Exhibit 10.1

Portions of this document have been redacted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Redacted portions are indicated with the notation “[***]”

PURCHASING AGREEMENT

This Purchasing Agreement (the “Agreement”) dated as of the      day of
                    , 2008, by and among the undersigned, ICOP Digital, Inc., a
Colorado corporation (hereinafter called “CLIENT”) and [***] (hereinafter called
“PURCHASER”). CLIENT and PURCHASER agree as follows:

 

1. PURPOSE OF AGREEMENT.

CLIENT desires to obtain financing in the amount of Five Million Dollars
($5,000,000.00), which may be amended from time to time at PURCHASER’S
discretion, by selling and assigning to PURCHASER Accounts (as hereinafter
defined) at a discount below face value.

 

2. DEFINITIONS.

“Account” means and includes all of CLIENT’S now existing or hereafter arising
i) accounts as defined under the UCC, and ii) rights to payment for goods,
merchandise, or inventory sold, rented, or leased, or for services rendered,
including without limitation, those which are not evidenced by instruments or
chattel paper, and whether or not they have been earned by performance, all
collateral security and guarantees of any kind given by any obligor with respect
to any of the foregoing, and all goods returned to or reclaimed by Client that
correspond to any of the foregoing and all proceeds of the foregoing.

“Advances” means all funds remitted to CLIENT by Purchaser and at CLIENT’S
request from the sale and assignment of CLIENT’S Accounts to Purchaser prior to
the collection thereof by PURCHASER.

“Alternate Base Rate” is defined as the greater of (1) LIBOR plus 2.75% or
(2) Prime Rate.

“Customer” means CLIENT’S customer or the account debtor.

“Collateral” means the intangible or tangible property given as security to
PURCHASER by CLIENT for any Obligations of CLIENT to PURCHASER as defined in
Section 5.

“Dispute” means any claim by a Customer against CLIENT, of any kind whatsoever,
valid or invalid, that reduces or potentially reduces the amount collectible
from Customer by PURCHASER.

“Ledger Debt” means any debt, liability or obligation now or hereafter owing by
Client to others, including any present or future client of Purchaser, which
Purchaser may have obtained or may obtain by purchase, assignment, negotiation,
discount, participation or otherwise.

“LIBOR” means, at any time, an interest rate per annum equal to the interest
rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) as
published in the “Money Rates” section of The Wall Street Journal (or another
national publication selected by PURCHASER) as the one month London Interbank
Offered Rate for United States dollar deposits or such other language (or, if
such page shall cease to be publicly available or, if the
information/description contained on such page, in PURCHASER’s sole judgment,
shall cease to accurately reflect such London Interbank Offered Rate, the such
rate as reported by any publicly available recognized source of similar market
data selected by PURCHASER that, in PURCHASER’s reasonable judgment, accurately
reflects such London Interbank Offered Rate) but in no event shall LIBOR be less
than 3%.

“Obligations” means all present and future Obligations owing by Client to
PURCHASER of every kind and nature, whether or not for the payment of money,
whether or not evidenced by any note or other instrument, whether direct or
indirect, absolute or contingent, due or to become due, joint or several,
primary or secondary, liquidated or unliquidated, secured or unsecured, original
or renewed or extended, whether presently contemplated or not, regardless of how
the same arise, or by what instrument, agreement, or book account they may be
evidenced, or whether evidenced by any instrument, agreement or book account,
whether arising before, during or after the commencement of any federal
Bankruptcy Case in which Client is a debtor, including but not limited to,
Ledger Debt, fees and expenses, Obligations arising pursuant to guaranties,
letters of credit or acceptance transactions or any other financial
accommodations.

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Portions of this document have been redacted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Redacted portions are indicated with the notation “[***]”

 

“Prime Rate” means, at any time, the rate of interest noted in The Wall Street
Journal, Money Rates section, as the “Prime Rate” (currently defined as the base
rate on corporate loans posted by at least 75% of the nation’s thirty
(30) largest banks). In the event that The Wall Street Journal quotes more than
one rate, or a range of rates, as the Prime Rate, then the Prime Rate shall mean
the average of the quoted rates. In the event that The Wall Street Journal
ceases to publish a Prime Rate, then the Prime Rate shall be the average of the
three (3) largest U.S. money center commercial banks, as determined by
PURCHASER.

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of Florida.

All terms used in this Agreement which are defined in the UCC shall be construed
and defined in accordance with the meanings and definition ascribed to such
terms under the UCC, unless otherwise defined herein.

 

3. PURCHASE: GENERAL TERMS.

3.1 Purchases of Accounts. CLIENT shall from time to time sell, transfer and
assign all of its Accounts to PURCHASER and said Accounts shall be identified by
separate and subsequent written assignments on a form to be provided to CLIENT
by PURCHASER. CLIENT agrees to offer and PURCHASER agrees to buy Accounts from
CLIENT at a discount of three quarters of one percent (0.75%) (“Purchasing Fee”)
from the face value of each Account for every thirty (30) days an Account is
outstanding. The Purchasing Fee shall be calculated from the date of purchase by
PURCHASER allowing for three (3) business days for collection.

3.2 Approval. PURCHASER reserves the right not to purchase an Account unless
such Account is first submitted to PURCHASER by CLIENT for approval. PURCHASER
is not obligated to buy any Account from CLIENT.

