Common use of Authorization of US Line of Credit Commitment; Loan Terms Clause in Contracts

Authorization of US Line of Credit Commitment; Loan Terms. Within the limits of the Facility Commitment and in accordance with the procedures set forth in this Agreement and the Servicing Agreement, the Sponsor may authorize the Servicer to establish a US Line of Credit Commitment in favor of a US Franchisee who meets the credit criteria established by the Sponsor. The amount of each US Line of Credit Commitment shall be determined by the Sponsor but shall not be less than $100,000. Pursuant to the US Line of Credit Commitment the Servicer shall agree to make Advances to the US Borrower thereunder. Each US Line of Credit Loan shall bear interest at the Borrower Rate designated by Sponsor in the applicable Funding Approval Notice, and interest shall be payable on each Borrower Payment Date and on the Maturity Date of such US Line of Credit Loan when all principal and interest shall be due and payable in full. Each US Line of Credit Loan may be prepaid in full or in part on any Business Day, without premium or penalty. The Loan Term of each US Line of Credit Commitment shall be, initially, one year, but shall automatically renew unless terminated by ninety (90) days’ prior written notice by Servicer to the US Borrower prior to the first anniversary date and may thereafter be terminated at any time by Servicer upon ninety (90) days’ prior written notice by Servicer to the US Borrower; provided that the amounts outstanding thereunder shall be allowed to term out over the Amortization Period as provided below. The proceeds of each Advance made pursuant to the US Line of Credit Commitments shall be used solely to purchase inventory, and to the extent permitted by Sponsor, to pay state sales and use taxes and freight charges. At the end of each month, the aggregate Advances made to each US Borrower during such month (net of any prepayments during such month) shall be amortized (in accordance with a straight-line amortization schedule) over the Amortization Period. In the event that the US Line of Credit Commitment of any US Borrower is terminated by the Servicer as provided above, such US Borrower shall, notwithstanding the other provisions of this Section 2.1(b), amortize all outstanding Advances over the Amortization Period (in accordance with a straight-line amortization schedule), with all Advances due and payable in full no later than 24 months after termination. In the event that a US Borrower terminates its US Line of Credit Commitment, all amounts advanced to such US Borrower shall be due and payable in full on the termination date, together with all accrued and unpaid interest thereon. Each US Borrower shall agree to pay a commitment fee on its unused US Line of Credit Commitment in an amount to be determined by the Sponsor but in any event not to exceed 1.00% per annum, such commitment fee to be paid quarterly, in arrears.