Document:

exhibit103.htm

    Exhibit
10.3

    CRACKER
BARREL OLD COUNTRY STORE, INC.

    and

    SUBSIDIARIES

    

    

    FY 2010 Long-Term
Performance Plan

    

    ARTICLE
I

    General

    

    1.1           Establishment of the
Plan.  Pursuant to the Cracker Barrel Old Country Store, Inc.
2002 Omnibus Incentive Compensation Plan (the "Omnibus Plan"), the Compensation
Committee (the "Committee") of the Board of Directors of Cracker Barrel Old
Country Store, Inc. (the “Company”) hereby establishes this FY 2010 Long-Term
Performance Plan (the “LTPP").

    

    1.2           Plan
Purpose.  The purposes of this LTPP are to reward officers of
the Company and its subsidiaries for the Company's financial performance during
fiscal years 2010 and to retain them during the 2010 fiscal year, to attract and
retain the best possible executive talent, to motivate officers to focus
attention on long-term objectives and strategic initiatives, and to further
align their interests with those of the shareholders of the
Company.

    

    1.3           LTPP Subject to Omnibus
Plan.  This LTPP is established pursuant to, and it comprises a
part of the Omnibus Plan.  Accordingly, all of the terms and
conditions of the Omnibus Plan are incorporated in this LTPP by reference as if
included verbatim.  In case of a conflict between the terms and
conditions of the LTPP and the Omnibus Plan, the terms and conditions of the
Omnibus Plan shall supersede and control the issue.

    

    ARTICLE
II

    Definitions

    

    2.1           Omnibus Plan
Definitions.  Capitalized terms used in this LTPP without
definition have the meanings ascribed to them in the Omnibus Plan, unless
otherwise expressly provided.

    

    2.2           Other
Definitions.  In addition to those terms defined in the Omnibus
Plan and elsewhere in this LTPP, whenever used in this LTPP, the following terms
have the meanings set forth below:

    

    (a)           “2010
Operating Income” means, operating income during the 2010 fiscal year, excluding
extraordinary gains or losses and the effects of any sale of assets (other than
in the ordinary course of business), the effects of any refinancing of the
Company’s long-term indebtedness, the effects of changes in accounting
principles.

     

    (b)           “Cause,”
in addition to those reasons specified in the Omnibus Plan, also includes
unsatisfactory performance or staff reorganizations.

    

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    (c)           “Distribution
Date" means the first business day of the Company's 2013 fiscal
year.

    

    (d)           "Eligible
Award" means an Award of either cash or shares of Common Stock (“Performance
Shares”) as provided in this LTPP established for each Participant within the
first 90 days of the Performance Period.

     

    (e)           “Performance
Award” means that number Performance Shares or that amount of cash to be awarded
to a Participant after the Committee determines that the Performance Goal has
been achieved and exercised its discretion n determining whether to pay the
Eligible Award or some other number or amount, as the case may be.

     

    (f)           “Performance
Goal means achievement of 2010 Operating Income during the Performance Period in
an amount equal to or greater than an amount established by the Committee within
the first 90 days of the Performance Period.

     

    (g)           “Performance
Period” means the Company’s 2010 fiscal year.

     

    (h)           “Retirement”
(or the correlative “Retire” or “Retires”) means the voluntary termination of
employment by a Participant in good standing under this LTPP at a time when the
Participant meets the definition of Retirement Eligible.

     

    (i)           “Retirement
Eligible” means the Participant's age and years of service with the Company, its
predecessors or subsidiaries, is equal to or greater than 65.

    

    ARTICLE
III

    Eligibility
and Participation; Awards

    

    3.1           Plan
Eligibility.  The Participants in the LTPP shall be those
persons designated by the Committee during the first 90 days of the Performance
Period or new hires or those persons who may be promoted and are designated as
Participants by the Committee at the time of hiring or promotion.  No
new Participants are eligible after the second fiscal quarter of the Company’s
2010 fiscal year.

    

    3.2           Award
Eligibility.  If the Performance Goal is achieved, each
Participant shall be eligible to receive his or her Eligible
Award.  Each Performance Award, however, shall, subject to Section
3.4, be determined by the Committee based upon such measures, if any, that the
Committee in its discretion shall employ.

    

    3.3           Calculation and Payment of
Awards.  After the close of the Performance Period, the
Committee shall certify in writing the achievement of the Performance Goal and
the number or amount, as the case may be, of any Performance Award that will
become payable or distributable, as the case may be, to each
Participant.  No Performance Award shall be paid to any Covered
Employee if the Performance Goal is not achieved.  .Any Performance
Award awarded by the Committee shall be paid or distributed, as the case may be,
on the Distribution Date.  The Performance Shares 

     

    
      
        
        

      

      
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    comprising
each LTPP Award shall thereafter be distributed, subject to forfeiture or lapse
as provided in this LTPP, to each Participant promptly following the
Distribution Date.

    

    3.4           Committee Discretion; Limit
on Awards.  The Committee shall have the discretion to
establish the amount of any Performance Award payable to any Participant, except
that the Performance Award of any Covered Employee shall not exceed either his
or her Eligible Award or any limits prescribed by the Omnibus Plan including,
without limitation, the Section 162(m) Cash Maximum.

     

    3.5           Restrictions.  Notwithstanding
that the Performance Shares comprising any LTPP Award hereunder may be earned at
the end of the Performance Period, those Performance Shares shall not vest or
otherwise become distributable to a Participant, nor, except as expressly
provided herein, shall a Participant have any of the rights of a shareholder of
the Company with respect to the Performance Shares, until the Distribution
Date.

     

    3.6           Dividends.   Dividends
payable on Common Stock after the Performance Period but before the Distribution
Date shall accrue on Performance Shares earned pursuant to this LTPP and they
shall be payable, without interest, to Participants along with the Performance
Shares following the Distribution Date.  Except as set forth in the
preceding sentence, Participants shall have no rights as shareholders with
respect to any Performance Shares until after the Distribution
Date.

    
ARTICLE
IV

    Termination
of Employment

    

    4.1           Termination of Employment
Other Than For Cause.

    

    
      	
               
      

            	
              (a)

            	
              If,
      prior to the end of the Performance Period, a Participant’s employment is
      terminated due to death or disability, any Eligible Award shall be reduced
      to reflect only employment prior to that termination.  The
      reduced Eligible Award shall be based upon the number of calendar months
      of employment from the beginning of the Performance Period until the date
      of such termination.  In the case of a Participant’s disability,
      the employment termination shall be deemed to have occurred on the date
      the Committee determines that the disability has occurred, pursuant to the
      Company’s then-effective group long-term disability insurance benefit for
      officers. .

            

    

    

    
      	
               
      

            	
              (b)

            	
              If,
      after the end of the Performance Period but prior to the Distribution
      Date, a Participant Retires or a Participant’s employment is terminated
      due to death or disability, any LTPP Award earned as of the end of the
      Performance Period shall be payable at the time specified in Section
      3.3.

            

    

    

    
      
        
        

      

      
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    4.2           Termination of Employment
For Cause or Voluntary Resignation.  If, prior to the
Distribution Date, a Participant’s employment is terminated for Cause (of which
the Committee shall be the sole judge), or the Participant voluntarily resigns
(other than through Retirement (as provided in Section 4.1(b)) or disability),
all of the Participant’s rights hereunder shall be forfeited.

    

    

    ARTICLE
V

    Change
in Control

    

    5.1           Effect of Change in
Control.  In the event of a Change in Control prior to the
Distribution Date, (i), the Performance Goal shall be deemed to have been met if
the Company’s 2010 Operating Income through the end of the fiscal month
preceding the Change in Control equals or exceeds 50% of the Company’s operating
income for the comparable period in the 2009 fiscal year, and (ii) all
Performance Awards established by the Committee shall be immediately payable in
cash to Participants upon the date of the Change of Control.

     

    -4-ex101.htm

    Exhibit
10.1      

     

    Asset Purchase Agreement between the
Company and Brookridge Funding, LLC

    

    

     

    ASSET
PURCHASE AGREEMENT

     

    among

     

    BROOKRIDGE
FUNDING SERVICES, LLC

     

    and

     

    BROOKRIDGE
FUNDING, LLC,

     

    and

     

    ANCHOR
FUNDING SERVICES, INC.

     

    and

     

    MICHAEL
P. HILTON,

     

    JOHN
A. MCNIFF III

     

    

     

    December
4, 2009

     

    

    

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

    ASSET PURCHASE
AGREEMENT

     

    This
Asset Purchase Agreement (this “Agreement”) is entered into as
of December 4, 2009, by and among Brookridge Funding Services, LLC, a North
Carolina limited liability company and wholly-owned Subsidiary of Parent (“Buyer”), Brookridge Funding,
LLC, a Delaware limited liability company (“Seller”), Anchor Funding
Services, Inc., a Delaware corporation (“Parent”), Michael P. Hilton, a
resident of the State of Connecticut (“Hilton”), and John A. McNiff
III, a resident of the State of Connecticut (“McNiff” and together with
Hilton, the “Members”
and each a “Member”).

     

    STATEMENT
OF PURPOSE

     

    Parent,
by and through Buyer has agreed to purchase from Seller, and Seller has agreed
to sell to Buyer, substantially all of Seller’s assets for the consideration,
including Buyer’s assumption of certain stated liabilities, and on the terms and
subject to the conditions set forth in this Agreement.  Certain
defined terms are included in Exhibit A attached
hereto.

     

    Parent
has agreed to provide the majority of the capital necessary to acquire the
assets of Seller pursuant to this Agreement and fund the initial working capital
requirements of Buyer and assume Buyer’s obligations with respect to the Cash
Purchase Price and the Contingent Purchase Price Consideration.

     

    SALE
AND PURCHASE OF ASSETS

     

    Sale
and Purchase of Assets

     

    Seller
hereby sells, assigns, transfers and conveys to Buyer, and Buyer hereby
purchases, acquires and accepts from Seller, free and clear of all Encumbrances
other than Permitted Encumbrances, all of Seller’s assets of every kind and
description (other than the Excluded Assets) on the Closing Date (the “Purchased Assets”), including
the following assets of Seller (other than the Excluded Assets):

     

    All equipment, fixtures, furniture,
office equipment, computer hardware, supplies, and other items of tangible
personal property (the “Tangible Personal Property”);

     

    All
rights and interests in and to any Contracts other than Excluded
Contracts;

     

    All Client Transaction Rights with
respect to the Clients (the “Acquired Clients”) identified on Schedule
0 (the “Acquired Client
Transaction Rights”);

     

    All
Intellectual Property;

     

    All business and financial records,
books, ledgers, files, correspondence, documents, lists, studies and reports,
including customer lists, whether written, electronically stored or otherwise
recorded (the “Books and Records”);

     

    All
goodwill and all sales, advertising, promotional and marketing information and
materials;

     

    All
telephone, fax and pager numbers and e-mail addresses assigned to
Seller;

     

    All
Permits;

     

    All
rights of Seller to causes of action, lawsuits, judgments, claims and demands of
any nature and all counterclaims, rights of setoff, rights of indemnification
and affirmative defenses to any claims that may be brought against Buyer by
third parties, except for any such rights under the Excluded Lawsuits (as
defined in sub-paragraph 0 below);

     

    All benefits under all insurance
policies to which Seller is a party, a named insured or otherwise the
beneficiary of coverage (the “Insurance Policies”); and

     

    
      
        
        

      

      
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    All
other properties and assets to the extent Seller has any rights thereto or
interests therein, whether a present or future interest, an inchoate right or
otherwise and whether such properties or assets are tangible or intangible and
whether or not of a type falling within any of the categories of assets or
properties described above.

     

    Excluded
Assets

     

    Seller
will retain ownership of the following assets of Seller (collectively, the “Excluded
Assets”):

     

    All
cash, cash equivalents and short-term investments;

     

    Excluded
Clients;

     

    Organizational
Documents, stock books, stock ledgers, minute books and Tax
Returns;

     

    Those Contracts, if any, listed on
Schedule
00 (the “Excluded
Contracts”);

     

    All
rights to causes of action, lawsuits, judgments, claims and demands of any
nature and all counterclaims, rights of setoff, rights of indemnification and
affirmative defenses to any claims that may be brought against Seller by third
parties, in each case to the extent that they relate to the Excluded Assets or
Excluded Liabilities;

     

    All
rights under the Excluded Lawsuits (as defined in sub-paragraph 0 below);

     

    All
rights under any Transaction Document;

     

    The
note issued by Fairfield Factors to Seller a copy of which is attached to Schedule 0;
and

     

    Those
assets, if any, listed on Schedule 00.

     

    Assumed
Liabilities

     

    Buyer
hereby assumes and agrees to pay, perform and discharge only the following
Liabilities of Seller (collectively, the “Assumed
Liabilities”):  (i) Liabilities to be performed after the
Closing Date under the executory Contracts listed on Schedule 0 (but not
including any Excluded Contracts) (the “Assumed Contracts”), provided, however, that such
Liabilities will only be Assumed Liabilities to the extent that all benefits
under such Contracts or Permits are transferred to Buyer pursuant to this
Agreement and the existence of such Liabilities does not constitute a breach of
the representations and warranties of Seller set forth in this Agreement or in
such Contract or Permit; and (ii) Liabilities incurred by Buyer following the
Closing through its operation of the Business.

