- 1 JANUARY 5, 2011 CIRCULAR NO. 01/11 TO MEMBERS OF THE ASSOCIATION Dear Member: CHANGES TO THE RULES OF THE ASSOCIATION FOR THE 2011 POLICY YEAR Please note that your Board of Directors has approved the following changes to the Club’s Rules to take effect from February 20, 2011. They derive from a continuing review of the language of the existing Rules and a desire to maintain good housekeeping in the interests of the clarity and efficacy of the terms on which Members are insured by the Club. The changes are set out in the order in which current Rules appear in the Rule Book. Class I: Protection and Indemnity Insurance General Insurance Provisions (Rule 1.4) An amended Rule 1.4.47 will be introduced, as follows: Adjudication of Differences or Disputes 47 a If any difference or dispute shall arise between a Member and the Association and/or its agents (which shall include, without limitation, the Association’s Manager and the Association’s and the Manager’s directors, officers and employees) concerning the construction of the Member’s contract with the Association, or the insurance afforded by the Association under the contract, or any amount allegedly due from the Association to the Member, or any other difference or dispute, and the Member is dissatisfied with the Manager’s final decision, the Member may submit a Notice of Appeal to the Association’s Board of Directors asking it to adjudicate the difference or dispute. Such Notice of Appeal, if any, must be submitted by the Member through the Manager no later than sixty days after the Manager shall have provided its final decision to the Member regarding the difference or dispute. b The procedures for adjudication by the Directors, which are incorporated into this Rule, are stated in Appendix A to these Class I Rules. c No Member shall be entitled to maintain any action, suit or other legal proceedings against the Association and/or its agents upon any such difference or dispute unless and until the same has been appealed to the Association’s Board of Directors and it shall have adjudicated the dispute and given its decision thereon. The Board of Directors’ decision shall be - 2 made and published as soon as reasonably possible, but no more than six months after receipt of the last written submission permitted under Appendix A to these Class I Rules. d The decision of the Association’s Board of Directors is intended to be final and binding. However, should the Member wish to appeal that decision, such appeal shall be brought only by suit against the Association in the United States District Court for the Southern District of New York and must be commenced no later than sixty days after the Board’s decision has been provided to the Member. The relevant Appendix A is also attached hereto. This amendment is to ensure that, to the maximum extent possible, the Club’s adjudication procedures will satisfy a court’s concerns regarding due process and thus minimize the Club’s exposure to litigation with Members and the costs attendant thereon. The following Sub-section 54 to Rule 1.4 will be formally incorporated in the 2011 Rule Book, having already been implemented by way of an earlier enabling Rule in Circular No. 20/10 of July 15, 2010. Sanctions 54 Whenever coverage extended by the Association would be in violation of any law applicable to the Association, including, but not limited to, the prohibitions and requirements of any economic, financial, or trade sanctions administered by any S