Document:

Exhibit 4.5

AMENDMENT NO 2 TO 3% CONVERTIBLE
PROMISSORY NOTE

This Amendment
No. 2 to 3% Convertible Note (the “Amendment”) effective September 2, 2013, by and among Liberator, Inc. (formerly
known as Remark Enterprises, Inc., a Nevada corporation), a Florida corporation (the “Borrower”) and Hope Capital Inc.,
a New York corporation (the “Lender”) amends that certain 3% Promissory Note due September 2, 2012, as amended on September
2, 2012, in the principal amount of $250,000 by and between the Borrower and Lender (the “Note”).

WHEREAS,
on September 2, 2009, the Borrower issued to the Lender the Note (Note No.: 1.02); and on September 2, 2012 the Company and Borrower
amended the Note (the “Amendment No. 1”) (the Note and Amendment No. 1 collectively referred to herein as, the “Note”);

WHEREAS,
the Note is convertible into securities of the Borrower; and

WHEREAS,
the “Maturity Date” as defined under the Note is September 2, 2013; and

WHEREAS,
the Borrower desires to retain its current working capital and to extend the Maturity Date; and

WHEREAS,
the parties desire to amend the “Conversion Price” as defined under the Note;

NOW, THEREFORE,
in consideration of the foregoing, and other good and valuable consideration, the receipt and sufficiency which is hereby acknowledged,
the parties agree as follows:

		1.	Amendment to Maturity Date. The Maturity Date, as defined under the Note, shall be September
2, 2014.

 

		2.	Amendment to Conversion Price. The Conversion Price, as defined under the Note, shall be
$0.055.

 

		3.	Capitalized Terms. All capitalized terms which have not been defined shall have the meaning
contained in the Note.

 

		4.	Ratification of the Note. In all other respects, the Note is ratified and confirmed.

IN WITNESS
WHEREOF, the undersigned have executed and delivered this Amendment to the Note, effective as of the date first written above.

 

 

	BORROWER	LENDER
	
        LIBERATOR, INC.

         
	HOPE CAPITAL INC.
	 	 
	/s/ Louis S. Friedman	/s/ Curt Kramer
	Louis S. Friedman, Chief Executive Officer	Curt Kramer, PresidentExhibit
10.8

AMENDED & RESTATED

RECEIVABLES FINANCING
AGREEMENT

 

ENTERED
INTO BETWEEN

 

ADVANCE
FINANCIAL CORPORATION

 

and

 

ONE
UP INNOVATIONS, INC. 

 

 

Date: September
4, 2013

 

Advance
Financial Corporation

3700 Mansell
Road, Suite 550

Alpharetta,
Georgia 30022

 

 

Gentlemen:

 

This
Amended and Restated Receivables Financing Agreement amends and restates the Receivable Financing Agreement dated May 24th,
2011 entered between the parties hereto. We are pleased to reconfirm the following agreement by which you are to finance receivables
arising from sales made by us.

 

1.To
induce you to accept this agreement and to make loans and advances to us from time to time pursuant to these terms, we hereby assign
and transfer to you all of our interest in, full title to, and the proceeds of: all accounts, instruments, contract rights, chattel
paper, documents, and general intangibles (hereafter called "receivables") now existing and those hereafter created.
Such assignment and transfer is made for the purpose of securing, and as collateral for, any and all loans and advances made to
us under this agreement, together with all other Obligations of ours to you. As additional security for all our Obligations to
you, we hereby grant to you a security interest in and lien upon all of our inventory and other Collateral (as said term is defined
on Exhibit B attached hereto and made a part hereof) all of our books and records relating to receivables, all our title and/or
interest in the goods represented by receivables and in all such goods that may be returned by or replevied or reclaimed from customers.
You hereby have the right to stop goods in transit or to replevy or to reclaim such goods. All returned, replevied and reclaimed
goods (unless released by you) coming into our possession shall be held by us in trust for you. We shall notify you promptly of
all such returned, replevied or reclaimed goods. The receivables, the books and records relating thereto, the goods represented
by receivables and all such goods that may be returned by or replevied or reclaimed from customers along with the Collateral as
said term is defined in Exhibit B attached hereto and made a part hereof are hereinafter collectively referred to as the "collateral".

 

2.We
will provide you with listings of receivables created in form satisfactory to you, together with copies of customer invoices and
conclusive evidence of shipment and such other documents and proof of delivery/rendition as you may at any time require. You may
lend against these receivables, provided, however, that there shall be no obligation on your part to make loans and advances against
any of our receivables. Whether or not you choose to make any loans and advances to us based upon our receivables, we represent
and warrant that each receivable meets and will continue to meet the following requirements:

 

(i)it
is genuine and in all respects what it purports to be;

 

(ii)it
is owned by us and we have the right to subject it to a security interest in favor of you or assign it to you;

 

(iii)it
arises from (A) the performance of services by us and such services have been fully performed and acknowledged and accepted by
the account debtor thereunder; or (B) the sale or lease of goods by us, and such goods have been completed in accordance with the
account debtor's specifications (if any) and delivered to and accepted by the account debtor, such account debtor has not refused
to accept and has not returned or offered to return any of the goods, or has not refused to accept any of the services, which are
the subject of such account, and we have possession of, or have delivered to you at your request, shipping and delivery receipts
evidencing delivery of such goods;

 

(iv)it
is evidenced by an invoice rendered to the account debtor thereunder, is due and payable within thirty (30) days after the date
of the invoice and does not remain unpaid past the due date thereof; provided, however, that notwithstanding your having made prior
loans and advances against the receivables of an account debtor, if more than fifty (50%) percent of the aggregate dollar amount
of invoices owing by a particular account debtor remain unpaid more than 90 days past the invoice date after the respective due
dates thereof, then all accounts owing by that account debtor shall not be deemed acceptable for loans or advances;

 

(v)it
is not subject to any prior assignment, claim, lien, security interest or encumbrance whatsoever, other than the security interest
granted to you hereunder;

 

(vi)it
is a valid, legally enforceable and unconditional obligation of the account debtor thereunder, and is not subject to setoff, counterclaim,
credit, allowance, deduction or adjustment by such account debtor, or to any claim by such account debtor denying liability thereunder
in whole or in part;

 

(vii)it
does not arise out of a contract or order which fails in any material respect to comply with the requirements of applicable law;

 

(viii)the
account debtor thereunder is not a director, officer, employee or agent of ours or a Subsidiary, Parent or Affiliate;

 

(ix)it
is not an account with respect to which the account debtor is the United States of America or any department, agency or instrumentality
thereof, unless we assign our right to payment of such account to you pursuant to, and in full compliance with, the Assignment
of Claims Act of 1940, as amended;

 

(x)it
is not an account with respect to which the account debtor is located in a state which requires us as a precondition to commencing
or maintaining an action in the courts of that state, either to (A) receive a certificate of authority to do business and be in
good standing in such state, or (B) file a notice of business activities report or similar report with such state's taxing authority,
unless (x) we have taken one of the actions described in clauses (A) or (B), (y) the failure to take one of the actions described
in either clause (A) or (B) may be cured retroactively by Borrower at its election, or (z) we have proven, to your satisfaction,
that it is exempt from any such requirements under any such state's laws;

 

(xi)it
is an account which arises out of a sale made in the ordinary course of our business;

 

(xii)the
account debtor is a resident or citizen of, and is located within, the United States of America;

 

(xiii)it
is not an account with respect to which the account debtor's obligation to pay is conditional upon the account debtor's approval
of the goods or services or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-and-hold,
guaranteed sale, sale on approval, sale or return or consignment basis;

 

(xiv)it
is not an (A) account with respect to which any representation or warranty contained in this agreement is untrue or (B) which violates
any of our covenants contained in this agreement;

 

(xv)it
is not an account which, when added to a particular account debtor's other indebtedness to us, exceeds a credit limit determined
by you in your sole discretion for that account debtor; and

 

(xvi)it
is not an account with respect to which the prospect of payment or performance by the account debtor is or will be impaired, as
determined by you in your sole discretion.

