Document:

EXHIBIT 10.27

                       MEDSTRONG INTERNATIONAL CORPORATION
                      AMENDMENT TO STOCK OPTION AGREEMENTS

         Amendment (this "Amendment"), dated November 3, 2006, to the following
Stock Option Agreements (the "Agreements"), the form of which is attached
hereto, between Medstrong International Corporation, a Delaware corporation (the
"Company"), and Jeanine M. Folz ("Optionee"):

Date of Agreement No. of Shares    Per Share Exercise Price      Option Period
----------------- -------------    ------------------------      -------------
November 16, 2004 250,000                   $.05                   10 years
February 14, 2005 250,000                   $.05                   10 years
May 15, 2005      250,000                   $.05                   10 years
August 15, 2005   250,000                   $.021                  10 years
November 15, 2005 250,000                   $.02                   10 years
February 15, 2006 250,000                   $.02                   10 years
May 16, 2006      250,000                   $.02                   10 years
August 16, 2006   250,000                   $.02                   10 years

WITNESSETH:

         WHEREAS, the Agreements provided for the grant of options (the
"Options") to Optionee to purchase an aggregate of Two Million (2,000,000)
shares of the Company's Common Stock, par value $.0001 per share ("Common
Stock"), issued pursuant to the Company's 2002 Stock Option Plan (the "Plan");
and

         WHEREAS, by reason of the 1 for 75 reverse split of the Common Stock
effective November 2, 2006, the number of shares of Common Stock covered by each
Option is reduced by a factor of 75, the aggregate exercise price of each Option
remaining the same; and

         WHEREAS, due to adverse consequences of Options to Optionee, the
Company and Optionee have agreed to amend the Agreements providing for the grant
of the Options to permit each of the Options to be exercised by Optionee during
the full term thereof following termination of the employment of Optionee with
the Company.

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<PAGE>

         NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the Company and the
Optionee, the parties hereto agree as follows:

Section 1. Amendment. The parties hereby agree to amend Sections 2 and 3 of the
Agreement to read in their entirety as follows:

         "2. The Options are exercisable immediately. The Options shall expire
on the date ten (10) years after they become exercisable, the date which has
been specified by the Board of Directors, and shall not be exercisable after
their expiration date. The Options shall be exercisable by you from time to
time, until all shares covered hereby shall have been purchased or expired.

         3. The Options are fully transferable by you. In the event of your
death, the Options may be exercised by the estate, personal representative or
beneficiary who has acquired the right to exercise the Options by bequest or
inheritance or by the reason of your death, and then only if, and to the extent
that, you were entitled to exercise the Options at the date of your death, up to
the maximum exercise period of one (1) year."

Section 2. Miscellaneous.

         2.1 Limited Effect. Except as expressly amended and modified by this
Amendment, all of the terms and provisions of the Agreements are and shall
continue to remain in full force and effect in accordance with the terms
thereof.

         2.2 Counterparts. This Amendment may be executed by one or more of the
parties hereto in any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

         2.3 Entire Agreement. This Amendment constitutes the entire agreement
of the parties with respect to the subject matter hereof and supersedes in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof.

                                       33
<PAGE>

         2.4 Governing Law. This Amendment shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction.

         IN WITNESS HEREOF, the Company, by its duly authorized officer, and the
Optionee have caused this Amendment to be executed as of the day and year first
above written.

                                    COMPANY:

                                         MEDSTRONG INTERNATIONAL CORPORATION

                                                     /s/ Robert M. Cohen
                                                 By:---------------------------
                                                 Title: Secretary and Director

                                         OPTIONEE:

                                         /s/ Jeanine Folz
                                         ------------------------
                                         Jeanine M. Folz

                                       34
<PAGE>

      5.    ATTACHMENT to Stock Option Agreement Amendment

      6.    MedStrong International Corporation

      7.    STOCK OPTION AGREEMENT

DATE:
Optionee:   Jeanine Marie Folz

Option to Purchase Aggregate Number of Shares:
Price Per Share:                                                       $______
Date of Grant:

                  1.  MedStrong   International   Corporation  (the  "Company"),
deeming it in its best  interest  that you  continue to provide  services to the
Company,  and as an  incentive  for you to do so and to give  you an  increasing
interest in the Company as stockholder,  hereby gives and grants you, subject to
all of the provisions, terms and conditions contained in MedStrong International
Corporation's  2002 Stock Option Plan, as amended from time to time (as amended,
the  "Plan"),  and  subject to its further  provisions,  the right and option to
purchase up to the  aggregate  number of shares set forth above of the Company's
common stock, par value $.001 per share (the "Common  Stock"),  at the price per
share also set forth above (the "Options").  The per share purchase price is not
less than the fair market  value per share of Common Stock on the date the grant
of the Options was approved by the Board of Directors (the "Date of Grant").

         2.  The  Options  are  exercisable  immediately.   Subject  to  earlier
termination  as provided in the Plan,  the Options  shall expire on the date ten
(10) years after they become  exercisable,  the date which has been specified by
the Board of  Directors,  and shall not be  exercisable  after their  expiration
date.  On  condition  that  you  remain  in the  employ  of the  Company  or any
subsidiary  thereof during such period,  the Options shall be exercisable by you
from time to time,  until all shares covered hereby shall have been purchased or
expired.

         3. The  Options  shall be  exercisable  by you  only  while  you are an
employee of the Company or any subsidiary thereof, or within ninety (90) days of
after  termination of your  employment for any reason except for  termination of
your employment due to disability  within the meaning of Section 22(e)(3) of the
Internal Revenue Code, in which case the Options shall be exercisable by you for
a period of one (1) year after the date of such termination, but only if, and to
the  extent  that,  the  Options  were  exercisable  by you at the  time of such
termination.  The Options are exercisable only by you and is not transferable by
you, other than by will or by the laws of descent and distribution. In the event
of your  death  while  you are an  employee  of the  Company  or any  subsidiary
thereof, the Options may be exercised by the estate,  personal representative or
beneficiary  who has  acquired  the right to exercise  the Options by bequest or
inheritance or by the reason of your death,  and then only if, and to the extent
that, you were entitled to exercise the Options at the date of your death, up to
the maximum exercise period of one (1) year.

                                       35
<PAGE>

4. The Options (or any part of installment  thereof) must be exercised by giving
written notice to the Company's Chief Executive  Officer at its principal office
address,  or to such transfer  agent as the Company's  Chief  Executive  Officer
shall designate.  The notice, the form of which is attached hereto as Exhibit B,
must  specify  the date of the  notice,  the  number  of  shares as to which the
Options are being  exercised  and the  expected  date of such  purchase  (which,
unless the Company otherwise  consents,  shall be at least five (5) days and not
more than fifteen (15) days after the date you mail the notice). The notice must
be  accompanied by the tender of payment of the purchase price for the number of
shares  specified  in the notice.  Payment  must be made (a) in cash,  or (b) by
certified  check,  or (c) with  previously  acquired Common Stock of the Company
having a fair  market  value  equal to the  purchase  price of the shares  being
purchased,  or (d) any combination  thereof, or (e) any other method approved by
the Board of Directors in its discretion. If the Board of Directors exercise its
discretion  to permit  payment  by means  other  than the  methods  set forth in
clauses (a), (b), (c) or (d), such discretion must be exercised in writing prior
to the time you exercise the Options.

5. Upon payment of the purchase price of the shares specified in the notice, the
Company shall deliver to you certificates for the shares  purchased.  The holder
of the Options  shall not have the rights of a  shareholder  with respect to the
shares covered by the Options until the date of the stock certificates issued to
the holder for such shares.

6. You may be required to make an appropriate  representation at the time of any
exercise of the Options  that it is your  intention  to acquire the shares being
purchased for investment and not for resale or  distribution.  In addition,  you
may be required to agree in writing not to sell any shares acquired  pursuant to
the  Options or any other  shares of the Company  that you may now or  hereafter
acquire  except either (a) in  compliance  with the  Securities  Act of 1933, as
amended,  provided  that the Company  shall be under no  obligation  to register
either the Plan or any  securities  obtained  pursuant to your  exercise of your
rights,  hereunder,  with the  Securities and Exchange  Commission,  or (b) with
prior written  approval of the Company.  An appropriate  legend  restricting the
sale of the shares may be placed upon the  certificates  representing the shares
and any  resale  must be in  compliance  with the  Securities  Act of  1933,  as
amended, and the rules and regulations thereunder.

7. If you dispose of the shares you acquire  upon  exercise of the Options  more
than (x) two (2) years after the grant of the Options and (y) one (1) year after
the exercise of the Options,  any gain or loss upon  disposition will be treated
as long-term  capital gain or loss. If these holding  periods are not satisfied,
you will  recognize  ordinary  income  at the time of  disposition  equal to the
difference  between the exercise price and the lower of the fair market value of
the  shares at the date the  Options  were  exercised  or the sale  price of the
shares. Any gain or loss recognized on a premature  disposition of the shares in
excess of the amount treated as ordinary  income will be treated as long-term or
short-term  capital gain or loss,  depending on the holding period.  A different
rule for measuring ordinary income upon a premature disposition may apply if you
are an officer,  director, or 10% stockholder of the Company. You recognize that
if you sell any shares acquired upon the exercise of the Options within one year
after your  exercise of the Options,  the tax treatment of the  disposition  may
have an adverse  impact on you and you should  consult your personal tax advisor
before making any such sales.

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<PAGE>

8. This  agreement  shall be binding  upon and shall inure to the benefit of any
successors or assigns of the Company, and, to the extent herein provided,  shall
be binding upon and inure to the benefit of your legal representatives.

9. The Option is not,  and should not be deemed to be, an  employment  agreement
between you and the  Company,  and nothing  contained  herein shall be deemed to
confer  upon  you any  right to  remain  in the  employ  of the  Company  or any
subsidiary  thereof, or in any way to limit the right of the Company or any such
subsidiary to terminate your employment.

10. If the foregoing is in accordance  with your  understanding  and approved by
you,  please so confirm by signing and  returning  the  duplicate of this letter
enclosed for that purpose.

Very truly yours,

MEDSTRONG INTERNATIONAL CORPORATION

Date: November 16, 2004             By:
                                       ---------------------------

         I  hereby  confirm  that  the  foregoing  is  in  accordance   with  my
understanding  and is hereby  agreed and accepted in its entirety as of the date
of the above letter.

By:
   ----------------------------------------
         NAME

Date:
     --------------------------------------

                                       37
<PAGE>

Exhibit B

         Form of Exercise Notice

MedStrong International Corporation                Date: _______________________
350 Bedford Street, Suite 203
Stamford, CT 06901
Attention:  Chief Executive Officer

The undersigned hereby: (1) irrevocably subscribes for and offers to purchase
__________________ of common stock of MedStrong International Corporation
pursuant to, and in exercise of, the options granted to the undersigned on
_________________; and (2) encloses payment of _______________________
($_________) for these shares at a purchase price of $_________ per share.

