Document:

ex10-3.htm

Exhibit 10.3

	
DATED
	
June 30th, 2009

 

	
  
	
(1)
	
AMERICAN BILTRITE FAR EAST, INC.

 

	
  
	
(2)
	
FAUNUS GROUP INTERNATIONAL, INC. (d.b.a. FGI FINANCE)

 

 

 

RECEIVABLES FINANCE AGREEMENT

 

  

  

  

THIS AGREEMENT is made the      30th  day of June         2009

 

BETWEEN:

 

	
(1)
	
American Biltrite Far East, Inc. a foreign company registered in Singapore (company registration number S90FC4241G) whose registered office is at 1 Marina Boulevard, #28-00 One Marina Boulevard, Singapore 018989 ("You");

 

	
(2)
	
Faunus Group International, Inc (d.b.a FGI Finance) a Delaware corporation, whose office is at 80 Broad Street, 22nd Floor, New York, NY 10004, United States of America ("we", “us”, “our”,
or “ours”);

 

The Clause headings used in this Agreement are for guidance only and are not intended to affect its interpretation.  These general conditions must be read in conjunction with any agreement of which they are expressed to form part.  A list of general definitions can be found in Clause 25 of this
Agreement.

	
1.
	
Sale and Purchase of Debts

 

	
(a)
	
This Agreement will commence on Commencement and will continue until terminated in accordance with its terms.

 

	
(b)
	
By this Agreement, you will offer to sell to us or assign to us all Debts together with all rights relating to such Debts:

 

	
  
	
(i)
	
that are owing to you at Commencement; and

 

	
  
	
(ii)
	
arising after the Commencement and during the life of this Agreement, regardless of whether a Termination Event has occurred.

              

	
(c)
	
Such an offer will be unconditional and made in writing in the form set out in Schedule 1 (Form of Offer).  We shall accept each such offer by crediting the notified value of such Debts to the account specified in Clause 3 (Payments to you).  We shall own your Debts and any related
rights from Commencement or as soon as they come into existence even if not yet entered in your books or records as due to you.

 

	
(d)
	
Should any Debts or related rights, purchased by us or purportedly purchased by us, not effectively come into our ownership (whatever the reason may be) you must account to us for such Debts or related rights when received and you will hold such Debts and the proceeds of the same on our behalf absolutely.  You will co-operate with us in the execution of any necessary documents, deeds, instruments, policies,
security, and any other action necessary to perfect the assignment and transfer to us  or hold in our favour in relation to any Debts (and/or any related rights), the proceeds of the same or to put this Agreement into effect.

 

	
(e)
	
You will assign to us the benefit of any insurance policies relating to Debts or any goods sold which give rise to any Debts.

 

	
(f)
	
You shall promptly upon the execution of this Agreement (and promptly after you become entitled to a new Debt) notify the relevant Customer (with a copy to us) of the sale, transfer and assignment of such Debt by serving notice substantially in the form attached as Schedule 2 (Form of Customer Notification Letter).

 

  

  

  

- 2 -

 

 

 

	
(g)
	
On signing this Agreement and as soon as a Debt arises you will notify us on the form and in the manner we specify together with such information and originals or copies of documents further establishing the existence of such Debt, or the delivery of goods or the performance of your services in respect of the Debts as we may request, such Debts are Approved Debts.

 

	
(h)
	
Should we request, you will sign, pay stamp duty on and deliver to us a document in a form that we approve legally assigning to us any Debt or Debts together with the benefit of all guarantees given to you by your Customer and other related securities and, if we ask, you will immediately give written or other notice in a form and manner that we approve to any Customer whose Debt has been assigned in this way.

 

	
(i)
	
You will print, stamp or otherwise mark each invoice with a notice of assignment or sale of Debts shown on any invoice in a form which we shall specify such notice to be printed on your invoices within three months from the date of this Agreement and until such time we shall provide you with an adequate supply of self adhesive labels bearing appropriate notification language.

 

	
(j)
	
Should we decide that we do not wish you to deliver credit notes to a specific Customer, we will inform you of this in writing.  After receipt of such notification, you will not deliver any credit note direct to such Customer.

 

	
(k)
	
If your Customer becomes entitled to a credit or Customer discount in respect of any Debt you will notify us promptly and send to us a copy of the credit note in respect of the credited or discounted Debt with any other documents and information which we may request. In addition you will repay to us the amount of each credit note so that we are not out of pocket.

 

	
2.
	
Disapproval and Re-Approval

 

	
(a)
	
We may at any time deduct from amounts which we would otherwise be required to send you a sum equivalent to any Disapproved Debts previously purchased by us and reassigned to you pursuant to Section 11 hereof.

 

	
(b)
	
If we disapprove Debts in this way we shall (at our discretion) be allowed to sell them back to you (in accordance with Clause 11 (Recourse)) or re-approve them for the purposes of calculating amounts which you are entitled to draw.

 

	
(c)
	
All Disapproved Debts will continue to be owned by us until termination hereunder or earlier re-assignment (in accordance with Clause 11 (Recourse)) and you will forward to us forthwith any sums received by you in respect of any Disapproved Debts.

 

	
3.
	
Payments to you

 

	
(a)
	
For the duration of this Agreement, you will have a rolling account with us the balance of which will be calculated, at any time as follows:

 

	
  
	
(i)
	
add the Gross Invoice Value of Debts notified to us;  then

 

	
  
	
(ii)
	
multiply that amount by the Payment Percentage; then

 

	
  
	
(iii)
	
deduct from that amount the value of any amounts paid by us to you in connection with purchases hereunder on a cumulative basis since Commencement less any amounts credited to or paid by you in connection with Disapproved Debts since the Commencement; then

 

  

  

  

- 3 -

 

 

 

	
  
	
(iv)
	
deduct from that amount any Discount, Administration Fees, Disbursements or other fees then due to us and the value of any current Disapproved Debts for which credit or payment has not been received (including any Debts aged 90 days or more);  then

 

	
  
	
(v)
	
add the value of any re-approved Debts; then

 

	
  
	
(vi)
	
add any collections of any Debts received from your Customers and the sum so calculated, if positive is your "Entitlement".

 

	
(b)
	
You may request payments of your Entitlement in the manner mutually agreed between us and you from time to time.

 

	
(c)
	
You will not be entitled to request or receive any payment from us under paragraph (b) above:

 

	
  
	
(i)
	
if and to the extent that the relevant payment would result in the aggregate amount of all payments from us at any time exceeding the Entitlement Limit;

 

	
  
	
(ii)
	
if you are insolvent; or

 

	
  
	
(iii)
	
at any time at which we are entitled to terminate this Agreement under Clause 13.2, whether or not we actually exercise any such right.

 

	
(d)
	
Each payment made by us to you will be denominated in the same currency as the purchase price of the Debt to which it relates.  It is your responsibility to ensure that the account to which such payment is to be transmitted under paragraph (b) above is suitable for the receipt of funds in the relevant currency.  We will not be liable for any loss or damage suffered by you in the event that the
bank or other institution at which such account is maintained declines to accept a payment transmitted to it in that currency.

 

	
(e)
	
We will debit your rolling account with each amount paid to you under paragraph (b) above on the Business Day on which we give instructions to our bankers to transmit that payment to your account under paragraph (d) above.

 

	
(f)
	
Upon the occurrence of a Termination Event any further advances to you will cease automatically and from any balance due to you, we shall be entitled to deduct all commissions and expenses as may otherwise be provided in this Agreement.

 

 

	
4.
	
Charges

 

	
4.1
	
Charges will arise either as Discount, fees or Disbursements as follows:-

 

	
(a)
	
Discount will be charged on the daily net total balance outstanding and due from Customers to us in respect of the Gross Invoice Value of all Debts purchased applied on a daily basis.

 

	
(b)
	
Any receipt from your Customers will be credited to your account with us within four (4) Business Days after the day of banking, but not including the day of banking.

 

  

  

  

- 4 -

 

 

	
(c)
	
Payments made to you will be debited from your account with us on the day on which they are made whether the payment is made to you by cheque or bank transfer.

 

	
4.2
	
Fees

 

	
(a)
	
We shall charge Administration Fees as a percentage of the Gross Invoice Value.

 

	
(b)
	
Administration Fees may be charged, in our discretion on a fixed monthly basis, monthly in advance.

 

	
(c)
	
We reserve the right, to cover our initial costs in taking you on as a customer, to charge a Closing Fee upon Commencement.

 

	
4.3
	
Minimum Fee

 

	
  
	
We will charge a monthly Minimum Fee in the event that your net funds employed each month following Commencement falls below USD$600,000, payable on a monthly basis.  The Minimum Fee will continue to be payable notwithstanding the occurrence of any of the events described in Clause 11 (insolvency and other events entitling us to terminate this agreement).

 

	
4.4
	
Bank Fee

 

	
(a)
	
We shall charge a transfer fee each time funds are transferred by us or received by us in connection with this Agreement.

 

	
(b)
	
You shall pay us all bank commission and other charges and expenses incurred or payable by us in relation to this Agreement and the arrangements contemplated in it on demand.

 

	
4.5
	
Over-payment Fees

 

	
  
	
We shall charge over-payment fees when you require funds in excess of the applicable Entitlement from time to time and we elect, in our discretion, to Advance you such funds in excess of the Entitlement at such time.  The over-payment fee will be calculated by increasing by 50% the Administration Fee payable during the period that you have drawn in excess of your Entitlement for such time, but such over-payment
fee rate shall only apply for such period as you are overdrawn in excess of your Entitlement at such time.

 

	
4.6
	
Disbursements

 

	
(a)
	
In calculating your Entitlement, we shall deduct, in accordance with clause 3(a)(iv) (Payments to you) all disbursements which are identifiable as being attributable to you including, reasonable and documented attorney’s fees, court costs and other expenses incurred by us in the set-up, preparation,
negotiation and enforcement of this Agreement and protecting or enforcing our interest in any Debt, in collecting the Debts or any security for this Agreement, including reimbursement for premiums incurred by us to insure against non-payment of any Debt or other insurable losses to the security for this Agreement, and credit reference fees, (such disbursements, “Disbursements”).

 

  

  

  

- 5 -

 

 

	
(b)
	
Notwithstanding anything in paragraph (a) above, you have, prior to Commencement, paid to us, and we have received and hold, an Expense Deposit to reimburse us for our actual costs and expenses incurred in connection with our review and approval process in relation to this Agreement, as well as field auditor fees, and reasonable and documented attorneys' fees and expenses
incurred in the negotiation, execution, amendment or enforcement of this Agreement or the Ancillary Documents ("Approval Process Expenses").  We will provide you with a written accounting of all Approval Process Expenses, which shall be conclusive, absent manifest error.  That portion of the Expense Deposit equal to the Approval Process Expenses is non-refundable, irrespective of whether Commencement under this Agreement ever occurs.

 

The excess of the Expense Deposit over the Approval Process Expenses will be paid to you upon demand and any Approval Process Expenses in excess of the Expense Deposit shall be paid by you on demand, unless this transaction does not close as the direct result of our gross negligence or wilful misconduct.

 

	
5.
	
Collection from Customers

 

	
(a)
	
From Commencement we shall have the sole and exclusive right to collect and enforce payment of every Debt other than Debts Reassigned to you and you have no right to collect any Debt (including any Disapproved Debt ) unless we authorise you to do so in advance in writing.

 

	
(b)
	
You will assist our collection efforts if we so request by promptly providing all information required and you agree that for collection purposes we may institute and conduct legal proceedings in your name under our full control.  You also agree to co-operate in any such proceedings (including the giving of evidence) and agree to be bound by anything done by us under this Clause.

 

	
(c)
	
You will immediately pass to us or to any bank we direct any payment a Customer makes to you directly in respect of a Debt and you agree not to mark or endorse any negotiable instrument relating to such payment otherwise than in our favour.  You will hold any payment you receive for a Debt on our behalf until we receive it.  You must not bank any such payment for your own account. Should you
receive any check or other payment instrument with respect to a Debt or after default any Debt and fail to surrender and deliver to us said check or payment instrument on the next business day following the date of receipt by Customer, we shall be entitled to charge you a Misdirected Payment Fee to compensate us for the additional administrative expenses that the parties acknowledge is likely to be incurred as a result of such breach.  This is without prejudice
to any other remedies that may be available to us at law.

 

	
(d)
	
If a Customer makes a payment either to us or to you without specifying which Debts are covered by it then we shall apply it first against any Debts outstanding, second against the discharge of your liability to us, if any, whether arising under this Agreement or otherwise, and any remaining balance shall be paid to you for your disposition.

 

	
(e)
	
If there is shown in our books a credit balance with any Customer which remains outstanding we shall be entitled at our discretion to make repayments of such credit balance to the Customer out of monies available to you.

 

	
(f)
	
If any Debt received from any Customer is received by us in a currency other than U.S. Dollars and the amount produced by converting the other currency to U.S. Dollars is less than the amount of any sum advanced by us in relation to the Debt in question, then we shall be entitled to recoup any such shortfall from any Entitlement and you will in any event as an independent obligation indemnify us for the deficiency
and any loss sustained as a result.

 

  

  

  

- 6 -

 

 

 

	
(g)
	
Unless agreed by us in writing in advance any payments due hereunder shall be made in US dollar.  Any conversion described in paragraph (f) above shall be made at the prevailing rate of exchange on the date of clearance of any amount banked by us in such market as is reasonably determined by us as being most appropriate for such conversion, and you will in addition pay to us, or we shall be entitled to
deduct from your Entitlement all costs, charges and expenses relating to the collection of and Debt; and/or in the case of a Debt not denominated in US dollars, conversion of amounts collected into such currencies (or into such other currency as we determine from time to time of such conversion.

 

	
6.
	
Disputed Goods

 

If any goods relating to any Debt are returned by a Customer or delivery is refused or the goods are rejected or repossessed by you, you will issue a credit note to such Customer within 7 days of the goods being returned, rejected or repossessed and provide a copy of such credit note to us.  In addition,
you will repay to us the amount of such credit note so that we are not out of pocket.

 

	
7.
	
