FACTORING AND SECURITY AGREEMENT $75,000.00 FACTORING FACILITY
$75,000.00
FACTORING FACILITY
This
Factoring and Security Agreement, dated as of April 25, 2005 is between
World-Am, Inc, a Nevada corporation, (the "Client") and ▇.▇. ▇▇▇▇▇, LLC, a
Florida Limited Liability Company (the "Factor").
In
consideration of the respective promises, representations, warranties, covenants
and agreements contained herein, Client and Factor agree as
follows:
1. PURCHASE
AND SALE OF ACCOUNTS RECEIVABLE
| (a) |
Client
hereby sells, assigns, transfers, conveys and delivers to Factor,
and
Factor purchases and accepts from Client upon the terms and conditions
set
forth herein, all of Client's right, title and interest in and to
(i)
accounts receivable which are accepted for purchase by Factor as
described
in Section 1(b) accounts receivable which are created by Client,
which
Factor accepts and purchases them, are defined herein as "Accounts";
the
term "Accepted Accounts" is defined herein as Accounts which are
accepted
for purchase by Factor) and (ii) all guarantees and security for
Accepted
Accounts, and all merchandise or Client services represented by Accepted
Accounts, including all of Client's rights to returned goods and
rights of
stoppage in transit, replacement and reclamation as an unpaid vendor
(with
respect to each Accepted Account, such guarantees, security and rights
are
called "Rights").
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| (b) |
Client
shall submit Accounts to Factor, to be put on a schedule of accounts
("Schedule") in the form of Exhibit A. Factor is only obligated to
purchase Accounts when it accepts the Accounts by signing the Schedule;
any Accounts which are crossed out by Factor are not accepted for
purchase. Factor may refuse to purchase any Account for any reason
whatsoever, in Factor's sole discretion. It is hereby agreed and
understood that Factor may verify, with the Account Debtor (each
of the
terms "Account Debtor" and "Debtor" is defined herein as a customer
of
Client), the amount, validity, due date and absence of adjustments
and
offsets, of some or all of the Accounts prior to Factor' acceptance
of
such Accounts.
|
| (c) |
At
the time the Schedule is presented, Client shall also deliver to
Factor
the original and/or a copy of an invoice for each Account, together
with
evidence of shipment and the Account Debtor’s purchase
order.
|
| (d) |
Each
and every payment on each and every Accepted Account by an Account
Debtor,
or any other person or entity, is the sole property of
Factor.
|
| (e) |
Prior
to Factor's acceptance and purchase of any Account from a particular
Account Debtor, Client shall deliver to Factor an agreement in the
form of
Exhibit B hereto ("Customer
Agreement").
|
| (f) |
Invoices
should plainly state on their face that the amounts payable thereunder
have been assigned to and are payable to ▇.▇. ▇▇▇▇▇, LLC. C/O Island
Capital Management, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇,
▇▇,
▇▇▇▇▇ and billing on such invoice shall constitute an assignment
to ▇.▇.
▇▇▇▇▇, LLC. of the accounts thereby represented whether or not a
specific
written assignment was executed.
|
| (g) |
Upon
signing this Agreement, Client shall pay to Factor a one-time Factoring
and documentation origination fee $2,500 payable in equivalent free
trading stock and Warrants to purchase shares $25,000.00 of Clients
common
stock for a period of three years. The number of Warrants to be received
by Factor shall be determined by dividing $25,000 by the lesser of
a 20%
discount on the bid price on the day of execution or the lowest reported
bid price of the Clients common stock during a 365 day period following
the date of this agreement (the “Pricing Period”). If the Factor wishes to
exercise the warrants prior to the termination of the Pricing Period,
then
the number of warrants received will be calculated based on the lesser
of
the lowest reported bid price of the Clients Common Stock since the
date
of the agreement or a 20% discount on the bid price on the day of
execution. The warrants will have a cashless exercise provision.
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2. PURCHASE
PRICE.
