Credit Insurance Policy For The Sale Of Merchandise And Services In The Local Market (Israel) And Exported Abroad

Transcription

1 Credit Insurance Policy For The Sale Of Merchandise And Services In The Local Market (Israel) And Exported Abroad Page Definitions 3 What Is An Insurance Event 5 Exceptions 5 Duty To Offer Insurance Coverage 6 Credit Cap 6 Stipulations Upon The Insurance Coverage 7 Furnishing Statements 7 Extending The Payment Date 7 Notices To The Company 7 Occurrence Of Insurance Incident And Insurance Proceeds 8 General Terms 8 1

2 Credit Insurance Policy For The Sale Of Merchandise And Services In The Local Market (Israel) And Export Abroad Whereas the Insured whose name is denoted on the schedule page approached Clal Credit Insurance Ltd. (hereinafter: "The Company") with a written offer containing its details and declarations and which serve (together with all the additional information that was furnished in writing) as a material basis of this policy and an integral part hereof; Therefore this policy (hereinafter: "The Policy") attests to the fact that in consideration of payment of the insurance premiums and subject to all the provisions in the policy and the schedule page, the Company will indemnify the Insured for damage it sustains as a result of the occurrence of an insurance event to the extent of the protected loss and up to the general limits of liability as set forth below. Definitions: In this policy the following phrases will assume the meaning stated alongside them: 1. "Insolvency" mecans one of these: 1.1 The Client was declared bankrupt and/or a receiver was appointed over his property and this appointment was not cancelled within thirty days from the day the receiver was appointed and/or an involuntary winding-up order was issued against the Client and it was not cancelled within thirty days from the date it was issued and/or a decision was reached with respect to voluntary winding-up due to the Client's insolvency and all if these were issued by a competent court. 1.2 The Client reached a recognized arrangement pursuant to the laws of its country with all its creditors pursuant to which only some of the Client's debts would be paid. 1.3 The Client is in a legal situation similar to the foregoing. 2. "Continuous Non-Payment" the Client, after receiving the merchandise or service, pursuant to the matter at hand, does not settle his debt, in full or in part, to the Insured, by the end of the period set forth in Clause 37.2 below. 3. "General Limits Of Liability" the maximum amount that the Company is liable to pay as insurance proceeds during the insurance period, as set forth in the schedule page. 4. "Schedule Page" a page in which the insurance details, to include inter alia, the policy number, the Insured/s name(s), Insured's business, insurance period, special terms, premiums, payment dates and such like are stated attached to the policy and constituting an integral part thereof. 5. "Protected Loss" the Client's debt to the Insured for the sale of merchandise or rendering of services, whether on the local market or for export, as set forth in the invoice, and deriving from the Insured's business as set forth in the schedule page, that was not paid due to insolvency or continuous non-payment and which does not exceed the credit cap that was in effect with respect to that Client on the date the sale of merchandise was executed or the service rendered, subject-matter of the insurance event 2

3 for which the Insured is claiming, and after deduction of the amounts set forth below: 5.1 Any amount paid by the Client, whether on account of the invoice or not, even after the occurrence of the insurance event and any expense that the Insured saved due to non-payment of the invoice. 5.2 Any amount the Client was entitled to take into account as payment to the Insured such as: credit, offset or counter-claim, whether the Client exercised the right or not. 5.3 Any amount collected by the Insured from any source, even after the occurrence of the insurance event, including, from redemption of merchandise or other materials and/or realization of security and/or amounts or credits that the Insured is entitled to offset, in whole or in part, to credit the aforesaid account, whether he exercised this right or not and any amount that is added to the price of the merchandise or service due to non-payment of the debt in a timely manner such as interest in arrears, fines and linkage. 5.4 The deduction of the amounts in Clauses 5.1 and 5.3 above is subject to the provisions of Clause 42.1 below. 6. "The Statement of Sales" itemization of all the prices of the merchandise and/or service/s rendered by the Insured to the Client/s, the consideration thereof and any other detail that is required by the Company. 7. "The Deductible" the part of the protected loss set forth in the schedule page borne by the Insured at its expense, for each insurance event and which will be deducted from the amount of the protected loss as noted in Clause 39.2 below, for the purpose of calculating the insurance proceeds that the Insured is entitled to under the policy. 8. "Accumulative Deductible" the amount set forth in the schedule page borne by the Insured at its expense in relation to one insurance event or to the total of all the insurance events during the insurance period, to be deducted from the protected amount as noted in Clause 39.2 below for the purpose of calculating the insurance proceeds that the Insured is entitled to under the policy and this in addition to the deductible. 9. "The Consideration" the amount the Insured is entitled to receive in accordance with the agreement between itself and the Client from the sale of the merchandise or service rendered as set forth in the invoice. 10. "Invoice" An invoice or accounting issued by the Insured to the Client in which it will also denote that the merchandise will remain in the Insured's exclusive ownership until full payment of the consideration by the Client. 11. "Client/s" the Insured's Client, located in Israel and/or whose place of residence is in one of the countries set forth in the export countries schedule attached to the policy (hereinafter: "Appendix A"), that the Company agreed to grant it a credit cap as well as any guarantor who guaranteed payment of the consideration by the Client. 3

