Document:

Exhibit 10.4

    
      Exhibit
        10.4

    

     

    
 

    
      	 	 	
              COLUMN
                A

            	 	
              COLUMN
                B

            	 	
              COLUMN
                C

            	 	
              COLUMN
                D

            	 	
              COLUMN
                D

            	 
	 	 	
              CLIENTS'
                A/R

            	 	
              FUNDS
                EMPLOYED

            	 	
              LINE
                LIMIT

            	 	
              TNW
                CAP

            	 	
              Calculated
                Loan Avail

            	 
	
              LINE
                LIMIT

            	 	
              $2,500,000

            	 	
              TO
                CLIENTS

            	 	 	 	 	 	 	 
	
              BEGINNING
                COLLATERAL (FROM PREVIOUS REPORT)

            	 	 	 	 	 	 	 	
              as
                of

            	 	
              Line
                8 should be the

            	 
	
              PLUS:
                NET INVOICES PURCHASED

            	 	
              $

            	
              -

            	 	 	
              (See
                Attached

            	 	 	 	 	 	 	 	 	
              lesser
                of line 8A - 8D

            	 
	
              LESS:
                CREDITS

            	 	
              $

            	
              -

            	 	 	
              Client
                Summary)

            	
               

            	 	 	 	 	
              *4

            	 	 	 	 
	
              ENDING
                COLLATERAL

            	 	 	 	 	 	 	 	 	 	 	
              $

            	
               

            	 	$	-	 
	
              INELIGIBLE
                COLLATERAL

            	 	 	 	 	
              $

            	
              $

            	 	 	
              y

            	 	 	 	 	 	 	 
	
              TOTAL
                ELIGIBLE COLLATERAL

            	 	 	 	 	 	 	 	 	 	 	 	 	 	$	
            	 
	
              PERCENT
                OF ADVANCE ON ELIGIBLE COLLATERAL

            	 	
              $

            	
              0.72

            	 	
              $

            	
              0.85

            	 	 	
              s
                

            	 	 	s	 	 	 	 
	
              CALCULATED
                LOAN AVAILABILITY

            	 	
              $

            	
              -

            	 	
              $

            	
              -

            	 	
              $

            	
              500.000.00

            	 	
              $

            	
              -

            	 	
              $

            	
              -

            	 
	
              ANCHOR
                II \DIM; SERVICES. LLC

            	 	 	 	
              TOTAL

            	 
	
              BEGINNING
                LOAN (FROM PREVIOUS REPORT)

            	 	 	 	 	 	 	 	 	 	 	 	 	 	
              $

            	
              -

            	 
	
              LESS:
                COLLECTIONS

            	 	 	 	 	 	 	 	 	 	 	 	 	 	
              $

            	
              -

            	 
	
              PLUS
                INTEREST CHARGES AND LOAN FEES

            	 	 	 	 	 	 	 	 	 	 	 	 	 	
              $

            	
              -

            	 
	
              +(-)ADJUSTMENTS
                (OTHER FEES - i.e.WireFees ti3U_u~i)

            	 	 	 	 	 	 	 	 	 	 	 	 	 	
              $

            	
              -

            	 
	
              NET
                LOAN OUTSTANDING BEFORE ADVANCES

            	 	 	 	 	 	 	 	 	 	 	 	 	 	
              $

            	
              -

            	 
	
              AVAILABLE
                TO BORROW (LINE 8 MINUS LINE I)

            	 	 	 	 	 	 	 	 	 	 	 	 	 	
              $

            	
              -

            	 
	
              ADDITIONAL
                ADVANCE REQUESTED

            	 	 	 	 	 	 	 	 	 	 	 	 	 	
              $

            	
              -

            	 
	
              NEW
                LOAN BALANCE (LINE 13 PLUS LINE 15)

            	 	 	 	 	 	 	 	 	 	 	 	 	 	
              $

            	
              -

            	 
	
              NET
                AVAILABILITY (LINE 8 MINUS LINE 16)

            	 	 	 	 	 	 	 	 	 	 	 	 	 	
              $

            	
              -

            	 

    

     

    

      
        	
                SALES
                  DETAIL

              	 	
                CREDIT
                  DETAIL

              	 	
                LOCKBOX
                  DETAIL

              	 	
                INELIGIBLE
                  DETAIL

              	 
	
                COLLECTIONS
                  - LINE 10
                  $ -

              	 	 	 	 	 	
                DEPOSITS

              	 	 	
                Over
                  90 (From Invoice Date

              	
                )

              	 	 	 	 	 	 
	
                Purchased
                  Invoices $ -

              	 	 	
                Check
                  Deductions/Chargebacks $ -

              	 	
                $

              	
                -

              	 	 	
                Foreign/Fed.
                  Government

              	 	
                $

              	
                -

              	 	 	 	 
	
                Purchased
                  Invoices $ -

              	 	 	
                Inhouse
                  Chargebacks $ -

              	 	
                $

              	
                -

              	 	 	
                Not
                  "approved" (C.I.) or Verified

              	 	 	 	 	$	
              	 
	
                Purchased
                  Invoices $ -

              	 	 	
                Other
                  - $ -

              	 	
                $

              	
                -

              	 	 	
                Disputes

              	 	
                $

              	
                -

              	 	 	 	 
	
                Purchased
                  Credits (Put in as -) $ -

              	 	 	
                Other-
                  $ -

              	 	
                $

              	
                -

              	 	 	
                Other-

              	 	
                $

              	
                -

              	 	 	 	 
	
                Other-
                  $ -

              	 	 	
                Other-
                  $ -

              	 	
                $

              	
                -

              	 	 	
                Concentration-Customer

              	 	 	 	 	 	 	 
	
                Other-
                  $ -

              	 	 	
                Credit
                  Backs (put in as a -) $ -

              	 	
                $

              	
                -

              	 	 	
                Concentration-Client

              	 	 	 	 	 	 	 
	
                Other-
                  $ -

              	 	 	
                Non
                  Factored Cash (put in as a -) $ -

              	 	
                $

              	
                -

              	 	 	
                Client
                  Advances > 85

              	
                %

              	
                $

              	
                -

              	 	 	 	 
	
                NET
                  SALES - LINE 2 $ -

              	 	 	
                TOTAL
                  CREDIT - LINE 3 $ -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	
                $

              	
                -

              	 	 	
                Total

              	 

      

    

     

    

      Borrower
        hereby (a)
        as security for the repayment of Borrower's
        present and future indebtedness to
        FCC,
        LLC. (herein"FCC"),
        assigns,
        transfers
        and pledges to
        FCC,
its
        successors and assigns,
        and
        gives and agrees that FCC has a security interest in, under and pursuant
        the
        Loan and Security Agreement and/or other financing instruments between Borrower
        and
        FCC,
        the Accounts specifically described in the invoice copies or schedules of
        accounts receivable attached hereto and identified herein,
        and
        the Inventory (i.e.
        Merchandise)
        generally
        identified herein or described in lien statements or security agreements
        attached hereto,
        and
        in all presently outstanding Accounts and in all Inventory now owned by
        Borrower,
        and
        all Accounts and Inventory hereafter created,
        acquired
        or purchased by Borrower; (b) warrants and certifies to
        FCC
that
        all Accounts created since the prior Report are evidenced by invoice copies
        or
        schedules of accounts receivable attached hereto,
        and
        that the total of all Accounts on the books and records of Borrower at said
        date
        is as shown and there is now owing on Accounts that amount; (c) warrants
        and
        certifies to
        FCC
that
        all inventory made or acquired since the prior report is identified herein
        or is
        evidenced by suppliers'
        invoices,
        purchased journals,
        production
        reports,
        or
        other records attached hereto,
        and
        that the total of all inventory of Borrower is as shown as of the date shown
        hereon for Inventory and that Borrower now has in its possession and
        control,
        or
        in the possession of a third party of its account which third party has been
        identified in writing by Borrower to FCC, Inventory in that
        amount;
        (d)
        warrants that the total of withdrawals since the prior report are as
        shown;
        and
        (e)
        warrants
        that all collections received or credits allowed on Accounts previously assigned
        to FCC has been duly and regularly entered to the credit of the respective
        debtors on the books and accounts of Borrower;
        that
        all such collections have been remitted and all such credits have been reported
        to
        FCC
        promptly; that none of the Accounts previously
        or hereby assigned have been sold,
        assigned
        or pledged to any other party;
        and
        that prompt report has been made to
        FCC of
returned
        or rejected goods covered by
        any
        Account previously
        assigned,
        with
        payment to FCC of the amount thereof.

