Document:

EXHIBIT 99.2

                           MASTER FACTORING AGREEMENT

THIS MASTER  FACTORING  AGREEMENT  (as amended by  Addendum  No. 1 hereto,  this
'AGREEMENT')  is made and entered into as of the 1st day of September,  2005, by
and among ACORN  HOLDING  CORP.  and VALENTEC  SYSTEMS,  INC.,  its wholly owned
subsidiary,  each a Delaware  corporation,  jointly and severally  (collectively
referred  to  throughout  this  Agreement  as "you,"  'your' and  'yours'),  and
ROCKLAND CREDIT FINANCE LLC, a Maryland limited  liability  company (referred to
throughout this Agreement as "we", 'us', 'our' and 'ours').

1.    PURCHASE AND SALE OF ACCOUNTS RECEIVABLE

      1.1.  Scope of Agreement.  This  Agreement  contains the general terms and
conditions  under  which,  from time to time during the Term,  you may offer and
sell to us and we may  accept  and  purchase  from you in our sole and  absolute
discretion  certain of your Accounts  specifically  identified to this Agreement
pursuant  to  Paragraph  1.2.  As  used  herein,   the  term  'ACCOUNTS'  means,
collectively, accounts, contract rights and other forms of obligation arising in
the ordinary  course of business from the sale or lease of goods or rendition of
services.

      1.2.  Implementation.  Each purchase and sale of Accounts  hereunder shall
be evidenced by our mutual  execution of an Assignment  and Transfer of Accounts
Receivable  substantially in the form of Exhibit A (each an  'ASSIGNMENT").  (An
Account  identified  in a duly  executed  Assignment  is  hereinafter  called an
'ASSIGNED  ACCOUNT.')  Each purchase of Accounts  shall be subject to all of the
terms and  conditions of this  Agreement,  which terms and  conditions  shall be
deemed  incorporated  by reference  into each  Assignment.  An Account  shall be
deemed  accepted by us upon and only upon our  execution  and delivery to you of
the applicable  Assignment.  In connection with evaluating Accounts proposed for
factoring  hereunder,  we reserve the right to conduct  such due  diligence  and
impose such related requirements as we may reasonably  determine,  including but
not limited to  investigating  the credit rating  and/or  credit  history of the
customer obligated on the Account and requiring an enforceable  written contract
between you and such customer upon terms acceptable to us.

      1.3.  Effect of Assignment. Without the necessity for further action, each
Assignment shall  automatically vest in us all of your right, title and interest
in and to the Assigned  Accounts  together  with (a) full power to collect,  sue
for,  compromise,  assign,  in whole or in part, or in any other manner  enforce
collection  thereof in our name or  otherwise,  (b) any notes or drafts  related
thereto,  (c) the contracts under which such Accounts arose,  (d) your books and
records  relating  thereto,   whether  written  or  recorded  electronically  on
computer-readable  discs or any other digital or machinereadable  form or medium
("Account  RECORDS'),  (e) any returned,  rejected or repossessed goods (if any)
giving rise to such Accounts, (f) your rights as an unpaid vendor or lienor, (g)
all rights of stoppage in transit, replevin,  repossession and reclamation,  (h)
all deposits and security  therefor and  guarantees  thereof,  (i) all rights to
insurance proceeds resulting  therefrom,  and (j) all payments or other proceeds
of the  foregoing in any form (all of the foregoing  being  included in the term
'Assigned  Accounts').  Nothing  contained in this  Agreement or any  Assignment
shall be deemed to constitute an assumption by us of any liability  with respect
to or impose any duty or  obligation  upon us in favor of any Account  Debtor or
any other third party in connection with the Accounts.

      1.4.  Account  Documentation.  Upon  acceptance  by us of  any  Assignment
Agreement,  you will deliver to us: (a) copies of all documents  evidencing  the
Accounts listed thereon and (b) such other  documentation as we require, in form
satisfactory  to us in all respects.  You will maintain all shipping  documents,
delivery  receipts and invoices  relating to Assigned  Accounts,  available  for
inspection  and copying by us, and you will deliver them to us promptly upon our
request.  Each sale of Accounts  will be  reflected  as a sale on your books and
financial   statements  in  accordance   with  generally   accepted   accounting
principles.

      1.5.  Exclusivity.  During the Term of this Agreement,  you will not sell,
factor,  assign,  or pledge any of your Accounts except to us or for our benefit
under this Agreement,

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2.    FEES AND PAYMENT

      2.1.  Purchase  Price.  The purchase price payable by us for each Assigned
Account (the "PURCHASE Price') shall be an amount equal to the net face value of
the  Account  less the sum of the  applicable  Discount  Fee and the  applicable
Processing Fee (subject to the adjustments provided in Paragraph 2.3).

      2.2.  Fees.  As used  herein with  respect to any  Assigned  Account,  the
following terms have the following meanings:

            2.2.1. "DISCOUNT FEE" means an amount equal to one percent (1.0%) of
our  Advance  Payment in respect of such  Account for each period of thirty (30)
days  or any  portion  thereof  elapsing  from  and  including  the  date of our
acceptance  of the  Account  to and  including  the date on which we shall  have
collected the Account in full in good funds, provided that in no event shall the
Discount Fee be less then  twenty-five  dollars  ($25.00).  Notwithstanding  the
foregoing,  if we  elect to  require  you to  repurchase  any  Assigned  Account
pursuant to the  provisions of Paragraph 4.1, the Discount Fee for such purposes
shall be

            2.2.2. "PROCESSING  FEE" means an  administrative  services fee at a
fluctuating  rate per annum equal to two percent  (2.0%) plus the WSJ Prime Rate
in effect from time to time  calculated on the  principal  amount of our Advance
Payment and accruing over the period elapsing from and including the date of our
acceptance  of the  Account  to and  including  the date on which we shall  have
collected  the Account in full in good funds.  As used herein,  "WSJ PRIME RATE"
means the consensus prime rate published by The Wall Street Journal from time to
time. For purposes of our Processing Fee, any change in the WSJ Prime Rate shall
take effect on the day  immediately  following the date of  publication  of such
change.