Accounts and Set-Off

 

	
(a)
	
We shall keep a permanent record to show all sums payable or paid to you, all payments received in relation to Debts and all fees, expenses and other sums payable or paid by you under this Agreement or otherwise.  Beginning on Commencement, we will send to you a copy of such account which shall be taken as prima facie evidence of the matters stated in it at the date of its preparation unless within fourteen
(14) days from receipt you notify us in writing of any discrepancy.  We shall further provide you with online access via a secured website to information on the Debts and reconciliation of the relationship relating to billing, collection and account maintenance such as aging, posting, error resolution and mailing of statements in the ordinary course of our business.  All of the foregoing shall be in a format and in such detail, as we, in our sole and absolute discretion, deem appropriate.

 

	
(b)
	
We may at any time set off any monies due to us from you whether pursuant to this Agreement or otherwise against any sums due from us to you.  We shall only be obliged to pay you sums which are net of any Discount fees and Disbursements due to us.

 

	
8.
	
Accounting and Access to Information

 

You agree that you will:

 

	
(a)
	
maintain accounting records and allow us or our properly authorised agents to enter your premises upon reasonable advance notice during business hours to inspect them and such other papers as we may wish relating to your business debts generally and allow us to make copies and extracts therefrom and to discuss such affairs, finances and accounts with your officers, employees and independent certified public accountants
all at your expense at the standard rates charged by us for such activities, plus our reasonable out-of-pocket expenses;

 

  

  

  

- 7 -

 

 

	
(b)
	
permit us or our agents to verify with your Customers by sampling or such other means as we may deem appropriate the existence and collectability of Debts prior to Commencement and at any time thereafter;

 

	
(c)
	
cause a proper audit to be completed of the books of account for yourself and your subsidiaries, if any, for each fiscal year and send an audited report and accounts to us as soon as they are available and in any event within three months from the end of each fiscal year;

 

	
(d)
	
deliver to us:

 

	
  
	
(i)
	
no later than thirty (30) days after the end of each calendar month your unaudited financial statements for that calendar month;

 

	
  
	
(ii)
	
no later than one hundred twenty (120) days after the end of each fiscal year your draft, unaudited annual financial statements; and

 

	
  
	
(iii)
	
no later than thirty (30) days after the end of each calendar month a certificate from you stating whether any Termination Events have occurred and stating in detail the nature of the Termination Event;

 

	
(e)
	
keep us informed at all times of the creditworthiness of your Customers and the validity of each Debt and in particular of any counterclaims, right of set off or other contra items raised by your Customers in relation to any Debt and provide reasonable assistance to us in every way to safeguard our interests and your own interest with respect to such Debts;

 

	
(f)
	
as and when produced, send us management accounts for your business and at our request for any Related Company in a format and at intervals acceptable to us;

 

	
(g)
	
if we require, send to us within five (5) Business Days from the end of each month an aged list of your creditors or a copy of your bought ledger;

 

	
(h)
	
report to us immediately about reclaimed, repossessed or returned merchandise, Customers' claims and disputes, and any other matters affecting any Debts;

 

	
(i)
	
on completion provide us with specimen signatures (electronic or otherwise) of persons authorised to sign any documents relating to this Agreement together with a board resolution or local-law equivalent document, authorising for this purpose such persons and inform us promptly of any change in the signatory authority of any of such signatories;

 

	
(j)
	
on completion provide us with a signed letter in the form set out in Schedule 3 (Notice to Existing and New Bank Accounts) for all existing bank accounts (and whenever you open a new bank account) requesting the bank to pay over to us monies received directly from your Customers;

 

(k)        notify us in writing

 

	
  
	
(i)
	
as soon as you become aware of any event which affects or may affect your warranties or our rights of termination as provided hereunder;

 

	
  
	
(ii)
	
of any mortgages charges liens or other security over your assets as of the Commencement;

 

  

  

  

- 8 -

 

 

	
  
	
(iii)
	
immediately when there are any material adverse changes in your business, changes in your directors or a material change in Control of your ownership (a person, firm or company aquiring fifty percent (50%) or more of your voting equity after Commencement is for this purpose deemed to be material);

 

	
  
	
(iv)
	
of any company which becomes or ceases to be a Related Company;

 

	
  
	
(v)
	
as soon as you become aware of any Customer which is your Associate or an Associate of any of your directors or might otherwise fairly be regarded as connected to you or any of your directors; and

 

	
  
	
(vi)
	
of the terms upon which any goods are supplied to you and obtain such waivers or variation to such terms as we may require.

 

9.         Warranties

 

	
9.1
	
You warrant that:

 

	
(a)
	
This Agreement is valid, binding and enforceable on you in accordance with its terms except to the extent that effect may be given to the law of another jurisdiction , insofar as, under the law of that jurisdiction, the law is mandatory irrespective of the governing law of this Agreement.

 

	
(b)
	
Neither you, nor any of your subsidiaries has taken any corporate action or any other step nor have any legal proceedings been threatened or served for the winding-up administration, receivership, administrative receivership or other insolvency or recovery process.

 

	
(c)
	
You are not in breach or default under any agreement to which you are a party or which may affect you or any of your assets to an extent or in a manner which would reasonably be expected to have a material adverse effect on the business or financial condition of you and your subsidiaries, taken as a whole.

 

	
(d)
	
All financial statements delivered to us unless otherwise expressly stated otherwise have been prepared in accordance with generally accepted accounting principles in Singapore consistently applied and such financial statements fairly present in all material respects your financial condition at the date as of which they were prepared and the result of your operations for the period to which they relate.

 

	
(e)
	
All information provided by you is true complete, accurate and up to date in all material respects and you are not aware of any material facts or circumstances that have not been disclosed to us which if disclosed might adversely affect our willingness to enter into this Agreement or accept any person to be a guarantor or indemnifier of your obligations and liabilities.

 

	
9.2
	
You warrant in respect of each Debt that:

 

	
(a)
	
you will not waive or modify your normal trading terms with such Customer without obtaining our prior written consent and in particular you will not extend the time for payment;

 

	
(b)
	
we shall obtain a valid binding and enforceable title to the full amount owing to you on such Debt sold to us and to all assigned rights and remedies included in the sale of such Debt to us and that no supplier to you will retain title to any goods sold by you which are the subject matter of such Debt;

 

  

  

  

- 9 -

 

 

	
(c)
	
you have already performed all the obligations required for enforcement of such Debt including delivery of goods or performance of services and are not aware of any actual or threatened dispute arising from or relating to such obligations;

 

	
(d)
	
to your knowledge, such Customer will pay the full amount of such Debt no later than 90 days from the invoice date;

 

	
(e)
	
the Customer has an established place of business, is not connected or associated with you and has no right which would reduce or extinguish the Gross Invoice Value of the Debt;

 

	
(g)
	
you have taken all reasonable steps to ascertain the creditworthiness of the Customer prior to the delivery of goods or the rendering of services;

 

	
(h)
	
you have no reason to believe that the Customer will in the ordinary course of business be unable to, or will not for any reason, pay the Debt in full when it falls due;

 

	
  
	
(i)
	
such Debt:

 

	
  
	
(i)
	
is a bona fide Debt owed by the Customer to you in the amount notified to us by you;

 

	
  
	
(ii)
	
has not previously been notified to us;

 

	
  
	
(iii)
	
has not been sold, assigned (whether absolutely or by way of security), mortgaged, charged, pledged, hypothecated or otherwise disposed of or transferred to, or encumbered in favour of, to any other person, nor has any agreement been made to do so; and

 

	
  
	
(iv)
	
is not subject to withholding tax; and

 

	
(j)
	
the Customer has no right of set-off, deduction, abatement or counterclaim in respect of the Debt.

 

	
10
	
Undertakings

 

You will:

 

	
(a)
	
keep us informed at all times of the creditworthiness of all Customers and (without prejudice to any of your other obligations under this Agreement) of any counterclaim, right of set-off, deduction, abatement or contra-item raised by a Customer at any time;

 

	
(b)
	
if we so require:

 

	
  
	
(i)
	
instruct your auditors to report directly to us at the your expense; and/or

 

	
  
	
(ii)
	
use your best efforts to procure that each bank or similar financial institution with which you maintain accounts provides us with copies of statements of those accounts; and

 

  

  

  

- 10 -

 

 

 

	
  
	
(c)
	
promptly notify us upon your becoming aware of any matter or circumstance that constitutes (or would, with the passing of time or the giving of notice, constitute) a Termination Event.

 

	
10.1
	
Negative Undertakings

 

You will not:

 

	
  
	
(a)
	
sell, assign, transfer, mortgage, charge, pledge or otherwise dispose of or encumber any Debt and/or its related rights and/or the proceeds of a Debt or its related rights or your rights under this Agreement, or agree or purport to do so, other than in favour of us;

 

	
  
	
(b)
	
without our prior written consent, materially waive or modify (or purport to waive or modify) any of the terms on which you supply goods or provide services and, in particular you will not extend the time for payment of any Debt or purport to do so;

 

	
  
	
(c)
	
without our prior written consent, waive or modify (or purport to waive or modify) any of the terms on which you purchase goods from your suppliers and, in particular, you will not permit any supplier to retain title to goods supplied to you (unless such is mandated by applicable law); or

 

	
  
	
(d)
	
sell or assign to us any Debt which is subject to any rights of retention of title, lien, recovery of possession and other remedies given by law to an unpaid vendor of goods or services.

 

	
10.2
	
Positive Undertakings

 

You will:

 

	
  
	
(a)
	
execute and deliver or (as the case may be) procure that the relevant person or persons execute and deliver the Ancillary Documents;

 

	
  
	
(b)
	
comply in all material respects with all legislation and regulatory requirements applicable to your business or assets where failure to do so would reasonably be expected to materially adversely affect your business, assets or financial condition;

 

	
  
	
(c)
	
promptly perform your continuing obligations under every supply contract giving rise to a Debt, including without limitation the repair and/or maintenance of goods supplied, to ensure that the Customer will accept the invoice relating to it (or, if the Customer is insolvent, the Customer’s trustee in bankruptcy or liquidator will accept a proof of the unpaid balance of the Debt) without any dispute or claim
whatsoever (whether or not justifiable);

 

	
  
	
(d)
	
if so required by us, deliver to us a letter, signed by you in such form as we may specify, addressed to each bank or financial institution at which you maintain an account, instructing such bank or financial institution as to the disposition of remittances received or to be received by it in purported settlement of any Debt;

 

	
  
	
(e)
	
promptly notify us in writing of any dispute of any kind between you and the Customer and to use all reasonable endeavours promptly to resolve every such dispute;

 

	
11.
	
Recourse

        

  

  

  

- 11 -

 

 

	
(a)
	
We may require you, at any time after we have served a written notice (a “Repurchase Notice”) upon you, to repurchase immediately any Disapproved Debt.

 

	
(b)
	
Each Repurchase Notice will set out in reasonable detail:

          

	
  
	
(i)
	
the description of each Disapproved Debt to be repurchased; and

 

	
  
	
(ii)
	
the repurchase price applicable to each such Disapproved Debt.

 

	
(c)
	
Until all the moneys payable by you under the relevant Repurchase Notice have been paid to us,  the Disapproved Debts included in such notice and their respective related rights (together with any goods relating to them) will remain vested in us. We will, upon receiving payment of all such moneys and having our expenses paid by you, reassign the relevant Disapproved Debts and their related rights (and
the relevant goods, if any) to you, and may give or require you to give an accompanying notice to each relevant Customer to that effect.

 

	
(d)
	
After the ownership of any Disapproved Debt has re-vested in you in accordance with paragraph (c) above, we will pay to you all sums subsequently received or recovered by us in relation to that Disapproved Debt, after deduction of any amounts then due and owing by you to us.

 

	
(e)
	
We have an additional right to require you to repurchase any Disapproved Debt at any time in our absolute discretion, whether or not you are in breach of your obligations under this Agreement.

 

	
12.
	
Power of Attorney

 

You grant to us an irrevocable power of attorney authorizing and permitting us, at our option, with or without notice to you to do any or all of the following:  (a) upon providing prior written notice to you, endorse your name on any checks or other evidences of payment whatsoever that may come into our possession
regarding such Debts we purchase; (b) upon the occurrence and during the continuance of a Termination Event, receive and open of any mail addressed to you and put our address on any statements mailed to Customers; provided that we shall turn over to you all such mail not related to the Debts we purchase; (c) upon providing prior written notice to you, pay, settle, compromise, prosecute or defend any action, claim, conditional waiver and release, or proceeding relating to Debts we purchase; (d) upon the occurrence
and during the continuance of a Termination Event, notify in your name, the relevant postal authorities to change the address for delivery of mail addressed to you to such address as we may designate, however, we shall turn over to you all such mail not relating to the Debts we purchase; (e) upon the occurrence and during the continuance of a Termination Event we may effect debits to any Demand Deposit or other account that you maintain at any bank for any sums due to or from you under this Agreement; and (g)
upon the occurrence and during the continuance of a Termination Event, to do all other things necessary in order to give effect to this Agreement.  This means that we can act on your behalf without reference to you in connection with the collection of book debt.  The authority granted to us herein is irrevocable until this Agreement is terminated and all of your obligations hereunder are fully satisfied in accordance with the terms of this Agreement. 

 

	
13.
	
Duration of Agreement

          

 

  

  

  

- 12 -

 

 

	
13.1
	
This Agreement will remain in operation for a period of 36 months from and including Commencement, after which, this Agreement shall be extended automatically for an additional period of twelve months for each anniversary of the date of this Agreement (a “Successor Term”) unless written notice
of termination is given by either you or us at least sixty (60) days, but not more than ninety (90) days, prior to the end of the Original Term, or any Successor Term thereto (as applicable).

 

	
13.2
	
Our rights of immediate termination are set out below.

