General Terms and Conditions

I- GENERAL PROVISIONS ON LENDING 

1- The Borrower is liable for assigning any receivables arising/ arised and to be transferred under the facility agreement immediately after signing the deed of assignment to Grassroots Business Partners INC (“GBF”) (as defined under the Facility Agreement). In addition to the invoices, the Borrower shall be responsible for the transfer and delivery/upload of any other documents related to the receivable, order form, reports, loading, transportation, insurance documents, if in existence the payment instruments like cheques and bonds and the securities to GBF or its Agent in compliance with the limitations.

The Borrower irrevocably agrees, acknowledges and undertakes that his receivables against  invoices which have been transferred or to be transferred to GBF are based on a real and valid trade relationship, he has realized the transportation of the goods /services for the receivables occurred and he shall realize the transportation of the goods/service for the receivables to be occurred, the receivables subject to invoices are included in his records, in case of any cancellations or returns of invoices, he shall inform GBF immediately and if replacement invoices are issued he shall send the new invoices to GBF upon the demand of GBF, he shall submit the invoices, the originals of all documents and the bill stubs to GBF immediately and keep them ready for inspection. 

2- The Borrower has to state to his debtors that the whole or some part of the receivables have been transferred to GBF, the maturity, payment place, title of GBF, his open address in the invoices or copies of the invoices, or stick the label containing the said records or include a seal bearing these statements or include this declaration in any other manner, and if possible clearly state any conventional interest, default interest rates to be applied by the payment date. If a separate written agreement or a frame agreement is executed between the Borrower and his debtor, a copy of this agreement shall be sent to GBF, too.  The liability to notify the debtor about the transfer of the receivables to GBF shall solely belong to the Borrower and the Borrower shall fully and effectively (on a full and unqualified indemnity basis) indemnify and hold harmless GBF from and against any loss, cost, claim, demand, expense, proceeding and/or damage suffered or incurred by GBF arising in any way out of or in connection with any breach of or failure by the Borrower to observe and perform the Borrower’s duties and obligations under or pursuant to this terms and conditions .

3- Unless a written consent of GBF has been obtained, the Bororwer is responsible for securing the payment of the receivables subject to the transfer. These securities might be in kind, personal or negotiable instruments that are issued, endorsed and delivered to GBF as securities. 

4- Furthermore, the Borrower is responsible for submitting a security at the amount and type demanded by GBF to secure the financing made available to him, fees, commissions, interests and any costs and their ancillaries. If the Borrower and/or any one of the debtors delays his payments, becomes insolvent or there is a security gap or it is foreseen that the debts cannot be paid on their maturity in full, GBF shall have the right to demand the replacement of the securities and/or submission of additional securities that are deemed sufficient. 

Such securities shall secure any kind of and all receivables of GBF arising from or to be arisen from the Borrower, even if the agreement is extended, renewed or terminated for any reason. GBF’s right to demand the receivables and losses exceeding security amounts and their ancillaries is saved.  In order to distinguish the payment tools, this issue should be clearly recorded on the valuable instruments transferred, endorsed or delivered to GBF for security purposes. If the Borrower claims that any valuable instruments not containing security records have been given for security purposes, he has to submit the Agreement executed for this purpose and signed by GBF.

5- The Borrower irrevocably warrants the existence of the receivables to be transferred, his authority on the disposal of the receivables under the agreement coverage and payment of them in full, and in case of non-payment of the transferred receivables for any reason, the Borrower undertakes to pay the financing made available for him, its ancillaries and the loss and damages suffered by GBF for this reason. 

6- The Bororwer hereby agrees to abstain from any acts avoiding or delaying the payment of the receivables transferred to GBF or performance of his deeds under this agreement. Any kind of objections and pleas or any other barters, settlements stem from the basic relation between the Borrower and his debtor or from the receivable shall neither hinder the performance of the liabilities of the Borrower against GBF nor cause any delay on the performance of these liabilities. The Borrower warrants that the delivery of the goods shall be taken by the debtor without any hesitation, they shall be free from any material or legal defects, sale, export or any other transactions shall be performed and realized in compliance with the procedures and the legislations, and GBF shall not be encountered with an objection and/or plea for these reasons.

7- The Borrower  undertakes to send all kind of information about his operations, sales and debtors and the account summaries, balances and etc. quarterly and at the end of the financial period or when it is demanded to GBF, and the information and documents published in his website are true and correct. Furthermore, he gives his permission to GBF to perform audits on any and all of his records, documents and books or have such an audit performed by independent institutions. The Borrower shall immediately inform GBF on the new investment initiatives, taking new shareholders and the developments or changes effecting the management of the institution, the lawsuits brought against him by the third parties, prosecution procedures against him, developments that might negatively affect the solvency of the Borrower and the debtors and the securities. Submission or publishing of the information and documents required to be submitted by the Borrower to GBF pursuant to the provisions of this Article or the Agreement, not making any demands by GBF on this issue shall not eliminate or diminish the liabilities and responsibilities of the Borrower under the Agreement. The breach of the liability of giving information even upon demand shall be deemed as a severe breach of the Agreement. 

