General Conditions of Fidelity Insurance (GCI–Fidelity Insurance 2006) §1 Object of insurance § 2 Scope of insurance cover §2 Scope of insurance cover 1. With respect to acts as defined by § 1 GCI, Euler Hermes shall provide insurance cover for all loss caused during §3 Area of applicability the duration of the cover, which §4 Commencement of insurance cover a) is inflicted directly by insured persons (§ 8 GCI) on the Insured §5 Termination of insurance cover b) is sustained by the Insured as a result of the fact §6 Insured event that he is liable for damage directly inflicted by insured persons upon third parties §7 Preconditions for indemnification c) is sustained by the Insured as a result of the fact §8 Insured persons that insured persons wilfully and without authorization disclose confidential information, §9 Jointly insured companies processes, substances or any other operating secrets to unauthorized third parties. § 10 Sum insured Notwithstanding § 14 No. 3 GCI, lost profit shall be covered. § 11 Retention d) is sustained by the Insured as a result of direct and § 12 Obligations of the Insured unlawful interference with the Insured’s electronic data processing by outside parties, provided that § 13 Negligence the outside party enriches itself in respect of the Insured’s assets if such loss is caused during the § 14 Loss not qualifying for indemnification policy period. § 15 Payment of premium In addition, the following specific direct pecuniary loss caused wilfully by external third parties shall § 16 Indemnification payment, contract currency, be covered regardless of whether such third party assignment had any intention to enrich himself: recovery costs, cost of replacing the damaged software, data and § 17 Provisional indemnification files as well as any additional costs if the Insured is unable to recover damages elsewhere. § 18 Subrogation e) is sustained by the Insured during the term of the § 19 Termination of the insurance policy after the policy as a result of deception on the part of third occurrence of an insured event parties through any form of fraud, counterfeiting of documents or withholding of documents for the § 20 Term of the insurance policy purpose of unlawfully enriching themselves or any other party. This shall also apply if the loss takes § 21 Limitation of action, limitation period the form of an obligation on the part of the Insured to provide another third party with compensation. § 22 Miscellaneous provisions 2. Euler Hermes shall additionally indemnify the Insured – up to the agreed sum insured – for any external costs in connection with identifying the loss sustained and legal costs which can be proved to have arisen up to 20% of the direct insured loss as well as any additional internal § 1 Object of insurance costs in connection with identifying the loss sustained and internal legal costs up to 2% of the direct insured Euler Hermes Kreditversicherungs-AG (hereinafter referred to loss. as Euler Hermes) undertakes to indemnify the Insured for financial loss which he sustains directly as a result of wilful Any costs beyond this shall also be indemnified provided and unlawful acts for which compensation is payable under that the Insured first consults with Euler Hermes on the statutory provisions. activities giving rise to such costs. § 3 Area of applicability – the Insured has equipped his IT systems with protection/firewall facilities to avert the risk of Insurance cover shall apply on a world-wide basis unauthorized intrusion as well as antivirus software meeting the latest technological requirements and § 4 Commencement of insurance cover kept regularly updated; – unauthorized intrusion is detected and recorded by 1. Insurance cover shall commence on the date stated in the IT systems; the insurance policy. – individual passwords are assigned for different authorization levels and replaced once a month; 2. Losses caused prior to the commencement of the – data and the latest version of the programs used insurance policy but not yet known to the Insured on the are backed up/duplicated once a day and copies of date on which the insurance policy was taken out may be such backups stored separately and securely. co-insured subject to special written agreement (retrospective cover). 4. In the case of losses caused by insured persons as defined in § 8 No. 2 GCI, the Insured must additionally 3. Any persons who are employed for the first time during prove that such losses were wilfully caused to the the term of the policy shall be automatically included in detriment of the Insured and with the intention of the insurance policy upon taking up their work for the obtaining an illegal pecuniary advantage. The intention Insured in accordance with their contracts of employment; to obtain higher remuneration (salary, wage, bonus, no premium shall be payable in respect of the current benefit, share of profits etc.) shall not be sufficient for policy year. this purpose. The indemnification shall be reduced by a percentage equalling the share held by the insured § 5 Termination of insurance cover persons in the company’s capital as of the date on which the loss was caused. 