Exhibit 10.21

    
 

    ACCOUNTS RECEIVABLE PURCHASE
AGREEMENT

    


    THIS ACCOUNTS RECEIVABLE PURCHASE
AGREEMENT (this “Agreement”) is made
on this 11th day of March, 2009, by and between REPUBLIC CAPITAL ACCESS, LLC, a
Delaware limited liability company having its principal place of business at
1818 Library Street, Reston, Virginia 20190 (“Buyer”), and Lattice
Incorporated, Ricciardi Technologies, Inc. and Systems Management Engineering,
Inc. having its principal place of business at 2411 Dulles Corner Park, Suite
220, Herndon, VA 20171 (collectively “Seller”).

    


    WHEREAS, Buyer and RCA have
performed, or have caused to be performed, all necessary due diligence and have
determined that Seller is an Eligible Contractor; and

    


    WHEREAS, Seller desires to
sell certain Receivables that it now owns and from time to time hereafter will
own to Buyer, and Buyer is willing, on the terms and subject to the conditions
contained in this Agreement, to purchase such Receivables from Seller at such
time; and

    


    NOW, THEREFORE, in
consideration of the mutual agreements, provisions and covenants contained
herein, the parties hereto agree as follows:

    


    SECTION
1

    DEFINITIONS

    


    1.1    Definitions. Certain
terms used in this Agreement are defined in this Section 1.1. 
These terms, and the additional terms defined above, shall have the meanings
assigned wherever the terms appear in this Agreement. These meanings are also
applicable to the singular and plural forms of the terms defined.

    


    “Acceptance Date”
shall have the meaning set forth in Section 2.2
hereof.

    


    “Account Balance”
shall mean, on any given day, the gross amount of all the Purchased Receivables
or any portion thereof unpaid on that day.

    


    “Account Debtor” shall
have the same meaning set forth in the UCC and shall include any person liable
on any Purchased Receivable, including, without limitation, the Government and
any guarantor of such Purchased Receivable.

    


    “Accrual Period” shall
mean, with respect to any Residual Payment Date, the period from, and including,
the immediately preceding Residual Payment Date through, but excluding, such
Residual Payment Date; provided, however, that the
initial Accrual Period shall commence on the date hereof.

    


    “Applicable Law” shall
mean all provisions of laws, statutes, rules, regulations, codes, ordinances,
judgments, writs, decrees and orders of any Governmental Authority or arbitrator
applicable to the Person in question, including judgments, writs, decrees and
orders of all courts and arbitrators in Proceedings in which the Person in
question is a party.

    


    
      
         

      

      
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    “Anticipated Collection
Date” shall mean, with respect to any Purchased Receivable, the date
which Buyer estimates in good faith to be the date that all Collections related
to such Eligible Receivable will be directly deposited to the Segregated Account
by the Account Debtor.

    


    “Assignment of Claims
Act” shall mean the United States Assignment of Claims Act of 1940, 31
U.S.C. § 3727, 41 U.S.C. § 15, as amended.

    


    “Availability Period”
shall mean the period from and including the date hereof to December 31, 2009,
subject to the term of the Seller’s government contracts, provided, however, that if the
term of this Agreement is extended in accordance with Section 10.10 hereof,
the Availability Period will be extended as determined by Buyer in its sole
discretion.

     

    “Bankruptcy Code”
shall mean Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.).

    


    “Business Day” shall
mean any day that is not a Saturday, a Sunday or other day on which commercial
banking institutions in the City of New York are authorized or obligated by
Applicable Law to close.

    


    “Buyer Indemnified
Liabilities” shall have the meaning set forth in Section 10.3.1
hereof.

    


    “CBH” shall mean
Cherry, Bekaert & Holland, L.L.P., or such other Person that KBC approves in
writing in its sole discretion that performs the obligations of Cherry, Bekaert
& Holland, L.L.P. under the Collateral Review Agreement.

    


    “Collateral Review
Agreement” shall mean the Letter of Arrangement dated as of December 31,
2008 between CBH and the Buyer.

    


    “Collections” shall
mean all amounts received with respect to the Purchased Receivables, including
scheduled payments (whether received in whole or in part; whether related to a
current, future or prior due date; or whether paid voluntarily by an Account
Debtor or received in connection with the realization of the amounts due under
any Purchased Receivable or upon the sale or disposition of any property
acquired in respect thereof), all partial payments, all full prepayments and all
recoveries.

    


    “Compliance
Certificate” shall mean a certificate, in a form provided by Seller to
Buyer, which contains the certification of an officer of Seller that, among
other things, the representations and warranties set forth in this Agreement are
true and correct as of the date such certificate is delivered.

    


    
      
         

      

      
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    “Confirmation List”
shall mean a list, made either in writing or via email, delivered to Seller on
the Acceptance Date that shall set forth (i) each Eligible Receivable Buyer
agrees to purchase pursuant to any related Offer Notice and (ii) the Initial
Purchase Price that shall be paid to Seller with respect to each such Eligible
Receivable.

    


    “Contract Disputes
Act” shall mean the Contract Disputes Act of 1978, 41 U.S.C. §§ 601-613,
as amended.

    


    “Contractor Review
Agreement” shall mean that certain Letter Agreement dated as of January 9,
2009 between the Underwriter and RCA.

    


    “DCAA” shall mean the
Defense Contract Audit Agency of the United States Government.

    


     “Deemed Collections”
shall mean all reductions, adjustments, discounts, credits, allowances, rebates,
refunds, returns, disputes, counterclaims, offsets, defenses, rights of
recoupment, rights of return, warranty claims or short payments, asserted by or
on behalf of any Account Debtor with respect to any Purchased
Receivable.

    


    “Direct Costs” shall
have the meaning ascribed to such term in 48 C.F.R. Section 2.101.

    


    “Discount Factor”
shall have the meaning set forth in Section 3.5
hereof.

    


    “Discount Factor Rate”
shall have the meaning set forth in Section 3.5
hereof.

    


    “Eligible Contractor”
means a Person that (a) is a U.S. resident or Person organized under the laws of
any state of the United States, (b) is not an affiliate of RCA or Buyer, (c) is
a party to a contract with an Account Debtor pursuant to which it is entitled to
receive payments from such Account Debtor, (d) has been deemed to be
“responsible” in accordance with the FAR and to have been determined by the
Account Debtor to be satisfactory after reviewing the United States Government
Contractor Performance Assessment Reporting System, (e) has not been notified of
the reduction or suspension of contract payments upon a finding of fraud, or of
the investigation of fraud, pursuant to FAR 32.006, (f) does not have a billing
rate error of more than two percent (2%) with respect to billings to the
Government within the last twelve (12) months prior to the purchase of any
receivable generated by such Contractor by RCA, (g) has not experienced any
set-off or withholding of funds under any contract with the Account Debtor as a
result of a failure to pay its employees in accordance with any federal wage and
hour statutes, including, but not limited to, the Service Contract Act, 41
U.S.C. § 351 et
seq., or the
Contract Work Hours and Safety Standards Act, 40 U.S.C. § 3701 et seq., nor has it been
notified of an investigation of the foregoing matters, (h) has not experienced
any set-off or withholding of funds under any contract with the Account Debtor
as a result of its Indebtedness to the Account Debtor, including any monies owed
for overpayment by the Account Debtor, nor has it been notified of an
investigation of such matter, (i) has been reviewed and approved pursuant to the
Contractor Review Agreement at least annually, and (j) satisfies all of the
representations and warranties it makes under this Agreement.

    


    
      
         

      

      
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    “Eligible Receivable”
A bona fide receivable arising from an invoice that has been sent to and
approved for payment by an Account Debtor (to the extent required by Buyer)
pursuant to a contract between an Account Debtor, as obligor, and an Eligible
Contractor, and all Related Security thereof: (a) that is either (i) a “Service
Contract” (as defined in FAR 37.101) between an Eligible Contractor and the
Account Debtor, provided, however, that an
Eligible Receivable shall not be deemed to arise from a construction contract,
or (ii) a contract between an Eligible Contractor and the Account Debtor for the
delivery of products, provided that the
delivery of such products can be verified by Buyer; (b) that has been purchased
by the Buyer from the Seller in accordance with this Agreement; (c) that has
been executed by an authorized officer of the Eligible Contractor who has
verified that adequate funds are available and no appropriations approval is
required for the Eligible Contractor to enter into the contract; (d) that
satisfies all of the criteria of any due diligence review conducted by Buyer,
RCA, CBH or the Underwriter; (e) that is denominated and payable only in U.S.
dollars by electronic funds transfer and only in the United States and no later
than the later of (i) sixty (60) days from the Account Debtor’s receipt of the
invoice and (ii) sixty (60) days after the Account Debtor has accepted the
supplies delivered or the services performed to which the invoice relates; (f)
that has been validly assigned to Buyer pursuant to the Assignment of Claims
Act, and all payments with respect thereto have been validly been directed to be
made directly to the Segregated Account; (g) with respect to which, immediately
following the transfer of such Eligible Receivable to Buyer as contemplated by
this Agreement, the Borrower shall have good title to such Eligible Receivable,
free and clear of any Liens; (h) the sale and assignment of which by Seller to
Buyer does not contravene or conflict with any applicable laws or contractual
obligation or other restriction, limitation or encumbrance, and do not require
any consent that has not been obtained; (i) the contracts, documents,
instruments and other items with respect to which (i) contain customary and
enforceable provisions such that the rights and remedies of the holder thereof
are adequate for the practical realization against any related collateral or
purchased assets of the benefits of the security or ownership thereof and (ii)
do not contain any confidentiality (or any other) provisions that would restrict
the ability of Buyer to exercise its powers,  rights and remedies
under this Agreement; (j) as to which the right to receive payments thereunder
is an “account” or a “payment intangible”, within the meaning of the UCC; (k)
which arises under contracts, documents, instruments and other items that (i)
have been duly authorized, are in full force and effect and constitute the
legal, valid and binding obligations of the related Account Debtor and Eligible
Contractor, enforceable against such Account Debtor and Eligible Contractor in
accordance with their terms (except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and the effects of general principles of equity) and (ii) are not subject to any
dispute, claim, defense, offset or counterclaim; (l) as to which no portion of
the Related Security has been released (in whole or in part) from any Lien or
security interest therein granted by the related Account Debtor to the Eligible
Contractor; (m) which, together with the contracts, documents, instruments and
other items related thereto, do not contravene in any material respect any
Applicable Laws; (n) which arises under contracts, documents, instruments and
other items, none of the parties to which have done or failed to do anything
that would or might permit any other party thereto (other than the Borrower in
exercising its rights or remedies thereunder) to terminate any such contracts,
documents, instruments and other items or to suspend or reduce any payments or
obligations due or to become due thereunder at any time after it becomes an
Eligible Receivable; and (o) which at no point in time has failed to meet each
of the criteria to constitute an Eligible Receivable set forth in subsections
(a) through (m) above. Notwithstanding anything in this definition to the
contrary, the first three (3) invoices or the last invoice with respect to any
contract shall not be deemed an “Eligible Receivable” unless (i) any such
receivable is submitted and validated through a web-based system such as “Wide
Area Workflow” (WAWF) or (ii) KBC, in its sole discretion, is satisfied with the
verbal confirmation that KBC has received from an appropriate government
official that any such receivable is proper and will be submitted for
payment.

     

    
      
         

      

      
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    “Enrollment Fee” shall
have the meaning set forth in Section 3.1
hereof.

    


    “Environmental Law”
shall mean all requirements of applicable law and any permit, approval,
authorization, license, concession or permission from any governmental authority
imposing liability or standards of conduct for or relating to the regulation and
protection of human health, safety, the environment and natural resources,
including the United States Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. §§ 9601 et seq.), the Solid
Waste Disposal Act (42 U.S.C. §§ 6901 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. §§ 5101 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.), the Toxic
Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Clean Air
Act (42 U.S.C. §§ 7401 et seq.), the Federal
Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.), the
Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.), the Safe
Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), all
regulations promulgated under any of the foregoing, all analogous requirements
of law and any environmental transfer of ownership notification or approval
statutes, including the Industrial Site Recovery Act (N.J. Stat. Ann. §§ 13:1K−6
et seq.).