       

      
        	 	 	 
	Borrower:	
                ANCHOR
                  FUNDING SERVICES, LLC

              
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
                

                (Authorized
                  Signature)

              
	 	 

      

       

       

      
        This
          assignment and security agreement
          is accepted by
          FCC,
          LLC in Fort Lauderdale, FL, in reliance on
          the warranties,
          certifications and
          agreements of
          Borrower above,
          and
          those contained
          in
          said Loan
          and
          Security Agreement.

      

      

      

        FCC,
          LLC

        By:
          (Title)

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

    Exhibit
      B

     

     

    FACTORING
      AND SECURITY AGREEMENT

     

    THIS
      FACTORING AGREEMENT (this
      "Agreement")
      is made as of (the "Effective
      Date"),
      by and
between
      ("Seller") and
      ANCHOR FUNDING SERVICES, LLC ("Purchaser").

     

    1.
      Definitions.
      As used
      herein, the following terms shall have the following respective meanings. All
      capitalized terms not herein defined shall have the meaning set forth in the
      Uniform Commercial Code:

     

    1.1.
      "Anniversary
      Date"
      -
See
      Section 19.

     

    1.2.
      "Clearance
      Days"
      - (i)
      one (1) business day for checks drawn on banks located within the state in
      which
      Purchaser has its principal place of business, and for all electronic funds
      transfers, and (ii) three (3) business days for all other payments.

     

    1.3.
      "Closed"
      - a
      Purchased Account is closed upon the first to occur of (i) receipt of full
      payment by Purchaser or (ii) the unpaid Face Amount has been charged to the
      Reserve Account by Purchaser pursuant to the terms hereof.

     

    1.4.
      "Collateral"
      - any
      collateral now or hereafter described in any form UCC-1 filed against Seller
      naming Purchaser as the secured party, and all of Seller's right, title, and
      interest in and to the following property, now owned and hereafter
      acquired:

     

    All
      Accounts (including Accounts purchased by Purchaser hereunder and repurchased
      by
      Seller), chattel paper, general intangibles including, but not limited to,
      tax
      refunds, registered and unregistered patents, trademarks, service marks,
      copyrights, trade names, trade secrets, customer lists, licenses, documents,
      instruments, deposit accounts, certificates of deposit, and all rights of Seller
      as a seller of goods, including rights of reclamation, repletion, and stoppage
      in transit;

     

    1.4.1.
      All goods including, but not limited to: 1.4.1.1. All inventory, wherever
      located;

     

    1.4.1.2.
      All equipment and fixtures, wherever located, and all additions, substitutions,
      replacements (including spare parts), and accessions thereof and
      thereto;

     

    1.4.1.3.
      All books and records relating to all of the foregoing property and interests
      in
      property, including, without limitation, all computer programs, printed output,
      and computer readable data in the possession or control of the Seller, any
      computer service bureau, or other third party;

     

    1.4.1.4.
      All investment property; and

     

    1.4.1.5.
      All proceeds of the foregoing, including, but not limited to, all insurance
      proceeds, all claims against third parties for loss or destruction of or damage
      to any of the foregoing, and all income from
      the
      lease or rental of any of the foregoing.

     

    1.5.
      "Concentration
      Account"
      - A
      Purchased Account which, when added to other unpaid Purchased Accounts from
      the
      same Account Debtor will cause the balance owing from the Account Debtor to
      exceed 25% of the total unpaid amount of all Purchased Accounts.

     

    1.6.
      "Concentration
      Factoring Fee"
      - the
      Concentration Factoring Fee Percentage multiplied by the Face Amount of each
      Concentration Account. The Concentration Factoring Fee shall be paid as
      compensation for the Credit and Collection Services.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    1.7.
      "Concentration
      Factoring Fee Percentage"
      -.0%.
      1.8. "Concentration
      Reserve Percentage"
      -
      %.

     

    1.9.
      "Credit
      and Collection Services"
      - the
      following services performed by Purchaser on behalf of Seller as a result of
      the
      purchase of accounts hereunder:

     

    1.9.1.
      All accounts receivable record keeping, including the recording of invoices
      and
      payments; 1.9.2. Assumption of the credit risk with respect to certain Purchased
      Accounts, as set forth herein; 1.9.3. Collection of accounts; and

     

    1.9.4.
      Setting of such credit limits for sales by Seller as may be
      required.

     

    1.10.
      "Early
      Termination Date"
      - any
      termination date requested by Seller which is earlier than the next occurring
      Anniversary Date.

     

    1.11.
      "Early
      Termination Fee"
      - The
      greater of the (i) average monthly Factoring Fees earned by Purchaser for the
      three full months (or portion thereof) prior to the date on which Purchaser
      receives a Notice of Early Termination of this Agreement, or (ii) Minimum
      Monthly Fee, multiplied by the remaining months in the term of the
      Agreement.

     

    1.12.
      "Eligible
      Account"
      - an
      Account which is acceptable for purchase as determined by Purchaser in the
      exercise of its sole reasonable credit or business judgment.

     

    1.13.
      "Event
      of Default"
      - See
      Section 16.1.

     

    1.14.
      "Face
      Amount"
      - the
      face amount due on an Account at the time it is purchased pursuant to this
      Agreement.

     

    1.15.
      "Factoring
      Fee"
      - The
      Factoring Fee Percentage multiplied by the Face Amount of a Purchased Account
      at
      the time of purchase by Purchaser, for each Factoring Fee Period or portion
      thereof, that any portion thereof remains unpaid, computed from the last day
      of
      the Initial Factoring Fee Period to and including the Late Payment Date. The
      Factoring Fee shall be paid as compensation for the Credit and Collection
      Services and in the event Purchaser has also requested that Purchaser provide
      its Payroll Administration and Bookkeeping Services, the Factoring Fee shall
      be
      inclusive of all such services as described in the applicable
      addendum.

     

    1.16.
      "Factoring
      Fee Percentage"
      -
      .0%.

     

    1.17.
      "Factoring
      Fee Period"
      -
      days.

     

    1.
      18.
      "Fees" - The Factoring Fee.

     

    1.19.
      "Initial
      Factoring Fee"
      - 0% of
      the Face Amount. 1.20. "Initial
      Factoring Fee Period"
      -
      days

    1.21.
      "Insolvency
      Event"
      - the
      filing of a petition under any state or federal debtor relief or liquidation
      statute by or against an Account Debtor, within the Insolvency
      Period.

     

    1.22.
      "Insolvency
      Period"
      - days
      from the invoice date.

     

    1.23.
      "Invoice"
      - the
      document that evidences an Account. Where the context so requires, reference
      to
      an Invoice shall be deemed to refer to the Account to which it
      relates.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    1.24.
      "Late
      Charge"
      - .06%
      per day.

     

    1.25. "Late
      Payment Date" -
      the date
      which is () days from the date on which a Purchased Account was
      created.

     

    1.26.
      "Maximum
      Amount"
      -
      $.

     

    1.27.
      "Minimum
      Monthly Fee"
      -
      $.

     

    1.28.
      "Misdirected
      Payment Fee"
      -
      fifteen percent (15%) of the amount of any payment on account of a Purchased
      Account which has been received by Seller and not delivered in kind to Purchaser
      on the next business day following the date of receipt by Seller.

     

    1.29.
      "Missing
      Notation Fee"
      - 15% of
      the Face Amount.