The shares should be issued be issued in the name of ___________________ and
should delivered to such holder at:

-------------------------------------------------------------------------

-------------------------------------------------------------------------
[insert address]

Signature:
          ---------------------------------------------------------------

Print Name:
           --------------------------------------------------------------

Social Security Number:
                       --------------------------------------------------

                                       38Exhibit 10.1

                      IN THE UNITED STATES BANKRUPTCY COURT
                          FOR THE DISTRICT OF DELAWARE

In re:                                          )   Chapter 11
                                                )
DELTA MILLS, INC., et al.                       )   Case No. 06-11144 (CSS)
                   ------                       )
                                                )
                  Debtors.                      )
                                                )   Re: Docket Nos. 11 and 27

FINAL ORDER (A) AUTHORIZING DEBTORS TO OBTAIN POST-PETITION FINANCING AND GRANT
 SECURITY INTERESTS AND SUPERPRIORITY ADMINISTRATIVE EXPENSE STATUS PURSUANT TO
  11 U.S.C. ss.ss. 105 AND 364(c); (B) MODIFYING THE AUTOMATIC STAY PURSUANT TO
  11 U.S.C. ss. 362; AND (C) AUTHORIZING DEBTORS TO ENTER INTO AGREEMENTS WITH
                           GMAC COMMERCIAL FINANCE LLC

     Upon the motion (the  "Motion"),  dated  October 13, 2006,  of Delta Mills,
Inc. ("Borrower") and Delta Mills Marketing, Inc. ("Guarantor" and together with
Borrower, each individually,  a "Debtor" and collectively,  the "Debtors"), each
as a Debtor and  Debtor-in-Possession  in the  above-captioned  Chapter 11 cases
(collectively,  the "Cases"),  pursuant to Sections  105,  361, 362,  364(c)(1),
364(c)(2) and 364(c)(3) of title 11 of the United States Code, 11 U.S.C.  ss.ss.
101, et seq. (the "Bankruptcy  Code") and Rules 2002,  4001(c),  and 9014 of the
Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"),  seeking,  among
other things:

          (1) authorization for Borrower to obtain post-petition loans, advances
and other financial accommodations from GMAC Commercial Finance LLC ("GMAC"), in
its capacity as agent (in such capacity, "Agent") for itself and other financial
institutions  from  time to time  party to the Loan  Agreement  (as  hereinafter
defined)  as lenders  (together  with Agent,  collectively,  the  "Lenders")  in
accordance with all of the lending formulae, sublimits, terms and conditions set
forth in the Existing Loan Agreement (as  hereinafter  defined),  as amended and
ratified  by  the  Ratification  Agreement  (as  hereinafter  defined),  and  in
accordance with this Order,  secured by security interests in and liens upon all
of the Collateral (as hereinafter  defined)  pursuant to Sections  364(c)(2) and
364(c)(3) of the Bankruptcy Code;

          (2)  authorization  for  Borrower  to  sell  certain  of its  accounts
receivable to GMAC, in its capacity as factor (in such capacity, "Factor") under

<PAGE>

the Factoring Agreement (as hereinafter  defined),  in accordance with the terms
and conditions of the Existing Factoring Agreements (as hereinafter defined), as
amended and ratified by the Ratification Agreement and this Order, and to secure
any Factoring  Obligations (as hereinafter defined) by security interests in and
liens upon all of the Factoring  Collateral (as hereinafter defined) pursuant to
sections 364(c)(2) and 364(c)(3) of the Bankruptcy Code.

          (3)  authorization  for  Debtors to  continue to comply with and fully
perform  under  the  Ratification  and  Amendment  Agreement,  dated on or about
October  16,  2006 (the  "Ratification  Agreement",  a copy of which is  annexed
hereto as Exhibit "A" and is incorporated herein), by and among Debtors,  Agent,
Lenders and Factor, which ratifies, extends, adopts and amends the Existing Loan
Agreement,  Existing Factoring Agreement and the other existing loan,  financing
and  security  agreements  by and  among  Debtors,  Agent,  Lenders  and  Factor
(capitalized terms not otherwise defined in this Order shall have the respective
meanings  ascribed  thereto in the  Existing  Loan  Agreement,  as  amended  and
ratified by the Ratification Agreement);

          (4)  modification of the automatic stay to the extent  hereinafter set
forth;

          (5) the  grant to  Agent,  for the  benefit  of  itself  and the other
Lenders,  of  super-priority  administrative  claim  status  pursuant to section
364(c)(1) of the Bankruptcy  Code in respect of all  Obligations  (as defined in
the Ratification Agreement); and

          (6) the grant to Factor of super-priority  administrative claim status
pursuant  to  section  364(c)(1)  of  the  Bankruptcy  Code  in  respect  of all
Obligations (as defined in the Ratification Agreement).

     It  appearing  that due and  appropriate  notice of the Motion,  the relief
requested  therein,  and the Final  Hearing  (as defined  below) (the  "Notice")
having been served by the Debtors in  accordance  with Rule 4001(c) on (i) Agent
and Lenders,  (ii) Factor,  (iii) the United States  Trustee for the District of
Delaware  (the "U.S.  Trustee"),  (iv) the  holders of the twenty  (20)  largest
unsecured claims against the Debtors'  estates on a consolidated  basis (the "20
Largest Unsecured  Creditors"),  (v) Stroock & Stroock & Lavan LLP as counsel to
the Committee (as defined below); (vi) The Bank of New York, as trustee (in such

                                       2
<PAGE>

capacity, the "Note Trustee") for the holders of the Borrower's 9 5/8% Notes due
2007 (the  "Noteholders"),  (vii)  counsel for the Debtors,  (viii) the Internal
Revenue Service,  (ix) Wachovia Bank, National Association (the "Blocked Account
Bank"),  (x) all  appropriate  state  taxing  authorities,  (xi) all  landlords,
owners,  and/or  operators  of premises at which any of the  Debtors'  inventory
and/or equipment is located,  and (xii) certain other parties  identified in the
certificate of service filed with the Court, including,  without limitation, all
creditors who have filed or recorded  pre-petition  liens or security  interests
against any of the Debtors' assets (collectively, the "Noticed Parties").

     The initial hearing on the Motion having been held by this Court on October
13, 2006 (the "Interim  Hearing") and the final hearing having been held by this
Court on October 31, 2006 (the "Final Hearing").

     Upon the record at the Interim Hearing and the Final Hearing, including the
Motion,  and the filings and  pleadings  in the Cases,  and good and  sufficient
cause appearing therefor;

     THE COURT HEREBY MAKES THE FOLLOWING  FINDINGS OF FACT AND  CONCLUSIONS  OF
LAW:

     A. Petition. On October 13, 2006 (the "Petition Date"), each Debtor filed a
voluntary petition (the "Petition") under Chapter 11 of the Bankruptcy Code. The
Debtors  continue to operate  their  businesses  and manage their  properties as
debtors-in-possession  pursuant to Sections  1107(a) and 1108 of the  Bankruptcy
Code.

     B.  Jurisdiction  and Venue.  The Court has jurisdiction of this proceeding
and the parties and property affected hereby pursuant to 28 U.S.C. ss.ss. 157(b)
and 1334.  The  Motion  is a "core"  proceeding  as  defined  in 28  U.S.C.  ss.
157(b)(2)(A),  (D), and (M).  Venue of the Cases and the Motion in this Court is
proper pursuant to 28 U.S.C. ss.ss. 1408 and 1409.

     C. Notice. Under the circumstances,  the Notice given by the Debtors of the
Motion, the Interim Hearing, the Final Hearing and the relief granted under this
Order constitutes due and sufficient notice thereof and complies with Bankruptcy
Rule 4001(c).

                                       3
<PAGE>

     D. Debtors'  Acknowledgments and Agreements.  The Debtors admit, stipulate,
acknowledge and agree that:

               (i)   Pre-Petition   Factoring   Arrangements.   Prior   to   the
commencement of the Cases,  Factor provided factoring  arrangements to Borrower,
secured by  certain  assets  and  properties  of Debtors as set forth in (1) the
Amended and Restated Factoring Agreement (Collection), dated as of May 30, 2006,
by  and  between  Borrower  and  Factor  (the  "Existing   Factoring   Agreement
(Collection)");  (2) the Amended and Restated  Factoring  Agreement  (Maturity),
dated as of May 30,  2006,  by and between  Borrower  and Factor (the  "Existing
Factoring  Agreement  (Maturity)",  and  together  with the  Existing  Factoring
Agreement  (Collection),  as each of the  same  have  heretofore  been  amended,
supplemented,  modified,  extended, renewed and/or replaced at any time prior to
the Petition Date,  collectively  referred to herein as the "Existing  Factoring
Agreement");  and (3) all other agreements,  documents, and instruments executed
and/or delivered with, to, or in favor of Factor, including, without limitation,
the Amended and Restated Assignment of Factoring  Proceeds,  dated as of May 30,
2006, by and among Borrower,  Agent and Factor (the "Intercreditor  Agreement"),
and  all  other  security  agreements,  notes,  guarantees,  mortgages,  Uniform
Commercial Code ("UCC") financing  statements and all other related  agreements,
documents and instruments  executed and/or delivered in connection  therewith or
related  thereto (all of the  foregoing,  together  with the Existing  Factoring
Agreement,  as all of the  same  have  heretofore  been  amended,  supplemented,
modified,  extended,  renewed, restated and/or replaced at any time prior to the
Petition Date, collectively, the "Pre-Petition Factoring Agreements"). Copies of
the operative  Pre-Petition  Factoring  Agreements  are contained in the Exhibit
Supplement to the Motion (the "Exhibit Supplement").

               (ii)  Pre-Petition   Factoring  Obligations  Amount.  As  of  the
Petition  Date,  Borrower was indebted to Factor in respect of all  Pre-Petition
Factoring  Obligations  (as  defined in the  Ratification  Agreement),  plus all
interest accrued and accruing thereon,  together with all costs, expenses, fees,
commissions  (including  attorneys'  fees and legal  expenses) and other charges
accrued, accruing or chargeable with respect thereto (collectively, as such term
is more  defined in the  Ratification  Agreement,  the  "Pre-Petition  Factoring

                                       4
<PAGE>

Obligations").(1)  The Pre-Petition  Factoring  Obligations  constitute allowed,
legal, valid,  binding,  enforceable and non-avoidable  obligations of Borrower,
and  are  not  subject  to  any  offset,   defense,   counterclaim,   avoidance,
recharacterization or subordination pursuant to the Bankruptcy Code or any other
applicable  law,  and  Debtors  do not  possess  and shall not assert any claim,
counterclaim,  setoff or defense of any kind,  nature or description which would
in any way affect the validity,  enforceability and  non-avoidability  of any of
the Pre-Petition Factoring Obligations.

               (iii) Pre-Petition Factoring Collateral. As of the Petition Date,
the  Pre-Petition  Factoring  Obligations  were fully  secured  pursuant  to the
Pre-Petition   Factoring  Agreements  by  valid,   perfected,   enforceable  and
non-avoidable first priority security interests and liens granted by Borrower to
Factor  upon all of the  Pre-Petition  Factoring  Collateral  (as defined in the
Ratification Agreement) and all issues,  profits,  proceeds and products thereof
(collectively,  together  with any other  property  of the  Debtors'  bankruptcy
estates in which a security  interest or lien was granted to Factor prior to the
Petition  Date,  and as such  term is more  fully  defined  in the  Ratification
Agreement,  the "Pre-Petition Factoring Collateral"),  subject only to the liens
specifically permitted under the Existing Factoring Agreement to the extent that
such  encumbrances are (a) valid,  perfected,  and unavoidable liens or security
interests  existing as of the Petition Date, and (b) senior to and have not been
subordinated  to Factor's  liens on and security  interests in the  Pre-Petition
Factoring  Collateral,  and,  in each  instance,  only for so long as and to the
extent that such encumbrances are and remain senior and outstanding (hereinafter
referred  to as the  "Factoring  Permitted  Encumbrances").  The  Debtors do not
possess  and will not assert any claim,  counterclaim,  setoff or defense of any
kind,  nature  or  description  which  would  in any way  affect  the  validity,
enforceability  and  non-avoidability  of any of Factor's  liens,  claims and/or
security interest in the Pre-Petition Factoring Collateral.

