[ex10-7_001.jpg] FACTORING AND SECURITY AGREEMENT    

 

THIS FACTORING AND SECURITY AGREEMENT (“Agreement”) is made as of November 4,
2016 by and between THE MASLOW MEDIA GROUP, INC, (“Client”) and Advance Business
Capita] LLC d/b/a Triumph Business Capital (together with its Affiliates,
successors and assigns, “Triumph”), (individually, “Party” and collectively,
“Parties”).

 

1. Definitions and Index to Definitions. The following terms used herein shall
have the following meanings. All capitalized terms, whether or not herein
defined, shall have the meaning set forth in the Uniform Commercial Code except
to the extent otherwise provided in this Agreement.

 

  1.1. “Account Debtor” - the obligor on an Account.         1.2. “Active
Account Debtor” - an Account Debtor of Client which owes all or any portion of a
Purchased Account to Triumph.         1.3. “Advance Rate” - the percentage, per
Schedule A, of the Face Amount of Purchased Accounts immediately available to
the Client on the Purchase Date.         1.4. “Affiliate” or “Affiliated” -
means any Person that, whether directly or indirectly, or through one or more
intermediaries, controls, is controlled by, or is under common ownership or
control. Each of the following shall be deemed Affiliated with Client: Client’s
executive officers and directors; if Client is a Corporation, each shareholder,
that, directly or indirectly, owns or directs 10% or more of any class of voting
securities; if Client is a partnership, all general, limited or special partners
and if Client is a limited liability company, all elected managers or members
that have contributed or that have the right to receive, upon dissolution, 10%
or more of the company’s capital.         1.5. “Balance Subject to Finance Fees”
- the difference between the unpaid Face Amount of Purchased Accounts and the
Reserve Account - but only to the extent that a Finance Rate is designated as
applicable, pursuant to Schedule A.         1.6. “Closed” - in connection with a
Purchased Account, occurs upon Triumph’s receipt of full payment of a Purchased
Account from a Payor or the Client (including payment by a charge to the Reserve
Account).         1.7. “Collateral” - all of Client’s assets now owned and
hereafter acquired including Accounts, Chattel Paper, Deposit Accounts,
Inventory, Equipment, Instruments, Investment Property, Documents, Letter of
Credit Rights, Commercial Tort Claims, and General Intangibles.         1.8.
“Complete Termination” - in connection with the Term of this Agreement, occurs
upon satisfaction of the following conditions: (a) payment in full of ail
Obligations of Client to Triumph; (b) if Triumph has issued or caused to be
issued guarantees, promises, or letters of credit on behalf of Client,
acknowledgement from any beneficiaries thereof that Triumph or any other issuer
has no outstanding direct or contingent liability therein and (c) Client has
executed and delivered to Triumph a general release in a form prepared by and
acceptable to Triumph.         1.9.

“Default Fees” - 1.5 times the fees listed in Schedule A, applicable only upon
an Event of Default.

 

  1.10. “Discretion”- in the sole and exclusive business judgment or
determination of Triumph.         1.11. “Early Termination Fee” - 5% of the
Maximum Advance, applicable only if this Agreement is terminated subsequent to
the No-Risk Termination Period and prior to end of the Term.         1.12.

“Eligible Account” - an Account that in Triumph’s Discretion is acceptable for
purchase.

 

  1.13. “Events of Default” - see Section 10.1         1.14. “Expedited
Settlement Fee” - $25.00 or 1% of the Advance Rate portion of the Purchase
Price, whichever is greater, upon Client’s request for payment of the Purchase
Price sooner than as provided in Section 2.2.         1.15. “Exposed Payments” -
payments received by Triumph that may subject Triumph to an Avoidance Claim
under the United States Bankruptcy Code.         1.16. “Face Amount” - the
amount due on an Account at the time of purchase as evidenced by the Invoice and
Invoice Documentation.         1.17. “Factoring Fee” - the Factoring Fee
Percentage multiplied by the Face Amount of a Purchased Account, for each
Factoring Fee period or portion thereof, that any portion thereof remains unpaid
as provided in Schedule A.         1.18. “Factoring Fee Percentage” - as
provided in Schedule A.         1.19. “Finance Fees” - the product of the
Finance Rate (if applicable, as provided in Schedule A) multiplied by Balance
Subject to Finance Fees,         1.20. “Finance Rate” - a rate per annum,
expressed as a function of Prime Rate, if applicable, as provided in Schedule A.
        1.21. “Insolvent” - in connection with an Account Debtor occurs when, on
or before the Repurchase Date, the Account Debtor becomes subject to: (i) a
petition under any state or federal debtor relief or liquidation statute filed
within the Insolvency Period, or (ii) a proceeding under Chapters 11 or 13 of
the Bankruptcy Code filed or the conversion of said case to one under Chapter 7.
The burden of proof as to the Insolvency of an Account Debtor shall rest solely
on the Client, with it being presumed that at all relevant times an Account
Debtor is not Insolvent.