     

    1.30.
      "Notation"
      - "This
      account has been assigned and is payable directly to Anchor Funding Services,
      LLC, located at 2201-E CrownPoint Executive Drive, Suite E, Charlotte, North
      Carolina 28227, to whom notice of any claim or dispute must be advised, either
      in writing or by telephone (866-789-3863 x203)."

     

    1.31.
      "Notice
      of Early Termination"
      - Any
      notice of termination that is effective on other than a Termination
      Date.

     

    1.32.
      "Obli
      atg ions"
      - all
      present and future obligations owing by Seller to Purchaser whether or not
      for
      the payment of money, whether or not evidenced by any note or other instrument,
      whether direct or indirect, absolute or contingent, due or to become due, joint
      or several, primary or secondary, liquidated or unliquidated, secured or
      unsecured, original, renewed, or extended, whether arising before, during,
      or
      after the commencement of any bankruptcy case in which Seller is a Debtor,
      including but not limited to any obligations arising pursuant to letters of
      credit or acceptance transactions or any other financial
      accommodations.

     

    1.33.
      "Party"
      or
      "Parties"
      - Each
      of Seller and
      Purchaser.

     

    1.34.
      "Payment
      Date"
      - the
      date on which a Purchased Account is either paid in full to Purchaser or
      Repurchased.

     

    1.35.
      "Payment
      Delay"
      - with
      respect to each Account, the number of days between the Purchase Date and the
      Payment Date.

     

    1.36.
      "Purchase
      Date"
      - with
      respect to each Account, the date on which the Account was purchased pursuant
      to
      this Agreement.

     

    1.37.
      "Purchased
      Account"
      - an
      Account purchased hereunder which has not been Repurchased.

     

    1.38.
      "Repurchased"
      - an
      Account has been repurchased when Seller has paid to Purchaser the then unpaid
      Face Amount.

     

    1.39.
      "Required
      Reserve Amount"
      - the
      Reserve Percentage multiplied by the unpaid balance of Purchased
      Accounts.

     

    1.40.
      "Reserve
      Account"
      - a
      bookkeeping account on the books of the Purchaser representing an unpaid portion
      of the Face Amounts, maintained by Purchaser to ensure Seller's performance
      with
      the provisions hereof.

     

    1.41.
      "Reserve
      Percentage"
      -
      %.

     

    1.42.
      "Reserve
      Shortfall"
      - the
      amount by which the Reserve Account is less than the Required Reserve
      Amount.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    1.43.
      "Schedule
      of Accounts"
      - a form
      supplied by Purchaser from time to time wherein Seller lists such of its
      Accounts as it requests that Purchaser purchase under the terms of this
      Agreement.

     

    1.44.
      "Seller's
      Account"
      - any
      demand deposit account maintained by Seller or represented by an employee of
      Seller to be maintained by Seller.

     

    2.
      Sale;
      Purchase Price, Reserve; Billing

     

    2.1.
      Assignment
      and
      Sale.

     

    2.1.1.
      Seller shall sell to Purchaser as absolute owner such of Seller's Accounts
      as
      are listed from time to time on a Schedule of Accounts. Upon purchase, Purchaser
      will assume the risk of non-payment on Purchased Accounts, so long as the
cause
      of
      non-payment is solely due to the occurrence of an Insolvency Event. This
      assumption of credit risk shall be limited to the
      product
      of the Face Amount of a Purchased Account multiplied by the difference between
      100% a nd the Reserve Percentage or actual
      amount paid for the Purchased Account, if any, whichever is less. In the event
      a
      Purchased Account remains unpaid beyond
      () days,
      Seller shall then be obligated to repurchase the Purchased Account.

     

    2.1.2.
      Seller shall provide with each Schedule of Accounts such documentation
      supporting and evidencing the Accounts identified therein as Purchaser shall
      from time to time request.

     

    2.1.3.
      Purchaser shall be entitled to purchase from Seller such Accounts as Purchaser
      determines to be Eligible Accounts, so long as the unpaid balance of Purchased
      Accounts does not exceed, before and after such purchase, the Maximum
      Amount.

     

    2.1.4.
      Purchaser shall pay the Face Amount, less any amounts due to Purchaser from
      Seller, including, without limitation, any amounts due under, inter
      alia, Sections
      1.6, 1.19, and 2.3.2 hereof, of any Purchased Account, to Seller's Account
      within two (2) business days of Seller's receipt of a statement from Purchaser
      listing the Accounts which Purchaser, has agreed to purchase, whereupon the
      Accounts shall be deemed purchased hereunder.

     

    2.2.
      Billing.
      Purchaser may send a weekly statement to all Account Debtors itemizing their
      account activity during the preceding billing period. All Account Debtors will
      be instructed to make payments to Purchaser.

     

    2.3.
      Reserve
      Account.

     

    2.3.1.
      Purchaser may pay any portion of any Face Amount to the Reserve Account in
      the
      amount of the Reserve Shortfall.

     

    2.3.2.
      Seller shall pay to Purchaser on demand the amount of any Reserve
      Shortfall.

     

    2.3.3.
      Purchaser shall pay to Seller, upon Seller's request, any amount by which
      collected funds on a entire closed schedule in the Reserve Account are greater
      than the Required Reserve Amount, provided that Seller shall be entitled to
      make
      such demand not more than once in any one (1) week.

     

    2.3.4.
      Purchaser may charge the Reserve Account with any Obligation, including any
      amounts due from Seller to Purchaser hereunder.

     

    2.3.5.
      Purchaser may pay any amounts due Seller hereunder by a credit to the Reserve
      Account.

     

    2.3.6.
      Purchaser may adjust the Reserve Percentage at any time without notice if such
      adjustment is necessitated by a change in the quality of the Purchased Accounts
      in Purchaser's reasonable credit judgment.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    3.
      Authorization
      for Purchases.
      Subject
      to the terms and conditions of this Agreement, Purchaser is authorized to
      purchase Accounts upon telephonic, facsimile, or other instructions received
      from anyone purporting to be an officer, employee, or representative of
      Seller.

     

    4. Fees
      and Expenses.
      Seller
      shall pay to Purchaser: 4.1. Fees. The
      Fees
      on the Purchase Date.

     

    4.2.
      Minimum
      Monthly Fee.
      Any
      amount by which the Fees earned in any month (prorated for partial months)
      is
      less than the Minimum
      Monthly Fee
      to be
paid
      on
      the
first
      day
      of
      the following
      month

     

    4.3.
      Misdirected
      Payment Fee.
      Any
      Misdirected Payment Fee immediately upon its accrual.

     

    4.4.
      Missing
      Notation Fee.
      The
      Missing Notation Fee on any Invoice that is
      sent by
      Seller
      to an Account Debtor which does not contain the Notation.

     

    4.5.
      Late
      Charge.
      The Late
      Charge, on demand, on:

     

    4.5.1.
      all past due amounts due from Seller to Purchaser hereunder; and 4.5.2. The
      amount of any Reserve Shortfall.

     

    4.6.
      Out-of-Pocket
      Expenses.
      The
      out-of-pocket expenses directly incurred by Purchaser in the administration
      of
      this or any other Agreement that is executed between the Parties including
      but
      not limited to wire transfer fees, NSF fees, postage, taxes, search fees, filing
      fees, travel expenses and audit fees. Seller shall not be required to pay for
      more than four audits per twelve-month period.

     

    4.7.
      Early
      Termination Fee.
      The
      Early Termination Fee multiplied by the number of months (or portion thereof)
      between the Early Termination Date and the next occurring Anniversary
      Date.

     

    5.
      Concentrations.

     

    5.1.
      Notwithstanding anything to the contrary contained herein, if a Purchased
      Account is a Concentration Account:

     

    5.1.1.
      The applicable Reserve Percentage shall be the Concentration Reserve Percentage;
      and

     

    5.1.2.
      The applicable Factoring Fee shall be the Concentration Factoring
      Fee.

     

    6.  Repurchase
      Of Accounts.
      Purchaser may require that Seller repurchase, by payment of the then unpaid
      Face
      Amount thereof together with any unpaid fees relating to the Purchased Account
      on demand or, at Purchaser's option, by Purchaser's charge to the Reserve
      Account:

     

    6.1.
      Notwithstanding the occurrence of an Insolvency Event:

     

    6.1.1.
      Any Purchased Account, the payment of which has been disputed by the Account
      Debtor obligated thereon, Purchaser being under no obligation to determine
      the
      bona fides of such dispute;

     

    6.1.2.
      All Purchased Accounts upon the occurrence of an Event of Default, or upon
      the
      termination date of this Agreement; and

     

    6.2.
      If
      an Insolvency Event has not occurred on or prior to the Late Payment Date,
      any
      Purchased Account which remains unpaid beyond the Late Payment
      Date.

