Exhibit 10.1

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STATEMENT OF ACCURACY
& AUTHORIZATION TO OBTAIN INFORMATION

PERSONAL IDENTITY DETAILS

Name:
 Thomas J Virgin
 
 
Address:
 110 110th Avenue NE
 
 
 
 Bellevue, WA 98004
   

 
BUSINESS ENTITY DETAILS

Business Name:
 Hipcricket, Inc.
Year of Incorporation:
 2000
Address:
 110 110th Avenue NE, Suite 410
State of Incorporation:
 DE
 
 Bellevue, WA 98004
Federal Tax ID:
 20-0122076
Phone:
 425 449 4215
   
Entity Type:
 Corporation
   

 
Patriot Act Notice: Federal law requires all financial institutions to obtain,
verify and record information that identifies each person who opens an account,
including your name, address, date of birth and other information that will
allow us to verify your identity.

STATEMENT OF ACCURACY
The statements made in and documents attached to this agreement are true and
accurate to the best of my/our knowledge and belief.

DECLARATION

 I/We authorize Fast Pay Partners  (FPP) to obtain whatever information
regarding employment, bank accounts, and/or outstanding credit (mortgage, auto,
personal, home improvement, charge cards, credit unions, etc.) that FPP deems to
necessary in connection with this application or in the course of review or
collection of any credit extended in reliance on this application. I/We
authorize and instruct any consumer credit agency, commercial credit reporting
agency, business or person to compile and furnish to FPP any such information
regarding us or our business(es) as may be requested by FPP and agree that such
information, along with this application, shall remain FPP’s property whether or
not the application is approved. This authorization will be valid for a period
of two years from the date below or as long as applicant has an outstanding
balance with FPP. A photocopy of this authorization will be as valid as the
original. I/We authorize Fast Pay to verify or check any of the information
given, including credit references and employment and to obtain credit bureau
reports as Fast Pay deems necessary. I/We also authorize Fast Pay to record a
UCC-1 Financing Statement reflecting a lien on all my/our assets to expedite the
processing of secure amounts due under the contemplated transaction and if the
transaction is not consummated, a UCC-3 Termination Statement will be provided
upon your request.

 
 

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                            FINANCING AND SECURITY AGREEMENT

INTRODUCTION
 
This Financing and Security Agreement (“Agreement”) is made and entered into
on June 2, 2014 by and between Hipcricket, Inc. (“Seller”), and Fast Pay
Partners LLC, a Delaware limited liability company (“Purchaser”). Seller has
agreed to sell and Purchaser has agreed to purchase Accounts for which Purchaser
will make Advances of the Purchase Price.  Purchaser is agreeable to providing
this facility, provided that Seller agrees to the provisions of this Agreement.

GENERAL RATES AND FEES
The items referenced below are subject to and defined within the provisions of
the Agreement:
(a) Maximum Line Amount: Five Million Dollars ($5,000,000.00)
(b) Advance Rate: Seventy Percent (70.0%) of gross value of Invoices
(c) Minimum Invoice Size: Five thousand dollars ($5,000)
(d) Initial Factoring Fee: One Point Two Five Percent (1.25%) flat fee, based on
gross value of the Invoice, for initial 30 day period
(e) Additional Factoring Fee: One Point Two Five Percent (1.25%) prorated daily
on the gross value of the Invoiced amount outstanding, commencing on day 30
(f) Misdirected Payment Fee: Repayment of all Advances must be paid by the
Account Debtor directly to FPP.  In the event an Account Debtor fails to pay
Purchaser directly, FPP will provide Seller a grace period of five (5) business
days to notify FPP of any Misdirected Payment and to forward the full amount of
the Misdirected Payment to FPP otherwise Seller may be assessed a Misdirected
Payment Fee equaling 20% of the amount of such payment.
(g) Concentration Limit: The percentage of any debt from a single debtor over
the total amount outstanding from Seller’s purchased accounts must remain below
25%.  In the event the percentage exceeds 25%, FPP may exercise Purchaser’s
right not to purchase more accounts from said debtor.
(h) Closing Fee: Twenty-five Thousand Dollars ($25,000.00)
(i) Wire Fee: An amount equal to Thirty-Five Dollars ($35.00) to cover fees and
costs associated with incoming and outgoing wire transfers to/from the Lockbox
or as between Purchaser/Seller.
(j) Termination: Seller may terminate this agreement at any time upon written
notice to Purchaser whereupon this Agreement shall terminate upon successful
repayment of all outstanding Obligations.

SIGNATURES
 
By their signatures below, the parties represent they have read, understand and
agree to be bound by the Financing and Security Agreement, including the
Standard Terms and Conditions referenced herein.
 
 
 

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SELLER AND PURCHASER have executed this Agreement through their authorized
officers as of the date set forth above.
 
“SELLER”
Hipcricket, Inc.
/s/ Thomas J. Virgin
 
Name: Thomas J Virgin
Title:    CFO
“PURCHASER”
Fast Pay Partners LLC
/s/ Jed Simon
 
Name:  Jed Simon
Title:     President

Contact Information:
Hipcricket, Inc.
110 110th Avenue NE, Suite 410
Bellevue, WA 98004
Ph: 425 449 4215
 
Contact Information:
Fast Pay Partners
9300 Wilshire Blvd, Suite 550
Beverly Hills, CA 90212
Ph: (310) 651-9201
 

 
 

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 FINANCING AND SECURITY AGREEMENT
 STANDARD TERMS AND CONDITIONS
 

1. Sale; Purchase Price; Billing
1.1. Assignment and Sale
1.1.1. Seller shall offer to sell to Purchaser as absolute owner, with full
recourse, such of Seller's Accounts as submitted to Purchaser for purchase.
1.1.2. Each Account submitted by Seller for purchase shall be accompanied by
such documentation supporting and evidencing the Account.
1.1.3. Purchaser may not purchase any Account which will cause the unpaid
balance of Purchased Accounts to exceed the Maximum Line Amount.
1.1.4. Accounts submitted to Purchaser must exceed Minimum Invoice Size as
stated within the General Rates and Fees, except as otherwise agreed by both
parties in an Authenticated Record.
1.1.5. Purchaser shall pay the Purchase Price, of any Purchased Account, less
any amounts due to Purchaser from Seller, including, without limitation, any
amounts due under Sections 2.1 and 3.1 hereof, to Seller within five (5)
business days of the Purchase Date, whereupon the Accounts shall be deemed
purchased hereunder.
1.1.7. Upon execution of this Agreement, Seller shall pay the Closing Fee.
1.1.8. All Purchases shall be made at the absolute sole discretion of the
Purchaser.
1.2. Billing.  Purchaser may send a monthly statement to all Payors itemizing
their account activity during the preceding billing period. All Payors will be
instructed to make payments to Purchaser.