     

    
      
         

      

      
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    “ERISA” shall mean the
United States Employee Retirement Income Security Act of 1974, as codified at 29
U.S.C. § 1001 et seq. and the rules
and regulations promulgated thereunder.

     

    “Event of Default”
shall have the meaning set forth in Section 9.1
hereof.

    


    “Face Amount” shall
mean, with respect to a Purchased Receivable, the face amount of such Purchased
Receivable as of the date Buyer shall have delivered the Initial Purchase Price
to Seller related to such Purchased Receivable.

    


    “FAR” means the United
States Federal Acquisition Regulations, 48 C.F.R. 1.00 et seq.

     

    “GAAP” means generally
accepted accounting principles in the United States of America in effect from
time to time consistently applied (except for accounting changes in response to
releases of the Financial Accounting Standards Board, or other authoritative
pronouncements).

    


    “Government” means the
United States of America or any agency or instrumentality thereof.

    


    “Government Contract”
means any prime contract, purchase order, task order, delivery order, teaming
agreement, joint venture agreement, strategic alliance agreement, basic ordering
agreement, pricing agreement, letter contract or other similar arrangement of
any kind that are currently active in performance between Seller, as an Eligible
Contractor, and the Government, which shall result in Eligible Receivables owed
to Seller which may be purchased by Buyer in accordance with this Agreement. A
task, purchase or delivery order under a Government Contract shall not
constitute a separate Government Contract, for purposes of this definition, but
shall be part of the Government Contract to which it relates.

    


    “Government Contract
Bid” shall mean quotations, bids and proposals for awards of new
Government Contracts made
by Seller for which no award has been announced and for which Seller believes
there is a reasonable prospect that such an award to Seller may yet be
made.

    


    “Governmental
Authority” shall mean any federal, state, municipal, local or other
governmental or regulatory department, commission, board, bureau, agency,
instrumentality, court or tribunal, in each case whether of the United States of
America, any political subdivision thereof or any foreign
jurisdiction.

    


    “Indebtedness” shall
mean, with respect to any Person, without duplication, any of the following,
whether or not matured:  (a) all indebtedness for borrowed money, (b)
all other obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all reimbursement and all other obligations with respect to (i)
letters of credit, bank guarantees or bankers’ acceptances or (ii) surety,
customs, reclamation or performance bonds (in each case not related to judgments
or litigation), (d) all obligations to pay the deferred purchase price of
property or services, (e) all obligations created or arising under any
conditional sale or other title retention agreement, regardless of whether the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property, (f) all matured
obligations under any swap, cap, collar, forward purchase or similar hedging
agreements or arrangements dealing with interest rates, currency exchange rates
or commodity prices, either generally or under specific contingencies, (g) all
obligations of such Person under all leases which are capitalized in accordance
with GAAP and any financing leases involving substantially the same economic
effect, (h) any obligation, contingent or otherwise, of such Person directly or
indirectly guaranteeing, or indemnifying any Person against losses in respect
of, any Indebtedness of any other Person, (i) all Indebtedness referred to above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property or other
assets (including accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness and (j) all other obligations that would be recorded on a person’s
balance sheet as a liability in accordance with GAAP.

     

    
      
         

      

      
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    “Indirect Costs” shall
have the meaning ascribed to such term in 48 C.F.R.
Section 2.101.

     

    “Initial Purchase
Price” shall have the meaning set forth in Section 2.3.1
hereof.

    


    “Initial Purchase Price
Rate” shall have the meaning set forth in Section 2.3.1
hereof.

    


    “KBC” shall mean KBC
Bank, N.V., a banking institution organized under the laws of the Kingdom of
Belgium, acting through its New York Branch.

    


    “Lien” shall mean any
lien, security interest or other charge, encumbrance, or other type of
preferential arrangement having the practical effect of a lien or security
interest, of or on any assets or properties of any Person in favor of any other
Person, including a conditional sale or title retention agreement.

    


    “Material Adverse
Effect” shall mean a circumstance or condition affecting the business,
assets, operations, properties, condition (financial or otherwise), or prospects
of Seller and/or the Purchased Receivables that could materially adversely
affect (a) the business, assets, operations, properties, condition
(financial or otherwise) or prospects of Seller, (b) the ability of Seller to
perform any of its obligations under this Agreement, (c) the rights and
remedies of Buyer under this Agreement, (d) the value, existence or ownership of
the Purchased Receivables or (e) the collectability of the Purchased
Receivables.

    


    
      
         

      

      
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    “Offer Notice” shall
mean a notice, made either in writing or via email, delivered to Buyer by Seller
through which Seller shall offer to sell Eligible Receivables for an amount
greater than or equal to ten thousand dollars ($10,000).

    


    “PAF Rate” shall have
the meaning set forth in Section 3.3
hereof.

    


    “Person” shall mean
any individual, corporation, partnership, limited liability company, limited
liability partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.

     

    “Plan” shall mean an
employee benefit plan within the meaning of Section 3(3) of ERISA which is
subject to Title IV of ERISA and maintained or contributed to by Seller, or any
other plan covered by Title IV of ERISA that covers the employees of
Seller.

     

    “Proceeding” shall
mean any action, suit, proceeding or litigation in equity or at law, or any
other judicial or administrative proceeding or investigation.

     

    “Program Access Fees”
shall have the meaning set forth in Section 3.3
hereof.

    


    “Program Continuance
Fee” shall have the meaning set forth in Section 3.4
hereof.

    


    “Purchased
Receivables” shall mean all Eligible Receivables arising out of any
invoice and other agreements identified on or delivered with any Receivables
Invoice delivered by Seller to Buyer which Buyer elects to purchase pursuant to
Section 2.2
hereof.

    


    “RCA” shall mean RCA
Funding, LLC.

    


    “Receivables” shall
mean (i) all of Seller’s receivables listed on any Receivables Invoice and all
rights to, but not the obligations under, such contracts and any and all rights
and security arising thereunder, (ii) all monies due or to become due with
respect to the foregoing and (iii) all books and records related to any of the
foregoing.

    


    “Receivables Invoice”
shall have the meaning set forth in Section 2.1
hereof.

    


    “Related Security”
shall mean, with respect to any Eligible Receivable or other receivable, all of
the Seller’s right, title, interest and remedies in, to and under any and all
contracts, documents, instruments and other items related thereto, and all
proceeds of the foregoing, including, without limitation, (i) the right of the
Seller to receive all scheduled and unscheduled payments of all amounts payable
in connection with such Eligible Receivable or other receivable, (ii) the right,
if any, of the Seller to cause the repurchase of the Seller’s interest in such
Eligible Receivable or other receivable  and to receive the purchase
price, (iii) the right to enforce the Seller’s rights and remedies any purchase
and sale, transfer or other applicable assignment agreement, if any, with
respect thereto, (iv) all Liens or security interests and property subject
thereto from time to time purporting to secure any of the foregoing rights or
interests, and the right to all collections in respect thereof, if any, (v) all
guarantees, casualty and other insurance policies (including, without
limitation, the right to receive all returned premiums related thereto) and
other agreements or arrangements of whatever character from time to time
supporting or securing or otherwise related to such Eligible Receivable or other
receivable and the related contracts, documents, instruments and other items
related thereto, (vi) all Collections and all accounts to which Collections in
respect of such Eligible Receivable or other receivable are deposited (including
the Segregated Account), (vii) all other information, documents, instruments,
servicing files, records and computer-readable media, personal property,
contract rights, servicing rights, escrow funds, and general intangibles of
whatsoever kind evidencing, comprising or relating to the ownership or transfer
of such Eligible Receivable or other receivable or the servicing thereof and all
other documents or instruments delivered to the Seller with respect thereto and
(viii) all proceeds of the foregoing.

    


    
      
         

      

      
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    “Residual Calculation
Date” shall mean the second business day immediately following the date
that any Collections are collected with respect to any Purchased Receivable;
provided that
the amount of such Collections exceed the sum of the Initial Purchase Price of
such Purchased Receivable, plus the Discount
Factor related to such Purchased Receivable, plus any accrued
Program Access Fees owed during the applicable Accrual Period.

    


    “Residual Payment
Date” shall mean the Business Day immediately following the Residual
Calculation Date.

    


    “Residual Purchase
Price” shall have the meaning set forth in Section 2.3.2
hereof.

    


    “Sale and Contribution
Agreement” shall mean that certain Sale and Contribution Agreement dated
as of January 20, 2009, by and between RCA, as purchaser, and Buyer, as
seller.

     

    “Segregated  Account”
shall mean that segregated bank account, located at KBC, specified by Buyer to
Seller, in which any and all Collections shall be deposited.

    


    “Seller Obligations”
shall mean all advances, financial accommodations, liabilities, obligations,
covenants and duties owing, arising, due or payable by Seller to Buyer of any
kind or nature, present or future, arising under or in connection with this
Agreement or under any other document, instrument or agreement, whether or not
evidenced by any note, guarantee or other instrument, whether arising on account
or by overdraft, whether direct or indirect (including those acquired by
assignment) absolute or contingent, primary or secondary, due or to become due,
now owing or hereafter arising and however acquired, including, without
limitation, all Initial Purchase Prices, Program Access Fees, interest, Deemed
Collections, fees, expenses, professional fees and attorneys’ fees and any other
sums chargeable to Seller hereunder or otherwise.

    


    
      
         

      

      
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    “Solvent” means, with
respect any Person, that as of any day, both (a) (i) the sum of such Person’s
debts (including contingent and unliquidated liabilities) does not exceed the
present fair saleable value of such Person’s present assets (both at fair value
and fair saleable value); (ii) such Person’s capital is not unreasonably small
in relation to its business as contemplated on such day; and (iii) such Person
has not incurred and does not intend to incur, and believes that it will not
incur, debts including current obligations beyond its ability to pay such debts
as they become due (whether at maturity or otherwise); and (b) such Person
is  “solvent” within the meaning given that term and similar terms
under Applicable Laws relating to fraudulent transfers and
conveyances.  For purposes of this definition, the amount of any
contingent liability at any time shall be computed as the amount that, in light
of all of the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability
(irrespective of whether such contingent liabilities meet the criteria for
accrual under Statement of Financial Accounting Standard No. 5)

    


    “Termination Fee”
shall have the meaning set forth in Section 3.2
hereof.

    


    “Truth in Negotiations
Act” shall mean the Truth in Negotiations Act of 1962, 10 U.S.C. §
2306(a), 41 U.S.C. § 254(b), as amended.

    


    “UCC” shall mean the
Uniform Commercial Code as in effect from time to time in the State of New York,
provided, however, that, in the
event that, by reason of mandatory provisions of law, any of the attachment,
perfection or priority of the Purchased Receivables under this Agreement is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, the term “UCC” shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions of
this Agreement relating to such attachment, perfection or priority and for
purposes of definitions related to such provisions.

     

    “Underwriter” shall
mean Credit Risk Management LLC.

    


    “Unpurchased
Receivable” shall mean any Receivable that is not a Purchased
Receivable.

    


    “USA Patriot Act”
shall mean the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act (Title II of Pub. L. 107-56
(signed into law October 26, 2001)).

    


    
      
         

      

      
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    SECTION
2

    PURCHASE
AND SALE OF RECEIVABLES

    


    2.1    Delivery of Invoices;
Validation of Receivables.  During Availability Period, and
simultaneously with the delivery of the same to any Account Debtor, Seller shall
deliver to Buyer and KBC any and all invoices prepared relating to Receivables
arising under contracts with an Account Debtor for which Seller has assigned the
rights to receive payments therefrom to Buyer or Buyer’s designee (each, a
“Receivables
Invoice”). Upon receipt of any Receivables Invoices, Buyer shall perform,
or shall cause another Person to perform, any and all due diligence necessary to
determine which Receivables set forth in the Receivables Invoices are Eligible
Receivables.