 

We may by giving you written notice, terminate this Agreement forthwith if:

 

	
(a)
	
you commit a breach of any term of this Agreement and such breach is not cured or waived within ten (10) days of the occurrence thereof;

 

	
(b)
	
you fail to perform any of your obligations under the Singapore Security Documents;

 

	
(c)
	
there is any change in the person or persons who Controls you; or

 

(d)       any of our payments to you are not used in the ordinary course of your business; or

 

	
(e)
	
any monies owing from you to us are not paid within seven (7) days after they become due hereunder;

 

	
(f)
	
any distress or execution or attachment (not including any preliminary attachment, unless such preliminary attachment is not lifted within ten (10) days after it has been made) is levied upon any of your goods or premises or any garnishee order is made on any person indebted to you;

 

	
(g)
	
a receiver or administrative receiver is appointed of any of your assets;

 

	
(h)
	
you or any person who may have given to us a guarantee or indemnity  in respect of your obligations under this Agreement, becomes unable to pay their debts or becomes insolvent;

 

	
(i)
	
you convene a meeting for the purpose of passing a resolution for creditors voluntary winding up, or are the subject of a compulsory winding up order or a petition for an administration order is presented and you cease to carry on business or call a meeting of creditors to make an arrangement or composition with creditors or permit a judgment to remain unsatisfied for seven days; or

 

	
(j)
	
you are or have become insolvent;

 

	
(k)
	
if any person who has provided to us a waiver or who has executed a deed of priorities or given any other consent withdraws or purports to withdraw the same in circumstances where we may be materially adversely affected; or

 

	
(l)
	
there is a material adverse change in your financial condition, business or operations as a whole.

 

	
13.3
	
Any reference in this Clause 13 to you shall be taken to include any of your subsidiaries.

  
	
14.
	
Consequence of Termination

 

	
(a)
	
Termination of this Agreement will not affect the rights or obligations of either you or us in relation to any Debt nor affect the continued accrual of Discount, Administration

 

  

  

  

- 13 -

 

Fees or any other fees or expense payable under this Agreement and this Agreement will continue to bind us both as long as it is necessary to satisfy these rights and obligations.

 

	
(b)
	
In the event of termination of this Agreement by you prior to maturity or upon the occurrence of a Termination Event, other than as a result of our breach of this Agreement, our negligence or our wilful misconduct, then without prejudice to our accrued rights and
remedies under this Agreement you agree to pay us forthwith upon written demand Termination Fee.

 

	
(c)
	
In the event of termination of this Agreement by you prior to maturity or upon the occurrence of a Termination Event, other than as a result of our breach of this Agreement, our negligence or our wilful misconduct, then without prejudice to our accrued rights and remedies under this Agreement you agree to pay us forthwith upon written demand a sum equal to the
amount of all payments we have made to you under this Agreement plus all fees and charges which have accrued during the Agreement less the amounts which we have received from your Customers and which have been allocated to your account with us.

 

	
(d)
	
In the event of termination of this agreement by your prior to maturity or upon the occurrence of a Termination Event we may retain any amount received by us in respect of any Debt pending the drawing up of a final account and the payment of any amount that may remain thereunder due to us.

 

	
(e)
	
Following the drawing up of a final account and any consequent payment to us, we shall reassign to you without payment any Debts still outstanding.

 

	
15.
	
Security

 

	
(a)
	
You will grant us such fixed or floating charges as we may from time to time require as security for the payment of all sums due or becoming due to us under this Agreement and you will not give any new charge or other security to any third party without first obtaining our written consent.

 

	
(b)
	
We may from time to time require as a precondition to the continuation of the facilities provided to you under the terms of this Agreement the execution of other security documents or agreements providing for the subordination of certain of your Debt, to the extent such debt may be collateralized by all or any portion of the Debts.

 

	
16.
	
Indemnity

 

	
(a)
	
You agree to indemnify us against any claim by a Customer and any loss incurred by us as a result of our entering into this Agreement, except to the extent that such claims or losses arise from our gross misconduct, fraud, or deceit.  No waiver forbearance or indulgence granted by us to you or to any Customer will in any way discharge you from your liabilities to us.

 

	
(b)
	
You irrevocably agree to indemnify us against any cost, loss or expense that we may suffer or incur in respect of, except to the extent that such claims or losses arise from our gross misconduct, fraud, or deceit;

 

	
  
	
(i)
	
any breach of the warranties or obligations by you or any other person (other than us) under this Agreement or any Ancillary Document;

 

  

  

  

- 14 -

 

	
  
	
(ii)
	
any stamp, documentary, registration or similar duty or tax (including any penalty for late payment) imposed on or paid in respect of this Agreement or any Ancillary Document;

 

	
  
	
(iii)
	
acting on instructions appearing to come from you and given by telephone, facsimile or other electronic means, regardless of the authority or capacity of the person actually giving those instructions;

 

	
  
	
(iv)
	
collecting any cheque or negotiable instrument payable to you or endorsed in your favour; or

 

	
  
	
(v)
	
any claim made on us by any Customer in relation to a Debt or its related rights.

  
	
17.
	
Transfer of Rights

 

We shall be entitled to assign this Agreement or any of our rights and obligations hereunder.  You may not assign or otherwise deal with this Agreement or your rights and obligations hereunder without our prior written consent.

 

	
18.
	
Variation

 

This Agreement may only be varied by a document signed by us and by you.

 

	
19.
	
Applicable Law and Notices

 

This Agreement is to be interpreted in accordance with and governed by the laws of Singapore.  Any notices to be given by either you or us to the other may be either delivered by hand to the other party or its authorised agent or sent by pre-paid first class letter, registered post, recorded delivery fax
transmission or telex to such party as its principal place of business or at its registered office.  Notice of Termination from you to us is only effective seven days after receipt by us.

 

	
20.
	
Electronic Communications

 

We shall take all reasonable steps to ensure that electronic communications are properly stored, not accessible to unauthorised persons, not altered lost or destroyed and are capable of being retrieved during such period as you remain a customer.

 

In return you undertake and agree that we may accept rely and act upon any information received in an electronic communication even though it may not originate from you or any authorised officer of yours.  Moreover if you use any intermediary to transmit log or process messages then you do so at your own
risk and shall be responsible for your intermediary's acts and omissions.  You will indemnify us from and against all losses arising from any incomplete or inaccurate information contained in or failure to receive any electronic Communication.

 

	
21.
	
Jurisdiction

 

The courts of Singapore have non-exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement) (a "Dispute"). Each of us agrees that the
courts of Singapore are the most appropriate and convenient courts to settle Disputes and accordingly neither of us will argue to the contrary. This sub-Clause is for our benefit only.  As a result, we shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, we may take concurrent proceedings in any number of jurisdictions.

 

  

  

  

- 15 -

 

 

	
  
	
Counterparts

 

	
  
	
This Agreement may be executed in any number of counterparts, and on separate counterparts, but shall not be effective until at least one counterpart has been executed on behalf of each party.

 

Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute but one and the same instrument.

 

	
22.
	
Interpretation

          

	
●
	
“Administration Fee” means sixty-six hundredths of one percent (0.66%) of the gross invoice value of the Gross Invoice Value of such Debt;

 

	
●
	
“Ancillary Documents” means the Debenture executed in connection with Agreement on or about the date hereof and any such other document that we may require to be executed, signed, or delivered in connection with this Agreement;

 

	

●

	
“Approved Debt” means any Debt in respect of which the Payment Percentage has been advanced or is payable and which has not been Disapproved by us or which is previously Disapproved and has since been reapproved; and 'Approve' in relation to any Debt will be construed accordingly;

 

	

●

	
“Associate” means any relative, or any partner, director, shareholder, or management employee of you or of any Related Company;

 

	

●

	
“Business Day” means any day other than a Saturday, Sunday or other day on which banks are required or permitted to close in Singapore.

 

	

●

	
“Closing Fee” means thirty thousand and 00/100 U.S. Dollars (US$30,000);

 

	

●

	
“Commencement” means the effective date of this Agreement;

 

	

●

	
“Control” means the power to secure that the affairs of a company or a group of people are conducted in accordance with the wishes of those holding such power;

 

	

●

	
“Customer” means any person to whom you supply goods or for whom you perform services;

 

	

●

	
“Debt” means an amount which is owed to you for goods supplied or services performed calculated at Gross Invoice Value and includes the benefit of the sale or supply contract relating to such goods or services and all rights and remedies arising in connection with such contract including retention of title to goods, right of lien, stoppage in transit,
or recovery possession;

 

	

●

	
“Disapproved Debt” means any Debt:

 

	
  
	
(i)
	
that remains wholly or partly unpaid after its due date for payment;

 

	
  
	
(ii)
	
in respect of which the representations and warranties contained in Clause 9 (Warranties) are untrue or misleading in any material respect;

 

  

  

  

- 16 -

 

	
  
	
(iii)
	
that is the subject of any dispute by the Customer, or in respect of which the Customer asserts any right of retention, lien, set-off or counterclaim;

 

	
  
	
(iv)
	
that is aged ninety (90) days or more;

 

	
  
	
(v)
	
where a particular Customer has exceeded either your credit limits or those which we have notified to you; or

 

	
  
	
(vi)
	
that we disapprove of;

 

	

●

	
“Disbursements” has the meaning given to it in clause 4.6(a) (Disbursements);

 

	

●

	
“Discount” means a rate equal to the greater of 7.00% per annum or 2.50% above the US ”Prime Rate” as published by the Wall Street Journal Money Rates Section.  In the event that the Wall Street Journal ceases to publish a Prime Rate, then the Prime Rate shall be the Prime Rate as announced by JP Morgan Chase Bank on a daily
basis (all such Discount shall be computed for the actual number of days elapsed on the basis of a year consisting of three hundred sixty (360) days;

 

	

●

	
“Entitlement Limit” means two million and 00/100 U.S. Dollars (US$2,000,000);

 

	

●

	
“Expense Deposit” means twenty thousand and 00/100 U.S. Dollars (US$20,000);

 

	

●

	
“Gross Invoice Value” of a Debt is the total amount thereof including any goods and services tax, consumption tax, value added tax or any tax of a similar nature and before taking into consideration any allowances in respect of discounts for prompt payment or any other allowable deduction;

 

	

●

	
“Guarantee” means the cross-company guarantee to be entered into on or about the date of this Agreement by you and American Biltrite Incorporated in favour of us;

 

	

●

	
“Minimum Fee” means the difference between net funds employed for each month and USD$600,000 multiplied by the Administration Fee and the Discount calculated on a daily basis;

 

	

●

	
“Misdirected Payment Fee” means fifteen percent (15%) of the amount of any payment on Debts which has been received by you and not delivered to us on the next business day following the date of receipt by you;

 

	

●

	
“Original Term” means thirty six (36) months from the date of this Agreement;

 

	

●

	
“Payment Percentage” means eighty percent (80%) of the Approved Debt payable on notification as adjusted in accordance with Clause 3 (Payments to You);

 

	

●

	
“Reassignment” means in relation to any Approved Debt or Disapproved Debt our crediting the same to your sales ledger control account and debiting the same to your client account with us to reflect the fact that you have repurchased such Debt in accordance with the provisions of clause 11 (Recourse);

 

	

●

	
“Related Company” means a company which either you Control or which Controls you or which is Controlled by the same person, firm or company which Controls you; and

 

  

  

  

- 17 -

 

	

●

	
“Termination Event” means any of the events described in Clause 13.2 (Duration of Agreement);

 

	

●

	
“Termination Fee” means the fee payable by you on the expiry of a notice of termination given in accordance with Clause 13 (Duration of Agreement), in the amount of sixty thousand and 00/100 U.S. Dollars (US$60,000)

  

	
23.
	
General Conditions

 

This Agreement must be read in conjunction with our General Conditions.  In the event of any conflict or inconsistency between the provisions of this Agreement and the General Conditions, the provisions of this Agreement shall prevail.

  

  

  

IN WITNESS this Agreement has been signed as a Deed duly executed and delivered by each of the Parties hereto on the day and year first before written.

 

 

The COMMON SEAL of                                                                                               
 )

 

AMERICAN BILTRITE FAR EAST, INC.                                                                     
  )

 

was affixed to this Deed                                                                                                )

 

in the presence of:                                                                                                   )

 

 

	  	
/s/ Richard G. Marcus      

 

	  	
By:  Director

 

	  	  
	  	
/s/ Howard N.  Feist III      

 

	  	
By:  Director/Secretary

 

 

SIGNED as a DEED by                                                                                                )

 

FAUNUS GROUP INTERNATIONAL, INC.                                                                   )

 

acting by:                                                                                                                    
  )

 

 

	  	
/s/ David DiPiero      

 

	  	
By: David DiPiero

 

	  	
President

 

	  	  
	  	
/s/ Joe Albertelli        

 

	  	
By: Joe Albertelli

 

	  	
Vice President

 

	
  
	
 

 

  

  

  

Schedule 1

 

Schedule of Accounts Sold/Bill of Sale

Client’s Name ____________                                                                                                Schedule
Number ________________

Page ____ of _____                                                      Date
________

	
Invoice

Date
	
Invoice

Number
	
Name of Account Debtor
	
Location
	
Invoice

Amount

 
	
Currency
	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  

ASSIGNMENT:

KNOW ALL MEN BY THESE PRESENTS, that the undersigned for value received has sold transferred and assigned and does hereby sell, transfer and assign to Faunus Group International, Inc. (hereinafter called the “Buyer”), its successors and assigns, in accordance
with the provision of that certain Receivables Finance Agreement heretofore duly executed and delivered by the undersigned and duly accepted by the Buyer, and any amendments thereto (hereinafter called the "Agreement”), each Account, listed hereon, and all right, title and interest of the undersigned in and to such Account(s) and in and to all merchandise, the sale of which shall have given rise to such Account(s), including all of the undersigned’s right of stoppage in transit replevin and reclamation
as an unpaid vendor.  Each Account is made a part hereof as if attached or incorporated herein for specific terms, conditions, provisions and description of said Account(s).

For the purpose of inducing the Buyer to purchase such Account(s), the undersigned hereby reaffirms all warranties under the Agreement applicable to such Account(s) and account debtors. In the event of any breach of any such warranty, the Buyer, its successors and assigns,
shall have such rights, inter alia, as are provided in the Agreement.

The undersigned in his/her business capacity and warrants and represents that, with respect to each Account, since the last sale of Accounts by the undersigned to the Buyer, no merchandise has been returned or rejected, no defense, dispute, claim, offset or counterclaim
has developed or has been asserted with respect to any Account heretofore sold, transferred and assigned by the undersigned to the Buyer, which has not been or is not contemporaneously being reported in writing by the undersigned to the Buyer.

