with the applicable Other Insurance Section of each "Non-Liability Coverage Part".
Two
or
More
Policies, Coverage Parts,
or
Endorsements Issued
by
Us
stated intention that this "Policy" and any other "Policy", "Coverage Part" or endorsement issued by
by another member of The Hanover Insurance Group shall not provide duplication or overlap of
coverage for the same "Claim". If this "Policy" and any other "Policy" issued by us, or by another member of
The Hanover Insurance Group, to you, apply to the same "Claim" then, Condition I. Other Insurance
notwithstanding:
It is
us
K.
our
or
1.
We shall not be liable under this "Policy" for a greater proportion of the "Loss" than the applicable Limit
of Liability of this "Policy" bears to the sum of the total Limits of Liability of all such "Policies"; and
2.
The maximum amount payable under all such

Limit of Liability under any one "Policy".
policies
combined shall not exceed the
highest applicable
Allocation
If you incur both "Loss" covered by this "Policy" and "Loss" not covered by this "Policy" on account of any
"Claim" because such "Claim" includes both covered and non-covered matters, coverage with respect to
such "Claim" shall apply as follows:
percent of "Defense Expenses"
account of the "Claim" will be considered Covered
1.
100
2.
We shall fairly allocate all remaining "Loss" that you incurred

Covered "Loss" and Uncovered "Loss" based upon the relative
on
on
"Loss"; and
account of such "Claim" between

the parties to such
legal exposure of
matters.
Page 8
904-0001 08 09
of 8
Document 1-2
Filed 04/15/16
Page
21 of 94

COVERAGE PART
CLAIMS-MADE WARNING FOR POLICY
AND REPORTED TO THE INSURER DURING THE "POLICY PERIOD", OPTIONAL EXTENDED REPORTING PERIOD OR
ANY EXTENDED REPORTING PERIOD THAT MAY APPLY. THE LIMIT OF LIABILITY TO PAY DAMAGES OR
SETTLEMENTS WILL BE REDUCED AND MAY BE EXHAUSTED, UNLESS OTHERWISE PROVIDED HEREIN, BY
"DEFENSE EXPENSES", AND "DEFENSE EXPENSES" WILL BE APPLIED AGAINST THE RETENTION AMOUNT.
PLEASE READ THE "POLICY" CAREFULLY TO DETERMINE RIGHTS, DUTIES, COVERAGE AND COVERAGE
RESTRICTIONS.
this "Coverage Part" of this insurance "Policy" the words "you" and "your" refer to the "Insured" as
ADDITIONAL DEFINITIONS of this "Coverage Part". The words "we", "us" and "our"
defined in SECTION III
refer to the Company providing this insurance.
Throughout
Words that appear in quotation marks have special meaning. They are defined in SECTION III
ADDITIONAL
DEFINITIONS. The descriptions in the Headings of this "Policy" are solely for convenience and form no part of the
terms and conditions of Coverage.
Declarations and described below. Coverage may be denied or canceled with respect to any applicant or
"Insured" who provides incomplete or inaccurate information to us.
I.
INSURING AGREEMENTS
A.
Individual Non-Indemnified
Liability
We will pay, on behalf of each "Insured Individual", "Loss" which the "Insured Individual" is legally
obligated to pay because of "Claims" made against that "Insured Individual" during the "Policy Period" and
reported to us for any "Wrongful Act" to which this insurance applies except for "Loss" which the "Insured
Entity" pays to or on behalf of the "Insured Individual" as indemnification.
B.
Individual Indemnified
Liability
We will pay, on behalf of the "Insured Entity", "Loss" which an "Insured Individual" is legally obligated to
pay because of "Claims" made against that "Insured Individual" during the "Policy Period" and reported to
us for any "Wrongful Act" to which this insurance applies but only to the extent the "Insured Entity"
indemnifies the "Insured Individual" for such "Loss".
C.
Corporate Entity Liability

We will pay "Loss" which the "Insured Entity" is legally obligated to pay because of "Claims" made against
the "Insured Entity" during the "Policy Period" and reported to us during the "Policy Period" for any
"Wrongful Act" to which this insurance applies.
D.
Securityholder
Derivative Demand
Liability
We will pay "Investigative Costs" on behalf of the "Insured Entity" resulting from any "Securityholder
Derivative Demand" made and reported during the "Policy Period", or if applicable, an Extended
Reporting Period, for any "Wrongful Act" in an amount not to exceed $100, 000, which amount is part of
and not in addition to the applicable Limit of Liability as set forth in Item 2. of the Declarations of this
"Coverage Part". No Retention shall apply to such amount.
II.

Refer to the Common
III.
Policy
Terms and Conditions Section.
ADDITIONAL DEFINITIONS
In addition to the Definitions listed in SECTION III
DEFINITIONS of the Common Policy Terms and
Conditions Section, the following terms shall have the meanings indicated below, when used in this
"Coverage Part":
A.
"Claim"
means:
Page
905-0001 08 09
1 of 6
Document 1-2
1.
Any
written demand
presented
for monetary
Filed 04/15/16
"Damages"
or
Page
22 of 94
non-monetary relief for
"Wrongful Act";
or
Any complaint or similar pleading initiating a judicial, civil, administrative, regulatory, alternative
dispute or arbitration proceeding, including any appeal resulting from it, to which an "Insured" is
provided notice and which subjects an "Insured" to a binding adjudication of liability for monetary or
non-monetary relief for a "Wrongful Act".
However, "Claim" shall not include a labor or grievance proceeding pursuant to a collective bargaining
2.
agreement.
All "Claims" made on account of a single "Wrongful Act" shall be treated as a single "Claim" made
date the earliest of the "Claims" was made, regardless of whether that date is before or during the
Period" or, if applicable, during an Extended Reporting Period.
B.
the
"Policy
"Damages" means a monetary judgment, award or settlement, pre-judgment interest and post-judgment
interest. "Damages" also means punitive or exemplary "Damages" or the multiple portions thereof, if
insurable under the applicable law of the jurisdiction most favorable to the insurability of such "Damages"
provided such jurisdiction is where:
1.
2.
3.
4.
"Damages" were awarded or imposed;

Any "Wrongful Act" occurred for which such "Damages" were awarded or imposed;
The "Insured" resides, is incorporated or has its principal place of business; or
We are incorporated or have our principal place of business.
Those
"Damages" does
5.
6.
7.
not include:
Commissions, bonuses, profit sharing
or severance
payments;
Payment by the "Insured Entity" of allegedly inadequate price

own
securities
Civil, criminal
the securities of
or
or
administrative
"Subsidiary";
fines,
taxes
or
or
or
consideration for the
other
penalties.
"Debtor in Possession" means a debtor in possession of the "Insured

Chapter 11 of the United States of America Bankruptcy Code.
D.
"Defense
Expenses"
means
purchase of its
or
C.
Entity"
as
such term is used in
and is limited to:
1.
Any reasonable and necessary legal fees and expenses, including attorney fees and expert fees,
incurred in the defending and appeal of a "Claim";
2.
The
3.
appeal, attachment or similar bonds; and

Up to $250 per day per "Insured Individual" for reasonable expenses incurred for attendance at
hearings, trials or depositions at our request or with our consent for such "Insured Individual". Such
premium
payment
"Defense
E.
on
on
shall not exceed
Expenses"
$5, 000 in the aggregate for all "Insured Individuals" for each "Claim".
do not include:
4.
Salaries, wages, fees, overhead

specified in paragraph 3. above; or
5.
Salaries, wages, overhead
1.
or
or
benefit expenses associated with any "Insured"
benefit expenses associated with
our
except
as
employees.
means:
Any past, present
or
future "Executive"; and
Any natural individual serving as a director or officer of an "Outside Entity" at the direction of the
"Insured Entity".
"Insured" means the "Insured Entity" and any "Insured Individual". With respect to this "Coverage Part"
only, "Insured Entity" also means a "Debtor in Possession".
"Investigative Costs" means reasonable and necessary costs, charges, fees, including but not limited to
attorneys and experts' fees, and expenses, other than salaries, wages, fees overhead or benefit
expenses associated with any "Executive" or "Insured Individual", incurred by the "Insured Entity", in
connection with the investigation or evaluation of any "Securityholder Derivative Demand".
2.
F.
G.
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H.
Filed 04/15/16
Document 1-2
"Loss" means the amount the "Insured" is legally obligated to pay for
for a covered "Claim" under this "Coverage Part".
Page
23 of 94
"Damages" and "Defense Expenses"
"Loss" does not include:
1.
amounts which an "Insured" is obligated to pay

form
other than monetary "Damages";
any
2.
Matters deemed uninsurable
3.
Wages
4.
Any expenses associated with any accommodation required under the Americans with Disabilities
Act, the Civil Rights Act of 1964, rules or regulations promulgated under them, amendments thereto
or similar provisions in any federal, state or local law or common law;
Any amount not indemnified by the "Insured Entity" for which an "Insured Individual" is absolved from
payment by reason of any covenant, agreement or court order; or
5.
6.
I.
Any
N.
0.
"Claim"
seeking
relief
or
redress in
by law;
contributions
payable under
an
"Employee Benefits Plan";
Entity"
means
any:
1.
Nonprofit entity described in section 501(c)3 of the Internal Revenue Code of 1986, as amended, that
is not included in the definition of "Insured Entity". But an "Outside Entity" does not include any
"Subsidiary"; and
2.
Other
"Personal
entity, partnership, joint
Injury"
means
venture or other
any actual
or
entity listed by endorsement
to this
policy.
alleged:
Defamation of character, libel, slander,
or
publication of material
in violation of
individual's
right of
or
wrongful entry or eviction or other invasion of the right of privacy; or

3. False arrest, wrongful detention or imprisonment; or
4. Malicious prosecution, malicious use or abuse of process; or
5. Infringement of copyright or trademark, unauthorized use of title, plagiarism, misappropriation of
advertising ideas or intellectual or property rights.
"Related Wrongful Acts" means "Wrongful Acts" which are logically or causally connected by reason of
any common fact, circumstance, situation, transaction, casualty, event or decision.
"Securities Laws" means the Securities Act of 1933, Securities Exchange Act of 1934, Investment Act of
1940, any state "Blue Sky" securities law or any other federal, state or local securities law including
amendments thereto and any similar federal, state, local or common law, and any rules and regulations
promulgated under it.
"Securityholder Derivative Demand" means any written demand, by one or more Securityholder of an
"Insured Entity" without the assistance, participation or solicitation of any "Executive", upon the board of
directors or board of managers of such "Insured Entity", to bring a civil proceeding in a court of law
against any "Executive" for a "Wrongful Act" by an "Executive".
"Securityholder Derivative Action" means any "Claim" brought on behalf of, or in the name or the right of,
the "Insured Entity" by one or more securityholders of the "Insured Entity" in their capacity as such if any
"Claim" is brought and maintained without the assistance, participation or solicitation of any "Executive".
"Wrongful Act" means any actual or alleged act, error, omission, misstatement, misleading statement,
neglect, breach of duty committed or attempted by:
1. An "Insured Individual" in his or her capacity as an "Insured Individual";
2. An "Insured Individual" while serving as a director, officer or trustee of any "Outside Entity", if such
service is at the written request or direction of the "Insured Entity"; or
3. By the "Insured Entity".
2.
M.
or
GENERAL
amount allocated to non-covered "Loss" in accordance with SECTION VIII
CONDITIONS of the Common Policy Terms and Conditions, Paragraph K. Allocation.
privacy;
L.
benefits
result of
Any
"Outside
1.
K.
or
as
The
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Page
24 of 94
IV. ADDITIONAL EXCLUSIONS

In addition to the Exclusions listed in SECTION IV
EXCLUSIONS of the Common
Policy Terms and
Conditions, the following exclusions apply to this "Coverage Part".

This insurance does not
A.
Directly
remuneration
B.
Directly
apply
to "Loss"
or
advantage
indirectly based
or
against
account of any "Claim" made
any "Insured":
"Insured"
attributable to
upon, arising out of,
to which such "Insured" was not legally entitled; or
omission, any criminal act

"Insured"; or
C.
on
indirectly based
or
an
or
gaining
profit,
any
upon, arising out of, or attributable to any dishonest or fraudulent act or

omission or any willful violation of any statute or regulation by such
or
Directly or indirectly based upon, arising out of, or attributable to any payments to an "Insured" of any
remuneration without the previous approval of the governing bodies of the "Insured Entity" which payment
without such previous approval shall be held to have been illegal.
However, Paragraphs A., B., and C. above shall not apply unless
adverse to any of the "Insureds" in such a "Claim" is obtained.
D.
Any "Personal Injury".
E.
Any actual
F.
Any "Claim" brought
judgment
or
other final
adjudication
or alleged violation of the responsibilities, obligations or duties imposed by the Employee

Retirement Income Security Act of 1974, as amended, and any similar federal, state, local or common
law, and any rules and regulations promulgated under it.
or
maintained
by,
at the
behest,
or on
behalf of any "Insured".
However, this exclusion does not apply to:

A
1.
"Claim" made
and
assistance, participation
maintained totally independently of and

or intervention of any "Executive"; or
totally without the solicitation,
"Securityholder Derivative Action"; or

A securityholder's "Claim" that is instigated and continued totally independent of, and totally without
the solicitation, assistance, participation or intervention of any "Insured"; or
Any "Claim" by any of the "Insured Individuals" for contribution or indemnity, if such "Claim" directly
A
2.
3.
4.
"Securityholder Derivative Demand"
or
results from another "Claim" covered under this policy.

G.
Any "Wrongful Act", transaction, decision, fact, circumstance, situation or event which has been the
subject of any notice given prior to the inception of this "Policy" under any other policy of insurance.
H.
Any prior or pending litigation, administrative,

Litigation date as set forth in the Declarations.
I.
Any other "Wrongful Act", whenever occurring,

of
J.
"Claim"
arbitration
proceeding
which together with a

notice and would constitute "Related Wrongful Acts".
as
"Wrongful
of the Prior and
Pending
Act" has been the
subject
For any "Wrongful Act" directly or indirectly based upon, arising out of, or attributable to service by any
"Insured Individual" in any position or capacity in any entity other than the "Insured Entity" or an "Outside
Entity", even if the "Insured Entity" directed or requested the "Insured Individual" to serve in such other
position
K.
or
or
or
capacity.
Any action brought or maintained by, at the behest, or on behalf of an "Outside Entity" or past, present, or
future director, officer, manager, trustee, governor or equivalent "Executive" of the "Outside Entity". This
exclusion does not apply if the "Claim" is made and maintained without any solicitation, assistance,
participation of or intervention by any director, officer, manager, trustee, governor or equivalent
"Executive" of the "Outside Entity".
To the extent an "Insured" is indemnified for "Loss" by an "Outside Entity" and which is "Insured" in whole
or part under any policy of the "Outside Entity" or its directors or officers, this "Policy" shall apply only to
"Loss" excess over such indemnification and insurance.
L.
Based upon or
Act".
arising
out of
or
attributable to
present
or
future actual
or
potential employment
related
"Wrongful
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Document 1-2
M.
Filed 04/15/16
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Directly or indirectly based upon, arising out of, resulting from or in consequence of, or in any way
involving any federal, state, local or foreign wage and hour laws, including, without limitation, the Fair
Labor Standards Act.
N.
"Loss" on account of any "Claim" made against any "Insured" directly or indirectly based upon, arising out
of, or attributable to any actual or alleged liability under a written or oral contract or agreement. However,
this exclusion does not apply to your liability that would have attached in the absence of such contract or
agreement.
0.
Directly or indirectly based

1.
2.
P.
upon,
arising
out
of,
or
attributable to:
physical injury to or destruction of any tangible property, including all resulting "Loss" of
property and "Loss" of use of property that is not physically injured.
Bodily injury, disability, sickness, disease, death, assault or battery sustained by any individual;
The
that
Directly or indirectly based upon, arising out of or attributable to the

services for others and caused by an act, error or omission;
However that this exclusion does not
apply
use
of
performance of any professional
to:
against an "Insured" for a "Wrongful Act" by such "Insured" in connection with the
management or supervision of any division, "Subsidiary" or group of the "Insured Entity" offering the
A "Claim"
aforementioned services;
2.
Q.
"Security Holder Derivative Demand"
Any actual
or
or
"Securityholder Derivative Action".
alleged violation of any "Securities Laws", provided that
this exclusion shall not
apply
to any
"Claim":
1.
Based upon or arising out of the offering, sale or purchase of securities, whether debt or equity, in a
transaction or series of transactions that are in fact in law exempt from registration under the
Securities Act of 1933 and any amendments thereto or any rules or regulations promulgated
thereunder;
or
by any securityholder of the "Insured Entity" for the failure of the "Insured Entity" to undertake
complete the initial public offering or sale of securities of the "Insured Entity".
Directly or indirectly based upon, arising out of, or attributable to anti-trust violations or unfair business
practices, including but not limited to any actual or alleged price fixing, price discrimination, restraint of
trade, unfair business practices, monopolistic practices or any actual or alleged violations of the Sherman
Antitrust Act of 1890, the Clayton Act of 1914, and any amendments thereto, the Robinson Patman Act of
1938, the Federal Trade Commission Act of 1914 or any rules or regulations promulgated in connection
with the statutes described above; or similar provision of any federal, state or local statutory law or
2.
Made
or
R.
common
law.
No fact pertaining to or knowledge possessed by any "Insured Individual" of a "Wrongful Act" shall be imputed
to any other "Insured Individual" for the purpose of determining the applicability of the exclusions listed above.
V.
ADDITIONAL GENERAL CONDITIONS

In addition to the conditions listed in SECTION VIII
GENERAL CONDITIONS of the Common
Terms and Conditions, the following condition applies to this "Coverage Part".
A.
Policy
Acquisition and Formation of Subsidiaries

inception of the "Policy Period" the "Insured Entity" acquires or forms a "Subsidiary" or
than 50% of the assets, liabilities, or equity of, or obtains the right to elect or select a
or trustees of an entity, coverage under this "Coverage Part" shall apply to the
directors
of
majority
"Subsidiary" only if the "Named Insured" meets the following conditions:
1. If, at the time of the acquisition or formation described above, the total assets of the acquired or
formed "Subsidiary" exceed ten percent (10%) of the total assets of the "Insured Entity" as of the
beginning of the "Policy Period"; then the "Named Insured" shall give us written notice of the
formation or acquisition as soon as practicable, but not later than sixty (60) days after the date of
such formation or acquisition.
If after the
assumes more
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2.
If, at the time of the acquisition or formation described above, the total assets of the acquired or
formed "Subsidiary" exceed twenty-five percent (25%) of the total assets of the "Insured Entity" as of
the beginning of the "Policy Period"; then the "Named Insured" shall agree to any amendments to the
terms of this "Coverage Part" we require and shall pay any additional premium we require.
3.
If the "Named Insured" does not comply with the conditions in Paragraph A. above, coverage under
this "Policy" for the "Subsidiary" shall terminate regarding "Claims" made more than 60 days after the
acquisition or formation of the "Subsidiary".
VI. ADDITIONAL EXCESS LIMIT OF LIABILITY DEDICATED FOR EXECUTIVES

A.
Notwithstanding anything in the "Policy" to the contrary, the Additional Excess Limit of Liability Dedicated
for "Executives", shall be an additional excess aggregate Limit of Liability not to exceed $500, 000 which
amount is in excess of and not part of the Limit of Liability as set forth in Item 2. of the Declarations.
B.
The Additional Excess Limit of Liability Dedicated for "Executives" is available solely for "Loss" resulting
from any "Claim" covered under Insuring Agreement A of the Directors, Officers and Corporate
Liability Coverage Part.
C.
The Additional Excess Limit of Liability Dedicated for "Executives" shall be excess of
available that is specifically excess to this "Policy", and such excess insurance must
exhausted by payment of "Loss", "Damages" or "Defense Expenses" thereunder before we
obligation to make any payment on account of the Additional Excess Limit of Liability
"Executives".
any insurance
be completely
shall have any
Dedicated for
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EMPLOYMENT PRACTICES LIABILITY INSURANCE COVERAGE PART

"DEFENSE EXPENSES". "DEFENSE EXPENSES" WILL BE APPLIED AGAINST THE RETENTION AMOUNT. PLEASE
Throughout
ADDITIONAL
terms and conditions of coverage.
In consideration of the premium paid and in reliance on the correctness and completeness of Your "Application",
I.
INSURING AGREEMENT

We will pay on behalf of the "Insureds", all "Loss" which you are legally obligated to pay because of "Claims"
first made against you during the "Policy Period" and reported to us for any "Wrongful Act" to which this
insurance applies.
II.
EXTENDED REPORTING PERIOD

Refer to SECTION II
Conditions Section.
III.
OPTIONAL EXTENDED REPORTING PERIOD of the Common
Policy
Terms and
"Coverage Part":
A.
"Claim"
1.
means:
Any written
demand
presented
for
monetary "Damages"
or
"Wrongful Act";
Or
2.
dispute or arbitration proceeding (including any appeal resulting from it), to which an "Insured" is
However, "Claim" shall not include any arbitration
or
grievance proceeding pursuant
to
collective
bargaining agreement.
All "Claims" made on account of a single "Wrongful Act" shall be treated as a single "Claim" first made on
the date the earliest of the "Claims" was made, regardless of whether that date is before or during the
"Policy Period" or, if applicable, during an Extended Reporting Period.
B.
1. Those "Damages" were awarded or imposed;
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incorporated or have our principal place of business.

"Defense Expense" means and is limited to:
1. Any reasonable and necessary legal fees and expenses, including attorney
4.
C.
Document 1-2
We
are
fees and
expert fees,
appeal, attachment or similar bonds; and

3. Up to $250 per day per "Insured" for supplemental payment for reasonable expenses incurred for
attendance at hearings, trials or depositions at our request or with our consent by such "Insured".
Such payment shall not exceed $5, 000 in the aggregate for all "Insureds" on each "Claim".
"Defense Expenses" do not include:
2.
4.
The
premium
on
Salaries, wages, fees, overhead or benefit expenses associated with any "Insured" except
in Paragraph C. above; or
as
specified
5.
D.
"Employee"
or
benefit expenses associated with your
"Employees".
means:
part-time, leased,
1.
A natural individual employed by and directed

temporary or seasonal "Employees"; or
2.
An individual who is a volunteer, intern, committee or staff member or independent contractor for the
"Insured Entity", but only if the "Insured Entity" provides indemnification to such individual in the same
manner as that provided to the "Insured Entity's" "Employees".
by
the "Insured
Entity", including
any
employment status shall be determined as of the date of the "Wrongful Act".

the Employee Retirement Income Security Act of 1974, as amended, any similar federal,
"ERISA"
state, local or common law, and any rules and regulations promulgated there under.
"Insured" means the "Insured Entity" and any "Insured Individual".
An individual's
E.
F.
G.
means
"Loss" means the amount the "Insured" is legally obligated to pay for "Damages" and "Defense
for a covered "Claim" under this "Coverage Part". "Loss" includes back pay and front pay.
Expenses"
H.
Civil, criminal
2.
Any amounts which

any form other than
or
"Insured" is
an
or
obligated
other
penalties;
to pay as result of
"Claim"
seeking relief
or
redress in
monetary "Damages";
future wages or benefits of any reinstated

continued employment of an "Employee";
benefits associated with the
3.
Any
4.
5.
Benefits
6.
Act, the Civil Rights Act of 1964, rules or regulations promulgated under them, amendments to them
7.
Any amount not indemnified by the "Insured Entity" for which

by reason of any covenant, agreement or court order; or
8.
Any
or
contributions
"Employee"
or
wages
or
by law;
payable
under
an
employee benefits plan;
an
"Insured" is absolved from
payment
GENERAL
CONDITIONS of the Common Policy Terms and Conditions Section, Paragraph K. Allocation.
"Related
any
I.
administrative fines, taxes
1.
Wrongful Acts"
common
"Wrongful
With
Act"
respect
employment,
means
"Wrongful Acts" which
are
logically
or
fact, circumstance, situation, transaction, casualty, event
causally connected by
or
reason
means:
to any "Claim"
any actual
or
brought by
alleged:
or on
behalf of your "Executives",
"Employees",
or
applicants for
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decision.
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7.
Wrongful dismissal, discharge or termination of employment, including constructive termination,

dismissal or discharge;
Breach of an implied contract or agreement relating to employment;
Wrongful failure to employ or promote;
Wrongful demotion, denial of tenure or practice privileges or deprivation of a career opportunity;
Negligent supervision, training, evaluation, reassignment, hiring or retention;
Negligent failure to adopt or enforce employment-related policies and procedures by an "Insured
Entity";
Employment related wrongful discipline;
8.
Employment discrimination
9.
Disparate treatment of or failure or refusal to hire a claimant because he

member of a class which is or is alleged to be legally-protected;
10.
Employment-related invasion of privacy, false arrest or false imprisonment;

Employment-related defamation, libel or slander, including statements in an "Employee" reference;
Employment-related wrongful infliction of emotional distress, mental anguish or humiliation;
Employment-related misrepresentation;
Sexual or other workplace harassment of any kind, including any unwelcome sexual or non-sexual
advances, requests for sexual or non-sexual favors, or other verbal, visual, or physical conduct of a
1.
2.
3.
4.
5.
6.
11.
12.
13.
14.
or
violation of any
employment discrimination law;

or
she is
or
claims to be
non-sexual nature that is made a condition of employment with or used as

employment decisions by, interferes with performance or creates an intimidating, hostile
sexual
or
a
or
basis for
offensive
working environment;
15. Retaliation against an "Executive"
for the "Insured Entity"; or
or
"Employee" arising
out of
employment by
16. Violation of any federal, state or local civil rights laws committed
her capacity as an "Insured" or by the "Insured Entity".
Any series of "Wrongful Acts" that are connected by

omission or decision are a single "Wrongful Act".
reason
of
or
a common
or
attempted by
services
an
performed
"Insured" in his
or
claimant, transaction, policy, action,

EXCLUSIONS, of the Common Policy Terms and
Conditions Section, the following exclusions apply to this "Coverage Part".
A.
indirectly arising out of, based upon or attributable to:
1.
2.
3.
4.
against any "Insured" directly
or
physical injury to or destruction of any tangible property, including all resulting "Loss" of use of
property and "Loss" of use of property that is not physical injured;
Bodily injury, disability, sickness, disease, death, assault or battery sustained by any person.
However, this exclusion shall not apply to mental anguish or emotional distress arising out of
The
that
"Wrongful Acts";
Any actual or alleged violation of the responsibilities, obligations or duties imposed by "ERISA";
Obligations or payments owed under:
An express written or verbal contract of employment. However, this exclusion does not apply to
a.
any actual or alleged breach of an implied contract or agreement relating to employment, whether
arising out of any personnel manual, policy statement or oral representation;
b. An agreement to make payments in the event of the termination of employment; or
An agreement to assume another's liability. However, this exclusion does not apply to the liability
c.
of an "Insured Entity" which would have attached even in the absence of such contract or
agreement.
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5.
Any "Wrongful Act", transaction, decision, fact, circumstance or situation which has been the subject
of any notice given prior to the inception of this "Policy" or under any other policy of insurance.
6.
Any other "Wrongful Act", whenever occurring, which together with a "Wrongful Act" has been the
subject of a claim or notice and would constitute "Related Wrongful Acts";
Any violation of any of the responsibilities, obligations, or duties imposed by any federal, state or local
statutory or common law, including but not limited to the National Labor Relations Act, as amended or
regulations promulgated under any such law that governs the rights of "Employees" to engage in
union or other collective activities, the duty of an employer to meet, discuss or bargain with
"Employee" or "Employee" representatives, the enforcement of any collective bargaining agreement
or any grievance or arbitration proceedings. This exclusion does not apply to any "Claim" for
retaliatory treatment against any "Insured" who is attempting to exercise his or her rights under the
above referenced statute, law, rule, regulation or order;
statutory or common law, including but not limited to the Occupational Safety and Health Act, as
amended or regulations promulgated under any such law that governs workplace safety and health.
This exclusion does not apply to any "Claim" for retaliatory treatment against any "Insured" who is
attempting to exercise his or her rights under the above referenced statute, law, rule, regulation or
7.
8.
order;
9.
statutory or common law, including but not limited to, The Consolidated Omnibus Budget
Reconciliation Act, as amended or regulations promulgated under any such law that governs any
Employee Benefit Arrangement Program Plan or "Policy". This exclusion does not apply to any
"Claim" for retaliatory treatment against any "Insured" who is attempting to exercise his or her rights
under the above referenced statute, law, rule, regulation or order;
10.
Any violation of any of the responsibilities, obligations, or duties imposed by any federal, state or
local statutory or common law, including but not limited to the Worker Adjustment and Retraining
Notification Act, as amended or regulations promulgated under any such law that governs any
obligation of an employer to notify, discuss, or bargain with "Employees" or others in advance of any
plant or facility closing or mass layoff, or any similar obligation: This exclusion does not apply to any
11.
Any failure to comply with any law concerning workers compensation, unemployment insurance,
Social Security, disability benefits or any similar laws. This exclusion shall not apply to any "Claim" for
above laws;
12.
B.
or
violation of any of the
responsibilities, obligations, or duties imposed by any federal, state or local

Any
or
common
law,
statutory
including but not limited to the Fair Labor Standards Act, as amended or
regulations promulgated under any such law, that governs wage, hour and payroll policies and
practices, except the Equal Pay Act. This exclusion does not apply to any "Claim" for retaliatory
treatment against any "Insured" who is attempting to exercise his or her rights under the above
referenced statute, law, rule, regulation or order.

For
apply
to "Loss"
on
overtime pay for hours
1.
unpaid wages
actually
"Employee" or for improper payroll deductions;
2.
Directly or indirectly arising

replacement or other similar
bargaining agreements; or
3.
or
worked
or
against any "Insured":

labor
actually performed by
out of, based on or attributable to a lockout, strike,

action resulting from labor disputes, labor negotiations,
any
picket line,
or
collective
To the extent such "Loss" constitutes employment-related benefits, stock options, perquisites,
deferred compensation or any other type of compensation earned by the claimant in the course of
employment or the equivalent value thereof. This Exclusion shall not apply to front pay or back pay.
No fact pertaining to or knowledge possessed by or "Wrongful Act" of any "Insured" shall be imputed to
any other "Insured" for the purpose of determining the applicability of the exclusions listed above.
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V.
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Terms and Conditions Section, the following condition applies to this "Coverage Part":
Acquisition
or
Policy
Formation of Subsidiaries
If after the inception of the "Policy Period" the "Insured Entity" acquires or forms a "Subsidiary" or assumes
more than 50% of the assets, liabilities, or equity of, or obtains the right to elect or select a majority of
directors or trustees of an entity, coverage under this "Coverage Part shall apply to the "Subsidiary" only if
the "Named Insured" meets the following conditions:
A.
If,
at the time of the formation
or
acquisition described above:

1. The total assets of the acquired or formed "Subsidiary" are less than 25 percent of the total assets of
the "Insured Entity" as of the beginning of the "Policy Period"; or
2. The total number of "Employees" of the acquired or formed "Subsidiary" is less than 25 percent of the
total number of "Employees" of the "Insured Entity" as of the beginning of the "Policy Period"
Coverage shall be provided automatically under this "Coverage Part".
B.
If,
or
1.
The total assets of the acquired or formed "Subsidiary" exceed 25

"Insured Entity" as of the beginning of the "Policy Period:" or
2.
The total number of "Employees" of the acquired

total number of "Employees" of the "Insured Entity"
or
as
percent of the total
assets of the
formed "Subsidiary" exceed 25 percent of the

of the beginning of the "Policy Period",
the "Named Insured" shall give us written notice of the acquisition or formation of a "Subsidiary"
as practicable, but not later than 60 days after the date of such acquisition or formation.
The "Named Insured" shall agree to any amendments to the terms of this
pay any additional premium we require.
"Policy"
we
require
as soon
and shall
If the "Named Insured" does not comply with the conditions of Paragraph B. above, coverage under this
the "Subsidiary" shall terminate 60 days after the acquisition or formation of the
"Coverage Part" for

"Subsidiary".
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FIDUCIARY LIABILITY INSURANCE COVERAGE PART

Throughout
ADDITIONAL
I.
INSURING AGREEMENT
SECTION I
A.
Fiduciary Liability Coverage

We will pay on behalf of the "Insureds" all "Loss" which you are legally obligated to pay because of
"Claims" made against you during the "Policy Period" and reported to us in accordance with SECTION VII
DUTIES IN THE EVENT OF WRONGFUL ACTS OR CLAIMS of the Common Policy Terms and
Conditions Section for any "Wrongful Act" to which this insurance applies.
B.
Compliance Resolution Penalties Coverage

We will pay "Compliance Resolution Penalties" up to, but in no event greater than $25, 000, for any such
"Claims" which amount shall be part of and not in addition to the Limits of Liability stated in Item 3. of the
Declarations.
II.
SECTION II
III.
SECTION III
Refer to the Common
Policy

Conditions Section, the following terms shall have the meanings indicated below when used in this
"Coverage Part":
A.
"Administration"
1.
means:
Providing interpretations and giving counsel
to
employees, beneficiaries
or
participants regarding
any
"Insured Benefit Plan";

2.
3.
Handling records
in connection with any "Insured Benefit Plan";
Effecting enrollment, termination
or
cancellation of
or
employees
or
participants under
any "Insured
Benefit Plan".
B.
"Claim"
means:
1.
Any written demand presented for monetary "Damages"
2.
similar pleading initiating a judicial, civil, administrative, regulatory, alternative

Any complaint
non-monetary relief for a "Wrongful Act"; or
or
"Wrongful
Act"
or
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3.
A written notice of a fact-finding

including but not limited to, the U.S.
investigation by
Department
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federal, state
of Labor
or
or local government agency,

the U.S. Pension Benefit Guaranty
Corporation.
However, "Claim" shall not include
labor
or
to
collective
bargaining
agreement.
C.
D.
E.
"Compliance Resolution Penalties" shall mean fines, penalties, sanctions, voluntary correction fees,
compliance fees or user fees assessed against or collected from an "Insured" by the Internal Revenue
Service (IRS) pursuant to a written agreement to correct an inadvertent "Insured Benefit Plan" defect
under an Employee Plan's Compliance Resolution System, including but not limited to the Closing
Agreement Program (CAP); provided; however, that such agreement to correct the plan defect was
agreed to in writing by the "Insured" with the IRS during the "Policy Period" and the "Insured" had no
knowledge of such violations prior to the "Policy Period" inception date.
2. Any "Wrongful Act" occurred for which such "Damages" were awarded or imposed;
3. The "Insured" resides, is incorporated or has its principal place of business; or
4. We are incorporated or have our principal place of business.
"Defense Expenses" means and is limited to:
1. Any reasonable and necessary legal fees and expenses, including attorney fees and expert fees,
2. The premium on appeal, attachment or similar bonds; and
3. Up to $250 per day per "Insured Individual" for supplemental payment for reasonable expenses
incurred for attendance at hearings, trials or depositions at our request or with our consent by such
"Insured Individual". Such payment shall not exceed $5, 000 in the aggregate for all "Insured
Individuals" in each "Claim".
"Defense
F.
G.
Expenses" do
not include:
4.

5.
"ERISA"
state, local
means
the
2.
3.
benefit expenses associated with any "Insured"
our
except
as
employees.
Employee Retirement Income Security Act of 1974, as amended, any similar federal,
or common
"Insured Benefit Plan"

1.
or
or
means:
Any Employee Welfare Benefit Plan, as defined by "ERISA", which

sponsored by the "Insured Entity" or jointly by the "Insured Entity" and
benefit of the employees or "Executives" of the "Insured Entity";
is now
labor entity
was,
a
becomes
or
solely for the
Any Employee Welfare Pension Plan or Pension Plan, as defined by "ERISA", which is operated
solely by "Insured Entity", or jointly by the "Insured Entity" and a labor entity solely for the benefit of
the employees or "Executives" of the "Insured Entity" reported to us in writing in the "Application"; or
Any Employee Pension Benefit Plan or any other pension plan, as defined by "ERISA", created or
acquired during the "Policy Period" by you solely for the benefit of the employees or "Executives" of
the "Insured Entity", but only upon the condition that within sixty (60) days after such creation or
acquisition, you shall have:
a.
Provided written notice to
us
of such
newly-created Employee Pension Benefit Plan;
and
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paid any additional premium
we
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require.
However, if the "Named Insured" does not comply with the conditions in this Paragraph, coverage
under this "Policy" for the "Insured Benefit Plan" shall not apply to "Claims" made
after the formation or acquisition of the "Insured Benefit Plan";
more
than 60
days
Any other Employee Benefit Plan or program not subject to "ERISA" by endorsement which is
sponsored solely by the "Insured Entity" for the benefit of employees or "Executives"; or
5. Any government-mandated insurance program for workers compensation, unemployment, social
security or disability benefits for employees of the "Insured Entity".
Coverage for "Insured Benefit Plans" which are sold, terminated or spun-off during or prior to the end of
the "Policy Period" shall apply only with respect to any "Wrongful Acts" occurring prior to the date of such
sale or spin-off, or in the case of termination, prior to the final date of asset distribution of such "Insured
4.
Benefit Plan".
"Insured Benefit Plan" does not include any
H.
multi-employer plan.
means:
1.
Any executive of the "Insured Entity";

Any past, present or future employees of the "Insured Entity" or "Insured Benefit Plan", but only while
acting in his or her capacity as a fiduciary;
The estates, heirs, legal representatives or assigns of deceased individuals who were "Insured
Individuals" at the time of the "Wrongful Act" on which a "Claim" is based;
or assigns of an "Insured Individual" in the event of the "Insured

insolvency or bankruptcy.
"Insured" means the "Insured Entity", the "Insured Benefit Plan" and any "Insured Individuals".
"Loss" means the amount the "Insured" is legally obligated to pay for "Damages" and "Defense Expenses"
4.
J.
or
2.
3.
I.
Employee Stock Ownership Plans
The legal representatives

Individual's" incompetence,

1.
Civil, criminal
or
administrative fines, taxes or other

or less, fines or penalties
twenty percent (20%)

respectively;
the
2.
amounts which
any form other than
Any
an
"Insured" is
4.
Benefits
5.
Any
to pay
as
result of
"Claim"
seeking relief
or
redress in
monetary "Damages";
3.
or
obligated
penalties, except the five percent (5%) or less, or

imposed under Section 502 (i) and (I) of "ERISA"
contributions
by law;
payable under
an
expenses associated with any accommodation
required under
the Americans with Disabilities

to them
Act, the Civil Rights Act of 1964, rules or regulations promulgated under them, amendments
K.
6.
Any amount not indemnified by the "Insured Entity" for which an "Insured Individual" is absolved
7.
Any
L.
GENERAL
"Related
any
from
Wrongful
common
"Wrongful
Acts"
means
"Wrongful Acts" which
are
logically
or
Act"
means
any actual
or
connected
decision.
causally
or
by
reason
of
alleged:
1.
Breach by an "Insured", or any individual or entity for whose acts an "Insured" is legally responsible,
of the responsibilities, obligations or duties imposed upon fiduciaries of any "Insured Benefit Plan" by
"ERISA" or the common or statutory law of the United States;
2.
Negligent act, error or omission by an "Insured", or any individual or entity for whose acts an "Insured"
legally responsible, solely in the "Administration" of any "Insured Benefit Plan"; or
Any other matter claimed against an "Insured", or any individual or entity for whose acts the "Insured"
is legally responsible, solely by reason of the "Insured's" service as a fiduciary of any "Insured Benefit
is
3.
Plan".
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Any series of "Wrongful Acts" that are connected by reason of

action, omission or decision are a single "Wrongful Act".
IV. SECTION IV
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claimant, transaction, policy,
a common
ADDITIONAL EXCLUSIONS


A.
apply
Policy
Terms and
to:

"Loss"
or attributable to:
on
or
indirectly based upon, arising
out
of,
1.
Such "Insured"
entitled;
gaining
any
profit,
remuneration
or
advantage
to which such "Insured"
was
not
legally
or
2.
Any dishonest or fraudulent act or omission, any criminal

statute or regulation by such "Insured"; or
3.
Any payments
act
or
omission
or
any willful violation of any
to an "Insured" of any remuneration without the previous approval of the security

holders of the "Insured Entity" which payment without such previous approval shall be held to have
been illegal.
However, Paragraphs 1., 2., and 3. above shall not apply unless
judgment
or
other final
adjudication
5.
physical injury to or destruction of any tangible property, including all resulting loss of use of that
property and loss of use of property that is not physically injured.
Bodily injury, disability, sickness, disease, death, assault or battery sustained by any individual.
6.
The
4.
The
wrongful entry, eviction, false arrest, false imprisonment or detention, malicious prosecution,
libel, slander, mental anguish, humiliation, emotional distress, oral or written publication of defamatory
or
disparaging
material.
or alleged discrimination, retaliation or wrongful termination of employment; provided,

however, this exclusion shall not apply to "Claims" asserted under Section 510 of "ERISA".
7.
Any actual
8.
of any notice given prior to the inception of this "Policy" under any other policy of insurance.
Any other "Wrongful Act", whenever occurring, which together with another "Wrongful Act" has been
the subject of a claim or notice and would constitute "Related Wrongful Acts".
Any liability of others assumed under any contract or agreement. However, this exclusion does not
apply to:
a.
Liability you would have had in the absence of the agreement; or
9.
10.
b.
11.
Any
contract
or
agreement establishing
an
"Insured Benefit Plan".
Social Security, disability benefits or any similar laws, the Worker's Adjustment and Retraining
Notification Act, the Fair Labor Standards Act, the Occupational Safety and Health Act, the National
Labor Relations Act, including amendments thereto, or any similar or related law other than the
Consolidated Omnibus Budget Reconciliation Act of 1985 or the Health Insurance Portability and
Accountability Act of 1996.
This exclusion shall not apply to any "Claim" for retaliatory treatment
who is attempting to exercise his or her rights under the above laws.
against any "Insured Individual"
12. The actual or alleged failure to collect or fund contributions owed to any "Insured Benefit Plan", unless
the failure is caused by negligence of any "Insured". We will however, provide a defense of any such
"Claim", without any liability by us to pay such sums that any "Insured" shall become legally obligated
to pay as "Damages".
B.
"Loss"
1.
on
For the return
or
reversion to any
against
any "Insured":
employer of any contribution
to
or
asset of
an
"Insured Benefit
Plan";
Page 4 of 5
907-0001 08 09
2.
For the costs of
compliance
Document 1-2
with any order for,
Filed 04/15/16
grant of,
or
agreement
Page
to
36 of 94
provide non-monetary relief;
or
3.
To the extent such "Loss" constitutes benefits due or to become due under an "Insured Benefit Plan",
or benefits which would be due under an "Insured Benefit Plan" if its terms complied with all
applicable law, except to the extent that:
payable by
a.
The benefits
are
b.
Recovery for
the benefits is based
an
on a
covered
as an
individual
and
"Wrongful Act".
we will provide a defense of any such "Claim", without any

any "Insured" shall become legally obligated to pay as "Damages".
However,
obligation;
liability by
us
to pay such
sums
that
to or knowledge possessed by or "Wrongful Act" of any "Insured Individuals" shall be

to any other "Insured Individuals" for the purpose of determining the applicability of the exclusions
listed above.
No fact
pertaining
imputed
V.
SECTION V

Terms and Conditions Section, the following condition applies to this "Coverage Part".
A.
Acquisition
or
Policy
of the "Policy Period" the "Insured Entity" acquires or forms a "Subsidiary" or acquires
than fifty percent (50%) of the assets, liabilities, or equity of, or obtains the right to elect
or select a majority of directors or trustees of such an entity, coverage under this "Coverage Part" shall
apply to the "Subsidiary" only if the "Named Insured" meets the following conditions:
If after the
inception
or assumes more
1.
formed "Subsidiary" exceeds ten percent (10%) of the total assets of the "Insured Entity" as of the
beginning of the "Policy Period", then the "Named Insured" shall give us written notice of the
2.
If at the time of the acquisition or formation described above, the total assets of the acquired or
formed "Subsidiary" exceeds twenty-five percent (25%) of the total assets of the "Insured Entity" as of
the beginning of the "Policy Period", then the "Named Insured" shall agree to any amendments to the
terms of this "Policy" we require and shall pay any additional premium we require.
3.
If the "Named Insured" does not comply with the conditions in Paragraphs 1. and 2., coverage under
this "Coverage Part" for the "Subsidiary" shall terminate regarding "Claims" first made more than 60
days after the formation or acquisition of the "Subsidiary".
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CRIME INSURANCE COVERAGE PART

DISCOVERY FORM
Various provisions in this "Coverage Part" restrict coverage. Read the entire
determine rights, duties and what is or is not covered.
"Coverage Part" carefully
to
this insurance "Policy" the words "you" and "your" refer to the "Insured" as
Throughout this "Coverage Part" of
ADDITIONAL
All words that appear in quotation marks have special meaning. They are defined in SECTION III
I.
INSURING AGREEMENTS
Crime Insurance
is provided under the following Insuring Agreements for which a Limit of Liability is shown in the
Declarations and applies to loss that you sustain resulting directly from an "Occurrence" taking place at any
time which is "Discovered" by you during the "Policy Period" shown in the Declarations or during the period
EXTENDED PERIOD TO DISCOVER LOSS of this "Coverage Part". If the
of time provided in SECTION II
term "Not Covered" is indicated in the Declarations for any specified Insuring Agreement or if no amount is
included in the Limit of Liability, such Insuring Agreement and any reference thereto in this "Coverage Part" is
deemed to be deleted.
Coverage
A.
Employee Theft
We will pay you for loss of
"Employee", whether identified
ERISA
damage
to
caused by "Theft" committed

in collusion with other persons.
"Property" directly
not, acting alone
or
or
dishonest acts
or in
acting alone
Employee Theft of Client Property

We will pay you for loss of or damage to "Property" sustained by your "Client" directly caused
committed by an identified "Employee" not in collusion with such "Client's" employees.
D.
Forgery
1.
or
Alteration
drawn upon you;
a.
Made
or
drawn
by
or
b.
Made
or
drawn
by
one
that
are
purported
acting
as
to have been
your
so
or
agent,
made
or
drawn.
For the purposes of this Insuring Agreement, a substitute check as defined in the Check
the 21st Century Act shall be treated the same as the original it replaced.
2.
Clearing for
If you are sued for refusing to pay any instrument covered in Paragraph D.1. on the basis that it has
been forged or altered, and you have our written consent to defend against the suit, we will pay for
any reasonable legal expenses that you incur and pay in that defense. The amount that we will pay is
in addition to the Limit of Liability applicable to this Insuring Agreement.
Theft of Money and Securities

1.
by "Theft"
We will pay you for loss directly caused by "Forgery" or alteration of checks, drafts, promissory notes,
or similar written promises, orders or directions to pay a sum certain in "Money" that are:
or
E.
an
Fidelity
We will pay you for loss of or damage to "Property" directly caused by fraudulent
committed by an employee of any "Employee Benefit Plan", whether identified or not,
collusion with other persons.
C.
by
Insuring Agreement, "Theft" shall also include "Forgery".
For the purposes of this

B.
or
or
We will pay you for loss of "Funds" inside the "Premises"
or
"Banking Premises":
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908-0001 08 09
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a.
Directly caused by "Theft" committed by

Premises";
b.
2.
3.
F.
2.
3.
G.
person
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present inside such "Premises"
"Banking
or
or
destruction.
We will pay you for loss from damage to the "Premises" or its exterior
attempted "Theft" of "Funds", if you are the owner of the "Premises" or
directly caused by an actual

liable for damage to it.
or
are
We will pay you for loss of or damage to a locked safe, vault, cash register, cash box or cash drawer
located inside the "Premises" directly caused by an actual or attempted "Theft" of or unlawful entry
into those containers.
or
Safe
Burglary
of Other
or
Property (Inside the Premises)
damage
to "Other
directly caused by
a.
Inside the "Premises"
b.
Inside the "Premises" in
safe
or
vault
an
Property":
actual
directly
or
attempted "Robbery" of a "Custodian";
caused
by
an
actual
or
or
attempted "Safe Burglary".
We will pay you for loss from damage to the "Premises" or its exterior directly caused by an actual
attempted "Robbery" or "Safe Burglary" of "Other Property", if you are the owner of the "Premises"
are liable for damage to it.
We will pay you for loss of or damage to a locked safe or vault located inside the "Premises"
caused by an actual or attempted "Robbery" or "Safe Burglary".
or
or
directly
Outside the Premises

1.
H.
Page
or
Directly caused by disappearance
Robbery
1.
Filed 04/15/16
Document 1-2
We will pay you for loss of "Funds" while in transit outside the "Premises" in the care and
"Messenger", including while temporarily within the living quarters of a "Messenger" or
motor vehicle company directly caused by "Theft", disappearance or destruction.
custody of a
an
armored
2.
We will pay you for loss of or damage to "Other Property" while in transit outside the "Premises" in the
care and custody of a "Messenger" or an armored motor vehicle company directly caused by an
actual or attempted "Robbery".
3.
We will pay you for loss of or damage to "Other Property" directly caused
"Theft" while temporarily within the living quarters of a "Messenger".
by
an
actual
or
attempted
Computer Crime
1.
Computer Fraud
We will pay you for loss of or damage to "Property" directly caused by the use of any computer to
cause a transfer of that "Property" from inside the "Premises" or "Banking Premises":
fraudulently
2.
(other
a.
To
person
b.
To
place outside
Computer Program
than
"Messenger")
outside those "Premises";
or
those "Premises".
and Electronic Data Restoration
Expense
We will pay you for reasonable "Restoration Expense" that you incur to restore or replace damaged or
destroyed "Computer Programs" or "Electronic Data" stored within your "Computer System" directly
caused by a "Computer Violation."
For the purposes of this Insuring Agreement, an "Occurrence" involving "Computer Program" and
"Electronic Data" "Restoration Expense" applies to reasonable "Restoration Expense" incurred by you
between the time you "Discover" the damage or destruction and the time your "Computer Program" or
"Electronic Data" is restored to the level of operational capability that existed immediately preceding a
"Computer Violation." Recurrence of the same "Computer Virus" after your "Computer Program" or
"Electronic Data" has been restored shall constitute a separate "Occurrence."
Payment of reasonable "Restoration Expense" applies:

a.
Only to "Computer Programs" and "Electronic Data" which you
own or
for which you
are
legally
liable; and
b.
Only if you are unable

copies.
to
reproduce such "Computer Programs"
or
"Electronic Data" from
back-up
data
Payment of reasonable "Restoration Expense" will be made to you upon the completion of the
restoration of the damaged or destroyed "Computer Programs" or "Electronic Data."
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If a loss is covered under Insuring Agreements H.1. and H.2., then only the Retention for a loss under
Insuring Agreement H.1. shall be applicable and the payment of "Restoration Expense" under
Insuring Agreement H.2. shall be part of, and not in addition to, the Limit of Liability for Insuring
Agreement H.1..
I.
Funds Transfer Fraud

We will pay you for loss of "Funds" directly caused by a "Fraudulent Instruction"
institution to transfer, pay or deliver "Funds" from your "Transfer Account".
J.
Credit, Debit
or
Money Orders
2.
L.
financial
"Property" directly caused by "Credit, Debit
or
Charge Card
and Counterfeit
Money
directly caused by
We will pay you for loss

merchandise, "Money" or services:
I.
Charge Card Fraud
We will pay you for loss of or damage to

Fraud" committed by a "Third Party".
K.
directing
your
having accepted
in
good faith,
Money orders issued by any post office, express company or bank

presentation; or
"Counterfeit Money" that is acquired during the regular course of business.
that
are
in
exchange for
paid
not
upon
Personal Accounts Protection

1.
Personal Accounts
Forgery
or
Alteration
a.
Drawn upon
personal
accounts of your "Executive" or that are
purported
to have been
so
drawn;
Or
b.
Made or drawn by
made or drawn.
one
acting
as an
agent of your "Executive",
or
that
are
purported
to have been
so
2.
Identity Fraud Expense Reimbursement

We will reimburse you, on behalf of your "Executive", for
"Executive" as a direct result of any "Identity Fraud."
M.
Clearing for
"Identity Fraud Expense" incurred by
an
Investigative Expense
I.
We will pay you for "Investigative Expenses" to determine the amount of loss covered under any
Insuring Agreement of this "Coverage Part".
2.
We will pay you for
3.
We will have no
does not exceed
the Declarations.
4.
"Investigative Expenses" after settlement of covered loss.

liability to pay any such "Investigative Expenses" if the amount of the covered loss
the Retention Amount of the applicable Insuring Agreement as set forth in Item 2. of
The amount that we will pay is part of, not in addition to the Limit of
as set forth in Item 2. of the Declarations.
Liability for the applicable Insuring
Agreement
II.
EXTENDED PERIOD TO DISCOVER LOSS

We will pay you for loss described in SECTION I
INSURING AGREEMENTS that you sustained
effective date of cancellation of this "Coverage Part", which is "Discovered" by you:
III.
to the
days from the date of that cancellation.
A.
No later than 90
B.
No later than 1 year from the date of that cancellation with
C.
prior
"Employee Benefit Plans."

However, this extended period to "Discover" loss terminates immediately upon the effective date of any
other insurance policy obtained by you, whether from us or another insurer, replacing in whole or in part
the coverage afforded under this "Coverage Part", whether or not such other insurance policy provides
coverage for loss sustained prior to its effective date.
regard
to any
Page 3 of 17
908-0001 08 09
Conditions Section, the

Part":
following
Filed 04/15/16
Document 1-2
Page
DEFINITIONS of the Common
40 of 94
Policy Terms
meanings indicated below,
terms shall have the
and
when used in this
"Coverage
portion of any building occupied by
banking institution
A.
"Banking Premises" means the interior of that

similar safe depository.
B.
"Client" means an entity specifically scheduled as "Client" by endorsement to this "Coverage Part" for
which you perform services for a fee or under written contract while that contract is in effect.
C.
"Client's Premises"
its business.
D.
"Computer Program" means a set of related electronic instructions which direct the operations and
functions of a "Computer System" or devices connected to it which enable the "Computer System" or
devices to receive, process, store, retrieve, send, create or otherwise act upon "Electronic Data."
E.
"Computer System" means a computer and all input, output, processing, storage and communication
facilities and equipment which are connected to such a device and which the operating system or
application software used by you are under direct operational control by you. Off-line media libraries are
deemed to be part of such "Computer System."
F.
"Computer Violation"
G.
the interior of that
2.
Vandalism
to
by a natural person,
"Computer System."
"Computer Virus"
Directed
portion of any building your "Client" occupies
in
or
conducting
means:
"Computer Virus" designed
1.
1.
means
means a set
solely against
damage or destroy a "Computer Program" or "Electronic Data"; or

including an "Employee" who has gained unauthorized access to your
of unauthorized instructions,
programmatic
or
otherwise:
you; and
propagates themselves through the "Computer System" or networks,

were maliciously introduced by a natural person.
provided
2.
That
such instructions
H.
"Counterfeit
Money"
means
an
imitation of
that is intended to deceive and to be taken
"Money"
as
genuine.
I.
or Charge Card Fraud" means the "Forgery" or alteration of, on or in, any written instrument
with any transaction involving any credit, debit or charge card issued to you, or at
in
connection
required
your request, to any "Employee".
J.
"Custodian" means you, or any of your partners or "Members", or any "Employee" while having care and
custody of "Property" inside the "Premises", excluding any person while acting as a "Watchperson" or
janitor.
K.
"Digital Signature"
"Credit, Debit
associated with
L.
means an
electronic identifier created
record, and executed
or
adopted by
by computer, within,
person with the intent to
attached to, or
sign the record.
logically
"Discover", "Discovered" or "Discovery" means the time when an "Executive" first becomes aware of facts
which would cause a reasonable person to assume that a loss of a type covered by this "Coverage Part"
has been or will be incurred, regardless of when the act or acts causing or contributing to such loss
occurred, even though the exact amount or details of loss may not then be known.
"Discover", "Discovered"
or "Discovery" also means the time when you or an "Executive" first receive
notice of an actual or potential claim in which it is alleged that you are liable to a "Third Party" under
circumstances which, if true, would constitute a loss under this "Coverage Part".
M. "Electronic Data"
means
facts
1.
Which does not
provide
2.
Which is stored
on
or
information converted to
instructions
electronic
or
directions to
processing
media
form usable in
"Computer System":
"Computer System"; or
for use by a "Computer Program".
a
N.
"Electronic Signature" means a "Digital Signature", an electronic sound, symbol or process, within,
attached to, or logically associated with a record and executed or adopted by a person with the intent to
sign the record.
0.
"Employee"
1.
means:
Any natural person:

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a.
While in your service and for the first 60 days immediately after termination of service, unless
such termination is due to "Theft" or any other dishonest act committed by the "Employee";
b.
Who you
c.
2.
Document 1-2
compensate directly by salary, wages or commissions; and

Who you have the right to direct and control while performing services
Any natural person who is furnished temporarily to you:

a.
To substitute for a permanent "Employee" as defined
b.
To meet seasonal
or
in
for you;
Paragraph 0.1.
who is
on
leave;
or
short-term work load conditions
while that person is subject to your direction and control and performing services for you, excluding,
however, any such person while having care and custody of "Property" outside the "Premises";
3.
Any natural person who is leased to you under a written agreement between
firm, to perform duties related to the conduct of your business, but does
employee as defined in Paragraph 0.2.;
4.
Any natural person who is:
5.
a.
A trustee, officer, employee, administrator or manager, except an administrator

is an independent contractor of any "Employee Benefit Plan"; or
b.
A director or trustee of yours while that person is

Property" of any "Employee Benefit Plan";
engaged
in
or
manager who
handling "Funds"
or
"Other
Any natural person:

a.
Who is a former "Employee", partner,

while performing services for you; or
b.
Who is
non-compensated officer;
"Member", "Manager", "Executive" retained
as a
consultant
or
non-compensated fund solicitor during fund raising campaigns; or

d. Who is a guest student or intern pursuing studies or duties, excluding, however, any such
while having care and custody of "Property" outside the "Premises";
Any attorney retained by you, while performing legal services for you.
c.
6.
you and a labor leasing

not mean a temporary
While
acting
as a
7.
Any "Employee" of
"Policy"; or
8.
Any of your "Managers",
an
entity merged
directors
or
or
consolidated with you
prior
person
to the effective date of this
trustees while:
acts within the scope of the usual duties of
a.
Performing
b.
member of any committee duly elected or appointed by resolution of your board of

Acting
directors or board of trustees to perform specific, as distinguished from general, directorial acts
on your behalf.
an
"Employee";
or
as a
"Employee" does not include any agent, broker, factor, commission merchant, consignee, independent
representative of the same general character not specified in Paragraph 0.
contractor or
P.
"Employee Benefit Plan" means any welfare or pension benefit plan that you sponsor and which is subject
Employee Retirement Income Security Act of 1974 (ERISA) and any amendments thereto.
to the
Q. "Executive" means your owner, natural person partner, member of the board of directors, member of the
board of trustees, officer, risk manager, in-house general counsel, "Manager", or "Member".
R.
"Forgery"
not
mean
authority,
S.
the signing of the name of another

signature which consists in whole or
any capacity, for any purpose.
means
a
in
"Fraudulent Instruction"
person or organization with intent to deceive; it does

in part of one's own name signed with or without
means:
1.
An electronic, telegraphic, cable, teletype, telefacsimile or telephone instruction which purports to

have been transmitted by you, but which was in fact been fraudulently transmitted by someone else
without your knowledge or consent;
2.
A written instruction (other than those described in Insuring Agreement I.D. of this "Coverage Part")
issued by you, which was forged or altered by someone other than you without your knowledge or
consent, or which purports to have been issued by you, but was in fact fraudulently issued without
your
knowledge
or
consent;
or
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3.
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Document 1-2
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An electronic, telegraphic, cable, teletype, telefacsimile, telephone or written instruction initially

received by you which purports to have been transmitted by an "Employee" but which was in fact
fraudulently transmitted by someone else without your or the "Employee's" knowledge or consent.
and "Securities".
"Money"
T.
"Funds"
U.
means the act of knowingly transferring or using, without lawful authority, a means of
identification of an "Executive" with the intent to commit, aid, or abet any unlawful activity that constitutes
a violation of federal law or a felony under any applicable state or local law.
V.
"Identity Fraud Expense"
means
"Identity Fraud"
1.
2.
means:
Costs of notarizing fraud affidavits or similar documents for credit agencies, financial institutions,
merchants or other credit grantors that have required that such affidavits be notarized;
Costs for certified mail to law enforcement
other credit grantors;
agencies, credit agencies, financial institutions,
merchants
or
3.
Costs for
long
distance
institutions, merchants
4.
Lost wage, up to a maximum payment of

result of absence from employment:
maximum
period of 5 weeks,
as a
legal counsel, credit agencies, financial
b.
To
c.
Due to wrongful incarceration arising solely from someone having committed a crime in the
"Executive's" name; provided, that lost wages shall not apply in the case of wrongful incarceration
absent all charges being dismissed or an acquittal;
complete fraud affidavits
or
similar documents;
or
Loan application fees for reapplying for a loan or loans when the
because the lender received incorrect credit information;
6.
Reasonable
attorney fees incurred,
with
our
Defense of lawsuits brought against your "Executive"

credit grantors or their collection agencies;
b.
The removal of any criminal
c.
Challenging the
accuracy
or
by financial institutions, merchants,
other
judgments wrongly entered against your "Executive"; or

completeness of any information in a consumer credit report; and
or
civil
Costs for daycare and eldercare incurred

during the "Policy Period."
Expense"
original application is rejected solely
prior written consent, for:
a.
solely
as a
does not include any expense
"Identity Fraud" "Discovered"
direct result of any

or
loss not listed in
Paragraphs
1.
through
7. of
means:
respect to Insuring Agreement I.B., any "Employee Benefit Plans" only;
1.
With
2.
With respect to all other

Declarations.
Insuring Agreements,
or
the "Named Insured" defined in Item 1. of the
"Investigative Expenses" means reasonable and necessary expenses (expenses other than internal
corporate costs such as "Employee" salaries and wages) incurred by you with our prior written consent to
establish the amount of
AA.
per week for
To communicate with law enforcement agencies,

institutions, merchants or other credit grantors;
W. "Insured"
Z.
$1, 000.00
a.
"Identity Fraud
this definition.
Y.
telephone calls to law enforcement agencies, credit agencies, financial

other credit grantors to report or discuss any actual "Identity Fraud";
5.
7.
X.
or
covered loss.
"Investigative Expenses" shall not include expenses incurred by any "Client".

"Manager" means a person serving in a directorial capacity for a limited liability
"Member" means
also may serve as
an owner
of
limited
liability company represented by
its
company.
membership interest,
who
"Manager".
"Messenger" means you, or a relative of yours, or any of your partners or "Members",

having care and custody of "Property" outside the "Premises".
"Money" means:
1. Currency, coins and bank notes in current use and having a face value; and
2. Travelers checks, register checks and money orders held for sale to the public.
or
any
"Employee"
while
BB.
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CC.
"Occurrence"
1.
Under
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means:
Insuring Agreements I.A., I.B., and I.C. of this "Coverage Section":
a.
An individual act;
b.
The combined total of all
c.
A series of acts whether
separate
or
not
acts whether or not
related;
or
related,
committed by an "Employee" acting alone or in collusion with other persons,

Period" shown in the Declarations, before such "Policy Period" or both.
2.
Under
Insuring Agreement
I.D. of this
a.
An individual act;
b.
c.
committed
by
person
"Coverage Section":
separate
or
during the "Policy
acts whether or not
related;
or
not related,
acting alone
or
involving
in collusion with other persons,
one
or
more
instruments, during the "Policy Period" shown in the Declarations, before such "Policy Period"
or
both.
3.
Under all other
Insuring Agreements:
event;
a.
An individual act
b.
c.
A series of acts
or
or
separate
events whether
acts
or
or
events whether
or
not related;
or
not related,
committed by a person acting alone or in collusion with other persons, whether identified
during the "Policy Period" shown in the Declarations, before such "Policy Period" or both.
DD.
EE.
FF.
GG.
or
not,
Property" means any tangible property other than "Money" and "Securities" that has intrinsic value.
Property" does not include "Computer Programs", "Electronic Data", or "Computer Systems".
Property" also does not include any property specifically excluded under this "Coverage Part".
"Premises" means the interior of that portion of any building you occupy in conducting your business.
"Property" means "Money", "Securities", or "Other Property".
"Restoration Expense" means reasonable costs incurred by you to reproduce "Computer Programs" or
"Electronic Data" and enable you to restore your "Computer System" to the level of operational capability
that existed immediately preceding a "Computer Violation."
"Other
"Other
"Other
"Restoration
1.
2.
Expense"
Your internal
related to any
does not include:
corporate
costs and expenses,
including "Employee" remuneration and any
costs
legal action;
Expenses incurred as a result of the reconstruction of "Computer Programs" or "Electronic Data"

recorded on media, including, but not limited to, magnetic or optical media if there are no analyses
files, specifications or backups of "Computer Programs" or "Electronic Data" held outside the
"Premises";
3.
Expenses incurred as a result of the reconstruction of "Computer Programs"

knowingly use illegal copies of programs;
and "Electronic Data" if
you
4.
Expenses incurred to render the "Computer Programs"

processing equipment;
5.
Expenses incurred to design, update

perfect their operation or performance;
or
and "Electronic Data" usable
improve "Computer Programs"
or
by replacement
"Electronic Data"
or
to
Expenses incurred as a result of alteration in "Computer Programs" and "Electronic Data" held on
magnetic media due to the effect of magnetic fields, incorrect usage of the "Computer Programs" and
"Electronic Data", or the obsolescence of the "Computer System";
7. Your lost revenue, sales or profits; or
8. Expenses incurred by any customer.
"Robbery" means the unlawful taking of "Property" from the care and custody of a person by one who
6.
HH.
has:
Page
908-0001 08 09
7 of 17
1.
Caused
2.
Committed
or
threatened to
JJ.
an
cause
that person
obviously unlawful
bodily harm;
act witnessed
by that
Page
person.
taking
burglary"
"Property" from within a locked safe or vault by a person unlawfully entering
evidenced by marks of forcible entry upon its exterior; or
2.
A safe
means
or
the unlawful
Tokens, tickets,
a
2.
meter)
of:
the safe
vault
as
representing "Money"
or
or
vault from inside the "Premises".
"Securities" means negotiable and

"Other Property" and includes:
1.
44 of 94
or
1.
"Safe
II.
Filed 04/15/16
Document 1-2
nonnegotiable instruments
revenue and other

in current use; and
contracts
or
stamps (whether represented by actual stamps
Evidences of debt issued in connection with credit
or
charge cards,
or
which cards
unused value in
are
not issued
by
you,
but does not include
KK.
"Theft"
means:
Insuring Agreement I.C.,
1.
With respect to
of a "Client"; or
2.
With respect to Insuring Agreements

deprivation; or
3.
With
respect
deprivation.
to all other
LL.
"Third
MM.
"Transfer Account"
initiate the transfer,
1.
2.
NN.
"Money".
Party"
means a
the intentional unlawful
I.E. and I.G., the intentional unlawful
person other than
taking of "Property"
an
"Insured"
or
taking
to the
deprivation
of "Funds" to your
to your
"Employee".
means an account maintained by you at a financial institution from which you can
payment or delivery of "funds":
By means of electronic, telegraphic, cable, teletype, telefacsimile or telephone instructions
communicated directly through an electronic funds transfer system; or
By means of written instructions (other than those described in Insuring Agreement I.D. of this
"Coverage Part") establishing the conditions under which such transfers are to be initiated by such
financial institution through an electronic funds transfer system.
"Watchperson" means any person you retain

"Premises" and who has no other duties.
specifically
to have
care
and
custody of "Property" inside
the

Policy
Terms and
Conditions, the following Exclusions apply to this "Coverage Part".

A.
For the
1.
Purpose of all Insuring Agreements of this "Coverage Part", this "Policy" shall
By You, Your Partners or Your "Members"
Loss
resulting from "Theft"
a.
You;
b.
Any of your partners
whether
2.
not
cover:
Acts Committed
Acts of
or
any other dishonest act committed
by:
or
acting alone
"Employees"
or
or
"Members",
Learned Of
By You
Prior To the
"Policy
Period"
Loss caused by an "Employee" if the "Employee" had also committed "Theft" or any other dishonest
act prior to the effective date of this "Policy" and you or any of your partners, "Members", "Managers",
"Executive", not in collusion with the "Employee", learned of that "Theft" or dishonest act prior to the
"Policy Period" shown in the Declarations.
3.
Acts of
"Employees", "Managers", or "Executives"

Loss resulting from "Theft" or any other dishonest act committed by
"Managers", or "Executives":
a.
Whether acting alone or in collusion with other persons; or
908-0001 08 09
any of your
"Employees",
Document 1-2
b.
While
services for you or otherwise, except when covered under

I.C. of this "Coverage Part".
a.
b.
resulting from:
The unauthorized disclosure of your confidential information including, but not limited to,
trade secrets, "Electronic Data", "Computer Programs", processing methods or customer
patents,
lists; or
The unauthorized use or disclosure of confidential information of another person or entity which is
held by you including, but not limited to, financial information, personal information, credit card
information or similar non-public information.
Governmental Action
Loss resulting from expropriation, nationalization,
governmental authority.
6.
Insuring Agreements
Confidential Information
Loss
5.
or
45 of 94
Page
performing
I.A., I.B.,
4.
Filed 04/15/16
seizure
or
destruction of
"Property" by
order of
Indirect loss
Loss that is an indirect result of
limited to, loss resulting from:
an
"Occurrence" covered
by this "Coverage Part" including, but
not
inability to realize income that you would have realized had there been no loss of or damage
"Property".
b. Payment of damages of any type for which you are legally liable. But, we will pay compensatory
damages arising directly from a loss covered under this "Coverage Part".
c.
Payment of "Investigative Expenses" except when covered under Insuring Agreement I.M. of this
"Coverage Part".
d. Payment of costs, fees or other expenses you incur in establishing the existence of loss under
this "Coverage Part."
e.
Fines, penalties, multiple or punitive damages that you incur.
Legal Fees, Costs and Expenses
Fees, costs and expenses incurred by you which are related to any legal action, except when covered
under Insuring Agreement I.D. of this "Coverage Part".
a.
Your
to
7.
8.
Trading
trading, whether in your name or in a genuine or fictitious

resulting directly from trading in a genuine account when
covered under Insuring Agreements LA., LB., or I.C. of this "Coverage Part".
War and Military Action
Loss or damage resulting from:
a.
War, including undeclared or civil war;
b. Warlike action by a military force, including action in hindering or defending against an actual or
expected attack, by any government, sovereign or other authority using military personnel or
Loss
resulting directly
account. However,
9.
we
indirectly from
will pay for loss
or
other
c.
B.
agents; or
Insurrection, rebellion, revolution, usurped power,
hindering or defending against any of these.
For the purpose of
Insuring Agreements LA., I.B.,
or
action taken
by governmental authority
"Coverage Part"
or
I.C. of this
as
to its existence
this
"Policy" shall
in
not
cover:
1.
Inventory Shortages
Loss,
or
a.
An
b.
that
part of any loss, the proof of which
inventory computation;
profit
and loss
or
amount is
dependent
upon:
or
computation.
However, where you establish wholly apart from such computations that you have sustained
then you may offer your
amount of loss claimed.
inventory
records and actual
physical
count of
inventory
in
Page
908-0001 08 09
loss,
support of the
9 of 17
Document 1-2
2.
Filed 04/15/16
46 of 94
Receipts
Warehouse
Loss resulting from the fraudulent or dishonest signing,

warehouse receipt or any papers connected with it.
C.
Page
For the purpose of
Insuring Agreements I.E., I.F.,
or
issuing, canceling
"Coverage
I.G. of this
or
failing
Part" this
cancel,
to
"Policy" shall
not
cover:
1.
Accounting
Loss
2.
or
resulting
Arithmetical Errors
or
from
arithmetical
accounting
or
Omissions
errors or
omissions.
Purchases
from the
giving
or
of
surrendering
"Property"
in any
exchange
or
purchase.
Fire
Loss
4.
resulting
Exchanges
Loss
3.
or
or
damage resulting from fire, however caused, except:
a.
Loss of
or
damage
to
"Funds"; and
b.
Loss from
damage
to
Money Operated
safe
or
vault.
Devices
Loss of "Property" contained in any money operated device unless the amount of
in it is recorded by a continuous recording instrument in the device.
5.
Equipment and Accessories

damage to motor vehicles, trailers or
Motor vehicles
Loss of
or
"Money" deposited
or
semi-trailers
or
equipment and accessories attached
to them.
6.
Transfer
a.
or
Surrender of
"Property"
Loss of or damage to "Property" after it has been transferred

outside the "Premises" or "Banking Premises":
1)
or
surrendered to
person
or
place
On the basis of unauthorized instructions;
2) As
result of
threat to do
threat to do
threat to introduce
3)
4)
5)
As
result of
As
result of
As
6)
As
result of
result of
bodily harm to any person;

damage to any "Property";
a
denial of service attack into your
"Computer System";
result of a threat to introduce a virus or other malicious instruction into your

System" which is designed to damage, destroy or corrupt data or "Computer
stored within your "Computer System";
threat to
contaminate, pollute
render substandard your
or
"Computer
Programs"
products
or
goods;
or
7)
As
a)
b)
b.
Your confidential
information;
Weaknesses in the
source
divulge
utilize:
or
or
code within your
"Computer System".
However, this Exclusion does not apply with respect to Insuring Agreement I.G. of this "Coverage
Part" to loss of
if you:
1)
2)
7.
threat to disseminate,
Had
"Property" while outside the "Premises" in
knowledge of any threat at the

knowledge of a threat at the time
no
Had
the threat.
the
care
time the conveyance

the conveyance
and
began;
custody of
began, but the loss
was
not related to
Vandalism
Voluntary Parting of
Title to
or
Possession of
Loss resulting from your, or anyone acting

dishonest act to voluntarily part with title to
D.
"Messenger"
or
Loss from damage to the "Premises" or its exterior, or to any safe, vault, cash
cash drawer or "Other Property" by vandalism or malicious mischief.
8.
For the purpose of
Insuring Agreement
register,
cash box,
"Property"
on
your express or implied authority,

of any "Property".
or
possession
I.H. of this
"Coverage
Part" this
"Policy"
being induced by
shall not
any
cover:
Page 10 of
908-0001 08 09
17
Document 1-2
1.
the
resulting from
Loss
use
or
or
use of credit, debit,

the information contained
purported
other cards
or
V.
charge,
on
access,
convenience,
such cards.
directing
financial institution to transfer, pay
or
deliver
Inventory Shortages
Loss,
E.
47 of 94

Loss resulting from a "Fraudulent Instruction"
"Funds" from your "Transfer Account".
3.
Page
Credit Card Transactions
identification, stored-value
2.
Filed 04/15/16
or
that
part of
any loss, the
proof of which
as
to its existence
or
amount is
dependent upon:
profit and loss computation.
a.
An
b.
or
For the purpose of Insuring Agreements 1.1. of this "Coverage Part"; this "Policy" shall not
resulting from the use of a computer to fraudulently cause a transfer of "Property".
cover
loss
LIMIT OF LIABILITY AND RETENTIONS

A.
Limit of
1.
Liability
The most
Liability
2.
B.
will pay for all loss resulting directly from

set forth in Item 2. of the Declarations.
we
as
an
"Occurrence" is the
applicable Limit of
If any loss is covered under more than one Insuring Agreement or "Coverage Part", the most we will
pay for such loss shall not exceed the largest Limit of Liability available under any one of those
Insuring Agreements or "Coverage Parts".
Retention
We will not pay for loss resulting directly from an "Occurrence" unless the amount of loss exceeds the
Retention Amount as set forth in Item 2. of the Declarations. We will then pay the amount of loss in
excess of the Retention Amount, up to the Limit of Liability.
VI. DUTIES IN THE EVENT OF LOSS

After you "Discover" a loss
of the Retention, you must:
or a
situation that may result in loss of
or
damage
to
"Property"
that exceeds 25%
A.
Notify us as soon as practicable. If you have reason to believe that any loss (except for loss covered
under Insuring Agreements I.A., I.B., I.C. or I.D. of this "Coverage Part") involves a violation of law, you
must also notify the local law enforcement authorities.
B.
Submit to examination under oath at
C.
Produce for
D.
Give
E.
us a
our
examination all
detailed,
Cooperate
with
us
our
request and give
us a
signed
statement of your
answers.
pertinent records.
proof of loss within 120 days.

investigation and settlement of any
sworn
in the
claim.
VII. ADDITIONAL CONDITIONS

A.
Conditions
Applicable
to all
Additional Premises
or
Insuring Agreements of this "Coverage

Employees
Policy
Part":
If, during the "Policy Period", you establish any additional "Premises" or hire additional "Employees",
other than through consolidation or merger with, or purchase or acquisition of assets or liabilities of,
another entity, such "Premises" and "Employees" shall automatically be covered under this
"Coverage Part". Notice to us of an increase in the number of "Premises" or "Employees" need not be
given and no additional premium need be paid for the remainder of the "Policy Period" shown in the
Declarations.
2.
Consolidation, Merger
If you consolidate
or
or
Acquisition
merge with,
or
purchase
or
acquire
the assets
or
liabilities of, another
entity:
Page
908-0001 08 09
11 of 17
a.
Document 1-2
Filed 04/15/16
Page
48 of 94
give us written notice as soon as possible and obtain our written consent to extend the
provided by this "Coverage Part" to such consolidated or merged entity or such
purchased or acquired assets or liabilities. We may condition our consent by requiring payment of
an additional premium; but
For the first 90 days after the effective date of such consolidation, merger or purchase or
acquisition of assets or liabilities, the coverage provided by this "Coverage Part" shall apply to
such consolidated or merged entity or such purchased or acquired assets or liabilities, provided
that all "Occurrences" causing or contributing to a loss involving such consolidation, merger or
purchase or acquisition of assets or liabilities, must take place after the effective date of such
consolidation, merger or purchase or acquisition of assets or liabilities.
You must
coverage
b.
c.
3.
The notice requirement shall not apply and coverage under this condition shall extend for the
remainder of the "Policy Period", provided:
1)
The assets of the merged, purchased, or acquired entity do not exceed 25% of the total
assets of the "Insured" as reflected in the "Insured's" most recent fiscal year-end financial
statement or
2)
The merger,
Period."
purchase
or
acquisition
occurs
less than 90
days prior
to the end of the
"Policy
"Subsidiary"
If, during
"Policy Period" you acquire or form a "Subsidiary":
a.
You must give us written notice as soon as possible and obtain our written consent to extend the
coverage provided by this "Coverage Part" to such "Subsidiary." We may condition our consent
by requiring payment of an additional premium; but
b. For the first 90 days after the effective date of such acquisition or formation, the coverage
provided by this "Coverage Part" shall apply to such "Subsidiary", provided that all "Occurrences"
causing or contributing to a loss involving such acquisition or formation, must take place after the
effective date of such acquisition or formation.
c.
1) The assets of the acquired or formed "Subsidiary" do not exceed 25% of the total assets of
the "Insured" as reflected in the "Insured's" most recent fiscal year-end financial statement or
2) The acquisition or formation occurs less than 90 days prior to the end of the "Policy Period".
Acquire
or
Form
the
4.
Cancellation and Non-Renewal

a.
The "Named Insured" shown in the Declarations may cancel this

delivering to us advance written notice of cancellation.
b.
We may cancel this "Coverage Part"

notice of cancellation at least:
1)
2)
c.
by mailing
or
delivering
"Coverage Part" by mailing
or
to the "Named Insured" written
20
days before the effective date of cancellation
if
we
cancel for
non-payment of premium;
60
if
we
cancel for any other
or
reason.
not required to renew this "Coverage Part", However, written notice of our intent to nonthis "Coverage Part" shall be sent to the "Named Insured" at least 60 days prior to
expiration of the "Policy Period".
We
are
renew
d.
5.
We will mail or deliver our notice to the "Named Insured's" last mailing address known to us.
Notice of cancellation or nonrenewal will state the effective date of cancellation or nonrenewal
and the "Policy Period" will end on that date. If this "Coverage Part" is cancelled, we will send the
"Named Insured" any premium refund due. If we cancel, the refund will be pro rata. If the "Named
Insured" cancels, the refund may be less than pro rata. The cancellation will be effective even if
we have not made or offered a refund. If notice is mailed, proof of mailing will be sufficient proof
of notice.
Concealment, Misrepresentation
or
Fraud
This "Coverage Part" is void in any case of fraud by you as it relates to this "Coverage Part" at any
time. It is also void if you or any other Insured, at any time, intentionally conceal or misrepresent a
material fact concerning:
Page
908-0001 08 09
12 of 17
6.
a.
This
"Coverage Part";
"Property"
covered under this
b.
The
c.
Your interest in the
d.
A claim under this
"Property"
"Coverage Part";
"Coverage Part";
covered under this
Page
49 of 94
or
"Coverage Part".
Cooperation
You must cooperate with
conditions.
7.
Filed 04/15/16
Document 1-2
us
in all matters
pertaining
to this
"Coverage Part"
as
stated in its terms and
"Employee Benefit Plans"

a.
If any "Employee Benefit Plan" is insured jointly with any other "Employee Benefit Plan" under this
"Coverage Part", you or the Plan Administrator must select a Limit of Liability for Insuring
Agreement l.B. of this "Coverage Part" that is sufficient to provide a Limit of Liability for each
"Employee Benefit Plan" that is at least equal to that required by ERISA if each "Employee
Benefit Plan" were separately insured. Then, if at the time a loss is discovered the Limit of
Liability is not equal to or greater than that required by ERISA, we agree to automatically increase
the Limit of Liability to equal the amount required under ERISA.
b.
If the "Named Insured" is an entity other than an "Employee Benefit Plan", any payment we make
for loss sustained by any "Employee Benefit Plan" will be made to the "Employee Benefit Plan"
sustaining the loss.
c.
If two or more
make for loss:
1)
Sustained

by
two or
more
"Employee
are
insured under this
Benefit Plans";
"Coverage Part", any payment
we
or
2) Of commingled "Property" of two or more "Employee Benefit Plans",

resulting directly from an "Occurrence" will be made to each "Employee Benefit Plan" sustaining
loss in the proportion that the Limit of Liability required for each "Employee Benefit Plan" bears to
the total Limit of
8.
Liability of all "Employee Benefit
Plans"
sustaining loss.
Liberalization
If we adopt any revision that would broaden the coverage under this "Coverage Part" without
additional premium within 45 days prior to or during the "Policy Period" shown in the Declarations,
the broadened coverage will apply to this "Coverage Part" as of the date the revision is approved for
general use by the applicable department of insurance.
9.
Other Insurance
If other valid and collectible insurance is available to you for loss covered under this
obligations are limited as follows:
"Coverage Part",
our
a.
Primary Insurance
When this
"Coverage
Part" is written
as
primary insurance, and:
1)
You have other insurance subject to the same terms and conditions as this "Coverage Part",
we will pay our share of the covered loss. Our share is the proportion that the applicable Limit
of Liability shown in the Declarations bears to the total limit of all insurance covering the
same loss.
2)
You have other insurance covering the same loss other than that described in
above, we will only pay for the amount of loss that exceeds:
a)
The Limit of Liability and Retention Amount of that other insurance, whether you
collect on it or not; or
b)
The Retention Amount shown in the
subject
to the terms and conditions of this
Excess Insurance
Page
908-0001 08 09
can
Declarations,
whichever is greater. Our payment for loss is

"Coverage Part".
b.
Paragraph a.1)
13 of 17
Document 1-2
10.
Filed 04/15/16
50 of 94
"Coverage Part" is written excess over other insurance, we will only pay for the
amount of loss that exceeds the Limit of Liability and Retention Amount of that other
insurance, whether you can collect on it or not. Our payment for loss is subject to the terms
and conditions of this "Coverage Part".
1)
When this
2)
However, if loss covered under this "Coverage Part" is subject to a Retention Amount, we will
reduce the Retention Amount shown in the Declarations, by the sum total of all such other
insurance plus any Retention Amount applicable to that other insurance.
Ownership of "Property"; Interests Covered

a.
"Property" covered under this "Coverage Part" except

"Property":
The
1)
2)
That you
b.
c.
own or
lease;
in 10.b, below is limited to
"Banking Premises"; or
While in transit and in the care and custody of a "Messenger; or
3) For which you are legally liable, except for "Property" located inside your "Client's Premises."
If Item 2. of the Declarations indicates that coverage under Insuring Agreement I.C. has been
purchased, then the "Property" covered under Insuring Agreement I.C. is limited to "Property":
On your "Premises"
or
your
leases;
1)
That your "Client"
2)
That your "Client" holds for others;
owns or
3)
For which your "Client" is
4)
While the
"Property"
legally
or
liable
is inside your "Client's Premises".
However, this "Coverage Part" is for your benefit only. It provides
Policy Bridge
b.
provided
or
other person or organization, including your "Client".

"Coverage Part" must be presented by you.
a.
as
That you hold for others:
a)
b)
11.
Page
no
Any claim for loss
rights or benefits to any

that is covered under this
Discovery Replacing Loss Sustained
If this "Coverage Part" replaces a policy that provided you with an extended period of time after
cancellation in which to discover loss and which did not terminate at the time this "Coverage Part"
became effective:
1)
We will not pay for any loss that occurred during the "Policy Period" of that prior policy which
is "Discovered" by you during the extended period to "Discover" loss, unless the amount of
loss exceeds the limit of liability and retention amount of that prior policy. In that case, we will
pay for the excess loss subject to the terms and conditions of this "Coverage Part".
2)
However, any payment we make for the excess loss will not be greater than the difference
between the limit of liability and retention amount of that prior policy and the Limit of Liability
shown in the Declarations. We will not apply the Retention Amount shown in the
Declarations to this excess loss.
SECTION VII
this Condition.
ADDITIONAL
CONDITIONS, Paragraph A.9. Other Insurance does not apply
to
12. Records
You must keep records of all
amount of any loss.
"Property"
covered under this
"Coverage Part"
so we
can
verify
the
13. Recoveries
a.
Any recoveries, whether effected before or after any payment under this "Coverage Part",
by us or you, shall be applied net of the expense of such recovery:
whether made
1)
First, to you in satisfaction of your covered loss in
excess
of the amount
paid
under this
"Coverage Part";
2) Second, to us in satisfaction of amounts paid in settlement of your claim;

3) Third, to you in satisfaction of any Retention Amount; and
4) Fourth, to you in satisfaction of any loss not covered under this "Coverage
Part".
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Document 1-2
b.
14.
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Recoveries do not include any recovery:
1) From insurance, suretyship, reinsurance, security or indemnity taken for our benefit; or
2) Of original "Securities" after duplicates of them have been issued.
Territory
This "Coverage Part" covers loss that you sustain resulting directly from an "Occurrence" taking place
within the United States of America (including its territories and possessions), Puerto Rico and
Canada.
15. Valuation and Settlement

a.
The value of any loss for purposes of coverage under this

follows:
1)
"Coverage Part" shall be determined
as
Loss of "Money" but only up to and including its face value. We will, at your option, pay for
loss of "Money" issued by any country other than the United States of America:
a)
b)
At face value in the
"Money"
issued
by that country;
or
In the United States of America dollar equivalent determined by the rate of

in The Wall Street Journal on the day the loss was "Discovered".
exchange
published
2)
Loss of "Securities" but only up to and including their value at the close of business
was "Discovered". We may, at our option:
on
the
day the loss
a)
Pay the market value of such "Securities" or replace them in kind, in which event you
must assign to us all your rights, title and interest in and to those "Securities"; or
the cost of any Lost Securities Bond required in connection with issuing duplicates of
the "Securities". However, we will be liable only for the payment of so much of the cost of
the bond as would be charged for a bond having a penalty not exceeding the lesser of
the:
b) Pay
(1) Market value of the "Securities"

"Discovered";
(2) The Limit of Liability applicable
3)
at the close of business
on
the
day
the loss
was
or
to the "Securities".
Loss of or damage to "Other Property" or loss from damage to the "Premises" or its exterior
for the replacement cost of the "Other Property" without deduction for depreciation. However,
we will not pay more than the least of the following:
replace the lost or damaged "Other Property" with property of comparable

quality and used for the same purpose;
b) The amount you actually spend that is necessary to repair or replace the lost or damaged
"Other Property"; or
The
Limit of Liability applicable to the lost or damaged "Other Property".
c)
With regard to Paragraph A.15.a.3)a) through Paragraph A.15.a.3)c), we will not pay on a
replacement cost basis for any loss or damage:
(1) Until the lost or damaged "Other Property" is actually repaired or replaced; and
(2) Unless the repairs or replacement are made as soon as reasonably possible after the
loss or damage.
If the lost or damaged "Other Property" is not repaired or replaced, we will pay on an actual
a)
The cost to
material and
cash value basis.

b.
We will, at your
1)
2)
c.
option,
settle loss
"Money" of the country
or
damage
to "Other
Property"
or
"Premises"
or
its exterior:
damage occurred; or
In the United States of America dollar equivalent of the "Money" of the country in which the
loss or damage occurred determined by the rate of exchange published in The Wall Street
Journal on the day the loss was "Discovered".
In the
Any "Property" that
16. Non-Accumulation of
we
pay for
or
in which the loss
replace becomes
or
our
"Property".
Liability
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When there is more than one "Insured", our maximum liability for loss sustained by one or all
"Insureds" shall not exceed the amount for which we would be liable if all losses were sustained by
any one "Insured".
a.
the number of years this "Coverage Part" remains in effect and the total premium
paid, the amount we shall pay for any loss shall not be cumulative from year to
from "Policy Period" to "Policy Period".
Regardless of
b.
amounts due
or
year
B.
Conditions
1.
Applicable
Termination
This
a.
or
as
Insuring Agreements I.A.,
to
to any
as
to any
"Employee":
soon as:
You;
1)
or
"Executives" not in collusion with the
partners, "Members", "Managers",

2) Any
"Employee",
or
learn of "Theft" or any other dishonest act committed

of $1, 000.00 whether before or after becoming
by the "Employee" involving

employed by you.
of your
an
amount in
notice mailed to the "Insured". That date will be at least 30
days after
excess
b.
"Coverage Part":
"Employee"
Insuring Agreement terminates
As
I.B and I.0 of this
On the date specified in

the date of mailing.
We will mail
or
deliver
our
notice to the "Insured's" last
mailing address
known to
us.
If notice is
mailed, proof of mailing will be sufficient proof of notice.

2.
Territory
We will pay for loss caused by any "Employee" while temporarily outside the
Paragraph A.13. for a period of not more than 90 consecutive days.
C.
Conditions
1.
Applicable
to
Insuring Agreements
"Coverage
in
Part":
Retention Amount
The Retention Amount does not
"Coverage Part".
2.
I.D. and I.L.1. of this
territory specified
apply
to
legal expenses paid under Insuring Agreement I.D. of this
Electronic and Mechanical
Signatures
signature that is a mechanical or electronic reproduction of a handwritten signature produced by a
mechanical check-writing machine or a computer printer shall be treated the same as a handwritten
signature. An "Electronic Signature" is not treated the same as a mechanical or electronic
reproduction of a handwritten signature and is not a "Forgery".
3.
Proof of loss
You must include with your proof of loss any instrument involved in that loss, or, if that is not
an affidavit setting forth the amount and cause of loss.
4.
possible,
Territory
We will cover loss that you sustain resulting directly from an "Occurrence" taking place anywhere in
ADDITIONAL CONDITIONS, Paragraph A.14 does not apply to Insuring
the world. SECTION VII
Agreement I.D. and I.L.1. of this "Coverage Part".
D.
Conditions
1.
Applicable
to
Insuring Agreements
Armored Motor Vehicle
"Coverage Part":
Companies
Under Insuring Agreement I.G. of this

cannot recover:
2.
I.F. and I.G. of this
"Coverage Part";
we
will
only
pay for the amount of loss you
a.
Under your contract with the armored motor vehicle company; and
b.
From any insurance

vehicle company.
Special
We will
or
indemnity
Limit of Insurance for
only
pay up to
carried
by,
or
for the benefit of customers of, the armored motor
Specified "Property"
$5, 000 for any
one
"Occurrence" of loss of
or
damage
to:
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a.
Document 1-2
Filed 04/15/16
Page
53 of 94
Precious metals, precious or semi-precious stones, pearls, furs, or completed or partially

articles made of or containing such materials that constitute the principal value of such
completed
articles;
b.
E.
Manuscripts, drawings, or records of any kind,

any information contained in them.
Conditions
1.
or
Applicable
Special
to
Insuring Agreement
I.H. of this
or
the cost of
reconstructing them
reproducing
"Coverage Part":
only pay up to $5, 000 for any one "Occurrence" of loss of or damage
drawings, or records of any kind, or the cost of reconstructing them or reproducing
We will
or
to
manuscripts,
any information
contained in them.
2.
Territory
ADDITIONAL CONDITIONS, Paragraph A.14. does not apply to Insuring
Agreement I.H. of this "Coverage Part".
VIII.
Identity Fraud Reimbursement Single loss Limit of Liability

The maximum Limit of Liability for each "Identity Fraud" covered under Insuring Agreement I.L.2. shall not
exceed the applicable Limit of Liability stated in the Declarations. All acts incidental to an "Identity Fraud",
any series of "Identity Frauds", and all "Identity Frauds" arising from the same method of operation, whether
committed by one or more persons, shall be deemed to arise out of one act and shall be treated as one
"Identity Fraud." If an act causes a covered loss under Insuring Agreement I.L.2., to more than one
"Executive", the applicable Limit of Liability and Retention under Insuring Agreement I.L.2. shall apply to
each "Executive" separately.
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Page
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KIDNAP/RANSOM AND EXTORTION INSURANCE COVERAGE PART

determine rights, duties, coverage and coverage restrictions.
to
ADDITIONAL DEFINITIONS of this "Coverage Parr. The words "we", "us" and "our"
Throughout
ADDITIONAL
You and every "Insured Individual" must make every reasonable effort not to
"Coverage Part".
I.
divulge the existence
of this
INSURING AGREEMENTS
Coverage is provided under the following Insuring Agreements for which a Limit of Liability is shown in the
of time provided in SECTION ll
included in the Limit of Liability, such Insuring Agreement and any reference thereto in this "Coverage Part"
are
A.
Kidnap/Ransom
1.
or
of
alleged "Kidnap"
an
a.
To do
b.
To do
c.
To introduce
bodily
harm to
damage
virus
or
payment directly caused by the
ransom
as an
payment directly caused by
extortion
"Property";
other malicious instruction into your computer system designed to

corrupt data or computer programs stored within your computer system;
or
d.
To contaminate,
e.
To disseminate, divulge or utilize proprietary information including formulas, patents, data,

processes or other confidential information unique to your business, provided you make a
constant and conscious effort not to disclose the existence of such information to any third party.
pollute
or
products
or
goods;
by
"Kidnap", alleged "Kidnap"
However, the fees and costs of the Security Firm shown in the Declarations
to the Limit of
Liability applicable
Hijack Coverage
you for "Expenses"
are
payable by
us
or
in addition
to this INSURING AGREEMENT.
Detention and
We will pay
"Insured Individual".
incurred
by you directly caused by
the "Detention"
to the Limit of Liability applicable to this INSURING AGREEMENT.
D.
or
Expenses Coverage
We will pay you for "Expenses" incurred by you directly caused
extortion threat covered under INSURING AGREEMENT A.
C.
an
"Insured Individual";
an
to "Premises" or
a
as a
We will pay you for loss of "Property" surrendered

extortion threat communicated to you:
damage, destroy
B.
Coverage
"Property" surrendered
"Kidnap"
2.
and Extortion Threat
In-Transit
are
or
"Hijack" of
payable by
us
in addition
Coverage
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an
1 of 8
Page
55 of 94
"Property" while
theft, disappearance, confiscation
or
in the care and custody of a "Messenger" directly caused

destruction while being delivered to individuals demanding the
payment of such "Property" arising out of

INSURING AGREEMENT A.
II.
Filed 04/15/16
Document 1-2
or
by
extortion threat covered under

We will pay you for loss that you sustain through acts committed or events occurring prior to the effective date
of termination or cancellation of this "Coverage Part" which is reported to us no later than 90 days from the
date of that termination or cancellation.
III.
"Coverage Part":
A.
"Detention"
1.
Acting
as an
2.
Acting
or
for any
B.
means
1.
2.
Any
holding under duress of
agent of
purporting
reason
"Employee"
the
or
to act
other than
approval of any government
behalf of any
on
by anyone:
insurgent party, entity
or
or
government entity;
or
group,
"Kidnap".
means:
natural individual:
a.
While in your service;
b.
Who you
c.
Who you have the
compensate directly by salary, wages
right
or
to direct and control while
commissions; and
performing
services for you;
Any natural individual who is furnished temporarily to you:

a.
To substitute for a permanent "Employee" as defined in Paragraph B.1., who is
b.
To meet seasonal
while that individual is
or
on
leave;
or
short-term work load conditions,
subject
to your direction and control and
performing
services for you;
3.
Any natural individual who is leased to you under a written agreement between you and
leasing firm, to perform duties related to the conduct of your business;
4.
Any natural individual who is

retained
5.
C.
with the tacit
an
as a
or
labor
trustee
consultant while
Any natural individual who is
"Expenses"
former "Employee", director, partner, "Member", "Manager",

performing services for you; or
a "Guest" student or intern pursuing studies or duties.
a
means:
1.
Fees and costs of the Security Firm shown in the Declarations hired to
release of
Individual";
2.
Fees and costs of
independent negotiators;
3.
Fees and costs of
independent public relations consultants and/or interpreters;
4.
The cost of hiring security guards to protect an "Insured Individual"

recommendation of the Security Firm shown in the Declarations;
5.
Travel costs and accommodations incurred
6.
Salary, commissions
compensation applies
negotiate
or
secure
the
an."Insured
by
you
or an
and other financial benefits
or
"Property" upon the
paid by you to an "Insured Individual". Such

"Kidnap", "Detention", or "Hijack" of the
at the level in effect on the date of the

"Insured Individual" and ends upon the earliest of:
7.
a.
Up
to 45
days after
their release if the "Insured Individual" has not
b.
Discovery of their death;
c.
120
d.
60 months after their abduction;
days after
an
following
abduction that
they
returned to work;
are
still alive;
or
and medical service fees and costs, including psychiatric care and cosmetic
"Insured Individual" within 24 months following their release;
Hospitalization
surgery of
the last credible evidence
yet
or
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Page
independent forensic analysts;
8.
Fees and costs of
9.
Interest costs for any loan from

extortion threat;
financial institution taken
to pay
by you
demand
ransom
10. Individual financial loss of an "Insured Individual" as a result of their inability to attend to their
individual financial matters due to their "Kidnap", "Detention" or "Hijack";
own
parties
11. Reward money paid by you to an "Informant" which leads to the arrest and conviction of
responsible for loss covered under this "Coverage Part"; and
Any other reasonable expenses incurred by you with our written consent.
"Expenses" does not include:
13. Any costs incurred by you to recall or destroy any of your products or goods as a result
threat to contaminate, pollute or render substandard such products or goods; and
or
12.
14. Loss of
D.
"Guest"
1.
2.
means
by
you
as a
result of
an
interruption
an
extortion
to your business.
any individual:
Visiting your "Premises" or the residence of an Insured Individual; or

Traveling with an Insured Individual in a motor vehicle, aircraft or water craft,
for business
E.
and any other costs incurred
earnings
of
"Hijack"
aircraft
or
social purposes.
the holding under duress of an "Insured Individual" while

water craft for any reason other than "Kidnap".
means
or
traveling
in
motor
vehicle,
F.
"Informant" means an individual, other than an "Insured Individual" providing information not otherwise
obtainable, solely in return for a reward offered by you.
G.
"Insured"
H.
means:
The "Insured
Entity"
and any "Insured Individual".
means:
1.
Any director, trustee, partner, "Member", "Manager", "Employee", proprietor (if the "Insured" is
proprietorship) of any "Insured", unless excluded via Endorsement;
2.
Any "Relative", "Guest"
resident in the household of
or
an
"Insured Individual" defined in
sole
Paragraph
H.1.; and
3.
Any "Messenger".
I.
"Kidnap" means the involuntary abduction by force or otherwise of an "Insured

of demanding money or other consideration in exchange for their release.
J.
"Manager"
K.
"Member" means
also may serve as
L.
means an
"Messenger"
individual
an owner
a
of
capacity for a limited liability company.

limited liability company represented by its membership interest,
serving
a
in
Individual" for the purpose
directorial
who
"Manager".
means a
natural individual
designated by you
to have
care
and
custody of "Property" outside
the "Premises".
series of related acts
M.
"Occurrence"
N.
"Premises" means any building you occupy in

"Insured Individual" in Paragraph H.1.
0.
"Property"
means an
means
act
money,
or
event
or
or
events
involving
one or more
conducting your business and
monetary instruments, securities,
services
or
any other
individuals.
the residence of any
tangible property
that
has intrinsic value.

P.
"Relative" means a spouse, child, step-child, legally adopted child, foster child, spouse of a married child,
grandchild, brother, sister, parent, adoptive parent, step-parent, grandparent, brother-in-law, sister-in-law,
parent-in-law and grandparent-in-law.

Policy
Terms and

A.
For the purpose of all INSURING AGREEMENTS of this

1.
Acts Committed
by
You
or
Any
"Coverage Part",
this
"Policy" shall
not cover:
Page
909-0001 08 09
3 of 8
Loss
2.
"Expenses" resulting
a.
You;
b.
Any "Insured Individual".
from any dishonest, fraudulent
or
3.
by:
or
or
"Property"
from the surrender of
"Property":
a.
Inside the "Premises" unless first brought inside the "Premises" after
extortion demand for the purpose of paying such demand; or
b.
Outside the "Premises" as

such "Property" other than
result of
threat to do
bodily harm
to
an
receipt of the
individual in
ransom
or
possession of
"Messenger".
Purpose of INSURING AGREEMENT C. of this "Coverage Part";

Political or Military Activity
"Expenses" resulting from an "Insured Individual" taking part

of any security or military force.
2.
57 of 94
criminal act committed
this
For the
1.
Page
Surrender of
Loss
B.
or
Filed 04/15/16
Document 1-2
in any
"Policy"
shall not
political activity
or
cover:
the
operations
Travel Documents
"Expenses" resulting from the failure of you or an "Insured Individual" to properly procure or maintain
required travel documents including passports, visas, permits and other similar documentation.
Violation of Laws of Foreign Countries
"Expenses" resulting from "Detention" due to any actual or alleged violation of the laws of a foreign
country by you or an "Insured Individual", unless the "Detention" results from allegations that are
deliberately false, fraudulent or malicious and made solely to achieve political, propaganda and/or
coercive effect upon
or
at the expense of you
or an
V. LIMIT OF LIABILITY AND RETENTION

A.
Limit of
Liability
The most we will pay for loss or "Expenses" in any

B.
one
"Occurrence" is the
applicable
Limit of
Liability
as
Retention
We will not pay for loss in any one "Occurrence" unless the amount of loss exceeds the Retention
Amount shown in Item 2. of the Declarations. We will then pay the amount of loss in excess of the
Retention Amount, up to the Limit of Liability shown in Item 2. of the Declarations. In the event more than
one Retention Amount could apply to the same loss, only the highest Retention Amount may be applied.
C.
apply
to any
"Expenses" paid under INSURING AGREEMENTS
B. and
VI. DUTIES IN THE EVENT OF AN OCCURRENCE

In the event of
an
"Occurrence" which may result in
A.
Determine that the
B.
In
1.
"Kidnap",
or
loss covered under this
extortion threat, "Detention"
or
"Hijack"
has
"Coverage Part",
actually
you must:
occurred.
extortion threat, make every reasonable effort to:
"Kidnap"
Immediately notify the Security Firm
regard
to
shown in the Declarations, if any; and
Notify an associate and local law enforcement authorities;

surrendering any "Property" in payment of a ransom demand or extortion threat.
Approve any payment involving a ransom demand or extortion threat.
Notify us as soon as practicable.
Submit to examination under oath at our request and give us a signed statement of your
Give us a detailed, sworn proof of loss within 120 days.
Cooperate with us in the investigation and settlement of any claim.
2.
before
C.
D.
E.
F.
G.
answers.

Terms and Conditions, the following Conditions apply to this "Coverage Part".
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Wherever used in the Conditions, the word loss shall also be deemed to
A.
mean
Page
58 of 94
"Expenses".
Fraud
or
This "Coverage Part" is void in any case of fraud by you as it relates to this
void if you or any other "Insured", at any time, intentionally conceal or
"Policy" at any time. It is also

misrepresent a material fact
concerning:
1. This "Coverage Part";
2.
3.
The
"Property" covered under
this
"Coverage Part";
"Coverage Part";
"Property"
5. A claim under this "Coverage Part".
Additional "Premises" or "Employees"
4.
B.
An "Individual Insured" under this
Your interest in the
covered under this
"Coverage Part";
or
If, during the "Policy Period", you establish any additional "Premises" or hire additional "Employees", other
through consolidation or merger with, or purchase or acquisition of assets or liabilities of, another
than
such "Premises" and "Employees" shall automatically be covered under this "Coverage Part".
Notice to us of an increase in the number of "Premises" or "Employees" need not be given and no
additional premium need be paid for the remainder of the "Policy Period" shown in the Declarations.
entity,
C.
or
Acquisition
through consolidation or merger with, or purchase or acquisition of assets or liabilities of, some other
entity, any additional individuals become "Insured Individuals" or you acquire the use and control of any
additional "Premises":
If
D.
1.
You must give us written notice and obtain our written consent to extend this "Coverage Part" to such
additional "Insured Individuals" or "Premises". We may condition our consent upon payment of an
additional premium; but
2.
For the first 90 days after the effective date of such consolidation, merger, or purchase or acquisition
of assets or liabilities, any insurance afforded for "Insured Individuals" or "Premises" also applies to
these additional "Insured Individuals" or "Premises" for acts committed or events occurring within this
90 day period.
3.
a.
The assets of the merged, purchased, or acquired entity do not exceed 25% of the total assets of
b.
The merger,
Period."
Acquire
or
Form
purchase
or
acquisition
less than 90
days prior
to the end of the
"Policy
"Subsidiary"
If, during the "Policy Period" you acquire
E.
occurs
or
form
"Subsidiary":
written notice as soon as possible and obtain our written consent to extend the
give
coverage provided by this "Coverage Part" to such "Subsidiary." We may condition our consent by
requiring payment of an additional premium; but
1.
You must
2.
For the first 90 days after the effective date of such acquisition or formation, the coverage provided by
this "Coverage Part" shall apply to such "Subsidiary", provided that all "Occurrences" causing or
contributing to a loss involving such acquisition or formation, must take place after the effective date
of such acquisition or formation.
3.
Due
us
a.
The assets of the acquired or formed "Subsidiary" do not exceed 25% of the total assets of the
"Insured" as reflected in the "Insured's" most recent fiscal year-end financial statement; or
b.
The
acquisition
or
formation
occurs
less than 90
days prior to the end
of the
"Policy Period".
Diligence
You and every "Insured Individual" must exercise due diligence in

to avoid or diminish any loss covered under this "Coverage Part".
doing all things reasonably practicable

Page
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F.
Investigation
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and Settlement of Claim
We may make any investigation that we deem necessary and may, with your written consent, settle any
claim that we deem expedient. If you do not consent to such settlement, the most we will pay for all loss
on account of such claim is limited to the amount for which the claim could have been settled as of the
date we proposed such settlement.
G.
Liberalization
If we adopt any revision that would broaden the coverage under this "Coverage Part" without additional
premium within 45 days prior to or during the "Policy Period" shown in the Declarations, the broadened
coverage will apply to this "Coverage Part" as of the date the revision is approved for general use by the
applicable department of insurance.
H.
Loss Covered Under More Than One

If two
lesser of:
or more
The actual amount of loss;
2.
The
Reported
1.
During the "Policy Period";
2.
During the period of time provided

"Coverage Part".
However,
"Coverage
J.
2.
we
will pay the
events
occurring during the "Policy
Period"
or
in SECTION ll
EXTENDED REPORTING PERIOD of this
will not pay for any loss resulting from "Kidnap",

which is part of a series of related acts that
Part".
"Hijack"
Non-Accumulation of
1.
or
we
or
loss,
to those coverages.
We will pay for loss that you sustain through acts committed
shown in the Declarations and reported to us:
"Detention"
to the same
or
of the Limits of
Loss Sustained and
of this
"Coverage Part".
of this "Coverage Part" apply
INSURING AGREEMENTS
1.
sum
Coverage
alleged "Kidnap",
began prior to the
an extortion threat,
effective date of this
Liability
any one "Insured".
Regardless of the number of years this "Coverage Part" remains in effect and the total premium
or paid, the amount we shall pay for any loss shall not be cumulative from year to year
or from "Policy Period" to "Policy Period".
amounts due
K.
Other Insurance
This "Coverage Part" does not apply to loss recoverable or recovered under other insurance or indemnity.
If the limit of the other insurance or indemnity is insufficient to cover the entire amount of the loss, this
"Coverage Part" will apply to that part of the loss, other than that falling within any Retention Amount, not
recoverable or recovered under the other insurance or indemnity.
However, this "Coverage Part" will not apply to the amount of loss that is
Liability
L.
more
than the
applicable
Limit of
shown in Item 2. of the Declarations.

The
"Property" covered under this "Coverage
1.
That you
2.
That you hold for others;
3.
For which you
own or
Part" is limited to
"Property":
lease;
are
or
legally liable.
However this "Coverage Part" is for your benefit only. It provides no rights or benefits to any other
individual or entity. Any claim for loss that is covered under this "Coverage Part" must be presented by
you.
M.
Records
Page
909-0001 08 09
6 of 8

of any loss.
N.
"Property" covered under
Filed 04/15/16
this
"Coverage Part"
Page
60 of 94
so we can
verify the
amount
Recoveries
1.
2.
Any recoveries,
"Coverage Part"
less the cost of obtaining them, made after settlement of loss covered
will be distributed as follows:
a.
To you, until you are reimbursed for any loss that you sustain that exceeds the Limit of
and the Retention Amount, if any;
b.
Then to us, until
c.
Then to you, until you

any.
we are
by
this
Liability
reimbursed for the settlement made; and
are
reimbursed for that
part of the loss equal
to the Retention Amount, if

From insurance,
suretyship, reinsurance, security or indemnity taken for our benefit; or

b. Of original securities after duplicates of them have been issued.
Territory
This "Coverage Part" covers acts committed or events occurring anywhere in the world, subject to the
following:
1. This "Coverage Part" does not apply to any "Insured Individual" traveling to or presently in any foreign
country where a Travel Warning issued by the U. S. State Department is in effect at the time this
"Policy" becomes effective, unless such foreign country is attached via Endorsement as being
included as part of the coverage territory of this "Coverage Part".
2. This "Coverage Part" applies only to "Premises" or "Property" located within the United States of
America (including its territories and possessions), Puerto Rico, Canada and other foreign countries
a.
0.
Document 1-2
attached via Endorsement.

3.
P.
If, during the "Policy Period", the U.S. State Department issues a Travel Warning for a foreign
country, this "Coverage Part" does not apply to any "Insured Individual" traveling to or presently in
that country beginning 24 hours after the Travel Warning is issued and continuing for the duration of
the Warning, unless you obtain our written consent to continue the coverage provided by this
"Coverage Part".
Transfer of Your
Rights
of
Recovery against Others
to Us
You must transfer to us all your rights of recovery against any individual or entity for any loss you
sustained and for which we have paid or settled. You must also do everything necessary to secure those
rights and do nothing after loss to impair them.
Q. Valuation
1.
Settlement
Subject to SECTION
a.
V.A. Limit of
Liability, we
and including
will pay for:
Loss of money but only up to

its face value. We may, at
money issued by any country other than the United States of America:
1) At face
2)
value in the money issued
by that country;
our
option, pay for
loss of
or

in The Wall Street Journal on the day it was surrendered.
exchange
published
b.
Loss of securities but only up to their market value at the close of business
surrendered. We may, at our option:
the
day they were
1)
Pay the value of such securities or replace them in kind, in which event you must
all your rights, title and interest in and to those securities; or
2)
Pay the cost of any Lost Securities Bond required in connection with issuing duplicates of the
securities. However, we will be liable only for the payment of so much of the cost of the bond
as would be charged for a bond having a penalty not exceeding the lesser of the:
a)
Value of the securities at the close of business
loss;
b)
909-0001 08 09
on
on
the
day you first became
assign
to
us
aware
of the
Page
7 of 8
or
Limit of
Liability.
c.
Loss of
1)
Its
aware
2)
Page
61 of 94
"Property" other than money and securities for not more than:
replacement cost value without deduction for depreciation on the day you first became
or
damage
Filed 04/15/16
Document 1-2
to
of the loss;
The Limit of
or
Liability,
whichever is less.
2.
R.
option, pay for loss of or damage to "Property" other

money of the country in which the loss occurred; or
We may, at
our
than money and securities:
a.
In the
b.
In the United States of America dollar equivalent of the money of the country in which the loss or
damage occurred determined by the rate of exchange published in The Wall Street Journal at the
time it was surrendered or damaged.
c.
Any "Property" that
we
pay for
or
replace becomes
our
"Property".

1.