    


    2.2    Offer and Acceptance of
Receivables.  At any time during the Availability Period,
provided that there does not then exist any Event of Default or any event that,
with notice, lapse of time or otherwise, would constitute an Event of Default,
Seller may deliver to Buyer an Offer Notice; provided, however, that Seller
shall not deliver more than three (3) Offer Notices to Buyer in any calendar
week. Within two (2) Business Days of Buyer’s
receipt of an Offer Notice (the “Acceptance Date”),
Buyer shall (i) deliver to Seller a Confirmation List and (ii) and pay to Seller
by wire transfer an amount equal to the Initial Purchase Price of each Eligible
Receivable set forth on such Confirmation List, it being hereby agreed to and
accepted that the satisfaction of items (i) and (ii) above shall evidence
Buyer’s acceptance to purchase the Eligible Receivables set forth on the
Confirmation List. Notwithstanding the foregoing, Buyer shall have no obligation
to purchase all or any portion of Eligible Receivables set forth in any Offer
Notice or to give a Confirmation List. Upon Buyer’s acceptance of any Eligible
Receivable as set forth in this Section 2.2, such
Eligible Receivable shall become a “Purchased
Receivable”; provided, however, that it
shall be a condition to the payment of each Initial Purchase Price that: (i) all
of the conditions, representations, warranties and covenants set forth herein be
true and correct on and as of the Acceptance Date as though made at and as of
each such date, and (ii) no Event of Default, or any event or condition that
with notice, lapse of time or otherwise would constitute an Event of Default,
shall have occurred and be continuing, or would result from the payment of such
Initial Purchase Price.

    


    2.3    Purchase Price of
Receivables.

    


    2.3.1 Initial Purchase
Price.  As set forth in Section 2.2 hereof,
Buyer shall pay to Seller an amount equal to ninety percent (90%) (the “Initial Purchase Price
Rate”) of the Face Amount of each Eligible Receivable set forth in any
Confirmation List (each, an “Initial Purchase
Price”). Throughout the term of this Agreement, Buyer shall have the
right to adjust the Initial Purchase Price Rate in its sole discretion upon
consideration of certain factors as set forth in Exhibit A attached
hereto.

    


    2.3.2 Residual Purchase
Price.  Provided that there does not then exist an Event of
Default or any event or condition that, with notice, lapse of time or otherwise,
would constitute an Event of Default, Buyer shall pay to Seller by wire transfer
on the Residual Payment Date, the amount, if any, which Buyer owes to Seller on
such Residual Payment Date, according to the accounting prepared by Buyer as of
such Residual Calculation Date (the “Residual Purchase
Price”). For each individual Purchased Receivable, the Residual Purchase
Price shall be an amount equal to: (A) the total amount of Collections related
to such Purchased Receivable as of the Residual Calculation Date; minus (B) the sum of
(i) the Initial Purchase Price paid for such Purchased Receivable, plus (ii) the
Discount Factor owed with respect to such Purchased Receivable, plus (iii) the total
as of the Residual Calculation Date of (a) any and all accrued and unpaid
Program Access Fees multiplied by a fraction, the numerator of which is equal to
the total amount of Collections collected in such applicable Accrual Period and
the denominator of which is the average daily Account Balance during such
applicable Accrual Period, (b) Deemed Collections related to such Purchased
Receivable, and (c) any other amounts due, including professional fees and
expenses, as set forth in Section 10.2 hereof
for which oral or written demand has been made by Buyer to Seller as of the
Residual Calculation Date to the extent Buyer has agreed to accept payment
thereof by deduction from the Residual Purchase Price.

    


    
      
         

      

      
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    2.4    Effectiveness of the Sale to
Buyer.  Effective upon Buyer’s payment of the Initial Purchase
Price, and for and in consideration therefore and in consideration of the
covenants of this Agreement, Seller hereby absolutely sells, transfer and
assigns to Buyer, all of Seller’s right, title and interest in and to each
Purchased Receivable and any Related Security and all monies due or which may
become due on or with respect to such Purchased Receivable and any Related
Security. Buyer shall be the absolute owner of each Purchased Receivable and any
Related Security. Buyer shall have, with respect to any goods related to the
Purchased Receivable and any Related Security, all the rights and remedies of an
unpaid seller under the UCC and other applicable laws, including the rights of
replevin, claim and delivery, reclamation and stoppage in transit.

    


    2.5    Unpurchased
Receivables.  In the event that any collections deposited into
the Segregated Account relate to an Unpurchased Receivable, Buyer shall remit,
or shall cause RCA or KBC to remit, all such collections to Seller within the
three (3) Business Days immediately following such collection. Buyer, in its
sole discretion, may charge a fee to cover any and all administrative costs
related to the collection and remittance of any Unpurchased
Receivables.

    


    2.6    True
Sales.

    


    2.6.1 Each of
Buyer and Seller intend the transactions hereunder to constitute true sales of
Purchased Receivables by Seller to Buyer providing Buyer with the full benefits
of ownership thereof, and no party hereto intends the transactions contemplated
hereunder to be, or for any purpose to be characterized as, a loan from or
through Buyer to Seller.

    


    2.6.2 In the
event, but only to the extent, that the conveyance of Purchased Receivables by
Seller hereunder is characterized by a court or other governmental authority as
a loan rather than a sale, Seller shall be deemed hereunder to have granted to
Buyer effective as of the date of the first purchase under this Agreement, a
security interest in all of Seller’s right, title and interest in, to and under
all of the Purchased Receivables sold by it, whether now or hereafter owned,
existing or arising. Such security interest shall secure any and all rights of,
and payments owed to, Buyer under this Agreement, whether now or hereafter
existing or arising, due or to become due, direct or indirect, absolute or
contingent. Buyer shall have, with respect to the property described in this
Section 2.6.2,
and in addition to all the other rights and remedies available to Buyer under
this Agreement and applicable law, all the rights and remedies of a secured
party under the UCC, and this Agreement shall constitute a security agreement
under applicable law.

    


    
      
         

      

      
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    SECTION
3

    FEES;
ACCOUNTING

    


    3.1    Enrollment Fee.
Immediately upon the execution of this Agreement, Seller shall pay to Buyer an
amount equal to Twelve Thousand and Five Hundred dollars ($12,500.00)
(the “Enrollment
Fee”) in consideration of Buyer’s commitment to purchase Receivables
hereunder.

    


    3.2    Termination
Fee.  In the event that Seller terminates this Agreement prior
to the end of the term of this Agreement as set forth in Section 10.10 hereof,
Seller shall pay to Buyer an amount equal to Zero dollars ($0) (the “Termination Fee”) in
consideration for such early termination of this Agreement. The Termination Fee
shall be paid to Buyer within twenty (20) days of such early termination, and
may be charged to Seller directly or offset from any Residual Purchase Price or
Unpurchased Receivable payments owed to Seller at or after the time at which
such Termination Fee arises.

    


    3.3    Program Access
Fees.  On each Residual Payment Date, Buyer shall, or shall
cause KBC to, deduct from any Collections an amount equal to the sum of
..0226% (the “PAF Rate”) of the
daily ending Account Balance for each day during the applicable Accrual Period
(the “Program Access
Fees”). At all times throughout the term of this Agreement, as set forth
in Section
10.10 hereof, Buyer shall have the right to adjust the PAF Rate as Buyer
may deem necessary to account for any material changes in the direct, third
party charges that are payable by Buyer in connection with the Purchased
Receivables, including, without limitation, any servicing fees, underwriting
fees and licensing fees; provided, however, that the PAF
Rate shall be adjusted no more frequently than once per calendar quarter. Buyer
shall provide Seller with thirty (30) days prior written notice of any such
change.

    


    3.4    Program Continuance
Fee.  Throughout the term of this Agreement, as set forth in
Section 10.10
hereof, Seller shall pay to Buyer a quarterly fee equal to Two Thousand Five
Hundred dollars ($2,500.00 ) if the Average Account
Balance for each day is less than One Million Five Hundred Thousand dollars
($1,500,000.00), (the “Program Continuance
Fee”); provided, however, that Buyer,
may reduce, in whole or in part, the Program Continuance Fee assessed in a given
calendar quarter based on Buyer’s review of the collectability of the Purchased
Receivables and the amount of Receivables Seller elects to sell to Buyer
hereunder.

    


    
      
         

      

      
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    3.5    Discount Factor. On
each Residual Payment Date, Buyer shall, or shall cause to, deduct from any
Collections an amount equal to .35% (the “Discount Factor
Rate”) of the Face Amount of each Purchased Receivable for which the
Residual Purchase Price, if any, is paid on such Residual Payment Date (the
“Discount
Factor”). At all times throughout the term of this Agreement, as set
forth in Section
10.10 hereof, Buyer shall have the right to adjust the Discount Factor
Rate in its sole discretion as Buyer may deem necessary to account for changes
in the Buyer’s cost of funds or based on Buyer’s collection experience on all
invoices purchased from Seller; provided, however, that the
Discount Factor Rate may only be adjusted as of the first day of each calendar
month. Buyer shall provide Seller with thirty (30) days prior written notice of
any such change.

    


    3.6    Accounting.  Buyer
shall prepare and send to Seller on each Residual Calculation Date, an
accounting of the transactions as of such Residual Calculation Date, including
the amount of all Purchased Receivables, Collections and Program Access Fees.
The accounting shall be deemed correct and conclusive unless Seller makes
written objection to Buyer within [thirty (30)] days after Buyer
delivers the accounting to Seller.

    


    SECTION
4

    NO
RECOURSE; DEEMED COLLECTIONS

    


    4.1    No
Recourse.  Subject to Section 4.2 hereof,
the purchase and sale of Receivables under this Agreement shall be without
recourse to Seller for non-payment of Purchased Receivables due to credit
problems of the Account Debtor; provided, however, that Seller
shall be liable to Buyer for (i) any and all fraudulent statements related to
any Receivable contained in the Receivables Invoices or otherwise and (ii) all
representations, warranties, covenants and indemnities made by Seller pursuant
to the terms of this Agreement, it being understood that such Obligations of
Seller will not arise on account of the failure of the Account Debtor for credit
reasons to make any payment in respect of a Purchased Receivable.

    


    4.2    Deemed Collections;
Repurchase

    


    4.2.1 If on
any day the
Account Balance is reduced or adjusted as a result of any defective, rejected or
returned merchandise or services, any cash discount, any credit, any incorrect
billing, pricing adjustment or any other adjustment by Seller or is reduced or
canceled as a result of a setoff in respect of any claim by the Account Debtor
thereof against Seller (whether such claim arises out of the same or a related
or unrelated transaction) or as a result of any dispute or any obligation of
Seller to pay to the related Account Debtor any rebate or refund, or to rework
any product or service, Seller shall directly deposit into the Segregated
Account in immediately available funds an amount equal to the Deemed Collections
of such reduction or adjustment.

    


    
      
         

      

      
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    4.2.2 If on any
day any of the representations or warranties herein are not true with respect to
any Purchased Receivable as of the date it was sold hereunder, Seller shall
directly deposit into the Segregated Account in immediately available funds an
amount equal to the portion of the Account Balance related to such Purchased
Receivable for application by KBC to the same extent as if Collections
pertaining to such Purchased Receivable had actually been received on such
date.

    


    4.2.3 If and to
the extent that Buyer shall be required for any reason to pay over to the
Account Debtor (or any trustee, receiver, custodian or similar official in the
event of bankruptcy, etc.) any amount received by it hereunder, such amount
shall be deemed not to have been so received but rather to have been retained by
Seller and, accordingly, Buyer shall have a claim against Seller for such
amount, payable when and to the extent that any distribution from or on behalf
of Seller is made in respect thereof.