3.3 Sole Property. Upon the purchase of an Account by PURCHASER, the Account and
all payments on said Account shall be the sole property of PURCHASER. Any
interference by CLIENT with this payment may result in civil and/or criminal
liability.

3.4 Advances. PURCHASER may, in its sole discretion, fund to CLIENT up to eighty
five percent (85%) of the gross invoice amount of domestic Accounts (i) with
respect to which less than 90 days have elapsed since the date of original
invoice, (ii) but not including all Accounts owed by a Customer if the aggregate
outstanding dollar amount of such Accounts not considered as eligible under
clause (i) above is equal to or greater than 25%, and (iii) and not including
all Accounts owed by a Customer if the amount of returns, allowances, credit
losses, discounts and other offsets of such Accounts on an historic basis is
greater than 4%. Invoices shall be supported by purchase orders and delivery
receipts to be eligible for advances. PURCHASER will purchase Accounts on a full
dominion, full notification basis and will be handled through a bank lockbox
account controlled by PURCHASER. Maximum selling terms shall not exceed net
sixty (60) days.

3.5 Reserve. PURCHASER may reserve and withhold an amount in a reserve account
equal to Fifteen percent (15%) of the gross invoice amount of all Accounts
purchased (“Reserve”). The Reserve will be deducted by PURCHASER from the
Accounts at the time of purchase. Said Reserve may be held by PURCHASER and
applied by PURCHASER against charge-backs or any Obligations of CLIENT to
PURCHASER. In Purchaser’s sole discretion and assuming no Event of Default
exists, the Reserve releases will be made available by PURCHASER to CLIENT each
business day. Reserve releases are made only on Accounts that are paid by
Customers or Accounts that are charged back, repurchased or otherwise settled by
CLIENT in full. Reserve is not due and payable to CLIENT until any and all
potential Obligations owing by CLIENT to PURCHASER or any reasonably anticipated
claims are fully paid and satisfied. CLIENT grants to PURCHASER a security
interest in this Reserve, which secures all Obligations. PURCHASER retains the
right in its sole and absolute discretion, and in respect of which PURCHASER
shall have no liability, to revise said Reserve from time to time if in
PURCHASER’S judgment it is necessary to protect PURCHASER with regard to any
Obligations owing by CLIENT to PURCHASER, or to protect PURCHASER against
possible returns, claims or defenses of CLIENT’S Customers or any other
contingencies. If an Event of Default has occurred and is continuing, or, in the
event CLIENT shall cease selling Accounts to PURCHASER, PURCHASER shall not pay
the amount in the Reserve to Client until all Accounts have been collected or
PURCHASER has determined, in its sole discretion, that it will make no further
efforts to collect any Accounts and all Obligations due PURCHASER hereunder have
been paid.

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Portions of this document have been redacted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Redacted portions are indicated with the notation “[***]”

 

3.6 Fees.

All fees due hereunder are fully earned and nonrefundable on the date incurred.
Such fees shall be charged to the Reserve as an accommodation to Client but
shall remain due and payable by Client at all times.

 

  (a) Base Index Fee. It is agreed by and between CLIENT and PURCHASER that
CLIENT shall pay PURCHASER an additional fee based on the daily balance of
outstanding advances on Accounts multiplied by the greater of (a) the sum of the
Alternate Base Rate plus 2.5% or (b) 8.0%. The fee shall be computed on the
basis of actual days elapsed and a 360-day year. The Alternate Base Rate in
effect shall be determined by PURCHASER on a daily basis, with adjustments to
such Alternate Base Rate to be made on the same date as any change in the
Alternate Base Rate is determined by PURCHASER, which index shall be used in
computing the Base Fee which is payable until the next announced change in the
Alternate Base Rate. Such fee will be calculated monthly and charged against
CLIENT’S Reserve as of the last day of each month for the month then ended.

 

  (b) Minimum Purchasing Fees. It is agreed by and between CLIENT and PURCHASER
that, in consideration of the facility granted herein; CLIENT will sell to
PURCHASER a minimum of Two Million Four Hundred Thousand and No/100 Dollars
($2,400,000) of Accounts (“Quarterly Minimum Accounts”) per calendar quarter. In
the event CLIENT fails to sell to PURCHASER the minimum Accounts required
herein, CLIENT shall remit to PURCHASER an amount equal to the following: the
Quarterly Minimum Accounts less the gross face amount of Accounts sold to
PURCHASER hereunder for such quarter, multiplied by the Purchasing Fee, assuming
a thirty (30) day collection period. Such fee shall be calculated quarterly and
charged to the Reserve on the last day of each quarter.

 

  (c) Unused Line Fee. N/A

 

  (d) Misdirected Payment Fee. It is agreed by and between CLIENT and PURCHASER
that CLIENT shall pay PURCHASER the greater of (i) One Thousand and No/100
Dollars ($1,000); or (ii) fifteen percent (15%) of the amount of any payment on
account of an Account, which has been received by CLIENT and not delivered in
kind to PURCHASER within two (2) business days following the date of receipt by
CLIENT.

 

  (e) Missing Notation Fee. It is agreed by and between CLIENT and PURCHASER
that CLIENT shall pay PURCHASER the greater of (i) One Thousand and No/100
Dollars; or (ii) fifteen percent (15%) of the amount of any invoice payment
which has been billed or received by PURCHASER, which does not have the proper
[***] assignment language as given by [***].

3.7 Repurchase of Accounts. CLIENT will repurchase from PURCHASER i) any and all
Accounts not paid within ninety (90) days from date of invoice, and ii) any
Account that Purchaser requests that Client repurchase. Client shall repurchase
such Accounts at One Hundred Percent (100%) of the gross invoice amounts of such
Account in one of the following manners or combination thereof at PURCHASER’S
option: (1) By submitting new Accounts, (2) By deducting said amount from the
Reserve release due CLIENT, or (3) By payment from CLIENT. All short payments,
discounts and any other Obligations CLIENT may have to PURCHASER may, at
Purchaser’s election, be handled in the same manner. Notwithstanding the
repurchase of an Account by CLIENT, any such Account so repurchased shall remain
as Collateral in which the security interest of PURCHASER shall continue as
provided for under this Agreement.

3.8 Reimbursable Expenses. PURCHASER incurs certain routine expenses and audit
fees in the course of performing its functions with respect to the Accounts, a
portion of which PURCHASER shall be entitled to deduct from the Reserve account.
However, PURCHASER shall not be entitled to any deductions for routine expenses
not specifically listed in this paragraph. The following is an itemization of
the routine deductions to which PURCHASER shall be entitled: all out-of-pocket
travel expenses and any amounts charged to Purchaser by any field examiners for
each field examination performed, long distance telephone charges, legal fees
incurred, postage, credit reports, wire transfers fees and charges, overnight
mail delivery, UCC and other searches (including tax lien searches), filing
fees, ACH transfer fees and charges, fees for returned items, bank charges and
over advance fees.

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Portions of this document have been redacted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Redacted portions are indicated with the notation “[***]”

 

3.9 Required Forms. When CLIENT offers a schedule of accounts to PURCHASER for
sale, PURCHASER shall receive an original invoice and a copy thereof, a copy of
the bill of lading, shipping document and proof of delivery, and contract,
purchase order, and/or a purchase order number which corresponds with said
invoice(s), as appropriate to the business of CLIENT. Each schedule of accounts
offered shall be in an aggregate amount of not less than $40,000.00 and no
invoices listed on said schedule shall be dated more than ten (10) days past its
original date of issue.

3.10 Notification. PURCHASER is hereby authorized to notify any Customer that
PURCHASER has purchased the Customer’s Account and that the Customer must make
payments directly to PURCHASER. Client shall notify each Customer that it has
sold and assigned each Account to Purchaser and shall direct each Customer to
make all payments on Accounts to Purchaser.

3.11 Maximum Account. The total amount of Advances outstanding shall not exceed
the sum of Five Million Dollars ($5,000,000.00), except PURCHASER may purchase
additional Accounts from or advance additional sums to CLIENT as PURCHASER may
elect from time to time at PURCHASER’S sole discretion.

 

4. TERMINATION.

This Agreement shall continue in effect for eighteen (18) months from the
initial purchase date hereof (the “Termination Date”) with annual renewals
thereafter, unless terminated as follows:

(a) PURCHASER may terminate the Agreement at any time after the date of this
Agreement by giving CLIENT sixty (60) days prior written notice of such
termination; or

(b) CLIENT may terminate this Agreement on the Termination Date or any Renewal
Termination Date by giving PURCHASER sixty (60) days prior written notice of
such termination, by certified mail; or

(c) Upon the occurrence of any Event of Default by CLIENT, PURCHASER may
terminate this Agreement immediately, without notice. Upon the effective date of
termination, whether such termination is pursuant to the occurrence of an Event
of Default or otherwise, all Obligations shall become immediately due and
payable without notice or demand.

No termination of this Agreement, however occurring, shall affect Obligations of
CLIENT or the rights, powers and remedies of PURCHASER under this Agreement or
the security interest granted PURCHASER hereunder with respect to existing or
future Collateral, until all Accounts have been paid to PURCHASER by Customers
or CLIENT and until all Obligations of CLIENT to PURCHASER are paid or otherwise
satisfied in full.

 

5. GRANT OF SECURITY INTEREST.

5.1 In addition to the rights of ownership that PURCHASER acquires in those
accounts that PURCHASER advances against under this Agreement, and in order to
secure the repayment of any and all of Client’s Obligations to PURCHASER, CLIENT
hereby grants PURCHASER a security interest in all of CLIENT’S present and
future accounts, instruments, documents, chattel paper, general intangibles,
deposit accounts, investment property, goods, inventory, equipment, the Reserve,
commercial tort claims, letter of credit rights, letters of credit and
inventory, as well as the proceeds thereof and all books, records, reports,
memoranda, and/or data compilations, in any form (including, without limitation,
corporate and other business records, customer lists, credit files, computer
programs, printouts and any other computer materials and records), pertaining to
any of the foregoing (hereafter collectively called “Collateral”).

