EXHIBIT
10.12





FACTORING
AGREEMENT





STAR
FUNDING, INC.


237
W. 37th Street,
5th
Floor


NEW
YORK, NY 10018





Date:
March 20, 2009








Perf-Go
Green, Inc.


12 East
52nd
Street,4th
floor


New York,
New York 10022








THE
FOLLOWING IS THE AGREEMENT UNDER WHICH WE ARE TO ACT AS YOUR SOLE FACTOR WITH
RESPECT TO ALL ACCOUNTS RECEIVABLE FROM YOUR PRESENT AND FUTURE CUSTOMERS
ARISING FROM THE SALE AND DELIVERY OF MERCHANDISE
OR THE RENDITION OF SERVICES BY YOUR COMPANY.




1.           You
hereby sell and assign to us, making us absolute owner thereof, (a) all
accounts, contract rights, and all other obligations to you, now existing or
hereafter arising, for the payment of money, arising out of the sale of goods
you purchase from us under the Supply Agreement dated as of the date hereof
between you and us (as it may be amended, the “Supply
Agreement”) and (b) such other
accounts, contract rights and other obligations to you for the payment of money
as you may offer to us and we may purchase from time to time (each a “Receivable”
and collectively the “Receivables”),
together with all proceeds thereof; all security therefore, and guarantees
thereof, and all of your rights to any goods and property represented thereby or
relating thereto. We shall have all the rights of an unpaid seller of any goods,
the sale of which gives rise to each Receivable, including, without limitation,
the right of stoppage in transit, reclamation and replevin. Upon each purchase
of a Receivable from you, you shall execute and deliver to us such further and
confirmatory assignments of the Receivable as we require, all of which shall be
in form and manner satisfactory to us (including, without limitation, in the
case of Receivables due from the U.S. Government or any department or agency
thereof, such assignments and notices of assignment as may be necessary to
comply with 41 U.S.C. §15, 31 U.S.C. §3727, and the regulations adopted
thereunder (collectively, the “Assignment
ofClaimsAct”)),together with copies of
invoices and all shipping or delivery receipts and such other proof of sale and
delivery or performance as we from time to time may require. You will make
appropriate notations upon your books and ledgers indicating the sale and
assignment of the Receivables to us. All invoices or other statements to
customers evidencing Receivables shall be mailed at your expense whether mailed
by you or at our option by us and shall clearly state in a manner satisfactory
to us that each such Receivable has been assigned to us or our assignees and is
payable to us or our assignees. Without limiting the foregoing, you agree and
acknowledge that (i) we have the right to sell, assign, transfer and/or
re-factor the Receivables to any entity or entities; (ii) we may in connection
with such sale, assignment transfer and/or re­factoring, from time to time,
request that any such entity or entities make advances to us and advance
payments of the purchase price of and/or secured by the Receivables, (iii) we
may purchase insurance against credit losses arising on Receivables (“Credit
Insurance”); (iv) we may assign any or all of our rights under this
Agreement or with respect to any of the Receivables to any issuer of Credit
Insurance on Receivables, and any entity or entities to which we sell, assign,
transfer and/or re-factor Receivables; and (v) we may sell participations in any
of the Receivables, in this Agreement, or in any of your obligations to us
hereunder, to any person or entity.




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2.           (a)
We shall not assume the credit risk on any Receivable purchased by us hereunder
unless (i) it arises out of a specific sale to a customer of yours that has been
submitted to us for credit approval and has been approved by us in writing (an
“Approved
Sale”) or (ii) it arises out of a sale to a customer of yours with
respect to whom we have approved a credit limit (an “Approved
Credit Limit”) in writing, the sale meets all of the terms and conditions
of our approval, the goods are shipped or the services are provided to the
customer during the period specified in our approval, and the resulting
Receivable, when added to all other outstanding Receivables from such customer,
does not exceed the Approved Credit Limit for such customer. Any approval
provided by us hereunder (whether of a particular sale or a credit limit to a
particular customer) must be in writing and shall be limited to the specific
terms and conditions listed therein. In no event shall we have any credit risk
on any Receivable, whether or not approved by us, if the net amount of such
Receivable is less than $250.00.





(b)           On
Approved Sales and sales under Approved Credit Limits we shall assume the credit
risk, being responsible only for the financial inability of your customers with
respect to Receivables we have purchased (such customers herein referred to as
“Customers”)
to pay at maturity, such assumption of credit risk going into effect upon
delivery or performance, and acceptance of the goods or services by such
Customer, without dispute. We shall not be responsible for any nonpayment of a
Receivable because of the assertion of any claim or dispute by a Customer or the
exercise of any counterclaim or offset (whether or not such claim, dispute,
counterclaim or offset relates to the specific Receivable) or where nonpayment
is a consequence of enemy attack, civil commotion, the acts or restraint of
public authorities, acts of God or force majeure, or if any warranty made by you
to us in respect of such Receivable has been breached, or if you fail to provide
us upon our written request, with copies of invoices and shipping or delivery
receipts or such other woof of sale and delivery or performance as we may from
time to time require. We shall have no liability of any kind for refusing to
give or for withdrawing credit approval pursuant to the terms of this Agreement,
or for exercising or refusing to exercise any rights or remedies we have under
this Agreement or otherwise.





