ACCOUNTS RECEIVABLE PURCHASE &
SECURITY AGREEMENT


 


This Accounts Receivable Purchase &
Security Agreement (the "Agreement"), effective January 11, 2012. Is entered into by and between SOUTHERN PRODUCTS, INC.
a Nevada Corporation doing business as SIGMAC USA (hereafter "Client") and PACIFIC BUSINESS CAPITAL CORPORATION. a California
corporation (hereinafter "PBCC"). The parties agree as follows:


 


PURPOSE OF AGREEMENT


 


1. Client desires to obtain short term financing by factoring.
selling and assigning to PBCC acceptable accounts receivable at a discount below face value. The purpose of this financing is commercial
in nature, and not for household. family, and/or personal use.


 


DEFINITIONS


 


2. "Account" or "Account Receivable"
means any right to payment of a monetary obligation as defined in Commercial Code Section 9102 and includes, without limitation,
for goods sold, leased, and/or delivered, or services rendered which are not evidenced by an instrument or chattel paper.


3. "Acceptable Account" means an Account conforming
to the warranties and terms set forth herein.


4. "Customer" means Client's customer or the account
debtor.


5. "Client" means the seller and assignor of the
Accounts.


6. "Collateral" means the intangible or tangible
property given as security to PBCC by Client for any obligations and liabilities of Client to PBCC under this Agreement.


7. "Warrant" means to guarantee, as a material
element of this Agreement. Each separate warranty herein is also an independent condition to PBCC's duties under this Agreement.


8. "Credit Problem" means a customer is unable
to pay his debts because of insolvency. the filing of a voluntary petition in bankruptcy, the quitting of business, and the like.


9. "Customer Dispute" means a claim, by customer
against Client, of any kind whatsoever, that reduces the amount collectible from customer by PBCC.


(a) A "Customer Dispute" may arise from any kind
of disagreement between customer and Client whatsoever, valid or invalid.


(b) A "Customer Dispute" may arise at anytime,
both before and/or after the signing of this agreement or the purchase of the Account.


 


WARRANTIES AND COVENANTS BY CLIENT


 


10. As an inducement for PBCC to enter into this Agreement,
and with full knowledge that the truth and accuracy of the warranties in this Agreement are being relied upon by PBCC instead of
the delay of a complete credit


investigation, Client warrants and/or covenants that:


11 Client is properly licensed and authorized to operate
its business under the trade name of SIGMAC USA and Client's trade name(s) has been properly filed and published as required by
applicable law.


12. Client's business is solvent, and Client has made and
shall continue to make timely payment on deposit of any tax required to be deducted and withheld by Client from the wages of any
employee of Client.


13. Each customer's business is solvent to the best of Client's
information and knowledge.


14. Client is, at the time of purchase by PBCC the lawful
owner of and has good and undisputed title to the Accounts purchased by PBCC.


15. Each Account offered for sale to PBCC is an accurate
and undisputed statement of indebtedness by customer to Client for a certain sum which is due and payable in thirty days or less.
or within such time as is agreed to, in writing, by PBCC and Client.


16. Each Account offered for sale to PBCC is an accurate
statement of a bonafide sale, delivery and acceptance of merchandise or performance of service by Client to customer.


1 Client does not own, control or exercise dominion over.
in any way whatsoever. the business of any customer/account debtor to be factored by Client to PBCC.


18. All financial records, statements, books or other documents
shown to PBCC by Client at anytime. Either before or after the signing of this Agreement are true and accurate.


19, Client will not, under any circumstances or in any manner
whatsoever, interfere with any of PBCC’s rights



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under this Agreement.


20. Client will not factor or sell Accounts except to PBCC
for the period of this Agreement, and/or for as long s any indebtedness whatsoever remains owing by Client to PBCC.


21. Client has not transferred, pledged or granted a security
interest in Client's Accounts or other personal property to any other party which Client has not fully disclosed in \\Titing to
PBCC and Client \\ill not transfer, pledge or grant a security interest to any other party in said Accounts or personal properly
for the term of this Agreement and for as long as Client is indebted to PBCC hereunder.


22. Client will not change or modify the terms of the original
Account with customer unless PBCC first consents to such change in writing. For example. Client may not extend credit to a customer
beyond thil1y days without prior written consent from PBCC.