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Portions of this document have been redacted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Redacted portions are indicated with the notation “[***]”

 

5.2 CLIENT will cooperate with PURCHASER in obtaining a control agreement in
form and substance satisfactory to PURCHASER with respect to Collateral
consisting of deposit accounts, investment property; letter-of-credit rights,
and electronic chattel paper. CLIENT shall deliver to PURCHASER the original of
all Collateral consisting of instruments, documents, letter of credit or other
negotiable collateral. Client agrees to comply with all appropriate laws in
order to perfect Purchaser’s security interest in and to the Collateral and to
execute such documents as Purchaser may require from time to time. Client
authorizes Purchaser to file at such times and places as Purchaser may designate
such financing statements, continuations and amendments thereto as are necessary
or desirable to perfect Purchaser’s rights in and give notice of Purchaser’s
purchase of the Accounts and Purchaser’s security interest in the Collateral
under the UCC in effect in any applicable jurisdiction. Purchaser may at any
time and from time to time file financing statements, continuation statements
and amendments thereto that describe the Collateral as “all assets” of Client or
words of similar effect and which contain any other information required by Part
5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any
financing statement, continuation statement or amendment, including whether
Client is an organization, the type of organization and any organization
identification number issued to Client. Client agrees to furnish any such
information to Purchaser promptly upon request. Any such financing statements,
continuation statements or amendments may be signed by Purchaser on behalf of
Client or filed by Purchaser without the signature of Client and may be filed at
any time in any jurisdiction. Client acknowledges that it is not authorized to
file any financing statement or amendment or termination statement with respect
to any financing statement naming Client as the debtor and Purchaser as the
secured party without the prior written consent of Purchaser, and Client agrees
that it shall not do so without the prior written consent of Purchaser. Client
hereby ratifies any UCC financing statements previously filed by Purchaser.

 

6. GENERAL REPRESENTATIONS, WARRANTIES, AND COVENANTS.

CLIENT warrants and/or covenants that during the term of this Agreement and so
long as any Obligations to PURCHASER remain unpaid that:

(a) CLIENT is a corporation duly organized, existing, and in good standing under
the laws of the state or country of its incorporation, as represented at the
beginning of this Agreement, and is qualified or licensed to do business in all
other countries, states and provinces in which the laws thereof require CLIENT
to be so qualified and/or licensed;

(b) CLIENT has not, during the five (5) years preceding the Agreement, been at
any other location or known as or used any other corporate or fictitious name,
except as disclosed to PURCHASER in writing.

(c) CLIENT has the corporate power and authority to make, deliver and perform
this Agreement and the other agreements hereunder and has taken all corporate
action necessary to be taken by it to authorize the sale of its Accounts on the
terms and conditions of this Agreement;

(d) CLIENT’S business is solvent;

(e) CLIENT does business under no trade or assumed names except as indicated
below. These names are a trade name and/or trade style by which CLIENT will or
may identify and sell certain of its products and under which CLIENT will or may
conduct a portion of its business, and are not an independent corporation or
other legal entity. PURCHASER is hereby authorized to receive, endorse and
deposit any and all checks sent to it in payment of such Accounts including such
checks as are payable to any of the trade styles or trade names. Accounts
invoiced in the name of any trade name or trade style are subject to all of the
terms and conditions of this Agreement with the same force and effect as if they
were in our corporate name.

Trade names or Trade styles: ICOP, ICOP Digital

(f) CLIENT has and will file all federal, state and local tax returns and other
reports CLIENT is required by law to file, maintain adequate reserves for the
payment of all taxes, assessments, governmental charges, and other similar
charges, and pay promptly, when due, all such taxes, assessments, and other
charges and will provide to PURCHASER proof of such tax payments as PURCHASER
may request.

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Portions of this document have been redacted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Redacted portions are indicated with the notation “[***]”

 

(g) Each Customer’s business is solvent to the best of CLIENT’S information and
knowledge;

(h) At the time of purchase by PURCHASER, CLIENT is the lawful owner of and has
good and undisputed title to the Accounts purchased by PURCHASER;

(i) Each Account offered for sale to PURCHASER is an accurate and undisputed
statement of Obligations by Customer to CLIENT for a sum certain which is due
and payable in 30 days or less or on such other terms, as are acceptable to
PURCHASER in its discretion, which are expressly set forth on the face of all
invoices;

(j) Each Account offered for sale to PURCHASER is an accurate statement of a
bona fide sale, delivery and acceptance of merchandise or performance of service
by CLIENT to Customer and is not subject to any Dispute, offset, counterclaim or
deduction of any kind or nature;

(k) CLIENT does not own, control or exercise dominion over, in any way
whatsoever, the business of any Customer;

(l) All financial records, statements, books or other documents shown to
PURCHASER by CLIENT at any time, either before or after the signing of this
Agreement are true and accurate;

(m) CLIENT shall not, under any circumstances or in any manner whatsoever,
interfere with any of PURCHASER’S rights under this Agreement;

(n) CLIENT shall offer all of its Accounts to PURCHASER and will not purchase or
sell Accounts except to PURCHASER for the period of this Agreement;

(o) All of the Collateral is owned by CLIENT alone, free and clear of all liens,
claims, security interest(s) or encumbrances except those granted to PURCHASER
or as set forth on Schedule 6 hereto and CLIENT will not transfer, pledge or
give a security interest in nor permit any lien upon any of its Collateral to
any other party;

(p) CLIENT shall not change or modify the terms of an original Account with any
Customer unless PURCHASER first consents to such change in writing. For example,
CLIENT may not extend credit to a Customer beyond thirty days without prior
written consent from PURCHASER;

(q) CLIENT will maintain such insurance covering CLIENT’S business and/or the
property of CLIENT’S Customers as is customary for businesses similar to the
business of CLIENT and, at the request of PURCHASER, name PURCHASER as loss
payee of such insurance;

