Document:

EXHIBIT 10.26

                           NOTE MODIFICATION AGREEMENT
                                       OF
                           FIRST RENEWAL AND EXTENSION
                                       OF
                                  INTEREST ONLY
                           NONRECOURSE PROMISSORY NOTE
                             AND SECURITY AGREEMENT

     THIS  AGREEMENT  made the 10th day of April, 2004 between H.E.R.C. PRODUCTS
                               ----        -----------
INCORPORATED, a Delaware corporation, with its principal office at 1420 Columbus
Avenue,  Portsmouth, Virginia 23704 (hereinafter referred to as the "Maker") and
R.  JOHN  ARMSTRONG, with his principal office address at 3975 University Drive,
Suite  400,  Fairfax, Virginia 22030 (hereinafter referred to as the "Holder" or
"Secured  Party").

                              W I T N E S S E T H:

     WHEREAS,  Holder  is  the  holder of that certain INTEREST ONLY NONRECOURSE
PROMISSORY  NOTE  AND SECURITY AGREEMENT, dated February 23, 2003, from Maker to
Holder,  evidencing  an  indebtedness  in  the  original  principal  amount  of
$400,000.00  as  secured  by  that  Security  Agreement  made  a  part  thereof
(hereinafter  referred  to  as  the  "Indebtedness");

     WHEREAS,  the due date of that certain INTEREST ONLY NONRECOURSE PROMISSORY
NOTE AND SECURITY AGREEMENT, dated February 23, 2003, for the original principal
indebtedness  of  Four  Hundred  Thousand  ($  400,000.00) Dollars with interest
thereon  was  first  extended  by  that  certain  FIRST RENEWAL AND EXTENSION OF
INTEREST ONLY NONRECOURSE PROMISSORY NOTE AND SECURITY AGREEMENT to February 23,
2005;  and

     WHEREAS,  the Maker and the Holder have mutually agreed to modify the terms
of  the  Indebtedness.

     NOW  THEREFORE,  in pursuance of said agreement and in consideration of the
sum  of  Ten  ($10.00) Dollars and other good and valuable consideration each to
the  other  in  hand  paid, receipt of which is hereby acknowledged, the parties
hereto  mutually  covenant  and  agree  that  the Indebtedness evidenced in that
certain  note and first renewal and extension in the total amount of $400,000.00
is  hereby  divided  equally so as to hereinafter constitute two notes each of a
principal  amount  of  $200,000.00  (hereinafter  referred  to  together  as the
"Notes"),  which  Notes  evidence  an  original  principal  indebtedness of Four
Hundred  Thousand  ($400,000.00)  Dollars.

     The terms of payment of the Indebtedness evidenced by that certain INTEREST
ONLY  NONRECOURSE  PROMISSORY  NOTE  AND  SECURITY AGREEMENT, dated February 23,
2003,  is  hereby  modified  and  extended,  and that note restated, as follows.

     FOR  VALUE  RECEIVED, the undersigned Maker promises to pay to the order of
Holder  at  his  principal office, or at such other place as the Holder may from
time to time designate in writing, the principal sum of the Indebtedness of FOUR
HUNDRED  THOUSAND  DOLLARS  ($  400,000.00)  payable  in  the  following manner:

     1.     Interest  only  at the rate of eight percent (8.0%) per annum on the
principal of TWO HUNDRED THOUSAND DOLLARS ($200,000.00) shall be due and payable
                                            ----------
on  the  first  day  of the first month after the date of this Note Modification
Agreement,  with  the  entire  unpaid  balance  of  the principal of TWO HUNDRED
THOUSAND  DOLLARS  ($200,000.00) with interest thereon to be paid in full on the
                     ----------
date  one  (1) year from the date of the FIRST EXTENSION AND RENEWAL OF INTEREST
      -------------
ONLY NONRECOURSE PROMISSORY NOTE AND SECURITY AGREEMENT, dated February 23, 2004
(hereinafter  referred  to  as "One Year Term Note"), on February 23, 2005. This
                                                         -----------------
One  Year Term Note is delivered and accepted not in payment but for the purpose
of  and  in consideration of the extension of time of payment of one half of the
original  Interest Only Nonrecourse Promissory Note and Security Agreement. This
Note  Modification  Agreement  incorporates  by  specific reference that certain
Interest Only Nonrecourse Promissory Note and Security Agreement, dated February
23,  2003,  by  and  between  its  Maker, H.E.R.C. Products Incorporated and its
Holder  and  Secured Party, R. John Armstrong, and specifically incorporates all
the  terms,  conditions  and  secured party interests stated therein as modified
hereby.