      2.3.  Payment.

            2.3.1. Upon our acceptance of each Assignment, we will pay to you on
account of the Purchase Price an amount equal to eighty-five  percent (85%) (the
"Advance RATE') of the aggregate net face value of the Assigned Accounts covered
thereby (the "Advance  Payment');  provided,  however,  that at our election and
upon notice to you at any time after the occurrence of an Event of Default,  the
Advance Rate shall be reduced by thirty percent (30%) (or such lesser percentage
as we in  our  sole  and  absolute  discretion  may  determine)  for  any or all
subsequent  Assignments or individual Assigned Accounts.  On or before the fifth
business day following the date on which we have  collected all of such Assigned
Accounts in full in good funds,  we will pay to you the balance of the  Purchase
Price for the Assigned  Accounts  minus all  returns,  credits,  allowances  and
discounts on the shortest or, at our option,  on any  alternative  terms of sale
offered by you to Account Debtors, and all other unpaid sums,  liabilities,  and
Obligations with respect to the Assigned  Accounts charged or chargeable to your
account under Section 3 or otherwise under this Agreement (Chargebacks').

            2.3.2. Upon our  receipt of any payment  with  respect to an Account
other than an  Assigned  Account,  so long as you are not in default of any your
Obligations  hereunder,  we shall remit such payment to you or, at your request,
apply  such  payment  as  you  may  direct,  subject  to  any  then  outstanding
Chargebacks. Remittances required by this subparagraph 2.3.2 will be paid to you
weekly except as otherwise directed by you.

      2.4.  Minimum  Volume Fee. Any provision of this Agreement to the contrary
notwithstanding,  if as of the close of any month the average monthly  aggregate
net face value of all  Accounts  offered by you and  purchased  by us during the
three-month  period then ended is less than  $750,000 (the  "GUARANTEED  MONTHLY
VOLUME'),  you will pay to us as a supplemental  fee for the month then ended an
amount  equal  to the  Discount  Fee we would  have  earned  on the  difference,
assuming collection within 30 days (the "MINIMUM VOLUME FEE').

      2.5.  Noncompliance  Fees.  Without limiting any of our general rights and
remedies for breaches of this Agreement by you:

            2.5.1. If you fail for any reason to include the legend  required by
the last sentence of Subparagraph 3.1.1 on any invoice  representing an Account,
we will assess and you will pay on demand a missing  notation  fee in the amount
of fifteen percent (15%) of the net face value of such Account.

            2.5.2. If you  receive  any payment on an Account and fail to comply
with the provisions of  Subparagraph  3.1.3,  we will assess and you will pay on
demand a misdirected  payment fee in the amount of fifteen  percent (15%) of the
net face value of such Account

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      2.6.  Exit Fee.  If you elect to  terminate  this  Agreement  pursuant  to
Subparagraph  8.2.1 and the effective date of termination is other than the last
day of the initial term or any renewal term, as the case may be, you will pay to
us on or before the  termination  date an exit fee equal to the Discount Fees we
would  have  earned  each  month  on the  Guaranteed  Monthly  Volume  (assuming
collection  within 30 days)  multiplied by the number of months remaining in the
term,  duly prorated as necessary for any partial  months.  Such fee shall be in
addition to, and not in lieu of, the Minimum Volume Fee, if any,  assessable for
the month in which this Agreement is terminated.

      2.7.  Charqe in Lieu of  Payment.  In our sole  discretion,  we may charge
your  account for all fees and other  amounts  you are  required to pay us under
this section.

3.    COLLECTION OF ACCOUNTS

      3.1.  Collection Procedure.

            3.1.1. During the term of this  Agreement and  continuing  until all
Assigned  Accounts and all of your  Obligations  hereunder  have been paid fully
paid and  performed,  you shall  promptly  (and we at our option  may) notify in
writing all persons obligated to make payments on or with respect to any Account
(collectively,  "Account  Debtors')  (i) that you have  granted to us a security
interest in the Account  or, if  applicable,  that the Account has been sold and
that the amount due or to become due has been  assigned to us, (ii) that payment
is to be made to us (and not to you) into a  designated  lockbox  over  which we
have  exclusive  dominion,  control  and  power  of  access  and  withdrawal  (a
(degree)lockbox(degree)),  and (iii) that all checks and other  items of payment
in respect of the Account are to be made payable to our order.  You will (and we
at our option may) obtain from each Account  Debtor  written  acknowledgment  by
such Account Debtor confirming its receipt of such notice. On and after the date
hereof, you shall also include such notice plainly and conspicuously as a legend
on the face of each invoice you issue representing an Assigned Account.

            3.1.2. You  hereby  authorize  us at our  option  and  in  our  sole
discretion to collect and receive payments  directly from Account Debtors in our
own name. If we elect to exercise  this option with respect to any Account,  you
shall  (and  we at our  option  may)  include  in  the  notices  required  under
Subparagraph 3.1.1 a further statement that the Account  represented thereby has
been sold and  assigned to us and that the Account  Debtor shall make all checks
in respect of the Account payable to us or our designee.

            3.1.3. If  you  receive  any  payment  on  any  Account,  you  shall
immediately  remit  such  payment  in the  form  received  (with  any  necessary
endorsement)  directly to us. Until so  remitted,  you will hold such payment in
trust for us separate and apart from all of your other funds.

      3.2.  Power of Attorney. You hereby irrevocably constitute and appoint us,
or any of our  agents or  employees,  as your  lawful  attorney-infact  (without
requiring us to act as such), coupled with an interest,  to exercise at any time
any of the following  powers:  (i) to receive,  endorse and deposit all payments
from  Account  Debtors;  (ii) to transmit  to any party the notices  required by
Subparagraph 3.1.1; (iii) to institute any proceedings deemed by us necessary to
effect  collection  of  Accounts;  (iv) to settle,  compromise  or litigate  any
dispute concerning any Account;  and (v) to execute in your name such documents,
instruments  and  affidavits  as we may  require  from  time to time in order to
evidence and perfect our security interest in the Collateral or (without waiving
your representation in Subparagraph 5.5.5) to satisfy any statutory condition to
payment of an  Account  under  applicable  law.  Any act of ours as your  lawful
attorney-in-fact  shall  not  render  us  liable  for any  acts of  omission  or
commission, nor for any error of judgment or mistake of fact or law.