    


    4.2.4 If on any
day, and for any reason, a Purchased Receivable is determined to not have
qualified as an Eligible Receivable as of the date such Purchased Receivable was
purchased by Buyer from Seller in accordance with this Agreement or at any time
thereafter, Seller shall deposit directly into the Segregated Account in
immediately available funds an amount equal to the Initial Purchase Price plus any Residual
Purchase Price paid with respect to such Purchased Receivable and any and all
costs incurred by Buyer in connection with such determination and adjustment,
including reasonable fees and disbursements of counsel, within twenty-five (25)
days of Seller’s receipt of notice of such determination. Seller shall deposit
directly into the Segregated Account any amounts arising under this Section
4.2.4.

    


    SECTION
5

    POWER
OF ATTORNEY; SERVICING OF PURCHASED RECEIVABLES; ADDITIONAL RIGHTS

    


    5.1    Power of
Attorney.  Seller does hereby irrevocably appoint Buyer and its
successors and assigns as Seller’s true and lawful attorney in fact, and hereby
authorizes Buyer, regardless of whether there has been an Event of Default, (i)
to sell assign, transfer, pledge, compromise or discharge the whole or any part
of the Purchased Receivables, (ii) to demand, collect, receive, sue, and give
releases to any Account Debtor for the monies due or which may become due upon
or with respect to the Purchased Receivables and to compromise, prosecute or
defend any Proceeding relating to the Purchased Receivables, including the
filing of a claim or the voting of such claims in any bankruptcy case, all in
Buyer’s name or Seller’s name, as Buyer may choose, (iii) to prepare, file and
sign Seller’s name on any notice, claim, assignment, demand, draft or notice of
or satisfaction of lien or mechanics’ lien or similar document with respect to
Purchased Receivables, (iv) to notify all Account Debtors with respect to the
Purchased Receivables to pay Buyer directly, (v) to receive, open and dispose of
all mail addressed to Seller for the purpose of collecting Purchased
Receivables, (vi) to endorse Seller’s name on any checks or other forms of
payment on the Purchased Receivables, (vii) to execute on behalf of Seller any
and all instruments, documents, financing statements and the like to perfect
Buyer’s interests in the Purchased Receivables, as set forth herein, and (viii)
to do all acts and things necessary or expedient in furtherance of any such
purposes. If Buyer receives a wire transfer or item which is payment for both a
Purchased Receivable and another Receivable, the funds shall first be applied to
the Purchased Receivable and, so long as there does not exist an Event of
Default or an event that with notice, lapse of time or otherwise would
constitute an Event of Default, the excess shall be remitted to Seller. Upon the
occurrence and continuation of an Event of Default, all of the power of attorney
rights granted by Seller to Buyer hereunder shall be applicable with respect to
all Purchased Receivables.

    


    
      
         

      

      
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    5.2    Servicing of Purchased
Receivables. Subject to Buyer’s ownership of the Purchased Receivables,
KBC shall have the sole right to service, administer and collect the Purchased
Receivables, to assign such right and to delegate such right to others. In
consideration of Buyer’s purchase of the Purchased Receivables, Seller agrees to
cooperate fully with Buyer and/or KBC to facilitate the full and proper
performance of such duties and obligations for the benefit of Buyer, RCA and/or
KBC. To the extent that Buyer, individually or through KBC, has granted or
grants powers of attorney to RCA or to KBC, Seller hereby grants a corresponding
power of attorney on the same terms to RCA or KBC. Seller hereby acknowledges
and agrees that Buyer, in all of its capacities, may assign to RCA, which in
turn may assign to KBC for the benefit of RCA such powers of attorney and other
rights and interests granted by Seller to Buyer pursuant to Section 5.1 hereof,
and agrees to cooperate fully with KBC in the exercise of such
rights.

    


    5.3    Rights of Buyer; Enforcement
Rights.

    


    5.3.1 Buyer
shall have no obligation to account for, to replace, to substitute or to return
any Receivables to Seller. Buyer shall have no obligation to account for, or to
return to Seller, Collections, or any interest or fees collected pursuant
thereto, without regard to whether such Collections and fees are in excess of
the Initial Purchase Prices paid for such Purchased Receivables.

    


    5.3.2 Buyer
shall have the unrestricted right to further assign, transfer, deliver,
hypothecate, subdivide
or otherwise deal with the Purchased Receivables, and all of Buyer’s right,
title and interest in, to and under this Agreement, on whatever terms Buyer
shall determine.

    


    5.3.3 Buyer
shall have the sole right to retain any gains or profits created by buying,
selling or holding the Purchased Receivables and, except as expressly set forth
in the this Agreement, shall have the sole risk of and responsibility for losses
or damages created by such buying, selling or holding.

    


    SECTION
6

    CONDITION
TO PURCHASES

    


    6.1    Conditions Precedent to
Initial Purchases. The initial purchase of Purchased Receivables under
this Agreement is subject to the condition precedent that Buyer shall have
received each of the following (with copies to KBC), on or before the date of
such purchase, each in form and substance satisfactory to Buyer and
KBC:

    


    
      
         

      

      
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    6.1.1 This
Agreement, duly executed by the parties hereto, together with evidence
reasonably satisfactory to Buyer that all conditions precedent to the initial
purchase of Purchased Receivables shall have been met;

    


    6.1.2 Certificates
of officers of Seller certifying (i) a copy of the resolutions of its Board of
Directors, or similar governing body, approving this Agreement to be delivered
by it hereunder and the transactions contemplated hereby; (ii) the names and
true signatures of the officers authorized on its behalf to sign this Agreement
to be delivered by it hereunder, (iii) a copy of its by-laws or operating
agreement, as the case may be, and (iv) all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to this
Agreement;

    


    6.1.3 Seller’s
certificate of incorporation or formation, as the case may be, duly certified by
the appropriate government official in the state where Seller is organized, as
of a recent date acceptable to Buyer;

    


    6.1.4 If
necessary, acknowledgment copies or time stamped receipt copies, of the proper
financing statements that have been duly executed and name Seller as the debtor
and Buyer as the secured party and purchaser of the Receivables or other,
similar instruments or documents, which will be assigned to RCA to the extent
that such receivables are purchased by RCA under the Sale and Contribution
Agreement,  as may be necessary or desirable under the UCC or any
comparable law of all appropriate jurisdictions to perfect Buyer’s ownership
interest in all Receivables in which an ownership interest may be assigned to it
hereunder; and

    


    6.1.5 Such
other agreements, instruments, UCC financing statements, certificates, opinions
and other documents as Buyer or KBC may reasonably request.

    


    6.2 Conditions Precedent to All
Purchases Each purchase under this Agreement is subject to the condition
precedent that the agreement of Seller to sell Receivables, and the agreement of
Buyer to purchase Receivables, shall not have terminated under the terms of this
Agreement, and shall be subject further to the conditions precedent
that:

    


    6.2.1 In the
case of each purchase, Seller shall have delivered to KBC prior to such purchase
(i) all Receivables Invoices with respect to the immediately preceding calendar
month and (ii) an Offer Notice, together with such additional information as may
be reasonably requested by Buyer or KBC;

    


    6.2.2 Seller
shall have delivered acknowledgment copies of proper financing statements, if
any, necessary to release all security interests and other rights of any Person
in the Purchased Receivables previously granted by Seller;

    


    
      
         

      

      
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    6.2.3 Seller
shall have delivered to Buyer any and all financial statements of Seller
required under this Agreement or reasonably requested by Buyer;

    


    6.2.4 Prior to
the sale of any Receivables hereunder, Seller shall (i) execute all other
agreements, instruments, notices, forms and documents and shall perform all
further acts which Buyer may require with respect to the Purchased Receivables
to ensure compliance with the Assignment of Claims Act, and all applicable
regulations issued pursuant thereto, (ii) cause to be filed or submitted with
the Government any and all agreements, instruments, notices, forms and documents
required pursuant to the Assignment of Claims Act and all applicable regulations
issued pursuant thereto, and (iii) have received, prior to the sale of any
Purchased Receivables under this Agreement, any and all necessary and applicable
approvals and consents from the Government pursuant to Assignment of Claims Act
and all applicable regulations issued pursuant thereto;

    


    6.2.5 Since
September 30, 2008, no event or events shall have occurred which have had or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect;

    


    6.2.6 No Event
of Default or shall have occurred and be continuing or be imminent or pending or
result from the purchase of the Purchased Receivables;

    


    6.2.7 Buyer
shall have received any information reasonably requested by it under or in
connection with the USA Patriot Act;

    


    6.2.8 Buyer
shall have completed any due diligence or shall have received and be satisfied
in its sole discretion with any and all confirmations related to Seller as an
Eligible Contractor or the Receivables as Eligible Receivables;

    


    6.2.9 Buyer
shall have completed and be satisfied in its sole discretion of any and all due
diligence performed by Buyer relating to Seller, the Receivables or any
transactions contemplated herein, and Buyer shall have approved the invoice
relating to, and be satisfied with, the Initial Purchase Price being paid by
Buyer for each Purchased Receivables sold under this Agreement;

    


    6.2.10 Seller
shall have been found to have met any and all requirements of the Underwriter’s
annual review set forth in the Contractor Review Agreement.

    


    6.2.11 The
representations and warranties contained herein are true and correct on and as
of such day as though made on and as of such day and shall be deemed to have
been made on such day (except that any such representation or warranty that is
expressly stated as being made only as of a specified earlier date shall be true
and correct in all material respects as of such earlier date).

    


    6.3    Certification as to
Representations and Warranties.  Seller, by accepting the
Initial Purchase Price paid for each purchase of Purchased Receivables on any
day, shall be deemed to have certified that its representations and warranties
contained herein are true and correct on and as of such day, with the same
effect as though made on and as of such day (except that any such representation
or warranty that is expressly stated as being made only as of a specified
earlier date shall be true and correct in all material respects as of such
earlier date).

    


    
      
         

      

      
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    6.4    Effect of Payment of
Purchase Price.  Upon the payment of the Initial Purchase Price
for any purchase of Purchased Receivables, title to such Purchased Receivables
shall vest in Buyer, whether or not the conditions precedent to such purchase
were in fact satisfied; provided that Buyer
shall not be deemed to have waived any claim it may have under this Agreement
for the failure by Seller in fact to satisfy any
such condition precedent.

    


    SECTION
7

    REPRESENTATIONS
AND WARRANTIES

    


    7.1    Representations and
Warranties.  In order to induce Buyer to enter into this
Agreement and to make purchases thereunder, Seller hereby represents and
warrants as follows:

    


    7.1.1 Organization and Good
Standing.  Seller has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its organization, with power and authority to own its properties and to conduct
its business as such properties are presently owned and such business is
presently conducted.

    


    7.1.2 Due
Qualification.  Seller is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualification, licenses or
approvals except where the failure to so qualify or have such licenses or
approvals has not
had, and could not reasonably be expected to have, a Material Adverse
Effect.

    


    7.1.3 Power and Authority; Due
Authorization.  Seller (A) has all necessary power, authority
and legal right to (i) execute and deliver this Agreement, (ii) carry out the
terms of this Agreement, and (iii) sell and assign the Receivables on the terms
and conditions herein provided and (B) has been duly authorized by all necessary
corporate and other action to the execute, deliver and perform its obligations
under this Agreement.

    


    7.1.4 Binding
Obligations.  This Agreement constitutes a legal, valid and
binding obligation of Seller, enforceable in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors’ rights generally and
by general principles of equity, regardless of whether such enforceability is
considered in a Proceeding.