8- If the goods sold are delivered at any place other than the Borrower’s location without any liability on the buyer (the debtor of the Borrower), the Borrower shall be responsible to insure the goods against all risks provided that all the premiums and the costs are paid by him. Under this provision, the Borrower transfers the insurance indemnification to GBF in advance.  The Borrower undertakes to record this transfer issue to the insurance policy. Transfer of the insurance indemnification to GBF does not require making the Borrower liable for this amount for the relevant payment and GBF shall have the right to prosecute the Borrower, turn the securities into cash in order to close the financing made available and its ancillaries and demand to any exceeding losses.

9- Before using his rights arising from the basic relations with his debtor (notification, warning, lawsuit, termination, etc.), the Borrower is responsible for giving the required information and documents to GBF. Likewise, the Borrower shall immediately inform GBF on the lawsuits, demands, protests, warnings made by the debtor against him on the basis of the basic relations between them. If any changes, termination, transfer of the legal transaction between the Borrower and his debtor results with the non-payment or expiration of the transferred receivables partially or as a whole, the Borrower shall be responsible for returning or paying back the financing obtained by him for this receivable immediately together with the processing fee, interest and all ancillaries notified by GBF.

10- If the Borrower cannot settle any controversies that might occur with his debtor and result with the non-payment of the transferred receivables partially or as a whole, or delay on the payments before the payment date or it can be foreseen that settlement of these controversies shall exceed the maturity dates, the provisions of Article (9) shall be applied. On the other hand, the Borrower cannot make any agreements or renewals with his debtor in such a manner that inversely effect or cause a delay on the payments related to the receivables subject to the transfer.

11- Provided that the provisions of Part II hereof are saved, GBF shall have the right to back assignment (recourse) of all the receivables unpaid on their due dates partially or as a whole unless a Limit Approval Notification (LOB)/ Guarantee (credit cover) letter was sent and the Borrower  shall be liable for accepting  recourse of these receivables and return the financing made available back together with ancillaries. Returns are made in compliance with the provisions of Article (I/9).

The collection service rendered by GBF and/or its Agent for the transferred receivables is limited with the acceptance of the actual payments made by the debtor with his own will. Since GBF is a stranger to and not a party of the legal relations between the Borrower and his debtor, unless otherwise agreed by the parties, when the factoring guarantee does not enter into force, expired or excluded from the coverage of this warranty, GBF shall have no liability to send any notifications, warnings or protests against the debtor or prosecute the debtor or commence litigation against the debtor. Likewise, GBF is not required to examine any kind of objections and pleas made by the debtor against him on the basis of the basic relations and the receivables and prosecute any litigation, lawsuits, measures, demands and other transactions. The Borrower shall have no right to make any demands or claims against GBF. This waiver to the Borrower shall also be valid for the cases where the application of the remedies is subject to a term approved by GBF. 

12- An action brought or legal proceedings started against the debtors of the Borrower’s receivables that are not paid partially or as a whole, does not mean that the return or payment demand of the financing made available to the Borrower accrued fees, interest, expenditure and commission receivables to GBF postponed after the conclusion of the lawsuit or the proceedings. GBF might demand the immediate payment of the receivables by the Borrower provided that collection is not repeated.

13- If the Borrower executes sale agreements in instalments or provided that the title is saved and the receivables’ warranty is valid, the Borrower shall be liable for making all the intention declarations, perform the legal transactions, and when required transfer the indirect ownership, title of the goods to GBF in order to transfer his legal and contractual powers stem from the Agreement to GBF upon demand.

14- The Borrower has to restrain from any acts that might cause damage to GBF. Such behaviours of the Borrower or the acts not in compliance with the good faith shall be deemed as a severe breach of the Agreement.

15- When the Borrower  or any one of the debtors are subject to payment difficulty, delays their payments, makes a defect claim, or the receivables are not paid due to force majeure or extraordinary situations, GBF shall have the right not to make any financing available even if there is free space in the determined and allocated limit. GBF is not required to examine whether the claims made by the debtor are right or not. In case of any disputes between the debtor and the Borrower about the receivable or the basic relation, GBF might restrain from making financing available, freely transfer the subject receivable back at any time. Provisions of Articles (8,9, 10) shall be applied for this issue.

