Exhibit 10.3
 
Execution Copy

 
COMMERCIAL TERMS
 
FOR THE
 
RECEIVABLES FINANCE AGREEMENT
 
 
BETWEEN
 
 
LLOYDS TSB BANK PLC (1)
 
 
and
 
 
CIMCOOL EUROPE B.V. (2)

 

 

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RECEIVABLES FINANCE AGREEMENT
 

 
This Receivables Finance Agreement (the “Agreement”) is entered into on 12 March
2008

BETWEEN

(1)
WE, LLOYDS TSB BANK PLC, an English public limited company whose registered
office is at 25 Gresham Street, London, United Kingdom; acting through our
branch in the Netherlands with offices at Staten Bolwerk 1, 2011 MK Haarlem, the
Netherlands, and

(2)
YOU, CLIENT, CIMCOOL EUROPE B.V., a private limited liability company (besloten
vennootschap met beperkte aansprakelijkheid), and whose registered seat
(statutaire zetel) is at Vlaardingen, the Netherlands, registered with the
Chamber of Commerce of Rotterdam under number 24174756 and having your office
address at Schiedamsedijk 20, 3134 KK, Vlaardingen, the Netherlands,

IT IS AGREED that:

1.  
INTRODUCTION

1.1.  
In this Agreement, in our Operating Conditions (attached to this Commercial
Terms as Annex I), in the Asset Based Finance Agreement and in any document
pursuant to which a Security Interest is created in favour of us, we set out the
terms on which we will make the Facility set out below available to you.  These
are the only terms binding both of us.  They supersede all previous discussions,
quotations, offer letters, proposals and representations. By signing this
Agreement, you nonetheless confirm that all relevant individuals have either
read, understood and accepted or have otherwise consented to statements about
Data Protection which appear on either the offer letter, quotation, proposal or
instruction letter sent to you and as contained in this Agreement and/or that
the processing in accordance with such statements of Personal Data supplied by
you is otherwise permitted.

1.2.  
We may, by way of a separate agreement, make stock, plant and machinery,
property or cashflow facilities, hire purchase and/or leasing facilities
available to you.

1.3.  
You confirm that you have read and understood this Agreement and the Operating
Conditions and had the opportunity to take independent legal advice on your and
our respective rights and obligations.

1.4.  
To provide the Facility we need to have access to and to use and/or disclose
Personal Data relating to individuals associated with your business and/or with
your Customers’ businesses.  The terms upon which we will use such Personal Data
are set out in the Operating Conditions.  You agree that you have read and
understood such terms and that you have obtained any necessary consents from
relevant individuals.

 

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1.5.  
The Operating Conditions are incorporated into and form part of this Agreement.
If there is any conflict between these Commercial Terms and the Operating
Conditions, then these Commercial Terms will prevail.

1.6.  
The meanings of defined terms used in this Agreement are given below and in Part
I of the Operating Conditions.

2.           THE FACILITY
 
2.1  
Terms

 
2.1.1 Type of Facility:
Receivables Facility.
 
Part I, II and VI of the Operating Conditions will apply to you.
 
2.1.2 Review Limit:
 
equal at all times to the Aggregate Debt Financing Limit (as defined in the
Asset Based Finance Agreement). The  Aggregate Debt Financing Limit is an
aggregate limit which is applicable to facilities made available to you and your
Associated Businesses.
2.1.3 Advance Rate:
 
90%.
2.1.4 Funding Period:
 
Each period of 90 days beginning on the last Working Day of the month in which
an Invoice is raised.
2.1.5 Minimum Term:
 
36 months from the Start Date.
2.1.6 Final Repayment Date
 
the date falling five years after the date of the Agreement
2.1.7 Notice Period:
 
3 months.
2.1.8 Additional Non-Notifiable Invoices:
 
none
2.1.9 Approval Limit:
 
This will be notified to you separately.
2.1.10 Approved Countries:
 
all EU, G7 and OECD countries.
2.1.11 Approved Currencies:
 
None.

 
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2.2  
Fees and Charges Receivables Facility

 
2.2.1 Margin:
 
1.75% per annum.
2.2.2 Arrangement Fee:
 
has the meaning as set forth in the Asset Based Finance Agreement
2.2.3 Service Charge:
 
has the meaning as set forth in the Asset Based Finance Agreement
2.2.4 Unused Line Fee:
 
has the meaning as set forth in the Asset Based Finance Agreement
2.2.5 Guarantee Fee:
 
1.75% per annum
2.2.6 Interest Payment Date:
 
the first Working Day of each month
2.2.7 Default Interest:
 
2% per annum
2.2.8 Transmission Charges:
 
EUR 40
2.2.9 Urgent Payment Charges:
 
EUR 10
2.2.10 Account Opening Fee:
 
EUR 1,000
2.2.11 Annual Account Maintenance Fee:
 
EUR 1,000

 3.           POWER OF ATTORNEY
 
3.1  
You irrevocably provide us a power of attorney (volmacht), with the right of
substitution, to act on your behalf and to perform all acts on your behalf that
are necessary or desirable, which power of attorney will be used in the event of
the assignment of Invoices to perform all acts as listed in 3.2 and in case of a
pledge of Invoices to perform all acts as listed in 3.3.

 
3.2  
The power of attorney in case of assignment of Invoices under a Factoring
Facility will give authority to the holder of it to:

 
·  
perfect our title to an Invoice or its Related Rights; and/or

 
·  
secure the performance of any of your obligations to us or a Customer.

 
In accordance with this power, we may without notice to you either in our name
or in your name:
 
3.2.1  
complete, negotiate or endorse all instruments representing payment of or
security for Invoices as well as any other amount, however affected;

 
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3.2.2  
bring, conduct, compromise or defend any legal or other proceedings;

 
3.2.3  
execute or sign any contracts or documents;

 
3.2.4  
complete or perform any other acts as we consider reasonably necessary to
complete a Contract of Sale;

 
3.2.5  
dispose of or deal with any Related Rights; and

 
3.2.6  
obtain payment of Invoices and, if necessary, give notice of the assignment of
Invoices to us.

 
3.3  
The power of attorney in case of pledge of Invoices will give authority to the
holder of it to:

 
·  
perfect our Security Interest to an Invoice or its Related Rights; and/or

 
·  
secure the performance of any of your obligations to us or a Customer.

 
In accordance with this power, we may without notice to you either in our name
or in your name:
 
3.3.1  
complete, negotiate or endorse instruments representing payment of or security
for Invoices as well as any other amount, however affected;

 
3.3.2  
bring, conduct, compromise or defend any legal or other proceedings;

 
3.3.3  
execute or sign any contracts or documents;

 
3.3.4  
complete or perform any other acts as we consider reasonably necessary to
complete a Contract of Sale;

 
3.3.5  
dispose of or deal with any Related Rights; and

 
3.3.6  
obtain, in so far as permitted pursuant to Article 3:246 Dutch Civil Code,
payment of Invoices and, if necessary, give notice of the pledge of Invoices to
us.

 
You will ratify anything lawfully done by any attorney, substitute attorney or
mandate under the powers set out above.  You cannot cancel our powers under this
clause and this power will last until all monies, obligations and liabilities
owing by you to us have been performed or satisfied in full.
 
4.           CONDITIONS PRECEDENT
 
4.1
We will provide you with the Facility when we have received in a form and
substance satisfactory to us:

 
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4.1.1  
a copy of your constitutional documents, consisting of: (i) your deed of
incorporation, (ii) if applicable your current articles of association and (iii)
an original copy of the extract pertaining to you from the trade register of the
chamber of commerce;

 
4.1.2  
a certified copy of a resolution of your board of directors approving the terms
of, and the transactions contemplated by this Agreement, and resolving that it
execute, deliver and perform this Agreement and any other security we require
from you;

 
 
4.1.3  
if applicable, a copy of a resolution signed by all the holders of the issued
shares in the Client, approving the terms of, and the transactions contemplated
by this Agreement;

 
 
4.1.4  
if applicable, a copy of the advice cast by the relevant works council
(ondernemingsraad) in respect of transactions contemplated by this Agreement or
a confirmation from the works council that it refrains from exercising its
rights to advise on the subject matter of this Agreement;

 
 
4.1.5  
a corporate guarantee on first demand from Milacron Nederland B.V. and Milacron
B.V. and a certified copy of the resolution of its governing body approving the
granting of the guarantee;

 
 
4.1.6  
any additional information or evidence we require to comply with our “know your
customer” procedures, including satisfactory conclusion of any insolvency
searches on you with the Central Insolvency Register (Centraal
Insolventieregister), and any other searches deemed appropriate in this respect;

 
 
4.1.7  
the implementation of a web-based application in which reports can be submitted;

 
 
4.1.8  
copy of your latest audited accounts;

 
 
4.1.9  
a right of pledge in favour of us on any Invoices duly completed and signed,
corresponding to the first Notification of Invoices;

 
 
4.1.10  
if applicable, originals of all the necessary consents as required by the Data
Protection Act for the collection, processing and transfer of any Personal Data
in relation to the Invoices assigned and pledged; and

 
 
4.1.11  
other conditions precedent are:

 
 
·  
a right of pledge in favour of us on any Collection Account held by you and on
all of your stock and inventory;

 
 
·  
a right of pledge in favour of us on all shares in your share capital.

 
 
5.  
GUARANTEE

 
 
5.1           You irrevocably and unconditionally:
 
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5.1.1  
guarantee to us punctual performance by each Guaranteed Company of its Secured
Obligations up to a maximum amount of EUR 7,000,000 (seven million euro) (for
the purpose of this clause: the "Maximum Amount");

 
5.1.2  
undertake, by way of its own and independent obligation, with us that whenever a
Guaranteed Company does not pay any amount when due under or in connection with
its Secured Obligations, that you shall immediately on demand pay that amount
or, if less, the Maximum Amount, as if you were the principal obligor;

 
5.2
This guarantee is an independent guarantee and not a suretyship (borgtocht). You
agree to and hereby waive any rights you may have under title 7.14 Dutch Civil
Code, if any, which waiver is hereby accepted by us.

 
5.3
This guarantee is a continuing guarantee and will extend to the ultimate balance
of sums payable by any Guaranteed Company under its Secured Obligations (but
never exceeding the Maximum Amount), regardless of any intermediate payment or
discharge in whole or in part.

 
5.4
Until all amounts which may be or become payable by a Guaranteed Company under
or in connection with its Secured Obligations have been irrevocably paid in
full, you will not exercise any rights which you may have by reason of
performance by you of a Guaranteed Company's obligations to be indemnified by
that Guaranteed Company and you subordinate in favour of us any rights which you
may acquire by way of recourse or subrogation in connection with any right
against any Guaranteed Company until all amounts which may be or become payable
any Guaranteed Company under or in connection with the Secured Obligations have
been irrevocably paid in full.

 
6.  
GOVERNING LAW AND JURISDICTION

 
This Agreement shall be governed by and construed in accordance with the law of
the Netherlands. You accept the jurisdiction of the competent court of the
Netherlands to hear and determine any proceedings arising out of this
Agreement.  However, you agree that we may bring proceedings in the courts of
any other jurisdiction.
 
To confirm agreement to the terms and conditions contained in this Agreement
together with all its Schedules, Annexes and other documents forming part of the
documentation of the subject matter of agreement the parties have executed two
originals of this Agreement on the date set out above.
 

 
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LLOYDS TSB BANK PLC
represented by:
 
 
 
1.
 
Mark Louman
Proxyholder A
Name
 
/s/ Mark Louman
Signature
 
2.
 
Claudia Roswitha van der Meer
Proxyholder A
Name
 
/s/ Claudia Roswitha van der Meer
Signature

 
CIMCOOL EUROPE B.V.
duly represented by:
 
 
René van Geemen
Managing Director
 
Gerrit Jue
Managing Director
Name
/s/ René van Geemen
 
 
/s/ Gerrit Jue
Signature
 
 

 
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ANNEXURE I
Operating Conditions

 

Guidance Note:
 
 
The Agreement is in relation to various products offered by Lloyds TSB Bank PLC
in the Netherlands, and comprises two parts (a) the Commercial Terms and (b) the
Operating Conditions.
 
The Commercial Terms and the Operating Conditions jointly set out the terms on
which the Facility has been made available to you.
 
In so far as you have applied for a Euro Invoice Discounting Facility, then
Parts I, II and III of the Operating Conditions will apply to you.
 
In so far as you have applied for an Export and/or Currency Invoice Discounting
Facility, then Parts I, II and V of the Operating Conditions will apply to you.
 
In so far as you have applied for a Factoring Facility, then Parts I, II and IV
of the Operating Conditions will apply to you.
 
In so far as you have applied for a Receivables Facility, then Parts I, II and
VI of the Operating Conditions will apply to you.

 
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OPERATING CONDITIONS

FOR

RECEIVABLES FINANCE AGREEMENT

BETWEEN

LLOYDS TSB BANK PLC, NETHERLANDS BRANCH (1)

AND

CIMCOOL EUROPE B.V. (2)

We acknowledge receipt of these Operating Conditions (Part I, Part II, and Part
VI) which form part of our agreement with you.

/s/ René van Geemen

/s/ Gerrit Jue

For and on behalf of Cimcool Europe B.V.

