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immediately upon demand, Seller shall provide Purchaser with access to Seller’s computer files anddatabases, and all other records, including access to account payor databases (e.g. passwords,links and entry to online billing programs), for the purposes of obtaining, identifying andverifying information related to such Receivables. Additionally, If requested by Purchaser, Selleragrees to furnish the original purchase order or other similar documents from Seller’s customer,evidence of shipment of the related merchandise or performance of services rendered and a writtenassignment of any Receivable, all in a form satisfactory to Purchaser. If requested by Purchaser,all invoices relating to Receivables and any other accounts receivable shall plainly state on theirfaces in language acceptable to Purchaser that the amounts payable thereunder have been assigned toand are payable directly to Purchaser. If payment is made to Seller under any circumstance, suchpayment shall be held in trust by Seller for Purchaser and shall not be negotiated or commingled inany way with the Seller’s funds. Within three Business Days after receipt thereof, Seller shalldeliver any such payments to Purchaser in the original form as received by Seller, endorsed asrequired by Purchaser. In the event that Seller fails to deliver to Purchaser any payment orproceeds that it may receive with respect to any Receivable, within the three Business Day deliverydeadline provided herein, Seller will pay to Purchaser a Misdirected Payment Fee equal to fifteen(15%) percent of the misdirected payment or proceeds, payable immediately upon its failure totimely deliver such item or items. Said fee shall not be considered or construed as interest.Seller’s agreement to pay such a fee and Purchaser’s acceptance of such a fee shall not be deemed awaiver or acquiescence by Purchaser of Seller’s obligation to promptly deliver to Purchaser’spossession all collections on all Receivables no later than the next Business Day, and pay allother Obligations. The Misdirected Payment Fee, along with the misdirected payment or proceeds,shall be due immediately to Purchaser without notice or demand, and the collection of this feeshall be cumulative with all other remedies available to Seller in the collection of allObligations. Purchaser is hereby irrevocably authorized to open, cash, endorse and otherwisecollect all checks and other forms of payment tendered in payment of each Receivable and in paymentof any other accounts receivable, in the name of and as attorney-in-fact for Seller, and to directSeller’s customers to make payment to a different name and/or location. This power of attorney iscoupled with an interest.**Section 4.****Recoupment Rights of Purchaser****.**Regardless of whether Seller is in default under this Agreement, Purchaser shall have the right atall times, in its discretion, to recoup all or any designated portion of the Obligations(hereinafter defined) or any other amounts which Seller may owe to Purchaser in such a manner asPurchaser may determine, at any time and without notice to Seller from:(a) any and all deposits (general or special, time or demand, provisional or final) or other sumsat any time credited by or owing from Purchaser to Seller; and/or(b) all or any portion of such amount from any refund, rebate or other obligation owed by Purchaserto Seller.The rights and remedies of Purchaser hereunder are in addition to other rights and remedies(including, without limitation, to the rights of setoff) which Purchaser may have.Furthermore, in order to satisfy any of the Obligations hereunder, Purchaser is hereby authorizedby Seller to initiate electronic debit or credit entries through the ACH system to any depositaccount maintained by Seller wherever located.**Section 5.****Transfer of Related Interests**.In addition to the Receivables, Seller hereby sells, assigns, transfers, conveys and delivers toPurchaser all other rights and interests (but not obligations) now or hereafter existing inconnection with the Receivables, including, but not limited to liens, security interests andguarantees securing payment of the Receivables, Seller’s rights to access an account payor’s onlinevendor billing system or other such electronic database (including rights to passwords, user namesand other similar rights), Seller’s interest in returned goods arising with respect to theReceivables, and other rights and remedies of Seller related to the Receivables such as rights ofstoppage in transit, replevin, reclamation and lawsuits to collect the Receivables. If anyReceivable is ever represented by a promissory note or other written evidence of obligation, Sellershall deliver the same to Purchaser duly endorsed by Seller to Purchaser.**Section 6.****Further Assurances****.**Seller agrees to execute and deliver to Purchaser such notices of assignment and other documents asPurchaser may request to further document the sale and assignment of Receivables hereunder.**Section 7.****No Obligation to Purchase Further Receivables**.Notwithstanding anything to the contrary contained herein, Seller specifically acknowledges andagrees that Purchaser has the right to approve or reject future accounts receivable or other itemsof any kind proposed for sale under this Agreement IN ITS SOLE DISCRETION, and no course of conductshall establish any commitment to purchase future accounts receivable or other items of any kind.**Section 8. Terms-Seller’s Customers**.Except as may otherwise be agreed to from time to time, the terms of all Receivables shall notexceed thirty(30) days. Seller shall not modify or vary the terms of sale, terms of payment, or location ofpayment set forth in the invoice relating to any Receivable without Purchaser’s written consent.