 

The
term "Affiliate" as used herein shall mean any Person directly or indirectly controlling, controlled by or under common
control with Borrower.

 

The
term “Business Day” as used herein shall mean any day which is not a Saturday, Sunday, or other day on which banks
in the State of Georgia are authorized or required to close.

 

The
term "Parent" as used herein shall mean any Person now or at any time or times hereafter owning or controlling (alone
or with any other Person) at least a majority of our issued and outstanding stock or any Subsidiary of ours.

 

The
term "Person" as used herein shall mean any individual, sole proprietorship, partnership, joint venture, trust, unincorporated
organization, association, corporation, institution, entity, party or foreign or United States government (whether federal, state,
county, city, municipal or otherwise), including, without limitation, any instrumentality, division, agency, body or department
thereof.

 

The
term "Subsidiary" as used herein shall mean any corporation of which more than fifty percent (50%) of the outstanding
capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether
at the time stock of any other class of such corporation shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned by Borrower or by any partnership or joint venture of which more than
fifty percent (50%) of the outstanding equity interests are at the time, directly or indirectly, owned by Borrower.

 

3.Notwithstanding
any of the foregoing, and without limiting your discretion, there shall be no obligation on your part to make loans and advances
to us and from time to time at our request you may at your discretion lend to us up to 85% of the face value of each
invoice (said percentage is hereinafter referred to as the "advance rate") acceptable to you, but the total of such loans
and advances shall not exceed $1,000,000 (“Maximum Credit Line”) and you may at your discretion lend
to us up to 50% of Eligible Inventory valued at cost (“Inventory Advances”), not to exceed the lesser
of $300,000 or 75% of the Eligible Accounts Receivable Loan at any one time outstanding. The amounts of such loans
shall be determined by you with consideration for the value of the collateral, taking into account all fluctuations of the value
thereof in light of your experience and sound business principles. Such determinations by you shall be subject to the requirements
of good faith on your part, our undertakings hereunder, and especially our assignment and transfer of all our receivables as security
for the loans and our other Obligations to you, which will, of necessity, fluctuate in amount, and to the condition that you be
at all times fully secured. At your option you may prepare and mail all customers' invoices. Billing on invoices by whomever done
shall be conclusive evidence of assignment and transfer hereunder to you of the receivables represented thereby, whether or not
we execute any other instrument with regard to any specific receivable.

 

All
loans and advances shall, in your sole discretion, be evidenced by one or more promissory notes in form and substance satisfactory
to you. However, if such loans and advances are not so evidenced, such loans and advances may be evidenced solely by entries upon
the books and records maintained by you.

 

Any
and all accrued interest, charges or fees which are not paid when due, shall become Obligations, shall be treated as such and shall
be taken into consideration in your determination of the amount of the loans and advances which you may make to us; provided, however,
that all such accrued and unpaid interest, charges and fees shall not be treated as an Obligation until the first day of the month
immediately proceeding the month in which they accrued. You shall calculate the principal balance each day prior to our receiving
credit for any collections received by you on that day. If at any time and for any reason, the aggregate amount of the outstanding
advances made pursuant to Paragraph 2 exceeds the dollar or percentage limitations contained in Paragraph 2 (an “Overadvance”),
then we shall, upon demand by you, immediately pay to you in cash, the amount of such excess. Any and all advances hereunder
shall be added to and deemed part of the Obligations when made.

 

4.We
shall pay you interest monthly, on the first (1st) day of each month, at the rate of  three percent  ( 3.00%)
per annum in excess of the prime rate (as defined herein) on the average daily principal balance of all loans made hereunder. As
used herein, the term "prime rate" shall mean the interest rate announced by SunTrust Bank from time to time as
its prime rate. We understand that the prime rate is not necessarily the lowest interest rate available on loans made by SunTrust
Bank, which loans may be priced at, above or below its prime rate. The prime rate as of the date hereof is three and
twenty five one hundredths ( 3.25 %) percent per annum; accordingly, the interest rate hereunder expressed in simple interest
terms as of the date hereof is  six and twenty five one hundredths ( 6.25 %) percent per annum. If at any
time or from time to time the prime rate increases or decreases, then the interest rate set forth in (b) above shall be correspondingly
increased or decreased effective on the first day of the month immediately following the day on which any such increase or decrease
in the prime rate is publicly announced. In the event that SunTrust Bank abolishes or abandons the practice of announcing
its prime rate, you will designate a comparable reference rate which shall be deemed to be the prime rate hereunder. Interest hereunder
shall be computed on a 360-day year simple interest basis. In addition, we shall pay you monthly, on the first (1st) day
of each month, (a) as compensation for underwriting, administrative services, costs, and other services performed or incurred by
you in connection with this agreement, a service fee equal to fifty hundredths of one percent  ( .50%) per month of the
average daily principal balance of all loans outstanding hereunder during the previous month with respect to advances for receivables
(the “Monthly Receivables Loan Service Fees”) (Monthly Service Fees shall be calculated on the basis of
a 360-day year) and a service fee equal to fifty hundredths of one percent  ( .50%)
per month of the average daily principal balance of all loans outstanding hereunder during the previous month
with respect to advances for inventory (the “Monthly
Inventory Loan Service Fees”)
(Monthly Inventory Loan Service Fees shall be calculated on the basis of
a 360-day year) (b) as compensation for delays in collection and clearance of checks and other remittances, an amount equal to
 two  (2) Business Days on interest and service fees computed at the rate set forth above in effect on the last day
of the previous month on the total amount of all remittances delivered to you in payment of our Obligations during the previous
month. In the event of an Overadvance that remains unpaid to you (irrespective of any demand for the repayment thereof which
may be made by you), we shall pay to you, in addition to the Monthly Service Fee, a surcharge of 25% of the Monthly
Service Fee for each day that an Overadvance exists. You will render a statement of account
monthly, and such statement shall be deemed binding upon us unless you are notified in writing to the contrary within thirty (30)
days after the date of each statement rendered. We shall pay to you a fee of seventy five hundredths of one percent
($7,500.00)(the "Modification Fee") of the Maximum Credit Line at closing and at each Renewal Term (defined below),
which shall be for administrative services, costs, and other services performed or incurred by you in connection with the closing
of this agreement, and shall be due and fully earned at such time as this Agreement is signed by us.