12 March 2008
Date

 
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OPERATING CONDITIONS – PART I
14
DEFINITIONS
14
Section 1 General Definitions
14
Section 2 Definitions related to Dutch law
20
OPERATING CONDITIONS - PART II
24
PROVISIONS RELATING TO ALL CLIENTS
24
1 LENGTH OF THE AGREEMENT
24
2 NOTIFICATION, INVOICE CLASSIFICATION AND APPROVAL LIMITS
24
3 PAYING FOR INVOICES
25
4 CURRENT AND OTHER ACCOUNTS
25
5 COLLECTION OF INVOICES
27
6 OUR FEES AND CHARGES
28
7 EXPENSES, SET OFF AND INDEMNITY
29
8 WARRANTIES
30
9 UNDERTAKINGS
32
10 TERMINATION EVENTS
35
11 ASSIGNMENT OR PLEDGE OF INVOICES
37
12 REPURCHASE
38
13 COMMUNICATIONS BETWEEN US
38
14 VARIATIONS
39
15 COMMUNICATIONS WITH PROFESSIONALS AND OTHERS
40
16 DATA PROTECTION
40
17 PARTNERSHIPS AND SOLE TRADERS
41
18 NOTICES
43
19 GENERAL
43
20 INTERPRETATION
43
OPERATING CONDITIONS - PART III
45
PROVISIONS RELATING TO INVOICE DISCOUNTING CLIENTS ONLY
45
1 AGENCY APPOINTMENT
45

 
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2 PLEDGE OF INVOICES - DISCLOSED
46
3 PLEDGE OF INVOICES - UNDISCLOSED
48
4 INFORMATION AND REPORTING REQUIREMENTS
49
5 NON-NOTIFIABLE INVOICES
50
6 OUR SERVICES
51
7 DISCOUNTING CLIENTS WHICH BECOME FACTORING CLIENTS
52
8 FEES
53
9 EXPORT/CURRENCY INVOICES
54
ANNEXURE I
55
List of Customers
55
ANNEXURE II
56
Form of Disclosed Pledge Agreement
56
Schedule I
58
Detail of Invoices
58
ANNEXURE III
59
Form of Notification to Customers
59
ANNEXURE IV
61
Form of Undisclosed Pledge Agreement
61
Schedule I
63
Detail of Invoices
63
OPERATING CONDITIONS - PART IV
64
PROVISIONS RELATING TO FACTORING CLIENTS ONLY
64
1 OUR SERVICES
64
2 ASSIGNMENT OF INVOICES
64
3 YOUR RESPONSIBILITIES
66
4 OUR FEES AND CHARGES FOR FACTORING CLIENTS
66
5 CURRENCY INVOICES
67
ANNEXURE I
68
List of Customers
68
ANNEXURE II
69

 
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Assignment Agreement
69
Schedule I
71
Detail of Invoices
71
ANNEXURE III
72
Form of Notification to Customers
72
OPERATING CONDITIONS - PART V
74
PROVISIONS RELATING TO EXPORT AND CURRENCY FACILITIES
74
1 EXPORT AND CURRENCY FACILITIES
74
2 OUR FEES AND CHARGES
74
OPERATING CONDITIONS - PART VI
75
PROVISIONS RELATING TO RECEIVABLES FACILITIES
75
1 PURPOSE OF THE FACILITY
75
2 DRAWDOWN
75
3 INTEREST
75
4 REPAYMENT
76
5 PREPAYMENT
76
6 SECURITY
76
7 PLEDGE OF INVOICES - DISCLOSED
77
8 PLEDGE OF INVOICES - UNDISCLOSED
79
9 INFORMATION AND REPORTING REQUIREMENTS
80
10 NON-NOTIFIABLE INVOICES
81
11 OUR SERVICES
82
12 FEES
83
ANNEXURE I
85
List of Customers
85
ANNEXURE II
86
Form of Disclosed Pledge Agreement
86
Schedule I
88
Detail of Invoices
88
ANNEXURE III
89

 
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Form of Notification to Customers
89
ANNEXURE IV
91
Form of Undisclosed Pledge Agreement
91
Schedule I
93
Detail of Invoices
93
ANNEXURE IV
94
Form of Draw Down Request
94

 
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OPERATING CONDITIONS – PART I
 

DEFINITIONS
 
In the Agreement the following words have the meaning set out opposite them:

 
Section 1 General Definitions
 

“Account Opening Fee”
any fee referred to in the Commercial Terms calculated in the manner set out in
Operating Conditions – Part II – Provisions relating to all clients;
 
“Annual Account Maintenance Fee”
any fee referred to in the Commercial Terms calculated in the manner set out in
Operating Conditions – Part II – Provisions relating to all clients;
 
“Additional Service Fee”
the fee charged to Factoring Clients in respect of Invoices still unpaid at the
ending of the Funding Period;
 
“Advance Rate”
any percentage to be paid by us on account of the Nominal Amount of each
Approved Invoice specified in the Commercial Terms as varied in accordance with
the Agreement from time to time;
 
“Advance”
the amount paid by us on account of the Nominal Amount of each Approved Invoice,
in the case of Invoice Discounting, Factoring Clients and Receivables Clients,
calculated by applying the Advance Rate to such Invoice;
 
“Approved Currency”
any currency referred to in the Commercial Terms or any other currency which we
may approve from time to time but excluding any currency which we notify you is
not or no longer an Approved Currency;
 
“Approval Limit”
any limit established by us in discussion with you and notified to you from time
to time in relation to the maximum value of Invoices owing by some or all of
your Customers expressed either as a fixed monetary amount or a percentage of
all your Invoices outstanding from time to time;
 
“Approved Invoice”
all or part of any Notified Invoice not classified by us as Disapproved and
“Approved” shall be construed accordingly;
 

 
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“Approved Country”
any country referred to in the Commercial Terms or agreed by us from time to
time but excluding any country which we notify you is not or no longer an
Approved Currency;

 
"Asset Based Finance Agreement"
The asset based finance agreement of even date herewith between you, us and some
of your Associated Businesses.
 
“Associated Business”
- Cimcool Europe B.V.;
 
- Cimcool Industrial Products B.V.;
 
- D-M-E Europe CVBA;
 
- Ferromatik Milacron Machinenbau GmbH; and
 
any other person or business which is owned or controlled by:
 
(i)     you or your spouse; or
 
(ii)    any director or partner of yours; or
 
(iii)   anyone who directly or indirectly controls (or who can take control of)
you; or
 
(iv)   anyone you control (or you can take control of);or
 
(v)    any holding company;
 
“Availability”
the amount of any Invoice Discounting, Factoring Facility or Receivables
Facility available to you calculated as set out in condition 4.4 of the
Operating Conditions – Part II – Provisions relating to all Clients;
 
“Bank”
Lloyds TSB Bank plc and its successors or assigns;
 
“Base Rate”
the published base rate of the Bank from time to time;
 
“Collection Account”
any bank account into which payments from Customers in respect of Invoices are
required to be paid;
 
“Collection Date”
in the case of any Invoice which is: (a) paid in cash: the date of receipt of
the cash by you; (b) paid by cheque or other instrument: the date on which funds
representing the same are cleared by your bankers for interest; (c) paid by
TARGET or CSS: the date on which funds are credited to a Collection Account;

 
“Commercial Terms”
the terms set out in the main body of the Agreement (other than the Operating
Conditions) as varied, amended, supplemented or replaced from time to time;

 
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“Contingent Instrument”
a guarantee, bond or letter of credit issued by us or an Issuer pursuant to any
Contingent Liability Facility;
 
“Contingent Liability Facility”
any Facility provided by us to you offering you the option to request the issue
of Contingent Instruments;
 
“Contract of Sale”
a contract in any form (including a purchase order) for the sale or hire of
goods and/or provision of services to a Customer under which an Invoice arises;
 
“Counter Indemnity”
an indemnity provided by us to an Issuer in their preferred form for all monies,
obligations and liabilities incurred under a Contingent Instrument;
 
“Credit Balance(s)”
any credit balance on the Current Account;
 
“Currency Invoice”
any Invoice payable in an Approved Currency (other than Euro);
 
“Current Account”
an account administered by us with account number 267600011 designated LTSB re
Cimcool Europe BV;
 
“Customer”
a party under a Contract of Sale obliged to pay you the Invoice and, where the
context so permits, a prospective Customer;
 
“Debit Balance(s)”
any debit balance on the Current Account;
 
“Delivered”
in relation to Goods:
 
(i)    physical delivery to (or to the order of) a Customer;
 
(ii)           the Customer taking the risk in the Goods;
 
(iii)           performance of the Contract of Sale;
 
 in relation to services: completed and “Deliver” and “Delivery” are to be
construed accordingly;
 
“Disapproved Invoice”
all or part of any Invoice classified by us as disapproved in accordance with
condition 2 and ‘Disapproved’ is to be construed accordingly;
 
“Drawdown Date”
means the date on which the relevant Advance as requested in the Drawdown
Request must be available to you;
 
“Drawdown Request”
means a notice sent by you to us requesting an Advance substantially in the
relevant form set out in Annexure V of Operating Conditions Part VI;
 

 
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“EEA”
European Economic Area;
 
“EURIBOR”
has the meaning as set forth in the Asset Based Finance Agreement;
 
“Euro” or “€”
the single currency of the member states of the European Union which have
adopted the Euro as their lawful currency in accordance with the legislation of
the European Union relating to European Economic and Monetary Union, or if
different, the lawful currency of Belgium or the Netherlands (as applicable);
 
“Export Facility”
a Facility where we have agreed to pay for your Export Invoices;
 
“Export Invoice”
an Invoice which is:
 
(i)    addressed to a Customer in one of the countries referred to in the
Commercial Terms; and
 
(ii)   expressed either in an Approved Currency or Euro;
 
“Facility”
means each or all (as the context requires) of any Invoice Discounting Facility,
Factoring Facility, Receivables Facility or Export and/or Currency Facility,
made available by us to you from time to time under the terms of the Agreement;
 
“Factoring Client”
a client to whom a Factoring Facility is made available;
 
“Factoring Facility”
a debt purchase facility provided on the terms of the Agreement;
 
“Fees and Charges”
all those fees and charges to which we are entitled for providing any Facility
(and any VAT thereon);
 
 "Guaranteed Company"
Cimcool Industrial Products B.V., D-M-E Europe CVBA and Ferromatik Milacron
Machinenbau GmbH;
 
“Goods”
any goods the subject of a Contract of Sale;
 
“Invoice”
any present, future or contingent obligation (including any tax or duty) of a
Customer to make payment under a Contract of Sale (whether invoiced or not) and,
where the context permits, includes part of an Invoice;
 
“Invoice Discounting Client”
a client to whom an Invoice Discounting Facility is made available;
 
“Invoice Discounting Facility”
a debt purchase facility provided on the terms of the Agreement;
 
“Issuer”
a bank or other financial institution approved by us which issues a Contingent
Instrument on your behalf;

 
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“Margin”
the Margin specified in the Commercial Terms;
 
“Minimum Fee”
any minimum fee specified in the Commercial Terms;
 
“Minimum Term”
the shortest period for which the Agreement must operate specified in the
Commercial Terms;
 
“Net Value”
in relation to any Invoice, the amount actually received by us in settlement or
discharge after taking into account all deductions, discounts and off-sets;
 
“Nominal Amount”
the amount received by us in or towards each Invoice together with its Related
Rights;
 
“Non-Notifiable Invoices”
those Invoices described as non-notifiable in the Operating Conditions for
Invoice Discounting Clients and Receivable Clients and specified as Additional
Non-Notifiable Invoices in the Commercial Terms;
 
“Notice Period”
the period of notice to be served to terminate the Agreement specified in the
Commercial Terms;
 
“Notification”
your notification to us in the format we specify of the existence and amount of
Invoices and other matters referred to in conditions 9.1.7 and 9.1.8 of the
Operating Conditions – Part II – Provisions relating to all Clients and
“Notified” and “Notify” are to be construed accordingly;
 
“Notified Value”
the full amount of each Invoice given in a Notification (including any
applicable tax or duty) and before any discount for prompt payment or otherwise;
 
“Operating Conditions”
the terms and conditions on which we will provide a Facility to you incorporated
in the Agreement, signed by you for identification as amended, varied,
supplemented or replaced from time to time;
 
“Receivables Client”
a client to whom a Receivables Facility is made available;
 
“Receivables Facility”
a loan facility provided on the terms of the Agreement;
 
“Reserve”
any reserve applied by us to your Availability in such amount as we may
determine from time to time;
 
“Review Limit”
the amount equal at all times to the Aggregate Debt Financing Limit (as defined
in the Asset Based Finance Agreement);
 
"Secured Obligations"
all obligations representing indebtedness for borrowed money, present or future,
absolute or contingent, matured or not, at any time owing by you or any
Guaranteed Company to us under or in connection with the Asset Based Finance
Agreement or the Financing Documents (as defined in the Asset Based Finance
Agreement), provided, however, that any such obligation arises out of a loan
arrangement providing for revolving working capital loans;
 

 
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“Service Fee”
the fee charged for the provision of our services to you calculated, unless
otherwise agreed, as provided in Operating Conditions – Part II – Provisions
relating to all clients;
 
“Start Date”
the later of:
 
(a) the date of the Agreement; and
 
(b) the date on which we confirm that you have satisfied any conditions
precedent specified by us;
 
“TARGET”
same day transmission of cleared funds through the Trans-European Automated
Real-time Gross Settlement Express Transfer System;
 
“Termination Event”
any of the events set out in Operating Conditions – Part II – Provisions
relating to all clients;
 
“Urgent Payment Charge”
any fee referred to in the Commercial Terms calculated in the manner set out in
Operating Conditions – Part II – Provisions relating to all clients; and
 
“Website”
in the case of Invoice Discounting Clients or Receivables Facility Clients
www.ltsbcf-solutionsplus.co.uk referred to as N-able, in the case of Factoring
Clients, www.cashconnect.co.uk referred to as Cash Connect and, in any case,
includes any additional or alternative domain name by which we may communicate
with you over the internet from time to time.

 
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Section 2 Definitions related to Dutch law
 

“Currency Facility”
a Facility where we have agreed to pay for your Currency Invoices owing by a
Customer in the Netherlands;
 
“CSS”
clearing and settlement system (Equens) in the Netherlands for domestic giro
payments;
 
“Data Protection Act”
the Dutch Data Protection Act (Wet Bescherming Persoonsgegevens) as amended, and
any related regulations;
 
“Domestic Invoice”
an Invoice payable in Euro arising from a Contract of Sale performed in the
Netherlands, the invoice for which is addressed to a location in the
Netherlands;
 
“Dutch Civil Code”
the Dutch civil code, as amended from time to time (Burgerlijk Wetboek);
 
“Insolvency/Insolvent”
in relation to any company or firm constituting a distinct legal entity
(rechtspersoon) means:
 
i. the appointment of a voluntary liquidator (vereffenaar) in view of the
dissolution of the company or firm (article 19 et seq. of the Dutch Civil Code)
or the passing of a resolution to wind up or dissolve the company or firm; or
 
ii. the opening with respect to the entity or any material subsidiary of the
entity of a moratorium (surséance van betaling) within the meaning of Title II
Insolvency Act (Faillissementswet); or
 
iii. the opening with respect to the entity or any material subsidiary of the
entity of a bankruptcy proceeding (faillissement) within the meaning of Title I
Insolvency Act (Faillissementswet); or
 
iv. only insofar as applicable, the opening of an emergency proceeding
(noodregeling), winding up order (liquidatieprocedure) or asset liquidation
proceeding (saneringsmaatregel) within the meaning of Article 3:160 et seq. Act
on Financial Supervision (Wet op het financieel toezicht),

 
 
