**4. ****Presale of Products**: CLIENT shall have pre-sold the Products to Customers inamounts, and on credit and delivery terms, acceptable to GATEWAY, CLIENT shall provide to GATEWAYfor review and approval, as applicable, copies of letters of credit, purchase orders, and salescontracts from Customers, as well as outstanding order reports summarizing such orders andcontracts with respect to Products for which GATEWAY anticipates providing purchase orderassistance (hereinafter “Customer Purchase Orders”), GATEWAY shall have the right to confirm allsales arrangements directly with Customers. Although it is not expected that such shall benecessary, CLIENT shall furnish to GATEWAY, upon GATEWAYS request, credit information sufficient inGATEWAY’s opinion, for GATEWAY to credit approve CLIENT’s Customers (subject to any applicableconfidential information restrictions). Should such not be available to GATEWAY’S satisfaction,CLIENT authorizes GATEWAY to select and use a credit research and consulting company (“CreditConsultant”) to pre-qualify CLIENT’s Customers (subject to Client’s pre-approval of costsassociated therewith). All expenses associated with such Credit Consultant shall become a part ofGATEWAY’s Costs as defined herein. CLIENT hereby agrees to hold harmless and releases GATEWAY fromany and all liability for Customer credit losses regardless of any use or non-use of such CreditConsultant.     **5. ****Products**: CLIENT shall provide to GATEWAY copies of purchase orders to (and orderconfirmations from) Suppliers of Products associated with this Agreement. CLIENT warrants andrepresents to GATEWAY that Products delivered from Suppliers shall conform in every materialrespect, including but not limited to quantity, quality, style, and packaging, with existingCustomer Purchase Orders, and additionally, any further specifications as have been or may berequired by CLIENT or CLIENT’s Customers. CLIENT grants to GATEWAY the right to confirm allpurchase arrangements directly with Suppliers, with reasonable prior notice.     **6. ****Bill of Sale**: Upon review and acceptance of the above, and other requirements perAddendum by GATEWAY, CLIENT shall present to GATEWAY a bill of sale (hereinafter “Bill of Sale”)which sells, assigns, and transfers to GATEWAY the Products and all of CLIENT’s purchase and salesdocumentation related thereto, together with a non-exclusive right to, license for, and right tosublicense, any trademarks, tradenames, and service marks used or useful, directly or indirectly,with respect to, or inherent in, such Products covered by Addenda to this Agreement(collectively “GATEWAY Assets”). GATEWAY Assets shall thereafter be exclusively owned by GATEWAY,and CLIENT hereby acknowledges GATEWAY’s exclusive ownership regardless of whose name appears ondocuments. Only upon GATEWAY’s acceptance of the Bill of Sale, shall GATEWAY agree to proceed witha GATEWAY transaction; For an import transaction, GATEWAY shall arrange to have import letters ofcredit issued (or other payment arrangements) in favor of Suppliers showing GATEWAY as Applicant;For an export transaction, GATEWAY shall arrange to make payment to the supplier of Products. Withprior written notice, CLIENT hereby grants to GATEWAY the full right and authority to take anyaction, which in GATEWAY’s sole discretion, GATEWAY believes to be reasonably necessary to protectGATEWAY’s interests. This shall include full right and authority to resolve any questions ofnon-compliance of documents and to give any instructions as to acceptance or rejection of anydocuments or Products, all without any consent from CLIENT.     **7. ****Currency**: In the event the payment to Suppliers and /or letters of credit issuedto Suppliers are in currencies other than United States dollars CLIENT shall arrange forward
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foreign exchange currency contracts, reasonably acceptable to GATEWAY, to hedge againstforeign currency fluctuations.     **8. ****Security Interest**: CLIENT hereby grants to GATEWAY a security interest in all ofthe following CLIENT assets (hereinafter “Collateral”):All assets, including all inventory, accounts, accounts receivable, chattel paper,documents, instruments, contract rights, insurance proceeds, trademarks, tradenamesand other general intangibles, furniture, fixtures, equipment, and all proceedsthereof now owned and hereafter acquired.CLIENT shall execute a formal Security Agreement and Delaware Uniform Commercial CodeFinancing Statement for the benefit of GATEWAY. In addition, CLIENT shall arrange for the benefitof GATEWAY for the corporate guaranty of **Corgi International Limited**. Except for thesecurity interest granted to GATEWAY herein, CLIENT shall not, without GATEWAY’s prior writtenconsent, grant any other security interest in any of the Collateral to any other party. Prior toGATEWAY assisting CLIENT with any transactions under this Agreement, CLIENT shall arrange for thebenefit of GATEWAY an Inter-Creditor and Subordination Agreement with **Robert Asset ManagementFund, L.L.C.