Customer, but all at the cost and expense of the Customer. All merchandise returned by the purchasers thereof shall in any event immediately be redelivered to the Factors at the premises hereinabove mentioned and shall forthwith become subject to the lien of the Factors hereinbefore described.

7. For their services hereunder the Factors shall receive from the Customer a commission of___per cent. of the purchase price of all merchandise sold by the Customer during the period of this agreement and shall receive the same commission on sums paid on insurance covering any of the merchandise of the Customer. The Factors shall receive interest payable monthly at the rate of........per cent. per annum on the amount of the debit balance against the Customer as ascertained in the manner provided in Paragraph 8 hereof. Said interest shall be actually paid by the Customer to the Factors on the first day of each and every month for the preceding month. If, for any reason, such interest is not then paid by the Customer, the amount thereof shall be deemed to be a new advance by the Factors to the Customer and shall be charged to the Customer's account as such.

8. For the pin-pose of determining the amount which may from time to time be due from either party to the other, the Factors shall keep two accounts for the Customer, one to be known as the "Credit Account,' and the other to be known as the "Debit Account/' In the Credit Account there shall be entered (a) all sums received by the Factors in payment of accounts receivable resulting from the sale of the Customer's merchandise, and (b) any sums of money which the Customer may pay or cause to be paid to the Factors to be credited to the Customer's account. In the debit account there shall be entered the full face amount of

(a) All advances made by the Factors to the Customer,

(b) Commissions to which the Factors are entitled,

(c) Interest to which the Factors are entitled,

(d) Charges and expenses which the Customer is obligated to pay to the Factors, and outlays made by the Factors for the Customer's account.

(e) All other sums which the Customer may owe to the Factors either pursuant to the terms of this contract or otherwise. The Factors shall at least once in six months or more frequently if the Factors shall so desire, but not oftener than once in each month, render to the Customer a copy of the Customer's account as the same stands on the books of the Factors as of the close of business on the last day of the preceding month. Each of said accounts so rendered by the Factors to the Customer shall become an account stated between the parties hereto, if not objected to in writing by the Customer within fifteen days of the rendition thereof. Whenever the Customer's account shall show a credit balance in favor of the Customer, the amount of such balance shall be paid by the Factors to the Customer on the fifteenth of the next ensuing month, if the Customer shall so demand. Whenever the Customer's account shall show a debit balance of more than......

per cent. of the inventory value of the merchandise subject to the Factors' lien, plus......per cent. of outstanding assigned accounts or more than $................on the security of merchandise or more than $ the aggregate the excess shall be paid by the Customer to the Factors on demand.

9. The Customer agrees to procure burglary, fire and sprinkler insurance on all of its merchandise for the benefit of and in companies satisfactory to the Factors and to deliver the policies to the Factors and also to procure floating insurance covering merchandise while in transit to purchasers thereof or from purchasers thereof in case of merchandise rejected or returned by such purchasers, the Factors shall be under no liability whatever for loss of or damage to the merchandise of the Customer due to any cause whatever, no matter to whose fault such damage or loss may be due. The Customer agrees to pay all the expenses of its business whatsoever and if the Factors incur any expense in connection with the Customer's business the amount thereof shall be charged to the Customer.

10. The Customer agrees that the Factors may, if they so desire, file a notice of lien as provided for by Section 45 of the Personal Property Law of the State of New York.

11. The Customer agrees:

(a) To use its best efforts to sell the merchandise consigned to the Factors at prevailing market prices to responsible purchasers and to devote all of its time and attention to the business of buying and selling said merchandise

(b) Not to consign any merchandise manufactured or purchased by it to any person, firm or corporation other than the Factors and not to pledge, mortgage or create any lien whatever other than the lien of the Factors on any merchandise manufactured or purchased by it, or on any accounts receivable resulting from the sale thereof.

(c) Not to sell any merchandise except through the Factors as herein provided.

(d) Not to pledge the credit of the Factors it being distinctly agreed and understood that the Customer has no right to sell any goods or make any contract whatever on behalf of the Factors.

(e) To indemnify the Factors against and hold them harmless from any and all liability which may be imposed upon them through any act, default or omission on the part of the Customer, or any of the Customer's employees or agents, and to reimburse the Factors for any expense they may incur in defending claims preferred against them because of any such alleged act, default or omission whether such claims are valid or not.

(f) Not to enter into any contracts or send out any bills, invoices or statements except on forms approved by the Factors.

(g) To notify the Factors immediately of any merchandise consigned to the Factors, and also to notify the Factors immediately upon contracting to sell any merchandise of the terms of such contract, the name and address of the purchaser and if such contract is in writing or is evidenced by a written order, to furnish to the Factors copies of such contract or order.