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in relation to an individual (sole trader (eenmanszaak), independent
professional (beroepsbeoefenaar), etc.), means:
 
i. the opening with respect to the individual of a moratorium (surséance van
betaling) within the meaning of Title II Insolvency Act (Faillissementswet); or
 
ii. the opening with respect to the individual of a bankruptcy proceeding
(faillissement) within the meaning of Title I Insolvency Act
(Faillissementswet); or
 
iii. the opening with respect to the individual of the liabiliies winding up
scheme (schuldsaneringsregeling) within the meaning of Title III Insolvency Act
(Faillissiementswet),
 
in relation to any company, firm, individual or group, means:
 
i. any creditor seizing (conservatoir of executoriaal beslag leggen) or taking
possession of any of its assets whether through the implementation of any
Security Interest or pursuant to an approval from the competent court (verlof)
or through measures of forced execution (parate executie); or
 
ii. the transfer to its creditors as payment, or the grant to its creditors, a
Security Interest covering a substantial portion of its fixed assets; or
 
iii. receiving an injunction to pay or a notification instituting a suit
demanding the conviction of the individual or entity; or
 
iv. commencing negotiations with one or more creditors for the general
readjustment or rescheduling of, or a moratorium in regard to, all or part of
its indebtedness (onderhands akkoord); or
 
v. suspending or ceasing or threatening to suspend or cease its business or
making a resolution or decision to this effect; or
 
vi. allowing any judgment, order or award of any court or tribunal for payment
of money to remain unsatisfied for 7 days or more; or
 
vii. being subject to an injunction (voorlopige voorziening), order or other
action that prohibits, prevents or restricts it from dealing with its assets or
business; or
 
viii. being incapable of paying the principal or interest on its debts generally
as they fall due, or failure to honour a guarantee granted by it for any debt
when called, after any grace periods have expired; or
 

 
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ix. taking any steps toward or being subject to a judicial, administrative or
arbitral proceeding that results in a decision placing the individual or entity
in one of the situations described in the preceding two sub-paragraphs, or
likely to cause the opening of a conciliation, safeguard, judicial work-out or
judicial liquidation proceeding in regard to it; or
 
x. occurrence of an event after the signature of the Agreement or the discovery
of a fact that was not disclosed to us at or before signature, that is of a
nature to affect in a material adverse way the business activities, financial or
economic situation, the profitability or the assets or liabilities or the
capacity of the individual or entity to fulfil its obligations;
 
“Personal Data”
personal data relating to a living individual as defined under the Data
Protection Act;
 
“Related Rights”
(i) all your rights under a Contract of Sale (includingyour right to damages);
 
(ii) all (negotiable and non negotiable) instruments, security, bonds,
guarantees, and indemnities relating to an Invoice;
 
(iii) all documents, ledgers, databases and computer files (including operating
systems) recording or evidencing Invoices;
 
(iv) all Goods returned to or repossessed by you or rejected by a Customer and
all documents of title to such Goods;
 
(v) any credit insurance in respect of an Invoice;
 
(vi) any time sheets or proofs of delivery; and
 
(vii) any and all dependent rights (afhankelijke rechten) and ancillary rights
(nevenrechten), privileges and other rights inherent, attached and/or associated
with the Invoices, including without limitation title retention rights which you
undertake to provide in the case of a sale of goods;
 
“Security Interest”
any mortgage, pledge, lien, or any other arrangement for the purpose of or
having a similar effect to creating security or any title retention rights;
 

 
 
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“Sensitive Personal Data”
sensitive personal data relating to a living individual as defined under the
Data Protection Act;
 
“We” or “us”
Lloyds TSB Bank plc acting through its Netherlands branch and our transferees
and assignees; and
 
“Working Day”
a day when the Bank is open for all normal business in Amsterdam and in England
and Wales.

 

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OPERATING CONDITIONS - PART II
 
PROVISIONS RELATING TO ALL CLIENTS
 
 
1  
LENGTH OF THE AGREEMENT

 
1.1  
The Agreement will begin on the Start Date and, subject to condition 1.3, will
continue for the Minimum Term and thereafter until terminated by either of us.

 
1.2  
We may each terminate the Agreement by serving written notice to terminate on
the other, but, subject to condition 1.3, we must give each other notice of at
least the Notice Period and each of us may only terminate the Agreement at the
end of a calendar month coinciding with or ending after the end of the Minimum
Term.

 
1.3  
We may also terminate the Agreement:

 
1.3.1  
if it becomes unlawful in any applicable jurisdiction for us to perform any of
our obligations contemplated by the Agreement or to fund or maintain the
Facility,

 
1.3.2  
if a material adverse change in the tax regime applicable to us occurs and such
change is not due to wilful misconduct or gross negligence on our side (unless
you at your discretion pay us an amount required to put us in the same position
we would have been had the tax regime change not occurred, in which case we do
not have the right to terminate the Agreement); and

 
1.3.3  
at any time after the occurrence of a Termination Event.

 
2  
NOTIFICATION, INVOICE CLASSIFICATION AND APPROVAL LIMITS

 
2.1  
You will Notify us on a weekly basis through the Website of all your Invoices
existing on or arising after the Start Date.

 
2.2  
We will classify all Notified Invoices as either Approved or Disapproved.  Any
Invoice which is not Disapproved will be Approved.

 
2.3  
We may Disapprove any Notified Invoice:

 
2.3.1  
which, when added to all other unpaid Invoices owing by a particular Customer,
exceeds any Approval Limit; or

 
2.3.2  
which is not paid by the end of the Funding Period (or which on the Start Date
has not been paid within that time period); or

 
 
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2.3.3  
which is disputed by a Customer; or

 
2.3.4  
in relation to which you breach any warranty or undertaking given to us.

 
We may Disapprove an Invoice at any time, even if it was previously Approved and
vice versa.
 
2.4  
We will tell you of any Approval Limits set by us.

 
3  
USE OF FACILITY

 
3.1  
We will allow you to make withdrawals from the Current Account up to the amount
of your Availability as calculated in condition 4 or, if less, the Review Limit.

 
3.2  
We will allow you to request Contingent Instruments to be issued up to the
amount of your Availability as calculated in condition 4 or, if less, the Review
Limit. If an Issuer agrees to issue the Contingent Instrument requested, we
will, upon the issuance of the relevant Contingent Instrument, reserve a portion
of your Availability equal to the amount of the Contingent Instrument.

 
3.3  
Unless we agree otherwise all transactions between us will be accounted for in
Euro.

 
4  
CURRENT AND OTHER ACCOUNTS

 
4.1  
We will operate an account in your name called the Current Account to record
transactions relating to the Facility.

 
4.2  
You will credit to the Current Account on each Collection Date amounts received
by you on any Collection Account in or towards payment for Invoices.

 
4.3  
We will debit to the Current Account:

 
4.3.1  
withdrawals and any other payments made to you or to your order;

 
4.3.2  
all Fees and Charges (including any value added tax); and

 
4.3.3  
any other sums actually, contingently or prospectively payable by you to us
whether under the Agreement or any other facility made available by us to you.

 
4.4  
In order to calculate Availability, we will apply the Advance Rate to the
Notified Value of all Approved Invoices and add any Credit Balance and then
deduct:

 
4.4.1  
any Debit Balance;

 
4.4.2  
any amounts outstanding under Contingent Instruments;

 
4.4.3  
any Reserves; and

 
4.4.4  
any accrued Fees and Charges.

 
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4.5
The Debit Balance must not exceed the Review Limit. If we are providing a
Facility (or any loan, hire purchase or lease facility) to you and Associated
Businesses, the global aggregate Debit Balances of all you and all Current
Accounts of the Associated Businesses and debit balances on such loan, hire
purchase or lease accounts shall not exceed any aggregate Review Limit specified
in the Commercial Terms.

 
4.6
If your Availability is a negative figure or if you exceed any Approval Limit or
any Review Limit whether as a result of us Disapproving an Approved Invoice,
exercising our rights under conditions 4.7, 4.8 or 10.2 or for any other reason,
then, in the first instance, you must immediately pay us the excess on our
demand.

 
4.7           We may at any time, by written notice to you, with immediate
effect vary:
 
 
4.7.1
the Advance Rate in respect of all outstanding Approved Invoices and/or Invoices
Notified to us after the date of such notice; and/or

 
4.7.2
any Approval Limits; and/or

 
 
4.7.3
the proportion of your Export Invoices in respect of which we will make
Advances.

 
4.8
We may also from time to time apply a Reserve.  We will determine the amount of
any Reserve after consultation with you and will notify it to you from time to
time.

 
4.9
In addition to the Current Account, we may maintain such other accounts as we
consider necessary for the operation of the Agreement.

 
5  
COLLECTION OF INVOICES

 
5.1  
If you are a client whose Facility is disclosed or whose agency to collect
Invoices has been terminated, subject to the rights of any credit insurer, these
conditions will apply to you.

 
5.2  
We may take whatever action we think is suitable to obtain payment of Invoices
from your Customers.  We may demand, exercise, obtain or otherwise deal with the
Related Rights in whatever way we think is suitable (or refrain from so doing).
We may settle, compromise or adjust any claim brought by or against us, upon
such terms as we see fit.  We may bring, carry on, defend or compromise any
legal proceedings or form of alternative dispute resolution in any part of the
world and in your or our name.  We may engage collection agents, bailiffs or
lawyers or such other professionals as we feel necessary for this purpose.

 
5.3  
We do not have to bring or defend any proceedings, by or against us, even if you
ask us to do so.

 
5.4  
We may allow a Customer a longer period to pay or agree to accept less than the
Notified Value of an Invoice and this will not affect your obligations to us.

 
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5.5  
You will:

 
5.5.1  
at your expense, help us to collect Invoices, by, for example, assisting us to
review your records and other evidence, providing witness statements and
procuring witnesses’ attendance at court or during investigative or expertise
proceedings; and

 
5.5.2  
be bound by any act, decision or omission of ours in the exercise of our rights
including any reduction in, or extinction of, the Purchase Price.

 
5.6  
We may sell any returned Goods on such terms as we consider appropriate and we
will treat the proceeds of sale as if they were payment of or towards the
relevant Invoice.

 
5.7  
We will not pay you compensation or damages and we will not have broken the
Agreement if your Customer does not pay an Invoice.

 
5.8  
This Condition 5 is not applicable to Receivables Clients.

 
6  
OUR FEES AND CHARGES

 
6.1  
We will on the Start Date charge you the Account Opening Fee for opening the
Current Account.

 
6.2  
We will annually charge you the Annual Account Maintenance Fee, unless in any
year the payment charges in the year reach EUR 1,000 in which case we will waive
the Annual Account Maintenance Fee for that year.

 
6.3  
For the purposes of calculating the Unused Line Fee, any payment of or towards
an Invoice shall be credited to the Current Account on its Collection Date. We
will debit any Unused Line Fee specified in the Commercial Terms to your Current
Account at the intervals agreed with you.

 
6.4  
We will charge one twelfth of the Unused Line Fee monthly in arrears on the
amount by which during the preceding calendar month:

 
6.4.1  
your average Debit Balance; or

 
6.4.2  
where we have agreed to make Facilities available to you and Associated
Businesses, your and their combined average Debit Balances;

 
falls short of the Review Limit (or any aggregate Review Limit where one has
been agreed), it being understood that the Unused Line Fee is an aggregate
payable by you or any Associated Business.
 
6.5  
If we provide services to a level of intensity which were not envisaged by us at
the time of entry into the Agreement (which includes you communicating with us
other than via the Website) then, in addition to the Service Charge, we may make
a reasonable charge for all costs and expenses (including the cost of our
administrative time and resulting loss of profit) for providing such services.

 
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6.6  
If at any time you exceed your Availability, then, in addition to demanding
immediate repayment of the excess, we may by notice to you increase our Fees and
Charges to reflect our increased risk.

 
6.7  
Value Added Tax, where applicable, shall be added to all our Fees and
Charges. To the extent that VAT would become chargeable, we shall promptly
provide an appropriate VAT invoice.

 
6.8  
We will make all payments to you or to your order through CSS. For every urgent
outward payment (spoedbetaling) we will charge the Urgent Payment Charge
indicated in the Commercial Terms. If we agree to make a payment to you other
than by CSS we will charge you the Transmission Charges indicated in the
Commercial Terms.

 
7  
EXPENSES, SET OFF AND INDEMNITY

 
7.1  
You will indemnify us (and in the case of condition 7.1.6 any bank operating the
Collection Account or other account nominated by us) for all losses, costs,
liabilities and expenses (including legal fees) incurred by us (or such bank)
(and any additional administrative time incurred by us charged at such rate as
we shall reasonably determine) directly or indirectly as a result of:

 
7.1.1  
preserving or enforcing our rights under the Agreement and any security given
for it;

 
7.1.2  
exercising any of our rights under condition 5 or dealing with disputes relating
to an Invoice;

 
7.1.3  
obtaining or enforcing a release of Invoices and Related Rights or waiver of
rights, from any person with a Security Interest;

 
7.1.4  
the occurrence of a Termination Event;

 
7.1.5  
accepting and/or acting upon information or instructions purporting to come from
you even if that information or those instructions subsequently prove to have
been incorrect or unauthorised by you (except to the extent that our officers
have been negligent or fraudulent);

 
7.1.6  
collecting and/or crediting to any Collection Account (or any other account
nominated by us) any cheque or other negotiable instrument payable to you or
endorsed in your favour;

 
7.1.7  
any claim by a Customer against us; or

 
7.1.8  
you breaching the Data Protection Act.

 
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7.2  
We may charge you a reasonable fee for:

 
7.2.1  
providing any consent, waiver or variation of the Agreement; or

 
7.2.2  
making an Advance which exceeds your Availability.

 
7.3  
We may (but are not obliged) at any time without notice to you to:

 
7.3.1  
set off against our liability to you any liability you owe to us; and/or

 
7.3.2  
combine or consolidate all or any of your accounts with us;

 
in either case whether arising under the Agreement or any other facility
provided by us.  All your accounts with us, which may be opened for legal,
technical or administrative reasons (and which may have separate names), will be
deemed and will be treated contractually as sub-accounts of a single current
account recording debits and credits that are connected and indivisible, giving
rise to a right of set-off even if the legal conditions for set-off are not
fulfilled.  In order to effect such set off or combination of accounts, we may
convert currencies at the Bank’s spot rate of exchange prevailing at the time of
set off or combination.  Your liability to us includes any amounts owing by you
for goods, work or services provided to you by another of our clients.  We may
make a reasonable estimate of any amounts contingently or prospectively due from
you to us which cannot be calculated on the date we exercise set off.  We may
make debit entries on your account to effect the intent of the set-off
provisions of the Agreement.  You may not exercise any right of set off or
counterclaim against monies due from you to us.
 
7.4  
You will be responsible for any stamp duty or other tax payable on any document
transferring title by assignment or pledge (whether to you or us) to Invoices,
Related Rights or Goods.

 
7.5  
We may at any time, at your request or at our discretion, convert any payment
received by us in or towards settlement of Invoices and/or any of our
obligations to you or your obligations to us which are owed in a currency other
than Euro into Euro at the Bank’s prevailing spot rate of exchange.  Where the
currency of the Current Account is different to that in which a Customer pays an
Invoice and/or that in which the Nominal Amount is paid and as a result there is
an exchange rate loss or gain when the Invoice is paid, we shall debit any loss
and credit any gain to the Current Account.

 
8  
WARRANTIES

 
8.1  
On the date of the Agreement and each time you Notify Invoices to us, you
warrant that:

 
8.1.1  
except as disclosed to us in writing before the Start Date, there are no
Security Interests affecting your Invoices and you have not sold your Invoices
to any other person;

 
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8.1.2  
you have told us about every material fact or matter which you know, or ought to
have known, might influence us in deciding whether to enter into the Agreement
or to classify an Invoice as Approved or Disapproved or to accept person as a
guarantor or in determining any Review Limit or Approval Limit; and

 
8.1.3  
all reports, accounts, and other information supplied to us are accurate and
complete.