The
Purchase Price (Advance) for each Accepted Account shall be equal to (i) the
face amount of such Accepted Account less (ii) the Commission, and less (iii)
the Factor's Fee (Discount), and less (iv) the amount of any trade or cash
discounts, credits or allowances, set-offs or any other reductions or
adjustments to such Accepted Account. The Commission for each Accepted Account
shall equal 2% of the face amount of the Accepted Account, and shall compensate
Factor for Factor's purchase and handling of the Accepted Account. The Factor's
Fee (Discount) compensates Factor or factor’s agent for Factor's administration,
monitoring, collection and reporting activities with respect to each Accepted
Account and shall be determined by the number of days from the date of Factor's
Initial Payment (as defined below) on the Accepted Account to Client to the
date
of Account Debtor's full payment of the Accepted Account to Factor as follows:
The
Discount of 5% shall be retained by The Factor from the collection of all
invoice payments set forth in each schedule. However, Client shall be entitled
to a rebate, regarding each transaction, for prompt payment of the invoices
by
said account debtors, as set forth in the REBATE TABLE below, provided Client
has not breached or violated this agreement or any other agreement between
Factor and Client. The Collection Periods set forth in the REBATE TABLE
correspond to the number of days from the date of each Initial Payment,
regarding each transaction, through and including the transaction closing date,
defined as the date upon which Factor shall receive the closing check (plus
three (3) business days to allow for check clearance), defined as the check
in
payment of the account listed on the schedule which shall result in the
aggregate moneys collected by Factor, regarding each transaction, being equal
to
or greater than the closing amount, defined as the sum of the Initial payment
plus the Discount less the Rebate, if applicable.
REBATE
TABLE
|
0
to 30 days
|
30
to 60 days
|
60
to 90 days
|
|
3%
|
2%
|
1%
|
Upon
purchase of an Accepted Account from Client, Factor shall make an initial
payment of the Purchase Price to Client ("Initial Payment") in the amount of
80%
of the face amount of such Accepted Account. The difference between the face
amount of an Accepted Account and the Initial Payment shall go into the Reserve
Account (as defined in Section 4 below). "Full payment" of an Accepted Account
by an Account Debtor shall occur when Factor receives a check for the full
amount of the Accepted Account from the Account Debtor and such check clears
and
becomes available for Factor's use.
Client
agrees to sell and assign to Factor a minimum of $20,000 of accounts receivable
for each month that this Agreement is in effect beginning with April 2005 and
if
such minimum isn't met, Factor will charge Client an amount equal to 1.25%
times
$20,000 less the actual amount of receivables sold for each such month, either
by charging the Reserve Account or invoicing Client. Client and Factor agree
that Client's right to terminate the Agreement pursuant to Section 11 is subject
to the minimums in this paragraph. Interest on any unpaid Accepted Account
will
accrue at 18% per annum calculated daily from the 121st
day
until full payment has been effected.
3. RECOURSE
PROVISIONS.
| (a) |
All
Accepted Accounts shall be purchased by Factor with recourse against
Client. The term "Recourse Event" shall include, without limitation,
the
following: (i) a breach of any representation or warranty or covenant
of
this Agreement by Client; (ii) the existence of any dispute of any
kind,
regardless of validity, now or hereafter arising, between Client
and an
Account Debtor, or between an Account Debtor and Factor, that is
asserted
by an Account Debtor as a basis for refusing to pay all or part of
any
Accepted Account ("Dispute"); (iii) the assertion by any Account
Debtor,
or by a bankruptcy trustee or any other party which is acting for
an
Account Debtor, of a claim of loss, counterclaim, refund, credit,
return
of goods, return of payment or offset of any kind against Client
or Factor
("Claim"); and (iv) non-payment by the Account Debtor of the full
amount
of any Accepted Account 121 days after the purchase of such Accepted
Account by Factor, or, if Factor believes, in Factor's sole judgment,
at
any time prior to such 121st day, that the Account Debtor may be
unable or
unwilling to pay any Accepted Account; Client and Factor hereby agree
that
any Accepted Account covered by clause (iv) is a "defective good".