(r) CLIENT will notify PURCHASER in writing prior to any proposed or actual
change in CLIENT’S place of business or state of formation, any change in
CLIENT’S principal executive office or the office or offices where CLIENT’S
books and records concerning Accounts are kept or CLIENT’S name, location,
identity, legal entity or corporate structure;

(s) CLIENT will, when requested by PURCHASER, execute any written instruments
and do any other things necessary to effectuate more fully the purposes and
provisions of this Agreement;

(t) CLIENT will furnish PURCHASER with financial statements and such other
information as reasonably requested by PURCHASER from time to time;

(u) CLIENT will promptly notify PURCHASER of any attachment or any other legal
process levied against CLIENT or any of CLIENT’S Customers known to CLIENT;

(v) CLIENT will not pledge the credit of PURCHASER to any person or business for
any purpose whatsoever;

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Portions of this document have been redacted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Redacted portions are indicated with the notation “[***]”

 

(w) CLIENT will, immediately upon sale of Accounts to PURCHASER, make proper
entries on its books and records disclosing the absolute sale of said Accounts
to PURCHASER;

(x) CLIENT’S Federal Employment Identification Number is 84-1493152.

(y) CLIENT agrees to execute any and all forms (i.e. Forms 8821 and/or 2848)
that PURCHASER may require in order to enable PURCHASER to obtain and receive
tax information issued by the Department of the Treasury, Internal Revenue
Service, or receive refund checks.

(z) CLIENT will make each payment required hereunder, and/or under any
instrument delivered hereunder, without setoff, deduction or counterclaim.

(a)(a) CLIENT shall maintain a Tangible Net Worth of at least Five Million
Dollars ($5,000,000.00) at all times. As used herein, “Tangible Net Worth” will
be defined, as of any date, as Total Assets less Intangible Assets including
goodwill, trademarks, patents, deferred tax credits and customer lists including
due from affiliates and related companies and other Intangible Assets at the
discretion of [***] less Total Liabilities plus any Subordinated Debt measured
on a monthly basis.

 

7. DISPUTED ACCOUNTS.

7.1 Notice and Settlement. CLIENT must immediately notify PURCHASER of any
Disputes between Customer and CLIENT. PURCHASER may settle any Dispute directly
with Customer. Such settlement does not relieve CLIENT of final responsibility
for payment of such Account.

7.2 Payment. CLIENT will immediately pay to PURCHASER the full amount of any
Account subject to a Dispute of any kind whatsoever.

7.3 Charge-Back. If CLIENT does not fully settle a Dispute with immediacy,
PURCHASER may, in addition to any other remedies under this Agreement, charge or
sell back the Account to CLIENT.

7.4 Invoicing Error. Mistaken, incorrect and erroneous invoicing, submitted by
CLIENT to PURCHASER may, at PURCHASER’S discretion, be deemed an Account subject
to a Dispute and be charged-back to CLIENT.

7.5 Charge-Back Statement. PURCHASER shall identify in writing all charge-backs
and provide to CLIENT a written statement thereof. Said statement shall be
deemed an “ACCOUNT STATED” between CLIENT and PURCHASER as to said charge-backs
except for any errors of which CLIENT shall have notified PURCHASER in writing
within fifteen (15) days after the date of receipt by CLIENT of said statement.

 

8. STATEMENTS/DISPOSAL OF DOCUMENTS.

8.1 Accounting Statements. Purchaser shall provide Client with information on
the Accounts and a monthly reconciliation of the purchasing relationship
relating to billing, collection, Reserve and Advances. All of the foregoing
shall be in a format and in such detail, as Purchaser, in its sole discretion,
deems appropriate. Purchaser’s books and records shall be admissible in evidence
without objection as prima facie evidence of the status of the Accounts and
Reserve between Purchaser and Client. Each statement, report, or accounting
rendered or issued by Purchaser to Client shall be deemed conclusively accurate
and binding on Client unless within thirty (30) days after the date of issuance
Client notifies Purchaser to the contrary in writing, setting forth with
specificity the reasons why Client believes such statement, report, or
accounting is inaccurate, as well as what Client believes to be correct
amount(s) therefore. If the Client gives notice of its disagreement with
Purchaser’s statement, all matters in such statement that are not objected to in
Client’s notice, shall be deemed conclusively accurate and binding on Client.
Client’s failure to receive any monthly statement shall not relieve it of the
responsibility to request such statement and Client’s failure to do so shall
nonetheless bind Client to whatever Purchaser’s records would have reported.

8.2 Disposal Of Documents. CLIENT authorizes PURCHASER, in its sole discretion,
to make computer images of or to dispose of any documents, schedules, invoices
or other papers delivered to PURCHASER in connection with this Agreement at any
time after said documents, schedules, invoices or other papers have been
delivered to PURCHASER.

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Portions of this document have been redacted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Redacted portions are indicated with the notation “[***]”

 

9. HOLD IN TRUST.

CLIENT agrees that even though PURCHASER shall use its best efforts to notify
all of CLIENT’s Customers of the sale and assignment by CLIENT to PURCHASER of
certain Accounts, some payments may be sent directly to CLIENT. All payments on
Accounts are the sole and exclusive property of PURCHASER. In such circumstance
CLIENT promises not to negotiate said check or other forms of payment, but to
hold same in trust and safekeeping for the benefit of PURCHASER and to turn over
to PURCHASER the payment received immediately in kind.