4 The following will not be included in the definition above: a. Any Client that is a company affiliated to the Insured as defined in Clause 22.2 below; b. Any Client listed in the schedule page. c. Any governmental office or local authority in Israel. 12. "The Insured" the person whose name appears on the schedule page. 13. "Payment Date" the agreed upon payment date for the Client's debt as set forth with respect to this debt in Clause 5 above, pursuant to the terms of the agreement between the Insured and the Client. 14. "Date of Sale or Shipping the Merchandise for Export" the date loading of the merchandise onto the ship or aircraft destined for abroad and land transportation is completed, from the moment the merchandise crosses the borders of the State of Israel. 15. "Date of Sale or Shipment of Merchandise for the Local Market" the date upon which the merchandise reaches the Client's address agreed to with the Insured and/or someone on its behalf. 16. "Date Service is Rendered"- the date upon which the service is rendered to the Client and in the event of continuous service the date the Client receives the invoice for the service rendered or 30 days from the date it was given to the Client, the earlier of the two. 17. "Merchandise" / "Service" merchandise that is/are sold by the Insured to the Client or the service or services rendered by the Insured to the Client. 18. "Political Risks" are one of the following situations: 18.1 General moratorium (deferring payment of the debt) that was declared by the government of the Client's country or a third country through which payment of the consideration is to be made to the Insured (hereinafter for the purpose of this Clause: "The Importing Country") Revocation of an import license or prohibition against importing by the importing country preventing the performance of the agreement between the Client and the Insured, in whole or in part, including but not limited to payment of the agreement consideration provided that the said prevention does not derive from an omission by the Client or the Insured Any other measure or decision by the importing Company that is beyond the Insured and Client's control that prevent the sale of the merchandise or rendering the service by it, in whole or in part A political incident, economic difficulty or legislative operation (a valid law, ordinance, order or regulation) (hereinafter: "The Legislation") in the importing country, which prevents or delays the transfer of the consideration pertaining to the sale of the merchandise or rendering the service that was deposited in the bank, under circumstances that are beyond the Insured and Client's control. 4

5 Provided that the Client deposited in the bank, irrevocably, the amount in the currency of the Client's country in order to remit it to the Insured, equal to the amount that is owed pursuant to the agreement between them, and pursuant to terms that were approved by the Company, unless the buyer is estopped by a valid law of his country from depositing the said deposit Non payment of the consideration for any reason by a public client being: a government or any governmental office or local authority in the importing country or an entity that is subject to governmental control, such governmental office or local authority, and which cannot find itself in an "Insolvency" situation as defined above, in accordance with the laws of the importing country. The date of the occurrence of the insurance event pertaining to the political risk with respect to this Clause is six months after the political risk event or six months from the payment date, the later of the two. 19. "Exchange Rate" the known representative rate of any given foreign currency as published by the Bank of Israel on the relevant date. 20. "Insurance Period" twelve calendar months starting from the day the policy takes effect as set forth in the schedule page or any twelve calendar month period thereafter, subject to changes as implemented by the Company from time to time and notice thereof will be sent to the Insured 30 days prior to such changes taking effect. What Is An Insurance Event: 21. An insurance event is an event which caused the Insured damage as a result of the Client not paying his debt to the Insured for the sale of the merchandise or the service rendered by the Insured to the Client within the Insured's field of business, whether on the local market or export, during the insurance period to the extent of the protected loss and subject to the limits of liability including due to: 21.1 Insolvency or continuous non-payment Political risks only with respect to countries appearing in the "Countries List" Appendix attached to the policy. Exceptions: 22. This policy does not cover: 22.1 Commercial Disputes: An event whereby the Client asserts that he is released from paying the Insured the consideration owing on the sale of the merchandise or service rendered or is entitled to withhold payment, in whole or in part, due to early payment and/or right to offset and/or claim or counter-claim, or that he is released from fulfilling his obligations pursuant to the agreement between the himself and the Insured for any given reason. The foregoing will not apply if it is determined in a final and absolute judgment rendered by a competent court that the Client's assertion is rejected or until it is 5