2.

cancellation at least:
by mailing
or
delivering
to the "Named Insured" written notice of
a.
20
days before the effective date of cancellation if we cancel for non-payment of premium;
b.
60
not required to renew

"Coverage Part" shall be
"Policy Period".
3.
We
this
4.
We will mail
are
if
we
or
or
reason.
this "Coverage Part". However, written notice of our intent to nonrenew

sent to the "Named Insured" at least 60 days prior to expiration of the
or deliver our notice to the "Named Insured's" last mailing address known to us. Notice of
cancellation or nonrenewal will state the effective date of cancellation or nonrenewal and the "Policy
Period" will end on that date. If this "Coverage Part" is cancelled, we will send the "Named Insured"
any premium refund due. If we cancel, the refund will be pro rata. If the "Named Insured" cancels, the
refund may be less than pro rata. The cancellation will be effective even if we have not made or
offered a refund. If notice is mailed, proof of mailing will be sufficient proof of notice.
Page 8 of 8
909-0001 08 09
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Filed 04/15/16
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THIS ENDORSEMENT IS ATTACHED TO AND MADE PART OF YOUR POLICY IN

RESPONSE TO THE DISCLOSURE REQUIREMENTS OF THE TERRORISM RISK
INSURANCE ACT, AS AMENDED. THIS ENDORSEMENT DOES NOT GRANT ANY
COVERAGE OR CHANGE THE TERMS AND CONDITIONS OF ANY COVERAGE
UNDER THIS POLICY.
Policy Number: LHF 8827059 02

NOTICE OFFER OF TERRORISM COVERAGE
NOTICE DISCLOSURE OF PREMIUM
ACCEPTANCE OF COVERAGE
for "acts of terrorism, as defined in Section 102(1) of the Terrorism Risk Insurance Act ("Act") is
included in your policy. You are hereby notified that under the Act, as amended in 2007, the definition of act
of terrorism has changed. The term "act of terrorism" means any act that is certified by the Secretary of the
Treasuryin concurrence with the Secretary of State, and the Attorney General of the United Statesto be
an act of terrorism; to be a violent act or an act that is dangerous to human life, property, or infrastructure; to
have resulted in damage within the United States, or outside the United States in the case of certain air
carriers or vessels or the premises of a United States mission; and to have been committed by an individual
or individuals as part of an effort to coerce the civilian population of the United States or to influence the
policy or affect the conduct of the United States Government by coercion.
Coverage
DISCLOSURE OF FEDERAL PARTICIPATION IN PAYMENT OF TERRORISM LOSSES

Under your coverage, any losses resulting from certified acts of terrorism may be partially reimbursed by the
United States Government under a formula established by the Act, as amended. Your policy, however, may
contain other exclusions which might affect your coverage, such as an exclusion for nuclear events. Under
the formula, the United States Government generally reimburses 85% of covered terrorism losses exceeding
the statutorily established deductible paid by the insurance company providing the coverage.
DISCLOSURE OF
$100 BILLION CAP
The Terrorism Risk Insurance Act, as amended, contains a $100 billion cap that limits U.S. Government
reimbursement as well as insurers' liability for losses resulting from certified acts of terrorism when the
amount of such losses exceeds $100 billion in any one calendar year. If the aggregate insured losses for all
insurers exceed $100 billion, your coverage may be reduced.
Premium for terrorism, if any, is stated below:
DISCLOSURE OF PREMIUM
Total Terrorism Premium
Fire
Following
Premium
Other than Fire Following Premium
401-1127
(01/08)
0
0
0
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Document 1-2
TERRORISM COVERAGE EXPLANATION
Page
63 of 94
POLICY HOLDER NOTICE
The Terrorism Risk Insurance Act of 2002 established a program (Terrorism Risk Insurance Program) within the
Department of the Treasury, under which the federal government shares, with the insurance industry, the risk of
loss from future terrorist attacks. That Program was extended by the federal government under the Terrorism
Risk Insurance Program Reauthorization Act of 2007 and will not expire until December 31, 2014. Your policy
will become effective (or will be renewed) with the coverage provided under the new act and you have elected to
purchase terrorism coverage. This Notice is being provided to you for the purpose of summarizing your coverage.
The summary is a brief synopsis of significant exclusionary provisions and limitations.
This Notice does not form a part of your insurance contract. The Notice is designed to alert you to coverage
restrictions and to other provisions in certain terrorism endorsement(s) in this policy. If there is any conflict
between this Notice and the policy (including its endorsements), the provisions of the policy (including its
endorsements) apply.
Carefully read your policy, including the endorsements attached
to your
policy.
YOUR POLICY AT THE START OF YOUR NEW POLICY TERM:

422-0082
The coverage for certified acts of terrorism is subject to the statutory $100 billion cap on liability for
losses and subject to the nuclear hazard exclusion and all other underlying policy exclusions. Coverage for acts of
terrorism that are not certified (for example, acts which do not exceed the dollar threshold for federal certification
or acts which occur outside the jurisdictional boundary of the federal program) is not subject to the statutory cap.
The coverage for "certified acts of terrorism" is more fully defined in the endorsement. This coverage is subject to
a limit on our liability pursuant to the federal Terrorism Risk Act Program Reauthorization Act of 2007.
With respect to "certified acts of terrorism" and acts of terrorism that are not certified the policy exclusions
example, the nuclear hazard and war exclusions) and other policy provisions continue to apply.
(for
422-0083 The endorsement excludes "punitive damages" either directly or indirectly arising out of a certified act
of terrorism and for which you are awarded damages. Neither the federal government nor insurance company is
obligated to pay "punitive damages".
See the definition of terrorism for purposes of the terrorism exclusion.
401-1192 01 09
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64 of 94
CAP ON LOSSES FROM CERTIFIED ACTS OF TERRORISM

ENDORSEMENT
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
This endorsement modifies the
following:

If aggregate insured losses attributable to terrorist
acts certified under the federal Terrorism Risk
Insurance Act exceed $100 billion in a Program Year
(January 1 through December 31) and we have met
our insurer deductible
under the Terrorism Risk
Insurance Act, we shall not be liable for the payment
of any portion of the amount of such losses that
exceeds $100 billion, and in such case insured losses
up to that amount are subject to pro rata allocation in
accordance with procedures established by the
Secretary of the Treasury.
"Certified Act of Terrorism" means an act that is

certified by the Secretary of the Treasury, in
concurrence with the Secretary of State and the
Attorney General of the United States, to be an act of
terrorism pursuant to the federal Terrorism Risk
422-0082 01 09
Insurance Act. The criteria contained in the Terrorism

Risk Insurance Act for a "Certified Act of Terrorism"
include the following:
1. The act resulted in insured losses in excess of $5
million in the aggregate, attributable to all types of
insurance subject to the Terrorism Risk Insurance
Act; and
2. The act is a violent act or an act that is dangerous
to human life, property or infrastructure and is
committed by an individual or individuals as part of
an effort to coerce the civilian population of the
United States or to influence the policy or affect
the conduct of the United States Government by
coercion.
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EXCLUSION OF PUNITIVE DAMAGES RELATED TO A CERTIFIED ACT OF

TERRORISM ENDORSEMENT
following:
A.
The following is added to SECTION IV

EXCLUSIONS of the Common Policy Terms and
Conditions Section of this "Policy":
directly
or
indirectly,
Terrorism" that
B.
are
apply
out
awarded
of
as
to
damages arising,
of terrorism pursuant to the federal Terrorism Risk

Insurance Act. The criteria contained in the
Terrorism Risk Insurance Act for a "Certified Act of
Terrorism" include the following:
"Certified Act of
1.
The act resulted in insured losses in excess of

$5 million in the aggregate, attributable to all
types of insurance subject to the Terrorism
Risk Insurance Act; and
2.
violent act or an act that is

human
life, property or
infrastructure and is committed
by an
individual or individuals as part of an effort to
coerce the civilian population of the United
States or to influence the policy or affect the
conduct of the United States Government by
coercion.
punitive damages.
The following Definition is added to SECTION III

Attorney General of the United States, to be an act
422-0083 01 09
The act is
dangerous
to
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ARIZONA COMMON POLICY TERMS AND CONDITIONS SECTION

AMENDATORY ENDORSEMENT
following:

A.
B.
The following is added to SECTION VIII

GENERAL CONDITIONS, Paragraph A. Cancellation and Non
Renewal of the Common Policy Terms and Conditions Section of this "Policy":
5.
Notices of cancellation or nonrenewal shall be sent by certified mail to the "Named Insured" at the last
address known to us, along with a statement of the specific reasons for cancellation or nonrenewal.
Copies of notices will also be sent to your agent. Proof of mailing is sufficient proof of notice. If notice is
not mailed in the time required, we will extend the "Policy Period" to accommodate notice requirements
on a pro rata basis of the existing 'Policy".
6.
We will mail notice of premium increase, change in deductible or reduction in limits or substantial
reduction in coverage at least 60 days prior to the expiration of the "Policy". If we fail to provide 60 days
notice, coverage remains in effect until 60 days notice is given or until the effective date of replacement
coverage obtained by the "Named Insured", whichever occurs first. If you elect not to renew, any earned
premium for the period of extension shall be calculated pro rata at the lower of the current or previous
year's rate. If you accept the renewal, the premium increase, if any, and other changes are effective the
day following the prior "Policy's" expiration.
SECTION VIII
GENERAL CONDITIONS, Paragraph B.3. of Representations and Application of the
Common Policy Terms and Conditions Section of this "Policy" is replaced by the following:
3.
Misrepresentations, omissions, concealment of facts and incorrect

"Policy" unless:
statements shall
not
prevent
recovery under this

a.
Fraudulent;
or
b.
Material either to the acceptance of the risk,
c.
We in
or
to the hazard assumed
by
us; or
good faith would either have not issued this "Policy", or would not have issued a "Policy" in as
an
amount, or would not have provided coverage with respect to the hazard resulting in the
large
"Loss", if the true facts had been made known to us as required by the application for this "Policy" or
otherwise.
904-0048 08 09
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ADDITION TO SECTION V.
WAIVER OF RETENTION IF NO LIABILITY
following:

A.
The following is added to SECTION III

this "Policy":
1.
"No
a.
Liability" means with respect to

A final judgment of no liability
motion to dismiss
or a
A final judgment of
of appeals.
b.
no
Terms and Conditions of
against the "Insured(s)":
to the
Liability" apply
to
"Claim" made
against
an
"Insured" for which
LIMITS OF LIABILITY AND RETENTIONS of the Common
determination of "No
a.
There is
b.
The "Claim" is dismissed or stipulated dismissed without

consideration by any "Insured".
If there is
Liability";
Policy
prejudice
and without any
payment of any
"Claim", the "Insurer" shall reimburse the "Defense
"Claim" is dismissed or stipulated dismissed without

we shall reimburse the "Defense Expenses" paid
the date of the dismissal or stipulation so long as:
If
or
Liability" in
in such "Claim".
"Insured",
trial, in favor of all "Insureds", after the exhaustion
No Retention shall apply, even as to "Costs of Defense", to any "Claim" which is in the form of
civilaction for monetary relief, in which:
Expenses" paid by the "Insured"

2.
"Claim" made
liability obtained prior
The following is added to SECTION V

Terms and Conditions of this "Policy":
1.
Policy
obtained prior to the trial, in favor of all "Insureds", by reason of

motion for summary judgment, after the exhaustion of all appeals; or
In no event shall the term "No

settlement has occurred.
B.
prejudice and without any payment by any

by the "Insured" in such "Claim" 90 days after
a.
The "Claim" or any other "Claim" which

is not brought again within such 90-day
b.
The "Insured Entity" provides us with written documentation in a form satisfactory to us to repay us for
such reimbursement in the event the "Claim", or any other "Claim" which together with such "Claim"
would be deemed a single "Claim", is brought again after such 90-day period and before the
expiration of the statute of limitations for such "Claim".
904-0503 08 09
together with such "Claim" would be deemed

period; and
single
"Claim"
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ADDITION TO SECTION VIII.

NON-RESCINDABLE SIDE A ENDORSEMENT
following:

GENERAL CONDITIONS, Paragraph
Application of the Common Policy Terms and Conditions Section of this "Policy":
B.
Representations
and
Notwithstanding the foregoing, Insuring Agreement I.A. of the Directors, Officers and Corporate Liability
Coverage Part of this "Policy" shall not be void as to any individual(s) who did not know as of the
"Policy" inception date that such declarations and statements contained in the "Application(s)" were untrue,
inaccurate or incomplete.
Insurance
904-0812 08 09
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ADDITION TO SECTION III.

DOMESTIC PARTNER COVERAGE
following:
DIRECTORS, OFFICERS AND CORPORATE LIABILITY INSURANCE COVERAGE PART
following is added to SECTION III ADDITIONAL DEFINITIONS, Paragraph E. "Insured Individual" of the
Directors, Officers and Corporate Liability Insurance Coverage Part of this "Policy":
The
The lawful "Domestic Partner" of an "Insured Individual", but solely with respect to such "Domestic Partner's"
status as a "Domestic Partner" or such "Domestic Partner's" ownership interest in property that a claimant
seeks as recovery for an alleged "Wrongful Act", and not for any "Wrongful Acts" actually or allegedly
committed by the "Domestic Partner".
For the purposes of this endorsement, "Domestic Partner" means any natural individual qualifying as a
domestic partner under the provisions of any applicable federal, state or local law or under the provisions of
any formal program established by the "Named Insured".
905-0320 08 09
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ADDITION TO SECTION IV.

PRODUCTS AND SERVICES LIABILITY EXCLUSION
following:

ADDITIONAL EXCLUSIONS of the Directors, Officers and
SECTION IV
Coverage Part of this "Policy":
Corporate Liability
Insurance
This insurance does not apply to "Loss" on account of any "Claim" made against any "Insured" directly or
indirectly based upon, arising out of, resulting from or in consequence of, or in any way involving any actual or
alleged "Claim" alleging a "Wrongful Act" by reason of or in connection with the efficacy, performance, health
or safety standards and/or proprietary licensing rights for any services, products or technologies offered,
promised, delivered, produced, processed, packaged, sold, marketed, distributed, advertised and/or
developed by the "Insured Entity".
905-0434 08 09
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ADDITION TO SECTION I.
CRISIS MANAGEMENT SUPPLEMENTAL COVERAGE
following:

The
INSURING AGREEMENT of the Directors, Officers and

is added to SECTION I
Insurance Coverage Part of this "Policy":
following
Liability
Crisis
Corporate
Management Expense Coverage
We shall pay for "Crisis Management Emergency Response Expenses" incurred by the "Named Insured"
resulting from an "Incident" that causes a "Crisis" that occurs during the "Policy Period". The "Crisis
Management Emergency Responses Expenses" must occur during the "Policy Period" and be reported to us
no later than 6 months after the date the "Crisis" began. The most we will pay under this provision is $5 000
per "Policy Period". Any payment made by us under this endorsement shall not reduce the Limits of Liability
stated in Item 2. of the Declarations. Any payment made by us shall be excess over the Retention stated in
Item 3. of the Declarations.
For the purposes of the coverage
provided by this endorsement the following definitions apply:
a.
"Crisis" means the public announcement that an "Incident" occurred

or at an event sponsored by the "Named Insured".
b.
"Crisis
on
the "Named Insured's Premises"
Management Emergency Response Expenses" means expenses for services provided by

Management Firm". "Crisis Management Emergency Response Expenses" do not include:
Compensation, fees, benefits, overhead, charges

2) Any expenses that are covered or reimbursable
1)
or
expenses of any "Insured";
"Crisis
or
to the "Named Insured" under any other valid and
collectible insurance.
c.
"Crisis Management Firm" means any service provider hired by the "Named Insured" and approved
writing by us. Our consent will not be unreasonably withheld.
d.
"Incident"
1)
2)
e.
in
means:
An accident
or
The accidental
other event
resulting
in the death
or
"Serious
Bodily Injury"
to 3
or more
individuals;
or
discharge of pollutants.
Bodily Injury" means any injury to a person that creates a substantial risk of death, serious
permanent disfigurement, or protracted loss or impairment of the function of any bodily member or organ.
"Serious
905-0104 08 09
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MODIFICATION TO SECTION IV.

INSURED VERSUS INSURED CARVE-OUT
following:

The
and
following is added to: SECTION IV ADDITIONAL EXCLUSIONS, Paragraph

Corporate Liability Insurance Coverage Part of this "Policy":
F. of the Directors, Officers

1.
Any "Claim" by any "Employee" of the "Insured Entity" pursuant

protection statute or any regulation promulgated thereunder, or
2.
Any "Claim"
Examiner
3.
or
or
state whistleblower
in any bankruptcy proceeding by or against the "Insured Entity" thereof, brought by the
Trustee of the "Insured Entity", if any, or any assignee of such Examiner or Trustee, or
any of the "Insured Individuals" of the "Insured

for at least 4 years prior to such "Claim" being first made.
Any "Claim" by
905-0432 08 09
to any federal
Entity"
who has not served in that
capacity
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EMPLOYED LAWYERS COVERAGE
following:

A.

the Directors, Officers and Corporate
"Insured Individual" also
means
any
ADDITIONAL DEFINITIONS, Paragraph E. "Insured Individual" of

Liability Insurance Coverage Part of this "Policy":
"Employed Lawyer",
but
only with respect
continuously maintained, against both such "Employed Lawyer" and

who is not
B.
C.
an
one or more
to a "Claim" made, and

other "Insured Individual"
"Employed Lawyer".
ADDITIONAL DEFINITIONS of the Directors, Officers and

following is added to SECTION III
Insurance
Part
of this "Policy":
Coverage
Corporate Liability
"Employed Lawyer" means any "Employee" of the "Insured Entity" who is admitted to practice law and who
was, now is or shall be, at the time of the alleged "Wrongful Act", employed as a lawyer full time for, and
salaried by the "Insured Entity".
ADDITIONAL DEFINITIONS, Paragraph 0. "Wrongful Act" of the
"Wrongful Act" means any breach of duty, neglect, error, misstatement, misleading statement, omission or act
actually or allegedly committed or attempted by an "Employed Lawyer" in the rendering or failure to render
professional legal services; provided, however, that "Wrongful Act" shall not include any breach of duty,
neglect, error, misstatement, misleading statement, omission or act in connection with any conduct by such
"Employed Lawyer":
1. Which is not related to such "Employed Lawyer's" employment with the "Insured Entity";
The
2.
Which is not rendered
3.
Which is
performed by
on
behalf of the "Insured
such
Entity"
at the "Insured
Entity's" written request;
or
"Employed Lawyer" for others for a fee.
Solely with respect to the coverage provided by this endorsement, the "Insurer" shall not be liable to make
any payment for "Loss" in connection with a "Claim" made against any "Insured" directly or indirectly based
upon, arising out of, resulting from or in consequence of, or in any way involving any:
D.
a.
"Wrongful Act" occurring at the time when the

the "Insured Entity";
b.
"Wrongful Act"
Lawyer", as of
c.
Activities by
the "Insured
"Employed Lawyer"
was
not
employed
as a
lawyer for
which occurred on or before the effective date of this endorsement if the "Employed
such date, knew or reasonably could have foreseen that such "Wrongful Act" could
lead to a "Claim". No fact pertaining to or knowledge possessed by an "Employed Lawyer" shall be
imputed to any other "Employed Lawyer" for the purposes of applying this exclusion; or
"Employed Lawyer"
Entity".
an

as a
director, officer, trustee
or
governor of any
entity other then
Policy Terms and
For the purposes of coverage provided under this endorsement to an "Employed Lawyer", the "Insured Entity"
will be conclusively deemed to have indemnified the "Employed Lawyer" to the extent that the "Insured Entity"
is permitted or required to indemnify him or her pursuant to law, common or statutory, or contract, or the
charter or by-laws of the "Insured Entity", which are hereby deemed to adopt the broadest provisions of the
law which determines and defines such rights of indemnity. The "Insured Entity" hereby agrees to indemnify
the "Employed Lawyer" to the fullest extent permitted by law including the making in good faith of any required
application for court approval and the passing of any corporate resolution or the execution of any contract.
Coverage provided under this endorsement to an "Employed Lawyer" shall be specifically excess over any
valid or collectible Lawyers' Professional Liability Insurance, legal malpractice or errors and omissions
insurance and shall drop down and be primary insurance only in the event of exhaustion of such other
insurance due to "Losses" paid thereunder.
905-0319 08 09
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ILLEGAL ALIEN INVESTIGATIVE PROCEEDING WITH SUBLIMIT
following:
ADDITIONAL DEFINITIONS,
Practices Liability Insurance Coverage Part of this "Policy":
"Claim" also
Paragraph
A. "Claim" of the
Employment
means:
A criminal investigation of the "Insured Entity" by any governmental agency for allegedly hiring or harboring
illegal aliens. We will pay up to, but in no event greater than $10 000 for any such "Loss". Any "Loss" paid by
us under this endorsement shall be part of and not in addition to the Limits of Liability stated in Item 2. of the
Declarations.
906-0303 08 09
Page
1 of 1
Document 1-2
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Page
75 of 94

following:

ADDITIONAL DEFINITIONS, Paragraph I. "Wrongful Act", of the
Employment Practices Liability Insurance Coverage Part of this "Policy":
The lawful "Domestic Partner" of an "Insured", but solely with respect to such "Domestic Partner's" status as a
"Domestic Partner" or such "Domestic Partner's" ownership interest in property that a claimant seeks as
recovery for an alleged "Wrongful Act", and not for any "Wrongful Acts" actually or allegedly committed by the
The
"Domestic Partner".
"Domestic Partner" means any natural individual qualifying as a "Domestic Partner" under the provisions of
any applicable federal, state or local law or under the provisions of any formal program established by the
"Named Insured".
906-0313 08 09
Page
1 of 1
Document 1-2
Filed 04/15/16
Page
76 of 94

THIRD-PARTY LIABILITY COVERAGE
following:
ADDITIONAL DEFINITIONS, Paragraph I. "Wrongful Act" of

With respect to any "Claim" brought by or on behalf of a "Third Party" means any actual or alleged:
1. Discrimination against a "Third party"; or
2. Sexual harassment of a "Third party"; or
3. Violation of a "Third Party's" civil rights because of discrimination or sexual harassment,
The
Committed
or
attempted by
"Third Party"
leased worker,
means
an
"Insured" in their
temporary worker,
or
by the "Insured Entity".

customer, supplier, vendor, service provider, volunteer,
capacity
any natural individual who is
the
as an
"Insured"
or
independent contractor, business invitee
or
other client of the "Insured
Entity".
906-0314 08 09
Page 1
of 1
Document 1-2
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Page
77 of 94

WAGE AND HOUR LAWS EXCLUSION WITH DEFENSE EXPENSE
SUBLIMIT
following:
ADDITIONAL EXCLUSIONS, Paragraph A.12. of the Employment

SECTION IV
Insurance Coverage Part of this "Policy" is deleted and replaced with the following:
Practices
Liability

law, including but not limited to the Fair Labor Standards Act, or amendments to or
regulations promulgated under any such law, that governs wage, hour and payroll policies and practices,
Any
statutory
or common
except the Equal Pay Act. This exclusion does not apply to any "Claim" for retaliatory treatment against any
"Insured" who is attempting to exercise his or her rights under the above referenced statute, law, rule,
regulation or order.
We will pay "Defense Expenses" up to, but in no event greater than $100 000, for any such "Claim, without
any liability by us to pay such sums that any "Insured" shall become legally obligated to pay as "Damages".
Any "Defense Expenses" paid by us shall be part of and not in addition to the Limits of Liability stated in Item
2. of the Declarations.
906-0404 08 09
Page 1 of 1
Document 1-2
Filed 04/15/16
Page
78 of 94
EXECUTIVE OFFICER REPLACEMENT EXPENSES SUPPLEMENTAL
COVERAGE
following:

The following is added to SECTION I
INSURING AGREEMENT of the
Employment Practices Liability
We shall pay the "Insured Entity" for the following expenses related to the replacement of the Chief Executive
Officer or Executive Director who dies or becomes totally or permanently disabled during the "Policy Period",
as a result of an act of violence or an accident that occurs during the "Policy Period":
advertising the employment position opening;
1.
Costs of
2.
Travel, lodging, meal and entertainment expenses incurred in interviewing job applicants for the
employment position
3.
open; and
Miscellaneous extra expenses incurred in finding, interviewing and negotiating with the job applicants,
but not limited to overtime pay, costs to verify the background and references of the applicants
expenses incurred to draw up employment contracts.
including
and legal
apply in the event of:

4. An act of suicide or attempted suicide, whether or not the deceased was sane or insane at the time of the
attempted suicide; or
5. Any disease.
The most we will pay under this provision is $10 000 for all "Insureds" combined. Any payment made by us
under this endorsement shall not reduce the Limit of Liability stated in Item 2. of the Declarations. Any
Retention stated in Item 3. of the Declarations shall not apply to this coverage.
Coverage
906-0105 08 09
does not
Page
1 of 1
Document 1-2
Filed 04/15/16
79 of 94
Page
KIDNAP EXPENSE SUPPLEMENTAL COVERAGE
following:

The following is added to SECTION I
INSURING AGREEMENT of the
Employment
Practices
Liability
We will pay the "Insured Entity" for "Kidnapping Expenses" which are incurred in response to the kidnapping
of any past, present or future Director, Trustee or Officer of the "Insured Entity" or their spouse, domestic
partner or child, during the "Policy Period". We will not reimburse any "Insured Entity" for any expenses
incurred in any kidnapping by or at the direction of any present or former family member of the kidnapped
victim. The most we will pay under this provision is $10 000 for all "Insureds" combined. Any payment made
by us under this endorsement shall not reduce the Limits of Liability stated in Item 2. of the Declarations. Any
Retention stated in Item 3. of the Declarations shall not apply to this coverage.
For the purposes of the coverage
"Kidnap Expense"
provided by
this endorsement the
following definition applies:
means:
1.
Fees and expenses of
2.
Costs of travel and accommodations incurred

the kidnapping;
3.
The reward paid by the "Named Insured", which is pre-approved by us, to

otherwise available which leads to the arrest and conviction of persons
under this policy; and
4.
an
independent negotiator
or
consultant who is retained and
by the "Named Insured"
approved by
us;
which become necessary due to

an
informant for information not

for any "Damages"
responsible
salary to a director, trustee or officer of the "Named Insured" who is kidnapped, provided;
however, that the director or officer of the "Named Insured" is held for more than thirty (30) days. Salary
Current
shall be
paid
for
period starting
a.
The release of the director
b.
The death of the director
days after
120
Twelve
e.
The exhaustion of the
whichever
906-0107 08 09
or
with the abduction and
officer;
officer;
months after the date of
comes
ending upon the earliest of:
the company receives the last credible evidence that the director
c.
d.
(12)
or
or
officer is still alive;
kidnapping;
"Kidnapping Expenses" limit,
or
first.
Page 1 of 1
Document 1-2
Filed 04/15/16
Page
80 of 94

following:

Fiduciary Liability Insurance Coverage
The
Part of this "Policy":
Paragraph
H. "Insured Individual" of the
907-0308 08 09
Page 1 of 1
Filed 04/15/16
Document 1-2
Page
81 of 94
ARIZONA CRIME INSURANCE COVERAGE PART

following:
A.
ADDITIONAL CONDITIONS, Paragraphs A.4.b. and d. of Cancellation and Non Renewal

SECTION VII
of the Crime Insurance Coverage Part of this "Policy" are replaced by the following:
b.
We may cancel this

1)
20
or
delivering
if
we
cancel for
non-payment of premium
at any
time;
or
"Coverage
60 days before the effective date of cancellation if we cancel for any other
Part" has been in effect less than 60 days and is not a renewal.
3)
60 days before the effective date of cancellation if we cancel after the "Coverage Part" has been in
effect for 60 days or more or is a renewal of a "Coverage Part" from us, and for the following reasons:
a)
Conviction of the "Named Insured" of
against;
d.
and this
2)
crime
arising
out of acts
reason
increasing the hazard insured
or
b)
A substantial change in the risk assumed, except to the extent that we should
foreseen the change or contemplated the risk in writing the contract; or
c)
d)
A substantial breach of contractual duties
e)
A determination by the director of insurance that the continuation of this

place us in violation of the insurance laws of this state or would jeopardize
f)
Acts or omissions by the "Named Insured"

hazard insured against.
or
conditions;
reasonably have
or
Loss of reinsurance applicable to the risk insured against, but only if the absence of reinsurance
has resulted from termination of treaty or facultative reinsurance initiated or implemented by our
reinsurer or reinsurers; or
or
"Coverage Part" would

our solvency; or
his representative which materially increase the
address known to us with a statement of the specific reasons for cancellation or nonrenewal. Copies of
notices will also be sent to your agent. Proof of mailing is sufficient proof of notice. If notice is not mailed
in the time required, we will extend the "Policy Period" to accommodate notice requirements on a pro rata
basis of the existing 'Policy". If this "Coverage Part" is cancelled, we will send the "Named Insured" any
premium refund due. If the "Named Insured" cancels, the refund may be less than pro rata. If we cancel,
the refund will be pro rata. Notice of cancellation will be accompanied by a refund of unearned premium
except a premium that has been financed. If notice is mailed, proof of mailing will be sufficient proof of
notice.
C.
ADDITIONAL CONDITIONS,
The following is added to SECTION VII
Non Renewal of the Crime Insurance Coverage Part of this "Policy":
e.
Paragraph A.4. Cancellation and
908-0035 08 09
Page
1 of 1
Filed 04/15/16
Document 1-2
Page
82 of 94
ARIZONA KIDNAP/RANSOM AND EXTORTION INSURANCE COVERAGE

PART AMENDATORY ENDORSEMENT
following:
A.
ADDITIONAL CONDITIONS, Paragraphs S. 2. and 4. of Cancellation and Non Renewal of

SECTION VII
the Kidnap/Ransom and Extortion Insurance Coverage Part of this "Policy" are replaced by the following:
2.
We may cancel this

a.
20
"Coverage
Part"
days before the effective date
by mailing
or
delivering
of cancellation if
we
cancel for
at any
time;
or
b.
Part" has been in effect less than 60 days and is not a renewal;
c.
1)
crime
arising
out of acts
reason
and this
"Coverage
increasing the hazard
insured
against;
2) A substantial change in the risk assumed, except to the extent that we should reasonably
or
3)
4)
5)

or
or omissions by the "Named Insured"

C.
or
6) Acts
4.
conditions;
have
or
his

our solvency; or
representative which materially increase the
notice.
ADDITIONAL CONDITIONS, Paragraph S. Cancellation and Non

Renewal of the Kidnap/Ransom and Extortion Insurance Coverage Part of this "Policy":
5.
909-0029 08 09
Page
1 of 1
Document 1-2
Filed 04/15/16
Page
83 of 94
IL P 001 01 04
U.S. TREASURY DEPARTMENT'S OFFICE OF FOREIGN

ASSETS CONTROL ("OFAC")
ADVISORY NOTICE TO POLICYHOLDERS
No coverage is provided by this Policyholder Notice nor can it be construed to replace any provisions of your
policy. You should read your policy and review your Declarations page for complete information on the coverages
you are provided.
This Notice provides information concerning possible
by OFAC. Please read this Notice carefully.
impact
on
your insurance coverage due to directives issued
The Office of Foreign Assets Control (OFAC) administers and enforces sanctions
declarations of "national emergency". OFAC has identified and listed numerous:
policy, based
on
Presidential
Foreign agents;
Front organizations;
Terrorists;
Terrorist
organizations; and
Narcotics traffickers;
"Specially Designated Nationals and Blocked Persons". This list can be located on the United States Treasury's web site http//www.treas.gov/ofac.
In accordance with OFAC regulations, if it is determined that you or any other insured, or any person or entity
claiming the benefits of this insurance has violated U.S. sanctions law or is a Specially Designated National and
Blocked Person, as identified by OFAC, this insurance will be considered a blocked or frozen contract and all
provisions of this insurance are immediately subject to OFAC. When an insurance policy is considered to be such
a blocked or frozen contract, no payments nor premium refunds may be made without authorization from OFAC.
Other limitations on the premiums and payments also apply.
as
IL P 001 01 04
ISO
Properties, Inc.,
2004
Page
1 of 1
Document 1-2
Filed 04/15/16
Page
84 of 94
THE ONLY SIGNATURES APPLICABLE TO THIS POLICY ARE THOSE REPRESENTING THE
COMPANY NAMED ON THE FIRST PAGE OF THE DECLARATIONS.
We have caused this policy to be signed by our President and Secretary and countersigned
declarations page, where required, by a duly authorized agent of the company.
on
The Hanover Insurance Company

440 Lincoln Street
Worcester, Massachusetts 01653
Charles F. Cronin
Secretary
SIG-0001 0605
Marita Zuraitis
President
the
Filed 04/15/16
Document 1-2
Private Company
New Business
4Hanoyer
In6wance
Page
85 of 94
Advantage Portfolio
APPLICATION FORM
CLAIMS-MADE WARNING FOR APPLICATION
THIS APPLICATION IS FOR A CLAIMS-MADE AND REPORTED POLICY. SUBJECT TO ITS TERMS, THIS POLICY WILL APPLY
ONLY TO "CLAIMS" FIRST MADE AGAINST THE "INSUREDSAND REPORTED TO THE "INSURER" DURING THE POLICY
PERIOD OR ANY EXTENDED REPORTING PERIOD THAT MAY APPLY. PLEASE READ THE "POLICY" CAREFULLY TO DETERMINE
Whenever used In tits
Application, the term 'Applicant" shall
otherwise stated.
____C4CA.,10
Applicant;
1.
Name of
2.
Address of
63 t t
Applicant;
City: Z---r arr1ThA, re

2., r1
Telephone: LI tiO
3.
Name and
VN.
S ;41
the "Named !rsurec" and all subsidiaries, Lniesa
vziy
^-.1
$1
E.
mean
firr-; 0 pVs
.771JC.
frrrieiZrr
/Art Zlp
State:
Code;
6199
Address (if dfferent than above) of Primary Contact (Executive Officer authorized
to receive notices and
Information
regarding the proposed policy);

Name:
'1S7P
?5ZAT);(5,AA E4 Frx
Title;
up
K-7,
City:
4.
For
EmOgnent
Name:
Email
Ai4
e6Zip Code:
State;
Practices Loss Prevention, indicate the Individual rasp,
12*6
YeT
Z
AddressO
Title:
eible
for human
resources cr
employment law matters:
IT biCi2AL
RtiLLI4 (;0 Pyritoya, e0 U
Telephone;
OVERAGE REQU EVE!)

1.
Please Indicate below which 'Coverage Parte
tit-Rirectors
Liability
O Corporate (Entty) Liebffity Insurance
gr Employment Practices Liability Insurance
9duciary Liability Insurance
M Crime
and Officers
V.IGdnap/Ransom and
2.
Extortion
Indicate the type of Omit
requested:
are
being requested and complete only those sedlons

Limit of Liability Requestee;
Limit of
of thts
Application
ral.30, eDO 0
Liability Requested:
Limit of
Limit of Liability Requested:
Limit of
t.700, 60(1_
1 aao 15 eN
I
0 Combined Aggegate Limit of Liability for all 'Coverage Parte
Limit of
tg,,Separate Aggregate
Limit of
Liability
for each "Coverage Part'
CURRENT INSURANCE INFORMATION

1.
Please provide the folowing Information regarding the Appkants most recent Insurance policies. If no coverage is currently
place, plose indicate with a N/A, Attach a copy of all appilmtions submitted to the current insurer or any prior Insurers,
in
more
PAGE 1
C.6 4-0006 (Mgr
Filed 04/15/16
Document 1-2
Page
86 of 94
rely upon the declarations and statements contained In any prior appilcation(s) and the Applicant
arid
understands
agrees that Unose declaraijons and statements Oil be incorporated Into any Advantme policy Issued by
IMPORTANT:We wIl
Coverage
us
Part,
Directors and Officers
Liability
LI None
Limit of
Expiraton Date
surance Carrier
Liability
1_1_11_2&ii
/Q0
i,,, 4-k.
I
expiration Date
Limit of Liablliv
premIum
Retention
"4.5
1.,
E None
Corporate (Entity) Liability;

Insurance Carrier
Retention
Premium
Retention
ammilaa
Employment
Practices
Liability:
0 None.
Dmit of Liability
E,Epiration Date
llISLIrance_Catriel
4.A1L4._
jttittti 60-7.2.-,
6'' ' ..1.>-.6
E None
Fiduciary Liability:
5>iplration Date
Insurance Carrier
.nqijon Date
insurance Carder
14A-1-tpuea
Kidnap/Ransom
11/1,
Erraium
Limit of Liability
Retention
Premium
$4, 6.4) 4:0
011
E>piration Date
Limit of
it.tCWER, 61111-oil
8-0,
Liability
61'4
Plalailiinl
Retention
ieÎN-S.1),)4.4..)
Applicant exercised the Extended Reporting Period (or Discovery Period)

any Coverage Parts to which this application relates?
Has the
for
most
recently
Within the past 5 years has the Applicant given notice of any claim, circumstance or potential
claim to any Insurer under any of the coverage parts to which this applicaUon relates?
ff "Yee
4.
Retention
and Extortion: D None
insurance Carrier
3.
Limlt of l lablitV
Li None
Crime:
2.
-TO a") t)
please attach
full
explanation
of the claim, circumstanoe,
or
Fl No
0 Yes
E.1No
CI Yes
El No
potential claim.
Applicant cancelled or nonrenewed any of the coverage parts

past
to which this application relates? (Not Applicable In Namur!)
Within the
El Yes
5 years has the
ataaaLINE2EMATIQN
/iZ: 2.0.fi Fl
Date established:
q 1.
<4 ICE 3
E A.LE tel.
1.
State of
2,
Nature of the
3,
What is the Applicants Primary Standard lndLstrial ClassIfkation CSICI Code? '-1,r-1
What is the Applicant's Primary North American Industry Classification System (NAICS') Code'?
4,
5.
6.
Applicants
business
/-(04.1-12
complete the following Information

Employees: i ot c,
Please
Total
incorporation;
tiiiufr.4At,
_i_p_i
for the current year:

Annual Revenues:
Co
it_ (45 11,
04:143 Total Assets:
Within the past 3 years, has there been any change (resi6:ations, departures, retirements, etc) In
of the Board, President, Chief Exeative Officer or Chief Financial Officiy7
If "Yes',
please provide the following details via
-to
position
attachment: Name of Individual, dela cif change, and
of the
reason
for
Chairperson
change
/core
PAGE 2
504.0005 111,CE
Document 1-2
7.
in the next 12 months (or during the

in the process oi completing,:
past 18 months)
is the
Filed 04/15/16
Applicant contemplating (or
nes
the
Applicant completed or been
iLton-r.
1.tuu
(a) Any merger, acquistIon, or divestment? ikkEe
r
1`,<AQ-et
ovrs
6.1 or.g.1
(b) Any change In outside a...id-tors?
(c) Any reorganization or arrangement with creditors under federal or state laW?
'Eke
(d) Any brands, location, facility, office, or subsIdiar1 closings. consolldatons

If the Applicant answered "Yes" to any part of Question 7, please attach an
8.
Does the
Appliunt perform any profess:oral services

please attach an explanation.
If "Yes",
9.
Does the
If 'Yes',
Applicant
agreed
that coverage is not
PIRECTORS AND OFFICERS LIABILITY INFORMATION

Does the
El
Applicant participate
Captive
Insurance
requested?
list of these entlhas and Irdicate nature of business for each.
IMPORTANT; It is understood and

requested above Is provided,
1.
in any of the
LIE MM.+
)---14-0-11-r
teL.J.-^
e.)
3,
t1/44
VLNo
C Yes
(11No
11-Yes
0 No
uize
0 Insurance Company Ope-ations

0 ActMtles that fall under the Investment Act of 1940
El Partnership Manager
tt
months (or during the past

months) Is the Applicant contemplating (or has
the Applicant completed or been In the process of completing) any public or private offering
of securities?
If "Yes", please attach a full description with details.
by Applicant for each,
18
1-fas the Applicant At any person proposed for coverage been the
any of the following during the past 5 years:
subject of,
or
been involved
Yes
2No
In,
(a) Anti-trust, copyright or patent itigation

(b) Civil, criminal or administrative proceeding alleging violation of any
0 Yes
Irk)
Persons
No
0 Yes
Federal or State securities laws?

Cc) civil, criminal or administrative proceeding alleging violation of any
Federal or State Anti-Trust or Fair Trade Law?
(d) Any other criminal actions?
(e) My action for suspension or revocation of a license or for any
T1 Yes
NNo
0 Yes
0 Yes
CI Yes
NA-No
0 Yes
CIA.No
14No
ID Yes
1KNo
0 Yes
V1-No
C Yes
ttNo
DYes
No
professional disciplinary
If the
Applicant answered
sanction?
"Yes" to any of the above in Question 3, attach
full
description
Please
flik.No
of the details.
Other than those IdenMed In your response to Question 3, has any claim been brought at any
time during the last 5 years against (I) any Applicant or (il) any proposed Insured Individual In his
or her capacity as a director or officer of any entity?
If "Yes'
5.
f..Yr No
(\-10-Y) AP)
Organization
4.
0 Yes
0 Yes
following actiVitles? If None, so slate.
Operations
In the next '12
CI No
1.No
In Question 9. unless the Information
cull 1.0
i.t.s I USA.kow
None
Oloint venture7VU %.4.^
ti co-m.4h/.
/Ars: "I 1A-^ Grail-0.11
'4"4.)
If "Yes", please alfacn a list of these entities arid indicate natbre of business and percent of ownership held
2.
Yes
0 Yes
es
provleed (or subsidiaries
Company Operations
0 Franchising
0 General Partnership
layoffs?
explanation.
or
for a fee?
have any subsidiaries for which overage fs
please attach
87 of 94
Page
please attach a full description of the detalts,

provide
the
following information regarding the Applicants outsndIng ownership:

or unit outstanding:
(a) Total number of shares
(b) Total number
of security holders;
(c) Number of shares
or
units ov/ned
directly and/or benefidally by the Applicants:
more
PACIF. 3
094-0005 W0s)
Document 1-2
(d) Any security holder own, or have the right to

outstanding shares or units.
Please
provide details
own,
Filed 04/15/16
directly and/or benefldelly
10
percent or
of the
88 of 94
Applicants
below
Represented
Director
more
Page
or
Officer Snareholders
I Voting Shares Owned
Individual and Corporate Shareholders who are

both non-dlrectors and non-officers
Applicants Board of Directors

Board of Managers
on
or
Represented on Applicants Board

Voting Shares Owned
or
of Directors
Board of Managers
IMPLOMENIIMCI1Cf5_UalLITY INFORIM1ON
1.
Employee Court
Locations that have
EMP.LOMS
Year
Full Time
Pert Time
Current
Previous
___3
1-
L2-4)
2.
What percentage of the Appkant's
3.
Does the
409
In California
Employees currently earn
or more
-a'
-0-
.40
430'
more
Independent
Contractors
-I
4/
4e
'7
then $100, 0007
employees
90
Applicant
procedures In place reprding:

Equal Opportunity Employment
(a) Have written
Yes
i..Yes
No
Antr, -Sexual Harassment:
ft Yes
No
g, Yes
Lei No
Empioyment at Will:
Progressive Displline!
Handling complaints of sexual
harassment
or
discrimination:
ADA actbmmodatons
(b)
4.
If the
Does the
Applicant answered "Nlo" to any of the above In Question 3, please attach
(b)
(c)
Use any tests to screen
Applicants
or
full-time human
are
distributed to each
Yes
C No
%Yes
C No
employees
employee
for continued
El Yes
No
CI Yes
Et.No
hf the Applicant does
emp!oyment
or
promotion?
resources
and in-house
or
outside counsel?
manager
department?
(e) Have a
(f) Is face-to-face training regarding anti-disaiminalion and anti-sexual harassment policies and
procedures conducted by:
In-house human
resources
resources
or
IffrYes
Li No
V-Yes
FINo
staff?
rl No
L Yes
An outside vendor?
If "No" to both of the above In Question 4f,
(RICoLq
El No
please describe:
(d) Review all temrinations with human
IZIAGE
C No
Sij Yes
Appkart
Have written proceckires in piece that

not have an empbyee handbook?
If "Yes",
1?1' Yes
full explanation.
(a) DiStribute and document the rezelpt of Its employee handbook to all employees?
i1,14.NO5
El No
Anti- Discrimination:
please attach
an
No
explanation,
lnore
5.
Filed 04/15/16
Document 1-2
During the .aast 5 years, has any Applicant

glevances or ether administrative hearings
in any
or
capacity, been Involved
proceedings before
hn any lawsuit,
any of the following
Page
89 of 94
charges, Inquires, investigations,
(a) National Labor Relations Board?
0 Yes
(b) Equal Employment Ociporinity Board?

(c) Office of Federal Contract Compknce Programs?
El Yes
(d) US. Department of Labor?

(e) Any State
Fair
or
the Labor Department
as
Employment Agency?
(f) LS. Dvect

If the
Local Government agency such
or
'Yes' to any
past of Question 5, please attach
No
No
No
Li Yes
qi
0 seel
ky
U Yes
15 No
E Yes
9No
^;;E..Yes
ONe
ik-Yes
0 No
C Yes
ig--No
or
State Court?
Applicant answered
Itipl
an
explanation.
OFTIONAL THIRD PARTY LIABIIITY COVERAGE

6,
Does the
Applicant have established policies ard procedures:

(a) Outlining employee conduct when dealing with third partles, InciJiTng nor-discrimination and
non4larassrnent sb.tements?
(b) For responding to complaints of harassment discrimination

from third parties?
or
cill
rights violations
What percentage of the Applicant's

of their functions off-site?
8,
Has the Appkant ever had any action or civil suit brought against them
third party allegng harassment, discrimination, or chill rights violations?
please
If 'Yes"
attach
full
employees
descrIptlon
wori< a: customer locations
or
by a
perform
majority
customer, client or
of the details.
FIDUCIARY I-IARILITY INFORMATION

1,
Please list the
names
and types of Applicants
benefits
plan(s).
Attach additional pages If needed.
Plan Names
Plan Assets
1)(13e
Funding
Number of Plan
(Do not Include health
(Most current year)
of Plan'
Under of Over Funded by

more than 25% (DB only)
Participants
& weffare
plans)
4.014,
55 (00e
r
*Defined Contribution (DC), Defined Benefit (DB),

2.
employee
Does the
If "Yes,
D Yes
0 No
0 Yes
CI No
0 Yes
0 No
0 Yes
0 No
0 Yes
CI No
'IP
Employee
Stock
Excess Benefit
Applicant
please describe:
4,
Are any
5.
Has any
employee benefit plan invested in securities

If Yes', please attach a full description with details.
6,
Has any
plans NOT in compliance with plan agreements

If "Yes, please describe:
or
of the
Top
Hat
bk<
(EBP)
D Yes
handie any investment decisions In-house7
If "Ncl' to question 2 above do the fiduciaries review the investment

investment manag-as at least annually?
ONo
guidelines used by the

Vil'es
0 No
ERISA?
ID Yes
righilo
Applicant?
El Yes
employee benefit plan Invested in more than 100/o of any entity other than
pooled investment vehlele such as a mutual fund?
If 'Yes", please attach a full eescription with details_
or a
or
Party or
Outside
Administrators
ta
Ownership (ESOP),
3.
Third
the
Applicant
0 Yes
Itifsso
more
PAGE 5
genwincn
innpj
Document 1-2
7,
B.
9.
10,
11.
Filed 04/15/16
Has any employee benefit plan loaned or pledged any employees benefit plan
party-h-lnterest OncludIng the Applicant?
if 'Yes", please attach a full description wit details.
Page
90 of 94
assets to any
Are there any overdue Applicant mntrIbutIons for any plan, or has any plan requested
contmplated filing a request .for a walver of contributions?
If "Yes", please attch a'full description with details.
C) Yes
th-No
El Yes
F..No
C Yes
l'No
'tit.Yes
E No
T-Yes
E No
or
Within the last 3 years, has there been, or is there currently under consideration, any restructuring
spir-off, transfer, consolidation, merger, tern'Oation or other similar transaction of any employee
benefit plan?
II 'Yes', please attach a fui description with deals.
If any of the following questions are answered "No", please attach a full description with details.
(a) Are all employee benefit plans compliant Mi., the Health Insurance Portablity and
Accountability Act (HIPPA)?
(b) Does the plan sponsor comply with the summary plan descriptIon requirements under ERSA
for all employee benefit plans?
(c) Do all employee benefit plans have a written Investment pollq?
(d) Is the fair market value of all employee benefit plans calculated annually?
During the past 5 years, has there been, or is there cvrrently, any investiggon by the IRS,
Department of Labor (DOLL Pension Benefit Guarantee Corporatlon (PBCC), or any other State
Federal Agency of any employee benefit plan or any current or former fidudary of such
employee benefit plan7
If 'Yes", please attadn a full description
details,
Wes
No
C No
or
0 Yes
110,No
Sign checks?
DYes
U.No
Handle deposits?
CI Yes
1:11No
11.1 Yes
*No
CRIME COVERAGE INFORMATION_

1,
Does the
Applicant:
(a) Allow the employees who reconcile the monthly bank statemerri5 to afso:
signing machines or signature plates?

of
checks
required7
countersIgnatire
Have
(b)
Is
If "Yes",
access
over
If "No", who
to check
what amount?
can
sign chocks?
(c) Are internal controls
designed
EN-7
so
that
no
employee
t
can
control
a,
process from
beginning to
check, approve a voucher, sign a check)?

stored
under dual control with controlled access?
check
is
stock
(0)
ii:yes
No
E Yes
9,No
end (e.g. request
(e) Are Incoming checks Immedlatey stamped For Deposit On/y?
VaYes
E No
2.
Does an annual external audit indude all subsidiaries and
C. Yes
iZNo
3.
Does the
If "No",
4.
5.
6.
7.
8.
9.
10.
AppliCant's
external aurit include eil of Its
please explain:
Independent C?A provide a Management
JoInt
ventures?
locatirns?
Ati:
Letter to the
centiriin-
Applicant?
DO you have a documented system of Internal control policies/procedures?
Do you have an internal audlt department?
Are rnanagernent patios and computer systern controls In place to prevent indivIdual(s) who
approve new hires from addIng them Into the payroll
Do you have a program in place to detect possible "Chosr employees?
How often does the ApplIcant perbrm a physical Inventoy check of stack and equIpment7.0.4__.
Who performs these reconciliations,
'ICJ 00
itotAS l4
Does the Applicant maintain a perpetud inventory of stock clueing raw materials/manufaCtured
or purchased goodsiscrap?
Does an
..E Yes
ft,Pho
Yes
Et_hNo
NiYes
U No
D Yes
No
i_Pes
te-Yea
0 No
No
ARM C.A- Attel
..LL)r2ttt.121
0..Yes
0 No
more
PAGE 6
1:104, 4306
(P103)
11.
Filed 04/15/16
Document 1-2
Page
91 of 94
Number of Locations:
Eoralgr_locatIons
(Name)
c?'
12,
Are Internal control polides and

of domestic locations?
If
13.
14.
procedures for foreign locations
consistent with those

El Yes
El No
0 Yes
1)4No
(11,Yes
0 No
0 Yes
R,No
0 Yes
IND
"No'', please attach
an explanation,
perform pre-employment reference
If "No'', please attach an explanation,
Does the Applicant:
Does the Applicant
(a) Maintain
potental employees?
checks for all its
list of authortzed vendors?
a procedure In place
verify the e4stence and ownership
adding them to the authorized master vendor list?
to
(b) Have
of
new
vendors prior to
individual who verifies the existence of vencors to alio have the

to cell: the authorized master vendor list?
(c) Allow the
same
authority
(d) Verify Invoices against a corresponding purchase order, receiving report and the authorized
master vendor list prior to issuing payment?
15.
Are the duties of
computer programmers and operators separated?
separation been established
between
authority to
initiate and approve
wire trartsfer?
16.
Has
17.
If a telephone call can activate a transfer of funds, does your finandal Institution call an
other than the one who requested the transfer before acting on the transfer request?
employee
0 No
El No
0 Yes
E No
LOCYes
E.: No
0 Yes
VANo
a______122,44.art-9-)
employee or a department other than the one who
if 'Yee, what is the callback threshold?
411_94a,
18.
Are transfer verifications sent to an

initiated the transfer?
19.
Are wire transfers reconciled the same day the transfer verifications
who did not approve or transmit such wire transfer?
20.
Are tne
following physical controls in
are
received
by an Individual
pkce:
(a) Alarm System
CI Yes
LY*1\lo
0 Yes
0 No
Yes
El No
0 Yes
'4LN
1;92
(b) Video Cameras

(c) Seoatty Guards
0 Yes
(d) Controlled Premises Ag:ess
7-Yes
0INo
El Yes
ONo
21.
Maximum exposure inside the premises:
22.
Outside the Premises Coverage Exposure:

Do you use an Armored Motor Vehicle Company to transport Money
Locattomt6er,Th.SDPA
If No",
Checks/Securities:
Cash:
or
Securities?
please complete below:
Maximum exposure outside the
premises:
Cash:
Locaticc:
of Messengers:
Checks/Securides:
23.
Yes
IS Yes
List all employee theft, forgery, computer fraud or other crime losses discovered by the Applicant
in the last 5 years, itemiz;ng each loss separately. Include date of loss, description, total amount of
loss, and correcttve measures. Attach additional pages If needed.
-rg-srn-
os,5
011 /2-Do
ill Check if none
oy
more
NACIE 7
eo4.D006
(sMR)
Document 1-2
Filed 04/15/16
Page
92 of 94
OPTIONAL WENT PROPERTY NFORMATION;

24,
Please describe the services The
rDrOer
410/
25.
Appticant provides for clients:

.4(1)
7)1S-t-'7470,.e.i;
Applicants clients reqWre the Applicant to

'Yes"olease explain and specify amount
Do arty of the
If
Ai"-SZ 'TAD Pft
or
^4
EME,74 1-4
carry crime Insurance
or
to be
hondee7
E Yes
KIDNAP/RANSOM &IMO:UTZ COVERACE ItifcaariCK

1.
complete the following information .regardIng the foreign
Please
1---Ec-i-J;ies Visited
&jet. pes
AAA
2.
(14.'0M
A VAt A
Describe the
travel of the
Number of annual trips
Applicants employees:
aelage.sDly
j`lirnber of employegs
AppIldant's fecurty precautions tiken
for
foreign travel:
PRIOR KNoitaILKERIEQEMAII0II
1.
The
Applicant must complete the prior knowleoge statement below:

entity proposed for coverage Is aware of any fact, circumstance,
No person or
suppose
or situation wh!ch he or she has reason to

to any clalm that would fall wIthIn the scope of any of the proposed coverages for which the
not currently maintain insurance, or within any of the larger limits of liability sought by the Applicant, except:
might give
ApplicOaidoes
nse
None
IMPORTANT: It is understood and agreed that we shall rot be liable to make payments for loss 'rl connection with any claim
made against any Applicant directly or indirectly arising out of, based upon or attributable to, or iri any way involving any lawsuit,
administratve proceeding, written demand, fact, circumstance, or situation set forth or that should have been set forth In the
Applicants response to question 1 above.
I
31,-Zoofi
more
PAGE. El
W091
Document 1-2
Filed 04/15/16
Page
93 of 94
undersigned, ading on behalf of al; Applicants, declare that the statenients set forth in this 'Application' are true and correct and that
thorough efforts were made to obtain ;quested information from each and every Applicant proposed tr this insurance to facilitate the
The
proper and accurate completion of this
"Applicadon",
The undersigned agree that the information provided In this 'Apptcation" and any material submitted herewith are the repr%entatons of
all Applicants and that they are material and are the basis fof issuance of the Insurance "Policy' pre/Ada:I by us. The undersigned further
agree that lie 'Application" and any rnatorlal submitted herewith shall be considered attached to and a part of the 'Po lIcy", Any material
submitted wlth the 'Applicaton" shall be maintained on file (either electronically or paper) wrth us and shall be deemed to be attached
hereto as if physlcally attached.
It Is further agreed that:
If any of the Applicants discover cr become aware of ary significant change In the condtion of the Applicants Organization between
the date of this 'Application" and the "Policy" inception date, vinIch would render the 'Application
IR
Any "Poicy" Lssued will be In reliance upon the truthfulness of the Informeon provided in this "Application"; provided, however, with
respect to stxh Information, no knowledge or information possessed by any Appliu.nt shall be imputed to any other Applicants, lf
any person or persons knew as of the "Policy" Inception date that such Information contained In the 'ApplIcation(s)" were untrue,
inaccurate or Incomplete, then Coverage may be denied or eanceled with respect to that person or persons If such Information
was material to Issuance of the 'Poky", However, if the Chairperson of the board of Directors, President, Chief Executive Officer, or
Executive Director of the Applicant knew as of the "Policy" Inception date that such information contained in the Adplication(s)"
were untrue, Inaccurate or incomplete, then Coverage may be denied or canceled with respect to that person or persons and the
Applicant Organization if such Information was material to issuance or the 'Policy";
Statements In the 'Application", facts pertaining to or knowledge possessed by the individual signing the 'Application" shall be
imputed to the Applicant; and
IIIII
The signing of this 'ApplicatIon" does not bind the undersigned to purchase the insurance,
Le
NOTICE TO COLORADO APPLICANTS: IT IS UNLAWFUL TO KNOWINGLY PROVIDE FALSE, INCOMPLETE, OR MISLEADING

FACTS OR INFORMATION TO AN INSURANCE COMPANY FOR THE PURPOSE OF DEFRAUDING OR ATTEMPTING
TO DEFRAUD THE COMPANY. PENALTIES MAY INCLUDE IMPRISONMENT, FINES, DENIAL OF INSURANCE, AND CML
DAMAGES. ANY INSURANCE COMPANY OR AGENT OF AN INSURANCE COMPANY WHO KNOWINGLY PROVIDE FALSE,
INCOMPLETE, OR MISLEADING FACTS OR INFORMATION 70 A POLICY HOLDER OR CLAIMANT FOR THE PURPOSE OF
DEFRAUDING OR ATTEMPIING TO DEFRAUD THE POLICYHOLDER OR CLAIMANT WITH REGARD TO A SETTLEMENT OR
AWARD PAYABLE FROM INSURANCE PROCEEDS SHALL BE REPORTED TO THE COLORADO DIVISION OF INSURANCE
WITHIN THE DEPARTMENT OF REGULATORY AGENCIES.
N_QTLE_T..Q_ PENNSYLVANIA APPLICANTS; ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD
ANY INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF
CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION,. OR CONCEALS FOR THE PURPOSE OF MISLEADING,
INFORMATION CONCERNING ANY FACT MATERIAL THERETO COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A
CRIME AND
SUBJECTS SUCH PERSON TO CRIMINAL AND CIVIL PENALTIES.
NOTICE TO NEW MEXICO APPLICACS; ANY PERSON WHO KNOWINGLY PRESENTS A FALSE OR FRAUDULENT CLAIM
FOR PAYMENT OF A LOSS OR BENERT OR KNOWINGLY PRESENTS FALSE INFORMATION IN AN APPLICATION FOR
INSURANCE IS GUILTY OP A CRIME AND MAY BE SUBJECT TO CIVIL FINES AND CRIMINAL PENALTIES.
TO DEFRAUD ANY
INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM
CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING, INFORMATION
CONCERNING ANY FACT MATERIAL THERETO COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME.
IDLICLISLIMELLC,..Kf_APPLICANTS; ANY PERSON WHO KNOWINGLY AND WITH INTENT
NOTICE TO MICHIGAN AND MINNESOTA APPLICANTS; ANY PERSON WHO KNOWINGLY AND WITH INTENT TO
DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT
OF CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS, FOR THE PURPOSE OF MISLEADING,
INFORMATION CONCERNING ANY FACT MATERIAL THERETO, IS GUILTY OF A FELONY AND IS SUBJECT TO CRIMINAL
AND CIVIL PENALTIES.
NOTICE TO 0.1110 APPLICANTS; ANY PERSON WHO, WITH INTENT TO DEFRAUD OR KNOWING THAT HE 15
FACILITATING A FRAUD AGAINST AN INSURER SUBMITS AN APPLICAIION OR FILES A CLAIM CONTAINING A FALSE
OR DECEPTIVE STATEMENT IS GUILTY OF INSURANCE FRAUD.
more
PAGE 9
V0E-VOUS
(aim)
Document 1-2
Filed 04/15/16
Page
94 of 94
NOTICE TO NEW JERSEY APPLICANTI ANY PERSON WHO KNOWINGLY INCLUDES ANY FALSE OR MISLEADING
INFORMATION ON AN APPUCATION FOR AN INSURANCE POLICY OR FILES A STATEMENT OF CLAIM CONTAINING
ANY FALSE OR MISLEADING INFORMATION IS SUBJECT TO CRIMINAL AND CIVIL PENALTIES.
NOTICE TO OKLAHOMA AND IDAHO APPLICANTS: ANY PERSON WHO KNOWINGLY, AND WITH INTENT TO
INJURE, DEFRAUD OR DECEIVE ANY INSURER, MAKES ANY CLAIM FOR THE PROCEEDS OP AN INSURANCE POLICY
CONTAINING ANY FALSE, INCOMPLETE OR MISLEADING INFORMATION IS GUILTY OF A FELONY.
TO DISTRICT OF COLUMBIA APPLICANTS: WARNING: IT IS A CRIME TO PROVIDE FALSE OR MISLEADING
INFORMATION TO AN INSURER FOR THE PURPOSE OF DEFRAUDING THE INSURER OR ANY OTHER PERSON.
PENALTIES INCLUDE IMPRISONMENT AND/OR RNES, IN ADDITION, AN INSURER MAY DENY INSURANCE BENEFITS
NOTICE
IF FALSE INFORMATION MATERIALLY RELATED TO A CLAIM WAS PROVIDED BY THE APPLICANT
NOTICE TO MAINE. TENNESSEE, VIRGINIA. AND WASHINGTON APPLICAN15; IT ISA CRIME TO KNOWINGLY PROVIDE
FALSE, INCOMPLETE OR MISLEADING INFORMATION TO AN INSURANCE COMPANY FOR THE PURPOSE OF
DEFRAUDING THE COMPANY. PENALTIES INCLUDE IMPRISONMENT, FINES AND DENIAL OF INSURANCE BENEFITS.
NOTICE TO FLORIDA APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO INJURE, DEFRAUD OR
DECEIVE ANY INSURER FILES A STATEMENT OF CLAIM OR AN APPLICATION CONTAINING ANY FALSE, INCOMPLETE,
OR MISLEADING INFORMATION IS GUILTY OF A FELONY OF THE THIRD DEGREE.
NOTICE TO HAWAII APPLICANTS; FOR YOUR PROTECTION, HAWAII LAW REQUIRES YOU TO BE INFORMED THAT
PRESENTING A FRAUDULENT CLAIM FOR PAYMENT OF A LOSS OR BENEFIT IS A CRIME PUNISHABLE BY FINES OR
IMPRISONMENT, OR BOTH.
NOLGE_TSLAWKANSAS. LOUISIANA ISA WEST VIRGINIA APPLICANTS; ANY PERSON WHO KNOWINGLY PRESENTS
A FALSE OR FRAUDULENT CLAIM FOR PAYMENT OF A LOSS OR BENEFIT OR KNOWINGLY PRESENTS FALSE
INFORMATION IN AN APPLICATION FOR INSURANCE IS GUILTY OF A CRIME AND MAY BE SUBJECT TO FINES AND
CONFINEMENT IN PRISON.
tl_OTICE TO MARYLAND APPLICANTS: ANY PERSON WHO KNOWINGLY AND WILLFULLY PRESENTS A FALSE
OR
FRAUDULENT CLAIM FOR PAYMENT OF A LOSS OR BENEFIT OR KNOWINGLY AND WILLFULLY PRESENTS FALSE
CONFINEMENT IN PR/SON.
NOTICE TO MISSOURI & ARIZONA APPLICANTS: CLAIM EXPENSES ARE INSIDE THE POLICY LIMITS, ALL CLAIM
EXPENSES SHALL FIRST BE SUBTRACTED FROM THE LIMIT OF LIABILITY, WITH THE REMAINDER, IF ANY, BEING THE
AMOUNT AVAILABLE TO PAY FOR DAMAGES.
NOTICE TO OREGON ARPUCANTS: ANY PERSON
ANOTHER TO DEFRAUD ANY
INSURANC3 CO
CLAIM1CONTA)NING A FALSE STATEMENy
7/a
/AN
y)(-TOVVINGLY
N;
AND WITH INTENT
mirAN
)/BY summ
TO DEFRAUD OR SOLICIT
APPLICATION, OR (2) BY FILING A
ARIAL FACT, MAY BE VIOLATING STATE LAW.
Dated
Chief Executive Officer (Signature)
Dated
ief Enameled Officer (Signature)
mere
PAGE 10
6o Ione woo)
Document 1-3
Filed 04/15/16
EXHIBIT 2
Page
1 of 95
Document 1-3
Filed 04/15/16
Page
2 of 95
H A N OVE R
(A\
-I,
1,...N
rr---%,
'Hanover
rif IVP L"
'N!
ri,
A t 1,
1 1. -....4,Cle
r-t
H.,
NOTICE: THE LIABILITY COVERAGE PARTS ARE WRITTEN ON A CLAIMS-MADE BASIS. SUBJECT TO ITS TERMS,
THIS POLICY APPLIES ONLY TO CLAIMS FIRST MADE AGAINST THE INSUREDS DURING THE POLICY PERIOD
OR ANY APPLICABLE EXTENDED REPORTING PERIOD. THE LIMITS OF LIABILITY CAN BE COMPLETELY
EXHAUSTED BY DEFENSE EXPENSES AND DEFENSE EXPENSES WILL BE APPLIED AGAINST THE RETENTION.
THE INSURER WILL HAVE NO LIABILITY FOR DEFENSE EXPENSES OR THE AMOUNT OF ANY JUDGMENT OR
SETTLEMENT IN EXCESS OF THE APPLICABLE LIMIT OF LIABILITY.
PLEASE READ THE ENTIRE POLICY CAREFULLY.
The Hanover Insurance
Policy Number
LH4-8827059-07
Company
440 Lincoln Street
(A Stock
Item 1.
Insurance
Company, herein called the Insurer)
NAMED INSURED
Vemma International Holdings, Inc
DBA Vemma Nutrition Company
8322 E. HARTFORD DRIVE
SCOTTSDALE, AZ 85255
Item 2.
POLICY PERIOD
Inception Date: 08/01/2015 Expiration Date: 08/01/2016
(12:01
Item 3.
AM standard time at the address shown in Item
COMBINED POLICY AGGREGATE LIMIT OF LIABILITY: S YES E NO

If "Yes" is checked above the Combined
Coverage Parts is $5, 000, 000
Item 4.
1)
Policy Aggregate
Limit of
Liability
for all Claims under all
COVERAGE PARTS APPLICABLE TO THIS POLICY

Yes
Coverage Part
Directors & Officers and
Employment
Practices
Entity Liability Coverage Part
Liability Coverage
No
El
Part
Part
Cyber Privacy & Security Coverage Part

Crime
Coverage Part
Kidnap & Ransom Coverage Part
Li
Liability
Document 1-3
Filed 04/15/16
Page
3 of 95
(i
Hanover
1\,
g;
N OVE
ntel$
r.
$37, 457.00
COVERAGE PREMIUM
Item 5.
N/A
$37, 457.00
Total Amount:
Item 6.
ENDORSEMENTS EFFECTIVE AT INCEPTION: See Schedule of Forms attached.
Item 7.
NOTICE TO INSURER
Report a claim to the Company
P.O. Box 15145
Worcester, MA 01615
as
required
to:
Company
National Claims Telephone Number: 800-628-0250

Facsimile: 800-399-4734
Email: firstreport@hanover.com
Agent
on
ARNETT INSURANCE SERVICES
behalf of:
MESA AZ 85206
We have caused this
Policy
Frederick H.
to be
our President and Secretary and

authorized agent of the Company.
signed by
Eppinger,
President
countersigned
where
Charles F. Cronin,
required by
Secretary
duly
Filed 04/15/16
Document 1-3
Page
4 of 95
1-ta'nover
croup,
li, s,,, mcv
Common
Terms and Conditions
Policy
.11MMIEL1M1Met
THIS IS A CLAIMS-MADE COVERAGE WITH DEFENSE EXPENSES INCLUDED IN THE LIMIT OF LIABILITY.
PLEASE READ THE POLICY CAREFULLY.
In consideration of the premium paid, in reliance upon the statements in the Application and subject to the Declarations,
limitations, conditions, definitions and other provisions of this Policy, including endorsements hereto, the Insurer and the
Insureds agree
I.
as
follows:
COMMON TERMS AND CONDITIONS

The Common Policy Terms and Conditions of this Policy shall apply to all Coverage Parts. Unless stated to the
contrary in any Coverage Part, the terms and conditions of each Coverage Part of this Policy shall apply only to
that Coverage Part and shall not apply to any other Coverage Part of this Policy. If any provision in this Common
Policy Terms and Conditions is inconsistent or in conflict with the terms and conditions of any Coverage Part, the
terms and conditions of such Coverage Part shall control for purposes of that Coverage Part. Any defined term
referenced in this Common Policy Terms and Conditions and also defined in a Coverage Part shall, for purposes
of coverage under that Coverage Part, have the meaning set forth in that Coverage Part, unless otherwise stated.
DEFINITIONS
Application
A.
means:
application given to the Insurer for this Policy including any attachments, written information
provided to the Insurer by or on behalf of an Insured for the purposes of the Insurer's
underwriting of this Policy; and
Any portion of
an
and materials
B.
Any warranty provided to the Insurer within the past three years
policy of which this Policy is a renewal or replacement.
Claim shall have the
meaning
defined in the
as
Defense Expense shall have the

Executive
A.
means
meaning
any natural person who
duly-elected
as
is,
applicable Coverage
defined in the
was,
or
in connection with any coverage part
or
Part.
applicable Coverage
Part.
shall become:
general counsel,
trustee of the Insured
or
appointed director, officer,
or
appointed manager or member of a Board of Managers of a Limited Liability Company,

or other units operated under the Insured Entity's charter or with the Insured Entity's
manager, in-house
or
Entity;
B.
duly
elected
boards, committees
written
C.
approval;
or
Any person holding an equivalent position

incorporated, formed or organized anywhere
defined in the
to those described in A. and B. above in any Insured

in the world.
applicable Coverage
Insured shall have the
meaning
Insured
the Named Insured and any
Entity
means
as
Insured Individual shall have the

Insurer
means
the
entity issuing
meaning
this
as
Entity
Part.
Subsidiary.
defined in the
Policy as designated
applicable Coverage Part,
in the
Policy Declarations.
the Directors, Officers and
Entity Liability, Employment

Liability Coverage Part means individually collectively:
Practices Liability and Fiduciary Liability Coverage Parts; and Insuring Agreements A. Privacy and Security
Liability and B. Cyber Media Liability of the Privacy and Security Coverage Part, if purchased and as set forth in
Item 4. of the Policy Declarations.
or
Loss shall have the
Form 904 1001 Ed. 01/14
meaning
as
defined in the
applicable Coverage
Part.
Page
1 of 6
4:,,
Filed 04/15/16
Document 1-3
5 of 95
Page
h..
Hanover
Insur,
incc
Common
Policy
'..-.2r.V.V..NdialEVENISCItt6I'VailttinlgaIMMIUMIN.:IMYEOVIIME4MirfaIMEINZEIMVItil.WittiMrkiMag
Named Insured
means
the
Non-Liability Coverage
entity designated
Part
means
Part and
Coverage
The Crime
B.
Insuring Agreements C. through
If
and
purchased
as
Policy
Declarations.
individually or collectively:
Kidnap
A.
in Item 1. of the
Coverage Part;
& Ransom
I. of the
Privacy
and
Security Coverage Part;
and
Period means the period of time from the inception date shown in Item 2. of the Policy Declarations to the
earlier of the expiration date shown in Item 2. of the Policy Declarations or the effective date of termination of this
Policy
Policy.
Pollutants means any solid, liquid, gaseous or thermal irritants or contaminants, including smoke, vapors, soot,
fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.
Related Claims
all Claims based upon,
means
arising
circumstances, situations, transactions, results, damage

situations, transactions, results, damage or events.
Related
Act shall have the
Wrongful
Subsidiary
meaning
as
or
from
events
defined in the
or
or
in any way related to the same facts,

the same series of facts, circumstances,
applicable Coverage
Part.
means:
A.
Any entity in which an Insured Entity owns more than fifty percent (50%) of the outstanding securities
representing the right to vote for election of or to appoint directors, trustees, managers member of the Board
of Managers or equivalent positions of such entity are owned or controlled by the Named Insured, directly or
through one or more Subsidiaries;
B.
Any entity while:

1.
Exactly fifty percent (50%)
of the securities
representing
to vote for election of
right
the
or
to
appoint
directors, trustees, managers, members of the Board of Managers, or equivalent positions of such entity
are owned, or controlled by the Named Insured, directly or through one or more Subsidiaries; and
2.
C.
The Named Insured, pursuant to a written contract with the owners of the remaining and outstanding
voting stock of such entity, solely controls the management and operation of such entity; or
Any foundation
Coverage shall apply
Wrongful
III.
charitable trust while such
or
to
entity is
Subsidiary only during
Act shall have the
meaning
as
controlled
the time it
defined in the
by the Named Insured.
qualifies
as a
Subsidiary.
applicable Coverage
Part.
EXCLUSIONS
A.
The actual,
arising
alleged
Loss, cost
or
any Insured
respond
2.
to Loss for any Claim:
Pollution
Based upon,
1.
apply
to
or
out of
or
or
in any way related to:
threatened
discharge, dispersal,
seepage,
migration,
release
or
expense arising out of any request, demand, order or statutory or

others test for, monitor, clean up, remove, contain, treat, detoxify
assess the effects of Pollutants; or
or
Any regulation, direction, request or order by or

remove, contain, treat, detoxify or neutralize, or in
Form 904 1001 Ed. 01/14
on
behalf of
any way
escape of Pollutants;
regulatory requirement
or
neutralize,
governmental authority
respond
to
or assess
or
to test
that
in any way
for, monitor,
the effects of Pollutants.
Page
2 of 6
Document 1-3
Filed 04/15/16
Page
6 of 95
jHanover
CroupIllStli, Ince
Common
Policy
1r1MgAWWWWW4IMEMWOMAIMLESEAMt=tMOMISCRWAN22MSAWOWIMIT, :::22/
B.
Nuclear
Based upon, arising out of or in any way related to the radioactive, toxic, or explosive properties of nuclear
material which includes, but is not limited to, Source Material, Special Nuclear Material and Byproduct Material as
those terms are defined in the Atomic Energy Act of 1954 and any amendments thereto, and any similar
provisions of any federal, state or local statutory or common law.
IV.
V.
LIMIT OF LIABILITY
A.
If the Combined Policy Aggregate Limit of Liability in Item 3. of the Policy Declarations is elected, the amount
stated shall be the Insurer's maximum liability for all Loss during the Policy Period arising from a Claim or
Related Claims under one or more Liability Coverage Parts combined. However, any Loss paid under a
Liability Coverage Part shall not exceed the Maximum Aggregate Limit of Liability stated in Item 3. of the
respective Coverage Part Declarations.
B.
If the Combined Policy Aggregate Limit of Liability in Item 3. of the Policy Declarations is not elected, the
Insurer's maximum liability for all Loss during the Policy Period arising from a Claim or Related Claims
under each Liability Coverage Part shall not exceed the Maximum Aggregate Limit of Liability stated in Item
3. of the respective Coverage Part Declarations.
SPOUSES, DOMESTIC PARTNERS, ESTATES AND LEGAL REPRESENTATIVES
Solely
A.
with
respect
to the
coverage shall extend to:
as defined under any applicable federal, state or local law, of an Insured

such
of
person's status as spouse or domestic partner or such person's
solely by
ownership interest in property which the claimant seeks as recovery from an Insured Individual;
A lawful spouse or domestic
Individual
B.
Liability Coverage Parts,

partner,
reason
heirs, legal representatives

deceased, legally incompetent, insolvent
The estate,
or
or
assigns of
bankrupt.
an
Insured Individual if such Insured Individual is
Coverage shall not apply to Loss for Claims for any actual or alleged act, error, omission, misstatement,
misleading statement, neglect or breach of duty by an Insured Individual's spouse, domestic partner, heir,
estate, legal representative or assigns.
VI.
RELATED CLAIMS
With respect to the Liability Coverage Parts all Related Claims will be considered as a single Claim made in
the Policy Period or Extended Reporting Period in which the earliest of such Related Claims was first made or
first deemed to have been made pursuant to the applicable Coverage Part. All Related Claims are subject to the
Limits of Liability, Retention and other terms and conditions applicable to the earliest Related Claim.
VII.
LEGAL PROCEEDINGS
A.
No individual or entity has a right under this Policy to join the Insurer as a party or otherwise bring us into a
suit asking for damages from an Insured or to sue the Insurer on this Policy unless all of its terms have been
fully complied with.
B.
An individual or entity may sue us to recover on an agreed settlement or on a final judgment against
Insured but the Insurer will not be liable for damages that are not payable under the terms of this Policy
Form 904 1001 Ed. 01/14
Page
an
or
3 of 6
4' Hanover
Insiir, mcc
that
are
Page
7 of 95
Crcmp'
in
excess
liability signed by
VIII.
Filed 04/15/16
Document 1-3
Common
of the
applicable
Limit of
Policy
An
Liability.
agreed settlement means a settlement

legal representative.
and release of
us, the Insured and the claimant or the claimant's
CHANGE IN CONTROL OR EXPOSURE

A.
Acquisition
If
during
of the Named Insured
the
Policy
Period:
1,
Another individual, entity or group of individuals

assets of the Named Insured; or
2.
Another individual, entity or group of individuals or entities acquires more than fifty percent (50%) of
outstanding securities representing the right to vote for the election of directors, trustees, members of the
Board of Managers or management committee members of the Named Insured;
3.
The Named Insured consolidates
surviving entity;
4,
applicable
entities
acquires
merges with another
entity
more
than
fifty percent (50%)
of the
and the Named Insured is not the
or
The Named Insured emerges from
Then the
or
or
coverage under this
bankruptcy
Policy
on an
effective date stated in the
plan
of
reorganization;
with respect to:
a.
Liability Coverage Parts shall continue until the termination or expiration of the Policy Period but
only for Claims for a Wrongful Act which occurs prior to the transaction date of such event;
b.
Non-Liability Coverage
Parts shall terminate
as
of the transaction date of such event.
The Named Insured shall notify the Insurer of such transaction as soon as practicable but no later than sixty
(60) days after the effective date of the transaction, and provide such additional information as the Insurer
requires.
B.
Cessation of Subsidiaries
the Policy Period an Insured Entity ceases to be a Subsidiary then coverage for such
and
its
Insureds shall continue until termination or expiration of this Policy Period but only for
Subsidiary
Claims for Wrongful Acts prior to the date such entity ceased to be a Subsidiary.
If before
C.
or
during
Acquisition of Another Organization

If before or during the Policy Period the Insured Entity acquires the voting rights of another entity such that
the acquired entity becomes a Subsidiary, then coverage for such Subsidiary and its Insureds shall be
provided but only for Claims for Wrongful Acts after the date such entity became a Subsidiary.
If during the Policy Period the Insured Entity acquires another entity and at the time of such acquisition the
entity becomes a Subsidiary (or would have but for its absorption into the Insured) and the total revenue of
the acquired entity exceeded twenty five percent (25%) of the Insured Entity as of the beginning of the
Policy Period, then the Named Insured shall agree to any amendments to the terms of this Policy, including,
but not limited to, any additional premium the Insurer may require.
IX.
SUBROGATION
In the event of any payment under this Policy, the Insurer shall be subrogated to the extent of such payment to all
of the Insured's rights of recovery. The Insured shall execute and deliver instruments and papers and do
whatever else is necessary to secure such rights, including the execution of such documents necessary to enable
Form 904 1001
Ed. 01/14
Page
4 of 6
Document 1-3
4) Hanover
Filed 04/15/16
Page
8 of 95
Croup'
Common
Policy Terms
and Conditions
the Insurer to effectively bring suit or otherwise pursue subrogation rights in the name of the Insureds, and shall
do nothing to prejudice or compromise such rights without the Insurer's express written consent.
X.
OTHER INSURANCE
If other valid and collectible insurance (other than a policy that is issued specifically as excess of this Policy) is
available to the Insured for loss covered under this Policy, then the insurance provided by this Policy shall be
excess of such other insurance regardless of whether or not such insurance is primary, contributory, excess,
contingent or otherwise.
Xl.
TERRITORY
This
XII.
Policy will
terminate upon:
A.
Twenty (20) days after the receipt by the Named Insured of a written notice of termination from the Insurer
based upon nonpayment of premium, unless such premium is paid within such twenty (20) day period;
B.
Receipt by
the Insurer of written notice of termination from the Named Insured;
C.
Expiration
of the
D.
A date
agreed
Policy Period;
upon
by
or
the Insurer and the Named Insured.
BANKRUPTCY
Bankruptcy
XIV.
in the world.
TERMINATION OF POLICY
This
XIII.
Policy applies anywhere
of
an
Insured shall not relieve the Insurer of its
obligations
under this
Policy.
VALUATION AND FOREIGN CURRENCY

All premiums, Limits, Retentions, and other amounts are expressed and payable in the currency of the United
States of America. If a judgment is rendered, a settlement is denominated or another element of loss under this
Policy is stated in a currency other than the United States of America dollars, then payment under this Policy shall
be made in United States of America dollar equivalent determined by the rate of exchange published in the Wall
Street Journal on the date the judgment becomes final, the amount of the settlement is agreed upon or any
element of loss is due, respectively.
XV.
ROLE OF NAMED INSURED
By accepting this Policy, the Named Insured agrees that it is authorized to, and will act on behalf of all Insureds
with respect to any rights provided under this Policy and each Insured agrees that the Named Insured shall act
on its behalf with respect to all such matters.
Form 904 1001 Ed. 01/14
Page
5 of 6
Document 1-3
4Hanover
111, 1o, mcc
XVI.
Filed 04/15/16
Page
9 of 95
Cioup
Common
Policy Terms
and Conditions
TITLES AND HEADINGS

The titles and
headings
in this
Policy
are
solely
for convenience and form
no
part of the
terms and conditions of
coverage.
XVII.
CONFORMANCE TO LAW AND TRADE SANCTIONS

not apply to the extent trade, economic sanction, insurance or other laws or
the Insurer from providing insurance. The terms of this Policy which are in conflict with the
statutes of the state in which this Policy is issued are amended to conform to those statutes.
Coverage under this Policy does
regulations prohibit
XVIII.
NOTICE
A.
Notice to the Insurer of any Claim, Compliance Resolution Notice or circumstances under any Liability
Coverage Part or any notice under any Non-Liability Coverage Part shall be deemed notice under the
Policy in its entirety
B.
All notices to the Insurer under this Policy of any Claim, Compliance Resolution Notice or circumstances
under any Liability Coverage Part or notice under any Non-Liability Coverage Part shall be deemed notice
under the Policy in its entirety shall be given in writing to the Insurer at the address shown in Item 7. of the
XIX.
RESCINDABILITY
The Insurer shall not be entitled under any circumstances to void
Insured.
Form 904 1001 Ed. 01/14
or
rescind this
Policy
with respect to any
Page
6 of 6
Document 1-3
Filed 04/15/16
Hnover
Page
10 of 95
POLICYHOLDER NOTICE
U.S. TREASURY DEPARTMENT'S

OFFICE OF FOREIGN ASSETS CONTROL ("OFAC")
No coverage is provided by this policyholder notice nor can it be construed to replace any provisions of your
You should read your policy and review your Declarations page for complete information on the coverages
are
provided.
you
This notice provides information concerning possible impact on your insurance coverage due to directives issued
policy.
by
OFAC. Please read this notice
carefully.
The Office of Foreign Assets Control

Declarations of National Emergency.
("OFAC")
administers and enforces sanctions
policy, based
on
Presidential
OFAC has identified and listed numerous foreign agents, front organizations, terrorists, terrorists organizations,
and narcotic traffickers as "Specially Designated Nationals and Blocked Persons". This list can be located on the
United States Treasury's web site: http//www.treas.gov/ofac.
claiming the benefits of this insurance has violated United States sanctions law or is a Specially Designated
National and Blocked Person, as identified by OFAC, this insurance will be considered a blocked or frozen
contract and all provisions of this insurance are immediately subject to OFAC. When an insurance policy is
considered to be such a blocked or frozen contract, no payments nor premium refunds may be made without
authorization from OFAC.
Other limitations
on
the
premiums
Form 904 7100 PHN Ed. 01/14
and
payments also apply.
Panp 1 nf
Document 1-3
Filed 04/15/16
Ha nover
Page
11 of 95
POLICYHOLDER NOTICE
CUSTOMER NOTICE OF PRIVACY POLICY AND PRODUCER COMPENSATION

PRACTICES D1SCLOSURESPRIVACY POLICY DISCLOSURE
Collection of Information
We collect personal information so that we may offer quality products and services. This information may include, but is
not limited to, name, address, Social Security number, and consumer reports from consumer reporting agencies in
connection with your application for insurance or any renewal of insurance. For example, we may access driving records,
insurance scores or health information. Our information sources will differ depending on your state and/or the product or
service we are providing to you. This information may be collected directly from you and/or from affiliated companies, nonaffiliated third parties, consumer reporting agencies, medical providers and third parties such as the Medical Information
Bureau.
we partner with, may track some of the web pages you visit through cookies, pixel tagging or
other technologies. We currently do not process or comply with any web browser's "do not track" signals or similar
mechanisms that request us to take steps to disable online tracking. For additional information regarding online privacy,
please see our online privacy statement, located at www.hanover.com.
We, and the third parties
Disclosure of Information
We may disclose non-public, personal information you provide, as required to conduct our business and as permitted or
required by law. We may share information with our insurance company affiliates or with third parties that assist us in
processing and servicing your account. We also may share your information with regulatory or law enforcement agencies,
reinsurers and others, as permitted or required by law.
Our insurance companies may share information with their affiliates, but will not share information with non-affiliated third
parties who would use the information to market products or services to you.
Our standards for disclosure
Safeguards
apply
to all of
our
current and former customers.
to Protect Your Personal Information
We recognize the need to prevent unauthorized access to the information we collect, including information held in an
electronic format on our computer systems. We maintain physical, electronic and procedural safeguards intended to
protect the confidentiality and integrity of all non-public, personal information, including but not limited to social security
numbers, driver's license numbers and other personally identifiable information.
Internal Access to Information

Access to personal, non-public information is limited to those people who need the information to provide our customers
with products or services. These people are expected to protect this information from inappropriate access, disclosure and
modification.
Consumer Reports
In some cases, we may obtain a consumer report in connection with an application for insurance.
of policy, a consumer report may include information about you or your business, such as:
Depending
on
the
type
character, general reputation, personal characteristics, mode of living;

credit
an
history, driving record (including records
appraisal
of your
dwelling
or
place
-7-1111-
Form 904 7107 PHN Ed. 12/14
of any
operators who will be insured under the policy); and/or
of business that may include
photos and
comments
on
its
general
condition.
7r.7'7
Page
1 of 3
Document 1-3
Filed 04/15/16
Hanover
12 of 95
POLICYHOLDER NOTICE
v411111
11%1.1
Page
Access to Information
Upon written request, we will inform you if we have ordered an investigative consumer report. You have the right to make
written request within a reasonable period for information concerning the nature and scope of the report and to be
interviewed as part of its preparation. You may obtain a copy of the report from the reporting agency arid, under certain
circumstances, you may be entitled to
copy at
no
cost.
You also may review certain information we have about you or your business in our files. To review information we
maintain in our files about you or your business, please write to us, providing your complete name, address and policy
number(s), and indicating specifically what you would like to see. If you request actual copies of your file, there may be a
nominal
charge.
We will tell you to whom we have disclosed the information within the two years prior to your request. If there is not a
record indicating that the information was provided to another party, we will tell you to whom such information is normally
disclosed.
There is information that we cannot share with you. This may include information collected in order to evaluate a claim
under an insurance policy, when the possibility of a lawsuit exists. It may also include medical information that we would
have to forward to a licensed medical doctor of your choosing so that it may be properly explained.
Correction of Information
If after reviewing your file you believe information is incorrect, please write to the consumer reporting agency or to us,
whichever is applicable, explaining your position. The information in question will be investigated. If appropriate,
corrections will be made to your file and the parties to whom the incorrect information was disclosed, if any, will be
notified. However, if the investigation substantiates the information in the file, you will be notified of the reasons why the
file will not be changed. If you are not satisfied with the evaluation, you have the right to place a statement in the file
explaining why you believe the information is incorrect. We also will send a copy of your statement to the parties, if any, to
whom we previously disclosed the information and include it in any future disclosures.
Our Commitment to Privacy
In the insurance and financial services business, lasting relationships are built upon mutual respect and trust. With that in
we will periodically review and revise our privacy policy and procedures to ensure that we remain compliant with all
state and federal requirements. If any provision of our privacy policy is found to be non-compliant, then that provision will be
modified to reflect the appropriate state or federal requirement. If any modifications are made, all remaining provisions of this privacy
policy will remain in effect. For more detailed information about our customer privacy policy (including any applicable statespecific policies) and our online privacy statement, visit our Web site, located at www.hanover.com.
mind,
Further Information
If you have
questions about
our
customer
privacy policy (including any applicable state-specific policies)
or our
online
privacy statement, or if you would like to request information we have on file, please write to us at our Privacy Office,
N435, The Hanover Insurance Group, Inc., 440 Lincoln Street, Worcester, MA 01653. Please provide your complete
name, address and policy number(s). A copy of our Producer Compensation Disclosure is also available upon written
request addressed to the attention of the Corporate Secretary, N435, The Hanover Insurance Group, 440 Lincoln Street,
Worcester, MA 01653.
Producer
Compensation Disclosure
through independent agents and brokers, often referred to as "Producers." We may pay Producers
placing and renewing business with our company. We may also pay additional commission and
other forms of compensation and incentives to Producers who place and maintain their business with us. Details of our
Producer compensation practices may be found at www.hanover.com.
Our
a
products
are
sold
fixed commission for
wmantz:. :77,,..
Form 904 7107 PHN Ed. 12/14
z':":., :"1.122,1.,TEZINISSffligaleMaga4
Page
2 of 3
4Ha'
nover
4'01
I,
It1111
Document 1-3
Filed 04/15/16
Page
13 of 95
POLICYHOLDER NOTICE
This notice is being provided on behalf of the following Hanover Companies: The Hanover Insurance Group, Inc.
Allmerica Plus
Allmerica Financial Benefit Insurance Company
Allmerica Financial Alliance Insurance Company
Citizens
Citizens Insurance Company of Illinois
Citizens Insurance Company of America
Insurance Agency, Inc.
AIX Ins.
Citizens Management, Inc.
Citizens Insurance Company of Ohio
Insurance Company of the Midwest
Campmed Casualty & Indemnity Co. Inc. Chaucer
Services of California, Inc.- Campania Insurance Agency Co. Inc.
The Hanover
Syndicates Limited- Educators Insurance Agency, Inc.- Hanover Specialty Insurance Brokers, Inc.
American Insurance Company The Hanover Insurance Company The Hanover New Jersey Insurance Company The
Hanover National Insurance Company Hanover Lloyd's Insurance Company Massachusetts Bay Insurance Company
Opus Investment Management, Inc. Professionals Direct Insurance Services, Inc. -Professional Underwriters Agency,
Inc. Verlan Fire Insurance Company Nova Casualty Company AIX Specialty Insurance Company.
Form 904 7107 PHN Ed. 12/14
Page
3 of 3
Document 1-3
Filed 04/15/16
Page
14 of 95
_....1
Coverage
Part: Common
Policy Terms
Issued To: Vemma International
Issued
Endorsement Number: 1
and Conditions
Holdings,
Policy Number:
Inc
LH4-8827059-07
Effective Date: 08/01/2015
By: Hanover Insurance Company
SCHEDULE OF FORMS
To be attached to and form part of the

Common
Policy
01/14
01/14
904-7107 PHN
904-1025
904-6001
12/14
01/14
01/14
01/14
Private Company Advantage Policy Declarations

Common Policy Terms and Conditions
U.S. Treasury Department's Office Of Foreign Assets Control ("OFAC") Advisory Notice
To
905-1002
905-1001
905-7201 PHN
905-7203 PHN
905-7205
905-4030
905-5076
01/14
01/14
01/14
01/14
01/15
01/14
01/15
Practices
906-1002
906-1001
906-7111 PHN
906-1116
906-1149
and Producer Compensation Practices

Schedule of Forms
Arizona State Amendatory Endorsement
01/14
01/14
01/14
01/14
01/14
Coverage
01/14
01/14
Disclosures-Privacy
Disclosure
Liability Coverage Part
Directors & Officers and Entity Liability Coverage Part Declarations

Directors & Officers and Entity Liability Coverage Part
Notice to Policyholder Terrorism Coverage Acceptance
Disclosure of Premium Amount Acceptance of Terrorism Coverage
Policyholder Disclosure Notice Pursuant to the Terrorism Risk Insurance ACT
Products and Services Liability Exclusion
Cap on Losses from Certified Acts of Terrorism Endorsement
Liability Coverage

907-1002
907-1001
Policyholders
Privacy Policy
Directors & Officers and Entity
Crime
Number listed above.
904-1002
904-1001
904-7100 PHN
Employment
Policy
Part
Employment Practices Liability Coverage Part Declarations

Employment Practices Liability Coverage Part
Important Policyholder Information Employment Practices Risk Management
Wage & Hour Claims Defense Expense Sublimit
Immigration Investigation Defense Expense Sublimit
Hotline
Part

Part Declarations
Part
Part
01/14 Crime Coverage Part Declarations

01/14 Crime Coverage Part
All other terms and conditions remain unchanged. The title and any
convenience and form no part of the terms and conditions of coverage.
908-1002
908-1001
:.E''f,fffilMlitiffelZfl'r:'.
Form 904 1025 Ed. 01/14
headings
in this endorsement
:-""'''";MatiffMrStriz169Mt."2^,.
are
solely
for
-.1Erlit1MM
Page
1 of 2
Document 1-3
Filed 04/15/16
Page
15 of 95
Hnover
c.,,
Coverage
Part: Common
Policy Terms
Issued
By:
Hanover Insurance
05/15
MANU
Kidnap
& Ransom
909-1002
909-1001
909-7111 PHN
Holdings,
Policy Number: LH4-8827059-07
Inc
Company
False Pretenses
Coverage
01/14
01/14
01/14
and Conditions
Coverage
Part
Kidnap & Ransom Coverage Part Declarations

Important Policyholder Information Kidnap Response and Risk Management
Resources
Form 904 1025 Ed. 01/14
headings
in this endorsement
are
solely
Page
for
2 of 2
Document 1-3
Filed 04/15/16
Page
16 of 95
Hanover
Coverage
Endorsement
Part: Common
Policy

Issued
Holdings,
Inc
By: Hanover Insurance Company
ARIZONA STATE AMENDATORY ENDORSEMENT
In consideration of the
premium charged
Section XII. Termination of
XII.
TERMINATION
A.
This
1.
Policy
agreed
is deleted and
that:
replaced by:
RENEWAL OF POLICY
Policy will
Ten
it is
terminate upon:
(10) days
after the
receipt by
the Named Insured of
written notice of termination from the
insurer, based upon nonpayment of premium, unless such premium is paid within such ten (10)
day period;
2.
Forty five (45) days after the receipt by the Named Insured of a written notice of termination from
the Insurer in any other circumstance, if this Policy has been in effect for less than sixty (60) days
and is not a renewal of a policy the Insurer issued;
3.
Forty five (45) days after the receipt by the Named Insured of a written notice of termination from
the Insurer, if this Policy has been in effect for sixty (60) days or more, or is a renewal of a policy
the Insurer issued, for only one or more of the following reasons:
a.
Nonpayment of premium, with ten

within such ten (10) day period;
(10) days
b.
Conviction of
Named Insured for
crime
written notice, unless such
arising
out of acts
premium is paid
increasing the
hazard insured
against;
c.
omissions by the Insured or his

in obtaining this Policy, in
under this Policy;
Acts
or
misrepresentation
d.
A substantial change in the risk assumed, except to the extent that the Insurer should
reasonably have foreseen the change or contemplated the risk in writing this contract;
e.
f.
Loss of reinsurance applicable to the risk insured against, but only if the absence of
reinsurance has resulted from termination of treaty or facultative reinsurance initiated or
implemented by the reinsurer or reinsurers of the Insurer issuing the Policy;
g.
Acts or omissions by the Insured

insured against; or
or
his
or
conditions;
representative
Form 904 6001
representative constituting fraud or material

continuing this Policy or in presenting a Claim
Ed. 01/14
headings
which
materially increase the hazard
in this endorsement
are
solely
Page
for
1 of 2
Document 1-3
Filed 04/15/16
Page
17 of 95
r-ir., 'Hanover
Coverage
Endorsement
Part: Common
Policy Terms

Issued
Hanover Insurance
By:
h.
and Conditions
Holdings,
Policy
Inc
Number: LH4-8827059-07
Company
A determination by the Director of Insurance that the continuation of this Policy would place
the Insurer in violation of the insurance laws of Arizona or would jeopardize the solvency of
the Insurer.
4.
Receipt by the Insurer of written notice
5.
Expiration of the Policy Period;
6.
A date
agreed
upon
by
of termination from the Named Insured;
or
the Insurer and the Named Insured.
Notices of termination will be mailed by certified mail to the Named Insured's last known address
with a copy of such notice mailed to the agent of record. Notice will state the specific reasons(s) for
termination and be accompanied by a refund of unearned premium, except a premium that has been
financed.
B.
This Policy may be non-renewed by the Insurer by sending written notice to the Named Insured's
last known address by certified mail, with a copy of such notice mailed to the agent of record at least
forty five (45) days prior to the expiration of the Policy Period. If the notice of nonrenewal is mailed
less than forty five (45) days before expiration, coverage shall remain in effect until forty five (45) days
after the notice is mailed. Earned premium for any period of coverage that extends beyond the
expiration date shall be considered pro rata based upon the previous year's rate.
C.
The Insurer shall mail or deliver to the Named Insured at the mailing address shown on the Policy,
written notice of premium increase, change in deductible or reduction in limits or substantial reduction
in coverage at least thirty (30) days before the expiration date of the Policy. If the Insurer fails to
provide the thirty (30) day notice, the coverage provided remains in effect until notice is given or until
the effective date of replacement coverage obtained by the Named Insured, whichever occurs first.
If the Named Insured elects not to renew, any earned premium for the period of extension of the
terminated policy shall be calculated pro rata at the lower of the current or previous year's rate. If the
Named Insured accepts the renewal, the premium increase, if any, and other changes are effective
the day following the prior policy's expiration or anniversary date.
Form 904 6001
Ed. 01/14
headings
in this endorsement
are
solely
Page
for
2 of 2
Page
18 of 95
!--rivate 1,, ..crnpany
A Hanover
Li
Filed 04/15/16
Document 1-3
ii,
A:
1:--,f,
_---ni, ge
Entity Liability
Coverage Part
I.
NOTICE: THIS COVERAGE PART IS WRITTEN ON A CLAIMS-MADE BASIS. SUBJECT TO ITS TERMS, THIS
COVERAGE PART APPLIES ONLY TO CLAIMS FIRST MADE AGAINST THE INSUREDS DURING THE POLICY
THE LIMITS OF LIABILITY CAN BE
PERIOD OR ANY APPLICABLE EXTENDED REPORTING PERIOD.
COMPLETELY EXHAUSTED BY DEFENSE EXPENSES AND DEFENSE EXPENSES WILL BE APPLIED AGAINST THE
RETENTION. THE INSURER WILL HAVE NO LIABILITY FOR DEFENSE EXPENSES OR THE AMOUNT OF ANY
JUDGMENT OR SETTLEMENT IN EXCESS OF THE APPLICABLE LIMIT OF LIABILITY.
Policy Number
LH4-8827059-07
Company
440 Lincoln Street
(A
Item 1.
Stock Insurance
Company,
herein called the
NAMED INSURED

Item 2.
POLICY PERIOD
Inception Date: 08/01/2015 Expiration Date: 08/01/2016

(12:01
Item 3.
1)
LIMITS OF LIABILITY FOR THIS COVERAGE PART

Maximum
Aggregate
Limit of
Liability:
Additional Limit of Liability for Executives:

Security Holder Derivative Demand Investigations Limit:
Item 4.
$5, 000, 000

$500, 000
$250, 000
RETENTIONS
Insuring Agreement I. A.
Insuring Agreement
$0
Liability
I. B.
Liability
Insuring Agreement I. C.
Security Holder
Coverage
Derivative Demand
$50, 000
each Claim
$50, 000
each Claim
Investigation
$10, 000 each Claim
Insurer)
Document 1-3
Filed 04/15/16
t EN
pri \.f;
(...t. Finover
Crzmq,
Item 5.
i,,
Cr
4.....4
0 m r,
N.,:
1.-:,
i
A dli.C.
Is
Entity Liability
Coverage Part
PRIOR & PENDING PROCEEDINGS DATES
Insuring Agreement
05/01/2005
05/01/2005
I. C.

100%
Percentage of Annualized Premium:
12
Additional Period:
Item 7.
19 of 95
.f.111,
Insuring Agreement I. A. and I. B.
Item 6.
Page
$17, 344.00
PREMIUM FOR COVERAGE PART
We have caused this
Policy
to be

signed by
Frederick H. Eppinger, President
Months
countersigned where required by
Charles F. Cronin,
Secretary
duly
Document 1-3
4Ha'nover
111, 111-m1o:
Filed 04/15/16
Page
Crimp'
20 of 95
Entity Liability
Coverage Part
VINIUMettfiliti
lnsu reds agree
as
follows:
INSURING AGREEMENTS
A.
Liability
behalf of each Insured Individual, Loss which the Insured Individual is legally
The Insurer will pay
obligated to pay due to a Claim first made against the Insured Individual during the Policy Period, or the
Extended Reporting Period if applicable, except for Loss which the Insured Entity pays to or on behalf of the
Insured Individual as indemnification.
on
B.
Liability
The Insurer will pay on behalf of the Insured Entity, Loss which the Insured Individual is legally obligated to
pay due to a Claim first made against the Insured Individual during the Policy Period, or the Extended
Reporting Period if applicable, but only to the extent the Insured Entity indemnifies the Insured Individual for
such Loss.
C.
Corporate Entity LiabilitV
The Insurer will pay on behalf of an Insured

due to a Claim first made against the Insured
if
Entity, Loss which the Insured Entity is legally obligated

Entity during the Policy Period, or the Extended Reporting
to pay
Period
applicable.
D.
Security
Holder Derivative Demand Investigation Coverage
The Insurer will pay Investigative Costs on behalf of the Insured Entity resulting from any Security Holder
Derivative Demand first made during the Policy Period, or the Extended Reporting Period if applicable, in
connection with the investigation or evaluation of any Security Holder Derivative Demand to determine whether
it is in the best interest of the Insured Entity to prosecute the claims alleged in a Security Holder Derivative
Demand,

A.
If the Insurer or the Named Insured terminates or does not renew this Coverage Part, other than termination
by the Insurer for nonpayment of premium, then the Named Insured shall have the right to purchase an
Extended Reporting Period for the period set forth in Item 6. of the D&O Declarations beginning on the
effective date of the termination or non-renewal of this Coverage Part. The Named Insured must provide a
written request for the Extended Reporting Period including payment of the additional premium, as set forth in
Item 6. of the D&O Declarations, within thirty (30) days following the effective date of the termination or nonrenewal of this Coverage Part. Additional premium paid shall be deemed fully earned as of the first day of the
Extended Reporting Period and the Extended Reporting Period may not be cancelled.
B.
If an Extended Reporting Period is purchased, then coverage as provided by this Coverage Part shall be
extended to Claims first made during such Extended Reporting Period and reported pursuant to Section IX.
Reporting of this Coverage Part, but only if such Claims are for Wrongful Acts which occurred entirely prior
to the effective date of the termination or non-renewal of this Coverage Part.
.1141!;TX
Form 905 1001 Ed. 01/14
Page
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III.
Filed 04/15/16
Document 1-3
21 of 95
Page
Entity Liability
Coverage Part
DEFINITIONS
Claim
A.
means:
With respect to
I.A. and I.B., any:
Insuring Agreements
1.
Written demand received
2.
Civil
3.
Criminal
4.
Formal administrative or regulatory

order or similar document;
5.
Arbitration or mediation
similar document; or
6.
Official request for Extradition;
against
proceeding
an
by
an
commenced
proceeding
by
Insured for monetary

the service of
commenced
by
the
non-monetary relief including injunctive relief;
or
complaint
or
pleading;
similar
filing of charges;
proceeding
commenced
by the filing
of
proceeding commenced by the receipt of a demand
Insured Individual for
charges,
formal
for arbitration
investigative
mediation
or
or
Wrongful Act, including any appeal therefrom;
7.
Service of a subpoena on an Insured Individual identified by name pursuant to a civil, criminal,

administrative or regulatory investigation, including when such Insured Individual is served with a target
letter or similar document; or
8.
Written request first received by an Insured to toll

Claim described in A.1. through A.7. above;
or
waive
statute of limitations
relating
to
potential
B.
With respect to Insuring Agreement I.A. and solely for Defense Expenses, any subpoena or other similar
written request served on an Insured Individual compelling witness testimony or document production in
connection with the matters described in A.1. through A.7. above or with any equivalent action against an
Insured Entity or Outside Entity.
C.
With respect to
any:
1.
2.
Civil
3.
Criminal proceeding commenced by the filing of
charges;
4.

order or similar document; or
proceeding
commenced
5.
similar document;
commenced
against
6.
an
proceeding
Insured
by
an
commenced
Entity for
by the service
proceeding
of
or
complaint
by
the
or
similar
by
the
receipt of
pleading;
filing
or
waive
charges,
formal
demand for arbitration
Wrongful Act, including any appeal therefrom;

Claim described in C.1. through C.5. above;
of
or
investigative
mediation
or
or
relating
to
potential
the reasonable and necessary legal fees and expenses including attorney fees and
or the Insured (other than regular or overtime wages, salaries, fees or
benefits of Insured Individuals) in the investigation, defense, settlement and appeal of a Claim, including but not
limited to cost of consultants and witnesses, premiums for appeal, injunction, attachment or supersedeas bonds
regarding such Claim.
Defense
Expenses
means
expert fees incurred by the Insurer
Extradition means any formal process initiated by a local, state or national government against an Insured
Individual to compel the Insured Individual to appear for trial or otherwise answer any criminal accusation.
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Entity Liability
Coverage Part
Insured Individual means any past, present or future Executive or employee (including part-time, seasonal,
leased or temporary employees), intern or volunteer of the Insured Entity while acting solely within his or her
capacity as such on behalf of the Insured Entity or in an Outside Capacity.
Insured
means
any Insured Individual
Insured
or
Entity.
Investigative Costs means reasonable and necessary costs, charges, fees, including but not limited to attorneys
experts' fees, and expenses (other than regular or overtime wages, salaries, fees or benefits of Insured
Individuals) incurred by the Insured Entity.
and
Loss
means
Defense
Expenses
and the amount the Insured is
legally obligated
to pay
as a
result of
Claim
including:
A.
Monetary judgments,
damages;
B.
Punitive
or
law of the
substantial
C.
awards
or
settlements, pre-judgment and post-judgment interest and compensatory
exemplary damages or the multiple portion of any multiplied damage award if insurable under the
jurisdiction most favorable to the insurability of such damages where such jurisdiction has a
relationship to the Insured, the Insurer, or to the Claim giving rise to such damages; or
Civil fines or penalties assessed against an Insured Individual, including civil penalties assessed against an
Insured Individual pursuant to the Foreign Corrupt Practices Act (15 U.S.C. 78dd-2(g)(2)(B)), if and to the
extent such fines or penalties are insurable under the law of the jurisdiction in which such fines and penalties
are assessed.
However, Loss does not include:

Insured is
1,
Any
amounts which
2.
Any
amount deemed uninsurable
3.
Taxes, except
obligated to pay
non-monetary damages including injunctive relief;
conservatorship
tax
or
an
of
result of
Claim
seeking
relief
redress for
or
by law;
imposed upon
liquidation
as a
an
Insured Individual in connection with the

Insured Entity but only if:
an
a.
Such tax is insurable under the law pursuant to which this
b.
An Insured Individual is not indemnified for such tax
Coverage
by
an
bankruptcy, receivership,
Part is construed; and
Insured
Entity
or
any other person
or
organization.
4.
Costs (other than costs arising from a Security Holder Derivative Demand) incurred by
Insured in the defense or investigation of any action, proceeding or demand that was not a Claim
even if such amount also benefits the defense of a covered Claim or such action, proceeding or demand
that subsequently gives rise to a Claim;
Investigative
an
amount which represents or is substantially equivalent to an increase in the consideration

Insured Entity in connection with its purchase of any securities or assets; or
5.
Any
6.
Any amount not indemnified by the Insured Entity for which

payment by reason of any covenant, agreement or court order.
an
paid by
an
Insured Individual is absolved from
Capacity means service by an Insured Individual as any director, officer, trustee, regent, governor,
manager or member of the Board of Managers including any equivalent executive position of any of the foregoing,
in an Outside Entity, but solely during the time that such service is with the knowledge and express consent of
an Insured Entity.
Outside
Outside
A.
Entity
means:
Any nonprofit entity described in sections 501(c)3; 501(c)4; 501(c)7; 501(c)10 of the Internal Revenue Code
of 1986, as amended; or
Form 905 1001 Ed. 01/14
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(4i.)-Hanover
Inqirdno:
B.
Any
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other
Filed 04/15/16
entity, partnership, joint venture
or
organization
scheduled
by
23 of 95
Entity Liability
Coverage Part
endorsement to this
Policy
Period means the period of time from the inception date shown in Item 2. of the D&O Declarations to the
earlier of the expiration date shown in Item 2, of the D&O Declarations or the effective date of termination of this
Policy or Coverage Part.
Policy
Professional Services
emolument.
means
any service
performed
for others whether
or
not for
fee, consideration
or
other
Related Claims means all Claims based upon, arising from or in any way related to the same facts,
circumstances, situations, transactions, results, damages or events or the same series of facts, circumstances,
situations, transactions, results, damage, or events.
Acts
Wrongful
Acts which
logically
causally
Related
Wrongful
common
fact, circumstance, situation, transaction, casualty, event, result, injury
means
are
or
or
connected
decision.
by
reason
of any
the Securities Act of 1933; Securities Exchange Act of 1934; Investment Act of 1940; any
or any other federal, state or local securities law including amendments thereto;
and any similar federal, state, local or common law, including any rules and regulations promulgated under it.
Security
Law
state "Blue
any Claim brought on behalf of, or in the name or the right of the
holders of the Insured Entity in their capacity as such, if any Claim is
and maintained without the assistance, participation or solicitation of any Executive.
Holder Derivative Action
Security
Insured
brought
means
SkY' securities law
Entity by
one or more
means
security
Security Holder Derivative Claim means any Claim brought on behalf of an Insured Entity by one or more
security holders of the Insured Entity in their capacity as such but only if such Claim is brought without the
or
solicitation of any Executive, member of the board of directors
or
board of managers
including any equivalent position thereof.
Security Holder Derivative Demand means any written demand by one or more security holders of an Insured
Entity without the assistance, participation or solicitation of any Executive, upon the board of directors or board
of managers of such Insured Entity, to bring a civil proceeding in a court of law against any Executive for a
Wrongful Act by an Executive.
Wrongful
breach of
or alleged act, error, omission, misstatement, misleading statement, neglect,

attempted, or allegedly committed or attempted by:
Act means any actual
duty committed
or
A.
With respect to Insuring Agreements I.A. and I.B, an Insured Individual in his or her capacity
other matter claimed against an Insured Individual solely in his or her status as such; or
B.
With respect to
an
Insured
as
such
or
any
Entity.
All Related Wrongful Acts shall be considered a single Wrongful Act and all Related Wrongful Acts will be
deemed to have occurred at the time the first of such Related Wrongful Acts occurred whether prior to or during
the Policy Period.
IV.
EXCLUSIONS
A.
Exclusions Applicable to All Insuring Agreements

1.
apply to
Loss for any Claim:
Prior Notice
Based upon, arising out of or in any way related to any Claim, Wrongful Act, investigation, proceeding,
act, event, transaction, decision, fact, circumstance or situation which has been the subject of any notice
accepted under any similar policy of which this Policy is a direct or indirect renewal or replacement.
Form 905 1001 Ed. 01/14
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Entity Liability
Coverage Part
Prior & Pending Proceedings
Based upon, arising out of or in any way related to any litigation, administrative or arbitration proceeding,
written demand pending against any Insured, or any order, decree or judgment entered prior to or on the
Prior & Pending Proceedings Date set forth in Item 5. of the D&O Declarations.
3.
Conduct
arising
Based upon,
a.
or
Any deliberate, dishonest, fraudulent

Insured;
an
b.
out of
act
or
omission,
or
willful violation of any statute
or
regulation by
or
An Insured
any profit, remuneration
gaining
or
advantage
to which such Insured
legally
not
was
entitled;
However, this exclusion shall not apply to Defense Expenses unless and until
judgment
adjudication
or
in any
underlying proceeding
or
act or omission, violation of statute or regulation

advantage to which the Insured was not legally entitled.
such
4.
an
Bodily Injury
or
or
gained
such
final, non-appealable
action establishes that
an
Insured committed
profit, remuneration
or
Property Damage
to or destruction of any tangible property, including loss of use of that property and
of property that is not physically damaged; or for bodily injury, mental anguish, humiliation,
emotional distress, disability, sickness, disease, death, assault or battery sustained by any individual.
5.
For the
physical injury
loss of
use
ERISA
For any actual or alleged violation of the responsibilities, obligations or duties imposed by the Employee
Retirement Income Security Act of 1974, the English Pension Scheme Act 1993 or the English Pensions
Act 1995, including amendments relating to the Consolidated Omnibus Budget Reconciliation Act of 1985
and the Health Insurance Portability and Accountability Act of 1996, all as amended, and any similar
federal, state, local or common law or statutory law anywhere in the world, including any rules and
regulations promulgated thereunder.
6.
Insured
Brought by
a.
Insured
vs.
or on
behalf of any Insured, however this exclusion does not
apply to:
Any Claim:
1)
Made and maintained independently of and without the

intervention of any Executive;
2)
Brought by an Insured Individual for contribution

another Claim covered under this Policy;
3)
For
4)
employment related Wrongful
Brought by an employee,
Entity;
Acts
other than
an
against
or
an
solicitation, assistance, participation
indemnity,
if such Claim
or
results from
directly
Insured Individual;
shareholder of
Executive, in his
or
her
capacity
as a
his
or
her
capacity
as an
an
Insured
5)
6)
b.
Brought by
an
least three
(3)
Brought by
Individual;
or
Executive who has ceased
serving in
Executive for at
years;
whistle blower pursuant to any federal, state, local
Any Claim brought by
an
Insured
Entity against
an
or
foreign
Insured Individual of
law
an
against
Insured
an
Insured
Entity when
such Claim is:
Form 905 1001 Ed. 01/14
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tklanover
Page
Security Holder
Derivative Demand
Security Holder
Derivative Claim;
1)
2)
Brought and maintained solely outside the United States of America
3)
Brought by
4)
or
receiver, liquidator, bankruptcy trustee

in its
Brought by the Insured Entity

bankruptcy law or the equivalent of
25 of 95
Entity Liability
Coverage Part
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7.
Filed 04/15/16
Document 1-3
or
Canada;
similar official of the Insured
or
Entity;
capacity as a debtor in possession under the United States

debtor in possession under the law of any other country.
Public Securities
Based upon, arising out of or in any way related to
provided that this exclusion shall not apply to Loss:
an
actual
or
alleged
violation of any
Security Law,
transaction or series of transactions that are exempt from registration under the Securities Act of
1933 including any amendments thereto or any rules or regulations promulgated thereunder;
a.
Arising from a Claim brought by any security holder of the Insured Entity for the failure of the
Insured Entity to undertake or complete an initial public offering or sale of securities of the Insured
Entity; or
b.
For any Wrongful Act relating to an Insured Entity's preparation for any public offering including
any road show presentation to potential investors or other similar presentation made by the Insured
Entity and its Executives in connection with such public offering but only if such offering does not
c.
occur.
8.
Outside Entity
Brought
maintained
by,
at the
behest,
or on
behalf of:
An Outside Entity against an Insured Individual acting in an Outside Capacity at the time the
Claim is first made, except with respect to a Security Holder Derivative Claim; or
a.
present, or future director, officer, manager, trustee, governor or equivalent Executive of the
Outside Entity against an Insured Individual acting in an Outside Capacity at the time the Claim is
first made, except with respect to a Claim for contribution or indemnity if such Claim would be
covered under this Policy.
A past,
b.
B.
or
Exclusions Applicable to insuring Agreement C. Corporate Entity

1.
apply
Liability, Only
Contract
Based upon, arising out of or in any way related to liability assumed through, or on account of, any oral or
written contract or agreement to which an Insured is a party, however this exclusion shall not apply to
liability that would have attached in the absence of such contract or agreement.
2.
3.
Personal Injury
a.
For defamation of character, libel, slander,

of privacy;
b.
For the
c.
For false arrest,

process.
wrongful entry
wrongful
or
detention
publication
other invasion of the

or
of material in violation of
right
of
privacy;
an
individual's
right
or
imprisonment, malicious prosecution, malicious
use or
abuse of
Antitrust
Based upon,
Form 905 1001
eviction
or
or
Ed. 01/14
arising
out of
or
in any way related to actual
or
alleged price fixing, price discrimination,
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Entity Liability
Coverage Part
restraint of trade, unfair business practices, monopolistic practices or any actual or alleged violations of
the Sherman Antitrust Act of 1890, the Clayton Act of 1914, and any amendments thereto, the Robinson
Patman Act of 1938, the Federal Trade Commission Act of 1914 or any rules or regulations promulgated
in connection with such statutes, or similar provisions of any federal, state or local statutory law or
common law anywhere in the world.
4.
Employment Practices
arising
Based upon,
in any way related to any past,
or
a.
Employment relationship including
b.
Discrimination
c.
5.
out of
against
an
present
or
future actual
or
potential:
employment-related Wrongful Act;
sexual harassment of any third party;
or
Violation of federal, state, local

or
foreign
wage and hour laws,
including,
without limitation, the Fair
Professional Services
out of or in any way related to the performance, provision or rendering of
However this exclusion shall not apply to Loss arising from any securities
Holder Derivative Demand or Security Holder Derivative Action.
arising
Based upon,
Professional Services.
Claim, Security
6.
Product Defect
product or failure of any

result of any defect, deficiency, inadequacy or dangerous
in its design or manufacture. However this exclusion shall not apply to Loss
condition in
arising from any securities Claim, Security Holder Derivative Demand or Security Holder Derivative
Action.
arising out of
perform in any
such product or
Based upon,
product
7.
to
or
in any way related to any malfunction of any
manner as
Intellectual Property
Based upon,
arising
out of
or
in any way related to
patent, trademark, service mark, trade
plagiarism
or
the
infringement
or
violation of
copyright,
name, trade secret or any other intellectual property rights.

to Loss arising from any securities Claim, Security Holder
However this exclusion shall not apply

Derivative Demand or Security Holder Derivative Action.
V.
SEVERABILITY OF EXCLUSIONS
No conduct pertaining to any Insured Individual shall be imputed to any other Insured Individual for the
purpose of determining the applicability of these exclusions. Any conduct pertaining to any past, present or future
Executive of an Insured Entity shall be imputed to such Insured Entity and its Subsidiaries.
VI.
DEFENSE AND SETTLEMENT OF CLAIMS

A.
The Insurer shall have the exclusive right and duty to defend any Claim covered by this Coverage Part even
if any allegation of such Claim is groundless, false or fraudulent. However, if an Insured is entitled under
applicable law to select defense counsel, then such defense counsel shall comply with the Insurer's
customary rates and litigation guidelines regarding billing, staffing and reporting. The Insurer has no duty to
defend any Claim or pay Defense Expenses for Claims to which this insurance does not apply.
B.
The right and duty to defend any Claim covered under this Policy shall
Limit of Liability in Item 3. of the D&O Declarations or the Combined
Form 905 1001
Ed. 01/14
cease
when the Maximum

Limit of
Policy Aggregate
Aggregate
Liability
Page
in
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VII.
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Page
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ltern 3. of the
Document 1-3
Policy Declarations
has been exhausted
by
the
payment
27 of 95
Entity Liability
Coverage Part
of Loss.
with the Insurer in the
C.
The Insureds shall provide all information in connection with any Claim and
investigation, defense and settlement of any Claim.
D.
No Insured shall settle any Claim, voluntarily make any

expense related to a Claim without the Insurer's consent.
E.
The Insurer may make any investigation it deems necessary and settle any Claim subject to the Named
Insured's written consent to settle which shall not be unreasonably withheld. If any Insured refuses to
consent to the settlement of any Claim which the Insurer recommends and which is acceptable to the
claimant, subject to the applicable Limit of Liability or Retention, the Insurer's liability for all Loss from such
Claim shall not exceed:
payment,
The amount the Insurer would have contributed to the settlement

up to the date of such refusal; and
2.
Eighty percent (80%)
excess
any
assume
1.
of such Loss in
cooperate
including
obligation,
Defense
or
incur any
Expenses incurred
of the amount for which the Claim would have been settled.
F.
The Insurer shall not seek repayment from an Insured Individual of any Defense Expenses paid by the
Insurer that are deemed uninsured pursuant to Exclusion IV. A.3. Conduct, unless the applicable
determination standard set forth in such exclusion has been met.
G.
If the Insurer is prevented by law or otherwise unable to defend or investigate a Claim brought outside the
United States, the Insured under the Insurer's supervision may arrange for the investigation, appointment of
counsel and defense of such Claim. Subject to the applicable Limit of Liability and retention, we will
reimburse the Insured for any reasonable and necessary Defense Expenses for such Claim.
LIMIT OF LIABILITY
of the number of Insureds, Claims,
follows:
Regardless
limited
as
or
claimants the Insurer's
liability
under this
Coverage Part is
A.
If the Combined Policy Aggregate Limit of Liability in Item 3. of the Policy Declarations is elected, the
under this Coverage Part, shall not exceed the Maximum Aggregate Limit of Liability stated in Item 3. of the
D&O Declarations or the unpaid portion of the Combined Policy Aggregate Limit of Liability stated in Item 3. of
the Policy Declarations, whichever is less.
B.
D&O Declarations.
C.
The Insurer's maximum limit of liability for all Investigative Costs during the Policy Period will be the
Security Holder Derivative Demand Investigations Limit stated in Item 3. of the D&O Declarations which
amount is part of, and not in addition to the Maximum Aggregate Limit of Liability stated in Item 3. of the D&O
Declarations.
D.
Additional Limit of Liability for Executives

1.
The Additional Limit of Liability for Executives stated in Item 3. of the D&O Declarations, shall be an
additional aggregate Limit of Liability, in addition to and not part of, the Maximum Aggregate Limit of
Liability as set forth in Item 3. of the D&O Declarations.
2.
The Additional Limit of
Form 905 1001 Ed. 01/14
Liability
for Executives is available
solely
for Loss
arising from any
Claim
Page
against
8 of 11
Document 1-3
any Executive covered under
VIII.
IX.
Page
croup,
3.
Filed 04/15/16
Insuring Agreement
28 of 95
Entity Liability
Coverage Part
I. A. of this Coverage Part.
The Additional Limit of Liability for Executives shall be excess of any insurance available that is
specifically excess to this Policy, and such excess insurance must be completely exhausted by payment
of Loss thereunder before we shall have any obligation to make any payment on account of the
Additional Limit of Liability for Executives.
RETENTION
A.
The Insurer's liability under this Coverage Part applies only to that part of covered Loss which is in excess of
the applicable Retentions stated in Item 4. of the D&O Declarations. Such Retentions shall be considered
uninsured amounts and borne by the Insureds at their own risk.
B.
parts of
Retentions will be
exceed the largest
If different
subject to different Retentions in different Insuring Agreements the applicable

applied separately to each part of such Claim but the sum of such Retentions shall not
applicable Retention.
a
Claim
are
REPORTING
A.
An Insured shall provide the Insurer with written notice as soon as practicable after the Chief Executive
Officer, Chief Financial Officer, President, In-House General Counsel or any person with the responsibility for
the management of insurance claims, or any equivalent position, of an Insured Entity becomes aware of a
Claim, but in no event later than:
1.
2.
Ninety (90) days

The
after the effective date of
expiration
or
expiration date of the Extended Reporting Period,
termination;
if
or
applicable.
However if the Insurer sends written notice to the Named Insured stating that this Policy is being terminated
for nonpayment of premium, an Insured shall give the Insurer written notice of such Claim prior to the
effective date of such termination.
B.
If during the Policy Period, or an applicable Extended Reporting Period, an Insured becomes aware of an
act or circumstances that may subsequently give rise to a Claim and gives the Insurer notice of such act or
circumstances, then any Claim subsequently arising from such circumstances shall be deemed made against
the Insured during the Policy Period in which the circumstances were first reported to, and accepted by, the
Insurer provided that any such subsequent Claim is reported to the Insurer in accordance with paragraph A.
above.
X.
give to the Insurer the assistance, information and cooperation as the Insurer may require
and shall include in any notice of a Claim, or circumstances of a potential Claim, a description of the Claim or
circumstances, the nature of the alleged Wrongful Act, the nature and amount of alleged or potential
damage, the names of actual or potential claimants, and the manner in which the Insured first became aware
of the Claim, circumstances or alleged Wrongful Act.
C.
An Insured must
D.
Notice of a Claim or
potential Claim,
must be
provided
in
writing
to the addresses stated in Item 7. of the
ALLOCATION
If
an
Insured incurs Loss
on
account of any Claim and such Claim includes both covered and non-covered
eaavossumesad
Form 905 1001 Ed. 01/14
Page
9 of 11
4Hanover
Gump-
Document 1-3
Filed 04/15/16
Page
matters, coverage with respect to such Claim shall apply
as
29 of 95
Entity Liability
Coverage Part
follows:
A.
One hundred percent (100%) of Defense Expenses on account of the Claim will be considered covered
Loss provided that this shall not apply to any Insured for whom coverage is excluded pursuant to Exclusion
IV. B. 4. Employment Practices or Section XIV. B. Representations and Severability; and
B.
The Insurer shall fairly allocate all remaining loss that an Insured incurred on account of such Claim
between covered Loss and uncovered loss based upon the relative legal exposure of the parties to such
matters.
XI.
PRIORITY OF PAYMENTS
If Loss
Liability
arising
from any Claim covered under this
Coverage
Part exceeds the
remaining
available Limit of
as stated in Item 3. of the D&O Declarations then the Insurer shall:
I. A.
applies;
then
A.
First pay Loss for such Claim to which
B.
To the extent any remaining amount of the applicable Limit of Liability remains available, the Insurer will pay
Loss for such Claim to which Insuring Agreements I. B. and I. C. apply.
Insuring Agreement
XII.
OTHER INSURANCE AND INDEMNITY
If other valid and collectible insurance (other than a policy that is issued specifically as excess of this Coverage
Part) is available to the Insured for Loss covered under this Coverage Part or if an Insured Individual is entitled
to indemnification from an Outside Entity the insurance provided by this Coverage Part shall be excess of such
other insurance or indemnification regardless of whether or not such insurance is primary, contributory, excess
contingent or whether such indemnification is actually made.
XIII.
PRESUMPTION OF INDEMNIFICATION
If an Insured Entity or Outside Entity fails or refuses to indemnify an Insured Individual for Loss to the fullest
extent permitted by the Insured Entity's or Outside Entity's by-laws or through statutory or common law, then
any payment by the Insurer of such Loss shall be excess of the Insuring Agreement I. B. retention as set forth in
Item 4. of the D&O Declarations.
XIV.
REPRESENTATIONS AND SEVERABILITY

A.
B.
The declarations and statements in the Application for this Coverage Part are the Insured's
and the Insurer has relied on such representations when issuing this Coverage Part. Such
are incorporated into and constitute part of this Coverage Part.
Application shall
be construed
separate application by each Insured.
1.
The
2.
No statement in the Application, fact pertaining to,

shall be imputed to any other Insured Individual.
as a
or
knowledge possessed by
If the Application contains any misrepresentations made

misrepresentations which materially affect the acceptance of the
Form 905 1001 Ed. 01/14
representations
representations
with
risk
the intent to deceive or contains

the hazard assumed by the Insurer
or
Page
10 of 11
Document 1-3
Filed 04/15/16
Page
30 of 95
1.
..c.
Hanover
In,
i11.1no:
croup-
under this
Policy,
then
no
consequence, of any such

1.
XV.
coverage shall be afforded for any Claim based upon,
misrepresentation
with
respect
arising from,
or
in
to:
Any Insured Individual who knew of such misrepresentations (whether or not such individual knew such
Application contained such misrepresentations) or any Insured Entity to the extent it indemnifies any
such Insured Individual;
2.
Entity Liability
Coverage Part
or
Any Insured Entity if any past or present chief executive officer, chief financial officer or chief information
officer (or any equivalent position) of the Insured Entity knew of such misrepresentation (whether or not
such individual knew such Application contained such misrepresentations).
RESCINDABILITY
Insured.
Form 905 1001 Ed. 01/14
or
rescind this
Policy
with respect to any
Page
11 of 11
Document 1-3
Filed 04/15/16
^1, 1$1,
31 of 95
POLICYHOLDER NOTICE
nove r
s
Page
i:1111'
Notice to
Policyholder
Terrorism
Coverage Acceptance
loss from future terrorist attacks. That Program was extended by the federal government under the Terrorism Risk
Insurance Program Reauthorization Act of 2007 and will not expire until December 31, 2014. Your Policy will
become effective (or will be renewed) with the coverage provided under the new act and you have elected to
restrictions and to other provisions in certain terrorism endorsement(s) in this Policy. If there is any conflict
between this Notice and the Policy (including its endorsements), the provisions of the Policy (including its
Carefully
read your
Policy, including
the endorsements attached to your
Policy.