IN WITNESS WHEREOF, the undersigned has hereunto set its hand and seal this ____ day of _____________.

By:_____________________________

(Signature)

Print Name_______________________

Title:____________________________   

  

  

  

Schedule 2

Notice of Assignment

FGI Finance ("FGI")

We hereby notify you that we have assigned our present and future accounts to FGI.

To the extent that you are now indebted or may in the future become indebted to us on an account (i.e., invoices) or a general intangible, payment thereof is to be delivered and made payable only to FGI and not to us or any other entity.  Payment in any other way will not constitute payment and will not
discharge your obligation.

The payments should be wired in Singapore Dollars (SGD) only to FGI Finance with the following instructions:

Bank Name: The Development Bank of Singapore LTD. DBS

Swift Address:  DBSS SG SG

Account #:  037-002773-1

Account Name: Citizens Bank Rhode Island

Reference: FGI Finance 2007071000154

Please reference invoice numbers on all wire transmissions, advice forms, and payments

This letter may only be revoked by a writing signed by one of FGI’s officers whose signature may only be relied on if acknowledged before a notary public.

Please fax a copy of this letter to FGI at +01 212 248 3404 and to us at + [●] to verify your receipt and acceptance.

Thank you.

Very truly yours,

	
AMERICANT BILTRITE FAR EAST, INC.
	  	
ASSIGNMENT COMFIRMED:

	  	  	  
	
By:  ________________
	  	  
	  	  	
By: [ACCOUNT DEBTOR]      

	
Title: _______________
	  	  
	  	  	

Company:____________________________   

 

	  	  	

Title: ________________________________

 

	  	  	

Date :_______________________________

 

  

  

  

Schedule 3

Notice to Existing and New Account Banks

_______________________________________________________________________________

Form of notice to be served on completion by American Biltrite Far East, Inc. on its account banks pursuant to clause 8(j) of the receivables finance agreement.

_____________________________________________________________________________

 

[On the headed notepaper of American Biltrite Far East, Inc.]

 

[Account Bank]

For the attention of [●]

 

[date]

 

Dear Sirs

 

Receivables finance agreement dated [●] (the "Receivables Finance Agreement") between American Biltrite Far East, Inc. (“ABFE") and Faunus Group International, Inc (the “FGI”)

 

	
1.
	
This letter constitutes notice to you that, under the Receivables Finance Agreement, we have:

 

	
(a)
	
sold and assigned all of our Debts (as defined in the Receivables Finance Agreement) to ABFE that are owing at Commencement of the Receivables Finance Agreement and those Debts arising thereafter; and

 

	
(b)
	
agreed to instruct you to pay or transfer from our account held with you (account number [●]) (the “Collections Account”), all moneys which you receive in respect of the Debts into FGI’s account (account number 4001212330 held with Citizens Bank) (the “Account”), and, pending such payment or transfer, to hold all money on behalf of FGI .

 

	
2.
	
We each hereby irrevocably and unconditionally instruct and authorise you (notwithstanding any previous instructions which we may have given you to the contrary):

 

	
(a)
	
to comply with the terms of any written instructions relating or purporting to relate to the Collections Account which you may receive at any time and from time to time from FGI without any reference to or further authority from us and without any enquiry from you as to the justification for such notice, statement or instructions or its or their validity; and

 

	
(b)
	
not to act upon our instructions with regard to the Collections Account unless FGI confirms those instructions to you in writing.

 

	
3.
	
We are not permitted to withdraw from the Collections Account any amount relating to Debts without the prior written consent of FGI.

 

	
4.
	
The instructions and authorisations contained in this letter shall remain in full force and effect until we and FGI together give you notice in writing revoking them.

 

 

 

 

 

	
5.
	
The terms defined in the Receivables Finance Agreement shall, where the context so admits, have the same meaning in this letter.

 

	
6.
	
This letter shall be governed by and construed in accordance with the laws of England and Wales.

 

	
7.
	
Please will you acknowledge receipt of this letter and confirm your acceptance of the instructions and authorisations contained in it by sending a letter addressed to us and to FGI in the form attached to this letter.

 

Yours faithfully

 

 

	
For and on behalf of

	
American Biltrite Far East, Inc

.

  

  

  

[On the headed notepaper of Account Bank]

 

	 	
To:

	 	
Faunus Group International, Inc

	 	
80 Broad St

	 	
22nd Floor

	 	
New York

	 	
NY 10004

	 	  
	 	
For the attention of [●]

 

 

 

[date]

 

Dear Sirs

 

Accounts

 

We hereby acknowledge receipt of a letter (a copy of which is attached) dated [●] (the "Notice") addressed to us by American Biltrite Far East, Inc.

 

We hereby agree that we:

 

	
(a)
	
accept the instructions contained in the Notice and undertake to act in accordance and comply with the Notice;

 

	
(b)
	
have not received notice of the interest of any third party in the Collections Account;

 

	
(c)
	
shall not accept from ABFE any further instructions received by us in respect of the Collections Account without having received your written confirmation of such instructions;

 

	
(d)
	
shall pay all moneys received by us in respect of Debts into the Account; and

 

	
(e)
	
shall not permit any amount to be withdrawn from the Collections Account in respect of Debts without your prior written consent.

 

	
(f)
	
The capitalised terms used or incorporated by reference in the Notice shall, unless the context otherwise require, have the same meanings in this letter.

 

This letter shall be governed by and construed in accordance with the laws of England and Wales.

 

Yours faithfully

 

 

 

	
For and on behalf of [●]ex10-4.htm

    
      Exhibit  10.4

      

      DATED   June
30th  2009

      

      

      

      

      

      

      

       

      
        	
                 
      

              	
                (1)

              	
                AMERICAN
      BILTRITE INC.

              

      

       

      
        	
                 
      

              	
                (2)

              	
                FAUNUS
      GROUP INTERNATIONAL, INC.

              

      

       

      

       

      

       

      

       

      DEBT
PURCHASE AGREEMENT

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      

      THIS DEBT PURCHASE AGREEMENT is made
the  30th  day
of  June  2009

       

      BETWEEN:

       

      
        	
                (1)

              	
                AMERICAN BILTRITE INC. a
      Delaware corporation whose registered
      office is at 57 River Street, Wellesley Hills, Massachusetts 02181, USA,
      acting through its Belgian branch located at Industriezone “Klein
      Frankrijk” 23, 9600 Ronse  ("you", “your”, “yours” and “yourself”);
      and

              

      

       

      
        	
                (2)

              	
                FAUNUS GROUP INTERNATIONAL,
      INC. (D.B.A FGI FINANCE) a Delaware corporation, whose office is at
      80 Broad Street, 22nd
      Floor, New York, NY 10004, USA ("we", “us”, “our”, or “ours”);

              

      

       

      The
Clause headings used in this Agreement are for guidance only and are not
intended to affect its interpretation. A list of general definitions can be
found in Clause 24 of this Agreeement.

      

      
        	
                1.

              	
                Sale
      and Purchase of Debts

              

      

       

      
        	
                (a)

              	
                This
      Agreement will commence on Commencement and will continue until terminated
      in accordance with its terms.

              

      

       

      
        	
                (b)

              	
                By
      this Agreement, you will offer to sell to us and assign to us all
      Debts:

              

      

       

      
        	
                 
      

              	
                (i)
      existing on Commencement; and

              

      

       

      
        	
                 
      

              	
                (ii)
      arising after the Commencement and during the term of this Agreement,
      regardless of whether a Termination Event has
  occurred.

              

      

       

      
        	
                (c)

              	
                Such
      offer will be unconditional and made in writing in the form set out in
      Schedule 1 (Schedule of
      Accounts). If we accept such offer, we shall credit the notified
      value of the Debts to the account specified in Clause 3 whereupon such
      Debts become Approved Debts. As of such moment, the related Debts shall
      have been sold and assigned to us, even if such Debts are not yet entered
      in your books or records as due to
you. 

              

      

       

      
        	
                (d)

              	
                You
      will further deliver to us all Records or such other information and
      original or copy documents proving the existence of such Debt, the
      delivery of goods or the performance of your services in respect of the
      Debts as we may request.

              

      

       

      
        	
                (e)

              	
                Should
      any Debts (or any of the comprised ancillary or accessory rights) not come
      into our ownership (whatever the reason may be) although purchased by us
      you must account to us for such Debts (or related comprised ancillary or
      accessory rights) when received and you will hold such Debts (or related
      comprised ancillary or accessory rights) and the proceeds of the same on
      our behalf absolutely, separately and exclusively for our
      account.  You will co-operate with us in the execution of any
      necessary documents, deeds, instruments, policies, security, and any other
      action necessary to perfect the assignment and transfer to
      us  or hold in our favour in relation to, any Debts (and/or any
      related comprised ancillary or accessory rights), the proceeds of the same
      or to put this Agreement into
effect.

              

      

       

      
        	
                (f)

              	
                You
      will assign to us the benefit of any insurance policies relating to Debts
      or any goods sold which give rise to any
Debts.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                (g)

              	
                You
      shall promptly upon the execution of this Agreement (and promptly after
      you become entitled to a new Debt) notify the relevant Customer (with a
      copy to us) of the sale, transfer and assignment of such Debt by serving
      notice substantially in the form attached as Schedule 2 (Form of Customer Notification
      Letter).

              

      

       

      
        	
                (h)

              	
                Should
      we request, you will sign, pay stamp duty on and deliver to us a document
      in a form that we approve legally assigning to us any Debt or Debts
      together with the benefit of all guarantees given to you by your Customer
      and other related securities and, if we ask, you will immediately give
      written or other notice in a form and manner that we approve to any
      Customer whose Debt has been assigned in this
  way.

              

      

       

      
        	
                (i)

              	
                You
      will print, stamp or otherwise mark each invoice with a notice of
      assignment or sale of Debts shown on any invoice in a form which we shall
      specify such notice to be printed on your invoices within three months
      from the date of this Agreement and until such time we shall provide you
      with an adequate supply of self adhesive labels bearing appropriate
      notification language.

              

      

       

      
        	
                (j)

              	
                Should
      we decide that we do not wish you to deliver credit notes to a specific
      Customer, we will inform you of this in writing.  After receipt
      of such notification, you will not deliver any credit note direct to such
      Customer.

              

      

       

      
        	
                (k)

              	
                If
      your Customer becomes entitled to a credit or Customer discount in respect
      of any Debt you will notify us promptly and send to us a copy of the
      credit note in respect of the credited or discounted Debt with any other
      documents and information which we may request. In addition you will repay
      to us the amount of each credit note so that we are not out of
      pocket.

              

      

       

      
        	
                (l)

              	
                You
      may demand performance by us of our obligations hereunder and enforce
      these obligations, but you waive the right to demand rescission of the
      purchase of any Debt.  You also waives any unpaid seller’s lien
      that you may have under article 20, 5° of the Belgian Mortgage Act or
      otherwise.

              

      

       

      
        	
                (m)

              	
                We
      shall have full title and interest in and to the purchased Debt, shall be
      free to further dispose of such purchased Debt, and shall upon receipt the
      outstanding balance, be fully entitled to receive and retain for our own
      account any collections in respect of such purchased Debt, without
      prejudice subject to our obligations to pay you any balance still owed to
      you in connection with the Purchase Price of such Debt in accordance with
      Clause .

              

      

       

      
        	
                (n)

              	
                The purchase price for the Debts
      purchased (‘Purchase
      Price’) by us shall be calculated
      as follows:

              

      

       

      (1)   Gross
Invoice Value of
the offered Debts, as listed in the Schedule of Accounts, which we have accepted
to purchase;

       

      (2)   minus
the Discount applicable to such Debts.

       

      We
shall only make an advance payment of the Purchase Price of the Debts purchased
by us in accordance with Clause 2 and 3. For the avoidance of doubt, any balance
shall only be payable upon collection of the related Debts and after deduction
of all Fees, disbursements, commissions, costs or other expenses, as provided in
this Agreement.

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      
        	
                (o)

              	
                For
      the avoidance of doubt, the parties confirm their intention that this
      Agreement shall constitute:

              

      

       

      (1)   a
sale and assignment of contractual rights in accordance with Article 1689 and
following of the Belgian Civil Code, and not by way of endorsement and delivery
of invoices under the Belgian Act of 5 October 1919; and

       

      (2)   a
true sale of the Debt, and not a security arrangement for any
obligations.

       

      
        	
                2.

              	
                Disapproval
      and Re-Approval

              

      

       

      
        	
                (a)

              	
                We
      may at any time deduct from amounts which we would otherwise be required
      to send you, a sum equivalent to any Disapproved Debts previously
      purchased by us.

              

      

       

      
        	
                (b)

              	
                We
      shall (at our discretion) be allowed to sell any Disapproved Debts back to
      you (in accordance with Clause 11 (Recourse)) or
      re-approve them for the purposes of calculating amounts which you are
      entitled to draw.

              

      

       

      
        	
                (c)

              	
                All
      Disapproved Debts will continue to be owned by us until termination
      hereunder or earlier re-assignment (in accordance with Clause 11 (Recourse)) and you will
      forward to us forthwith any sums received by you in respect of any
      Disapproved Debts.

              

      

       

      
        	
                3.

              	
                Advances of the Purchase Price to
      you

              

      

       

      
        	
                (a)

              	
                For
      the duration of this Agreement, you will have a rolling account (‘Rolling
      Account’) with us the balance of which will be calculated, at any time as
      follows:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                add
      the Purchase Price of the Debts purchased by
      us;  then

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                multiply
      that amount by the Payment Percentage;
then

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                deduct
      from that amount the value of any Advances already made by us to
      you;  then

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                deduct
      from that amount any Fees, Disbursements or other fees then due to us and
      the value of any current Disapproved Debts (including any Debts aged 90
      days or more);  then

              

      

       

      
        	
                 
      

              	
                (v)

              	
                add
      the value of any re-approved Debts;
then

              

      

       

      
        	
                 
      

              	
                (vi)

              	
                add
      any collections of any Debts received from your Customers and the sum so
      calculated, if positive is your "Purchase Price
      Entitlement", for which you may make a payment
    demand.