 

5. We shall direct all of our account
debtors, as well as any other obligor, to make all payments on the accounts as directed by, exclusively and directly to a post
office box or any other address designated by you (the "Lock Box"), and under your exclusive control. Any and all payments
received by us shall be held in trust for the benefit of you and shall be immediately remitted, by us in the identical form in
which such payments were made, whether by cash or check to such account as you may direct, however, nothing herein shall be interpreted
or construed as consent or authorization by you to our receipt of payments made by account debtors or obligors on the accounts.
If we, any Affiliate or Subsidiary, or any shareholder, officer, director, employee or agent of ours or any Affiliate or Subsidiary,
or any other Person acting for or in concert with us shall receive any monies, checks, notes, drafts or other payments relating
to or as proceeds of accounts, we and each such Person shall receive all such items in trust for, and as your sole and exclusive
property and, immediately upon receipt thereof, shall remit the same (or cause the same to be remitted) in kind to you. These remittances
shall be listed and certified on a form satisfactory to you. In the event any payments or remittances, received by us are not delivered
to you in kind, per the terms and conditions set forth in this Agreement, we shall pay to you a fee of fifteen percent of the face
amount of any such payment or remittance. You will apply (conditioned upon final collection) each payment deposited, which payment
has been made by any account debtor on a receivable represented by any invoice on which you have based any loan made to us hereunder,
to such loan and any other Obligations which are due and payable, on the first day after receipt by you. You may, at any time and
from time to time, whether before or after the maturity of any of the Obligations, (i) enforce collection of any of our accounts
or contract rights by suit or otherwise; (ii) exercise all of our rights and remedies with respect to proceedings brought to collect
any accounts; (iii) surrender, release or exchange all or any part of any accounts, or compromise or extend or renew for any period
(whether or not longer than the original period) any indebtedness thereunder; (iv) sell or assign any account of ours upon such
terms, for such amount and at such time or times as you deem advisable; (v) prepare, file and sign our name on any proof of claim
in bankruptcy or other similar document against any account debtor; and (vi) do all other acts and things which are necessary,
in your sole discretion, to fulfill our Obligations under this agreement and to allow you to collect the accounts. In addition
to any other provision hereof, you may at any time, whether before or after the occurrence of a default, at our expense, notify
any parties obligated on any of the accounts to make payment directly to you of any amounts due or to become due thereunder.

 

6.We
hereby appoint and constitute you as our attorney-in- fact: to receive, open, and dispose of all mail addressed to us and to notify
the postal authorities to change the address and delivery of mail addressed to us to such address as you may designate (provided
that you shall return to us all mail not pertaining to receivables); to endorse our name upon any notes, acceptances, checks, drafts,
money orders and other evidences of payment of receivables that may come into your possession and to deposit or otherwise collect
the same; to sign our name on any bill of lading relating to any receivable, on drafts against customers; to verify accounts with
communications to customers; to execute in our name any affidavits and notices with regard to any and all lien rights; and to do
all other acts and things necessary to carry out this agreement. All acts of said attorney-in-fact are hereby ratified and approved,
and said attorney-in-fact shall not be liable for any errors of commission or omission, nor for any error of judgment or mistake
of fact or law. This power, being coupled with an interest, is irrevocable while we are indebted to you.

 

7.We
make the following warranties, representations and covenants with and to you, understanding that you have relied upon each of them
and will continue to rely upon each of them in making loans and advances to us:

 

(a)the
financial statements delivered or to be delivered by us to you at or prior to the date of this agreement and at all times subsequent
thereto accurately reflect our financial condition, and there has been no adverse change in the financial condition, the operations
or any other of our status since the date of the financial statements delivered to you most recently prior to the date of this
agreement;

 

(b)the
office where we keep our books, records and accounts (or copies thereof) concerning the collateral, our principal place of business
and all of our other places of business, locations of collateral and post office boxes are as set forth in Exhibit A of this agreement;
we shall promptly (but in no event less than ten (10) days prior thereto) advise you in writing of the proposed opening of any
new place of business, the closing of any existing place of business, any change in the location of our books, records and accounts
(or copies thereof) or the opening or closing of any post office box by us;

 

(c)the
collateral is and shall be kept, or based, only at the addresses set forth on Exhibit A of this agreement, and at other locations
within the continental United States of which you have been advised by us in writing;

 

(d)
if any of the collateral consists of goods of a type normally used in more than one state, whether or not actually so used, we
shall immediately give written notice to you of any use of any such goods in any state other than a state in which we have previously
advised you such goods shall be used, and such goods shall not, unless you shall otherwise consent in writing, be used outside
of the continental United States;

 

(e)no
security agreement, financing statement or analogous instrument exists or shall exist with respect to any of the collateral other
than any security agreement, financing statement or analogous instrument evidencing security interests in your favor;

 

(f)we
are and shall at all times during the Original Term or any Renewal Term be the lawful owner of all collateral now purportedly owned
or hereafter purportedly acquired by us, free from all liens, claims, security interests and encumbrances whatsoever, whether voluntarily
or involuntarily created and whether or not perfected;

 

(g)we
have the right and power and are duly authorized and empowered to enter into, execute and deliver this agreement and perform our
obligations hereunder and thereunder; our execution, delivery and performance of this agreement does not and shall not conflict
with the provisions of any statute, regulation, ordinance or rule of law, or any agreement, contract or other document which may
now or hereafter be binding on us, and our execution, delivery and performance of this agreement shall not result in the imposition
of any lien or other encumbrance upon any of our property under any existing indenture, mortgage, deed of trust, loan or credit
agreement or other agreement or instrument by which we or any of our property may be bound or affected;

 

(h)there
are no actions or proceedings which are pending or threatened against us which might result in any material adverse change in our
financial condition or materially adversely affect the collateral and we shall, promptly upon becoming aware of any such pending
or threatened action or proceeding, give written notice thereof to you;

 

(i)we
have obtained all licenses, authorizations, approvals and permits, the lack of which would have a material adverse effect on the
operation of our business, and we are and shall remain in compliance in all material respects with all applicable federal, state,
local and foreign statutes, orders, regulations, rules and ordinances (including, without limitation, statutes, orders, regulations,
rules and ordinances relating to taxes, employer and employee contributions and similar items, securities, employee retirement
and welfare benefits, employee health and safety or environmental matters), the failure to comply with which would have a material
adverse effect on our business, property, assets, operations or condition, financial or otherwise;

 

(j)all
written information now, heretofore or hereafter furnished by us to you is and shall be true and correct as of the date with respect
to which such information was or is furnished;

 

(k)we
are not conducting, permitting or suffering to be conducted, nor shall we conduct, permit or suffer to be conducted, any activities
pursuant to or in connection with which any of the collateral is now, or will (while any Obligations remain outstanding) be owned
by any Affiliate; provided, however, that we may enter into transactions with Affiliates in the ordinary course of business pursuant
to terms that are no less favorable to us than the terms upon which such transfers or transactions would have been made had they
been made to or with a Person that is not an Affiliate and, in connection therewith, may transfer cash or property to Affiliates
for fair value;

 

(l)our
name has always been as set forth on Exhibit A of this agreement and we use no tradenames or division names in the operation of
our business, except as otherwise disclosed in writing to you; we shall notify you in writing within ten (10) days of the change
of our name or the use of any tradenames or division names not previously disclosed to you in writing;