     

    Excluded
Liabilities

     

    The
Excluded Liabilities will remain the sole responsibility of and will be
retained, paid, performed and discharged as and when due solely by
Seller.  “Excluded
Liabilities” means every Liability of Seller, other than the Assumed
Liabilities, including:

     

    All
Liabilities under any Transaction Document;

     

    
      
        
        

      

      
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    All
Liabilities for Taxes (whether federal, state, local or foreign), including
Taxes incurred in respect of or measured by (i) the sales of goods or services
by Seller, (ii) the wages or other compensation paid by Seller to its employees,
(iii) the value of Seller’s property (personal as well as real property), (iv)
the income of Seller earned on or realized prior to the Closing Date, and (v)
any gain and income from the sale of the Purchased Assets and other
Transactions;

     

    Liabilities
incurred by Seller prior to the Closing through its operation of the Business,
including any amounts due to counter-parties under the Assumed Contracts for any
period of time occurring prior to the Closing Date (including any fees due to
third-party brokers in respect of Acquired Client Transaction
Rights);

     

    All
Liabilities under any Excluded Contracts;

     

    All
Liabilities to indemnify any Person (including any Member) by reason of the fact
that such Person was a director, officer, employee or agent of Seller unless
indicated otherwise by the terms hereof; and

     

    All Liabilities arising out of the
transactions or occurrences that are the subject matter of the claims set forth
in Brookridge
Funding  v. Seascape Seafoods, Inc. et al. and Brookridge
Funding Corp. v. King & Prince Seafood Corp. and Paul J. Obirek (collectively, the “Excluded
Lawsuits”).

     

    Purchase
Price

     

    The purchase price for the Purchased
Assets (the “Purchase Price”) is (i) the Book Value of the
Acquired Client Transaction Rights on the Closing Date (the “Cash
Purchase Price”), plus (ii) the
Contingent Purchase Price Consideration, if any, plus (iii) the assumption of
the Assumed Liabilities.  At or prior to the Closing Date, Parent
shall contribute the sum of One Million Two Hundred Thousand ($1,200,000)
Dollars to Buyer in order to obtain an eighty (80%) percent equity stake in
Buyer, while Hilton and McNiff or entities controlled by them shall each
contribute the sum of One Hundred Fifty Thousand ($150,000) Dollars to Buyer, in
order for each to obtain a ten (10%) percent equity stake in
Buyer.

     

    Subject to the terms and conditions
of this Agreement, Buyer will pay the Cash Purchase Price at Closing as
follows:  (i) all amounts necessary to discharge all Secured Debt to
the holders of the Secured Debt and any amounts due to Brookridge Trade Finance,
LLC in connection with the Trade Finance Assignment by wire transfer of
immediately available funds to bank accounts designated by such parties (the
“Debt Repayment Amount”)
and (ii) an amount equal to the total Cash Purchase Price less the Debt
Repayment Amount to Seller by wire transfer of immediately available funds to a
bank account designated by Seller.

     

    To
the extent that total amounts collected by Buyer on the Purchase Orders or
Receivables related to any Acquired Client Transaction Rights set forth on Schedule 0 within 120 days
after the Closing Date is less than the Cash Purchase Price, Seller shall be
obligated to Buyer the amount of such deficit provided if Sellers fails to do so
each Member shall be obligated to pay to Buyer one-half of the amount of such
deficit; provided, that if
Buyer subsequently collects on any such Purchase Order or Receivable, any
amounts so collected shall be used to reimburse a Seller or a Member to the
extent Seller or the Member has previously made a payment to Buyer in respect
thereof.

     

    Contingent
Purchase Price Consideration

     

    Buyer shall pay and Seller shall
receive, the following contingent purchase price consideration:  (i)
for each of the fiscal quarters ending March 31, 2010 (and for this period
including from the Closing Date through December 31, 2009), June 30, 2010,
September 30, 2010, December 31, 2010, March 31, 2011, June 30, 2011, September
30, 2011, December 31, 2011, March 31, 2012, June 30, 2012, September 30, 2012,
December 31, 2012, March 31, 2013, June 30, 2013, September 30, 2013, December
31, 2013, March 31, 2014, June 30, 2014, September 30, 2014 and December 31,
2014 (each such period, a “Measurement Period”), Buyer shall pay to Seller a dollar
amount equal to twenty (20%) percent of the amount by which Buyer’s Net
Operating Income exceeds zero for such quarter; and (ii) if Buyer’s Net
Operating Income for any four (4) consecutive Measurement Periods exceeds
$700,000 in the aggregate, Buyer shall pay to Seller an additional 20% of
Buyer’s Net Operating Income for each such Measurement Period.  The
consideration referred to above in (i) and (ii) of this paragraph 0 are collectively referred to as the
“Contingent Purchase Price Consideration”).

     

    Notwithstanding anything stated to
the contrary in this Agreement, (i) if Buyer’s Net Operating Income is negative
for any Measurement Period, Buyer’s Net Operating Income for the subsequent
quarter(s) shall be reduced by the amount by which Buyer’s Net Operating Income
was less than zero and (ii) the total Contingent Purchase Price Consideration
payable by Buyer to Seller on account of Section 00 shall not exceed $800,000 (the
“Cap”) in the
aggregate.

     

    
      
        
        

      

      
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    Buyer
shall pay to Seller the Contingent Purchase Price Consideration with respect to
a specific fiscal quarter set forth in Section 00, if any such Contingent Purchase Price Consideration
is owed, within 10 days after final determination of such amount in accordance
with Section 0 below by wire transfer of
immediately available funds to an account designated by Seller.

     

    Within
15 days after the end of each Measurement Period, Buyer shall deliver to Seller
Buyer’s calculation of the Contingent Purchase Price Consideration for such
quarter together with reasonable supporting documentation.  If Seller
disagrees with the calculation of Buyer’s Net Operating Income for such
Measurement Period, Seller must deliver to Buyer, within 15 days after the date
Buyer delivered the Contingent Purchase Price Consideration calculation for such
Measurement Period to Seller, a written description of each such
disagreement.  If Seller does not object to the calculation of Buyer’s
Net Operating Income for such Measurement Period within such time, the
calculation of the Contingent Purchase Price Consideration for such Measurement
Period shall be final and binding upon the Parties.  Buyer and Seller
will negotiate in good faith to resolve any such disagreements.  If,
after a period of 30 days following the date on which such written description
is delivered, Buyer and Seller have not resolved each such disagreement, then
(i) Buyer and Seller shall continue in good faith to resolve such disagreements
or (ii) either Buyer or Seller will be entitled to cause the Parties to enter
into binding arbitration to resolve such disagreements as provided in Section 0.  Within 30 days after final determination
of the calculation of the Contingent Purchase Price Consideration for such
quarter by the arbitrator, Buyer shall pay to Seller any additional amounts due
or Seller shall repay to Buyer any overpayment made, as determined in accordance
with this Section 0.

     

    Notwithstanding
anything stated to the contrary in this Agreement, Buyer shall have no
obligation to pay any Contingent Purchase Price Consideration for any
Measurement Period if on the last day of that Measurement Period neither of the
Members shall be employed by Buyer.

     

    In
accordance with the Operating Agreement, at the Closing Parent shall assume
Buyer’s obligations to pay the Contingent Purchase Price Consideration to Seller
in accordance with this Section 0.

     

    Closing

     

    The
closing of the Transactions to be performed on the Closing Date (the “Closing”) will take place at
the offices of K&L Gates LLP in Charlotte, North Carolina on the later of
(a) December 7, 2009, or (b) the second Business Day following the satisfaction
or waiver of all conditions to the obligations of the Parties to consummate the
Transactions to be performed on the Closing Date (other than conditions with
respect to actions the Parties will take at the Closing) or such other date as
Buyer and Seller may mutually determine (the “Closing
Date”).  Subject to the consummation of the Closing on the
Closing Date, the sale, assignment, transfer and conveyance to Buyer of the
Purchased Assets and the assumption by Buyer of the Assumed Liabilities will be
deemed effective as of 11:59 p.m. local time on the Closing Date.

     

    Allocation
of Purchase Price

     

     The
Purchase Price will be allocated among the Purchased Assets as agreed upon by
Parent and Seller as soon as practicable following the Closing.  Buyer
and Seller agree (a) that any such allocation is consistent with the
requirements of Code § 1060, (b) to complete and file IRS Form 8594, or a
successor form, and any amendments thereto, as and when required by applicable
Law and (c) that the Purchase Price, as finally determined hereunder, reflects
the fair market value of the Purchased Assets.

    
 

     

    Representations
and Warranties Regarding the Members

     

    Each
Member, as limited by Members’ Liability Cap as set forth in Article VIII below,
severally represents and warrants to Buyer as follows:

     

    Organization
and Authority

     

    Such
Member has full power, authority and legal capacity to execute and deliver the
Transaction Documents to which such Member is a party and to perform such
Member’s obligations thereunder.  This Agreement constitutes the valid
and legally binding obligation of such Member, enforceable against such Member
in accordance with the terms of this Agreement.  Upon the execution
and delivery by such Member of each Transaction Document to which such Member is
a party, such Transaction Document will constitute the valid and legally binding
obligation of such Member, enforceable against such Member in accordance with
the terms of such Transaction Document.

     

    
      
        
        

      

      
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    Equity
Ownership

     

    Such
Member owns of record and beneficially the Interests set forth next to such
Member’s name on Schedule 0 free and clear
of any Encumbrance or restriction on transfer (other than any restriction under
any securities Law and Encumbrances listed on Schedule 0).  Except
as set forth on Schedule 0, such Member is
not a party to (a) any option, warrant, purchase right, right of first refusal,
call, put or other Contract that could require such Member to sell, transfer or
otherwise dispose of any Interest or (b) any voting trust, proxy or other
Contract relating to the voting of any Interest.

     

    No
Conflicts

     

    Neither
the execution and delivery of this Agreement nor the performance of the
Transactions will, directly or indirectly, with or without notice or lapse of
time:  (a) violate any Law to which such Member is subject; or (b)
violate, conflict with, result in a breach of, constitute a default under,
result in the acceleration of or give any Person the right to accelerate the
maturity or performance of, or to cancel, terminate, modify or exercise any
remedy under, any Contract to which such Member is a party or by which such
Member is bound or the performance of which is guaranteed by such
Member.  Such Member is not required to notify, make any filing with,
or obtain any Consent of any Person in order to perform the
Transactions.

     

    Litigation

     

    There is
no Proceeding pending or, to the Knowledge of such Member, threatened or
anticipated against such Member relating to or affecting the
Transactions.

     

    No
Brokers’ Fees

     

    Except as
set forth on Schedule
0, such Member
has no Liability for any fee, commission or payment to any broker, finder or
agent with respect to the Transactions to be performed on or about the Closing
Date for which Buyer could be liable.

     

     

    REPRESENTATIONS
AND WARRANTIES REGARDING SELLER

     

    Seller, and Members, as limited by the
Members’ Liability Cap as set forth in Article VIII below, jointly and severally
represent and warrant to Buyer as follows:

     

    Organization,
Qualification and Corporate Power

     

    Schedule 0 sets forth
Seller’s jurisdiction of organization, the other jurisdictions in which it is
qualified to do business, and its managers and officers.  Seller is a
limited liability company duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization.  Seller has
delivered to Buyer correct and complete copies of the Organizational Documents
of Seller.

     

    Capitalization

     

    All of
the Interests of Seller have been duly authorized and are validly issued and
outstanding, are owned by the Members, are not subject to capital call by
Seller, and constitute all of the issued and outstanding limited liability
company membership interests or other equity securities of
Seller.  Seller does not have any Subsidiaries.  Seller does
not control directly or indirectly or have any direct or indirect equity
interest in any Person.

     

    Authority

     

    Seller
has full limited liability company power and authority to execute and deliver
this Agreement and to perform its obligations hereunder.  The
execution, delivery and performance by Seller of this Agreement have been
approved by the Members.  At Closing, the execution and delivery by
Seller of each Transaction Document to which Seller is a party and the
performance by Seller of the Transactions will have been duly authorized by all
requisite limited liability action on its part.  This Agreement
constitutes the valid and legally binding obligation of Seller, enforceable
against Seller in accordance with the terms of this Agreement.

     

    No
Conflicts

     

    Except as
set forth on Schedule
0, neither the
execution and delivery of this Agreement nor the performance of the Transactions
will, directly or indirectly, with or without notice or lapse of
time:  (a) violate any Law to which Seller or any Purchased Asset is
subject; (b) violate any Permit held by Seller or give any Governmental Body the
right to terminate, revoke, suspend or modify any Permit held by Seller; (c)
violate any Organizational Document of Seller; (d) violate, conflict with,
result in a breach of, constitute a default under, result in the acceleration of
or give any Person the right to accelerate the maturity or performance of, or to
cancel, terminate, modify or exercise any remedy under, any Contract to which
Seller is a party or by which Seller is bound or to which any Purchased Asset is
subject or under which Seller has any rights or the performance of which is
guaranteed by Seller; (e) cause Buyer to have any Liability for any Tax; (f)
result in the imposition of any Encumbrance upon any Purchased
Asset.  Except as set forth on Schedule 0, Seller is not
required to notify, make any filing with, or obtain any Consent of any Person in
order to perform the Transactions.

     

    
      
        
        

      

      
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    Financial
Statements

     

    Attached to Schedule
0 are the following financial
statements (collectively, the “Financial Statements”):  (i) audited balance
sheet of Seller as of December 31, 2008, and statements of income, changes in
members’ capital, and cash flow for the fiscal year then ended, together with
the notes thereto and the reports thereon of Reynolds & Rowella, LLP,
independent certified public accountants; (ii) unaudited balance sheets of
Seller as of December 31 for each of the years 2005 to 2007, and statements of
income for each of the fiscal years then ended; and (iii) an unaudited balance
sheet (the “Interim Balance Sheet”) of Seller as of September 30, 2009,
and statements of income for the nine-month period then ended.  The
Financial Statements have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby, and present fairly the
financial condition of Seller as of and for their respective dates; provided, however, that the financial statements
described in clauses (ii) and (iii) above lack notes (which, if presented, would
not differ materially from the notes accompanying the Balance Sheet) and the
interim financial statements described in clause (iii) above are subject to
normal, recurring year-end adjustments (which will not be, individually or in
the aggregate, materially adverse).