              

      

       

      
        	
                (b)

              	
                You
      may request payment of the Purchase Price Entitlement, in the manner
      mutually agreed between us and you from time to time. Any balance of the
      Purchase Price owed by us to you will constitute a deferred payment and be
      conditional upon our irrevocable collection of the related Debts and be
      paid after deduction of all Fees, disbursements, costs or other expenses
      incurred by us, in accordance with this
  Agreement.

              

      

       

      
        	
                (c)

              	
                You
      will not be entitled to request or receive any payment from us under
      paragraph (b) above:

              

      

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (i)

              	
                if
      and to the extent that the relevant payment would result in the aggregate
      amount of all payments from us at any time exceeding the Purchase Price
      Entitlement Limit;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                if
      you are Insolvent; or

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                at
      any time at which we are entitled to terminate this Agreement under Clause
      13.2, whether or not we actually exercise any such
  right.

              

      

       

      
        	
                (d)

              	
                Each
      payment made by us to you will be denominated in the same currency as the
      Purchase Price of the Debt to which it relates.  It is your
      responsibility to ensure that the account to which such payment is to be
      transmitted under paragraph (c) above is suitable for the receipt of funds
      in the relevant currency.  We will not be liable for any loss or
      damage suffered by you in the event that the bank or other institution at
      which such account is maintained declines to accept a payment transmitted
      to it in that currency.

              

      

       

      
        	
                (e)

              	
                We
      will debit your Rolling Account with each amount paid to you under Clause
      3(b) on the Business Day on which we give instructions to our bankers to
      transmit that payment to your account under paragraph (d)
      above.

              

      

       

      
        	
                (f)

              	
                Upon
      the occurrence of a Termination Event, any further Advances to you will
      cease automatically and you will only be entitled to receive the Purchase
      Price of any Debts, or any remaining balance thereof,  if
      payment for such Debt is received from your Customers, after deduction of
      any Fees, disbursements, commissions, costs or other expenses as provided
      in this Agreement or otherwise incurred by
us.

              

      

       

      
        	
                4.

              	
                Charges

              

      

       

      
        	
                4.1

              	
                Discount

              

      

       

      
        	
                (a)

              	
                Discount
      will be charged on the daily net total balance outstanding and due from
      Customers to us in respect of the Gross Invoice Value of all Debts
      purchased applied on a daily basis.

              

      

       

      
        	
                (b)

              	
                Any
      receipt by us from your Customers will be credited to your Rolling Account
      with us four (4) Business Days after the day of banking, but not including
      the day of banking.

              

      

       

      
        	
                (c)

              	
                Payments
      made to you will be debited from your Rolling Account with us on the day
      on which they are made whether the payment is made to you by cheque or
      bank transfer.

              

      

       

      
        	
                4.2

              	
                Fees

              

      

       

      
        	
                (a)

              	
                We
      shall charge an Administration Fee to you on a monthly basis on the first
      day of each month.

              

      

       

      
        	
                (b)

              	
                A
      Commencement Fee will be due and payable by you upon
      Commencement.

              

      

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      
        	
                4.3

              	
                Minimum
    Fee

              

      

       

      
        	
                 
      

              	
                We
      will charge a monthly Minimum Fee in the event that your net funds
      employed each month following Commencement falls below USD$600,000,
      payable on a monthly basis.  The Minimum Fee will continue to be
      payable notwithstanding the occurrence of any Termination
      Event.

              

      

       

      
        	
                4.4

              	
                Bank
  Fee

              

      

       

      
        	
                (a)

              	
                We
      shall charge a transfer fee each time funds are transferred by us or
      received by us in connection with this
  Agreement.

              

      

       

      
        	
                (b)

              	
                You
      shall pay us all bank commission and other charges and expenses incurred
      or payable by us in relation to this Agreement and the arrangements
      contemplated in it on demand.

              

      

       

      
        	
                4.5

              	
                Over-payment
      Fees

              

      

       

      
        	
                 
      

              	
                We
      shall charge over-payment fees when you require funds in excess of the
      applicable Purchase Price Entitlement from time to time and we elect, in
      our discretion, to Advance you such funds in excess of the Purchase Price
      Entitlement at such time.  The over-payment fee will be
      calculated by increasing by 50% the Administration Fee payable during the
      period that you have drawn in excess of your Purchase Price Entitlement
      for such time, but such over-payment fee rate shall only apply for such
      period as you are overdrawn in excess of your Purchase Price Entitlement
      at such time.

              

      

       

      
        	
                4.6

              	
                Disbursements

              

      

       

      
        	
                (a)

              	
                In
      calculating your Purchase Price Entitlement, we shall deduct (and as such
      withhold from), in accordance with clause 3(a)(iv) (Payments to you) all
      disbursements which are identifiable as being attributable to you
      including, reasonable and documented attorney’s fees, court costs and
      other expenses incurred by us in the set-up, preparation, negotiation and
      enforcement of this Agreement and protecting or enforcing our interest in
      any Debt, in collecting the Debts or any security for this Agreement,
      including reimbursement for premiums incurred by us to insure against
      non-payment of any Debt or other insurable losses to the security for
      this Agreement, and credit reference fees, (such disbursements, “Disbursements”).

              

      

       

      
        	
                (b)

              	
                Notwithstanding anything in
      paragraph (a) above, you have, prior to Commencement, paid to us, and we
      have received and hold, an Expense Deposit to reimburse us for our actual
      costs and expenses incurred in connection with our review and approval
      process in relation to this Agreement, as well as field auditor fees, and
      reasonable and documented attorneys' fees and expenses incurred in the
      negotiation, execution, amendment or enforcement of this Agreement or the
      Ancillary Documents ("Approval Process Expenses").  We will
      provide you with a written accounting of all Approval Process Expenses,
      which shall be conclusive, absent manifest error.  That portion
      of the Expense Deposit equal to the Approval Process Expenses is
      non-refundable, irrespective of whether Commencement under this Agreement
      ever occurs.

              

      

       

      The
excess of the Expense Deposit over the Approval Process Expenses will be paid to
you upon demand and any Approval Process Expenses in excess of the Expense
Deposit shall be paid by you on demand, unless this transaction does not close
as the direct result of our gross negligence or wilful misconduct.

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

      
        	
                5.

              	
                Collection
      from Customers

              

      

       

      
        	
                (a)

              	
                From
      Commencement we shall have the sole and exclusive right to collect and
      enforce payment of every Debt other than Debts Reassigned to you and you
      have no right to collect any Debt (including any Disapproved Debt ) unless
      we authorise you to do so in advance in
writing.

              

      

       

      
        	
                (b)

              	
                You
      will assist our collection efforts if we so request by promptly providing
      all information required and you agree that for collection purposes we may
      institute and conduct legal proceedings in your name under our full
      control.  You also agree to co-operate in any such proceedings
      (including the giving of evidence) and agree to be bound by anything done
      by us under this Clause.

              

      

       

      
        	
                (c)

              	
                You
      will immediately pass to us or to any bank we direct any payment a
      Customer makes to you directly in respect of a Debt and you agree not to
      mark or endorse any negotiable instrument relating to such payment
      otherwise than in our favour.  You will hold any payment you
      receive for a Debt on our behalf for us until we receive it, separately
      and exclusively for our account.  Should you receive any check
      or other payment instrument with respect to a Debt or after default any
      Debt and fail to surrender and deliver to us said check or payment
      instrument on the next business day following the date of receipt by
      Customer, we shall be entitled to charge you a Misdirected Payment Fee to
      compensate us for the additional administrative expenses that the parties
      acknowledge is likely to be incurred as a result of such
      breach.  This is without prejudice to any other remedies that
      may be available to us at law.

              

      

       

      
        	
                (d)

              	
                If
      a Customer makes a payment either to us or to you without specifying which
      Debts are covered by it then we shall apply it first against any Debts
      outstanding, second against the discharge of your liability to us, if any,
      whether arising under this Agreement or otherwise, and any remaining
      balance shall be paid to you for your
  disposition.

              

      

       

      
        	
                (e)

              	
                If
      there is shown in our books a credit balance with any Customer which
      remains outstanding we shall be entitled at our discretion to make
      repayments of such credit balance to the Customer out of monies available
      to you.

              

      

       

      
        	
                (f)

              	
                If
      any Debt received from any Customer is received by us in a currency other
      than U.S. Dollars and the amount produced by converting the other currency
      to U.S. Dollars is less than the amount of any sum advanced by us in
      relation to the Debt in question, then we shall be entitled to recoup any
      such shortfall from any Purchase Price Entitlement and you will in any
      event as an independent obligation indemnify us for the deficiency and any
      loss sustained as a result.

              

      

       

      
        	
                (g)

              	
                Unless
      agreed by us in writing in advance any payments due hereunder shall be
      made in U.S. Dollars, Sterling, or Euros.  Any conversion
      described in paragraph (f) above shall be made at the prevailing rate of
      exchange on the date of clearance of any amount banked by us in such
      market as is reasonably determined by us as being most appropriate for
      such conversion, and you will in addition pay to us, or we shall be
      entitled to deduct from your Purchase Price Entitlement all costs, charges
      and expenses relating to the collection of and Debt; and/or in the case of
      a Debt not denominated in US dollars, Sterling or Euros conversion of
      amounts collected into such currencies (or into such other currency as we
      determine from time to time) of such
conversion.

              

      

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

      
        	
                6.

              	
                Disputed
      Goods

              

      

       

      If any
goods relating to any Debt are returned by a Customer or delivery is refused or
the goods are rejected or repossessed by you, you will issue a credit note to
such Customer within 7 days of the goods being returned, rejected or repossessed
and provide a copy of such credit note to us.  In addition, you will
repay to us the amount of such credit note so that we are not out of
pocket.

       

      
        	
                7.

              	
                Accounts
      and Set-Off

              

      

       

      
        	
                (a)

              	
                We
      shall keep a permanent record to show all sums payable or paid to you, all
      payments received in relation to Debts and all fees, expenses and other
      sums payable or paid by you under this Agreement or
      otherwise.  Beginning on Commencement, we will send to you a
      copy of such account which shall be taken as prima facie evidence of the
      matters stated in it at the date of its preparation unless within fourteen
      (14) days from despatch you notify us in writing of any
      discrepancy.  We shall further provide you with online access
      via a secured website to information on the Debts and reconciliation of
      the relationship relating to billing, collection and account maintenance
      such as aging, posting, error resolution and mailing of statements in the
      ordinary course of our business.  All of the foregoing shall be
      in a format and in such detail, as we, in our sole and absolute
      discretion, deem appropriate.

              

      

       

      
        	
                (b)

              	
                We
      may at any time set off any monies due to us from you whether pursuant to
      this Agreement or otherwise against any sums due from us to
      you.  We shall only be obliged to pay you sums which are net of
      any Discount fees and Disbursements due to
us.

              

      

       

      
        	
                8.

              	
                Accounting
      and Access to Information

              

      

       

      
        	
                 
      

              	
                You
      agree that you will:

              

      

       

      
        	
                (a)

              	
                maintain
      accounting records and allow us or our properly authorised agents to enter
      your premises upon reasonable advance notice during business hours to
      inspect them and such other papers as we may wish relating to your
      business debts generally and allow us to make copies and extracts
      therefrom and to discuss such affairs, finances and accounts with your
      officers, employees and independent certified public accountants all at
      your expense at the standard rates charged by us for such activities, plus
      our reasonable out-of-pocket
expenses.

              

      

       

      
        	
                (b)

              	
                permit
      us or our agents to verify with your Customers by sampling or such other
      means as we may deem appropriate the existence and collectability of Debts
      prior to Commencement and at any time
  thereafter;

              

      

       

      
        	
                (c)

              	
                cause
      a proper audit to be completed of the books of account for yourself and
      your subsidiaries, if any, for each fiscal year and send an audited report
      and accounts to us as soon as they are available and in any event within
      three months from the end of each fiscal
year;

              

      

       

      
        	
                (d)

              	
                deliver
      to us:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                no
      later than thirty (30) days after the end of each calendar month your
      unaudited financial statements for that calendar
  month;

              

      

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (ii)

              	
                no
      later than one hundred twenty (120) days after the end of each fiscal year
      your draft, unaudited annual financial statements;
  and

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                no
      later than thirty (30) days after the end of each calendar month a
      certificate from you stating whether any Termination Events have occurred
      and stating in detail the nature of the Termination
  Event;

              

      

       

      
        	
                (e)

              	
                keep
      us informed at all times of the creditworthiness of your Customers and the
      validity of each Debt and in particular of any counterclaims, right of set
      off or other contra items raised by your Customers in relation to any Debt
      and provide reasonable assistance to us in every way to safeguard our
      interests and your own interest with respect to such
  Debts;

              

      

       

      
        	
                (f)

              	
                as
      and when produced, send us management accounts for your business and at
      our request for any Related Company in a format and at intervals
      acceptable to us;

              

      

       

      
        	
                (g)

              	
                if
      we require, send to us within five (5) Business Days from the end of each
      month an aged list of your creditors or a copy of your bought
      ledger;

              

      

       

      
        	
                (h)

              	
                report
      to us immediately about reclaimed, repossessed or returned merchandise,
      Customers' claims and disputes, and any other matters affecting any
      Debts;

              

      

       

      
        	
                (i)

              	
                on
      completion provide us with specimen signatures (electronic or otherwise)
      of persons authorised to sign any documents relating to this Agreement
      together with a board resolution or local-law equivalent document,
      authorising for this purpose such persons and inform us promptly of any
      change in the signatory authority of any of such
    signatories;

              

      

       

      
        	
                (j)

              	
                on
      completion provide us with a signed letter in the form set out in Schedule
      3 (Notice to Existing
      and New Bank Accounts) for all existing bank accounts (and whenever
      you open a new bank account);

              

      

       

      
        	
                (k)

              	
                notify
      us in writing

              

      

       

      
        	
                 
      

              	
                (i)

              	
                as
      soon as you become aware of any event which affects or may affect your
      warranties or our rights of termination as provided
    hereunder;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                of
      any mortgages charges liens or other security over your assets as of the
      Commencement;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                immediately
      when there are any material adverse changes in your business, changes in
      your directors or a material change in Control of your ownership (a
      person, firm or company acquiring fifty percent (50%) or more of your
      voting equity after Commencement is for this purpose deemed to be
      material);

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                of
      any company which becomes or ceases to be a Related
    Company;

              

      

       

      
        	
                 
      

              	
                (v)

              	
                as
      soon as you become aware of any Customer which is your Associate or an
      Associate of any of your directors or might otherwise fairly be regarded
      as connected to you or any of your directors;
  and

              

      

       

      
        	
                 
      

              	
                (vi)

              	
                of
      the terms upon which any goods are supplied to you and obtain such waivers
      or variation to such terms as we may
require.