In the event CLIENT receives a check or other form of payment owing to
PURCHASER, but some portion of said payment is owing to CLIENT, CLIENT agrees to
turn over said payment in kind to PURCHASER, and PURCHASER will remit CLIENT’S
portion thereof, provided that there are no Obligations outstanding and CLIENT
is not in Default with PURCHASER.

 

10. FINANCIAL RECORDS; EXAMS.

10.1 CLIENT shall keep books of accounts and prepare financial statements and
shall cause to be furnished to PURCHASER the following (all of the foregoing and
following to be kept and prepared in accordance with generally accepted
accounting principles): (i) as soon as available, but not later than ninety
(90) days after the close of each fiscal year of CLIENT hereafter, reviewed
financial statements of CLIENT, including balance sheet, income statement, as at
the end of such year provided by a firm of independent certified public
accountants reasonably acceptable to PURCHASER and selected by CLIENT; (ii) as
soon as available, but not later than forty-five (45) days after the end of each
quarter hereafter, an unaudited balance sheet, a year-to-date income statement,
fairly presenting the financial position and results of operations of CLIENT for
such period; and (iii) such other data and information (financial and otherwise)
as PURCHASER, from time to time, may reasonably request, bearing upon or related
to the Collateral, CLIENT’S financial condition and/or results of operations.

10.2 PURCHASER (by any of its officers, employees or agents) shall have the
right, at any time during CLIENT’S usual business hours, to inspect any of the
business locations or premises of CLIENT, the Collateral, all books and records
related to the Accounts or the collection thereof, as well as those related to
CLIENT’S general business and financial condition, and the right at any time to
discuss CLIENT’S affairs and finances and the Accounts with any attorney,
accountant, creditor or Customer of CLIENT. CLIENT shall pay to PURCHASER a fee
of $900 per day for any such inspections. Absent an Event of Default, PURCHASER
may conduct no more than one such inspection per calendar quarter; provided that
after the occurrence and during the continuance of an Event of Default,
PURCHASER may conduct as many such examinations at CLIENT’s expense as PURCHASER
may choose.

 

11. CONDITIONS PRECEDENT

11.1 Conditions of Purchase. The obligation of PURCHASER to make any purchase of
Accounts under the Agreement on the closing date is subject to the satisfaction
of the following conditions precedent: (a) PURCHASER shall have received and
found satisfactory, results of UCC, tax lien, pending litigation and judgment
record searches on CLIENT; (b) All UCC financing statements required or, in
PURCHASER’S opinion, advisable to be filed in order to create, in favor of the
PURCHASER, a perfected lien on the Collateral shall have been properly filed in
each office in each jurisdiction in which such filings are required or, in
PURCHASER’S opinion, advisable; (c) PURCHASER shall have received and found
satisfactory, results of due diligence reports on CLIENT’S principals and
guarantors; (d) PURCHASER shall have received and found satisfactory, results of
an on-site examination of CLIENT; (e) PURCHASER shall have satisfactory response
to pre-funding Account verifications; (f) PURCHASER shall have received from
CLIENT, signed notification letters to Customers; (g) PURCHASER shall have
completed its due diligence examination of CLIENT and formally approved the
credit; and (h) All other documents and legal matters in connection with the
transaction contemplated by the Agreement and the Other Agreements shall be
satisfactory in form and substance to PURCHASER and its counsel.

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Portions of this document have been redacted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Redacted portions are indicated with the notation “[***]”

 

12. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT.

12.1 Events of Default. The occurrence of any one or more of the following
events shall constitute an “Event of Default”: (a) CLIENT shall receive payment
on any Account and fail to deliver said payment to PURCHASER; (b) CLIENT or any
person that is a guarantor of CLIENT shall fail to pay any Obligations to
PURCHASER when due and payable; (c) CLIENT shall breach any term, provision,
covenant, warranty or representation under this Agreement, or under any other
agreements or contracts between CLIENT and PURCHASER or obligation of CLIENT to
PURCHASER; (d) the appointment of any receiver or trustee of all or a
substantial portion of the assets of CLIENT; (e) CLIENT shall become insolvent
or unable to pay debts as they mature, shall make a general assignment for the
benefit of creditors or shall voluntarily file under any bankruptcy or similar
law; (f) any involuntary petition in bankruptcy shall be filed against CLIENT
and not be dismissed or stayed within 60 days; (g) any levies of attachment,
executions, tax assessments or similar process shall be issued against the
Collateral and shall not be released within 10 days thereof; (h) any financial
statements, profit and loss statements, borrowing certificates or schedules, or
other statements furnished by CLIENT to PURCHASER prove false or incorrect in
any material respect; (i) CLIENT shall refuse to provide any financial
statements, profit and loss statements, borrowing certificates or schedules, or
other statements required by PURCHASER; (j) any guarantor of the liabilities and
Obligations shall be in default under any agreements to which it is a party, or
demand is made on any such guarantor under the terms of any guaranty to which
guarantor is a party; or (k) there shall occur any change in the ownership or
control of CLIENT (where “control” is the power to direct the operation and/or
management of CLIENT through direct or indirect ownership of voting or
membership shares or otherwise).

