FACTORING AGREEMENT
ROSENTHAL & ROSENTHAL, INC.
1370 Broadway
New York NY 10018

New York, NY, July 7, 2010
SOUTHPEAK INTERACTIVE, L.L.C.
2900 Polo Parkway
Midlothian, VA 23113

The following is the Agreement under which we are to act as your sole
factor.  Capitalized terms shall have the meanings set forth in Section 14
hereof:

1.
Sales and Assignment:

You hereby sell and assign to us, making us absolute owner thereof, all of your
Receivables, and we shall have the right to collect and otherwise deal therewith
as the sole and exclusive owner thereof. Upon each sale of your Inventory or
rendition by you of services, you shall execute and deliver to us such further
and confirmatory assignments of your Receivables as we require, in form and
manner satisfactory to us, together with copies of invoices or such equivalent
electronic document as we may designate for such use, and all shipping or
delivery receipts and such other proof of sale and delivery or performance as
we, from time to time, may require.  All invoices (and other statements to
Customers) evidencing Receivables shall clearly state, in a manner satisfactory
to us, that each Receivable has been sold and assigned to and is payable only to
us.

2.
Credit and Approval:

You will submit to us for our credit approval the principal terms of each and
every Order.  We may, in our sole discretion, approve all or a portion of an
Order, by issuing a Credit Approval, withdraw any Credit Approval, withdraw or
adjust any Credit Line, or suspend any Availability under a Credit Line, at any
time before you deliver the Inventory or render the services.  In addition, we
may from time to time establish a Credit Line or Credit Lines pursuant to which
you may ship to Customers. No Credit Approval, including approval based upon
shipment against Availability under a Credit Line shall be effective unless (i)
the Inventory is shipped or the services rendered, within the time specified
therein, or if no time is specified, within thirty (30) days after the date our
Credit Approval is issued or if the Credit Approval specifies an outside date
for delivery or shipment, by such delivery or shipment date; (ii) the Customer
has accepted delivery of the Inventory or performance of the services; and (iii)
a confirmatory assignment of the Receivables(s) which arise as a result of the
Order which is the subject of the Credit Approval has been delivered to us,
within ten (10) days of the delivery of the goods or the performance of the
service.  Upon the effectiveness of a Credit Approval, we shall be deemed to
have accepted the Credit Risk to the extent of the dollar amount specified in
the Credit Approval and the Receivable which is the subject thereof shall, to
the extent of the amount specified in the Credit approval, be a Credit Approved
Receivable.  In no event, however, shall we have any Credit Risk on any
Receivable for freight, samples, or sales not made in the ordinary course of
your business.  We may, in our sole discretion, withdraw any Credit Approval, or
withdraw or adjust any Credit Line, at any time before you deliver the Inventory
or render the services.

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3.
Client Risk Receivables:

All CR Receivables are with full recourse to you and at your credit risk, but
are otherwise subject to the covenants, terms and conditions provided herein
with respect to Credit Approved Receivables.  We shall have the right to charge
back to your account the amount of CR Receivables at any time either before or
after their maturity and you agree to pay us upon demand the amount thereof to
the extent it was previously the basis for any advances made by us to you,
together with all expenses including collection charges and attorneys’ fees
incurred by us in attempting to collect or enforce any such payment.  In
addition, if we, at your request, and in our discretion, file a proof of claim
in any insolvency proceeding with respect to a CR Receivable and/or forward a CR
Receivable to an attorney or agency for collection, we shall charge your account
with (i) the fees and expenses of such attorney or collection agency and (ii) a
service charge equal to $100 plus 5% of any amount collected on the CR
Receivable.

4.
Returned Merchandise/Claims, Disputes and Chargebacks:

In the event of any material breach of any of the representations or warranties
contained herein with respect to a Receivable, or the assertion, with respect to
a Receivable, of a Dispute, or the payment of all or part of a Receivable by the
Customer obligated thereon, to a Person other than us, and any such Receivable
(whether or not a Credit Approved Receivable) shall thereupon become a CR
Receivable.  You shall notify us immediately of any Dispute, including, a
Customer’s return of or desire to return any Inventory purchased from you.  We
may, but are not obligated, to settle, compromise, adjust or litigate any
Dispute, including, a return of the related Inventory upon such terms as we deem
advisable.  We may, at our option, charge back to you all amounts owing on CR
Receivables which are not paid when due.  We shall have the right to charge back
to you the amount of any payment which we receive with respect to a CR
Receivable, if we are subsequently required to disgorge such payment for any
reason, including, such payment being deemed a preferential transfer.  A
chargeback shall not constitute a resale or reassignment to you of the
Receivable which is the subject thereof.  You agree to indemnify and save us
harmless from and against any and all loss, liability, claim, cost and expense
of any kind, caused by or arising from any Disputes with or claims of your
Customers or any Person or representative thereof, asserting an interest in
Receivables or payments thereon, including:  (i) any disputes or claims with
respect to terms, price, quality or otherwise with respect to Receivables; (ii)
any claim for a return of any payments with respect to Receivables (including
alleged preferential transfers with respect to payments on Receivables that were
not Credit Approved Receivables at the time the payment was received); (iii) any
claims by any governmental authorities (federal, state, municipal or otherwise)
for the turnover or payment to such governmental authority of all or any portion
of any payment received from a Customer which we paid to you and (iv) all
collection expenses and attorney’s (whether in-house or outside) fees incurred
with respect to any of the foregoing.  Your liability under this paragraph, and
that of any Person liable for the Obligations, shall constitute Obligations but
shall nonetheless be independent hereof and continue notwithstanding any
termination hereof.