2. Reserve Account
2.1. Seller shall pay to Purchaser on demand the amount of any Reserve
Shortfall.
2.2. Upon request of the Seller, Purchaser shall pay to Seller any amount by
which the Reserve Account exceeds the Required Reserve, unless reserve is
necessary to cover other Obligations of the Seller.
2.3. Purchaser may charge the Reserve Account with any Obligation.
2.4. Purchaser may pay any amounts due Seller hereunder by a credit to the
Reserve Account.
2.5. Purchaser may retain the Reserve Account until Complete Termination.

3. Exposed Payments
3.1. Upon termination of this Agreement Seller shall pay to Purchaser (or
Purchaser may retain), to hold in a non-segregated non-interest bearing account,
the amount of all Exposed Payments (the “Preference Reserve”).
3.2. Purchaser may charge the Preference Reserve with the amount of any Exposed
Payments that Purchaser pays to the bankruptcy estate, receivership estate,
assignee for benefit of creditors, creditor body or representative of any of the
foregoing of the Payor that made the Exposed Payment or on whose behalf such
Exposed Payment was made, on account of a claim asserted under Sections 547,
548, 549 or 550 of the Bankruptcy Code or any equivalent type state or federal
law, rule or regulation.
3.3. Purchaser shall refund to Seller from time to time that balance of the
Preference Reserve for which a claim under Sections 547, 548, 549 or 550 of the
Bankruptcy Code or any equivalent type state or federal law, rule or regulation
can no longer be asserted against the Exposed Payments due to the passage of the
statute of limitations, settlement with the bankruptcy estate, receivership
estate, assignee for benefit of creditors, creditor body or representative of
any of the foregoing.

4. Authorization for Purchases.  Subject to the terms and conditions of this
Agreement, Purchaser is authorized to purchase Accounts upon telephonic,
facsimile or other instructions received from anyone purporting to be an
officer, employee or representative of Seller.
 
 
 
 

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5. Fees and Expenses. Seller shall pay to Purchaser:
5.1. Factoring Fee.  The Initial Factoring Fee and Additional Factoring Fee
shall be due on the date on which a Purchased Account is Closed.
5.2. Misdirected Payment Fee. Any Misdirected Payment Fee immediately upon its
accrual.
5.3. Out-of-pocket Expenses. The out-of-pocket expenses directly incurred by
Purchaser in the administration of this Agreement such as wire transfer fees
(“Wire Fee”), postage and audit fees. Seller shall not be required to pay for
more than four audits per twelve-month period.

6. Repurchase Of Accounts.  Purchaser may require that Seller repurchase, by
payment of the then unpaid Face Amount thereof, together with any unpaid fees
relating to the Purchased Account on demand, or, at Purchaser's option, by
Purchaser's charge to the Reserve Account:
6.1. Any Purchased Account, the payment of which has been disputed by the Payor
or the Account Debtor obligated thereon, Purchaser being under no obligation to
determine the bona fides of such dispute;
6.2. Any Purchased Account regarding which Seller has breached any
representation or warranty as set forth in the Section 13.
6.3. Any Purchased Account owing from an Account Debtor or Payor which (a) in
Purchaser’s reasonable credit judgment has become insolvent or (b) has indicated
an inability or unwillingness to pay the Purchased Account when due;
6.4. All Purchased Accounts upon the occurrence of an Event of Default, or upon
the termination date of this Agreement; and
6.5. Any Purchased Account that remains unpaid beyond the Late Payment Date.

7. Security Interest
7.1. As collateral securing the Obligations, Seller grants to Purchaser a
continuing first priority security interest in the Collateral.
7.2. Notwithstanding the creation of this security interest, the relationship of
the parties shall be that of Purchaser and Seller of accounts, and not that of
lender and borrower.

8. Clearance Days.  For all purposes under this Agreement, Clearance Days will
be added to the date on which Purchaser receives any payment if such payment is
received other than by wire directly to the Lockbox.

9. Authorization to Purchaser
9.1.  Power of Attorney: Seller grants to Purchaser an irrevocable power of
attorney coupled with an interest authorizing and permitting Purchaser (acting
through any of its employees, attorneys or agents) at any time, at its option
but without obligation, with or without notice to Seller, and at Seller's sole
expense, to do any or all of the following, in Seller's name or otherwise:
Seller irrevocably authorizes Purchaser at Seller's expense, to exercise at any
time any of the following powers until all of the Obligations have been paid in
full:
9.1.1. Receive, take, endorse, assign, deliver, accept and deposit, in the name
of Purchaser or Seller, any and all proceeds of any collateral securing the
Obligations or the proceeds thereof;
9.1.2. Take or bring, in the name of Purchaser or Seller, all steps, actions,
suits or proceedings deemed by Purchaser necessary or desirable to effect
collection of or other realization upon Purchaser’s Accounts;
9.1.3. With respect to any of the following established or issued for the
benefit of Seller, either individually or as a member of a class or group, file
any claim under (a) any bond or (b) under any trust fund;
9.1.4. Pay any sums necessary to discharge any lien or encumbrance which is
senior to Purchaser's security interest in any assets of Seller, which sums
shall be included as Obligations hereunder, and in connection with which sums
the Late Charge shall accrue and shall be due and payable;
9.1.5. File in the name of Seller or Purchaser or both: (a) Mechanic’s lien or
related notices, or (b) Claims under any payment bond, in connection with goods
or services sold by Seller in connection with the improvement of realty;
9.1.6. Notify any Payor obligated with respect to any Account, that the
underlying Account has been assigned to Purchaser by Seller and that payment
thereof is to be made to the order of and directly and solely to Purchaser;
 
 
 

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9.1.7. Communicate directly with Seller’s Payors to verify the amount and
validity of any Account created by Seller;
9.1.8. After an Event of Default:  (a) Change the address for delivery of mail
to Purchaser and to receive and open mail addressed to Seller; (b) Extend the
time of payment of, compromise or settle for cash, credit, return merchandise,
and upon any terms or conditions, any and all Accounts and discharge or release
any account debtor or other obligor (including filing of any public record
releasing any lien granted to Seller by such account debtor), without affecting
any of the Obligations;
9.1.9 Any and all sums paid and any and all costs, expenses, liabilities,
obligations and attorneys' fees incurred by Purchaser with respect to the
foregoing shall be added to and become part of the Obligations. In no event
shall Purchaser's rights under the foregoing power of attorney or any of
Purchaser's other rights under this Agreement be deemed to indicate that
Purchaser in control of the business, management of properties of Seller;
9.1.10. File any initial financing statements and amendments thereto that: (a)
Indicate the collateral as all assets of the Seller or words of similar effect,
regardless of whether any particular asset comprised in the collateral falls
within the scope of Article 9 of the UCC, 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 UCC for the sufficiency or filing office acceptance of any
financing statement or amendment, including (i) whether the Seller is an
organization, the type of organization, and any organization identification
number issued to the Seller and, (ii) in the case of a financing statement filed
as a fixture filing or indicating collateral to be as-extracted collateral or
timber to be cut, a sufficient description of real property to which the
collateral relates; and (c) Contain a notification that the Seller has granted a
negative pledge to the Purchaser, and that any subsequent lienor may be
tortuously interfering with Purchaser’s rights;
9.1.11. Advises third parties that any notification of Seller’s Account Debtors
will interfere with Purchaser’s collection rights; and
9.1.12. File any Correction Statement in the name of Seller under Section 9-518
of the Uniform Commercial Code that Purchaser reasonably deems necessary to
preserve its rights hereunder.
9.2. Seller authorizes Purchaser to accept, endorse and deposit on behalf of
Seller any checks tendered by an account debtor “in full payment” of its
obligation to Seller. Seller shall not assert against Purchaser any claim
arising therefrom, irrespective of whether such action by Purchaser effects an
accord and satisfaction of Seller's claims, under §3-311 of the Uniform
Commercial Code, or otherwise.
9.3. Seller grants Purchaser ownership and full license to use any data
collected during the Term of this contract provided that no personally
identifiable information is disclosed to the public.

 
 

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10. ACH Authorization.
10.1. In order to satisfy any of the Obligations, Seller authorizes Purchaser to
initiate electronic debit or credit entries through the ACH system to any
deposit account maintained by Seller. Purchaser shall provide Seller with two
(2) days advance notice of its intention to initiate electronic debit entries of
Seller’s deposit account through the ACH system. Such notice may be provided
electronically. If an ACH debit request is not honored by the financial
institution, for any reason, Seller agrees to immediately pay, in the form of a
check, money order or cash, such sums as are necessary to bring the balance then
due hereunder current, and Seller will be subject to such fees or charges for
non-payment, as if Client had delivered a NSF check or made no payment to
Purchaser.
10.2. Seller is not required to sign this Authorization as a condition to
obtaining any extension of credit from Purchaser. This Authorization is made at
Seller’s request to aid its ability to timely pay amounts due Purchaser.

11. Electronic Transactions Authorization. The Parties agree that all business
between one another shall be conducted by electronic means and adopt the
provisions of the California Uniform Electronic Transactions Act (UETA) as set
forth in California Civil Code, Division 3, Part 2, Title 2.5, Sections 1633.1 –
1633.17, inclusive.  Each document that is subject to or provided in furtherance
of this Agreement, all documents provided in furtherance thereof, as amended,
modified or supplemented from time to time that a party has sent to the other by
electronic means or the Seller has clicked to approve to adopt this agreement or
Seller submits through the Online Reporting System shall be intended as and
constitute an original and deemed to contain a valid signature for all purposes
acknowledging and consenting to the terms of the agreement applicable
thereto.  In furtherance of the above, the Seller hereby authorizes Purchaser to
regard the Seller’s printed name or electronic approval for any document,
agreement, assignment schedules or invoices as the equivalent of a manual
signature by one of the Seller's authorized officers or agents.  The Seller’s
failure to promptly deliver to Purchaser any schedule, report, statement,
writing or other information (“Record”) required by this Agreement or any
document related hereto shall not affect, diminish, modify or otherwise limit
Purchaser’s security interests in the Collateral. Purchaser may rely upon, and
assume the authenticity of, any such electronic approval, and any material
applicable to such approval as the duly confirmed, authorized and approved
signature of the Seller by the person approving same, shall constitute an
“authenticated” record for all purposes (including, without limitation, the
Uniform Commercial Code) and shall satisfy the requirements of any applicable
statute of frauds. Seller is not required to agree to conduct business pursuant
to the UETA and the purchase of Accounts of Advance being granted in furtherance
of this Agreement is not conditioned upon Seller agreeing to conduct business in
accordance with the UETA.  Seller may terminate this Electronic Transactions
Authorization by providing PURCHASER with not less than ten (10) days written
notice as provided in Section 35.1, below. Thereafter, Seller shall incur and be
responsible to pay PURCHASER a “Manual Reporting Fee” for any Record when
submitted to PURCHASER.

12. Covenants By Seller
12.1. After written notice by Purchaser to Seller, and automatically, without
notice, after an Event of Default, Seller shall not, without the prior written
consent of Purchaser in each instance, (a) grant any extension of time for
payment 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.
12.2. From time to time as requested by Purchaser, at the sole expense of
Seller, 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 Seller's books and records, and Seller shall permit
Purchaser or its designee to make copies of such books and records or extracts
therefrom as Purchaser may request. Without expense to Purchaser, Purchaser may
use any of Seller's personnel, equipment, including computer equipment,
programs, printed output and computer readable media, supplies and premises for
the collection of accounts and realization on other Collateral as Purchaser, in
its sole discretion, deems appropriate. Seller hereby irrevocably authorizes all
accountants and third parties to disclose and deliver to Purchaser at Seller's
expense all financial information, books and records, work papers, management
reports and other information in their possession relating to Seller.
 
