Invoice Finance. General Conditions

Transcription

1 Invoice Finance General Conditions 1

2 Contents CONDITIONS APPLICABLE TO ALL FACILITIES Period of the Agreement Sale and purchase of Debts Trusts Schedules Approval and disapproval of Debts Payment of the Purchase Price (excluding BDP Debts) Fees and charges Records and information E Accounts Collection of Debts Warranties Undertakings Restrictions Recourse Termination Variation Communications with other persons Broker's commission Service of notices Novation and assignment of the Agreement Power of attorney Indemnity Limitation of liability VAT Governing law Miscellaneous CONDITIONS APPLICABLE TO FACTORING FACILITIES CONDITIONS APPLICABLE TO COMBINED INVOICE FINANCE FACILITIES

3 CONDITIONS APPLICABLE TO DISCLOSED INVOICE DISCOUNTING FACILITIES CONDITIONS APPLICABLE TO CONFIDENTIAL INVOICE DISCOUNTING AND CONFIDENTIAL INVOICE FINANCE FACILITIES CONDITIONS APPLICABLE TO BAD DEBT PROTECTION E-SHADOW CONDITIONS CONDITIONS APPLICABLE TO PAY AND BILL FINANCE CONDITIONS APPLICABLE TO CONSTRUCTION FINANCE CONDITIONS APPLICABLE TO CONTRACT FINANCE CONDITIONS APPLICABLE TO PARTNERSHIPS AND SOLE TRADERS CONDITIONS APPLICABLE TO SCOTTISH DEBTS SCHEDULE OF APPROVED COUNTRIES SCHEUDLE OF PERSONAL DATA PROCESSING OBLIGATIONS FEES FOR ADDITIONAL SERVICES AND STANDARD CHARGES STANDARD CHARGES DEFINITIONS

4 General Conditions of Invoice Finance (Version 1/2018) These Conditions form part of the Agreement made between you and us. Your IF Agreement will state which Conditions are applicable to your facility. The meanings of certain words are explained in the Definitions. CONDITIONS APPLICABLE TO ALL FACILITIES 1. Period of the Agreement The Agreement will begin on the Commencement Date and continue for the Minimum Period. Either of you or us may terminate the Agreement on or after the expiry of the Minimum Period by serving written notice of not less than the Notice Period. 2. Sale and purchase of Debts 2.1 The Agreement applies to all Debts due by Customers domiciled in an Approved Country except Excluded Debts. 2.2 You will assign to us with full title guarantee all Debts Outstanding on the Commencement Date and all Debts coming into existence at any time after the Commencement Date until the Agreement has been terminated. 2.3 Title to all Debts Outstanding on the Commencement Date will transfer to us on that date. Title to all Debts coming into existence after the Commencement Date will transfer to us automatically upon each Debt coming into existence. 2.4 If requested by us, you will execute and deliver to us a formal written assignment of any Debt or Associated Rights. 2.5 We are not obliged to reassign any Debt to you. 3. Trusts 3.1 You will hold on trust for us any Debt and Associated Rights assigned to us to which ownership is not effectively transferred to us. 3.2 You will tell us immediately if any Goods are returned to you, refused by a Customer or repossessed by you. You will hold these Goods on trust for us, separate from your own property, until they are resold or we receive payment of the relevant Debt. We may sell the Goods or require you to sell them for the price and on the terms we tell you. 3.3 If you receive a Remittance, you will keep the Remittance separate from your own money and hold it on trust for us. You will immediately deliver the Remittance to us or pay it into the relevant Remittance Account. 4. Schedules 4.1 This Condition 4 (Schedules) will apply to the Agreement unless the IF Agreement specifies that the e-shadow Conditions are applicable to your facility. 4.2 On the Commencement Date, you will deliver to us using E3 a Schedule containing details of all Outstanding Debts. Thereafter, you will deliver a Schedule to us for each Debt immediately and in any event within 7 days after its creation. 4