      3.3.  Costs and Expenses.  You will reimburse us on demand for any and all
fees,  costs, and expenses  (including but not limited to reasonable  attorneys'
fees) incurred by us in connection with protecting,  maintaining,  preserving or
enforcing your Accounts and/or our rights under this  Agreement;  making lien or
title examinations or filing notices with respect to your Accounts; defending or
prosecuting any action or proceeding  related to this Agreement;  and filing and
recording financing  statements  (including  amendments thereto and continuation
statements  thereof) and  termination  statements  under the UCC relating to our
security interest in the Collateral.

      3.4.  Disputes.  You will notify us promptly of any Dispute  concerning an
Account.  If we request  you to do so, you will use your best  efforts to settle
the Dispute. Alternatively, we may (but shall be under no obligation to) attempt
to settle,  compromise or litigate the Dispute upon such terms as we in our sole
discretion deem  advisable,  for your account and risk and at your sole expense.
In no event shall you shall  settle,  compromise  or adjust any Account or grant
any additional discounts, allowances or credits thereon without in each case our
prior written  consent.  As used herein,  "Dispute"  means any actual or alleged
defense,  counterclaim,  offset,  dispute or other claim asserted by the Account
Debtor with respect to an Account  other than the Account  Debtor's  Insolvency.
'INSOLVENCY," with respect to an Account Debtor means the financial inability of
an Account Debtor to make payment at maturity unless the relevant Account is the
subject of a Dispute.

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      3.5.  Indemnification.  You  will  indemnify  and  defend  us and  hold us
harmless from and against any and all  liabilities,  claims,  costs and expenses
(including  but not  limited  to  reasonable  attorneys'  fees and court  costs)
related to or arising out of our commercially  reasonable  efforts to collect or
attempt to collect any Account.

      3.6.  No  Agency.   Any  provision  of  this  Agreement  to  the  contrary
notwithstanding,  nothing in this Agreement  shall be construed to constitute us
as your agent or to obligate us to assume any of your  obligations  with respect
to any  Account.  We will not have any  liability  for any error or  omission or
delay occurring in the settlement, collection or payment of any Account.

4.    RECOURSE

      4.1.  Repurchase  of Accounts.  In the event that (a) an Assigned  Account
becomes  the  subject  of a  Dispute,  (b)  there  exists  any  breach  of  your
representations, warranties or covenants under this Agreement with respect to an
Assigned  Account,  (c)  an  Assigned  Account  is not  paid  on or  before  the
expiration  of ninety  (90) days from its  invoice  date (such an Account  being
hereinafter  referred  to as a  "Late  Account"),  or  (d)  we  reasonably  deem
ourselves  insecure  with respect to any  Assigned  Account in light of material
changes in the creditworthiness of the Account Debtor or otherwise,  then and in
any such event you shall immediately upon demand by us (whether written or oral)
repurchase  the Account from us for a purchase  price equal to the amount of the
Advance Payment for such Account plus the applicable Discount Fee (calculated to
the  date  of  repurchase)  together  with  any  and all  other  costs  expenses
associated with such Account minus the paid portion of the Account,  if any (the
"ACCOUNT REPURCHASE  Price').  With respect to any Assigned Account that becomes
the subject of a Dispute, your obligations under this paragraph are irrespective
of any accord and  satisfaction of such Account as against the Account Debtor by
operation  of Section  3-311 of the  Uniform  Commercial  Code as adopted and in
effect in the applicable jurisdiction (the "UCC').

      4.2.  Repurchase on Default.  Without  limiting our other  remedies  under
this Agreement or applicable  law, upon the occurrence of an Event of Default as
hereinafter defined, you shall immediately upon demand by us (whether written or
oral)  repurchase  from us all outstanding  Assigned  Accounts for the aggregate
Account Repurchase Price calculated in accordance with Paragraph 4.1

5.    REPRESENTATIONS AND WARRANTIES

To induce us to  purchase  Accounts  from time to time,  you make the  following
representations  and  warranties,  each of which will survive the  execution and
delivery of this Agreement and will be deemed to be continuous and renewed as of
the  date  of our  acceptance  of  each  Assignment.  Such  representations  and
warranties shall survive the termination of this Agreement.

      5.1.  General. You are a corporation duly organized,  existing and in good
standing  under the laws of Delaware.  The preamble to this agreement sets forth
truly and accurately  your exact legal name as registered in such  jurisdiction.
You do  business  exclusively  under  such name and do not use any trade name or
other fictitious name.

      5.2.  Authority  and  Enforceability.  You  represent and warrant that you
have all  requisite  power and  authority  to execute,  deliver and perform this
Agreement,  including each Assignment  delivered  hereunder.  This Agreement has
been duly and validly  executed and delivered by you and constitutes your legal,
valid,  and binding  obligation  enforceable  against you in accordance with its
terms. The execution, delivery and performance of this Agreement by you does not
contravene your articles of  incorporation,  by-laws or operating or partnership
agreement, as applicable,  or any other agreement,  instrument, or commitment to
which you are a party or by which you or any of your  assets or  properties  are
bound.

      5.3.  Place of Business.  Your principal  place of business and your books
and records relating to the Accounts are located at the address set forth at the
end of this Agreement.

      5.4.  Collateral.  You are the sole owner of the Collateral free and clear
of all liens and encumbrances  (including liens and encumbrances  subordinate to
our lien and security  interest),  except for those created by this Agreement or
permitted  by us in writing.  Except as  otherwise  disclosed  on  Schedule  5.4
attached and made a part hereof, none of your inventory is stored with a bailee,
warehouseman or similar party or is under consignment to or from any person. All
of your  inventory is currently  salable or usable in the normal  course of your
business.

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      5.5.  With Respect to Accounts. With respect to each Assigned Account, you
represent and warrant that:

            5.5.1. You are the sole owner of the  Account  free and clear of all
liens and encumbrances (including liens and encumbrances subordinate to our lien
and security interest),  except for those created by this Agreement or permitted
by us in writing.

            5.5.2. You are not  affiliated  with  and do not  own,  control,  or
exercise  dominion,  in any way  whatsoever,  over the  business  of the Account
Debtor.

            5.5.3. The Account  represents an accurate and undisputed  statement
of indebtedness of the Account Debtor on account of a bona fide sale or lease of
goods or the performance of services by you.

