# EDGAR Filing Document

**Accession Number:** 0000884650
**File Stem:** 0001654954-25-012430
**Filing Date:** 2025-10
**Character Count:** 652177
**Document Hash:** 3016d061a94f40568889536ed36768a2
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001654954-25-012430.hdr.sgml**: 20251031

**ACCESSION NUMBER**: 0001654954-25-012430

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 132

**CONFORMED PERIOD OF REPORT**: 20230930

**FILED AS OF DATE**: 20251031

**DATE AS OF CHANGE**: 20251031

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** INFINITE GROUP INC
- **CENTRAL INDEX KEY:** 0000884650
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-PREPACKAGED SOFTWARE [7372]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 521490422
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41542
- **FILM NUMBER:** 251441525

**BUSINESS ADDRESS:**
- **STREET 1:** 80 OFFICE PARK WAY
- **CITY:** PITTSFORD
- **STATE:** NY
- **ZIP:** 14534
- **BUSINESS PHONE:** 5853850610

**MAIL ADDRESS:**
- **STREET 1:** 80 OFFICE PARK WAY
- **CITY:** PITTSFORD
- **STATE:** NY
- **ZIP:** 14534

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** INFINITE MACHINE CORP
- **DATE OF NAME CHANGE:** 19971015

?xml version='1.0' encoding='ASCII'? igi_10q.htm

 **UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

_________________________________________

**FORM 10-Q**

_________________________________________

**QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the quarterly period ended **<u>September 30, 2023</u>**

**TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from ________ to ________

**Commission file number: <u>000-21816</u>**

_________________________________________

---

| |
|:---|
| **INFINITE GROUP, INC.** |
| **(Exact name of registrant as specified in its charter)** |

---

_________________________________________

---

| | |
|:---|:---|
| **Delaware** | **52-1490422** |
| (State or other jurisdiction of<br>incorporation or organization) | (I.R.S. Employer<br>Identification Number) |

---

---

| | |
|:---|:---|
| **175 Sully's Trail, Suite 202, Pittsford, New York** | **14534** |
| (Address of principal executive offices) | (Zip Code) |

---

**<u>(585) 385-0610</u>**

(Registrant's telephone number, including area code)

_________________________________________

Securities registered pursuant to Section 12(b) of the Act

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Title of each class** | &nbsp;&nbsp;**Trading Symbol** | &nbsp;&nbsp;**Name of each exchange on which registered** |
| &nbsp;&nbsp;**N/A** | **N/A** | &nbsp;&nbsp;**N/A** |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐&nbsp;&nbsp;&nbsp;&nbsp; No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐&nbsp;&nbsp;&nbsp;&nbsp; No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large Accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
|  |  | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐&nbsp;&nbsp;&nbsp;&nbsp; No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

The Registrant had 521,175 shares of the issuer's common stock, par value $.001 per share, outstanding as of October 21, 2025.

**Infinite Group, Inc.**

**Quarterly Report on Form 10-Q**

**For the Period Ended September 30, 2023**

**Table of Contents**

---

| | |
|:---|:---|
| [PART I - FINANCIAL INFORMATION](#p1) | **PAGE** |
| [Item 1. Financial Statements](#i1) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;[Balance Sheets – September 30, 2023 (Unaudited) and December 31, 2022](#bs) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;[Statements of Operations (Unaudited) for the three and nine months ended September 30, 2023 and 202<u>2</u>](#soo) | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;[Statements of Changes in Stockholders' Deficiency (Unaudited) for the three and nine months ended September 30, 2023 and 202<u>2</u>](#defict) | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;[Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2023 and 202<u>2</u>](#cf) | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;[Notes to Financial Statements – (Unaudited)](#notes) | 8 |
| [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](#i2) | 18 |
| [Item 3. Quantitative and Qualitative Disclosures About Market Risk](#i3) | 25 |
| [Item 4. Controls and Procedures](#i4) | 25 |
| [PART II - OTHER INFORMATION](#p2) |  |
| [Item 1. Legal Proceedings](#p2i1) | 26 |
| [Item 1A. Risk Factors](#p2i1a) | 26 |
| [<u>Item 2</u> <u>Unregistered Sales of Equity Securities and Use of Proceeds</u>](#p2i21) | 26 |
| [<u>Item 3</u> <u>Defaults Upon Senior Securities</u>](#p2i3) | 26 |
| [Item 6. Exhibits](#p2i6) | 27 |
| [SIGNATURES](#sig) | 28  |

---

---

| |
|:---|
| 2 |
| *[**Table of Contents**](#TOC)* |

---

**FORWARD-LOOKING STATEMENTS**

Certain statements made in this Quarterly Report on Form 10-Q are "forward-looking statements." All statements other than statements of historical facts contained in this report, including among others, our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth and trends are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The words "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "plan," "could," "target," "potential," "is likely," "will," "expect" and similar expressions are intended to identify forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our plans and objectives are based, in part, on assumptions involving the expansion of our business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. Therefore, you should not rely on any of these forward-looking statements. All forward-looking statements in this report are made only as of the date hereof or as indicated and represent our views as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise, except as required by law. For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections in this report, our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and our other filings with the Securities and Exchange Commission (the "SEC"). The terms "IGI", the "Company", "we", "our", "us", or any derivative thereof, as used herein refer to Infinite Group, Inc., a Delaware corporation.

---

| |
|:---|
| 3 |
| *[**Table of Contents**](#TOC)* |

---

**PART I**

**FINANCIAL INFORMATION**

**Item 1. Financial Statements**

---

| | | |
|:---|:---|:---|
| **INFINITE GROUP, INC.** | **INFINITE GROUP, INC.** | **INFINITE GROUP, INC.** |
| **BALANCE SHEETS** | **BALANCE SHEETS** | **BALANCE SHEETS** |
| **ASSETS** | **ASSETS** | **ASSETS** |
|  | **September 30,** | **December 31,**  |
|  | **2023** | **2022** |
|  | **(Unaudited)** |  |
| **Current assets:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash | $**9137** | $23187 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net of allowances for expected credit losses of $32,692 as of September 30, 2023 and $36,710 as of December 31, 2022, respectively | **201163** | 406005 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | **277931** | 144218 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current assets** | **488231** | 573410 |
| Right of Use Asset Operating Lease, net | **583503** | 645095 |
| Property and equipment, net | **6635** | 19996 |
| Software, net | **431540** | 417325 |
| Deposits | **10144** | 10144 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $**1520053** | $1665970 |
| **LIABILITIES AND STOCKHOLDERS' DEFICIENCY** | **LIABILITIES AND STOCKHOLDERS' DEFICIENCY** | **LIABILITIES AND STOCKHOLDERS' DEFICIENCY** |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $**1622626** | $1687579 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued payroll | **449808** | 386289 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable | **1342873** | 783581 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued retirement | **295290** | 286605 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | **451212** | 550523 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses other and other current liabilities | **312478** | 138639 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability - Short-term | **82798** | 76826 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current maturities of long-term obligations | **1054852** | 515000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current maturities of long-term obligations - related parties | **659300** | 385000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable, net | **1804361** | 1572857 |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable - related parties | **219000** | 229000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current liabilities** | **8294598** | 6611899 |
| **Long-term obligations:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Notes payable:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | **53097** | 458849 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related parties | **499000** | 886876 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability - long-term | **509723** | 572560 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | **9356418** | 8530184 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Commitments and contingencies** | **-** |  |
| **Stockholders' deficiency:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock, $0.001 par value, 60,000,000 shares authorized; 521,175 and 470,093 shares issued and outstanding, September 30, 2023 and December 31, 2022, respectively. | **521** | 470 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | **32331160** | 32164334 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | **(40168046)** | (39029018) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total stockholders' deficiency** | **(7836365)** | (6864214) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and stockholders' deficiency** | $**1520053** | $1665970 |

---

See notes to unaudited financial statements.

---

| |
|:---|
| 4 |
| *[**Table of Contents**](#TOC)* |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **INFINITE GROUP, INC.** | **INFINITE GROUP, INC.** | **INFINITE GROUP, INC.** | **INFINITE GROUP, INC.** | **INFINITE GROUP, INC.** |
| **STATEMENTS OF OPERATIONS (Unaudited)** | **STATEMENTS OF OPERATIONS (Unaudited)** | **STATEMENTS OF OPERATIONS (Unaudited)** | **STATEMENTS OF OPERATIONS (Unaudited)** | **STATEMENTS OF OPERATIONS (Unaudited)** |
|  | **Three Months Ended** <br>**September 30,** | **Three Months Ended** <br>**September 30,** | **Nine Months Ended** <br>**September 30,** | **Nine Months Ended** <br>**September 30,** |
|  | **2023** | 2022 | **2023** | 2022 |
| **Revenue** | $**1707711** | $1712212 | $**5255180** | $5075774 |
| Cost of revenue | **1005043** | 1060872 | **2969464** | 3241751 |
| **Gross profit** | **702668** | 651340 | **2285716** | 1834023 |
| **Costs and expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | **620180** | 529695 | **1617002** | 1746995 |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling | **665571** | 713173 | **2120046** | 1973755 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total costs and expenses** | **1285751** | 1242868 | **3737048** | 3720750 |
| **Operating loss** | **(583083)** | (591528) | **(1451332)** | (1886727) |
| **Other income (expense)** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest Income | **-** |  | **71624** | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related parties | **(31477)** | (22765) | **(89177)** | (68907) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | **(239481)** | (472999) | **(1427972)** | (833109) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest expense | **(270958)** | (495764) | **(1517149)** | (902016) |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt forgiveness | **-** |  | **95131** | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;ERC tax refund | **-** |  | **1662698** | 0 |
| **Total other income (expense)** | **(270958)** | (495764) | **312304** | (901998) |
| **Net loss** | $**(854041)** | $(1087292) | $**(1139028)** | $(2788725) |
| **Net loss per share – basic** | $**(1.65)** | $(2.41) | $**(2.30)** | $(6.28) |
| **Net loss per share – diluted** | $**(1.65)** | $(2.41) | $**(2.30)** | $(6.28) |
| **Weighted average shares outstanding** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**– basic** | **517533** | 451345 | **494799** | 443901 |
| **Weighted average shares outstanding** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**– dilluted** | **517533** | 451345 | **494799** | 443901 |

---

See notes to unaudited financial statements.

---

| |
|:---|
| 5 |
| *[**Table of Contents**](#TOC)* |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **INFINITE GROUP, INC.** | **INFINITE GROUP, INC.** | **INFINITE GROUP, INC.** | **INFINITE GROUP, INC.** | **INFINITE GROUP, INC.** | **INFINITE GROUP, INC.** |
| **STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY (Unaudited)** | **STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY (Unaudited)** | **STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY (Unaudited)** | **STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY (Unaudited)** | **STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY (Unaudited)** | **STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY (Unaudited)** |
| **Nine Months Ended September 30, 2023 and 2022** | **Nine Months Ended September 30, 2023 and 2022** | **Nine Months Ended September 30, 2023 and 2022** | **Nine Months Ended September 30, 2023 and 2022** | **Nine Months Ended September 30, 2023 and 2022** | **Nine Months Ended September 30, 2023 and 2022** |
| **Nine Months Ended September 30, 2023** | **Nine Months Ended September 30, 2023** | **Nine Months Ended September 30, 2023** | **Nine Months Ended September 30, 2023** | **Nine Months Ended September 30, 2023** | **Nine Months Ended September 30, 2023** |
|  |  |  | **Additional** |  |  |
|  | **Common Stock** | **Common Stock** | **Paid-in** | **Accumulated** |  |
|  | **Shares** | **Amount** | **Capital** | **Deficit** | **Total** |
| **Balance - December 31, 2022** | **470093** | $**470** | $**32164334** | $**(39029018)** | $**(6864214)** |
| **Stock based compensation** | **-** | **-** | **26159** | **-** | **26159** |
| **Warrants issued** | **-** | **-** | **107834** | **-** | **107834** |
| **Cashless exercise of warrants** | **6515** | **7** | **(7)** | **-** | **-** |
| **Net loss** | **-** | **-** | **-** | **(953971)** | **(953971)** |
| **Balance - March 31, 2023** | **476608** | $**477** | $**32298320** | $**(39982989)** | $**(7684192)** |
| **Stock Issued** | **30000** | **30** | **26671** | **-** | **26701** |
| **Net income** | **-** | **-** | **-** | **668984** | **668984** |
| **Balance - June 30, 2023** | **506608** | $**507** | $**32324991** | $**(39314005)** | $**(6988507)** |
| **Stock based compensation** | **-** | **-** | **6183** | **-** | **6183** |
| **Cashless exercise of warrants** | **14567** | **14** | **(14)** | **-** | **-** |
| **Net loss** | **-** | **-** | **-** | **(854041)** | **(854041)** |
| **Balance - September 30, 2023** | **521175** | $**521** | $**32331160** | $**(40168046)** | $**(7836365)** |
| **Nine Months Ended September 30, 2022** | **Nine Months Ended September 30, 2022** | **Nine Months Ended September 30, 2022** | **Nine Months Ended September 30, 2022** | **Nine Months Ended September 30, 2022** | **Nine Months Ended September 30, 2022** |
|  |  |  | **Additional** |  |  |
|  | **Common Stock** | **Common Stock** | **Paid-in** | **Accumulated**  |  |
|  | **Shares** | **Amount** | **Capital** | **Deficit** | **Total** |
| Balance - December 31, 2021 | 436125 | $436 | $31369036 | $(35467361) | $(4097889) |
| Stock based compensation |  |  | 923 |  | 923 |
| Warrants issued |  |  | 148334 |  | 148334 |
| Net loss |  |  |  | (868234) | (868234) |
| **Balance - March 31, 2022** | **436125** | $**436** | $**31518293** | $**(36335595)** | $**(4816866)** |
| Stock based compensation |  |  | 51708 |  | 51708 |
| Warrants issued |  |  | 210816 |  | 210816 |
| Cashless exercise of warrants | 11470 | 11 | (11) |  |  |
| Net loss |  |  |  | (833200) | (833200) |
| **Balance - June 30, 2022** | **447595** | $**447** | $**31780806** | $**(37168795)** | $**(5387542)** |
| Exercise of stock options | 5668 | 6 | 16994 |  | 17000 |
| Stock based compensation |  |  | 90550 |  | 90550 |
| Net loss |  |  |  | (1087292) | (1087292) |
| **Balance - September 30, 2022** | **453263** | $**453** | $**31888350** | $**(38256087)** | $**(6367284)** |

---

See notes to unaudited financial statements.

---

| |
|:---|
| 6 |
| *[**Table of Contents**](#TOC)* |

---

---

| | | |
|:---|:---|:---|
| **INFINITE GROUP, INC.** | **INFINITE GROUP, INC.** | **INFINITE GROUP, INC.** |
| **STATEMENTS OF CASH FLOWS (Unaudited)** | **STATEMENTS OF CASH FLOWS (Unaudited)** | **STATEMENTS OF CASH FLOWS (Unaudited)** |
|  | **Nine Months Ended September 30,**  | **Nine Months Ended September 30,**  |
|  | **2023** | **2022** |
| **Cash flows from operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss | $**(1139028)** | $(2788725) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash provided (used) by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock based compensation | **32343** | 143181 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | **175859** | 178471 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discount | **768547** | 453892 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of common stock expensed for services | **18817** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Decrease) / (increase) of accounts receivable allowance | **(4018)** | 5000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foregiveness of debt | **(95131)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Increase) decrease in assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | **208860** | 136472 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | **(125830)** | 38139 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase (decrease) in liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | **(64953)** | 757007 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | **(99311)** | 16593 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | **738340** | 352521 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued retirement | **8685** | 8345 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided (used) by operating activities** | **423180** | (699104) |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of property and equipment | **(2099)** | (969) |
| &nbsp;&nbsp;&nbsp;&nbsp;Sale of ERC claim | **1413294** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Capitalization of software development costs | **(169887)** | (165436) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided (used) by investing activities** | **1241308** | (166405) |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from notes payable | **600805** | 1171552 |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt issuance costs | **(58322)** | (166697) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of notes payable - related parties | **40000** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayment of ERC Claim Agreement | **(1662698)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayments of note payable-related parties | **(50000)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayments of note payable | **(548323)** | (249194) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the exercise of common stock options | **-** | 17000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided (used) by financing activities** | **(1678538)** | 772661 |
| **Net decrease in cash** | **(14050)** | (92848) |
| Cash - beginning of period | **23187** | 99432 |
| **Cash - end of period** | $**9137** | $6584 |
| **Supplemental Disclosures of Cash Flow Information:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash payments for interest | $**370524** | $91521 |
| **Non-cash investing and financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Warrant issued in conjunction with debts | $**107834** | $359150 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued via exercise of warrant | $**21** | $11 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued in conjunction with services | $**30** | $- |

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See notes to unaudited financial statements.

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**INFINITE GROUP, INC.**

**<u>Notes to Financial Statements - (Unaudited)</u>**

**Note 1. Basis of Presentation**

The accompanying unaudited financial statements of Infinite Group, Inc. ("Infinite Group, Inc." or the "Company") included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (U.S.) ("GAAP") for interim financial information and with instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. The December 31, 2022 balance sheet has been derived from the audited financial statements at that date but does not include all disclosures required by GAAP. The accompanying unaudited financial statements should be read in conjunction with the Company's audited financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the U.S. Securities and Exchange Commission (SEC). Results of operations for the three and nine months ended September 30, 2023, are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2023.

**Note 2. Management Plans - Capital Resources**

The Company reported net losses of $1,139,028 and $2,788,725 for the nine months ended September 30, 2023 and 2022, respectively, and stockholders' deficiencies of $7,836,365 and $6,864,214 at September 30, 2023 and December 31, 2022, respectively. The Company has a working capital deficit of approximately $7.8 million at September 30, 2023.

The Company's mission is to drive shareholder value by developing and bringing to market automated, cost effective, and innovative cybersecurity technologies. The Company's strategy is to build its business by designing, developing, and marketing IT security-based products and solutions that fill technology gaps in cybersecurity.

The Company's goal is to increase sales and generate cash flow from operations on a consistent basis. The Company's business plans require improving the results of its operations in future periods. The Company has renegotiated the terms of some certain obligations, using operational cash flow to pay down balances and extending terms, and provided financing with the issuance of new loans.

The Company plans to issue stock, restructure certain debt and anticipates significant growth of business.

The Company believes the capital resources generated by the improving results of its operations as well as cash available under its factoring line of credit and from additional related parties and third-party loans, if needed, provide sources to fund its ongoing operations and to support the internal growth of the Company. The Company may need to extend existing debt agreements in order to provide resources for other purposes. If the Company experiences significant growth in its sales, the Company believes that this may require it to increase its financing line, finance additional accounts receivable, or obtain additional working capital from other sources to support its sales growth.

The Company plans to continue to evaluate alternatives which may include continuing to renegotiate the terms of other notes, seeking conversion of the notes to shares of common stock and seeking funds to repay the notes. The Company continues to evaluate repayment of our remaining notes payable based on its cash flow.

As a result, for the foreseeable future, there is substantial doubt about the Company's ability to continue as a going concern.

**Note 3. Summary of Significant Accounting Policies**

There are several accounting policies that the Company believes are significant to the presentation of its financial statements. These policies require management to make complex or subjective judgments about matters that are inherently uncertain. Note 3 to the Company's audited financial statements for the year ended December 31, 2022 presents a summary of significant accounting policies as included in the Company's Annual Report on Form 10-K as filed with the SEC.

**Reclassifications** – It is the Company's policy to reclassify prior period amounts to conform with the current period presentation.

**Fair Value of Financial Instruments** - The carrying amounts reported in the balance sheets for cash, accounts receivable, accounts payable, and accrued expenses approximate fair value because of the immediate short-term maturity of these financial instruments. The carrying value of notes payable and convertible notes payable approximates the fair value based on rates currently available from financial institutions and various lenders.

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**Revenue**

The Company's total revenue recognized from contracts from customers was comprised of three major services: Managed support services, Cybersecurity projects, and Software. The categories depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. There were no material unsatisfied performance obligations at September 30, 2023 or 2022 for contracts with an expected original duration of more than one year. The following table summarizes the revenue recognized by the major services:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2023** | **2022** | **2023** | **2022** |
| Managed support services | $**1127707** | $1138418 | $**3376589** | $3343033 |
| Cybersecurity projects | **263562** | 283066 | **939563** | 909982 |
| Software | **316442** | 290728 | **939028** | 822759 |
| Total Revenue | $**1707711** | $1712212 | $**5255180** | $5075774 |

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*Managed support services*

Managed support services consist of revenue primarily from our subcontracts with Peraton for services to its end clients, principally a major establishment of the U.S. Government for which we manage one of the nation's largest physical and virtual Microsoft Windows environments.

We generate revenue primarily from these subcontracts through fixed price service and support agreements. Revenues are earned and billed weekly and are generally paid within 45 days. The revenues are recognized at time of service.

*Cybersecurity projects*

Cybersecurity projects includes performing cybersecurity assessments, testing and consulting as a CISO (Chief Information Security Officer).

Cybersecurity assessments and testing services are considered distinct performance obligations when sold stand alone or with other products. These contracts generally have terms of one year or less. For substantially all these contracts, revenue is recognized when the specific performance obligation is satisfied. If the contract has multiple performance obligations, the revenue is recognized when the performance obligations are satisfied. Depending on the nature of the service, the amounts recognized are based on an allocation of the transaction price to each performance obligation based on a relative standalone selling price of the products sold.

In substantially all agreements, a 50% to 75% down payment is required before work is initiated. Down payments received are deferred until revenue is earned. Upon completion of performance obligation of service, payment terms are 30 days.

*Software*

Software revenue includes the selling of licenses of Nodeware® and third-party software, principally Webroot™.

Nodeware and Webroot software offerings consist of fees generated from the use of the respective software by our customers. Revenue is recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer. For Webroot, substantially all customers are billed in the month of the service and is cancellable upon notice per the respective agreements. The majority of Webroot billing is electronic, and those billed amounts are paid to the Company instantaneously via an online payment platform. For Nodeware, billings generally occur annually or monthly in advance of services for clients with recurring subscriptions. In some instances, billing is made monthly in arrears based on actual consumption in the prior month. For payments made in advance, revenue related to the term associated with our software licenses is recognized ratably over the contractual period.

We generate revenue via fixed price service agreements. These are based on periodic billings of a fixed dollar amount for recurring services of a similar nature performed according to the contractual arrangements with clients. The revenues are recognized at time of service.

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Based on historical experience, the Company believes that collection is reasonably assured.

During the three and nine months ended September 30, 2023, sales to one client, including sales under subcontracts for services to several entities, accounted for 66% and 64%, respectively, of total sales, (67% and 66%, respectively, for the three and nine months ended September 30, 2022) and 33% of accounts receivable at September 30, 2023 (27% at December 31, 2022).

The balance of accounts receivable, net at January 1, 2022 was $727,297.

**Capitalization of Software for Resale**-The Company capitalizes the software development costs for software to be sold, leased, or otherwise marketed. Capitalization begins upon the establishment of technological feasibility of a new product or enhancements to an existing product, which is generally the completion of a working prototype that has been certified as having no critical bugs and is a release candidate. Costs incurred after the enhancement has reached technological feasibility and before it is released in the market are capitalized and are primarily labor costs related to coding and testing. Amortization begins once the software is ready for its intended use, generally based on the pattern in which the economic benefits will be consumed. Costs associated with major upgrade releases begin amortization in the month after release. The amortization period is three years. See Note 5 for further disclosure regarding capitalization of software for resale.

**Leases -**At contract inception, the Company determines whether the arrangement is or contains a lease and determines the lease classification. The lease term is determined based on the non-cancellable term of the lease adjusted to the extent optional renewal terms and termination rights are reasonably certain. Lease expense is recognized evenly over the lease term. Variable lease payments are recognized as period costs. The present value of remaining lease payments is recognized as a liability on the balance sheet with a corresponding right-of-use asset adjusted for prepaid or accrued lease payments. The Company uses its incremental borrowing rate for the discount rate, unless the interest rate implicit in the lease contract is readily determinable. The Company has adopted the practical expedients to not separate non-lease components from lease components and to not present short-term leases on the balance sheet. See Note 11 for further disclosure regarding lease accounting.

**Recently Adopted Accounting Guidance**- In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, "Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments", which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The adoption of this new accounting standard increased the reserve by approximately $21,600, which was deemed immaterial to adjust beginning accumulated deficit.

**Note 4. Sale of Certain Accounts Receivable**

The Company has available a financing line with a financial institution (the Purchaser), which enables the Company to sell accounts receivable to the Purchaser with full recourse against the Company. Pursuant to the provisions of FASB ASC 860, the Company reflects the transactions as a sale of assets and establishes an accounts receivable from the Purchaser for the retained amount less the costs and fees of the transaction and less any anticipated future loss in the value of the retained asset.

The retained amount is 10% of the total accounts receivable invoice sold to the Purchaser. The fee is charged at prime plus 3.6% (effective rate of 12.1% at September 30, 2023) against the average daily outstanding balance of funds advanced. The estimated future loss reserve for each receivable included in the estimated value of the retained asset is based on the payment history of the accounts receivable customer and is included in the allowance for doubtful accounts, if any. As collateral, the Company granted the Purchaser a first priority interest in accounts receivable and a blanket lien, which may be junior to other creditors, on all other assets.

The financing line provides the Company the ability to finance up to $2,000,000 of selected accounts receivable invoices, which includes a sublimit for one of the Company's customers of $1,500,000. During the nine months ended September 30, 2023, the Company sold approximately $3,118,000 ($3,098,000 – September 30, 2022) of its accounts receivable to the Purchaser. As of September 30, 2023, approximately $357,000 ($228,000 - December 31, 2022) of these receivables remained outstanding. Additionally, as of September 30, 2023, the Company had $28,000 available under the financing line with the Purchaser ($144,000 at December 31, 2022). After deducting estimated fees, allowance for expected credit losses and advances from the Purchaser, the net receivable from the Purchaser amounted to approximately $36,000 at September 30, 2023 ($23,000 at December 31, 2022), and is included in accounts receivable in the accompanying balance sheets.

There were no gains or losses on the sale of the accounts receivable because all were collected. The cost associated with the financing line totaled $18,563 for the three months ended September 30, 2023 ($15,822 – September 30, 2022). The cost associated with the financing line totaled $43,073 for the nine months ended September 30, 2023 ($38,128 – September 30, 2022). These financing line fees are classified on the statements of operations as interest expense.

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**Note 5**. **Capitalization of Software for Resale**

As of September 30, 2023, there was $1,063,914 of costs capitalized ($894,027 as of December 31, 2022) and $632,374 of accumulated amortization ($472,702 as of December 31, 2022). During the three and nine months ended September 30, 2023, there was $45,454 and $155,672, respectively, of amortization expense recorded ($53,402 and $160,205, respectively, for the three and nine months ended September 30, 2022). Costs incurred prior to reaching technological feasibility are expensed as incurred. During the three and nine months ended September 30, 2023, there was approximately $11,100 and $32,800, respectively, of labor amounts expensed related to these development costs ($13,400 and $29,500, respectively in 2022).

**Note 6. Deferred Revenue and Performance Obligations**

*Deferred Revenue*

Deferred revenue, which is a contract liability, consists primarily of payments received and accounts receivable recorded in advance of revenue recognition under the Company's contracts with customers and is recognized as the revenue recognition criteria are met.

Revenue recognized during the three months ended September 30, 2023 and 2022, that was included in the deferred revenue balances at the beginning of the respective periods, was approximately $187,000 and $201,600, respectively.

Revenue recognized during the nine months ended September 30, 2023 and 2022, that was included in the deferred revenue balances at the beginning of the respective periods was approximately $386,000 and $331,500, respectively. The balance of deferred revenue at January 1, 2022 was $497,734.

*Transaction Price Allocated to the Remaining Performance Obligations*

Transaction price allocated to the remaining performance obligations represents all future, non-cancelable contracted revenue that has not yet been recognized, inclusive of deferred revenue that has been invoiced and non-cancelable amounts that will be invoiced and recognized as revenue in future periods.

As of September 30, 2023, total remaining non-cancelable performance obligations under the Company's contracts with customers was approximately $870,000. The Company expects to recognize all but approximately $75,000 of this revenue over the next 12 months.

**Note 7. Debt Obligations**

**Mast Hill Loan #5 -** On February 3, 2023, Infinite Group, Inc. (the "Company"), as borrower, entered into a financing arrangement (the "Loan") with Mast Hill Fund, L.P. (the "Lender"), a Delaware limited partnership. In exchange for a promissory note, Lender agreed to lend the Company $118,000, which bears interest at a rate of eight percent (8%) per annum, less $11,800 original issue discount. Under the terms of the Loan, amortization payments are due beginning June 3, 2023, and each month thereafter with the final payment due on February 3, 2024. Additionally, in the event of a default under the Loan or if the Company elects to pre-pay the Loan, the Lender has the right to convert any portion or all of the outstanding and unpaid principal and interest into fully paid and non-assessable shares of the Company's common stock at a conversion price of $2.00 per share. The conversion price is subject to adjustment under certain circumstances, including issuances of Company common stock below the conversion price. The Company is not required to issue additional shares to Lender in the event an adjustment to the conversion price occurs. Except for the option to convert the note in the event of a pre-payment, there is no pre-payment penalty associated with the promissory note. The Loan is subject to customary events of default, including cross-defaults on the Loan agreements and on other indebtedness of the Company, violations of securities laws (including Regulation FD), and failure to issue shares upon a conversion of the note. Amounts due under the Loan are subject to a 15% penalty in the event of a default. As additional consideration for the financing, the Company issued Lender a 5-year warrant to purchase 59,000 shares of Company common stock at a fixed price of $2 per share, subject to price adjustments for certain actions, including dilutive issuances, representing 100% warrant coverage on the principal amount of the Loan. The Company has granted the Lender customary "piggy-back" registration rights with respect to the shares issuable upon conversion of the promissory note and exercise of the warrant. No material relationship exists between the Company or its affiliates and Lender, other than in respect of the Loan and similar loans between the Company and Lender entered into on November 3, 2021, February 11, 2022, May 31, 2022, and November 23, 2022, respectively. This loan was in default at September 30, 2023 and the amount of interest expense recorded as penalties during the three months and nine months ended September 30, 2023 were approximately $1,800 and $20,400, respectively.

J.H. Darbie & Co., Inc. ("Finder"), a registered broker-dealer, acted as a finder in connection with the Loan, and was paid a cash fee of $3,100 (2.92% of the gross proceeds of the Loan) and issued a 5-year warrant to purchase 3,098 shares of Company common stock at a fixed price of $2.40 per share (120% of the exercise price of the warrant issued in connection with the Loan), subject to price adjustments for certain actions, including dilutive issuances, representing 7% warrant coverage on the gross proceeds of the Loan. The Company has granted the Finder customary "piggy-back" registration rights with respect to the shares issuable upon exercise of the warrant.

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**Amended and Restated Line of Credit Note -**On March 17, 2023, the Company, as borrower, entered into an Amended and Restated Line of Credit Note and Agreement (the "New Note") effective as of October 1, 2022, which amended and restated that certain Line of Credit Note and Agreement dated March 14, 2016 (the "Original Note") by and between the Company and James V. Leonardo (the "Holder"). The New Note has a principal amount of $250,000 (the 'Principal Amount") and accrues interest on the unpaid Principal Amount at a rate of ten percent (10%) per annum. Also on March 17, 2023, James Villa, the Company's Chief Executive Officer, entered into a personal guarantee with the Holder to personally guarantee the obligations of the Company under the New Note.

Under the terms of the New Note, the Company agreed to make a one-time payment of $16,667 for interest accrued on the Original Note for the four-month period covering June 2022 through September 2022 during the first quarter of 2023. The Company has also agreed to make quarterly interest payments of $6,250, commencing on December 31, 2022, and continuing through and including September 30, 2024. The quarterly payments were made for the first, second and third quarters of 2023.

**Revised Financing Arrangement** - During March 2023, the Company entered into a revised financing arrangement with Celtic Bank which originally loaned the Company $139,400 with a one-time fixed loan fee of $11,152 for a total obligation of $150,552 in 2022. Under the terms of the revised financing arrangement, the lender loaned the Company $155,800 with a one-time fixed loan fee of $12,464 for a total obligation of $168,264. The balance of the original loan of $27,559 was paid to the lender as part of the revised financing agreement. The lender payments became due on March 24, 2023, and consisted of 30% of the Company's receivables processed through Stripe, Inc.'s payment processing platform and then due and owing to the Company or $18,696 over a sixty-day period, whichever is higher, with the final payment due on September 14, 2024. At September 30, 2023, the balance of this revised financing arrangement was $45,025.

**Extinguishment of Convertible Promissory Note**- On April 12, 2023, the Company entered into an agreement with Talos Victory Fund to accept final payment in the amount of $200,000 on the convertible promissory note dated April 12, 2022. The debt was forgiven at that time and approximately $95,000 was recorded as forgiveness of debt in the accompanying Statements of Operations.

**Payment to Board Member**– On April 11, 2023, the Company paid off a demand note to one board member. The payment was for $30,000 plus $2,891 of accrued interest.

**Obligations in Default**– As of September 30, 2023, the Company is in default with the Mast Hill financing arrangements dated November 3, 2021, February 11, 2022, May 31, 2022, November 23, 2022 and February 3, 2023. Per the arrangements, the Company has accrued approximately $40,000 and $387,000 in default and penalty interest expense during the three months and nine months ended September 30, 2023, respectively.

**Related Party Note**- On July 13, 2023, Donald Reeve, Chairman of the Board, and the Company, entered into a short term note wherein the Company borrowed $40,000 from Mr. Reeve. Interest will accrue monthly at a rate of 10% per annum. The note was due in full with interest on August 14, 2023 and has been extended to a new term date of September 13, 2023. This note remains outstanding as of September 30, 2023.

**Business Loan Agreement**- On August 23, 2023, the Company, as borrower, entered into a business loan arrangement (the "Loan") with WebBank (the "Lender"). In exchange for the Loan, Lender agreed to lend the Company $150,000.00, with a payment plan of $2,671.15 per week for 78 weeks effective August 28, 2023. The effective interest rate of the Loan is 46.8%. If Loan is prepaid, the unpaid portion of the finance charge of $58,350 will be due to Lender.

**Financing and Security Agreement**- On September 14, 2023, the Company, as borrower, entered into a Financing and Security Agreement ("Agreement") with Celtic Bank Corporation (the "Celtic"). In exchange for a line of credit ("LOC"), Celtic agreed to lend the Company $200,000, with a payment plan of $20,892.15 per month for 12 months effective October 16, 2023. The annual percentage rate of the LOC is 48.4%, If LOC is prepaid, the unpaid interest accrued will be due to Celtic. If an additional draw on the LOC is requested, a draw fee will be imposed.

**Note 8. Earnings per Share**

Basic earnings per share is based on the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share is based on the weighted average number of common shares outstanding, as well as dilutive potential common shares which, in the Company's case, comprise shares issuable under convertible notes payable and stock options. The treasury stock method is used to calculate dilutive shares, which reduces the gross number of dilutive shares by the number of shares purchasable from the proceeds of the options and warrants assumed to be exercised. In a loss period, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive.

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The following table sets forth the computation of basic and diluted net profit (loss) per share for the three and nine months ended September 30, 2023:

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|  | **Three Months Ended** <br>**September 30,** | **Three Months Ended** <br>**September 30,** | **Nine Months Ended** <br>**September 30,** | **Nine Months Ended** <br>**September 30,** |
|  | **2023** | **2022** | **2023** | **2022** |
| Numerator for basic net loss per share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss | $**(854041)** | $(1087292) | $**(1139028)** | $(2788725) |
| Net loss per share - basic | $**(1.65)** | $(2.41) | $**(2.30)** | $(6.28) |
| Numerator for diluted net loss per share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss | $**(854041)** | $(1087292) | $**(1139028)** | $(2788725) |
| Net loss per share - diluted | $**(1.65)** | $(2.41) | $**(2.30)** | $(6.28) |
| Weighted average common shares outstanding |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | **517533** | 451345 | **494799** | 443901 |
| Weighted average common shares outstanding |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | **517533** | 451345 | **494799** | 443901 |
| Anti-dilutive shares excluded from |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;per share calculations | **462035** | 311977 | **462035** | 311977 |

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Certain common shares issuable under stock options and convertible notes payable have been omitted from the diluted net loss per share calculation because their inclusion is considered anti-dilutive because the exercise prices were greater than the average market price of the common shares or their inclusion would have been anti-dilutive.

**Note 9. Stock Option Plans and Agreements**

At the annual meeting of stockholders of the Company held on January 26, 2022; the Company's stockholders voted to approve the Company's 2021 Equity Incentive Plan ("2021 Plan"). The maximum number of shares of Common Stock available for grant and issuance under the 2021 Plan will be (a) 60,000, plus (b) any shares of Common Stock that are subject to options granted under the Prior Plans that expire, are forfeited or canceled or terminate for any other reason without the issuance of shares under the Prior Plans on or after January 26, 2022, plus (c) any shares of Common Stock that are subject to options granted under the Prior Plans that are used to pay the exercise price of an option or withheld to satisfy the tax withholding obligations related to any option under the Prior Plans on or after January 26, 2022.

The Company has approved stock options plans and agreements covering up to an aggregate of 249,113 shares of common stock. Such options may be designated at the time of grant as either incentive stock options or nonqualified stock options. Stock based compensation consists of charges for stock option awards to employees, directors and consultants.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. 67,600 options were granted during the nine months ended September 30, 2023. 1,403 options were granted during the nine months ended September 30, 2022. The following assumptions were used for the nine months ended September 30, 2023:

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| Risk-free interest rate | 3.57% - 4.65 |
| Expected dividend yield | 0% |
| Expected stock price volatility | 100% - 110 |
| Expected life of options (years) | **2.75 – 2.87** |

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The Company recorded expense for options issued to employees and independent service providers of $6,184 and $32,343 for the three and nine months ended September 30, 2023, respectively, and $91,153 and $143,784, for the three and nine months September 30, 2022, respectively.

42,600 options vested during the nine months ended September 30, 2023.

The Company issued 10,000 performance-based stock options during the three months ended September 30, 2023 at $1.00 per share to two employees of the Company. Certain bookings and project targets must be made for the options to vest. These options have not vested as of September 30, 2023. The unrecognized compensation expense for these options is approximately $6,300 at September 30, 2023. These options subsequently expired during the year ended December 31, 2024.

A summary of all stock option activity for the nine months ended September 30, 2023 follows:

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|:---|:---|:---|:---|:---|
|  | **Number of**<br>**Options**<br>**Outstanding** | **Weighted**<br>**Average**<br>**Exercise Price** | **Remaining**<br>**Contractual**<br>**Term** | **Aggregate**<br>**Intrinsic**<br>**Value** |
| Outstanding at December 31, 2022 | 131789 | $6.03 |  |  |
| Granted | 67600 | 1.14 |  |  |
| Expired | (41470) | 8.76 |  |  |
| Outstanding at September 30, 2023 | 157919 | $3.23 | 2.8 years  | $0.00 |
| At September 30, 2023- vested or |  |  |  |  |
| expected to vest | 147919 | $3.38 | 2.7 years  | $0.00 |
| Exercisable | 147919 | $3.38 | 2.7 years  | $0.00 |

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**Note 10. Warrants**

During the three and nine months ended September 30, 2023, warrants were exercised, resulting in 14,567 and 21,082 shares of common stock, respectively, being issued.

**Note 11. Lease**

Beginning on June 1, 2022, the Company leases its headquarters facility under an operating lease agreement that expires on May 31, 2029. Rent due is $118,487 annually during the first year of the lease term,and increases by 2.0% annually thereafter.

Upon entering the lease agreement, the Company recognized a right-of-use asset of $691,009 and a lease liability of $691,009.

Supplemental balance sheet information related to the lease on September 30, 2023 and December 31, 2022 is as follows:

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| <br>**Description** | <br>**Classification** | **September 30,**<br>**2023** | **December 31,**<br>**2022** |
| Right of Use Asset – Lease, net | Other assets (non-current) | $583503 | $645095 |
| Operating Lease liability – Short-term | Accrued liabilities | 82798 | 76826 |
| Operating Lease liability – Long-term | Other long-term liabilities | 509723 | 572560 |
| Total operating lease liability |  | $592521 | $649386 |
| Discount rate – operating lease |  | 7.00% | 7.00% |

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Maturities of operating lease liabilities as of September 30, 2023 were as follows:

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|:---|:---|
| 2023 (for the remaining 3 months) | $30214 |
| 2024 | 122280 |
| 2025 | 124722 |
| 2026 | 127205 |
| 2027 | 129761 |
| 2028 and thereafter | 187939 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total lease payments | $722121 |
| Less: imputed interest | (129600) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $592521 |

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**Note 12. Related Party Accrued Interest Payable**

Included in accrued interest payable are amounts due to related parties of approximately $370,000, at September 30, 2023 ($299,000 at December 31, 2022).

**Note 13. Subsequent Events**

On October 13, 2023, the Company received funding from a loan agreement with Stripe and Celtic Bank. The loan amount was $140,200 plus a fixed fee of $16,403. The repayment amount of $156,603 will be repaid at a repayment rate of 20% of the Company's receivables automatically withheld by Stripe. There is no financing percentage. The repayment start date was October 19, 2023, with a minimum payment amount of $17,400 over every 60-day period. The final repayment date is April 11, 2025. This loan agreement also eliminates the remaining balance of $35,754 from the previous Stripe loan dated March 16, 2023, as the remaining balance was rolled into this new loan.

On December 15, 2023, the Company, as borrower, entered into a Sale of Future Receipts Agreement with Fresh Funding Solutions, Inc. ("Fresh"). The Company is selling a portion of a future revenue stream to Fresh at a discount. The purchase price paid to the Company was $120,000. The net amount funded to the Company was $118,765 net of fees with a payment plan of $3,250 per week for 48 weeks. In October 2024, Fresh Funding forgave the remaining payments on the subordinated business loan for $64,750. This forgiveness of debt resulted in a loss of approximately $1,500.

Beginning on February 1, 2024, the Company renegotiated its headquarters facility lease. The square footage was reduced from 7,181 to 3,400 square feet. The operating lease agreement will continue to expire on May 31, 2029. Rent due is $5,052 through May 31, 2024 and will increase by 1.9% annually thereafter. This compares to $10,072 per month under the previous agreement.

On February 16, 2024, the Company received funding from a future receivables purchase agreement with UFS West LLC. The purchase price amount was $150,000 with a fixed fee of $4,500. A payment plan of $5,824 per week for 34 weeks effective February 23, 2024. The effective interest rate of the agreement is 87.5%. In August 2024, UFS West LLC forgave the remaining payments on the loan for $51,500. This forgiveness of debt resulted in a gain of approximately $29,900.

On March 8, 2024, the Company received funding from a subordinated business loan and security agreement with Agile Lending, LLC. The term loan amount was $185,500 with a fixed fee of $10,500. A payment plan of $11,285 per week for 24 weeks effective March 18, 2024. The effective interest rate of the agreement is approximately 170%. In August 2024, Agile Lending LLC forgave the remaining payments on the subordinated business loan for $60,000. This forgiveness of debt resulted in a gain of approximately $43,600.

On April 3, 2024. The Company formed Nodeware Inc. in the state of Delaware. It is a wholly owned subsidiary to support Nodeware's go to market.

On May 22, 2024, the Company formed Nodeware Inc. in the state of Nevada. It is a wholly owned subsidiary to support the Company's Nodeware solution.

On June 4, 2024, the Company received funding from a loan agreement with Stripe and Celtic Bank. The loan amount was $150,500 plus a fixed fee of $17,157. The repayment amount of $167,657 will be repaid at a repayment rate of 20% of the Company's receivables automatically withheld by Stripe. There is no financing percentage. The repayment start date was June 11, 2024, with a minimum payment amount of $18,629 over every 60-day period. The final repayment date is December 3, 2025, if total repayment amount is not paid as of that date. This loan agreement also eliminates the remaining balance of $33,815 from the previous Stripe loan dated October 11, 2023, as the remaining balance was rolled into this new loan.

On August 16, 2024, the Company entered into an amended and restated loan and security agreement (the "Agreement"), dated as of August 16, 2024, by and between the Company and the Company's President's brother, Harry Hoyen (the "Lender"), pursuant to which the Company may borrow up to an aggregate amount of $2,000,000 (the "Loan") at 8% per annum. Pursuant to the Agreement, on August 16, 2024, the Company borrowed $1,200,000 from the Lender and issued to the Lender a secured promissory note evidencing such portion of the Loan having a maturity date of August 16, 2028. The Agreement's payment plan is for 48 payments of $52,500 per month.

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Commencing on September 1, 2024, the Company may borrow up to an additional $800,000 from the Lender to be evidenced by secured promissory notes. Additional amounts of $80,000, $70,000, $555,000 and $50,000 were borrowed on October 15, 2024, October 16, 2024, November 13, 2024, and October 27, 2025, respectively.

On September 30, 2024, the Company did not make the scheduled payment due under its financing agreement with the Lender, resulting in a technical default under the terms of the agreement as well as violating several other loan covenants. The payment default and violated covenants have been waived by the Lender through November 15, 2026.

In September 2024, CAN Capital LLC (successor to a WebBank loan dated August 23, 2023) forgave the remaining payments on the subordinated business loan for $60,295. This forgiveness of debt resulted in a gain of approximately $12,800.

In October 2024, Celtic Bank Corporation forgave the remaining payments on the subordinated business loan for $93,381. This forgiveness of debt resulted in a gain of approximately $45,200.

On December 6, 2024, ASM Technologies Division LLC. was organized in the state of Delaware.

On January 1, 2025, Infinite Group Inc. was admitted as the initial member with 100% of the membership interests in ASM Technologies Division LLC.

On March 12, 2025, the Company received funding from a loan agreement with Stripe and Celtic Bank. The loan amount was $241,500 plus a fixed fee of $23,667. The repayment amount of $265,167 will be repaid at a repayment rate of 30% of the Company's receivables automatically withheld by Stripe. There is no financing percentage. The repayment start date was March 17, 2025, with a minimum payment amount of $29,463 over every 60-day period. The final repayment date is September 8, 2026, if the total repayment amount is not paid as of that date. This loan agreement also eliminates the remaining balance of $30,029 from the previous Stripe loan dated June 3, 2024, as the remaining balance was rolled into this new loan.

On March 12, 2025, Infinite Group, Inc. (the "Company") entered into an Asset Purchase Agreement (this "Agreement") with Opti9 Technologies LLC, a Delaware limited liability company ("Buyer") for the sale of assets related to the division of business known as the Ace Server Management division. Under this division the Company provides IT managed infrastructure services, to a US government agency as a subcontractor to Peraton Enterprise Solutions LLC (f/k/a Perspecta Enterprise Solutions LLC ("Peraton"))

The purchase price was $7,500,000 plus the assumption of liabilities under the contract with Peraton going forward, and subject to customary adjustments prior to closing. The purchase price was to be funded by immediately available funds at the closing. The Agreement contemplated payment of a number of third-party creditors which proceeds will be applied at the closing.

The closing was expected to take place in June 2025. The closing of the transaction was subject to customary conditions, including, among other things, (i) approval by the Company's stockholders; (ii) consent of Peraton; (iii) consent of a number of the Company's debtholders; (iv) no temporary or permanent judgment issued by any governmental entity of competent jurisdiction or law or other legal restraint or prohibition preventing or prohibiting the consummation shall be in effect; (v) that no event or circumstance with a material adverse effect on the Ace server management business division shall have occurred; and, (vi) other customary conditions for a transaction of this nature.

The Agreement contained representations, warranties and covenants of the parties customary for a transaction of this type, including a 4 year non-competition covenant from competing with the Buyer in providing services to the U.S. government agency that was subject of the Peraton subcontract, and providing 24x7x365 Windows and/or Linux operating system and hardware support and monitoring services to other parties.

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Concurrently with the execution of the Agreement, certain stockholders were to enter into voting agreements (the "Voting Agreements") with Buyer. Pursuant to the terms of the Voting Agreements, these stockholders were to agree to vote their shares in favor of the transaction and the Company's upcoming stockholders meeting, to not solicit any other acquisition proposals and to vote their shares against any competing acquisition proposals. The shares subject to the Voting Agreements comprised approximately 28% of all outstanding shares. The Voting Agreements would terminate in certain circumstances, including upon termination of the Agreement.

The Company planned to present the transaction for the sale of these assets for approval at its upcoming annual meeting of stockholders tentatively scheduled for June 4, 2025.

On April 22, 2025, the Company received verbal communication from Peraton that the ASM contract was to be cancelled for convenience on May 17, 2025.

On May 8, 2025, the Company received a request in writing to answer an RFP that would retain certain employees of the Company that previously provided service under the ASM contract and would move the Company to a time and materials subcontract with Peraton serving the US government agency.

During April and May 2025, the Company executed layoffs constituting a material reduction in the workforce because of this change. During 2025,the Company received task orders and executed time and materials subcontracts with Peraton to retain certain employees serving the US Government agency.

On July 31, 2025, the Company received a notice of termination of the Asset Purchase Agreement.

On August 15, 2025, the Company received funding from Business Loan and Security Agreement with WebBank. The funding provided was $150,000 with a fixed fee of $3,000. A payment plan of $2,558 per week for 78 weeks effective August 21, 2025. The effective interest rate of the agreement is 42.6%.

On September 23, 2025, the Company received funding from a business installment loan with OnDeck Capital, LLC. The funding provided was $200,000 with a fixed fee of $5,000. A payment plan of $3,844 per week for 78 weeks effective September 30, 2025. The effective interest rate of the agreement is 61.6%.

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**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

This discussion contains forward-looking statements, the accuracy of which involves risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons including, but not limited to, those discussed under the heading "Forward Looking Statements" above and elsewhere in this report. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our financial statements and the notes thereto appearing elsewhere in this report.

**Overview**

***Impact of COVID-19***

The COVID-19 pandemic has resulted, and is likely to continue to result, in economic disruption on a global basis. It has already changed traditional global travel and supply chains and adversely impacted global commercial activity. Considerable uncertainty still surrounds COVID-19 and its potential long-term economic effects, as well as the effectiveness of any responses taken by government authorities and businesses. While the travel restrictions, limits on hours of operations and/or closures of non-essential businesses, and other efforts to curb the spread of COVID-19, have been generally lifted, there continues to be a disruption in business activity globally. New strains and variants of the coronavirus continue to spread around the world. The rollout of vaccines around the globe is encouraging, but their long-term impact on the political environment, business environment, and the Company is still uncertain.

During 2023, our managed support services, cybersecurity projects and software revenues were minimally impacted by the impact of the COVID-19 pandemic on our customers' operational priorities. We are continuing to adapt our operations to meet the challenges of these changing priorities. While employees at our headquarters are physically present in the office, other locations have had to go fully remote due to the changing nature of IT work during the pandemic. Our sales and marketing expenses increased significantly during the first three quarters of 2023, and we expect these expenses to continue to grow. We will continue to actively monitor the nature and extent of the impact to our business, operating results, and financial condition.

**Our Business**

Headquartered in Pittsford, New York, Infinite Group is a developer of cybersecurity software and related cybersecurity consulting, advisory, and managed information security services. We principally sell our software and services through indirect channels such as Managed Service Providers ("MSPs"), Managed Security Services Providers ("MSSPs"), agents and distributors and government contractors, whom we refer to collectively as our channel partners. We also sell directly to end customers.

We believe our ability to succeed depends on how successful we are in differentiating ourselves in the cybersecurity market at a time when competition and consolidation in these markets are on the rise. Our strategy to differentiate our cybersecurity software and services from our competitors is to combine customized software and professional services, and grow our business by designing, developing, and marketing cybersecurity software-as-a-service ("SaaS") solutions that can be deployed in myriad environments. Software and services are initially developed in our wholly-owned subsidiary, IGI CyberLabs ("CyberLabs"), to fill technology gaps we identify, and then we bring these software and services to market through our existing channel partner and customer relationships. Our software and services are designed to simplify and manage the security needs of our customers and channel partners in a variety of environments. We focus on the small and medium-sized enterprises market. We support our channel partners by providing recurring-revenue business models for both services and through our cybersecurity SaaS solutions. Products may be sold as standalone solutions or integrated into existing environments to further automate the management of cybersecurity and related IT functions.

As part of these software and service offerings we:

Internally developed and brought to market Nodeware®, a patented SaaS solution that automates network asset identification, and cybersecurity vulnerability management and monitoring. Nodeware simply and affordably enhances security by proactively identifying, monitoring, and addressing potential cybersecurity vulnerabilities on networks, which creates enhanced security to safeguard against hackers and ransomware. Nodeware provides an economical solution for small and medium-sized enterprises as compared to more costly solutions focused on enterprise-sized customers and is designed to accommodate the varying network needs of our end customers' organizations and networks. Nodeware's flexibility allows it to span from a single network to several subnetworks, as well as accommodating larger, more complex organizations with more advanced network needs. Nodeware is sold as a SaaS solution and continuously releases enhancements, updates, and upgrades to stay current with security needs and changes in the market. Nodeware is also designed to be integrated into other technology platforms. We primarily sell Nodeware through our channel partners, with a small percentage being sold directly to end customers. We intend to continue to develop our intellectual property to serve as the core to our proprietary software and services. In addition to our proprietary software and services we also act as a master distributor for other cybersecurity software, principally Webroot a cloud-based endpoint security platform solution, where we market to and provide support for over 250 channel partners across North America;

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Provide cybersecurity consulting and advisory services to channel partners and direct customers across different markets, including banking, manufacturing, supply chain, and technology. As part of our consulting and advisory services, we are contracted to support existing information technology and executive teams at both the customer and channel partner level and provide security leadership and guidance. We validate overall corporate and infrastructure cybersecurity with the goal of maintaining and securing the integrity of confidential client information, preserving the continuity of services, and minimizing potential data damage from threats and incidents; and

Provide managed support services related to information security, principally as a subcontractor for Peraton, a large information technology provider and U.S. government contractor, by providing in-depth troubleshooting, backend analysis, and technical and security support, commonly referred to as Level 2 support, for mission critical technical infrastructure from the server level to the end user interface application in a critical government environment.

**Business Strategy**

We have a threefold business strategy composed of:

- providing differentiated cybersecurity software and services to small to mid-sized enterprises who lack the internal resources to focus on cybersecurity related matters by combining customized software and professional services;

- designing, developing, and marketing cybersecurity SaaS solutions, including Nodeware; and

- identifying other cybersecurity companies to acquire as part of a strategic roll-up strategy.

We believe our ability to succeed depends on how successful we are in differentiating ourselves in the market at a time when competition and consolidation in these markets is on the rise.

Our software and services are designed to simplify the security needs of our customers and channel partners, with a focus on the small to mid-sized enterprises, and we believe our ability to integrate our product and service offerings differentiates them from our competitors. In addition, we support our channel partners by providing recurring -revenue business models for both services and our cybersecurity SaaS solutions.

Cybersecurity is a constantly evolving field, so we devote significant efforts in developing proprietary software and services to meet our customer and channel partners' evolving needs. These efforts have resulted in the development of our patented and patent-pending Nodeware solution. We expect to continue to make significant investments in developing other intellectual property to serve as the core to other proprietary software and services.

Historically, a significant portion of our revenues has been derived through our managed support services, however, we believe our cybersecurity SaaS solutions, including Nodeware, present an opportunity for significant growth. We believe that Nodeware's ability to be deployed across a wide variety of networks and the ability to integrate it into existing and new cybersecurity solutions, will allow us to significantly grow this segment of our business. Similarly, we believe Nodeware's SaaS recurring revenue business model and its flexibility as a standalone or integrated solution makes it an attractive part of our channel partners' portfolio of products. Accordingly, in 2022 we made significant investments in IGI and CyberLabs sales and marketing to grow our team of cybersecurity sales and technical consultants. As a result, we believe we are seeing the pipeline growth expected from focused efforts, which we anticipate will convert to revenue growth in 2023.

We believe the market for cybersecurity services for small and medium-sized enterprises is fragmented and does not currently meet the needs of this customer base. The market is fragmented and is beginning to consolidate, which is why we are seeking to strategically acquire other cybersecurity technology and services companies.

The following sections define specific components of our business strategy.

***Nodeware®***

In May 2016, we filed a provisional patent application for our proprietary product, Nodeware and launched it commercially in November 2016. In May 2017, we filed a utility patent application for Nodeware.

U.S. Patent No. 10,999,307, was issued on May 4, 2021, for NETWORK ASSESSMENT SYSTEMS AND METHODS THEREOF U. S. Patent Application Serial No. 15/600,297, filed May 19, 2017, claiming priority of U.S. Provisional Patent Application Serial No. 62/338,904, filed May 19, 2016.

Nodeware is an automated asset identification and vulnerability management and monitoring solution that enhances security by proactively identifying, monitoring, and addressing potential vulnerabilities on both internal and external facing networks, creating a safeguard against malicious intent to exploit known problems in a customer's network with simplicity and affordability. Nodeware assesses vulnerabilities in a computer network using scanning technology to capture a comprehensive view of the security exposure of a network infrastructure. Users receive alerts and view network information through a proprietary, web enabled dashboard. Continuous and automated internal scanning and external on demand scanning are components of this offering.

The Cloud based SaaS platform has an agile and continuous development process that is flexible to react to customer and market needs. In December 2019, we filed a second provisional patent application and in December 2020 we filed the subsequent action on the institutional patent on the Nodeware platform. In 2020 and 2021, we created many new feature updates and improvements to the platform in response to COVID-19 needs and impact such as a downloadable Windows executable version along with Windows, Mac, and Linux Agents that could be downloaded to a remote PC or server. A number of enhancements related to data management, threat intelligence, and user functionality were part of the 2020/21 continued evolution of Nodeware.

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Nodeware creates an opportunity for resellers, including managed service providers, managed security service providers, distributors, and value-added resellers to use a product that provides greater visibility into the network security of an organization. We sell Nodeware in the commercial sector through channel partners and agents. Since 2018, we have continued to expand our channel of direct resellers, which now includes Telarus, SYNNEX, and Staples.

In June 2021, we created IGI CyberLabs, LLC, a wholly owned subsidiary to support our Nodeware solution and continued software development. Cyberlabs' overarching mission is to drive sales of our Nodeware Cloud security platform, which will drive monthly and annualized recurring revenue. CyberLabs will also drive product and platform enhancements in Nodeware and continue to enhance our rapid scale Go-to-Market capabilities. Additionally, CyberLabs is chartered with development of cloud and SaaS cybersecurity related products that will be brought to market through our growing channel relationships.

***Intellectual Property***

We believe that our intellectual property is an asset that will contribute to the growth and profitability of our business. We rely on a combination of patented, patent-pending and confidentiality procedures, trademarks and contractual provisions to establish and protect our intellectual property rights in the United States and abroad. We intend to rely on both registration and common law protection for our trademarks.

In May 2016, we filed a provisional patent application for our proprietary product, Nodeware, and launched it commercially in November 2016. In May 2017, we filed a utility patent application for Nodeware: U.S. Patent No. 10,999,307, was issued on May 4, 2021, for NETWORK ASSESSMENT SYSTEMS AND METHODS THEREOF U.S. Patent Application Serial No. 15/600,297, filed May 19, 2017, claiming priority of U.S. Provisional Patent Application Serial No. 62/338,904, filed May 19, 2016. The patent will remain in effect for four years from the date of issue and may be extended for up to twenty years from the filing date. Therefore, the expiration date of the subject patent, assuming all milestones to extend are met, is July 19, 2037.

In December 2019, we filed a second provisional patent application and in December 2020 we filed the subsequent action on the patent on Nodeware. In 2020 and 2021, we created updates and improvements to the platform in response to COVID-19 needs and impact such as a downloadable Windows executable version along with Windows, Mac, and Linux Agents that could be downloaded to a remote PC or server. A number of enhancements related to data management, threat intelligence, and user functionality were part of these updates.