The coverage for Certified Acts of Terrorism is subject to the statutory $100 billion cap on liability
905 5076
for losses and subject to the nuclear hazard exclusion and all other underlying Policy exclusions. Coverage for
acts of terrorism that are not certified (for example, acts which do not exceed the dollar threshold for federal
certification or acts which occur outside the jurisdictional boundary of the federal program) are not subject to the
statutory cap. The coverage for Certified Acts of Terrorism is more fully defined in the endorsement. This
coverage is subject to a limit on our liability pursuant to the federal Terrorism Risk Act Program Reauthorization
Act of 2007.
With respect to Certified Acts of Terrorism and acts of terrorism that are not certified, the Policy exclusions
example, the nuclear hazard and war exclusions) and other Policy provisions continue to apply.
Form 905 7201 PHN Ed. 01/14
(for
Pane 1 nf
h.
Document 1-3
Filed 04/15/16
Page
32 of 95
POLICYHOLDER NOTICE
nover
G.,
DISCLOSURE OF PREMIUM AMOUNT

ACCEPTANCE OF TERRORISM COVERAGE
premium charged
it is
agreed
that
THIS ENDORSEMENT IS ATTACHED TO AND MADE PART OF YOUR POLICY IN RESPONSE TO THE
DISCLOSURE REQUIREMENTS OF THE TERRORISM RISK INSURANCE ACT, AS AMENDED. THIS
ENDORSEMENT DOES NOT GRANT ANY COVERAGE OR CHANGE THE TERMS AND CONDITIONS OF ANY
COVERAGE UNDER THIS POLICY.
Coverage for acts of terrorism as defined in Section 102(1) of the Terrorism Risk Insurance Act ("Act") is included in
Policy. You are hereby notified that under the Act, as amended in 2007, the definition of act of terrorism has
changed. The term "act of terrorism" means any act that is certified by the Secretary of the Treasuryin
concurrence with the Secretary of State, and the Attorney General of the United Statesto be an act of terrorism; to
be a violent act or an act that is dangerous to human life, property, or infrastructure; to have resulted in damage
within the United States, or outside the United States in the case of certain air carriers or vessels or the premises of
a United States mission; and to have been committed by an individual or individuals as part of an effort to coerce
the civilian population of the United States or to influence the Policy or affect the conduct of the United States
Government by coercion.
your

Under your coverage, any losses resulting from Certified Acts of Terrorism may be partially reimbursed by the
United States Government under a formula established by the Act, as amended. Your Policy, however, may contain
other exclusions which might affect your coverage, such as an exclusion for nuclear events. Under the formula, the
United States Government generally reimburses 85% of covered terrorism losses exceeding the statutorily
established deductible paid by the insurance company providing the coverage.
DISCLOSURE OF $100 BILLION CAP
reimbursement as well as insurers' liability for losses resulting from Certified Acts of Terrorism when the amount
of such losses exceeds $100 billion in any one calendar year. If the aggregate insured losses for all insurers exceed
$100 billion, your coverage may be reduced.
Premium for terrorism, if any, is stated below
Total Terrorism Premium $0.00
Fire
FollowIng
Premium
Other than Fire
Following
$0.00
Premium $0.00
Form 905 7203 PHN Ed. 01/14
headings
in this endorsement
are
solely
Page
for
1 of 1
Document 1-3
Filed 04/15/16
Hanover
h
Page
33 of 95
POLICYHOLDER NOTICE
THIS NOTICE IS PROVIDED IN RESPONSE TO THE DISCLOSURE REQUIREMENTS OF THE TERRORISM

RISK INSURANCE ACT. THIS NOTICE DOES NOT GRANT COVERAGE OR CHANGE THE TERMS AND
CONDITIONS OF COVERAGE UNDER THE POLICY. IF THERE IS A CONFLICT BETWEEN THIS NOTICE
AND THE POLICY, THE PROVISIONS OF THE POLICY SHALL APPLY.
POLICYHOLDER DISCLOSURE NOTICE PURSUANT TO THE

TERRORISM RISK INSURANCE ACT
Disclosure of Terrorism
Coverage Available
are hereby notified that under the Terrorism Risk Insurance Act, as amended, you have a right to purchase
insurance coverage for losses resulting from "acts of terrorism" defined in Section 102(1) of the Act as follows:
You
Any act or acts that are certified by the Secretary of the Treasury, in consultation with the
Secretary of Homeland Security and the Attorney General of the United States, to be an act of
or an act that is dangerous to human hfe, property, or infrastructure;
within the United States, or outside the United States in the case of
certain air carriers or vessels or the premises of a United States mission; and to have been
committed by an individual or individuals as part of an effort to coerce the civilian population of
the United States or to influence the policy or affect the conduct of the United States' government
by coercion.
terrorism; to be
violent act
to have resulted in
damage
and does not include any

premium for this coverage is $0.00
that may be covered by the Federal Government as described below,
The
charges
Your policy may contain other exclusions which could affect your coverage, such
Events or Pollution. Please read your policy carefully.
Note for Commercial
Property or Commercial
Inland Marine
Policyholders
as an
for the
portion
of loss
exclusion for Nuclear
in Standard Fire States:
In your state, a terrorism exclusion makes an exception for (and therefor provides coverage for) fire losses
resulting from an act of terrorism. If you reject the offer of terrorism coverage, therefore, that rejection does not
apply to fire losses resulting from an act of terrorism. Coverage for such fire losses will be provided in your policy.
The additional premium just for such fire coverage is $0.00
Disclosure of Federal
Participation
in
Payment
of Terrorism Losses
The United States government through the Department of the Treasury may pay a share of terrorism losses
insured under the federal program under a formula set forth in the Act. Under this formula, the United States
government generally reimburses the following percentage of covered terrorism loss which exceeds the statutorily
established deductible paid by the insurance company providing the coverage: 85% through 2015; 84% beginning
on January 1, 2016; 83% beginning on January 1, 2017; 82% beginning on January 1, 2018; 81% beginning on
January 1, 2019; and 80% beginning on January 1, 2020, The threshold for federal participation in losses is $100
million for calendar year 2015, and increases in $20 million annual increments over five years beginning in
calendar year 2016 until the threshold reaches $200 million on January 1, 2020.
Cap
on
Insurer Participation in
Payment
of Terrorism Losses
The Act contains a $100 billion cap that limits the reimbursement by the United States government as well as
insurers' liability for losses resulting from certified acts of terrorism. If the aggregate of insured losses attributable
to terrorist acts certified under the Terrorism Risk Insurance Act exceed $100 billion in a calendar year and we
have met our insurer deductible under the Act, we will not be liable for the payment of any portion of the amount
of such losses that exceeds $100 billion. In such case, insured losses up to that amount are subject to pro rata
allocation in accordance with procedures established by the Secretary of the Treasury.
Form 905 7205 PHN Ed. 01/15
Panp 1 nf
Document 1-3
Filed 04/15/16
Page
34 of 95
Endorsement
Coverage
Part: Directors & Officers and

Issued
By:
Hanover Insurance
Entity Liability
Holdings,
Inc
Policy Number:
Company
LH4-8827059-07
premium charged
it is
agreed
that:
Section V.A. of Exclusions is amended to include:

This insurance does not apply to Loss for any Claim based upon, arising out of or in any way related to any actual
or alleged Claim for a Wrongful Act by reason of or in connection with the efficacy, performance, health or safety
standards and/or proprietary licensing rights for any services, products or technologies offered, promised, delivered,
produced, processed, packaged, sold, marketed, distributed, advertised and/or developed by the Insured Entity.
Form 905 4030 Ed. 01/14
headings
in this endorsement
are
solely
Page
for
1 of 1
Document 1-3
Filed 04/15/16
Page
35 of 95
r
11anve
o
1
Endorsement
1,
Coverage
Part: Directors & Officers and

Issued
By:
Hanover Insurance
Entity Liability
Holdings,
Inc
Company
Policy
Number: LH4-8827059-07
CAP ON LOSSES FROM CERTIFIED ACTS OF TERRORISM ENDORSMENT
premium charged it is agreed that:
If aggregate insured losses attributable to terrorist acts certified under the federal Terrorism Risk Insurance Act
exceed $100 billion in a calendar year and we have met our Insurer deductible under the Terrorism Risk Insurance
Act, we shall not be liable for the payment of any portion of the amount of such losses that exceeds $100 billion,
and in such case any insured losses up to that amount are subject to pro rata allocation in accordance with
procedures established by the Secretary of the Treasury.
Certified Act of Terrorism means an act that is certified by the Secretary of the Treasury, in accordance with the
provisions of the federal Terrorism Risk Insurance Act, to be an act of terrorism pursuant to such Act. The criteria
contained in the Terrorism Risk Insurance Act for a Certified Act of Terrorism include the following:
A.
The act resulted in insured losses in excess of $5 million in the

insurance subject to the Terrorism Risk Insurance Act; and
B.
The act is a violent act or an act that is dangerous to human life, property or infrastructure and is committed
by an individual or individuals as part of an effort to coerce the civilian population of the United States or to
influence the policy or affect the conduct of the United States Government by coercion.
Form 905 5076 Ed. 01/15
aggregate, attributable
headings
in this endorsement
to all
are
types of
solely
Page
for
1 of 1
Document 1-3
Filed 04/15/16
Pri\i/.,.-7,
..41,
Hri.over
1...,
.:..1-:
Page
36 of 95
(7,, c.rrnr)any
AdvFniage

Coverage Part
..ii
COMPLETELY EXHAUSTED BY DEFENSE EXPENSES AND DEFENSE EXPENSES WILL BE APPLIED AGAINST
THE RETENTION. THE INSURER WILL HAVE NO LIABILITY FOR DEFENSE EXPENSES OR THE AMOUNT OF
ANY JUDGMENT OR SETTLEMENT IN EXCESS OF THE APPLICABLE LIMIT OF LIABILITY.
Policy Number
LH4-8827059-07
Company
440 Lincoln Street
(A
Item 1.
Stock Insurance
Company, herein called
NAMED INSURED

Item 2.
POLICY PERIOD
Inception
(12:01
Item 3.
Aggregate
Limit of
Liability:
Employment
With respect to any Third
1)
$5, 000, 000
Party
Claim
Claim
$50, 000 Each Claim
$50, 000
Each Claim
PRIOR & PENDING PROCEEDINGS DATE

With
respect
to any
Employment
With respect to any Third

Item 6.
Date: 08/01/2016
RETENTIONS
With respect to any
Item 5.
Expiration
LIMIT OF LIABILITY FOR THIS COVERAGE PART

Maximum
Item 4.
Date: 08/01/2015
Claim
Party Claim
05/01/2005
TBD

Additional Period:
100%
12
Months
the
Insurer)
(.1,
Document 1-3
Filed 04/15/16
Page
37 of 95
CorT:r..-y3nv Advantage
......1
Hanover
IL11.111"
1.,,

Coverage Part
ii
i.
Item 7.
$7, 574.00
We have caused this
Policy
Frederick H.
to be
Eppinger,
signed by

President
countersigned
where
Charles F. Cronin,
required by
Secretary
duly
Document 1-3
Filed 04/15/16
_...1Employment
Page
38 of 95
Practices
Liability
Coverage Part
THIS IS A CLA1MS-MADE COVERAGE WITH DEFENSE EXPENSES INCLUDED IN THE LIMIT OF LIABILITY.
PLEASE READ THE POL/CY CAREFULLY.
Insureds agree
as
follows:
INSURING AGREEMENT
The Insurer will pay on behalf of the Insured, Loss which the Insured is legally obligated to pay due to an
Employment Claim or a Third Party Claim first made against the Insured during the Policy Period, or the
Extended Reporting Period if applicable.

A.
the Insurer for nonpayment of premium, then the Named Insured shall have the right to purchase an
Extended Reporting Period for the period set forth in Item 6. of the EPL Declarations beginning on the effective
date of the termination or non-renewal of this Coverage Part. The Named Insured must provide a written
request for the Extended Reporting Period including payment of the additional premium, as set forth in Item 6.
of the EPL Declarations, within thirty (30) days following the effective date of the termination or non-renewal of
this Coverage Part. Additional premium paid shall be deemed fully earned as of the first day of the Extended
Reporting Period and the Extended Reporting Period may not be cancelled.
by
B.
III.
extended to Claims first made during such Extended Reporting Period and reported pursuant to Section VIII.
Reporting, of this Coverage Part, but only if such Claims are for Wrongful Acts which occurred entirely prior
DEFINITIONS
Claim
means an
Employment
Claim and
Third
Party
Claim.
Defense Expenses means the reasonable and necessary legal fees and expenses including attorney fees and
expert fees incurred by the Insurer or the Insured (other than regular or overtime wages, salaries, fees or benefits
of Insured Individuals) in the investigation, defense, settlement and appeal of a Claim, including but not limited to
cost of consultants and witnesses, premiums for appeal, injunction, attachment or supersedeas bonds regarding
such Claim.
Discrimination means any violation of employment discrimination laws including any actual, alleged or constructive
employment termination, dismissal, or discharge, employment demotion, denial of tenure, modification of any term
or condition of employment, any failure or refusal to hire or promote, or any limitation, segregation or classification
of any Employee or applicant for employment in any way that would deprive or tend to deprive any person of
employment opportunities or otherwise affect his or her status as an Employee based on such person's race, color,
religion, creed, genetic information, age, sex, disability, marital status, national origin, pregnancy, HIV status, sexual
orientation or preference, Vietnam Era Veteran status or other protected military status or other status that is
protected pursuant to any federal, state, or local statutory law or common law anywhere in the world.
Form 906 1001 Ed. 01/14
Page
1 of 9
Flinover
Employee
Filed 04/15/16
Document 1-3
Page
39 of 95

Coverage Part
means:
A.
A natural person whose labor and services is engaged and directed by an Insured Entity, and who is on the
payroll of the Insured Entity, including any part-time, leased, temporary, volunteer or seasonal worker; or
B.
An
Independent Contractor for the Insured Entity, but only if the Insured Entity provides indemnification to
Independent Contractor in the same manner as that provided to the Employees described in A. above.
such
The status of
Employment
A.
individual
an
Claim
as an
Employee
as
of the date of the
alleged Wrongful
Act.
means:
Any:
1.
Written demand first received by an Insured for monetary or non-monetary relief

for reinstatement, reemployment, re-engagement or injunctive relief;
2.
Civil proceeding commenced by the service of
3.
Criminal
4.
Formal administrative or regulatory proceeding commenced by the filing of charges, formal investigative
order or similar document, including a proceeding before the Equal Employment Opportunity Commission
or any similar governmental agency;
5.
A Notice of Violation
Contract Compliance
6.
proceeding
commenced
or
or mediation
similar document;
Arbitration
therefrom;
by
the
filing
of
Order to Show Cause
complaint or
similar
including a written
demand
pleading;
charges;
arising
from
an
audit conducted
by
the Office of Federal
Programs.
proceeding commenced by the receipt of
which is brought and maintained

Contractor of an Insured Entity
B.
will be determined
or
mediation
or
by or on behalf of a past, present or prospective Employee or Independent

against an Insured for an Employment Wrongful Act, including any appeal
or
Written request first received by an Insured to toll or waive

Employment Claim described in A.1. through A.6. above.
However, Employment Claim shall not include any arbitration
or
relating
to
to
potential
collective
Employment Contract means any express or implied employment agreement regardless
agreement is alleged to exist, other than a collective bargaining agreement.
of the basis in which
such
Employment Wrongful
Act
means
A.
Discrimination;
B.
Retaliation;
C.
Sexual Harassment;
D.
Workplace Harassment;
E.
Wrongful Termination;
F.
Breach of
G.
Workplace Tort;
an
in his
or
or
alleged:
Employment Contract;
or allegedly committed
capacity as such.
committed, attempted
acting
any actual
her
Form 906 1001 Ed. 01/14
or
attempted by
an
Insured
Entity
or
by
an
Insured Individual while
Page
2 of 9
(:15Hanover
hi,
II.III
Filed 04/15/16
Document 1-3
means
40 of 95

Coverage Part
(.10111'
Independent Contractor means any natural person who is

written contract or agreement.
Insured
Page
Insured
or
working
behalf of
on
an
Insured
Entity pursuant
to
Entity.
Insured Individual means any past, present or future Executive or Employee (including part-time, seasonal,
leased or temporary employees), intern or volunteer of the Insured Entity while acting solely within his or her
capacity as such on behalf of the Insured Entity.
Loss
means
Defense Expenses and the amount the Insured is
legally obligated
to pay
as a
result of
Claim
including:
A.
Monetary judgments, awards or settlements, pre-judgment interest and post-judgment interest, back and front
pay, compensatory damages;
B,
Punitive or
law of the
C.
substantial relationship to the Insured, the Insurer, or to the Claim giving rise to such damages;
Liquidated damages awarded pursuant to

or Equal Pay Act;
the
Age
Discrimination in
Employment Act, Family
and Medical Leave
Act
Loss does not include the portion of such amount that constitutes:
penalties;
1.
Civil, criminal
2.
The cost to comply with or provide any accommodation for persons with disabilities or any other status
which is protected under any applicable federal, state, or local statutory law or common law anywhere in
the world including the Americans with Disabilities Act, the Civil Rights Act of 1964, or any amendments to
or rules or regulations promulgated under any such law;
3.
Any
4.
Any
5.
Benefits
6.
Salary, wages, commission, benefits or other

payments pursuant to a notice period;
7.
Any
or
or
future wages or benefits of any reinstated

continued employment of an Employee;
matter deemed uninsurable
Any
contributions
payable
of any covenant,
or
wages
or
benefits associated with the
by law;
under
an
employee
benefit
plan;
monetary payments which constitute
by the Insured Entity for which

agreement or court order; or
amount not indemnified
reason
8.
or
Employee
an
amount allocated to non-covered loss pursuant to Section IX.
severance
payments
Insured is absolved from payment
or
by
Allocation, of this Coverage Part
Period means the period of time from the inception date shown in Item 2. of the EPL Declarations to the
earlier of the expiration date shown in Item 2. of the EPL Declarations or the effective date of termination of this
Policy
Policy.
Related Claims
means
all Claims based upon,
situations, transactions, results, damage

transactions, results, damages or events.
Related
Wrongful
Acts
means
Wrongful
arising from or
events
or
Acts which
are
or
the
in any way related to the same facts, circumstances,

same series of facts, circumstances, situations,
logically or causally connected by reason
of any
common
fact, circumstance, situation, transaction, casualty, event, result, injury or decision.

any actual or alleged Wrongful Termination or other adverse employment action against an
account of such Employee's exercise or attempted exercise of rights protected by law, refusal to
violate any law, disclosure or threat to disclose to a superior or to any governmental agency alleged violations of
Retaliation
Employee
means
on
Form 906 1001 Ed. 01/14
Page 3
of 9
Filed 04/15/16
Document 1-3
41 of 95
Page
14,
Practices
Employment
the law,
or on
Employee having
account of the
investigation regarding alleged
assisted
or
Liability
Coverage Part
testified in
or
cooperated
with
proceeding
or
violations of law.
Sexual Harassment means any actual or alleged unwelcome sexual advances, requests for sexual favors or any
other conduct of a sexual nature which is made a condition of employment with, used as a basis for employment
decisions by, interferes with performance or creates an intimidating, hostile or offensive working environment within,
an Insured Entity.
Third Party means any natural person who is
Insured Entity.
Third
A.
Party Claim
customer, vendor, services provider
other business invitee of
means
Written demand first received
by
proceeding commenced by
an
2.
Civil
3.
Criminal proceeding commenced
4.

order or similar document;
5.
Arbitration
or mediation
similar document;
the service of
by
the
6.
Third
non-monetary relief;
or
complaint
similar
or
proceeding
by
commenced
proceeding commenced by
the
Third
Discrimination
Act
means
against
any actual
Third
or
filing
the
receipt of
of
charges,
an
Insured for
investigative
formal
Party against
A written request first received by an Insured to toll or waive

Third Party Claim described in A.1. through A.5. above.
Party Wrongful
pleading;
filing of charges;
which is brought and maintained by or on behalf of

Wrongful Act, including any appeal therefrom; or
mediation
or
Third
relating
to
potential
alleged:
Party based
on
such Third
Party's
race,
color, religion, creed, genetic
pursuant
to any
federal, state,
Harassment against a Third

conduct of a sexual nature.
or
status
or
Party, including unwelcome sexual advances, requests for sexual favors
Harassment means any actual or alleged harassment, other than Sexual Harassment,
which creates an intimidating, hostile or offensive working environment within an Insured Entity.
Workplace
Workplace
Tort
means
or
protected
other protected military status or other status that is

local statutory law or common law anywhere in the world.
preference, Vietnam Era Veteran
or
Party
information, age, sex, disability, marital status, national origin, pregnancy, HIV status, sexual orientation
B.
an
Any:
1.
A.
or
or
or
other
bullying
any:
A.
Employment related misrepresentation, defamation, negligent evaluation, wrongful discipline

deprivation of career opportunity;
B.
Invasion of privacy including the unauthorized use or disclosure of an Employee's medical information in
violation of the Health Insurance Portability and Accountability Act, credit information in violation of the Fair
Credit Reporting Act, or other related information obtained through an employment related background check;
C.
Negligent retention, supervision, hiring, training, wrongful infliction of emotional distress, mental anguish or
humiliation, failure to provide or enforce consistent employment related corporate policies and procedures or
false imprisonment, but only if such act is alleged in connection with a Claim alleging Discrimination,
Retaliation, Sexual Harassment, Workplace Harassment, Wrongful Termination or breach of an
Employment
or
wrongful
Contract.
-.---1;lzmaunlamomgyarzat
Form 906 1001 Ed. 01/14
Page
4 of 9
Document 1-3
Hanover
Filed 04/15/16
Employment
Page
42 of 95
Practices
Liability
Coverage Part
Wrongful Termination means the actual or constructive termination of an employment relationship between an
Employee and an Insured Entity in a manner or for a reason which is contrary to applicable law or public policy or
in violation of an Employment Contract.
Wrongful
IV.
Act
means
any
Employment Wrongful
Act
or
Third
Party Wrongful
Act.
EXCLUSIONS
A.
apply
Prior Notice
Based upon, arising out of or in any way related to any Claim, Wrongful Act, investigation, proceeding, act,
event, transaction, decision, fact, circumstance or situation which has been the subject of any notice accepted
by any other Insurer, under any similar policy of which this Policy is a direct or indirect renewal or replacement.
B.
Based upon, arising out of or in any way related to any litigation, administrative or arbitration proceeding, written
demand pending against, or any order, decree or judgment entered prior to or on the Prior & Pending
Proceedings Date set forth in Item 5. of the EPL Declarations.
C.
Bodily Injury or Property Damage

For the physical injury to or destruction of any tangible property, including loss of use of that property and loss
of use of property that is not physically damaged; or for bodily injury, mental anguish, humiliation, emotional
distress, disability, sickness, disease, death, assault or battery, however this exclusion shall not apply to mental
anguish, humiliation or emotional distress arising out of a Wrongful Act.
D.
Employee
Benefits
For any violation or failure to comply with the responsibilities, obligations, or duties imposed by any federal,
state or local statutory or common law, anywhere in the world including regulations promulgated under any
such law that governs any employee benefit arrangement, program, plan policy or scheme of any type, including
but not limited to, the Employee Retirement Income Security Act of 1974 (except section 510 thereof) and the
Consolidated Omnibus Budget Reconciliation Act of 1985 as amended.
E.
Labor Relations/Occupational Safety/Notification/Workers Compensation/Wage and Hour

For any violation
failure to
comply with:
responsibilities, obligations, or duties imposed by any federal, state or local statutory or common law,
anywhere in the world including regulations promulgated under any such law, that governs the rights of
employees to engage in union or other collective bargaining activities, the duty of an employer to meet,
discuss or bargain with employee representatives, the enforcement of any collective bargaining agreement
or any grievance or arbitration proceedings, including but not limited to, the National Labor Relations Act,
as amended. This exclusion does not apply to any Claim for retaliatory treatment against any Insured who
is attempting to exercise his or her rights under the above referenced statute, law, rule, regulation or order;
1.
The
2.
The
3.
The
Form 906 1001
or
responsibilities, obligations, or duties imposed by any federal, state or local statutory or common law
anywhere in the world including regulations promulgated under any such law that governs workplace safety
and health, including but not limited to, the Occupational Safety and Health Act, as amended. This exclusion
does not apply to any Claim for retaliatory treatment against any Insured who is attempting to exercise his
or her rights under the above referenced statute, law, rule, regulation or order;
anywhere in the world including regulations promulgated under any such law that governs any obligation
Ed. 01/14
Page
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(.:-t 'Hanover
Filed 04/15/16
Employment
Page
43 of 95
Practices
Liability
Coverage Part
an employer to notify, discuss, or bargain with employees or others in advance of any plant or facility
closing or mass layoff, or any similar obligation, including but not limited to, the Worker Adjustment and
Retraining Notification Act, as amended:
of
anywhere in the world, including the Fair Labor Standards Act, and regulations promulgated under any
such law that governs wage, hour and payroll policies and practices, (except the Equal Pay Act); or
4.
The
5.
Any law concerning workers compensation, unemployment insurance, Social Security, disability
any similar federal, state or local law anywhere in the world.
However, this exclusion shall not apply to

F.
an
Employment
benefits
or
Claim for Retaliation.
Breach of Written Employment Contract

Based upon, arising out of or in any way related to the breach of any written Employment Contract. However
this exclusion shall not apply to Defense Costs or to the extent that an Insured would have been liable for
Loss in the absence of such written Employment Contract.
G. Accommodation
For costs and expenses incurred, or to be incurred, to comply with an order, judgment or award of injunctive or
other equitable relief of any kind, including but not limited to, costs and expenses associated with or arising
from an Insured's obligations under the Americans With Disabilities Act or the Rehabilitation Act of 1973, as
amended or any similar federal, state or local law anywhere in the world. However, this exclusion shall not
apply to Defense Costs.
V.

A.
The Insurer shall have the exclusive right and duty to defend any Claim covered by this Coverage Part even if
any allegation of such Claim is groundless, false or fraudulent. However, if an Insured is entitled under
applicable law to select defense counsel, then such defense counsel shall comply with the Insurer's customary
rates and litigation guidelines regarding billing, staffing and reporting. The Insurer has no duty to defend any
Claim or pay Defense Expenses for Claims to which this insurance does not apply.
B.
The right and duty to defend any Claim covered under this Policy shall cease when the Maximum Aggregate
Limit of Liability in Item 3. of the EPL Declarations or the Combined Policy Aggregate Limit of Liability in Item
3. of the Policy Declarations has been exhausted by the payment of Loss.
C.
The Insureds shall provide all information in connection with any Claim and
investigation, defense and settlement of any Claim.
D.
No Insured shall settle any claim, voluntarily make any payment,

related to a Claim without the Insurer's consent.
E.
Insured's written consent to settle which shall not be unreasonably withheld. If any Insured refuses to consent
to the settlement of any Claim which the Insurer recommends and which is acceptable to the claimant, subject
to the applicable Limit of Liability or Retention, the Insurer's liability for all Loss from such Claim shall not
assume
cooperate
any
with the Insurer in the
obligation,
or
incur any expense
exceed:
1.

2.
Form 906 1001 Ed. 01114
of such Loss in
excess
including
Defense
Expenses incurred
Page
6 of 9
Document 1-3
1-Linover
F.
VI.
Employment
44 of 95
Practices
Liability
Coverage Part
LIMIT OF LIABILITY
limited
as
of the number of Insureds, Claims,

follows:
or
claimants, the Insurer's liability under this Coverage Part is
A.
If the Combined Policy Aggregate Limit of Liability in Item 3, of the Policy Declarations is elected, the Insurer's
maximum liability for all Loss during the Policy Period arising from a Claim or Related Claims under this
Coverage Part, shall not exceed the Maximum Aggregate Limit of Liability stated in Item 3. of the EPL
Declarations or the unpaid portion of the Combined Policy Aggregate Limit of Liability stated in Item 3. of the
Policy Declarations, whichever is less.
B.
Insurer's maximum liability for all Loss during the Policy Period arising from a Claim or Related Claims under
this Coverage Part, shall not exceed the Maximum Aggregate Limit of Liability stated in Item 3. of the EPL
Declarations.
RETENTION
A.
under this Coverage Part applies only to that part of covered Loss which is in excess of
Retention stated in Item 4. of the EPL Declarations. Such Retentions shall be considered
uninsured amounts and be borne by the Insureds at their own risk.
The Insurer's
the
B.
C.
liability
applicable
Claim are subject to different Retentions in different Insuring Agreements the applicable
If different parts of
Retentions will be
exceed the largest
No retention shall
apply to
cannot be indemnified
statutory law
impairment,
VIII.
Page
If the Insurer is prevented by law or otherwise unable to defend or investigate a Claim brought outside the
United States, the Insured under the Insurer's supervision may arrange for the investigation, appointment of
counsel and defense of such Claim. Subject to the applicable Limit of Liability and Retention, the Insurer will
Regardless
VII.
Filed 04/15/16
to
by
indemnify,
any Loss under this Coverage Part incurred by an Insured Individual if such Loss
an Insured Entity because such Insured Entity is not permitted by common or
or is permitted or required to indemnify, but is unable to do so by reason of financial
REPORTING
A.
An Ins u red shall provide the Insurer with written notice as soon as practicable after the Chief Executive Officer,
Chief Financial Officer, President, In-House General Counsel, any person of the human resources department
or any person with the responsibility for the management of insurance claims, or any equivalent position, of an
Insured Entity becomes aware of a Claim, but in no event later than:
1.
Ninety (90) days
2.
The
expiration
date of the Extended
expiration
or
Reporting Period,
termination;
if
or
applicable.
However, if the Insurer sends written notice to the Named Insured stating that this Policy is being terminated
for nonpayment of premium, an Insured shall give the Insurer written notice of such Claim prior to the effective
date of such termination.
Form 906 1001 Ed. 01114
Page
7 of 9
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Coverae Part
B.
A. immediately above, solely with respect to an Employment Claim that is brought

formal administrative or regulatory proceeding commenced by the filing of charges, formal investigative
order or similar document, an Insured shall give written notice during the Policy Period or, if applicable, no
later than:
Notwithstanding paragraph
as a
2.
Ninety (90) days after the effective date of expiration

with the Insurer and no Extended Reporting Period is
The
expiration
after the end of the
Policy
One hundred
3.
IX.
eighty (180) days
1.
Reporting Period,
or
Period if this
Coverage part
termination if this
purchased;
Coverage
is renewed;
Part is not renewed
or
if elected.
C.
If during the Policy Period, or an applicable Extended Reporting Period, an Insured becomes aware of any
act or circumstances that may subsequently give rise to a Claim and gives the Insurer notice of such act or
the Insured during the Policy Period in which the circumstances were first reported to, and accepted by the
Insurer provided that any such subsequent Claim is reported to the Insurer in accordance with paragraph A.
above.
D.
An Insured must give to the Insurer the assistance, information and cooperation as the Insurer may require
circumstances, the nature of the alleged Wrongful Act, the nature and amount of alleged or potential damage,
the names of actual or potential claimants, and the manner in which the Insured first became aware of the
Claim, circumstances or alleged Wrongful Act.
E.
potential Claim
must be
provided
in
writing
ALLOCATION
If an Insured incurs Loss on account of any Claim and such Claim includes both covered and non-covered matters,
coverage with respect to such Claim shall apply as follows:
X.
A.
One hundred percent (100%) of Defense Expenses on account of the Claim will be considered covered Loss
provided that this shall not apply to any Insured for whom coverage is excluded pursuant to Section Xl.
Representations and Severability; and
B.
Other than Defense Expenses, all remaining loss that an Insured incurred on account of such Claim between
covered Loss and uncovered loss based upon the relative legal exposure of the parties to such matters.
OTHER INSURANCE
Employment Claim Loss payable under this Coverage Part shall be primary; however, if such
Employment Claim is made against a leased or temporary employee or Independent Contractor, that portion
of such Loss payable under this coverage part shall be excess of, and not contribute to, any other valid and
collectible insurance (other than a policy that is issued specifically as excess of this Coverage Part) regardless
of whether or not such insurance is stated to be primary, contributory, excess, contingent or otherwise.
A.
An
B.
A Third Party Claim Loss payable under this Coverage Part shall be excess of, and not contribute to, any
other valid and collectible insurance (other than a policy that is issued specifically as excess of this Coverage
Part) regardless of whether or not such insurance is stated to be primary, contributory, excess, contingent or
otherwise.
Form 906 1001 Ed. 01/14
Page
8 of 9
Document 1-3
{2.I Hanover
XI.
Employment
Page
46 of 95
Practices
Liability
Coverage Part

A.
B.
The declarations and statements in the Application for this Coverage Part are the Insured's representations
and the Insu re r has relied on such representations when issuing this Coverage Part. Such representations are
incorporated into and constitute part of this Coverage Part.
Application
shall be construed
separate Application by each Insured.
1.
The
2.

as a
or
knowledge possessed by
If the Application contains any misrepresentations made

misrepresentations which materially affect the acceptance of the
under this Policy, then no coverage shall be afforded for any Claim
of, any such misrepresentation with respect to:
1.
2.
with the intent to deceive or contains

risk or the hazard assumed by the Insurer
based upon, arising from, or in consequence
Any Insured Individual, who knew of such misrepresentations (whether or not such individual knew such
Application contained such misrepresentations) or any Insured Entity to the extent it indemnifies any
such Insured Individual;
XII.
Filed 04/15/16
or
Any Insured Entity, if any past or present Chief Executive Officer, Chief Financial Officer or Chief
Information Officer (or any equivalent position) of the Insured Entity knew of such misrepresentation
(whether or not such individual knew such Application contained such misrepresentations).
RESCINDABILITY
Form 906 1001
Ed. 01/14
or
rescind this
Policy with respect to
any Insured.
Page
9 of 9
Ha
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Filed 04/15/16
over
Page
47 of 95
POLICYHOLDER NOTICE
IMPORTANT POLICYHOLDER INFORMATION EMPLOYMENT PRACTICES RISK

MANAGEMENT HOTLINE
pleased
We
are
you
as a
to inform you of the
Hanover
following employment practices
risk
management
resources, which are accessible to
policyholder.
The Hanover has teamed up with Jackson Lewis P.C., a national Employment Practices and Labor Relations law firm to
provide expert risk management services. Our policyholders have access to an exclusive hotline where experienced
employment attorneys are prepared to assist and address your employment related questions. The dedicated telephone
number for Hanover policyholders is:
1-866-758-6874
This hotline is made accessible to assist our policyholders on a broad range of employment related subjects such as
forms of harassment, insubordination, wage and hour issues, leaves of absence, immigration processes, employment-atwill concepts and employment issues outside the U.S.
provide a determinative answer regarding specific employment situations or issues that are
appropriately addressed with legal counsel. Such situations would include specific personnel actions, current or
prior Equal Employment Opportunity Commission ("EEOC") investigations, employee performance, compliance with state
or federal employment statutes, employment contracts or benefits administration.
This service is not intended to

more
provide his or her name, the name of the company on the Hanover
well as the caller's email address, mailing address and telephone number. The nature of the
discussions on the hotline will not be shared with the Hanover. However, for informational purposes, Jackson Lewis will
provide Hanover with a list of callers and time spent on the call.
When
policy,
calling the hotline,

the policy number
the caller will be asked to
as
a reminder, whenever you become aware of a current or

Hanover in accordance with the policy terms and conditions.
As
potential claim you should also immediately give notice
to
founding in 1958 Jackson Lewis, a national firm employing roughly 600 labor and employment lawyers, has
exclusively represented management in cases involving a full spectrum of workplace law issues. You can learn more
about the firm and access additional information through their website at www.iacksonlewis.com
Since its
Please note that the independent risk management services offered by Jackson Lewis P.C. are accessible to you as a
policyholder of The Hanover Insurance Company or one of its subsidiaries and affiliates. The Hanover is independent
from Jackson Lewis P.C. and is not responsible for any fees or charges you may incur for services or products which may
Under no circumstances should the
be offered to you, or for which you may contract with Jackson Lewis P.C.
recommendations, services or products of Jackson Lewis P.C. be construed as recommendations, services or products of
The Hanover Insurance Group, Inc. By making this service provider accessible to you, The Hanover does not assume
(and specifically disclaims) any duty, undertaking or responsibility to you regarding the employment risk management
services of Jackson Lewis P.C.
Form 906 7111PHN Ed. 01/14
Page
1 of 1
Document 1-3
Filed 04/15/16
Page
48 of 95
.:)FLinover
Endorsement
h..,, .c
Coverage
Part:
Employment
Practices

Issued
By:
Hanover Insurance
Liability
Holdings,
Policy
Inc
Company
Number: LH4-8827059-07
WAGE & HOUR CLAIMS DEFENSE EXPENSE SUBLIMIT
A.
Section I.
premium charged it is agreed that:
Insuring Agreement
is amended to include:
Wage & Hour Claims Defense Expense Coverage

The Insurer will pay on behalf of the Insured, Defense Expenses arising out of any Wage & Hour Claim first
made against the Insured during the Policy Period or the Extended Reporting Period, if applicable.
The Insurer's maximum limit of liability for Defense Expenses resulting from any Wage & Hour Claim shall be
$50, 000 per Policy Period which shall be part of, and not in addition to, the Maximum Aggregate Limit of
Liability shown in Item 3. of the EPL Declarations and shall be excess of a Retention of $50, 000.
If a matter includes allegations constituting a covered Employment Claim and a Wage & Hour Claim then the
sublimit above shall not apply and the Maximum Aggregate Limit of Liability shown in Item 3. of the EPL
Declarations will apply so long as such Employment Claim remains part of such matter. If at the time such
Employment Claim is no longer part of such matter then the sublimit above shall apply unless the amount of
Defense Expenses incurred at such time exceeds the sublimit above. In this event, the Insurer will have no
further obligation to pay Defense Expenses arising out of such Wage & Hour Claim.
B.
For the purpose of coverage
Wage
A.
& Hour Claim
provided by this endorsement:
means:
Any:
1.
Written demand first received by an Insured for monetary or non-monetary relief

demand for reinstatement, re-employment, re-engagement or injunctive relief;
2.
Civil
3.
Formal administrative or regulatory proceeding commenced by the filing of charges, formal

order or similar document, including a proceeding before the Equal Employment
Commission or any similar governmental agency;
4.
or similar document;
proceeding
commenced
by
the service of
proceeding
commenced
complaint
by
the
or
similar
receipt of
Form 906 1116 Ed. 01/14
headings
written
pleading;
brought and maintained by or on behalf of a past, present

Independent Contractor of an Insured Entity against an Insured for
including any appeal therefrom; or
which is
including
or
an
investigative
Opportunity
or
mediation
prospective Employee or
Wage & Hour Violation,
in this endorsement
are
solely
Page
for
1 of 2
Kì,.
Document 1-3
Filed 04/15/16
Page
49 of 95
IHa' nover
Coverage
Part:
Employment
Endorsement
Practices

Issued
B.
By:
Hanover Insurance
Liability
Holdings,
Policy
Inc
Company
Number: LH4-8827059-07
A written request first received by an Insured to toll or waive a statute of limitations

& Hour Claim described in A.1. through A.4. above.
relating
to
potential
Wage
However, Wage & Hour Claim shall not include any arbitration
or
to a collective
Wage & Hour Violation means an alleged or actual violation of the responsibilities, obligations and duties
imposed by any federal, state or local statutory or common law anywhere in the world including regulations
promulgated under any such law that governs wage, hour and payroll policies and practices, including but not
limited to the Fair Labor Standards Act,
C.

with the following:
4.
as
amended.
provided by this
endorsement Section IV.E.4. of Exclusions is deleted and
replaced
anywhere in the world including regulations promulgated under any such law that governs wage, hour and
payroll policies and practices, except the Equal Pay Act, including but not limited to the Fair Labor Standards
Act, as amended. However, this exclusion shall not apply to Defense Expenses for any Wage & Hour
Defense Costs Coverage as provided in paragraph A. of this endorsement; or
The
Form 906 1116 Ed. 01/14
headings
in this endorsement
are
solely
Page
for
2 of 2
Document 1-3
Filed 04/15/16
Page
50 of 95
f) Hanover
Coverage
Part:
Endorsement
Employment
Practices

Issued
By:
Hanover Insurance
Liability
Holdings, Inc
Company
IMMIGRATION INVESTIGATION DEFENSE EXPENSE SUBLIM1T
A.
Section I.
premium charged it is agreed
that:
Insuring Agreement
Immigration Investigation Defense Expense
Coverage
The Insurer will pay Defense Expenses on behalf of the Insureds resulting from any Immigration Claim first
made during the Policy Period or any applicable Extended Reporting Period, for any Immigration Wrongful
Act committed or allegedly committed prior to the end of the Policy Period,
The Insurer's maximum limit of liability for Defense Expenses resulting from any Immigration Claim shall be
$10, 000 per Policy Period which shall be part of, and not in addition to, the Maximum Aggregate Limit of
Liability shown in Item 3. of the EPL Declarations and shall be excess of the applicable Retention shown in Item
4. of the EPL Declarations.
B.
provided by this endorsement, Section III. Definitions,
the definition of Claim is
deleted and replaced with the following:

Claim
C.
means an
Employment Claim,
provided by
Immigration Claim means

shall not include any labor
Third
Party Claim
and
an
Immigration
Claim.
this endorsement:
investigation of any of the Insureds by any governmental agency but

grievance arbitration or other proceeding pursuant to a collective bargaining
criminal
or
ag reement.
Immigration Wrongful Act means an actual or alleged violation of the responsibilities, obligations or duties
imposed by the Immigration Control Act of 1986 or any other similar federal or state laws or regulations in
connection with the actual or alleged hiring or harboring of illegal aliens.
Form 906 1149 Ed. 01/14
headings
in this endorsement
are
solely
Page
for
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Filed 04/15/16
Private
I-fah nover
Page
51 of 95
Cornnany
Fiduciary Liability Coverage Part
COMPLETELY EXHAUSTED BY DEFENSE EXPENSES AND DEFENSE EXPENSES WILL BE APPLIED AGAINST
THE RETENTION. THE INSURER WILL HAVE NO LIABILITY FOR DEFENSE EXPENSES OR THE AMOUNT OF
ANY JUDGMENT OR SETTLEMENT IN EXCESS OF THE APPLICABLE LIMIT OF LIABILITY.
Policy
Number
LH4-8827059-07
Company
440 Lincoln Street
(A
Item 1.
Stock Insurance
Company, herein called
NAMED INSURED
Item 2.
POLICY PERIOD
Inception
(12:01
Item 3.
Date: 08/01/2015
Expiration Date: 08/01/2016
LIMITS OF LIABILITY FOR THIS COVERAGE PART
Aggregate Limit of Liability:

Compliance Resolution Coverage:
ERISA Section 502(c) Penalties:
Maximum
HIPAA Penalties:
Item 4.
$1, 000, 000

$250, 000
$10, 000
$10, 000
RETENTIONS
Insuring Agreement
I.A.
Insuring Agreement LB.
Item 5.
1)
$0 Each Claim
$0 Each Claim
PRIOR & PENDING PROCEEDINGS DATE
Insuring Agreement
Insuring Agreement
LA.
I.B.
05/01/2005
05/01/2005
the
Insurer)
Document 1-3
Filed 04/15/16
Page
52 of 95
Privaite
Hanover
Item 6.
100%
12
Additional Period:
Item 7.
Part
1,
$1, 520.00
We have caused this
where
to be
signed by
countersigned
Eppinger,
President
Charles F. Cronin,
Policy
Frederick H.
Months

required by
Secretary
duly
Filed 04/15/16
Document 1-3
Page
53 of 95
'Hanover
."a......4tititaralE3g-MalgalgUVOMISZAVNKCSVIS034m%Maltataitalarniatiir,;:x,
Insureds agree
I.
as
follows:
INSURING AGREEMENTS
A.
The Insurer will pay on behalf of the Insured, Loss which the Insured is legally obligated to pay due to Claims
first made against the Insured during the Policy Period, or the Extended Reporting Period if applicable.
B.
Compliance Resolution Coverage
The Insurer will pay on behalf of the Insured, Compliance Resolution Loss and Defense Expenses in
connection with a Compliance Resolution Notice first given to the Insurer during the Policy Period, or the
Extended Reporting Period if applicable.

A.
the Insurer for nonpayment of premium, then the Named Insured shall have the right to purchase an
Extended Reporting Period for the period set forth in Item 6. of the Fiduciary Declarations beginning on the
effective date of the termination or non-renewal of this Coverage Part. The Named Insured must provide a
written request for the Extended Reporting Period including payment of the additional premium, as set forth in
Item 6. of the Fiduciary Declarations, within thirty (30) days following the effective date of the termination or
non-renewal of this Coverage Part. Additional premium paid shall be deemed fully earned as of the first day
of the Extended Reporting Period and the Extended Reporting Period may not be cancelled.
by
B.
extended to Claims first made during such Extended Reporting Period and reported pursuant to Section IX.
Reporting of this Coverage Part, but only if such Claims are for Wrongful Acts which occurred entirely prior
DEFINITIONS
Administration
A.
means:
Providing interpretations
and
giving
counsel to
employees,
beneficiaries
or
participants regarding
any Insured
Benefit Plan;
in connection with any Benefit
B.
Handling records
C.
Benefit Plan
A.
or
Plan;
cancellation of
or
employees
or
participants under
any Benefit Plan.
means:
Any employee benefit plan, welfare benefit plan or pension benefit plan as defined by, and subject to ERISA,
other than an Employee Stock Ownership Plan, which is operated solely by an Insured Entity or jointly by the
Insured Entity and a labor entity solely for the benefit of the employees or Executives of the Insured Entity
located anywhere in the world, which existed on or prior to the inception date of this Policy, or subject to
Section VIII. Change in Control or Exposure of the Common Policy Terms and Conditions, which is acquired
after such inception date.
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B.
Any other employee benefit plan or program not subject to ERISA which is sponsored solely by the Insured
Entity for the benefit of employees or Executives including any fringe benefit or excess benefit plan located
anywhere in the world which existed on or prior to the inception date of this Policy, or subject to Section VIII.
Change in Control or Exposure of the Common Policy Terms and Conditions, which is acquired after such
inception date.
C.
An Employee Stock Ownership Plan

endorsement attached to this Policy; or
D.
Any government-mandated insurance program for workers compensation, unemployment, social security
disability benefits for employees of the Insured Entity.
Claim
multi-employer plan
but
only
if
specifically
scheduled
on
an
or
means:
A.
B.
Civil
C.
Criminal
D.
or
proceeding
by
commenced
proceeding
an
by the service of
commenced
or
complaint
or
similar
pleading;
by the filing of charges;
Formal administrative or regulatory proceeding commenced by the filing of charges, formal investigative order
similar document including a fact-finding investigation by the Department of Labor, the Pension Benefit
Guaranty Corporation or a similar government agency located anywhere in the world;
or
E.
similar document; or
F.
Official request for Extradition of
against
G.
an
Insured for
proceeding
an
commenced
by the receipt
of
or
mediation
or
Insured Individual;
Wrongful Act, including
any

described in A. through F. above.
appeal therefrom;
or
waive
or
relating
to
potential Claim
Resolution Loss means fines, penalties, sanctions, voluntary correction fees, compliance fees or
fees assessed against or collected from an Insured pursuant to a Compliance Resolution System to
correct an inadvertent Insured Benefit Plan defect under an Employee Plan's Compliance Resolution System,
including but not limited to the Closing Agreement Program (CAP).
Compliance
user
Compliance Resolution Notice means, with respect to any Insured Benefit Plan, written notice to the Insurer
of the Insured's intent to enter into a Compliance Resolution System, provided that the Insured had no
knowledge of violations prior to the inception of this Policy or the inception date of the first Policy provided by the
In surer of which this Coverage Part is a direct or indirect and continuous renewal or replacement.
Compliance Resolution System means any voluntary compliance resolution program administered by the U.S.
Internal Revenue Service or the U.S. Department of Labor, including the Employee Plan's Compliance Resolution
System, the Self Correction Program, the Audit Closing Agreement Plan, the Delinquent Filer Voluntary
Compliance program and the Voluntary Fiduciary Correction program, or any similar program administered by a
governmental authority anywhere in the world.
Defense Expenses means the reasonable and necessary legal fees and expenses including attorney fees and
expert fees incurred by the Insurer or the Insured (other than regular or overtime wages, salaries, fees or
benefits of Insured Individuals) in the investigation, defense, settlement and appeal of a Claim, including but not
limited to cost of consultants and witnesses, premiums for appeal, injunction, attachment or supersedeas bonds
regarding such Claim.
Employee
means a
who is on the
worker.
Form 907 1001
natural person whose labor and services is engaged and directed by an Insured Entity, and
of the Insured Entity, including any part-time, leased, temporary, volunteer or seasonal
payroll
Ed. 01/14
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Part
ERISA means the Employee Retirement Income Security Act of 1974 as amended including amendments relating
to the Consolidated Omnibus Budget Reconciliation Act of 1985 and the Health Insurance Portability and
Accountability Act of 1996) or any similar federal state, local or common law anywhere in the world, and any rules
and regulations promulgated thereunder.
Extradition means any formal process initiated by a local, state or national government against an Insured
Individual to compel the Insured Individual to appear for trial or otherwise answer any criminal accusation.
Insured
means
any Benefit Plan, Insured Individual
Insured Individual
means
A.
Past, present
or
B.
Past, present
or
future employee of
C.
Past, present
or
future natural person trustee of
Defense
means
Entity.
any:
future Executive
Loss
Insured
or
or
Employee of
an
Entity;
Insured
Benefit Plan;
Expenses and the
an
Insured
Entity
Benefit Plan.
or a
legally obligated
amount the Insured is
to pay as a result of a Claim
including:
A.
Monetary judgments, awards or settlements, pre-judgment

pay, compensatory damages; or
B.
Punitive or
law of the
substantial
interest and
post-judgment interest,
back and front
relationship to the Insured, the Insurer, or to the Claim giving rise to such damages;
However, Loss does not include:

Insured is
1.
Any
amounts which
2.
Any
amount deemed uninsurable under the law
3.
Fines, penalties
obligated to pay
non-monetary damages including injunctive relief;
a.
The five
or
an
(i)
pursuant
result of
to which this
Claim
seeking
Coverage
relief
or
redress for
Part is construed;
taxes, except:
percent (5%)
Section 502
as a
and
(I)
or
of
less, or the twenty percent (20%)

ERISA;
or
less, fines
or
penalties imposed under
penalties imposed under Section 502(c) of ERISA provided the Insurer's maximum limit of
liability for all such civil penalties on account of all Claims first made during the Policy Period shall
be the Limit of Liability set forth in Item 3. of the Fiduciary Declarations;
b.
Civil
c.
Civil
d.
Any penalty which constitutes Compliance Resolution

Agreement I.B. Compliance Resolution Coverage; or
e.
penalties imposed on an Insured for a violation of the privacy provisions of the Health Insurance
Portability and Accountability Act of 1996, as amended, provided the Insurer's maximum limit of
liability for all such civil penalties on account of all Claims first made during the Policy Period shall
be the Limit of Liability set forth in Item 3. of the Fiduciary Declarations;
Loss
solely
with respect to
Insuring
Civil penalties imposed by the Pension Ombudsmen appointed by the United Kingdom Secretary of
State for Work and Pensions, the United Kingdom Occupational Pensions Regulatory Authority, the
Pensions Regulator or any successor thereto, pursuant to the Pension Scheme Act of 1993, the
Pensions Act 1995, the Pensions Act 2004 or rules or regulations thereunder. Provided that the
funds or assets of the pension scheme will not be used to fund, pay or reimburse the premium for this
Coverage Part;
4.
amount which constitutes a benefit due, or which would be due, under any Benefit Plan if such
Benefit Plan complied with applicable law, including loss resulting from the payment of plaintiff attorneys'
Any
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Fiduciary LiabiHty Coverage
fees based upon
percentage of such benefits
or
payable
from
a common
Part
fund established to pay such
benefits, except to the extent that:

The benefits
a.
Individual's
are payable by
Wrongful Act;
an
Insured Individual
as a
personal obligation arising
out of the Insured
or
The portion of damage, settlement or judgment that represents loss to any Benefit Plan and/or to the
account of a participant in a Benefit Plan, by reason of a change in value of any investments held by
such Benefit Plan or such account including investments in the securities of an Insured Entity
regardless of whether such damage, settlement or judgment is characterized by plaintiffs, or held by
b.
the courts, to he benefits;
Any amount not indemnified by the Insured Entity for which an

payment by reason of any covenant, agreement or court order;
c.
d.
Insured Individual is absolved from
Any amount incurred by an Insured in the defense or investigation of any action, proceeding,
investigation or demand that was not yet a Claim or a Compliance Resolution Loss.
Policy Period means the period of time from the inception date shown in Item 2. of the Fiduciary Declarations to
the earlier of the expiration date shown in Item 2. of the Fiduciary Declarations or the effective date of termination
of this Policy.
Related Claims means all Claims based upon, arising from or in any way related to the same facts,
circumstances, situations, transactions, results, damages or events or the same series of facts, circumstances,
situations, transactions, results, damages or events.
Wrongful
Acts which
logically
fact, circumstance, situation, transaction, casualty, event, result, injury
A.
Act
means
means
any actual
statutory
or
or
by
reason
of any
alleged:
any individual or entity for whose acts an Insured is legally responsible, of the
duties imposed upon fiduciaries of any Benefit Plan by ERISA or the common
law of the United States;
Breach by an Insured, or
responsibilities, obligations
or
or
are
connected
decision.
causally
Wrongful
Wrongful
IV.
Acts
Related
common
or
Insured is
legally
or any individual or entity for whose acts the Insured is

service as a fiduciary of any Benefit Plan.
legally
B.
Negligent act, error or omission by an Insured, or any individual or entity for whose
responsible, solely in the Administration of any Insured Benefit Plan; or
C.
Any other matter claimed against an Insured,

responsible, solely by reason of the Insured's
acts
an
EXCLUSIONS
A.
apply
Prior Notice
Based upon, arising out of or in any way related to any Claim, Wrongful Act, investigation, proceeding, act,
event, transaction, decision, fact, circumstance or situation which has been the subject of any notice accepted by
any other Insurer, under any similar policy of which this Policy is a direct or indirect renewal or replacement.
B.
Based upon, arising out of or in any way related to any litigation, administrative or arbitration proceeding, written
demand pending against an Insured, or any order, decree or judgment entered prior to or on the Prior & Pending
Proceedings Date set forth in Item 5. of the Fiduciary Declarations.
C.
Conduct
Based upon,
arising
Form 907 1001 Ed. 01/14
out of
or
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1"411m=afftumwmmvmmmaggiaor----
Any deliberate, dishonest, fraudulent

Insured;
2.
57 of 95
l'
IJAMONZW-7"-
1.
Page
act
or
---ifwmueagr-7
omission,
or
willful violation of any statute
or
regulation by
an
or
gaining
An Insured
any
profit,
remuneration
or
advantage
to which such Insured
was
not
legally entitled;
However, this exclusion shall not apply to Defense Expenses unless and until a final or non-appealable judgment
or adjudication in any underlying proceeding or action that establishes an Insured committed such an act or
omission, violation of a statute or regulation, or gained such profit, remuneration or advantage to which the
Insured was not legally entitled.
D.
Bodily Iniury
or
Property Damage
For the physical injury to or destruction of any tangible property, including loss of use of that property and loss of
use of property that is not physically damaged; or for bodily injury, mental anguish, humiliation, emotional distress,
disability, sickness, disease, death, assault

E.
or
battery sustained by
any individual.
Employment Practices
Based upon, arising out of
in any way related to any:
or
1.
Employment-related Wrongful
2.
Discrimination
3.
against
Federal, state, local
or
or
Act unless such Claim is asserted under ERISA;
sexual harassment of any third party;
foreign
wage and hour laws,
including,
or
without
limitation, the
Fair Labor Standards
Act.
F.
Contract
Based upon, arising out of or in any way related to liability assumed through, or on account of, any oral
contract or agreement to which an Insured is a party; however this exclusion shall not apply to:
G.
1.
Liability
2.
Any
that would have attached in the absence of such contract
contract
or
agreement establishing
or
agreement;
or
written
or
Benefit Plan.
Personal Injury
1.
For defamation of character, libel, slander,
or
publication of
material in violation of
an
individual's
right
of
privacy;
2.
3.
For the
wrongful entry
For false arrest,
or
eviction
wrongful
or
detention
other invasion of the

or
imprisonment,
right
of
malicious
privacy;
or
prosecution, malicious
use or
abuse of
process.
H.
Labor Relations/Occupational Safety/NotificationA/Vorkers
For any violation
or
failure to
Compensation/Wacie and Hour
comply with:
anywhere in the world including regulations promulgated under any such law, that governs the rights of
employees to engage in union or other collective bargaining activities, the duty of an employer to meet,
discuss or bargain with employee representatives, the enforcement of any collective bargaining
agreement or any grievance or arbitration proceedings, including but not limited to the National Labor
Relations Act, as amended. This exclusion does not apply to any Claim for retaliatory treatment against
any Insured who is attempting to exercise his or her rights under the above referenced statute, law, rule,
regulation or order;
1.
The
2.
The responsibilities, obligations, or duties imposed by any federal, state or local statutory or common law
anywhere in the world including regulations promulgated under any such law that governs workplace
safety and health, including but not limited to the Occupational Safety and Health Act, as amended. This
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Part

C.
exclusion does not apply to any Claim for retaliatory treatment against any Insured who is
exercise his or her rights under the above referenced statute, law, rule, regulation or order;
to
anywhere in the world including regulations promulgated under any such law that governs any obligation
of an employer to notify, discuss, or bargain with employees or others in advance of any plant or facility
closing or mass layoff, or any similar obligation, including but not limited to the Worker Adjustment and
Retraining Notification Act, as amended;
3.
The
4.
The
anywhere in the world including regulations promulgated under any such law that governs wage, hour
and payroll policies and practices (except the Equal Pay Act). Including but not limited to the Fair Labor
Standards Act,
5.
as
amended;
or
law concerning workers compensation, unemployment insurance, Social

any similar federal, state or local law anywhere in the world.
Any
or
V.
attempting
Security, disability benefits
SEVERABILITY OF EXCLUSIONS
No conduct pertaining to any Insured Individual shall be imputed to any other Insured Individual for the
purpose of determining the applicability of these exclusions. Any conduct pertaining to any past, present or future
Executive of an Insured Entity shall be imputed to such Insured Entity and its Subsidiaries.
VI.

A.
The Insurer shall have the right and duty to defend any Claim covered by this Coverage Part even if any
allegation of such Claim is groundless, false or fraudulent. The Insurer has no duty to defend any Claim or
pay Defense Expenses for Claims to which this insurance does not apply.
B.
The
C.
The Insureds shall provide all information in connection with any Claim and cooperate with the Insurer in the
investigation, defense and settlement of any Claim,
D.
No Insured shall settle any Claim, voluntarily make any

expense related to a Claim without the Insurer's consent.
E.
Insured's written consent to settle which shall not be unreasonably withheld. If any Insured refuses to
consent to the settlement of any Claim which the Insurer recommends and which is acceptable to the
claimant, subject to the applicable Limit of Liability or Retention, the Insurer's liability for all Loss from such
Claim shall not exceed:
right and duty to defend any Claim covered under this Policy shall cease when the Maximum Aggregate
Limit of Liability in Item 3. of the Fiduciary Declarations or the Combined Policy Aggregate Limit of Liability in
Item 3. of the Policy Declarations has been exhausted by the payment of Loss.
payment,
1.

2.
of such Loss in
excess
assume
including
any
obligation,
Defense
or
incur any
Expenses incurred
F.
The Insurer shall not seek repayment from an Insured Individual of any Defense Costs paid by the Insurer
that are deemed uninsured pursuant to Exclusion IV.C. Conduct, unless the applicable determination
standard set forth in such Exclusion has been met.
G.
If
we are
prevented by
law
or
otherwise unable to defend
or
investigate
Claim
brought
outside the United
States, the Insured under the Insurer's supervision may arrange for the investigation, appointment of
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counsel and defense of such Claim. Subject to the applicable Limit of Liability and Retention, the Insurer will
VII.
LIMIT OF LIABILITY
Regardless
limited
VIII.
as
Claims,
or
claimants, the Insurer's liability under this Coverage Part is
A.
If the Combined Policy Aggregate Limit of Liability in Item 3. of the Policy Declarations is elected, the
Fiduciary Declarations or the unpaid portion of the Combined Policy Aggregate Limit of Liability stated in Item
3. of the Policy Declarations, whichever is less.
B.
Fiduciary Declarations.
C.
The maximum liability for all Loss for civil penalties arising out of Section 502(c) of ERISA during the Policy
Period shall not exceed the ERISA 502(c) Limit stated in Item 3. of the Fiduciary Declarations. Such limit
shall be part of and not in addition to the Maximum Aggregate Limit of Liability stated in Item 3. of the
Fiduciary Declarations.
D.
The maximum
liability for all Loss for civil penalties arising out of the Health Insurance Portability and
Accountability Act of 1996 during the Policy Period shall not exceed the HIPAA Limit stated in Item 3. of the
Fiduciary Declarations. Such limit shall be part of and not in addition to the Maximum Aggregate Limit of
Liability stated in Item 3. of the Fiduciary Declarations.
RETENTION
A.
liability under this Coverage Part applies only to that part of covered Loss which is in excess of
Retentions stated in Item 4. of the Fiduciary Declarations. Such Retentions shall be considered
uninsured amounts and borne by the Insureds at their own risk.
The Insurer's
the
B.
IX.
of the number of Insureds,
follows:
applicable
If different parts of
Retentions will be
exceed the largest
Claim are subject to different Retentions in different Insuring Agreements the applicable
REPORTING
A.
An Insured shall provide the Insurer with written notice as soon as practicable after the Chief Executive
Officer, Chief Financial Officer, President, In-House General Counsel or any person with the responsibility for
the management of insurance claims, or any equivalent position, of an Insured Entity becomes aware of a
Claim, but in no event later than:
1.
Ninety (90) days
2.
The
expiration
expiration
or
Reporting Period,
termination:
if
or
applicable.
However if the Insurer sends written notice to the Named Insured stating that this Policy is being terminated
for nonpayment of premium, an Insured shall give the Insurer written notice of such Claim prior to the
effective date of such termination.
Form 907 1001 Ed. 01/14
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:lk,L0,0, P;i51,11:4024011.41:ifYlrl..-
the Policy Period or an applicable Extended Reporting Period, an Insured becomes aware of an act
circumstances that may subsequently give rise to a Claim and gives the Insurer notice of such act or
the Insured during the Policy Period in which the circumstances were first reported to, and accepted by the
Insurer, provided that any such subsequent Claim is reported to the Insu rer in accordance with paragraph A.
above.
If
during
or
X.
C.
An Insured must give to the Insurer the assistance, information and cooperation as the Insurer may require
circumstances, the nature of the alleged Wrongful Act, the nature and amount of alleged or potential
damage, the names of actual or potential claimants, and the manner in which the Insured first became aware
of the Claim, circumstances or alleged Wrongful Act.
D.
potential Claim,
must be
provided in writing
CHANGE OF PLANS
A.
Termination of Plan
If a Benefit Plan is terminated before or during the Policy Period, coverage under this Coverage Part shall
continue until the expiration or termination of this Coverage Part with respect to any Insured for Wrongful Acts
prior to the date the Benefit Plan was terminated.
B.
Pension Benefit Guaranty Corporation
If the Pension Benefit Guaranty Corporation becomes the Trustee of a Benefit Plan before or during the Policy
Period, coverage under this Coverage Part shall continue until the expiration or termination of this Coverage Part
with respect to any Insured for Wrongful Acts prior to the effective date the Pension Benefit Guaranty
Corporation became the Trustee of the Benefit Plan.
C.
Sale of Plan
a Benefit Plan is sold before or during the Policy Period, coverage under this
until the expiration or termination of this Coverage Part:
If
XI.
1.
With respect to any Insured for Wrongful Acts
2.
While the Benefit Plan
was
3.
If notice of such sale is
given
prior to
sponsored solely by
to the Insurer
an
prior to
Coverage
Part shall continue
the effective date the Benefit Plan
Insured
Entity;
the end of the
was
sold; and
and
Policy
Period.
ALLOCATION
If an Insured incurs Loss on account of any Claim and such Claim includes both covered and non-covered
matters, coverage with respect to such Claim shall apply as follows:
A.
One hundred percent (100%) of Defense Expenses on account of the Claim will be considered covered
Loss provided that this shall not apply to any Insured for whom coverage is excluded pursuant to Section
XV. Representations and Severability; and
B.
We shall fairly allocate all remaining loss that an Insured incurred on account of such Claim between
covered Loss and non-covered loss based upon the relative legal exposure of the parties to such matters.
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'-"1W1WINOANOMMLIngaLqg4ACUNAVANIIATAWMfiligett'
XII.
PRIORITY OF PAYMENTS
Liability
from any Claim covered under this Coverage Part exceeds the
stated in Item 3. of the Fiduciary Declarations then the Insurer shall:
arising
If Loss
XIII.
Part
---=!--tete.A.34CArtIVAIMMF.,..1U0ALOIS1marmx.
as
by
Insured Individual and
A.
First pay Loss incurred
B.
To the extent any remaining amount of the

Loss incurred by an Insured Entity.
an
applicable
remaining
available Limit of
Benefit Plan; and then
Limit of
Liability
remains available, the Insurer will pay
OTHER INSURANCE AND INDEMNITY

If other valid and collectible insurance (other than a policy that is issued specifically as excess of this Coverage
Part) is available to the Insured for Loss covered under this Coverage Part or if the Insured Individual is entitled
to indemnification from an Outside Entity, the insurance provided by this Coverage Part shall be excess of such
other insurance or indemnification regardless of whether or not such insurance is primary, contributory, excess,
contingent or whether such indemnification is actually made.
XIV.
PRESUMPTION OF INDEMNIFICATION
If an Insured Entity fails or refuses to indemnify an Insured Individual for Loss to the fullest extent permitted by
the Insured Entity's or Outside Entity's by-laws or through statutory or common law, then any payment by the
Insurer of such Loss shall be excess of the Insuring Agreement I.B. Compliance Resolution Coverage Retention
as set forth in Item 4 of the Fiduciary Declarations.
XV.

A.
B.
The declarations and statements in the Application for this Coverage Part are the Insured's
and the Insurer has relied on such representations when issuing this Coverage Part. Such
are incorporated into and constitute part of this Coverage Part.
shall be construed
separate Application by each Insured.
1.
The
2.

Application
as a
representations
representations
or
knowledge possessed by any Insured Individual
the Application contains any misrepresentations made with the intent to deceive or contains
misrepresentations which materially affect the acceptance of the risk or the hazard assumed by the Insurer
under this Policy, then no coverage shall be afforded for any Claim based upon, arising from, or in
If
consequence of, any such misrepresentation with respect to:

1.
Any Insured Individual who knew of such misrepresentations (whether
Application contained such

such Insured Individual; or
2.
XVI.
misrepresentations)
or
any Insured
not such individual knew such

to the extent it indemnifies any
or
Entity
Any Insured Entity if any past or present Chief Executive Officer, Chief Financial Officer or Chief
Information Officer (or any equivalent position) of the Insured Entity knew of such misrepresentation
(whether or not such individual knew such Application contained such misrepresentations).
RESCINDABILITY
Insured.
Form 907 1001
Ed. 01/14
or
rescind this
Policy
with respect to any
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Pd,!:'.7:i.,.c_:., Con ..4.-:..-.71ny tAcivanago

t
I:..
(is 'Hanover
PLEASE READ ALL TERMS AND CONDITIONS CAREFULLY
Policy
Number
LH4-8827059-07
Company
440 Lincoln Street
(A
Item 1.
Stock Insurance
Company,
herein called the
NAMED INSURED
Vemrna International Holdings, Inc

Item 2.
POLICY PERIOD
Inception Date: 08/01/2015 Expiration Date:
(12:01
Item 3.
08/01/2016
1)
INSURING AGREEMENTS, LIMITS OF LIABILITY AND RETENTIONS
Insuring Agreement
A.
Limits of Liability
Retentions
$2, 000, 000

$2, 000, 000
$50, 000
$2, 000, 000
$50, 000
$2, 000, 000
$50, 000
$2, 000, 000
$50, 000
Fidelity
1.
2.
3.
Theft
ERISA Fidelity
Client Property
Employee
Alteration
$0
B.
Forgery
C.
Premises
D.
Transit
Coverage
$2, 000, 000
$50, 000
E.
Computer Crime
1. Computer Fraud
2. Restoration Expense
$2, 000, 000

$50, 000
$50, 000
$2, 000, 000
$50, 000
$2, 000, 000
$50, 000
$2, 000, 000
$50, 000
F.
G.
or
Coverage
Credit, Debit
or
Charge
Card
$0
Fraud
H.
Money Orders and Counterfeit

Money
Insurer)
Document 1-3
Filed 04/15/16
a,
4_1
Crime Insurance
ow
Insuring Agreement (con't)

I.
J.
Item 4.

1. Forgery or Alteration
2. Identity Fraud
Reimbursement
Limits of Liability
to be
signed by
Eppinger,
President
Policy
Frederick H.
Coverage
Part
Retentions
$25, 000
$25, 000
$1, 000
$1, 000
$50, 000
$0
$9, 367.00
We have caused this
63 of 95
uvan, age
Hanover
1,
Page

countersigned where required by
Charles F. Cronin,
Secretary
duly
Document 1-3
Filed 04/15/16
Hanover
2.-...,
---1
ir...,
c.,
Page
Crime
64 of 95
Coverage
Part
premium paid, in reliance upon the statements in the Application and subject to the Crime
Declarations, limitations, conditions, definitions and other provisions of this Coverage Part, including endorsements
hereto, the Insurer and the Insureds agree

I.
follows:
as
INSURING AGREEMENTS
A.
Fidelity
1.
Employee Theft
The Insurer will pay the Insured for direct loss of or damage to Money, Securities or Other Property
sustained by an Insured resulting from Theft or Forgery committed by an Employee, whether identified or
not, acting alone or in collusion with others.
2.
ERISA Fidelity
The Insurer will pay an Employee Benefit Plan for direct loss of Money, Securities or Other Property
sustained by such Employee Benefit Plan resulting from fraudulent or dishonest acts, including larceny,
Theft, embezzlement, Forgery, misappropriation, wrongful abstraction, wrongful conversion and willful
misapplication, committed by a Fiduciary of any Employee Benefit Plan, whether identified or not, acting
alone or in collusion with others.
3.
Client
Property
The Insurer will pay the Insured for direct loss of or damage to Money, Securities or Other Property
sustained by the Insured's Client resulting from Theft committed by an identified Employee not in collusion
with such Client's employees.
B.
Forgery
or
Alteration
The Insurer will pay the Insured for loss

which is:
1.
Made, drawn by
2.
Made
which is
or
drawn
purported
or
by
directly caused by Forgery
or
alteration of
Financial Instrument
drawn upon the Insured;

one
acting
to have been
as
so
the Insured's
made
or
agent,
or
drawn.
If the Insured is sued for refusing to pay any written Financial Instrument on the basis that it has been
or altered, and the Insured has the Insurer's written consent to defend against the suit, the Insurer
will pay for any reasonable legal fees and expenses that the Insured incurs and pays in such defense. The
amount that the Insurer will pay is in addition to the Limit of Liability applicable to this Insuring Agreement.
forged
C.
Premises Coverage
The Insurer will pay the Insured for direct loss sustained
1.
Robbery, Theft or Safe Burglary, committed

the Premises or Banking Premises;
2.
Loss of
damage to Other
in the Premises; or
or
Burglary
3.
Damage to
Burglary;
4.
Damage
resulting
to
the Premises
from
containers.
Form 908 1001 Ed. 01/14
or
by
Property resulting
its exterior
resulting
by
the Insured
Third
from
from
resulting
Party, of Money
an
an
actual
actual
or
or
from:
and Securities located inside
attempted Robbery, Theft
or
Safe
attempted Robbery, Theft
or
Safe
locked safe, vault, cash register, cash box or cash drawer located inside the Premises
an actual or attempted Robbery or Safe Burglary of, or unlawful entry into such
Page
1 of 14
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Filed 04/15/16
65 of 95
Page
nover
(d$711t,
1, 111
D.
Crime
Coverage
Part
Transit Coverage
1.
the Insured
by
resulting
from:
Robbery or Theft of Money and Securities committed by a Third Party, or destruction or disappearance
Money and Securities, while In Transit and including while temporarily within the living quarters of a
Messenger.
of
2.
E.
Robbery or Theft of Other Property committed by

damage of Other Property, while In Transit.
Third
Party,
or
destruction, disappearance
Computer Crime
1.
Computer Fraud
Property resulting from Computer Fraud.
2.
the Insured of
by
Money, Securities
and Other
Program and Electronic Data Restoration Expense
Expense that the

replace damaged or destroyed Computer Programs or Electronic Data
Computer System directly caused by a Computer Violation.
The Insurer will pay the Insured for reasonable Restoration
Payment of reasonable Restoration Expense applies only if the

Computer Programs or Electronic Data from back-up data copies.
Insured incurs to restore or

stored within the Insured
Insured is unable to
of reasonable Restoration Expense will be made to the Insured upon the

restoration of the damaged or destroyed Computer Programs or Electronic Data.
Payment
F.
or
reproduce such
completion of
the

The Insurer will pay the Insured for direct loss of Money or Securities resulting from a Fraudulent
Instruction directing a financial institution to transfer, pay or deliver Money or Securities from the Insured
Transfer Account.
G.
Credit, Debit
or
Charge Card Fraud
The Insurer will pay the Insured for direct loss

committed by a Third Party.
H.
Money
Orders and Counterfeit
from Credit, Debit
resulting
Charge
Card Fraud
Money
The Insurer will pay the Insured for direct loss resulting from the Insured
exchange for merchandise, Money or Securities:
I.
or
any post office, express company
1.
Money orders issued by
2.
Counterfeit Money that is acquired during the regular
bank that
or
course
having accepted
are
not
paid
upon
in
good faith,
presentation;
in
or
of business.

1.
Personal Accounts Forgery
or
Alteration
The Insurer will pay the Insured for direct loss

promissory notes, or similar written promises, orders
from Forgery or alteration of checks, drafts,

directions to pay a sum certain in Money that are:
resulting
or
a.
Made, drawn
or
purported
to be made
or
drawn upon
b.
Made, drawn
or
purported
to be made
or
drawn
For the purposes of this Insuring

be treated the
Century Act, shall
Agreement,
same as
the
by
personal
someone
substitute check,
original
it
Ed. 01/14
acting
as an
Executive;
or
agent of the Executive.
defined in the Check
Clearing
for the 21st
replaced.
qta.,
Form 908 1001
as
accounts of the
le1r
Page
2 of 14
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Page
66 of 95
Hanover
I.
Crime
2.
The Insurer will reimburse the Insured, on behalf of the Executive, for
an Executive as a direct result of any Identity Fraud.
J.
Part
Coverage
Identity
Fraud
Expense incurred by
1.
The Insurer will pay the Insured for Investigative Expenses to determine the amount of loss covered
under any Insuring Agreement of this Coverage Part.
2,
The Insurer will pay the Insured for
Investigative Expenses after settlement
of covered loss.
DISCOVERY PERIOD
Coverage Part which is Discovered by the Insured:
A.
No later than
ninety (90) days
B.
No later than
one
prior
from the date of that cancellation; and
year from the date of that cancellation with
(1)
to the effective date of cancellation of this
regard
to any
Employee
Benefit Plan.
However, this extended period to Discover loss terminates immediately upon the effective date of any other
insurance policy obtained by the Insured, whether from the Insurer or another insurer, replacing in whole or in
part the coverage afforded under this Coverage Part, whether or not such other insurance policy provides
III.
DEFINITIONS
Banking Premises
depository.
means
portion
of any
building occupied by
banking institution
or
similar
safe
Client
means an
entity
for which the Insured
performs services for
fee
or
under written contract while that
contract is in effect.
Client's Premises
business.
Computer Fraud
means
means
the unlawful
taking
of
portion of
Money,
any
building
Securities
or
the Insured
Other
occupies
Property resulting
in
conducting
from
its
Computer
Violation.
set of related electronic instructions which direct the operations and functions of a
devices connected to it which enable the Computer System or devices to receive,
process, store, retrieve, send, create or otherwise act upon Electronic Data.
Computer.Program
Computer System
means a
or
Computer System means a computer and all input, output, processing, storage and communication facilities and
equipment which are connected to such a device and which the operating system or application software used by
the Insured are under direct operational control by the Insured. Off-line media libraries are deemed to be part of
such Computer System.
Computer Violation
means:
A.
A Computer Virus
B.
Vandalism directed solely to the Insured by a natural person,

unauthorized access to the Insured's Computer System.
designed
to
damage
or
destroy
Computer Program
or
including
Electronic Data;
an
Employee
or
who has
gained
Page
3 of 14
J1);.
Form 908 1001 Ed. 01/14
Filed 04/15/16
Document 1-3
ii.,,
AHanover
Computer Virus
A.
Directed
B.
That
provided
Crime
of unauthorized instructions,
means a set
solely against the Insured;
programmatic
Counterfeit Money
were
maliciously
imitation of
means an
Coverage
Part
otherwise:
and
propagates themselves through the Computer System

such instructions
or
67 of 95
Page
introduced
Money
by
or
networks;
natural person.
that is intended to deceive and to be taken
as
genuine.
Credit, Debit or Charge Card Fraud means the Forgery or alteration of, on or in, any written instrument required
in connection with any transaction involving any credit, debit or charge card issued to the Insured, or at the
Insured's request to any Employee.
Custodian means the Insured, or any of the Insured partners or Members, or any Employee while having care
and custody of Money, Securities or Other Property inside the Premises, excluding any person while acting as
a
Watchperson
Digital Signature
with
janitor.
or
electronic identifier created by computer, within, attached to,

adopted by a person with the intent to sign the record.
means an
record, and executed
or
logically
associated
or
Discover, Discovered or Discovery means the time when an Executive or individual responsible for placing
insurance, first becomes aware of facts which would cause a reasonable person to assume that a loss of a type
covered by this
Coverage
Part has been
or
will be incurred and includes loss:

to such loss may not
yet be known;
A.
Where the details, act
B.
Which does not exceed the Retention set forth in Item 3. of the Crime
C.
Which is sustained
D.
Which is the subject of an actual or potential claim in which it is alleged that an Insured is liable to
Party under circumstances which, if true, would constitute a loss under this Coverage Part.
Electronic Data
prior
means
acts
or
to the
facts
A.
Which does not
provide
B.
Which is stored
on
causing
or
or
inception
contributing
instructions
electronic
or
directions to a
processing
Declarations;
Coverage Part;
date of any coverage under this
media for
form usable in
by
Third
Computer System:
Computer System;
use
or
or
Computer Program.
Electronic Signature means a Digital Signature, an electronic sound, symbol or process, within, attached to,
logically associated with a record and executed or adopted by a person with the intent to sign the record.
Employee
A.
B.
or
means:
Any
natural person:
1.
While in the Insured's service and for the first sixty (60) days immediately after termination of service,
unless such termination is due to Theft or any other dishonest act committed by the Employee;
2.
Who the Insured compensates
3.
Who the Insured has the
right
directly by salary,
wages
natural person who is
1.
To substitute for an
leave of absence; or
Employee
2.
To meet seasonal
short-term work load conditions;
or
commissions; and
performing
services for the Insured.
furnished to the Insured:
Any
temporarily
or
as
set forth in
paragraph
A. above, who is
on
medical, military
subject to the Insured's direction and control and performing services for the
any such person while having care and custody of Money, Securities or Other
outside the Premises.
while such person is
excluding, however,
Form 908 1001 Ed. 01/14
or
other
Insured,
Property
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Hanover
Ii
^.111.1.
1,
111'
Crime
Coverage
Part
C.
Any natural person who is leased to the Insured under a written agreement between the Insured and a labor
leasing firm, to perform duties related to the conduct of the Insured's business, but does not mean a
temporary employee as described in paragraph B. above.
D.

1.
2.
A trustee, officer,
employee, administrator or manager, except

Employee Benefit Plan; or
independent
contractor of any
A director
trustee of the Insured while that person is
or
engaged
an
in
administrator
or
handling Money,
manager who is
Securities
or
an
Other
Property of any Employee Benefit Plan.

E.
natural person:
Any
1.
Who is
former Employee, partner, Member,

services for the Insured;
Manager,
or
Executive retained
as
consultant while
performing
2.
Who is
3.
While
4.
Who is
non-compensated officer;
acting
having
as a
non-compensated fund solicitor during fund raising campaigns;
or
guest student or intern pursuing studies or duties, excluding, however, any such
and custody of Money, Securities or Other Property outside the Premises.
F.
Any attorney retained by the Insured, while performing legal services for the Insured.
G.
Any Employee
H.
Any of the Insured Managers, directors
I.
person while
care
of
an
entity merged
or
consolidated with the Insured

or
prior to
the effective date of this
Policy.
trustees while:
acts within the scope of the usual duties of
Em ployee;
1.
Performing
2.
Acting as a member of any committee duly elected or appointed by resolution of the Insured's board of
directors or board of trustees to perform specific, as distinguished from general, directorial acts on the
Insured's behalf.
Any Employee included
above while
on
an
or
military service.
However, Employee does not include any agent, broker, factor, commission merchant,
contractor or representative of the same general character.
consignee, independent
Employee Benefit Plan means any welfare or pension benefit plan sponsored by an Insured Entity whether or
subject to the Employee Retirement Income Security Act of 1974 (ERISA), as amended, and as amended by
the Pension Protection Act of 2006, which is operated solely by an Insured Entity or jointly by an Insured Entity
and a labor organization for the benefit of Employees, provided that the Employee Benefit Plan shall not include
any multi-employer plans.
not
Executive means an Insured Entity's owner, natural person partner, member of the board of directors, member
of the board of trustees, officer, risk manager, in-house general counsel, Manager, or Member.
means checks, drafts or similar written promises, orders or directions to pay a sum certain
Money, that are made, drawn by or drawn upon an Insured Entity or by anyone acting as an Insured Entity's
agent, or that are purported to have been so made or drawn.
Financial Instrument
in
Forgery means the signing of the name of another person or organization with intent to deceive. It does not mean
signature which consists in whole or in part of one's own name signed with or without authority, in any capacity,
for any purpose.
Fraudulent Instruction
A.
means:
An electronic, telegraphic, cable, teletype, telefacsimile or telephone instruction which purports to have been
transmitted by the Insured, but which has in fact been fraudulently transmitted by someone else without the
Insured's
Form 908 1001
knowledge
Ed. 01/14
or
consent;
Page
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Hanover
Crime
B.
Coverage Part
a Financial Instrument, issued by the Insured, which was forged or altered

other than the Insured without the Insured's knowledge or consent, or which purports to have
been issued by the Insured, but was in fact fraudulently issued without the Insured's knowledge or consent;
A written instruction, other than
by
someone
or
C.
telegraphic, cable, teletype, telefacsimile, telephone or written instruction initially received by

the Insured which purports to have been transmitted by an Employee, but which was in fact fraudulently
transmitted by someone else without the Insured's or the Employee's knowledge or consent.
An electronic,
Fraud means the act of knowingly transferring or using, without lawful authority, a means of identification
of an Executive with the intent to commit, aid or abet any unlawful activity that constitutes a violation of federal
law or a felony under any applicable state or local law.
Identity
Identity Fraud Expense
means:
A.
Costs of notarizing fraud affidavits or similar documents for credit agencies, financial institutions, merchants
or other credit grantors that have required that such affidavits be notarized;
B.

credit grantors;
C.
Costs for long distance telephone calls to law enforcement agencies, credit agencies, financial
merchants or other credit grantors to report or discuss any actual Identity Fraud;
D.
Lost wages, up to a maximum payment of one thousand dollars

of five (5) weeks, as a result of absence from employment:
agencies,
credit
1.

merchants or other credit grantors;
2.
To
3.
Due to
complete
name;
fraud affidavits
wrongful
provided,
being dismissed
similar documents;
or
incarceration
agencies,
financial institutions, merchants
($1, 000.00)
legal counsel,
credit
per week for
agencies,
institutions,
maximum
period
or
arising solely from someone having committed a crime

apply in the case of wrongful incarceration
in the Executive's
absent all charges
acquittal.
original application
E.
because the lender received incorrect credit information.
F.
Reasonable attorney fees incurred, with the Insurer's prior written consent, for:
is
rejected solely
1.
Defense of lawsuits brought against the Insured Executive

by financial institutions, merchants,
2.
against
3.
G.
Challenging
other
financial institutions,
that lost wages shall not

or an
or
the accuracy
or
or
civil
judgments wrongly
completeness

the Policy Period.
entered
of any information in
solely
as a
a consumer
But, Identity Fraud Expense does not include any expense
or
the Insured Executive;
or
credit report.
Identity
loss not listed in
other
Fraud Discovered
paragraphs
A.
through
during
G. of this
definition.
In Transit
custody of
custody of
Insured
being conveyed by the Insured outside the Premises, from one place to another and in the
Messenger, an armored motor vehicle carrier, or another person authorized by the Insured to have
Money, Securities or Other Property.
means
means
any Insured
Investigative Expenses
costs such as Employee
Form 908 1001 Ed. 01/14
Entity and
any
Employee
Benefit Plan.
means reasonable and necessary expenses (expenses other than internal corporate
salaries and wages) incurred by the Insured with the Insurer's prior written consent to
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F6nover
swor
Crime

Client.
Manager
means a
Member
means an owner
serve as a
serving
of
in
limited
Investigative Expenses
directorial
capacity for
Part
shall not include expenses incurred
limited
by
any
liability company.
liability company represented by
its
membership interest, who also may
Manager.
Messenger
means
while having
Money
person
covered loss.
Coverage
a relative thereof, or Employee

Property outside the Premises.
Executive, Member, Manager, including
any
and custody of
care
Money,
Securities
or
Other
of
an
Insured
means:
coins and bank notes in current
A.
Currency,
B.
Travelers checks,
register
use
and
having
face value; and
checks and money orders held for sale to the
public.
Property
any tangible property other than Money and Securities that has intrinsic value. Other
not
does
include
Computer Programs, Electronic Data, or Computer Systems or any property
Property
Other
means
specifically excluded
Premises
means
under this
Coverage
Part.
the interior of that portion of any
building
the Insured
occupies
in
conducting
business.
Restoration Expense means reasonable costs incurred by the Insured to reproduce Computer Programs or
Electronic Data and enable the Insured to restore the Insured Computer System to the level of operational
capability that existed immediately preceding a Computer Violation.
However, Restoration Expense does not include:

A.
Internal corporate costs and expenses,
including Employee remuneration and any
costs related to any
legal
action;
B.
Expenses incurred as a result of the reconstruction of Computer Programs or Electronic Data recorded on
media, including, but not limited to, magnetic or optical media if there are no analyses files, specifications or
backups of Computer Programs or Electronic Data held outside the Premises;
C.
Expenses incurred as a result of the reconstruction

Insured knowingly uses illegal copies of programs;
D.
Expenses incurred to render the Computer Programs and Electronic

E.
Expenses incurred to design, update

operation or performance; or
F.
as a result of alteration in Computer Programs and Electronic Data held on magnetic

media due to the effect of magnetic fields, incorrect usage of the Computer Programs and Electronic Data,
or the obsolescence of the Computer System.
or
of
Computer Programs
improve Computer Programs
or
and Electronic Data if the
Data usable
Electronic Data
by replacement
or
to
perfect their
Expenses incurred
Robbery means the unlawful taking of Money, Securities

person by one who has:
A.
Caused
B.
Committed
Safe
or
Burglary
threatened to cause that person

an
obviously
means
bodily harm;
unlawful act witnessed
the unlawful
by
or
Other
Property from the
and
custody of
or
that person.
taking of:
A.
Money, Securities or Other Property from within a locked safe or vault

safe or vault as evidenced by marks of forcible entry upon its exterior; or
B.
A safe
or
care
by
person
unlawfully entering
the
vault from inside the Premises.
n..
Form 908 1001 Ed. 01/14
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Hnover
in..,
a_...
i, f,
Crime
Part
Coverage
111K IVO .t.t.k.
Securities means
and includes:
A.
Tokens, tickets,
revenue
and
nonnegotiable
instruments
and other stamps
or
contracts
representing Money
(whether represented by
actual stamps
or
which cards
are
or
Other
Property
unused value in
in current use; and
meter)
B.
negotiable
or
charge cards,
not issued
by
the
Insured;
Theft
means
Third
Party
Money.
means a
taking
person other than
an
to the
deprivation of
Insured
or
an
lnsu red
or
Client.
Employee.
Transfer Account means an account maintained by the Insured at a financial institution from which the Insured
can initiate the transfer, payment or delivery of M oney or Securities:
By means of electronic, telegraphic, cable, teletype, telefacsimile

directly through an electronic funds transfer system; or
B.
By means of written instructions (other than those described in Insuring Agreement

conditions under which such transfers are to be initiated by such financial institution
funds transfer system.
or
Watchperson means any person the Insured retains specifically to have

or Other Property inside the Premises and who has no other duties.
IV.
telephone instructions communicated
A.
care
and
I.B.) establishing the

through an electronic
custody of Money, Securities
EXCLUSIONS
A.
For the purpose of all

1.
Insuring Agreements
this
Coverage
Part shall not
cover:
Partners
Loss resulting from Theft, or any other dishonest act, committed by a natural person partner of an
Insured Entity, whether acting alone or in collusion with others. However this Exclusion shall not apply
to Insuring Clause A.2. ERISA Fidelity.
2.
Prior Dishonesty
Loss caused by an Employee which is sustained by the Insured after
a Theft or any other dishonest or criminal act which is:
3.
a.
Valued at one thousand dollars

or in the service of an Insured;
b.
Valued at
c.
Committed
($1, 000)
or
more, committed
twenty-five thousand dollars ($25,000)

employment or service with an Insured; or
more
than
Employees, Managers,
or
or more,
by
an
such
Executive, becomes
Employee
committed
by
such
while
aware
employed
with
Employee prior
to
ninety (90) days following the termination of such Employee.

Executives
Loss resulting from Theft or any other dishonest act committed by an Employee, Manager, Member
Executive whether acting alone or in collusion with others or while performing services for the Insured
otherwise, except when covered under Insuring Agreements A.1., A.2. and A.3. of this Coverage Part.
4.
of
or
or
Loss
resulting from:
Form 908 1001
Ed. 01/14
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1,,
a.
b.
5.
Crime
The unauthorized disclosure of the Insured's confidential information including, but not limited to,
patents, trade secrets, Electronic Data, Computer Programs, processing methods or customer
lists: or
held by the Insured including, but not limited to, financial information, personal information, credit
card information or similar non-public information.
Governmental Action
resulting from expropriation, nationalization,

Property by order of governmental authority.
Loss
6.
Part
Coverage
seizure
destruction of
or
Money,
Securities
or
Other
Indirect/Consequential Loss
Loss that is
indirect
an
or
consequential
loss of any kind
including,
inability to realize income that the Insured would

damage to Money, Securities or Other Property;
but not limited to, loss
resulting
have realized had there been
from:
loss of
a.
The
b.
Payment of damages of any type for which the Insureds are legally liable. However, The Insurer will
pay compensatory damages arising directly from a loss covered under this Coverage Part;
c.
Payment of Investigative Expenses except

Coverage Part;
d.
Payment of costs, fees or other

Coverage Part; and
when covered under
expenses the Insureds incur in
no
Insuring Agreement
establishing
or
U. of this
the existence of loss
under this
e.
7.
Fines, penalties, multiple
or
punitive damages
that the Insured's incur.
Legal Fees, Costs and Expenses

Fees, costs and expenses incurred by the Insured which are related to any
covered under Insuring Agreement I.J. of this Coverage Part.
8.
legal action, except
when
Trading
Loss resulting directly or indirectly from trading, whether in the Insured's name or in a genuine
fictitious account, However, the Insurer will pay for loss resulting directly from trading in a genuine
fictitious account when covered under Insuring Agreements A.1., A.2. or A.3. of this Coverage Part.
9.
or
damage resulting from:
a.
War, including undeclared
b.
Warlike action
c.
or
civil war;
by a military force, including action in hindering or defending against an actual or

expected attack, by any government, sovereign or other authority using military personnel or other
agents;
or
Insurrection, rebellion, revolution, usurped power,
hindering
or
For the purpose of

1.
or
War and Military Action

Loss
B.
or
defending against
Insuring Agreement
or
action taken
by governmental authority
in
any of these.
A.
Fidelity,
this
Coverage Part shall
not
cover:
Inventory Shortage
Loss
or
a.
An
b.
that
part of
any
loss, the proof of which
as
to its existence or amount is
dependent
upon:
or

-11.-pmfir4istsArg""-----
Form 908 1001 Ed. 01114
Page
9 of 14
Filed 04/15/16
Document 1-3
Page
73 of 95
Hnover
_.n.
Crime
Pdrt
Coveragc.
However, where the Insured establishes wholly apart from such computations that the Insured has
sustained
inventory
2.
a loss, then the Insured may offer the Insured's

in support of the amount of loss claimed.
records and actual
physical
count of
Warehouse Receipts
Loss resulting from the fraudulent or dishonest
C.
inventory
For the purpose of
Insuring Agreements I.C. Premises
signing, issuing, canceling
and I.D. Transit
or
failing
cancel,
to
Coverage, this Coverage
Part shall not
cover:
1.
Accounting
Exchanges
or
or
Omissions
arithmetical
errors or
omissions.
Purchases
from the
giving
or
surrendering
of
Money,
Securities
or
Other
Property
in any
exchange
purchase.
Fire
Loss
4.
or
resulting
Loss
or
3.
Arithmetical Errors
resulting from accounting
Loss
2.
or
or
damage resulting
a.
Loss of
b.
Loss from
or
from fire, however caused, except:
damage to Money, Securities; and
damage
to
safe
or
vault.
Money Operated Devices

Loss of Money, Securities or Other Property contained in any money operated device unless the
amount of Money deposited in it is recorded by a continuous recording instrument in the device.
5.
Motor Vehicles
Loss of
them.
6.
or
Loss of or
to
Equipment and Accessories
damage
or
Transfer
or
to motor
vehicles, trailers
or
semi-trailers
or
equipment
and accessories attached to
Surrender
damage to Money, Securities or Other Property after it

or place outside the Premises or Banking Premises:
has been transferred
or
surrendered
person
a.
b.
As
result of
threat to do
bodily
c.
As
result of
threat to do
damage
d.
As
result of
threat to introduce
e.
As
result of
threat to introduce
harm to any person;
to
Money, Securities
or
Other
Property;
denial of service attack into the Insured's Computer System;

virus
or
other malicious instruction into the Insured's Computer

or corrupt data or Computer Programs stored within
System which is designed to damage, destroy

the Insured's Computer System;
As
f.
result of
threat to contaminate,
pollute
or
render substandard the Insured's products
result of
divulge
or
utilize:
or
goods;
or
g.
Form 908 1001
As
1)
The Insured's confidential information;
2)
Weaknesses in the
Ed. 01/14
source
or
code within the Insured's
Computer System.
Page
10 of 14
Document 1-3
Filed 04/15/16
Page
74 of 95
.Hanover
(w.ir
Crime
Coverage Part
However, this Exclusion does not apply with respect to Insuring Agreement I.D. Transit
Money, Securities or Other Property while

Messenger, if the Insured:
of
a)
Had
no
knowledge
b)
Had
knowledge
of
of any Threat at the time the conveyance

a
Coverage,
outside the Premises in the care and
Threat at the time the conveyance
began;
began,
to loss
custody of
or
but the loss
was
not related to
the Threat.
7.
Vandalism
Loss from damage to the Premises or its exterior, or to any safe, vault, cash
drawer or Other Property by vandalism or malicious mischief.
8.
cash box, cash
Voluntary Parting
Loss resulting from the Insured
induced by any dishonest act to
Other Property.
D.
register,
For the purpose of

1.
or anyone acting on the Insured's express

voluntarily part with title to or possession of
Insuring Agreement
I.E.
Computer Crime, this Coverage
or
implied authority, being

Money, Securities or
any
Part shall not
cover:

Loss resulting from the use or purported use of credit, debit, charge, access, convenience, identification,
stored-value or other cards or the information contained on such cards.
2.