     

    The
Books and Records (i) are complete and correct in all material respects and
all transactions to which Seller is or has been a party are accurately reflected
therein in all material respects on an accrual basis, (ii) reflect all
losses incurred by Seller in respect of the Acquired Clients during the periods
covered thereby, (iii) have been maintained in accordance with customary
and sound business practices in Seller’s industry, (iv) form the basis for
the Financial Statements and (v) reflect in all material respects the assets,
liabilities, financial position, results of operations and cash flows of Seller
on an accrual basis.

     

    Absence
of Certain Changes

     

    Except as
set forth on Schedule
0, since the
Balance Sheet Date:

     

    Seller
has not sold, leased, transferred or assigned any asset, other than for fair
consideration in the ordinary course of business;

     

    Seller
has not experienced any damage, destruction or loss (whether or not covered by
insurance) to its property or assets in excess of $10,000;

     

    other than Funding Agreements entered
into in the ordinary course of business, Seller has not entered into any
Contract (or series of related Contracts) involving the payment or receipt of
more than $10,000 or that cannot be terminated without penalty on less than six
months notice, and no Person has accelerated, terminated, modified or canceled
any Contract (or series of related Contracts) involving more than $10,000
to which Seller is a party or
by which Seller or any of its assets are bound;

     

    no
Encumbrance (other than any Permitted Encumbrance) has been imposed upon any
asset of Seller;

     

    Seller has not made any capital
expenditure (or series of related capital expenditures) involving more than
$10,000 or made any
capital investment in, any loan to, or any acquisition of the securities or
assets of, any other Person (or series of related capital investments, loans or
acquisitions) involving more than $10,000;

     

    Seller has not issued, created,
incurred or assumed any Indebtedness (or series of related Indebtedness)
involving more than $10,000 in the aggregate or delayed or
postponed the payment of accounts payable or other Liabilities beyond the
original due date;

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Seller
has not canceled, compromised, waived or released any right or claim (or series
of related rights or claims) or any Indebtedness (or series of related
Indebtedness) owed to it, in any case involving more than $10,000;

     

    Seller
has not (i) conducted the Business outside the ordinary course of business
consistent with past practices, (ii) entered into any employment Contract or
modified the terms of any existing employment Contract, (iii) granted any
increase in the base compensation of any of its directors, officers or, except
in the ordinary course of business, employees, or (iv) adopted, amended,
modified or terminated any Employee Benefit Plan or other Contract for the
benefit of any of its managers, officers or employees;

     

    there
has not been any Proceeding commenced nor, to the Knowledge of Seller,
threatened or anticipated relating to or affecting Seller, the Business or any
asset owned or used by Seller;

     

    there
has not been (i) any loss of any material customer, distribution channel, or the
receipt of any notice that such a loss may be pending, (ii) any occurrence,
event or incident related to Seller outside of the ordinary course of business
or (iii) any material adverse change in the Business, operations, properties,
prospects, assets, Liabilities or condition (financial or otherwise) of Seller
and no event has occurred or circumstance exists that may result in any such
material adverse change; and

     

    Seller
has not agreed or committed to any of the foregoing.

     

    No
Undisclosed Liabilities

     

    Except as
set forth on Schedule
0, Seller has no
Liability (and no basis exists for any Liability), except for (a) Liabilities
under executory Contracts that are either listed on Schedule 0 or are not
required to be listed thereon, excluding Liabilities for any breach of any
executory Contract, (b) Liabilities to the extent reflected or reserved against
on the Interim Balance Sheet and (c) current Liabilities incurred in the
ordinary course of business since the Interim Balance Sheet Date (none of which
results from, arises out of, relates to, is in the nature of, or was caused by
any breach of Contract, breach of warranty, tort, infringement or violation of
Law).  Schedule 0 sets forth the
names of the holders of the Secured Debt and the amount of Secured Debt owed to
each such holder as of the Closing Date.

     

    Title
to and Sufficiency of Assets

     

    Except as
set forth on Schedule
0, Seller has
good and marketable title to, or a valid leasehold interest in, the Purchased
Assets, free and clear of any Encumbrances except Permitted
Encumbrances.  The Purchased Assets include all tangible and
intangible property and assets (except for the Excluded Assets) necessary for
the continued conduct of the Business after Closing in the same manner as
conducted prior to Closing.  The transfer of the Purchased Assets
hereunder will convey to Buyer good, valid and indefeasible title to the
Purchased Assets, free and clear of any Encumbrances except Permitted
Encumbrances.

     

    Tangible
Personal Property

     

    Schedule 0 lists each item
of Tangible Personal Property that has a net book value in excess of $500 and
its net book value.

     

    Acquired
Client Transaction Rights

     

    Bona Fide
Accounts.  Schedule 00 lists each
Acquired Client and, gross funds employed thereon, applicable client reserves
and the amount of each related Purchase Order and Receivable and the aging
thereof.  The amounts set forth on Schedule 00 represent bona
fide amounts due thereunder from Account Debtors and for which the applicable
Clients are contingently liable.  To Seller’s Knowledge, the Purchase
Orders and Receivables set forth on Schedule 00 are collectible
in accordance with their terms and there is no contest, claim or right to
set-off under any Contract with any obligor relating to the amount or validity
of such Purchase Order or Receivable.

     

    Excluded Clients.
Schedule 00 lists each
Excluded Client and all amounts due to Seller thereunder as of the Closing
Date.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    Good Title; No Existing
Encumbrances.

     

      Seller
has good title to the Acquired Client Transaction Rights.  The
Acquired Client Transaction Rights are free and clear of all Encumbrances
thereon other than any Permitted Encumbrances, and no financing statement
covering any Acquired Client Transaction Rights is on file in any public office
against Seller or to its Knowledge any Client, other than any evidencing
Permitted Encumbrances and other than any evidencing Seller’s interest therein
as purchaser thereof under a Client Agreement.

     

     

    (d)           Right to Assign; No Further
Encumbrances.  Seller has the full right, power and authority
to sell and assign the Acquired Client Transaction Rights and hereafter will not
pledge, hypothecate, grant a security interest in, sell, assign, transfer, or
otherwise dispose of the Acquired Client Transaction Rights, or any interest
therein, other than to Buyer in accordance with the terms and conditions of this
Agreement.

     

     

    (e)           Documentation.  Seller
represents and warrants that it has heretofore delivered to Buyer, or made
available to Buyer for review, true and correct copies of all of its Client
Documentation and all of such Client Documentation is in full force and effect
on the date hereof.  Seller further represents and warrants that it
has filed appropriate financing statements in all appropriate jurisdictions with
respect to the Acquired Client Transaction Rights against all Account Debtors
and that Seller has a first priority lien on Acquired Client Transaction Rights
existing on the date hereof.

     

    Real
Property

     

    Seller
owns no real property.  Schedule 0 lists all of
the real property and interests therein leased, subleased or otherwise occupied
or used by Seller (with all easements and other rights appurtenant to such
property, the “Real
Property”).  For each item of Real Property, Schedule 0 also lists the
lease term, the lease rate, and the lease pursuant to which Seller holds a
possessory interest in the Real Property and all amendments, renewals or
extensions thereto (each, a “Lease”).  The Real
Property complies with all Laws, including zoning requirements, and Seller has
not received any notifications from any Governmental Body or insurance company
recommending improvements to the Real Property or any other actions relative to
the Real Property.

     

    Contracts.

     

    Schedule
0 lists the following Contracts to
which Seller is a party or by which Seller is bound or to which any asset of
Seller is subject or under which Seller has any rights or the performance of
which is guaranteed by Seller (collectively, with the Leases, Licenses and
Insurance Policies, the “Material Contracts”):  (i) each Client
Agreement; (ii)
each other Contract (or
series of related Contracts) that involves delivery or receipt of products or
services of an amount or value in excess of $25,000, that was not entered into
in the ordinary course of business or that involves expenditures or receipts in
excess of $25,000; (iii)
each lease, rental or
occupancy agreement, license, installment and conditional sale agreement, and
other Contract affecting the ownership of, leasing of, title to, use of, or any
leasehold or other interest in, any real or personal property; (iv) each licensing agreement or other
Contract with respect to Intellectual Property, including any agreement with any
current or former employee, consultant, or contractor regarding the
appropriation or the non-disclosure of any Intellectual Property; (v) each collective bargaining agreement
and other Contract to or with any labor union or other employee representative
of a group of employees; (vi) each joint venture, partnership or
Contract involving a sharing of profits, losses, costs or Liabilities with any
other Person; (vii)
each Contract containing
any covenant that purports to restrict the business activity of Seller or limit
the freedom of Seller to engage in any line of business or to compete with any
Person; (viii)
each Contract providing
for payments to or by any Person based on sales, purchases or profits, other
than direct payments for goods, including each Broker Agreement; (ix) each Contract for Indebtedness;
(x) each employment or consulting
Contract; and (xi) each Participation Agreement.

     

    Seller
has delivered to Buyer a correct and complete copy of each written Material
Contract.  Each Material Contract, with respect to Seller, is legal,
valid, binding, enforceable, in full force and effect and will continue to be so
on identical terms following the Closing Date.  Each Material
Contract, with respect to the other parties to such Material Contract, to the
Knowledge of Seller, is legal, valid, binding, enforceable, in full force and
effect and will continue to be so on identical terms following the Closing
Date.  Seller is not in breach or default, and no event has occurred
that with notice or lapse of time would constitute a breach or default, or
permit termination, modification or acceleration, under any Material
Contract.  To the Knowledge of Seller, no other party is in breach or
default, and no event has occurred that with notice or lapse of time would
constitute a breach or default, or permit termination, modification or
acceleration, under any Material Contract.  No party to any Material
Contract has repudiated any provision of any Material Contract.

     

    
      
        
        

      

      
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    Intellectual
Property

     

    Seller
owns or has the right to use all Intellectual Property used in connection with
the operation of the Business as presently conducted.

     

    To
the Knowledge of Seller, Seller has not violated or infringed upon or otherwise
come into conflict with any Intellectual Property of third parties, and Seller
has not received any notice alleging any such violation, infringement or other
conflict.  To the Knowledge of Seller, no third party has infringed
upon or otherwise come into conflict with any Intellectual Property of
Seller.

     

    Tax.  Seller has
timely filed with the appropriate Governmental Body all Tax Returns that Seller
is required to have filed.  All Tax Returns filed by Seller are true,
correct and complete in all respects.  All Taxes owed (or to be
remitted) by Seller (whether or not shown on any Tax Return) have been paid to
the proper Governmental Body.

     

    Legal
Compliance

     

    Except as
set forth on Schedule
0, Seller is, and
since January 1, 2005, has been, in compliance in all material respects with all
applicable Laws and Permits.  Except as set forth on Schedule 0, no Proceeding
is pending, nor since January 1, 2005, has been filed or commenced, against
Seller alleging any failure to comply with any applicable Law or
Permit.  No event has occurred or circumstance exists that (with or
without notice or lapse of time) may constitute or result in a violation by
Seller of any Law or Permit.  Seller has not received any notice or
other communication from any Person regarding any actual, alleged or potential
violation by Seller of any Law or Permit or any cancellation, termination or
failure to renew any Permit held by Seller.  Schedule 0 contains a
complete and accurate list of each Permit held by Seller or that otherwise
relates to the Business or any asset owned or leased by Seller.  Each
Permit listed or required to be listed on Schedule 0 is valid and in
full force and effect.  The Permits listed on Schedule 0 constitute all
of the Permits necessary to allow Seller to lawfully conduct and operate the
Business as currently conducted and operated and to own and use its assets as
currently owned and used.

     

    Litigation

     

    .  Except
as set forth on Schedule 0, there is no
Proceeding pending or, to the Knowledge of Seller, threatened or anticipated
relating to or affecting (a) Seller or the Business or any asset owned or used
by it or (b) the Transactions.  To the Knowledge of Seller, no event
has occurred or circumstance exists that would reasonably be expected to give
rise to or serve as a basis for the commencement of any such
Proceeding.  The Proceedings listed in Schedule 0 have not
resulted in and are not reasonably likely to result in any Material Adverse
Effect.  Except as set forth on Schedule 0, there is no
outstanding Order to which Seller or any asset owned or used by Seller is
subject.  Schedule 0 lists all
Proceedings pending at any time since January 1, 2004, in which Seller has been
named as a defendant (whether directly, by counterclaim or as a third-party
defendant) and all Proceedings pending at any time since January 1, 2004, in
which Seller has been a plaintiff.  Schedule 0 lists all
Orders in effect at any time since January 1, 2004, to which Seller has been
subject or any asset owned or used by Seller is subject.

     

    Environmental

     

    To the
Knowledge of Seller and Members, except as set forth on Schedule 0, Seller and
each of its predecessors have complied and is in compliance with all
Environmental Laws.  Seller has received no written or oral notice,
report or other information regarding any actual or alleged violation of any
Environmental Law, or any Liabilities or potential Liabilities, including any
investigatory, remedial or corrective obligations, relating to it or its
facilities arising under any Environmental Law.

     

    Employees

     

    Schedule 0 sets forth the
name, job title, current rate of direct compensation, date of commencement of
employment, any change in compensation since December 31, 2008 and sick and
vacation leave that is accrued and unused with respect to each Active
Employee.  Seller is not, nor has Seller been, a party to or bound by
any collective bargaining agreement.  To the Knowledge of Seller, no
employee, officer or manager of Seller is a party to or bound by any agreement
that (i) could adversely affect the performance of his or her duties as an
employee, officer or manager other than for the benefit of Seller, (ii) could
adversely affect the ability of Seller to conduct the Business, (iii) restricts
or limits in any way the scope or type of work in which he or she may be engaged
other than for the benefit of Seller or (iv) requires him or her to transfer,
assign or disclose information concerning his or her work to anyone other than
Seller.  To the Knowledge of Seller, no officer or employee of Seller
has any plans to accept employment with any Person other than Buyer after
Closing.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Employee
Benefits

     

    Schedule 0 lists each
Employee Benefit Plan that Seller maintains or to which Seller contributes, has
any obligation to contribute or has any other Liability.