 

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  1.22. “Invoice” - the document that evidences or is intended to evidence the
terms of sale giving rise to an Account. Where the context so requires,
reference to an Invoice shall be deemed to refer to the Account to which it
relates.         1.23. “Invoice Documentation” - all records, whether in
electronic or paper form, relating to or supporting an Invoice in respect to a
claim for payment from an Account Debtor including purchase orders, hills of
lading, receiving documents, shipping receipts, packing lists and the like.    
    1.24. “Maximum Advance” - an amount, per Schedule A, equal to and not to
exceed the total amount payable by Triumph to Client based on the Advance Rate
portion of all Purchased Accounts offered during the Term of this Agreement and
not Closed. Triumph may elect not to purchase any Account which will cause the
unpaid balance of Purchased Accounts to exceed the Maximum Advance. However, if
Triumph purchases Accounts in excess of the Maximum Facility, same shall have no
adverse consequences to Triumph’s rights under this Agreement.         1.25.
“Minimum Monthly Fee” - the minimum value of monthly Factoring Fees, but
applicable only after the first 90 days of the initial Term: Not Applicable.    
    1.26. “No-Risk Termination Period” - the period of time in which the Early
Termination Fee is waived; that being 30 days from the date of this Agreement.  
      1.27. “Obligations” - all present and future monetary indebtedness,
liabilities and obligations owing by Client to Triumph, whether or not arising
hereunder and whether arising before, during or after the commencement of any
Bankruptcy Case in which Client is a Debtor or Debtor-In-Possession.        
1.28. “Payor” - An Account Debtor or another entity making payment for the
benefit of such party.         1.29. “Person” - includes but is not limited to
individuals, firms, associations, joint adventures, general and limited
partnerships, estates, trusts, business trusts, syndicates, fiduciaries,
corporations, limited liability companies, all forms of Registered
Organizations, and all other groups or combinations.         1.30. “Prime Rate”
- the “prime rate” as set forth in the Money Rates section of The Wall Street
Journal or, if unavailable, Triumph will substitute a comparable index. For
purposes of this Agreement, Prime Rate is subject to a minimum of 5% per annum.
Triumph shall have Discretion to adjust the Factoring Fee Percentage, either up
or down, to reflect changes in the Prime Rate.         1.31. “Purchase Date” -
each date on which Client has been advised, either through writing or posting on
daily settlement reports available to Client, that Triumph has elected to issue
the Purchase Price to purchase an Account.         1.32. “Purchase Price” - the
Face Amount of a Purchased Account less the Factoring Fee.         1.33.
“Purchased Accounts” - Accounts purchased hereunder which have not been Closed.
        1.34. “Repurchase Period” - as provided in Schedule A.         1.35.
“Repurchase” - an Account for which Client has paid to Triumph the then unpaid
Face Amount.         1.36. “Required Reserve Amount” - the product of the total
unpaid balance of all Purchased Accounts multiplied by a percentage equal to the
difference between 100% and the Advance Rate percentage, as provided in Schedule
A.         1.37. “Reserve Account” - a non-Deposit Account maintained by Triumph
for bookkeeping purposes, intended to represent the aggregate, yet-to-be paid,
portion of all Purchased Accounts.         1.38. “Reserve Shortfall” - the
amount by which the Reserve Account is less than the Required Reserve Amount.  
      1.39. “Schedule of Accounts” - a form supplied by Triumph from time to
time to be used by Client to identify Accounts offered for sale to Triumph under
this Agreement.         1.40. “Setup Fee” - a fee identified per Schedule A.    
    1.41. “Term” - term of this Agreement, as identified in Schedule A.        
1.42. “Uniform Commercial Code” - the Uniform Commercial Code as adopted in the
state of Texas.

 

2. Sale; Purchase Price; Billing.

 

  2.1. Client shall offer for sale to Triumph, as absolute owner and with full
recourse, such of Client’s Accounts as are listed from time to time on each
Schedule of Accounts. Each Schedule of Accounts shall be accompanied by Invoice
Documentation supporting the Account. Triumph may, in its Discretion, elect to
purchase from Client such Accounts that Triumph determines to be Eligible
Accounts.         2.2. Triumph shall pay or otherwise make available to Client
the Purchase Price of any Purchased Account, on one (1) business day of the
Purchase Date, less any amounts due to Triumph from Client, including, without
limitation, any fees, expenses and Reserve Shortfall.         2.3. At the time
each Schedule of Accounts is delivered by Client to Triumph, Client will have
offered for sale to Triumph the Accounts so listed and shall also offer for sale
each and every other then existing or later arising Account related to an Active
Account Debtor. Triumph may transmit a monthly statement to each Payor by, among
other things, itemizing their account activity during the preceding billing
period.         2.4. Client shall not, without the prior written consent of
Triumph in each instance, change or modify the terms of any original Invoice or
any Invoice Documentation in respect to any Active Account Debtor or Purchased
Account.

 

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  2.5. Subject to the terms and conditions of this Agreement, Triumph is
authorized to purchase Accounts upon telephonic, facsimile or other instructions
received from any officer, employee or representative of Client.

