ACCOUNTS RECEIVABLE PURCHASE AGREEMENT

THIS ACCOUNTS RECEIVABLE PURCHASE AGREEMENT (this “ Agreement ”) is made on this 11th day of March, 2009, by and between REPUBLIC CAPITAL ACCESS, LLC, a Delaware limited liability company having its principal place of business at 1818 Library Street, Reston, Virginia 20190 (“ Buyer ”),   and Lattice Incorporated, Ricciardi Technologies, Inc. and Systems Management Engineering, Inc. having its principal place of business at 2411 Dulles Corner Park, Suite 220, Herndon, VA 20171 (collectively “ Seller ”).

WHEREAS , Buyer and RCA have performed, or have caused to be performed, all necessary due diligence and have determined that Seller is an Eligible Contractor; and

WHEREAS , Seller desires to sell certain Receivables that it now owns and from time to time hereafter will own to Buyer, and Buyer is willing, on the terms and subject to the conditions contained in this Agreement, to purchase such Receivables from Seller at such time; and

NOW, THEREFORE , in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto agree as follows:

1.1       Definitions . Certain terms used in this Agreement are defined in this Section 1.1 .  These terms, and the additional terms defined above, shall have the meanings assigned wherever the terms appear in this Agreement. These meanings are also applicable to the singular and plural forms of the terms defined.

“ Acceptance Date ” shall have the meaning set forth in Section 2.2 hereof.

“ Account Balance ” shall mean, on any given day, the gross amount of all the Purchased Receivables or any portion thereof unpaid on that day.

“ Account Debtor ” shall have the same meaning set forth in the UCC and shall include any person liable on any Purchased Receivable, including, without limitation, the Government and any guarantor of such Purchased Receivable.

“ Accrual Period ” shall mean, with respect to any Residual Payment Date, the period from, and including, the immediately preceding Residual Payment Date through, but excluding, such Residual Payment Date; provided , however , that the initial Accrual Period shall commence on the date hereof.

“ Applicable Law ” shall mean all provisions of laws, statutes, rules, regulations, codes, ordinances, judgments, writs, decrees and orders of any Governmental Authority or arbitrator applicable to the Person in question, including judgments, writs, decrees and orders of all courts and arbitrators in Proceedings in which the Person in question is a party.

“ Anticipated Collection Date ” shall mean, with respect to any Purchased Receivable, the date which Buyer estimates in good faith to be the date that all Collections related to such Eligible Receivable will be directly deposited to the Segregated Account by the Account Debtor.

“ Assignment of Claims Act ” shall mean the United States Assignment of Claims Act of 1940, 31 U.S.C. § 3727, 41 U.S.C. § 15, as amended.

“ Availability Period ” shall mean the period from and including the date hereof to December 31, 2009, subject to the term of the Seller’s government contracts, provided , however , that if the term of this Agreement is extended in accordance with Section 10.10 hereof, the Availability Period will be extended as determined by Buyer in its sole discretion.

“ Bankruptcy Code ” shall mean Title 11 of the United States Code (11 U.S.C. §§ 101 et seq .).

“ Business Day ” shall mean any day that is not a Saturday, a Sunday or other day on which commercial banking institutions in the City of New York are authorized or obligated by Applicable Law to close.

“ Buyer Indemnified Liabilities ” shall have the meaning set forth in Section 10.3.1 hereof.

“ CBH ” shall mean Cherry, Bekaert & Holland, L.L.P., or such other Person that KBC approves in writing in its sole discretion that performs the obligations of Cherry, Bekaert & Holland, L.L.P. under the Collateral Review Agreement.

“ Collateral Review Agreement ” shall mean the Letter of Arrangement dated as of December 31, 2008 between CBH and the Buyer.

“ Collections ” shall mean all amounts received with respect to the Purchased Receivables, including scheduled payments (whether received in whole or in part; whether related to a current, future or prior due date; or whether paid voluntarily by an Account Debtor or received in connection with the realization of the amounts due under any Purchased Receivable or upon the sale or disposition of any property acquired in respect thereof), all partial payments, all full prepayments and all recoveries.

“ Compliance Certificate ” shall mean a certificate, in a form provided by Seller to Buyer, which contains the certification of an officer of Seller that, among other things, the representations and warranties set forth in this Agreement are true and correct as of the date such certificate is delivered.

“ Confirmation List ” shall mean a list, made either in writing or via email, delivered to Seller on the Acceptance Date that shall set forth (i) each Eligible Receivable Buyer agrees to purchase pursuant to any related Offer Notice and (ii) the Initial Purchase Price that shall be paid to Seller with respect to each such Eligible Receivable.

