Exhibit 10.4


 





 


December 12, 2003


 


Equifin, Inc.


Equinox Business Credit Corp.


1011 Highway 71


Spring Lake, New Jersey 07762


 


 


Re:          Additional Funding


 


Reference is hereby made to that certain
Securities Purchase Agreement dated as of December     ,
2003 by and among Equifin, Inc. (“Equifin”), Equinox Business Credit Corp.
(“EBCC”) and Laurus Master Fund, Ltd. (“Laurus”) (the “Purchase Agreement”)
pursuant to which, among other things, Equifin and EBCC jointly and severally
issued to Laurus a secured convertible promissory note in the aggregate
principal amount of $1,100,000 (the ‘Note”) as part of a
financing facility that shall permit borrowings of up an aggregate of three
million dollars ($3,000,000) outstanding at any time. Capitalized terms used
but not defined herein shall have the meanings given them in the Purchase
Agreement or the Note, as applicable.


 


So long as (i) no Event of Default (as
defined in the Foothill Agreement) has been declared and remains uncured or
waived or has occurred and is continuing beyond any applicable grace period and
(ii) no Event of Default has been declared and remains uncured or waived or has
occurred and is continuing beyond any applicable grace period under the
Purchase Agreement, the Note, or the Related Agreements (each a “Funding
Default”), and (iii) Equifin has a sufficient number of authorized shares of
its Common Stock that would be required to be registered to permit the full
conversion of such Note, Laurus agrees to make available to Borrower an amount
equal to the Laurus Funding Obligation minus any and all amounts previously
funded to Borrower on or prior the date of the Funding Request (below)(the
“Incremental Funding Amount”) that are still outstanding. The Incremental
Funding Amount will be disbursed in two hundred fifty thousand dollar
increments (each, an “Incremental Funding Note”).  For the avoidance of doubt, amounts that are borrowed and repaid,
can be reborrowed in accordance with the terms and conditions contained herein.


 


Subject to availability as aforesaid, Laurus
shall upon three (3) business days prior written request of Borrower (a
“Funding Request”) substantially in the form attached hereto as Exhibit A,
disburse to Borrower as per the Funding Request such portion of the Incremental
Funding Amount as Laurus determines in good faith to be available in accordance
with the foregoing formula, based,  upon
the Funding Request and Laurus’ “Permitted Discretion” (as such term is defined
in the Foothill Agreement) based upon its due diligence reviews, from time to
time, of Borrower. EBCC and Equifin


 

















 


will jointly and severally
issue an Incremental Funding Note in an amount equal to the Incremental Funding
Amount set forth in the Funding Request and to be funded by Laurus. Each
Incremental Funding Note, and the other terms and conditions related thereto
and to each additional funding, will (subject to Section 2(b) of the Purchase
Agreement) be on substantially identical terms as outlined in the Purchase
Agreement, the Note and the Related Agreements.   For the avoidance of doubt, in connection with each such
additional funding: the “Fixed Conversion Price” shall be equal to 100% of the
volume weighted average price of EquiFin’s common stock for the five (5)
trading days’ immediately prior to the date of the issuance of such Incremental
Funding Note, and said note shall provide for minimum amortization of 1.5% of
the original principal amount per month thereof for the period prior to
December 1, 2004 and minimum amortization of 1.6% of the original principal
amount per month thereof for the period after December 1, 2004 (with additional
amortization required based upon the Borrowing Base and the value of the
Collateral on terms identical to the Note (but taking into account additional
Incremental Funding Notes that are then issued and outstanding, i.e. the
aggregate amounts outstanding under the Note and the Incremental Funding Notes
shall not exceed eleven and one half percent (11.5%) of the Borrowing Base, and
the then outstanding amount under the Foothill Note shall not exceed 35% of the
value (as determined by the Company in good faith and reported to Foothill) of
the collateral for the Eligible Notes).


 


This is not and shall not be deemed to be a binding agreement by Laurus
to honor any Funding Request except as set forth herein. Laurus’ obligation to
fund additional amounts shall be subject to the execution and delivery by each
of Equifin and EBCC respectively of agreements and other documentation required
by Laurus in its sole discretion, exercised reasonably, in accordance with the
terms and conditions set forth herein. In the event Equifin or EBCC is unable
for any reason to satisfy the conditions to funding set forth herein by the
third anniversary of the date hereof, this letter shall automatically terminate
unless extended in writing in Laurus discretion.


 


IN WITNESS WHEREOF, the parties have executed this letter agreement as
of the date first written above.


 


	
   

  	
  EQUIFIN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 

















 


	
   

  	
  EQUINOX BUSINESS
  CREDIT CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LAURUS MASTER FUND,
  LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  

  825 Third Avenue, 14th Floor

  New York, New York 10022

  Attention:  David Grin

  Facsimile:  212-541-4434

  



 

















 


Exhibit A


 


Funding Request


 


DATE:


BORROWER NAME:


 


	
  1.

  	
   

  	
  Foothill Borrowing Base (detailed certificate attached)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Applicable advance rate

  	
   

  	
  11.5

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Accounts Availability (Line 1 multiplied by Line 2)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Applicable Deductions (related to Notes)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Accrued and unpaid Interest

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Accrued and unpaid Fees

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Gross Amount available (Line # 3 minus # 4)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Maximum Aggregate Amount Available

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Total Amount Available (lesser of line #5 or line #6)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Aggregate Principal amount of Notes Outstanding issued to date

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Net Incremental Funding Amount Available (line #7 minus line #8)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Incremental Funding Requested (minimum $250,000 and less than #9)

  	
   

  	
  $

  	
   

  	
   

  



 


The
undersigned hereby certifies that all of the foregoing information regarding
the Borrowing Base is true and correct on the date hereof and no Event of
Default (as defined in the Foothill Agreement) has been declared and remains
uncured or waived or has occurred and is continuing beyond any applicable grace
period and all such amounts listed as Eligible Purchased Accounts and Eligible
Notes Receivable are such within the meaning given such terms in the Foothill
Agreement.


 


	
  EQUINOX BUSINESS
  CREDIT CORP.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: