AGREEMENT FOR THE PURCHASE OF DEBTS

(1)  

VENTURE FINANCE PLC (“Venture”) of Sussex House Perrymount Road Haywards Heath West Sussex RH16 1DN incorporated in England with registered number 2281768.

(2)  

THE CLIENT (“Client”) named in paragraph l(a) of the Schedule (“the Schedule”) annexed to and forming part of this Agreement (“this Agreement”).

(1)  

The expressions specified in Appendix A forming part of this Agreement shall have the meanings assigned to them therein. This Agreement shall be construed in accordance with Appendix B.

(2)  

Where in connection with any legal jurisdiction outside England and Wales a word or phrase in this Agreement has no precise counterpart, then this Agreement shall be interpreted as if that word or phrase referred to the closest equivalent in the jurisdiction concerned.

(1)  

This Agreement is for the Sale by the Client and the Purchase by Venture of all Debts, which are in existence at the Commencement Date or which afterwards arise during the currency of this Agreement. On the Commencement Date the Client shall deliver an Offer in respect of each such Debt unpaid at that date. Venture shall only accept such Offer by crediting the value of the Debt, as shown in the Offer, to the Debts Purchased Account, where upon Venture’s ownership of such Debt shall be complete.

(2)  

The ownership of every Debt coming into existence after the Commencement Date and until the ending of this Agreement shall vest in Venture automatically upon such Debt coming into existence without any further act on the part of either Venture or the Client.

(3)  

Upon the vesting in Venture of each Debt pursuant to clauses 4(1) and 4(2) there shall also vest in Venture the ownership of all Related Rights to such Debt.

(1)  

Subject to the other provisions of this Agreement the Purchase Price of each Debt, together with its Related Rights, shall be equivalent to the amount payable by the Debtor in respect of such Debt, including any tax or duty, according to the relevant Sale Contract, after there has been deducted therefrom:

(i)  

any discount, allowance or other deduction allowed or allowable by the Client to the Debtor; and

(ii)  

the Discount Charge in respect of such Debt, calculated in accordance with clause 9(3).

(2)  

The Client shall promptly notify Venture of each Debt created after the Commencement Date and vesting in Venture in such manner and with such particulars and documents evidencing the Debt as Venture may from time to time require. Notification shall be as soon as the relevant Goods have been Delivered, or at any other time if so required by Venture. A Notification shall not include any Debt previously notified or subject to an offer.

(3)  

If in relation to any Debt the Client is unable to give to Venture every one of the warranties and undertakings contained in this Agreement, then the Client shall notify such Debt to Venture separately from other Debts and clearly mark the relevant Notification to that effect. All such Debts shall be Disapproved Debts.

(1)  

Following receipt of a Notification, Venture shall on the next Working Day credit the Purchase Price to the Debts Purchased Account. For administrative convenience Venture may make such credit before the deduction of any of the items which, in accordance with clause 6(1), are to be deducted in computing the Purchase Price. Venture may consequently, if it so wishes, aggregate and debit all such items at any time thereafter to either the Debts Purchased Account or the Current Account.

(2)  

Venture shall make appropriate accounting entries on the Transfer Date to effect the transfer of the Purchase Price of a Debt from the Debts Purchased Account to the credit of the Current Account. The Transfer Date shall be:

(i)  

where it is specified in paragraph 8 of the Schedule that Venture is to collect the Debts:-

(a)  

and where the relevant remittance is by Sterling cheque or Bill of Exchange drawn on or accepted for payment at a bank in the United Kingdom: whichever is the later of the day Venture lodges the instrument of payment with its banker for collection or the day the instrument of payment shall be payable or the day Venture shall identify such payment as being in respect of a specific Notified Debt;

(b)  

but where the relevant remittance is by cheque or Bill of Exchange otherwise than in Sterling and/or by cheque or by Bill of Exchange drawn on or accepted for payment at a bank not in the United Kingdom: whichever is the later of either the day Venture receives notice it has received value for such remittance or the day Venture shall identify such payment as being in respect of a Notified Debt;

(c)  

but where the payment is made by an electronic funds transfer direct to Venture’s bank account: whichever is the later of either one Working Day after it is credited to such account or the day Venture shall identify it to be in respect of a specific Notified Debt;