“ Contract Disputes Act ” shall mean the Contract Disputes Act of 1978, 41 U.S.C. §§ 601-613, as amended.

“ Contractor Review Agreement ” shall mean that certain Letter Agreement   dated as of January 9, 2009 between the Underwriter and RCA.

“ DCAA ” shall mean the Defense Contract Audit Agency of the United States Government.

 “ Deemed Collections ” shall mean all reductions, adjustments, discounts, credits, allowances, rebates, refunds, returns, disputes, counterclaims, offsets, defenses, rights of recoupment, rights of return, warranty claims or short payments, asserted by or on behalf of any Account Debtor with respect to any Purchased Receivable.

“ Direct Costs ” shall have the meaning ascribed to such term in 48 C.F.R. Section 2.101.

“ Discount Factor ” shall have the meaning set forth in Section 3.5 hereof.

“ Discount Factor Rate ” shall have the meaning set forth in Section 3.5 hereof.

“ Eligible Contractor ” means a Person that (a) is a U.S. resident or Person organized under the laws of any state of the United States, (b) is not an affiliate of RCA or Buyer, (c) is a party to a contract with an Account Debtor pursuant to which it is entitled to receive payments from such Account Debtor, (d) has been deemed to be “responsible” in accordance with the FAR and to have been determined by the Account Debtor to be satisfactory after reviewing the United States Government Contractor Performance Assessment Reporting System, (e) has not been notified of the reduction or suspension of contract payments upon a finding of fraud, or of the investigation of fraud, pursuant to FAR 32.006, (f) does not have a billing rate error of more than two percent (2%) with respect to billings to the Government within the last twelve (12) months prior to the purchase of any receivable generated by such Contractor by RCA, (g) has not experienced any set-off or withholding of funds under any contract with the Account Debtor as a result of a failure to pay its employees in accordance with any federal wage and hour statutes, including, but not limited to, the Service Contract Act, 41 U.S.C. § 351 et seq ., or the Contract Work Hours and Safety Standards Act, 40 U.S.C. § 3701 et seq ., nor has it been notified of an investigation of the foregoing matters, (h) has not experienced any set-off or withholding of funds under any contract with the Account Debtor as a result of its Indebtedness to the Account Debtor, including any monies owed for overpayment by the Account Debtor, nor has it been notified of an investigation of such matter, (i) has been reviewed and approved pursuant to the Contractor Review Agreement at least annually, and (j) satisfies all of the representations and warranties it makes under this Agreement.

“ Eligible Receivable ” A bona fide receivable arising from an invoice that has been sent to and approved for payment by an Account Debtor (to the extent required by Buyer) pursuant to a contract between an Account Debtor, as obligor, and an Eligible Contractor, and all Related Security thereof: (a) that is either (i) a “Service Contract” (as defined in FAR 37.101) between an Eligible Contractor and the Account Debtor, provided , however , that an Eligible Receivable shall not be deemed to arise from a construction contract, or (ii) a contract between an Eligible Contractor and the Account Debtor for the delivery of products, provided that the delivery of such products can be verified by Buyer; (b) that has been purchased by the Buyer from the Seller in accordance with this Agreement; (c) that has been executed by an authorized officer of the Eligible Contractor who has verified that adequate funds are available and no appropriations approval is required for the Eligible Contractor to enter into the contract; (d) that satisfies all of the criteria of any due diligence review conducted by Buyer, RCA, CBH or the Underwriter; (e) that is denominated and payable only in U.S. dollars by electronic funds transfer and only in the United States and no later than the later of (i) sixty (60) days from the Account Debtor’s receipt of the invoice and (ii) sixty (60) days after the Account Debtor has accepted the supplies delivered or the services performed to which the invoice relates; (f) that has been validly assigned to Buyer pursuant to the Assignment of Claims Act, and all payments with respect thereto have been validly been directed to be made directly to the Segregated Account; (g) with respect to which, immediately following the transfer of such Eligible Receivable to Buyer as contemplated by this Agreement, the Borrower shall have good title to such Eligible Receivable, free and clear of any Liens; (h) the sale and assignment of which by Seller to Buyer does not contravene or conflict with any applicable laws or contractual obligation or other restriction, limitation or encumbrance, and do not require any consent that has not been obtained; (i) the contracts, documents, instruments and other items with respect to which (i) contain customary and enforceable provisions such that the rights and remedies of the holder thereof are adequate for the practical realization against any related collateral or purchased assets of the benefits of the security or ownership thereof and (ii) do not contain any confidentiality (or any other) provisions that would restrict the ability of Buyer to exercise its powers,  rights and remedies under this Agreement; (j) as to which the right to receive payments thereunder is an “account” or a “payment intangible”, within the meaning of the UCC; (k) which arises under contracts, documents, instruments and other items that (i) have been duly authorized, are in full force and effect and constitute the legal, valid and binding obligations of the related Account Debtor and Eligible Contractor, enforceable against such Account Debtor and Eligible Contractor in accordance with their terms (except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and the effects of general principles of equity) and (ii) are not subject to any dispute, claim, defense, offset or counterclaim; (l) as to which no portion of the Related Security has been released (in whole or in part) from any Lien or security interest therein granted by the related Account Debtor to the Eligible Contractor; (m) which, together with the contracts, documents, instruments and other items related thereto, do not contravene in any material respect any Applicable Laws; (n) which arises under contracts, documents, instruments and other items, none of the parties to which have done or failed to do anything that would or might permit any other party thereto (other than the Borrower in exercising its rights or remedies thereunder) to terminate any such contracts, documents, instruments and other items or to suspend or reduce any payments or obligations due or to become due thereunder at any time after it becomes an Eligible Receivable; and (o) which at no point in time has failed to meet each of the criteria to constitute an Eligible Receivable set forth in subsections (a) through (m) above. Notwithstanding anything in this definition to the contrary, the first three (3) invoices or the last invoice with respect to any contract shall not be deemed an “Eligible Receivable” unless (i) any such receivable is submitted and validated through a web-based system such as “Wide Area Workflow” (WAWF) or (ii) KBC, in its sole discretion, is satisfied with the verbal confirmation that KBC has received from an appropriate government official that any such receivable is proper and will be submitted for payment.