1. With respect to insured persons who have previously caused an insured loss, insurance cover of any future 5. In the case of losses coming within the definition acts shall expire upon the date on which the Insured contained in § 2 No. 1 c) GCI, indemnification shall be becomes aware of the unlawful acts. contingent upon the amount of and reasons for the claim to compensation held by the Insured against the insured 2. With respect to insured persons leaving the Insured’s person in question being documented in an services, insurance cover shall expire 12 months after acknowledgement of debt certified by a notary public and they terminate their duties for the Insured - and at the subject to compulsory execution or a legally binding latest upon the expiry of the insurance cover - and with enforceable title against such insured person. § 7 No. 2 respect to jointly insured companies, insurance cover GCI shall not apply. shall expire on the day on which the Insured ceases to be the majority shareholder. § 8 Insured persons § 6 Insured event Insured persons shall be those persons who at the time at which the loss is caused are employed under employment or The insured event shall be deemed to have occurred if and service contracts as when an insured person or any third person covered by this insurance policy commits a wilful unlawful act as defined by § 1. employees, temporary employees, interns, apprentices 1 GCI. and trainees, § 7 Preconditions for indemnification 2. members of the management board, managing directors, members of the supervisory or administrative board 1. Indemnification shall be paid only after the Insured has provided that they do not hold a share of more than 20% proved the liability of the perpetrator for the loss specified in the company’s capital, and identified such person by name as well as the amount of such liability. 3. temporary employees, 2. If the Insured is unable to identify the perpetrator in spite 4. persons who work on the premises of the Insured in an of investigations, indemnification shall nevertheless be employee-like position upon the request of the Insured or paid if it is evident from the documents furnished by the a company commissioned by the Insured. Insured that on the basis of the course of events the loss incurred can be reasonably assumed to come under the 5. Persons who work on the premises of the Insured upon definition contained in §§ 1 and 2 GCI. the request of the Insured or a company commissioned by the Insured for the purpose of installing, maintaining or A comparison of the target inventory and the actual stock managing IT equipment (hardware) or developing, without any explanation of the reasons for any maintaining or managing IT programs (software) (IT discrepancies or statistic data shall not be sufficient to service staff) including on a remote basis via data prove wilful conduct. transmission. Prior to settling a claim, Euler Hermes may at its own The insured persons as defined in § 8 Nos. 3 – 5 GCI shall expense conduct further examinations or retain the only be deemed to be insured persons for the duration of services of a surveyor to obtain further information. their contractual activities for the Insured. Euler Hermes shall be liable for any loss caused by such persons only in so far 3. With respect to losses coming within the definition as the Insured is unable to obtain compensation from any contained in § 2 No. 1 d) Paragraph 2 GCI, it is assumed other source. that § 9 Jointly insured companies § 12 Obligations of the Insured 1. All companies in which the Insured holds more than 50% 1. The Insured undertakes to inform Euler Hermes in writing of the voting capital either directly or indirectly shall be of any event which after becoming known could prove to jointly insured. The provisions applicable to the Insured be an insured event and of every insured event shall apply to the jointly insured companies accordingly. immediately after becoming aware of such event even if he is not in a position to enter a claim or does not wish to 2. All correspondence and payments shall as a matter of do so. principle be between Euler Hermes and the Insured. 2. Prior to the beginning of each policy year, the Insured 3. Any companies coming within the definition in § 9 No. 1 shall report to Euler Hermes the total number insured GCI added during the term of this policy shall be persons employed at that time and the names and automatically deemed to be covered as of the date on addresses of the jointly insured companies so that the which they are acquired or established, it being agreed next annual premium can be calculated. that no additional premiums shall be payable for the current policy year, provided that they are reported to 3. If the Insured or any of the jointly insured companies Euler Hermes in accordance with § 12 No. 2 GCI prior to violates any of the statutory or contractual obligations the commencement of the next policy year. However, in which have been acknowledged, the other Insureds shall such cases the insurance shall not cover any loss caused accept the consequences likewise. This shall also apply if prior to the inclusion in this cover. the knowledge of an Insured is of importance. § 10 Sum insured In the event of the Insured failing to comply with any of his statutory or contractual duties, Euler Hermes shall be 1. The sum insured shall be available for released from its liability to indemnify in accordance with Section 6 of the Insurance Contract Law. Notice of a) all insured events discovered by the Insured in the termination pursuant to Section 6 (1) of the Insurance course of a policy year, Contract Law shall not be required if the insurance cover in respect of the insured person in question has already expired b) all insured events caused during the entire policy pursuant to § 5 No. 1 GCI. period by one person alone or jointly with other persons and § 13 Negligence c) all acts resulting in a loss which are committed by The payment of indemnification shall not be conditional