 
8.2  
The warranty in clause 8.1.2 includes any past Insolvency of your directors or
shareholders or of any company in which they have been interested or any
disqualification at any time of any of your directors or any holder of a
corporate mandate acting as a director or corporate mandate holder.

 
8.3  
In relation to each Invoice Notified to us, you warrant, both on the date of
Notification and on each Working Day until that Invoice is paid, that:

 
8.3.1  
the Contract of Sale giving rise to the Invoice:

 
8.3.1.1  
is valid and enforceable against the Customer;

 
8.3.1.2  
is governed by Dutch law or another law approved by us in writing;

 
8.3.1.3  
provides for the Customer to submit to the jurisdiction of the Dutch Courts or
the courts of an Approved Country;

 
8.3.1.4  
does not include any prohibition against assignment, pledge or assignation of
the Invoice or the Contract of Sale;

 
8.3.1.5  
provides for payment in Euro or an Approved Currency;

 
8.3.1.6  
provides for payment on or before the end of the Funding Period;

 
8.3.1.7  
does not provide for cash on delivery, sale or return or for payment in advance
or by stage payments; and

 
8.3.1.8  
arises from your normal trading activities disclosed to us before the Start
Date;

 
8.3.2  
the Invoice relates to an actual sale and you have delivered the Goods or
carried out the works or services to which the Invoice relates according to the
Contract of Sale;

 
8.3.3  
you have sent to your Customers all Invoices Notified to us and, in the case of
Invoice Discounting Clients whose Agreement is disclosed or Factoring Clients,
those invoices and all reminders and statements include notices of assignment,
pledge or assignation in our preferred form;

 
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8.3.4  
the details of the Invoice Notified to us are correct and complete and the
Invoice has not been Notified to us before;

 
8.3.5  
the Notified Value of each Invoice is the amount due in respect of it and any
prompt payment or bulk order discount does not exceed that agreed by us;

 
8.3.6  
no right of set-off, compensation or counterclaim exists which will reduce or
extinguish the Notified Value of an Invoice or affect our ability to collect the
Invoice in full;

 
8.3.7  
so far as you are aware, the Customer is creditworthy and is not Insolvent;

 
8.3.8  
the Customer is not an Associated Business;

 
8.3.9  
to the extent referred to in the Invoice, the Contract of Sale has been
performed and the Invoice has become due;

 
8.3.10  
there is no Security Interest, tracing or other third party right or claim which
may adversely affect our title to an Invoice or our Security Interest relating
to that Invoice, its Related Rights or Goods;

 
8.3.11  
the Customer has an established place of business in the Netherlands or an
Approved Country;

 
8.3.12  
in relation to Invoice Discounting Clients and Receivables Clients, the Invoice
is not a Non-Notifiable Invoice;

 
8.3.13  
if the Invoice is an Export Invoice, you additionally warrant that:

 
8.3.13.1  
the Customer has all licences and permits necessary to import and pay for the
Goods and/or services in the Approved Country; and

 
8.3.13.2  
the export of the Goods or services and payment by the Customer is not unlawful
under any applicable law.

 
9  
UNDERTAKINGS

 
9.1  
You agree with us that you will:

 
9.1.1  
tell us immediately:

 
9.1.1.1  
about any material dispute (whether justifiable or not) between you and a
Customer and any claim or attempt by a Customer to pay less than the Notified
Value of an Invoice and give us copies of any correspondence;

 
9.1.1.2  
anything which may materially affect a Customer’s creditworthiness;

 
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9.1.1.3  
if any person claims or tries to claim title to your Goods;

 
9.1.1.4  
if whomever controls or manages your company or business changes;

 
9.1.1.5  
if you breach any of your warranties to us;

 
9.1.1.5.1  
about any Associated Business and if they start or cease trading;

 
9.1.1.5.2  
about any returned Goods; or

 
9.1.1.5.3  
if you purchase Goods or services from or owe any money to any Customer or there
are any contracts or other arrangements between you and your Customer, which
could reduce the Notified Value of an Invoice;

 
9.1.2  
if we ask:

 
9.1.2.1  
give us any information about your Customers that we require;

 
9.1.2.2  
send us proofs of delivery or other evidence that you have delivered Goods or
performed your services according to the Contract of Sale;

 
9.1.2.3  
tell us about your bank accounts and if you open any bank account and, if we
request, send us copies of any bank statements; for the avoidance of doubt, we
are aware that you have opened bank accounts for outgoing payments;

 
9.1.2.4  
at your own expense, formally pledge (as instructed) to us in the way we require
specific Invoices and their Related Rights including any credit insurance; or

 
9.1.2.5  
keep any returned Goods separate from other Goods and deliver them to us or deal
with them as we direct;

 
9.1.3  
try to promptly resolve any Customer’s disputes and claims;

 
9.1.4  
ensure that all Invoices are paid at any time into a Collection Account;

 
9.1.5  
not vary any payment terms or settlement discount in respect of any Invoice nor
waive, vary, rescind or terminate any Contract of Sale;

 
9.1.6  
promptly perform any continuing obligations under any Contract of Sale, such as
repairing or maintaining Goods, providing drawings, documents or information, or
performing any other services or obligations;

 
9.1.7  
promptly raise and send to a Customer any credit note that is validly due and
then Notify it to us.  However, we may at any time require you either:

 
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9.1.6.1  
to send credit notes to us for approval and we may send or refuse to send them
to your Customers; or

 
9.1.6.2  
to cease issuing credit notes without our specific agreement;

 
9.1.8  
promptly Notify us of any other matters (such as early payment or bulk purchase
discounts) which may cause the Notified Value of  Invoices to be reduced or
extinguished and not, without our specific agreement, grant any prompt payment
or bulk purchase discount;

 
9.1.9  
comply with any procedure we set in relation to the day to day administration of
the Agreement and send us any documents we ask for;

 
9.1.10  
allow our employees or agents to enter your premises (or any location where
Goods or records are stored) at any reasonable time in order to:

 
9.1.9.1  
audit and verify your sales ledger and to ensure that you are adhering to the
procedures we require;

 
9.1.9.2  
remove (or at your expense) copy or check the terms of Contracts of Sale, your
purchase ledgers, your accounting records (including the status of your
preferential creditors), correspondence, orders and any other documents or
computer files we require; or

 
9.1.9.3  
review those Related Rights capable of review, inspect Goods, or complete a
Contract of Sale or collateral contract;

 
9.1.11  
maintain accurate accounting books and records and have them audited at least
once every year and as soon as the accounts have been signed off or at the
latest within eight months of the end of your financial year send us a copy of
your audited accounts, together with any statement or report from your auditors
and the annual management report;

 
9.1.12  
each month provide us with a profit and loss account and balance sheet of each
trading entity and from Milacron B.V. (referred to as Europe) and a
reconciliation between the month end open item sales ledger and the statement
from LloydsTSB and promptly send us any other financial or other information we
may request relating to your business or affairs;

 
9.1.13  
give our bankers such instructions or indemnities as they may require to collect
non-transferable instruments made payable to you; and

 
9.1.14  
provide us with such security as we may from time to time reasonably require to
secure the Secured Obligations.

 
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9.2  
You will not:

 
9.2.1  
except where we have agreed in writing, create any Security Interest  over your
Invoices or rights under the Agreement nor factor nor discount your Invoices
other than to us; and/or

 
9.2.2  
enter into any hire purchase or equipment leasing facilities without first
obtaining an offer from us.

 
9.2.3  
open any bank account (which is not a Collection Account) without our prior
consent.

 
10  
TERMINATION EVENTS

 
10.1  
Each of the following is a Termination Event:

 
10.1.1  
you breach or threaten to breach any warranty, undertaking or other obligation
given or undertaken by you in the Agreement;

 
10.1.2  
you fail to pay any sum due from you to us under the Agreement;

 
10.1.3  
you become Insolvent, or any step is taken which could result in you becoming
Insolvent;

 
10.1.4  
you fail to pay any sum due under any other financing facility made available by
us or any other person to you or otherwise breach the terms of any such
facility;

 
10.1.5  
any person who has given us a guarantee or indemnity or granted a Security
Interest as security for your obligations to us dies or becomes Insolvent or
gives or attempts to give notice terminating, amending or withdrawing such
guarantee, indemnity or security;

 
10.1.6  
you sell or dispose of the whole or a substantial part of your undertaking,
property or assets or cease to carry on the business conducted by you on the
date of the Agreement;

 
10.1.7  
without our prior written consent, there is a material change in composition of
your board of directors or partners or senior management or any change in the
ownership of 10 per cent or more of your shares (unless such change is a result
of a transfer of shares to an Associated Business) or in your constitution or
composition;

 
10.1.8  
we reasonably consider there is a deterioration in your overall financial
condition or in your operating performance or your overall management and
control or in your general day to day administration and organisation or in your
sales ledger administration or credit control procedures;

 
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10.1.9  
any person, who has waived or released its rights to your Invoices or their
Related Rights, withdraws or attempts to withdraw, such waiver or release or
otherwise asserts any interest in your Invoices or Related Rights;

 
10.1.10  
you attempt to reject any variation to the Operating Conditions made by us;

 
10.1.11  
any of the Secured Obligations owing by a Guaranteed Company become due and
payable; and

 
10.1.12  
the Agreement or any guarantee, indemnity or Security Interest granted as
security for your obligations to us ceases to be legally valid, binding or
enforceable or it is or becomes unlawful for you or any other person to perform
your or their obligations under the Agreement or such guarantee, indemnity or
security and any such defect is not remedied within 10 Working Days after
determination of such defect.

 
10.2  
Upon or at any time after a Termination Event has occurred (whether or not we
actually terminate the Agreement) or following the expiry of any notice to
terminate the Agreement, we may by written notice to you (and as well as
exercising any of our other rights under the Agreement or any other facility we
have made available to you) do all or any of the following (either at the same
time or at separate times):

 
10.2.1  
if the Facility is confidential, disclose this Facility to your Customers and
simultaneously or at a later date cancel your agency to collect Invoices;

 
10.2.2  
reduce the Advance Rate to zero or such other percentage as we may decide;

 
10.2.3  
classify all or any Invoices as Disapproved;

 
10.2.4  
apply a Reserve in such amount as we may decide;

 
10.2.5  
combine your Current Accounts (if you have more than one) and any loan or other
accounts maintained by us;

 
10.2.6  
refuse requests for withdrawals from the Current Account;

 
10.2.7  
demand immediate payment of:

 
10.2.7.1  
any Debit Balance on your Current Account (or combined Current Accounts);

 
10.2.7.2  
any Fees and Charges or other monies or liabilities which you owe us actually,
contingently or prospectively.  If we cannot calculate the precise amount owing
to us on the date of demand we may include a reasonable estimate in our demand;

 
10.2.8  
debit to your Current Account, in addition to any ot her fees to which we may be
entitled, a fee equal to 10% of the Notified Value of all Invoices (including
VAT) which are unpaid on the date we serve notice under this clause and which
come into existence thereafter.  You agree that this fee represents a reasonable
estimate by us of the costs of the additional services and administration which
will be provided by us following a Termination Event;

 
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10.2.9  
terminate the Agreement and charge you the fees for early termination (if
applicable) referred to in the Asset Based Finance Agreement;

 
10.2.10  
at your cost appoint accountants or any other professional to investigate your
business, assets or affairs, to ascertain your financial position or, in the
case of Invoice Discounting Clients, review your sales ledger administration
and/or credit control procedures;

 
10.2.11  
if you are an Invoice Discounting Client, request you to start Notifying
Non-Notifiable Invoices to us and/or convert you to a Factoring Client.

 
10.3  
Termination of the Agreement will not affect any of your or our respective
rights and obligations which arose under it prior to such termination and, in
particular, our rights in respect of Invoices assigned or pledged to us and our
power of attorney will survive such termination.  You will continue, subject to
applicable Insolvency laws, to Notify Invoices to us after termination of the
Agreement and after the occurrence of a Termination Event until, in either case,
repayment of all Debit Balances. Such rights and obligations shall only cease
when all monies due from you to us and from us to you have been paid in full.

 
11  
ASSIGNMENT OR PLEDGE OF INVOICES

 
11.1  
In the event the Facility relates to Factoring, you will undertake to assign on
a disclosed basis to us all your Invoices which are outstanding on the Start
Date and you undertake to assign on a disclosed basis in advance all your
Invoices, which arise after the Start Date until the Agreement terminates. The
relevant provisions on assignment in the Operating Conditions Part II and Part
IV for Factoring Clients apply accordingly.

 
11.2  
In the event the Facility relates to Invoice Discounting, Invoice Discounting or
Receivables Financing, with export and currency facilities, you will undertake
to pledge either on a disclosed basis (openbaar pandrecht) or on an undisclosed
basis (stil pandrecht) to us all your Invoices which are outstanding on the
Start Date and you undertake to pledge either on a disclosed basis (openbaar
pandrecht) or on an undisclosed basis (stil pandrecht) in advance all your
Invoices, which arise after the Start Date until the Agreement terminates. The
relevant provisions to pledge either on a disclosed basis (openbaar pandrecht)
or on an undisclosed basis (stil pandrecht) in the Operating Conditions Part II,
Part III or Part V for Invoice Discounting Clients apply accordingly.

 
11.3  
We grant you the authority as provided in Art. 3:246 paragraph 4 of the Dutch
Civil Code, to have and accept the right to, until the occurrence of a default
(verzuim), to collect any Invoices from any relevant debtor without restriction
and to make if possible the Invoices due and payable. Following default, we
shall henceforth exclusively be entitled to collect the pledged or assigned
Invoices, to receive payments and to make – if possible – the pledged or
assigned Invoices due and payable.

 
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11.4  
Notwithstanding the provisions of condition 5 above, upon the occurrence of a
Termination Event which constitutes a default (verzuim) within the meaning of
Article 6:81 and Article 3:248 of the Dutch Civil Code:

 
(i)  
we can take, and are hereby authorised to take, all necessary judicial and
extra-judicial measures.  If we do take measures as mentioned in the previous
sentence, you will offer any and all required support, including but not limited
to all necessary documents and information with regard to the relevant Invoice;

 
(ii)  
in the case of an undisclosed pledge or assignment, you will promptly notify
(mededeling) in writing, at your own costs, the existence of the pledge or
assignment to:

 
(a)  
a third party or the court process server (deurwaarder) acting on behalf of such
third party making an attachment (beslag) on its Invoices; or

 
(b)  
its bankruptcy trustee (curator), administrator (bewindvoerder) or similar
officer in any jurisdiction; or

 
(c)  
any other relevant person, as the case may be.

 
you may serve notice to instruct any relevant debtor owing pledged or assigned
Invoices to make any and all payments in or towards satisfaction of such pledged
or assigned Invoices to us in accordance with Article 3:246 of the Dutch Civil
Code.
 