------------------
(1) The term "Pre-Petition Factoring Obligations" as defined and used in this
Order is more fully defined in the Ratification Agreement, which definition of
such term is incorporated herein.

                                       5
<PAGE>

               (iv) Pre-Petition  Credit Facility.  Prior to the commencement of
the Cases,  Agent and Lenders made loans,  advances  and  provided  other credit
accommodations  to Borrower  pursuant to the terms and  conditions set forth in:
(1) the Amended and Restated Revolving Credit, Term Loan and Security Agreement,
dated as of May 30, 2006, by and among  Borrower,  Agent and Lender (as the same
has heretofore been amended, supplemented, modified, extended, renewed, restated
and/or  replaced at any time prior to the  Petition  Date,  the  "Existing  Loan
Agreement");  and (2) all other agreements,  documents and instruments  executed
and/or delivered with, to, or in favor of Agent and Lenders, including,  without
limitation,  all security  agreements,  notes,  guarantees,  mortgages,  Uniform
Commercial Code ("UCC") financing  statements and all other related  agreements,
documents and instruments  executed and/or delivered in connection  therewith or
related  thereto  (all  of  the  foregoing,  together  with  the  Existing  Loan
Agreement,  as all of the  same  have  heretofore  been  amended,  supplemented,
modified,  extended,  renewed, restated and/or replaced at any time prior to the
Petition Date, collectively, the "Pre-Petition Financing Agreements"). Copies of
the operative  Pre-Petition  Financing  Agreements  are contained in the Exhibit
Supplement.

               (v) Pre-Petition Obligations Amount. As of the Petition Date, the
aggregate amount of all Advances and other Pre-Petition  Obligations (as defined
in the  Ratification  Agreement) owed by Borrower to Agent and Lenders under and
in  connection  with the  Pre-Petition  Financing  Agreements  was not less than
$20,943,720,   consisting  of  (A)  Revolving  Advances  made  pursuant  to  the
Pre-Petition  Financing Agreements in the aggregate principal amount of not less
than $19,957,310, plus interest accrued and accruing thereon, and (B) Letters of
Credit in the  aggregate  face amount of not less than  $986,410,  plus interest
accrued and accruing thereon,  and in each of the foregoing clauses (A) and (B),
together with all costs,  fees,  expenses  (including  attorneys' fees and legal
expenses)  and other  charges  accrued,  accruing,  or  chargeable  with respect

                                       6
<PAGE>

thereto  (collectively,   and  as  such  term  is  more  fully  defined  in  the
Ratification  Agreement,  the "Pre-Petition  Obligations").(2)  The Pre-Petition
Obligations   constitute  allowed,   legal,  valid,  binding,   enforceable  and
non-avoidable  obligations  of  Borrower,  and are not  subject  to any  offset,
defense, counterclaim,  avoidance,  recharacterization or subordination pursuant
to the Bankruptcy  Code or any other  applicable law, and Debtors do not possess
and shall not  assert any  claim,  counterclaim,  setoff or defense of any kind,
nature or description which would in any way affect the validity, enforceability
and non-avoidability of any of the Pre-Petition Obligations.

               (vi)  Pre-Petition  Collateral.  As of  the  Petition  Date,  the
Pre-Petition  Obligations  were  fully  secured  pursuant  to  the  Pre-Petition
Financing  Agreements by valid,  perfected,  enforceable and non-avoidable first
priority  security  interests  and liens  granted by  Debtors to Agent,  for the
benefit of itself and the other Lenders, upon all of the Pre-Petition Collateral
(as defined in the Ratification Agreement) and all issues, profits, proceeds and
products thereof (collectively, together with any other property of the Debtors'
bankruptcy estates in which a security interest or lien was granted to Agent and
Lenders  prior to the Petition  Date,  and as such term is more fully defined in
the Ratification Agreement, the "Pre-Petition Collateral"),  subject only to the
liens  specifically  listed on Schedule  1.2 of the Existing  Loan  Agreement or
permitted  under Section 7.2 of the Existing  Loan  Agreement to the extent that
such  encumbrances are (a) valid,  perfected,  and unavoidable liens or security
interests  existing as of the Petition Date, and (b) senior to and have not been
subordinated  to Agent's and  Lenders'  liens on and  security  interests in the
Pre-Petition  Collateral,  and, in each instance, only for so long as and to the
extent that such encumbrances are and remain senior and outstanding (hereinafter
referred to as the "Lending Permitted Encumbrances"). The Debtors do not possess
and will not  assert  any  claim,  counterclaim,  setoff or defense of any kind,
nature or description which would in any way affect the validity, enforceability
and  non-avoidability  of any of  Agent's  and  Lenders'  liens,  claims  and/or
security interests in the Pre-Petition Collateral.

------------------

(1) The term  "Pre-Petition  Obligations"  as defined  and used in this Order is
more fully defined in the Ratification Agreement,  which definition of such term
is incorporated herein.

                                       7
<PAGE>

               (vii)   Pre-Petition   Factoring   Debt   Proof  of  Claim.   The
acknowledgment  by Debtors of the  Pre-Petition  Factoring  Obligations  and the
liens,  rights,  priorities and protections  granted to or in favor of Factor as
set  forth  herein  and  in  the  Pre-Petition  Factoring  Agreements  shall  be
considered a timely filed proof of claim on behalf of Factor in these Cases.

               (viii)   Pre-Petition   Lending   Debt   Proof  of   Claim.   The
acknowledgment by Debtors of the Pre-Petition Obligations and the liens, rights,
priorities  and  protections  granted to or in favor of Agent and Lenders as set
forth herein and in the Pre-Petition  Financing Agreements shall be considered a
timely filed proof of claim on behalf of Agent and Lenders in these Cases.

     E.   Findings Regarding the Postpetition Financing.

               (i)  Post-Petition  Factoring  and  Financing.  The Debtors  have
requested from Factor,  Agent and Lenders, and each of Factor, Agent and Lenders
is willing to extend,  certain loans, advances and other financial and factoring
accommodations,  as more particularly described, and on the terms and conditions
set forth, in this Order, the Factoring  Agreements and the Financing Agreements
(as each term is defined the Ratification Agreement).

               (ii) Need for Post-Petition Factoring and Financing.  The Debtors
do not have  sufficient  available  sources of working  capital to operate their
businesses  in the ordinary  course  without the financing  requested  under the
Motion.  The  Debtors'  ability to maintain  business  relationships  with their
vendors, suppliers, and customers, to pay their employees, and to otherwise fund
their operations,  is essential to Debtors' continued viability.  The ability of
the  Debtors to obtain  sufficient  working  capital and  liquidity  through the
proposed post-petition  financing arrangements with Factor, Agent and Lenders as
set forth in this Order, the Factoring  Agreements and the Financing  Agreements
is vital to the  preservation and maintenance of the going concern values of the
Debtors.  Accordingly,  the  Debtors  have  an  immediate  need  to  obtain  the
post-petition  financing  in order to permit,  among other  things,  the orderly

                                       8
<PAGE>

continuation of the operation of their businesses, to minimize the disruption of
their business operations, and to manage and preserve the assets of the Debtors'
bankruptcy  estates (as defined under Section 541 of the  Bankruptcy  Code,  the
"Estates") in order to maximize the recovery to all estate creditors.

               (iii) The Interim  Financing  Order.  On October 16,  2006,  this
Court entered the Order (A) Authorizing Debtors to Obtain Interim  Post-Petition
Financing and Grant Security Interests and Superpriority  Administrative Expense
Status Pursuant to 11 U.S.C.  ss.ss. 105 and 364(c); (B) Modifying the Automatic
Stay  Pursuant  to 11 U.S.C.  ss.  362;  (C)  Authorizing  Debtors to Enter into
Agreements with GMAC Commercial  Finance LLC; and (D) Scheduling a Final Hearing
Pursuant to Bankruptcy Rule 4001 (the "Interim Order"), pursuant to which, inter
alia  (i)  the  Debtors  were  authorized  to  obtain,   on  an  interim  basis,
post-petition loans, advances and other financial  accommodations from Agent and
Lenders in accordance with the Pre-Petition  Financing  Agreements,  as each has
been ratified,  reaffirmed,  restated,  modified and amended by the Ratification
Agreement,  secured by first priority  liens and security  interests upon and in
the Pre-Petition Collateral (as defined in the Interim Order), (ii) the Borrower
was  authorized  to  sell  certain  of its  accounts  receivable  to  Factor  in
accordance  with  the  terms  and  conditions  of  the  Pre-Petition   Factoring
Agreements,  as each has  been  ratified,  reaffirmed,  restated,  modified  and
amended  by the  Ratification  Agreement,  secured by first  priority  liens and
security interests upon and in the Pre-Petition Factoring Collateral (as defined
in the Interim  Order) and (iii) Agent,  for the benefit of itself and for other
Lenders, and Factor were granted  super-priority  administrative  claims against
the Debtors for all Post-Petition  Obligations and all  Post-Petition  Factoring
Obligations, respectively (as defined in the Ratification Agreement).

               (iv) No Credit Available on More Favorable Terms. The Debtors are
unable to procure  financing in the form of  unsecured  credit  allowable  under
Section  503(b)(1) of the Bankruptcy  Code, as an  administrative  expense under
Section 364(a) or (b) of the Bankruptcy Code, or in exchange for the grant of an
administrative  expense priority pursuant to Section 364(c)(1) of the Bankruptcy
Code  without  the grant of liens on assets.  The  Debtors  have been  unable to
procure the  necessary  financing  on terms more  favorable  than the  financing
offered by Factor,  Agent and Lenders  pursuant to the Factoring  Agreements and
Financing Agreements, respectively;

                                       9
<PAGE>

               (v) Budget.  Debtors  have  prepared  and  delivered  to Agent an
initial  budget  (the  "Budget",  as  such  term is more  fully  defined  in the
Ratification Agreement). Such Budget has been thoroughly reviewed by the Debtors
and  their  management  and  sets  forth,  among  other  things,  the  Projected
Information (as defined in the  Ratification  Agreement) for the periods covered
thereby.  The Debtors represent that the Budget is achievable and will allow the
Debtors to operate in Chapter 11 without  the  accrual of unpaid  administrative
expenses.  Factor,  Agent and Lenders are relying upon the  Debtors'  compliance
with the Budget in accordance with Section 5.3 of the Ratification Agreement and
this Order in determining to enter into the post-petition financing arrangements
provided for herein.

