WP 14.3               BILTRITE BICYCLES, INC.

Prepared by:
                          Notes Payable ­ Long Term Date:
                              December 31, 2007 Reviewed by:
Date:

Account 2110 Account 2130 Account 9701 Account 2030

10% Mortgage 12% Note Payable Interest Interest
Note Payable to Bank Two Expense Payable

1/1/07 Audited balances $70,000,000  $0 

1/2/07  Principal payment ($10,000,000) #
2/28/07 Issuance of note $45,000,000  C,*,&,E
2/1/07­12/1/07 Interest payments @ 10% $5,500,000  #
4/1/07­12/1/07 Interest accrual @ 12% $4,050,000  # $4,050,000 
12/31/07  December interest accrual $950,000  $950,000 
12/31/07 Audited balances $60,000,000  $45,000,000 
12/31/07 Reclassification of current portion ($10,000,000) ($4,500,000)
­­­­­­­­­­­­­­­ ­­­­­­­­­­­­­­­ ­­­­­­­­­­­­­­ ­­­­­­­­­­­­­­
$50,000,000  $40,500,000  $10,500,000  R $5,000,000  R
=============== =============== ============== ==============
Explanation of audit legends: WP 14 WP 14 WP 14 WP 14

C Confirmed details with lender Recalculation of 12/31/06 Interest Payable:
* Determined conformance with restrictive covenants
    for Bank Two note:   Bank Two:  .12 x $45,000,000 x 10/12     $4,500,000 
      $10,000,000 compensating balance requirement   Dollar Bank:  .10 x $60,000,000 x 1/12 = $500,000 
        In violation, given Audit Reclassification A (See WP 1.C) ­­­­­­­­­­­­­­
        Bank Two has agreed to waive temporarily per letter of 1/22/02 $5,000,000 
      Examined January deposits to Bank Two and determined ==============
        that Biltrite has restored the bank account deficiency. RJE C
      No further long­term borrowing
      Audit adjustments have reduced retained earnings below the 10% Mortgage Note Payable
        $45 million minimum level.  Bank Two has also agreed to 12% Note Payable to Bank Two
        waive temporarily (See copy of 1/22/08 letter attached)       Current Installments of Long­Term Notes

& Traced proceeds to bank statement
# Examined cancelled checks
R Recalculated
E Examined loan agreement (copy in permanent file)