Upon
the occurrence of any event described in clauses (i), (ii), (iii)
or (iv)
of the preceding sentence, Client will immediately pay to Factor,
on the
Accepted Account which is subject to the Recourse Event, the amount
of the
Initial Payment on the Accepted Account plus the Commission and Factor's
Fee on the Accepted Account calculated at the time of Client's payment.
If
Factor does not receive an immediate payment from Client, Factor
may, in
addition to any other remedies available to Factor under this Agreement,
immediately charge back to Client any Accepted Account which is subject
to
a Recourse Event by taking funds out of the Reserve Account, or
immediately exercise the remedies described in Section 10. With Factor's
agreement, Client may assign other accounts receivable which are
acceptable to Factor, in substitution for an Accepted Account which
is
subject to a Recourse Event.
|
|
(b)
|
Factor
may charge the Reserve Account with the amount of any Account Debtor
Repayment (as defined below). An "Account Debtor Repayment" shall
refer to
a payment made by Factor to an Account Debtor of Client to reimburse
the
Account Debtor for a payment theretofore made by the Account Debtor
to the
Factor other than on account of an Accepted
Account.
|
|
(c)
|
Client
shall notify Factor of any Recourse Event
immediately.
|
|
(d)
|
Factor
may settle any Dispute or Claim directly with Account Debtor; such
settlement does not relieve Client of final responsibility for payment
of
any such Accepted Account.
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4. RESERVE
ACCOUNT.
| (a) |
Factor
shall create and maintain at all times a reserve account ("Reserve
Account") for all Accepted Accounts. The reserve account will be
funded by
Client according to the schedule
below:
|
|
Factored
Balance
|
Funds
held in Reserve
|
|||
|
$0
- $20,000
|
$
|
2,000
|
||
|
$20,000
- $50,000
|
$
|
4,000
|
||
|
$50,000
- $75,000
|
$
|
6,000
|
||
Factor
may, in addition to any other remedies available to Factor under this Agreement,
charge back to Client by taking funds out of the Reserve Account, any amount
for
which Client may be obligated to Factor at any time; such amounts include (i)
any amounts which Client is obligated to pay Factor pursuant to the recourse
provisions of Section 3, (ii) any damages suffered by Factor as a result of
Client's breach of any provision of Section 5 hereof, (iii) any amount charged
back to Client pursuant to Section 10 hereof, (iv) any other offsets or
adjustments to any Accepted Account, and (v) reasonable attorneys fees and
disbursements related to any of the foregoing. If Factor receives payment on
an
Accepted Account from Account Debtor subsequent to the Accepted Account being
charged against the Reserve Account pursuant to the preceding sentence, Factor
will credit the Reserve Account by the amount of such payment.
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(b)
|
The
Reserve Account shall be calculated and maintained on a regular basis,
and
any funds which are credited by Factor to Client's Reserve Account
as a
result of collected invoices for Client, less all funds charged back
to
Client pursuant to this Section 4 ("Excess Reserve") shall be paid
to
Client weekly; provided, however, that Factor shall not be obligated
to
pay the Excess Reserve to Client if a Recourse Event or an Event
of
Default has occurred and is continuing. If Client shall cease selling
Accounts to Factor, Factor shall not pay the Reserve Account to Client
until all Accepted Accounts have been collected in full or charged
against
the Reserve Account, and all Commissions and Factor's Fees and other
sums
due Factor hereunder have been paid; if the Reserve Account has a
negative
balance after such collections, charges and fees, then Client shall
make
the applicable payment to Factor.
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| (c) |
Factor
may, at Factor's sole option and discretion, return payments for
Client's
account to the applicable account debtor, and deduct such items from
the
Reserve Account; Client shall then seek such payments from the applicable
account debtor.
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5. CLIENT'S
REPRESENTATIONS AND WARRANTIES.