<PAGE>

     2.     Interest  only  at the rate of eight percent (8.0%) per annum on the
principal of TWO HUNDRED THOUSAND DOLLARS ($200,000.00) shall be due and payable
                                            ----------
on  the  first  day  of the first month after the date of this Note Modification
Agreement,  with  the  entire  unpaid  balance  of  the principal of TWO HUNDRED
THOUSAND  DOLLARS  ($200,000.00) with interest thereon to be paid in full on the
                     ----------
date  three  (3)  years  from  the  date  of  the FIRST EXTENSION AND RENEWAL OF
      -----------------
INTEREST ONLY NONRECOURSE PROMISSORY NOTE AND SECURITY AGREEMENT, dated February
     --
23,  2004  (hereinafter  referred to as "Three Year Term Note"), on February 23,
                                                                    ------------
2007. This Three Year Term Note is delivered and accepted not in payment but for
 ---
the  purpose  of and in consideration of the extension of time of payment of one
half  of  the  original  Interest  Only Nonrecourse Promissory Note and Security
Agreement.  This  Note Modification Agreement incorporates by specific reference
that  certain  Interest Only Nonrecourse Promissory Note and Security Agreement,
dated  February  23,  2003,  by  and  between  its  Maker,  H.E.R.C.  Products
Incorporated  and  its  Holder  and  Secured  Party,  R.  John  Armstrong,  and
specifically  incorporates all the terms, conditions and secured party interests
stated  therein  as  modified  hereby.

     It is hereby expressly agreed that should any default be made in payment of
any  of  the  principal and interest on the One Year Term Note or the Three Year
Term  Note  on  any day whereon the same, or either of them, is payable as above
expressed,  or  in  the performance or observance of any of the other covenants,
terms or conditions of the Security Agreement or of any other instruments now or
hereafter  securing  these  Notes,  the  balance  of  said  principal  sum  of
Indebtedness,  with  all arrearages of interest thereon, shall, at the option of
the  Holder  of these Notes, become and be due and payable immediately, anything
contained to the contrary thereof in any ways notwithstanding, time being of the
essence.

     By  its  acceptance  hereof,  Holder,  for  himself  and his successors and
assigns,  as  the  owner  and  holder hereof, agrees that no judgment, order, or
execution entered in any suit, action, or proceeding, either legal or equitable,
hereon  or  on  the  Security Agreement shall be enforced personally against the
undersigned  duly authorized corporate officer or against any officer, director,
stockholder,  partner,  or  principal,  disclosed  or  undisclosed,  of  the
undersigned,  for  the purpose of obtaining satisfaction and payment of the debt
evidenced  hereby;  provided, however, that nothing herein contained shall limit
or  be  construed  to  limit  or  impair  the  enforcement  against the property
encumbered  by  the  Security Agreement of the rights and remedies of Holder and
his successors and assigns created under these Notes, the Security Agreement, or
under  any  other  instrument  executed  in  connection  with this Indebtedness.

This  Note  shall  be  construed according to the laws of the State of Virginia.

     IN  WITNESS  WHEREOF, the parties hereto have caused their names signed and
seals  affixed  hereto  as  of  the  day  and  year  first  written  above.

MAKER:  H.E.R.C.  Products  Incorporated
        --------------------------------

   /s/  S.  Steven  Carl
------------------------
S.  Steven  Carl,  Chief  Executive  Officer

HOLDER:  R.  John  Armstrong
         -------------------

   /s/  R.  John  Armstrong
---------------------------
R.  John  Armstrong

<PAGE>EXHIBIT 10.27

                      SECOND AMENDMENT TO ACCOUNT TRANSFER
                             AND PURCHASE AGREEMENT

     THIS  SECOND  AMENDMENT  TO  ACCOUNT  TRANSFER AND PURCHASE AGREEMENT (this
"Amendment")  is  entered  into by and between H.E.R.C. PRODUCTS INCORPORATED, a
Delaware  corporation,  and  H.E.R.C.  CONSUMER  PRODUCTS,  INC.,  an  Arizona
corporation  (collectively  the  "Seller"), S. Steven Carl (the "Guarantor") and
KBK  FINANCIAL,  INC.,  a  Delaware  corporation  ("KBK").