“ Enrollment Fee ” shall have the meaning set forth in Section 3.1 hereof.

“ Environmental Law ” shall mean all requirements of applicable law and any permit, approval, authorization, license, concession or permission from any governmental authority imposing liability or standards of conduct for or relating to the regulation and protection of human health, safety, the environment and natural resources, including the United States Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §§ 9601 et seq .), the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq .), the Hazardous Materials Transportation Act (49 U.S.C. §§ 5101 et seq .), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq .), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq .), the Clean Air Act (42 U.S.C. §§ 7401 et seq .), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq .), the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq .), the Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq .), all regulations promulgated under any of the foregoing, all analogous requirements of law and any environmental transfer of ownership notification or approval statutes, including the Industrial Site Recovery Act (N.J. Stat. Ann. §§ 13:1K−6 et seq .).

“ ERISA ” shall mean the United States Employee Retirement Income Security Act of 1974, as codified at 29 U.S.C. § 1001 et seq . and the rules and regulations promulgated thereunder.

“ Event of Default ” shall have the meaning set forth in Section 9.1 hereof.

“ Face Amount ” shall mean, with respect to a Purchased Receivable, the face amount of such Purchased Receivable as of the date Buyer shall have delivered the Initial Purchase Price to Seller related to such Purchased Receivable.

“ FAR ” means the United States Federal Acquisition Regulations, 48 C.F.R. 1.00 et seq .

“ GAAP ” means generally accepted accounting principles in the United States of America in effect from time to time consistently applied (except for accounting changes in response to releases of the Financial Accounting Standards Board, or other authoritative pronouncements).

“ Government ” means the United States of America or any agency or instrumentality thereof.

“ Government Contract ” means any prime contract, purchase order, task order, delivery order, teaming agreement, joint venture agreement, strategic alliance agreement, basic ordering agreement, pricing agreement, letter contract or other similar arrangement of any kind that are currently active in performance between Seller, as an Eligible Contractor, and the Government, which shall result in Eligible Receivables owed to Seller which may be purchased by Buyer in accordance with this Agreement. A task, purchase or delivery order under a Government Contract shall not constitute a separate Government Contract, for purposes of this definition, but shall be part of the Government Contract to which it relates.

“ Government Contract Bid ” shall mean quotations, bids and proposals for awards of new Government Contracts   made by Seller for which no award has been announced and for which Seller believes there is a reasonable prospect that such an award to Seller may yet be made.

“ Governmental Authority ” shall mean any federal, state, municipal, local or other governmental or regulatory department, commission, board, bureau, agency, instrumentality, court or tribunal, in each case whether of the United States of America, any political subdivision thereof or any foreign jurisdiction.

