INVOICE DISCOUNTING AGREEMENT
AN AGREEMENT made the 10th day of October 1996
BETWEEN
1. The person whose name and address is set out in the schedule hereto and who
is there described as the Vendor ("the Vendor") and
2. LOMBARD NATWEST DISCOUNTING LIMITED of Smith House Elmwood Avenue Feltham
Middlesex ("LND")
WHEREBY it is agreed as follows:
1. The Agreement shall commence on the date specified in the schedule and
shall continue until terminated by either party by not less than three
months' written prior notice.
2. (a) The Vendor shall sell with full title guarantee and LND shall purchase
free from all charges liens and other encumbrances and upon the
terms hereof all Receivables; subject to such exceptions as may from
time to time be specified by LND.
(b) The purchase of any Receivable shall be complete and the rights to
such Receivable shall vest in LND upon that Receivable coming into
existence.
(c) "Receivables" means all the book debts, invoice debts, accounts notes,
bills, acceptances and/or other forms of obligation owned by or owing
to the Vendor which are in existence at the date of commencement of
this Agreement or which come into existence during the currency of
this Agreement in respect of contracts entered into by the Vendor for
the sale of goods or the provision of services in the ordinary course
of business to customers in countries as set out in the schedule, and
which are payable in the United Kingdom in any of the currencies
specified in the schedule ("the Approved Currencies"), and shall also
include all the Vendor's rights under the contract concerned and in
the goods the subject matter of that contract. [However, the
expression does not include a sum payable in full in the United
Kingdom prior to the despatch of the goods or payable against
documents under an irrevocable letter of credit confirmed by a bank In
the United Kingdom before despatch of the goods. For these purposes,
"despatch" is deemed to be made when the Vendor parts with possession
of goods in any way for the purpose of transmitting them to a
customer.)
(d) The purchase price, which shall be payable as herein provided by LND
to the Vendor, for any Receivable purchased in accordance with Clause
2(a) shall be the full amount payable by the Vendor's customer for the
goods or services to which the Receivable relates (together with any
VAT, tax or other impost payable in respect thereof) as notified by
the Vendor to LND less:
(i) any discount commission or other allowances due or allowable to
the customer and shown on the relevant invoice; and
(ii) the Discounting Charge
and shall be payable, (subject as set out below) in the currency in
which the Receivable is expressed.
(e) All sales of Receivables made hereunder shall be absolute sales.
(f) "United Kingdom" means the United Kingdom of Great Britain and
Northern Ireland, the Isis of Man arid the Channel Islands.
3. Subject to the provisions of the Agreement and compliance by the Vendor
with Clause 9(b)(vi) LND shall remit (and at any time at the sole
discretion of LND it may remit) to the Vendor any part of the balance
standing at the credit of any of the Receivables Purchased Accounts up to
the full amount thereof less any amount which LND in its sole discretion
requires as a retention. Any balance which may stand at the debit of the
Vendor on a Receivables Purchased Account shall be payable by the Vendor to
LND on demand. LND will notify the Vendor from time to time of the basis on
which it proposes to exercise its discretion under the terns of this
clause.
4. (a) Receivables Purchased Accounts will be maintained by LND in respect of
each of the Approved Currencies to which will be credited:
(i) the full purchase price (as defined in Clause 2(d) but ignoring
the Discounting Charge) of all Receivables payable in the
relevant currency advised to LND;
(ii) any costs or expenses recovered by LND under Clause 13 (expressed
in the relevant Approved Currency If actually recovered in a
different currency);
(iii) any amount paid by the Vendor to LND under this Agreement (but
shall not include any monies remitted to LND under Clause
9(b)(viii)) expressed in the relevant Approved Currency if
actually recovered in a different currency;
and to which will be debited (so far as the same relate to Receivables
denominated in the Approved Currency concerned):
(iv) all payments made to the Vendor by LND under the terms of this
Agreement;
(v) the full value of all credit notes issued by the Vendor;
(vi) the amount of any Receivables which LND gives notice to the
Vendor to repurchase under Clause 15;
(vii) the amount of any sum payable by the Vendor under Clauses 6,
11(b)(i), 11(b)(ii) and 13;
(viii) the amount of any payment cost damage or liability made or
sustained by LND arising directly or indirectly in consequence of
any breach of warranty or undertaking by the Vendor or of steps
reasonably taken by LND to mitigate such payment cost or damage
or liability;
(ix) a Discounting Charge which will be calculated at the rate
specified in the schedule each day on the net daily balance
standing at the debit of the Memorandum Discounting Statement
referable to the relevant Approved Currency and will be recovered
by deduction from the next payment by LND to the Vendor in
respect of sums payable in the relevant Approved Currency;
(x) a Commission Charge in accordance with Clause 5 which will be
debited on the last working day of each month and recovered by
deduction as set out in paragraph (ix) above.