            5.5.4. The Account is the valid obligation of and is legally binding
upon the Account  Debtor  enforceable  against the Account  Debtor in accordance
with its terms.  All signatures and  endorsements  appearing on the invoices and
documents  relating  to the  Accounts  are  genuine,  and  all  signatories  and
endorsers have full capacity and authority and were fully authorized to contract
for the  purchase  or lease of the  goods  and/or  services  giving  rise to the
Account.

            5.5.5. The Account is not subject to any Dispute,  defense,  offset,
counterclaim or any allowance, deduction, contingency or condition.

            5.5.6. The  Account  is not  on a  bill-and-hold,  guaranteed  sale,
sale-and-return, sale on approval, consignment or any other repurchase or return
basis.

            5.5.7. To the  best of your  knowledge  based  on due  inquiry,  the
Account Debtor is not Insolvent.

            5.5.8. The sale of the  Account  to us is  accurately  and  properly
entered and reflected on your books and records.

6.    COVENANTS

      6.1.  Periodic Reports. Until full and indefeasible payment of all of your
Obligations  hereunder,  you  will  furnish  to  us  the  following  information
regarding  your  operations  and  financial  condition  from  time  to  time  as
specified:

            6.1.1. Within  twenty  (20) days  after  the  close of each  month a
balance sheet,  income statement,  and cash flow statement as of the last day of
such month and year to date;

            6.1.2. Within  five (5) days after the close of each  month,  (a) an
accounts  payable aging and list and (b) an accounts  receivable  aging and list
(whether or not such  accounts  are Assigned  Accounts),  in each case as of the
last day of such  month,  in such  form and  containing  such  detail  as we may
reasonably require;

            6.1.3. Copies of all receipts and other  evidence of your payment of
United States withholding, as such payments are made; and

            6.1.4. Within  ninety (90) days  following  the close of your fiscal
year, a balance  sheet and income  statement as of the close of such fiscal year
and for the year then ended.

      6.2.  Standards.  All  financial  statements  provided  by you under  this
Section 6 shall be prepared in accordance  with  generally  accepted  accounting
principles,  consistently applied. You hereby represent and warrant that any and
all  financial  statements  provided by you are and shall be true,  accurate and
complete.

      6.3.  Field  Audits.  Upon  reasonable  notice by us, you will  permit any
authorized  representative  designated  by us to visit  your  place or places of
business  during  business hours and to inspect your books of account,  records,
correspondence  and other  documents  and to make copies  thereof  and  extracts
therefrom.  . . Any such inspection conducted after an Event of Default shall be
at your sole  cost and  expense  and you will  reimburse  us for such  costs and
expenses on demand.

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      6.4.  Other Covenants.  Until full and indefeasible payment of all of your
Obligations hereunder:

            6.4.1. You shall:

                  6.4.1.1. Comply in all material  respects with all  applicable
laws, rules, regulations and orders applicable to your business;

                  6.4.1.2. Maintain  insurance  with  responsible  and reputable
insurance  companies or  associations in such amounts and covering such risks as
is  consistent  with past  practice  and/or as is usually  carried by  companies
engaged in similar businesses in the same general areas in which you operate;

                  6.4.1.3. Maintain and preserve of your assets and  properties,
real and personal,  in good working order and condition,  ordinary wear and tear
excepted;

                  6.4.1.4.  Preserve and maintain your  corporate  existence and
good standing, rights, franchises and privileges under applicable law;

                  6.4.1.5.  Pay and  discharge  before  the  same  shall  become
delinquent (i) all taxes, assessments and governmental charges or levies imposed
upon you or your property, and (ii) all lawful claims which, if unpaid, might by
operation of law or otherwise become a lien upon your property;

                  6.4.1.6.  Maintain  yourself in good standing with any and all
federal and state licensing and regulatory authorities and governmental agencies
having jurisdiction over your activities; and

                  6.4.1.7. Comply fully with all laws, rules,  regulations,  and
executive  orders  of  federal,  state  and  municipal   governments,   bureaus,
commissions,  agencies  or any of  them  applicable  to you or  your  assets  or
properties.

            6.4.2. Without  our  prior  written  consent,   which  will  not  be
unreasonably withheld. you shall not:

                  6.4.2.1. Permit or consent to the  creation or  incurrence  by
you of any  indebtedness  or  obligation  for borrowed  money,  other than to us
pursuant to this Agreement;

                  6.4.2.2.  Make  any  material  change  in the  nature  of your
business; or

                  6.4.2.3.  Merge  or   consolidate   with  any  other  firm  or
corporation.

                  6.4.2.4. Grant, create, incur or suffer or permit to exist any
mortgage,  pledge,  security  interest in or lien upon, or for any other purpose
assign or transfer,  either  absolutely  or as collateral  security,  any of the
Collateral  except to or in favor of us pursuant to this  Agreement or as we may
otherwise agree in writing.

7.    SECURITY AGREEMENT

      7.1.  Grant of Security Interest;  Collateral  Defined.  To secure payment
and  performance of all of your  obligations  under this  Agreement,  including,
without  limitation,  repurchase and indemnity  obligations  and obligations for
costs and expenses (collectively, your "OBLIGATIONS'), you hereby pledge, assign
and  grant  to us a  continuing  lien and  security  interest  in the  following
property,  both now owned and  existing  and  hereafter  created,  acquired  and
arising, regardless of where located (collectively, the "COLLATERAL'):

            7.1.1. All  of  your  accounts  whether  or  not  accepted  by us or
specifically sold to us;

            7.1.2. All of your goods, including but not limited to inventory and
equipment;

            7.1.3. All of your general  intangibles,  chattel paper,  commercial
tort claims,  deposit accounts,  documents,  instruments,  investment  property,
letter-of-credit rights, letters of credit, and money;

            7.1.4. All cash and  non-cash  proceeds  and  products of any of the
foregoing,  including  any claim against third parties in any way related to the
foregoing;

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            7.1.5. All rights  which you now have or  hereafter  may have to the
payment of money not  otherwise  included in the  foregoing,  including  without
limitation tax refunds and proceeds of insurance of every kind and  description;
and

            7.1.6. All  books  and  records  relating  to any of the  foregoing,
including but not limited to hard drives,  compact disks,  floppy disks,  and/or
other digital storage media comprising such records in whole or in part.