(d)  

but where it is specified in paragraph 5 of the Schedule that the general nature of this Agreement is “With Bad Debt Protection” and the Purchase

Price of a Credit Approved Debt shall not have been transferred to the Current Account: whichever is the earlier of five Working Days after the end of the fourth calendar month following the end of the month in which the Debt shall have fallen due for payment or five Working Days after Venture receives confirmation of the Insolvency of the Debtor, (except in respect of Export Debts when it shall be the date referred to in the rider to the Schedule — as varied at Venture’s discretion from time to time — by reference to the country to which the relevant invoice is addressed); or

(ii)  

where it is specified in paragraph 8 of the Schedule that the Client is to act as Agent of Venture:-

(a)  

one Working Day after the credit of the relevant remittance to the bank account, established by Venture for the purpose of receiving such remittances; or

(b)  

where it is specified in paragraph 5 of the Schedule that the general nature of this Agreement is “With Bad Debt Protection” and the Purchase Price of a Credit Approved Debt shall not have been transferred to the Current Account and the Client has provided evidence of the validity of the Debt and of compliance with the matters referred to in clause 12(4)(i)(c):- five Working Days after Venture shall receive confirmation of the Insolvency of the Debtor, (except in respect of Export Debts when it shall be the date referred to in the rider to the Schedule — as varied at Venture’s discretion from time to time — by reference to the country to which the relevant invoice is addressed).

(3)  

Where the Purchase Price of a Debt is to be transferred in accordance with clause 7(2)(i)(d) or 7(2)(ii)(b) Venture may prior to such transfer deduct the amount of any Client Bad Debt Risk but so that the total amount so deducted in relation to a single debtor shall not exceed the amount specified in paragraph 14 of the Schedule.

(4)  

If, following receipt of an instrument of payment from a Debtor, but prior to receipt of notification of its clearance for fate, Venture shall have transferred the Purchase Price of a Debt to the Current Account, then Venture shall be entitled to reverse such accounting entries on notification that the instrument has failed to be so cleared for fate.

(5)  

In maintaining the Debts Purchased Account, Venture shall be entitled to debit thereto any discount, allowance or other deduction nature claimed by a Debtor at the time of making payment of any Debt to Venture and shall give notice thereof to the Client. However, upon written notice of objection by the Client within 14 days of such notice the deduction shall be credited back to the Debts Purchased Account and shall be treated as a Disapproved Debt.

(6)  

The Client may at any time request Venture to pay to the Client, but in each case subject to Venture’s right of set-off:

(i)  

any amount standing to the credit of the Client on the Current Account; or

(ii)  

amounts up to the equivalent of the Availability.

Any payment made by Venture shall be sent in a sterling cheque by post either to the Client or to any bank account of the Client or, if the Client and Venture so agree verbally or in writing, shall be made by Bankers Automated Clearing System (sometimes known as BACS). If the Client and Venture agree verbally or in writing that instead of payment by cheque or BACS

that Venture may make payments by the Clearing House Automated Payment System (sometimes known as “CHAPS”) then the Purchase Price shall be adjusted by a Supplementary Discount Charge and Venture shall be entitled to a transaction charge, (the amount of which shall be advised by Venture from time to time) in respect of each payment. Any payment shall be debited to the Current Account on the day Venture shall send a cheque or on the day Venture gives instructions to its bank for a payment by BACS or CHAPS.

(7)  

Venture shall send or make available to the Client a statement of its accounts with the Client not less than once in each month or at such other intervals as may be agreed. Such statement shall be treated as correct and binding on the Client, except for manifest errors or errors in law or any error notified by the Client to Venture within fourteen days of its despatch.

(8)  

Venture shall at any time be entitled to debit to the Current Account all liabilities of the Client to Venture, whether or not arising under this Agreement, present, future, contingent or prospective (including liability to Venture as the customer of another Client of Venture or for Value Added Tax). Where the amount can not be immediately ascertained Venture shall be entitled to make a reasonable estimate thereof. Until such liabilities shall be so debited Venture may set off the amount thereof against amounts payable to the Client.