23. Client shall not consent to the placement of any lien,
security interest or encumbrance upon Client's fixtures. personal property of any type and wherever located except upon \written
notice to PBCC, and Client shall provide written notice to PBCC within ten days of Client obtaining any knowledge, from any source,
of the filing, recording or perfection by any means, of any non-consensual lien, claim or encumbrance against the aforementioned
property of Client.


24. Client will maintain such insurance covering Client's
business and/or the property of Client's customers as is customary for businesses similar to the business of Client and, at the
request of PBCC, name PBCC as loss payee of such insurance.


25. Client will notify PBCC in writing prior to any change
in the location of Client's place of business or, if Client has or intends to acquire any additional place(s) of business, or prior
to any change in Client's chief executive office, the office or offices where Client's books and records concerning Accounts are
kept.


26. Client will immediately notify PBCC in writing of any
proposed change of Client's name, identity, legal entity, corporate structure, use of additional trade name(s), and/or any proposed
change in any of the officers, principals, partners, and/or owners of Client.


 


FURTHER PROMISES


 


27. SECURITY INTEREST/COLLATERAL: As a further inducement
for PBCC to enter into this Agreement, Client gives to PBCC, as collateral for the repayment of any and all obligations and liabilities
whatsoever of Client to PBCC, a security interest, under the Uniform Commercial Code, in the following described property hereinafter
collectively called "Collateral": ALL ASSETS, including, without limitation. any and all presently existing, or hereafter
arising, now owned or hereafter acquired Accounts, Accounts Receivable. contract rights, chattel paper, choses in action, documents,
instruments, reserves, reserve accounts, rebates, and general intangibles, and all books and records pertaining to Accounts and
all proceeds of the foregoing property, and all properly set forth in Exhibit "A" attached hereto and incorporated by
reference herein.


28. NOTIFICATION: PBCC may at any time and at its
sole discretion notify any customer/account debtor of Client to make payments directly to PBCC.


29. ASSIGNMENT: Client shall from time to time at
Client's option sell, transfer and assign Accounts to PBCC and said Accounts shall be identified by separate and subsequent written
assignments on a form to be provided to Client by PBCC known as Schedule of Accounts.


30. APPROVAL: PBCC will not purchase an Account unless
such Account is first submitted to PBCC by Client for approval. PBCC is not obligated to buy any Account from Client.


31. DISCOUNT: PBCC agrees to buy Acceptable Accounts
from Client at a minimum discount (fee) of .813 Percent (.00813) of the face value of each Account.


32. RESERVE: PBCC may reserve and withhold an amount
in a reserve account equal to Twenty Percent (20%) or more of the gross face amount of all Accounts purchased. Said reserve account
may be held by PBCC and applied by PBCC against charge-backs or any obligations of Client to PBCC known or anticipated, and said
reserve account is not due and payable to Client until any and all such obligations are fully paid and/or satisfied. Client gives
to PBCC a security interest in this reserve account \\hich secures all obligations and indebtedness arising hereunder. 33. PURCHASE
TERMS: The purchase price for each Acceptable Account shall be the gross amount due of each Account. less PBCC's earned discount
of .813 Percent (.00813) of said gross amount. In the event that an) Account remains unpaid after the fifteenth (l5th) from
the date said Account was purchased by PBCC, the purchase price shall be reduced by an additional service discount of 0.54 Percent
(.00054) per day, until said Account