5.
Representations, Warranties and Covenants:

You represent, warrant and covenant that:

5.1. you are fully authorized to enter into this Agreement and perform hereunder
and you will continue to be so authorized for the duration of this Agreement.
 
5.2. you are solvent.
 
5.3. the Receivables are, and shall be, at the time of their creation, bona
fide, existing and enforceable obligations of Customers arising out of sales
made or services rendered by you, free and clear of all security interests,
liens, claims and Disputes whatsoever other than Permitted Liens and in the
event that any such Receivables arise from the sale of good, such goods meet all
standards imposed by any governmental agency or authority.
 

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5.4. the Inventory is not subject to any security interest, lien or encumbrance
whatsoever, other than Permitted Liens, and you covenant that (i) you shall not
permit the Inventory to become so encumbered without our prior written consent;
and (ii) the Inventory meets all standards imposed by any governmental agency or
authority.
 
5.5. with respect to each Receivable as it arises: (i) you will have delivered
the Inventory or rendered the services pursuant to the Order; (ii) the Customer
will accept the Inventory and/or services without any offset or counterclaim;
(iii) no known Dispute will exist in any respect; (iv) you will have preserved,
and will continue to preserve, any liens and any other rights available to us by
virtue of this Agreement; and (v) the Customer will not be your Affiliate.
 
5.6. you will within ten days of our request therefor, provide us with copies of
invoices and shipping or delivery receipts or such equivalent electronic
documents as we may designate or other proof of sale and delivery or performance
as we may from time to time require.
 
5.7. you will not, without providing us with thirty (30) days prior written
notice thereof, change your name, your state of organization or your principal
place of business and you are not aware, and will upon your becoming aware,
notify us promptly, of any Person organizing under your name in another state.
 
5.8. (i) you will keep all Inventory at any time owned by you insured under
insurance policies naming us as loss payee and otherwise acceptable to us as to
form, issuer, amount and risks covered; (ii) you shall make no disposition of
the any Inventory except for sales to Customers in the ordinary course of
business; (iii) until sale to a Customer, all Inventory shall be kept only at
your premises set forth above or at Ditan Distribution 909 Whitaker Road,
Plainfield, NJ 46168-7433, or at such other locations as we may approve in
writing (it being understood that any Ditan facility shall be acceptable to us
provided you give us reasonable prior notice thereof); and (iv) you shall from
time to time provide to us reports as to the Inventory owned by you, with such
detail and frequency as we shall require.
 
5.9. you do not transact business under any trade names or tradestyles except as
set forth on an Exhibit annexed hereto and with respect to any such tradename or
tradestyles you have (i) caused the same to be registered in accordance with the
laws applicable to the use of such tradenames or tradestyles and have not in any
way assigned or encumbered your interest in such tradenames or tradestyles; or
(ii) obtained a license to use such tradenames or tradestyles from the owner
thereof with respect to the goods or services sold by you under such tradenames
or tradestyles, and in the markets in which such goods or services are sold by
you; and you are not aware, and will upon your becoming aware, promptly notify
us, of any other Person using your name or any of your tradenames or tradestyles
in any similar line of business.
 
5.10. you are, and at all times during the term of this Agreement, shall be,
duly organized, existing and in good standing under the laws of the state of
your organization; and you are, and at all times during the term of this
Agreement, shall be, duly qualified, existing and in good standing in every
state in which the nature of your business requires you to be so qualified.
 
5.11. to the extent that any advances requested by you under this Agreement
shall be used for paying wages of your employees, you shall withhold and pay
over to the applicable tax authorities any amounts thereof as it shall be so
required by applicable law.
 

6.
Commissions and charges:

6.1. For our services hereunder, we shall receive a factoring commission
(hereinafter referred to as the “Base Commission”) of (i) 0.60% of the gross
invoice amount of each Receivable assigned to us; plus (ii) on those Receivables
due from a Customer (or any Affiliates or subsidiaries of such Customer) listed
on the Special Accounts Schedule submitted herewith and/or from time to time
hereafter, such percentage of the gross invoice amount thereof as equals the
surcharge set forth on the Special Accounts Schedule, to the extent of the
amount credit approved.  All commissions shall be due and payable and chargeable
to your account with us at the date a Receivable arises.
 

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6.2. Our charge specified in Section 6.1 hereof is based upon maximum selling
terms of 90 days for any Receivables due from Wal-Mart Stores, Inc., and 60 days
for any Receivables due from any other Customer, and no more extended terms or
additional dating shall be granted by you to any Customer without our prior
written approval.  If such approval is given by us, then for each additional
thirty (30) days or part thereof of such extended terms or additional dating,
our charge with respect to the Receivables covered thereby shall be increased by
an amount equal to the greater of (x) one quarter of one percent (1/4 of 1%) of
the invoice amount of such Receivable; or (y) twenty-five percent (25%) of the
charge specified in Section 6.1 hereof.  In addition, we shall charge you a fee
of $5.00 for each instance in which you change the terms of sale of any
Receivable after you have submitted to us a confirmatory assignment schedule
listing such Receivable.
 