      7.2.  Financing  Statements.  Pursuant  to Section  9-502 of the UCC,  you
hereby  authorize us to file such  financing  statements  (including  amendments
thereto and  continuation  statements  thereof) as we may reasonably  require in
order to perfect our security interest in the Collateral

      7.3.  Defined  Terms.  As  used  in  this  Section,   uncapitalized  terms
describing categories of Collateral shall have the meaning, if any, respectively
ascribed to such terms under the UCC.

8.    TERM AND TERMINATION

      8.1.  Initial Term;  Renewal.  The term of this Agreement shall be one (1)
year,  commencing on the date of the first above written.  Unless  terminated in
accordance  with  Paragraph 8.2, this Agreement  shall  automatically  renew for
successive  one (1) year periods  without the necessity of any further notice or
action on the part of either party hereto.  (The period of effectiveness of this
Agreement,  including  the  initial  term and any  renewal  term,  is  sometimes
referred to herein as the' Term.')

      8.2.  Termination.

            8.2.1. Subject to Paragraph 2.6, you may terminate this Agreement by
written  notice to us not less than sixty (60) days prior to the effective  date
of termination stipulated in such notice.

            8.2.2. We may  terminate  this  Agreement  (i) at any  time  for our
convenience by written notice to you upon not less than sixty (60) days prior to
the effective date of termination  stipulated in such notice or (ii) immediately
upon written or oral notice to you upon the occurrence of an Event of Default.

      8.3.  Survival of Terms.  Notwithstanding the foregoing, the provisions of
this Agreement and all of our rights and interests  hereunder  shall survive any
termination  pursuant  to  Paragraph  8.2 and shall  continue  in full force and
effect until all Assigned  Accounts and all of your  Obligations  hereunder have
been paid fully paid and performed.

      8.4.  Termination Statement.  At any time after later of (i) the effective
date of the termination of this Agreement or (ii) the date on which all Assigned
Accounts  and all of your  Obligations  hereunder  have been paid fully paid and
performed, you may request and we will deliver to you UCC termination statements
with  respect  to  any  and  all  recorded  financing  statements  covering  the
Collateral  then  in  our  favor,  provided  such  request  is  in  writing  and
accompanied  by a  written  general  release  by you in our  favor  in form  and
substance satisfactory to us and our counsel. To the maximum extent permitted by
law, you hereby waive any and all  statutory  rights under  Section 9-509 of the
UCC to  require  us to  deliver  UCC  termination  statements  in respect of the
Collateral unless and until the conditions of this section have been satisfied.

9.    DEFAULT AND REMEDIES

      9.1.  Events of  Default.  As used in this  Agreement,  "EVENT OF Default"
means any of the following:

            9.1.1. Any material  breach by either of you of any term,  covenant,
condition, representation or warranty under this Agreement.

            9.1.2. Without  limiting  the  generality  of  the  foregoing,   the
existence   of   unresolved   Disputes   or  any  breach  or  breaches  of  your
representations,  warranties or covenants under this Agreement affecting or with
respect to Assigned  Accounts  which,  in the  aggregate,  constitute  or exceed
thirty percent (30%) (the "DEFAULT PERCENTAGE"), by face value or number, of all
then outstanding Assigned Accounts.

                                       7
<PAGE>

            9.1.3. The  accumulation  of  Late  Accounts  (whether  or not  then
outstanding)  since  the  commencement  of  the  Term  which  in  the  aggregate
constitute  or exceed,  by face value or number,  the Default  Percentage of all
Accounts assigned hereunder through date.

            9.1.4. Any  failure by you to pay or  reimburse  us, as the case may
be, any monetary amount to which we are entitled  hereunder as and when the same
shall become due.

            9.1.5. Any  material  adverse  change in the  management,  financial
condition or business  prospects  of either of you or those of any  guarantor of
your Obligations.

            9.1.6. The  discontinuance  or suspension of any business  operation
currently conducted by either of you.

            9.1.7. Either of you becoming insolvent or unable to meet your debts
as they mature, or the commencement  against either of you of any proceeding for
relief under any  provision of any federal or state  bankruptcy,  insolvency  or
other  similar  law,  or the filing or issuance  against you of any  injunction,
attachment,  judgment or lien on any of your property,  or the  appointment of a
receiver, custodian or trustee of any kind for you or any of your property.

      9.2.  Remedies,  In addition to any other  remedies  available to us under
this  Agreement or applicable  law, upon and after the occurrence of an Event of
Default:

            9.2.1. We will  have the  right to  enforce  against  you  immediate
payment of all of your Obligations.

            9.2.2. With respect to the Collateral, we will have and may exercise
all of the rights of a secured party under the UCC.

            9.2.3. You hereby  authorize and empower any attorney  designated by
us or any clerk of any court of record to appear  for you in any court of record
and confess judgment  against you without prior hearing,  in favor of us for and
in the  amount  of your  Obligations  then  outstanding  plus  costs of suit and
attorneys' fees in an amount equal to 10% of the Obligations  then  outstanding.
Such authority and power may be exercised on one or more occasions, from time to
time,  in the  same or  different  jurisdictions,  as  often  as we  shall  deem
necessary or desirable,  for all of which this  Agreement  shall be a sufficient
warrant.

            9.2.4. We may notify the postal  authorities  to change the  address
for delivery of your mail to such address as we may designate and shall have the
right to  receive,  open,  and  maintain in our custody any and all of your mail
thereafter;  provided,  however,  that we will  turn  over to you any  mail  not
related directly or indirectly to the enforcement of our remedies hereunder.

      9.3.  Remedies  Cumulative.  Each  right,  power and remedy  provided  for
herein or otherwise  existing shall be cumulative and concurrent and shall be in
addition to every other right,  power and remedy existing  hereunder,  by law or
otherwise. The exercise by us of any one or more such rights, powers or remedies
shall not preclude the  simultaneous  or later exercise by us of any or all such
other rights, powers or remedies.

      9.4.  Liability  Joint  and  Several.  The  liability  of each of you with
respect to the Obligations  shall be joint and several.  The breach by either of
you (the  "BREACHING  PARTY")  of an  Obligation  shall  constitute  an Event of
Default with  respect to both of you and each of you shall be  primarily  liable
therefor.  Upon any such  breach,  our right to avail  ourselves of our remedies
hereunder with respect to the non-Breaching Party and its Collateral shall in no
way be  conditioned  upon or  limited by any  attempt by us to collect  from the
Breaching Party or any resort or recourse by us to any Collateral pledged by the
Breaching Party.