The efforts we have taken to protect our intellectual property may not be sufficient or effective. As a result of this uncertainty and overall significance to the financial statements, these costs have been expensed.

The U.S. patent system permits the filing of provisional and non-provisional patent applications. A non-provisional patent application is examined by the United States Patent and Trademark Office and can mature into a patent once that office determines that the claimed invention meets the standards for patentability.

Our current patent and trademark portfolio consists of a patent for the Nodeware solution and process for scanning for vulnerabilities and a pending patent covering the methodologies associated with identifying and cataloging the assets on or across any physical or cloud network, together with a registered trademark for the "Nodeware" name and other trademarks and tradenames associated with our company and products. We intend to continue to work to enhance our intellectual property position on the Nodeware solution and in other appropriate cybersecurity technology we generate.

***Technology and Product Development***

Our goal is to position our products and solutions to enable vertical and other Application Programming Interface (API) based integration, with other industry solutions. We have a technology and product development strategy aligned with our business strategy. We continue to identify other technical partners in the cybersecurity market to integrate Nodeware into, through either API or full stack integration.

***Cybersecurity Services***

We provide cybersecurity consulting services that include incident response, security awareness training, risk management, IT governance and compliance, security assessment services, penetration testing, and Chief Information Security Officer Team as a Service (CISOTaaS™) offerings to channel partners and direct customers across different vertical markets (banking, supply chain, manufacturing, healthcare, legal, etc.) in North America. Our cybersecurity projects leverage different technology platforms and processes such as Nodeware to create a living document that a customer can use to go forward on a path of continuous improvement for its overall Information security. We support both internal and external organizations with our cybersecurity overlay that allows us to stay agnostic in the process, especially for compliance while enabling the IT organization to address the issues discovered. We validate overall network security with the goal of maintaining the integrity of confidential client information, preserving the continuity of services, and minimizing potential data damage from attempted threats and incidents. We continue to enhance our cybersecurity services when opportunities materialize and as the market evolves.

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**Results of Operations**

**Comparison of the Three and Nine Months Ended September 30, 2023 and 2022**

The following tables compare our statements of operations data for the three and nine months ended September 30, 2023 and 2022. The trends suggested by this table are not indicative of future operating results.

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|  | Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, |
|  | 2023 | <br>As a % of<br>Sales | 2022 | <br>As a % of<br>Sales | 2023 vs 2022<br>Amount of<br>Change | % Increase<br>(Decrease) |
| Sales | $1707711 | 100.0% | $1712212 | 100.0% | $(4501) | (0.3)% |
| Cost of sales | 1005043 | 58.9 | 1060872 | 62.0 | (55829) | (5.3) |
| Gross profit | 702668 | 41.1 | 651340 | 38.0 | 51328 | 7.9 |
| General and administrative | 620180 | 36.3 | 529695 | 30.9 | 90485 | 17.1 |
| Selling | 665571 | 39.0 | 713173 | 41.7 | (47602) | (6.7) |
| Total cost and expenses | 1285751 | 75.3 | 1242868 | 72.6 | 42883 | 3.5 |
| Operating loss | (583083) | (34.1) | (591528) | (34.5) | 8445 | 1.4 |
| Interest expense (net) | (270958) | (15.9) | (495764) | (29.0) | 224806 | 45.3 |
| Other income | - | - | - | - | - | - |
| Net loss | $(854041) | (50.0)% | $(1087292) | (63.5)% | $233251 | 21.5% |
| Net loss per share - basic | $(1.65) |  | $(2.41) |  | $0.76 |  |
| Net loss per share - diluted | $(1.65) |  | $(2.41) |  | $0.76 |  |

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|  | Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, |
|  | 2023 | <br>As a % of<br>Sales | 2022 | <br>As a % of<br>Sales | 2023 vs 2022<br>Amount of<br>Change | % Increase<br>(Decrease) |
| Sales | $5255180 | 100.0% | $5075774 | 100.0% | $179406 | 3.5% |
| Cost of sales | 2969464 | 56.5 | 3241751 | 63.9 | (272287) | (8.4) |
| Gross profit | 2285716 | 43.5 | 1834023 | 36.1 | 451693 | 24.6 |
| General and administrative | 1617002 | 30.8 | 1746995 | 34.4 | (129993) | (7.4) |
| Selling | 2120046 | 40.3 | 1973755 | 38.9 | 146291 | 7.4 |
| Total cost and expenses | 3737048 | 71.1 | 3720750 | 73.3 | 16298 | 0.4 |
| Operating loss | (1451332) | (27.6) | (1886727) | (37.2) | 435395 | 23.1 |
| Interest expense (net) | (1445525) | (27.5) | (901998) | (17.8) | (543527) | (60.3) |
| Other Income | 1757829 | 33.4 | - | - | 1757829 | - |
| Net loss | $(1139028) | (21.7)% | $(2788725) | (54.9)% | $1649697 | 59.2% |
| Net loss per share - basic | $(2.30) |  | $(6.28) |  | $3.98 |  |
| Net loss per share - diluted | $(2.30) |  | $(6.28) |  | $3.98 |  |

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**Sales**

Our managed support service sales decreased by 1% from $1,138,418 during the three months ended September 30, 2022 to $1,127,707 during the corresponding period of 2023. For the nine month period ended September 30, managed support service sales increased 1% from $3,343,033 in 2022, to $3,376,589 for the same period in 2023. Managed support service sales comprised approximately 66% of our sales in three months ended September 30, 2023, and approximately 66% for the same period in 2022. For the nine months ended September 30, managed support service sales comprised approximately 64% of sales in 2023, and 66% for the same period in 2022. The change in our managed support service sales during the three and nine months ended September 30, 2023 was due to additional projects requested by Periton earlier in the year, and the termination of smaller projects during the third quarter of 2023.

Our cybersecurity projects revenue decreased by 7%, from $283,066 for the three months ended September 30, 2022, to $263,562 for the same period ended September 30, 2023. For the nine months ended September 30, 2023, cybersecurity projects increased 3% to $939,563 from $909,982 in the same prior year period. These changes were due to the timing of the completion of the engagements.

Software sales, which includes the selling of licenses of Nodeware and third-party software Webroot, increased by 9% from the three months ended September 30, 2022 to the same period in 2023. Sales for the period in 2022 were $290,728 and increased by $25,714 to $316,442 for the same period in 2023. For the nine months ended September 30, 2022 and 2023, sales were $822,759 and $939,028, respectively, for an increase of 14%. The increase was primarily attributable to improving sales of Nodeware, and slightly offset by decreasing sales of Webroot. We have expended significant sales and marketing resources on Nodeware in 2023, while concurrently diverting resources from Webroot. We expect this trend to continue throughout 2023 as we focus our resources on Nodeware.

**Cost of Sales and Gross Profit**

Cost of sales principally represents compensation expense for our employees. Cost of sales decreased by 5% to $1,005,043 during the three months ended September 30, 2023 from $1,060,872 during the corresponding period of 2022. For the nine month periods ended September 30, 2022 and 2023, cost of sales decreased from $3,241,751 in 2022 to $2,969,464 in 2023; a decrease of 8%. The decrease in cost of sales during the three and nine months ended September 30, 2023 from 2022 was primarily due to a decrease in payroll and benefits of salaried employees who support our managed services and cybersecurity projects. This reduction of payroll was due to normal attrition without replacement. There was no impact on performance, as we were able to absorb the staff reduction with efficiency improvements to our processes and tools.

Our gross profit increased by $51,328 for the three months ended September 30, 2022 to 2023, from $651,340 to $702,668. For the nine months ended September 30, 2023, gross profit of $2,285,716 represents a 25% increase over gross profits for the same period in 2022 of $1,834,023. The increase was due to the combination of increased sales and the decrease in salary and benefits previously referenced above.

**General and Administrative Expenses**

General and administrative expenses include corporate overhead such as compensation and benefits for executive, administrative and finance personnel, rent, insurance, professional fees, travel, and office expenses. General and administrative expenses of $620,180 for the three months ended September 30, 2023 increased approximately 17% from $529,695 for the same quarter of 2022. For the nine months ended September 30, 2023, general and administrative expenses were $1,617,002, down from $1,746,995 for the same period in 2022. The decrease was primarily due to the reduction in legal, accounting, and other related fees associated with the S-1 filing in 2022, with total year to date expenses in those categories down approximately $175,000 for the comparative nine month periods.

**Selling Expenses**

Selling expenses of $665,571 for the three months ended September 30, 2023 decreased approximately 7% from $713,173 for the same quarter of 2022. For the nine months ended September 30, 2023, selling expenses were $2,120,046; an increase of 7% over $1,973,755 for the same period in 2022. For the three month period, approximately $172,000 of the decrease was due to reductions in staffing and related benefits offset partially by increases in marketing spending of approximately $161,000. For the nine month period, approximately $491,000 of the increase was due to an increase in marketing spending, partially offset by reductions in staffing and related benefits of approximately $244,000.

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**Operating Loss**

For the three months ended September 30, 2023 and September 30, 2022, operating loss was $583,083 and $591,528, respectively, for an improvement in the loss by $8,445. For the nine months ended September 30, 2023 and September 30, 2022, the operating loss was $1,451,332 and $1,886,727, respectively. The improvement in our operating loss from the previous year is principally attributable to the growth of sales as referenced above, the reduction in cost of sales as referenced above, the reduction of general and administrative expenses as referenced above, partially offset by the increase in selling expenses as referenced above.

**Interest Expense**

Net interest expense of $270,958 for the three months ended September 30, 2023 decreased significantly from expense of $495,764 for the same quarter of 2022. For the nine months ended September 30, 2023, net interest expense of $1,445,525 represents an increase of $543,527 over the same period in 2022. The increase in interest expense is primarily attributable to the bridge loans entered into during 2022 and the first quarter of 2023 and penalty interest accrued on the defaulted loans of approximately $40,000 for the three months ended September 30, 2023 and approximately $387,000 for the nine months ended September 30, 2023.

**Other Income**

For the nine months ended September 30, 2023, other income included a one-time refund of taxes of $1,662,698 related to the approval of the Employee Retention Credit by the IRS as well as the gain of $95,131 related to debt forgiveness.

**Net Loss**

For the three months ended September 30, 2023, net loss was $854,041. For the same period in 2022, we showed a net loss of $1,087,292. For the nine months ended September 30, 2023 and September 30, 2022, the net loss was $1,139,028 and $2,788,725, respectively. The primary reasons for this approximate $347,000 improvement in the three month period was due to the initial recording of default interest in 2022 as well as less sales compensation versus 2022. For the nine month period the primary reason for the improvement was the one-time other income recognized during the three months ended June 30, 2023 associated with the Employee Retention Credit detailed in our prior quarterly report of Form 10-Q.

**Liquidity and Capital Resources**

At September 30, 2023, we had cash of $9,137 available for working capital needs and planned capital asset expenditures. At September 30, 2023, we had a working capital deficit of approximately $7.8 million and a current ratio of 0.06.

During 2023, our primary source of liquidity is cash provided by collections of accounts receivable and our factoring line of credit. We maintain an accounts receivable financing line of credit with an independent financial institution that allows us to sell selected accounts receivable invoices to the financial institution with full recourse against us in the amount of $2,000,000, including a sublimit for one major client of $1,500,000. This provides us with the cash needed to finance certain of our on-going costs and expenses. At September 30, 2023, based on eligible accounts receivable, we had $28,000 available under this arrangement. We expect sales during 2023 to generate additional accounts receivable eligible for factoring, that will support our operations. We pay fees based on the length of time that the invoice remains unpaid.

At September 30, 2023, we had current notes payable of $219,000 to related parties. $100,000 of this debt was due on January 1, 2023. A demand note for $20,000 has an interest rate of 10% and the remaining $99,000 are in the form of demand notes with an interest rate of 6%.

At September 30, 2023, we have current notes payable of approximately $1,804,000 to third parties, which includes convertible notes payable of approximately $150,000. Also included is $12,500 in principal amount of a note payable due on June 30, 2016 but not paid by then. This note was issued in payment of software we purchased in February 2016 and secured by a security interest in the software. To date, the holder has not taken any action to collect the amount past due on this note or to enforce the security interest in the software.

Also included in the current notes payable to third parties at September 30, 2023, are five bridge loans with Mast Hill Fund, L.P., for an aggregate of $1,511,801. All five loans bear interest at an original rate of 8% and are subject to a 12% default interest rate as well as a 15% penalty in the event of a .default. We used the proceeds from the bridge loans to substantially enhance marketing of our Nodeware solution, in order to significantly increase its growth.

Notes payable to third parties at September 30, 2023, also includes a loan balance with Celtic Bank for $200,000. This payment schedule of this loan is $20,892 per month starting October 14, 2023 for twelve months.

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Notes payable to third parties at September 30, 2023, also includes a loan balance with Celtic Bank for $45,025. This loan does not bear interest, and instead incurred a one-time fee of $12,464 at origination. The payments consist of 30% of the Company's receivables processed through Stripe, Inc.'s payment processing platform until the loan is repaid.

In the first nine months of 2023, a total of approximately $417,000 was recorded as deferred note costs. At September 30, 2023, the unamortized balance of the deferred note costs for all notes payable to third parties was approximately $115,000. See Notes 5 and 6 of the 2022 Audited Financial Statements for more information.

We entered into unsecured lines of credit financing agreements (the "LOC Agreements") with two related parties in previous years. The LOC Agreements provide for working capital of up to $100,000 through July 31, 2022 and $75,000 through January 2, 2023. At September 30, 2023, we had approximately $15,000 of availability under the LOC Agreements.

During 2021, we issued demand notes to three board members for $79,000 in total. The demand notes bear a 6% interest rate. The amount outstanding as of September 30, 2023 is $49,000.

We have approximately $1,055,000 of current maturities of long-term obligations to third parties. This is comprised of various notes including long-term notes to third parties of $265,000 due on January 1, 2018 (plus accrued interest of approximately $267,000), approximately $284,000 due on January 1, 2024, approximately $166,000 due August 24, 2024, $250,000 due September 30, 2024 and approximately $89,000 due in the next 12 months on an 18 month loan agreement ending on February 17, 2025.

At September 30, 2023, we have $659,300 of current maturities of long-term obligations to related parties. $270,000 was due on January 1, 2023, $25,000 was due June 30, 2023, $90,000 was due on July 31, 2023, and$274,300 is due January 1, 2024.&nbsp;&nbsp;&nbsp;&nbsp;

We plan to renegotiate the terms of the various notes payable, seek funds to repay the notes or use a combination of both alternatives. We cannot provide assurance that we will be able to repay current notes payable or obtain extensions of maturity dates for long-term notes payable when they mature or that we will be able to repay or otherwise refinance the notes at their scheduled maturities.

We have a note payable agreement for up to $500,000 with a related party. The note has an interest rate of 7.5% and is due on August 31, 2026. The balance is $499,000 at September 30, 2023.

The following table sets forth our cash flow information for the periods presented:

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| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2023** | 2022 |
| Net cash provided (used) by operating activities | $**423180** | $(699104) |
| Net cash provided (used) by investing activities | **1241308** | (166405) |
| Net cash provided (used) by financing activities | **(1678538)** | 772661 |
| Net decrease in cash | $**(14050)** | $(92848) |

---

**Cash Flows Provided by (Used in) Operating Activities**

Our operating cash flow is primarily affected by the overall profitability of our contracts, our ability to invoice and collect from our clients in a timely manner, and our ability to manage our vendor payments. We bill our clients weekly or monthly after services are performed as well as collect down payments depending on the contract terms. Our net loss of $1,139,028 for the nine months ended September 30, 2023 was offset by non-cash expenses and credits of $896,417. In addition, our net loss was offset by a decrease in accounts receivable and other assets of $83,030, an increase in accrued payroll, deferred revenue and other expenses payable of $647,714 and a decrease in accounts payable of $64,953 resulting in cash provided by operating activities of $423,180.

We are increasing our marketing of Nodeware to our IT channel partners who resell to their customers. We are making investments in our cyber security team for penetration testing, CISOTaaS and other services. Due to the lengthy lead times typically needed to generate these new sales, we expect a delay before realizing a return from our sales and marketing efforts, of one or more quarters. As a result, we may continue to experience operating income or operating losses from these resource expenditures until sufficient sales are generated. We expect to fund the cost for the new expenditures from our operating cash flows, the equity raise and incremental borrowings, as needed.

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**Cash Flows Provided by (Used in) Investing Activities**

During the nine months ended September 30, 2023, we received approximately $1,413,000 for the Risk Participation of ERC (Employee Retention Credit) Claim Agreement. We also incurred capital expenditures for computer hardware as well as software development labor for the enhancements to Nodeware. We expect to continue to invest in computer hardware and software to update our technology to support the growth of our business. We do not anticipate our continued investment to be significant in these two categories.

**Cash Flows Provided by (Used in) Financing Activities**

During the nine months ended September 30, 2023, we received $600,805 from various debt products, including a fifth Mast Hill Fund L.P. loan for $118,000, a one year loan from Celtic Bank for $193,160, a 78 week loan for $150,000 from CAN Capital, and a restructured loan with Celtic Bank for $139,645. We paid the ERC Claim with the amounts received from the IRS of $1,662,698, principal of $548,323 on short term debt and $50,000 of related party short term debt. There were debt issuance costs of $58,322 during the period.

**Credit Resources**

We maintain an accounts receivable financing line of credit from an independent financial institution that allows us to sell selected accounts receivable invoices to the financial institution with full recourse against us in the amount of $2,000,000, including a sublimit for one major client of $1,500,000. This provides us with the cash needed to finance certain costs and expenses. At September 30, 2023, we had financing availability, based on eligible accounts receivable, of approximately $28,000 under this line. We pay fees based on the length of time that the invoice remains unpaid. We also have approximately $16,000 of available credit under various lines of credit as of September 30, 2023.

During May 2019, we originated a line of credit note payable for a $500,000 with a related party and borrowed $499,000 and have $1,000 available to borrow for working capital. This agreement matures in August 2026.

During 2017, we originated two lines of credit with related parties totaling $175,000. At September 30, 2023, we had $15,000 available under these financing agreements which matured in January 2023 and July 2023, respectively.

We believe the capital resources available under our factoring line of credit, cash from additional related party loans and cash generated by improving the results of our operations will be sufficient to fund our ongoing operations for at least the next 12 months.

We anticipate financing growth from acquisitions of other businesses, if any, and our longer-term internal growth through one or more of the following sources: issuance of equity: cash from collections of accounts receivable; additional borrowing from related and third parties; use of our existing accounts receivable credit facility; or a refinancing of our accounts receivable credit facility.

**Item 3. Quantitative** a**nd Qualitative Disclosures About Market Risk**

As a smaller reporting company, we are not required to provide the information required by this Item.

**Item 4. Controls and Procedures**

<u>Evaluation of Disclosure Controls and Procedures.</u> Our management, with the participation of our chief executive officer and chief financial officer, carried out an evaluation of the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-15(e) and 15-d-15(e)) as of the end of the period covered by this report (the "Evaluation Date"). Based upon that evaluation, the chief executive officer and chief financial officer concluded that as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

<u>Changes in Internal Control over Financial Reporting.</u> There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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**PART II - OTHER INFORMATION**

**Item 1. Legal Proceedings**

We are not currently a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us or our business.

**Item 1A. Risk Factors**

Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2022 for a comprehensive listing of the Company's other risk factors. There are no material changes for the three and nine months ended September 30, 2023.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.**

During the nine months ended September 30, 2023, warrants were exercised, resulting in 21,082 shares of common stock being issued.

The securities described above were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), as set forth in Section 4(a)(2) of the Securities Act relative to transactions by an issuer not involving any public offering, to the extent an exemption from registration was required. The recipients of the securities described in the transactions above acquired the securities for their own account for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof.

**Item 2. Quantitative** a**nd Qualitative Disclosures About Market Risk**

During the three months ended September 30, 2022, a non-executive exercised stock options of the Company. The issuance was for 334 shares at a price of $3.00.

During the three months ended September 30, 2022, Andrew Hoyen, President, exercised stock options for common stock of the Company. The issuance was for 5,334 shares at a price of $3.00, for a total of $16,000.

The securities described above were issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), as set forth in Section 4(a)(2) of the Securities Act relative to transactions by an issuer not involving any public offering, to the extent an exemption from registration was required. The recipients of the securities described in the transactions above acquired the securities for their own account for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof.

**Item 3. Defaults Upon Senior Securities.**

The Company is in default on convertible notes to third parties of $150,000 due on December 31, 2016. The accrued interest on these notes is approximately $125,000 at September 30, 2023.

The Company is in default on long-term notes to third parties of $265,000 due on January 1, 2018. The accrued interest on these notes is approximately $267,000 at September 30, 2023.

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The Company is in default on a note payable to third parties of $355,000 due on December 31, 2022. The accrued interest on the note is approximately $122,000 at September 30, 2023.

The Company is in default on a note payable to third parties of $566,000 due on March 22, 2023. The accrued interest on the note is approximately $153,000 at September 30, 2023.

The Company is in default on a note payable to third parties of $118,000 due on June 3, 2023. The accrued interest on the note is approximately $28,000 at September 30, 2023.

The Company is in default on a note payable to third parties of $213,772 due on June 30, 2023. The accrued interest on the note is approximately $87,000 at September 30, 2023.

The Company is in default on a note payable to third parties of $259,029 due on June 30, 2023. The accrued interest on the note is approximately $90,000 at September 30, 2023.

**Item 6. Exhibits**

Exhibits required to be filed by Item 601 of Regulation S-K.

For the exhibits that are filed herewith or incorporated herein by reference, see the Index to Exhibits located below in this report. The Index to Exhibits is incorporated herein by reference.

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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| | |
|:---|:---|
|  | Infinite Group, Inc. |
|  | (Registrant) |
| Date: October 31, 2025 | /s/ James Villa |
|  | James Villa |
|  | Chief Executive Officer |
|  | (Principal Executive Officer) |
| Date: October 31, 2025 | /s/ Richard Glickman |
|  | Richard Glickman<br>Finance and Chief Accounting Officer<br>VP Finance and Chief Accounting Officer |

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**INDEX TO EXHIBITS**

&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;

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| | |
|:---|:---|
| **Exhibit**<br>**No.** | **Description** |
| [10.1](igi_ex101.htm) | [Business Loan Agreement, dated August 23, 2023, by and between Infinite Group, Inc. and WebBank](igi_ex101.htm) |
| [10.2](igi_ex102.htm) | [Financing and Security Agreement, dated September 14, 2023, by and between Infinite Group, Inc, and Celtic Bank Corporation](igi_ex102.htm) |
| [10.3](igi_ex103.htm) | [Future Receipts Sale Agreement, dated December 15, 2023, by and between Infinite Group, Inc. and Fresh Funding Solutions, Inc.](igi_ex103.htm) |
| [10.4](igi_ex104.htm) | [Receivables Purchase Agreement, dated February 13, 2024, by and between Infinite Group, Inc. and UFS West LLC](igi_ex104.htm) |
| [10.5](igi_ex105.htm) | [Subordinated Business Loan and Security Agreement, dated March 8, 2024, by and between Infinite Group, Inc. and Agile Capital Funding, LLC](igi_ex105.htm) |
| [10.6](igi_ex106.htm) | [Amended and Restated Loan and Security Agreement, dated August 16, 2924, by and between Infinite Group, Inc. and Harry Hoyen](igi_ex106.htm) |
| [10.7](igi_ex107.htm) | [Business Loan and Security Agreement, dated August 13, 2025, by and between Infinite Group, Inc and WebBank](igi_ex107.htm) |
| [10.8](igi_ex108.htm) | [Business Loan and Security Agreement, dated September 22, 2025, by and between Infinite Group, Inc and ODK Capital, LLC](igi_ex108.htm) |
| [31.1](igi_ex311.htm) | [Chief Executive Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002. \*](igi_ex311.htm) |
| [31.2](igi_ex312.htm) | [VP Finance Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002. \*](igi_ex312.htm) |
| [32.1](igi_ex321.htm) | [Chief Executive Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002. \*](igi_ex321.htm) |
| [32.2](igi_ex322.htm) | [VP Finance Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002. \*](igi_ex322.htm) |
| 101.INS | XBRL Instance Document.\* |
| 101.SCH | XBRL Taxonomy Extension Schema Document.\* |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document.\* |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document.\* |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document.\* |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document.\* |

---

\* Filed as an exhibit hereto.

## Exhibit 10.1

**EXHIBIT 10.1**

**Merchant ID:** 1242693

**Agreement #:** APP-0000241413

**BUSINESS LOAN AGREEMENT**

***Weekly Payments***

This Business Loan Agreement (this "**Agreement**") dated <u>August 23, 2023</u> is between **WebBank** ("**Lender**") and the borrower listed below ("**Borrower**").

**A. BORROWER INFORMATION**

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| | | | | |
|:---|:---|:---|:---|:---|
| **BUSINESS LEGAL NAME**<br>Infinite Group Inc. | **BUSINESS LEGAL NAME**<br>Infinite Group Inc. | **D/B/A** <br>IGI | **D/B/A** <br>IGI | **D/B/A** <br>IGI |
| **FEDERAL TAX ID#**<br>521490422 | **FEDERAL TAX ID#**<br>521490422 | **STATE OF INCORPORATION / ORGANIZATION**<br>NY | **STATE OF INCORPORATION / ORGANIZATION**<br>NY | **STATE OF INCORPORATION / ORGANIZATION**<br>NY |
| **PHYSICAL ADDRESS (BUSINESS LOCATION)**<br>175 Sully's Trail Suite 202  | **PHYSICAL ADDRESS (BUSINESS LOCATION)**<br>175 Sully's Trail Suite 202  | **CITY**<br>Pittsford | **STATE**<br>NY | **ZIP**<br>14534 |
| **BUSINESS START DATE (MM/YY)**<br>10/86 | **BUSINESS ENTITY TYPE** (check one):<br> Corporation ☒ Limited Liability Company ☐ Partnership ☐<br> Limited Partnership ☐ Limited Liability Partnership ☐ Sole Proprietorship ☐ | **BUSINESS ENTITY TYPE** (check one):<br> Corporation ☒ Limited Liability Company ☐ Partnership ☐<br> Limited Partnership ☐ Limited Liability Partnership ☐ Sole Proprietorship ☐ | **BUSINESS ENTITY TYPE** (check one):<br> Corporation ☒ Limited Liability Company ☐ Partnership ☐<br> Limited Partnership ☐ Limited Liability Partnership ☐ Sole Proprietorship ☐ | **BUSINESS ENTITY TYPE** (check one):<br> Corporation ☒ Limited Liability Company ☐ Partnership ☐<br> Limited Partnership ☐ Limited Liability Partnership ☐ Sole Proprietorship ☐ |

---

**B. PAYMENT INFORMATION**

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| | | | |
|:---|:---|:---|:---|
| **NAME**<br>James Villa | **BUSINESS TITLE**<br>Owner | **BUSINESS TITLE**<br>Owner |  |
| **RESIDENTIAL ADDRESS**<br>308 Rock Beach Rd | **CITY**<br>Rochester  | **STATE**<br>NY | **ZIP**<br>14617 |

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**C. SIGNING PRINCIPAL/GUARANTOR INFORMATION**

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| | | | |
|:---|:---|:---|:---|
| **Principal Amount** | $150000.00 | **Weekly Payment Amount** | $2671.15 |
| **Principal Amount** |  | *We will begin to debit the Weekly Payment Amount from your Designated Account on the first non-bank holiday weekday immediately following the day that we transfer the Principal Amount to you, and then on that same day of the week thereafter. The last payment could increase or decrease slightly from the above amount depending on the remaining balance, but will not increase the total Repayment Amount.* | *We will begin to debit the Weekly Payment Amount from your Designated Account on the first non-bank holiday weekday immediately following the day that we transfer the Principal Amount to you, and then on that same day of the week thereafter. The last payment could increase or decrease slightly from the above amount depending on the remaining balance, but will not increase the total Repayment Amount.* |
| **Principal Amount** |  | **Total Number of Weekly Payments** | 78 |
|  |  | **Calendar Days to End of Loan Term** | 540 |
| **Cost-of-Funds** | $58350.00 |  |  |
| **Repayment Amount** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $208,350.00<br> **= Principal Amount + Cost-of-Funds** *(not including Origination Fee)* |  |  |
| **Origination Fee** | 2.99 %<br>**of the Principal Amount** <br> *(excluding any portion of the Principal Amount being applied to repay an existing loan balance owed to us)* |  |  |
| **Other Up Front Fees** | **$0.00**<br> **Florida Documentary Stamp Tax**<br> *(tax rate is $.35 per $100 of Principal Amount)* |  |  |

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Business Loan Agreement (Weekly Payment) \| Rev. 12.22 \| Page 1 of 14

**D. CONTACT INFORMATION**

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|:---|:---|
| **EMAIL ADDRESS**<br>jvilla@igius.com | **PHONE NUMBER**<br>5852604777 |

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**E. KEY TERMS & CONDITIONS**

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|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; You should read this entire Agreement before signing it, but we want you to be aware of the following terms and conditions:<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. ARBITRATION:** *Section 19* gives you and us the right to require any dispute to be resolved through BINDING INDIVIDUAL ARBITRATION rather than in court. Individual arbitration means that neither you nor we can assert claims on behalf of a class or in a representative capacity. You can opt out of this provision, without penalty, for a limited time.<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. FEES:** *Section 5.5* requires you to pay certain fees and charges in addition to the Repayment Amount. These fees and charges include, but are not limited to, the Origination Fee, which is equal to a percentage of the Principal Amount (excluding any portion of the Principal Amount being applied to repay an existing loan balance owed to us or our Assignees) as specified in Table C above, late fees, dishonored payment fees and site visit fees.<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. PREPAYMENT:** *Section 6* gives you the right to prepay your remaining obligation under this Agreement once 90 days have passed from the Effective Date. If you choose to exercise this right, you may be eligible for a discount of your remaining obligation reduced by an amount that is 30% of the outstanding Cost-of-Funds portion of your loan.<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. CREDIT REPORTS:** Among other things, *Section 10.11* allows us to pull your credit reports in connection with this loan and to determine your eligibility for other financial products.<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. COLLATERAL**: *Section 9* grants us a lien on your properties, assets and rights, which we may secure by the filing of a financing statement, and *Section 21* restricts what you can do with such Collateral.<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. SIMULTANEOUS FUNDING RESTRICTION:** *Section 22* restricts your ability to seek certain types of additional financing before you have paid off your obligation to us.<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. TELEPHONE CONTACT:** *Section 14* allows us to contact you in certain ways and to record our telephone calls with you.<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8. BANK HOLIDAYS:** *Section 5.3* states, among other things, that if your Weekly Payment Amount falls on a bank holiday, then we will debit the Designated Account for that week on the first weekday following the bank holiday. |
| **WARNING REGARDING THIRD PARTY FEES**: Please note, if you worked with a third-party to facilitate this loan, we may directly pay such third-party a referral fee, but we do not permit third parties to charge you fees in connection with the funding of your loan. Please notify CAN Capital, Inc., our Servicer, at 877-500-8282 immediately if any third party has charged you a fee for your loan.<br>**IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT**<br>To help the government fight the funding of terrorism and laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.<br>**What this means for you**: When you open an account, we will ask for the name, address, date of birth (for any natural person), and other information that will allow us to identify the Signing Principal and your company. We may also ask to see the Signing Principal's driver's license or other identifying documents about the Signing Principal and your company. |

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Business Loan Agreement (Weekly Payment) \| Rev. 12.22 \| Page 2 of 14

Capitalized terms not defined below will have the meanings given to such terms in the above.

**1. PARTIES**. In this Agreement, the words "**you**" and "**your**" refer to Borrower. The words "**we**", "**us**" and "**our**" refer to Lender and its successors or assigns, including any "**Assignee**" as defined in *Section 11*. "**Principal**" refers to each one of Borrower's owners, shareholders, partners, members, principals, officers, directors and employees. "**Signing Principal**" refers to each Principal that has executed this Agreement or a Personal Guaranty of this Agreement.

**2. EFFECTIVE DATE; TERM**. The term of this Agreement (the "**Term**") begins on the date we accept it at our home office in Utah by signing it or sending you the Principal Amount, whichever is earlier (the "**Effective Date**"). We may accept this Agreement without signing it by sending you the Principal Amount. You understand and agree that we are not required to send you the Principal Amount until: (a) you have provided us with all documents and fully met all conditions required by this Agreement; and (b) the security interests we are entitled to receive under this Agreement have been perfected. If there is a delay in your receipt of the Principal Amount for these or any other reasons, you agree that there will be no adverse consequence to you or us. If any Weekly Payment Amounts, or fees and other charges under *Section 5.5* below, remain due and unpaid at the end of the Term, then the Term is automatically extended and the Term shall end when we have collected the Repayment Amount and all other amounts due under this Agreement. In addition, upon payment to us of the Repayment Amount and all other amounts due under this Agreement, and provided that you have done everything else you are required to do under this Agreement, the Term will end and you will have no further obligations to us under this Agreement except as otherwise stated below.

**3. PRINCIPAL AMOUNT; USE OF LOAN PROCEEDS**. You represent to us and agree that the Principal Amount will be used only: (a) to buy merchandise, inventory or related goods you will rent or sell to your customers, (b) to buy equipment or other goods for use in your business, (c) for training or other services needed by your business, and/or (d) to make improvements to your business location (but not to buy real estate). REGARDLESS OF ANYTHING ELSE STATED IN THIS AGREEMENT, YOU ACKNOWLEDGE AND AGREE THAT: (A) YOU WILL USE THE PRINCIPAL AMOUNT (AND THE GOODS OR SERVICES YOU BUY WITH THE PRINCIPAL AMOUNT) **SOLELY FOR BUSINESS PURPOSES** AND NOT FOR CONSUMER, PERSONAL, FAMILY OR HOUSEHOLD PURPOSES; (B) YOU WILL NOT USE THE PRINCIPAL AMOUNT TO FUND DIVIDENDS OR DISTRIBUTIONS TO ANY OF YOUR SHAREHOLDERS, PARTNERS, MEMBERS OR ANY OTHER OWNER OF ANY EQUITY INTEREST IN YOUR BUSINESS OR TO PURCHASE STOCK OR OTHER SECURITIES OF ANY KIND; (C) YOU WILL NOT PURCHASE STOCK OR OTHER SECURITIES WITH THE PROCEEDS OF THIS LOAN AND THIS LOAN MAY NOT BE SECURED BY ANY STOCK OR OTHER SECURITIES PURCHASED ON MARGIN; AND (D) THE LOAN DOCUMENTED BY THIS AGREEMENT IS **NOT** A "CONSUMER TRANSACTION" AS DEFINED IN THE UNIFORM COMMERCIAL CODE ("**UCC**").

**4. PROMISE TO PAY**. In exchange for us loaning you the Principal Amount, you unconditionally promise to pay us the Repayment Amount and all other amounts this Agreement requires you to pay. You agree to make payments to us in the manner stated in *Section 5* of this Agreement. As part of your agreement to repay us without conditions, you waive (both as to the original loan and any renewal, extension, refinancing, modification or consolidation of the loan): (a) protest, demand and presentment: (b) notice of dishonor, protest or suit; (c) all other notices or requirements necessary to hold you liable hereunder; and (d) all rights of exemption under the constitution or laws of any state as to real or personal property. **YOU AGREE THAT YOUR OBLIGATIONS UNDER THIS AGREEMENT ARE ABSOLUTE AND UNCONDITIONAL, MAY NOT BE PREPAID EXCEPT AS SPECIFICALLY STATED HEREIN, AND SHALL CONTINUE IN FULL FORCE AND EFFECT REGARDLESS OF ANY CIRCUMSTANCE WHATSOEVER, AND THAT SUCH OBLIGATIONS SHALL NOT BE AFFECTED BY ANY COUNTERCLAIM, SET-OFF, RECOUPMENT, OFFSET, DEFENSE OR OTHER ALLEGED RIGHT AGAINST US.** 

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**5. METHOD OF REPAYMENT**.

**5.1 *Designated Account***. The "**Designated Account**" is the account into which we deposit the Principal Amount based on the business bank account information you provide us by way of a voided check or bank notice, or any successor account(s) to such account of which you provide us notice, subject to our approval. You represent, warrant and agree that the Designated Account (i) is and shall be a business bank account during the Term of this Agreement, (ii) is not and will not be during the Term of this Agreement an account established primarily for personal, family or household purposes or otherwise an "account" as defined in 15 U.S.C. 1693a and Regulation E, and (iii) shall have sufficient funds during the Term of this Agreement for all debits and other withdrawals contemplated by this Agreement to be made on our behalf. If the Designated Account at any time lacks sufficient funds for any debit or other withdrawal required by this Agreement to be made on our behalf, you agree to immediately transfer sufficient funds to the Designated Account or pay to us such funds.

**5.2 *Payment through Weekly ACH Debits***. Except as set forth in *Section 5.3*, you shall pay us the Weekly Payment Amount (set forth under *"Payment Information"* on *page 1, Table C*) on the same weekday each calendar week during the Term of the loan (each a "**Payment Date**"), by authorizing and allowing Lender and/or Operator (defined below) to debit or otherwise withdraw the Weekly Payment Amount from the Designated Account on each Payment Date. Borrower hereby authorizes and requests Lender and/or each Operator to debit or otherwise withdraw the Weekly Payment Amounts from the Designated Account on each Payment Date until we have received the entire Repayment Amount and all amounts due and/or owed under this Agreement, including without limitation each Weekly Payment Amount and all late fees, taxes, non-sufficient funds charges, reimbursements and other amounts due pursuant to this Agreement. Borrower further: (a) authorizes Lender and each Operator to deliver a copy of this Agreement to the Bank as evidence of Borrower's authorization, and (b) agrees that, except to the extent prohibited by applicable law, Borrower's authorizations to Lender and each Operator hereunder may be revoked only with Lender's prior written consent. For purposes of this Agreement, the term "**Operator**" shall mean any person or entity we designate to debit or otherwise withdraw (via the Automated Clearing House ("**ACH**") system, electronic checks, wires, or otherwise) any amounts from your accounts as authorized or permitted by this Agreement.

**5.3 *Bank Holidays and Other Exceptions***. Lender and/or Operator will debit the Designated Account for Weekly Payment Amounts only on Payment Dates on which the Bank is open and able to process ACH transactions. If the Bank is not open or not able to process ACH transactions for reasons other than an insufficient Designated Account balance, then Lender or Operator will debit the Designated Account for the Weekly Payment Amount due on the next available day.

**5.4 *Authorization to Access and Withdraw from Designated Account***. You authorize and request Lender and/or Operator to debit or otherwise withdraw (via the ACH system, electronic checks, wires or otherwise) the Weekly Payment Amounts from the Designated Account each week until we have received the entire Repayment Amount and all other amounts you owe to us under this Agreement. You agree that, except to the extent prohibited by applicable law, you will not revoke this authorization and instruction without our prior written consent.

In the event a withdrawal fails for non-sufficient funds in your Designated Account, Lender and/or Operator reserve the right to resubmit the ACH payment request, and you hereby authorize us to either reinitiate that debit up to two (2) additional times until the debit is paid, and, to the extent such debit remains unpaid, to add all or a portion of the Weekly Payment Amount associated with the unpaid debit to a debit for a subsequent Weekly Payment Amount. You acknowledge and agree that we and Operator may issue pre-notifications to your Bank with respect to such debits, withdrawals and other transactions. You agree that Operator may rely upon our instructions, without any independent verification, in making the transactions described above. You waive any claim for damages you may have against Operator in connection with actions taken based on our instructions, unless such damages were due to Operator's failure to follow our instructions. You acknowledge and agree that (a) Operator will be acting on our behalf with respect to the Designated Account, (b) Operator may or may not be our affiliate, and (c) we are not responsible and shall not be liable for, and you agree to hold us harmless for, the actions of Operator. You understand and agree that this Agreement allows us to access the Designated Account. Within two business days of any request by us, you shall provide, or cause Operator or the Bank to provide, us with records and/or other information regarding the Designated Account. You hereby authorize and direct the Bank to provide us with all such information.

**5.5 *Fees***. In addition to the Repayment Amount, you agree to pay us the following fees and charges: (a) a one-time, nonrefundable Origination Fee in an amount calculated as set forth on *page 1*, *Table C*; (b) a fee of $30 (or such lesser amount as permitted by applicable law) for each returned, rejected or dishonored payment, ACH debit, or wire transfer withdrawal, it being understood that we have the right to receive such fee for each business day on which we or our designee attempted and were unable to debit or otherwise withdraw from your accounts the amount we were entitled to receive as of such date; (c) the cost of any site visit that confirms a violation of this Agreement, not to exceed $500 for each such visit; (d) a monthly late fee equal to $50.00 if any Weekly Payment Amount(s) are due but unpaid as of the last day of each calendar month, with such late fee due and debited on any Payment Date thereafter; (e) a fee of $250 if you block us from deducting the Weekly Payment Amount from your Designated Account, and (f) charges for providing copies and other documentation you request from us (a list of such charges will be made available upon request or online). Borrower hereby authorizes and requests Lender and/or each Operator to withdraw the Origination Fee from the Designated Account on or after the Effective Date. **If any Weekly Payment Amount(s), fees, charges or other amounts owed under this Agreement are due and unpaid at the end of the loan Term, the Term shall be automatically extended (without notice to you) and we may continue to withdraw the Weekly Payment Amount (and any other additional amounts or fees due hereunder) from the Designated Account each Payment Date until all amounts due to us under this Agreement have been paid in full.** 

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**6. PREPAYMENT**. Beginning 90 calendar days after the Effective Date, you may, upon notice and request to us, prepay in full all of your remaining obligations under this Agreement, which amount shall include any accrued or unpaid payments, fees and charges due as of the date of repayment (your "**Remaining Obligation**"). IF, AND ONLY IF, YOU MAKE YOUR PREPAYMENT VIA THE DESIGNATED ACCOUNT, YOU WILL ALSO QUALIFY FOR AN EARLY REPAYMENT DISCOUNT. This discount will be communicated to you by letter as an "**Early Repayment Amount**" calculated as of the date of that letter. The Early Repayment Amount will be your Remaining Obligation reduced by an amount that is 30% of the outstanding Cost-of-Funds portion of your loan. Your outstanding Cost-of-Funds will be calculated from our internal loan amortization schedule. You must pay the Early Repayment Amount exactly as specified in the letter we provide you. Your account will then be reconciled as of the date that your payment is actually received, and any excess payment amount will be handled in accordance with *Section 8.3*.

**7. DEFAULT; REMEDIES**.

**7.1 *Events of Default***. Each of the following shall constitute an "**Event of Default**" under this Agreement: (a) at any given time during the Term of the Agreement any Weekly Payment Amount has become due but remains unpaid for at least 5 calendar days; (b) you fail to pay any amount you owe us under this Agreement (other than Weekly Payment Amounts) within 30 days after we request in writing that you do so; (c) you revoke or cancel any authorization for Lender or Operator to debit or otherwise withdraw from or access the Designated Account (but only to the extent that the prohibition on your revoking or canceling such authorization contained in this Agreement is not prohibited by applicable law); (d) you fail to maintain insurance required hereunder; (e) any warranty, representation or statement made or furnished to us by you or Signing Principal or on your or Signing Principal's behalf under this Agreement is or becomes false or misleading in any material respect; (f) this Agreement ceases to be in full force and effect at any time and for any reason (including failure to create a validly perfected security interest or Lien); (g) you: (i) legally dissolve, are adjudicated insolvent or bankrupt or cease to pay your debts as they mature, (ii) make a general assignment for the benefit of or enter into an arrangement with creditors, (iii) apply for or consent to the appointment of a receiver, trustee or liquidator of you or a substantial part of your property, (iv) take action to dissolve or terminate your legal existence, or authorize; (v) file a voluntary petition in bankruptcy or under any similar law, or suffer such a petition or proceeding to be instituted against you; or (vi) if an individual operating as a sole proprietorship, you die or become legally incompetent; (h) commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any of your creditors or by any governmental agency against any Collateral (as defined in *Section 9*), including a garnishment of any of your accounts or deposit accounts; (i) you fail to perform or comply with any other term, provision, condition, covenant or agreement contained in this Agreement or any other documentation related to this Agreement; (j) you default under any other agreement with us, any Assignee or any affiliate of either us or any Assignee, or under any agreement with any third party material to your business or providing for the lease of real or personal property or the repayment of money borrowed; (k) we reasonably deem ourselves insecure with respect to your performance hereunder or in our rights with respect to the Collateral; and (l) any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of your obligations hereunder.

**7.2 *Remedies***. Upon the occurrence of an Event of Default under Section 7.1(g)(v), the unpaid balance of the Repayment Amount and all other amounts you owe us under this Agreement shall automatically become immediately due and payable. Upon the occurrence of any other Event of Default, we shall have the right, but not the obligation, to declare the unpaid balance of the Repayment Amount and all other amounts you owe us under this Agreement to be immediately due and payable. We shall have and may exercise all the rights and remedies of a secured creditor under the UCC. In addition, we shall have and may exercise any and all other rights and remedies available to us at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of our rights and remedies, whether evidenced by this Agreement or by any other writing, shall be cumulative and may be exercised singularly or concurrently. Election by us to pursue any remedy will not constitute a waiver of our rights to pursue other remedies. No forbearance or delay by us shall be deemed to waive any of our rights or remedies or create a course of dealing between or among the parties hereto. Any election by us to make expenditures or to take action to perform one or more of your obligations under this Agreement, after your failure to perform, shall not affect our right to declare an Event of Default and exercise our remedies.

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**8. ADDITIONAL REPAYMENT TERMS**.

**8.1 *Other Payment Methods***. Subject to Section 6, you may make payments to us in addition to Weekly Payment Amounts to satisfy your obligations under this Agreement. All such payments must be made in immediately available funds and U.S. Dollars paid by check, money order, wire transfer, ACH credit or any pay by-phone or on-line service that we offer. Any payments sent by mail or overnight courier must be addressed to WebBank, c/o CAN Capital, Inc. at the address set forth in *Section 15*, <u>Attn</u>: Customer Service Department. You acknowledge and agree that payments sent to any other address may not be timely processed or credited. Any payments made pursuant to this *Section 8.1* shall not affect in any way your obligation to pay Weekly Payment Amounts. We may accept late, postdated or partial payments without losing any of our rights under this Agreement or otherwise. We have no obligation to hold postdated checks and may process any postdated check on the date we receive it without being liable to you for any damages or other claims you may assert, which you hereby expressly waive. You agree not to mark any partial payment "paid in full," "without recourse," "in full satisfaction" or with any similar language, and you agree that any such notations shall have no force or effect and that we will not lose any of our rights under this Agreement if we accept any such payments.

**8.2 *Application of Payments***. Subject to applicable law, we reserve the right to allocate the Weekly Payment Amounts or any other payments received between the Principal Amount, Cost-of-Funds and fees in any manner we chose in our sole discretion, it being understood and agreed that any fees and Cost-of-Funds will generally be paid during the earlier portion of the Term.

**8.3 *Excess Cash***. In the event the amount of cash remitted by you pursuant to this Agreement exceeds the sum of the Repayment Amount and any other amounts we are entitled to receive hereunder (such excess being the "**Excess Cash**") by at least $20.00, we agree to pay the full amount of such Excess Cash to you within 30 days after our receipt thereof. In the event the Excess Cash is less than $20.00, you agree to forfeit such Excess Cash to us in consideration for administrative costs associated with handling Excess Cash. You acknowledge and agree that we have no obligation to take any action (including against Operator) with respect to any cash being held by Operator, which will become Excess Cash once it is paid by Operator to us, prior to our receipt of such Excess Cash.

**8.4 *Reliance on Terms***. The provisions of this Agreement are for the benefit of you, Signing Principal, us, and Operator. Notwithstanding the fact that Operator is not a party to this Agreement, Operator may rely upon the terms of this Agreement and raise them as defenses in any action by you or Signing Principal.

**8.5 *Indemnification; Limitation of Liability***. You shall indemnify and hold each of us, Operator, its and our respective officers, directors, affiliates, employees, agents, attorneys, representatives, successors and assigns (collectively, the "**Indemnified Parties**") harmless from and against all losses, damages, claims, liabilities, obligations, penalties, suits, actions, controversies, or proceedings of any kind, imposed upon, incurred by, or asserted against any of the Indemnified Parties, in any way arising from, in connection with, relating to, or incident to your breach of this Agreement or any and all actions taken by Operator in reliance upon information or instructions provided to Operator by us, including the payment of all costs and expenses of every kind for the enforcement of our rights and remedies hereunder, including reasonable attorneys' fees, costs of any trial, arbitration, appellate court proceeding, administrative proceeding, or any negotiations or consultations (the "**Indemnified Amounts**"). Such Indemnified Amounts will bear interest at the rate for prejudgment interest prevailing in your jurisdiction until paid. IN NO EVENT WILL WE OR ANY OPERATOR BE LIABLE FOR ANY CLAIMS ASSERTED BY YOU UNDER ANY THEORY OF LAW, INCLUDING ANY TORT OR CONTRACT THEORY FOR LOST PROFITS, LOST REVENUES, LOST BUSINESS OPPORTUNITIES, EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EACH OF WHICH YOU HEREBY EXPRESSLY WAIVE.

**9. GRANT OF SECURITY INTEREST**. Capitalized terms used in this *Section 9* without definition which are not defined elsewhere in this Agreement have the meanings defined in the UCC. For valuable consideration and to secure the prompt payment and performance in full of all of your, any Principal's or any of your affiliates' indebtedness, liabilities and obligations to us, whether direct or indirect, joint or several, absolute or contingent, due or to become due, now existing or hereafter arising, whether or not such indebtedness, liabilities and obligations relate to the loan described in this Agreement and whether or not contemplated by the parties hereto at the time of the granting of this security interest, regardless of how they arise or by what agreement or instrument they may be evidenced or whether evidenced by any agreement or instrument and including obligations to perform acts and refrain from taking action as well as obligations to pay money, including all principal, interest, other fees and expenses, you hereby grant to us a security interest in the following properties, assets and rights (the "**Collateral**"), wherever located, whether now owned or hereafter acquired or arising and howsoever your interest therein may arise or appear (whether by ownership, lease, security interest, claim, or otherwise): (a) any and all amounts owing to you now or in the future from any merchant processor; (b) all Accounts; (c) all Chattel Paper (including Tangible Chattel Paper and Electronic Chattel Paper); (d) all Instruments; (e) all Goods, including, without limitation, Equipment, motor vehicles, Inventory, Farm Products, Accessions, and As Extracted Collateral; (f) all Documents; (g) all General Intangibles (including, without limitation, Payment Intangibles and software); (h) all Deposit Accounts; (i) all Letter of Credit Rights; (j) all Investment Property; (k) all Supporting Obligations; (l) all trademarks, trade names, service marks, logos and other sources of business identifiers, and all registrations, recordings and applications with the U. S. Patent and Trademark Office ("**USPTO**") and all renewals, reissues and extensions thereof (collectively "**IP**"); (m) any records and data relating to any of the foregoing, whether in the form of a writing, photograph, microfilm, microfiche, or electronic media, together with all of your right, title and interest in and to all computer software required to utilize, create, maintain, and process any such records or data on electronic media; and (n) any and all proceeds of any of the foregoing, including insurance proceeds or other proceeds from the sale, destruction, loss, or other disposition of any of the foregoing, and sums due from a third party who has damaged or destroyed any of the foregoing or from that party's insurer, whether due to judgment, settlement or other process. You irrevocably authorize us and our designees at any time and from time to time to file: (i) in any filing office in any jurisdiction any initial financing statements and amendments thereto that indicate the collateral therein as all of your assets or words of similar effect, regardless of whether such description is greater in scope than the Collateral pledged to us hereunder; and (ii) such recordations with the USPTO we deem necessary or desirable to evidence the security interest in IP described above.

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**10. REPRESENTATIONS, WARRANTIES AND COVENANTS**.

You and Signing Principal represent, warrant and covenant the following as of the Effective Date and during the Term of this Agreement:

**10.1 *Your Business and Operations***. You shall: (a) not materially change the nature of your business from what was originally disclosed to us in connection with this Agreement; and (b) not sell or otherwise transfer your business without: (i) our express prior written consent, which we may withhold in our sole discretion for any reason or no reason, and (ii) the assumption by transferee of all of your obligations under this Agreement using documentation reasonably satisfactory to us, provided such assumption will not release you from liability under this Agreement.

**10.2 *Name, Location, Authority, Etc***. (a) You are and shall remain duly organized, licensed, validly existing and in good standing under the laws of your state or jurisdiction of organization and are and shall remain duly qualified, licensed and in good standing in each and every other state and jurisdiction in which the failure to do so could have a material adverse effect on your financial condition, business or operations; (b) your exact legal name set forth under *"Borrower Information"* on *page 1*, *Table A*, is true and correct and you do not and shall not conduct your business under any other name; (c) you shall not change your place of business, your legal name, entity type or state or jurisdiction of organization, unless you have provided us with at least 60 days' prior written notice and you, at your sole cost and expense, provide such documents, agreements and information we request and take such other actions as we deem necessary or desirable to protect our interests hereunder and in the Collateral; (d) you are authorized and permitted, by law, your organizational documents, contracts to which you or Signing Principal is a party and otherwise, to execute, deliver and perform this Agreement and all related documents; (e) all of your organizational and formation documents and all amendments thereto have been duly filed and are in proper order and any capital stock, membership interests or other ownership interest issued by you and outstanding was and is properly issued and all of your books and records are accurate and up to date and will be so maintained; (f) you are subject to no charter, corporate or other legal restriction, or any judgment, award, decree, order, governmental rule or regulation or contractual restriction that could have a material adverse effect on your financial condition, business or prospects; (g) you are and will continue to be in compliance with your organizational and formation documents, all contractual requirements by which you may be bound, and all applicable federal, state and local laws, statutes, regulations, ordinances and rules pertaining to the conduct of your business, including without limitation the regulations of card associations and payment networks; (h) there is no action, suit, proceeding or investigation pending or, to your knowledge, threatened against or affecting you or any of your assets before or by any court or other governmental authority which, if determined adversely to you, would have a material adverse effect on your financial condition, business or prospects or the value of the Collateral; and (i) you possess and are in compliance with all permits, licenses, approvals, consents, registrations and other authorizations necessary to own, operate and/or lease your properties and to conduct your business.

**10.3 *Location of the Collateral***. You agree to keep the Collateral (or, to the extent the Collateral consists of intangible property such as Accounts or General Intangibles, the records concerning the Collateral) at the location(s) shown under *"Borrower Information"* on *page 1, Table A*, or at such other locations as we have agreed to in advance in writing. Upon our request, you will deliver to us in form satisfactory to us a schedule describing the Collateral in such detail as we reasonably request. You shall not remove the Collateral from its existing location without our prior written consent.

**10.4 *Repairs and Maintenance***. You shall: (a) only use Collateral in a prudent, businesslike manner for its originally intended purpose and solely for business purposes and NOT for any consumer, personal, household or family purpose; (b) comply promptly with all applicable insurance policies, laws, ordinances, rules, regulations and requirements of all governmental authorities, now or hereafter in effect, applicable to the ownership, production or disposition thereof; and (c) pay when due all taxes and claims for work done on, or services or material furnished in connection with, the Collateral.

**10.5 *Inspection of Collateral and Place of Business***. We or our designated representatives and agents shall have the right during your normal business hours and at any other reasonable time to examine the Collateral where located and the interior and exterior of any of your places of business. During an examination of any of your places of business, we may examine, among other things, whether you (a) have a place of business that is separate from any personal residence, (b) are open for business, and (c) have sufficient inventory to conduct your business. When performing an examination, we may photograph the interior and exterior of any your places of business, including any signage, and may photograph any Principal.

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**10.6 *Insurance***. You shall maintain insurance in such amounts and against such risks as are consistent with past practice and shall show proof of such insurance upon our request. You shall promptly notify us of any loss or damage to the Collateral.

**10.7 *Business Information; Reliance; Compliance***. All information (financial and other) provided by or on your or Signing Principal's behalf to us in connection with or pursuant to this Agreement is true, accurate and complete in all respects. You and Signing Principal shall furnish us and Operator such information as we may request from time to time. You acknowledge and agree that all information (financial and other) provided by or on behalf of you and/or Signing Principal has been relied upon by us in connection with our decision to loan you the Principal Amount. You acknowledge and agree that neither we nor Operator will provide you with any tax, accounting, legal or other professional or expert advice of any kind, nor will you treat or rely on any information provided to you by us or Operator as such.

**10.8 *Solvency***. You do not presently intend to close or cease operating your business, in whole or in part, temporarily or permanently. As of the date of this Agreement, you are solvent and are not contemplating any insolvency or bankruptcy proceeding. During the four months preceding the date of this Agreement, neither you nor any Principal has discussed with or among your management, with counsel, or with any other advisor or creditor, any potential insolvency, bankruptcy, receivership, or assignment for the benefit of your creditors and no such action or proceeding has been filed or is pending. Other than as disclosed to us in a writing attached to this Agreement, no eviction or foreclosure is pending or threatened against you.

**10.9 *Confidentiality***. You and Signing Principal understand and agree that the terms and conditions of the products and services we offer, including this Agreement and any other documentation provided by us ("**Confidential Information**") are our proprietary and confidential information. Accordingly, unless disclosure is required by applicable law or court order, you and Signing Principal shall not disclose (and you and Signing Principal shall cause each Principal not to disclose) Confidential Information to any person other than your attorneys, accountants, financial advisors or employees who need to know such information for the purpose of advising you ("**Advisors**"), provided that such Advisors use such information solely to advise you and first agree in writing to keep such information confidential.

**10.10 *Publicity***. You and Signing Principal authorize us to use your, his or her name in a listing of clients and in advertising and marketing materials.

**10.11 *Credit Reports and Information Sharing***. YOU AND SIGNING PRINCIPAL HEREBY AUTHORIZE US, OUR AGENTS AND REPRESENTATIVES, AND ANY CREDIT REPORTING AGENCY ENGAGED BY ANY OF THE FOREGOING, TO **(A) INVESTIGATE ANY REFERENCES GIVEN OR ANY OTHER STATEMENTS OR DATA OBTAINED FROM OR ABOUT YOU OR SIGNING PRINCIPAL FOR THE PURPOSE OF THIS AGREEMENT, AND (B) OBTAIN YOUR AND SIGNING PRINCIPAL'S BUSINESS AND PERSONAL CREDIT BUREAU REPORTS FROM TIME TO TIME,** (I) AT ANY TIME NOW OR FOR SO LONG AS YOU OR SIGNING PRINCIPAL CONTINUE TO HAVE ANY OBLIGATION TO US AS A CONSEQUENCE OF THIS AGREEMENT, OR (II) AT ANY TIME IN ORDER FOR US TO DETERMINE YOUR ELIGIBILITY FOR A FINANCIAL PRODUCT OFFERED BY US. By entering into this Agreement, you hereby authorize us to share information regarding you and/or Signing Principal and relating to your application, the loan, and the status of your account (including amount repaid, eligibility for additional funding, collections and payment statuses, etc.) to credit bureaus, any service providers we utilize in connection with performing our due diligence, our affiliates and any broker or other third party that you and/or Signing Principal may be working with or represented by (including brokers, independent sales organizations & other representatives). Such parties may use the shared information when considering whether to offer financial or other products or services in the future. You and Signing Principal hereby waive to the maximum extent permitted by law any claim for damages against us and our affiliates, agents, employees and representatives relating to (i) any investigation undertaken by such person and/or entities as permitted by this Agreement or (ii) disclosure of information as permitted by this Agreement. You also agree that we may release any such information if we believe it is required to comply with any governmental or legal action, whether or not such release is actually required, or when it is necessary or desirable in connection with a transaction or investigation of a potential loss. If you or Signing Principal fails to satisfy the terms of your respective credit obligations hereunder, we may submit a negative credit report to a credit reporting agency that adversely effects the credit score or record of you and/or the Signing Principal.