6.3. The minimum aggregate Base Commission payable under this Agreement shall be
(i) $360,000 for the consecutive period from the Effective Date through July 31,
2011, (ii) $210,000 for the consecutive 7 month period thereafter, and (iii)
$360,000 for each Contract Period thereafter, which shall be fully earned by us
at the beginning of each such period, and which to the extent of any deficiency
(after giving effect to the commissions paid under Section 6.1), shall be
chargeable to your account with us on a monthly basis (i.e., such minimum
commissions shall be charged to your account, if at all, each month in an amount
equal to the difference between (x) the product of (A) $30,000 and (B) the
number of months elapsed within the relevant period specified in the foregoing
clauses (i), (ii) and (iii) above, and (y) the cumulative period to date
commissions paid under Section 6.1 during such period).
 
6.4. You shall pay to us a closing fee payable on the Effective Date in the
amount of $50,000 due at the closing of this Agreement.
 

7.
Purchase Price; Interest Rate, Advances and Reserves:

7.1. The purchase price for each Receivable shall be the invoice amount of the
Receivable, less (i) returns (whenever made); (ii) selling discounts, credits or
deductions of any kind allowed, granted to or taken by the Customer at any time;
and (iii) our commission provided for in Section 6 hereof.  No discount, credit
or allowance with respect to any Receivable shall be granted by you, other than
(provided no Default shall have occurred and be continuing) in the ordinary
course of business for discounts and allowances for slow moving inventory, and
no return of Inventory shall be accepted by you without our prior written
consent.  A discount, credit or allowance may be claimed only by the
Customer.  All amounts collected against the purchase price shall be credited to
your account on the Payment Date.
 
7.2. In our sole discretion, in accordance with the terms of this Agreement, we
will, from time to time at your request, advance to you, sums up to the lesser
of (a) 65% of the aggregate Net Amount of Eligible Receivables outstanding at
the time any such advance is made less the Reserves, if any (the “Receivable
Availability”); and (b) $10,000,000 (the “Loan Cap”). In our sole discretion the
Loan Cap may be increased by an amount equal to the lesser of (i) an amount
equal to the ratio of two times any increase in your equity above the
shareholders’ equity reflected on your Financial Statement for the Fiscal
Quarter ended March 31, 2010 (in the determination of which, any of your debt
subordinated to us on terms satisfactory to us, shall be deemed stockholders
equity as opposed to a liability; or (ii) $3,000,000.
 

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7.3.  You will pay to us interest on the daily balance of all monies, paid or
otherwise advanced to you or for your account net of all payments received from
you or on your behalf.  Interest upon the daily net balance of any monies
remitted, paid or otherwise advanced to or for your account before the Payment
Date (or interest applicable on the charges and expenses hereinabove or
hereinafter referred to) will be charged to you at a rate per annum equal to the
Interest Rate.  Interest will be charged to your account monthly in arrears.  We
may, in our sole discretion, and shall, upon your request, remit to you, at any
time, any amount standing to your credit on our books.  Interest, as calculated
above, will also be charged to you on all other Obligations, except those
specifying a different rate, from the date incurred through the date paid. That
portion of advances made by us to you which is in excess of the Receivable
Availability shall bear interest at the Overadvance Rate.  Upon the occurrence
of a Default, and for so long as such Default continues, the Obligations shall,
at our option, bear interest at the Default Rate.  Interest shall be calculated
on the basis of a three-hundred-sixty (360) day year for the actual number of
days elapsed.  In no event shall any applicable interest rate under this
Agreement exceed the maximum rate permitted by applicable law and in the event
excess interest is paid, it shall be considered a repayment of principal.
 
7.4. Where the cause of non-payment of a Credit Approved Receivable which has
become more than 120 days past due, is solely the Customer’s financial inability
to pay, then the Receivable, to the extent of the then effective Credit
Approval, shall be deemed to be collected if it is not otherwise subject to
chargeback to you under this Agreement
 

8.
Statement Of Account and Expenses:

8.1. You shall pay to us any Obligations upon demand. You hereby irrevocably
authorize and direct us to charge at any time to your account any Obligations
owing to any of our Affiliates by charging your account.
 
8.2. We will render a statement of account monthly to you, and such statement
shall be binding upon you, except for specific matters which you contest and of
which we are notified in writing to the contrary, within thirty (30) days after
the date of such statement.
 
8.3. You shall pay all reasonable expenses (including attorneys, both in-house
and outside, fees) incurred by us in connection with the preparation and
execution of this Agreement and any other documents or agreements in connection
with or related to this Agreement, and the relationship established in
connection herewith and/or the transactions contemplated hereby, including,
expenses incurred in connection with the filing of financing statements under
the UCC and the making of record searches.  We may also charge to your account
any fees, costs or other expenses we incur to eliminate or cure any lack of
capacity that we may now or hereafter have to maintain an action in the courts
of any state to enforce payment or Receivables due from Customers located in
such state by reason of your acts or omissions, including your failure to
qualify as a foreign entity in such state or any other failure on your part to
observe the laws of such state that are applicable to you or your assets. You
shall also pay to us such fees as we may charge from time to time for, among
other things, wire transfers, agings and special reports.  In connection with
our examinations of your books, records and operations you shall pay all of our
out-of-pocket expenses plus for each examiner the Standard Examiner’s Rate in
effect at the time of any such examination, provided that, as long as no Default
shall have occurred and be continuing we shall not conduct more than two such
examinations in any calendar year and you shall not be required to pay any
amounts therefor in excess of $7,500 per calendar year.  In connection with our
administration of this Agreement, our liquidation of any Collateral, settlement
of any Dispute, or enforcement of any Obligation, or our protecting, preserving
and enforcing our security  interests and rights hereunder, whether through
judicial proceedings or otherwise, or in defending or prosecuting any actions or
proceedings arising out of or relating to our transactions with you, including
actions or proceedings that may involve any Person asserting a priority or claim
with respect to the Collateral, all costs and expenses incurred, including,
attorneys’ (both in-house and outside) fees incurred by us, shall be borne and
paid for by you, and may, at our option, be charged to your account with
us.  Your reimbursement obligations pursuant to this paragraph shall survive
termination of this Agreement.
 