(1)  

For the purpose of computing the Purchase Price of a Foreign Currency Debt and crediting it to the Debts Purchased Account in accordance with clause 7(1) Venture shall be entitled to use the Conversion Rate on the day it is so credited.

(2)  

For the purpose of transferring the Purchase Price of a Foreign Currency Debt to the Current Account in accordance with clause 7(2) Venture shall be entitled to use the Conversion Rate on the Transfer Date. If the converted amount of the Debt transferred is more than the converted amount of the Purchase Price of that Debt, the difference shall be treated as an increase in the Purchase Price and if it is lower the difference shall be treated as a reduction in the Purchase Price.

(3)  

On Recourse or Reassignment of any Foreign Currency Debt, the Repurchase Price shall be computed by reference to the Conversion Rate applied in crediting the Purchase Price to the Debts Purchased Account.

(1)  

Venture shall, upon delivery of a Notification, be entitled forthwith to charge a Factoring Fee equivalent to the percentage specified in paragraph 15 of the Schedule (or such other percentage or amounts as may be agreed by the parties in writing) of the notified value of such Debt and credit notes before the deduction of any discount or other allowance allowed or allowable at any time to the Debtor. Venture shall immediately debit the Factoring Fee to the Current Account.

(2)  

If the total Factoring Fees during the period of three months immediately following the occurrence of a Right of Immediate Termination shall be less than the total Factoring Fees during the period of three months ended immediately before such right shall arise, then the Client shall pay to Venture a sum equal to the difference or Venture may debit the same to the Current Account. This shall be payable even if this Agreement shall end before the expiry of the three months and shall not affect any other rights of Venture arising out of such events. Should a Collection Transfer Fee become payable pursuant to clause 12(4)(ii) the relevant percentage for calculating the Factoring Fee in respect of all Debts Notified thereafter shall be the percentage stated in paragraph 17(ii) of the Schedule as being the Revised Factoring Fee, in substitution for that appearing in paragraph 15 of the Schedule.

(3)  

The Discount Charge to be deducted in computing the Purchase Price of each Debt, in relation to which a Prepayment shall be made, shall be equivalent to the rate per annum specified in paragraph 16 of the Schedule (or such other rate as may be agreed by the parties in writing) calculated daily, with monthly rests, on the amount of such Prepayment from the date on which it is debited to the Current Account until four Working Days after the Transfer Date. For administrative convenience Venture may calculate the Discount Charge by reference to the Funds in Use at the end of each day. The total of the Discount Charges so calculated shall then be debited monthly.

(4)  

Venture shall be entitled to debit the Current Account and / or the Debts Purchased Account with:

(i)  

all bank charges incurred by Venture in respect of an instrument of payment not cleared for fate as described in Clause 7(4) for a Debt which is not a Credit Approved Debt;

(ii)  

all banking charges and other costs and expenses it may incur in relation to any account to which it directs that any payments by Debtors shall be credited;

(iii)  

such other charges or fees as are referred to in the Schedule or any rider to the Schedule and all bank charges incurred in collecting Export Debts and converting the proceeds of a Foreign Currency Debt into Sterling;

(iv)  

any amount due to Venture in relation to the matters referred to in clauses 14 and 18(2)(v);

(v)  

any other amounts due to Venture.

(5)  

Any amount debited to the Current Account shall be treated as a Prepayment for the purpose of calculating the Discount Charge.

(6)  

All charges and fees to which Venture shall be entitled under the terms of this Agreement shall be calculated or charged exclusive of value added tax. Value added tax shall be payable upon issue by Venture of a value added tax invoice.

(1)  

If a Debtor disputes its liability to pay the full Notified amount of any Debt (less any discount or allowance approved by Venture) the Client shall forthwith notify Venture of such dispute (if the same has not already been advised to the Client by Venture) and undertakes:

(i)  

to use its best endeavours promptly to settle every such dispute, subject to the right of Venture itself to settle or compromise any such dispute or to require that the Client should settle or compromise it on such terms as Venture may in its absolute discretion think fit;

(ii)  

to perform promptly all further and continuing obligations of the Client to the Debtor under any Sale Contract and to give evidence to Venture of such performance and to agree that in the event of the failure of such performance Venture may itself perform such obligations at the expense of the Client;

(iii)  

to issue promptly all credit notes due in respect of Debts and to Notify same within three Working Days of issue subject to the right of Venture to require that no credit note shall be authorised or issued without Venture’s consent and that the originals of such credit notes shall be sent to Venture;

and the Client shall be bound by anything done by or at the direction of Venture in accordance with this sub-clause (1), including any corresponding reduction in the Purchase Price.