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is paid in full commencing from the sixteenth (16th) day
after purchase of each such Account. The additional service discount shall be consideration for PBCC's prolonging the period its
funds are outstanding and the additional services required in collecting Accounts which are paid the initial fifteen (15) day period
contemplated in this Agreement. The service discount fees stated herein assume an advance rate of eighty percent (80%). In the
event the advance rate is more or than eighty percent the service discount fees applicable thereto shall be adjusted pro-rata,
as applicable, in order to maintain the same effective yield assuming an eighty percent (80%) advance rate. PBCC will not apply
any partial payments against factored invoices. Partial payments shall be held by PBCC until such time as the Client repurchases
the invoice(s) in full and complete payment is received from the customer. PBCC shall continue to charge its full service fee on
the gross invoice amount until full payment is received. PBCC reserves the right to renegotiate its discount rate on specific Accounts,
and/or all Accounts purchased pursuant to this Agreement, as market conditions, interest rates, and credit risks warrant. Any payments
received by Client on PBCC's Accounts shall be the sole property of PBCC and Client agrees and commits to hold the exact payment
instrument, (e.g., check received from any account debtor in partial or full settlement of Accounts sold to PBCC) and to remit
to PBCC said payment instrument immediately. The receipt of any check or other items of payment from account debtors or Client,
shall not be considered a payment on account until such check or other item of payment is presented to PBCC's bank for payment,
in which event, said check or other item of payment shall be deemed to have been paid to PBCC three (3) calendar days after
advise of receipt of funds in PBCC's account at WELLS FARGO BANK located in Orange County California. Should Client intercept
and deposit checks into Client's bank account which represent payment on any invoice(s) purchased by PBCC and fail to reimburse
PBCC for the full amount of such intercepted funds within two (2) business days after receipt of funds by Client, in addition to
the discounts earned and due under the terms of this Agreement, Client shall forfeit the entire initial reserve associated
with the invoices involved as well as be charged any and all reasonable collection and/or legal fees associated with the collection
of the same.


34. RESERVES. As set forth in Paragraph 32 above,
the reserve shall be held by PBCC and applied to any obligations of Client to PBCC including all discounts earned. PBCC will pay
(i.e. rebate) to Client the balance of the reserve account, after deducting all discounts earned (PBCC fees), hard costs
(legal fees and other collection charges, UPS and other freight charges, and any other advances required before an Account can
be collected), charge backs (e.g. short payment because of customer deductions, Client-intercepted payments), on each Account
included on the Schedule of Accounts. PBCC will generally rebate the reserve on an invoice by invoice basis, but retains the right
under appropriate circumstances to delay payment of the reserve until all the Accounts included on the Schedule of Accounts have
been collected in full by PBCC. Reserve account rebates shall be paid once each week on the same day (i.e. every Monday
for schedules paid in full by 12:00 pm of the preceding Monday, Tuesday or Wednesday, and every Wednesday for schedules paid in
full by 12:00 pm of the preceding Thursday or Friday). Any sums received by PBCC with regard to an Account shall be applied as
specified in the payment or, if not readily ascertainable, against the oldest Account of that customer. Any reserve money owing
to Client may be held by PBCC in PBCC's sole discretion as further security for payment of any and all obligations owing by Client
to PBCC. In the event that Client intercepts any funds due to PBCC, any sums due as a result of such intercept may be charged against
any reserves otherwise due Client.


35. REQUIRED FORMS: When Client offers a Schedule
of Accounts to PBCC for sale, PBCC shall receive an original invoice(s) together with one copy thereof, a copy of the Bill of Lading,
Proof of Delivery, Contract or Purchase Order, and/or a Purchase Order number which corresponds with such invoice(s), and any other
necessary documents as appropriate to the business of Client.


36. RECOURSE: PBCC will have recourse against Client
in any of the following events;


(a) If the Customer or Account has a Credit Problem (as defined
in Paragraph 8);


(b) If the Customer asserts a claim of or offset of any kind
against Client or PBCC;


(c) If an invoice purchased by PBCC remains uncollected after
90 days of the invoice date;


(d) If the Client has breached any warranties or promises.
or has misrepresented any material facts, with respect to this Agreement or any unpaid account;


(e) If the Client has contributed to, or aggravated Customer's
credit problem or ability to pay, or Client directly or indirectly interferes with PBCC's to collect the unpaid and


(f) If the Client and Customer are involved in a dispute
kind which remains unresolved for more than of validity.



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PBCC may require the Client to repurchase these accounts
or invoices, as the case may be. The repurchase price shall include PBCC's purchase price plus applicable factoring fees, or earned
discounts, as set forth in this Agreement. Should Client fail to repurchase each uncollected invoice or account within five (5)
days after receiving written notice from PBCC, PBCC may apply any and all monies due Client held by PBCC including advances, rebates
and collections of non-factored invoices, to the invoices or accounts to be repurchased. or PBCC may seek recovery through any
other remedies legally available to it. Furthermore, if Client has materially breached any warranties or promises in this Agreement,
misrepresented any material facts with regard to the accounts purchased by PBCC, or is in default as defined in this Agreement,
PBCC reserves the right to require the Client to repurchase all the outstanding accounts held by PBCC for the repurchase price
defined above.