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8.4. No delay or failure on our part in exercising any right, privilege, or
option hereunder shall operate as a waiver of such or of any other right,
privilege, or option, and no waiver, amendment, or modification of any provision
of this Agreement shall be valid, unless in a writing signed by us and then only
to the extent therein stated.  Should any provision of this Agreement be
prohibited by or invalid under applicable law, the validity of the remaining
provisions shall not be affected thereby.  Unless otherwise specifically
provided in this Agreement, any notices, requests, demands or other
communications permitted or required to be given under this Agreement shall be
in writing and shall be sent by facsimile, hand delivery or by a nationally
recognized overnight delivery service, to the addresses and facsimile numbers of
the parties set forth below (or to such other address or facsimile number as a
party may hereafter designate by a notice to the other that complies with this
section) and shall be deemed given (a) in the case of a notice sent by
facsimile, when received by the recipient if the sending party receives a
confirmation of delivery from its own facsimile machine;  and (b) in the case of
a notice that is hand delivered or sent by such overnight courier, when
delivered (provided that the sending party retains a confirmation of
delivery).  Any notice which, pursuant to the terms hereof must be sent by you
by certified or registered mail shall be deemed given and effective when
received by us.
 
If to us
If to you
Rosenthal & Rosenthal, Inc.
1370 Broadway
New York NY 10018
Attn: David Flaxman, Esq., with a copy to J. Michael Stanley
Facsimile: (212) 356-0989
SouthPeak Interactive, L.L.C.
2900 Polo Parkway
Midlothian, VA 23113
 
   

8.5 The headings used herein are intended to be for convenience of reference
only and shall not define or limit the scope, extent or intent or otherwise
affect the meaning of any portion hereof.
 

9.
Payments:

9.1. All remittances obtained by you against Receivables will be received in
trust for us, and you will turn over to us the identical remittances as speedily
as possible; provided, however, that nothing herein authorizes you to collect
Receivables.  You constitute us, or any other entity or person whom we may
designate, as your attorney in fact at your own cost and expense to exercise, at
any time, all or any of the following powers which, being coupled with an
interest, shall be irrevocable until this Agreement has been terminated and you
have fully and indefeasibly paid and discharged all Obligations (a) to sign
and/or endorse your name on all remittances and all papers, bills of lading,
receipts, instruments and documents relating to the Receivables and the
transactions between us; (b) to deposit any checks or other remittances received
relating to the Receivables regardless of notations or conditions placed thereon
by your customers or deductions reflected thereby and to charge the amount of
any such deductions to your account; and (c) to sign your name to any and all
documents necessary to cure or eliminate any lack of capacity that we may now or
hereafter have, by reason of your acts or omissions, to maintain an action in
the courts of any state to enforce payment of Receivables due from Customers
located in such state and to file such documents with the appropriate public
officials or agencies.
 
9.2. If any payment or recovery is received from or on behalf of a Customer
which is a Customer on both Credit Approved Receivables and CR Receivables, any
such payment or recovery may be first applied to the Credit Approved Receivables
notwithstanding (i) any notation to the contrary on or with respect thereto;
(ii) the payment terms thereof; (iii) the due date thereof; or (iv) whether such
payments were made in the ordinary course of business or otherwise.
 

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10.
Security Interest; Financing Statements:

10.1. To secure all of the Obligations, you hereby grant to us a security
interest in all of your Accounts, Instruments, Chattel Paper, Documents,
Investment property, General Intangibles, Deposit Accounts, Letter of Credit
Rights, Inventory, property at any time in our possession, and the Reserves
(whether or not any of the foregoing are specifically assigned to us), in each
case whether currently owned or hereafter acquired by you and whether now
existing or hereafter arising (whether before, during the effectiveness of, or
after the termination of this Agreement) and wherever located, any security and
guarantees therefor, in any goods or property represented thereby, in all of
your books and records relating to the foregoing, and any equipment containing
such books and records, in all sums of money at any time to your credit with us,
all of your present and future claims against us under or in connection with
this Agreement and in all Proceeds. For the avoidance of doubt we shall have no
interest in that certain real property owned by you at 2301 Mustang Drive,
Grapevine, Texas and 2563 SW Grapevine Parkway, Grapevine Texas. Without in any
way limiting the generality of the foregoing, you further sell, and assign to us
and grant to us a security interest, in your rights as an unpaid vendor or
lienor, all of your rights of stoppage in transit, replevin and reclamation
relating thereto, and all of your rights against third parties with respect
thereto.  You will cooperate with us in exercising any rights with respect to
any of the foregoing.
 
10.2. You authorize us to file financing statements and any and all other
documents that may now or hereafter be provided for by the UCC to reflect and/or
perfect any security interest now or hereafter granted by you to us in any of
your presently owned or hereafter acquired property.  In the event that any
jurisdiction requires a debtor’s signature on such financing statements and/or
such other documents, you authorize us to file such financing statements and/or
other documents on your behalf as your attorney in fact, which such power being
coupled with an interest, shall be irrevocable until this Agreement has been
terminated and you have fully and indefeasibly paid and discharged all of the
Obligations.
 

