LOAN AND SECURITY AGREEMENT

Exhibt 10.1

(continued)

(continued)

(continued)

ANCHOR FUNDING SERVICES, LLC, a North Carolina limited liability company (the " Borrower "), each of the financial institutions identified as Lenders on the signature pages hereto (together with each of their successors and assigns, referred to collectively as " Lenders " and each individually as a " Lender "), and TEXTRON FINANCIAL CORPORATION, a Delaware corporation (" Textron "), acting in the manner and to the extent described in Article XI (in such capacity, " Agent "), agree as follows:

As used in this Agreement:

" Acceptance Date " means, as to any particular Assignment and Acceptance, the date specified as the effective date in such Assignment and Acceptance.

" Account " or " Accounts " means all now owned or hereafter acquired right, title and interest in all accounts, as such term is defined in the UCC, and any and all supporting obligations with respect to any of the foregoing.

" Account Debtor " means a Person who is obligated to pay in respect of a Purchased Account.

" Additional Documents " has the meaning given to such term in Section 3.2(d) .

" Adjusted Tangible Net Worth " means, with respect to Borrower, on a consolidated basis (a) stockholder's equity determined in accordance with GAAP, plus (b) the outstanding principal balance of Subordinated Indebtedness, minus (c) Intangible Assets including but not limited to all unamortized debt discount and expense, unamortized research and development expense, unamortized deferred charges, goodwill, intellectual property, unamortized excess cost of invest­ments in subsidiaries over equity at dates of acquisition, deferred taxes, deferred financing costs and all similar items which should properly be treated as intangibles in accordance with GAAP, minus (d) all loans or advances to Affiliates of Borrower.

" Affiliate " means, with respect to a Person, (a) any partner, officer, shareholder or member (if holding more than ten percent (10%) of the outstanding interest in such Person), director or managing agent of such Person, and (b) any other Person (other than a Subsidiary) that, (i) directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such given Person, (ii) directly or indirectly beneficially owns or holds ten percent (10%) or more of any class of voting stock or membership or other voting interest of such Person or any Subsidiary of such Person, or (iii) ten percent (10%) or more of the voting stock or membership or other voting interest of which is directly or indirectly beneficially owned or held by such Person or a Subsidiary of such Person.  The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities or membership or other voting interest, by contract or otherwise.

" Agent " has the meaning given to such term in the preamble of this Agreement.

" Agent Advances " has the meaning given to such term in Section 1.2(b)(vi) .

" Agreement " means this Loan and Security Agreement, including all Schedules, Exhibits and other attachments hereto, as the same may be amended, restated, supplemented, extended or otherwise modified from time to time.

" Agreement Date " means the date as of which this Agreement is dated.

" Anti-Terrorism Law " means, collectively, the Patriot Act, Executive Order No. 13224 or any other statute, regulation, executive order, or other law pertaining to the prevention of future acts of terrorism or money laundering, in each case as such law may be amended from time to time.

" Applicable Law " means all applicable provisions of constitutions, statutes, rules, regulations and orders of governmental bodies and orders and decrees of courts and arbitrators.

" Applicable Margin " means four percent (4.0%).

" Approved Assignee " means any Lender, an Affiliate of a Lender or an Approved Fund.

" Approved Fund " means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

" Asset Disposition " means the disposition of any asset of Borrower or any of its Subsidiaries.

" Assignment and Acceptance " means an Assignment and Acceptance substantially in the form of Exhibit B .

" Availability " means at any time (a) the amount of the Borrowing Base at such time minus (b) the aggregate principal amount of Revolving Loan Advances at such time.

" Average Monthly Purchased Accounts Turnover " means the average of the Monthly Purchased Accounts Turnover for any applicable period.

" Bankruptcy Code " means the United States Bankruptcy Code, as in effect from time to time.

" Board " means the duly elected and serving members of the Board of Managers of Borrower.

" Borrower " has the meaning given to such term in the preamble of this Agreement.

" Borrowing " means a borrowing of Revolving Loan Advances made on the same day by the Lenders (or Agent on behalf thereof), or by Agent in the case of an Agent Advance.

" Borrowing Base " means, with respect to Borrower, an amount in dollars equal to the lesser of (a) the Revolving Credit Limit, or (b) up to eighty-five percent (85%) of the net amount of Eligible Factored Accounts, minus (c) any Reserves.

" Borrowing Base Certificate " means the Borrowing Base Certificate referred to in Section 1.2 in the form attached hereto as Exhibit A .

" Business Day " means any day other than a Saturday, Sunday or other day on which banks in Providence, Rhode Island are authorized or required to close.

" Capital Expenditures " means the aggregate of all expenditures made and liabilities incurred that, in accordance with GAAP, are required to be included in or reflected by the property, plant, equipment or similar fixed assets accounts.

" Capitalized Lease " means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

" Cash Concentration Account " means a deposit account established and maintained by Borrower over which Agent, for itself and for the benefit of the Lender Group, has "control" (as that term is used in Article 9 of the UCC), pursuant to the terms of a Deposit Account Control Agreement.

" Cash Equivalents " mean: (a) marketable obligations issued or unconditionally guaranteed by, and backed by the full faith and credit of, the United States government, maturing within 12 months of the date of acquisition; (b) certificates of deposit, time deposits and bankers' acceptances maturing within 12 months of the date of acquisition, and overnight bank deposits, in each case which are issued by a commercial bank organized under the laws of the United States or any state or district thereof, rated A-1 (or better) by S&P or P-1 (or better) by Moody's at the time of acquisition, and (unless issued by a Lender) not subject to offset rights; (c) repurchase obligations with a term of not more than 30 days for underlying investments of the types described in clauses (a) and (b) entered into with any bank meeting the qualifications specified in clause (b); (d) commercial paper rated A-1 (or better) by S&P or P-1 (or better) by Moody's, and maturing within nine months of the date of acquisition; and (e) shares of any money market fund that has substantially all of its assets invested continuously in the types of investments referred to above, has net assets of at least $500,000,000 and has the highest rating obtainable from either Moody's or S&P.