5 4.3 We will credit the Invoice Value of each Debt Notified to us to the Sales Ledger Account upon receipt of a Schedule. Any Dilutions that reduce the Invoice Value and Remittances will be debited to the Sales Ledger Account. 4.4 Non-notifiable Debts must not be Notified to us unless we tell you. 4.5 Each Schedule must be Notified by a person authorised by you to complete and submit Schedules to us. 4.6 Any Debt that does not comply with the warranties and undertakings given by you in the Agreement must be Notified to us separately stating why it does not comply. 4.7 If a Customer becomes entitled to a Dilution in respect of any Debt purchased by us, you will immediately enter details on your accounting system and Notify to us a credit note for the relevant amount. If we tell you, you must not send any credit note directly to a Customer. We may send the credit note to the Customer or withhold it. 4.8 Debts denominated in different currencies must be Notified on separate Schedules. 5. Approval and disapproval of Debts 5.1 For a Debt to be eligible for a Prepayment, a Customer Funding Limit must have been established in relation to the Customer. 5.2 We may establish a Customer Funding Limit for any Customer for whom you have not applied for a Customer Funding Limit of an amount we will determine in our discretion. 5.3 Debts within a Customer Funding Limit will be Approved Debts. Until a Customer Funding Limit has been established for a Customer, Debts due by that Customer will be Disapproved Debts. 5.4 We may establish, vary or cancel a Customer Funding Limit at any time with immediate effect. Any variation or cancellation of a Customer Funding Limit may affect your Availability. 5.5 An Approved Debt will be a Disapproved Debt if at any time: the Debt does not comply with any warranty or undertaking given by you; the Debt remains Outstanding after the expiry of the Recourse Period; or legal proceedings are issued to recover it. 5.6 We are not a credit reference agency and you must not tell anyone the amount or absence of a Customer Funding Limit for any Customer. 5.7 We will be entitled to appropriate any Remittance or Dilution due to a Customer against Approved Debts in priority to Disapproved Debts irrespective of any contrary appropriation by you or the Customer. 5.8 We may vary the Concentration Percentage and Export Percentage at any time with immediate effect which may affect your Availability. 6. Payment of the Purchase Price (excluding BDP Debts) 6.1 The Purchase Price of each Debt will be the amount received by us in payment of the Debt after deduction of Dilutions and the Discount Fee. 6.2 We will credit the Purchase Price of each Debt to the Current Account: in the case of an Approved Debt, by a Prepayment of an amount up to the Prepayment Percentage and the balance of the Purchase Price on its Collection Date; and in the case of a Disapproved Debt, on its Collection Date. 5

6 6.3 When requested by you, we will make Prepayments to you. The amount of any Prepayment will be subject to our right to apply Reserves, right of set-off and Availability. 6.4 We may reduce the Prepayment Percentage if your Debt turn is above the Target Debt Turn. 6.5 We may apply Reserves at any time which may affect your Availability. 6.6 All payments will be paid by BACS directly into your account held at a branch of a bank in the UK. If we make payments by an alternative electronic bank payment method, additional charges may be payable. All payments will be debited to the Current Account. 6.7 We will not be obliged to make any payment to you in respect of Remittances that are uncleared, if you are Insolvent or if the payment would exceed your Availability. 6.8 Subject to the payment of the fees specified by us, we may make payments to you in excess of Availability but if Availability is exceeded without our consent, we may require you to pay to us immediately any balance on your Current Account which is in excess of Availability. 6.9 You will not be entitled to interest on any credit balance on the Current Account The Purchase Price of Debts will usually be payable in and calculated by reference to the currency of the Debt, save that we may pay the Purchase Price of any Debt payable in a Foreign Currency in sterling or any other Foreign Currency: 6.11 If we pay the Purchase Price of a Debt in a currency other than that in which the Debt is denominated: we may provisionally calculate the Invoice Value on the date of receipt of the relevant Schedule; and the Purchase Price will be calculated by reference to the relevant Foreign Currency Rate on the date on which the Remittance received from the Customer is credited to our account by our bankers following which we will credit an equivalent amount (after deduction of any bank charges) to the Current Account Any Remittance in a Foreign Currency tendered in payment of a Debt due in sterling will be converted into sterling at the Foreign Currency Rate on the date on which the Remittance received from the Customer is credited to our account by our bankers following which we will credit an equivalent amount (after deduction of any bank charges) to the Current Account For the purpose of calculating your Availability and your Obligations, we may convert any amount in a Foreign Currency to sterling at the relevant Foreign Currency Rate You will indemnify us against any losses incurred by us resulting from exchange rate fluctuations and we will be entitled to debit the Current Account with all bank charges and commission incurred by us in connection with the collection of any Debt in a Foreign Currency. 7. Fees and charges 7.1 You will pay to us: a Service Fee either (i) at the fixed rate or (ii) equal to the percentage of the Invoice Value of each Notified Debt, specified in the IF Agreement. If the Service Fee is fixed, it will be debited to the Current Account on or after the last Business Day of each month. If the Service Fee is a percentage of the Invoice Value, it will be debited to the Current Account following receipt of each Schedule; if the Service Fee is a percentage of the Invoice Value, an amount equal to the difference between the Service Fees payable in any month pursuant to Condition of these Conditions applicable to all facilities and the Minimum Service Fee (or the pro rata amount if the Minimum Service Fee is calculated on a period in excess of a month), which will be debited to the Current Account on or after the last Business Day of each month; 6