12.2 Remedies. Upon a Default, Purchaser may, without demand or notice to
Client, exercise all rights and remedies available to it under this Agreement,
under the UCC or otherwise, including without limitation, terminating this
Agreement and declaring all Obligations immediately due and payable provided,
however, if the Event of Default is described under clauses (e) or (f) of
Section 12.1, such termination and acceleration shall automatically occur
without any notice, demand or presentment of any kind. Without notice to or
demand upon Client or any other Person, Purchaser may make such payments and do
such acts as Purchaser considers necessary or reasonable to protect its security
interest in the Collateral. Without limiting the foregoing, PURCHASER shall have
(a) the right to open mail to CLIENT, (b) collect any and all amounts due CLIENT
from Customers, (c) The right to (i) enter upon the premises of CLIENT, without
any obligation to pay rent, through self-help and without judicial process,
without first obtaining a final judgment or giving CLIENT notice and opportunity
for a hearing on the validity of PURCHASER’S claim, or any other place or places
where the Collateral is located and kept, and remove the Collateral there from
to the premises of PURCHASER or any agent of PURCHASER, for such time as
PURCHASER may desire, in order to effectively collect or liquidate the
Collateral, and/or (ii) require CLIENT to assemble the Collateral and make it
available to PURCHASER at a place to be designated by PURCHASER, in its sole
discretion; (d) The right to (i) demand payment of the Accounts; (ii) enforce
payment of the Accounts, by legal proceedings or otherwise; (iii) exercise all
the CLIENT’S rights and remedies with respect to the collection of the Accounts;
(iv) settle, adjust, compromise, extend or renew the Accounts; (v) settle,
adjust or compromise any legal proceedings brought to collect the Accounts;
(vi) if permitted by applicable law, sell or assign the Accounts;
(vii) discharge and release the Accounts; (viii) take control, in any manner, of
any item of payment or proceeds; (ix) prepare, file and sign CLIENT’S name on
any proof of claim in bankruptcy or similar document against any Account Debtor;
(x) prepare, file and sign CLIENT’S name on any notice of lien, assignment or
satisfaction of lien or similar document in connection with the Accounts;
(xi) do all acts and things necessary, in PURCHASER’S sole discretion, to
fulfill CLIENT’S Obligations under this Agreement; (xii) endorse the name of
CLIENT upon any chattel paper, document, instrument, invoice, freight bill, bill
of lading or similar document or agreement relating to the Accounts and
inventory; (xiii) use CLIENT’S stationery and sign the name of CLIENT to
verifications of the Accounts and notices thereof to Account Debtors; (xiv) use
the information recorded on or contained in any data processing equipment and
computer hardware and software relating to the Accounts and inventory to which
CLIENT has access; (xv) require CLIENT to repurchase the uncollected Accounts;
(xvi) cease purchasing Accounts from CLIENT; and (xvii) reduce the advance rate
on eligible Accounts; (e) The right to (i) sell or to otherwise dispose of all
or any Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale or sales, with such notice as may
be required by law, in lots or in bulk, for cash or on credit, all as PURCHASER,
in its sole discretion, may deem advisable; (ii) adjourn such sales from time to
time, with or without notice; (iii) conduct such sales on CLIENT’S premises or
elsewhere and use CLIENT’S premises without charge for such sales for such time
or times as PURCHASER may see fit; (iv) use, in connection with any assembly or
disposition of the Collateral, without charge, CLIENT’S labels, patents,
copyrights, rights of use of any name, trade secrets, trade names, trademarks
and advertising matter, or any

--------------------------------------------------------------------------------

Portions of this document have been redacted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Redacted portions are indicated with the notation “[***]”

 

property of a similar nature, as it pertains to the Collateral used by CLIENT
and PURCHASER may purchase all or any part of the Collateral at public or, if
permitted by law, private sale and, in lieu of actual payment of such purchase
price, may set off the amount of such price against the Obligations. The
proceeds realized from the sale of any Collateral shall be applied first to the
reasonable costs, expenses and attorneys’ fees and expenses incurred by
PURCHASER for collection and for acquisition, completion, protection, removal,
storage, sale and delivery of the Collateral and second to Obligations owed
PURCHASER by CLIENT. If any deficiency shall arise, CLIENT shall remain liable
to PURCHASER therefore.

 

13. MISCELLANEOUS.

 

  13.1 Expenses and Attorneys’ Fees.

(a) CLIENT has paid PURCHASER a non-refundable deposit in the amount of Ten
Thousand Dollars ($10,000.00) to cover any and all expenses, including
underwriting and reasonable attorney’s fees that PURCHASER may incur in
connection with the documentation of this transaction.

(b) CLIENT agrees to pay all costs and expenses (including without limitation
the reasonable attorney’s fees of PURCHASER’S legal counsel) incurred by
PURCHASER in connection with the interpretation and enforcement of PURCHASER’S
rights under this Agreement, any other documents executed in connection with
this Agreement, and all amendments, modifications and supplements thereof or
thereto.