(b) Memorandum Discounting Statements in respect of each of the Approved
Currencies will be maintained by LND for the purpose of calculating.
Discounting Charges to which shall be credited:
(i) all payments received in respect of customer payments in the
relevant currency as described in Clause 9(b)(viii);
(ii) any payments received in the relevant currency direct by LND in
respect of the Receivables purchased under this Agreement;
(iii) any amount paid by the Vendor to LND in the relevant currency;
(iv) any amount that falls to be credited to the relevant Receivables
Purchased Account at Clause 4(a)(ii) above;
(v) any amount paid in the relevant currency by any other person to
LND under Clause 11(b);
and to which will be debited (so far as the same relate to Receivables
denominated in the Approved Currency concerned);
(vi) sill payments made to the Vendor by LND under the terms of this
Agreement;
(vii) the amount of any sum payable by the Vendor to LND under Clauses
11(b)(i), 11 (b)(ii) and 13;
(viii) the amount of any sum payable under Clause 4(a)(viii) above;
(ix) the amount of any cheque or other instrument credited under
Clauses 4(b)(i); 4(b)(ii); 4(b)(iii); 4(b)(iv); and 4(b)(v) above
where such cheque or, instrument is dishonoured;
(x) a Discounting Charge as described at Clause 4(a)(ix) above;
(xi) a Commission Charge as described at Clause 4(a)(x) above.
(c) At the end of each month LND will send to the Vendor copies of each of
the Receivables Purchased Accounts and each of the Memorandum
Discounting Statements.
5. LND shall be entitled to charge the Vendor a commission which shall be
calculated as being the percentage specified in the Schedule hereto of the
gross amount of Receivables sold to LND in each month. All such commission
charges shall be subject to applicable Value Added Tax at the prevailing
rate.
6. Where any Receivable purchased by LND remains unpaid whether wholly or in
part after payment thereof has become due or where at any time the customer
disputes liability for payment or asserts any right of lien retention or
setoff the Vendor shall on demand pay to LND the full amount or the whole
of the unpaid amount of that Receivable.
7. (a) The Vendor shall at its own expense and if so requested by LND execute
a separate assignment, in writing to LND of any Receivable sold to LND
in accordance with this Agreement and of any rights which the Vendor
may have in relation thereto.
(b) If in relation to any Receivable it is not possible for LND to take a
separate assignment of the Receivable as sot out in sub-clause (a) of
this Clause 7, the Vendor will continue to hold such Receivable in
trust for LND and any payments received in respect thereof will be
immediately paid to LND.
8. (a) The Vendor shall not grant any fixed or floating charge over any
existing or future Receivables of the Vendor and shall procure
the exclusion of such Receivables from any charge in which they would
otherwise be comprised.
(b) The Vendor shall not assign charge or in any way dispose of the
benefit of this Agreement without the express consent in writing of
LND.
(c) During the currency of this Agreement the Vendor or if applicable its
parent subsidiary or associated company shall not enter into any
agreement for the charging or discounting of its Receivables without
the express consent of LND.