     

    7.  Security
      Interest.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    7.1.
      As
      collateral securing
      the Obligations, Seller grants to Purchaser a continuing first
      priority security
      interest in and to the Collateral.

     

    7.2.
      Notwithstanding the creation of the above security interest, the relationship
      of
      the parties shall be that of Purchaser and Seller of accounts, and not that
      of
      lender and borrower.

     

    8.  Clearance
      Days.
      For all
      purposes under this Agreement, Clearance Days will be added to the date on
      which
      any payment is received by Purchaser.

     

    9.  Authorization
      to Purchaser.

     

    9.1.
      Seller hereby irrevocably authorizes Purchaser and any designee of Purchaser,
      at
      Seller's sole expense, to exercise at any times in Purchaser's or such
      designee's discretion all or any of the following powers until all of the
      Obligations have been paid in full:

     

    9.1.1.
      Receive, take, endorse, assign, deliver, accept, and deposit, in the name of
      Purchaser or Seller, any and all cash, checks, commercial paper, drafts,
      remittances, and other instruments and documents relating to the Collateral
      or
      the proceeds thereof;

     

    9.1.2.
      Take or bring, in the name of Purchaser or Seller, all steps, actions, suits,
      or
      proceedings deemed by Purchaser necessary or desirable to effect collection
      of
      or other realization upon the accounts and other Collateral;

     

    9.1.3.
      After an Event of Default, change the address for delivery of mail to Seller
      and
      to receive and open mail addressed to Seller;

     

    9.1.4.
      Extend the time of payment of, compromise or settle for cash, credit, return
      of
      merchandise, and upon any terms or conditions, any and all Accounts or other
      Collateral which includes a monetary obligation and discharge or release any
      account debtor or other obligor (including filing of any public record releasing
      any lien granted to Seller by such account debtor), without affecting any of
      the
      Obligations;

     

    9.1.5.
      Execute in the name of Seller and file against Seller in favor of Purchaser
      financing statements or amendments with respect to the Collateral;

     

    9.1.6.
      Pay any sums necessary to discharge any lien or encumbrance which is senior
      to
      Purchaser's security interest in the Collateral, which sums shall be included
      as
      Obligations hereunder, and in connection with which sums the Late Charge shall
      accrue and shall be due and payable; and

     

    9.1.7.
      At
any
      time, irrespective of whether an Event of Default has occurred, without notice
      to or the assent of Seller, notify any Account Debtor obligated with respect
      to
      any Account, that the underlying Account has been assigned to Purchaser by
      Seller and that payment thereof is to be made to the order of and directly
      and
      solely to Purchaser.

     

    9.1.8.
      At
      anytime, communicate directly with Seller's Account Debtors to verify the amount
      and validity of any Account created by Seller.

     

    9.2.
      Seller hereby releases and exculpates Purchaser, its officers, employees, and
      designees, from any liability arising from any acts under this Agreement or
      in
      furtherance thereof whether of omission or commission, and whether based upon
      any error of judgment or mistake of law or fact, except for willful misconduct.
      In no event will Purchaser have any liability to Seller for lost profits or
      other special or consequential damages. Without limiting the generality of
      the
      foregoing, Seller releases Purchaser from any claims which Seller may now or
      hereafter have arising out of Purchaser's endorsement and deposit of checks
      issued by Seller's customers stating that they were in full payment of an
      account, but issued for less than the full amount which may have been owed
      on
      the account.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    9.3.
      Seller authorizes Purchaser to accept, endorse, and deposit on behalf of Seller
      any checks tendered by an account debtor "in full payment" of its obligation
      to
      Seller. Seller shall not assert against Purchaser any claim arising therefrom,
      irrespective of whether such action by Purchaser effects an accord and
      satisfaction of seller's claims, under §3-311 of the Uniform Commercial Code, or
      otherwise.

     

    9.4.
      Seller shall fully complete and execute, as taxpayer, prior to or immediately
      upon the execution of this Agreement, a form 8821 (Rev. January 2000) issued
      by
      the Department of the Treasury, Internal Revenue Service or such other forms
      as
      may be requested
      by Purchaser, irrevocably authorizing Purchaser to inspect or receive tax
      information relating to any type of tax, tax form,
      years or
      periods or otherwise desired by Purchaser on an ongoing basis.

     

    9.5.
      ACH
      Authorization.
      In order
      to satisfy any of the Obligations, Purchaser is hereby authorized by Seller
      to
      initiate electronic debit or credit entries through the ACH system to Seller's
      Account or any other deposit account maintained by Seller wherever located.
      Seller may only terminate this authorization by giving Purchaser thirty (30)
      days prior written notice of termination.

     

    10.
      Covenants
      B,, Ste.

     

    10.1.
      After written notice by Purchaser to Seller, and automatically, without notice,
      after an Event of Default, Seller shall not, without the prior written consent
      of Purchaser in each instance:

     

    10.1.1.
      Grant any extension of time for payment of any of the accounts or any other
      Collateral which includes a monetary obligation;

     

    10.1.2.
      Compromise or settle any of the Accounts or any such other Collateral for less
      than the full amount thereof;

     

    10.1.3.
      Release in whole or in part any account debtor or other person liable for the
      payment of any of the accounts or
      any such
      other Collateral; or

     

    10.1.4.
      Grant any credits, discounts, allowances, deductions, return authorizations,
      or
      the like with respect to any of the accounts or any such other
      Collateral.

     

    10.2.
      From time to time as requested by Purchaser, at the sole expense of Seller,
      Purchaser or its designee shall have access, during reasonable business hours
      if
      prior to an Event of Default and at any time if on or after an Event of Default,
      to all premises where Collateral is located for the purposes of inspecting
      (and
      removing, if after the occurrence of an Event of Default) any of the Collateral,
      including Seller's books and records, and Seller shall permit Purchaser or
      its
      designee to make copies of such books and records or extracts therefrom as
      Purchaser may request. Without expense to Purchaser, Purchaser may use any
      of
      Seller's personnel, equipment, including computer equipment, programs, printed
      output, and computer readable media, supplies, and premises for the collection
      of accounts and realization on other Collateral as Purchaser, in its sole
      discretion, deems appropriate. Seller hereby irrevocably authorizes all
      accountants and third parties to disclose and deliver to Purchaser at Seller's
      expense all financial information, books and records, work papers, management
      reports, and other information in their possession relating to
      Seller.

     

    10.3.
      Before sending any Invoice to an account debtor, Seller shall mark same with
      the
      Notation or such other notation as Purchaser shall have advised Seller in
      writing.

     

    10.4.
      Seller shall pay when due all payroll and other taxes, and shall provide proof
      thereof to Purchaser in such form as Purchaser shall reasonably
      require.

     

    10.5.
      Encumbrance
      of Collateral.
      Seller
      shall not create, incur, assume, or permit to exist any lien upon or with
      respect to any Collateral now owned or hereafter acquired by
      Seller.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    11.
      Insurance.
      Seller
      shall maintain insurance on all insurable property owned or leased by Seller
      in
      the manner, to the extent, and against at least such risks (in any event,
      including but not limited to fire and business interruption insurance) as
      usually maintained by owners of similar businesses and properties in similar
      geographic areas. All such insurance shall be in amounts and form and with
      insurance companies acceptable to Purchaser in its sole discretion. Seller
      shall
      furnish to Purchaser:

     

    11.1.
      Upon written request, any and all information concerning such insurance
      carried;

     

    11.2.
      As
      requested by Purchaser, lender loss payable endorsements (or their equivalent)
      in favor of Purchaser.