               (vi) Business Judgment and Good Faith Pursuant to Section 364(e).
The terms of the Factoring  Agreements,  Financing Agreements and this Order are
fair, just and reasonable under the circumstances,  are ordinary and appropriate
for secured financing to debtors-in-possession, reflect the Debtors' exercise of
their prudent business judgment  consistent with their fiduciary duties, and are
supported by reasonably  equivalent value and fair consideration.  The terms and
conditions of the Factoring Agreements, Financing Agreements and this Order have
been  negotiated  in good  faith and at arms'  length by and among the  Debtors,
Factor,  Agent and Lenders,  with all parties being represented by counsel.  Any
credit  extended  under  the  terms of this  Order  shall be deemed to have been
extended in good faith by Factor, Agent and Lenders, as the term "good faith" is
used in Section 364(e) of the Bankruptcy Code.

               (vii)  Good  Cause.   The  relief  requested  in  the  Motion  is
necessary,  essential and  appropriate,  and is in the best interest of and will
benefit the Debtors,  their creditors and their Estates,  as its  implementation
will,  among other things,  provide the Debtors with the necessary  liquidity to
(a) minimize disruption to the Debtors' businesses and on-going operations,  (b)
preserve and  maximize the value of the Debtors'  Estates for the benefit of all
the Debtors'  creditors,  and (c) avoid  immediate and  irreparable  harm to the
Debtors, their creditors, their businesses, their employees, and their assets.

                                       10
<PAGE>

               (viii)  Immediate  Entry.  Sufficient  cause exists for immediate
entry of this  Order  pursuant  to  Bankruptcy  Rules  4001(c)(2).  The  limited
objection of the  Committee (as defined  below) to the Motion,  filed on October
27, 2006 (Docket No. 72, the  "Committee  Objection")  has been  withdrawn  with
prejudice as a result of the settlement reached among GMAC, in its capacities as
Agent, on behalf of itself and the Lenders, and as Factor, the Committee and the
Debtors set forth in paragraph  5.6 of this Order.  No other party  appearing in
the Cases has filed or made an objection to the relief  sought in the Motion and
the entry of this Order,  or any other  objections that were made (to the extent
such objections have not been withdrawn) are hereby overruled.

               (ix) Creditors'  Committee.  On October 20 2006, the U.S. Trustee
appointed the Official  Committee of Unsecured  Creditors (the  "Committee")  in
accordance with Section 1102 of the Bankruptcy Code.

     Based  upon the  foregoing,  and after  due  consideration  and good  cause
appearing therefor;

     IT IS HEREBY ORDERED, ADJUDGED AND DECREED, that:

Section 1.     Authorization and Conditions to Financing.

               1.1 Motion  Granted.  The Motion is  granted in  accordance  with
Bankruptcy  Rule  4001(c)(2)  to the extent  provided in this Order.  This Order
shall hereinafter be referred to as the "Final Order."

               1.2 Authorization to Borrow,  Factor Accounts and Use of Loan and
Factoring Proceeds.  Borrower is hereby authorized and empowered to (i) continue
to borrow and obtain Advances and to incur indebtedness and obligations owing to
Agent and Lenders  pursuant to the terms and conditions of this Final Order, the
Existing Loan Agreement,  as ratified and amended by the Ratification  Agreement
(as  the  same  has  heretofore  been or may  hereafter  be  amended,  modified,
supplemented, restated, extended or replaced, the "Loan Agreement," as such term
is more fully defined in the  Ratification  Agreement)  and the other  Financing

                                       11
<PAGE>

Agreements and (ii) continue  selling and assigning  Accounts (as defined in the
Factoring  Agreements)  to Factor  pursuant to the terms and  conditions of this
Final Order and the Existing Factoring Agreement, as ratified and amended by the
Ratification  Agreement  (as the same has  heretofore  been or may  hereafter be
amended, modified, supplemented,  restated, extended or replaced, the "Factoring
Agreement") and the other Factoring  Agreements (as defined in the  Ratification
Agreement).  Subject to the terms and conditions  contained in this Final Order,
the Financing  Agreements and Factoring  Agreements,  and in accordance with the
Budget,  the Financing  Agreements,  Factoring  Agreements and this Final Order,
Borrower  shall  use the  proceeds  of the  Advances  and any  other  credit  or
factoring  accommodations provided to Borrower pursuant to this Final Order, the
Financing Agreements and the Factoring Agreements for the payment of the expense
items specified in the Budget.

               1.3 Financing Agreements

               1.3.1  Authorization.  Each  Debtor,  as successor in interest to
Borrower or Guarantor,  as the case may be, is hereby authorized and directed to
enter  into,  execute,  deliver,  perform,  and  comply  with all of the  terms,
conditions and covenants of the Loan Agreement,  the other Financing Agreements,
the  Factoring   Agreement,   the  other  Factoring  Agreements  and  all  other
agreements,  documents and instruments  executed and/or  delivered in connection
with or related to the Financing  Agreements,  the Factoring Agreements and this
Final Order, including, without limitation, the Ratification Agreement, pursuant
to which, inter alia, each Debtor ratifies, reaffirms, extends, assumes, adopts,
amends,  and restates the  Pre-Petition  Financing  Agreements and  Pre-Petition
Factoring Agreements to which it is a party, including,  without limitation, the
Deposit Account Control Agreement among Borrower,  Blocked Account Bank and GMAC
(as amended, the "Blocked Account Agreement"), the Existing Guarantor Documents,
Existing Loan Agreement,  Existing Factoring Agreement and all other agreements,
documents  and  instruments  executed  and/or  delivered in  connection  with or
related to any of the foregoing,  in each  instance,  as ratified and amended by
the Ratification Agreement.

                                       12
<PAGE>

               1.3.2  Approval.  The Financing  Agreements  (including,  without
limitation,  the Loan Agreement),  the Factoring Agreements (including,  without
limitation,  the  Factoring  Agreement)  and each  term set forth in each of the
Financing  Agreements  and  Factoring  Agreements  are  approved  to the  extent
necessary to implement the terms and provisions of this Final Order. All of such
terms,  conditions and covenants shall be sufficient and conclusive  evidence of
the borrowing arrangements by and among Debtors,  Factor, Agent and Lenders, and
of each Debtor's  assumption and adoption of all of the terms,  conditions,  and
covenants of the  Financing  Agreements  and the  Factoring  Agreements  for all
purposes,  including,  without limitation, to the extent applicable, the payment
of all  Obligations  (as defined in the Loan  Agreement) and all Obligations (as
defined  in  the  Factoring  Agreement),   including,  without  limitation,  all
principal, interest,  commissions, letter of credit fees, servicing fees, unused
line  fees,  DIP  facility  fee,  early  termination  fees,  and other  fees and
expenses,  including,  without limitation, all of Agent's, Lenders' and Factor's
actual and reasonable  consultant  fees,  professional  fees,  attorney fees and
legal  expenses,  as more  fully  set  forth  in the  Financing  Agreements  and
Factoring Agreements, as applicable.

               1.3.3  Amendment.  Subject  to the  terms and  conditions  of the
Financing  Agreements  and  Factoring  Agreements,  Debtors,  Factor,  Agent and
Lenders may amend, modify,  supplement,  or waive any provision of the Financing
Agreements and Factoring Agreements (an "Amendment") without further approval or
order of the Court,  so long as (i) such Amendment is not material (for purposes
hereof,  a "material"  Amendment  shall mean,  any  Amendment  that  operates to
increase  the interest  rate and/or fee other than as currently  provided in the
Financing  Agreements,  increase the Maximum Loan Amount (as defined in the Loan
Agreement),  add new  events of  default  or  enlarge  the  nature and extent of
default remedies available to either Factor, Agent or Lenders following an event
of default, or otherwise modify any terms and conditions in any of the Financing
Agreements or Factoring  Agreements  in a manner  materially  less  favorable to
Debtors) and is undertaken in good faith by Factor,  Agent, Lenders and Debtors;
(ii) the Debtors  provide prior written notice of the Amendment (the  "Amendment

                                       13
<PAGE>

Notice") to the U.S.  Trustee and  counsel to the  Committee;  (iii) the Debtors
file the Amendment Notice with the Court; and (iv) no objection to the Amendment
is filed with the Court within two (2) business  days from the later of the date
the Amendment  Notice is served or the date the  Amendment  Notice is filed with
the Court in  accordance  with  this  Section.  Any  material  Amendment  to the
Financing  Agreements and/or Factoring  Agreements must be approved by the Court
to be effective.

               1.4  Payments  and  Application  of  Payments.  The  Debtors  are
authorized and directed to make all payments and transfers of Estate property to
Factor,  Agent and Lenders as  provided,  permitted  and/or  required  under the
Financing  Agreements  and Factoring  Agreements,  which payments and transfers,
subject to Section  4.1  herein,  shall not be  avoidable  or  recoverable  from
Factor,  Agent or Lenders under Sections 547, 548, 550, 553 or any other Section
of the  Bankruptcy  Code,  or any  other  claim,  charge,  assessment  or  other
liability,  whether  by  application  of  the  Bankruptcy  Code,  other  law  or
otherwise.  Agent and Lenders  shall apply the  proceeds of the  Collateral  (as
defined  in the  Ratification  Agreement),  and any other  amounts  or  payments
received by Agent and Lenders in respect of the Obligations,  in accordance with
the  Financing  Agreements,  the  Intercreditor  Agreement and this Final Order,
including, without limitation, applying all payments, proceeds and other amounts
first to the Pre-Petition  Obligations,  until such Pre-Petition Obligations are
indefeasibly   paid  in  full  and  completely   satisfied,   and  then  to  the
Post-Petition  Obligations (as defined in the  Ratification  Agreement).  Factor
shall  apply  the  proceeds  of the  Factoring  Collateral  (as  defined  in the
Ratification Agreement), and any other amounts or payments received by Factor in
respect of the Factoring Obligations (as defined in the Ratification  Agreement)
in accordance with the Factoring  Agreements,  the  Intercreditor  Agreement and
this Final Order, including, without limitation, applying all payments, proceeds
and other amounts first to the Pre-Petition  Factoring  Obligations,  until such

                                       14
<PAGE>

Pre-Petition  Factoring Obligations are indefeasibly paid in full and completely
satisfied,  and then to the Post-Petition  Factoring  Obligations (as defined in
the Ratification  Agreement).  Without limiting the generality of the foregoing,
the Debtors are authorized and directed, without further order of this Court, to
pay or reimburse each of Factor,  Agent,  and Lenders for all present and future
costs and expenses,  including,  without limitation,  all reasonable  consultant
fees, documented  professional fees and fees and disbursements of counsel, paid,
or  incurred  by any of  Factor,  Agent,  and  Lenders  in  connection  with the
financing transactions as provided in this Final Order, the Financing Agreements
and/or the Factoring  Agreements (as the case may be), all of which, among other
things,  shall  be and  are  included  as part of the  principal  amount  of the
Obligations (in the case of Agent and Lenders) or the Factoring  Obligations (in
the case of  Factor),  and shall be  secured by the  Collateral  (in the case of
Agent and Lenders) or the Factoring Collateral (in the case of Factor).

               1.5  Continuation  of Prepetition  Procedures.  All  pre-petition
practices  and  procedures  for the  payment and  collection  of proceeds of the
Collateral and the Factoring  Collateral,  the turnover of cash, the delivery of
property to Agent, Lenders and Factor, and the funding pursuant to the Factoring
Agreements and the Financing Agreements, including the Blocked Account Agreement
and  any  other  similar   lockbox  and/or  blocked   depository   bank  account
arrangements,  are hereby approved and shall continue without interruption after
the commencement of the Cases.