 

3. Fees and Expenses. Client shall pay to Triumph the following items:

 

  3.1. Factoring Fees. The Factoring Fee on the date on which a Purchased
Account is purchased, as well as for subsequent periods as applicable - as
provided in Schedule A.         3.2. Finance Fees. Computed on the Balance
Subject to Finance Fees on the first day of the month following the month in
which it accrues, as applicable - as provided in Schedule A.         3.3. Early
Termination Fee. Applicable only in the event that Client terminates this
Agreement after the end of the No-Risk Termination Period and other than at the
end of the Term.         3.4. Out-of-pocket Expenses. The out-of-pocket expenses
directly incurred by Triumph in the administration of this Agreement such as
wire transfer fees, electronic funds transfer fees, postage and audit fees - as
provided in Schedule A.         3.5. Field Audit Expenses. $750 per day plus
travel expenses in respect to each audit, applicable only if the total Purchased
Accounts exceeds $1,000,000, upon an Event of Default or as may otherwise be
provided in Schedule A. Subject to the preceding sentence, Triumph may have
performed but Client shall not be required to pay for more than two audits per
twelve-month period.         3.6. Other Charges. Other fees and expenses as
specified in this Agreement or as may otherwise be provided in Schedule A,
including, upon each occurrence, Expedited Settlement Fees.

 

4. Reserve Account.

 

  4.1. Triumph shall pay to Client weekly, or at such other times and
frequencies mutually agreeable to the Parties, any amount by which the Reserve
Account exceeds the Required Reserve Amount, subject to Triumph’s right to
charge the Reserve Account with any Obligations. Triumph may pay any amounts due
Client hereunder by making a credit to the Reserve Account. Additionally,
Triumph may increase the Required Reserve Amount by the value of Purchased
Accounts which, in its Discretion, are unlikely to be paid prior to the
Repurchase Period.         4.2. Client shall pay to Triumph, on demand, the
amount of any Reserve Shortfall. If a Reserve Shortfall continues to exist for
ten (10) days after notice of same is issued by Triumph, Client shall also pay
either as a debit to any Purchase Price paid or payable by Triumph, or
immediately upon demand, an amount equal to nine percentage points (9%) in
excess of Prime Rate (but not to exceed the maximum rate of interest permitted
by applicable law) and such charges will continue on the outstanding Reserve
Shortfall until the Reserve Shortfall is eliminated. The imposition of such
interest charges shall not be deemed to excuse a late payment or be deemed a
waiver of any other rights of Triumph under this Agreement.         4.3. Triumph
may retain the Reserve Account for ninety days following termination of this
Agreement or until a Complete Termination, whichever is greatest, to be applied
to, inter alia, payment of any Obligations whether known or unknown to Triumph
at the time of termination.

 

5. Account Disputes. Client shall notify Triumph promptly of and, if, but only
if, requested by Triumph in writing, at Client’s sole cost and expense, will
seek to settle all disputes concerning any Purchased Account, however, no final
resolution shall be made without Client having first obtained Triumph’s express
written authorization. Triumph, at Client’s sole expense, shall at all times be
irrevocably authorized, but not required, to settle, compromise, or pursue
collection of (collectively, “Resolve”) any dispute pertaining to a Purchased
Account upon such terms, per Triumph’s Discretion, without otherwise seeking
Client’s consent. Upon the occurrence of an Event of Default Triumph may Resolve
such issues with respect to any Account of Client.

 

6. Repurchase of Accounts. Triumph may demand that Client Repurchase a Purchased
Account by requiring payment or at Triumph’s option, by debiting the Reserve
Account of the then unpaid Face Amount of such Purchased Account together with
any unpaid fees including those described in Section 3 above, in connection with
each of the following:

 

  6.1. Any Purchased Account in respect to which (a) a Payor has indicated an
inability or unwillingness to pay the Purchased Account when due or (b) remains
unpaid beyond the Repurchase Period or (c) in Triumph’s Discretion a Payor
qualifies as Insolvent;         6.2. Any Purchased Account, the right to receive
payment of which has been disputed by a Payor, Triumph being under no obligation
to determine the bona Tides of such dispute;

 

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  6.3. Any Purchased Account in respect to which Client has breached any
representation, warranty or covenant as set forth in the Sections 8 and 9; and  
      6.4. All Purchased Accounts upon occurrence of an Event of Default or upon
the termination date of this Agreement.

 

7. Security and Ownership Interest; Notification of Assignment.

 

  7.1. To secure all of Client’s Obligations, Client grants to Triumph a
continuing first priority Security Interest in the Collateral. Notwithstanding
the creation of this Security Interest, the relationship of the parties
constitutes an Account Purchase Transaction as more specifically descrihed in
Section 21.         7.2. To enable Triumph’s perfection of its unconditional and
unfettered ownership interest in the Purchased Accounts, Client authorizes
Triumph to file a UCC Financing Statement so noting such ownership interest.

 

8. Representation and Warranties. Client and each principal who has executed
this Agreement on Client’s behalf, represents and warrants each of the
following:

 

  8.1. This Agreement constitutes its legal, valid and binding obligation, it is
fully authorized to enter into this Agreement and to perform its Obligations
hereunder and all required signatures are properly evidenced and genuine;      
  8.2. Client is solvent, in good standing in the jurisdiction of its
organization and able to pay its debts as they mature;         8.3. Client has
filed ail tax returns and required reports and is current on payment of all
taxes, assessments, fees and other governmental charges;         8.4. All
financial statements and all other information which have been furnished by
Client to Triumph are true, correct and complete in all material respects, and
there have been no material adverse changes in the condition (financial or
otherwise) of Client since submission.