**10.12 *D/B/As and Proxies***. You and Signing Principal hereby acknowledge and agree that we may use "doing business as" or "d/b/a" names or third-party proxy services in connection with various matters relating to the transactions between you and us, including the filing of UCC-1 financing statements and other notices or filings.

**10.13 *Collection Costs and Fees***. To the extent not prohibited by applicable law or applicable arbitration rules or procedures, you shall pay to us any and all expenses, including collection costs, attorneys' fees and expenses, expert fees and expenses, and all other expenses which may be incurred by us in the prosecution, defense, settlement and/or other resolution of any claim, demand, action or proceeding arising out of or relating to this Agreement, the Collateral or any of our related rights or interests, regardless of whether you are a party to that action or proceeding or made aware of the claim or demand before it is resolved. Without limiting the generality of the foregoing, the expenses you shall pay to us include counsel fees and expenses incurred in any bankruptcy or insolvency proceedings and all costs and expenses (including search fees) incurred or paid by us for the purpose of administering, protecting or realizing our security under this Agreement. All amounts described in this *Section 10.13* shall be considered advances to protect our security, and shall be secured by this Agreement.

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**11. ASSIGNMENT**. Without our prior written consent, you shall not pledge, cancel, revoke or assign this Agreement or your rights hereunder. Any prohibited assignment shall be void. No consent to an assignment by us shall release you from your obligations hereunder. We may assign, mortgage, pledge or otherwise transfer or delegate this Agreement or any of our rights or obligations hereunder to any party (each, an "**Assignee**") without notifying you or obtaining your consent. Without limiting the generality of the foregoing, we may grant a security interest in any and all of our rights and interests pursuant to this Agreement, including our rights and interests in and to the Weekly Payment Amounts and the Repayment Amount, and including to parties from whom we may obtain financing (any such Assignee, a "**Secured Party**"), and you agree that any such Secured Party is entitled, to the extent of the applicable assignment or other agreement between us and such Secured Party, to enforce any and all of our rights, remedies and interests under this Agreement. Any Secured Party shall have all of our rights, but no liability for any of our obligations, under this Agreement, and you agree that you will not assert against any Secured Party any defense, counterclaim, set-off, recoupment, offset or other alleged right that you may have against us. Upon and following receipt of written notification by an Assignee to you, you are authorized and directed to remit any and all amounts then or thereafter payable by you under this Agreement directly to such Assignee. As between you and any such Assignee, any remittance sent to us following such receipt shall not constitute payment unless and until such payment is actually received by such Assignee.

**12. RIGHT TO PERFORM; FURTHER ASSURANCES**. If you fail to carry any insurance or render any other performance required by this Agreement, we may, at our sole option and without obligation, do so and you will reimburse us together with interest from the date of the expense to the date of reimbursement at the rate for prejudgment interest prevailing in your jurisdiction. You hereby appoint us as your true and lawful attorney and agent to, in your name, execute, file, communicate, record and deliver any documents we deem appropriate to protect our interest in this Agreement or any Collateral or the proceeds thereof. This power, being coupled with an interest, shall be irrevocable until all your obligations hereunder have been indefeasibly and fully paid and performed. YOU ACKNOWLEDGE THAT THE FEES WE CHARGE TO YOU FOR LATE PAYMENTS, DOCUMENTATION, ORIGINATION, ADMINISTRATION, TAX COMPLIANCE, INSURANCE OR ANY OTHER MATTER ASSOCIATED WITH THIS AGREEMENT MAY REPRESENT PROFIT TO US IN WHOLE OR IN PART AND MAY NOT BE MERELY A REIMBURSEMENT FOR ACTUAL COSTS. You agree to execute and deliver any additional writings and take any other actions we reasonably request to evidence or effect your agreements and obligations under this Agreement.

**13. USURY SAVINGS CLAUSE**. It is the intention of parties hereto to comply strictly with applicable usury laws and, accordingly, in no event shall we ever be entitled to receive, collect, or apply as interest any interest, fees, charges or other payments equivalent to interest, in excess of the maximum rate of interest, which we may lawfully charge under applicable law (the "**Maximum Rate**"). In the event that we ever receive, collect, or apply as interest any such excess, such amount which, but for this provision, would be excessive interest, shall be applied to the reduction of the principal balance owed hereunder; and if said principal balance, and all lawful interest thereon, is paid in full, any remaining excess shall forthwith be paid to you, or other party lawfully entitled thereto. In determining whether or not the interest paid or payable, under any specific contingency, exceeds the highest rate which we may lawfully charge under applicable law, the parties hereto shall, to the maximum extent permitted under applicable law, characterize any non-principal payment as a reasonable loan charge, rather than as interest. Any provision hereof, or of any other agreement between the parties hereto, that operates to obligate or compel you to pay interest in excess of the Maximum Rate shall be construed to require payment of the Maximum Rate only. The provisions of this *Section 13* shall prevail over any other provision herein or in any other agreement between the parties hereto that is in conflict with the provisions of this *Section 13*.

**14. CONTACTING YOU; PHONE AND TEXT MESSAGES.** You and Signing Principal authorize us and our affiliates, agents, representatives, assigns and service providers (collectively, the "**Messaging Parties**") to provide information about this Agreement and the loan (including without limitation information about upcoming payment due dates, missed payments, returned payments, the Messaging Parties' servicing and/or collection of amounts owed to the Messaging Parties or any other matter) using automatic telephone dialing systems, artificial or prerecorded voice message systems, text messaging systems, facsimile machines, automated email systems and any other method of communication. You and Signing Principal authorize the Messaging Parties to make such communications using any telephone numbers (including wireless, landline, residential, facsimile and VOIP numbers) or email addresses supplied in connection with this Agreement or the loan. Anyone with access to the telephone or email accounts supplied may listen to or read the messages the Messaging Parties leave or send, and you and Signing Principal agree that the Messaging Parties will have no liability for any such access. You and Signing Principal further agree that the Messaging Parties will have no liability for any charges from your telecommunications, wireless and/or Internet service providers for the telephone calls, facsimile or text messages or emails we make or send. You and Signing Principal expressly authorize the Messaging Parties to monitor and record your calls with the Messaging Parties. Consent to receive text messages and calls to a cell phone or to receive artificial or prerecorded voice message system calls may be withdrawn by calling 877-500-8282. To stop text messages, reply "STOP" to any text message from the Messaging Parties. To stop emails, follow the opt-out instructions included at the bottom of the Messaging Parties' emails.

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**15. COMMUNICATIONS.**

**15.1 YOUR AUTHORIZED REPRESENTATIVES.** You acknowledge that we will only communicate directly with your Principals, other persons you authorize us to communicate with or your authorized attorney-at-law (your "**Authorized Representatives**") in discussing your loan and/or your obligations under this Agreement. You agree not to authorize any other third-party to contact us regarding this Agreement and any attempt to do so shall automatically be void. We shall have the right, in our sole discretion, to refuse to discuss this Agreement with any person who is not your Authorized Representative. We shall also have no obligation to comply with any instructions or directions provided by a person who is not an Authorized Representative.

**15.2 NOTICES**. Any notice or other communication required or desired to be given shall be in writing and shall be sent by certified mail, return receipt requested, by a nationally recognized express courier service (such as FedEx) or personally served, and shall be deemed to be duly given when postmarked by the United States Post Office, when deposited with a nationally recognized express courier service or when personally served. Each such notice to Borrower shall be at the address set forth under "Borrower Information" on *page 1, Table A*, and any such notice to Lender shall be at the following address (or to any other address as may be specified by either party by a notice given as provided herein):

WebBank c/o CAN Capital, Inc., as Servicer

1850 Parkway Place, Suite 1150 Marietta, GA 30067

Notwithstanding the foregoing, any notice, request or demand which you make pursuant to any statutory rights granted to debtors under Article 9 of the UCC shall only be effective upon receipt of a copy of said notice, request or demand by us at the address set forth above with the following caption "Attention: Manager- UCC Notice."

**16. GOVERNING LAW; JURISDICTION.** THIS AGREEMENT AND ALL TRANSACTIONS IT CONTEMPLATES, INCLUDING ALL ISSUES CONCERNING THE VALIDITY OF THIS AGREEMENT AND ANY TRANSACTIONS IT CONTEMPLATES, THE CONSTRUCTION OF ITS TERMS, AND THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF US, YOU AND SIGNING PRINCIPAL SHALL BE GOVERNED BY AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF **UTAH**, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF ANY OTHER LAW. Without limiting the generality of the foregoing, you, the Signing Principals and we agree that Utah law shall govern the entire relationship between and among all parties hereto, including without limitation, all issues or claims arising out of, relating to, in connection with, or incident to this Agreement and any transactions it contemplates, whether such claims are based in tort, contract, or arise under statute or in equity, including without limitation the law with respect to applicable statutes of limitations, laches, or similar time-based defenses. Subject to each party's right to elect arbitration under *Section 19* below, you and the Signing Principal further irrevocably and unconditionally consent and submit to the jurisdiction of any state or federal court located in Utah (where we are located) or Georgia (where Servicer is located) to resolve any suit, action, controversy, or proceeding of any kind (whether in contract, tort, statute, equity or otherwise) between or among any of the parties hereto, arising out of, related to, in connection with, or incident to this Agreement or any of the transactions it contemplates. You and the Signing Principal hereby agree that any of the above-named courts shall be a convenient forum for any such suit, action, controversy, or proceeding of any kind between or among the parties hereto, arising out of, related to, in connection with, or incident to this Agreement or any of the transactions it contemplates. You and the Signing Principal waive, to the fullest extent permitted by law, (a) any objection that you or the Signing Principal may now or later have to the laying of venue of any suit, action, controversy, or proceeding arising out of, relating to, in connection with, or incident to this Agreement or any of the transactions it contemplates in any of the above-named courts, (b) any objection to personal jurisdiction applying in any such court, and (c) any claim that any such suit, action, controversy or proceeding brought in any such court has been brought in an inconvenient forum. THE PARTIES ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT IS MADE AND PERFORMED IN **UTAH**.

You and the Signing Principal understand and agree that: (i) we are located in Utah; (ii) we make all credit and other decisions from our office in Utah; and (iii) the loan hereunder is made in Utah (that is, no binding contract will be formed until we receive and accept your signed agreement in Utah).

**17. FAX SIGNATURES; COUNTERPARTS**. You and the Signing Principal agree that your faxed, scanned or other electronic signatures will be considered as good as your original signature and admissible in court as conclusive evidence. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which when taken together shall constitute one and the same agreement.

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**18. INTERPRETATION; MISCELLANEOUS**. This Agreement shall only be valid when accepted by us at our home office in Utah. Except as otherwise stated in *Section 19*, the provisions of this Agreement shall be severable and if any provision shall be invalid, void or unenforceable in whole or in part for any reason, the remaining provisions shall remain in full force and effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns (subject nevertheless to restrictions provided in *Section 11*). This Agreement, together with the other agreements and instruments mentioned herein or executed by you contemporaneously herewith, constitutes the entire agreement of the parties hereto and we shall not be charged with any agreement or representation not contained in a writing executed by us as provided herein. Any modifications to this Agreement, which is our form agreement used for all loans we make, must be made in a separate amending document signed by both parties. Absent manifest error, our records shall be conclusive evidence with respect to the matters governed by this Agreement (including the total amount of Weekly Payment Amounts and other amounts paid to us) but the failure to record any such amount in such records or otherwise shall not limit or affect your obligations or our rights hereunder. Whenever terms such as "include" or "including" are used herein, they shall mean "include" or "including," as the case may be, without limiting the generality of any description or word preceding such term. Whenever terms such as "acceptable to us" or "to our satisfaction" are used or we are granted the contractual right to choose between alternatives or express our opinion, the satisfaction, choices and opinions are to be made in our sole and absolute discretion. The captions or headings herein are made for convenience and general reference only and shall not be construed to describe, define or limit the scope or intent of the provisions of such document. As used herein, all masculine pronouns shall include the feminine or neuter, and all singular terms the plural forms thereof, and vice versa. Any exhibits annexed hereto are incorporated therein and made a part thereof as if contained in the body of this Agreement. All references to "Sections" shall be deemed to refer to the numbered sections of this Agreement, unless otherwise expressly provided, whether or not "hereof," "above," "below" or like words are used. This Agreement has been drafted by our counsel as a convenience to the parties hereto only and shall not, by reason of such action, be construed against us or any other party.

**19. ARBITRATION AGREEMENT**. You or we each may elect to resolve any and all claims and disputes relating in any way to this Agreement or our dealings with one another ("**Claims**"), except for Claims concerning the validity, scope or enforceability of this Arbitration Agreement, through **BINDING INDIVIDUAL ARBITRATION**. This Arbitration Agreement is made with respect to transactions involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U. S. C. §§ 1-16 (the "**FAA**"), and not by state law. **SIGNING PRINCIPAL AGREES THAT *SECTION 19* (INCLUDING *SECTIONS 19.1 – 19.6*) SHALL APPLY TO HIM/HER IN THE SAME MANNER AS BORROWER.** 

**19.1 *Individual Arbitration***. If either of us elects to resolve a dispute by arbitration, this means that neither you nor we will be able to have the dispute settled by a court or jury trial or to participate in a class action or class arbitration. Other rights that you and we would have if you or we went to court will not be available or will be more limited in arbitration, including your and our right to appeal. YOU AND WE BOTH UNDERSTAND AND AGREE THAT BY ALLOWING EACH OTHER TO ELECT TO RESOLVE ANY DISPUTE THROUGH INDIVIDUAL ARBITRATION, **WE ARE EACH WAIVING THE RIGHT TO A JURY TRIAL OR A TRIAL BEFORE A JUDGE IN A PUBLIC COURT.** IF EITHER YOU OR WE ELECT TO RESOLVE A DISPUTE BY ARBITRATION, THAT DISPUTE SHALL BE ARBITRATED ON AN INDIVIDUAL BASIS. **NEITHER YOU NOR WE MAY BRING A CLAIM UNDER THIS PROVISION AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE CAPACITY.** THE ARBITRATOR(S) MAY NOT CONSOLIDATE MORE THAN ONE PARTY'S CLAIMS (except Claims by or against you and the Signing Principal with respect to a single Agreement or series of Agreements involving the same parties) AND MAY NOT OTHERWISE PRESIDE OVER ANY FORM OF A REPRESENTATIVE OR CLASS PROCEEDING.

**19.2 *Arbitration Rules***. Arbitration of any dispute under this Arbitration Agreement shall be administered by the American Arbitration Association ("**AAA**") pursuant to the Commercial Arbitration Rules and Mediation Procedures of AAA in effect at the time the arbitration is initiated. You may contact AAA to obtain information about arbitration, arbitration procedures and fees by calling 800-778-7879 or visiting www.adr.org. If AAA is unable or unwilling to administer the arbitration of a dispute, then a dispute may be referred to any other arbitration organization mutually agreed upon in writing by you and us or to an arbitration organization or arbitrator appointed pursuant to section 5 of the FAA, and the commercial arbitration rules and procedures of such other organization shall be applicable to such arbitration. The arbitrator shall apply applicable substantive law consistent with the FAA and applicable statutes of limitations and shall be authorized to award any relief that would have been available in court, including awarding costs and fees to the prevailing party, provided that the arbitrator's authority to resolve claims and make awards is limited to you and us alone except as otherwise specifically stated herein. No arbitration award or decision will have any preclusive effect as to issues or claims in any dispute with anyone who is not a named party to the arbitration. The decision by the arbitrator shall be final and binding. You and we agree that this Arbitration Agreement extends to any other parties involved in any Claims, including but not limited to your Principals and our employees, affiliated companies and vendors. In the event of any conflict between this Arbitration Agreement and the AAA arbitration rules or the rules of any other arbitration organization or arbitrator, this Arbitration Agreement shall govern. The parties agree that the place of any arbitration pursuant to this Arbitration Agreement shall exclusively be Salt Lake City, Utah.

**19.3 *Arbitration Fees and Costs***. You and we shall each pay its respective arbitration costs, fees and expenses as required pursuant to the applicable arbitration rules and procedures, including without limitation the party filing any Claims shall be responsible for payment of any initial arbitration filing fees, costs or expenses. Without limiting the foregoing, to the extent allowed under the applicable arbitration rules and procedures and/or applicable law, the prevailing party in any arbitration or dispute under or in connection with this Arbitration Agreement shall be entitled to recover all fees, expenses and costs arising from or relating to such proceeding, including without limitation reasonable attorneys' fees incurred by such party in connection with any such proceeding or dispute.

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**19.4 *Exceptions***. Notwithstanding any other provision of this Agreement, you or we may seek relief in a small claims court for Claims within the jurisdiction of that court. In addition, you and we agree that this Arbitration Agreement does not stop you or us from exercising any lawful rights to seek provisional remedies or self-help. You and we agree that we each may seek provisional remedies in court or self-help remedies out of court without waiving the right to arbitrate. Notwithstanding any other provision of this Agreement, if the foregoing prohibition against consolidated, class and/or representative arbitration is determined to be invalid or unenforceable, then this entire Arbitration Agreement shall not apply. If any portion of this Arbitration Agreement other than the prohibition on consolidated, class and representative arbitration is deemed invalid or unenforceable, it shall not invalidate the remaining portions of this Arbitration Agreement.

**19.5 *Arbitration Agreement Is Optional***. YOU HAVE THE RIGHT TO REJECT THIS ARBITRATION AGREEMENT, BUT **YOU MUST EXERCISE THIS RIGHT PROMPTLY**. If you do not wish to be bound by this agreement to arbitrate, you must notify us in writing within sixty (60) days after the Effective Date. You must send your request to: WebBank, c/o CAN Capital, Inc. as Servicer, Customer Service Department, 1850 Parkway Place, Suite 1150, Marietta, GA 30067. The request must include your full name, address, account number, and the statement "I reject the Arbitration Agreement contained in my Business Loan Agreement." If you exercise your right to reject arbitration, the other terms of this Agreement shall remain in full force and effect as if you had not rejected arbitration.

**19.6 *Cure Provision***. You and we intend for both of us to have the right to arbitrate disputes on an individual basis as set forth above. In the event that a court finds any reason to invalidate or refuse to enforce this Arbitration Agreement, the party aggrieved by that decision shall have the right to take unilateral action to eliminate the basis for the court's decision, such as by waiving any right or remedy it has under this Agreement or agreeing to additional fee or cost shifting. This cure right may be exercised during briefing of a motion to compel arbitration, during oral argument, or in a renewed motion to compel arbitration. If a renewed motion is filed, you and we agree that the exercise of cure rights hereunder shall constitute new facts permitting such a renewed motion.

**20. POST-TERMINATION REQUESTS; SURVIVAL**.

**20.1 Post-Termination Requests.** Once six (6) business days have passed since the date on which you have fulfilled all of your obligations to us under this Agreement, you may: (a) call or write to us to request a "zero balance letter" and/or a UCC-3 Release of the UCC-1 financing statements. Please note that depending on the Secretary of State's office in your state a UCC-3 can take up to 30 business days to be created and returned to us.

**20.2 Survival**. The Personal Guaranty and the following Sections hereof shall survive the expiration or termination of this Agreement for any reason and/or the relationship between us, any bankruptcy by you or us and any transfer by us of this Agreement or our rights hereunder: *7.1, 7.2, 8.4, 8.5, 10.9, 10.10*, *10.11, 10.13, 11, 13, 14, 15, 16, 17, 18, 19* (including *Sections 19.1 – 19.6*) and *20*.

**21. TRANSACTIONS INVOLVING COLLATERAL**. You represent, warrant and agree that: (a) you shall not sell, offer to sell, or otherwise transfer or dispose of any Collateral, except for inventory sold or accounts collected in the ordinary course of your business, unless we otherwise agree in writing; (b) no one else has any interest in or claim against the Collateral that you have not disclosed to us in writing prior to the Effective Date; (c) you shall not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any security interests, liens, claims, charges, restrictions, conditions, options, rights, mortgages, equities, pledges and encumbrances of any kind or nature whatsoever (collectively, "**Liens**") other than the security interest granted to us hereunder; and (d) you have, and at all times will have, good, complete and marketable title to all Collateral, free and clear of any and all Liens or any other rights or interests that may be inconsistent with the transactions contemplated with us under this Agreement, or adverse to our interests. You shall, at your sole cost and expense, defend our rights in the Collateral against the claims and demands of all other persons. All proceeds from any unauthorized disposition of the Collateral shall be held in trust for us, shall not be commingled with any other funds and shall be immediately delivered to us; provided, however that this requirement does not constitute our consent to any such disposition.

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**AGREEMENT CONTINUES ON NEXT PAGE**

**22. SIMULTANEOUS FUNDING RESTRICTION**. You shall not enter into any arrangement, agreement or commitment with any person or entity other than us (a) that involves the direct or indirect pledge or sale of any portion of payments by your customers with credit cards, debit cards, charge cards, bank cards and/or other payment cards ("**Card Receivables**"), whether in the form of a purchase of, a loan against, or the sale or purchase of credits against, Card Receivables; or (b) that requires or contemplates that you will make regular payments more frequently than monthly. You agree that financing statements we file to protect our interests in the Collateral and under this Agreement may contain a statement that you are prohibited from transferring Card Receivables or other Collateral to any person or entity other than us, granting any security interest in Card Receivables or other Collateral to any person or entity other than us, or entering into any financing arrangement requiring or contemplating regular payments more frequently than monthly, until you have fulfilled all of your obligations to us.<br>**ARBITRATION NOTICE.** THIS AGREEMENT CONTAINS AN ARBITRATION PROVISION IN *SECTION 19* (INCLUDING *SECTIONS 19.1 – 19.6*). THE ARBITRATION AGREEMENT AFFECTS YOUR LEGAL RIGHTS. READ IT CAREFULLY BEFORE SIGNING.<br>

**BORROWER SIGNATURE**

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|:---|:---|:---|
| I have read this entire Agreement, including the Arbitration Agreement in *Section 19* (including *Sections 19.1 – 19.6*), and received a copy for my records. I understand that I have the right to consult with an attorney before signing this Agreement if I choose to do so. I am able to read and understand the English language. By signing below, on behalf of Borrower and in my individual capacity as a Signing Principal, I agree to all of the terms of this Agreement, including the Arbitration Agreement and the other "Key Terms and Conditions" summarized on *Page 2, Table E*, and offer to enter into the transaction it describes. | I have read this entire Agreement, including the Arbitration Agreement in *Section 19* (including *Sections 19.1 – 19.6*), and received a copy for my records. I understand that I have the right to consult with an attorney before signing this Agreement if I choose to do so. I am able to read and understand the English language. By signing below, on behalf of Borrower and in my individual capacity as a Signing Principal, I agree to all of the terms of this Agreement, including the Arbitration Agreement and the other "Key Terms and Conditions" summarized on *Page 2, Table E*, and offer to enter into the transaction it describes. | I have read this entire Agreement, including the Arbitration Agreement in *Section 19* (including *Sections 19.1 – 19.6*), and received a copy for my records. I understand that I have the right to consult with an attorney before signing this Agreement if I choose to do so. I am able to read and understand the English language. By signing below, on behalf of Borrower and in my individual capacity as a Signing Principal, I agree to all of the terms of this Agreement, including the Arbitration Agreement and the other "Key Terms and Conditions" summarized on *Page 2, Table E*, and offer to enter into the transaction it describes. |
| **BUSINESS LEGAL NAME (TYPE OR PRINT)** <br>Infinite Group Inc. | **BUSINESS LEGAL NAME (TYPE OR PRINT)** <br>Infinite Group Inc. | **BUSINESS LEGAL NAME (TYPE OR PRINT)** <br>Infinite Group Inc. |
| **AUTHORIZED SIGNATURE**<br> ![](igi_ex101img1.jpg) | **NAME (TYPE OR PRINT)**<br>James Villa | **TITLE (TYPE OR PRINT)**<br>Owner |

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Business Loan Agreement (Weekly Payment) \| Rev. 12.22 \| Page 13 of 14

***PERSONAL GUARANTY ON NEXT PAGE MUST ALSO BE SIGNED***

**PERSONAL GUARANTY**

**THIS GUARANTY CREATES SPECIFIC PERSONAL LEGAL OBLIGATIONS FOR GUARANTOR AS AN INDIVIDUAL. PLEASE READ IT CAREFULLY BEFORE SIGNING.** <br>I hereby personally and unconditionally guaranty for the benefit of WebBank and its successors and assigns ("**Lender**") the prompt payment to Lender of all amounts owed by the Borrower referenced above ("**Borrower**") under the above Agreement. The obligations of Signing Principal(s) pursuant to the foregoing guarantees are primary, joint and several, and irrevocable, irrespective of the genuineness, validity, regularity or enforceability of the Agreement, and without regard to any circumstance that might constitute a legal or equitable discharge of a guarantor. This is a guaranty of payment and performance and not a guaranty of collection. This is an absolute, unconditional, primary and continuing obligation and will remain in full force and effect until all amounts owed to Lender pursuant to the Agreement are satisfied in full. I agree to be bound by all of the terms and conditions contained in the Agreement and applicable to the Signing Principal. I further agree that Lender may extend, transfer and amend the Agreement and I agree to be bound by all such changes. I waive all defenses, legal or equitable, otherwise available to me, and I waive all notices to which I might otherwise be entitled by law, including notices of protest, presentment, transfer, demand and default. I agree Lender may proceed against me separately without first proceeding against Borrower, any collateral or any other Guarantor. This Guaranty will not be discharged or affected by my death and will bind my heirs and personal representatives. I hereby authorize Lender, its agents and representatives and any credit reporting agency engaged by Lender, to (a) investigate any references given or any other statements or data obtained from or about me for purposes of this guaranty, the Agreement, and any associated documentation, and (b) pull credit reports at any time now and for so long as Borrower or I may have any obligation to Lender as a consequence of this Guaranty or the Agreement, including for Lender's collection processes and its credit evaluations, including to determine Borrower's or my eligibility to enter into the Agreement or any future agreement with Lender. I hereby expressly consent to receive notices and transact business by electronic means.<br>I ACKNOWLEDGE AND AGREE THAT THIS GUARANTY, THE AGREEMENT AND ALL ASSOCIATED DOCUMENTATION SHALL BE INTERPRETED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF UTAH, APPLIED WITHOUT GIVING EFFECT TO CONFLICT-OF-LAWS PRINCIPLES.<br>**I ACKNOWLEDGE AND AGREE THAT THIS GUARANTY IS GOVERNED BY THE ARBITRATION AGREEMENT SET FORTH ABOVE IN *SECTION 19* (INCLUDING *SECTIONS 19.1 – 19.6*). WITH RESPECT TO ANY LEGAL ACTION OR PROCEEDING OF ANY KIND ARISING OUT OF, RELATED TO, IN CONNECTION WITH OR INCIDENT TO THIS GUARANTY, THE AGREEMENT, OR ANY ASSOCIATED DOCUMENTATION, I WAIVE MY RIGHT TO A JURY AND AGREE TO ARBITRATE ANY CLAIMS ON AN INDIVIDUAL BASIS AS SET FORTH IN THE ARBITRATION AGREEMENT ABOVE.** <br>

**Guarantor Signatures**

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|:---|:---|
| **GUARANTOR SIGNATURE**<br> ![](igi_ex101img2.jpg) | **NAME (TYPE OR PRINT)**<br>James Villa |

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Business Loan Agreement (Weekly Payment) \| Rev. 12.22 \| Page 14 of 14

## Exhibit 10.2

**EXHIBIT 10.2**

**<u>FINANCING AND SECURITY AGREEMENT</u>**

This Financing and Security Agreement ("**Agreement**") is between Infinite Group Inc., a Corporation ("**Client**") and **Celtic Bank Corporation** ("**Celtic**").

**BlueVine Inc.** ("**BlueVine**") will service the Client and all correspondence regarding Client's financing should be directed to BlueVine via www.bluevine.com or call (888) 216-9619.

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| | | |
|:---|:---|:---|
| 1.  | **<u>Definitions and Index to Definitions.</u>** The following terms used herein shall have the following meanings. All capitalized terms not herein defined shall have the meanings set forth in the UCC: | **<u>Definitions and Index to Definitions.</u>** The following terms used herein shall have the following meanings. All capitalized terms not herein defined shall have the meanings set forth in the UCC: |
|  | 1.1.  | "**Business Day**" - A day on which a commercial bank is open for business in the Chosen State. |
|  | 1.2.  | "**Chosen State**" - The State of Utah. |
|  | 1.3.  | "**Collateral**" - All Client's now owned and hereafter acquired Accounts, Chattel Paper, Goods (including Inventory and Equipment), Instruments, Investment Property, Documents, Letter of Credit Rights, Commercial Tort Claims, Deposit Accounts, and General Intangibles, all cash and non-cash proceeds (including insurance proceeds) thereof, all products thereof and all additions and accessions thereto, substitutions therefor and replacements thereof. |
|  | 1.4.  | "**Complete Termination**" - Complete Termination occurs upon satisfaction of payment in full of all Obligations of Client to Celtic and execution and delivery by Client to Celtic of a general release acceptable to Celtic in the form attached hereto as Exhibit A. |
|  | 1.5.  | "**Dashboard**" - See Section 3.1. |
|  | 1.6.  | "**Designated Funding Account**" **and** "**Designated Repayment** |
|  |  | **Account**" - See Sections 3.2 and 3.5. |
|  | 1.7.  | "**Draw**" and "**Draws**" - See Section 2.1. |
|  | 1.8.  | "**Draw Credit Limit**" - See Section 2.2. |
|  | 1.9.  | "**Draw Fee**" - As defined in the Pricing and Terms Page. |
|  | 1.10.  | "**Event of Default**" - The following events will constitute an Event of Default hereunder: |
|  |  | Client defaults in the payment of any Obligations or in the performance of any provision hereof or of any other agreement now or hereafter entered into with Celtic, or any warranty or representation contained herein proves to be false in any way, howsoever minor; |

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Page 1 of 19

1.10.2. Client attempts to revoke or cancel the automatic payment authorization set forth in Section 7 or an ACH payment initiated by Celtic is returned unpaid by Client's bank;

1.10.3. Client or any Guarantor of the Obligations becomes subject to any debtor-relief proceedings;

1.10.4. Any such Guarantor fails to perform or observe any of such Guarantor's obligations to Celtic or shall notify Celtic of its intention to rescind, modify, terminate or revoke any guaranty of the Obligations, or any such guaranty shall cease to be in full force and effect for any reason whatever;

1.10.5. Client merges with or is acquired by another party, the occurrence of a material change to Client's business, the death of an owner of Client, the sale of assets of Client outside of the ordinary course of business, or the suffering of judgements or liens upon Client with respect to other parties; or

1.10.6. Celtic for any reason, in good faith, deems itself insecure with respect to the prospect of repayment or performance of the Obligations.

1.10.7. Client is in default under any loan, security agreement or any other agreement, in favor of any other party to whom Client owes a debt.

1.11. "**Failed Payment Fee**" - As defined in the Pricing and Terms Page.

1.12. "**Financing**" - All credit and other financial accommodations that may be extended by Celtic to Client hereunder, including without limitation under Section 2 below.

1.13. "**Flex Credit**" - See Section 2.1.

1.14. "**Flex Credit Fees**" - See Section 3.4.1 and as set forth in the "Flex Credit" portion of the Pricing and Terms Page.

1.15. "**Guarantor**" - Each person that has entered into a form of guarantee agreement in favor of Celtic that guarantees, in whole or in part, Client's performance of the Obligations hereunder.

1.16. "**Installment**" - See Section 3.4.

1.17. "**Interest**" - See Section 3.4, and as set forth in the "Flex Credit" portion of the Pricing and Terms Page.

1.18. "**Late Interest**" - As defined in Section 4.1.3 and in the "Flex Credit" portion of the Pricing and Terms Page.

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|  | 1.19.  | "**Obligations**" - All present and future obligations owing by Client to Celtic whether arising hereunder or otherwise, and whether arising before, during or after the commencement of any bankruptcy case in which Client is a Debtor. |
|  | 1.20.  | "**Parties**" - Client and Celtic. |
|  | 1.21.  | "**Open Draws Limit**" - The maximum number of concurrent outstanding Draws available to the Client, as specified on the Client's Pricing and Terms Page. |
|  | 1.22.  | "**Plan**" - See Section 2.1. |
|  | 1.23.  | "**Pricing and Terms Page**" - A designated page on the Client's online account at BlueVine's website detailing Client's specific pricing and terms, as amended from time to time by Celtic. |
|  | 1.24.  | "**Prior Agreement**" - The prior effective Financing, Invoice Purchase and Security Agreement entered into between the Parties, if any. |
|  | 1.25.  | "**Repayment Frequency**" - See Section 3.4, and as set forth in the "Flex Credit" portion of the Pricing and Terms Page. |
|  | 1.26.  | "**UCC**" - The Uniform Commercial Code as adopted in the Chosen |
|  |  | State. |
| 2.  | **<u>General.</u>** | **<u>General.</u>** |
|  | 2.1.  | Celtic offers revolving line of credit plans (a "Plan") pursuant to which a Client may obtain draws from Celtic (individually a "Draw" and collectively "Draws"). (The Plan is sometimes referred to as "Flex Credit.") A Client may apply, and a Client may be approved by Celtic, for Draws under a Plan. |
|  | 2.2.  | Draws are subject to a "Draw Credit Limit". (The Draw Credit Limit is sometimes referred to in this Agreement as the "Credit Limit".) The amount available for Draws under the Credit Limit shall increase to the extent Draws are repaid. If Client's application for a |
|  |  | Plan is approved, Celtic will notify Client of the initial Draw Credit Limit. Celtic may increase or decrease the Credit Limit from time to time. |
|  | 2.3.  | Client acknowledges that Celtic performs regular, frequent account reviews of Clients under Plans, including without limitation with respect to credit reports, banking information, potential fraudulent activity, and financial performance under the Financing. Based on such reviews and other data, Celtic may at any time reduce the Client's Credit Limit or suspend or decline further Draws. |

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| 3.  | **<u>Flex Credit.</u>**  | **<u>Flex Credit.</u>**  | **<u>Flex Credit.</u>**  |
|  | 3.1.  | To obtain a Draw, Client will submit a request through Client's "dashboard" on BlueVine's website (the "Dashboard"). A Draw may not exceed the Draw Credit Limit less the sum of (i) the aggregate amount of unpaid principal of all Draws then outstanding and (ii) any other Obligations that may be accrued and outstanding. A Draw may not exceed the "Open Draws Limit," as set forth on the "Pricing and Terms" page. | To obtain a Draw, Client will submit a request through Client's "dashboard" on BlueVine's website (the "Dashboard"). A Draw may not exceed the Draw Credit Limit less the sum of (i) the aggregate amount of unpaid principal of all Draws then outstanding and (ii) any other Obligations that may be accrued and outstanding. A Draw may not exceed the "Open Draws Limit," as set forth on the "Pricing and Terms" page. |
|  | 3.2.  | Each Draw shall be transmitted by Celtic to a deposit account at a bank designated by Client on the Dashboard (the "Designated Funding Account"). Client agrees to maintain and update information regarding the Designated Funding Account. Client certifies and agrees that the Designated Funding Account is used for exclusively business purposes. | Each Draw shall be transmitted by Celtic to a deposit account at a bank designated by Client on the Dashboard (the "Designated Funding Account"). Client agrees to maintain and update information regarding the Designated Funding Account. Client certifies and agrees that the Designated Funding Account is used for exclusively business purposes. |
|  | 3.3.  | A "Draw Fee," as set forth on the "Pricing and Terms" page, shall be imposed in connection with each Draw obtained. Each Draw Fee shall be calculated by applying the rate set forth on the "Pricing and Terms" page to the gross amount of the Draw (that is, the rate is applied prior to deduction of amounts from the proceeds of the Draw). | A "Draw Fee," as set forth on the "Pricing and Terms" page, shall be imposed in connection with each Draw obtained. Each Draw Fee shall be calculated by applying the rate set forth on the "Pricing and Terms" page to the gross amount of the Draw (that is, the rate is applied prior to deduction of amounts from the proceeds of the Draw). |
|  | 3.4. | The "Pricing and Terms" page on the Dashboard at the time the Client requests the Draw will establish both the interest (the "Interest") that each Draw shall bear on the unpaid principal balance of the Draw and the amounts and number of consecutive periodic (weekly or monthly) installments ("Repayment Frequency" and "Installment", as applicable) required to repay the Draw. | The "Pricing and Terms" page on the Dashboard at the time the Client requests the Draw will establish both the interest (the "Interest") that each Draw shall bear on the unpaid principal balance of the Draw and the amounts and number of consecutive periodic (weekly or monthly) installments ("Repayment Frequency" and "Installment", as applicable) required to repay the Draw. |
|  |  | 3.4.1.  | The Interest, Late Interest, Draw Fee and Failed Payment Fee (as defined below) (collectively, the "Flex Credit Fees") for the initial Draw shall be the Flex Credit Fees on all subsequent Draws unless and until Celtic provides Client with a notice of a change in one or more of the Flex Credit Fees. The changed Flex Credit Fee(s) shall apply to all Draws obtained after such |
|  |  |  | notice is issued by Celtic, unless and until Celtic provides Client with a subsequent notice or notices of changes in one or more of the Flex Credit Fees. For the avoidance of doubt, any change in the Flex Credit Fees will not apply to the Flex Credit Fees on any Draws obtained prior to the date the notice is issued by Celtic. The Flex Credit Fees applicable to each Draw will be set forth on the Dashboard. |
|  |  | 3.4.2.  | If a Draw has a monthly Repayment Frequency, Client acknowledges and agrees that Celtic may in its sole discretion and upon notice to Client change the Repayment Frequency of the Draw to weekly. Celtic will calculate a new Installment amount sufficient to repay the remaining balance of the Draw with interest in full in substantially equal weekly Installments over the remaining original payment schedule of the Draw, which new Installment amount shall be set forth in the notice, and Client agrees to pay such new payment amount as the Installments for the remaining balance of the Draw. |

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|  | 3.5.  | Each Installment shall be paid to BlueVine as Servicer on behalf of Celtic, by BlueVine initiating debit entries to a deposit account at a bank designated by Client on the Dashboard (the "Designated Repayment Account") through the automated clearing house ("ACH") network on or before the due date thereof, as set forth in more detail in Section 7 below. |
|  | 3.6.  | Payments with respect to a Draw shall be deemed to be late if either (a) two consecutive Installments shall not be paid by their respective due dates, in which case payments shall be deemed to be late effective as of the due date of the first overdue Installment, or (b) all amounts outstanding under a Draw are not paid in full on the maturity date of the Draw. If payments with respect to a Draw are deemed to be late, the Draw shall be subject to a Late Interest calculated in accordance with the "Pricing and Terms" page. The Late Interest shall continue to be imposed until the date on which the overdue payments are paid to Celtic in full. For the avoidance of doubt, interest resulting from application of the Late Interest shall be in addition to and not in substitution of interest resulting from application of the Interest, which shall also continue to apply to a Draw one or more payments with respect to which are deemed to be late. |
|  | 3.7.  | Each Draw may be prepaid in whole or in part at any time without incurring additional fees; provided, that Client may not make prepayments on any Draw within the first two (2) Business Days of making any such Draw. If a Draw is prepaid in part, Celtic will calculate a new Installment amount sufficient to repay the remaining balance of the Draw with interest in full in substantially |
|  |  | equal Installments at the Repayment Frequency applicable to the Draw over the remaining original payment schedule of the Draw, and Client agrees to pay such new payment amount as the Installments for the remaining balance of the Draw. |
|  | 3.8.  | In the Event of Default, Celtic may at its option require the immediate repayment in full of any and all Draws then outstanding, including accrued but unpaid interest. |
|  | 3.9.  | In Celtic's sole discretion, Celtic may allow Client to obtain a Draw that is not applied or subject to the Flex Credit Limit (a "Special Draw"). A Special Draw shall first be applied to satisfy Client's accrued and outstanding Obligations. While a Special Draw is outstanding, Client may not have any additional Draws outstanding (including other Special Draws). Client acknowledges and agrees that a Special Draw does not increase or act as a waiver of the Flex Credit Limit applicable to all other Draws, and that payments of principal made on a Special Draw do not increase the amount available to borrow under the Flex Credit Limit. Celtic may in its discretion offer Client modified terms for a Special Draw including, but not limited to, repayment term. Except as provided in this Section 3.9, all of the terms and conditions of this Agreement applicable to Draws also apply to Special Draws. |
| 4.  | **<u>Fees and Expenses.</u>**  | **<u>Fees and Expenses.</u>**  |
|  | 4.1.  | Client shall pay the follow fees and expenses to Celtic in the amounts set forth in the Pricing and Terms Page and at the time specified below: |

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|  |  | 4.1.1.  | **Interest.** Interest on each Draw, when Installments are due in accordance with the Repayment Frequency. |
|  |  | 4.1.2.  | **Draw Fee.** With respect to each Draw made by Celtic to Client under Section 3.1, will be deducted from the Draw amount. |
|  |  | 4.1.3.  | **Late Interest.** Late Interest on a Draw, due on demand. |
|  |  | 4.1.4.  | **Failed Payment Fee.** Any Failed Payment Fee, due on demand. |
|  |  | 4.1.5.  | **Payment Processing Fees.** Wire fees and ACH fees will be due upon funding and will be deducted from the Draw amount. |
|  |  | 4.1.6.  | **Payment by Credit Card.** In the event Celtic accepts credit card payments and Client makes a payment to Celtic using a |
|  |  |  | credit card, Celtic shall credit to the obligation of the Client, the amount credited to Celtic by Celtic's credit card processor, net of any processing fees or surcharge to the extent permitted by card network rules and applicable law. |
|  | 4.2.  | Application of Payments. Celtic shall have the continuing and exclusive right to apply or reverse and re-apply any payment and any and all proceeds of Collateral to any portion of the Obligations as determined in Celtic's sole discretion. | Application of Payments. Celtic shall have the continuing and exclusive right to apply or reverse and re-apply any payment and any and all proceeds of Collateral to any portion of the Obligations as determined in Celtic's sole discretion. |
| 5.  | **<u>Security Interest.</u>**  | **<u>Security Interest.</u>**  | **<u>Security Interest.</u>**  |
|  | 5.1.  | To secure the Obligations, Client hereby grants to Celtic and to BlueVine, as the collateral agent for Celtic, a continuing first priority security interest in the Collateral. Client hereby irrevocably consents to BlueVine (and any successor to BlueVine designated by Celtic) serving as collateral agent for Celtic and performing any and all acts in connection with such role and hereby acknowledges that Celtic may (1) grant BlueVine a participation in the Obligations and the security interest in the Collateral, and/or (2) assign such Obligations and security interest to BlueVine, and Client hereby irrevocably consents to any such grant and/or assignment and, in addition to the provisions of section 6.1.6 hereof, to the filing of any financing statements or other documents, whether prior to, in connection with, or following any such grant and/or assignment, as may be necessary or desirable to effect or evidence any such grant and/or assignment. | To secure the Obligations, Client hereby grants to Celtic and to BlueVine, as the collateral agent for Celtic, a continuing first priority security interest in the Collateral. Client hereby irrevocably consents to BlueVine (and any successor to BlueVine designated by Celtic) serving as collateral agent for Celtic and performing any and all acts in connection with such role and hereby acknowledges that Celtic may (1) grant BlueVine a participation in the Obligations and the security interest in the Collateral, and/or (2) assign such Obligations and security interest to BlueVine, and Client hereby irrevocably consents to any such grant and/or assignment and, in addition to the provisions of section 6.1.6 hereof, to the filing of any financing statements or other documents, whether prior to, in connection with, or following any such grant and/or assignment, as may be necessary or desirable to effect or evidence any such grant and/or assignment. |
| 6.  | **<u>Authorization to Celtic.</u>**  | **<u>Authorization to Celtic.</u>**  | **<u>Authorization to Celtic.</u>**  |
|  | 6.1.  | Client irrevocably authorizes Celtic at Client's expense, to exercise at any time any of the following powers until all of the Obligations have been paid in full: | Client irrevocably authorizes Celtic at Client's expense, to exercise at any time any of the following powers until all of the Obligations have been paid in full: |
|  |  | 6.1.1.  | Receive, take, endorse, assign, deliver, accept and deposit, in the name of Celtic or Client, proceeds of any Collateral; |

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| 6.1.2.  | Take or bring, in the name of Celtic or Client, all steps, actions, suits or proceedings deemed by Celtic necessary or desirable to effect collection of or other realization upon any Collateral; |
| 6.1.3.  | With respect to any of the following established or issued for the benefit of Client, either individually or as a member of a class or group, file any claim under (i) any bond or (ii) under any trust fund; |
| 6.1.4. |  |
|  | Pay any sums necessary to discharge any lien or encumbrance which is senior to Celtic's security interest in the Collateral, which sums shall be included as Obligations hereunder, and in connection with which sums the Late Charge and the Late Interest, as applicable, shall accrue and shall be immediately due and payable; and |

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6.1.5. File in the name of Client or Celtic or both:

(a) Mechanics lien or related notices, or

(b) Claims under any payment bond, in connection with goods or services sold by Client in connection with the improvement of realty.

6.1.6. File any initial financing statements and amendments thereto that:

(a) Indicate the collateral as all assets of the Client or words of similar effect, regardless of whether any particular asset comprised in the collateral falls within the scope of Article 9 of the UCC, or indicate the collateral as being of an equal or lesser scope or with greater detail;

(b) Identifies as the secured party, Celtic, Celtic's designated collateral agent, or Celtic's designated secured party of record;

(c) Contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including (i) whether the Client is an organization, the type of organization, and any organization identification number issued to the Client and, (ii) in the case of a financing statement filed as a fixture filing or indicating collateral as as-extracted collateral or timber to be cut, a sufficient description of real property to which the collateral relates; and

(d) Contain a notification that the Client has granted a negative pledge to Celtic, and that any subsequent lienor may be tortuously interfering with Celtic's rights.

6.1.7. Celtic may offset any amount due by Client hereunder or otherwise against any amounts that Celtic owes Client whether hereunder or otherwise.

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7.  **<u>ACH Authorization.</u>**

7.1. Client hereby authorizes each of Celtic and BlueVine (and each such party's respective agents or assignees) to initiate credit entries to the Designated Funding Account through the ACH network. Client also hereby authorizes Celtic and BlueVine to initiate debit entries to the Designated Repayment Account through the ACH network to pay to Celtic automatically any of the Obligations, including without limitation (i) any amounts due to Celtic under the facility provided for in Sections 2 and 3 hereof and (ii) each Installment (including interest calculated by application of the applicable Interest) on or after the due date, (iii) all Late Charges, interest resulting from Late Interest, Failed Payment Fees and Payment Processing Fees upon demand, and (iv) any other amounts that Client may owe to Celtic under this Agreement. Client hereby agrees to be bound by National Automated Clearing House Association rules for business-related debits and credits.

7.2. Client agrees to maintain sufficient immediately available funds in the Designated Repayment Account at all times to cover debit entries. In the event there are insufficient funds in the Designated Repayment Account to cover any amount due under this Agreement, including any of the Obligations outlined in Section 7.1, Client hereby authorizes each of Celtic and BlueVine (and each such party€™s respective agents or assignees) to treat any other of Client€™s deposit accounts linked on the Dashboard as the "Designated Repayment Account."

7.3. In the event that a debit entry for an Installment, late charge, returned entry fee or other amount due is returned unpaid, such amount shall be paid to Celtic immediately upon demand. If a debit entry to the Designated Repayment Account to make any payment hereunder, is returned unpaid, a Failed Payment Fee may be imposed.

7.4. Client represents that the Designated Funding Account and Designated Repayment Account are established primarily for business purposes and not for personal, family or household purposes, and Client acknowledges that Celtic has relied upon this representation in entering into this Agreement.

7.5. Client acknowledges and agrees that the foregoing automatic payment authorization is required as a condition to extending Financing under this Agreement, and therefore the automatic payment authorization may not be revoked or cancelled by Client while any Obligations are outstanding. If Client attempts to purportedly revoke or cancel the automatic payment authorization by notifying its bank or otherwise, Client acknowledges and agrees that such act shall constitute an Event of Default hereunder.

8.  **<u>Covenants by Client.</u>**

8.1. After an Event of Default, Client shall not (a) grant any extension of time for payment of any of its Accounts, (b) compromise or settle any of its Accounts for less than the full amount thereof, (c) release in whole or in part any of Client's Account Debtors, or (d) grant any credits, discounts, allowances, deductions, return authorizations or the like with respect to any Accounts.

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8.2. Before sending any Invoice to an Account Debtor, Client shall mark same with such notice of assignment as Celtic may require following the occurrence of an Event of Default.

8.3. Client shall pay when due all payroll and other taxes, and shall provide proof thereof to Celtic in such form as Celtic shall reasonably require.

8.4. Client shall not create, incur, assume or permit to exist any lien upon or with respect to any assets in which Celtic now or hereafter holds a security interest.

8.5. The proceeds of any advances hereunder, including for the avoidance of doubt under Sections 2 or 3 hereof, shall not be used for personal, family, or household purposes.

8.6. Client shall reimburse Celtic for all costs and expenses, including attorneys' fees, which Celtic incurs in enforcing any judgment rendered in connection with this Agreement. This provision is severable from all other provisions hereof and shall survive, and not be deemed merged into, such judgment.

8.7. Client shall use the proceeds of all advances hereunder solely for purchasing or otherwise acquiring the following specific products or services for its business: (i) specified merchandise, (ii) insurance, (iii) services or equipment, (iv) inventory and/or other specified goods, (v) construction of and/or improvement to facilities, (vi) the financing of specified sales transactions, and (vii) public work projects and/or education services.

8.8. Client shall give Celtic and BlueVine prompt prior written notice of any proposed change to its charter, articles of incorporation, bylaws or other organizational documents, including without limitation any proposed change in Client's legal name or proposed use of a fictitious business name. Client acknowledges that any such change may not be acceptable to Celtic or BlueVine, and that Client will be deemed to be in default if Client adopts an unacceptable change. As a condition to accepting a change, Celtic and/or BlueVine may require that Client take further action, including without limitation executing a document reaffirming its obligations under this Agreement.

9.  **<u>Representation and Warranties.</u>** Client represents and warrants that:

9.1. It is fully authorized to enter into this Agreement and to perform hereunder;

9.2. This Agreement constitutes its legal, valid and binding obligation; and

9.3. Client is solvent and in good standing in the jurisdiction of its organization.

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| 10.  | **<u>Indemnification.</u>**  | **<u>Indemnification.</u>**  | **<u>Indemnification.</u>**  |
|  | 10.1.  | Client agrees to indemnify Celtic and BlueVine, and their respective parents, directors, shareholders, agents, and employees and assigns, against and hold Celtic and BlueVine, and their respective parents, directors, shareholders, agents, employees and assigns, harmless from any and all manner of suits, claims, liabilities, demands and expenses (including reasonable attorneys' fees and collection costs) resulting from or arising out of this Agreement, whether directly or indirectly, including the transactions or relationships contemplated hereby (including the enforcement of this Agreement), and any failure by Client to perform or observe its obligations under this Agreement. Client agrees that BlueVine is a third-party beneficiary to this Agreement and is entitled to the rights and benefits hereunder and may enforce the provisions hereof as if it were a party hereto. | Client agrees to indemnify Celtic and BlueVine, and their respective parents, directors, shareholders, agents, and employees and assigns, against and hold Celtic and BlueVine, and their respective parents, directors, shareholders, agents, employees and assigns, harmless from any and all manner of suits, claims, liabilities, demands and expenses (including reasonable attorneys' fees and collection costs) resulting from or arising out of this Agreement, whether directly or indirectly, including the transactions or relationships contemplated hereby (including the enforcement of this Agreement), and any failure by Client to perform or observe its obligations under this Agreement. Client agrees that BlueVine is a third-party beneficiary to this Agreement and is entitled to the rights and benefits hereunder and may enforce the provisions hereof as if it were a party hereto. |
| 11.  | **<u>Disclaimer of Liability.</u>**  | **<u>Disclaimer of Liability.</u>**  | **<u>Disclaimer of Liability.</u>**  |
|  | 11.1.  | In no event will Celtic be liable to Client for any lost profits, lost savings or other consequential, incidental or special damages resulting from or arising out of or in connection with this agreement, the transactions or relationships contemplated hereby or Celtic's performance or failure to perform hereunder, even if Celtic has been advised of the possibility of such damages. | In no event will Celtic be liable to Client for any lost profits, lost savings or other consequential, incidental or special damages resulting from or arising out of or in connection with this agreement, the transactions or relationships contemplated hereby or Celtic's performance or failure to perform hereunder, even if Celtic has been advised of the possibility of such damages. |
| 12.  | **<u>Default.</u>** | **<u>Default.</u>** | **<u>Default.</u>** |
|  | 12.1.  | **Waiver of Notice.** CELTIC'S FAILURE TO CHARGE OR ACCRUE INTEREST OR FEES AT ANY "DEFAULT" OR "PAST DUE" RATE SHALL NOT BE DEEMED A WAIVER BY CELTIC OF ITS CLAIM THERETO. | **Waiver of Notice.** CELTIC'S FAILURE TO CHARGE OR ACCRUE INTEREST OR FEES AT ANY "DEFAULT" OR "PAST DUE" RATE SHALL NOT BE DEEMED A WAIVER BY CELTIC OF ITS CLAIM THERETO. |
|  | 12.2. |  |  |
|  |  | **Effect of Default.** Upon the occurrence of any Event of Default, in addition to any rights Celtic has under this Agreement or applicable law: | **Effect of Default.** Upon the occurrence of any Event of Default, in addition to any rights Celtic has under this Agreement or applicable law: |
|  |  | 12.2.1.  | Celtic may immediately terminate this Agreement, at which time all Obligations shall immediately become due and payable without notice. |
|  |  | 12.2.2.  | The Late Charge or Late Interest, as applicable, shall accrue and is payable on demand on any Obligation not paid when due. |
|  |  | 12.2.3.  | Celtic may take or bring, in the name of Client or Celtic, all steps, actions, suits or proceedings deemed by Celtic necessary or desirable to effect collection of or other realization upon any Collateral. |
|  | 12.3.  | **Standards for Exercising Remedies.** | **Standards for Exercising Remedies.** |
|  |  | 12.1.1.  | To the extent that applicable law imposes duties on Celtic to exercise remedies in a commercially reasonable manner, Client acknowledges and agrees that it is not commercially unreasonable for Celtic: |

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| (a)  | To not incur expenses to prepare Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition; |
| (b)  | To fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third-party consents for the collection or disposition of Collateral to be collected or disposed of; |
| (c)  | To fail to exercise collection remedies against Account Debtors or other persons obligated on Collateral or to remove liens or encumbrances on or any adverse claims against Collateral; |
| (d)  | To exercise collection remedies against Account Debtors and other persons obligated on Collateral directly or through the use of collection agencies and other collection specialists; |
| (e)  | To advertise dispositions of Collateral through publications or media of general circulation, whether or not the |
|  | Collateral is of a specialized nature; |
| (f) |  |
|  | To hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the collateral is of a specialized nature; |
| (g)  | To dispose of Collateral by using Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets; |
| (h)  | To dispose of assets in wholesale rather than retail markets; |
| (i)  | To disclaim all disposition warranties; or |
| (j)  | To purchase insurance or credit enhancements to insure Celtic against risks of loss, collection or disposition of Collateral or to provide to Celtic a guaranteed return from the collection or disposition of Collateral. |

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12.1.2. Client acknowledges that the purpose of this Section 12.3 is to provide non-exhaustive indications of what actions or omissions by Celtic would be commercially reasonable in Celtic's exercise of remedies against the Collateral and that other actions or omissions by Celtic shall be deemed commercially reasonable solely on account of not being indicated in this Section. Without limitation upon the foregoing, nothing contained herein shall be construed to grant any rights to Client or to impose any duties on Celtic that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section 12.3.