     

    All
      policies of insurance shall provide for not less than thirty- (30) days' prior
      written cancellation notice to Purchaser.

     

    12.  Delivery
      of Misdirected Payments.
      Notwithstanding that Seller has agreed to pay the Misdirected Payment Fee
      pursuant to Section 4.3 hereof, Seller shall deliver in kind to Purchaser on
      the
      next banking day following the date of receipt by Seller of the amount of any
      payment on account of a Purchased Account.

     

    13.  Account
      Disputes.
      Seller
      shall notify Purchaser promptly of and, if requested by Purchaser, will settle
      all disputes concerning any Purchased Account, at Seller's sole cost and
      expense. However, Seller shall not, without Purchaser's prior written consent,
      compromise or adjust any Purchased Account or grant any additional discounts,
      allowances, or credits thereon. Purchaser may, but is not required to, attempt
      to settle, compromise, or litigate (collectively, "Resolve")
      the
      dispute upon such terms as Purchaser in its sole discretion deem advisable,
      for
      Seller's account and risk and at Seller's sole expense. Upon the occurrence
      of
      an Event of Default Purchaser may Resolve such issues with respect to any
      Account of Seller.

     

    14.  Perfection
      of Security Interest.
      Seller
      shall execute and deliver to Purchaser such documents and instruments,
      including, without limitation, Uniform Commercial Code financing statements,
      as
      Purchaser may request from time to time in order to evidence and perfect its
      security interest in any collateral securing the Obligations.

     

    15.  Representation
      and Warranty.
      Seller
      represents and warrants that:

     

    15.1.
      It
      is fully authorized to enter into this Agreement and to perform hereunder;
      15.2.
      This
      Agreement constitutes its legal, valid, and binding obligation; and 15.3. Seller
      is solvent and in good standing in the State of its organization.

     

    1
      5 4
      Each Purchased Account at the time each is submitted for purchase
      is and will remain:

     

    15.4.1.
      Bona fide existing obligations created by the sale and delivery of goods or
      the
      rendition of services in the ordinary
      course of Seller's business; the amount of each Account is due and owing to
      Seller and represents an accurate statement of a
      bona
      fide sale, delivery and acceptance of goods or performance of service by Seller
      to or for an Account Debtor. The terms for payment of each Account sold is
      not
      more than thirty (30) days from date of invoice and the payment of such Account
      is not contingent upon the fulfillment by Seller of any further performance
      of
      any nature whatsoever.

     

    15.4.2.
      Unconditionally owed and will be paid to Purchaser without defenses, disputes,
      offsets, counterclaims, or rights of return or cancellation.

     

    15.4.3.
      Sales to an entity which is at no time affiliated with Seller or in any way
      not
      an "arms length"
      transaction.

     

    15.5.
      Seller has not received notice of actual or imminent bankruptcy, insolvency,
      or
      material impairment of the financial condition of any applicable account debtor
      regarding Purchased Accounts.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    15.6.
      Seller shall notify Purchaser, in writing, immediately after obtaining knowledge
      from any source of the filing, by any means, of any lien, claim, or levy,
      against any property of Seller or Account Debtor.

     

    15.7.
      Seller shall not interfere with Purchaser's rights under this
      Agreement.

     

    15.8.
      Seller has not and will not transfer, assign or pledge any of its Accounts
      and
      shall not grant a security interest therein
      to any
      party other than Purchaser and that there are no financing statements now on
      file in any public office governing any property of Seller of any kind, real
      or
      personal, in which Seller is named in or has signed as the debtor, except the
      financing statement or statements filed or to be filed in respect to this
      Agreement or those statements now on file that have been disclosed in writing
      by
      Seller to Purchaser. Seller will not execute any financing statement in favor
      of
      any other person or entity, except Purchaser, during the term of this
      Agreement.

     

    15.9.
      Seller shall notify Purchaser in writing of any proposed change in Seller's
      name, legal entity, trade name, and office location or ownership
      structure.

     

    15.10.
      Seller shall indemnify Purchaser from any loss arising out of the assertion
      of
      any avoidance claim (that being any claim that any payment received by Purchaser
      from or for the account of an Account Debtor is avoidable under the Bankruptcy
      Code or any other debtor relief statute), other than such claims which relate
      to
      Purchased Accounts which are the subject of an Insolvency Event, and shall
      pay
      to Purchaser on demand the amount thereof. Seller shall notify Purchaser within
      two business days of it becoming aware of the assertion of an Avoidance Claim.
      This subsection shall survive termination of this Agreement. If after receipt
      of
      any payment or proceeds of Collateral applied to the payment of any obligation,
      Purchaser becomes subjected to an Avoidance Claim or is required to surrender
      or
      return such payment or proceeds to any person as a result of an Avoidance Claim,
      then the obligation intended to be satisfied by such payment or application
      of
      such proceeds shall be deemed immediately reinstated and continue in full force
      and effect as if such payment or proceeds had not been received by Purchaser.
      This Section shall remain effective notwithstanding any contrary action which
      may be taken by Purchaser in reliance upon such payment or proceeds and shall
      survive the termination of this Agreement.

     

    15.11.
      Seller shall accept no returns and shall grant no allowances or credit to any
      Account Debtor without notice to and the prior written approval of Purchaser.
      Seller shall provide to Purchaser for each Account Debtor on Accounts that
      have
      been purchased, a weekly report in form and substance satisfactory to Purchaser
      itemizing all such returns and allowances made during the previous week with
      respect such Eligible Accounts and a check (or wire transfer) payable to
      Purchaser for the amount thereof.

     

    15.12.
      The address set forth below Seller's signature hereon is Seller's mailing
      address, its chief executive office, principal place
      of
      business and the office where all of the books and records concerning the
      Accounts purchased are maintained and that there
      will be
      no change made to such location without first giving Purchaser at least thirty
      (30) days prior written notice.

     

    15.13.
      Seller shall maintain its books and records in accordance with generally
      accepted accounting principals and shall reflect on its books the absolute
      sale
      of the Accounts to Purchaser. Seller shall furnish Purchaser, upon request,
      such
      information and statements as Purchaser shall request from time to time
      regarding Seller's business affairs, financial condition and results of its
      operations. Without limiting the generality of the forgoing, Seller shall
      provide to Purchaser, on or prior to the 30`x' day of each month, unaudited
      consolidated and consolidating financial statements with respect to the prior
      month and, within ninety (90) days after the end of Seller's fiscal years,
      annual consolidated and consolidating financial statements and such certificates
      relating to the foregoing as Purchaser may request including, without
      limitation, a monthly certificate from the president and chief financial officer
      of Seller stating whether any Events of Default have occurred and stating in
      detail the nature of the Events of Default. Seller will furnish to Purchaser
      upon request a current listing of all open and unpaid accounts payable and
      accounts receivable, and such other items of information that Purchaser may
      deem
      necessary or appropriate from time to time. Unless otherwise expressly provided
      herein or unless Purchaser otherwise consents, computations and determinations
      pursuant hereto shall be made in accordance with generally accepted accounting
      principals, consistently applied.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    15.14.
      Seller has paid and will pay all taxes and governmental charges imposed with
      respect to sales of goods and furnish to Purchaser upon request satisfactory
      proof of payment and compliance with all federal, state and local
      tax requirements.

     

    15.15.
      Seller will promptly notify Purchaser of (i) the filing of any lawsuit against
      Seller involving amounts greater than $10,000.00, and (ii) any attachment or
      any
      other legal process levied against Seller.

     

    15.16.
      Any application made by Seller in connection with this Agreement, and the
      statements made therein are true and correct at the time that this Agreement
      is
      executed. There is no fact which Seller has not disclosed to Purchaser in
      writing which could materially adversely affect the Collateral, business or
      financial condition of Seller, or any of the Accounts, or which is necessary
      to
      disclose in order to keep the foregoing representations and warranties from
      being misleading.

