Document:

Exhibit 10.1

Exhibit 10.1

BIBBY FINANCIAL SERVICES

RECOURSE INVOICE DISCOUNTING

AGREEMENT

MADE WITH SIGNATURE INDUSTRIES

LIMITED

 

 

 

BIBBY FINANCIAL SERVICES

	A.	 	PARTIES

This Agreement is made between:

	 	(1)	 	Bibby Invoice Discounting Limited whose registered office is at 105 Duke
Street, Liverpool L1 5JQ (registered number 4105467) (“we”/“us”); and

	 
	 	(2)	 	the client identified in the
Client Particulars (“you”).

	B.	 	INTRODUCTION

	 	1.	 	This Agreement is a recourse invoice discounting agreement and sets out the
terms upon which we will purchase your Debts. Until we tell you to the contrary:

	 	1.1	 	you will act as our agent to collect payment of Debts due from
your Customers;

	 
	 	1.2	 	you will not be required to comply with condition 8.2.1 of the
Standard Conditions; and

	 
	 	1.3	 	conditions 8.6 and 8.7 of the Standard Conditions will apply to
this Agreement.

	 	2.	 	You agree to sell and we agree to purchase with full title guarantee on the
terms of this Agreement all the Debts referred to in clause 4 of the Particulars.

	 
	 	3.	 	“This Agreement” shall comprise this document, the Standard Conditions for the
Purchase of Debts (Edition A/2004) and any schedule or other document expressly
incorporated into this Agreement and any variation or extension agreed in accordance
with condition 16 of the Standard Conditions. Any terms set out in a Letter of Offer
and any other statements or representations by us or implied terms are excluded.

	 
	 	4.	 	This Agreement is dated on the date on which the last of us signs it.

 

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	C.	 	PARTICULARS

	 	1.	 	The Commencement Date is (condition 2.1).

	 
	 	2.	 	The Minimum Period of this Agreement is 18 months from the first day of the
month following the Commencement Date (condition 2.1).

	 
	 	3.	 	The Minimum Notice Period is 6 months (condition 2.1).

	 
	 	4.	 	This Agreement shall apply to the following categories of Debts: All Debts
(condition 3.1).

	 
	 	5.	 	The Approved Funding Percentage is 80% (Domestic), 70% (Export) (definition of
“Available Funds” in condition 21).

	 
	 	6.	 	The Customer Concentration Percentage is 10% or £100,000 of approved sales
ledger for prepayment purposes subject to credit worthiness of the debtor concerned,
unless specifically agreed (condition 6.8.3).

	 
	 	7.	 	The Retrospective Fee is 0.25% (Domestic), 0.3% (Export) (condition 7.1.1).

	 
	 	8.	 	The Fee is 0.25% (Domestic), 0.3% (Export) (condition 7.1.2).

	 
	 	9.	 	The Refactoring Fee is 0.5% of the Notified Value of each Debt which is
Outstanding 90 days after the end of the month (condition 7.1.3).

	 
	 	10.	 	The Minimum Fees shall be £60,000 a year (condition 7.3).

	 
	 	11.	 	The Factor’s Discount is 2.00% above the higher of Barclays Bank Plc base rate
or 3 month LIBOR subject to a minimum of 3.5% (conditions 7.9 and 7.10).

	 
	 	12.	 	The Funding Limit is £2,500,000, increasing to £3,500,000 (See condition No.
47) (condition 6.8.2).

	 
	 	13.	 	The Credit Note Limit is £1,000 excluding Value Added Tax (condition 10.1.4).

	 
	 	14.	 	The Approval Period is 90 days from the date of the relevant invoice (condition
5.7).

 

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	D.	 	SPECIAL CONDITIONS

Audit

1. In our absolute discretion, we may take steps to verify the Notified Debts at any time to
satisfy ourselves of the validity of such Debts.

2. In our absolute discretion, we may undertake audits at any time to satisfy ourselves of
the viability of your business. If we are required to undertake more than 4 audits a year,
we will charge you £500 plus VAT, or such other sum as we shall tell you in writing from
time to time, for each additional audit.

Documents

3. If applicable, a signed proof of delivery or collection must be obtained for each Debt
and the original of such document must be provided to us upon our request.

4. If applicable, timesheets signed by your Customers must be obtained for each Debt and the
originals of such documents must be provided to us on request.

5. You will provide us with a copy of your monthly management accounts within 4 weeks of
each month end, commencing with the month end following initial payment.

6. You will retain Customer remittance advices and make these available to us upon request.
Where a remittance advice is not received, you will retain a copy of the relevant cheque.

Fees

7. You will pay to us a legal documentation fee of £15,000 plus VAT to cover the cost of
preparing, executing and, if appropriate, registering such documentation. Such
documentation fee will be debited to your Client Account at any time after the Commencement
Date.

 

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Notification of Debts

8. Upon Notification of a Debt to us, you will immediately send to us:

	 	•	 	your day book listings

9. Until we advise you in writing to the contrary you are not required to Notify to us the
following Debts, which will be designated as Non-notifiable Debts: All associated companies.

10. Unless we agree in writing, we will not make any Prepayment against:

	 	•	 	invoices evidencing Debts for stage or progress payments

	 
	 	•	 	Debts arising under a Contract of Sale which contains terms entitling the
Customer to return the goods

	 
	 	•	 	Debts owed by non-business Customers

	 
	 	•	 	Debts owed by an Associate

	 
	 	•	 	Debts payable on a pro forma basis or by cash on delivery

	 
	 	•	 	Debts arising from the sale of capital assets

	 
	 	•	 	Debts arising from rental or leasing agreements

	 
	 	•	 	Debts owed by a Customer who also supplies goods or services to you

but we agree that you do not need to notify us in relation to such Debts unless we instruct
you to do so.

11. You will not enter into Contracts of Sale containing terms providing for payment of the
Debt on a pro forma basis or cash on delivery with any Customer to whom you have previously
extended credit without our prior written consent but we agree that you do not need to
notify us in relation to such Debts unless we instruct you to do so.

Computerised Services

12. We will provide you with our Computerised Services on the terms set out in condition 12
of the Standard Conditions.

 

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Export Debts

13. The Purchase Price of Debts payable in Approved Currencies shall be payable in Sterling,
Dollars or Euros.

14. Where we agree to pay you the Purchase Price of Export Debts in a currency other than
Sterling:

14.1 condition 4.2 of the Standard Conditions will not apply;

14.2 any payment to you will be made in the currency of the Debt unless we tell you
otherwise;

14.3 the Retrospective Fee, Fee and Refactoring Fee (if payable as a percentage of the
Notified Value of the Debt) and Factor’s Discount will be charged to you in the currency of
the Debt; and

14.4 we shall maintain separate Client, Sales Ledger Control and Current Accounts to record
the sale and purchase of such Export Debts.

14.5 We may appoint, at our own expense, Bibby Factors International Limited as our agent
for the purpose of:

14.5.1 managing the administration of your Export Debts sales ledger;

14.5.2 maintaining your Client Account, Current Account and Sales Ledger Control Account
relating to Export Debts; and

14.5.3 paying you the Purchase Price of Export Debts and Prepayments on account of the
Purchase Price of Export Debts;

15. The following currencies will also be “Approved Currencies”: GBP, USD, EUR.

16. The following countries are excluded from the definition of “Accepted Countries”: Those
not covered by credit insurance.

17. We may at any time give you notice in writing that a currency will no longer be an
Approved Currency or a country will no longer be an Accepted Country. Such notice will not
affect Export Debts Notified to us prior to such notice.

 

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18. We confirm that Customers domiciled in Accepted Countries may make payment of Export
Debts to us in Approved Currencies.

19. Any payment made by a Customer in or towards payment of an Export Debt shall not be
treated as a Collection until we have received value for such payment in our bank account.

20. For the purpose of calculating the amount of any Export Debt owed by a Customer or any
amount that you may owe us that is expressed in a foreign currency, we may convert such
amount into Sterling at the spot selling rate of exchange for the relevant currency quoted
by our bankers on the date such amount is due to us.

21. In relation to each Export Debt included in an Invoice Schedule, in addition to the
warranties set out in condition 11.1 of the Standard Conditions, you will additionally give
all the following warranties:

21.1 the Customer carries on business in an Accepted Country and the invoice(s) evidencing
the Export Debt are addressed to the Customer at such place of business;

21.2 to the best of your knowledge the Customer has all authorities, licences and permits
necessary for him lawfully to purchase and import the goods into the Accepted Country and to
pay for them by the due date(s) for payment;

21.3 to the best of your knowledge the exportation of the goods to the Accepted Country does
not breach the laws of the UK or any other country;

21.4 the Contract of Sale provides for payment in Sterling or an Approved Currency and the
invoice(s) evidencing the Export Debt are expressed in the relevant currency;

21.5 except where provided to the contrary in this Agreement, the invoice(s) evidencing the
Export Debt will bear a notice of assignment of the Export Debt to us in such format as we
shall tell you.

 

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Conditions to be satisfied prior to our making Prepayments

22. We will require regular monthly management accounts — to include profit and loss,
balance sheet and a rolling 3 month cash flow. Breakdown of any material delinquent debtors
 — balances in excess of £100,000 — detailing what the issue is and what action is being
taken to resolve.

23. We will require sight and satisfaction with K10 and Q10 reports on the group as
published.

24. We will hold a fixed reserve of 0.25% of total legder of £50,000 (whichever is the
greater) in respect of any liability pertaining to warranty claims should the business cease
to trade.

25. We will only fund to insured limits — expection being that we will fund any uninsured
customer to a level of 5% of the total ledger subject to an overall non insured funding cap
of 10% of the total ledger.

26. Debt turn covenant of 60 days maximum (UK), 80 days (Export).

27. Dilution covenant not to exceed 5% maximum. Prepayment to be reduced by 2% for every 1%
breach.

28. We are to be notified of any deviation in customer payment terms or value of early
settlement discounts.

29. We are to be notified of any new contracts entered with customers prior to funding.

30. Contra accounts positions will be reserved for.

31. Chemring balance to be non notified, due to the dispute and the contra position.

32. Invoices should only be assigned following completion of work and supported with an
individual purchase order. Client to advise us if it is not the case and we will reserve.

33. Cash and pro-forma invoices to be reserved for.

34. Sales relating to the hire of equipment to be reserved for.

 

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35. Invoices to the United States Air Force to be reserved for.

36. Invoices subject to deposits, staged payments and retentions to be reserved for.

37. Invoices to MOD to be reserved for.

38. Sales to non approved countries to be non notified.

39. Sales to associate companies — Keyswitch Varley Limited and Digital Angel Corporation to
be non notified.

40. We will require that any repatriation of surplus cash to the US parent or associated
businesses to be preceded by either giving us 90 days notice or receiving our express
approval — to be based on our understanding of cash adequacy at the time provided, however,
that notice or consent is not required to make payments of principal and/or interest
pursuant to the tems of that revolving intercompany loan agreement dated [ ] April 2009
between Destron Fearing Corporation and Signature Industries Limited (“the Destron Fearing
Loan”) so long as such payments are within the limits set forth in the cash flow projection
provided by you to us and such sums shall not exceed on a 3 month rolling basis more than
£146,000 plus interest.