    


    
      
         

      

      
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    7.1.5 No
Violation.  The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof will not (i) conflict
with, result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under Seller’s
articles of incorporation or certification of formation, by-laws or operating
agreement, each as the case may be, or any other Obligation, (ii) result in the
creation or imposition of any Lien upon Seller’s properties pursuant to the
terms of any such contractual obligation, other than this Agreement, or (iii)
violate any applicable law.

    


    7.1.6 No
Proceedings.  There is no litigation, Proceeding or
investigation pending or, to the best of Seller’s knowledge, threatened, before
any governmental authority or arbitrator (i) asserting the invalidity of this
Agreement, (ii) seeking to prevent the sale and assignment of the Receivables,
the collectibility of the Receivables or the consummation of any of the other
transactions contemplated by this Agreement, or (iii) seeking any determination
or ruling that could reasonably be expected to have a Material Adverse
Effect.

    


    7.1.7 Government Contract
Regulatory Matters.

    


    7.1.7.1   Compliance with Contract
Requirements.  (i) Seller has fully complied with all material
terms and conditions of each Government Contract to which it is a party, and has
performed in all material respects all obligations required to be performed by
it thereunder, (ii) Seller has complied with all statutory and regulatory
requirements, including, without limitation, the Federal Property and
Administrative Services Act, the FAR, any applicable agency specific acquisition
regulation, related cost principles, and the cost accounting standards, where
and as applicable to each of the Government Contracts and the Government
Contract Bids, and (iii) the representations, certifications and warranties made
by Seller with respect to the Government Contracts or Government Contract Bids
were accurate as of their effective dates and Seller has fully complied in all
material respects with all such certifications.  Seller has not
received a substantially adverse or negative government past performance
evaluation or rating for the past ten (10) years that could be reasonably
expected to adversely affect the evaluation by the Government or proposals for
future Government Contracts.

    


    7.1.7.2   Notice of
Non-Compliance. With respect to any Government Contract with Seller,
neither the Government, any prime contractor or higher-tier subcontractor under
a Government Contract nor any other Person has notified Seller in writing of any
actual or alleged violation or breach of any statute, regulation,
representation, certification, disclosure obligation, contract term, condition,
clause, provision or specification, including, without limitation, the
Procurement Integrity Act, the Service Contract Act, the Trade Agreements Act
and the Buy American Act, that could be reasonably expected to adversely affect
the collectability of any Purchased Receivable or adversely affect the award of
Government Contracts to Seller in the future.

    


    
      
         

      

      
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    7.1.7.3   False Claims, Defective
Pricing and Requests for Pricing Reductions.  Seller is not
party to any ligation and has taken no action that could reasonably be expected
to give rise to (i) liability under the False Claims Act, (ii) a claim for price
adjustment under the Truth in Negotiations Act or (iii) any other request for a
material reduction in the price of any Government Contracts.

    


    7.1.7.4   Termination for Default or
Convenience.  (i) Seller has not received any written or oral
show cause, cure, deficiency, default or similar notice relating to any
Government Contracts, (ii) no termination for default, cure notice or show cause
notice has been issued or threatened and remains unresolved with respect to any
Government Contract or Government Contract Bid, and no event, condition or
omission has occurred or exists that would constitute grounds for such action,
(iii) no past performance evaluation received by Seller with respect to any such
Government Contract has set forth a default or other material failure to perform
thereunder or termination or default thereof, (iv) there has not been any
material withholding or setoff under any Government Contract, (v) all invoices
and claims (including requests for progress payments and provisional costs
payments) submitted under each Government Contract were current, accurate and
complete in all material respects as of their submission date and (vi) none of
the execution, delivery or performance of this Agreement and any other consents,
certificates or deliverables required herein does or will conflict with or
result in a material breach of or default under any Government Contract or cause
a termination of any Government Contract due to loss of preferential
status.  Seller has not received any written or oral notice
terminating any of the Government Contracts for convenience or indicating an
intent to terminate any of the Government Contracts for
convenience.

    


    7.1.7.5   Disputes and
Claims.  Seller has not received any written notice of any
outstanding material claims or contract disputes to which Seller is a party
(i) relating to the Government Contracts or Government Contract Bids and
involving either the Government, any prime contractor, any higher-tier
subcontractor, vendor or any third party; or (ii) relating to the
Government Contracts under the Contract Disputes Act or any other federal
statute.

    


    7.1.7.6   Suspension and
Debarment.  Neither Seller, any of Seller’s affiliates nor any
of Seller’s respective managers, directors, officers or employees in connection
with the performance of the duties for or on behalf of Seller or any of Seller’s
affiliates has been debarred, suspended, proposed for suspension or debarment
from bidding on any Government Contract, declared nonresponsible or ineligible,
or otherwise excluded from participation in the award of any Government Contract
or for any reason been listed on the List of Parties Excluded from Federal
Procurement and Non-procurement Programs.  Within the last ten (10)
years, no debarment, suspension or exclusion proceeding has been initiated
against Seller, any of Seller’s affiliates or any of their respective directors,
officers or employees in connection with the performance of the duties for or on
behalf of Seller or any of Seller’s affiliates.  No circumstances
exist that would warrant the institution of suspension or debarment proceedings
against Seller, any of Seller’s affiliates or any of their respective managers,
directors, officers or employees in connection with the performance of the
duties for or on behalf of Seller or any of Seller’s affiliates.

    


    
      
         

      

      
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    7.1.7.7   Responsibility
Determinations. No negative determination of responsibility has been
issued against Seller since its inception with respect to any quotation, bid or
proposal for a Government Contract.

    


    7.1.7.8   Audits, Investigations and
Enforcement Actions.  Except as described in Schedule 7.1.7.8
attached hereto, no audit, review, inspection, investigation, survey or
examination of Seller’s records by the Government is threatened or pending; (ii)
Seller has not received any official notice that it is being specifically
audited or investigated by the Government Accountability Office, the DCAA, any
state or federal agency Inspector General, the contracting officer with respect
to any Government Contract, or the U.S. Department of Justice (including any
U.S. Attorney); and (iii) Seller has not received any written notice or
otherwise become aware that any audit, review, inspection, investigation, survey
or examination of records described in the attached schedule, has revealed any
fact, occurrence or practice which could reasonably be expected to adversely
effect Seller.

    


    7.1.7.9   Disclosure.  Seller
has not made any disclosure to the Government or other customer or prime
contractor or higher-tier subcontractor related to any suspected, alleged or
possible violation of a material requirement of a Government Contract, any
apparent or alleged material irregularity, misstatement or omission arising
under or relating to a Government Contract or Government Contract Bid, or any
violation of Law or regulation relating to a Government Contract or Government
Contract Bid.

    


    7.1.7.10  No
Violations.  Seller has not engaged in or been charged with, or
received or been advised in writing of any charge, investigation, claim or
assertion of, nor has Seller nor any of its directors, officers or employees in
their capacities as such been subject to any criminal indictment or information,
lawsuit, subpoena, civil investigative demand, discovery request, administrative
proceeding, voluntary disclosure, claim, dispute, mediation or arbitration with
regard to, any material violation of any requirement pertaining to a Government
Contract or Government Contract Bid, including material violations of any
statutory or regulatory requirements or violations of any applicable laws
relating thereto.

    


    7.1.7.11  No
Litigation.  Seller has not taken any action and is not a party
to any litigation that could reasonably be expected to give rise to (i) a
claim for price adjustment under the Truth in Negotiations Act; or (ii) any
other request for a material reduction in the price of any Government Contract,
including but not limited to claims based on actual or alleged defective
pricing.  To Seller’s best knowledge, there exists no basis for a
claim of any liability of Seller by the Government as a result of defective cost
and pricing data submitted to the Government. Seller is not participating in any
pending claim and Seller is unaware of any potential claim under the Contract
Disputes Act against the Government or any prime contractor, subcontractor or
vendor arising under or relating to any Government Contract or Government
Contract Bid.

    


    
      
         

      

      
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    7.1.7.12  DCAA-Approved
Rates.  All Direct Costs and Indirect Cost rates are being
billed by Seller under the Government Contracts consistent with DCAA-approved
rates or provisional rate agreements.

    


    7.1.7.13 National Security
Obligations.  Seller is in compliance with all applicable
national security obligations, including those specified in the National
Industrial Security Program Operating Manual, DOD 5220.22-M (January 1995), and
any supplements, amendments or revised editions thereof.

    


    7.1.7.14  No Events of
Omissions.  To Seller’s best knowledge, there are no events or
omissions that would reasonably be expected to result in (i) a material
claim against Seller by the Government or any prime contractor, subcontractor,
vendor, or other third party arising under or relating to any Government
Contract or Government Contract Bid; or (ii) a material dispute between
Seller and the Government or any prime contractor, subcontractor, vendor, or
other third party arising under or relating to any Government Contract or
Government Contract Bid.

    


    7.1.7.15 Losses and Cost Overruns; No
Improper Payments.  No Government Contract has incurred or
currently projects losses or cost overruns in an amount exceeding fifty thousand
dollars ($50,000).  No payment has been made by Seller, or by a Person
acting on Seller’s behalf, to any Person (other than to any bona fide employee
or agent of Seller, as defined in subpart 3.4 of the FAR) which is or was
improperly contingent upon the award of any Government Contract or which would
otherwise be in violation of any applicable procurement law or regulation or any
other applicable laws.

    


    7.1.7.16 Costs
Allowable.  All of Seller’s costs (both Direct Costs and/or
Indirect Costs) that have been, prior to the date hereof, charged to any
Government Contract are allowable in accordance with applicable cost accounting
standards (except for costs properly charged to a reserve account appearing on
Seller’s balance sheet as of the close of September 30, 2008).

    


    7.1.8 Assignment of Claims
Act.  Prior to each sale of Purchased Receivables hereunder,
all steps shall have been taken necessary or appropriate under the Assignment of
Claims Act to insure that (i) each Purchased Receivable being sold has been
validly assigned to Buyer, or Buyer’s designee, (ii) Seller has validly assigned
such Purchased Receivables to Buyer, or Buyer’s designee, and (ii) all payments
and Collections with respect to such Purchased Receivables have been validly
directed to be made directly to the Segregated Account.

    


    
      
         

      

      
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    7.1.9 Government
Approvals.  Except as set forth or required herein, no
governmental action, approval or consent is required for the due execution,
delivery and performance by Seller of this Agreement.

    


    7.1.10 Quality of Title; Valid
Sale; No Other Liens.

    


    7.1.10.1 Seller is
the sole legal and beneficial owner of the Receivables, free and clear of any
Lien. Without limiting the generality of the foregoing, no security agreement,
financing statement or other public notice with respect to all or any part of
the Receivables that evidences a Lien securing any indebtedness of Seller is on
file or of record in any public office, except such as may have been filed in
favor of Buyer pursuant to this Agreement.

    


    7.1.10.2 Seller
acquired its rights in the Receivables in good faith without notice of any Lien
as defined in the UCC, except as set forth in Section 7.1.10.1 hereof.

    


    7.1.10.3 Seller
has not authorized the filing of and is not aware of any financing statements
against Seller that include a description of collateral covering the Receivables
other than any financing statements relating to any Receivables sold to Buyer
hereunder.

    


    7.1.10.4 There are
no judgment lien or tax lien filings against Seller. Except as set forth in this
Agreement, Seller has not, pledged, assigned, sold, granted a security interest
in or otherwise conveyed or disposed of any interest in any of the
Receivables.

    


    7.1.10.5 Each
Receivable constitutes an “account” as such term is defined in the
UCC.

    


    7.1.11 Accuracy of
Information.  Each report, information, exhibit, financial
statement, document, book, record or report furnished or to be furnished at any
time by or on behalf of it to Buyer or KBC in connection with this Agreement is
or will be accurate in all material respects as of its date or as of the date so
furnished, and no such item contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary in order
to make the statements contained therein, in the light of the circumstances
under which they were made, not materially misleading.