37. NOTICE OF DISPUTE: Client will immediately notify
PBCC of any disputes between customer and Client.


38. PAYMENT OF DISPUTED ACCOUNT: Client will immediately pay to PBCC the
full amount of any Account subject to a Customer Dispute (see Paragraph 9 for definition) of any kind whatsoever.


39. SETTLEMENT OF DISPUTE: PBCC may settle any dispute
with customer. Such settlement does not relieve Client of final responsibility for such Accounts.


40. CHARGE-BACK: If Client does not fully settle the
dispute with immediacy, PBCC may, in addition to any other remedies under this Agreement, charge back or sell back the Account
to Client.


41. CHARGE-BACK FOR INVOICING ERROR: Mistaken, incorrect
and/or erroneous invoicing, submitted by Client to PBCC may, at PBCC's discretion be deemed a disputed invoice and be charged back
to Client.


42. STATEMENT OF CHARGE-BACK: PBCC shall identify
in writing all charge-backs and provide to Client a written statement thereof. Said statement shall be deemed an "Account
Stated" between Client and PBCC as to said charge-backs except for any errors of which Client shall have notified PBCC in
writing within fifteen (15) days after the date of receipt by Client of said statement


43. SOLE PROPERTY: Once PBCC has purchased an Account,
the payment from customer as to that Account is the sole property of PBCC. Any interference by Client with this payment will result
in civil and/or criminal liability.


44. HOLD IN TRUST: Client will hold in trust and safekeeping.
as the property of PBCC, and immediately turn over to PBCC the identical check or other form of payment received by Client, whenever
any payment on an Account purchased by PBCC comes into Client's possession. Should Client come into possession of a check comprising
payments owing to both Client and PBCC, Client shall turn over said check to PBCC. PBCC will refund Client's portion to Client.


45. FINANCIAL RECORDS: Client will furnish PBCC financial
statements and information as requested by PBCC from time to time.


46. TAX COMPLIANCE: Client will furnish PBCC upon
request satisfactory proof of payment and/or compliance with all Federal, State and/or local tax requirements.


47. NOTICE OF LEVY: Client will promptly notify PBCC
of any attachment, tax assessment or other legal process levied against Client or any of Client's customers.


48. NO PLEDGE: Client will not pledge the credit of
PBCC to any person or business for any purpose whatsoever. 49. BOOK ENTRY: Client will, immediately upon sale of Accounts
to PBCC, make proper entries on its books and records disclosing the absolute sale of said Accounts to PBCC.


50. LEGAL & COLLECTION FEES: Except as is prohibited
by law, Client shall pay to PBCC all costs and expenses including without limitation attorney's fees and costs incurred by PBCC
in the prosecution or enforcement of any of PBCC's rights, claims or causes of action which arise out or relate to or pertain to
this Agreement


51. POWER OF ATTORNEY: Anyone or more of the following
shall constitute a default provided that same is not cured or resolved within ten (10) business days:


(a) Strike out Client's address on all Accounts mailed to
customers and put PBCC's address on all Accounts.


(b) Receive, open and dispose of all mail addressed to Client,
or to Client's fictitious trade name via PBCC's address.


(c)Endorse the name of Client or Client's fictitious trade
name on any checks or other payment that may come into the possession of PBCC on Accounts purchased by PBCC or pursuant to default.



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(d) In the event Client has not cured any default hereunder
within the time specified, PBCC may, in Client's name, or otherwise, demand, sue for, collect, and give releases for any and all
monies due or to become due on Accounts.


(e) Do any and all things necessary and proper to carry out
the purpose intended by this Agreement.


(f) Execute and file a UCC-l Financing Statement, or UCC-2
as applicable, on behalf of Client evidencing and perfecting the security interest granted by Client to PBCC and renewing the security
interest granted herein.


The authority granted PBCC herein shall remain in full force
and effect until all assigned Accounts are paid in full and any indebtedness of Client to PBCC is discharged.


52. DOUBLE PAYMENTS: Should PBCC receive a double
payment on an Account or other payment which is not identified, PBCC shall carry these sums as open items and shall return them
to said Payor upon proper identification.


53. MAXIMUM ACCOUNT: The outstanding amount of Client's
account with PBCC (that is, Accounts purchased by PBCC from Client and not yet paid by customer) shall not exceed the sum of unless
otherwise agreed by the parties in writing.