 

9. Covenants by Client. Client and each principal who has executed this
Agreement on Client’s behalf, covenants, upon the execution of this Agreement
and in each instance that a Schedule of Accounts is delivered to Triumph, each
of the following:

 

  9.1. Each Purchased Account is and will: (a) remain a bona fide existing
obligation created by the full and complete rendition of services or sale and
delivery of goods in the ordinary course of Client’s business; (b) remain
unconditionally owed and will be paid to Triumph in full without any assertion
of a defense, dispute, offset, counterclaim, or right of return or cancellation,
other than Accounts owed by an Account Debtor which becomes subject to any
bankruptcy or state debtor relief proceeding; and (c) not constitute a sale to
any entity that is Affiliated with Client or in any way not an “arm’s length”
transaction.         9.2. Client shall not create, incur, assume or permit to
exist any Security Interest, lien or any form of adverse ownership interest or
claim upon or with respect to any of the Purchased Accounts or Collateral in
which Triumph now or hereafter holds an ownership interest or a Security
Interest.         9.3. Before sending any Invoice to an Account Debtor, Client
shall notate on same the form of notice of assignment as may be required by
Triumph and/or otherwise notify any Payor of such assignment of Triumph’s right
to receive payment.         9.4. Client shall not solicit from any Account
Debtor any form of payment in respect to a Purchased Account or any Account
offered for sale to Triumph. Should Client receive payment of all or any portion
of any Purchased Account, Client shall immediately notify Triumph of receipt of
the payment, hold said payment in express trust for Triumph separate and apart
from Client’s own property and funds, and by no later than the next banking day
following the date of receipt, deliver said payment to Triumph in the identical
form in which received. Any claim or cause of action that Client may have
against Triumph, whether predicated on this Agreement or otherwise, shall not
constitute a defense or any form of excuse of non-performance to the enforcement
by Triumph in law or in equity of the provisions contained in this section
applicable to Client’s duty to hold in trust and turn over all proceeds of
Purchased Accounts to Triumph. The Client’s duties and Obligations contained in
this section shall at all times be deemed independent covenants such that
Client’s duty to honor the provisions of this section may at no time be excused
due to, inter alia, any breach that Client may assert against Triumph.        
9.5. Client shall provide Triumph, within two (2) business days, with written
Notice of: (a) any billing dispute including, but not limited to, any challenge
by a Payor as to invoiced amount, damage to shipped cargo, returns or allowances
or claim for loss or (b) actual or imminent bankruptcy, insolvency, or material
impairment of the financial condition of any Active Account Debtor.         9.6.
Client shall not, without the prior written consent of Triumph, in each
instance: (a) grant any extension of time for payment or otherwise modify the
terms of any of its Accounts, (b) compromise or settle any of its Accounts for
less than the full amount thereof, (c) release in whole or in part any Payor, or
(d) grant any credits, discounts, allowances, deductions, return authorizations
or the like with respect to any of the Accounts.

 

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  9.7. Client shall timely pay all payroll and other taxes, and shall provide
proof thereof to Triumph in such form as Triumph shall reasonably require.      
  9.8. Client shall maintain insurance at all times on all insurable property
owned or leased by Client in such manner, to the extent and against at least
such risks (in any event, including but not limited to fire and business
interruption insurance) as usually maintained by owners of similar businesses
and properties in similar geographic areas. All such insurance shall be in such
form and written by such companies acceptable to Purchaser.         9.9. Client,
its employees and agents shall comply with all applicable laws and regulations
in connection with its business activities including, without limitation, the
maintaining in good standing of all required business permits, licenses,
authorities and registrations and, in addition, shall not take any action which
may lead to penal liability due to fraud, embezzlement, bribery or other
corruption crimes.         9.10. Client shall not, outside Client’s ordinary
course of business, sell, transfer or assign any of Client’s assets without the
prior written consent of Purchaser and Client will notify Purchaser, in writing,
of any existing or newly created business, if owned in whole or part by Client
or Client’s principals and such company is in any way related to or associated
with the type of business conducted by Client.         9.11. From time to time
as requested by Purchaser, Purchaser or its designee shall have access, during
reasonable business hours if prior to an Event of Default and at any time if on
or after an Event of Default, to all premises where Collateral is located for
the purposes of inspecting (and removing, if after the occurrence of an Event of
Default) any of the Collateral, including Client’s books and records and Client
shall permit Purchaser or its designees to make copies or extracts therefrom.
Client hereby irrevocably authorizes and shall direct each of its accountants
and third parties to disclose and deliver to Purchaser, at Purchaser’s request
and at Client’s expense, all financial information, books and records, work
papers, management reports and other information in their possession relating to
Client.         9.12. Client acknowledges that the duty to accurately complete
each Schedule of Accounts is fundamental to this Agreement and as such the duty
to accurately complete each Schedule of Account shall at all times remain
nondelegable such that each of Client’s principal(s) acknowledge that he/she
shall remain fully responsible for the accuracy of each Schedule of Accounts
delivered to Purchaser regardless of who may otherwise be delegated the
responsibility to prepare, complete or submit each such Schedule of Accounts.  
      9.13. Client will provide, upon request, agings of accounts receivable and
payables, as well as financial statements prepared in accordance with generally
accepted accounting principles, including income statement and balance sheet,
applicable only if the total Purchased Accounts exceeds $1,000,000, upon an
Event of Default or as may be requested by Triumph.