     

    Each
such Employee Benefit Plan (and each related trust, insurance contract or fund)
complies in form and in operation in all respects with the applicable
requirements of ERISA, the Code and other applicable Laws.

     

    All
premiums or other payments for all periods ending on or before the Closing Date
have been paid with respect to each such Employee Benefit Plan that is an
Employee Welfare Benefit Plan.

     

    Transactions
with Related Persons

     

    Except as
set forth in Schedule
0, for the past
five years, neither any equity owner, officer, manager or employee of Seller nor
any Related Person of any of the foregoing has (a) owned any interest in any
asset used in the Business or (b) been involved in any business transaction with
Seller.  Except as set forth in Schedule 0, neither any
equity owner, officer, manager or employee of Seller nor any Related Person of
any of the foregoing (i) is a party to any Contract with, or has any claim or
right against, Seller or (ii) has any Indebtedness owing to
Seller.  Except as set forth in Schedule 0, Seller (A) has
no claim or right against any equity owner, officer, manager or employee of
Seller nor any Related Person of any of the foregoing or (B) has any
Indebtedness owing to any equity owner, officer, manager or employee of Seller
nor any Related Person of any of the foregoing.

     

    Solvency

     

    Seller is
not now insolvent and will not be rendered insolvent by any of the
Transactions.  As used in this section, “insolvent” means that the sum
of the debts and other probable Liabilities of Seller exceeds the present fair
saleable value of Seller’s assets.  Immediately after giving effect to
the Transactions: (a) Seller will be able to pay its Liabilities (including the
Excluded Liabilities) as they become due in the usual course of business, (b)
Seller will not have unreasonably small capital with which to conduct its
present or proposed business, (c) Seller will have assets (calculated at fair
market value) that exceed its Liabilities and (d) taking into account all
pending and threatened litigation, final judgments against Seller in actions for
money damages are not reasonably anticipated to be rendered at a time when, or
in amounts such that, Seller will be unable to satisfy any such judgments
promptly in accordance with their terms and all other obligations of
Seller.

     

    Insurance

     

    Seller
has delivered to Buyer true and complete copies of each Insurance Policy and
each pending application of Seller for any insurance policy.  Seller
has no self-insurance arrangements.  Seller has been covered since its
organization by insurance in scope and amount customary and reasonable for the
businesses in which it has been engaged during such period.  Seller is
in compliance with all obligations relating to insurance created by Law or any
Contract to which Seller is a party.

     

    No
Brokers’ Fees

     

    Except as
set forth on Schedule
0, Seller has no
Liability for any fee, commission or payment to any broker, finder or agent with
respect to the Transactions.

     

    No
Acceleration of Rights and Benefits

     

    Except
for customary professional fees incurred in connection with the Transactions or
as set forth on Schedule 0, Seller has not
made, nor is Seller obligated to make, any payment to any Person in connection
with the Transactions or any change of control.  No rights or benefits
of any Person have been (or will be) accelerated, increased or modified and no
Person has the right to receive any payment or remedy (including rescission or
liquidated damages), in each case as a result of a change of control or the
consummation of the Transactions.  Except as set forth on Schedule 0, Seller is not
party to any Contract which, by its terms, will require Buyer or Seller to
support its obligations under such contract with a letter of credit or other
collateral.

     

    Disclosure

     

    No
representation or warranty contained in this 0 and
no statement in any Schedule related thereto contains any untrue statement of
material fact or omits to state any material fact necessary to make the
statements therein not misleading.  To the Knowledge of Seller, there
is no impending change in the Business or in Seller’s competitors, relations
with employees, suppliers or customers, or in any Laws affecting the Business
that (a) has not been disclosed in the Schedules to the representations and
warranties in this 0 and (b) has resulted in or is
reasonably likely to result in any Material Adverse Effect.

     

    
      
        
        

      

      
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    REPRESENTATIONS
AND WARRANTIES REGARDING BUYER AND PARENT

     

    Buyer and
Parent, jointly and severally represent and warrant to Seller as
follows:

     

    Organization
and Authority

     

    Buyer is
a limited liability company duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
organization.  Parent is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation.  Buyer and Parent each have full limited liability
company or corporate power, as applicable, and authority to execute and deliver
the Transaction Documents to which it is a party and to perform its obligations
thereunder.  The execution and delivery by Buyer and Parent of each
Transaction Document to which Buyer and Parent are a party and the performance
by Buyer and Parent of the Transactions have been duly approved by all requisite
limited liability company or corporate action, as applicable, on their
part.  This Agreement constitutes the valid and legally binding
obligation of Buyer and Parent, enforceable against Buyer and Parent in
accordance with the terms of this Agreement.

     

    No
Conflicts

     

    Neither
the execution and delivery of this Agreement nor the performance of the
Transactions will, directly or indirectly, with or without notice or lapse of
time:  (a) violate any Law to which Buyer or Parent are subject; (b)
violate any Organizational Document of Buyer or Parent; or (c) violate, conflict
with, result in a breach of, constitute a default under, result in the
acceleration of or give any Person the right to accelerate the maturity or
performance of, or to cancel, terminate, modify or exercise any remedy under,
any Contract to which Buyer or Parent are a party or by which Buyer or Parent
are bound or the performance of which is guaranteed by Buyer or
Parent.  Buyer and Parent are not required to notify, make any filing
with, or obtain any Consent of any Person in order to perform the
Transactions.

     

    Litigation

     

    There is
no Proceeding pending or, to the Knowledge of Buyer or Parent, threatened or
anticipated against Buyer or Parent relating to or affecting the
Transactions.

     

    No
Brokers’ Fees

     

    Neither
Buyer nor Parent has Liability for any fee, commission or payment to any broker,
finder or agent with respect to the Transactions for which Seller could be
liable.

     

    PRE-CLOSING
COVENANTS

     

    The Parties agree as follows with
respect to the period between the date hereof and the Closing:

     

    Capitalization
and Funding of Buyer by Parent

     

    At the
Closing and as described in the Operating Agreement, Parent and Members shall
make the capital contributions to Buyer specified therein and Buyer and the
applicable lenders shall enter into the Credit Agreement and the initial closing
thereunder shall occur.  An additional Line of Credit in the amount of
One Million ($1,000,000) Dollars, with an applicable annual interest rate of
twenty (20%) percent shall be made available to Buyer by Parent, or an affiliate
of Parent, in the event Parent is satisfied with the financial performance of
Buyer and such additional funding is needed by Buyer.  In accordance
with the Employment Agreements, each Member shall guaranty the Credit Agreement
for $300,000; provided Buyer and Parent acknowledge that no other guarantees of
Buyer’s debt will required from the Members.

     

    Best
Efforts

     

    Each
Party will use its best efforts to take all actions necessary, proper or
advisable in order to perform the Transactions (including satisfaction, but not
waiver, of the closing conditions set forth in 0).

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Consents
and Approvals

     

    As
promptly as practicable after the date hereof, Seller and the Members will make
all filings required by Law to be made by them in order to perform the
Transactions contemplated to be performed on or before the Closing
Date.  As promptly as practicable after the date hereof, Seller will
solicit the Consents set forth on Schedule 0, but not prior
to Buyer’s approval of the form and substance of each such Consent, which
approval will not be unreasonably withheld or delayed.  Seller will
use its best efforts (at its expense), and Buyer will cooperate in all
reasonable respects with Seller to obtain prior to the Closing all such
Consents; provided, however, that such
cooperation will not include any requirement to pay any consideration, to agree
to any undertaking or modification to a Contract or Permit or to offer or grant
any financial accommodation not required by the terms of such Contract or
Permit.

     

    Operation
of Business

     

    Seller
will, and the Members will cause Seller to: (a) conduct the Business only in the
ordinary course of business; (b) use their best efforts to maintain the Business
and the properties, physical facilities and operations of Seller, preserve
intact the current business organization of Seller, keep available the services
of the current officers, employees and agents of Seller, and maintain the
relations and goodwill with suppliers, customers, lessors, licensors, lenders,
creditors, employees, agents and others having business relationships with
Seller; and (c) confer with Buyer concerning matters of a material nature to
Seller.

     

    Exclusivity

     

    .  Seller
and each Member agree that it will not, and will cause its Representatives not
to, directly or indirectly:  (a) solicit, initiate or encourage any
inquiry, proposal, offer or contact from any Person (other than Buyer and its
Affiliates and Representatives) relating to any transaction involving the sale
of any equity interest or assets (other than the sale of Inventory in the
ordinary course of business) of Seller or any acquisition, divestiture, merger,
share exchange, consolidation, business combination, recapitalization,
redemption, financing or similar transaction involving Seller (in each case, an
“Acquisition Proposal”);
or (b) participate in any discussion or negotiation regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any Acquisition Proposal.  If any Person makes an
Acquisition Proposal, Seller and the Members will immediately notify Buyer of
such Acquisition Proposal and all related details.  Each Member agrees
not to vote its Interests in favor of any transaction associated with an
Acquisition Proposal.

     

    Confidentiality,
Press Releases and Public Announcements

     

    Each
Party will, and will cause its respective Representatives to, maintain in
confidence all information received from another Party or a Representative of
another Party in connection with this Agreement or the Transactions (including
the existence and terms of this Agreement and the Transactions) and use such
information solely to evaluate the Transactions, unless (a) such information is
already known to the receiving Party or its Representatives, (b) such
information is subsequently disclosed to the receiving Party or its
Representatives by a third party that, to the Knowledge of the receiving Party,
is not bound by a duty of confidentiality, (c) such information becomes publicly
available through no fault of the receiving Party, (d) the receiving Party in
good faith believes that the use of such information is necessary or appropriate
in making any filing or obtaining any Consent required for the performance of
the Transactions (in which case the receiving Party will use its best efforts to
advise the other Parties prior to making the disclosure) or (e) the receiving
Party in good faith believes that the furnishing or use of such information is
required by or necessary or appropriate in connection with any Proceeding, Law
or any listing or trading agreement concerning its publicly-traded securities
(in which case the receiving Party will use its best efforts to advise the other
Parties prior to making the disclosure).  No Party will issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of Buyer and Seller; provided, however, that
notwithstanding the foregoing Parent may make the public disclosures regarding
this Agreement and the transactions contemplated thereby required by applicable
SEC regulations including filing a Form 8-K with the SEC and issuing a news
release reporting entry into this Agreement and the consummation of the Closing
without the prior approval of Seller.  Seller and Buyer will consult
with each other concerning the means by which any employee, customer or supplier
of Seller or any other Person having any business relationship with Seller will
be informed of the Transactions, and Buyer will have the right to be present for
any such communication.

     

    

     

    CLOSING
CONDITIONS

     

    
      
        
        

      

      
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    Conditions
to Buyer’s Obligations

     

    Buyer’s
obligation to perform the Transactions contemplated to be performed on or about
the Closing Date is subject to satisfaction, or written waiver by Buyer, of each
of the following conditions:

     

    Each
of the following documents must have been delivered to Buyer and must be dated
as of the Closing Date (unless otherwise indicated):

     

    a
bill of sale and assignment executed by Seller, in form satisfactory to
Buyer;

     

    the
Operating Agreement, executed by Parent and each Member;

     

    the
Employment Agreements, executed by Hilton and McNiff;

     

    an
assignment and termination agreement executed by Seller and Lenders Funding, LLC
pursuant to which Lenders Funding shall have assigned all of its rights in
respect of Acquired Client Transaction Rights to Seller and released all
Encumbrances on the Purchased Assets prior to the Closing;

     

    an
assignment and termination agreement executed by Seller and Myles Wittenstein
pursuant to which Mr. Wittenstein shall have assigned all of his rights in
respect of Acquired Client Transaction Rights to Seller and released all
Encumbrances on the Purchased Assets prior to the Closing;

     

    an assignment and termination
agreement from Brookridge Trade Finance pursuant to which it shall have assigned
all of its rights, title and interest in any of the Acquired Client Transaction
Rights to Seller prior to the Closing (the “Trade Finance
Assignment”);

     

    such
other bills of sale, assignments, certificates of title and other instruments of
transfer (including UCC-3 amendments listing Buyer as the secured party for all
Acquired Client Transaction Rights), all in form and substance reasonably
satisfactory to Buyer, as are necessary or desirable to convey fully and
effectively to Buyer all of the Purchased Assets in accordance with the terms of
this Agreement; and

     

    such
other documents as Buyer may reasonably request for the purpose of (A)
evidencing the accuracy of Seller’s and the Members’ representations and
warranties, (B) evidencing Seller’s and the Members’ performance of, and
compliance with, any covenant or agreement required to be performed or complied
with by Seller or the Members, (C) evidencing the satisfaction of any condition
referred to in this Section 0, (D) vesting in Buyer
legal and beneficial title to the Purchased Assets or (E) otherwise facilitating
the performance of the Transactions.

     

    (i)           All
of the representations and warranties of each Member in this Agreement must have
been accurate in all material respects as of the date hereof and must be
accurate in all material respects as if made on the Closing Date, (ii) each
Member must have performed and complied with all of its covenants and agreements
in this Agreement to be performed prior to or at the Closing, and (iii) each
Member must deliver to Buyer at the Closing a certificate, in form and substance
reasonably satisfactory to Buyer, confirming satisfaction, with respect to such
Member, of the conditions in clauses (i) and (ii) above.

     

    (i)           All of the representations and
warranties of Seller in this Agreement must have been accurate in all material
respects as of the date hereof and must be accurate in all material respects as
if made on the Closing Date, except if necessary, the Seller Bringdown
Certificate may include revised Schedules
0 and 0, (ii) Seller must have performed and
complied with all of its covenants and agreements in this Agreement to be
performed prior to or at the Closing; and (iii) Seller must deliver to Buyer at
the Closing a certificate, in form and substance reasonably satisfactory to
Buyer, confirming satisfaction of the conditions in Section 0 (the “Seller Bringdown
Certificate”).