 

(m)this
agreement to which we are a party are our the legal, valid and binding obligations and are enforceable against us in accordance
with their respective terms;

 

(n)we
are solvent, are able to pay our debts as they become due and have capital sufficient to carry on our business, now own property
having a value both at fair valuation and at present fair saleable value greater than the amount required to pay our debts, and
will not be rendered insolvent by the execution and delivery of this agreement or by completion of the transactions contemplated
hereunder;

 

(o)other
than the loans disclosed to you on the Loan Schedule, we are not now obligated, nor shall we create, incur, assume or become obligated
(directly or indirectly), for any loans or other indebtedness for borrowed money other than the loans made hereunder and pursuant
hereto, except that we may (i) borrow money from a Person other than you on an unsecured and subordinated basis if a subordination
agreement in favor of you and in form and substance satisfactory to you is executed and delivered to you relative thereto; (ii)
maintain any present indebtedness to any Person which has been disclosed to you in writing and consented to in writing by you;
and (iii) incur unsecured indebtedness to trade creditors in the ordinary course of our business;

 

(p)except
as otherwise disclosed in writing to you, we have no Parents, Subsidiaries or divisions, nor are we engaged in any joint venture
or partnership with any other Person;

 

(q)we
are duly organized and in good standing in our state of our organization and we are duly qualified and in good standing in all
states where the nature and extent of the business transacted by us or the ownership of our assets makes such qualification necessary;

 

(r)we
are not in default under any material contract, lease or commitment to which it is a party or by which it is bound, nor do we know
of any dispute regarding any contract, lease or commitment which is material to our continued financial success and well-being;

 

(s)there
are no controversies pending or threatened between us and any of our employees, other than employee grievances arising in the ordinary
course of business which are not, in the aggregate, material to our continued financial success and well-being and we are in compliance
in all material respects with all federal and state laws respecting employment and employment terms, conditions and practices;
and

 

(t)we
possess, and shall continue to possess, adequate licenses, patents, patent applications, copyrights, service marks, trademarks,
trademark applications, tradestyles and tradenames to continue to conduct our business as heretofore conducted by us.

 

(u)we
will notify you promptly of and shall settle all customer disputes, but, if you so elect, you are to have the right at all times
to settle, compromise, adjust or litigate all customer disputes directly with the customer or other complainant upon such terms
and conditions as you deem advisable, without incurring liability to us for your performance of any such acts.

 

(v)our
Federal Employment Identification Number is 20-2635129.

 

8.We
represent, warrant and covenant to you that all of our representations, warranties and covenants contained in this Agreement (whenever
appearing herein) shall be true at the time of our execution of this agreement, shall survive the execution, delivery and acceptance
hereof by the parties hereto and the closing of the transactions described herein or related hereto, shall remain true until the
repayment in full of all of the Obligations and termination of this agreement, and shall be remade by us at the time each loan
or advance is made pursuant to this agreement.

 

9.Until
payment or satisfaction in full of all Obligations and termination of this agreement, unless we obtain your prior written consent
waiving or modifying any of our covenants hereunder in any specific instance, we agree as follows:

 

(a)we
shall at all times keep accurate and complete books, records and accounts with respect to all of our business activities, in accordance
with sound accounting practices and generally accepted accounting principles consistently applied from period to period, and shall
keep such books, records and accounts, and any copies thereof, only at the addresses indicated for such purpose on Exhibit A of
this agreement;

 

(b)we
shall promptly advise you in writing of any material adverse change in our business, assets or condition, financial or otherwise,
the occurrence of any default hereunder or the occurrence of any event which, if uncured, will become an default hereunder after
notice or lapse of time (or both);

 

(c)we
shall:

 

(i)keep
the collateral properly housed and shall keep the collateral insured for the full insurable value thereof against loss or damage
by fire, theft, explosion, sprinklers, and such other risks as are customarily insured against by Persons engaged in businesses
similar to ours with such companies, in such amounts and under policies in such form as shall be satisfactory to you. Original
(or certified) copies of such policies of insurance have been or shall be delivered to you within fifteen (15) days after the date
hereof, together with evidence of payment of all premiums therefor, and shall contain an endorsement, in form and substance acceptable
to you, showing loss under such insurance policies payable to you. Such endorsement, or an independent instrument furnished to
you, shall provide that the insurance company shall give you at least thirty (30) days written notice before any such policy of
insurance is altered or canceled and that no act of ours, whether willful or negligent, or default or any other Person shall affect
you right to recover under such policy of insurance in case of loss or damage. We hereby direct all insurers under such policies
of insurance to pay all proceeds payable thereunder directly to you. We irrevocably, make, constitute and appoint you (and all
officers, employees or agents designated by you) as our true and lawful attorney (and agent-in-fact) for the purpose of making,
settling and adjusting claims under such policies of insurance, endorsing our name on any check, draft, instrument or other item
of payment for the proceeds of such policies of insurance and making all determinations and decisions with respect to such policies
of insurance; and

 

(ii)
maintain, at our expense, such public liability and third party property damage insurance as is customary for Persons engaged
in businesses similar to ours with such companies and in such amounts, with such deductibles and under policies in such form as
shall be satisfactory to you and original (or certified) copies of such policies have been or shall be delivered to you within
fifteen (15) days after the date hereof, together with evidence of payment of all premiums therefor; each such policy shall contain
an endorsement showing you as additional insured thereunder and providing that the insurance company shall give you at least thirty
(30) days written notice before any such policy shall be altered or canceled. If we at any time or times hereafter shall fail to
obtain or maintain any of the policies of insurance required above or to pay any premium in whole or in part relating thereto,
then you, without waiving or releasing any obligation or default by us hereunder, may (but shall be under no obligation to) obtain
and maintain such policies of insurance and pay such premiums and take such other actions with respect thereto as you deem advisable.
All sums disbursed by you in connection with any such actions, including, without limitation, court costs, expenses, other charges
relating thereto and reasonable attorneys' fees, shall constitute loans hereunder and shall be payable on demand by us to you and,
until paid, shall bear interest at the highest rate then applicable to loans hereunder;

 

(d)all
monies and other property obtained by us from you pursuant to this agreement will be used solely for business purposes;

 

(e)we
shall, at your request, indicate on our records concerning the Collateral a notation, in form satisfactory to you, of your security
interest hereunder, and we shall not maintain duplicates or copies of such records at any address other than our principal place
of business set forth on Exhibit “A” of this agreement;

 

(f)we
shall file all required tax returns and pay all of our taxes when due, including, without limitation, taxes imposed by federal,
state or municipal agencies, and shall cause any liens for taxes to be promptly released; provided, that we shall have the right
to contest the payment of such taxes in good faith by appropriate proceedings so long as (i) the amount so contested is shown on
our financial statements, (ii) the contesting of any such payment does not give rise to a lien for taxes, (iii) we keep on deposit
with you (such deposit to be held without interest) an amount of money which, in your sole judgment, is sufficient to pay such
taxes and any interest or penalties that may accrue thereon, and (iv) if we fail to prosecute such contest with reasonable diligence,
you may apply the money so deposited in payment of such taxes. If we fail to pay any such taxes and in the absence of any such
contest by us, you may (but shall be under no obligation to) advance and pay any sums required to pay any such taxes and/or to
secure the release of any lien therefore, and any sums so advanced by you shall constitute loans hereunder, shall be payable by
us to you on demand, and, until paid, shall bear interest at the highest rate then applicable to loans hereunder;