7 7.1.3 (if specified in the IF Agreement) an Extended Service Fee for each Debt that remains Outstanding for each month or part of a month after the expiry of the period specified in the IF Agreement, which will be debited to the Current Account on or after the last Business Day of each month; a Facility Fee, which will be debited to the Current Account on or after the Commencement Date; a Facility Renewal Fee, which will be debited on or after each relevant anniversary of the Commencement Date; all Disbursements, which will be debited to the Current Account as they are incurred; any additional charges we agree with you when you ask for any service outside the scope of the Agreement; an Early Termination Payment, pursuant to Condition of these Conditions applicable to all facilities following a Termination Event or in the event the Agreement is terminated in accordance with Condition 16.5 of these Conditions applicable to all facilities; a Discount Fee, which will be debited to the Current Account daily (except Saturdays, Sundays and bank holidays when it will be debited the Business Day before these days); and VAT on all fees and charges (where applicable). 7.2 The Service Fee, if the Service Fee is fixed, and the Minimum Service Fee may be reviewed by us on the Review Date as follows: If the RPI has increased during the 12 months preceding the Review Date, the increased Service Fee and Minimum Service Fee will be determined by multiplying the Service Fee and Minimum Service Fee respectively payable immediately before the Review Date by the same percentage increase in the RPI during the 12 months preceding the Review Date We will give notice of the increased Service Fee and Minimum Service Fee in the month following the Review Date If there is any change to the methods used to compile the RPI, the calculation of the increased Service Fee and Minimum Service Fee will be made taking into account the effect of the change. 7.3 In calculating the Discount Fee, the Discount Fee will accrue: on each Prepayment and on any other amount or Obligation debited to the Current Account, from the date it is debited to the Current Account; and until the relevant Value Date. 8. Records and information 8.1 You will maintain and keep up to date all books and records required by law and all relevant Accounting Records in which you will record the sale of all your Debts to us under the Agreement. 8.2 We, or our authorised agents, may enter your premises at any time to inspect, verify and, at your expense, take copies of or remove any of the Accounting Records or other documents relating to your business, Supply Contracts, Debts, Dilutions or Associated Rights or the computers or computer data on which your Accounting Records are recorded. This licence is irrevocable and will continue after the termination of the Agreement until all your Obligations have been fully discharged. 8.3 As soon as they are available and in any event within six months of the end of each of your financial periods, you will send us a copy of your audited financial statements together with the directors/members' and auditors' reports relating to them and those of any of your Associates. If we request, you will send us management accounts, budgets and forecasts and any other information specified by us. 7

8 8.4 You will provide us promptly with all documents or other information requested by us pursuant to this Condition 8 of these Conditions applicable to all facilities. We may appoint, at your cost, accountants or other professional experts to obtain and verify the information. 9. E3 9.1 If we have agreed to provide you with access to our electronic information service through E3, you have a nontransferable licence to use E3 subject to our right to suspend or withdraw the use of E3 at any time, without notice. 9.2 You will use E3 solely for the purpose of the Agreement and in accordance with any procedures advised by us to you. You will be responsible, at your own cost, for the systems and services used to access E You must keep all usernames and passwords secret and confidential. 9.4 You must ensure that all information sent by you to us using E3 is accurate and correct and sent only by persons authorised by you to use E3. You must tell us immediately if E3 has been accessed by any unauthorised person or any information provided by you to us is inaccurate or incorrect. 9.5 We do not guarantee that E3 will be accessible continuously or that the information accessed by you using E3 is accurate, correct or current as it is continuously updated. 9.6 We may change the form and content of the information accessed by you through E3 at any time, without notice. 9.7 The content and design of E3 (including software) is our property or that of our suppliers and is protected by copyright and other intellectual property rights. 10. Accounts 10.1 We will maintain a Current Account and a Sales Ledger Account for each currency in which we purchase Debts from you. Statements of the Current Account and Sales Ledger Account will be available to you on E3. Each statement will be deemed to be correct save for obvious errors and those of which you advise us within 14 days of the statement date We may at any time combine all your accounts into a single account and set off any of your Obligations against any sum due to you All payments by you to us must be made without deduction or set-off. If you are required by law to make a deduction, you will increase the payment to the amount required to discharge your Obligations as if the deduction had not been made A certificate signed by an authorised signatory of our company as to the balances on the Current Account and Sales Ledger Account or the cause, existence or amount of your Obligations will be conclusive and binding on you except for obvious errors or on any question of law Any discharge of your Obligations will be of no effect if any payment by you to us is subsequently set aside. 11. Collection of Debts 11.1 We have the sole right to collect and enforce payment of any Outstanding Debt. We may grant a Customer further time in which to pay a Debt or accept payment of less than the Invoice Value We may institute, defend or settle proceedings in respect of any Debt in the manner and upon the terms we decide. If appropriate, we may issue proceedings in your name. You will, at your own expense, provide all cooperation reasonably requested by us, including the production of all documents and the giving of evidence required to substantiate our claim to payment of any Debt Unless we have appointed you as our agent to collect Debts and enforce the Associated Rights, you will not attempt to collect any Outstanding Debt or to enforce the Associated Rights. 8