(c)           We
reserve the right to withdraw credit approval of an Approved Sale at any time
before delivery or performance and, in any event, such credit approval shall be
deemed to be withdrawn if full delivery or performance is not made within 30
days after the delivery or shipment date specified in the terms of sale
submitted to us for approval, or, if no such delivery or shipment date is
specified, within 30 days of the date of such credit approval, or as may be
otherwise stated in such credit approval.





(d)           We
reserve the right to reduce or cancel an Approved Credit Limit for a Customer by
giving you written notice to that effect. If we reduce or cancel the Approved
Credit Limit for a Customer (i) such reduction or cancellation shall take effect
immediately and (ii) any Receivables
arising out of sales you make to such customer after receipt of such notice
shall be CR Receivables (as defined below) to the extent that they exceed the
Approved Credit Limit as so reduced or cancelled.




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(e)           Any
purchase of Receivables from you which is not approved in writing by us as to
credit shall be known as a C.R. (Client’s Risk) Receivable (each a “CR
Receivable”andcollectively the “CR
Receivables”). All CR Receivables are assigned to and purchased by us
with full recourse to you and at your credit risk, but are otherwise subject to
the covenants, terms and conditions provided herein in respect of approved
Receivables on which we have assumed the credit risk. We shall have the right to
charge back to your account the amount of CR Receivables at any time either
before or after their maturity and you agree to pay us upon demand the amount
thereof, together with all expenses (if any) including, without limitation,
collection charges and other collection and attorneys’ fees incurred by us up to
the date of such payment in attempting to collect or enforce any such payment
and in attempting to collect or enforce any such Receivable. In addition, if we,
at your request, but subject to our discretion, file a proof of claim in any
insolvency proceeding with respect to a CR Receivable and/or forward such CR
Receivable to an attorney or agency for collection, we shall charge your
account, at the time such CR Receivable or claim is so filed or forwarded, with
an amount equal to 15% of the CR Receivable. In addition, (whether or not such
CR Receivable or claim is filed or submitted at your request) any other charges
incurred by us thereafter shall be charged to your account.





(f) Any
payments received by us from or for the account of a Customer that is the
account debtor with respect to both CR Receivables and Receivables as to which
we have assumed the credit risk (“Factor
Risk Receivables”) shall be applied, first, to Factor Risk Receivables
until all such Receivables have been paid in full and then to CR Receivables,
irrespective of any instructions to the contrary from the person or entity that
made such payment.





3.           Any
goods rejected or returned by any Customer shall be our property held by you in
trust for us separate and apart from any other goods, and upon demand shall
forthwith be delivered to us or disposed of by you at our direction and without
charge to us. You shall report to us in writing all disputes and claims made by
any Customers, and the return of or offer to return any goods, and you will
promptly settle all such claims and disputes at your expense. As absolute owner
of each Receivable, we may in our sole discretion enforce, effect any
compromise, settle and adjust any Receivable, in our name or yours, without
affecting or limiting your obligation to us under this Agreement, and whether or
not any such Receivable shall have been charged back. We reserve the right at
any time to charge back to your account the full amount of the Receivable
involved in any claim, dispute or return asserted by your Customer, and you
agree to pay us upon demand the full amount thereof. The charge back to your
account of the amount of any Receivable shall not be deemed a reassignment
thereof to you and title thereto, to the proceeds thereof, to all security and
guarantees therefor and to your interest in the goods represented thereby, shall
remain in us. You shall indemnify us for, and hold us harmless against, any
loss, liability, claim or expense of any kind arising from any claims of, or
disputes with any Customer as to terms, price, quality, or otherwise, with
respect to any Receivable, including, without limitation, any claim for a return
of any payments thereunder and any and all expenses and attorneys’ (whether
in-house or outside) fees incurred by us in collecting or attempting to collect
any Receivables charged back to you.


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4.           If
any checks, drafts, notes, acceptances, cash collections or payments in any form
shall be received by you on any Receivable, you will immediately transmit and
deliver them to us or to our assignees in the identical form received. You agree
that we and any such person or entity as we may from time to time designate,
shall have the right to sign and/or endorse your name on all remittances and all
papers, bills of lading, receipts, instruments and documents relating to
Receivables and the transactions between us. We shall have the right to deposit
any checks or other remittances received on any Receivable regardless of
notations or conditions placed thereon by any Customer or deductions reflected
thereby and to charge the amount of any such deductions to your
account.