9. (a) The Vendor hereby warrants to LND that in relation to each Receivable
sold hereunder by the Vendor to LND and so that this warranty shall
be deemed to be repeated on each occasion on which the Vendor makes an
advice of Receivables to LND:
(i) the goods have been duly delivered or the services duly provided;
(ii) no other person has an interest in or any charge lien or other
encumbrance on the Receivable to which the advice relates;
(iii) the Receivable is an existing and bona fide obligation of the
Vendor's customer arising out of the sale of goods or the
provision of services by the Vendor in the ordinary course of its
business;
(iv) the Vendor is not then in breach of any of its obligations to the
customer and the customer will accept the goods sold or the
services provided and the invoices therefor (or if the customer
is bankrupt or in liquidation the customer's trustee in
bankruptcy or liquidator will accept a proof of debt for the
unpaid balance of the invoiced price) without any dispute or
claim whatsoever (whether justifiable or not) including disputes
as to price, terms, quantity, or quality, setoffs or
counter-claim or claims of release from liability or inability to
pay because of any act of God or public enemy or war or because
of the requirements of law (whether in the United Kingdom or
elsewhere) or of rules, orders or regulations having the force of
law;
(v) the customer is not a subsidiary, co-subsidiary, parent or
associated company of the Vendor or under the same director or
shareholder control as the Vendor;
(vi) the customer has obtained all the authorities necessary under the
regulations in force in the country to which the goods are
despatched or services rendered, or from which payment is to be
made, in order to pay the Receivables in accordance with the
contract of invoice;
(vii) the contract with the customer specifies the nature and quantity
of the goods or services and the terms and currency of payment;
(viii) the customer's authority to import the goods or receive the
services and to pay for them is not subject to conditions as to
the export of other goods from any country or as to payment for
such other goods when so exported;
(ix) the goods or services are to be or have been exported to or
rendered in and payment Is to be made from the customers country
of residence; and
(x) the contract for the sale of goods or provision of services
between the Vendor and its customer shall be expressed to be
governed by and construed in accordance with English law, and
such choice of law is in all respects valid and binding on the
customer.
(b) The Vendor hereby undertakes with LND so that this undertaking shall
continue throughout the term of this Agreement:
(i) promptly to perform all further or continuing obligations of
whatsoever nature of the Vendor to the customer arising out of
the sale of goods or the provision of services as a result of
which any Receivable comes into existence;
(ii) on request by LND to give notice to the Vendor's customers or to
such of them as LND shall direct that the right to the
Receivables specified in such notice (which may include
Receivables which have not yet come into existence) has been
assigned to LND, such notice to be in such form as LND shall
require;
(iii) to disclose to LND any change or prospective change in the
constitution or control of the Vendor and any other fact or
matter known to the Vendor which is material to be known by a
purchaser of the Receivables:
(iv) in respect of every Receivable (but only after delivery of the
relevant goods or the provision of the relevant services) to
complete and deliver to LND an advice form supplied for such
purpose by LND signed by an authorised official. The Vendor shall
also remit any such other documents in support of each Receivable
as LND may require;
(v) that all entries relating to the sale of any Receivable by the
Vendor to LND are duly recorded in the books of the Vendor and to
ensure that all accounts maintained in the books or records of
the Vendor in the names of its customers bear a conspicuous
notation that they have been assigned to LND;
(vi) in relation to each of the Approved Currencies to send to LND by
the day of each month specified in the Schedule and in a manner
approved by LND and made up to the last day of the preceding
month:
(a) an aged analysis of the Receivables sold to LND which remain
outstanding at that date such analysis being aged on the
basis specified in the Schedule by invoice date and
identifying those accounts which are either disputed or in
solicitors' hands;
(b) a copy of the Sales Ledger Account relating to the
Receivables purchased by LND under this Agreement;
(vii) to allow LND and its authorised agents at regular intervals
determined by LND and at such other times as LND shall decide to
visit the premises of the Vendor to inspect check and verify all
books records accounts orders and correspondence and any other
papers of the Vendor that LND may require. The Vendor at the
request of LND will supply LND with statements of its financial
position and results of its operations certified by the Vendor's
auditors;
(viii) the Vendor as trustee for LND will hold and keep separate from
any other monies of the Vendor all remittances received by it in
payment of any Receivable which has been sold to LND. The Vendor
will immediately pay all remittances endorsed where required:
(a) direct to the account of LND at the bankers of LND, or
(b) into a trust account in the name of LND.
10. The Vendor hereby irrevocably:
(a) authorizes LND to endorse the name of the Vendor on any and all
cheques or other forms of remittance received where such endorsement
is required to effect collection or to perfect LND's title as a holder
in due course or for any other reason;
(b) appoints LND the attorney of the Vendor to execute in the name and on
behalf of the Vendor any assignment requested under Clause 7.
11. (a) On purchase by LND of any Receivable then any title, property, right
or Interest of the Vendor in the goods to which such Receivable
relates (including all such goods that may be rejected or returned by
the customers of the Vendor), all the Vendor's rights as unpaid Vendor
and all other rights of the Vendor under the contract or contracts
pursuant to which the Receivable comes into existence (whether such
rights be created by contract, statute or other rule of law) shall be
deemed to be assigned and transferred to LND absolutely whether or not
the goods shall have been delivered by the Vendor at the time of the
said purchase.