Section 2.     Postpetition Lien; Superpriority Administrative Claim Status.

               2.1 Post-Petition Lien.

                    2.1.1 Lien Granting.

                    (a) To secure the prompt payment and  performance of any and
all  Obligations  (as  such  term  is more  fully  defined  in the  Ratification
Agreement)  of  Debtors  to Agent  and  Lenders  of  whatever  kind,  nature  or
description,  absolute or contingent,  now existing or hereafter arising, Agent,
for the  benefit  of itself  and the  other  Lenders,  shall  have and is hereby
granted,  effective as of the Petition Date,  valid and perfected first priority
security  interests  and  liens,  superior  to all other  liens,  claims  and/or
security  interests  that any  creditor  of the  Debtors'  Estates may have (but
subject to the terms of the  Intercreditor  Agreement and the Lending  Permitted
Liens and  Claims  (as  hereinafter  defined),  as and to the  extent  expressly
provided in Section 2.1.2 below), in and upon all of the Pre-Petition Collateral
and the  Post-Petition  Collateral (as each term is defined in the  Ratification
Agreement), including, without limitation, all avoidance actions under Chapter 5
of the Bankruptcy Code (the "Avoidance  Actions").  The Pre-Petition  Collateral
and the  Post-Petition  Collateral  are  collectively  referred to herein as the
"Collateral." In accordance with Sections 552(b) and 361 of the Bankruptcy Code,

                                       15
<PAGE>

the  value,  if any,  in any of the  Collateral,  in  excess  of the  amount  of
Obligations  secured by such Collateral after  satisfaction of the Post-Petition
Obligations  of  Debtors  to Agent  and  Lenders,  shall  constitute  additional
security  for  the  repayment  of  the  Pre-Petition  Obligations  and  adequate
protection  for the use by  Debtors,  and the  diminution  in the value,  of the
Collateral  existing on the Petition  Date.

                    (b) To secure the prompt payment and  performance of any and
all Factoring Obligations (as defined in the Ratification  Agreement) of Debtors
to Factor of whatever kind, nature or description,  absolute or contingent,  now
existing  or  hereafter  arising,  Factor  shall  have  and is  hereby  granted,
effective as of the Petition Date,  valid and perfected first priority  security
interests  and  liens,  superior  to all other  liens,  claims  and/or  security
interests that any creditor of the Debtors' Estates may have (but subject to the
terms of the  Intercreditor  Agreement  and the  Factoring  Permitted  Liens and
Claims (as  hereinafter  defined),  as and to the extent  expressly  provided in
Section 2.1.2 below), in and upon all of the Pre-Petition  Factoring  Collateral
and the  Post-Petition  Factoring  Collateral  (as each term is  defined  in the
Ratification Agreement),  including,  without limitation, all Avoidance Actions.
The Pre-Petition Factoring Collateral and the Post-Petition Factoring Collateral
are collectively referred to herein as the "Factoring Collateral." In accordance
with Sections  552(b) and 361 of the Bankruptcy  Code, the value, if any, in any
of the Factoring  Collateral,  in excess of the amount of Factoring  Obligations
secured by such Factoring  Collateral  after  satisfaction of the  Post-Petition
Factoring  Obligations  of  Debtors  to  Agent  and  Lenders,  shall  constitute
additional security for the repayment of the Pre-Petition  Factoring Obligations
and adequate protection for the use by Debtors, and the diminution in the value,
of the Factoring  Collateral existing on the Petition Date.

                                       16
<PAGE>

                    2.1.2 Lien Priority.

                    (a) The  pre-petition and  post-petition  liens and security
interests of Agent and Lenders  granted under the Financing  Agreements and this
Final Order in the Collateral shall be and shall continue to be first and senior
in  priority  to all  other  interests  and  liens of  every  kind,  nature  and
description,  whether  created  consensually,  by  an  order  of  the  Court  or
otherwise, including, without limitation, liens or interests granted in favor of
third parties in conjunction  with Sections 363, 364 or any other Section of the
Bankruptcy Code or other  applicable law;  provided,  however,  that Agent's and
Lenders' liens on and security interests in the Collateral shall be subject only
to (i) the Lending  Permitted  Encumbrances  and (ii) the Carve Out Expenses (as
defined  herein) solely to the extent  provided for in Sections 2.3, 2.4 and 2.5
of this  Final  Order  (the  foregoing  clauses  (i) and (ii)  are  collectively
referred to herein as the "Lending Permitted Liens and Claims"). Notwithstanding
any provision to the contrary herein, the liens granted herein to GMAC shall not
prime any pre-petition valid, perfected and unavoidable liens that are senior to
GMAC's pre-petition liens in the Pre-Petition Collateral.

                    (b) The  pre-petition and  post-petition  liens and security
interests of Factor granted under the Factoring  Agreements and this Final Order
in the Factoring  Collateral  shall be and shall continue to be first and senior
in  priority  to all  other  interests  and  liens of  every  kind,  nature  and
description,  whether  created  consensually,  by  an  order  of  the  Court  or
otherwise, including, without limitation, liens or interests granted in favor of
third parties in conjunction  with Sections 363, 364 or any other Section of the
Bankruptcy Code or other applicable law; provided,  however, that Factor's liens
on and security  interests in the Factoring  Collateral shall be subject only to
(i) the  Factoring  Permitted  Encumbrances  and (ii) the Carve Out Expenses (as
defined  herein) solely to the extent  provided for in Sections 2.3, 2.4 and 2.5
of this  Final  Order  (the  foregoing  clauses  (i) and (ii)  are  collectively
referred to herein as the "Factoring Permitted Liens and Claims").

                                       17
<PAGE>

                    2.1.3 Post-Petition Lien Perfection.  This Final Order shall
be sufficient and conclusive evidence of the priority,  perfection, and validity
of the post-petition  liens and security interests granted herein,  effective as
of the Petition  Date,  without any further act and without  regard to any other
federal,   state,  or  local  requirements  or  law  requiring  notice,  filing,
registration,  recording  or  possession  of the  Collateral  or  the  Factoring
Collateral,  or other act to validate or perfect such security interest or lien,
including without  limitation,  control agreements with the Blocked Account Bank
or with any other  financial  institution(s)  holding a Blocked Account or other
depository    account   consisting   of   Collateral   (a   "Perfection   Act").
Notwithstanding the foregoing, if Factor or Agent, as the case may be, shall, in
its  sole  discretion,  elect  for any  reason  to  file,  record  or  otherwise
effectuate  any  Perfection  Act,  Factor  or  Agent,  as the  case  may be,  is
authorized to perform such act, and the Debtors are  authorized  and directed to
perform  such act to the extent  necessary  or required  by Factor or Agent,  as
applicable,  which act or acts shall be deemed to have been  accomplished  as of
the date and time of entry of the  Interim  Order  notwithstanding  the date and
time actually  accomplished,  and in such event, the subject filing or recording
office is  authorized  to accept,  file and/or  record any document in regard to
such act in accordance with applicable law. Factor and/or Agent, as the case may
be, may choose to file,  record or present a certified  copy of this Final Order
in the  same  manner  as a  Perfection  Act,  which  shall  be  tantamount  to a
Perfection  Act, and, in such event,  the subject filing or recording  office is
authorized to accept,  file or record such certified copy of this Final Order in
accordance  with applicable law. Should Factor or Agent so choose and attempt to
file,  record or perform a  Perfection  Act, no defect or failure in  connection
with  such  attempt  shall  in any way  limit,  waive  or  alter  the  validity,
enforceability,  attachment,  or  perfection  of  the  post-petition  liens  and
security interests granted herein by virtue of the entry of this Final Order.

               2.2 Superpriority Administrative Expense.

                    2.2.1 For all Obligations now existing or hereafter  arising
pursuant to this Final Order, the Financing Agreements or otherwise,  Agent, for
the benefit of itself and the other Lenders, is granted an allowed superpriority

                                       18
<PAGE>

administrative  claim  pursuant to Section  364(c)(1)  of the  Bankruptcy  Code,
having  priority  in  right  of  payment  over  any and all  other  obligations,
liabilities and  indebtedness of Debtors,  whether now in existence or hereafter
incurred by Debtors,  and over any and all  administrative  expenses or priority
claims of the kind  specified  in, or ordered  pursuant to, inter alia  Sections
105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b), 364(c)(1), 546(c), 726,
and/or 1114 of the Bankruptcy Code (the "Lender Superpriority Claim"), provided,
however,  that the Lender  Superpriority Claim shall have the same priority with
the Factor Superpriority Claim (as defined below).

                    2.2.2  For  all  Factoring   Obligations   now  existing  or
hereafter  arising  pursuant to this Final Order,  the  Factoring  Agreements or
otherwise,  Factor is  granted  an allowed  superpriority  administrative  claim
pursuant to Section  364(c)(1) of the Bankruptcy Code,  having priority in right
of payment over any and all other  obligations,  liabilities and indebtedness of
Debtors, whether now in existence or hereafter incurred by Debtors, and over any
and all administrative  expenses or priority claims of the kind specified in, or
ordered  pursuant to, inter alia Sections  105,  326,  328,  330,  331,  503(b),
506(c),  507(a), 507(b),  364(c)(1),  546(c), 726, and/or 1114 of the Bankruptcy
Code (the "Factor  Superpriority  Claim"),  provided,  however,  that the Factor
Superpriority  Claim shall have the same priority with the Lender  Superpriority
Claim.

               2.3 Carve Out Expenses.

                    2.3.1  Carve Out  Expenses.  Upon the  declaration  by Agent
and/or  Factor of an Event of Default  (as  defined  herein),  (i)  Agent's  and
Lenders' liens, claims and security interests in the Collateral and their Lender
Superpriority  Claim, and (ii) Factor's liens,  claims and security interests in
the Factoring  Collateral and its Factor  Superpriority  Claim,  shall,  in each
instance, be subject only to the right of payment of the following expenses (the
"Carve Out Expenses"):

                         a. statutory fees payable to the U.S.  Trustee pursuant
to 28 U.S.C. ss. 1930(a)(6);

                         b. fees payable to the Clerk of this Court; and

                                       19
<PAGE>

                         c.  subject to the terms and  conditions  of this Final
Order, the unpaid and outstanding reasonable fees and expenses actually incurred
on or after  the  Petition  Date,  and  approved  by a final  order of the Court
pursuant to Sections 326, 328, 330, or 331 of the Bankruptcy Code (collectively,
the  "Allowed   Professional   Fees"),  by  attorneys,   accountants  and  other
professionals  retained by the Debtors and any Committee(s) under Section 327 or
1103(a) of the Bankruptcy Code  (collectively,  the  "Professionals"),  less the
amount  of any  retainers,  if  any,  then  held  by  such  Professionals,  in a
cumulative,  aggregate sum not to exceed $500,000 (the  "Professional  Fee Carve
Out").