 

10. Default.

 

  10.1. Events of Default. The following will constitute an Event of Default
hereunder: (a) Client’s failure to pay any Obligation or perform any provision
under this Agreement or any other agreement now or hereafter entered into with
Triumph; (b) any covenant, warranty or representation contained under this
Agreement proves to be false in any way, howsoever minor, (c) Client or any
guarantor of the Obligations becomes subject to any bankruptcy, state
debtor-relief proceeding such as an assignment for the benefit of creditors or
becomes subject to the appointment of any receivership, (d) any guarantor fails
to perform or observe any of such guarantor’s duties or obligations to Triumph
or shall notify Triumph of its intention to rescind, modify, terminate or revoke
any guaranty of the Obligations, or any such guaranty shall cease to be in full
force and effect for any reason whatever, (e) Client fails to offer for sale to
Triumph an Eligible Account for a period of thirty (30) days from the date the
last Eligible Account was offered for sale by Client; and (f) Triumph, in good
faith, deems itself insecure with respect to the prospect of repayment or
performance of the Obligations or any other required performance under this
Agreement.         10.2. Effect of Default. Upon the occurrence of any Event of
Default, in addition to any rights Triumph has under this Agreement or
applicable law, Triumph may, without notice, immediately terminate this
Agreement and/or declare all Obligations immediately due and payable and all
fees shall accrue and be payable at the Default Fees rate.

 

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11. Authorization to Triumph. Client authorizes Triumph and irrevocably grants
power of attorney to Triumph to exercise each and any of the following powers
until all of Obligations have been paid in full and a Complete Termination has
been performed:

 

  11.1. At All Times: (a) Receive, take, endorse, assign, deliver, accept and
deposit, in the name of Triumph or Client, any and all Proceeds of any
Collateral securing the Obligations or the Proceeds thereof; (b) Take or bring,
in the name of Triumph or Client, all steps, actions, suits or proceedings
deemed by Triumph necessary or desirable to effect collection of or other
realization upon Triumph’s Accounts; (c) File any claim in connection with any
bond or any trust fund; (d) Pay any sums Triumph, in its sole and exclusive
discretion, deems necessary including the discharge of any Security Interest,
lien or encumbrance which may be senior to Triumph’s Security Interest in any
assets of Client, which sums shall thereafter be included as Obligations
hereunder; (e) File and enforce in the name of Client or Triumph, or both, a
mechanics or any other form of lien or related notices, or claims under any
payment bond, in connection with goods or services sold by Client; (f) Notify
any Payor obligated with respect to any Account, that, inter alia, the Account
has been assigned to Triumph by Client and that payment thereof is to be made to
the order of and directly and solely to Triumph; (g) Communicate directly with
Client’s Payors, regardless of whether any actual Obligation is due at the time
of such communication, to verify the amount and validity of any Account created
by Client; (h) Accept, endorse and deposit any checks tendered by an Account
Debtor “in full payment” of its obligation to Client and Client shall not assert
against Triumph any claim arising therefrom, irrespective of whether such action
by Triumph effects an accord and satisfaction of Client’s claims, under §3-311
of the Uniform Commercial Code, or otherwise; (i) File, amend and correct any
addresses with the proper federal, state and local authorities and (j) Affix an
electronic version of the signature of Client to any notification of assignment
or other communication sent by Triumph to an Account Debtor, the Internal
Revenue Service or other governmental or regulatory agency.         11.2. Upon
an Event of Default: (a) Change the address for delivery of mail to Client and
to receive and open mail addressed to Client; (b) Extend the time of payment,
compromise or settle for cash, credit, return of merchandise or otherwise, and
upon any terms or conditions, any and all Accounts and discharge or release any
Payor (including filing of any public record releasing any lien granted to
Client by such Account Debtor), without affecting any of the Obligations; (c)
Initiate electronic debit or credit entries through the ACH system to any
deposit account maintained by Client; (d) Without expense to Triumph, use any of
Client’s personnel, equipment, including computer equipment, programs, printed
output and computer media, supplies and premises for the collection of Accounts
and realization on other Collateral as Triumph, in its sole discretion, deems
appropriate and (e) Implement Default Fees. In the event, due to an Event of
Default, Triumph deems it necessary to seek equitable relief, including, but not
limited to, injunctive or receivership remedies, Client waives any requirement
that Triumph post or otherwise obtain or procure any bond. Alternatively, in the
event Triumph, in its sole and exclusive discretion, desires to procure and post
a bond, such bond may be limited to the sum of $10,000.00 notwithstanding any
common or statutory law requirement to the contrary, and Triumph shall
nonetheless be entitled to all legal benefits as if such bond was posted in an
amount as may otherwise be required by law.         11.3. Financing Statements:
File any initial Financing Statement and amendments thereto that: (a) Indicates
the Collateral as “all assets” or words of similar effect, regardless of whether
any particular asset comprised in the Collateral falls within the scope of
Article 9 of the Uniform Commercial Code, or as being of an equal or lesser
scope or with greater detail; (b) Contain any other information required by part
5 of Article 9 of the Uniform Commercial Code for the sufficiency or filing
office acceptance of any Financing Statement or amendment, including whether the
Client is an organization, the type of organization, and any organization
identification number issued to the Client; (c) Contain a notification that
Client has granted a negative pledge to Triumph, and that any subsequent lienor
may be tortiously interfering with Triumph’s rights; (d) Advise third parties
that any notification of Client’s Account Debtors will interfere with Triumph’s
collection rights and (e) File any Information Statement under Section 9-518 of
the Uniform Commercial Code that Triumph reasonably deems necessary to cure any
inaccuracy or otherwise preserve its rights hereunder.

