Payments

Save as required by law or any competent authority, all payments under this Letter of Credit shall be made:

A. without set-off or counterclaim whatsoever; and

B. free and clear of any deduction or withholding for or on account of any taxes.

In addition, all payments, under this Letter of Credit shall be made in pounds sterling and in immediately available funds and for value on the due date.

Clause 4 contains specific provisions relating to payments made under the letter of credit and the possible application of any taxes or increased costs in relation to those payments. Briefly, the Issuer is obliged to make any payments owed to the Beneficiary under the letter of credit, gross. This means that in the event that the Issuer was required by any law to make any deduction or withholding on account of tax from any amounts payable under the letter of credit then the amount of deduction or withholding would be for the account of the Issuer alone. In other words, the Issuer would still be liable to pay all amounts under the Letter of Credit gross, as if such deduction or withholding had not been made. Therefore, this represents an additional cost for the Issuer as its actual liability in these circumstances would be the amounts payable under the letter of credit plus the amount of any required deduction or withholding.

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