(b) Any goods recovered by or on behalf of the Vendor in pursuance of the
exercise of any rights referred to in subclause (a) of this Clause
shall be treated as returned goods and all returned goods shall be
promptly notified to LND and shall be set aside marked with LND's name
and held for LND's account as owner. LND shall (in addition to and
without prejudice to any other rights it may have) have the right to
take possession of and to sell or cause to be sold without notice any
returned goods at such prices to such purchasers and upon such terms
and conditions as it may deem advisable and in the event of any such
sale the Vendor shall pay to LND on demand (and without asserting any
right of set-off):
(i) the difference between the amount of the Receivable relating to
such goods and the amount received by LND on any such sales; and
(ii) any costs and expenses (including legal fees) incurred by LND in
relation to any such repossession and sale.
(c) On purchase by LND of any Receivable then without prejudice to the
generality of the provisions of sub-clause (a) of this Clause, there
shall vest in LND the benefit of all guarantees, indemnities,
insurances and securities given to or held by the Vendor in respect of
such Receivable or of goods or services to which it relates.
12. LND shall not be liable to the Vendor for the amount of any discount,
commission or allowance wrongly claimed or deducted by the customer in
respect of any Receivable unless and until such amount has been received by
LND.
13. On or after the making of a request by LND under Clause 9(b)(ii) LND shall
have the sole right of collecting and enforcing payment of Receivables
(other than those re-assigned after payment of the repurchase price) in
whatever manner it may in its absolute discretion decide, whether or not
the Vendor has been debited with the amount of the Receivables and the
Vendor shall cooperate to procure such collection and enforcement. The
conduct of any proceedings shall be with LND who may (where necessary in
the name of the Vendor) Institute, compromise, settle abandon or in any
manner whatsoever conduct such proceedings upon such terms as LND in its
sole discretion shall decide and the Vendor shall be bound by all acts of
LND under this Clause. The Vendor shall be responsible for and shall
forthwith on demand pay all costs charges and expenses of whatsoever nature
Incurred by LND under this Clause.
14. LND shall be entitled to debit the relevant Receivables Purchased Accounts
and Memorandum Discounting Statements with and/or setoff against any monies
payable to the Vendor any sums payable by the Vendor in the relevant
currency to LND whether for debt or liquidated or unliquidated damages and
whether payable presently or contingently.
15. (a) Should the Vendor at any time commit any breach of this Agreement or
become insolvent or pass a resolution for member's voluntary winding up or
call any meeting of creditors or should the Vendors income or assets or any
part thereof be seized under any execution of legal process or under
distress for rent then LND may determine this Agreement forthwith by
written notice delivered or posted to the Vendor at the address of the
Vendor stated in the Schedule or at the Vendor's Registered Office or at
any other address at which the Vendor carries on business. At any time
after the termination of the Agreement pursuant to this Clause LND shall be
entitled by notice to require the Vendor to repurchase at face value so
much of any receivable purchased by LND as then remains outstanding but so
that LND shall remain legal and beneficial owner of the Receivable until
the repurchase price has been paid;
(b) At any time after giving notice as set out above, LND shall be
entitled (but not obliged) to combine and consolidate the Receivables
Purchased Accounts and (separately) the Memorandum Discounting
Statements relating to Receivables denominated in different currencies
and, in so doing, shall convert the sums concerned into sterling.
Further, any payment made by the Vendor to LND in respect of the
repurchase of a Receivable shall be made in sterling converted at the
date of actual payment (If LND shall not then have exercised its right
to combine accounts set out above) or at the date on which such
combination took place.
16. "Insolvency" means, in the case of an individual or partnership firm the
commencement of the bankruptcy of the individual or firm and in the case of
a company the commencement of winding up of the company by reason of
inability to pay its debts as they fall due or in either such case the
appointment of a Receiver of any part of the income or assets of the
individual firm or company or the making of an arrangement or composition
with creditors whichever event first occurs.
17. All conversions from one currency to another required in connection
herewith (whether for the purposes of accounting or payment) shall be made
at the prevailing spot rate for the purchase of the second currency with
the first, as at 11 a.m. on the date of conversion, as quoted by National
Westminster Bank plc.