6 clarified by a way to be approved by the Company that the Client's assertion is rejected, all pursuant to the earlier event. If despite the above the Company agreed to pay the Insured the insurance proceeds and thereafter, through collection proceedings against the Client, a competent court or the head of the collection office or arbitrator rendered a judgment or decision or arbitrator's ruling accepting the Client's assertion, in whole or in part, the Insured must reimburse the Company of the insurance proceeds that it received in accordance with the judgment, decision or arbitrator's ruling Selling merchandise/rendering the service/s through the Insured's sales agent and/or through affiliated companies and/or to them unless the Company agreed to cover them. "Affiliated Company" a Company in which the Insured holds 50% or more of the means of control directly or indirectly through a subsidiary in which it holds 50% or more of the means of control and/or a Company through which the Client holds the Insured, whether directly or indirectly, 50% or more of the means of control therein. "Means of Control" each of these: holding 50% or more of the par value of the issued share capital; the right to appoint at least one-half of the directors or CEO; a right to vote at the Company's general meeting or in a parallel body of another corporation Consignment sales, so long as the ownership over the merchandise is not transferred from the Insured to the Client, including but not limited to a transfer of ownership by payment of the consideration to the Insured by the Client Sale of merchandise or rendering a service under the agreement whereby one or more of the following details are not specified therein: quantity of merchandise / services being sold; the nature of the merchandise/services; payment terms and dates; payment currency; destination country (for the sale of merchandise or rendering services for export only); the country from which payment will be made The sale of merchandise or rendering services whereby the Insureds extend credit to the Client for a total period exceeding 365 days Debts relating to the sale of merchandise or rendering a service that manifested prior to the policy taking effect Deposits that were not paid and should have been paid by the Client to the Insured prior to shipping the merchandise or rendering the service, subjectmatter of the protected loss or payment in arrears of the Client's debts that are not included in the debt as described in Clause 5 above, prior to the commencement of the insurance period Events of non-payment of debts by the Client caused as a result of the Client's breach of the importing country's laws, associated with the import of merchandise or the services or transferring the Client's debt to the Insured A loss deriving from risks that are generally insured by commercial Insurers or on the date the merchandise was shipped or the service rendered could have, in the Company's opinion, been insured as stated and/or a loss deriving from risks which caused physical damage to the merchandise during transportation by sea or air. Physical damage in this respect including but not limited to seizing the merchandise, confiscating 6

7 the merchandise and/or any prevention of the possibility of receiving possession thereof during transportation by sea or air Debt, loss or damage caused directly or indirectly and/or deriving directly or indirectly and/or manifested in their entirety or partially as a result of: A war between any of the following countries (whether before or after the war broke out): USA, France, Britain and Northern Ireland, China and the Russian Federation; Radiation emanating from radioactive substances or radioactive pollution from any nuclear petroleum, or burning of nuclear petroleum; The radioactive characteristics, toxins, explosives or other dangerous or polluting characteristics of any nuclear facility, nuclear reactor or other nuclear complex or any of their nuclear elements; Means of war exploiting atomic or nuclear cracking or merger or similar reaction or force or radioactive substance. Duty to Offer Insurance Coverage: 23. Duty to Offer Insurance Coverage the Insured undertakes to offer to insure the Company under the policy all exported merchandise and service/s and/or all sales of merchandise and service/s rendered in the Client' local market, pursuant to the matter at hand, within the Insured's business dealings set forth in the schedule page during the course of the insurance period. Without prejudicing the terms of the policy and its exceptions the foregoing in this clause constitutes a condition precedent to indemnifying the Insured under this policy by the Company. 24. Selling merchandise or rendering services in the local market or export which the Insured is not obligated to offer insurance coverage for them: 24.1 Sales for which the full consideration is paid in cash no later than the date of the sale of the merchandise or service rendered Sale of merchandise or service rendered against documentary credit or an irrevocable guarantee by a bank in the Level A or B rated countries set forth in Appendix A or in Israel, or merchandise that is sold or service rendered whereby the factoring company in one of the Level A or B countries set forth in Appendix A or in Israel guarantees receipt of the consideration for them or purchased without reservations or the debt terms deriving from them Other sales set forth in the schedule page or any other document between the Company and the Insured. Credit Cap: 25. Credit Cap whereupon the Company agreed to cover the sale of merchandise or service rendered to a specific Client the Company will approve with respect to that Client a credit cap and until it is approved the coverage under this policy will not take effect. A credit cap for the purpose of this policy means: 7