9 11.4 You will be bound by action taken by us in connection with the collection or enforcement of Debts or realisation of any Associated Rights You must ensure that Customers pay all Remittances to us or into the Remittance Account. All Remittances received by you in respect of Outstanding Debts (other than Non-notifiable Debts unless we have told you to send us Remittances tendered in payment of Non-notifiable Debts) must be delivered to us immediately or paid into the Remittance Account. You must not pay any Remittance into your own bank account or into the bank account of any other person You will give instructions to your bankers to pay to us or direct to the Remittance Account all Remittances credited to your bank account You will give to our bankers instructions and an indemnity to authorise them to effect collection of any Remittance made payable to you which is not transferable You irrevocably authorise us to pay any credit balance due to a Customer. 12. Warranties 12.1 You warrant and represent that: prior to entering into the Agreement, you have disclosed to us all information which you knew or ought reasonably to have known might influence us in deciding whether or not to enter into the Agreement or negotiating its terms or as to the suitability of any person as a Surety; all Accounting Records and information which you provide to us about Debts, Dilutions and Supply Contracts are accurate and correct; and the most recent financial statements provided to us prior to the Commencement Date were prepared in accordance with generally accepted accounting principles, fairly represent your financial position at the date they were prepared and there has been no material adverse change in your financial condition since that date By delivering a Schedule to us (other than any separate Schedule Notified pursuant to Condition 4.6 of these Conditions applicable to all facilities) you warrant and represent in relation to each Notified Debt that: the Goods have been Delivered; the Debt has arisen from a Supply Contract entered into by you in the normal course of your business; (unless otherwise agreed by us in writing) the credit period in the Supply Contract is no greater than your Standard Payment Terms and the Settlement Discount in the Supply Contract is no greater than the Maximum Settlement Discount; (the Supply Contract is governed by English or Scots law and does not include any prohibition against the assignment of the Debt; the Goods delivered are of satisfactory quality, fit for purpose and conform to the terms of the Supply Contract, with any samples of Goods previously supplied and to all relevant UK and European Union standards; and, if the Goods consist of services, the services have been performed by you in accordance with best practice, were provided with reasonable skill and care and were performed in accordance with the terms of the Supply Contract; you have completed all your contractual obligations to the Customer's satisfaction and the Customer will accept liability for the Debt and pay the full Invoice Value (less any Settlement Discount) without any dispute, deduction, set-off or counterclaim; you are not nor will become indebted to the Customer; the original invoice has been issued and sent to the Customer within 1 month of Delivery; 9

10 the correct name, address and (if any) trading style of the Customer appears on the invoice evidencing the Debt and, if you are required to give Notice of Assignment to Customers, the original invoice sent to the Customer bears a Notice of Assignment; you have no Agreement with the Customer for set-off, retrospective discounts, retentions or otherwise by which the amount of the Debt may be reduced; the Debt is payable in an Approved Currency by a Customer domiciled in an Approved Country; the Customer has an established place of business and is not an Associate; the Debt has not been Notified previously and is not a Non-notifiable Debt; you own the Debt and are entitled to sell it to us; and no other person has any Security over or any rights to the Debt or the Goods to which it relates. 13. Undertakings You undertake: 13.1 not to vary the terms of a Supply Contract or your Standard Payment Terms relating to a Notified Debt; 13.2 to comply with the Personal Data Processing Obligations, where you share or process Personal Data under or in relation to the Agreement; 13.3 to comply with all instructions, guidelines and procedures communicated by us for the purpose of operating the facility efficiently; 13.4 to comply with the terms of any Insurance Policy of which we are the assignee or joint insured and to tell us if the Insurance Policy is varied or cancelled or lapses; 13.5 to protect the Associated Rights; 13.6 to inform us in writing immediately: of any actual or proposed change in your directors, shareholders, members or partners or in the nature of your business or trading style; you become aware of any dispute between you and a Customer or any other matter (including adverse credit information) which may affect the recovery of the Invoice Value of a Debt; about any relevant information that may influence our decision to continue the Agreement or establish any Customer Funding Limit or designate any Debt as an Approved Debt; of the rejection or return of any Goods by a Customer; of any breach of the Agreement; if any person becomes or ceases to be your Associate; of the enforcement of Security against you or a Surety; of any actual or threatened proceedings or enforcement process against you or a Surety which may, in our reasonable opinion, have a material adverse effect on your business or your ability to perform the Agreement or the Surety's ability to discharge any liabilities owed to us; or if you propose to enter into a material financial obligation of more than 50,000 with another person not to have any involvement or connection directly or indirectly with a Sanctioned Entity or Sanctioned Territory; 10

11 13.8 to maintain all licences, registrations and authorisations required to operate your business and comply with all applicable laws and regulations; and 13.9 to give us not less than 14 days' notice in writing of your intention to enter into an Insurance Policy. 14. Restrictions You will not (without our prior written consent): 14.1 create any Security over any of your property, assets, undertaking or Debts; 14.2 enter into any Agreement for the sale or discounting of your Debts; 14.3 assign or otherwise deal with your Debts except in accordance with the Agreement; 14.4 repay any loan which you have previously agreed with us will not be repaid; 14.5 transfer your business or assets (except in the normal course of business); or 14.6 enter into any guarantee, indemnity or similar Agreement. 15. Recourse 15.1 We may exercise Recourse in respect of any: Debt which is disputed by the Customer (whether or not the dispute is valid); Approved Debt which becomes a Disapproved Debt; Approved Debt which is Outstanding at the expiry of the Recourse Period or (if earlier) when the relevant Customer becomes Insolvent; and Debt due from a Customer by whom more than 25% of the total Outstanding Debt is Outstanding in excess of the Recourse Period We may exercise Recourse in respect of any or all Outstanding Debts at any time following the termination of the Agreement We may exercise Recourse by written notice to you or by debiting the relevant amounts to the Current Account and Sales Ledger Account. If we exercise Recourse, the Debt will continue to belong to us We may reassign any Debt to you upon payment of the Repurchase Price If we reassign all Outstanding Debts to you or all Debts Notified by you are discharged, we may retain an amount sufficient to cover any claims against us by Customers, including in respect of credit balances. 16. Termination 16.1 We may terminate the Agreement immediately by written notice to you at any time after any Termination Event At any time after a Termination Event, even if we do not terminate the Agreement, we if you have been appointed as our agent to collect Debts, withdraw your agency to collect Debts; exercise Recourse in respect of any or all Outstanding Approved Debts; cancel any or all Customer Funding Limits and designate any Outstanding Approved Debt as a Disapproved Debt; apply Reserves; 11