Loss resulting from a Fraudulent Instruction directing a financial institution
Money or Securities from the Insured's Transfer Account.
3.
transfer, pay
or
deliver
Inventory Shortages
Loss
E.
to
or
a.
An
b.
that part of any loss, the
profit
proof
of which
as
to its existence
or
amount is
dependent upon:
or
and loss computation.
For the purpose of

resulting from the
Insuring Agreement
use
of
I.F. Funds Transfer Fraud, this Coverage Part shall not cover loss
cause a transfer of Money, Securities or Other
computer to fraudulently
Property.
V.
LIMIT OF LIABILITY
A.
Regardless of the number of Insureds, the most the Insurer

Liability set forth in Item 3. of the Crime Declarations.
B.
If a direct loss is covered under more than one Insuring Agreement, the maximum the Insurer will pay for
such loss shall not exceed the largest Limit of Liability applicable under any such Insuring Agreements.
C.
All loss resulting from a single act or any number of acts of the same Employee or Third Party, and all loss
whether such act or acts occurred before or during the Policy Period, will be treated as a single loss and the
applicable Limit of Liability set forth in Item 3. of the Crime Declarations will apply, subject to Section Xl.
Liability for Prior Losses.
D.
All loss covered under Insuring

for Insuring Agreement I.E.1.
Form 908 1001
Ed. 01/14
Agreement
will pay for each loss is the
applicable Limit of
I.E.2. shall be part of, and not in addition to, the Limit of
Page
Liability
11 of 14
Document 1-3
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:IL.,1Hanover
E.
VI.
Page
Crime
All loss covered under

the applicable Insuring
75 of 95
Coverage
Insuring Agreement J. shall be part of, and not in addition to,

Agreement as set forth in Item 3. of the Crime Declarations.
the Limit of
Part
Liability
for
RETENTION
A.
The Insurer's liability under this Coverage Part applies only to that part of loss which is
applicable Retentions stated in Item 3. of the Crime Declarations.
B.
If a loss is subject to different Retentions, in different Insuring Agreements, the applicable Retentions will be
applied separately to each part of such loss but the sum of such Retentions shall not exceed the largest
C.
If an Insured receives payment under another policy or bond, after applying a deductible or retention for loss
also covered under this Coverage Part, then the applicable Retention set forth in Item 3. of the Crime
Declarations shall be reduced by the deductible or retention previously applied to such loss.
D.
If
loss is covered under Insuring Agreements E.1. and E.2., then

E.1. shall be applicable.
only
the Retention for
excess
loss under
of the
Insuring
Agreement
VII.
DISCOVERY AND PROOF OF LOSS

A.
Knowledge possessed by any Insured

by or Discovery by all Insureds.
B.
Upon Discovery, the Named Insured shall provide the Insurer with written notice of any loss or potential
loss as soon as practicable, but in no event later than one hundred eighty (180) days after an Executive,
chief information officer or any person responsible for the management of the Insured's insurance claims, or
any equivalent position, Discovers such loss or potential loss. The Named Insured shall:
1.
Furnish to the Insurer
proof
or
of loss,
Discovery by
duly
sworn
any Insured shall be deemed
to, with full particulars, within
knowledge possessed
one
hundred
eighty (180)
days after Discovery.
VIII.
2.
Submit to examination under oath at the Insurer's request;
3.
Produce for the Insurer's examination all
4.
Cooperate with the Insurer in the
pertinent records; and
investigation and settlement
of any loss
or
claim.
ADDITIONAL PREMISES OR EMPLOYEES
If, during the Policy Period, the Insured establishes any additional Premises or hires additional Employees,
other than through consolidation or merger with, or purchase or acquisition of assets or liabilities of another entity,
such Premises and Employees shall automatically be covered under this Coverage Part. Notice to the Insurer
of an increase in the number of Premises or Employees, which did not result from a consolidation, merger,
purchase or acquisition of another entity, need not be given and no additional premium need be paid for the
remainder of the Policy Period shown in the Crime Declarations.
IX.
EMPLOYEE BENEFIT PLANS

A.
If any
Employee
Part, the Insured
Form 908 1001 Ed. 01/14
Benefit Plan is insured jointly with any other Employee Benefit Plan under this Coverage
or the Plan Administrator must select a Limit of Liability for Insuring Agreement LB. of this
Page
12 of 14
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Filed 04/15/16
Page
76 of 95
Hanover
__A
Crime
Coverage
Part
Coverage Part that is sufficient to provide a Limit of Liability for each Employee Benefit Plan that is at least
equal to that required by ERISA if each Employee Benefit Plan were separately insured. Then, if at the time
a loss is discovered the Limit of Liability is not equal to or greater than that required by ERISA, the Insurer
agrees to automatically increase the Limit of Liability to equal the amount required under ERISA.
B.
If the Named Insured is an entity other than an Employee Benefit Plan, any payment the Insurer makes for
loss sustained by any Employee Benefit Plan will be made to the Employee Benefit Plan sustaining the
loss.
C.
If two
or more
1.
Sustained
2.
Of
Employee
by
two
Benefit Plans
or more
are
Employee
commingled Money, Securities
or
Insureds under this
Benefit Plans;
Other
Coverage Part,
any payment for loss:
or
Property
of two
or more
Employee
Benefit Plans;
will be made to each Employee Benefit Plan sustaining loss in the proportion that the Limit of Liability
required for each Employee Benefit Plan bears to the total Limit of Liability of all Employee Benefit Plans
sustaining loss.
D.
X.
No retention shall
apply
to loss sustained
by
an
Employee
Benefit Plan covered under this
Coverage Part.
DISCOVERY BASIS
Subject to Section VIII. Change in Control or Exposure of the Common Policy Terms and Conditions and Section
XI. Liability for Prior Losses of this Coverage Part, coverage under this Coverage Part is available for loss
sustained at any time and Discovered during the Policy Period.
XI.
LIABILITY FOR PRIOR LOSSES

If this Coverage Part replaces a policy that provided the Insured with an extended period of time after termination
in which to discover loss and which did not terminate at the time this Coverage Part became effective the Insurer
will not pay for loss that occurred during the Policy Period of that prior policy which is Discovered by the
Insured during the extended period to Discover loss, unless the amount of loss exceeds the limit of liability and
retention amount of that prior policy. In such case, the Insurer will pay for the excess loss subject to the terms
and conditions of this Coverage Part. Any payment the Insurer makes for the excess loss will not be greater than
the difference between the limit of liability and retention amount of that prior policy and the Limit of Liability shown
in Item. 3. of the Crime Declarations. The Insurer will not apply the Retention shown in the Crime Declarations to
this excess loss.
XII.
OWNERSHIP
A.
as stated in XIII.B. below, Money, Securities and Other Property covered under this Coverage Part
applies only to Money, Securities and Other Property owned or leased by an Insured or for which the
Insured is legally liable and provided that coverage shall only apply to damage to Premises if the Insured is
the owner or is legally liable for such damage.
B.
With respect to Insuring Agreement I.A.3, Client Property, Money, Securities and Other Property covered
under this Coverage Part applies only to Money, Securities and Other Property that a Client owns or
leases or for which the Client is legally liable while the Money, Securities and Other Property is inside the
Client's Premises.
Except
Form 908 1001 Ed. 01/14
Page
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Page
77 of 95
Hanover
Crime Cov,.:rage Part
XIII.
VALUATION AND SETTLEMENT
The Insurer shall pay:

A.
The actual market value of lost, damaged or destroyed Securities at the closing price of such Securities on
the business day immediately preceding the day on which a loss is Discovered; or the cost of replacing
Securities, whichever is less, plus the cost to post a Lost Instrument Bond;
B.
The cost of blank books, pages

or other records;
C.
The least of:
or
tapes
1.
The actual cash value of the Other
2.
The cost to
repair
or
or
other blank materials to
Property;
replace property, other
at the time the Parent Organization

of proof of loss;
complies
replace lost or damaged
books of account
or
than
precious metals, with
with Section VII.
Discovery
that of similar
quality
and Proof of Loss,
and value,
regarding
the
furnishing
XIV.
D.
The United States of America dollar value of Money of the country in which the loss or damage occurred as
determined by the rate of exchange published in The Wall Street Journal on the day the loss is Discovered.
E.
The United States of America dollar value of any precious metals as determined by The Wall Street Journal
Cash Prices, Precious Metals, on the day loss involving such precious metals is Discovered.
REPRESENTATIONS
The declarations and statements in the Application for this Coverage Part are representations and the Insurer
has relied on such representations when issuing this Coverage Part. Such representations are incorporated into
and constitute part of this Coverage Part.
XV.
TERMINATION OF PRIOR BONDS OR POLICIES
Any prior bonds
or
policies issued by the Insurer or any subsidiary or affiliate of the

already terminated, as of the inception of this Coverage Part.
Hanover Insurance
Company
shall terminate, if not
XVI.
RESCINDABILITY
Insured.
y.
Form 908 1001
Ed. 01/14
or
rescind this
Policy
with respect to any
ftfetr:
Page
14 of 14
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Filed 04/15/16
Page
78 of 95
r_...._. . 1 Hanover
(.Endorsement
in,
Coverage
Part: Crime
Issued
By:
Hanover Insurance
A.
Holdings,
Policy
Inc
Company
premium charged
it is
agreed
that:
Item 3.F. of the Crime Declarations is amended to include:
Limits of
B.
Number: LH4-8827059-07
Section I.F. of
Retentions
$50, 000
$50, 000
False Pretenses
Insuring Agreements
Liability
Funds Transfer Fraud--False Pretenses

The Insurer will pay the Insured for direct loss of Money or Securities
directing an Employee to transfer, pay or deliver Money or Securities.
C.
Pretenses
resulting from False
Section III. Definitions is amended to include:

False Pretenses means the fraudulent misrepresentation of a material fact, including but not limited to social
engineering, pretexting, phishing, spearfishing or any other confidence trick, by a person purporting to be an
Employee, Vendor or Client, to an Employee who is authorized by an Insured Entity to transfer Money or
Securities or instruct another Employee to transfer Money or Securities.
Vendor means a natural person or entity that has provided goods or services to an Insured Entity pursuant to
Vendor does not mean a financial institution, bank, credit union,
a written agreement or other arrangement.
asset manager, broker-dealer, or any other financial institution, an armored motor vehicle company or any
similar entity.
Section IV. Exclusions,
paragraphs
C.8. and E.
are
deleted in their
entirety.
Form MANU Ed. 05-15
headings
in this endorsement
are
solely
Page
for
1 of 1
Document 1-3
Filed 04/15/16
JVL
..ilk
I-ta' nover
Ci:^)(1
11-,
'.r.li,
Page
Co ';.1,-1 o
79 of 95
:1 v
PLEASE READ THIS COVERAGE PART CAREFULLY TO DETERMINE THE RIGHTS, DUTIES, COVERAGE AND
Policy Number
LH4-8827059-07
Company
440 Lincoln Street
(A Stock
Item 1.
Insurance
Company,
herein called the
NAMED INSURED
Item 2.
POLICY PERIOD
Inception
(12:01
Item 3.
Date: 08/01/2015
Expiration Date: 08/01/2016
INSURING
AGREEMENTS, LIMITS OF LIABILITY AND RETENTIONS
Insuring Agreements
A.
1)
Kidnapping
and Extortion for
Limits of Liability
Retentions
$1, 000, 000
$0
$1, 000, 000
$0
$1, 000, 000
$0
$1, 000, 000
$0
Ransom
B. Transit
C.
Coverage
Expense Coverage
D. Accidental Loss
Coverage
Loss of Life Benefit Amount:
100%
Mutilation:
Accidental Loss Other than

Loss of Life
E.
or
Mutilation:
Legal Liability Coverage
F. Political
Repatriation Coverage
100/0
$1, 000, 000
$10, 000
$50, 000
$0
Insurer)
Document 1-3
Filed 04/15/16
Pn/1.0
(z-s'
Page
80 of 95
(7ornp...--__:.y
i\dva: :t.(c.,
/H,
1
n over
Kidnap
& Ransom
Coverage Part
1,
Insuring Acreements(con't)
Item 4.
G.
Disappearance Investigation
Coverage
H.
Hostage
Crisis Costs
Retentions
Limits of Liability
Coverage
$50, 000
$0
$50, 000
$0
$1, 652.00
We have caused this
Policy
Frederick H.
to be
signed by
countersigned
Eppinger,
President
Charles F. Cronin,

where
required by
duly
Secretary
1.4Zit
Document 1-3
Filed 04/15/16
Page
81 of 95
HAN
4Hanover
Irv.ur;ince
Cmitr
Underwritten
by
Company
NOTICE: THIS APPLICATION IS FOR A CLAIMS-MADE POLICY. SUBJECT TO ITS TERMS, THIS POLICY WILL
APPLY ONLY TO CLAIMS FIRST MADE AGAINST THE INSUREDS DURING THE POLICY PERIOD OR ANY
APPLICABLE EXTENDED REPORTING PERIOD. PLEASE READ THE POLICY CAREFULLY.
APPLICATION INSTRUCTIONS
I.
Application, the term "Applicant" shall mean the Named Insured and all subsidiaries or
organizations applying for coverage, unless otherwise stated.
Include all requested underwriting information indicated in Section Xl. below.
Complete the relevant sections of this application and any Supplemental Applications in accordance with the
coverages being requested.
Whenever used in this

other
II. GENERAL INFORMATION

1.
Name of
2.
Address of
Applicant:
Vemma Nutrition
Applicant: 1621
W. Rio Salado Parkwa
State:
City: Tempe
3.
Company
Name and Address (if different than above) of

information regarding the proposed policy):
Primary Contact (Executive
Name: Chris Reid
Individual
Telephone:
(480) 927-8999
Officer authorized to receive notices and
Title: General Counsel
Address 1621 W. Rio Salado

4.
Zip Cod85281
AZ
Parb City: Tempe
responsible for human
resources or
employment
State:
AZ
law matters
(Loss
Zip
Code:
Prevention services
Name: Mary Sullivan
Title: Human Resources Director
E-Mail Address:
Telephone: (480) 927-8999
Mary.Sullivanvemma.com
5.
State of incorporation:
AZ
6.
Is the
by
7.
Does the applicant have any of the following:

Subsidiaries domiciled outside the U.S.?
a.
b. Branch or representative offices outside the U.S.?
c.
Joint ventures or partnerships with third parties outside the U.S.?
d. Sales outside the U.S.?
If "Yes", please attach details including the country(ies), nature of operations, and
Applicant
names
owned
of venture
Date established:
85281
contact):
9/4104
DYes IZNo
foreign (Non-U.S.) organization?
EYes
0Yes
EYes
OYes
DNo
ENo
DNo
ENo
partners including percentage ownership.
8.
Within the past 12 months, has there been any change (resignations, departures,
retirements, etc.) in the position of the Chairman of the Board, President, Chief
Executive Officer or Chief Financial Officer (or equivalent positions)?
If "Yes", please attach the following details: Name of individual(s); date of change; and
reason for change.
9.
In the next 12 months (or during the past 18 months) is the Applicant contemplating
has the Applicant completed or been in the process of completing):
a.
Any merger, acquisition, or divestment?
b. Any change in outside auditors?
Form 904 7002 APP Ed. 01/14
DYes ONo
(or
DYes ONo
DYes [2:INo
Page
1 of 9
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Document 1-3
Page
82 of 95
iq -Jvc:
HI''nover
Group
OYes ZINo
1,7jYes ONo
C.
Any reorganization or arrangement with creditors under federal or state law?
d. Any branch, location, facility, office, or subsidiary closings, consolidations or layoffs?
If "Yes" to any part of Question 9, please attach an explanation.
10. In the past 12 months has the Applicant commenced offering any
services for a fee?
If "Yes", please attach a full description of the details.
additional
new or
0Yes
LjlYes ONo
11. Is the Applicant in compliance with all debt and/or loan covenants?
If "No" please attach a full explanation
12. Please
complete
the
following financial
Year,
Month
or
information for the most recent fiscal year
check box if
attaching
most recent
Financial Data
No
year-end
(indicate month/year):
financial statements instead:
Current Year
Lii
Previous Year
Total Revenue:
24, 933, 455
139, 000, 000
Total Assets:
21, 984, 534
23, 510, 000
Current Liabilities:
5, 698, 555
6, 765, 000
1, 281, 000
1,402, 000
Total Liabilities:
7, 225, 592
8, 167, 000
Retained
22, 272, 159
2,478, 000
14, 758, 940
15, 343, 000
Long
Term Debt:
Earnings:
Shareholders'
Equity:
Net Income:
Cash Flow From
13. Please
provide
Operating
the
following
Number of
Activities:
information
regarding
Employees
Full Time
(include Independent Contractors):
Part Time
(include
leased and
seasonal):
the
-666, 499
$-2, 728, 000
-350, 000
$-1, 000, 000
Applicant's employees.
110
1
1
Located in California:
Previous Year
Current Year
(CoOwn
Located outside the U.S.:
Independent
Contractors:
HI. REQUESTED COVERAGE

Indicate below which coverages
coverage.
are
being requested. Complete only
those sections of this
Application
which
pertain
to
requested
Coverage
VJ
Part
Form 904 7002 APP Ed. 01/14
Entity Liability
Requested Llmit(s)
higher limits than expiring
requested limit,
Check the box if requesting
and indicate
0 $5, 000, 000
Page 2 of 9
Filed 04/15/16
Document 1-3
Page
83 of 95
r4.,Z
.41Hanover.
1.
ho
Insuuncr:
Croup.
5, 000, 000
Fiduciary Liability
1, 000, 000
Crime
2, 000, 000
Cyber Privacy
VI
Kidnap & Ransom Coverage
Coverage
&
Security Coverage
a:.-;:::,
.):....:J:
1, 000, 000
If requesting larger liability limits than expiring as indicated in the above

not complete this question if no change in liability limits is requested.
table, please
answer
the
following question.
Do
Is any Insured proposed for coverage aware of any fact, circumstance, or situation that might reasonably be
to result in a Claim that would fall within the scope of the proposed Liability Coverage Parts?
expected
Yes
If "Yes" please attach
IV.
1.
full
description
No
of the details.
DIRECTORS AND OFFICERS LIABILITY INFORMATION

the past 12 months, has the Applicant
been involved in, any of the following:
During
of,
a.
b.
or
or
any
organization
or
person
proposed for coverage
Anti-trust, copyright or patent litigation?

Civil, criminal or administrative proceeding alleging violation of any Federal
or
State
been the
subject
EYes ONo
EYes ZNo
securities laws?
or administrative proceeding alleging violation of any Federal or State
Fair Trade Law?
d. Any other criminal actions?
e.
Any action for suspension or revocation of a license, authority or for any
professional disciplinary sanction?
If "Yes" to any of the above in Question 1, attach a full description of the details.
EYes ZNo
2.
Other than those identified in your response to Question 1 above, has any claim been
brought at any time during the past 12 months against (i) any Applicant or (ii) any
proposed insured individual in his or her capacity as a director or officer of any entity?
If "Yes" please attach a full description of the details.
EYes END
3.
Please provide the following information regarding the

If additional space is needed please attach.
c.
Civil, criminal
Anti-Trust
or
EYes IZINo
EYes 12]No
Applicants ownership.
Total Number of Shareholders:
Director
or
Officer Shareholders
Percentage of Voting
Shares Owned
Fepresented on Applicant's Board of

Directors or Board of Managers
Benson K. BorevIco
74 .33%
EYes ENo
Karen L. Boreyko
1 3 51
1 2. 1 6%
2Tie-sONo
D. Lynne Boreyko
2Yes END
EYes ENo
Form 904 7002 APP Ed 01/14
Page 3 of 9
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Page
84 of 95
ri'V :-1
'Hanover
.Casj.
111Nurjnc
Croup
rNon-Director and Non-Officer Individual and
Represented
Percentage
of Voting
Shares Owned
Corporate Shareholders
on
Applicant's Board of
Managers
Directors or Board of
DYes uNo
DYes oNo
------DYes DNo
DYes ON()
4.
owners
5.
security
more
Applicant participate
Franchising?
Does the
a.
DYes ONo
holder own, or have the right to own, directly and/or beneficially 10

of the Applicants outstanding shares or units? If "Yes", please identify
and percentage shares owned.
Does any
percent or
in any of the
following
activities:
b. Joint Ventures?
If "Yes" please attach list of franchises and joint ventures
DYes VINo
0Yes ONo
including percentage ownership.
[Tf.---EMPLOYMENT PRACTICES LIABILITY INFORMATION

1.
In the past 12 months has the Applicant updated its employment practices handbook,
human resources policies and procedures?
If "Yes" please attach a copy of updated materials and a description of changes.
or
[Z]Yes ONo
2.
In the past 12 months has the Applicant experienced, or in the next 12 months is the
Applicant planning, layoffs or a reduction in workforce?
If "Yes" and if such lay off or reduction in workforce is more than 5% of the workforce or
more than 50 employees, please respond to the following:
Provide a description of the Applicant's procedures for conducting a staff reduction
a.
and management level/positions involved in this process.
b. Does the Applicant analyze whether protected classes will be adversely impacted as
ZYes ENo
result of a staff reduction?

Is the analysis reviewed by outside counsel?
Does the Applicant utilize consistent criteria to determine which
IZ1Yes [No
0Yes ONo
a
c.
d.
employees
ZYes DNo
MYes ONo
will be
impacted?
e.
3.
written
severance
and waiver agreement in
WYes
place?
In the past 12 months has the Applicant:

Been involved in litigation regarding wrongful termination, harassment or
a.
discrimination?
b. Received notice of an investigation from the Equal Employment Opportunity
Commission?
If "Yes" please attach a copy of updated materials and a description of changes.
DYes [ZINo
DYes ONo
FIDUCIARY LIABILITY INFORMATION
VI.
1.
Does the applicant have
Please list the names and
(Do
Plan Names;
i
not include health &
I
welfare plans),
types of Applicant's employee benefits plan(s). Attach additional pages if needed.
Plan Assets
Type
(Most current
year)
of
Plan*
401k
DC
Funding (DI3 only)

Under
by
or
Over Funded
than 25%
more
DYes ONo
Number of
Plan
Third Party or Outside

Administrators
Participants
American Funds
70
DYes ONo
Dyes :No
Defined Contribution
(DC), Defined Benefit (DB), Employee Stock Ownership (ESOP),
Form 904 7002 APP Ed. 01/14
Excess Benefit
or
Top
Hat
(EBP)
Page 4 of 9
Document 1-3
Filed 04/15/16
Page
85 of 95
N,i,
2
2.
ilrrotirinoc r;rolirr
Are all
If "No,
plans in compliance
please describe:
:;i:.-:,
I.S.'.
with
plan agreements
ZYes ONo
and ERISA?
3.
In the past 12 months has there been, or is there currently under consideration in the next
12 months, any restructuring, spin-off, transfer, consolidation, merger, termination or other
similar transaction of any employee benefit plan?
If "Yes", please attach a full description with details.
Eyes ZNo
4.
During the past 12 months, has there been, or is there currently, any investigation by the
IRS, Department of Labor (DOL) Pension Benefit Guarantee Corporation (PBGC), or any
other State or Federal Agency of any employee benefit plan or any current or former
fiduciary of such employee benefit plan?
If "Yes" please attach a full description of the details.
EYes ZNo
VII.
1.
1-,,,,, ':i R
CYBER'PRIVACY AND SECURITY COVERAGE

Please
provide
following:
the
Number of Customer/Patient Records: 1, 063, 429

Number of Online Customers: 1.028, 910
Total Number of IP Addresses Assigned: 75 Public IP's Assigned
Number of Active IP Addresses: 43 Active
Gross Revenue from on-lines sales or services:
Estimated Number of Credit Card Transactions if applicable:
2.
Please indicate the
provider's systems
type of information that the

and networks.
LI Credit Card Numbers

Social
Security
Numbers
Email Addresses
O Medical Information
National ID Numbers
LI Drivers' License Numbers
Applicant
CI Race,
collects and which resides
Ethnicity,
National
on
the
VI Salary
Origin
and
or
service
Compensation
LI Data Regarding Sexual Orientation

0 Account Numbers
D Criminal Records
0 Financial Data
0 Civil Judgments
El Clients' Intellectual Property
(i.e. credit rating)

V Passwords, Including PINs
3.
past 12 months has the Applicant entered into agreements with third-party service
providers for back up of electronic data, web-site hosting, processing or maintenance of
sensitive data, maintenance of applications or infrastructure hosting?
If "Yes" to any of the above please attach a list of providers and services offered.
4.
Have there been any changes in the Applicant's policies and

Information Security
b. Web Server Security
c.
Virus, Intrusion Detection and Penetrating Testing
d. Mobile Device Security
Business Continuity Planning
e.
Incident Response Planning
f.
If "Yes" to any of the above p/ease attach an explanation.
Disability
In the
Status
EYes ZNo
procedures regarding:
Eyes ZNo
Eyes ZNo
Eyes ZNo
Eyes ZNo
Eyes oNo
Eyes ZNo
a.
5.
Has an external system security assessment, other than vulnerability

tests, been conducted within the past 12 months?
6.
Has the Applicant had any computer or network security incidents during the past 12
months?
Incident includes any unauthorized access or exceeding authorized access to any
computer, system, data base or data; intrusion or attack; the denial of use of any
Form 904 7002 APP Ed. 01/14
Applicant's
scans or
penetration
Eyes ZNo
EYes [21No
Page 5 of 9
Filed 04/15/16
Document 1-3
Page
86 of 95
OVER
Hanover
2Ylbo
Insuronc:c
Group
computer or system; intentional disruption, corruption

programs
7.
applications
or
or
destruction of electronic data,
similar incidents.
If the Applicant has been the target of any computer

did the number of attacks increase?
1 VIII.
1.
or
network attacks in the
or
LI
past year
No attacks
Yes, increased
CRIME COVERAGE
Does the Applicant:
Allow the employees who reconcile the monthly bank statements to also:
I.
Sign checks?
ii.
Handle deposits?
Have access to check signing machines or signature plates?
a.
2.
3.
EYes cliNo
EYes [2jNo
EIYes ONo
0Yes ENo
Does the Applicant verify invoices against a corresponding purchase order, receiving
report and the authorized master vendor list prior to issuing payment?
Does the Applicant have procedures in place to verify the existence and
vendors prior to adding them to the authorized master vendor list?
12Yes ZNo
ownership of all
new
IX.
1.
KIDNAP & RANSOM COVERAGE
Complete the following information regarding the foreign
travel of the
Applicant:
P/ease attach additional pages if needed.
Country Visited
Number of annual
trips
lengtITT
Average
of stay
Number of
employees
traveling
Numbia of
independent
contractors
traveling
3
Colombia
Mexico
Hong Kong
Munich
Ireland
2.
Describe the Applicant's security precautions

security consultants:
Bodyguard in Mexico and Colombia
X.
MATERIAL CHANGE
3 5
while
traveling,
both domestic and international,
including
use
of
If any of the Applicants discover or become aware of any significant change in the condition of the Applicant between the
date of this Application and the Policy inception date, which would render the Application inaccurate or incomplete,
notice of such change will be reported in writing to us immediately and any outstanding quotation may be modified or
withdrawn.
Form 904 7002 APP Ed. 01/14
Page 6 of 9
Document 1-3
Filed 04/15/16
Page
87 of 95
lira` nover..
in`411-MICC
I XL
DECLARATIONS, NOTICE AND SIGNATURES
The submission of this Renewal Business Application does not obligate the Insurer to issue, or the Applicant to
purchase, a policy. The Applicant will be advised if the Application for coverage is accepted. The Applicant hereby
authorizes the Insurer to make any inquiry in connection with this Application.
undersigned, acting on behalf of all Applicants, declare that to the best of their knowledge and belief, after
reasonable inquiry, the statements set forth in this Application and in any attachments or other documents submitted
with the Application are true and complete. and were made to obtain requested information from each and every
Applicant proposed for this insurance to facilitate the proper and accurate completion of this Application.
The
undersigned agree that the information provided in this Application and any material submitted herewith are the
representations of all the Applicants and the basis for issuance of the insurance policy should a policy providing the
requested coverage be issued, and that the Insurer will have relied on all such materials in issuing any such policy. The
undersigned further agree that the Application and any material submitted herewith shall be considered attached to and
a part of the Policy. Any material submitted with the Application shall be maintained on file (either electronically or paper)
The
with
us.
The information requested in this Renewal Business Application is for

notice to the Insurer under any policy of a Claim or potential Claim.
underwriting purposes only and does
not constitute
NOTICE TO ALABAMA APPLICANTS: Any person who knowingly presents a false or fraudulent claim for payment of a
loss or benefit or who knowingly presents false information in an application for insurance is guilty of a crime and may be
subject to restitution fines or confinement in prison, or any combination thereof.
Claim Expenses are Inside the Policy Limits. All claim
NOTICE TO ARIZONA AND MISSOURI APPLICANTS:
expenses shall first be subtracted from the limit of liability, with the remainder, if any, being the amount available to pay
for damages.
NOTICE TO ARKANSAS, LOUISIANA AND WEST VIRGINIA APPLICANTS: Any person who knowingly presents a
false or fraudulent claim for payment of a loss or benefit or knowingly presents false information in an application for
insurance is guilty of a crime and may be subject to fines and confinement in prison.
NOTICE TO COLORADO APPLICANTS: It is unlawful to knowingly provide false, incomplete, or misleading facts or
information to an insurance company for the purpose of defrauding or attempting to defraud the company. Penalties may
include imprisonment, fines, denial of insurance, and civil damages. Any insurance company or agent of an insurance
company who knowingly provide false, incomplete, or misleading facts or information to a policy holder or claimant for the
purpose of defrauding or attempting to defraud the policy holder or claimant with regard to a settlement or award payable
from insurance proceeds shall be reported to the Colorado Division of Insurance within the Department of Regulatory
Agencies.
NOTICE TO DISTRICT OF COLUMBIA APPLICANTS:
Warning:
It is
crime to
provide
false
or
misleading
information
to an insurer for the purpose of defrauding the insurer or any other person. Penalties include imprisonment and/or fines.
In addition, an insurer may deny insurance benefits if false information materially related to a claim was provided by the
applicant.
NOTICE TO FLORIDA APPLICANTS: Any person who knowingly and with intent to injure, defraud or deceive any
insurer files a statement of claim or an application containing any false, incomplete, or misleading information is guilty of a
felony of the third degree.
NOTICE TO HAWAII APPLICANTS: For your protection, Hawaii law requires you to be informed that presenting a
fraudulent claim for payment of a loss or benefit is a crime punishable by fines or imprisonment, or both.
NOTICE TO IDAHO AND OKLAHOMA APPLICANTS: Any person who knowingly, and with intent to injure, defraud or
deceive any insurer, makes any claim for the proceeds of an insurance policy containing any false, incomplete or
misleading information is guilty of a felony.
NOTICE TO KANSAS APPLICANTS: Any person who commits a fraudulent insurance act is guilty of a crime and may
be subject to restitution, fines and confinement in prison. A fraudulent insurance act means an act committed by any
person who, knowingly and with intent to defraud, presents, causes to be presented or prepares with knowledge or belief
that it will be presented to, or by an insurer, purported insurer or insurance agent or broker, any written statement as part
of, or in support of, an application for insurance, or the rating of an insurance policy, or a claim for payment or other
benefit under an insurance policy, which such person knows to contain materially false information concerning any
material fact thereto; or conceals, for the purpose of misleading, information concerning any fact material thereto.
Form 904 7002 APP Ed. 01/14
Page 7 of 9
:CI\ HaIrmitonc^
Filed 04/15/16
Document 1-3
Page
88 of 95
H IN:
I,.
riover.
Croup,
NOTICE TO KENTUCKY APPLICANTS: Any person who knowingly and with intent to defraud any insurance company
other person files an application for insurance or statement of claim containing any materially false information, or
conceals for the purpose of misleading information concerning any fact material thereto, commits a fraudulent insurance
act, which is a crime.
NOTICE TO MAINE, TENNESSEE, VIRGINIA, AND WASHINGTON APPLICANTS: It is a crime to knowingly provide
false, incomplete or misleading information to an insurance company for the purpose of defrauding the company.
Penalties include imprisonment, fines and denial of insurance benefits.
NOTICE TO MARYLAND APPLICANTS: Any person who knowingly or willfully presents a false or fraudulent claim for
payment of a loss or benefit or knowingly or willfully presents false information in an application for insurance is guilty of a
crime and may be subject to fines and confinement in prison.
NOTICE TO MICHIGAN APPLICANTS: Any person who knowingly and with intent to defraud an insurance company or
another person files an application for insurance containing any materially false information, or conceals for the purpose
of misleading information concerning any fact material thereto, commits a fraudulent act, which is a crime and subjects
the person to criminal and civil penalties.
NOTICE TO NEW JERSEY APPLICANTS: Any person who knowingly includes any false or misleading information on
an application for an insurance policy or files a statement of claim containing any false or misleading information is
subject to criminal and civil penalties.
NOTICE TO NEW MEXICO AND RHODE ISLAND APPLICANTS: Any person who knowingly presents a false or
fraudulent claim for payment of a loss or benefit or knowingly presents false information in an application for insurance is
guilty of a crime and may be subject to civil fines and criminal penalties.
NOTICE TO OHIO APPLICANTS; Any person who, with intent to defraud or knowing that he is facilitating a fraud against
an insurer, submits an application or files a claim containing a false or deceptive statement is guilty of insurance fraud.
NOTICE TO OREGON APPLICANTS: Any person who knowingly and with intent to defraud or solicit another to defraud
any insurance company: (1) by submitting an application, or (2) by filing a claim containing a false statement as to any
material fact, may be violating state law.
NOTICE TO PENNSYLVANIA APPLICANTS: Any person who knowingly and with intent to defraud any insurance
company or other person files an application for insurance or statement of claim containing any materially false
information, or conceals for the purpose of misleading, information concerning any fact material thereto commits a
fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalties.
NOTICE TO VERMONT APPLICANTS: Any person who knowingly presents a false statement in an application for
insurance may be guilty of a criminal offense and subject to penalties under state law.
or
Application must be signed by the chief executive officer or chief financial officer
authorized representatives of the person(s) and entity(ies) proposed for this insurance.
Note: This
the
Date
Most recent CPA
Most recent CPA Letter to
O Fiduciary Liability:
O Employment
prepared
if
copy of the
following
Management
and
Management's
Applicant seeking coverage:
response. If this Letter is not issued, check here:
Liability: include any applicable offering

has
an
memoranda
ESOP, include most recent stock valuation report
Liability (for Applicants
Form 904 7002 APP Ed. 01/14
for every
financial statements
Applicant
Practices
Applicant acting
Title
Signature
Supporting Documentation: please attach
of the
with 500
or more
employees):
Page 8 of 9
as
Document 1-3
Filed 04/15/16
Page
89 of 95
Group
El Employee
handbook
ID Employment application
LI
Most recent EEO-1
ID
Third
Produced
party policies
By: Agent:
Agency Taxpayer
and statements, if
Rrarl Arnett
requesting such coverage
Agency:
Arnett
Insurance
Services
ID or SS No.:
Agent License No.:

Address
form
Agent Signature.
(Street, City, State, Zip):_385G_E_Baseline_Road_tion,mesa.Az_8520E___
Form 904 7002 APP Ed. 01/14
Page 9 of 9
Document 1-3
Filed 04/15/16
90 of 95
HA
A'
(7.-'
1;1riart
over
Group-
ra n cc
by The
Uncle/written
(For
Page
Limits Less than
Hanover Insurance
Company
$1, 000, 000)
APPLICATION INSTRUCTIONS
I.
Whenever used in this Application, the term "Applicant" shall

for coverage, unless otherwise stated.
mean
the Named Insured and all subsidiaries
or
other
organizations applying
IL
GENERAL INFORMATION
1. Name of Applicant: Vemma Nutrition Company

(First Named Insured and all additional insureds. Attach separate sheet if necessary.)
2. Principal Address: 1621 W. Rio Salado Parkway, Tempe, AZ 85281
3. Date Business Established: 9/9/04

4. Effective Date of
5. Do you want
If yes,
6.
Applying
7.
Description
list
Benefit Plans to be added
of
Named Insureds?
OYes EINo
Benefit Plans: 401k
Employee
Organization: ['Partnership
Activity: [Manufacturer
00ther (explain)
['Service
9. Describe the
as
ZPrimary Coverage 0Excess Coverage
for:
8. Predominant
Coverage: 8/1/15
Employee
please
Latest Fiscal Year End Revenues: 146, 000.000
products
or
IZCorporation
[Processor
Multi-Level
services of your
ELLC
['Proprietorship
I:Wholesaler EDistributor
['Retailer
Maltetng_Comparly_
predominant activity: Liquid Nutritional, Dietary Supplements. Energy Drinks
Weight Loss Shakes

10. Who
by
name
and title
11. Total number of
12. Number of
owns
111
employees:
employees
the firm? Vemma International
Number of Officers:
who handle, have
13. For Non-Profits: Number of
Holdings, Inc.
custody of,
or
maintain records of money, securities
Non-Compensated Officers,
Board Members and the like
or
requiring
other
property
coverage:
14. Number of Domestic Locations:
Manufacturing
15.
Foreign
Warehouses
Distribution Centers
Retail
Locations:
Country
Form 904 7006 APP Ed. 01/14
Type of Operation
Number of
Employees
Revenues
(if applicable)
Page
1 of 6
Document 1-3
Filed 04/15/16
Page
91 of 95
Group
III. COVERAGE REQUESTED
Coverage Requested
Limit(s)
of
Liability
Retentions
Fidelity
50, 000
2, 000, 000
2, 000, 000
2, 000, 000
50, 000
2, 000, 000
50, 000
2, 000, 000
50, 000
2, 000, 000
50, 000
2, 000, 000
10, 000
50, 000
1, 000
2, 000, 000
50, 000
2, 000, 000
50, 000
Money
2, 000, 000
50, 000

1. Forgery or Alteration
2, Identity Fraud Reimbursement
2, 000, 000
10, 000
50, 000
1, 000
25, 000
1. Employee Theft
2. ERISA Fidelity
3. Client Property
Forgery
or
Premises
Transit
Alteration
Coverage
Coverage
Crime
1. Computer Fraud
2. Restoration Expense
Computer
Credit, Debit
Money
Other
or
Charge
Card Fraud
Insuring Agreements
added
by
endorsement
IV. CURRENT CRIME INSURANCE INFORMATION

IMPORTANT: The Insurer will rely upon the declarations and statements contained in any prior application(s) submitted
and the Applicant understands and agrees that those declarations and statements will be incorporated into any policy
issued by the Insurer.
1. Current Crime Insurance
Check if
Programs
insurance Carrier
Primary
or
none:
Policy
LI
Period:
Retention
Limit of Liability
Expiring
Premium
IExcess?
I
2.
Do you presently have any crime coverage in effect

or Business Owners' Policy?
if yes, please provide:
insurance Carrier
Policy
Number
on a
Commercial Package
Policy
Period
Policy
Elves ENo
Limit of Liability
Retention
1
1
Form 904 7006 APP Ed. 01/14
Page 2 of 6
Document 1-3
Filed 04/15/16
Page
92 of 95
jHa'nover
irvoir, mcc
Group.
3. Has any similar insurance been declined

If yes, please explain:
or
Check if none: 0
Experience:
During the last 3 years: (Attach separate
cancelled
during
the
Oyes
past three years?
No
(Not applicable in Missouri)
4. Loss
r- [-V.
sheet with
Date
Description of Loss
explanation
if necessary.)
Amount of Loss
Corrective Action Taken:
Insurance
Rec.overy
AUDIT PROCEDURES AND OTHER INTERNAL CON ROLS
1. Is an independent CPA firm involved in the

If yes, what is the level of accounting?
applicant's financial reporting?
EYes DNo
0Audit 0Review 0Compilation

report?
VlYes ONo ON/A
Board of Directors?
EYes ONo ON/A
2. Are all subsidiaries and locations included in the annual financial
3. Is the audit report rendered

4. Does the financial
5. Is there
directly
to the Owners
or
Zves ONo
report include inventory?
internal audit by an Internal Audit Department under the control of

who is a public accountant or equivalent?
If yes, to whom are the reports rendered?
an
Oyes [2:1No
an
employee
6.
Are internal audits conducted

locations?
7.
Are bank accounts reconciled at least
on a
regular and surprise basis and do they
cover
all
EYes ONo
monthly?
8. Can the person who reconciles bank accounts also:

Sign Checks?
Have access to check-signing machines or signature
Oyes
Oyes
0Yes
0Yes
plates?
Accept Deposits?
Prepare Bank Deposits?
9. Is countersignature required on checks?
If "Yes", are all checks countersigned?
If "No", over what dollar value is countersignature
ONo
ONo
ViNo
ENo
0Yes F0No
Oyes ONe
required?
10. Are all financial systems structured so that no one individual can control
from beginning to end (segregation of duties)?
Form 904 7006 APP Ed. 01/14
Oyes ONo ON/A
transaction
Oves ONo
Page 3 of 6
Document 1-3
Filed 04/15/16
Page
93 of 95
4 i>
t..
th
Insur.mcc
VI.
Group..
I-NSIDE & OUTS--I6E- THE PREMISES EXPOSURE
Maximum
Exposure Inside
The Premises:
Location
Tempe,
Cash
Checks and
Other Securities
Safes?
10, 000
AZ
1
Do you use an armored motor vehicle company to
If no, please complete the following:
Maximum
Exposure Outside
or
System?
[ZYes ONo
0Yes ONo
EYes ONo
DYes ONo
DYes [No
['Yes ONo
securities?
DYes ENo
The Premises:
Location
Tempe,
transport money
Alarm
AZ
Cash
20, 000
Checks and
Number of
Number of
Securities
Messengers
Guards
Safety Satchel
EYes ONG
DYes ENo
DYes DNo
VII. NOTICE AND SIGNATURES

NOTICE TO ALABAMA APPLICANTS: Any person who knowingly presents a false or fraudulent claim for payment of a
loss or benefit or who knowingly presents false information in an application for insurance is guilty of a crime and may be
subject to restitution fines or confinement in prison, or any combination thereof:
NOTICE TO ARIZONA AND MISSOURI APPLICANTS:
Claim Expenses are Inside the Policy Limits. All claim
expenses shall first be subtracted from the limit of liability, with the remainder, if any, being the amount available to pay
for damages.
NOTICE TO ARKANSAS, LOUISIANA AND WEST VIRGINIA APPLICANTS: Any person who knowingly presents a
false or fraudulent claim for payment of a loss or benefit or knowingly presents false information in an application for
insurance is guilty of a crime and may be subject to fines and confinement in prison.
NOTICE TO COLORADO APPLICANTS: It is unlawful to knowingly provide false, incomplete, or misleading facts or
information to an insurance company for the purpose of defrauding or attempting to defraud the company. Penalties may
include imprisonment, fines, denial of insurance, and civil damages. Any insurance company or agent of an insurance
company who knowingly provide false, incomplete, or misleading facts or information to a policy holder or claimant for the
purpose of defrauding or attempting to defraud the policy holder or claimant with regard to a settlement or award payable
from insurance proceeds shall be reported to the Colorado Division of Insurance within the Department of Regulatory
Agencies.
NOTICE TO DISTRICT OF COLUMBIA APPLICANTS: Warning: It is a crime to provide false or misleading information
an insurer for the purpose of defrauding the insurer or any other person. Penalties include imprisonment and/or fines.
In addition, an insurer may deny insurance benefits if false information materially related to a claim was provided by the
to
applicant.
Form 904 7006 APP Ed. 01/14
Page 4 of 6
Document 1-3
Filed 04/15/16
Page
94 of 95
4HSnover
In%urancc
Group
NOTICE TO FLORIDA APPLICANTS: Any person who knowingly and with intent to injure, defraud or deceive any
insurer files a statement of claim or an application containing any false, incomplete, or misleading information is guilty of a
felony of the third degree.
NOTICE TO HAWAII APPLICANTS: For your protection, Hawaii law requires you to be informed that presenting a
fraudulent claim for payment of a loss or benefit is a crime punishable by fines or imprisonment, or both.
NOTICE TO IDAHO AND OKLAHOMA APPLICANTS: Any person who knowingly, and with intent to injure, defraud or
deceive any insurer, makes any claim for the proceeds of an insurance policy containing any false, incomplete or
misleading information is guilty of a felony.
NOTICE TO KANSAS APPLICANTS: Any person who commits a fraudulent insurance act is guilty of a crime and may
be subject to restitution, fines and confinement in prison. A fraudulent insurance act means an act committed by any
person who, knowingly and with intent to defraud, presents, causes to be presented or prepares with knowledge or belief
that it will be presented to, or by an insurer, purported insurer or insurance agent or broker, any written statement as part
of, or in support of, an application for insurance, or the rating of an insurance policy, or a claim for payment or other
benefit under an insurance policy, which such person knows to contain materially false information concerning any
material fact thereto; or conceals, for the purpose of misleading, information concerning any fact material thereto.
NOTICE TO KENTUCKY APPLICANTS: Any person who knowingly and with intent to defraud any insurance company
or other person files an application for insurance or statement of claim containing any materially false information, or
conceals for the purpose of misleading information concerning any fact material thereto, commits a fraudulent insurance
act, which is a crime.
NOTICE TO MAINE, TENNESSEE, VIRGINIA, AND WASHINGTON APPLICANTS: It is a crime to knowingly provide
false, incomplete or misleading information to an insurance company for the purpose of defrauding the company.
Penalties include imprisonment, fines and denial of insurance benefits.
NOTICE TO MARYLAND APPLICANTS: Any person who knowingly or willfully presents a false or fraudulent claim for
payment of a loss or benefit or knowingly or willfully presents false information in an application for insurance is guilty of a
crime and may be subject to fines and confinement in prison.
NOTICE TO MICHIGAN APPLICANTS: Any person who knowingly and with intent to defraud an insurance company or
another person files an application for insurance containing any materially false information, or conceals for the purpose
of misleading information concerning any fact material thereto, commits a fraudulent act, which is a crime and subjects
the person to criminal and civil penalties.
NOTICE TO NEW JERSEY APPLICANTS: Any person who knowingly includes any false or misleading information on
an application for an insurance policy or files a statement of claim containing any false or misleading information is
subject to criminal and civil penalties.
NOTICE TO NEW MEXICO AND RHODE ISLAND APPLICANTS; Any person who knowingly presents a false or
fraudulent claim for payment of a loss or benefit or knowingly presents false information in an application for insurance is
guilty of a crime and may be subject to civil fines and criminal penalties.
NOTICE TO OHIO APPLICANTS: Any person who, with intent to defraud or knowing that he is facilitating a fraud against
an insurer, submits an application or files a claim containing a false or deceptive statement is guilty of insurance fraud.
NOTICE TO OREGON APPLICANTS: Any person who knowingly and with intent to defraud or solicit another to defraud
any insurance company: (1) by submitting an application, or (2) by filing a claim containing a false statement as to any
material fact, may be violating state law.
NOTICE TO PENNSYLVANIA APPLICANTS: Any person who knowingly and with intent to defraud any insurance
company or other person files an application for insurance or statement of claim containing any materially false
information, or conceals for the purpose of misleading, information concerning any fact material thereto commits a
fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalties.
NOTICE TO VERMONT APPLICANTS: Any person who knowingly presents a false statement in an application for
insurance may be guilty of a criminal offense and subject to penalties under state law.
It is understood that the first premium upon the Policy applied for, and subsequent premiums thereon, are due at the
of each premium period, that the Underwriter is entitled to additional premiums because of any unusual
increase in the number of Employees or Premises and that the Applicant agrees to pay all such premiums promptly. The
Employees of the Applicant have all, to the best of the Applicant's knowledge and belief, while in the service of the
Applicant always performed their respective duties honestly. There has never come to its notice or knowledge any
beginning
Form 904 7006 APP Ed 01/14
Page 5 of 6
Document 1-3
Filed 04/15/16
Page
N A
4Hanover
insurducc
95 of 95
Croup
information which in the judgment of the Applicant indicates that any of the said
knowledge as any officer signing for the Applicant may now have in respect to his own
to the Applicant, is not imputable to the Applicant.
Note: This supplemental application must be signed by the Risk Manager
Undersigned hereby affirms that the information rendered herein and attached
Employees are dishonest. Such

personal acts or conduct unknown
or an officer of the Named Insured. The

hereto is current, true & complete.
Signature:
Date:
Name and Title
Hanover Bond No
Agency
Code:
Produced By: Agent:
Rmd Arnett
Agent Signature:
Agent License No.:
Agency Taxpayer
Agency: __Arnett
Address
ID or SS No.:
insurance Services_
(Street, City, State, Zip):
Form 904 7006 APP Ed. 01/14
3850 F Baseline Road #10
Mesa, A7 85706
Page 6 of 6
Document 1-4
Filed 04/15/16
EXHIBIT 3
Page
1 of 85
Document 1-4
Filed 04/15/16
Page
2 of 85
11.a mover
Privacy Policy and Producer Compensation Practices Disclosures
Privacy Policy Disclosure
personal information so that we may offer quality products and services. This information may
include, but is not limited to, name, address, Social Security number, and consumer reports from
consumer reporting agencies in connection with your application for insurance or any renewal of
insurance. For example, we may access driving records, insurance scores or health information. Our
information sources will differ depending on your state and/or the product or service we are providing to
you. This information may be collected directly from you and/or from affiliated companies, non-affiliated
third parties, consumer reporting agencies, medical providers and third parties such as the Medical
We collect
Information Bureau.
non-public, personal information you provide, as required to conduct our business and
permitted
required by law. We may share information with our insurance company affiliates or with
third parties that assist us in processing and servicing your account. We also may share your information
with regulatory or law enforcement agencies, reinsurers and others, as permitted or required by law.
We may disclose
or
as
companies may share information with their affiliates, but will not share information with
non-affiliated third parties who would use the information to market products or services to you. We do
not share the non-public personal information of customers of our SEC regulated companies or customers
who own products of ours which are SEC regulated with affiliated or non-affiliated companies who would
use that information to market products or services to you.
Our insurance
Safeguards
apply
to all of
our
recognize the need to prevent unauthorized access to the information we collect, including that held in
electronic format on our computer systems. We maintain physical, electronic and procedural
safeguards intended to protect all non-public, personal information.
We
an

Access to personal,
our customers with
inappropriate
Consumer
In
some
access, disclosure and modification.
Reports
we may obtain a
the type of policy,
cases,
Depending
such
nonpublic information is limited to those people who need the information to provide
products or services. These people are expected to protect this information from
on
consumer
report in connection with an application for insurance.

report may include information about you or your business,
a consumer
as:

credit history, driving record (including records of any operators who will be insured under the policy);
and/or
an appraisal of your dwelling or place of business that may include photos and comments on its
general condition.
Upon written request, we will inform you if we have ordered an investigative consumer report. You have
right to make a written request within a reasonable period for information concerning the nature and
scope of the report and to be interviewed as part of its preparation. You may obtain a copy of the report
from the reporting agency and, under certain circumstances; you may be entitled to a copy at no cost.
the
You also may review certain information we have about you or your business in our files. To review
information we maintain in our files about you or your business, please write to us, providing your
complete name, address and policy number(s), and indicating specifically what you would like to see. If
231-0862
(11/11)
Page
1 of 2
Document 1-4
Filed 04/15/16
Page
3 of 85
Hanover
you request actual
copies of
your
file, there
may be
nominal charge.
We will tell you to whom we have disclosed the information within the two years prior to your request. If
there is not a record indicating that the information was provided to another party, we will tell you to
whom such information is normally disclosed.
There is information that we cannot share with you. This may include information collected in order to
evaluate a claim under an insurance policy, when the possibility of a lawsuit exists. It may also include
medical information that we would have to forward to a licensed medical doctor of your choosing so that it
may be properly explained.
If after reviewing your file you believe information is incorrect, please write to the consumer reporting
agency or to us, whichever is applicable, explaining your position. The information in question will be
investigated. If appropriate, corrections will be made to your file and the parties to whom the incorrect
information was disclosed, if any, will be notified. However, if the investigation substantiates the
information in the file, you will be notified of the reasons why the file will not be changed. If you are not
satisfied with the evaluation, you have the right to place a statement in the file explaining why you
believe the information is incorrect. We also will send a copy of your statement to the parties, if any, to
Our Commitment to
Privacy
business, lasting relationships are built upon mutual respect and

will
mind,
periodically review and revise our privacy policy and procedures to ensure
that we remain compliant with all state and federal requirements. If any provision of our privacy policy is
found to be non-compliant, then that provision will be modified to reflect the appropriate state or federal
requirement. If any modifications are made, all remaining provisions of this privacy policy will remain in
effect. For more detailed information about our privacy policy, visit our Web site, located at
www.hanover.com.
In the insurance and financial services
trust. With that in
we
Producer
products are sold through independent agents and brokers, often referred to as "Producers." We may
a fixed commission for placing and renewing business with our company. We may also pay
Producers
pay
additional commission and other forms of compensation and incentives to Producers who place and
Details of our Producer compensation practices may be found at
maintain their business with us.
www.hanover.com.
Further Information
Our
If you have questions about our privacy policy, or if you would like to request information we have on file,
please write to us at our Privacy Office, N435, The Hanover Insurance Group, Inc., 440 Lincoln Street,
Worcester, MA 01653. Please provide your complete name, address and policy number(s). A copy of our
Producer Compensation Disclosure is also available upon written request addressed to the attention of the
Corporate Secretary, N435, The Hanover Insurance Group, 440 Lincoln Street, Worcester, MA 01653.
This notice is being provided on behalf of the following Hanover Companies: The Hanover Insurance Group, Inc. Allmerica Financial Alliance
Insurance Company Allmerica Financial Benefit Insurance Company Allmerica Plus Insurance Agency, Inc. Citizens Insurance Company of
America Citizens Insurance Company of Illinois Citizens Insurance Company of the Midwest Citizens Insurance Company of Ohio Citizens
Management, Inc. AIX Ins. Services of California, Inc.- Benchmark Professional Insurance Services, Inc.- Campania Insurance Agency Co.
Inc.- Campmed Casualty & Indemnity Co. Inc Chaucer Syndicates Limited- Educators Insurance Agency, Inc.- Hanover Specialty Insurance
Brokers, Inc. The Hanover American Insurance Company The Hanover Insurance Company The Hanover New Jersey Insurance Company
The Hanover National Insurance Company Hanover Lloyd's Insurance Company Massachusetts Bay Insurance Company Opus Investment
Management, Inc. Professionals Direct Insurance Company Professionals Direct Insurance Services, Inc. -Professional Underwriters Agency,
Inc.- Verlan Fire Insurance Company Nova Casualty Company AIX Specialty Insurance Company
231-0862
(11/11)
Page
2 of 2
Document 1-4
C,
Filed 04/15/16
Hanover
Insurance
Group.
Page
4 of 85
Company
Advantage Portfolio
Private

POLICY DECLARATIONS
Policy
Coverage
Number
is
HUB INTERNATIONAL INS
HANOVER INSURANCE COMPANY
LHF 8827059 03
Agency
Agency
provided by:
Code
2301024
LIABILITY COVERAGE PARTS" (WHICHEVER ARE PURCHASED) PROVIDES COVERAGE ON A

NOTICE: THE
POLICY" APPLIES ONLY TO "CLAIMS"
CLAIMS-MADE AND REPORTED BASIS. SUBJECT TO ITS TERMS, THIS
POLICY PERIOD",
INSUREDS" AND REPORTED TO THE INSURER DURING THE
FIRST MADE AGAINST THE
READ THE POLICY" CAREFULLY TO DETERMINE RIGHTS, DUTIES, COVERAGE AND COVERAGE RESTRICTIONS.

PLEASE REFER TO THE
COVERAGE

indicated in the Policy".
Item 1.
PART(S)" PURCHASED
FOR DEFENSE-RELATED DETAILS.
have the
same
meanings
as

Vemma International Holdings,
Inc
Vemma Nutrition Company
Person
Designated
to receive all
correspondence from the
Insurer:
Name:
Title:
Item 2.
POLICY PERIOD
From: 08/01/2012 To: 08/01/2013 (12:01
Item 3.
Item 4.
AM local time at the address shown in Item

Limit of Liability for all
indicated below.
Combined
Aggregate
purchased
as
Liability Coverage Parts"

$5, 000, 000
Employment
Practices
Fiduciary Liability
Crime
Liability
Insurance
Insurance Co verage Part:
Coverage Part:
Coverage Part:
Kidnap
Item 5.
1)
Ransom and Extortion
Coverage
Part:
FORMS AND ENDORSEMENTS FORMING PART OF THIS
Policy Form: 904-0001

401-1127
(01-08)
401-1192
(01-09)
904-0002 08 09
X Yes
ENo
El Yes
ENo
El Yes
EN o
El Yes
ENo
El Yes
ENo
COVERAGE PART" WHEN ISSUED:
Notice Offer of Terrorism Coverage 2008

Terrorism Coverage Explanation
Policy Holder Notice
Page
3 of 4
Item 6.
422-0082
422-0083
(01-09)
(01-09)
904-0001
904-0048
(08-09)
(08-09)
904-0301
904-0503
904-0812
905-0001
905-0104
905-0319
905-0320
905-0432
905-0434
906-0001
906-0107
906-0303
906-0314
906-0404
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(01-11)
(08-09)
(08-09)
907-0001
908-0001
908-0035
909-0001
909-0029
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
SIG-0001
(06-05)
Document 1-4
Filed 04/15/16
Page
5 of 85
Caps
on Losses From Certified Acts of Terrorism Endorsement

Exclusion of Punitive Damages Related to a Certified Act of Terrorism
Endorsement
Common Policy Terms and Conditions Section
Arizona Common Policy Terms and Conditions Section Amendatory
Endorsement
Addition to Section III. Addition of Insured Entity
Addition to Section V. Waiver of Retention if No Liability
Addition to Section VIII. Non-Rescindable Side A Endorsement
Directors, Officers and Corporate Liability Insurance Coverage Part
Addition to Section I. Crisis Management Supplemental Coverage
Addition to Section III. Employed Lawyers Coverage
Addition to Section III. Domestic Partner Coverage
Modification to Section IV. Insured Versus Insured Carve-Out
Addition to Section IV. Products and Services Liability Exclusion
Employment Practices Liability Insurance Coverage Part
Addition to Section I. Kidnap Expense Supplemental Coverage
Addition to Section III. Illegal Alien Investigative Proceeding With Sub limit
Addition to Section III. Third Party Liability Coverage
Modification to Section IV. Wage and Hour Laws Exclusion With Defense
Expense Sub limit
Fiduciary Liability Insurance Coverage Part
Arizona Crime Insurance Coverage Part Amendatory Endorsement
Kidnap/Ransom and Extortion Insurance Coverage Part
Arizona Kidnap/Ransom and Extortion Insurance Coverage Part Amendatory
Endorsement
Corporate Signature Page
PREMIUM FOR POLICY
$0.00
State Surcharge* and Tax:

Total Premium:
*See State
Surcharge Notice(s)
$33, 951.00
to
Policyholder, if applicable
COVERAGE PART(S) AND ANY ENDORSEMENT(S), COMPLETE THE ABOVE NUMBERED POLICY".
904-0002 08 09
Page
4 of 4
Document 1-4
Filed 04/15/16
Page
6 of 85
Policy Number: LHF 8827059 03

Act" is
for acts of terrorism, as defined in Section 102(1) of the Terrorism Risk Insurance Act
of terrorism has changed. The term act of terrorism" means any act that is certified by the Secretary of the
Treasury-4n concurrence with the Secretary of State, and the Attorney General of the United Statesto be
an act of terrorism; to be a violent act or an act that is dangerous to human life, property, or infrastructure;
Coverage

the formula, the United States Government generally reimburses 85% of covered terrorism losses
exceeding the statutorily established deductible paid by the insurance company providing the coverage.

Fire
Following
Premium
Other than Fire
401-1127
Following
(01/08)
Premium
0
0
0
Filed 04/15/16
Document 1-4
Page
7 of 85
If there is any conflict
restrictions and to other provisions in certain terrorism endorsement(s) in this policy.
Carefully
read your
policy, including the endorsements attached
to your
policy.

422-0082
The coverage for certified acts of terrorism" is more fully defined in the endorsement. This coverage is subject to
With
to
certifiedacts of terrorism" and acts of terrorism that are not certified the policy exclusions
the nuclear hazard and war exclusions) and other policy provisions continue to apply.
respect
example,
(for
422-0083 The endorsement excludes punitivedamages" either directly or indirectly arising out of a certified act
obligated to pay punitive damages".
401-1192 01 09
Document 1-4
Filed 04/15/16
Page
8 of 85

ENDORSEMENT
following:

insurer deductible under the Terrorism Risk

our

422-0082 01 09

Act; and
act that is dangerous
infrastructure and is
coercion.
2. The act is
to human
violent act
or an
life, property
or
Page
1 of 1
Document 1-4
Filed 04/15/16
Page
9 of 85

following:
A.
IV
The following is added to SECTION
Conditions Section of this Policy":
This insurance does not apply to damages arising,
directly or indirectly, out of a "Certified Act of
Terrorism" that are awarded as punitive damages.
B.
following Definition is added to SECTION III

Conditions Section of this Policy":

1.

2.
The act is
The

422-0083 01 09

human
life, property or
and is committed
infrastructure
by an
coercion.
dangerous
to
Page 1
of 1
Document 1-4
Filed 04/15/16
Page
10 of 85

of coverage.
special meaning. They are defined in SECTION III

are solely for convenience and form no part of the
DEFINITIONS. The
terms and conditions

purposes of that "Coverage Parr. Any defined term referenced in this Common Policy Terms and Conditions
II.

We will
A.
provide
an
Optional Extended Reporting
Period
as
described below:
Parts
Liability Coverage
Period shall
3.
cease.
4.
5.
Extended
covering any "Claims" first made during this Optional
excess over
Reporting
we cancel for non-payment of premium, the "Named Insured" may purchase the Optional Extended
If
be canceled.
Page
904-0001 08 09
1 of 8
Document 1-4
III.
Page
11 of 85
Solely with respect to the "Non-Liability Coverage Parts", any Extended Reporting Period offered shall be
done so in accordance with SECTION ll
Parts".
Coverage
6.
B.
Filed 04/15/16
The
DEFINITIONS
The
A.
following words, either in the singular or plural, shall have the meanings indicated
"Application" means:
1. The form titled "Application" submitted to request this "Policy", including
below.
any documents
or
other

2.
3.
All other materials
or
information
provided by
the "Insured" for the
underwriting
issuance of this
or
"Policy".
attached to it.
B.
meaning as defined in the applicable "Coverage Part".

means individually or collectively the purchased "Coverage
if
physically
E.
Parts" as set
"Coverage Part"
"Defense Expense" shall have the meaning as clef ned in the applicable "Coverage Part".
F.
"Executive"
C.
as
forth in Item 4. of
the
D.
1.
means
any natural individual who is, was,
A duly-elected
"Insured Entity";
or
or
shall become:
appointed director, officer, manager,
in-house
general counsel,
or
trustee of the
or
Any past, present or future members of any duly-constituted commissions, boards, committees or other
Solely with respect to the "Non-Liability Coverage Parts", "Executive" shall have the meaning as defined in
the applicable "Non-Liability Coverage Part".
2.
G.
1.
means:
Any "Executive" of the "Insured Entity" while acting solely within the course and scope of employment
Entity" or while performing duties related to the conduct of the "Insured Entity",
Any past, present or future employees of the "Insured Entity" while acting solely within the course and
"Insured Entity";
Any natural individual providing volunteer services for the "Insured Entity" at the request of the "Insured
The legal representatives or assigns of an "Insured Individual" in the event of the "Insured Individual's"
with the "Insured

2.
3.
4.
6.
7.
the spouse.
H.
meanings
as
defined in the
applicable "Coverage
Part".
Page
904-0001 08 09
2 of 8
Document 1-4
I.
J.
K.
L.
M.
Filed 04/15/16
Page
12 of 85
Entity" means the "Named Insured" and any "Subsidiary".

"Non-Liability Coverage Event" means the "Occurrence" which must be sustained or discovered in order to
"Insured
invoke coverage.
N.
0.
Part"
"Non-Liability Coverage
means
as
individually
collectively the Crime Coverage Parts and Kidnap

"Policy" Declarations,
or
"Occurrence" shall have the meaning
as
defined in

Q. "Policy" means, collectively, the Declarations, the Common Policy Terms and Conditions Section, the
R. "Policy Period" means the period of time from the inception date shown in Item 2. of the "Policy"
S. "Pollutants" means any solid, liquid, gaseous or thermal irritants or contaminants, including smoke, vapors,
P.
"Outside
Entity"
shall have the
meaning
as
defined in the
reclaimed.
T.
"Subsidiary" means:
1. An entity in which
the "Named Insured"

assets, liabilities, equity, or issued and
Period";
or
entity, subject to the terms of SECTION V.A. of the "Coverage Part", that the "Insured"
"Wrongful Act" shall have the meaning as defined in the applicable "Liability Coverage Part".
2.
U.
of its "Subsidiaries" owns 50 percent or more of the

outstanding stock on or before the inception of the "Policy
or one
forms
or
or
An
IV. EXCLUSIONS
A.
Pollution
1.
The actual,
"Pollutants";
alleged
or
threatened
discharge, dispersal,
seepage,
migration, release
or
escape of
or
2.
3.
"Claim"
by or on behalf of a governmental authority for "Damages" because of testing for, monitoring,

B.
Nuclear
V.

A.
Limits of
1.
Liability
Regardless
"Claims",
of the number of "Insureds" involved, "Claims" made or individuals or entities making

liability under the "Policy" solely with respect to all "Liability Coverage Parts" is limited as
our
follows:
Page 3 of 8
904-0001 08 09
Document 1-4
Filed 04/15/16
Page
13 of 85
a.
b.
2.
B.
c.
Expenses" under the "Coverage Par(s)" or to which that Limit of Liability applies shall cease.
d. The Limit of Liability for any Extended Reporting Period, if applicable, shall be a part of and not in
addition to the respective Limit of Liability of the "Policy" to which the Extended Reporting Period
applies.
Solely with the respect to the "Non-Liability Coverage Part", the maximum liability shall be the respective
Limit of Liability described in the applicable 'Non-Liability Coverage Part".
Retentions
is in
of the
1.
This
2.
3.
Solely with respect to any "Liability Coverage Part", if different parts of a single "Claim" are subject to
4.
excess

A.
With
respect to "Claims"
we
defend
we
may:
investigation of a "Claim" we deem necessary; and

any resulting "Claim" provided that we have the "Named Insured's"
shall not be unreasonably withheld.
1.
Make any
2.
Settle
which
written consent to settle,
Page 4
904-0001 08 09
of 8
B.
C.
Document 1-4
Filed 04/15/16
Page
14 of 85
1.
2.
75
percent of such "Loss"
excess
including
of the amount for which the "Claim" could have been settled.
Our right and duty to defend, to continue to defend or to pay "Defense Expenses" under the "Policy" shall
cease when the applicable Limit of Liability provided under Item 2. of the applicable "Coverage Part's"
A.
No "Insured" will,
obligation, agree to
own expense, voluntarily make

incur any expense related to a "Claim" without
except at that "Insured's"

a
settlement
or
payment,
our
assume
any
consent.
B.
C.

1.

2.
Authorize
us
summonses
or
legal
papers received in
information;
D.
investigation, defense or settlement of the "Claim"; and

4. Assist us, upon our request, in the enforcement of any right against any individual or entity which may
1. How, when and where the "Wrongful Act" took place; and
E.
names and addresses of any individuals and entities involved.

"Claim"
arising out of a "Wrongful Act" which is subsequently made against you shall be deemed to
Any
3.
2.
Cooperate with
us
in the
The
1.
2.
We receive proper notice of the
The date of mailing shall

"Policy"; and
"Wrongful
according to Paragraph D. above.
constitute the date that such notice was given and proof of mailing
by
the terms of this
Act"
shall be
F.
G.
shall be in accordance with the DUTIES IN THE EVENT OF AN OCCURRENCE section of the
Kidnap/Ransom and Extortion Insurance Coverage Part.
A.

will
1.
2.
3.
We
are
"Policy"
case we
Page
904-0001 08 09
give
5 of 8
4.
B.
D.
15 of 85
with respect to the "Non-Liability Coverage Parts", any Cancellation or Non Renewal shall be
Part'.
that:

"Application" for
this insurance
"Policy"
are
your representations
3. Those representations are material to the acceptance of the risk we assumed under this "Policy";
4. We have issued this "Policy" in reliance upon the truth and completeness of such representations; and
5. The "Application" shall be interpreted as a separate application for Coverage by each "Insured". No
Legal Action Against Us
No individual or entity has a right under this "Policy":
1. To join us as a party or otherwise bring us into a suit asking for "Damages" from an "Insured"; or
2. To sue us on this "Policy" unless all of its terms have been fully complied with.
2.
C.
Page
Solely

By accepting this "Policy" you agree
1.
Filed 04/15/16
Document 1-4
The

a.
Another individual or entity or group of individuals
assets of the "Named
b
or
entities
acquires
more
than 50
percent of the
or

merges with another
entity,
"Transaction", as soon as practicable, but not later than 30 days after the effective date of the
Transaction and provide such additional information as we require.
c.
you shall
2.
Insured";
notify
us
or
of the
Transaction.
"Policy"
3.

4.
The entire
5.
In the event of a Transaction, the "Named Insured" will have the right, upon payment of an additional
appropriate percentage of the premium, to an extension of coverage under the "Policy" for a "Claim" first
premium for this "Policy"
be referred to
as
shall be deemed
provided
fully earned
upon the
occurrence
of
Transaction.
the Run-Off Period.
Page
904-0001 08 09
6 of 8
E.
F.
G.
H.
Document 1-4
Filed 04/15/16
Page
16 of 85
6.
7.
no right to purchase the Extended Reporting Period described in SECTION II of the "Policy".
8.
9.
inception of
the Run-Off
Liability
in Item 2.
Rights of Recovery Against Others to Us

Assignment
No change in, modification of or assignment of interest in this "Policy" shall be effective except when made
by a written endorsement to the "Policy".
Sole Agent for the Insured
By accepting this "Policy", you agree that only the "Named Insured" is authorized to act on behalf of all
Transfer of
Canada.
2.
All premiums, limits, Retentions, "Loss" and other amounts are expressed and payable in the currency
determined by the rate of exchange published in the Wa// Street Journal on the date the judgment
respectively.
3.
I.
with respect to each Non-Liability Coverage Part, Coverage Territory and Valuation shall be in
Solely
Other Insurance
1.
2.
3.

a.
excess over
sum
other insurance
we
will pay
only
our
of:
insurance;
b.
The total of all deductibles, self-insurance and retentions under all that other insurance; and
Any indemnification available from an "Outside Entity" to an "Insured".

c.
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7 of 8
4.
Method of
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Page
17 of 85
Sharing
of the "Loss" remains, whichever comes first.
5.
with respect to each "Non-Liability Coverage Part", the application of Other Insurance shall be in
Solely
J.
Coverage Parts, or Endorsements Issued by Us

It is our stated intention that this "Policy" and any other "Policy", "Coverage Part" or endorsement issued by
us or by another member of The Hanover Insurance Group shall not provide duplication or overlap of
notwithstanding:
1. We shall not be liable under this "Policy" for a greater proportion of the "Loss" than the applicable Limit
2. The maximum amount payable under all such policies combined shall not exceed the highest applicable
K.
Allocation
Two
or
More Policies,
1.
100
2.

matters.
on
on
"Loss"; and

the parties to such
legal exposure of
Page
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8 of 8
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Page
18 of 85

following:

A.
B.

5.
6.

SECTION VIII
3.
Misrepresentations, omissions, concealment

recovery under this "Policy" unless:
a.
Fraudulent;
b.
Material either to the
c.
We in
of facts and incorrect statements shall not
prevent
or
acceptance of the risk,
or
by
us; or
faith would either have not issued this "Policy", or would not have issued a "Policy" in as
or would not have provided coverage with respect to the hazard resulting in the
otherwise.
large
904-0048 08 09
good
an
amount,
Page
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ADDITION OF INSURED ENTITY
following:

SECTION III
DEFINITIONS, Paragraph I. "Insured Entity" of the Common Policy Terms and Conditions
Section of this "Policy" is amended to add the entity(s) shown in the schedule.
Schedule of Entities to which this endorsement applies:

Effective Date
Entity
Vemma International
904-0301 08 09
Holdings
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following:

A.

this "Policy":
1.
Policy Terms and Conditions of
Liability" means with respect to a "Claim" made against the "Insured(s)":

A final judgment of no liability obtained prior to the 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
A final judgment of no liability obtained prior to the trial, in favor of all "Insureds", after the exhaustion
of appeals.
no event shall the term "No Liability" apply to a "Claim" made against an "Insured" for which a
"No
a.
b.
In
B.

1.
Policy
action for monetary relief, in which:
Liability";
a.
There is
b.

civil
or
prejudice and
without any
payment of any
If there is a determination of "No Liability" in a "Claim", the "Insurer" shall reimburse the "Defense
Expenses" paid by the "Insured" in such "Claim".
2. If a "Claim" is dismissed or stipulated dismissed without prejudice and without any payment by any
"Insured", we shall reimburse the "Defense Expenses" paid by the "Insured" in such "Claim" 90 days after
a.
The "Claim" or any other "Claim" which together with such "Claim" would be deemed a single "Claim"
is not brought again within such 90-day period; and
b. The "Insured Entity" provides us with written documentation in a form satisfactory to us to repay us for
904-0503 08 09
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Page
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NON-RESCINDABLE SIDE A ENDORSEMENT
THIS ENDORSEMENT CHANGES THE POLICY PLEASE READ IT CAREFULLY
following:

GENERAL CONDITIONS, Paragraph B. Representations and
following is added to SECTION VIII
Notwithstanding the foregoing, Insuring Agreement I.A. of the Directors, Officers and Corporate Liability
Insurance Coverage Part of this "Policy" shall not be void as to any individual(s) who did not know as of the
"Policy" inception date that such declarations and statements contained in the "Application(s)" were untrue,
inaccurate or incomplete.
The
904-0812 08 09
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of 1
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COVERAGE PART
RESTRICTIONS.
Throughout
ADDITIONAL
I.
INSURING AGREEMENTS
A.
Liability
B.
Liability
C.

D.
Securityholder Derivative
We will pay "Investigative
Demand
Liability
Costs" on behalf of the "Insured Entity" resulting from any "Securityholder

II.

Refer to the Common
Policy
III. ADDITIONAL DEFINITIONS

"Coverage Part":
A.
"Claim"
means:
Page
905-0001 08 09
1 of 6
1.
Document 1-4
Filed 04/15/16
Any written demand presented for monetary "Damages"
or
Page
23 of 85
"Wrongful Act";
Or
or similar pleading initiating a judicial, civil, administrative, regulatory, alternative
agreement.
2.
Any complaint
All "Claims" made on account of a single "Wrongful Act" shall be treated as a single "Claim" made on the
date the earliest of the "Claims" was made, regardless of whether that date is before or during the "Policy
B.
insurable under the applicable law of the
1.
2.
3.
4.
jurisdiction
most favorable to the
of such
"Damages"

We are incorporated or have our principal place of business.
Those
"Damages"
does not include:
5.
6.
Payment by the "Insured Entity" of allegedly inadequate

own securities or the securities of a "Subsidiary"; or
7.
Civil, criminal
or
or severance
or
other
payments;
price
or
or

D.
"Defense
Expenses"
means
purchase of
its
penalties.
C.
Entity"
as
and is limited to:
including attorney fees
and expert fees,
1.
Any reasonable and necessary legal fees and expenses,

2.
The
3.
Up to $250 per day per "Insured Individual" for reasonable expenses incurred for attendance at
payment shall not exceed $5, 000 in the aggregate for all "Insured Individuals" for each "Claim".
premium
"Defense
E.
insurability
on
appeal, attachment
Expenses" do
similar bonds; and
not include:
4.

5.
or
or
or
benefit expenses associated with any "Insured" except
our
as
employees.
means:
Any past, present or future "Executive"; and

Any natural individual serving as a director or officer of an "Outside Entity" at the direction of the
"Insured Entity".
"Insured" means the "Insured Entity" and any "Insured Individual". Wth respect to this "Coverage Part"
1.
2.
F.
G.
Page
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2 of 6
H.
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Filed 04/15/16
Page
"Damages"
24 of 85
and "Defense
Expenses"
1.
2.
3.
4.
5.
6.
I.
an "Insured" is obligated
monetary "Damages";
Matters deemed uninsurable by law;
amounts which
any form other than
Any
to pay
as
result of
"Claim"
seeking relief
or
redress in
Wages or benefits or contributions payable under an "Employee Benefits Plan";

GENERAL
Any amount allocated to non-covered "Loss" in accordance with SECTION VIII
Entity" means any:

Nonprofit entity described
"Outside
1.
in section 501(c)3 of the Internal Revenue Code of 1986, as amended, that

"Subsidiary"; and
2.
Other
"Personal
entity, partnership, joint venture
Injury"
means
any actual
or
or
other
entity
listed
by endorsement
to this
policy.
alleged:
or publication of material in violation of a individual's right of

privacy; or
2. The wrongful entry or eviction or other invasion of the right of privacy; or
K. "Related Wrongful Acts" means "Wrongful Acts" which are logically or causally connected by reason of
L. "Securities Laws" means the Securities Act of 1933, Securities Exchange Act of 1934, Investment Act of
M. "Securityholder Derivative Demand" means any written demand, by one or more Securityholder of an
N. "Securityholder Derivative Action" means any "Claim" brought on behalf of, or in the name or the right of,
0. "Wrongful Act" means any actual or alleged act, error, omission, misstatement, misleading statement,
1.
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Page
25 of 85

Policy Terms
and
apply to "Loss" on account of any "Claim" made against any "Insured":

Directly or indirectly based upon, arising out of, or attributable to an "Insured" gaining any profit,
remuneration or advantage to which such "Insured" was not legally entitled; or
Directly or indirectly based upon, arising out of, or attributable to any dishonest or fraudulent act or
omission, any criminal act or omission or any willful violation of any statute or regulation by such

A.
B.
"Insured";
C.
or
indirectly based upon, arising out of, or attributable to any payments to an "Insured" of any
Directly
or
However, Paragraphs A., B., and C. above shall not apply unless
D.
E.
Any
Any
"Personal
judgment
or
other final
adjudication
Injury".
actual or alleged violation of the responsibilities, obligations or duties imposed by the Employee
maintained
by, at the behest, or on behalf of any "Insured".

1. A "Claim" made and maintained totally independently of and totally without the solicitation,
assistance, participation or intervention of any "Executive"; or
2. A "Securityholder Derivative Demand" or "Securityholder Derivative Action"; or
3. A securityholder's "Claim" that is instigated and continued totally independent of, and totally without
4. Any "Claim" by any of the "Insured Individuals" for contribution or indemnity, if such "Claim" directly
G. Any "Wrongful Act", transaction, decision, fact, circumstance, situation or event which has been the
F.
Any
H.

I.
Any
of
J.
"Claim"
or
or
arbitration
proceeding
other "Wrongful Act", whenever occurring, which together with a

"Claim" or notice and would constitute "Related Wrongful Acts".
as
"Wrongful
of the Prior and
Pending
Act" has been the
subject
position
K.
brought
or
capacity.
brought or
maintained by, at the behest, or on behalf of an "Outside Entity" or past, present, or

Any action
participation of or intervention by any director, officer,

manager, trustee, governor
or
equivalent
L.
Based upon or
"Wrongful Act".
arising
out of or attributable to
present
or
future actual
or
potential employment
related
Page 4
905-0001 08 09
of 6
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Page
26 of 85
M.
N.
0.
P.
agreement.
Directly or indirectly based upon, arising out of, or attributable to:
1. The physical injury to or destruction of any tangible property, including all resulting "Loss" of use of
that property and "Loss" of use of property that is not physically injured.
2. Bodily injury, disability, sickness, disease, death, assault or battery sustained by any individual;
Directly or indirectly based upon, arising out of or attributable to the performance of any professional
However that this exclusion does not apply to:
A "Claim" against an "Insured" for a "Wrongful Act" by such "Insured" in connection with the
"Security Holder Derivative Demand" or "Securityholder Derivative Action".

Q. Any actual or alleged violation of any "Securities Laws", provided that this exclusion
2.
shall not
apply
to any
"Claim":
1.
thereunder;
or
2.
Made
or
R.
common
law.
V.

A.
Policy
Acquisition and Formation of Subsidiaries

If after the inception of the "Policy Period" the "Insured Entity" acquires or forms a "Subsidiary" or
assumes more than 50% of the assets, liabilities, or equity of, or obtains the right to elect or select a
majority of directors or trustees of an entity, coverage under this "Coverage Part" shall apply to the
Page
905-0001 08 09
5 of 6
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Page
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2.
3.

A.
B.
C.
"Executives".
any insurance
be completely
shall have any
Dedicated for
Page 6 of 6
905-0001 08 09
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Filed 04/15/16
Page
28 of 85
11 le
Hanover
Insurance
Group.
Private
Company
Advantame Portfolio

NOTICE: THIS COVERAGE PART" PROVIDES COVERAGE ON A CLAIMS-MADE AND REPORTED BASIS. SUBJECT
TO ITS TERMS, THIS COVERAGE PART" APPLIES ONLY TO "CLAIMS" FIRST MADE AGAINST THE INSUREDS"
AND REPORTED TO THE INSURER DURING THE POLICY PERIOD" OR ANY EXTENDED REPORTING PERIOD THAT
DEFENSE EXPENSES" WILL
EXHAUSTED, UNLESS OTHERWISE PROVIDED HEREIN, BY DEFENSE EXPENSES"
POLICY" CAREFULLY TO DETERMINE
BE APPLIED AGAINST THE RETENTION AMOUNT. PLEASE READ THE

Item 1.
Item 2.
Page,
the items in
quotations
shall have the
same
meanings
as
NAMED INSURED
Inc
LIMITS OF LIABILITY
$5, 000, 000

Item 3.
in the
aggregate for all
Claims"
RETENTION

Item 4.
Q each Claim"
$50, 000 each Claim"
$50, 000 each Claim"
Item 5.
A and B: 05/01/2005
1.
Insuring Agreements
2.
Insuring Agreements C: 05/01/2005
FORMS AND ENDORSEMENTS

905-0001
905-0104
905-0319
905-0320
905-0432
905-0434
905-0002 08 09
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)

Addition to Section I. Crisis Management Supplemental Coverage
Addition to Section HI. Employed Lawyers Coverage
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Page
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905-0002 08 09
Page
24 of 79
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following:

A.

"Insured Individual" also means any "Employed Lawyer", but only with respect to a "Claim" made, and
continuously maintained, against both such "Employed Lawyer" and one or more other "Insured Individual"
who is not an "Employed Lawyer".


ADDITIONAL DEFINITIONS, Paragraph 0. "Wrongful Act" of the
C. The following is added to SECTION III
B.
The
"Employed Lawyer":
"Employed Lawyer's" employment with the "Insured Entity";
behalf of the "Insured Entity" at the "Insured Entity's" written request; or
2. Which is not rendered
3. Which is performed by such "Employed Lawyer" for others for a fee.
a.
"Wrongful Act" occurring at the time when the "Employed Lawyer" was not employed as a lawyer for
b. "Wrongful Act" which occurred on or before the effective date of this endorsement if the "Employed
Lawyer", as of such date, knew or reasonably could have foreseen that such "Wrongful Act" could
Activities by an "Employed Lawyer" as a director, officer, trustee or governor of any entity other then
c.
the "Insured Entity".
GENERAL CONDITIONS of the Common Policy Terms and
1.
Which is not related to such

on
D.
insurance due to "Losses"

905-0319 08 09
paid thereunder.
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following:
The
905-0320 08 09
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following:

The
and
following
ADDITIONAL EXCLUSIONS,
is added to: SECTION IV
Paragraph
F. of the Directors, Officers
Corporate Liability

1.
2.
3.
Any "Claim" by any "Employee" of the "Insured Entity" pursuant to any federal or state whistleblower
Any "Claim" in any bankruptcy proceeding by or against the "Insured Entity" thereof, brought by the
Examiner or Trustee of the "Insured Entity", if any, or any assignee of such Examiner or Trustee, or
Any "Claim" by any of the "Insured Individuals" of the "Insured Entity" who has not served in that capacity
905-0432 08 09
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following:

SECTION IV
Corporate Liability Insurance
905-0434 08 09
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1 of 1
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Page
34 of 85

Throughout
ADDITIONAL
I.
INSURING AGREEMENT
Insurance
insurance applies.
II.
Refer to SECTION ll
Conditions Section.
OPTIONAL EXTENDED REPORTING PERIOD of the Common Policy Terms and

"Coverage Part":
A.
"Claim"
1.
Any
means:
written demand
presented for monetary "Damages"
or
"Wrongful Act";
or
However, "Claim" shall not include any arbitration or grievance proceeding pursuant to a collective
2.
B.
Page
906-0001 08 09
1 of 5
3.
We
are
"Defense
2.
3.
incorporated
Expense"
or
means
have
our
principal place
of business.
and is limited to:
Any reasonable and necessary legal fees and expenses, including attorney fees and expert fees,
The premium on appeal, attachment or similar bonds; and
Up to $250 per day per "Insured" for supplemental payment for reasonable expenses incurred for
"Defense
Expenses"
do not include:
4.
specified in Paragraph C. above; or
5.
"Employee"
1.
2.
or
as
"Employees".
means:
A natural individual
temporary
employed by and directed by

"Employees"; or
the "Insured
Entity", including
any
part-time, leased,
seasonal
or
An individual's
E.
35 of 85
4.
1.
D.
Page
2.
C.
Filed 04/15/16
Document 1-4
"ERISA"
employment status shall be determined
means
state, local
the
as
of the date of the
"Wrongful Act".
Retirement Income Security Act of 1974, as amended, any similar federal,

law, and any rules and regulations promulgated there under.
Employee
or common
the "Insured
Entity"
F.
"Insured"
G.
"Loss" means the amount the "Insured" is legally obligated to pay for "Damages" and "Defense
means
Expenses"
Civil, criminal
Any amounts which

any form other than
3.
4.
5.
6.
7.
8.
H.
or
an
"Insured" is
or
obligated
other
penalties;
to pay
as
result of
"Claim"
seeking relief
or
redress in
monetary "Damages";
Any future wages or benefits of any reinstated "Employee" or wages or benefits associated with the
Benefits or contributions payable under an employee benefits plan;
Any amount not indemnified by the "Insured Entity" for which an "Insured" is absolved from payment
GENERAL
Any
"Related
any
I.
1.
2.
Wrongful Acts"
common
"Wrongful Act"
With
respect
means
"Wrongful
Acts" which
are
logically
or
connected
decision.
causally
or
by
reason
of
means:
to any "Claim" brought

actual or alleged:
by
or on
"Employees",
or
applicants for
employment, any
Page
906-0001 08 09
2 of 5
1.
2.
3.
4.
5.
6.
7.
8.
9.
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36 of 85
Page

Entity";
Employment discrimination or violation of any employment discrimination law;
Disparate
treatment of or failure or refusal to hire a claimant because he or she is

a class which is or is alleged to be legally-protected;
or
claims to be
member of
10.
11.
12.
13.
14.

Employment-related defamation, libel or slander, including statements in an "Employee" reference;
Employment-related wrongful infliction of emotional distress, mental anguish or humiliation;
Employment-related misrepresentation;
Sexual or other workplace harassment of any kind, including any unwelcome sexual or non-sexual
sexual or non-sexual nature that is made a condition of employment with or used as a basis for
employment decisions by, interferes with performance or creates an intimidating, hostile or offensive
15. Retaliation against an "Executive"

or
"Employee" arising
out of
employment by
16. Violation of any federal, state or local civil rights laws committed
Any series of "Wrongful Acts" that are connected by

reason
of
or
a common
or
attempted by
services
an
performed
"Insured" in his
or
claimant, transaction, policy, action,

EXCLUSIONS, of the Common
A.
1.
2.
3.
4.
Policy
Terms and
or
The
that
"Wrongful Acts";
a.
c.
agreement.
Page 3 of 5
906-0001 08 09
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Page
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6. Any other "Wrongful Act", whenever occurring, which together with a "Wrongful Act" has been the
7. Any violation of any of the responsibilities, obligations, or duties imposed by any federal, state or local
5.
order;
9.
10.
11.
above laws;
12.
or

law, including but not limited to the Fair Labor Standards Act, as amended or
Any
statutory
or common
treatment against any "Insured" who is attempting to exercise his

B.
apply to
"Loss"
on
or
her
rights
under the above

labor actually performed by any
For unpaid wages or overtime pay for hours actually worked or

2. Directly or indirectly arising out of, based on or attributable to a lockout, strike, picket line,
replacement or other similar action resulting from labor disputes, labor negotiations, or collective
3. To the extent such "Loss" constitutes employment-related benefits, stock options, perquisites,
1.
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906-0001 08 09
4 of 5
V.
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Policy
Acquisition or Formation of Subsidiaries

A. If, at the time of the formation or acquisition described above:
provided automatically under this "Coverage Part".
or acquisition described above:
If,
1. The total assets of the acquired or formed "Subsidiary" exceed 25 percent of the total assets of the
"Insured Entity" as of the beginning of the "Policy Period:" or
2. The total number of "Employees" of the acquired or formed "Subsidiary" exceed 25 percent of the
total number of "Employees" of the "Insured Entity" as of the beginning of the "Policy Period",
the "Named Insured" shall give us written notice of the acquisition or formation of a "Subsidiary" as soon
The "Named Insured" shall agree to any amendments to the terms of this "Policy" we require and shall
Coverage
B.
shall be
the "Subsidiary" shall terminate 60 days after the acquisition or formation of the
"Coverage Part" for

"Subsidiary".
Page
906-0001 08 09
5 of 5
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Filed 04/15/16
Hanover
Insurance
Group.
Page
39 of 85
Company
Advantage Portfolio
Private

TO ITS TERMS, THIS COVERAGE PART" APPLIES ONLY TO "CLAIMS" FIRST MADE AGAINST THE INSUREDS"
AND REPORTED TO THE INSURER DURING THE POLICY PERIOD" OR ANY EXTENDED REPORTING PERIOD THAT
DEFENSE EXPENSES". ANY DEFENSE EXPENSES"
EXHAUSTED UNLESS OTHERWISE PROVIDED HEREIN, BY
WILL BE APPLIED AGAINST THE RETENTION AMOUNT. PLEASE READ THE

Item 1.
the items in
Page,
quotations shall
have the
same
meanings
as
NAMED INSURED

Inc
Item 2.
LIMITS OF LIABILITY
Employment
Practices
Liability Insurance
$5, 000, 000 in the aggregate for all

Item 3.
RETENTION
Insuring Agreement
Item 4.
Claims"
A:
Employment
Practices
$50, 000
Liability Coverage
each
Claim"
Insuring Agreement A: Employment Practices Insurance Coverage
Part:
05/01/2005
Item 5.
Policy Form:906-0001
906-0001
906-0107
906-0303
906-0314
906-0404
906-0002 08 09
(08-09)
(08-09)
(01-11)
(08-09)
(08-09)

Addition to Section I. Kidnap Expense Supplemental Coverage
Addition to Section III. Illegal Alien Investigative Proceeding With Sublimit
Expense Sublimit
Page 35 of 79
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COVERAGE PART(S) AND ANY ENDORSEMENT(S), COMPLETE THE ABOVE-NUMBERED POLICY".
906-0002 08 09
Page
36 of 79
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Page
41 of 85

following:
ADDITIONAL DEFINITIONS, Paragraph I. "Wrongful Act" of the

Insurance
Practices
Liability
Employment
Committed or attempted by an "Insured" in their capacity as an "Insured" or by the "Insured Entity".
"Third Party" means any natural individual who is a customer, supplier, vendor, service provider, volunteer,
leased worker, temporary worker, or independent contractor, business invitee or other client of the "Insured
Entity".
The
906-0314 08 09
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Page
42 of 85

Throughout
ADDITIONAL
I.
INSURING AGREEMENT
SECTION I
A.

B.
Compliance Resolution
We will pay "Compliance
Penalties
Coverage
Resolution Penalties" up to, but in no event greater than $25, 000, for any such
Declarations.
II.
SECTION ll
Refer to the Common

III. SECTION III
Policy Terms and Conditions Section.

"Coverage Part":
A.
"Administration"
1.
means:
Providing interpretations and giving

"Insured Benefit
counsel to
employees, beneficiaries
or
participants regarding any
Plan";
in connection with any "Insured Benefit
2.
Handling records
3.
or
cancellation of
Plan";
or
employees
or
participants
under any "Insured
Benefit Plan".
B.
"Claim"
1.
2.
means:
Any written demand presented for monetary "Damages" or non-monetary relief for a "Wrongful Act"
Page
907-0001 08 09
1 of 5
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Filed 04/15/16
Page
43 of 85
investigation by a federal, state or local government agency,

Department of Labor or the U.S. Pension Benefit Guaranty
Corporation.
labor
or
to
collective
bargaining
agreement.
C.
D.
"Defense Expenses" means and is limited to:
E.

"Defense
F.
Expenses"
4.

5.
"ERISA"
means
state, local
G.
do not include:
the
2.
3.
our
as
employees.
Retirement Income Security Act of 1974, as amended, any similar federal,

Employee
or common

1.
or
or
means:
Any Employee Welfare Benefit Plan, as defined by "ERISA", which was, is now or becomes
sponsored by the "Insured Entity" or jointly by the "Insured Entity" and a labor entity solely for the
a.
Provided written notice to us of such newly-created Employee Pension Benefit Plan; and
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907-0001 08 09
2 of 5
Document 1-4
Filed 04/15/16
Page
44 of 85
paid any additional premium we require.

under this "Policy" for the "Insured Benefit Plan" shall not apply to "Claims" made more than 60 days
b.
Agreed
Any other Employee Benefit Plan or program not subject to "ERISA" by endorsement which is
4.
Benefit Plan".
H.
1.
2.
3.
Employee
Stock
Ownership Plans
or
means:

Any past, present or future employees of the "Insured Entity"
or
"Insured Benefit Plan", but
The estates, heirs, legal representatives or assigns of deceased individuals who

only
were
while
"Insured

4.
The
legal representatives
I.
J.

1.
Civil, criminal or administrative fines, taxes or other penalties, except the five percent (5%) or less, or
twenty percent (20%) or less, fines or penalties imposed under Section 502 (i) and (I) of "ERISA"
the
respectively;
Any amounts
3.
monetary "Damages";
4.
Benefits
2.
5.
which
than
other
form
any
or
contributions
payable under
Any expenses associated with
an
to pay as result of
"Insured Benefit
any accommodation
"Claim"
seeking relief
or
redress in
Plan";
required under
GENERAL
7. Any amount allocated to non-covered "Loss" in accordance with SECTION VIII
"Wrongful Act" means any actual or alleged:
1. Breach by an "Insured", or any individual or entity for whose acts an "Insured" is legally responsible,
2. Negligent act, error or omission by an "Insured", or any individual or entity for whose acts an "Insured"
is legally responsible, solely in the "Administration" of any "Insured Benefit Plan"; or
3. Any other matter claimed against an "Insured", or any individual or entity for whose acts the "Insured"
6.
K.
L.
Plan".
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3 of 5
Document 1-4
Any series of "Wrongful Acts"

action, omission
IV. SECTION IV
or
decision
Filed 04/15/16
that
are a
are connected by reason

single "Wrongful Act".
of
a common
Page


A.
45 of 85
Policy
Terms and
apply to:
"Loss" on account of any "Claim" made

or attributable to:
or
out
of,
1.
Such "Insured"
entitled;
gaining any profit,
remuneration
or
advantage
to which such "Insured"
was
not
legally
or
Any dishonest or fraudulent act or omission, any criminal act or omission or any willful violation of any
3. Any payments to an "Insured" of any remuneration without the previous approval of the security
been illegal.
However, Paragraphs 1., 2., and 3. above shall not apply unless a judgment or other final adjudication
2.
adverse to any of the "Insureds" in such

4.
5.
6.
"Claim" is obtained.
resulting loss of use of that

physical injury
property and loss of use
The wrongful entry, eviction, false arrest, false imprisonment or detention, malicious prosecution,
The
to
or
destruction of any tangible property, including all

of property that is not physically injured.
disparaging material.
Any actual or alleged discrimination, retaliation or wrongful termination of employment; provided,
or
7.
8.
9.
10.
apply to:

b. Any contract or agreement establishing an "Insured Benefit Plan".
11. Any failure to comply with any law concerning workers compensation, unemployment insurance,
This exclusion shall not apply to any "Claim" for retaliatory treatment against any "Insured Individual"
"Loss" on account of any "Claim" made against any "Insured":
1. For the return or reversion to any employer of any contribution to or asset of an "Insured Benefit
a.
B.
Plan";
Page
907-0001 08 09
4 of 5
2.
For the costs of
Document 1-4
compliance with any
order for,
Filed 04/15/16
grant of,
or
agreement
to
Page
46 of 85
or
3.
payable by
a.
The benefits
b.
Recovery for the benefits is based
are
an
on a
covered
as an
individual
"Wrongful Act".
liability by
will provide a defense of any such "Claim", without any

However,
we
obligation; and
us
to pay such sums that

to
imputed
any other "Insured Individuals" for the purpose of determining the applicability of the exclusions
listed above.
No fact
V.
pertaining
SECTION V

A.
Policy

If after the inception of the "Policy Period" the "Insured Entity" acquires or forms a "Subsidiary" or acquires
or assumes more than fifty percent (50%) of the assets, liabilities, or equity of, or obtains the right to elect
1. lf, at the time of the acquisition or formation described above, the total assets of the acquired or
2.
If at the time of the acquisition or formation described above, the total assets of the acquired or
3.
Page 5 of 5
907-0001 08 09
Document 1-4
Filed 04/15/16
Hanover
insurance
Group,
Page
47 of 85
Company
Advantage Portfolio
Private

INSUREDS" AND
COVERAGE PART" APPLIES ONLY TO "CLAIMS" MADE AGAINST THE
TO ITS TERMS, THIS
DEFENSE EXPENSES" WILL
EXHAUSTED, UNLESS OTHERWISE PROVIDED HEREIN, BY DEFENSE EXPENSES"
BE APPLIED AGAINST THE RETENTION AMOUNT. PLEASE READ THE

Item 1.
Page,
the items in
have the
quotations shall
same
meanings
as
NAMED INSURED
Inc
Item 2.
LIMITS OF LIABILITY (Inclu sive of

$1, 000, 000

Item 3.
in the
aggregate for all
Item 5.
and Defense
Expenses)
Claims"
RETENTIONS
Insuring Agreement
Insuring Agreement
Item 4.
Damages
A:
B:
Fiduciary Liability Coverage:

Compliance Resolution Penalties Coverage:
$0 each
$0 each
Claim"
Claim"

1.
Insuring Agreements
A:
05/01/2005
2.
Insuring Agreements
B:
05/01/2005
907-0001
907-0002 08 09
(08-09)
Fiduciary Liability
Insurance
Coverage
Page
Part
46 of 79
Document 1-4
Filed 04/15/16
Page
48 of 85
907-0002 08 09
Page
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Filed 04/15/16
Document 1-4
Page
49 of 85

DISCOVERY FORM
"Coverage
Part"
carefully
to
Throughout
All words that appear in quotation marks have special meaning.

DEFINITIONS. The descriptions in the Headings of this "Policy"
They are
solely
are
defined in SECTION III ADDITIONAL

for convenience and form no part of the
I.
INSURING AGREEMENTS
Crime Insurance
Coverage
A.
Employee
Theft

B.
ERISA
or
or
damage
to
"Property" directly caused by "Theft"
not, acting alone
Insuring Agreement,
or
committed
by
an
"Theft" shall also include
"Forgery".
Fidelity
or
dishonest acts
alone or in
acting
C.

We will pay you for loss of or damage to "Property" sustained by your "Client" directly caused by "Theft"
D.
Forgery
1.
or
Alteration
a.
b.
or
by or drawn upon you; or

Made or drawn by one acting as your agent,
that are purported to have been so made or drawn.
Made
or
drawn
2.
E.
If you are sued for refusing to pay any instrument covered in Paragraph D.1. on the basis that it has
Theft of
1.
Clearing for
Money and Securities (Inside the Premises)
We will pay you for loss of "Funds" inside the "Premises"
or
"Banking Premises":
Page
908-0001 08 09
1 of 17
Document 1-4
a.
Directly caused by "Theft"

Premises";
b.
2.
3.
F.
2.
3.
person
50 of 85
present inside such "Premises"
"Banking
or
by disappearance or destruction.
you for loss from damage to the "Premises"
caused
are
the
owner
or its exterior
of the "Premises" or
caused by an actual
directly
are
or
We will pay you for loss of or damage to a locked safe, vault, cash register, cash box or cash drawer
Burglary of Other Property (Inside the Premises)

We will pay you for loss of or damage to "Other Property":
a.
Inside the "Premises" directly caused by an actual or attempted "Robbery" of a "Custodian"; or
b. Inside the "Premises" in a safe or vault directly caused by an actual or attempted "Safe Burglary".
We will pay you for loss from damage to the "Premises" or its exterior directly caused by an actual or
attempted "Robbery" or "Safe Burglary" of "Other Property", if you are the owner of the "Premises" or
We will pay you for loss of or damage to a locked safe or vault located inside the "Premises" directly
or
Safe

1.
H.
by
Page
or
We will pay
attempted "Theft" of "Funds", if you
Robbery
1.
G.
Directly
committed
Filed 04/15/16
custody of a
an
armored
2.
3.
by
an
actual
or
attempted
Computer Crime
1. Computer Fraud
fraudulently
2.
(other
than
"Messenger")
a.
To
person
b.
To
place outside those "Premises".
Computer Program
and Electronic Data Restoration
or
Expense

a.
Only to "Computer Programs" and "Electronic Data"
which you
own or
for which you
are
legally
liable; and
b.
Only
if you
data
copies.
are
unable to
or
back-up
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Document 1-4
Filed 04/15/16
51 of 85
Page
loss is covered under Insuring Agreements H.1. and H.2., then only the Retention for a loss under
Agreement H.1..
If
I.

J.
Credit, Debit
or
Money
2.
L.
financial
"Property" directly
caused
by "Credit, Debit
or
Charge
Card
Money
We will pay you for loss directly caused

1.
Fraud
Charge Card

K.
directing
by your having accepted
in
good faith,
Money orders issued by any post office, express company or bank

presentation; or
"Counterfeit Money" that is acquired during the regular course of business.
that
in
are
exchange
not
for
paid upon

1.
Personal Accounts
Forgery
or
Alteration
a.
Drawn upon
personal
accounts of your "Executive"
or
that
are
purported
to have been so drawn;
or
b.
Made or drawn by
made or drawn.
one
acting
as an
or
that are
purported
to have been
so
2.
"Identity Fraud Expense"
incurred
by
an
1.
2.
II.
for

M.
Clearing
We will pay you for
"Investigative Expenses" to determine

We will pay you for "Investigative Expenses" after settlement
the amount of loss covered under any

of covered loss.
3.
We will have no liability to pay any such "Investigative Expenses" if the amount of the covered loss
does not exceed the Retention Amount of the applicable Insuring Agreement as set forth in Item 2. of
the Declarations.
4.
Agreement as set forth in Item 2. of the Declarations.
Liability
for the
applicable Insuring

days from
prior to the
the date of that cancellation.
A.
No later than 90
B.
"Employee Benefit Plans."

C.
regard
to any
Page
908-0001 08 09
3 of 17

"Coverage Part":
following
Filed 04/15/16
Document 1-4
Page
meanings
52 of 85
Policy Terms and
indicated below, when used in this
"Banking Premises" means the interior of that portion of any building occupied by a banking institution or
B. "Client" means an entity specifically scheduled as "Client" by endorsement to this "Coverage Part" for
C. "Client's Premises" means the interior of that portion of any building your "Client" occupies in conducting
A.
its business.
D.
E.
"Computer System" means a computer and all input, output, processing, storage and communication
"Computer Violation" means:

1. A "Computer Virus" designed to damage or destroy a "Computer Program" or "Electronic Data"; or
2. Vandalism by a natural person, including an "Employee" who has gained unauthorized access to your
"Computer System."
G. "Computer Virus" means a set of unauthorized instructions, programmatic or otherwise:
1. Directed solely against you; and
2. That propagates themselves through the "Computer System" or networks,
provided such instructions were maliciously introduced by a natural person.
H. "Counterfeit Money" means an imitation of "Money" that is intended to deceive and to be taken as
genuine.
I.
"Credit, Debit or Charge Card Fraud" means the "Forgery" or alteration of, on or in, any written instrument
required in connection with any transaction involving any credit, debit or charge card issued to you, or at
J. "Custodian" means you, or any of your partners or "Members", or any "Employee" while having care and
janitor.
K. "Digital Signature" means an electronic identifier created by computer, within, attached to, or logically
associated with a record, and executed or adopted by a person with the intent to sign the record.
F.
L.
"Discover", "Discovered"
means
facts
or
1.
Which does not
provide instructions
2.
Which is stored
on
electronic
or
directions to
processing
media for
form usable in
"Computer System":
"Computer System"; or
by a "Computer Program".
use
N.
"Electronic Signature" means a "Digital Signature", an electronic sound, symbol or process, within,
sign the record.
0.
"Employee" means:
1. Any natural person:
Page 4 of 17
908-0001 08 09
Filed 04/15/16
Page
53 of 85
a.
b.
Who you
c.
2.
Document 1-4
compensate directly by salary, wages or commissions; and

Who you have the right to direct and control while performing services for you;
Any natural person who is furnished temporarily

a.
To substitute for
b.
To meet seasonal
permanent "Employee"
or
to you:
as
defined in
Paragraph
0.1. who is
on
leave;
or
3.
4.
5.
Any natural person who is leased to you under a written agreement between you
firm, to perform duties related to the conduct of your business, but does not
a.
A trustee, officer, employee, administrator or manager, except an administrator

b.
A director or trustee of yours while that person is

8.
Who is a former "Employee", partner, "Member",

leasing
temporary
engaged
in
or
manager who
handling "Funds"
or
"Other
"Manager", "Executive" retained
as a
consultant
non-compensated officer; or
c.
While acting as a non-compensated fund solicitor during fund raising campaigns; or
d. Who is a guest student or intern pursuing studies or duties, excluding, however, any such person
Any "Employee" of an entity merged or consolidated with you prior to the effective date of this
"Policy"; or
Any of your "Managers", directors or trustees while:
a.
Performing acts within the scope of the usual duties of an "Employee"; or
b. Acting as a member of any committee duly elected or appointed by resolution of your board of
Who is
on
P.
labor
Any natural person:
b.
6.
mean a
who is:
Any natural person
a.
7.
and
your behalf.
contractor or representative of the same general character not specified in Paragraph 0.
to the Employee Retirement Income Security Act of 1974 (ERISA) and any amendments thereto.
Q.
"Executive" means your owner, natural person partner, member of the board of directors, member of the
R.
"Forgery"
not
mean a
authority,
S.
signing of the name of another

means
in
the

means:
1.

2.
your
knowledge
or
consent;
or
Page 5 of
908-0001 08 09
17
Document 1-4
3.
Filed 04/15/16
Page
54 of 85

"Money"
and "Securities".
T.
"Funds"
U.
"Identity Fraud" means the act of knowingly transferring or using, without lawful authority, a means of
V.
"Identity Fraud Expense" means:

1. Costs of notarizing fraud affidavits or similar documents for credit agencies, financial institutions,
merchants or other credit grantors that have required that such affidavits be notarized;
2. Costs for certified mail to law enforcement agencies, credit agencies, financial institutions, merchants
or
3.
means

grantors to report or discuss any actual "Identity Fraud";
Lost wage, up to a maximum payment of $1, 000.00 per week for a maximum period of 5 weeks, as a
Costs for
long
distance
4.
5.
6.
or
other credit
legal counsel, credit agencies,
financial
a.

b.
To
c.
complete fraud affidavits
or
similar documents;
or
Reasonable
a.
attorney fees incurred, with
our
original application
is
rejected solely

by
financial institutions, merchants, other
judgments wrongly entered against your "Executive"; or

c.
Challenging the accuracy or completeness of any information in a consumer credit report; and
7. Costs for daycare and eldercare incurred solely as a direct result of any "Identity Fraud" "Discovered"
"Identity Fraud Expense" does not include any expense or loss not listed in Paragraphs 1. through 7. of
b.
or
civil
this definition.
W. "Insured"
X.
means:
Insuring Agreement I.B., any "Employee Benefit Plans" only; or

respect to all other Insuring Agreements, the "Named Insured" defined
to
1.
With
2.
Wth
Declarations.
respect
in Item 1. of the
covered loss.
by any "Client".
in a directorial capacity for a limited liability company.
limited liability company represented by its membership interest, who
shall not include expenses incurred
Y.
Z.
AA.
BB.
"Investigative Expenses"
"Manager" means a person serving
"Member" means
also may serve as
an owner
of
"Manager".
"Messenger" means you, or a relative of yours, or any of your partners or "Members",
while having care and custody of "Property" outside the "Premises".
"Money" means:
a
or
any
"Employee"
Page
908-0001 08 09
6 of 17
CC.
"Occurrence"
1.
Under
Filed 04/15/16
Document 1-4
Page
means:
Insuring Agreements I.A., I.B.,
a.
An individual act;
b.
c.
separate
or
not
"Coverage Section":
and I.C. of this
acts whether
or
not
related;
or
related,

2.
Under
55 of 85
Insuring Agreement
I.D. of this
a.
An individual act;
b.
c.
separate
or
not
by
person acting
instruments, during the "Policy
committed
"Coverage
during the "Policy
Section":
acts whether
or
not
related;
or
related,
alone or in collusion with other persons, involving one or more

Period" shown in the Declarations, before such "Policy Period" or
both.
3.
Under all other
event;
a.
An individual act
b.
c.
A series of acts
or
or
separate
events whether
acts or events whether

or
or
not related;
or
not related,
or
not,
EE. "Premises" means the interior of that portion of any building you occupy in conducting your business.
FF.
GG. "Restoration Expense" means reasonable costs incurred by you to reproduce "Computer Programs" or
DD.
"Other
"Other
"Other
"Restoration
Expense"
does not include:
corporate costs and expenses, including "Employee" remuneration and any costs
legal action;
1.
Your internal
related to any
2.
Expenses incurred as a result of the reconstruction of "Computer Programs" or "Electronic Data"

on media, including, but not limited to, magnetic or-optical media if there are no analyses
"Premises";
recorded
Expenses incurred as a result of the reconstruction of "Computer Programs" and "Electronic Data" if
you knowingly use illegal copies of programs;
4. Expenses incurred to render the "Computer Programs" and "Electronic Data" usable by replacement
5. Expenses incurred to design, update or improve "Computer Programs" or "Electronic Data" or to
6. Expenses incurred as a result of alteration in "Computer Programs" and "Electronic Data" held on
3.
HH.
has:
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7 of 17
Document 1-4
Filed 04/15/16
Page
bodily harm; or
2. Committed an obviously unlawful act witnessed by that person.
"Safe burglary" means the unlawful taking of:
1. "Property" from within a locked safe or vault by a person unlawfully entering
1.
II.
2.
JJ.
Caused
A safe
or
or
threatened to
cause
that person
Tokens, tickets,
a
2.
meter)
the safe
vault
as
or
or

1.
56 of 85
nonnegotiable
revenue and other

in current use; and
instruments
or
contracts
or
charge cards,
or
which cards
unused value in
are
not issued
by
you,
KK.
"Theft"
1.
With respect to
of a "Client"; or
2.
Wth
3.
Wth respect
deprivation.
Insuring Agreement I.C., the
intentional unlawful
to the
deprivation
respect to Insuring Agreements I.E. and LG., the intentional unlawful taking of "Funds" to your
deprivation; or
to all other
LL.
"Third
MM.
"Transfer Account"
1.
"Money".
means:
Party"
means a
person other than
an
"Insured"
account maintained
or delivery of "funds":
means an
payment
or
to your
"Employee".
by you
at
financial institution from which you

or
telephone
can
instructions
"Watchperson" means any person you retain specifically to have care and custody of "Property" inside the
2.
NN.
"Premises" and who has
no
other duties.

Policy
Terms and

A.
Acts Committed By You, Your Partners or Your "Members"
For the
1.
Loss
a.
resulting
You;
from "Theft"
or
not cover:
any other dishonest act committed by:
or
Any of your partners or "Members",

acting alone or in collusion with other persons.
Acts of "Employees" Learned Of By You Prior To the "Policy Period"
Acts of "Employees", "Managers", or "Executives"
Loss resulting from "Theft" or any other dishonest act committed by any of your "Employees",
a.
b.
whether
2.
3.
Page
908-0001 08 09
8 of 17
b.
While
or
services for you or otherwise, except when covered under

resulting
57 of 85
Insuring Agreements
from:
a.
The unauthorized disclosure of your confidential information including, but not limited to, patents,
trade secrets, "Electronic Data", "Computer Programs", processing methods or customer lists; or
b.
Governmental Action
Loss resulting from expropriation, nationalization,
6.
Page
Loss
5.
Filed 04/15/16
performing
I.A., I.B.,
4.
Document 1-4
seizure
or
destruction of
"Property" by
order of
Indirect loss
a.
an
by this "Coverage Part" including, but
Your inability to realize income that you would have realized had there been
to "Property".
no
loss of
or
not
damage
Payment of damages of any type for which you are legally liable. But, we will pay compensatory
c.
"Coverage Part".
e.
7. Legal Fees, Costs and Expenses
8. Trading
Loss resulting directly or indirectly from trading, whether in your name or in a genuine or fictitious
account. However, we will pay for loss resulting directly from trading in a genuine account when
covered under Insuring Agreements I.A., I.B., or I.C. of this "Coverage Part".
9. War and Military Action
a.
other agents; or
c.
Insurrection, rebellion, revolution, usurped power, or action taken by governmental authority in
For the purpose of Insuring Agreements I.A., I.B., or I.C. of this "Coverage Part" this "Policy" shall not
b.
B.
cover:
1.
Inventory Shortages
Loss, or that part of any loss, the proof of which
a.
An inventory computation; or
b. A profit and loss computation.
as
to its existence
or
amount is
dependent upon:
However, where you establish wholly apart from such computations that you have sustained a loss,
then you may offer your inventory records and actual physical count of inventory in support of the
Page
908-0001 08 09
9 of 17
Document 1-4
2.
Warehouse
Filed 04/15/16
58 of 85
Receipts

C.
Page
For the purpose of
or
issuing, canceling
I.G. of this
"Coverage Part"
or
failing
this
to cancel,
"Policy"
shall not
cover:
2.
3.
Accounting or Arithmetical Errors or Omissions

Loss resulting from accounting or arithmetical errors or omissions.
Exchanges or Purchases
Loss resulting from the giving or surrendering of "Property" in any exchange
5.
purchase.
Fire

a.
Loss of or damage to "Funds"; and
b. Loss from damage to a safe or vault.
Loss of "Property" contained in any money operated device unless the amount of "Money" deposited
Motor vehicles or Equipment and Accessories
Loss of or damage to motor vehicles, trailers or semi-trailers or equipment and accessories attached
Loss
4.
or
or
to them.
6.
a.
Surrender of
"Property"
1) On the basis of unauthorized instructions;
2) As a result of a threat to do bodily harm to any person;
3) As a result of a threat to do damage to any "Property";
Transfer
or
or
surrendered to
person
or
place
"Computer System";
5) As a result of threat to introduce a virus or other malicious instruction into your "Computer
System" which is designed to damage, destroy or corrupt data or "Computer Programs"
6) As a result of a threat to contaminate, pollute or render substandard your products or goods;
4)
As
result of
threat to introduce
Or
7)
As
result of
a) Your confidential information;
b)
b.
Weaknesses in the
or
utilize:
code within your
"Computer System".
Part" to loss of
if you:
7.
source
divulge
or
"Property"
while outside the "Premises" in the
care
and
custody of a "Messenger"
knowledge of any threat at the time the conveyance began; or

knowledge of a threat at the time the conveyance began, but the
1)
Had
2)
Had
the threat.
no
loss
was
not related to
Vandalism
Loss from damage to the "Premises" or its exterior, or to any safe, vault, cash
register, cash box,
Voluntary Parting of Title to or Possession of "Property"

Loss resulting from your, or anyone acting on your express or implied authority, being induced by any
dishonest act to voluntarily part with title to or possession of any "Property".
For the purpose of Insuring Agreement I.H. of this "Coverage Part" this "Policy" shall not cover:
8.
D.
Page
908-0001 08 09
10 of 17
1.
resulting
Loss
from the
use
or

or
directing
Inventory Shortages
or that part of any loss, the proof of which
purpose of Insuring Agreements
a.
access,
convenience,
such cards.
An
b.
For the
as
financial institution to
to its existence
or
amount is
transfer, pay
or
deliver
dependent upon:
or
resulting from
V.
on
Loss,
E.
charge,
purported
or
other cards

3.
59 of 85
Page
2.
Filed 04/15/16
Document 1-4
the
use
of
computer
to
1.1. of this
fraudulently
"Coverage Part"; this "Policy"

transfer of "Property".
shall not
cover
loss
cause a

A.
Limit of
1.
Liability
The most
Liability
2.
B.

we
as
an
"Occurrence" is the
applicable
Limit of
Retention

or a
or
damage
to
"Property"
that exceeds 25%
A.
B.
C.
Produce for
D.
Give
E.
Cooperate with
us a
our
examination all
detailed,
us
sworn
in the
our
request and give
us a
signed
statement of your
answers.
pertinent records.
proof of
loss within 120
investigation
days.
and settlement of any claim.

A.
Conditions
1.
Applicable
to all
Additional Premises
or
Policy
Insuring Agreements of this "Coverage Part":

Employees
Declarations.
2.
Consolidation, Merger or Acquisition

If you consolidate
or
merge with,
or
purchase
or
acquire the
assets
or
liabilities of, another
entity:
Page
908-0001 08 09
11 of 17
Document 1-4
a.
b.
c.
Filed 04/15/16
Page
60 of 85
coverage provided by this "Coverage Part" to such consolidated or merged entity or such
1) The assets of the merged, purchased, or acquired entity do not exceed 25% of the total
You must
statement
or
2) The merger, purchase
or
acquisition
occurs
less than 90
days prior
to the end of the
"Policy
Period."
3.
Acquire or Form "Subsidiary"

a.
by
b.
"Subsidiary":
days after the effective date of such acquisition or formation, the coverage
"Coverage Part" shall apply to such "Subsidiary", provided that all "Occurrences"
contributing to a loss involving such acquisition or formation, must take place after the
or
effective date of such
4.
form
us
For the first 90

provided by this
causing
c.
or
give
provided by this "Coverage Part" to such "Subsidiary." We may condition our consent
You must
coverage
acquisition
or
formation.
1)
The assets of the acquired or formed "Subsidiary" do not exceed 25% of the total assets of
2)
The
acquisition
or
formation
occurs
less than 90
days prior to the
end of the
"Policy Period".

a.

b.

by mailing
or
delivering
1) 20 days before the effective date of cancellation if we cancel for non-payment of premium;
2)
c.
60
days
before the effective date of cancellation if
we
or
or
reason.
not required to renew this "Coverage Part". However, written notice of our intent to nonthis "Coverage Part" shall be sent to the "Named Insured" at least 60 days prior to
We
are
renew
d.
5.
of notice.
or
Fraud
Page
908-0001 08 09
12 of 17
Filed 04/15/16
"Coverage Part";
b. The "Property" covered under this "Coverage Part";
c.
Your interest in the "Property" covered under this "Coverage Part";
d. A claim under this "Coverage Part".
Cooperation
You must cooperate with us in all matters pertaining to this "Coverage
a.
6.
Document 1-4
Page
61 of 85
This
or
Part"
as
conditions.
7.