     

    Each
Consent listed on Schedule 0 must have been
obtained, delivered to Buyer, be in full force and effect and be in the form
approved by Buyer pursuant to Section 0.

     

    
      
        
        

      

      
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    Buyer
must have completed all of its business, financial, accounting, legal and
environmental due diligence to its satisfaction and the facts discovered as a
result of such due diligence must be to its satisfaction.

     

    The
lenders under the Credit Agreement must have completed all of its business,
financial, accounting, legal and environmental due diligence to their
satisfaction and the facts discovered as a result of such due diligence must be
to its satisfaction.

     

    There
must not be any Proceeding pending or threatened against Buyer or any of its
Affiliates that (i) challenges or seeks damages or other relief in connection
with any of the Transactions or (ii) may have the effect of preventing,
delaying, making illegal or interfering with any of the
Transactions.

     

    The
performance of the Transactions must not, directly or indirectly, with or
without notice or lapse of time, violate any Law.

     

    There
shall not have occurred a Material Adverse Effect.

     

    Buyer
must have obtained all Permits necessary to operate the Business in all material
respects as operated immediately prior to Closing.

     

    Conditions
to Seller’s Obligations

     

    .  Seller’s
and the Members’ obligations to perform the Transactions contemplated to be
performed on or before the Closing Date are subject to satisfaction, or written
waiver by Seller, of the following conditions:

     

    Each
of the following documents must have been delivered to Seller and must be dated
as of the Closing Date (unless otherwise indicated):

     

    an
assumption agreement, executed by Buyer, in the form satisfactory to
Seller;

     

    the
Employment Agreements, executed by Buyer;

     

    the
Credit Agreement;

     

    the
Cash Purchase Price; and

     

    the
Operating Agreement.

     

    (i)
All of the representations and warranties of Buyer and Parent in this Agreement
must have been accurate in all material respects as of the date hereof and must
be accurate in all material respects as if made on the Closing Date, (ii) Buyer
and Parent must have performed and complied with all of their respective
covenants and agreements in this Agreement to be performed prior to or at the
Closing and (iii) Buyer and Parent must deliver to Seller at the Closing a
certificate, in form and substance reasonably satisfactory to Seller, confirming
satisfaction of the conditions in clauses (i) and (ii) above.

     

    The
sale of the Purchased Assets to Buyer must not violate any Law that has been
adopted or issued, or has otherwise become effective, since the date
hereof.

     

    

     

    TERMINATION

     

    Termination
Events

     

    This
Agreement may, by written notice given to Seller or Buyer, as applicable, prior
to the Closing, be terminated:

     

    
      
        
        

      

      
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    by
(i) Buyer, if any representation or warranty made by Seller or any Member is
inaccurate in any material respect or Seller or any Member has breached any
covenant or agreement in this Agreement in any material respect or (ii) Seller,
if any representation or warranty made by Buyer is inaccurate in any material
respect or Buyer has breached any covenant or agreement in this Agreement in any
material respect;

     

    by
(i) Buyer, if any condition in Section 0 has not
been satisfied or waived in writing by December 11, 2009 or if satisfaction of
any such condition is or becomes impossible (in either case, for reasons other
than the failure of Buyer to comply with its obligations under this Agreement)
or (ii) Seller, if any condition in Section 0 has
not been satisfied or waived in writing by December 11, 2009 or if satisfaction
of any such condition is or becomes impossible (in either case, for reasons
other than the failure of Seller or any Member to comply with such Party’s
obligations under this Agreement); or

     

    by
mutual consent of Buyer and Seller.

     

    Effect
of Termination

     

    If this
Agreement is terminated pursuant to Section 0, all
further obligations of the Parties under this Agreement will terminate; provided, however, that the
obligations in Section 0 (confidentiality) and 0 (miscellaneous) will survive the
termination.  Nothing in this 0 will
release any Party from any Liability for any breach of any representation,
warranty, covenant or agreement in this Agreement.

     

    

     

    EMPLOYEES,
EMPLOYEE BENEFITS AND EMPLOYMENT AGREEMENTS

     

    Employment
of Active Employees by Buyer

     

    Subject
to compliance with customary procedures including completion of satisfactory
background checks and acceptance of applicable employment policies, Buyer
intends to make an offer of employment to all Active Employees (the “Hired
Active Employees”).

     

    Buyer’s
expressed intention to extend offers of employment as set forth in this Section
0 will not constitute any commitment or Contract by
Buyer to enter into an employment relationship with any employee of Seller of
any fixed term or duration or upon any terms or conditions other than those that
Buyer may establish pursuant to individual offers of
employment.  Employment offered by Buyer is “at will” and may be
terminated by Buyer or by an employee at any time for any reason (subject to any
written commitments to the contrary made by Buyer or an employee and any
requirements of Law).

     

    Salaries
and Benefits

     

    Seller
will be responsible for (a) the payment of all wages and other remuneration due
to Active Employees with respect to their services as employees of Seller,
including pro rata bonus payments and all vacation pay earned prior to the
Closing Date, (b) the payment of any termination or severance payments
(including any that arise as a result of the consummation of the Transactions)
and the provision of health plan continuation coverage in accordance with the
requirements of COBRA and ERISA §§ 601 through 608, and (c) any claims made or
incurred by Active Employees and their beneficiaries under any of Seller’s
Employee Benefits Plans.

     

    Seller’s
Retirement and Savings Plans

     

    All Hired
Active Employees who are participants in Seller’s retirement plans will retain
their accrued benefits under Seller’s retirement plans as of the Closing Date,
and Seller (or Seller’s retirement plans) will retain sole liability for the
payment of such benefits as and when such Hired Active Employees become eligible
therefor under such plans.

     

    General
Employee Provisions

     

    Each of
Seller and Buyer will give any notices required by Law and take whatever other
actions with respect to the plans, programs and policies described in this 0 as may be reasonably required for it to carry out
its obligations described in this 0.  Seller will provide Buyer with completed
I-9 forms and attachments with respect to all Hired Active Employees, except for
such employees as Seller certifies in writing to Buyer are exempt from such
requirement.  Buyer will not have any responsibility, liability or
obligation, whether to Active Employees, former employees, their beneficiaries
or to any other Person, with respect to any Employee Benefit Plans (including
the establishment, operation or termination thereof and the notification and
provision of COBRA coverage extension) maintained by Seller.

     

    
      
        
        

      

      
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    POST-CLOSING
COVENANTS

     

    The
Parties agree as follows with respect to the period following (and subject to)
the Closing:

     

    Payment
of Excluded Liabilities

     

    Seller
will, and the Members will cause Seller to, pay, perform and discharge the
Excluded Liabilities as and when due.

     

    Payment
of Assumed Liabilities

     

    Buyer
will pay, perform and discharge the Assumed Liabilities as and when
due.

     

    Bulk
Transfer Compliance

     

    Inasmuch
as Buyer is to assume the Assumed Liabilities and Seller is to pay, perform and
discharge the Excluded Liabilities, Buyer and Seller hereby mutually agree to
waive compliance with the provisions of any bulk transfer or sales laws, to the
extent applicable to the Transactions.

     

    Tax
Covenants

     

    Seller
will, at its own expense, file when due all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use, stamp,
registration and other Taxes and fees, including penalties an interest thereon
(collectively, the “Transfer
Taxes”), and, if required by applicable Law, Buyer will, and will cause
its Affiliates to, join in the execution of any such properly completed Tax
Returns and other documentation.  Seller will pay its Transfer Taxes
when due.  Each of Seller and Buyer shall be responsible for its pro
rata share of the current year’s personal property, real property, ad valorem
and similar Taxes with respect to the Purchased Assets, prorated on a calendar
year basis as of the Closing Date.  Notwithstanding the foregoing,
Seller shall be responsible for all Taxes for all prior calendar years and
periods prior to and including the Closing Date.

     

    Consents

     

    This
Agreement will not constitute an assignment, attempted assignment or agreement
to assign any Contract or Permit to the extent that any attempted assignment or
agreement to assign such Contract or Permit without the Consent of any Person
would constitute a breach thereof or would impair the rights of Seller or Buyer
thereunder and such Consent is not obtained.  If any Consent set forth
or required to be set forth on Schedule 0 has not been
obtained prior to or at the Closing, then Seller will, and the Members will
cause Seller to, use its best efforts to obtain such Consent.  Until
such Consent is obtained, or the Contract or Permit to which such Consent
relates is novated or terminated, to the extent permissible under such Contract
or Permit, Buyer will be entitled to receive all of Seller’s benefits under such
Contract or Permit and, to the extent it receives such benefits, will perform
all of the obligations of Seller under such Contract or
Permit.  Seller will, at Buyer’s request, do all such acts and things
as Buyer may reasonably request to enable due performance of such Contract or
Permit and to provide for Buyer the benefits, subject to the obligations, of
such Contract or Permit.  Without limiting the generality of the
foregoing, Seller will provide all reasonable assistance to Buyer (at Buyer’s
request) to enable Buyer to enforce its rights under such Contract or
Permit.

     

    Client
and Account Debtor Notifications; Mail and Receivables; Accounts Receivable
Financing Agreement

     

    As soon
as practicable following the Closing, Buyer will send notifications to (a) each
Client and any related guarantor notifying them that such Client’s Client
Agreement, Client Documentation and Client Obligations have been transferred and
assigned to Buyer and (b) to each account debtor in respect of the Acquired
Client Transaction Rights that its payment obligations with respect thereto
should be made to Buyer.  Seller hereby irrevocably authorizes Buyer
after the Closing to receive and open all mail and other communications received
by Buyer and addressed or directed to Seller and, to the extent relating to the
Business, the Purchased Assets or the Assumed Liabilities, to act with respect
to such communications in such manner as Buyer may elect.  Seller
hereby irrevocably authorizes Buyer after the Closing to endorse, without
recourse, the name of Seller on any check or any other evidence of indebtedness
received by Buyer on account of any of the Purchased Assets or the
Business.  After the Closing, Seller will, and the Members will cause
Seller to, remit to Buyer within 24 hours any payment relating to the Business
or the Purchased Assets (including payments on Receivables and Purchase Orders)
that Seller receives.  As soon as practicable following the Closing,
Buyer and Anchor will work in good faith to negotiate the terms of an agreement
pursuant to which Buyer would receive accounts receivable financing at Parent’s
lower cost of funds while retaining all profit and loss associated with such
accounts receivable on mutually satisfactory terms (the “Anchor/Brookridge Financing
Agreement”).

     

    Litigation
Support

     

    If any
Party is evaluating, pursuing, contesting or defending against any Proceeding in
connection with (a) any Transaction or (b) any fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction on or prior to the Closing Date involving
Seller, each other Party will cooperate with such Party and such Party’s counsel
in the evaluation, pursuit, contest or defense, make available its personnel,
and provide such testimony and access to its books and records as may be
necessary in connection therewith.  The evaluating, pursuing,
contesting or defending Party will reimburse each other Party for its
out-of-pocket expenses related to such cooperation (unless the contesting or
defending Party is entitled to indemnification therefor under 0).

     

    
      
        
        

      

      
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    Transition

     

    After the
Closing, at Buyer’s request, Seller will cooperate with Buyer in its efforts to
continue and maintain for the benefit of Buyer those business relationships of
Seller existing prior to the Closing, including relationships with lessors,
lessees, employees, Governmental Bodies, licensors, licensees, customers,
suppliers and others, and Seller will satisfy the Excluded Liabilities in a
manner that is not detrimental to any of such relationships.  Seller
will refer to Buyer all inquiries relating to the Business.

     

    Confidentiality;
Public Disclosure

     

    Seller
and each Member will, and will cause its Affiliates and Representatives to,
maintain the confidentiality of the Confidential Information at all times, and
will not, directly or indirectly, use any Confidential Information for its own
benefit or for the benefit of any other Person or reveal or disclose any
Confidential Information to any Person other than authorized Representatives of
Buyer, except in connection with this Agreement or with the prior written
consent of Buyer.  The covenants in this Section 0 will not apply to Confidential Information that (a)
is or becomes available to the general public through no breach of this
Agreement by Seller, any Member or any of their respective Affiliates or
Representatives or, to the Knowledge of Seller or any Member, breach by any
other Person of a duty of confidentiality to Buyer or (b) Seller is required to
disclose by applicable Law; provided, however, that Seller will notify
Buyer in writing of such required disclosure as much in advance as practicable
in the circumstances and cooperate with Buyer to limit the scope of such
disclosure.  At any time that Buyer may request, Seller and each
Member will, and will cause their respective Affiliates and Representatives to,
turn over or return to Buyer all Confidential Information in any form (including
all copies and reproductions thereof) in their respective possession or
control.  No Party will issue any press release or make any public
announcement relating to the subject matter of this Agreement without the prior
written approval of Buyer and Seller; provided, however, that any
Party may make any public disclosure it believes in good faith is required by
Law or any listing agreement concerning its publicly-traded securities (in which
case such Party will use its best efforts to advise the other Parties prior to
making the disclosure).  Seller and Buyer will consult with each other
concerning the means by which any employee, customer or supplier of Seller or
any other Person having any business relationship with Seller will be informed
of the Transactions, and Buyer will have the right to be present for any such
communication.

     

    Change
and Use of Name

     

    Seller
and the Members will cease to use and will not grant any license to use any name
containing the term “Brookridge” or any name, slogan, logo or trademark that is
similar to any of the trademarks acquired by Buyer pursuant hereto and will take
such actions as Buyer may reasonably request to enable Buyer and its Affiliates
to use such name, slogan, logo or trademark.  Buyer may refer to its
business as formerly being Seller’s.