11.
Books and Records/Financial Statements:

We and our representatives shall, at all reasonable times, have the right to
examine all of your books and records.  You agree to prepare and furnish to us
within sixty (60) days after the close of each of your fiscal quarters,
financial statements reviewed and in such form and detail as we may reasonably
require.  You also agree to have prepared, and to furnish to us within ninety
(90) days after the close of each of your fiscal years, financial statements, in
accordance with GAAP, which have been reviewed by an independent certified
public accountant satisfactory to us.

12.
Term:

This Agreement shall commence on the date hereof, shall continue for one
Contract Period and shall automatically renew at the end of each Contract Period
for an additional Contract Period.  Notwithstanding the foregoing, this
Agreement may be terminated (i) by us at any time, on not less than sixty (60)
days prior written notice to you; or (ii) by you, effective at the end of a
Contract Period provided you give us notice in writing, by registered or
certified mail, not less than thirty (30) days, and not more than sixty (60)
days prior to the expiration of the then effective Contract Period, of your
intention to terminate this Agreement as at the end of such Contract Period; or
(iii) by you, at any time, upon your written request to us to terminate this
Agreement effective as of the date set forth in such request provided that (x)
we in our sole discretion agree to such request and (y) you pay to us an Early
Termination Fee upon the effective date of such termination (unless your request
is solely based upon our having ceased making advances to you altogether such
that the amount of your outstanding Obligations to us has become $0).  In the
event of a Default, we shall have the right to terminate this Agreement at any
time without notice, and you shall owe us an Early Termination Fee calculated as
of the date of such termination. The Early Termination Fee shall become
automatically due and payable in the event a petition is filed by or against you
under any provision of Title 11 of the United States Code. Our rights and the
Obligations arising out of transactions having their inception prior to the
termination date shall not be affected by any termination or notice thereof, nor
shall any transaction which by its terms survives termination.  Any receivable
which is a Credit Approved Receivable as of the date of Termination and in
respect of which such Credit Approval could not have been withdrawn by us
pursuant to Section 2 hereof as of such date of Termination shall remain a
Credit Approved Receivable (except to the extent a Dispute thereafter arises
with respect thereto) notwithstanding such Termination and our right and
obligations in respect thereof shall survive such Termination. Any other
Receivable shall automatically become a CR Receivable as of the date of such
Termination. Termination of this Agreement shall not become effective in respect
of the liens and security interests granted to us hereunder until you have fully
and indefeasibly paid and discharged all Obligations, and until such time, you
shall continue to furnish confirmatory assignments and  schedules of Receivables
to us and deliver and pay over to us all Proceeds in respect thereof.  After the
giving of any notice of termination hereunder and until the full liquidation of
your account and the indefeasible payment in full of all Obligations, you shall
not be entitled to receive any equities or payments from us, to the extent we
are obligated to make payments to you under this Agreement.  From and after the
effective date of termination, all amounts charged or chargeable to your account
hereunder, and all other Obligations, shall become immediately due and payable
without further notice or demand.

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13.
Governing Laws/Jury Trial Waiver/Jurisdiction/Venue and Miscellaneous
Provisions:

This Agreement is deemed made in the State of New York and shall be governed,
interpreted and construed in accordance with the laws of the State of New York,
applicable to contracts made and to be performed within such state. No
modification, waiver or discharge of this Agreement shall be binding upon us
unless in writing and signed by us.  Our failure, at any time, to exercise any
right or remedy hereunder, shall not constitute a waiver on our part with
respect to such right or remedy, nor shall such failure preclude us from
exercising the same or any other right or remedy at any subsequent time.  If any
taxes are imposed upon us, or if we shall be required to withhold or pay any tax
or penalty because of or in connection with any transactions between us under
this Agreement, you shall indemnify us and hold us harmless in respect
thereof.  This Agreement embodies our entire agreement as to the subject matter
hereof and supersedes all prior agreements (whether oral or written) as to the
subject matter hereof.  TRIAL BY JURY IS HEREBY WAIVED BY EACH OF US IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF US AGAINST THE OTHER ON
ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
AGREEMENT OR THE RELATIONSHIP CREATED HEREBY (WHETHER SOUNDING IN TORT OR
CONTRACT).  YOU HEREBY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE SUPREME
COURT OF THE STATE OF NEW YORK (OR THE CIVIL COURT OF THE CITY OF NEW YORK IF
SUCH MATTERS BE WITHIN ITS JURISDICTION), AND OF ANY FEDERAL COURT IN SUCH
STATE, IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR A DETERMINATION OF ANY
DISPUTE AS TO ANY SUCH MATTERS.  IN CONNECTION THEREWITH, YOU HEREBY WAIVE
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS AND AGREE THAT
SERVICE THEREOF MAY BE MADE BY REGISTERED OR CERTIFIED MAIL DIRECTED TO YOU AT
YOUR ADDRESS SET FORTH ABOVE, OR SUCH OTHER ADDRESS AS SHALL HAVE PREVIOUSLY
BEEN COMMUNICATED TO US BY REGISTERED OR CERTIFIED MAIL.  WITHIN THIRTY DAYS
AFTER SUCH MAILING, YOU SHALL APPEAR OR ANSWER TO SUCH SUMMONS, COMPLAINT OR
OTHER PROCESS.  SHOULD YOU FAIL TO APPEAR OR ANSWER WITHIN SAID THIRTY DAY
PERIOD, YOU SHALL BE DEEMED IN DEFAULT AND JUIDGMENT MAY BE ENTERED BY US
AGAINST YOU FOR THE AMOUNT AS DEMANDED IN ANY SUMMONS, COMPLAINT OR OTHER
PROCESS SO SERVED.  In the event we shall retain attorneys for the purpose of
enforcing the performance, payment or collection of any of the Obligations, then
and in that event you agree to pay the fees of such attorneys, plus any and all
expenses and disbursements incurred in connection therewith and/or incidental
thereto.  Our books and records shall be admissible as prima facie evidence of
the status of the account between us.  The use of “including” or “include” means
“including (or “include”), without limitation.”  The use of “or” means “and/or”
if the context so permits or requires.  The term “satisfactory to us” as used
herein shall mean “satisfactory to us in our sole and absolute discretion”. You
will not seek advice or counsel from us or any of our representatives with
respect to the management or operation of your business and if you deem such
advice or counsel to have been offered, directly or indirectly, you will
evaluate it and act or decline to act upon it based upon your own analysis
and/or the advice or counsel of your own independent expert(s) or
consultant(s).  You agree that there is no fiduciary relationship between us or
our representatives and you or any other entity, affiliated or controlled by
you, and that you will not seek or attempt to establish any such fiduciary
relationship.  You hereby expressly waive any right to assert, now or in the
future, that there was or is a fiduciary relationship between you and us and/or
our representatives in any action, proceeding or claim for damages. If any
provision of this Agreement shall for any reason be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and this Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.  This Agreement shall
be binding upon and inure to the benefit of each of us and our respective heirs,
executors, administrators, successors and assigns, provided, however, that you
may not assign this Agreement or your rights hereunder without our prior written
consent.