 

(g)we
shall not assume, guarantee or endorse, or otherwise become liable in connection with, the obligations of any Person, except by
endorsement of instruments for deposit or collection or similar transactions in the ordinary course of business;

 

(h)we
shall not enter into any merger or consolidation, or sell, lease or otherwise dispose of all or substantially all of our assets,
or enter into any transaction outside the ordinary course of our business, including, without limitation, any purchase, redemption
or retirement of any shares of any class of our stock, and any issuance of any shares of, or warrants or other rights to receive
or purchase any shares of, any class of our stock;

 

(i)we
shall not amend our organizational documents or change our fiscal year;

 

(j)we
shall reimburse you for all costs and expenses, including, without limitation, legal expenses and reasonable attorneys' fees, incurred
by you in connection with documentation and consummation of this transaction and any other transactions between us and you, including,
without limitation, Uniform Commercial Code and other public record searches, lien filings, Federal Express or similar express
or messenger delivery, appraisal costs, surveys, title insurance and environmental audit or review costs, and in seeking to collect,
protect or enforce any rights in or to the collateral or incurred by you in seeking to collect any obligations and to administer
and enforce any of your rights under this agreement. All such costs, expenses and charges shall constitute loans hereunder, shall
be payable by us to you on demand, and, until paid, shall bear interest at the highest rate then applicable to loans hereunder.

 

10.You
or your representatives at all reasonable times shall have the right to examine all of our books and records pertaining to receivables
and goods affected by this agreement or any other future agreement between us. We have agreed to pay any field audit fees
deemed necessary by AFC; but said fees shall not exceed $4,000 per year, plus expenses. We
will submit to you an aging of receivables and accounts payable as of the end of each month, in form and manner satisfactory to
you, by the 10th of the following month, and we agree to have prepared and to furnish to you quarterly within 30 days after the
close of each quarter's financial statements, which shall include a balance sheet, a statement of profit and loss and a statement
of cash flow and shall be prepared in a uniform manner consistent with prior years, in such form, substance and detail as you may
reasonably require. We also agree to have prepared and to furnish to you within sixty days after the close of our
fiscal year, similar annual financial statements in such form, substance and detail as you may reasonably require. You may, at
any time during which this agreement or any provision contained herein is in force, contact any account debtor of ours in order
to ascertain any details regarding that account debtor or any account which may be owed to us by that account debtor. You are authorized
to contact and discuss our affairs, finances and business with any officer, employee or director of ours or with any Affiliate
or the officers, employees or directors of any Affiliate, and to discuss our financial condition with our independent public accountants.

 

11.You
shall be entitled to hold or set off all sums and all other property of ours, at any time to our credit or in your possession by
pledge or otherwise or upon or in which you may have a lien or security interest, as security for any and all obligations of ours
owing to you. “Obligations” as said term is used in this Agreement shall mean all obligations hereunder, and under
all notes, contracts of suretyship, guaranty or accommodation made by us in your favor, and all our other obligations to you, however
created, arising or evidenced, whether direct or indirect, whether through assignment from third persons, whether absolute or contingent,
or otherwise, now or hereafter existing, or due or to become due. You shall have the right and are hereby irrevocably authorized
and directed to apply all payments received from the collateral account to the amounts of any and all Obligations. Recourse to
security shall not at any time be required. We shall at all times remain liable for the repayment to you on demand of all Obligations.
In any case we shall remain liable to you for any deficiencies arising upon the liquidation of any security held by you. If any
receivable is not paid when due or if any customer raises any claim of non-conformity of goods, total or partial failure of delivery,
set-off, counterclaim, or breach of warranty, or any other claim inconsistent with our warranties of receivables, or there is otherwise
non-compliance with our warranties and representations regarding our receivables as made above, we will, upon demand, pay you for
application to the Obligations the gross amount of the receivable so affected or unpaid, together with any damages or loss sustained
by you, but such payment shall not be deemed a reassignment thereof, and title thereto and to the goods represented thereby shall
remain in you until and unless you execute a reassignment. Before or after default hereunder you shall be entitled to notify any
or all account debtors or other obligors on the receivables to pay you directly, and we agree that while assigned to you, you may
take such action with regard to the custody and collection of receivables as you may deem necessary. We agree that failure to take
any action with regard to any given receivable shall not be unreasonable until and unless you receive a request for specific action
from us with regard thereto. You may also apply all payments received from the collateral account to, or at your option we will
pay you on demand, all costs and expenses, including fifteen percent (15%) of the total amount involved as attorneys' fees, incurred
upon the liquidation of any collateral, to obtain or enforce payment of any Obligations, in the settlement, adjustment, compromise
or litigation of customer disputes or in the prosecution or defense of any action or proceeding either against you or against us
concerning any matter growing out of or connected with this Agreement and/or any receivables and/or any Obligations. In the event
of any breach by us of any provision herein, we will repay upon demand all of our Obligations to you. If at any time you pay any
state, city, local, federal or other tax or levy arising from sales hereunder, we will repay to you the amount of tax so paid by
you. 

 

12.This
Agreement shall be in effect from the date hereof until September 4, 2015 (the "Original Term") and shall automatically
renew itself from year to year thereafter (each such one-year renewal being referred to herein as a "Renewal Term") unless
(a) you make demand for repayment prior to the end of the Original Term or the then current Renewal Term; (b) the due date of the
Obligations is accelerated; or (c) we elect to terminate this Agreement at the end of the Original Term or at the end of any Renewal
Term by giving you written notice of such election at least ninety (60) days prior to the end of the Original Term or the then
current Renewal Term and by paying all of the Obligations in full on the last day of such term. If this Agreement is terminated
by us prior to the end of the First year of the Original Term, we shall pay to you a fee (as liquidated damages and compensation
for the costs of being prepared to make funds available hereunder and not as a penalty) of one percent (1.00%) of
the Maximum Credit Facility during the Original Term. We agree that this fee is a reasonable calculation of your lost profit in
view of the difficulties and impracticality of determining actual damages resulting from an early termination of this Agreement.
If one or more of the events specified in clauses (a), (b) and (c) occurs, this Agreement shall terminate on the date thereafter
that the Obligations are paid in full, provided, however, that the security interests and liens created under this Agreement shall
survive such termination until the payment of the Obligations have become indefeasible. At such time as we have repaid all of the
Obligations and this Agreement has terminated, we shall deliver to you a release, in form and substance satisfactory to you, of
all Obligations and liabilities of you and your officers, directors, employees, agents, parents, subsidiaries and affiliates to
us, and if we obtain new financing from another lender, we shall deliver such lender's indemnification of you, in form and substance
satisfactory to you, for checks which you have credited to our account, but which subsequently are dishonored for any reason. Notice
of termination shall be given either personally or by registered or certified mail to the addresses shown herein, or to any other
address designated in writing by either of us to the other. Notwithstanding the foregoing, should either party breach this Agreement
or become insolvent or unable to pay our debts as they mature, or should we make an assignment for the benefit of creditors, or
should a petition under any chapter of the Federal Bankruptcy Code, as amended, be filed by or against us, or should any guarantor
of the Obligations hereunder terminate or revoke or attempt to terminate or revoke such guaranty, or should you deem yourselves
insecure, or should we fail to pay promptly any amount due hereunder, or should we be in default under any of the terms or conditions
of this Agreement, of any other agreement or agreements now or hereafter effective between us, then, and in any of the aforesaid
events, the party aggrieved shall have the right to terminate this Agreement at any time without notice. Upon termination, all
of our Obligations to you shall become immediately due and payable. Notwithstanding such termination, all the terms, conditions
and provisions hereof shall continue to be fully operative until all transactions entered into, rights created or obligations incurred
hereunder prior to termination and all our Obligations have been fully disposed of, concluded, paid, satisfied and liquidated.
No delay or failure on your part in exercising any right, privilege or option hereunder shall operate as a waiver of such or of
any other right, privilege or option, and no waiver shall be valid unless in writing signed by you and then only to the extent
therein stated. 