5.           As
to each Receivable assigned to us, you hereby warrant that (i) it is a bona fide
existing obligation created by the sale and actual delivery of goods or the
rendition of services to a Customer in the ordinary course of business and in
compliance with such Customer’s purchase order and all applicable procurement
regulations, which you then own free of liens and encumbrances, except for
Permitted Liens (as defined in that certain Security Agreement of even date
herewith between the parties hereto) and which is then unconditionally owing to
you without defense, offset or counterclaim; and (ii) the Customer has received
and will accept the goods or services, and the invoices therefor, without
dispute or claim of any kind. Nothing contained in the previous sentence shall
reduce, affect or limit in any way your responsibility to assure us (or your
liability to us in connection therewith) that each Receivable assigned to us by
you will be paid in the ordinary course of business regardless of your knowledge
of any irregularity, defense, offset or counterclaim in connection with any such
Receivable or our ability to rely on such assurances. You hereby represent and
warrant that you are solvent, that you have full right and authority to sell and
assign to us and to grant to us a security interest in the Receivables, that
other than as contemplated by that certain Subordination Agreement between you,
us, PERF Go-Green Holdings, Inc., and certain third party lenders, dated as of
the date hereof (as may be amended or modified from time to time, the “Subordination
Agreement”), you have not granted a security interest therein or in any
of your inventory to any other party and that you will not hereafter grant any
security interest therein or in any of your inventory to anyone other than to us
at any time during the term of this Agreement and until the security interests
granted hereunder have been terminated, and that your inventory and Receivables
are not subject to any lien, interest, claim or other encumbrance in favor of
any third party (other than Permitted Liens), whether arising by contract, by
operation of law or in equity. You further represent and warrant that your name,
place of business, chief executive office and location of your books and records
relating to the Receivables is as you are addressed above and you agree to
notify us promptly of any change in such or in your corporate or business
structure or your state of organization. You further represent and warrant that
(i) you have identified to us all tradenames, tradestyles or other assumed or
fictitious business names (sometimes referred to as “DBA” or “doing business as”
names) that you use; (ii) you will advise us in writing if you commence using
any other such names in the future; and (iii) upon our request therefor, you
will provide to us evidence of your registration of all such names in all
jurisdictions in which such registration is required by law. You hereby covenant
that you will not change your name or jurisdiction of organization without
giving us at least 30 days’ prior written notice thereof.






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6.            (a)               Subject
to the other provisions of this Section, you shall pay us for our services
hereunder a factoring commission (the “Factoring
Commission”) equal to (i) 1.0% of the gross
invoice amount of each Receivable due from a retailer and (ii) 1.5% of the gross
invoice amount of each Receivable due from a commercial or municipal customer,
which commission, in each case, shall be due and payable by you as at the date a
Receivable arises, and shall then be chargeable to your account. Our factoring
commission is based, in each case, upon maximum selling terms of net 60 days,
and no more extended terms or additional dating shall be granted by you to any
Customer without our prior written approval. If such approval is given by us,
then for each additional 60 days or part thereof of such extended terms or
additional dating our factoring commission with respect to any Receivable
covered thereby shall be increased by an amount equal to 0.25% of the invoice
amount of such Receivable.





(b)           The
factoring commission on Receivables due from a Customer (or any affiliates or
subsidiaries thereof) listed on any schedule issued by us from time to time
which refers to this Agreement and is designated a Special Accounts Schedule,
shall be equal to the rate set forth above, plus an amount equal
to the surcharge set forth on the such Special Accounts Schedule for such
Customer. The surcharge with respect to any Receivable shall be due and payable
on the date on which the factoring commission for such Receivable is due and
payable, and shall be chargeable to your account.





(c)           You
have represented to us that your factored sales volume will be at least
$10,000,000.00 per twelve-month period during the duration of this Agreement.
You hereby acknowledge that we have relied on that representation in deciding to
offer to you the discretionary factoring facility contemplated hereby, and that
lower sales volumes would have a material adverse effect on our projected profit
margins hereunder. Accordingly, in order to induce us to enter into this
Agreement and provide the discretionary factoring facility contemplated hereby,
you hereby agree that, notwithstanding anything to the contrary contained
herein, in the event that the aggregate amount of all factoring commissions
actually paid by you during any Calculation Period (the “Actual
Commissions”) are less than the Minimum Commission payable during such
Calculation Period, you shall pay to us immediately upon demand the difference
between the Minimum Commission and the Actual Commissions for such Calculation
Period (said difference herein called the “Shortfall”).
For purposes of this Agreement, (i) the term “Calculation
Period” shall mean each twelve-month period commencing on the date hereof
or on any anniversary of such date and (ii) the term “Minimum
Commission” shall mean, with respect to any Calculation Period, the sum
of $100,000. You further agree that we may, at our option, charge the amount of
the Shortfall at any time owing to us to your account with us. At your request
and as an accommodation to you, we hereby agree that, notwithstanding the
foregoing, so long as you are in compliance with all of the terms and conditions
of this Agreement and all related documents and no default or event of default
has occurred hereunder or thereunder:





(x)           we
shall not charge the amount of the Shortfall to your account with us prior to
June 1,2009;





(y)           we
shall limit the amount of the Shortfall charged to your account with us during
any calendar month commencing on or after June 1, 2009 and before March 1, 2010,
to an amount not exceeding the Minimum Commission minus the Actual Commissions
paid prior to June 1,2009, divided by nine (9); and


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(z)           we
shall limit the amount of the Shortfall charged to your account with us during
any calendar month commencing on or after March 1, 2010 to an amount not
exceeding the Minimum Commissions divided by twelve (12).





7.           (a)
The purchase price for each Receivable shall be the invoice amount of the
Receivable, less returns (whenever made), all selling discounts (at our option,
calculated on shortest terms), and credits or deductions of any kind allowed or
granted to or taken by the Customer at any time, and less our commission
provided for herein. No discount, credit or allowance with respect to any
Receivable shall be granted by you to any Customer, and no return of goods shall
be accepted by you, without our prior written consent. A discount, credit or
allowance may be claimed only by the Customer. All amounts collected against the
Receivables shall be credited to your account adding five (5)banking days for
collection and clearance of remittances.





(b)           If
you require funds from time to time, we may advance to you (each such advance
herein called an “Advance”
and, collectively, the “Advances”),
at our discretion, up to the Applicable Percentage (as defined below) of the net
amount of Receivables (other than CR Receivables), net of any deductions,
disputes, stocking fees or other dilutive factors, purchased by us and not as
yet collected, that are less than 30 days from invoice date and are deemed
eligible by us in our sole discretion and subject to reduction for any disputes,
stocking fees or other dilutive factors as determined by us in our sole
discretion (the “Eligible
Receivables”); provided, however, that the sum
of (x) the amount of the Supplier Exposure at any one time outstanding, plus (y) the
aggregate principal amount of all Advances at any one time outstanding shall in
no event exceed $10,000,000. You shall pay us interest upon the daily average
outstanding principal amount of the Advances at a rate (the “Interest
Rate”) per annum equal to the sum of (i) the prime rate of JPMorgan Chase
Bank, N.A. (the “Bank”)
as announced by the Bank from time to time (the “Prime
Rate”), plus (ii) 2.0%. The term “Applicable
Percentage” as used in this paragraph means eighty percent (80%). In the
event that the aggregate outstanding principal amount of Advances made by us to
you exceeds the Applicable Percentage of the net amount of Eligible Receivables
purchased by us hereunder (such excess herein called an “Overadvance”)
at any time and for any period, all of the Advances (not just the Overadvance)
shall bear interest, from the day the Overadvance is created until the day the
Overadvance has been repaid in full or otherwise eliminated, at a rate per annum
equal to the Interest Rate plus 2%. Nothing herein contained shall be deemed to
permit Overadvances, and you hereby agree to repay any Overadvance immediately
upon our demand. The Prime Rate may not be the lowest or best rate charged by
the Bank. Notwithstanding the foregoing, in no event shall the rate of interest
agreed to by or charged to you hereunder exceed the maximum rate of interest
permitted to be so agreed or charged under the law of the jurisdiction whose
laws are applicable to such rate of interest.





(c)           If,
on the day on which we purchase any Receivable from you hereunder, you owe any
amount to the Supplier under the Supply Agreement, you shall be deemed to have
requested an Advance from us hereunder in an amount equal to the lesser of the
Applicable Percentage of the net amount of such Receivable or the amount you
then owe to the Supplier.





(d)           We
shall remit the proceeds of any Advance made by us hereunder (whether pursuant
to your request under Section 7(b) or your deemed request under Section 7(c)) directly
to the Supplier in accordance with its instructions to the extent of any amount
then owed by you to the Supplier (it being understood and agreed that we may
rely on the Supplier’s representation to us of the amount then owed to it); the
excess, if any, of the principal amount of such Advance over the amount then
owed to the Supplier shall be remitted to you in accordance with the terms of
this Agreement.