12 require you to Notify all Outstanding Non-notifiable Debts; withhold any payment to you until your Obligations have been discharged; reduce the Prepayment Percentage to a lower percentage or zero; reduce the Facility Review Limit; demand immediate payment from you of your Obligations; charge the Early Termination Payment (calculated on the assumption that the Agreement was terminated at your request, without notice, on the date of the Termination Event); take possession of and sell any Goods which are rejected or returned by a Customer and apply the net proceeds of sale as if they are a Remittance paid by the Customer; and withdraw your licence to use E At any time after a Termination Event which is not a breach of the Agreement or any other Agreement made between you or an Associate and us, you agree that we may: increase the Discount Fee by up to 5%; and charge the Recoveries Fee If the Termination Event is a breach of the Agreement or any other agreement made between you or an Associate and us, you agree that we may claim from you as liquidated damages on an indemnity basis all costs incurred by us arising out of your breach of the Agreement, including the costs of collecting Debts and resolving disputes with Customers; and may estimate the amount of our claim and debit the relevant sum to the Current Account at any time on or after the occurrence of the relevant Termination Event; and you agree that a reasonable estimate of our anticipated costs will be up to 15% of the Invoice Value of the Debts Outstanding on the Sales Ledger Account at the date of the relevant Termination Event and that if our actual costs are less than our estimate, we will credit the excess to your account when the collection of all Debts has been completed If you wish to terminate the Agreement before the expiry of the Minimum Period and/or without serving notice of at least the Notice Period, we may agree to the early termination of the Agreement on terms acceptable to us, including payment of all your Obligations and the Early Termination Payment The termination of the Agreement will not affect rights and obligations accrued prior to the date of termination and these rights and obligations will continue until all sums due by you to us under the Agreement have been discharged. 17. Variation 17.1 Where expressly stated in the Agreement, certain terms and Conditions of the Agreement may be varied by us at any time We may vary any other terms and Conditions of the Agreement by giving you not less than 30 days' notice. 18. Communications with other persons You irrevocably authorise us to: 18.1 contact your Customers to confirm the validity of Debts; 18.2 provide to your bankers, auditors, accountants and other professional advisors and to any other factor, discounter, Surety, assignee, participant, Security trustee agent, arranger, Broker, insurer or Affiliate information about your accounts, the operation of the Agreement and your relationship with us; and 12

13 18.3 obtain from your bankers, auditors, accountants and other professional advisors any information we reasonably require about your business and Accounting Records and you confirm that you have authorised these persons to provide such information to us. 19. Broker's commission If the Agreement was made as a result of your introduction to us by a Broker, you agree that: 19.1 the Broker was not acting as an agent for us and was not authorised to make any representations about us or the Agreement, nor will any such representations be binding on us; and 19.2 we may pay commission to the Broker as a consequence of entering into the Agreement. If requested by you, we will provide details of the amount of the commission. 20. Service of notices 20.1 Any notice served by you must be in writing and sent by recorded delivery to us at 40 Spring Gardens, Manchester M2 1EN or, if we move from this address, any other address we tell you, and the notice will only be effective upon delivery Any notice served by us may be delivered to you or any director, member or partner of yours or delivered or sent by first class post or sent by E3, facsimile or to you at your registered office or principal place of business A notice served by us will be deemed served if delivered personally, at the time of delivery; if sent by post, the day after posting; and if sent by facsimile, E3 or , at the time of sending. 21. Novation and assignment of the Agreement 21.1 We may transfer to another person the Agreement and any or all of our rights, remedies and duties under the Agreement You must not transfer, assign or sub-contract the Agreement or the performance of your obligations under the Agreement to any other person without our written consent. 22. Power of attorney 22.1 As Security for performance of your obligations to us, you appoint us and each of our directors and our company secretary from time to time jointly and severally both during and after the termination of the Agreement in your name and on your behalf: to execute and sign deeds and documents and do all things necessary to give effect to the Agreement and protect our rights under it; endorse and/or negotiate Remittances; pursue, defend or compromise any proceedings in connection with any Debt or Associated Rights; execute legal assignments of or perfect our title to any Debts; execute any Security in connection with the Agreement; and secure the performance of any of your obligations to us or to any Customer This appointment will be irrevocable until all Obligations due from you to us have been paid. We may appoint any substitute attorney to perform these powers or delegate their performance. 13