Client
represents and warrants to Factor that:
|
(a)
|
Client
is the sole owner and holder of each and every Account and all related
Rights, and, upon Factor's purchase of any Account, Factor shall
become
the sole owner and holder of such Account and its related Rights;
and each
Account is free and clear of all liens, encumbrances, charges, security
interests, rights to purchase, or other claims of any kind or nature,
and
none of such Accounts have been previously sold or assigned to any
person
or entity;
|
|
(b)
|
There
are no financing statements now on file in any public office governing
any
property of Client of any kind, real or personal, in which Client
is named
in or has signed as the debtor, except the financing statement or
statements filed or to be filed with respect to this Agreement, or
those
statements now on file that have been disclosed in writing by Client
to
Factor. Client will not execute any financing statement in favor
of any
other person or entity, except Factor, during the term of this
Agreement;
|
|
(c)
|
The
full amount of each Account is due and owing to Client, and each
Account
is an accurate statement of a bona fide sale and delivery by Client
and
acceptance by an Account Debtor of merchandise or services. Each
Account
is due and payable within 90 days or less, and is not contingent
upon the
fulfillment by Client of any further performance of any
nature;
|
|
(d)
|
The
application ("Application") made by Client in connection with this
Agreement, and the statements made in such Application are true and
correct as of the time that this Agreement is
executed;
|
|
(e)
|
There
are no actions, suits, proceedings, attachment proceedings, orders,
or
arbitration proceedings, pending or threatened, at law or in equity,
against Client or any affiliate of Client or affecting the Accounts,
before any federal, state, municipal or other governmental court,
department, commission, board, agency or instrumentality. Client
will
immediately notify Factor if any matter described in the preceding
sentence arises; and
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| (f) |
Client
is a corporation duly organized, validly existing and in good standing
under the laws of Nevada. This Agreement and transactions contemplated
hereby have been duly authorized by all necessary action by
Client.
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6. AFFIRMATIVE
COVENANTS BY CLIENT.
Client
covenants and agrees that, from the date hereof and until termination of this
Agreement and payment in full of all Accepted Accounts to Factor, Client
will:
|
(a)
|
Pay
all taxes or fees in relation to the Accounts and all goods sold
or
services rendered which give rise to
Accounts;
|
|
(b)
|
Hold
in trust for Factor, and immediately notify and turn over to Factor,
any
payment on an Accepted Account whenever any such payment comes into
Client's possession, whether such payment is by cash, check (payable
to
Client, Factor or both), money order, credit card, debit card or
other
form of payment. Client shall also, where such payment is issued
to the
order of Client, immediately endorse the payment to the order of
Factor.
If Client comes into possession of a check or other payment which
consists
of payments owing to both Client and Factor (i.e. the payment covers
both
Accepted Accounts and Accounts which were not purchased by Factor
or other
amounts owing to Client from Account Debtor), Client shall immediately
endorse the check or other payment to Factor and turn it over to
Factor
who will then credit Client's portion to Client's Reserve Account.
Client
acknowledges that an Event of Default pursuant to Section 10 shall
have
occurred, and that Client will become subject to criminal prosecution
and
civil actions, if Client does not immediately turn over to Factor
each and
every payment on an Accepted Account which comes into Client's possession.