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(e)           About
twenty (20) days after the end of each month, we will render to you a statement
with respect to the Receivables purchased by us during the previous month,
together with advances and charges made to your account under this Agreement. In
addition to any other amounts chargeable to your account, your account shall be
charged with our expenses consisting of postage on invoices, bank wire and
similar charges and in addition all expenses and costs from time to time
hereafter incurred by us during the course of periodic examinations of your
books and records, and operations, plus a per diem charge at our then standard
rate per person, per day, for our examiners in the field and office. Our current
standard rate is $900 per person, per day. We may, at our discretion, charge
your account with a fee for all trial balances and sales summaries we prepare at
your request. All statements, reports or accountings rendered or issued by us to
you, including, without limitation, such trial balances and sales summaries,
shall be deemed accepted and be finally conclusive and binding upon you unless
you notify us to the contrary by registered or certified mail within thirty (30)
days after the date such statement, report or accounting is sent to
you.





8.           (a)           As
collateral security for any and all of your (and your subsidiaries’ and
affiliates’) indebtedness and obligations to us and to each of our subsidiaries
and affiliates, whether matured or unmatured, absolute or contingent, now
existing or that may hereafter arise (including, without limitation, your
obligations to us hereunder, under the Supply Agreement, under indemnity or
reimbursement agreements or by subrogation), and howsoever acquired by us,
whether arising directly between us or acquired by us by assignment, whether
relating to this Agreement or independent hereof, including, without limitation,
all obligations incurred by you to any other concern factored or financed by us
(collectively, the “Obligations”),
you grant to us a security interest in all of your personal property and
fixtures of whatever type or nature, whether now existing or hereafter arising
or created and wherever located, including without limitation all of your (i)
accounts; (ii) cash and currency; (iii) chattel paper; (iv) registered United
States copyrights, now existing or hereafter created or acquired, all
registrations and recordings thereof, and all applications in connection
therewith (including, without limitation, registrations, recordings and
applications in the United States Copyright Office), all renewals thereof and
all licenses with respect thereto, (v) deposit accounts; (vi) documents; (vii)
equipment; (viii) financial assets; (ix) fixtures; (x) general intangibles; (xi)
goods; (xii) instruments; (xiii) inventory; (xiv) investment property; (xv)
letter-of-credit rights; (xvi) letters patent of the United States or any other
country and all reissues and extensions thereof, applications for letters patent
of the United States or any other country and all divisions, continuations and
continuations-in-part thereof, and agreements, whether written or oral,
providing for the grant by or to you of any right to manufacture, use or sell
any invention covered by a letter patent; (xvii) securities accounts and
securities entitlements; (xviii) software; (xix) supporting obligations; (xx)
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos and other source
or business identifiers, and the goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United
States.


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Patent
and Trademark Office or in any similar office or agency of the United States,
any state thereof or any other country or any political subdivision thereof, or
otherwise, all renewals thereof, and all agreements, written or oral, providing
for the grant by or to you of any right to use any such name, style, mark, logo
or other source or business identifier; and (xxi) all accessions and all
proceeds of any and all of the foregoing (collectively, the “Collateral”).
All terms used in this section that are not defined herein shall have the
respective meanings given to them in the Uniform Commercial Code in effect from
time to time in the State of New York (the


“NYUCC”).





(b)           All
Obligations shall be due and payable on demand, and you hereby irrevocably
authorize and direct us to charge at any time to your account any Obligations,
and to pay any Obligations owing to any of our subsidiaries or affiliates by so
charging your account. You agree to execute financing statements and any and all
other instruments and documents that may now or hereafter be necessary under the
Uniform Commercial Code or other applicable law to perfect our liens and
security interests in your assets and preserve their priority (collectively, the
“Financing
Statements”). You authorize us to file the Financing Statements without
your signature, to reflect the security interests granted to us to secure the
Obligations. You shall be liable for, and we may charge your account with, all
costs and expenses of any public record filings (including, without limitation,
the Financing Statements and any filing or recording taxes), the making of lien
searches, and any attorneys’ (whether in-house or outside) fees and expenses
which may be incurred by us in the negotiation and documentation of this
Agreement and related documents and any amendments thereof, administering this
Agreement and perfecting, protecting, preserving and enforcing all security
interests and rights provided to us hereunder, under any other agreement
relating to the Obligations or by law.