Before we make any payments to you:

41. you will provide us with:

41.1 a corporate guarantee and indemnity in respect of your obligations to us executed by
Digital Angel Corporation and Keyswitch Varley Limited;

41.2 a warranty and indemnity in respect of your obligations to us executed by Brian
Clayton, John Joseph Grant and Trevor Gerald Gage;

41.3 a copy of your standard terms and conditions of business;

41.4 six copies of your standard headed stationery;

42. you will write to all Customers who pay you by BACS, CHAPS or any other form of
electronic transfer using wording which we will provide to you, giving them
our bank account details and telling them to make payment of Debts to such account;

 

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43. we will require:

43.1 proof of the identity and current residential addresses of Brain Clayton and John
Joseph Grant and Trevor Gerald Gage by each of them providing to us the originals of a
current passport or driver’s licence (provided it contains a photograph of the licence
holder) and a recent telephone and/or electricity bill showing their current residential
addresses;

44. we will verify to our satisfaction the validity of your Outstanding Debts;

45. we will require to verify the take on ledger to a level sufficient to us to provide
comfort;

46. we will take on full ledger and run on a shadow basis. We will reserve/disapprove for
areas we do not want to fund;

47. we will commence with a funding limit of £2,500,000 and subsequent to continued
satisfactory operation of the facility and financial progress of the business we will
increase funding in 2 further tranches of £500,000 based upon cash needs of the business and
ability to generate the required level of funding;

48. there will be facility fees of £5,000 per increase, payable immediately the facility is
increased;

49. we will require sight and satisfaction of all existing contracts with customers;

50. we will require sight and satifaction with Chemring Agreement/documentation to evidence
resolution;

51. the release of RBS security;

52. we will requie a detailed reference from RBS;

53. we will register a Debenture in our standard formart;

 

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54. we are to stand as first charge holder over all assets of the business including WIP and
stock;

55. we will require warranties from all operational Directors;

56. we will require cross company guarantee and indemnities will be required from associated
entities and the parent company;

57. we will require a loan postponement from the parent company and a negative pledge that
such loan will not be withdrawn without our consent but we shall allow scheduled repayments
in respect of the loan and the Destron Fearing Loan but such sums shall not exceed on a 3
month rolling basis more than £146,000 plus interest;

58. credit insurance policy to be assigned to us;

59. we will require sight and satisfacton of the current insurance policy and details of
cover provided;

60. customers to be advised of the Bibby Invoice Discounting trust account details;

61. we will require confirmation that supply contracts are suitable for the facility to be
offered;

62. Chemring debt to be excluded from funding until dispute is resolved;

63. other creditor figure in balance sheet to be explained satisfactorily. Should the
explanation require further investigation we reserve the right, as part of a pre-fund review
to appoint 3rd party accountants to advise (all costs to be borne by you);

64. US parental company guarantee and loan postponement to be drawn up using our US lawyers
(all costs to be borne by you).

65. Each party agrees that any third party broker or arranger fees that may be due as a
result of entering into this Agreement shall be on each party’s acount and neither party
shall be responsible for any such fees agreed to by the other.

 

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	E.	 	CLIENT PARTICULARS

	 	1.	 	Your payment terms are:

	 
	 	 	 	30 — 60 days.

	 
	 	2.	 	The nature of your business is:

	 
	 	 	 	Design and manufacture of Search & Research Radios and Beacons, Alarms Sounders &
Strobes and the sale of Radio Communication Equipment.

	 
	 	3.	 	Your full name(s) is/are:

	 
	 	 	 	Signature Industries Limited.

	 
	 	4.	 	Your trading style is:

	 
	 	 	 	Signature Industries Limited.

	 
	 	5.	 	Your principal place of business is:

	 
	 	 	 	Tom Cribb Road, Thamesmead, London, SE28 0BH.

	 
	 	6.	 	Your residential address(es) is/are:

	 
	 	 	 	Brain Clayton, 10 Pishiobury Drive, Sawbridgeworth, Herts, CM21 0AE.

John Joseph Grant, 11 Monikie Gardens, Bishopbriggs, Glasgow, G64 1XY.

Trevor Gerald Gage, 2 Quilberry Drive, Queensborough Lane Great, Braintree, Essex,
CM77 7GG.

	 
	 	7.	 	Your registered number is:

	 
	 	 	 	02800561.

 

12Exhibit 10.2

Exhibit 10.2

BIBBY FINANCIAL SERVICES

STANDARD CONDITIONS FOR

THE PURCHASE OF DEBTS

(EDITION A/2004) INCORPORATED
INTO THE CONFIDENTIAL
 INVOICE DISCOUNTING 

AGREEMENT MADE WITH
SIGNATURE INDUSTRIES LIMITED

 

 

CONTENTS

	 	 	 	 	 
	1. Introduction
	 	 	3	 
	 
	 	 	 	 
	2. Duration of this Agreement
	 	 	3	 
	 
	 	 	 	 
	3. Notification and ownership of Debts
	 	 	3	 
	 
	 	 	 	 
	4. Purchase Price of Debts
	 	 	4	 
	 
	 	 	 	 
	5. Credit Limits
	 	 	5	 
	 
	 	 	 	 
	6. Your accounts
	 	 	7	 
	 
	 	 	 	 
	7. Factor’s Discount, Fees and other charges
	 	 	10	 
	 
	 	 	 	 
	8. Collection of Debts
	 	 	14	 
	 
	 	 	 	 
	9. Provision of information and documentation
	 	 	18	 
	 
	 	 	 	 
	10. Your undertakings
	 	 	19	 
	 
	 	 	 	 
	11. Your warranties
	 	 	22	 
	 
	 	 	 	 
	12. Computerised Services
	 	 	24	 
	 
	 	 	 	 
	13. Communications with third parties
	 	 	28	 
	 
	 	 	 	 
	14. Unlimited partnerships and sole traders
	 	 	28	 
	 
	 	 	 	 
	15. Termination of this Agreement
	 	 	33	 
	 
	 	 	 	 
	16. Variation, assignment and novation of this Agreement
	 	 	37	 
	 
	 	 	 	 
	17. Liability and waivers
	 	 	37	 
	 
	 	 	 	 
	18. Power of attorney
	 	 	38	 
	 
	 	 	 	 
	19. Service of notices
	 	 	39	 
	 
	 	 	 	 
	20. Governing law
	 	 	40	 
	 
	 	 	 	 
	21. Definitions
	 	 	40	 
	 
	 	 	 	 

 

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	1.	 	Introduction

	 	1.1	 	In this Agreement words defined in condition 21 shall have the meanings set out
in that condition.

	 	1.2	 	Terms set out in any Special Conditions or Schedule to this Agreement shall
prevail over any inconsistent term in these Standard Conditions.

	 	1.3	 	References to numbered conditions are to conditions in these Standard
Conditions.

	2.	 	Duration of this Agreement

	 	2.1	 	This Agreement shall begin on the Commencement Date and continue for the
Minimum Period. It shall endure thereafter until terminated by either of us giving to
the other notice in writing of at least the Minimum Notice Period to expire on the last
day of a calendar month. Such notice may only be given after the expiry of the Minimum
Period.

	 	2.2	 	We shall have the right at any time following a Termination Event to terminate
this Agreement by written notice to you.

	3.	 	Notification and ownership of Debts

	 	3.1	 	This Agreement shall apply to the categories of Debts referred to in clause 4
of the Particulars and such other categories of Debts as we may agree in writing with
you.

	 	3.2	 	By this Agreement you assign to us with full title guarantee all Debts together
with their Related Rights which are Outstanding on the Commencement Date or which come
into existence after the Commencement Date until this Agreement is terminated. The
ownership of each Initial Debt and its Related Rights shall vest in us on the
Commencement Date. The ownership of each Debt coming into existence after the
Commencement Date and its Related Rights shall vest in us automatically upon the Debt
coming into existence.

 

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	 	3.3	 	Initial Debts shall be Notified to us on an Invoice Schedule on the
Commencement Date. Debts coming into existence after the Commencement
Date shall be Notified to us on Invoice Schedules within 2 days of the issue of an
invoice evidencing the Debt to your Customer or within such other period as we may
stipulate in writing.

	 	3.4	 	The Notifications referred to in condition 3.3 will constitute specific
assignments by you to us of each Debt and shall be in addition to the general
assignment of all Debts effected by condition 3.2 so that, at our option, we can obtain
a legal assignment of each Debt.

	 	3.5	 	If any Debt shall fail to vest in us, you will hold the Debt and its Related
Rights on trust for us.

	 	3.6	 	Unless stated in the Special Conditions or we tell you in writing to the
contrary, you will send to us with each Invoice Schedule a copy of each invoice and
such other documents which evidence the complete performance of the Contract of Sale as
we require.

	 	3.7	 	Unless we tell you in writing, your obligation to Notify Debts under condition
3.3 does not apply to Non-notifiable Debts.

	 	3.8	 	We may require you at your expense to execute a written assignment to us of a
Debt and its Related Rights. You will pay all stamp duty (if any) on such assignment
or on any reassignment of a Debt by us to you.

	 	3.9	 	Any credit note will be raised immediately when due and Notified to us on a
Credit Note Schedule together with, if we tell you, a copy of the credit note within 2
days of its issue.

	4.	 	Purchase Price of Debts

	 	4.1	 	The Purchase Price of each Debt vesting in us shall be the amount paid to us in
or towards discharge of the Debt less:

	 	4.1.1	 	any Allowance due to or taken by the Customer; and

	 	4.1.2	 	Factor’s Discount, Fees and any other amounts due from you to
us under this Agreement or any other agreement.

 

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	 	4.2	 	Unless otherwise agreed by us, the Purchase Price shall be payable in Sterling.
If a Debt is expressed in a currency other than Sterling:

	 	4.2.1	 	we may provisionally calculate the Purchase Price at the rate
of exchange quoted by our bankers for them to purchase the relevant currency
on the date we credit the Debt to the Sales Ledger Control Account;

	 	4.2.2	 	when converting any Collection to Sterling we may calculate
the Purchase Price at the rate of exchange quoted by our bankers for them to
purchase the relevant currency on the date we debit the Collection to the Sales
Ledger Control Account; and

	 	4.2.3	 	you will indemnify us for any exchange rate losses which we
suffer and the amount of such losses shall be debited to your Client and Sales
Ledger Control Accounts.

	5.	 	Credit Limits

	 	5.1	 	We may establish a Credit Limit for each of your Customers for the purpose of
calculating the amount of Prepayments that may be made to you. Debts coming into
existence after the establishment of a Credit Limit may be Approved Debts to the extent
that they are within such Credit Limit. Debts in excess of a Credit Limit and Debts
for which no Credit Limit has been established shall be Disapproved Debts.

	 	5.2	 	If we decide not to establish Credit Limits for any of your Customers, in our
sole discretion we may treat some or all Debts which are Disapproved Debts as Approved
Debts.

	 	5.3	 	If the total of Outstanding Debts due from a Customer is in excess of any
Credit Limit for that Customer, the Debts shall be treated as Approved or Disapproved
in the order in which the relevant invoices are dated. Upon payment of an Approved
Debt, Disapproved Debts which then come within the Credit Limit may become Approved
Debts.

 

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	 	5.4	 	We may establish, increase, reduce or cancel a Credit Limit entirely at our
discretion and shall not be obliged to give you any reason for our decision. We shall
advise you of Credit Limits and changes to them in such manner as we shall decide.