**     **9. ****Importer / Exporter of Record**: For import transactions (where Products areimported into the U.S.), CLIENT shall be the importer of record and Products shall be clearedthrough CLIENT’s U.S. Customs bond. CLIENT shall arrange with all customs house brokers to havethe Products cleared through U.S. Customs, and thereafter held in trust for, and under theexclusive control of GATEWAY. All customs house brokers must be approved in advance by GATEWAY.For export transactions (where Products sourced in the U.S. or other countries are sold to foreignbuyers), CLIENT shall be the exporter of record and shall arrange for the supply of Products, theirinland shipment and their export shipment through CLIENT’s freight forwarder, subject to GATEWAY’sprior approval of such forwarder. GATEWAY shall have the right to negotiate revisions to anypayment arrangements directly with any supplier of Products and to control any shipment of theProducts should GATEWAY elect to exercise such rights. CLIENT and GATEWAY shall jointly execute aletter to GATEWAY’s freight forwarder advising such forwarder of GATEWAY’s interest in the Productsand instructing the forwarder to follow any instructions GATEWAY might give concerning Products orrelated shipping documents; GATEWAY shall have the right to give any such instructions directly toany forwarders or carriers and to confirm any related matters directly with any forwarders orcarriers. For each letter of credit in CLIENT’s favor concerning Products, CLIENT shall execute an“authorization to pay proceeds of letter of credit” (also commonly referred to as “assignment ofproceeds”) to the bank where such letter of credit is payable, in a manner acceptable to such bankand in the full amount of the letter of credit. If requested by GATEWAY, CLIENT shall execute aletter to any bank where a letter of credit covering any Products is payable, advising such bankthat GATEWAY is CLIENT’s agent for matters concerning the letter of credit and requesting such bankto act according to GATEWAY’s instructions concerning such letter of credit or any documentspresented under it.     **10. ****Third Party Warehousing**: If third-party warehousing of the Products is necessary,CLIENT shall arrange to have the products received and held in trust for GATEWAY
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in warehouse facilities which have been approved in advance by GATEWAY. GATEWAY confirms theexisting warehouse facilities of Client’s affiliates are acceptable and approved. Such Productsshall be stored there in GATEWAY’s name. CLIENT shall arrange for GATEWAY personnel to haveunlimited access to the warehouse facilities and to the Products at all times during regularwarehouse working hours. CLIENT hereby recognizes and agrees that GATEWAY shall have soleauthority to release the Products from such warehouse facilities, however, GATEWAY shall notunreasonably withhold such release.     **11. ****Client Warehousing**: Should Products be delivered to CLIENT’s facility forredistribution or storage, CLIENT shall, as applicable, receive, organize for redistribution, andhold the Products under trust receipts and in trust for GATEWAY in:[X] A field warehouse established by an independent warehouse companyacceptable to GATEWAY. [  ] Secured sections of CLIENT’s facility, leased to and/or under theexclusive control of GATEWAY, where Products shall be separate fromand not co-mingled with the property of others, including theproperty of CLIENT.Such Products shall be stored there in GATEWAY’s name and under GATEWAY’s exclusive control.CLIENT shall arrange for GATEWAY personnel to have unlimited access to such facilities and to theProducts at all times during regular CLIENT working hours. CLIENT hereby recognizes and agreesthat GATEWAY shall have sole authority to release the Products from such warehouse facilities,however, GATEWAY shall not unreasonably withhold such release.     **12. ****Freight, Duty, Other**: Upon CLIENT’s request per Addendum, or Default, and thenonly at the sole discretion of GATEWAY, GATEWAY may from time to time agree to arrange for paymentsto be made for freight, duty, customs clearance, handling, and other charges necessary to have theProducts delivered to the warehouses or Customers, and such payments shall become a component ofGATEWAY’s Costs as defined herein.     **13. ****Insurance**: Ocean/air cargo, storage, and inland transit insurance for the Productsshall be arranged as needed by CLIENT, and such coverage shall have been pre-approved by GATEWAYand shall name GATEWAY as an Additional Assured. CLIENT shall provide to GATEWAY copies of suchinsurance policies evidencing GATEWAY’s Additional Assured status. CLIENT guaranties to makedeclarations as required in their insurance policies and shall notify GATEWAY immediately of anyloss or damage which might occur. CLIENT agrees to reimburse (or replace) GATEWAY for any Productslost, damaged, or spoiled within 90 days from the occurrence and shall pay GATEWAY immediately uponpresentation to CLIENT of a GATEWAY invoice. The payment amount shall be calculated in accordancewith Sections 15(A), 15(B), 15(C), 15(D), and 15(E) below.     **14. ****Product Liability Insurance**: At GATEWAY’s discretion, GATEWAY may require Productliability insurance coverage in the minimum amount of US $1,000,000, million be arranged byCLIENT and such policy shall name GATEWAY as Additional Assured.
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CLIENT shall provide to GATEWAY copies of such insurance policy evidencing GATEWAY’sAdditional Assured status.     **15. ****Client’s Repurchase of Products**: Regardless of the status or location of theProducts, CLIENT hereby agrees to re-purchase and take delivery of the Products from GATEWAY,without recourse to GATEWAY for defects, mispackaging, mislabeling, damage caused in transit orstorage, Customer returns, Customer claims, product liability, or for any other reason, and shallpay for such Products in accordance with the terms stipulated per Addendum tot this Agreement.Unless otherwise instructed per Addendum to this Agreement, CLIENT shall arrange for payments to bewire transferred to GATEWAY’s account as follows:U.S. BANK, NATIONAL ASSOCIATION