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| 13.  | **<u>No Lien Termination without Release.</u>**  | **<u>No Lien Termination without Release.</u>**  |
|  | 13.1.  | In recognition of Celtic's right to have its attorneys' fees and other expenses incurred in connection with this Agreement secured by the Collateral, notwithstanding payment in full of all Obligations by Client, Celtic shall not be required to record any terminations or satisfactions of any of Celtic's liens on the Collateral unless and until Complete Termination has occurred. Client understands that this provision constitutes a waiver of its rights under §9-513 of the UCC. |
| 14.  | **<u>Conflict.</u>** | **<u>Conflict.</u>** |
|  | 14.1. |  |
|  |  | Unless otherwise expressly stated in any other agreement between Celtic and Client, if a conflict exists between the provisions of this Agreement and the provisions of such other agreement, the provisions of this Agreement shall control. |
| 15.  | **<u>Severability.</u>**  | **<u>Severability.</u>**  |
|  | 15.1.  | In the event any one or more of the provisions contained in this Agreement is held to be invalid, illegal or unenforceable in any respect, then such provision shall be ineffective only to the extent of such prohibition or invalidity, and the validity, legality, and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. |
| 16.  | **<u>Relationship of Parties.</u>**  | **<u>Relationship of Parties.</u>**  |
|  | 16.1.  | Celtic is not and shall not be a fiduciary of the Client, although Client may be a fiduciary of Celtic. |
| 17.  | **<u>Attorneys' Fees.</u>**  | **<u>Attorneys' Fees.</u>**  |
|  | 17.1.  | Client agrees to reimburse Celtic on demand for the actual amount of all costs and expenses, including attorneys' fees, which Celtic has incurred or may incur in enforcing this Agreement. |
| 18.  | **<u>Entire Agreement.</u>**  | **<u>Entire Agreement.</u>**  |
|  | 18.1.  | No promises of any kind have been made by Celtic or any third party to induce Client to execute this Agreement. No course of dealing, course of performance or trade usage, and no parole evidence of any nature, shall be used to supplement or modify any terms of this Agreement. |

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|:---|:---|:---|
| 19.  | **<u>ARBITRATION REQUIRED; CLASS ACTION WAIVER.</u>**  | **<u>ARBITRATION REQUIRED; CLASS ACTION WAIVER.</u>**  |
|  | 19.1. |  |
|  |  | **TO THE EXTENT NOT PROHIBITED BY LAW, TO THE EXTENT THAT A CLAIM ARISES OUT OF, OR IN RELATION TO THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, THE TERMS, CONSTRUCTION, INTERPRETATION, PERFORMANCE, ENFORCEMENT, TERMINATION, BREACH, OR ENFORCEABILITY, INCLUDING THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF THIS AGREEMENT TO ARBITRATE (A "CLAIM"), THE PARTIES AGREE THAT THE CLAIM SHALL BE RESOLVED EXCLUSIVELY BY BINDING INDIVIDUAL ARBITRATION IN THE STATE IN WHICH CLIENT RESIDES (UNLESS THE PARTIES MUTUALLY AGREE TO CONDUCT THE ARBITRATION IN ANOTHER STATE), SUBJECT TO SUBSECTION 19.11. HEREOF.** |
|  | 19.2.  | **FOR PURPOSES OF THIS ARBITRATION PROVISION, THE WORDS "CLAIM" AND "CLAIMS" ARE GIVEN THE BROADEST POSSIBLE MEANING AND INCLUDE, WITHOUT LIMITATION (A) ALL CLAIMS, DISPUTES, OR CONTROVERSIES ARISING FROM OR RELATING DIRECTLY OR INDIRECTLY TO THIS ARBITRATION PROVISION, THE VALIDITY AND SCOPE OF THIS ARBITRATION PROVISION AND ANY CLAIM OR ATTEMPT TO SET ASIDE THIS ARBITRATION PROVISION; (B) ALL FEDERAL OR STATE LAW CLAIMS, DISPUTES OR CONTROVERSIES, ARISING FROM OR RELATING DIRECTLY OR INDIRECTLY TO THE AGREEMENT, THE INFORMATION CLIENT GAVE CELTIC BEFORE ENTERING INTO THIS AGREEMENT, INCLUDING THE CUSTOMER INFORMATION APPLICATION, AND/OR ANY PAST AGREEMENT OR AGREEMENTS BETWEEN CLIENT AND CELTIC; (C) ALL COUNTERCLAIMS, CROSSCLAIMS AND THIRD PARTY CLAIMS; (D) ALL COMMON LAW CLAIMS, BASED UPON CONTRACT, TORT, FRAUD, OR OTHER INTENTIONAL TORTS; (E) ALL CLAIMS BASED UPON A VIOLATION OF ANY STATE OR FEDERAL CONSTITUTION, STATUTE OR REGULATION; (F) ALL CLAIMS ASSERTED BY CELTIC AGAINST CLIENT, INCLUDING CLAIMS FOR MONEY DAMAGES TO COLLECT ANY SUM CELTIC CLAIMS THAT CLIENT OWES TO CELTIC; (G) ALL CLAIMS ASSERTED BY CLIENT INDIVIDUALLY AGAINST CELTIC AND/OR ANY OF CELTIC'S EMPLOYEES, AGENTS, COLLECTION AGENCIES OR OTHER THIRD PARTIES RETAINED TO COLLECT DEBTS, DIRECTORS, OFFICERS, SHAREHOLDERS, GOVERNORS, MANAGERS, MEMBERS, PARENT COMPANY OR AFFILIATED ENTITIES (HEREINAFTER COLLECTIVELY REFERRED TO AS "RELATED THIRD PARTIES"), INCLUDING CLAIMS FOR MONEY DAMAGES AND/OR EQUITABLE OR INJUNCTIVE RELIEF; AND (H) ALL CLAIMS ASSERTED ON CLIENT'S BEHALF BY ANOTHER PERSON.** |
|  | 19.3.  | **THE PARTIES ACKNOWLEDGE THAT THIS AGREEMENT EVIDENCES A TRANSACTION INVOLVING INTERSTATE COMMERCE. ANY ARBITRATION CONDUCTED PURSUANT TO THE TERMS OF THIS AGREEMENT SHALL BE GOVERNED BY THE FEDERAL ARBITRATION ACT (9 U.S.C.§§ 1-16).** |

---

Page 13 of 19

19.4. **EACH PARTY WAIVES THE RIGHT TO LITIGATE IN COURT OR AN ARBITRATION PROCEEDING ANY DISPUTE AS A CLASS ACTION, EITHER AS A MEMBER OF A CLASS OR AS A REPRESENTATIVE, OR TO ACT AS A PRIVATE ATTORNEY GENERAL. THE ARBITRATOR SHALL NOT CONDUCT A CLASS ARBITRATION AND SHALL NOT ALLOW CLIENT TO SERVE AS A REPRESENTATIVE, PRIVATE ATTORNEY GENERAL, OR IN ANY OTHER REPRESENTATIVE CAPACITY.** 

19.5. **NOTHING IN THIS ARBITRATION PROVISION, OR OTHERWISE, NOR THE COMMENCEMENT OR PENDENCY OF ANY PROCEEDING, SHALL LIMIT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO EXERCISE ANY SELFHELP RIGHTS OR ANY OTHER RIGHTS OR REMEDIES AVAILABLE TO IT BY CONTRACT OR APPLICABLE STATUTORY OR CASE LAW (INCLUDING BUT NOT LIMITED TO THE FILING OF AN INVOLUNTARY PETITION IN BANKRUPTCY, THE RIGHT OF SET-OFF, ATTACHMENT, RECOUPMENT, FORECLOSURE, OR REPOSSESSION) WITH RESPECT TO THE EXTENSION OF CREDIT, THE PROTECTION AND PRESERVATION OF COLLATERAL, THE LIQUIDATION AND REALIZATION OF COLLATERAL, THE PROTECTION, CONTINUATION AND PRESERVATION OF LIEN RIGHTS AND LIEN PRIORITIES, THE COLLECTION OF INDEBTEDNESS, AND THE PROCESSING AND PAYMENT OR RETURN OF CHECKS, WHETHER SUCH OCCURS BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING. THE INSTITUTION AND MAINTENANCE OF AN ACTION FOR JUDICIAL RELIEF OR PURSUIT OF PROVISIONAL OR ANCILLARY RIGHTS OR REMEDIES OR EXERCISE OF SELF-HELP REMEDIES, ALL AS PROVIDED HEREIN, AND THE PURSUIT OF ANY SUCH RIGHTS OR REMEDIES, SHALL NOT CONSTITUTE A WAIVER OF THE RIGHT OR OBLIGATION OF ANY PARTY, INCLUDING THE PLAINTIFF SEEKING JUDICIAL RELIEF OR REMEDIES, TO SUBMIT A CLAIM TO ARBITRATION, INCLUDING A CLAIM THAT MAY ARISE FROM THE EXERCISE OF SUCH RIGHTS.** 

19.6. **A PARTY SEEKING TO RESOLVE A CLAIM BY BINDING ARBITRATION SHALL SUBMIT A DEMAND FOR ARBITRATION TO THE OTHER PARTY, AS SET FORTH HEREIN, WITHIN THE TIME LIMIT ESTABLISHED BY THE APPLICABLE STATUTE OF LIMITATIONS FOR THE ASSERTED CLAIM. THE DEMAND SHALL IDENTIFY AND DESCRIBE THE NATURE OF ALL CLAIMS ASSERTED AND THE FACTS UPON WHICH SUCH CLAIMS ARE BASED.** 

19.7. **THE ARBITRATION SHALL BE ADMINISTERED BY JAMS AND THE ARBITRATION SHALL BE CONDUCTED IN ACCORDANCE WITH THE TERMS OF THIS ARBITRATION PROVISION AND THE EXPEDITED PROCEDURES OF THE JAMS COMPREHENSIVE ARBITRATION RULES AND PROCEDURES (THE "RULES AND PROCEDURES") (AS MAY BE AMENDED OR REPLACED FROM TIME TO TIME). THE ARBITRATOR SHALL BE CHOSEN IN ACCORDANCE WITH THE PROCEDURES OF JAMS FROM THE JAMS FINANCIAL MARKETS GROUP, UNLESS THE PARTIES AGREE TO ANOTHER ARBITRATOR FROM JAMS WHO IS NOT A MEMBER OF THE FINANCIAL MARKETS GROUP. THE ARBITRATOR SHALL BASE THE AWARD ON APPLICABLE LAW OF THE CHOSEN STATE (WITHOUT REFERENCE TO CONFLICT OF LAW PRINCIPLES). THE ARBITRATION SHALL BE CONDUCTED BY A SINGLE ARBITRATOR AND IN ENGLISH. JUDGMENT ON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE ARBITRATION SHALL BE FINAL AND BINDING ON THE PARTIES. THE ARBITRATOR SHALL RENDER A WRITTEN AWARD AND OPINION WHICH REVEALS THE ESSENTIAL FINDINGS AND CONCLUSIONS UPON WHICH THE AWARD IS BASED. TO THE EXTENT THAT THE JAMS RULES PERMIT A CLASS ARBITRATION OR PERMIT AN ARBITRATION TO BE BROUGHT IN A REPRESENTATIVE OR PRIVATE ATTORNEY GENERAL CAPACITY, THIS ARBITRATION PROVISION SUPERSEDES THOSE RULES. THE ARBITRATION SHALL BE CONDUCTED AS AN INDIVIDUAL ARBITRATION ONLY.** 

Page 14 of 19

---

| | |
|:---|:---|
| 19.8.  | **NOTWITHSTANDING ANYTHING IN THE JAMS RULES TO THE CONTRARY, THE ARBITRATOR SHALL HAVE THE AUTHORITY TO ENTERTAIN A MOTION TO DISMISS AND/ OR A MOTION FOR SUMMARY JUDGMENT BY ANY PARTY. EITHER PARTY, UPON REQUEST AT THE CLOSE OF HEARING, SHALL BE GIVEN LEAVE TO FILE A POSTHEARING BRIEF. THE TIME FOR FILING SUCH A BRIEF SHALL BE SET BY THE ARBITRATOR.** |
| 19.9. |  |
|  | **THE COSTS OF THE ARBITRATION SHALL BE PAID EQUALLY BETWEEN THE PARTIES.** |
| 19.10.  | **THE ARBITRATOR SHALL AWARD ATTORNEYS' FEES AND EXPENSES TO THE PARTY THAT IS REQUIRED TO RECEIVE PAYMENT FROM THE OTHER PARTY PURSUANT TO THE AWARD RESULTING FROM THIS ARBITRATION. IT SHALL BE PRESUMED (SUBJECT TO REBUTTAL ONLY BY THE INTRODUCTION OF COMPETENT EVIDENCE TO THE CONTRARY) THAT THE AMOUNT RECOVERABLE IS THE AMOUNT BILLED TO THE PREVAILING PARTY BY ITS COUNSEL AND THAT SUCH AMOUNT WILL BE REASONABLE IF BASED ON THE BILLING RATES CHARGED TO THE PREVAILING PARTY BY ITS COUNSEL IN SIMILAR MATTERS.** |
| 19.11.  | **NOTHING IN THIS ARBITRATION PROVISION SHALL PROHIBIT EITHER PARTY OR A RELATED THIRD PARTY FROM INSTITUTING A CLAIM IN SMALL CLAIMS COURT OR FILING A CLAIM IN COURT PROVIDED THAT THE OTHER PARTY DOES NOT ELECT TO ARBITRATE THE DISPUTE.** |
| 19.12.  | **UNLESS CONTRARY TO LAW, THE ARBITRATION PROCEEDINGS AND THE ARBITRATION AWARD SHALL BE MAINTAINED BY THE PARTIES AS CONFIDENTIAL, EXCEPT AS IS OTHERWISE REQUIRED BY COURT ORDER OR AS IS NECESSARY TO CONFIRM, VACATE OR ENFORCE THE AWARD AND FOR DISCLOSURE IN CONFIDENCE TO THE PARTIES' RESPECTIVE ATTORNEYS, TAX ADVISORS AND SENIOR MANAGEMENT. THE ARBITRATOR TO WHOM A CLAIM HAS BEEN SUBMITTED HEREUNDER SHALL RETAIN JURISDICTION TO ENFORCE THIS ARBITRATION PROVISION AFTER ENTRY OF A JUDGMENT IN ANY COURT HAVING JURISDICTION ON THE AWARD ISSUED BY SUCH ARBITRATOR.** |
| 19.13.  | **THIS ARBITRATION PROVISION IS BINDING UPON AND BENEFITS CLIENT, ITS RESPECTIVE HEIRS, SUCCESSORS AND ASSIGNS. THIS ARBITRATION PROVISION IS BINDING UPON AND BENEFITS CELTIC, ITS SUCCESSORS AND ASSIGNS, AND RELATED THIRD PARTIES. THIS ARBITRATION PROVISION CONTINUES IN FULL FORCE AND EFFECT, EVEN IF CLIENT'S OBLIGATIONS HAVE BEEN PAID OR DISCHARGED THROUGH BANKRUPTCY. THIS ARBITRATION PROVISION SURVIVES ANY CANCELLATION, TERMINATION, AMENDMENT, EXPIRATION OR PERFORMANCE OF ANY TRANSACTION BETWEEN THE PARTIES AND CONTINUES IN FULL FORCE AND EFFECT UNLESS THE PARTIES OTHERWISE AGREE IN WRITING. IF ANY PART OF THIS ARBITRATION PROVISION IS HELD INVALID, THE REMAINDER SHALL REMAIN IN EFFECT.** |

---

Page 15 of 19

---

| | | |
|:---|:---|:---|
|  | 19.14.  | **CLIENT MAY CHOOSE TO OPT OUT OF THIS SECTION 19 (THIS "ARBITRATION PROVISION"), BUT ONLY BY FOLLOWING THE PROCESS SET-FORTH IN THIS SECTION 19.14. IF CLIENT DOES NOT WISH TO BE SUBJECT TO THIS ARBITRATION PROVISION, THEN CLIENT MUST NOTIFY CELTIC IN WRITING WITHIN THIRTY (30) CALENDAR DAYS OF THE DATE OF SIGNING OF THIS AGREEMENT AT THE FOLLOWING ADDRESS: ARBITRATION OPT-OUT, BLUEVINE INC., 401 WARREN ST #300, REDWOOD CITY, CA 94063. CLIENT'S WRITTEN NOTICE MUST INCLUDE CLIENT'S NAME, ADDRESS, CELTIC ACCOUNT NUMBER AND A STATEMENT THAT CLIENT WISHES TO OPT OUT OF THIS ARBITRATION PROVISION.**  |
| 20.  | **<u>Venue; Jurisdiction.</u>**  | **<u>Venue; Jurisdiction.</u>**  |
|  | Subject to the Arbitration Provision set forth in Section 19 hereof, including Section 19.1: | Subject to the Arbitration Provision set forth in Section 19 hereof, including Section 19.1: |
|  | 20.1.  | Any suit, action or proceeding arising hereunder, or the interpretation, performance or breach hereof, shall, if Celtic so elects, be instituted in any court sitting in the city in which Celtic's chief executive office is located, or if none, any court sitting in the Chosen State (the "Acceptable Forums"). |
|  | 20.2.  | Client agrees that the Acceptable Forums are convenient to it, and submits to the jurisdiction of the Acceptable Forums and waives any and all objections to jurisdiction or venue. Should such proceeding be initiated in any other forum, Client waives any right to oppose any motion or application made by Celtic to transfer such proceeding to an Acceptable Forum. |
| 21.  | **<u>Time of the Essence.</u>**  | **<u>Time of the Essence.</u>**  |
|  | 21.1.  | It is agreed that time is of the essence in all matters herein. |
| 22.  | **<u>Service of Process.</u>**  | **<u>Service of Process.</u>**  |
|  | 22.1.  | Client agrees that Celtic may effect service of process upon Client by regular mail at the address set forth herein or at such other address as may be reflected in the records of Celtic, or at the option of Celtic by service upon Client's agent for the service of process. |
| 23.  | **<u>Assignment.</u>** | **<u>Assignment.</u>** |
|  | 23.1.  | Celtic may assign its rights and delegate its duties hereunder, in whole or in part. Upon such assignment, Client shall be deemed to have attorned to such assignee, shall owe the same obligations to such assignee and shall accept performance hereunder by such assignee, in each case with respect to any rights or duties so assigned, as if such assignee were Celtic. |

---

Page 16 of 19

24.  **<u>Amendment.</u>**

24.1. If Client has entered into a Prior Agreement, then by obtaining any additional Financing from Celtic Client, without further action, agrees that the terms and provisions of the Prior Agreement shall be and hereby are amended, restated and superseded in their entirety by the terms and provisions of this Agreement. All Financing then outstanding shall be subject to the terms and conditions of this Agreement, provided that the provisions of the Prior Agreement relating to the calculation of fees and expenses and the due dates of payments shall apply to all advances, draws and loans extended prior to signing this amended Agreement. Subject to the foregoing, nothing expressed or implied in this Agreement shall be construed as a release or other discharge of Client, or any Guarantor from any of its obligations or liabilities under the Prior Agreement or any of the security agreements, pledge agreements, guaranties or other documents executed in connection therewith.

24.2. Subject to Section 24.1 above, Celtic may amend (add to, delete from, modify or restate) any or all of the terms of this Agreement from time to time in its sole discretion. In such event, a notice thereof shall be presented on the Dashboard, and Client will be asked to accept the amended Agreement. If Client declines to accept the amended Agreement, Client's ability to obtain future Financing under this Agreement shall automatically terminate, and all Financing then outstanding shall be subject to the terms of the Agreement that was in effect prior to the amended Agreement.

25.  **<u>Notice.</u>**

25.1. All notices required to be given shall be deemed given:

25.1.1. If to Celtic, in accordance with instructions set forth on the Client's BlueVine account profile;

25.1.2. If to Client, by email to the user which appears in the User Settings on the Client's BlueVine account profile.

Page 17 of 19

IN WITNESS WHEREOF, the Parties have executed this Agreement on 09/14/2023.

CLIENT:

Infinite Group Inc.

By: <u>Electronically signed, event #2,687,898</u>

Name: <u>James A. Villa</u>

Title:

CELTIC:

Celtic Bank Corporation

By: <u>Bradley Bybee</u>

Title: <u>Chief Lending Officer</u> 

Page 18 of 19

**<u>EXHIBIT A - GENERAL RELEASE</u>**

FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which are hereby acknowledged, the undersigned and each of them (collectively "Releasor") hereby forever releases, discharges and acquits **Celtic Bank Corporation**. ("Releasee"), its parent, directors, shareholders, agents, employees and assigns, of and from any and all claims, demands, obligations, liabilities, indebtedness, breaches of contract, breaches of duty of any relationship, acts, omissions, misfeasance, malfeasance, cause or causes of action, debts, sums of money, accounts, compensations, contracts, controversies, promises, damages, costs, losses and expenses (collectively "Claims"), of every type, kind, nature, description or character, and irrespective of how, why, or by reason of what facts, whether heretofore existing, now existing or hereafter arising, or which could, might, or may be claimed to exist, of whatever kind or name, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, each as though fully set forth herein at length, to the extent that they arise out of or are in any way connected to or are related to the Financing, Invoice Purchase and Security Agreement and/or Financing and Security Agreement, as applicable, between the Parties, as the same may have been amended from time to time.

Releasor acknowledges that factual matters now unknown to it may have given or may hereafter give rise to Claims which are presently unknown, unanticipated and unsuspected, and it acknowledges that this Release has been negotiated and agreed upon in light of that realization and that it nevertheless hereby intends to release, discharge and acquit the Releasee from any such unknown Claims. Acceptance of this Release shall not be deemed or construed as an admission of liability by any party released. In the event of any litigation arising out of or related to this Release, the prevailing party shall recover its reasonable attorney's fees and expenses from the unsuccessful party. It shall be presumed (subject to rebuttal only by the introduction of competent evidence to the contrary) that the amount recoverable is the amount billed to the prevailing party by its counsel and that such amount will be reasonable if based on the billing rates charged to the prevailing party by its counsel in similar matters.

Releasor acknowledges that either (a) it has had advice of counsel of its own choosing in negotiations for and the preparation of this release, or (b) it has knowingly determined that such advice is not needed.

DATED: _______________________

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| | |
|:---|:---|
| Individual Releasor:<br>| ________________________________________<br> [**Name of individual**], individually |
| Entity Releasor: | Entity Name:_______________________ |

---

By: _______________________

Name: _______________________

Title: _______________________

<br> <u>Page 19 of 19</u>

## Exhibit 10.3

**EXHIBIT 10.3** 

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| | |
|:---|:---|
| **Future Receipts** Sale Agreement**.**<br>**Seller's Information** | ![](igi_ex103img35.jpg) |

---

---

| | | |
|:---|:---|:---|
| Seller's Legal Name  | Seller's Legal Name  | D/B/A  |
| INFINITE GROUP INC  | INFINITE GROUP INC <br> IGI  |  |
| Form of Business Entity and State of Incorporation  | Form of Business Entity and State of Incorporation  |  |
| New York Corporation  | New York Corporation  |  |
| Address  | Address  |  |
| 175 Sully's Trail ste 202, Pittsford, NY 14534  | 175 Sully's Trail ste 202, Pittsford, NY 14534  |  |
| Primary Contact Name  | Primary Contact Title  | Primary Contact Phone Number  |
| James A. Villa  | Owner  | (585) 485-5760  |

---

**Seller's Bank Account** 

<u> Name of Bank </u> <u> ABA Transit/Routing # </u> <u> Checking Account # </u> <br> THE UPSTATE BANK

**Pricing** 

---

| | | |
|:---|:---|:---|
| Purchase Price  | $120000.00  | *(If applicable) paid to Buyer and/or third parties*  |
| Prior Balance(s)  | $0.00  | *(If applicable) paid to Buyer and/or third parties*  |
| Wire Fee  | $35.00  | *(If applicable) paid to Buyer and/or third parties*  |
| Origination Fee  | $1200.00  | *(If applicable) paid to Buyer and/or third parties*  |
| **Net Amount Funded to Seller**  | $118765.00  | *(If applicable) paid to Buyer and/or third parties*  |

---

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| | |
|:---|:---|
| <br> ![](igi_ex103img38.jpg) | Page 1 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Future** **Receipts** Sale Agreement.<br>

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| | |
|:---|:---|
| Purchase Price Paid to Seller  | Initial Periodic Amount  |
| $120000.00  | $3250.00  |
| Purchased Amount of Future Receipts  | **What is the Initial Periodic Amount?** <br> The Initial Periodic Amount is an estimate of the Specified Percentage of your average sales revenue. We will debit the Periodic Amount from your Bank Account each week subject to your actual revenue. We based the Initial Periodic Amount on information you provided or made available to us to calculate your average revenue over a period of time prior to the date of this Agreement. Please refer to Section 4 of this Agreement for how you can adjust the Periodic Amount.  |
| $156000.00  | **What is the Initial Periodic Amount?** <br> The Initial Periodic Amount is an estimate of the Specified Percentage of your average sales revenue. We will debit the Periodic Amount from your Bank Account each week subject to your actual revenue. We based the Initial Periodic Amount on information you provided or made available to us to calculate your average revenue over a period of time prior to the date of this Agreement. Please refer to Section 4 of this Agreement for how you can adjust the Periodic Amount.  |
| Specified Percentage  | **What is the Initial Periodic Amount?** <br> The Initial Periodic Amount is an estimate of the Specified Percentage of your average sales revenue. We will debit the Periodic Amount from your Bank Account each week subject to your actual revenue. We based the Initial Periodic Amount on information you provided or made available to us to calculate your average revenue over a period of time prior to the date of this Agreement. Please refer to Section 4 of this Agreement for how you can adjust the Periodic Amount.  |
| 2.49%  | **What is the Initial Periodic Amount?** <br> The Initial Periodic Amount is an estimate of the Specified Percentage of your average sales revenue. We will debit the Periodic Amount from your Bank Account each week subject to your actual revenue. We based the Initial Periodic Amount on information you provided or made available to us to calculate your average revenue over a period of time prior to the date of this Agreement. Please refer to Section 4 of this Agreement for how you can adjust the Periodic Amount.  |
| Periodic Frequency  | **What is the Initial Periodic Amount?** <br> The Initial Periodic Amount is an estimate of the Specified Percentage of your average sales revenue. We will debit the Periodic Amount from your Bank Account each week subject to your actual revenue. We based the Initial Periodic Amount on information you provided or made available to us to calculate your average revenue over a period of time prior to the date of this Agreement. Please refer to Section 4 of this Agreement for how you can adjust the Periodic Amount.  |
| Weekly  | **What is the Initial Periodic Amount?** <br> The Initial Periodic Amount is an estimate of the Specified Percentage of your average sales revenue. We will debit the Periodic Amount from your Bank Account each week subject to your actual revenue. We based the Initial Periodic Amount on information you provided or made available to us to calculate your average revenue over a period of time prior to the date of this Agreement. Please refer to Section 4 of this Agreement for how you can adjust the Periodic Amount.  |

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Page 1 v3.00 This Sale of Future Receipts Agreement (**"Agreement"**) effective, 12/15/2023, is made by and between Fresh Funding Solutions, Inc, 157 Church Street, 19th Floor, New Haven, CT 06510 (**"Buyer"**), the business identified above (**"Seller"**), and each Guarantor identified below (each a **"Guarantor"**).

Seller, hereby sells, and assigns to Buyer, without recourse, the Purchased Amount of the proceeds of each future sale made by Seller (collectively **"Future Receipts"**) and will deliver the Specified Percentage of Future Receipts in accordance with this Agreement.

**Agreement of Seller:** By signing below Seller agrees to the terms and conditions contained in this Agreement, including those terms and conditions on the following pages, and further agrees that this transaction is for business purposes.

**Seller:** INFINITE GROUP INC

Agreed to by:

---

| | | | |
|:---|:---|:---|:---|
| **Name:**  | James A. Villa  | **Title:** | Owner  |
| **Signature:** | ![](igi_ex103img39.jpg) | **Date** | 12/15/2023 |

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|:---|:---|
| <br> ![](igi_ex103img44.jpg) | Page 2 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Future** **Receipts** Sale Agreement.<br>

**Agreement of Each Guarantor:** By signing below each Guarantor agrees to the terms and conditions contained in this Agreement, including those terms and conditions on the following pages, and further agrees that this transaction is for business purposes.

**Notice:** This agreement contains a personal guaranty of payment and performance, and by signing below, you agree that you will be personally liable for the payment and performance of certain obligations of Seller as described in this Agreement.

---

| | | | |
|:---|:---|:---|:---|
| **Name:**  | James A. Villa  | **Signature:** | ![](igi_ex103img40.jpg) |
| **Name:** |  | **Signature:** |  |

---

**TERMS AND CONDITIONS** 

---

| | |
|:---|:---|
| **1.**  | **Future Receipts.**  |
|  | "Future Receipts" includes all payments made by cash, check, Automated Clearing House ("ACH") or other electronic transfer, credit card, debit card, bank card, charge card (each such card shall be referred to herein as a "Payment Card") or other form of monetary payment in the ordinary course of Seller's business. As payment for the Purchased Amount, Buyer will pay to Seller the Purchase Price, minus any fees and amounts to satisfy prior balances shown above. |
| **2.**  | **Buyer's Acceptance of Agreement.**  |
|  | The obligation of Buyer under this Agreement will not be effective unless and until Buyer has completed its review of the Seller and has accepted this Agreement by delivering the Net Amount Funded to Seller, shown above. Prior to accepting this Agreement, Buyer may conduct a processing trial to confirm its access to Seller's Account, shown above (the "Account") and the ability to withdraw the Initial Periodic Amount. If the processing trial is not completed to the satisfaction of Buyer, Buyer will refund to Seller all funds that were obtained by Buyer during the processing trial and this Agreement shall be deemed null and void. |
| **3.**  | **Delivery of Purchased Amount.**  |
|  | Seller authorizes Buyer to debit the Initial Periodic Amount or any updated periodic amount (the "Periodic Amount") from the Account each business day by either ACH or electronic check. Seller will provide Buyer with all required Account information and agrees not to change them without prior written consent from Buyer. Seller will provide an appropriate ACH authorization to Buyer. If any draft or electronic debit is returned for insufficient funds, then Seller will be responsible for any fees incurred by Buyer resulting from a rejected electronic check or ACH debit attempt, as set forth on Appendix A, which is incorporated by reference. Buyer is not responsible for any overdrafts or rejected transactions that may result from Buyer's debiting any amount authorized under the terms of this Agreement. Seller understands that the foregoing ACH authorization is a fundamental condition to induce Buyer to accept the Agreement. Consequently, such authorization is intended to be irrevocable during the course of this Agreement. |

---

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| | |
|:---|:---|
| <br> ![](igi_ex103img45.jpg) | Page 3 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Future** **Receipts** Sale Agreement.<br>

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| | |
|:---|:---|
|  | In the event that Seller changes or permits changes to the Account or the ACH authorization approved by the Buyer or adds an additional bank account, Buyer shall have the right, without waiving any of its rights and remedies and without notice to Seller or any Guarantor, to notify the new or additional bank of this Agreement and to direct such new or additional bank to remit to the Buyer all or any portion of the amounts received by such bank. Any such new account shall be deemed an Account. |
| **4.**  | **Reconciliation and Adjusting the Periodic Amount (IMPORTANT PROTECTION FOR SELLER).**  |
|  | The initial Periodic Amount is intended to represent the Specified Percentage of Seller's Future Receipts. At any time, Seller or Buyer may request a reconciliation of Seller's actual revenue to adjust the Periodic Amount to more closely reflect the Seller's actual Future Receipts times the Specified Percentage. |

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**a)** **How Seller may Request a Reconciliation.** Email Buyer at accounting@gofreshfunding.com.

**b)** **How Buyer may Request a Reconciliation.** Buyer may request a reconciliation in writing via regular mail or e-mail.

**c)** **Reconciliation Information.** Seller shall provide Buyer with a copy of Seller's most recent month's official Account statement (the "Reconciliation Information"). Upon receipt of the Reconciliation Information, Buyer shall promptly recalculate Seller's average revenue. If necessary to verify the Reconciliation Information, Buyer may request additional documentation including view-only access to the Account.

**d)** **Adjusting the Periodic Amount.** Within three (3) business days of Buyer's reasonable verification of the Reconciliation Information, Buyer shall adjust the Periodic Amount on a going-forward basis to more closely reflect Seller's actual Receipts times the Specified Percentage. Buyer will notify Seller prior to any such adjustment. After each adjustment made pursuant to this paragraph, the new dollar amount will be deemed the updated Periodic Amount until any subsequent adjustment.

**e)** **Failure to Provide Reconciliation Information.** If Seller requests a reconciliation and fails to provide the Reconciliation Information within ten (10) calendar days after Seller's reconciliation request, Buyer may consider Seller's reconciliation request withdrawn. If Buyer requests a reconciliation and Seller fails to provide the Reconciliation Information within ten (10) calendar days after Buyer's reconciliation request, Buyer may adjust the Periodic Amount based on the best information reasonably available to Buyer.

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| **5.**  | **Nonrecourse Sale of Future Receipts (THIS IS NOT A LOAN).**  |
|  | Seller is selling a portion of a future revenue stream to Buyer at a discount and is not borrowing money from Buyer. There is no interest rate or payment schedule and no time period during which the Purchased Amount must be collected by Buyer. Seller acknowledges that it has no right to repurchase the Purchased Amount from Buyer. Buyer assumes the risk that Future Receipts may be remitted more slowly than Buyer may have anticipated or projected because Seller's business has slowed down, and the risk that the full Purchased Amount may never be remitted because Seller's business went bankrupt or Seller otherwise ceased operations in the ordinary course of business or the account debtor had a right of setoff. Buyer is buying the Purchased Amount knowing the risks that Seller's business may slow down or fail, and Buyer assumes these risks based on Seller's representations, warranties and covenants in this Agreement that are designed to give Buyer a reasonable and fair opportunity to receive the benefit of its bargain. By this Agreement, Seller transfers to Buyer full and complete ownership of the Purchased Amount of Future Receipts and Seller retains no legal or equitable interest therein. Seller shall provide Buyer with such information about the Future Receipts as Buyer reasonably requests, including the name of the account debtor, the address of the account debtor, telephone number of the account debtor, email of the account debtor and the amount the account debtor owes. |

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| **6.**  | **Fees and Charges.**  |
|  | A list of all fees and charges applicable under this Agreement is contained in Appendix A, which is incorporated by reference. Buyer is NOT CHARGING ANY BROKER FEES to Seller. If Seller is charged a broker fee, Seller acknowledges that it is not being charged by Buyer. |
| **7.**  | **Credit Report and Other Authorizations.**  |
|  | Seller and each of the Guarantors signing above authorize Buyer, its agents and representatives and any credit reporting agency engaged by Buyer, to (i) investigate any references given or any other statements or data obtained from or about Seller or any of the Guarantors for the purpose of this Agreement, (ii) obtain consumer and business credit reports on the Seller and any of its Guarantors, and (iii) to contact personal and business references provided by the Seller in the Application, at any time now or for so long as Seller and/or Guarantors continue to have any obligations to Buyer as a consequence of this Agreement or for Buyer's ability to determine Seller's eligibility to enter into any future agreement with Buyer. |
| **8.**  | **Authorization to Contact Current and Prior Banks.**  |
|  | Seller hereby authorizes Buyer to contact any current or prior bank of the Seller in order to obtain whatever information it may require regarding Seller's transactions with any such bank. Such information may include but is not limited to, information necessary to verify the amount of Future Receipts previously processed on behalf of Seller and any fees that may have been charged by the bank. In addition, Seller authorizes Buyer to contact any current or prior bank of the Seller for collections and in order to confirm that Seller is exclusively using the Account identified above, or any other account approved by Buyer, for the deposit of all business receipts. |
| **9.**  | **Right to Cancel.**  |
|  | Seller understands that Buyer offers Seller a right to cancel this Agreement at any time within 10 calendar days after Buyer has delivered the Net Amount Funded. Seller shall exercise this right by notifying Buyer in writing that it is cancelling this Agreement and returning the Net Amount Funded to Buyer. For the Seller's right to cancel to be effective, Buyer must receive both the written notice and the return of the Net Amount Funded within 10 calendar days after the Buyer has delivered the Net Amount Funded. |
| **10.**  | **Financial Information.**  |
|  | Seller authorizes Buyer and its agents to investigate its financial responsibility and history, and will provide to Buyer any authorizations, banking or financial statements, tax returns, etc., as Buyer deems necessary and reasonable prior to or at any time after execution of this Agreement. A photocopy of this authorization will be deemed acceptable as an authorization for release of financial and credit information. Buyer is authorized to update such information and financial and credit profiles from time to time as it deems appropriate. Seller waives, to the maximum extent permitted by law, any claim for damages against Buyer or any of its affiliates relating to any investigation undertaken by or on behalf of Buyer as permitted by this Agreement or disclosure of information as permitted by this Agreement. |

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| **11.**  | **Transactional History.**  |
|  | Seller authorizes all of its banks and brokers and its Payment Card processor(s) to provide Buyer with Seller's banking, brokerage and/or processing history to determine qualification or continuation in this program, or for collections upon a breach of this Agreement. |
| **12.**  | **Application of Amounts Received by Buyer.**  |
|  | Buyer reserves the right to apply amounts received by it under this Agreement to any fees or other charges due to Buyer from Seller prior to applying such amounts to reduce the amount of any outstanding Purchased Amount. |
| **13.**  | **Representations, Warranties and Covenants of Seller.**  |
|  | As of the date of this Agreement and, unless expressly stated otherwise, continuing until Buyer has received 1) the Purchased Amount and 2) all fees and charges due under this Agreement, Seller represents, warrants and covenants to Buyer as follows: |

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**a)** **No Diversion of Future Receipts.** Seller must deposit all Future Receipts into the Account on a daily basis and must instruct Seller's credit card processor, which must be approved by Buyer (the "Processor") to deposit all Payment Card receipts of Seller into the Account on a daily basis. Seller agrees not to (i) change the Account, (ii) add an additional Account, (iii) revoke Buyer's authorization to debit the Account, (iv) close the Account without the express written consent of Buyer or, (v) take any other action with the intent to interfere with Buyer's right to collect the purchased Future Receipts.

**b)** **Stacking Prohibited.** Seller shall not enter into any merchant cash advance or any loan agreement that relates to or encumbers its Future Receipts or requires daily payments with any party other than Buyer for the duration of this Agreement. Buyer may share information regarding this Agreement with any third party in order to determine whether Seller is in compliance with this provision.

**c)** **Financial Condition and Financial Information.** Any bank statements and financial statements of Seller that have been furnished to Buyer, and future statements that will be furnished to Buyer, fairly represent the financial condition of Seller and/or Guarantors at such dates. Furthermore, Seller and/or Guarantors represent that all documents, forms and recorded interviews provided to or with Buyer are true, accurate and complete in all respects, and accurately reflect their financial condition and results of operations at the time they are provided. Seller and Guarantors further authorize the release of any past or future tax returns to Buyer.

**d)** **Governmental Approvals.** Seller is in compliance and shall comply with all applicable federal, state and local laws, rules and regulations and has valid permits, authorizations and licenses to own, operate and lease its properties and to conduct the businesses in which it is presently engaged and/or will engage in hereafter.

**e)** **Authority to Enter into This Agreement.** Seller and the person(s) signing this Agreement on behalf of Seller, have full power and authority to incur and perform the obligations under this Agreement, all of which have been duly authorized.

**f)** **Change of Name or Location or Sale or Closing of Business.** Seller will not conduct Seller's businesses under any name other than as disclosed to Buyer or change any of its places of business without prior written consent of Buyer. Seller will not voluntarily sell, dispose, transfer or otherwise convey all or substantially all of its business or assets without (i) the express prior written consent of Buyer, and (ii) the written agreement of any purchaser or transferee assuming all of Seller's obligations under this Agreement pursuant to documentation satisfactory to Buyer. Except as disclosed to Buyer in writing, Seller has no current plans to close its business either temporarily, whether for renovations, repairs or any other purpose, or permanently. Seller will not voluntarily close its business on a temporary basis for renovations, repairs, or any other voluntary purposes. This provision, however, does not prohibit Seller from closing its business temporarily if such closing is required to conduct renovations or repairs that are required by local ordinance or other legal order, such as from a health or fire inspector, or if otherwise forced to do so by circumstances outside of the control of Seller. Prior to any such closure, Seller will provide Buyer 10 calendar days' written notice to the extent practicable.

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**g)** **No Pending or Contemplated Bankruptcy as of the Date of this Agreement.** As of the date of this Agreement, Seller does not contemplate and has not filed any petition for bankruptcy protection under Title 11 of the United States Code and there has been no involuntary petition threatened, brought or pending against Seller. Seller represents that it has not consulted with a bankruptcy attorney within six months prior to the date of this Agreement. Seller further warrants that as of the date of this Agreement (i) it does not anticipate filing a bankruptcy petition and (ii) it does not anticipate that an involuntary petition will be filed against it.

**h)** **Seller to Pay Taxes Promptly.** Seller will promptly pay all necessary federal, state and local taxes, including but not limited to employment and sales and use taxes.

**i)** **No Violation of Prior Agreements.** Seller's execution and performance of this Agreement will not conflict with any other agreement, obligation, promise, court order, administrative order or decree, law or regulation to which Seller is subject, including any agreement that prohibits the sale or pledge of Seller's Future Receipts.

**j)** **Seller's Knowledge and Representation.** Seller represents, warrants, and agrees that it is a sophisticated business entity familiar with the kind of transaction covered by the Agreement; (i) it was represented by counsel or (ii) had full opportunity to consult with counsel.

**k)** **Accurate and Complete Information.** Seller and Guarantors represent, warrant, and agree that all information provided to Buyer and all statements made to Buyer relating to this transaction in any way have been truthful, accurate, and complete. Seller and Guarantors further agree that Seller and Guarantors will be truthful, accurate, and complete in all future statements to Buyer and will provide Buyer with accurate and complete information regarding Seller's business as required by this Agreement.

**14.** **Rights of Buyer.** 

**a)** **Acknowledgment of Security Interest and Security Agreement.** The Future Receipts sold by Seller to Buyer pursuant to this Agreement shall constitute and shall be construed and treated for all purposes as a true and complete sale, conveying good title to the Future Receipts free and clear of any liens and encumbrances, from Seller to Buyer. To the extent the Future Receipts are "accounts" or "payment intangibles" as those terms are defined in the Uniform Commercial Code as in effect in the state in which the Seller is located ("UCC") then: (i) Seller grants a security interest in the Future Receipts as defined in the UCC, (ii) this Agreement constitutes a "security agreement" under the UCC, and (iii) Buyer has all the rights of a secured party under the UCC with respect to such Future Receipts. Seller further agrees that, with or without a breach of this Agreement, Buyer may notify account debtors, or other persons obligated on the Future Receipts, or holding the Future Receipts, of Seller's sale of the Future Receipts and may instruct them to make payment to Buyer or otherwise render performance to or for the benefit of Buyer.

**b)** **Financing Statements.** Seller authorizes Buyer to file one or more financing statements (UCC-1 forms) consistent with the UCC to give notice that the Purchased Amount of Future Receipts is the sole property of Buyer. The UCC filing may state that such sale is intended to be a sale and not an assignment for security and may state that the Seller is prohibited from obtaining any financing that impairs the value of the Future Receipts or Buyer's right to collect same. Seller authorizes Buyer to debit the Account for all costs incurred by Buyer associated with the filing, amendment or termination of any UCC filings.

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| **c)**  | **Right of Access.** In order to ensure that Seller is complying with the terms of this Agreement, Buyer shall have the right to (i) enter during regular business hours, without notice, the premises of Seller's business for the purpose of inspecting and checking Seller's transaction processing terminals to ensure the terminals are properly programmed to submit and or batch Seller's daily receipts to the Processor and to ensure that Seller has not violated any other provision of this Agreement, (ii) Seller shall provide access to its employees and records and all other items as requested by Buyer; and (iii) have Seller provide information about its business operations, banking relationships, vendors, landlord and other information to allow Buyer to interview any relevant parties. |
| **d)**  | **Phone Recordings and Contact.** Seller agrees that any call between Buyer and Seller, and their agents and employees may be recorded or monitored. Further, Seller agrees that (i) it has an established business relationship with Buyer, its employees and agents and that Seller may be contacted from time-to-time regarding this or other business transactions, (ii) that such communications and contacts are not unsolicited or inconvenient, and (iii) that any such contact may be made at any phone number, email address, or facsimile number given to Buyer by the Seller, its agents or employees, including cellular telephones. |
| **e)**  | **ACH Authorization.** Seller represents and warrants that (i) the Account is solely owned by Seller; (ii) the person executing this Authorization on behalf of Seller is an authorized signer on the Account and has the power and authority to authorize Buyer to initiate ACH transactions to and from the Account, and (iii) the Account is a legitimate, open, and active bank account used solely for business purposes and not for personal, family or household purposes. If an ACH transaction is rejected by Seller's financial institution for any reason other than a stop payment order placed by Seller with its financial institution, including without limitation insufficient funds, Seller agrees that Buyer may resubmit up to two times any ACH transaction that is dishonored. Seller's bank may charge Seller fees for unsuccessful ACH entries. Seller agrees that Buyer will have no liability to Seller for such fees. In the event Buyer makes an error in processing any payment or credit, Seller authorizes Buyer to initiate ACH entries to or from the Account to correct the error. Seller acknowledges that the origination of ACH entries to and from the Account must comply with applicable law and applicable network rules. Seller agrees to be bound by the Rules and Operating Guidelines of NACHA (formerly known as the National Automated Clearing House Association). Seller will not dispute any ACH transaction initiated pursuant to this Authorization, provided the transaction corresponds to the terms of this Authorization. Seller directs the financial institution that holds the Account to honor all ACH entries initiated in accordance with this Authorization. |
| **15.**  | **Remedies for Seller's Breach of this Agreement.**  |
|  | If Seller violates any term or covenant in this Agreement, Buyer may proceed to protect and enforce its rights including, but not limited to, the following: |
| **a)**  | The Specified Percentage shall equal 100%. The full undelivered Purchased Amount plus all fees and charges (including legal fees) assessed under this Agreement will become due and payable in full immediately. |
| **b)**  | Buyer may enforce the provisions of the Personal guaranty of payment and performance against each Guarantor. |
| **c)**  | Seller and Guarantors shall pay to Buyer all reasonable attorney fees and costs associated with Seller's breach. |

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| **d)**  | Buyer may debit depository accounts wherever situated by means of ACH debit or facsimile signature on a computer-generated check drawn on any of Seller's banking accounts for all sums due to Buyer. |
| **e)**  | All rights, powers and remedies of Buyer in connection with this Agreement may be exercised at any time by Buyer after the occurrence of breach, are cumulative and not exclusive, and shall be in addition to any other rights, powers or remedies provided by law or equity. |
| **16.**  | **Modifications, Amendments.**  |
|  | No modification, amendment, waiver or consent of any provision of this Agreement shall be effective unless the same is in writing and signed by Seller and Buyer. |
| **17.**  | **Assignment.**  |
|  | Buyer may assign, transfer or sell its rights to receive the Purchased Amount or delegate its duties hereunder, either in whole or in part, with or without prior written notice to Seller. |
| **18.**  | **Personal guaranty of payment and performance.**  |
|  | Guarantor agrees to irrevocably, absolutely and unconditionally guarantee to Buyer prompt and complete performance of the following obligations of Seller (the "Guaranteed Obligations"): |
| **a)** | Seller's obligation to not (i) change the Account without the express written consent of Buyer, (ii) add an additional Account without the express written consent of Buyer, (iii) revoke Buyer's authorization to debit the Account, (iv) close the Account without the express written consent of Buyer or (v) take any other action with the intent to interfere with Buyer's right to collect the purchased Future Receipts; |
| **b)** | Seller's obligation to not conduct Seller's businesses under any name other than as disclosed to Buyer; |
| **c)** | Seller's obligation to not change any of its places of business without prior written consent by Buyer; |
| **d)**  | Seller's obligation to not voluntarily sell, dispose, transfer or otherwise convey its business or substantially all business assets without (i) the express prior written consent of Buyer, and (ii) the written agreement of any purchaser or transferee assuming all of Seller's obligations under this Agreement pursuant to documentation satisfactory to Buyer; |

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| **e)**  | Seller's obligation to not enter into any merchant cash advance or any loan agreement that relates to or encumbers its Future Receipts with any party other than Buyer for the duration of this Agreement without Buyer's prior written consent; |
| **f)**  | Seller's obligation to provide truthful, accurate, and complete information as required by this Agreement; and |
| **g)**  | Payment of all sums due from Seller to Buyer (including attorney fees and costs). |
| **19.**  | **Guarantor Waivers.**  |
|  | Buyer does not have to notify Guarantor of any of the following events and Guarantor will not be released from its obligations under the Agreement and this Personal guaranty of payment and performance if it is not notified of: (i) Seller's failure to timely perform any obligation under the Agreement, (ii) any adverse change in Seller's financial condition or business, (iii) Buyer's acceptance of the Agreement, and (iv) any renewal, extension or other modification of the Agreement or Seller 's other obligations to Buyer. In addition, Buyer may take any of the following actions without releasing Guarantor from any of its obligations under the Agreement and this Payment and Performance Guaranty: (i) renew, extend or otherwise modify the Agreement or Seller's other obligations to Buyer, and (ii) release Seller from its obligations to Buyer. Guarantor shall not seek reimbursement from Seller or any other guarantor for any amounts paid by it under the Agreement or this Payment and Performance Guaranty unless and until Buyer is paid in full. Guarantor permanently waives and shall not seek to exercise any of the following suretyship rights that it may have against Seller, or any other guarantor, for any amounts paid by it, or acts performed by it, under the Agreement or this Payment and Performance Guaranty: (i) subrogation, (ii) reimbursement, (iii) performance, (iv) indemnification, or (v) contribution. |
| **20.**  | **Guarantor Acknowledgement.**  |
|  | Guarantor acknowledges that Guarantor understands the seriousness of the provisions of the Agreement, including the Jury Waiver, Class Action Waiver and Arbitration sections, and has had a full opportunity to consult with counsel their choice, and have consulted with counsel or have decided not to avail themselves of that opportunity. |
| **21.**  | **Notices.**  |
| **a)** | **Notices from Buyer.** Buyer may send any notices, disclosures, terms and conditions, other documents, and any future changes to Seller and/or Guarantors by regular mail or by e-mail, at Buyer's option and Seller and Guarantors consent to such electronic delivery. Notices sent by e-mail are effective when sent. Notices sent by regular mail become effective three days after mailing to Seller and/or Guarantors' address set forth in this Agreement. |
| **b)** | **Notices from Seller and Guarantor.** Subject to Section 4 of this Agreement, Seller and Guarantor may send any notices to Buyer by e-mail only upon the prior written consent of Buyer, which consent may be withheld or revoked at any time in Buyer's sole discretion. Otherwise, any notices or other communications from Seller and Guarantor to Buyer must be delivered by certified mail, return receipt requested or by reliable overnight delivery (with delivery confirmation), to Buyer's address set forth in this Agreement. Notices sent to Buyer shall become effective only upon receipt by Buyer. |

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|:---|:---|
| **22.**  | **Binding Effect, Governing Law, Venue and Jurisdiction.**  |
|  | This Agreement shall be binding upon and inure to the benefit of Seller, Buyer, Guarantor and their respective successors and assigns, except that Seller shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of Buyer which consent may be withheld in Buyer's sole and absolute discretion. This Agreement shall be governed by and construed in accordance with the laws of the State of Connecticut, without regard to any applicable principles of conflicts of law. Seller and Guarantor understand and agrees that (i) Buyer is located in Connecticut, (ii) Buyer makes all decisions from Buyer's office in Connecticut, (iii) the Agreement is made in Connecticut (that is, no binding contract will be formed until Buyer receives and accepts Seller's signed Agreement in Connecticut), and (iv) Seller's payments are not accepted until received by Buyer in Connecticut. Seller and Guarantor agree any court sitting in Connecticut is an acceptable forum (the "Acceptable Forums"). Acceptable Forums are convenient to the Parties, and submit to the jurisdiction of the Acceptable Forums and waive any and all objections to jurisdiction or venue. Should any proceeding (except an application to confirm an arbitral award or to enforce a judgment) be initiated in any other forum, Seller and Guarantor waive any right to oppose any motion or application made by Buyer to transfer such proceeding to an Acceptable Forum. Buyer, Seller and Guarantor further agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court will constitute valid and lawful service of process against them, without the necessity for service by any other means provided by statute or rule of court, but without invalidating service performed in accordance with such other provisions. |
| **23.**  | **Arbitration.**  |
|  | Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Dispute Resolution Center, Inc., and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The arbitration shall be conducted in the English language in Hartford County, Connecticut. The seat of the arbitration shall be deemed to be Connecticut and the arbitration shall be governed by Connecticut law. The arbitration may proceed by telephone or video conference. The arbitrator(s) shall have exclusive jurisdiction to determine the arbitrator's jurisdiction. Seller and Guarantors shall be liable for all of Buyer's arbitration costs, including but not limited to all reasonable attorneys' fees and costs. Seller may apply to a court for a pre-judgment remedy in aid of the arbitration.  |
| **24.**  | **Survival of Representations, Warranties and Covenants.**  |
|  | All representations, warranties and covenants herein shall survive the execution and delivery of this Agreement and shall continue in full force until all obligations under this Agreement shall have been satisfied in full. |
| **25.**  | **Interpretation.**  |
|  | All parties hereto have had the opportunity to review this Agreement with an attorney of their own choosing and have relied only on their own attorney's guidance and advice or have been provided sufficient opportunity to have an attorney of their choosing review the Agreement. No construction determinations shall be made against either Party hereto as drafter. |
| **26.**  | **Entire Agreement and Severability.**  |
|  | This Agreement embodies the entire agreement between Seller and Buyer and supersedes all prior agreements and understandings relating to the subject matter hereof. In case any of the provisions in this Agreement is found to be invalid, illegal, or unenforceable in any respect, the validity, legality and enforceability of any other provision contained herein shall not in any way be affected or impaired. |

---

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|:---|:---|
| <br> ![](igi_ex103img53.jpg) | Page 11 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Future** **Receipts** Sale Agreement.<br>

---

| | |
|:---|:---|
| **27.**  | **Execution.**  |
|  | Facsimile signatures, or any other electronic means reflecting the party's signature hereto, shall be deemed acceptable for all purposes. The parties agree that if a duly authorized representative of each of the parties signs this Agreement and transmits such Agreement to the other party via facsimile or electronically transmitted portable document format, such transmission shall be treated in all manner and respects as an original signature (or counterpart thereof) and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person. At the request of a party hereto, each other party hereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto shall raise the use of a facsimile machine or electronic transmission in portable document format (PDF) to deliver a signature or the fact that any signature was transmitted or communicated through the use of facsimile machine or electronic transmission in portable document format as a defense to this Agreement and each such party forever waives any such defense. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which when taken together shall constitute one and the same agreement. |
| **28.**  | **Monitoring, Recording, and Solicitations.**  |
| **a)**  | **Authorization to Contact by Phone.** Seller and Guarantor authorize Buyer, its affiliates, agents and independent contractors to contact Seller or Guarantor at any telephone number Seller or Guarantor provide to Buyer or from which Seller or Guarantor places a call to Buyer, or any telephone number where Buyer believes it may reach Seller or Guarantor, using any means of communication, including but not limited to calls or text messages to mobile, cellular, wireless or similar devices or calls or text messages using an automated telephone dialing system and/or artificial voices or prerecorded messages, even if Seller or Guarantor incurs charges for receiving such communications. |
| **b)**  | **Authorization to Contact by Other Means.** Seller and Guarantor also agree that Buyer, its affiliates, agents and independent contractors, may use any other medium not prohibited by law including, but not limited to, mail, e-mail and facsimile, to contact Seller and Guarantor. Seller and Guarantor expressly consent to conduct business by electronic means. |
| **29.**  | **Pre-Judgement Remedy Waiver.**  |
|  | EACH AND EVERY SELLER AND GUARANTOR OF THIS AGREEMENT, AND EACH OTHER PERSON OR ENTITY WHO MAY BECOME LIABLE FOR ALL OR ANY PART OF THIS OBLIGATION, HEREBY ACKNOWLEDGE THAT THE TRANSACTION OF WHICH THIS AGREEMENT IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED UNDER CONNECTICUT GENERAL STATUTES SECTIONS 52-278a TO 52-278m, INCLUSIVE, OR BY OTHER APPLICABLE LAW EACH AND EVERY SELLER AND GUARANTOR OF THIS AGREEMENT HEREBY WAIVE (A) ALL RIGHTS TO NOTICE AND PRIOR COURT HEARING OR COURT ORDER IN CONNECTION WITH ANY AND ALL PREJUDGMENT REMEDIES TO WHICH BUYER MAY BECOME ENTITLED BY VIRTUE OF ANY DEFAULT OR PROVISION OF THIS AGREEMENT OR SECURITY AGREEMENT SECURING THIS AGREEMENT AND (B) ALL RIGHTS TO REQUEST THAT BUYER POST A BOND, WITH OR WITHOUT SURETY, TO PROTECT SAID SELLER OR GUARANTOR AGAINST DAMAGES THAT MAY BE CAUSED BY ANY PREJUDGMENT REMEDY SOUGHT OR OBTAINED BY BUYER BY VIRTUE OF ANY DEFAULT OR PROVISION OF THIS AGREEMENT. |
|  | AS PART OF THE PREJUDGMENT REMEDY WAIVER ABOVE, EACH AND EVERY SELLER AND GUARANTOR OF THIS AGREEMENT, AND EACH OTHER PERSON OR ENTITY WHO MAY BECOME LIABLE FOR ALL OR ANY PART OF THIS OBLIGATION HEREBY ACKNOWLEDGE, UNDERSTAND, AGREE AND CONSENT THAT BUYER MAY ATTACH OR GARNISH ANY AND ALL OF SELLER AND GUARANTOR'S MONEY HELD IN ANY BANK ACCOUNT OR BROKERAGE ACCOUNT AS ALLOWED BY CONNECTICUT LAW. |

---

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| <br> ![](igi_ex103img54.jpg) | Page 12 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Future** **Receipts** Sale Agreement.<br>

---

| | |
|:---|:---|
| **30.**  | **Jury Waiver.**  |
|  | THE PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE TRANSACTIONS OF WHICH THIS AGREEMENT IS A PART OR ITS ENFORCEMENT, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW OR DEEMED BY A COURT OF LAW TO BE AGAINST PUBLIC POLICY. THE PARTIES ACKNOWLEDGE THAT EACH PARTY MAKES THIS WAIVER KNOWINGLY, WILLINGLY AND VOLUNTARILY AND WITHOUT DURESS, AND ACKNOWLEDGE THEIR RIGHT TO REVIEW THE RAMIFICATIONS OF THIS WAIVER WITH THEIR ATTORNEYS. |
| **31.**  | **Class Action Waiver.**  |
|  | BUYER, SELLER, AND EACH GUARANTOR ACKNOWLEDGE AND AGREE THAT THE AMOUNT AT ISSUE IN THIS TRANSACTION AND ANY DISPUTES THAT ARISE BETWEEN THEM ARE LARGE ENOUGH TO JUSTIFY DISPUTE RESOLUTION ON AN INDIVIDUAL BASIS. EACH PARTY HERETO WAIVES ANY RIGHT TO ASSERT ANY CLAIMS AGAINST THE OTHER PARTIES AS A REPRESENTATIVE OR MEMBER IN ANY CLASS OR REPRESENTATIVE ACTION, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW OR DEEMED BY A COURT OF LAW TO BE AGAINST PUBLIC POLICY. TO THE EXTENT ANY PARTY IS PERMITTED BY LAW OR A COURT OF LAW TO PROCEED WITH A CLASS OR REPRESENTATIVE ACTION AGAINST THE OTHER, THE PARTIES AGREE THAT: (I) THE PREVAILING PARTY SHALL NOT BE ENTITLED TO RECOVER ATTORNEYS' FEES OR COSTS ASSOCIATED WITH PURSUING THE CLASS OR REPRESENTATIVE ACTION (NOT WITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT), AND (II) THE PARTY WHO INITIATES OR PARTICIPATES AS A MEMBER OF THE CLASS WILL NOT SUBMIT A CLAIM OR OTHERWISE PARTICIPATE IN ANY RECOVERY SECURED THROUGH THE CLASS OR REPRESENTATIVE ACTION. |

---

**APPENDIX A LIST OF FEES AND CHARGES** 

The Agreement provides that Seller shall be liable for the following amounts, in addition to the Purchased Amount of Future Receipts:

1. Origination Fee as set forth on Page 1 of the Agreement.

2. The Wire Fee as set forth on Page 1 of the Agreement.

3. All costs Buyer incurs because Seller fails to notify Buyer in a timely manner that the Initial Periodic Amount or if any subsequent Periodic Amount will not be available in the Account.

4. All costs incurred by Buyer associated with the filing, amendment or termination of any UCC filings.

5. If Seller breaches the Agreement, all costs of collections, including attorney fees and all costs related to the enforcement of any other remedies available to Buyer.

6. Additional Fees.

**a)** **Non-Sufficient Funds Fee ("NSF Fee").** $35.00 for each NSF.

---

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|:---|:---|
| <br> ![](igi_ex103img55.jpg) | Page 13 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Future** **Receipts** Sale Agreement.<br>

**b)** **Default Fee.** In the event Seller breaches this Agreement for any reason, a default fee (and not a penalty) of $5,000.00 which reflects reasonably anticipated costs (except attorney fees and costs) Seller will occur due to the breach.

**c)** **Blocked Account Fee.** In the event Seller places a Stop-Payment on the Purchaser's ACH or closes their bank account, the lowest of a blocked account fee (and not a penalty) of $5,000 or Twenty-Five Percent (25%) of the outstanding balance shall be added, which reflects reasonably anticipated costs (except attorney fees and costs) Seller will occur due to the breach.

**d)** **Bank Change Fee.** In the event the Seller requests a change in bank accounts for the ACH payments, a $50.00 bank change fee shall be added.

**e)** **ACH Program Fee.** $49.00 per month for the duration of the Agreement.

**f)** **Third-Party Intermediary Fee.** In the event the Seller retains a third-party debt relief/re-negotiator entity or individual and contacts Buyer seeking to redirect communication regarding this Agreement, a $10,000 fee, or Twenty-Five Percent (25%) of the outstanding balance shall be added. This fee shall be used to cover the additional expenses added in modifying the terms of this Agreement. Any portion of this fee that remains unused shall be returned to the Seller at the conclusion of this Agreement or related legal action.

**g)** **Additional Financing ("Stacking").** Seller agrees that if further financing from any other finance/factoring company is taken after the funding of this contract (also known as "stacking"), this will constitute an event of default of the Agreement and all balances, plus any applicable fees, become immediately due. Seller agrees to pay the lowest of a $25,000 fee or Ten Percent (10%) of the calculated payback amount, whichever is higher, if additional financing is obtained. This reflects reasonably anticipated costs (except attorney fees and costs) Seller will occur due to the Stacking.

**APPENDIX B EXCEPTIONAL DELIVERY AND PERFORMANCE** 

Fresh Funding Solutions offers a discount for exceptional performance under your Purchase and Sale of Future Receipts Agreement!

Pursuant to your Agreement with us, you are delivering 2.49% of your Future Receipts to us. Your Agreement provides you with the right to obtain an adjustment to the amount that you remit to us each day to reflect your actual Future Receipts. We also offer a discount if you elect to deliver the Purchased Amount of Future Receipts according to our exceptional performance schedule:

**Exceptional Performance Schedule** 

---

| | |
|:---|:---|
| Delivery before January 14, 2024  | $136800.0 |
| Delivery before February 13, 2024  | $139200.0 |
| Delivery before March 14, 2024  | $144000.0 |
| Delivery before April 13, 2024  | $148800.0 |
| Delivery before May 13, 2024  | $153600.0 |

---

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|:---|:---|
| <br> ![](igi_ex103img56.jpg) | Page 14 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Future** **Receipts** Sale Agreement.<br>

**Please be advised that this Exceptional Performance Option will be unavailable if:**

■ The funds come from Fresh Funding Solutions, an affiliate, assignee, or any another funding company in the form of a business loan or a merchant cash advance unless approved in advance by us.