	 	5.5	 	Your application for a Credit Limit or any variation to a Credit Limit may be
made verbally or in writing and you must provide all information about the Customer
which we may require together with an indication of the Credit Limit you want. Such
information must be true and accurate.

	 	5.6	 	We are not a credit reference agency and the establishment of a Credit Limit is
not to be treated as an indication of the creditworthiness of a Customer. You will not
tell anyone, including your Customers, the amount or absence of any Credit Limit.

	 	5.7	 	An Approved Debt will immediately and without notice become a Disapproved Debt:

	 	5.7.1	 	upon expiry of the Approval Period;

	 	5.7.2	 	upon termination of this Agreement, at which time all Credit
Limits will automatically be reduced to zero; or

	 	5.7.3	 	upon the occurrence of a Termination Event (whether or not we
exercise our right to terminate this Agreement).

	 	5.8	 	We may designate all or part of an Approved Debt as a Disapproved Debt
immediately and without notice if you are in breach of any undertaking or warranty
relating to the Debt or the Debt is disputed by your Customer.

	 	5.9	 	If an Approved Debt becomes a Disapproved Debt, you will forthwith repay any
Prepayment made in respect of such Debt.

	 	5.10	 	At any time we may treat as a Disapproved Debt such percentage or amount of an
Approved Debt as in our absolute discretion we shall decide to cover the risk of
non-payment of the full amount of any Approved Debt.

 

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	 	5.11	 	In so far as a Debt in excess of a Credit Limit or a Debt for which no Credit
Limit has been established is designated as an Approved Debt on any report or account
provided by us to you, including (without limitation) on a Customer Aged Debt Analysis,
for the purpose of calculating the Available Funds, such Debt will only be an Approved
Debt to the extent that it is within the relevant Credit Limit and does not exceed the
Customer Concentration Percentage.

	 	5.12	 	We may exercise our right of Recourse or reassign a Debt to you at any time
after any of the events specified in conditions 5.7 and 5.8. Recourse shall be
effected by your paying to us any Prepayment paid in respect of the Debt. Reassignment
shall be effected by debiting the Notified Value of the Debt to your Client and Sales
Ledger Control Accounts.

	6.	 	Your accounts

	 	6.1	 	We shall maintain such accounts as we consider necessary to record details of
the Debts purchased by us, amounts received from you or your Customers, the Available
Funds, the Factor’s Discount, Fees and other sums due to or from us including a Client
Account, a Current Account and a Sales Ledger Control Account.

	 	6.2	 	The anticipated Purchase Price of all Debts will be credited to your Sales
Ledger Control Account. The amount credited may be equivalent to the Notified Value
before deduction of the items referred to in conditions 4.1.1 and 4.1.2 and may be
adjusted as necessary at any time.

	 	6.3	 	We shall debit to your Sales Ledger Control Account:

	 	6.3.1	 	the Notified amount of any credit note issued by you;

	 
	 	6.3.2	 	the amount of any Allowance due to or taken by a Customer;

	 	6.3.3	 	any adjustment to the value of a Debt to which we consider the
Customer is entitled; and

	 	6.3.4	 	any Collection.

 

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	 	6.4	 	The net amount of all credits and debits made to your Sales Ledger Control
Account under conditions 6.2 and 6.3, excluding Collections, shall be applied to your
Client Account.

	 	6.5	 	The amount of all payments made by us to you and all Factor’s Discount, Fees
and other charges payable by you under this Agreement shall be debited to your Client
Account.

	 	6.6	 	The balance on your Current Account at any time will be calculated by deducting
the balance on your Client Account from the balance on your Sales Ledger Control
Account.

	 	6.7	 	You may request payments from us in or towards the Purchase Price of Debts.
Subject to the terms of this Agreement and the amount of your Available Funds and the
Funding Limit, we may make a:

	 	6.7.1	 	Prepayment to you in respect of all Outstanding Approved Debts
on the Working Day following the receipt of your Invoice Schedule relating to
such Debts;

	 	6.7.2	 	payment to you of the amount or balance of the Purchase Price
of Debts equal to any Collection less any Prepayment made in respect of such
Debts on the Working Day following receipt of such Collection.

	 	6.8	 	We shall not be obliged to make any payments to you:

	 	6.8.1	 	in excess of the Available Funds;

	 	6.8.2	 	if, having made such payment, the balance on your Current
Account would exceed the Funding Limit;

	 	6.8.3	 	against the Outstanding Approved Debts of a Customer to the
extent that such Debts are in excess of the Customer Concentration Percentage;

	 	6.8.4	 	if you are Insolvent; or

	 	6.8.5	 	after the occurrence of a Termination Event.

 

8

 

	 	6.9	 	In our absolute discretion, we may make Prepayments to you in excess of the
Available Funds or Funding Limit on such terms and subject to the payment of such
additional charges as we may specify.

	 	6.10	 	You will repay to us on demand any amount by which:

	 	6.10.1	 	the balance on your Current Account exceeds the value of Approved Debts after
applying the Approved Funding Percentage and Customer Concentration Percentage;
or

	 	6.10.2	 	any Prepayment exceeds the relevant Purchase Price.

	 	6.11	 	Unless otherwise agreed by us, all payments by us to you shall be made to your
account through the Bankers Automated Clearing System or Clearing Houses Automated
Payment System, except payments in Approved Currencies which shall be made to you
through the Society for Worldwide Interbank Telecommunication system.

	 	6.12	 	No interest shall be payable by us to you in respect of credit balances on your
Current Account.

	 	6.13	 	We shall have the right at any time to debit to your Client Account all amounts
owing by you to us, whether under this Agreement or any other agreement or on any other
account and whether payable presently, prospectively or contingently, or by reason of
an assignment to us, and/or to set off such amounts against sums due from us to you.
In our absolute discretion, we may make a reasonable estimate of an amount payable
where it cannot be determined at the relevant time. All such amounts shall be combined
into a single account. Any debit balance shall be immediately payable to us and any
credit balance may be payable to you.

	 	6.14	 	We may at any time debit to your Client Account the amount of any liability
owed by you to any Bibby Group Company. We are authorised by you to guarantee payment
of such liability to such company and you agree to indemnify us against all sums paid
under such guarantee.

 

9

 

	 	6.15	 	We shall send you statements of the Sales Ledger Control Account and Client
Account at such intervals as we shall decide and a Client Statement at the end of each
month or we shall provide you with access to such Accounts through our Computerised
Services. Such Accounts shall be treated as correct and binding upon you except for
obvious errors or those of which you tell us within 15 days of the date of our sending
such Accounts to you or of their publication though our Computerised Services.

	 	6.16	 	In any proceedings, you agree that any account maintained by us and certified
by our company secretary or a director of ours as to the balance on such account or any
loss or damage suffered by us shall be conclusive evidence of the amount so certified
in the absence of obvious error or error in law.

	 	6.17	 	All payments to be made by you under this Agreement shall be made immediately
without deduction or set off. If any deduction is required by law, you will:

	 	6.17.1	 	deduct the minimum amount you are required to deduct;

	 	6.17.2	 	promptly account to the relevant authority for such amount and deliver to us
on demand such documents as we may reasonably request in respect of that
payment; and

	 	6.17.3	 	pay to us such additional amount as shall ensure that we shall receive the
full amount payable under this Agreement as if no deduction had been made.

	7.	 	Factor’s Discount, Fees and other charges

	 	7.1	 	You will pay to us:

	 	7.1.1	 	the Retrospective Fee, which we shall debit to your Client
Account at any time on or after the Commencement Date;

	 	7.1.2	 	the Fee, which we shall debit to your Client Account either at
the percentage rate shown in the Particulars on receipt of each Invoice
Schedule or monthly on the first Working Day of each month commencing with the month following the Commencement Date at a rate
equivalent to one-twelfth of the annual rate shown in the Particulars (as
appropriate);

 

10

 

	 	7.1.3	 	the Refactoring Fee, which we shall debit to your Client
Account on or at any time after the first Working Day of the month following
the month during which the Refactoring Fee accrues;

	 	7.1.4	 	all Disbursements, which we shall debit to your Client Account
at the time the relevant expense is incurred or payable.

	 	7.2	 	The Fee and Retrospective Fee cover:

	 	7.2.1	 	a licence to use our Computerised Services (if we have agreed
to provide them to you);

	 	7.2.2	 	the provision of statements of your Sales Ledger Control,
Client and Current Accounts and other reports;

	 	7.2.3	 	establishing and monitoring Credit Limits and Customer Limits
(Non-recourse facilities only); and (in the case of factoring, but not invoice
discounting, agreements)

	 	7.2.4	 	the management of your sales ledger; and

	 	7.2.5	 	actions taken by us to collect Debts.

	 	7.3	 	If the total of the Fees (excluding the Retrospective and Refactoring Fees)
debited to your Client Account in the period shown in clause 10 of the Particulars
(starting from the first day of the month following the Commencement Date) is less than
the Minimum Fees for such period, you will pay to us the amount of such deficit. If we
anticipate that there will be a deficit in any subsequent period, we may debit your
Client Account with the estimated amount of such deficit.

	 	7.4	 	If a Debt is expressed in a currency other than Sterling but we have agreed
with you to pay the Purchase Price of each Debt vesting in us in Sterling, the
Retrospective Fee, Fee and Refactoring Fee (if payable as a percentage of the Notified Value of the Debt) shall be converted to the Sterling equivalent of the
Debt calculated at the rate of exchange quoted by our bankers for them to purchase
the relevant currency on the date we credit the Debt to the Sales Ledger Control
Account.

 

11

 

	 	7.5	 	If this Agreement ends for any reason before the expiry of the Minimum Period
or without you giving us notice of at least the Minimum Notice Period or if we exercise
any of our rights under condition 15.3 following a Termination Event, you will pay to
us the greater of either:

	 	7.5.1	 	a sum equivalent to the balance of the Minimum Fees (after
deduction of the Fees already debited to your Client Account during the
relevant period) which would have been payable had this Agreement continued
from the date of termination or the occurrence of the Termination Event (as
appropriate) for, as appropriate, the remainder of the Minimum Period and the
Minimum Notice Period; or

	 	7.5.2	 	a sum equivalent to the Fees which would have accrued had this
Agreement continued from the date of termination or the occurrence of the
Termination Event (as appropriate) for, as appropriate, the remainder of the
Minimum Period and the Minimum Notice Period on the assumption that such Fees
would have accrued proportionally at a rate equivalent to the monthly average
of the Fees charged to you during the six months immediately preceding the
ending of this Agreement or the occurrence of the Termination Event (as
appropriate).

	 	7.6	 	You will not be entitled to any refund of the Retrospective Fee, Fee or
Refactoring Fee upon termination of this Agreement, the Recourse or reassignment of a
Debt or the issue of any credit note.

	 	7.7	 	If we agree in writing that this Agreement may end without you giving us the
full period of notice to which we are entitled, you will pay to us such sum as we may
specify as consideration for our agreement to waive our entitlement to receive such
notice.

 

12

 

	 	7.8	 	You will pay to us an arrangement fee for any variation of this Agreement or
any additional service or facility requested by you, including our processing of
Invoice Schedules or Collections so that we may make payments to you the same day as
the receipt of such items, the making of payments to you in excess of the Available
Funds or Funding Limit and the provision of additional reports, our charges for which
will be provided to you from time to time.