                    2.3.2 Excluded Professional Fees.  Notwithstanding  anything
to the contrary in this Final Order,  neither the Professional Fee Carve Out nor
the proceeds of any factoring  accommodations,  Revolving  Advances,  Letters of
Credit, other Advances,  Collateral or Factoring Collateral shall be used to pay
any Allowed  Professional Fees or any other fees and/or expenses incurred by any
Professional  in  connection  with any of the  following:  (a) an  assertion  or
joinder in (but  excluding  any  investigation  into) any claim,  counter-claim,
action, proceeding,  application, motion, objection, defense, or other contested
matter  seeking  any  order,  judgment,  determination  or similar  relief:  (i)
challenging the legality, validity,  priority,  perfection, or enforceability of
the Obligations,  the Factoring  Obligations,  Agent's and Lenders' liens on and
security  interests  in the  Collateral  and/or  Factor's  liens on and security
interests  in  the  Factoring  Collateral,  (ii)  invalidating,  setting  aside,
avoiding or subordinating,  in whole or in part, the Obligations,  the Factoring
Obligations,  Agent's  and  Lenders'  liens  on and  security  interests  in the
Collateral  or  Factor's  liens  on and  security  interests  in  the  Factoring
Collateral, or (iii) preventing, hindering, or delaying Factor's, Agent's or any
Lender's assertion or enforcement of any lien, claim, right or security interest
or realization upon any Factoring Collateral or Collateral,  as the case may be,
in accordance  with the terms and conditions of this Final Order,  (b) a request

                                       20
<PAGE>

to use the Cash  Collateral  (as such  term is  defined  in  Section  363 of the
Bankruptcy  Code)  without  the prior  written  consent  of Factor  and Agent in
accordance with the terms and conditions of this Final Order,  (c) a request for
authorization  to  obtain  Debtor-in-Possession  financing  or  other  financial
accommodations  pursuant to Section  364(c) or Section  364(d) of the Bankruptcy
Code, other than from Factor and/or Agent and Lenders, without the prior written
consent of Factor and Agent,  (d) the  commencement or prosecution of any action
or  proceeding  of any claims,  causes of action,  or defenses  against  Factor,
Agent, any Lender or any of their  respective  officers,  directors,  employees,
agents,  attorneys,  affiliates,  assigns,  or  successors,  including,  without
limitation,  any attempt to recover or avoid any claim or interest  from Factor,
Agent or any Lender under Chapter 5 of the Bankruptcy Code, or (e) any act which
has  or  could  have  the  effect  of  materially  and  adversely  modifying  or
compromising the rights and remedies of Factor, Agent or any Lender, or which is
contrary,  in a manner  that is  material  and  adverse to Factor,  Agent or any
Lender,  to any term or condition set forth in or  acknowledged by the Financing
Agreements,  the  Factoring  Agreements or this Final Order and which results or
may  result in the  occurrence  of a Default  or an Event of  Default  under the
Financing Agreements, the Factoring Agreements and/or this Final Order.

               2.4 Carve Out Reserve. At Agent's sole discretion,  Agent may, at
any time and in any increment in accordance with the Loan  Agreement,  establish
Reserves  against the amount of Advances  and other credit  accommodations  that
would  otherwise be made available to Debtors  pursuant to the lending  formulae
contained in the Loan Agreement in respect of the Professional Fee Carve Out and
the other Carve Out Expenses.

               2.5 Payment of Carve Out Expenses.

                    2.5.1  Prior  to the  occurrence  of an  Event  of  Default,
Debtors  shall  be  permitted  to  pay  to the  Professionals  compensation  and
reimbursement  of expenses  that accrued prior to an Event of Default and in the
ordinary  course of the Debtors'  business,  and that are otherwise  allowed and
payable under Section 328, 330 and 331 of the Bankruptcy Code and any procedures
Order,  as the same may be due and  payable,  and the  amounts so paid shall not
reduce the Carve-Out.

                                       21
<PAGE>

                    2.5.2 Any payment or  reimbursement  made either directly by
Factor, Agent or any Lender at any time, or by or on behalf of the Debtors on or
after  the  occurrence  of an  Event  of  Default,  in  respect  of any  Allowed
Professional Fees or any other Carve Out Expenses  (exclusive of the application
of any retainers by any of the Professionals) shall, in either case, permanently
reduce the Professional Fee Carve Out on a  dollar-for-dollar  basis.  Factor's,
Agent's and Lenders'  obligation to fund or otherwise pay the  Professional  Fee
Carve Out and the other Carve Out Expenses  shall be added to and made a part of
the  Obligations  or  Factoring  Obligations  (as  applicable),  secured  by the
Collateral or Factoring  Collateral (as applicable),  and entitle Factor,  Agent
and Lenders to all of the rights,  claims,  liens,  priorities  and  protections
under this Final Order, the Financing Agreements,  the Factoring Agreements, the
Bankruptcy  Code  and/or  applicable  law.  Payment  of any Carve Out  Expenses,
whether by or on behalf of Factor,  Agent or any Lender, shall not and shall not
be deemed to reduce the Obligations or the Factoring Obligations,  and shall not
and shall not be deemed to (a) subordinate any of Agent's and Lenders' liens and
security interests in the Collateral or their Lender  Superpriority Claim to any
junior  pre-petition or  post-petition  lien,  interest or claim in favor of any
other party, or (b) subordinate any of Factor's liens and security  interests in
the  Factoring  Collateral or its  Factoring  Superpriority  Claim to any junior
pre-petition  or  post-petition  lien,  interest  or claim in favor of any other
party.  Except as otherwise provided herein with respect to the Professional Fee
Carve and the other Carve Out  Expenses,  Factor,  Agent and Lenders  shall not,
under any  circumstance,  be responsible for the direct payment or reimbursement
of any fees or  disbursements of any  Professionals  incurred in connection with
the Case under any chapter of the Bankruptcy  Code, and nothing in Sections 2.3,
2.4, 2.5 or 2.6 of this Final Order shall be construed to obligate Factor, Agent
or any Lender in any way, to pay compensation to or to reimburse expenses of any
Professional,  or to ensure that the Debtors have  sufficient  funds to pay such
compensation or reimbursement.

                                       22
<PAGE>

               2.6  Section 507(b) Priority.

                    2.6.1  To the  extent  Agent's  and  Lenders'  liens  on and
security interests in the Collateral or any other form of adequate protection of
Agent's and Lenders'  interests is insufficient to pay  indefeasibly in full all
Obligations,  Agent and Lenders shall also have the priority in payment afforded
by Section 507(b) of the Bankruptcy  Code to the extent of any such  deficiency.

                    2.6.2 To the extent Factor's liens on and security interests
in the Factoring Collateral or any other form of adequate protection of Factor's
interests is insufficient to pay indefeasibly in full all Factoring Obligations,
Factor shall also have the priority in payment afforded by Section 507(b) of the
Bankruptcy Code to the extent of any such deficiency.

Section 3. Default; Rights and Remedies; Relief from Stay.

                    3.1  Events  of  Default.  The  occurrence  of  any  of  the
following events shall constitute an Event of Default under this Final Order:

                         a. Any Debtor's failure to perform, in any respect, any
of the terms,  conditions  or  covenants or their  obligations  under this Final
Order; or

                         b. An "Event of Default"  under the Loan  Agreement  or
any of the other Financing Agreements.

                         c. An "Event of Default" under the Factoring  Agreement
or any of the other Factoring Agreements.

                    3.2 Rights and  Remedies  Upon  Event of  Default.  Upon the
occurrence of and during the continuance of an Event of Default, (i) the Debtors
shall be bound by all restrictions,  prohibitions and other terms as provided in
this Final Order,  the Financing  Agreements and the Factoring  Agreements,  and
(ii) Subject to the terms of the Intercreditor  Agreement,  Factor and/or Agent,
as the case may be,  shall be entitled to take any act or exercise  any right or
remedy  (subject to Section 3.4 below) as provided in this Final  Order,  any of
the  Financing  Agreements  and/or any of the Factoring  Agreements,  including,
without  limitation,  declaring all  Obligations  and/or  Factoring  Obligations
immediately  due and payable,  accelerating  the  Obligations  and/or  Factoring

                                       23
<PAGE>

Obligations,  ceasing to factor any of Borrower's  accounts and/or make Advances
on behalf of Debtors,  setting off any Obligations and/or Factoring  Obligations
with the proceeds of any Collateral or Factoring Collateral (as applicable), and
enforcing any and all rights with respect to the Collateral and/or the Factoring
Collateral.  Immediately  upon or after the occurrence of an Event of Default or
any act,  event,  or condition that, with the giving of notice or the passage of
time, or both,  would  constitute an Event of Default,  (i) Factor shall have no
obligation  to factor the  accounts of Borrower or provide  other  factoring  or
credit  accommodations  to  Borrower  and (ii) Agent and  Lenders  shall have no
obligation to lend or advance any  additional  funds to or on behalf of Debtors,
or provide any other financial accommodations to Debtors,.

                    3.3  Expiration  of  Commitment.   Upon  the  expiration  of
Borrower's   authority  to  borrow  and  obtain   other  credit  and   factoring
accommodations  from  Factor,  Agent and  Lenders  pursuant to the terms of this
Final Order, the Factoring  Agreements and the Financing  Agreements  (except if
such  authority  shall be extended with the prior written  consent of Factor and
Agent,  which consent  shall not be implied or construed  from any other action,
inaction or  acquiescence  by Factor,  Agent or any Lender),  unless an Event of
Default set forth in Section 3.2 above occurs sooner and the automatic  stay has
been lifted or modified  pursuant to Section 3.4 of this Final Order, all of the
Obligations and Factoring  Obligations shall immediately  become due and payable
and,  subject to the terms of the  Intercreditor  Agreement,  Factor,  Agent and
Lenders shall be  automatically  and completely  relieved from the effect of any
stay under Section 362 of the Bankruptcy Code, and any other  restriction on the
enforcement  of their  liens  upon and  security  interests  in the  Collateral,
Factoring  Collateral  or any other rights  granted to Agent,  Lenders or Factor
pursuant to the terms and  conditions  of the  Financing  Agreements,  Factoring
Agreements or this Final Order, and Factor and Agent, acting on behalf of itself
and the  other  Lenders,  shall be and are  hereby  authorized,  in  their  sole
discretion and subject to the terms of the Intercreditor  Agreement, to take any
and all actions and remedies provided to them in this Final Order, the Financing

                                       24
<PAGE>

Agreements,  the Factoring  Agreements and/or applicable law which Factor and/or
Agent,  acting on behalf of itself and the other Lenders,  may deem  appropriate
and to  proceed  against  and  realize  upon  the  Collateral  and/or  Factoring
Collateral (as applicable) and any other property of the Debtors' Estates.