 
 

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12.3. Before sending any Invoice to an Account Debtor, Seller shall mark same
with a notice of assignment as may be required by Purchaser.
12.4. Seller shall pay when due all payroll and other taxes, and shall provide
proof thereof to Purchaser in such form as Purchaser shall reasonably require.
12.5. Seller shall not create, incur, assume or permit to exist, any lien upon
or with respect to any assets in which Purchaser now or hereafter holds as a
security interest.
12.6. Notwithstanding Seller’s obligation to pay the Misdirected Payment Fee,
Seller shall pay to Purchaser on the next banking day following the date of
receipt by Seller, the amount of any payment on account of a Purchased Account.
12.7. Avoidance Claims
12.7.1. Seller shall indemnify Purchaser from any loss (including defense costs,
expenses and attorneys’ fees) arising out of the assertion, defense, or judgment
or otherwise of any Avoidance Claim, and shall pay to Purchaser on demand the
amount thereof.
12.7.2. Seller shall notify Purchaser within two business days after Seller
becomes aware of the assertion of an Avoidance Claim.
12.7.3. This provision shall survive termination of this Agreement.

13. Account Disputes.  Seller shall notify Purchaser promptly of and, if
requested by Purchaser, will settle all disputes concerning any Purchased
Account, at Seller's sole cost and expense. Purchaser may, but is not required
to, attempt to settle, compromise, or litigate (collectively, “Resolve”) the
dispute upon such terms, as Purchaser in its sole discretion deem advisable, for
Seller's account and risk and at Seller's sole expense. Upon the occurrence of
an Event of Default, Purchaser may Resolve such issues with respect to any
Account of Seller.

14. Representation and Warranties. Seller represents and warrants that:
14.1. Existence and Power. If Seller is a partnership, limited liability
company, or corporation, Seller is and will continue to be duly authorized,
validly existing and in good standing under the laws of the jurisdiction of its
organization until all of the Obligations have been paid in full. Seller is and
will continue to be qualified and licensed in all jurisdictions in which the
nature of the business transacted by it, or the ownership or leasing of its
property, make such qualification of licensing necessary, and Seller has and
will continue to have all requisite power and authority to carry on its business
as it is now, or may hereafter be, conducted.
14.2. Authority. Seller is, and will continue to be, duly empowered and
authorized to enter into, and grant security interests in its property, pursuant
to and perform its obligations under, this Agreement, and all other instruments
and transactions contemplated hereby or relating hereto. The execution, delivery
and performance by Seller of this Agreement, and all other instruments and
transactions contemplated hereby or relating hereto, have been duly and validly
authorized, are enforceable against the Seller in accordance with their terms,
and do not and will not violate any law or any provision of, nor be grounds for
acceleration under, any agreement, indenture, note or instrument which is
binding upon Seller, or any of its property, including without limitation,
Seller's Operating Agreement, Partnership Agreement, Articles of Incorporation,
By-Laws and any Shareholder Agreements (as applicable).
14.3. Name; Trade Names and Styles. Seller has set forth above Seller’s
absolutely true and correct name. Listed below is each prior true name of Seller
and each fictitious name, trade name and trade style by which Seller has been,
or is now known, or has previously transacted, or now transacts business, as
aforementioned noted.  Seller shall provide Purchaser with thirty (30) days
advance written notice before doing business under any other name, fictitious
name, trade name, or trade style. Seller has complied, and will hereafter
comply, with all laws relating to the conduct of business under, the ownership
of property in, and the renewal or continuation of the right to use, a
corporate, fictitious or trade name or trade style.
14.4 Place of Business; Location of Collateral. Seller's books and records
including, but not limited to, the books and records relating to Seller's
Accounts, are and will be kept and maintained at Seller's Address unless and
until Purchaser otherwise consents in writing. In addition to Seller's Address,
Seller has places of Business and Collateral located only at the following
locations, as aforementioned noted. Seller will provide Purchaser with at least
thirty (30) days advance written notice in the event Seller moves the
Collateral, or obtains, opens or maintains any new or additional place(s) for
the conduct of Seller's business or the location of any Collateral, or closes
any existing place of business.
 
 
 

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14.5 Title to Collateral; Liens. With the exception of Accounts Purchased
hereunder where title vests with Purchaser, Seller is now, and will at all times
hereafter be, the true, lawful and sole owner of all the Collateral., except for
the security interest granted to Purchaser the Collateral now is and will
hereafter remain, free and clear of any and all liens, charges, security
interests, encumbrances and adverse claims. Except as expressly provided to the
contrary in this Section, Purchaser now has, and will hereafter continue to
have, a fully perfected and enforceable first priority security interest in all
of the Collateral, and Seller will at all times defend Purchaser and the
Collateral against all claims and demands of others.
14.6. Each and every Purchased Account sold and assigned to Purchaser shall, on
the date the assignment is made and thereafter, comply with all of the following
representations, warranties and covenants: (a) each Purchased Account represents
an undisputed bona fide existing unconditional obligation of the Account Debtor
created by the sale, delivery, and acceptance of goods or the rendition of
services in the ordinary course of Seller's business; (b) each Purchased Account
is owned by Seller free and clear of any and all deductions, disputes, liens,
security interests and encumbrances; (c) the Account Debtor has received and
accepted the goods sold and services rendered which created the Purchased
Account and the invoice therefore and will pay the same without any dispute; (d)
no Account Debtor on any Purchased Account is a shareholder, director, partner
or agent of Seller, or is a person or entity controlling, controlled by or under
common control with Seller; and (e) no Purchased Account is owed by an Account
Debtor to whom Seller is or may become liable in connection with goods sold or
services rendered by the Account Debtor to Seller or any other transaction or
dealing between the Account Debtor and Seller. Immediately upon discovery by
Seller that any of the foregoing representations, warranties, or covenants are
or have become untrue with respect to any Purchased Account, Seller shall
immediately give written notice thereof to Purchaser.
14.7. Seller has not received notice or otherwise learned of actual or imminent
bankruptcy, insolvency, or material impairment of the financial condition of any
applicable account debtor regarding Purchased Accounts.

15. Indemnification. Seller agrees to indemnify Purchaser against and save
Purchaser harmless from any and all manner of suits, claims, liabilities,
demands and expenses (including reasonable attorneys' fees and collection costs)
resulting from or arising out of this Agreement, whether directly or indirectly,
including the transactions or relationships contemplated hereby (including the
enforcement of this Agreement), and any failure by Seller to perform or observe
its obligations under this Agreement.