                                       8
<PAGE>

10.   ARBITRATION

      Any claim or demand arising out of any alleged breach of this Agreement or
arising out of any dispute or controversy under or relating to this Agreement in
which the amount in controversy  is $100,000 or less,  other than any confession
of judgment  proceeding  pursuant to Subparagraph  9.2.3,  shall be decided by a
single arbitrator under the Rules of the American Arbitration  Association.  The
prevailing party, as determined by the arbitrator,  shall be awarded  reasonable
attorneys' fees and costs  (including all  arbitration  fees and expenses of the
arbitrator)  incurred by that party in connection  with the  arbitration and any
postarbitration  proceedings  to  enforce  the  award or  otherwise.  The  award
rendered by the arbitrator shall be final and binding on both of us and judgment
on such  award  may be  entered  by  either  party  in any  court  of  competent
jurisdiction.  The  arbitration  provisions  hereof shall,  with respect to such
controversy  or dispute,  survive the  termination  of this  Agreement.  Nothing
herein contained shall be deemed to give the arbitrator any authority, power, or
right to alter,  change,  amend,  modify,  add to, or  subtract  from any of the
provisions of this Agreement.

11.   MISCELLANEOUS

      11.1. Notices.  Notices  shall be  deemed  given to a party  when  sent or
dispatched  to such party by certified or registered  mail or private  overnight
express mail,  postage or charges prepaid,  or by facsimile copy, at the address
of such party set forth  below its  signature  hereto,  or to such other  notice
address as a party may designate by written notice to the other party.

      11.2. Binding Effect. This Agreement will bind you and your successors and
assigns, and will inure to the benefit of us and our successors and assigns.

      11.3. No Assiqnment.  You may not assign or transfer any of your rights or
obligations  under this  Agreement  without  our prior  written  consent,  which
consent  may  be  withheld  by us in  our  sole  and  absolute  discretion.  Any
assignment or transfer prohibited by this paragraph shall be null and void.

      11.4. Complete  Agreement.  This  Agreement  and the  related  Assignments
constitute  the entire  agreement  between us with respect to the subject matter
hereof and all previous  agreements  or  discussions  between us relating to the
subject matter hereof,  written or oral, are hereby terminated and/or superseded
by this  Agreement.  This Agreement may be amended or modified only by a written
instrument signed by both parties.

      11.5. No Waiver. No delay or failure by us in exercising any of our rights
or remedies  shall  operate as a waiver of such or of any other right or remedy,
and no waiver shall be valid unless in writing signed by us and then only to the
extent therein set forth.

      11.6. Governinq Law, Etc. This Agreement shall be deemed to have been made
in the State of Maryland and shall be construed and enforced in accordance with,
and the  validity and  performance  hereof shall be governed by, the laws of the
State of Maryland, without regard to conflict of laws principles.

      11.7. Venue and Jurisdiction.  Any judicial or arbitral proceeding arising
out of or relating to this Agreement shall be brought and adjudicated (a) in the
case of any  Original  Claim  made  by you  against  us,  solely  in  Baltimore,
Maryland,  and (b) in the case of any Original  Claim made by us against you, in
Baltimore,  Maryland, or, at our sole and exclusive option,  anywhere within the
jurisdiction  where you are domiciled or have your principal  place of business.
As used in this Paragraph,  "ORIGINAL CLAIM" means the first formally  commenced
proceeding in connection  with a matter or series of related  matters,  it being
understood  and  agreed  that  any  subsequently   asserted  claim,  defense  or
counterclaim  arising  out of or  relating  to such  matter or matters  shall be
subject to the same venue as the  Original  Claim.  For purposes of any judicial
proceeding under this Agreement,  you hereby  irrevocably  consent,  submit, and
waive  any and all  objections  to the  personal  jurisdiction  of the state and
federal courts of the State of Maryland over you and your affiliates.

      11.8. Further Assurances. Each of us shall do, take, execute,  acknowledge
if required and deliver such further and additional  acts,  actions,  documents,
instruments or writings not specifically referred to herein as may be necessary,
required,  proper, desirable or convenient for the purpose of fully effectuating
the provisions hereof.

      11.9. Construction.  This Agreement has been negotiated by the parties and
shall be  construed  and  interpreted  fairly in  accordance  with its terms and
without any strict construction in favor of or against either party.

      11.10. WAIVER OF JURY TRIAL.  EXCEPT AS OTHERWISE  PROVIDED IN SECTION 10,
ANY SUIT,  ACTION OR  PROCEEDING,  WHETHER  CLAIM OR  COUNTERCLAIM,  BROUGHT  OR
INSTITUTED  BY EITHER PARTY HERETO OR ANY SUCCESSOR OR ASSIGN OF ANY PARTY UNDER
OR WITH  RESPECT TO THIS  AGREEMENT  OR WHICH IN ANY WAY  RELATES,  DIRECTLY  OR
INDIRECTLY,  TO THIS AGREEMENT OR ANY EVENT,  TRANSACTION OR OCCURRENCE  ARISING
OUT OF OR IN ANY WAY  CONNECTED  WITH THIS  AGREEMENT,  OR THE  DEALINGS  OF THE
PARTIES WITH RESPECT THERETO,  SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY.
EACH PARTY HEREBY KNOWINGLY,  VOLUNTARILY AND IRREVOCABLY  WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING.

                                       9
<PAGE>

      IN WITNESS WHEREOF,  the parties hereto have executed this Agreement under
seal as of the day and year first above written.

ASSIGNOR:

ACORN HOLDING CORP.                          ROCKLAND CREDIT FINANCE LLC

By_____________________________(SEAL)        By___________________________(SEAL)
    [notarized signature of
       authorized officer]                   Name:______________________________

Print Name:__________________________        Title:_____________________________

Title:_______________________________        6 Park Center Court, Suite 212
                                             Owings Mills, MD 21117
Address:_____________________________        Phone #: 410-902-0393
_____________________________________        Fax #: 410- 902-0893
_____________________________________

Fax #:_______________________________
Taxpayer I.D./SSN ff:________________

VALENTEC SYSTEMS, INC.