8 25.1 The maximum outstanding debt in US dollars and/or other foreign currency that is covered under this policy The payment terms for the merchandise /service, collateral and securities which the Insured is to receive to guarantee payment of the consideration, as well as any other terms which the Company determines with respect to that Client. 26. Application to determine a credit cap the amount of the credit cap for each Client will be determined by the Company in accordance with its discretion, pursuant to an application that is submitted to it by the Insured. The credit cap will be subject to the terms set forth in Clause 25.2 above. The application will be submitted by the Insured on a form to be furnished to it by the Company for this purpose and will be completed by the Insured. The Company will charge the Insured, from time to time, the expenses associated with determining the credit cap, at the rate determined in the schedule page. 27. Preference granted to the credit cap terms in the event of a contradiction between the provisions and/or terms determined by the Company in the credit cap and the policy provisions, preference will be given to the provisions/terms in the credit cap and these will apply to the Insured with respect to the protected loss. 28. Deviating from the Credit Cap: 28.1 The Company's liability under this policy will under no circumstances exceed the amount determined in the credit cap less the amounts set forth in the policy and deriving from the policy In the event of a deviation from the amount determined in the credit cap in accordance with Clause 25.1 above, whereby the Insured did not report this to the Company and/or did not pay the premiums for the surplus amounts and/or for the deviation from the terms to be determined by the Company in Clause 25.2 above, the Company will be released of any liability under this policy. 29. The date upon which the credit cap takes effect the date the credit cap approval or changes thereto takes effect will be the date denoted on the credit cap approval and subject to the fact that from the date the application to determine a credit cap and until the approval is granted there was no payments in arrears of any of the Client's debt to the Insured, subject to the provisions in the schedule page in this respect, and no extension of the payment date was given for payment of any of the Client's debt to the Insured. Stipulations with respect to the insurance coverage: 30. The Company may notify the Insured in writing that the validity of the policy with respect to the sale of merchandise and rendering services pursuant to an agreement between the Insured and Client will be subject to special terms. Likewise the Company may change, stipulate terms of cancel the credit cap including but not limited to the list of countries denoted in Appendix A of this policy and the deductible rates in relation thereto. The Company will send the Insured notice in advance and in writing of any such stipulation and/or change and these will take effect on the date stipulated in the notice and will apply with respect 8

9 to the sale of merchandise and services rendered, whether for export or the local market, that are executed commencing from this date. If the Company chooses to exercise this right, the Insured will furnish the Company, at its demand, any information and other details required of it with respect to this matter including but not limited to an immediate notice in writing specifying the credit not yet paid by the Client with respect to which the change will apply. Furnishing Statements: 31. The Insured will furnish the Company, on the date set forth in the schedule page, a sales statement on a form to be furnished by the Company and which will be given for all of the Insured's Clients, including Clients with respect to which a credit cap has yet to be determined and even if the sale of merchandise or service/s rendered exceed the credit cap that was given. Non-furnishing of a complete sales statement will be considered a material breach of the policy and this without derogating from the Company's rights under the policy or prescribed by law. For the sake of removing any doubt it is clarified that payment of the premium for the sale of merchandise or service rendered that the Company has not yet approved and/or refused to approve a credit cap with respect thereto does not constitute consent by the Company to insure those sales of merchandise or service/s rendered. In the event that it is decided not to grant insurance coverage the Insured will be reimbursed the premium paid by the Insured as above. Extending the Payment Date: 32. The Insured is entitled to extend the original payment date if he is requested to do so by the Client before the original payment date has elapsed and provided that there has been no material change with respect to the Client's ability to pay the Insured in accordance with the policy and that the extension is once-off to the Client for the insurance period and it does not exceed the maximum extension period determined in the schedule page. The foregoing will not apply if the Insured received the Company's approval in advance and in writing to grant the Client a deferment for a longer period of time. It is stipulated that under no circumstances will the accumulative payment period after such an extension exceed the period denoted in exception 22. above. Without prejudicing the terms of the policy and exceptions therein extending the payment date by the Insured other than pursuant to the provisions of this clause above will release the Company of its duty of indemnification with respect to that Client in accordance with the provisions of the policy. 33. The Insured will not extend the credit period for a Client after the original payment date has elapsed and/or he knows that the Client is experiencing financial difficulties. 9