 

12. Termination; Effective Date.

 

  12.1. Term. This Agreement will be effective on the date it is executed and
accepted by Triumph (“Effective Date”) and unless duly terminated shall continue
for successive Terms from the later of the Effective Date or the date of any
executed modification, unless Client shall provide at least thirty (30) days,
prior written notice to Triumph of its intention not to automatically renew.
Upon receipt of such notice, this Agreement will terminate on the last date of
the current Term or, if prior to that date, on the specified “Early Termination
Date,” Triumph may terminate this Agreement at any time by giving Client thirty
(30) days prior written notice of termination, or at any time without notice
upon the occurrence of any Event of Default.         12.2. No Lien Termination
without Release. In recognition of Triumph’s right to have a Complete
Termination, notwithstanding payment in full of all Obligations by Client,
Triumph shall not be required to record any terminations of any Financing
Statement or satisfactions of any of Triumph’s ownership rights or Security
Interest in the Collateral unless and until Complete Termination has occurred.
Client understands that this provision constitutes a waiver of its rights under
§9-513 of the Uniform Commercial Code.

 

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13. Account Stated. Triumph may provide Client, electronically through a website
or otherwise, with information on the Purchased Accounts and a monthly
reconciliation of the factoring relationship relating to billing, collection and
Account maintenance such as aging, posting, error resolution and mailing of
statements or make such information available. All of the foregoing shall be in
a format and in such detail, as Triumph, in its sole discretion, deems
appropriate. Triumph’s books and records or electronically stored information
shall be admissible in evidence without objection as to authenticity, hearsay or
otherwise and shall be admissible as prima facie evidence of the status of the
Purchased Accounts and non-Purchased Accounts and Reserve Account between
Triumph and Client. Each statement, report, or accounting rendered or issued by
Triumph to Client and all electronically stored information shall be deemed
conclusively accurate and binding on Client unless within fifteen (15) days
after the date of issuance or, in the case of electronically stored information,
the first of each month, Client notifies Triumph to the contrary by registered
or certified mail, setting forth with specificity the reasons why Client
believes such statement, report, or accounting or electronically stored
information is inaccurate, as well as what Client believes to he correct.
Client’s failure to receive any monthly statement or access the electronically
stored information shall not relieve it of the responsibility to request such
information and Client’s failure to do so shall nonetheless bind Client to
whatever Triumph’s records or electronically stored information report.

 

14. Indemnification. Client agrees to indemnify Triumph against and save Triumph
harmless from any and all manner of suits, claims, liabilities, demands and
expenses, whether directly or indirectly, resulting from or arising out of this
Agreement including the transactions or relationships contemplated hereby and
the enforcement of this Agreement, and any failure by Client to perform or
observe its duties under this Agreement. In no event will Triumph be liable to
Client for any lost profits or any form of consequential, incidental or special
damages resulting from or arising out of or in connection with this Agreement,
the transactions or relationships contemplated hereby or Triumph’s performance
or failure to perform hereunder, even if Triumph has heen advised of the
possibility of such damages.

 

15. Exposed Payments. Upon termination of this Agreement and in addition to any
other Obligations owing, Client shall pay to Triumph (or Triumph may retain in a
non-segregated non-interest bearing account) an amount equal to the total of all
Exposed Payments (the “Preference Reserve”). Triumph may charge the Preference
Reserve with the amount of each Exposed Payment that Triumph pays to any
bankruptcy estate of a Payor that made the Exposed Payment on account of a claim
asserted under the Bankruptcy Code. Triumph shail, from time to time, refund to
Client that portion of the Preference Reserve for which a claim under the
Bankruptcy Code can no longer be asserted due to the passage of the statute of
limitations, settlement with the bankruptcy estate of the Payor or otherwise.

 

16. Successor Entity. In the event, during the Term of this Agreement or while
Client remains liable to Triumph for any Obligations under this Agreement,
Client’s principal(s), officer(s) or directors) directly or in conjunction with
any other person, causes to be formed a new entity or otherwise become
associated with any newly formed or existing entity that provides Goods or
services similar to those of Client, whether corporate, partnership, limited
liability company or otherwise, such entity shall be deemed to have expressly
assumed the Obligations Client owes Triumph under this Agreement. With respect
to each such entity, Triumph shall be deemed to have been granted an irrevocable
power of attorney with authority to file a new UCC-1 Financing Statement naming
such newly formed or existing entity as Debtor, and to have it filed with any
and all appropriate secretaries of state or other UCC filing offices. Triumph
shall be held harmless by Client and its principals, officers or directors and
be relieved of any liability as a result of Triumph’s filing of any such
Financing Statement or the resulting perfection of its ownership or Security
Interests in such entity’s assets. In addition, Triumph shall have the right to
notify such entity’s Account Debtors of Triumph’s rights, including without
limitation, Triumph’s right to collect all Accounts, and to notify any creditor
of such entity that Triumph has rights in such entity’s assets.