                    3.4  Relief  from   Automatic   Stay.   The  automatic  stay
provisions  of Section 362 of the  Bankruptcy  Code,  and any other  restriction
imposed by an order of the Court or  applicable  law,  are hereby  modified  and
vacated without further notice,  application or order of the Court to the extent
necessary to permit  Factor  and/or  Agent and  Lenders,  as the case may be, to
perform any act authorized or permitted  under or by virtue of this Final Order,
the  Factoring  Agreements  or  the  Financing  Agreements,  including,  without
limitation,   (a)  to  implement  the  post-petition   financing  and  factoring
arrangements (as applicable)  authorized by this Final Order and pursuant to the
terms of the Factoring Agreements and Financing Agreements,  (b) to take any act
to create,  validate,  evidence,  attach or perfect any lien, security interest,
right or claim in the Collateral and the Factoring  Collateral (as  applicable),
and (c) to assess, charge,  collect,  advance,  deduct and receive payments with
respect  to the  Obligations  and the  Factoring  Obligations  (as  applicable),
including, without limitation, all interests, fees, costs and expenses permitted
under the Financing  Agreements  and the Factoring  Obligations,  and apply such
payments to the Obligations and Factoring  Obligations (as applicable)  pursuant
to the  Factoring  Agreements,  Financing  Agreements  and this Final Order.  In
addition, and without limiting the foregoing, upon the occurrence of an Event of
Default and after  providing  three (3) business days prior written  notice (the
"Enforcement Notice") to counsel for the Debtors, counsel for the Committee, and
the U.S. Trustee,  Factor and/or Agent, acting on behalf of itself and the other
Lenders,  shall be  entitled  to take any  action  and  exercise  all rights and
remedies  provided to them by this Final Order,  the Factoring  Agreements,  the
Financing  Agreements and/or applicable law as such parties may deem appropriate
in their sole  discretion  to, among other things,  proceed  against and realize

                                       25
<PAGE>

upon the Collateral or the Factoring Collateral (as applicable) and/or any other
assets and  properties of Debtors'  Estates upon which Factor and/or Agent,  for
the benefit of itself and the other  Lenders,  has or have been or may hereafter
be granted  liens and  security  interests  to obtain the full and  indefeasible
repayment of all Obligations or Factoring Obligations (as applicable).

Section 4.     Representations; Covenants; and Waivers.

               4.1  Objections  to  Pre-Petition  Obligations.   Notwithstanding
anything  to the  contrary  contained  herein  except to the extent set forth in
paragraph 5.6 of this Final Order, any action, claim or defense (hereinafter, an
"Objection")  that  seeks  to  object  to,  challenge,   contest,  or  otherwise
invalidate or reduce, whether by setoff,  recoupment,  counterclaim,  deduction,
disgorgement or claim of any kind: (a) the existence,  validity or amount of the
Pre-Petition  Obligations or the  Pre-Petition  Factoring  Obligations,  (b) the
extent, legality, validity, perfection or enforceability of Agent's and Lenders'
pre-petition  liens and security interests in the Pre-Petition  Collateral,  (c)
the  extent,  legality,  validity,  perfection  or  enforceability  of  Factor's
pre-petition  liens  and  security  interests  in  the  Pre-Petition   Factoring
Collateral,  (d) Agent's and Lenders' right to apply  proceeds of  Post-Petition
Collateral  against   Pre-Petition   Obligations  in  satisfaction  of  Lender's
pre-petition liens as provided for in this Final Order (provided  however,  that
the only grounds for challenging such right is that the Pre-Petition Obligations
were not fully  secured by the  Pre-Petition  Collateral as of the Petition Date
and such  application  unduly  advantaged  Agent and  Lenders as  against  other
similarly  situated  creditors of the Debtors' Estates) or (e) Factor's right to
apply  proceeds  of  Post-Petition  Factoring  Collateral  against  Pre-Petition
Factoring Obligations in satisfaction of Factor's pre-petition liens as provided
for in this Final Order (provided however, that the only grounds for challenging
such right is that the Pre-Petition Factoring Obligations were not fully secured
by the  Pre-Petition  Factoring  Collateral  as of the  Petition  Date  and such
application  unduly  advantaged  Factor  as  against  other  similarly  situated
creditors  of the  Debtors'  Estates),  shall  be filed  with  the  Court by the
Committee,  derivatively  on behalf  of the  Debtors'  Estates,  and by no other
party,  within  seventy  five (75)  calendar  days from the date of entry of the
Interim Order (the  "Objection  Period").  If any such Objection is timely filed
and  successfully  pursued,  nothing in this Final Order shall prevent the Court
from granting  appropriate relief with respect to the Pre-Petition  Obligations,

                                       26
<PAGE>

the  Pre-Petition  Factoring  Obligations,  Agent's  and  Lenders'  liens on the
Pre-Petition  Collateral  and/or  Factor's liens on the  Pre-Petition  Factoring
Collateral.  If no Objection is timely filed, or if an Objection is timely filed
but denied,  (a) the  Pre-Petition  Obligations and the  Pre-Petition  Factoring
Obligations shall be deemed allowed in full, shall not be subject to any setoff,
recoupment,  counterclaim,  deduction  or claim of any  kind,  and  shall not be
subject to any further  objection  or  challenge  by any party at any time,  (b)
Agent's  and  Lenders'  pre-petition  liens  on  and  security  interest  in the
Pre-Petition  Collateral shall be deemed legal, valid,  perfected,  enforceable,
and non-avoidable for all purposes and of first and senior priority,  subject to
only the Lending  Permitted  Liens and Claims and the Factoring  Permitted Liens
and Claims,  (c) Factor's  pre-petition  liens on and security  interests in the
Pre-Petition  Factoring  Collateral  shall be deemed  legal,  valid,  perfected,
enforceable,  and  non-avoidable  for  all  purposes  and of  first  and  senior
priority,  subject  only to the  Lending  Permitted  Liens  and  Claims  and the
Factoring Permitted Liens and Claims and (d) Factor,  Agent, Lenders and each of
their  respective   participants,   agents,  officers,   directors,   employees,
attorneys,  professionals,  successors, and assigns shall be deemed released and
discharged  from any and all claims  and causes of action  related to or arising
out of the  Pre-Petition  Financing  Agreements and the  Pre-Petition  Factoring
Agreements,  and shall not be subject to any further  objection  or challenge by
any party at any time.

               4.2 Debtors' Waivers.  At all times during the Cases, and whether
or not an Event of Default has occurred, the Debtors irrevocably waive any right
that they may have to seek authority in accordance  with this Final Order (i) to
use Cash  Collateral  of Factor,  Agent and  Lenders  under  Section  363 of the
Bankruptcy  Code,  (ii)  to  obtain   post-petition  loans  or  other  financial
accommodations  pursuant to Sections 364(c) or (d) of the Bankruptcy Code, other
than from Factor  and/or  Agent and Lenders,  or as may be  otherwise  expressly
permitted pursuant to the Loan Agreement,  (iii) to challenge the application of
any payments authorized by this Final Order as pursuant to Section 506(b) of the
Bankruptcy Code, or to assert that the value of the  Pre-Petition  Collateral is
less  than the  Pre-Petition  Obligations  or to  assert  that the  value of the
Pre-Petition  Factoring  Collateral  is less  than  the  Pre-Petition  Factoring

                                       27

<PAGE>

Obligations,  (iv) to propose or support a plan of reorganization  that does not
provide for the indefeasible payment in full and satisfaction of all Obligations
and all Factoring Obligations on the effective date of such plan, or (v) to seek
relief under the Bankruptcy Code,  including without  limitation,  under Section
105,  to the  extent any such  relief  would in any way  restrict  or impair the
rights and remedies of Factor, Agent or any Lender as provided for in this Final
Order, under the Factoring Agreements and/or the Financing Agreements.

               4.3 Section 506(c) Claims. No costs or expenses of administration
which have or may be incurred in the Cases at any time shall be charged  against
Factor,  Agent, any Lender, their respective claims, the Factoring Collateral or
the Collateral  pursuant to Section  506(c) of the  Bankruptcy  Code without the
prior written consent of Factor and Agent,  and no such consent shall be implied
from any other action, inaction, or acquiescence by Factor, Agent or any Lender.

               4.4 Collateral Rights. Until all of the Obligations and Factoring
Obligations shall have been indefeasibly paid and satisfied in full:

                    4.4.1 no other party shall  foreclose or  otherwise  seek to
enforce a junior lien or claim in any  Collateral  or  Factoring  Collateral  be
granted  relief  under 11 U.S.C.  ss.362 to  exercise  any rights  and  remedies
thereof; and

                    4.4.2 upon and after the  occurrence of an Event of Default,
and subject to Factor and/or Agent  obtaining  relief from the automatic stay as
provided for herein,  in connection  with a liquidation of any of the Collateral
or  Factoring  Collateral,  Factor  and/or  Agent  (or any of  their  respective
employees,  agents, consultants,  contractors or other professionals) shall have
the right,  at the cost and expense of Debtors,  to: (i) enter upon,  occupy and
use any real or personal property, fixtures,  equipment,  leasehold interests or
warehouse  arrangements  owned or  leased  by  Debtors  and (ii) use any and all
trademarks,  tradenames,  copyrights,  licenses,  patents  or any other  similar
assets of  Debtors,  which are owned by or subject to a lien of any third  party
and which are used by Debtors in their  businesses.  Factor and/or Agent will be

                                       28

<PAGE>

responsible for the payment of any applicable fees, rentals,  royalties or other
amounts due such  lessor,  licensor or owner of such  property for the period of
time that Factor and/or Agent  actually  uses the equipment or the  intellectual
property  (but in no event for any  accrued  and unpaid  fees,  rentals or other
amounts due for any period prior to the date that Factor  and/or Agent  actually
occupies or uses such assets or properties).

               4.5 Release.  Subject to paragraph 4.1 above, in consideration of
Factor,  Agent and Lenders making  post-petition  loans,  advances and providing
other  factoring and  financial  accommodations  to the Debtors  pursuant to the
provisions of the Financing Agreements,  the Factoring Agreements and this Final
Order,  each  Debtor,  on behalf  of  itself  and its  successors  and  assigns,
(collectively,  the "Releasors"),  shall, forever release,  discharge and acquit
Factor,  Agent,  Lender and their  participants,  officers,  directors,  agents,
attorneys and  predecessors-in-interest  (collectively,  the "Releasees") of and
from  any and all  claims,  demands,  liabilities,  responsibilities,  disputes,
remedies, causes of action,  indebtedness and obligations, of every kind, nature
and description, including, without limitation, any so-called "lender liability"
claims or  defenses,  that  Releasors  had,  have or  hereafter  can or may have
against  Releasees as of the date hereof,  in respect of events that occurred on
or prior to the date  hereof  with  respect  to the  Debtors,  the  Pre-Petition
Obligations,  the Pre-Petition Factoring Obligations,  the Financing Agreements,
the Factoring  Agreements and any Revolving Advances,  Letters of Credit,  other
Advances or other financial or factoring accommodations made by Factor, Agent or
any  Lender  to  Debtors  pursuant  to the  Financing  Agreements  or  Factoring
Agreements.   In  addition,  upon  the  indefeasible  payment  in  full  of  all
Obligations owed Agent and Lenders by Debtors and all Factoring Obligations owed
Factor by Debtors,  and termination of the rights and obligations  arising under
the  Financing  Agreements,  Factoring  Agreements  and the Final  Order  (which
payment and  termination  shall be on terms and conditions  acceptable to Factor
and Agent),  Factor,  Agent and each Lender  shall be released  from any and all
obligations, liabilities, actions, duties, responsibilities and causes of action
arising or occurring in connection with or related to the Financing  Agreements,
the Factoring  Agreements and/or this Final Order (including  without limitation

                                       29
<PAGE>

any  obligation  or  responsibility  (whether  direct or  indirect,  absolute or
contingent, due or not due, primary or secondary, liquidated or unliquidated) to
pay  or  otherwise  fund  the  Carve-Out  Expenses),  on  terms  and  conditions
acceptable to Factor and Agent.

Section 5.     Other Rights and Obligations.