“ Indebtedness ” shall mean, with respect to any Person, without duplication, any of the following, whether or not matured:  (a) all indebtedness for borrowed money, (b) all other obligations evidenced by notes, bonds, debentures or similar instruments, (c) all reimbursement and all other obligations with respect to (i) letters of credit, bank guarantees or bankers’ acceptances or (ii) surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation), (d) all obligations to pay the deferred purchase price of property or services, (e) all obligations created or arising under any conditional sale or other title retention agreement, regardless of whether the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property, (f) all matured obligations under any swap, cap, collar, forward purchase or similar hedging agreements or arrangements dealing with interest rates, currency exchange rates or commodity prices, either generally or under specific contingencies, (g) all obligations of such Person under all leases which are capitalized in accordance with GAAP and any financing leases involving substantially the same economic effect, (h) any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing, or indemnifying any Person against losses in respect of, any Indebtedness of any other Person, (i) all Indebtedness referred to above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property or other assets (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness and (j) all other obligations that would be recorded on a person’s balance sheet as a liability in accordance with GAAP.

“ Indirect Costs ” shall have the meaning ascribed to such term in 48 C.F.R. Section 2.101.

“ Initial Purchase Price ” shall have the meaning set forth in Section 2.3.1 hereof.

“ Initial Purchase Price Rate ” shall have the meaning set forth in Section 2.3.1 hereof.

“ KBC ” shall mean KBC Bank, N.V., a banking institution organized under the laws of the Kingdom of Belgium, acting through its New York Branch.

“ Lien ” shall mean any lien, security interest or other charge, encumbrance, or other type of preferential arrangement having the practical effect of a lien or security interest, of or on any assets or properties of any Person in favor of any other Person, including a conditional sale or title retention agreement.

“ Material Adverse Effect ” shall mean a circumstance or condition affecting the business, assets, operations, properties, condition (financial or otherwise), or prospects of Seller and/or the Purchased Receivables that could materially adversely affect (a) the business, assets, operations, properties, condition (financial or otherwise) or prospects of Seller, (b) the ability of Seller to perform any of its obligations under this Agreement, (c) the rights and remedies of Buyer under this Agreement, (d) the value, existence or ownership of the Purchased Receivables or (e) the collectability of the Purchased Receivables.

“ Offer Notice ” shall mean a notice, made either in writing or via email, delivered to Buyer by Seller through which Seller shall offer to sell Eligible Receivables for an amount greater than or equal to ten thousand dollars ($10,000).

“ PAF Rate ” shall have the meaning set forth in Section 3.3 hereof.

“ Person ” shall mean any individual, corporation, partnership, limited liability company, limited liability partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof.

“ Plan ” shall mean an employee benefit plan within the meaning of Section 3(3) of ERISA which is subject to Title IV of ERISA and maintained or contributed to by Seller, or any other plan covered by Title IV of ERISA that covers the employees of Seller.

“ Proceeding ” shall mean any action, suit, proceeding or litigation in equity or at law, or any other judicial or administrative proceeding or investigation.

“ Program Access Fees ” shall have the meaning set forth in Section 3.3 hereof.

“ Program Continuance Fee ” shall have the meaning set forth in Section 3.4 hereof.

“ Purchased Receivables ” shall mean all Eligible Receivables arising out of any invoice and other agreements identified on or delivered with any Receivables Invoice delivered by Seller to Buyer which Buyer elects to purchase pursuant to Section 2.2 hereof.

“ RCA ” shall mean RCA Funding, LLC.

“ Receivables ” shall mean (i) all of Seller’s receivables listed on any Receivables Invoice and all rights to, but not the obligations under, such contracts and any and all rights and security arising thereunder, (ii) all monies due or to become due with respect to the foregoing and (iii) all books and records related to any of the foregoing.

“ Receivables Invoice ” shall have the meaning set forth in Section 2.1 hereof.

