EXHIBIT 10.18
SECURITY AGREEMENT
This SECURITY AGREEMENT, made as of _______________________ ("Agreement), by and
between General Electric Capital Corporation, a New York corporation with an
address at 00 Xxx Xxxxxxxxx Xxxx , Xxxxxxx, XX 00000 ("Secured Party"), and
Internet Financial Services Inc a corporation, organized and existing under the
laws of the state of New York, with its chief executive offices located at 00
Xxxx 00xx Xxxxxx, Xxx Xxxx XX 00000 ("Customer").
In consideration of the promises herein contained and of certain other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Customer and Secured Party hereby agree as follows.
1. CREATION OF SECURITY INTEREST:
Customer hereby gives, grants and assigns to Secured Party, its successors and
assigns forever, a security interest in and against any and all property listed
on the collateral schedule annexed hereto or made a part hereof ("Collateral
Schedule"), and in and against any and all additions, attachments, accessories
and accessions thereto, any and all substitutions, replacements or exchanges
therefor, and any and all insurance and/or other proceeds thereof (all of the
foregoing being hereinafter individually and collectively referred to as the
"Collateral') The foregoing security Interest s given to secure the payment and
performance of any and all installments of rent, other amounts, obligations and
liabilities of any kind, nature or description whatsoever (whether due or to
become due) of Account Party to Secured Party under that certain Master Lease
Agreement identified on the Collateral Schedule ("Lease"), this Agreement and/or
any related documents (the Lease, this Agreement and all such related documents
being hereinafter collectively referred to as the "Transaction Documents"), and
any renewals, extensions and modifications of such debts, obligations and
liabilities (all of the foregoing being hereinafter referred to as the
"Indebtedness").
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ACCOUNT PARTY:
Customer hereby represents, warrants and covenants that: (a) Customer is, and
will remain, duly organized, existing and in good standing under the laws of the
State set forth in the first paragraph of this Agreement, has its chief
executive offices at the location set forth in such paragraph, and is, and will
remain, duly qualified and licensed in every jurisdiction wherever necessary to
carry on its business and operations; (b) Customer has adequate power and
capacity to enter into, and to perform its obligations, under each of the
Transaction Documents; (c) the Transaction Documents have been duly authorized,
executed and delivered by Customer and constitute legal, valid and binding
agreements enforceable under all applicable laws in accordance with their terms,
except to the extent that the enforcement of remedies may be limited under
applicable bankruptcy and insolvency laws, (d) no approval consent of
withholding of objections is required from any governmental authority or
instrumentality with respect to the entry into, or performance by. Customer of
any of the Transaction Documents, except such as may have already been obtained,
(e) the entry into and performance by Customer of the Transaction Documents will
not (i) violate any of the organizational documents of Customer or any judgment,
order, law or regulation applicable to Customer, or (ii) result ,in any breach
of, constitute a default under, or result in the creation of any lien, claim or
encumbrance on any of Customer's property (except for liens in favor of Secured
Party) pursuant to, any indenture mortgage, deed of trust, bank loan, credit
agreement, or other agreement or instrument to which Customer is a party, (f)
there are no suits or proceedings pending or threatened in court or before any
commission, board or other administrative agency against or affecting Customer
which could, in the aggregate, have a material adverse effect on Customer, its
business or operations, or its ability to perform its obligations under the
Transaction Documents, (g) all financial statements delivered to Secured Party
in connection with the Indebtedness have been prepared in accordance with
generally accepted accounting principles, and since the date of the most recent
financial statement, there has been no material adverse change, (h) the
Collateral is not, and will not be, used by Customer for personal, family or
household purposes, (I) the Collateral is, and will remain, in good condition
and repair and Customer will not be negligent in the care and use thereof; (j)
Customer is, and will remain, the sole and lawful owner, and in possession of.