              

      

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      
        	
                9.

              	
                Warranties

              

      

       

      
        	
                9.1

              	
                You
      warrant that:-

              

      

       

      
        	
                (a)

              	
                This
      Agreement is valid, binding and enforceable on you in accordance with its
      terms except to the extent that effect may be given to the law of another
      jurisdiction, insofar as, under the law of that jurisdiction, the law is
      mandatory irrespective of the governing law of this Agreement and except
      as may be limited by bankruptcy, insolvency, reorganization, moratorium or
      similar laws relating to or limiting creditors’ rights generally or by
      equitable principles.

              

      

       

      
        	
                (b)

              	
                Neither
      you, nor any of your subsidiaries has taken any corporate action or any
      other step nor have any legal proceedings been threatened or served for
      the bankruptcy, judicial re-organisation, winding-up administration,
      receivership, administrative receivership or other insolvency or recovery
      process.

              

      

       

      
        	
                (c)

              	
                You
      are not in breach or default under any agreement to which you are a party
      or which may affect you or any of your assets to an extent or in a manner
      which woud reasonable be expected to have a material adverse effect on the
      business or financial condition of you and your subsidiaries, taken as a
      whole.

              

      

       

      
        	
                (d)

              	
                All
      financial statements delivered to us unless otherwise expressly stated
      otherwise have been prepared in accordance with generally accepted
      accounting principles in Belgium consistently applied and such financial
      statements fairly present in all material respects your financial
      condition at the date as of which they were prepared and the result of
      your operations for the period to which they
  relate.

              

      

       

      
        	
                (e)

              	
                All
      information provided by you is true complete, accurate and up to date in
      all material respects and you are not aware of any material facts or
      circumstances that have not been disclosed to us which if disclosed might
      adversely affect our willingness to enter into this Agreement or accept
      any person to be a guarantor or indemnifier of your obligations and
      liabilities.

              

      

       

      
        	
                (f)

              	
                Your
      business is not subject to a floating charge (pand op de handelszaak/gage
      sur fonds de commerce) or mortgage (hypotheek/hypothèque),
      similar foreign law security or any mandate to create the
      same.

              

      

       

      
        	
                9.2

              	
                You
      warrant in respect of each Debt
that:-

              

      

       

      
        	
                (a)

              	
                you
      will not waive or modify your normal trading terms with such Customer
      without obtaining our prior written consent and in particular you will not
      extend the time for payment;

              

      

       

      
        	
                (b)

              	
                the
      sale of each Debt constitutes a true sale following which we will become
      the unencumbered owner of the purchased Debt for the full amount owing to
      you under such Debt sold to us and of all assigned ancillary and accessory
      rights and remedies included in the sale of such Debt to
    us,

              

      

       

      
        	
                (c)

              	
                no
      supplier to you will retain title to any goods sold by you which are the
      subject matter of such Debt;

              

      

       

      
        	
                (d)

              	
                you
      have already performed all the obligations required for enforcement of
      such Debt including delivery of goods or performance of services and are
      not aware of any actual or threatened dispute arising from or relating to
      such obligations;

              

      

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

      
        	
                (e)

              	
                you
      have not acquired any Debt as part of an acquisition of a business or of
      another set of assets falling under the scope of Article 442bis of the
      Belgian Income Tax Code, Article 93undeciesB of the Belgian VAT Code or
      Article 41quinquies of the Social Security Act of 27 June
      1969;

              

      

       

      
        	
                (f)

              	
                to
      your knowledge, such Customer will pay the full amount of such Debt no
      later than 90 days from the invoice
date;

              

      

       

      
        	
                (g)

              	
                the
      Customer has an established place of business, is not connected or
      associated with you and has no right which would reduce or extinguish the
      Gross Invoice Value of the Debt.

              

      

       

      
        	
                (h)

              	
                the
      supply contract giving rise to that
Debt:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                is
      valid, binding and enforceable against the
  Customer;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                has
      been made in the ordinary course of your
  business;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                is
      governed by Belgian law or other law approved by us in writing, and
      provides for the Customer's submission to the jurisdiction of the courts
      of Belgium;

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                contains
      no prohibition against assignment of the Debt or any related right by
      us;

              

      

       

      
        	
                 
      

              	
                (v)

              	
                is
      not subject to the consumer credit Act of 12 June 1991 or any other
      consumer protection regulations or subordinate
  legislation;

              

      

       

      
        	
                 
      

              	
                (vi)

              	
                provides
      for payment in Euros, Sterling, or US dollars, unless otherwise agreed by
      us in writing;

              

      

       

      
        	
                 
      

              	
                (vii)

              	
                meets
      all criteria specified under insurance
policies;

              

      

       

      
        	
                 
      

              	
                (viii)

              	
                is
      not subject to, and does not arise in connection with a contract which is
      subject to public procurement laws and regulations;
  and

              

      

       

      
        	
                (i)

              	
                you
      have taken all reasonable steps to ascertain the creditworthiness of the
      Customer prior to the delivery of goods or the rendering of
      services;

              

      

       

      
        	
                (j)

              	
                you
      have no reason to believe that the Customer will in the ordinary course of
      business be unable to, or will not for any reason, pay the Debt in full
      when it falls due;

              

      

       

      
        	
                (k)

              	
                such
      Debt:

              

      

       

      
        	
                 
      

              	
                (ix)

              	
                constitutes
      valid, binding bona fide Debt owed by the Customer to you in the amount
      notified to us by  you, and is enforceable against the Customer
      in accordance with the terms of the contract giving rise to the
      Debt;

              

      

       

      
        	
                 
      

              	
                (x)

              	
                is
      freely assignable, has not been sold, assigned (whether absolutely or by
      way of security), mortgaged, charged, pledged, hypothecated or otherwise
      disposed of or transferred to, or encumbered in favour of, to any other
      person, nor has any agreement been made to do so;
  and

              

      

       

      
        	
                 
      

              	
                (xi)

              	
                is
      not subject to withholding tax; and

              

      

       

      
        	
                 
      

              	
                (xii)

              	
                arises
      from the sale of goods or the provision of services by you;
      and

              

      

       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (xiii)

              	
                is
      an obligation in respect of which no bill of exchange, promissory note or
      other negotiable instrument has been issued;
and

              

      

       

      
        	
                (l)

              	
                the Customer has no right of
      set-off, deduction, abatement , suspension, rescission counterclaim, or other
      defence in respect of the
      Debt (other than those provided for under mandatory rules of
      applicable law), and you have not entered into any netting agreement with
      the Customer.

              

      

       

      
        	
                10.

              	
                Undertakings

              

      

       

      
        	
                 
      

              	
                You
      will:

              

      

       

      
        	
                (a)

              	
                keep
      us informed at all times of the creditworthiness of all Customers and
      (without prejudice to any of your other obligations under this Agreement)
      of any counterclaim, right of set-off, deduction, abatement or contra-item
      raised by a Customer at any time;

              

      

       

      
        	
                (b)

              	
                if
      we so require:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                instruct
      your auditors to report directly to us at the your expense;
      and/or

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                use
      your best efforts to procure that each bank or similar financial
      institution with which you maintain accounts provides us with copies of
      statements of those accounts; and

              

      

       

      
        	
                (c)

              	
                promptly
      notify us upon your becoming aware of any matter or circumstance that
      constitutes (or would, with the passing of time or the giving of notice,
      constitute) a Termination Event.

              

      

       

      
        	
                10.1

              	
                Negative
      Undertakings

              

      

       

      You
will not:

       

      
        	
                (a)

              	
                sell,
      assign, transfer, mortgage, charge, pledge or otherwise dispose of or
      encumber any Debt and/or its related rights and/or the proceeds of a Debt
      or its related rights or your rights under this Agreement, or agree or
      purport to do so, other than in favour of
us;

              

      

       

      
        	
                (b)

              	
                without
      our prior written consent, materially waive or modify (or purport to waive
      or modify) any of the terms on which you supply goods or provide services
      and, in particular you will not extend the time for payment of any Debt or
      purport to do so;

              

      

       

      
        	
                (c)

              	
                without
      our prior written consent, permit any supplier to retain title to goods
      supplied to you (unless such is mandated by applicable law);
      or

              

      

       

      
        	
                (d)

              	
                sell
      or assign to us any Debt which is subject to any rights of retention of
      title, lien, recovery of possession and other remedies given by law to an
      unpaid vendor of goods or services.

              

      

       

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

      
        	
                10.2

              	
                Positive
      Undertakings

              

      

       

      You
will:

       

      
        	
                (a)

              	
                execute
      and deliver or (as the case may be) procure that the relevant person or
      persons execute and deliver the Ancillary
  Documents;

              

      

       

      
        	
                (b)

              	
                comply
      in all material respects with all legislation and regulatory requirements
      applicable to your business or assets where failure to do so would
      reasonably be expected to materially adversely affect your business,
      assets or financial condition;

              

      

       

      
        	
                (c)

              	
                promptly
      perform your continuing obligations under every supply contract giving
      rise to a Debt, including without limitation the repair and/or maintenance
      of goods supplied, to ensure that the Customer will accept the invoice
      relating to it (or, if the Customer is Insolvent, the Customer’s trustee
      in bankruptcy or liquidator will accept a proof of the unpaid balance of
      the Debt) without any dispute or claim whatsoever (whether or not
      justifiable);

              

      

       

      
        	
                (d)

              	
                if
      so required by us, deliver to us a letter, signed by you in such form as
      we may specify, addressed to each bank or financial institution at which
      you maintain an account, instructing such bank or financial institution as
      to the disposition of remittances received or to be received by it in
      purported settlement of any Debt;

              

      

       

      
        	
                (e)

              	
                promptly
      notify us in writing of any dispute of any kind between you and the
      Customer and to use all reasonable endeavours promptly to resolve every
      such dispute;

              

      

       

      
        	
                (f)

              	
                provide,
      and procure that any relevant Associate provides, to the extent required,
      safety briefings and equipment to our staff as necessary to comply with
      their responsibility under Belgian Act of 4 August 1996 on the Well-Being
      of Employees and ensure a safe system of work for such staff whilst on
      your or any such Associate’s
premises.

              

      

       

      
        	
                11.

              	
                Recourse

              

      

       

      
        	
                (a)

              	
                We
      may require you, at any time after we have served a written notice (a
      “Repurchase
      Notice”) upon you, to repurchase immediately any Disapproved
      Debt.

              

      

       

      
        	
                (b)

              	
                Each
      Repurchase Notice will set out in reasonable
  detail:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                the
      description of each Disapproved Debt to be repurchased;
  and

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                the
      repurchase price applicable to each such Disapproved
  Debt.

              

      

       

      
        	
                (c)

              	
                Until
      all the moneys payable by you under the relevant Repurchase Notice have
      been paid to us,  the Disapproved Debts included in such notice
      and their respective related rights (together with any goods relating to
      them) will remain vested in us, without prejudice to our right to deduct
      any such amounts by you to us from  the Purchase Price
      Entitlement owed to you or any other amounts payable by us. We will, upon
      receiving payment of all such moneys and having our expenses paid by you,
      reassign the relevant Disapproved Debts and their related rights (and the
      relevant goods, if any) to you, and may give or require you to give an
      accompanying notice to each relevant Customer to that
    effect.

              

      

       

      
        
           

        

        
          -12-

          
            

          

        

        
           

        

      

      
        	
                (d)

              	
                After
      the ownership of any Disapproved Debt has re-vested in you in accordance
      with paragraph (c) above, we will pay to you all sums subsequently
      received or recovered by us in relation to that Disapproved Debt, after
      deduction of any amounts then due and owing by you to
  us.

              

      

       

      
        	
                (e)

              	
                We
      have an additional right to require you to repurchase any Disapproved Debt
      at any time in our absolute discretion, whether or not you are in breach
      of your obligations under this
Agreement.

              

      

       

      
        	
                12.

              	
                Power
      of Attorney

              

      

       

      You
grant to us an irrevocable power of attorney authorizing and permitting us, at
our option, with or without notice to you to do any or all of the
following:  (a) upon providing prior written notice to you, endorse
your name on any checks or other evidences of payment whatsoever that may come
into our possession regarding such Debts we purchase; (b) upon the occurrence
and during the continuance of a Termination Event, receive and open of any mail
addressed to you and put our address on any statements mailed to Customers;
provided that we shall turn over to you all such mail not related to the Debts
we purchase; (c) upon providing prior written notice to you, pay, settle,
compromise, prosecute or defend any action, claim, conditional waiver and
release, or proceeding relating to Debts we purchase; (d) upon the occurrence
and during the continuance of a Termination Event, notify in your name, the
relevant postal authorities to change the address for delivery of mail addressed
to you to such address as we may designate, however, we shall turn over to you
all such mail not relating to the Debts we purchase; (e) upon the occurrence and
during the continuance of a Termination Event we may effect debits to any Demand
Deposit or other account that you maintain at any bank for any sums due to or
from you under this Agreement; and (g) upon the occurrence and during the
continuance of a Termination Event, to do all other things necessary in order to
give effect to this Agreement.  This means that we can act on your
behalf without reference to you in connection with the collection of book
debt.  The authority granted to us herein is irrevocable until this
Agreement is terminated and all of your obligations hereunder are fully
satisfied in accordance with the terms of this Agreement. 

       

      
        	
                13.