“ Related Security ” shall mean, with respect to any Eligible Receivable or other receivable, all of the Seller’s right, title, interest and remedies in, to and under any and all contracts, documents, instruments and other items related thereto, and all proceeds of the foregoing, including, without limitation, (i) the right of the Seller to receive all scheduled and unscheduled payments of all amounts payable in connection with such Eligible Receivable or other receivable, (ii) the right, if any, of the Seller to cause the repurchase of the Seller’s interest in such Eligible Receivable or other receivable  and to receive the purchase price, (iii) the right to enforce the Seller’s rights and remedies any purchase and sale, transfer or other applicable assignment agreement, if any, with respect thereto, (iv) all Liens or security interests and property subject thereto from time to time purporting to secure any of the foregoing rights or interests, and the right to all collections in respect thereof, if any, (v) all guarantees, casualty and other insurance policies (including, without limitation, the right to receive all returned premiums related thereto) and other agreements or arrangements of whatever character from time to time supporting or securing or otherwise related to such Eligible Receivable or other receivable and the related contracts, documents, instruments and other items related thereto, (vi) all Collections and all accounts to which Collections in respect of such Eligible Receivable or other receivable are deposited (including the Segregated Account), (vii) all other information, documents, instruments, servicing files, records and computer-readable media, personal property, contract rights, servicing rights, escrow funds, and general intangibles of whatsoever kind evidencing, comprising or relating to the ownership or transfer of such Eligible Receivable or other receivable or the servicing thereof and all other documents or instruments delivered to the Seller with respect thereto and (viii) all proceeds of the foregoing.

“ Residual Calculation Date ” shall mean the second business day immediately following the date that any Collections are collected with respect to any Purchased Receivable; provided that the amount of such Collections exceed the sum of the Initial Purchase Price of such Purchased Receivable, plus the Discount Factor related to such Purchased Receivable, plus any accrued Program Access Fees owed during the applicable Accrual Period.

“ Residual Payment Date ” shall mean the Business Day immediately following the Residual Calculation Date.

“ Residual Purchase Price ” shall have the meaning set forth in Section 2.3.2 hereof.

“ Sale and Contribution Agreement ” shall mean that certain Sale and Contribution Agreement dated as of January 20, 2009, by and between RCA, as purchaser, and Buyer, as seller.

“ Segregated  Account ” shall mean that segregated bank account, located at KBC, specified by Buyer to Seller, in which any and all Collections shall be deposited.

“ Seller Obligations ” shall mean all advances, financial accommodations, liabilities, obligations, covenants and duties owing, arising, due or payable by Seller to Buyer of any kind or nature, present or future, arising under or in connection with this Agreement or under any other document, instrument or agreement, whether or not evidenced by any note, guarantee or other instrument, whether arising on account or by overdraft, whether direct or indirect (including those acquired by assignment) absolute or contingent, primary or secondary, due or to become due, now owing or hereafter arising and however acquired, including, without limitation, all Initial Purchase Prices, Program Access Fees, interest, Deemed Collections, fees, expenses, professional fees and attorneys’ fees and any other sums chargeable to Seller hereunder or otherwise.

“ Solvent ” means, with respect any Person, that as of any day, both (a) (i) the sum of such Person’s debts (including contingent and unliquidated liabilities) does not exceed the present fair saleable value of such Person’s present assets (both at fair value and fair saleable value); (ii) such Person’s capital is not unreasonably small in relation to its business as contemplated on such day; and (iii) such Person has not incurred and does not intend to incur, and believes that it will not incur, debts including current obligations beyond its ability to pay such debts as they become due (whether at maturity or otherwise); and (b) such Person is  “solvent” within the meaning given that term and similar terms under Applicable Laws relating to fraudulent transfers and conveyances.  For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5)

“ Termination Fee ” shall have the meaning set forth in Section 3.2 hereof.

“ Truth in Negotiations Act ” shall mean the Truth in Negotiations Act of 1962, 10 U.S.C. § 2306(a), 41 U.S.C. § 254(b), as amended.

“ UCC ” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York, provided , however , that, in the event that, by reason of mandatory provisions of law, any of the attachment, perfection or priority of the Purchased Receivables under this Agreement is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions of this Agreement relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.

“ Underwriter ” shall mean Credit Risk Management LLC.

“ Unpurchased Receivable ” shall mean any Receivable that is not a Purchased Receivable.

“ USA Patriot Act ” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Title II of Pub. L. 107-56 (signed into law October 26, 2001)).

2.1       Delivery of Invoices; Validation of Receivables .  During Availability Period, and simultaneously with the delivery of the same to any Account Debtor, Seller shall deliver to Buyer and KBC any and all invoices prepared relating to Receivables arising under contracts with an Account Debtor for which Seller has assigned the rights to receive payments therefrom to Buyer or Buyer’s designee (each, a “ Receivables Invoice ”). Upon receipt of any Receivables Invoices, Buyer shall perform, or shall cause another Person to perform, any and all due diligence necessary to determine which Receivables set forth in the Receivables Invoices are Eligible Receivables.