" Change of Control " means the occurrence of any of the following events:  (i) the sale or transfer of all or substantially all of the assets of Borrower as an entirety to any person or related group of persons other than an Affiliate or Affiliates of Borrower; (ii) Parent shall cease to own at least fifty-one percent (51%) of the issued and outstanding membership interests of Borrower; (iii) Brad Bernstein shall cease to be an officer of Borrower or his replacement is not acceptable to Agent in its sole discretion; or (iv) Borrower is liquidated, dissolved, or adopts a plan of liquidation pursuant to the Bankruptcy Code or any other bankruptcy law.

" Closing Date " means the date of the funding of an initial Loan under this Agreement.

" Closing Fee " has the meaning given to such term in Section 2.1(b) .

" Collateral " means all of Borrower's assets, including, without limitation, all of the following property and interests in property of Borrower, wherever located and whether now or hereafter existing or now owned or hereafter acquired or arising: (i) all Receivables Collateral; (ii) all Inventory; (iii) all Equipment; (iv) all Contract Rights; (v) all General Intangibles and Proprietary Rights; (vi) all Investment Property; (vii) each Deposit Account and all certificates of deposit maintained with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a certificate of deposit that is an instrument under the UCC; (viii) all goods, services and other property, whether or not delivered, (a) the sale, rendition or lease of which gives or purports to give rise to any Receivables Collateral, including, but not limited to, all merchandise returned or rejected by or repossessed from Sellers, or (b) securing any Receivables Collateral, including, without limitation, all rights as an unpaid vendor or lienor (including, without limitation, stoppage in transit, replevin and reclamation) with respect to such goods and other property; (ix) all mortgages, deeds to secure debt and deeds of trust on real or personal property, guaranties, leases, security agreements, and other agreements and property which secure or relate to any Receivables Collateral or other Collateral (including the Purchased Accounts), or are acquired for the purpose of securing and enforcing any item thereof; (x) all documents of title, policies and certificates of insurance, securities, chattel paper (including electronic chattel paper and tangible chattel paper) and other documents and instruments; (xi) all other goods and personal property, whether tangible or intangible, wherever located, including money, supporting obligations, letters of credit and each Letter-of-credit right; (xii) all files, correspondence, computer programs, tapes, discs and related data processing software which contain information identifying or pertaining to any of the Receivables Collateral, or any Account Debtor, or showing the amounts thereof or payments thereon or otherwise necessary or helpful in the realization thereon or the collection thereof; (xiii) any "commercial tort claims" as that term is defined in the UCC, as set forth on Schedule 3.2(e) ; (xiv) all Purchased Accounts and Factoring Documentation (and the rights of Borrower to payments thereunder), and (xv) any and all products and proceeds of the foregoing (including, but not limited to, any claim to any item referred to in this definition, and any claim against any third party for loss of, damage to or destruction of any or all of, the Collateral or for proceeds payable under, or unearned premiums with respect to, policies of insurance) in whatever form, including, but not limited to, cash, negotiable instruments and other instruments for the payment of money, chattel paper, security agreements and other documents.

" Collateral Locations " shall mean the Executive Office and those additional locations, if any, of Borrower set forth and described on Exhibit G .

" Commitment ", as applied to any Lender, means the Revolving Credit Commitment of such Lender.

" Contract Rights " means any rights under contracts not yet earned by performance and not evidenced by an instrument or chattel paper.

" Covenant Compliance Certificate " has the meaning given to such term in Section 7.1 .

" Credit Facility " means the total revolving credit facility established under this Agreement in an aggregate amount outstanding at any one time not to exceed the Maximum Credit.

" Credit Guidelines " means Borrower's customary credit and underwriting guidelines as of the date hereof as set forth in Borrower's credit and underwriting guidelines manual, a copy of which is attached as Exhibit E , as such guidelines are amended from time to time, provided that such amendments have been approved by Agent in writing in accordance with Section 8.14 .

" Credit Support Document " means each Guaranty, and any letter of credit or other undertaking of any Guarantor or other party in favor of Agent relating to the Obligations.

" Default " means an event or condition the occurrence of which would, with the lapse of time or the giving of notice, or both, become an Event of Default.

" Defaulting Lender " has the meaning given to such term in Section 1.2(b)(iii) .

" Deposit Account " has the meaning given to such term in the UCC.

" Deposit Account Control Agreement " means a Deposit Account Control Agreement among Borrower, Agent and Wachovia Bank, National Association, pursuant to which Agent shall have been granted a first priority lien and security interest in the deposit account more particularly described therein.

" Dollar " and " $ " means freely transferable United States dollars.

" Early Termination Fee " means the fee referred to in Section 2.7 .

" East Coast Time " means the time in Providence, Rhode Island.

" EBITDA " means, for any period, the sum of the amounts for such period of consolidated (a) Net Income of Parent and its Subsidiaries, (b) Interest Expense of Parent and its Subsidiaries, (c) Taxes imposed on Borrower, and (d) the amount of all depreciation and amortization allowances and other non-cash expenses of Parent and its Subsidiaries (but excluding allowances for bad debt and provision for losses).

" Eligible Assignee " means (a) an Approved Assignee or (b) any other Person (i) that is a commercial bank, finance company, insurance company or other financial institution or fund and that, in the ordinary course of business, extends credit of the type contemplated herein; (ii) whose becoming an assignee would not constitute a prohibited transaction under Section 4975 of the Internal Revenue Code or Section 406 of ERISA; (iii) that is organized under the laws of the United States or any State thereof; and (iv) that has capital in excess of $1,000,000,000, provided , however , that "Eligible Assignee" shall not include the Obligors, or any of the Obligors' Affiliates, financial sponsors or Subsidiaries.