16- Making financing available and allocating limit for the debtors by GBF shall not mean any warranty has been given to the Borrower in any way.

17- GBF shall have the right to change the transaction volumes, financing rates determined and notified to the Borrower in written at any time freely and the commissions, fees and interest rates under the frame of the changes in the market and cost conditions, economic crisis or changes in the economic conditions. For the aged receivables, a separate commission shall be accrued until all the receivables are paid in full. 

18- The collections from the debtors are allocated for closing the financing made available and the other payables of the Borrower. 

19- The Borrower   agrees, acknowledges and undertakes that he shall not disclose any information on the provisions of this agreement and its annexes or its application to the third parties, all these issues are confidential information related to the trade operations of GBF, and they shall indemnify and damage suffered by GBF as a result of disclosure of any such confidential information. On the other hand, the Borrower hereby agrees and undertakes that GBF shall have the right to freely share any information learned or to be learned as a result of the facility agreement.

II- AGREEMENT TERM, TERMINATION AND ITS EFFECTS

1- The agreement shall be in force as of the execution date for 1 year. Either party shall have the right to terminate the agreement freely by sending a 1 (one) month prior written notification to the other, provided that the cases where GBF is authorized to terminate the agreement immediately under this agreement are saved. 

2- In case of the Borrower’s acts in contrary with the agreement or occurrence of negative events on his financial status or credibility, GBF shall have the right to terminate the agreement immediately without granting any extension. There is no need to have a decision on the bankruptcy or the determination of the insolvency of the Borrower for the disposal of such termination right by GBF. 

III- OTHER PROVISIONS TO BE APPLIED FOR EXPORT AND IMPORT FINANCING

1- The Borrower hereby agrees, undertakes and warrants acting in compliance with the legislations on the import and export regimes and the FOREIGN EXCHANGE legislations and any possible amendments on the legal legislations and to bring the fees of the goods and services to Kenya. Any kind of and all taxes, duties, stamps, fund expenditures, fines and other such costs accrued pursuant to the provisions of the existing legislations or the modifications to be made in the future due to the breach of these liabilities by the Borrower and any possible increase on them and any other costs imposed or accrued related to these and their ancillaries shall be paid by the Borrower.

2- On the other hand, the Borrower irrevocably agrees and acknowledges that the legal and punitive responsibility for the fines that might be accrued pursuant to the provisions of the Article (III/1) above and their interests and ancillaries shall belong to him and if any liability is applied to GBF for these issues due to the provisions of the legislations, the Borrower hereby undertakes and warrants to recover GBF immediately from any legal or punitive liabilities and their ancillaries before the public and private bodies and institutions, official authorities, local administrations without any need for litigation and issuance of a court order without waiting for the conclusion of the lawsuits. 

3- The risks that might stem from the increase or decrease on the foreign currency rates shall be borne by the Borrower. The Borrower hereby agrees and undertakes to pay for any increases on the expenditures related to these risks and other expenditures like commissions etc.  

IV- GBF OBLIGATIONS TO ITS OWN LENDER

GBF has entered into Agreement with its own Lenders and under such Agreement, GBF is mandated to inform its Borrowers of certain terms and conditions which can be accessed on this link GBF Lenders terms

V- DATA PROTECTION AND CONSENT TO SHARE BORROWER’S DATA

1. CREDIT REFERENCE BUREAUS

1.1   The Borrower expressly consents and allows the Lender to forward personal data and full file credit information to licensed credit reference bureaus (hereinafter “CRB”) in accordance with the Credit Reference Bureau Regulations, 2013.

1.2  By entering into this agreement, the Borrower authorizes the Lender to access and query the Borrower’s credit information from any of the licensed CRBs and to receive credit reports/scores from any of the licensed CRBs on behalf of the Borrower in order to assess the Borrower’s creditworthiness, wherever and whenever the Borrower applies for a new facility and during the persistence of such facilities in order to assist the Lender to accomplish its objectives and to enforce its rights under this agreement. The Borrower further consents to its credit information being shared with the licensed credit reference bureaus.

1.3   This consent shall not be withdrawn during the period in which the Borrower’s application is pending to or the Borrower has an outstanding balance with the Lender

1.4  This consent shall automatically terminate upon clearance of all existing loans by Borrower to the Lender and as long as the Borrower has no outstanding facilities with the Lender.

2.   SHARING OF THE BORROWER’S DATA WITH OTHER PATNERS

2.1 The Borrower hereby consents to the use and display of the Borrower’s profile, name, logo and information by the Lender and the Lender’s funders, promoters, partners and investors and to the publication of the same on websites, marketing material or types of media and publications.