10 34. The payment date with respect to the Client's debts to the Insured, beginning with the period that is declared as the debt remission period or with respect to which a general extension was given by law or order, will be considered for the purpose of the policy as if it began 30 days after the end of the debt remission period or such a general extension. Notices to the Company: 35. The Insured will deliver written notification to the Company of a Client's debt to the Insured that was not paid on the payment date no later than the date set forth in the schedule page. 36. In the event that the Insured becomes aware that the Client is experiencing financial difficulties or is unable to pay its debts and any other event that the Insured becomes aware of that may lead it to sustain a loss he must deliver an immediate notice thereof to the Company, in writing, including with respect to the following instances: 36.1 Any request by the Client to change the terms of the agreement between the Insured and Client that was received by the Insured after the sale of the merchandise or service rendered, any knowledge of an anticipated breach of the agreement by the Client, a breach or deviation from the performance of the agreement during the regular course of business Checks that were withdrawn by the Client were presented for payment and bounced for whatever reason and this within three business days from the day the checks bounced as noted above. The occurrence of an insurance event and insurance proceeds: 37. The Company will pay the Insured insurance proceeds, subject to payment of the premiums and the terms of the policy, after the occurrence of an insurance event and all the documents and facts required to clarify its liability were furnished to the Company. For the purpose of the policy the date of the occurrence of an insurance event is: 37.1 Whereupon the reason for the loss is Insolvency, up to three days after the payment date of each individual invoice In the event of a continuous inability to pay after the passing of 120 days from the due date with respect to a Client from one of the rated countries in Level A or B in Appendix A and after the passing of 180 days with respect to a Client in one of the countries rated as Level C or D in Appendix A or with respect to the sale of merchandise or service rendered to a Client in the local market. 38. Payment of Premiums The Insured undertakes to pay the premiums as noted in the collection notice to be sent to it by the Company on the basis of the Insured's statements as stipulated in Clause 31 above and pursuant to the provisions of the schedule page. 39. Calculating the Insurance Proceeds 39.1 Calculating the insurance proceedings owing to an Insured with respect to an insurance event concerning the sale of merchandise or service rendered for 10

11 export will be made based on the currency of the sale of merchandise or the service rendered (hereinafter: "The Sale's Currency") or in NIS pursuant to the exchange rate of the foregoing currency on the date of payment of the insurance proceeds (hereinafter: "The Payment Day"). Calculating the insurance proceeds owing to an Insured with respect to an insurance event that concerns the sale of merchandise or rendering services in the local market will be made in NIS and will accrue index linked differentials as defined below, starting from the index known on the said payment date of the debt and until the index known on the payment day of the insurance proceeds. "Index" The Consumer Prices Index published by the Central Statistics Bureau or short of such a publication, then the index published by another official entity replacing it. It is hereby clarified that for the purpose of calculating the protected loss the Client's debt amount owed to the Insured for the sale of merchandise or service rendered, whether on the local market or for export, will be converted after deducting the amounts set forth in Clauses 5 and 42.4 of the policy into US Dollars based on the representative rate on the sale date or the date the service was rendered. Whereupon the amount of the Client's debt after deducting said amounts and after converting it exceeds the credit cap of the amount of the protected loss, subject to the provisions of Clause 39.2 below, maximum the credit cap amount after converting it into the said sales currency pursuant to the representative rate known on the payment day (hereinafter: "The Revised Loss") The insurance proceeds will be calculated as follows: from the extent of the protected loss or the revised loss the accumulative deductible or the balance thereof will be deducted and from the result the deductible will be deducted. General Terms: 40. Taking measures to mitigate the damage the Insured undertakes to take all the necessary and/or desirable measures and/or measures which the Company requires from time to time in order to collect the amount of the loss sustained by it from the Client or from any other person or body from which the amount can be collected, in full or in part, including filing legal claims if the Company is required to do so and to sign any document necessary for this purpose (hereinafter: "The Collection Proceedings"). Whereupon the Company paid insurance proceeds to the Insured, the Insured will assign to the Company the right to collect the monies that were adjudicated in its favor resulting from these claims and this at its demand. The Company will assume the expenses associated with the collection proceedings pertaining to the protected loss. For the sake of removing any doubt the Insured will assume, at its expense, the costs associated with the collection proceedings for the rest of the Client's debt exceeding the protected loss. Notwithstanding the provisions above, the Company will be entitled to conduct its own collection proceedings at any time and even before the insurance event manifests itself 11