14 23. Indemnity You agree to indemnify us against all Obligations and Disbursements and all claims against us by any Customer. 24. Limitation of liability 24.1 We will not be liable to you for any loss or damage, consequential or otherwise, that is caused in any way by us, including loss caused by an unforeseeable event or any circumstance beyond our control, unless such loss or damage arises directly from a fraudulent act by us or any of our officers. We do not exclude or limit our liability to the extent that the exclusion or limitation is prohibited by law You must commence any action against us in relation to the Agreement no later than 24 months following the relevant event giving rise to the claim. 25. VAT If you would be entitled to a refund of VAT upon reassignment of a Debt to you, we may reassign the Debt to you on the understanding that you will promptly apply for the relevant refund and pay to us immediately a sum equivalent to the VAT recovered in relation to the reassigned Debt. 26. Governing law 26.1 If the Agreement is governed by the laws of England and Wales, the English courts will have exclusive jurisdiction to determine any dispute or claim relating to the Agreement or its formation (including noncontractual disputes or claims) If the Agreement is governed by Scots law, the Scottish courts will have exclusive jurisdiction to determine any dispute or claim relating to the Agreement or its formation (including non-contractual disputes or claims) For our benefit, you irrevocably submit to the jurisdiction of the relevant courts and irrevocably agree that a judgment in any proceedings in connection with the Agreement by those courts will be binding on you and may be enforced against you in the courts of any other jurisdiction. 27. Miscellaneous 27.1 The Agreement will be binding on the successors in title of each of you and us and will remain effective notwithstanding any change in the constitution, composition or legal personality of either of you or us A reference to a "Condition" means a Condition in these General Conditions of Invoice Finance (and does not mean a Special Condition or a Preliminary Condition unless expressly stated). Any Special Condition will prevail over any Condition with which it is inconsistent A reference to a provision of law is a reference to that provision as amended, replaced or re-enacted from time to time. 14

15 CONDITIONS APPLICABLE TO FACTORING FACILITIES 1 You must send to every Customer who owes an Outstanding Debt a Notice of Assignment as soon as possible after the Commencement Date. 2 You must print on or affix to every invoice evidencing Debts coming into existence after the Commencement Date and on every statement of account sent to a Customer a prominent and legible Notice of Assignment. 3 We may, at any time and at your expense, give Notice of Assignment on your behalf. 4 You must ensure that all stationery is reprinted to incorporate the Notice of Assignment in a prominent position and font no later than 30 days after the Commencement Date. 5 A Notice of Assignment must not appear on a credit note. 15

16 CONDITIONS APPLICABLE TO COMBINED INVOICE FINANCE FACILITIES 1 We appoint you as our agent to collect Debts and enforce the Associated Rights and you must: 1.1 send to every Customer who owes an Outstanding Debt a Notice of Assignment as soon as possible after the Commencement Date; 1.2 print on or affix to every invoice evidencing Debts coming into existence after the Commencement Date and on every statement of account sent to a Customer a prominent and legible Notice of Assignment; 1.3 ensure that all stationery is reprinted to incorporate the Notice of Assignment in a prominent position and font no later than 30 days after the Commencement Date; 1.4 tell your Customers that you are acting as our authorised agent to collect Debts; 1.5 carry out your duties as our agent efficiently and honestly; 1.6 not compromise any Debt or agree with a Customer to any extension of time to pay a Debt without our prior written consent; 1.7 maintain your own sales ledger and a comprehensive record of all action taken by you to collect Debts and make the sales ledger and this record available to us on our request; 1.8 ensure that the Target Debt Turn is not exceeded; 1.9 retain all Remittance advices, cheques and transfer authorities relating to Remittances tendered by Customers and send to us copies of these documents, if requested by us; 1.10 instruct your bankers to send us at least once a month a statement of transactions undertaken on every bank account maintained by you; and 1.11 tell your Customers that payment of all Remittances must be made into the Remittance Account. 2 We may, at any time and at your expense, give Notice of Assignment on your behalf. 3 A Notice of Assignment must not appear on a credit note. 4 We may cancel your agency to collect Debts and enforce the Associated Rights at any time. If we cancel this agency: 4.1 only we are entitled to collect payment of Outstanding Debts and enforce the Associated Rights; 4.2 you must provide to us any Accounting Records we request; and 4.3 we may charge you an additional Service Fee of up to 5% of the Invoice Value of Debts Outstanding at the time of cancellation of the agency and coming into existence thereafter. 16