 
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**Section 9.****Purchase Price; Discount****.**The Purchase Price (herein so called) for theReceivables shall be the Gross Amount of the Invoice minus the Discount. The “Gross Amount of theInvoice” shall mean the total invoice amount, including any miscellaneous charges such as salestaxes and delivery charges, less any early payment or special discounts offered to Seller’scustomer. “Discount” means 20% of the Gross Amount of the Invoice. The Purchase Price for anyReceivable shall be paid only after execution by Seller and acceptance by Purchaser of a Schedule“A” covering such Receivable. The Discount shall be deemed fully earned upon purchase of eachReceivable in consideration of the overall manpower, effort and expense associated with Purchaser’sperformance hereunder, which Seller acknowledges is fair and reasonable consideration for theDiscount. Furthermore, Seller agrees to pay Purchaser a Minimum Monthly Discount Fee of sevenhundred fifty dollars and no cents ($750.00), beginning the first full month after entering intothis Purchase and Sale Agreement / Security Agreement and funding occurs, as well as a MinimumInvoice Fee of $N/A. If, however, funding does not occur within 60 calendar days of execution ofthe Agreement, the minimum monthly discount fee will nonetheless be paid by Seller and collected byPurchaser for each month thereafter, as long as the Agreement is in force, and regardless ofwhether or not funding occurs in any given month. Furthermore, a fee may be assessed for eachSchedule “A” that Seller requests to be expedited or funded the same day, to be deducted from thatSchedule “A”. A fee may be assessed for each Reserve disbursement that Seller requests to beexpedited or funded the same day, to be deducted from that Reserve disbursement. Seller will alsobe charged a $1500.00 documentary fee, to be deducted from the first Schedule “A”, if not paidprior to first funding. Quarterly audit fees may also be assessed, and deducted from Reserves. Saidfees shall not be considered or construed as interest. That said, following the first anniversaryfrom the date hereof, Purchaser will re-evaluate the audits and may, in its discretion, conductthem semi-annually as opposed to quarterly. In any event, the audit fees passed on to Seller foranyone particular audit shall not exceed $4,000.00, except in extraordinary circumstances.**Section 10.****Rebate of Discount**.As an inducement for Seller to sell only invoices from which prompt payment can be expected,Purchaser will remit a rebate of part of the Discount as follows (any such rebate being referred toas a “Rebate” or “Rebate of Discount”):If the Receivable is paid within 15 days of purchase by Purchaser, a rebate of 19.65% of the GrossAmount of the Invoice LESS a Variable Discount Amount (“Variable Discount Amount”, defined below)will be remitted to Seller;If the Receivable is paid more than 15 days but not later than 30 days after the date of purchaseby Purchaser, a rebate of 19.40 % of the Gross Amount of the Invoice LESS a Variable DiscountAmount will be remitted to Seller;If the Receivable is paid more than 30 days but not later than 45 days after the date of purchaseby Purchaser, a rebate of 19.15 % of the Gross Amount of the Invoice LESS a Variable DiscountAmount will be remitted to Seller;If the Receivable is paid more than 45 days but not later than 60 days after the date of purchaseby Purchaser, a rebate of 18.90 % of the Gross Amount of the Invoice LESS a Variable DiscountAmount will be remitted to Seller;If the Receivable is paid more than 60 days but not later than 75 days after the date of purchaseby Purchaser, a rebate of18.65 % of the Gross Amount of the Invoice LESS a Variable Discount Amountwill be remitted to Seller;If the Receivable is paid more than 75 days but not later than 90 days after the date of purchaseby Purchaser, a rebate of 18.40 % of the Gross Amount of the Invoice LESS a Variable DiscountAmount will be remitted to Seller;At Seller’s election, if the Receivable is paid more than 90 days but not later than 120 days afterthe date of purchase by Purchaser, a rebate of 13.40% of the Gross Amount of the Invoice LESS aVariable Discount Amount will be remitted to Seller;The Rebate provided for Receivables paid after 90 or after 120 days from the date of purchase is inno way to be construed as a waiver of Purchaser’s remedies upon Default or Dispute, should a rebatebe remitted on any invoice that is 90 days or more past due, and is not a waiver of Purchaser’sCharge-Back rights.The Variable Discount Amount shall be computed as Amegy Bank National Association Prime Rate (the“Index”) plus 1.25%, multiplied by the Purchase Price of the Receivable, divided by 360, andmultiplied by the number of collection days. Being a general reference index, the Index is subjectto change from time to time as Amegy Bank National Association may deem appropriate. The Indexchange will not occur more often than each day. The Index has a floor and at no time shall it beless than 5.00% for the purposes of this Agreement. The Variable Discount Amount is subject tochange, with prior notice by telephone or facsimile notice from Purchaser to Seller. This amountshall in no way be interpreted or construed as interest but only as a guideline to the VariableDiscount Amount charged.