2.2       Offer and Acceptance of Receivables .  At any time during the Availability Period, provided that there does not then exist any Event of Default or any event that, with notice, lapse of time or otherwise, would constitute an Event of Default, Seller may deliver to Buyer an Offer Notice; provided , however , that Seller shall not deliver more than three (3) Offer Notices to Buyer in any calendar week. Within two ( 2 ) Business Days of Buyer’s receipt of an Offer Notice (the “ Acceptance Date ”), Buyer shall (i) deliver to Seller a Confirmation List and (ii) and pay to Seller by wire transfer an amount equal to the Initial Purchase Price of each Eligible Receivable set forth on such Confirmation List, it being hereby agreed to and accepted that the satisfaction of items (i) and (ii) above shall evidence Buyer’s acceptance to purchase the Eligible Receivables set forth on the Confirmation List. Notwithstanding the foregoing, Buyer shall have no obligation to purchase all or any portion of Eligible Receivables set forth in any Offer Notice or to give a Confirmation List. Upon Buyer’s acceptance of any Eligible Receivable as set forth in this Section 2.2 , such Eligible Receivable shall become a “ Purchased Receivable ”; provided , however , that it shall be a condition to the payment of each Initial Purchase Price that: (i) all of the conditions, representations, warranties and covenants set forth herein be true and correct on and as of the Acceptance Date as though made at and as of each such date, and (ii) no Event of Default, or any event or condition that with notice, lapse of time or otherwise would constitute an Event of Default, shall have occurred and be continuing, or would result from the payment of such Initial Purchase Price.

2.3       Purchase Price of Receivables .

2.3.1   Initial Purchase Price .  As set forth in Section 2.2 hereof, Buyer shall pay to Seller an amount equal to ninety   percent (90%) (the “ Initial Purchase Price Rate ”) of the Face Amount of each Eligible Receivable set forth in any Confirmation List (each, an “ Initial Purchase Price ”). Throughout the term of this Agreement, Buyer shall have the right to adjust the Initial Purchase Price Rate in its sole discretion upon consideration of certain factors as set forth in Exhibit A attached hereto.

2.3.2   Residual Purchase Price .  Provided that there does not then exist an Event of Default or any event or condition that, with notice, lapse of time or otherwise, would constitute an Event of Default, Buyer shall pay to Seller by wire transfer on the Residual Payment Date, the amount, if any, which Buyer owes to Seller on such Residual Payment Date, according to the accounting prepared by Buyer as of such Residual Calculation Date (the “ Residual Purchase Price ”). For each individual Purchased Receivable, the Residual Purchase Price shall be an amount equal to: (A) the total amount of Collections related to such Purchased Receivable as of the Residual Calculation Date; minus (B) the sum of (i) the Initial Purchase Price paid for such Purchased Receivable, plus (ii) the Discount Factor owed with respect to such Purchased Receivable, plus (iii) the total as of the Residual Calculation Date of (a) any and all accrued and unpaid Program Access Fees multiplied by a fraction, the numerator of which is equal to the total amount of Collections collected in such applicable Accrual Period and the denominator of which is the average daily Account Balance during such applicable Accrual Period, (b) Deemed Collections related to such Purchased Receivable, and (c) any other amounts due, including professional fees and expenses, as set forth in Section 10.2 hereof for which oral or written demand has been made by Buyer to Seller as of the Residual Calculation Date to the extent Buyer has agreed to accept payment thereof by deduction from the Residual Purchase Price.

2.4       Effectiveness of the Sale to Buyer .  Effective upon Buyer’s payment of the Initial Purchase Price, and for and in consideration therefore and in consideration of the covenants of this Agreement, Seller hereby absolutely sells, transfer and assigns to Buyer, all of Seller’s right, title and interest in and to each Purchased Receivable and any Related Security and all monies due or which may become due on or with respect to such Purchased Receivable and any Related Security. Buyer shall be the absolute owner of each Purchased Receivable and any Related Security. Buyer shall have, with respect to any goods related to the Purchased Receivable and any Related Security, all the rights and remedies of an unpaid seller under the UCC and other applicable laws, including the rights of replevin, claim and delivery, reclamation and stoppage in transit.

2.5       Unpurchased Receivables .  In the event that any collections deposited into the Segregated Account relate to an Unpurchased Receivable, Buyer shall remit, or shall cause RCA or KBC to remit, all such collections to Seller within the three (3) Business Days immediately following such collection. Buyer, in its sole discretion, may charge a fee to cover any and all administrative costs related to the collection and remittance of any Unpurchased Receivables.