IN ADDITION, IF CLIENT DEPOSITS OR OTHERWISE NEGOTIATES A CHECK OR
OTHER
PAYMENT, OR ACCEPTS A CREDIT CARD OR DEBIT CARD PAYMENT, WHICH, BY
THE
TERMS OF THIS SECTION 6 (B), SHOULD HAVE BEEN TURNED OVER TO FACTOR,
CLIENT SHALL PAY FACTOR A MISDIRECTED PAYMENT FEE EQUAL TO 20% OF
THE
AMOUNT OF THE CHECK, CREDIT OR DEBIT CARD PAYMENT, OR OTHER
PAYMENT;
|
|
(c)
|
Not
factor, sell, transfer, pledge or give a security interest in any
of its
Accounts, other accounts receivable or other Collateral to any person
or
entity other than Factor;
|
|
(d)
|
Notify
Factor immediately if Account Debtor returns to Client any goods
giving
rise to an Accepted Account, and deliver such goods to Factor. Client
shall not intermingle such goods with Client's other property, as
the
goods are the property of Factor;
|
|
(e)
|
Client
shall not change its mailing address, principal place of business,
chief
executive office or its legal structure (i.e. from a proprietorship
to a
corporation, etc.), or merge with or acquire any other entity, or
be
acquired, without Factor's prior written
consent;
|
|
(f)
|
Immediately
notify Factor of (i) any development which would materially and adversely
affect the business, properties or financial condition of Client
or any
Account Debtor, the Accounts or the ability of Client to perform
its
obligations under this Agreement, and/or (ii) any actual or potential
insolvency of Client or any Account
Debtor;
|
| (g) |
Give
Factor not less than ten days prior written notice of any bankruptcy
filing by Client; and
|
|
(h)
|
Client
will provide to Factor monthly accounts receivable and accounts payable
agings and customer contact information, and proof of payment of
payroll
and other taxes, for the term of this
Agreement.
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7. SECURITY
INTEREST AND COLLATERAL
In
order
to secure the payment and performance of all obligations of Client to Factor,
whether presently existing or hereafter arising, Client hereby grants to Factor
a security interest in and lien upon all of Client's right, title and interest
in the Client's assets as follows, which include, without limitation, (i) the
Reserve Account and all payments (if any) due or to become due to Client from
the Reserve Account, and all other sums due from factors, and (ii) the proceeds
of any insurance policies covering any of the foregoing (collectively, the
"Collateral"). Client agrees to comply with all appropriate laws in order to
perfect Factor's security interest in and to the Collateral and to execute
and
deliver to Factor and/or file UCC-1 Financing Statements and any other financing
statement(s) or documents that Factor may require.
8. COLLECTION
OF ACCOUNTS.
Factor
shall have the sole and exclusive power and authority to collect ach Account,
through legal action or otherwise, and may, in its sole discretion, settle,
compromise or assign (in whole or in part) any Account, or otherwise exercise
any other right now existing or hereafter arising with respect to any Account.
Without Factor's prior written consent, Client shall not
(a)
attempt to collect any Account, (b) attempt to collect other non-factored
accounts receivable when Factor has unpaid Accepted Accounts from the same
Account Debtor, or (c) violate any of the terms of Exhibit B hereof with respect
to any applicable Account Debtor. Any violation of this Section 8 is an Event
of
Default hereunder.
9. POWER
OF
ATTORNEY.
Client
grants to Factor an irrevocable power of attorney authorizing and permitting
Factor, at its option, without notice to Client, to do any or all of the
following:
| (a) |
Endorse
the name of Client on any checks or other forms of payment whatsoever
that
may come into the possession of Factor regarding Accepted Accounts,
any
other accounts or Collateral;
|
| (b) |
Pay,
settle, compromise, prosecute or defend any Claim, Dispute, action,
or
other proceeding relating to Accepted Accounts or
Collateral;
|
| (c) |
To
extend the time of payment of any or all Accepted Accounts and to
make any
discounts, offsets, allowances or other adjustments with reference
thereto;
|
| (d) |
Execute
and file on behalf of Client any financing statement deemed necessary
or
appropriate by Factor to protect Factor's interest in and to the
Accepted
Accounts or Collateral, or under any provision of this Agreement;
and
|
| (e) |
To
do all things necessary and proper in order to carry out this
Agreement.
|
The
power
of attorney and authority granted to Factor herein is irrevocable until this
Agreement is terminated and all Accepted Accounts have been paid in full and
Client has satisfied in full all other obligations owed to Factor.