 

17. Attorneys’ Pees; Expenses. Client agrees to reimburse Triumph, on demand,
for the actual amount of all costs and expenses, including attorneys’ fees,
which Triumph may incur in: (a) enforcing this Agreement and any documents
prepared in connection herewith, (b) protecting, preserving or enforcing any
lien, Security Interest or other right granted by Client to Triumph or arising
under applicable law, whether or not suit is brought, or defending Triumph’s
ownership rights in the Purchased Accounts or its Security Interest rights
and/or priority in the Collateral; (c) the defense of any Avoidance Claims; or
(d) connection with any federal or state insolvency proceeding commenced by or
against Client, including, but not limited to, any subpoena or other legal
process in any way relating to Client, including those arising out of the
automatic stay, seeking dismissal or conversion of a bankruptcy proceeding,
opposing confirmation of Client’s plan there under. This provision shall survive
termination of this Agreement. Notwithstanding the existence of any law, statute
(including, but not limited to Tx. Civ. Prac. & Remedies Code Chapter 38) rule
or otherwise, in any jurisdiction which may provide Client with a right to
attorney’s fees or costs, Client hereby waives any and all rights to seek such
attorney’s fees or costs and Client agrees that Triumph exclusively shall be
entitled to indemnification and recovery of any and all attorney’s fees or costs
in respect to any litigation based hereon, arising out of, or related hereto,
whether under, or in connection with, this and/or any agreement executed in
conjunction herewith, or any course of conduct, course of dealing, statements
(whether verbal or written) or actions of either Party so long as Triumph
prevails in any respect and without having to segregate or identify the specific
claims for which such fees were incurred.

 

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18. Entire Agreement. Client acknowledges each of the following: (a) that no
promise of any kind has been made by Triumph or any third party on behalf of
Triumph to induce Client to execute this Agreement except to the extent
expressly contained herein; (b) that this Agreement, and any other agreement
executed in connection herewith, is the product of joint negotiations such that
no portion of this Agreement shall be construed against or in favor of either
Party; (c) no course of dealing, course of performance or trade usage, and no
parole evidence of any nature, may be used to supplement, after or modify any
terms of this Agreement, and unless otherwise expressly stated in any other
agreement between the Parties, if a conflict exists between the provisions of
this Agreement and such other agreement, the provisions of this Agreement shall
control. Parties acknowledge that there is no provision or subject matter in
respect to this Agreement that either believes was negotiated, intended to be
included herein but has been omitted and each agree that by executing this
Agreement, the Parties each waive any right subsequent to the execution of this
Agreement to seek reformation in any form.

 

19. Amendment and Waiver.

 

  19.1. Only a writing signed by all parties hereto may amend this Agreement
except that if Triumph implements any procedural change in respect to which it
delivers services or requires any changes to any form required by Triumph in
connection with the performance of this Agreement, Triumph shall be entitled to
electronically notify Client of the proposed change to be implemented and may
effectuate the implementation without further consent by Client after Client is
first given thirty (30) days notice of such proposed change. No failure or delay
in exercising any right hereunder shall impair any such right that Triumph may
have, nor shall any waiver by Triumph hereunder be deemed a waiver of any
default or breach subsequently occurring. Triumph’s rights and remedies herein
are cumulative and not exclusive of each other or of any rights or remedies that
Triumph would otherwise have.         19.2. Client acknowledges that neither
Triumph’s determination that an Account qualifies as an Eligible Account nor any
issuance or determination of the credit worthiness of an Account Debtor shall
not excuse or otherwise limit in any way Client’s obligations or otherwise
entitle Client to assert against Triumph any form of recoupment, set-off, or any
other form of claim, whether based on tort, statute, common law, or otherwise,
in the event that an Account Debtor tails to pay. Client and Triumph acknowledge
that any credit-worthiness determination made by Triumph shall at all times be
solely for the purpose of and designed to establish the amount of Purchase Price
payments that Triumph may elect to make available to Client and any underwriting
in connection therewith shall at no time be necessarily based upon any industry
standard or subject to any standard of care. Client and Triumph acknowledge that
they do not intend this section to be subject to modification or otherwise
affected in any way by any form of an implied covenant or warranty, usage of
trade, course of performance and/or course of dealing.         19.3. Any claim
or cause of action that Client may have or seek to assert against Triumph,
whether predicated on this Agreement or otherwise, shall neither constitute a
defense nor serve as any basis to excuse non-performance of Client’s duty to
hold in trust and turn over all Proceeds of Purchased Accounts to Triumph. The
Client’s duties and obligations contained herein shall at all times be deemed
independent covenants such that Client’s duty to honor the provisions of this
section may at no time be excused or otherwise adversely affected due to, inter
alia, any breach that Client may assert against Triumph.         19.4. Client
acknowledges that neither the relationship created by this Agreement nor any
subsequent services that Triumph may offer to Client shall entitle Client to
assert any form of tort claim, whether in the form of negligence or otherwise,
against Triumph and whether supported by statute, common law, or otherwise.
Client and Triumph acknowledge that unless the terms of this Agreement create an
express duty, the Parties do not intend for any duty to be implied or deemed
included within this Agreement except that to the extent that an implied
covenant of good faith may exist and in respect thereto, both Triumph and Client
agree that in respect thereto, such duty, for the purpose of this Agreement,
shall be limited so that neither party shall take any action to prevent the
other party from performing under this Agreement.