     

    Retention
of and Access to Books and Records

     

    Buyer
will retain for a period consistent with Buyer’s record-retention policies and
practices the Books and Records delivered to Buyer. Buyer also will provide
Seller and its Representatives reasonable access thereto, during normal business
hours and on at least three Business Days’ prior written notice, to enable them
to prepare financial statements or tax returns or deal with tax
audits.  Seller will provide Buyer and its Representatives reasonable
access to those books and records that are Excluded Assets, during normal
business hours and on at least three Business Days’ prior written notice, for
any reasonable business purpose specified by Buyer in such notice.

     

    Further
Assurances; Cooperation with Audit

     

    Seller
and the Members shall, at any time and from time to time after the Closing, upon
the request of Buyer, do, execute, acknowledge and deliver, and cause to be
done, executed, acknowledged or delivered, all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney or assurances as may be
reasonably required to sell, transfer, convey, assign and deliver to Buyer, or
to aid and assist in the collection of or reducing to possession by Buyer, of
the applicable Purchased Assets, or to vest in Buyer good and marketable title
to the Purchased Assets.  Additionally, Seller agrees, for a period of
two years after the Closing, upon the request of Buyer, to assist Buyer in
compiling historical information of Seller (including the compilation of
financial information or otherwise) and to comply with any financial reporting
obligations imposed by law, including the provision of audited financial
statements for the years ended December 31, 2009, 2008 and 2007, respectively,
in accordance with GAAP; provided the cost of such audited financial statements
shall be borne by Parent.

     

    
      
        
        

      

      
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    Non-competition/Non-solicitation

     

    Restrictions. Seller agrees not to engage
in any activities competitive with the Business at any time during the
Restricted Period, including any activities similar to those described in the
subsections of this Section 0.  Furthermore, Seller agrees that, except
as otherwise approved in writing by Buyer and Parent, during the Restricted
Period, Seller will not, directly or indirectly, alone or in conjunction with
any other party:

     

    encourage,
induce or attempt to induce any employee of Buyer to terminate his or her
employment with Buyer or to violate any agreements between Buyer and such
employee; or

     

    call
upon, contact, solicit, divert, encourage or appropriate or attempt to call
upon, contact, solicit, divert, encourage or appropriate any Customer for
purposes of engaging in the Business or aiding any other person in doing so;
or

     

    divert
away or attempt to divert away any business from Buyer to another person or
entity; or

     

    interfere
with the business relationship between a Customer and Buyer; or

     

    engage in
the Business in the Territory.

     

    Reasonableness
of Restrictions. Seller agrees that the
covenants in this Section 0 are reasonable given
the real and potential competition encountered (and reasonably expected to be
encountered) by Buyer and the substantial knowledge and goodwill Seller has
acquired with respect to the Business.  Notwithstanding the foregoing,
in the event that any provision of this Section 0
is determined by a court to be invalid or unenforceable, such court may, and is
hereby authorized to, reduce or limit the terms of such provision to allow it to
be enforced to the maximum extent possible.

     

    Remedies;
Injunctive Relief. Seller acknowledges that
Buyer will suffer irreparable harm in the event that Seller breaches any of
Seller’s obligations under this Section 0 and that
monetary damages will be inadequate to compensate Buyer for such
breach.  Accordingly, Seller agrees that, in the event of a breach by
Seller of any of Seller’s obligations under this Section 0, in addition to Buyer’s right to damages and any
other rights Buyer may have at law, in equity, by contract or otherwise, Buyer
will be entitled to obtain from any court of competent jurisdiction preliminary
and permanent injunctive relief, and expedited discovery for the purpose of
seeking relief, in order to prevent or to restrain any such breach (and Seller
agrees to waive any requirement for the securing or posting of any bond in
connection with such remedies).

     

    Member Restrictive
Covenants.  Each Member hereby agrees to comply with the
non-competition and other restrictive covenants contained in his Employment
Agreement.

     

    Key
Person Life Insurance.

     

      Each
Member shall take all actions reasonably requested by Parent so that Parent may
purchase “key person” life insurance covering each Member and on such other
terms and conditions as are satisfactory to Parent.

     

    Client
Agreements

     

    As soon
as practicable following the Closing, Anchor and the Members shall, at the
Company’s expense, cause the Company’s form Purchase Order Purchase Agreement to
be reviewed by counsel selected by Anchor to ensure the enforceability
thereof.  Following such review, the Company’s form Purchase Order
Purchase Agreement shall be modified to address any issues identified thereby
(the “New Purchase Order
Agreement”).  Each Member shall, jointly and severally,
indemnify Anchor and hold Anchor harmless against any loss suffered by Anchor as
a result of the unenforceability of any Purchase Order Purchase Agreement that
is not in the form of the New Purchase Order Agreement.

     

    
      
        
        

      

      
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    INDEMNIFICATION

     

    Indemnification
by Seller and the Members

     

    After the
Closing and subject to the terms and conditions of this 0:

     

    Each
Member, severally and not jointly, will indemnify and hold harmless Buyer,
Parent and their Affiliates and Representatives from, and pay and reimburse
Buyer, Parent and their Affiliates and Representatives for, all Losses directly
or indirectly relating to or arising from: (i) any breach or inaccuracy or any
allegation of any third party that, if true, would be a breach or inaccuracy of
any representation or warranty made by such Member in 0 or, to the extent related to any such representation
or warranty, pursuant to the certificates delivered by such Member pursuant to
Section 0; or (ii) any breach of any covenant or
agreement of such Member in 0.

     

    Seller
and each Member, to the extent of their respective Liability Caps as set forth
below, jointly and severally, will indemnify and hold harmless Buyer and its
Affiliates and Representatives from, and pay and reimburse Buyer and its
Affiliates and Representatives for, all Losses directly or indirectly relating
to or arising from:  (i) any material breach or inaccuracy or any
allegation of any third party that, if true, would be a breach or inaccuracy of
any representation or warranty made by Seller in this Agreement; (ii) any
material breach of any covenant or agreement of Seller in this Agreement; (iii)
any failure to pay, perform or otherwise discharge any Excluded Liability as and
when due or any Liability arising out of or in connection with non-compliance
with any “bulk sales,” “bulk transfer” or any similar Law other than as a result
of any failure by Buyer to discharge any Assumed Liability; or (iv) any claim by
Seller, any Member or any Person claiming through or on behalf of Seller or any
Member arising out of or relating to any act or omission by Buyer or any other
Person in reliance upon instructions from or notices given by
Seller.

     

    Indemnification
by Buyer and Parent

     

    After the
Closing and subject to the terms and conditions of this 0, Buyer and Parent, jointly and severally, will
indemnify and hold harmless Seller from, and pay and reimburse Seller for, all
Losses, directly or indirectly, relating to or arising from:  (i) any
breach or inaccuracy or any allegation of any third party that, if true, would
be a breach or inaccuracy of any representation or warranty made by Buyer in
this Agreement; (ii) any breach of any covenant or agreement of Buyer in this
Agreement; or (iii) any failure to pay, perform or otherwise discharge any
Assumed Liability as and when due.

     

    Survival
and Time Limitations

     

    All
representations, warranties, covenants and agreements of the Parties in this
Agreement or any other certificate or document delivered pursuant to this
Agreement will survive the Closing.    Seller and the
Members will have no Liability with respect to any claim for any breach or
inaccuracy of any representation or warranty in this Agreement or any other
certificate or document delivered pursuant to this Agreement, or any covenant or
agreement in this Agreement to be performed and complied with prior to the
Closing Date, unless Parent or Buyer notifies the Members of such a claim on or
before the date two (2) years after the Closing Date; provided, however, that any
claim relating to 0 (Members) or Section 0 (organization), 0
(authority), 0 (conflicts) or 0 (title to assets), fraud, or any covenant or
agreement to be performed or complied with at or after the Closing may be made
at any time within any applicable statute or period of limitations.

     

    Manner
of Payment

     

    Buyer or
Parent may set off any amount to which it may be entitled under Section 0 or this 0 against any
amount otherwise payable by Buyer, Parent or their Affiliates to Seller or any
Member, including amounts otherwise payable to Seller pursuant to Section 0 or any other written commercial agreement between
Buyer and Seller.  The exercise of such set-off right in good faith
will not constitute a breach or event of default under any Contract relating to
any amount against which the set-off is applied.

     

    Other
Indemnification Matters

     

    All indemnification payments payable
to Buyer under this
0 will be deemed adjustments to the
Purchase Price.  The right to indemnification will not
be affected by any investigation conducted with respect to, or any Knowledge
acquired (or capable of being acquired) at any time, whether before or after the
date hereof, with respect to any representation, warranty, covenant or agreement
in this Agreement.  THE INDEMNIFICATION PROVISIONS IN THIS
ARTICLE XI WILL BE ENFORCEABLE REGARDLESS OF WHETHER ANY PERSON ALLEGES OR
PROVES THE SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF THE
PERSON SEEKING INDEMNIFICATION OR ITS AFFILIATES, OR THE SOLE OR CONCURRENT
STRICT LIABILITY IMPOSED ON THE PERSON SEEKING INDEMNIFICATION OR ITS
AFFILIATES.The waiver of any condition based on
the accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or agreement, will not affect the right to
indemnification, payment of damages, or other remedy based on any such
representation, warranty, covenant or agreement.

     

    
      
        
        

      

      
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    Any person or entity claiming
indemnification hereunder is hereinafter referred to as the “Indemnified Party”
and any person against whom such claims are asserted hereunder is hereinafter
referred to as the “Indemnifying Party.”  In the event that any Losses
are asserted against or sought to be collected from an Indemnified Party by a
third party, said Indemnified Party shall with reasonable promptness notify the
Indemnifying Party of the Losses, specifying the nature of and specific basis
for such Losses and the amount or the estimated amount thereof to the extent
then feasible (the “Claim Notice”); provided, however, that any failure to so notify the
Indemnifying Party will not relieve the Indemnifying Party from any obligation
hereunder unless (and then solely to the extent) the Indemnifying Party is
materially prejudiced by such failure.  The Indemnifying Party shall
have 30 days from the personal delivery or receipt of the Claim Notice (the
“Notice Period”) to
notify the Indemnified Party (i) whether or not it disputes the liability of the
Indemnifying Party to the Indemnified Party hereunder with respect to such
Losses and (ii) whether or not it desires, at the sole cost and expense of the
Indemnifying Party, to defend the Indemnified Party against such Losses;
provided,
however, that any
Indemnified Party is hereby authorized prior to and during the Notice Period to
file any motion, answer or other pleading that it shall deem necessary or
appropriate to protect its interests or those of the Indemnifying Party (and of
which it shall have given notice and opportunity to comment to the Indemnifying
Party) and not prejudicial to the Indemnifying Party.  In the event
that the Indemnifying Party notifies the Indemnified Party within the Notice
Period that it desires to defend the Indemnified Party against such Losses and
except as hereinafter provided, the Indemnifying Party shall have the right to
defend by all appropriate proceedings, and with counsel of its own choosing
which such counsel shall be reasonably satisfactory to the Indemnified Party,
which proceedings shall be promptly settled or prosecuted by them to a final
conclusion.  If the Indemnified Party desires to participate in, but
not control, any such defense or settlement it may do so at its sole cost and
expense.  In such case, (A) if requested by the Indemnifying Party,
the Indemnified Party agrees to cooperate with the Indemnifying Party and its
counsel in contesting any Losses that the Indemnifying Party elects to contest,
or, if appropriate and related to the claim in question, in making any
counterclaim against the person asserting the third party Losses, or any
cross-complaint against any person and (B) the subject claims may be settled or
otherwise compromised only with the prior written consent of the Indemnified
Party which consent will not be withheld unreasonably.  If the
Indemnified Party does not so choose to defend the Indemnified Party against
such Losses the Indemnified Party shall be entitled to defend against, and
consent to the entry of any judgment or enter into any settlement with respect
to, such claims in any manner it may deem appropriate (and the Indemnified Party
need not consult with, or obtain any consent from, the Indemnifying Party in
connection therewith), and (X) the Indemnifying Party will reimburse the
Indemnified Party promptly and periodically (but no less often than monthly) for
the costs of defending against such claims, including attorneys’ fees and
expenses, and (Y) the Indemnifying Party will remain responsible for any Losses
the Indemnified Party may incur relating to or arising out of the Third-Party
Claim to the fullest extent provided in this 0.

     

    Member’s
Liability Cap

     

    .  Notwithstanding
anything contained herein to the contrary, each Member’s maximum aggregate
liability with respect to Section 0 and any
representation or warranty made by such Member pursuant to this Agreement will
be limited to an amount equal to one-quarter (1/4) of the Cash Purchase Price
and any subsequent Contingent Purchase Price Consideration actually paid by
Buyer (“Member’s Liability Cap”), unless such liability is the result of fraud
on the part of a Member.  In the event the liability of a Member
hereunder results from the fraudulent activity of a Member, such liability shall
be unlimited in amount as to any such Member engaging in the fraudulent
activity.

     

     

    MISCELLANEOUS

     

    Further
Assurances

     

    Each
Party agrees to furnish upon request to any other Party such further
information, to execute and deliver to any other Party such other documents, and
to do such other acts and things (including the execution and delivery of such
further instruments or documents as may be necessary or convenient to transfer
and convey any Purchased Asset to Buyer), all as any other Party may reasonably
request for the purpose of carrying out the intent of the Transaction
Documents.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    No
Third-Party Beneficiaries

     

    This
Agreement does not confer any rights or remedies upon any Person (including any
employee of Seller) other than the Parties, their respective successors and
permitted assigns and, as expressly set forth in this Agreement, any Indemnified
Party.

     

    Entire
Agreement

     

    The
Transaction Documents constitute the entire agreement among the Parties with
respect to the subject matter of the Transaction Documents and supersede all
prior agreements (whether written or oral and whether express or implied) among
any Parties to the extent related to the subject matter of the Transaction
Documents (including any letter of intent or confidentiality
agreement).