       11.5
You are not entitled to request the President of the competent court (rechtbank)
to order that the Invoices shall be sold in a manner deviating from the
provisions of Article 3:250 of the Dutch Civil Code.

 
12  
REPURCHASE

 
12.1  
We may at any time (i) reassign all or any Invoices and their Related Rights,
(ii) or release the pledge of all or any Invoices and their Related Rights, to
you.

 
12.2  
The repurchase price payable by you to us for any Invoice repurchased by you
will be its Notified Value plus all relative Fees and Charges less all sums
received in or towards discharge of the Invoice.  If we require you to
repurchase all of your Invoices, then, for administrative convenience, their
repurchase price will be the Debit Balance after we have debited all Fees and
Charges and any other monies and liabilities actually, contingently or
prospectively owing by you to us.

 
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12.3  
Upon payment of the repurchase price for an Invoice, our rights in that Invoice
and its Related Rights will transfer to you.  We will, if requested by you, at
your expense, execute a formal re-assignment or release letter to you of any
Invoices repurchased and give notice of such repurchase to your Customers.

 
12.4  
This Condition 12 is not applicable to Receivable Clients.

 
13  
COMMUNICATIONS BETWEEN US

 
13.1  
Unless we agree otherwise, you will Notify us of all Invoices, credit and debit
notes, daily cash collections (if you are an Invoice Discounting Client) and all
other sale and purchase ledger information electronically through the Website
and in such format as we may require.

 
13.2  
We will provide regular statements to you relating to your accounts with us
electronically through the Website, unless we agree otherwise. It is your
responsibility to access this information and other communications from us by
accessing the Website on a regular basis.  Unless you notify us within 30 days
of us posting your statement to the Website that any item is incorrect, then,
that statement will be binding upon you, unless we have made an obvious error.

 
13.3  
All information we provide to each other through the Website (unless corrupted
as a result of technical failure) has the same status as if it had been in
writing or other printed form and signed by the provider and neither of us will
challenge the validity of such information solely because it was prepared, sent
or received only in electronic form.  Where the Agreement requires a consent,
waiver or notice given by us to be in writing such condition shall (unless it is
notice to terminate or a variation of the Commercial Terms) be satisfied if it
is transmitted through the Website.  We may require you to provide hard copies
of any information provided by you electronically.

 
13.4  
In any proceedings or claim, you will accept and be bound by a certificate
signed by us as to the balance on any accounts and the amounts due and owing by
either of us to the other, unless we have made an obvious error.

 
13.5  
We may accept and rely upon any signature, communication or information
ostensibly sent by you even though you may not actually have given or sent it or
the sender or provider had no authority to send or provide it.  This applies
whether the communication is written, oral or through the Website.

 
13.6  
In regard to the form of pledge and/or assignment that you must provide us on
each Notification Date, you will provide us with an original form manually
signed by a duly authorised representative or, or in any other form as agreed
with you, from time to time.

 
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14  
VARIATIONS

 
14.1  
The Agreement incorporates the Operating Conditions in force from time to
time.  Variations to these Operating Conditions can be made by us after
consultation with you. Any variation shall take effect immediately after we have
reached an agreement on the variations to be made.

 
14.2  
If we are unable to reach an agreement (acting upon good faith) on the variation
of the Operating Conditions, we shall agree upon a date which is not later than
two months after cessation of our negotiations to reach an agreement, after
which date you shall cease to use the Facility and repay all amounts
outstanding.

 
14.3  
The Agreement incorporates the Commercial Terms in force from time to time.  We
may mutually agree to change the Commercial Terms. In these circumstances, we
shall both agree revised Commercial Terms which are to apply and they will be
provided to you in hard copy form.  Any such revised Commercial Terms which are
then signed on behalf of each of us shall be deemed to be the new Commercial
Terms and shall vary the previous Commercial Terms from the date of the last
signature on such revised Commercial Terms.

 
15  
COMMUNICATIONS WITH PROFESSIONALS AND OTHERS

 
15.1  
We may:

 
15.1.1  
provide your bank, the Bank or any company in the Bank’s group or your auditors,
accountants and other professional advisers with such information as they may
require in relation to your business and affairs and the terms, operation and
account balances under the Agreement;

 
15.1.2  
obtain from your bank, auditors, accountants and other professional advisers
such information as we may require; and/or

 
15.1.3  
subject to us consulting with you prior thereto, obtain from your Customers
their consent to taking of references from their bankers.

 
15.2  
You have (or will) authorise the persons referred to above to give us such
information.

 
15.3  
We may disclose such information about you and any other person as we see fit to
any potential assignee, transferee, sub-participant or delegate of our rights or
obligations under the Agreement.

 
16  
DATA PROTECTION

 
16.1  
You agree that any and all information you supply to us or that we may otherwise
acquire relating to any individual associated with or engaged by your business
and/or a Customer’s business (including but not limited to a sole trader,
director, shareholder, partner, member, employee, guarantor and/or indemnifier)
may be used by us for the purposes of:

 
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16.1.1  
deciding whether to enter into the Agreement with you;

 
16.1.2  
performance of the Agreement and/or any other ancillary or related agreement;

 
16.1.3  
exercising our right and/or obligations under the Agreement and/or any other
ancillary or related agreements; and/or

 
16.1.4  
preventing fraud and/or money laundering;

 
any may be disclosed to and/or used by the Bank and any company in the Bank’s
group and/or any credit reference agencies and fraud prevention and/or
prosecution agencies.
 
16.2  
Where you provide Personal Data to us about any individual who is not a party to
the Agreement, you warrant and undertake that the Personal Data have been
collected, processed and transferred in accordance with applicable data
protection laws (including the Data Protection Act) and that the individuals
concerned have explicitly agreed to the use and disclosure of such Personal Data
(which may include Sensitive Personal Data) in accordance with the terms of this
condition 16.

 
16.3  
You warrant that you are registered under the Data Protection Act as a data
controller, that you have duly completed any and all filings, declarations or
other formalities required by law in this regard, and that your registration,
declarations and filings cover the processing of Personal Data in accordance
with the Agreement.

 
16.4  
You warrant that you shall process any Personal Data of which we are a data
controller (as defined under the Data Protection Act) in accordance with any and
all data protection legislation in force from time to time.  In processing such
Personal Data, you shall act only upon instructions given to you by us, unless
otherwise required by law and/or by the data subject where appropriate.

 
16.5  
You warrant to take appropriate technical and organisational security measures
in order to safeguard the Personal Data being processed in accordance with the
Agreement, from accidental loss or destruction, from alteration or unauthorised
disclosure or access, and from any unlawful forms of processing.  You shall
notify us immediately of any breaches of security in relation to such Personal
Data immediately upon becoming aware of such breaches.  We shall be entitled to
carry out and/or engage a third party to carry out on our behalf, an audit of
your premises to check your compliance with this condition 16.  You warrant that
any third party you authorise to have access to the Personal Data will respect
and maintain the security and confidentiality of the Personal Data and will only
act under your instructions.

 
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16.6  
We shall be entitled to transfer any Personal Data processed in accordance with
the Agreement outside the EEA.  You warrant and undertake that you have obtained
any necessary consents from relevant individuals and/or agencies for such
transfer.

 
16.7  
Each party shall appoint and identify to the other party a named individual
within its organisation to act as a point of contact for the other party or any
regulator relating to Personal Data.

 
17  
PARTNERSHIPS AND SOLE TRADERS

 
17.1  
Where you are a partnership, the provisions of this condition 17 apply.

 
17.2  
The undertakings and warranties contained in the Agreement are given by each
member or partner and your obligations to us are joint and several.

 
17.3  
We may:

 
17.3.1  
release or reach a compromise with any member or partner without affecting our
rights against the other members or partners or the partnership;

 
17.3.2  
treat a notice or demand by us to any member or partner as a notice or demand
given to the other members or partners or to the partnership (but we need not
treat a notice or demand in such manner);

 
17.3.3  
treat a notice or demand by any member or partner to us, as a notice or demand
given by the firm or all the members or partners (but we need not treat a notice
or demand in such manner);

 
17.3.4  
treat the Agreement as binding upon any successors, heirs, assigns or personal
representative of any of you and upon any agent, administrator, liquidator or
other persons acting on behalf of any of you, whether court-appointed or
voluntary; and

 
17.3.5  
require you to include wording on each Notification so that it takes effect as
an offer by you to sell us the Invoices referred to in it.

 
17.4  
You will notify us in writing as soon as any member or partner leaves the
partnership.

 
17.5  
A retiring member or partner will have no obligations to us in respect of
Invoices assigned or pledged to us after you have notified us of his
retirement.  However, he will remain liable to us for all matters occurring
prior to such notification.

 
17.6  
You warrant that the individuals or entities signing the Agreement comprise all
your members or partners.  You will notify us of the admission of a new member
or partner to your partnership.  You will procure that any new member or partner
executes such documents we may require to ensure that he is bound by the terms
of the Agreement and is placed under the same obligations as you.  If you change
your trading style, or adopt another style, or incorporate your business, you
will notify us of such fact, and if required by us, enter into such further
agreement with us as may be necessary.

 
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17.7  
Notwithstanding any change in your partnership, we may account to you or
exercise all our rights against you, including our right of set off as if there
had been no such change.

 
17.8  
If required by us, you will take all steps necessary to enable us to proceed to
any legal formalities we deem necessary for the recognition of the Agreement.

 
17.9  
If you are a sole trader, you will seek our consent before entering into a
partnership with another person or incorporating your business.

 
18  
NOTICES

 
18.1  
Any notice given by us to you to terminate the Agreement or vary the Commercial
Terms shall be in writing and sent by post or by courier.  Any other notice from
us to you may be given by post, courier, telephone, facsimile or e-mail.  Any
notice served by post shall be addressed to you at either your address stated in
the Commercial Terms, your registered office or the address last known to us at
which you carried on business.

 
18.2  
Notices and other communications sent or given by us shall be treated as served:

 
18.2.1  
if delivered by courier: at the time of delivery;

 
18.2.2  
if posted: 48 hours after posting or upon receipt (whichever is earlier); and

 
18.2.3  
if sent or given by telephone, facsimile or e-mail at the time of the
conversation or transmission (unless the sender knows or ought reasonably to
have been aware of a transmission failure).

 
18.3  
Any notice given by you to us, including notice to terminate the Agreement, must
be in writing and sent by registered post, return receipt requested, to us at
our registered office or such other address as we advise to you in writing for
this purpose and will take effect when it is received by us.

 
19  
GENERAL

 
19.1  
We may novate or assign any of our obligations, rights and remedies under the
Agreement or sub-contract or delegate our obligations or duties.  You will not
assign any of your rights nor delegate any of your duties under the Agreement.

 
19.2  
No delay or omission by us in exercising any of our rights or remedies shall
impair or operate as a waiver of them.  No waiver by us of any breach of your
obligations to us shall constitute a waiver of any other breach.  No single,
partial or defective exercise by us of any right shall preclude our further
exercise of our rights.  Our rights are cumulative and not exclusive of any
rights provided at law or in equity.

 
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19.3  
The terms of the Agreement are agreed by us and by you to be reasonable.
However, if any provision is valid only if some other provision or a part of it
is deleted then such other part or provision shall be treated as deleted.

 
19.4  
Except where specifically provided, the Agreement may only be enforced by the
parties to it and the parties may rescind or vary it without the consent of any
other person.

 
20  
INTERPRETATION

 
20.1  
In the Agreement:

 
20.2  
unless the context otherwise provides, the singular includes the plural and vice
versa;

 
20.3  
a reference to any gender includes any other gender;

 
20.4  
the headings are for convenience only and shall be ignored in its
interpretation;

 
20.5  
references to a “clause” or “condition” are to a clause of the Commercial Terms
or a condition of the Operating Conditions and, unless otherwise specified, any
reference to a condition, is to a condition in the Operating Conditions – Part
II – Provisions relating to all Clients;

 
20.6  
references to the “Agreement” are to the receivables finance agreement entered
into by both of us and the Operating Conditions incorporated therein as varied,
replaced or supplemented from time to time;

 
20.7  
any reference to a “person” is to any individual, firm, company, corporation or
partnership;

 
20.8  
the meaning of general words introduced by the word “other” is not to be limited
by reference to any preceding word indicating a particular class of acts,
matters or things;

 
20.9  
unless the context otherwise requires, where in or in relation to any place
outside the Netherlands, the meaning of a word or expression used in the
Agreement is to be considered and such word or expression has no counterpart in
that place, it is to have the meaning of its closest equivalent in that place;

 
20.10  
any reference to a law, decree or any subordinate or other legislation or
regulation shall be construed as a reference to that legislation or regulation
as subsequently amended or re-enacted and shall include all subordinate text
deriving authority from any law;

 
20.11  
any term or phrase defined in the Dutch Civil Code (whether capitalised or not)
bears the same meaning in the Agreement;

 
20.12  
any reference to “we” or “us” includes our transferees and assignees; and

 
20.13  
any reference to “you” means you in whatever name or style you carry on
business.

 

 
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Execution copy

 
OPERATING CONDITIONS - PART III
 
PROVISIONS RELATING TO INVOICE DISCOUNTING CLIENTS ONLY
 
 
1  
AGENCY APPOINTMENT

 
1.1.  
We appoint you as our agent, at your expense, to administer Customers’ accounts
and to collect and enforce payment of Invoices for our benefit.  You accept such
appointment and agree to act promptly and efficiently in carrying out your
duties and to follow any instructions which we may give you.  You will ensure
that all Invoices are promptly and accurately entered in your sales ledger.  You
will instruct your bankers to transfer to the Collection Account all credit
transfers received by you.  You will not instruct a lawyer or other agent to
collect any Invoice without our prior written approval and, then, only on terms
approved by us.

 
1.2.  
You will open a Collection Account in respect of each Invoice Discounting,
Currency and/or Export Facility made available by us to you.  All balances in
the Collection Account are held solely for our account and benefit in escrow and
you will notify the bank holding the Collection Account of such exclusivity and
take all steps necessary, including the conclusion of an escrow agreement, to
implement the exclusivity.  Until notice from us to the contrary, you will
direct your Customers to settle their Invoices by making payment directly into
that account.  If you receive payment (even if it is made payable to us) you
will immediately upon receipt pay it into the Collection
Account.  Alternatively, if we require, you will deliver to us or pay into such
bank account as we may nominate all cash or other remittances endorsing the same
where necessary. You will keep any payment received by you as our agent, pending
payment into the Collection Account or to any other account nominated by us,
separate from your own money.

 
1.3.  
[You shall grant, whether or not in advance, for our benefit, a disclosed first
priority right of pledge (openbaar pandrecht eerste in rang) over the balances
in the Collection Account in our favour, in the manner set forth in Article
3:236 paragraph 1 jo. Article 3:98 jo 3:94 paragraph 1 of the Dutch Civil Code,
and in accordance with the form advised by us.]