WHEREAS,  Seller and KBK entered into that certain Account Transfer and Purchase
Agreement  dated  as  of September  22,  1997,  as amended from time to time
(collectively, the "Purchase Agreement");  and

WHEREAS,  pursuant  to the Purchase Agreement the parties have provided for the
terms and conditions under which KBK may from time to time purchase certain of
Seller's  accounts;  and

WHEREAS,  the  Purchase  Agreement  and all other documents securing, governing,
guaranteeing  and/or  pertaining  to  the  Purchase  Agreement  are  hereinafter
referred  to  collectively  as  the  "Purchase  Documents";  and

WHEREAS,  the  parties  hereto  now  desire  to modify the Purchase Agreement as
hereinafter  provided;

NOW,  THEREFORE,  in  consideration  of  the  mutual covenants, representations,
warranties,  and  agreements  contained  herein,  and  for  other  valuable
consideration,  the  receipt  and  legal  sufficiency  of  which  are  hereby
acknowledged,  the  parties  hereto  agree  as  follows:

                                    ARTICLE I

                                   Definitions

Section  1.01  The  terms  used  in  this  Amendment to the extent not otherwise
defined  herein  shall  have  the  same  meanings  as in the Purchase Agreement.

                                   ARTICLE II

                                   Amendments

Section  2.01  Effective  as  of  the  date  hereof,  Section  1 of the Purchase
Agreement  is  hereby  amended  in  its  entirety  to  read  as  follows:

"1. OFFER OF ACCOUNTS. At its election from time to time during the term of this
Agreement,  Seller  agrees  to  offer  for  sale  to KBK certain of its accounts
arising  out  of sales of goods, or services rendered, by Seller, and to sell to
KBK on the terms set forth in this Agreement such of the offered accounts as KBK
may accept for purchase in the State of Texas. KBK shall have the absolute right
in its sole discretion to reject any or all offered accounts, whether or not KBK
has  previously  purchased  accounts of any particular account debtor hereunder.
The  parties  agree  that,  without  the prior consent of KBK, the maximum Gross
Amount  (as  defined  below)  of accounts that KBK may purchase hereunder at any
time,  together  with  the  Gross Amount of accounts previously purchased by KBK
from Seller hereunder which then remain outstanding, will not exceed One Million
Five  Hundred  Thousand  and  No/100  Dollars  ($1,500,000.00)  (the  "Facility
Amount").  KBK's  consent  to  purchase accounts in excess of such amount may be
evidenced  by  KBK's  acceptance  for  purchase  of  such  offered  accounts."

<PAGE>

Section 2.02 Effective as of the date hereof, the second paragraph of Section 12
of  the Purchase Agreement is hereby amended in its entirety to read as follows:

"Seller  hereby  agrees  to  pay  to  KBK a termination fee equal to two percent
(2.0%)  of  the Facility Amount (the "Termination Fee") and the payment shall be
an  obligation of Seller secured under Section 7 hereof. This Termination Fee is
payable  upon  termination  of  this  Agreement by Seller for any reason or upon
termination  by  KBK  at  its  election  for the reasons set forth in the second
sentence  of Section 13 below. However, if this Agreement is so terminated after
May  19, 2004, but before May 19, 2005, one-half of the Termination Fee shall be
waived.  If  the  Agreement  is  terminated  after  May  19,  2005,  all  of the
Termination  Fee  shall  be  waived."

                                   ARTICLE III

           Representations, Warranties, Ratification and Reaffirmation

Section 3.01 Seller hereby represents and warrants that: (i) the representations
and  warranties  contained  in  the  Purchase Agreement  are  true  and correct
on and as of the date hereof as though made on and as of the date hereof, and
(ii) no event has occurred and is continuing that constitutes  an Event of
Default or would constitute an Event of Default but for the  requirement  of
notice  or  lapse  of  time  or  both.