17 CONDITIONS APPLICABLE TO DISCLOSED INVOICE DISCOUNTING FACILITIES 1 We appoint you as our agent to collect Debts and enforce the Associated Rights and you must: 1.1 send to every Customer who owes an Outstanding Debt a Notice of Assignment as soon as possible after the Commencement Date; 1.2 print on or affix to every invoice evidencing Debts coming into existence after the Commencement Date and on every statement of account sent to a Customer a prominent and legible Notice of Assignment and details of the Remittance Account; 1.3 ensure that all stationery is reprinted to incorporate the Notice of Assignment in a prominent position and font no later than 30 days after the Commencement Date; 1.4 tell your Customers that you are acting as our authorised agent to collect Debts; 1.5 carry out your duties as our agent efficiently and honestly; 1.6 not compromise any Debt or agree with a Customer to any extension of time to pay a Debt without our prior written consent; 1.7 maintain your own sales ledger and a comprehensive record of all action taken by you to collect Debts and make the sales ledger and this record available to us on our request; 1.8 ensure that the Target Debt Turn is not exceeded; 1.9 retain all Remittance advices, cheques and transfer authorities relating to Remittances tendered by Customers and send to us copies of these documents, if requested by us; 1.10 instruct your bankers to send us at least once a month a statement of transactions undertaken on every bank account maintained by you; and 1.11 tell your Customers that payment of all Remittances must be made into the Remittance Account. 2 We may, at any time and at your expense, give Notice of Assignment on your behalf. 3 A Notice of Assignment must not appear on a credit note. 4 You must deliver to us within 10 days of the end of each month in the format specified by us: 4.1 an aged sales ledger complete to the end of the previous month detailing all Debts Outstanding on the final day of that month; 4.2 a reconciliation between the balances on the Sales Ledger Account at the end of that month and your sales ledger; 4.3 copies of statements of account or an open item ledger including details of each Customer's name and address and the date, number and amount of each invoice, identifying their Due Dates for payment, and each credit note comprising the Outstanding Debt due by that Customer; 4.4 an aged analysis of your purchase ledger complete to the end of that month; 4.5 copies of all bank and building society statements detailing transactions on your bank and building society accounts in that month; and 4.6 any other information we may request. 5 We may withhold making a Prepayment if you have not delivered to us all the information which you are required to provide within the time limit set out in clause 4 of these Conditions applicable to Disclosed Invoice Discounting facilities. 17

18 6 We may cancel your agency to collect Debts and enforce the Associated Rights at any time. If we cancel this agency: 6.1 only we are entitled to collect payment of Outstanding Debts and enforce the Associated Rights; 6.2 you must provide to us any Accounting Records we request; and 6.3 we may charge you an additional Service Fee of up to 5% of the Invoice Value of Debts Outstanding at the time of cancellation of the agency and coming into existence thereafter. 18

19 CONDITIONS APPLICABLE TO CONFIDENTIAL INVOICE DISCOUNTING AND CONFIDENTIAL INVOICE FINANCE FACILITIES 1 We appoint you as our agent to collect Debts and enforce the Associated Rights and you must: 1.1 carry out your duties as our agent efficiently and honestly; 1.2 not compromise any Debt or agree with a Customer to any extension of time to pay a Debt without our prior written consent; 1.3 maintain your own sales ledger and a comprehensive record of all action taken by you to collect Debts and make the sales ledger and this record available to us on our request; 1.4 ensure that the Target Debt Turn is not exceeded; 1.5 retain all remittance advices, cheques and transfer authorities relating to Remittances tendered by Customers and send to us copies of these documents, if requested by us; 1.6 instruct your bankers to send us at least once a month a statement of transactions undertaken on every bank account maintained by you; and 1.7 tell your Customers that payment of all Remittances must be made into the Remittance Account. 2 Details of the Remittance Account must be printed in a prominent position on all invoices and statements of account sent to Customers no later than 30 days after the Commencement Date. 3 You must deliver to us within 10 days of the end of each month in the format specified by us: 3.1 an aged sales ledger complete to the end of the previous month detailing all Debts Outstanding on the final day of that month; 3.2 a reconciliation between the balances on the Sales Ledger Account at the end of that month and your sales ledger; 3.3 copies of statements of account or an open item ledger including details of each Customer's name and address and the date, number and amount of each invoice, identifying their Due Dates for payment, and each credit note comprising the Outstanding Debt due by that Customer; 3.4 an aged analysis of your purchase ledger complete to the end of that month; 3.5 copies of all bank and building society statements detailing transactions on your bank and building society accounts in that month; and 3.6 any other information we may request. 4 We may withhold making a Prepayment if you have not delivered to us all the information which you are required to provide within the time limit set out in clause 3 of these Conditions applicable to Confidential Invoice Discounting and Confidential Invoice Finance facilities. 5 We may cancel your agency to collect Debts and enforce the Associated Rights at any time. If we cancel this agency: 5.1 only we are entitled to collect payment of Outstanding Debts and enforce the Associated Rights; 5.2 you must give Notice of Assignment of all Outstanding Debts to the relevant Customers; 5.3 you must provide to us any Accounting Records we request; and 5.4 we may charge you an additional Service Fee of up to 5% of the Invoice Value of Debts Outstanding at the time of cancellation of the agency and coming into existence thereafter. 19