18. LND's rights under this Agreement shall not be affected by the grant of any
time or indulgence to the Vendor or to any customer or any failure to
exercise or delay in exercising any right or option available against the
Vendor any customer or any other person nor by any step taken by LND.
19. The terms set out in this Agreement represent the whole of the terms agreed
between LND and the Vendor to the exclusion of any prior or contemporaneous
statements on the part of LND whether expressed or implied and whether oral
or in writing.
20. The Vendor will bring the terms of this Agreement to the attention of its
auditors for the time being, and authorizes LND to disclose to its auditors
for the time being such information relating to this Agreement and its
operation as its auditors shall from time to time request.
21. This Agreement and any purchase of a Receivable pursuant to it shall be
construed In accordance with and governed by English Law.
22. For the purposes of this Clause and Clauses 23 to 31 (inclusive) of this
Agreement:
(a) the definition of "Insolvency" contained in Clause 16 shall be
extended to include (in case of a company) the making of an
Administration Order pursuant to the Insolvency Act 1986 and in the
said definition (in the case of an individual, partnership or company)
the expressions "arrangement" and "composition" shall be construed as
meaning the taking effect of a Voluntary Arrangement pursuant to the
said Act;
(b) the definition of "Receivables" contained in Clause 2(c) hereof shall
be extended to include (where the context so admits) part of
Receivables;
(c) the following expressions shall have the meanings respectively
assigned to them below:
"Approved Receivable"
a Receivable which:
(i) is for the time being (when aggregated with all Receivables
owing by the same customer at such time) within a Credit
Limit; and
(ii) is not at any time the subject of any breach by the Vendor
of any warranty, undertaking or other obligation contained
In this Agreement; and
(iii) does not rank as an Unapproved Receivable by reason of any
of the provisions of Clause 28; and
(iv) is not a Receivable of the class or description described in
section 5 of the Schedule hereto;
"Credit Limit"
a limit established by LND in its absolute discretion in relation to
any customer or prospective customer of the Vendor (following
application for such limit by the Vendor in such manner and on such
form as LND may from time to time prescribe) for the purpose of
determining whether any Receivable is an Approved Receivable;
"Delivery"
in relation to Goods, the placing in transit to the Customer from a
place in the United Kingdom and, in relation to services, their
completion;
"Discretionary Limit"
a Discretionary Limit prescribed by LND for the purposes of Clause 24
hereof;
"Date of Insolvency"
(i) in the case of bankruptcy, winding up by the Court or an
administration order the date of the bankruptcy order,
winding up order or administration order respectively by the
Court having jurisdiction;
(ii) in the case of voluntary winding up of a company: the date
of the resolution for winding up by the members of the
company;
(iii) in the case of the appointment of a receiver the date of
his appointment;
(iv) in the case of an arrangement: the date when it takes
effect;
"Due Date"
in relation to a Receivable- the date on which it is due to be paid
pursuant to the contract of sale or for services giving rise to such
Receivable;
"Unapproved Receivable"
any Receivable which is not an Approved Receivable or which shall have
ceased to be an Approved Receivable by reason of any breach by the
Vendor of any warranty, undertaking or other obligation contained
herein or pursuant to the provisions of Clause 28;
"VAT Bad Debt Regulations"
the provisions for the refunding of value added tax contained in
section 11 of the Finance Act 1990 and the VAT (Refund for Bad Debts)
Regulations 1991 (ST 19911371);
(d) The description of a Receivable as "Eligible for a Refund" shall mean
that, but for its assignment to LND, the VAT Bad Debt Regulations
would apply to such Receivable and that it remains an Approved
Receivable and outstanding and vested Ian LND on or after the expiry
of the period necessary for an unpaid debt to be the subject of a
claim under the VAT Bad Debt Regulations; and
(e) The expression "Goods" shall where the context so admits include any
services,
23. (a) No Credit Limit shall be in effect until written notice thereof on
LND's official form shall have been received by the Vendor.
(b) LND may (in its absolute discretion) by oral or written notice to the
Vendor at any time reduce or cancel any Credit Limit and any such
change shall take immediate effect except that no reduction or
cancellation shall affect any Receivable which:
(i) shall have arisen from the Delivery of Goods before the receipt
by the Vendor of notice of such cancellation or reduction; and
(ii) was at the time of such receipt within such Credit Limit,
(c) Where two or more Receivables are owing by the same customer they
shall be treated as falling within any Credit Limit relating to that
customer in the order of their respective Due Dates.