■ There has been a modification to your agreement with Fresh Funding Solutions.

■ There has been a breach or default of your agreement with Fresh Funding Solutions.

**If you are interested in participating in our Exceptional Performance Option, please sign below and return this letter to us.**

**Seller:** INFINITE GROUP INC

Agreed to by:

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| | | | |
|:---|:---|:---|:---|
| **Name:**  | James A. Villa  | **Title:** | Owner  |
| **Signature:** | ![](igi_ex103img41.jpg) | **Date** | 12/15/2023 |

---

**AUTHORIZATION AGREEMENT FOR AUTOMATED CLEARING HOUSE TRANSACTIONS**

Seller hereby authorizes Fresh Funding Solutions, Inc, 157 Church Street, 19th Floor, New Haven, CT 06510 ("Buyer") to present automated clearing house (ACH) debits to the following checking account in the amount of fees and other payments due to Buyer from Seller under the terms of that Purchase and Sale of Future Receipts Agreement (the "Agreement") entered into between Seller and Buyer, as it may be amended, supplemented or replaced from time to time. Seller also authorizes Buyer to initiate additional entries (debits and credits) to correct any erroneous transfers. In addition, if Seller breaches the Agreement, Seller authorizes Buyer to debit any and all accounts controlled by Seller or controlled by any entity with the same Federal Tax Identification Number as Seller up to the total amount, including but not limited to, all fees and charges, due to Buyer from Seller under the terms of the Agreement.

Seller agrees to be bound by the Rules and Operating Guidelines of NACHA and represents and warrants that the designated account is established and used primarily for commercial/business purposes, and not for consumer, family or household purposes. Seller authorizes Buyer to contact Seller's financial institution to obtain available funds information and/or to verify any information Seller has provided about the designated checking account and to correct any missing, erroneous or out-of-date information. Seller understands and agrees that any revocation or attempted revocation of this Authorization will constitute a breach of the Agreement for the Sale of Future Receipts. In the event that Seller closes the designated checking account, or the designated checking account has insufficient funds for any ACH transaction under this Authorization, Seller authorizes Buyer to contact Seller's financial institution and obtain information (including account number, routing number and available balance) concerning any other deposit account(s) maintained by Seller with Seller's financial institution, and to initiate ACH transactions under this Authorization to such additional account(s). To the extent necessary, Seller grants Buyer a limited Power of Attorney to act in Seller's name to facilitate this authorization.

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| <br> ![](igi_ex103img57.jpg) | Page 15 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Future** **Receipts** Sale Agreement.<br>

**Transfer Funds To/From:** 

Name of Bank: THE UPSTATE BANK <br> ABA Transit/Routing #: 021310465 <br> Checking Account #: 800119

This authorization is to remain in full force and effect until Buyer has received all amounts due or that may become due to Buyer under the Agreement.

**Seller Information:**

---

| | | | |
|:---|:---|:---|:---|
| Seller's Name:  | INFINITE GROUP INC  |  |  |
| Signature of Authorized Representative:  | Signature of Authorized Representative:  | ![](igi_ex103img43.jpg) | ![](igi_ex103img43.jpg) |
| Print Name:  | James A. Villa | Title:  | Owner  |
| Seller's Tax ID:  | 52-1490422  | Date:  | 12/15/2023 |

---

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|:---|:---|
| <br> ![](igi_ex103img58.jpg) | Page 16 |

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## Exhibit 10.4

**EXHIBIT 10.4**

Page 1 of **18**

![](igi_ex104img24.jpg)

UFS WEST LLC

1915 Hollywood Blvd, Suite 200A, Hollywood, Florida 33020

**<u>RECEIVABLES PURCHASE AGREEMENT</u>**

This is an Agreement dated 02/13/2024 by and between UFS WEST LLC ("UFS") inclusive of its successors or assigns and each merchant listed below ("Merchant").

Merchant's Legal Name: INFINITE GROUP INC

---

| | | | |
|:---|:---|:---|:---|
| D/B/A: | IGI | FED ID #: | 52-1490422 |
| Type of Entity: | CORPORATION |  |  |

---

Business Address: <u> 175 SULLY'S TRAIL STE 202 </u> City: <u> PITTSFORD</u> State: <u> NY </u> Zip: <u> 14534 </u> <br>Contact Address: <u> 308 ROCK BEACH RD </u> City: <u> ROCHESTER </u> State: <u> NY</u> Zip: <u> 14617</u>

Email Address: <u> JVILLA@IGIUS.COM</u> Phone Number: <u> <sup>5853850610</sup></u>

---

| | |
|:---|:---|
| **Purchase Price**<br> *This is the amount being paid to Merchant(s) for the Receivables Purchased Amount (defined below).* | **$150000.00** |
| **Receivables Purchased Amount**<br> *This is the amount of Receivables (defined in Section 1 below) being sold.* | **$198000.00** |
| **Specified Percentage**<br> *This is the percentage of Receivables (defined below) to be delivered until the Receivables Purchased Amount is paid in full.* | **4.85%** |
| **Net Funds Provided**<br> *This is the net amount being paid to or on behalf of Merchant(s) after deduction of applicable fees listed in Section 2 below and deduction of the payoff amount in the addendum, if any.* | **$145500.00** |
| **Initial Estimated Payment**<br> *This is the initial amount of periodic payments collected from Merchant(s) as an approximation of no more than the Specified Percentage of the Receivables and is subject to reconciliation as set forth in Section 4 below.* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **$5,823.53 per** <br> **WEEK** |

---

**I have read and agree to the terms and conditions set forth above:**

---

| | |
|:---|:---|
| ![](igi_ex104img25.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

Page **2** of **18**

**<u>RECEIVABLES PURCHASE AGREEMENT</u>**

**TERMS AND CONDITIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>Sale of Future Receipts.</u>** Merchant(s) hereby sell, assign, and transfer to UFS (making UFS the absolute owner) in consideration of the funds provided ("Purchase Price") specified above, all of each Merchant's future accounts, contract rights, and other obligations arising from or relating to the payment of monies from each Merchant's customers and/or other third party payors (the "Receivables", defined as all payments made by cash, check, credit or debit card, electronic transfer, or other form of monetary payment in the ordinary course of each merchant's business), for the payment of each Merchant's sale of goods or services until the amount specified above (the "Receivables Purchased Amount") has been delivered by Merchant(s) to UFS. Each Merchant hereby acknowledges that until the Receivables Purchased Amount has been received in full by UFS, the Specified Percentage of each Merchant's Receivables, up to the balance of the Receivables Purchased Amount, are the property of UFS and not the property of any Merchant. Each Merchant agrees that it is a fiduciary for UFS and that each Merchant will hold Receivables in trust for UFS in its capacity as a fiduciary for UFS.

The Receivables Purchased Amount shall be paid to UFS by each Merchant irrevocably authorizing only one depositing account acceptable to UFS (the "Account") to remit the percentage specified above (the "Specified Percentage") of each Merchant's settlement amounts due from each transaction, until such time as UFS receives payment in full of the Receivables Purchased Amount. Each Merchant hereby authorizes UFS to ACH debit the specified remittances from the Account on a WEEKLY basis as of the next business day after the date of this Agreement and will provide UFS with all required access codes and monthly bank statements. UFS is not responsible for any overdrafts or rejected transactions that may result from UFS's ACH debiting the Specified Percentage amounts under the terms of this Agreement, unless Merchant gave UFS prior notice that such ACH would be rejected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>Additional Fees.</u>** In addition to the Receivables Purchased Amount, each Merchant will be held responsible to UFS for the following fees, where applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. $4,500.00 - origination fee. This will be deducted from the payment of the Purchase Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Blocked Account/Default - $2,500.00 - If there is an Event of Default under Section 30.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Court costs, arbitration fees, collection agency fees, attorney fees, expert fees, and any other expensesincurred in litigation, arbitration, or the enforcement of any of UFS's legal or contractual rights against each Merchant and/ or each Guarantor, if required, as explained in other Sections of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>Estimated Payment .</u>** Instead of debiting the Specified Percentage of Merchant's Receivables, UFS may instead debit <u>$5,823.53</u> ("Estimated Payment") from the Account every [week/day]. The Estimated Payment is intended to be an approximation of no more than the Specified Percentage, subject to reconciliation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. <u>Reconciliations</u>**. Any Merchant may contact UFS's Reconciliation Department at any time to request that UFS conduct a reconciliation in order to ensure that the amount that UFS has collected equals the Specified Percentage of Merchant(s)'s Receivables under this Agreement. A request for a reconciliation by any Merchant must be made by giving written notice of the request to UFS or by sending an e-mail to <u>RECONCILIATION@UFSWEST.COM</u> stating that a reconciliation is being requested. In order to effectuate the reconciliation, any Merchant shall produce with its request the statements covering the period from the date of this Agreement through the date of the request for a reconciliation and, if available, the login and password for the Account. UFS will complete each reconciliation requested by any Merchant within two business days after receipt of proper notice of a request for one accompanied by the information and documents required for it. UFS may also conduct a reconciliation on its own at any time by reviewing Merchant(s)'s Receivables covering the period from the date of this Agreement until the date of initiation of the reconciliation, each such reconciliation will be completed within two business days after its initiation, and UFS will give each Merchant written notice of the determination made based on the reconciliation within one business day after its completion. If a reconciliation determines that UFS collected more than it was entitled to, then UFS will credit to the Account all amounts to which UFS was not entitled and, if there is an Estimated Payment, decrease the amount of the Estimated Payment so that it is consistent with the Specified Percentage of Merchant(s)'s Receivables from the date of the Agreement through the date of the reconciliation. If a reconciliation determines that UFS collected less than it was entitled to, then UFS will debit from the Account all additional amounts to which UFS was entitled and, if there is an Estimated Payment, increase the amount of the Estimated Payment so that it is consistent with the Specified Percentage of Merchant(s)'s Receivables from the date of the Agreement through the date of the reconciliation. Nothing herein limits the amount of times that a reconciliation may be requested or conducted.

**I have read and agree to the terms and conditions set forth above:**

---

| | |
|:---|:---|
| ![](igi_ex104img26.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

Page **3** of **18**

<u>**RECEIVABLES PURCHASE AGREEMENT**</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. <u>Merchant Deposit Agreement.</u>** Merchant(s) shall appoint a bank acceptable to UFS, to obtain electronic fund transfer services and/or "ACH" payments. Merchant(s) shall provide UFS and/or its authorized agent with all of the information, authorizations, and passwords necessary to verify each Merchant's Receivables. Merchant(s) shall authorize UFS and/or its agent(s) to deduct the amounts owed to UFS for the Receivables as specified herein from settlement amounts which would otherwise be due to each Merchant and to pay such amounts to UFS by permitting UFS to withdraw the Specified Percentage by ACH debiting of the account. The authorization shall be irrevocable absent UFS's written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. <u>Term of Agreement.</u>** The term of this Agreement is indefinite and shall continue until UFS receives the full Receivables Purchased Amount, or earlier if terminated pursuant to any provision of this Agreement. The provisions of Sections 4, 6, 7, 8, 10, 11, 13, 14, 15, 17, 18, 19, 22, 23, 28, 31, 32, 33, 34, 35, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, and 58 shall survive any termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. <u>Ordinary Course of Business.</u>** Each Merchant acknowledges that it is entering into this Agreement in the ordinary course of its business and that the payments to be made from each Merchant to UFS under this Agreement are being made in the ordinary course of each Merchant's business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8. <u>Financial Condition.</u>** Each Merchant and each Guarantor (Guarantor being defined as each signatory to the Guarantee of this Agreement) authorizes UFS and its agent(s) to investigate each Merchant's financial responsibility and history, and will provide to UFS any bank or financial statements, tax returns, and other documents and records, as UFS deems necessary prior to or at any time after execution of this Agreement. A photocopy of this authorization will be deemed as acceptable for release of financial information. UFS is authorized to update such information and financial profiles from time to time as it deems appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9. <u>Monitoring, Recording, and Electronic Communications.</u>** UFS may choose to monitor and/or record telephone calls with any Merchant and its owners, employees, and agents. By signing this Agreement, each Merchant agrees that any call between UFS and any Merchant or its representatives may be monitored and/or recorded. Each Merchant and each Guarantor grants access for UFS to enter any Merchant's premises and to observe any Merchant's premises without any prior notice to any Merchant at any time after execution of this Agreement. UFS may use automated telephone dialing, text messaging systems, and e-mail to provide messages to Merchant(s), Owner(s) (Owner being defined as each person who signs this Agreement on behalf of a Merchant), and Guarantor(s) about Merchant(s)'s account. Telephone messages may be played by a machine automatically when the telephone is answered, whether answered by an Owner, a Guarantor, or someone else. These messages may also be recorded by the recipient's answering machine or voice mail. Each Merchant, each Owner, and each Guarantor gives UFS permission to call or send a text message to any telephone number given to UFS in connection with this Agreement and to play pre-recorded messages and/or send text messages with information about this Agreement and/or any Merchant's account over the phone. Each Merchant, each Owner, and each Guarantor also gives UFS permission to communicate such information to them by e-mail. Each Merchant, each Owner, and each Guarantor agree that UFS will not be liable to any of them for any such calls or electronic communications, even if information is communicated to an unintended recipient. Each Merchant, each Owner, and each Guarantor acknowledge that when they receive such calls or electronic communications, they may incur a charge from the company that provides them with telecommunications, wireless, and/or Internet services, and that UFS has no liability for any such charges.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10. <u>Accuracy of Information Furnished by Merchant and Investigation Thereof.</u>** To the extent set forth herein, each of the parties is obligated upon his, her, or its execution of the Agreement to all terms of the Agreement.

I have read and agree to the terms and conditions set forth above:

---

| | |
|:---|:---|
| ![](igi_ex104img27.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

Page **4** of **18**

 <u>**RECEIVABLES PURCHASE AGREEMENT**</u>

Each Merchant and each Owner signing this Agreement represent that he or she is authorized to sign this Agreement for each Merchant, legally binding said Merchant to its obligations under this Agreement and that the information provided herein and in all of UFS's documents, forms, and recorded interview(s) is true, accurate, and complete in all respects. UFS may produce a monthly statement reflecting the delivery of the Specified Percentage of Receivables from Merchant(s) to UFS. An investigative report may be made in connection with the Agreement. Each Merchant and each Owner signing this Agreement authorize UFS, its agents and representatives, and any credit-reporting agency engaged by UFS, to (i) investigate any references given or any other statements obtained from or about each Merchant or any of its Owners for the purpose of this Agreement, and (ii) pull credit report at any time now or for so long as any Merchant and/or Owners(s) continue to have any obligation to UFS under this Agreement or for UFS's ability to determine any Merchant's eligibility to enter into any future agreement with UFS. Any misrepresentation made by any Merchant or Owner in connection with this Agreement may constitute a separate claim for fraud or intentional misrepresentation. <u>Authorization for soft pulls:</u> Each Merchant and each Owner understands that by signing this Agreement, they are providing 'written instructions' to UFS under the Fair Credit Reporting Act, authorizing UFS to obtain information from their personal credit profile or other information from Experian, TransUnion, and Equifax. Each Merchant and each Guarantor authorizes UFS to obtain such information solely to conduct a pre-qualification for credit. <u>Authorization for hard pulls:</u> Each Merchant and each Owner understands that by signing this Agreement, they are providing 'written instructions' to UFS under the Fair Credit Reporting Act, authorizing UFS to obtain information from their personal credit profile or other information from Experian, TransUnion, and Equifax. Each Merchant and each Guarantor authorizes UFS to obtain such information in accordance with a revenue-based financing application.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11. <u>Transactional History.</u>** Each Merchant authorizes its bank to provide UFS with its banking and/or credit card processing history.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12. <u>Indemnification.</u>** Each Merchant and each Guarantor jointly and severally indemnify and hold harmless each Merchant's credit card and check processors (collectively, "Processor") and Processor's officers, directors, and shareholders against all losses, damages, claims, liabilities, and expenses (including reasonable attorney and expert fees) incurred by Processor resulting from (a) claims asserted by UFS for monies owed to UFS from any Merchant and (b) actions taken by any Processor in reliance upon information or instructions provided by UFS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13. <u>No Liability.</u>** In no event will UFS be liable for any claims asserted by any Merchant under any legal theory for lost profits, lost revenues, lost business opportunities, exemplary, punitive, special, incidental, indirect, or consequential damages, each of which is waived by each Merchant and each Guarantor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14. <u>Sale of Receivables.</u>** Each Merchant and UFS agree that the Purchase Price under this Agreement is in exchange for the Receivables Purchased Amount and that such Purchase Price is not intended to be, nor shall it be construed as a loan from UFS to any Merchant. UFS is entering into this Agreement knowing the risks that each Merchant's business may decline or fail, resulting in UFS not receiving the Receivables Purchased Amount. Any Merchant going bankrupt or going out of business or experiencing a slowdown in business or a delay in collecting Receivables will not on its own without anything more be considered a breach of this Agreement. Each Merchant agrees that the Purchase Price in exchange for the Receivables pursuant to this Agreement equals the fair market value of such Receivables. UFS has purchased and shall own all the Receivables described in this Agreement up to the full Receivables Purchased Amount as the Receivables are created. Payments made to UFS in respect to the full amount of the Receivables shall be conditioned upon each Merchant's sale of products and services and the payment therefor by each Merchant's customers in the manner provided in this Agreement. Although certain jurisdictions may require the disclosure of an Annual Percentage Rate or APR in connection with this Agreement, those disclosures do not change the fact that the transaction encompassed by this Agreement is not a loan and does not have an interest rate. If a court or arbitrator determines that UFS has charged or received interest under this Agreement in excess of the highest rate permitted by applicable law, then the rate in effect under this Agreement will automatically be reduced to the maximum rate permitted by applicable law and UFS will promptly refund to Merchant(s) any amount received by UFS that would otherwise be considered interest in excess of the maximum lawful rate, with it being intended that Merchant(s) not pay or contract to pay and that UFS not receive or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be paid by Merchant(s) or received by UFS under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15. <u>Power of Attorney.</u>** Each Merchant irrevocably appoints UFS as its agent and attorney-in-fact with full authority to take any action or execute any instrument or document to settle all obligations due to Merchant for the benefit of each Merchant and only in order to prevent the occurrence of an Event of Default, or, if an Event of Default has taken place, then each Merchant irrevocably appoints UFS as its agent and attorney-in-fact with full authority to take any action or execute any instrument or document to settle all obligations due to UFS from each Merchant, including without limitation (i) to collect monies due or to become due under or in respect of any of the Collateral (which is defined in Section 33); (ii) to receive, endorse and collect any checks or documents, in connection with clause (i) above; (iii) to sign each Merchant's name on any invoice or assignment directing customers or account debtors to make payment directly to UFS; and (iv) to file any claims or take any action or institute any proceeding which UFS may deem necessary for the collection of any of the unpaid Receivables Purchased Amount from the Collateral, or otherwise to enforce its rights with respect to payment of the Receivables Purchased Amount.

**I have read and agree to the terms and conditions set forth above:**

---

| | |
|:---|:---|
| ![](igi_ex104img28.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

Page **5** of **18**

<u>**RECEIVABLES PURCHASE AGREEMENT**</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16. <u>Protections Against Default.</u>** The following Protections 1 through 6 may be invoked by UFS, immediately and without notice to any Merchant in the event:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any Merchant takes any action to discourage the use of methods of payment ordinarily and customarily usedby its customers or permits any event to occur that could have an adverse effect on the use, acceptance, or authorization of checks and credit cards for the purchase of any Merchant's services and products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any Merchant changes its arrangements with any Processor and account debtor(s) in any way that is adverseto UFS;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any Merchant changes any Processor and account debtor(s) through which the Receivables are settled toanother electronic check and/or credit card processor and account debtor(s) or permits any event to occur that could cause diversion of any Merchant's check and/or credit card transactions to another such processor and account debtor(s);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any Merchant stops the operation of its business with the intention to harm UFS's contractual rights (otherthan due to economic failure, adverse weather, natural disasters, or acts of God) or transfers, moves, sells, disposes, or otherwise conveys its business or assets without (i) the express prior written consent of UFS and (ii) the written agreement of any purchaser or transferee to the assumption of all of any Merchant's obligations under this Agreement pursuant to documentation satisfactory to UFS;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any Merchant takes any action, fails to take any action, or offers any incentive—economic or otherwise—theresult of which will be to induce any customer or customers to pay for any Merchant's goods or services with any means other than checks and/or credit cards that are settled through Processor and account debtor(s) . These protections are in addition to any other remedies available to UFS at law, in equity, or otherwise available pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) UFS considers any Event of Default listed in Section 30 to have taken place.

Protection 1: The full uncollected Receivables Purchased Amount plus all fees due under this Agreement may become due and payable in full immediately.

Protection 2. UFS may enforce the provisions of the Guarantee against Guarantor.

Protection 3. UFS may enforce its security interest in the Collateral identified in Section 33.

Protection 4. UFS may proceed to protect and enforce its rights and remedies by litigation or arbitration.

Protection 5. UFS may debit any Merchant's depository accounts wherever situated by means of ACH debit or electronic or facsimile signature on a computer-generated check drawn on any Merchant's bank account or otherwise, in an amount consistent with the terms of this Agreement.

Protection 6. UFS will have the right, without waiving any of its rights and remedies and without notice to any Merchant and/or Guarantor, to notify each Merchant's credit card and/or check processor and account debtor(s) of the sale of Receivables hereunder and to direct such credit card processor and account debtor(s) to make payment to UFS of all or any portion of the amounts received by such credit card processor and account debtor(s) on behalf of each Merchant. Each Merchant hereby grants to UFS an irrevocable power-of-attorney, which power-of-attorney will be coupled with an interest, and hereby appoints UFS and its representatives as each Merchant's attorney-in-fact to take any and all action necessary to direct such new or additional credit card and/or check processor and account debtor(s) to make payment to UFS as contemplated by this Section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17. <u>Protection of Information.</u>** Each Merchant and each person signing this Agreement on behalf of each Merchant and/or as Owner, in respect of himself or herself personally, authorizes UFS to disclose information concerning each Merchant, Owner and/or Guarantor's credit standing and business conduct to agents, affiliates, subsidiaries, and credit reporting bureaus. Each Merchant, Guarantor, and Owner hereby waives to the maximum extent permitted by law any claim for damages against UFS or any of its affiliates relating to any (i) investigation undertaken by or on behalf of UFS as permitted by this Agreement or (ii) disclosure of information as permitted by this Agreement.

**I have read and agree to the terms and conditions set forth above:**

---

| | |
|:---|:---|
| ![](igi_ex104img29.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

Page **6** of **18**

<u>**RECEIVABLES PURCHASE AGREEMENT**</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18. <u>Confidentiality.</u>** Each Merchant understands and agrees that the terms and conditions of the products and services offered by UFS, including this Agreement and any other UFS documents (collectively, "Confidential Information") are proprietary and confidential information of UFS. Accordingly, unless disclosure is required by law or court order, Merchant(s) shall not disclose Confidential Information of UFS to any person other than an attorney, accountant, financial advisor, or employee of any Merchant who needs to know such information for the purpose of advising any Merchant ("Advisor"), provided such Advisor uses such information solely for the purpose of advising any Merchant and first agrees in writing to be bound by the terms of this Section 18.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19. <u>D/B/As.</u>** Each Merchant hereby acknowledges and agrees that UFS may be using "doing business as" or "d/b/ a" names in connection with various matters relating to the transaction between UFS and each Merchant, including the filing of UCC-1 financing statements and other notices or filings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**20. <u>Financial Condition and Financial Information.</u>** Each Merchant represents, warrants, and covenants that its bank and financial statements, copies of which have been furnished to UFS, and future statements which will be furnished hereafter at the request of UFS, fairly represent the financial condition of each Merchant at such dates, and that since those dates there have been no material adverse changes, financial or otherwise, in such condition, operation, or ownership of any Merchant. Each Merchant has a continuing affirmative obligation to advise UFS of any material adverse change in its financial condition, operation, or ownership that may have an effect on any Merchant's ability to generate Receivables or perform its obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**21. <u>Governmental Approvals.</u>** Each Merchant represents, warrants, and covenants that it is in compliance and shall comply with all laws and has valid permits, authorizations, and licenses to own, operate, and lease its properties and to conduct the business in which it is presently engaged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**22. <u>Authorization.</u>** Each Merchant represents, warrants, and covenants that it and each person signing this Agreement on behalf of each Merchant has full power and authority to incur and perform the obligations under this Agreement, all of which have been duly authorized.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**23. <u>Electronic Check Processing Agreement.</u>** Each Merchant represents, warrants, and covenants that it will not, without UFS's prior written consent, change its Processor, add terminals, change its financial institution or bank account, or take any other action that could have any adverse effect upon any Merchant's obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**24. <u>Change of Name or Location.</u>** Each Merchant represents, warrants, and covenants that it will not conduct its business under any name other than as disclosed to UFS or change any place(s) of its business without prior written consent from UFS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**25. <u>No Bankruptcy.</u>** Each Merchant represents, warrants, and covenants that as of the date of this Agreement, it does not contemplate and has not filed any petition for bankruptcy protection under Title 11 of the United States Code and there has been no involuntary petition brought or pending against any Merchant. Each Merchant further warrants that it does not anticipate filing any such bankruptcy petition and it does not anticipate that an involuntary petition will be filed against it. Each Merchant further warrants that there will be no statutory presumption that it would have been insolvent on the date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**26. <u>Unencumbered Receivables.</u>** Each Merchant represents, warrants, and covenants that it has good, complete, and marketable title to all Receivables, free and clear of any and all liabilities, liens, claims, changes, restrictions, conditions, options, rights, mortgages, security interests, equities, pledges, and encumbrances of any kind or nature whatsoever or any other rights or interests that may be inconsistent with this Agreement or adverse to the interests of UFS, other than any for which UFS has actual or constructive knowledge or inquiry notice as of the date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**27. <u>Stacking.</u>** Each Merchant represents, warrants, and covenants that it will not enter into with any party other than UFS any arrangement, agreement, or commitment that relates to or involves the Receivables, whether in the form of a purchase of, a loan against, collateral against, or the sale or purchase of credits against Receivables without the prior written consent of UFS.

**I have read and agree to the terms and conditions set forth above:**

---

| | |
|:---|:---|
| ![](igi_ex104img30.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

Page **7** of **18**

<u>**RECEIVABLES PURCHASE AGREEMENT**</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**28. <u>Business Purpose.</u>** Each Merchant represents, warrants, and covenants that it is a valid business in good standing under the laws of the jurisdictions in which it is organized and/or operates, and each Merchant is entering into this Agreement for business purposes and not as a consumer for personal, family, or household purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**29. <u>Security Interest.</u>** To secure each Merchant's payment and performance obligations to UFS under this Agreement and any future agreement with UFS, each Merchant hereby grants to UFS a security interest in collateral (the "Collateral"), that is defined as collectively: (a) all accounts-receivable, and (b) all proceeds therefrom, as that term is defined by Article 9 of the UCC. The parties acknowledge and agree that any security interest granted to UFS under any other agreement between any Merchant or Guarantor and UFS (the "Cross-Collateral") will secure the obligations hereunder and under this Agreement. Negative Pledge: Each Merchant agrees not to create, incur, assume, or permit to exist, directly or indirectly, any lien on or with respect to any of the Collateral or the Cross-Collateral, as applicable.

Each Merchant agrees to execute any documents or take any action in connection with this Agreement as UFS deems necessary to perfect or maintain UFS's first priority security interest in the Collateral and the Cross-Collateral, including the execution of any account control agreements. Each Merchant hereby authorizes UFS to file any financing statements deemed necessary by UFS to perfect or maintain UFS's security interest, which financing statements may contain notification that each Merchant has granted a negative pledge to UFS with respect to the Collateral and the CrossCollateral, and that any subsequent lienor may be tortiously interfering with UFS's rights. Each Merchant shall be liable for and UFS may charge and collect all costs and expenses, including but not limited to attorney fees, which may be incurred by UFS in protecting, preserving, and enforcing UFS's security interest and rights. Each Merchant further acknowledges that UFS may use another legal name and/or D/B/A or an agent when designating the Secured Party when UFS files the above-referenced financing statement(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**30. <u>Events of Default.</u>** An "Event of Default" may be considered to have taken place if any of the following occur:

(1) Any representation or warranty by any Merchant to UFS that proves to have been made intentionally false ormisleading in any material respect when made;

(2) Any Merchant fails to send bank statements, merchant account statements, or bank login information for the Account within three business days after a written request via email for same is made by UFS and the merchant isn't otherwise in good standing with the terms of this Agreement.

(3) Any Merchant intentionally prevents UFS from collecting any part of the Receivables Purchased Amount; or

(4) Any Merchant causes any ACH debit to the Account to be stopped or otherwise returned that would result in an ACH Return Code of R08, R10, or R29 and that Merchant does not within two business days thereafter either (a) provide UFS with written notice thereof explaining why that Merchant caused the ACH debit to be stopped or otherwise returned or (b) provide a new means or method of remitting to UFS the Specified Percentage of the Receivables belonging to UFS, which notice may be given by e-mail to <u>RECONCILIATION@UFSWEST.COM.</u> 

If any Merchant goes out of business due to economic failure, is not otherwise in default of this Agreement, and provides UFS with written notice of the closure within two business days thereafter, then such closure will not be deemed an Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**31. <u>Remedies.</u>** In case any Event of Default occurs and is not waived, UFS may proceed to protect and enforce its rights or remedies by suit in equity or by action at law, or both, whether for the specific performance of any covenant, agreement, or other provision contained herein, or to enforce the discharge of each Merchant's obligations hereunder, or any other legal or equitable right or remedy. All rights, powers, and remedies of UFS in connection with this Agreement, including each Protection listed in Section 16, may be exercised at any time by UFS after the occurrence of an Event of Default, are cumulative and not exclusive, and will be in addition to any other rights, powers, or remedies provided by law or equity. In case any Event of Default occurs and is not waived, UFS may elect that Merchant(s) be required to pay to UFS 25% of the unpaid balance of the Receivables Purchased Amount as liquidated damages for any reasonable expenses incurred by UFS in connection with recovering the unpaid balance of the Receivables Purchased Amount ("Reasonable Expenses"), UFS will not be required to itemize of prove its Reasonable Expenses, and all Merchant(s) and all Guarantor(s) agree that the Reasonable Expenses bear a reasonable relationship to UFS's actual expenses incurred in connection with recovering the unpaid balance of the Receivables Purchased Amount.

**I have read and agree to the terms and conditions set forth above:**

---

| | |
|:---|:---|
| ![](igi_ex104img31.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

Page **8** of **18**

<u>**RECEIVABLES PURCHASE AGREEMENT**</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**32. <u>Required Notifications.</u>** Merchant(s) are required to give UFS at least seven days' written notice prior to the closing of any sale of all or substantially all of any Merchant's assets or stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**33. <u>Assignment.</u>** This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, except that Merchant(s) shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of UFS, which consent may be withheld in UFS's sole discretion. UFS may assign, transfer, or sell its rights under this Agreement, including, without limitation, its rights to receive the Receivables Purchased Amount, and its rights under Section 33 of this Agreement, the Guarantee, and any other agreement, instrument, or document executed in connection with the transactions contemplated by this Agreement (a "Related Agreement"), or delegate its duties hereunder or thereunder, either in whole or in part. From and after the effective date of any such assignment or transfer by UFS, whether or not any Merchant has actual notice thereof, this Agreement and each Related Agreement shall be deemed amended and modified (without the need for any further action on the part of any Merchant or UFS) such that the assignee shall be deemed a party to this Agreement and any such Related Agreement and, to the extent provided in the assignment document between UFS and such assignee (the "Assignment Agreement"), have the rights and obligations of UFS under this Agreement and such Related Agreements with respect to the portion of the Receivables Purchased Amount set forth in such Assignment Agreement, including but not limited to rights in the Receivables, Collateral and Additional Collateral, the benefit of each Guarantor's guaranty regarding the full and prompt performance of every obligation that is a subject of the Guarantee, UFS's rights under Section 16 of this Agreement (Protections Against Default), and to receive damages from any Merchant following a breach of this Agreement by any Merchant. In connection with such assignment, UFS may disclose all information that UFS has relating to any Merchant or its business. Each Merchant agrees to acknowledge any such assignment in writing upon UFS's request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**34. <u>Notices.</u>** All notices, requests, consents, demands, and other communications hereunder shall be delivered by certified mail, return receipt requested, or by overnight delivery with signature confirmation to the respective parties to this Agreement at their addresses set forth in this Agreement and shall become effective only upon receipt. Written notice may also be given to any Merchant or Guarantor by e-mail to the E-mail Address listed on the first page of this

Agreement. Each Merchant must set its spam or junk mail filter to accept e-mails sent by RECONCILIATION@UFSWEST.COM and its domain. This Section is not applicable to service of process or notices in any legal proceedings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**35. <u>Choice of Law.</u>** Each Merchant acknowledges and agrees that the State of Florida has a reasonable relationship to the transactions encompassed by this Agreement. This Agreement, any dispute or claim relating hereto, whether sounding in contract, tort, law, equity, or otherwise, the relationship between UFS and each Merchant, and the relationship between UFS and each Guarantor will be governed by and construed in accordance with the laws of the State of Florida, without regard to any applicable principles of conflict of laws. Each Merchant agrees that the provisions of Chapter 22.1 of Title 6.2 of the Virginia Code are not applicable to this Agreement unless a merchant has a principal place of business located in the Commonwealth of Virginia and there is no applicable exemption to the statute. Each Merchant agrees that the provisions of Division 9.5 of the California Financial Code are not applicable to this Agreement if no Business Address listed on the first page of this Agreement or in any addendum hereto is located in the State of California or if there is any applicable exemption to the statute. Each Merchant agrees that the provisions of Chapter 27 of Title 7 of the Utah Code are not applicable to this Agreement if the transactions contemplated by this Agreement are not consummated in the State of Utah.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**36. <u>Forum Selection and Venue.</u>** Any litigation, whether sounding in contract, tort, law, equity, or otherwise, relating to this Agreement or involving UFS on one side and any Merchant or any Guarantor on the other must be commenced and maintained in any state court located in the Counties of Broward or Miami-Dade in the State of Florida (the "Acceptable Forums"). The parties agree that the Acceptable Forums are convenient, submit to the jurisdiction of the Acceptable Forums, and waive any and all objections to the jurisdiction or venue of the Acceptable Forums. If any litigation is initiated in any other venue or forum, the parties waive any right to oppose any motion or application made by any party to transfer such litigation to an Acceptable Forum. Notwithstanding any provision in this Agreement to the contrary, in addition to the Acceptable Forums, any application to confirm an arbitration award and any action or proceeding to enforce a judgment or arbitration award against any Merchant or Guarantor to collect any amount due to UFS may be commenced and maintained in any other court that would otherwise be of competent jurisdiction, and each Merchant and each Guarantor agree that those courts are convenient, submit to the jurisdiction of those courts, waive any and all objections to the jurisdiction or venue of those courts, and may oppose any motion or application made by any party to transfer any such litigation to an Acceptable Forum.

**I have read and agree to the terms and conditions set forth above:**

---

| | |
|:---|:---|
| ![](igi_ex104img32.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

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<u>**RECEIVABLES PURCHASE AGREEMENT**</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**37. <u>Jury Waiver.</u>** The parties agree to waive trial by jury in any dispute between them.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**38. <u>Statutes of Limitations.</u>** Each Merchant and each Guarantor agree that any claim that is not asserted against UFS within one year of its accrual will be time barred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**39. <u>Costs.</u>** Each Merchant and each Guarantor must pay all of UFS's reasonable costs associated with a breach by any Merchant of the covenants in this Agreement and the enforcement thereof, including but not limited to collection agency fees, attorney fees, which may include a contingency fee of up to 33% of the amount claimed, expert witness fees, and costs of suit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**40. <u>Prejudgment and Postjudgment Interest.</u>** If UFS becomes entitled to the entry of a judgment against any Merchant or any Guarantor, then UFS will be entitled to the recovery of prejudgment interest at a rate of 16% per annum, or the maximum rate permitted by applicable law if less, and upon entry of any such judgment, it will accrue interest at a rate of 9% per annum, or the maximum rate permitted by applicable law if less, which rate will govern over the statutory rate of interest up until actual satisfaction of the judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**41. <u>Class Action Waiver.</u>** UFS, each Merchant, and each Guarantor agree that they may bring claims against each other relating to this Agreement only in their individual capacities, and not as a plaintiff or class action member in any purported class or representative proceedings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**42. <u>Arbitration.</u>** Any action or dispute, whether sounding in contract, tort, law, equity, or otherwise, relating to this Agreement or involving UFS on one side and any Merchant or any Guarantor on the other, including, but not limited to issues of arbitrability, and including, without limitation, any action or dispute that predates this Agreement, will, at the option of any party to such action or dispute, be determined by arbitration in the State of Florida or the State of New York. A judgment of the court shall be entered upon the award made pursuant to the arbitration. The arbitration will be administered either by the American Arbitration Association under its Commercial Arbitration Rules as are in effect at that time, which rules are available at www.adr.org, by Arbitration Services, Inc. under its Commercial Arbitration Rules as are in effect at that time, which rules are available at www.arbitrationservicesinc.com, by JAMS under its Streamlined Arbitration Rules & Procedures as are in effect at that time, which rules are available at www.jamsadr.com, or by Resolute Systems, LLC under its Commercial Arbitration Rules as are in effect at that time, which rules are available at www.resolutesystems.com. Once an arbitration is initiated with one of these arbitral forums, it must be maintained exclusively before that arbitral forum and no other arbitral forum specified herein may be used. As a prerequisite to making a motion to compel arbitration in any litigation, the party making the motion must first file a demand for arbitration with the chosen arbitral tribunal and pay all required filing and/or administrative fees. If the American Arbitration Association is selected, then notwithstanding any provision to the contrary in its Commercial Arbitration Rules, the Expedited Procedures will always apply and its Procedures for Large, Complex Commercial Disputes will not apply. Notwithstanding any provision to the contrary in the arbitration rules of the arbitral forum selected, the arbitration will be heard by one arbitrator and not by a panel of arbitrators, any arbitration hearing relating to this Agreement must be held in either the State of Florida Counties of Broward or Miami-Date or the State of New York, Counties of Nassau, New York, Queens, or Kings. Any party, representative, or witness in an arbitration hearing will be permitted to attend, participate, and testify remotely by telephone or video conferencing, and the arbitrator appointed will not be required to be a national of a country other than that of the parties to the arbitration.

**I have read and agree to the terms and conditions set forth above:**

---

| | |
|:---|:---|
| ![](igi_ex104img33.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

Page **10** of **18**

<u>**RECEIVABLES PURCHASE AGREEMENT**</u>

Each Merchant acknowledges and agrees that this Agreement is the product of communications conducted by telephone and the Internet, which are instrumentalities of interstate commerce, that the transactions contemplated under this Agreement will be made by wire transfer and ACH, which are also instrumentalities of interstate commerce, and that this Agreement therefore evidences a transaction affecting interstate commerce. Accordingly, notwithstanding any provision in this Agreement to the contrary, all matters of arbitration relating to this Agreement will be governed by and construed in accordance with the provisions of the Federal Arbitration Act, codified as Title 9 of the United States Code, however any application for injunctive relief in aid of arbitration or to confirm an arbitration award may be made under the arbitration laws of the State in which the arbitration is being conducted, the laws of the State of Florida, or the laws of the jurisdiction in which the application is made, and the application will be governed by and construed in accordance with the laws under which the application is made, without regard to any applicable principles of conflict of laws. The arbitration agreement contained in this Section may also be enforced by any employee, agent, attorney, member, manager, officer, subsidiary, affiliate entity, successor, or assign of UFS and by any party to a lawsuit in which UFS and any Merchant or Gurantor are parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**43. <u>Service of Process.</u>** Each Merchant and each Guarantor consent to service of process and legal notices made by First Class or Priority Mail delivered by the United States Postal Service and addressed to the Contact Address set forth on the first page of this Agreement or any other address(es) provided in writing to UFS by any Merchant or any Guarantor, and unless applicable law or rules provide otherwise, any such service will be deemed complete five days after dispatch. Each Merchant and each Guarantor agrees that it will be precluded from asserting that it did not receive service of process or any other notice mailed to the Contact Address set forth on the first page of this Agreement if it does not furnish a certified mail return receipt signed by UFS demonstrating that UFS was provided with notice of a change in the Contact Address.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**44. <u>Survival of Representation, etc.</u>** All representations, warranties, and covenants herein shall survive the execution and delivery of this Agreement and shall continue in full force until all obligations under this Agreement shall have been satisfied in full and this Agreement shall have terminated unless specified otherwise in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**45. <u>Waiver.</u>** No failure on the part of UFS to exercise, and no delay in exercising, any right under this Agreement, shall operate as a waiver thereof, nor shall any single or partial exercise of any right under this Agreement preclude any other or further exercise thereof or the exercise of any other right. The remedies provided hereunder are cumulative and not exclusive of any remedies provided by law or equity.

**I have read and agree to the terms and conditions set forth above:**

---

| | |
|:---|:---|
| ![](igi_ex104img34.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

Page **11** of **18**

<u>**RECEIVABLES PURCHASE AGREEMENT**</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**46. <u>Independent Sales Organizations/Brokers.</u>** Each Merchant and each Guarantor acknowledge that it may have been introduced to UFS by or received assistance in entering into this Agreement or its Guarantee from an independent sales organization or broker ("ISO"). Each Merchant and each Guarantor agree that any ISO is separate from and is not an agent or representative of UFS. Each Merchant and each Guarantor acknowledge that UFS is not bound by any promises or agreements made by any ISO that are not contained within this Agreement. Each Merchant and each Guarantor exculpate from liability and agree to hold harmless and indemnify UFS and its officers, directors, members, shareholders, employees, and agents from and against all losses, damages, claims, liabilities, and expenses (including reasonable attorney and expert fees) incurred by any Merchant or any Guarantor resulting from any act or omission by any ISO. Each Merchant and each Guarantor acknowledge that any fee that they paid to any ISO for its services is separate and apart from any payment under this Agreement. Each Merchant and each Guarantor acknowledge that UFS does not in any way require the use of an ISO and that any fees charged by any ISO are not required as a condition or incident to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**47. <u>Modifications; Agreements.</u>** No modification, amendment, waiver, or consent of any provision of this Agreement shall be effective unless the same shall be in writing and signed by all parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**48. <u>Severability.</u>** If any provision of this Agreement is deemed invalid or unenforceable as written, it will be construed, to the greatest extent possible, in a manner which will render it valid and enforceable, and any limitation on the scope or duration of any such provision necessary to make it valid and enforceable will be deemed to be part thereof. If any provision of this Agreement is deemed void, all other provisions will remain in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**49. <u>Headings.</u>** Headings of the various articles and/or sections of this Agreement are for convenience only and do

not necessarily define, limit, describe, or construe the contents of such articles or sections.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**50. <u>Attorney Review.</u>** Each Merchant acknowledges that it has had an opportunity to review this Agreement and all addenda with counsel of its choosing before signing the documents or has chosen not to avail itself of the opportunity to do so. This Agreement will be construed without regard to the party or parties responsible for the preparation of same and will be deemed as prepared jointly by UFS and each Merchant. Any ambiguity or uncertainty in this Agreement will not be interpreted or construed against any party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**51. <u>Entire Agreement.</u>** This Agreement, inclusive of all addenda, if any, executed simultaneously herewith constitutes the full understanding of the parties to the transaction herein and may not be amended, modified, or canceled except in writing signed by all parties. Should there arise any conflict between this Agreement and any other document preceding it, this Agreement will govern. This Agreement does not affect any previous agreement between the parties unless such an agreement is specifically referenced herein. This Agreement will not be affected by any subsequent agreement between the parties unless this Agreement is specifically referenced therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**52. <u>Counterparts; Fax and Electronic Signatures.</u>** This Agreement may be executed electronically and in counterparts. Facsimile and electronic copies of this Agreement will have the full force and effect of an original.

**SIGNATURES TO FOLLOW ON NEXT PAGE**

**I have read and agree to the terms and conditions set forth above:**

---

| | |
|:---|:---|
| ![](igi_ex104img35.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

Page **12** of **18**

**<u>RECEIVABLES PURCHASE AGREEMENT</u>**

**FOR THE MERCHANT/OWNER (#1)**

---

| | | | |
|:---|:---|:---|:---|
| By:  | JAMES A VILLA, OWNER  |  | ![](igi_ex104img20.jpg) |
|  | (Print Name and Title) |  | (Signature) |
| SS#: 061-54-9789 | SS#: 061-54-9789 | Driver License Number: |  |
| **FOR THE MERCHANT/OWNER (#2)** | **FOR THE MERCHANT/OWNER (#2)** |  |  |
| By:  |  |  | {{sign_2}} |
|  | (Print Name and Title) |  | (Signature) |
| SS#: -- |  | Driver License Number: |  |

---

Approved for UFS WEST LLC by: _________________________________

**I have read and agree to the terms and conditions set forth above:**

---

| | |
|:---|:---|
| ![](igi_ex104img36.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

Page **13** of **18**

<u>**RECEIVABLES PURCHASE AGREEMENT**</u>

**GUARANTEE**

**<u>G1. Personal Guarantee of Performance.</u>** This is a personal guaranty of performance, dated 02/13/2024, of the Receivables Purchase Agreement, dated 02/13/2024 ("Agreement"), inclusive of all addenda, if any, executed simultaneously therewith, by and between UFS WEST LLC ("UFS") and INFINITE GROUP INC ("Merchant"). Each undersigned Guarantor hereby guarantees each Merchant's performance of all of the representations, warranties, and covenants made by each Merchant to UFS in the Agreement, inclusive of all addenda, if any, executed simultaneously herewith, as the Agreement may be renewed, amended, extended, or otherwise modified (the "Guaranteed Obligations"). Each Guarantor's obligations are due at the time of any breach by any Merchant of any representation, warranty, or covenant made by any Merchant in the Agreement.

**<u>G2. Guarantor Waivers.</u>** If any Event of Default has taken place under the Agreement, then UFS may enforce its rights under this Guarantee without first seeking to obtain payment from any Merchant, any other guarantor, or any Collateral, Additional Collateral, or Cross-Collateral UFS may hold pursuant to this Guarantee or any other agreement or guarantee. UFS does not have to notify any Guarantor of any of the following events and Guarantor(s) will not be released from its obligations under this Guarantee even if it is not notified of: (i) any Merchant's failure to pay timely any amount owed under the Agreement; (ii) any adverse change in any Merchant's financial condition or business; (iii) any sale or other disposition of any collateral securing the Guaranteed Obligations or any other guarantee of the Guaranteed Obligations; (iv) UFS's acceptance of the Agreement with any Merchant; and (v) any renewal, extension, or other modification of the Agreement or any Merchant's other obligations to UFS. In addition, UFS may take any of the following actions without releasing any Guarantor from any obligations under this Guarantee: (i) renew, extend, or otherwise modify the Agreement or any Merchant's other obligations to UFS; (ii) if there is more than one Merchant, release a Merchant from its obligations to UFS such that at least one Merchant remains obligated to UFS; (iii) sell, release, impair, waive, or otherwise fail to realize upon any collateral securing the Guaranteed Obligations or any other guarantee of the Guaranteed Obligations; and (iv) foreclose on any collateral securing the Guaranteed Obligations or any other guarantee of the Guaranteed Obligations in a manner that impairs or precludes the right of Guarantor to obtain reimbursement for payment under the Agreement. Until the Receivables Purchased Amount and each Merchant's other obligations to UFS under the Agreement and this Guarantee are paid in full, each Guarantor shall not seek reimbursement from any Merchant or any other guarantor for any amounts paid by it under the Agreement. Each Guarantor permanently waives and shall not seek to exercise any of the following rights that it may have against any Merchant, any other guarantor, or any collateral provided by any Merchant or any other guarantor, for any amounts paid by it or acts performed by it under this Guarantee: (i) subrogation; (ii) reimbursement; (iii) performance; (iv) indemnification; or (v) contribution.

**<u>G3. Joint and Several Liability.</u>** The obligations hereunder of the persons or entities constituting each Guarantor under this Guarantee are joint and several.

**<u>G4. Choice of Law.</u>** Each Guarantor acknowledges and agrees that the State of Florida has a reasonable relationship to the transactions encompassed by the Agreement and this Guarantee. This Guarantee and the relationship between UFS, each Merchant, and each Guarantor will be governed by and construed in accordance with the laws of the State of Florida, without regard to any applicable principles of conflict of laws.

**<u>G 5 . Jury Waiver .</u>** Each Guarantor agrees to waive trial by jury in any dispute with UFS.

**<u>G6. Venue and Forum Selection.</u>** Any litigation, whether sounding in contract, tort, law, equity, or otherwise, relating to this Agreement or this Guarantee or involving UFS on one side and any Merchant or any Guarantor on the other must be commenced and maintained in any court located in the Counties of Broward or Miami-Dade in the State of Florida (the "Acceptable Forums"). The parties agree that the Acceptable Forums are convenient, submit to the jurisdiction of the Acceptable Forums, and waive any and all objections to the jurisdiction or venue of the Acceptable Forums. If any litigation is initiated in any other venue or forum, the parties waive any right to oppose any motion or application made by any party to transfer such litigation to an Acceptable Forum. Notwithstanding any provision in this Agreement to the contrary, in addition to the Acceptable Forums, any application to confirm an arbitration award and any action or proceeding to enforce a judgment or arbitration award against any Merchant or Guarantor to collect any amount due to UFS may be commenced and maintained in any other court that would otherwise be of competent jurisdiction, and each Merchant and each Guarantor agree that those courts are convenient, submit to the jurisdiction of those courts, waive any and all objections to the jurisdiction or venue of those courts, and may oppose any motion or application made by any party to transfer any such litigation to an Acceptable Forum.

**<u>G7. Statutes of Limitations.</u>** Each Merchant and each Guarantor agree that any claim that is not asserted against UFS within one year of its accrual will be time barred.

**<u>G9. Costs.</u>** Each Merchant and each Guarantor must pay all of UFS's reasonable costs associated with a breach by any Merchant of the covenants in this Agreement or this Guarantee and the enforcement thereof, including but not limited to collection agency fees, expert witness fees, and costs of suit.

**<u>G10. Prejudgment and Postjudgment Interest.</u>** If UFS becomes entitled to the entry of a judgment against any Merchant or any Guarantor, then UFS will be entitled to the recovery of prejudgment interest at a rate of 16% per annum, or the maximum rate permitted by applicable law if less, and upon entry of any such judgment, it will accrue interest at a rate of 9% per annum, or the maximum rate permitted by applicable law if less, which rate will govern over the statutory rate of interest up until actual satisfaction of the judgment.

**I have read and agree to the terms and conditions set forth above:**

---

| | |
|:---|:---|
| ![](igi_ex104img37.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

Page **14** of **18**

<u>**RECEIVABLES PURCHASE AGREEMENT**</u>

**<u>G11. Class Action Waiver.</u>** UFS, each Merchant, and each Guarantor agree that they may bring claims against each other relating to this Agreement only in their individual capacities, and not as a plaintiff or class action member in any purported class or representative proceedings.

**<u>G12. Arbitration.</u>** Any action or dispute, whether sounding in contract, tort, law, equity, or otherwise, relating to this Agreement or involving UFS on one side and any Merchant or any Guarantor on the other, including, but not limited to issues of arbitrability, and including, without limitation, any action or dispute that predates this Agreement, will, at the option of any party to such action or dispute, be determined by arbitration in the State of Florida or the State of New York. A judgment of the court shall be entered upon the award made pursuant to the arbitration. The arbitration will be administered either by the American Arbitration Association under its Commercial Arbitration Rules as are in effect at that time, which rules are available at www.adr.org, by Arbitration Services, Inc. under its Commercial Arbitration Rules as are in effect at that time, which rules are available at www.arbitrationservicesinc.com, by JAMS under its Streamlined Arbitration Rules & Procedures as are in effect at that time, which rules are available at www.jamsadr.com, or by Resolute Systems, LLC under its Commercial Arbitration Rules as are in effect at that time, which rules are available at www.resolutesystems.com. Once an arbitration is initiated with one of these arbitral forums, it must be maintained exclusively before that arbitral forum and no other arbitral forum specified herein may be used. As a prerequisite to making a motion to compel arbitration in any litigation, the party making the motion must first file a demand for arbitration with the chosen arbitral tribunal and pay all required filing and/or administrative fees. If the American Arbitration Association is selected, then notwithstanding any provision to the contrary in its Commercial Arbitration Rules, the Expedited Procedures will always apply and its Procedures for Large, Complex Commercial Disputes will not apply. Notwithstanding any provision to the contrary in the arbitration rules of the arbitral forum selected, the arbitration will be heard by one arbitrator and not by a panel of arbitrators, any arbitration hearing relating to this Agreement must be held in either the State of Florida Counties of Broward or Miami-Date or the State of New York, Counties of Nassau, New York, Queens, or Kings. Any party, representative, or witness in an arbitration hearing will be permitted to attend, participate, and testify remotely by telephone or video conferencing, and the arbitrator appointed will not be required to be a national of a country other than that of the parties to the arbitration.

Each Merchant acknowledges and agrees that this Agreement is the product of communications conducted by telephone and the Internet, which are instrumentalities of interstate commerce, that the transactions contemplated under this Agreement will be made by wire transfer and ACH, which are also instrumentalities of interstate commerce, and that this Agreement therefore evidences a transaction affecting interstate commerce. Accordingly, notwithstanding any provision in this Agreement to the contrary, all matters of arbitration relating to this Agreement will be governed by and construed in accordance with the provisions of the Federal Arbitration Act, codified as Title 9 of the United States Code, however any application for injunctive relief in aid of arbitration or to confirm an arbitration award may be made under the arbitration laws of the State in which the arbitration is being conducted, the laws of the State of Florida, or the laws of the jurisdiction in which the application is made, and the application will be governed by and construed in accordance with the laws under which the application is made, without regard to any applicable principles of conflict of laws. The arbitration agreement contained in this Section may also be enforced by any employee, agent, attorney, member, manager, officer, subsidiary, affiliate entity, successor, or assign of UFS and by any party to a lawsuit in which UFS and any Merchant or Guarantor are parties.

**<u>G13. Service of Process.</u>** Each Merchant and each Guarantor consent to service of process and legal notices made by First Class or Priority Mail delivered by the United States Postal Service and addressed to the Contact Address set forth on the first page of the Agreement or any other address(es) provided in writing to UFS by any Merchant or any Guarantor, and unless applicable law or rules provide otherwise, any such service will be deemed complete five days after dispatch. Each Merchant and each Guarantor agrees that it will be precluded from asserting that it did not receive service of process or any other notice mailed to the Contact Address set forth on the first page of the Agreement if it does not furnish a certified mail return receipt signed by UFS demonstrating that UFS was provided with notice of a change in the Contact Address.

**I have read and agree to the terms and conditions set forth above:**

---

| | |
|:---|:---|
| ![](igi_ex104img38.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

Page **15** of **18**

<u>**RECEIVABLES PURCHASE AGREEMENT**</u>

**<u>G14. Severability.</u>** If any provision of this Guarantee is deemed invalid or unenforceable as written, it will be construed, to the greatest extent possible, in a manner which will render it valid and enforceable, and any limitation on the scope or duration of any such provision necessary to make it valid and enforceable will be deemed to be part thereof. If any provision of this Guarantee is deemed void, all other provisions will remain in effect.

**<u>G15. Survival.</u>** The provisions of Sections G2, G3, G4, G5, G6, G7, G8, G9, G10, G11, G12, G13, G14, G15, G16, G17, G18, G19, G20, and G21 shall survive any termination of this Guarantee.

**<u>G16. Headings.</u>** Headings of the various articles and/or sections of this Guarantee are for convenience only and do not necessarily define, limit, describe, or construe the contents of such articles or sections.

**<u>G17. Attorney Review.</u>** Each Guarantor acknowledges that it has had an opportunity to review this Guarantee, the Agreement, and all addenda with counsel of its choosing before signing the documents or has chosen not to avail itself of the opportunity to do so. This Agreement and this Guarantee will be construed without regard to the party or parties responsible for the preparation of same and will be deemed as prepared jointly by UFS and each Merchant. Any ambiguity or uncertainty in this Agreement or this Guarantee will not be interpreted or construed against any party.

**<u>G18. Entire Agreement.</u>** This Guarantee, inclusive of all addenda, if any, executed simultaneously herewith may not be amended, modified, or canceled except in writing signed by all parties. Should there arise any conflict between this Guarantee and any other document preceding it, this Guarantee will govern. This Guarantee does not affect any previous agreement between the parties unless such an agreement is specifically referenced in the Agreement or herein. This Guarantee will not be affected by any subsequent agreement between the parties unless this Guarantee is specifically referenced therein.

**<u>G19. Counterparts; Fax and Electronic Signatures.</u>** This Guarantee may be executed electronically and in counterparts. Facsimile and electronic copies of this Guarantee will have the full force and effect of an original.

THE TERMS, DEFINITIONS, CONDITIONS AND INFORMATION SET FORTH IN THE "RECEIVABLES PURCHASE AGREEMENT", INCLUDING THE "TERMS AND CONDITIONS", ARE HEREBY INCORPORATED IN AND MADE A PART OF THIS GUARANTEE. CAPITALIZED TERMS NOT DEFINED IN THIS GUARANTEE SHALL HAVE THE MEANING SET FORTH IN THE RECEIVABLES PURCHASE AGREEMENT, INCLUDING THE TERMS AND CONDITIONS.

**<u>G20. Communications</u>**. UFS may use automated telephone dialing, text messaging systems, and e-mail to provide messages to Guarantor(s) about Merchant(s)'s account. Telephone messages may be played by a machine automatically when the telephone is answered, whether answered by an Owner, a Guarantor, or someone else. These messages may also be recorded by the recipient's answering machine or voice mail. Each Guarantor gives UFS permission to call or send a text message to any telephone number given to UFS in connection with this Agreement and to play pre-recorded messages and/or send text messages with information about this Agreement and/or any Merchant's account over the phone. Each Guarantor also gives UFS permission to communicate such information to them by e-mail. Each Guarantor agrees that UFS will not be liable to any of them for any such calls or electronic communications, even if information is communicated to an unintended recipient. Each Guarantor acknowledges that when they receive such calls or electronic communications, they may incur a charge from the company that provides them with telecommunications, wireless, and/or Internet services, and that UFS has no liability for any such charges.

**SIGNATURES TO FOLLOW ON NEXT PAGE**

**I have read and agree to the terms and conditions set forth above:**

---

| | |
|:---|:---|
| ![](igi_ex104img39.jpg) |  |
| Name and Title: JAMES A VILLA, OWNER | Name and Title: |
| Date: 02/13/2024 | Date: 02/13/2024 |

---

Page **16** of **18**

**<u>RECEIVABLES PURCHASE AGREEMENT</u>**

**THE UNDERSIGNED HEREBY ACCEPT THE TERMS OF THIS GUARANTEE**

**GUARANTOR (#1)**

---

| | | | |
|:---|:---|:---|:---|
| By:  | JAMES A VILLA, OWNER  |  | ![](igi_ex104img42.jpg) |
|  | (Print Name and Title) |  | (Signature) |
| SS#: 061-54-9789 | SS#: 061-54-9789 | Driver License Number: |  |
| **GUARANTOR (#2)** | **GUARANTOR (#2)** |  |  |
| By:  |  |  | {{sign_2}} |
|  | (Print Name and Title) |  | (Signature) |
| SS#: -- |  | Driver License Number: |  |

---

Page **17** of **18**

<u>**RECEIVABLES PURCHASE AGREEMENT**</u>

**DECLARATION OF ORDINARY COURSE OF BUSINESS**

Each undersigned hereby declares the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I am duly authorized to sign the Receivables Purchase Agreement ("Agreement"), dated <u>02/13/2024</u>, between UFS WEST LLC ("UFS") and <u>INFINITE GROUP INC</u> ("Merchant") on behalf of Merchant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. This Declaration incorporates by reference the Agreement and every addendum to it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. I acknowledge that I am authorized to sign the Agreement and every addendum to it on behalf of each Merchant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. I acknowledge that I had sufficient time to review the Agreement and every addendum to it before signing it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. I acknowledge that I had an opportunity to seek legal advice from counsel of my choosing before signing the Agreement and every addendum to it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. I acknowledge that each Merchant is entering into the Agreement voluntarily and without any coercion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. I acknowledge that each Merchant is entering into the Agreement in the ordinary course of its business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. I acknowledge that the payments to be made from any Merchant to UFS under the Agreement are being made in the ordinary course of each Merchant's business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. I DECLARE UNDER PENALTY OF PERJURY THAT THE FOREGOING IS TRUE AND CORRECT.

