MBC Customer Credit Application

The objective of this policy is to protect the integrity of Mountain Beverage Company’s accounts receivable (A/R) asset through the prudent extension of credit, while supporting sales and volume goals.

This Credit Policy formalizes the rules regarding extension of credit terms to customers who purchase goods and services from Mountain Beverage Co. In order to ensure equity in the extension of credit, all customers have the same standard set of rules applied.

The Credit Policy establishes rules for setting credit terms, mandating payment methods, establishing new customer A/R accounts, managing existing customer A/R accounts, granting exceptions to the policy and approval of credit terms.

Accounts requesting credit terms from Mountain Beverage Co. must complete or amend a current application, signed personal guarantee and client release authorization form before credit terms will be reviewed.

Credit Terms: Credit terms are granted at the sole discretion of Mountain Beverage Co. Credit terms are established to comply with local regulatory requirements. Mountain Beverage products that are not paid for in full may not be used as collateral for any debt to any individual, financial institution, or any other lending party.

Payment Methods: All customers are required to pay invoices and receive credits as per their established credit terms. Only electronic payments will be accepted once an account is established.

Unapplied Payments/Credits: All customer payments that do not have a remittance or do not match open invoices on their account will be applied to the oldest open balance on the account. Other credits or overpayments that are not applied on the customers’ remittance will be applied to the oldest open balance on the account after 60 days. MBC will attempt to contact the customer owner, manager and/or accountant to show how the payments/credits were applied. MBC will not refund credits or overpayments on an open active account; they will instead be applied to invoices due to MBC.

New Customers: New customers may qualify for credit, subject to financial review by the Credit Department. The customer credit application, personal guarantee, and client release form, credit score and payment history determinesthe credit terms applied to the new account. First orders are COD.

Existing Customers: Credit reviews may be performed on all customers annually. Credit terms, and payment methods are re-evaluated, and may be changed upon review. More frequent reviews may be performed at the discretion of the Credit Department based on day to day activities.

NSF/RETURNED PAYMENTS: There will be a $45.00 fee for all NSF or returned payments. Two (2) Returned payments within 12 months will result in a reduction or loss of credit terms, until such time as Mountain Beverage determines that the account is credit worthy.. All NSF payments must be collected by certified funds only. The account will be placed on credit hold until the NSF payment is collected in full.

Exceptions granted to individual customers: The Credit Department may be asked to grant an exception to the credit policy for an individual customer. Exceptions may be granted if a compelling business reason exists to warrant the exception. Exception requests may be initiated by the customer, sales management or finance management. The reasons for the exception must be documented, and concurrence required by the Credit Manager or Controller and one level higher.

Credit Approval Authorities: The following table outlines credit approval authorities that apply to all customer credit terms. All customers are on a COD basis until credit terms are approved and activated by the credit department.

Changes to Credit Policy: Credit Department personnel will review the credit policy annually. Changes to the credit policy will follow the normal MBC policy approval process.

Collection of Funds: Mountain Beverage will use the means necessary to collect funds past due, including collection agencies and/or collection lawyers. All costs of collections, court costs and attorneys’ fees will be the responsibility of the customer who has defaulted on their terms. Past due accounts will be reported to credit reporting agencies.