16. Disclaimer of Liability. In no event will Purchaser be liable to Seller for
any lost profits, lost savings or other consequential, incidental or special
damages resulting from or arising out of or in connection with this agreement,
the transactions or relationships contemplated hereby or purchaser's performance
or failure to perform hereunder, even if purchaser has been advised of the
possibility of such damages.

17. Default
17.1. Events of Default. The occurrence of any one of more of the following
shall constitute an Event of Default hereunder: (a) Seller fails to pay or
perform any Obligation as and when due; (b) there shall be commenced by or
against Seller any voluntary or involuntary case under the United States
Bankruptcy Code, or any assignment for the benefit of creditors, or appointment
of a receiver or custodian for any of its assets, or Seller makes or sends
notice of a bulk transfer; (c) Seller or any guarantor of the Obligations shall
become insolvent in that its debts are greater than the fair value of its
assets, or Seller is generally not paying its debts as they become due or is
left with unreasonably small capital; (d) any lien, garnishment, attachment,
execution or the like is issued against or attaches to the Seller, the Purchased
Receivables, or the Collateral; (e) Seller shall breach any covenant, agreement,
warranty, or representation set forth herein; (f) Seller delivers any document,
financial statement, schedule or report to Buyer which is false or incorrect in
any material respect; (g) Purchaser, at any time, acting in good faith and in a
commercially reasonable manner, deems itself insecure with respect to the
prospect of repayment or performance of the Obligations; or (h) any present or
future guarantor of the Obligations revokes, terminates or fails to perform any
of the terms of any guaranty, endorsement or other agreement of such party in
favor of Purchaser or any affiliate of Purchaser or shall notify Purchaser 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.
 
 
 

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17.2. Waiver of Notice. PURCHASER'S FAILURE TO CHARGE OR ACCRUE INTEREST OR FEES
AT ANY “DEFAULT” OR “PAST DUE” RATE SHALL NOT BE DEEMED A WAIVER BY PURCHASER OF
ITS CLAIM THERETO.
17.2.1. The failure of Purchaser at any time or times hereafter to require
Seller strictly to comply with any of the provisions, warranties, terms or
conditions of this Agreement or any other present or future instrument or
agreement between Seller and Purchaser shall not waive or diminish any right of
Purchaser thereafter to demand and receive strict compliance therewith and with
any other provision warranty, term and condition; and any waiver of any default
shall not waive or affect any other default, whether prior or subsequent thereto
and whether of the same or of a different type. None of the provisions,
warranties, terms or conditions of this Agreement or other instrument or
agreement now or hereafter executed by Seller and delivered to Purchaser shall
be deemed to have been waived by any act or knowledge of Purchaser or its agents
or employees, but only by a specific written waiver signed by an officer of
Purchaser and delivered to Seller. Seller waives any and all notices or demands
which Seller might be entitled to receive with respect to this Agreement, or any
other agreement by virtue of any applicable law. Seller hereby waives demand,
protest, notice of protest and notice of default or dishonor, notice of payment
and nonpayment, release, compromise, settlement, extension or renewal of any
commercial paper, instrument, Account, general intangible, document or guaranty
at any time held by Purchaser on which Seller is or may in any way be liable,
and notice of any action taken by Purchaser unless expressly required by this
Agreement. Seller hereby ratifies and confirms whatever Purchaser may do
pursuant to this Agreement and agrees that Purchaser shall not be liable for the
safekeeping of the Collateral or any loss or damage thereto, or diminution in
value thereof, from any cause whatsoever, any act or omission of any carrier,
warehouseman, bailee, forwarding agent or other person, or any act of commission
or any omission by Purchaser or its officers, employees, agents, or attorneys,
or any of its or their errors of judgment or mistakes of fact or of law.
17.3. Effect of Default
17.3.1. Upon the occurrence of any Event of Default, in addition to any rights
Purchaser has under this Agreement or applicable law, Purchaser may immediately
terminate this Agreement, at which time all Obligations shall immediately become
due and payable without notice.
17.3.2. The Late Charge shall accrue and is payable on demand on any Obligation
not paid when due.

18. Remedies
18.1 Generally. Upon the occurrence of any Event of Default, and at any time
thereafter, Purchaser, at its option, and without notice or demand of any kind
(all of which are hereby expressly waived by Seller) may do any one or more of
the following: (a) Cease advancing money or extending credit to or for the
benefit of Seller under this Agreement, and any other document or agreement; (b)
Accelerate and declare all or any part of the Obligations to be immediately due,
payable, and performable, notwithstanding any deferred or installment payments
allowed by any instrument evidencing or relating to any Obligation; (c) Take
possession of any or all of the Collateral wherever it may be found, and for
that purpose Seller hereby authorizes Purchaser without judicial process to
enter onto any of the Seller's premises without hindrance to search for, take
possession of, keep, store, or remove any of the Collateral and remain on such
premises or cause a custodian to remain thereon in exclusive control thereof
without charge for so long as Purchaser deems necessary in order to complete the
enforcement of its rights under this Agreement or any other agreement; provided,
however, that should Purchaser seek to take possession of any or all of the
Collateral by Court process or through a receiver, Seller hereby irrevocable
waives: (i) any bond and any surety or security relating thereto required by any
statute, court rule or otherwise as an incident to such possession; (ii) any
demand for possession prior to the commencement of any suit or action to recover
possession thereof; and (iii) any requirement that Purchaser retain possession
of and not dispose of any such Collateral until after trial or final judgment;
(d) Require Seller to assemble any or all of the Collateral and make it
available to Purchaser at a place or places to be designated by Purchaser which
is reasonably convenient to Purchaser and Seller, and to remove the Collateral
to such locations as Purchaser may deem advisable; (e) Place a receiver in
exclusive control of Seller’s business and/or any or all of the Collateral, in
order to assist Purchaser in enforcing its rights and remedies; (f) Sell,
reclaim, lease or otherwise dispose of all or any portion of the Collateral in
its condition at the time Purchaser obtains possession or after further
manufacturing, processing or repair; at any one or more public and/or private
sale(s) (including execution sales); in lots or in bulk; for cash, exchange for
other property or on credit; and to adjourn any such sale from time to time
without notice other than oral announcement at the time scheduled for sale.
Purchaser shall have the right to conduct such disposition on Seller's premises
without charge for such time or times as Purchaser deems fit, or on Purchaser's
premises, or elsewhere and the Collateral need not be located at the place of
disposition. Purchaser may directly or through any affiliated company purchase
or lease any Collateral at any such public disposition and, if permissible
 