(2)  

(i)  

The amount of every credit note Notified pursuant to clause 10(l)(iii) shall be treated as a reduction of the Purchase Price of the Debt to which the credit note relates and shall be debited to the Debts Purchased Account.

(ii)  

The Client shall, if requested by Venture, give Venture a cheque, in favour of Venture, drawn on a London clearing bank for the amount of the credit note. On collection of the cheque its amount shall be credited to the Current Account.

(1)  

A Debt shall become a Disapproved Debt:

(i)  

if (when aggregated with all other Outstanding Debts owing by the same Debtor) it is not for the time being within the Funding Limit or within the Debtor Concentration; or

(ii)  

where paragraph 5 of the Schedule specifies that the general nature of this Agreement is “Without Bad Debt Protection” — at any time after the expiry of the recourse period specified in paragraph 13 of the Schedule; or

(iii)  

where the cost and expense in effecting its collection shall, in Venture’s view, exceed its Purchase Price (except Credit Approved Debts) — at any time after Venture takes that view; or

(iv)  

where the Debtor claims to be unable to pay because of any laws, rules or regulations having the force of law (other than arising solely from the Debtor’s Insolvency) — at any time after such claim is made; or

(v)  

where it is the subject of a dispute described in clause 10 (1) — when such dispute arises; or

(vi)  

where there is a breach of warranty or undertaking given by the client — at the time of such breach; or

(vii)  

where it is (or is required to be) notified separately in accordance with clause 6 (3) - at the time when such notification is (or should be) made; or

(viii)  

where it does not fall within paragraph 6 of the Schedule — at the time that such Debt comes into existence; or

(ix)  

Upon Venture exercising its rights under clause 19(2).

(2)  

Venture shall have Recourse in respect of:

(i)  

a Debt which is a Disapproved Debt because of clause 11 (l)(v) — at any time after the sixtieth day after the arising of the dispute;

(ii)  

any other Disapproved Debt — at any time after the day on which it is due for payment or the day of its Disapproval;

(iii)  

any Debt which is not a Credit Approved Debt where paragraph 5 of the Schedule specifies that the general nature of this Agreement is “With Bad Debt Protection” — at any time after the day on which it is due for payment;

(iv)  

the amount of any Client Bad Debt Risk — at the time it is deducted from the Purchase Price of a Debt in accordance with clause 7(3).

(1)  

Whilst the ownership of any Debt remains vested in Venture or any Debt is held in trust for Venture pursuant to Clause 5, Venture shall have the sole right to enforce payment of and determine whether such Debt shall be collected by Venture or by the Client (as the agent of Venture) and to institute, carry on, defend or compromise proceedings in its own name or the name of the Client in such manner and upon such terms as it may in its absolute discretion think fit. The Client shall co-operate in such enforcement, collection or proceedings and in the recovery of any Transferred Goods.

(2)  

Where paragraph 7 of the Schedule specifies that notice of assignment shall be given such notice shall state, inter alia, that the Debt to which it relates has been purchased by and assigned to Venture and the Client undertakes:-

(i)  

in respect of every Debt vesting in Venture, to give such notice in the manner and form prescribed by Venture; and

(ii)  

to use its best endeavours to ensure that each Debtor makes payment in accordance with such notice and, without affecting such obligation, at its own expense to despatch a letter in terms stipulated by Venture to any Debtor ignoring such notice or any part thereof and to send to Venture a copy of each such letter.

(3)  

Even though paragraph 7 of the Schedule specifies that no notice of assignment shall be given Venture may, at any time by notice to the Client, require that the Client shall forthwith give the notices prescribed in Clause 12(2) in such form and manner as Venture may direct.