 

20. Severability. In the event any one or more of the provisions contained in
this Agreement is held to be invalid, illegal or unenforceable in any respect,
then such provision shall be ineffective only to the extent of such prohibition
or invalidity, and the remaining provisions contained herein shall not in any
way be affected or impaired.

 

21. Choice of Law; Account Purchase Transaction. This Agreement and all
transactions contemplated hereunder and/or evidenced hereby shall be governed
by, construed under, and enforced in accordance with the internal substantive
laws of the State of Texas without application of any choice of law doctrine.
Client confirms and acknowledges that it does business as a commercial
enterprise and that this Agreement is intended to be an “account purchase
transaction,” as defined by Texas Finance Code §306.001(1) and pursuant to Texas
Finance Code 306.103, it is conclusively established that no amount charged
under this Agreement shall constitute interest. Client further acknowledges that
in accordance with 9-318 of the UCC, Client will not retain any legal or
equitable interest in any Purchased Account sold under this Agreement.

 

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22. Venue; Jurisdiction; Service. Any suit, action or proceeding arising
hereunder, or the interpretation, performance or breach hereof, shall, if
Triumph so elects, be instituted in any court sitting in Dallas County, Texas
or, if none, any court located in the State of Texas nearest the location of
Triumph (the “Acceptable Forums”). Client agrees that the Acceptable Forums are
convenient to it, and submits to the jurisdiction of the Acceptable Forums and
waives any and all objections to jurisdiction or venue. Should such proceeding
be initiated by Client in any forum other than the Acceptable Forums, Client
waives any right to oppose any motion or application made by Triumph to transfer
such proceeding to an Acceptable Forum. Client agrees that Triumph may effect
service of process upon Client by regular mail at the address set forth herein
or at such other address as may be reflected in the records of Triumph, or by
service upon Client’s agent for the service of process. For the purposes of
computing Client’s deadline within which to serve a response to any petition or
complaint under any applicable statute or rules of court, the period of time
shall, if served by regular mail, commence three (3) days after the delivery of
the complaint or petition as to any post office or mail drop; one (1) day after
Client’s signed receipt or first refusal to accept any certified mail and two
(2) days after Triumph’s delivery of the petition or complaint to any overnight
carrier.

 

23. Jury Trial Waiver. The PARTIES HERETO WAIVE ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER OR IN ANY WAY RELATED
OR INCIDENTAL TO THIS AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. EACH PARTY FURTHER WAIVES ANY
RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED Willi ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.

 

24. Assignment. Triumph may, without notice, assign its rights and delegate its
duties hereunder. Upon such assignment or delegation, Client shall be deemed to
have attorned to such assignee and shall owe the same duties and obligations to
such assignee and shall accept performance hereunder by such assignee as if such
assignee were Triumph. Client may not, without Triumph’s express written
consent, delegate any of its duties under this Agreement to any other Person.

 

25. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if all signatures
were upon the same instrument. Delivery of an executed counterpart of this
Agreement by facsimile shall be effective as delivery of a manually executed
counterpart of this Agreement, and any party delivering such an executed
counterpart shall thereafter also promptly deliver a manually executed
counterpart, provided that the failure to deliver such manually executed
counterpart shall not affect the validity, enforceability, or binding effect of
this Agreement.

 

26. Notice. All notices required to be given to any Party shall be deemed given
upon the first to occur of (a) deposit thereof in a receptacle under the control
of the U.S. Postal Service, (b) transmittal by electronic means to a receiver
under the control of such Party, or (c) actual receipt by such Party or its
employee or agent (in the ease of Triumph, actual receipt by a responsible
officer of Triumph). For the purposes hereof, notices hereunder shall be sent to
the following addresses, or to such other addresses as each such Party may in
writing hereafter indicate.

 

  Client  

Triumph Business Capital

Address: 2233 Wisconsin Ave NW, Ste. 400   701 Canyon Drive, Suite 100  
Washington, DC 20007   Coppell, Texas 75019 Officer: Naveen Doki   George
Thorson Fax Number: (202)965-6171   (214)513-9611 Email: dokinav@yahoo.com  
gthorson@triumphbeap.com

 

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[ex10-7_001.jpg] FACTORING AND SECURITY AGREEMENT   SCHEDULE A - PRICING AND
TERMS

 

This Schedule A, as referenced in that Factoring and Security Agreement dated
November 4, 2016 by and between Advance Business Capital LLC d/b/a Triumph
Business Capital (“Triumph”) and THE MASLOW MEDIA GROUP, I.NC. (“Client”), shall
govern in respect to the following Terms:

 

Maximum Advance $4,000,000 Term One (1) Year with Annual Renewals Advance Rate
90% of Eligible Accounts Repurchase Period 120 days Finance Rate Prime Rate plus
3.5% Factoring Fee 0.5% Setup Fee $300 Wire Transfer Fee $18 Electronic Fund
Transfer (ACH) $3 Special Considerations N/A

 

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