By___________________________________
_______________________________(SEAL)
  [notarized signature of
      authorized officer]

Print Name:__________________________

Title:_______________________________

Address:_____________________________
_____________________________________
_____________________________________

Fax #:_______________________________
Taxpayer I.D./SSN #:_________________

State of ________)
                 ) TO WIT:
County of _______)

      I HEREBY CERTIFY that on this day of ________,  2005,  before me, a Notary
Public of said State, personally appeared ____________________________, known to
me (or satisfactorily proven) to be the  _____________________  of Acorn Holding
Corp., whose name is subscribed to the foregoing  Agreement and who acknowledged
that he/she executed the same for the purposes therein contained.

      WITNESS my hand and Notarial Seal.
                                             ___________________________________
                                                        Notary Public

My Commission Expires:

                                       10
<PAGE>

State of_________)
                 ) TO WIT:
WIT: County of___)

      I HEREBY CERTIFY that on this _ day  of______________,  2005, before me, a
Notary  Public of said  State,  personally  appeared  _________________________,
known to me (or  satisfactorily  proven) to be the____of  Valentec,  Inc., whose
name is subscribed to the foregoing  Agreement and who acknowledged  that he/she
executed the same for the purposes therein contained.

      WITNESS my hand and Notarial Seal.

                                             ___________________________________
                                                        Notary Public
My Commission Expires:

                                       11
<PAGE>

                                    EXHIBIT A
                          TO MASTER FACTORING AGREEMENT

                               FORM OF ASSIGNMENT

                                  See attached.

                                       12
<PAGE>

                                                                  ASSIGNMENT NO.

                 ASSIGNMENT AND TRANSFER OF ACCOUNTS RECEIVABLE

ASSIGNOR: Valentec Systems, Inc.             ASSIGNEE:
          Acorn Holding Corp.
                                             ROCKLAND CREDIT FINANCE LLC
                                             6 Park Center Court, Suite 212
                                             Owings Mills, MD 21117

      1.    Assignment  of  Accounts.  Pursuant  to and subject to the terms and
conditions  of that certain  Master  Factoring  Agreement  between  Assignor and
Assignee  (the  "FACTORING  AGREEMENT"),  Assignor  hereby  sells,  assigns  and
transfers  to  Assignee  all of its  right,  title  and  interest  in and to the
Accounts arising from the invoices identified in Schedule A .

      2.    Advance  Payment:  Assignor  hereby  acknowledges  and  confirms the
payment by Assignee and the receipt by Assignor of the Advance  Payment shown on
Schedule A.

      3.    Representations and Warranties. Assignor hereby confirms, represents
and  warrants  to  Assignee  that all  representations  and  warranties  made by
Assignor  to  Assignee in the  Factoring  Agreement  are true and correct in all
respects on Effective  Date of this  Assignment and that no Default exists under
the Factoring Agreement on Effective Date.

      4.    Effective  Date.  The effective date of the transfer of the Assigned
accounts  pursuant to this Assignment  (the "EFFECTIVE  DATE") shall be the date
set forth below as the effective date of Assignee's acceptance.

      5.    Defined Terms.  Capitalized terms used herein and not defined herein
shall have the  respective  meanings  ascribed  to such  terms in the  Factoring
Agreement.

            IN WITNESS  WHEREOF,  the  parties  have  executed  this  Assignment
intending to be legally bound as of the Effective Date.

ASSIGNOR: VALENTEC SYSTEMS, INC.             ROCKLAND CREDIT FINANCE LLC
          ACORN HOLDING CORP.

_____________________________________
 [full corp rate name of Assignor]           By_________________________________

By___________________________________        Name:______________________________
  [signature of authtiri ed officer]
                                             Title:_____________________________

Print Name:__________________________        Effective Date of Acceptance:______

Title:_______________________________

                                       1
<PAGE>

                                   SCHEDULE A
                TO ASSIGNMENT AND TRANSFER OF ACCOUNTS RECEIVABLE

Assignor: Valentec Systems, Inc./Acorn Holding Corp.

Assignment #:________________________

Effective Date:______________________

                                ASSIGNED ACCOUNTS

The  Account(s)  identified  below and on the invoices,  contracts  and/or other
evidence  thereof  attached  hereto,  if any,  is/are  being sold,  assigned and
transferred by Assignor to ROCKLAND CREDIT FINANCE LLC pursuant to the foregoing
Assignment.

  ACCOUNT DEBTOR    INVOICE   INVOICE   P.O./CONTRACT    NET FACE     TERMS OF
    (CUSTOMER)         NO.     DATE          NO.         AMOUNT($)      SALE
  --------------    -------   -------   -------------   ----------    ---------

                   (A) TOTAL AMOUNT OF THIS ASSIGNMENT: $
                   (B) ADVANCE RATE: __%
                   (C) TOTAL ADVANCE REQUESTED (LINE A X LINE B): $_____________

                                       2

<PAGE>

                                  SCHEDULE 5.4

      INVENTORY STORED WITH THIRD PARTY, BAILEE, WAREHOUSEMAN OR CONSIGNEE

Name of Baileel                                      Address of Third Party
Warehousman/Consignee     Location of Inventory      if Other Than Location of
                                                     Inventory

1.___________________     _______________________    ___________________________

                          _______________________    ___________________________

                                                     Contact:___________________
                                                     Phone #:___________________
                                                     Fax #______________________
                                                     Email Address:_____________

2.___________________     _______________________    ___________________________

                          _______________________    ___________________________

                                                     Contact:___________________
                                                     Phone #:___________________
                                                     Fax #______________________
                                                     Email Address:_____________

3.___________________     _______________________    ___________________________

                          _______________________    ___________________________

                                                     Contact:___________________
                                                     Phone #:___________________
                                                     Fax #______________________
                                                     Email Address:_____________

4.___________________     _______________________    ___________________________

                          _______________________    ___________________________

                                                     Contact:___________________
                                                     Phone #:___________________
                                                     Fax #______________________
                                                     Email Address:_____________

                                       3EXHIBIT 99.4

                        REVOLVING CREDIT PROMISSORY NO IL

$7,500,000.00                                                  September 1, 2005

      FOR VALUE RECEIVED, the undersigned ACORN HOLDING CORP. and VALENTEC SYS I
EMS, INC., its wholly owned subsidiary,  each a Delaware corporation  (together,
"Makers"),  jointly and severally promise to pay to the order of ROCKLAND CREDIT
FINANCE LLC, a Maryland  limited  liability  company  (which,  together with its
successors, endorsees and assigns, is hereinafter referred to as "Lender"), at 6
Park Center Court,  Owings Mills,  MD 21117, or such other place as Lender shall
designate  from time to time,  the  principal  sum of SEVEN MILLION FIVE HUNDRED
THOUSAND AND 00/100 DOLLARS  ($7,500,000.00)  (the "Principal  Sum"), or so much
thereof as may be advanced by Lender  pursuant to the Agreement (as  hereinafter
defined),  together with interest  thereon at the  Applicable  Rate and Lender's
Processing  Fee, in a single payment of principal and accrued  interest and fees
on the Line of Credit Termination Date.