 

13.This
Agreement is submitted by us to you for your acceptance or rejection at your principal place of business as an offer by us to borrow
monies from you now and from time to time hereafter and shall not be binding upon you or become effective until accepted by you,
in writing, at said place of business. If accepted by you, this Agreement shall be deemed to have been made in the State of Georgia.
 We hereby waive demand, presentment, protest and notice of nonpayment, and further
waive the benefit of all valuation, appraisal and exemption laws. If any provision of this Agreement shall be held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or remaining provisions of this Agreement. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 
If this Agreement is accepted by you, it shall be effective on the date set forth above, and shall continue in full force and effect
until one year from such effective date, and from year to year thereafter, unless terminated, on any such anniversary date, or
otherwise by reason of default, by either of us giving to the other not less than sixty (60) days prior written notice. You may
terminate this Agreement at any time without notice to us should we breach any of our Obligations hereunder or under any other
agreement or document evidencing financial arrangements between us, or should you deem yourself insecure. If any Obligation of
ours to you is collected by or through an attorney, we agree to pay all costs and expenses of collection, including fifteen (15%)
percent of the total amount involved as attorneys' fees. No termination of this Agreement shall terminate or adversely affect your
rights hereunder or under any other agreement or document evidencing financial arrangements between us.

 

14.This
Agreement is an amendment and a restatement of the Receivables Financing Agreement entered between us and you dated May 24th,
2011. It is not intended by either of us to be a novation, accord and satisfaction, discharge or release of any Obligation.

 

15.
Disputes regarding the nonpayment of any amount due under this Agreement to you or any of your affiliates which arise from, result
from or relate to a counterclaim, offset, recoupment, claim or defense of us which is founded upon, arises out of or is related
to, any theory of lender liability or other similar theory, and all disputes and claims relating to any provision hereof or relating
to or arising out of the parties relationship or creation or termination hereof (including, without limitation, any claim that
any provision of this Agreement is illegal, unenforceable or voidable under any law, ordinance or ruling) shall be settled by arbitration
at the Office of the American Arbitration Association in Atlanta, Georgia, in accordance with the United States Arbitration Act
(9 U.S.C. Section 1 et seq.) and the Rules of the American Arbitration Association. Suits to compel arbitration
or to determine arbitrability shall be brought in the United States District Court for the Northern District of Georgia. All awards
of the arbitration shall be binding and non-appealable except as otherwise provided in the United States Arbitration Act. Judgment
upon the award of the arbitrator may be entered in any court having jurisdiction thereof. PROVIDED, HOWEVER, that nothing
contained in this Paragraph shall be interpreted or construed so as to make claims by you to enforce your rights in the Collateral
or for the payment of sums due to you or to others by you (whether prior or subsequent to an event of default), subject to arbitration,
even though counterclaims, offsets, recoupments, and other defenses and claims by us are subject to arbitration.

16.
THE VALIDITY OF THIS AGREEMENT, AND ALL OTHER AGREEMENTS BETWEEN THE PARTIES, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF GEORGIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE COURTS LOCATED IN THE COUNTY OF COBB, STATE OF
GEORGIA, THE FEDERAL COURTS WHOSE VENUE INCLUDES THE COUNTY OF COBB, STATE OF GEORGIA, OR, AT YOUR SOLE OPTION, IN ANY OTHER COURT
IN WHICH YOU SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY.
EACH OF THE PARTIES HERETO WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, THE RIGHT TO A TRIAL BY JURY AND ANY RIGHT
EACH MAY HAVE TO ASSERT THE DOCTRINE OF "FORUM NON CONVENIENS" OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS AGREEMENT. We represent and warrant that no representative or agent of yours has represented, expressly
or otherwise, that you will not, in the event of litigation, seek to enforce this right to jury waiver. Undersigned acknowledges
that you have been induced and enter into this Agreement by, among other things, the provisions of this paragraph.

 

17.WE
HEREBY WAIVE ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY YOU OF YOUR RIGHTS TO REPOSSESS THE COLLATERAL
WITHOUT JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON SUCH COLLATERAL WITHOUT PRIOR NOTICE OR HEARING.

 

18.Your
failure, at any time or times hereafter, to require strict performance by us of any provision of this Agreement shall not waive,
affect or diminish any of your rights thereafter to demand strict compliance and performance therewith. Any suspension or waiver
by you a default under this Agreement shall not suspend, waive or affect any other default under this Agreement, whether the same
is prior or subsequent thereto and whether of the same or of a different kind or character. No delay on your part in the exercise
of any right or remedy under this Agreement shall preclude other or further exercise thereof or the exercise of any right or remedy.
None of our undertakings, agreements, warranties, covenants and representations contained in this Agreement and no default under
this Agreement shall be deemed to have been suspended or waived by you unless such suspension or waiver is in writing, signed by
your duly authorized officer and directed to us specifying such suspension or waiver.

 

 

 

	 	 	 	ONE UP INNOVATIONS, INC. 
	 	 	 	 	 
	 BY: 	 /s/
Ronald P. Scott	 	 BY: 	 /s/ Louis S. Friedman
	 	 Ronald P. Scott	 	 	Louis S. Friedman
	 Its:	 Secretary	 	 Its:	President

 

 

 

 

 

A C
C E P T A N C E

 

The
foregoing Receivables Financing Agreement is accepted in Atlanta, Georgia, this  25th  day of May , 2011.