     

    15.17.
      In
      no event shall the funds paid to Seller hereunder be used directly or indirectly
      for personal, family, household or agricultural purposes.

     

    15.18.
      Seller does business under no trade or assumed names except as indicated
      below.

     

    (None)

     

    16.
      Default.

     

    16.1.
      Events
      of Default.
      Each of
      the following events will constitute an Event of Default hereunder:

     

    16.1.1.
      Seller defaults in the payment of any Obligations or in the performance of
      provision hereof or of any other agreement now or hereafter entered into with
      Purchaser, or any warranty or representation contained herein proves to be
      false
      in any way, howsoever minor;

     

    16.1.2.
      Seller or any guarantor of the Obligations becomes subject to any debtor-relief
      proceedings;

     

    16.1.3.
      any such guarantor fails to perform or observe any of such Guarantor's
      obligations to Purchaser or shall notify
      Purchaser of its intention to rescind, modify, terminate, or revoke any guaranty
      of the Obligations, or any such guaranty shall cease to be in full force and
      effect for any reason whatever;

     

    16.1.4.
      Purchaser for any reason, in good faith, deems itself insecure
      with
      respect to the prospect of repayment or performance of the
      Obligations.

     

    16.2.
      Waiver
      of Notice.
      SELLER
      WAIVES ANY REQUIREMENT THAT PURCHASER INFORM SELLER BY AFFIRMATIVE ACT OR
      OTHERWISE OF ANY ACCELERATION OF SELLER'S OBLIGATIONS HEREUNDER. FURTHER,
      PURCHASER'S FAILURE TO CHARGE OR ACCRUE INTEREST OR FEES AT ANY "DEFAULT" OR
      "PAST DUE" RATE SHALL NOT BE DEEMED A WAIVER BY PURCHASER OF ITS CLAIM
      THERETO.

     

    16.3.
      Effect
      of Default.

     

    16.3.1.
      Upon the occurrence of any Event of Default, in addition to any rights Purchaser
      has under this Agreement or
      applicable law:

     

    16.3.1.1.
      Purchaser may immediately terminate this Agreement, at which time all
      Obligations shall become immediately become due and payable without notice;
      and

     

    16.3.1.2.
      The Late Charge shall accrue and is payable on demand on any Obligation not
      paid
      when due.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    16.4.
      In
      the event Purchaser deems it necessary to seek equitable relief, including,
      but
      not limited to, injunctive or receivership remedies, as a result of Seller's
      default, Seller waives any requirement that Purchaser post or otherwise obtain
      or procure any bond. Alternatively, in the event Purchaser, in its sole and
      exclusive discretion, desires to procure and post a bond, Purchaser
      may procure and file with the court a bond, or in lieu of a bond, a deposit
      into
      the court registry, in an amount up to and not
      greater than $10,000.00 notwithstanding any common or statutory legal
      requirement to the contrary. Upon Purchaser's posting
      of such
      bond, or in lieu of a bond, or deposit into the court registry, it shall be
      entitled to all benefits as if such bond was posted in full compliance with
      state law. Seller waives any right it may be entitled to, including an award
      of
      attorney's fees or costs, in the event
      any
      equitable relief sought by and awarded to Purchaser is thereafter, for whatever
      reason(s), vacated, dissolved or reversed.

     

    16.5.
      Seller acknowledges that it has a duty to timely pay all tax obligation(s)
      and
      that if, for whatever reason, a tax lien or levy were to issue that Seller
      shall
      cause such lien or levy to be satisfied or discharged within fifteen (15) days.
      Until such lien or levy is satisfied and discharged, Purchaser shall be entitled
      to withhold any sum(s) that may otherwise be due Seller and upon request or
      demand from such taxing authority may remit any such sums due Seller and over
      which Purchaser makes no claim to the taxing authority. Moreover, Seller agrees
      that until the tax lien or levy is satisfied or discharged, Seller shall be
      entitled to collect all proceeds of accounts and apply such proceeds to
      Purchaser's indebtedness. Nothing contained herein shall suspend or abate any
      performance due Purchaser.

     

    16.6.
      All
      post judgment interest shall bear interest at either the contract rate or the
      highest rate allowed by law, whichever is higher.

     

    17.  Account
      Stated.
      Purchaser shall render to Seller a statement setting forth the transactions
      arising hereunder. Each statement shall be in a format and in such detail as
      Purchaser, in its sole discretion, deems appropriate. Purchaser's books and
      records shall be admissible in evidence without objection as prima facie
      evidence of the status of the Accounts. Each statement, report, or accounting
      rendered, issued or available to Seller by Purchaser shall be deemed
      conclusively accurate and binding on Seller unless within fifteen (15) days
      after the date of issuance Seller notifies Purchaser by registered or certified
      mail, setting forth with specificity the reasons why Seller believes such
      statement, report, or accounting is inaccurate, as well as what Seller believes
      to be correct amount(s) therefore. Seller's failure to receive any monthly
      statement shall not relieve it of the responsibility to request such statement
      and failure to do so shall nonetheless bind Seller to whatever Purchaser's
      records would have reported.

     

    18.  Waiver.
      No
      failure to exercise and no delay in exercising any right, power, or remedy
      hereunder shall impair any right, power, or remedy which Purchaser may have,
      nor
      shall any such delay be construed to be a waiver of any of such rights, powers,
      or remedies, or any acquiescence in any breach or default hereunder; nor shall
      any waiver by Purchaser of any breach or default by Seller hereunder be deemed
      a
      waiver of any default or breach subsequently occurring. All rights and remedies
      granted to Purchaser hereunder shall remain in full force and effect
      notwithstanding any single or partial exercise of, or any discontinuance of
      action begun to enforce, any such right or remedy. The rights and remedies
      specified herein are cumulative and not exclusive of each other or of any rights
      or remedies that Purchaser would otherwise have. Any waiver, permit, consent,
      or
      approval by Purchaser of any breach or default hereunder must be in writing
      and
      shall be effective only to the extent set forth in such writing and only as
      to
      that specific instance.

     

    19.  Termination,
      Effective Date.
      This
      Agreement will be effective as of the Effective Date, will continue in full
      force and effect for one year, and shall be further annually extended
      automatically for successive years unless Seller gives Purchaser written notice
      of its intention to terminate at least sixty days prior to each such anniversary
      date (each an "Anniversary
      Date"),
      whereupon this Agreement shall terminate on the next following anniversary.
      Upon
      termination Seller shall pay the Obligations to Purchaser and Seller shall
      remain obligated to tender all Accounts to Purchaser notwithstanding that
      Purchaser may thereafter determine that no Account may qualify as an Eligible
      Account.

     

    20.  Amendment.
      Neither
      this Agreement nor any provisions hereof may be changed, waived, discharged,
      or
      terminated, nor may any consent to the departure from the terms hereof be given,
      orally (even if supported by new consideration), but only by an instrument
      in
      writing signed by all parties to this Agreement. Any waiver or consent so given
      shall be effective only in the specific instance and for the specific purpose
      for which given.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    21.  Survival.
      All
      representations, warranties, and agreements herein contained shall be effective
      so long as any portion of this Agreement remains executory.

     

    22.  No
      Lien Termination Without Release.
      In recognition of the Purchaser's right to have its attorneys' fees and other
      expenses incurred in connection with this Agreement secured by the Collateral,
      notwithstanding payment in full of all Obligations by Seller, Purchaser shall
      not be required to record any terminations or satisfactions of any of
      Purchaser's liens on the Collateral unless and until Seller has executed and
      delivered to Purchaser a general release in a form reasonably satisfactory
      to
      Purchaser. Seller understands that this provision constitutes a waiver of its
      rights under §9-404 of
      the
      UCC.

     

    23.  Conflict.
      Unless
      otherwise expressly stated in any other agreement between Purchaser and Seller,
      if a conflict exists between the provisions of this Agreement and the provisions
      of such other agreement, the provisions of this Agreement shall control, except
      that in the event any conflict arises with respect to any addendum, the addendum
      controls.

     

    24.  Enforcement.
      This
      Agreement and all agreements relating to the subject matter hereof are the
      product of negotiation and preparation by and among each party and its
      respective attorneys, and shall be construed accordingly.