 
1.4.  
Where we have agreed that the Agreement is disclosed, then you will include the
wording which we will provide to you on each Invoice.

 
1.5.  
Where we have agreed that the Agreement is confidential, then, for the moment,
neither you nor we will notify your Customers that you have pledged your
Invoices to us.  However, we may at any time vary or terminate your agency to
collect either some or all of your Invoices.  We may:

 
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1.5.1.  
give (or require you to give) notice to some or all of your Customers of the
pledge of their Invoices and the Related Rights to us;

 
1.5.2.  
either simultaneously with giving such notice or at a later date, instruct your
Customers to pay us directly;

 
1.5.3.  
require you to send us a copy of your sales and purchase ledger and such other
records as we may require;

 
1.5.4.  
require you to forward all Invoices to us for issuing by us and we will, at your
expense, administer Customers’ accounts.

 
1.6.  
You will confirm to your Customers the effect of any notice served on them and
if your agency to collect Invoices has been terminated you will cease to hold
yourself out as our agent to collect Invoices.  The provisions of condition 5 of
the Operating Conditions – Part II – Provisions relating to all Clients shall
then apply.

 
1.7.  
You will pay those costs specified in the Commercial Terms for maintaining the
Collection Account.

 
1.8.  
You hereby authorise us or any person nominated by us to contact your Customers
to verify the amount of each Invoice due from them, the due date for payment and
in the case of overdue Invoices, the date when payment can be expected.  You
will assist us or our nominee in any way we require and you authorise us and
them to disclose their identity if required to do so by law or if requested by a
Customer.

 
2.  
PLEDGE OF INVOICES - DISCLOSED

 
2.1.  
You hereby pledge to us on the terms of the Agreement:

 
2.1.1.  
all your Invoices which are outstanding on the Start Date; and

 
2.1.2.  
all your Invoices, which arise after the Start Date until the Agreement
terminates, from the list of Customers set out in Annex I to these Operating
Conditions, as agreed and amended by the parties from time to time.

 
In order to perfect the pledge of the Invoices as referred to in 2.1.1 and 2.1.2
you will execute a deed of pledge substantially in accordance with the form of
agreement as set out in Annex II to these Operating Conditions, and Notify in
writing all Customers set out in Annex I to these Operating Conditions of the
pledge of their Invoices to us in the form set in Annex III and, insofar as
necessary, you hereby provide us the authority to effect such Notification
ourselves, in the event you fail to deliver such Notifications.
 
Other than as set our above, neither of us needs to take any further action to
pledge your current and future Invoices pledged by this clause.
 
At the same time as you pledge your Invoices to us, you also pledge (and will
offer to pledge) to us Related Rights in relation to those Invoices.  We will
credit to your Current Account the Notified Value of any invoices and their
Related Rights so pledged by you to us. Neither of us needs to take any other
further action to pledge to us such Related Rights, but you agree to deliver
such further documents and take such further action as we may reasonably require
in furtherance of the Agreement in regard to the pledge of such Related Rights.
It is specified that in the case of Related Rights which are constituted by
negotiable instruments such as bills of exchange, drafts and notes, such
instruments will be endorsed to our favour upon the pledge of the corresponding
Invoices, in view of collection of such instruments on their maturity dates.
 
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2.2  
If an Invoice or its Related Rights is for any reason not formally pledged to
us, you will hold such Invoice and its Related Rights for us as our agent and
for our account and benefit.  If you receive any cash or other forms of payment
for any Invoices, then:

 
2.2.1.  
you will hold them for us as our agent and for our account and benefit;

 
2.2.2.  
you will immediately deliver such payments to us (endorsed to us, if necessary)
or pay them into the Collection Account, the Current Account or any such bank
account as we tell you, but you must not pay them into any other bank account;
and

 
2.2.3.  
For the avoidance of doubt, we hereby remind you that this Facility is with
recourse, being expressly agreed that we shall have recourse against you in
relation to any pledge of Invoices and Related Rights, as expressly agreed
between us.

 
2.3.  
As security of your payment obligations under the Agreement, you hereby pledge
in our favour whether or not in advance, in accordance with Article 3:236 Dutch
Civil Code, any credit rights arising from the Invoices, as well as the Invoices
themselves and their Related Rights, for the amount resulting from the
difference between the aggregate Nominal Amount of the Notified Invoices and the
application of the Advance Rate to such aggregate Purchase Price. Upon payment
by the Customers of any Invoice, the pledge shall be deemed to be automatically
extended to any amounts collected. Enforcement of this pledge shall be effected
by means of set-off, compensation or counterclaim.

 
2.4.  
Article 3:236 paragraph 2 jo. article 3:98 jo. 3:97 and 3:94 paragraph 1 of the
Dutch Civil Code apply, mutatis mutandis, to all Invoices and Related Rights
that come into existence after the date of execution of the Agreement.

 
2.5.  
Notwithstanding (but without prejudice to) the foregoing, in order to render the
pledge enforceable against third parties, you will deliver to us on or prior to
each date of Notification a valid and duly completed and signed pledge form
covering the Notified Invoices and their Related Rights, and you will deliver
such further documents and take such further actions as we may reasonably
require in furtherance of the Agreement.  A sample pledge form for this purpose
is attached as Annex II.

 
47

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3.  
PLEDGE OF INVOICES - UNDISCLOSED

 
3.1  
You hereby pledge to us on the terms of the Agreement:

 
3.1.1  
all your Invoices which are outstanding on the Start Date; and

 
3.1.2  
all your Invoices, which arise after the Start Date until the Agreement
terminates, from the list of Customers set out in Annex I to these Operating
Conditions, as agreed and amended by the parties from time to time.

 
In order to perfect the pledge of the Invoices as referred to in 3.1.1 you
undertake to submit a signed form of pledge agreement (and any ancillary or
supporting document) as set out in Annex IV to these Operating Conditions
together with Annex I to these Operating Conditions disclosing the transaction
details relating to all Customers, no later than two Business Days after the
execution of the Agreement, for registration purposes with the competent Dutch
tax authorities (Inspectie der Registratie en Successie) and, insofar as
necessary, you hereby provide us the authority to effect such registration
ourselves, in the event you fail to deliver such registrations.
 
In order to perfect the pledge of the Invoices as referred to in 3.1.2 you
undertake to, on a [monthly1] basis, submit a signed pledge agreement as set out
in Annex IV to these Operating Conditions, no later than two Business Days after
the preceding [month2], for registration purposes and any ancillary or
supporting document with the competent Dutch tax authorities (Inspectie der
Registratie en Successie) and, insofar as necessary, you hereby provide us the
authority to effect such registration ourselves, in the event you fail to
deliver such registrations.
 
Neither of us needs to take any further action to pledge of your current and
future Invoices pledged by this clause.
 
At the same time as you pledge your Invoices to us, you also pledge (and will
offer to pledge) to us Related Rights in relation to those Invoices.  We will
credit to your Current Account the Notified Value of any Invoices and their
Related Rights so pledged by you to us. Neither of us needs to take any other
further action to pledge to us such Related Rights, but you agree to deliver
such further documents and take such further actions as we may reasonably
require in furtherance of the Agreement in regard to the pledge of such Related
Rights. It is specified that in the case of Related Rights which are constituted
by negotiable instruments such as bills of exchange, drafts and notes, such
instruments will be endorsed to our favour upon the pledge of the corresponding
Invoices, in view of collection of such instruments on their maturity dates.
 

--------------------------------------------------------------------------------

1 Monthly / quarterly / semi-annual / annual.
2 Month / quarter / half year / year.
 
48

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3.2  
If an Invoice or its Related Rights is for any reason not formally pledged to
us, you will hold such Invoice and its Related Rights for us as our agent and
for our account and benefit.  If you receive any cash or other forms of payment
for any Invoices, then:

 
3.2.1  
you will hold them for us as our agent and for our account and benefit; and

 
3.2.2  
you will immediately deliver such payments to us (endorsed to us, if necessary)
or pay them into the Collection Account or any such bank account as we tell you,
but you must not pay them into any other bank account.

 
3.3  
For the avoidance of doubt, we shall have recourse against you in relation to
any pledge of Invoices and Related Rights, in accordance with the terms of this
Agreement.

 
3.4  
As security of your payment obligations under the Agreement, you hereby pledge
in our favour whether or not in advance, in accordance with Article 3:239 Dutch
Civil Code, any credit rights arising from the Invoices, as well as the Invoices
themselves and their Related Rights, for the amount resulting from the
difference between the aggregate Nominal Amount of the Notified Invoices and the
application of the Advance Rate to such aggregate Purchase Price. Upon payment
by the Customers of any Invoice, the pledge shall be deemed to be automatically
extended to any amounts collected. Enforcement of this pledge shall be effected
by means of set-off, compensation or counterclaim.

 
3.5  
Article 3:239 paragraph 1 jo. article 3:98 jo. 3:97 and 3:94 paragraph 1 of the
Dutch Civil Code apply, mutatis mutandis, to all Invoices and Related Rights
that come into existence after the date of execution of the Agreement.

 
4.  
INFORMATION AND REPORTING REQUIREMENTS

 
4.1  
You will maintain a monthly open item ageing analysis, in such form as we may
require, showing the position of each Customer’s account on the last day of each
month, including details of any outstanding credit balances.

 
4.2  
You will supply to us wherever possible via the Website (or at our option make
available for inspection by us) the following documents and/or information
forthwith upon our request:

 
4.2.1  
copies of Invoices and all debit and credit notes or other documents evidencing
how an Invoice is reduced, paid or otherwise satisfied;

 
4.2.2  
the full terms of any Contract of Sale;

 
49

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4.2.3  
proof of the complete performance of each Contract of Sale;

 
4.2.4  
such other information and evidence as we may require relating to Invoices
Related Rights or Contracts of Sale;

 
4.2.5  
daily a report detailing monies collected by you as our agent; and

 
4.2.6  
within 15 days of the end of the month to which they relate or promptly upon our
request copies of:

 
4.2.6.1  
your open item ageing analysis;

 
4.2.6.2  
your sales ledger control account with a reconciliation of it to our month end
statement;

 
4.2.6.3  
your reconciliation of cash receipts into the Collection Account;

 
4.2.6.4  
your purchase ledger; and

 
4.2.6.5  
within one month (or other such period as we may reasonably specify) of the end
of the month to which they relate your monthly management accounts.

 
5.  
NON-NOTIFIABLE INVOICES

 
5.1  
Until we give you notice to the contrary, you must not Notify us of the
following Invoices:

 
5.1.1  
Invoices due from a director, officer, shareholder or employee of yours;

 
5.1.2  
Invoices due from any other person with which you maintain, other than your
habitual commercial or professional dealings, de facto or de jure economic or
financial links whether direct or indirect, or with which you have shareholders,
partners, directors, officers or managers in common;

 
5.1.3  
Invoices due from the sale of any of your capital assets;

 
5.1.4  
Invoices which are not due in respect of your trade, occupation or profession;

 
5.1.5  
Invoices where the Customer does not have an established place of business;

 
5.1.6  
Invoices arising under a hire purchase, leasing or consumer credit sale
agreement;

 
5.1.7  
Invoices due in respect of Goods delivered on sale or return or on approval;

 
50

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5.1.8  
Invoices arising under any Contract of Sale involving advance payments,
conditional sales, consignment sales, sales for which a provisional or pro forma
invoice has been issued, and Invoices for costs, interest for late payment or
other penalties to be paid by the Customer;

 
5.1.9  
Invoices arising under any Contract of Sale with the State or any local
government body or any entity subject to public law and benefiting from
sovereign or other immunity;

 
5.1.10  
Invoices arising under any Contract of Sale with a Customer who supplies goods
or services to you and which may therefore be subject to rights of set-off,
contra accounting, compensation, defence or cross-claim;

 
5.1.11  
those additional Invoices referred to in the Agreement as Additional
Non-Notifiable Invoices; and/or

 
5.1.12  
Export Invoices representing more than 10% of all your Invoices outstanding from
time to time. We may at any time require you to Notify us of Non-Notifiable
Invoices.

 
5.2  
We will Disapprove Non-Notifiable Invoices.

 
5.3  
We shall only make a Service Fee in respect of Non-Notifiable Invoices after we
have given you notice under condition 5.2 above.

 
6.  
OUR SERVICES

 
6.1  
In return for the Service Fee we will at your request or at any other time
should we so decide provide the following services relative to Notified
Invoices:

 
6.1.1  
advice on improvements to your collection procedures and assessing your need for
credit insurance;

 
6.1.2  
general advice on standard sales contracts, terms of payment, the use of
settlement discounts, evaluating the effect of changing invoicing methods and
terms;

 
6.1.3  
provision of statistical information based upon Invoices Notified to us;

 
6.1.4  
advice on export debtor procedures and the specific requirements of major
trading countries where we have arrangements with correspondents;

 
6.1.5  
assistance in reviewing general terms and conditions of suppliers in relation to
their reservations of title;

 
6.1.6  
advice on your relationship with your bankers;

 
51

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6.1.7  
checking and advising you on the accuracy of the monthly reconciliation of your
sales ledger to our month end statement;

 
6.1.8  
advice on your need for foreign exchange facilities or contingent liability
cover;

 
6.1.9  
daily information as to the status of your accounts with us;

 
6.1.10  
reviewing your reconciliation and monitoring the operation of the Collection
Account, including detailing dishonoured cheques or other defects in payment;

 
6.1.11  
liaising with lawyers or other agents instructed to collect Invoices; or

 
6.1.12  
inspecting your books and records relating to Invoices, including:

 
6.1.13  
general systems;

 
6.1.13.1  
maintenance of sales ledger;

 
6.1.13.2  
dunning cycles;

 
6.1.13.3  
overdue Invoices;

 
6.1.13.4  
control systems.

 
6.2  
The provision of any of the services in this condition 6 shall be without
responsibility on our part to the fullest extent permitted by law.

 
7.  
DISCOUNTING CLIENTS WHICH BECOME FACTORING CLIENTS

 
7.1  
If following a Termination Event we exercise our rights to cancel your agency to
collect Invoices and disclose this Facility to your Customers, we may also
convert you to a Factoring Client in which case:

 
7.1.1  
we will send you (at the same time as we serve notice on you) details of the
revised Commercial Terms which will include an increased Service Fee to reflect
the additional services provided by us to Factoring Clients and an Additional
Service Fee which we will charge in respect of Invoices which remain outstanding
more than [3 months] after the end of the month in which the Invoice is raised;

 
7.1.2  
we will provide you with access rights to Cash Connect which is the Website
interface for Factoring Clients;

 
7.1.3  
Operating Conditions – Part III – Provisions relating to Invoice Discounting
only, will cease to apply to you and Operating Conditions – Part IV – Provisions
relating to Factoring Clients only will become applicable; and

 
52

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7.1.4  
all Invoices subsequently issued by you will be endorsed as assigned to us.