	 	7.9	 	You will indemnify us against:

	 	7.9.1	 	all costs and expenses payable by us as a result of appointing
accountants, lawyers, other professional advisers or debt collection agencies
to:

	 	7.9.1.1	 	enforce this Agreement;

	 
	 	7.9.1.2	 	resolve disputes with Customers; and

	 
	 	7.9.1.3	 	issue proceedings to collect Debts;

	 	7.9.2	 	all costs and expenses payable to any Customer or third party
in any proceedings;

	 	7.9.3	 	any claim against us by a Customer;

	 	7.9.4	 	all bank charges of whatever nature for which we are liable in
respect of any Debt or Collection;

	 	7.9.5	 	any loss caused directly or indirectly by your breach of this
Agreement;

	 	7.9.6	 	any increase from time to time in the cost to us of the funds
we obtain to provide Prepayments to you under this Agreement including, without
limitation, to the discount or interest rate or other costs, charges, fees and
expenses relating to such funds (whether such Prepayments are in existence at
the time of, or made after, such increase); and

 

13

 

	 	7.9.7	 	any costs and expenses incurred by us in carrying out any of
your obligations under this Agreement or anything which we reasonably request
you to do in connection with the proper performance of this Agreement.

	 	7.10	 	The Factor’s Discount shall accrue from day to day and shall be calculated at
the rate specified in the Particulars on the balance on your Current Account from time
to time. Any amount debited to the Client Account will be treated as a Prepayment to
which the Factor’s Discount applies. The Factor’s Discount shall be debited daily to
your Client Account. Whilst we shall debit all Collections to your Sales Ledger Control
Account on the date of receipt of the relevant Collection, for the purpose of
calculating Factor’s Discount, value for Collections will only be credited to your
Sales Ledger Control Account 6 Working Days after the date of receipt of the Collection
by us or, if later, on the date we receive cleared funds in our account.

	 	7.11	 	Where applicable, Value Added Tax will be payable on all Fees and other amounts
payable by you to us under this Agreement.

	8.	 	Collection of Debts

	 	8.1	 	We shall have the sole and exclusive right of collecting and enforcing payment
of any Debt in such manner as we consider appropriate. You have no right to collect
Debts unless condition 8.6 applies or you have our written authority.

	 	8.2	 	Except where provided to the contrary in this Agreement:

	 	8.2.1	 	you will give written notice to each Customer of the
assignment of Debts to us on all invoices, statements of account and other
documents in such format and at such times as we shall tell you; and

	 	8.2.2	 	we shall be entitled to give notice to your Customers of the
assignment of Debts to us at any time and in such format as we shall in our
complete discretion determine.

 

14

 

	 	8.3	 	We shall have the right to:

	 	8.3.1	 	appropriate any Collection, credit or Allowance in or towards
the satisfaction of Approved Debts in priority to Disapproved Debts even though
the Customer may have allocated the Collection, credit or Allowance against
invoices evidencing specified Disapproved Debts;

	 	8.3.2	 	accept payment from a Customer of a sum less than the Notified
Value of the Debt in satisfaction of such Debt ;

	 	8.3.3	 	commence, conduct, defend or compromise any proceedings in
your and/or our name for the recovery of a Debt or resolve any dispute with a
Customer on such terms as we consider appropriate;

	 	8.3.4	 	make payment to a Customer of any credit balance on the
Customer’s account; and

	 	8.3.5	 	take possession of any Returned Goods and to sell them on such
terms as we shall decide. The net proceeds of sale, after deduction of all
costs and expenses incurred in securing possession of and selling the goods,
shall be treated as a Collection and applied by us in or towards payment of the
relevant Debt.

	 	8.4	 	You will be bound by our decisions even if the Purchase Price of a Debt is
reduced as a consequence.

	 	8.5	 	If requested by us, you will:

	 	8.5.1	 	fully co-operate with us to collect Debts and resolve disputes
with Customers;

	 	8.5.2	 	provide us free of charge with all evidence required by us;

	 	8.5.3	 	ensure the attendance at any hearing of all witnesses required
in connection with any proceedings; and

	 	8.5.4	 	exercise your rights under a Contract of Sale to enforce any
Related Rights.

 

15

 

	 	8.6	 	If we appoint you as our agent to collect Debts:

	 	8.6.1	 	you will act as our agent solely for the purpose of collecting
and enforcing payment of Debts and enforcing and protecting all Related Rights
relating to Debts;

	 	8.6.2	 	you undertake to act promptly and efficiently at your expense
in carrying out your duties as our agent;

	 	8.6.3	 	you will not hold yourself out as our agent for any other
purpose;

	 	8.6.4	 	you will not appoint any other person to collect payment of
Debts without our prior written consent;

	 	8.6.5	 	condition 8.2 will not apply unless we terminate your agency
under condition 8.7;

	 	8.6.6	 	you will manage the accounts of Customers, render statements
to Customers and maintain such accounts and records in respect of the Debts as
we shall from time to time stipulate and will conspicuously mark your ledgers
to show that the Debts have been assigned to us;

	 	8.6.7	 	we may open a bank account in your name and you will deliver
to the relevant bank an irrevocable mandate under which officers of ours are
appointed as the only authorised signatories. You will pay into such bank
account all payments tendered by Customers in or towards the discharge of Debts
purchased by us under this Agreement (excluding Non-notifiable Debts);

	 	8.6.8	 	no Prepayments shall be made in respect of Debts payable by
standing order or direct debit until you have provided us with satisfactory
evidence that payment under such standing order or direct debit will be made to
the bank account identified in condition 8.6.7;

	 	8.6.9	 	we may communicate with Customers in our or your name for the
purpose of verifying the existence and amount of Debts;

 

16

 

	 	8.6.10	 	you will provide us with the following documents completed to the month end
by the 12th day of the following month:

	 	8.6.10.1	 	a reconciliation of your sales ledger to your Sales Ledger Control
Account in a format specified by us;

	 	8.6.10.2	 	an open item aged Customer listing, including the Customer’s name,
address and telephone number;

	 	8.6.10.3	 	copies of all Customer statements;

	 	8.6.10.4	 	an aged creditors’ listing; and

	 	8.6.10.5	 	copies of your bank statements for all accounts maintained by you
(procuring your bankers to send such statements direct to us);

	 	8.6.11	 	you will provide us with monthly management accounts for each month by the
end of the calendar month following the month to which the accounts relate; and

	 	8.6.12	 	you will allow us to audit your sales ledger and inspect your accounting
records at your premises at such frequency and cost to you as we shall
stipulate.

	 	8.7	 	We may at any time terminate your agency to collect Debts. Upon termination of
such agency:

	 	8.7.1	 	we may ask you to comply with condition 8.2.1, if previously
you have not been required to do so;

	 	8.7.2	 	you will not hold yourself out as our agent for any purpose;

	 
	 	8.7.3	 	we shall collect all Debts or supervise their collection by a third party;

	 
	 	8.7.4	 	you will ensure that Customers pay all Debts directly to us;

	 	8.7.5	 	you will immediately deliver to us such accounts, documents
and records relating to the Outstanding Debts as we specify; and

 

17

 

	 	8.7.6	 	we shall be entitled to charge you a collection fee of 10% of
the Notified Value of all Debts Outstanding at the date of the termination
of the agency (which we may debit to your Client Account at any time after
such date) and of all Debts Notified to us after such date (which we may
debit to your Client Account at any time after each Debt is Notified). Such
collection fee is to cover the additional work we will be required to
perform to carry out the obligations you agreed to undertake under the terms
of your agency. You acknowledge that such collection fee represents a
genuine pre-estimate of the loss we are likely to sustain in consequence of
the termination of your agency to collect Debts.

	9.	 	Provision of information and documentation

	 	9.1	 	You agree to allow any representative or agent of ours at all reasonable times
to enter any premises at which you carry on business to inspect goods (including
Returned Goods) and check Contracts of Sale and all books, accounts, computer or other
records, orders, correspondence and such other documents as we may require and to copy
such documents and computer disks at your expense.

	 	9.2	 	You will supply us with a signed copy of your balance sheet and accounts and
(if you are a limited company or LLP) directors’ report for each of your accounting
reference periods either audited (if you are a limited company or LLP) or certified as
true and correct by a firm of chartered or certified accountants (if you are a
partnership or sole trader) as soon as they are available and in any event within 7
months from the end of each such accounting period.

	 	9.3	 	You will provide us with your management accounts and such other financial
reports showing your financial position and the results of your operations as we may
require for such periods and at such intervals as we may specify.

 

18

 

	10.	 	Your undertakings

	 
	 	 	You undertake, for the duration of this Agreement and until you have discharged all monies
owing to us, that:

	 	10.1	 	after Notifying a Debt to us:

	 	10.1.1	 	you will not vary the terms of the Contract of Sale, any payment terms or
settlement discounts (if any);

	 	10.1.2	 	you will promptly perform all your obligations to the Customer under the
Contract of Sale and, at our request, provide satisfactory evidence of the
complete performance of the Contract of Sale;

	 	10.1.3	 	you will owe no obligations to the Customer other than under the Contract of
Sale;

	 	10.1.4	 	you will not agree with the Customer to allow any credit against the Debt or
issue a credit note for a sum in excess of the Credit Note Limit; and

	 	10.1.5	 	you will not issue or agree with the Customer to issue any credit note
against the Debt if we have notified you that you must not do so;

	 	10.2	 	you will not agree with a Customer better payment terms or settlement discounts
(if any) than those specified in the Client Particulars without our prior written
consent;

	 	10.3	 	every Contract of Sale is subject to the law of England and Wales, provides for
payment in Sterling (unless we have agreed in writing that your Customers may make
payment of Debts in an Approved Currency) and such Contract of Sale does not include
any prohibition against the assignment of the Debt or the Contract of Sale under which
the Debt arises;

	 	10.4	 	save as provided in condition 10.5, you will not include in any Invoice
Schedule any Debt:

	 	10.4.1	 	until the relevant Contract of Sale has been completely performed;

	 	10.4.2	 	due from an Associate;

	 	10.4.3	 	owed by a Customer from whom you purchase goods or services or with whom you
have any contra accounting agreements;

 

19

 

	 	10.4.4	 	which arises from a Contract of Sale containing terms that entitle the
Customer to return the goods;

	 	10.4.5	 	which is a Non-notifiable Debt;

	 	10.4.6	 	in respect of which a payment has previously been made to you; or

	 	10.4.7	 	which arises under a Contract of Sale providing for the supply of goods in
instalments or provision of services on a periodic basis unless the Contract of
Sale is divisible and the Customer has agreed to pay for each instalment
delivery or period irrespective of the performance of your further obligations
under the Contract of Sale;

	 	10.5	 	you will Notify us separately of each Debt which:

	 	10.5.1	 	does not comply with the undertakings and warranties contained in this
Agreement providing particulars of the relevant undertakings and warranties
with which you are unable to comply;

	 	10.5.2	 	relates to a claim for interest and/or compensation payable either pursuant
to the Contract of Sale or the Late Payment of Commercial Debts (Interest) Act
1998, providing details of how the claim arises and the calculation of the
claim; or

	 	10.5.3	 	is an Export Debt or arises under a Contract of Sale providing for payment in
an Approved Currency;

	 	10.6	 	you will tell us immediately of any:

	 	10.6.1	 	breach by you of any undertaking or warranty given by you in this Agreement;

	 	10.6.2	 	change or proposed change in the Control of your business or that of any
Associate or Guarantor;

