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					                                                    Exclusions
Named Insured:       Agents of Penn Mutual Life Insurance Company and Registered Representatives of Hornor Townsend and
                     Kent, Inc. who have enrolled for coverage, paid a premium, are scheduled by the Insurer, and are members
                     of the Financial Sales Professionals Risk Purchasing Group
Policy Number:       EOC 5431388-06
Insurer:             Steadfast Insurance Company
Policy Period:       July 31, 2010 to July 31, 2011




This Policy does not apply to any “Claim”:

A.        arising out of any act, error, or omission of the “Insured” or “Additional Insured” committed
          with dishonest, fraudulent, criminal, malicious or knowingly wrongful purpose or intent;
          however, notwithstanding the foregoing, the “Insured” or “Additional Insured” shall be
          afforded a defense, subject to the terms of this Policy, until the allegations are
          subsequently proven by a final adjudication. In such event, the “Insured” or “Additional
          Insured” shall reimburse the Company for all “Defense Costs” incurred by the Company;

          The act of any “Insured” or “Additional Insured” shall not be imputed to any other “Insured”
          or “Additional Insured” for purposes of determining the applicability of this Exclusion.

B.        alleging bodily injury, sickness or death of any person, or to injury or destruction of any
          tangible property, including loss of use thereof;

C.        alleging the liability of others assumed by the “Insured” under any contract or agreement
          unless such liability would have attached to the “Insured” even in the absence of such
          agreement however, this exclusion shall not apply if the liability arises from the negligent
          performance of “Professional Services”;

D.        by an enterprise which one or more “Insureds” own, operate, control or manage; or any
          “Claim” by an enterprise which owns, operates, controls or manages an “Insured”;

E.        made against the “Insured” or “Additional Insured” based upon or arising out of any
          Pension, Profit Sharing, Health and Welfare or other Employee Benefit Plan or Trust
          sponsored by the “Insured” as an employer;

F.        arising out of a willful violation of the rules or regulations of the National Association of
          Securities Dealers (FINRA) or the Securities and Exchange Commission or the Securities
          Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940,
          or the Investment Advisors Act of 1940 and any amendments thereto, or of any state
          securities statute or regulatory agency however, this exclusion shall only apply when the
          failure to comply with such rule or regulation is material to the allegations upon which the
          “Claim” is based;

G.        based upon a loss arising out of the “Insured” making promises or guarantees as to the
          future value of any investment;

H.        arising out of professional services performed by the “Insured” as an actuary, accountant,
          attorney or real estate agent or real estate broker, property/casualty insurance agent or
          third party claims administrator;

I.        arising out of, or contributed to by, any commingling of, or use of client funds;


PennExl06222010v1                    Brown & Brown of California, Inc. dba CalSurance Associates
                                           (dba CalSurance Brokerage in New York)
                                              California License Number: 0B02587                                   1 of 4
                                                    Exclusions
Named Insured:       Agents of Penn Mutual Life Insurance Company and Registered Representatives of Hornor Townsend and
                     Kent, Inc. who have enrolled for coverage, paid a premium, are scheduled by the Insurer, and are members
                     of the Financial Sales Professionals Risk Purchasing Group
Policy Number:       EOC 5431388-06
Insurer:             Steadfast Insurance Company
Policy Period:       July 31, 2010 to July 31, 2011




J.        arising out of, directly or indirectly, insolvency, receivership, bankruptcy, or any inability or
          refusal to pay based upon insolvency, receivership or bankruptcy of any organization in
          which the “Insured” has placed or obtained coverage or in which an “Insured” has placed
          the funds of a client or account however, this exclusion shall not apply if the “Claim” is
          based upon the insolvency, receivership, liquidation or inability to pay of any life, accident
          or health insurer that was rated “A-“ or better by A.M. Best Company at the time the
          business was placed;

K.        arising out of the “Insured's” activities in computer programming or processing if the
          resulting programs are sold or distributed or if a fee is charged for use of the program;

L.        arising out of disputes by or between “Insureds” or Penn Mutual Life Insurance Company
          or its subsidiary “Broker/Dealer” or any other insurance company, agent or broker,
          including but not limited to, disputes concerning commissions, fees, client lists or
          entitlements however, this exclusion shall not apply to (1) wrongful termination suits
          brought by an agent against an “Insured” Field Manager, (2) a “Claim” brought by another
          “Insured” agent or any other agent or broker in his/her capacity as a client, or (3) a “Claim”
          brought by an insurance company, other than Penn Mutual Life Insurance Company,
          against an “Insured” where the “Claim” was initially brought against the insurance
          company by a third party based on the acts of the “Insured”, provided such acts would
          otherwise be covered under this policy;

M.        arising out of the use of confidential information by an “Insured”, including but not limited to
          such use for the purpose of replacement of coverage however, this exclusion shall only
          apply when such use is for the “Insured’s” own personal profit or gain;

N.        arising out of the “Insured's” inability or refusal to pay or collect premium, claim or tax
          monies;

O.        against an “Insured” arising out of or involving investment products partially or totally
          owned by the “Insured”;

P.        arising from or contributed to by the placement of a client's coverage or funds directly or
          indirectly with any organization, which is not licensed to do business in the state or
          jurisdiction with authority to regulate such business. However, this exclusion does not
          apply to any “Claim” arising from or contributed to by the placement of a client's coverage
          or funds directly or indirectly with any organization which is an eligible surplus lines insurer
          in the state or jurisdiction with authority to regulate such business;

Q.        arising out of the offering, sale or servicing of structured settlements; however, this
          exclusion does not apply to any ‘Claim’ arising out of the sale or servicing of annuity
          products used to fund the structured settlements