10. DEFAULTS
AND REMEDIES
| (a) |
An
event of default ("Event of Default") shall be deemed to have occurred
under this Agreement upon the happening of one or more of the
following:
|
| (A) |
Client
shall fail to pay as and when due any amount of money owed to
Factor;
|
| (B) |
There
shall be commenced by or against Client any voluntary or involuntary
case
under the federal Bankruptcy Code, or any assignment for the benefit
of
creditors, or any appointment of a receiver or custodian or trustee
for
any of Client's assets;
|
| (C) |
Client
shall become insolvent, or Client admits in writing its inability
to pay
its debts as they mature;
|
| (D) |
A
material and adverse change shall have occurred in Client's financial
condition, business or operations, or Factor, in Factor's sole discretion
deems its position insecure or determines that the Collateral has
lost
value;
|
| (E) |
Client
shall have a federal, state or local tax lien filed against any of
its
properties, or shall fail to pay any federal, state or local tax
when due,
or shall fail to file any federal, state or local tax form as and
when
due, or shall have a notice of seizure against it sent out by any
federal
or state taxing authority;
|
| (F) |
Any
check or other payment described in Section 6(b) comes into Client's
possession and Client does not immediately endorse and turn over
such
check or payment to Factor;
|
| (G) |
A
Recourse Event shall occur;
|
| (H) |
Client
shall stop selling and assigning new Accounts to Factor, or Factor
shall
stop purchasing new Accounts from
Client;
|
| (I) |
Client
violates any provision of Section 8 hereof;
or
|
| (J) |
Any
event described in Section 12(h) and/or Section 12(i)
occurs.
|
| (b) |
If
an Event of Default occurs, Factor may immediately exercise any and
all of
its rights and remedies with respect to Accounts and Collateral under
this
Agreement, the Uniform Commercial Code, and applicable law, which
rights
and remedies include, without limitation: (A) the right to declare
any
amount owed by Client to Factor immediately due and payable; (B)
enforcement of the security interest given hereunder pursuant to
the
Uniform Commercial Code or any other law; (C) entering the premises
of
Client and taking possession of the Collateral and of the records
pertaining to the Accounts and the Collateral; (D) granting extensions,
compromising claims and settling Accounts for less than face value,
without prior notice to Client; (E) collecting and depositing all
of
Client's accounts receivable, and the proceeds thereof, whether such
accounts were purchased by Factor or not, (F) retaining any surplus
realized from asset sales and holding Client liable for any deficiency
as
provided in the Uniform Commercial Code; and (G) without limiting
Factor's
rights pursuant to Sections 3 and 4, to charge back to Client any
and all
amounts or obligations owed by Client to Factor by taking funds out
of the
Reserve Account. Client shall also pay Factor immediately upon demand
for
all damages, costs and losses caused to Factor which are in any way
related to an Event of Default and/or Recourse Event, including,
without
limitation, all attorney's fees, court costs, disbursements, other
collection expenses and all other expenses and costs incurred or
paid by
Factor to obtain performance or to enforce any covenant or agreement
of
Client hereunder. In order to satisfy any amount owed by Client to
Factor
pursuant to this Agreement, Factor is hereby authorized by Client
to
initiate electronic debit or credit entries through the ACH system
to each
and every deposit account maintained by Client wherever such accounts
are
located.
|
11. TERM
| (a) |
This
Agreement shall become effective on the date hereof and shall continue
in
full force and effect for a period of one (1) year from the date
hereof
and will be automatically renewed for like periods thereafter, unless
terminated by Client as of any anniversary date, by Client giving
not less
than thirty (30) days prior written notice to Factor or unless terminated
by Factor at any time. Notwithstanding the foregoing, Client may
terminate
this Agreement early at any time by giving Factor not less than thirty
(30) days prior written notice, and Factor may terminate this Agreement
early at any time without notice should any Event of Default or Recourse
Event occur, provided that in either event, Client will be obligated
to
pay Factor in full for all amounts owing to Factor pursuant to this
Agreement and for an additional early termination fee equal to the
amounts
calculated pursuant to the second paragraph of Section 2 for each
and
every remaining month of the term. After termination of this Agreement
and/or termination of Factor's lien on the Collateral, Client shall
remain
fully responsible to Factor for any and all representations, warranties
and covenants contained herein, and for any asserted claims and/or
payment
demands described in Section 12(h) and/or Section 12(i) no matter
when
such demands arise.