	 	10.6.3	 	Insolvency proceedings commenced against you, any Guarantor, Associate or
Customer;

 

20

 

	 	10.6.4	 	security holder enforcing its security over any part of your assets or
undertaking;

	 	10.6.5	 	material information about the creditworthiness of a Customer;

	 	10.6.6	 	dispute between you and a Customer and provide us with full particulars of
such dispute; and

	 	10.6.7	 	Returned Goods which have been delivered into your possession;

	 	10.7	 	you will not create any security, trust, lien or other interest over your
existing or future Debts without our prior written consent;

	 	10.8	 	you will not sell any of your assets except in the ordinary course of your
business, as stated in the Client Particulars, on commercial terms and for full value;

	 	10.9	 	you will not enter into any other agreement for the factoring or discounting of
Debts and you will procure that no Associate of yours enters into an agreement for the
factoring or discounting of its debts without our prior written consent;

	 	10.10	 	you will comply with any procedures which we communicate to you for the
efficient day-to-day operation of our respective obligations under this Agreement;

	 	10.11	 	you will sign all documents, including assignments of Debts or Related Rights,
and do anything we reasonably request to exercise or enforce our rights under this
Agreement;

	 	10.12	 	you are properly registered under the Data Act and will ensure that such
registration continues in force;

	 	10.13	 	you will ensure that your processing of information about your sole trader and
unlimited partnership Customers is accurate and complies with the Data Act and, in
particular, the 8 data protection principles set out in the Data Act;

 

21

 

	 	10.14	 	you will advise us immediately if you are notified of any alleged breach of
the Data Act in relation to a Customer;

	 	10.15	 	you will advise us immediately of all communications received from a Data
Subject;

	 	10.16	 	you will communicate to your sole trader and unlimited partnership Customers
that information about them will be disclosed to us and how we will use such
information and you will obtain their consent to your providing such information to us
and our processing of such information for the purposes set out in condition 14.11 in
accordance with the first and second principles set out in the Data Act;

	 	10.17	 	you will, upon receipt of any form of payment tendered in or towards the
discharge of a Debt purchased by us under this Agreement, hold such payment absolutely
in trust for us and (excluding Non-notifiable Debts unless we tell you otherwise in
writing) you will:

	 	10.17.1	 	immediately deliver to us the identical cash, cheque, bill of exchange or
other remittance or pay it into such bank account as we may stipulate; and

	 	10.17.2	 	keep it separate from your other money and will not, under any
circumstances, pay it into your own account or the account of any other person.

	11.	 	Your warranties

	 	11.1	 	In relation to each Debt included in an Invoice Schedule, by delivering the
Invoice Schedule you will give all the following warranties to us:

	 	11.1.1	 	the Debt arises under a genuine Contract of Sale made with one of your
Customers in the normal course of your business, as stated in the Client
Particulars;

	 	11.1.2	 	you are the true owner of the Debt and have the right to sell the Debt to us
and no other party has any charge, trust, lien, pledge, interest, tracing or
other rights in respect of the Debt, or the goods the subject matter of the Debt, which would affect our title to the Debt or our right to
payment of the Debt;

 

22

 

	 	11.1.3	 	the Debt has not been Notified to us previously;

	 	11.1.4	 	your obligations under the Contract of Sale have been completely performed
and the Customer will pay the Debt without raising any dispute, retention, set
off or counterclaim;

	 	11.1.5	 	you do not owe any obligations to the Customer which may reduce the Notified
Value of the Debt payable by the Customer;

	 	11.1.6	 	the Debt is owed by a Customer who has an established place of business in
the UK or, if we have agreed to purchase your Export Debts, in an Accepted
Country;

	 	11.1.7	 	in deciding to extend credit to the Customer, you made all reasonable
enquiries about the creditworthiness of the Customer that a prudent supplier
would undertake and have told us of any adverse information you know about the
Customer’s financial position;

	 	11.1.8	 	the details of the invoice(s) evidencing the Debt as set out in the relevant
Invoice Schedule are accurate;

	 	11.1.9	 	the correct name and address of the Customer are stated on every invoice and
document evidencing the Contract of Sale; and

	 	11.1.10	 	you hold all necessary licences and authorities to enter into the Contract
of Sale and for the Customer to pay the Debt to us.

	 	11.2	 	You warrant to us that:

	 	11.2.1	 	prior to the Commencement Date, you have told us about all material
information that may have influenced our decision to enter into this Agreement
with you or to enter into any guarantee or indemnity with any Guarantor; and

 

23

 

	 	11.2.2	 	all balance sheets, profit and loss accounts, management accounts and other
accounting records relating to your business or that of an Associate or
Guarantor which you provided to us prior to the Commencement Date or which you
supply to us during the duration of this Agreement are accurate and correct.

	 	11.3	 	If you are required by us to assign the benefit of any policy of credit
insurance, you warrant to us that:

	 	11.3.1	 	you have disclosed to the insurer every fact or matter which you know or
ought to know might influence the insurer in relation to the issue or
continuance of cover under the policy;

	 	11.3.2	 	you have fully complied with the terms of the policy;

	 	11.3.3	 	you have not done or omitted to do anything which might invalidate the
policy; and

	 	11.3.4	 	you will promptly submit and recover all claims relating to Debts which you
are entitled to make under the policy;

	 	11.3.5	 	and you undertake to us that you will continue to comply with the warranties
set out in this condition 11.3 for the duration of this Agreement and will pay
any premiums when due, hold any sums received from an insurer in respect of
Debts on trust for us and tell us immediately if the policy shall be cancelled
or lapse.

	 	11.4	 	Your compliance with condition 10 and this condition 11 of this Agreement are
of the essence of this Agreement.

	12.	 	Computerised Services

	 	12.1	 	If we have agreed to provide you with our Computerised Services, the provisions
of this condition 12 will apply.

	 	12.2	 	This condition 12 shall apply to all Messages exchanged between us using the
electronic data interchange network operated by us. We both agree that such Messages shall be transmitted in accordance with any user manual or procedures
communicated in writing by us to you.

 

24

 

	 	12.3	 	You undertake:

	 	12.3.1	 	at your expense, to make suitable contingency arrangements to cover system,
communication or operating failures or the suspension or withdrawal of the
Computerised Services;

	 	12.3.2	 	to ensure that all Messages you send are correct and complete;

	 	12.3.3	 	to use the Computerised Services only for your own needs and for the purpose
of this Agreement.

	 	12.4	 	You have a non-transferable licence to use the Computerised Services for the
duration of this Agreement or the earlier termination of such Computerised Services by
us.

	 	12.5	 	We shall have the right to alter the extent of the Computerised Services at any
time without notice to you.

	 	12.6	 	Each of us agrees to:

	 	12.6.1	 	notify the other immediately if either of us knows or suspects that there has
been any failure, delay, error, defect, corruption, fraud or breach of security
in sending or receiving any Message or any misuse of or breach of secrecy in
respect of any of the matters referred to in condition 12.6.3 and to co-operate
in resolving such matters;

	 	12.6.2	 	take all appropriate steps and establish and maintain all appropriate
procedures so as to ensure that as far as is reasonably practicable Messages
are properly stored, are not accessible to unauthorised persons, are not
altered, lost or destroyed and are capable of being retrieved only by properly
authorised persons;

	 	12.6.3	 	keep secret and confidential the method of operation of the Computerised
Services, all access telephone numbers, user numbers, passwords, test keys,
access codes and security procedures;

 

25

 

	 	12.6.4	 	accept the integrity of all Messages and to give them the same status as if
they had been in writing unless it can be shown that they have been corrupted
as a result of technical failure;

	 	12.6.5	 	delete any Message that is not intended for either of us and notify the other
party that it has done so; and

	 	12.6.6	 	maintain a Data Log of Messages sent and received and store such Data Log
unmodified for 12 months after the termination of this Agreement. Each Data
Log will be made available to the other party on request. Our Data Log will be
conclusive evidence of the Messages sent and received by us, the constituents
of such Messages and the times at which they were sent and received, in the
absence of manifest error.

	 	12.7	 	Each Message must identify the sender and recipient and include a means of
verifying the authenticity of the Messages either through a technique used in the
Message or provided in any user manual or procedures communicated in writing by us to
you.

	 	12.8	 	The copyright and all other rights in the Computerised Services provided by us
or by our licensors shall at all times remain vested in us or, if the terms of any
contract between us and our licensors so specify, in our licensors.

	 	12.9	 	We may act on any Message ostensibly sent by you even if it did not originate
from you or the person purporting to send such Message had no authority to do so.

	 	12.10	 	You accept that:

	 	12.10.1	 	information communicated through our Computerised Services may be updated by
us at any time and we shall not be under an obligation to make a payment to you
even if your accounts show that you have Available Funds or we have
acknowledged a Message containing a payment request;

 

26

 

	 	12.10.2	 	we shall not be liable for any delay in performing any of our obligations
under this condition 12 in respect of the Computerised Services which is caused
directly or indirectly by:

	 	12.10.2.1	 	any downtime, unavailability, failure or malfunction of
computer hardware, equipment or software, or of any telephone line
or other communication system, service, link or equipment;

	 	12.10.2.2	 	the alteration, suspension or withdrawal of the Computerised
Services;

	 	12.10.2.3	 	any error or discrepancy in any Message received by us; or

	 	12.10.2.4	 	abnormal operating conditions or any unforeseeable event
including those set out in condition 17.1.1.

	 	12.11	 	You will indemnify us against all liabilities, damages and expenses arising
out of the transmission by you or receipt by us of or our relying or acting on
incorrect or inaccurate information or our not receiving a Message from you.

	 	12.12	 	We shall be entitled, without liability to you or giving you notice, at any
time to suspend or withdraw the operation of the Computerised Services after which no
further Messages shall be sent or enquiries shall be made by either of us until we have
agreed to reactivate the Computerised Services.

	 	12.13	 	The Computerised Services will be withdrawn automatically upon termination of
this Agreement. Upon the withdrawal of the Computerised Services, you will immediately
deliver to us all documents, equipment and copies of software supplied by us to you for
use in connection with the Computerised Services.

	 	12.14	 	We reserve the right to charge you for new versions or updates of the
Computerised Services or their reconfiguration due to any misuse of the Computerised
Services by you.

 

27

 

	 	12.15	 	If you upload and send invoice details to us electronically, the Invoice
Schedules shall be treated as containing the following notice to us:

	 
	 	 	 	“We hereby assign each of the Debts evidenced by the invoices listed below and
confirm that we have complied with all the warranties and undertakings given by us
in the agreement between us for the purchase of Debts and in particular that the
Contract of Sale under which each Debt arises has been fully performed.”

	13.	 	Communications with third parties

	 	13.1	 	You authorise us to:

	 	13.1.1	 	contact your Customers for the purpose of collecting and verifying Debts;

	 	13.1.2	 	provide your auditors, bankers, accountants and other professional advisers
with such information about your dealings with us as they may request; and

	 	13.1.3	 	obtain from your auditors, bankers, accountants and other professional
advisers such information as we may require.

	 	13.2	 	You confirm that the persons identified in condition 13.1 are or will be
authorised by you at all times to give such information and that you will provide us
with proof that such authority has been given if we request it.

	14.	 	Unlimited partnerships and sole traders

	 	14.1	 	This condition 14 forms part of this Agreement if you are an unlimited
partnership or sole trader. Conditions 14.2 to 14.8 only apply if you are an unlimited
partnership. Condition 14.9 only applies if you are a sole trader.