2.2The Borrower further authorises the Lender to share with such parties any of the Borrower’s information and the Borrower hereby expressly waives any right to data protection as state in the Data Protection Act on the use and disclosure of the Borrower’s information by the Lender. Save for sharing the information as aforesaid, the Lender shall adhere to the provisions of the Data Protection Act.

VI. ADHERENCE TO ENVIRONMENTAL, SOCIAL, GOVERNANCE, FAIR LABOUR PRACTISE PRINCIPLES

The Borrower shall adhere to the following principles:-

1. The Borrower shall ensure that it adopts sustainable principles that ensure environmental protection for sustainable future generations, including use of safe energy, environmental protection and conservation and minimising environmental and social risks that threaten the sustainable use of the environment.

2. The Borrower represents and warrants that is not engaged in and will not engage in any practice inconsistent with the rights set forth in the United Nations Convention on the Rights of the Child, including Article 32 thereof, which, inter alia, requires that a child shall be protected from performing any work that is likely to be hazardous, or to interfere with the child's education, or to be harmful to the child's health or physical, mental, spiritual, moral or social development.

3. The Borrower shall institute, maintain and comply with internal procedures and controls satisfactory to GBF, for the purpose of:-

(a) preventing the Borrower from being used for money laundering, the financing of terrorist activity, fraud, or other corrupt or illegal purposes or practices; and

(b) ensuring that the Borrower will not enter into any transaction with, or for the benefit of, any individuals or institutions named on lists of sanctioned persons promulgated by the United Nations Security Council or its committees' resolutions in connection with money laundering or anti-terrorism matters.

(c)The Borrower shall promptly upon becoming aware of (a) any litigation, administrative, regulatory or criminal investigations or proceedings before any authority or arbitral body which has or may reasonably be expected to have a material adverse effect, or (b) any litigation, administrative, regulatory or criminal investigations or proceedings or freezing of assets by any authority involving the Borrower or its employees with regard to money laundering or financing of terrorism, notify GBF of that event specifying the nature of the action, litigation, investigation or proceedings and the steps the Borrower is taking or proposes to take with respect thereto.

VII. MISCELLANEOUS

1- The  Borrower hereby agrees and acknowledges that in case of any disputes arising from the agreement, only the GBF’s documents and records, microfilm, microfiche, computer and electronic media communication records shall be the final, exclusive, sole and valid proof whether they have been confirmed or not.

2- In case of any severe breach of the agreement by the Borrower or in any other cases defined hereunder, GBF shall be authorized to settle or return any kind of payment tools and securities into cash without any need to obtain a decision and the determination of the receivable amount by the authorized litigation organs.

3- The Borrower agrees and acknowledges that he is liable for the submission of the articles of incorporation, representing and binding powers and the sign circulars, any changes on the representing and binding powers and authorities to GBF together with the relevant documents on time. 

The Borrower agrees and undertakes that he shall be responsible for any damage suffered by GBF since the changes on the documents defined hereunder has not been notified in written on time and/or due to the transactions performed by fake or falsified power of attorneys. 

4- The Borrower agrees to pay the costs and expenditures taxes related to the account summaries sent by GBF or for any other reasons for the application of the agreement. 

5-The Borrower agrees to pay any banks costs and the expenditure taxes incurred during the collection of the receivables transferred to GBF or making the financing available or any other payments. 

6-The Borrower acknowledges and undertakes that in any transactions performed or to be performed with GBF even if they are left at the demand stage, he acts and/or shall act on the name of and on behalf of himself, no transactions have been performed or to be performed on the account of the other persons, he was informed by GBF on the requirements of the relevant legislation and in case of occurrence of any such events and/or any breach of the the relevant legislations in force, he shall send a written notification to GBF. 

In case of any changes on the ID, address, telephone and shareholding structure information submitted to GBF, the Borrower agrees and undertakes to notify the changes immediately to GBF without any delay. 

7- The Borrower agrees and acknowledges that he shall notify GBF on the change of the shareholding structure in written together with all the required information and documents before any changes on the shareholding structure or modifications on articles of incorporation resulting with the loss of the management powers by the dominant shareholder of the Borrower and also submit any documents and information demanded by GBF immediately. 

If such a notification has not been made before the change of the shareholding structure or the loss of the management powers by the dominant shareholder, the Borrower hereby agrees and undertakes to notify GBF immediately in written after the change on the shareholding structure and inform GBF on the articles of incorporation modifications related to the changes of the shares. The Borrower hereby agrees that not notifying the change on the shareholding structure or the change of the dominant management powers to GBF immediately or not giving the information and documents demanded by GBF shall be deemed as a severe breach of the agreement and might result with the demand of immediate return of the financing and its ancillaries. 

9- The Borrower agrees and acknowledges that the terms and conditions together with the facility Agreement has been read and understood.