Agreement I.B. of this "Coverage Part" that is sufficient to provide a Limit of Liability for each
b. If the "Named Insured" is an entity other than an "Employee Benefit Plan", any payment we make
c.
If two or more "Employee Benefit Plans" are insured under this "Coverage Part", any payment we
a.
make for loss:
by two or more "Employee Benefit Plans"; or

2)
commingled "Property" of two or more "Employee Benefit Plans",
the total Limit of Liability of all "Employee Benefit Plans" sustaining loss.
1)
Sustained
Of
8.
Liberalization
9.
Other Insurance
"Coverage Part",
our
a.
Primary Insurance
When this
"Coverage
Part" is written
as
primary insurance,
and:
1)
You have other insurance subject to the same terms and conditions as this "Coverage Part",
2)
same
a)
loss.
Paragraph a.1)
can
b) The Retention Amount shown in the Declarations,

whichever is greater. Our
"Coverage Part".
b.
payment for loss is subject to the
terms and conditions of this
Excess Insurance
Page
908-0001 08 09
13 of 17
Document 1-4
10.
Page
62 of 85
1)
When this "Coverage Part" is written excess over other insurance, we will only pay for the
2)

a.
The "Property" covered under this "Coverage Part" except as provided in 10.b. below is limited to
"Property":
1) That you own or lease; or
2) That you hold for others:
a) On your "Premises" or your "Banking Premises"; or
b) While in transit and in the care and custody of a "Messenger; or
3) For which you are legally liable, except for "Property" located inside your "Client's Premises."
b. If Item 2. of the Declarations indicates that coverage under Insuring Agreement I.C. has been
1) That your "Client"
2)
3)
4)
11.
Filed 04/15/16
owns or
leases;
That your "Client" holds for others;

For which your "Client" is
legally
or
liable
"Property" is inside your "Client's Premises".

c.
However, this "Coverage Part" is for your benefit only. It provides no rights or benefits to any
other person or organization, including your "Client". Any claim for loss that is covered under this
Policy Bridge Discovery Replacing Loss Sustained
a.
While the
became effective:
not pay for any loss that occurred during the "Policy Period" of that prior policy which
1) We will
2)
b.
SECTION VII
this Condition.
Paragraph
A.9. Other Insurance does not
apply
to
12. Records
amount of any loss.
"Property"
covered under this
"Coverage Part"
so we can
verify
the
13. Recoveries
a.
to
you in satisfaction of your covered loss in excess of the amount paid under this
1) First,
"Coverage Part";
4) Fourth, to you in satisfaction of any loss not covered under this "Coverage Part".
whether made
Page
908-0001 08 09
14 of 17
Document 1-4
b.
14.
Filed 04/15/16
Page
63 of 85
Territory
Canada.

a.

follows:
1)
"Coverage Part" shall be
determined
as
a) At face value in the "Money" issued by that country;
b)
or

in The Wall Street Journal on the day the loss was "Discovered".
exchange
published
2)
Loss of "Securities" but only up to and including their value at the close of business on the
day the loss was "Discovered". We may, at our option:
a) Pay the market value of such "Securities" or replace them in kind, in which event you
b) Pay the cost of any Lost Securities Bond required in connection with issuing duplicates of
the:
(1)
Market value of the "Securities" at the close of business
"Discovered";
on
the
day
the loss
was
or
The Limit of
Liability applicable to the "Securities".

3) Loss of damage
Property" or loss from damage to the "Premises" or its exterior
a) The cost to replace the lost or damaged "Other Property" with property of comparable
material and quality and used for the same purpose;
The
c)
loss or damage.
(2)
to "Other
or
cash value basis.
Property" or "Premises" or its exterior:

1) In the "Money" of the country in which the loss or damage occurred; or
2) In the United States of America dollar equivalent of the "Money" of the country in which the
c.
Any "Property" that we pay for or replace becomes our "Property".
Non-Accumulation of Liability
b.
16.
We will, at your
option, settle loss
or
damage
to "Other
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15 of 17
Document 1-4
Filed 04/15/16
64 of 85
Page
any one "Insured".
a.
b.
B.
amounts due or paid, the amount we shall pay for any loss shall not be cumulative from year to
year or from "Policy Period" to "Policy Period".
Insuring Agreements LA., I.B and I.0 of this "Coverage

Termination as to any "Employee"
This Insuring Agreement terminates as to any "Employee":
Conditions
1.
a.
b.
Applicable
As
Part":
soon as:
1) You; or
2) Any of your partners, "Members", "Managers",
"Employee",
or

excess of $1, 000.00 whether before or after becoming

employed by you.

We will mail
mailed, proof
2.
to
or
deliver
of
an
amount in
days after

will be sufficient proof of notice.
our
mailing
mailing address
known to
Conditions
1.
Applicable to Insuring Agreements I.D. and
I.L.1. of this
territory specified
in
"Coverage Part":
Retention Amount
"Coverage Part".
2.
If notice is
Territory
C.
us.
apply
to
legal
expenses
paid under Insuring Agreement I.D. of this
Signatures
A signature that is a mechanical or electronic reproduction of a handwritten signature produced by a

3.
Proof of loss
4.
possible,
Territory
D.
Conditions Applicable to
1.
Insuring Agreements I.F. and I.G. of this "Coverage Part":

Companies
Insuring Agreement I.G. of this "Coverage Part"; we will only pay for the
Armored Motor Vehicle

Under
amount of loss you
cannot recover:
2.
a.
b.
From any insurance

vehicle company.
or
indemnity
Special
We will
only pay up
to
carried
by,
or
for the benefit of customers
of, the armored
$5, 000 for any
one
or
damage
to:
Page
908-0001 08 09
motor
16 of 17
a.
E.
Page
65 of 85

completed articles made of or containing such materials that constitute the principal value of such
articles;
b.
Filed 04/15/16
Document 1-4
or
or records of any kind,

in them.
contained
information
any
Manuscripts, drawings,
or
the cost of
reconstructing
Applicable to Insuring Agreement I.H. of this "Coverage Part":

Special Limit of Insurance for Specified "Property"
We will only pay up to $5, 000 for any one "Occurrence" of loss
drawings, or records of any kind, or the cost of reconstructing them
them
or
reproducing
Conditions
1.
of
or
or damage
reproducing
to
manuscripts,
any information
contained in them.
2.
Territory
of
this
I.H.
"Coverage Part".
Agreement
VIII.
Identity Fraud
Reimbursement
Single loss
Limit of
Liability
Page
908-0001 08 09
17 of 17
Document 1-4
Filed 04/15/16
Hanover
Insurance
Group.
Page
66 of 85
Company
Advantage Portfolio
Private
CRIME INSURANCE
PLEASE READ THIS
RESTRICTIONS.
COVERAGE PART" CAREFULLY TO DETERMINE RIGHTS, DUTIES, COVERAGE AND COVERAGE
Item 1. "NAMED INSURED"

Inc
Item 2. INSURING
AGREEMENTS, LIMITS OF LIABILITY, AND RETENTIONS AMOUNTS

LIMIT OF LIABILITY
INSURING AGREEMENTS
A. Employee Theft
B. ERISA Fidelity
Premises)
Robbery or Safe Burglary of Other Property
Per Occurrence
$2, 000, 000
$2, 000, 000
$2, 000, 000
$2, 000, 000
RETENTION AMOUNT
Per Occurrence
$50, 000 each "Claim"
$0 each "Claim"

$2, 000, 000
$2, 000, 000

$2, 000, 000

$2, 000, 000

$10, 000

$2, 000, 000

$2, 000, 000
$2, 000, 000

F.

H. Computer Crime
1.
2.
Computer Fraud
Computer Program and Electronic Data
Restoration Expense
J. Credit, Debit or Charge Card Fraud

K. Money Orders and Counterfeit Money
1. Personal Accounts Forgery or Alteration
2. Identity Fraud Expense Reim bursement

$2, 000, 000
$10, 000
$0 each "Claim"
000
$25,
no
if
amount is included in the Limit of
or
If "Not Covered" is inserted above opposite any specified Insuring Agreement
is deemed to be deleted.
Part"
thereto
is
and
other
reference
in
this
such
Coverage
any
Insuring Agreement
Liability,
Item 3. FORMS AND ENDORSEMENTS FORMING PART OF THIS
908-0001
908-0035
908-0002 08 09
(08-09)
(08-09)

Arizona Crime Insurance Coverage Part
Amendatory Endorsement
Page
65 of 79
Document 1-4
Filed 04/15/16
Page
67 of 85

By acceptance of this Coverage Part" you are deemed to have given us notice canceling
the cancellation to be effective at the time this Coverage Part" becomes effective.
prior policy Nos.
908-0002 08 09
SECTION,
Page
66 of 79
Document 1-4
Filed 04/15/16
Page
68 of 85

following:
A.

SECTION VII
b.
We may cancel this

"Coverage
Part"
by mailing
or
delivering
1) 20 days before the effective date of cancellation if we cancel for non-payment of premium
at any time;
or
2) 60 days before the effective date of cancellation if we cancel for any other
3)
reason
and this
"Coverage
a) Conviction of the "Named Insured" of a crime arising out of acts increasing the hazard insured
against; or
A
substantial change in the risk assumed, except to the extent that we should reasonably have
b)
c) A substantial breach of contractual duties or conditions; or
d) Loss of reinsurance applicable to the risk insured against, but only if the absence of reinsurance
reinsurer
or
reinsurers;
or
e) A determination by the director of insurance that the continuation of this "Coverage Part" would
place us in violation of the insurance laws of this state or would jeopardize our solvency; or
f) Acts or omissions by the "Named Insured" or his representative which materially increase the
d.
notice.
C.
e.
Paragraph
A.4. Cancellation and
908-0035 08 09
Page
1 of 1
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Filed 04/15/16
Page
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to
this insurance "Policy" the words "you" and "your" refer to the "Insured" as
Throughout this "Coverage Part" of
ADDITIONAL
"Coverage Part".
I.
divulge
the existence of this
INSURING AGREEMENTS
are deemed to be deleted.
Coverage
A.
Kidnap/Ransom
1.
"Kidnap"
2.
and Extortion Threat
Coverage
"Property" surrendered
We will
To do
b.
To do
c.
To introduce
damage, destroy
e.
an
extortion
virus
or
an
or

or computer programs stored within your computer system;
corrupt data
pollute or render substandard your products or goods; or

To disseminate, divulge or utilize proprietary information including formulas, patents, data,
To contaminate,
constant and conscious effort not to disclose the existence of such information to any third
B.
the
bodily harm to an "Insured Individual";

damage to "Premises" or "Property";
a.
d.
as a ransom
alleged "Kidnap" of an "Insured Individual".

pay you for loss of "Property" surrendered as
or
party.
Expenses Coverage
by
Liability applicable to this INSURING AGREEMENT.

Detention and Hijack Coverage
We will pay you for "Expenses" incurred by you directly caused by
are
payable by
us
or
in addition
to the Limit of
C.
the "Detention"
or
"Hijack"
of
an
D.
In-Transit
are
payable by
us
in addition
Coverage
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We will pay you for loss of "Property" while in the care and custody of a "Messenger" directly caused
theft, disappearance, confiscation or destruction while being delivered to individuals demanding the
payment of such "Property" arising
out of
or
by
II.


"Coverage Part":
A.
"Detention"
B.
2.
Acting
Acting
the
holding
3.
4.
an
as an
a.
While in your service;
b.
Who you
c.
Who you have the
Any natural
right
or
a.
To substitute for
b.
To meet seasonal
commissions; and
performing
services for you;
temporarily to you:
permanent "Employee" as defined in Paragraph B.1.,
or
who is
on
leave;
as a
subject to
consultant while
Any natural individual

"Expenses" means:
5.
or
short-term work load conditions,
your direction and control and
performing services for you;

agreement between you and
Any natural individual who is leased to you under a written

Any natural individual who is a former "Employee", director, partner, "Member", "Manager",
retained
who is
performing
services for you;
"Guest" student
or
intern
or
labor
trustee
or
pursuing studies
or
duties.
1.
release of an "Insured Individual";
2.
Fees and costs of
3.
or
individual who is furnished
C.
under duress of
by anyone:
agent of or with the tacit approval of any government or government entity;
or purporting to act on behalf of any insurgent party, entity or group,
2.
for any reason other than "Kidnap".
"Employee" means:
1. Any natural individual:
1.
means
negotiate
or secure
the
Fees and costs of independent public relations consultants and/or interpreters;
"Property"
upon the
4.
The cost of hiring security guards to protect an "Insured Individual"

5.
6.
and other financial benefits paid by you to an "Insured Individual". Such

at the level in effect on the date of the "Kidnap", "Detention", or "Hijack" of the
or an
Salary, commissions
c.
Up to 45 days after their release if the "Insured Individual" has not yet returned to work;
120 days after the last credible evidence following abduction that they are still alive; or
d.
a.
b.
7.
by you
or
Hospitalization
surgery of
an
or
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plastic
2 of 8
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Page
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8.
Fees and costs of
9.

extortion threat;
by you
to pay
a ransom
demand
or
own
parties
13. Any costs incurred by you to recall or destroy any of your products or goods as a result of an extortion
14. Loss of earnings and any other costs incurred by you as a result of an interruption to your business.
12.
D.
"Guest"
1.
2.
means

for business
E.
any individual:
"Hijack"
aircraft
or
social purposes.

means
or
traveling
in
motor vehicle,
F.
G.
"Insured"
H.
1.
2.
means:
The "Insured
Entity" and any
means:
Any director, trustee, partner, "Member", "Manager", "Employee", proprietor (if the "Insured" is a sole
Any "Relative", "Guest" or resident in the household of an "Insured Individual" defined in Paragraph
H.1.; and
Any "Messenger".
"Kidnap" means the involuntary abduction by force or otherwise of an "Insured Individual" for the purpose
"Manager" means an individual serving in a directorial capacity for a limited liability company.
"Member" means an owner of a limited liability company represented by its membership interest, who
also may serve as a "Manager".
"Messenger" means a natural individual designated by you to have care and custody of "Property" outside
3.
I.
J.
K.
L.
the "Premises".
M. "Occurrence" means
an
act
or
event
N.
"Premises"
any building
"Insured Individual" in Paragraph
0.
"Property"
means
means
money,
or
you occupy in
H.1.
or
conducting
events
involving
one or more
individuals.
your business and the residence of any
monetary instruments, securities, services
or
any other
tangible property
that

P.
"Relative"
means a
spouse, child,
step-child, legally adopted child, foster child, spouse of a married child,
Policy
Terms and

A.

1.
Acts Committed
by You
or
"Coverage Part",
this
"Policy"
shall not
cover:
Any "Insured Individual"

Page
909-0001 08 09
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Loss
a.
or
You;
Filed 04/15/16
Document 1-4
from any dishonest, fraudulent
or
Page
72 of 85
by:
or
Any "Insured Individual".

Surrender of "Property"
Loss or "Expenses" resulting from the
b.
2.
B.
2.
3.
"Property":
a.
b.
Outside the "Premises" as a result of a threat to do

such "Property" other than a "Messenger".
For the
1.
surrender of
bodily
harm to
an
receipt of
individual in
Purpose of INSURING AGREEMENT C. of this "Coverage Part"; this "Policy" shall
Military Activity
"Expenses" resulting from an "Insured
Political
the
ransom or
possession
not
of
cover:
or
Individual"
taking part
in any
political activity
or
the
operations
Travel Documents
or
or an

A.
Limit of
Liability

B.
one
"Occurrence" is the
applicable
Limit of
Liability
as
Retention
C.
apply
to any
"Expenses" paid
under INSURING AGREEMENTS B. and

In the event of
A.
an
Determine that the
"Coverage Part", you

actually occurred.
"Kidnap", extortion threat, "Detention"
or
"Hijack"
has
regard to "Kidnap" extortion threat, make every reasonable effort to:

1. Immediately notify the Security Firm shown in the Declarations, if any; and
2. Notify an associate and local law enforcement authorities;
before surrendering any "Property" in payment of a ransom demand or extortion threat.
C. Approve any payment involving a ransom demand or extortion threat.
D. Notify us as soon as practicable.
E. Submit to examination under oath at our request and give us a signed statement of your
F. Give us a detailed, sworn proof of loss within 120 days.
G. Cooperate with us in the investigation and settlement of any claim.
B.
In
must:
or
answers.

Page
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Policy
4 of 8
Document 1-4
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A.
or
mean
Page
73 of 85
"Expenses".
Fraud
"Policy" at any time. It is also

misrepresent a material fact
concerning:
B.
"Coverage Part";
3. The "Property" covered under this "Coverage Part";
4. Your interest in the "Property" covered under this "Coverage Part";
2.
or
through consolidation or merger with, or purchase or acquisition of assets or liabilities of, another
than
such "Premises" and "Employees" shall automatically be covered under this "Coverage Part".
entity,
C.
or
Acquisition
through consolidation or merger with, or purchase or acquisition of assets or liabilities of, some other
If
1.
2.
90 day period.
3.
a.
b.
The merger,
purchase
or
acquisition
occurs
less than 90
days prior to the end of the "Policy
Period."
D.
E.

If, during the "Policy Period" you acquire or form a "Subsidiary":
1. You must give us written notice as soon as possible and obtain our written consent to extend the
2. For the first 90 days after the effective date of such acquisition or formation, the coverage provided by
3. The notice requirement shall not apply and coverage under this condition shall extend for the
a.
b. The acquisition or formation occurs less than 90 days prior to the end of the "Policy Period".
Due Diligence
doing
all
things reasonably practicable

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F.
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Filed 04/15/16
Page
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Investigation and Settlement of Claim

We may make any investigation that we
claim that we deem expedient. If you do
deem necessary and may, with your written consent, settle any
not consent to such settlement, the most we will pay for all loss
G.
H.
Liberalization
Loss Covered Under More Than One Coverage of this "Coverage Part".
If two or more INSURING AGREEMENTS of this "Coverage Part" apply to the same loss, we will pay the
lesser of:
I.
1.
The actual amount of loss;
2.
The
sum
of the Limits of
Loss Sustained and
or
to those coverages.
Reported
1.
2.
During the "Policy Period"; or

"Coverage Part".
However,
we
"Detention"
or
in SECTION II
or
events
occurring during
the
"Policy
Period"

"Hijack"
alleged "Kidnap", an extortion threat,

began prior to the effective date of this
"Coverage Part".
J.
K.
Non-Accumulation of
Liability
1.
any one "Insured".
2.
of the number of years this "Coverage Part" remains in effect and the total premium
amounts due or paid, the amount we shall pay for any loss shall not be cumulative from year to year
Regardless
Other Insurance
L.
However, this "Coverage Part" will not apply to the

Liability shown in Item 2. of the Declarations.
The "Property" covered under this "Coverage Part"
is limited to
more
than the
applicable Limit of
"Property":
lease;
1.
That you
2.
That you hold for
own or
amount of loss that is
others;
or
legally liable.
3.
For which you
are
you.
M.
Records
Page
909-0001 08 09
6 of 8

of any loss.
N.
"Property"
covered under this
"Coverage Part"
Page
75 of 85
so we can
verify
the amount
Recoveries
Any recoveries,
"Coverage Part"
2.
0.
Filed 04/15/16
Document 1-4
less the cost of obtaining

will be distributed as follows:
them, made after settlement of loss covered by this
a.
b.
Then to us, until
c.

any.
we are
Liability
are
reimbursed for that
to the Retention
Amount, if

a.
From insurance,
b.
Of
original
suretyship, reinsurance, security
securities after
or
indemnity
taken for
our
benefit;
or
duplicates of them have been issued.
Territory
following:
3.
"Coverage
P.
Part".
Rights of Recovery against Others to Us

Transfer of Your
Q. Valuation
1.
Settlement
Subject to SECTION
a.
Liability, we will pay for:

and including its face value.

We may, at
1)
2)
b.
V.A. Limit of
our
option, pay for
At face value in the money issued
by that country; or
In the United States of America dollar equivalent determined by the rate of exchange
published in The Wall Street Journal on the day it was surrendered.
Loss of securities but only up to their market value at the close of business on the day they were
1) Pay the value of such securities or replace them in kind, in which event you must assign to us
2) Pay the cost of any Lost Securities Bond required in connection with issuing duplicates of the
a) Value of the securities at the close of business on the day you first became aware of the
loss;
b)
or
Limit of
Liability.
Page
909-0001 08 09
loss of
7 of 8
c.
Loss of
1)
Its
Document 1-4
Filed 04/15/16
Page
76 of 85
damage to "Property" other than money and securities for not more than:
replacement cost value without deduction for depreciation on the day you first
or
aware
of the loss;
became
or
2) The Limit of Liability,

whichever is less.
2.
We may, at
option, pay for loss of or damage to "Property" other than money and securities:
country in which the loss occurred; or
In the money of the
b.
c.
R.
our
a.

1.

2.

4.
or
delivering
Part"
by mailing
or
days before the effective date of cancellation if we cancel for non-payment of premium; or
b. 60 days before the effective date of cancellation if we cancel for any other reason,
We are not required to renew this "Coverage Part". However, written notice of our intent to nonrenew
this "Coverage Part" shall be sent to the "Named Insured" at least 60 days prior to expiration of the
"Policy Period".
a.
3.
by mailing
"Coverage
20
We will mail or deliver our notice to the "Named Insured's" last mailing address known to us. Notice of
Page
909-0001 08 09
8 of 8
Document 1-4
Filed 04/15/16
Hanover
Insurance
Group,
Page
77 of 85
Private Company
Advantaae Portfolio

COVERAGE PART"
PLEASE READ THIS
COVERAGE RESTRICTIONS
Whenever
printed in this
Policy".
Declarations
CAREFULLY TO
DETERMINE
RIGHTS,
DUTIES,
Page, the items in quotations shall have
the
COVERAGE
same
AND
meanings
as
indicated in the

Inc
Item 2. INSURING
AGREEMENTS, LIMITS OF LIABILITY, AND RETENTIONS
Per Occurrence
RETENTION AMOUNT
Per Occurrence
$1, 000, 000
$0
$1, 000, 000

$1, 000, 000
$1, 000, 000
$0
$0
$0
N/A
N/A
LIMIT OF LIABILITY
INSURING AGREEMENTS

Coverage
A.
If "Not Covered" is inserted above opposite any specified Insuring Agreement or if

Limit of Liability, such Insuring Agreement and any other reference thereto is in this
be deleted.
no
amount is included in the
CoveragePart" is deemed to

GLOBE RISK INTERNATIONAL
Water Park Place, 20 Bay Street
Suite 1205
Toronto, ON M5J-2N8
Item 4
FORMS AND ENDORSEMENTS FORMING PART OF THIS
Policy
Form: 909-0001
909-0001
909-0029
909-0002 08 09
(08-09)
(08-09)

Arizona Kidnap/Ransom and Extortion Insurance Coverage Part
Endorsement
Page
Amendatory
76 of 79
Document 1-4
Filed 04/15/16
Page
78 of 85

By acceptance of this Coverage Part" you are deemed to have given us notice canceling
Nos.
the cancellation to be effective at the time this Coverage Part" becomes effective.
prior policy
THESE DECARATIONS, TOGETHER WITH THE COMMON POLICY TERMS AND CONDITIONS SECTION,
909-0002 08 09
Page
77 of 79
Document 1-4
Filed 04/15/16
Page
79 of 85

following:
A.

SECTION VII
2.
We may cancel this

a.
20
days
or
delivering
before the effective date of cancellation if we cancel for
at any
time;
Or
c.
1)
against;
crime
arising
out of acts
reason
increasing
and this
"Coverage
b.
the hazard insured
or
2)
3)
4)
or
conditions;
reasonably
have
or
5) A determination by the director of insurance that the continuation of this "Coverage Part" would
6) Acts or omissions by the "Named Insured" or his representative which materially increase the
4.
C.
notice.

5.
909-0029 08 09
Page 1 of 1
Document 1-4
Filed 04/15/16
Page
80 of 85
H nover
Insurance
Croup'
THE ONLY SIGNATURES APPLICABLE TO THIS POLICY ARE THOSE REPRESENTING THE COMPANY
NAMED ON THE FIRST PAGE OF THE DECLARATIONS.
We have caused this policy to be

declarations page, where required, by
signed by our President and Secretary

duly authorized agent of the company.
and
countersigned
on
the

440 Lincoln Street
Charles F. Cronin
Secretary
SIG-0001 06 05
Marita Zuraitis
President
Page 1 of 1
Private
4Flanover
Filed 04/15/16
Document 1-4
81 of 85
Page
Company Advantage Portfolio
Renewal
Insurance Groups
APPLICATION FORM
CLAIMS-MADE WARNING FOR APPLICATION
THIS APPLICATION IS FOR A CLAIMS-MADE AND REPORTED POLICY. SUBJECT TO ITS TERMS, THIS POLICY WILL APPLY
ONLY TO "CLAIMS" FIRST MADE AGAINST THE "INSUREDS" AND REPORTED TO THE "INSURER" DURING THE POLICY
PERIOD OR ANY EXTENDED REPORTING PERIOD THAT MAY APPLY. PLEASE READ THE "POLICY" CAREFULLY TO DETERMINE
Whenever used in this
Application,
"Applicant' shall
the term
mean
the "Named Insured' and all subsidiaries, unless
otherwise stated.
1.
Name of
2.
Address of
City:
Applicant
g3
Applicant:
S C-41
EIVIA--77-0Arfr4
110
-Se
For
j1Jc,
AZ
Zip Code:
above) of Primary Contact (Executive Officer authorized
km
to receive notices and information
ri
c-C
Zip Code:
State:
Employment
Name:
Pe
g5-2-5- 5
12
City:
4.
"46 5
E
State:
Name and Address (if different than

regarding the proposed policy):
Name:
Jt
D rnr-e
4i1D
Telephone:
3.
kie--A/LindI
Practices Loss Prevention, indicate the individual
R.4.:
re-R,
14
Email Address:
L_X'I
responsible for
human
A-L C-0
Gf;
Title:
C_, :)-ea
resources or
employment
law matters:
5 eL
Telephone:
GENERAL INFORMATION
1.
Number of
employees:
Total US
Total
2- 5
Full Time
8"
2- 0
total
2.
Applicants
3.
Applicants total assets
revenues as
as
in Califomia
Part fime
L 2- 4-13 -7
0-7 9 to
of the most recent fiscal year end:
of the most recent fiscal year end:
4.cashflowfrornoperabonsasofthernostrecentfiscalyearend:$2Dele:16
5.
Is the
Applicant
tf "No",
6.
in
compliance with all debt and /or loan covenants?
please attach
full
In the next 12 months is the Applicant contemplating (or has the Applicant completed within the
last year) any actual or proposed merger, acquisition, or divestment, any registration for a public
offering or a private placement of securities, any location, facility or office closings, consolidations
or layoffs or any reorganization or arrangement with creditors under federal or state law?
If the
0 Yes
XN
0 Yes
klo
explanation.
Applicant answered "yes"
to Question
6, please attach
full
explanation.
DIRECTORS AND OFFICERS LIABILITY INFORMAlION

1.
Over the past 12 months, has there been any

if "Yes"
2.
please
attach
changes
in the Board of Directors?
0 Yes
list of current Board and outside affiliations.
Please list all non-director and non-officer shareholders who

if none
each (if none, so indicate)
XChed<
Non director
or non
officer shareholders:
directly
or
beneficially
of
hold
common
voting shares
stock and the
*o
percentage owned by
owned:
fTiare
PAGE
904-0006
DIM
3.
Has there been any
tf "Yes",
please
change
attach
full
in the
Applicant's ownership
description
of
Filed 04/15/16
Document 1-4
ownership
Page
structure within the last twelve months?
82 of 85
0 Yes
'<No
E Yes
'](No
structure.
EMPLOYMENT PRACTICES UABILITY INFORMATION

t
Within the last year has the Applicant updated its employment practices handbook,
resources policies and procedures or department?
If "Yes"
2.
please
Number of
attach
employees
copy of
updated
who have left the
materials and
Applicant
description
over
of
or
human
changes.
the past 12 months
Cl
Voluntary
Involuntary
FIDUCIARY LIABILITY INFORMATION

1.
Please
complete
the
following information regarding the Applicant's employee pension
_i#44-1,.,
2,i_., , ,.', 1, s1:,--4, -..11;'.. Type::
i.D1F13-r71, .1-2.101-:., b......0*-Ià.M,LI df plan-,
wree:TrtfanS)-5.VE,"t141/1- Lt1//f 1 -2-6( 13 g DC
benefits plan(s).
....i,i,u_fr11..),:.4
F, t.a: .-ing
of.
Ifirtiiii or 7
2,
.;--=:oit.:47,1_, 3:: :- -,-=:f...-;
by.1 0a.f0,a06.--....
thran15% (DIPonly)
4Ztirs:,
'''!''Pant
*Defined Contribution (DC), Defined Benefit (DB),

2.
_I
Uncicr of C.), Ier: Ftind2d

i,
f, More
please explain.
E No
E Yes
E No
E Yes
E No
E Yes
E No
E Yes
E No
Employee Stock Ownership (ESOP),
In the next 12 months is the Applicant contemplating (or has the

last year) merging or terminating any plan(s)?
If 'Yes,
E Yes
Excess Benefit
Applicant completed
MITlihisleal
or
Top
Hat (EBP)
within the
EYes
*o
0 Yes
XI/No
Attach additional pages if needed.
CRIME COVERAGE INFORMATION

1.
Does the
Applicant:
(a) Allow the employees who reconcile the monthly bank statements to also
deposits and have access to check signing machines or signature plates?
sign checks, handle
procedures in place to verify the existence and ownership of all new vendors prior to
E Yes
adding them to the authorized master vendor list?
a
invoices
authorized
the
and
against corresponding purchase order, receiving report
Verify
master vendor list prior to issuing payment?,
(b) Have
(c)
2.
LlicYes
Number of Locations:
Domestic Locations
X'ro
E No
Locations in each
A6-(z-vNA
Foreign Countries (Name)
Locations in each
ftt.-6-X
r.nore
=f-
95.0006 11 CY09
3.
Have there been any
(a)
changes
since the last
application
was
provided
BF 6 fr,
pificori
or
external audit
(d) Internal
or
external controls
(e) Exposures of money, securities
or
other property
(f) Predous metals gems, computer chips

if any of the above
are
//1
iNr
()4 Ft)A...24../- I
procedures ptty*tic_144_
(c) Internal
answered
by
high
"Yes", please attach a
or
more
unit count
full
Page
83 of 85
in:
Legal Entity status
(b) Business Activity
4.
Filed 04/15/16
Document 1-4
Li Yes
XNo
Yes
E No
Yes
12 No
E Yes
No
than 10%
C. Yes
No
inventory exposures
El Yes
No
explanation.
List all crime losses discovered during the last policy period, whether reimbursed
Include date of loss, description, total amount of loss, and corrective measures.
or
not, itemizing each loss
separately.
X6heck
Attach additional pages if needed.
too r.rf
if
none
KIDNAP/RANSOM & EXTORTION COVERAQE INFORMATION

1.
Please
complete
the
following
information
Number of annual trips
Countries Visited
f
its' I A, Ca f tj-14-1
2.
regarding the foreign
travel of the
Average stay
5
1
Applicants employees:
Number of employees
ig-15
bAtt
0114ifOalgA-FOrded.
DeOng (40(Pants secudty precautions3aken for foreign travel: S A At'i5
DECLARATIONS AND NOTICE
undersigned agree that the information provided in this Application" and any material submitted herewith are the representations
Applicants and that they are material and are the basis for issuance of the insurance policy provided by us. The undersigned
further agree that the "Application" and any material submitted herewith shall be considered attached to and a part of the policy. Any
material submitted with the 'Application" shall be maintained on file (either electronically or paper) with Us and shall be deemed to be
attached hereto as if physically attached.
The
of all the
agreed that:
If any of the Applicants discover or become aware of any significant change in the condition of the Applicants Organization
between the date of this "Application" and the "Policy" inception date, which would render the "Application" inaccurate or incomplete, notice of such change will be reported in writing to us immediately;
Any "Policy' issued, will be in reliance upon the truthfulness of the information provided in this Application"; provided,
however, with respect to such information, no knowledge or information possessed by any Applicant shall be imputed to any other
Applicants. If any person or persons knew as of the policy inception date that such information contained in the 'Application(s)"
were untrue, inaccurate or incomplete, then Coverage may be denied or canceled with respect to that person or persons if such
information was material to issuance of the policy. However, if the Chairperson of the Board of Directors, President, Chief Executive
Officer, or Executive Director of the Applicant knew as of the "Policy' inception date that such information contained in the
Application(s)" were untrue, inaccurate or incomplete, then Coverage may be denied or canceled with respect to that person or
persons and the Applicant Organization if such information was material to issuance of the "Policy',
Statements in the Application", facts pertaining to or knowledge possessed by the individual signing the application shall be
imputed to the Applicant; and
The signing of this 'Application" does not bind the undersigned to purchase the insurance.
tt is further
ta
C
K1
Jr/ Ole
904-0006
kla.09)
Document 1-4
Filed 04/15/16
Page
84 of 85
NOTICE TO COLORADO APPLICANTS: IT IS UNLAWFUL TO KNOWINGLY PROVIDE FALSE, INCOMPLETE, OR

MISLEADING FACTS OR INFORMATION TO AN INSURANCE COMPANY FOR THE PURPOSE OF DEFRAUDING OR
AITEMPTING TO DEFRAUD THE COMPANY. PENALTIES MAY INCLUDE IMPRISONMENT FINES, DENIAL OF INSURANCE,
AND CIVIL DAMAGES. ANY INSURANCE COMPANY OR AGENT OF AN INSURANCE COMPANY WHO KNOWINGLY
PROVIDE FALSE, INCOMPLETE, OR MISLEADING FACTS OR INFORMATION TO A POLICYHOLDER OR CLAIMANT FOR

THE PURPOSE OF DEFRAUDING OR ATTEMPTING TO DEFRAUD THE POLICYHOLDER OR CLAIMANT WITH REGARD
TO A SETTLEMENT OR AWARD PAYABLE FROM INSURANCE PROCEEDS SHALL BE REPORTED TO THE COLORADO
DIVISION OF INSURANCE WITHIN TI-IE DEPARTMENT OF REGULATORY AGENCIES.

NOTICE TO NEW MEXICO AND PENNSYLVANIA APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO
DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT
OF CLAIM CONTAINING ANY MATERIALLY FALSE
INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING,
INFORMATION CONCERNING ANY FACT MATERIAL THERETO COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS
A CRIME AND SUBJECTS SUCH PERSON TO CRIMINAL AND CIVIL PENALTIES.
NOTICE TO KENTUCKY APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY
CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING,
INFORMATION CONCERNING ANY FACT MATERIAL THERETO COMMITS A FRAUDULENT INSURANCE ACT WHICH
IS A CRIME
NOTICE TO APPUCANTS IN MINNESOTA, NEW JERSEY, OHIO AND OKLAHOMA: ANY PERSON WHO KNOWINGLY
AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR
INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS, FOR
THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, IS GUILTY OF A
FELONY AND IS SUBJECT TO CRIMINAL AND CIVIL PENALTIES.
NOTICE TO DISTRICT OF COLUMBIA, MAINE, MASSACHUSETTS, TENNESSEE, VIRGINIA, AND WASHINGTON

APPLICANTS: IT IS A CRIME TO KNOWINGLY PROVIDE FALSE, INCOMPLETE OR MISLEADING INFORMATION TO AN
INSURANCE COMPANY FOR THE PURPOSE OF DEFRAUDING THE COMPANY. PENALTIES INCLUDE IMPRISONMENT
FINES AND DENIAL OF INSURANCE BENEFITS.

NOTICE TO FLORIDA APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO INJURE, DEFRAUD OR
DECEIVE ANY INSURER FILES A STATEMENT OF CLAIM OR AN APPLICATION CONTAINING ANY FALSE, INCOMPLETE,
OR MISLEADING INFORMATION IS GUILTY OF A FELONY OF THE THIRD DEGREE
NOTICE TO NEW YORK APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY
CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING,
INFORMATION CONCERNING ANY FACT MATERIAL THERETO COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS
A
CRIME, AND SHALL ALSO BE SUBJECT TO A CIVIL PENALTY NOT TO EXCEED FIVE THOUSAND DOLLARS AND THE
STATED VALUE OF A CLAIM FOR EACH SUCH VIOLATION.
"Application" must be signed by the

epresentatives of the person(s) and en
This Renewal
authortzed
G/1,/12,.
Chief Executive Officer and Chief Financial Officer of the Applicant
ies) pro.:,
Chief Executive Officer (Signature)
Dated
ated
;401P
acting as the
nsurance.
S-i1/4"1
C
A.------,
inancial Officer (Signature)
more
804-0006
(10/09)
Please attach
copy of the
E Most recent CPA
Produce
prepared
ID:
Page
85 of 85
financial statement
Management and management's
Report (Applicable to Employment
response (if this Letter is not issued,
Practices
By: Agent.
Agency Taxpayer
Filed 04/15/16
following for every Applicant seeking coverage:
E Most recent CPA Letter to
L] Most recent EEO-1
Document 1-4
so
indicate)
Liability coverage only)
Agency:
or
Social Security No.:
Agent License
No.:
Address:
(Street, City, State, Zip)
A POLICY CANNOT BE ISSUED UNLESS THE "APPLICAllON" IS PROPERLY SIGNED AND DATED.
Please submit this
"Application" including appropriate

documentation to:
333 W. Pierce Road, Suite 300, Itasca, IL 60143
www.hanovencom
g04-0006
446 Lincoln Street, Worcester. MA 01653
Document 1-5
Filed 04/15/16
EXHIBIT 4
Page
1 of 94
Document 1-5
Filed 04/15/16
Page
2 of 94
Hanover
Privacy Policy and Producer Compensation Practices Disclosures
Privacy Policy Disclosure
We collect personal information so that we may offer quality products and services. This information may
include, but is not limited to, name, address, Social Security number, and consumer reports from
consumer reporting agencies in connection with your application for insurance or any renewal of
insurance. For example, we may access driving records, insurance scores or health information. Our
information sources will differ depending on your state and/or the product or service we are providing to
you. This information may be collected directly from you and/or from affiliated companies, non-affiliated
third parties, consumer reporting agencies, medical providers and third parties such as the Medical
Information Bureau.
non-public, personal information you provide, as required to conduct our business and
permitted or required by law. We may share information with our insurance company affiliates or with
third parties that assist us in processing and servicing your account. We also may share your information
with regulatory or law enforcement agencies, reinsurers and others, as permitted or required by law.
We may disclose
as
Our insurance companies may share information with their affiliates, but will not share information with
non-affiliated third parties who would use the information to market products or services to you. We do
not share the non-public personal information of customers of our SEC regulated companies or customers
who own products of ours which are SEC regulated with affiliated or non-affiliated companies who would
use that information to market products or services to you.
Safeguards
apply
to all of
our
recognize the need to prevent unauthorized access to the information we collect,

electronic format on our computer systems. We maintain physical, electronic and
safeguards intended to protect all non-public, personal information.
We
an
including that held

procedural
in
personal, nonpublic information is limited to those people who need the information to provide
products or services. These people are expected to protect this information from
inappropriate access, disclosure and modification.
Access to
our
customers with
Consumer
Reports
In some cases, we may obtain
Depending
such
on
the type of
a consumer
policy,
report in connection with an application for insurance.

report may include information about you or your business,
a consumer
as:

credit history, driving record (including records of any operators who will be insured under the policy);
and/or
appraisal of your dwelling

general condition.
an
or
place of business that may include photos and
comments on its
Upon written request, we will inform you if we have ordered an investigative consumer report. You have
right to make a written request within a reasonable period for information concerning the nature and
scope of the report and to be interviewed as part of its preparation. You may obtain a copy of the report
from the reporting agency and, under certain circumstances; you may be entitled to a copy at no cost.
the
You also may review certain information we have about you or your business in our files. To review
information we maintain in our files about you or your business, please write to us, providing your
complete name, address and policy number(s), and indicating specifically what you would like to see. If
231-0862
(11/11)
Page
1 of 2
Document 1-5
Filed 04/15/16
Page
3 of 94
Hanover
you request actual copies of your file, there may be a nominal charge.
We will tell you to whom we have disclosed the information within the two years prior to your request. If
there is not a record indicating that the information was provided to another party, we will tell you to
whom such information is normally disclosed.
There is information that we cannot share with you. This may include information collected in order to
evaluate a claim under an insurance policy, when the possibility of a lawsuit exists. It may also include
medical information that we would have to forward to a licensed medical doctor of your choosing so that it
may be properly explained.
your file you believe information is incorrect, please write to the consumer reporting
to us, whichever is applicable, explaining your position. The information in question will be
investigated. If appropriate, corrections will be made to your file and the parties to whom the incorrect
information was disclosed, if any, will be notified. However, if the investigation substantiates the
information in the file, you will be notified of the reasons why the file will not be changed. If you are not
satisfied with the evaluation, you have the right to place a statement in the file explaining why you
believe the information is incorrect. We also will send a copy of your statement to the parties, if any, to
If after
reviewing
agency
or
Our Commitment to
Privacy
In the insurance and financial services business, lasting relationships are built upon mutual respect and
trust. With that in mind, we will periodically review and revise our privacy policy and procedures to ensure
If any provision of our privacy policy is
that we remain compliant with all state and federal requirements
found to be non-compliant, then that provision will be modified to reflect the appropriate state or federal
requirement. If any modifications are made, all remaining provisions of this privacy policy will remain in
effect. For more detailed information about our privacy policy, visit our Web site, located at
www.hanover.com.
Producer
products are sold through independent agents and brokers, often referred to as "Producers." We may
pay Producers a fixed commission for placing and renewing business with our company. We may also pay
additional commission and other forms of compensation and incentives to Producers who place and
Details of our Producer compensation practices may be found at
maintain their business with us.
www.hanover.com.
Further Information
Our
If you have questions about our privacy policy, or if you would like to request information we have on file,
please write to us at our Privacy Office, N435, The Hanover Insurance Group, Inc., 440 Lincoln Street,
Worcester, MA 01653. Please provide your complete name, address and policy number(s). A copy of our
Producer Compensation Disclosure is also available upon written request addressed to the attention of the
Corporate Secretary, N435, The Hanover Insurance Group, 440 Lincoln Street, Worcester, MA 01653.
This notice is being provided on behalf of the following Hanover Companies: The Hanover Insurance Group, Inc. Allmerica Financial Alliance
Citizens Insurance Company of
Insurance Company Allmerica Financial Benefit Insurance Company Allmerica Plus Insurance Agency, Inc.
America Citizens Insurance Company of Illinois Citizens Insurance Company of the Midwest Citizens Insurance Company of Ohio Citizens
Management, Inc. AIX Ins. Services of California, Inc.- Benchmark Professional Insurance Services, Inc.- Campania Insurance Agency Co.
Inc.- Campmed Casualty & Indemnity Co. Inc Chaucer Syndicates Limited- Educators Insurance Agency, Inc.- Hanover Specialty Insurance
Brokers, Inc. The Hanover American Insurance Company The Hanover Insurance Company The Hanover New Jersey Insurance Company
The Hanover National Insurance Company Hanover Lloyd's Insurance Company Massachusetts Bay Insurance Company Opus Investment
Management, Inc. Professionals Direct Insurance Company Professionals Direct Insurance Services, Inc. -Professional Underwriters Agency,
Inc.- Verlan Fire Insurance Company Nova Casualty Company AIX Specialty Insurance Company
231-0862
(11/11)
Page
2 of 2
Filed 04/15/16
Document 1-5
Hanover
Insurance
Group.
Page
4 of 94
Private
Company
Advantage Portfolio
POLICY DECLARATIONS
Coverage
Policy Number
is
provided by:
LH4 8827059 04
Agency
Agency
ARNETT INSURANCE
Code
2301563
SERVICES

PLEASE REFER TO THE "COVERAGE

Item 1.
PART(S)" PURCHASED FOR DEFENSE-RELATED DETAILS.
Page,
the items in
quotations shall have
the
same
meanings
as

Inc
Person
Name:
Designated to receive
Jeff Brandemeyer
all
correspondence from the Insurer:
Title: VP Finance
Item 2.
POLICY PERIOD
From: 08/01/2013 To: 08/01/2014 (12:01 AM local time at the address shown
Item 3.
Item 4.
1)

Combined
Aggregate Limit of Liability for all "Liability Coverage
purchased
as
Parts"
$5, 000, 000
indicated below.
X Yes
No
Employment Practices Liability Insurance Co verage Part:
El Yes
LII No
El Yes
Ei
No
El Yes
Ei
No
Crime
Coverage Part:
El Yes
Kidnap Ransom and Extortion Coverage Part:

Item 5.
in Item
No
Policy
Form: 904-0001
401-1127
904-0002 08 09
(01-08)
Notice Offer of Terrorism
Coverage
2008
Page
1 of 2
Item 6.
401-1192
401-1268
(01-09)
(08-12)
422-0082
422-0083
(01-09)
(01-09)
904-0001
904-0048
(08-09)
(08-09)
904-0503
904-0507
904-0813
905-0001
905-0319
905-0320
905-0432
905-0434
906-0001
906-0303
906-0314
906-0404
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
907-0001
908-0001
908-0035
909-0001
909-0029
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
SIG-0001
(06-05)
Document 1-5
Filed 04/15/16
5 of 94
Terrorism Coverage Explanation Policy Holder Notice

U.S. Treasury Department's Office of Foreign Assets Control ("OFAC")
Advisory Notice to Policyholders
Cap on Losses From Certified Acts of Terrorism Endorsement
Endorsement
Endorsement
Addition to Section V. Sub limit Specific Endorsement
Addition to Section VIII. Non-Rescindable Side A and B Endorsement
Addition to Section III. Illegal Alien Investigative Proceeding With Sub limit
Expense Sub limit
Endorsement
Corporate Signature Page
PREMIUM FOR POLICY

Policy Coverage Premium:
Total Amount:
*See State
Page
Surcharge Notice(s)
$33, 634.00
$33, 634.00
to
Policyholder, if applicable
904-0002 08 09
Page
2 of 2
Document 1-5
Filed 04/15/16
Page
6 of 94
Policy Number:LH4 8827059 04

"acts of terrorism, as defined in Section 102(1) of the Terrorism Risk Insurance Act ("Act") is
Coverage for


Following Premium
Other than Fire Following Premium
Fire
401-1127
(01/08)
Document 1-5
Filed 04/15/16
Page
7 of 94
restrictions and to other provisions in certain terrorism endorsement(s) in this policy. If there is any conflict
Carefully read
your
policy, including the endorsements attached
to your
policy.

422-0082
respect to "certified acts of terrorism" and

example, the nuclear hazard and war exclusions)
With
acts of terrorism that are not certified the policy exclusions

and other policy provisions continue to apply.
(for
422-0083 The endorsement excludes "punitive damages" either directly or indirectly arising out of a certified act
401-1192 01 09
Document 1-5
Filed 04/15/16
Page
8 of 94
Hanover
Insurance
Group-

OFFICE OF FOREIGN ASSETS CONTROL ("OFAC")
You should read your policy and review your Declarations page for complete information on the coverages
policy.
provided.
provides information concerning possible impact on your insurance coverage due to directives issued
by OFAC. Please read this notice carefully.
The Office of Foreign Assets Control ("OFAC") administers and enforces sanctions policy, based on Presidential
you
are
This notice
Other limitations
401-1268 08 12
on
the
premiums
and
payments also apply.
Page
1 of 1
Document 1-5
Filed 04/15/16
Page
9 of 94

ENDORSEMENT
following:
aggregate insured losses attributable
to terrorist
certified under the federal Terrorism Risk
insurer deductible under the Terrorism Risk
our
If
acts

422-0082 01 09

Act; and
act that is dangerous
infrastructure and is
coercion.
2. The act is
to human
violent act
or an
life, property
or
Page
1 of 1
Filed 04/15/16
Document 1-5
Page
10 of 94

following:
A.
The following is added to SECTION IV

B.
The following Definition is added to SECTION III


422-0083 01 09

1.

2.

human
life,
property or
dangerous
is
infrastructure and
committed
by an
coercion.
The act is
to
Page
1 of 1
Document 1-5
Filed 04/15/16
Page
11 of 94

Throughout this insurance "Policy" the words "you" and "your" refer to the "Insured" as defined in SECTION
Common Policy Terms and Conditions Section and any purchased "Coverage Parts". The words "we",
of coverage.
special meaning. They are defined in SECTION III

are solely for convenience and form no part of the
III of the
"us" and
DEFINITIONS. The
terms and conditions
II.
Optional Extended Reporting Period as described below:

Liability Coverage Parts
We will
A.
provide
an
Period shall
3.
cease.
4.
5.
this Optional Extended

covering any "Claims" first made during
excess over
Reporting
If we cancel for non-payment of premium, the "Named Insured" may purchase the Optional Extended
be canceled.
Page
904-0001 08 09
1 of 8
III.
Filed 04/15/16
Page
12 of 94
done so in accordance with SECTION ll
Coverage Parts".
6.
B.
Document 1-5
The
DEFINITIONS
The
A.
following words, either in the singular or plural, shall have the meanings indicated
"Application" means:
1. The form titled "Application" submitted to request this "Policy", including
below.
any documents
or
other

2.
3.
All other materials
or
information
provided by the "Insured" for the underwriting
issuance of this
or
"Policy".
attached to it.
B.
meaning as defined in the applicable "Coverage Part".

means individually or collectively the purchased "Coverage
if
physically
E.
Parts" as set
"Coverage Part"
"Defense Expense" shall have the meaning as defined in the applicable "Coverage Part".
F.
"Executive"
C.
as
forth in Item 4. of
the
D.
means
any natural individual who
is,
was, or shall become:
appointed director, officer, manager,
general counsel,
trustee of the
1.
A duly-elected or
2.
Any past, present or future members of any duly-constituted commissions, boards, committees
Solely with respect to the "Non-Liability Coverage Parts",

in-house
"Executive" shall have the
or
meaning
as
or
other
defined in
the
G.
1.
means:
Any "Executive"
2.
3.
4.
6.
7.
of the "Insured
Entity" or while
Entity" while acting solely within the course and scope of employment
performing duties related to the conduct of the "Insured Entity",
or
future
Any past, present
employees of the "Insured Entity" while acting solely within the course and
"Insured Entity";
Any natural individual providing volunteer services for the "Insured Entity" at the request of the "Insured
The legal representatives or assigns of an "Insured Individual" in the event of the "Insured Individual's"
with the "Insured
the spouse.
H.
meanings
as
defined in the

Page
904-0001 08 09
2 of 8
I.
J.
K.
L.
M.
"Insured
Entity"
Document 1-5
Filed 04/15/16
Page
13 of 94
the "Named Insured" and any
"Subsidiary".
"Non-Liability Coverage Event" means the "Occurrence" which must be sustained or discovered in order to
means
invoke coverage.
"Non-Liability Coverage Part"
means
as
collectively the Crime Coverage Parts and Kidnap

"Policy" Declarations.
0. "Occurrence" shall have the meaning as defined in the applicable "Non-Liability Coverage Part".
P. "Outside Entity" shall have the meaning as defined in the applicable "Coverage Part".
N.
individually
or
reclaimed.
T.
"Subsidiary" means:
1. An entity in which
the "Named Insured"

or issued and
assets, liabilities, equity,

Period"; or
percent or more of the

inception of the "Policy
entity, subject to the terms of SECTION V.A. of the "Coverage Part", that the "Insured" forms
"Wrongful Act" shall have the meaning as defined in the applicable "Liability Coverage Part".
2.
U.
of its "Subsidiaries" owns 50

outstanding stock on or before the
or one
An
or
IV. EXCLUSIONS
A.
against
any "Insured"
directly
or
Pollution
1.
The actual,
"Pollutants";
alleged
or
threatened
discharge, dispersal, seepage, migration,
release
or
escape of
or
2.
3.
"Claim" by
or on
behalf of
governmental authority for "Damages" because of testing for, monitoring,

or neutralizing, or in any way responding to or assessing the
removing, containing, treating, detoxifying

B.
Nuclear
V.

A.
Limits of
1.
Liability
Regardless of the number of "Insureds" involved, "Claims" made or individuals or entities making
"Claims", our liability under the "Policy" solely with respect to all "Liability Coverage Parts" is limited as
follows:
Page
904-0001 08 09
3 of 8
Document 1-5
Filed 04/15/16
Page
14 of 94
a.
b.
2.
B.
c.
applies.
Solely with the respect to the "Non-Liability Coverage Part", the maximum liability shall be the respective
Limit of Liability described in the applicable 'Non-Liability Coverage Part".
Retentions
1.
This
2.
3.
Solely with respect to any "Liability Coverage Part", if different parts of a single "Claim" are subject to
4.
is in
excess
of the
A.
With
1.
2.
respect
to "Claims"
Make any
we
defend
of
we
may:
"Claim"
we deem necessary; and

investigation
Settle any resulting "Claim" provided that we have the "Named Insured's" written
a
consent to
settle,
Page
904-0001 08 09
4 of 8
B.
Filed 04/15/16
Page
15 of 94
1.
including
percent of such "Loss" excess of the amount for which the "Claim" could have been settled.
Our right and duty to defend, to continue to defend or to pay "Defense Expenses" under the "Policy" shall
2.
C.
Document 1-5
75
after the Limit of
Liability has
been exhausted.

A.
No "Insured" will, except at that "Insured's" own expense, voluntarily make

to a settlement or incur any expense related to a "Claim" without
obligation, agree
payment,
our
assume
any
consent.
B.
C.
D.
E.
papers received in
1.

2.
Authorize
3.
Cooperate with
4.
Assist us, upon

request, in the enforcement of any right against any individual or
us

us
in the
investigation,
summonses
or
legal
information;
defense
or
settlement of the
"Claim"; and
our
entity
which may
1.
How, when and where the "Wrongful Act" took place; and
2.
The
names
and addresses of any individuals and entities involved.
Any "Claim" arising out of a "Wrongful Act" which is subsequently made against you shall be deemed to
1.
2.
We receive proper notice of the
The date of
sufficient
mailing shall
proof of notice.
by the terms of this "Policy"; and

"Wrongful Act" according to Paragraph D. above.
constitute the date that such notice was given and proof
of
mailing
shall be
F.
G.
A.

1.
2.
3.
We
are
"Policy"
case we
will
Page
904-0001 08 09
give
5 of 8
4.
B.
D.
16 of 94
that:

"Application"
for this insurance
"Policy"
are
your representations
Legal Action Against Us
To join us as a party or otherwise bring us into a suit asking for "Damages" from an "Insured"; or
2.
C.
Page
Solely with respect to the "Non-Liability Coverage Parts", any Cancellation or Non Renewal shall be
Part'.

By accepting this "Policy" you agree
1.
Filed 04/15/16
Document 1-5
The
a.
Another individual or entity or group of individuals

assets of the "Named Insured"; or

entities
acquires
more
than 50
percent of the
merges with another
entity,
you shall notify
c.
us
2.
or
or
of the
Transaction.
3.

4.
The entire
5.
In the event of
premium for this "Policy" shall be deemed fully
provided
earned upon the
occurrence
of
"Policy"
Transaction.
Transaction, the "Named Insured" will have the right, upon payment of
an additional
of
a
the
for
the
"Claim" first
an
to
extension
of
under
premium,
appropriate percentage
"Policy"
coverage
a
Page
904-0001 08 09
6 of 8
E.
Document 1-5
Filed 04/15/16
Page
17 of 94
6.
7.
8.
9.
Transfer of
Rights of Recovery Against Others
inception of
the Run-Off
Liability
in Item 2.
to Us
F.
G.
Assignment
No change in, modification of or assignment of interest
in this
"Policy"
shall be effective
except when made
Agent for the Insured

By accepting this "Policy", you
Sole
agree that only the "Named Insured" is authorized to act on behalf of all
respect to any rights provided under this "Policy".
H. Coverage Territory and Valuation
"Insureds" with
Canada.
I.
premiums, limits, Retentions, "Loss" and other amounts are expressed and payable in the currency
2.
All
3.
respectively.
Solely with respect
to each Non-Liability Coverage Part, Coverage Territory and Valuation shall be in

Other Insurance
1.
2.
3.

excess over
sum
other insurance
we
will pay
only
our
of:
a.
b.
The total of all
insurance;
deductibles, self-insurance and retentions under all that other insurance; and
Any indemnification available from an "Outside Entity" to an "Insured".

c.
Page
904-0001 08 09
7 of 8
4.
Method of
Document 1-5
Filed 04/15/16
Page
18 of 94
Sharing
5.
J.
Solely with respect to each "Non-Liability Coverage Part", the application of Other Insurance shall be in
Two
or
More
Policies, Coverage Parts,
or
Endorsements Issued
by Us
stated intention that this "Policy" and any other "Policy", "Coverage Part" or endorsement issued by
It is
our
notwithstanding:
K.
1.
We shall not be liable under this "Policy" for a greater proportion of the "Loss" than the applicable Limit
2.
The maximum amount payable under all such

policies combined shall not exceed the highest applicable
Allocation
1.
100
2.

on
on
"Loss"; and

exposure of the parties to such
legal
matters.
Page
904-0001 08 09
8 of 8
Document 1-5
Filed 04/15/16
Page
19 of 94

following:

A.
B.

5.
6.

SECTION VIII
3.
Misrepresentations, omissions, concealment of facts

and incorrect statements shall not
prevent
a.
Fraudulent;
b.
Material either to the
c.
would either have not issued this "Policy", or would not have issued a "Policy" in as
or would not have provided coverage with respect to the hazard resulting in the
otherwise.
We in
large
904-0048 08 09
or
acceptance of the risk,
or
by
us; or
good faith
an
amount,
Page
1 of 1
Document 1-5
Filed 04/15/16
Page
20 of 94
following:

A.

this "Policy":
1.
with
"No
Liability"
a.
A final judgment of
motion to dismiss or
b.
means
A final judgment of
of appeals.
respect
2.
"Claim" made
against the "Insured(s)":
liability obtained prior to the trial, in favor of all "Insureds", by reason of

motion for summary judgment, after the exhaustion of all appeals; or
no
liability obtained prior
Liability" apply

1.
Policy Terms and Conditions of
no
In no event shall the term "No

B.
to
to the
to
trial, in favor of all "Insureds", after the exhaustion

"Claim" made
against
an
"Insured" for which
a.
There is
b.

Liability";
Policy
a
civil
or
prejudice and without any payment of any
If a "Claim" is dismissed or stipulated dismissed without prejudice and without any payment by any
a.
The "Claim" or any other "Claim" which together with such "Claim" would be deemed a single "Claim"
904-0503 08 09
Page
1 of 1
Document 1-5
Filed 04/15/16
Page
21 of 94
SUBLIMIT SPECIFIC ENDORSEMENT
following:

Terms and Conditions Section of this "Policy":
Policy
1, 000, 000 shall be the maximum aggregate Limit of Liability for all "Loss", solely with
The amount of
respect to Endorsement 095-0319 of this "Policy", which amount shall be part of and not in addition to the
Limits of Liability stated in Item 2. of the applicable "Coverage Parts" Declarations.
904-0507 08 09
Page
1 of 1
Document 1-5
Filed 04/15/16
Page
22 of 94

NON-RESCINDABLE SIDE A AND B ENDORSEMENT
following:

The
is added to SECTION VIII

GENERAL CONDITIONS, Paragraph B.
of the Common Policy Terms and Conditions Section of this "Policy":
following
Application
Representations and
Notwithstanding the foregoing, Insuring Agreements I.A. and I.B. of the Directors, Officers and Corporate
Liability Insurance Coverage Part of this "Policy" shall not be void as to any individual(s) who did not know
as of the "Policy" inception date that such declarations and statements contained in the "Application(s)" were
untrue, inaccurate or incomplete.
904-0813 08 09
Page
1 of 1
.cil
Document 1-5
Filed 04/15/16
Hanover
Insurance
Group
Page
23 of 94
Company
Advantage Portfolio
Private


Item 1.
Item 2.
have the
same
meanings
as
NAMED INSURED
Inc
LIMITS OF LIABILITY
$5, 000, 000

Item 3.
in the
aggregate for
all "Claims"
RETENTION

Item 4.
$0 each "Claim"
Item 5.
A and B: 05/01/2005
1.
Insuring Agreements
2.
Insuring Agreements C: 05/01/2005
Policy
Form: 905-0001
905-0001
905-0319
905-0320
905-0432
905-0434
905-0002 08 09
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)

Page 1 of 2
Document 1-5
Filed 04/15/16
Page
24 of 94
905-0002 08 09
Page
2 of 2
Document 1-5
Filed 04/15/16
Page
25 of 94

COVERAGE PART
RESTRICTIONS.
Throughout
ADDITIONAL
I.
INSURING AGREEMENTS
A.
Liability
B.
Liability
behalf of the "Insured Entity", "Loss" which an "Insured Individual" is legally obligated to
We will pay,
of
"Claims"
made against that "Insured Individual" during the "Policy Period" and reported to
because
pay
on
C.

D.
II.
Securityholder Derivative Demand Liability


Refer to the Common
Policy

"Coverage Part":
A.
"Claim"
means:
Page
905-0001 08 09
1 of 6
1.
Any
written demand
Document 1-5
Filed 04/15/16
or
Page
26 of 94
"Wrongful Act";
Or
agreement.
2.
B.
"Damages"
does not include:
5.
6.
Payment by the "Insured Entity" of allegedly inadequate

7.
Civil, criminal
or severance
or
or
other
payments;
price
or
or
penalties.
C.

D.
"Defense
Expenses"
means

2.
The
premium
on
appeal,
Entity"
as
and is limited to:
1.
3.
purchase of its
attachment
or
including attorney
fees and
expert fees,
similar bonds; and
$250 per day per "Insured Individual" for reasonable expenses incurred for attendance at
Up
payment shall not exceed $5, 000 in the aggregate for all "Insured Individuals" for each "Claim".
4.
to

in paragraph 3. above; or
or
as
specified
5.
E.
or
our
employees.
means:
future
1.
Any past, present
2.

"Insured Entity".
or
"Executive"; and
serving
as a
director
or
officer of
an
"Outside
Entity"
at the direction of the
F.
"Insured" means the "Insured Entity" and any "Insured Individual". With respect to this
G.
connection with the
investigation
or
evaluation of any
"Securityholder Derivative
"Coverage
Demand".
Page
905-0001 08 09
Part"
2 of 6
H.
Document 1-5
Filed 04/15/16
Page
27 of 94
"Damages" and "Defense Expenses"
1.
amounts which
any form other than
Any
an
"Insured" is
obligated
to pay
as
result of
"Claim"
seeking
relief
or
redress in
monetary "Damages";
deemed uninsurable by law;
2.
Matters
3.
Wages or benefits or contributions payable under an "Employee Benefits Plan";

4.
I.
GENERAL
"Outside Entity" means any:
1. Nonprofit entity described in section 501(c)3 of the Internal Revenue Code of 1986, as amended, that
"Subsidiary"; and
2. Other entity, partnership, joint venture or other entity listed by endorsement to this policy.
"Personal
5.
1.
Injury"
3.
any actual
or
alleged:
privacy;
2.
means
or
publication of material
in violation of
individual's
right
of
or
wrongful entry or eviction or other invasion of the right

False arrest, wrongful detention or imprisonment; or
The
of
privacy;
or
prosecution, malicious use or abuse of process; or

0. "Wrongful Act" means any actual or alleged act, error, omission, misstatement, misleading statement,
4.
Malicious
Page
905-0001 08 09
3 of 6
Document 1-5
Filed 04/15/16
Page
28 of 94

apply to "Loss" on account of any "Claim" made against any "Insured":

A. Directly or indirectly based upon, arising out of, or attributable to an "Insured" gaining any profit,
B. Directly or indirectly based upon, arising out of, or attributable to any dishonest or fraudulent act or
"Insured";
C.
or
indirectly based upon, arising out of, or attributable to any payments to an "Insured" of any
Directly
or
However, Paragraphs A., B., and C. above shall not apply unless a
D.
E.
F.
judgment
or
other final
adjudication
Any "Personal Injury".

Any actual or alleged violation of the responsibilities, obligations or duties imposed by the Employee
Any "Claim" brought
or
However, this exclusion does not

A "Claim" made
1.
by, at the behest,

apply to:
maintained
or on
behalf of any "Insured".
and maintained totally independently of and

or intervention of any "Executive"; or
totally
without the
solicitation,
"Securityholder
Derivative Demand"
3.
A securityholder's "Claim" that is instigated and continued totally independent

4.
Any "Claim" by any of
or
"Securityholder
Derivative
Action";
2.
the "Insured Individuals" for contribution

or
or
indemnity,
of, and totally without

if such "Claim"
directly
G.
Any "Wrongful Act", transaction, decision, fact, circumstance, situation or event which has been
H.

I.
Any
of
J.
K.
or
arbitration
proceeding
other "Wrongful Act", whenever occurring, which together with a

"Claim" or notice and would constitute "Related Wrongful Acts".
as
"Wrongful
of the Prior and
the
Pending
Act" has been the
subject
position or capacity.
Any action brought or maintained by,
at the behest, or on behalf of an "Outside Entity" or past, present, or

L.
Based upon
or
arising
out of
or
attributable to present
or
future actual
or
potential employment related
"Wrongful Act".
Page 4 of 6
905-0001 08 09
M.
Document 1-5
Filed 04/15/16
Page
29 of 94
N.
agreement.
0.
P.

Directly or indirectly based upon, arising out of or attributable to the performance of any professional
A "Claim" against an "Insured" for a "Wrongful Act" by such "Insured" in connection with the
Directly
or
"Security Holder Derivative Demand" or "Securityholder Derivative Action".

Q. Any actual or alleged violation of any "Securities Laws", provided that this exclusion
2.
shall not
apply
to any
"Claim":
1.
thereunder;
or
2.
Made
or
R.
common
law.
V.

A.
Acquisition
Policy
and Formation of Subsidiaries
inception of the "Policy Period" the "Insured Entity" acquires or forms a "Subsidiary" or
than 50% of the assets, liabilities, or equity of, or obtains the right to elect or select a
If after the
assumes more
Page
905-0001 08 09
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2.
3.

A.
B.
C.
"Executives".
any insurance
be completely
shall have any
Dedicated for
Page
905-0001 08 09
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Page
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following:

A.

B.
The
following
is added to SECTION III
"Employed Lawyer"
means
any
"Employee"
was, now is or shall be, at the time of the

C.
D.
of the "Insured Entity" who is admitted to practice

alleged "Wrongful Act", employed as a lawyer full
law and who

time for, and
following is added to SECTION III ADDITIONAL DEFINITIONS, Paragraph 0. "Wrongful Act" of the
The
"Employed Lawyer":
2. Which is not rendered on behalf of the "Insured Entity" at the "Insured Entity's" written request; or
a.
"Wrongful Act" occurring at the time when the "Employed Lawyer" was not employed as a lawyer for
Lawyer", as of such date, knew or reasonably could have foreseen that such "Wrongful Act" could
c.
Activities by an "Employed Lawyer" as a director, officer, trustee or governor of any entity other then
GENERAL CONDITIONS of the Common Policy Terms and
905-0319 08 09
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Page
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following:
The
905-0320 08 09
Page
1 of 1
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Filed 04/15/16
Page
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following:

The
and
is added to: SECTION IV

ADDITIONAL EXCLUSIONS, Paragraph
following
F. of the
Directors, Officers

1.
Any "Claim" by any "Employee" of the "Insured Entity" pursuant

2.
Any "Claim" in any bankruptcy proceeding by or against the "Insured Entity" thereof, brought by the
Any "Claim" by any of the "Insured Individuals" of the "Insured Entity" who has not served in that capacity
3.
905-0432 08 09
to any federal
or
state whistleblower
Page
1 of 1
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following:

SECTION IV
Part of this "Policy":
Corporate Liability Insurance
Coverage
905-0434 08 09
Page
1 of 1
Document 1-5
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Page
35 of 94
I "he
.0H
anover
Insurance
Group.
Private
Company
Advantage Portfolio


Item 1.
Page, the items
in
quotations shall
have the
same
meanings
as
NAMED INSURED

Inc
Item 2.
LIMITS OF LIABILITY

$5, 000, 000
Item 3.
in the
aggregate for all "Claims"
RETENTION
Insuring Agreement
Item 4.
Insurance
A:
Employment Practices Liability Coverage
Insuring Agreement
A:
Employment
Practices Insurance
Coverage Part:
05/01/2005
Item 5.
906-0001
906-0303
906-0314
906-0404
(08-09)
(08-09)
(08-09)
(08-09)

Expense Sublimit
906-0002 08 09
Page 1 of 1
Document 1-5
Filed 04/15/16
36 of 94
Page

Throughout
ADDITIONAL
I.
INSURING AGREEMENT
Employment
Practices
Liability Insurance
insurance applies.
II.

Refer to SECTION ll
Conditions Section.
OPTIONAL EXTENDED REPORTING PERIOD of the Common
Policy
Terms and

"Coverage Part":
A.
"Claim"
1.
Any
means:
written demand
or
non-monetary relief
for
"Wrongful Act";
or
2.
B.
Page 1 of 5
906-0001 08 09
C.
D.
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Document 1-5
Page
37 of 94

"Defense Expense" means and is limited to:
2.
Any "Wrongful Act"
4.
5.
"Employee"
1.
An
or
as
"Employees".
means:
employed by and directed by the "Insured Entity", including any part-time, leased,
"Employees"; or
individual's employment status shall be determined as of the date of the "Wrongful Act".
A natural individual
temporary
2.
occurred for which such
seasonal
or
E.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, any similar federal,
F.
"Insured"
G.
the amount the "Insured" is legally obligated to pay for "Damages" and "Defense
"Loss"
means
the "Insured
Entity"
means
Expenses"
1.
Civil, criminal
2.
Any amounts which

any form other than
or
an
"Insured" is
or
obligated
other
penalties;
to pay
as
result of
"Claim"
seeking
relief
or
redress in
monetary "Damages";
Any future wages or benefits of any reinstated "Employee" or wages or benefits associated with the
4. Matters deemed uninsurable by law;
5. Benefits or contributions payable under an employee benefits plan;
6. Any expenses associated with any accommodation required under the Americans with Disabilities
7. Any amount not indemnified by the "Insured Entity" for which an "Insured" is absolved from payment
GENERAL
3.
H.
I.
"Wrongful
Act"
means:
respect to any "Claim" brought by

employment, any actual or alleged:
With
or on
"Employees",
or
applicants for
Page
906-0001 08 09
2 of 5
1.
2.
3.
4.
5.
6.
7.
8.
9.
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Page
38 of 94

Entity";
Employment discrimination or violation of any employment discrimination law;
Disparate treatment of or failure or refusal to hire a claimant because he
or
she is
or
claims to be

11. Employment-related defamation, libel or slander, including statements in an "Employee" reference;
12. Employment-related wrongful infliction of emotional distress, mental anguish or humiliation;
13. Employment-related misrepresentation;
14. Sexual or other workplace harassment of any kind, including any unwelcome sexual or non-sexual
15. Retaliation against an "Executive" or "Employee" arising out of employment by or services performed
16. Violation of any federal, state or local civil rights laws committed or attempted by an "Insured" in his or
Any series of "Wrongful Acts" that are connected by reason of a common claimant, transaction, policy, action,
10.

EXCLUSIONS, of the Common
A.
1.
2.
3.
4.
Policy
Terms and
or
"Wrongful Acts";
a.
c.
agreement.
The
that
Page
906-0001 08 09
3 of 5
5.
6.
7.
8.
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Page
39 of 94
Any other "Wrongful Act", whenever occurring, which together with a "Wrongful Act" has been the
order;
9.
Any violation
statutory or

law, including but not limited to, The Consolidated Omnibus Budget
of any of the
common
10.
11.
above laws;
12.
or

law, including but not limited to the Fair Labor Standards Act, as amended or
Any
statutory
or common
treatment against any "Insured" who is attempting to exercise his

B.
apply to "Loss"
on
or
her
rights
under the above

labor actually performed by any
For unpaid wages or overtime pay for hours actually worked or

1.
Page
906-0001 08 09
4 of 5
V.
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Filed 04/15/16
Page
40 of 94

Acquisition
or
Policy
than 50% of the assets, liabilities, or equity of, or obtains the right to elect or select a majority of
more
A.
B.
If, at the time of the formation

If, at the time of the formation or acquisition described above:
"Insured Entity" as of the beginning of the "Policy Period;" or
or
"Coverage Part" for the "Subsidiary" shall terminate 60 days after the acquisition or formation of the
"Subsidiary".
Page 5 of 5
906-0001 08 09
Document 1-5
Filed 04/15/16
Page
41 of 94

following:

"Claim" also
Paragraph
A. "Claim" of the
Employment
means:
illegal aliens. We will pay up to, but in no event greater than 50 000 for any such "Loss". Any "Loss" paid
by us under this endorsement shall be part of and not in addition to the Limits of Liability stated in Item 2. of
the Declarations.
906-0303 08 09
Page
1 of 1
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Filed 04/15/16
Page
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following:

ADDITIONAL DEFINITIONS, Paragraph I. "Wrongful Act" of the
Practices
Insurance
Liability
Employment
The
leased worker,
temporary worker,
or
independent contractor, business invitee
or
other client of the "Insured
Entity".
906-0314 08 09
Page
1 of 1
Document 1-5
Filed 04/15/16
Page
43 of 94

SUBLIMIT
following:
ADDITIONAL
SECTION IV
Insurance Coverage Part of this
EXCLUSIONS, Paragraph A.12. of the Employment Practices Liability

is deleted and replaced with the following:
"Policy"

law, including but not limited to the Fair Labor Standards Act, or amendments to or
Any
statutory
or common
regulation
or
order.
50 000, for any such "Claim, without

We will pay "Defense Expenses" up to, but in no event greater than
sums
us
to
such
that
"Insured"
shall
become
obligated to pay as "Damages".
legally
liability
by
pay
any
any
906-0404 08 09
Page
1 of 1
Filed 04/15/16
Document 1-5
Page
44 of 94
_11,,
--k\
H nover
Insurance
Group-
Company
Advantage Portfolio
Private


Item 1.
Page, the items
in
quotations shall have
the
same
meanings
as
NAMED INSURED
Inc
Item 2.
LIMITS OF LIABILITY (Inclu sive of

Damages
and Defense
Expenses)
$1, 000, 000 in the aggregate for all "Claims"

Item 3.
RETENTIONS
Insuring Agreement
Insuring Agreement
Item 4.
Item 5.
B:
Fiduciary Liability Coverage:

Compliance Resolution Penalties Coverage:
$0 each "Claim"
$0 each "Claim"

1.
Insuring Agreements
A:
05/01/2005
2.
Insuring Agreements
B:
05/01/2005
Policy
Form:907-0001
907-0001
907-0002 08 09
A:
(08-09)
Fiduciary Liability
Insurance
Coverage
Part
Page
1 of 2
Document 1-5
Filed 04/15/16
Page
45 of 94
907-0002 08 09
Page
2 of 2
Document 1-5
Filed 04/15/16
Page
46 of 94

Throughout this "Coverage Part" of this insurance "Policy" the words "you" and "your" refer to the "Insured" as
ADDITIONAL
I.
INSURING AGREEMENT
SECTION I
A.

B.
Compliance Resolution Penalties Coverage

We will pay "Compliance Resolution Penalties" up to, but in no event greater than $25, 000, for any such
Declarations.
II.
SECTION II
Refer to the Common

III. SECTION III
Policy

"Coverage Part":
A.
"Administration"
1.
means:
Providing interpretations and giving counsel
to
employees,
beneficiaries
or
participants regarding any

2.
3.
Handling records in connection with any "Insured Benefit Plan"; or

Effecting enrollment, termination or cancellation of employees or participants under any
"Insured
Benefit Plan".
B.
"Claim"
1.
2.
means:
Any written demand presented for monetary "Damages" or non-monetary relief for a "Wrongful Act"
Page 1 of 5
907-0001 08 09
3.
Document 1-5

investigation by
Filed 04/15/16
Page
47 of 94
federal, state
Department of Labor
or
or local government agency,

the U.S. Pension Benefit Guaranty
Corporation.
labor
or
to
collective
bargaining
agreement.
C.
D.
E.
"Defense
Expenses"
means
and is limited to:
including attorney fees
2.
The
3.
Up to $250 per day per "Insured Individual" for supplemental payment for reasonable expenses
premium
"Defense
on
Expenses"
appeal,
attachment
or
and
expert fees,
1.

similar bonds; and
do not include:
4.

5.
or
or
our
as
employees.
F.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, any similar federal,
state, local or common law, and any rules and regulations promulgated under it.
G.

1.
2.
3.
means:
Any Employee Welfare Benefit Plan, as defined by "ERISA", which was, is now or becomes
a.
Provided written notice to
us
of such
newly-created Employee
Pension Benefit Plan; and
Page
907-0001 08 09
2 of 5
Document 1-5
Filed 04/15/16
Page
48 of 94
paid any additional premium we require.

4. Any other Employee Benefit Plan or program not subject to "ERISA" by endorsement which is
b.
Agreed
Benefit Plan".
H.
1.
2.
3.
J.
Plans
or
means:

Any past, present or future employees of the "Insured Entity"
or
"Insured Benefit Plan", but
The estates, heirs, legal representatives or assigns of deceased individuals who

only while
were
"Insured
The legal representatives


4.
I.
Employee Stock Ownership

1.
Civil, criminal or administrative fines, taxes or other penalties, except the five percent (5%) or less, or
twenty percent (20%) or less, fines or penalties imposed under Section 502 (i) and (I) of "ERISA"
the
respectively;
Any amounts
which
any form other than
3.
monetary "Damages";
4.
Benefits
2.
5.
or
contributions
payable under
Any expenses associated
an
to pay as result of a "Claim"
"Insured Benefit
with any accommodation
seeking relief
or
redress in
Plan";
required under
GENERAL
"Wrongful Act" means any actual or alleged:
6.
K.
L.
Plan".
Page
907-0001 08 09
3 of 5
Document 1-5
Filed 04/15/16
Any series of "Wrongful Acts" that are connected by reason of

action, omission or decision are a single "Wrongful Act".
IV. SECTION IV
a common
Page

A.
Such "Insured"
entitled;
2.
3.
gaining any profit,
remuneration
or
advantage
5.
6.
7.
or
to which such "Insured" was not
or
fraudulent act or omission, any criminal act

regulation by such "Insured"; or
or
or
out
legally
omission
or
any willful violation of any
to an "Insured" of any remuneration without the previous approval of the security

been illegal.
Any payments
However, Paragraphs 1., 2., and 3. above shall not apply unless
4.
Terms and
or
Any dishonest
statute
Policy
apply to:
"Loss" on account of any "Claim" made

of, or attributable to:
1.
49 of 94
judgment
or
other final
adjudication
physical injury to or destruction of any tangible property, including all resulting loss of use of that
The wrongful entry, eviction, false arrest, false imprisonment or detention, malicious prosecution,
or disparaging material.
Any actual or alleged discrimination, retaliation or wrongful termination of employment; provided,
The
8.
9.
apply to:
a.
"Loss" on account of any "Claim" made against any "Insured":
10.
B.
Plan";
Page
907-0001 08 09
4 of 5
2.
For the costs of
Document 1-5
compliance with any
order
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for, grant of,
or
agreement
Page
to
50 of 94
or
3.
a.
b.
The benefits
Recovery
However,
are
payable by
an
for the benefits is based
on a
covered
as an
individual
"Wrongful
will provide a defense of any such "Claim", without any

we
obligation;
and
Act".
liability by
us
to pay such
sums
that

to any other "Insured Individuals" for the purpose of determining the applicability of the exclusions
listed above.
No fact
pertaining
imputed
V.
SECTION V

A.
Policy

or assumes more than fifty percent (50%) of the assets, liabilities, or equity of, or obtains the right to elect
2. If at the time of the acquisition or formation described above, the total assets of the acquired or
3.
Page
907-0001 08 09
5 of 5
Document 1-5
Filed 04/15/16
Hanover
Insurance
Group
Page
51 of 94
Private
Company
Advantage Portfolio
CRIME INSURANCE
PLEASE READ THIS "COVERAGE PART" CAREFULLY TO DETERMINE RIGHTS,
RESTRICTIONS.
DUTIES, COVERAGE AND COVERAGE

Inc
Item 2. INSURING AGREEMENTS, LIMITS OF
LIABILITY, AND RETENTIONS AMOUNTS
INSURING AGREEMENTS
Employee Theft
Fidelity
Premises)
A.
B. ERISA

H. Computer Crime
1.
2.
Computer Fraud
Computer Program and Electronic
Restoration Expense
Data

$2, 000, 000

$2, 000, 000
$2, 000, 000
RETENTION AMOUNT
Per Occurrence
$0 each "Claim"
$2, 000, 000
$2, 000, 000

$2, 000, 000

$2, 000, 000

$10, 000

$2, 000, 000

$2, 000, 000
$2, 000, 000

LIMIT OF LIABILITY
Per Occurrence
$2, 000, 000

$2, 000, 000
$10, 000
M.
$0 each "Claim"
$25, 000
If "Not Covered" is inserted above opposite any specified Insuring Agreement or if no amount is included in the Limit
1. Personal Accounts
Fraud
or Alteration
Reim bursement
Forgery
Expense
Identity
2.
Policy
Form: 908-0001
908-0001
908-0035
908-0002 08 09
(08-09)
(08-09)

Arizona Crime Insurance Coverage Part
Amendatory Endorsement
Page 1
of 2
of
Document 1-5
Filed 04/15/16
Page
52 of 94

By acceptance of this "Coverage Part" you are deemed to have given us notice canceling prior
LHF 8827059 03; the cancellation to be effective at the time this "Coverage Part" becomes effective.
policy Nos.
SECTION,
908-0002 08 09
Page
2 of 2
Document 1-5
Filed 04/15/16
Page
53 of 94

DISCOVERY FORM
to
Throughout
ADDITIONAL
All words that appear in quotation marks have special meaning. They are defined in SECTION III
I.
INSURING AGREEMENTS
Crime Insurance
of time provided in SECTION ll
Coverage
A.
Employee
Theft

B.
ERISA
or
or
damage
to
"Property" directly caused by "Theft"
not, acting alone
Insuring Agreement,
or
"Theft" shall also include
or
dishonest acts
or in
acting alone
Forgery
1.
or
by
"Theft"
Alteration
by or drawn upon you; or

b. Made or drawn by one acting as your agent,
or that are purported to have been so made or drawn.
For the purposes of this Insuring Agreement, a substitute check as defined in the Check Clearing for
2. If you are sued for refusing to pay any instrument covered in Paragraph D.1. on the basis that it has
Theft of Money and Securities (Inside the Premises)
1. We will pay you for loss of "Funds" inside the "Premises" or "Banking Premises":
a.
E.
an
Fidelity
We will pay you for loss of or damage to "Property" sustained by your "Client" directly caused
D.
by
"Forgery".
C.
committed
Made
or
drawn
Page
908-0001 08 09
1 of 17
2.
3.
F.
2.
3.
G.
Directly caused by "Theft" committed by

Premises"; or
b.
Directly caused by disappearance
or
Filed 04/15/16
person
present
Page
54 of 94
inside such "Premises"
"Banking
or
destruction.
directly caused by an actual or

pay you for loss of or damage to a locked safe, vault, cash register, cash box or cash drawer
inside the "Premises" directly caused by an actual or attempted "Theft" of or unlawful entry
We will pay you for loss from damage to the "Premises" or its exterior
attempted "Theft" of "Funds", if you are the owner of the "Premises" or
are
We will
located
Property (Inside the Premises)

damage to "Other Property".
a.
Inside the "Premises" directly caused by an actual or attempted "Robbery" of a "Custodian"; or
We will pay you for loss from damage to the "Premises" or its exterior directly caused by an actual or
We will pay you for loss of or damage to a locked safe or vault located inside the "Premises" directly
or
Safe
Burglary
of Other
or

1.
H.
a.
Robbery
1.
Document 1-5
custody of a
an
armored
2.
3.
by
an
actual
or
attempted
Computer Crime
1.
Computer Fraud
fraudulently
a.
person
(other than
"Messenger")
or
place outside those "Premises".

Computer Program and Electronic Data Restoration Expense
a.
Only to "Computer Programs" and "Electronic Data" which you own or for which you are legally
b.
2.
To
To
liable; and
b.
Only if you are unable

copies.
to
or
back-up
data
Page
908-0001 08 09
2 of 17
If
Document 1-5
Filed 04/15/16
55 of 94
Page
loss is covered under Insuring Agreements H.1. and H.2., then only the Retention for a loss under
H.1. shall be applicable and the payment of "Restoration Expense" under
H.2. shall be part of, and not in addition to, the Limit of Liability for Insuring
Insuring Agreement
Insuring Agreement
Agreement H.1..
J.
Credit, Debit
or
Charge
financial
"Property" directly
by "Credit,
caused
Debit
or
Charge
Card
Money Orders and Counterfeit Money

We will pay you for loss directly caused
L.
Card Fraud

K.
directing
1.
Money orders issued by any post office, express company

presentation; or
2.
"Counterfeit
Money"
that is
in
by your having accepted
acquired during
the
regular course
good faith,
bank that
or
are
in
exchange for
paid upon
not
of business.

1.
Personal Accounts
Forgery
or
Alteration
a.
Drawn upon
personal
accounts of your "Executive"
or
that
are
purported
to have been
so
drawn;
or
b.
Made or drawn by
made or drawn.
one
acting
as an
or
that
are
purported
to have been
so
2.
Identity
Fraud
for
"Identity Fraud Expense" incurred by
an
Expense Reimbursement

M.
Clearing
1.
We will pay you for "Investigative Expenses" to determine the amount of loss covered under any
2.
We will pay you for
3.
"Investigative Expenses" after settlement of covered loss.

We will have no liability to pay any such "Investigative Expenses" if the amount of the covered loss
the Declarations.
4.
as set forth in Item 2. of the Declarations.
Liability
for the
applicable Insuring
Agreement
II.

days from
prior to the
A.
No later than 90
the date of that cancellation.
B.
C.
regard
to any
"Employee
Benefit Plans."
Page
908-0001 08 09
3 of 17

"Coverage Part":
A.
B.
following
"Client"
Page
"Banking Premises" means the interior of that

meanings
portion of
any
56 of 94
Policy Terms
and
indicated below, when used in this
building occupied by
banking
institution or
as "Client" by endorsement to this "Coverage Part" for

under written contract while that contract is in effect.
entity specifically scheduled
means an
which you
Filed 04/15/16
Document 1-5
services for
perform
fee
or
C.
"Client's Premises"
its business.
D.
means
portion of any building your "Client" occupies in conducting
devices to receive, process, store, retrieve, send, create
or
otherwise act upon "Electronic Data."
E.
computer and all input, output, processing, storage and communication

"Computer System"
F.
"Computer Violation"
G.
H.
I.
J.
K.
L.
means a
means:
"Computer Virus" designed
1.
2.
Vandalism
to
natural person,
by
"Computer System."
a
damage or destroy a "Computer Program" or "Electronic Data"; or

including an "Employee" who has gained unauthorized access to your
"Computer Virus" means a set of unauthorized instructions, programmatic or otherwise:

"Counterfeit Money" means an imitation of "Money" that is intended to deceive and to be taken as
genuine.
"Credit, Debit or Charge Card Fraud" means the "Forgery" or alteration of, on or in, any written instrument
"Custodian" means you, or any of your partners or "Members", or any "Employee" while having care and
janitor.
"Digital Signature" means an electronic identifier created by computer, within, attached to, or logically
"Discover, "Discovered"
form usable in
"Computer System":
1.
provide instructions directions to "Computer System"; or
2. Which is stored on electronic processing media for use by a "Computer Program".
N. "Electronic Signature" means a "Digital Signature", an electronic sound, symbol or process, within,
sign the record.
0. "Employee" means:
means
Which does not
facts
or
or
Page
908-0001 08 09
4 of 17
2.
Filed 04/15/16
Document 1-5
Page
57 of 94
a.
b.
Who you
c.
Who you have the
right
or
commissions; and
performing services for you;
Any natural person who is furnished temporarily to you:

a.
To substitute for a permanent "Employee" as defined in Paragraph 0.1. who is
b.
To meet seasonal
or
on
leave;
or
3.
4.
5.
6.
7.
8.
Any natural person who is leased to you under a written agreement between you and a labor leasing
firm, to perform duties related to the conduct of your business, but does not mean a temporary
a.
A trustee, officer, employee, administrator or manager, except an administrator or manager who
b. A director or trustee of yours while that person is engaged in handling "Funds" or "Other
Any natural person:
a.
Who is a former "Employee", partner, "Member", "Manager, "Executive" retained as a consultant
b. Who is a non-compensated officer; or
c.
While acting as a non-compensated fund solicitor during fund raising campaigns; or
Any "Employee" of an entity merged or consolidated with you prior to the effective date of this
"Policy"; or
Any of your "Managers", directors or trustees while:
a.
Performing acts within the scope of the usual duties of an "Employee"; or
on
your behalf.
or representative of the same general character not specified in Paragraph 0.
to the Employee Retirement Income Security Act of 1974 (ERISA) and any amendments thereto.
contractor
P.
R.
"Forgery"
not
authority,
S.
signing of the name of another

means
mean a
in
the

means:
1.

2.
your
knowledge
or
consent;
or
Page
908-0001 08 09
5 of 17
3.
Document 1-5
Filed 04/15/16
Page
58 of 94

"Money" and "Securities".
T.
"Funds"
U.
"Identity Fraud"
V.
"Identity
means
means the act of knowingly transferring or using, without lawful authority, a means of
1.
2.
Expense" means:
notarizing fraud affidavits
Fraud
Costs of
merchants
or
other credit
or similar documents for credit agencies, financial institutions,

have required that such affidavits be notarized;
that
grantors

agencies,
credit
agencies, financial institutions, merchants
or
3.
distance

grantors to report or discuss any actual "Identity Fraud";
a
maximum payment of $1, 000.00 per week for a maximum period of 5 weeks, as a
Lost wage, up to
Costs for
long
4.
a.
other credit

legal counsel,
credit
agencies,
financial
complete fraud affidavits or similar documents; or

c.
Loan application fees for reapplying for a loan or loans when the original application is rejected solely
b.
5.
or
To

6.
7.
Reasonable
b.
c.
Challenging
the accuracy
AA.
BB.
or
or
civil
Expense" does
by
financial
institutions, merchants, other
judgments wrongly entered against
completeness of any information in

solely
as a
not include any expense
a consumer

or
your "Executive";
loss not listed in
credit
or
report; and
"Identity Fraud" "Discovered"

Paragraphs
1.
through
7. of
means:
1.
With
2.
With respect to all other

Declarations.
respect to Insuring Agreement I.B., any "Employee Benefit Plans" only; or

Insuring Agreements, the "Named Insured" defined in Item 1. of the
Z.

W. "Insured"
Y.
our
a.
"Identity Fraud
this definition.
X.
attorney fees incurred, with
covered loss.
"Investigative Expenses" shall not include expenses incurred by any "Client".

"Manager" means a person serving in a directorial capacity for a limited liability company.
"Messenger" means you, or a relative of yours, or any of your partners or "Members", or any "Employee"
"Money" means:
Page 6 of
908-0001 08 09
17
CC.
"Occurrence"
1.
Under
Filed 04/15/16
Document 1-5
Insuring Agreements I.A., I.B.,
"Coverage Section":
and I.C. of this
An individual act;
b.
separate acts whether or not related;

A series of acts whether or not related,
or

2.
Under
59 of 94
means:
a.
c.
Page
Insuring Agreement
I.D. of this
a.
An individual act;
b.
c.
committed
by
person
"Coverage
separate
or
not
acting
during the "Policy
Section":
acts whether
or
not
related;
or
related,
alone
or
in collusion with other persons,
involving
one or more
instruments, during the "Policy Period" shown in the Declarations, before such "Policy Period"
or
both.
3.
Under all other
event;
a.
An individual act
b.
The combined total of all separate acts
c.
A series of acts
or
or
events whether
or
or
not
events whether
or
not related;
or
related,
or
not,
FF.
"Restoration Expense" does not include:
1. Your internal corporate costs and expenses, including "Employee" remuneration and any costs
related to any legal action;
2. Expenses incurred as a result of the reconstruction of "Computer Programs" or "Electronic Data"
DD.
"Other
"Other
"Other
"Premises";
3.
4.
Expenses incurred as a result of the reconstruction of "Computer Programs" and "Electronic Data" if
Expenses incurred to render the "Computer Programs" and "Electronic Data" usable by replacement
Expenses incurred to design, update or improve "Computer Programs" or "Electronic Data" or to

5.
HH.
has:
Page
908-0001 08 09
7 of 17
Document 1-5
Filed 04/15/16
Page
bodily harm; or
1. "Property" from within a locked safe or vault by a person unlawfully entering
1.
II.
2.
JJ.
Caused
A safe
or
or
threatened to
cause
that person
Tokens, tickets,
a
2.
meter)
the safe
vault
as
or
or

1.
60 of 94
nonnegotiable
revenue and other

in current use; and
instruments
or
contracts
or
charge cards,
or
which cards
unused value in
are
not issued
by
you,
KK.
"Theft"
1.
With
of
2.
3.
LL.
respect to Insuring Agreement I.C., the intentional unlawful taking of "Property"

"Client"; or
to the
deprivation
respect to Insuring Agreements I.E. and I.G., the intentional unlawful taking of "Funds"
deprivation; or
With respect to all other Insuring Agreements, the intentional unlawful taking of "Property"
deprivation.
Wth
"Third
Party"
means a
MM. "Transfer Account"

1.
"Money".
means:
person other than
an
"Insured"
account maintained
or delivery of "funds":
means an
payment
or
to your
to your
"Employee".
by you
at
financial institution from which you

or
can
telephone instructions
"Watchperson" means any person you retain specifically to have care and custody of "Property" inside the
2.
NN.
"Premises" and who has
no
other duties.

Policy
Terms and

A.
Acts Committed By You, Your Partners or Your "Members"
For the
1.
Loss
a.
resulting from "Theft"
You;
or
any other dishonest act committed
not
cover:
by:
or
Any of your partners or "Members",

acting alone or in collusion with other persons.
Acts of "Employees" Learned Of By You Prior To the "Policy Period"
Acts of "Employees", "Managers", or "Executives"
a.
b.
whether
2.
3.
Page
908-0001 08 09
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b.
While
or
Filed 04/15/16
Page
61 of 94
except when covered under Insuring Agreements
Loss
5.
services for you or otherwise,

performing
I.A., I.B.,
4.
Document 1-5
resulting
from:
a.
The unauthorized disclosure of your confidential information including, but not limited to, patents,
b.
Governmental Action
Loss
resulting from expropriation, nationalization, seizure
or
destruction of
"Property" by
order of
6.
Indirect loss
a.
an
by
this
"Coverage Part" including, but
Your inability to realize income that you would have realized had there been
to "Property".
no
loss of
or
not
damage
Payment of damages of any type for which you are legally liable. But, we will pay compensatory
c.
"Coverage Part".
this "Coverage Part"
e.
8. Trading
a.
other agents; or
c.
Insurrection, rebellion, revolution, usurped power, or action taken by governmental authority in
For the purpose of Insuring Agreements I.A., I.B., or I.C. of this "Coverage Part" this "Policy" shall not
b.
B.
cover:
1.
Inventory Shortages
Loss, or that part of any loss, the proof of which
a.
An
b.
as
to its existence
or
amount is
dependent
upon:
inventory computation; or
Page 9 of
908-0001 08 09
17
2.
Filed 04/15/16
Document 1-5
62 of 94
Receipts
Warehouse

C.
Page
For the purpose of
or
issuing, canceling
I.G. of this
or
failing
this
"Coverage Part"
cancel,
to
"Policy"
shall not
cover:
1.
2.
Accounting or Arithmetical Errors or Omissions

Loss resulting from accounting or arithmetical errors
Exchanges
Loss
3.
or
resulting
or
omissions.
Purchases
from the
giving
or
surrendering of "Property"
in any
exchange
or
purchase.
Fire

Loss of or damage to "Funds"; and
Motor vehicles or Equipment and Accessories
Loss
or
a.
4.
5.
to them.
6.
Transfer
a.
or
Surrender of "Property"

1)
2)
3)
4)
5)
or
surrendered to
person
or
place

As
result of
threat to do
As
result of
threat to do
result of
threat to introduce
As
bodily harm to any person;

damage to any "Property";
a
"Computer System";
result of a threat to introduce a virus or other malicious instruction into your

System" which is designed to damage, destroy or corrupt data or "Computer
As
6) As
result of
result of
threat to contaminate,
pollute
or
"Computer
Programs"
products
or
goods;
or
7)
As
a)
Your confidential information;
b) Weaknesses in the
b.
divulge
or
utilize:
or
"Computer System".
Part" to loss of "Property" while outside the "Premises" in the care and custody of a "Messenger"
source
code within your
if you:
1)
2)
7.
Had
knowledge of any threat at the time the conveyance began; or

knowledge of a threat at the time the conveyance began, but the
no
Had
the threat.
Voluntary Parting of Title to
or
Possession of
Loss resulting from your, or anyone acting

dishonest act to voluntarily part with title to
D.
was
not related to
Vandalism
Loss from damage to the "Premises" or its exterior, or to any safe,
8.
loss
For the purpose of
Insuring Agreement
vault, cash register, cash box,
"Property"
on
or
I.H. of this
your express or implied authority, being induced by any

possession of any "Property".
"Coverage Part" this "Policy" shall
not cover:
Page
908-0001 08 09
10 of 17
1.
the
resulting from
Loss
use
or

V.
63 of 94
or
on
access,
convenience,
such cards.
directing
financial institution to transfer, pay
or
deliver
Inventory Shortages
Loss,
E.
charge,
purported
or
other cards

3.
Page
2.
Filed 04/15/16
Document 1-5
or
that
part of any loss, the proof of which
For the
purpose of Insuring Agreements
resulting
from the
a.
An
b.
as
to its existence
or
amount is
dependent upon:
or
use
of
1.1. of this
computer to fraudulently
"Coverage Part"; this "Policy" shall

transfer of "Property".
not
cover
loss
cause a

A.
Limit of
1.
Liability
The most
Liability
2.
B.

we
as
an
"Occurrence" is the
applicable
Limit of
Retention

or a
or
damage
to
"Property"
that exceeds 25%
A.
under Insuring Agreements I.A., 1.B., I.C. or I.D. of this "Coverage Part") involves a violation of law, you
B.
C.
Produce for
D.
Give
E.
us a
our
examination all
detailed,
Cooperate
with
us
sworn
in the
our
pertinent
request and give
us a
signed
statement of your
answers.
records.
proof of loss within 120 days.
investigation
and settlement of any claim.

A.
Conditions
1.
Applicable
to all
Additional Premises
or
Insuring Agreements
Employees
of this
Policy
"Coverage Part":
Declarations.
2.
If you consolidate
or
or
Acquisition
merge with,
or
purchase
or
acquire
the assets
or
liabilities
of, another entity:

Page
908-0001 08 09
11 of 17
a.
b.
c.
Page
64 of 94
2)
or
The merger,
Period."
purchase
or
acquisition

or
occurs
form
less than 90
days prior
to the end of the
"Policy
"Subsidiary":
give
a.
You must
b.
For the first 90 days after the effective date of such acquisition or formation, the coverage
c.
4.
Filed 04/15/16
You must
statement
3.
Document 1-5
us

a.

to us advance written notice of cancellation.
or
delivering
b.
c.
d.

by mailing
or
delivering
1) 20 days before the effective date of cancellation if we cancel for non-payment of premium; or
2) 60 days before the effective date of cancellation if we cancel for any other reason.
We are not required to renew this "Coverage Part". However, written notice of our intent to nonrenew this "Coverage Part" shall be sent to the "Named Insured" at least 60 days prior to
of notice.
5.
or
Fraud
Page
908-0001 08 09
12 of 17
6.
Document 1-5
Filed 04/15/16
Page
"Coverage Part";
"Property" covered under this "Coverage Part";
c.
Your interest in the "Property" covered under this "Coverage Part"; or
Cooperation
You must cooperate with us in all matters pertaining to this "Coverage Part"
a.
This
b.
The
as
65 of 94
conditions.
7.

a.
c.
If two or more "Employee Benefit Plans" are insured under this "Coverage Part", any payment we
make for loss:
1)
Sustained
by
two
or more
"Employee
Benefit Plans";
or
commingled "Property"
"Employee Benefit Plans",
an
will
be
from
"Occurrence"
made to each "Employee Benefit Plan" sustaining
resulting directly
2)
8.
of two
Of
or more
Liberalization
9.
Other Insurance
"Coverage Part",
our
a.
Primary Insurance
When this "Coverage Part" is written as primary insurance, and:
1) You have other insurance subject to the same terms and conditions as this "Coverage Part",
same
2)
loss.
a)
Paragraph a.1)
can

whichever is greater. Our
"Coverage Part".
b.
payment for loss is subject
to the terms and conditions of this
Excess Insurance
Page
908-0001 08 09
13 of 17
Document 1-5
Filed 04/15/16
Page
66 of 94
excess over other insurance, we will only pay for the

1) When this "Coverage Part" is written
2)
10.

a.
"Property" covered under this "Coverage

"Property":
The
Part"
except
as
provided

b) While in transit and in the care and custody of a "Messenger;
3)
b.
For which you
are
"Property"
or
located inside your "Client's Premises."
If Item 2. of the Declarations indicates that coverage under Insuring Agreement I.C. has been
1) That your "Client"
11.
legally
liable, except for
in 10.b. below is limited to
owns or
leases;
2) That your "Client" holds for others; or

3) For which your "Client" is legally liable
4) While the "Property" is inside your "Client's Premises".
c.
However, this "Coverage Part" is for your benefit only. It provides no rights or benefits to any
Policy Bridge Discovery Replacing Loss Sustained
a.
became effective:
b.
1)
We will not pay for any loss that occurred during the "Policy Period" of that prior policy which
2)
SECTION VII
this Condition.
ADDITIONAL
CONDITIONS, Paragraph A.9. Other Insurance does not apply to
12. Records
amount of any loss.
"Property"
covered under this
"Coverage
Part"
so we can
verify
the
13. Recoveries
a.
to
1) First,
you in satisfaction of your covered loss in excess of the amount paid under this
"Coverage Part";
whether made
2)
Second, to
3) Third,
4)
us
in satisfaction of amounts
paid
in settlement of your claim;
to you in satisfaction of any Retention Amount; and
Fourth, to you in satisfaction of any loss not covered under this "Coverage Part".
Page
908-0001 08 09
14 of 17
b.
14.
Document 1-5
Filed 04/15/16
Page
67 of 94
Territory
Canada.

a.

follows:
1)
"Coverage Part"
shall be determined
as
At face value in the
by that country; or
In the United States of America dollar equivalent determined by the rate of exchange
published in The Wall Street Journal on the day the loss was "Discovered".
2) Loss of "Securities" but only up to and including their value at the close of business on the
a)
b)
"Money"
issued
the:
(1)
Market value of the "Securities" at the close of business
"Discovered";
on
the
day
the loss
was
or
Liability applicable to the "Securities".

3) Loss of
damage to "Other Property" or loss from damage to the "Premises" or its exterior
The
c)
Wth regard to Paragraph A.15.a.3)a) through Paragraph A.15.a.3)c), we will not pay on a
loss or damage.
(2)
The Limit of
or
cash value basis.
Property" or "Premises" or its exterior:

c.
Non-Accumulation of Liability
b.
16.
We will, at your
option, settle loss
or
damage
to "Other
Page
908-0001 08 09
15 of 17
Document 1-5
Filed 04/15/16
68 of 94
Page
any one "Insured".
a.
b.
B.
amounts due or paid, the amount we shall pay for any loss shall not be cumulative from year to
Insuring Agreements I.A., I.B and LC of this "Coverage Part":

Termination as to any "Employee"
Conditions
1.
a.
Applicable
As
to
soon as:
1) You;
or
2) Any of your partners, "Members", "Managers",
or
"Employee",
an
amount in
days after

excess of $1, 000.00 whether before or after becoming
b.

We will mail
or
deliver
our

employed by you.
mailing address
known to
us.
If notice is

2.
Territory
C.
Conditions
1.
Applicable
to
Insuring Agreements
I.D. and I.L.1. of this
"Coverage
territory specified
in
Part":
Retention Amount
apply
to
legal expenses paid under Insuring Agreement
I.D. of this
"Coverage Part".
2.
Signatures
mechanical or electronic reproduction of a handwritten signature produced by a

signature
that is
3.
Proof of loss
4.
possible,
Territory
D.
Insuring Agreements I.F. and I.G. of this "Coverage Part":

Armored Motor Vehicle Companies
Under Insuring Agreement I.G. of this "Coverage Part"; we will only pay for the
Conditions
1.
Applicable
cannot
2.
to
amount of loss you
recover:
a.
b.
From any insurance

vehicle company.
or
indemnity
Special
We will
only pay
up to
carried
by,
or
for the benefit of customers of, the armored motor
$5, 000 for any
one
or
damage
to:
Page
908-0001 08 09
16 of 17
a.
Document 1-5
Filed 04/15/16
Page
69 of 94

articles made of or containing such materials that constitute the principal value of such
completed
articles;
b.
E.
or
Manuscripts, drawings, or records of any kind,

or
the cost of
reconstructing
them
or
reproducing
Applicable to Insuring Agreement I.H. of this "Coverage Part":

Special Limit of Insurance for Specified "Property"
We will only pay up to $5, 000 for any one "Occurrence" of loss of or damage to manuscripts,
drawings, or records of any kind, or the cost of reconstructing them or reproducing any information
Conditions
1.
contained in them.
2.
Territory
Agreement LH. of this "Coverage Part".
VIII.
Identity Fraud
Reimbursement
Single
loss Limit of
Liability
"Identity Fraud." If an act causes a covered loss under Insuring Agreement LL.2., to more than one
Page
908-0001 08 09
17 of 17
Document 1-5
Filed 04/15/16
Page
70 of 94

following:
A.

SECTION VII
b.
We may cancel this

or
delivering
1) 20 days before the effective date of cancellation if we cancel for non-payment of premium
at any
time;
or
2) 60 days before the effective date of cancellation if we cancel for any other reason and this "Coverage
3) 60 days before the effective date of cancellation if we cancel after the "Coverage Part" has been in
against; or
b) A substantial change in the risk assumed, except to the extent that we should reasonably have
A
substantial breach of contractual duties or conditions; or
c)
reinsurer
e)
f)
d.
C.
or
reinsurers;
or


or
his
representative
notice.

e.
which

solvency; or
materially increase the
our
Paragraph
A.4. Cancellation and
908-0035 08 09
Page 1 of 1
Document 1-5
Filed 04/15/16
F6nover
Group
Insurance
Page
71 of 94
Company
Advantage Portfolio
Private

PLEASE READ THIS "COVERAGE
PART"

CAREFULLY
TO
DETERMINE
RIGHTS,
DUTIES,
have the
COVERAGE
same
AND
meanings
as

Inc
Item 2. INSURING AGREEMENTS, LIMITS OF LIABILITY, AND RETENTIONS
INSURING AGREEMENTS

Coverage
A.
LIMIT OF LIABILITY
Per Occurrence
RETENTION AMOUNT
Per Occurrence
$1, 000, 000
$0
$1, 000, 000

$1, 000, 000
$1, 000, 000
$0
$0
$0
N/A
N/A
If "Not Covered" is inserted above opposite any specified Insuring Agreement or if no amount is included in the
Limit of Liability, such Insuring Agreement and any other reference thereto is in this "Coverage Part" is deemed to
be deleted.

Suite 1205
Toronto, ON M5J-2N8

909-0001
909-0029
909-0002 08 09
(08-09)
(08-09)

Arizona Kidnap/Ransom and Extortion Insurance Coverage Part
Endorsement
Amendatory
Page 1
of 2
Document 1-5
Filed 04/15/16
Page
72 of 94

Nos. LHF 8827059 03; the cancellation to be effective at the time this "Coverage Part" becomes effective.
909-0002 08 09
Page 2
of 2
Document 1-5
Filed 04/15/16
Page
73 of 94

to
Throughout
ADDITIONAL
"Coverage Part".
I.
divulge
the existence of this
INSURING AGREEMENTS
Coverage
A.
Kidnap/Ransom and Extortion Threat Coverage

1.
"Kidnap"
2.
or
alleged "Kidnap"
an
We will pay you for loss of "Property" surrendered

To do
b.
To do
c.
To introduce
damage, destroy
e.
a ransom
as an
extortion
an
To contaminate,

corrupt data or computer programs stored within your computer system;
virus
or
or
goods; or
utilize proprietary information including formulas, patents, data,
To disseminate, divulge
pollute
or
products
or
or
Expenses Coverage
by
to the Limit of
C.
the
bodily harm to an "Insured Individual";

damage to "Premises" or "Property";
a.
d.
B.
surrendered as
"Property"
of
Hijack Coverage
pay you for "Expenses"
are
payable by
us
or
in addition
to this INSURING AGREEMENT.
Detention and
We will
incurred
by you directly caused by
the "Detention"
or
"Hijack"
of
an
However, the fees and costs of the Security Firm shown in the Declarations are
D.
In-Transit
payable by
us
in addition
Coverage
Page
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1 of 8
Filed 04/15/16
Document 1-5
Page
74 of 94
We will pay you for loss of "Property" while in the care and custody of a "Messenger directly caused
payment of such "Property" arising out of

II.
or
by


"Coverage Part":
A.
"Detention"
holding under duress of an "Insured Individual" by anyone:

agent of or with the tacit approval of any government or government entity;
Acting
2. Acting or purporting to act on behalf of any insurgent party, entity or group,
1.
B.
means
the
as an
"Employee" means:
2.
service;
a.
While in your
b.
Who you
c.
Who you have the
Any natural
3.
4.
right to direct
or
and control while
commissions; and
performing
services for you;
individual who is furnished
a.
To substitute for
b.
To meet seasonal
temporarily to you:
permanent "Employee" as defined in Paragraph B.1.,
or
short-term work load
subject
who is
as a
consultant while

"Expenses" means:
5.
performing
who is
performing
services for you;
"Guest" student
or
intern
or
pursuing studies
or
duties.
2.
Fees and costs of
negotiate
or secure
independent public relations consultants and/or interpreters;
The cost of hiring security guards to protect an "Insured Individual" or "Property"
the
Fees and costs of
5.
6.
Salary, commissions
by you
or an
upon the
and other financial benefits paid by you to an "Insured Individual". Such

at the level in effect on the date of the "Kidnap", "Detention", or "Hijack" of the
c.
days after their release if the "Insured Individual" has not yet returned to work;
120 days after the last credible evidence following abduction that they are still alive; or
d.
a.
b.
7.
or
services for you;
4.
leave;
conditions,
to your direction and control and
1.
3.
on
Any natural individual who is leased to you under a written agreement between you and a labor
Any natural individual who is a former "Employee", director, partner, "Member", "Manager", or trustee
retained
C.
or
Up
to 45
Hospitalization
surgery of
an
or
Page
909-0001 08 09
plastic
2 of 8
Document 1-5
Filed 04/15/16
Page
75 of 94
8.
Fees and costs of
9.

extortion threat;
by you
to pay
a ransom
demand
or
own
parties
12.
D.
"Guest"
1.
2.
means

for business
E.
any individual:
"Hijack"
aircraft
or
social purposes.

means
or
traveling
in
motor vehicle,
F.
G.
"Insured"
H.
1.
2.
means:
The "Insured
Entity"
means:
Any director, trustee, partner, "Member", "Manager", "Employee", proprietor (if the "Insured" is a sole
Any "Relative", "Guest" or resident in the household of an "Insured Individual" defined in Paragraph
H.1.; and
Any "Messenger".
"Manager" means an individual serving in a directorial capacity for a limited liability company.
"Messenger" means a natural individual designated by you to have care and custody of "Property" outside
3.
I.
J.
K.
L.
the "Premises".
M. "Occurrence"
means an
act
or
event
or
N.
"Premises" means any building you occupy in

0.
"Property"
means
money,
or
events
conducting your
involving
one or more
individuals.
business and the residence of any
monetary instruments, securities, services
or
any other
tangible property
that

P.
means a spouse, child, step-child, legally adopted child, foster child, spouse of a married child,
"Relative"

Cond itions, the following Exclusions apply to this "Coverage Part".
A.

1.
Acts Committed
by
You
or
Any
"Coverage Part", this "Policy"
Policy
Terms and
shall not
cover:
Page 3
909-0001 08 09
of 8
Loss
2.
"Expenses" resulting from any dishonest, fraudulent
a.
You;
b.
Any
or
Page
76 of 94
by:
or
Surrender of
Loss
B.
or
Filed 04/15/16
Document 1-5
or
"Property"
from the surrender of
"Property":
a.
b.
Outside the "Premises" as a result of a threat to do

bodily
harm to
an
receipt of
individual in
the
ransom or
possession of
Purpose of INSURING AGREEMENT C. of this "Coverage Part"; this "Policy" shall not cover:
Political or Military Activity
"Expenses" resulting from an "Insured Individual" taking part in any political activity or the operations
For the
1.
2.
3.
Travel Documents
or
or an

A.
Limit of
Liability

B.
one
"Occurrence" is the
applicable
Limit of
Liability
as
Retention
C.
apply
to any
"Expenses" paid under
INSURING AGREEMENTS B. and
In the event of
an
A.
Determine that the
B.
In
"Coverage Part", you

actually occurred.
extortion threat, "Detention"
has
must:
"Kidnap",
"Hijack"
regard to a "Kidnap" or extortion threat, make every reasonable effort to:
E. Submit to examination under oath at our request and give us a signed statement of your answers.
or

Policy
Page 4 of 8
909-0001 08 09
Document 1-5
Filed 04/15/16
A.
mean
Page
77 of 94
"Expenses".
Fraud
or
"Policy"
at any time. It is also

a material fact
misrepresent
concerning:
"Coverage Part";
The "Property"
"Coverage Part";
4. Your interest in the "Property" covered under this "Coverage Part"; or
than through consolidation or merger with, or purchase or acquisition of assets or liabilities of, another
entity, such "Premises" and "Employees" shall automatically be covered under this "Coverage Part".
Consolidation, Merger or Acquisition
If through consolidation or merger with, or purchase or acquisition of assets or liabilities of, some other
2.
covered under this
3.
B.
C.
D.
1.
2.
90 day period.
3.
a.
b.
The merger,
Period."
or
acquisition
occurs
less than 90
days prior
to the end of the
"Policy
Form
"Subsidiary"
Acquire
or
of such
3.
E.
purchase
Due
acquisition
or
formation.
a.
b.
The
acquisition
or
formation
occurs
less than 90
days prior to the end of the "Policy Period".
Diligence

doing
all
things reasonably practicable

Page
909-0001 08 09
5 of 8
F.
Investigation and
Filed 04/15/16
Document 1-5
Page
78 of 94
Settlement of Claim
G.
Liberalization
we adopt any revision that would broaden the coverage under this "Coverage Part" without additional
Loss Covered Under More Than One Coverage of this "Coverage Part".
If
H.
lesser of:
I.
1.
The actual amount of
2.
The
loss;
of the Limits of
sum
Loss Sustained and
or
Liability applicable to those
coverages.
Reported
1.
2.
"Policy Period"; or
"Coverage Part".
"Coverage
K.
Period"
"Hijack"
alleged "Kidnap",
began prior to the
an extortion threat,
effective date of this
Liability
any
2.
occurring during the "Policy

Part".
or
Non-Accumulation of
1.
in SECTION II
we
"Detention"
J.
events
the
During
However,
or
one
"Insured".
Other Insurance
L.
However, this "Coverage Part" will not apply to the

The "Property" covered under this "Coverage Part"
That you
own or
is limited to
more
than the
applicable
Limit of
"Property":
lease,
2.
That you hold for others;
3.
For which you
However
individual
amount of loss that is
or
legally liable.
this "Coverage Part" is for your benefit only. It provides no rights or
or entity. Any claim for loss that is covered under this "Coverage Part"
are
benefits to any other

must be presented by
you.
M.
Records
Page
909-0001 08 09
6 of 8

of any loss.
N.
Filed 04/15/16
Document 1-5
"Property"
covered under this
"Coverage Part"
Page
79 of 94
so we can
verify
the amount
Recoveries
Any recoveries, less the cost of obtaining them,

"Coverage Part" will be distributed as follows:
made after settlement of loss covered
a.
b.
Then to us, until
c.
we are
by
this
Liability
are
reimbursed for that
to the Retention
Amount, if
any.
2.
a.
b.
0.
suretyship, reinsurance, security or indemnity taken for our benefit;

Of original securities after duplicates of them have been issued.
From insurance,
or
Territory
"Coverage Part" covers acts committed or events occurring anywhere in the world, subject to the
following:
This

3.
P.
"Coverage Part".
Transfer of Your
Rights of Recovery against Others
to Us
Q. Valuation
1.
Settlement
Subject to SECTION
a.
V.A. Limit of
Liability, we will pay for:

and including its face value.
We may, at
our
option, pay for
1) At face value in the money issued by that country; or

2) In the United States of America dollar equivalent determined by the
b.
Loss of securities but only up to their market value at the close of business
the
exchange
day they
were
1)
Pay the value of such securities or replace them in kind, in which event you must
2)
Pay the cost of any Lost Securities Bond required in connection with issuing duplicates of the
a)
Value of the securities at the close of business
loss;
b)
909-0001 08 09
on
rate of
loss of
on
the
day you
first became
assign
to
us
aware
of the
Page
7 of 8
or
Limit of
Liability.
c.
Document 1-5
Filed 04/15/16
damage to "Property" other than money

1) Its replacement cost value without deduction
Loss of
or
aware
of the loss;
Page
and securities for not

for
depreciation
on
more
the
80 of 94
than:
day
you first became
or

whichever is less.
2.
a.
b.
c.
R.
option, pay for loss of or damage to "Property" other than money and securities:
In the money of the country in which the loss occurred; or
We may, at
our

1.