	 	14.2	 	Any reference in this Agreement to “you” shall be construed as a reference to
each of your partners or your partnership and “your” shall be construed similarly. In
condition 18.1, the words “and to act as the attorneys of each of your partners” shall
be added after the words “to act as your attorneys”.

 

28

 

	 	14.3	 	The undertakings and warranties contained in this Agreement shall be treated as
being given by each of your partners and the obligations of the partners shall be joint
and several.

	 
	 	14.4	 	You warrant that the partners identified in the Client Particulars comprise all
of your partners and undertake to inform us in writing immediately if:

	 	14.4.1	 	any person intends to join or any partner proposes to cease to be a member of
your partnership;

	 
	 	14.4.2	 	you move your principal place of business to a location outside England and
Wales; or

	 
	 	14.4.3	 	you change the name of your partnership from that stated in the Client
Particulars.

	 	14.5	 	Upon admitting a new partner to the partnership, you will procure that the new
partner executes all documents that are required to make him bound by the terms of this
Agreement.

	 
	 	14.6	 	Any partner who ceases to be a member of the partnership shall remain liable to
us for all liabilities accrued under this Agreement until the service of a notice under
condition 14.4.1 and our acknowledgement of such notice or, if later, the date on which
he ceased to be a partner.

	 
	 	14.7	 	Despite any changes in the membership of your partnership, we may treat this
Agreement as continuing on the same terms and we shall be entitled to account to you
and exercise all rights of set off as if there had been no change.

	 
	 	14.8	 	We shall be entitled to:

	 	14.8.1	 	release or conclude a compromise with any one or more of your partners
without affecting our rights against the others;

	 
	 	14.8.2	 	give a demand to any partner and treat it as being delivered to all your
partners;

 

29

 

	 	14.8.3	 	treat a notice or demand from any of your partners as having been given by
all of your partners;

	 
	 	14.8.4	 	treat this Agreement as binding upon any executor, administrator or personal
representative of any of your partners and upon any committee, receiver,
judicial factor, trustee or other persons lawfully acting on behalf of any of
them; and

	 
	 	14.8.5	 	agree variations to this Agreement with any one or more of your partners.

	 	14.9	 	If you are a sole trader:

	 	14.9.1	 	you must obtain our written consent to your entering into a partnership with
another person;

	 	14.9.2	 	you undertake to inform us in writing immediately if you move your principal
place of business to a location outside England and Wales; and

	 	14.9.3	 	we shall be entitled to treat this Agreement as binding upon any executor,
administrator or personal representative of your estate or upon any committee,
receiver, judicial factor, trustee or other persons acting lawfully on your
behalf.

	 	14.10	 	You will indemnify us against any costs incurred by us in registering this
Agreement in the Register of the Assignments of Book Debts.

	 	14.11	 	You consent to the storing and processing of information about you in any way
by us or any Bibby Group Company, which may be based within or outside the European
Economic Area, for the purpose of providing services and finance to you and the other
purposes set out in this condition 14.11. This information will be used by us and
other Bibby Group Companies for:

	 	14.11.1	 	training purposes;

	 
	 	14.11.2	 	credit or financial assessment;

 

30

 

	 	14.11.3	 	market and product analysis;

	 
	 	14.11.4	 	making payments;

	 
	 	14.11.5	 	recovering monies;

	 
	 	14.11.6	 	preparing statistics;

	 
	 	14.11.7	 	developing, improving and marketing our services to you and other clients;

	 
	 	14.11.8	 	the protection of our interests (including establishing Credit Limits for
the benefit of other clients or obtaining settlement of any liability of yours
to us);

	 
	 	14.11.9	 	the prevention of fraud and money laundering; and

	 
	 	14.11.10	 	to decide whether to continue with this Agreement or to vary its terms.

	 	14.12	 	We will tell you if we make a significant decision about you solely using an
automated decision-making process, such as credit scoring. You may ask us to review
that decision using other means.

	 	14.13	 	We may from time to time make searches of the records relating to you compiled
by the credit reference and fraud prevention agencies which we use. Such agencies will
keep a record of our searches which will be seen by other organisations that make
searches with them and may be used to prevent fraud or money laundering or make credit
decisions about you.

 

31

 

	 	14.14	 	It is important that you always give us accurate information. If at any time
you give us or procure the giving of false or inaccurate information and we suspect
fraud, we may record this with our credit reference and fraud prevention agencies. The
agencies to whom such information is provided will use the information for statistical
analysis about fraud and will also share it with other organisations to:

	 	14.14.1	 	help make decisions on motor, household, credit, life and other insurance
proposals and claims by you, members of your household or any other businesses
associated with you; and

	 
	 	14.14.2	 	prevent fraud.

	 	14.15	 	We may give information about you, the terms of this Agreement, your
compliance with the terms of this Agreement, details of any breaches of this Agreement
and any Debts to:

	 	14.15.1	 	our credit reference and fraud prevention agencies, so that they and other
organisations that search their records may assess applications for credit and
credit-related services made by you or members of your household or by any
other businesses associated with you, trace debtors, recover debts, prevent
money laundering and fraud, manage your accounts or carry out statistical
analysis relating to credit and financial services;

	 	14.15.2	 	our or your insurers, so they can quote for and issue any policy or deal
with any claims;

	 	14.15.3	 	any Guarantor, so they can assess their obligations to us or so we can
enforce such obligations against them under the relevant guarantee and/or
indemnity;

	 	14.15.4	 	our bankers or any advisers acting on our or your behalf, so they can carry
out their services to us or you;

	 	14.15.5	 	any business providing factoring or discounting facilities to whom you may
wish to transfer, to facilitate such transfer;

	 	14.15.6	 	any person with whom we may securitise the Debts or to whom we may wish to
transfer the Debts, to facilitate such transactions;

	 	14.15.7	 	anyone else to whom we novate or transfer our rights or duties under this
Agreement, so they can comply with or enforce this Agreement; and

 

32

 

	 	14.15.8	 	any Bibby Group Company, so they can assess your creditworthiness or decide
whether to offer any further financial facilities to you.

	 	14.16	 	From time to time we or other Bibby Group Companies may contact you by letter,
phone, fax or email to:

	 	14.16.1	 	keep you informed about services and products which we consider may be of
interest to you; and

	 	14.16.2	 	carry out market research about our services and products or those of third
parties.

	 	 	 	If you do not wish to receive such information, then please let us know by telling
our Data Protection Compliance Officer, whose contact details are set out in
condition 14.18. We will not pass information about you to other third parties for
direct marketing purposes.

	 	14.17	 	For training and/or security purposes your phone calls to us may be monitored
and/or recorded.

	 	14.18	 	If you want to have details of the credit reference agencies and other third
parties referred to in this condition 14 from whom we have obtained and to whom we may
give information about you, please contact the Data Protection Compliance Officer,
Bibby Group of Factors, Packington House, 3-4 Horse Fair, Banbury, Oxfordshire OX16
0AA, telephone 0800 919592. You have a legal right to these details and, if you apply
in writing, to receive a copy of the information we hold about you. A fee will be
payable.

	15.	 	Termination of this Agreement

	 	15.1	 	We may immediately terminate this Agreement by written notice to you at any
time after any of the following Termination Events:

	 	15.1.1	 	a material breach by you of this Agreement or any other agreement to which we
are both parties or between you and any Bibby Group Company;

 

33

 

	 	15.1.2	 	your failure to deliver an Invoice Schedule to us during a period of 30
consecutive days where such failure is wholly attributable to any deliberate
act or omission on your part;

	 	15.1.3	 	your ceasing or threatening to cease to carry on your business as shown in
the Client Particulars;

	 	15.1.4	 	your Insolvency or the Insolvency of any director, shareholder, member or
partner of yours except for the purpose of any reconstruction , amalgamation or
a reorganisation, provided such reconstruction, amalgamation or reorganisation
is approved in advance by us in writing;

	 	15.1.5	 	the Insolvency or death of any Guarantor or the giving of notice of
termination of a guarantee and/or indemnity given by a Guarantor;

	 	15.1.6	 	any change in the ownership, directors, partners, members, Control,
constitution, or composition of your business or adverse change in your
financial position or performance which in our
discretion we consider materially affects our rights under this
Agreement;

	 	15.1.7	 	any application by a creditor of yours for a third party debt order against
us;

	 	15.1.8	 	the termination of any waiver, consent, release, or priority arrangement
given to us by any party who holds security over your assets;

	 	15.1.9	 	your failure to discharge when due any material obligations owed by you to a
third party for repayment of borrowed money;

	 	15.1.10	 	the discounting or factoring by an Associate of its debts to a third party
without our prior written consent;

	 	15.1.11	 	the material breach or termination by you or any third party of any
representation, warranty or undertaking in reliance upon which we entered into
this Agreement;

 

34

 

	 	15.1.12	 	the repayment by you of any loan made to you by an Associate without our
prior written consent save for any repayment of principal or interest under the
Destron Fearing Loan;

	 	15.1.13	 	the material breach or termination of any agreement between us and any of
your Associates; or

	 	15.1.14	 	the disqualification of any of your directors from acting as a director or
your conviction or the conviction of any shareholder, director, member of an
LLP or partner of yours of a criminal offence involving dishonesty.

	 	 	 	For the purposes of this clause 15.1 a “material breach” shall mean a serious
or persistent default by you (or any Associate of yours) in the performance of any
material covenant, condition or obligation binding on you (or any of your
Associates) whether under the terms of this Agreement or under any agreement between
us and any such Associate and the default is either incapable of remedy or is not
remedied within five Working Days of the date
upon which you receive from us a notice requiring you to remedy the relevant
default.

	 	15.2	 	The occurrence of a Termination Event may constitute the repudiation by you of
this Agreement. Our acceptance of such repudiation may be communicated to you
expressly in writing or inferred from our exercising our rights under condition 15.3.

	 	15.3	 	Upon or at any time after a Termination Event (whether or not we exercise our
right to terminate this Agreement) we may, with or without giving written notice to
you:

	 	15.3.1	 	reduce the Approved Funding Percentage to zero or to such other figure as in
our discretion we shall decide;

	 	15.3.2	 	cancel all Credit Limits;

	 	15.3.3	 	designate all Approved Debts as Disapproved Debts;

 

35

 

	 	15.3.4	 	require you to pay to us immediately any balance on your Current Account, the
aggregate of all credit balances on your Customers’ accounts and all other sums
which you owe to us under this Agreement or any other agreement;

	 	15.3.5	 	require you to repurchase any Outstanding Debts at a price equivalent to that
payable under condition 15.3.4;

	 	15.3.6	 	increase the Factor’s Discount by 2%;

	 	15.3.7	 	charge you the sum payable pursuant to condition 7.5; and

	 	15.3.8	 	make a reserve against the Sales Ledger Control Account of such amount as we
consider appropriate to cover any liabilities which you may owe to us under
this Agreement or any other agreement.

	 	15.4	 	Upon your Insolvency or ceasing to trade, in the event that any sum charged to
you under condition 7.5 is less than an amount equivalent to 10% of the Notified Value
of all Debts Outstanding at the date of the onset of Insolvency
or cessation of trading, we may charge you a collection fee equivalent to the
difference between (1) the sum charged under condition 7.5 and (2) 10% of the
Notified Value of all Debts Outstanding at the date of the onset of Insolvency or
cessation of trading (which we may debit to your Client Account at any time after
such date). Such collection fee is to cover the additional administrative work we
will be required to undertake to collect Debts after such events. You acknowledge
that such collection fee represents a genuine pre-estimate of the loss we are likely
to sustain in consequence of these events.