 
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**Section 11.****Security Interest**.For the purpose of securing Purchaser (referred to inthis Section as “Secured Party”) in the payment of the Obligations (hereinafter defined), Seller(referred to in this Section as “Debtor”) hereby grants a lien and security interest to Purchaserin the assets described below, now owned or hereafter acquired by Seller (the “Collateral”), asfollows:All now owned or hereafter acquired accounts, accounts receivable and inventory, including but notlimited to contracts, notes, drafts, acceptances, instruments, chattel paper, documents, money,deposit accounts, payment intangibles, commercial tort claims, and returned or repossessed goodsarising from or relating to any such accounts or accounts receivable or inventory and other rightsarising from or by virtue of, or from the voluntary or involuntary sale or other disposition of, orcollections with respect to, or insurance proceeds payable with respect to, or proceeds payable byvirtue of warranty or other claims against any other person or entity with respect to all or anypart of the property heretofore described, and proceeds and products of any of the foregoing in anyform.Terms used above have the meanings assigned in the Uniform Commercial Code as in effect in theState of Texas (the “UCC”). Purchaser shall have all the rights and remedies provided to a securedparty under the UCC, including the right to file one or more financing statements, as furtherdescribed below. Seller and Purchaser agree that to the extent Purchaser exercises or is deemed toexercise its rights under this Agreement as a secured party, Purchaser shall account for theproceeds of the accounts receivable and Receivables, deal with the disposition of the accountsreceivable and Receivables, and permit Seller to redeem the accounts receivable and Receivables inthe same manner provided for elsewhere in this Agreement. Purchaser’s compliance with itsobligations regarding collection and/or disposition of Receivables and accounts receivable andother rights which are described in this Agreement shall fulfill Purchaser’s duties and obligationsas a secured party pursuant to Sections 9.601 through 9.604 of the Texas Business and CommerceCode. Purchaser shall not be deemed to accept the accounts receivable and Receivables in dischargeof Seller’s obligations to Purchaser unless Purchaser sends Seller express written notice ofPurchaser’s intent to do so. Seller hereby agrees not to grant a security interest, junior orotherwise, or encumbrance of any kind, in the Collateral to any other entity without the priorexpress written approval of Purchaser. In furtherance thereof, Purchaser may include the followinglanguage on any UCC filing:NOTICE -Pursuant to an agreement between Debtor and Secured Party, Debtor has agreed not to grant asecurity interest in the Collateral, described herein and in any future commercial tort claims toany other secured party. Accordingly, the acceptance of any such security interest by anyone otherthan the above Secured Party is likely to constitute the tortious interference with Secured Party’srights.In the event that any entity is granted a security interest in the Collateral in a manner contraryto the above, the Secured Party asserts a claim to any proceeds thereof received by such entity.Furthermore, Seller authorizes the Purchaser at any time and from time to time to file any initialfinancing statements and amendments thereto that:(a) indicate the Collateral as accounts of the Seller or words of similar effect, regardless of whether any particular asset comprised in theCollateral falls within the scope of Article 9 of the UCC, or as being of an equal or lesser scope or with greater detail;(b) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance ofany financing statement or amendment, including (i) whether the Seller is an organization, the type of organization, and any organizationidentification number issued to the Seller and, (ii) in the case of a financing statement filed as a fixture filing or indicatingCollateral as extracted collateral or timber to be cut, a sufficient description of real property to which the Collateral relates;(c) contain a notification that the Seller has granted a negative pledge to the Purchaser, and thatany subsequent lienholder or potential secured party may be tortiously interfering with Purchaser’srights; and(d) advises third parties that any notification of Seller’s account debtors will interfere withPurchaser’s collection rights.In recognition of the Purchaser’s right to have its attorneys’ fees and other expenses incurred inconnection with this Agreement secured by the Collateral, notwithstanding payment in full of allObligations by Seller, Purchaser shall not be required to record any terminations or satisfactionsof any of Purchaser’s liens on the Collateral unless and until Seller has executed and delivered toPurchaser a general release in a form acceptable to Purchaser and substantially similar to thatRelease attached hereto and made a part hereof asExhibit “A”. Seller understands that this provision constitutes a waiver of its rights underSection9.513 of the UCC.
 
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Seller shall maintain insurance on the Collateral and all other insurable property owned or leasedby Seller in the manner, to the extent and against at least such risks (in any event, including butnot limited to fife and business interruption insurance) as usually maintained by owners of similarbusinesses and properties in similar geographic areas. All such insurance shall be in amounts andform and with insurance companies acceptable to Purchaser in its sole discretion. Seller shallfurnish to Purchaser: (a) upon written request, any and all information concerning such insurancecarried; (b) as requested by Purchaser, loss payable endorsements (or their equivalent) in favor ofPurchaser. All policies of insurance shall provide for not less than thirty (30) day’s priorwritten cancellation notice to Purchaser.Notwithstanding the creation of a security interest herein, Purchaser shall not be a fiduciary ofSeller. The relationship of the parties hereto is that of Purchaser and Seller of accounts, and notthat of lender and borrower.Regardless of the foregoing, Purchaser acknowledges that the following (and only the following)prior permitted lien(s) exist:*VCC*Financing Statement No. DE 2009 3372510; and