upon one or several persons if those acts are recourse being taken under civil law against insured persons concurrently committed and/or are economically or contributing to the loss through negligence only. In respect of legally linked with each other, less the agreed such persons Euler Hermes waives its right to take recourse. retention. However, this shall not prejudice any objections under § 61 of the Insurance Contract Law. 2. If the sum insured is increased, the difference shall be available only for any loss/partial loss caused for the first § 14 Loss not qualifying for indemnification time after the date of such increase. The following kinds of damages shall not qualify for 3. Any loss discovered after expiry of the insurance policy indemnification: shall be counted towards the indemnification for the last policy year and paid until that amount is used up. 1. loss caused by insured persons whom the Insured knew had previously committed wilful unlawful acts coming 4. The indemnification payable for all losses discovered in a within the definition contained in § 1 GCI at the policy year and coming within the definition contained in § commencement of the insurance and/or prior to seeking 2 No. 1 c) and § 2 No. 1 d) Paragraph 2 as well as § 2 No. their inclusion in the policy; 1 e) GCI shall be limited to 20 % of the agreed sum insured or a maximum of EUR 1,000,000.00. 2. loss which was caused during the term of the policy but which is reported to Euler Hermes more than two years § 11 Retention after the date on which the policy expires. § 12 No. 1 GCI shall not apply; 1. The Insured shall bear the retention per claim stated in the insurance policy. 3. indirect loss sustained by the Insured or, in the case of § 2 No. 1 b) GCI, the aggrieved third party (e.g. lost profit, 2. If it is not possible for the perpetrator to be identified by interest, contractual penalties, administrative fines, name and if no retention or a retention of less than EUR ransoms, extortion money or damages, loss in 5,000.00 has been agreed upon pursuant to § 11 No. 1 connection with discrimination and disruptions to GCI, the indemnification shall be reduced by 10% of the operations, customs, levies and fees); insured loss, however by no less than EUR 5,000.00 and by no more than 10% of the sum insured. If a retention of 4. loss caused by personally-liable shareholders or more than EUR 5,000.00 has been agreed upon pursuant shareholders holding more than 20% of the company’s to § 11 No. 1 GCI, indemnification shall be reduced by no capital; less than the sum agreed. 5. loss sustained by external third parties as defined in § 2 3. In the case of losses coming within the definition No. 1 e) GCI contained in § 2 No. 1 c) and § 2 No. 1 d) Paragraph 2 as well as § 2 No. 1 e) GCI, the indemnification shall be a) loss jointly caused by insured persons as defined in reduced by a retention pursuant to § 11 No. 1 GCI – § 8 GCI as a result of gross negligence and/or however by no less than EUR 25,000.00. b) loss arising in connection with the – justified or rate fixed on the day on which the last loss notification is unjustified – grant, treatment or handling of loans received, the latter shall be applicable. and trade terms including discounting or the acceptance of bills of exchange and cheques In the case of non-quoted currencies, the exchange rate fixed by regardless of the facts involved as well as loss from Deutsche Bundesbank or, alternatively, the European Central the acceptance of a guarantee or bond and the – Bank on the date in question shall apply. justified or unjustified – postponement, waiver or release of a receivable or loss arising from the fact 3. Rights under the insurance policy may be assigned only that the Insured is deceived in connection with the with Euler Hermes’ written consent. The defences to acquisition of domestic or foreign companies as which Euler Hermes is entitled as well as the right of set- well as real estate, precious stones or in off shall continue to apply to the assignee. connection with bills of lading/waybills; 4. Otherwise, Section 11 of the Insurance Contract Law shall 6. loss for which cover can be obtained pursuant to the apply. general terms and conditions of fire or burglary and housebreaking insurance, § 17 Provisional indemnification 7. loss caused wholly or partly by war, war-like events, Euler Hermes shall pay provisional indemnification if domestic unrest, terror, government acts, force majeure, proceedings are commenced before a court of civil or labour nuclear energy or environmental influences as defined by law or a public prosecution department brings an indictment the Environmental Liability Act or the Water Resources and the underlying facts indicate the existence of a loss as Act. defined in §§ 1, 2 GCI. The preliminary indemnification shall equal a maximum of 50% of the principal amount sought to § 15 Payment of premium be recovered in the proceedings or the value of the loss cited in the indictment, provided that this is no greater than EUR 1. The Insured shall pay the first premium upon the delivery 50,000.00. of the policy; ensuing premiums shall be payable at the beginning of each policy year or on the due date of The provisional indemnification shall be subject to repayment. payment agreed upon. The provisional status shall be discharged if the final judgement brought down in the proceedings concerned 2. If the first premium is not paid in time, the consequences confirms the existence of a loss as defined in §§ 1, 2 GCI. shall be as described in Section 38 of the Insurance This