" Eligible Factored Accounts " shall mean that portion of the Receivables Collateral consisting of Purchased Accounts actually owing to Borrower, as assignee of the Seller of such Purchased Accounts, by Account Debtors, subject to no known counterclaim, defense, setoff or deduction (other than setoff rights of the Government in the case of Government Purchased Accounts), excluding, however, in any event, but without limitation, any Purchased Account: (i) as to which Borrower is not in compliance with the provisions of Section 4.6 hereof; (ii) for which the Account Debtor has not remitted full payment to the Borrower within ninety (90) days past the date of purchase under any Factoring Agreement; (iii) which is owing by any Account Debtor which is an Affiliate of the Seller thereof, Borrower, any Subsidiary, any subsidiary of such Seller or any shareholders, directors or officers of such Seller, Borrower, any Subsidiary or any subsidiary of such Seller or is a Sanctioned Person; (iv) except as provided in Section 4.6, the assignment of which is subject to any requirements set forth in any Assignment of Claims Acts, unless such requirements have been satisfied in all respects to Agent's satisfaction; (v) which are Purchased Accounts then outstanding purchased from any one Seller that exceed 10% in the aggregate of all Eligible Factored Accounts, to the extent of such excess, unless otherwise approved by Agent; (vi) which is then owing by any single Account Debtor that would cause the total Eligible Factored Accounts then owing by such Account Debtor to exceed five percent (5%) of all Eligible Factored Accounts, to the extent of such excess, , unless otherwise approved by Agent; (vii) which is owing by an Account Debtor located outside the United States (other than Canada), unless it is secured by an irrevocable letter of credit, which letter of credit shall have been confirmed by a financial institution acceptable to Agent and shall be in form and substance acceptable to Agent and pledged to the Agent, for the ratable benefit of Lenders, and otherwise is payable in full in United States Dollars; (viii) which by its terms or by law may not be assigned or subjected to a Lien; (ix) as to which the services giving rise to such account have not been fully performed; (x) as to which any portion thereof is owing to any Person other than Borrower, as assignee of a Seller, whether as a result of a sale by Borrower of a participation in such account or otherwise, but only to the extent of such portion; (xi) which is the subject of a known contra-account because the Account Debtor under such Account is also Borrower's or the applicable Seller's creditor or supplier, to the extent of such contra-account; (xii) which is subject to any customer reserve or escrow, to the extent thereof; or (xiii) which has otherwise been excluded by Agent, which it reserves the right to do, in its sole discretion, for purposes hereof.

" Environmental Laws " means all federal, state, local and foreign laws now or hereafter in effect relating to pollution or protection of the environment, including laws relating to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment (including, without limitation, ambient air, surface water, ground water, or land), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, removal, transport, or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes, and all regulations, notices or demand letters issued, entered, promulgated or approved thereunder.

" Equipment " has the meaning given to such term in the UCC.

" ERISA " means the Employee Retirement Income Security Act of 1974, as in effect from time to time.

" Event of Default " means an event described in Section 10.1 .

" Excluded Taxes " has the meaning given to such term in Section 1.9 .

" Executive Order No. 13224 " means Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

" Factoring Agreements " shall mean, collectively, all factoring agreements, factoring and security agreements, assignments of accounts, agreements for the sale and assignment of accounts or billings and any other agreements pertaining to the purchase of accounts to which Borrower is a party with any Seller and pursuant to which Borrower purchases the accounts of any Seller.  " Factoring Agreement " shall mean, individually, any of the foregoing.

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

" Federal Funds Rate " means, for any period, a fluctuating interest rate per annum equal, for each day during such period, to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by Agent from three Federal Funds brokers of recognized standing selected by it.

" Financing Statements " has the meaning given to such term in the UCC.

" Fiscal Quarter " means a fiscal quarter of any Fiscal Year.

" Fiscal Year " means the fiscal year of Borrower that ends on the last day of December of each year.

" Fixed Charge Coverage Ratio " means, for any period, the ratio of (i) EBITDA minus Unfunded Capital Expenditures minus taxes actually paid by Borrower in cash minus distributions and dividends paid by Borrower in cash to (ii) Interest Expense of Parent and its Subsidiaries, plus scheduled principal payments on Indebtedness for Money Borrowed (other than payments on Revolving Loan Advances) made by Borrower, in each case for such period.

" Foreign Lender " means any Lender that is not a United States person, as such term is defined in Section 7701(a)(30) of the Internal Revenue Code.

" Fund " means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

" GAAP " means generally accepted accounting principles consistently applied and maintained throughout the period indicated and, when used with reference to Borrower or any Subsidiary of Borrower, consistent with the prior financial practices of Borrower.

" General Intangibles " has the meaning given to such term in the UCC.

" Government " shall mean the government of the United States or any political subdivision thereof, including, without limitation, any state, county or municipality thereof, together with any department, agency or instrumentality of any thereof.

" Governmental Approvals " means all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and reports to, all governmental bodies, whether federal, state, local or foreign national or provincial and all agencies thereof.

" Governmental Authority " means any federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body.

" Government Purchased Accounts " shall mean Purchased Accounts as to which the Government is the Account Debtor.

" Guarantor " or " Guarantors " means Parent, Brad Bernstein, Morry Rubin (or with respect to Brad Bernstein and Morry Rubin, a replacement Guarantor is acceptable to Agent in its sole discretion),  and each other Person guaranteeing to Agent, for the benefit of the Lender Group, all or part of the Obligations.

" Guaranty " or " Guaranties " means each of (a) that certain Limited Guaranty and that certain Validity Guaranty executed and delivered by Brad Bernstein, (b) that certain Limited Guaranty and that certain Validity Guaranty executed and delivered by  and Morry Rubin, (c) that certain Unlimited Guaranty executed and delivered by Parent, and (d) any other guaranty executed and delivered by a Guarantor, in each case in favor of Agent, for the benefit of the Lender Group, in each case in form and substance satisfactory to Agent.

" Highest Lawful Rate " means, at any given time during which any Obligations shall be outstanding hereunder, the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the indebtedness under this Agreement, under the laws of the State of Rhode Island (or the law of any other jurisdiction whose laws may be mandatorily applicable notwithstanding other provisions of this Agreement and the other Loan Documents), or under applicable federal laws that may presently or hereafter be in effect and which allow a higher maximum nonusurious interest rate than under the State of Rhode Island or such other jurisdiction's law, in any case after taking into account, to the extent permitted by applicable law, any and all relevant payments or charges under this Agreement and any other Loan Documents executed in connection herewith, and any available exemptions, exceptions and exclusions.