     

    Successors
and Assigns

     

    This
Agreement will be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns.  Neither Seller nor any
Member may assign, delegate or otherwise transfer (whether by operation of law
or otherwise) any of its rights, interests or obligations in this Agreement
without the prior written approval of Buyer.  Buyer may assign any or
all of its rights or interests, or delegate any or all of its obligations, in
this Agreement to (a) any successor to Buyer or any acquirer of a material
portion of the business or assets of Buyer, (b) one or more of Buyer’s
Affiliates, or (c) any lender to Buyer or its Affiliates as security for
obligations to such lender.

     

    Counterparts

     

    This
Agreement may be executed by the Parties in multiple counterparts and shall be
effective as of the date set forth above when each Party shall have executed and
delivered a counterpart hereof, whether or not the same counterpart is executed
and delivered by each Party.  When so executed and delivered, each
such counterpart shall be deemed an original and all such counterparts shall be
deemed one and the same document.  Transmission of images of signed
signature pages by facsimile, e-mail or other electronic means shall have the
same effect as the delivery of manually signed documents in person.

     

    Notices

     

    Any
notice pursuant to this Agreement must be in writing and will be deemed
effectively given to another Party on the earliest of the date (a) three
Business Days after such notice is sent by registered U.S. mail, return receipt
requested, (b) one Business Day after receipt of confirmation if such notice is
sent by facsimile, (c) one Business Day after delivery of such notice into the
custody and control of an overnight courier service for next day delivery, (d)
one Business Day after delivery of such notice in person and (e) such notice is
received by that Party; in each case to the appropriate address below (or to
such other address as a Party may designate by notice to the other
Parties):

     

    
      
        	
                If
      to Seller:

              	
                with
      a copy to (which shall not constitute notice):

              
	
                Brookridge
      Funding, LLC

              	
                Cramer
      & Anderson LLP

              
	
                26
      Mill Plain Road

              	
                51
      Main Street

              
	
                Danbury,
      CT  06811

              	
                New
      Milford, CT  06776

              
	
                Fax:(203)
      790-7326

              	
                

                  Fax:
      (860) 355-9460

                

              
	
                Phone:  (203)
      790-7301

              	
                Phone:
      (860)
      355-2631

              
	
                Attn:
      Michael
      P. Hilton

              	
                

                  Attn:
      Mitchell J. Melnick

                

              
	 
      	 
      
	
                If
      to Hilton:

              	
                If
      to McNiff:

              
	 
      	 
      
	
                26
      Mill Plain Road

              	
                26
      Mill Plain Road

              
	
                Danbury,
      CT  06811

              	
                Danbury,
      CT  06811

              
	
                Fax:  (203)
      790-7326

              	
                Fax:  (203)
      790-7326

              
	
                Phone:  (203)
      790-7301

              	
                Phone:  (203)
      790-7301

              
	 
      	 
      
	
                If
      to Buyer:

              	
                with
      a copy to (which shall not constitute notice):

              
	
                Brookridge
      Funding Services, LLC

              	
                K&L
      Gates LLP

              
	
                10801
      Johnston Road, Suite 210

              	
                214
      North Tryon Street , 47th
      Floor

              
	
                Charlotte,
      NC  28226

              	
                Charlotte,
      NC  28202

              
	
                Fax:  (561)
      961-9005

              	
                Fax:  (704)
      353-3140

              
	
                Phone:  (866)
      950-6669 (ext. 303)

              	
                Phone:  (704)
      331-7440

              
	
                Attn:
      Brad Bernstein

              	
                Attn:
      Mark R. Busch

              

      

    Arbitration

     

    Any
controversy, claim or dispute arising out of or relating to Section 0 (Contingent Purchase Price Consideration) shall be
determined by binding arbitration to be conducted in Charlotte, North Carolina
(or such other location as Buyer and Seller may mutually agree to in writing)
before a single arbitrator selected in accordance with the
Rules.  Arbitration proceedings shall be conducted in accordance with
the commercial arbitration rules of the American Arbitration Association or such
other rules and procedures as shall be agreed upon by Buyer and Seller (the
“Rules”).  The
Parties hereby agree to abide and be bound by all decisions and awards rendered
by the arbitrator.  Judgment upon such decisions and awards may be
entered in any court of competent jurisdiction.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    JURISDICTION;
SERVICE OF PROCESS

     

    EACH
PARTY (a) CONSENTS TO THE PERSONAL JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED IN CHARLOTTE, NORTH CAROLINA (AND ANY CORRESPONDING APPELLATE COURT) IN
ANY PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT, (b)
WAIVES ANY VENUE OR INCONVENIENT FORUM DEFENSE TO ANY PROCEEDING MAINTAINED IN
SUCH COURTS, AND (c) EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, AGREES NOT
TO INITIATE ANY PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION
DOCUMENT IN ANY OTHER COURT OR FORUM.  PROCESS IN ANY SUCH PROCEEDING
MAY BE SERVED ON ANY PARTY ANYWHERE IN THE WORLD.

     

    Governing
Law

     

    This
Agreement and all other Transaction Documents (unless otherwise stated therein)
will be governed by the laws of the State of North Carolina without giving
effect to any choice or conflict of law principles of any
jurisdiction.

     

    Amendments
and Waivers

     

    Prior to
the Closing, no amendment of any provision of this Agreement will be valid
unless the amendment is in writing and signed by Buyer and
Seller.  After the Closing, no amendment of any provision of this
Agreement will be valid unless the amendment is in writing and signed by Buyer,
Seller and the Members.  No waiver of any provision of this Agreement
will be valid unless the waiver is in writing and signed by the waiving
Party.  The failure of a Party at any time to require performance of
any provision of this Agreement will not affect such Party’s rights at a later
time to enforce such provision.  No waiver by any Party of any breach
of this Agreement will be deemed to extend to any other breach hereunder or
affect in any way any rights arising by virtue of any other breach.

     

    Severability

     

    Any
provision of this Agreement that is determined by any court of competent
jurisdiction to be invalid or unenforceable will not affect the validity or
enforceability of any other provision hereof or the invalid or unenforceable
provision in any other situation or in any other jurisdiction. Any provision of
this Agreement held invalid or unenforceable only in part or degree will remain
in full force and effect to the extent not held invalid or
unenforceable.

     

    Expenses

     

    Seller
and the Members will bear all expenses incurred by Seller or any Member or any
of their respective Representatives in connection with the Transactions
contemplated to be performed before or on the
Closing  Date.  Except as otherwise expressly provided in
this Agreement, Buyer will bear all expenses incurred by Buyer or any of its
Representatives in connection with the Transactions contemplated to be performed
before or on the Closing Date.  If this Agreement is terminated, the
obligation of each Party to pay its own expenses will be subject to any rights
of such Party arising from a breach of this Agreement by another
Party.

     

    Interpretation

     

    The
article and section headings in this Agreement are inserted for convenience only
and are not intended to affect the interpretation of this
Agreement.  Any reference in this Agreement to any Article or Section
refers to the corresponding Article or Section of this Agreement.  Any
reference in this Agreement to any Schedule or Exhibit refers to the
corresponding Schedule or Exhibit attached to this Agreement and all such
Schedules and Exhibits are incorporated herein by reference.  The word
“including” in this Agreement means “including without
limitation.”  This Agreement will be construed as if drafted jointly
by the Parties and no presumption or burden of proof will arise favoring or
disfavoring any Party by virtue of the authorship of any provision in this
Agreement.  Unless the context requires otherwise, any reference to
any Law will be deemed also to refer to all amendments and successor provisions
thereto and all rules and regulations promulgated thereunder, in each case as in
effect as of the date hereof and the Closing Date.  All accounting
terms not specifically defined in this Agreement will be construed in accordance
with GAAP as in effect on the date hereof (unless another effective date is
specified herein).  The word “or” in this Agreement is disjunctive but
not necessarily exclusive.  All words in this Agreement will be
construed to be of such gender or number as the circumstances
require.  References in this Agreement to time periods in terms of a
certain number of days mean calendar days unless expressly stated herein to be
Business Days.  In interpreting and enforcing this Agreement, each
representation and warranty will be given independent significance of fact and
will not be deemed superseded or modified by any other such representation or
warranty.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    Specific
Performance

     

     Each
Party acknowledges that the other Parties would be damaged irreparably and would
have no adequate remedy of law if any provision of this Agreement is not
performed in accordance with its specific terms or otherwise is
breached.  Accordingly, each Party agrees that the other Parties will
be entitled to an injunction to prevent any breach of any provision of this
Agreement and to enforce specifically any provision of this Agreement, in
addition to any other remedy to which they may be entitled and without having to
prove the inadequacy of any other remedy they may have at law or in equity and
without being required to post bond or other security.

     

    Time
Is of the Essence

     

    Time is
of the essence with respect to all time periods and dates set forth
herein.

     

    Attorneys’
Fees

     

    In the
event any Party has to enforce its rights under this Agreement due to a breach
by another Party, the prevailing Party in any such enforcement action shall be
entitled to recover from the other Party, all costs it incurs in connection with
enforcing its rights hereunder including but not limited to, all attorneys’
fees, court costs and costs and fees of appeal.

     

    [Signature
pages follow]

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    The
Parties have executed and delivered this Asset Purchase Agreement as of the date
first written above.

     

    Buyer:

    

     BROOKRIDGE
FUNDING SERVICES, LLC

    

    By: /s/ Michael P.
Hilton                                       

    Name: Michael P.
Hilton                               

    Title:   Manager                                                      

    

    

    Seller:

    

    BROOKRIDGE
FUNDING, LLC

    

    By: /s/ John A. McNiff,
III                                    

    Name: John A.
McNiff                                    

    Title:   Manager                                                      

    

    

    Parent:

    

    ANCHOR
FUNDING SERVICES, INC.

    

    By:/s/ Brad
Bernstein                                            

    Name:Brad
Bernstein                                    

    Title: President                                              

    

    

    Members:

    

    

    /s/ Michael P.
Hilton                                              

    Michael
P. Hilton

    

    

    /s/ John A.
McNiff,III                                            

    John A.
McNiff III

    

    

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    DEFINITIONS

     

    “Account Debtor” means any
Person obligated to pay in respect of a Receivable.

     

     “Active Employees” means all
employees employed by Seller, including employees on temporary leave of absence,
including family medical leave, military leave, temporary disability or sick
leave, but excluding employees on long-term disability leave.

     

    “Affiliate” means, with
respect to a specified Person, any other Person that directly or indirectly
controls, is controlled by, or is under common control with, the specified
Person.  The term “control” means (a) the possession, directly or
indirectly, of the power to vote 10% or more of the securities or other equity
interests of a Person having ordinary voting power, (b) the possession, directly
or indirectly, of the power to direct or cause the direction of the management
policies of a Person, by contract or otherwise or (c) being a director, officer,
executor, trustee or fiduciary (or their equivalents) of a Person or a Person
that controls such Person.

     

    “Agreement” is defined in the
opening paragraph.

     

    “Assumed Liabilities” is
defined in Section 0.

     

    “Balance Sheet” means the
audited balance sheet of Seller as of December 31, 2008, and the notes thereto,
all of which are attached to Schedule 0.

     

    “Balance Sheet Date” means the
date of the Balance Sheet.

     

    “Books and Records” is defined
in Section 0.

     

    “Book Value” means (1) with
respect to Acquired Client Transaction Rights associated with Purchase Orders,
net funds employed with respect to the related Purchase Orders plus accrued fees,
and (2) with respect to Acquired Client Transaction Rights associated with
Receivables, the amount of the related Receivables less client reserves
(net of accrued fees). “Broker
Agreement” means any Contract between Seller and any Person pursuant to
which such Person solicits new prospective clients for Seller.

     

    “Business” means the business
conducted by Seller, including (a) invoice or accounts receivable factoring, (b)
inventory financing, purchase order financing or services related to the sale
and assignment of purchase orders and (c) the activities carried on by Seller
for the purpose of providing factoring services to its customers.

     

    “Business Day” means any day
that is not a Saturday, Sunday or any other day on which banks are required or
authorized by law to be closed in Charlotte, North Carolina.

     

    “Buyer” is defined in the
opening paragraph.

     

    “Cap” is defined in Section 0.

     

    “Client” means any Person who
sells Purchase Orders or Receivables to Seller under a Client
Agreement.

     

    “Client Agreements” shall mean
all purchase order finance agreements, factoring agreements, related security
agreements, assignments of purchase orders and accounts, agreements for the sale
and assignment of purchase orders, accounts or billings and any other agreements
pertaining to the purchase of purchase orders or accounts to which Seller is a
party with any Client.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    “Client Documentation” shall
mean, collectively, all Client Agreements, all powers of attorney executed by
any Client in favor of Seller in connection with any factoring or purchase order
financing arrangement between such Client and Seller, all financing statements
between Seller, as secured party, and any Client, as debtor, filed in connection
with any such arrangements, all guarantees of any such arrangements, all
agreements, instruments, certificates, invoices, letters of credit, performance
bonds, promissory notes, chattel paper, bills of lading and other documents
evidencing or pertaining to any and all purchase order which are financed or
accounts which are factored pursuant to such arrangement and all other
documentation relating to any such arrangement.

     

    “Client Obligations” means the
principal amount of all advances, and other extensions of credit or other
financial accommodations made to or on behalf of the Client pursuant to any
Client Agreement, and all other amounts, such as attorney’s fees (other than
interest or other compensation) chargeable to the Client pursuant
thereto.

     

    “Client Transaction Rights”
means Seller’s rights with respect to Client Agreements including the related
Client Obligations, the Collateral and all other sources of repayment
thereof.

     

    “Closing” is defined in
Section 0.

     

    “Closing Date” is defined in
Section 0.

     

    “COBRA” means the requirements
of Part 6 of Subtitle B of Title I of ERISA and Code § 4980B.

     

    “Code” means the Internal
Revenue Code of 1986.