(4)  

Where there is reference to “Agent” in paragraph 8 of the Schedule:

(i)  

Venture hereby appoints the Client as the agent of Venture, until notice to the contrary and without prejudice to Venture’s rights pursuant to Clause 12(1), for the purpose of administering the accounts of Debtors and procuring the collection of Debts for the benefit of Venture. The Client hereby accepts such appointment and undertakes:

(a)  

to act promptly and efficiently in carrying out such tasks; and

(b)  

not to hold itself out as the agent of Venture, except while the provisions of this clause 12(4) apply, and while such provisions apply not to hold itself out as the agent of Venture for any other purpose; and

(c)  

to obtain the prior written approval of Venture to the debt collection procedures to be adopted and shall at all times adhere to these and obtain approval to any variations; and

(d)  

to furnish Venture, by such date in each month as Venture may direct, with copies of such records, statements and accounts of Debtors and such reconciliation’s to the Debts Purchased Account as Venture may require.

(ii)  

Venture may, at any time by notice to the Client, withdraw such appointment. Upon or at any time after such withdrawal Venture shall be entitled to debit the Current Account with the Collection Transfer Fee calculated in the manner specified in paragraph 17(i) of the Schedule.

(5)  

The Client shall at its own cost forthwith deliver to Venture or, if so required by Venture, directly to a bank account designated by Venture the actual cash, cheque, instrument or payment received by the Client in or on account of the discharge of each Debt. Until so delivered, the Client shall meanwhile hold such cash, cheque, instrument or payment in trust for Venture. The Client shall not deal with, negotiate or pay the same into any bank account unless so directed by Venture. If it be necessary for any instrument to be endorsed to enable Venture to receive payment then the Client shall endorse the same prior to its delivery to Venture. If so required, the Client shall give an indemnity to Venture’s bankers in respect of “account payee” cheques made payable to the Client and so endorsed.

(6)  

Any Transferred Goods shall be notified by the Client to Venture and shall be set aside and marked with Venture’s name as owner. Venture shall have the right without notice to the Client to take possession of and sell any Transferred Goods upon such terms and at such prices as Venture may in its absolute discretion decide.

(1)  

Credit Limits will be established by Venture only where Paragraph 5 of the Schedule specifies that the general nature of this Agreement is to be ‘With Bad Debt Protection’.

(2)  

Any Credit Limit may, in Venture’s absolute discretion, be increased, reduced or cancelled by Venture at any time. Any increase must be by written or electronic notice to the Client or by making the same available by electronic interrogation of Venture’s computer. Any such change shall take immediate effect, except that no reduction or cancellation shall affect any Debt which:

(i)  

shall have arisen from Goods Delivered before the service of notice on the Client of such reduction or cancellation; and

(ii)  

at the time of such service shall be (when totalled with all other Debts owing by the Debtor) within the Credit Limit.

(3)  

Where two or more Debts are owing by the same Debtor they shall be treated as falling within the Credit Limit in the order in which they are Notified.

(4)  

When a Credit Approved Debt shall be discharged by a Debtor then the next Debt in the order referred to in clause 13(3) shall become a Credit Approved Debt to the extent that it falls within a Credit Limit.

(5)  

When Credit Approved Debts and other Debts are owing by the same Debtor Venture shall have the right to allocate any payment by the Debtor or any credit or allowance granted by the Client to the Debtor or any sum by way of dividend or benefit in satisfaction of any Credit Approved Debt in priority to any other Debt, despite any contrary allocation by the Debtor or the Client.

(6)  

The Client shall not disclose to the Debtor or any third party the amount of or absence of any Credit Limit or the reasons for such Credit Limit.

(1)  

For the purpose of enabling the client to recover from H.M. Customs and Excise any value added tax included in any Credit Approved Debt unpaid for such period as would have enabled the Client to make a claim for value added tax bad debt relief but for its assignment to Venture, the following provisions shall apply.

(2)  

Venture may reassign the Debt to the Client for a consideration equal to the amount of value added tax included in the Debt and any dividend or benefit recovered. The Client also irrevocably authorises Venture in the name of the Client to submit a proof of debt in the estate of the relevant Debtor.

(3)  

The Client shall immediately upon receipt pay to Venture (or in Venture’s absolute discretion Venture may debit the Current Account with) and meanwhile hold in trust for Venture the amount of any dividend or other benefit received or receivable in reduction of such Debt.

