Common use of Credit Lines Clause in Contracts

Credit Lines. 4.1. Where you have our Non-Recourse Facility, then at the end of the Credit Period we may exercise Recourse in respect of a Debt within the Credit Line for the amount of: (i) the Value Added Tax included in the Debt; and (ii) the First Loss; and (iii) any settlement, trade or retrospective discount taken or claimed. We may also exercise Recourse for amounts in excess of the Credit Line. We will then accept the Credit Risk for the remainder of the Covered Debt. 4.2. We will notify you of the Credit Line for each Outstanding Debtor as soon as convenient after the Commencement Date and thereafter as soon as convenient after a Credit Line has been requested by you. Prior to Notifying each Debtor's Debts to us, you must have a Credit Line or have submitted an application to us for one. Your application must be in the form and with the information required by us. Sales Ledger Financing All information given by you must be accurate. Credit Lines will be issued entirely at our discretion for the purpose of determining the terms upon which we will purchase Debts. They will apply only to Debtors with the names specified by you. Credit Lines shall, under no circumstances, be taken as our indication of the creditworthiness or otherwise of a Debtor. 4.3. We will advise you of Credit Lines by whatever means we consider appropriate. We may increase or decrease Credit Lines at any time. We will advise you of increases or decreases. Any Notified Debt within a Credit Line shall not be affected by a decrease, provided that the Contract of Sale shall have been completely performed before Notification to us of the Debt. 4.4. You will not reveal to anyone, including your Debtors, the terms, the amount or absence of any Credit Lines. As between you and us, such information shall be considered legally privileged. Where you have a Recourse Facility Credit Lines are set only for the purposes of establishing the amount of Early Payments that may be made. 4.5. Where a Credit Line has been established then Outstanding Debts shall be treated as Covered Debts in the order in which they shall become due for payment. Debts above a Credit Line shall be Approved Debts. 4.6. If we have designated a Debt as an Approved Debt, it (and all other Debts due by the same Debtor) shall forthwith and without notice to you be treated as Unapproved Debts in any of the following circumstances: (i) you shall have been in breach of any warranty or undertaking to us relating to the Debt; (ii) the Debt shall in any way have been disputed by the Debtor or subject to a claim by the Debtor to set-off or counterclaim; (iii) it shall be a Non-Notifiable Debt; (iv) the payment terms under the Contract of Sale shall be different from those shown on your application for a Credit Line (or if none is shown - from those appearing in the Sales Ledger Financing Agreement or as agreed by us in writing); or (v) the Goods shall not have been delivered to the Debtor's carrier or premises or the Contract of Sale shall not have been fully completed (except for payment of the Debt) prior to the Notification to us of the Debt; or (vi) the Credit Period shall expire after the date of termination of this Agreement or following a Termination Event; or (vii) if the Debtor's failure to pay shall, in our reasonable opinion, be due to government action, political events, war, revolution, insurrection or to any default or failure by you; or (viii) the amount of the Debt shall be reduced as a result of any credit note, allowance or other credit being issued or made to or claimed by any Debtor for any reason (except a prompt payment discount not exceeding 5%); (ix) if the Debtor shall deliver payment to you (except where you have our Agency to collect Debts). 4.7. Following a Debt becoming an Unapproved Debt under Condition 4.6 you will forthwith repay any Early Payment made in respect of it. 4.8. If you have our Non-Recourse Facility then, even though we may have credited the Purchase Price of a Covered debt to the Payment Account under Condition 5.2, we may debit the Purchase Price to that account if the Debt shall later become Unapproved, whilst still Outstanding.