	 	15.5	 	Following a notice from you to terminate this Agreement under condition 2.1, we
may, with or without giving notice to you, exercise the same rights as are set out in
condition 15.3.8.

	 
	 	15.6	 	Upon the termination of this Agreement:

	 	15.6.1	 	all Approved Debts shall automatically be Disapproved Debts;

 

36

 

	 	15.6.2	 	you must repurchase all Outstanding Debts from us at a price equivalent to
that payable under condition 15.3.4;

	 	15.6.3	 	the ownership of all Debts coming into existence prior to the date of
termination will continue to vest in us and our respective rights and
obligations under this Agreement shall continue to apply until the repurchase
of the Debts under condition 15.6.2 has been completed.

	 	15.7	 	You will indemnify us against any claim by a Customer to repayment of any sum
paid to us by mistake or for a consideration which has wholly failed or which is set
aside under insolvency law, whether such claim shall be communicated to us before or
after the termination of this Agreement or the making of any payment under condition
15.6.2.

	16.	 	Variation, assignment and novation of this Agreement

	 	16.1	 	Except as provided in this Agreement, any variation of this Agreement will only
take effect when it is in writing and signed on our behalf by a director or
authorised officer or attorney and by you or a person acting lawfully on your
behalf.

	 	16.2	 	You agree to the novation and/or assignment by us to any other party of any or
all of our rights and obligations under this Agreement.

	 	16.3	 	This Agreement shall be binding upon and be effective for the benefit of our
successors and assignees and, where appropriate, references to “we” or “us” shall
include such successors and assignees.

	 	16.4	 	You will not without our prior written consent assign or delegate any of your
rights or obligations under this Agreement.

	17.	 	Liability and waivers

	 	17.1	 	We shall not be liable to you:

	 	17.1.1	 	if we are unable to perform our obligations under this Agreement as a result
of an unforeseen event including any circumstances outside our reasonable
control, exchange control, governmental or legal requirements, an act of God,
the outbreak of war, any terrorist act, resolution, civil insurrection, strike,
industrial action or failure of postal, communications or banking services; or

 

37

 

	 	17.1.2	 	for any consequential or indirect loss of or damage to the goodwill or
profits of your business.

	 	17.2	 	If we decide not to enforce any term of this Agreement against you, we shall
not be precluded from subsequently enforcing that or any other term of this Agreement
against you nor shall any waiver or apparent waiver by us of a breach by you of your
obligations imply our consent to any subsequent breach.

	 	17.3	 	You accept that the terms of this Agreement are reasonable but if any provision
is determined to be invalid, the remainder of this Agreement will not be affected.

	18.	 	Power of attorney

	 	18.1	 	To ensure that you perform all your obligations under this Agreement and as
security for all sums due to us, you irrevocably appoint us and our directors, company
secretary and other officers at any time, jointly and each of them severally, to act as
your attorneys as we or they consider necessary to:

	 	18.1.1	 	perfect our title to any Debt, Related Rights or Returned Goods;

	 
	 	18.1.2	 	sign deeds and documents (including Invoice Schedules);

	 
	 	18.1.3	 	endorse or negotiate any cheques or other instruments;

	 
	 	18.1.4	 	obtain payment of Debts;

	 
	 	18.1.5	 	institute, conduct or defend any proceedings;

	 
	 	18.1.6	 	settle any indebtedness owed by you either to us or any Customer;

	 	18.1.7	 	secure the performance of any of your obligations to us or to any Customer;

 

38

 

	 	18.1.8	 	secure the performance of any of your obligations under a policy of credit
insurance in which we have an interest;

	 	18.1.9	 	take any other action which we consider reasonably necessary or expedient.

	 	18.2	 	This appointment shall endure both during and after the termination of this
Agreement until all sums due to us have been paid.

	 	18.3	 	You also irrevocably appoint any assignee of ours or any person to whom we may
novate this Agreement to perform any of the acts set out in this condition 18.

	 	18.4	 	We may appoint and remove a substitute attorney for any of such acts.

	 	18.5	 	You agree to ratify any act performed under these powers.

	19.	 	Service of notices

	 	19.1	 	Any notice from us to you may be served by delivery at or posting to:
19.1.1 your address stated in the Client Particulars;

	 	19.1.2	 	such other address in the UK as you may have advised us for the purpose of
this condition 19;

	 	19.1.3	 	any address at which you carry on business;

	 	19.1.4	 	your registered office (if you are a company or LLP); or

	 	19.1.5	 	your last known residential or business address (if you are a sole trader or
partner of an unincorporated partnership).

	 	19.2	 	Such notice may also be given by facsimile transmission or by email or handed
to you (if you are a sole trader), any partner (if you are a partnership or LLP) or
director of yours (if you are a limited company).

	 	19.3	 	Any such notice will be treated as served:

	 	19.3.1	 	if delivered, at the time of delivery;

 

39

 

	 	19.3.2	 	if sent by post, 48 hours from the time of posting;

	 
	 	19.3.3	 	if sent by facsimile transmission or email, at the time of transmission; and

	 
	 	19.3.4	 	if handed personally, at the time of handing over.

	 	19.4	 	Any notice in writing by you to us under this Agreement shall be effective at
the time it is received by us at our registered office.

	20.	 	Governing law

	 	 	 	This Agreement shall be governed and interpreted by English Law. You will submit to the
exclusive jurisdiction of the English courts.

	21.	 	Definitions

	 	21.1	 	The following words shall have the meanings as set out after each:

	 	 	 	 	 
	 

	 	“Accepted Country”
	 	All countries other than any country expressly
excluded in the Special Conditions.
	 
	 	 	 	 
	 

	 	“Allowances”
	 	Any discount, credit, debit or set off claimed by a
Customer or other adjustment which reduces the
Notified Value of a Debt.
	 
	 	 	 	 
	 

	 	“Approval Period”
	 	The period stated in clause 14 of the Particulars at
the end of which we may exercise our right of
Recourse.
	 
	 	 	 	 
	 

	 	“Approved Currency”
	 	The Euro, United States Dollar and any other
currencies that we may tell you in writing.
	 
	 	 	 	 
	 

	 	“Approved Debt”
	 	A Debt Notified to us:
	 
	 	 	 	 
	 

	 	 	 	(1) which is within the relevant Credit Limit;

	 
	 	 	 	 
	 

	 	 	 	(2) which has not become a Disapproved Debt pursuant
to conditions 5.7 and 5.8; and

	 
	 	 	 	 
	 

	 	 	 	(3) in respect of which we have not exercised our
right of Recourse.

	 
	 	 	 	 
	 

	 	“Approved Funding Percentage”
	 	The percentage specified in clause 5 of the
Particulars which will be applied against the value
of Approved Debts to calculate the Available Funds.

 

40

 

	 	 	 	 	 
	 

	 	“Associate”
	 	Means any business or other operation of yours
situated in the United Kingdom which is:
	 
	 	 	 	 
	 

	 	 	 	(1) Any subsidiary or holding company of yours (as
defined in s736 and s736A of the Companies Act 1985
as amended by the Companies Act 1989);

	 
	 	 	 	 
	 

	 	 	 	(2) any other form of associate of yours (as defined
by s184 of the Consumer Credit Act 1974);

	 
	 	 	 	 
	 

	 	 	 	(3) any director, partner, shareholder or employee of
yours; and

	 
	 	 	 	 
	 

	 	 	 	(4) any company, LLP partnership or business in which
you or any Associate has a material interest.

	 
	 	 	 	 
	 

	 	“Available Funds”
	 	An amount calculated by applying the Approved Funding
Percentage against the aggregate value of Approved
Debts and deducting from such sum the balance on your
Current Account, and subject to the restrictions in
condition 6.8.
	 
	 	 	 	 
	 

	 	“Banking Day”
	 	A day (other than a Saturday or a Sunday) on which
banks are open for business in London.
	 
	 	 	 	 
	 

	 	“Bibby Group Company”
	 	Bibby Financial Services Limited (registered number
3530461) and any company which is a subsidiary of
that company or any subsidiary of such subsidiary (as
defined in s.736 and s.736A the Companies Act 1985,
as amended by the Companies Act 1989).
	 
	 	 	 	 
	 

	 	“Client Account”
	 	An account maintained by us to record the aggregate
value of all Debts (after deduction of any credit
notes and Allowances), payments by us to you and
charges payable pursuant to condition 7.
	 
	 	 	 	 
	 

	 	“Client Particulars”
	 	The matters referred to in the section of this
Agreement headed “Client Particulars”.
	 
	 	 	 	 
	 

	 	“Client Statement”
	 	A statement summarising the transactions recorded on
your Client and Sales Ledger Control Accounts which
we will send to you at the end of each month.
	 
	 	 	 	 
	 

	 	“Collection”
	 	Any form of payment made to us in cleared funds which
is tendered in or towards the discharge of a Debt.

 

41

 

	 	 	 	 	 
	 

	 	“Commencement Date”
	 	The date stated in clause 1 of the Particulars on
which this Agreement will begin.
	 
	 	 	 	 
	 

	 	“Computerised Services”
	 	The services available through our computer system
described in our Computerised Services user manual,
including electronic data interchange.
	 
	 	 	 	 
	 

	 	“Contract of Sale”
	 	Any contract made by you for the supply or hire of
goods or the provision of services to a Customer.
	 
	 	 	 	 
	 

	 	“Control”
	 	The ability of the owners of a business to direct how
the affairs of a company, LLP or partnership shall be
managed.
	 
	 	 	 	 
	 

	 	“Credit Limit”
	 	The maximum amount determined by us up to which Debts
due from a Customer may be designated as Approved
Debts.
	 
	 	 	 	 
	 

	 	“Credit Note Limit”
	 	The limit excluding VAT up to which you may issue and
send credit notes to your Customers without obtaining
our prior agreement.
	 
	 	 	 	 
	 

	 	“Credit Note Schedule”
	 	A form by which you will Notify credit notes to us.
	 
	 	 	 	 
	 

	 	“Current Account”
	 	An account that records the amount due at any time
from you to us or us to you.
	 
	 	 	 	 
	 

	 	“Customer”
	 	Any person who incurs an obligation to make payment
under a Contract of Sale.
	 
	 	 	 	 
	 

	 	“Customer Concentration
Percentage”
	 	The percentage stated in clause 6 of the Particulars
or which we tell you in writing is the maximum
percentage of all Outstanding Approved Debts against
which we may allow Prepayments to be made in or
towards the payment of the Purchase Price of Debts
due from the same Customer.
	 
	 	 	 	 
	 

	 	“Data Act”
	 	The Data Protection Act 1998.
	 
	 	 	 	 
	 

	 	“Data Log”
	 	A record of Messages exchanged between you and us.
	 
	 	 	 	 
	 

	 	“Data Subject”
	 	The corresponding definition set out in the Data Act.
	 
	 	 	 	 
	 

	 	“Debt”
	 	Any present, future or contingent obligation of a
Customer to make payment under a Contract of Sale
(including the right to recover sums due following
the determination, assessment or agreement of such
obligation), interest, Value Added Tax and all duties
and charges.