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| (b) |
This
Agreement and all covenants, agreements, representations and warranties
made herein, shall survive the purchase by Factor of the Accounts
hereunder, and shall continue in full force and effect after termination
of this Agreement. Once this Agreement has been terminated and (i)
Factor
has received payment in full for all Accepted Accounts and all other
amounts owing to Factor pursuant to this Agreement, (ii) Client has
met
all obligations to Factor hereunder as of such time, and (iii) Client
executes and delivers a written release to Factor, in a form provided
by
and acceptable to Factor, releasing Factor from all liabilities hereunder,
then Factor shall promptly terminate Factor's lien on the
Collateral.
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12. MISCELLANEOUS
| (a) |
Client
shall pay Factor $20.00 for each wire transfer made by Factor to
Client,
$20.00 for each FedEx, $2.00 for each cashier's check, $5.22 for
each
certified piece of mail, standard postage rates for the mailing of
invoices, $28.00 for each Dun & Bradstreet report, all amounts billed
to Factor by Factor's lawyers in matters related to the Client, and
all
costs related to Factor's ongoing UCC and tax lien searches on Client;
provided, however that if Factor's cost for the preceding items increases,
Client shall also pay an additional amount equal to such
increase.
|
| (b) |
This
Agreement and the Exhibits and attachments hereto constitute the
entire
agreement between the parties pertaining to the subject matter contained
in it and supersede all prior and contemporaneous agreements, commitments,
negotiations and understandings of the parties. No supplement,
modification or amendment of this Agreement or any part thereof shall
be
binding unless executed in writing by both parties. This Agreement
may not
be assigned by Client without the prior written consent of Factor.
This
Agreement may be assigned by Factor without notice to or the consent
of
Client.
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| (c) |
All
rights, remedies and powers granted to Factor in this Agreement,
or in any
other instrument or document given by Client to Factor, are cumulative
and
may be exercised singularly or concurrently with such other rights
as
Factor may have. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of any other provisions,
whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by
the party
making the waiver.
|
| (d) |
Whenever
possible, each provision of this Agreement will be interpreted in
such a
manner as to be effective and valid under applicable law, but if
any
provision of this Agreement is held to be prohibited by or invalid
under
applicable law, such provision will be ineffective only to the extent
of
such prohibition or invalidity, without invalidating the remainder
of such
provision or the remaining provisions of this
Agreement.
|
| (e) |
Client
shall hold Factor harmless against any Customer ill will arising
from (i)
Factor's verification or collection of, or attempts to collect, any
Account, and/or (ii) any other actions of Factor pursuant to this
Agreement. Factor may cease attempts to collect any Accepted Account
at
any time.
|
| (f) |
All
notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed sufficiently given only if
served
personally on the party to whom notice is to be given, or sent by
facsimile (followed by a phone call which confirms receipt) or mailed
to
the party to whom notice is to be given, by first class mail, registered
or certified, postage prepaid, and properly addressed as
follows:
|
To
Client:
World-Am,
Inc
▇▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attn:
▇▇▇
▇▇▇▇▇▇▇▇▇
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
To
Factor:
▇.▇.
▇▇▇▇▇, LLC
C/O
Island Stock Transfer
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇▇▇▇▇▇
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
or
to
such other address as the party may have specified in a notice duly given to
the
other party as provided herein. Such notice or communication will be deemed
to
have been given as of the date so delivered or faxed (and confirmed) or three
days after the date so mailed.
| (g) |
This
Agreement and the legal relations between the parties shall be governed
by
and construed in accordance with the laws of the State of Florida
without
regard to principles of conflicts of laws otherwise applicable to
such
determinations. Client and Factor agree that any suit, action or
proceeding arising out of the subject matter hereof, or the
interpretation, performance or breach of this Agreement, shall, if
Factor
so elects, be instituted in any court sitting in Florida (the "Acceptable
Forums"). Client and Factor agree that the Acceptable Forums are
convenient to it, and each party irrevocably submits to the jurisdiction
of the Acceptable Forums, irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement, and waives any
and all
objections to jurisdiction or venue that it may have under the laws
of
Florida or otherwise in those courts in any such suit, action or
proceeding. Should such proceeding be initiated in any other forum,
Client
waives any right to oppose any motion or application made by Factor
as a
consequence of such proceeding having been commenced in a forum other
than
an Acceptable Forum.
|
| (h) |
If
an Account Debtor of Client files for or is forced into bankruptcy,
receivership or any other similar protection or status, and there
is the
possibility of a preference or other similar action or claim against
Factor by a trustee in bankruptcy, debtor in possession, receiver,
custodian or other party related to payments received by Factor,
then a
Recourse Event under this Agreement shall have occurred and, in addition
to other rights and remedies hereunder, then Factor may, at Factor's
option, hold or pay over to the trustee in bankruptcy, debtor in
possession, receiver, custodian or other party, Client's Reserve
Account
in an amount equal to the total amount of payments received by Factor
for
which there is a possibility of such a preference or other similar
action
or claim; and if Factor elects to hold such amount in the Reserve
Account,
Factor may continue to hold such amount until all applicable statutes
of
limitation for such preference or other similar actions or claims
have
expired. Furthermore, if a trustee in Bankruptcy, debtor in possession,
receiver, custodian or other party demands that any payment received
by
Factor be returned and/or given to such party or to a bankruptcy
estate,
then a Recourse Event under this Agreement shall have occurred and
Client
shall owe Factor any and all amounts demanded by such trustee in
bankruptcy, debtor in possession, receiver, custodian or other party,
and
Client shall pay such amounts to Factor immediately upon Factor's
demand.
Client also agrees to indemnify Factor and hold Factor harmless from
and
against any such preference or other similar action or claim, regardless
of whether such action or claim is brought during the term of this
Agreement or after termination of this Agreement. This Section (h)
shall
survive the termination of this Agreement and shall remain in effect
for
seven years after termination of this Agreement. (i) If Factor receives
a
payment from an Account Debtor and such Account Debtor demands that
the
payment be returned, for any reason whatsoever, then a Recourse Event
under this Agreement shall have occurred and Client shall owe Factor
any
and all amounts demanded by such Account Debtor, and Client shall
pay such
amounts to Factor immediately upon Factor's demand. In addition,
Client
agrees to indemnify and hold harmless Factor against any claims asserted
by any person or entity related in any way to the factoring relationship
or any payment made to Factor, whether or not such claims are asserted
before or after termination of this Agreement. This Section (i) shall
survive the termination of this Agreement and shall remain in effect
for
seven years after termination of this Agreement (j) Each of Client
and
Factor hereby (1) waive any right it may have to a jury trial, or
any
right to claim or recover in any litigation any special, exemplary,
punitive or consequential damages, or damages other than, or in addition
to, actual damages, plus interest and fees, and (2) acknowledge that
it
has been induced to enter into this Agreement and the transactions
contemplated hereby by, among other things, the mutual waivers contained
in this subsection.
|
IN
WITNESS WHEREOF, the parties to this Agreement have duly executed it as of
the
day and year first above written.
| FACTOR: | |||
| ▇.▇. ▇▇▇▇▇, LLC. | |||
| By: /s/ G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. | |||
|
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. |
|||
|
Title:
Partner
|
| CLIENT: | |||
| WORLD AM, INC. | |||
| By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||
|
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
|||
|
Title:
President and CEO
|