20 CONDITIONS APPLICABLE TO BAD DEBT PROTECTION 1 If a Debt is designated by us as a BDP Debt, we will accept the risk that the Customer may not pay the BDP Debt due to a BDP Event. 2 Debts which are not eligible for BDP include: 2.1 Debts due by Customers who are a registered charity, a government or a government ministry, department or agency, a regional or local authority, a local authority department or agency, a nationalised undertaking or entity controlled by a government or local authority or who are Associates or are Insolvent prior to Delivery; 2.2 Debts payable on Delivery without credit terms or on "pay when paid" terms; 2.3 Debts payable by a confirmed letter of credit; 2.4 Debts that come into existence: before a BDP Limit is established (unless we have agreed in writing to backdate the BDP Limit); after a BDP Limit has been cancelled; after Protracted Default or a Notifiable Event; or as the result of the delivery of Goods after the Default Date of another Debt due by the same Customer (unless we have agreed in writing that you should continue to Deliver Goods to comply with your contractual obligations); 2.5 Debts which are in excess of a BDP Limit; 2.6 Debts eligible for BDP which, when aggregated with other Outstanding Debts eligible for BDP due by the same Customer, are less than the BDP Threshold at the time they are Notified or on the date of the BDP Event; 2.7 Debts which are not invoiced within 30 days of Delivery or are payable more than 90 days after Delivery; 2.8 all Debts due by a Customer if the total amount of Debts due by the Customer exceeds three times the BDP Limit for that Customer; 2.9 Non-notifiable Debts; 2.10 Insured Debts; and 2.11 the element of each Debt that comprises VAT. 3 You must apply for BDP Limits using our standard application form. All information provided by you must be complete and accurate. A Debt is not eligible to be a BDP Debt until a BDP Limit has been established for the relevant Customer. 4 We may establish, reduce, decline or cancel a BDP Limit at any time with immediate effect. Any reduction or cancellation of a BDP Limit will not affect BDP Debts that were Outstanding at the date of reduction or cancellation, except where clauses 6 and 7 of these Conditions applicable to Bad Debt Protection apply. 5 We may also designate Debts which come into existence after the cancellation of a BDP Limit as BDP Debts provided that: 5.1 no Notifiable Event has occurred; 5.2 the Supply Contract was made before the BDP Limit was cancelled; 5.3 you can satisfy us that you are not entitled to cancel the relevant Supply Contract; and 5.4 your outstanding obligations under the Supply Contract will be completely performed within 60 days of the cancellation of the BDP Limit. 20

21 6 We may cancel all BDP Limits at any time after: 6.1 receiving notice of your intention to enter into an Insurance Policy pursuant to Condition 13.9 of the Conditions applicable to all facilities and, if any Debt is not paid due to a BDP Event, we will not be liable for the Purchase Price of any BDP Debt Outstanding at the earlier of the date of expiry of the notice or the date on which the Insurance Policy commences; and 6.2 the occurrence of a Termination Event (even if we do not terminate the Agreement) and, if any Debt is not paid due to a BDP Event, we will not be liable for the Purchase Price of any BDP Debt Outstanding at the date of the Termination Event. 7 All BDP Limits will be cancelled automatically upon the termination of the Agreement and, if any Debt is not paid due to a BDP Event, we will not be liable for the Purchase Price of any BDP Debt Outstanding at the date of termination. 8 You must not tell a Customer of the amount of a BDP Limit or of our decision to reduce, decline or cancel a BDP Limit for that Customer. 9 We may appropriate a Remittance against a BDP Debt (in chronological order of the Due Dates of each invoice) in priority to any other Debt due from a Customer despite contrary appropriation by the Customer or you. 10 Debts will be BDP Debts in the order in which they are Notified. 11 If we have appointed you as our agent to collect Debts, you must adhere to the Collection Procedures. 12 You must tell us immediately (and in any event within 7 days of you becoming aware) of: 12.1 the occurrence of any Notifiable Event or BDP Event; or 12.2 any information about a Customer that would influence us in deciding whether to continue, vary or cancel a BDP Limit or assist us to collect a BDP Debt. 13 If you have a Disclosed Invoice Discounting, Confidential Invoice Discounting, Confidential Invoice Finance, Combined Invoice Finance, Construction Finance or Contract Finance facility, you must also comply with the following Conditions: 13.1 Proceedings must be issued to recover payment of an Outstanding Debt within 60 days of the relevant Due Date for payment (unless an Insolvency Event has occurred prior to this date) In the case of a BDP Debt which is not paid due to Protracted Default, you must supply to us a copy of the judgment entered against the Customer in respect of the Debt You must submit to us within 15 days of the end of each month an overdue and Notifiable Event report in our standard form detailing (i) all Outstanding Debts which have not been paid by the relevant Default Date and (ii) all Notifiable Events. 14 If you have a Disclosed Invoice Discounting, Confidential Invoice Discounting or a Confidential Invoice Finance facility, you must submit to us within 15 days of the end of each month an overtrading report in our standard form detailing each Customer by whom the aggregate balance of Outstanding Debts exceeds three times the value of the relevant BDP Limit. 15 Subject to compliance with the Agreement and, in particular, these Conditions applicable to Bad Debt Protection, we will credit the Purchase Price of a BDP Debt which is Outstanding after a BDP Event to the Current Account within 60 days of our receiving from you: 15.1 in the case of Protracted Default, written notice that the Debt has not been paid due to Protracted Default, subject to (if you have a Disclosed Invoice Discounting, Confidential Invoice Discounting, Confidential Invoice Finance, Combined Invoice Finance, Construction Finance or Contract Finance facility) compliance with clause 13 of these Conditions applicable to Bad Debt Protection; 21