" Indebtedness " of any Person means, without duplication, all Liabilities of such Person, and to the extent not otherwise included in Liabilities, the following: (a) all obligations for Money Borrowed or for the deferred purchase price of property or services, (b) all obligations (including, during the noncancellable term of any lease in the nature of a title retention agreement, all future payment obligations under such lease discounted to their present value in accordance with GAAP) secured by any Lien to which any property or asset owned or held by such Person is subject, whether or not the obligation secured thereby shall have been assumed by such Person, (c) all obligations of other Persons which such Person has guaranteed, including, but not limited to, all obligations of such Person consisting of recourse liability with respect to accounts receivable sold or otherwise disposed of by such Person, and (d) in the case of Borrower (without duplication) all Obligations under the Loan Documents.

" Initial Term " means the three (3) year period commencing on the Agreement Date.

" Insolvency Proceeding " means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

" Installment " means, with respect to any obligation, each installment of rent under, or payment of (or in the nature of) principal of, such obligation that is stated or scheduled (in accordance with the terms of such obligation) to be due and payable.

" Intangible Assets " means, with respect to any Person, that portion of the book value of all of such Person's assets that would be treated as intangibles under GAAP.

" Interest Expense " means for any period as determined in conformity with GAAP, total interest expense, whether paid or accrued or due (including without limitation, in respect of the Loans and Subordinated Indebtedness, if any) and payable, including without limitation, the interest component of Capital Lease obligations for such period, all bank fees, and net costs under interest rate contracts.

" Interest Rate " means the LIBOR Rate, plus the Applicable Margin.

" Interested Party " means any employee, agent, owner, partner, member, or shareholder of Borrower.

" Internal Revenue Code " means the Internal Revenue Code of 1986, as in effect from time to time.

" Inventory " has the meaning given to such term in the UCC.

" Investment " means, with respect to any Person; (a) the acquisition or ownership by such Person of any share of capital stock, evidence of Indebtedness (which shall not include funds on deposit in demand deposit accounts) or other security issued by any other Person, (b) any loan, advance or extension of credit to, or contribution to the capital of, any other Person, excluding advances to employees in the ordinary course of business for business expenses, (c) the obligations of any other Person that are guaranteed by such Person, (d) any other investment in any other Person, and (e) any commitment or option to make any of the investments listed in clauses (a) through (d) above.

" Investment Property " has the meaning given to such term in the UCC.

" Lender " and " Lenders " have the respective meanings given to such terms in the preamble of this Agreement.

" Lender Group " means the Agent and each Lender.

" Letter-of-credit right " has the meaning given to such term in the UCC.

" Leverage Ratio " means, as of the last day of each calendar month, the ratio of (a) (i) Indebtedness of Parent and its Subsidiaries as of such day on a consolidated basis, minus (ii) Subordinated Indebtedness, if any, of Borrower as of such day to (b) (i) Adjusted Tangible Net Worth of Parent and its Subsidiaries as of such day  on a consolidated basis, plus (ii) Subordinated Indebtedness of Borrower as of such day.

" Liabilities " of any Person means all items (except for items of capital stock, additional paid-in capital or retained earnings, or of general contingency or deferred tax reserves) which in accordance with GAAP would be included in determining total liabilities as shown on the liability side of a balance sheet of such Person as at the date as of which Liabilities are to be determined.

" LIBOR Rate " means as of any date of determination during a calendar month, that rate for deposits in Dollars for a 30-day period which appears on Telerate page 3750 as of 11:00 a.m. (London time) on the first day of such calendar month.  If for any reason such rate is not available, the LIBOR Rate shall be the rate appearing on Reuters Screen LIBO Page as the London Interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London Time) on the first day of such calendar month for a 30-day period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates.  If for any reason none of the foregoing rates is available, the LIBOR Rate shall be the rate determined by Agent as the rate of interest at which Dollar deposits would be offered by the London branch of a major U.S. bank to major banks in the offshore Dollar market at their request at or about 11:00 a.m. (London Time) on the first day of such calendar month for a 30-day period.  Each determination by Agent of the LIBOR Rate shall, in the absence of any manifest error, be conclusive.

" Lien " as applied to the property of Borrower or any Person means: (a) any mortgage, deed to secure debt, deed of trust, lien, pledge, charge, lease constituting a Capitalized Lease, conditional sale or other title retention agreement, or other security interest, security title or encumbrance of any kind in respect of any property of such Person, or upon the income or profits therefrom, (b) any arrangement, express or implied, under which any property of such Person is transferred, sequestered or otherwise identified for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to the payment of the general, unsecured creditors of such Person, and (c) the filing of, or any agreement to give, any financing statement under the UCC or its equivalent in any jurisdiction, excluding informational financing statements relating to property leased by such Person.

" Loan Documents " means collectively this Agreement, any Revolving Notes, the Security Documents, the Credit Support Documents, and each other instrument, agreement or document executed by Borrower, any Guarantor, or any other Person in connection with this Agreement, whether prior to, on or after the Agreement Date.

" Loans " means, individually and collectively, a Revolving Loan Advance.

" Materially Adverse Effect " means a material adverse effect on (a) the business, assets, properties, financial condition, contingent liabilities or material agreements of Borrower and its Subsidiaries taken as a whole, (b) the value of the Collateral, (c) the Security Interest or the priority of the Security Interest, (d) the respective ability of Borrower or any other obligor to perform any material obligations under this Agreement or any other Loan Document, or (e) the rights of or benefits available to the Lender Group under, or the validity or enforceability of, any Loan Document.

" Maximum Credit " means the amount of $5,000,000; provided that Borrower may request that Agent and Lenders increase the Maximum Credit in two (2) increments of $5,000,000 each up to an amount not to exceed $15,000,000, which increases shall be requested by Borrower's delivery to Agent in respect of each such increase a Maximum Credit Increase Notice; and such increase shall be effective as of the effective date indicated in a conforming Maximum Credit Increase Notice unless prior to such proposed effective date Agent shall notify Borrower that Agent has determined that the Maximum Credit Increase Conditions are not satisfied.

" Maximum Credit Increase Conditions " means as of any date of determination: (a) no Default or Event of Default exists; (b) the Credit Guidelines have not been materially amended or modified without Agent's written consent; (c) Agent's determination that Borrower's provision of factoring services and the Factoring Documentation complies with the Credit Guidelines in all material respects; and (d) Agent shall have completed a satisfactory field examination of Borrower's books, records, Factoring Documentation, and such other matters as Agent may reasonably determine, within the last 60 days.