    


    7.1.12 Offices; Billing
Address.  The principal place of business and chief executive
office of Seller, and the location where Seller keeps all of its books, records
and documents evidencing or relating to Purchased Receivables, is located at the
address set forth on the first page of this Agreement. Seller has a billing
address located in the United States, its territories or
possessions.

    


    
      
         

      

      
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    7.1.13 Maintenance of Books and
Records.  Seller has accounted for each sale of Purchased
Receivables in its books and financial statements as sales, consistent with
GAAP.

    


    7.1.14 Solvency.  Seller
is Solvent; and at the time of (and immediately after) each sale pursuant to
this Agreement it shall be Solvent.

    


    7.1.15 Compliance with this
Agreement.  Seller has complied with all of the terms,
covenants and agreements contained in this Agreement applicable to
it.

    


    7.1.16 Corporate
Name.  Seller’s complete corporate name is as forth on the
first page of this Agreement, and Buyer does not use and has not during the last
six (6) years used any other corporate name, trade name, doing business name or
fictitious name.

    


    7.1.17 Eligible
Receivables.  Each Purchased Receivable sold by it to Buyer
hereunder that is designated as an Eligible Receivable on any Invoice Remittal
is in fact an Eligible Receivable.

    


    7.1.18 No Termination
Events.  No event has occurred and is continuing, or would
result from a purchase, in respect of the Receivables or from the application of
proceeds therefrom, which would cause the early termination of this
Agreement.

    


    7.1.19 No
Consents.  Subject to Section 6.2.4 hereof,
no authorization, consent, license, order or approval of, or registration or
declaration with, any governmental authority or other Person is required to be
obtained, effected or made by Seller in connection with the execution and
delivery by Seller of this Agreement or its performance of its obligations under
this Agreement or the transactions contemplated hereby, or for the exercise by
Buyer of its rights hereunder except, for filings required hereunder and those
that have been obtained, effected or made.

    


    7.1.20 No
Default.  No Event of Default has occurred and is continuing,
both before and immediately after giving effect to this
Agreement.  Seller is not in default in the performance, observance or
fulfillment of any contractual obligations applicable to it or its
property.

    


    7.1.21 ERISA.  If
has complied in all material respects with ERISA and has not incurred and does
not expect to incur any liabilities to the Pension Benefit Guaranty Corporation
(or any successor thereto) under ERISA.  Seller is not a sponsor of,
or a member of a controlled group of any Person that is a sponsor of, any
Plan.

    


    7.1.22 Anti-Money Laundering Laws;
Patriot Act.  Seller is in compliance, in all material
respects, with the (a) Trading with the Enemy Act, and each of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) and any other enabling legislation or
executive order relating thereto, and (b) any applicable anti money laundering
laws and regulations, including the USA Patriot Act.

    


    
      
         

      

      
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    7.1.23 Taxes  Seller
has filed or caused to be filed all federal and material state, local and
foreign tax returns which are required to be filed with any governmental
authority after giving effect to applicable extensions, and has paid or has
caused to be paid all taxes as shown on said returns or on any assessment
received by it in writing, to the extent that such taxes have become due other
than those (a) not yet delinquent or (b) being diligently contested in good
faith by appropriate Proceedings as to which adequate reserves have been
provided in accordance with GAAP and which if unpaid, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
No tax return is under audit or examination by any governmental authority and no
notice of such an audit or examination or any assertion of any claim for taxes
has been given or made by any governmental authority, except such audits,
examinations or claims that have been disclosed to Buyer in writing, none of
which could, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Seller believes that the charges, accruals and reserves
on its books in respect of taxes or other governmental charges are
adequate.

    


    7.1.24 True and Complete
Disclosure.

    


    7.1.24.1 Neither
this Agreement nor any agreement, document, certificate or written statement
furnished to Buyer by or on behalf of Seller in connection with the transactions
contemplated hereby, at the time it was furnished, contained any untrue
statement of  material fact or omitted to state a material fact, under
the circumstances under which it was made, necessary in order to make the
statements contained herein or therein not misleading, it being understood that
for purposes of this Section 7.1.24.1,
such factual information and data shall not include pro forma financial
information or projections (including financial estimates, forecasts and other
forward looking information or information of a general economic or general
industry nature).

    


    7.1.24.2 The
written projections (including any financial estimates, forecasts and other
forward-looking information) contained in the information and data referred to
in paragraph (a) above were based on good faith estimates and assumptions
believed by the Person making such projections to be reasonable at the time
made, it being recognized by Buyer that such projections as to future events are
not to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected
results.

    


    7.1.25 Material Adverse
Effect. Since September 30, 2008, there have been no events,
circumstances, developments or other changes in facts that, individually or in
the aggregate, would have or could reasonably be expect to result in a Material
Adverse Effect.

    


    
      
         

      

      
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    7.1.26 Environmental
Matters. (a)  The operations of Seller are and have been in
compliance with all applicable Environmental Laws, including obtaining,
maintaining and complying with all permits required by any applicable
Environmental Law, other than non-compliances that, in the aggregate, would not
have a reasonable likelihood of resulting in liabilities exceeding ten thousand
dollars ($10,000) in the aggregate, (b) Seller is not party to, and no real
property currently or, to the knowledge of Seller, previously owned, leased,
subleased, operated or otherwise occupied by or for Seller is subject to or the
subject of, any contractual obligation or any pending or, to the knowledge of
Seller, threatened, order, action, investigation, suit, Proceeding, audit,
claim, demand, dispute or notice of violation or of potential liability or
similar notice under or pursuant to any Environmental Law other than those that,
in the aggregate, are not reasonably likely to result in liabilities exceeding
ten thousand dollars ($10,000) in the aggregate, (c) no Lien in favor of any
governmental authority securing, in whole or in part, environmental liabilities
has attached to any property of Seller and, to the knowledge of Seller, no
facts, circumstances or conditions exist that could reasonably be expected to
result in any such Lien attaching to any such property, (d) Seller has not
caused or suffered to occur a release of hazardous materials at, to or from any
real property of Seller and each such real property is free of contamination by
any hazardous materials except for such release or contamination that could not
reasonably be expected to result, in the aggregate, in liabilities exceeding ten
thousand dollars ($10,000) in the aggregate, (e) Seller (i) is not or has not
been engaged in, or has permitted any current or former tenant to engage in,
operations, or (ii) does not know of any facts, circumstances or conditions,
including receipt of any information request or notice of potential
responsibility under any Environmental Laws, that, in the aggregate, would have
a reasonable likelihood of resulting in liabilities exceeding ten thousand
dollars ($10,000) in the aggregate and (f) Seller has made available to Buyer
copies of all existing environmental reports, reviews and audits and all
documents pertaining to actual or potential environmental liabilities, in each
case to the extent such reports, reviews, audits and documents are in their
possession, custody or control.

    


    7.1.27 Transfer
Filings.  Each Purchased Receivable been validly sold or
contributed to Buyer free and clear of all Liens and rights of others; all
filings (including filings under the UCC) necessary in the United States to give
Buyer an ownership interest in such Purchased Receivables have been duly
executed and delivered to Buyer; all such filings indicate that they are being
made in order to perfect absolute assignments (rather than pledges) of the
Purchased Receivables; and all fees in connection with such filings have been
paid.

    


    7.1.28 Eligible Receivables;
Eligible Contractor.  Each Purchased Receivable sold by Seller
hereunder shall at the time of such sale meet in all respects all requirements
to constitute an “Eligible Receivable” within the definition of such term set
forth herein. Without limiting the foregoing, Seller meets or shall at the time
of such sale of any Purchased Receivables shall meet in all respects the
requirements to constitute an “Eligible Contractor” within the definition of
such term set forth herein.

    


    
      
         

      

      
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    7.1.29 Origination of Purchased
Receivables.  All Purchased Receivables purchased or to be
purchased by Buyer (a) were originated or shall at the time of such purchase
have been originated in the regular course of business of Seller in accordance
with applicable laws and (b) were or will be purchased Buyer from Seller and no
adverse selection procedures have been or will have been utilized in selecting
such Purchased Receivables from all other similar Receivables owned by
Seller.

    


    SECTION
8

    COVENANTS

    


    8.1    Affirmative
Covenants.  From the date hereof until the termination of this
Agreement:

    


    8.1.1 Compliance with Laws,
Etc.  Seller will comply in all material respects with all
applicable laws, including those with respect to the Receivables, except where
noncompliance could not reasonably be expected to have a
Material Adverse Effect, and Seller shall provide Buyer with a Compliance
Certificate (i) on a quarterly basis to be received by Buyer not later than the
fifth calendar day following each calendar quarter, and (ii) on a more frequent
or other basis if and as requested by Buyer.

    


    8.1.2 Preservation of Corporate
Existence.  Seller will preserve and maintain its corporate or
limited liability existence, rights, franchises and privileges in the
jurisdiction of its formation, and qualify and remain qualified in good standing
as a foreign corporation or organization in each jurisdiction where the failure
to preserve and maintain such existence, rights, franchises, privileges and
qualification could reasonably be expected to have a Material Adverse
Effect.

    


    8.1.3 Audits.  (A)
Seller will at any time and from time to time during regular business hours,
permit Buyer or KBC or any of its agents or representatives, (i) to examine and
make copies of and abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in its possession or under its
control relating to Purchased Receivables, (ii) to visit its offices and
properties for the purpose of examining such materials described in clause (A)(i) above,
and to discuss matters relating to Purchased Receivables or its performance
hereunder with any of its officers or employees having knowledge of such
matters, and (iii) to verify the existence and amount of the Purchased
Receivables; and (B) without limiting the provisions of clause (A) above,
from time to time on request of KBC, permit certified public accountants or
other auditors acceptable to KBC to conduct, at Seller’s expense, a review of
its books and records with respect to the Purchased Receivables; provided that unless
this Agreement is terminated early, Seller shall not be responsible for the cost
of more than three (3) such audits during the twelve (12) month period beginning
on the date of the initial purchase of Purchased Receivables, or one such audit
in any calendar year thereafter.

    


    8.1.4 Keeping of Records and Books
of Account.  Seller will maintain and implement administrative
and operating procedures (including, without limitation, an ability to recreate
records evidencing Purchased Receivables in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records and
other information reasonably necessary or advisable for the collection of all
Purchased Receivables (including, without limitation, records adequate to permit
the daily identification of each new Purchased Receivable and all Collections of
and adjustments to each existing Purchased Receivable). Further, Seller shall
indicate in its consolidated financial statements and computer records that the
Purchased Receivables have been absolutely transferred, conveyed, sold and
assigned to Buyer or its designee, and Seller will not otherwise claim in its
records ownership of any of the Purchased Receivables or the proceeds thereof.
Seller shall not take any action that is inconsistent with Buyer’s ownership of
the Purchased Receivables. Without limiting the foregoing, Seller shall treat
the sale of the any Purchased Receivables as a sale for federal, state and local
income tax purposes.

    


    
      
         

      

      
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    8.1.5 Financial Statements;
Reports.  Seller shall furnish or cause to be furnished to
Buyer (i) within ninety (90) days after the end of each fiscal year of Seller
commencing with the fiscal year ending 2009, the audited balance sheet of Seller
(or, if audited financial statements are not available, unaudited balance sheet
and unaudited combined statements of income, stockholder or member equity and
cash flows of Seller together with a certificate of an officer of Seller, to the
effect that such financial statements present fairly in all material respects
the financial positions of Seller as at the end of the fiscal year and the
results of operations for the fiscal year then ended in conformity with
GAAP)  as at the end of, and the related audited combined statements
of income, stockholder or member equity and cash flows for, such fiscal year,
together with a certificate signed by an officer of Seller, to the effect that
such financial statements, present fairly in all material respects the
consolidated financial condition and results of operation of Seller as of the
dates and for the periods indicated in accordance with GAAP applied on a basis
consistent with that of the preceding year or containing disclosure of the
effect on the financial condition or results of operations of any change in the
application of accounting principles and practices during such year; and (ii)
within forty-five (45) days after the end of each of the first three (3) fiscal
quarters of each fiscal year of Seller, commencing with the fiscal quarter
ending March 31, 2009, the unaudited consolidated balance sheets of Seller and
the related unaudited consolidated statements of income, stockholder or member
equity and cash flows of Seller for, such fiscal quarter, and for the portion of
the fiscal year through the end of such fiscal quarter, together with a
certificate signed by an officer of Seller, to the effect that such financial
statements present fairly in all material respects the financial positions of
Seller as at the end of the fiscal quarter and the results of operations for the
fiscal quarter then ended in conformity with GAAP, subject to normal year-end
audit adjustments and the absence of footnotes.