     

    “Collateral” means all
collateral, guarantees, letters of credit and performance bonds received by or
granted to Seller pursuant to a Client Agreement, or otherwise securing the
Client Obligations, including security interests in present and future
Inventory, Accounts, Instruments, Documents, Chattel Paper, General Intangibles,
Investment Property (each as defined in the Uniform Commercial Code), and the
proceeds of all of the foregoing.

     

    “Confidential Information”
means information concerning the Business or affairs of Seller, including
information relating to customers, clients, suppliers, distributors, investors,
lenders, consultants, independent contractors or employees, customer and
supplier lists, price lists and pricing policies, cost information, financial
statements and information, budgets and projections, business plans, production
costs, market research, marketing plans and proposals, sales and distribution
strategies, manufacturing and production processes and techniques, processes and
business methods, technical information, pending projects and proposals, new
business plans and initiatives, research and development projects, inventions,
discoveries, ideas, technologies, trade secrets, know-how, formulae, technical
data, designs, patterns, marks, names, improvements, industrial designs, mask
works, compositions, works of authorship and other Intellectual Property,
devices, samples, plans, drawings and specifications, photographs and digital
images, computer software and programming, all other confidential information
and materials relating to the Business, and all notes, analyses, compilations,
studies, summaries, reports, manuals, documents and other materials prepared by
or for Seller containing or based in whole or in part on any of the foregoing,
whether in verbal, written, graphic, electronic or any other form and whether or
not conceived, developed or prepared in whole or in part by Seller.

     

    “Consent” means any consent,
approval, authorization, permission or waiver.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    “Contingent Purchase Price
Consideration” is defined in Section 0.

     

    “Contract” means any contract,
obligation, understanding, commitment, lease, license, purchase order, bid or
other agreement, whether written or oral or whether express or implied, together
with all amendments and other modifications thereto.

     

    “Credit Agreement” means that
certain Credit Agreement, dated as of the Closing Date, by and among Buyer and
Parent or its Affiliates, providing for a senior line of credit in the aggregate
original principal amount of $3,700,000 at an applicable annual interest rate of
twenty (20%) percent, as amended, restated, supplemented or otherwise modified
from time to time.

     

     “Customer” means any
Person who sells or sold Purchase Orders or Receivables to Seller under a Client
Agreement on the Closing Date or during the 12-month period prior to such
date.

     

    “Debt Repayment Amount” is
defined in Section 0.

     

    “Employee Benefit Plan” means
any (a) qualified or nonqualified Employee Pension Benefit Plan (including any
Multiemployer Plan) or deferred compensation or retirement plan or arrangement,
(b) Employee Welfare Benefit Plan or (c) equity-based plan or arrangement
(including any stock option, stock purchase, stock ownership, stock appreciation
or restricted stock plan) or material fringe benefit or other retirement,
severance, bonus, profit-sharing or incentive plan or arrangement.

     

    “Employee Pension Benefit
Plan” has the meaning set forth in ERISA § 3(2).

     

    “Employee Welfare Benefit
Plan” has the meaning set forth in ERISA § 3(1).

     

    “Employment Agreements” means
the Employment Agreements between Buyer and each Hilton and McNiff in the form
of Exhibits B-1
and B-2
attached hereto.

     

    “Encumbrance” means any lien,
mortgage, pledge, encumbrance, charge, security interest, adverse or other
claim, community property interest, condition, equitable interest, option,
warrant, right of first refusal, easement, profit, license, servitude, right of
way, covenant, zoning or other restriction of any kind or nature.

     

    “Environmental Law” means any
Law relating to the environment, health or safety, including any Law relating to
the presence, use, production, generation, handling, management, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control or cleanup of any material,
substance or waste limited or regulated by any Governmental Body.

     

    “ERISA” means the Employee
Retirement Income Security Act of 1974.

     

    “Excluded Clients” shall mean
all Client Transaction Rights under the Client Agreements that are not purchased
by Buyer, as set forth on Schedule 3.10(b).

     

    “Excluded Assets” is defined
in Section 0.

     

    “Excluded Contracts” is
defined in Section 0.

     

    “Excluded Liabilities” is
defined in Section 0.

     

    “Financial Statements” is
defined in Section 0.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    “GAAP” means generally
accepted accounting principles in the United States as set forth in
pronouncements of the Financial Accounting Standards Board (and its
predecessors) and the American Institute of Certified Public Accountants and,
unless otherwise specified, as in effect on the date hereof or, with respect to
any financial statements, the date such financial statements were
prepared.

     

    “Governmental Body” means any
federal, state, local, foreign or other government or quasi-governmental
authority or any department, agency, subdivision, court or other tribunal of any
of the foregoing.

     

    “Hired Active Employees” is
defined in Section 0.

     

    “Indebtedness” means as to any
Person at any time: (a)  obligations of such Person for borrowed
money; (b) obligations of such Person evidenced by bonds, notes, debentures or
other similar instruments; (c) obligations of such Person to pay the deferred
purchase price of property or services (including obligations under noncompete,
consulting or similar arrangements), except trade accounts payable of such
Person arising in the ordinary course of business that are not past due by more
than 90 days or that are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves have been
established on the financial statements of such Person; (d) capitalized lease
obligations of such Person; (e) indebtedness or other obligations of others
guaranteed by such Person; (f) obligations secured by an Encumbrance existing on
any property or asset owned by such Person; (g) reimbursement obligations of
such Person relating to letters of credit, bankers’ acceptances, surety or other
bonds or similar instruments; (h) Liabilities of such Person relating to
unfunded, vested benefits under any Employee Benefit Plan (excluding obligations
to deliver stock pursuant to stock options or stock ownership plans); and (i)
net payment obligations incurred by such Person pursuant to any hedging
agreement.

     

    “Insurance Policies” is
defined in Section 0.

     

    “Intellectual Property” means
(a) inventions (whether patentable or unpatentable and whether or not reduced to
practice), improvements thereto, and patents, patent applications, and patent
disclosures, together with reissuances, continuations, continuations-in-part,
revisions, extensions and reexaminations thereof; (b) trademarks, service marks,
trade dress, logos, trade names, and corporate names, together with
translations, adaptations, derivations and combinations thereof and including
goodwill associated therewith, and applications, registrations, and renewals in
connection therewith; (c) copyrightable works, copyrights, and applications,
registrations and renewals in connection therewith; (d) mask works and
applications, registrations and renewals in connection therewith; (e) trade
secrets and Confidential Information; (f) computer software, in object and
source code format (including data and related documentation); (g) plans,
drawings, architectural plans and specifications; (h) websites; (i) other
proprietary rights; and (j) copies and tangible embodiments and expressions
thereof (in whatever form or medium), all improvements and modifications thereto
and derivative works thereof.

     

    “Interests” means the limited
liability company membership interests of Seller.

     

    “Interim Balance Sheet” is
defined in Section 0.

     

    “Interim Balance Sheet Date”
means the date of the Interim Balance Sheet.

     

    “IRS” means the U.S. Internal
Revenue Service.

     

    “Knowledge” means (a) actual
knowledge or (b) knowledge that would be expected to be obtained after a
reasonably comprehensive investigation concerning the matter at
issue.  Seller and each Member that is not an individual will be
deemed to have Knowledge of a matter if any Affiliate of such Person or any
employee of such Person with responsibility for such matter has, or at any time
had, Knowledge of such matter.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    “Law” means any federal,
state, local, foreign or other law, statute, ordinance, regulation, rule,
regulatory or administrative guidance, Order, constitution, treaty, principle of
common law or other restriction of any Governmental Body.

     

    “Lease” is defined in Section
0.

     

    “Liability” means any
liability, obligation or commitment of any kind or nature, whether known or
unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated, or due or to become due.

     

    “License” is defined in
Section 0.

     

    “Loss” means any loss, claim,
demand, Order, damage, penalty, fine, cost (including any opportunity cost),
settlement payment, Liability, Tax, Encumbrance, diminution of value, expense,
fee, court costs or reasonable attorneys’ fees and expenses.

     

    “Material Adverse Effect”
means any material adverse effect on the Business, operations, properties,
assets, Liabilities, condition (financial or otherwise) or prospects of
Seller.

     

    “Material Contract” is defined
in Section 0.

     

    “Members” is defined in the
opening paragraph.

     

    “Net Operating Income” means,
the net operating income (or net operating loss) of Buyer for the period in
question after giving effect to deduction of or provision for all operating
expenses, all taxes (excluding federal, state and local income taxes) and
reserves (including reserves for deferred taxes) and all other proper
deductions, all determined in accordance with GAAP; provided, that there shall be
excluded: (a) any net gains or losses on the sale or other disposition, not
in the ordinary course of business, of investments and other capital assets,
(b) any net gain arising from the collection of the proceeds of any
insurance policy, (c) any write-up of any asset and (d) any other
extraordinary item (as determined by GAAP); provided, further, that in
determining Net Operating Income, (1) any costs for services or benefits
provided to Buyer by Parent or any Affiliate thereof shall be deducted as
expenses and be allocated to Buyer in reasonable proportion to the percentage of
the benefit to Buyer as compared to the benefit to Parent’s Affiliates
generally, provided that in no event will such allocations exceed $5,000 in a
fiscal quarter; (2) if any amount owing from a client of Buyer shall fail for
any reason to be collected within 150 days, such amount shall be treated as a
deduction from Net Operating Income at that time whether or not such amount is
required to be written off under GAAP (provided that any such deduction shall be
reversed if later collected); and (3) to the extent any Purchase Order or
Receivable fails to be collected and results in a payment to Buyer pursuant to
Section 0, any income or loss associated with such
Purchase Order or Receivable shall be disregarded in computing Net Operating
Income.

     

    “Operating Agreement” means
the Operating Agreement of Buyer in the form of Exhibit
C.

     

    “Order” means any order,
award, decision, injunction, judgment, ruling, decree, charge, writ, subpoena or
verdict entered, issued, made or rendered by any Governmental Body or
arbitrator.

     

    “Organizational Documents”
means (a) the certificate or articles of formation and the limited liability
company agreement, (b) any documents comparable to those described in clause (c)
as may be applicable pursuant to any Law and (d) any amendment or modification
to any of the foregoing.

     

    
      
        
        

      

      
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    “Parent” means Anchor Funding
Services, Inc., a Delaware corporation.

     

    “Participation Agreement”
means any Contract between Seller and any Person pursuant to which Seller sold
to such Person a participation in Seller’s financing relationship with any
Client.

     

    “Party” means Buyer, Seller or
any Member.

     

    “Permit” means any permit,
license or Consent issued by any Governmental Body or pursuant to any
Law.

     

    “Permitted Encumbrance” means
(a) any mechanic’s, materialmen’s or similar statutory lien incurred in the
ordinary course of business for monies not yet due, (b) any lien for Taxes not
yet due, (c) any recorded easement, covenant, zoning or other restriction on the
Real Property that, together with all other Permitted Encumbrances, does not
prohibit or impair the current use, occupancy, value or marketability of title
of the property subject thereto and (d) the Encbumbrances set forth on Schedule 0.

     

    “Person” means any individual,
corporation, limited liability company, partnership, company, sole
proprietorship, joint venture, trust, estate, association, organization, labor
union, Governmental Body or other entity.

     

    “Proceeding” means any
proceeding, charge, complaint, claim, demand, notice, action, suit, litigation,
hearing, audit, investigation, arbitration or mediation (in each case, whether
civil, criminal, administrative, investigative or informal) commenced,
conducted, heard or pending by or before any Governmental Body, arbitrator or
mediator.

     

    “Purchase Price” is defined in
Section 0.

     

    “Purchased Assets” is defined
in Section 0.

     

    “Purchase Orders” means
purchase orders sold to Seller under a Client Agreement.

     

    “Real Property” is defined in
Section 0.

     

    “Receivables” means accounts
receivable sold to Seller under a Client Agreement.

     

    “Related Person” means (a)
with respect to a specified individual, any member of such individual’s Family
and any Affiliate of any member of such individual’s Family and (b) with respect
to a specified Person other than an individual, any Affiliate of such Person and
any member of the Family of any such Affiliates that are
individuals.  The “Family” of a specified
individual means the individual, such individual’s spouse and former spouses,
any other individual who is related to the specified individual or such
individual’s spouse or former spouse within the third degree, and any other
individual who resides with the specified individual.  Seller will not
be deemed to be a Related Person of any Member.

     

    “Representative” means, with
respect to a particular Person, any director, officer, employee, agent,
consultant, advisor or other representative of such Person, including legal
counsel, accountants and financial advisors.

     

    “Restricted Period” means the
period commencing on the Closing Date and ending on the fifth anniversary of
such date.

     

    “Rules” is defined in Section
0.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    “Secured Debt” means any
Indebtedness that is secured by any Encumbrance other than a Permitted
Encumbrance on any Purchased Asset.

     

    “Securities Act” means the
Securities Act of 1933, as amended.

     

    “Seller” is defined in the
opening paragraph.

     

    “Senior Indebtedness” means
Indebtedness of Buyer pursuant to the Senior Credit Agreement, together with
fees, costs and other amounts, in each case, incurred pursuant to the Senior
Credit Agreement.

     

    “Tangible Personal Property”
is defined in Section 0.

     

    “Tax” means any federal,
state, local, foreign or other income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code § 59A), customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, general service, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, however denominated, and will
include any interest, penalty, or addition thereto, whether disputed or
not.

     

    “Tax Return” means any return,
declaration, report, claim for refund, or information return or statement
relating to Taxes, including any form, schedule or attachment thereto and any
amendment or supplement thereof.

     

    “Territory” means: (a) the
State of North Carolina; (b) the State of Connecticut; (c) the State of Florida;
(d) any other State in which the Seller does or did business on the date of this
Agreement or during the 12-month period prior to such date; and (e) the United
States of America.

     

    “Transactions” means the
transactions contemplated by the Transaction Documents.

     

    “Transaction Documents” means
this Agreement, the Employment Agreements and all other written agreements,
documents and certificates contemplated by any of the foregoing
documents.

     

     

     

     

     

    32

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