" Maximum Credit Increase Notice " means a written notice delivered to Agent requesting an increase in the Maximum Credit in the amount of $5,000,000 which notice shall designate an effective date for such increase that is no sooner than ten (10) Business Days from the date of such notice and include a certification from senior officers of Borrower that each of the Maximum Credit Increase Conditions is satisfied.

" Money Borrowed " means, as applied to Indebtedness, (a) Indebtedness for money borrowed, (b) Indebtedness, whether or not in any such case the same was for money borrowed, (i) represented by notes payable, and drafts accepted, that represent extensions of credit, (ii) constituting obligations evidenced by bonds, debentures, notes or similar instruments, or (iii) upon which interest charges are customarily paid or that was issued or assumed as full or partial payment for property (other than trade credit that is incurred in the ordinary course of business), (c) Indebtedness that constitutes a Capitalized Lease, and (d) Indebtedness that is such by virtue of clause (c) of the definition thereof, but only to the extent that the obligations guaranteed are obligations that would constitute Indebtedness for Money Borrowed.

" Monthly Purchased Accounts Turnover " means the number of days determined by multiplying the number of days in the applicable month by a fraction, the numerator of which is equal to the average of the unpaid balance of Purchased Accounts outstanding on the first day of such month and on the last day of such month, and the denominator of which is equal to the aggregate collections on all Purchased Accounts in such month.

" Net Income " means, as to any Person, the net income (or net loss) of such Person for the period in question after giving effect to deduction of or provision for all operating expenses, all taxes and reserves (including reserves for deferred taxes) and all other proper deductions, all determined in accordance with GAAP, provided that there shall be excluded: (a) the net income (or net loss) of any Person accrued prior to the date it becomes a Subsidiary of, or is merged into or consolidated with, the Person whose Net Income is being determined or a Subsidiary of such Person, (b) the net income (or net loss) of any Person in which the Person whose Net Income is being determined or any Subsidiary of such Person has an ownership interest, except, in the case of net income, to the extent that any such income has actually been received by such Person or such Subsidiary in the form of cash dividends or similar distributions, (c) any restoration of any contingency reserve, except to the extent that provision for such reserve was made out of income during such period, (d) any net gains or losses on the sale or other disposition, not in the ordinary course of business, of Investments, business units and other capital assets, provided that there shall also be excluded any related charges for taxes thereon, (e) any net gain arising from the collection of the proceeds of any insurance policy, (f) any write-up of any asset, and (g) any other extraordinary item (as determined by GAAP).

" Net Proceeds " means proceeds received by Borrower or any of its Subsidiaries in cash from any Asset Disposition (including, without limitation, payments under notes or other debt securities received in connection with any Asset Disposition), net of: (a) the transaction costs, fees and expenses of such sale, lease, transfer or other disposition; (b) any tax liability arising from such transaction; and (c) amounts applied to repayment of Indebtedness (other than the Obligations) secured by a Lien on the asset or property disposed.

" Non Government Purchased Accounts " shall mean all Purchased Accounts other than Government Purchased Accounts.

" Notice of Borrowing " means a telephonic or electronic notice followed by a confirming same-day written notice requesting a Borrowing, which is given by telex or facsimile transmission in accordance with the applicable provisions of this Agreement and which specifies (i) the amount of the requested Borrowing, and (ii) the date of the requested Borrowing.

" Obligations " means, in each case whether now in existence or hereafter arising, (a) the principal of, and interest and premium, if any, on, the Loans, and (b) all indebtedness, liabilities, obligations, covenants and duties of Borrower to the Lender Group of every kind, nature and description arising under this Agreement, or any of the other Loan Documents, or in connection with the Credit Facility, whether direct or indirect, absolute or contingent, due or not due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any note, and whether or not for the payment of money, including without limitation, fees and expenses required to be paid or reimbursed pursuant to this Agreement.

" Obligor " means Borrower and any Person who may now or in the future guaranty the payment and performance of the whole or any part of the Obligations.

" Other Taxes " has the meaning given to such term in Section 1.9(e) .

" Overadvance " means, as of any date of determination, the amount, if any, by which the outstanding principal balance of Revolving Loan Advances exceeds the Borrowing Base.

" Parent " means Anchor Funding Services, Inc., a Delaware corporation.

" Patriot Act " means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Publ. No. 107-56, 115 Stat. 272 (2001), as in effect from time to time.

" Payment Taxes " has the meaning given to such term in Section 1.9(a) .

" PBGC " means the Pension Benefit Guaranty Corporation and any successor agency.

" Permitted Discretion " means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

" Permitted Investments " means Investments of Borrower in: (a) Cash Equivalents; (b) the Purchased Accounts; (c) loans, advances or other extensions of credit to officers and employees not to exceed $50,000 in the aggregate outstanding at any time; (d) overadvance to Sellers not to exceed at any time $150,000 in the aggregate, and (e) other advances or extensions of credit made by Borrower not to exceed $100,000 in the aggregate outstanding at any time.

" Permitted Liens " means: (a) Liens securing taxes, assessments and other governmental charges or levies (excluding any Lien imposed pursuant to any of the provisions of ERISA) or the claims of materialmen, mechanics, carriers, warehousemen or landlords for labor, materials, supplies or rentals incurred in the ordinary course of business, but (i) in all cases only if payment shall not at the time be due and payable or as to which the period of grace related thereto has not expired or (ii) other than those being contested in good faith if adequate reserves are made in accordance with GAAP, (b) Liens consisting of deposits or pledges made in the ordinary course of business in connection with, or to secure payment of, obligations under workers' compensation, unemployment insurance or similar legislation or under payment or performance bonds, (c) other Liens on real property owned by Borrower in the nature of zoning restrictions, easements, and rights or restrictions of record on the use of real property, which do not materially detract from the value of such property or impair the use thereof in the business of Borrower, (d) purchase money Liens or Liens in connection with Capitalized Leases, (e) Liens shown on Schedule 6.5(a) , and (f) Liens of Agent arising under this Agreement and the other Loan Documents.