54. HOLD HARMLESS: Client shall indemnify and hold
PBCC free and harmless from and against any customer ill will arising from PBCC's collecting or attempting to collect any Accounts.


55. DEFAULTS: Anyone or more of the following shall
be a default hereunder:


(a) Client shall fail to pay any indebtedness to PBCC when
due.


(b) Client shall breach any term, provision, covenant, warranty
or representation under this Agreement, or under any other agreements or contracts between Client and PBCC or obligation of Client
to PBCC.


(c) The appointment of any receiver or trustee of all or
a substantial portion of the assets of Client.


(d) Client shall become insolvent or unable to pay debts
as they mature, shall make a general assignment for the benefit of creditors, or shall voluntarily file under any bankruptcy or
similar law.


(e) Any involuntary petition in bankruptcy shall be filed
against Client and shall not be dismissed within 60 days.


(f) Any levies of attachment, executions, tax assessments,
tax liens, or similar process shall be issued against the Collateral and shall not be released within ten days thereof.


(g) Any financial statements, profit and loss statements,
borrowing certificates, or schedules, or other statements furnished by Client to PBCC prove false or incorrect in any material
respect.


(h) Client shall terminate/cease factoring while PBCC has
factored Accounts outstanding as to which the entire collectability is uncertain.


56. REMEDIES AFTER DEFAULT: In the event of any default
PBCC may do anyone or more of the following:


(a) Declare any indebtedness including outstanding factored
Accounts, immediately due and payable;


(b) Notify any customers of Client default and take possession
of Collateral and collect any Accounts without judicial process;


(c) Require Client to assemble the Collateral and the records
pertaining to Accounts and make them available to PBCC at a place designated by PBCC:


(d) Enter the premises of Client and take possession of the
Collateral and of the records pertaining to the Accounts and any other Collateral;


(e) Grant extensions, compromise claims, and settle Accounts
for less than face value, all without prior notice to Client;


(f) Use, in connection with any assembly or disposition of
the Collateral, any trademark. trade name, trade style, copyright, patent right or technical process L1sed or utilized by Client;


(g) Return any surplus realized to Client after deducting
the actual expenses, attorneys' fees incurred by PBCC in resolving said default;


(h) Hold Client liable for any deficiency:



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(i) Any other remedy available to PBCC, whether in law or
equity; and


(j) Terminate the Agreement forthwith.


57. TERMINATION: This Agreement shall have a minimum
term of twelve (12) months and shall thereafter automatically renew for successive twelve (1 month periods unless terminated by
certified written notice by either party thirty (30) prior to such renewal period.


58. POST-TERMINATION: Afterterminatiol1, Client shall
be liable to PBCC for the full and prompt payment of the full amount of factored Accounts which are then outstanding and unpaid.
disputed or undisputed, as well as any other indebtedness whatsoever, PBCC continues to have a security interest in the Collateral
of Client until any existing indebtedness of Client to PBCC is paid in full.


59. BINDING ON FUTURE PARTIES: This Agreement inures
to the benefit of and is binding upon the heirs, executors, administrators, successors and assigns of the parties thereto.


60. CUMULATIVE RIGHTS: All rights, remedies and powers
granted to PBCC in this Agreement, or in any note or other agreement given by Client to PBCC, are cumulative and may be exercised
singularly or concurrently with such other rights and PBCC may have. These rights may be exercised from time to time as to all
or any part of the pledged Collateral as PBCC in its discretion may determine.


61. WRITTEN WAIVER: PBCC may not waive its rights
and remedies unless the waiver is in writing and signed by PBCC. A waiver by PBCC of a right or remedy under this Agreement on
one occasion is not a waiver of the right or remedy on any subsequent occasion.


62. GOVERNING LAW; JURISDICTION AND VENUE: This Agreement
shall be governed by and construed in accordance with the laws of the State of California. The sole and only proper jurisdiction
and venue for any action under this Agreement shall be Orange County, California.