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14.
Definitions:

As used in this Agreement, these terms shall have the following meanings which
shall be applicable to both the singular and plural forms of such terms.

“Accounts” shall have the meaning set forth in Article 9 of the UCC.

“Affiliate” of a Person shall mean any entity controlling, controlled by, or
under common control with, the Person and the term “controlling” and such
variations thereof shall mean ownership of a majority of the voting power of a
Person, or the contractual power to control such Person’s affairs.

“Agreement” shall mean this Factoring Agreement, as amended, modified or
supplemented.

“Availability under a Credit Line” shall mean the unused amount of a Credit
Line, unless otherwise suspended by us at any time (e.g., when Receivables due
from the Customer under a Credit Line are a certain number of days past due) and
communicated to you in writing or by such electronic means as may be designated
by us to you.

“Bank” shall mean JPMorgan Chase Bank or any successor thereto.

“Base Commission” shall have the meaning set forth in Section 6.1 hereof.

“Business Day” shall mean a day on which we and major banks in New York City are
open for the regular transaction of business.

“Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.

“Collateral” shall mean any property or rights in property whenever arising
which now or hereafter secure any of the Obligations.

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“Contract Period” shall mean (i) the consecutive 19 period following the last
day of the month in which the Effective Date falls; and  (ii) each consecutive
12 month period thereafter.

“Credit Approval” shall mean either (i) a notice from us to you, in writing or
by such electronic means as may be designated by us, that we have approved all
or a portion of an Order; or (ii) Availability under a Credit Line.

“Credit Approved Receivable” shall mean a Receivable for which we have assumed
the Credit Risk.

“Credit Line” shall mean a line of credit, established by us and communicated
from time to time to you in writing or by such electronic means as may be
designated by us to you, granting approval for sales by you, or rendition of
services by you to a Customer, billed at a specified location or locations, up
to a specified aggregate available amount.

 “Credit Risk” shall mean the risk of loss resulting from a Customer’s failure
to pay a Credit Approved Receivable on the due date solely because of the
Customer’s financial inability to make such payment.

“CR Receivable” shall mean any Receivable which is not a Credit Approved
Receivable.

“Customer” shall mean any Person obligated on a Receivable.