(c)           We
shall have, in addition to the rights and remedies provided herein or in any
other documents relating to the Obligations, or by law (including, but not
limited to, levy of attachment, garnishment and the rights and remedies set
forth in the Uniform Commercial Code of the jurisdiction applicable to the
affected Collateral), the rights and remedies of a secured party under the NYUCC
(regardless of whether the NYUCC is the law of the jurisdiction where the rights
and remedies are asserted and regardless of whether the NYUCC applies to the
affected Collateral), and further, we may, with or without judicial process or
the aid and assistance of others, after the occurrence and during the
continuance of an Event of Default (as defined in Section 11): (i) enter on any
premises on which any of the Collateral may be located and, without resistance
or interference by you or any of your subsidiaries or affiliates, take
possession of the Collateral, (ii) dispose of any Collateral on any such
premises, (iii) require you and all of your subsidiaries and affiliates to
assemble and make available to us at your expense any Collateral at any place
and time designated by us which is reasonably convenient to both of us, (iv)
remove any Collateral from any such premises for the purpose of effecting sale
or other disposition thereof, and/or (v) without demand and without
advertisement, notice, hearing or process of law, all of which you hereby waive
to the fullest extent permitted by law, at any place and time or times, sell and
deliver any or all Collateral held by or for us at public or private sale, at
any exchange or broker’s board or elsewhere, by one or more contracts, in one or
more parcels, for cash, upon credit or otherwise, at such prices and upon such
terms as we deem advisable, in our sole discretion (subject to any and all
mandatory legal requirements). You acknowledge that any such private sale may be
at prices and on terms less favorable to the seller than the prices and other
terms which might have been obtained at a public sale and, notwithstanding the foregoing,
agree that such private sale shall be deemed to have been made in a commercially
reasonable manner. Neither our compliance with applicable law nor our disclaimer
of warranties relating to the Collateral shall be considered to adversely affect
the commercial reasonableness of any sale. To the extent the rights of notice
cannot be legally waived hereunder, you agree that any requirement of reasonable
notice shall be met if such notice, specifying the place of any public sale or
the time after which any private sale is to be made, is personally served on or
mailed, postage prepaid, to you in accordance with the notice provisions hereof
at least 10 days before the time of sale or other event giving rise to the
requirement of such notice. We may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. We shall not be obligated to make any sale or other disposition of
the Collateral regardless of notice having been given. To the extent permitted
by applicable law, any holder of Obligations may be a purchaser at any such
sale. To the extent permitted by applicable law, you hereby waive all of your
rights of redemption with respect to any such sale. Subject to the provisions of
applicable law, we may postpone or cause the postponement of the sale of all or
any portion of the Collateral by announcement at the time and place of such
sale, and such sale may, without further notice, to the extent permitted by law,
be made at the time and place to which the sale was postponed, or we may further
postpone such sale by announcement made at such time and place.




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(d)           After
the occurrence and during the continuance of an Event of Default (as defined in
Section 11), in addition to the rights and remedies hereunder, to the fullest
extent permitted under applicable law, we shall have the right to enter and
remain upon your various premises without cost or charge to us, and use the
same, together with your materials, supplies, books and records for the purpose
of collecting and liquidating the Collateral, or for preparing for sale and
conducting the sale of the Collateral, whether by foreclosure, auction or
otherwise. In addition, we may remove Collateral, or any part thereof, from such
premises and/or any records with respect thereto, in order to effectively
collect or liquidate such Collateral.





(e)           Failure
by us to exercise any right, remedy or option under this Agreement, any other
document relating to the Obligations, or as provided by law, or any delay by us
in exercising the same, shall not operate as a waiver of any such right, remedy
or option. No waiver hereunder shall be effective unless it is in writing,
signed by the party against whom such waiver is sought to be enforced and then
only to the extent specifically stated, which in our case shall only be granted
as provided herein. To the extent permitted by law, neither we nor any party
acting as attorney for us shall be liable hereunder for any acts or omissions or
for any error of judgment or mistake of fact or law other than their gross
negligence or willful misconduct hereunder. Our rights and remedies under this
Agreement shall be cumulative and not exclusive of any other right or remedy
which we may have.





(f)           In
addition to the rights and remedies hereunder, we may, in compliance with the
NYUCC or otherwise complying with the requirements of applicable law of the
relevant jurisdiction, accept or retain the Collateral in satisfaction of the
Obligations. Unless and until we shall have provided specific notices to such
effect, however, we shall not be deemed to have retained any Collateral in
satisfaction of any Obligations for any reason.


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(g)           In
the event that the proceeds of any sale, collection or realization are
insufficient to pay all amounts to which we are legally entitled, you shall be
liable for the deficiency, together with interest thereon at the highest rate
permitted by law, together with the costs of collection and the fees, charges
and disbursements of counsel. Any surplus remaining after the full payment and
satisfaction of the Obligations shall be returned to you or to whomsoever a
court of competent jurisdiction shall determine to be entitled
thereto.





9.           (a)
You shall maintain your books, records and accounts in accordance with sound
accounting practice. You agree to furnish us with balance sheets, statements of
profit and loss, interim financial statements and such other information in such
detail and scope as we may require regarding your business affairs and financial
condition as we may from time to time request, prepared in accordance with
generally accepted accounting principles consistently applied and prepared
internally or compiled, reviewed or certified by a firm of certified public
accountants acceptable to us, as we may require in our sole discretion. All such
statements and information shall fairly present your financial condition as of
the dates, and the results of your operations for the periods, for which the
same are furnished.