               5.1 No Modification or Stay of This Final Order.  Notwithstanding
(i) any stay,  modification,  amendment,  supplement,  vacating,  revocation  or
reversal of this Final Order, the Financing Agreements, the Factoring Agreements
or any term hereunder or thereunder,  or (ii) the dismissal or conversion of one
or more of the Cases (each,  a "Subject  Event"),  (x) the acts taken by Factor,
Agent and Lenders in  accordance  with this Final Order,  (y) the  Post-Petition
Obligations  incurred  or  arising  prior to Agent's  actual  receipt of written
notice from Debtors  expressly  describing  the occurrence of such Subject Event
and (z) the  Post-Petition  Factoring  Obligations  incurred or arising prior to
Factor's actual receipt of written notice from Debtors expressly  describing the
occurrence of such Subject  Event shall,  in each  instance,  be governed in all
respects by the original  provisions of this Final Order,  and the acts taken by
Factor,  Agent and Lenders in  accordance  with this Final Order,  and the liens
granted  to  Factor,  Agent and  Lenders  in the  Factoring  Collateral  and the
Collateral (as  applicable),  and all other rights,  remedies,  privileges,  and
benefits in favor of Factor, Agent and Lenders pursuant to this Final Order, the
Factoring Agreements and the Financing Agreements shall remain valid and in full
force and effect pursuant to Section 364(e) of the Bankruptcy Code. For purposes
of this  Final  Order,  the term  "appeal",  as used in  Section  364(e)  of the
Bankruptcy Code, shall be construed to mean any proceeding for  reconsideration,
amending,  rehearing,  or  re-evaluating  this Final  Order by this Court or any
other tribunal.

               5.2 Power to Waive Rights; Duties to Third Parties. Factor, Agent
and  Lenders  shall have the right to waive in writing  any of their own rights,
and remedies provided or acknowledged in this Final Order (the "Lender Rights"),
and shall have no  obligation  or duty to any other  party  with  respect to the
exercise or enforcement, or failure to exercise or enforce, any Lender Right(s).

                                       30
<PAGE>

Any waiver by Factor,  Agent or any Lender of any Lender  Rights shall not be or
constitute a continuing waiver. A delay in or failure to exercise or enforce any
Lender Right shall  neither  constitute a waiver of such Lender  Right,  subject
Factor,  Agent or any Lender to any  liability to any other party,  nor cause or
enable any other party to rely upon or in any way seek to assert as a defense to
any obligation owed by the Debtors to Factor, Agent or any Lender.

               5.3 Disposition of Collateral.  Debtors shall not sell, transfer,
lease,  encumber  or  otherwise  dispose  of any  portion of the  Collateral  or
Factoring  Collateral  without the prior written consent of Agent or Factor,  as
the case may be, (and no such consent  shall be implied,  from any other action,
inaction or  acquiescence  by Factor,  Agent or any Lender) and an order of this
Court,  except for sales of Debtors'  Inventory in the ordinary  course of their
business.

               5.4 Inventory.  Debtors shall not,  without the consent of Agent,
enter into any  agreement to return any  inventory to any of its  creditors  for
application against any pre-petition indebtedness under any applicable provision
of Section 546 of the  Bankruptcy  Code,  or consent to any creditor  taking any
setoff against any of its pre-petition  indebtedness  based upon any such return
pursuant to Section 553(b)(1) of the Bankruptcy Code or otherwise.

               5.5 Reservation of Rights.  The terms,  conditions and provisions
of this Final Order are in addition  to and without  prejudice  to the rights of
Factor,  Agent and Lenders to pursue any and all rights and  remedies  under the
Bankruptcy Code, the Factoring Agreements,  Financing  Agreements,  or any other
applicable  agreement  or law,  including,  without  limitation,  rights to seek
adequate protection and/or additional or different adequate protection,  to seek
relief from the automatic stay, to seek an injunction, to oppose any request for
use of cash collateral or granting of any interest in the Collateral,  Factoring
Collateral  or  priority in favor of any other  party,  to object to any sale of
assets,   and  to  object  to  applications  for  allowance  and/or  payment  of
compensation  of  Professionals   or  other  parties  seeking   compensation  or
reimbursement from the Estate.

               5.6  Settlement  of  Committee  Objection.   In  full  and  final
settlement  of the Committee  Objection,  Agent,  Factor,  the Committee and the
Debtors have agreed to the  following  terms,  which are hereby  authorized  and
approved in all  respects:

                                       31
<PAGE>

                    5.6.1 Early  Termination  Fee.  Section 13.1 of the Existing
Loan Agreement, as amended and ratified by the Ratification Agreement, is hereby
amended by deleting  the third and fourth  sentences  of such  Section  13.1 and
replacing them with the following:

                    "In the event  that this  Agreement  is  terminated  and the
               Obligations are prepaid in full prior to the last day of the Term
               (the  date  of such  prepayment  hereinafter  referred  to as the
               "Prepayment  Date"),  Borrower shall pay to Agent for the ratable
               benefit of Lenders an early termination fee in an amount equal to
               (x)  $300,000  if the  Prepayment  Date  occurs  on or after  the
               Closing Date to and including the date immediately  preceding the
               first  anniversary  of the  Closing  Date,  (y)  $200,000  if the
               Prepayment  Date occurs on or after the first  anniversary of the
               Closing Date to and including the date immediately  preceding the
               second  anniversary  of the Closing Date, and (z) $100,000 if the
               Prepayment Date occurs on or after the second  anniversary of the
               Closing Date to and including the date immediately  preceding the
               last day of the Term or during any renewal Term."

The Early  Termination  Fee, as amended  pursuant to this paragraph 5.6.1 of the
Final Order, shall constitute an allowed, legal, valid, binding, enforceable and
non-avoidable  obligation of the Debtors, and neither the Debtors, the Committee
nor any other party in interest in these Cases (including,  without  limitation,
any trustee appointed at any time in any of the Debtor's bankruptcy cases) shall
have any  right to or claim of any  offset,  defense,  counterclaim,  avoidance,
recharacterization or subordination pursuant to the Bankruptcy Code or any other
applicable  law in respect of such fee or any  portion  thereof.  5.6.2  Minimum
Commission.  Section 9(c) of each Existing Factoring  Agreement,  as amended and
ratified by the  Ratification  Agreement,  is hereby  amended by  deleting  such
section in its entirety and replacing it with the following:

                    "(c)  Notwithstanding  anything  to the  contrary  set forth
               herein,  in the event this  agreement is terminated  prior to the
               end of the Term,  other than a termination  pursuant to the first
               sentence  of  Paragraph   9(a)(i),   Client  may  terminate  this
               Agreement  by  paying  to  Factor,   in  addition  to  all  other
               Obligations,  an amount equal to  $300,000.  Such amount shall be
               conclusively  presumed  to be  the  amount  of  Factor's  damages
               sustained by reason of such  termination,  which Client agrees is
               fair and proper."

                                       32
<PAGE>

The Minimum  Commission as set forth in Section 9(c) of each Existing  Factoring
Agreement, as amended pursuant to this paragraph 5.6.2 of the Final Order, shall
constitute an allowed,  legal,  valid,  binding,  enforceable and  non-avoidable
obligation of the Debtors,  and neither the Debtors, the Committee nor any other
party in interest in these Cases  (including,  without  limitation,  any trustee
appointed  at any time in any of the Debtor's  bankruptcy  cases) shall have any
right   to   or   claim   of   offset,   defense,    counterclaim,    avoidance,
recharacterization or subordination pursuant to the Bankruptcy Code or any other
applicable law in respect of such commission or any portion thereof.

               5.7  Binding  Effect.  This Final  Order  shall be  binding  upon
Debtors,  all parties in interest in the Cases, and their respective  successors
and assigns,  including any trustee or other fiduciary appointed in the Cases or
any subsequently  converted bankruptcy case(s) of the Debtors.  This Final Order
shall also inure to the benefit of Factor,  Agent,  Lenders,  Debtors, and their
respective  successors  and assigns.  The provisions of this Final Order and the
Factoring  Agreements,  Financing  Agreements,  the  Post-Petition  Obligations,
Post-Petition   Factoring   Obligations,   Lender  Superpriority  Claim,  Factor
Superpriority Claim and any and all rights, remedies, privileges and benefits in
favor of Factor, Agent and Lenders provided or acknowledged in this Final Order,
and any actions taken  pursuant  thereto,  shall be effective  immediately  upon
entry of this Final Order pursuant to Bankruptcy  Rules 6004(g) and 7062,  shall
continue in full force and  effect,  and shall  survive  entry of any such other
order,  including without  limitation any order which may be entered  confirming
any plan of  reorganization,  converting  one or more of the  Cases to any other
chapter under the Bankruptcy  Code, or dismissing one or more of the Cases.  Any
order  dismissing one or more of the Cases under Section 1112 or otherwise shall
be deemed to provide (in accordance  with Sections 105 and 349 of the Bankruptcy
Code) that (a) the Lender  Superpriority Claim and Agent's and Lenders' liens on
and security interests in the Collateral shall continue in full force and effect
notwithstanding  such dismissal until the Obligations are indefeasibly  paid and
satisfied in full, (b) the Factor  Superpriority Claim and Factor's liens on and

                                       33
<PAGE>

security interests in the Factoring  Collateral shall continue in full force and
effect  notwithstanding  such  dismissal  until the  Factoring  Obligations  are
indefeasibly  paid and  satisfied  in  full,  and (c) this  Court  shall  retain
jurisdiction to the greatest extent permitted by applicable law, notwithstanding
such dismissal,  for the purposes of enforcing the Lender  Superpriority  Claim,
Factor Superpriority Claim and liens in the Collateral and Factoring Collateral.
In the event this Court modifies any of the provisions of the Interim Order, the
Factoring  Agreements or the Financing  Agreements  following the Final Hearing,
such modifications  shall not affect the rights and priorities of Factor,  Agent
or any Lender pursuant to this Final Order with respect to the  Collateral,  the
Factoring Collateral and any portion of the Obligations or Factoring Obligations
which arises or is incurred or is advanced prior to such modifications.

               5.8 Term;  Termination.  Notwithstanding  any  provision  of this
Final  Order to the  contrary,  the  term of the  financing  arrangements  among
Debtors,  Factor,  Agent  and  Lenders  authorized  by this  Final  Order may be
terminated  pursuant  to the terms of the  Financing  Agreements  and  Factoring
Agreements.

               5.9 Limited Effect.  Unless the Final Order specifically provides
otherwise, in the event of a conflict between the terms and provisions of any of
the Factoring Agreements and/or Financing Agreements,  on the one hand, and this
Final Order,  on the other hand,  the terms and  provisions  of this Final Order
shall govern,  interpreted as most  consistent  with the terms and provisions of
the Financing Agreements and Factoring  Agreements.  5.10 Objections  Overruled.
All objections to the Motion are, to the extent not withdrawn, hereby overruled.

Dated: October 31, 2006
       Wilmington, Delaware

                                                /s/ Christopher S. Sontchi
                                                --------------------------------
                                                UNITED STATES BANKRUPTCY JUDGE

                                       34

<PAGE>
                                    EXHIBIT A
                                    ---------

                      Ratification and Amendment Agreement

[Previouly filed as Exhibit 10.1 to Form 8-K of Delta Woodside Industries, Inc.,
with date of October 13, 2006.]

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