 
7.2  
You will automatically become a Factoring Client on service of the notice at
condition 7.1.1 and will then be bound by the those Operating Conditions which
apply to Factoring Clients in place of those which apply to Invoice Discounting
Clients.

 
8.  
FEES

 
8.1  
If we have agreed a Minimum Fee:

 
8.1.1  
we will debit to your Current Account on the last Working Day of each month any
shortfall between the actual Service Fee paid by you in that month and the
monthly amount of any Minimum Fee; and

 
8.1.2  
that calculation will commence in the calendar month after the month in which
the Start Date occurs.

 
8.2  
We will debit any Monitoring Fee, Audit Fee, Arrangement Fee, Facility Fee,
Documentation Fee or Unused Line Fee specified in the Commercial Terms to your
Current Account at the intervals agreed with you.

 
8.3  
We will charge one twelfth of the Unused Line Fee monthly in arrears on the
amount by which during the preceding calendar month:

 
8.3.1  
your average Debit Balance; or

 
8.3.2  
where we have agreed to make Facilities available to you and any other members
of your group, your and their combined average Debit Balances; or

 
8.3.3  
where we have agreed to make a stock finance facility available to you and/or
any other member(s) of your group (and agreed to take it into account for these
purposes) the combined average Debit Balance on any such stock finance loan
account(s) and your and their combined Debit Balances;

 
falls short by more than the Agreed Percentage of the Review Limit (or any
aggregate Review Limit of the Facility/facility as indicated in condition 8.3,
where one has been agreed).
 
8.4  
If we provide services to a level of intensity which were not envisaged by us at
the time of entry into the Agreement (which includes you communicating with us
other than via the Website) then, in addition to the Service Charge, we may make
a reasonable charge for all costs and expenses (including the cost of our
administrative time and resulting loss of profit) for providing such services.

 
53

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8.5  
If at any time you exceed your Availability, then, in addition to demanding
immediate repayment of the excess, we may by notice to you increase our Fees and
Charges to reflect our increased risk.

 
9.  
EXPORT/CURRENCY INVOICES

 
9.1  
We may Approve, make Advances and pay the Nominal Amount in Euro for Export
Invoices Notified to us representing up to 10% of all your Invoices outstanding
from time to time.  If we do this we may adjust the Service Charge to compensate
for the additional work involved and a reasonable profit margin thereon.

 
9.2  
Unless we have agreed to make Currency Facility available all Currency Invoices
will be converted into Euro at the Bank’s spot rate of exchange on the day on
which the Invoice is Notified to us.

 

 

 
54

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ANNEXURE I
 
 
List of Customers
 

 
55

--------------------------------------------------------------------------------

 

 
ANNEXURE II
 
Form of Disclosed Pledge Agreement
 
Confidential
 

 
To:           LLOYDS TSB BANK PLC
Staten Bolwerk 1, 2011 MK Haarlem, the Netherlands

Date:                                            2008

Dear Sirs,

DEED OF PLEDGE

1.
We refer to the receivables finance agreement dated on or about the date hereof
(the “Agreement”) as the same may be amended, supplemented or restated from time
to time, under which we have undertaken to perform certain obligations pursuant
to borrowings made, which obligations shall, as a condition of the commitments
being made available under the Agreement, be secured, inter alia, by means of a
first priority right of pledge that shall be vested over the Invoices for your
benefit.

2.
Terms defined in the Agreement shall have the same meaning in this letter,
unless a contrary indication appears.

3.
In furtherance of our obligations as set forth above, we are providing for your
benefit, a disclosed first ranking right of pledge (openbaar pandrecht eerste in
rang) over the Invoices listed in Schedule I, in your favour, in the manner set
forth in Article 3:236 paragraph 1 jo. Article 3:98 and 3:94 paragraph 1 of the
Dutch Civil Code, for such period as determined in accordance with the
Agreement, and as security for the full and proper fulfilment of our
obligations.

4.
We acknowledge and agree, that if and to the extent that the Invoices are
subject to any right of pledge or other encumbrance, which take priority over
this deed of pledge, this right of pledge will have been created with the
highest possible priority (rangorde) available at such time of creation.

5.
This letter shall form an integral and inherent part of the Agreement.

6.
This letter may be signed in any number of counterparts, all of which taken
together shall constitute one and the same instrument.  Delivery of an executed
signature page by facsimile shall be as effective as delivery of a manually
executed document.

7.
This letter shall be governed by, and construed in accordance with, the law of
the Netherlands.  The parties hereto submit to the non-exclusive jurisdiction of
the courts of the Netherlands.  The parties hereto waive any defence of
inconvenient forum, which may be available.

 
56

--------------------------------------------------------------------------------

 
Please acknowledge your agreement to the terms of this letter by countersigning
the attached copy of this letter.

Yours faithfully
…………………………………….
for and on behalf of
[u]

We agree to the terms set out above.
…………………………………….
for and on behalf of
LLOYDS TSB BANK PLC
 

 

 
57

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Schedule I
 
 
Detail of Invoices
 
Invoice No.
Amount (including interest)
Currency
Invoice Date
Maturity Date
Approved Debtor
           

 

 

 
58

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ANNEXURE III
 
Form of Notification to Customers
 

To: 
BY REGISTERED MAIL
 
[Customer]

 
Attn: [u]

 
[address]

From: [Client]
 
[address]

Cc:
[u]

 
 
 
 
[city], [date]

 
 
Dear Sir/Madam,

 
RE:
[Company name] - NOTIFICATION OF PLEDGE OF RECEIVABLES

 
We refer to a disclosed deed of pledge of receivables, dated [u], by and between
[Client] and Lloyds TSB Bank PLC (the “Deed of Pledge”). Capitalised terms used
in this Notification to Customers shall have the same meaning given thereto in
the Deed of Pledge.
 
On behalf of Lloyds TSB Bank PLC we hereby notify you that pursuant to the Deed
of Pledge, we have created a first priority right of pledge over any and all
Invoices payable by you to the Client, by way of security in favour of the Bank
for its obligations under the Receivables Finance Agreement.
 
We instruct you to pay all accounts receivable due to [u] to the Bank to the
following account: [u].
 
Please acknowledge receipt of this notice by signing and returning this letter
us.
 
Yours sincerely,
 
[u]
 
By:
 
[authorised signatory]
 
59

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For acknowledgement of receipt:

 
[Customer]
 
Name:
 
Title:
 
Date:

 
60

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ANNEXURE IV
 
Form of Undisclosed Pledge Agreement
 
Confidential
 

To:           LLOYDS TSB BANK PLC
Staten Bolwerk 1, 2011 MK Haarlem, the Netherlands

Date:                                            2008

Dear Sirs,

DEED OF PLEDGE

1.
We refer to the receivables finance agreement dated on or about the date hereof
(the “Agreement”) as the same may be amended, supplemented or restated from time
to time, under which we have undertaken to perform certain obligations pursuant
to borrowings made, which obligations shall, as a condition of the commitments
being made available under the Agreement, be secured, inter alia, by means of a
first priority right of pledge that shall be vested over the Invoices for your
benefit.

2.
Terms defined in the Agreement shall have the same meaning in this letter,
unless a contrary indication appears.

3.
In furtherance of our obligations as set forth above, we are providing for your
benefit, an undisclosed first ranking right of pledge (stil pandrecht eerste in
rang) over the Invoices listed in Schedule I, in your favour, in the manner set
forth in Article 3:239 paragraph 1 jo. Article 3:98 and 3:94 paragraph 1 of the
Dutch Civil Code, for such period as determined in accordance with the
Agreement, and as security for the full and proper fulfilment of our
obligations.

4.
We acknowledge and agree, that if and to the extent that the Invoices are
subject to any right of pledge or other encumbrance, which take priority over
this deed of pledge, this right of pledge will have been created with the
highest possible priority (rangorde) available at such time of creation.

5.
As of the date hereof, we, or our representative, shall submit this letter for
registration with the competent Dutch tax authorities (Inspectie Registratie en
Successie) with a copy to you.

6.
This letter shall form an integral and inherent part of the Agreement.

7.
This letter may be signed in any number of counterparts, all of which taken
together shall constitute one and the same instrument.  Delivery of an executed
signature page by facsimile shall be as effective as delivery of a manually
executed document.

 
61

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8.
This letter shall be governed by, and construed in accordance with, the law of
the Netherlands.  The parties hereto submit to the non-exclusive jurisdiction of
the courts of the Netherlands.  The parties hereto waive any defence of
inconvenient forum, which may be available.

 
Please acknowledge your agreement to the terms of this letter by countersigning
the attached copy of this letter.

Yours faithfully
…………………………………….
for and on behalf of
[u]

We agree to the terms set out above.
…………………………………….
for and on behalf of
LLOYDS TSB BANK PLC

 
62

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Schedule I
 
Detail of Invoices
 
Invoice No.
Amount (including interest)
Currency
Invoice Date
Maturity Date
Approved Debtor
           

 

 
 

 
 

 
 

 
 

 

 
63

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OPERATING CONDITIONS - PART IV
 
PROVISIONS RELATING TO FACTORING CLIENTS ONLY
 
 
 
1  
OUR SERVICES

 
1.1  
We will:

 
1.1.1  
run your sales ledger; and

 
1.1.2  
collect payment of your invoices from your Customers by sending them monthly
statements and reminder letters where necessary in a format agreed with them.

 
1.2  
We may:

 
1.2.1  
give you information about Customers’ and possible new Customers’ credit status
within a reasonable period of you asking us.  We will not be liable to pay any
compensation or damages if the information we give is not accurate;

 
1.2.2  
approve, make Advances and pay the Nominal Amount in Euro in respect of Export
and/or Currency Invoices; or

 
1.2.3  
provide certain additional services.

 
2  
ASSIGNMENT OF INVOICES

 
2.1  
You hereby assign (or if such assignment is ineffective for any reason you will
undertake to pledge) to us on the terms of the Agreement:

 
2.1.1  
all your Invoices which are outstanding on the Start Date; and

 
2.1.2  
all your Invoices, which arise after the Start Date until the Agreement
terminates,

 
from the list of Customers set out in Annex I to these Operating Conditions, as
agreed and amended by the parties from time to time.
 
In order to perfect the assignment of the Invoices as referred to in 2.1.1 you
will notify in writing, in accordance with the notification form set out in
Annex III to these Operating Conditions, all Customers set out in Annex I to
these Operating Conditions of the assignment of their Invoices to us and,
insofar as necessary, you hereby provide us the authority to effect such
notification ourselves, in the event you fail to deliver such notifications.
 
64

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In order to perfect the assignment of the Invoices as referred to in 2.1.2 you
will execute a deed of assignment substantially in accordance with the form of
agreement as set out in Annex II to these Operating Conditions, and notify in
writing all Customers as set out in Annex I to these Operating Conditions of the
assignment of their Invoices to us in the form set in Annex III and, insofar as
necessary, you hereby provide us the authority to effect such notification
ourselves, in the event you fail to deliver such notifications.
 
Neither of us needs to take any further action to transfer to us ownership of
your current and future Invoices assigned by this clause.
 
At the same time as you assign your Invoices to us, you also assign (and will
offer to assign) to us Related Rights in relation to those Invoices.  We will
credit to your Current Account the Notified Value of any Invoices and their
Related Rights so assigned by you to us. Neither of us needs to take any other
further action to transfer to us such Related Rights, but you agree to deliver
such further documents and take such further actions as we may reasonably
require in furtherance of the Agreement in regard to the transfer of such
Related Rights. It is specified that in the case of Related Rights which are
constituted by negotiable instruments such as bills of exchange, drafts and
notes, such instruments will be endorsed to our favour upon the assignment of
the corresponding Invoices, in view of collection of such instruments on their
maturity dates.
 
 
2.2  
If an Invoice or its Related Rights is for any reason not formally assigned to
us, you will hold such Invoice and its Related Rights for us as our agent and
for our account and benefit.  If you receive any cash or other forms of payment
for any Invoices, then:

 
2.2.1  
you will hold them for us as our agent and for our account and benefit; and

 
2.2.2  
you will immediately deliver such payments to us (endorsed to us, if necessary)
or pay them into the Collection Account or any such bank account as we tell you,
but you must not pay them into any other bank account.

 
2.3  
For the avoidance of doubt, we shall have recourse against you in relation to
any assignment of Invoices and Related Rights in accordance with the terms of
this Agreement.

 
2.4  
As security of your payment obligations under the Agreement, you hereby pledge
in our favour, in accordance with Article 3:236 Dutch Civil Code, any credit
rights arising from the Invoices, as well as the Invoices themselves and their
Related Rights, for the amount resulting from the difference between the
aggregate Nominal Amount of the Notified Invoices and the application of the
Advance Rate to such aggregate Purchase Price. Upon payment by the Customers of
any Invoice, the pledge shall be deemed to be automatically extended to any
amounts collected. Enforcement of this pledge shall be effected by means of
set-off, compensation or counterclaim. Article 3:236 paragraph 1 jo. Article
3:98 jo. 3:97 and 3:94 paragraph 1 of the Dutch Civil Code apply, mutatis
mutandis, to all Invoices and related Rights that come into existence after the
date of execution of the Agreement.

 
65

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2.5  
Notwithstanding (but without prejudice to) the foregoing, in order to render the
assignment and pledge enforceable against third parties, you will deliver to us
on or prior to each date of Notification a valid and duly completed and signed
transfer and pledge form covering the Notified Invoices and their Related
Rights, and you will deliver such further documents and take such further
actions as we may reasonably require in furtherance of the Agreement.  A sample
transfer and pledge form for this purpose is attached as Annex II. You undertake
to on a [monthly3] basis submit the signed transfer and pledge form, no later
than two Business Days after the preceding [month4], for registration purposes
and any ancillary or supporting document with the competent Dutch tax
authorities (Inspectie der Registratie en Successie).

 
2.6  
In relation to a Factoring Facility provided on a recourse basis, if and as soon
as the Customer fails to pay any amount when due (as shown on the relevant
Invoice) under the Contract of Sale in respect of a Invoice accepted by the
Bank, the Bank shall have the sole right to reassign all or any Invoices and
their Related Rights to you in accordance with condition 12 of the Operating
Conditions – Part II – Provisions relating to all Clients.

 
3  
YOUR RESPONSIBILITIES

 
3.1  
You must:

 
3.1.1  
raise Invoices in the normal course but including wording which we will provide
to you indicating that each one has been assigned to us and ensure that all
Invoices are promptly and accurately entered in your sales ledger;

 
3.1.2  
send notices of assignment in a form satisfactory to us of your Invoices to you
Customers;

 
3.1.3  
not attempt to collect payment for any Invoices for your own account;

 
3.1.4  
not agree to settle any Invoices;

 
3.1.5  
only issue credit notes in accordance with the Operating Conditions; and

 
3.1.6  
within one month (or other such period as we may reasonably specify) of the end
of the quarter to which they relate send your quarterly management accounts to
us.