    


    8.1.6 Due
Diligence.  Seller agrees to satisfy or cause to be satisfied
any and all due diligence or confirmation requests of Buyer or KBC related to
this Agreement, as deemed necessary in Buyer’s or KBC’s sole
discretion.

    


    8.1.7 Deemed Collections;
Repurchase.  If it is determined that Seller is obligated to
Buyer or its designee any amounts with respect to any Deemed Collections or
repurchase amounts arising pursuant to Section 4.2
hereunder, Seller will, within two (2) Business Days of such determination, pay
such amounts to the Segregated Account. Seller shall also pay promptly to the
Segregated Account upon demand any reasonable out-of-pocket expenses incurred by
Buyer or KBC in connection with any such Deemed Collection or repurchase,
including reasonable fees and disbursements of counsel. All payments under this
Section 8.1.7
shall be paid by Seller in immediately available funds directly to the
Segregated Account, without any withholding, deduction, set-off or
counterclaim.

    


    
      
         

      

      
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    8.1.8 Notices.  Seller
will give written notice to Buyer and KBC promptly, but in any event within
three (3) Business Days, upon becoming aware of the occurrence of (i) any Event
of Default or pending or anticipated Event of Default; (ii) the submission of
any claim or the initiation or threat of any legal process or Proceeding, or
rule making or disciplinary proceeding by or against Seller, or the promulgation
of any proceeding or any proposed or final rule which could reasonably be
expected to have a Material Adverse Effect; (iii) any damage to or loss,
elimination or destruction of any portion of the Purchased Receivables or (iv)
the receipt of notice that (a) any license, permit, charter, registration or
approval necessary for the conduct of Seller’s business is to be, or may be,
suspended or revoked or (b) Seller is to cease and desist any practice,
procedure or policy employed by Seller in the conduct of its business, and such
suspension, revocation or cessation may reasonably be expected to have a
Material Adverse Effect.

    


    8.1.9 Maintenance of
Insurance.  (A) Seller shall (i) maintain or cause to be
maintained in full force and effect all policies of insurance of any kind with
respect to Seller’s property and business (including policies of life (including
“key man” coverage, as applicable), fire, theft, product liability, public
liability, property damage, other casualty, employee fidelity, workers’
compensation, business interruption and employee health and welfare insurance)
with financially sound and reputable insurance companies or associations (in
each case that are not affiliates of Seller) of a nature and providing such
coverage as is sufficient and as is customarily carried by businesses of the
size and character of Seller’s business and in any event in form and substance
reasonably acceptable to Buyer and (ii) cause all such insurance relating to any
property or business Seller to name Buyer, as additional insured or loss payee,
as appropriate and shall use its commercially reasonable efforts to provide that
no cancellation, material addition in amount or material change in coverage
shall be effective until after thirty (30) days (or ten (10) days in the case of
a payment default) notice thereof to Buyer. Buyer shall be entitled, upon
reasonable advance notice, to review Seller’s insurance policies carried and
maintained with respect to the Grantors’ obligations under this Section
8.1.9.  Upon request, Seller shall furnish Buyer with copies of
all insurance policies, binders, and cover notes or other evidence of such
insurance.  Notwithstanding anything to the contrary herein, no
provision of this Section 8.1.9 or any
provision of this Agreement shall impose on Buyer any duty or obligation to
verify the existence or adequacy of the insurance coverage maintained by Seller,
nor shall Buyer be responsible for any representations or warranties made by or
on behalf of Seller to any insurance broker, company or underwriter. Buyer, at
its sole option, may obtain such insurance if not provided by Seller and in such
event, Seller shall reimburse Buyer upon demand for the cost thereof together
with interest.  Seller shall also carry and maintain, should Seller’s
risk profile change during the term of this Agreement, any other insurance that
Buyer may reasonably require from time to time.

    


    
      
         

      

      
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    8.1.10 Location of
Records.  Seller will keep its principal place of business and
chief executive office, and the offices where it keeps its records concerning
the Purchased Receivables, at its address set forth on the first page of this
Agreement or, upon thirty (30) days’ prior written notice to KBC, at such other
locations acceptable to Buyer and KBC.

    


    8.1.11 Further
Assurances.  Seller, upon the reasonable request of Buyer,
shall duly execute and deliver, or cause to be duly executed and delivered, at
the cost and expense of Seller, such further agreements, documents and
instruments, and do such other acts and things, as may be necessary or
reasonably requested by Buyer to carry out the provisions and purposes of this
Agreement.

    


    8.1.12 Maintenance of
Licenses.  Seller shall maintain all licenses, permits,
charters and registrations the loss or suspension of which could reasonably be
expected to have a Material Adverse Effect.

    


    8.2    Negative
Covenants.  From the date hereof until the termination of this
Agreement without Buyer’s prior written consent:

    


    8.2.1 Sales, Liens,
Etc.  Seller will not, except as otherwise provided herein,
sell, assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any Lien upon or with respect to, any Purchased
Receivable or any interest therein.

    


    8.2.2 Extension or Amendment of
Receivables.  Seller will not extend, amend or otherwise
modify, or permit any Person to extend, amend or otherwise modify, the terms of
any Purchased Receivable.

    


    8.2.3 Change in Business or Credit
and Collection Policy.  Seller will not make any change in the
character of its business, which change could impair the collectibility of any
Purchased Receivable or otherwise adversely affect the interests or remedies of
Buyer under this Agreement or result in a Material Adverse Effect.

    


    8.2.4 Termination.  Seller
will not terminate, or take or permit any action that would cause the
termination of this Agreement other than in accordance with the terms
herein.

    


    8.2.5 Consolidation;
Merger.  Seller will not consolidate or merge with or into any
other Person or convey, transfer or dispose of its properties and assets in one
or more transactions substantially as an entirety to any Person, or wind up,
liquidate or dissolve its affairs. Seller may consolidate or merge with or into
any other Person if the officers and directors of the Seller do not
change.

    


    
      
         

      

      
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    8.2.6 Impair
Effectiveness.  Seller will not permit the validity or
effectiveness of this Agreement to be impaired, or permit any Person (other than
Buyer) to be released from any covenants or obligations with respect to this
Agreement, except as may be expressly permitted hereby.

    


    8.2.7 Prohibited
Transactions. Seller will not engage in a “prohibited transaction”, as
defined in Section 406 of ERISA or Section 4975 of the Code, with
respect to any Plan or knowingly consent to any other “party in interest” or any
“disqualified person”, as such terms are defined in Section 3(14) of ERISA
and Section 4975(e)(2) of the Code, respectively, engaging in any “prohibited
transaction”, with respect to any Plan; or permit any Plan to incur any
“accumulated funding deficiency”, as defined in Section 302 of ERISA or
Section 412 of the Code, unless such incurrence shall have been waived in
advance by the Internal Revenue Service; or terminate any Plan in a manner which
could result in the imposition of a Lien on any property of Seller pursuant to
Section 4068 of ERISA; or breach or knowingly permit any employee or officer or
any trustee or administrator of any Plan to breach any fiduciary responsibility
imposed under Title I of ERISA with respect to any Plan; engage in any
transaction which would result in the incurrence of a liability under Section
4069 of ERISA; or fail to make contributions to a Plan which could result in the
imposition of a Lien on any property of Seller pursuant to Section 302(f)
of ERISA or Section 412(n) of the Code, if the occurrence of any of the
foregoing events (alone or in the aggregate) would result in a liability which
would be reasonably likely to result in a Material Adverse Effect.

    


    8.2.8 Instructions to Account
Debtors.  Seller will not provide any instructions to Account
Debtors contrary to the requirement that Collections be deposited directly into
the Segregated Account.

    


    8.2.9 Waiver of Stay or Execution
of Laws.  Seller covenants (to the extent it may lawfully do
so) that is shall not at any time insist upon, or please, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or execution law,
including filing a voluntary petition under Chapter 11 of the Bankruptcy Code,
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of or the exercise of any remedies under this
Agreement. Seller (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to Buyer, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.

    


    8.2.10 Mergers, Acquisitions,
Sales, Etc.  Seller will not (i) be a party to any merger or
consolidation, or purchase or otherwise acquire all or substantially all of the
assets or any stock of any class of, or any partnership or joint venture
interest in, any other Person without the consent of Buyer or (ii) sell,
transfer, convey or lease all or any substantial part of its assets, or sell or
assign with or without recourse any Receivables or any interest therein (other
than pursuant hereto or to this Agreement). Seller may be a party to any merger
or consolidation, or purchase or otherwise acquire all or substantially all of
the assets or any stock of any class of, or any partnership or joint venture
interest in, any Person if the officers and directors of the Seller do not
change.

    


    
      
         

      

      
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    SECTION
9

    DEFAULT

    


    9.1   Events of
Default.  The occurrence of any one or more of the following
shall constitute an “Event of Default”
hereunder:

    


    9.1.1 Seller
fails to pay any amount owed to Buyer or its designee as and when due under this
Agreement or otherwise;

    


    9.1.2 There
shall be commenced by or against Seller any voluntary or involuntary case under
the Bankruptcy Code, any assignment for the benefit of creditors or appointment
of a receiver or custodian for any of its assets;

    


    9.1.3 Seller
shall not be Solvent, or Seller is generally not paying its debts as they become
due or is left with unreasonably small capital;

    


    9.1.4 Any
voluntary Lien, garnishment, attachment or the like is issued against or
attaches to the Receivables;

    


    9.1.5 Seller
shall breach any condition, warranty, representation or covenant set forth
herein other than as set forth in Section 9.1.1, unless the same is cured to
Buyer’s satisfaction within five (5) days after Buyer has given Seller oral or
written notice thereof; provided, that if
such breach is incapable of being cured within such five (5)-day cure period, it
shall constitute an immediate default hereunder;

    


    9.1.6 Seller is
not in compliance with, or otherwise is in default under, any term of any
document, instrument or agreement evidencing a debt, obligation or liability of
any kind or character of Seller, now or hereafter existing, in favor of Buyer or
any division or affiliate of Buyer, regardless of whether such debt, obligation
or liability is direct or indirect, primary or secondary, joint, several or
joint and several or fixed or contingent, together with any and all renewals and
extensions of such debts, obligations and liabilities, or any part
thereof;

    


    9.1.7  This
Agreement or any material provision herein shall terminate in whole (except in
accordance with the terms hereof), or shall cease to be effective or to be the
legally valid, binding and enforceable obligation of Buyer or Seller;
or

    


    9.2   Remedies upon
Default.  Upon the occurrence of an Event of Default, (i)
without implying any obligation to buy Receivables, Buyer my cease buying
Receivables or extending any financial accommodations to Seller, (ii) all or a
portion of the Seller Obligations shall be, at the option of and upon demand by
Buyer, or with respect to an Event of Default described in Section 9.1.2 hereof,
automatically and without notice or demand, due and payable in full, and (iii)
Buyer shall have and may exercise all the rights and remedies under this
Agreement and under applicable law, including the rights and remedies of a
secured party under the UCC, all the power of attorney rights described in Section 5.1 hereof
with respect to the Purchased Receivables and the right to collect, dispose of,
sell, lease, use and realize upon such Purchased Receivables in any commercially
reasonable manner. Seller and Buyer agree that any notice of sale required to be
given to Seller shall be deemed to be reasonable if given five (5) days prior to
the date on or after which the sale may be held.