     

    25.  Severability.
      In the
      event any one or more of the provisions contained in this Agreement is held
      to
      be invalid, illegal or unenforceable in any respect, then such provision shall
      be ineffective only to the extent of such prohibition or invalidity, and the
      validity, legality, and enforceability of the remaining provisions contained
      herein shall not in any way be affected or impaired thereby.

     

    26.  Relationship
      of Parties.
      The
      relationship of the parties hereto shall be that of Seller and Purchaser of
      accounts, and neither party is or shall be deemed a fiduciary of or to the
      other. Seller acknowledges that there is not now, and that it will not seek
      or
      attempt to establish, any fiduciary relationship between Purchaser and Seller,
      and Seller waives any right to assert, now or in the future, the existence
      or
      creation of any fiduciary relationship between Purchaser and Seller in any
      action or proceeding (whether by way of claim, counterclaim, crossclaim or
      otherwise) between them.

     

    27.  Attorneys'
      Fees.
      Seller agrees to reimburse Purchaser on demand for:

     

    27.1.
      The
      actual amount of all costs and expenses, including attorneys' fees, which
      Purchaser has incurred or may incur in:

     

    27.1.1.
      Negotiating, preparing, or administering this Agreement and any documents
      prepared in connection herewith;

     

    27.1.2.
      Any way arising
      out of this Agreement; and

     

    27.1.3.
      Protecting, preserving, or enforcing any lien, security interest, or other
      right
      granted by Seller to Purchaser or arising under applicable law, whether or
      not
      suit is brought;

     

    27.2.
      The
      actual costs, including photocopying (which, if performed by Purchaser's
      employees, shall be at the rate of $. 10/page), travel, and attorneys' fees
      and
      expenses incurred in complying with any subpoena or other legal process
      attendant to any litigation in which Seller is a party;

     

    27.3.
      Either (the
      choice of
      which
shall
      be in the sole discretion of Purchaser):

     

    27.3.1.
      The actual amount of all costs and expenses, including attorneys' fees, which
      Purchaser may incur in enforcing this Agreement and any documents prepared
      in
      connection herewith, or in connection with any federal or state insolvency
      proceeding commenced by or against Seller, including those (i) arising out
      the
      automatic stay, (ii) seeking dismissal or conversion of the bankruptcy
      proceeding or (ii) opposing confirmation of Seller's plan
      thereunder.

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    27.3.2.
      Twenty percent (20%) of the amount of the claim of Purchaser against Seller,
      which Seller agrees shall constitute a reasonable substitute for such actual
      fees and expenses.

     

    All
      such
      costs and expenses of Purchaser which has been incurred on or prior to the
      execution hereof shall be paid contemporaneously with the execution hereof.
      Any
      such costs and expenses incurred subsequent to the execution hereof shall become
      part of the Obligations when incurred and may be added to the outstanding
      principal amount due hereunder.

     

    27.4.
      Notwithstanding the existence of any common law, statute or rule in any
      jurisdiction which may provide Seller with a right to attorney's fees or costs,
      Seller hereby waives any and all rights to seek attorney's fees or costs
      thereunder and Seller agrees that Purchaser exclusively shall be entitled to
      recovery of its attorney's fees or costs in respect to any litigation based
      on,
      arising out of, or related to this Agreement, whether under, or in connection
      with, this and/or any agreement executed in conjunction herewith, or any course
      of conduct, course of dealing, statements (whether verbal or written) or actions
      of either party.

     

    28.
      Entire
      Agreement.
      This
      Agreement and any addenda supersedes all prior or contemporaneous agreements
      and
      understandings between said parties, verbal or written, express or implied,
      relating to the subject matter hereof. No promises of any kind have been made
      by
      Purchaser or any third party to induce Seller to execute this Agreement. No
      course of dealing, course of performance, or trade usage, and no parole evidence
      of any nature, shall be used to supplement or modify any terms of this
      Agreement.

     

    29.  Choice
      of Law.
      This
      Agreement and all transactions contemplated hereunder and/or evidenced hereby
      shall be governed by, construed under, and enforced in accordance with the
      internal laws of the State of North Carolina.

     

    30.  Jury
      Trial Waiver.
      In
      recognition of the higher costs and delay which may result from a jury trial,
      Purchaser hereto may elect to waive any right to trial by jury and Seller agrees
      to grant its consent of any claim, demand, action or cause of action (a) arising
      hereunder, or (b) in any way connected with or related or incidental to the
      dealings of the parties hereto or any of them with respect hereto, in each
      case
      whether now existing or hereafter arising, and whether sounding in contract
      or
      tort or otherwise.

     

    3
      1.
Venue,
      Jurisdiction.
      The
      Parties agree that any suit, action, or proceeding arising out of the subject
      matter hereof, or the interpretation, performance, or breach of this Agreement,
      shall, if Purchaser so elects, be instituted in the United States District
      Court
      for the Eastern District of North Carolina or any court of the State of North
      Carolina located in Raleigh (each an "Acceptable
      Forum"),
      each
      Party agrees that the Acceptable Forums are convenient to it, and each Party
      irrevocably submits to the jurisdiction of the Acceptable Forums, irrevocably
      agrees to be bound by any judgment rendered thereby in connection with this
      Agreement, and waives any and all objections to jurisdiction or venue that
      it
      may have under the laws of the State of North Carolina or otherwise in those
      courts in any such suit, action or proceeding. Should such proceeding be
      initiated in any other forum, Seller waives any right to oppose any motion
      or
      application made by Purchaser as a consequence of such proceeding having been
      commenced in a forum other than an Acceptable Forum.

     

    32.
      Notice.

    [Missing
      Graphic Reference]

     

    32.1.
      All
      notices required to be given to any Party other than Purchaser shall be deemed
      given upon the first to occur of (i)
      deposit
      thereof in a receptacle under the control of the United States Postal Service,
      (ii) transmittal by electronic means to a receiver under the control of such
      party; or (iii) actual receipt by such party or an employee or agent of such
      party.

     

    32.2.
      All
      notices required to be given to Purchaser hereunder shall be deemed given upon
      actual receipt by a responsible officer of Purchaser.

     

    32.3.
      For
      the purposes hereof, notices hereunder shall be sent to the following addresses,
      or to such other addresses as each such party may in writing hereafter
      indicate.

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    33.  Financial
      Accommodation and Non-Assumable.
      This
      Agreement shall be deemed to be one of financial accommodation and not assumable
      by any debtor, trustee or debtor-in-possession in any bankruptcy proceeding
      without Purchaser's express written consent and may be suspended in the event
      a
      petition in bankruptcy is filed by or against Seller.

     

    34.  Rights
      Against Successor Entity.
      In the
      event Seller's principals, officers or directors form a new entity similar
      to
      that of Seller during the term of this Agreement or while Seller remains liable
      to Purchaser for any obligations under this Agreement, whether corporate,
      partnership, limited liability company or otherwise, the principals hereby
      acknowledge that such entity shall be deemed to have expressly assumed the
      obligations due Purchaser by Seller under this Agreement. Upon the formation
      of
      any such entity, Purchaser shall be deemed to have been granted an irrevocable
      power of attorney with authority to execute, on behalf of the newly formed
      successor business, a new UCC-1 or UCC-3 financing statement and have it filed
      with the appropriate secretary of state or UCC filing office. Purchaser shall
      be
      held-harmless and be relieved of any liability as a result of Purchaser's
      execution and recording of any such financing statement or the resulting
      perfection of a lien in any of the successor entity's assets. In addition,
      Purchaser shall have the right to notify the successor entity's account debtors
      of Purchaser's lien rights, its right to collect all Accounts, and to notify
      any
      new lender who has sought to procure a competing lien of Purchaser's right
      in
      such successor entity's assets.