13.2 Power of Attorney. In order to carry out this Agreement, CLIENT irrevocably
appoints PURCHASER, or any person designated by PURCHASER, its special attorney
in fact, or agent, with power of substitution, and with power to: (a) strike out
CLIENT’S address on all invoices, accounts, etc. mailed to Customers and insert
PURCHASER’S address; (b) receive, open and dispose of all mail addressed to
CLIENT or to CLIENT’S fictitious trade name via PURCHASER’S address; (c) endorse
the name of CLIENT or CLIENT’S fictitious trade name on any checks or other
evidences of payment that may come into the possession of PURCHASER, or pursuant
to an Event of Default, on any other documents relating to any of the Accounts
or Collateral; (d) in CLIENT’S name, or otherwise, demand, sue for, collect, and
give releases for any and all monies due or to become due on Accounts;
(e) compromise, prosecute, or defend any action, claim or proceeding as to said
Accounts; (f) upon the happening of an Event of Default notify the Post Office
authorities to change the address for delivery of mail addressed to CLIENT to
such address as PURCHASER may designate; (g) sell in whole or in part for cash,
credit or property to others or to itself at any public or private sale with
respect to or otherwise deal with any of the Collateral as fully and completely
as if PURCHASER were the absolute owner thereof; (h) from time to time offer a
trade discount to CLIENT’S Customers; (i) do any and all things necessary and
proper to carry out the purpose intended by this Agreement. The authority
granted PURCHASER shall remain in full force and effect until all assigned
Accounts are paid in full and any Obligations of CLIENT to PURCHASER is
discharged.

13.3 Hold Harmless. Client hereby indemnifies and agrees to hold harmless and
defend PURCHASER from and against any and all claims, judgments, liabilities,
fees and expenses (including attorney’s fees) which may be imposed upon,
threatened or asserted against PURCHASER at any time and from time to time in
any way connected with this Agreement or the Collateral.

13.4 Successors and Assigns; Participation. Notwithstanding anything herein to
the contrary, the PURCHASER may, without consent of the CLIENT, grant a security
interest in, sell or assign, grant or sell participations in or otherwise
transfer all or any portion of its rights and Obligations hereunder to one or
more persons. Client may not assign its rights or obligations hereunder without
the prior written consent of Purchaser. This Agreement inures to the benefit of
and is binding upon the heirs, executors, administrators, successors and assigns
of the parties to it.

13.5 Cumulative Rights. All rights, remedies and powers granted to PURCHASER in
this Agreement, or in any note or other agreement given by CLIENT to PURCHASER,
are cumulative and may be exercised from time to time as to all or any part of
the pledged Collateral as PURCHASER in its discretion may determine.

--------------------------------------------------------------------------------

Portions of this document have been redacted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Redacted portions are indicated with the notation “[***]”

 

13.6 Written Waiver. PURCHASER may not waive its rights and remedies unless the
waiver is in writing and signed by PURCHASER. A waiver by PURCHASER of a right
or remedy under this Agreement on one occasion is not a waiver of the right or
remedy on any subsequent occasion.

13.7 Severability. If any provision of this Agreement shall be declared illegal
or contrary to law, it is agreed that such provision shall be disregarded and
this Agreement shall continue in force as though such provision had not been
incorporated herein.

13.8 Governing Law; Jurisdiction; Venue, Waiver of Jury Trial and Service of
Process.

(A) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA,
APPLICABLE TO AGREEMENTS EXECUTED, DELIVERED AND PERFORMED WITHIN SUCH STATE,
AND CLIENT HEREBY AGREES TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN PALM BEACH COUNTY, FLORIDA, AND WAIVE PERSONAL SERVICE OF ANY AND
ALL PROCESS UPON CLIENT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE
CERTIFIED MAIL DIRECTED TO CLIENT AT ITS ADDRESS AS IT APPEARS AT THE BEGINNING
OF THIS AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE
(5) BUSINESS DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U. S. MAILS,
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID. CLIENT WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION
SHALL AFFECT PURCHASER’S RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT PURCHASER’S RIGHT TO BRING ANY ACTION OR PROCEEDING
AGAINST CLIENT OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.

(B) EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO.
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTIONS SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

13.9 Entire Agreement. This instrument contains the entire Agreement between the
parties. Any addendum or modification hereto must be signed by both parties and
attached hereto in order to be effective.

--------------------------------------------------------------------------------

Portions of this document have been redacted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Redacted portions are indicated with the notation “[***]”

 

IN WITNESS WHEREOF, the parties hereunto have set their hand as of the day and
year specified at the beginning hereof.

 

ICOP Digital, Inc. By:       David C. Owen, CEO

STATE OF                                         

COUNTY OF                                     

Before me, the undersigned authority, on this date personally appeared David C.
Owen, CEO of ICOP Digital, Inc., a Colorado corporation, known to me to be the
person whose name is subscribed to the foregoing instrument, and acknowledged to
me that he executed the same for the purposes and consideration therein
expressed, in the capacity stated, and as the act and deed of said corporation.

Given under my hand and seal this      day of                     , 2008.

 

   Notary Public

(SEAL)

My Commission Expires:

______________________

Commission No.            

Accepted this      day of

                    , 2008

at West Palm Beach, Florida.

“PURCHASER”

[***]

 

By:    

[***]

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Portions of this document have been redacted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
Redacted portions are indicated with the notation “[***]”

 

Schedule 6

Exceptions to Representations and warranties

 

UCC Filing Number

  

Secured Party

  

Collateral

096103387    Equity Bank    Security Interest in Inventory, Accounts and Other
Rights to Payments, General Intangibles, Deposit Accounts       (UCC WILL BE
TERMINATED UPON FUNDING OF FACILITY) 096103353    Equity Bank    All Collateral
      (UCC WILL BE TERMINATED UPON FUNDING OF FACILITY)