    


    
      
         

      

      
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    SECTION
10

    MISCELLANEOUS

    


    10.1   Accrual of
Interest.  If any amount owed by Seller hereunder is not paid
when due, including, without limitation, any Deemed Collections or repurchases
due under Section
4.2 hereof or amounts due under Section 10.2 hereof,
such amounts shall bear interest at a per annum rate equal to the PAF Rate until
the earlier of (i) payment in immediately available funds or (ii) entry of a
final judgment thereof, at which time the principal amount of any money judgment
remaining unsatisfied shall accrue interest at the highest rate allowed by
applicable law.

    


    10.2   Fees, Costs and
Expenses.  Seller will pay to Buyer immediately on demand all
fees, costs and expenses (including attorneys’ and professional fees and their
costs and expenses) that Buyer or its designee incurs or may impose in
connection with any of the following: (i) preparing, negotiation, administering
and enforcing this Agreement or any other agreement executed in connection with
this Agreement, including any amendments, waivers or consents, (ii) any
litigation or dispute (whether instituted by Buyer, Seller or any other Person)
about the Purchased Receivables, this Agreement or any other agreement executed
in connection with this Agreement, (iii) enforcing any rights against Seller,
any guarantor or any Account Debtor, (iv) protecting or enforcing its interest
in the Purchased Receivables, (v) collecting the Purchased Receivables and the
Obligations and (vi) the representation of Buyer or its designee in connection
with any bankruptcy case or insolvency proceeding involving Seller, any
Purchased Receivable, any Account Debtor or any guarantor.

    


    10.3   Indemnification.

    


    10.3.1    Seller
agrees to pay, indemnify and hold Buyer, its designees and their respective
directors, officers, employees and agents harmless from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever arising
out of, relating to or resulting from any of the following (collectively, the
“Buyer Indemnified
Liabilities”): (i) the failure of any representation or warranty or
statement made or deemed made by Seller under or in connection with this
Agreement or in any certificate or report delivered pursuant hereto, including,
without limitation, any Receivables Invoice, to be true and correct in any
material respect when made or deemed made; (ii) the failure by Seller to perform
its Seller Obligations under this Agreement or (iii) the failure by Seller to
comply with any Applicable Law, rule or regulation of any governmental authority
with respect to the sale, transfer, delivery and assignment of any Purchased
Receivables.

    


    
      
         

      

      
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    10.3.2   Without
limiting or being limited by the foregoing, Seller agrees to pay, on demand, to
each of Buyer and its directors, officers, employees and agents any and all
amounts necessary to indemnify Buyer and its directors, officers, employees and
agents from and against any and all Buyer Indemnified Liabilities relating to or
resulting from any Proceeding related to any of the matters referred to in Section 10.3.1 hereof
or any investigation, litigation or proceeding with respect to any action, or
failure to act, by Seller under this Agreement.

    


    10.3.3   Notwithstanding
anything in this Section 10.3 to the
contrary, Seller shall have no obligation to indemnify any of the Buyer and its
directors, officers, employees and agents under this Section 10.3 in
respect of Buyer Indemnified Liabilities to the extent resulting from (i) the
gross negligence or willful misconduct on the part of Buyer or its directors,
officers, employees and agents as determined by the final judgment of a court of
competent jurisdiction no longer subject to appeal or (ii) litigation between
Buyer and its Buyer and its directors, officers, employees and agents not
involving an actual or alleged act or omission of Seller or any of Seller’s
affiliates.

    


    10.4   Severability, Waiver and
Amendment.  In the event that any provision of this Agreement
is deemed invalid by reason of law, this Agreement will be construed as not
containing such provision and the remainder of the Agreement shall remain in
full force and effect. Buyer retains all of its rights, even if it makes payment
of Initial Purchase Price after a default. If Buyer waives a default, it may
enforce a later default. Any consent or waiver under, or amendment of, this
Agreement must be in writing. Nothing contained herein, or any action taken or
not taken by Buyer at any time, shall be construed at any time to be indicative
of any obligation or willingness on the part of Buyer to amend this Agreement or
to grant to Seller any waivers or consents.

    


    10.5   Choice of
Law.  This Agreement is governed by and interpreted in
accordance with the laws of the State of New York, excluding principles of
conflict of laws.

    


    10.6   Waiver of Jury
Trial.  Each of the parties hereto hereby irrevocably waives
all right to a trial by jury in any Proceeding or counterclaim arising out of or
relating to this Agreement or any agreement or any instrument or document
delivered thereunder.

    


    10.7   Notices.  All
notices shall be given to Buyer and Seller at the address set forth on the first
page of this Agreement, or the facsimile number or email address as the parties
may exchange from time to time, and shall be deemed to have been delivered and
received (i) if mailed, three (3) calendar days after deposited in the U.S.
mail, first class, postage pre-paid, (ii) one (1) calendar day after deposit
with an overnight mail or messenger service, or (iii) on the same date of
confirmed transmission if sent by hand delivery, facsimile or
email.

    


    
      
         

      

      
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    10.8   Arbitration.  At
the request at any time of either party, any controversies concerning this
Agreement will be settled by arbitration in accordance with the U.S. Arbitration
Act, and under the Commercial Arbitration Rules and Administration of the
American Arbitration Association. The U.S. Arbitration Act will supplement New
York law, as appropriate, even though this Agreement provides that it is
otherwise governed by New York law.

    


    10.9   Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of Seller and Buyer and their respective successors (whether by merger,
consolidation or otherwise) and assigns. The provisions of this Agreement are
for the benefit of Seller and Buyer and such respective successors and assigns,
and nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
Purchased Receivables or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein, except as provided in the last
sentence of this Section
10.9.  Seller may not assign, transfer or dispose of all or any
portion of its rights or obligations hereunder without the prior written consent
of Buyer, and any such assignment without the prior written consent of Buyer
shall be null and void. Seller hereby consents to the grant by Buyer to RCA of
all Buyer’s right, title and interest in and to the Purchased Receivables,
including the collateral assignment of any interest of Buyer in and to this
Agreement.  Seller understands that Buyer or RCA may grant a security
interest in all its right, title and interest in the Purchased Receivables
(including the right to all revenues and proceeds of the Purchased Receivables),
and its rights under this Agreement, to secure future debt obligations. Seller
hereby consents to the grant of such security interest and, in connection
therewith, (a) agrees that any such future lender shall be a third party
beneficiary of this Agreement, (b) agrees that such lender may have the right to
exercise Buyer’s rights and remedies hereunder, (c) agrees that such lender may
have the right to foreclose on its security interest in Buyer’s rights under
this Agreement and to exercise Buyer’s rights and remedies hereunder, and (d)
acknowledges and agrees that it will upon the reasonable request of Buyer agree
with such lender that neither this Agreement nor any of the terms hereof may be
amended, supplemented, modified or waived without the written consent of such
lender.  Seller and Buyer hereby consent to the grant by RCA to KBC of
all RCA’s right, title and interest in and to the Purchased Receivables,
including the collateral assignment of any interest of RCA in and to this
Agreement.

    


    10.10   Term and
Termination.  The term of this Agreement shall be from the date
hereof to December 31, 2009, and from year to year thereafter unless terminated
in writing by Buyer or Seller. Seller and Buyer shall each have the right to
terminate this Agreement at any time. Notwithstanding the foregoing, any
termination of this Agreement shall not affect Buyer’s security interest, if
any, in and ownership of the Purchased Receivables, and this Agreement shall
continue to be effective, and Buyer’s rights and remedies hereunder shall
survive such termination, until all transactions entered into and Obligations
incurred hereunder or in connection herewith have been completed and satisfied
in full.

    


    
      
         

      

      
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    10.11   Survival of
Agreement.  All covenants, agreements, representations and
warranties made by Seller herein and/or in the exhibits, schedules, certificates
or other instruments prepared or delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by Buyer and shall
survive the sale of any Purchased Receivables to Buyer, regardless of any
investigation made by Buyer or any party providing financing to Buyer or on
their behalf, and shall continue in full force and effect so long as this
Agreement has not been terminated.

    


    10.12   Titles and Section
Headings.  The titles and section headings used herein are for
convenience only and shall not be used in interpreting this
Agreement.

    


    10.13   Other
Agreements.  The terms and provisions of this Agreement shall
not adversely affect the rights of Buyer or any other division or affiliate of
Buyer under any other document, instrument or agreement. The terms of such other
documents, instruments and agreements shall remain in full force and effect
notwithstanding the execution of this Agreement. In the event of a conflict
between any provision of this Agreement and any provision of any other document,
instrument or agreement between Seller on the one hand, and Buyer or any other
division or affiliate of Buyer on the other hand, Buyer shall determine, in its
sole discretion, which provision shall apply. Seller acknowledges specifically
that any Liens and/or security interests currently securing payment of any
obligations of Seller owing to Buyer or any other division or affiliate of Buyer
also secure Seller’s obligations under this Agreement, and are valid and
subsisting and are not adversely affected by execution of this Agreement. Seller
further acknowledges that (i) any collateral under other outstanding security
agreements or other documents between Seller and Buyer or any other division or
affiliate of Buyer secures the obligations of Seller under this Agreement and
(ii) a default by Seller under this Agreement constitutes a default under other
outstanding agreements between Seller and Buyer or any other division or
affiliate of Buyer.

    


    10.14   Counterparts.  This
Agreement may be executed by the parties hereto individually or in any
combination, in one or more counterparts, each of which shall be an original and
all of which together constitute one and the same agreement.

    


    10.15   Confidentiality.  Seller
and Buyer each agrees to maintain the confidentiality of this Agreement in
communications with third parties and otherwise; provided, that this
Agreement may be disclosed (i) to third parties to the extent such
disclosure is made pursuant to a written agreement of confidentiality in form
and substance reasonably satisfactory to Buyer, (ii) to the legal counsel
and auditors of Buyer and Seller if they agree to hold it confidential and
(iii) to the extent required by applicable law or regulation or by any
court, regulatory body or agency having jurisdiction over such party; and provided, further, that such
party shall have no obligation of confidentiality in respect of any information
which may be generally available to the public or becomes available to the
public through no fault of such party.

    


    
      
         

      

      
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    10.16   Acknowledgments.
Seller hereby acknowledges that (i) it has been advised by counsel in the
negotiation, execution and delivery of this Agreement, (ii) no joint venture is
created hereby or otherwise exists by virtue of the transactions contemplated
hereby between Buyer and Seller and (iii) that nothing in this Agreement or
otherwise will be deemed to create an advisory, fiduciary or agency relationship
or fiduciary or other implied duty between Buyer and Seller.

    


    


    {Signatures
appear on the following page.}

     

     

    
      
         

      

      
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    IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be signed by their duly authorized
representatives all as of the day and year first above written, with the
specific intention that this Agreement constitute a document under
seal.

     

    


     

    
      	 	      
              SELLER:

              


              LATTICE
      INCORPORATED

              


              By:
      /s/ Paul
      Burgess                                           

              Name:  Paul
      Burgess

              Title:    President & Chief
      Executive Officer

              


              


              BUYER:

              


              REPUBLIC
      CAPITAL ACCESS, LLC

              


              By:
      /s/ Timothy J.
      Gilmore                                                                           

              Name: Timothy J.
      Gilmore                                                      

              Title:   CFO           

            


    

     

                            

    
      
         

      

      
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    SCHEDULE
7.1.7.8

    


    Audits, Investigations and
Enforcement Actions

     

     

    
      
         

      

      
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    EXHIBIT
A

    


    Initial
Purchase Price Rate Adjustment Factors

     

     

     

    
      
         

      

      
        41