              	
                Duration
      of Agreement

              

      

       

      
        	
                13.1

              	
                This
      Agreement will remain in operation for a period of thirty six (36) months
      from and including Commencement, after which, this Agreement shall be
      extended automatically for an additional period of twelve (12) months for
      each anniversary of the date of this Agreement (a “Successor Term”) unless
      written notice of termination is given by either you or us at least sixty
      (60) days, but not more than ninety (90) days, prior to the end of the
      Original Term, or any Successor Term thereto (as
    applicable).

              

      

       

      
        	
                13.2

              	
                Our
      rights of immediate termination are set out
  below.

              

      

       

      
        	
                 
      

              	
                We
      may by giving you written notice terminate this Agreement forthwith
      if:

              

      

       

      
        	
                (a)

              	
                you
      commit a breach of any term of this Agreement and such breach is not cured
      or waived within ten (10) days of the occurrence
  thereof;

              

      

       

      
        	
                (b)

              	
                you
      fail to perform any of your obligations under the Belgian Security
      Documents;

              

      

       

      
        	
                (c)

              	
                there
      is any change in the person or persons who Controls you;
  or

              

      

       

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

      
        	
                (d)

              	
                any
      of our payments to you are not used in the ordinary course of your
      business;

              

      

       

      
        	
                (e)

              	
                any
      monies owing from you to us are not paid within seven (7) days after they
      become due hereunder;

              

      

       

      
        	
                (f)

              	
                any
      distress, execution, seizure or (conservatory or executory) attachment
      (not including any preliminary attachment, unless such preliminary
      attachment is not lifted within ten (10) days after it has been made) is
      levied upon any of your goods or premises or any garnishee order is made
      on any person indebted to you;

              

      

       

      
        	
                (g)

              	
                you
      or any person who has given to us a guarantee or indemnity (including but
      not limited to any guarantee) in respect of your obligations under this
      Agreement, becomes unable to pay their debts or becomes Insolvent, or the
      effectiveness or ranking any security given to us in connection with this
      Agreement is flawed or impaired; or

              

      

       

      
        	
                (h)

              	
                you
      convene a meeting for the purpose of passing a resolution for creditors
      voluntary winding up, or are the subject of a compulsory winding up order
      or a petition for an administration order is presented and you cease to
      carry on business or call a meeting of creditors to make an arrangement or
      composition with creditors or permit a judgment to remain unsatisfied for
      seven days; or

              

      

       

      
        	
                (i)

              	
                you
      are or have become Insolvent;

              

      

       

      
        	
                (j)

              	
                if
      any person who has provided to us a waiver or who has executed a deed of
      priorities or given any other consent withdraws or purports to withdraw
      the same in circumstances where we may be materially adversely affected;
      or

              

      

       

      
        	
                (k)

              	
                there
      is a material adverse change in your financial condition, business or
      operations as a whole.

              

      

       

      
        	
                13.3

              	
                Any
      reference in this clause to you shall be taken to include any of your
      subsidiaries.

              

      

       

      
        	
                14.

              	
                Consequence
      of Termination

              

      

       

      
        	
                (a)

              	
                Termination
      of this Agreement will not affect the rights or obligations of either you
      or us in relation to any Debt nor affect the continued accrual of
      Discount, Administration Fees or any other fees or expense payable under
      this Agreement and this Agreement will continue to bind us both as long as
      it is necessary to satisfy these rights and
  obligations.

              

      

       

      
        	
                (b)

              	
                In
      the event of termination of this Agreement by you prior to maturity or
      upon the occurrence of a Termination Event, other than as a result of our
      breach of this Agreement, our gross negligence or our wilful misconduct,
      then without prejudice to our accrued rights and remedies under this
      Agreement you agree to pay us forthwith upon written demand Termination
      Fee.

              

      

       

      
        	
                (c)

              	
                In
      the event of termination of this Agreement by you prior to maturity or
      upon the occurrence of a Termination Event, other than as a result of our
      breach of this Agreement, our gross negligence or our wilful misconduct,
      then without prejudice to our accrued rights and remedies under this
      Agreement you agree to pay us forthwith upon written demand a sum equal to
      the amount of all payments we have made to you under this Agreement plus
      all fees and charges which have accrued during the Agreement less the
      amounts which we have received from your Customers and which have been
      allocated to your account with us.

              

      

       

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

      
        	
                (d)

              	
                In
      the event of termination of this agreement by your prior to maturity or
      upon the occurrence of a Termination Event we may retain any amount
      received by us in respect of any Debt pending the drawing up of a final
      account and the payment of any amount that may remain thereunder due to
      us.

              

      

       

      
        	
                (e)

              	
                Following
      the drawing up of a final account and any consequent payment to us, we
      shall reassign to you without payment any Debts still
      outstanding.

              

      

       

      
        	
                15.

              	
                Security

              

      

       

      
        	
                (a)

              	
                You
      will grant us such security rights as we may from time to time require as
      security for the payment of all sums due or becoming due to us under this
      Agreement and you will not give any new charge or other security to any
      third party without first obtaining our written
  consent.

              

      

       

      
        	
                (b)

              	
                We
      may from time to time require as a precondition to the continuation of the
      facilities provided to you under the terms of this Agreement the execution
      of other security documents or agreements providing for the subordination
      of certain of your Debt, to the extent such debt may be collateralized by
      all or any portion of the Debts.

              

      

       

      
        	
                16.

              	
                Indemnity

              

      

       

      
        	
                (a)

              	
                You
      agree to indemnify us against any claim by a Customer and any loss
      incurred by us as a result of our entering into this Agreement, except to
      the extent that such claims or losses arise from our gross misconduct,
      fraud, or deceit.  No waiver forbearance or indulgence granted
      by us to you or to any Customer will in any way discharge you from your
      liabilities to us.

              

      

       

      
        	
                (b)

              	
                You
      irrevocably agree to indemnify us against any cost, loss or expense that
      we may suffer or incur in respect of, except to the extent that such
      claims or losses arise from our gross misconduct, fraud, or
      deceit;

              

      

       

      
        	
                 
      

              	
                (i)

              	
                any
      breach of the warranties or obligations by you or any other person (other
      than us) under this Agreement or any Ancillary
  Document;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                any
      stamp, documentary, registration or similar duty or tax (including any
      penalty for late payment) imposed on or paid in respect of this Agreement
      or any Ancillary Document;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                acting
      on instructions appearing to come from you and given by telephone,
      facsimile or other electronic means, regardless of the authority or
      capacity of the person actually giving those
  instructions;

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                collecting
      any cheque or negotiable instrument payable to you or endorsed in your
      favour; or

              

      

       

      
        	
                 
      

              	
                (v)

              	
                any
      claim made on us by any Customer in relation to a Debt or its related
      rights.

              

      

       

      
        	
                17.

              	
                Transfer
      of Rights

              

      

       

      We
shall be entitled to assign this Agreement or any of our rights and obligations
hereunder. You may not assign or otherwise deal with this Agreement or your
rights and obligations hereunder without our prior written consent.

       

      
        
           

        

        
          -15-

          
            

          

        

        
           

        

      

      
        	
                18.

              	
                Variation

              

      

       

      This
Agreement may only be varied by a document signed by us and by you.

       

      
        	
                19.

              	
                Severability

              

      

       

      Any
provision of this Agreement which is illegal, invalid, prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such illegality, invalidity, prohibition or
unenforceability in any other jurisdiction will not invalidate or render
unenforceable such provision in any further jurisdiction and the parties will
negotiate in good faith to replace the relevant provision by another provision
reflecting as closely as possible the original intention and purposes of the
parties.

       

      
        	
                20.

              	
                Notices

              

      

       

      Any
notices to be given by either of us to the other may be either delivered by hand
to the other party or its authorised agent or sent by pre-paid first class
letter, registered post, recorded delivery fax transmission or telex to such
party as its principal place of business or at its registered
office.  Notice of Termination from you to us is only effective seven
(7) days after receipt by us.

       

      
        	
                21.

              	
                Third
      Parties

              

      

       

      No
person who is not a party to this Agreement shall have any rights under this
Agreement.

       

      
        	
                22.

              	
                Electronic
      Communications

              

      

       

      We
shall take all reasonable steps to ensure that electronic communications are
properly stored, not accessible to unauthorised persons, not altered lost or
destroyed and are capable of being retrieved during such period as you remain a
customer.

       

      In
return you undertake and agree that we may accept rely and act upon any
information received in an electronic communication even though it may not
originate from you or any authorised officer of yours.  Moreover if
you use any intermediary to transmit log or process messages then you do so at
your own risk and shall be responsible for your intermediary's acts and
omissions.  You will indemnify us from and against all losses arising
from any incomplete or inaccurate information contained in or failure to receive
any Electronic Communication.

       

      
        	
                23.

              	
                Applicable
      Law and Jurisdiction

              

      

       

      This
Agreement is to be interpreted in accordance with and governed by [Belgian]
Law.  Each party submits to the non-exclusive jurisdiction of the
courts of [Brussels] to settle any disputes (including claims for set-off and
counterclaims) which may arise in connection with the legal relationships
established by this Agreement or otherwise arising in connection with this
Agreement.

       

      
        
           

        

        
          -16-

          
            

          

        

        
           

        

      

      
        	
                24.

              	
                Counterparts

              

      

       

      This
Agreement may be executed in any number of counterparts, and on separate
counterparts, but shall not be effective until at least one counterpart has been
executed on behalf of each party.

       

      Each
counterpart shall constitute an original of this Agreement, but all the
counterparts shall together constitute but one and the same
instrument.

       

      
        	
                25.

              	
                Interpretation

              

      

       

      
        	
                ·

              	
                “Advances” has the
      meaning given to such term in Clause 3 (b) of this
    Agreement;

              

      

       

      
        	
                

                  ·

                

              	
                “Administration Fee”
      means, in relation to a debt, sixty-six hundredths of one percent (0.66%)
      of its Gross Invoice Value;

              

      

       

      
        	
                

                  ·

                

              	
                “Ancillary Documents’
      means the Pledge of Receivables executed in connection with
      Agreement on or about the date hereof and any such other document that we
      may require to be executed, signed or delivered in connection with his
      Agreement;

              

      

       

      
        	
                

                  ·

                

              	
                “Approved Debt” means
      any Debt in respect of which the Payment Percentage has been advanced or
      is payable and which has not been Disapproved by us or which is previously
      Disapproved and has since been re-approved; and 'Approve' in relation to
      any Debt will be construed
accordingly;

              

      

       

      
        	
                

                  ·

                

              	
                “Associate” means any
      relative, or any partner, director, shareholder, or management employee of
      you or of any Related Company;

              

      

       

      
        	
                

                  ·

                

              	
                “Belgian Security
      Documents” means the Pledge of Receivables executed in connection
      with Agreement on or about the date
hereof;

              

      

       

      
        	
                

                  ·

                

              	
                “Business Day” means any
      day other than a Saturday, Sunday or other day on which banks are required
      or permitted to close in the city of Brussels, The Kingdom of
      Belgium;

              

      

       

      
        	
                

                  ·

                

              	
                “Commencement” means the
      effective date of this Agreement;

              

      

       

      
        	
                

                  ·

                

              	
                “Commencement Fee” means
      thirty thousand and 00/100 U.S. Dollars
  (US$30,000);

              

      

       

      
        	
                

                  ·

                

              	
                “Control” means the
      power to secure that the affairs of a company or a group of people are
      conducted in accordance with the wishes of those holding such
      power;

              

      

       

      
        	
                

                  ·

                

              	
                “Customer” means any
      person to whom you supply goods or for whom you perform services, and who
      is obliged in accordance with your records to make a payment for the
      provision of goods or services under a contract for which an invoice has
      been issued (or, if different, the person so
  obliged);

              

      

       

      
        	
                

                  ·

                

              	
                “Debt” means the right
      to claim any indebtedness owed or purported to be owed to you by any
      Customer for goods supplied or services performed, calculated at Gross
      Invoice Value, including, to the fullest extent permitted by law, the
      benefit of any accessory and ancillary rights, and remedies arising in
      connection with such contract (including, for the avoidance of doubt, the
      benefit of any security interest, any seller’s lien and retention of title
      and the proceeds under any credit insurances or other insurances in
      relation to the supply of such services or goods, and the benefit of
      repossession of goods);

              

      

       

      
        
           

        

        
          -17-

          
            

          

        

        
           

        

      

      
        	
                

                  ·

                

              	
                “Disapproved Debt” means
      any Debt:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                that
      remains wholly or partly unpaid after its due date for
      payment;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                in
      respect of which the representations and warranties contained in Clause 9
      (Warranties) are untrue or misleading in any material
    respect;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                that
      is the subject of any dispute by the Customer, or in respect of which the
      Customer asserts any right of retention, lien, set-off or
      counterclaim;

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                that
      is aged ninety (90) days or more;

              

      

       

      
        	
                 
      

              	
                (v)

              	
                where
      a particular Customer has exceeded either your credit limits or those
      which we have notified to you; or

              

      

       

      
        	
                 
      

              	
                (vi)

              	
                that
      we disapprove of;

              

      

       

      
        	
                

                  ·

                

              	
                “Disbursements” has the meaning given
      to it in clause 4.6(a) (Disbursements);

              

      

       

      
        	
                

                  ·

                

              	
                “Discount” means a rate
      equal to the greater of 7.00% per annum or 2.50% above the US ”Prime Rate”
      as published by the Wall Street Journal Money Rates Section.  In
      the event that the Wall Street Journal ceases to publish a Prime Rate,
      then the Prime Rate shall be the Prime Rate as announced by JP Morgan
      Chase Bank on a daily basis (all such Discount shall be computed for the
      actual number of days elapsed on the basis of a year consisting of three
      hundred sixty (360) days;

              

      

       

      
        	
                

                  ·

                

              	
                “Euro” or “Euros” means lawful
      currency of the European Union;

              

      

       

      
        	
                

                  ·

                

              	
                “Expense Deposit” means
      twenty thousand and 00/100 U.S. Dollars
  (US$20,000);

              

      

       

      
        	
                

                  ·

                

              	
                “Fees” means
      Administration Fee, Commencement Fee, Deficiency Assessment Fee, Misdirect
      Payment Fee and Termination Fee;