Section  3.02  The terms and provisions set forth in this Amendment shall modify
and  supersede  all  inconsistent terms and provisions set forth in the Purchase
Agreement,  but  except  as expressly modified and superseded by this Amendment,
the  terms  and  provisions of the Purchase Agreement are ratified and confirmed
and  shall  continue  in  full force and effect, Seller hereby agreeing that the
Purchase Agreement and the other Purchase Documents are and shall continue to be
outstanding,  validly  existing  and  enforceable  in  accordance  with  their
respective  terms.

Section  3.03  Guarantor  previously executed that certain Limited Guaranty (the
"Guaranty  Agreement")  dated  September  22,  1997,  for  the benefit of KBK to
unconditionally  guarantee  the  payment by Seller of certain losses incurred by
KBK under the Purchase Agreement, as more fully described therein. Guarantor, by
executing  this  Amendment,  hereby  consents to this Amendment and agrees that,
notwithstanding  the execution of this Amendment, the Guaranty Agreement remains
in full force and effect and the obligations thereunder remain valid and binding
against Guarantor. Guarantor acknowledges and agrees that there are no claims or
offsets  against,  or  defenses or counterclaims to, the terms and provisions of
the  Guaranty  Agreement  or  the  obligations  created  or  evidenced  thereby.

                                   ARTICLE IV

                                  Miscellaneous

Section  4.01  Each  of  the  Purchase  Documents  is hereby amended so that any
reference  in  the  Purchase  Documents  to  thePurchase  Agreement shall mean a
reference  to  the  Purchase  Agreement  as  amended  hereby.

Section  4.02  This  Amendment  may  be  executed  simultaneously in one or more
counterparts,  each  of  shall  be deemed an original, but all of which together
shall  constitute  one  and  the  same  instrument.  Delivery  of  an  executed
counterpart  of  this  Amendment  by  telecopy  shall be equally as effective as
delivery  of  a  manually  executed  counterpart  of  this  Amendment. Any party
delivering  an  executed  counterpart  of  this Amendment by telecopy also shall
deliver  a  manually  executed  counterpart of this Amendment but the failure to
deliver  a  manually  executed  counterpart  shall  not  affect  the  validity,
enforceability,  and  binding  effect  of  this  Amendment.

Section  4.03 The Agreement and this Amendment have been entered into in Tarrant
County,  Texas  and  shall  be  performable for all purposes in, Tarrant County,
Texas.  THE  AGREEMENT, AS AMENDED HEREBY, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. Courts within the State of Texas
shall have jurisdiction over any and all disputes arising under or pertaining to
the  Agreement,  as  amended  hereby, and venue in any such dispute shall be the
courts  located  in Tarrant County, Texas. Section 4.04 This Amendment shall not
become  effective  until  executed  by  KBK.

<PAGE>

Section  4.05  Seller agrees to pay KBK a fee equal to One Thousand Five Hundred
and  NO/100  Dollars  ($1,500.00) contemporaneously  with  the effectiveness of
this Amendment in consideration of the  financial  accommodations  provided  by
KBK  to  Seller  contained herein.

     EXECUTED  as  of  May  19,  2003.

                                           SELLER:

                                           H.E.R.C.  PRODUCTS  INCORPORATED

                                           By:
                                           Name:  S.  Steven  Carl
                                           Title:  Chief  Executive  Officer

                                           H.E.R.C.  CONSUMER  PRODUCTS,  INC.

                                           By:
                                           Name:  S.  Steven  Carl
                                           Title:  Chief  Executive  Officer

                                           GUARANTORS:

                                           S.  STEVEN  CARL

                                           KBK:

                                           KBK  FINANCIAL,  INC.

                                           By:
                                           Name:
                                           Title:
                                           Date:______________________________

STATE  OF  VIRGINIA

COUNTY  OF  PORTSMOUTH

     The  foregoing  instrument was acknowledged before me this 19th day of May,
2003,  by  S.  Steven  Carl  as  Chief  Executive  Officer  of H.E.R.C. Products
Incorporated  and  of  H.E.R.C.  Consumer  Products,  Inc.  and Individually, as
Guarantor.

Witness  my  hand  and  official  seal.

My  Commission  expires:                    (Notary  Public)

<PAGE>

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