(d) When Approved and Unapproved Receivables are owing by the same
customer (except as provided in Clause 23(e)) LND shall have the right
to appropriate any payment made by the customer and any monies
received from a guarantor or indemnifier in respect of the customer's
obligations and any credit or allowance granted by the Vendor to the
customer in satisfaction of any Approved Receivable in priority to any
Unapproved Receivable owing by that customer notwithstanding any
contrary appropriation by the customer.
(e) After the Date of Insolvency of any customer any dividend or other
benefit received by LND in reduction of any Receivable owed by such
customer shall be appropriated to the Approved and Unapproved
Receivables proportionately in accordance with the amounts of Approved
and Unapproved Receivables owing by the customer at the Date of
Insolvency.
24. (a) LND may in its absolute discretion by written notice to the Vendor
authorise the Vendor itself to establish in relation to any customer
a Credit Limit not exceeding the Discretionary Limit stated in such
notice. The Vendor shall exercise due care and prudence in the
establishment of every Credit Limit pursuant to this Clause.
(b) LND may at any time in its absolute Discretion by written or cal
notice to the Vendor increase reduce or cancel the Discretionary Limit
and such variation or cancellation shall take effect forthwith and any
such reduction or cancellation shall have the effect of an equivalent
reduction or cancellation (in accordance with the provisions of Clause
23(b)) in every Credit Limit established pursuant to Clause 24(a) and
remaining in existence at the time of the receipt of such notice by
the Vendor.
25. (a) The establishment of any Credit Limit by LND shall not import any
responsibility or liability on the part of LND save as speci-
fically provided in this Agreement and LND shall not be obliged to
provide for the Vendor any information or reason on the basis of which
any Credit Limit shall have been established, varied or withdrawn.
(b) The Vendor hereby undertakes that it shall not at any time disclose to
any customer or any third party the amount of or the absence of any
Credit Limit in relation to such customer and to indemnify LND against
all losses costs damages claims interest and expense that LND may
suffer or incur by reason of any breach by the Vendor of the
provisions of this Clause.
26. (a) The Vendor shall promptly disclose to LND any fact or matter which the
Vendor knows or should reasonably have known might influence LND in
its decision whether to establish, reduce or cancel any Credit Limit
or the Discretionary Limit.
(b) Every advice form remitted to LND by the Vendor pursuant to
Clause9(b)(iv) shall be deemed to constitute a warranty that every
Receivable included in such advice form shall have arisen from a
contract of sale or for services which provides for payment by the
customer on terms not more liberal than those specified in section 7
of the Schedule hereto.
(c) The Vendor hereby undertakes to exercise such care and prudence in
granting credit to and withholding credit from its customers and to do
such things (including any requisite legal proceedings) in procuring
or attempting to procure payment of all Receivables as would be
exercised and done by a reasonably careful and prudent supplier of
Goods of the nature of those sold by the Vendor. In particular
(without prejudice to the generality of the foregoing) the Vendor
shall not (without the prior written consent of LND) effect the
delivery of further Goods to any customer when any Receivable owing by
that customer shall remain unpaid after the sixtieth day after the Due
Date of such Receivable or when the Vendor has knowledge that such
customer is in financial difficulties.