     

    35.  Counterparts.
      This
      Agreement my be signed in any number of counterparts, each of which shall be
      an
      original, with the same effect as if all signatures were upon the same
      instrument. Delivery of an executed counterpart of the signature page to this
      Agreement by facsimile transmission shall be effective as delivery of a manually
      executed counterpart of this Agreement, and any party delivering such an
      executed counterpart of the signature page to this Agreement by facsimile to
      any
      other party shall thereafter also promptly deliver a manually executed
      counterpart of this Agreement to such other party, provided that the failure
      to
      deliver such manually executed counterpart shall not affect the validity,
      enforceability, or binding effect of this Agreement.

     

    IN
      WITNESS WHEREOF, the Parties have executed this Agreement on the day and year
      first above

     

    
      	
              written.

            	 	 	 
	 	 	 	 
	SELLER:
              LLC	 	 	PURCHASER:
              ANCHOR FUNDING SERVICES, 
	 	 	 	 
	/s/ 	 	 	/s/ 
	
              

            	 	 	
              

            
	Name
Title

              Address
                for Notices:

            	 	 	
              Name
Title

              Address
                for Notices:

               

              2201-E
                CrownPoint Executive Drive Charlotte, North Carolina
                28227

            
	 	 	 	 
	OFFICER:	 	 	OFFICER: Brad
              Bernstein
	
              FAX NO.: 

              FEIN:

            	 	 	FAX
              NO.: (704) 847-2259 

    

     

     

     

    

 

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    BANK
      ACCOUNT INFORMATION

     

    NAME
      OF
      ACCOUNT: NAME OF BANK:

    BANK
      CONTACT:

     

    BANK
      PHONE: BANK ABA #:

     

    YOUR
      BANK
      ACCT #: SPECIAL INSTRUCTIONS:ex10.5

    Exhibit
      10.5

     

    BTHC
      XI, Inc.

    c/o
      Anchor Funding Services, LLC

    2201
      E. Crownpoint Executive Drive

    Charlotte,
      N.C. 28227

     

    
 

    
      	Fordham Financial Management, Inc	
              January
                31, 2007

            

    

    14
      Wall
      Street, 18th Floor

    New
      York,
      NY 10005

    Telephone:
      (212) 732-8500

    Facsimile:
      (212) 349-2554

    

    Gentlemen:

    

    The
      following consulting agreement (this “Agreement”) sets forth our understanding
      with respect to Fordham Financial Management, Inc., a Colorado corporation
      (“Fordham”), providing financial advisory consulting services for BTHC XI, Inc.,
      a Delaware corporation (the “Company”). Any capitalized terms used but not
      defined herein shall have the meaning given to them in that certain Placement
      Agent Agreement entered into between Fordham and the Company dated January
      2,
      2007. 

    

    1. Scope
      of Work; Term. 

    

    (a) For
      a
      period of one (1) year from the closing of our Private Placement Offering,
      Fordham will render financial consulting services to the Company as such
      services shall be required but in no event shall such services require more
      than
      one business day per month and such services shall include the
      following:

    

    (i) to
      advise
      and assist in matters pertaining to the financial requirements of the Company
      and to assist, as and when required, in formulating plans and methods of
      financing; and

    

    (ii) to
      assist
      in obtaining financial management, and technical and advisory services, and
      financial and corporate public relations, as may be requested or
      advisable.

    

    (b) All
      services required to be performed hereunder shall be requested by the Company
      in
      writing and upon not less than three business days' notice, unless such notice
      is waived by Fordham. Such notice shall be to the address or facsimile number
      specified above or to such other place as Fordham shall designate to the Company
      in writing.

    

    2. Compensation.
      For
      Fordham’s services to be performed hereunder, and for Fordham’s continued
      availability to perform such services, the Company will pay Fordham at each
      Closing, a fee of 1% of the gross proceeds of the Private Placement Offering.
      Further, the Company will reimburse Fordham for such reasonable out-of-pocket
      expenses as may be incurred by Fordham on the Company’s behalf, but only to the
      extent authorized in writing by the Company. 

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    

    3. Confidentiality.

    

    (a) Fordham
      and its “affiliates” (as defined in Rule 144(a) of the Securities Act of 1933,
      as amended (the "Securities Act")) recognize and acknowledge that it and its
      employees will have access to confidential information and trade secrets of
      the
      Company, and other entities doing business with the Company relating to
      research, development, manufacturing, marketing, financial, employee, salary,
      and other business-related activities or may discover, conceive, perfect or
      develop, solely or jointly with others, inventions, discoveries, improvements,
      know-how, computer programs, patents, patent applications, design patents,
      models, prototypes, copyrights and trade secrets or other technical,
      manufacturing, marketing, customer, and/or financial data, agreements,
      correspondence and information (hereinafter “Confidential Information”). Such
      Confidential Information constitutes valuable, special, and unique property
      of
      the Company, and/or other entities doing business with the Company.

    

    (b) Fordham
      and its affiliates will keep such Confidential Information in strict confidence
      and will not, during or after the term of its assignment at the Company, make
      any use of, or disclose any of such Confidential Information to any person,
      firm, corporation, association, or other entity for any reason or purpose
      whatsoever, except as is generally available to the public or as specifically
      allowed in writing by an authorized representative of the Company.

    

    (c) Fordham
      and its affiliates, during or after the term of its assignment at the Company,
      agree not to solicit or encourage any employee or consultant of Company to
      leave
      the employ of or terminate its consulting relationship with the
      Company.

    

    (d) Fordham
      and its affiliates agree not to make use of or disclose any Confidential
      Information, including trade secrets, of any other person or entity in carrying
      out Fordham's or its affiliates' assignment for the Company.

    

    (e) In
      the
      event of a breach or threatened breach by Fordham or its affiliates of the
      provisions of this Section
      3,
      Company
      shall be entitled to an injunction restraining Fordham or its affiliates from
      disclosing and/or using, in whole or in part, such Confidential Information.
      Nothing herein shall be construed as prohibiting Company from pursuing other
      remedies available to Company for such breach or threatened breach, including
      the recovery of damages from Fordham and/or its affiliates.

    

    4. Independent
      Consultant.
      Fordham
      is and shall perform this Agreement as an independent consultant, and, as such,
      shall have and maintain sole control over its operations and/or services.
      Fordham shall not be, represent, act, report to, or be deemed to be the agent,
      representative, employee or servant of Company. The amounts payable to Fordham
      hereunder are inclusive of any gross receipts, sales or other tax. 

     

    5. Assignment.
      Fordham
      may not assign its rights or delegate its obligations hereunder without the
      prior written consent of Company. Company may assign its rights and obligations
      hereunder to any of its subsidiaries or affiliates. Company may also assign
      its
      rights herein to any company that acquires substantially all of the Company’s
      business to which this Agreement relates upon prior written notice to Fordham.
      

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    6. Entire
      Agreement.
      The
      foregoing represents the sole and entire agreement between the parties with
      respect to the subject matter hereof and supersedes any prior agreements between
      the parties with respect thereto. This Agreement may not be modified, renewed,
      extended or terminated except by a written instrument signed by a duly
      authorized officer or representative of the party against whom enforcement
      of
      such modification, renewal, extension or termination is sought. This Agreement
      shall be governed by and construed in accordance with the internal laws of
      the
      State of New York, without regard to the principles of conflicts of laws of
      such
      state.

     

     

     

     

     

     

     

     

     

    

    [Remainder
      of Page Intentionally Left Blank]

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    Please
      signify Fordham's agreement and consent to the foregoing by signing and
      returning to the Company the enclosed copy of this Agreement which will
      thereupon constitute a binding agreement between Fordham and the
      Company.

     

    
      	 	 	 
	 	
              Very
                truly yours,

            
	 	 
	 	BTHC XI, Inc. 
	 
 	 
 	 
 
	Date: 	By:  	/s/ 
	 	
              
Brad
              Bernstein, 
	 	
              President

            

    

    

    

    

    Agreed
      and Consented to:

    

    FORDHAM
      FINANCIAL MANAGEMENT, INC.

    

    

    BY______________________________

    William
      Baquet,

    Chief
      Executive Officer

    
      Austin_1
        266068v.3

       

       

    
      
        
        

      

      
        4

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