63. ARBITRATION: Any controversy or claim arising
out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration
Association ("AAA") in accordance with its Commercial Arbitration Rules, including the Optional Rules for Emergency Measures
of Protection, unless the parties agree to another arbitrator in writing, and judgment on the award rendered by the arbitrator(s)
may be entered in any court having jurisdiction thereof. The arbitration will be conducted in Orange County, California. In the
event that any party's claim exceeds $1,500,000.00 exclusive of interest and attorneys' fees, the dispute shall be heard and determined
by three (3) arbitrators. Within fifteen (15) days after the commencement of arbitration, each party shall select one person to
act as arbitrator, and the two (2) so selected shall select a third arbitrator within thirty (30) days of the commencement of the
arbitration. If the arbitrators selected by the pa11ies are unable or fail to agree upon the third arbitrator within the allotted
time, the third arbitrator shall be appointed by AAA in accordance with its rules. All arbitrators shall serve as neutral, independent
and impartial arbitrators. If the arbitration is to be conducted by a sole arbitrator, the arbitrator must be:


1. A retired judge with at least five (5) years of civil
law experience; or


2. A lawyer with ten (10) years of active practice in commercial
finance and asset based lending.


If the arbitration is conducted by three (3) arbitrators,
at least two (2) of the three (3) arbitrators shall meet the requirements of items 1 and 2 above.


At the request of a pa11y, the arbitrator(s) shall have the
discretion to order examination by deposition of witnesses to the extent the arbitrator deems such additional discovery relevant
and appropriate. Depositions shall be limited to a maximum of three (3) per party and shall be held within forty-five (45) days
of the making of a request. Additional depositions may be scheduled only with the permission of the arbitrator(s), and for good
cause shown. Each deposition shall be limited to a maximum of six (6) hours duration. All objections are reserved for the arbitration
hearing except for objections based on privilege and proprietary or confidential information. In any arbitration arising out of
or related to this Agreement, requests for documents:


1. Shall be limited to documents which are directly relevant
to significant issues in the case or to the case’s outcome;


2. Shall be restricted in terms of time frame, subject matter
and persons or entities to which the requests


pertain; and






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3. Shall not include broad phraseology such as "documents
directly or indirectly related to arbitrators will have no authority to punitive or other not measured by the prevailing party's
actual damages, except as may be required by statute. The arbitrator(s) may not award any incidental. indirect or consequential
damages, including damages for lost profits. The award shall be in writing, shall be signed by a majority of the arbitrator(s),
and shall include a statement setting forth the reasons for the disposition of any claim. The parties shall maintain the confidential
nature of the arbitration proceeding and the reward, including the hearing, except as may be necessary to prepare for or conduct
the arbitration hearing on the merits, or except as may be necessary in connection with a court application for a preliminary remedy,
a judicial challenge to an award or its enforcement, or unless otherwise required by law or judicial decision.


64. INVALID PROVISIONS: If any provision of this Agreement
shall be declared illegal or contrary to law, it is agreed that such provision shall be disregarded and this Agreement shall continue
in force as though such provision had not been incorporated herein.


65. ENTIRE AGREEMENT: This instrument contains the
entire Agreement between the parties. It is further agreed and represented by each party hereto that in executing this Agreement
no party is relying on representations or promises of the other except as expressly set forth herein. It is further agreed that
this Agreement is the final entire Agreement of the Parties. It supersedes all prior oral or written negotiations or Agreements.
This Agreement may not be modified except in writing signed by both parties and attached hereto.


66. COUNTERPARTS: This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original Agreement, and all of which shall constitute one agreement to
be effective as of the Effective Date.


67. EFFECTIVE DATE: This Agreement becomes effective
when it is accepted and executed by an authorized officer of PBCC.


68. INDEMNIFICATION: Client agrees to indemnify and
hold PBCC harmless from any and all liability, claims and damages, including attorney fees, costs of suit and interest which PBCC
may incur as a result of the failure of Client to pay withholding taxes due and payable to any taxing authority.


69. COSTS: Client shall pay $1,500.00 to PBCC for
underwriting and other costs associated with verification of credit, consulting and credit research. UCC filing and registration
fees shall be billed at PBCC's cost. All costs shall be reimbursed out of the first funding. Client shall pay said fee before or
out of first funding and such fees are nonrefundable.