2.6       True Sales .

2.6.1   Each of Buyer and Seller intend the transactions hereunder to constitute true sales of Purchased Receivables by Seller to Buyer providing Buyer with the full benefits of ownership thereof, and no party hereto intends the transactions contemplated hereunder to be, or for any purpose to be characterized as, a loan from or through Buyer to Seller.

2.6.2   In the event, but only to the extent, that the conveyance of Purchased Receivables by Seller hereunder is characterized by a court or other governmental authority as a loan rather than a sale, Seller shall be deemed hereunder to have granted to Buyer effective as of the date of the first purchase under this Agreement, a security interest in all of Seller’s right, title and interest in, to and under all of the Purchased Receivables sold by it, whether now or hereafter owned, existing or arising. Such security interest shall secure any and all rights of, and payments owed to, Buyer under this Agreement, whether now or hereafter existing or arising, due or to become due, direct or indirect, absolute or contingent. Buyer shall have, with respect to the property described in this Section 2.6.2 , and in addition to all the other rights and remedies available to Buyer under this Agreement and applicable law, all the rights and remedies of a secured party under the UCC, and this Agreement shall constitute a security agreement under applicable law.

3.1       Enrollment Fee . Immediately upon the execution of this Agreement, Seller shall pay to Buyer an amount equal to Twelve Thousand and Five Hundred   dollars ($12,500.00) (the “ Enrollment Fee ”) in consideration of Buyer’s commitment to purchase Receivables hereunder.

3.2       Termination Fee .  In the event that Seller terminates this Agreement prior to the end of the term of this Agreement as set forth in Section 10.10 hereof, Seller shall pay to Buyer an amount equal to Zero   dollars ($0) (the “ Termination Fee ”) in consideration for such early termination of this Agreement. The Termination Fee shall be paid to Buyer within twenty (20) days of such early termination, and may be charged to Seller directly or offset from any Residual Purchase Price or Unpurchased Receivable payments owed to Seller at or after the time at which such Termination Fee arises.

3.3       Program Access Fees .  On each Residual Payment Date, Buyer shall, or shall cause KBC to, deduct from any Collections an amount equal to the sum of .0226 % (the “ PAF Rate ”) of the daily ending Account Balance for each day during the applicable Accrual Period (the “ Program Access Fees ”). At all times throughout the term of this Agreement, as set forth in Section 10.10 hereof, Buyer shall have the right to adjust the PAF Rate as Buyer may deem necessary to account for any material changes in the direct, third party charges that are payable by Buyer in connection with the Purchased Receivables, including, without limitation, any servicing fees, underwriting fees and licensing fees; provided , however , that the PAF Rate shall be adjusted no more frequently than once per calendar quarter. Buyer shall provide Seller with thirty (30) days prior written notice of any such change.

3.4       Program Continuance Fee .  Throughout the term of this Agreement, as set forth in Section 10.10 hereof, Seller shall pay to Buyer a quarterly fee equal to Two Thousand Five Hundred   dollars   ($2,500.00 ) if the Average Account Balance for each day is less than One Million Five Hundred Thousand dollars ($1,500,000.00), (the “ Program Continuance Fee ”); provided , however , that Buyer, may reduce, in whole or in part, the Program Continuance Fee assessed in a given calendar quarter based on Buyer’s review of the collectability of the Purchased Receivables and the amount of Receivables Seller elects to sell to Buyer hereunder.

3.5       Discount Factor . On each Residual Payment Date, Buyer shall, or shall cause to, deduct from any Collections an amount equal to .35 % (the “ Discount Factor Rate ”) of the Face Amount of each Purchased Receivable for which the Residual Purchase Price, if any, is paid on such Residual Payment Date (the “ Discount Factor ”). At all times throughout the term of this Agreement, as set forth in Section 10.10 hereof, Buyer shall have the right to adjust the Discount Factor Rate in its sole discretion as Buyer may deem necessary to account for changes in the Buyer’s cost of funds or based on Buyer’s collection experience on all invoices purchased from Seller; provided , however , that the Discount Factor Rate may only be adjusted as of the first day of each calendar month. Buyer shall provide Seller with thirty (30) days prior written notice of any such change.

3.6       Accounting .  Buyer shall prepare and send to Seller on each Residual Calculation Date, an accounting of the transactions as of such Residual Calculation Date, including the amount of all Purchased Receivables, Collections and Program Access Fees. The accounting shall be deemed correct and conclusive unless Seller makes written objection to Buyer within [thirty (30)] days after Buyer delivers the accounting to Seller.