 
4  
OUR FEES AND CHARGES FOR FACTORING CLIENTS

 
4.1  
For the purpose of calculating any Minimum Fee expressed as an annual fee:

 
 

--------------------------------------------------------------------------------

3 Monthly / quarterly / semi-annual / annual.
4 Month / quarter / half year / year.
 
 
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4.1.1  
“annual” means the period from 1 July in any year to 30 June in the next
year.  The first annual charge will reflect the period from the Start Date to
the next 30th June; and

 
4.1.2  
we will divide the fee by 365 and multiply that figure by the number of relevant
days elapsed to the date of calculation of the fee.

 
4.2  
We will apply any Additional Service Fee percentage specified in the Commercial
Terms to the Notified Value of all Invoices which remain outstanding at the end
of the Funding Period.  We will charge this fee in arrears on the last Working
Day of each month in respect of that month.

 
4.3  
We may vary the Service Fee or any Minimum Fee on giving you [2] months written
notice which expires on or after the end of any Minimum Term.

 
 
4.4  
We may vary the Discount Charge on giving you [3] months written notice which
expires at any time after the end of the Minimum Term.

 
 
5  
CURRENCY INVOICES

 
 
5.1  
If an Invoice is a Currency Invoice, we will calculate the Nominal Amount in
Euro at the exchange rate agreed between us.  If we do not agree on an exchange
rate, we will use the exchange rate on the date we make the Advance.

 
 
5.2  
We may at your request set up separate Current Accounts for each currency in
which we agree to make Advances.

 
 
5.3  
If we make Advances in a currency other than Euro we may calculate the Discount
Charge on the Debit Balance by adding the margin to the Bank’s short term offer
rate for the currency in question as determined by us either daily or weekly.

 

 
 
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ANNEXURE I
 
List of Customers
 

 
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ANNEXURE II
 
Assignment Agreement
 
Confidential
 

 
To:           LLOYDS TSB BANK PLC
Staten Bolwerk 1, 2011 MK Haarlem, the Netherlands
 
 
Date:                                            2008
 
Dear Sirs,

DEED OF ASSIGNMENT

1.
We refer to the receivables finance agreement dated on or about the date hereof
(the “Agreement”) as the same may be amended, supplemented or restated from time
to time, under which we have undertaken to assume responsibility for the
collection of the Invoices which results into an assignment of the Invoices as
listed herein in Schedule I.

2.
Terms defined in the Agreement shall have the same meaning in this letter,
unless a contrary indication appears.

3.
In furtherance of our obligations as set forth above, title to the Invoices is
transferred to you by (i) execution and delivery of this deed of assignment and
(ii) giving notice to the Customers, in accordance with Article 3:94(1) of the
Dutch Civil Code.

4.
We acknowledge and agree, that if and to the extent that the Invoices are
subject to any assignment or other encumbrance, which take priority over this
deed of assignment, this assignment will have been created with the highest
possible priority (rangorde) available at such time of creation.

5.
This letter shall form an integral and inherent part of the Agreement.

6.
This letter may be signed in any number of counterparts, all of which taken
together shall constitute one and the same instrument.  Delivery of an executed
signature page by facsimile shall be as effective as delivery of a manually
executed document.

7.
This letter shall be governed by, and construed in accordance with, the law of
the Netherlands.  The parties hereto submit to the non-exclusive jurisdiction of
the courts of the Netherlands.  The parties hereto waive any defence of
inconvenient forum, which may be available.

Please acknowledge your agreement to the terms of this letter by countersigning
the attached copy of this letter.
 
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Yours faithfully
…………………………………….
for and on behalf of
[u]

We agree to the terms set out above.
…………………………………….
for and on behalf of
LLOYDS TSB BANK PLC
 

 

 
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Schedule I
 
Detail of Invoices
 
Invoice No.
Amount (including interest)
Currency
Invoice Date
Maturity Date
Approved Debtor
 
 
         

 

 
 

 

 
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ANNEXURE III
 
Form of Notification to Customers
 

To: BY REGISTERED MAIL
 
[Customer]

 
Attn: [u]

 
[address]

From: [Client]
 
[address]

Cc:
[u]

 
 
 
[city], [date]

 
 
Dear Sir/Madam,

 
RE:
[Company name] - NOTIFICATION OF ASSIGNMENT

 
We refer to the assignment of receivables, dated [u], by and between [Company]
and Lloyds TSB Bank PLC (the “Assignment Agreement”). Capitalised terms used in
this Notification shall have the same meaning given thereto in the Assignment
Agreement.
 
On behalf of the Company we hereby notify you that pursuant to the Assignment
Agreement, payments in respect of this claim must be made, from the date of this
notice, to the Bank at [fill in details Collection Account and specifics of
payment].
 
Please acknowledge receipt of this notice by signing and returning this letter
us.
 
Yours sincerely,
 
[u]
 
By:
 
[authorised signatory]
 
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For acknowledgement of receipt:
 
[Customer]
 
Name:
 
Title:
 
Date:

 
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OPERATING CONDITIONS - PART V
 
 
PROVISIONS RELATING TO EXPORT AND CURRENCY FACILITIES
 
 
1  
EXPORT AND CURRENCY FACILITIES

 
1.1  
Export Facilities will only be made available in respect of Invoices owing by
Customers from Approved Countries and denominated in Approved Currencies.

 
1.2  
We may maintain separate Current Accounts for each currency and each Approved
Country in which we agree to make Advances.

 
1.3  
Currency Facilities will only be provided in an Approved Currency other than
Euro.

 
1.4  
Unless we agree otherwise, you will arrange for Currency Invoices in respect of
which we agree to provide an Export Facility to be credit insured and for our
interest to be noted on the insurance policy.

 
2  
OUR FEES AND CHARGES

 
2.1  
We will calculate and charge the Service Fee payable on Currency Invoices in the
Approved Currency in which such Invoices are denominated.  On each anniversary
of the Start Date we will convert those Service Fees paid by you on such
Currency Invoices into Euro at the Bank’s spot rate of exchange on the date of
such conversion and add them to the other service fees paid by you during that
year to determine if you have paid any Minimum Fee we have agreed.

 

 
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OPERATING CONDITIONS - PART VI
 
PROVISIONS RELATING TO RECEIVABLES FACILITIES
 
 
 
1.  
PURPOSE OF THE FACILITY

 
1.1  
You shall apply all amounts borrowed in accordance with the Asset Based Finance
Agreement.

 
2.  
INTEREST

 
         2.1
The rate of interest on the Facility is the percentage rate per annum which is
the aggregate of the applicable:

 
3.6.1  
Margin; and

 
2.1.1  
EURIBOR.

 
We shall notify you promptly upon the determination of the rate of interest
under the Agreement.
 
2.2  
You shall pay accrued interest on the Facility in arrears on each Interest
Payment Date, on which date we shall charge your Current Account with the amount
due.

 
2.3  
If you fail to pay any amount payable under the Agreement on its due date,
interest shall accrue on the overdue amount from the due date up to the date of
actual payment (both before and after judgement) at the rate determined as the
Default Interest.

 
Any interest, commission or fee accruing under the Agreement will accrue from
day to day and is calculated on the basis of the actual number of days elapsed
and a year of 360 days.
 
3.  
REPAYMENT

 
         3.1
You shall repay all amounts outstanding under the Facility on the Final
Repayment Date.

 
4.  
PREPAYMENT

 
4.1
Any prepayment shall be made in accordance with the provisions of this Agreement
and you may reborrow amounts subject to the provisions of this Agreement.

 
5.  
SECURITY

 
As security for your Secured Obligations you shall grant in our favour, whether
or not in advance, an undisclosed first priority right of pledge (stil pandrecht
eerste in rang) on all your Invoices in the manner set forth in Article 3:239
paragraph 1 of the Dutch Civil Code, and in accordance with the form requested
by us.
 
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5.1
Until notice from us to the contrary, you will direct your Customers to settle
their Invoices by making payment directly into a Collection Account. If you
receive payment you will immediately upon receipt pay it into the Current
Account

 
5.2
As security for your Secured Obligations you shall grant in our favour, whether
or not in advance, a disclosed first priority right of pledge (openbaar
pandrecht eerste in rang) over the balances in the Collection Accounts, in the
manner set forth in Article 3:236 paragraph 2 jo. Article 3:98 jo 3:94 paragraph
1 of the Dutch Civil Code, and in accordance with the form requested by us.

 
5.3
As security for your Secured Obligations you shall grant in our favour, whether
or not in advance, a non-possessory first priority right of pledge (vuistloos
pandrecht eerste in rang) over all of your stock and inventory, in the manner
set forth in Article 3:237 of the Dutch Civil Code, and in accordance with the
form requested by us.

 
5.4
Where we have agreed that the Agreement is confidential, then, for the moment,
neither you nor we will notify your Customers that you have pledged your
Invoices to us.  However, we may at any time vary or terminate your agency to
collect either some or all of your Invoices.  We may:

 
 
5.4.1
give (or require you to give) notice to some or all of your Customers of the
pledge of their Invoices and the Related Rights to us;

 
 
5.4.2
either simultaneously with giving such notice or at a later date, instruct your
Customers to pay us directly;

 
5.4.3           require you to send us a copy of your sales and purchase ledger
and such other records as we may require;
 
 
5.4.4
require you to forward all Invoices to us for issuing by us and we will, at your
expense, administer Customers’ accounts.

 
5.5
You will confirm to your Customers the effect of any notice served on them and
you will cease collect Invoices.  The provisions of condition 5 of the Operating
Conditions – Part II – Provisions relating to all Clients shall then apply.

 
5.6
You will pay those costs specified in the Commercial Terms for maintaining the
Collection Account.

 
5.7
You hereby authorise us or any person nominated by us to contact your Customers
to verify the amount of each Invoice due from them, the due date for payment and
in the case of overdue Invoices, the date when payment can be expected.  You
will assist us or our nominee in any way we require and you authorise us and
them to disclose their identity if required to do so by law or if requested by a
Customer.

 
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6  
INFORMATION AND REPORTING REQUIREMENTS

 
6.1
You will maintain a monthly open item ageing analysis, in such form as we may
require, showing the position of each Customer’s account on the last day of each
month, including details of any outstanding credit balances.

 
6.2
You will supply to us wherever possible via the Website (or at our option make
available for inspection by us) the following documents and/or information
forthwith upon our request:

 
 
6.2.1
copies of Invoices and all debit and credit notes or other documents evidencing
how an Invoice is reduced, paid or otherwise satisfied;

 
6.2.2         the full terms of any Contract of Sale;
 
6.2.3         proof of the complete performance of each Contract of Sale;
 
 
6.2.4
such other information and evidence as we may require relating to Invoices
Related Rights or Contracts of Sale;

 
6.2.5         daily a report detailing monies collected by you as our agent; and
 
 
6.2.6
within 15 days of the end of the month to which they relate or promptly upon our
request copies of:

 
6.2.7         your open item ageing analysis;
 
 
6.2.8
your sales ledger control account with a reconciliation of it to our month end
statement;

 
6.2.9         your reconciliation of cash receipts into the Collection Account;
 
6.2.10       your purchase ledger; and
 
 
 
6.2.11
within one month (or other such period as we may reasonably specify) of the end
of the month to which they relate your monthly management accounts.

 
7           NON-NOTIFIABLE INVOICES
 
7.1
Until we give you notice to the contrary, you must not Notify us of the
following Invoices:

 
7.1.1        Invoices due from a director, officer, shareholder or employee of
yours;
 
 
7.1.2
Invoices due from any other person with which you maintain, other than your
habitual commercial or professional dealings, de facto or de jure economic or
financial links whether direct or indirect, or with which you have shareholders,
partners, directors, officers or managers in common;

 
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7.1.3        Invoices due from the sale of any of your capital assets;\
 
7.1.4        Invoices which are not due in respect of your trade, occupation or
profession;
 
7.1.5        Invoices where the Customer does not have an established place of
business;
 
 
7.1.6
Invoices arising under a hire purchase, leasing or consumer credit sale
agreement;

 
7.1.7        Invoices due in respect of Goods delivered on sale or return or on
approval;
 
 
7.1.8
Invoices arising under any Contract of Sale involving advance payments,
conditional sales, consignment sales, sales for which a provisional or pro forma
invoice has been issued, and Invoices for costs, interest for late payment or
other penalties to be paid by the Customer;

 
 
7.1.9
Invoices arising under any Contract of Sale with the State or any local
government body or any entity subject to public law and benefiting from
sovereign or other immunity;

 
               7.1.10
Invoices arising under any Contract of Sale with a Customer who supplies goods
or services to you and which may therefore be subject to rights of set-off,
contra accounting, compensation, defence or cross-claim;

 
               7.1.11
those additional Invoices referred to in the Agreement as Additional
Non-Notifiable Invoices; and/or

 
               7.1.12
Export Invoices representing more than 10% of all your Invoices outstanding from
time to time. We may at any time require you to Notify us of Non-Notifiable
Invoices.

 
7.1.13      We will Disapprove Non-Notifiable Invoices.
 
                7.1.14
We shall only make a Service Fee in respect of Non-Notifiable Invoices after we
have given you notice under condition 5.2 above.

 
8           OUR SERVICES
 
8.1
In return for the Service Charge we will at your request or at any other time
should we so decide provide the following services relative to Notified
Invoices:

 
 
8.1.1
advice on improvements to your collection procedures and assessing your need for
credit insurance;

 
 
8.1.2
general advice on standard sales contracts, terms of payment, the use of
settlement discounts, evaluating the effect of changing invoicing methods and
terms;

 
8.1.3           provision of statistical information based upon Invoices
Notified to us;
 
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8.1.4
advice on export debtor procedures and the specific requirements of major
trading countries where we have arrangements with correspondents;

 
 
8.1.5
assistance in reviewing general terms and conditions of suppliers in relation to
their reservations of title;

 
8.1.6        advice on your relationship with your bankers;
 
 
8.1.7
checking and advising you on the accuracy of the monthly reconciliation of your
sales ledger to our month end statement;

 
8.1.8        advice on your need for foreign exchange facilities or contingent
liability cover;
 
8.1.9        daily information as to the status of your accounts with us;
 
                8.1.10
reviewing your reconciliation and monitoring the operation of the Collection
Account, including detailing dishonoured cheques or other defects in payment;

 
 
8.1.11      liaising with lawyers or other agents instructed to collect
Invoices; or

 
8.1.12       inspecting your books and records relating to Invoices, including:
 
8.1.13       general systems;
 
8.1.14       maintenance of sales ledger;
 
8.1.15       dunning cycles;
 
8.1.16       overdue Invoices;
 
8.1.17       control systems.
 
8.2
The provision of any of the services in this condition 9 shall be without
responsibility on our part to the fullest extent permitted by law.

 
 
 

 

 
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ANNEXURE I
 
List of Customers
 

 

 

80

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