Contract analysis

I. Introduction and Purpose This firm represents Whitmore Aerospace LLC ("WAL"), a Virginia limited liability company headquartered at 4200 Commerce Park Drive, Suite 600, Chantilly, Virginia 20151, in connection with an indemnification dispute with Hargrove-Dalton Defense Systems, Inc. ("HDDS"). We write as a follow-up to our initial tender letter dated September 22, 2022 and to Meridian Surety & Insurance Group's (

II. Summary of the Underlying Claim and Tender We briefly restate the factual background underlying WAL's claim tender, which was set forth in detail in our September 22, 2022 correspondence and the accompanying enclosures. On September 9, 2022, HDDS transmitted to WAL a formal indemnification demand in the amount of $14,726,583 (the "Demand"). The Demand arises from cost overruns identified by the United States Depa

III. Meridian's Reservation-of-Rights Letter On November 1, 2022, Meridian issued the ROR Letter, which acknowledged receipt of WAL's claim tender and stated that Meridian was continuing to investigate the claim. The ROR Letter reserved Meridian's rights on two principal grounds, both directed to the CGL Policy: First, the ROR Letter cited the contractual-liability exclusion set forth at Exclusion (b) of the CGL Poli

IV. Developments Since the Reservation-of-Rights Letter Significant developments have occurred in the underlying dispute since November 1, 2022. We summarize these developments below to ensure that Meridian's coverage analysis reflects the current posture of the matter. A. Filing of the Declaratory Judgment Action On November 28, 2022, WAL filed a Verified Complaint for Declaratory Judgment against HDDS in the United

V. WAL's Position on Coverage WAL respectfully disagrees with the reservations identified in the ROR Letter and maintains that coverage exists under one or both of the D&O Policy and the CGL Policy. WAL's position with respect to each of the reservations set forth in the ROR Letter is as follows. A. The Contractual-Liability Exclusion (Exclusion (b), CGL Policy) The ROR Letter reserved Meridian's rights under the con

VI. Request for Definitive Coverage Determination In light of the foregoing, WAL respectfully but firmly requests that Meridian issue a definitive coverage position — either granting or denying coverage — under both of the following policies: (a) The D&O Policy, Policy No. MSI-DO-2022-07814, with an aggregate limit of $10,000,000 and a retention of $250,000; and (b) The CGL Policy, Policy No. MSI-CGL-2021-33291, with

VII. Reservation of Rights WAL expressly reserves all rights, remedies, and defenses available to it under the D&O Policy, the CGL Policy, at law, and in equity, including but not limited to claims for breach of the duty to defend, breach of the duty to indemnify, breach of the implied covenant of good faith and fair dealing, bad faith, estoppel, and any other claim or remedy that may be available under applicable st

VIII. Enclosures Enclosed herewith for Meridian's reference are the following documents:

1. Copy of Verified Complaint for Declaratory Judgment filed November 28, 2022 (Whitmore Aerospace LLC v. Hargrove-Dalton Defense Systems, Inc., Case No. 1:22-cv-10147-RMB, U.S. District Court for the Southern District of New York);

2. Copy of HDDS Answer and Counterclaim filed January 13, 2023; and

3. Copy of Court Order Granting Stay dated March 7, 2023. We look forward to receiving Meridian's definitive coverage position at the earliest opportunity and in no event later than April 10, 2023. Should you require any additional information or documentation to complete your coverage analysis, please do not hesitate to contact the undersigned directly at (212) 403-7246 or by electronic mail at panand@calderwoodhark