02/13/2024 <br> Executed on   <br> (Date)

**<u>FOR THE MERCHANT(#1)</u>**

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| | | | |
|:---|:---|:---|:---|
| By:  | JAMES A VILLA, OWNER  |  | ![](igi_ex104img43.jpg) |
|  | (Print Name and Title) |  | (Signature) |
| SS#: 061-54-9789 | SS#: 061-54-9789 | Driver License Number: |  |
| **<u>FOR THE MERCHANT(#2)</u>** | **<u>FOR THE MERCHANT(#2)</u>** |  |  |
| By:  |  |  | {{sign_2}} |
|  | (Print Name and Title) |  | (Signature) |

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Page **17** of **18**

**<u>RECEIVABLES PURCHASE AGREEMENT</u>**

**<u>AUTHORIZATION AGREEMENT</u>**

**<u>FOR AUTOMATED CLEARING HOUSE TRANSACTIONS</u>**

INFINITE GROUP INC ("Seller") hereby authorizes UFS to present automated clearinghouse ("ACH") debits to the following checking account in the amount of the Initial Installment. In addition, if any Default occurs under the Agreement, Seller authorizes UFS to debit any and all accounts controlled by Seller or controlled by any entity with the same Federal Tax Identification Number as Seller up to the total amount, including but not limited to, all fees and charges, due to Buyer from Seller under the terms of the Agreement. All capitalized terms herein shall be as defined in the Receivables Purchase Agreement attached hereto. Merchant agrees to be bound by the ACH Rules as set forth by NACHA (The Electronic Payments Association)

Name of Bank: THE UPSTATE NATIONAL BANK

Account Number: XXXXXXXXX

Routing Number: XXXXXXXXX

Seller's EIN: - XX-XXXXXXX

---

| | | | |
|:---|:---|:---|:---|
| ![](igi_ex104img41.jpg) | Signature:  | Signature: |  |
| Name: JAMES A VILLA, OWNER |  | Name: |  |
| Date: 02/13/2024 |  | Date: | 02/13/2024  |

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**<u>PLEASE ATTACH A VOIDED CHECK</u>**

Page **18** of **18**

**<u>Specified Percentage Calculation & Confirmation Addendum</u>**

As per the enclosed Receivables Purchase Agreement, the Merchant has committed to selling a Specified Percentage of the Merchant's Receivables to UFS. The accuracy of this Specified Percentage is a critical component of the Receivables Purchase Agreement. To ensure accuracy, UFS has outlined below the methodology employed to compute the Specified Percentage. By affixing your signature below, the Merchant confirms the accuracy of the Specified Percentage calculation and the estimated revenue figures.

---

| | | |
|:---|:---|:---|
| Metric | Basis | Amount |
| Merchant's Average Monthly Sales:  | Calculated based on bank statements or other information provided by or conveyed by Merchant | $519912.53 |
| Specified Percentage Sold to UFS: | This is the set percentage of future revenue sold to UFS by Merchant | 4.85% |
| Initial Estimated Payment  | This is calculated as follows: (Monthly Average Revenue\*Specified Percentage)/Average Weekdays in a Calendar Month | $5,823.53/WEEKLY |

---

Please review the provided methodology carefully, and if you find that it accurately represents the terms and conditions outlined in the Receivables Purchase Agreement, kindly acknowledge your confirmation by signing and dating below. By confirming the accuracy of the Specified Percentage and estimated revenue figures, we aim to ensure a transparent and mutually beneficial business relationship. Should you have any questions or require further clarification, please do not hesitate to contact us.

**I have read and agree that the data, information and calculations above are accurate.**

---

| |
|:---|
| ![](igi_ex104img40.jpg) |
| Name and Title: JAMES A VILLA, OWNER |
| Date: 02/13/2024 |

---

## Exhibit 10.5

**EXHIBIT 10.5**

**SUBORDINATED BUSINESS LOAN AND SECURITY AGREEMENT**

**THIS SUBORDINATED BUSINESS LOAN AND SECURITY AGREEMENT** (as the same may be amended, restated, modified, or supplemented from time to time, this "**Agreement**") dated as of March 08, 2024 (the "**Effective Date**") among <u>Agile Capital Funding, LLC</u> as collateral agent (in such capacity, together with its successors and assigns in such capacity, "**Collateral Agent**"), and <u>Agile Lending, LLC</u>, a Virginia limited liability company ("**Lead Lender**") and each assignee that becomes a party to this Agreement pursuant to Section 12.1 (each individually with the Lead Lender, a "Lender" and collectively with the Lead Lender, the "Lenders"), and INFINITE GROUP, INC., A Domestic Delaware Corporation ("**Parent**") and its subsidiaries, INFINITE GROUP, INC., A Domestic Delaware Corporation and together with Parent, and the other entities shown as signatories hereto or that are joined from time to time as a Borrower, individually and collectively, jointly and severally, ("**Borrower**"), and provides the terms on which the Lenders shall lend to Borrower and Borrower shall repay the Lenders the loans described herein. The Collateral Agent, Lenders, and Borrower, each a "Party" and collectively the "Parties", intending to be legally bound, hereby agree as follows:

**1.**  **<u>DEFINITIONS, ACCOUNTING AND OTHER TERMS</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.1** Capitalized terms used herein shall have the meanings set forth in <u>Section 13</u> to the extent defined therein. All other capitalized terms used but not defined herein shall have the meaning given to such terms in the Code. Any accounting term used but not defined herein shall be construed in accordance with GAAP and all calculations shall be made in accordance with GAAP. The term "financial statements" shall include the accompanying notes and schedules thereto. Any section, subsection, schedule or exhibit references are to this Agreement unless otherwise specified.

**2.**  **<u>LOANS AND TERMS OF PAYMENT</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1 Promise to Pay**. Borrower hereby unconditionally promises to pay each Lender the outstanding principal amount of the Term Loan advanced to Borrower by such Lender and accrued and unpaid interest thereon and any other amounts due hereunder as and when due in accordance with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.2 Term Loans**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Availability</u>. The Lenders, relying upon each of the representations and warranties set out in this Agreement, as well as each of the representations, covenants and warranties set out in the other Loan Documents, hereby severally and not jointly agree with the Borrower that, subject to and upon the terms and conditions of this Agreement, shall advance the Principal Loan to the Borrower on the Effective Date, but in any event no later than two (2) Business Days after the date hereof, by wiring the funds to the Borrower's Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Repayment</u>. Borrower agrees to pay all amounts owing pursuant to the terms of this Agreement, including any financing charge, specified fees, interest and any other charges that may be assessed as provided in this Agreement or as documented in the Business Loan and Security Agreement Supplement (the "**Supplement**") or the Subordinated Secured Promissory Note (as defined below). The Term Loan shall be repaid by Borrower on the dates specified on Exhibit B-4 of this Agreement (each a "**Scheduled Repayment Date**") by the amount set out opposite each Scheduled Repayment Date (each a "**Scheduled Repayment Amount**") and in accordance with the Term Loan Amortization Schedule. If any payment on the Subordinated Secured Promissory Note is due on a day which is not a Business Day, such payment shall be due on the next succeeding Business Day, and such extension of time shall be taken into account in calculating the amount of interest payable under this Note. All unpaid principal and accrued and unpaid interest with respect to the Term Loan is due and payable in full on the Maturity Date. The Term Loan may only be prepaid in accordance with Sections 2.2(c) and 2.2(d). Once repaid, no portion of the Term Loan may be reborrowed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Mandatory Prepayments</u>. If an event described in Section 7.2 hereof occurs, or the Term Loan is accelerated following the occurrence of an Event of Default, Borrower shall immediately pay to Lenders, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of: (i) all outstanding principal of the Term Loans plus accrued and unpaid interest thereon accrued through the prepayment date, (ii) the Prepayment Fee (as defined in Section 2.2(d) below), plus (iii) all other Obligations that are due and payable, including, without limitation, interest at the Default Rate with respect to any past due amounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Permissive Prepayments and Make-Whole Premium</u>. Borrower shall have the right to make a full prepayment or partial prepayment of any or all of the Obligations in accordance with the prepayment amendment in Exhibit E of this Agreement. The foregoing notwithstanding, upon the prepayment of any principal amount, Borrower shall be obligated to pay a make-whole premium payment on account of such principal so paid, which shall be equal to the aggregate and actual amount of interest (at the contract rate of interest) that would be paid through the Maturity Date ("**Prepayment Fee**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.3 Payment of Interest on the Term Loans**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Interest Rate</u>. Borrower agrees to pay in full the interest as set forth in the Supplement found in Exhibit B-5 of this Agreement. Interest shall accrue on the Term Loan commencing on, and including, the Effective Date of such Term Loan, and shall accrue on the principal amount outstanding under the Term Loan through and including the day on which the Term Loan is paid in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Default Rate</u>. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall accrue interest at a fixed per annum rate equal to the rate that is otherwise applicable thereto <u>plus</u> five percentage points (5.00%) (the "**Default Rate**"). Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Collateral Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>360 Day Year</u>. Interest shall be computed on the basis of a three hundred sixty (360) day year and the actual number of days elapsed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Debit of Accounts; Payments</u>. All payments on the Subordinated Secured Promissory Note shall be made via automated clearing house transfers of immediately available funds to be initiated by Lender in accordance with the authorization and direction of Borrower to Lead Lender provided in Exhibit B-6 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Usury Savings Clause</u>. This Agreement and the other Loan Documents are subject to the express condition that at no time shall Borrower be required to pay interest on the principal balance of the Term Loan at a rate which could subject Lenders to either civil or criminal liability as a result of being in excess of the Maximum Legal Rate. If by the terms of this Agreement or the other Loan Documents, Borrower is at any time required or obligated to pay interest on the principal balance due hereunder at a rate in excess of the Maximum Legal Rate, the Interest Rate or the Default Rate, as the case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to have been payments in reduction of principal and not on account of the interest due hereunder. All sums paid or agreed to be paid to the Collateral Agent or Lenders for the use, forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan until payment in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.4 Fees**. Borrower shall pay to Collateral Agent and/or Lenders:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Administrative Agent Fee</u>. The Administrative Agent Fee of TEN THOUSAND FIVE HUNDRED DOLLARS ($10,500.00, which shall be paid at closing out of proceeds of the Term Loan for the account of Collateral Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.5 Subordinated Secured Promissory Notes**. The Term Loan shall be evidenced by a Subordinated Secured Promissory Note in the form attached as <u>Exhibit D</u> hereto ("**Subordinated Secured Promissory Note**") and shall be repayable as set forth in this Agreement.

**3.**  **<u>CONDITIONS OF LOANS</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1 Conditions Precedent to Term Loan**. Each Lender's obligation to make the Term Loan is subject to the condition precedent that each Lender shall consent to or shall have received, in form and substance satisfactory to each Lender, such documents, and completion of such other matters, as each Lender may reasonably deem necessary or appropriate.

**4.**  **<u>CREATION OF SECURITY INTEREST</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.1 Grant of Security Interest**. Effective from and after the Effective Date of the Term Loan, Borrower hereby grants Collateral Agent, for the ratable benefit of the Lenders, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Collateral Agent, for the ratable benefit of the Lenders, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof. If Borrower shall acquire a commercial tort claim (as defined in the Code), Borrower shall grant to Collateral Agent, for the ratable benefit of the Lenders, a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Collateral Agent. If this Agreement is terminated, Collateral Agent's Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations) and at such time as the Lenders' obligation to extend the Term Loan has terminated, Collateral Agent shall, at the sole cost and expense of Borrower, release its Liens in the Collateral and all rights therein shall revert to Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.2 Authorization to File Financing Statements**. Borrower hereby authorizes Collateral Agent to file such financing statements and/or take any other action required to perfect Collateral Agent's security interests in the Collateral, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Collateral Agent's interest or rights in the Collateral and under the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.3 Guaranty**. (Intentionally omitted).

**5.**  **<u>REPRESENTATIONS AND WARRANTIES</u>** 

Each Borrower, jointly and severally, represents and warrants to Collateral Agent and the Lenders as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1 Due Organization, Authorization: Power and Authority**. Each Borrower and each of its respective Subsidiaries is duly formed, validly existing and in good standing as under the laws of its jurisdiction of organization or formation and each Borrower and each of its respective Subsidiaries is qualified and licensed to do business and is in good standing in any jurisdiction in which the conduct of its businesses or its ownership of property requires that it be qualified except where the failure to do so could not reasonably be expected to result in a Material Adverse Change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2 Collateral**. Borrower and Subsidiaries have good title to, have rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien under the Loan Documents, free and clear of any and all Liens except Permitted Liens, and neither Borrower nor any of its Subsidiaries have any deposit accounts, securities accounts, commodity accounts or other investment accounts other than the collateral accounts or other investment accounts (the "**Collateral Accounts**"), if any, described in the Perfection Certificates delivered to Collateral Agent in connection herewith with respect to which Borrower has given Collateral Agent notice and taken, subject to Section 6.6 (a), such actions as are necessary to give Collateral Agent a perfected security interest therein. The security interests granted herein are and shall at all times continue to be a first priority perfected security interest in the Collateral, subject only to Permitted Liens that are permitted by the terms of this Agreement to have priority to Collateral Agent's Lien. All Inventory and Equipment that is part of the Collateral is in all material respects of good and marketable quality, free from material defects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.3 Litigation**. Except as disclosed on the Perfection Certificate, there are no actions, suits, investigations, or proceedings pending or, to the knowledge of any of the Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries involving more than Five Hundred Thousand Dollars ($500,000.00).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.4 No Material Adverse Change; Financial Statements**. All consolidated financial statements for Parent and its Subsidiaries, delivered to Collateral Agent fairly present, in conformity with GAAP, in all material respects the consolidated financial condition of Parent and its Subsidiaries, and the consolidated results of operations of Parent and its Subsidiaries. Since the date of the most recent financial statements submitted to any Lender, there has not been a Material Adverse Change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.5 Solvency**. Borrower and each of its Subsidiaries, when taken as a whole, is Solvent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.6 Regulatory Compliance**. Neither Borrower nor any of its Subsidiaries has violated any laws, ordinances or rules, the violation of which could reasonably be expected to result in a Material Adverse Change. Borrower and each of its Subsidiaries has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all governmental authorities that are necessary to continue their respective businesses as currently conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.7 Investments**. Neither Borrower nor any of its Subsidiaries owns any stock, shares, partnership interests or other equity securities except for Permitted Investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.8 Tax Returns and Payments; Pension Contributions**. Each Borrower and each of its respective Subsidiaries has timely filed all required tax returns and reports, and, except as disclosed, each Borrower and each of its respective Subsidiaries, has timely paid all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by such Borrower and such Subsidiaries, in all jurisdictions in which such Borrower or any such Subsidiary is subject to taxes, including the United States, unless such taxes are being contested in good faith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.9 Use of Proceeds**. Borrower shall use the proceeds of the Term Loan solely to fund its general business requirements in accordance with the provisions of this Agreement, and not for personal, family, household or agricultural purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.10 Full Disclosure**. No written representation, warranty or other statement of any Borrower or any of its Subsidiaries in any certificate or written statement given to Collateral Agent or any Lender, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Collateral Agent or any Lender, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized that projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.11 Shares**. Each Borrower has full power and authority to create a first lien on its Shares and no disability or contractual obligation exists that would prohibit such Borrower from pledging the Shares pursuant to this Agreement. To Borrower's knowledge, there are no subscriptions, warrants, rights of first refusal or other restrictions on transfer relative to, or options exercisable with respect to the Shares. With respect to each Subsidiary which is a corporation, the Shares have been and will be duly authorized and validly issued, and are fully paid and non-assessable. To Borrower's knowledge, the Shares are not the subject of any present or threatened suit, action, arbitration, administrative or other proceeding, and Borrower knows of no reasonable grounds for the institution of any such proceedings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.12 Guarantee**. (Intentionally omitted)

**6.**  **<u>AFFIRMATIVE COVENANTS</u>** 

Borrower shall, and shall cause each of its Subsidiaries to, do all of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1 Government Compliance**. Maintain its and all its Subsidiaries' legal existence and good standing in their respective jurisdictions of organization and maintain qualification in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2 Financial Statements, Reports, Certificates, Notices**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Deliver to Collateral Agent and each Lender: (i) as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated and consolidating balance sheet, income statement and cash flow statement covering the consolidated operations of Parent and its Subsidiaries for such month certified by a Responsible Officer and in a form reasonably acceptable to Collateral Agent; (ii) prompt notice of any material amendments of or other changes to the capitalization table of Borrower (other than Parent) and to the Operating Documents of Borrower or any of its Subsidiaries, together with any copies reflecting such amendments or changes with respect thereto; (iii) as soon as available, but no later than thirty (30) days after the last day of each month, copies of the month end account statements for each Collateral Account maintained by Borrower or its Subsidiaries, which statements may be provided to Collateral Agent and each Lender by Borrower or directly from the applicable institution(s); (iv) prompt notice of any event that (A) could reasonably be expected to materially and adversely affect the Borrower's Intellectual Property and (B) could reasonably be expected to result in a Material Adverse Change; (v) written notice at least (10) days' prior to Borrower's creation of a new Subsidiary in accordance with the terms of Section 6.10; (vi) written notice at least (30) days' prior to Borrower's (A) changing its jurisdiction of organization, (B) changing its organizational structure or type, (C) changing its legal name, (D) changing any organizational number (if any) assigned by its jurisdiction of organization, or (E) registering or filing any Intellectual Property; (vii) upon Borrower becoming aware of the existence of any Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default, prompt (and in any event within three (3) Business Days) written notice of such occurrence, which such notice shall include a reasonably detailed description of such Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default; (viii) notice of any commercial tort claim of Borrower or any Guarantor and of the general details thereof; (ix) other information as reasonably requested by Collateral Agent or any Lender. (x) written notice of any litigation or governmental proceedings pending or threatened (in writing) against Borrower or any of its Subsidiaries, which could reasonably be expected to result in damages or costs to Borrower or any of its Subsidiaries of more than Five Hundred Thousand Dollars ($500,000.00); and (xi) written notice of all returns, recoveries, disputes and claims regarding Inventory that involve more than Five Hundred Thousand Dollars ($500,000.00) individually or in the aggregate in any calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Keep proper, complete and true books of record and account in accordance with GAAP and in all material respects. Borrower shall, and shall cause each of its Subsidiaries to, allow, at the sole cost of Borrower, Collateral Agent or any Lender, during regular business hours upon reasonable prior notice (provided that no notice shall be required when an Event of Default has occurred and is continuing), to visit and inspect any of its properties, to examine and make abstracts or copies from any of its books and records, and to conduct a collateral audit and analysis of its operations and the Collateral. Such audits shall be conducted no more often than twice every year unless (and more frequently if) an Event of Default has occurred and is continuing. Notwithstanding the foregoing, upon request of any Lender, Borrower agrees to permit such Lender to communicate with Borrower's accounting firm, in the presence of a Responsible Officer of the Borrower or the Parent, with respect to the consolidated financial statements delivered pursuant to this Section 6.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.3 Inventory and Returns**. Keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower, or any of its Subsidiaries, and their respective account debtors shall follow Borrower's, or such Subsidiary's, customary practices as they exist at the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.4 Taxes.** Timely file and require each of its Subsidiaries to timely file, all required tax returns and reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower or its Subsidiaries, except as otherwise permitted pursuant to the terms of Section 5.8 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.5 Insurance**. Keep Borrower's and its Subsidiaries' business and the Collateral insured for risks and in amounts standard for companies in Borrower's and its Subsidiaries' industry and location and as Collateral Agent may reasonably request (including customary lender's loss payable endorsements and naming the Collateral Agent as an additional insured), and give the Collateral Agent thirty (30) days' prior written notice before any such policy or policies shall be materially altered or canceled (other than cancellation for non-payment of premiums, for which ten (10) days' prior written notice shall be required). At Collateral Agent's request, Borrower shall deliver certified copies of policies and evidence of all premium payments to Collateral Agent. If Borrower or any of its Subsidiaries fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of payment to third persons, Collateral Agent and/or any Lender may make (but has no obligation to do so), at Borrower's expense, all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Collateral Agent or such Lender deems prudent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.6 Litigation Cooperation**. Commencing on the Effective Date and continuing through the termination of this Agreement, make available to Collateral Agent and the Lenders, without expense to Collateral Agent or the Lenders, Borrower and each of Borrower's officers, employees and agents and Borrower's books and records, to the extent that Collateral Agent or any Lender may reasonably deem them necessary to prosecute or defend any third party suit or proceeding instituted by or against Collateral Agent or any Lender with respect to any Collateral or relating to Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.7 Landlord Waivers; Bailee Waivers**. In the event that Borrower, after the Effective Date, intends to add any new offices or business locations, including warehouses, or otherwise store any portion of the Collateral with, or deliver any portion of the Collateral to, a bailee, in each case pursuant to Section 7.2, then Borrower must first receive the written consent of Collateral Agent to do so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.8 Further Assurances**. Execute any further instruments and take any and all further action as Collateral Agent or any Lender reasonably requests to perfect or continue Collateral Agent's Lien in the Collateral or to effect the purposes of this Agreement, including without limitation, permit Collateral Agent or any Lender to discuss Borrower's financial condition with Borrower's accountants in the presence of a Responsible Officer of the Borrower or the Parent.

**7.**  **<u>NEGATIVE COVENANTS</u>** 

Borrower shall not, and shall not permit any of its Subsidiaries to, do any of the following without the prior written consent of the Required Lenders:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.1 Dispositions**. Convey, sell, lease, transfer, assign, dispose of (collectively, "**Transfer**"), or permit any of its Subsidiaries to Transfer, all or any part of its business or property (including Intellectual Property), except for Transfers (a) of (i) Inventory in the ordinary course of business and (ii) Inventory, that, prior to the Effective Date, has been written down or written off, together with related tangible assets and non-material Intellectual Property; (b) of worn out or obsolete Equipment; (c) in connection with Permitted Liens, Permitted Investments, Permitted Indebtedness and Permitted Licenses; (d) of any non-material Intellectual Property; (e) from (i) Borrower to another BorrowerGuarantor, (ii) a non-Borrower Subsidiary to a Borrower, and (iii) a non-Borrower Subsidiary to another non-Borrower ; or (f) permitted under Section 7.3 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2 Changes in Business or Management, Ownership**. (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses engaged in by Borrower as of the Effective Date or reasonably related thereto; (b) liquidate or dissolve or permit any of its Subsidiaries to liquidate or dissolve; or (c) cause or permit, voluntarily or involuntarily, any Key Person to cease to be actively engaged in the management of Borrower unless written notice thereof is provided to Collateral Agent and each Lender within ten (10) days of such Key Person ceasing to be actively engaged in the management of Borrower,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3 Encumbrance**. Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest granted herein (except for Permitted Liens), or enter into any agreement, document, instrument or other arrangement (except with or in favor of Collateral Agent, for the ratable benefit of the Lenders) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower, or any of its Subsidiaries, from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower's or such Subsidiary's Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.4 Maintenance of Collateral Accounts**. Maintain any Collateral Account except pursuant to the terms of Section 6.6 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.5 Restricted Payments**. Following the occurrence and during the continuance of an Event of Default, pay any dividends (other than dividends payable solely in capital stock) or make any distribution or payment in respect of or redeem, retire or purchase any capital stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.6 Transactions with Affiliates**. Directly or indirectly enter into any material transaction with any Affiliate of Borrower or any of its Subsidiaries (other than among Borrower), except for (a) transactions that are in the ordinary course of Borrower's or such Subsidiary's business, upon fair and reasonable terms that are no less favorable to Borrower or such Subsidiary than would be obtained in an arm's length transaction with a non-affiliated Person, and (b) Subordinated Debt or equity investments by Borrower's investors in Borrower or its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.11 Material Agreements**. Waived.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.12 Financial Covenants.** Waived.

**8.**  **<u>EVENTS OF DEFAULT</u>** 

Any one of the following shall constitute an event of default (an "**Event of Default**") under this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.1 Payment Default**. Borrower fails to (a) make any payment of principal or interest on the Term Loan on its due date, or (b) pay any other Obligation within three (3) Business Days after such Obligation is due and payable (which three (3) Business Day grace period shall not apply to payments due on the Maturity Date or the date of acceleration pursuant to Section 9.1 (a) hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2 Covenant Default**. Borrower or any of its Subsidiaries fails or neglects to perform any obligation in Sections 6.2 (Financial Statements, Reports, Certificates), 6.4 (Taxes), 6.5 (Insurance), or Borrower violates any provision in Section 7 and such violation is not cured within thirty (30) days after Borrower becomes aware of failure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.3 Material Adverse Change**. A Material Adverse Change has occurred and is continuing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.4 Attachment; Levy; Restraint on Business**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) (i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or any of its Material Subsidiaries or of any entity under control of Borrower or its Material Subsidiaries on deposit with any institution at which Borrower or any of its Subsidiaries maintains a Collateral Account, or (ii) a notice of lien, levy, or assessment is filed against Borrower or any of its Material Subsidiaries or their respective assets by any government agency, and the same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) any material portion of Borrower's or any of its Subsidiaries' assets is attached, seized, levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower or any of its Subsidiaries from conducting any part of its business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.5 Insolvency**. (a) Parent is or becomes Insolvent; (b) Parent and its Subsidiaries, taken as a whole, are or become Insolvent; (c) Borrower or any Material Subsidiary begins an Insolvency Proceeding; or (d) an Insolvency Proceeding is begun against Borrower or any Material Subsidiary and is not dismissed or stayed within forty five (45) days (but no Term Loan shall be extended while Parent or any Subsidiary is Insolvent and/or until any Insolvency Proceeding is dismissed);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.6 Judgments**. (a) One or more judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least Five Hundred Thousand Dollars ($500,000.00) (not covered by independent third party insurance) shall be rendered against Borrower or any of its Subsidiaries and shall remain unsatisfied, unvacated, or unstayed for a period of twenty (20) days after the entry thereof or (b) any judgments, orders or decrees rendered against Borrower that could reasonably be expected to result in a Material Adverse Change;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.8 Misrepresentations**. Borrower or any of its Subsidiaries or any Person acting for Borrower or any of its Subsidiaries makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Collateral Agent and/or Lenders or to induce Collateral Agent and/or the Lenders to enter this Agreement or any Loan Document, and such representation, warranty, or other statement, when taken as a whole, is incorrect in any material respect when made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.9 Lien Priority.** Any Lien created hereunder or by any other Loan Document shall at any time fail to constitute a valid and perfected first Lien on any of the Collateral purported to be secured thereby, subject to no prior or equal Lien, other than Permitted Liens or liens arising as a matter of applicable law.

**9.**  **<u>RIGHTS AND REMEDIES</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.1 Rights and Remedies**. Upon the occurrence of an Event of Default hereunder (unless all Events of Default have been cured by Borrower, as applicable, or waived by Lenders in writing), Lenders may, at their option: (i) by written notice to Borrower, declare the entire unpaid principal balance of the Term Loan, together with all accrued interest thereon and any other charges or fees payable hereunder, immediately due and payable regardless of any prior forbearance and (ii) exercise any and all rights and remedies available to it hereunder, under the Subordinated Secured Promissory Note and/or under applicable law, including, without limitation, the right to collect from Borrower all sums due under this Agreement and the Subordinated Secured Promissory Note and repossess any Collateral at Borrower's expense. Borrower shall pay all reasonable costs and expenses incurred by or on behalf of Lenders or Collateral Agent in connection with Lenders' exercise of any or all of its rights and remedies under this Agreement or the Subordinated Secured Promissory Note, including, without limitation, reasonable attorneys' fees. Borrower waives the right to any stay of execution and the benefit of all exemption laws now or hereafter in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2 Power of Attorney**. Borrower hereby irrevocably appoints Collateral Agent as its lawful attorney in fact, exercisable upon the occurrence and during the continuance of an Event of Default, to: (a) endorse Borrower's or any of its Subsidiaries' name on any checks or other forms of payment or security; (b) sign Borrower's or any of its Subsidiaries' name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Collateral Agent determines reasonable; (d) make, settle, and adjust all claims under Borrower's insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Collateral Agent or a third party as the Code or any applicable law permits. Borrower hereby appoints Collateral Agent as its lawful attorney in fact to sign Borrower's or any of its Subsidiaries' name on any documents necessary to perfect or continue the perfection of Collateral Agent's security interest in, and lien on, the Collateral regardless of whether an Event of Default has occurred until all Obligations (other than inchoate indemnity obligations) have been satisfied in full and Collateral Agent and the Lenders are under no further obligation to extend the Term Loan hereunder. Collateral Agent's foregoing appointment as Borrower's or any of its Subsidiaries' attorney in fact, and all of Collateral Agent's rights and powers, coupled with an interest, are irrevocable until all Obligations (other than inchoate indemnity obligations) have been fully repaid and performed and Collateral Agent's and the Lenders' obligation to provide the Term Loan terminates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.3 No Waiver; Remedies Cumulative**. Failure by Collateral Agent or any Lender, at any time or times, to require strict performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Collateral Agent or any Lender thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by Collateral Agent and the Required Lenders and then is only effective for the specific instance and purpose for which it is given. The rights and remedies of Collateral Agent and the Lenders under this Agreement and the other Loan Documents are cumulative. Collateral Agent and the Lenders have all rights and remedies provided under the Code, any applicable law, by law, or in equity. The exercise by Collateral Agent or any Lender of one right or remedy is not an election, and Collateral Agent's or any Lender's waiver of any Event of Default is not a continuing waiver. Collateral Agent's or any Lender's delay in exercising any remedy is not a waiver, election, or acquiescence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.4 Demand Waiver**. Borrower waives, to the fullest extent permitted by law, demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Collateral Agent or any Lender on which Borrower or any Subsidiary is liable.

**10.**  **<u>NOTICES</u>** 

All notices, consents, requests, approvals, demands, or other communication (collectively, "**Communication**") by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by facsimile transmission or e-mail; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below. Any of Collateral Agent, any Lender or Borrower may change its mailing address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10.

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| |
|:---|
| If to Borrower: |
| <br> Address: <br><u>E-Mail Address:</u>  |
| If to Collateral Agent:<br><u>Agile Capital Funding, LLC</u><br> <u>104 E. 25<sup>th</sup> Street 10<sup>th</sup> Floor</u> <br> <u>New York, NY 10010</u><br> E-Mail Address: <u>aaron@agilecapitalfunding.com</u> |

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**11.**  **<u>CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.1 Waiver of Jury Trial**. EACH OF BORROWER, COLLATERAL AGENT AND LENDERS UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY DEALINGS AMONG BORROWER, COLLATERAL AGENT AND/OR LENDERS RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED AMONG BORROWER, COLLATERAL AGENT AND/OR LENDERS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.2 Governing Law and Jurisdiction**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) THIS AGREEMENT, THE OTHER LOAN DOCUMENTS (EXCLUDING THOSE LOAN DOCUMENTS THAT BY THEIR OWN TERMS ARE EXPRESSLY GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE COMMONWEALTH OF VIRGINIA (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAWS OTHER THAN THE LAWS OF THE COMMONWEALTH OF VIRGINIA), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL, PROVIDED, HOWEVER, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN VIRGINIA SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Submission to Jurisdiction</u>. Any legal action or proceeding with respect to the Loan Documents shall be brought exclusively in the courts of the Commonwealth of Virginia, including, without limitation the Circuit Court of Arlington County in the Commonwealth of Virginia and, by execution and delivery of this Agreement, Borrower hereby accepts for itself and in respect of its Property, generally and unconditionally, the jurisdiction of the aforesaid courts. Notwithstanding the foregoing, Collateral Agent and Lenders shall have the right to bring any action or proceeding against Borrower (or any property of Borrower) in the court of any other jurisdiction Collateral Agent or Lenders deem necessary or appropriate in order to realize on the Collateral or other security for the Obligations. The parties hereto hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such jurisdictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Service of Process</u>. Borrower irrevocably waives personal service of any and all legal process, summons, notices and other documents and other service of process of any kind and consents to such service in any suit, action or proceeding brought in the United States of America with respect to or otherwise arising out of or in connection with any Loan Document by any means permitted by applicable requirements of law, including by the mailing thereof (by registered or certified mail, postage prepaid) to the address of Borrower specified herein (and shall be effective when such mailing shall be effective, as provided therein). Borrower agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Non-exclusive Jurisdiction</u>. Nothing contained in this Section 11.2 shall affect the right of Collateral Agent or Lenders to serve process in any other manner permitted by applicable requirements of law or commence legal proceedings or otherwise proceed against Borrower in any other jurisdiction.

**12.**  **<u>GENERAL PROVISIONS</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.1 Successors and Assigns**. This Agreement binds and is for the benefit of the successors and permitted assigns of each Party. Borrower may not transfer, pledge or assign this Agreement or any rights or obligations under it without Collateral Agent's prior written consent (which may be granted or withheld in Collateral Agent's discretion, subject to Section 12.5). The Lenders have the right, without the consent of or notice to Borrower, to sell, transfer, assign, pledge, negotiate, or grant participation in (any such sale, transfer, assignment, negotiation, or grant of a participation, a "**Lender Transfer**") all or any part of, or any interest in, any one or more Lenders' obligations, rights, and benefits under this Agreement and the other Loan Documents. In the event of such a Lender Transfer, Collateral Agent or Lead Lender shall have the right to, at its respective sole and absolute option, (a) notify Borrower of such Lender Transfer, in accordance with Section 10 hereof, and direct Borrower to make payments directly to such other Lender or Lenders, indicating such other Lenders' Pro Rata share of the Term Loan and the amount of the payment to be made in connection therewith, or (b) continue to collect payments hereunder and under the other Loan Documents and pay such other Lenders their Pro Rata Share of the Term Loan, in accordance with, and on such terms, as are determined by and between the Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.2 Indemnification**. Borrower, jointly and severally, agrees to indemnify, defend and hold Collateral Agent and the Lenders and their respective members, managers, directors, officers, employees, consultants, agents, attorneys, or any other Person affiliated with or representing Collateral Agent or the Lenders (each, an "**Indemnified Person**") harmless against: (a) all obligations, demands, claims, and liabilities (collectively, "**Claims**") asserted by any other party in connection with; related to; following; or arising from, out of or under, the transactions contemplated by the Loan Documents; and (b) all losses or expenses incurred, or paid by Indemnified Person in connection with; related to; following; or arising from, out of or under, the transactions contemplated by the Loan Documents between Collateral Agent, and/or the Lenders and Borrower (including reasonable attorneys' fees and expenses), except for Claims and/or losses directly caused by such Indemnified Person's gross negligence or willful misconduct. Borrower hereby further, jointly and severally, indemnifies, defends and holds each Indemnified Person harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the fees and disbursements of counsel for such Indemnified Person) in connection with any investigative, response, remedial, administrative or judicial matter or proceeding, whether or not such Indemnified Person shall be designated a party thereto and including any such proceeding initiated by or on behalf of Borrower, and the reasonable expenses of investigation by engineers, environmental consultants and similar technical personnel and any commission, fee or compensation claimed by any broker (other than any broker retained by Collateral Agent or Lenders) asserting any right to payment for the transactions contemplated hereby which may be imposed on, incurred by or asserted against such Indemnified Person as a result of or in connection with the transactions contemplated hereby and the use or intended use of the proceeds of the loan proceeds except for liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements directly caused by such Indemnified Person's gross negligence or willful misconduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.3 Severability of Provisions**. Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.4 Correction of Loan Documents**. Collateral Agent may correct patent errors and fill in any blanks in this Agreement and the other Loan Documents consistent with the agreement of the parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.5 Amendments in Writing; Integration**. (a) No amendment, modification, termination or waiver of any provision of this Agreement or any other Loan Document, no approval or consent thereunder, and no consent to any departure by Borrower or any of its Subsidiaries therefrom, shall in any event be effective unless the same shall be in writing and signed by Borrower, Collateral Agent and the Required Lenders provided that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) no such amendment, waiver or other modification that would have the effect of increasing or reducing a Lender's Term Loan Commitment or Commitment Percentage shall be effective as to such Lender without such Lender's written consent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) no such amendment, waiver or modification that would affect the rights and duties of Collateral Agent shall be effective without Collateral Agent's written consent or signature; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) no such amendment, waiver or other modification shall, unless signed by all the Lenders directly affected thereby, (A) reduce the principal of, rate of interest on or any fees with respect to the Term Loan or forgive any principal, interest (other than default interest) or fees (other than late charges) with respect to the Term Loan (B) postpone the date fixed for, or waive, any payment of principal of the Term Loan or of interest on the Term Loan (other than default interest) or any fees provided for hereunder (other than late charges or for any termination of any commitment); (C) change the definition of the term "Required Lenders" or the percentage of Lenders which shall be required for the Lenders to take any action hereunder; (D) release all or substantially all of any material portion of the Collateral, authorize Borrower to sell or otherwise dispose of all or substantially all or any material portion of the Collateral, except, in each case with respect to this clause (D), as otherwise may be expressly permitted under this Agreement or the other Loan Documents (including in connection with any disposition permitted hereunder); (E) amend, waive or otherwise modify this Section 12.5 or the definitions of the terms used in this Section 12.5 insofar as the definitions affect the substance of this Section 12.5; (F) consent to the assignment, delegation or other transfer by Borrower of any of its rights and obligations under any Loan Document or release Borrower of its payment obligations under any Loan Document, except, in each case with respect to this clause (F), pursuant to a merger or consolidation permitted pursuant to this Agreement; (G) amend any of the provisions of Section 9.4 or amend any of the definitions of Pro Rata Share, Term Loan Commitment, Commitment Percentage or that provide for the Lenders to receive their Pro Rata Shares of any fees, payments, setoffs or proceeds of Collateral hereunder; (H) subordinate the Liens granted in favor of Collateral Agent securing the Obligations. It is hereby understood and agreed that all Lenders shall be deemed directly affected by an amendment, waiver or other modification of the type described in the preceding clauses (C), (D), (E), (F), (G) and (H) of the immediately preceding sentence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Other than as expressly provided for in Section 12.5(a)(i) (iii), Collateral Agent may, if requested by the Required Lenders, from time to time designate covenants in this Agreement less restrictive by notification to a representative of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements with respect to such subject matter. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.6 Counterparts; Electronic Signatures**. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement. Any and all electronic signatures, whether by scan, e-mail, PDF, Docusign or similar means, and any electronic delivery of signature pages hereto, shall be treated as originals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.7 Survival**. All covenants, representations and warranties made in this Agreement continue in full force and effect until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) have been satisfied. The obligation of Borrower in Section 12.2 to indemnify each Lender and Collateral Agent, as well as the confidentiality provisions in Section 12.8 below, shall survive until the statute of limitations with respect to such claim or cause of action shall have run.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.8 Confidentiality**. In handling any confidential information of Borrower, the Lenders and Collateral Agent shall exercise the same degree of care that it exercises for their own proprietary information, but disclosure of information may be made: (a) subject to the terms and conditions of this Agreement, to the Lenders' and Collateral Agent's Subsidiaries or Affiliates; (b) to prospective transferees (other than those identified in (a) above) or purchasers of any interest in the Term Loan (provided, however, the Lenders and Collateral Agent shall obtain such prospective transferee's or purchaser's agreement to the terms of this provision or to similar confidentiality terms); (c) as required by law, regulation, subpoena, or other order; (d) to Lenders' or Collateral Agent's regulators or as otherwise required in connection with an examination or audit; (e) as Collateral Agent reasonably considers appropriate in exercising remedies under the Loan Documents; and (f) to third party service providers of the Lenders and/or Collateral Agent so long as such service providers have executed a confidentiality agreement or have agreed to similar confidentiality terms with the Lenders and Collateral Agent with terms no less restrictive than those contained herein. Confidential information does not include information that either: (i) is in the public domain or in the Lenders' and/or Collateral Agent's possession when disclosed to the Lenders and/or Collateral Agent, or becomes part of the public domain after disclosure to the Lenders and/or Collateral Agent at no fault of the Lenders or the Collateral Agent; or (ii) is disclosed to the Lenders and/or Collateral Agent by a third party, if the Lenders and/or Collateral Agent does not know that the third party is prohibited from disclosing the information. Collateral Agent and the Lenders may use confidential information for any purpose, including, without limitation, for the development of client databases, reporting purposes, and market analysis. The provisions of the immediately preceding sentence shall survive the termination of this Agreement. The agreements provided under this Section 12.8 supersede all prior agreements, understanding, representations, warranties, and negotiations between the parties about the subject matter of this Section 12.8.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.9 Right of Set Off**. Borrower hereby grants to Collateral Agent and to each Lender, a lien, security interest and right of set off as security for all Obligations to Collateral Agent and each Lender hereunder, whether now existing or hereafter arising, upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Collateral Agent or the Lenders or any entity under the control of Collateral Agent or the Lenders (including a Collateral Agent affiliate) or in transit to any of them. At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, Collateral Agent or the Lenders may set off the same or any part thereof and apply the same to any liability or obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE COLLATERAL AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY BORROWER.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.10 Borrower Liability**. Each Borrower may, acting singly, request credit extensions hereunder. Each Borrower hereby appoints the other as agent for the other for all purposes hereunder, including with respect to requesting credit extensions hereunder. Each Borrower hereunder shall be jointly and severally obligated to repay all credit extensions made hereunder, regardless of which Borrower actually receives said credit extension, as if each Borrower hereunder directly received all credit extensions. Each Borrower waives (a) any suretyship defenses available to it under the Code or any other applicable law, and (b) any right to require Collateral Agent or any Lender to: (i) proceed against any Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy. Collateral Agent and/or any Lender may exercise or not exercise any right or remedy it has against any Borrower or any security it holds (including the right to foreclose by judicial or non-judicial sale) without affecting any Borrower's liability. Notwithstanding any other provision of this Agreement or other related document, each Borrower irrevocably waives all rights that it may have at law or in equity (including, without limitation, any law subrogating Borrower to the rights of Collateral Agent and the Lenders under this Agreement) to seek contribution, indemnification or any other form of reimbursement from any other Borrower, or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise and all rights that it might have to benefit from, or to participate in, any security for the Obligations as a result of any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise. Any agreement providing for indemnification, reimbursement or any other arrangement prohibited under this Section 12.10 shall be null and void. If any payment is made to a Borrower in contravention of this Section 12.10, such Borrower shall hold such payment in trust for Collateral Agent and the Lenders and such payment shall be promptly delivered to Collateral Agent for application to the Obligations, whether matured or unmatured.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.11. Change of Law.** If, due to any change in applicable law or regulations, or the interpretation thereof by any court of law or other governing body having jurisdiction subsequent to the date of this Agreement, the performance of any provision of this Agreement, the loans granted pursuant hereto or any transaction contemplated hereby shall become unlawful, impracticable or impossible, the Lender shall have the right, with the consent of the Borrower not to be unreasonably withheld, conditioned or delayed, to amend the terms hereof in good faith so as to comply with the then current laws, rules and/or regulations in the way that, in its reasonable judgment, best and most closely reflects the terms and conditions negotiated herein and intended hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.12. Subordination to Senior Indebtedness.** In addition to the subordination and other provisions contained in any subordination or intercreditor agreement, Borrower, Collateral Agent and Lenders agree that the payment of all amounts payable hereunder and under the Subordinated Secured Promissory Note are expressly subordinated in right of payment to the payment when due of all obligations under the Senior Indebtedness.

**13.**  **<u>DEFINITIONS</u>** 

As used in this Agreement, the following terms have the following meanings:

**"Accounts"** shall mean accounts receivable of Parent.

"**Affiliate**" of any Person is a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person's senior executive officers, directors, partners if such Person is a partnership and, for any Person that is a limited liability company, that Person's managers and members.

**"Borrowing Base"** shall mean, at any time, an amount equal to 100% of Eligible Accounts.

"**Business Day**" is any day that is not a Saturday, Sunday or a day on which banks are closed in the Commonwealth of Virginia.

"**Code**" is the Uniform Commercial Code, as enacted in the Commonwealth of Virginia.

"**Collateral**" is any and all properties, rights and assets of Borrower described on <u>Exhibit A</u>.

"**Disbursement Instruction Form**" is that certain form attached hereto as <u>Exhibit B-2</u>.

**"Drawdown"** means any principal amount borrowed or to be borrowed (by any means) under the provisions hereof.

 **"Eligible Accounts"** shall mean Accounts that are not excluded as ineligible by virtue of one or more of the criteria set forth below. None of the following shall be Eligible Accounts: (A) Accounts (i) with respect to which the scheduled due date is more than 60 days after the original invoice date, (ii) which are unpaid more than (A) 90 days after the date of the original invoice therefor; (B) Accounts which (i) do not arise from the sale of goods or performance of services in the ordinary course of business, (ii) are not evidenced by an invoice or other documentation reasonably satisfactory to the Collateral Agent, (iii) represent a progress billing, or (iv) are contingent upon any Borrower's completion of any further performance; (C) Accounts which are owed by an account debtor which (i) does not maintain its chief executive office in the United States or (ii) is not organized under any applicable law of the United States, any State of the United States or the District of Columbia; (D) Accounts which are owed in any currency other than dollars; or (E) Accounts which are owed by any Affiliate, employee, officer, director or stockholder of any Borrower or Guarantor.

"**Equipment**" is all "equipment" as defined in the Code with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.

"**Existing Indebtedness**" is the indebtedness of Borrower listed in the Perfection Certificate.

"**Indebtedness**" is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations, (d) merchant cash advances; and (e) Contingent Obligations in respect of any of the foregoing.

"**Insolvency Proceeding**" is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions or proceedings seeking reorganization, arrangement, or other relief.

"**Insolvent**" means not Solvent.

**"Intellectual Property"** shall mean, all (a) trademarks, trademark rights, trade names, trade name rights, service marks, service mark rights, logos, trade dress, domain names, web sites, and all other indicia of origin or quality, and goodwill associated therewith and arising therefrom; (b) patents and patent rights; and (c) works of authorship and copyrights therein, and all common law rights in all of the foregoing, and registration and applications for all of the foregoing issued by or filed with the US Patent and Trademark Office, any State of the US, the US Copyright Office, or any foreign equivalent thereof, and all of the foregoing (a)-(c) used in, at, or in connection with and/or necessary for the (i) conduct of any Borrower's business and/or (ii) use and/or operation of the Collateral.

"**Inventory**" is all "inventory" as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made under the Code, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of any Person's custody or possession or in transit and including any returned goods and any documents of title representing any of the above.

"**Investment**" is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any loan, advance or capital contribution to any Person.

"**Key Person**" is JAMES A. VILLA

"**Lien**" is a mortgage, deed of trust, levy, charge, pledge, security interest, or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.

"**Loan Documents**" are, collectively, this Agreement, each Subordinated Secured Promissory Note, each Disbursement Instruction Form, any subordination agreements, any note, or notes or guaranties executed by Borrower or any other Person, and any other present or future document, certificate, form or agreement entered into by Borrower or any other Person for the benefit of the Lenders and Collateral Agent in connection with this Agreement; all as amended, restated, or otherwise modified or supplemented from time to time.

"**Material Adverse Change**" is (a) a material adverse change in the business, operations or condition (financial or otherwise) of Parent, or Parent and each Subsidiary, taken as a whole; (b) a material impairment of the prospect of repayment of any portion of the Obligations, or (c) a material adverse effect on the Collateral.

"**Material Agreement**" is any license, agreement or other similar contractual arrangement with a Person or Governmental Authority whereby Borrower or any of its Subsidiaries is reasonably likely to be required to transfer, either in-kind or in cash, prior to the Maturity Date, assets or property valued (book or market) at more than Fifty Thousand Dollars ($50,000.00) in the aggregate or any license, agreement or other similar contractual arrangement conveying rights in or to any material Intellectual Property.

"**Maturity Date**" is 24 weeks from the Effective Date.

**"Maximum Legal Rate"** shall mean the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the indebtedness evidenced by the Note and as provided for herein or the other Loan Documents, under the laws of such state or states whose laws are held by any court of competent jurisdiction to govern the interest rate provisions of the Term Loan.

"**Obligations**" are all of Borrower's obligations to pay when due any debts, principal, interest, the Prepayment Fee, the Final Fee, and other amounts Borrower owes the Lenders now or later, in connection with, related to, following, or arising from, out of or under, this Agreement or, the other Loan Documents, or otherwise, and including interest accruing after Insolvency Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of Borrower assigned to the Lenders and/or Collateral Agent, and the performance of Borrower's duties under the Loan Documents.

"**Operating Documents**" are, for any Person, such Person's formation documents, as certified by the Secretary of State (or equivalent agency) of such Person's jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.

"**Perfection Certificate**" is that certain form attached hereto as <u>Exhibit B-1</u>.

"**Permitted Indebtedness**" is: (a) Borrower's Indebtedness to the Lenders and Collateral Agent under this Agreement and the other Loan Documents; (b) Indebtedness existing on the Effective Date and disclosed on the Perfection Certificate(s); (c) unsecured Indebtedness to trade creditors and Indebtedness in connection with credit cards incurred in the ordinary course of business; (d) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (c) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose materially more burdensome terms upon Borrower, or its Subsidiary, as the case may be;

"**Permitted Investments**" are: (a) investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business; (b) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph (b) shall not apply to Investments of Borrower in any Subsidiary.

"**Permitted Licenses**" are licenses of over-the-counter software that is commercially available to the public.

"**Permitted Liens**" are Liens existing on the Effective Date and disclosed on the Perfection Certificates or arising under this Agreement and the other Loan Documents;

"**Person**" is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.

"**Property**" means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.

"**Pro Rata Share**" is, as of any date of determination, with respect to each Lender, a percentage (expressed as a decimal, rounded to the ninth decimal place) determined by dividing the outstanding principal amount of the Term Loan held by such Lender by the aggregate outstanding principal amount of the Term Loan.

"**Related Persons**" means, with respect to any Person, each Affiliate of such Person and each director, officer, employee, agent, trustee, representative, attorney, accountant and each insurance, environmental, legal, financial and other advisor and other consultants and agents of or to such Person or any of its Affiliates.

"**Required Lenders**" means (i) for so long as the Lead Lender has not assigned or transferred any of its interests in the Term Loan, Lenders holding one hundred percent (100%) of the aggregate outstanding principal balance of the Term Loan, or (ii) at any time from and after the Lead Lender has assigned or transferred any interest in its Term Loan, Lenders holding at least fifty one percent (51%) of the aggregate outstanding principal balance of the Term Loan.

"**Responsible Officer**" is any of the President, Chief Executive Officer, or Chief Financial Officer of Borrower or Parent.

**"Senior Indebtedness"** is that Permitted Indebtedness existing on the Effective Date and disclosed on the Perfection Certificate(s).

"**Shares**" means one hundred percent (100.0%) of the stock, units or other evidence of equity ownership held by Borrower or its Subsidiaries of any Subsidiary which is organized under the laws of the United States.

"**Solvent**" is, with respect to any Person: the fair salable value of such Person's consolidated assets (including goodwill minus disposition costs) exceeds the fair value of such Person's liabilities; such Person is not left with unreasonably small capital after the transactions in this Agreement; and such Person is able to pay its debts (including trade debts) as they mature in the ordinary course (without taking into account any forbearance and extensions related thereto).

"**Subordinated Debt**" is indebtedness incurred by Borrower or any of its Subsidiaries subordinated to all Indebtedness of Borrower and/or its Subsidiaries to the Lenders (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Collateral Agent and the Lenders entered into between Collateral Agent, Borrower, and/or any of its Subsidiaries, and the other creditor), on terms acceptable to Collateral Agent and the Lenders.

"**Subordinated Secured Promissory Note**" is defined in Section 2.5.

"**Subsidiary**" is, with respect to any Person, any Person of which more than fifty percent (50%) of the voting stock or other equity interests (in the case of Persons other than corporations) is owned or controlled, directly or indirectly, by such Person or through one or more intermediaries. Unless otherwise specified, references herein to a Subsidiary means a Subsidiary of Borrower.

"**Term Loan**" is defined in Section 2.2(a) hereof.

"**Term Loan Amortization Schedule**" means the amortization schedule set forth in Exhibit B-4 of this Agreement.

***[Balance of Page Intentionally Left Blank]***

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by one of its officers thereunto duly authorized on the date hereof.

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| | |
|:---|:---|
| **BORROWER:**<br> **INFINITE GROUP, INC.** | **BORROWER:**<br>|
| /s/James A. Villa |  |
| By: JAMES A. VILLA | By:  |
| Its:  | Its: |
| **BORROWER:** | **BORROWER:** |
| By:  | By:  |
| Its:  | Its: |
| **LEAD LENDER:**<br> <u>Agile Lending, LLC</u> | **COLLATERAL AGENT:** <br> <u>Agile Capital Funding, LLC</u> |
| /s/Aaron Greenblott | /s/Aaron Greenblott  |
| By: Aaron Greenblott | By: Aaron Greenblott |
| Its: Member | Its: Member |

---

EXHIBITS TO FOLLOW

**APPENDIX 1**

**BORROWER LIST**

**EXHIBIT A**

**<u>DESCRIPTION OF COLLATERAL</u>**

The Collateral consists of all of Borrower's right, title and interest in and to the following property:

All of Borrower's goods, Accounts, Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (including Intellectual Property), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts and other Collateral Accounts, all certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and

All of Borrower's books and records relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.

Notwithstanding the foregoing, the Collateral does not include (i) any license or contract, in each case if the granting of a Lien in such license or contract is prohibited by or would constitute a default under the agreement governing such license or contract (but (A) only to the extent such prohibition is enforceable under applicable law and (B) other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-408 or 9-409 (or any other Section) of Division 9 of the Code); provided that upon the termination, lapsing or expiration of any such prohibition, such license or contract, as applicable, shall automatically be subject to the security interest granted in favor of Collateral Agent hereunder and become part of the "Collateral."

**EXHIBIT A**

**<u>DESCRIPTION OF COLLATERAL</u>**

**EXHIBIT B-1**

**<u>PERFECTION CERTIFICATE</u>**

The undersigned, the President of INFINITE GROUP, INC., A Domestic Delaware Corporation, (the "<u>Company</u>"), hereby certifies, with reference to (i) the Business Loan and Security Agreement, dated as of March 08, 2024 (the "<u>Loan Agreement</u>"), among <u>Agile Capital Funding, LLC</u> as collateral agent (in such capacity, together with its successors and assigns in such capacity, "**Collateral Agent**"), and <u>Agile Lending, LLC</u>, a Virginia limited liability company ("**Lead Lender**") and each assignee that becomes a party to this Agreement pursuant to Section 12.1 (each individually with the Lead Lender, a "**Lender**" and collectively with the Lead Lender, the "**Lenders**"), and INFINITE GROUP, INC., A Domestic Delaware Corporation(**"Parent")** and its subsidiaries, INFINITE GROUP, INC., A Domestic Delaware Corporation, Parent, and the other entities shown as signatories hereto or that are joined from time to time as a Borrower, individually and collectively, jointly and severally, "**Borrower**") to the Lender as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>Name, Tax ID, and State of Formation</u>**. The exact legal name of the Borrower as that name appears on its Certificate of Organization, as amended, is as follows:

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| | | |
|:---|:---|:---|
| Name | Tax ID | State of Formation |
| INFINITE GROUP, INC. | **XX-XXXXXX** | **Delaware** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>Other Identifying Factors</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The following is the mailing address of the Borrower:

**175 SULLY'S TRAIL** 

**SUITE 202**

**PITTSFORD NY 14534**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The following are any DBAs of the Borrower:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>Other Current Locations</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The following are all other locations in the in which the Borrower maintains any books or records relating to any of the Collateral consisting of accounts, instruments, chattel paper, general intangibles or mobile goods:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The following are all other places of business of the Company in the United States of America:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The following are all other locations where any of the Collateral consisting of inventory or equipment is located:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The following are the names and addresses of all persons or entities other than the Company, such as lessees, consignees, warehousemen or purchasers of chattel paper, which have possession or are intended to have possession of any of the Collateral consisting of instruments, chattel paper, inventory or equipment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. <u>Prior Locations</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Set forth below is the information required by §4(a) or (b) with respect to each location or place of business previously maintained by the Company at any time during the past five years in a state in which the Company has previously maintained a location or place of business at any time during the past four months:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Set forth below is the information required by §4(c) or (d) with respect to each other location at which, or other person or entity with which, any of the Collateral consisting of inventory or equipment has been previously held at any time during the past twelve months:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. <u>Fixtures</u>.** Set forth below is the information required by UCC §9-502(b) or former UCC §9-402(5) of each state in which any of the Collateral consisting of fixtures are or are to be located and the name and address of each real estate recording office where a mortgage on the real estate on which such fixtures are or are to be located would be recorded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. <u>Intellectual Property</u>.**

Set forth below is a complete list of all United States and foreign patents, copyrights, trademarks, trade names and service marks registered or for which applications are pending in the name of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. <u>Securities; Instruments</u>**. Set forth below is a complete list of all stocks, bonds, debentures, notes and other securities and investment property owned by the Company *(provide name of issuer, a description of security and value)*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8. <u>Motor Vehicles</u>**. The following is a complete list of all motor vehicles owned by the Borrower *(describe each vehicle by make, model and year and indicate for each the state in which registered and the state in which based)*:

<u> Vehicle</u> <u> State of Registration</u> <u> State in Which Based</u>

Truck Plate VIN Make

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **<u>Permitted Indebtedness.</u>**

---

| | | |
|:---|:---|:---|
| **Lender** | **Balance** | **Total Payment (indicate daily,** <br> **weekly, or monthly)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10. <u>Permitted Liens:</u>**

Liens in connection with Permitted Indebtedness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11. <u>Bank Accounts</u>**. The following is a complete list of all bank accounts (including securities and commodities accounts) maintained by the Borrower (*provide name and address of depository bank, type of account and account number*):

---

| | | |
|:---|:---|:---|
| **Bank Account** | **Account Number** | **Account Routing** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12. <u>Unusual Transactions</u>**. All of the Collateral has been originated by the Borrower in the ordinary course of the Borrower's business or consists of goods which have been acquired by the Borrower in the ordinary course from a person in the business of selling goods of that kind.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13. Litigation** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The following is a complete list of pending and threatened litigation or claims involving amounts claimed against the Borrower in an indefinite amount or in excess of $500,000 in each case:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The following are the only claims which the Borrower has against others (other than claims on accounts receivable), which the Borrower is asserting or intends to assert, and in which the potential recovery exceeds $500,000:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14. <u>Insurance Broker.</u>** The following broker handles the Borrower's property insurance**:** 

---

| | | | |
|:---|:---|:---|:---|
| **Broker** | **Contact** | **Telephone** | **Email** |

---

The Borrower agrees to advise you of any change or modification to any of the foregoing information or any supplemental information provided on any continuation pages attached hereto, and, until such notice is received by you, you shall be entitled to rely upon such information and presume it is correct. The Borrower acknowledges that your acceptance of this Perfection Certificate and any continuation pages does not imply any commitment on your part to enter into a loan transaction with the Borrower, and that any such commitment may only be made by an express written loan commitment, signed by one of your authorized officers.

