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
Fettham 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 encum-
brances 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 Isle of Man and 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 terms 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) all 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 set out
in subclause (a) of this Clause 7, the Vendor will continue
to hold such Receivable in trust for LND and any payments
received in respect thereof wilt 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 occa-
sion 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, set oft 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 movies 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) authorises 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 Vendors 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 deli-
vered 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 arid 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 co-operate 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 movies 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
members voluntary winding up or call any meeting of credi-
tors 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 Agree-
ment 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 se doing, shall
covert 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
it auditors for the time being, and authorises 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 content 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"
(v) 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;
(vi) in the case of voluntary winding up of a company:
the date of the resolution for winding up by the
members of the company;
(vii) in the case of the appointment of a receiver: the
date of his appointment;
(viii) 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 1991 /371);
(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 in
LND on or after the expiry of the period necessary for an
unpaid debt to be the subject of a claim under the VAT Gad
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:
shall have arisen from the Delivery of Goods before the
receipt by the Vendor of notice of such cancellation or
reduction; and
(i) 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 movies 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 Discre-
tionary 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
oral 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 specifically provided in this Agreement and LND
shall not be obliged to provide for the Vendor any informa-
tion 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 (in 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 es-
tablished in relation to that customer shall be cancelled
forthwith without the requirement of notice or other forma-
lity 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 LNG to take proceedings for the
recovery (for the benefit of LND) of all sums due for pay-
ment 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 Eligi-
ble 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 equiva-
lent 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 revested 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.
SIGNED and DELIVERED as a Deed )
by MOBILE PLANET LIMITED )
acting by: Michael J. Neame ) /s/ Michael J. Neame
Director/Company Secretary --------------------
) Director
)
and )
Martin Clarke ) /s/ Martin Clarke
Director -----------------
) Director
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
S.J. Harper
Authorised Signatory ) /s/ S.J. Harper
THE SCHEDULE
1. NAME AND REGISTERED OFFICE OF THE VENDOR:
Mobile Plant Limited.
4 Faraday Court
Rankine Road
Basingstoke
Hampshire. RG24 OPF.
REGISTERED NO.02687500.
2. COMMENCEMENT DATE: 21st October 1996
3. COMMISSION RATE: 0.6%.
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 sales to associated companies, sales
subject to sale or return, maintenance sales cash sales and
credit card sales.
b) The first (pound)25 of receivables taken in order of their
respective invoice dates owing by any one customer at any one
time; and
c) 20% of the remaining balance.
6. DISCRETIONARY LIMIT: (pound)2,000.
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 ageing 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 Lapland U.K. Limited.
(ii) Prior to commencement, LND are to receive a waiver from National
Westminster Bank Plc in respect of the book debts of Mobile Planet
Limited in a form satisfactory to LND.
(iii) Sales to associated companies, salts subject to sale or return,
maintenance sales, cash sales 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 31st 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).