      This  Note is being  delivered  in  connection  with that  certain  Master
Factoring  Agreement  between  Makers  and  Lender  and  Addendum  No. 1 thereto
(together, the "Agreement"),  each dated the date hereof. Capitalized terms used
but not  defined in this Note have the  meanings  ascribed  to such terms in the
Agreement.

      Lender is hereby authorized as Makers' attorney-in-fact to note on Annex A
hereto the borrowings,  payments and reborrowings of Makers pursuant to the Line
of Credit and such notations by Lender shall be definitive evidence thereof. The
terms and conditions of this Note, in addition to those set forth above,  are as
follows:

      1.    Attorneys'  Fees. If this Note is placed in the hands of an attorney
for collection,  whether suit is brought or not, reasonable  attorneys' fees and
expenses in addition to the amount due hereon shall, to the extent  permitted by
law, be collectible herewith upon demand by the holder of this Note.

      2.    Interest  Year.  All  computations  of interest shall be made on the
basis of a year of three hundred sixty-five (365) days.

      3.    Application  of Payments,  Etc. All payments made on account of this
Note shall be applied first to fees and charges accruing hereunder, if any, then
to accrued and unpaid interest,  and the remainder,  if any, shall be applied to
the unpaid  Principal Sum. All payments on account of this Note shall be paid in
lawful money of the United States of America in immediately available funds.

      4.    Security. Pursuant to the Agreement, Makers have granted to Lender a
security  interest  in  Collateral,  comprising  substantially  of the assets of
Makers,  as  security  for the  payment  and  performance  by  Makers  of  their
obligations under this Note.

      5.    Partial Invalidity.  In the event any provision of this Note (or any
part  of any  provision)  is held by a court  of  competent  jurisdiction  to be
invalid, illegal, or unenforceable in any respect, such invalidity,  illegality,

                                       1
<PAGE>

or  unenforceability  shall not affect any other provision (or remaining part of
the  affected  provision)  of this Note;  but this Note shall be construed as if
such invalid, illegal, or unenforceable provision (or part thereof) had not been
contained  in this  Note,  but only to the  extent it is  invalid,  illegal,  or
unenforceable.

      6.    Governing  Law.  This Note shall be  governed  by and  construed  in
accordance with the State of Maryland.

      7.    JURISDICTION;  WAIVER  OF RIGHT TO JURY  TRIAL.  EACH  MAKER  HEREBY
IRREVOCABLY  CONSENTS  TO THE  PERSONAL  JURISDICTION  AND VENUE OF ANY STATE OR
FEDERAL COURT  LOCATED  WITHIN THE STATE OF MARYLAND FOR PURPOSES OF ANY AND ALL
ACTIONS AND PROCEEDINGS  ARISING UNDER OR PURSUANT TO THIS NOTE OR ARISING UNDER
OR PURSUANT TO THE AGREEMENT.  EACH MAKER HEREBY IRREVOCABLY WAIVES ITS RIGHT TO
A JURY TRIAL IN CONNECTION  WITH ANY SUCH ACTION OR  PROCEEDING  AND AGREES THAT
ANY SUCH ACTION OR  PROCEEDING  SHALL BE TRIED  SOLELY  BEFORE THE COURT AND NOT
BEFORE A JURY.

      8.    Miscellaneous.  Each right,  power, and remedy of Lender as provided
for in this  Note or the  Agreement,  or now or  hereafter  existing  under  any
applicable  law or otherwise  shall be cumulative and concurrent and shall be in
addition to every other right, power, or remedy provided for in this Note or now
or hereafter existing under any applicable law, and the exercise or beginning of
the  exercise  by Lender of any or all such other  rights,  powers,  or remedies
shall not preclude the  simultaneous  or later  exercise by Lender of any or all
such rights,  powers, or remedies.  No failure or delay by Lender to insist upon
the strict performance of any term,  condition,  covenant,  or agreement of this
Note or to  exercise  any  right,  power,  or  remedy  consequent  upon a breach
thereof,  shall constitute a waiver of any such term,  condition,  covenant,  or
agreement of any such breach, or preclude Lender from exercising any such right,
power,  or remedy at a later  time or times.  By  accepting  partial  payment or
payment  after the due date of any amount  payable under the terms of this Note,
Lender shall not be deemed to waive the right either to require  prompt  payment
when due of all other amounts  payable  under the terms of this Note.  This Note
may not be changed  orally,  but only by an agreement  in writing  signed by the
parties  against  whom  enforcement  of  any  waiver,  change,  modification  or
discharge is sought.

           [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

                                       2
<PAGE>

      IN  WITNESS  WHEREOF,  each of the  undersigned,  intending  to be legally
bound,  has duly executed this Note as of the day and year first above  written.
WITNESS/A l"1 hST:

WITNESS/ATTEST:                            ACORN HOLDING CORP.

By___________________________________      By___________________________________
  Name:                                      Name:
                                             Title:

                                           VALENTEC SYSTEMS, INC.

                                           By___________________________________
                                             Name:
                                             Title:

                                       3
<PAGE>

                                     ANNEX A

                             REVOLVING NOTE SCHEDULE

                                                   INTEREST  INTEREST   NOTED
   DATE    ADVANCE    PRINCIPAL PAID    BALANCE     ACCRUED    PAID      BY
   ----    -------    --------------    -------    --------  --------   -----

                                       4

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