2.

4.
or
delivering
Part"
by mailing
or
days before the effective date of cancellation if we cancel for non-payment of premium; or
b. 60 days before the effective date of cancellation if we cancel for any other reason.
We are not required to renew this "Coverage Part". However, written notice of our intent to nonrenew
"Policy Period".
We will mail or deliver our notice to the "Named Insured's" last mailing address known to us. Notice of
a.
3.
by mailing
"Coverage
20
refund may be less than pro rata. The cancellation will be effective even if we have not made
Page
909-0001 08 09
or
8 of 8
Document 1-5
Filed 04/15/16
Page
81 of 94

following:
A.

SECTION VII
2.
We may cancel this

a.
20
days before
"Coverage
Part"
by mailing
or
delivering
the effective date of cancellation if
we
cancel for
non-payment of premium at any time;
Or
c.
1)
against;
C.
crime
arising
out of acts
increasing
the hazard insured
or
2)
3)
4)
5)

6)
4.
reason
and this
"Coverage
b.
or
conditions;
reasonably
have
or

or
his

solvency; or
which
materially increase the
representative
our
notice.

5.
909-0029 08 09
Page
1 of 1
Document 1-5
Filed 04/15/16
Page
82 of 94
.C, Hanover
Insurance
Group*
We have caused this policy to be

declarations page, where required, by
signed by our President and Secretary

duly authorized agent of the company.
and
countersigned
on
the

440 Lincoln Street
cra7a,
Charles F. Cronin
Secretary
SIG-0001 06 05
Marita Zuraitis
President
Page
1 of 1
Private Company
New Business
..4Hianover, i
Gtoup*
Page
idtpoL-fo
e, k44:44N6*
114
nsurance
Filed 04/15/16
Document 1-5
83 of 94
L,\J
Advantage Portfolio
APPLICATION FORM
CLMMS-MADE WARNING FOR APPLICRTION
THIS APPLICATION es FOR A CLANAs.iaRDE AND REPORTED POLICY. SURIECT TO ITS TERMS, T1415 POLICY WILL APPLY
ONLY To -CLAIMSFIRST MADE AGAINST THE 'INSUREDS' AND REPORTED TO THE -INSURER- DURING THE POLICY
PER/OD OR ANy EXTENDED REPORTING PERIOD THAT MAY APPLY. PLEASE READ THE 'POLICY' CAREFULLY TO DETERMINE
Whertevet usect
or
otherwise stated
1.
2.
Ns
AppTicatson, the
tertn
"Appkant- 41/1E
Man
the Named insured- and all subsidiaries. unless
t:
Applicant/IV e4:4) Ui 5 s ot3 -4-7-11444-"11-91 a Alt ariv-,0 11.)6.c,

f. 1-1 0 ht.r Poeta 0 ft,
Address CII Applicant 1, 22
1 s.
Cc-43.-rts" 044x.
Telephone:
SC>) (12-7 irl 99
...a21.0
Name
of
city,
3.
Name and
State:
Address (if different than ewe) of Primary Contact (Executrvepetioeug,, thonaed
to
regardirg the proposed polioh:
Ivlarrie:TePiC sg.abfAcyeit
4.
City_
For Employment Practios Loss PreventiOn.
Name:
krpirectors
LT.
ard Officers
State:
irldicate the individual
-Coverage Parts*
Practices
X fickciary Liability
X Cfirnt
are
Limit
ernpbyment lavy mamas-
Limit of Liability
Requested: i
Limit of Liability
Requestrd: S
Liability
Requestect S
Limrt of Liability
Requested:
Limit a Liability
Pbquested:
Lent of
AreL
sectbns of this Appfication
eliabitity Requested: S
Insurance
Insurance
Si-ideate the bile of lent
1.7000 0 0C)
fr7
S: 00 0, 00 0
1,. 009
00f0
i-/
2, c>1)5
1., 0 CO) 0 DO,
DO 0
requested'.,Cointined Aggregate Limit of Liability for all -Coverage Parts'
slagfiriggigmalheatexa0N
Please
Zip Code:
resources or
Liabikty Insurance
X Kidnap/Ransom and Extortion
1..
responsible for human
being requested and complete only those
Liability
Corporate lEnitryl Liability
)(Employnent
Tide:
Title: G c,4 ift AZ

.0
/2te.../,
y
e....-4- e-4, he.. ft, ..._\14L...**Act__ C-oe.-, Tviephtne.:
Please indicate below which
Zip Code
reor noticcs ate infortna( ork
Pr-re-A-
Email Address:
1.
1+ Z.
)1(eparate
Aggregate Limit af Liability /Or each 'Coverage
provide the following Mformabon regarding the Applicant's most recent
place, please indicate with a
NIA Attach a copy of
Insurance
policies,
all apptications submitted to the current
if no coverage is
insurer or
Parr
curiently
In
any prior insurers,
0
90400:13.1Cii
Document 1-5
Filed 04/15/16
Page
84 of 94
IMPORTANT: We wJ refy upon the declarations and statements contained in any prior appkationts) and the Applicant
understands and agrees that those declarations and statements will be Incorporated into any Advantage policy rasped by
2. None
tiabiky
Insurance Carner
gdlltktiti
Emile
Seta=
.110.1433
0:00 5,5.000
Vro, Tpc:e
r gyrr=4-1.5-
(Noe
Corporate (Entityi Liability

Insurance Carrier
Limit of...Lability
Esoiritsp_illie
S
Norse
Employment Practices Uabarty

Insurancr Corer
Explratiqp
C. 4-1411-11 5
lifDligliabittly
Date
t co
&tett=
S 1 $4-kis4-0
5.004:4
'r. I's a.
insurance Carrier
q1.
C thart-il-i-
Unlit of liability
Emsrium
ktattien
0, 000a
1000
C None
Crime:
Insiriance Cartier
io...
.4'
it.
g if
Kidnap/Ransom
and 5dortion:
tint Of Liability
It,
c,
RidediCILI
Linist.61b&
c'cC
EttOraflon D.ate
Mental
2.
Has the Applicant exerosed the Eaten:3rd Reporting period (or Discovery Period) movt
fat any Coyerage Parts to which this application relates?
3.
Within the past 5 years has the Appkant given notice of any tiaiin circumstance or potential
claim to any insurer under arty of the coyerage parts to which this apphcation relates?
please attach a
foff
laratm
s 2 aoa cleco s 5i:t oco

i..
)(None
insurane Can*
4,
121:stalt=
I: None
Fiduciary liabarty:
If 'Ye
us
explanation of the claim, circumstance,
or
Emma
recently
L
73 Y Is
FL
0 Yes
I: No
N o,
potential dam
Within the past 5 years has the Applicant cancelled or non-renewed any of the coverage pans
which this application relates? (Ndt Applkabie In Missouri)
to
CrENEBAUNEQSMATIMI
/I.
i 41
State of inoorporation: A /2./7.-wait d
Date established:
Nature of the
3.
what is the Applicant; Primary Standard Industrial Classification cSIC-) Code?
4,
What is the
5,
complete
Total Employees.
6.
Within the past 3 years has there been any change fresignationz departures. retirement, etc) in the position of the
of the Board, President Chief Executive Officer or Chief Rnanoal Officer?
Please
if Yer.
10.-EKOS Wat
Appkares
business:
.14.PArtr...j. 30,..r.ott. 5,1, pt-f, CArr 5 A Lx54 5-et 310
2.
Applicant's Primary
the
North American
following information
i-&-i:1 i).0
Industry Classir--.4s-
for the current Yea
Annual
efiutirvi
Lii
Revenue...a-if:.1 4.--"
please provide the following detaits sea allachment
C-4d, 7,.
"'Total Assets,
15: lici 3 i 7ei

Chairperson
Name of inciaridual, date of change, and reason for charge.
7,
In
the next 12 months tor
during the past
Filed 04/15/16
Document 1-5
lff -months) is the
Page
Applicant ccinternplatfng tor has the Appkan
85 of 94
or
been
srtheproimpk4irsg
F
(4) My merger. acquisition,
divestment
'es
(b) Any change in outside auditors'A, Yes

!.7., Yes
tr.) Any renal-Oration or anangernenl with aediton under foderal or state law?
No
or
(d) My branch, location, tacky, office.

tf the
Applicant answered
Does the
8.
d -Yes-,
please
Does the
-Yesto
Appkard perform
attach
an
Appkant Kawe
-Y& s'. please anach
uswogrANT: It
is
above
requested
iS
subsidiary dosing consoklations or Layoffs?

any part of Question 7, please attach an explanation.
any
or
for a lee>
professional services
Does the
any subsidiaries for which roverage is
iequested2
hist of these entaics and indicate nature ot taraness tor each.
understood
Orowtded-
agreed
and
that coverage
General
is
not
pdd for subsidiaries
3.
:hese
so
5.
Ouesbon
under the Investment Act of 1940
nture
Has the Appkant or any person proposed for coverage been the
any of the following during the past 5 years'
Applicant answered 'Yes' to
bubness
4yetcentot2wrership
subject of,
or
any of the above in Question 3, attach
Please
attach
held by Applicant for each.
17 Yes
Orpni2atitat
Yes,..2(No
kill
(I(No
been involved in,

Persons
C Yes
RIND
1.7, Yes
liNci
i....' Yes
C Yes
lel Yes
..i<N0
kriVo
f Yes
7: Yes
.1 No
.7., Yes
X No
_7 yes
4o
description
g No
X No
of the details.
Other than those identified rn your retponse to Question 3. has any claim been brought at any
time during the last 5 years against (i) any Applicant or liD any proposed insured individual in his
or her capacity as a director or (Aker of any entity?
please
unless the irifonnation A
ANA-Tr-AT/ON L-a.rwipPrr f
1 i-4
.2.-.0 7S.51
Fr
kid
has'
nal 12,it,A (or louring
is t e A
cant sante
pas
iating
in
the
been
of
the Applicant completed or
process
completing arty pubk or private offering
of securities'
if "Ye5'. please attach a full description with details,
If -re
No
Company
7' Activities that fat
(a) Mti-trost, copyright or patent litigation

a)) CNII. criminal or administrative proceeding alleging violation of any
federal ar State securities taws?
fc) Civil. criminal or administrative proceeding alleging violation of ahy
Federal or state Anti-Trust or fair Trade Law?
fd) Any other cnminal actions?
fe) Any action for suspension or revocation of a license or for any
professional disciplinary sanction'
4.
XYes
Operations
il
1 lif"ri''
Partnership Manager
I
n4 1
P*one
irt
In the
g the
Anto
state.
Insurance
Venture/
ihierations-r-ientrtir_irdicale
t)(21:int Par7Ialtics4112*PC
tiVi eriongs)
j
es", please
UE,400,-14-
activities? it None,
v,
toil
2.
Yi%
-14-C-+Ndo,ft5TMer-Vt4J-A--
Applicant participate in any of the foirowing
Captive Insurance Company Operations

franchising,
Xnio
explanation
rxmcicots AND OfFicritata1tErilifilBMATI2:1

1.
No
l Yes
Yes
full desenplson of the details.
provide the bilowing inforrnatnn regarding the Applicants outstanding ownership;
(a) Total number of shares
or
wits
outstanding
(b) Total number of security holders:

(c) Number or shares or units owned
dire* andior beneficially by the Appbcants:
/00 lei,
0
14.4.07, aten
(a) My security Nakier
own, or have the

unit.
Filed 04/15/16
Document 1-5
to
right
owri,
ouestancing shares or
directly
and/or benefedatly 10 percent
or more
86 of 94
Page
of the Applicant
Please provide detads

Director
or
Represented
Ofker Shareholders
Voting Shares Owned
Sharethraden1
who
individual and Corporate
hon
oth n-dearioh and non-officers
i
Applir:ants
Board of Directors
Board of Managers
on
Of
are,
of Directcts
ReIxesentedoronBoaAPrrocafsasRahneagoardert
Voting Shares Owned
1.
eMeafitEKLERKEMEUMILMON62861141011_
1.
Employee Count
Y.Cal.
i 51--
Current
Previous
What Peccentage of the APPlIc-ant's
3.
Does the
eta
EmPloyees currently earn
more
1,
1, at
4.
then 5100, 000?
Applicant:
(a) Hare written pima/tires
In
place regarding
Equal Opportunity Employment

Mti -DiscnrnInation:
Anti-Sexuat Harassment
Emplayrrecnt
<Yes
2: No
Ayes
X'Yes
IT No
JXYes
at Witt
Progressive Discipline:
Handling complaint of sexual harassment cx discrimination.
i
tilzagiglgig
canitittm
0..
.F6
2_
2-
locators/hat hoe
tiCamEmrardvsi
ECORkgeltS
tr-LCaid1213ala
Part Teng
Fuil Tent
.v
7, No
;.-T No
Y es
T. No
<Yes
I-2 No
Y es
No
7, Yes
E No
promotion?, Yts
Oo
ADA accommodations
If
d.
the Appkant answered -Noto any of the above in Olvestion 3, please attach
Does the
fb) Have written

have
an
employee handbook to
all
employees"?
if the Applicant does
procedures in place that are distributed to each employee
employee harvitiook7
lc) Use any tests to screen

If 'Yes'.
full explanation_
Applicant:
fa) Distribute and document the receipt of es

not
Appficant or employees for continued employment
or
please describe-.
tr0 Review al teem:al:ions with human resources and in-house or outside counsel?
(03 Have
full-time human
resources
manager
or
Y es
:i. No
department?, Yet
1-..: No
M Is face-to-face training regarding anti-rhscrirranabon and anii-sexual harassment polioes and

procedures conducted by:
in -house human resources
An
If liio to both of the above in Omstion dt
36,49,
)Yes *No
staff"
outside vendor'
please attach
an
explanation
Yes,1.7( No
Filed 04/15/16
Document 1-5
During the past 5 years. has
grievances
cr
arty Appitcant in any capacity. been involved in any lawsuit.

other administrative hearings or proceedings before any of the following
charges
Page
Inquires
investigations
(a) National Labor Relations Board?
Yes
(t') Office of Federal Contract Compliance Programs'

Id) US. Department of Labor?
Yes
(e) Any Stale or Local Covemment agency 5441

Fair Employment A(ency?
If the
Appkent
or
5lo
Xtaoi
:7' Yes,
dot Equal Employment Opportunity Board?
(f) US rhstrid
87 of 94
as
Yes
the labru
rikpartrarni
ti
State Court?
answered 'Yes' to any pan of Question 5.
please attach
KNo
or
an
Yes,AKNo
2: yes
il(isio
X Yes
No
explanation.
OPDONAL pow PARTy LABIUM COVAAtIF

6,
Does the
Applicarit have estabashed polioes
condeet when
rion.harassment statements?
Outlining employee
and
procedures.
dealing with third parties including, nois-discrimination
and
Clo) For tespordng to complaints of harassment discrimination or ava rights violatiore

from third parties?
What percentage of the Applicant's

of their arricuons off-site?
B.
Has the
employees
work at ousiomer locations
or
ever had any action or civil sut brought

apinst them by a
alleging haaassment discrimination. or civil rights violations'
If 'Yes* pleace attach a full description of the details
Applicant
perform a maionty
customer; dent
or
third party
Z Yes
MIKI6RYIABriantigThiM.DON
1.
Please trst the
names
and
Plan Names
(Do not include health
welfare plans)
Aia...4.44A 'IOW
tyr.les of Appfscants employee benefits plants). Attach addtional pages if needed

Phan Assets
(Most current year)
:;7e41:1-',
f---
75
Funding
Number of Plan
Under of Over Funded by

more than 25% (DB only)
Parbcipants
Type
of Man'
{7- Ye5
Da
Yes
:2 iiti
:Yes
iTho
Yes
2.
Appiicarst
or
handle any investment decisions in-heose7
3.
rt No" lo question 2 above do the fiduciaries review the investment guideiines used
investment managers at least annually?
4.
Are
5.
Has any
pians Nar
any
if 'Yes'
please
in
compliance with plan agreements
or
by the
ER/SA?
(EBF)
yes
A:to
Xtres
No
describe:
employee benefit plan invested in more than 10% of any entity Other than
pooled investment vehicle suds as a mutual fund?
Has any
If- -Yes'.
Hat
Yes
employee benefit plan invested in seoanties of the Applicant?

if "Yes", please attach a fill description with details.
or a
Top
please describe
if 'Yet:
6.
AA 6KS
No
Defintid contribution (DO. Defined Benefit (DB). Empioyee Stock Ownership (ESOP) Excess Benefit
Does the
3a
r.:1-; No.
7, Yes
7'
Third Party or
Outside
Administrators
please
attach
full description with details
the
7 Yes
Vac>
I- Yes
X.No
Applicant
0
99447003 WW1
Has any employee tenett plan loaned or pledged any employees benefit pitan assets
party-in-interest (including the APplicant'
It 'Yes".
Filed 04/15/16
Document 1-5
please attach a
Aie their any overdue
MI
88 of 94
Page
to any
Applartt contnbutions tor any plan, or has any plan requested or

for a waiver of contributionsyes
contemplated filing a request

9.
attach a fuk
please
If 'Yes
description with details
"(No
Within the last 3 years has there been,
or is there airier* under consxletation. any

reonch-grg
spirr-oft transfer, consolidation. merger, temanation or other senile transaction of any employee
bereft plan?
if -Yes-. please atach a FA description with details.
If any or the following questions are answered 'No". please attach a Ur description with details
(a/ Are ail
benefit plans
Act IHIPPA) 7
employee
Accounubility
compliant with the
Health insurance
Do all
(d)
employee benefit plans have a
written investment
Yes
.(No
Yes
No
Portability and
(o) Does the plan sponsor comply with the summary Pan description requaements under ER5A
for at empioyee benefit plans?
Ii
X9
yes
description enth details.
..r1( Yes
Yes
poky?
S.7 No
ts the lair 'Twice value of at
employee benefit plans cainitated annually?

During the past 5 years, has there been, or is fnere coact4 any investigation by the IRS,
Department ol Labor DOC, Pension Benefit Guarantee Corporation (PBGC), or any other State
or Federal Agency of any employee benefit plan Df any current or former 5duoary of suth
employee benefit plan.>
If "Yes",
please attach
full
7, Yes
description with details.
CRWEIQYIBECILINKI
1.
Does the
Applicant
(a) Allow the employees wbo reconcile the
Sign
monthly bank statements
to
also:
checio!
Handle deposits?
Have access to check
signing machines oi signature plates?
Yes
XNo
CT' Yes
it< Nc
Yes
(b) is countenignatured checks required?

If -Yes',
over
who
what amount"
can
sign checlei"
PfLes Qfp-3-t
(d)
Is
proces from
incoming checks irnmediate/y stamped For Deposit Only?
Does ars annual external audit include all subsidianes and
joint
ventures?
4.
S.
Do you have
6.
Do you have
art
Does the
Are
Afti
documented system of internal control
4(
.2(Yes
C No
AYes
rio
T., Yes
.KNo
ANC
Yes
Parg-nriteAeo
If 'No",
7,
si
:1"., Yes
Applicants external audit include all of its kications?

*ase expLin: fqb E
Does an independent CPA provide a Management Letter to the Acpticant?
3.
beginning to
check stock stored under dual control with controlled access'
ie.) Are
2,
jL)t A Piosuav
15
(c) Are internal controh designed so that no employee tan control

end le& request a rheck approve a voucher, sign a diedcP
politiesip-ocedures?
internal audit depattment?
;2 Yes
..rleYes
.KNo
..71' No
'LT. Yes
management polities and computer system control's in place to prevent inclividual(s) vino
new hires from adding them into the payroll:
approve
8
Do you have
9.
How often does the
program
In
place to detect possible
"Chosr
XYes
employees!
No
No
Applicant perform a physical 'mentor), check of stock and equipment' c1dm4
Who performs These reconciliations?

la
Does the
or
Appkant maintain a perpetual inventory of stock including
purchased goods/scrap?
raw
matenalsfrnaratactured
iNtlittirrT) /-li
)(Yes
No
0
ws4co5 rat*
129COCILK-Liniti=
Are internal
control poliCie; and procedures for kxeign locations
consistent wrth those
of domestic locations?
if 'Nor.
please
Does the
attach
Does the
an
k,,s,,Yes
explanation.
Applicant perform pre-ernplOymont reference checks for all
i( "No". please attach

14.
an
its
potential employees?
adding
place
verify the existence
and
them to the authorized master vendor list?
k-r
to
ovvisetshao of
XYes
7 No
Yes
Xfsto
'JYes
A"No
the authorized
Are the duties of
16,
computer pmgrammers and operators separated?

P.15 separation been established between authority to initiate and approve
17.
If a
telephone call
other than the
can
one
activate
whO
a wire
transfer?
transfer of funds, does your financial instrtubon calf an
requested the transfer
If 'Yes", what is the callback threshold?

1..
Are transfer verifications sent to

initiated the transfer?
19.
Are wire transfers recorded the same

who did not approve or transmit such
before acting
on
41_4_ tk,
employer
an
the transfer
.e.
request?
5--F444
-4.,
department other
employee
k Yes
No
XYes
C.: No
A Yes
L No
XYes
7 No
than the one who
..7. Yes
)(tito
73 Yes
KNo
E Yes
El No
System,,i(Yes
7: No
fallowing physical controls
(a) Alarm
.krslo
L_
Verify invoices against a corresponding purchase order, receiving report and

master vendor hst Prior to issuing payment7
Are the
Yes
r'
vendors prior to
new
lc) Allow the same individual who verifies the existence of vendo,s to eke have the authority
to edit the authonzed master vendor 1St)
20.
Nu
Applicant:
(b) Have a prokrOure
(d)
expimation.
Lat Maintain a list of authorized vendors?
15.
89 of 94
Locatinns in, cact

Egg
1
111----11"tear141.ainel
I,
I
13.
Page
Number of Locabons:
11
12,
Filed 04/15/16
Document 1-5
in
day the transfer verifications

wee
are
received
by
an
indavidual
transfer?
place:
<No
(b) Video Cameras
71 Yes,,
Ici Security Guards
0 Yes,
K No
(di Controlled Premises Access

21.
Maximum exposure inside the

Location.
22.
premises:
5...e e l'15-A194-1(
Outside the Premises Coverage Exposure:

Do you use an Armored Motor Vehicle Company to
If 'No'.
Ca*
.7f;)
Checidzsearities:
transport Money or Securities?
25,-D0 0
13
Yes,,,titel
please complete below.
Maximum exposure outside the premises:

Cash:
Location:
Checizi/Securitiex
23.
g4,4.,-pLo%4C_
100-00, 5 )6119)
of
Messengers:
List all employee theft forgery, computer fraud or other crime losses discovered by the Applicant
in the last 5 years. itemizing each loss separately. Include date of loss. description, total amount of
toss, and corrective measures Attach additional pages if needed.
1-7e-T
4-r-to
!I Chedc if none
iv/ ia4..Z
100000
l
1
1
I
Document 1-5
Filed 04/15/16
Page
90 of 94
QUIONAL-alealROMBECIMIVAMPL
24.
25.
Please describe Me
Innen
Do any of dx,
Applicant's
It 'yes-, please
explain
the
Pf5rftles for d'ents'

7-0-41.5
ojc.
APPlicant
clients reduve the Applicant to airry
and
wane
/...4.-1,04-4-L
insi, rance
or To
be bonded'
itpe...gomR473
Tes
specify amount
KIPMEM12261t-ALDICata/Qh1...CAZIRAGLINEQR846.101
1.
Rease
ccenplete
the
following information regarding the foreign travel of the Applicant's employees:
Counmes Vruted
Number of annuaIlmos
-1&1242ic
cwe-rA,
2.
Averaee stay
6-,DAY5
5 4D4-Y5 I
Number of errtokrvers
3 5
It 5
7 AI why": A^tA LA47,5'/A

Describe the Apcant's secunty precautions taken for foreign travel.
iSILQUitiablEgfafalf:CAME1124.
7.
The
No
Applicant must complete the prior knowledge statement belpar

or entity proposed for coverage is aware of any tact circumstance,
person
suppose
AppX
No
or situation which he or she has reason to

claim that would fall within the scope of any of the proposed coverages far whch the
maintain insurance, or within any of the larger lanits cf liabitity sought by the Applicant except:
might give rise to any

does not
currently
or
thAPORTANT: 15 understood arid agreed that we shall not be liable to make payments for loss in connection w4h any ciairr
rrade against any ApPlicant directly or indirectly arising out ot based upon or attributable to or hi any way involving any lawsuit
administrabve proceding wotten demand. tact circumstance, or Srtuation set forth or that should have been set forth in the
Aoplicant response
DUa
40,09)
to
question
above.
DKIARADQNS
The
Document 1-5
Filed 04/15/16
Page
91 of 94
bkEICE
undersigned. acting on behalf of all Applicants. &atm that the statements set forth in this 'Applkation' are
ThExcugh efforts were made to obtain requested oformation trorn each and every Applicant proposed for this
proper and accurate completion of this 'Application'.
true and correct and that

to facitate the
insurance
undersigned agree that the information provided 21 this "Application" and any material submitted herewith are the representations of
Applicants and that they are rnatenal and are the basis for nuance of the insurance 'Policy provided by us. The undersigned further
of the
'Policy' Any material
stgree that the Applkation- and any material submitted herewith that Se considered attached to and a part
sbinatea with the Apphvation" shall he maintained on Me (either electrum-Ay or paper) with in and shall be deemed to be attached
The
at
hereto
as
If
physically
attached.
It is further
agreed that:
tf any of the Applicants discover or
become aware of any significant change in the rendition of the Applicants Organization between
the date of this 'Applicationand the "Poky inception date, *Nth would render the 'Appricanon
Any 'Policy' isSlied will be in reliance upon the trutirtuthess of the information provided in ths -Apptication!: provided, however with
respect to such information, no knowledge or kiforrnation possessed by any Applicant shall be imputed lo any other Applicants_
any parson ce persons knew as of the 'Policy' inceptizat date that such information contained an the -Applicationtsr were untrue,
inaccurate or incomplete, then Coverage may be denied or canceled with respect to that person or persons if such infomiabon
was matenal to issuance 01 the 'Poky'. tiowever, it the Chairperson of the Board of Diredors, President, Chief Executrve 01ficez or
Execubve Director of the Applicant knew as of the -PokcY' inception date that such informabon contained in the Appricationfsr
were untrue, tiaccurate or incomplete. then Coverage may be denied or canceled with respect to that person or persons arid the
Applicant Organization if such information was material to issuance of the "PoAcy.,
Statements in the 'Application', facts pertaining to or knowledge possessed by the individual skveng the 'Application" shall be
imputed
to the
Applicant; and
-Applkatlon' does
The signing of this
not
bind the
undersigned to purchase the
insurance.
NQTIQ3Q_CQLQJ3ADD_AF2U,CAM IT IS UNLAWRJE TO KNOWINGLY PROVIDE FALSE INCOMPLETE OR MISLEADING

FACTS OR INFORMATION TO AN INSURANCE COMPANY FOR THE PURPOSE OF DERAUDING OR ATTEMPTING
TO DBRAUD TI* COMPANY. PENALTIES MAY INCLUDE win:sower', RNES, DENIAL OF /NSURANCE AND CIVIL
DAMAGES ANY IN9JRANCE COMPANY OR AGENT OF AN WSURANCE COMPANY WHO KNOWINGLY PROVIDE FALSE.
INCOMPLETE OR MISLEADING FACTS OR INFORMATION TO A POLICY HOLDER OR GALIVANT FOR NE PURPOSE OF
DEFRAUDING OR ATTEMPTING TO DEFRAUD THE POUCYHOLDER OR CIAIMANT WITH REGAK) TO A SETTLEMENT OR
AWARD PAYABLE FROM INSURANCE PROCEEDS SHALL BE REPORTED TO THE COLORADO DIVISION Of INSURANCE
WITHIN THE DEPARTMENT Of REGULATORY AGENOES.
Nana TO PENNSYLVANIA APPUCANTS ANT PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD
ANY INSURANa COMPANY OR OTHER PERSON FILES AN APPUCATION FOR INSURANCE OR STATEMENT OF
CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION. OR CONCEALS FOR THE PURPOSE OF WSLEADING,
INFOIWATION COPlaRNING ANY FACT MATERIAL THERETO COMMITS A FRAUDULENT INSURANCE ACT. WHI04 5 A
alto AND SUBJECTS SUCH PERSON TO CRIMINAL AND CIVIL PENALTIES.
moncusuaya8M111,55,KAKI ANY PERSON WHO KNOWINGLY PRESENTS A FALSE OR FRAUDULENT CLAIM

FOR PAYME.14 OF A LOSS OR BENERT OR KNOWINGLY PRESENTS FALSE INFORMATION IN AN APPUCATION FOR
INSURANCE IS GUILTY OF A CRIME AND MAY BE SUBJECT TO CML FINES AND CRIMINAL PENALTIES.
Ns231,_TgIcEbrILUCLAPAKtitat ANY PERSON WHO /WOWINGLY AND MTH INTENT TO DEFRAUD ANY
CONTAINING ANY MAIIMAU.Y FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE Of MISLEADING, INFORMATION
CONCERNING ANY FACT MATERIAL THERETO COMMITS A RIAUDULENT INSURANCE ACT, WHICH 5 A CRIME
NOTICE TO MICHIGAN AND MINNESOTA APPUCANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO
DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON RI.13 AN AFPUCATION FOR INSURANCE OR STATEmENT
OF aim CONTANNG ANY MATERIALLY FALSE INFORMATION OR CONCEALS, FOR THE PURPOSE OF MMEADING.
INFORMATION CONCERNING ANY FACT MATERIAL *OREM, IS GUILTY OF A FELONY AND IS 9.4JECT TO CRIMINAL
AND CIVIL PENAUES.
NOTICE TO OHIO APPUCANTS ANY PERSON WHO, WITH INTENT TO DEFRAUD OR KNOWING ilia HE IS
FACILITATING A FRAUD AGMNST AN INSURER, SUBMITS AN APPUCATION OR FILES A CLAIM CONTAINING A FALSE
OR DECEPTIVE STATEMENT CS GUILTY OF INSURANCE FRAUD.
0
}74-2005 Mgt
Document 1-5
Filed 04/15/16
Page
92 of 94
NOTICE TO rgw_gRuy_AEruc6Nit ANY PERSON WHO KNOWINGLY INCLUDES ANY FALSE OR WSLEADING
INFORMATION ON AN APPLICATION FOR AN INSURANCE POLICY OR FILES A STATEMEP1T OF CLAIM CONTNNING
ANY FAISE OR MISLEADING INFORMATION IS SUBJECT TID CRIMINAL AND OM PENALTIES.
Nralcuo_clutgatfougutwici_ApEtjam ANY PERSON WHO KNOWINGLY, AND WITH INTENT TO

INJURE, DEFRAUD OR DECEIVE MN INSURER, MAKES ANY CLAIM FOR THE PROCEEDS OF AN INSURANCE POLICY
CONTAIMNG ANY FALSE INCOMPLETE OR MISLEADING INFORMATION IS Gunre OF A FELONY
rr IS A CRIME TO PROVIDE FALSE OR MISLEADING
INFORMATION TO AN INSURER FOR THE PURPOSE OF DEFRAUDING THE INSURER OR ANY OTHER PERSON.
PENALTIES INCLUDE IMPRISONMENT AND/OR NNES. IN ADOMON, AN INSURER MAY DENY INSURANCE BENEFITS
1 FALSE INFORMATION MATERIALLY RELATED 10 A CLAIM WAS PROVIDED BY THE APPUCANT
NOTICE To prima A2ELQIUSIERSJYTUCW:S; WARNING:
It IS A CRIME TO KNOWINGLY PROVIDE

NOILCUTEMASS.EL_Y_IIIOINI
FALSE INCOMPLETE OR MISLEADING INFORMATION TO AN INSURANCE COMPANY FOR THE PURPOSE OF
DEFRAUDING THE COMPANy. PENAITIES INCLUDE IMPRNONMENT FINES AND DENIAL OF INSURANCE BENEFITS.
tioncuslacct ANY PERSON WHO KNOWINGLY AND WRI4 INTENT TO MIME, DEFRAUD OR
DECEIVE ANY INSURER FILES A STATEMENT OF CLAIM OR AN APPUCAXION CONTAINING ANY FALSE INCOMPLETE
OR MN-LEADING INFORMATION IS GUILTY OF A FELONY OF THE THIRD DEGREE
NQTICE TO_BANINLMELLCMCS; FOR YOUR PROTECTION. HAWAII LAW REQUIRES YOU 70 LIE INFORMED THAT
PRESENIING A FRAUDULENT CLAIM FOR PAYMENT OF A LOSS Oft BENEFIT IS A CRIME PUNISHABLE BY FINES OR
IMPRISONMENT OR BOTHNONCE TO ARKANSAS. LOUISIANA & WEST VIRGINIA APPLICANTS; ANY PERSON WHO KNOWINGLY PRESENT'S
A FALSE OR FRAUDULENT CLAW FOR PAYMENT OF A LOSS OR BENEFIT OR Of0WINGLY PRESENTS FALSE
CONFINEMENT IN PFUSON,
NOTICE TO MARYLAND APPLICANTS! ANY PERSON WHO KNOWINGLY AND WILLFULLY PRESENTS A FALSE OR
FRAUDULENT CLAIM FOR PAYMENT OF A LOSS OR BENEFIT OR KNOWINGLY AND WILLFULLY PRESENTS FALSE
INFORMATION IN AN APPUCATION FOR INSURANCE IS GUILTY OF A CRIME AND MAY BE SUBJECT TO FINES AND
CONFINEMENT IN PRISON,
NOTICE TO MISSOURI At ARIZONA APPUCANTS; CLAIM EXPENSES ARE INSIDE THE POUCY Limn. ALL CLAIM
ExpENsES SHALL FIRST BE SUBTRACTED. FROM THE UMIT OF UABILITY WITH THE REMANIDEN IF ANy. REINC THE
AMOUNT AVAILABLE TO PAY FOR DAMAGES.
Norta To OREGON APPUCAIJTS: ANY PERSON

ANOTHER TO DEFRAUD ANY
AN
CLAIM CONTAINING A FALSE STATEME
INSURA:Cfr.
Dated
Dated
"tr( ior,
ly AND WITH INTENT TO DEFRAUD OR SOLICIT

BhurrtNG AN APPUGATION. OR ID) BY RUNG A
Lk, FACT, MAY BE VIOLATING STATE LAW
vogi;,
YAr.
IT
Nallef Executive Officer (Sigttature)
Chief Finarteiat
0
go.-oxo MOP
Piease attach
copy of the
Most recent CPA
following for every Applicant Seeking
prepared
Most recent CPA Loner to
-Directors and Officers
Tiduciary Liability
Employment
sf
Page
coverage:
finanoal statements
Management and managements response
Liability'
include alt
applicable offering
Applicant has art ESOP, inckide
Piaetices
Filed 04/15/16
Document 1-5
Liability. Appkane.
Employee handbook
.1 Employment application
with 500
this Letter is
most recent stock valuation

or more
not
issued,
so
indicate)
memoranda
report
ernpbyets:
form
Most recent EE0-1
Third party policies and statements, if
Produce
requesting such
ByAgent
Agency Taxpayer
ID: or
coverage
Afierv-y:
Social
Security
No:
Agent License No.:
Address.
(Street, City, State, zip)
POUCY CANNOT RE ISSUED UNLESS THE -APPUCATION" IS PROPERLY SIGNED AND DATED.
Please submit this 'Application'
including appropnate documentation
Company
333 W. Pierce Road, Suite 300, Itasca, IL 60143
ww.t frwryvle tr in
Îvt^ ni
Vas0:10[Invy,
L,einon
nmp, tow iii AnItot, 1
to:
93 of 94
Document 1-5
Filed 04/15/16
Page
94 of 94
NOME TO_EAW.J.ERSIETJLETIXAM ANY PERSON WHO KNOWINGLY INCLUDES ANY FALSE OR mestuototo
WFORMATION ON AN APPLICATION FOB AN ffirsurlAwa POLICY OR FILES A STATEMENT OF CLAIM CONTWN/NG
ANy FALSE OR MISLEADING RaFORMATION is surescr TO MAMMAL AND CPA. PENAtTIES.
taacup_gividwiLmaiMQjitrparltal
ANY PERSON WHO KNOVANGLX AND WITH INTENT TO
INATRE, DEFRAUD OR OECAVE ANY INSURER, MAXES ANT CLAM FOR THE PROCEEDS OF AN INSURANCE POUCr
CONTAINING ANY FALSE INCOMPLETE OA Ml SLEADING iNFORMANON IS WIEN or A FELONY.
NOTICE TO DISTRICLOLCOJUMEALAPEUCOM WARNING: IT Is A CRIME TO PROvtDE FALSE OR MISLEADING

INFORMATION TO Abl INSURER FOR THE PURPOSE OF DEFRAUDING THE INSURER OR ANY OIHER pERSON
PENALTIES INCLUDE VAPRISONmaif AND/OR FINES. at ADDMON, AN INSURER MAY DENY INSURANCE StENERTS
IF FALSE INFORMAXION /ANIMAL& RELATED TO A CLAW WAS PROVIDED BY THE APPLICANT
N.CMICEMMVILTEMEIEZELV1RG114S1. MED IMASHINOTON MPLMETS TT IS A. MIME TO KNOWINGLY PROvRTE

FALSE INCOMPLETE OR AitstALDING iNfORMATION TO AN INSURANCE COMPANY FOR THE PuRpoSE OF
DEFRAUDING THE COMMIAr MATHES INCLUDE IMPRISONMENT FINES MO DENA*, Of INSEIRANGE mum.
KrIKUSL-Rga137A-Ateigagal ANY PERSON WHO KNOWINGLY AND WITH INTENT TO IMILIRE, Daum
oat
DECEIVE ANY INSURER FILES A STATEMENT Of CLAIM Oft AN APPUCATION CONIAINENO ANY FALSE INCOMPLETE
OR MISLEADING INFORMATION IS GUILTY Or A FELONY Of THE HORD DEGREE
Nona TallemuLAmtcAtIn Fop YOUR PROTECTION. HAWAII' LAW REWIRES YOU TO SE INFORMED THAT
pRESENTING A FRAUDULENT CLAIm FOR PAYMENT Or A Loss Oit aNEFIT IS A camt PUNISHABLE by FINES OR
IMPRISONMENT OR BODE
ANY PERSON WHO KNOWINCLy pRESENTs
it
ik
NOTICE TO AR
A FALSE OR 13AUOULENT CIArm FOR PAYMENT OF A LOSS OR BENERT OR IOADWINGLY PRESENTS FALSE
INFORMAJION IN AN APPL/CATION FOR INSURANCE IS Guar( or A caw AND MAY BE RAUECT TO FINES AND
CONFINEMENT W PR/SON.
4
ANY PERSON WHO 10/CIWO4LY AND WILIFULLY PRESENTS A fA.I.SE OR

FRAUDULENT CLAW FoR NRIMENT OF A LOSS OR BENEFIT OR KNOWINGLY AND WILLFULLY PRESENTS FALSE
INFORMADON IN AN APPUCATION FOR INSURANCE IS GUILTY OF A CRIME AND MAY BE SURIECT TO FINES AND
CONFINEMENT IN PRISON.
marlitLANNLANLA,IntWat
CLAIM EXPENSES ARE INSIDE THE POUCY UWE& ALL CLAM

EXPENSES AMU. FIRST Of SIBTRACTED FROM THE LIMIT Of UAW= WITH ME REMAINDER, IF ANY BANG THE
AMOUNT AVARAALE TO PAY FOR DAMAGES.
tauglicajetszIAL
tattCLEIMEWELdffili ANY Rasort

At.
ANOTHER TO DEFRAUD ANY IN

CLAIM CONTAINING A FALSE ST
Dated
Dated
*1,
AND vorrs INTENT TO DEFRAUD OR SOUCFT

MING AN APPLICATION OR (4 EY FILING A
IAL Ala hvx RE VIOLATING STATE LAW
1000,
Irop
'Ai
Ad`
Altoil11
EXeClitive Office. <51,gra4ure)
EXHIBIT 5
REVISED
i~x.
i~~s~rraiyc~ Gr~~,~~ti
Private Company
,rat e ~~~1io

POLICY DECLARATIONS
Polic Number
LH4 8827059 06
Covera e is provided b
Agenc
A enc Code
ARNETT INSURANCE
SERVICES
2301563

PLEASE REFER TO THE "COVERAGE PART(S)" PURCHASED FOR DEFENSE-RELATED DETAILS.
Whenever printed in this Declarations Page, the items in quotations shall have the same meanings as

Item 1.

Inc
Person Designated to receive all correspondence from the Insurer:
Name: Jeff Brademeyer
Title: VP of Finance
Item 2.
POLICY PERIOD
From: 08/01/2014 To: 08/01/2015 (12:01 AM local time at the address shown in Item 1)
Item 3.

Combined Aggregate Limit of Liability for all "Liability Coverage Parts"
purchased as indicated below.
Item 4.
Item 5.
$5,000,000

D Yes
No
Employment Practices Liability Insurance Coverage Part:
D Yes
No
X Yes
No
Crime Coverage Part:
D Yes
No
Kidnap /Ransom and Extortion Coverage Part:
D Yes
No
401-1127
(01-08)
904-0002 08 09
Notice Offer of Terrorism Coverage 2008

Page 1 of 2
Item 6.
401-1192
401-1268
(01-09)
(08-12)
422-0082
422-0083
(01-09)
(01-09)
904-0001
904-0048
(08-09)
(08-09)
904-0503
904-0507
904-0813
905-0001
905-0319
905-0320
905-0432
905-0434
906-0001
906-0303
906-0314
906-0404
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
906-0901
907-0001
908-0001
908-0035
909-0001
909-0029
(01-14)
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)
909-0901
SIG-1100
(01-14)
(08-14)
Terrorism Coverage Explanation - Policy Holder Notice

U.S. Treasury Department's Office of Foreign Assets Control("OFAC")
Advisory Notice to Policyholders
Cap on Losses From Certified Acts of Terrorism Endorsement
Endorsement
Endorsement
Addition to Section V. Sublimit Specific Endorsement
Addition to Section VIII. Non-Rescindable Side A and B Endorsement
Expense Sublimit
Employment Practices Risk Management Policyholder Notice
Endorsement
K&R Response Risk Management Notice
Signature Page
PREMIUM FOR POLICY

Policy Coverage Premium:
Total Amount:
$38,535.00
$38,535.00
'See Stafe Surcharge Notices) to Policyholder, if applicable

COVERAGE PARTS)AND ANY ENDORSEMENT(S), COMPLETE THE ABOVE NUMBERED "POLICY".
904-0002 08 09
Page 2 of 2
Policy Number:LH4 8827059 06
NOTICE -OFFER OF TERRORISM COVERAGE

NOTICE - DISCLOSURE OF PREMIUM
Coverage for "acts of terrorism," as defined in Section 102(1) of the Terrorism Risk Insurance Act("AcY') is


Premium for terrorism, if any, is stated below
$ 0
Fire Following Premium
$ 0
Other than Fire Following Premium $ 0
401-1127 (01/08)
TERRORISM COVERAGE EXPLANATION - POLICY HOLDER NOTICE

restrictions and to other provisions in certain terrorism endorsements) in this policy. If there is any conflict
Carefully read your policy, including the endorsements attached to your policy.
422-0082 - The coverage for certified acts of terrorism is subject to the statutory $100 billion cap on liability for
With respect to "certified acts of terrorism" and acts of terrorism that are not certified the policy exclusions (for
example, the nuclear hazard and war exclusions) and other policy provisions continue to apply.
422-0083 -The endorsement excludes "punitive damages" either directly or indirectly arising out of a certified act
401-1192 Ol 09
~'r;~,
M
v~,~
-.
..
~~ LLy'~.~=.
.-~ _:
~I1SL1T~iI10E' ~,ICJLiP-a.

OFFICE OF FOREIGN ASSETS CONTROL("OFAC")
policy. You should read your policy and review your Declarations page for complete information on the coverages
you are provided.
This notice provides information concerning possible impact on your insurance coverage due to directives issued
by OFAC. Please read this notice carefully.
The Office of Foreign Assets Control("OFAC") administers and enforces sanctions policy, based on Presidential
Other limitations on the premiums and payments also apply.
401-1268 08 12
Page 1 of 1

ENDORSEMENT
This endorsement modifies the following:
our insurer deductible under the Terrorism Risk
422-0082 01 09

Risk Insurance Act fora "Certified Act of Terrorism"
Act; and
2. The act is a violent act or an act that is dangerous
to human life, property or infrastructure and is
coercion.
Page 1 of 1

A. The following is added to SECTION IV

B. The following Definition is added to SECTION III DEFINITIONS of the Common Policy Terms and
422-0083 01 09

Terrorism Risk Insurance Act fora "Certified Act of
1. The act resulted in insured losses in excess of
2. The act is a violent act or an act that is
dangerous to human life, property or
infrastructure and is committed by an
coercion.
Page 1 of 1

Words that appear in quotation marks have special meaning. They are defined in SECTION III DEFINITIONS. The
descriptions in the Headings of this "Policy" are solely for convenience and form no part of the terms and conditions
of coverage.
II. OPTIONAL EXTENDED REPORTING PERIOD
We will provide an Optional Extended Reporting Period as described below:
A. Liability Coverage Parts
termination or nonrenewal, the "Named Insureds" right to purchase the Optional Extended Reporting
Period shall cease.
3. If similar insurance is in force covering any "Claims" first made during this Optional Extended Reporting
Period, coverage provided by this "Policy" shall be excess over any such other insurance.
4. If we cancel for non-payment of premium, the "Named Insured" may purchase the Optional Extended
5. All premiums paid for an Optional Extended Reporting Period shall be deemed fully earned as of the
be canceled.
Page 1 of 8
904-0001 08 09
6. The Optional Extended Reporting Period shall not increase any Limits of Liability stated in Item 2. of the
B. Non-Liability Coverage Parts
done so in accordance with SECTION II EXTENDED REPORTING PERIOD of the "Non-Liability
Coverage Parts".
III. DEFINITIONS
The following words, either in the singular or plural, shall have the meanings indicated below.
A. "Application" means:
1. The form titled "Application" submitted to request this "Policy", including any documents or other
2. All similar forms, including any material submitted with them, submitted to request previous policies
3. All other materials or information provided by the "Insured" for the underwriting or issuance of this
"Policy".
All such forms, documents and other materials shall be deemed a part of this "Policy" as if physically
attached to it.
B. "Claim" shall have the meaning as defined in the applicable "Coverage Part".
C. "Coverage Part" means individually or collectively the purchased "Coverage Parts" as set forth in Item 4. of
the "Policy" Declarations and attached hereto.
D. "Damages" shall have the meaning as defined in the applicable "Coverage Part".
E. "Defense Expense" shall have the meaning as defined in the applicable "Coverage Part".
F. "Executive" means any natural individual who is, was, or shall become:
1. Aduly-elected or appointed director, officer, manager, in-house general counsel, or trustee of the
2. Any past, present or future members of any duly-constituted commissions, boards, committees or other
Solely with respect to the "Non-Liability Coverage Parts", "Executive" shall have the meaning as defined in
G. "Insured Individual" means:
1. Any "Executive" of the "Insured Entity" while acting solely within the course and scope of employment
with the "Insured Entity" or while performing duties related to the conduct of the "Insured Entity",
2. Any past, present or future employees of the "Insured Entity" while acting solely within the course and
scope of employment by the "Insured Entity" or while pertorming duties related to the conduct of the
"Insured Entity";
3. Any natural individual providing volunteer services for the "Insured Entity" at the request of the "Insured
4. The estates, heirs, legal representatives or assigns of deceased individuals who were "Insured
6. The legal representatives or assigns of an "Insured Individual" in the event of the "Insured Individual's"
7. The lawful spouse of an "Insured Individual" under Paragraph G.4, but solely with respect to such
recovery for an alleged "Wrongful AcY', and not for any "Wrongful Act" actually or allegedly committed by
the spouse.
H. "Insured" shall have the meanings as defined in the applicable "Coverage Part"
Page 2 of 8
904-0001 08 09
I. "Insured Entity" means the "Named Insured" and any "Subsidiary".

J. "Liability Coverage Part"-means the Directors, Officers and Corporate Liability, Employment Practices
K. "Loss" shall have the meaning as defined in the applicable "Liability Coverage Part".
L. "Named Insured" means the entity designated in Item 1. of the "Policy" Declarations.
M. "Non-Liability Coverage Event' means the "Occurrence" which must be sustained or discovered in order to
invoke coverage.
N. "Non-Liability Coverage Part" means individually or collectively the Crime Coverage Parts and Kidnap
Random and Extortion Parts as set forth in Item 4. of the "Policy" Declarations.
O. "Occurrence" shall have the meaning as defined in the applicable "Non-Liability Coverage Part".
P. "Outside Entity" shall have the meaning as defined in the applicable "Coverage Part".
reclaimed.
T. "Subsidiary" means:
1. An entity in which the "Named Insured" or one of its "Subsidiaries" owns 50 percent or more of the
assets, liabilities, equity, or issued and outstanding stock on or before the inception of the,"Policy
Period"; or
2. An entity, subject to the terms of SECTION V.A. of the "Coverage Part", that the "Insured" forms or
U. "Wrongful Act" shall have the meaning as defined in the applicable "Liability Coverage Part".
IV. EXCLUSIONS
A. Pollution
1. The actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of
"Pollutants"; or
2. "Loss", cost or expense arising out of any request, demand, order or statutory or regulatory requirement
3. "Claim" by or on behalf of a governmental authority for "Damages" because of testing for, monitoring,
B. Nuclear
V. LIMITS OF LIABILITY AND RETENTIONS
A. Limits of Liability
1. Regardless of the number of "Insureds" involved, "Claims" made or individuals or entities making
"Claims", our liability under the "Policy" solely with respect to all "Liability Coverage Parts" is limited as
follows:
Page 3 of 8
904-0001 08 09
a. If the Combined Aggregate Limit of Liability as set forth in Item 3. of the Declarations is purchased,
b. If the Separate Aggregate Limit of Liability for each "Coverage Part" is purchased, the maximum
"Coverage Part' stated in Item 2. of the applicable "Coverage Part's" Declarations.
In the event a "Claim" is covered under more then one "Coverage ParY', and the Employment
c. "Defense Expenses" are included in the Limits of Liability specified in Item 2. of the applicable
applies.
2. Solely with the respect to the "Non-Liability Coverage Part", the maximum liability shall be the respective
Limit of Liability described in the applicable `Non-Liability Coverage Part".
B. Retentions
1. This "Policy" applies only to that part of covered "Loss" for each "Claim" which is in excess of the
2. You shall pay the Retentions.
3. Solely with respect to any "Liability Coverage Part", if different parts of a single "Claim" are subject to
4. Solely with respect to any "Non-Liability Coverage Part", if an "Insured" receives payment under another
A. With respect to "Claims" we defend we may:
1. Make any investigation of a "Claim" we deem necessary; and
2. Settle any resulting "Claim" provided that we have the "Named Insureds" written consent to settle,
Page 4 of 8
904-0001 08 09
B. If the "Named Insured" refuses to consent to the settlement of any "Claim" which we recommend and which
1. What we would have contributed to the settlement if you had consented to the settlement, including
2. 75 percent of such "Loss" excess of the amount for which the "Claim" could have been settled.
C. Our right and duty to defend, to continue to defend or to pay "Defense Expenses" under the "Policy" shall
A. No "Insured" will, except at that "Insured's" own expense, voluntarily make a payment, assume any
obligation, agree to a settlement or incur any expense related to a "Claim" without our consent.
B. If you receive a "Claim", you and any other involved "Insured" shall send us written notice of the "Claim",
C. You and any other involved "Insured" must:
1. Immediately send us copies of any demands, notices, summonses or legal papers received in
connection with the Claim";
2. Authorize us to obtain records and other information;
3. Cooperate with us in the investigation, defense or settlement of the "Claim"; and
4. Assist us, upon our request, in the enforcement of any right against any individual or entity which may
D. If you become aware of a "Wrongful AcY' or other circumstance that may subsequently give rise to a "Claim",
1. How, when and where the "Wrongful Act" took place; and
2. The names and addresses of any individuals and entities involved.
E. Any "Claim" arising out of a "Wrongful AcY' which is subsequently made against you shall be deemed to
It is not otherwise excluded by the terms of this "Policy"; and
2. We receive proper notice of the "Wrongful AcY' according to Paragraph D. above.
The date of mailing shall constitute the date that such notice was given and proof of mailing shall be
F. Solely with respect to the Crime Coverage Part, reporting of a "Coverage Event" shall be in accordance with
G. Solely with respect to the Kidnap/Ransom and Extortion Coverage Part, reporting of a "Coverage Event"
A. Cancellation and Non Renewal
1. We may not cancel this "Policy" except for failure to pay premium when due, in which case we will give
2. The "Named Insured" may cancel this "Policy" for itself and all other "Insureds" by written notice to us
3. We are not required to renew this "Policy". However, written notice of our intent to nonrenew this
"Policy" shall be sent to the "Named Insured" at least 60 days prior to expiration of the "Policy Period".
Page 5 of 8
904-0001 OS 09
4. Solely with respect to the "Non-Liability Coverage Parts", any Cancellation or Non Renewal shall be
Part'.
B. Representations and Application
By accepting this "Policy" you agree that:
1. The declarations and statements in the "Application" for this insurance "Policy" are your representations
2. The representations made in your "Application" are the basis of this "Policy" and are to be considered as
C. Legal Action Against Us
1. To join us as a party or otherwise bring us into a suit asking for "Damages" from an "Insured"; or
D. Change in Ownership, Control or Exposure
a. Another individual or entity or group of individuals or entities acquires more than 50 percent of the
assets of the "Named Insured"; or
b

"Named Insureds" directors or trustees; or
c. The "Named Insured" consolidates with or merges with another entity,

you shall notify us of the change described in the above Paragraphs a., b., or c., herein referred to as
2. If a Transaction occurs, coverage under this "Policy" shall continue until termination of the "Policy
Transaction.
3. If you fail to provide notice as described in D.1., coverage provided to the "Insured" under this "Policy"
4. The entire premium for this "Policy" shall be deemed fully earned upon the occurrence of a Transaction.
5. In the event of a Transaction, the "Named Insured" will have the right, upon payment of an additional
appropriate percentage of the premium, to an extension of coverage under the "Policy fora "Claim" first
AcY' occurring prior to the Transaction and otherwise covered by this "Policy". The 12-month period shall
Page 6 of 8
904-0001 08 09
E.
F.
G.
H.
I.
6. The rights contained in Paragraph D. shall terminate unless written notice of the election and the
7. In the event of a Transaction, the "Named Insured" has the right to purchase the Run-Off Period but has
8. The additional premium for the Run-Off Period shall be fully earned at the inception of the Run-Off
9. The Limit of Liability for the Run-Off Period is part of and not in addition to the Limit of Liability in Item 2.
Transfer of Rights of Recovery Against Others to Us
"Policy", we shall be subrogated to the event of such payment to all of your rights of recovery. You shall
Assignment
No change in, modification of or assignment of interest in this "Policy" shall be effective except when made
Sole Agent for the Insured
By accepting this "Policy, you agree that only the "Named Insured" is authorized to act on behalf of all
Canada.
2. All premiums, limits, Retentions, "Loss" and other amounts are expressed and payable in the currency
respectively.
3. Solely with respect to each Non-Liability Coverage Part, Coverage Territory and Valuation shall be in
accordance with the applicable Territory Section and Valuation and Settlement Section of each NanLiability Coverage Part.
Other Insurance
1. If other valid and collectible insurance is available to the "Insured" for "Loss" covered under this "Policy",
2. When this insurance is excess we have no duty to defend the "Insured" against any "Claim" if any other
3. When this insurance is excess over other insurance we will pay only our share of the amount of "Loss",
if any, that exceeds the sum of:
a. The total amount that all such other insurance would pay for the "Loss" in the absence of this
insurance;
b. The total of all deductibles, self-insurance and retentions under all that other insurance; and
c. Any indemnification available from an "Outside Entity" to an "Insured".
Page 7 of 8
904-0001 08 09
4. Method of Sharing
5. Solely with respect to each "Non-Liability Coverage Part", the application of Other Insurance shall be in
J. Two or More Policies, Coverage Parts, or Endorsements Issued by Us
It is our stated intention that this "Policy" and any other "Policy", "Coverage Part" or endorsement issued by
notwithstanding:
1. We shall not be liable under this "Policy" for a greater proportion of the "Loss" than the applicable Limit
2. The maximum amount payable under all such policies combined shall not exceed the highest applicable
K. Allocation
1. 100 percent of "Defense Expenses" on account of the "Claim" will be considered Covered "Loss"; and
2. We shall fairly allocate all remaining "Loss" that you incurred on account of such "Claim" between
Covered "Loss" and Uncovered "Loss" based upon the relative legal exposure of the parties to such
matters.
Page 8 of 8
904-0001 08 09

A. The following is added to SECTION VIII GENERAL CONDITIONS, Paragraph A. Cancellation and Non
5. Notices of cancellation or nonrenewal shall be sent by certified mail to the "Named Insured" at the last
on a pro rata basis of the existing `Policy".
6. We will mail notice of premium increase, change in deductible or reduction in limits or substantial
B. SECTION VIII GENERAL CONDITIONS, Paragraph B.3. of Representations and Application of the
3. Misrepresentations, omissions, concealment of facts and incorrect statements shall not prevent a
a. Fraudulent; or
b. Material either to the acceptance of the risk, or to the hazard assumed by us; or
c. We in good faith would either have not issued this "Policy", or would not have issued a "Policy" in as
large an amount, or would not have provided coverage with respect to the hazard resulting in the
otherwise.
904-0048 08 09
Page 1 of 1
A. The following is added to SECTION III DEFINITIONS of the Common Policy Terms and Conditions of
this "Policy":
1. "No Liability" means with respect to a "Claim" made against the "Insured(s)":
a. A final judgment of no liability obtained prior to the 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
b. A final judgment of no liability obtained prior to the trial, in favor of all "Insureds", after the exhaustion
of appeals.
In no event shall the term "No Liability" apply to a "Claim" made against an "Insured" for which a
B. The following is added to SECTION V LIMITS OF LIABILITY AND RETENTIONS of the Common Policy
1.
No Retention shall apply, even as to "Costs of Defense", to any "Claim" which is in the form of a civil
a. There is a determination of "No Liability"; or
b. The "Claim" is dismissed or stipulated dismissed without prejudice and without any payment of any
2. If a "Claim" is dismissed or stipulated dismissed without prejudice and without any payment by any
a. The "Claim" or any other "Claim" which together with such "Claim" would be deemed a single "Claim"
904-0503 08 09
Page 1 of 1
SUBLIMIT SPECIFIC ENDORSEMENT
The following is added to SECTION V LIMITS OF LIABILITY AND RETENTIONS of the Common Policy
Terms and Conditions Section of this "Policy":
The amount of $ 1,000,000 shall be the maximum aggregate Limit of Liability for all "Loss", solely with
respect to Endorsement 905-0319 of this "Policy", which amount shall be part of and not in addition to the
Limits of Liability stated in Item 2. of the applicable "Coverage Parts" Declarations.
904-0507 08 09
Page 1 of 1

NON-RESCINDABLE SIDE A AND B ENDORSEMENT
The following is added to SECTION VIII GENERAL CONDITIONS, Paragraph B. Representations and
Notwithstanding the foregoing, Insuring Agreements I.A. and I.B. of the Directors, Officers and Corporate
Liability Insurance Coverage Part of this "Policy" shall not be void as to any individuals) who did not know
as of the "Policy" inception date that such declarations and statements contained in the "Application(s)" were
untrue, inaccurate or incomplete.
904-0813 OS 09
Page 1 of 1
REVISED
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t~~s~~r~~i~c~ Csrocrpy
Private Company
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arli

TO ITS TERMS, THIS "COVERAGE PART" APPLIES ONLY TO "CLAIMS" FIRST MADE AGAINST THE "INSUREpS"
Item 1.
NAMED INSURED
Inc
Item 2.
LIMITS OF LIABILITY
$5,000,000 in the aggregate for all "Claims"
Item 3.
Item 4.
RETENTION
$0 each "Claim"
$50,000 each "Claim"

1. Insuring Agreements A and B: 05/01/2005
2. Insuring Agreements C: 05/01/2005
Item 5.
FORMS AND ENDORSI=MENTS

905-001
905-0319
905-0320
905-0432
905-0434
905-0002 08 09
(08-09)
(08-09)
(08-09)
(08-09)
(08-09)

Page 1 of 2
905-0002 08 09
Page 2 of 2

COVERAGE PART
RESTRICTIONS.
defined in SECTION III ADDITIONAL DEFINITIONS of this "Coverage Part". The words "we", "us" and "our"
Words that appear in quotation marks have special meaning. They are defined in SECTION III ADDITIONAL
'Insured" who provides incomplete or inaccurate information to us.
I. INSURING AGREEMENTS
A. Individual Non-Indemnified Liability
B. Individual Indemnified Liability
C. Corporate Entity Liability
D. Securityholder Derivative Demand Liability
Reporting Period, for any "Wrongful Act" in an amount not to exceed $100,000, which amount is part of
II. OPTIONAL EXTENDED REPORTING PERIOD
Refer to the Common Policy Terms and Conditions Section.
In addition to the Definitions listed in SECTION III - DEFINITIONS of the Common Policy Terms and
"Coverage Part":
A. "Claim" means:
Page 1 of 6
905-0001 08 09
1. Any written demand presented for monetary "Damages" or non-monetary relief fora "Wrongful Act";
or
2. Any complaint or similar pleading initiating a judicial, civil, administrative, regulatory, alternative
non-monetary relief fora "Wrongful AcY'.
agreement.
B. "Damages" means a monetary judgment, award or settlement, pre-judgment interest and post-judgment
2. Any "Wrongful AcY' occurred for which such "Damages" were awarded or imposed;
"Damages" does not include:
5. Commissions, bonuses, profit sharing or severance payments; or
6. Payment by the "Insured Entity" of allegedly inadequate price or consideration for the purchase of its
7. Civil, criminal or administrative fines, taxes or other penalties.
C. "Debtor in Possession" means a debtor in possession of the "Insured Entity" as such term is used in
D. "Defense Expenses" means and is limited to:
3. Up to $250 per day per "Insured Individual" for reasonable expenses incurred for attendance at
payment shall not exceed $5,000 in the aggregate for all "Insured Individuals" for each "Claim".
4. Salaries, wages, fees, overhead or benefit expenses associated with any "Insured" except as
5. Salaries, wages, overhead or benefit expenses associated with our employees.
E. "Insured Individual" means:
1. Any past, present or future "Executive"; and
2. Any natural individual serving as a director or officer of an "Outside Entity" at the direction of the
"Insured Entity".
F. "Insured" means the "Insured Entity" and any "Insured Individual". With respect to this "Coverage Part"
G. "Investigative Costs" means reasonable and necessary costs, charges, fees, including but not limited to
Page 2 of 6
905-0001 08 09
H. "Loss" means the amount the "Insured" is legally obligated to pay for "Damages" and "Defense Expenses"
1. Any amounts which an "Insured" is obligated to pay as result of a "Claim" seeking relief or redress in
any form other than monetary "Damages";
3. Wages or benefits or contributions payable under an "Employee Benefits Plan";
5. Any amount not indemnified by the "Insured Entity" for which an "Insured Individual" is absolved from
I.
6. Any amount allocated to non-covered "Loss" in accordance with SECTION VIII GENERAL
"Outside Entity" means any:
1. Nonprofit entity described in section 501(c)3 of the Internal Revenue Code of 1986, as amended, that
"Subsidiary"; and
2. Other entity, partnership, joint venture or other entity listed by endorsement to this policy.
"Personal Injury" means any actual or alleged:
1. Defamation of character, libel, slander, or publication of material in violation of a individual's right of
privacy; or
2. The wrongful entry or eviction or other invasion of the right of privacy; or

against any "Executive" fora "Wrongful AcY' by an "Executive".
O. "Wrongful AcY' means any actual or alleged act, error, omission, misstatement, misleading statement,
Page 3 of 6
905-0001 08 09

In addition to the Exclusions listed in SECTION IV - EXCLUSIONS of the Common Policy Terms and
This insurance does not apply to "Loss" on account of any "Claim" made against any "Insured":
A. Directly or indirectly based upon, arising out of, or attributable to an "Insured" gaining any profit,
B. Directly or indirectly based upon, arising out of, or attributable to any dishonest or fraudulent act or
"Insured"; or
C. Directly or indirectly based upon, arising out of, or attributable to any payments to an "Insured" of any
However, Paragraphs A., B., and C. above shall not apply unless a judgment or other final adjudication
D. Any "Personal Injury".
E. Any actual or alleged violation of the responsibilities, obligations or duties imposed by the Employee
F. Any "Claim" brought or maintained by, at the behest, or on behalf of any "Insured".
1. A "Claim" made and maintained totally independently of and totally without the solicitation,
assistance, participation or intervention of any "Executive"; or
2. A "Securityholder Derivative Demand" or "Securityholder Derivative Action"; or
3. A securityholder's "Claim" that is instigated and continued totally independent of, and totally without
4. Any "Claim" by any of the "Insured Individuals" for contribution or indemnity, if such "Claim" directly
G. Any "Wrongful Act", transaction, decision, fact, circumstance, situation or event which has been the
H. Any prior or pending litigation, administrative, or arbitration proceeding as of the Prior and Pending
I.
Any other "Wrongful AcY', whenever occurring, which together with a "Wrongful AcY' has been the subject
of a "Claim" or notice and would constitute "Related Wrongful Acts".
J. For any "Wrongful AcY' directly or indirectly based upon, arising out of, or attributable to service by any
position or capacity.
K. Any action brought or maintained by, at the behest, or on behalf of an "Outside Entity" or past, present, or
L. Based upon or arising out of or attributable to present or future actual or potential employment related
"Wrongful Act".
Page 4 of 6
905-0001 08 09
M. Directly or indirectly based upon, arising out of, resulting from or in consequence of, or in any way
N. "Loss" on account of any "Claim" made against any "Insured" directly or indirectly based upon, arising out
agreement.
O. Directly or indirectly based upon, arising out of, or attributable to:
P. Directly or indirectly based upon, arising out of or attributable to the performance of any professional
A "Claim" against an "Insured" fora "Wrongful AcY' by such "Insured" in connection with the
2. A "Security Holder Derivative Demand" or "Securityholder Derivative Action".
Q. Any actual or alleged violation of any "Securities Laws", provided that this exclusion shall not apply to any
"Claim":
1. Based upon or arising out of the offering, sale or purchase of securities, whether debt or equity, in a
thereunder; or
2. Made by any securityholder of the "Insured Entity" for the failure of the "Insured Entity" to undertake
or complete the initial public offering or sale of securities of the "Insured Entity".
R. Directly or indirectly based upon, arising out of, or attributable to anti-trust violations or unfair business
common law.
V. ADDITIONAL GENERAL CONDITIONS
In addition to the conditions listed in SECTION VIII GENERAL CONDITIONS of the Common Policy
A. Acquisition and Formation of Subsidiaries
If after the inception of the "Policy Period" the "Insured Entity" acquires or forms a "Subsidiary" or
assumes more than 50% of the assets, liabilities, or equity of, or obtains the right to elect or select a
Page 5 of 6
905-0001 OS 09
formed "Subsidiary" exceed twenty-five percent (25%)of the total assets of the "Insured Entity" as of
3. If the "Named Insured" does not comply with the conditions in Paragraph A. above, coverage under
A. Notwithstanding anything in the "Policy" to the contrary, the Additional Excess Limit of Liability Dedicated
for "Executives", shall be an additional excess aggregate Limit of Liability not to exceed $500,000 which
B. The Additional Excess Limit of Liability Dedicated for "Executives" is available solely for "Loss" resulting
C. The Additional Excess Limit of Liability Dedicated for "Executives" shall be excess of any insurance
available that is specifically excess to this "Policy", and such excess insurance must be completely
exhausted by payment of "Loss", "Damages" or "Defense Expenses" thereunder before we shall have any
obligation to make any payment on account of the Additional Excess Limit of Liability Dedicated for
"Executives".
Page 6 of 6
905-0001 OS 09

A. The following is added to SECTION III ADDITIONAL DEFINITIONS, Paragraph E. "Insured Individual" of
the Directors, Officers and Corporate Liability Insurance Coverage Part of this "Policy":
B. The following is added to SECTION III ADDITIONAL DEFINITIONS of the Directors, Officers and
C. The following is added to SECTION III ADDITIONAL DEFINITIONS, Paragraph O. "Wrongful AcY' of the
"Employed Lawyer":
2. Which is not rendered on behalf of the "Insured Entity" at the "Insured Entity's" written request; or
a. "Wrongful Act" occurring at the time when the "Employed Lawyer" was not employed as a lawyer for
Lawyer", as of such date, knew or reasonably could have foreseen that such "Wrongful AcY' could
c. Activities by an "Employed Lawyer" as a director, officer, trustee or governor of any entity other then
D. The following is added to SECTION VIII GENERAL CONDITIONS of the Common Policy Terms and
905-0319 08 09
Page 1 of 1

The following is added to SECTION III ADDITIONAL DEFINITIONS, Paragraph E. "Insured Individual" of the
seeks as recovery for an alleged "Wrongful AcY', and not for any "Wrongful Acts" actually or allegedly
905-0320 08 09
Page 1 of 1

The following is added to: SECTION IV ADDITIONAL EXCLUSIONS, Paragraph F. of the Directors, Officers
and Corporate Liability Insurance Coverage Part of this "Policy":
1. Any "Claim" by any "Employee" of the "Insured Entity" pursuant to any federal or state whistleblower
2. Any "Claim" in any bankruptcy proceeding by or against the "Insured Entity" thereof, brought by the
3. Any "Claim" by any of the "Insured Individuals" of the "Insured Entity" who has not served in that capacity
905-0432 08 09
Page 1 of 1

SECTION IV ADDITIONAL EXCLUSIONS of the Directors, Officers and Corporate Liability Insurance
905-0434 08 09
Page 1 of 1
REVISED
i~,~
l~~~urar~c~ C~rc~ti~..
Private Company
~r
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Item 1.
NAMED INSURED
Inc

Item 2.
LIMITS OF LIABILITY
Item 3.
RETENTION
Insuring Agreement A: Employment Practices Liability Coverage
Item 4.

Insuring Agreement A: Employment Practices Insurance Coverage Part:
05/01/2005
Item 5.

906-0001
906-0303
906-0314
906-0404
(08-09)
(08-09)
(08-09)
(08-09)
906-0901
(01-14)

Expense Sublimit
Employment Practices Risk Management Policyholder Notice
COVERAGE PARTS)AND ANY ENDORSEMENT(S), COMPLETE THE ABOVE-NUMBERED "POLICY".
906-0002 08 09
Page 1 of 1

I. INSURING AGREEMENT
first made against you during the "Policy Period" and reported to us for any "Wrongful AcY' to which this
insurance applies.
II. EXTENDED REPORTING PERIOD
Refer to SECTION II OPTIONAL EXTENDED REPORTING PERIOD of the Common Policy Terms and
Conditions Section.
"Coverage Part":
A. "Claim" means:
1. Any written demand presented for monetary "Damages" or non-monetary relief fora "Wrongful Act";
or
non-monetary relief fora "Wrongful Act".
All "Claims" made on account of a single "Wrongful AcY' shall be treated as a single "Claim" first made on
B. "Damages" means a monetary judgment, award or settlement, pre-judgment interest and post-judgment
Page 1 of 5
906-0001 08 09
C. "Defense Expense" means and is limited to:
Such payment shall not exceed $5,000 in the aggregate for all "Insureds" on each "Claim".
5. Salaries, wages, overhead or benefit expenses associated with your "Employees".
D. "Employee" means:
1. A natural individual employed by and directed by the "Insured Entity", including any part-time, leased,
temporary or seasonal "Employees"; or
2. An individual who is a volunteer, intern, committee or staff member or independent contractor for the
An individual's employment status shall be determined as of the date of the "Wrongful Act".
E. "FRIBA" means the Employee Retirement Income Security Act of 1974, as amended, any similar federal,
F. "Insured" means the "Insured Entity" and any "Insured Individual".
G. "Loss" means the amount the "Insured" is legally obligated to pay for "Damages" and "Defense Expenses"
1. Civil, criminal or administrative fines, taxes or other penalties;
3. Any future wages or benefits of any reinstated "Employee" or wages or benefits associated with the
5. Benefits or contributions payable under an employee benefits plan;
7. Any amount not indemnified by the "Insured Entity" for which an "Insured" is absolved from payment
H. "Related Wrongful Acts" means "Wrongful Acts" which are logically or causally connected by reason of
I. "Wrongful Act" means:
With respect to any "Claim" brought by or on behalf of your "Executives", "Employees", or applicants for
employment, any actual or alleged:
Page 2 of 5
906-0001 08 09
1. Wrongful dismissal, discharge or termination of employment, including constructive termination,

2. Breach of an implied contract or agreement relating to employment;
3. Wrongful failure to employ or promote;
4. Wrongful demotion, denial of tenure or practice privileges or deprivation of a career opportunity;
5. Negligent supervision, training, evaluation, reassignment, hiring or retention;
6. Negligent failure to adopt or enforce employment-related policies and procedures by an "Insured
Entity";
7. Employment related wrongful discipline;
8. Employment discrimination or violation of any employment discrimination law;
9. Disparate treatment of or failure or refusal to hire a claimant because he or she is or claims to be a
10. Employment-related invasion of privacy, false arrest or false imprisonment;
11. Employment-related defamation, libel or slander, including statements in an "Employee" reference;
12. Employment-related wrongful infliction of emotional distress, mental anguish or humiliation;
13. Employment-related misrepresentation;
14. Sexual or other workplace harassment of any kind, including any unwelcome sexual or non-sexual
15. Retaliation against an "Executive" or "Employee" arising out of employment by or services performed
16. Violation of any federal, state or local civil rights laws committed or attempted by an "Insured" in his or
Any series of "Wrongful Acts" that are connected by reason of a common claimant, transaction, policy, action,
omission or decision are a single "Wrongful AcY'.
In addition to the Exclusions listed in SECTION IV - EXCLUSIONS. of the Common Policy Terms and
A. This insurance does not apply to "Loss" on account of any "Claim" made against any "Insured" directly or
that property and "Loss" of use of property that is not physical injured;
2. Bodily injury, disability, sickness, disease, death, assault or battery sustained by any person.
"Wrongful Acts";
3. Any actual or alleged violation of the responsibilities, obligations or duties imposed by "FRIBA";
4. Obligations or payments owed under:
a. An express written or verbal contract of employment. However, this exclusion does not apply to
c. An agreement to assume another's liability. However, this exclusion does not apply to the liability
agreement.
Page 3 of 5
906-0001 08 09
5. Any "Wrongful AcY', transaction, decision, fact, circumstance or situation which has been the subject
6. Any other "Wrongful Act", whenever occurring, which together with a "Wrongful AcY' has been the
order;
10. Any violation of any of the responsibilities, obligations, or duties imposed by any federal, state or
above laws; or
statutory or common law, including but not limited to the Fair Labor Standards Act, as amended or
treatment against any "Insured" who is attempting to exercise his or her rights under the above
B. This insurance does not apply to "Loss" on account of any "Claim" made against any "Insured":
1. For unpaid wages or overtime pay for hours actually worked or labor actually performed by any
Page 4 of 5
906-0001 08 09
V. ADDITIONAL GENERAL CONDITIONS

If after the inception of the "Policy Period" the "Insured Entity" acquires or forms a "Subsidiary' or assumes
directors or trustees of an entity, coverage under this "Coverage Part"" shall apply to the "Subsidiary" only if
A. If, at the time of the formation or acquisition described above:
B. If, at the time of the formation or acquisition described above:
"Insured Entity" as of the beginning of the "Policy Period;" or
"Coverage Part" for the "Subsidiary" shall terminate 60 days after the acquisition or formation of the
"Subsidiary".
Page 5 of 5
906-0001 08 09

The following is added to SECTION III ADDITIONAL DEFINITIONS , Paragraph A."Claim" of the Employment
"Claim" also means:
illegal aliens. We will pay up to, but in no event greater than $ 50.000 for any such "Loss". Any "Loss" paid
by us under this endorsement shall be part of and not in addition to the Limits of Liability stated in Item 2. of
the Declarations.
906-0303 08 09
Page 1 of 1

The following is added to SECTION III ADDITIONAL DEFINITIONS, Paragraph I. "Wrongful AcY' of the
leased worker, temporary worker, or independent contractor, business invitee or other client of the "Insured
Entity".
906-0314 08 09
Page 1 of 1

SUBLIMIT
SECTION IV ADDITIONAL EXCLUSIONS, Paragraph A.12. of the Employment Practices Liability
Insurance Coverage Part of this "Policy" is deleted and replaced with the following:
statutory or common law, including but not limited to the Fair Labor Standards Act, or amendments to or
regulation or order.
We will pay "Defense Expenses" up to, but in no event greater than $ 50,000 ,for any such "Claim," without
any liability by us to pay such sums that any "Insured" shall become legally obligated to pay as "Damages".
906-0404 08 09
Page 1 of 1
pY
IMPORTANT POLICYHOLDER INFORMATION

EMPLOYMENT PRACTICES RISK MANAGEMENT HOTLINE
We are pleased to inform you of the following employment practices risk management resources, which are
accessible to you as a Hanover policyholder.
The Hanover has teamed up with Jackson Lewis P.C., a national Employment Practices and Labor Relations law
firm to provide expert risk management services. Our policyholders have access to an exclusive hotline where
experienced employment attorneys are prepared to assist and address your employment related questions. The
dedicated telephone number for Hanover policyholders is:
1-866-758-6874
This hotline is made accessible to assist our policyholders on a broad range of employment related subjects such
as forms of harassment, insubordination, wage and hour issues, leaves of absence, immigration processes,
employment-at-will concepts and employment issues outside the U.S.
This service is not intended to provide a determinative answer regarding specific employment situations or issues
that are more appropriately addressed with legal counsel. Such situations would include specific personnel
actions, current or prior Equal Employment Opportunity Commission ("EEOC") investigations, employee
performance, compliance with state or federal employment statutes, employment contracts or benefits
administration.
When calling the hotline, the caller will be asked to provide his or her name, the name of the company on the
Hanover policy, the policy number as well as the caller's email address, mailing address and telephone number.
The nature of the discussions on the hotline will not be shared with the Hanover. However, for informational
purposes, Jackson Lewis will provide Hanover with a list of callers and time spent on the call.
As a reminder, whenever you become aware of a current or potential claim you should also immediately give
notice to Hanover in accordance with the policy terms and conditions.
Since its founding in 1958 Jackson Lewis, a national firm employing roughly 600 labor and employment lawyers,
has exclusively represented management in cases involving a full spectrum of workplace law issues. You can
learn more about the firm and access additional information through their website at www.iacksonlewis.com
Please note that the independent risk management services offered by Jackson Lewis P.C. are accessible to you
as a policyholder of The Hanover Insurance Company or one of its subsidiaries and affiliates. The Hanover is
independent from Jackson Lewis P.C. and is not responsible for any fees or charges you may incur for services or
products which may be offered to you, or for which you may contract with Jackson Lewis P.C. Under no
circumstances should the recommendations, services or products of Jackson Lewis P.C. be construed as
recommendations, services or products of The Hanover Insurance Group, Inc. By making this service provider
accessible to you, The Hanover does not assume (and specifically disclaims) any duty, undertaking or
responsibility to you regarding the employment risk management services of Jackson Lewis P.C.
906-0901 01 14
Page 1 of 1
REVISED
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C~r~~i~..
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Private Company
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~

Item 1.
NAMED INSURED
Inc
Item 2.
LIMITS OF LIABILITY (Inclu sive of Damages and Defense Expenses)

Item 3.
RETENTIONS
Insuring Agreement A: Fiduciary Liability Coverage:
$0 each "Claim"
Insuring Agreement B: Compliance Resolution Penalties Coverage: $0 each "Claim"
Item 4.
Item 5.

1.
Insuring Agreements A:
05/01/2005
2.
Insuring Agreements B:
05/01/2005

907-0001
907-0002 08 09
(08-09)
Page 1 of 2
907-0002 08 09
Page 2 of 2

I. SECTION I INSURING AGREEMENT
A. Fiduciary Liability Coverage
- DUTIES IN THE EVENT OF WRONGFUL ACTS OR CLAIMS of the Common Policy Terms and
B. Compliance Resolution Penalties Coverage
We will pay "Compliance Resolution Penalties" up to, but in no event greater than $25,000, for any such
Declarations.
II. SECTION II EXTENDED REPORTING PERIOD
Refer to the Common Policy Terms and Conditions Section.
III. SECTION III ADDITIONAL DEFINITIONS
"Coverage Part":
A. "Administration" means:
1. Providing interpretations and giving counsel to employees, beneficiaries or participants regarding any
2. Handling records in connection with any "Insured Benefit Plan"; or
3. Effecting enrollment, termination or cancellation of employees or participants under any "Insured
Benefit Plan".
B. "Claim" means:
1. Any written demand presented for monetary "Damages" or non-monetary relief fora "Wrongful AcY'
non-monetary relief fora "Wrongful Act"; or
Page 1 of 5
907-0001 08 09
3. A written notice of afact-finding investigation by a federal, state or local government agency,

including but not limited to, the U.S. Department of Labor or the U.S. Pension Benefit Guaranty
Corporation.
agreement.
C. "Compliance Resolution Penalties" shall mean fines, penalties, sanctions, voluntary correction fees,
D. "Damages" means a monetary judgment, award or settlement, pre-judgment interest and post-judgment
2. Any "Wrongful AcY' occurred for which such "Damages" were awarded or imposed;
E. "Defense Expenses" means and is limited to:
"Insured Individual". Such payment shall not exceed $5,000 in the aggregate for all "Insured
5. Salaries, wages, overhead or benefit expenses associated with our employees.
F. "FRIBA" means the Employee Retirement Income Security Act of 1974, as amended, any similar federal,
state, local or common law, and any rules and regulations promulgated under it.
G. "Insured Benefit Plan" means:
1. Any Employee Welfare Benefit Plan, as defined by "FRIBA", which was, is now or becomes
2. Any Employee Welfare Pension Plan or Pension Plan, as defined by "FRIBA", which is operated
3. Any Employee Pension Benefit Plan or any other pension plan, as defined by "FRIBA", created or
a. Provided written notice to us of such newly-created Employee Pension Benefit Plan; and
Page 2 of 5
907-0001 08 09
b. Agreed to any additional terms and paid any additional premium we require.
4. Any other Employee Benefit Plan or program not subject to "FRIBA" by endorsement which is
Benefit Plan".
"Insured Benefit Plan" does not include any Employee Stock Ownership Plans or multi-employer plan.
H. "Insured Individual" means:
1. Any executive of the "Insured Entity";
2. Any past, present or future employees of the "Insured Entity" or "Insured Benefit Plan", but only while
3. The estates, heirs, legal representatives or assigns of deceased individuals who were "Insured
4. The legal representatives or assigns of an "Insured Individual" in the event of the "Insured
Individual's" incompetence, insolvency or bankruptcy.
I. "Insured" means the "Insured Entity", the "Insured Benefit Plan" and any "Insured Individuals".
J. "Loss" means the amount the "Insured" is legally obligated to pay for "Damages" and "Defense Expenses"
1. Civil, criminal or administrative fines, taxes or other penalties, except the five percent (5%)or less, or
the twenty percent (20%) or less, fines or penalties imposed under Section 502 (i) and (I) of "FRIBA"
respectively;
4. Benefits or contributions payable under an "Insured Benefit Plan";
6. Any amount not indemnified by the "Insured Entity" for which an "Insured Individual" is absolved from
L. "Wrongful Act" means any actual or alleged:
"FRIBA" or the common or statutory law of the United States;
Plan".
Page 3 of 5
907-0001 08 09
Any series of "Wrongful Acts" that are connected by reason of a common claimant, transaction, policy,
action, omission or decision are a single "Wrongful AcY'.
IV. SECTION IV ADDITIONAL EXCLUSIONS
In addition to the Exclusions listed in SECTION IV - EXCLUSIONS of the Common Policy Terms and
This insurance does not apply to:
A. "Loss" on account of any "Claim" made against any "Insured" directly or indirectly based upon, arising out
of, or attributable to:
1. Such "Insured" gaining any profit, remuneration or advantage to which such "Insured" was not legally
entitled; or
2. Any dishonest or fraudulent act or omission, any criminal act or omission or any willful violation of any
3. Any payments to an "Insured" of any remuneration without the previous approval of the security
been illegal.
However, Paragraphs 1., 2., and 3. above shall not apply unless a judgment or other final adjudication
4. The physical injury to or destruction of any tangible property, including all resulting loss of use of that
5. Bodily injury, disability, sickness, disease, death, assault or battery sustained by any individual.
6. The wrongful entry, eviction, false arrest, false imprisonment or detention, malicious prosecution,
or disparaging material.
7. Any actual or alleged discrimination, retaliation or wrongful termination of employment; provided,
however, this exclusion shall not apply to "Claims" asserted under Section 510 of "FRIBA".
8. Any "Wrongful Act", transaction, decision, fact, circumstance or situation which has been the subject
9. Any other "Wrongful AcY', whenever occurring, which together with another "Wrongful AcY' has been
10. Any liability of others assumed under any contract or agreement. However, this exclusion does not
apply to:
a. Liability you would have had in the absence of the agreement; or
B. "Loss" on account of any "Claim" made against any "Insured":
Plan",
Page 4 of 5
907-0001 08 09
2. For the costs of compliance with any order for, grant of, or agreement to provide non-monetary relief;
or
3. To the extent such "Loss" constitutes benefits due or to become due under an "Insured Benefit Plan",
a. The benefits are payable by an "Insured Individual" as an individual obligation; and
b. Recovery for the benefits is based on a covered "Wrongful Act".
However, we will provide a defense of any such "Claim", without any liability by us to pay such sums that
No fact pertaining to or knowledge possessed by or "Wrongful AcY' of any "Insured Individuals" shall be
imputed to any other "Insured Individuals" for the purpose of determining the applicability of the exclusions
listed above.
V. SECTION V ADDITIONAL GENERAL CONDITIONS
A. Acquisition or Formation of Subsidiaries
or assumes more than fifty percent(50%)of the assets, liabilities, or equity of, or obtains the right to elect
2. If at the time of the acquisition or formation described above, the total assets of the acquired or
formed "Subsidiary" exceeds twenty-five percent(25%)of the total assets of the "Insured Entity" as of
3. If the "Named Insured" does not comply with the conditions in Paragraphs 1. and 2., coverage under
Page 5 of 5
907-0001 08 09
REVISED
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rrivate Company
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CRIME INSURANCE
PLEASE READ THIS "COVERAGE PART" CAREFULLY TO DETERMINE RIGHTS, DUTIES, COVERAGE AND COVERAGE
RESTRICTIONS.
Inc
Item 2. INSURING AGREEMENTS, LIMITS OF LIABILITY, AND RETENTIONS AMOUNTS
INSURING AGREEMENTS
A. Employee Theft
B. ERISA Fidelity
C. Employee Theft of Ciient Property
LIMIT OF LIABILITY
$ Per Occurrence
$2,000,000
$2,000,000
$2,000,000
$2,000,000
RETENTION AMOUNT
$Per Occurrence
$0 each "Claim"
Premises)
$2,000,000
$2,000,000
$2,000,000
H. Computer Crime
1. Computer Fraud
$2,000,000
2. Computer Program and Electronic Data
$10,000
$1,000 each "Claim"
Restoration Expense
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$10,000
$1,000 each "Claim"
$0 each "Claim"
$25,000
If "Not Covered" is inserted above opposite any specified Insuring Agreement or if no amount is included in the Limit of
908-0001
908-0035
908-0002 08 09
(08-09)
(08-09)

Page 1 of 2

By acceptance of this "Coverage Part' you are deemed to have given us notice canceling prior policy Nos.
LHF 8827059 03; the cancellation to be effective at the time this "Coverage Part" becomes effective.
908-0002 08 09
Page 2 of 2

DISCOVERY FORM
Various provisions in this "Coverage Part" restrict coverage. Read the entire "Coverage Part" carefully to
All words that appear in quotation marks have special meaning. They are defined in SECTION III ADDITIONAL
Crime Insurance
of time provided in SECTION II EXTENDED PERIOD TO DISCOVER LOSS of this "Coverage Part". If the
A. Employee Theft
We will pay you for loss of or damage to "Property" directly caused by "Theft" committed by an
"Employee", whether identified or not, acting alone or in collusion with other persons.
For the purposes of this Insuring Agreement, "Theft' shall also include "Forgery".
B. ERISA Fidelity
We will pay you for loss of or damage to "Property" directly caused by fraudulent or dishonest acts
committed by an employee of any "Employee Benefit Plan", whether identified or not, acting alone or in
We will pay you for loss of or damage to "Property" sustained by your "Client" directly caused by "Theft"
committed by an identified "Employee" not in collusion with such "Clients" employees.
1. We will pay you for loss directly caused by "Forgery" or alteration of checks, drafts, promissory notes,
a. Made or drawn by or drawn upon you; or
b. Made or drawn by one acting as your agent,
or that are purported to have been so made or drawn.
2. If you are sued for refusing to pay any instrument covered in Paragraph D.1. on the basis that it has
E. Theft of Money and Securities (Inside the Premises)
1. We will pay you for loss of "Funds" inside the "Premises" or "Banking Premises":
Page 1 of 17
908-0001 08 09
a. Directly caused by "Theft" committed by a person present inside such "Premises" or "Banking
Premises"; or
b. Directly caused by disappearance or destruction.
2. We will pay you for loss from damage to the "Premises" or its exterior directly caused by an actual or
attempted "Theft" of "Funds", if you are the owner of the "Premises" or are liable for damage to it.
3. We will pay you for loss of or damage to a locked safe, vault, cash register, cash box or cash drawer
F. Robbery or Safe Burglary of Other Property (Inside the Premises)
1. We will pay you for loss of or damage to "Other Property":
a. Inside the "Premises" directly caused by an actual or attempted "Robbery" of a "Custodian"; or
2. We will pay you for loss from damage to the "Premises" or its exterior directly caused by an actual or
3. We will pay you for loss of or damage to a locked safe or vault located inside the "Premises" directly
1. We will pay you for loss of "Funds" while in transit outside the "Premises" in the care and custody of a
"Messenger", including while temporarily within the living quarters of a "Messenger" or an armored
2. We will pay you for loss of or damage to "Other Property" while in transit outside the "Premises" in the
3. We will pay you for loss of or damage to "Other Property" directly caused by an actual or attempted
H. Computer Crime
1. Computer Fraud
fraudulently cause a transfer of that "Property" from inside the "Premises" or "Banking Premises":
a. To a person (other than a "Messenger") outside those "Premises"; or
b. To a place outside those "Premises".
2. Computer Program and Electronic Data Restoration Expense
a. Only to "Computer Programs" and "Electronic Data" which you own or for which you are legally
liable; and
b. Only if you are unable to reproduce such "Computer Programs" or "Electronic Data" from back-up
data copies.
Page 2 of 17
908-0001 08 09
If a loss is covered under Insuring Agreements H.1. and H.2., then only the Retention for a loss under
Agreement H.1..
I.

We will pay you for loss of "Funds" directly caused by a "Fraudulent Instruction" directing a financial
We will pay you for loss of or damage to "Property" directly caused by "Credit, Debit or Charge Card
We will pay you for loss directly caused by your having accepted in good faith, in exchange for
merchandise,"Money" or services:
1. Money orders issued by any post office, express company or bank that are not paid upon
presentation; or
2. "Counterfeit Money" that is acquired during the regular course of business.
a. Drawn upon personal accounts of your "Executive" or that are purported to have been so drawn;
or
b. Made or drawn by one acting as an agent of your "Executive", or that are purported to have been
so made or drawn.
We will reimburse you, on behalf of your "Executive", for "Identity Fraud Expense" incurred by an
1. We will pay you for "Investigative Expenses" to determine the amount of loss covered under any
2. We will pay you for "Investigative Expenses" after settlement of covered loss.
3. We will have no liability to pay any such "Investigative Expenses" if the amount of the covered loss
the Declarations.
4. The amount that we will pay is part of, not in addition to the Limit of Liability for the applicable Insuring
Agreement as set forth in Item 2. of the Declarations.
II. EXTENDED PERIOD TO DISCOVER LOSS
We will pay you for loss described in SECTION I INSURING AGREEMENTS that you sustained prior to the
A. No later than 90 days from the date of that cancellation.
B. No later than 1 year from the date of that cancellation with regard to any "Employee Benefit Plans."
C. However, this extended period to "Discover" loss terminates immediately upon the effective date of any
Page 3 of 17
908-0001 08 09
In addition to the Definitions listed in SECTION III DEFINITIONS of the Common Policy Terms and
"Coverage Part":
A. "Banking Premises" means the interior of that portion of any building occupied by a banking institution or
B. "Client' means an entity specifically scheduled as "Client" by endorsement to this "Coverage Part" for
C. "Client's Premises" means the interior of that portion of any building your "Client" occupies in conducting
its business.
D. "Computer Program" means a set of related electronic instructions which direct the operations and
E. "Computer System" means a computer and all input, output, processing, storage and communication
F. "Computer Violation" means:
1. A "Computer Virus" designed to damage or destroy a "Computer Program" or "Electronic Data"; or
2. Vandalism by a natural person, including an "Employee" who has gained unauthorized access to your
"Computer System."
G. "Computer Virus" means a set of unauthorized instructions, programmatic or otherwise:
H. "Counterfeit Money" means an imitation of "Money" that is intended to deceive and to be taken as
genuine.
I. "Credit, Debit or Charge Card Fraud" means the "Forgery" or alteration of, on or in, any written instrument
J. "Custodian" means you, or any of your partners or "Members", or any "Employee" while having care and
janitor.
K. "Digital Signature" means an electronic identifier created by computer, within, attached to, or logically
L. "Discover", "Discovered" or "Discovery" means the time when an "Executive" first becomes aware of facts
"Discover", "Discovered" or "Discovery" also means the time when you or an "Executive" first receive
M. "Electronic Data" means facts or information converted to a form usable in a "Computer System":
1. Which does not provide instructions or directions to a "Computer System"; or
2. Which is stored on electronic processing media for use by a "Computer Program".
N. "Electronic Signature" means a "Digital Signature", an electronic sound, symbol or process, within,
sign the record.
O. "Employee" means:
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908-0001 08 09
a. While in your service and for the first 60 days immediately after termination of service, unless
b. Who you compensate directly by salary, wages or commissions; and
c. Who you have the right to direct and control while performing services for you;
2. Any natural person who is furnished temporarily to you:
a. To substitute for a permanent "Employee" as defined in Paragraph 0.1. who is on leave; or
b. To meet seasonal or short-term work load conditions
3. Any natural person who is leased to you under a written agreement between you and a labor leasing
firm, to perform duties related to the conduct of your business, but does not mean a temporary
4. Any natural person who is:
a. A trustee, officer, employee, administrator or manager, except an administrator or manager who
b. A director or trustee of yours while that person is engaged in handling "Funds" or "Other
a. Who is a former "Employee", partner, "Member", "Manager", "Executive" retained as a consultant
b. Who is anon-compensated officer; or
c. While acting as anon-compensated fund solicitor during fund raising campaigns; or
6. Any attorney retained by you, while performing legal services for you.
7. Any "Employee" of an entity merged or consolidated with you prior to the effective date of this
"Policy"; or
8. Any of your "Managers", directors or trustees while:
a. Pertorming acts within the scope of the usual duties of an "Employee"; or
on your behalf.
contractor or representative of the same general character not specified in Paragraph O.
P. "Employee Benefit Plan" means any welfare or pension benefit plan that you sponsor and which is subject
to the Employee Retirement Income Security Act of 1974(FRIBA) and any amendments thereto.
R. "Forgery" means the signing of the name of another person or organization with intent to deceive; it does
not mean a signature which consists in whole or in part of one's own name signed with or without
authority, in any capacity, for any purpose.
S. "Fraudulent Instruction" means:
1. An electronic, telegraphic, cable, teletype, telefacsimile or telephone instruction which purports to
2. A written instruction (other than those described in Insuring Agreement I.D. of this "Coverage Part")
your knowledge or consent; or
Page 5 of 17
908-0001 08 09
3. An electronic, telegraphic, cable, teletype, telefacsimile, telephone or written instruction initially

T. "Funds" means "Money" and "Securities".
U. "Identity Fraud" means the act of knowingly transferring or using, without lawful authority, a means of
V. "Identity Fraud Expense" means:
1. Costs of notarizing fraud affidavits or similar documents for credit agencies, financial institutions,
merchants or other credit grantors that have required that such a~davits be notarized;
2. Costs for certified mail to law enforcement agencies, credit agencies, financial institutions, merchants
or other credit grantors;
3. Costs for long distance telephone calls to law enforcement agencies, credit agencies, financial
institutions, merchants or other credit grantors to report or discuss any actual "Identity Fraud";
4. Lost wage, up to a maximum payment of $1,000.00 per week for a maximum period of 5 weeks, as a
a. To communicate with law enforcement agencies, legal counsel, credit agencies, financial
b. To complete fraud affidavits or similar documents; or
c. Due to wrongful incarceration arising solely from someone having committed a crime in the
5. Loan application fees for reapplying for a loan or loans when the original application is rejected solely
6. Reasonable attorney fees incurred, with our prior written consent, for:
a. Defense of lawsuits brought against your "Executive" by financial institutions, merchants, other
b. The removal of any criminal or civil judgments wrongly entered against your "Executive"; or
c. Challenging the accuracy or completeness of any information in a consumer credit report; and
7. Costs for daycare and eldercare incurred solely as a direct result of any "Identity Fraud" "Discovered"
"Identity Fraud Expense" does not include any expense or loss not listed in Paragraphs 1. through 7. of
this definition.
W. "Insured" means:
1. With respect to Insuring Agreement I.B., any "Employee Benefit Plans" only; or
2. With respect to all other Insuring Agreements, the "Named Insured" defined in Item 1. of the
Declarations.
X. "Investigative Expenses" means reasonable and necessary expenses (expenses other than internal
establish the amount of a covered loss.
"Investigative Expenses" shall not include expenses incurred by any "Client'.
Y. "Manager" means a person serving in a directorial capacity for a limited liability company.
Z. "Member" means an owner of a limited liability company represented by its membership interest, who
AA. "Messenger" means you, or a relative of yours, or any of your partners or "Members", or any "Employee"
BB. "Money" means:
Page 6 of 17
908-0001 08 09
CC. "Occurrence" means:

1. Under Insuring Agreements I.A., I.B., and I.C. of this "Coverage Section":
a. An individual act;
b. The combined total of all separate acts whether or not related; or
c. A series of acts whether or not related,
committed by an "Employee" acting alone or in collusion with other persons, during the "Policy
2. Under Insuring Agreement I.D. of this "Coverage Section":
a. An individual act;
b. The combined total of all separate acts whether or not related; or
c. A series of acts whether or not related,
committed by a person acting alone or in collusion with other persons, involving one or more
instruments, during the "Policy Period" shown in the Declarations, before such "Policy Period" or
both.
3. Under all other Insuring Agreements:
a. An individual act or event;
b. The combined total of all separate acts or events whether or not related; or
c. A series of acts or events whether or not related,
committed by a person acting alone or in collusion with other persons, whether identified or not,
DD. "Other Property" means any tangible property other than "Money" and "Securities" that has intrinsic value.
"Other Property" does not include "Computer Programs", "Electronic Data", or "Computer Systems".
"Other Property" also does not include any property specifically excluded under this "Coverage Part".
FF. "Property" means "Money", "Securities", or "Other Property".
"Restoration Expense" does not include:
1. Your internal corporate costs and expenses, including "Employee" remuneration and any costs
related to any legal action;
2. Expenses incurred as a result of the reconstruction of "Computer Programs" or "Electronic Data"
"Premises";
3. Expenses incurred as a result of the reconstruction of "Computer Programs" and "Electronic Data" if
4. Expenses incurred to render the "Computer Programs" and "Electronic Data" usable by replacement
5. Expenses incurred to design, update or improve "Computer Programs" or "Electronic Data" or to
HH. "Robbery" means the unlawful taking of "Property" from the care and custody of a person by one who
has:
Page 7 of 17
908-0001 08 09
1. Caused or threatened to cause that person bodily harm; or

1. "Property" from within a locked safe or vault by a person unlawfully entering the safe or vault as
2. A safe or vault from inside the "Premises".
II.
JJ.
"Securities" means negotiable and nonnegotiable instruments or contracts representing "Money" or

1. Tokens, tickets, revenue and other stamps (whether represented by actual stamps or unused value in
a meter) in current use; and
2. Evidences of debt issued in connection with credit or charge cards, which cards are not issued by
you,
but does not include "Money".
KK. "Theft" means:

1. With respect to Insuring Agreement I.C., the intentional unlawful taking of "Property" to the deprivation
of a "Client"; or
2. With respect to Insuring Agreements I.E. and I.G., the intentional unlawful taking of "Funds" to your
deprivation; or
3. With respect to all other Insuring Agreements, the intentional unlawful taking of "Property" to your
deprivation.
LL. "Third Party" means a person other than an "Insured" or "Employee".
MM. "Transfer Account" means an account maintained by you at a financial institution from which you can
initiate the transfer, payment or delivery of "funds":
1. By means of electronic, telegraphic, cable, teletype, telefacsimile or telephone instructions
2. By means of written instructions (other than those described in Insuring Agreement I.D. of this
NN. "Watchperson" means any person you retain specifically to have care and custody of "Property" inside the
"Premises" and who has no other duties.
In addition to the Exclusions listed in SECTION IV EXCLUSIONS of the Common Policy Terms and
A. For the Purpose of all Insuring Agreements of this "Coverage Part", this "Policy" shall not cover:
1. Acts Committed By You, Your Partners or Your "Members"
Loss resulting from "Theft" or any other dishonest act committed by:
a. You; or
b. Any of your partners or "Members",
whether acting alone or in collusion with other persons.
2. Acts of "Employees" Learned Of By You Prior To the "Policy Period"
3. Acts of "Employees", "Managers", or "Executives"
a. Whether acting alone or in collusion with other persons; or
Page 8 of 17
908-0001 08 09
b. While performing services for you or otherwise, except when covered under Insuring Agreements
I.A., I.B., or I.C. of this "Coverage Part".
4. Confidentiallnformation
Loss resulting from:
a. The unauthorized disclosure of your confidential information including, but not limited to, patents,
b. The unauthorized use or disclosure of confidential information of another person or entity which is
5. Governmental Action
Loss resulting from expropriation, nationalization, seizure or destruction of "Property" by order of
6. Indirect loss
Loss that is an indirect result of an "Occurrence" covered by this "Coverage Part" including, but not
a. Your inability to realize income that you would have realized had there been no loss of or damage
to "Property".
b. Payment of damages of any type for which you are legally liable. But, we will pay compensatory
c. Payment of "Investigative Expenses" except when covered under Insuring Agreement I.M. of this
"Coverage Part".
e. Fines, penalties, multiple or punitive damages that you incur.
8. Trading
a. War, including undeclared or civil war;
other agents; or
c. Insurrection, rebellion, revolution, usurped power, or action taken by governmental authority in
B. For the purpose of Insuring Agreements I.A., I.B., or I.C. of this "Coverage Part" this "Policy" shall not
cover:
1. Inventory Shortages
Loss, or that part of any loss, the proof of which as to its existence or amount is dependent upon:
a. An inventory computation; or
Page 9 of 17
908-0001 08 09
2.
Warehouse Receipts
Loss resulting from the fraudulent or dishonest signing, issuing, canceling or failing to cancel, a
C. For the purpose of Insuring Agreements I.E., I.F., or I.G. of this "Coverage Part" this "Policy" shall not
cover:
1. Accounting or Arithmetical Errors or Omissions
Loss resulting from accounting or arithmetical errors or omissions.
2. Exchanges or Purchases
Loss resulting from the giving or surrendering of "Property" in any exchange or purchase.
3. Fire
Loss or damage resulting from fire, however caused, except:
a. Loss of or damage to "Funds"; and
4. Money Operated Devices
5. Motor vehicles or Equipment and Accessories
to them.
6. Transfer or Surrender of "Property"
a. Loss of or damage to "Property" after it has been transferred or surrendered to a person or place
1) On the basis of unauthorized instructions;
2) As a result of a threat to do bodily harm to any person;
3) As a result of a threat to do damage to any "Property";
4) As a result of a threat to introduce a denial of service attack into your "Computer System";
5) As a result of a threat to introduce a virus or other malicious instruction into your "Computer
System" which is designed to damage, destroy or corrupt data or "Computer Programs"
6) As a result of a threat to contaminate, pollute or render substandard your products or goods;
or
7) As a result of a threat to disseminate, divulge or utilize:
a) Your confidential information; or
b) Weaknesses in the source code within your "Computer System".
b. However, this Exclusion does not apply with respect to Insuring Agreement I.G. of this "Coverage
Part" to loss of "Property" while outside the "Premises" in the care and custody of a "Messenger"
if you:
1) Had no knowledge of any threat at the time the conveyance began; or
2) Had knowledge of a threat at the time the conveyance began, but the loss was not related to
the threat.
7. Vandalism
Loss from damage to the "Premises" or its exterior, or to any safe, vault, cash register, cash box,
8. Voluntary Parting of Title to or Possession of "Property"
Loss resulting from your, or anyone acting on your express or implied authority, being induced by any
dishonest act to voluntarily part with title to or possession of any "Property".
D. For the purpose of Insuring Agreement I.H. of this "Coverage Part" this "Policy" shall not cover:
Page 10 of 17
908-0001 08 09
1. Credit Card Transactions

Loss resulting from the use or purported use of credit, debit, charge, access, convenience,
identification, stored-value or other cards or the information contained on such cards.
2. Funds Transfer Fraud
Loss resulting from a "Fraudulent Instruction" directing a financial institution to transfer, pay or deliver
3. Inventory Shortages
Loss, or that part of any loss, the proof of which as to its existence or amount is dependent upon:
a. An inventory computation; or
E. For the purpose of Insuring Agreements I.I. of this "Coverage Part"; this "Policy" shall not cover loss
resulting from the use of a computer to fraudulently cause a transfer of "Property".
V. LIMIT OF LIABILITY AND RETENTIONS
A. Limit of Liability
1. The most we will pay for all loss resulting directly from an "Occurrence" is the applicable Limit of
Liability as set forth in Item 2. of the Declarations.
2. If any loss is covered under more than one Insuring Agreement or "Coverage Part", the most we will
Insuring Agreements or "coverage Parts".
B. Retention
After you "Discover" a loss or a situation that may result in loss of or damage to "Property" that exceeds 25%
A. Notify us as soon as practicable. If you have reason to believe that any loss (except for loss covered
B. Submit to examination under oath at our request and give us a signed statement of your answers.
C. Produce for our examination all pertinent records.
D. Give us a detailed, sworn proof of loss within 120 days.
E. Cooperate with us in the investigation and settlement of any claim.
A. Conditions Applicable to all Insuring Agreements of this "Coverage Part":
1. Additional Premises or Employees
Declarations.
2. Consolidation, Merger or Acquisition
If you consolidate or merge with, or purchase or acquire the assets or liabilities of, another entity:
Page 11 of 17
908-0001 08 09
a. You must give us written notice as soon as possible and obtain our written consent to extend the
b. For the first 90 days after the effective date of such consolidation, merger or purchase or
c. The notice requirement shall not apply and coverage under this condition shall e~end for the
statement or
2) The merger, purchase or acquisition occurs less than 90 days prior to the end of the "Policy
Period."
3. Acquire or Form "Subsidiary"
a. You must give us written notice as soon as possible and obtain our written consent to extend the
b. For the first 90 days after the effective date of such acquisition or formation, the coverage
c. The notice requirement shall not apply and coverage under this condition shall e~end for the
4. Cancellation and Non-Renewal
a. The "Named Insured" shown in the Declarations may cancel this "Coverage Part" by mailing or
b. We may cancel this "Coverage Part" by mailing or delivering to the "Named Insured" written
1) 20 days before the effective date of cancellation if we cancel for non-payment of premium; or
2) 60 days before the effective date of cancellation if we cancel for any other reason.
c. We are not required to renew this "Coverage ParY'. However, written notice of our intent to nonrenew this "Coverage Part" shall be sent to the "Named Insured" at least 60 days prior to
d. We will mail or deliver our notice to the "Named Insureds" last mailing address known to us.
of notice.
5. Concealment, Misrepresentation or Fraud
Page 12 of 17
908-0001 08 09
a. This "Coverage Part";

b. The "Property" covered under this "Coverage Part";
c. Your interest in the "Property" covered under this "Coverage Part"; or
6. Cooperation
You must cooperate with us in all matters pertaining to this "Coverage Part" as stated in its terms and
conditions.
7. "Employee Benefit Pians"
a. If any "Employee Benefit Plan" is insured jointly with any other "Employee Benefit Plan" under this
c. If two or more "Employee Benefit Plans" are insured under this "Coverage Part", any payment we
make for loss:
1) Sustained by two or more "Employee Benefit Plans"; or
2) Of commingled "Property" of two or more "Employee Benefit Plans",
8. Liberalization
9. Otherinsurance
If other valid and collectible insurance is available to you for loss covered under this "Coverage Part",
our obligations are limited as follows:
a. Primary Insurance
When this "Coverage Part" is written as primary insurance, and:
1) You have other insurance subject to the same terms and conditions as this "Coverage Part",
same loss.
2) You have other insurance covering the same loss other than that described in Paragraph a.1)
a) The Limit of Liability and Retention Amount of that other insurance, whether you can
whichever is greater. Our payment for loss is subject to the terms and conditions of this
"Coverage Part".
b. Excess Insurance
Page 13 of 17
908-0001 08 09
1) When this "Coverage Part" is written excess over other insurance, we will only pay for the
2) However, if loss covered under this "Coverage Part" is subject to a Retention Amount, we will
10. Ownership of "Property"; Interests Covered
a. The "Property" covered under this "Coverage Part" except as provided in 10.b. below is limited to
"Property":
b) While in transit and in the care and custody of a "Messenger; or
3) For which you are legally liable, except for "Property" located inside your "Clients Premises."
b. If Item 2. of the Declarations indicates that coverage under Insuring Agreement I.C. has been
1) That your "Client' owns or leases;
2) That your "Client" holds for others; or
3) For which your "Client" is legally liable
4) While the "Property" is inside your "Client's Premises".
c. However, this "Coverage Part" is for your benefit only. It provides no rights or benefits to any
11. Policy Bridge Discovery Replacing Loss Sustained
a. If this "Coverage Part" replaces a policy that provided you with an extended period of time after
cancellation in which to discover loss and which did not terminate at the time this "Coverage Part'
became effective:
1) We will not pay for any loss that occurred during the "Policy Period" of that prior policy which
2) However, any payment we make for the excess loss will not be greater than the difference
b. SECTION VII ADDITIONAL CONDITIONS, Paragraph A.9. Other Insurance does not apply to
this Condition.
12. Records
You must keep records of all "Property" covered under this "Coverage Part" so we can verify the
amount of any loss.
13. Recoveries
a. Any recoveries, whether effected before or after any payment under this "Coverage Part",
whether made by us or you, shall be applied net of the expense of such recovery:
1) First, to you in satisfaction of your covered loss in excess of the amount paid under this
"Coverage Part";
4) Fourth, to you in satisfaction of any loss not covered under this "Coverage Part".
Page 14 of 17
908-0001 08 09
b. Recoveries do not include any recovery:

14. Territory
Canada.
a. The value of any loss for purposes of coverage under this "Coverage Part" shall be determined as
follows:
1) Loss of "Money" but only up to and including its face value. We will, at your option, pay for
a) At face value in the "Money" issued by that country; or
b) In the United States of America dollar equivalent determined by the rate of exchange
published in The Wall Street Journal on the day the loss was "Discovered".
2) Loss of "Securities" but only up to and including their value at the close of business on the
the:
(1) Market value of the "Securities" at the close of business on the day the loss was
"Discovered"; or
(2) The Limit of Liability applicable to the "Securities".
3) Loss of or damage to "Other Property" or loss from damage to the "Premises" or its exterior
c) The Limit of Liability applicable to the lost or damaged "Other Property".
loss or damage.
cash value basis.
b. We will, at your option, settle loss or damage to "Other Property" or "Premises" or its exterior:
c. Any "Property" that we pay for or replace becomes our "Property".
16. Non-Accumulation of Liability
Page 15 of 17
908-0001 OS 09
a. When there is more than one "Insured", our maximum liability for loss sustained by one or all
any one "Insured".
b. Regardless of the number of years this "Coverage Part" remains in effect and the total premium
amounts due or paid, the amount we shall pay for any loss shad not be cumulative from year to
B. Conditions Applicable to Insuring Agreements I.A., I.B and I.0 of this "Coverage Part":
1. Termination as to any "Employee"
a. As soon as:
1) You; or
2) Any of your partners, "Members", "Managers", or "Executives" not in collusion with the
"Employee",
learn of "Theft" or any other dishonest act committed by the "Employee" involving an amount in
excess of $1,000.00 whether before or after becoming employed by you.
b. On the date specified in a notice mailed to the "Insured". That date will be at least 30 days after
We will mail or deliver our notice to the "Insured's" last mailing address known to us. If notice is
2. Territory
We will pay for loss caused by any "Employee" while temporarily outside the territory specified in
C. Conditions Applicable to Insuring Agreements I.D. and I.L.1. of this "Coverage Part":
1. Retention Amount
The Retention Amount does not apply to legal expenses paid under Insuring Agreement I.D. of this
"Coverage Part".
2. Electronic and Mechanical Signatures
A signature that is a mechanical or electronic reproduction of a handwritten signature produced by a
3. Proof of loss
You must include with your proof of loss any instrument involved in that loss, or, if that is not possible,
4. Territory
the world. SECTION VII ADDITIONAL CONDITIONS, Paragraph A.14 does not apply to Insuring
D. Conditions Applicable to Insuring Agreements I.F. and I.G. of this "Coverage Part":
1. Armored Motor Vehicle Companies
Under Insuring Agreement I.G. of this "Coverage Part"; we will only pay for the amount of loss you
cannot recover:
a. Under your contract with the armored motor vehicle company; and
b. From any insurance or indemnity carried by, or for the benefit of customers of, the armored motor
vehicle company.
2. Special Limit of Insurance for Specified "Property"
We will only pay up to $5,000 for any one "Occurrence" of loss of or damage to:
Page 16 of 17
908-0001 OS 09
a. Precious metals, precious or semi-precious stones, pearls, furs, or completed or partially

completed articles made of or containing such materials that constitute the principal value of such
articles; or
b. Manuscripts, drawings, or records of any kind, or the cost of reconstructing them or reproducing
E. Conditions Applicable to Insuring Agreement I.H. of this "Coverage Part":
1. Special Limit of Insurance for Specified "Property"
We will only pay up to $5,000 for any one "Occurrence" of loss of or damage to manuscripts,
drawings, or records of any kind, or the cost of reconstructing them or reproducing any information
contained in them.
2. Territory
the world. SECTION VII ADDITIONAL CONDITIONS, Paragraph A.14. does not apply to Insuring
Agreement I.H. of this "Coverage Part".
VIII. Identity Fraud Reimbursement Single loss Limit of Liability
Page 17 of 17
908-0001 08 09