 
 
 

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under applicable law, at any private disposition. Any sale or other disposition
of Collateral shall not relieve Seller of any liability Seller may have if any
Collateral is defective as to title or physical condition at the time of sale;
(g) Demand payment of, and collect any Accounts, Instruments, Chattel Paper,
Supporting Obligations and General Intangibles comprising part or all of the
Collateral; or (h) Demand and receive possession of any of Seller's federal and
state income tax returns and the books, records and accounts utilized in the
preparation thereof or referring thereto. Any and all attorneys' fees, expenses,
costs, liabilities and obligations incurred by Purchaser with respect to the
foregoing shall be added to and become part of the Obligations and shall be due
on demand.
18.2 Application of Proceeds.  The proceeds received by Purchaser from the
disposition of or collection of any of the Collateral shall be applied to such
extent and in such manner as Purchaser shall determine in its sole discretion.
If any deficiency shall arise, Seller shall remain liable to Purchaser
therefore. In the event that, as a result of the disposition of any of the
Collateral, Purchaser directly or indirectly enters into a credit transaction
with any third party, Purchaser shall have the option, exercisable at any time,
in its sole discretion, of either reducing the Obligations by the principal
amount of such credit transaction or deferring the reduction thereof until the
actual receipt by Purchaser of cash therefore from such third party.
18.3 Online Access.  Upon an Event of Default, all of Seller’s rights and access
to any online internet services that Purchaser makes available to Seller shall
be provisional pending Seller’s curing of all such Events of Default.  During
such period of time, Purchaser may limit or terminate Seller’s access to online
services.  Seller acknowledges that the information Purchaser makes available to
Seller through online internet access, both before and after an Event of
Default, constitutes and satisfies any duty to respond to a request for
accounting or request regarding a statement of account that is referenced in the
Uniform Commercial Code as enacted in the State of California.
18.4 Standards of Commercial Reasonableness.  After an Event of Default, the
parties acknowledge that it shall be presumed commercially reasonable and
Purchaser shall have no duty to undertake to collect any Account, including
those in which Purchaser receives information from an Account Debtor that a
dispute exists.  Furthermore, in the event Purchaser undertakes to collect or
enforce an obligation of an Account Debtor or any other person obligated on the
Collateral and ascertains that the possibility of collection is outweighed by
the likely costs and expenses that will be incurred, Purchaser may at any such
time cease any further collection efforts and such action shall be considered
commercially reasonable.  Before Seller may, under any circumstances, seek to
hold Purchaser responsible for taking any commercially unreasonable action,
Seller shall first notify Purchaser in writing, of all of the reasons why Seller
believes Purchaser has acted in any commercially unreasonable manner and advise
Purchaser of the action that Seller believes Purchaser should take.
18.5 Remedies Cumulative.  In addition to the rights and remedies set forth in
this Agreement, Purchaser shall have all other rights and remedies accorded a
secured party under the Uniform Commercial Code as enacted in California and
under any and all other applicable laws and in any other instrument or agreement
now or hereafter entered into between Purchaser and Seller and all of such
rights and remedies are cumulative and none is exclusive. Exercise or partial
exercise by Purchaser of one or more of its rights or remedies shall not be
deemed an election, nor bar Purchaser from subsequent exercise or partial
exercise of any other rights or remedies. The failure or delay of Purchaser to
exercise any rights or remedies shall not operate as a waiver thereof, but all
rights and remedies shall continue in full force and effect until all of the
Obligations have been fully paid and performed.

19. Account Stated.  Purchaser shall render to Seller a statement setting forth
the transactions arising hereunder. Each statement shall be considered correct
and binding upon Seller as an account stated, except to the extent that
Purchaser receives, within sixty (60) days after the mailing of such statement,
written notice from Seller of any specific exceptions by Seller to that
statement, and then it shall be binding against Seller as to any items to which
it has not objected.

20. Amendment and Waiver. Only a writing signed by all parties hereto may amend
this Agreement. No failure or delay in exercising any right hereunder shall
impair any such right that Purchaser may have, nor shall any waiver by Purchaser
hereunder be deemed a waiver of any default or breach subsequently occurring.
Purchaser’s rights and remedies herein are cumulative and not exclusive of each
other or of any rights or remedies that Purchaser would otherwise have.

 
 
 

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21. Termination; Effective Date.
21.1. This Agreement will be effective on the date it is signed by the Parties,
shall continue for the Term, and shall be automatically extended for successive
Terms unless Seller shall provide written notice to Purchaser of its intention
to terminate whereupon this Agreement shall terminate on the date set forth in
said notice (an “Early Termination Date”) upon successful repayment of all
outstanding Obligations.
21.2. Purchaser may terminate this Agreement and demand immediate payment of all
outstanding Obligations at any time and for any reason.

22. No Lien Termination without Release. In recognition of the Purchaser's right
to have its attorneys' fees and other expenses incurred in connection with this
Agreement secured by the Collateral, notwithstanding payment in full of all
Obligations by Seller, Purchaser shall not be required to record any
terminations or satisfactions of any of Purchaser's liens on the Collateral
unless and until Complete Termination has occurred. Seller understands that this
provision constitutes a waiver of its rights under §9-513 of the UCC.

23. Conflict. Unless otherwise expressly stated in any other agreement between
Purchaser and Seller, if a conflict exists between the provisions of this
Agreement and the provisions of such other agreement, the provisions of this
Agreement shall control.

24. 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 validity, legality, and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.

25. Enforcement. This Agreement and all agreements relating to the subject
matter hereof is the product of negotiation and preparation by and among each
party and its respective attorneys, and shall be construed accordingly.

26. Relationship of Parties. The relationship of the parties hereto shall be
that of Seller and Purchaser of Accounts, and Purchaser shall not be a fiduciary
of the Seller, although Seller may be a fiduciary of the Purchaser.