" Permitted Other Distributions " means cash dividends or distributions made from and after January 1, 2010 to the members of Borrower in an amount not to exceed $450,000 in the aggregate during any Fiscal Year of Borrower.

" Permitted Tax Distributions " means cash dividends or distributions to the members of a Borrower with respect to each taxable year during which such Borrower is treated as a partnership or ignored as an entity under the Code in an amount not to exceed the aggregate of the maximum federal and state income tax liability of the members of such Borrower (assuming that all of such members are taxed at the maximum permissible federal rate and the maximum permissible state rate applicable to the shareholder subject to the highest state rate) attributable to the taxable income of such Borrower for such taxable year, computed in accordance with the Code.

" Person " means any individual, limited liability company, corporation, partnership, association, trust or unincorporated organization, or a government or any agency or political subdivision thereof.

" Plan " means any employee benefit plan as defined in Section 3(3) of ERISA in respect of which Borrower or any Affiliate of Borrower is, or within the immediately preceding six years was, an "employer" as defined in Section 3(5) of ERISA.

" Pledge Agreements " means each of (a) that certain Pledge Agreement dated as of the Agreement Date pursuant to which Parent pledges all of its membership interests in Borrower, and (b) that certain Pledge Agreement dated as of the Agreement Date pursuant to which Borrower pledge all of its membership interests in its respective Subsidiaries, in each case in favor of Agent, for the benefit of the Lender Group, and in each case in form and substance satisfactory to Agent.

" Pro Rata Share " means with respect to all matters relating to any Lender, (a) with respect to the Revolving Loan Advances, the percentage obtained by dividing (i) the Revolving Credit Commitment of that Lender by (ii) the aggregate Revolving Credit Commitments of all Lenders and (b) with respect to all Revolving Loan Advances on and after the Termination Date, the percentage obtained by dividing (i) the aggregate outstanding principal balance of the Revolving Loan Advances held by that Lender, by (ii) the outstanding principal balance of the Revolving Loan Advances held by all Lenders.

" Purchased Accounts " shall mean all accounts purchased by Borrower under the Factoring Agreements and the bills of lading (if any) evidencing such accounts.

" Proprietary Rights " means all of Borrower's now owned and hereafter arising or acquired patents, patent applications, inventions and improvements, copyrights, copyright applications, literary rights, trademarks, trademark applications, trade names, trade secrets, service marks, data bases, computer software and software systems, including the source and object codes, information systems, discs, tapes, customer lists, telephone numbers, credit memoranda, goodwill, licenses, and other intangible property, and all other rights under any of the foregoing, all extensions, renewals, reissues, divisions, continuations, and continuations-in-part of any of the foregoing, all income, royalties, damages, claims and payments now or hereafter due and/or payable under or with respect thereto, including without limitation, damages and payments for past and future infringement thereof, all rights to sue for past, present and future infringement of any of the foregoing and all rights corresponding to any of the foregoing throughout the world.

" Receivables Collateral " means and includes, all whether now owned or hereafter acquired or arising, (a) any and all rights to the payment of money or other forms of consideration of any kind (whether classified under the UCC as Accounts, Contract Rights, Chattel Paper, General Intangibles, or otherwise) including, but not limited to, payments under the Purchased Accounts, Accounts, Letters-of-credit rights, chattel paper, tax refunds, insurance proceeds, Contract Rights, notes, drafts, instruments, documents, acceptances, and all other debts, obligations and liabilities in whatever form from any Person, (b) all rights of Borrower under the Factoring Documentation, including, without limitation, Borrower's collection rights against Sellers with respect to accounts not paid by the Account Debtors with respect thereto, (c) all bills of lading evidencing any of the foregoing, (d) all guarantees, security and Liens for payment thereof, (e) all goods, whether sold, delivered, undelivered, in transit or returned, which may be represented by, or the sale or lease of which may have given rise to, any such right to payment or other debt, obligation or liability, (f) all books, records, computer tapes, programs, and ledger books arising therefrom or relating thereto, and (g) all cash and non-cash proceeds, including insurance proceeds, of any of the foregoing.

" Reportable Event " has the meaning set forth in Section 4043(b) of ERISA, but shall not include a Reportable Event as to which the provision for thirty (30) days notice to the PBGC is waived under applicable regulations.

" Required Lenders " means, at any time, Lenders which are then in compliance with their obligations hereunder (as determined by Agent) and holding in the aggregate more than fifty percent (50)% of (a) the Revolving Credit Commitments or (b) if the Commitments have been terminated, the outstanding Loans and participation interests.

" Reserves " means reserves established against the amount of the Revolving Loan Advances which Agent in the exercise of its Permitted Discretion, deems necessary to ensure payment of the Obligations.

" Revenues " means all money, funds, cash, proceeds, or payments of any kind received by Borrower from all sources, including without limitation, all proceeds of Receivables Collateral and other Collateral, including Net Proceeds, insurance proceeds, and all proceeds from the Purchased Accounts and other Collateral, whether received in cash, by check, by other instrument, or otherwise.

" Revolving Credit Commitment " means, as to each Lender, the commitment of such Lender to make its pro rata portion of the Revolving Loan Advances in a principal amount up to such Lender's Revolving Credit Commitment Percentage of the Maximum Credit.

" Revolving Credit Commitment Percentage " means, for any Lender, the percentage identified as its Revolving Credit Commitment Percentage as of the Closing Date on Schedule R , as such percentage may be modified in connection with any assignment made in accordance with the provisions of Section 13.4 .

" Revolving Credit Facility " means that portion of the Credit Facility established under this Agreement consisting of the Revolving Loan Advances in an aggregate amount outstanding at any one time not to exceed the Revolving Credit Limit.

" Revolving Credit Limit " means the revolving credit facility established under this Agreement in an aggregate principal amount outstanding at any one time not to exceed the Maximum Credit in effect from time to time.

" Revolving Loan Advance " means a revolving loan made to Borrower pursuant to this Agreement and "Revolving Loan Advances" means more than one Revolving Loan Advance and, collectively, all Revolving Loan Advances.

" Revolving Note " or " Revolving Notes " means promissory notes issued by Borrower to Lenders that request such notes pursuant to Section 1.1(b) , substantially in the form of Exhibit C , as the same may be amended, restated, supplemented, or otherwise modified from time to time.