(b)
            Without
      limiting the generality of the foregoing, you shall provide to
      us:





(i)
            as
      soon as available but in any event no later than one (I) business day
      after the filing of any report or other document with the Securities and
      Exchange Commission or any other public filing, a copy of such report,
      document or filing;





(ii)
            as
      soon as available but in any event no later than thirty (30) days prior to
      each renewal date, annual management projections, prepared and presented
      in a form and in detail satisfactory to us, and certified by your Chief
      Executive Officer or Chief Financial
Officer.





(c)           You
shall permit our authorized representatives to visit and inspect from time to
time upon reasonable notice during business hours (or at any time after the
occurrence and during the continuance of a default hereunder) any of your
offices, inventory locations and other facilities, to examine your books and
records and make copies or extracts therefrom, to examine your inventory, to
conduct field examinations and collateral audits with respect to your assets, to
verify the eligibility of the Receivables for lending hereunder, and to discuss
your affairs, inventory and Receivables with your officers and
accountants.





(d)           You
hereby authorize us and our agents to do all acts and things necessary to carry
out this Agreement, including, without limitation, (i) to contact your customers
to obtain verification of the Receivables, and (ii) to advise your customers of
your assignment and sale of the Receivables to us. You shall execute and deliver
to us, concurrently with your execution and delivery of this Agreement, an
undated Notice of Assignment substantially in the form of Exhibit A
hereto.





10.           You
shall furnish to us, concurrently with the execution of this Agreement, all of
the documents described in the List of Closing Documents we have circulated in
connection with the execution of this Agreement and the Supply
Agreement.


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-


11.           This
Agreement shall commence on the date hereof and shall continue for one year from
the date hereof; provided, however, that the
Term of this Agreement shall be automatically renewed for additional twelve (12)
month periods unless either party gives the other party at least sixty (60)
days’ advance notice in writing of its intent to terminate this Agreement as of
the end of such initial or renewal period. The foregoing notwithstanding, any
obligations you may have hereunder shall terminate on the earlier of (a)
delivery of written notice to that effect by us to you or (b) without notice,
upon the occurrence of any of the following (each, an “Event of
Default”): if you or any financial or validity guarantor, endorser or
other person liable on the Obligations (each a “Guarantor”)
become insolvent or unable to meet your or such Guarantor’s debts as they
mature, or fail, suspend or go out of business (or, in the case of a Guarantor
that is an individual, die) or apply for, consent to, or suffer the appointment
of a receiver, trustee or custodian (or similar person) for you or any Guarantor
or any of your or any Guarantor’s property, make an assignment for the benefit
of creditors, or commence or become the subject of a case or proceeding under
any federal bankruptcy law, or if you are in default under this Agreement or
under any other agreement with us, if any Obligations are not paid or performed
in full when due, or if Anthony Tracy, members of his immediate family or trusts
set up for their benefit shall at any time own beneficially, directly or
indirectly, less than 12% in the aggregate of all of the issued and outstanding
shares of capital stock of PERF Go-Green Holdings, Inc. having ordinary voting
rights for the election of directors, or PERF Go-Green Holdings, Inc. shall
cease at any time to hold 100% of all of your issued and outstanding shares of
capital stock having ordinary voting rights for the election of directors. Our
rights and your Obligations arising out of transactions having their inception
prior to the termination date shall not be affected by any termination or notice
thereof Termination of this Agreement shall not become effective with respect to
the liens and security interests granted to us hereunder until you have fully
paid and discharged all of your Obligations to us, and until all of your
Obligations have been paid or discharged, you shall continue to furnish
confirmatory assignments and schedules of Receivables and all proceeds in
respect thereof After the giving of any notice of termination hereunder and
until the full liquidation of your account and the payment in full of all
Obligations, you shall not be entitled to receive any payments from us, to the
extent we are obligated to make payments to you under this Agreement. From and
after the effective date of termination of this Agreement, all amounts charged
or chargeable to your account hereunder, and all your Obligations, shall become
immediately due and payable without further notice or demand. After the giving
of any notice of termination hereunder and until the full liquidation of your
account and the payment in full of all Obligations, you shall not be entitled to
receive any payments from us.





12.           Notwithstanding
any provision to the contrary contained herein, if a court of competent
jurisdiction should deem any commissions, costs, fees or charges provided for in
this Agreement to be interest and such interest is deemed by such court to be in
excess of the maximum contract rate permitted by the applicable usury law,
neither you nor any guarantor shall be liable to pay the amount of such interest
to the extent that it is in excess of the maximum interest rate permitted by
law, any such excess which may have been received by us shall be either applied
against your then unpaid obligations to us (other than any such obligations that
are deemed to be excessive interest as aforesaid) or at our option refunded to
you, and any portion of any commissions, costs, fees or charges deemed to be
interest by such court shall be automatically reduced to the maximum interest
rate allowed by law.