27. Attorneys’ Fees. Seller agrees to reimburse Purchaser on demand for:
27.1. The actual amount of all costs and expenses, including attorneys' fees,
which Purchaser has incurred or may incur in;
27.1.1. Negotiating, preparing, or administering this Agreement and any
documents prepared in connection herewith; Any way arising out of or in
connection with this Agreement, and whether or not arising out of a dispute
which does not involve Purchaser;
27.1.2. Protecting, preserving or enforcing any lien, security or other right
granted by Seller to Purchaser or arising under applicable law, whether or not
suit is brought,  including but not limited to the defense of any Avoidance
Claims or the defense of  Purchaser’s lien priority;
27.2. The actual costs, including photocopying (which, if performed by
Purchaser's employees, shall be at the rate of $.10/page), travel, and
attorneys' fees and expenses incurred in complying with any subpoena or other
legal process in any way relating to Seller. This provision shall survive
termination of this Agreement; and
27.3. The actual amount of all costs and expenses, including attorneys' fees,
which Purchaser may incur in enforcing this Agreement and any documents prepared
in connection herewith, or in connection with any federal or state insolvency
proceeding commenced by or against Seller, including those (a) arising out the
automatic stay, (b) seeking dismissal or conversion of the bankruptcy
proceeding, or (c) opposing confirmation of Seller's plan thereunder.

28. Entire Agreement. No promises of any kind have been made by Purchaser or any
third party to induce Seller to execute this Agreement. No course of dealing,
course of performance or trade usage, and no parole evidence of any nature,
shall be used to supplement or modify any terms of this Agreement.

 
 

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29. Choice of Law. This Agreement and all transactions contemplated hereunder
and/or evidenced hereby shall be governed by, construed under, and enforced in
accordance with the internal laws of the Chosen State.

30. Jury Trial Waiver. EACH OF THE PARTIES HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY), THE OBLIGATIONS
OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR THE PARTIES ACTIONS
IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT HEREOF OR THEREOF.  THE
PARTIES EACH ACKNOWLEDGE THAT SUCH WAIVER IS MADE WITH FULL KNOWLEDGE AND
UNDERSTANDING OF THE NATURE OF THE RIGHTS AND BENEFITS WAIVED HEREBY, AND WITH
THE BENEFIT OF ADVICE OF COUNSEL OF ITS CHOOSING.  THE PARTIES EACH ACKNOWLEDGE
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP
THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND
THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.
IN THE EVENT THAT ANY PARTY HERETO ELECTS TO BRING ANY ACTION OR PROCEEDING IN
THE STATE OF CALIFORNIA, RELATING TO THIS AGREEMENT OR ANY OF THE OBLIGATIONS,
THE PARTIES AGREE THAT SUCH ACTION OR PROCEEDING SHALL BE TRIED SOLELY THROUGH A
JUDICIAL REFEREE AS PROVIDED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638
THROUGH 645.1.  THE PARTIES FURTHER AGREE TO THE APPOINTMENT OF JAMS AS THE
REFEREE APPOINTMENT TO CONDUCT THE TRIAL AND SUCH RELATED PROCEEDINGS.  THE
PARTIES AGREE THAT THE FILING OF ANY PRE-TRIAL MOTION OR ANY PRE-TRIAL
PROVISIONAL REMEDY SHALL NOT OPERATE AS A WAIVER OF EACH PARTY’S RIGHT TO TRIAL
SOLELY THROUGH A JUDICIAL REFEREE.  THE PARTIES ACKNOWLEDGE THAT THE JUDICIAL
REFEREE WILL LIKELY CHARGE FEES AND COSTS OVER AND ABOVE THOSE NORMALLY CHARGED
BY A COURT.  THE PARTIES AGREE TO INITIALLY EVENLY SPLIT THE FEES AND COSTS OF
SUCH REFEREE BETWEEN THE PARTIES, SUBJECT TO SUCH FURTHER RULINGS BY THE
REFEREE.

31. Venue; Jurisdiction. Any suit, action or proceeding arising hereunder, or
the interpretation, performance or breach hereof, shall, if Purchaser so elects,
be instituted in any court sitting in the Chosen State, in the city in which
Purchaser’s chief executive office is located, or if none, any court sitting in
the Chosen State (the “Acceptable Forums”). Seller 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 in any other forum, Seller waives any right to oppose
any motion or application made by Purchaser to transfer such proceeding to an
Acceptable Forum.

32. Service of Process. Seller agrees that Purchaser may effect service of
process upon Seller by regular mail at the address set forth herein or at such
other address as may be reflected in the records of Purchaser, or at the option
of Purchaser by service upon Seller’s agent for the service of process.

33. Assignment. Purchaser may assign its rights and delegate its duties
hereunder. Upon such assignment, Seller shall be deemed to have attorned to such
assignee and shall owe the same obligations to such assignee and shall accept
performance hereunder by such assignee as if such assignee were Purchaser.

34. 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 the
signature page to 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 of the signature page to this Agreement by
facsimile to any other party shall thereafter also promptly deliver a manually
executed counterpart of this  Agreement to such other party, provided that the
failure to deliver such manually executed  counterpart shall not affect the
validity, enforceability, or binding effect of this Agreement.
 
 
 

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35. Notice
35.1. All notices required to be given to any party other than Purchaser shall
be deemed given upon the first to occur of (a) a deposit thereof in a receptacle
under the control of the United States Postal Service, (b) transmittal by
electronic means to a receiver under the control of such party, or (c) actual
receipt by such party or an employee or agent of such party. All notices to
Purchaser shall be deemed given upon actual receipt by a responsible officer of
Purchaser.
35.2. For the purposes hereof, notices hereunder shall be sent to the addresses
set forth as Contact Addresses on the face page hereof, or to such other
addresses as each such party may in writing hereafter indicate.