A. SECTION VII ADDITIONAL CONDITIONS, Paragraphs A.4.b. and d. of Cancellation and Non Renewal
b. We may cancel this "Coverage Part" by mailing or delivering to the "Named Insured" written notice of
1) 20 days before the effective date of cancellation if we cancel for non-payment of premium at any time;
or
2) 60 days before the effective date of cancellation if we cancel for any other reason and this "Coverage
3) 60 days before the effective date of cancellation if we cancel after the "Coverage Part" has been in
against; or
b) A substantial change in the risk assumed, except to the extent that we should reasonably have
c) A substantial breach of contractual duties or conditions; or
e) A determination by the director of insurance that the continuation of this "Coverage Part" would
fl Acts or omissions by the "Named Insured" or his representative which materially increase the
d. Notices of cancellation or nonrenewal shall be sent by certified mail to the "Named Insured" at the last
notice.
C. The following is added to SECTION VII ADDITIONAL CONDITIONS, Paragraph A.4. Cancellation and
e. We will mail notice of premium increase, change in deductible or reduction in limits or substantial
908-0035 08 09
Page 1 of 1
REVISED
t~,~
~~~~~rr~r~ce t~l~~~~~~.
Private Company
. ~'v r~~~~~ A
li

PLEASE READ THIS "COVERAGE PART" CAREFULLY TO DETERMINE RIGHTS, DUTIES, COVERAGE AND
Inc
Item 2. INSURING AGREEMENTS, LIMITS OF LIABILITY, AND RETENTIONS
$1,000,000
RETENTION AMOUNT
Per Occurrence
$0
$1,000,000
$1,000,000
$1,000,000
$0
$0
$0
LIMIT OF LIABILITY
INSURING AGREEMENTS
Per Occurrence
A. Kidnap/Ransom and Extortion Threat
Coverage
If "Not Covered" is inserted above opposite any specified Insuring Agreement or if no amount is included in the
Limit of Liability, such Insuring Agreement and any other reference thereto is in this "Coverage Part" is deemed to
be deleted.
Suite 1205
Toronto, ON M5J-2N8
909-0001
909-0029
(08-09)
(08-09)
909-0901
(01-14)
909-0002 08 09

Endorsement
K&R Response Risk Management Notice
Page 1 of 2

Nos. LHF 8827059 03; the cancellation to be effective at the time this "Coverage Part' becomes effective.
909-0002 08 09
Page 2 of 2

Various provisions in this "Coverage Part" restrict coverage. Read the entire "Coverage Part" carefully to
Declarations and described.. below. Coverage may be denied or canceled with respect to any applicant or
You and every "Insured Individual" must make every reasonable effort not to divulge the existence of this
"Coverage Part".
of time provided in SECTION II EXTENDED PERIOD TO DISCOVER LOSS of this "Coverage Part". If the
A. Kidnap/Ransom and Extortion Threat Coverage
1. We will pay you for loss of "Property" surrendered as a ransom payment directly caused by the
"Kidnap" or alleged "Kidnap" of an "Insured Individual".
2. We will pay you for loss of "Property" surrendered as an extortion payment directly caused by an
a. To do bodily harm to an "Insured Individual";
b. To do damage to "Premises" or "Property";
c. To introduce a virus or other malicious instruction into your computer system designed to
damage, destroy or corrupt data or computer programs stored within your computer system;
d. To contaminate, pollute or render substandard your products or goods; or
e. To disseminate, divulge or utilize proprietary information including formulas, patents, data,
We will pay you for "Expenses" incurred by you directly caused by a "Kidnap", alleged "Kidnap" or
However, the fees and costs of the Security Firm shown in the Declarations are payable by us in addition
We will pay you for "Expenses" incurred by you directly caused by the "Detention" or "Hijack" of an
However, the fees and costs of the Security Firm shown in the Declarations are payable by us in addition
Page 1 of 8
909-0001 08 09
We will pay you for loss of "Property" while in the care and custody of a "Messenger" directly caused by
payment of such "Property" arising out of a "Kidnap", alleged "Kidnap" or extortion threat covered under
II. EXTENDED PERIOD TO DISCOVER LOSS
In addition to the Definitions listed in SECTION III DEFINITIONS of the Common Policy Terms and
"Coverage Part":
A. "Detention" means the holding under duress of an "Insured Individual" by anyone:
1. Acting as an agent of or with the tacit approval of any government or government entity; or
2. Acting or purporting to act on behalf of any insurgent party, entity or group,
B. "Employee" means:
a. While in your service;
b. Who you compensate directly by salary, wages or commissions; and
c. Who you have the right to direct and control while performing services for you;
2. Any natural individual who is furnished temporarily to you:
a. To substitute for a permanent "Employee" as defined in Paragraph B.1., who is on leave; or
b. To meet seasonal or short-term work load conditions,
while that individual is subject to your direction and control and performing services for you;
3. Any natural individual who is leased to you under a written agreement between you and a labor
4. Any natural individual who is a former "Employee", director, partner, "Member", "Manager", or trustee
retained as a consultant while performing services for you; or
5. Any natural individual who is a "Guest' student or intern pursuing studies or duties.
C. "Expenses" means:
1. Fees and costs of the Security Firm shown in the Declarations hired to negotiate or secure the
2. Fees and costs of independent negotiators;
3. Fees and costs of independent public relations consultants and/or interpreters;
4. The cost of hiring security guards to protect an "Insured Individual" or "Property" upon the
5. Travel costs and accommodations incurred by you or an "Insured Individual";
6. Salary, commissions and other financial benefits paid by you to an "Insured Individual". Such
compensation applies at the level in effect on the date of the "Kidnap", "Detention", or "Hijack" of the
a. Up to 45 days after their release if the "Insured Individual" has not yet returned to work;
b. Discovery of their death;
c. 120 days after the last credible evidence following abduction that they are still alive; or
d. 60 months after their abduction;
7. Hospitalization and medical service fees and costs, including psychiatric care and cosmetic or plastic
surgery of an "Insured Individual" within 24 months following their release;
Page 2 of 8
909-0001 08 09
8. Fees and costs of independent forensic analysts;

9. Interest costs for any loan from a financial institution taken by you to pay a ransom demand or
extortion threat;
10. Individual financial loss of an "Insured Individual" as a result of their inability to attend to their own
11. Reward money paid by you to an "Informant' which leads to the arrest and conviction of parties
12. Any other reasonable expenses incurred by you with our written consent.
D. "Guest' means any individual:
1. Visiting your "Premises" or the residence of an Insured Individual; or
2. Traveling with an Insured Individual in a motor vehicle, aircraft or water craft,
for business or social purposes.
E. "Hijack" means the holding under duress of an "Insured Individual" while traveling in a motor vehicle,
aircraft or water craft for any reason other than "Kidnap".
F. "Informant' means an individual, other than an "Insured Individual" providing information not otherwise
G. "Insured" means: The "Insured Entity" and any "Insured Individual".
H. "Insured Individual" means:
1. Any director, trustee, partner, "Member", "Manager", "Employee", proprietor (if the "Insured" is a sole
2. Any "Relative", "Guest' or resident in the household of an "Insured Individual" defined in Paragraph
H.1.; and
I.
3. Any "Messenger".
J. "Manager" means an individual serving in a directorial capacity for a limited liability company.
K. "Member" means an owner of a limited liability company represented by its membership interest, who
L. "Messenger" means a natural individual designated by you to have care and custody of "Property" outside
the "Premises".
M. "Occurrence" means an act or event or series of related acts or events involving one or more individuals.
N. "Premises" means any building you occupy in conducting your business and the residence of any
O. "Property" means money, monetary instruments, securities, services or any other tangible property that
P. "Relative" means a spouse, child, step-child, legally adopted child, foster child, spouse of a married child,
In addition to the Exclusions listed in SECTION IV EXCLUSIONS of the Common Policy Terms and
A. For the purpose of all INSURING AGREEMENTS of this "Coverage Part", this "Policy" shall not cover:
1. Acts Committed by You or Any "Insured Individual"
Page 3 of 8
909-0001 08 09
Loss or "Expenses" resulting from any dishonest, fraudulent or criminal act committed by:
a. You; or
b. Any "Insured Individual".
2. Surrender of "Property"
Loss or "Expenses" resulting from the surrender of "Property":
a. Inside the "Premises" unless first brought inside the "Premises" after receipt of the ransom or
b. Outside the "Premises" as a result of a threat to do bodily harm to an individual in possession of
B. For the Purpose of INSURING AGREEMENT C. of this "Coverage Part"; this "Policy" shall not cover:
1. Political or Military Activity
"Expenses" resulting from an "Insured Individual" taking part in any political activity or the operations
2. Travel Documents
3. Violation of Laws of Foreign Countries
coercive effect upon or at the expense of you or an "Insured Individual".
A. Limit of Liability
The most we will pay for loss or "Expenses" in any one "Occurrence" is the applicable Limit of Liability as
B. Retention
The Retention Amount does not apply to any "Expenses" paid under INSURING AGREEMENTS B. and
C.
In the event of an "Occurrence" which may result in a loss covered under this "Coverage ParY', you must:
A. Determine that the "Kidnap", extortion threat, "Detention" or "Hijack" has actually occurred.
B. In regard to a "Kidnap" or extortion threat, make every reasonable effort to:
E. Submit to examination under oath at our request and give us a signed statement of your answers.
Page 4 of 8
909-0001 08 09
Wherever used in the Conditions, the word loss shall also be deemed to mean "Expenses".
A. Concealment, Misrepresentation or Fraud
This "Coverage Part" is void in any case of fraud by you as it relates to this "Policy" at any time. It is also
void if you or any other "Insured", at any time, intentionally conceal or misrepresent a material fact
concerning:
2. An "Individual Insured" under this "Coverage Part";
3. The "Property" covered under this "Coverage Part";
4. Your interest in the "Property" covered under this "Coverage Part"; or
B. Additional "Premises" or "Employees"
than through consolidation or merger with, or purchase or acquisition of assets or liabilities of, another
entity, such "Premises" and "Employees" shall automatically be covered under this "Coverage Part".
C. Consolidation, Merger or Acquisition
If through consolidation or merger with, or purchase or acquisition of assets or liabilities of, some other
1. You must give us written notice and obtain our written consent to extend this "Coverage Part" to such
2. For the first 90 days after the effective date of such consolidation, merger, or purchase or acquisition
90 day period.
a. The assets of the merged, purchased, or acquired entity do not exceed 25% of the total assets of
b. The merger, purchase or acquisition occurs less than 90 days prior to the end of the "Policy
Period."
D. Acquire or Form "Subsidiary"
If, during the "Policy Period" you acquire or forma "Subsidiary":
a. The assets of the acquired or formed "Subsidiary" do not exceed 25% of the total assets of the
b. The acquisition or formation occurs less than 90 days prior to the end of the "Policy Period".
E. Due Diligence
You and every "Insured Individual" must exercise due diligence in doing all things reasonably practicable
Page 5 of 8
909-0001 08 09
F.
Investigation and Settlement of Claim
G. Liberalization
H. Loss Covered Under More Than One Coverage of this "Coverage Part".
lesser of:
1. The actual amount of loss; or
2. The sum of the Limits of Liability applicable to those coverages.
I. Loss Sustained and Reported
We will pay for loss that you sustain through acts committed or events occurring during the "Policy Period"
1. During the "Policy Period"; or
2. During the period of time provided in SECTION II EXTENDED REPORTING PERIOD of this
"Coverage Part".
However, we will not pay for any loss resulting from "Kidnap", alleged "Kidnap", an extortion threat,
"Detention" or "Hijack" which is part of a series of related acts that began prior to the effective date of this
"Coverage Part".
J. Non-Accumulation of Liability
1. When there is more than one "Insured", our maximum liability for loss sustained by one or all
any one "Insured".
2. Regardless of the number of years this "Coverage Part" remains in effect and the total premium
K. Other Insurance
However, this "Coverage Part" will not apply to the amount of loss that is more than the applicable Limit of
L. Ownership of "Property"; Interests Covered
The "Property" covered under this "Coverage Part" is limited to "Property":
1. That you own or lease;
2. That you hold for others; or
3. For which you are legally liable.
you.
M. Records
Page 6 of 8
909-0001 08 09
You must keep records of all "Property" covered under this "Coverage Part" so we can verify the amount
of any loss.
N. Recoveries
1. Any recoveries, less the cost of obtaining them, made after settlement of loss covered by this
"Coverage Part" will be distributed as follows:
a. To you, until you are reimbursed for any loss that you sustain that exceeds the Limit of Liability
b. Then to us, until we are reimbursed for the settlement made; and
c. Then to you, until you are reimbursed for that part of the loss equal to the Retention Amount, if
any.
2. Recoveries do not include any recovery:
a. From insurance, suretyship, reinsurance, security or indemnity taken for our benefit; or
b. Of original securities after duplicates of them have been issued.
O. Territory
following:
3. If, during the "Policy Period", the U.S. State Department issues a Travel Warning for a foreign
"Coverage Part".
P. Transfer of Your Rights of Recovery against Others to Us
Q. Valuation Settlement
1. Subject to SECTION V.A. Limit of Liability, we will pay for:
a. Loss of money but only up to and including its face value. We may, at our option, pay for loss of
1) At face value in the money issued by that country; or
2) In the United States of America dollar equivalent determined by the rate of exchange
b. Loss of securities but only up to their market value at the close of business on the day they were
1) Pay the value of such securities or replace them in kind, in which event you must assign to us
2) Pay the cost of any Lost Securities Bond required in connection with issuing duplicates of the
a) Value of the securities at the close of business on the day you first became aware of the
loss; or
b)
Limit of Liability.
Page 7 of 8
909-0001 08 09
c. Loss of or damage to "Property" other than money and securities for not more than:
1) Its replacement cost value without deduction for depreciation on the day you first became
aware of the loss; or
whichever is less.
2. We may, at our option, pay for loss of or damage to "Property" other than money and securities:
a. In the money of the country in which the loss occurred; or
b. In the United States of America dollar equivalent of the money of the country in which the loss or
c. Any "Property" that we pay for or replace becomes our "Property".
R. Cancellation and Non Renewal
1. The "Named Insured" shown in the Declarations may cancel this "Coverage Part" by mailing or
2. We may cancel this "Coverage Part" by mailing or delivering to the "Named Insured" written notice of
a. 20 days before the effective date of cancellation if we cancel for non-payment of premium; or
b. 60 days before the effective date of cancellation if we cancel for any other reason.
3. We are not required to renew this "Coverage Part". However, written notice of our intent to nonrenew
"Policy Period".
4. We will mail or deliver our notice to the "Named Insureds" last mailing address known to us. Notice of
Page 8 of 8
909-0001 08 09

A. SECTION VII ADDITIONAL CONDITIONS, Paragraphs S. 2. and 4. of Cancellation and Non Renewal of
2. We may cancel this "Coverage Part" by mailing or delivering to the "Named Insured" written notice of
a. 20 days before the effective date of cancellation if we cancel for non-payment of premium at any time;
or
b. 60 days before the effective date of cancellation if we cancel for any other reason and this "Coverage
c. 60 days before the effective date of cancellation if we cancel after the "Coverage Part' has been in
1) Conviction of the "Named Insured" of a crime arising out of acts increasing the hazard insured
against; or
2) A substantial change in the risk assumed, except to the extent that we should reasonably have
3) A substantial breach of contractual duties or conditions; or
4) Loss of reinsurance applicable to the risk insured against, but only if the absence of reinsurance
5) A determination by the director of insurance that the continuation of this "Coverage Part" would
6) Acts or omissions by the "Named Insured" or his representative which materially increase the
4. Notices of cancellation or nonrenewal shall be sent by certified mail to the "Named Insured" at the last
notice.
C. The following is added to SECTION VII ADDITIONAL CONDITIONS, Paragraph S. Cancellation and Non
5. We will mail notice of premium increase, change in deductible or reduction in limits or substantial
909-0029 08 09
Page 1 of 1
<, _..
~.~.~ ,
~,
_.
;.
~~
IMPORTANT POLICYHOLDER INFORMATION

KIDNAP RESPONSE AND RISK MANAGEMENT RESOURCES
We are pleased to inform you of the following kidnap response and risk management resources, which are
accessible to you as a Hanover policyholder.
Kidnap and Ransom Response
Our Policyholders have access to around-the-clock emergency response services provided by Globe Risk
International, a security management consulting firm specializing in kidnap, ransom and security services.
In the event of a kidnap or ransom event you may reach Globe Risk International's Emergency Response Center
for immediate assistance.
1-416-410-2323
As a reminder, whenever you become aware of a current or potential claim you should also immediately give
notice to Hanover in accordance with the policy terms and conditions.
Risk Management Services
As an international security consulting firm Globe Risk International can provide you with numerous services and
resources related to personal and corporate security including:
Intelligence and Security Management Services

Security Awareness Training and Workshops
Kidnap Prevention, Negotiation and Survival
Threat, Risk, Vulnerability Assessments
Contingency Planning
Crisis Management Planning
Operations Site Planning
Regional Analysis
Crisis Intervention Services
Globe Risk International can be contacted at www.globerisk.com or Alan Bell at abell@globerisk.com
Please note that the independent risk management services offered by Globe Risk International are accessible to
you as a Policyholder of The Hanover Insurance Company or one of its subsidiaries and affiliates. The Hanover
is independent from Globe Risk International and depending on the terms, conditions, and exclusions of your
Hanover policy, may not be responsible for any fees or charges you may incur for services or products which may
be offered to you by Globe Risk International, or for which you may contract with Globe Risk International. Under
no circumstances should the recommendations, services or producfs of Globe Risk International be construed as
recommendations, services or products of The Hanover Insurance Group, Inc. By making this service provider
accessible to you, The Hanover does not assume (and specifically disclaims) any duty, undertaking or
responsibility to you regarding the kidnap response and risk management services of Global Risk International.
909-0901 01 14
Page 1 of 1
In Witness Whereof, this company has caused this policy to be signed by its President and Secretary and
countersigned on the declarations page, where required, by a duly authorized agent of the company.
Frederick H. Eppinger
President
SIG-1100 08 14
Charles Frederick Cronin

Secretary
Page 1 of 1
EXHIBIT 6

Case 2:13-cv-01584-SRB Document 1-1 Filed 08/05/13 Page 37 of 67
1 I
AnlerlcanArbicralion r\ssoclaCton
n;,~,,,rr rt~t~<<~~,~~ .s~~,.r,.~, u~~~i,r,~~r~i.
COMMERCIAL ARBITRATION RULES

DEMAND FOR ARBiTRATiON
YIEDIATION.~ Ifyou ~vou/d like the AAA to conlacl the other parties and attempt to arrange a mediation, please check this box.
There is no addrtiona! administrative ee or thrs service.
Name of Respondent
Name of Representative (if known)
Vemma, LLC
Kent Brockelman, Es
Address
Name of Firm (if applicable)
8322 Hartford Drive
Coo ersmith, Schermer & Brockelman PLC
Kepresentative's Address
Suite 1200, 2800 N. Central Avenue
City
State
Zip Code
City
State
Zip Cade
Scottsdale
AZ
85255Phoenix
AZ
85004Phone No.
Fax No.
Phone No.
Fax No.
800-577-0777
602-772-3777
Email Address;
Email Address:
Tt~e named claimant, a party to an arbitration agreement dated
2008
,which provides for arbitration under the
Commercial Arbitration Rules of the American Arbitration Association, hereby demands arbitration.
THE NATURE OF THE DISPUTE
The recovery of monies paid to and expended at the instance and request of Respondent pursuant to applicable law plus costs and
attorney fees. Respondent is an illegal pyramid promotional scheme under state and federal law. BLS, LLC seeks the greater of its
damages plus costs and attorney fees as determined under federal RICO Civil Liabilty, SEC Securities Laws, Arizona Common Law
fraud and the Arizona Pyramid Law. Pursuant to 44 ARS 1733 BLS, LLC declares it contracts with Respondent to be void.
Dollar Amount of Claim $212,000.00
Other Relief Sought: ~ Attorneys Fees
~ Interest
~ Arbitration Costs ~9 Punitive/ Exemplary 0 Other See Above
In accordance with Fee Schedule: Flexible Fee Schedule
Amount Enclosed $ 2,800.00
Standard Fee Schedule
PLEASE DESCRIDE APPROPRIATE QUALIFICATIONS FOR ARBITRATOR~S~ TO BE APPOINTED TO HEAR THIS DISPUTE:
An attorney with commercial law experience

Hearing locale
(check one) Requested by Claimant
Phoenix, Arizona
Estimated time needed for hearings overall:

hours or
1.~o
~ Locale provision included in the contract
Type of Business: Claimant
days
Marketer
Respondent Multilevel Qistribution of Goods
Is this a dispute between a business and a consumer? OYes ~ No Does this dispute arise out of an employment relationship? p Yes ~ No
If this dispute arises out of an employment relationship, what was/is the employee's annual wage range? Note: This question is required
by California law. Less than $100,000 $100,000 - $250,000 Over $250,000
You aie hereby notified that a copy of our arbitration agreement and this demand are being filed with the American Arbitration
Association with a request that it commence administration of the arbitration. The AAA will provide notice of your opportlmity
to file an answering statement.
Signariire(may be signed by a representative)
Date:
Name of Representative
Feb. 29, 2012
Thayer C. Lindauer
Name of Claimant
BLS, LLC
Adclr~ss (to be used in connection with this case)
Suite 5, 5383 Cochran Street
City
State
Zip Code
Simi Valley
CA
93063Phone No.
F~uc No.
618-698-8225
888-752-2246
Email Address:
tlindauer@gmail.com
Representative's Address
City
Simi Valley
Phone No.
618-698-8225
Email Address:
tlindauer@gmail.com
State
CA
Zip Code
93063Fax No.
888-752-2246
fo begin proceedings, please send a copy of this Demand and the Arbitration Agreement, along with the filing fee as
'~ provided for in the Rules, ta: American Arbitration Association, Case Filing Services, 1 101 Laurel Oak Road, Suite 100
Voorhees, NJ 08043, Send the original Demand to the Respondent:
Please visit our website a[ ~vww.adr.or~ if you would like to fife this case online. AAA Case Filing Services can be reached at 877-495-h185.
EXHIBIT 7

Case 2:13-cv-01584-5RB Document 1-1 Filed 08/05/13 Page 38 of 67
rlmei'iCanArbitr.tf.ion;
lssUCi;ttion
D i.c ~lulr Rnsn6ie(inn .`'erurer~ hl'rr rld:nid r.
Please visit our websitc at www.adr.or~ if you

COMMERCIAL ARBITRATION RULES
would like to the this case online, AAA Case Filing
DEMAND FOR ARE3ITRr\TION
Services can be reached at 877-495-4185.
MEDIA TION: /fyou would lrke the ,ASIA to contact the nlher parties
and attempt ro nrrunge a medialiora, plense check this bos. ~
There is no additiorra! administra[rve ce%r
tiris service.
Name ofi Respondent
Vemma Nutrition Com an ,Inc. and Benson K Bore ko
Address
8322 Hartford Drive
City
Scottsdale
Phone No.
800-577-0777
Email Address;
State
Zip Code
AZ
85255Fax No,

Kent Brockelman, Es
Coo ersmith Schermer & Brocke~ man P.C.
City
State
Zip Code
Phoenix
AZ
85004Phone No.
Fax No.
602-772-3777
Email Address:
kbrockelman csblaw.com
The named claimant, a party to an arbitration agreement dated
2008
Commercial Arbitration Rules of the American Arbitration Associa
tion, hereby demands arbitration.
THE NA'T'URE OF THE DISPUTE

Federal RICO claim. Respondents conspired to operate and did operate a
pyramid promotional scheme proximately causing fnancial
damages to Claimant. Damages include non-RICO damages as permitt
ed by law. Previous voiding of participation contract of BLS,
LLC is revoked ab initio.
Do(lar Amount of Claim $212,000.00
Amount Enclosed $ 2,800.00

D Interest
~ Arbitration Costs ~ Punitive/ Exemplary Other
In accordance with Fee Schedule: Flexible Fee Schedule
PLEASE DFSCRI~E APPROPRfATE QUAI.I FICATLONS FOR ARBI"fRATO

R(S~ TO QE APPO~N"I~ED TO HEAR THIS DISPUTE
;
An attorney with commercial law experience or a retired judge.
Hearing locale Phoenix, Arizona
(check one) Requested by Claimant ~ Localc provision

included in the contract
Estimated time needed for hearings overall

hours or
1.00
Type of Business'. Claimant
Marketers
days
Respondent Multilevel Distribution of goods

Is this a dispute between a business and a consumer? OYes ~
No Does this dispute arise out of an employment relationship?
0 Yes ~ IYo
If this dispute arises out of an employment relationship, what
was/is the employee's annual wage range? Note: This questio
n is required
by California law. Less than $100,000 $100,000 - $250,0
00 Over $250,000
You are hereby notified that a copy of ouc arbilracion agreement
and this demand are being filed with the American Arbitrat
ion
Association witl.~ a request that it commence administration of the
arbitration. The AAA will provide notice ofyour opportunity
Signature(~be signed by a representative)
D e:
--~
7,`2012
Tha er C. Lindauer
Name of Claimant... _.
_.
__.. -....____
_.__.._..
_
_.. _. _.~..
N~m~-~f Firm (if applicable)
BLS LLC Ben and Linda Ste henson Claimants
Address (to be used in connection with this case)
Suite 5. 5383 Cochran Street
City
State
Zip Code
City
State
Zip Code
Simi Valle
CA
93063Simi Valle
CA
93063P(~ona No.
Fax No.
Phone No.
Fax No.
618-698-8225
888-752-2246
618-698-8225
888-752-2246
!nail Address:
Email Address:
ilindauer@gmail.com
Uindauer@grnail.com
To begin proceedings, please send a copy of this Deman
d. and the Arbitration A6reement, along with the filing fee
as
provided for in the Rules, to: American Arbitration Associa
tion, Case Filing Services, 1 101 Laurel Oak Road, Suite
100
Voorhees, NJ 08043. Send.
the original Demand to the Respondent.
EXHIBIT 8

Case 2:13-cv-01584-SRB Document 1-1 Filed 08/05/13 Page 39 of 67
t.L7 f~Il1C1'ICFIRt~I'~)ICT'~1LIOI1;~Sti0C1~1Ll0Jl
Di.ifiulr l~~~xulatir~r~ Si~r~iices FV'nrldu~idr
Commercial ARBITRATION RULES

(ENTER THE NAh1E OC THE APPL[CAf3LE RULES)
Demand for Arbitration

MEDIATION: Ifyou would like the AAA to contact the other parries and altempl to arrange mediation, please check this box.
There is no additional adminislrntive ee or this service.
Name of Respondent
Vemma Nutrition Company, Inc. and Benson K Boreyko
Ken! Brockelman, Esq.0
Address:
Name of Firm (if applicable):
8322 Hartford Drive
Coopersmilh, Schermer & Brockelman, P.C.
City
State
Scottsdale
AZ
Phone No.
800-577-0077
Email Address:
Zip Code
City
85255
Phoenix4Z
Fax No.
Phone No.
602-772-377
Email Address:
State
Zip Code
AZ
85004
Fax No.
kbrockelma n@csblaw.com
The named claimant, a party to an arbitration agreement dated August, 2008

Commercial
Arbitration Rules of the American Arbitration Association, hereby demands arbitration.
THE NATCIRE OF THE DISPUTE
Respondents conspired to operate and operate a pyramid promotional scheme proximately causing Financial damages to Claimants. Damages are
sought against Respondents under Civil RICO provisions and concurrently under Stale of Arizona laws relating io Securities Fraud, Pyramiding and
Common Law Fraud. Claimants further claim damages for unpaid commissions owed to Claimants by Respondent Vemma Nutrition, Inc.
Dollar Amount of Claim $ 212,000.00
Amount Enclosed $2,800,00

~ Interest
~9 Arbitration Costs 0 Punitive/ Exemplary Other RICO Treble
]n accordance with Fee Schedule:
Flexible Fee Schedule
PLEASE DESCRIBE APPROPRIATE QUALIFICA"PIONS FOR ARB[TRATOR~S~ TO IIF APPOItVrED TO HEAR THIS DISPUTE:
Abitrator has been appointed.
(check one) Requested by Claimant ~ Locale provision included in the contract
Hearing loclle Phoenix, Arizona

Estimated time needed for hearings overall:
hours or
~,pp
Type of Business: Claimant MGM Marketing Distributor
days
Respo[tdent Distribution of goods
Is this a dispute between a business and a consumer?

Does this dispute arise out of an employment relationship?
Yes ~ No
Yes ~ No
If this dispute arises out of an employment relationship, what was/is the employee's annual wage range? Note: This question is required
b California law. Less then $100 000 $100,000 - $250,000 Over $250,000
You are hereby notified that a copy of our arbitration agreement and this demand are being filed with the American Arbitration
Association with a request that it commence administration of the arbitration. The AAA will provide notice of your opportunity
Signature(may be signed by a representative)
Date:
9-3-2012
Name of Claimant
Thayer C. Lindauer, Esq.
Name of Pirm (if applicable}
.BLS, LLC; Ben and Linda Stephenson
Address (to be used in connection withthis case):

C/O Thayer C. Lindauer, Suite 5, 5383 Cochran St.
City
Zip Code
State
Simi Valley
Phone No.
618-698-8225
Email Address;
tlindauer@gmail.com
CA
93063
Fax Nn.
888-752-2246
~ Representative's Address:
Suite 5, 5383 Cochran St.
Ciry
Simi Varlet
Phone No.
618-698-8225
Email Address:
'- `
State
CA
Zip Code
93063
Fax No.
888-752-2246
tlindauer@gmaii.com
To begin proceedings, please send a copy of this Demand and the Arbitration Agreement, along with the filing fee as provided for in
the Rules, to the AAA. Send the on final Demand to the Res ondent.
Please visit our website at www.adr.or~ if you would like to t11e this case online. AAA Case Filing Services can be reached at 877-495-4185
EXHIBIT 9
Case 2.15-cv-01578-JJT Document 13-1 Filed 08/17/15 Page 21 of 50
'~ti~rl~ !_, ~]'isa~~i, (aecri-ral lfaritl~cr

7:?;ll il.+r7per ~'az~l:~~a}, <<~ite (;, f~ri,srnF~~.+t, AIII ?(}77(1-:,t~(14, L~5;4
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1.
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STATCMENT Or'C~;RTI~ICA'TION UF'I'KAN~I,ATION

FI20M ITAI.IAi~ 'CQ ENCYIaIS}I
1, Mark f.. PfSONi, C:xeneral M~uuge~ and Senior 1t11ian Linguist far the Dalian 7'ranslcrlrons
C:omparry, LLC - hereby c~rtity that 1 am t~luc3it in Ctalian and competent to translate from the
Italian to the ~:n~lish language. I also certify that the following kra~sfalion:
UNFAIR ilUSfNESS PRACTICES

PS7621 - VBMMA 1TALIA-P12(~[)UCTS WIT}I MANC7<)5'I'FF:N dIJiCE
Ruling no. 147&-J
N~C:WS'LI~T1'1';R No. 10 {)P MARCH 10, 201A
c~usi5~{ng of 17 p~~ge(s) in its translated forme is a true and accurate translation from Italian to
F n~lisll to the best of my knowledge and.ability.
!~
,.f ''~f
,.i
f
, "~-"'
Mark I... Pisani

General Manager lied Malian Senior Linguist
`Che ftalian Tr-anslatio~is Company, LLC
Bate; Apri12;3, 2014
Attachment
~
App. 1611
Case 2:15-cv-Q1578-JJT Document 13-1 Filed OF3/17/15 Page 22 of 50
22
NEWSLETTER No. IO OF MARCH 10, 2014
UNFAIR BUSINESS PRACTICES

PS7621 - VEMA4A ITALIA-PRODUCTS WITH MANGOSTEEN JUICE
Rzrling no. 24784
THE COMPETITION AND MARKETS AUTHORf'I'Y
DURING TFIE ~4EETING of February 5, 2014;
HAV WG REGARD to the repor[ b}' Professor Piero Darucci;
HAVING REGARD to Part Il, Title 1[l, of Legislative Decree no. 206 of September fi, 2005, as amended by
Legislative Decree no. 146 of August 2, 2007,6 (hereinafter, the Consumer Code);
FIAVING REGARD to the "Regulation concerning preliminary investigation procedures on unfair business practices",
adopted by resolution of the Authority of November l5, 2007, published in the Official Journal no. 283 of December 5,
2007, and en~cred into effect on December 6, 2007 (hereinafter, the Regulation);
IAVING RF.UARD to the Notice of Commencement of proceeding no. PS7621 dated June 10, 2013, aimed nt ascertaining
the existence of unfair business practices in violation of Articles 20, 2 t 1, letters G) and c), and 23, letters p) and s), of llte
Consumer Code, followed by the company Vemma Italia S.cl.;
HAVING REGARD to the Authority's resolution dared September 1 1, 2013, which extended die final date for completion
of the proceeding;
FIAVING REGARD to the records of the proceeding;
I. THC PARTIES
I. The company Vemma Italia S.r.L (hereinafter also referred to as Vemm2) is a retailer of various products based on
mangosteen juice, some of which are presented by u demonstrator or sales associate (doortadoor sales) as allegedly
having special Therapeutic properties.
In the financial year ended in 2012, the company recorded sales revenues of approximately (less than 1 millio~~] ~ euro,
2. Twu consumers who reported Lhe Cacls.
ll. THE BUSINESS PRACTICE

3. This proceeding was initiated following repoiis from two consumers, and concerns the conduct adopfed by V~~mma, as a
mamifacturcr, i.c. the creation and management of a complex system for the promotion and marketing of mnngosteenbased products. This system envisages, on the un~ band, Llie involvement and participation of consumers in a scheme for
the purchase and sale of said products, whereby they are incentivized to sponsor the joining of(he Vemma network by a
constantly increasing number of other consumers/sellers; and, on the other, the representation of the products (in messages
posted on the web) as having certain 6enetieial properties.
4. Participation in the sales network, with the title of "brand partner", requires registration with the Vemma company's
website (ww~v.vemma.coin), registration of an order
In this version some of the data have been omitted, as information confidentiality or secrecy considerations have been deemed to exist.
App. 1612
Case 2:15-cv-01578-JJT Document 13-1 Filed 08/17/15 Page 23 of 50
NEWSLBTTERNo. IOOPMARCH 10,2014
23
for automatic shipment, and the purchase at a significont cost of one of two differently priced enrollment
packages("Vcmm~ Builder Pack Silver" for 604, or `Vemm~ T~uilder Pack Gold fnr E 1,007), which
are the requirements to have access to the different bonuses/commissions indicated in a specific
Compensation Plan Q~ereinafter also referred to as CP).
5. In the Vemma network, participants receive compensation according to the number of persons they
succeed in enrolling, as well as commissions calculated on the volumes of sales they generate for
Vcmma, directly or indirectly, including those generated by participants that they have enrolled into the
Vemma Schcmc.
6. According to the Compensa~ion Plan, access to the promised commissions and bonuses is limited by a
series of requirements that reduce their amounts, and in any case mike them not directly linked to the
rota) volumes of sales each participant generates directly and indirectly. In particular, it is necessory to
reach direct monthly orders for a minimum amount in terms of commissionable volume (CV); also,
participants need to possess specific requirements.
7. In addition to these aspects, intended to be financially attractive, the manaFacturer and his parine~rs
emphasize the special proper~ies of Veining mangosteen-based supplements, making [hem appear as
functional in creating ~n image, with end costumers, ~s particularly beneficial to their well-being and/or
health.
8. Messages ~~-ith a content focused on health era found in the manufacturer's website in connection wish
Vemma products, which -owing to mangosteen, one of its ingredients -are attributed outstanding
anpnxidant proPcrtios, and with the Veitima Nutrition Program, which should allegedly be considered us
sort ol~heallh insurance.
f1I. FINDINGS OFTIIF. PROCCEDIVG
i) Course ajtl~e proceeding
9. On the basis of informat[on acquired for the purpose of applying the Consumer Code, and of reports
from consumers shout a suspected unfair business practice Followed by Vemma in marketing and selling
dietary supplements, on June 10, 2013, the preliminary investigation proceeding no. PS7621 was initiated
against Vemma, for alleged violation of Articles 20, 21, paragraph I, levers b) and c), and 23, letters p)
and s), of the Consumer Code.
10. On July 29, 2013, a letter was received From the manufacturer, in which the latter made commitmcn~s
in response to the remarks contained in the Notice of Commencement of proceeding, and requested an
extension of the final date to complete saitie.
I. On September 1 I , 2013 the Authority resolved to reject the commitments undertaken by the Party and
to extend the final dale for completion of the proceeding till January 7, 2014.
12, On OGober 27, 2013, a hearing of Vemma representatives was held at the office of the Autliority;
during the hearing, the Party mquesred en extension of the end date of the proceeding.
3. On November l5, 2013, the Party was notified that the last dale for completion of the proceeding hid
been extended [o February 6, 2014.
l4. The subsequent notes dated November 27 and December 10, 2013 provided Further information and
clarifications on the new methods for calculation of compensAtion and the company's new regulations.
I5. On December 12, 2013, ~hc Parties were notified the date of completioei of [he preliminary
invcs[igadon phase, scheduled on December 23, 2013.
App. 1613
Case 2:15-cv-01578-JJ7 Document 13-1 Filed 08/17/15 Page 24 of 50
NEWSLETTER No. 10 OF MARCH 10, 2014
24
16. On December 23, 2013, the manufacturer submitted a defense brief to which was attached v
copy of the new Compensation Plan.
ii) Evidence acquired
a) Vemma's distribution business
17, Vemma's dis~ribution and promotion business in Maly started in January 201 l with sales
revenues of over [l-5J million euro in 2011 and approximately [less rhnn 1 niillionJ curo in
zo~z.
18. As to the size of the sales nciwork, based on investigations conducted and informltion
providad by the inanufactur~r, it was found that the distribution network involved, in 2013,
(l,000-S,000J associates, of e~hom only less ~hnrr SOOJ were active,'" equal ro 27% of the total.
The title of ac~ive is obtained end m~ininined by periodically ordering product~ or submitting an
order n~ wholesale price.
l9. Specifically, the number of p~~rticipan~s who joined the network in the first half of 2013,
with the promotional "Crold" and "Silver" pocks, were [less 11~an 100J and [less than 100]
respectively, (or [ornissis) of [he [oral number of new participants), while tha number of
participants who joined the scheme wish the same packages from July 1 m October 24, 201
were [less dean 100) and (IDO-ISOJ respectively, (or [omissisf of the total number of new
associates)'.
20. Data acquired during the inspection hive shown that the number of new associates who
joined the network in 2012 and in the first live months of 2013 was (~O1-1,000 and (5011,000], respectively.
Additionally, among the (250-SOOT active participants whu submitted orders in tha period Gom
September 2012 to June 2013, only ~lea~s than ]00] on average achieve sales volumes of any
signiCcanca, i.c. such as to genero[e six- monthly sales commissions higher than 1,000, while
nearly all the other associates receive quite low or even paltry compensation.
2l, The data collcc~tcd show that Vcmma received approximately [2,500-S,000J orders in the
period from September 2012 to June 2013, with an average value, deducted of the Builder Pack,
of about[l00-150 euro per order.
22. Additionally, based on product sales data, a significant portion of the orders consists of
purchases made by associates Themselves, presumably for their awn consumption, which in the
network are known as "autoship" sales. In the period from September 2012 to June 2013, the
income generated by autoship sales amounted to [o~~~issisJ, while incume generated by nonautoship sales vas considerably lower, amounting to (omissisJ euro.
b) The enrollment phuse
23. In the V~mina ~ietwnrk, consumers register without incurring any initial cost, by signing a
contract wit}i the attached Compensation Nlan, and have the possibility of buying one of the
promotional packs offered (Builder Pick), to which partici~alion in the Plan is linked.
~ See doe. 9, parasraph 5.

3
See doe. ?3, pragraph ~.
~ See doe. 16, paragraph 6.
~ See doe. 23, paragraph a).
App. 1614
25
24. In particular, alter cegisiration, associates are required to submit an autoship order for at Icast 60 QVs
(Qu~liFying Voluilies) every month. Once activity is qualified through the registration of at least one
Brand Partner in each of the right and left team (the title of active is obtained through an active automatic
Shipment order of at Ieast 60 reward points), the associate acquires she right m earn income immediately.
25. The nssociat~ also has the possibility of buying one of ttie following Builder Packs: Silver", for a
price of E 599, or "Gold" Tor a price of E 999, in order to fully benefit from the compensation envisaged
in she CP. With each of These builder packs (Silver and Gold), the consumedassociate buys a diC(erent set
of Vemma products, corrzsponding to a different value (expressed in QVs): specifically, the Silver pack
corresponds to 400 QVs, and the Gold pack to 80Q QVs.
Depending on the puck they biry, associ~~es have differont and greater "opportunities" to earn the
commissions set out in the CP.
26. Tha data for the pc~iod from September 2012 ro June 2013 show that a considerable portion of
Vemm~'s sales revenues, around [omissis], is geneiuled directly by the sale of Builder Packs to the
associ~res.
c) ~'cmma's Compensation Plan
27. As m~rtioncd above, sales associates sign an agrezment with Venuna which governs the rather
complex mechanisms for receiving the compensation set nut in the CP.
In particular, associates receive compensation both for enrolling other associates sponsored by them, and
for the sales volumes they generate for Vemma, directly and indirectly through the associates in their
"dotvnlinc".
28. Looking at the dai~ils of the Compensation Plan, compcnsxtion consists mainly of lhz following
items: i) "Cycle [3onus", ii) Cnroller matching bona,"; iii) "Second tier matching bonus"; iv)
"Momentum Bonus"; v)"Platiouin Club i~onus".
29. The Cycle Bonus fs awarded to active Brand Partners wide an Automatic Shipment order of 120
reward points and two personally enrolled active Drand Partners, one For c~ch team. At the end of each
volume period (week), the brand Partner can earn a Cycle Bonus of ~ipproximately USA 20 if helshe has
l80 reward points in one team and 360 reward points in the other (the sides may alternate). The value of
weekly cycles is calculated each week on [he basis of total sales divided by the number of qualified
cycles.
30. To earn the Enroller Matching i3onus, the associate has ro be ac~ive and qualified with a registered
Automatic Shipment order of 120 reward points and tour personally enrolled active Brand Partners, one
in each team and the other two anywhere in either seam. This bonus pays to the Enroller 10/u of all Cycle
Bonus amounts earned by the [3rand Partners he/she enrolled personally. if a Brand Partner does not meet
the qualifying criteria, the bonus is transferred to the first Smaller in the upline who meets the
requirements. ~
31. To earn the Second Tier Matching Bonus, the associate has to be active and qualified with a registered
Automatic Shipment order of 120 reward points and six personally enrolled active brand Partners
~ Earning levels Tor cycles: earning levels for cycl~.5 only apply to the Cycle Bonus and do not zffect any of the other
income areas in Vemma's Compcnsaiion Plan. Once he/she achieves [I~e maximum earning Ie~el in Cycle for that
position for lour (4) consecutive weeks, the Brand Partner is assigned one(1) new position above that in which he/she
has achieved the maximum earning Izvel. This position will have the same earning limo, unless the f3cand Partner
advances to a higher rank as specified below. A 13rand Partner may hold up to two (2) positions, four (4) positions for
married couples.
~ A Brand Partner may not earn the I:nroller Matching Bonus and the Second Tier Matching Bonus for the same Brand
Partner in the downlinc. Tn case of traneFer of the F,nroller Matching Bonus because of ineligibility of dte Enroller, the
Secaid Tier Matching Bonus is ~Iso transferred.
App. 1615
Case 2:15-cv-01578-JJT Document 13-1 Filed 08117/15 Page 26 of 50
NGWSLL"fl'ER No.10 OF MARCH 10, 2014
26
one in each loam and the oGhcr four anywhere in zither team. Brand Pnrtners may not only earn on
the associates Lhey enroll personally, but may also earn a lU% Matching Bonus on all the Cycle
Uonus amounts received by the enrolled Brand Partners. If a Brand Pnrti~er does not meet the
qualifying criteria, the Second Ticr Matching I~onus is transferred to the first Enroller in the upline
who meets Iherequirements.~
32. To eTm the Momentum Bonus, the associate has to ha active and qualified with v registered
Automatic Shipment order of 120 reward points and one personally enrolled lctive Brand Partner,
in each team. The additional requirements arc shown in the table bclowv.
MOMENTUM BONUS
"PAYMENT L[VEC'. COLD
Silver"on each side of the enrollment floe
and 500 reward poims consisting of Automatic Shipment
ordzrs andior Builder Pack along the enrolhnent
line on cACh side of their business.
Maximum payment per participation Ice' Up to US$ 300
e A Brand Partner may not eom the Enroller Matching Bonus and the Second Tier Matching Bonus foe the same Brand
Partner in the downline. In case of transfer of the Enroller Matching (3onus because of incligibiliry of the Enroller, the
Second Tier Matching [bonus is also vansfer~ed.
~ This bonus is a reward paid a~ the end of each four (q) week Ronk Advancemcm, on the basis of the Payment
Levels recognized during the current or tha previous advancement period.
The Momentum Bonus is equally subdivided among all parlicfpanls who yualilied on the basis of"Payment Level".
The Momentum Bonus Pool includes approximately three percent (3"/0) of the sales gcncratad by the counWes
participating in the Momentum Bonus, and does nog include orders on which a Fasl Start E3onus was paid.
The volume pecumulated for she Momentum Boims within a four (4) week rink advancemem period is not
transferred to the next four (4) wick period.
Compensation for each rink mhy vary from pa~ind to period. brand Partner's may p2rticipnre in pool3 at each
MomcnWm Pin rank for a period not exceeding twelve (12) months after the date on which they were recognized the
Momentwn Level Pin. Brand Partners who do not meet the requirements for the level that lies been recognized may
still participate in a lower pool for which they meet the requirements. AIL flrand P.rtners who achieve Uic Diamond
Rank or higher and have a Gold "Payment Levee' nn each side of the enrollment line will pass from the Momentum
IIonus to the Platiiwm Club Bonus.
App. 1616
NEN'SLI"f'fGR No. 10 UP MARCH 10, 2014
27
"PAYMENT LEVEL": SILVER

bronze "" on cacti side of the enrollment line
and 500 reword points consls6ing of Automntic Shipment
orders and/or Builder Pnck along the enrollment
line nn each side of their husiness.
Maximum payment per p;lrticipntion fee' Up to USS 200
fy
~.
33. Lastly, to earn the "Plulin~nn Club Bonus" the brand partner must be active and qualified with an
Aulom~tic shipment ordar of 120 reward points. The Brand Partners must have purchased a Silver
Builder or higher pack in the fist 60 days al4er enrollment10.
34. A report by the Finance Police, whu interviewed some of the network Tssociates who earned the
highest incomes documents the existence of a bonus called "frenzy bonus". 7'he interviewee statzd that
"each associate tins C~vo saps lines, the right and the left. Wdien one litre c~ccurnulates n! least /80 points
nr~d the other n( ]ensi j60 points, a "valurne cycle" rs generated ~rodticin~ a credit of npprorimately 75.
Inenrrre mcry cdso conefioni dae so-called n~on~enunn bonuses andfrenzy bo~~uses~. TheJornrer, x~kich ~nuy
gener~p~e nn income r~arigfng j~arr 75 ro 225 euro, dependi~lg oi~ Nie role orie I~as in 11~e network, is
produced b~~ 1he acciu~iulurion o/'at leas! i00 points per line over a one month perdod de/toed by Vermna.
Tv earn the 'fi~enz~~ bones ", irr.rieacl, aye haa~ (v enroll Three ussociu~es in a h~eek, and is paid as a
proporiiori ojihe lager's p~u~chnses; Jhis bon,s ccrn varv.f'om I50 to 30 euro (sicJ. Compensation is paid
by hunk wire Grunt%rfran abrond "(doe. 30, Exh. 8).
35. Additional requirements to access the commissions and bonuses set out in the Plan limit the amounts
earned, end in any c~sc resuh in their being not directly linked to the tnt~l sales volumes generated by
associates, directly or indirectly (through their sponsored perlicfpants).
io Brand Partners muse achieve the Diamond "Payment Leval" or higher end hive n "Brand Paruier paid as Cold" on
each side of the enrollmem ling and 500 reward points consisting of Automatic Shipment orders xn~'or Builder Pack
along the enrullmenl line on e;~ch silo of their business, in n four N~eek advanc~emant period.
OneK the Rrand Partners are eligi6la For the Platinum Club, they may receive the bonus every [imc they meet the
requiremems during the four week rank advancement.
App. 1617
28
NEWSLETTER No.10 OF MARCH 10, 2014
V) Vcmmn products
36. The manufficturer his produced all the dietary supplemen[s distributed in the Malian market.
All the supplements'(Bode Burn, ode F.-cleans, Mangosteen Plus, Veiuma Premium, Vzrve)
are registered in the Ministry of I1ealQ~'s Register of Dietary Supplements. No health claim is
contained in the lobels.
37. In promotional materials acquired during the proceeding, some Vemma supplements were
promoted claiming specifically their outstanding efGeacy as antioxidants.
38, In view of the manufacturer's promotional messages boasting the health benefits of Vemma
supplements, which are emphatically przsente~d with expressions like "m~gunGly the mos!
powerJiel anlioxidanG liyt~i~f' or "discoveri~ig the perJec! supplen~enl"~~, the products'
characteristics have been examined.
39. The descriptions of product properties provided by Vemma in regard to vitamins and
minerals seem [o comply with the provisions of EU Regulation no. 432 of May t6, 2012
(Claims).
iii) The m~u~ufacturer's defense rrrgunrenL~'
a) On the pyramid uaturc of flee Vcmma network
40. Vemma pointed out that:
a) preliminarily, it does not recognize the role of consumer to the sales associates who join the
Vemma network. ~Che manuF~eturer - on the basis of the tax treannent applied, which benefits
from reliefs and "[...J is related ro co~rimercinl internierlialion operations" and stating that on
associate is comparable to a "Ji~uvicl~isee" maintains that "~...] associaie.r are fina~~cially
inde~endent.fi'n~n tl~e principal canpuny, are orgmtizalionally nt~FOr~omotrs and condr~cl their
business ass~nr~ing al! bvsi~~ess risks";
b) that a pyramid scheme exists if an associate earns on average more commissions "... from
a~her consumers joining the network thin from Ghc ",...tale nr consunrplion of products", and
th~l Article 5, p:~ragraph l of LAw no. 173105 makes no distinction between direct and indirect
salts;
c) the so-celled "fast stun bonus" is not applicable in some European countries (including
Italy), therefore the charge conccrnfn~ [hc existence of a bonus payable immediately upon
enrollment of a new associate is groundless.
d) "The possible prerer~ce of incre~iie~ita! paynten~~s to ussociutes linked ro the fa-mir:g of n
team, and lherc~ore /a the invalverneru oJ'orherpersons in the sales organlznlion, certainly does
nog prove (he prevalence of enr~alLnenl of'new associates over the primary goal, which remaiivs
the generation of revenues from sales ofprod~~cts. [..] we do nor beliere !ha! the presence of
irldividua! incentives ~a er:rolbnenl rnav o~ilself9ualiJy the sales network as a pyrmnrd scheme.
(,) ~l~e nen~cork i.r no! n pyrmuid scheme in d~ia~ i~ does not reward mere enrollmeiu in the
absence oj' product sales "~'. h~ Jacl, "No canpensnrion is paid for the e+n~ollinenl of new
associates, on the conh~ary, n!1 compensnlio~i is ]raked Io sales ofproducts, in a spirit of
1~ See doe. 9, Egli- I I.

i~ See doe. 9, paragraph 3.
App. 1618
Case 2:15-cv-01 78-JJT Document 13-1 Filed 08/17/15 Page 29 of 50
29
peryins l~i~her compen.rarion !o assoeiales who demor2.s~rn~e the ability to sell, rlirect/y or i~~direcll~~,
greater nolun~es oJprodac~s"~j.
e) "Auloship is an or,~n~~izntional mecl~rmisni the p:+rposc: of ia~hich is cer~ai~~ly nn1 to i~~rpose arryRhing,
leash ~f n/! the obligation Io make periodic purchases. As such, the auroma~ic shipmem mechanism
(auloshipj is simply an order subrnission method and is nerlher mandatory nor in~e~~ocnble, ns fl may be
canceled ar avry rime"~~_ In this regard the manufacturer specified that "Joining the Verrnttu sales network
does riot entail airy oblig~riion ro buy [...J Besides no! reya~esling any puynienl a! IP~e lime of regis(rntion,
Ven~ma does not reg~~ire Ghe u.c,rocintes ~o port%nse any pro~no~ionnl package ro acquire the role ofsales
associate"~s and that "At the tir+ie oj'enro!lmen~, no inceFuive exists - in lax ar in fact - Ja-!he new
associate io make nap pinrhases ~~. This is allegedly demonstrated by the percent~ga of associates who,
at the time of joining, hought nne of the Silver or Gold packs (equal to 22% in the Second half of 2012
and tl~e tlrsl ton months of 2013)
"Until positive evidence exists lhn~ the associates are mnirrly compensc~red (meaning in n pr~opor~iat of
50% + l oJ'the bonuses and/or coir~pensnlio~z crc(ually received] o~i ll~e exclusive basis of enrolAnem
uclivilies', in our opinion the compertsn(ion sysreni is not to be censured in anv man~aer"~~,
"The possible presenre nJ'iiirremenral payrnenls ~o associates linked ro thefarming oJ'n ~ea~r~, bur ire alas
case linked (us in the case u! hand) ro sales revenues generated by the nei~~ assaciu[es certainly does not
prove Ore prenale~~ce of enroll~rienl o{' neor. associates nicer the prininry goal, wlarcly reirinir~s the
gertercrrio~t of re~~enuesfrom sales ofprodtecrs.(.] the network is no! u pyramid scheme lit that iR does nal
rewuvd mere emroll~nenl iri the absence ofproduc7 sales ~'~
b) On the hcAlth propertics of[hc products
41. In regard to the messages that have hcen censured, the manufacturer points out that the properties
attributed to the produces correspond to die actual properties of said products. 'I'hc descriptions of product
properties provided by Vemma in regard to vitamins and minerals comply with the provisions of EU
Regulation no. 432 of May 16, 2012(Claims).
42. For she food products under comparison, the nutritional element values were derived from the
database of the US Department of ngriculture~~. Furthermore, with specific reference to the oxygen
radical absorbance capscity, the latter was obtained using parameters and values developed by the
Researdi Center oFthe aforesaid Department and applicable to fruit and vegetables.
c) Proposed changes to the CompensHlion Plan and to the promotional methods used for Vemma
products
43. On July 29, November 26 and December 23, 2013 the manufacturer proposed changes to the adupied
distribution model, specilically:
a) by making the Compensation Plan even more comprehensible;
13 Scc dot. 9, par2graph 3.

to
is
Sce dot, 34, paragrtiph Ci.~
See dot 34, paragraph 4J
i~ See dot. 34, p~rzgraph 4.9

i~ See dot. 34, paragraph 52.
is See doe. 3Q, paragraph G.l
i~ Sce dot. 9, pnragnph 4.
App. 1619
Case 2:15-cv-01578-JJT Document 13-1 Filed 08/17!15 Page 30 of 50
3~
VEWSLG"I "fER No.10 OP MARCH 10, 2014

b) by inh'oducing a bonus called "retail bonus", which will be clearly described in the new
compensation plan as one of the itiain tools for generating revenues. This bonus will allow the
E3rand Parmers [v receive 5 l0 40 euro in commissions nn each order. The commission will he
equal m the difFerenca be~w~een Vemina products wholesale price (tha "brand partner pried')
and the recommended price to end consumers ("reco~nme~ided rernil yrice"). Within this
framework, the brand partner invoices and receives payment for the product from the end
consumer, acting as a professional distributor rather than as a sales associate. In essence, this
bonus is compensation for intermediation of sales (those intermediated directly by the
associate) and does not require the creation of any sales network for the associate to receive 1120;
c) the so-called momentum bonus, which required sales volumes to be generated through the
2ucoship mechanism or through the purchase of huilder packs, is now awarded taking into
account the volumes and the respective revenues generated by sales to consumers~~;
d) by removing the "Platinum Club bonus" (which required the purchase of a builder pack),
thus eliminating the incentive to buy builder packs;
e) the bonuses known as "enroller matching bonus" and "second tier matching bonus", which
required the presence of 4 and 6 associates, respectively, in the enroller's downline, are replaced
by c single bonus (the "Team Bonus"), organi~ced on two lies, which requires a simple
sh~ucture consisting of 2 ~0 4 associates in [he downline;
~ the bonus known as "Cycle bonus", which required the enrollment of n~ IeasL two associates
in the downline, can be obtained simply by intermediaring sales without being required to enroll
Tny associates;
g) changes to the internal procedures for the enrollment of new associates; enrollmen[ can be
completed free of charge and without the need ro submit any initial order;
h) removal of the mechanism called "auroship". to order ~o remain active in the network, it will
no lon6er be necessary to submit an autoship order (periodic product order) a' a wholesale
order, The associates will also have the possibility of using direct Talcs to their customers Lo
remain 2ctive in the network, even without making personal purchases;
i) the autoship mechanism has been elimina~ed altogether, both at the time of enrollment and as
~i method for ~ctivaring ~ssoeiales into the sales ,eystem (for participation in the CompensAtio
Plan), and as a requirement ro receive any kind oPbonus~~;
l) Veinma will give even more visibility, ai the dive of enrollment of new a,sociates, to their
right to cancel orders or return the products within 3U days, thus exercising their unquestionable
right oC withdrawal. "fhe enrollment procedure will not take place unless the associate has read
and understood Vcmma's rctum and withdrawal policies;
m) Vemmn ~mderlakes ro strengthen control over the ad~crnsing of its products by
unauthorized parties, and to establish specific, stnctcr measures in case of violation of the
provisions prohibiting misleading advertisements or those contained in the Consumer Code;
n) a prospective associate will riot be asked to sign she participation form without having
carefully read end undersrood the Compensation Plan and the "Policies and Arocedures
~ocwncnt, whic}i expressly prohibits even mere emphasis on the earning opportwiities involved
~~ See does- 16 and ~8

~i See doe. 2K
~~ Sce iloC, 28
App. 1620
Case 2:15-cv-0157 -,]JT Document 13-1 Filed 08/17/15 Page 31 of 50
NEWSLETTER loo. 10 OF MARCH 10, 2014
31
in participation on the Vemina network, so as to avoid creating expectations beyond what can reasonably
he earned on the basis of the Compensation Plan'-.
44. Lastly, in regard Iv the promotional aspec~s, the mxnufaclurer shill Automatically ruminate the
agreement with the associate if die latter carries oul advertising activities of whatever nature without the
company's consent'4.
IV. OPINION OF TIIC COM111UNICA'1'IONS RCGULA"TORT' ALITiIORITY (AUTORITA PER
I,F. GARANZIE NELLF. COM1~IUNICA7.lON1 - AGCO~~1)

45. As the business practice discussed in this ruling has been made known to die public through the press
and broadcast media, on December 24, 2013 the Communications Regulatory Authority was requested to
express an opinion in accordance with Article 27, paragraph 6 of the Consumer Code.
46. In ttie opinion submitted on January 23, 2014, the Authority found the business prnctice under
examination to be unfair pursuant to Articles 20, 21, paragreph I, letters b) and c), and 23, letters p) and
s), of the Consumer Codc, on the 6nsis of the following considerations:
u)"hosed on ruling nu. ?0123 issued by Ilse Con~pe~ition cntd Markets A~Uhoril~~ on July 22, 2009, "Wane
Disposer", the rcuionale oJ'ar~ide 23, leKer p), ry/rich eslnblishes that cmy pyramid proinolio~tnl scheme is
deceilfiil, is - nrnong other - (,ree pnrngr~ph 45) '7n prei~ent die exces.eive e,epan.rion of dislribzitinn
s~~slenis based on the progressii~e widening ~~/~Ihe buse ofe~~rnlled persons, delri~rienrn! to those ~~~Ho hove
inveaVed i~r die yyrnmid once the clinin expands ezpone+2linlly";
b) "ei~en nsszuning thn~ Vernnia nssocinles eunnot be defined us "con.runrers", they world then nuer the
de~~iilion oj'"nii~roen~erprises" ~ntder nrride 18, teller d bisJ ojRhe Cons~nner Code";
c) additionally, "an average consumer would be induced ro e,slnblish un improper rela(ion.chip bel~veen
conslnnE const~mplion t~f~ the cG~inks and signi~can! effects Jor The prevention of prem~~lure ciging an~~
tiveukening oJ'the immrn~e system, whereas no particular he~hh properties have been demonstrated by
scientific evidence, and "the infi~rmalionproeided by ll~e mnntrJpclurer in its commercin! communications
is iinsr~i~a61e 10 iizJor'm the p~iblic on rlre actual chnrnclerislics of the prodt~cl ".
V. FINAL CONSIDERATIONS
hitrnducria~: Pyrnmirl sales scTremes
47. Law no. 173 of 200, "Direct home selling and protection of consinners from pyramid sales
schemes", regulates tl~c so-called "multilevel sales programs", or direct home selling. In these systems,
the participants are given die possibility not only of intermediating sales Cor a given company, but also of
enrolling other people into the network, sponsoring them ~s new associates. The compensation received
by each associate is directly linked to the stiles he/she generates as will as to llte sales volumes generated
by the associates he/she sponsored, and these programs never impose` any constraints or prescriptions
concerning the sales volumes that
~~ Sec doe. 34, pnragra~ih l 1.2.

24 See doe. 34, paragraph 11.4.
~~ Sec among others the ruling issued by AGCM, no. 22299/20 1 I , I'S 6425 Xango.
App. 1621
32
NEWSLETTER No.10 OF MARCH 10, 2014

must be achieved by [he associate, toge[her with his,'her sponsored assouiaies or otherwise, in <i
given time period.
4R. L3y eontrnst, pyramid sales schemes -while sharing with mul[iluvel schemes the structure
Lhat governs the intermediation of direct sales, are actually illegal, i.e. they are sales
organizations" where the primary economic inccmive of the participant in the organizeion is
based on the mere enrollment of new associates, rather than on their ability to sell or promote
the sale of goods or services, directly or through other members of the or~a~ization"~h, and as
such pre s~ricily prohibi[ed~~. The Conswl~cr Code, in article 23, paragraph I, lelterp), also
delines as unfair the conduct of a business organization that starts, manages or promotes "a
pyrn~nid pro~no~ionnl sc<teme where consumers provide n connibwion in excl~an,~e Jor the
possibility of receii~ing pnymen~ n~ninly front zhe enrolbirenl of o~l~er coi~sui~iers u~~ro the
scheme, rasher Ihnn /i-orn lyre sale or consumpE7at ofproduces"~".
49. In ~~rticul~r, in pyramid sales schemes the span or's income does not depend only on the
total sales volumes generated together with tl~e associates he/she sponsors,(to which, moreover,
thzy are not directly linked") but results mainly by the enrollment of other persons in the sales
or promotional network, this being the primary aspect of this scheme, which determines the
earnings level that will be recognized to sponsor, 'Che mechanisms for the calculation of
compensation, commissions and/or bonuses arc extromely diversified, and the slme can be said
of the system for cashing the amounts that will then be returned as compensation (commissions)
In the sponsors: in general, high participation fees are requested for phis purpose from persons
joinin6 the sales network, and/or mandatory purchTSes of the products and/or services to be
promoted or sold. Additionally, limitations are imposed on the payment of compensations
through clauses introducing o6ligaiions relating ro the specific characteristics oC the
organization formed by ih~ sponsored associates: such charaeteri,lics must be achieved and
maintained for a certain period of time, and/or requirements are set in connection with the.
associates' qualifications, and/or with the specs volumes to be achieved.
50, In other words, while a company that operates through multilevel direct selling pays its
agents or sales representatives commissions that arc always dircclly linked to the value or
quantity of goods or services sold directly or through other associates that fete
agent/representative was able to enroll in the network, in a pyramid sales scheme the prodtwt or
service to be sold becomes secondary, simply providing the pretext and opportunity to enroll
other consumers to participate in the pyramid by making personal orders (purchases), thus
artilicially enabling the scheme ro feed on itself For [his reason, newly enrolled sales
representatives, us soon as they join the pyramid scheme, will pw'sue the primary objective to
fad other representatives and have. theta pay for the right
~~ Article 5, paragraph I , Luw no. 17i of August 17, 2005.

~~ Non-compliNncc with this prohibition is severely punished: under Article 7 of[he above refercnecd law, Anyone who
smrt& or participates In pyramid sales schemes is ~unishcd wish imprisonment from G months to one year orwith a line
tom E 100,000 to f 600,000.J
2e Ar[icla 5 of the Code's final provision provides that ",,. Anicles 5, paragraph I, and 7 of Law no. 177 of August I7,
2005, n, 173, regulatinb direct home selling and the protection of consumers from pyramid sales schemes, are repealed in
the part concerning pyramid s31es schemes between consumers and business organizations as defined in Article 23,
paragraph I, letter p) of Legislative Uc~cree no. 206 of Sepleinber 6, 2005 (Consumer Code), where it envisages a possible
contribution by a consumer ne detincd in article I B, paragraph 1, letter a), of said Code. The above mentioned articles 5,
paragraph I, and 7 shall therefore remain applicable ~o pyramid promo~ionul schemes involving any individual or entity
nctin~ within the framework of their business, industrial, crass oi~ professional activity".
~~ Whereas in multilevel schemes even a single unit of product so(d entitles to cuinpensation, pyramid schemes impose
minimum volumes to be sold personally endear as a group (together with the sponsored associates), and nu
compensation is paid unless these volumes are achieved,
App. 1622
Case 2:15-cv-01578-JJT Document 13-1 Filed 08/17!15 Page 33 of 5U
NC:WSLCTTER R'o, 10 OF MARC}f 10, 2014
33
to join or remain within [hc pyramid; the latter in turn will seek others, and so nn.
Sl. The rationale underlying die regulation is to prevent the s~readfng of systems aimed not so much at
selling goods or services, as at gaining economic benefits linkzd mainly to the progressive expansion of
the associate base, through the deceitful represent;ttion of easy carnings10. Those who Iasi joined the
pyramid scheme will only 6e able to earn the promised amounts - in some cases, to recover what they
paid for participation - if a high numhcr of p~r[icipants join and make sales~~, while there is a strong risk
that the chain will break and that ttie new associates will never obtain any actual economic bencfit'~.
52. This possibility the likelihood of which depends among other factors on the type and nah~rc of the
requirements se[ out in the compensation plans is of course omitted at the time of enrolling new
associates, to whom on the contrary the possible earnings are represented as immediate and rather
significant, also through pArticipation in meetings or events where [he allegedly outstanding properties
(e.g. l~ealih benefits) of the supplements are emphatically boasted.
i) nn Vemma associntcs meeting the definition of consumers
53. Preliminarily, it should be noted that both in multilevel snlcs networks and in their degeneration,
represented by pyramid schemes, what matters is not so much the formal tide of the participanu, i,e. sales
associates, buc rather the substantial fact of the activity they carry out, which normally ends up being an
occa,iun~l ;activity. Ln the case of Vemma, according to the dato provided by the manufacturer, only
[omissisJ of the associates have a VAT number, while all the others ere occasional associates; moreover,
only an extremely small number of associates rcccivc~d six-monthly commissions of more than E 1,000.
34, I[ should be added that, particularly in pyramid schemes, at the lime oC enrollment the new
participants are subject to obligations and solicitations In buy products: these aspects undoubtedly qualiFy
these individuNls as consumers rather thin professionals who carry out sales activities.
55. Funher confirmation of this is provided, in the V~mma scheme, both by the small number of orders
submitted by the associates (less than a quarter of die associates made at least one order) and by the
implementation ofthe autoship mechanism, involving a considerable number of these orders. On [he basis
oC the inFonnation provided by the Party, during the period from September 2012 and June ?013, the
manuf~cturcr's revenues were generated mainly by autoship sales, and to a much lesser extent by other
sales (the former amounting to [o~nissisJ, while the latter amount to [omissi,s~ corn). In this case, the
associate does not intermediate any sale to a third party external to the schema, but buys for him/herself,
unleas one is willing to assume that the purcha,ed supplements may have been sold by the associates to
others "on a retail basis".
S6. Lasdy, the same regulation referred m ~bovc (Law na 173/2005), in defining the role of sales
associates of individuals operating as part of a
~o Seo ruling no. 19167 of November :0, 2008, PS121 "I'ehne telephone sysicnu with VSIM-NGR, in NewsleUer no. 44/08
31 Thus, the result in most cases is a purchase network rather [hmi a sales network, where the buyers, however, sue tl~c
ussocfares!consumers themselves.
~~ Indeed, in general only a eery smell number (a few dozens) of associates wiUt high sales qualifications
receive compensation ofi some signfficunce(2few tens oFthousands of corn per year), even for sales
nehvorks consisting of ,everTl tz~is of thousands of participonts.
App. 1623
Case 2:15-cv-01578-JJT Document 13-1 Filed 08!17115 Page 34 of 50
34
NER'SLETTER NoJ O OF MAKCI4 I Q 2014
"inululevel marketing" scheme, identilied the elements that characrerize a sales organization as
a pyramid scheme, going beyond the formal aspect related to the sales associate's role.
ii) On fhe pyramid u;iturc of the Vemma network
57. Before analyzing the nature o{~ the Vemma network, it ,hould be noted that, in die
documents presenting the Vemma na~work and specifically in the Compensation Plan
dislributcd to consumers who nre about to join, [he earning opportunities are extensively
emphasized (e.g~: "possible bola! earriirigs: USSR 914,100" or "ive have a .c~lrn~ebic plan Thal w(ll
make you corn $ ?00, 3 5,000 or ei~en $ 50,000 per month!" "!f you ore readv ro mnke yain~
Jinnncin] rireanrs come n7~e wilhou~ linrl~s, now is the perjecE time ~0 become n Vemma Brand
Partner. Simply choose a &rilder Puck ~o maximize your oppor7arnilies. As you will see, this
smolt i~~vestrnenl iri your br~siness is nolhin,~ comprn~ed ro the po~eminl income 1ha7 this
opporamiry o/Jers.", while on the other hand the same completeness end/or clarity is not
found in regard to the mechanisms For the calculation of compensation for each type of
commission or bonus.
58. What emerges very clearly, instead, is that the nelwock for Lhe marketing and sale of
Vemma supplements is structured according to rules that appear to be mainly aimed at
acquiring new consumers within a complex compensation system. In particular, the presence uF
the so-called BuSlder Packs Tod of the periodic and automatic purchase order is undoubtedly
anomalous in a multilevel sales network, whereas they eonstitu~e - as set out in the introduction
- the typical elcinems oC A pyramid system, in which the purpose of the manufacturer or
business organization is to receive a significant contribution from consumers, both initially and
in the form of subsequent purchases. Indeed, it is only through these enrollment methods that
associates are able to beneFit, to different extents, from all the commissions set out in the CP.
In particular, the purchase of autoship products is a requirement in order to be considered
active, and therefore to be ablz to benafit from the different bonuses scl out in the CP, which
represent the real attraction for the new associates. Thus, it is clear that the purpose of the
scheme is iiol to create a multilevel sales network, but a purchase network with consumers
fictitiously enrolled as sales associates".
59. To appreciate the relevance of these aspects, it is enough to rocall that in the period Crom
September 201? to June 2013, approximately 20% of the total income generated I~rom product
sales was obtained from the sale of the so-called Builder Packs, and over 60`%o was generated
from autoship sales.
During the same period, only about 16'% of the income was g~ncrated fi~om the sale of products
to third pTrties.
It is evident, thcreforq ghat "personal" orders or purchases of E3uilder Pack producLS, as well as
subsequent("autosl~fp") purchases by associates play en absolutely predominant role in the
scheme under examination.
60. Additionally, to recover the sums initially paid the associates need to sponsor other
associates to join the network; specifically, the recovery occurs through payment of the
compensation called "Enroller nralcMing bonus (whereby the caroller receives l0% of all fhe
cycle bonus amounts earned by the associates he/she personally enrolled) and of thz "second
tier marching bonus"(equal ~o
~~ See doe. 12, page 14.

~a T'his aspect cantinas the mtomalous nature of the Vemma sales network, making it more similar to T purchase
network where the associaleslconsumers ere primanly required to biry the manufschirer's products in order io remain
~cithin the scheme and cam indirect commissions.
App. 1624
Lase 2:15-cv-01578-JJT Document 13-1 Filed 08/17/15 Page 35 of 50
NEWSLE'I"I'ER No. 10 Of MARCH 10, ?014
35
l0% of all the cycle bonus amounts earned by the associates in turn enrolled by those whom the enroller
enrolled personally).
Based on this mechanism, the associate is induced, lirstly, to enroll new consumers, also to recover the
sum initially paid.
6l. A particularly important element, for the purpose of determining that the Vemma network is in fact a
pyramid scheme, is the requirements f'or earning Q~c commissions/bonuses on the sales generated by the
organization to which the associate belongs, as well as the presence of certain specific qualitative
requirements of the sales organization and oC the individual essoci~te. Whilc the mechanisms For
commission calculation are characterized by a high level of complexity and confusion, it appears clear
that the Compensation Plan involves the obligation of submitting monthly personal orders. Under [he CP,
the associates ~re under the obligation to produce monthly orders, and subsequently ibr a minimum
amount, in order to paRicipata in the distribution of the compensation and maintain the rank achieved.
62. It should al,o be noted that, in the Vemma network, the sales commissions provided by the CP are not
granted in direct proportion to the tool volume of generated sales, but only on a subset of the latter.
In parlicul~r, the volume calculation mechanism, based on only one of the created downlines, excludes
sales for a volume amount equal to that generated by a single Gnc.
63. In this regard it should be noted that, out of all the associates, only [less ~Mnn SOJ received (in the
second half of 2012) six-monthly commission of any significance (2,000 to 5,000 auto) and (less than 90)
received higher compensation amounts (more than 5,000 euro), while all the othar associates recdived
tallier low if not paltry compensation; only 24% of the associates hed a VAT nwnber during that period.
64. Conversely, no relevance is to be attributed to the statcmcni contained in the P;~rry's defense brief of
July 3, 2013 according to which it is possible for the associates, under Section 13 of the Distribution
Agreement, to rehire dle products thirough the Customer Service, 1s this action takes place after the
effects of the mechanism (sponsoring the participative of other ossociates in the network) are already
underway, and in any case the loss in product value (even if Icss than l0~iu) in case of return, combined
with the onerous administrative procedures, undoubtedly act as a deterrent For returns ro occur with any
appreciable frequency.
65. In summary, the contested conducts were; the fact of setting up a sales network with the
ch~racterisiics of a pyramid scheme, where the manufacturer makes a profit mainly from the enrollment
of associates and [he purchases of product made directly by the Idtter, end where the associates'
promotional effort is aimed al constantly enrolling new associ~tas end creating a purchase network (with
purchases made by the participants themselves), rather than generating product sales.
C6. Conversely, the changes introduced by Vemma in the Compensation Plan, described on July 29,
November 26 and December 23, 2013 shall not be examined in this ruling. The reason is, on the one
hand, that these measures cannot be accepted ~s commitments, considering the seriousness oFthe business
practice under examination and she Authority's interest in investigating the matter. On the other hand the
proposed measures, while they certainly address sane of the more questionable aspects of the CP
(elimination of the mandatory monthly orders and need For any type of purchase to be enrolled in the
network; changes to some of the bonuses), still mTintain certain elements of the old scheme - specifically,
the calculation method, which considers the so-celled "short leg" -and introduce new ones - e.g., the socalled "team bonus", which still requires, in order for
App. 1625
NEWSLETTER NoJ00F MARCt( 10,?014
36
the associate to receive it, the prescncc in the lattcr's downline of a certain number of
other associates. These changes require a new, complex rcvicw of the scheme, which
is not part of the inves~igation into d1e subject conducts.
iii) On the nature xnd the health properties of the product
67. A synergistic role in enhancing the effectiveness of this pyramid scheme is
generally the misleading representation of die supplements, so as to make them more
attractive by attributing ~o them properties they do not possess.
6R. In regard to the content of the health indications, however, it should be noted that
[he claims used are in line with the recent list. contained in F.0 Regulation nn.
432/2012; ~hcrefore, with respect to these provisions, the busi~less practice adopted by
Vemma, as set ou[ in section II of this Wiling, does not appear to constitute a violation.
V1. AMOUNT OF TIIE SANCTION
69. Pursuant ~o article 27, paragraph 9, of the Consumer Code, in issuing the ruling
that prohibits the unfair business practice the Authority may provide for [he
application of an administrative sanction of @ 5,000 to E 500,000, taking into account
the seriousness and d~nation of the violation.
70. In regard to the amoiult of the sanction, the Authority should keep in mind, to the
extent they are applicable, the criteria set out in article 11, Law no. 689/81, as referred
to in article 27, paragraph 13, of the Consumer Code, and in particular. the
seriousness of the violation, the efforts made by the company to e~lirninate or mitigate
the violation, Use personality of tl~e agent, and the financial conditions of the
company.
71. As to the seriousness of the practice, factors to he considered are the imporl~nce
and size of the manufacturers, which in the case at hind is a company with large sales
revenues, known in the specific sector as a company oper~ting its some E,U countries
and in the United States, where the parent company Vemma Nutrition has its place of
h~iainess,
27. The seriousness of the violation is also determined on the basis of the widespread
nature of the practice, which involved a high number of consumers, approximately
[1,000-5,000], and of the particular nature of the violations, i.e. the adoption of a
pyramid distribution scheme.
73. In regard to the duration of the violation, according to the available information
the business prac~ice was first adopted in early 2011, also Through the use of
promotional materials dedicated to the products, and is still ongoing.
74. Based on these considerations, this Authority deems it appropriate to determine
the amount of the administrative sanction applicable to tl~e company Vemma Italia
S.r.l. to be E 1 00,000(one hundred Thousand euro).
DF.FMING, therefore, nn the basis of the considerations set out above, that tl~e
business practice under examination is unfair because the complex system for the
marketing and sales of produces his dle natin~e of a pyramid scheme, in violation of
articles 2U, 2] para~;r~ph 1, Ictters b) and c), and 23, letter p), of the Consumer Code;
RESOLVES
a) that the business practice described in section Il of this ruling implemented by the
company Vemma Italia S.r.l., constitutes, for the reasons and within the limits set out
in the Grounds of the Ruling, an
App. 1626
NEWSLETTER No. 10 OF 61ARCH 10, 2014
}7
unfair business practice pursuant to Articles 20, 21, paragraph 1, letters b) and c), and 23, letter
pj of the Consumer Codc, and prohibits its spreading or continuation;
b) lv apply to Vemm~ Italia S.r.l. an administrative pecuniary sanction of @ 100,000 (onc
hundred d~ousand);
c) that the mam~facturcr shall be required to cornmunicate to the A~rihority, within sixty days
after being served this ruling, the actions it has taken in compliance with the caution under
paragraph ~) above.
The administrative sanction set out in paragraph b) above shall be paid within thirty days after
being served this ruling, using the a~tachcd Form F24 with identification information, in
accordance with Legislative Dccree no. 24l/1997. The form can be submitted in paper format
co any bank, Poste Italiane S.p.A. office, or Tax Collection Agen~. Alternatively, d~c form can
be submitted online and the amount be debited to the company's bank or postal account,
through the home-banking and GB] services made available by banks or Poste Italiane S.p.A.,
or using the online services of Agenzia Belle Entrate (Internal Revenue Agency), available at
r~ia.ii~. q,~iiTZiu<<rm~crrc~. tor.ii.
Pursuant to article 37, Paragraph 49, of Law Decree no. 223/2006, individuals and entities
having a VAT number are required to submit the F24 form through online channels.
After the period specified above expires, if the delay is less than six months, interest on ]ate
payment shall apply, according to legal rate, from the date following expiry of the payment
period Co the date of payment If payment is further delayed, pursuant to article 27, paragraph
6, of Law no. 689/81, the sanction amount shall be increased by one tenth every six months,
from the day after expiry of she payment period to that nn which the roll is transmitted to the
tax collection concessionaire; in this case, tl~e increase absorbs interest on delayed payment
~ccrtted in [he same period.
Once payment is made, notice of it must be immediately given to the Au[hority by transmitting
a copy of the form documenting payment.
Aursuai~t to article 27, paragraph 12, of [he Constimcr Codc, in case of tlon-compliance with
this resolution the Authority shall apply an administrative pec~miary sanetioi~ of 10,000 to E
50,000. In case of contin~ied non-compliance, the Authority may order Che suspension of the
company's business activity for a period not exceeding thirty days.
This ruling shall be notified to die parties concerned and published in the Newsletter of the
Competition and Markets Aulhoriry in consideration of the nature of the unlawful conduct and
to ensure that Che public is duly infornled of its insti[utional activity,
App. 1627
Case 2:15-cv-01578-OJT Document 13-1 Filed 08/17/15 Page 38 of 50
NGW SLETTER No. f 0 OF ~1ARCH 10, ?014
~g
The Party may file an appeal against tltis ruling with the Lazio Regional
Administrative Court(TAR), its accordance with airtide 135, paragraph 1, letter b), of
the Code of Adrninislrative Proceeding (Legislative Decree no l04 of July 2, 2010),
within sixty days after notification of this ruling, tmless a longer period is granted
under article 41, paragraph 5, of the Code of administrative Proceedin6, or may
submit an extraordinary appeal to tl~e President of tl~e Republic in accordance with
article 8 of Presidential Decree no. 1199 of November 24, 1971, within one hundred
and twenty days after notification of the ruling.
fHE SECRET ARY C;ENLItAL

Rohertn Cl~ieppa
THE PRESIDENT
Giovanni Pitruzzella
App. 1628
EXHIBIT 10
:. ~P~Y
ELLEN F. ROSENBLUM
'
t
{~;,~
~'
Attorney General
;. ~"
MARY H. WILLIAMS
Deputy Attorney General
'.
,~~ t
:'~.
DEPARTMENT OF NSTICE
CIVIL ENFORCEMENT DIVISION
1 162 Court Sweet NE
Salem, OR 97301-4096
Telephone:(503)934-4400
Fax:(503)378-8910
TTY:(800)735-2900
December 4, 2012
VEMMA
8322 E HARTFORD DR
Re:
FF11267-12
BARB RAINES
~Ne have received the enclosed consumer complaint about your business. We understand that
there are often two sides to a problem, and we would appreciate your prompt review of this matter.
We do not represent the complainant. We do, however, review all complaints to determine
whether grounds exist to warrant action by us. Your response to the allegations in the complaint would
help us to make that determination.
In the interest of efficiency, we prefer that you respond directly to the complainant and email a
copy of your response to our office. Please include the file number shown above on the subject line of
your email. Alternatively, you may respond to us by regular mail. The response you send regarding this
complaint will be part of the public record maintained by the Department of Justice.
Preferred Email Address: alicia.suarez@doj.state.or.us
We would appreciate receiving your response within fifteen (15) days of receipt of this letter.
Please feel free to attach any documents which you think are relevant in explaining your position. If after
your response you hear nothing further from us, you may consider this matter closed.
Alicia Suarez
Enforcement Officer
Enclosure:
Consumer Complaint
EZ-EI
Mailing Address: 1 162 Court St. NE, Salem, OR 97301-4096

Physical Address: 340 Vista Ave SE, Salem, OR 97302-4546
Consumer Line:(503) 378-4320(Salem only), 229-5576 (Portland only) or Toll Free I-877-877-9392
Hotline Hours: 8:30 a.m. to 4:30 p.m., FAX (503)378-8910, TTY:(800) 735-2900 Website: www.doj.state.or.us
EXHIBIT 11
Michelle Lottner
From:
Sent:
To:
Cc:
Subject:
Tracking:
Michelle Lottner
Monday, December 10, 2012 4:14 PM
'clubflt@canby.com'
'alicia.suarez@doj.state.or.us'; Compliance Emaii Group
Vemma Inquiry - Complaint FF11267-12-Barb Raines
Recipient
Delivery
'clubfit@canby.com'
'alicia.suarez@doj.state.or.us'
Compliance Email Group
Michelle Lottner
Delivered: 12/1 01201 2 4:14 PM
Erin L. Winla~d
Delivered: 1 2/1 0/2012 4:14 PM
Dear Ms. Raines,
This letter is in response to the complaint you filed with the Oregon Department of Justice dated November 21, 2012
stating that Vemma is a pyramid type of program targeting high school students (complaint FF11267-12-Barb Raines).
To provide you with some background on Vemma Nutrition Company, Vemma was incorporated in September 2004 in
the State of Arizona. Vemma's parent company, New Vision USA, Inc. was established in 1995 by the Boreyko family and
is a proud member of both the Direct Selling Association and Better Business Bureaus of Central/Northern Arizona
where Vemma currently maintains an A+ rating. Vemma is a direct selling company that markets dietary and nutritional
supplements to customers through a network of independent distributors referred to as "Brand Partners." Brand
Partners are independent contractors eligible to earn commissions based on their volume of sales.
To become an independent distributor, individuals submit a Member application to the Company wherein they agree
that if the application is accepted they will be able to purchase products from Vemma at wholesale and market the
products to the general public. When a person becomes a distributor, he or she agrees to conduct the independent
distributorship incompliance with Vemma's policies and procedures, in addition to federal, state and local laws. If a U.S.
minor (age 14-17) chooses to become a Brand Partner of Vemma,they can do so by signing up online, by telephone, or
by mailing the original Application Form and Acceptance Form to the Company. The Vemma minor Brand Partner must
mail the oripina! U.S. Minor Application Form and the original and notarized Parent/Legal Guardian Acceptance Form
to Vemma Nutrition Company's Legal Department for review and approval. If the minor does not submit
parental/guardian consent forms within thirty(30) days their account is suspended pending termination.
No product or inventory purchase is required and there are no other fees or costs for joining. Each Brand Partner's
success or failure depends on his or her personal efforts. The Company does not make any income claims. Vemma's
compensation plan is designed to reward Brand Partners who retail and consume commissionable products, use Vemma
products in their independent businesses, sponsor and train Brand Partners, and teach their downline to do the same.
Brand Partners are not compensated for the act of sponsoring; rather, it is through the sale, personal consumption or
use of commissionable products in their businesses that Brand Partners are rewarded for their efforts.
In your complaint you stated that you cannot buy the products at any store or online. Vemma products such as Verve
Energy Drinks and Verve Energy Shots are available in some retail locations as point of purchase sales and all Vemma
products are available online at www.vemma.com. There is an extensive amount of information available on the
website at www.vemma.com. This includes information on the company and the officers, the science behind the Vemma
formulation, various awards the company has won, the compensation plan, incentive programs, nonprofit agencies we
contribute to, a weekly newsletter (Insider) as well as links to upcoming events and conventions. If there is something
you would like information on that you do not find on the website we have approximately 140 employees available to
answer any questions you may have, including the Founder

and CEO, BK Boreyko, who often contacts parents directly
when they have questions.
We appreciate the opportunity to respond to your concerns and
hope that this correspondence has provided enough
information to show that Vemma Nutrition Company does
not target high school students and is not a pyramid schem
e.
Vemma is a family oriented business built upon the highest
ethical standards.
If you have any questions please feel free to contact me.
Sincerely,
Michelle Loaner, Compliance Analyst

michelleCa~vemma.com
W 480.927.8668 ~ F 480.927.8665
8322 East Hartford Drive
vemma.cam
faceb~ok.com vernnia
twitf~r,com vemmc~
EXHIBIT 12

Send Dispute to Business
7~
B~~o
Page 1 of 2
Better Business bureau

4428 N. 12th Street
Phoenix, AZ 85014A585
602.264.52991602.798-8279
arizonabbb.org
12/22/2012
Michelle Cohen
Vemma Nu[rlUon Company
8322 E. Hartford Drlve
Scottsdale AZ 85255
Dear Michelle Cohen:

Better Business Bureau of Cenkra;, Northern and Wes[em Arizona (BBBJ reco9nlxes that a loyal customer base is valuable and would like to tall your attention to correspondence from
one of your costumers who has contacted 68B for assistance. We have assigned the faliowing complaint[O#; 9346685 for reference purposes.
Pleasa realize BBB does not Judge the validity of issues presented by a consumer, we understand lf;at there are two sides to every dispute. As part of Its mission, BBB assists businesses
and consumers Cy opening Ilnes of communication with the facliitaUon of disputes, and providing company reports to summarize how a comVany resolves any issues that may arise,
Our hopes are lhat you will recognize this BBB service as a positive effort. Our ;ryten[ is to be of assistance only to the extent that we may accomplish a fair and reasonable resolve. At
khis time, we request you review the issues presented and consider how the matter can be addressed and~or resolved.
Please provide 9BB with a written response within 7 days of the date of this letter, advising of the posltbn your company will takC If you prefer, the customer may be contacted directly
to resolve Chis matter, In which case B86 requests noti0catlon of[he outcome.
Please understand that the consumer's complaint and your response may be pubildy ponied on [he 8BB website. Please do not IncWCe any Information that personally Identifies Your
customer, BBB may edit [he complaint or your response to remove per50nally Identifia We information or Inappropriate language.
If you received this complaint via small simply click on the "Submit a Response", link locaCed on the left, when you are ready to respond. You may also send your response to
complaln[s(~4~arizorabbb.org, or by mall or fax to 602-798-279, 70 learn more about 86~'s Olspute Resolution proce55, visit hc[p://OiCly/bhbdrOrocess.
Phase contact us If you Feel you have received this letter In error..
Thank you In advance (or your attentlon fo this matter.
Sincerely,
Andrea Gartla
Your Better Business 9ureau
CUSTOMER EXPERIENCE INFORMATION
~y~y(Q~pg~ Information:
Nick P Ramon
1412 S Stare Street
Shepherd , M[ 48883
Daytime Phone. 989.82G-6519
Evening Phone: 989-506-3D63
Small: amrramon(p h~tmail.wm
The details of this matter are as follows:

Comnlalnt Involves:
Refund Or Exchange issues
oy~,kQlller's Stet .menrof the Problem;
I am Nick's mom, Nlck was approached about Vemma and moos Chp mistake of buylny info Che pyramid product. The In[itlal cost was $150 for product/shlppiny. As in most cases, Nick
was only able to Flnd one person who would buy In to this scheme. He ordered the Flrst product In October, and the next autoship product came In November. Nick Is a freshman In
cetlege and, of course, Ilke. most college kids, they want to make quick money. 1 A~dn't find out about this untf~ Nlrk received an overdraft on his November account when the autoship
came through. I, a[ that point in time (12/5/12), contacted Vemma and spoke with Kevin and cancelled the product (Goof #3904506). 1 was told that Nlck coWd only return the latest
pack.'hey would nvt give Firm a refund for the Oref proAuct that was dellve red In October. Per Kevin, he asked thet I ship i[ Fed Ex. He told me they would pay the return shipping. I
asked how they would know how much [hat was and he fold rtie they would pull It off the box, Well, Kevin never Intended [o relm7urse me for sending It Fed Ex, which was very
expensive (y28.a4). He claimed that he mean[[he intllal $SC that It cost to s~lp It. I was quite dear on what[meant and so was Kevin, but I'm sure he wanted to Bet me off the phone.
At that point In time, I cancelled Nick's debit card becuase I'm aware of how these pyramid schemes work and didn't want [hem to have access to his account any longer. 1 called back on
12j10/12 and spoke with Derek who informed me that only ;150 ~y136 + $14 Initial shlpp!nq) would De refunded. [argued with him about [he ;28.44 [hat It cost me to ship It Fed Ex,
because I touf0 have sent It moth rhea Der another way. He informed me that he was going [o listen to the conversations [hat are recorded and would le[ me know. He saltl the
hops://bluecomplaints.bbb.org/Message.aspx?msg=8191372&chk=10L97KOXoCfgYEKb... 11/9/2Q15

Page 2 of2
conversetlon was quite clear, so I asked him to send me the audio, becuase I know that I was quite clear In what 1 understood as well. Ne would not send me the audio and was quite
clear that the company woulG not allow that to happen. Derek said he was polnq to speed up the refund and forward me the confirmation. ARer severe) days of not recelwng anything
and not receiving a refund and Derek not taking my calls, 1 called aga7n and spoke with Alecla on 12/2D/12. She was very friendly and said It would take 3 - 4 weeks for a refuntl, but did
speed up [he process and had the refund deposited on 12/21/12. However, Flrstbank called [o Inform me that only #130 had been deposited (because I flied a dispute with my bank aver
Vemma, they are watcM1lnq [he account carefully), I did ask for Information on where legal matters should be sent to, and they were very reluctant and after several conversations with
her supervisor, they finally provided me an address and email (but saltl there was no phone number).[don't really want to get my lawyer Involved, so ]thought I would try this route
first. When f calved today (12/21), 1 spoke with Patti who gave me the phone number to the compliance department and inFormed me that because the one person Nick signed up
untlemeaCh Aim had re[umed the product, he only received $13~. Why was this not mentioned before? In total, [he first order was $150, and the second $150. Nick received a $25
overdraft becuase he didn't understand the autoship policy, and then It cost me $28.44 to return the produR, It cost Nick $223.44 for prod ud he cannot get rid of. I understand young
college students are adults, but 1 also believe that Vemma preys on these young adults because, although they may be Gook smart. they are not world smart. It's a lesson Nlck has
learned, but I'm hoping It will not continue to happen to other individuals. My husband and 7 operate 3 businesses and have never had a complaint, If there Is a problem, we always make
It right with the customer. That Is why we have been very successful. I also work for a marketing Flrm, so I have a problem with how this company handles their marketing and their
market to rget of young adults. Thank you for any help you can give and Happy Holidayst
Complaint Backuround
Product/Service: Vemma Drink
Purchasa Da[e: 3DJ26/2012
Vroblem Occurred: 12/5/2012
Talked to Company: 12/5/2D32
Y.evin
Purchase Price: $300.00
Disputed Amount:;223,44
~eslred Settlement:
[ would Ilke to be refunded the $28.44 [hat It cost me to return the product via Fed Ex, the 25 for the overdraft, and [would also Ilke to 6e able to return the first shipment for a re[und.
Thank you)
hops;//bluecompiaints.bbb.arg/Message.aspx?msg=8191372&chk=14L97KOXoCfgYEKb... 11/9/2015
EXHIBIT 13

Respond to Complaint
~~
BBB
Page 1 of 2
Better Business Bureau Serving Central, Northern and Western Arizona

4428 N. 12th 5[~00C, Ph02nlx AZ 85014
21? Grove Ave, PrescocC, AZ 8630]
350 W. 16th SCreet, Suite 205, Yuma AZ 85364
602-264-17211 928-772-3d 101 928-919-7940
arizonabbb.org
11/9/2015
Dear Ms. Garcia,
This letter Is In resDOnse to your carresDOndente dated December 22, 2012 re(erendng complaint ]D# 9346685 From Angie regarding Nick Ramgn.
Vemma Nutrition Company Is a direct selling company that markets dietary and nutritional supplements to customers through a network of Independent distributors referred to as "Brand
Partners." B:and Partners are Independent conCractors eligible Co earn weekly commissions based on their volume of sales.
Nick Ramon Joined Vemma on October 24, 2012 thvough a vemma Brand Partner webslte. At that time, Nick conFlrmed that he was over [he age of 187 therefore parental consent was
not required for him [o become a Vemma Drand Partner. Ai the tlme of slgnup Nlck pu rcha,ed two cases of Verve Energy Drinks, totaling 8150($136.00 + $14.00 shippirp Co Bip Rapids,
Mi). Nick also signed up for a monthly autodellvery, scheduled to process on or around the 24`^ of each month.
Vemma cFfers a generous 30 day reWrn policy, however we received no communication from Nlck Indicating that he was unhappy with the products or eervlce he received. Angie (Nick's
mother) contacted Brand Partner Services on December 5, 2012 to nogry us Chal she wanted to return Nick's November m~cer. Angle also cancelled NICK's monthly au[odel very at this
time. Documentation indite tes that due to Angle's complaint, the iNtlal shipping would be refunded to Nlck Far the November order, However he would be respon5i61e for the Charges For
returning the products back to our warehouse. Vemma does not require [hat returns be sent via FedEx, however we do recommend that n traceable means of transport he utilized as
Vemma is not responsible For returns lost in transit. Comlete policy InFormation regarding returns Is available online a[ www.vemma.com.
Brand Partner Servkes received additional commuolca[ion from Angie on December 11, 2012. Angie advised the agent that she was told that Vemma would reimburse her for shipping
the products back to us. Angle spoke Co a supervisor who Informed her that we would Issue credit For the product and original shipping charges (~ 14.00) once the return wes recelveA.
The return was received on December 18, 2012. Twenty dollars In commissions had geld out [o Nick on November 14 for the order that was now Gelnq returned; therefore a credit was
issued In the amount o! $130.00 on December 20, 2012.
[n Anpie's complaint she states that Nick received a X25.00 overdraft fee because he did not understand fhe au[odellvery policy. While Ihls Is unfortunate, Vemma is not responsible for
overdraR fees Incurred by Brand Partners Por products they purchase. Had we been nodFled to cancel the au[odelivery Dricr to November 23 vre would have been happy to cancel [he
order per Nitk'S request.
WhAe th7s Is an unfortunate Incident we take great pride in our customer service and satlsfactlon. Since Angie stated sM1e Dalc #28.44 tc reWrn ehe product [o us via FedEx, we will gladly
reimburse her for that charge as a onetime courtesy. We'll need Angie [o submit a copy of the FedEx receipt to us and we v+ill Issue the credit to her. We will no[ reimburse Nick for the
$25.00 overdraft fee or For the original order of energy drinks Nick purchased In October when he )Dined Vemma.
In response to Angle's allegations that Vemma Is a pyramid-type business, we offer Che following:
Vemma was Incorporated In September 2004 In the State of Arizona. Vemrna's parent c9mpany, New vision USA, Inc. was established In 1985 by the Boreyko family and is a proud
member of both the Direct Selling Association and better Business Bureaup of Central/Northern Arizona.
Vemma Is a dlrecPSelling marketing company that markets Its products through Independent distributors known as "Brand Partners. To become an Independent distributor, Individuals
submit a Member appUwtlon [o the Company wherein they agree that IF the application Is accepted [hey will be able [o purchase products from Vemma at wholesale antl market the
products to the general public. When a person hecomes a dlstrlb~[or, he or she agrees to conduct the Independent dis[rlhutorshlp ~n compliance with Vemma's polities and procedures, in
adCi[lon to federal, state and local laws. A distributor may earn compensation In one of two ways as a Brand Partner. First, when the distributor purchases the product at wholesale from
Vemma and sells It [o [he general pobllc, he or she reW Ins any pro0t on [he sale. Second, the Independent distributor may be geld a wmmisslon on protlutt sales directly or indlreRly
generated by the distributor, Those commissions are geld on product sales by the distributor and D~oduc[ sales by other distributors sponsored In to the distributor's sales oryanizatlon.
No commissions are paid for sponsoring or Introducing other people Into Vemma. No distributor Is obligated to particlpa[e In Vemma's marketing plan. Also, If a distributor wishes to
receive rommisslons under the marketing plan, he or she must certlry that seventy perren[ of the products previously purchased have been used for business bulldi~g purposes or sold to
or consumed by er~d users aF the products.
vemma's pu6tished polities, which each aFplicant for brand Partnership must agree to abide by, emphasizes the Company's approach and philosophy. The Introduction section of these
policies sites [he following;
The Vemma NuMdon Company !S a d/recf sa/rs company Lased !n the United States. ![ is a family oriented business built upon the lrlghest ethical standards. It combines some of[he
best direct sales features based upon Its founders' years of experience !ri the industry.
Airy company w61ch re0resents Chat a member wtll acl~Ieve flnancla/ success nVtbouf working tiu prograrn or by relying solely on the efforts of others shoWtl be disregarded, Furthermore,
any company that ties compensaflon and financial success solely [o recruiting e7fort5 rofner than actual sales fv~ ultimate use by Customers /s an INega! pyramid scheme and uHima[ely
destined to collapse.
A Vcmma Brand Partner Is an independent contractor, and like any other Independent business person, his or her success or failure depends on h!s or her perscna! el/oKS. Na direct sales
company can leBiflmately guarantee Its Irrdependen[ contractors any partfcu/ar income, prof/t or success. The Company provldea an opportun![y Poi Members and Customers [o enrich tAe
ouaUry of their !Ives bV using the Vemma NutAtlon ?rogram. The Company also provides equal access fo hnandai success for any Brand Partner willing fo properly work the program.
Vemma has also adopted and enforces other policies to ensure compliance with federal and state laws and to make certain Chat many o`the abuses commonly associated with Illegal
pyramids, such as inventory loading, cannot occur. The Company also has a libeal buy-back policy whereby the Company will buy back all DroduR in resalable condition purchaseG by
the distributor and provide a 100% unconditional, full money-back guarantee. Moreover, Brand Pzrtners may [enninate their dis[rlbutorshlp at any time, for any reason. Vemma's
pu611sheJ policies further provide:
Policy Provisions
In order to maintain the Integrity of the Vemma program and Co assist and ensure cornpllance w/th federal, sfa te, provincial, iota!and applicable non-US national, state, Iederal or iota!
laws, pnllG~s or regulations, the following policies have been adopted and will be strictly enforced.
Polities to Ensure Compliance With State and Fedora{ Laws
Invert[Dry loading is Arohlblted, Vemrna Is a company built on the quality o1 ifs products and fhe/r use by Members and Nsfomers are str/ctly Drohfb7ted from purchasing products or
encouraging other Members [o urchase producK solely for the purpose of quafi(ylry for commissions or bonuses.
Each member wishing to receive comm/srlons under Vemma's market/ng plan must certlly that seventy percent(7D/o) of products previously purchased have been svld to or consumed
by ertd users, and keen accurate records of mogthly safes [o spedfic consumers. These records will be subJeU fo inspection by the Company upon ~easona6le notice. Each order placed by
a Member constitures the Member's certlfica tlon ro Vemma of the foregoing. Each member acknowledges that Vemma fs relying on such certifications !n pa ying such Member
tommissIons.
Tie company wffl liberally apply Its buy-back policy on rescission or termination by the brand Partner of h15 or her Team Memberslrlp, but Vemma w!1! not repurchase products or issue
refunds on products certllied as having been consumed or sold. Falsely representing the amount of product sold or consumed 7n order [o advance In the marketing plan shall be grounds
for termination.
https://bluecomplaints.bbb.org/Message.aspx?msg=8244029&chk=I54JHh%2b 1j4wGJ73J... 11/9/2015

- ~
Page 2 of 2
Enfaller 0.esponslbll(tiee
There Is no "secret" Involved !n Vemma or In any business. Those who enrol!, but who da not help new Members develop Cheir bvsioess, meet with llmlfed success. Therefore, a
responsiblllty of[he enrol/er is to work w/tA new Members, helpinq them team the business and encoura9~n0 them durinp the crlt/cal early months. Enrollers are not required to carry
Inventory oI products or sales a7ds for new Membe4.
Any Member who enrolls other Members must iulf!!! the obliyatlon of perlorminfl a bona fide Supervisory, distr/butlon and Shcing funcNOn fn the sale or delivery of product to the ultimate
Customer and !n the [ralnlnp of those enrolled. A Member must have ongoing con[ar1, communlca[lon and management supervision w/th his or her safes organization. Examples o(such
supervlslort include, but are not llm!!ed to: product presentaHOn, reta/I sales traMing (In the county/es where retail sNf/np rs allowed), newsletters, wNKen correspondence, personal
meetlnps, tNephone contact, voice mall, electronic ma!!, training sessions antl accompanY~~B jndlvlduals to Vemma trarning. Members should be able to provide evidence to Vemma, as
requested, of ongolnD ~ulRflment ofsDOnsor resAOns7bllRles when asked by Vemma.
Vemma's compensation plan is designed to reward Brand Partners who retail and consume commisslonable products, use Vemma products In their independent businesses, sponsor antl
train Brand Partners, and teach their downline to do [he same. Brand Partners are not compensated For the act of sponsoring; rather, IC Is through the sale, personal consumption or use
of commissionable products In their businesses that Brand Partners are rewarded for their eFforts.
Ultimately, among other things, Vemma's pollees, and the enforcement thereof, ensure that any compensation received by Brand Aartners are derived from the sale of Vemma's
products, rather than the sponsoring or Introduction of people Into the Company, Therefore, Vemma Nutrition Company does not constitute an Illegal pyramid scheme,
We appreciate the oppoKUNty [o respond to Ihls complaint and hope that Angle finds this a satlsFaRory resolution to her complaint.
IF you have any questions please Feel free to contact me at (4B0) 927-8668.
51ncerely,
Michelle Rattner, Compliance Analyst

mlchelle nvemma.com
W -08.927,8668 (F 480,927.8655
8322 East Hartfiord Drive
vemma.rnm
facebook,mrn/vemma
twllter.com/vemma
https://bluecomplaints.bbb.org/Message.aspx?msg=8244029&chk=I543Hh%2b1j4wGJ73J... 11 J9/2015
EXHIBIT 14
Sen[: 1/16/2013 4:38;40 AM

From r
W setter Business sureau

To:
Yvette S, Cancel ;Handler
Subject.
ThYs complaint requires action on your part, After reading this message -click here to view your options.
fhls message oiiginnlly read on 1/16/7013 by BBHrn~~~emma,com
BetCer 8uslness bureau

4428 N. 12th Street
Phoenix, AZ BSOlq-QSBS
602-264-5299 1 602-798-8279
B~~~
arizanabtrb.org
01/16/2013
Michelle Cohen
8322 E. Hartford Drive
Scottsdale AY 85255
Dear Michelle Cohen
Better Business Bureau of Central, Northern and Western Arizone (BBB) recognizes that a loyal customer base is valuable and
would Ilke to tali your attent{on to correspondence from one of ypur customers who has contacted BBB for assistance. We have
asslgnetl the following complaint ID#: 9379211 For reference purposes.
Please realize BBB does not judge the validity of Issues presented by a consumer; we understand that there are two sides to every
dispute, As part of Its mission, BB6 assists businesses and consumers by opening Ilnes of communication with the facilitation of
disputes, and providing company reports to summarize how a company resolves any Issues that may arise,
Our hopes are that you will recognize this BBB service as a positive effort. Our Intent Is to be of assistance only to the extent that
we may accomplish a fair and reasonable resolve. At this time, we request you review Che Issues presenCed and consider how Che
matter can be addressed and/or resolved,
Please provide BBB with a written response wlthln 7 days of the date of this letter, advlsing of the posltlon your company will take.
If you prefer, the customer may be contacted directly to resolve this matter, In which case BBB requests notification of the
outcome,
Please understand that the consumer's complaint and your response may be publicly posted on the BBB webslte. Please do not
Include any Information that personally Identifies your customer, B6B may edit the complaint or your response to remove
personally Identifiable Information or Inappropriate language.
If you received this complaint via email simply click on the "Submit a Response", Ilnk located on the left, when you are ready to
respond, You may also send your response to complaints@arizonabbb.org, or by mall or fax to 60Z-798-8279. To learn more about
BBB's Dispute Resolution process, visit http://blt.ly/bbbdrprocess.
Please contact us If you feel you have received this letter In error:
Thank you In advance for your attention to this matter,
Sincerely,
Alexandria Nock
Your Better Business Bureau
Customer infermatlon:
Mike Gleason
80 Dundas Street East
Toronto , ON M5B2P CANADA
E-mall: mlkegleeson007@yahoo,ca
The details of this matter ara as follows:
Advertlsing Issues
~,yetomor~a Statement et the Problem:

Vemma operates as a vlrtuai pyramid scheme, where Income Is prlmarlly derived from slyning up new members rather than sales
oFactual products.
omnlalnt Backa~Q~nd:
Product/Servica~
Purchase Price: X0.00

DlBputed Amounts $0.00
pes~red Settlement:
Admit to pyramid scheme es deFlned above.
Content wfJl be sent to eing Translat+on Services far translation purposes, ~91i8h
What is the next step'?

B6B awaits your response to a customer's exparlence with your company.;
Submit a Response
w1
~...J
7fa~8lat@
EXHIBIT 14
Sen[: 1/16/2013 4:38;40 AM

From r
W setter Business sureau

To:
Yvette S, Cancel ;Handler
Subject.
ThYs complaint requires action on your part, After reading this message -click here to view your options.
fhls message oiiginnlly read on 1/16/7013 by BBHrn~~~emma,com
BetCer 8uslness bureau

4428 N. 12th Street
Phoenix, AZ BSOlq-QSBS
602-264-5299 1 602-798-8279
B~~~
arizanabtrb.org
01/16/2013
Michelle Cohen
Scottsdale AY 85255
Dear Michelle Cohen
Better Business Bureau of Central, Northern and Western Arizone (BBB) recognizes that a loyal customer base is valuable and
would Ilke to tali your attent{on to correspondence from one of ypur customers who has contacted BBB for assistance. We have
asslgnetl the following complaint ID#: 9379211 For reference purposes.
Please realize BBB does not judge the validity of Issues presented by a consumer; we understand that there are two sides to every
dispute, As part of Its mission, BB6 assists businesses and consumers by opening Ilnes of communication with the facilitation of
disputes, and providing company reports to summarize how a company resolves any Issues that may arise,
Our hopes are that you will recognize this BBB service as a positive effort. Our Intent Is to be of assistance only to the extent that
we may accomplish a fair and reasonable resolve. At this time, we request you review Che Issues presenCed and consider how Che
matter can be addressed and/or resolved,
Please provide BBB with a written response wlthln 7 days of the date of this letter, advlsing of the posltlon your company will take.
If you prefer, the customer may be contacted directly to resolve this matter, In which case BBB requests notification of the
outcome,
Please understand that the consumer's complaint and your response may be publicly posted on the BBB webslte. Please do not
Include any Information that personally Identifies your customer, B6B may edit the complaint or your response to remove
personally Identifiable Information or Inappropriate language.
If you received this complaint via email simply click on the "Submit a Response", Ilnk located on the left, when you are ready to
respond, You may also send your response to complaints@arizonabbb.org, or by mall or fax to 60Z-798-8279. To learn more about
BBB's Dispute Resolution process, visit http://blt.ly/bbbdrprocess.
Please contact us If you feel you have received this letter In error:
Thank you In advance for your attention to this matter,
Sincerely,
Alexandria Nock
Customer infermatlon:
Mike Gleason
80 Dundas Street East
Toronto , ON M5B2P CANADA
E-mall: mlkegleeson007@yahoo,ca
The details of this matter ara as follows:
Advertlsing Issues
~,yetomor~a Statement et the Problem:

Vemma operates as a vlrtuai pyramid scheme, where Income Is prlmarlly derived from slyning up new members rather than sales
oFactual products.
omnlalnt Backa~Q~nd:
Product/Servica~
Purchase Price: X0.00

DlBputed Amounts $0.00
pes~red Settlement:
Admit to pyramid scheme es deFlned above.
Content wfJl be sent to eing Translat+on Services far translation purposes, ~91i8h
What is the next step'?

B6B awaits your response to a customer's exparlence with your company.;
Submit a Response
w1
~...J
7fa~8lat@
EXHIBIT 15
Michelle Loaner
From:
Sent:
To:
Subject:
~
~ t,v~ A 1~~~ _ _ 1_
complaints@our-bbb.com
Ivy 'Y'1~3~1r'
~\.V
Monday, January 21, 2013 9:29 AM
Michelle Lottner
Copy of Response for BBB Complaint #9379211
DeAr Ms. Nock,

This letter is in response to your correspondence dated January 16, 2013 regarding complaint ID#9379211 from
Mike Glaeson,
Mr. Gleeson's complaint states that Vernma operates as a virtual pyramid scheme, where income is primarily
derived from signing up new members rather than sales of actual products.
In response to Mr. Gleeson's claim, Vernma provides the following response:
Vemma was incorporated in September 2004 in the State of Arizona. Vemma's parent company, New Vision
USA,Inc. was established in 1995 by the Boreyko family and is a proud member of both the Direct Selling
Association and Better Business Bureaus of Central/Nt~rthern Arizona. Both New Vision and Vemma strive to
be good corporate citizens ofthe State of Arizona, and at all times comply with any and all applicable laws and
regulations.
Vemma is adirect-selling marketing company that markets its products through independent distributors known
as `Brand Partners." To become an independent distributor, individuals submit a member application to the
Company wherein they agree that if the application is accepted they will be able to purchase products from
Vemma at wholesale and market the products to the general public. Importantly, there is no fee or cost to
become
a Vemma Brand Partner, When a person becomes a distributor, he or she agrees to conduct the independent
distributorship in compliance with Vemma's policies and procedures, in addition to federal, state and local laws,
A distributor may earn compensation in one oftwo ways as a Brand Partner, First, when the distributor
purchases the product at wholesale from Vemma and sells it to the general public, he or she retains
any profit on the sale. Second, the independent distributor may be paid a commission on product sales directly
or indirectly generated by the
distributor, Those commissions are paid on product sales by the distributor and product sales by other
distributors sponsored in to the distributor's sales organization. Please note, no commissions are paid for
sponsoring or introducing other people into Vemma. No distributor is obligated to participate in Vemrna's
marketing plan. Also, if a distributor wishes to receive commissions under the marketing plan, he or she must
certify that seventy percent of the products previously purchased have been used for business building purposes
or sold to or consumed by end users ofthe products.
In summary, Vemma is in no way an illegal marketing plan, and has no indicia of such a plan under any
applicable federal, state, or local law, We would be happy to provide further information in that regard. We
appreciate the opportunity to address any such concerns.
Sincerely,
Michelle Loaner
michellena~yemma.com
(p)480-927-8668
(fl 480-927-8665
EXHIBIT 16

Page 1 of2
6@(fCf-({tlLalYC54~311f~fd~
~Q~E,
4420 N. 12th S[reet

Phcenlx, qZ 85014-4585
602-264-5299 160Z-798-8279
erlxonab6b.orq
62/07/2013
Michelle Cuhen
Scottsdale nZ 85255
Dear Michelle Cohen.
Bet[er Business Bureau of Cenral, Northern and Western Arizona (BBB) re[ognizes that a loyal customer base Is valuable and would Ilke to call your attention to correspondence from
one of your customers who has contacted 8B6 for assis[ante. We have assigned the following complain[ ID#: 9412328 for reference purposes.
Please realize BBB does not JuCpe the validity o!issues presented by a consumer; we understand :hat there are two sides[o every dispute. As part of Its mission, BBB assists businesses
and consumers by opening Ilnes of commuNcatlon with the facllltatlon o(dlsputes, and providing company reports to summarize how a company resolves any Issues that may arise.
Our hopes are that you wll~ recognize this 806 service as a positive effort. Our Intent Is to be of assistance only to the extent that we may accomplish a fair and reasonable resolve. A[
this tlme, we request you review the Issues presented and consider how the matter can 6c adtlressed and/or resolved.
Please provitle BBB with a written response within 7 days of the date of this letter, advising of the position your company will take. 1f you prefer, the customer may be contacted dlrecUy
to resolve Chls matter, In which case BBB requests notlFlcatlon of the outcome.
Please understand that the consumer's comD~alnt and your response may be publldy posted on the BBB webslte. Please do not incYude any Information [hat personally Identifies your
customer. B88 may edit the complalnl or your response to remove personaily Identlflable inlormatfon ar inappropriate language.
If you received this complain[ via email simply click on the "Submit a Response", Ilnk located on the left, when you are ready Co respond. You may also sentl your resDOnse to
wmvlalnts~arixonabbb.:org, or by mall or fax [0 60Z-798.8278. To learn more about BBB's Dispute ResoWgon process, Nslt http://bl[.iy/6bbdrprocess.
Please contact us IF you Feel you have received this letter In error.
Thank you In advance Far your attention to this matter.
Sincerely,
Alexandria Nock
Your Better Business bureau
CUSTOM@R EXPERIENCE INF00.MATION

('ygtnmer Snformation:
Amy C Dunayan
1408 West Maln St.57
Jefferson Clty , MO 65109
Daytime Phone:(573) 338-24Y7
Evening phone: (573) 636-6122
E-mall: amydunagan~msn.com
7pe details of this matter are es follows:

Complaint Involves:
Advertislnp Issues
~uatnmer's Statement of the Problem:
I have been repeatedly contacted by both email and cell phone by marketers that left Nerballfe and startetl with Vemma. I contacted Vemma when they started and they denied having
those members as part of Chelr mmDa ny. They have my number and have been sending automated calls to IC promoting their business. I am certain It is members of Vemma because
they have sent me Ilnks [o their websi[e and tonight a text message promo[Inq It. They are supposedly an MLM company, but I don't see these people trying to sell any produR. They
repeatedly wan[ you to buy In and be a part of their team. It Is a pyramid scheme and they are at[emptinp It with another company. 1 believe It Is very unscrupulous to take numbers
with you and continue to harrass people when they have not contactetl you.
Complaint Ba~kQ~gund:
Vroduct/Service:
Problem Occurred: 1/10/2013
Talked to Company: 1/78/2013
https://bluecomplaints.bbb.orglMessage.aspx?msg=8526200&chk=V6AAI~EyM6TKeGV... 11/9/2015
F

Page 2 of 2
Purchage PAta: $0.00

Disputed Amount: 50.00
Desired Settlement:
I want them to stop and[do not think they should be allowed to continue this practice. Some people will say yes just to pet them to srop calllnp and I think that Is wrong.
https://bluecomplaints.bbb,org/Message.aspx?msg=8526200&chk=V6AAKEyM6TKeGV... 11/9/2015
EXHIBIT 17

~~
B~~Q
Page 1 of 1
better Business Bureau Serving Central, Northern and Western Arizona

4428 N, 12th Stree4 Phoenix AZ 85014
213 Grove Ave, Prescott, AZ 86301
350 W. ifith Street, Suite 205, Yuma AZ 85364
602.26a-1721 X928-772.3A10 19z8.919-7940

arizonabbb.orp
11/9/2015
Dear Ms. Nock,

The letter Is In response to your correspondence dated February 7, 2013 regardlnp complaint 9412328 from Amy Dunapan
As you may be aware, Vemma Nutrition Company Is a direct selling company that markets dietary and nutritional supplements to customers through a netwoAc of Independent
distributors referred to as "Brand Partners." Brand Partners are independent contractors eligible to earn weekly commissions based on their volume of sales,
In Ms. Dunagan's complaint she stated she was receiving calls from a forcner HerballFe distributor, however she did not Include [he name of the person wha ha0 been contadlnq her. I
contacted Ms, Dunapan for more Infortna[lon, at which time she provided the name of Heldl Cralq. I was unable to locate a Heidi Cralp as a Vemma Brand Partner, however, recently a
group of former Herhallfe distributors did Joln Vemma so we contacted [he leader of that group. That leader was notlFled of Che ~omplalnt we received and was advised that any calls to
Ms. Dunagan must be dlscontlnued Immediately. We received a response hack on February 15 advising that Ms, Dunagan was a former Herballfe dlstribut~r and that on February 6, 2013
Heidi Cra ly emalled Ms. Dunagan notifying her that her name had been deleted from their database. When Ms. Dunagan received one more email from Heldl Cralq, that Is when she filed
her B6B complalnL In contacting Heidi Craig, she advised us and Ms. Dunagan that there was a backlog of emafls that had been sent and could not be stopped, but Ms. Dunagan should
not receive any additional emalls after that. To my knowledge this Issue has been resolved and Ms. Dunagan has not received any additional emalis or pone calls from Heidi Craig.
In response to Ms, Dunagan's claim that Vemma Is a pyramid scheme we offer [he following:
Vemma was incorporated In September 2004 In the State of Arizona. Vemma's parent company, New Vlslon USA, Inc. was established In 1995 by the Boreyko family and Is a proutl
member of both the Dlrec[ Selllnq Association and Better Business BureauC~ of Central/Northern Arizona. Both New Vision and Vemma strive to be good corporate citizens of the State of
Arizona, and at all time s comply with any and all applicable laws and regulations.
Vemma Is a direct-selling marketlnq company that markets Its products through Independent distributors known as "Brand Partners." To become an Independent distributor, individuals
suGmit a member application to the Company wherein they agree that If the application Is accepted they will be able to purchase products from Vemma at wholesale and market the
products to the general pu611c. Importantly, there Is no fee or cost to become a Vemma Brand Partner, When a person becomes a tlistrlbutoq he or she agrees Co conduct the
Independent dlstrlbu[orshlp In compliance with Vemma's policies and procedures, In addition to fEderal, state and local laws. A distributor may earn compensation In one of two ways as a
Brand Partner. First, when the distributor purchases the product at wholesale from Vemma and sails It to the general public, he or she retains any proFlt on the sale. Second, the
Independent distributor may be gold a commission on product sales directly or IndlrecHy generated by the dlstrlbutoa Those commissions are paid on product sales by the dlshlbutor and
product sales by other Olstrlbutors sDansared In to the distributors sales arganlzatlon. Please note, no commissions are gold for sponsoring or Introducing other people Into Vemma. No
distributor Is obligated to participate in Vemma's marketing plan. Also, If a Glstrlbutor wishes to receive commissions under the marketing plan, he or she must ceKlry that seventy
percent of the products previously purchased have been used !or business building purposes or sold to or consumed Oy end users of[he products.
In summary, Vemma Is In no way an Illegal marketing plan, and has no Indicla of such a plan wider any appllcaCle federal, state, or local law. We would be happy to provide Further
Information In that regard. We appreciate the opportunity to address any such concerns.
Pease feel free to contact me with any yuesllon you may have.
Sincerely,
Michelle Loaner
Legal Compliance Dept
480-927-0668 (phone)
rnicheL'eC~vemma,com (email}
https://bluecomplaints.bbb.org/Message.aspx7msg=8627676&chk=GOTH8uTSVzCMI%2... 11/9/2015
EXHIBIT 18
April 4, 2013
Alexandria Nock
Better Business Bureau
4428 N. 12~' Street
Phoenix, AZ 85014-4585
Dear Ms. Nock,
This letter is in response to your correspondence dated April 2, 2013 regarding complaint ID#9485820
from Kristina Brennan.
Vemma Nutrition Company is a direct selling company that markets dietary and nutritional supplements
to customers through a network of independent distributors referred to as "Brand Partners." Brand
Partners are independent contractors eligible to earn weekly commissions based on their volume of sales.
Ms. Brennan joined Vemma on January 24, 2013 with her minor son Liam, at which time they set up a
monthly autoship order and placed their first order for two cases of Verve Energy Drinks. A notarized
minor application was submitted and approved on February 5, 2013 approving Liam as a Vemma Brand
Partner. A commission of $20.00 was paid to Kristina and Liam on February 20, 2013. A second order for
two cases of Verve Energy Drinks processed on February 23, 2013. There had been no request to cancel
the monthly autoship order at this time.
',
On March 7, 2013, Ms. Brennan called in to the Vemma call center requesting to return the February
order under Vemma's thirty (30) day return policy. Return information was provided to her and the
returned order was received in Vemma's warehouse on March 13, 2013. We generally advise Brand
Partners that credits are processed within 7-10 business days(10 business days would have been March
27). The credit process did take a bit longer than usual, but the process was started by our returns
department on March 24, 2013 and a credit in the amount of $136.00 was issued on April 2, 2013. The
amount of $136.00 reflects the order amount minus shipping ($14.00 shipping).
In response to Ms. Brennan's allegations that Vemma is a pyramid-type business, we offer the following:
Vemma was incorporated in September 2004 in the State of Arizona. Vemma's parent company, New
Vision USA,Inc. was established in 1995 by the Boreyko family and is a proud member of both the Direct Selling
Association and Better Business Bureaus of CentraUNorthem Arizona,
Vemma is adirect-selling marketing company that markets its products through independent distributors known as
"Brand Partners." To become an independent distributor, individuals submit a Member application to the Company
wherein they agree that if the application is accepted they will be able to purchase products from Vemma at
wholesale and market the products to the general public. When a person becomes a distributor, he or she agrees to
conduct the independent distributorship in compliance with Vemma's policies and procedures, in addition to federal,
state and local laws. A distributor may earn compensation in one oftwo ways as a Brand Partner. First, when the
distributor purchases the product at wholesale from Vemma and sells it to the general public, he or she retains any
profit on the sale, Second, the independent distributor may be paid a commission on product sales directly or
indirectly generated by the distributor, Those commissions are paid on product sales by the distributor and product
sales by other distributors sponsored in to the distributor's sales organization. No commissions are paid for
sponsoring or introducing other people into Vemma. No distributor is obligated to participate in Vemma's marketing
plan. Also, if a distributor wishes to receive commissions under the marketing plan, he or she must certify that
seventy percent ofthe products previously purchased have been used for business building purposes or sold to or
consumed by end users of the products.
Vemma's published policies, which each applicant for Brand Partnership must agree to abide by, emphasizes the
Company's approach and philosophy. The introduction section of these policies states the following:
The Lemma Nutrition Company is a direct sales company based in the United States. It is afamily oriented business
built upon the highest ethical standards. It cornbirres some ofthe best direct salesfeatures based upon itsfounders'
years ofexperience in the industry.
Any company which represents that a niernber will gchievefinancial success without working the program or by
relying solel~~ on the efforts ofothers should be disregarded. Furthermore, any company that ties compensation and
financial success solely to recruiting efforts rather than actual salesfor ultimafe use by Customers is an illegal
pyramid scheme and ultimately destined to collapse.
A Vemma Brand Partner is an independent contractor, and like any other independent business person, his ur her
success orfailure depends on his or her personal efforts. No direct sales company can legitimately guarantee its
independent contractors any particular income, profit or success. The Company provides an opportunityfnr
Members and Customers to enrich the quality oftheir lives by using the Vernma Nutrition Program. The Company
also provides equal access tofinancial successfor any Brand Partner willing to properly work the program.
Vemma has also adopted and enforces other policies to ensure compliance with federal and state laws and to make
certain that many of the abuses commonly associated with illegal pyramids, such as inventory loading, cannot occur.
The Company also has a liberal buy-back policy whereby the Company will buy back al] product in resalable
condition purchased by the distributor and provide a 100% unconditional, full money-back guarantee. Moreover,
Brand Partners may terminate their distributorship at any time, for any reason. Vemma's published policies further
provide:
Policy Provisions
In order to maintain the integrity ofthe Vemma program and to assist and ensure compliance withfederal, state,
provincial, local and applicable non-US national, state,federal or local laws, policies or regulations, thefollowing
policies have been adopted and will be strictly enforced.
Policies to Ensure Compliance With State and Federal Laws
Inventory loading is prohibited. Yemma is a company built on the quality ofits products and their use by Members
and Customers are strictly prohibitedfrom purchasing products or encouraging other Members to purchase
products solelyfor the purpose ofgaralrfyingfar commissions or bonuses.
Each member x~ishing to receive commissions under Vemma's marketing plan must cert~ that seventy percent
(70%)ofproducts previously purchased have been sold to or consumed by end users, and keep accurate records of
monthly sales to specific consumers. These records will be subject to inspection by the Company upon reasonable
notice. Each order placed by a Member constitutes the Member's certification to Yemma oftheforegoing. Each
member acknowledges that Vemma rs relying on such certifications in paying such Member commissions.
Tlie company tivill liberally apply its buy-back policy on rescission or termination by the Brand Partner ofhis or her
Team Membership, bait Vemma will not repurchase products or issue refunds on products certified as having been
consumed or sold. Falsely representing the amount ofproduct sold or consumed in order to advance in the
marketing plan shall be groundsfor termination.
***
Enroller Responsibilities
Tlxere is no "secret" involved in lemma or in any business. Those wlzo enroll, but who do not help new Members
develop their business, meet with limited success. Therefore, a responsibility ofthe enroller is to work with ne~v
Members, helping them learn the business and encouraging them during the critical early months. Enrollers are riot
required 10 carr~~ inventory ofproducts or sales aidsfor new Members.
Any Member who enrolls other Members mustfulfill the obligation ofperforming a bonafide supervisory,
distribution and sellingfunction in the sale or delivery ofproduct to the ultimate Customer and in the training of
those enrolled. A Member must have ongoing contact, communication and management supervision with his or her
sales organization. Examples ofsuch supervision include, but are not limited to: product presentat~az, retail sales
h~arning (in the countries where retail selling is allowed), newsleners, written correspondence, personal meetings,
telephone contact, voice mail, electronic mail, trainingsessions and accompanying individuals to Vemma training.
Members should be able to provide evidence to Vemma, as requested, ofongoingfulfillment ofsponsor

responsibilities when asked by Yemma.
***
Vemma's compensation plan is designed to reward Brand Partners who retail and consume commissionable
products, use Vemma products in their independent businesses, sponsor and train Brand Partners, and teach their
downline to do the same. Brand Partners are not compensated for the act of sponsoring; rather, it is through the sale,
personal consumption or use ofcommissionable products in their businesses that Brand Partners are rewarded for
their efforts.
Ultimately, among other things, Vemma's policies, and the enforcement thereof, ensure that any
compensation received by Brand Partners are derived from the sale of Vemma's products, rather than the sponsoring
or introduction of people into the Company. Therefore, Vemma Nutrition Company does not constitute an illegal
pyramid scheme.
We appreciate the opportunity to respond and hope that Ms. Brennan finds this a satisfactory response to
her complaint.
If you have any questions please feel free to contact me at(480)927-8668.
Sincerely,
Michelle Cohen, Compliance Analyst

michelleCc~vemma,com
W 480.927.8668 ~ F 480.927.8665
8322 East Hartford Drive
vemma.com
facebook,com/vemma
twitter.com/vemma
EXHIBIT 19

~~
~~~o
Page 1 of 2
9Etter 8uslne55 Bureau