shall not prejudice any objections or exclusions provided Contract Law; otherwise, Section 39 of the Insurance for in the policy, the GCI or the Insurance Contract Law. Contract Law shall apply. § 18 Subrogation 3. If the insurance is terminated prior to the expiry of the policy period or if it is cancelled retroactively after its 1. The payment of indemnification shall not release the commencement or if it is void right from the beginning, perpetrator of the loss of his duty to pay compensation. Euler Hermes shall be entitled to claim premium or fees pursuant to the Insurance Contract Law (e.g. Section 40 2. Entitlement to compensation held by the Insured against of the Insurance Contract Law). the insured person or a third party on account of an insured event shall pass to Euler Hermes pursuant to 4. The Insured shall not be entitled to net any premiums due Section 67 of the Insurance Contract Law to the extent to Euler Hermes with claims to indemnification under the that Euler Hermes indemnifies the Insured for such loss. policy or exercise any right of retention unless such At Euler Hermes’ request, the Insured shall confirm such claims to indemnification have been acknowledged by subrogation in writing. In the event that the pertinent Euler Hermes or have been upheld in a court of law. rights and any rights granted to secure entitlement to damages are not subrogated by operation of law, the § 16 Indemnification payment, contract currency, Insured shall transfer them to Euler Hermes. assignment 3. The Insured’s claim for damages to which he is entitled 1. Euler Hermes shall pay the indemnification as soon as its because of the retention which he is required to bear is liability to indemnify and the amount of the herewith ceded to Euler Hermes in the event that Euler indemnification have been established. Hermes takes recourse action. Any amounts recovered by Euler Hermes from recourse proceedings shall be If the Insurer’s liability to indemnify has been established apportioned according to the ratio between the only in respect of partial amounts of a loss the indemnification paid and the Insured’s retention less circumstances of which have not yet been fully clarified, execution or court costs. payment shall be effected for such partial amounts. § 19 Termination of the insurance policy after the 2. The contract currency shall be the euro (EUR). If a loss is occurrence of an insured event sustained in a different currency, the indemnification shall be converted using the reference exchange rate 1. After a claim has been entered both Euler Hermes and prevailing on the date on which the insured event occurs. the Insured shall be entitled to terminate the insurance However, if this exchange rate is higher than that fixed on policy. the day on which the written loss notification is received by Euler Hermes, the latter shall be applicable. In the 2. Notice of termination must be given in writing. It must be received case of sequential loss the exchange rate fixed on the no later than one month after the conclusion of the negotiations with date on which the last wilful act was committed shall be respect to Euler Hermes’ obligation to indemnify. applicable. However, if this is higher than the exchange 3. The Underwriter shall give one month’s notice of termination. The Insured may state whether the notice of termination given by him shall take effect immediately or at a later date, however, the latest possible date shall be the end of the current policy year. 4. If after the occurrence of an insured event notice of termination is given – by the Insured, Euler Hermes shall be entitled to receive the premium for the current policy year; – by Euler Hermes, the same shall apply with respect to the part of the premium which counts towards the amount of the sum insured equalling the loss; of the premium covering the balance of the sum insured, the Insurer shall only be entitled to retain the part covering the current policy period. § 20 Term of the insurance policy The policy shall be extended by one year at a time from year to year, unless notice of termination is given in writing either by the Insured or Euler Hermes three months prior to its date of expiry. § 21 Limitation of action, limitation period Limitation of action in respect of a claim under the policy and the period for the institution of proceedings which has to be observed shall be governed by Section 12 of the Insurance Contract Law. § 22 Miscellaneous provisions 1. All declarations relating to the contractual relationship required to be given by or to Euler Hermes shall be binding only if served in writing on or by Euler Hermes. Euler Hermes shall be deemed to have met the requirements in respect of written form even with documents which are drawn up by computer and are valid as such without signature. 2. The place of jurisdiction in respect of any disputes arising under the insurance policy shall be Hamburg if the Insured has been entered in the commercial register as a merchant or if he does not have any general place of jurisdiction in Germany or if he moves his registered office abroad after taking out insurance or if his registered office or normal place of residence is not known at the time when a case is filed against him. In all other cases the regulations of Sections 17, 21 and 29 of the Code of Civil Procedure and Section 48 of the Insurance Contract Law in respect of domestic places of jurisdiction shall apply. 3. Unless otherwise stipulated in the Conditions of Insurance and the Additional Conditions or in a special agreement, German law shall apply.