“Default” shall mean the occurrence of any of the following events: (1.)
nonpayment when due of any amount payable on any of the Obligations; (2.)
failure to perform any agreement or meet any obligation in this Agreement or in
any agreement out of which any of the Obligations arose (provided that to the
extent that such an event or occurrence consists of your failure to take, do or
perform an act or action other than making a payment to us when due, then such
failure shall not constitute a Default if no other Default has occurred and if
such act or action is taken, done or performed by you within 5 Business Days
after your receipt of written notice from us that the act or action is required
to be taken, done or performed by you and has not been taken, done or
performed); (3.) breach or failure to continue to be true and accurate in all
material respects of any covenants, representation, warranty or agreement
whenever made by you to us, whether pursuant to this Agreement or otherwise;
(4.) default by you in repayment, when due, of any indebtedness now or hereafter
owed for monies borrowed from anyone other than us (unless the Person to whom
such payment is owed has agreed to a subordination to us, on terms satisfactory
to us, of all such payments, and a standstill of all of their rights and
remedies with respect thereto, until such time as this Agreement has been
terminated and the Obligations to us have been indefeasibly paid in full); (5.)
any statement, or warranty of yours made orally or in writing or in any other
writing in or in connection with this Agreement or statement at any time
furnished or made by you to us is untrue in any respect as of the date furnished
or made; (6.) suspension of the operation of your business; (7.) any Obligor
becomes insolvent or unable to pay debts as they mature (provided that with
respect to all of the Obligors other than you and Terry Phillips, the foregoing
shall be determined on a consolidated basis), makes an assignment for the
benefit of creditors, or a proceeding is instituted by or against any Obligor
alleging that such Obligor is insolvent or unable to pay debts as they mature,
or a petition under any provision of Title 11 of the United States Code, as
amended, is brought by or against any Obligor; (8.) death of any Obligor who was
a natural person, or death or withdrawal of any partner of any Obligor which is
a partnership, or death or withdrawal of any member or any Obligor which is a
limited liability company, or dissolution, merger or consolidation of any
Obligor which is a corporation or limited liability company (unless, with
respect to any of the foregoing pertaining to the death of any individual, a
replacement therefor satisfactory to us is provided within 30 days, it being
understood and agreed that during such time, notwithstanding any requirement
under the law or otherwise that we exercise good faith in exercising our
discretion to make advances to you at any time, we shall not be required to make
any advances to you and shall not be subject to any such good faith requirements
during such time), (9.) sale, transfer or exchange, either directly or
indirectly, of a controlling interest resulting in a change of control in your
membership or Southpeak Interactive Corporation’s stock; (10.) termination or
withdrawal of any guaranty of the Obligations or failure of a Person who has
executed such a guaranty, to provide to us, no later than 5 days following the
anniversary of the Effective Date in each year, a financial statement, signed by
such Person, that is satisfactory to us as to form and that reflects, as of such
anniversary of such Effective Date, a tangible net worth that is not less than
75% of the tangible net worth shown on the last financial statement provided to
us by such Person (provided that other than with respect to your equity and
Terry Phillips’ tangible net worth, the foregoing shall be determined on a
consolidated basis for all other Obligors, and further provided that with
respect to determining your equity, any of your debt subordinated to us on terms
satisfactory to us, shall be excluded from your liabilities); (11.) appointment
of a receiver for any collateral pledged for the Obligations or for any of your
property, or the property of any Obligor, in which we have an interest; (12.)
the Pension Benefit Guaranty Corporation shall commence proceedings under
Section 4042 of the Employee Retirement Income Security Act of 1974 (ERISA) to
terminate any of your employee pension benefit plans; (13.) any litigation shall
be commenced against you that could reasonably be expected to have a material
adverse effect on your business; (14.) we, in good faith, deem the prospect of
your payment or performance of the Obligations to have been impaired; or (15.)
we, in good faith, deem ourselves insecure.

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“Default Rate” shall mean the rate which is three percent (3%) per annum in
excess of the Overadvance Rate .

“Deposit Account” shall have the meaning set forth in Article 9 of the UCC

“Deposit Date” shall mean with respect to a payment of a Receivable from or on
behalf of a Customer, (i) in the case of a payment that is received by a banking
institution and deposited into our account with it (x) prior to 12:00 noon on
any day the date such banking institution makes such deposit into our account;
(y) after 12:00 noon on any day, the following Business Day; and (ii) in all
other cases, the Business Day following the date that the payment is actually
received by us.

“Dispute” shall mean  (i) any dispute, claim, offset, defense, counterclaim or
any other reason (including, merchandise returns) or no reason for nonpayment of
or any refusal to pay all or a portion of any receivable other than a customer’s
financial inability to pay, regardless of whether the same is in an amount
greater than, equal to or less than the Receivable concerned, whether bona fide
or not, and regardless of whether the same, in part or whole, relates to an
unpaid Receivable or any other Receivable; and (ii) or the payment of all or
part of a Receivable by the Customer obligated thereon, to a Person other than
us, and an act of God, force majeure, the acts of restraint of public
authorities whether domestic or foreign, civil strife, war or currency
restrictions or fluctuations resulting in nonpayment of all or any portion of
any Receivable.

“Documents” shall have the meaning set forth in Article 9 of the UCC.

“Effective Date” shall mean the date specified on the upper right portion of the
first page of this Agreement.

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“Early Termination Fee” shall mean the amount that you and we agree will
compensate us for the damages we will sustain if this contract is terminated by
you prior to the end of a Contract Period or by us due to a Default by you or
automatically as the result of the filing by or against you of a petition under
any provision of Title 11 of the United States Code.  The Early Termination Fee,
which you and we have agreed represents a reasonable approximation of the amount
of such damages (due to the impossibility of calculating such amount in
advance), shall be equal to, whichever is greater, (i) 100% of the average of
all fees and charges payable by you to us under Sections 6.1, 6.2, 6.3,  and 7.3
of this Agreement each month during the portion of the then current Contract
Period that had elapsed prior to the date of such termination or filing of such
petition, multiplied by the number of whole or partial calendar months remaining
during the unexpired portion of such Contract Period; or (ii) the minimum
factoring commission pursuant to Section 6.3 hereof, for the then current
Contract Period (less the amount of all commissions actually already paid by you
pursuant to such section during such Contract Period), it being understood that
the Early Termination Fee is in lieu of the payment of any minimum aggregate
Base Commission for the unexpired portion of the then current Contract Period.

 “Eligible Receivables” shall mean, at the time of the calculation thereof all
Receivables less (i) any Receivables subject to a Dispute, (ii) any CR
Receivables, (iii) any Receivables owing from a Customer whose total obligations
to you exceed fifty percent (50%) of all Eligible Receivables; and (iv) any
Receivables which we in our sole discretion deem not to be Eligible Receivables.

“GAAP” shall mean generally accepted accounting principles in the United States
of America as in effect from time to time as set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board which are applicable to the circumstances
as of the date of the determination consistently applied.

“General Intangibles” shall have the meaning set forth in Article 9 of the UCC
(and shall include tradenames, trademarks, tradestyles, service marks,
copyrights and patents and all your rights and claims against us hereunder or
otherwise).

“Guarantor” shall mean any Person, other than you, liable primarily or
secondarily, directly or indirectly, on any of the Obligations.

“Instruments” shall have the meaning set forth in Article 9 of the UCC.