 

 

 

	 	 	 	ADVANCE FINANCIAL CORPORATION 
	 	 	 	 
	 	 	 	 BY: 	 /s/ A. James Perry
	 	 	 	 	A. James Perry
	 	 	 	 Its:	President

 

BY: /s/ 

A. James Perry

 Its:President

     

     

    

 

EXHIBIT A

 

 

Schedule
of Collateral Location

 

 

	Street	City	State	Zip
	 	 	 	 
	2745 Bankers Industrial Drive	Atlanta	Georgia	30360

 

 

 

     

     

    

Exhibit B

 

 

SECURITY AGREEMENT

 

(ACCOUNTS
RECEIVABLE, INVENTORY AND EQUIPMENT)

 

STATE OF: GEORGIA

 

COUNTY OF:DEKALB

 

DATE:May 24, 2011

 

FOR
VALUE RECEIVED One Up Innovations, Inc., a Georgia corporation (hereinafter called the "Borrower") hereby
conveys to Advance Financial Corp., a Georgia corporation (hereinafter called the "Secured Party") and hereby grants
to the Secured Party security title to and a security interest in and lien upon the goods held by the Borrower for sale or lease
or furnished or to be furnished by the Borrower under any contract of service or held by the Borrower as raw materials or work
in process and made a part hereof to be used or consumed in Borrower's business (such goods being referred to herein as ("Inventory")
all equipment, tools, furniture and fixtures (“Equipment”) and all rights of the Borrower now owned or hereafter acquired
in payment for Inventory sold or leased or for services rendered ("Accounts")' and to all rights of the Borrower pursuant
to a writing or writings which evidences both a monetary obligation and a security interest in or lease of Inventory ("Chattel
Paper") and all rights of the Borrower to payment under a contract for the sale or lease of Inventory or the rendering of
services which right is at the time not yet earned by performance ("Contract Rights") (said Inventory, Accounts, Chattel
Paper and Contract Rights being referred to herein collectively as "Collateral", and said Equipment, Accounts, Contract
Rights and Chattel Paper being referred to herein collectively as "Non-Inventory Collateral") and all proceeds thereof
whether cash, negotiable instruments or otherwise to secure the payment of the principal of, interest on and satisfaction of all
Obligations of Borrower under that certain Accounts Receivable Financing Agreement (hereafter referred to as the "Agreement")
dated on or about the date hereof, between the Borrower and the Secured Party, satisfaction of all obligations of the Borrower
hereunder, and satisfaction of all other obligations of the Borrower to the Secured Party, its successors and assigns, however
created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, due or to become
due. The obligations under the Agreement and all other obligations secured hereby are herein collectively called the "Obligations."

 

Until
Default (as defined herein) the Borrower: (a) may in the ordinary course of its business, at its own expense, sell, lease or furnish
under contract of service any of the Inventory normally held by the Borrower for such purpose and use and consume in the ordinary
course of its business any raw material, work in process, or materials normally held by Borrower for such purpose, (b) will at
its own expense endeavor to collect as, and when due, all amounts due with respect to any of the Accounts, Chattel Paper, Contract
Rights or proceeds therefore, or any of the proceeds of the Inventory, including the taking of such action with respect to such
collection as the Secured Party may reasonably request, or in the absence of such request, as the Borrower may deem advisable,
and (c) may grant in the ordinary course of business to any party obligated on any of the Non-Inventory Collateral any rebate,
refund or adjustment to which such party may be lawfully entitled, and may accept in connection therewith, the return of such goods,
the sale or lease of which shall have given rise to such Non-Inventory Collateral.

 

The
Borrower hereby warrants and agrees that: (a) to the extent, if any, it shall have advised the Secured Party that any of the Collateral
is being acquired with the proceeds of any loan from Secured Party to the Borrower, such proceeds may be disbursed by the Secured
Party directly to the seller of such Collateral; (b) the principal place of business of the Borrower is located at 2745 Bankers
Industrial Drive, Atlanta, Georgia 30360 and the Borrower will notify Secured Party in advance of any change in such principal
place of business; (c) the Collateral and all records relating to the Collateral as appropriate will be kept at the Borrower's
principal place of business set forth above, unless the Secured Party shall otherwise consent in writing; (d) the Borrower will
continuously operate its business as now conducted and according to the customary and usual business practices (including business
hours) as similar types of business; (e) the Secured Party or any person designated by it shall have the right to call at the Borrower's
various places of business at any time and without notice to inspect, audit, check and make extracts from the Borrower's books,
records, journals, orders, receipts and other correspondence and other data relating to the Borrower's business and any other transaction
between the Borrower and Secured Party without hindrance or delay, and Secured Party shall have the right to make direct verification
from any persons obligated on any of the Non-Inventory Collateral with respect to any or all of the Non-Inventory Collateral assigned
to the Secured Party hereunder; (f) the Borrower has full power and authority to enter into this agreement, and the execution of
this agreement shall not constitute a default under or be in violation of any contract, agreement, debenture, note or similar document
or any public law, rule, regulation or ordinance by which the Borrower is bound; (g) the Borrower will, upon request of Secured
Party, indicate by notation, signs or otherwise upon any of the Collateral or records relating thereto, a notation in form and
content satisfactory to the Secured Party of the security interest of the Secured Party hereunder; (h) the Borrower will furnish
to the Secured Party such information concerning the Borrower, the Collateral and any persons obligated on Non-Inventory Collateral
as the Secured Party may from time to time reasonably request; (i) the Borrower has, or forthwith will acquire, full title to the
Collateral, and will at all times keep the Collateral free of all liens and claims whatsoever, other than the security interest
hereunder; (j) no financing statement covering any of the Collateral is on file in any public office other than financing statement
in favor of Secured Party and it will from time to time, on request of the Secured Party, execute such financing statements and
other documents (and pay the cost of filing or recording the same in all offices deemed necessary or desirable by the Secured Party)
and do such other acts and things, all as the Secured Party may request to establish and maintain a valid security title and interest
in the Collateral (free of all other liens and claims whatsoever) to secure the payment of the Obligations, including, without
limitation, deposit with the Secured Party any negotiable instruments covered by this agreement as proceeds or otherwise, any documents
constituting chattel paper or any contracts, the proceeds of which are included in Collateral; (k) except for the sale or lease
of any of the Inventory in the ordinary course of its business, the Borrower will not sell, transfer, lease, abandon or otherwise
dispose of any of the Collateral or any interest therein except with the prior written consent of the Secured Party; (l) the Borrower
will at all times keep the Collateral in first class order and repair, excepting any loss, damage or destruction which is fully
covered by proceeds of insurance; (m) the Borrower will at all times keep the Collateral insured against loss, damage, theft and
other risks, in such amounts and companies and under such policies and in such form, all as shall be satisfactory to the Secured
Party, which policies shall, among other things, provide for 30 days' notice of cancellation or non-renewal to Secured Party and
that loss thereunder shall be payable to the Secured Party as its interest may appear (and the Secured Party may apply any proceeds
of such insurance which may be received by it toward payment of the Obligations, whether or not due, in such order of application
as the Secured Party may determine) and such policies or certificates thereof shall, if the Secured Party so requests, be deposited
with the Secured Party; and (n) none of the Inventory will be delivered to a warehouseman or other bailee.

 

The
Secured Party may from time to time, at its option, perform any agreement of the Borrower hereunder which the Borrower shall fail
to perform and take any other action which the Secured Party deems necessary for the maintenance or preservation of any of the
Collateral or its interest therein, and the Borrower agrees to forthwith reimburse the Secured Party for all expenses of the Secured
Party in connection with the foregoing, together with interest thereon at the rate of 12% per annum.