Date: March 08, 2024 [_________________________________]

---

| |
|:---|
| By: |
| Name: |
| Its: |
| Email: |

---

**EXHIBIT B-2**

**<u>DISBURSEMENT INSTRUCTION FORM</u>**

The proceeds of the first advance of Term Loan shall be disbursed as follows:

---

| | |
|:---|:---|
| Term Loan | $185500.00 |
| Less: |  |
| Administrative Agent Fee to be remitted to <u>Agile Capital Funding, LLC</u> | $(10500.00) |
| TOTAL TERM LOAN NET PROCEEDS TO BORROWER | $175000.00 |

---

The aggregate net proceeds of the Term Loan shall be transferred to the Designated Deposit Account as follows:

BORROWER: INFINITE GROUP, INC.

Account Name: <u>_____________________________________</u>

Bank Name: ______________________________________

ABA Number: ______________________________________

Account Number: ______________________________________

The proceeds of the subsequent advances of the Term Loan shall be disbursed as follows:

**EXHIBIT B-3**

**<u>DRAWDOWN SCHEDULE</u>**

**<u>Within 2 Business Days of Closing Date.</u>**

**EXHIBIT B-4**

**<u>REPAYMENT AND AMORTIZATION SCHEDULE</u>**

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| | |
|:---|:---|
| Projected Payment Schedule | Weekly Payment |
| 3/18/2024 | $11284.58 |
| 3/25/2024 | $11284.58 |
| 4/1/2024 | $11284.58 |
| 4/8/2024 | $11284.58 |
| 4/15/2024 | $11284.58 |
| 4/22/2024 | $11284.58 |
| 4/29/2024 | $11284.58 |
| 5/6/2024 | $11284.58 |
| 5/13/2024 | $11284.58 |
| 5/20/2024 | $11284.58 |
| 5/27/2024 | $11284.58 |
| 6/3/2024 | $11284.58 |
| 6/10/2024 | $11284.58 |
| 6/17/2024 | $11284.58 |
| 6/24/2024 | $11284.58 |
| 7/1/2024 | $11284.58 |
| 7/8/2024 | $11284.58 |
| 7/15/2024 | $11284.58 |
| 7/22/2024 | $11284.58 |
| 7/29/2024 | $11284.58 |
| 8/5/2024 | $11284.58 |
| 8/12/2024 | $11284.58 |
| 8/19/2024 | $11284.58 |
| 8/26/2024 | $11284.66 |
| Total | $270830.00 |

---

**EXHIBIT B-5**

**Business Loan and Security Agreement Supplement**

---

| | |
|:---|:---|
| **Principal Amount of Loan:** | **$185,500.00, including the Administrative Agent Fee,** available as set forth in the Drawdown Schedule found in Exhibit B-3 of this Agreement.  |
| **Total Repayment Amount:**  | The total repayment amount of the Term Loan, including all interest, lender fees, and third-party fees, assuming all payments are made on time is **$270,830.00.** |
| **Payment Schedule:** | As set forth in the Repayment and Amortization Schedule found in Exhibit B-4 of the Agreement. |
| **Payment Multiplier:** (The per dollar cost of the loan inclusive of all interest and fees). | **1.46** |
| **Interest Charge:** | **$85,330.00,** assuming all payments are made on time.  |
| **Fees payable to Collateral Agent and its designees:** | **Administrative Agent Fee: $10,500.00,** payable at closing out of proceeds of the Term Loan |

---

**EXHIBIT B-6**

AUTHORIZATION AGREEMENT

FOR AUTOMATED CLEARING HOUSE TRANSACTIONS

Borrower hereby authorizes Lender and / or Servicer (or its representatives) to present automated clearing house (ACH) debits to the following checking account in the amount of fees and other obligations due to Lender from Borrower under the terms of the Business Loan and Security Agreement and Subordinated Secured Promissory Note entered into between Lender and Borrower, as it may be amended, supplemented or replaced from time to time. In addition, if an Event of Default (as defined in the Business Loan and Security Agreement or Secured Promissory Note) occurs, Borrower authorizes Lender and / or Servicer (or its representatives) to debit any and all accounts controlled by Borrower or controlled by any entity with the same Federal Tax Identification Number as Borrower up to the total amount, including but not limited to, all fees and charges, due to Lender from Borrower under the terms of the Agreement.

Transfer Funds To/From: __________________________________________________

Account Name: _________________________________________________________

Bank Name: ____________________________________________________________

ABA Number: __________________________________________________________

Account Number: _______________________________________________________

This authorization is to remain in full force and effect until all obligations due to Borrower under the Agreement have been fulfilled.

Borrower Information:____________________________________________________

Borrower's Name: _______________________________________________________

Signature of Authorized Representative: ______________________________________

Print Name: _____________________________________________________________

Title: ________________________________ _________________________________

Borrower's Tax ID: _______________________________________________________

Date: _________________________________________________________________

**EXHIBIT D**

**<u>SUBORDINATED SECURED PROMISSORY NOTE</u>**

**SUBORDINATED SECURED PROMISSORY NOTE**

---

| | |
|:---|:---|
| $**185500.00** | Dated: March 08, 2024  |

---

FOR VALUE RECEIVED, the undersigned, INFINITE GROUP, INC., A Domestic Delaware Corporation (**"Parent"),** and its subsidiaries, INFINITE GROUP, INC., A Domestic Delaware Corporation, Parent, and the other entities shown as signatories hereto or that are joined from time to time as a Borrower, individually and collectively, jointly and severally, "**Borrower**"), HEREBY JOINTLY AND SEVERALLY PROMISE TO PAY to the order of <u>Agile Lending, LLC</u>, or its designees or assigns ("**Lead Lender**") the principal amount of ONE HUNDRED EIGHTY FIVE THOUSAND FIVE HUNDRED DOLLARS ($185,500.00) or such lesser amount as shall equal the outstanding principal balance of the Term Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of such Term Loan, at the rates and in accordance with the terms of the Business Loan and Security Agreement dated March 08, 2024, by and among Borrower, Lender, Collateral Agent, and the other Lenders from time to time party thereto (as amended, restated, supplemented or otherwise modified from time to time, the "**Loan Agreement**"). If not sooner paid, the entire principal amount and all accrued and unpaid interest hereunder shall be due and payable on the Maturity Date as set forth in the Loan Agreement. Any capitalized term not otherwise defined herein shall have the meaning attributed to such term in the Loan Agreement.

Principal, interest and all other amounts due with respect to the Term Loan, are payable in lawful money of the United States of America to Lender as set forth in the Loan Agreement and this Subordinated Secured Promissory Note (this "**Note**").

The Loan Agreement, among other things, (a) provides for the making of a secured Term Loan by Lender to Borrower, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events.

This Note may not be prepaid except as set forth in Section 2.2 (c) and Section 2.2(d) of the Loan Agreement.

This Note and the obligation of Borrower to repay the unpaid principal amount of the Term Loan, interest on the Term Loan and all other amounts due Lender under the Loan Agreement is secured as provided under the Loan Agreement.

Presentment for payment, demand, notice of protest and all other demands and notices of any kind in connection with the execution, delivery, performance and enforcement of this Note are hereby waived.

Borrower shall pay all reasonable fees and expenses, including, without limitation, reasonable attorneys' fees and costs, incurred by Lender in the enforcement or attempt to enforce any of Borrower's obligations hereunder not performed when due.

All claims of the holder of this Note to principal, interest and any other amounts at any time owed under this Note (collectively, "**Junior Indebtedness**") is hereby expressly subordinated in right of payment, as herein set forth, to the prior payment in full of all Senior Indebtedness.

This Note shall be governed by, and construed and interpreted in accordance with, the internal laws of the Commonwealth of Virginia.

The ownership of an interest in this Note shall be registered on a record of ownership maintained by Lender or its agent. Notwithstanding anything else in this Note to the contrary, the right to the principal of, and stated interest on, this Note may be transferred only if the transfer is registered on such record of ownership and the transferee is identified as the owner of an interest in the obligation. Borrower shall be entitled to treat the registered holder of this Note (as recorded on such record of ownership) as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in this Note on the part of any other person or entity.

**BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTELLIGENTLY WAIVES ANY AND ALL RIGHTS THAT EACH PARTY TO THIS NOTE MAY NOW OR HEREAFTER HAVE UNDER THE LAWS OF THE UNITED STATES OF AMERICA OR THE COMMONWEALTH OF VIRGINIA, TO A TRIAL BY JURY OF ANY AND ALL ISSUES ARISING DIRECTLY OR INDIRECTLY IN ANY ACTION OR PROCEEDING RELATING TO THIS NOTE, THE LOAN DOCUMENTS OR ANY TRANSACTIONS CONTEMPLATED THEREBY OR RELATED THERETO. IT IS INTENDED THAT THIS WAIVER SHALL APPLY TO ANY AND ALL DEFENSES, RIGHTS, CLAIMS AND/OR COUNTERCLAIMS IN ANY SUCH ACTION OR PROCEEDING.**

***[Signature Page to Follow}***

IN WITNESS WHEREOF, Borrower caused this Note to be duly executed under seal by one of its officers thereunto duly authorized on the date hereof.

---

| | |
|:---|:---|
| **BORROWER:** | **BORROWER:** |
| <u> </u>[SEAL] | <u> </u>[SEAL] |
| By: JAMES A. VILLA | By: |
| Date: | Date: |

---

STATE:

COUNTY OF:

I hereby certify that on<u> </u>, before me, the undersigned, Notary Public in and for the State of<u> </u>, at large, personally appeared <u>JAMES A. VILLA,</u> individually and as the <u>CEO of</u> INFINITE GROUP, INC., A Domestic Delaware Corporation(**"Parent")** and its subsidiaries, <u>INFINITE GROUP, INC., A Domestic Delaware Corporation known</u> to me or satisfactorily proven to be the person whose name is subscribed to the foregoing instrument and acknowledged that he executed the foregoing on behalf of himself individually, INFINITE GROUP, INC., A Domestic Delaware Corporation<u> </u>(**"Parent")** and its subsidiaries, <u>INFINITE GROUP, INC., A Domestic Delaware Corporation</u> for the purposes set forth therein.

(Seal)

Notary Public______________________

My Commission Expires: Registration Number:

## Exhibit 10.6

**EXHIBIT 10.6**

**AMENDED AND RESTATED**

**LOAN AND SECURITY AGREEMENT**

**THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT** (the **"Agreement"**) is dated as of August 16, 2024, by and between **INFINITE GROUP, INC.**, a Delaware corporation (the **"Borrower"**), and **HARRY HOYEN**, an individual resident of Marblehead, Ohio whose address is 125 Cove Ct. Drive, Marblehead, Ohio 43440 (together with his successors or assigns, the **"Lender"**) amends, restates and supersedes in its entirety that certain prior Loan and Security Agreement between the parties hereto, dated August 5, 2024 ("**Prior Agreement**") and is being entered into to correct certain inadvertently incorrect references in the Prior Agreement. Terms contained in this Agreement shall, unless otherwise defined herein or unless the context otherwise indicates, have the meanings, if any, assigned to them by the UCC (as hereinafter defined).

**RECITALS:**

**WHEREAS**, Borrower has requested that Lender extend to Borrower a secured term loan in the aggregate amount of Two Million Dollars ($2,000,000) subject to the terms, conditions and limitations provided herein (the "**Loan**"); and

**WHEREAS**, Lender has agreed to extend the Loan to Borrower upon the terms and conditions set forth in this Agreement and the other Loan Documents (as defined in Section 1.1 below) as hereinafter set forth.

**NOW, THEREFORE,** Borrower and Lender hereby agree as follows:

**ARTICLE 1** 

**DEFINITIONS, ACCOUNTING TERMS, GENERAL PROVISIONS**

**Section 1.1. <u>Defined Terms</u>.** As used in this Agreement, the following terms have the following meanings (terms defined in the singular to have the same meaning when used in the plural and vice versa):

**"Accounts"** has the meaning set forth in the UCC, and includes, without limitation, all accounts, contract rights, chattel paper, instruments, deposit accounts, general intangibles, and other obligations of any kind, now or hereafter existing, whether or not arising out of or in connection with the sale or lease of goods or the rendering of services, and all rights now or hereafter existing in and to all security agreements, leases, and other contracts securing or otherwise relating to any such accounts, contract rights, chattel paper, instruments, deposit accounts, general intangibles, and obligations.

**"Acquisition"** means any acquisition (whether in a single transaction or series of related transactions) of (i) any going business, or all or substantially all of the assets of any Person, whether through purchase, merger or otherwise; or (ii) Equity Interests of any Person of five percent (5%) or more of the Equity Interests or voting power in such Person.

**"Affiliate"** when used with respect to a specified Person, means a Person (i) who directly or indirectly controls, is controlled by, or is under common control with such Person, (ii) who is a director, officer, manager, partner, member, shareholder, employee, or employer of such Person, or (iii) who is a member of the immediate family of such Person. Lender, who is the brother of the President of the Borrower, is an Affiliate of Borrower.

**"Agreement"** means this Agreement, together with all amendments and supplements hereto.

**"Business Day"** means each day, except for Saturdays, Sundays or holidays for which Lender is authorized or required to close and which Lender has designated as its holiday. Unless otherwise provided, "day" as used herein shall mean a calendar day.

**"Change in Control"** means (i) a sale of all or substantially all of the assets of Borrower; (ii) a merger, reorganization or consolidation in which Borrower is not the surviving entity, (iii) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof), other than the current shareholders of Borrower, of Equity Interests representing more than 50% of the ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower (determined on a fully diluted basis) and which results in Andrew Hoyen and James Villa ceasing to be officers of the Borrower, or (iv) Persons other than members of the board of directors as of the date hereof shall collectively have the right, by ownership of stock or other equity interests, contract or otherwise, the right to appoint a majority of the board of directors or similar governing body of Borrower.

**"Collateral"** means right, title and interest of Borrower in (a) all of its assets whether now or hereafter acquired, including without limitation all of its equipment, fixtures, inventory, accounts, general intangibles, goods, investment property, deposit accounts, documents, letters-of-credit rights, chattel paper and corresponding the proceeds as more fully described on <u>Exhibit D</u>.

**"Debt"** means (a) indebtedness or liability for borrowed money; (b) obligations evidenced by bonds, debentures, notes, or other similar instruments; (c) obligations for the deferred purchase price of property or services (including trade obligations); (d) obligations as lessee under capital leases; (e) obligations under letters of credit; (f) obligations under acceptance facilities; and (g) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations to purchase, to provide funds for payment, to supply funds to invest in any Person or entity, or otherwise to assure a creditor against loss; (h) obligations secured by any Liens, whether or not the obligations have been assumed; and (i) the amount of any other obligation (including obligations under financing leases) which would be shown as a liability on a balance sheet prepared in accordance with GAAP.

**"Default"** means any of the events specified in Section 6.1, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied.

**"Default Rate"** means the interest rate that is the lesser of (i) 15.00% per annum and (ii) the Highest Lawful Rate.

**"Distribution"** means any dividend or other distribution to the shareholders, members, or Affiliates of Borrower or the applicable other Person, or the purchase, redemption, retirement or other acquisition for value of any ownership interests in Borrower or the applicable other Person now or hereafter outstanding, or the return of any capital to Borrower's or the applicable other Person's members, shareholders or partners, as applicable, or the distribution of any assets of Borrower or the applicable other Person to its members, shareholders or partners, as applicable.

**"Event of Default"** means any of the events specified in Section 6.1, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied.

**"GAAP"** means generally accepted accounting principles in the United States.

**"Governing Documents"** of any Person means the declaration of trust, certificate or articles of incorporation, by-laws, partnership agreement or operating or members agreement, as the case may be, and any other organizational or governing documents, of such Person.

**"Governmental Authority"** means any nation or government, any state or other political subdivision thereof, and any Person exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to such government.

**"Highest Lawful Rate"** means, as to Lender, at the particular time in question, the maximum non-usurious rate of interest which, under applicable law, Lender is then permitted to contract for, charge or collect from Borrower on the Loan or the other obligations of Borrower hereunder. If the maximum rate of interest which, under applicable law, Lender is permitted to contract for, charge or collect from Borrower on the Loan or the other obligations of Borrower hereunder shall change after the date hereof, the Highest Lawful Rate shall be automatically increased or decreased, as the case may be, as of the effective time of such change without notice to Borrower.

**"Issuance Date"** has the meaning set forth in Section 2.1.

**"Lien"** means any mortgage, deed of trust, pledge, security interest, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or preference, priority, or other security agreement or preferential arrangement, charge, or encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the UCC or comparable law of any jurisdiction to evidence any of the foregoing).

**"Loan"** has the meaning set forth in the recitals to this Agreement.

**"Loan Documents"** means this Agreement and the Notes, together with any and all other documents evidencing, securing, or otherwise relating to the Loan, together with all amendments and supplements thereto, including without limitation any mortgage or deed of trust, security agreement, deposit control agreement or financing statement.

**"Loan Obligations"** means the aggregate sum of all obligations owed by Borrower under the Loan Documents.

**"Material Adverse Effect"** means a material adverse effect on the business, assets, liabilities, financial condition, property or results of operations of Borrower, or a material adverse effect on the ability of Borrower to satisfy the Loan Obligations.

"**Material Debt**" means any debt for borrowed money and capital leases, if any.

**"Maturity Date"** has the meaning ascribed to it in Section 2.1(b)(i).

**"Note"** means each Promissory Note issuable hereunder and payable by Borrower to the order of Lender, the form of which is attached hereto as <u>Exhibit A</u>, together with all amendments, restatements and supplements thereto and which together with one another may be collectively referred to hereinafter as the "**Note**" or the "**Notes**" as the context requires).

**"Permits"** means all licenses, permits, and certificates used or necessary in connection with the construction, ownership, operation, use, or occupancy of Borrower's business, including, without limitation, business licenses, state health department licenses, food service licenses, licenses to conduct business, certificates of need, and all such other permits, licenses, and rights, obtained from any governmental, quasi-governmental, or private person or entity whatsoever concerning ownership, operation, use, or occupancy.

**"Permitted Liens"** means those specific Liens delineated in Section 5.1.

**"Person"** means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority, or other entity of whatever nature.

"**Related Parties**" means, with respect to any Person, such Person's Affiliates and the partners, shareholders, directors, officers, employees, agents, counsel, other advisors and representatives of such Person and of such Person's Affiliates. Lender, who is an Affiliate of the President of Borrower, is a Related Party.

**"Requirements of Law"** means (a) the Governing Documents of an entity, and (b) any law, regulation, ordinance, code, decree, treaty, ruling or determination of an arbitrator, court or other Governmental Authority, or any Executive Order issued by the President of the United States, in each case applicable to or binding upon such Person or to which such Person, any of its property or the conduct of its business is subject including, without limitation, laws, ordinances and regulations pertaining to the zoning, occupancy and subdivision of real property.

"**SEC Filings**" means reports and filings required to be made with the U.S. Securities and Exchange under the Securities Act of 1933, as amended, and the Exchange Act of 1934, as amended.

**"UCC"** means that Uniform Commercial Code as in effect from time to time in the State of Delaware.

In addition to the foregoing, all accounting terms not specifically defined herein shall be construed in accordance with GAAP consistent with those applied in the preparation of the financial statements referred to in Section 3.4 and Section 3.12, and all financial data submitted pursuant to this Agreement shall be prepared in accordance with such principles.

**ARTICLE 2**

**THE LOAN**

**Section 2.1. <u>General Terms of Loan</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower desires to borrow from the Lender and Lender has agreed to make the Loan available to Borrower in two separate tranches equal in the aggregate of up to Two Million Dollars ($2,000,000), subject to the terms, conditions, covenants, and provisions of this Agreement, the corresponding Notes and the other Loan Documents, if any. Borrower has made the covenants, representations, and warranties set forth herein and therein as a material inducement to Lender to make the Loan. Each tranche of the Loan shall be evidenced by a separate Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Loan may be made in two separate tranches as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) commencing on the date hereof, Borrower may Borrow up to One Million Two Hundred Thousand Dollars ($1,200,000) from Lender to be evidenced by a Note in the principal amount of One Million Two Hundred Thousand Dollars ($1,200,000), having a term ending on the date (the "**Maturity Date**") that is four (4) years from the date thereof (the "**Issuance Date**"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) commencing on September 1, 2024, Borrower may borrow up to an additional Eight Hundred Thousand Dollars ($800,000) from Lender to be evidenced by a Note in the principal amount of Eight Hundred Thousand Dollars ($800,000), having a Maturity Date that is four (4) years from the Issuance Date thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Loan is non-revolving in nature and, once borrowed and repaid, may not be reborrowed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Loan may be prepaid by Borrower in whole or in part at any time without fee or penalty.

**Section 2.2. <u>Disbursement of the Loan</u>**. Each tranche of the Loan shall be fully advanced by Lender within five (5) Business Bays of a written request by Borrower therefor.

**Section 2.3. <u>The Promissory Note(s)</u>.** Borrower's obligation to repay the Loan shall be evidenced by this Agreement, the Notes, and the other Loan Documents, if any.

**Section 2.4. <u>Principal Payments; Amortization</u>.** 

Principal amounts outstanding under the Loan shall be paid and amortized in accordance with the Loan Amortization and Payment Schedule set forth under <u>Exhibit B</u> hereto (the "**Amortization Schedule**"). Borrower hereby unconditionally promises to pay to Lender, commencing on the Issuance Date of each Note and on the last day of each calendar month thereafter, a monthly payment in the amount set forth on the Amortization Schedule. On the Maturity Date, any and all then-unpaid principal amount of the Loan shall be due and paid.

**Section 2.5. <u>Interest Payments; Rate</u>.** The Loan shall bear simple interest at a rate equal to 8.00% per annum, in accordance with the Amortization Schedule. In no event shall the applicable rate of interest be greater than the Highest Lawful Rate. Accrued interest on the Loan shall be payable in arrears on the last Business Day of each calendar month and on the Termination Date in accordance with the Amortization Schedule. Interest shall be calculated based on the actual number of days elapsed over a 360-day year.

**Section 2.6. <u>Default Interest; Rate</u>**. Notwithstanding the foregoing, upon the occurrence and continuation of an Event of Default, the Loan and any other amounts outstanding, shall, as of the date of such Event of Default, bear interest, after as well as before judgment, at the Default Rate until such Event of Default is cured in accordance with Section 6.1.

**Section 2.7. <u>Prepayment</u>.** Borrower may prepay the Loan in whole or in part at any time during the term hereof, without prepayment premium or penalty.

**Section 2.8. <u>Payments in U.S. Dollars</u>**. All sums payable to Lender hereunder shall be paid directly to Lender in United States Dollars and immediately available funds to the account designated by Lender in writing upon execution hereof.

**Section 2.9. <u>Conditions Precedent to Loan</u>.** The obligation of Lender to disburse the proceeds of the Loan is subject to the condition precedent that Lender shall have received, in form and substance satisfactory to Lender, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Promissory Note</u>. Each Note duly executed and delivered by Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Loan Documents</u>. All other Loan Documents have been executed and delivered to Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Evidence of Corporate Action by Borrower</u>. Certified (as of the date of this Agreement) copies (i) the true and correct articles of incorporation and by-laws of Borrower, (ii) incumbency of officers executing any Loan Document with specimen signatures, (iii) of existence and good standing certificates from the Secretary of State of Delaware, and (iv) of all action taken by Borrower, including resolutions of its directors, authorizing the execution, delivery, and performance of the Loan Documents to which it is a party and each other document to be delivered pursuant to this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Representations and Warranties</u>. The representations and warranties made by Borrower in the Loan Documents shall be true and correct on and as of the date of disbursement of the proceeds of each of the first and second tranches of the Loan in all materials respects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>No Default or Event of Default</u>. No Default or Event of Default shall have occurred and be continuing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Insurance</u>. Lender shall have received certificates of insurance coverage of Borrower in form and substance reasonably satisfactory to Lender evidencing that Borrower is carrying usual and customary insurance subject to normal deductibles for similar companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>No Material Adverse Change</u>. There shall have been no event having a Material Adverse Effect since December 31, 2023;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Other Instruments and Documents</u>. Receipt by Lender of such additional certificates, proceedings, instruments and other documents as Lender or its counsel may reasonably request to evidence (i) compliance by Borrower with all Requirements of Law, (ii) the truth and accuracy, as of the date of this Agreement, of the representations and warranties of Borrower contained herein, and (iii) the due performance or satisfaction by Borrower, at or prior to the date hereof, of all agreements required to be performed and all conditions required to be satisfied by Borrower pursuant hereto; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Reduction of Existing Debt</u>. In addition to the foregoing, it shall be a condition to Lender's extension of the second tranche of Eight Hundred Thousand Dollars ($800,000) provided for under Section 2.1(b)(ii) above that on or prior to such extension, Borrower shall have reduced its Debt outstanding as of the date hereof.

**ARTICLE 3**

**<u>REPRESENTATIONS AND WARRANTIES</u>**

Borrower represents and warrants to Lender as follows:

**Section 3.1. <u>Existence, Good Standing, and Due Qualification</u>.** Borrower is duly organized as a corporation under the laws of Delaware. Borrower is not presently in good standing in the State of Delaware but intends to use a portion of the proceeds of the Loan to regain good standing in the State of Delaware. Subject to the foregoing, Borrower has the corporate power and authority to own its assets and to transact the business in which it is now engaged or proposed to be engaged in. Borrower is duly qualified as a foreign corporation and in good standing under the laws of each other jurisdiction in which the failure to so qualify would have a Material Adverse Effect. Borrower's exact legal name, type of organization, and state of organization are set forth in the preamble to this Agreement.

**Section 3.2. <u>Power and Authority</u>.** The execution, delivery, and performance by Borrower of the Loan Documents have been duly authorized by all necessary corporate action.

**Section 3.3. <u>Legally Enforceable Agreement</u>.** This Agreement is, and each of the other Loan Documents when delivered under this Agreement will be, legal, valid, and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, and other similar laws affecting creditors' rights generally or by general principles of equity.

**Section 3.4. <u>Financial Statements</u>.** No information, exhibit, or report furnished by Borrower to Lender in connection with the negotiation of this Agreement, including any financial statements, contained any material misstatement of fact or omitted to state a material fact or any fact necessary to make the statement contained therein not materially misleading.

**Section 3.5. <u>Labor Disputes and Acts of God</u>.** Neither the business nor the properties of Borrower are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy, or other casualty (whether or not covered by insurance) materially and adversely affecting such business or properties or the operation of Borrower.

**Section 3.6. <u>Other Agreements</u>.** Borrower is not a party to any indenture, loan, or credit agreement, or to any lease or other agreement or instrument, or subject to any charter restriction which could have a Material Adverse Effect. Borrower is not in default in any respect in the performance, observance, or fulfillment of any of the obligations, covenants, or conditions contained in any material agreement or instrument material to its business to which it is a party, which may, in any one case or in the aggregate, be reasonably likely to result in a Material Adverse Effect.

**Section 3.7. <u>Litigation</u>.** There is no pending or, to Borrower's knowledge, threatened action or proceeding against or affecting Borrower before any court, governmental agency, or arbitrator, which may, in any one case or in the aggregate, be reasonably likely to result in a Material Adverse Effect or the ability of Borrower to perform its, his or their obligation under the Loan Documents.

**Section 3.8. <u>No Defaults on Outstanding Judgments or Orders</u>.** Borrower has satisfied all judgments, and it is not in default with respect to any judgment, writ, injunction, decree, rule, or regulation of any court, arbitrator, or federal, state, municipal, or other governmental authority, commission, board, bureau, agency, or instrumentality, domestic or foreign, except that Borrower is in arrears with respect to its SEC Filings.

**Section 3.9. <u>Ownership and Liens</u>.** Borrower has defensible title to, or valid leasehold interests in, the Collateral and all of its other properties and assets, real and personal, including the properties and assets and leasehold interests reflected in the financial statements referred to in Section 3.4 (other than any properties or assets disposed of in the ordinary course of business), and none of the properties and assets owned by Borrower and none of its leasehold interests is subject to any Lien, except such as may be permitted pursuant to Section 5.1 of this Agreement.

**Section 3.10. <u>Operation of Business</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except for good standing in the State of Delaware, Borrower possesses all material licenses, permits, franchises, patents, copyrights, trademarks, and trade names, or rights thereto, to conduct its businesses substantially as now conducted and as presently proposed to be conducted, and Borrower is not in violation of any valid rights of others with respect to any of the foregoing. The current address of Borrower's chief executive office, and the address where the Records concerning Borrower's Accounts, Payment Intangibles and other intangible Collateral are kept, are accurately set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Borrower is the lawful owner of all Permits, which (i) are in full force and effect, (ii) constitute all of the permits, licenses, and certificates required for the use, operation, and occupancy thereof, (iii) have not been pledged as collateral for any other loan or Debt, (iv) are held free from any restriction or any encumbrance which would materially adversely affect Borrower's use thereof, and (v) are not provisional, probationary, or restricted in any way. Borrower is in compliance in all material respects with the applicable provisions of all laws, rules, regulations, and published interpretations to which it is subject, except for the requirements to make SEC Filings. No waivers of any laws, rules, regulations, or requirements are required for Borrower to operate.

**Section 3.11. <u>Taxes</u>.** Other than for certain franchise taxes owed to the State of Delaware [and payment of applicable 2023 federal, state and municipal income taxes for which Borrower is on extension], Borrower has filed all tax returns (federal, state, and local) required to be filed and has paid prior to delinquency all taxes, assessments, and governmental charges and levies thereon to be due, including interest and penalties.

**Section 3.12. <u>Debt</u>.** <u>Schedule 3.12</u> contains a true, correct and complete listing of all of Borrower's Debt outstanding as of the date hereof. Other than the Debt reflected on <u>Schedule 3.12</u>, Borrower has no outstanding Debt under any credit agreements, indentures, purchase agreements, guaranties, capital leases, or other instruments, agreements, and arrangements presently in effect providing for or relating to extensions of credit (including agreements and arrangements for the issuance of letters of credit or for acceptance financing) in respect of which Borrower is in any manner directly or contingently obligated.

**Section 3.13. <u>Trade Names</u>.** Borrower has not changed its name, been known by any other name, or been a party to a merger, reorganization or similar transaction within the last five (5) years.

**Section 3.14. <u>Accuracy of Representations, Warranties and Covenants</u>.** Borrower represents and warrants that all representations, warranties and covenants contained herein and in the other Loan Documents are true and correct as of the date hereof.

**Section 3.15. <u>Disclosure</u>.** All information furnished or to be furnished by Borrower to Lender in connection with the Loan or any of the Loan Documents is, or will be at the time the same is furnished, accurate and correct in all material respects and complete as far as completeness may be necessary to provide Lender with true and accurate knowledge of the subject matter.

**Section 3.16. <u>Loan Documents Reviewed; Enforceable</u>.** Borrower has reviewed all the Loan Documents which are required to be executed in connection with the closing of the Loan. This Agreement and the other Loan Documents have been duly executed and delivered by or on behalf of Borrower, and constitute the legal, valid and binding obligations of Borrower, enforceable against Borrower, in accordance with their respective terms, subject only to applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). The Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense by Borrower, including the defense of usury, nor would the operation of any of the terms of the Loan Documents, or the exercise of any right thereunder, render the Loan Documents unenforceable (subject to principles of equity and bankruptcy, insolvency and other laws generally affecting creditors' rights and the enforcement of Borrowers' obligations), and Borrower has not asserted nor will it assert any right of rescission, set-off, counterclaim or defense with respect thereto.

**Section 3.17. <u>Properties.</u>** Borrower has defensible title to, or valid leasehold interests in, all its respective real and personal property material to its business, except for minor defects in title that do not, in the aggregate, interfere with its ability to conduct its business as currently conducted. Borrower owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by Borrower and such Subsidiaries, as the case may be, does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

**ARTICLE 4**

**AFFIRMATIVE COVENANTS**

Borrower agrees with and covenants unto Lender that until the Loan Obligations have been indefeasibility paid in full in cash, Borrower shall (unless expressly waived in writing by Lender in Lender's sole and absolute discretion) to:

**Section 4.1. <u>Maintenance of Existence</u>.** Preserve and maintain its existence and regain good standing in Delaware, and qualify and remain qualified, as a foreign corporation in each jurisdiction in which the failure to so qualify may reasonably be expected to have a Material Adverse Effect.

**Section 4.2. <u>Maintenance of Records</u>.** Keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, reflecting all material financial transactions of Borrower.

**Section 4.3. <u>Maintenance of Properties</u>.** Except for production and the purchases and sales of properties in Borrower's ordinary course of business, maintain, keep, and preserve, all of its properties (tangible and intangible) necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and tear excepted. Borrower will keep the Collateral in good condition, and will not waste or destroy any of the same.

**Section 4.4. <u>Conduct of Business</u>.** Continue to: (a) engage in a business of the same general type as presently conducted by it, (b) operate in compliance with applicable laws and regulations relating thereto and cause all Permits, and any other agreements necessary for the use and operation of Borrower; and (c) keep all required Permits current and in full force and effect.

**Section 4.5. <u>Compliance With Laws</u>.** Comply in all material respects with all applicable laws, rules, regulations, and orders, such compliance to include, without limitation, paying before the same become delinquent all taxes, assessments, and governmental charges imposed upon it or upon its property. Borrower will not use the Collateral in violation of any statute or ordinance or any policy of insurance thereon.

**Section 4.6. <u>Payment of Loan/Performance of Loan Obligations</u>.** Duly and punctually pay or cause to be paid the principal and interest of Loan in accordance with its respective terms and duly and punctually pay and perform or cause to be paid or performed all Loan Obligations hereunder and under the other Loan Documents.

**Section 4.7. <u>Continuing Obligation</u>.** Notify Lender in writing if it becomes aware of any representation, warranty or covenant contained herein and in the Loan Documents becomes untrue in any material respect after the date hereof.

**ARTICLE 5**

**NEGATIVE COVENANTS**

Until the Loan Obligations have been indefeasibly paid in full in cash, Borrower shall not:

**Section 5.1. <u>Liens</u>.** Create, incur, assume, or suffer to exist, any Lien upon or with respect to any of its properties, now owned or hereafter acquired, except for the following Liens ("**Permitted Liens**"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any prior existing Lien granted by Borrower including, without limitation, the Liens listed on <u>Schedule 5.1(a)</u> hereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Liens for taxes or assessments or other government charges or levies if not yet due and payable or, if due and payable, if they are being contested in good faith by appropriate proceedings and for which appropriate reserves are maintained;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Liens imposed by law, such as mechanics', materialmen's, landlords', warehousemen's, and carriers' Liens, and other similar Liens, securing obligations incurred in the ordinary course of business which are not past due for more than thirty (30) days or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Liens under workers' compensation, unemployment insurance, Social Security, or similar legislation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Liens, deposits, or pledges to secure the performance of bids, tenders, contracts (other than contracts for the payment of money), leases (permitted under the terms of this Agreement), public or statutory obligations, surety, stay, appeal, indemnity, performance, or other similar bonds, or other similar obligations arising in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) judgment and other similar Liens arising in connection with court proceedings, provided the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate proceedings; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) easements, rights-of-way, restrictions, and other similar encumbrances which, in the aggregate, do not materially interfere with the occupation, use, and enjoyment by Borrower of the property or assets encumbered thereby in the normal course of its business or materially impair the value of the property subject thereto.

**Section 5.2. <u>Debt</u>.** Create, incur, assume, or suffer to exist, any Debt, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Debt of Borrower under this Agreement, the Notes or other Debt payable to Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) accounts payable to trade creditors incurred in the ordinary course of Borrower's business for good or services which are not aged more than ninety (90) days from billing date thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) security deposits and similar obligations securing performance in favor of landlords, lenders, lessors and other third-party vendors and reimbursement obligations in connection with letters of credit in favor of landlords, lenders, lessors and other third-party vendors in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) current outstanding Debt; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) unsecured Debt.

**Section 5.3. <u>Mergers, Sale of Assets, Etc</u>.** Wind up, liquidate or dissolve itself, reorganize, merge or consolidate with or into, or convey, sell, assign, transfer, lease, or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to any Person.

**Section 5.4. <u>Acquisitions</u>.** Consummate any Acquisition (either directly or indirectly) or enter into any binding agreement for any Acquisition.

**Section 5.5. <u>Distributions</u>.** Declare or make, or agree to pay or make, directly or indirectly, any Distribution, return any capital or make any distribution of its property to any holder of any class of its equity interest, except (a) Borrower may make Distributions with respect to its equity interests with or by issuing additional shares of its equity interests, and (b) so long as no Event of Default has then occurred and is continuing, Borrower may make Distributions to holders of its preferred stock in accordance with, and in respect of, the terms of such preferred stock.

**ARTICLE 6**

**EVENTS OF DEFAULT**

**Section 6.1. <u>Events of Default</u>.** The occurrence and continuance of any of the following shall constitute an "**Event of Default**" if not remedied or cured by Borrower within thirty (30) days following receipt by Borrower of written notice from Lender of the occurrence thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower fails to pay any principal of the Loan when and as the same shall become due and payable whether at the due date thereof or at a date fixed for prepayment thereof, by acceleration or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Borrower fails to pay any interest on the Loan or any fee or any other amount (other than an amount referred to in Section 6.1(a)) payable under any Loan Document, when and as the same shall become due and payable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any representation or warranty made by or on behalf of Borrower in or in connection with any Loan Document or any amendment or modification of any Loan Document or waiver under such Loan Document, or in any report, notice, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, proves to have been materially incorrect when made;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Borrower fails to observe or perform any covenant, condition or agreement contained in Article III;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Borrower fails to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in Section 6.1(a), Section 6.1(b), Section 6.1(c) or Section 6.1(d) or any other Loan Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Borrower fails to make any payment (whether of principal or interest and regardless of amount) in respect of any Debt, when and as the same shall become due and payable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any event or condition occurs that results in any Material Debt of Borrower becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of such Material Debt or any trustee or agent on its or their behalf to cause such Material Debt to become due, or to require the redemption or repurchase thereof or any offer to redeem or repurchase to be made in respect thereof, prior to its scheduled maturity or require Borrower to make an offer in respect thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of Borrower, or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Borrower or for a substantial part of its assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Borrower (i) voluntarily commences any proceeding or files any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consents to the institution of, or fails to contest in a timely and appropriate manner, any proceeding or petition described in Section 6.1(h), (iii) applies for or consents to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Borrower or for a substantial part of its assets, (iv) files an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) makes a general assignment for the benefit of creditors, (vi) takes any action for the purpose of effecting any of the foregoing; or any stockholder of Borrower makes any request or takes any action for the purpose of calling a meeting of the stockholders of Borrower to consider a resolution to dissolve and wind up Borrower's affairs, or (vii) becomes unable, admits in writing its inability or fails generally to pay its debts as they become due; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) one or more judgments for the payment of money in an aggregate amount in excess of $100,000 (to the extent not covered by independent third party insurance provided by financially sound and reputable insurers as to which the insurer does not dispute coverage and is not subject to an insolvency proceeding) is rendered against Borrower and the same remains undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of Borrower to enforce any such judgment.

**Section 6.2. <u>Remedies.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the case of an Event of Default other than one described in Section 6.1(h) or Section 6.1(i) at any time thereafter during the continuance of such Event of Default, Lender may by delivery of written notice to Borrower, declare the Loan then outstanding to be due and payable in whole or in part and thereupon the principal of the Loan so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of Borrower accrued hereunder and under the Loan and the other Loan Documents, shall become due and payable immediately, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice of any kind, all of which are hereby waived by Borrower; and in case of an Event of Default described in Section 6.1(h) or Section 6.1(i), the principal of the Loan then outstanding, together with accrued interest thereon and all fees and the other obligations of Borrower accrued hereunder and under the other Loan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the case of the occurrence of an Event of Default, Lender will have all other rights and remedies available at law and equity and may:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) proceed to appoint a receiver to administer Borrower for the benefit of Lender and to satisfy the debts and obligations of Borrower, including, without limitation, the Loan Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) file suit and obtain judgment and, in conjunction with any action, Lender may seek any ancillary remedies provided by law, including levy of attachment, detinue, replevin, or garnishment; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) proceed to protect and enforce its rights by action at law (including, without limitation, bringing suit to reduce any claim to judgment), suit in equity and other appropriate proceedings including, without limitation, for specific performance of any covenant or condition contained in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All proceeds realized from the liquidation or other disposition of collateral or otherwise received after maturity of the Loans, whether by acceleration or otherwise, shall be applied:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) first, to payment or reimbursement of that portion of the Loan Obligations constituting fees, expenses and indemnities payable to Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) second, to payment of accrued interest on the Loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) third, pro rata to any other Loan Obligations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) last, any excess, after all of the Loan Obligations shall have been indefeasibly paid in full in cash, shall be paid to Borrower or as otherwise required by any Requirement of Law.

**ARTICLE 7** 

**SECURITY AGREEMENT AND COLLATERAL**

**Section 7.1. <u>Grant of Lien and Security Interest</u>**. In consideration of the Loan Obligations, and as security therefor, Borrower hereby grants, bargains, sells, conveys, assigns, transfers and sets over to Lender a Lien and security interest in, all of Borrower's right, title and interest in and to the Collateral, wherever located, and whether now owned or hereafter acquired or arising, it being the intent that the Lien and security interest granted hereby shall secure the payment and performance of the Loan Obligations.

**Section 7.2. <u>Perfection of Security Interests</u>**. Borrower irrevocably authorizes Lender at any time to complete, sign or authenticate in Borrower's name, and file financing statements describing the Collateral and containing such other information as Lender deems appropriate. In addition to, and not in limitation of the foregoing authorization, Borrower expressly authorizes the filing of a UCC-1 Financing Statement in the form attached hereto as <u>Exhibit C</u>. In addition, at the request of Lender, Borrower will execute financing statements in form and number reasonably satisfactory to Lender and will pay the cost of filing the same in all public offices where filing is deemed by Lender to be necessary.

**Section 7.3. <u>Further Assurances</u>**. Borrower shall do, make, execute, and deliver to Lender all such additional and further acts, things, assignments, assurances, and instruments as Lender may reasonably require to more completely vest in and assure to Lender its rights hereunder and in or to the Collateral and the proceeds and products thereof. Borrower will pay promptly when due all taxes and assessments upon the Collateral or any part thereof, upon its use or operation thereof, upon the proceeds or products thereof, upon this Agreement, and upon any note or notes evidencing the Loan Obligations. At its option, Lender may discharge any taxes, liens, security interests or other encumbrances at any time levied or placed on the Collateral or any part thereof and may pay for the maintenance and preservation of the Collateral, but Lender shall not be under any duty to exercise any such authority. Borrower agrees to reimburse Lender, upon demand, for any payment made or any expense incurred by Lender pursuant to the foregoing authorization. All sums expended by Lender which Borrower is obligated to reimburse Lender under this Agreement shall bear interest from the date reimbursement is due until the date paid in full in cash at the agreed contractual rate, as such rate shall change from time to time, but in any event not more than the Highest Lawful Rate. All such sums and the interest thereon shall be secured by the security interest granted by the Loan Documents and, if not paid when due, shall be added to the principal balance of the then-outstanding Loan Obligations and interest shall thereafter accrue on such sum at the interest rate specified above unless prohibited by law.

**Section 7.4. <u>Collateral Condition and Location</u>**. Borrower will take such steps as are necessary to ensure that Lender's security interest is perfected with respect to each item of the Collateral and that such security interests are of record in all appropriate jurisdictions as first liens at the time the Loan is funded. Borrower shall timely supply Lender with evidence of the satisfaction of such requirements. Borrower will not remove any item of Collateral from the location(s) indicated on <u>Exhibit D</u> without Lender's prior written consent, which consent may be withheld or conditioned at Lender's sole discretion. Borrower will keep the Collateral secured, in good condition, make all necessary repairs, use their best efforts to prevent any act which might impair the value of the Collateral and will defend Lender's security interest in the Collateral. Borrowers will not change their principal place of business or residence, as the case may be, without thirty (30) days prior written notice to Lender. Upon Lender's request, Borrower will attach to its records a notation satisfactory to Lender of Lender's security interest in the Collateral. Borrower will not, and will not permit any third party to, reframe, restore or repair any property without the prior written consent of Lender, which consent will not be unreasonably withheld.

**Section 7.5. <u>Possession by Third Parties</u>**. Subject to the provisions of Section 7.4 above, Borrower will cause any third party in possession of any item of Collateral to execute and deliver to Lender such warehouse or bailment agreements as shall be satisfactory to Lender in its sole discretion.

**Section 7.6. <u>Termination</u>**. At any time when no Loan Obligations remain outstanding, no Loan Obligations are unperformed and there exists no commitment on the part of Lender to enter into any other or future Loan Obligation, upon written demand of Borrower, Lender will file, or at Lender's election will furnish to Borrower for filing, a termination statement with respect to its security interest in the Collateral. Upon the filing, or furnishing to Borrower for filing, of such a termination statement which has been duly executed on behalf of Lender, this Agreement shall terminate. Prior to such termination, this shall be a continuing agreement in every respect.

**ARTICLE 8**

**MISCELLANEOUS**

**Section 8.1. <u>Amendments, Etc</u>.** No amendment, modification, termination, or waiver of any provision of any Loan Document shall in any event be effective unless the same shall be in writing and signed by Lender and Borrower, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

**Section 8.2. <u>Notices, Etc</u>.** Any notice or other communication required or permitted to be given by this Agreement or the other Loan Documents or by applicable law shall be in writing and shall be deemed received (a) on the date delivered, if sent by hand delivery (to the person or department if one is specified below), (b) three (3) days following the date deposited in U.S. mail, certified or registered, with return receipt requested, (c) one (1) day following the date deposited with Federal Express or other national overnight carrier, or (d) when received via e-mail or other electronic means (including facsimile), with electronic confirmation of delivery, and in each case addressed as follows:

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| | |
|:---|:---|
| If to Borrower: | Infinite Group, Inc.<br> 175 Sully's Trail, Suite 202<br> Pittsford, New York 14534<br> Attn: James Villa<br> Email: <u>JVilla@IGIus.com</u> |
| With a copy to: | Lucosky Brookman LLP<br> 101 Wood Avenue South, 5<sup>th</sup> Floor<br> Woodbridge, New Jersey 08830<br> Attention: Joseph Lucosky<br> Email: <u>jlucosky@lucbro.com</u><br> Attention: Victoria Baylin<br> Email: <u>vbaylin@lucbro.com</u> |
| If to Lender:  | Harry Hoyen<br> 125 Cove Court Drive<br> Marblehead, Ohio 43440<br> Email: <u>harryhoyen2017@gmail.com</u> |

---

or at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section 8.2. Except as otherwise provided in this Agreement, all such notices and communications shall be effective when deposited in the mails or sent electronically and addressed as aforesaid.

**Section 8.3. <u>No Waiver</u>.** No failure or delay on the part of Lender in exercising any right, power, or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy hereunder. The rights and remedies provided herein are cumulative, and are not exclusive of any other rights, powers, privileges, or remedies, now or hereafter existing, at law or in equity or otherwise.

**Section 8.4. <u>Successors and Assigns</u>.** This Agreement shall be binding upon and inure to the benefit of Borrower and Lender and their respective successors and assigns, except that Borrower may not assign or transfer any of its rights under any Loan Document to which Borrower is a party without the prior written consent of Lender.

**Section 8.5. <u>Costs, Expenses, and Taxes</u>.** Borrower agrees to pay on demand all reasonable costs and expenses incurred by Lender in connection with the preparation, execution, delivery, filing, and administration of the Loan Documents, and of any amendment, modification, or supplement to the Loan Documents, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for Lender incurred in connection with advising Lender as to its rights and responsibilities hereunder. In addition, Borrower shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing, and recording of any of the Loan Documents and the other documents to be delivered under any such Loan Documents, and agrees to hold Lender harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees. This provision shall survive termination of this Agreement. Borrower also agrees to pay all such costs and expenses, including court costs, incurred in connection with enforcement of the Loan Documents, or any amendment, modification, or supplement thereto, whether by negotiation, legal proceedings, or otherwise. If at any time or times hereafter Lender employs counsel to advise or provide other representation with respect to this Agreement, any Loan Document, or any other agreement, document or instrument heretofore, now or hereafter executed by Borrower and delivered to Lender with respect to the Loan Obligations, or to commence, defend or intervene, file a petition, complaint, answer, motion or other pleadings or to take any other action in or with respect to any pending, threatened or anticipated suit or proceeding relating to this Agreement, any Loan Document, or any other agreement, instrument or document heretofore, now or hereafter executed by Borrower and delivered to Lender with respect to the Loan Obligations, or to represent Lender in any litigation with respect to the affairs of Borrower, or to enforce any rights of Lender or obligations of Borrower, which may be obligated to Lender by virtue of this Agreement, any Loan Document, or any other agreement, document or instrument heretofore, now or hereafter delivered to Lender by or for the benefit of Borrower with respect to the Loan Obligations, or to collect from Borrower any amounts owing hereunder, then in any such event, all reasonable attorneys' fees incurred by Lender arising from such services and any expenses, costs and charges relating thereto shall constitute additional obligations of Borrower payable on demand and, until so paid, shall be added to and become part of the Loan Obligations.

**Section 8.6. <u>Performance of Lender</u>.** At its option, upon Borrower's failure to do so, Lender may make any payment or do any act on Borrower's behalf that Borrower or others are required to do to remain in compliance with this Agreement or any of the other Loan Documents, and Borrower agrees to reimburse Lender, on demand, for any payment made or expense incurred by Lender pursuant to the foregoing authorization, including, without limitation, reasonable attorneys' fees, and until so repaid any sums advanced by Lender shall constitute a portion of the Loan Obligations, shall be secured by the Loan Documents and shall bear interest at the Default Rate from the date advanced until repaid.

**Section 8.7. <u>GOVERNING LAW</u>. EACH PARTY HERETO AGREES THAT THE VALIDITY, INTERPRETATION, ENFORCEMENT AND EFFECT OF THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE. EACH PARTY HERETO SUBMITS (AND WAIVES ALL RIGHTS TO OBJECT) TO THE EXCLUSIVE PERSONAL JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE IN WILMINGTON FOR THE ENFORCEMENT OF ANY AND ALL OBLIGATIONS UNDER THE LOAN DOCUMENTS EXCEPT THAT IF ANY SUCH ACTION OR PROCEEDING ARISES UNDER THE CONSTITUTION, LAWS OR TREATIES OF THE UNITED STATES OF AMERICA, OR IF THERE IS A DIVERSITY OF CITIZENSHIP BETWEEN THE PARTIES THERETO, SO THAT IT IS TO BE BROUGHT IN A UNITED STATES DISTRICT COURT, IT SHALL BE BROUGHT IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE; PROVIDED NOTHING IN THIS SECTION SHALL PREVENT THE ENFORCEMENT OF ANY LIEN IN ANY JURISDICTION IN WHICH THE PROPERTY OR OTHER COLLATERAL SUBJECT TO SUCH LIEN IS LOCATED.** 

**Section 8.8. <u>Severability of Provisions</u>.** Any provision of any Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction.

**Section 8.9. <u>Headings</u>.** Article and section headings in the Loan Documents are included in such Loan Documents for the convenience of reference only and shall not constitute a part of the applicable Loan Documents for any other purpose.

**Section 8.10. <u>Singular v. Plural; Amendments</u>.** References to the plural shall include the singular, and references to the singular shall include the plural. All references to other documents or instruments shall be deemed to refer to such documents or instruments as they may hereafter be extended, renewed, modified, or amended and all replacements and substitutions therefor.

**Section 8.11. <u>Set Off</u>.** If an Event of Default shall have occurred and be continuing, Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations (of whatsoever kind) at any time owing by Lender or Affiliate to or for the credit or the account of Borrower against any of and all the obligations of Borrower owed to Lender now or hereafter existing under this Agreement or any other Loan Document, irrespective of whether or not Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations may be unmatured. The rights of each Lender under this section are in addition to other rights and remedies (including other rights of setoff) which Lender or its Affiliates may have. Lender agrees to notify Borrower promptly after any such setoff and application; provided further that the failure to give such notice shall not affect the validity of such setoff and application.

**Section 8.12. <u>Time of Essence</u>.** Time is of the essence in the performance of this Agreement.

**Section 8.13. <u>Prior Agreements; Counterparts</u>.** This Agreement and the instruments referred to herein supersede and incorporate all representations, promises and statements, oral or written, made by each party hereto in connection with the Loan. This Agreement is for the sole benefit of Borrower and Lender (and their successors and permitted assigns, and there shall be no third-party beneficiaries of this Agreement. This Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be an original, but such counterparts shall together constitute one and the same instrument. A signed copy of this Agreement shall have the same force and effect as an original. Copies of executed counterparts of this Agreement transmitted by electronic transmission (including by email or in .pdf format) as well as electronically or digitally executed counterparts (such as DocuSign) shall have the same legal effect as original signatures and shall be considered original executed counterparts of this Agreement.

**Section 8.14. <u>Loan and Security Agreement Governs</u>.** The Loan is governed by the terms and provisions set forth in this Agreement and the other Loan Documents and in the event of any irreconcilable conflict between the terms of the other Loan Documents and the terms of this Agreement, the terms of this Agreement shall control; <u>provided</u>, <u>however</u>, that in the event that there is any apparent conflict between any particular term or provision which appears in both this Agreement and the other Loan Documents and it is possible and reasonable for the terms of both this Agreement and the Loan Documents to be performed or complied with, then, notwithstanding the foregoing, both the terms of this Agreement and the other Loan Documents shall be performed and complied with.

**Section 8.15. <u>INTEGRATION</u>. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.**

**Section 8.16. <u>JURY TRIAL WAIVER</u>. EACH OF LENDER AND BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE LOAN DOCUMENTS. NO OFFICER OF LENDER HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.**

**Section 8.17.** <u>Interest Rate Limitation</u>. It is the intention of the parties hereto that Lender shall conform strictly to usury laws applicable to it. Accordingly, if the transactions contemplated hereby would be usurious as to Lender under laws applicable to it (including the laws of the United States of America or any other jurisdiction whose laws may be mandatorily applicable to Lender notwithstanding the other provisions of this Agreement), then, in that event, notwithstanding anything to the contrary in any of the Loan Documents or any agreement entered into in connection with or as security for the Loan, it is agreed as follows: (a) the aggregate of all consideration which constitutes interest under law applicable to Lender that is contracted for, taken, reserved, charged or received by Lender under any of the Loan Documents or agreements or otherwise in connection with the Loan shall under no circumstances exceed the maximum amount allowed by such applicable law, and any excess shall be canceled automatically and if theretofore paid shall be credited by Lender on the principal amount of the Loan Obligations (or, to the extent that the principal amount of the Loan Obligations shall have been or would thereby be paid in full, refunded by Lender to Borrower); and (b) in the event that the maturity of the Loan is accelerated by reason of an election of the holder thereof resulting from any Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to Lender may never include more than the maximum amount allowed by such applicable law, and excess interest, if any, provided for in this Agreement or otherwise shall be canceled automatically by Lender as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited by Lender on the principal amount of the Loan Obligation (or, to the extent that the principal amount of the Loan Obligation shall have been or would thereby be paid in full, refunded by Lender to Borrower). All sums paid or agreed to be paid to Lender for the use, forbearance or detention of sums due hereunder shall, to the extent permitted by law applicable to Lender, be amortized, prorated, allocated and spread throughout the stated term of the Loan until payment in full so that the rate or amount of interest on account of any Loan hereunder does not exceed the maximum amount allowed by such applicable law. If at any time and from time to time (i) the amount of interest payable to Lender on any date shall be computed at the Highest Lawful Rate applicable to Lender pursuant to this section and (ii) in respect of any subsequent interest computation period the amount of interest otherwise payable to Lender would be less than the amount of interest payable to Lender computed at the Highest Lawful Rate applicable to Lender, then the amount of interest payable to Lender in respect of such subsequent interest computation period shall continue to be computed at the Highest Lawful Rate applicable to Lender until the total amount of interest payable to Lender shall equal the total amount of interest which would have been payable to Lender if the total amount of interest had been computed without giving effect to this section.

**Section 8.18. <u>EXCULPATION PROVISIONS</u>. EACH OF THE PARTIES HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT "CONSPICUOUS."**

**Section 8.19.** <u>USA Patriot Act Notice</u>. Lender hereby notifies Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Patriot Act"), it is required to obtain, verify and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow Lender to identify Borrower and Borrower in accordance with the Act.

**Section 8.20.** <u>Consumer Transaction</u>. The security interest granted in this Agreement does not secure a consumer credit transaction as defined in the Consumer Credit Protection Act and Federal Reserve Board Regulation Z and does not apply to household goods of Borrower as defined in Federal Reserve Board Regulation AA.

**[SIGNATURES ON FOLLOWING PAGE]**

**IN WITNESS WHEREOF,** the parties have caused this Agreement to be executed by their respective authorized representatives, as of the date first above written.

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| | |
|:---|:---|
| **BORROWER:** | **BORROWER:** |
| **INFINITE GROUP, INC.** | **INFINITE GROUP, INC.** |
| a Delaware corporation | a Delaware corporation |
| By:  | /s/ James Villa |
|  | James Villa, Chief Executive Officer |
| **LENDER:** | **LENDER:** |
| **HARRY HOYEN**  | **HARRY HOYEN**  |
|  | /s/ Harry Hoyen |

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**SCHEDULE 3.12**

**DEBT**

**SCHEDULE 5.1(a)**

**LIENS**

**EXHIBIT A**

**FORM OF NOTES**

(Attached)

**EXHIBIT B**

**LOAN AMORTIZATION AND PAYMENT SCHEDULE**

(Attached)

**EXHIBIT C**

**FORM OF FINANCING STATEMENT**

(Attached)

**EXHIBIT D**

**LIST OF COLLATERAL**

(List Below/Attached)

## Exhibit 10.7

**EXHIBIT 10.7**

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![](igi_ex107img9.jpg)

![](igi_ex107img10.jpg)

![](igi_ex107img11.jpg)

![](igi_ex107img12.jpg)

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## Exhibit 10.8

**EXHIBIT 10.8**

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| | |
|:---|:---|
| ![](igi_ex108img16.jpg) | BUSINESS LOAN AND SECURITY <br> AGREEMENT |

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1. INTRODUCTION. This Business Loan and Security Agreement (together with the accompanying Business Loan and Security Agreement Supplement and the accompanying Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits), this "Agreement") governs your business loan ("Loan") from ODK Capital, LLC. Please read it and keep it for your reference. In this Agreement, the words "you," "your" and "Borrower" mean the Borrower identified on the signature page of this Business Loan and Security Agreement. Each guarantor identified on the signature page of this Business Loan and Security Agreement shall be referred to individually as "Guarantor" and collectively as "Guarantors" in this Agreement. The words "OnDeck", "Lender", "we", "us", and "our" mean ODK Capital, LLC or its successor(s) and assign(s).

2. EFFECTIVE DATE. This Agreement begins on the date we accept this Agreement in Utah, which is the date of our signature on the signature page of the Agreement. Borrower understands and agrees that Lender may postpone, without penalty, the disbursement of amounts to Borrower until all required security interests have been perfected and Lender has received all required personal guarantees or other documentation.

3. AUTHORIZATION. Borrower agrees that the Loan made by Lender to Borrower shall be conclusively deemed to have been authorized by Borrower and to have been made pursuant to a duly authorized request on its behalf.

4. LOAN FOR SPECIFIC PURPOSES ONLY. <u>The proceeds of the requested Loan may solely be used for the specific purposes as set forth in the Use of Proceeds Certification contained in Section 50 below, and not for any other purposes.</u> In addition, the Loan will not be used for personal, family or household purposes, and Borrower and Guarantors are forever estopped from taking the position that such Loan (including Advances) are or were used for such personal, family or household purposes. Borrower understands that Borrower's agreement not to use the Loan proceeds for personal, family or household purposes means that certain important duties imposed upon entities making loans for personal, family or household purposes, and certain important rights conferred upon such persons, pursuant to federal or state law will not apply to the Loan or the Agreement. Borrower also understands that Lender will be unable to confirm whether the use of the Loan conforms to this section. Borrower agrees that a breach by Borrower of the provisions of this section will not affect Lender's right to (i) enforce Borrower's promise to pay for all amounts owed under this Agreement, regardless of the purpose for which the Loan is in fact obtained or (ii) use any remedy legally available to Lender, even if that remedy would not have been available had the Loan been made for personal, family or household purposes.