(4)  

On the Transfer Date Venture may set off against the Purchase Price of an Outstanding Credit Approved Debt the amount of any value added tax included in the Debt.

(5)  

Any payment by Venture to the Client in respect of a Credit Approved Debt shall not discharge the consideration due from the Debtor to the Client for the taxable supply.

(1)  

Whether or not the Client is a body corporate, it shall provide for Venture:

(i)  

a signed copy of its and in addition such Associates’ audited balance sheet and accounts as Venture may require for each year or accounting reference period (as defined in the Companies Act 1985) ending during the currency of this Agreement, within six months of the end of such period (and shall promptly advise Venture of any change to its accounting reference period); and

(ii)  

such other accounts or statements of its financial position or affairs as Venture may at any time require.

(2)  

The Client, if so required by Venture, shall procure at its own expense that the Client’s auditors report directly to Venture on any matters relating to the financial affairs of the Client.

(3)  

The Client shall promptly provide Venture (at the Client’s expense) with such of the Financial Records included in the Related Rights or copies of them and of any other records or documents of the Client as Venture may at any time require or any other evidence of the performance of Contracts of Sale.

(4)  

Any official or duly authorised representative or agent of Venture may at any time (at the Client’s expense) enter upon any premises at which the Client carries on business and inspect and/or take copies of the Financial Records or other records or documents of the Client.

(5)  

The Client shall permit or procure the verification of Debts in such manner as shall be determined by Venture in its absolute discretion.

(1)  

The Client hereby irrevocably appoints Venture and the Directors and the Company Secretary and every other officer for the time being of Venture jointly and each of them severally to be the Client’s attorney in the name of the Client to execute such deeds or documents and to complete and endorse such instruments and to institute or defend such proceedings and to perform such other acts as Venture may consider requisite in order to perfect Venture’s title to any Debt or Related Rights and to secure performance of any of the Client’s obligations under this Agreement or under any Sale Contract or to obtain payment of Debts.

(2)  

Venture or its Directors and the Company Secretary and every other officer of Venture for the time being are empowered to appoint and remove at will any substitute attorney or agent for the Client in respect of any of the matters referred to in clause 17(1).

(3)  

The Client agrees to ratify and confirm whatever Venture or its Directors or Company Secretary or Officers substitutes and agents shall lawfully do pursuant to the above power of attorney.

(1)  

In addition to and without affecting any other undertaking given elsewhere in this Agreement the Client warrants and the same shall be deemed repeated on the delivery of each Notification, namely:

(i)  

that save as disclosed by the Client to Venture in writing no disposition, charge, trust or Encumbrance (whether created by the Client or otherwise) affects or may affect any of the Debts or Related Rights vesting in Venture and that no supplier to the Client has or may have any claim to any such Debt or Related Rights, whether or not by equitable tracing right;

(ii)  

that before entry into this Agreement the Client has disclosed to Venture every fact or matter known to the Client which the Client knew or should reasonably have known might influence Venture in any decision:

(a)  

whether or not to enter into this Agreement; or

(b)  

to accept any person as a guarantor or indemnifier for the Client’s obligations to Venture; or

(c)  

as to the terms of this Agreement; or

(d)  

as to the making of any Prepayment; or

(e)  

the designation of any Debt as a Credit Approved Debt.

(2)  

The Client undertakes to Venture:

(i)  

to disclose promptly to Venture any such fact or matter of which the Client becomes aware during the currency of this Agreement, including (without affecting the generality of clause 18(l)(ii)) any change or prospective change in the constitution or control of the Client or of any guarantor or indemnifier of the Client’s obligations to Venture or any prospective security right to be created by the Client affecting any of its assets;

(ii)  

immediately after notifying Venture of any Debt, to make an appropriate entry in the Client’s Financial Records regarding the sale of such Debt and in all cases in which the Client acts as agent of Venture pursuant to clause 12(4) to ensure that all accounts and records relating to Debtors are clearly marked that the Debts so recorded thereon have been sold to Venture;

(iii)  

to indemnify Venture against all costs and expenses (including administrative costs, legal fees, disbursements, opponent’s and third party’s costs) incurred by Venture in enforcing or attempting to enforce payment and collection of all Debts (other than Credit Approved Debts) and in settling or compromising any dispute or claim (whether justified or not) by a Debtor;