 

The
occurrence of any of the following events shall constitute a Default (as such term is used herein): (a) non-payment, when due,
of any amount payable on any of the Obligations or failure to perform any agreement of the Undersigned contained herein; (b) if
any statement, representation or warranty of the Borrower herein or in any other writing at any time furnished by the Borrower
to the Secured Party is untrue in any material respect as of the date made; (c) if the Borrower becomes insolvent or unable to
pay debts as they mature or makes an assignment for the benefit of creditors or an order for relief is entered against the Borrower
following the filing of any petition by or against it pursuant to the Bankruptcy Code, as amended or voluntarily takes the benefit
of any debtor's relief proceeding (including the appointment of a receiver or trustee) under Federal or state law; (d) if an involuntary
petition pursuant to the Bankruptcy Code is filed against the Borrower and is not dismissed for thirty (30) days or if a receiver
is appointed for any of the property of the Borrower and is not dismissed for a period of thirty (30) days after such appointment
or if a judgment is entered against the Borrower pursuant to which a sale of any part of the assets of the Borrower is scheduled
for enforcement of said judgment or if a sale of any of the assets of the Borrower is scheduled pursuant to any other form of legal
proceeding (including without limitation enforcement pursuant to the Georgia Uniform Commercial Code or exercise of a power of
attorney contained in any deed to secure debt, trust deed or mortgage) instituted against the Borrower. Provided, that no such
judgment, sale or enforcement shall be deemed a default pursuant to this sub-section (d) in the event the Borrower furnishes a
surety company bond from a company acceptable to Secured Party in lieu of discharge, judgment, lien or foreclosure at the earlier
of (i) five (5) days prior to the date upon which such enforcement or sale is scheduled, or (ii) ten (10) days after such judgment,
enforcement, lien, sale or foreclosure is first entered, scheduled or instituted; (e) the dissolution, merger or consolidation,
or transfer of a substantial part of the property of the Borrower; (f) the sale, transfer or exchange, either directly or indirectly,
of a controlling stock interest of the Borrower; or (g) if Secured Party reasonably deems itself insecure for any other reason
whatsoever.

 

Whenever
a Default shall exist, all Obligations may (notwithstanding any provisions thereof), at the option of Secured Party, and without
demand or notice of any kind, be declared, and thereupon immediately shall become in default and due and payable; and the Secured
Party may exercise from time to time any rights and remedies available to it under applicable law. The Borrower agrees, in case
of Default, to assemble, at its expense, all the Collateral at a convenient place acceptable to the Secured Party and to pay all
costs of the Secured Party of collection of all of the Obligations, and enforcement of rights hereunder (including 15% of amounts
due as attorneys' fees) and legal expenses and expenses of any repairs to any realty or other property to which any of the Collateral
may be affixed or be a part.

 

In
the event of Default, the Borrower will (except as the Secured Party may otherwise consent in writing) forthwith upon receipt,
transmit and deliver to the Secured Party in the form received all cash, checks, draft items, chattel paper and other instruments
for the payment of money (properly endorsed where required) so that such items may be collected by the Secured Party which may
be received by the Borrower at any time in full or partial payment or otherwise as proceeds of any of the Collateral. Except as
the Secured Party may otherwise consent in writing, upon default such proceeds which may be received by the Borrower will not be
commingled with any other of its funds or property but will be held separate and apart from its own funds or property and upon
express trust for the Secured Party until delivery is made to the Secured Party. The Borrower will comply with the terms and conditions
of any consent given by the Secured Party pursuant to the provisions of this paragraph.

 

In
the event of default as defined herein or in the Agreement, the Borrower agrees that the actual amount of damages by Secured Party
shall be difficult and impossible to determine, and that the remedies of Secured Party to recover such damages may be inadequate;
therefore, Secured Party is authorized to enforce its rights hereunder by injunctive or other equitable relief without regard to
the existence of actual damages. The Borrower hereby constitutes and appoints, upon Default, any officer of the Secured Party its
true and lawful agent and attorney in fact for the purpose of filing any and all notices of lien and waivers thereof, actions,
lawsuits and other appropriate documents to enforce the rights of Secured Party in and to any of the Non-Inventory Collateral.

 

If
any notification of intended disposition of any of the Collateral is required by law, such notification, if mailed, shall be deemed
reasonably and properly given if mailed at least five (5) days before such disposition, postage prepaid, addressed to the Borrower
either at the address shown above, or at any other address of the Borrower which the Secured Party reasonably believes to be the
Borrower's then current address. Any and all other notices given to the Borrower shall be deemed when personally delivered or when
mailed registered or certified mail and addressed to the Borrower as provided in the preceding sentence.

 

Any
proceeds of any disposition of any of the Collateral may be applied by the Secured Party to the payment of expenses in connection
with the Collateral, (including 15% of amounts due as attorneys' fees) and legal expenses, and any balance of such proceeds may
be applied by the Secured Party toward the payment of such of the Obligations, and in such order of application, as the Secured
Party may from time to time elect.

 

The
Secured Party may exercise any right or remedy provided herein in its discretion without exercising any other right or remedy provided
herein. The Secured Party shall be under no duty to exercise any or all of the rights and remedies given by this agreement. No
forbearance or indulgence shall operate as a waiver of any right or remedy of Secured Party or obligation of the Borrower and no
single or partial exercise by the Secured Party of any rights or remedy shall preclude, as other or further exercise thereof or
the exercise of any other right or remedy and unless Secured Party shall otherwise agree in writing, Secured Party shall be entitled
to invoke any remedy available to Secured Party under any agreement or by law or in equity and enforce any covenant or condition
against the Borrower despite said forbearance or indulgence.

 

The
Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral if the Secured
Party takes such action for that purpose as the Borrower shall request in writing, but failure of the Secured Party to comply with
any such request shall not of itself be deemed a failure to exercise reasonable care and no failure of the Secured Party to preserve
or protect any rights with respect to the Collateral against prior parties or do any act with respect to the preservation of the
Collateral not so requested by the Borrower shall be deemed a failure to exercise reasonable care in the custody or preservation
of the Collateral.

 

The
delivery of any checks, drafts or other orders for the payment of money to Secured Party shall not constitute payment thereof until
such checks, drafts or other items are finally paid.

 

Time
is of the essence of this agreement.

 

If
this agreement is not dated when executed by the Borrower, the Secured Party is authorized, without notice to the Borrower, to
date this agreement.

 

This
agreement has been delivered in the State of Georgia and shall be construed in accordance with the laws of the State. Wherever
possible, each provision of this agreement shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions
of this agreement.

 

The
rights and privileges of the Secured Party hereunder shall inure to the benefit of its heirs, legal representatives, successors
and assigns.

 

IN
WITNESS WHEREOF, this agreement has been duly executed under seal as of the 30th day of May, 2011.

 

(CORPORATE
SEAL)

 

 

	 	 	 	ONE UP INNOVATIONS, INC. 
	 	 	 	 	 
	 	 	 	 BY:	 /s/ Louis S. Friedman
	 	 	 	 	Louis S. Friedman
	 	 	 	 Title:	President
	 	 	 	 	 
	 	 	 	 BY:	 /s/
Ronald P. Scott
	 	 	 	 	 Ronald P. Scott
	 	 	 	 Title:	 Secretary

 

 

 

 

 

LSF /RPS_

(initial)

 

 

One Up Innovations, Inc.

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