27. In addition to and without prejudice to LND's rights and the Vendor's
obligations pursuant to Clauses 9(b)(vi) and 13 hereof the Vendor hereby
undertakes:
(a) that, if any Receivable shall not be paid within sixty days after its
Due Date or in the event that the Vendor has knowledge of the
financial difficulties or threatened Insolvency of any customer, the
Vendor shall notify LND (in such form and manner as LND may from time
to time prescribe) within ten days of the end of such sixty days or
such event as the case may be giving full details of the unpaid
Receivables and the circumstances giving rise to such notification;
and
(b) at any time after such notification to do such things and to take,
continue, discontinue or abandon such proceedings as LND may prescribe
for the purpose of enforcing payment of and collecting such Approved
Receivable; and
(c) upon the Date of Insolvency of any customer by which any Approved
Receivable shall be owing:
(i) immediately to notify LND (in such form and manner as LND may
from time to time prescribe) of the nature of the Insolvency and
the particulars of the Receivables (whether Approved or
Unapproved) which shall be owing by any customer at the Date of
Insolvency; and
(ii) in the absence of notice to that customer in accordance with any
request by LND pursuant to Clause 9(b)(Ii) and except where the
provisions of Clause 30(b) apply promptly to submit proof of debt
in respect of such Approved Receivable in the insolvent estate of
such customer and (whether or not such notice shall have been
given) to give to any person, who has the duty to administer the
insolvent estate of such customer, irrevocable instructions in
such form as LND shall require that any dividends or other sums
of money payable out of such estate in respect of any proof or
claim by the Vendor or LND in or against the estate of such
customer shall be paid only to LND; and
(d) upon and after the Date of Insolvency of any customer by which any
Approved Receivable shall be owing (m addition to and without
prejudice to the provisions of Clause 27(c)) to take such other action
as shall be available to the Vendor and to execute such other
documents as shall be requisite (and, if so required by LND, in either
case as instructed by LND) for the purpose of procuring any dividends
from the estate of such customer for the benefit of LND or otherwise
recovering payment of such Receivable or mitigating any loss which LND
may suffer by reason of such Insolvency.
28. (a) If at any time the Vendor shall be in breach of any of its obligations
pursuant to this agreement in relation to any Receivable owing by a
customer then any Credit Limit established in relation to that customer
shall be cancelled forthwith without the requirement of notice or other
formality and all Receivables owing by such customer at such time shall
rank as Unapproved Receivables notwithstanding that any of them may
previously have been Approved Receivables. Following the cancellation of
any Credit Limit in relation to any customer pursuant to this clause the
Vendor shall not apply to LND for the establishment of any Credit Limit in
relation to such customer until the breach giving rise to such cancellation
has been redressed.
(b) Any Receivable arising from the Delivery of Goods made to a customer
while any other Receivable owing by such customer remains unpaid after
the fortieth day after the Due Date of such other Receivable shall
rank as an Unapproved Receivable (notwithstanding any limit
established in relation to such customer) until such time as there
remain no Receivables owing by such customer unpaid after the fortieth
day after the respective Due Dates of such Receivables.
29. (a) LND shall refrain from making any demand pursuant to Clause 6 hereof in
respect of any Approved Receivable until the sixtieth day after its Due
Date and shall not make any such demand thereafter so long as such
Receivable remains Approved and provided that the Vendor shall have
instructed a solicitor approved by LND to take proceedings for the recovery
(for the benefit of LND) of all sums due for payment by the customer which
include such Receivable so that such instructions shall be effective before
such sixtieth day or such other day as LND shall have agreed in writing.
(b) For the avoidance of doubt LND shall be entitled to exercise its
rights in full pursuant to Clause 6 hereof in respect of any Approved
Receivable which subsequently becomes Unapproved.
(c) The amount (as advised to LND pursuant to Clause 9(b)(iv)) of every
Receivable which shall rank as an Approved Receivable on the thirtieth
day after the Date of Insolvency of the customer by which such
Receivable shall be owing shall be credited to the Memorandum
Discounting Statement on such thirtieth day.
(d) The amount of every Receivable credited pursuant to Clause 29(c)
hereof in respect of which LND shall have subsequently exercised its
rights pursuant to Clause 6 hereof shall be debited to the Memorandum
Discounting Statement so that such debit shall be deemed to have taken
place on the date of the relevant credit.
30. (a) The Vendor shall be liable on notice from LND to accept the
reassignment from LND of any Receivable which Is Eligible for a Refund
and LND undertakes to execute and deliver to the Vendor a written
assignment of any Receivable (the subject of any such notice) of which
a previous written assignment shall have been given by the Vendor to
LND. In consideration of any such reassignment of a Receivable the
Client shall be liable to pay to LND forthwith a sum equivalent to the
amount of value added tax (included in such Receivable) that the
Vendor may be able to claim under the VAT Bad Debt Regulations.
(b) Upon the ownership any Receivable which is Eligible for a Refund
becoming re-vested in the Vendor then the Vendor shall use its best
endeavours to recover any sum of money or other benefit available for
the reduction of the amount of such Receivable including any dividend
from the estate of the Debtor. The Client shall forthwith upon its
recovery pay to LND such proportion of any such sum of money and
transfer to LND such proportion of any such benefit as shall be due to
LND pursuant to the provisions of Clause 23(e). Pending its payment of
transfer the Vendor shall hold the said proportion of such sum of
money or benefit in trust for LND.