" Sanctioned Country " means a country subject to the sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/eotffc/ofac/sanctions /index.html or as otherwise published from time to time.

" Sanctioned Person " means (i) a Person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/eotffc/ofac/sdn/index.html or as otherwise published from time to time, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or (C) a Person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.

" Security " has the meaning given to such term in Section 2(1) of the Securities Act of 1933, as amended.

" Security Documents " means each of the following: (a) the Financing Statements, (b) the Pledge Agreements, (c) the Deposit Account Control Agreements, and (d) each other writing executed and delivered by Borrower or any other Obligor securing the Obligations or any part thereof.

" Security Interest " means the Liens of Agent, for the benefit of the Lender Group, on and in the Collateral created or affected hereby or by any of the Security Documents or pursuant to the terms hereof or thereof.

" Seller " shall mean any Person who sells accounts to Borrower under a Factoring Agreement.

" Subordinated Indebtedness " means any Indebtedness for Money Borrowed of Borrower that is expressly subordinated to the Obligations on terms and conditions acceptable to Agent in its Permitted Discretion.

" Subsidiary " means, (a) when used to determine the relationship of a Person to another Person, a Person of which an aggregate of fifty percent (50%) or more of the stock of any class or classes or fifty percent (50%) or more of other ownership interests is owned of record or beneficially by such other Person, or by one or more Subsidiaries of such other Person, or by such other Person and one or more Subsidiaries of such Person, (i) if the holders of such stock, or other ownership interests, (A) are ordinarily, in the absence of contingencies, entitled to vote for the election of a majority of the directors (or other individuals performing similar functions) of such Person, even though the right so to vote has been suspended by the happening of such a contingency, or (B) are entitled, as such holders, to vote for the election of a majority of the directors (or individuals performing similar functions) of such Person, whether or not the right so to vote exists by reason of the happening of a contingency, or (ii) in the case of such other ownership interests, if such ownership interests constitute a majority voting interest, and (b) when used with respect to a Plan, ERISA or a provision of the Internal Revenue Code pertaining to employee benefit plans, any other corporation, trade or business (whether or not incorporated) which is under common control with Borrower and is treated as a single employer with Borrower under Section 414(b) or (c) of the Internal Revenue Code and the regulations thereunder.

" Taxes " means any federal, state, local or foreign income, sales, use, transfer, payroll, personal, property, occupancy, franchise or other tax, levy, impost, fee, imposition, assessment or similar charge, together with any interest or penalties thereon.

" Termination Date " means the earliest to occur of: (a) the end of the Initial Term, or such later date as to which the same may be extended pursuant to the provisions of Section 1.6 , (b) such date as the Obligations shall have been accelerated pursuant to the provisions of Section 10.2 , or (c) such date as all Obligations shall have been indefeasibly paid in full and the Revolving Credit Facility shall have been terminated.

" Termination Event " means (a) a Reportable Event, or (b) the filing of a notice of intent to terminate a Plan, or the treatment of a Plan amendment as a termination, under Section 4041(c) of ERISA, or (c) the institution of proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, or (d) the appointment of a trustee to administer any Plan.

" Textron " has the meaning given to such term in the preamble of this Agreement.

" UCC " means the Uniform Commercial Code as in effect from time to time in the state of Rhode Island.

" Unfunded Capital Expenditures " means all Capital Expenditures, other than those Capital Expenditures that are financed with the proceeds of Indebtedness for Money Borrowed (other than Revolving Loan Advances).

" Unused Line Fee " means the fee required to be paid to Agent for the benefit of Lenders at the end of each calendar month, in arrears, as partial compensation for extending the Revolving Credit Facility to Borrower, and shall be determined by multiplying (a) the positive difference, if any, between (i) the Revolving Credit Limit in effect at such time and (ii) the average daily Revolving Loan Advances outstanding during such calendar month by (b) .375% per annum for the number of days in said calendar month.

General .  Unless otherwise defined, all terms used in this Agreement that are defined in the UCC shall have the meaning give them in the UCC.  All terms of an accounting nature not specifically defined in this Agreement shall have the meaning ascribed them by GAAP.  References to any legislation or statute or code, or to any provision thereof, shall include any modification or reenactment of, or any legislative, statutory or code provision substituted for, such legislation, statute or code or provision thereof.  The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to the Agreement as a whole and not to any particular provision of this Agreement, unless otherwise specifically provided.  References in this Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits of or to this Agreement unless otherwise specifically provided.  Any of the terms defined in this Section may, unless the context otherwise requires, be used in the singular or plural depending on the reference.  "Include", "includes" and "including" shall be deemed to be followed by "without limitation" whether or not they are in fact followed by such words or words of like import.  "Writing", "written" and comparable terms refer to printing, typing, computer disk, e-mail and other means of reproducing words in a visible form.  References to any agreement or contract are to such agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.  References to any Person include the successors and permitted assigns of such Person.  References "from" or "through" any date mean, unless otherwise specified, "from and including" or "through and including", respectively.

Agent shall give to each Lender prompt notice (but in no event later than 3:00 p.m. East Coast Time on the date of Agent's receipt of notice from Borrower) of each Notice of Borrowing by telecopy, telex or cable (other than any Notice of Borrowing which will be funded by Agent in accordance with subsection (b)(ii) below).  No later than 3:00 p.m. East Coast Time on the date which a Borrowing is requested to be made pursuant to the applicable Notice of Borrowing, each Lender will make available to Agent at the address of Agent set forth on the signature pages hereto, in immediately available funds, its Revolving Credit Commitment Percentage of such Borrowing requested to be made (unless such funding is to be made by Agent in accordance with subsection (b)(ii) below).  Unless Agent shall have been notified by any Lender prior to the date of Borrowing that such Lender does not intend to make available to Agent its portion of the Borrowing to be made on such date, Agent may assume that such Lender will make such amount available to Agent as required above and Agent may, in reliance upon such assumption, make available the amount of the Borrowing to be provided by such Lender.  Upon fulfillment of the conditions set forth in Article IX for such Borrowing, Agent will make such funds available to Borrower at the account specified by Borrower in such Notice of Borrowing.

