4 Code Credit Limits

(f) the Applicant User shall have complied with the requirements of the New Entrant Readiness Pack and the Authority shall have given notice to the Operator confirming the Authority is satisfied the Applicant User has made adequate preparation for operation as a User in a specific Tenure Category.

3.3 An Applicant User may accede to the Framework Agreement before the requirements of paragraph 3.2(e), is satisfied.

3.4 Where in accordance with paragraph 3.3 an Applicant User has acceded to the Framework Agreement, the Applicant User and the Operator shall be bound by this Section O and the Applicant User shall for such purposes only be treated as a User.

3.5 The Applicant User will become a User with effect from the Day ("User Accession Date") which is 3 Business Days after satisfaction of the last of the requirements under paragraphs 3.1 and 3.2 to be satisfied.

3.6 Upon the Applicant User becoming a User pursuant to paragraph 3.5 the Operator will so notify the Applicant User, specifying the Operator's notice details, including the notice details of any Agent appointed by the Operator for the purposes of paragraph 8.3.

3.7 Where the Supplier's Licence held by a User limits or restricts the premises to which the User may arrange for the conveyance of gas by the System or in any other way limits or restricts the activities which the User is authorised to carry on:

(a) the User shall be solely responsible for compliance with such limit or restriction and (subject to paragraph (b)) the Operator shall not in the implementation of the Code as respects such User be concerned with such limit or restriction; and

(b) the Operator shall be at liberty in its discretion to (but shall not be required to) withhold from the User any right or entitlement pursuant to the Code so as to give effect to such limit or restriction.

3.8 Unless expressly otherwise provided in the Code or agreed by the Operator, a person may only be one User, and accordingly a person who is for the time being a User may not make a further application to be admitted as a User.

3.9 For the purposes of the Code the "New Entrant Readiness Pack" is the document of that name jointly prepared and published by the Operator and the Authority setting out the preparatory steps to be undertaken by an Applicant User in order to become a User.

3.10 Upon the Applicant User becoming a User pursuant to paragraph 3.5 the Operator will assign the appropriate Tenure Category as specified in paragraph 3.2(f) for the purpose of the User submitting a Supply Meter Point Confirmation to the Operator to become the Registered User at a Supply Meter Point.

4 Code Credit Limits

4.1 The Operator will, in accordance with the Code Credit Rules, determine and assign to each User a Code Credit Limit, and will keep each User informed of its Code Credit Limit (as revised in accordance with paragraph 4.8) for the time being.

4.2 The "Code Credit Rules" are the rules from time to time established and revised by the

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Operator and issued to Users setting out (inter alia):

(a) the principles on which the Operator will assess and from time to time revise (in accordance with paragraph 4.8) its assessment of the credit-worthiness of Users (and persons providing surety for Users) and establish Code Credit Limits; and

(b) the basis on which a User may (with a view to increasing its Code Credit Limit) provide surety or security for Relevant Code Indebtedness, or (with a view to reducing its Relevant Code Indebtedness) make prepayments to the Operator.

4.3 The Code Credit Rules do not form a part of the Code and (but without prejudice to the further provisions of this paragraph or to anything done pursuant to the Code Credit Rules) nothing in the Code shall make compliance with such rules an obligation of the Operator or Users.

4.4 Nothing in the Code or the Code Credit Rules shall constitute any duty of care or other obligation on the part of the Operator (whether to or for the benefit of the User in question or Users in general) in relation to the implementation of the Code Credit Rules or the provisions of this paragraph 4.

4.5 For the purposes of the Code:

(a) a "Code Credit Limit" is an amount representing a User's maximum permitted Relevant Code Indebtedness;

(b) "Relevant Code Indebtedness" is:

(i) the aggregate amount, including Reconciliation Energy Charges, for which a User is at any time liable to the Operator pursuant to the Code, determined on the basis of amounts accrued (and in accordance with paragraph (c) where applicable) and irrespective of whether such amounts have been invoiced under Section K or (where invoiced) have become due for payment; less

(ii) any amount which has been paid to the Operator by the User by way of prepayment, on the basis that the Operator may apply such amount without the User's consent in or towards payment of amounts referred to in paragraph (i), and which has not yet been so applied;

(c) for the purposes of paragraph (b)(i) a User's liability for Capacity Charges in respect of a Day shall be treated as accruing on such Day; and

(d) for the purposes of paragraph (b)(i) a User's liability for Reconciliation Energy Charges or Commodity Charges on a Day shall be treated as accruing on the 6th Day after such Day.

4.6 For the avoidance of doubt, the amount of a User's Relevant Code Indebtedness shall be determined by reference to the relevant provisions of the Code, and nothing in the Code shall be construed as withdrawing from a User any right to dispute whether the Operator has correctly calculated such amount in any case, or from the Operator any right to dispute the validity of any Invoice Query submitted by any User.

4.7 Without prejudice to paragraph 4.6, where a User has submitted an Invoice Query in accordance with Section K paragraph 4 in respect of any Invoice Document the Operator will

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review and give due consideration to such Invoice Query before taking any steps pursuant to paragraph 4.12.

4.8 A User's Code Credit Limit may from time to time be reviewed and revised, in accordance with the Code Credit Rules at any time (but in any event at least once every twelve (12) months), on notice of not less than 15 Days (or any lesser period agreed by the User) to the User:

(a) at the Operator's or the User's request;

(b) where any published credit rating of the User or any person providing surety for the User is revised downwards; and

(c) where (but without prejudice to any requirement of the Code Credit Rules) any instrument of surety or security expires or is determined.

4.9 Where a Supplier of Last Resort (as defined in paragraph O6.1 (b)) has been appointed and paragraph O6.2 applies, such Supplier of Last Resort's Code Credit Limit will be reviewed and may be revised by the Operator in accordance with paragraph O6.3.

4.10 Subject to paragraph 4.11, the Operator will bear the costs and fees it incurs (but not any costs incurred by the User) in connection with any review of a User's Code Credit Limit in accordance with paragraph 4.8.

4.11 The Operator will not be obliged to agree to any request of the User under paragraph 4.8 unless the User agrees to reimburse to the Operator the reasonable costs and fees payable by the Operator to any third party in accordance with the Code Credit Rules in connection with such request.

4.12 Where and for so long as the Relevant Code Indebtedness of a User for the time being exceeds 80% of the User's Code Credit Limit, the Operator shall be entitled to reject a Supply Meter Point Confirmation under Section L until such time as the User's Relevant Code Indebtedness is reduced to less than 70% of its Code Credit Limit.

4.13 Subject to paragraph 4.12, where and for so long as the Relevant Code Indebtedness of a User for the time being exceeds 100% of the User's Code Credit Limit, the Operator may give a Termination Notice (in accordance with paragraph 5.11) to the User.

4.14 Any instrument of surety or security provided by a User pursuant to the Code Credit Rules (and whether or not entered into by the User) shall not be a part of the Code; and no provision of or modification of the Code, nor any inconsistency between the Code and any such instrument, and nothing done by the Operator pursuant to the Code, shall prejudice or invalidate any such instrument.

4.15 Where a User has provided surety or security pursuant to the Code Credit Rules the User (or the person giving the surety) may request the Operator to release all or any of such security or agree to a reduction in any maximum amount of such surety.

4.16 Following a request by a User under paragraph 4.15, the Operator will as soon as reasonably practicable and, except where the User also requests a review (by an agency appointed by the Operator for such purposes) and revision of its Code Credit Limit, in any event not more than 10 Business Days after such request, release security, or agree to a reduction in surety, to such

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