(iv)  

to pay to Venture all costs and expenses incurred by Venture in entering into this Agreement and in enforcing its terms or in obtaining a release or waiver in respect of the matters referred to in clause 18(l)(i);

(v)  

to indemnify Venture against all claims actions and demands made by any Debtor against Venture and all costs interest and expenses arising therefrom except where the same arises solely from the misconduct of Venture;

(vi)  

to ensure that all statements contained in and all signatures appearing on every order, invoice and other documents (including in particular all Notifications) supplied to Venture as evidence of or relating to the Debt are true and genuine;

(vii)  

that it will not transfer in whole or in part any of its business to any other person nor will it enter into any arrangements or agreements under which any other person issues invoices to customers of the business in respect of the Client’s business; and

(viii)  

to procure that none of the Client’s subsidiaries or its holding company (as defined in section 736 of the Companies Act 1985) or any of its associates (as defined in section 435 of the Insolvency Act 1986) will charge, sell, discount, factor, dispose of or otherwise deal with their debts (other than with Venture) without the prior written consent of Venture.

(3)  

The inclusion of any Debt in a Notification (other than a Notification pursuant to clause 6(3)) or in any report made to Venture pursuant to clause 12(4)(i)(d) shall be treated as a warranty by the Client that:

(i)  

the Sale Contract does not include any prohibition against the assignment of the Debt;

(ii)  

the Goods have been Delivered and the Debt is a legally binding obligation of the Debtor for the Notified amount and has arisen from a Sale Contract made in the ordinary course of the Client’s business specified in paragraph l(e) of the Schedule which:

(a)  

provides for the invoice to be expressed and payment to be made in a currency specified in paragraph l(f)(i) of the Schedule and on terms of payment (which shall be stated on each and every invoice) not more liberal than those specified in paragraph l(f)(ii) of the Schedule;

(b)  

is subject to the law of a country specified in paragraph l(f)(iii) of the Schedule;

(c)  

is not regulated by the Consumer Credit Act 1974; and

(d)  

is otherwise as approved by Venture

and the Client will not vary or attempt to vary any of the terms of any such Sale Contract without the prior written consent of Venture;

(iii)  

the Client has no obligations to the Debtor, other than under any Sale Contract and there exists no agreement between the Client and the Debtor for set-off or for abatement or whereby the amount of the Debt specified in the Notification may otherwise be reduced, except in accordance with the terms of the Sale Contract approved by Venture;

(iv)  

the Client is not in breach of any of its obligations under the relevant Sale Contract and the Debtor will accept the Goods and the invoice therefor without any dispute or claim, including claims for release of liability (or of inability to pay) because of force majeure or because of the requirements of any law wherever applying or of rules orders or regulations having the force of law in any jurisdiction; and

(v)  

the Debtor has an established place of business and is not an Associate, subsidiary, co-subsidiary, parent or associated company of the Client or under the same director or shareholder control as the Client.

(1)  

This Agreement shall commence on the Commencement Date and, unless terminated pursuant to clause 19(2), shall continue for the minimum period set out in paragraph 3 of the Schedule and thereafter until the expiry of the period of notice of termination (being not less than that specified in paragraph 4 of the Schedule) given by either party to the other in writing. Venture may serve notice of termination at any time. The Client may serve notice of termination at any time on or after the last day of such minimum period.

(2)  

If any of the following events happen, Venture shall have the right by notice to the Client to terminate this Agreement forthwith or at any time thereafter:

(i)  

the Client’s Insolvency or its calling any meeting of its creditors;

(ii)  

the Client’s Onset of Insolvency;

(iii)  

the dissolution of any partnership comprising the Client or any change in the constitution, composition or legal personality of the Client, whether by death, retirement, amalgamation, reconstruction, addition or otherwise;

(iv)  

the Client’s income or assets or any part thereof being seized under any execution legal process or distress for rent or the making or threat of a garnishee order on any person indebted to the Client or the attachment or attempt of attachment to Outstanding Debts or any amount owed by Venture to the Client;

(v)  

if any of the Client’s obligations to third parties for the repayment of borrowed money shall be declared due prior to their stated maturity dates by reason