              

      

       

      
        	
                

                  ·

                

              	
                “Gross Invoice Value” of
      a Debt is the total amount thereof including VAT and before taking into
      consideration any allowances in respect of discounts for prompt payment or
      any other allowable deduction;

              

      

       

      
        	
                

                  ·

                

              	
                “Guarantee” means the
      cross-company guarantee to be entered into on or about the date of this
      Agreement by you and American Biltrite Far East, Inc. in favour of
      us;

              

      

       

      
        	
                

                  ·

                

              	
                “Insolvent” means in
      relation to a natural or legal person (which includes a partnership,
      association, company or other incorporated entity), means any of the
      following:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                the
      relevant person is unable to pay his or its debts within the meaning of
      section 123 of the Insolvency Act 1986 or Article 2 of the Belgian
      Bankruptcy Act of 8 August 1997;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                a
      statutory demand is served on the relevant person and the statutory demand
      is not set aside within 21 days;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                the
      relevant person applies for an interim order under section 253 of the
      Insolvency Act 1986 or an arrangement or a composition is made for the
      benefit of creditors (or a class of creditors) whether or not pursuant to
      the Insolvency Act 1986;

              

      

       

      
        
           

        

        
          -18-

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (iv)

              	
                a
      bankruptcy order is made in relation to a partner in the relevant person,
      or a partner applies for an interim order under section 253 of the
      Insolvency Act 1986 or an arrangement or a composition is made for the
      benefit of creditors (or a class of creditors) whether or not pursuant to
      the Insolvency Act 1986;

              

      

       

      
        	
                 
      

              	
                (v)

              	
                a
      petition is presented, or other proceedings are commenced, or a meeting is
      called to pass a resolution, for the relevant person's bankruptcy, winding
      up or administration or for a corporate voluntary arrangement or similar
      procedure;

              

      

       

      
        	
                 
      

              	
                (vi)

              	
                a
      receiver, administrative receiver, administrator or similar official is
      appointed in respect of the relevant person or his or its
      assets;

              

      

       

      
        	
                 
      

              	
                (vii)

              	
                the
      relevant person’s assets are seized, distrained or executed
      against;

              

      

       

      
        	
                 
      

              	
                (viii)

              	
                the
      relevant person ceases or threatens to cease to carry on business or
      suspends payment of his or its
debts;

              

      

       

      
        	
                 
      

              	
                (ix)

              	
                a
      judgment or other money order is obtained against the relevant person, or
      his or its assets, which is not satisfied within 7
  days;

              

      

       

      
        	
                 
      

              	
                (x)

              	
                the
      occurrence, in relation to that person, or his or its assets, of anything
      analogous to the matters set out in paragraphs (i) to (x) (inclusive)
      above under the laws of any other jurisdiction to which that person or his
      or its assets may at any time be
subject;

              

      

       

      
        	
                 
      

              	
                (xi)

              	
                any
      other amount due, owing or incurred by the person in respect of any
      indebtedness is not paid when it becomes due, or becomes capable of being
      declared due and payable prior to its stated maturity for any
      reason;

              

      

       

      
        	
                

                  ·

                

              	
                “Minimum Fee” means the
      difference between net funds employed for each month and USD$600,000
      multiplied by the Administration Fee and the Discount calculated on a
      daily basis;

              

      

       

      
        	
                

                  ·

                

              	
                “Misdirected Payment
      Fee” means
      fifteen percent (15%) of the amount of any payment on Debts which has been
      received by you and not delivered to us on the next business day following
      the date of receipt by you;

              

      

       

      
        	
                

                  

                    ·

                  

                

              	
                “Original Term” means
      thirty six (36) months from the date of this
  Agreement;

              

      

       

      
        	
                

                  ·

                

              	
                “Payment Percentage”
      means eighty percent (80%) of the Approved
Debt;

              

      

       

      
        	
                

                  ·

                

              	
                “Purchase Price Entitlement
      Limit” means two million and 00/100 U.S. Dollars
      (US$2,000,000);

              

      

       

      
        	
                

                  ·

                

              	
                “Records” means, in
      respect of any Debt, all contracts, correspondence, notes of dealings and
      other documents, books, books of account, registers, records and other
      information (including, without limitation, computer programmes, tapes,
      discs, data processing software and related property and rights)
      maintained (and recreated in the event of destruction of the originals
      thereof) with respect to
      such Debt and the related Customer owing such
  Debt.

              

      

       

      
        	
                

                  ·

                

              	
                “Reassignment” means in
      relation to any Approved Debt or Disapproved Debt our crediting the same
      to your sales ledger control account and debiting the same to your client
      account with us to reflect the fact that you have repurchased such Debt in
      accordance with the provisions of clause 11 (Recourse);

              

      

       

      
        
           

        

        
          -19-

          
            

          

        

        
           

        

      

      
        	
                

                  

                    ·

                  

                

              	
                “Related Company” means
      a company which either you Control or which Controls you or which is
      Controlled by the same person, firm or company which Controls you;
      and

              

      

       

      
        	
                

                  

                    ·

                  

                

              	
                “Rolling Account” has
      the meaning given to such term in Clause 3(a) of the
      Agreement;

              

      

       

      
        	
                

                  ·

                

              	
                “Termination Event”
      means any of the events described in Clause 13.2 (Duration of
      Agreement);

              

      

       

      
        	
                

                  

                    ·

                  

                

              	
                “Termination Fee” means
      the fee payable by you on the expiry of a notice of termination given in
      accordance with Clause 13 (Duration of Agreement),
      in the amount of sixty thousand and 00/100 U.S. Dollars
      (US$60,000)

              

      

       

      
        	
                

                  

                    ·

                  

                

              	
                “Sterling” means lawful
      currency of the United Kingdom;

              

      

       

      
        	
                

                  

                    ·

                  

                

              	
                “U.S. Dollars” or “$” means lawful
      currency of the United States of
America.

              

      

       

      
        
           

        

        
          -20-

          
            

          

        

        
           

        

      

      Schedule
1

       

      Schedule
of Accounts

       

      Client’s
Name:                                Schedule
Number ________________

       

      Page
____ of
_____                                           Date
________ 200_

       

      

       

      
        	
                Invoice
      Date

              	
                Invoice
      Number

              	
                Name
      of Account Debtor

              	
                Location

              	
                Invoice
      Amount

              	
                Currency

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      

      

      ASSIGNMENT:

       

      KNOW ALL
MEN BY THESE PRESENTS  that the undersigned for value received has
sold transferred and assigned and does hereby sell transfer and assign to Faunus
Group International, Inc. (hereinafter called the “Buyer”), its successors and
assigns, in accordance with the provision of that certain Debt Purchase
Agreement heretofore duly executed and delivered by the undersigned and duly
accepted by the Buyer and any amendments thereto (hereinafter called the
“Agreement”) each Account listed hereon and all right, title and interest of the
undersigned in and to such Account(s) and in and to all merchandise, the sale of
which shall have given rise to such Account(s), including all of the
undersigned’s right of stoppage in transit replevin and reclamation as an unpaid
vendor and the benefit of any repossession and security.  Each Account
is made a part hereof as if attached or incorporated herein for specific terms,
conditions, provisions and description of said Account(s).

       

      For the
purpose of inducing the Buyer to purchase such Account(s), the undersigned
hereby reaffirms all warranties under the Agreement applicable to such
Account(s) and account debtors.  In the event of any breach of any
such warranty, the Buyer, its successors and assigns, shall have such rights,
inter alia, as are provided in the Agreement.

       

      The
undersigned in his/her business capacity and  warrants and represents
that, with respect to each Account, since the last sale of Accounts by the
undersigned to the Buyer, no merchandise has been returned or rejected, no
defense, dispute, claim, offset or counterclaim has developed or has been
asserted with respect to any Account heretofore sold, transferred and assigned
by the undersigned to the Buyer, which has not been or is not contemporaneously
being reported in writing by the undersigned to the Buyer.

       

      IN
WITNESS WHEREOF, the undersigned has hereunto set its hand and seal this ____
day of _____________, 200___.

       

      By:____________________________   Print
Name______________________   Title:___________________

       

         (Signature)

       

      
        
          
          

        

        
          -21-

          
            

          

        

        
          
          

        

      

      

      [on the letterhead paper of American
Biltrite, Inc.]

      

      Schedule
2

      Notice
to Customers

      ­­­­­­­­­_____________________________________________________________________________

      

      Form of
notice to be served on completion by American Biltrite, Inc. on its customers
pursuant to clause 1(f) of the Debt Purchase Agreement.

      _____________________________________________________________________________

      

      FGI
Finance ("FGI")

      

      We
hereby notify you that we have assigned our present and future receivables to
FGI.

      

      To the
extent that you are now indebted or may in the future become indebted to us on
an account (i.e., invoices) or a general intangible, payment thereof is to be
delivered and made payable only to FGI and not to us or any other
entity.  Payment in any other way will not constitute payment and will
not discharge your obligation.

      

      The
payments should be wired in Euro only to FGI Finance with the following
instructions

      

      Euro
Only:

      Bank: The Royal Bank of
Scotland

      Swift: 
RBOSGB2L

      IBAN Code:     
GB74RBOS16107510000470

      Beneficiary: Citizens Bank-FCA
6334

      

      Please
reference invoice numbers on all wire transmissions, advice forms, and
payments

       

      This
letter may only be revoked by a writing signed by one of FGI’s officers whose
signature may only be relied on if acknowledged before a notary
public.

      

      Please
fax a copy of this letter to FGI at +01 212 248 3404 and to us at + [●] to
verify your receipt and acceptance.

      

      Thank
you.

      Very
truly yours,

       

      American
Biltrite, Inc.                        
ASSIGNMENT
CONFIRMED:

       

      By:  ________________

      

      Title:
_______________                                                     
 By:____[Receivables
Debtor]________

      

                             Company:
_______________________

      

                                        
Title:  ___________________________                                                                                     

       

                                         Date:  ___________________________

      

      By:  ________________

      

      Title:
_______________

       

      
        
           

        

        
          -22-

          
            

          

        

        
           

        

      

      Schedule
3

      Notice
to Existing and New Account Banks

      ­­­­­­­­­­_______________________________________________________________________________

      

      Form of
notice to be served on completion by American Biltrite, Inc. on its account
banks pursuant to clause 8(j) of the Debt Purchase Agreement.

      _____________________________________________________________________________

       

      

      To:           [●]

       

      From:       American
Biltrite Inc, Ideal Tape Division Belgium 

       

          Faunus Group
International Inc

       

      

       

      

       

      Dear
Sirs,

       

      

       

      Pursuant
to a pledge of receivables agreement dated [●] (the "Agreement"), American Biltrite Inc,
Ideal Tape Division Belgium, as pledgor (“ABI”) created a right of pledge with
first rank in favour of Faunus Group International Inc, as
pledgee  (“FGI”) and any of its successors and assigns over any and
all of its claims, present and future, actual or contingent, against your
institution in connection with the balance from time to time, and as the case
may be the final closing balance, of the bank accounts opened in the name of
ABI  with your institution, bearing the account numbers [●],[●] and
[●] (the ”Pledged
Accounts”).

       

      ABI
shall remain free to operate the Pledged Accounts, and in particular to withdraw
or transfer any funds from such account, for as long as you have not been
notified to the contrary by FGI or its duly authorised agent.

       

      Should
you ever receive notice from FGI or its duly authorised agent that no funds may
be withdrawn or transferred from the Pledged Accounts by ABI, you are hereby
irrevocably authorised to comply with this request and to act only in accordance
with any further instructions from FGI or its duly authorised
agent.

       

      It is a
requirement of the Agreement that ABI obtains your agreement in writing, for the
benefit of FGI, that you waive any right of set-off or pledge and the benefit of
any "unicity of account" or similar provision in respect of the Pledged
Accounts.

       

      

       

      
        
           

        

        
          -23-

          
            

          

        

        
           

        

      

      Please
acknowledge receipt of this notice and confirm your agreement thereto by signing
and returning the duplicate of this letter attached hereto to the
undersigned.

       

      Yours
faithfully,

       

      [date]

       

      AMERICAN
BILTRITE INC, IDEAL TAPE DIVISION BELGIUM

       

      
        	
                 

                __________________________

                Name:

                Title:

              	
                 

                __________________________

                Name:

                Title:

              

      

      

       

      FAUNUS
GROUP INTERNATIONAL INC

       

      
        	
                 

                __________________________

                Name:

                Title:

              	
                 

                _________________________

                Name:

                Title:

              

      

      

       

      We
acknowledge receipt of the above notice. We hereby agree, for the benefit of
Faunus Group International Inc and its successors and assigns to waive any right
of set-off or pledge and the benefit of any "unicity of account" or similar
provision in respect of the above mentioned Pledged Accounts. Should we ever
receive notice from Faunus Group International Inc or its duly authorised agent
that no funds may be withdrawn or transferred from the Pledged Accounts by ABI,
we will comply with this request and act only in accordance with any further
instructions from  Faunus Group International Inc or its duly
authorised agent

       

      Brussels,
___ [●]

       

      [BANK]

       

      
        	
                 

                __________________________

                Name:

                Title:

              	
                 

                _________________________

                Name:

                Title:

              

      

      

       

      
        
           

        

        
          -24-

          
            

          

        

        
           

        

      

      EXECUTION
PAGE

       

      OF DEBT
PURCHASE AGREEMENT

       

      DATED
June 30th   2009

       

      

       

      

       

      IN
WITNESS WHEREOF, the parties have
executed this Agreement on
the date first written by their duly authorized representatives in two original
copies of the same tenor (each page initialled), of which one original copy
shall be delivered to
each of the Parties hereto

       

      

      By AMERICAN BILTRITE
INC.

      

      By:             /s/ Richard G. Marcus   

       

          Printed
name of
signer:             Richard G. Marcus        

       

      Title:           President         

       

      

       

      

      

      

      

      By FAUNUS GROUP
INTERNATIONAL, INC.

       

      By:             /s/ David DiPiero      

       

          Printed
name of
signer:            David DiPiero            

       

      Title:          President            

       

      

      
        
           

        

        
          -25-

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