5. DISBURSEMENT OF LOAN PROCEEDS AND MAINTENANCE OF BORROWER'S BANK ACCOUNT. If Borrower applied and was approved for a Loan, Borrower's Loan will be disbursed upon approval as provided in the accompanying Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits). Borrower agrees to maintain Direct Payments (ACH Debits) in its operating account which is the account that was reviewed in conjunction with underwriting and approval of this Loan (including keeping such account open until the Total Repayment Amount had been completely repaid). Borrower agrees that the Loan made by Lender to Borrower may not be returned except at Lender's sole discretion.

6. PROMISE TO PAY. Borrower agrees to pay Lender the Total Repayment Amount shown in the accompanying Business Loan and Security Agreement Supplement in accordance with the Payment Schedule shown in the accompanying Business Loan and Security Agreement Supplement or pursuant to any modification of the Payment Schedule by Lender. Borrower agrees to enroll in Lender's Automatic Payment Plan and authorizes Lender to collect required payments as provided in the accompanying Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits). If required by Lender, Borrower further agrees and authorizes Lender or its servicer to collect required payments from a transfer account established pursuant to certain Transfer Account Loan Documentation that will be provided by Lender in connection with this Business Loan and Security Agreement if applicable.

7. ALTERNATIVE PAYMENT METHODS. If Borrower knows that for any reason Lender will be unable to process a payment under Lender's Automatic Payment Plan, then Borrower must either restore sufficient funds such that the missed payment can be collected as provided in the accompanying Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits), or promptly mail or deliver a check payable to ODK Capital, LLC in the amount of the missed payment or, if offered, make the missed payment by any pay-by-phone or on-line service that Lender may make available from time to time. If Borrower elects to send payments on Borrower's Account by postal mail, then Borrower agrees to send such payments to OnDeck, 4700 W. Daybreak Pkwy., Suite 200, South Jordan, UT 84009, Attn: Director of Operations. All alternative payments must be made in good funds by check, money order, wire transfer, automatic transfer from an account at an institution offering such service, or other instrument in U.S. Dollars. Borrower understands and agrees that payments made at any other address than as specified by Lender may result in a delay in processing and/or crediting. If Borrower makes an alternative payment on Borrower's Loan by mail or by any pay-by-phone or on-line service that Lender makes available while Borrower is enrolled in the Automatic Payment Plan, Lender may treat such payment as an additional payment and continue to process Borrower's scheduled Automatic Payment Plan payments or may reduce any scheduled Automatic Payment Plan payment by the amount of any such additional payment received.

Customer: INFINITE GROUP, INC.

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| | |
|:---|:---|
| ![](igi_ex108img17.jpg) | BUSINESS LOAN AND SECURITY <br> AGREEMENT |

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8. APPLICATION OF PAYMENTS. Subject to applicable law, Lender reserves the right to allocate and apply payments received on Borrower's Loan between principal, interest and fees in any manner Lender chooses in Lender's sole discretion it being understood and agreed that any fees and interest will generally be paid during the earlier portion of the term.

9. POSTDATED CHECKS, RESTRICTED ENDORSEMENT CHECKS AND OTHER DISPUTED OR QUALIFIED PAYMENTS. Lender can accept late, postdated or partial payments without losing any of Lender's rights under this Agreement (a postdated check is a check dated later than the day it was actually presented for payment). Lender is under no obligation to hold a postdated check and Lender reserves the right to process every item presented as if dated the same date received by Lender or Lender's check processor unless Borrower gives Lender adequate notice and a reasonable opportunity to act on it. Except where such notice and opportunity is given, Borrower may not hold Lender liable for depositing any postdated check. Borrower agrees not to send Lender partial payments marked "paid in full," "without recourse," or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Agreement. All notices and written communications concerning postdated checks, restricted endorsement checks (including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount) or any other disputed, nonconforming or qualified payments, must be mailed or delivered to OnDeck, Client Service, 4700 W. Daybreak Pkwy., Suite 200, South Jordan, UT 84009, Attn: Director of Operations.

10. PREPAYMENT. Borrower may prepay Borrower's Loan in whole on any Business day by paying Lender the sum total of the Total Repayment Amount, any Returned Payment Fees, and any Late Fees, in each case as described in the accompanying Business Loan and Security Agreement Supplement less (i) the amount of any Loan payments made prior to such prepayment and (ii) the product of (x) the percentage identified as the applicable Prepayment Interest Reduction Percentage in the accompanying Business Loan and Security Agreement Supplement; and (y) the aggregate amount of unpaid interest remaining on the Borrower's Loan as of such date as determined by Lender's records in accordance with Section 8. Borrower may prepay Borrower's Loan in part on any Business day and such payment shall be applied against the Total Repayment Amount, any Returned Payment Fees, and any Late Fees, in each case as described in the accompanying Business Loan and Security Agreement Supplement.

11. SECURITY INTEREST. Borrower hereby grants to Lender, the secured party hereunder, a continuing security interest in and to any and all "Collateral" as described below to secure payment and performance of all debts, liabilities and obligations of Borrower to Lender hereunder and also any and all other debts, liabilities and obligations of Borrower to Lender of every kind and description, direct or indirect, absolute or contingent, primary or secondary, due or to become due, now existing or hereafter arising, related to the Loan described in this Agreement, whether or not contemplated by the parties at the time of the granting of this security interest, regardless of how they arise or by what agreement or instrument they may be evidenced or whether evidenced by any agreement or instrument, and includes obligations to perform acts and refrain from taking action as well as obligations to pay money including, without limitation, all interest, other fees and expenses (all hereinafter called "Obligations"). The Collateral includes the following property that Borrower (or Guarantor, if applicable, pursuant to Section 12) now owns or shall acquire or create immediately upon the acquisition or creation thereof: (i) any and all amounts owing to Borrower now or in the future from any merchant processor(s) processing charges made by customers of Borrower via credit card or debit card transactions; and (ii) all other tangible and intangible personal property, including, but not limited to (a) cash and cash equivalents, (b) inventory, (c) equipment, (d) investment property, including certificated and uncertificated securities, securities accounts, security entitlements, commodity contracts and commodity accounts, (e) instruments, including promissory notes (f) chattel paper, including tangible chattel paper and electronic chattel paper, (g) documents, (h) letter of credit rights, (i) accounts, including health-care insurance receivables, (j) deposit accounts, (k) commercial tort claims, (l) general intangibles, including payment intangibles and software and (m) as-extracted collateral as such terms may from time to time be defined in the Uniform Commercial Code. The security interest Borrower (or Guarantor, if applicable, pursuant to Section 12) grants includes all accessions, attachments, accessories, parts, supplies and replacements for the Collateral, all products, proceeds and collections thereof and all records and data relating thereto. Lender disclaims any security interest in household goods in which Lender is forbidden by law from taking a security interest, and disclaims any security interest in real estate and dwellings.

Customer: INFINITE GROUP, INC.

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| | |
|:---|:---|
| ![](igi_ex108img18.jpg) | BUSINESS LOAN AND SECURITY <br> AGREEMENT |

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12. PROTECTING THE SECURITY INTEREST. Borrower agrees that Lender and/or Lender's Representative may file any financing statement, lien entry form or other document Lender and/or Lender's Representative requires in order to perfect, amend or continue Lender's security interest in the Collateral and Borrower agrees to cooperate with Lender and Lender's Representative as may be necessary to accomplish said filing and to do whatever Lender and Lender's Representative deems necessary to protect Lender's security interest in the Collateral. Borrower and Guarantor each agree that, if any Guarantor is a corporate entity, then Lender or Lender's Representative may file any financing statement, lien entry form or other document against such Guarantor or its property that Lender and/or Lender's Representative requires in order to perfect, amend or continue Lender's security interest in the Collateral. Any such Guarantor agrees to cooperate with Lender and Lender's Representative as may be necessary to accomplish said filing and to do whatever Lender or Lender's Representative deems necessary to protect Lender's security interest in the Collateral. In this Agreement, "Lender's Representative" means any entity or individual that is designated by Lender to serve in such capacity.

13. LOCATION OF COLLATERAL; TRANSACTIONS INVOLVING COLLATERAL. Unless Lender has agreed otherwise in writing, Borrower agrees and warrants that (i) all Collateral (or records of the Collateral in the case of accounts, chattel paper and general intangibles) shall be located at Borrower's address as shown in the application, (ii) except for inventory sold or accounts collected in the ordinary course of Borrower's business, Borrower shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral, (iii) no one else has any interest in or claim against the Collateral that Borrower has not already told Lender about, (iv) Borrower shall not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance or charge, other than the security interest provided for in this Agreement and (v) Borrower shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral for less than the fair market value thereof. Borrower shall defend Lender's rights in the Collateral against the claims and demands of all other persons. All proceeds from any unauthorized disposition of the Collateral shall be held in trust for Lender, shall not be co-mingled with any other funds and shall immediately be delivered to Lender. This requirement, however, does not constitute consent by Lender to any such disposition.

14. TAXES, ASSESSMENTS AND LIENS. Borrower will complete and file all necessary federal, state and local tax returns and will pay when due all taxes, assessments, levies and liens upon the Collateral and provide evidence of such payments to Lender upon request.

15. INSURANCE. Borrower shall procure and maintain such insurance as Lender may require with respect to the Collateral, in form, amounts and coverage reasonably acceptable to Lender and issued by a company reasonably acceptable to Lender naming Lender as loss payee. If Borrower at any time fails to obtain or maintain any insurance as required under this Agreement, Lender may obtain such insurance as Lender deems appropriate at Borrower's sole cost and expense. Borrower shall promptly notify Lender of any loss of or damage to the Collateral.

16. REPAIRS AND MAINTENANCE. Borrower agrees to keep and maintain, and to cause others to keep and maintain, the Collateral in good order, repair and condition at all times while this Agreement remains in effect. Borrower further agrees to pay when due all claims for work done on, or services rendered or material furnished in connection with the Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral.

17. INSPECTION OF COLLATERAL AND PLACE OF BUSINESS; USE OF PHOTOGRAPHS AND TESTIMONIALS. Lender and Lender's designated representatives and agents shall have the right during Borrower's normal business hours and at any other reasonable time to examine the Collateral wherever located and the interior and exterior of any Borrower place of business. To the extent that Lender or Lender's designated representatives choose to examine Borrower's assets and place of business outside of normal business hours, Lender shall give Borrower reasonable notice, which shall be at least five business days, prior to the date of inspection. Borrower shall cooperate with Lender in making its assets and place of business available for inspection. During an examination of any Borrower place of business, Lender may examine, among other things, whether Borrower (i) has a place of business that is separate from any personal residence, (ii) is open for business, (iii) has sufficient inventory to conduct Borrower's business and (iv) has one or more credit card terminals if Borrower processes credit card transactions. When performing an examination, Lender may photograph the interior and exterior of any Borrower place of business, including any signage, and may photograph any individual who has signed the Agreement ("Signatory") unless the Signatory previously has notified Lender that he or she does not authorize Lender to photograph the Signatory. Lender may obtain testimonials from any Signatory, including testimonials on why Borrower needed the Loan and how the Loan has helped Borrower. Any photograph and testimonial will become and remain the sole property of Lender. Borrower and each Signatory grant Lender the irrevocable and permanent right to display and share any photograph and testimonial in all forms and media, including composite and modified representations, for all purposes, including but not limited to any trade or commercial purpose, with any Lender employees and agents and with the general public. Lender may, but is not required to, use the name of any Borrower and Signatory as a credit in connection with any photograph and testimonial. Borrower and each Signatory waive the right to inspect or approve versions of any photograph or testimonial or the written copy or other media that may be used in connection with same. Borrower and each Signatory release Lender from any claims that may arise regarding the use of any photograph or testimonial, including any claims of defamation, invasion of privacy or infringement of moral rights, rights of publicity or copyright.

Customer: INFINITE GROUP, INC.

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| ![](igi_ex108img19.jpg) | BUSINESS LOAN AND SECURITY <br> AGREEMENT |

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18. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Borrower fails to comply with any provision of this Agreement or any related documents, including but not limited to Borrower's failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any related documents, Lender on Borrower's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Collateral and paying all costs for insuring, maintaining and preserving the Collateral. To the extent permitted by applicable law, all such expenses will become a part of the Obligations and, at Lender's option, will: (i) be payable on demand; (ii) be added to the balance of the Loan and be apportioned among and be payable with any installment payments to become due during the remaining term of the Loan; or (iii) be treated as a balloon payment that will be due and payable at the Loan's maturity. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon an Event of Default.

19. BORROWER'S REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants that: (i) Borrower will comply with all laws, statutes, regulations and ordinances pertaining to the conduct of Borrower's business and promises to hold Lender harmless from any damages, liabilities, costs, expenses (including attorneys' fees) or other harm arising out of any violation thereof; (ii) Borrower's principal executive office and the office where Borrower keeps its records concerning its accounts, contract rights and other property, is that shown in the application; (iii) Borrower is duly organized, licensed, validly existing and in good standing under the laws of its state of formation and shall hereafter remain in good standing in that state, and is duly qualified, licensed and in good standing in every other state in which it is doing business, and shall hereafter remain duly qualified, licensed and in good standing in every other state in which it is doing business, and shall hereafter remain duly qualified, licensed and in good standing in every other state in which the failure to qualify or become licensed could have a material adverse effect on the financial condition, business or operations of Borrower; (iv) the true and correct legal name of the Borrower is set forth in the application; (v) the aggregate ownership percentage of the Signatories is greater than or equal to fifty percent (50%) of the Borrower's business; (vi) the execution, delivery and performance of this Agreement, and any other document executed in connection herewith, are within Borrower's powers, have been duly authorized, are not in contravention of law or the terms of Borrower's charter, by-laws or other constating documents, or of any indenture, agreement or undertaking to which Borrower is a party; (vii) all constating documents and all amendments thereto of Borrower have been duly filed and are in proper order and any capital stock issued by Borrower and outstanding was and is properly issued and all books and records of Borrower are accurate and up to date and will be so maintained; (viii) Borrower (a) is subject to no charter, corporate or other legal restriction, or any judgment, award, decree, order, governmental rule or regulation or contractual restriction that could have a material adverse effect on its financial condition, business or prospects, and (b) is in compliance with its charter, by-laws and other constating documents, all contractual requirements by which it may be bound and all applicable laws, rules and regulations other than laws, rules or regulations the validity or applicability of which it is contesting in good faith or provisions of any of the foregoing the failure to comply with which cannot reasonably be expected to materially adversely affect its financial condition, business or prospects or the value of the Collateral; (ix) there is no action, suit, proceeding or investigation pending or, to Borrower's knowledge, threatened against or affecting it or any of its assets before or by any court or other governmental authority which, if determined adversely to it, would have a material adverse effect on its financial condition, business or prospects or the value of the Collateral; (x) all information provided by Borrower and/or Guarantor as part of the application process for the Loan was true and complete; (xi) Borrower does not intend to file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within 6 months of the date hereof; and (xii) Borrower is not presently insolvent within the meaning of the Uniform Commercial Code as well as the United States Bankruptcy Code.

20. INTEREST AND FEES. Borrower agrees to pay in full the interest set forth in the accompanying Business Loan and Security Agreement Supplement. In addition to any other fees described in the Agreement, Borrower agrees to pay the following fees:

A. <u>Origination Fee</u>: A one-time Origination Fee in the amount set forth in the accompanying Business Loan and Security Agreement Supplement. Borrower agrees that this fee will be immediately deducted from the proceeds of Borrower's Loan.

B. <u>Returned Payment Fee</u>: A Returned Payment Fee in the amount set forth in the accompanying Business Loan and Security Agreement Supplement if any electronic payment processed on Borrower's Loan is returned unpaid or dishonored for any reason.

C. <u>Late Fee</u>: A Late Fee in the amount set forth in the accompanying Business Loan and Security Agreement Supplement if a scheduled payment is not received by Lender as provided in the payment schedule set forth in the accompanying Business Loan and Security Agreement Supplement.

Customer: INFINITE GROUP, INC.

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| ![](igi_ex108img20.jpg) | BUSINESS LOAN AND SECURITY <br> AGREEMENT |

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Payments made by Borrower hereunder will be applied and allocated between Loan principal, interest and fees in the manner set forth in Section 8.

21. INTEREST AND FEES EXCEEDING PERMITTED LIMIT. If the Loan is subject to a law that sets maximum charges, and that law is finally interpreted so that the interest or other fees collected or to be collected in connection with this Agreement exceed the permitted limits, then (i) any such charge will be reduced by the amount necessary to reduce the charge to the permitted limit and (ii) if required by applicable law, any sums already collected from Borrower that exceed the permitted limits will be refunded or credited to Borrower.

22. ONLINE CUSTOMER PORTAL. When Borrower signs in with Borrower's valid username and password at loans.ondeck.com, Borrower can obtain information about the Borrower's Loan, such as the outstanding balance, daily transactions and fees. No additional paper statement will be mailed to Borrower. Borrower agrees not to share Borrower's username and password to loans.ondeck.com with any third party.

23. FINANCIAL INFORMATION AND REEVALUATION OF CREDIT. Borrower and each Guarantor (if any) authorize Lender to obtain business and personal credit bureau reports in Borrower's and any Guarantor's name, respectively, at any time and from time to time for purposes of deciding whether to approve the requested Loan or for any update, renewal, extension of credit or other lawful purpose. Upon Borrower's or any Guarantor's request, Lender will advise Borrower or Guarantor if Lender obtained a credit report and Lender will give Borrower or Guarantor the credit bureau's name and address. Borrower and each Guarantor (if any) agree to submit current financial information, a new credit application, or both, in Borrower's name and in the name of each Guarantor, respectively, at any time promptly upon Lender's request. Borrower authorizes Lender to act as Borrower's agent for purposes of accessing and retrieving transaction history information regarding Borrower from Borrower's designated merchant processor(s). Lender may report Lender's credit experiences with Borrower and any Guarantor of Borrower's Loan to third parties as permitted by law, including with respect to any Guarantor to consumer credit reporting agencies. Borrower also agrees that Lender may release information to comply with governmental reporting or legal process that Lender believes may be required, whether or not such is in fact required, or when necessary or helpful in completing a transaction, or when investigating a loss or potential loss. Borrower and each Guarantor is hereby notified that a negative credit report reflecting on Borrower's and/or any Guarantor's credit record may be submitted to a credit reporting agency (including with respect to any Guarantor to consumer credit reporting agencies) if Borrower or such Guarantor fails to fulfill the terms of their respective credit obligations hereunder. Guarantor acknowledges that any credit reporting on the Loan shall be at the sole discretion of Lender (subject to applicable law) and that Lender has the right to report the Loan to Guarantor's personal credit file should Guarantor not pay any Obligation pursuant to the guaranty set forth in this Agreement.

24. ATTORNEYS' FEES AND COLLECTION COSTS. To the extent not prohibited by applicable law and except as provided in Section 33, Borrower shall pay to Lender on demand any and all expenses, including, but not limited to, collection costs, all attorneys' fees and expenses, and all other expenses of like or unlike nature which may be expended by Lender to obtain or enforce payment of Obligations either as against Borrower or any guarantor or surety of Borrower or in the prosecution or defense of any action or concerning any matter arising out of or connected with the subject matter of this Agreement, the Obligations or the Collateral or any of Lender's rights or interests therein or thereto, including, without limiting the generality of the foregoing, any counsel fees or expenses incurred in any bankruptcy or insolvency proceedings and all costs and expenses (including search fees) incurred or paid by Lender in connection with the administration, supervision, protection or realization on any security held by Lender for the debt secured hereby, whether such security was granted by Borrower or by any other person primarily or secondarily liable (with or without recourse) with respect to such debt, and all costs and expenses incurred by Lender in connection with the defense, settlement or satisfaction of any action, claim or demand asserted against Lender in connection therewith, which amounts shall be considered advances to protect Lender's security, and shall be secured hereby. To the extent permitted by applicable law, all such expenses will become a part of the Obligations and, at Lender's option, will: (i) be payable on demand; (ii) be added to the balance of the Loan and be apportioned among and be payable with any installment payments to become due during the remaining term of the Loan; or (iii) be treated as a balloon payment that will be due and payable at the Loan's maturity. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon an Event of Default.

Customer: INFINITE GROUP, INC.

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| ![](igi_ex108img21.jpg) | BUSINESS LOAN AND SECURITY <br> AGREEMENT |

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25. BORROWER'S REPORTS. Promptly upon Lender's written request, Borrower and each Guarantor agrees to provide Lender with such information about the financial condition and operations of Borrower or any Guarantor, as Lender may, from time to time, reasonably request. Borrower also agrees promptly upon becoming aware of any Event of Default, or the occurrence or existence of an event which, with the passage of time or the giving of notice or both, would constitute an Event of Default hereunder, to promptly provide notice thereof to Lender in writing.

26. TELEPHONE COMMUNICATIONS. Borrower and Guarantors hereby expressly consent to receiving calls and messages, including auto-dialed and pre-recorded message calls and SMS messages (including text messages) from Lender, its affiliates, marketing partners, agents and others calling at Lender's request or on its behalf, at any telephone numbers that Borrower and/or Guarantors have provided or may provide in the future or otherwise in Lender's possession (including any cellular or mobile telephone numbers). Borrower and Guarantor agree that such communications may be initiated using an automated telephone dialing system.

27. INDEMNIFICATION. Except for Lender's gross negligence or willful misconduct, Borrower will indemnify and hold Lender harmless from all losses, costs, damages, liabilities or expenses (including, without limitation, court costs and reasonable attorneys' fees) that Lender may sustain or incur by reason of defending or protecting Lender's security interest or the priority thereof or enforcing the Obligations, or in the prosecution or defense of any action or proceeding concerning any matter arising out of or in connection with this Agreement and/or any other documents now or hereafter executed in connection with this Agreement and/or the Obligations and/or the Collateral. This indemnity shall survive the repayment of the Obligations and the termination of this Agreement.

28. MERGERS, CONSOLIDATIONS OR SALES. Borrower represents and agrees that Borrower will not (i) merge or consolidate with or into any other business entity or (ii) enter into any joint venture or partnership with any person, firm, corporation, or other entity. Borrower further agrees not to alter its ownership without prior written permission from Lender.

29. CHANGE IN LEGAL STATUS. Without Lender's consent, Borrower represents and agrees that Borrower will not (i) change its name, its place of business or, if more than one, chief executive office, its mailing address, or organizational identification number if it has one, or (ii) change its type of organization, jurisdiction of organization or other legal structure. If Borrower does not have an organizational identification number and later obtains one, Borrower shall promptly notify Lender of such taxpayer identification number.

Customer: INFINITE GROUP, INC.

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| ![](igi_ex108img22.jpg) | BUSINESS LOAN AND SECURITY <br> AGREEMENT |

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30. DEFAULT. The occurrence of any one or more of the following events (herein, "Events of Default") shall constitute, without notice or demand, a default under this Agreement and all other agreements between Lender and Borrower and instruments and papers given Lender by Borrower, whether such agreements, instruments, or papers now exist or hereafter arise: (i) Lender is unable to collect any Automatic Payment Plan payment on two consecutive dates due and/or, Borrower fails to pay any Obligations on two consecutive dates due; (ii) Borrower fails to comply with, promptly, punctually and faithfully perform or observe any term, condition or promise within this Agreement; (iii) the determination by Lender that any representation or warranty heretofore, now or hereafter made by Borrower to Lender, in any documents, instrument, agreement, application or paper was not true or accurate when given; (iv) the occurrence of any event such that any indebtedness of Borrower from any lender other than Lender could be accelerated, notwithstanding that such acceleration has not taken place; (v) the occurrence of any event that would cause a lien creditor, as that term is defined in Section of the Uniform Commercial Code, (other than Lender) to take priority over the Loan made by Lender; (vi) a filing against or relating to Borrower (unless consented to in writing by Lender) of (a) a federal tax lien in favor of the United States of America or any political subdivision of the United States of America, or (b) a state tax lien in favor of any state of the United States of America or any political subdivision of any such state; (vii) the occurrence of any event of default under any other agreement between Lender and Borrower or instrument or paper given Lender by Borrower, whether such agreement, instrument, or paper now exists or hereafter arises (notwithstanding that Lender may not have exercised its rights upon default under any such other agreement, instrument or paper); (viii) any act by, against, or relating to Borrower, or its property or assets, which act constitutes the application for, consent to, or sufferance of the appointment of a receiver, trustee or other person, pursuant to court action or otherwise, over all, or any part of Borrower's property; (ix) the granting of any trust mortgage or execution of an assignment for the benefit of the creditors of Borrower, or the occurrence of any other voluntary or involuntary liquidation or extension of debt agreement for Borrower; (x) the failure by Borrower to generally pay the debts of Borrower as they mature; (xi) adjudication of bankruptcy or insolvency relative to Borrower or any Guarantor; (xii) the entry of an order for relief or similar order with respect to Borrower or any Guarantor in any proceeding pursuant to Title 11 of the United States Code entitled "Bankruptcy" (the "Bankruptcy Code") or any other federal bankruptcy law; (xiii) the filing of any complaint, application or petition by or against Borrower initiating any matter in which Borrower is or may be granted any relief from the debts of Borrower pursuant to the Bankruptcy Code or any other insolvency statute or procedure; (xiv) the calling or sufferance of a meeting of creditors of Borrower; (xv) the meeting by Borrower with a formal or informal creditor's committee; (xvi) the offering by or entering into by Borrower of any composition, extension or any other arrangement seeking relief or extension for the debts of Borrower, or the initiation of any other judicial or non-judicial proceeding or agreement by, against or including Borrower that seeks or intends to accomplish a reorganization or arrangement with creditors; (xvii) the entry of any judgment against Borrower, which judgment is not satisfied or appealed from (with execution or similar process stayed) within 15 days of its entry; (xviii) the occurrence of any event or circumstance with respect to Borrower or any Guarantor such that Lender shall believe in good faith that the prospect of payment of all or any part of the Obligations or the performance by Borrower under this Agreement or any other agreement between Lender and Borrower is impaired or there shall occur any material adverse change in the business or financial condition of Borrower (such event specifically includes, but is not limited to, taking additional financing from a credit card advance, cash advance company or an additional working capital loan without the prior written consent of Lender); (xix) the entry of any court order that enjoins, restrains or in any way prevents Borrower from conducting all or any part of its business affairs in the ordinary course of business; (xx) the occurrence of any uninsured loss, theft, damage or destruction to any material asset(s) of Borrower; (xxi) any act by or against, or relating to Borrower or its assets pursuant to which any creditor of Borrower seeks to reclaim or repossess or reclaims or repossesses all or a portion of Borrower's assets; (xxii) the termination of existence, dissolution or liquidation of Borrower or the ceasing to carry on actively any substantial part of Borrower's current business; (xxiii) this Agreement shall, at any time after its execution and delivery and for any reason, cease to be in full force and effect or shall be declared null and void, or the validity or enforceability hereof shall be contested by Borrower or any guarantor of Borrower denies it has any further liability or obligation hereunder; (xxiv) any guarantor or person signing a support agreement in favor of Lender shall repudiate, purport to revoke or fail to perform his or her obligations under his guaranty or support agreement in favor of Lender or any corporate guarantor shall cease to exist; (xxv) any material change occurs in Borrower's ownership or organizational structure (acknowledging that any change in ownership will be deemed material when ownership is closely held); (xxvi) if Borrower is a sole proprietorship, the owner dies; if Borrower is a trust, a trustor dies; if Borrower is a partnership, any general or managing partner dies; if Borrower is a corporation, any principal officer or 10% or greater shareholder dies; if Borrower is a limited liability company, any managing member dies; if Borrower is any other form of business entity, any person(s) directly or indirectly controlling 10% or more of the ownership interests of such entity dies.

Customer: INFINITE GROUP, INC.

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| ![](igi_ex108img23.jpg) | BUSINESS LOAN AND SECURITY <br> AGREEMENT |

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31. RIGHTS AND REMEDIES UPON DEFAULT. Subject to applicable law, if an Event of Default occurs under this Agreement, at any time thereafter, Lender may exercise any one or more of the following rights and remedies:

A. <u>Refrain from Disbursing Loan Proceeds</u>: Lender may refrain from disbursing Borrower's Loan proceeds to Borrower's Designated Checking Account.

B. <u>Debit Amounts Due From Borrower's Accounts</u>: Lender may debit from Borrower's Designated Checking Account all Automatic Payment Plan payments that Lender was unable to collect and/or the amount of any other Obligations that Borrower failed to pay.

C. <u>Accelerate Indebtedness</u>: Lender may declare the entire Obligations immediately due and payable, without notice of any kind to Borrower.

D. <u>Assemble Collateral</u>: Lender may require Borrower and/or Guarantor to deliver to Lender all or any portion of the Collateral and any and all certificates of title and other documents relating to the Collateral. Lender may require Borrower and/or Guarantor to assemble the Collateral and make it available to Lender at a place to be designated by Lender. Lender also shall have full power to enter, provided Lender does so without a breach of the peace or a trespass, upon the property of Borrower and/or Guarantor to take possession of and remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the time of repossession, Borrower and/or Guarantor agree Lender may take such other goods, provided that Lender makes reasonable efforts to return them to Borrower and/or Guarantor after repossession.

E. <u>Sell the Collateral</u>: Lender shall have full power to sell, lease, transfer, or otherwise deal with the Collateral or proceeds thereof in Lender's own name or that of Borrower and/or Guarantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender will give Borrower, Guarantor and other persons as required by law, reasonable notice of the time and place of any public sale, or the time after which any private sale or any other disposition of the Collateral is to be made. However, no notice need be provided to any person who, after an Event of Default occurs, enters into and authenticates an agreement waiving that person's right to notification of sale. The requirements of reasonable notice shall be met if such notice is given at least 10 days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral, including without limitation the expenses of retaking, holding, insuring, preparing for sale and selling the Collateral, shall become a part of the Obligations secured by this Agreement. To the extent permitted by applicable law, all such expenses will become a part of the Obligations and, at Lender's option, will: (i) be payable on demand; (ii) be added to the balance of the Loan and be apportioned among and be payable with any installment payments to become due during either (a) the term of any applicable insurance policy or (b) the remaining term of the Loan; or (iii) be treated as a balloon payment that will be due and payable at the Loan's maturity.

Customer: INFINITE GROUP, INC.

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| ![](igi_ex108img24.jpg) | BUSINESS LOAN AND SECURITY <br> AGREEMENT |

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| F. | <u>Appoint Receiver</u>: Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collateral, with the power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the rents from the Collateral and apply the proceeds, over and above the cost of the receivership, against the Obligations. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Collateral exceeds the Obligations by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. |
| G.  | <u>Collect Revenues, Apply Accounts</u>: Lender, either itself or through a receiver, may collect the payments, rents, income, and revenues from the Collateral. Lender may at any time in Lender's discretion transfer any Collateral into Lender's own name or that of Lender's nominee and receive the payments, rents, income and revenues therefrom and hold the same as security for the Obligations or apply it to payment of the Obligations in such order of preference as Lender may determine. Insofar as the Collateral consists of accounts, general intangibles, insurance policies, instruments, chattel paper, choses in action, or similar property, Lender may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose or realize on the Collateral as Lender may determine, whether or not any amount included within the Obligations is then due, as permitted by law. For these purposes, Lender may, on behalf of and in the name of Borrower and/or Guarantor, receive, open and dispose of mail addressed to Borrower; change any address to which mail and payments are to be sent; and endorse notes, checks, drafts, money orders, documents of title, instruments and items pertaining to payment, shipment or storage of any Collateral. To facilitate collections, Lender may notify account debtors and obligors on any Collateral to make payments directly to Lender. |
| H.  | <u>Obtain Deficiency</u>: If Lender chooses to sell any or all of the Collateral, Lender may obtain a judgment against Borrower and/or Guarantor for any deficiency remaining on the Obligations due to Lender after application of all amounts received from the exercise of the rights provided in this Agreement. Borrower and/or Guarantor shall be liable for a deficiency even if the transaction described in this subsection is a sale of accounts or chattel paper. |
| I.  | <u>Other Rights and Remedies</u>: Lender shall have all the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, as may be amended from time to time. In addition, Lender shall have and may exercise any or all other rights and remedies it may have available at law, in equity or otherwise. |
| J.  | <u>Election of Remedies</u>: Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by this Agreement, any related documents, or by any other writing, shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and |
|  | an election to make expenditures or to take action to perform an obligation of Borrower under the Agreement, after Borrower's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. |

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32. CONSENT TO JURISDICTION AND VENUE. Subject to Section 33 below, Borrower, Guarantors and Lender agree that any action or proceeding to enforce or arising out of this Agreement may be brought in any court of the State of Utah or in the United States District Court for the District of Utah, and Borrower and Guarantors waive personal service of process. Borrower, Guarantors and Lender agree that, subject to section 33, venue is proper in such courts.

33. ARBITRATION AGREEMENT AND CLASS ACTION WAIVER. THE PARTIES AGREE THAT AT THE ELECTION OF ANY PARTY, ALL CLAIMS BETWEEN BORROWER, GUARANTORS, AND LENDER SHALL BE RESOLVED THROUGH MANDATORY BINDING INDIVIDUAL ARBITRATION PURSUANT TO THIS SECTION.

Customer: INFINITE GROUP, INC.

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|:---|:---|
| ![](igi_ex108img25.jpg) | BUSINESS LOAN AND SECURITY <br> AGREEMENT |

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A. Arbitration procedures are generally simpler than the rules that apply in court, and discovery is more limited. Other rights that Borrower, Guarantor, or Lender would have in court may also not be available in arbitration. For example, under this arbitration agreement, Borrower, Guarantor, or Lender will not have the right to (i) have a court or jury decide the claim being arbitrated, (ii) engage in pre-arbitration discovery to the same extent that Borrower, Guarantor, or Lender could in court, (iii) as set forth below, participate as a representative or member of any class or of claimants in a class action, in court or in arbitration, relating to any claim subject to arbitration, or (iv) join or consolidate claims other than Borrower's, Guarantor's, or Lender's own claims. Any arbitration award and any judgment confirming it will apply only to a specific Claim and cannot be used in any other case except to enforce the award.

B. The term "Claims" is to be given the broadest possible meaning, and includes without limitation Claims arising from or relating to (i) this Agreement, including without limitation, the terms, construction, interpretation, performance, termination, breach, or enforceability of this Agreement, (ii) any transactions effected pursuant to this Agreement, (iii) terms of or change or addition of terms to this Agreement, (iv) collection or enforcement of any obligation arising from this Agreement, (v) advertisements, promotions, or oral or written statements relating to this Agreement or any transactions between us pursuant to this Agreement, (vi) Claims between Borrower and Guarantor and Lender or Lender's parent corporations, wholly or majority owned subsidiaries, affiliates, predecessors, successors, assigns, agents, independent contractors, employees, officers, directors or representatives arising from any transaction between us pursuant to this Agreement, and (vii) Claims regarding the validity, enforceability, or scope of this Arbitration section or this Agreement, including but not limited to whether a given claim or dispute is subject to arbitration.

C. The parties agree that any Claim against Borrower, Guarantors, or Lender shall be, at the election of any party, resolved by mandatory binding arbitration within a reasonable time period not to exceed one-hundred-and-eighty (180) days. The parties agree that the arbitration shall be administered by JAMS and the arbitration shall be conducted in accordance with the JAMS Streamlined Arbitration Rules & Procedures except as otherwise agreed in this Agreement; if JAMS is unavailable to administer the arbitration, then the arbitration shall be administered by the American Arbitration Association in accordance with its procedures or any other mutually agreeable arbitrator. The parties agree that the arbitration shall be conducted by a single arbitrator. The arbitrator shall be chosen in accordance with the procedures of JAMS and shall base the award on applicable law. The arbitration hearing shall occur in the federal judicial district where Borrower or Guarantor are located, and may be conducted on the basis of documents only or through a telephone or in-person hearing. The arbitrator's decisions are final and binding, are as enforceable as any court order, and are subject to very limited review by a court as set forth in the Federal Arbitration Act. Judgment on the award may be entered in any court having jurisdiction, subject to Section 32 above.

D. The parties agree that the costs of the arbitration (including the arbitrator's fees) shall be divided equally between them, except that Lender will consider in good faith a request by Borrower to pay the costs of arbitration.

E. EACH PARTY MAY PURSUE ARBITRATION SOLELY IN AN INDIVIDUAL CAPACITY, AND NOT AS A REPRESENTATIVE OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING. THE ARBITRATOR MAY NOT CONSOLIDATE MORE THAN ONE PERSON'S OR ENTITY'S CLAIMS, AND MAY NOT OTHERWISE PRESIDE OVER ANY FORM OF A REPRESENTATIVE OR CLASS PROCEEDING. BORROWER, GUARANTORS, AND LENDER WAIVE ANY RIGHT TO ASSERT ANY CLAIMS AGAINST <u>ANY</u> OTHER PARTY AS A REPRESENTATIVE OR MEMBER IN ANY CLASS OR REPRESENTATIVE ACTION, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW AGAINST PUBLIC POLICY. TO THE EXTENT <u>ANY</u> PARTY IS PERMITTED BY LAW OR COURT OF LAW TO PROCEED WITH A CLASS OR REPRESENTATIVE ACTION AGAINST <u>ANY</u> OTHER, THE PARTIES HEREBY AGREE THAT: (1) THE PREVAILING PARTY SHALL NOT BE ENTITLED TO RECOVER ATTORNEYS' FEES OR COSTS ASSOCIATED WITH PURSUING THE CLASS OR REPRESENTATIVE ACTION (NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT); AND (2) THE PARTY WHO INITIATES OR PARTICIPATES AS A MEMBER OF THE CLASS WILL NOT SUBMIT A CLAIM OR OTHERWISE PARTICIPATE IN ANY RECOVERY SECURED THROUGH THE CLASS OR REPRESENTATIVE ACTION.

F. If this provision is deemed by a court or arbitrator to be unenforceable only as to some Claims asserted by a party, then the parties agree in advance that all proceedings relating to the Claims against which this provision is unenforceable should be stayed and not proceed pending the completion of the arbitration proceeding on all remaining claims.

G. If Borrower, Guarantor, or Lender files a Claim in court, such action is not deemed to be a waiver of the right to compel arbitration of any counterclaims, cross-claims, or separate claims that may be asserted against it. In such a case, upon the election of any party, the entire dispute shall be resolved in arbitration pursuant to the provisions of this section.

H. This arbitration section is governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16, other applicable federal law, and, to the extent it is applicable, by Utah law.

Customer: INFINITE GROUP, INC.

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|:---|:---|
| ![](igi_ex108img26.jpg) | BUSINESS LOAN AND SECURITY <br> AGREEMENT |

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34. JURY TRIAL WAIVER. To the extent not prohibited by applicable law, Borrower, Guarantors, and Lender waive their right to a trial by jury of any claim or cause of action based upon, arising out of or related to the Agreement and all other documentation evidencing the Obligations, in any legal action or proceeding. Subject to Section 33, any such claim or cause of action shall be tried by court sitting without a jury.

35. NO WAIVER BY LENDER. No delay or omission on the part of Lender in exercising any rights under this Agreement, any related guaranty or applicable law shall operate as a waiver of such right or any other right. Waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any future occasion. All Lender's rights and remedies, whether evidenced hereby or by any other agreement, instrument or paper, shall be cumulative and may be exercised singularly or concurrently.

36. ASSIGNMENT. This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties hereto; provided, however, that Borrower may not assign this Agreement or any rights or duties hereunder without Lender's prior written consent and any prohibited assignment shall be absolutely null and void. No consent to an assignment by Lender shall release Borrower from its Obligations. Lender may assign this Agreement and its rights and duties hereunder and no consent or approval by Borrower is required in connection with any such assignment. Lender reserves the right to sell, assign, transfer, negotiate or grant participations in all or any part of, or any interest in Lender's rights and benefits hereunder. In connection with any assignment or participation, Lender may disclose all documents and information that Lender now or hereafter may have relating to Borrower or Borrower's business. To the extent that Lender assigns its rights and obligations hereunder to another party, Lender thereafter shall be released from such assigned obligations to Borrower and such assignment shall affect a novation between Borrower and such other party. For the avoidance of doubt, Borrower, Guarantors, and Lender and their successors or assigns retain the right to compel arbitration under Section 33 even if they assign any rights under this Agreement to another individual or entity. ODK Capital, LLC (in its capacity as servicer) or a successor servicer (if any) shall, acting solely for this purpose as a non-fiduciary agent of Borrower, maintain at one of its offices in the United States a copy of each assignment agreement delivered to it with respect to this Loan and a register for the recordation of the name of each assignee of this Loan, and principal and interest amount of this Loan owing to, such assignee pursuant to the terms hereof. The entries in such register shall be conclusive, and Borrower, Lender and each such assignee may treat each person whose name is recorded therein pursuant to the terms hereof as a "Lender" hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The register maintained for this Loan shall be available for inspection by Borrower and any such assignee of this Loan, at any reasonable time upon reasonable prior notice to ODK Capital, LLC (in its capacity as servicer) or the applicable successor servicer (if any). This Section 36 shall be construed so that this Loan is at all times maintained in "registered form" within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code and any related Treasury regulations (or any other relevant or successor provisions of the Internal Revenue Code or of such Treasury regulations).

37. INTERPRETATION. Paragraph and section headings used in this Agreement are for convenience only, and shall not affect the construction of this Agreement. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against Lender or Borrower, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of all parties hereto.

38. SEVERABILITY. If one or more provisions of this Agreement (or the application thereof) is determined invalid, illegal or unenforceable in any respect in any jurisdiction, the same shall not invalidate or render illegal or unenforceable such provision (or its application) in any other jurisdiction or any other provision of this Agreement (or its application).

39. NOTICES. Except as otherwise provided in this Agreement, notice under this Agreement must be in writing. Notices will be deemed given when deposited in the U.S. mail, postage prepaid, first class mail; when delivered in person; when sent by registered mail; by certified mail; or by nationally recognized overnight courier; or when sent by electronic mail. Notice to Borrower and/or any personal guarantor will be sent to Borrower's last known address or electronic mail address in Lender's records for this Loan. Notice to Lender may be sent to: OnDeck, 4700 W. Daybreak Pkwy., Suite 200, South Jordan, UT, 84009, Attn: Director of Operations.

Customer: INFINITE GROUP, INC.

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|:---|:---|
| ![](igi_ex108img27.jpg) | BUSINESS LOAN AND SECURITY <br> AGREEMENT |

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40. RECORDKEEPING AND AUDIT REQUIREMENTS. Lender shall have no obligation to maintain any electronic records or any documents, schedules, invoices or any other paper delivered to Lender by Borrower in connection with this Agreement or any other agreement other than as required by law. Borrower will at all times keep accurate and complete records of Borrower's accounts and Collateral. At Lender's request, Borrower shall deliver to Lender: (i) schedules of accounts and general intangibles; and (ii) such other information regarding the Collateral as Lender shall request. Lender, or any of its agents, shall have the right to call any telephone numbers that Borrower has provided or may provide in the future or otherwise in the Lender's possession (including any cellular or mobile telephone numbers) at intervals to be determined by Lender, and without hindrance or delay, to inspect, audit, check, and make extracts from any copies of the books, records, journals, orders, receipts, correspondence that relate to Borrower's accounts and Collateral or other transactions between the parties thereto and the general financial condition of Borrower and Lender may remove any of such records temporarily for the purpose of having copies made thereof. If Borrower was referred to Lender for this Loan by a third party (the "Referring Party"), then Borrower consents to Lender sharing certain reasonable information about Borrower with the Referring Party for purposes of the Referring Party verifying and/or auditing loans made through such Referring Party's referrals.

41. GOVERNING LAW. Subject to Section 33 above, our relationship including this Agreement and any claim, dispute or controversy (whether in contract, tort, or otherwise) at any time arising from or relating to this Agreement is governed by, and this Agreement will be construed in accordance with, applicable federal law and (to the extent not preempted by federal law) Utah law without regard to internal principles of conflict of laws. The legality, enforceability and interpretation of this Agreement and the amounts contracted for, charged and reserved under this Agreement will be governed by such laws. Borrower understands and agrees that (i) Lender is located in Utah, (ii) Lender makes all credit decisions from Lender's office in Utah, (iii) the Loan is made in Utah (that is, no binding contract will be formed until Lender receives and accepts Borrower's signed Agreement in Utah) and (iv) Borrower's payments are not accepted until received by Lender in Utah.

42. WAIVER OF NOTICES AND OTHER TERMS. Except for any notices provided for in this Agreement, Borrower and any person who has obligations pursuant to this Agreement (e.g., a Guarantor), to the extent not prohibited by applicable law hereby, waives demand, notice of nonpayment, notice of intention to accelerate, notice of acceleration, presentment, protest, notice of dishonor and notice of protest. To the extent permitted by applicable law, Borrower and any person who has obligations pursuant to this Agreement also agrees: Lender is not required to file suit, show diligence in collection against Borrower or any person who has obligations pursuant to this Agreement, or proceed against any Collateral; Lender may, but will not be obligated to, substitute, exchange or release any Collateral; Lender may release any Collateral, or fail to realize upon or perfect Lender's security interest in any Collateral; Lender may, but will not be obligated to, sue one or more persons without joining or suing others; and Lender may modify, renew, or extend this Agreement (repeatedly and for any length of time) without notice to or approval by any person who has obligations pursuant to this Agreement (other than the party with whom the modification, renewal or extension is made).

43. Modifications of Payment Schedule. Lender may unilaterally modify the Payment Schedule shown in the accompanying Business Loan and Security Agreement Supplement without prior approval by Borrower or Guarantor, including, but not limited to, extending the repayment term, increasing the total number of payments, or modifying the Payment Amount, so long as the modification does not increase the Total Repayment Amount or the amount of any individual payment above the Payment Amount shown on the Business Loan and Security Agreement Supplement. Any modification of the Payment Schedule will be effective upon notice by Lender to Borrower, which may be provided to Borrower by posting the notice in the online account, communicating the notice via regular mail at the last known address for Borrower, or via electronic mail at the e-mail address of Borrower in Lender's records. Lender may modify the Payment Schedule pursuant to this paragraph without any notice to Guarantor. Borrower and Guarantor agree that any modification to the Payment Schedule under this paragraph shall not affect Borrower's or Guarantor's obligations under this Business Loan and Security Agreement.

44. MONITORING, RECORDING AND ELECTRONIC COMMUNICATIONS. In order to ensure a high quality of service for Lender's customers, Lender may monitor and/or record telephone calls between Borrower and Lender's employees or agents. Borrower acknowledges that Lender may do so and agrees in advance to any such monitoring or recording of telephone calls. Borrower also agrees that Lender may communicate with Borrower electronically by e-mail.

45. CONFIDENTIALITY. Borrower shall not make, publish or otherwise disseminate in any manner a copy of this Agreement or any public statement or description of the terms of this Agreement, except to its employees, advisors and similar persons who have a legitimate need to know its contents.

46. ENTIRE AGREEMENT. Any application Borrower signed or otherwise submitted in connection with the Loan, the accompanying Business Loan and Security Agreement Supplement and the Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits) and any other documents required by Lender now or in the future in connection with this Agreement and Borrower's Loan are hereby incorporated into and made a part of this Agreement. This Agreement is the entire agreement of the parties with respect to the subject matter hereof and supersedes any prior written or verbal communications or instruments relating thereto.

Customer: INFINITE GROUP, INC.

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|:---|:---|
| ![](igi_ex108img28.jpg) | BUSINESS LOAN AND SECURITY <br> AGREEMENT |

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47. COUNTERPARTS; ELECTRONIC SIGNATURES. This Agreement may be executed in one or more counterparts, each of which counterparts shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument. For purposes of the execution of this Agreement, signatures delivered by electronic or fax transmission shall be treated in all respects as original signatures.

48. CUSTOMER SERVICE CONTACT INFORMATION. If you have questions or comments about your Loan, you may contact us by (i) e-mail at support@ondeck.com, (ii) telephone at (888) 269-4246 or (iii) mail at 4700 W. Daybreak Pkwy., Suite 200, South Jordan, UT 84009, Attn: Director of Operations.

49. GRANT OF LICENSE TO USE THE ONDECK PLATFORM. Subject to Borrower's compliance with this Agreement and the Terms of Use for the OnDeck Platform, Lender grants Borrower a nonexclusive, revocable, non-transferable, nonsublicenseable, limited right and royalty-free license to use the OnDeck Platform, effective solely during the term of the Loan and so long as an Event of Default has not occurred. The license granted to Borrower is personal, and no rights hereunder may be transferred by Borrower without the express written approval of Lender. Lender may terminate the license granted hereunder without notice at any time after an Event of Default has occurred.

50. PERSONAL GUARANTY. Each Guarantor, jointly and severally (if more than one), absolutely and unconditionally guarantee the prompt payment to Lender, including its successors and assignees, of any and all Obligations incurred by the Borrower pursuant to the Agreement (this "Personal Guaranty"). Each Guarantor further agrees to repay the Obligations on demand, without requiring Lender first to enforce payment against Borrower. This is a guarantee of payment and not of collection. This is an absolute, unconditional, primary, and continuing obligation and will remain in full force and effect until the first to occur of the following: (a) all of the Obligations have been indefeasibly paid in full, and Lender has terminated this Personal Guaranty, or (b) 30 days after the date on which written notice of revocation is actually received and accepted by Lender. No revocation will affect: (i) the then existing liabilities of the revoking Guarantor under this Personal Guaranty; (ii) Obligations created, contracted, assumed, acquired or incurred prior to the effective date of such revocation; (iii) Obligations created, contracted, assumed, acquired or incurred after the effective date of such revocation pursuant to any agreement entered into or commitment obtained prior to the effective date of such revocation; or (iv) any Obligations then or thereafter arising under the agreements or instruments then in effect and then evidencing the Obligations. Each Guarantor represents and warrants that (i) it is a legal resident of the United States of America and (ii) neither Borrower, nor itself individually as Guarantor, intends to file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within 6 months of the date hereof. Each Guarantor waives all notices to which the Guarantor might otherwise be entitled by law, and also waives all defenses, legal or equitable, otherwise available to the Guarantor. This Personal Guaranty shall be construed in accordance with the laws of the State of Utah, and shall inure to the benefit of Lender, its successors and assigns. To the extent not prohibited by applicable law, each of the undersigned Guarantors waives its right to a trial by jury of any claim or cause of action based upon, arising out of or related to this guaranty, the Agreement and all other documentation evidencing the Obligations, in any legal action or proceeding. Subject to Section 33 above, any such claim or cause of action shall be tried by court sitting without a jury.

51. CERTIFICATION AND SIGNATURES. By executing this Agreement or authorizing the person signing or affirming below to execute on its behalf, Borrower certifies that Borrower has received a copy of this Agreement and that Borrower has read, understood and agreed to be bound by its terms. Each person signing or affirming below certifies that each person is signing on behalf of the Borrower and/or in the capacity indicated below the signer's name (and if Borrower is a sole proprietorship, in the capacity of the owner of such sole proprietorship) and that such signer is authorized to execute this Agreement on behalf of or the in stated relation to Borrower.

<u>Use of Proceeds Certification</u>

As referred to in Section 4, by signing or affirming below, the Borrower certifies, acknowledges and understands that the proceeds from the requested Loan will be used solely for purchasing or acquiring specific products or services, for the following purposes only:

- specified merchandise

- insurance (but not self-insurance programs)

- services or equipment

- inventory or other specified goods

- loans to finance specified sales transactions

- public works projects or educational services (e.g., training)

Customer: INFINITE GROUP, INC.

This Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits) is part of (and incorporated by reference into) the Business Loan and Security Agreement. Borrower should keep this important legal document for Borrower's records.

DISBURSEMENT OF LOAN PROCEEDS. By executing this Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits), Borrower authorizes Lender to disburse the Loan proceeds less the amount of any applicable fees and in accordance with the Loan Proceeds Disbursement Authorization, if any, upon Loan approval by initiating an ACH credit, wire transfer or similar means to the checking account indicated herein (or a substitute checking account Borrower later identifies and is acceptable to Lender) (hereinafter referred to as the "Designated Checking Account") in the disbursal amount set forth in the accompanying Business Loan and Security Agreement Supplement less any amounts owed to Lender from a prior loan or used to pay off an amount owed to a third party lender. This authorization is to remain in full force and effect until Lender has received written notification from Borrower of its termination in such time and in such manner as to afford Lender and Borrower's depository bank a reasonable opportunity to act on it.

AUTOMATIC PAYMENT PLAN. Enrollment in Lender's Automatic Payment Plan is required for Loan approval. By executing this Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits), Borrower agrees to, and hereby, enrolls in the Automatic Payment Plan and authorizes Lender to collect payments required under the terms of Borrower's Business Loan and Security Agreement by initiating ACH debit entries to the Designated Checking Account in the amounts and on the dates provided in the payment schedule set forth in the accompanying Business Loan and Security Agreement Supplement. Borrower authorizes Lender to resubmit any returned or failed ACH Debt for any previously scheduled payment(s) that was not paid as provided in the Payment Schedule, as permitted by law and network rules. This authorization is to remain in full force and effect until Lender has received written notification from Borrower of its termination no less than three business days before a scheduled payment. Lender may suspend or terminate Borrower's enrollment in the Automatic Payment Plan immediately if Borrower fails to keep Borrower's designated checking account in good standing or if there are insufficient funds in Borrower's checking account to process any payment (or if Lender is otherwise unable to collect any amounts by ACH debit owed to Lender under the Loan or under any other loan or extension of credit by Lender to Borrower). If Borrower revokes the authorization or Lender suspends or terminates Borrower's enrollment in the Automatic Payment Plan, Borrower still will be responsible for making timely payments pursuant to the alternative payment methods described in the Business Loan and Security Agreement.

Modification of Payment Schedule. Borrower and Guarantor agree that Lender may unilaterally modify the agreed Payment Schedule pursuant to Paragraph 43 of the Business Loan and Security Agreement. Enrollment in Lender's Automatic Payment Plan authorizes Lender to debit the Designated Checking Account under Lender's Automatic Payment Plan pursuant to any modified Payment Schedule made in accordance with Paragraph 43 of the Business Loan and Security Agreement.

Provisional Payment. Credit given by us to you with respect to an automated clearing house ("ACH") credit entry is provisional until we receive final settlement for such entry through a Federal Reserve Bank. If we do not receive such final settlement, you are hereby notified and agree that we are entitled to a refund of the amount credited to you in connection with such entry, and the party making to you via such entry (i.e. the originator of the entry) shall not be deemed to have paid you in the amount of such entry.

ACH Authorization for Material Misrepresentations. In the event that we determine that you made any material misrepresentation in your application (including, but not limited to, misrepresenting your business revenue, altering bank statements, misrepresenting the purpose of the funds, etc.) you authorize Lender to debit the Designated Checking Account the full Disbursement Amount identified in the Business Loan and Security Agreement Supplement. In the event that Lender exercises this option and debits the Disbursement Amount from your Designated Checking Account, you agree that all other terms of the Business Loan and Security Agreement, including the Arbitration Agreement and Class Action Waiver, shall remain in full force and effect.

Notice of Receipt of Entry. Under the operating rules of the National Automated Clearing House Association, which are applicable to ACH transactions involving your account, we are not required to give next day notice to you of receipt of an ACH item and we will not do so. However, we will continue to notify you of the receipt of payments in the periodic statement we provide to you.

BUSINESS PURPOSE ACCOUNT. By executing this Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits), Borrower attests that the Designated Checking Account was established for business purposes and not primarily for personal, family or household purposes.

ACCOUNT CHANGES. Borrower agrees to promptly notify Lender in writing if there are any changes to the account and routing numbers of the Designated Checking Account.

MISCELLANEOUS. Lender is not responsible for any fees charged by Borrower's bank as the result of credits or debits initiated under this agreement. The origination of ACH transactions to Borrower's account must comply with the provisions of U.S. law. Borrower agrees to be bound by NACHA rules of the Electronic Payments Association.

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|:---|:---|:---|:---|
| Routing Number: | XXXXXXXXX | Account Number: | XXXX |
| Tax ID: | XXXXXXXXX |  |  |
| By: | James Villa |  |  |
|  | (Signature) |  |  |
| Name: | James Villa |  |  |
| Date: | 2025-09-22 |  |  |

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Signature Page

I hereby, as a duly authorized agent of Borrower, and in my individual and personal capacity as Guarantor, affirm that I have read and understand the terms and conditions of, consent to, and agree to be bound by, the Business Loan and Security Agreement (inclusive of the Guaranty and Arbitration Agreement therein), the accompanying Business Loan and Security Agreement Supplement, and the accompanying Authorization Agreement for Direct Deposit (ACH Credits) and Direct Payments (ACH Debits).

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| | | | |
|:---|:---|:---|:---|
| Guarantor #1:  | James Villa | Borrower:  | INFINITE GROUP, INC. |
|  | (Signature) | By:  | James Villa |
| Name: | James Villa |  | (Signature) |
|  |  | Name: | James Villa |
| Date:  | 2025-09-22 | Date: | 2025-09-22 |
| Guarantor #2: |  | By: |  |
|  | (Signature) |  | (Signature) |
| Name: |  | Name: |  |
| Date: |  | Date: |  |
| Guarantor #3: |  | By: |  |
|  | (Signature) |  | (Signature) |
| Name: |  | Name: |  |
| Date: |  | Date: |  |

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|:---|:---|
| <u>For Lender's Use Only</u>: This Agreement has been received and accepted by Lender in Utah after being signed by Borrower and any Guarantor(s). | <u>For Lender's Use Only</u>: This Agreement has been received and accepted by Lender in Utah after being signed by Borrower and any Guarantor(s). |
| By: | Adrian Ropisan |
|  | (Signature)<br> Adrian Ropisan |
|  | (Name) |
| Date:  | 2025-09-22 |

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## Exhibit 31.1

**EXHIBIT 31.1**

**CERTIFICATION**

I, James Villa, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Infinite Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: October 31, 2025

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| |
|:---|
| /s/ James Villa |
| James Villa |
| Chief Executive Officer |
| (Principal Executive Officer) |

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## Exhibit 31.2

**EXHIBIT 31.2**

**CERTIFICATION**

I, Richard Glickman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Infinite Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: October 31, 2025

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|:---|
| /s/ Richard Glickman |
| Richard Glickman |
| VP Finance and Chief Accounting Officer |
| (Principal Financial and Accounting Officer) |

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## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATION PURSUANT TO** 

**18 U.S.C. SECTION 1350,** 

**AS ADOPTED PURSUANT TO** 

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the quarterly report of Infinite Group, Inc. (the "Company") on Form 10-Q for the period ending September 30, 2023 as filed with the Securities and Exchange Commission ("SEC") on the date hereof (the "Report"), I, James Villa, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Dated: October 31, 2025

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| |
|:---|
| /s/ James Villa |
| James Villa |
| Chief Executive Officer |
| (Principal Executive Officer) |

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## Exhibit 32.2

**EXHIBIT 32.2**

**CERTIFICATION PURSUANT TO** 

**18 U.S.C. SECTION 1350,** 

**AS ADOPTED PURSUANT TO** 

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the quarterly report of Infinite Group, Inc. (the "Company") on Form 10-Q for the period ending September 30, 2023 as filed with the Securities and Exchange Commission ("SEC") on the date hereof (the "Report"), I, Richard Glickman, VP Finance and Chief Accounting Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Dated: October 31, 2025

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| |
|:---|
| /s/ Richard Glickman |
| Richard Glickman |
| VP Finance and Chief Accounting Officer |
| (Principal Financial and Accounting Officer) |

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