36. Definitions and Index to Definitions. The following terms used within this
Agreement shall have the following meaning. All capitalized terms not defined
within this Agreement shall have the meaning set forth in the Uniform Commercial
Code:
(a) “Advance” – The funding of the Purchase Price
(b) “Advance Rate” – As stated in the General Rates and Fees.
(c) “Avoidance Claim” - Any claim that any lien or payment received by Purchaser
is avoidable under the Bankruptcy Code, any other debtor relief statute,
including fraudulent conveyance claims, or through receivership, assignment for
the benefit of creditors or any equivalent type payment recovery laws, rules or
regulations intended to benefit creditors.
(d) “Base Fees” - Initial Factoring Fee and Additional Factoring Fee (not to
overlap).
(e) “Chosen State” - California.
(f) “Clearance Days”- None.
(g) “Closed” - A Purchased Account is closed upon receipt of full payment by
Purchaser from a Payor or from the Seller (including its being charged to the
Reserve Account).
(h) “Collateral”- All Seller’s now owned and hereafter acquired Accounts,
Chattel Paper, Inventory, Equipment, Instruments, Investment Property,
Documents, Letter of Credit Rights, Commercial Tort Claims, and General
Intangibles.
(i) “Complete Termination” – Complete Termination occurs upon satisfaction of
the following conditions: (1) Payment in full of all Obligations of Seller to
Purchaser; (2) If Purchaser has issued or caused to be issued guarantees,
promises, or letters of credit on behalf of Seller, acknowledgement from any
beneficiaries thereof that Purchaser or any other issuer has no outstanding
direct or contingent liability therein; or (3) Seller has executed and delivered
to Purchaser a general release in the form required by Purchaser.
(j) “Concentration Limit” – As stated within the General Rates and Fees, or 25%
of the entire amount outstanding from Seller.  The concentration limit refers to
the percentage any debt from a single debtor has over the total amount
outstanding from Seller’s purchased accounts.
(k) “Early Termination Date” – see Section 20.1 hereof.
(l) “Early Termination Fee” – None.
(m) “Eligible Account” - An Account that is acceptable for purchase as
determined by Purchaser in the exercise of its reasonable sole credit or
business judgment.
(n) “Events of Default” - See Section 16.1.
(o) “Exposed Payments” – Payments received by Purchaser from or for the account
of a Payor that has become subject to a bankruptcy proceeding, to the extent
such payments cleared the Payor’s deposit account within ninety (90) days of the
commencement of said bankruptcy case.
(p) “Face Amount” - the amount initially invoiced on an Account at the time of
purchase.
(q) “Factoring Fee(s)” – Refers to the Initial Factoring Fee or Additional
Factoring Fee and means the Percentage in the amount aforementioned multiplied
by the Face Amount of a Purchased Account, for each Factoring Fee Period or
portion thereof, that any portion thereof remains unpaid, computed from the end
of the Initial Fee Period to and including the date on which a Purchased Account
is Closed.
(r) “Additional Factoring Fee” – As stated within the General Rates and Fees, or
30 days based on a 30 day month and 360 day year if unstated.
 
 
 
 

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(s) “Initial Factoring Fee” - The first 30 days after the Purchase Price is paid
to Seller or credited by Purchaser to Seller’s Reserve Account based on a 30 day
month and 360 day year unless explicitly overridden within the General Rates and
Fees.
(t) “Invoice” - The document that evidences or is intended to evidence an
Account. Where the context so requires, reference to an Invoice shall be deemed
to refer to the Account, Eligible Account or Purchased Account to which it
relates.
(u) “Late Charge” – None.
(v) “Late Payment Date” - Ninety (90) days from the date on which a Purchased
Account was Purchased.
(w) “Minimum Monthly Fee” - None.
(x) “Misdirected Payment Fee” – Unless otherwise stated in the General Rates and
Fees, 20% of the amount of any payment (but in no event less than $1,000) on
account of a Purchased Account which has been received by Seller and not
delivered in kind to Purchaser on the next business day following the date of
receipt by Seller, or 30% of the amount of any such payment which has been
received by Seller as a result of any action taken by Seller to cause such
payment to be made to Seller.
(y) “Obligations” - All present and future obligations owing by Seller to
Purchaser whether arising hereunder or otherwise, and whether arising before,
during or after the commencement of any Bankruptcy Case in which Seller is a
Debtor.  Without limiting the generality hereof, Seller acknowledges and agrees
that the term "Obligations" shall include, all ledger debt of Seller, which
shall mean and include all indebtedness of Seller now or hereafter owing to a
third party, which Purchaser has heretofore or hereafter purchases from such
third party, acquires by way of assignment, or in which Purchaser has heretofore
or hereafter acquires a security interest, whether as a result of Purchaser
factoring or financing the accounts receivable of such third party or
otherwise.  Seller acknowledges that Purchaser will be relying upon this
provision in factoring or financing the accounts receivable of such third
parties (consisting of indebtedness and obligations now or hereafter due from
Seller to such third parties), as well as in permitting Account Debtor’s  to
incur other indebtedness due to Seller, but nothing herein shall constitute a
commitment of any kind by Purchaser to factor or finance the accounts receivable
of any third party to the extent they represent amounts owing by Seller to such
third parties.
(z) “Parties” - Seller and Purchaser.
(aa) “Payor” - An Account Debtor or other obligor on an Account, or entity
making payment thereon for the account of such party.
(bb) “Purchase Date” - The date on which Seller has been advised in writing that
Purchaser has agreed to purchase an Account.
(cc) “Purchase Price” - The Face Amount of a Purchased Account.
(dd) “Purchased Accounts” - Accounts purchased hereunder which have not been
Closed.
(ee) “Repurchased” - An Account has been repurchased when Seller has paid to
Purchaser the then unpaid Face Amount.
(ff) “Required Reserve Amount” - The Reserve Percentage multiplied by the unpaid
balance of Purchased Accounts.
(gg) “Reserve Account” - A bookkeeping account on the books of the Purchaser
representing the portion of the Purchase Price which has not been paid by
Purchaser to Seller, maintained by Purchaser to ensure Seller's performance with
the provisions hereof.
(hh) “Reserve Percentage” - 100% less the Advance Rate.  The Reserve Percentage
may be increased or decreased at any time in Purchaser’s sole discretion.
(ii) “Reserve Shortfall” - The amount by which the Reserve Account is less than
the Required Reserve Amount.
(jj) “Term” – One Year.
(kk) “UCC” – The Uniform Commercial Code as adopted in the Chosen State.

[SIGNATURES AGREEING TO THE STANDARD TERMS AND CONDITIONS APPEAR ON THE FIRST
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