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13.           This Agreement is deemed made in the State of New York
and shall be governed, interpreted and construed in accordance with the laws of
the State of New York. No modification, waiver of discharge of this
Agreement shall be binding upon us unless in writing and signed by us. If at any
time we should fail to exercise any right or remedy hereunder, it shall not
constitute a waiver on our part of exercising the same or any other right or
remedy at any subsequent time. If any taxes are imposed upon, or if we shall be
required to withhold or pay any tax or penalty because of or in connection with
any transactions between us under this Agreement, you agree to indemnify us and
hold us harmless in respect thereof. This Agreement and the other agreements
executed in connection herewith embody our entire agreement as to the subject
matter and supersede all prior agreements (whether oral or written) as to the
subject matter. Trial by jury is hereby waived
by each of us in any action, proceeding or counterclaim brought by either of us
against the other on any mailers whatsoever arising out of or in any way
connected with this Agreement or nay other agreement executed in connection
herewith or the relationship created hereby, and you hereby consent to the
jurisdiction of the Supreme Court of the State of New York (or the Civil Court
of the City of New York if such matters be within its jurisdiction), and of any
Federal Court in such State, for a determination of any dispute as to any such
matters and waive any objection to venue in any action brought in any such court
and any claim that any such court is an inconvenient forum. In connection
therewith, you hereby waive personal service of any summons, complaint or other
process and agree that service thereof may be made by registered or certified
mail directed to you at your address set forth above or such other address as
shall have previously been communicated to us by registered or certified mail.
Within thirty days after such mailing, you shall appear or answer to such
summons, complaint or other process. Should you fail to appear or answer within
said thirty-day period, you shall be deemed in default and judgment may be
entered by us against you for the amount demanded in any summons, complaint or
other process so served. In the event we shall retain counsel for the purpose of
enforcing the performance, payment or collection of any of the Obligations, then
and in that event you agree to pay the reasonable fees of our counsel, plus any
and all expenses and disbursements incurred in connection therewith and/or
incidental thereto. Our books and records shall be admissible as prima facie
evidence of the status of the account between us. This Agreement shall be
binding upon and inure to the benefit of each of us and our respective heirs,
executors, administrators, successors and assigns.





[Remainder
of page intentionally left blank; signature page follows]





- 12
-





[Signature
Page to Factoring Agreement]








Very
truly yours,






STAR
FUNDING, INC.






By: 
/s/ Martin Weingarten


Martin
Weingarten


Chief
Executive Officer








The
foregoing is acknowledged,


accepted
and agreed to:





PERF-GO
GREEN, INC.








By:


Name:


Title:







[Signature
Page to Factoring Agreement]











Very
truly yours,






STAR
FUNDING, INC.






By:


Martin
Weingarten


Chief
Executive Officer








The
foregoing is acknowledged,


accepted
and agreed to:





PERF-GO
GREEN, INC.








By: 
/s/ Michael Caridi


Name: 
Michael Caridi


Title: 
COO











Exhibit
A




Notice of
Assignment





Perf-Go
Green, Inc.


12
East 52nd Street, 4th floor


New York, New York 10022





______________,
20__





To Whom
It May Concern




Re:
            Assignment of Accounts
      Receivable





Ladies
and Gentlemen:





In order
to manage the growth of our business and plan for our continued success, we have
entered into a factoring arrangement with Star Funding, Inc. (“Star Funding”).





Our
accounts receivable have been assigned to Star Funding and are payable in U.S.
funds at par only to Star Funding. This letter serves as our irrevocable
direction to you, and your irrevocable authority, to pay the full amount of all
invoices for goods sold or services rendered by us or for any other reason,
directly and solely to:





Star
Funding, Inc.,


c/o
Rosenthal & Rosenthal, Inc.


P.O. Box
88926


Chicago,
Illinois 60695-1926





These
payment instructions cannot be changed, modified or revoked by anyone other than
Star Funding and any such change, modification or revocation by Star Funding
shall be effective only if it is made in writing. Any payment of an invoice to
any person or entity other than Star Funding (including without limitation any
payment to us) shall not constitute valid payment, unless Star Funding agrees
otherwise in writing. Star Funding will rely on this letter, and on your
compliance with the payment instructions it contains, in delivering fluids to us
for use in performing work for you and supplying goods to you.





These
instructions are effective as of the date of this letter and will remain in
effect until Star Funding notifies you otherwise in writing.





Thank you
for your cooperation in this matter.




Very
truly yours,




PERF-GO
GREEN, INC.






By:


Name:


Title:


Acknowledged
and agreed.





STAR
FUNDING, INC.








By:


Name:


Title: