Exhibit 4.10
FACTORING AGREEMENT
THIS FACTORING AGREEMENT is made and entered into this 29th day of July,
2004 by and between Universal Lease and Finance Corp., a Delaware corporation,
with its place of business located at 0000 X. Xxxxxxxx Xxxx, Xxxxx 000, Xxx
Xxxxx, Xxxxxx (the "Factor") and World Jet Corporation (the "Client"), a Nevada
corporation licensed to do business in Arizona and a wholly owned subsidiary of
Renegade Venture Corporation.
WITNESSETH:
WHEREAS, Client is engaged primarily in the airline parts business and
delivers such merchandise and/or service to customers on a credit basis; and
WHEREAS, Client desires to obtain funds for operation of its business
through the sale of accounts receivable acceptable to Factor; and
WHEREAS, Factor is willing to purchase Acceptable Accounts, as that term is
defined hereinafter, from Client according to the terms set forth in this
Agreement.
NOW, THEREFORE, in consideration of the covenants and conditions set forth
herein, and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Sale of Accounts Receivable. Client shall from time to time, at Clients
option, sell, transfer and assign all of its right, title, and interest in and
to Accounts to Factor, together with all moneys due or which may become due upon
such Accounts. Accounts shall be identified by separate and subsequent written
assignments on a form to be provided to Client by Factor; however, in the
absence of such separate written assignment, this Agreement shall be deemed to
evidence the assignment of such Accounts sold.
2. Approval. Factor shall not be obligated to purchase any Account from
Client; however, once an Account is submitted by Client and accepted by Factor,
Factor shall have the right. But not the obligation, to purchase all subsequent
Accounts relative to that Customer. Client shall submit each Account to Factor
for approval, which approval may be denied by Factor in its sole discretion,
with or without cause.
3. Purchase Price. Factor agrees to purchase Acceptable Accounts from
Client at a price equal to their face value less a fee as set forth in Section 4
below. The Purchase Price shall be payable (a) in an amount equal to eighty
percent (80%) of their face value upon acceptance and (b) in an amount equal to
twenty percent (20%) of their face value less Factor's Fee on or before the
fifth business day following the date upon which Factor has received payment in
full of the Accounts purchased (the "Settlement Date").
4. Collection. Upon collection by Factor of an Invoice Factor shall take
its fee. The fee earned by Factor for purchasing Accounts is a percent of the
face amount of the Accounts purchased and shall be taken at the time of
collection of an Invoice as follows:
(i) in up to 30 days Factor's fee is 2.25%; thereafter
(ii) in up to 45 days Factor's fee is 4.00%; thereafter
(iii) in up to 60 days Factor's fee is 5.75%; thereafter
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(iv) in up to 75 days Factor's fee is 7.50%; thereafter
(v) in up to 90 days Factor's fee is 9.25%; thereafter
(vi) in more than 90 days Factor's fee is 12.50%.
5. Submission of Accounts. When submitting Invoices on Acceptable Accounts
for possible purchase by Factor, Client shall forward to Factor the original and
one copy of each such Invoice, together with a copy of the xxxx of lading, proof
of delivery, contract or purchase order, and other documents satisfactory to
Factor and a properly executed Schedule of Accounts prepared on a form provided
by Factor.
6. Accepted Invoices. Factor shall advise Client of its acceptance or
rejection of a submitted Invoice within a reasonable time following receipt of
the items set out in the preceding paragraph (the "Accepted Invoice"). Upon
giving such notice, Factor shall have the right to:
a. Cover Client's address on all original Accepted Invoices and
statements of account mailed or to be mailed to customers and substitute thereon
the post office address or other mailing address of, or designated by, Factor
(the "Designated Address").
b. Receive and open all mail addressed to Client or to Client's trade
name at the Designated Address.
7. Recourse. Factor shall be entitled to immediate and full recourse
against Client and to demand payment with respect to an Account for the full
Purchase Price(s) paid therefor by the Factor plus the Factor's fee (the
"Recourse Amount"), when:
a. An Account or an Invoice or Invoices on an Account are not paid in
full by a customer when due or within ninety (90) days following date of
acceptance, whichever is less, regardless of the reason.
b. A credit problem, as defined hereinafter, arises, regardless of the
validity of any such problem.
c. A Credit Dispute, as defined hereinafter, arises, regardless of the
validity of any such dispute.
d. An invoice or Invoices are mailed or delivered to a customer by any
person or entity other than Factor.
e. Client breaches any warranty, representation or promise in this
Agreement, or when any representation or warranty made by Client is untrue.
f. Client contributes to or aggravates in any manner the credit
problems of a Customer.
g. A Customer alleges a claim of loss or offset of any kind against
Client or Factor, regardless of the validity of any such claim or offset.
h. A mistaken, incorrect and/or erroneous Invoice is submitted by
Client to Factor.
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i. Any circumstance arises which, in the Factor's sole discretion, may
delay, prevent or threaten to delay or prevent payment of the Account or
Invoice(s) on an Account in full to the Factor.
8. Remedies. Within three business days following Factor's demand for
payment, Client will pay Factor the full amount of any Account with respect to
which any one or more of the events set out in paragraph number 7 above has
occurred, regardless of the validity of any such event. If Factor does not
receive full payment therefor within the time provided herein, Factor shall
have, in addition to all other remedies provided for under this Agreement and by
law, the right to:
a. Withdraw from and off-set such amount to future Purchase Prices
coming due the Client, and to charge-back or sell back the Account to the
Client.
b. In its sole discretion, at any time, to notify any Account
debtor/customer of Client to make payments directly to Factor, irrespective of
whether such Account has been purchased by Factor.
9. Notice of Dispute. At the time Factor purchases an Account, no defense,
offset, or counterclaim shall exist with respect thereto. Client shall provide
written notice to Factor within twenty four hours of Client obtaining any
knowledge from any source of any dispute or disagreement of any kind between the
Client and a Customer. Factor shall have the right, but not the obligation, to
settle any dispute directly with any Customer; however, any such settlement
shall not relieve Client from responsibility for full payment of such Account.
10. Property of Factor. Upon Factor's purchase of an Account, any and all
payments from the Customer as to that Account are the sole property of Factor
and Client agrees not to interfere with payment thereof by the Customer;
however, should Client pay any such Account in full to Factor, or should any
such Account be charged back or sold back to Client by Factor, then title
thereto shall revest in Client.
11. Payments Received by Client. Client warrants and represents that at the
time Factor purchases an Account, no payment will have been made by the Customer
named therein, either to or for the benefit of the Client. In the event that
Client receives a payment which is the property of Factor, Client shall be
deemed to have received same in trust for Factor, and Client shall immediately
turn over such payment to Factor. In the event that Client receives a payment
which is comprised of monies belonging partially to Client and partially to
Factor, Client shall immediately turn over said payment, in its original form,
duly endorsed over, to Factor, and Factor shall, upon clearance by Factor's bank
of the payment instrument, forward a check to Client for Client's portion of the
payment.
12. Representations and Warranties of Client. Client hereby represents and
warrants that"
a. Client is a corporation, validly formed, existing, and in good
standing under the laws of the State of Arizona, and is properly licensed and
authorized to operate its business. Client's identification number for Federal
Income Tax purposes is 00-0000000 . The undersigned signatory on behalf of
Client represents that he or she has full power and authority to execute this
agreement and bind Client hereto.
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b. To the best of client's knowledge each Customer of Client is
solvent and Client has provided and will continue to provide to Factor all
documents and information available to Client concerning the business and
creditworthiness of each such Customer.
c. Client is not insolvent as that term is defined under the
Bankruptcy Law and the Uniform Commercial Code.
d. At the time of purchase of an Account by Factor, Client will be the
lawful owner thereof, with good and undisputed title thereto, free and clear of
any liens or encumbrances. Each Account shall represent an accurate and
undisputed statement of indebtedness owed to Client by a Customer for a sum
certain which is due and payable in 90 days or less, arising out of a bona fide
sale, delivery and acceptance of merchandise or performance of service by Client
to Customer in the ordinary course of Client's business, and no person, firm or
corporation shall have any lien on, or claim to, such accounts or to the
merchandise described thereon or any part thereof.
e. Client shall furnish Factor with full financial statements and
other documents and information, including but not limited to proof of payment
and/or compliance with all Federal, State and/or local tax requirements, as may
be reasonably requested by Factor from time to time.
f. Client shall notify Factor in writing immediately after obtaining
any knowledge from any source of the filing, recording or perfection by any
means of any non-consensual lien, claim, levy, attachment, encumbrance or other
court or legal proceeding or process against Client or any Customer, or against
any property of Client or of any Customer.
g. Client does not and will not in any manner, whether directly or
indirectly, own, control or exercise dominion over the business of any Account
debtor/Customer to be offered or sold by Client to Factor.
h. Each and every document, statement, record, book, account, and
invoice, and all information, whether financial or otherwise, provided to Factor
by client, whether heretofore or hereafter, shall be true, accurate and correct.
i. Client shall not, under any circumstances, interfere with Factor's
rights under this Agreement in any manner whatsoever.
j. Client will not sell, factor, or assign accounts except to Factor
during the term of this Agreement and/or for as long as any indebtedness
whatsoever remains owing by Client to Factor, and Client has not heretofore
sold, factored, assigned or encumbered any account or accounts which are or may
become subject to this Agreement.
k. Client has not and shall not transfer, assign, or pledge any of its
accounts, and shall not grant a security interest therein, to any party other
than Factor.
l. Client shall not later, modify, or extend in any manner the terms
of the original account with a customer, including but not limited to the
maximum credit limit or the
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time within which payment is to be made, without first obtaining Factor's
written consent to such change.
m. Client has not transferred, pledged or granted a security interest
in its assets, or any of them, which Client has not fully disclosed in writing
to Factor.
n. Client has not permitted and shall not permit any lien, encumbrance
or security interest to be created upon its assets, or any of them, including
but not limited to its accounts receivable, without the prior written consent of
Factor.
o. Client shall maintain its assets in good order and repair and shall
maintain a policy or policies of insurance thereon satisfactory to Factor.
p. Client shall not sell, assign, pledge or encumber this Agreement or
any rights whatsoever hereunder.
q. Client shall, immediately upon the sale of Accounts to Factor, make
a proper entry or entries on its books and records, fully disclosing the
absolute sale of said Accounts to Factor.
r. Client will maintain such insurance covering Client's business
and/or the property of Client's Customers as is customary for businesses similar
to the business of Client and, at the request of Factor, name Factor as loss
payee of such insurance.
s. Client will notify Factor in writing prior to any change in the
location of Client's place(s) of business, or, if Client has or intends to
acquire any additional place(s) of business, or prior to any change in Client's
chief executive office, the office or offices where Client's books and records
concerning accounts are located.
t. Client will immediately notify Factor in writing of any proposed
change of Client's name, identity, legal entity, corporate structure, use of
additional trade name(s), and/or any proposed change in any of the officers,
principals, partners, and/or owners of Client.
u. At the time of submitting Invoices on an Account to the Factor for
possible purchase, the Client will have paid all transportation and carrier
charges in full.
v. At all times prior to Notification of a Customer by Factor, as that
term is defined herein above, to be solely responsible, at its expense, for the
collection of all Accounts. Factor will keep Client informed with respect to
checks received on Accounts, and Factor shall have the right, but not the
obligation, to monitor and reasonably direct the collection efforts of Client in
order to increase the timeliness of payments.
w. Client represents and warrants to Factor that its performance under
any obligations to its Customers are not assured in any way by any payment or
performance bond.
x. Client represents and warrants that in the event any payments
purchased hereunder are not received by Factor when due that it shall exercise
such rights with respect to mechanics and/or artisans liens as shall be
available to Client under the laws of the State within which Client has rendered
performance to Customer and, to the fullest extent permitted by law, shall
assign all of such rights and/or remedies directly to Factor to be exercisable
by Factor in its sole discretion. To the fullest extent not directly exercisable
by Factor, Client agrees to exercise any and all such rights and remedies and to
assign and proceeds thereof directly to Factor.
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y. Client shall maintain its corporate existence and good standing in
its jurisdiction of incorporation and maintain its qualification in each
jurisdiction necessary to Client's business or operations.
z. Client shall give Factor at least 10 days prior written notice of
changes to its name, organization, chief executive office or location of
records.
aa. Client shall pay all its taxes including gross payroll,
withholding and sales taxes when due and will deliver satisfactory evidence of
payment if requested.
bb. Execute any further instruments and take further action as Factor
requests to perfect or continue Factor's security interest in the Collateral or
to effect the purposes of this Agreement.
13. Security. As a further inducement for Factor to enter into this
Agreement, Client hereby grants to Factor, as collateral for the payment or
repayment of any and all Client's obligations, a security interest under the
Uniform Commercial Code, in all of Client's presently existing or hereafter
arising, now owned or hereafter acquired Accounts. It is understood and agreed
that Factor will not release its security interest in any accounts receivable
until payment has been received on all such Accounts purchased.
14. Power of Attorney. In order to facilitate performance of this
Agreement, Client irrevocably appoints Factor, or any person(s) designated by
Factor, as its attorney in fact, which said appointment shall remain in full
force and effect until all Accounts sold to Factor have been paid in full and
all obligations of Client to Factor have been fully discharged, with full power
to:
a. Strike or cover Client's address on all Invoices and statements of
Account mailed or to be mailed to customers and to substitute thereon the
designated address.
b. Receive and open all mail addressed to Client, or to client's trade
name at Factor's address and the designated address.
c. Endorse the name of Client or Client's trade name on any checks or
other evidences of payment that come into Factor's possession on Accounts sold
to Factor by Client or on which Factor holds a security interest and on any
invoices or other documents relating to any of such Accounts, and deposit same
into any account of Factor, or such other account as Factor shall choose.
d. In Client's name, or otherwise, demand, xxx for, collect, and,
subject to Client's prior written approval, give releases for, any and all
monies due or coming due on accounts purchased by or pledged to Factor.
e. Compromise, settle, prosecute or defend any action, claim or
proceeding concerning accounts purchased by or pledged to Factor.
f. Set up a doing business as (d/b/a) with a name similar to Client's
and open bank accounts under such name.
g. Do any and all things reasonably necessary and proper to carry out
the purpose and intent of the Agreement.
15. Notice to Customers. Factor may place labels, stickers, or stamps on
the face of all invoices, bills, notices, statements, and shipping documents
relating to Accounts sold or pledged to Factor, advising that payments are to be
made directly to the Factor at the designated address.
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16. Inappropriate Payments. Should Factor receive a double payment on an
Account or other payment which Factor is incapable of identifying, Factor shall
carry these sums as open items and shall return them to Client or to the
Customer upon proof satisfactory to the Factor of the right thereto. If,
however, such proof is not received within six (6) months following Factor's
receipt of the payment, Factor shall have the right to consider such payments or
unidentified items as credits toward any outstanding obligations or indebtedness
of Client to Factor.
17. Maximum Amount. It is specifically understood and agreed that Accounts
purchased by Factor and not yet paid shall not exceed the total sum of two
hundred thousand dollars ($350,000) at any time.
18. Default. Any one or more of the following shall represent a default
under this Agreement:
a. The failure of client to pay any indebtedness to Factor when due.
b. The breach by Client of any term, provision, warranty,
representation or promise made hereunder or under any other agreement between
Factor and Client.
c. The appointment of a receiver or trustee of all or a substantial
portion of the assets of the Client, the insolvency of Client or the inability
of Client to pay debts as the mature, or an assignment by Client for the benefit
of creditors, or the voluntary or involuntary filing of a petition in bankruptcy
court or a similar proceeding in any court.
d. The filing or service of any levy, attachment, execution, tax
assessments or similar process affecting or which could threaten the Collateral.
e. The furnishing at any time to Factor of a materially false or
inaccurate document, representation, warranty, or other information, whether
financial or otherwise.
19. Remedies. In the event of a default, Factor shall have the right to do
the following, in addition to any other remedies provided hereunder or by law:
a. Declare any and all indebtedness secured hereby to be immediately
due and payable.
b. Enforce the security interest granted hereunder.
c. Require Client to assemble the Collateral and the records
pertaining to all accounts and produce them to Factor at such time and place as
Factor designates.
d. Enter the Client's premises and take possession of the Collateral
and of all records pertaining to the accounts and any other Collateral.
x. Xxxxx extensions, compromise claims and settle disputes with
respect to the accounts purchased by Factor, irrespective of the price of
methods of payment, all without prior notice to or permission of Client.
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f. In connection with the assembly and/or disposition of any
Collateral, to use any trademark, trade name, trade style, copyright, patent
right or technical process used or utilized by Client.
g. Return to Client any surplus realized and hold Client liable for
any deficiency as provided in the Uniform Commercial Code or by state law.
20. Confidentiality. Factor acknowledges that any knowledge or information
relating to Client is valuable, proprietary and confidential in nature, and
Factor agrees to maintain the confidentiality of such information.
21. Termination. Client hereby agrees that for a period of one year it may
only sell its accounts receivable to Factor under the terms and conditions of
this Agreement, should it decide to sell any. Should Client factor its accounts
with anyone other than Factor during this one year period Factor will be
entitled to liquidated damages of $7,500. After that point it shall continue
until terminated by thirty (30) days prior written notice by either party;
provided, however, that no such termination shall terminate or otherwise affect
Client's obligations hereunder incurred or accrued prior to such termination.
Following any termination, Client shall remain fully liable to Factor for any
Accounts purchased before such termination, and Factor will continue to hold a
security interest in Client's Accounts and other Collateral mentioned above
until all existing indebtedness of Client to Factor has been paid in full or
otherwise satisfied.
22. Definitions. The following terms shall have the following meanings when
used in this Agreement:
a. "Account" means any and all rights to receive payment for goods
sold or leased and delivered or for services rendered to a customer of client,
which is not evidenced by an instrument or chattel paper, as those terms are
defined in the Uniform Commercial Code.
b. "Acceptable Account" means an Account conforming to the warranties
and terms set forth herein, and otherwise acceptable to Factor.
c. "Accepted Invoice" means an Invoice on which Client has received
notice of acceptance from the Factor.
d. "Customer" means Client's Customer or account debtor.
e. "Collateral" means the tangible and intangible property given as
security for the obligations of Client under this Agreement.
f. "Credit Dispute" means a claim by Customer against Client of any
kind whatsoever that reduces the amount collectible from Customer by Factor,
arising from any kind of disagreement between Customer and Client whatsoever,
valid or invalid, at any time, both before and/or after the signing of this
Agreement or the purchase of the Account.
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g. "Credit Problem" means a customer is unable to pay his debts
because of insolvency, the filing of a voluntary petition in bankruptcy, the
quitting of business and the like.
h. "Invoice" means an invoice on an Acceptable Account, conforming to
the warranties and terms set forth herein, and otherwise acceptable to Factor.
i. "Invoice Amount" means the face amount, or face value, of an
Invoice; the total amount billed to the Customer.
j. "Purchase Price" means an amount equal to the Invoice Amount less
the Factor's Fee.
k. "Settlement Date" refers to the date on or before the 5th business
day following the date upon which Factor has received payment in full of the
Accounts purchased (the "Settlement Date").
l. "Warranty" means to guarantee, as a material element of this
Agreement. Each separate warranty herein is also an independent condition to
Factor's performance and duties under this Agreement.
23. Indemnification. Client shall indemnify and hold Factor harmless
against any and all liability, claim, demand, ill-will and damage arising from
Factor's collecting or attempting to collect any account, provided that Factor
has complied with all applicable laws in its collection efforts, and from the
failure of Client to pay withholding taxes due and payable to any taxing
authority, including all costs and reasonable attorneys' fee.
24. Miscellaneous.
a. Waivers. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein or and in any documents
delivered in connection herewith. No waiver by any party hereto of any right or
remedy shall be effective unless in writing and signed by the party waiving said
right or remedy. A waiver of a right or remedy under this Agreement is not a
waiver of the right or remedy on any subsequent occasion.
b. Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be delivered or mailed, by first class mail, postage prepaid, to the party
at the address set out hereinabove or to such other address as such party shall
have specified by notice in writing to the other party. Any such notice shall be
deemed to have been received on the date of actual receipt.
c. Sections and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretations of this Agreement.
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d. Governing Law. This agreement, and all transactions contemplated
hereby, shall be governed by, construed and enforced in accordance with the laws
of the State of Nevada. The parties herein waive trial by jury and agree to
submit to the personal jurisdiction and venue of a court of subject matter
jurisdiction located in Xxxxx County, State of Nevada. In the event that
litigation results from or arises out of this Agreement or the performance
hereof, the parties agree to reimburse the prevailing party's reasonable
attorney's fees, court costs, and all other expenses, whether or not taxable by
the court as costs, in addition to any other relief to which the prevailing
party may be entitled. In such event, no action shall be entertained by said
court or any court of competent jurisdiction if filed more than one year
subsequent to the date the cause(s) of action actually accrued regardless of
whether damages were otherwise as of said time calculable.
e. Successors and Assigns. This Agreement binds and is for the benefit
of successors and permitted assigns of each party. Borrower may not assign this
Agreement or any rights under it without Lender's prior written consent which
may be granted or withheld in Lender's discretion. Lender may, without the
consent of or notice to Borrower, sell, transfer, or grant participation in any
part of ender's obligations, rights or benefits under this Agreement.
f. Time of Essence. Time is of the essence for performance of all
obligations in this Agreement.
g. Severability of Provision. Each provision of this Agreement is
severable from every other provision in determining the enforceability of any
provision.
h. Amendments in Writing, Integration. All amendments to this
Agreement must be in writing. This Agreement is the entire agreement about this
subject matter and supersedes prior negotiations or agreements.
i. Survival. All covenants, representations and warranties made in
this Agreement continue in force while any Obligation remains outstanding.
Borrower's indemnification obligations survive until all statutes of limitations
for actions that may be brought against Lender have run.
j. Effective Date. This Agreement shall become effective upon
acceptance and execution hereof by Factor's authorized representative.
k. Reliance by Factor. All representations and warranties made by
Client herein and in the Application Form are true and correct and Client
acknowledges and understands that Factor has relied thereon in entering into
this Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed by each of the individual
parties hereto and signed by an officer thereunto duly authorized and attested
under the seal of the notary public hereto, if any, on the date and year set out
hereinafter.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF:
CLIENT: RENEGADE VENTURE (NEV.) CORPORATION
By:
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Xxxx Xxxxxx
President
State of ___________________
County of __________________
On, ___/___/___, before me, (Name & Title of Notary), personally appeared, and
and , to be the persons whose names are subscribed to the within instrument and
acknowledge to me that they executed the same in their authorized capacities and
that by their signatures on the instrument the persons executed the instrument.
WITNESS my hand and official seal.
(Notary Seal)
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Signature of Notary
FACTOR: UNIVERSAL LEASE AND FINANCE CORP.
By:
--------------------------------
Xxxxxxxx Xxxxx
CFO
State of ___________________
County of __________________
On, ___/___/___, before me, (Name & Title of Notary), personally appeared, and ,
to be the persons whose names are subscribed to the within instrument and
acknowledge to me that they executed the same in their authorized capacities and
that by their signatures on the instrument the persons executed the instrument.
WITNESS my hand and official seal.
(Notary Seal)
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Signature of Notary
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