70. MINIMUM USAGE: Anything to the contrary notwithstanding,
Client shall be charged a minimum usage


discount fee each month equal to a factoring volume of not
less than $500,000.00


 


	SOUTHERN PRODUCTS. INC.		
        PACIFIC BUSINESS CAPITAL CORPORATION

         

	By: /s/ Edward Meadows		By: /s/ Bernard J. Hittner
	EDWARD MEADOWS, CEO		BERNARD J. HITTNER, CEO


 


ACKNOWLEDGMENT


STATE OF CALIFORNIA )


) SS


COUNTY OF ORANGE )


 


On the undersigned February 4, 2012, before me, Cathie F.
Messenger, the undersigned Notary Public in and for the said State, personally EDWARD MEADOWS, who proved to me on the basis of
satisfactory evidence to be the person whose name is subscribed within instrument and acknowledged to me that he executed the same
in his authorized capacity. and that by his signature on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.


 


I certify under PENALTY OF PERJURY under the laws of the
State of California that the foregoing paragraph is


true and correct.


 


WITNESS my hand and official seal


 


/s/ Cathie F. Messenger



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EXHIBIT "A"


 


DEBTOR: SOUTHERN PRODUCTS. INC. dba SIGMAC USA


 


SECURED PARTY' PACIFIC BUSINESS CAPITAL CORPORATION


 


As collateral securing all present and
future obligations of Debtor to Secured Party, Debtor hereby grants to Secured Party a security interest in the following, whether
now owned or hereafter acquired:


 


1. ALL ASSETS, including but not limited to the following:


 


a. All accounts, contract rights, instruments, documents,
chattel paper, choses in action, commercial tort claims, general intangibles (including but not limited to trademarks, tradenames.
patents, copyrights and all other forms of intellectual property, and tax refunds), returned and repossessed goods and all rights
as a seller of goods; all collateral securing any of the foregoing; all deposit or reserve accounts, special and general, whether
on deposit with Secured Party or others;


 


b. All books and records including, but not limited to, computer
tapes, disks, programs and other things upon which


or in which such books or records are stored or maintained
together with all equipment, machinery and inventory


containing or used in connection with the use, preparation
or maintenance of such books and records;


 


c. All inventory wherever located; all present and future
claims against any supplier of any of the foregoing,


including claims for defective goods or overpayments to or
undershipments by suppliers; all proceeds arising from the lease or rental of any of the foregoing; INVENTORY RETURNED BY DEBTOR
TO ITS SUPPLIERS SHALL REMAIN SUBJECT TO SECURED PARTY'S SECURITY INTEREST;


 


d. All equipment and fixtures, NONE OF WHICH THE DEBTOR IS
AUTHORIZED TO SELL, LEASE OR\ OTHERWISE DISPOSE OF WITHOUT THE WRITTEN CONSENT OF SECURED PARTY. All warranty and other claims
against any vendor or lessor of any of the foregoing;


 


e. All substitutions, replacements, additions, accessions,
proceeds and products of any of the foregoing, whether due to voluntary or involuntary disposition, including, but not limited
to money, deposit accounts, goods, tax refunds. Other tangible and intangible property;


 


f. All letter(s) of credit and beneficial interest there
under;


 


g. All investment property; and


 


h. Insurance and the proceeds thereof covering any of the
foregoing.


 


NOTICE- PURSUANT TO AN AGREEMENT
BETWEEN DEBTOR AND SECURED PARTY, DEBTOR HAS AGREED NOT TO FURTHER ENCUMBER THE COLLATERAL DESCRIBED HEREIN, THE FURTHER
ENCUMBERING OF WHICH MAY CONSTITUTE THE TORTIOUS INTERFERENCE WITH SECURED PARTY'S RIGHTS BY SUCH ENCUMBRANCER.


 


IN THE EVENT THAT ANY ENTITY IS GRANTED
A SECURITY INTEREST IN DEBTOR'S ACCOUNTS. CHATTEL PAPER OR GENERAL INTANGIBLES CONTRARY TO THE ABOVE, THE SECURED PARTY ASSERTS
A CLAIM TO ANY PROCEEDS THEREOF RECEIVED BY SUCH ENTITY AND THE COLLECTION AND RETENTION OF THE PROCEEDS OF THE ACCOUNTS WILL VIOLATE
THE RIGHTS OF THE SECURED PARTY NAMED HEREIN.


 


SOUTHERN PRODUCTS. INC.


By: /s/ Edward Meadows


Name & Title: EDWARD MEADOWS - CEO



 








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