LETTER OF CREDIT AGREEMENT
THIS LETTER OF CREDIT AGREEMENT, dated,____________________("Agreement"),
between Internet Financial Services Inc., a corporation organized and existing
under laws of the state of New York ( "Lessee") , and General Electric Capital
Corporation, a New York corporation ("Lessor")
RECITALS:
WHEREAS, Lessee desires to lease from Lessor certain equipment or other
(collectively, "Equipment") pursuant to a Master Lease Agreement dated as of
_____________ (said Master Lease Agreement together with all present and future
schedules thereto, as the same may be from time to time extended, amended,
restated or otherwise modified, being hereinafter collectively referred to as
the "Lease"); and
WHEREAS, Lessor is unwilling to lease the Equipment to Lessee unless
and until Lessee provides Lessor with certain additional assurances in the form
of a letter of credit as hereinafter described;
NOW, THEREFORE, in consideration of the above promises herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, do hereby agree as follows:
1. Concurrently with the execution of this Agreement, Lessee shall, at
its sole cost and expense as additional security for the prompt payment and
performance of all of its obligations (whether now existing or hereafter
arising) under the Lease, deliver or cause to be delivered to Lessor an
irrevocable standby letter of credit. ("Letter of Credit") which shall be (i) in
the amount of One Hundred Fifty-Five Thousand Six Hundred Four and 16/100 US
Dollars (US $155,604.16), (ii) issued by bank which is acceptable to Lessor in
its sole discretion, (iii) substantially in the form of Exhibit A attached
hereto (or in such other form as may be acceptable to Lessor in its sole
discretion), and (iv) for an initial of one year with automatic annual renewals
thereafter (without amendment except for extension of the then current expiry
date by an additional year) until Lessee has received written notice from Lessor
to the effect that the Letter of Credit is being released in its entirely. After
all of Lessee's obligations under the Lease have been indefeasibly paid and
performed in full, Lessor shall, upon the request of Lessee, release the Letter
of Credit and provide Lessee with written notice to that effect. If requested by
Lessor, the Letter of Credit shall, at Lessee's sole cost and expense, be
accompanied by an opinion of counsel regarding its due authorization, execution,
and enforceability (which opinion shall be in form and substance, and from
counsel, acceptable to Lessor in its sole discretion).
2. Lessee shall be in default under this Agreement and the Lease if for
any reason whatsoever: (a) Lessor fails to receive the Letter of Credit in the
time manner required herein; (b) the Letter of Credit is not automatically
renewed as required 1 hereof at least thirty (30) days prior to the expiry of
such Letter of Credit; (c) Lessor receives any notice to the effect that the
Letter of Credit will not be automatically renewed as required herein; (d)
Lessee otherwise breaches any of its obligations hereunder; or (e) Issuer fails
to comply with any terms, agreement or conditions of any Letter of Credit. The
foregoing events of default are in addition to, not in lieu of, those set forth
in the Lease.
3. Upon the occurrence of any default under this Agreement of the
Lease, or upon the filing of any petition by or against Lessee under any
bankruptcy, insolvency or similar laws, then in any such event and at any time
thereafter lessor shall have the right, with or without notice to or demand upon
Lessee, to draw upon the Letter of Credit, by presenting to issuer one or more
sight drafts and any other necessary documents, and to receive (in a lump sum or
in several sums from time to time at the sole discretion of Lessor) and retain
an amount not to exceed, in the aggregate, that available under the Letter of
Credit.
4. If Lessor draws on the Letter of Credit, the proceeds received by
Lessor therefrom shall be applied; first, towards costs and expenses (including,
without limitation, reasonable attorney's fees and disbursements) incurred by
Lessor in connection with such draw or in otherwise enforcing its rights and
remedies hereunder; second, towards any rent or other sums of any kind then due
and unpaid by Debtor under the Lease; the third, at Lessor's option either (I)
towards the Stipulated Loss Value calculated as provided in the Lease or (ii)
Lessor may hold any such proceeds as additional security (commingled with its
owns funds without any need to pay interest or income thereon) for any further
obligations of Lessee under Lease, including ,without limitation, any rent or
other sums of any kind that may become due under the Lease and /or the
Stipulated Loss Value calculated as provided in the Lease. Once all obligations
of Lessee under the Lease have been indefeasibly paid and performed in full, any
remaining excess proceeds from the Letter of Credit shall be remitted by Lessor
to Lessee. In any event, Lessee shall remain liable for any deficiency under
Lease.
5. Lessor's rights and remedies under this Agreement (including,
without limitation, the right to draw upon the Letter of Credit), the Lease or
otherwise are cumulative and may be exercised singularly or concurrently.
Neither any failure nor delay on the part of Lessor to draw upon the Letter of
Credit or to exercise any other rights or remedies shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
preclude any other or further exercise thereof or any other right or remedy
howsoever arising. Under no circumstances shall Lessor be deemed or construed to
have waived its right to draw upon the Letter of Credit or to exercise any of
its other rights or remedies unless such waiver of such right or remedy on any
future occasion or as a waiver of any other right or remedy,
6. LESSEE AND LESSOR HEREBY UNCONDITIONALLY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF OR IN CONNECTION WIH, DIRECTLY OR INDIRECTLY, THIS AGREEMENT, THE LETTER OF
CREDIT, THE LEASE, ANY DOCUMENTS RELATING HERETO OR THERETO, ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER HEREOF OR THEREOF, AND/OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN THEM. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT(INCLUDING,WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATORY CLAIMS). THIS WAIVER IS IRREVOCABLE
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORRALLY OR IN WRITING, AND SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS OF
THIS AGREEMENT, THE LETTER OF CREDIT, THE LEASE OR ANY DOCUMENTS RELATING HERETO
OR THERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO TRIAL BY THE COURT.
7. Any notices to be given in connection herewith shall be delivered in
the manner contemplated by the Lease. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof, and
supersedes all prior understandings (whether written, verbal, implied or
otherwise) with respect thereto. None of the terms hereof may be amended, waived
or otherwise modified except pursuant to a written instrument duly executed by
the party to be charged. Lessor may assign its rights hereunder at any time, but
Lessee may not do so without the prior written consent of Lessor. This Agreement
shall be binding upon, and shall inure to the benefit of, Lessor, Lessee, and
their respective successors and permitted assigns.
IN WITNESS WHEREOF, Lessee an Lessor have caused their duly authorized
representatives to execute and deliver this Agreement on the year and day first
above written.
LESSOR: LESSEE:
General Electric Capital Corporation Internet Financial Services Inc.
By: ____________________________ By: ____________________________
Name: __________________________ Name: __________________________
Title: _________________________ Title: _________________________