12 while giving written notice thereof to the Insured, if an event occurred that may lead to the manifestation of the insurance event, all this at its exclusive consideration. The Company conducting collection proceedings does not constitute recognition by the Company that the Client's debt is a protected loss and that it is liable to indemnify the Insured under the policy. 41. Subrogation right and cooperation by the Insured in any event of payment of insurance proceeds under the policy any of the Insured's rights toward the Client and toward any person or other entity regarding this claim, including but without prejudicing the generality of the foregoing, securities and guarantees of any type that the Insured has from the Client and subject to recording any such right pursuant to the law will be assigned and transferred to the Company if the Company so requires. The Insured undertakes to furnish the Company, at its demand to do so, documents, agreements with Clients, guarantees or securities pertaining to the merchandise or service, subject-matter of the invoice, to transfer and endorse to the Company its rights in all of these and to sign a power of attorney to a person appointed by the Company for the purpose of managing the subrogation claim by the Company and any other document required for the purpose of exercising the Insured's said rights. 42. Collecting funds or indemnification from the Client and from others and attribution of the funds: 42.1 Any amount collected from the Client or other person or entity prior to payment of the insurance proceeds, will be credited and first paid toward payment of the Company's expenses for collecting the Client's debt exceeding the amount of the protected loss and the surplus, if such surplus remains, will be credited and paid to the Insured on account of the balance of the Client's debt exceeding the protected loss and the surplus, if such surplus remains, will be paid to the Insured on account of the protected loss. For the purpose of attributing the collection funds referenced in this clause, debts with respect to which the Client alleged are commercially disputed as denoted in exception 22.1 above will not be taken into account Any amount collected from the Client or any other person or entity after payment of the insurance proceeds by the Company will be credited and paid first of all to fully reimburse the expenses in addition to interest and linkage differentials prescribed by law, that were sustained by the Company with respect to the insurance event. Any surplus that remains, if such surplus remains, will be divided between the Company and the Insured pursuant to the ratio between the insurance proceeds paid by the Company to the Insured and the total Client's debt to the Insured that has not been paid Any amount that is collected as above from the Client or any other person or entity in a currency other than the selling currency will be converted based on the exchange rate of the currency of the amount collected as above, as opposed to the rate of the selling currency on the day the payment is actually received It is clarified that for the purpose of the policy any amount that is collected by the Insured after the payment date has passed from the Client or a third party for the protected loss will be credited pursuant to the order that the Client's 12

13 debts manifested themselves constituting the protected loss beginning with the earliest debt of that Client without any connection to the manner by which the payment is attributed by the Client or third party The Insured declares and undertakes that any amount collected and which is owing to the Company will be remitted to the Company within 7 days from the day it is received and that until it is remitted the amount will be considered the Company's exclusive property held in escrow on its behalf by the Insured. 43. Assigning Rights the Insured will not assign any of its rights in accordance with this policy unless it obtained the Company's consent to do so in advance and in writing both with respect to the transfer itself and the drafting of the assignment instrument. Any assignment that the Insured executed without the Company's advance and written consent as noted above will be invalid. 44. Means to reduce the risk the Insured will act cautiously as an intelligent and cautious merchant upon granting credit to the Client and handling the collection of funds owing to it from the Client or any third party. 45. Examination of Books The Insured will allow the Company, occasionally, to examine through a representative on its behalf, at its expense, the books or to demand, at its discretion, confirmation from an accountant with respect to the Insured's sale of the merchandise or the services rendered. 46. Negotiations, Settlements and Waivers The Insured must avoid conducting negotiations with the Client or someone on its behalf and/or from executing any waiver and/or from making any offers to settle in connection with a protected loss, unless it first obtains the Company's consent thereto in advance and in writing. The Company has exclusive discretion insofar as arrangements associated with the payment of the protected loss as stated above are concerned. The Company will not be liable for a loss deriving from any debt with respect to which the Insured agreed to an arrangement, waiver or settlement, without the Company's advance and written consent. 47. Insurance proposal and applications for credit caps in accordance with the explicit consents between the Company and the Insured, the Insured's insurance proposal and the applications to determine the credit caps (hereinafter: "The Applications") constitute a material basis to issuing the policy and by accepting the policy the Insured confirms that to the best of its knowledge and belief, the details that it gave in the insurance proposal and the applications were correct and accurate as of the date they were furnished and correct as of the date the Company consented to issuing the policy to the Insured or the day the credit cap was determined, pursuant to the matter at hand. the foregoing will be correct and will apply to the Insured also with respect to applications to determine credit caps for its Clients after the policy is issued. 48. Payment of Premiums premiums and the rest of the amounts owing from the Insured to the Company will be paid by the Insured as set forth in the Company's written demand to the Insured. 13