(c) Notwithstanding and without prejudice to the Vendor's obligations
pursuant to Clause 30(b) LND shall be at liberty to complete and lodge
in the Vendor's name a proof or statement of debt in the Insolvency of
the customer in relation to any Receivable reassigned to the Vendor
pursuant to Clause 30(a).
31. Where in any place outside England and Wales the meaning of a word or
expression used in this Agreement is to be considered and that expression
has no counterpart in that place then that expression shall (unless the
context otherwise requires) have the meaning of the closest equivalent
thereto in the place concerned.
The COMMON SEAL of Lapland U.K. )
Limited was affixed to )
this Deed in the presence of: )
Michael J. Neame
Director/Company Secretary ) /s/ Michael J. Neame
Martin Clarke
Director ) /s/ Martin Clarke
The COMMON SEAL of LOMBARD )
NATWEST DISCOUNTING LIMITED )
was affixed to this Deed in the )
presence of: )
Robert J. Smith
Director ) /s/ Robert J. Smith
A. Darlings
Authorised Signatory ) /s/ A. Darlings
THE SCHEDULE
1. NAME AND REGISTERED OFFICE OF THE VENDOR:
Lapland U.K. Limited.
4 Faraday Court
Rankine Road
Basingstoke
Hampshire. RG24 0PF.
REGISTERED NO. 02520180.
2. COMMENCEMENT DATE:
3. COMMISSION RATE: 0.5%.
4. DISCOUNTING CHARGE RATE- OVER NATIONAL WESTMINSTER BANK
PLC BASE RATE: 2%.
5. RECEIVABLES WITHIN CREDIT LIMITS WHICH ARE NOT APPROVED:
a) Receivables in respect of Cash sales, sales to associated
companies, Mtech Partnership, proforma sales, sales subject to
sale or return or evaluation and credit card sales.
b) The first (pound)500 of receivables taken in order of their
respective invoice dates owing by any one customer at any one
tinge; and
c) 20% of the remaining balance.
6. DISCRETIONARY LIMIT: (pound)5,000.
7. VENDOR'S TERMS OF SALE: 30 days.
8. DAY OF MONTH RETURNS ARE DUE BY: By 15th day of month following.
9. BASIS ON WHICH ANALYSIS OF RECEIVABLES IS TO BE AGED: From invoice date,
separately identifying outstanding amounts by customer, showing customer
balances as follows: total, up to 30 days old, 31-60 days old, 61-90
days old, 90 days plus old, plus a summary aging of the totals of each
of these categories.
10A. SPECIAL CONDITIONS:
(i) Prior to commencement, LND are to receive Personal Guarantees Re: Breach
of Warranties from Michael J. Neame and Martin Clarke and the corporate
guarantee of Mobile Planet Limited.
(ii) Prior to commencement, LND are to receive a waiver from National
Westminster Bank Plc in respect of the book debts of Lapland U.K.
Limited in a form satisfactory to LND.
(iii) Cash sales, sales to associated companies, sales to Mtech partnership,
proforma sales, sales subject to sale or return & evaluation and credit
card sales are to be excluded from the Invoice Discounting Agreement.
(iv) LND are to receive monthly management accounts within four weeks of
month end, commencing with month ended 31 st August 1996.
(v) LND are to register a fixed charge over the book debts.(pound)250 +VAT
to be charged upon commencement in this respect.
(vi) LND to have sight of and satisfaction with certified figures of Mtech
Partnership within four weeks of commencement.
10B. OPERATIONAL REQUIREMENTS:
(i) LND will waive the standard requirement for copy invoices subject to
the provision of suitable sales day book and credit note listings.
(ii) A monthly bank reconciliation is to be maintained.
(iii) Invoices must not be discounted until the goods have been despatched.
(iv) LND require confirmation that duplicate sales ledger records are backed
up daily and stored off site at all times.
(v) Sales invoicing to be cross referenced with delivery documentation.
(vi) Aged analysis reports to be produced on an aged by invoice date basis,
showing invoices and total balance aged correctly. Aged debtors and
aged creditors to be produced as two distinct listings.
(vii) Excluded sales to be ledgered separately.
11. COUNTRIES: United Kingdom.
12. APPROVED CURRENCIES: Sterling (pound).