(ii)           If the amounts described in subsection (b)(i) of this Section 1.2 are not in fact made available to Agent by a Lender (such Lender being hereinafter referred to as a " Defaulting Lender ") and Agent has made such amount available to Borrower, Agent shall be entitled to recover such corresponding amount on demand from such Defaulting Lender.  If such Defaulting Lender does not pay such corresponding amount forthwith upon Agent's demand therefor, Agent shall promptly notify Borrower and Borrower shall immediately (but in no event later than five (5) Business Days after such demand) pay such corresponding amount to Agent.  Agent shall also be entitled to recover from such Defaulting Lender and Borrower, (A) interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by Agent to Borrower to the date such corresponding amount is recovered by Agent, at a rate per annum equal to either (1) if paid by such Defaulting Lender, the overnight Federal Funds Rate or (2) if paid by Borrower, the then applicable rate of interest, calculated in accordance with Section 1.3 , plus (B) if paid by Defaulting Lender, an amount equal to any costs (including legal expenses) and losses incurred as a result of the failure of such Defaulting Lender to provide such amount as provided in this Agreement.  Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights that Borrower may have against any Lender as a result of any default by such Lender hereunder, including the right of Borrower or Agent to seek reimbursement from any Defaulting Lender for any amounts paid by Borrower under clause (B) above on account of such Defaulting Lender's default.

(iii)           The failure of any Lender to make the Loan to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Loan on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Loan to be made by such other Lender on the date of any Borrowing.

(iv)           Each Lender shall be entitled to earn interest at the then applicable rate of interest, calculated in accordance with this Article I , on outstanding Revolving Loan Advances which it has funded to Agent from the date such Lender funded such Revolving Loan Advance to, but excluding, the date on which such Lender is repaid with respect to such Revolving Loan Advance.

(v)           [Reserved.]

(vi)           Agent hereby is authorized by Borrower and Lenders, from time to time in Agent's Permitted Discretion unless Agent's authorization is revoked by the Required Lenders, (A) after the occurrence and during the continuance of a Default or an Event of Default, or (B) at any time that any of the other applicable conditions precedent set forth in Article IX have not been satisfied, to make Revolving Loan Advances to Borrower on behalf of Lenders that Agent, in its Permitted Discretion, deems necessary or desirable (x) to preserve or protect the Collateral, or any portion thereof, (y) to enhance the likelihood of repayment of the Obligations, or (z) to pay any other amount chargeable to Borrower pursuant to the terms of this Agreement, including the costs, fees, and expenses described in Section 13.7 (any of the Revolving Loan Advances described in this Section 1.2(b)(vii) shall be referred to as " Agent Advances ").  Each Agent Advance shall be deemed to be a Revolving Loan Advance hereunder and all payments thereon shall be payable to Agent solely for its own account.

(vii)           The Agent Advances shall be repayable on demand, secured by the Liens granted to Agent hereunder and under the other Loan Documents, constitute Obligations hereunder, and bear interest at the rate applicable from time to time to Revolving Loan Advances.

  At Agent's option, exercised in Agent's sole discretion, Agent may (a) deduct the aggregate amount of principal, interest, fees, costs, expenses, and other charges and amounts provided for in this Agreement or in any other Loan Documents from any Revolving Loan Advance on the due date thereof, (b) treat such amounts as a Revolving Loan Advance or (c) disburse such amount by way of direct payment, which such disbursement shall be deemed to be a Revolving Loan Advance.

FIRST, to the payment of all reasonable out of pocket costs and expenses (including reasonable attorneys' fees) of Agent in connection with enforcing the rights of Lenders under the Loan Documents and to any Agent Advances;

SECOND, to payment of any fees owed to Agent hereunder or under any other Loan Document;

THIRD, to the payment of all reasonable out-of-pocket costs and expenses, (including reasonable attorneys' fees) of each of the Lenders in connection with enforcing its rights under the Loan Documents;

FOURTH, to the payment of the outstanding principal amount of the Loans, pro rata, as set forth below;

FIFTH, to all other Obligations that shall have become due and payable under the Loan Documents and not repaid pursuant to clauses "FIRST" through "FOURTH" above; and

SIXTH, to the payment of the surplus, if any, to the Borrower or other Person lawfully entitled to received such surplus.

In carrying out the foregoing, each of the Lenders shall receive an amount equal to its pro rata share (based on the proportion of its outstanding amounts in each clause) of amounts available to be applied pursuant to clauses "THIRD", "FOURTH", and "FIFTH" above.

  Borrower shall make each payment hereunder and under the Revolving Notes not later than 1:00 pm East Coast Time on the day when due.  Payments made by Borrower shall be in Dollars to Agent at its address referred to in Section 13.6 in immediately available funds without deduction, withholding, setoff or counterclaim.  As soon as practicable after Agent receives payment from Borrower, but in no event later than one Business Day after such payment has been made, subject to Section 1.2(d)(ii) , Agent will cause to be distributed like funds relating to the payment of principal, interest, or fees (other than amounts payable to Agent to reimburse Agent for fees and expenses payable solely to them pursuant to Article II ) or expenses payable to Agent and Lenders in accordance with Section 13.7 ratably to Lenders, and like funds relating to the payment of any other amounts payable to such Lender.  Borrower's obligations to Lenders with respect to such payments shall be discharged by making such payments to Agent pursuant to this Section 1.7 or if not timely paid or any Event of Default then exists, may be added to the principal amount of the Revolving Loan Advances outstanding.

  Subject to Section 1.7 , if any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of setoff upon the consent of Agent) on account of the Loans made by it in excess of its pro rata share of such payment as provided in this Agreement, such Lender shall forthwith purchase from the other Lenders such participations in the Loans made by them as shall be necessary to cause such purchasing Lender to share the excess payment accruing to all Lenders in accordance with their respective ratable shares as provided for in this Agreement; provided , however , that if all or any portion of such excess is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and each such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender's ratable share (according to the proportion of (i) the amount of such Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) or any interest or other amount paid or payable by the purchasing Lender in respect to the total amount so recovered.  Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 1.8 may, to the fullest extent permitted by law, exercise all of its rights of payment (including the right of setoff upon the consent of Agent) with respect to such participation as fully as if such Lender were the direct creditor of Borrower in the amount of such participation.