14 Whereupon a given amount is not paid by the Insured to the Company on its due date, the said amount will accrue index linked differentials in accordance with the fluctuation of the index known on the date that the said amount should have been paid and until the index known on the date of actual payment, as well as interest pursuant to the rate acceptable by the Company at that time. The provisions of this clause do not derogate from the Company's right to cancel the policy due to non-payment of premiums in accordance with the provisions of the law. Whereupon the Insured did not pay another amount in addition to the aforesaid, that it owes the Company in accordance with the policy terms, this amount will accrue index linked differentials and interest as noted above, accordingly. The provisions in this clause will apply to all instances wherein the policy does not explicitly state to the contrary. 49. Insured has no right to offset The Insured is not entitled to offset from the premiums that it owes and/or it must pay the company any amount with respect to any right available to it against the Company. 50. Fraudulent claim for insurance proceeds If the Insured files a claim with the Company knowing that it has an element of fraud, the Company's liability under this policy will expire forthwith. In such a case the Insured will reimburse the Company, at its demand, any amount that the Company paid the Insured in relation to this claim. The Company will be entitled to withhold all the payments its received as premiums and/or that it is to pay the Insured as insurance proceeds, as liquidated damages for its damages and/or to offset these amounts against the Insured's debts toward the Company and this without derogating from any remedy the Company is entitled to by law. This clause will also serve as the Company's offsetting notice to the Insured pursuant to the law. 51. Notices any notice sent by the Company to the Insured or by the Insured to the Company will be deemed as if received 72 hours after it is mailed unless it is proven that the notice was received prior to then. Notices and/or letters that are sent by facsimile or electronic mail will be deemed as if executed in writing and received by the other party one day after it was sent provided that the sending party has confirmation that it was sent to the recipient denoting the date it was sent. A notice by the company to the Insured will be sent to the Insured's address last known to the Company. A notice by the Insured to the company will be in writing and sent to the address recorded in the schedule page. 52. Renewing, Amending and Canceling the Insurance Policy at the end of the insurance period stipulated in the schedule page, the policy will be renewed automatically for an additional insurance period pursuant to the same terms unless one 14

15 of the parties furnishes the other party, 30 days prior to the renewal date, written notice pertaining to its desire not to renew the policy or amendment its terms upon renewal. Each party is entitled to cancel the policy at any time by giving written notice thereof to the other party 30 days in advance and which will take effect on the date stipulated in the notice. Any debt of a Client toward the Insured that is created after the notice date will not be covered by the policy. 53. Fulfillment of the terms Non-fulfillment of a term or undertaking by the Insured will not be considered as a waiver or agreement by the Company with respect to such nonfulfillment unless the Company explicitly approved this in writing. Fulfillment and stringent adherence to each of the terms included in the policy and the insurance proposal constitute a condition precedent to the Company's liability under this policy. 54. Date upon which the amendments take effect any instance that the Company exercises its right to notify the Insured of an amendment / cancellation/stipulation and/or application, the change will take effect on the date stipulated in the notice which will be after the date of the notice. 55. Captions the captions in this policy serve as an aid to referencing only and will not be used for the purpose of interpretation. 56. The provisions of the Insurance Contract Law, will apply to this policy, however wherever a provision in this policy stipulates upon the law and such a stipulation is permitted, then it shall apply. 57. Judicial Jurisdiction / Substantive Law the competent court in Israel will have the exclusive jurisdiction to entertain any disputes deriving from the policy and only the law in Israel will apply to this policy. 15