“Interest Rate” shall mean the greater of (i) the Prime Rate plus 1.5% per
annum; or (ii) 6.5% per annum. Any change in the Interest Rate shall be
effective as of the date of any change in the Prime Rate.
 
“Inventory” shall have the meaning set forth in Article 9 of the UCC.

“Investment Property” shall have the meaning set forth in Article 9 of the UCC.

 “Letter of Credit Rights” shall have the meaning set forth in Article 9 of the
UCC.

"Net Amount of Eligible Receivables" shall mean the Net Amount of Receivables
for all Eligible Receivables.

 “Net Amount of Receivables” shall mean the gross amount of Receivables, less
maximum discount, less returns, less credits or allowances of any nature at any
time issued, owing, granted or outstanding, and less also our commission as set
forth herein.

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“Obligations” shall mean all obligations, advances, liabilities and indebtedness
of you or your Affiliates to us or any of our Affiliates, however evidenced,
arising under this Agreement, under any other or supplemental financing provided
to you or an Affiliate, or independent hereof or thereof, whether now existing
or incurred from time to time hereafter and whether before or after termination
hereof, absolute or contingent, joint or several, matured or unmatured, direct
or indirect, primary or secondary, liquidated or unliquidated, and whether
arising directly or indirectly or acquired from others (whether acquired
outright, by assignment, unconditionally or as collateral security from another
and including, participations or interest obligations to others), and including,
all of our charges, commissions, fees, interest, expenses, costs and attorneys’
fees chargeable to you in connection therewith, and all of your obligations to
us as an indemnitor pursuant to the terms of this Agreement.

“Obligor” shall mean you and each other Person (including, any Guarantor or
direct or indirect provider of collateral) primarily or secondarily, directly or
indirectly, liable on, or providing collateral for, any of the Obligations.

“Order” shall mean any purchase order or equivalent document for the sale by you
of goods or the rendition by you of services.

“Overadvance Rate” shall mean the rate which is three percent (3%) per annum in
excess of the Interest Rate as adjusted pursuant to Section 7.3 hereof.

“Payment Date” with respect to a Receivable shall mean the date which is 5
Business Days after the Deposit Date thereof.

“Permitted Lien” shall mean (i) security interests in certain assets of you in
favor of your shareholders, who currently have such security interests to secure
the repayment of indebtedness owned to them by you, which are currently in the
aggregate principal amount of $950,000 with agreements to increase such
aggregate principal amounts to up to $2,000,000, provided that such liens must
be subordinated to any and all liens now or hereafter in our favor and subject
to a standstill of all remedies, and the payment of such indebtedness must be
subordinated to the payment of any and all amounts now or hereafter owing to us,
and (ii) any other lien or security interest to which we have specifically
consented in writing, subject to any limitation set forth in such writing.

“Person” shall mean any individual, sole proprietorship, partnership, joint
venture, trust, non-registered organization, association, corporation, Limited
Liability Company, government or any subdivision, agency or political
subdivision thereof or any other entity.

“Prime Rate” shall mean the rate of interest from time to time publicly
announced in New York City by the Bank as its prime rate.  The Prime Rate may
not be the lowest or best rate charged by the Bank.

“Proceeds” shall mean all proceeds (as set forth in Article 9 of the UCC),
products, rents and profits of or from any and all of the Collateral and, to the
extent not otherwise included in the foregoing; (i) all payments under any
insurance, indemnity, warranty or guaranty with respect to any of the
collateral, (ii) all payments in connection with any requisition, condemnation,
seizure or forfeiture with respect to any of the Collateral, (iii) all claims
and rights to recover for any past, present or future infringement or dilution
of or injury to any Collateral; and (iv) all other amounts from time to time
paid or payable under or with respect to any of the Collateral, including
licensing and royalty fees.

“Receivable Availability” shall have the meaning set forth in Section 7.2
hereof.

 “Receivables” shall mean all Accounts, Instruments, Chattel Paper, Documents,
Investment Property and General Intangibles arising from your sales of Inventory
or performance of services (other than as a result of inter-company receivables,
cash-in-advance payments of receivables and amounts do to you for the licensing
of any rights to third parties), and the Proceeds thereof, and all Supporting
Obligations, whether now existing or hereafter created.

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“Reserves” shall mean any set asides, reductions or reserves which we may
establish, from time to time, in our sole option and in our sole discretion in
connection with any financial accommodations which we may make available to you
in connection with this Agreement.

“Special Account Schedule” shall mean a schedule issued, from time to time,
listing thereon surcharge commissions applicable to Receivables owing from the
Customers listed thereon.

“Standard Examiner Rate” shall mean the per diem rate per examiner established
by us from time to time.  The Standard Examiner Rate on the date hereof is $850.

“Supporting Obligations” shall have the meaning set forth in Article 9 of the
UCC.

“UCC” shall mean the Uniform Commercial Code as the same may be in effect
(subject to revision, from time to time) in the State of New York.

YOU ACKNOWLEDGE THAT WE HAVE ADVISED YOU TO CONSULT WITH AN ATTORNEY PRIOR TO
YOUR EXECUTION OF THIS AGREEMENT.

ROSENTHAL & ROSENTHAL, INC.

By:______________________
Name:  J. Michael Stanley
Title:    Managing Director

AGREED:

SOUTHPEAK INTERACTIVE, L.L.C.

By: 
SOUTHPEAK INTERACTIVE CORPORATION, Sole Member/Manager

By:______________________
Name: Terry Phillips
Title: Chairman

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