4.1       No Recourse .  Subject to Section 4.2 hereof, the purchase and sale of Receivables under this Agreement shall be without recourse to Seller for non-payment of Purchased Receivables due to credit problems of the Account Debtor; provided , however , that Seller shall be liable to Buyer for (i) any and all fraudulent statements related to any Receivable contained in the Receivables Invoices or otherwise and (ii) all representations, warranties, covenants and indemnities made by Seller pursuant to the terms of this Agreement, it being understood that such Obligations of Seller will not arise on account of the failure of the Account Debtor for credit reasons to make any payment in respect of a Purchased Receivable.

4.2       Deemed Collections; Repurchase

4.2.1   If on any   day the Account Balance is reduced or adjusted as a result of any defective, rejected or returned merchandise or services, any cash discount, any credit, any incorrect billing, pricing adjustment or any other adjustment by Seller or is reduced or canceled as a result of a setoff in respect of any claim by the Account Debtor thereof against Seller (whether such claim arises out of the same or a related or unrelated transaction) or as a result of any dispute or any obligation of Seller to pay to the related Account Debtor any rebate or refund, or to rework any product or service, Seller shall directly deposit into the Segregated Account in immediately available funds an amount equal to the Deemed Collections of such reduction or adjustment.

4.2.2   If on any day any of the representations or warranties herein are not true with respect to any Purchased Receivable as of the date it was sold hereunder, Seller shall directly deposit into the Segregated Account in immediately available funds an amount equal to the portion of the Account Balance related to such Purchased Receivable for application by KBC to the same extent as if Collections pertaining to such Purchased Receivable had actually been received on such date.

4.2.3   If and to the extent that Buyer shall be required for any reason to pay over to the Account Debtor (or any trustee, receiver, custodian or similar official in the event of bankruptcy, etc.) any amount received by it hereunder, such amount shall be deemed not to have been so received but rather to have been retained by Seller and, accordingly, Buyer shall have a claim against Seller for such amount, payable when and to the extent that any distribution from or on behalf of Seller is made in respect thereof.

4.2.4   If on any day, and for any reason, a Purchased Receivable is determined to not have qualified as an Eligible Receivable as of the date such Purchased Receivable was purchased by Buyer from Seller in accordance with this Agreement or at any time thereafter, Seller shall deposit directly into the Segregated Account in immediately available funds an amount equal to the Initial Purchase Price plus any Residual Purchase Price paid with respect to such Purchased Receivable and any and all costs incurred by Buyer in connection with such determination and adjustment, including reasonable fees and disbursements of counsel, within twenty-five (25) days of Seller’s receipt of notice of such determination. Seller shall deposit directly into the Segregated Account any amounts arising under this Section 4.2.4 .

5.1       Power of Attorney .  Seller does hereby irrevocably appoint Buyer and its successors and assigns as Seller’s true and lawful attorney in fact, and hereby authorizes Buyer, regardless of whether there has been an Event of Default, (i) to sell assign, transfer, pledge, compromise or discharge the whole or any part of the Purchased Receivables, (ii) to demand, collect, receive, sue, and give releases to any Account Debtor for the monies due or which may become due upon or with respect to the Purchased Receivables and to compromise, prosecute or defend any Proceeding relating to the Purchased Receivables, including the filing of a claim or the voting of such claims in any bankruptcy case, all in Buyer’s name or Seller’s name, as Buyer may choose, (iii) to prepare, file and sign Seller’s name on any notice, claim, assignment, demand, draft or notice of or satisfaction of lien or mechanics’ lien or similar document with respect to Purchased Receivables, (iv) to notify all Account Debtors with respect to the Purchased Receivables to pay Buyer directly, (v) to receive, open and dispose of all mail addressed to Seller for the purpose of collecting Purchased Receivables, (vi) to endorse Seller’s name on any checks or other forms of payment on the Purchased Receivables, (vii) to execute on behalf of Seller any and all instruments, documents, financing statements and the like to perfect Buyer’s interests in the Purchased Receivables, as set forth herein, and (viii) to do all acts and things necessary or expedient in furtherance of any such purposes. If Buyer receives a wire transfer or item which is payment for both a Purchased Receivable and another Receivable, the funds shall first be applied to the Purchased Receivable and, so long as there does not exist an Event of Default or an event that with notice, lapse of time or otherwise would constitute an Event of Default, the excess shall be remitted to Seller. Upon the occurrence and continuation of