4428 N. 12[h Stree[
Phoenlz, AZ 85014-4585
602-264-5299 ~ 602-798-8279
arizona66b.org
08/27/2013
Michelle LOCCner
Vemma Nutrltlon Company
8322 E. Hartford Orlve
Scottsdale AZ 85255
Dear Michelle l.ottner,
Better Business Bureau o! Central, Northern and Western Arizona (BBB) recogNxes that a loyal customer base Is valuable and would like to call your altentlon [o correspondence from
one of your customers who has con[aded BBB for assistance. We have assigned the following ~romplalnt ID#: 4683077 for reference purposes.
Please realize D6~ does not Judge the validity of Issues presented by a consumer; we understand Chat there are two sides to every dispute. As par[ of Its mission, 66B assists businesses
and consumers by opening lines of commuNCation wltn the fa[Ilitatlon of disputes, and p~ovldlnq company reports to summarlre how a company resolves any Issues that may arLSe.
Our hopes are that you will recognize this BBB seMCe as a pos~tive effort. Our intent is to 6e of asslstante only to the extent that we may atcomplisb a Fair and reasonable resolve. A[
this time, we request you review the Issues presented and consider how the matter can Ae atldressed and/or resolved.
Please provide BBB with a wrltte~ response within 7 calendar days of the date of this letter, advising of the position your company will take. If you prefer, the customer may be contacted
dlre~tly to resolve thVs matter, In which case 6B8 requests notiflcaiion of the outcome.
Please understand Chat the consumer's complain[ and your response may be DubIIGy posted on the BBB webslte. Please do not Include any in Formation that personally IdentiFles your
customer, BB9 may edit the complaint w your response to remove personally identifiable Information or Inappropriate language.
If you received this complaint wa email simpty Clck on [he "Submit a Response", Ilnk loca[ed on the left, when you are ready to respontl. You may also sen0 your resporse to
complaint,C~arizonabb G..org, or by mall or fax to 60~-798-8279. To learn more about BBB's Dispute Resolution process, visit hitp;J/bit.ly/b6bdrprocess.
Please contact us If you Feel you have received this leper In error,.
Thank you In advance For your attention to ChlS matter.
Sincerely,
Samantha Oberdank
Customer Information:
Elsa Vigna
?5 Lone Oak Roa6
~3askiny Ridge , NJ 07920
Daytime Phone: 9D8 647 2U6)
"c-mall: bella_5472~verizon.net
The details of this matter are ae follows;

Comolalnt Tnvnlves:
Selling Vradlces
C ~sto~ mrr'~ ~[~pment of the Prnhlem:
This company is solitltin9 mcney from high school stuCen[s(#500) and putting high pressure sales, and the claim of making alot of money as part of the enticement. This can not be
legal, to yel teenaged kids, not even ?d yet, [v sell [heir product, Not actually selling the product Iteself, but getting their friends to buy into the company for $500 and then turning
around and trying to solidi their friends and dassma[es to do the same whkh Is how you make money, It Is the standard ponxilpyramld scheme. The problem I have is them targeting
MINORS to do their dirty work. Adulls know beC[er, kiCs do not.
Lomolaint Background:
Product/Service:
Problem Occurred: 8/23/2013
Model:
fiecamjt Nnenbet;
Order Number;
%2bgo420g3SyMW... 11/9/2015
https:/ibiuecomplaints.bbb.org/Message.aspx?msg=10063579&chkj

Page 2 of 2
Talked to Company: 8/23/2013
7urthase Price; $0.00

Disputed Amount: $O.DO
Desired Settlemente
[ would Ilke the company to pull out of Basklnq RIApe N] and stop enticlnp the Hlph School kids and to cease any and all operations with my town and any towns surrounding the
Immediate area
https;//bluecomplaints,bbb.org/Message.aspx?msg=10063579&chkj%2bgo420g3SyMW.., 11/9/2015
EXHIBIT 20

Respond to Ca~nplaint
~!
Yage 1 of 1
Bet[er Business Bureau Serving Cen[ra 1, Northern and Western Arizcna

4428 N. 12th SCrCet, PhOenlx AZ BSQ14
213 Grove Ave, Prescott. a2 86301
350 W. iGth Street, 5ul[e 205, Yuma AZ 85364
602-264-17211 928.772-3410 926-919-7940
arizonabb6.orp
BYE
11/9J~015
Dear Ms. Oberdank,
This letter Is In response to your mrrespondente dated August 27, 2a 13 regardinp complaint 1D 9683077 from Lisa Vipna
Vemma Nutrition Company Is a direct selling company that markets dietary and nutritional supplements to customers through a network of independent distrl6u[ors refereed to as "Brand
Partners." Brand Partners are independent contractors eligible to earn weekly comrtilsslons based on their volume of sales. Vemma has been offering a minor program whkh allows
minors between the ages of 14-17 to Joln Vemma with a notarized parental/guardian consent form.
In Ms. Vigna's comptalnt she stated that Vemma Is solltlting high school students with claims of making a lot of money. Due to these types of mmpialnts from parents whose rtiinor
children have fraudulently signed up as over 18, we are dlscon[InuinQ our minor proq ram and the new polity (below) goes into effect nn September 1. ]n additlon, Vemma Brand
Partners are prohi6iced from making Income clairns. Our poGcles stale the followlnp:
MINORS
Elfec[ive September 1, 2013, Vemma will no longer allow minors between the apes of 14-17 Lo become Vemma brand Partners. I( you were a minor Vemma Brand Partner in goatl
standing prior [o September i, 2D13 and submlCed the proper legal doamen[s, you will be allowed to keep Your Vemma membership. Once the Vemma minor turns the age of majorlly
In the state which Chey reside, the Parent/Legal Guard tan will relinquish ell rights and ownership of the Vemma minor account [o the Brand Partner. The Brand Partner shall be solely
responsible for the Vemma account and agrees [o abide by the terms end conditions set forth In the Brand Partner Application and Vemma's policies and procedures IncarDOrated herein.
INCOME REPRESENTAT10N5
Unless [he Company's prior written approval Is obtained, projections of Income eamings and any Do[entlagy misleading income representatlons are strictly prohibited. The Flnandal
success or a Brand Partner depentls entirely upon that brand Partner's Individual eFfort, dedication, and the treininq and supervision the Brand Partner provides to his or fier downline and
Vemma business,
In response fo +1s. Vigna's claim that Vemma Is a DYramld/ponzl scheme we provide the following Information so that Ms. Vigna Is better Informed about Ven,ma Nutrition Company:
Vemma was Incorporated in September 2004 in [he Sate of Arizona, Vemma's parent company, New Vlslon USA, Inc. was established In 1995 by the eoreykc Family and is a proud
member of both [he UlrecC Selllnq Association and better Bwiness BureauCN of CentrallNOrthem A~IZOna. Both New Vlslon and Vemma strive to be good corporate cfllzens of the Smote of
Arizona, and at all tlrnes comply with any and all applicable taws and regulations.
Vemma IS adirect-selling marketlnq company Chat markets its products through Independent dlStNbutore known as "Brand Partners." To become an Independent distributor, individuals
submit a member application to the Company wherein they agree that If the application is accepted they will be able to purchase products From Vemma at wholesale and market the
produRS to the general public, importantly, there is no fee or cos[[o betome a Vemma Brand Partner. When a person becomes a distributor, he or she agrees Co conduct the
Independent distributorship In compllznce with Vemma's policies and procedures, In addition [o federal, state and local laws. A dlstrlbut~r may earn mmpensa[ion in one of two ways as a
Brand Partner. First, when the distributor purchases Che product at wholesale from Vemma and sells It to [he genarel public, he or she retains any profit on [he sale. Second, the
Independent dlsfributor may be paid a commission nn product sales directly or Indirectly generated by the distributor. Those commissions are paid on produR sales by the distributor and
product sales by other distributors sponsored In co the tllstrlbutors sales organization, Please note, no commissions are paid for sponsoring or Introducing other people Into Vemma. No
distributor Is obligated to participate In Vemma's marketing plan. Also, IF a distributor wishes to receive mmmissions under the marketing plan, he or she must certlry that seventy
pe2ent of [De produttr previously purchased have been used for baslness building purposes or sold to or consumed by end users of the products.
In summary, Vemma Is in no way an Illegal marketing plan, and has no lndlda of such a plan under cny applicable federal, state, or local law. We would by happy to provide further
InPorma[ion in that regard.
We appreciate the opportunity to respond to Ms, Vlpna's complaint and tontems. If you have any questions please Feel free [o contact me at (480)927-4668
Sincerely,
M~~cbelle L~ttner, Comptlance Analyst
mlchelle C$~vemma.cam
8322 Eas[ Hartford Ur~ve
Scol[sdale, AZ 85255
vemma.com
https://bluecomplaints.bbb.org/Message.aspx?msg=10089925&chk=VrzSD147zg3glrHjq%... 11/9/2~ 15
EXHIBIT 21

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Page 1 of2
Better Busine,s Bureau

4428 N. 12th StreeC
Phoenix, AZ BSQ14-4565
602-264-5299 1602.796-8279
arizonabbb.ory
S~e,
60/29/2013
Michelle ~ot[ner
Sro[Csdale AZ 85255
Dear Michelle l.ottner:

BeCtcr 8wlness Bureau of Central, Northern and Wes[em Arizonz (BBB) recognizes [hai e loyal customer base Is valuable and would Ilke [o :all your attention to correspondence lrnm
one of your wstumers who has contacted 6B8 For assistance. We have assigned the following [omplalnt YD#: 9686665 for reference purposes.
Please realize EBB does no[ judge the validity of Issues presented 5y a consumer; we understand that there are two sides [o every dispute. As part of Its mission, 066 assists businesses
and consumers by opening Ilnes of commuNCatlon with the faciUtatlon of disputes, and providing company reports to summarize how a company resoWes any issues [hat may arise.
Our hopes are that you will retoq~ize this B68 service as a positive effort. Our Intent Is to be of assistance only to the extent[hat we may accomplish a felr and reasonable resolve. At
[his time, we request you review the Issue, presented and consider how the matter can be addressed and/or resolved.
Please provide BBB with a written response within 7 calendar days of the date of this letter, aAvYSing of the position your com Deny will take. If You prefer, [he customer may be contacted
directly to resolve this matter, in which Lase BB8 requests no[iffca tion of Che outcome,
Please understanU [hat the consumer's complaint end your response may be publicly posted on the B~6 webslte. Please do not Include any Information [hat personally Iden[ifle, your
wslomer. B8~ may edit Che complaint or your response to remove Dersonally Identlflable Information or {napproprWtc language.
I( You receivetl thL complaint via email Simply click on fhe "5uGmil a Response", Ilnk located on the left, when you are ready to respond. You may also send your resDOnse to
con~plainlsC~arizonaUbb.org, or by mall or fax [0 602.798-8279. To learn more about BBB's Dispute Resolution process, visit htCp://hlLly/bbbArprocess.
Please contact us If you feel you have received this letter In error,
Thank you in advance for your attention to this matter,
Sfncerety,
Samantha Oberdank
Your Better 8aslness Bureau
Julia B Guise
2050 Stooeridge Lane
Snelivllle , GA 30079
Daytime Phone:(770)982.6350
Email; Jgulse05,~gmalLcom
The details of this matter ere as follows:
comn~ainc~uro~
61111nq or Collection Issues
fn5to mer's tatemen[ of the ProAlem:
This Is a multiple Issue. My son was presented with a business opportunity, from his friend to Jom vemma, as a "brand partner" with the potential to 'retire his parentr" and other
unreali=lit prurnlses, He was given aminor/paren[/legal guardian appllcatian form for me [o sign to give my son consent for him to become a "brand Partner" of the Vemma NutriUOn
Company.My son is 16. 1 did no[ gWe my consent and I am still In possession of this application. Without my parental consent on 8/27/13 [hey set my son up with a we4site to market
and sell [heir products, and on Bf28/13 [hey withdrew (Fraudulently )$580.83 my sons Ceen checking account. The product they want my son to "market" came today via fedex, [refuted
the shipment and the product never left [he fedex truck. hiowever, I phoned Vemma prior to the shipping and prior to funds being withdrawn. She said I would have to pay to have the
product shipped back and If they determined that the shiDmenc was damaged they would not refund any of the $SB0.93, When t ezpla fined that my sen was a minor and they did not
have. my permission [o enroll him ac a "brand partner" she Informed me that they had no way of knowing how otd he was.
spmp,Ujint gackaround:
Product/Service:
Problem Occurred: 8/?7/20!3
https://bluecomplaints,bbb.crg/Message.aspx?msg=10084455&chk=QUlejoxj64nHMI1DY... 11/9/2015

Page 2 of2
Model:
llceount Numbor: fedex case #OBZ812413, bank case ref# F10820131949
Order Number:
Talked to Company: B/27/2D13
Talked to Company (2nd). By2B/2013
Purchase Price: SSB0.83

Disputed Amount: ~58a.83
Desired Settlement:
Fuil Refund and held accountable for their unlawful/unethlpl business practices.
https://bluecomplaints.bbb.org/Message.aspx?msg=10084455&chk=QUlejoxj64nHMI1DY... 11/9/2015
EXHIBIT 22
Redacted - Attorney Client

Privilege
From: Hill, Jonathan [mailto:jhilllC~ftc.gov]

Sent: Tuesday, August 05, 2014 7:45 AM
To: Allison J. Tengan
Subject: RE: FTC FOIA request 2014-01232
Good morning Ms. Tengan,
Thank you for your email. we will process your request as follows:
All public and investigative records regarding Vemma from 2004 to July 31, 2014, the day we received your
request
All consumer complaints regarding Vemma from June 1, 2014 to July 31, 2014
The documents in the reading room only represent consumer complaints through 6/15/14. I'm not entirely sure how
far
they go back, but FTC only maintains consumer complaints for 5 years. Because of the 9/6/13 date on the earlier
file,
suspect the complaints go back to 2008.
Please let me know if you have further questions or if you would like to amend my understanding of the request.
Thank you,
Jonathan
-----Original Message----From: Allison J. Tengan [mailto:Allisan.Ten~an@vemma.com]

Sent: Monday, August 04, 2014 1:28 PM
To: Hill, Jonathan
Subject: RE: FTC FOIA request 2014-01232
Thank you for your response, Mr. Hill.
am looking to find all consumer complaints, investigative records and public records for Vemma Nutrition Company
located at 1621 West Rio Salado Parkway, Tempe, Arizona 85281 and Vemma Nutrition Company,formerly located
at
8322 East Hartford Drive, Scottsdale, Arizona 85255 from 2004 to date.
Just to confirm, the consumer complaints in the FTC's reading room are all consumer complaints, investigative records
and public records for Vemma Nutrition Company from 2004 to June 16, 2014? If so, I would like to request all records
from June 1, 2014 to date.
Please feel free to contact me if you have any questions.
appreciate your assistance!
Allison Tengan
-----Original Message----From: Hill, Jonathan [mailto:jhilll@ftc.gov]
r~
Sent: Monday, August 04, 2014 9:52 AM

To: Allison J. Tengan
Subject: FTC FOIA request 2014-01232
Good afternoon Ms. Tengan,
This acknowledges receipt of your FOIA request to the Federal Trade Commission dated Thursday July 31, 2014. In
future communications regarding this request, please refer to request # 2014-01232.
It is not clear from your request what records you are seeking. Please provide additional information clearly describing
the records sought, so that we may process your request. For your convenience, please be advised that all consumer
complaints received by FTC through June 15, 2014 regarding Vemma are publicly available on the FTC website at
http://www.ftc.gov/about-ftc/foia/foia-reading-rooms/frequently-requested-records
Once we have received a reasonably described request for records, we can begin to process your request. Please feel
free to contact me if you have questions.
Best,
Jonathan Hill
202-326-2684
-----Original Message----From: Apache httpd [mailto:apache@hq1-webdmz-s1.ftc.gov]

Sent: Thursday, July 31, 2014 12:43 PM
Subject:
name
Allison Tengan
staddr
1621 W. Rio Salado Parkway
city
Tempe
state
AZ
zipcode
85281
telno
480-927-8652
faxno =
480-927-8665
email
allison@vemma.com
coinfo
Vemma Nutrition Company1621 West Rio Salado ParkwayTempe, AZ 85281
EdSciName
describe
=
Private Corporation or Law Firm
privatelawname
=
medianame
=
money =
Contact me if above $200
B13
=
Submit
=
EXHIBIT 23
Jn~~~ri~~~ ~;. tiu~c~r~,Erz~.r~r~~

C7~neral C~c~unsei
AI`'GI~L~;<~lJE P. T.,I',~VILI~E:; 'I"~x- T3ar ?~'o, 24058?9s
J~ASC7~? G. Mt?ON, Tex. I3ar No. 24001 1$8
A'~~'~'F I~). I_.~:J~U?`fi, Ì~ex. f3ar ?~o. 2~O~~Z86
T;M11.~Y ~~. ROBII~~SC?N, Tex. E3tir No. 2046737
Federal 'I~rade C~mmissi~n
199 Br~~an Street, Suite 21 ~0
201
llalla ,`Mesas
'
("?1~) 979-9~~1; alinville~?ftc,gov (I~nvillc~
(214)97~-378;jtnt~c~n~~)~fic.~civ (h~:oon)
~?14) 97~)-y371; al~.,j~unc;:'a~ftc.gUV iI,~Jeunt
(~ l ~)979-938f~; erobinsc~n~c~ftc.~~ti~ (Ft~+tair~stan)
~'1tto17ieys fir Plaintii~i~
1~~DLFtAL ~I-R~1D~ C'C)l~~j:I~SSSIU?~7
IN l'I~~E UtiTTED S'I'A"rES I~ISTRIC"~' COlif2T
Fo12 T'1IE DrsTR1CT off' A.R]:z~NA
C V-15-01578-PHX-J J`T'
Fedetal':i'rac3e C~~itmissic~n;
?Vo.
I'l:~intiff.
v,
~'e~rat~~a "eutxitto~a Cot;~~~nY, a c~r~ora~ion;
~'~mr~~a ~r~terna~io~~~t ~~~~da~gs. 4ne., a
e.orporatzon,
Benson K. ~3ore~~ko ~~/kla I3.k. ~3c~~cy~:o,
indrvidually and as err otfic~r ~f~Vernma
Nut~riti~n ~~mpan}~ eind Vexnn~~~ Ii~terna~ti~i~a2
F~~ldin~s, Tr~c.; and
Tc~~~ A~kaztx; an ir~d~i~~~idual;
I~~ten~3nts. ai~.~
~~c}zany A~~aai~, an individ~~al;
R~]ief Defendai~i.
C~VIPL~I~'T kC3IZ
P~:~ZM.A,.~'kNT T'~JUNCT~t)
ABU (}'I~F~ER E(~UT7't4~L~;
R~t,~~F
~l~in~iff, tt~e Federal Trade Ci~ia~rnissioii("F`}~C;"), for its Complaint allegi;s:

The I~7C brirtQS this actio;~ uncicr Secii~>n 7 ~{b) ~of'the Federal Trade
Coi~~mission Act (:.FTC Act"l; i5 l:;.S.C. ~3(b), tt~ oht~~in ten~~arar}i; prelirnin~u~~~, aid
~p~rn~aner~t injunc~iv~ reli~~, rescissic7n or ref~ttr~a~ion of c~~ntracts, rest.Ytution, the refund
of ~~~c~nics paid, ~is~;~rgem~~tt of il]-~attcn ~~nrYi~;,~, the appoinin~ent of a Y~GCeivtr, and
othez~ eyui~able. ~eli~;f fir Def~ndaiits' ~~~ts or p~acticcs ici v~io!ation of S~:cCic~rl 5(a) ot'the
~1`C A,ct. 15 l~.S.C:. ~ ~~15(~), in eontiection ~~ith t11e ~tclvcrtising, marketing, pron~oiion,
a~~d 5ale of ~~nj7~Ytunities to se11 ]~ealih and ~.~~eJ1i7~ss drinks.
.ItJ~I~ISi)IC"T~()~ti A:~~'J \'F~U~.
?.
phis Còtrrt has s~rbjcct n~ratfer juri5dictio~l pursuant t~ 28 U.S.C. ~~ 13~1,
lai ~(a) and 1 ~~5, and 15 ~:~.S.C. ~j =~5(a) and 1~(h),

3.
Ven~~ is proffer in Phis district under 2~ 11.S.C. ~ 1391(b)(2) end (c~)(2} and
15 IJ.S.C. ~ ~~~h).
I'I_,~~I'tiT ~F
4.
The F"~I'C is an independent agency cif the United 4i~~ties Gove~~unent~
~reate~ hy^ statute. I ~ l_~.S.C:. ~~ ~1-5$. "l~he I~' I~C: e.nfot~cc Section 5(a) c~f~thc I~TG tact, 15
C'.S.C. ~ ~~(~3); ~~'t~ c~~ ~rohibit~ unfair car dec.cpti~ c acts ar practices in car af't'ect ntJ
commerce.
5.
~C~c I~~C~C is a~~ti~orized to i~~itiate federal ~.iist~rict coui~procc.cd-ing~, }ay its
i.~~n attorneys, to cr~j~~i~l ti-ic~~3tit~ns o1~t}le FTC ,1ct anii to sce~~u~e s~ich ~yuitable relief as
i~~ay be appr~~priate ii1 each case, inc]jading rescission or reformation ~f contracts,
r:stiCuion. il~ie :efu.id of.m~nies paid, ~3a7c1 the disgoi~~;eznent c~i i1N-S7atten mollies. 15
L1.S.C. 53(b').
~r,~~:~~~,~~Ts
Ci.
D~f~.ndar~t Vemma Nu~riti~n Cc7rn~any is an ~~-i2ona corporatio~~ with its
pri~~cipal piece of~l~tisi~~es~ at 16?1 ~~~est. kio Salado P.~rk~~ay=; "Teizlpe, Arizona 8~?Sl.
Vei,aa:~a nutrition C,oi7l~~iny transacts c.~r ]gas transacted business in t}1is di:~trict a.nd
throu~l~out~ tine Ignited Statcs, f1t all times mat~si~l C~~ t}~~is Ct1l~laint, actin; alone ar ~~n
concert with athirs, Vetnn~a Nl~frttion Coinpar~7~y has advertised, m~~rkete~i, ciistribuled, or
sc~lc~ business oppat~C~t~aitie~ t.o c~r~stiim.cr~ throughout the IJni~ed States.
7,
Defen~a~~t Vc-~~~na Iritcrnatianal F3oldirins, Inc. is a1~~ A_rilona cor~~oration
-ith its p~-~~lcipaJ pl~~ce c~~busine5s at ~6'? 1 ~fiest Rin SGiladc~ Pt~xk~~~ay, Tcm~~~, Arizona
8~~81. Vemma Intern~tional Hc~l~ing5, Inc, transacts r~r has transacted business iri i.his
disCrict and tt~rough<>ut the Uz~i~ed Stat~;s. At alt times rl~~iterial to this Complaint, a~tinQ
done or in co~lcect ~n~ith ot]~ers, V~mma InCerneiliona] II~ld r~~~s, Inc, has advertise,
xrarketecJ, ~i~iri~ui~d, ar sold l~nsiness ok~portunitics ~i~ consu:rners throtYghor~t the t;n ed
~itatt~.
~.
I~efindanf ~3ens~ri K. Boreyku, also knr~~~~~n as 8.~. T3oreyko("E3ore~fko'~'),
is the Ghie~~~Exe.cutive Of.~ficer, Secretary, and a director of Vein~na. Nutrition Company.

He ~s also t~l~~ President, Se~:retary, and a director of Ver~~na. Intenlational I-i~~ldin~,~; I.nc.
fit:al tines :~~aierial ?p t}u Co~.,:ip:aint, acting Blanc car in concert ~~~ith oihci~s, Bc~r~eyko
has formul~t~cl, directed co~itrc~iled; has ih.~ auth~arity t<~ contr~~[, or partic pat~;d iz~ the
acts zndpracices set fond ire this Cornpiairlt. Defendant I3or~;r~lzo rc~ides i7~ this district
3
aria, in coz?nectian ~~~iil1 the 77tiatters alle~;ec~ h~rci~n~ transacts or has tra~lsacted butii~7ess its
t~.~k~is district and tl.rou~.houl the- linitcd States.
9.
T~efeaant Tom Aikazi~i ss aproi7~oter aI't11e business opportunities ~f~erec3
b~~ ~~einin~ ~ùtrition Coinp~n;~~ and ~'emma l~n~zn~atic~nal I~Ioldin~s, I~nc~. A~t alI tines
~jaterial ;o this Complaint, h~ has participated an the acts an~j pra~tice~ tiet f~~r'th irl this
Complaint,'~~~on~ A]k,izin resides in C:ali~roxnia and_ in. connection with tfie mattcr5 ~l~leg~d.
~icre~rl, tr,irl~act5 or leas transart~~~d business i~n tt~_is district and t,}~roughout tt~e ~~riitcd
States.
10.
Re:ief 1::)efendanl I3cthany Alkazin is an individual who has receive-d funds
that c:an be traced directly to Def~~~cjarri5' decepti~~e ~~cts or praetice~ alle~~-d be1o~~~; and
51~t l~.as nn I~~ itimuic elai.n tc~ those f'i ~.c~s. I3etlaany~ Alka~:in resic~cs -i1h her husband;
pc~~ei~dan~ T~C~m ~lkazin, in C:alitornia.
C:O'1i~'~~~ FNTER_~'S~YSF
].
Defent~anis Vemn~a N~utritian. C'om~an~ and Ve~nma Int~rnati.onal
Moldings, lnc. (collectively.'`Vemm~~") lia~~=c ~~j~erate~d as ~t common e~~t~r-prise ti~hilc

et:t~agin~ iri the cic~c~ptr~~~ a~~d li :la~~~ft~i ac*s ~rid pt~~ctic~s a;le~~>ec~ herein. 1)efencl~~r~t
~a~-e ~on:~~7~red tIle bu~i~~~s~ practices described belot~% thr~u~~~ it~Ceixelated companies
teat c:om;in~,Ee tilril~~ grid hrive commc~i~ o~~~ric.rsl~ip; aff]c.ers. ~iirec*.ors. aE~d office
]c~eatic~n~. E3ec2use Veinma h~3s operated as a cc~iY~mon ~ntc~rise, ;.ac11 entit~~ is joi~ztl<<
and severally ~iarlc 1~or t~~e acts and. practices ailc~;cd below.
r_o~~~~E~c~;
1 ?,
At all tunes ~~~uteria; tc~ th e Co ~~zp?aint; llctendar~t5 ha~-e m~aintain~d a
su~~Cantial c~~urse oi'trade irr or ~ffe~tinb conii~7erce, as '`coz~runerce" is defined i~~ section
4 af~tlle 1~7(' pct, l5 ti,S.C:. ~ 44.
~~F~:"'1(3A~+"C'~' [3ZJ~tllf:SS ~'i2~~C'~1:f':I~S
13.
Verni~t~, ~out~d~~ by I3oreyko iti 2.004, is an international multil~,ve1
n~a~~~etin~ company that pr~i7~Utes health and ~x~ellness drinks t~irough ~ n~t~~vork of
inde~~ndcnt disfiri~utors called "r~fJ~iliat~s." "I~}~~se pxt:~ducts i.taclude heaitl~~ ('`Vemrna
]~~calth''), en~rg~'(.`Verve"), a~~d weight loss (`È3ode") drinks (collectively, the "~~'emma
1'roducta"), r~~'r~iell a31 ~?urpoi~t Co contai.lthe `~tiEIv~M.A" formula ufvita~z~irts, essr-ntial
mir~~rals, m~ingos~ee~n, z~7d aloe.
]4.
Venln~~a Afiilia;res can ~.arn fii~zncial and other rewards for hiiildiilg two
"tams" e~x ~`do~~~r~lis~es" of individuals ~~}~o also enroll ti~ith tk~~ coinpal~}~, either e~~ an
1~ffil:a~te, if the, indi~~idua~ is inter~este~ il~ the purp~~ri~d i~lonz~--i-n~kil~~ t~~lpi~rtunities
prescnt.~d ley enralli~~~g others, or as a custon:3~:r, if the indi~-idual iti only iraterestcd iri
p;~rcllasin4,~ Vcinn~a P.rc~duct5.
15.
As eti-ic~cnczd ~~~ their saps an~i i~l~irketinb ~~cti~~it es and conlp~:nsati~~~i
plan, Def'ei~ciar~ts' husir7ess m~7tjel depends up~m ~~ecruitir~g; indi~~icitrals tt> p~~rticii~ate i~1
~rcmma Kati .Affiliates rind cncc~ur~~ina t~~rri tt~ ~~urc~tiase ~V"~ir~ma Prz~di~et5 in co~.nection
~~~ith st.~ch participation_ ratt~icr ti~an s~liing procluct~ to ultimate-user cc>n~l.u-ncr~.
T~)ei'eii~ar~ts' s31es ~za~j mar-ketin~ acii~~ities and ~hci.r c~ompez~satiozi plan place litClc
cnaphasis on sales to c~nsu.ners outside ofthc ~'e,mma ~~r~;aniz~ti~~~.
16,
Usin<~ G}ass business n~odcl. V~rt~.~1~a earracd snore t.ha.7 ~?OQ n7illio?7 in
a:~rival revenues in 2C1I3 and.'014.

l~efenctax:i~s' Sales a~tid ~~~rketirtg r~.c~ivities
17.
Defcn~~ants prorno2e t17e Ven~n~a }~r~~gratl~ Chrou f~ a ~ariet,~ of channels,
i;:lcludin~ ~~ebsite ,videos; i~~timtaials, print materials, soda! rn~:dia toils, ~a~d li~~L
~~resentatio~~1s and meetings; such as "oppart~~nity events" and "hone events.''
C)p}~ort~it~ity~ e~~ents tyre ine~ting d~sitx~ed to motivate and train ,~fiili~ie~ and to r crust.
ne`~ Affili~ites, High-le~~el :~1.illliate~, includi~7~ Defendant Alkarirt, typic.111y Il~st these
events in laotcl ballrooms, cc~c+fcrezlce. rooms, car c~~nvention centers around the coi~r.~try.
~,i~ci 1~~Ier~dants ~3ore~ ko and }'~llazir~ often. ~pc.ak at these e~ ents, ~Iorne e~~ents are
s~l~aller r~crllitn~e~lt lt~cetir~~:s at an .'affiliate's z-~;si~c7~ce, dorm rc~or~l, ~ar~:, or ~~tla~r
lac~ttion.
1 ~.
"I~T1rc~ugh each of these channzls; Defendants pressure consun7er~ to t}ecor.~c
Venlm~d !1~Iiliates and ~o re~~-~3it ot~i~r-s, incluclin~? frierYds and family iYic131bcrs, tc~ clo the
sarc.
19.
Vetnm~s marl~i:tina cf'i'nri~ inclu~'.~ a ca~l~pai~n called the `~YPR.,,, ~:Ycng
Peaple R.Gv~,lution," ~~r '`1'n~i:l~ Pr<~fe~sional Kc~oluti~n." ~~~hicY~ tareis yt~un~ adults.,
inclt~zciing coElege stt~it~~:i~ts. L)e,fendazat5 ~~i5i~ c~~llcgc c~iFl7~uses and ~rese~nt ~'emnia as a
prulitahle ~~tcrnatvc to ~raditionai ;;mploy:;~cnt. Ver.~ma's YI'F~ ~narketin~ rnacerrals
~r~~miitenti}~ -feature y~~ung, s~etnin~ly affluent :i~divi~3t~~zls sui~rotnlded by e~~i~spiol~~~tas
ciis}~la~~s ofd wealth, Stich as luxury v~~~ cles, Jets, ar c] yachi~.
?0.
Thr:~u;h ~f.ei- ~Gfe~ and marketing activities, I~e~~etidant> iz7isrcpresetlt tl~e
nature end income potc~.t~al i~f Ver.lma. I~efe~~danU reputedly taut teat VemL~~a c~~n
prc~~-,ide ala~'~~ue ~~~ i:asv path ~o financial treedoXn and inde~~~nc~cnce:
a. ~~'hat's possible ~~,itfl a Vemma bi~sines~'?
t1~~1tn~~ited p~~ssibiliiies! 1~~e do~~"t pl~cc ~~Yi,y barriers ~hcad of ~-ou: ~~~-e
lei ~~c~u cleterniine your, o~-n ~ucc~ss. Ae~lieve ~c~als like: obtaining
financial fre.ei~om. receiv~in~ i~~~vards and re~o~~ni.Cion, having more tiin~:
fE~r the thin~-rs ~~ncl ~aeoplc ~~-ha rr~ati~er the n~ost> enjoying f1c~~ible
scl~ed~~lcs, ~~nd C~ki~1g ~Ize op~;~~~7-tur;_ity to ~~ y~o~~r c~wn boss and define
l~a~~w r~~uch ~~r little ;eau ~~~anf Cn zmake, ~1~f~r~c~~~ caul d1~es~m it, yc~u caz~
achieve it!
5n if your dream is to run your o~~~~ business; get out of debt, earn ~.
sccc~~7cla~-;~~ source ~~f' incuane, exchange tl~e traditional 9 to for yc3ur
own sche~~ile, or ~~l] of ti~~e at~~ve, A%ezl~rn~~'s business opportunity can
help ~~c~u aohie~~e i~~. tioti~ is tt~c~ best Ci~ne t~~ make a chaiag,e and choosy
to livr~ to ti~our full. pc~tetial.
c. Joining Veinrn~ ~~~ ~i~7 Afifiiiat~e affords you the ~~}~portunit~~ tc~ earn
second i~7corne ~T~'I"1'i~0t1T a second joo, arrd s inLrcll more!
~. ~~~ z3al.le is E3.K. F~r~rcyk~, ad a h ,~ part. cif nay job }~eze a1 l~rem~TYa is t~~
Jì~lp p~.E~ptc create afull-tin7~ income ~uilll ~~rt-iime effort, to outer hole
t:o [l~.ose ~~~a~itin~ an op}?orttlniti' fog tune fi~~~ec~;~m and fi~~~ancial
i~ideped~cc,
2l ,
17ef~~~clants e~~p~iusize recruitme~~i ever prodlrct sa1~;s ~~i~f sires; the
tiapc~c~a~ce ai recrartii~L netiv participants into the Vcrnizla ~~; o~?ram. ))c~fendar~ts d.irec?
~~e~~ anci ~~rc~spec*i~c A ~f`~liates to Li~~]a~ a sima~l~ '`system'' in oi=ci~;r i.o he successful,
~.r~I~icl7 ~enei~af ~= consists c?f she icllc~~~~in~ four steps.
?2.
I=irs~. tf:e indi~-idu~! Sh~uid becurne an .~~fili~t~ b}- pi.rcha~~ng a~1 `~Al~filiate
1'~cic," ~~hici~ costs approximately Sj00 car ~60t7 and ~ti~liich c~nt~~ins a t~~i~tui-e of ~~~.rious
~~emmti~ Products, au~i~io ai d video ~~ecord:ngs, pri~~t InatEr3als. and Vemil~a branded
items, I7ei~ndants tell consumers:
a. ~Y]t~u don'f have. tip buy ~n aff~liatz pack. ~uC ~~o~i ]iuti~e to buv an
~ffiliatc pack.
b. Any~~~le can jt~in ---it's ~'}ZI~;F to sign up! ~3ut ifyou'r~; ~intereSCed in a
life-changing ~ppor-tunit~~ and ready to build a business to earn
ii7~il~e~ii~te coi~m.issioz~ for ~-uur efforts, ~~-e recomrz~eald s~ariin~ out b;~
c}roo~irl~; an Affil ate Pack.. 1`hi; .~ffiliale; Pack maximizes ~~ol~r
~~p~ortl~nity a_nd rig-es you t.hc idols a.n<~ products t~~ start sharing;
Ve.~,l-~in~ wTitll others.
23.
Def~nda~~ts frequently d~scril~e t}~e Aff Bate Pack as the. Affiliate's zn itial
~i.rl~~eshr,e.nt ~~r stars-up east. Fzar cx.~mple, Vc,F~i~~1a stat~;s:

1.f }'ou are r~aci~- to achieve your fi~~ac al dreams ~~~~ithout any barriers, ~toti~~
is t~~e perfect tiae to join Vcrr~ma as an ~~f.~filiate. Simply chc~osc an
Affiliate Pack tc~ r~~axir.~ize your opportunity so you can Mart e.~~irning
in~cTZ~diaie income. Yo~i'll ~;ee ho~~ this tine investment in ~~c~ur business i
peit~~ies comp~rcd to the I1uge ean~ino j~otential t}~is opportunity can afford
you.
?~~.
Svcon~i, tl~e ~'1ffiliate sll~u!~i si{~ra u~~ r~r monlf~Yv "auto-dc}i~~ery~' a~ ~n
a:m~~unt sufCcient to maintain eligibility for boi~~uses, ~~vhicl~ is appt~c~~xim.aCeiy $1 ~0 per

i7~onth. Auto-deliverer auto~tzati~:G.11y charges tl~G Affiliafie o;~ a set periodic basis :for a
standrj~ product ptxrcli~se-order. I)~;fendar~ts 7~~fier to ~ruto-delivery a~ an expense to
p~i-ticipat~ in ;he b{i>ines. I:-i ~~ef~~r7dar~t I~or~~~ko`s ~~~~~rcls:
[n]ftcr ,~c~u'~~e clt~i~e your af~iili~te pack, you. need 1x~ ee~C on an auto-delivery
ord~:r. Do C}~e t~o -- what I ~~fould do iti 1 would het four o1't~~~ose varlet ~
~~ricks, Cw~~ c~isc~ 1?0 poii~tu. Thai is 1~ke d our tr~iinp card_ 'I"hat ~nak~s sure
thei ~ c~u're c;ualilied, Ad ktere's ti~u ~?~irg: ~~es, )'o~~ can quail f~~ ~~ith
custt,m~~rs. but 5~ou know what, soz~~etiir~s cus~im~~t-5 don't c~r~~r ai d th~~~~
de~n't ic.l] ~~ou they d~~n"i ~~rder, an~i ~Il U1~ a sudc~cr~ you're 1i,ke, he~~, I didn't
get 1 ~~~asi7't c3ualified.
?~.
This~d, ~~he ~~fiiliaie- sho~i~ld f nd o~f7ers v~-l;o `see ~,~~1~at ~tl~ey] ~ce'~ ~~~d enroll
them. as .'~P;;liates. I)efer,da:~t Borc~ko states:

And I l~1ow ~~~i~h ttus n~ic~ve [] t~o affiliate n~arkitin~ anc] a lot of people, l~a~~e
Le~r1 talking about, l~.ey, custan7ers; that's ~re~t. T mean. but we'r~ i~linin~
for ~tYlc~, and ~rve'rc lo~kin~ fo7 Chose [] eiltrepr-en~;urs. 'I~3ut ~~~~he~1 ~~ou find a
silver nugget.}ou cic~n't throe- it a~~~ay. Y~~u Sa.~%, l~e~, th~it's ~re~~t, that's a
b~~pr~duct of ~~ir busir~cs~. An~~ [] so, itiose custc~i~ers ~4r~ like sil~~~cr ... 5ut~
the af'f~iliates, r~7an, t~icy ire like fold ai~~d ~-r~u ~ot~ ~~ t~r~ar them li1c~ aolc~.
A.nd, so, you're ~oin~ to ~ir~d }~~~ople that are into health make great
el~stomers. Yau're going to fti~~~ these n~ gets c>~f ~olcl, these ~~ec~~le that are
entc~,~~~eneuri~~l, the~'r~, peo~l~ that ha~r~ t4~is desire tc~ [~ ~~t o~~t cif their job,
~~ay calf their debt, stave [~ le~rcr~lge~ i~~ their life, time fre~cdoni, n7oney
f~e~dcim_ Aid -- :end rhu~t is the people: that ~~~e'r~ loc~kin~ for,
~6.
C~thcr com~aii~~ ~~riaterictls reiterlte this l~a~us on recruiting like-minel~~~
i;li~iv~duals .into ilie pt~ogr~n~~:

a. ~~Jhe~r }'c~tt t~elierYe iti this op~~ortlrnity artd help others d~~ tl~e san't~. ~~pu
c~rrr turn this busin~~ ini.o carer incc~rrke, ~~~~1 ~-i>u ~hc~ulcl kr~o~~~ that it's
happening, l<~r pet~ple just like yt~u.
t~. :'~n~i when yu fin~3 s~~rne~ne ti~-h~~ sees ~~~i-~at ~~t~u and 1 see; i~~h~~ arc
~:xcitc;d alic~ut what this ca~~ do for t~~eir life, ~}ac~se are the peop]~ you .got
tc~ ~~ocus o.~.

~7.
Fot.~rtll, the Affiliate sholzld teach those r~eruits to "duplicate" this process
{ . c., puacha5e an _Lff]tale ~'ack. het on a gtza!if ~iu~ mariihl}- ai~,U-delis-ery girder; recruit
~~th~rs; ~tn~l leach t~~:tr7 to repc~~t). Dcfc~~dants ~l~Irkher stress ih~; i~t~p~~rtancc: of duplicsit~ion
b;' te~lin~ n~,~~ Af~fi7it~les:
lt's r,~t ~~~17at ~~ou pan dc~; it's ~~l~iat yogi c~n r~~~~~] and replicate s~~
~rixr~cire-ds. ihc~usands, or- e~~e tens of i:f~ousan.ds oPpc~plc. can c3o. ~'ou
arc used tc} pt~oduci~r~g 100 percent o1.'the resull~ b~~ ~~~iar efforts. 'I~~he
beauty of.~ 11~i.~ model is ~~~u c<~n eE~rn 1 ~~ercent fr~i~~~ t t)G people's efforts
i:f~not 1 }~erc~nt~. fi~ona 1,f~0U, 1(J.(~UO, ~~r more , .. To go from you to a
fe~v, to hunrlr~ds, to (:ens ofth~~usands, yuu need a simple, dupl~icat.able
systct that an}'o~~c ti~~ith little t~~ no skills c~!~ ~7~,~, ~~7y~~-here aC ar3v t~iine.
'1~1~e leadership in V~;rnin.a hay that s<<~tem,jt~s~t: don't get to tl~e w~}- of~ it.
L, [~~']ou pant t}~e, s~~stcrn to d~~ all the ti~c~rl.. Nat ~7nJy ~~~ ii it Chen. ~~~ork for
~~ou, it ~~ill ~a~ork for a~~yone, a=id that's ~~~~riezl tllc n~a~ic t~f duplication
c~tn :kick in and se~ad }-our financial }~t:~tential iF~to the stratosphere.
c. tls you'll soon see,}-our Vclnrna busi~~e~s is easy t~ set in rnotii~n and
easy to d~iplicate. Keeping the br~sil7css sirn}~le: attraci's others tt> 7~oi~r
n~t~~~o~k, F'rescnti.n~ a plazl tl7~~t can b~~ d~ip]icatcd encourages others to
rn~ikc their ~i~~eams ~ reality!
3$,
~~~hile slig!~rt vari~~tiatis ~~f this recommer~~ied s~~siern exist, the focus is
~~~isistcntly on recr~~itr.ent. As I)efcndant Boz~ey~ko started dl~ri~~~ a c~m~~~~n~~ e~~ent:

[H]e~re's cur simply elan. ~1~ixmber one, 1~r~y ari a.ftiii~te ~~~ck. Nun~bcr t~~~t.~,
fr1d tree peupl~ that ,ec. ~~hai you see in tY;is ~it~si.~~ess in ,your fi~~~t ~~~eelc.
Rc;~aael~lt7~r, ;~~~u ~u[ that 24-s~con~ shoC ci~ci: iri a basketball ~ax~it;. That's
wh~il:brings excitement. V~'e ~;~?t this thing calJcd a fre-nzy hoi~us and
double freuz} bonus, tl~ai all t!~at does ~: btu .i~ ~~citemeeit tc~ your bus ncs
here. ~o, find three ~+c~~~~le that sic ~~~h~it. you gee iri this business. You
Xrri~ht rind tl~l-ee or faun car five eust.oz7~crs, but find three [.A~ffil~iatcs and get
thc~ra to bu}~ ~:ln [A]f~liate pack, end guess what, y~ou'rc doing to make
a~~prc~xi~nately 7Ut) t~uiks, ~~o~~r, ~~c~u gc.,t ~~~~z~r money back for }'our [~]
~L~uSiz~.css. you're sired up, ~nci yoti~ got t(n~e gz~cat ~eoplE that h~~~e raises;
tl;eir tiancls sa~~ ng I ~~~~int significant chage financially ire m~~ 1i1~.(Cheers
and u~aplaus~.)
Third tlzin~;, third Thit~~: Get car ~ualit~i~d. tf Prn doing to gic~e you 400
1~;.~cks a ~nuntl7 to g~~ r~~tyou:s~.11~~a c~~r so you c~~r~ ~fcel ~o~~d, and }~~r~;'s
w~hat~s great ~bout~.li~ car is it actuary lae~~~s yol_ir busi~~e5s because p~oplc,
look ~~t you anti they ~c~, ~-o~:i'rc drivi:~~g that'? ~~'r~z:t. n~ayl>e I shc~ul~i iii
e?~,~r~r, ~~~ith r~ou...Sc?. ~~~7ri get yi~ursel~~u. ~ car aid t.tien yc~u help ~i~c pco~lc
get Fa~ a car, you'xe rn~ikin~ X5O,O00 approximatel}r izt residual incc~ta~e. Ad
t11at i~ our ~~1a~~. 'Chat`s ii. (CJ:~cc.r~ acid a}~plause.}
~rtd t1~e~ in~?re you dc~ it, the more yon pct. T3i.~t C~e~~e's the ... Y~ei~e's the
trick. I~l~~c nz~~~e you do~i't do i~, ih~'es~ you het.
10
2~,
Cori~~erse,ly, I~~cferidan?s provide. ~no guidance on ~~~}~e,i~e t~1 market or sell
~'eilzma P~-oduct~..lnstead, lleCenda~its teach Affiliates to ~ivc a~~.ay t?~c ~~r~~d~~cts as

samples and tc~ cc~nccntrate their e~f'1'~~rts on recruiting ne~~,~ parlicipanis.
30.
Tv I~~e3p Afiilitites recruit ne~~~ Velnma }~~t~rticip~~nts, Defet~c~~ts pr~~vide
nunizrous tr~c~ls 4anc1 ~~~irin~ ~~~aterials. for ea~nzple. ~'emina'; websi,es_ includinb
14 \n,~+ V~~T ril l CUl'1?, ~h^~'t?' ~_ T1P',.?D~~'VS.CO 1, ,~'~~ 1_~i- ~1~t~:E.~ L~11[lid_CO~iZ1., dl~d
`~~ ~ ~~ .
,r;ir:~ ~de.o5 c~~. provide ~;de~~s, Iive and pre-recorded cats, and ~~rint materials,
:rl~irl~~ ol: ti~~r~ici~l Dcfcnd~~n~ts dire;et affiliates lt~ sl~a~~ ~~ i:heir recruitsncni rr.r:etin~s or
homy events. C7~~e such vide<? proclaims that "[i]C's nc~t ut~com7non for ~7~ople to begin
eai~~in~ fron~j their Ve~n?_:~a op~ort~anit_y in the first. seven to thirty days,"
3~J .
A'en~za additionally ~ro~cides cach.'~~~fili~te ~~~i~h }lis or her own e-
cau~tnErce w~bsit~ t~~ m~rk~:t ~~ernn~~~'s progrt-i.rl. Vemri~a pro~~ides Affiliates with ~
~~~cb~ite teinpl~te t}~at includes a list: of'~video.s the AfTil.iate~ i.~ay cl~r~ose tt~ ~?ispla}~ can hip
or her ~vebsite. Marty of thc~s~ videos centai:~ misrepres ..r~tatior~s rega;~clii~~.; the inc~}me
pu~cntial of Vernma.
_>?,
l~ffifai~tes h~~e ~Iso created [r~a nira j. and ~ rc~rnotic~:~al ilte~ials related to
VcCnma. For exan;~Ce; Def:e~~clant A11~~az.in's ~~chsite. ~~~_`t. `_.~~~,cu ~~~,,t~c
~:;,s~ ~. ,~.
provides access to multiple tr~linin~ presetltara~~n~s, including a l~urchasaUl~ audio GD anci

;r ~iil iii ~~~orkL}ook titled `~Rt~ad:nap tc~ Success -- A `~ti'<~rx ng Plan f~~r treating `'~~ealtl~
Thr~lial~ the Ve~sena C?np~~~~rt,.rt~itY'~ (tie `:Rtatir~ap,,j. ~~'h~ I~oadrn~~~?, ~vl~icl~ has ~;or~~
tl<rou~h at fc~.st three iteratit7ns since 2009, describes Defendant Alkazi~l's eight-step
sy~t~c:in iqr ~~sildinQ ~ Vern~71a business. Vem~na requires car~lp~n~- a~provul prior to the
chi>tributi~~~~~ ~?f !~~~it:erials b~, ~~ffiliates. I~~ addztion,, Vctma ix~ay faril~~ 11~~ intcorate
,Afliliate tna~:ezials into its ~~~~rr~ resources. In ?014. fc~r ehainpfe, Vci~:ma iE,corpnr~~ted the
All~ar.in Roadmap into an official training p~r~gr<zm gilled "~.ffiliate .!lotion Plan: 8 Steps
To Your Success."
]~cferYc3ants' Irscc~~~~e Cl~ti~Ts
33.
D~f-er~d~nts assert tl~ it c,ori~iamers can e~3rn si:~rlificant islcem.~ ,~n~ rc~~arcas
tfaou~(~ Ver~lma, anti tY1~C 1lffili~rtes' in~:nrne potential i:~ lirriilc:d only by the:if~ o~~~n eff~oris.
~"~ei-~.ndant ~orz5~ko has r~j~~aledly r~nade iilcomc claims du~rin~, VciT~ma preser~7tations:
ti. WN. h~ive~ a ~a~nu p an. to yet yo~~ earning S~~QO, X5.000, or c~~en ~~O,OUO
~~er moi~tl~!
b, ~1nd ~~Ilether }you till ~r~ree o~r four [j~~,ople] end enjo~~ free }product or a
li~;}~tbulY., comes ~~n and ~~ou eet l~io~4 ~o~~erlii] i~1i.s coiicepi i~, ~ti~hen yt~u
~Z~cet so~~nc of t.h~, people fihat have patfraercd up w~itl~ us rlrld ha~~e bc.gut~
ge~z~erat~ing an extra ~a0~, ~S,Opp, even ~~~J,000 car more }per month ~~art[S111~,
Yc?u kn~>w~. ~~,~i; h~~~~e ~~oung ~~eople ~foir~g enc~u;Y~ juat tc~ enjoy s~~tne free
pr~~d-uct au~i ~~~e have s~~rrie ii~ak.ing art ext~~a SSOU a ts~onth, eve ha~~e
soiree Gi7~~king an extra ~~ >C~~ a ;eek, az~d Borne }~o~~'~n~ ~eoPlc really het
ccri~us ~b~ut this business mt7~e1 aal~ t}7ey've developed ~ ~-esidusl
ilicome: o:['$~,000 a mo~7th or e~vcn ~`,O~JO a week_ In fact, 1'~ve dot a 26~~e~ir-old, et a l~~~ci of this; that ir~il] earn ~ 1 Trlillio;~ tl~ ~ }year.
~l. Pct like t~:7 ldv ~7ut~ a game plarY tJ~at ca?; ~iv~ }~~u the o~aportu~tity~ tc.> het
prt.~fita}~Ic #~ast end be d~~iving a ne~~~ T3M~~' w~itr~in t}ZC next ~)Q d~y~.
c. Sc~, iii Biel, ~e've col people rnakin ~1;00C), ~l,~p(~, ~2.C100 in their
~,cry ~i~~sE ~~~oni~i. Now, let's get. you. in that new ~3M~W.
f'. :~t~p number t~r~~~. n~~,v just help orle pe~.r~~on ~~~~~ each side ok ~~~ur
business du}~licatc the ~uccr~s that t~ou're having and crate ab~.~ut
~~,000 in volume: ba.~~, y-ou're car ~3~~~~iif ecl.
12
g. Step numh~;r t:ilree..just Yelp fire p~~c~pl~ can yC~~u ~tv~-o tarns col a car and
yu`re e~rnirl~ abo~al. x;50,(?OU a ye2r residua] income part-tune, and ii
u>t keeps ~ro~t~ing firc~m there.
h. Y~.~u see; 1'r~~ }~rojectcd, on tl~~ese re:ferr~~] ~b~~nli,es, t~o pay out ~~anuse,s
ic~l~lirla ~~U rnilli~.~n this ti~e~~r alone.
I d on't care if y ou ~varlt to make [~,]aQ(l [] a tnorlth or $5,000 a rn~7nth. I
d~~n"t care ~~~h~t you ~~ar,t to ma%e. l'~~~~i get i<> decide that. AncJ that iti
tl~le opportu~~ity~ here.... Tliir~k t~f ~hc fact tha1~ t~~v~~ to f~~~ur }'ears invcstec~
into this b~usine.ss, you ha~~~e a ~i-eat c~~~al~c~ of'srtlin~ ~,c~t~~-se1~~'up
~~~r~cally f~oi polex~lial~~ tt~ rest of'y~i~ur lif'c.
L
j. 1,his neat c~~uple, y~~u guys are going to absol.~~itefv love this next c-au~~le.
I ~~ad the privilege to pay this cou~lc <:r~~d tl~~ir chil~re-~1 in one ,7~~rttl~r,
;~<~i t7o many months ego, 9(~0 ~)53,U00; in zone mc~n~il~; ladies a71d
gentlenz~.n. tour star ~~i~lnucle: lcade7-s "tùm and }3ethany Al.k~zin.
3~.
I~efen~arrt 13c,r~.~~ko ~~15~> intervie;~~v:~ Vemt7-~a ~1_ffliates ~bc~ut their ~urparteci
success ar~cl prese~lt.s ti~ir testim~i7l~is in videos that. ire hosted ~c~ the cc~mpan}t's
~~eb~ites, ~1'ou'I'ubc~ channels, ;~~id social media site. Throubl~aut t~]ZCSe testimonials,
/~Ctili~~t~s attest tc~ l~o~~~ e.a~i~y and c~~~ickly tlzc}~ r~~crc ab(e to earn 1~acrati~~e pzy br~
bu~~lding tl~cir do~~~nlines. T~~1any of~hese vidc~7s feature youi:~ adults who talk about
ha~~ing fi~~anci~~] 'e~~ltl1 ~~~itl~c~ui a cc>llc~e dz~;r~G orfhc ct~nfines of~7 ~-tc~-j jab, o~- about
cr-i~-n~ t}~e. au~ur~~ ~~7~:ac:e~les-E~cn~, c.7i~ F3~~!I~'~' l;~tt tl~~y r~~;ci~-c~ tl~u~c~t3gti~ ~?cmm~.
T3ore~kc7: [' 'dell rre ~iov~ that feels t~~h~~~ you are ~irivin~. t}irs [ne~v I~M1~v'J
a lcl vou'r~ taking your I:rientis soinc~~~h~: ~~ ... ~~'~'~'t~at ki~~d 4f thinks are
you }~~arins~?
~~ffili~~te l : Vde1I, t1~c~ ~e ~l.at ti's doable end, you k~.oti~~~. a leaf of p~o~~Ie [J
doa~'t rrnder:st~uitJ ...1>ids al a y~~una ~~i~e ~naki~~~; (~ these types of ri~oney, l
iY~e~ln; ~2;Of10 ~ m=cmtl~~.
Boreyka: t'~nd you. m ode ~~5,000 last morrfYy.
13
~lf'iili~~e I:[ t7~ade ~ti5.000 l~xst mantle; and it's a~s~~lutel~r insane, you know,
to lf~iink abort ~~ }la.t ~~~e cal d~~ and what r~~e c~~~~ c~.ange ~h-ith tr,is cf~tirc,
thing. Anti ~ J ~4~G're C~tkin~ oti~~~ the c:nt.ire country. I mcari,, ibis buy is the
tir~f. ~~erson on n1;~ Ieii leg, so I have ~~ve.r 650 pto~~le in lnti~~ business in jilst
fig-e 7~~~onth~.
I3aYeti~ko: Tl~.it is ahsolut.e)~~ incrcdibtc. ~~u~, ~~~hat do your i;ienc~s
say ~~vhcn they ge.t behind the ~~~heel, and yc~u~vc beei~l in this four
and a half mor~ths~, dri~~irlg a ne~~v ~E3MC~v', hav#n~ ine ~a~~ for ii; which
1. 1~~~~e to dc~. IS this so~Zethir~ ~~.it helps peoples beiie~-abili;y'' T oe,
~t l~ielp to rTl~ve y~o~ir busi~~es~ f~?rv~~ard?
f'~ ~iili~ate 2; Yeah.
~~*
~3crre~~ko~ All right. So, hove dc,e4 it feel to'~e ]9;-e~r5 old, mak-ink ~;S,Q~O ~~
monfih ~z~unoting a healthy er~erey drink? y4nd are you h~~ving I-un doing
this_`?
afTliate ~: Absolutely , .. ~ve~`re hangirlb out ~~it]~1 our f:rie~ids any~~ay and
i~:;lpi~~~ Ch~;m (] and. that's 5~~cial. Ai1c1 ~raki~~~ ~~ney while y~u`r~, doi~~~
it, it"~s ~] ~111in~ hero girds l~-it11 tine sione.
~~*
Bor~~~~ko: [C ~i~~e tis carne ~~~ords of ~~~isdom. You êt, in th:; bu ii;es5 five
mor~~ths ~~o; }you bl~~~~~ Lìiis thi~~g u~p. Tl~~ell rrte, ~~ryu l:n~~~~, ho~v ]or~~; clid it
take you to c~~ele for the first: tznle and thcaz rl~~t did }'c~u dc~ month two,
iYitailtt~ three; month t~o~re, fnonth iive~.
Affiliate 1 ~. Yea.l1, ~r~ell, mainl~~, you }~1ow, just duplacatcd tl~c s~~sier~l .. _ I
sav,~ high sch~olcrs [~ ~llakin~ ~~,QO~J a ~~t~ec~k> arxd t~iat ... ble~~- any mina . .
. ,~nci 1 nave a (guy tivl~ ~ ic) ~? ~:~~.r alJ [~`'ho~ ~;ot (] Dii~~ond i '~1 days .
. So. coinpat~ly-paid car. He's made; o~-~~r, y~~u k~nc~t~~, ~~v~ r~rrci .in the ~~~st
[~a~o and a ha.(f aZ~oFitttti.
~ *~,
Bore~ko: ~~'~ ~oC. ~~~~1 k,~ou~~, hur~dred~ and l~tlndreds oi'th~ ~~c~im~~ ]<ids at
this -- a: t~1i rt~~Etins~ l:ier~ in '~~c}i~h C;arc~lina, and ail ~lic~~`re talking abc~~z[ iti
becc~min~ tnilliona.i.res ... l~z~d t`~or sc~~1~e kids, it';. like tiz~ Iirst ti.rne -- I
thiri~ every!~7ody alti~~~ys dr~arnt t~e5f'd ~~~~inf to hecoi7le a rnillion~ire, but
rezllti~ far a lt~l i~f these kids, ii's the first. time they ~ve ~ctuall}' had a sh~~t at
t~ecc~i~nin~ a mi(lioi~aire~ in a Y~usiness like this.
14
~~.
D~terician~. Al1:E~ in Las like~is~. rr~ade income claims ~z~~ze.n pre~entin~; the
Vetn7na up~~r.,rtur.it~';
a. li's not ~~ncoinmn far us to see pcoplc e~rniri~; an~~~,~11~a~e from `500,
~I.~)tJO, ~~,O~U, e~~en ~3,(~C10 in their ~i~st ~ourto ei1~t ~~teks i~~ t}ae
t?1~5iness.
b. [~-I]o~v ~1=~11 d~~e~ this ~~~ork'7 ~~%e have. people Gamine ~]GU to ~2C1C3 per
week c~-c-le bonus income. ~~~e have. some e~rrrtino X300 to a~00 per
~~~e,ek. V~re I1~ve sonic earni~n:~x ~~,ODU to ~3,OOp a weed:. Wa I~iave some.
~~~{-nine, five. ~e-n. fifteen.. l~na~~ine this. s~n1e e~~~n rtnore t~asn ,SZ~,t)00
~~n a ti~~eel~l~~ basis. '~~o~~~, if v~e're doing ibis ~~e11 after tf7is Shore amount
c~:!'time, eai~ ~-ou itz~a~ine tiv~iat the next thref: tt~ five veers holds in
~tc~re?
36.
De.fenclant Alka in also c3irect5 his do~vnlines to 7i~ake income clair77s. For
c:~a~~z~ple~, his R.~ad~l~ip pro~-id~~ A~(iliates ~~iLl~ scripts t~~ follc>~v ~~her~ aiternptin~ to
1~-C-1`lI1C T1C\~' ~73TtIC1~'1~33125, ~UC}1 3S:
J~~h.~l, ii` I c]d show you. ho~a~ t~-o invest. X120 ~cr t~nontl~ in your lamil~~'s
heaitl~l and turn that into ~100U to ~;,0(#U per iz~c7r~th, dart t ree, ~1~~~i would
}~c~u say?
~7.
I:7e~~;nd~~nts once theiz Afiliate~ ma!>e other cldinzs regarding tl~e l~i~ti
iX7c~~zne ~c>tcntial pur~~oi~tedly assoei~~ted ~~ith ~~enlma in varic~~us ~ ideos end prim.
Tn~itecia?s:
I~~~~ you ~~~ani a fe~r~ hundre~? dollars a rric~nth cs.~ the sick? Do you ~azit
t~5 make ~ ~i~-~ìur~: it~~omc:? A tnlli<7n`'' <<111 c!I~thi~ i ~,~s~it~l~ but yc~u
}<ave to k3~r7~,.v here: y~~u ~~~ant to go tc~ deterr~~int ~~-hat, and h~~-~, n~luch
~~~u Piave r do.
b. ~<~ you ~~ani tc~ make ~r~ e:Ytra ~~00-~;] ODU in ~rdcr to gti.i~ii your part
rirn~ jY~, or do vole ~~~ant to ri~<~k.e six (i~~ure~ ~o fain the time ai d
fn.ancial f`r~:e~iom th~l ~~~<~u hai~e a1~~~~a~~5 cfrean;ed t~f? ~~th are
ac~~iLt~ab~c, az7d both ha~~e he~en done bei'ore, ti~~u jus~ need to ask
yo~ursel~ .. , }~~o~~~ liig, dc~ yot~ r~~ant to ci~~ean~?
1S
c. ,1r:d guess r~=hit, tix;~~ c:venh.alè a 26-~~~~~r-old ~;~y . , . ~a~-~lirg over ~~1
i3~i~liorz a yerx.
d. here's i~ic ti~~in~. ~uti~s. ~~'he~n 7 first got in th.T; business, nay ow~~.
roon~iindte ... wl~o~s no~~v cai-r~ii~g c~~~~r X12,00O v ~noruh in Ve~n~m~, told
nee :~o. So; ~~~hen yinir fxien~ls don't ~~~ant to do it, dc~i~'t ~,et discouraged.
g~iys. Tl~e~~ ~~ill cotnc arr~unci. ~~'hen they st-art secin~ ~~ot~ makc ~x7one}~.
~~4~l~en they sc.e ~~ou ~eliing free BMWs. ~~uvs, they w-ill cv~;ntually corrie
~rcrund.
e. Y~~tz dor~~~'t ~~~~nt to live ]ifc ~zth no n~c>ne}~. Ynu pant to 17ave so ~11uc1~
~~
711QI1C',}' lt. I~OCS!1'C ~V~fl '1flrtC.1'. 1 .1i3~ S ~V~1}' ~';~Of)IC'.
f~0 ~117~IT'id~ LU 11~~"8
enough mono y tt~ ~tinc~re i~t~ d~~esn't. ~~-cr~ tr;attcr ~rtymre, ~iz~~s.
f. [TJh~ dati~~ ~Ctl~e ~~~:e~_ shoulcir~'t cl~en ~n~ttcr tt~ you, ~~i;~s. ~Thv fides
the play t~f~the ~~~eel~ e~~en m~~lt~r? 1~he Sun cor set l.i}~, gees do~~-n, we
mralzr; n~~~ncy while ~~e're asleep. 7 }cat's ho~v Vcinma works. Yc~~i're
ptiid 2~~ f~i>tii~~s a day.. reverg days ~ ~~~c~: ~~o matter ~i~~~at ~~ou are doing.
g. Ilc.re;'s Chc tl~in~: in t}~e last t~~~~ ti~~eeks, ~f have earned $59,700_
~~.
Irl addition, during c~u~p~ny ev~c~~ls and con~~e~~~i~i~s, ~crnrna pr~scnts the
scl~ct fe~~~ tc>~~ earners ~~itli lame chicks reprc,se~~ting t.hei~~ ~~~~~r!y or lifctirne earnirlLS.
39.
~~~hil~ I)e~fe~z7danl5 s~~m~~ti~n:es att~l~~ipt tc~ provide ciisclai:rn~rs when snaking
these ar_d ~7t-~~~er inco~z~~e claic~ls, their ~~ttempts ire inaikeq~uat.e. F~~~;nuna t}~l~ic.all}~ dilutes
purported disclain~icrs, such a~ "results may ~r~r~y~,'' ~~ritl~ state~:nents ii1~~~1}ping that nc~ative
results are a~~c to the ina~icqu~ale et~tc>~~s t>i~t>>c Aftiliatc.
4C1.
De~er:cl~a,nts co~ti~~~tently lead ccnsum~rs to belic~,~e ;llat i~~th~y sm}?',~ ~~ork
h~rci; the~~ ca~~i and will eai-ri slil~stant~~~1 sums. I~ ~~r inst3re,e. durii~~ a pr~5~;~tatior~,
~~C71 c;~'}~0 SLdIiC~.
This i~ a product *hat 5~nu could eazn s~~-e,1 f3~urc~, ;end ]'m plot m~k~~:na any
kin~j ~l'ina~mc c1a;~r~i~; b~causc. }your results may nary ; it"s .happ~i~ed to
oll~~cc people, sci 1~hy ~houl~ri't it hap~~e.n Co you? T i~~~eari, results areri'~
t~~~ical; I }~~~.~pe ~ou'rc not ry~ical.
16
41.
C)ne tzinh-ra.akir~~ Ve~m~ma Aft~ilia~t.c even tells p~~tential recr~iits:
Tl~c ~nl}' ~~~atr r~~u fail in tl~i~ i~ by quitti~~g or doing no~tritlg. That's it. If
<<oEi dc~ solxleCh ~~g and d.on'f quit, }you st~ccted ~ve~y time; nu matte;: where
~ ot7 cone #i-~~iz~~, ~.o in~~~lcx wh~~1 ~t~ur ed~ic.ntior~al Ieti~el is.
42.
?n addition, V~;~nrna has published annila] ~lisclosur~ sta[emznts Since 2012.
I~or exaiT~}a~e, ~1~ '>Ol ~ 11.5. I)isclo5urc Statement. sh~~~~~s that in 201.3, snore Shan 93
p~~rc.ent i,'t~(~filiat~> earned leas tllati `~fi, i69; ,~~~re than 8? perc~i~t ea~~~~e~ less then
X3,674; more than ~30 percent earned less than. X939; d~~d less il~ian 0.62 percent e~rilecl
~~Z.181 ~~r more.
Y3,
~~'hile tl~e figures contained in t}ze cotnpan~~' clisclo~u.~e ~ta~ements are.
soinc~~~l~at revealing, they noi~eiheless do not s17~~~ tJ1e ~~hoic picture arlcl are rTlisle~ding_
nn~ot~g otlic..r ;.?~in~5, Ehe discl~~~~sre ~t~:ic~~~~ent> only take into accauni 'àcti~~e" Afiili~~[es
~vt~o Yia~~e~ n et. certain rnini.rr~~~rn purc.~~se tlu-esl~lolcis a~~d omit pan.i~ipants w-'ao fared
~~~orse_
X44.
?_n ccmtrast to T~eI'esld~rits' i~~.m~.rous claial~s re~ar~~i~,l~; ~aro~t~~biliz~~ an~i she
un(i~nited ir~co~i~e potential asst~ciated ~~~ith ~er~~~i~1a, t11~ vast majorit~~ ~~f Af~1iaC~.s t~nake
i~r:~ n.one~5+. ~emi72a's cQ.l~~~ci~~satin ~71~.~n, fl~rtl~~r disc~~sse:d below, and its corresponding
rl~zirke.titig ac~~~ttics clictat~ th:t ~` an} ~~articui~:ir tiE7ie, t17e inajczri'~ oI r~f'fil_iat~s It~se
tnonev.
17
~'e~nzta's C:c~i~zpc~zsation ~'Iar~

4>.
Venuria's coniper~satio~~ plan is based orz a binary' syst~:m, and Afi~liates
can e-at-i7 fi~l~Ticial ~i~d oilier re~~~ard~ far building n~o `~clo~~rilir~es" a ~`1~It. team'' ~r~d a
`-ri~hi: team" of ~n~ii~~iduals ~~l~~o enroll with ~'emma as Affiliates or customers.
46.
"There ere several ieti~els of ~'~ffiliates, a~~ci 1~ffi]i~~tes' rank and bclnus
c1iC7ibili~I~y is generally det~rmii~ed bti~ the nun~bzr of"points' tr~cy e~ar-~~ dur~n~ a spe~cired
fie-rind, Points are c.am~d i~l~r~u~h pz~oc~uct purcl~~ses,
~7.
ì'o become an A1Yilit~[c, a ~:onsumer must ,ithcx purch<~se an AfftliaCc Pack
n,i' Vrrnzna ~f'r~~d~icis and ~c~ls for approxilnately~ ~>0~) ~~r ~',~Ot), or peryonaily ~nrc~ll a
cust~i~~er o~~ Affi~iaCc. Its practice., I)efen.dar is ads-ise consu~z~~r~ t~~ ~u}~~ tl~ie X500 or $bOG
Aflili~ie Pack.. u~l7ic~t tl~e;- characlec~i2~ as tl-ie .!~ttiliate's initial invetnlent.
48.
After bec~n~ing an /1#fili~te, ihc. inclivieltasl must maintain a `'c~ualif_ic:i"
status t~ be e;igible for linaricial ct~rnpensation and other rewands. This rzie~~ns the
Affiliat4 must Yiave:(1} a ri~irirnut~ crf 12G ~oiizts tii'`~~ersonal ~voltr,zie" each month; anti
(2) pit l~;ast erne "acti~~e" cLi~tc~mcr or !affiliate on eat}1 of tile- lh_li~iliatc's left aitd ~~ig}7t
~9.
~[~o ~cl~~c,~~~e 12Q persanaa vc~lum~ paints an u~ ri~~7ntl~; A:f'lili,~tes c,an
}~er5onal1y ~7ui~chas~; ~ro<incts ~~~ortl~i tl~aC same ~r~imber in ~'qu~~lifyin vo]urne-' pointy or
"QV"{e.g., ~i 2-pack c~i ~~'ezriina I-Ie~iltl~ at X171 for 120 QVj, l~~tz~e double that (i.~ , 240
Q~'} pure!7ased by their per,urall~ eri~o;l~d ca~to~~7e~-s. ar some comfy i:atic:~l~ obc~t'h.
50.
Active customers uz~ Aif:(iates inu~t lzav~ a ~~iriia~~:uzn of C~0 persona;
~vG~lu~~~~~ poiz~CS in a month. They r.an d~ this b~~ per'sc~:~all~~ purchasing pro~~ucts worth b~
1K
Q~~ that ir~~nt:n (r
. ;~ 1 -pack c~(`Vctn.ma heal!?Z at S7=~i. 17.~vir1~ dc,unle that Iaui~cha~ed b~~
their perso~~ally cnr~~~llecl c~~stoincr5, nr s~ixic. co~nE~ination of bo~l1. In some ca~c.s, file
regtaire-n7~rats for a~titi~e status arc c]ubled and i~natc}1 ~th~ r~quirerilc~~ts nor quali[i~c~
sta*us.
57 ~
As Staten above, Vemma ~~r~,e5 .~f~~ili~tes t~~ ~~~~rchase proclticts tiarc~u~l~ a
pe~5~t~~a: rno~t~~ly~ aE~to-~eliy~;ry or~l~.r of 12U QV to ensure untntU~7~u~ted quaiiTic~atiolt for

boz~us~;s.
5?.
~'enzin~'s coinper~~~~ion flan includes many confusing and convoltite~!
rubs and rer~uixements, a nil soi~~e btmuse.s ar r~~~-arils ~mp~~se additional. res~ricti~~ns or
':irnita(iorzs.
~3.
Ve.n~tn 1 st~r~s tl;a~ ils compentiation plan e;~a:~rall~~ cai~fers ttivo types iii'
~i~~~ncial ~.oi~npensatir.,n: (a) inunediate income anal (bi lc~~~~r-term ~r "tesidual~' ir~lcorne.
Imme~~Ir~afe It~ci~rr~e
-~.
~~fiiliatc~ may receive a '~e~~~ C'c~4tc~rzc~r 3ot~tsc ;andink From `~~ to ~1 f10 ~n
the first, prctlase~ made by a new customer c3r~ 1~.0{iliate, ~~ long as t11e Affiliate pers~nall>>
e~~~roll~ ~h~rn.
55.
Affi!iate~ rvho put~cliased an 1111i]iatc Pack rx~~y earn E+~e~~ry or ~l3c~l~ble
x~-~7~z~~ ?3ni~nces. ~rcn:Xy~ ~3a~~~~es arc paid tc~ cualifiecl nfiiliates ~l~ho reertiil three
people ~~rl~o ~~urchas~ al ]ea>t i2Q Q~' of ~'em~~na Products within tl~c same ~~~~ek the;v
enrc~~? iii v'rtirna. 3fa~i~,~~ s~ 3-erzy ?a;~t~ses 1~Gi~J t~i~her re~ti~ard~ if eact: oYthae fhre~
r~:cruits j~~zrcllases ~~n ~ f'liliate F'rlck ~~i~hic}~ si~,niiiea enroll~rlent 1s au _Af'.filiat.i) anti signs
u~~ fcr a mt~nttll~r au~<~- acli~~ery order ~~~~~r~h at least 120 ~7V, :~r~ Aliiliziie n~:av e~u~n u}~ iv
19
ci~10 ~hra~~~,h the'ti~:~~~ t ustort~ci end Doub1~ F:ent~~ l,onuses c~mh r~e~i. l)eic.ndants tour
leis a tl7_e ~vay foc.~,f'fili~ites f<~ recover ti~~e cost oftheir initial in~~eatax~eni;,
Loi~~t~-ie~-m ar .Residual Ir.~cc~rr~e
56.
Vem~~~~ cl~scrik~~:s r~.si~~ual inct.~i~~~e as `the art: of earning income ~rf~cr the
init.ia] ti~~ork l~ia~ bea;~ ~junc.'.

1.
V~ir~i~'~a states t~:~iC t~1~ `'mosF }~c~werful" t~o~YUS, and the pattl~va}~ to r`cs dual
income, is i~~ :'ycle C~~n~niss:c,n. At the enc~ czf each ~~~eek, Affiliates ina_v earn
<ipprG~irnatci,~ ~2U ea~.(1 time tk~ey "c~~cle," ~~r accl~mulat~ ~6U (~~' poi~~ts o:n one team an~i
1 ~~0 QV pt,ints on the other, F'ur c:~anlple, an AffxlraCe eyel~s one tin1~, anti earns rcaug~hly
X20, a het~e lie or s11~ has tku-ee ~'-~s~ck Ve~r>>:~a HEalth .purchases on the left tea~r~ (totaling
~44~) anci three 7 -~~ack Vei~~ma I-Icalth p~:rchases on tlic i`~~ht team (toCaling ~?2?, for a
cc~a~~~bined lc~i.al of ~f66 inpu.ch~5c; 1.
Ulh~e~ Re,vards
S~.
~erzii~fa Gffers c~tl~lcr bonuses itY~t urt cor~nectcd to the .Aftiliat~~s number of
cycles. ~~zi.I::~t~~~zs7ec~:~ent A~~~s~-cis are cane-tine bonuses }laid ~~hcn ~~n AffiIiGllc
ac!:,ieves a ne~v ~r~11.."'There are :it ]tact cit~l.ttteri ran:~.s ~~~~thiri the co~r~}~ensat azi lalan
ranging ira:~~~ I3ron~,e t_o J.:e.gen~-1, l~~~sed upon the nutn~er ~~t cyci~s the Affiliate ~ccr~~es
dl~rlil~ a fcaur-~~~eck r;~nl~ G~dv~n~tmeslt period ~r "1ZAE'.' }eèr example, ~f tf~e l~f~iltat~
reaehes ttie tank of silver (fi4~e cyc:es ~~~l~ric_I~~ ~s equivale~i~t to appr~~imately ~3.33~J in
ti~'ern;i;a Ilealt ~ 2-p~c~ ~~urchases _ p~~~ R:11'j and ii<ai,ztt~ii~s that rink for at leapt t~~o
consccut ~vi: FLAI's, tlic r1f!iliate recei~~es 510C) rlfliliates u~~iy receive up to ~l million if
rtley reaek:~ trio hi~l~c~t 1-a,~{~ of I.,~tie;l~d (20,C1O~1 c~cies -~ 1~~I~icl1 is equiv;:lent to
a}~}~roxim~itel<< ~]3.i'_ million ii: V~;mma ~-Icaltl~ 2-pack p~ir~.hase~ ~- ~ae.r RAI') }~ nd
maintain That rank ion ~t least fal.~r consteuti~~~: ~~ZAPs.
:~9.
OtJ~er bt~n~ses tied to t~h~ ~f~liate's nu~~~l~~r ~f cycles i~lclude tale 1're~ier
C,~b ~3~ndis, ~3ai~t~~cec1 'f'~2tz~ ~3ortus, ~1i~~lnie Pa:~: ~~'~ag, :1!fatci~irig C'omal~ission.
~tc~~s~d '1~'ier it~Ia~r.i~~n~ Goz~zni5sio~, ar~d ~la~at ~~3c~~ius 3'c,~l.
b(;.
Under she VemE~la Loyalty ~r~~~ra~z~, .~lfliiiates can e.ani a free case oI~
pro~uc!(in a ~n~ixirlil.r~~ alnout~t ~~,1~:120 ~V i~r Mlle lo~~st cn~~er piac~;d} it~they ptirchLse a
mini~~iu~~rt ~f 60 QV ~~er ~~nontt~ ~lc~r sip consec.tjtive izzo~nt}~~. Tk~e free ru~oduct d~~es rot
c~rYS~tit~ute poin~s for ~iirposes of bonus detcrmi~lation,
61.
Affiliates coo tlt~t prii~u~rily e~~i'n l~oizuses for ~~ctual sales of Vemm.a
P.rodu~ts, Instead. A~eani~a re~~~ards Aftiliafe~ for pers~~r~ally purcha~i.~~ Vemina Products
to i~~aintairr bonus eli~;ibilit~~, and fc~r recr~~iling c~t~hers ~~~~~o likz~~~is~ piircl~ase Veinm ~
C'r~,ducts ro rx~aint;~in bc~nu~ eli~;il~ilit}~. Overall, the }rev dctcr~ninaCc of an ~'~fli;ial.e's
income, end thus t[1e actin-ity inccEltivized by the compensation plan, is the recruitn~cnt of
Affi~iates it1t~ the ~f'~iliate's do~nline teams, l~~f~o thus i~~c.ruit other Affiliates, and. so on.
F?.
Tn fact. tl~e likelili~~ai~ of Affiliates eal~iin~ ~~rofits on reiail sales is minimal.
~T~~1Li1< V~: rina states that C~fiiliates ,.nay keep ~,rc~fits t~~e4~ c a rp vy~ ~e11inU Ve,i11i~1a
1'rodt~ct~, L~einrna ~1~ters i;o m;ani~~;fi,l drsccfl.ints or incentitfcs to cricournge such
behavior. 'I~he coi~1}~any also se~~ere3y restricts Affilia'.cs 1ro~17~ selling Ve-m3~za Products,
~x~~re~s':~~ p~~;~r~ib t,:~s; ~G]~~ a~ l;,a:~iizcss car r~ta7l out s ter offcep,(7 :~i markets; >~~~ap
meets_ ~~~rrage sales, 11~rYae shopp,ira~, rlet~~~i~t~;:s, and online stares or auction sites,
iticludii;~~ c13~~~~ and. Craigsli~t,
21
6~,
In s~,:ri~~ uitlikc. ltgitirn:~te mu~tilev~l n:ar~:~ti~ig busif~esses, Defendants
r~~vard Af-filia~~s fc~~~ r~cn~~t~in~~, ~a-rd f~,r rt~rcl~asing }~rod~ucts ro ~~~antt~in hotlUS uligib;lrt~~
rriCher than ~!'~~r selling ~~roc~uGts to u,~im~te-usc, consumers.
~'~C)I,:~'I'If~~~ C?~ S~C~'I(7V 5 C)t~ TF~E T;'I~ ~.~;.1.
6~~.
Se~ctioc, ~(a} c~f~tl~e F'.I'C: nct, 15 U,S.C, 4~(,aj, pt-ohibits "uXlfair ~>~~
deceptive Picts ar practic.e~ in or aff:~cting commerce..'

Ei>.
?~'iisre}~resent~ir%ores or ciece~~ti~~e un~.issrori ; ~~t material fact constitute
cie.ccpti~~e ac!s or pra~eti~es ~~~rolzibiLed l~y~ Section. ~(a~j c~i~~h~ I~1`C het,
G~~11~'T I
rilegal b'yr:an~:
66.
As all~~,~.d ~~?~~~vc. Defer~~aizt~,~ ~7rom~tc p~ir~icipa~ion in ~~e~7~~na, w~nicl~ hay
~~ c~~mperisaii~n program l~~~seil prinlririly ~n pr~~vi~ing ~payn~tents to ~arlici~ants fir the

rec.rUiCm4t~t oi'neu- partici~~u~ts; not. cm the z~.ta l sale cif ~~r~ducts oz~ services, therct~v
resul.ti~ig in a subst~i~atial pexci;~taee t:?I~~~ruc-ipants lasing n~on~~t.
67.
Defier~d~nts' prt~moti~>i7 oi'this type ~7f~schcme, c~ffen referred to ~.s
~a~-ral-~id se~~errle, ccm5tituccs ~ de~c~tilc ac.i c;i- practice irl ~iolatic,~~ c~ Seciion ~(aj c~fzhe
C~17i~'~' ~I
Income {:~~ t~is
6~.
In nui.r~erou5 instances iz~ c:onnecticm ~~,it.h the atv~~-ti~in~, ir~~~rketin.~
t~~-oi~aotio~il, ~ff~erin~ foi sale, ~7r s~]c <?i'tlie rig~hC do pariici~~atc in th e Verz~ma ~ro~ranl,
~~
I)c~'~cildarits have rc~res~ntcd; ~ireci:ly~ or uidirectly, eapr~ssly or by implication, chat

cons..ine;s ~~~'no b~,c~ai~e Vel~~iz~a n.ff 1 fates ar~~ likely t~~ e~si~i substantial income.
69.
Ire trutkl and in fact, in riuii~~erou~ instances in ~~hich Def~i7dants ha~~e: made
tk~L X~e~~esenta~ti~3s set forth in Paragraph 6~3 ~f this CornplaiT~t, consumers ~~~c~ ~ec<~me
~i~~I711113 ij.j'l~liltc'S ~Tl'0 1101 t[}CLl~' t0 I.rXT'1] SU~~T~Il~lu~ Lr1C0111C,.
iCi,
"therefore, Defendants' ecpresenCations G~tc false or misl~a~i~~~ a~~d
~~~z~s~~itu~e a dece~~ti~~c act ~~r t~racticc in violatit~i~ t~f S~ct.~on 5(a) ot~ the I~1'C Act. 1
C;t)~;'~?T III
~tzilure t~ t7xsciose
7 1.
lt~ ~~urncrous nstancc.5 in c~nncction ti~fi~~ t1.le a~?~~criising, marketi~i~,
proinotii~n, ~~~ferin~ Pot s~ile; or sale cif the ri~;l~~l io participate iii tl~e Vernn~a pro~rarn,
i)e{~~d~nts tzar c r .~,resented. c~irectl~ ~aa~ indirectly, ~xp.essJy or L~~ implication, tti~t
individ~.als l~a~ c earned ~ul~sta~~tia] incc?ine Crortz pai~tici}~atian in t:he Vei7~nza pro`rwm;
ar~c~ ghat auy consuinr:r tivhc~ ~iCCt~ine~ a ~eilirna Affiliate has the ahili~y~ to eam stibstar~tial
iraco~~~e,
??
In r~ui7~et~ous ir;7tar~ces fry ~uhic?Z 1%~fendants hive i;~ade the rc;~ireser~t~~tion
se.t f~~rCla in Paragr~pti 71 o.f~this Complriiilt, D~['cndanLS l~a~~e f~aileci t~ disclose, or

di~cl~~sea~e-~u~t~l~~. that Vernrna~s structure ~~~ures that anost consumers ~a-ro bcc.~~me
Vct.l~:ia ~?.i1'~li~tes ~~~il-1 not ~arnsubstantial inct~:~nz,
7~ .
This adclitioi~al information ~i~aulc! be r~lat~i~ia1 to consumers ii1 deciding
~~>h~~l~er to I~articipat~ iz~ tt~~ Vei3~ma pro~ran~,

~3
;4,
l~efc~lcl~nts' failure to disclose, or to disclose ad~yuat.ely; the material
i.r~fc>r~~~.atio~~ de~c:ih~d i~1 paragraph 7?; in light ~>f the r~E~r~.sunzatioi~s Made in ~1~~r~~~~~r~-~~~h
7 Y. conctiCutes a dec:~eptire ~~ct. car p~actic.e in ~vial~tion cif Seetiorl ~i(al of t.h~ FTC: /pct, ]5
L.S.0 ~ =1~(a).
~O[i`~'T" IV
'~1ea~ts acid ~sir~i~~vent~t ties
7~.
L3~' tu3-nishtn~ VemTZ1a Alfilia~~s ~~ itl~ ~rolnc~tic~~lai r~lat~ri;~ls to be ,aged in.
rccr~~~it~nv ne~v participants t]~at co~7t~it~ false end mi~le~di~ng re-prese~niation~; Defendants
h~~-c provided the i;~ca~~s and iristru~nental~ities fior tale c~~mmissi~n of deceptive acts and
p~ act~~:,es.
~6.
'l~?~~.ef~re, l~efentlant~' practices. as descril7c.d in ~'~ira~ra~~l~ ?~ oft~~is
C;tamplaiY~t, c~nstitlr~~c a rlece~tive act ~~r practice in violation of Sec~ian Sf a) of ih~ I='~I'C
.~~t; 1 ~ li.S.C. 5 4~(aj.
~Zelief I~~fendant
Re;iel I)eJ'~~~1dailt i3ethan; ~ ka .in. ha received. dirGCtl~~ car indirect ~~,
finds or c~tl~~r assess fr~~r1 r)~fe~~dants that dre, traceaE,~~e; te7 funds ~biained lro~t~
U~1'endant,5' customers thrau~h the deceptive acts or practices dcscribec~ }~erein.
7~,
IZelie#~ll~fendar~t is riot a ~?ona l::cie pu~~c}riser ~~~ th legal acicl e-t~uilablc title
tcy T:)efe~da:uts' eti~~s1!a~~rs` ftn7ds, and ~Z.elief~Def'~n~:azzt ~viil be ~zs7justly enriched i.'sI~~e is
not z~equire~ to disgorge the fiends oi~ ~:he vaiti~ ~71:~ the t~ene~f:~t shy r~c~ived tis a resr~lt of
Defendants' cfece}~iive acts c7r practace~.
~4
9.
13~ ~-~aso~7 of t}~e: foreg~c~i~1g. R.cl~ef I)efen~i~~:~t t;c~.lds funds ,end assets in
c~~nstructi~ e tr~a>t i~~r the bc:r~rfit of Del'tndants' i:ustomers.

CO~'~u'1~!f[?1Z Ii~.l~?~2'1'
$0.
Coi~slimers ?~a~~e~ sufferecj and w=ill contu~uc to su-f~fic.r subtit.antial injury as a.
result ot~ T)e'endanc 'viala~i~,ns of tLe 1-~TC Acs:. Tn addition, 1)ete~~darts hati e b~:e~~
uYijustiy cr~riel~ie~ as n resu9l ~ftheir unlawl~u)~ ~ctS or~ practic-es. AbscnC injliticti~re re;ief
l~~> tk~zis t~òiirt, Defern~a~nt; a~~e. likely to cont~l~u~ to injure con;uirrers; reap tii~just
ensich:.~ent, and har~7~ il7e j.~tihlic intel'~st.
'~'~115 CE)IJRT'~; F'O`~'Vi:FZ'T~ Ge~~~.rai'~' ~ZEI,dEF
81.
S~ctinn 13(bj of~~heF"IBC x'~ct, 3 ~ L'.S.C. ~ 53(h), et~~~o~cr; th:~s Court to
~r~trlt injunctive ai d such otter relief ~~s t,~e (ot~rt n ay d~.em a,~~rppria?e to Malt al~ci
r~,~~re~ss vi<~lations ~~f ~~i~y provision of law er~fc~rced by t}~c F'I~C'. T'h~. Cc:~ur~, iii the
cx .reis~ c~f~ its ~qu~tahle artic]ictioia; may a~~ ~u~ci an~illa~y` relief, Including rescistiion or
refoi~na~ion cif c~7ntracG~, t~estit~tion, the r;fuz~icl of monies paid, and the dis~.or~en~~cni o~
ill-gotten ~73onies, t~o prevent ~~~7d remc~d~~ any vio(~~tion ~Jf any ~7rovision cif la~v ezlforced
b~~ El~~e F~TG.
~t-~l~e.rc ~~re, 1'IainiiFf:~~l'C, pursuant t~ Section 13("b) of the 1~,.I,C~: f'~~~, t~ U.S C:, ~
5~-~(~~) and t1.~~ Go~urt~s o~~n ec~uit~~bli;p~~~~~e~~s, rc~uest~ that the C~~urt:
A.
:'~~ar~ Plaint:i.tl~suc~~ pr~lii7~ nary inj~nct~v~ an~i a.rlciliar~~ rc17c:C as rn~~~ be
nc~essary tc~ a.~v~ert tkic likelihood of consur~~er injury c~uri~:~g the ~~enc{ency of this action
~ncf tc~ pr~SCrvL ~h~ passibilit,~- of efPec.i~~e fi~~al reliei~, irycludin~~ but nit limit~cd to,
?~
t~:,~~parary and prelilni~~aiti injunctions. an order freezing assets, ir,:m~ tiiai~ 3ccLss, and
~ppoint~l~cnt ~~f a rec,eirer;
B.
Enter ~ permanent injr~nction to pre~~el~t +.~~uturc~ vi~~le~~ions ofthe ~'[~C Act by
n~r~,~a~~,ts:
G.
f~~~aAcl such rLliel: as the Co~~t .finds ~~cc.~ssu~r~~ to redress injury tc~
~c~nsumers resin ink ~rozn i)ef~ndants' ~ri~lati~Tls of the ~~TC net, inc)ud i~~ lout rtc~t
li7aZZt.ed to, rc~.scissi~z~ or relt~i-~natior7 ~~f contracts, restihzxioi~, the reful~id cif a~~ronies paid,
and tl~e cliseor~e~7~eni of il]-~<~tten mc~r;ies;
D.
I~r~tcr an order rcauiring Relief laefcndant to disbor~e all funds and ~isscts,
or the value oPt~~e bencflt she recci~ ed From Mlle f-gilds au~l assets, ~~~rtiich are traceable ~u
])cJtndanta' c?~ce~~tive act; ~?r practice; uncl
L,.
~\~~%ard E'laintif~f the casts of bringi~lg tl~~is action. ~~s ~~rell as such othc,r and
adciitic~~~al relief a5 il~e Caurt rna}~ cicterriiii~e to h~ j~:st ac;d groper.
DATL:v t i p l'th c~: ~ of.:4u~,ust, ?01
R~spccti'~iIL~- sub~7~liTed,
JnN~1TlI:AN E. NUT~C~3"IÈRI~,~7~.1~1~'~
Ueneral C'~~unsel
~, -,
,~
~a;~
~
r~I'riEL1~;~7UE P. LINVII.,LF, TcY. 13ar No. 24()58793

JASC~r~ C~.:~~TUO~+. ~Tèx. ~3ar i~`c~. 24001 l ~8~
I`~tiN~ L). LI.J~L''`~}",, .I Lx. Bar ~'p. ZOOS=~?~6
1'~1IL.Y I3. ROT3Iti~C}N, "1'ea. 13ar Na.?40~67~7
F~cderal `'ride Comit~iss tin
1 x)49 I~r~~an Street, Si.~ite 21 ~0
U~:llas.'C~xas ~7~201
(214)9"i9-9i~1; aliri~~iller~{'~~.gov (Linville)
(2l4) 979-9378;jinonn(~ftc.~o~~(Mootr)
(214) 9i9-~~71; alejeune,'u~'ftc.gc~v (LeJeul7e)
(714j 97~>-r)~86; erobii~sc~n;'~.~~.Ctc.gov (R~l~inst>nj
(?14j 97~ -:3079 (I~ ax)
Att~rney~s fnr f']aintil`f
[-1?D~RAI.'[ 1~4i71~ C;01I5SION
27
http://www.azd.uscourts.gov/cgi-bin/generate_civil_js44.pl

UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
Civil Cover Sheet

This automated JS-44 conforms generally to the manual JS-44 approved by the Judicial Conference of the United States in September 1974. The data is required for the use of
the Clerk of Court for the purpose of initiating the civil docket sheet. The information contained herein neither replaces nor supplements the filing and service of pleadings or
other papers as required by law. This form is authorized for use only in the District of Arizona.
The completed cover sheet must be printed directly to PDF and filed as an attachment to the Complaint or Notice of
Removal.
Vemma International Holdings ; Vemma Nutrition
Company ; Benson K. Boreyko
Plaintiff(s): Hanover Insurance Company
Defendant(s):
County of Residence: Outside the State of Arizona
County of Residence: Maricopa
County Where Claim For Relief Arose: Maricopa

Plaintiff's Atty(s):
Defendant's Atty(s):
Mark Worischeck
Sanders & Parks, PC
3030 N. Third St. #1300
Phoenix, Arizona 85012
602-532-5795
II. Basis of Jurisdiction:
4. Diversity (complete item III)
III. Citizenship of Principal Parties

(Diversity Cases Only)
Plaintiff:- 2 Citizen of Another State
Defendant:- 1 Citizen of This State
IV. Origin :
1. Original Proceeding
V. Nature of Suit:
110 Insurance
VI.Cause of Action:
Declaratory relief under 28 U.S.C. Section 2201, et. Seq.
VII. Requested in Complaint

Class Action:No
Dollar Demand:
Jury Demand:Yes
VIII. This case is not related to another case.
Signature: s/Mark Worischeck
Date: 4/15/2016
If any of this information is incorrect, please go back to the Civil Cover Sheet Input form using the Back button in your browser and change it. Once correct, save
this form as a PDF and include it as an attachment to your case opening documents.
Revised: 01/2014
1 of 1
4/15/2016 11:54 AM

Hanover Vs Vemma-April 2016

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Droits d'auteur :

Hanover Vs Vemma-April 2016

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Case 2:16-cv-01071-BSB Document 1 Filed 04/15/16 Page 1 of 55

1 Mark G. Worischeck/Bar No. 011147

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Hanover Insurance Company, a Delaware

Plaintiff Hanover Insurance Company (Hanover), files its Complaint for

Declaratory Judgment pursuant to 28 U.S.C. 2201, et seq. against Defendants Vemma

International Holdings, Inc., Vemma Nutrition Company (collectively, Vemma), and

Benson K. Boreyko, and alleges as follows:

This lawsuit involves an insurance coverage dispute.

seeking coverage for an underlying lawsuit that alleges Defendants operated an

Case 2:16-cv-01071-BSB Document 1 Filed 04/15/16 Page 2 of 55

District Court granted a Preliminary Injunction against Defendants, stating [t]he

Hanover issued certain claims-made Private Company Management

Liability Insurance Policies to Defendant Vemma. Specifically, the 2015-16 Policy

NOTICE: THE LIABILITY COVERAGE PARTS ARE

Indeed, on February 9, 2012, during the Hanover 2011-2012 Policy Period,

a company called BLS, LLC (BLS) commenced an arbitration proceeding (the

Case 2:16-cv-01071-BSB Document 1 Filed 04/15/16 Page 3 of 55

entered against Vemma.

Because the pyramid-scheme allegations of the FTC Lawsuit (filed in the

Lawsuit under that Policy.

Under the Notice Provisions, Defendants were required to provide to

Case 2:16-cv-01071-BSB Document 1 Filed 04/15/16 Page 4 of 55

Separately, the Policy contains an Unfair Business Practices Exclusion that

Alternatively, because Vemma failed to disclose the Arizona Pyramid

Hanovers Policy Application, Hanovers Known Claim Exclusion applies to bar

An actual controversy exists between Defendants and Hanover regarding

responsibilities of the parties by this Court.

Plaintiff Hanover is a company incorporated under the laws of Delaware

Case 2:16-cv-01071-BSB Document 1 Filed 04/15/16 Page 5 of 55

On information and belief, Defendant Vemma International Holdings, Inc.,

On information and belief, Defendant Vemma Nutrition Company, is an

On information and belief, Defendant Benson K. Boreyko is a resident and

JURISDICTION AND VENUE

amount in controversy exceeds $75,000, exclusive of interest and costs.

Venue is appropriate under 28 U.S.C. 1391 because a substantial part of

The Relevant Policies

2011 to August 1, 2012 (the 2011-12 Policy).

Case 2:16-cv-01071-BSB Document 1 Filed 04/15/16 Page 6 of 55

1 and is incorporated herein by reference.

2 and is incorporated herein by reference.

CAPITAL LETTERS and in bold):

NOTICE: THE LIABILITY COVERAGE PARTS ARE

The respective relevant Insuring Provisions of the 2015-16 Policy (Sections

I.A. and B. of the D&O Coverage Part), states:

The Insurer will pay on behalf of the Insured Entity, Loss

Case 2:16-cv-01071-BSB Document 1 Filed 04/15/16 Page 7 of 55

the Policy Period, or the Extended Reporting Period if

The Insurer will pay on behalf of an Insured Entity, Loss

The Claims Against Vemma and/or Boreyko

presented for monetary Damages or non-monetary relief for a Wrongful Act.

3 and is incorporated herein by reference.

attached hereto as Exhibit 4 and is incorporated herein by reference.

5 and is incorporated herein by reference.

The Arizona Pyramid Arbitration

On or about February 29, 2012, BLS, LLC (BLS) submitted a Demand

On or about April 7, 2012, BLS submitted a second Demand for

Arbitration naming Vemma and adding Defendant Boreyko.

On or about September 3, 2012, BLS submitted a third Demand for

Arbitration naming Vemma and Boreyko.

Case 2:16-cv-01071-BSB Document 1 Filed 04/15/16 Page 8 of 55

In the Arizona Pyramid Arbitration, BLS asserted claims against

BLS alleged in its Demand for Arbitration that Vemma is an illegal

pyramid promotional scheme under state and federal law.

In the Demand for Arbitration, BLS sought more than $200,000 in