PennExl06222010v1                    Brown & Brown of California, Inc. dba CalSurance Associates
                                           (dba CalSurance Brokerage in New York)
                                              California License Number: 0B02587                                   2 of 4
                                                    Exclusions
Named Insured:       Agents of Penn Mutual Life Insurance Company and Registered Representatives of Hornor Townsend and
                     Kent, Inc. who have enrolled for coverage, paid a premium, are scheduled by the Insurer, and are members
                     of the Financial Sales Professionals Risk Purchasing Group
Policy Number:       EOC 5431388-06
Insurer:             Steadfast Insurance Company
Policy Period:       July 31, 2010 to July 31, 2011




R.        arising out of the ownership, formation, operation or administration of a HMO, PPO, Risk
          Retention Group, purchasing group or self-insurance program. However, coverage is
          provided for “self-funded plans” as defined in Section II. DEFINITIONS N. Such coverage
          is applicable solely to “Defense Costs”.

The following exclusions apply to broker/dealer activities through Hornor Townsend and
Kent, Inc.

S.        the giving of financial, economic or investment advice, investment management
          services, or underwriting services relating to, or in connection with, any aspect of any
          actual, attempted or threatened mergers, acquisitions, divestitures, tender offers, proxy
          contests, leveraged buy-outs, going private transactions, reorganizations, capital
          restructuring, recapitalizations, fairness opinions, spin-offs, primary and secondary
          offerings of securities, regardless of whether the offering is a public offering or private
          placement, or other efforts to raise or furnish capital or financing for any enterprise or
          entity, or disclosure requirements in connection with any of the foregoing;

   T. the trading of commodities, commodity future contracts, or option contracts other than
      covered call option contracts or protective puts;

   U. any transaction to purchase or sell “Securities” or other investment products that was
      not authorized or approved by HTK, or where the actual or alleged transaction to
      purchase or sell such “Securities” or other investment products was not processed or
      approved for processing by HTK;

   V. any “Claim” brought by, or on behalf of, any clearing agency, or arising out of any
      function of any “Insured” as a clearing agency;

   W. any function of any “Insured” as a specialist or market maker for any securities as
      defined in the Securities Exchange Act of 1934; or failing to make a market for any
      securities; or the purchase, sale or failure to purchase or sell securities when the
      “Insured” is a specialist or market maker for such securities.;

   X. the “Insured’s” activities in exercising discretionary authority, management or control
      over a customer’s account; however, this exclusion shall not apply to an “Insured” when
      exercising discretionary authority as a “Registered Investment Advisor” or to pre-
      authorized Associated Person of HTK with respect to mutual funds, variable annuities or
      variable life products or while providing an asset management allocation service for a
      fee with respect to mutual funds, variable annuities or variable life contracts or the
      exercising of discretionary authority as a “Registered Investment Advisor” in the
      implementation of financial plans which were created by an outside money manager
      provided such activity is authorized and approved by HTK;



PennExl06222010v1                    Brown & Brown of California, Inc. dba CalSurance Associates
                                           (dba CalSurance Brokerage in New York)
                                              California License Number: 0B02587                                   3 of 4
                                                   Exclusions
Named Insured:      Agents of Penn Mutual Life Insurance Company and Registered Representatives of Hornor Townsend and
                    Kent, Inc. who have enrolled for coverage, paid a premium, are scheduled by the Insurer, and are members
                    of the Financial Sales Professionals Risk Purchasing Group
Policy Number:      EOC 5431388-06
Insurer:            Steadfast Insurance Company
Policy Period:      July 31, 2010 to July 31, 2011




   Y. any “Claim” arising out of any actual or alleged activities in connection with any equity
      security priced under five dollars ($5.00) at the time of purchase; however, this
      exclusion shall not apply if the security is: (1) registered, or approved for registration
      upon notice of issuance, on a national securities exchange; (2) authorized, or approved
      for authorization upon notice of issuance, for quotation in the NASDAQ system; or (3)
      issued by an investment company registered under the Investment Company Act of
      1940 (as amended). For the purposes of this exclusion, any equity security which is
      listed on the NASDAQ bulletin board or pink sheets shall not be considered approved
      for authorization upon notice of issuance, for quotation in the NASDAQ system.
      However, this exclusion shall not apply to the sale, attempted sale or servicing of any
      unsolicited Penny Stocks through HTK.

   Z. the purchase or sale of or the rendering of advice regarding promissory notes,
      investments involving ATM machines or payphones, viatical settlements, viaticated
      insurance benefits, any security backed by viatical settlements, or ETS pay phones
      however, this exclusion shall not apply to accelerated death benefits of a life insurance
      policy or to life settlements as covered under Section II. DEFINITIONS, Paragraph M.8.

   AA.the purchase or sale of or the rendering of advice regarding high yield/junk bonds;
      however, this exclusion shall not apply to high yield/junk bond options selected by a
      client within an insurance product or unsolicited high yield/junk bonds placed through
      HTK. This exclusion shall only apply with respect to high yield/junk bonds placed after
      July 31, 2004.

   BB.a “Claim” brought by, or on behalf of, the Securities Investor Protection Corporation, or
      any governmental, quasi-governmental, regulatory, or self-regulatory entity, whether
      directly or indirectly, and regardless of the capacity in which it brings the “Claim”;
      however, this exclusion shall not apply to any “Claim” by such entity to enforce its right
      as a direct customer of the “Insured”.

The above is not intended to interpret the terms of the policy or to be legal advice, but rather, a
summary of the exclusion listed in the policy. The actual policy language governs in all cases.




PennExl06222010v1                   Brown & Brown of California, Inc. dba CalSurance Associates
                                          (dba CalSurance Brokerage in New York)
                                             California License Number: 0B02587                                   4 of 4

				
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