 

42

 

	 	 	 	 	 
	 

	 	“Disapproved Debt”
	 	Any Debt which is not an Approved Debt.
	 
	 	 	 	 
	 

	 	“Disbursements”
	 	All costs, claims, charges and expenses incurred in
connection with this Agreement, including the cost of
our employing accountants, solicitors and other
professional advisers, and using credit and fraud
prevention agencies, all bank charges and such other
charges as we shall tell you in writing from time to
time.
	 
	 	 	 	 
	 

	 	“Export Debt”
	 	A Debt evidenced by an invoice addressed to a
Customer who is domiciled or carries on business
outside of the UK.
	 
	 	 	 	 
	 

	 	“Factor’s Discount”
	 	A charge calculated at the rate stated in clause 11
of the Particulars on the balance on your Current
Account owing from you to us.
	 
	 	 	 	 
	 

	 	“Fee”
	 	A charge for the services provided by us to you
calculated in the manner stated in clause 8 of the
Particulars.
	 
	 	 	 	 
	 

	 	“Funding Limit”
	 	The maximum permitted amount, as stated in clause 12
of the Particulars or which we tell you in writing,
on your Current Account at any time.
	 
	 	 	 	 
	 

	 	“Guarantor”
	 	A person who has given a guarantee and/or indemnity
in respect of your obligations to us under this
Agreement or any other agreement and/or in respect of
your obligations to any Bibby Group Company under any
agreement with such company.
	 
	 	 	 	 
	 

	 	“Initial Debts”
	 	The Debts Outstanding at the Commencement Date.
	 
	 	 	 	 
	 

	 	“Insolvent”
	 	(1) In relation to a company or LLP:
	 
	 	 	 	 
	 

	 	 	 	1.1 the convening of a meeting of creditors for the
purpose of winding up the company or LLP or any other
purpose referred to in the Insolvency Act 1986 or the
Enterprise Act 2002;

	 
	 	 	 	 
	 

	 	 	 	1.2 the presentation of a petition or the making of
an order for the winding up of the company or LLP;

	 
	 	 	 	 
	 

	 	 	 	1.3 the appointment of an administrator or the
presentation of a petition for an administration
order under the Insolvency Act 1986;

 

43

 

	 	 	 	 	 
	 

	 	 	 	1.4 the appointment of a receiver, administrative
receiver, liquidator, provisional liquidator or
judicial factor of all or any part of the property of
the company or LLP;

	 
	 	 	 	 
	 

	 	 	 	1.5 the dissolution of the company or LLP; or

	 
	 	 	 	 
	 

	 	 	 	1.6 the commencement of a moratorium under the
Insolvency Act 2000.

	 
	 	 	 	 
	 

	 	 	 	(2) In relation to an individual:

	 
	 	 	 	 
	 

	 	 	 	2.1 the presentation of a petition or the making of
an order for his bankruptcy or sequestration; or

	 
	 	 	 	 
	 

	 	 	 	2.2 the granting of a trust deed for his creditors.

	 
	 	 	 	 
	 

	 	 	 	(3) In relation to a partnership:

	 
	 	 	 	 
	 

	 	 	 	3.1 the presentation of a petition or the making of
an order for the winding up or administration of the
partnership; or

	 
	 	 	 	 
	 

	 	 	 	3.2 the presentation of a petition or the making of
an order for the bankruptcy or sequestration of any
partner of the firm.

	 
	 	 	 	 
	 

	 	 	 	(4) In relation to any person:

	 
	 	 	 	 
	 

	 	 	 	4.1 the service of a statutory demand under the
Insolvency Act 1986;

	 
	 	 	 	 
	 

	 	 	 	4.2 any creditor attaching, taking possession of,
distraining or executing against, sequestrating,
levying on, exercising rights of lien on or enforcing
security rights against or obtaining an order
restraining the disposal of any part of the person’s
income or assets;

	 
	 	 	 	 
	 

	 	 	 	4.3 the entry of judgment or the making of any order
or award for the payment of money to another party
which remains unsatisfied for a period of 5 Working
Days;

	 
	 	 	 	 
	 

	 	 	 	4.4 entering into a voluntary arrangement or the
appointment of any nominee or supervisor under the
Insolvency Acts 1986 or 2000 or any informal
arrangement or composition in satisfaction of debts
with creditors; or

 

44

 

	 	 	 	 	 
	 

	 	 	 	4.5      being deemed insolvent under the Insolvency Act
1986.

	 
	 	 	 	 
	 

	 	 	 	“Insolvency” shall be construed accordingly.
	 
	 	 	 	 
	 

	 	“Invoice Schedule”
	 	A form by which you will specifically assign each
Debt to us.
	 
	 	 	 	 
	 

	 	“Letter of Offer”
	 	A letter in which we proposed to you the principal
terms upon which we would enter into this Agreement.
	 
	 	 	 	 
	 

	 	“LIBOR”
	 	On or after 11.00am on the first Banking Day of each
calendar month:
	 
	 	 	 	 
	 

	 	 	 	(1) the three month Screen Rate; or

	 
	 	 	 	 
	 

	 	 	 	(2) (if no Screen Rate is available for the
relevant currency on the first Banking Day of any
calendar month) the arithmetic mean of the three
month rates (rounded upwards to four decimal places)
quoted by the Reference Banks to leading banks in the
London interbank market.

	 
	 	 	 	 
	 

	 	“LLP”
	 	A limited liability partnership incorporated and
registered under the Limited Liability Partnerships
Act 2000.
	 
	 	 	 	 
	 

	 	“Message”
	 	Data transmitted electronically between you and us.
	 
	 	 	 	 
	 

	 	“Minimum Fees”
	 	The minimum amount of Fees (excluding Refactoring and
Retrospective Fees) which you will pay to us for each
period as stated in clause 10 of the Particulars
commencing from the first day of the month following
the Commencement Date.
	 
	 	 	 	 
	 

	 	“Minimum Notice Period”
	 	The minimum length of notice, as stated in clause 3
of the Particulars, each of us must give to the other
to terminate this Agreement after expiry of the
Minimum Period.
	 
	 	 	 	 
	 

	 	“Minimum Period”
	 	The minimum length of time that this Agreement will
endure, as stated in clause 2 of the Particulars,
unless terminated by us pursuant to condition 15.

 

45

 

	 	 	 	 	 
	 

	 	“Non-notifiable Debts”
	 	Debts owned by us under this Agreement which you are
not required to Notify to us until we tell you
including those referred to in the Special
Conditions.
	 
	 	 	 	 
	 

	 	“Notification”
	 	The method (in writing and/or electronically using
our Computerised Services, as we shall agree in
writing with you) by which you will specifically
assign each Debt to us and tell us of the existence
of credit notes.
	 
	 	 	 	 
	 

	 	“Notified Value”
	 	The amount of a Debt including VAT as stated in an
Invoice Schedule and before deducting any Allowances.
	 
	 	 	 	 
	 

	 	“Notify”
	 	The specific assignment of a Debt by its inclusion in
an Invoice Schedule or the inclusion of a credit note
in a Credit Note Schedule. “Notified” shall be
construed accordingly.
	 
	 	 	 	 
	 

	 	“Outstanding”
	 	A Debt remaining wholly or partly unpaid.
	 
	 	 	 	 
	 

	 	“Particulars”
	 	The matters referred to in the section of this
Agreement headed “Particulars”.
	 
	 	 	 	 
	 

	 	“Prepayment”
	 	Any sum paid by us to you on account of the Purchase
Price of a Debt.
	 
	 	 	 	 
	 

	 	“Purchase Price”
	 	The amount payable by us to you for each Debt
calculated in accordance with condition 4.1.
	 
	 	 	 	 
	 

	 	“Recourse”
	 	Our right to require you to repay immediately any
Prepayment.
	 
	 	 	 	 
	 

	 	“Refactoring Fee”
	 	A charge calculated in the manner stated in clause 9
of the Particulars.
	 
	 	 	 	 
	 

	 	“Reference Banks”
	 	In relation to LIBOR the principal London offices of
Barclays Bank plc, Lloyds TSB Bank plc and Royal Bank
of Scotland plc or such other banks as we may tell
you.
	 
	 	 	 	 
	 

	 	“Related Rights”
	 	In relation to each Debt and all Returned Goods:
	 
	 	 	 	 
	 

	 	 	 	(1)  all your rights (but not obligations) as an
unpaid vendor or under the relevant Contract of Sale
including your rights to the payment of interest, the
return of goods, of lien and stoppage in transit;

 

46

 

	 	 	 	 	 
	 

	 	 	 	(2)  the benefit of all insurances, securities,
guarantees and indemnities;

	 
	 	 	 	 
	 

	 	 	 	(3)  the right to any documents of title to the goods;
and

	 
	 	 	 	 
	 

	 	 	 	(4)  the right to all accounting records relating to
the Debt and all documents evidencing the Contract of
Sale and its performance.

	 
	 	 	 	 
	 

	 	“Retrospective Fee”
	 	A charge, as stated in clause 7 of the Particulars,
for the services to be provided by us in respect of
the Initial Debts.
	 
	 	 	 	 
	 

	 	“Returned Goods”
	 	Any goods relating to a Contract of Sale giving rise
to a Debt which a Customer shall reject or return or
intimate a wish to do so or which you or we shall
recover from a Customer.
	 
	 	 	 	 
	 

	 	“Sales Ledger Control Account”
	 	An account recording the Notified Value of
Outstanding Debts less such Allowances and reserves
as we shall apply to the account.
	 
	 	 	 	 
	 

	 	“Screen Rate”
	 	In relation to LIBOR, the British Bankers’
Association Interest Settlement Rate for the relevant
currency and period displayed on the appropriate page
of the Reuters screen. If the agreed page is replaced
or service ceases to be available, we may specify
another page or service displaying the appropriate
rate.
	 
	 	 	 	 
	 

	 	“Special Conditions”
	 	The conditions specified in the section of this
Agreement headed “Special Conditions”.
	 
	 	 	 	 
	 

	 	“Standard Conditions”
	 	The conditions set out in this part of this Agreement.
	 
	 	 	 	 
	 

	 	“Sterling”
	 	The lawful currency from time to time of the UK.
	 
	 	 	 	 
	 

	 	“Termination Event”
	 	Each event described in condition 15.1.
	 
	 	 	 	 
	 

	 	“UK”
	 	The United Kingdom of Great Britain and Northern
Ireland, the Channel Islands and the Isle of Man.
	 
	 	 	 	 
	 

	 	“UK Debt”
	 	A Debt evidenced by an invoice addressed to a
Customer who is domiciled or carries on business in
the UK.
	 
	 	 	 	 
	 

	 	“Working Day”
	 	Every day except Saturday, Sunday and bank and public
holidays.

 

47

 

	 	21.2	 	Any reference to a statute includes any amendment, replacement or re-enactment
of it and of any code of practice, order, rule or regulation made under it.

	 	21.3	 	The singular includes the plural and vice versa and any reference to any gender
shall include any other gender.

	 	21.4	 	The meaning of general words introduced by the word “other” shall not be
limited by reference to any preceding word or indicating a particular class of acts,
matters or things. The expression “including” shall mean “including without
limitation”.

	 	21.5	 	Where in any place outside England and Wales the meaning of a word or
expression used in this Agreement is to be construed and such word or expression has no
counterpart in that place, it shall, unless the context otherwise requires, have the
meaning of its closest equivalent in that place.

 

48

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