the Collateral. and has the sole right and lawful authority to grant the
security interest described in this Agreement; and (k) the Collateral is, and
will remain, free and clear of all liens, claims and encumbrances of every kind,
nature and description (except for liens in favor of Secured Party)
3. COLLATERAL:
(a) Until the declaration of any default hereunder, Customer shall remain in
possession of the Collateral; provided, however, that Secured Party shall have
the right to possess (i) any chattel paper, document, certificate of title or
instrument that constitutes a part of the Collateral or possession of which may
be required to perfect Secured Party's interest in the Collateral, and (ii) any
other Collateral which because of its nature may require that Secured Party's
security interest therein be perfected by possession. Secured Party, its
successors and assigns, and their respective agents, shall have the right to
examine and inspect any of the Collateral at any time during normal business
hours. Upon any request from Secured Party, Customer shall provide Secured Party
with notice of the then current location of the Collateral (b) Customer shall
(i) use the Collateral only in its trade or business, (ii) maintain all of the
Collateral in good condition and working order, (iii) use and maintain the
Collateral only in compliance with all applicable laws, and (iv) keep all of the
Collateral free and clear of all liens, claims and encumbrances (except for
liens in favor of Secured Party). (c) Customer shall not, without the prior
written consent of Secured Party, (i) part with possession of any of the
Collateral (except to Secured Party or for maintenance and repair), (ii) remove
any of the Collateral from the continental United States, or (iii) sell, rent,
lease, mortgage, grant a security interest in or otherwise transfer or encumber
(except for liens in favor of Secured Party) any of the Collateral. (d) Customer
shall pay promptly when due all taxes, license fees, assessments and public and
private charges levied or assessed on any of the Collateral, on the use thereof,
or on this Agreement or any of the other Transaction Documents. At its option,
Secured Party may discharge taxes, liens, security Interests or other
encumbrances at any time levied or placed on the Collateral and may pay for the
maintenance, insurance and preservation of the Collateral or to effect
compliance with the terms of this Agreement or any of the other Transaction
Documents. Customer shall reimburse Secured Party, on demand, for any and all
costs and expenses incurred by Secured Party in connection therewith and agrees
that such reimbursement obligation shall be secured hereby (e) Customer shall,
at all times, keep accurate and complete records of the Collateral, and Secured
Party, its successors and assigns, and their respective agents, shall have the
right to examine, inspect, and make extracts from all of Customer's books and
records relating to the Collateral at any time during normal business hours (f)
Any third person at any time and from time to time holding all or any portion of
the Collateral shall be deemed to, and shall, hold the Collateral as the agent
of. and as pledge holder for, Secured Party. At any time and from time to time,
Secured Party may give notice to any third person holding all or any portion of
the Collateral that such third person is holding the Collateral as the agent of,
and as pledge holder for, the Secured Party.
4. INSURANCE:
The collateral shall at all times be held at Customer's risk, and Customer shall
keep it insured against loss or damage by fire and extended coverage perils,
theft burglary, and for any of all Collateral which are vehicles, for risk of
loss by collision, and where requested by Secured Party, against other risks as
required thereby, for the full replacement value thereof, with companies, in
amounts and under policies acceptable to Secured Party. Customer shall, if
Secured Party so requires, deliver to Secured Party policies or certificates of
insurance evidencing such coverage. Each policy shall name Secured Party as loss
payee thereunder, shall provide for coverage to Secured Party regardless of the
breach by Customer of any warranty or representation made therein, shall nor be
subject to co-insurance, and shall provide for thirty (30) days written notice
to Secured Party of the cancellation or material modification thereof. Customer
hereby appoints Secured Party as attorney in fact to make proof of loss, claim
for insurance and adjustments with insurers, and to execute or endorse all
documents, checks or drafts in connection with payments made as result of any
such insurance policies. Proceeds of insurance shall be applied, at the option
of Secured Party, to repair or replace the Collateral or to reduce any of the
Indebtedness secured hereby.
5. REPORTS:
(a) Customer shall promptly notify Secured Party in the event of (i) any change
in the name of Customer, (ii) any relocation, of its chief executive offices,
(iii) any relocation of any of the Collateral, (iv) any of the Collateral being
lost, stolen, missing, destroyed, materially damaged or worn out, or (v) any
lien, claim or encumbrance attaching or being made against any of the Collateral
(other than liens in favor of Secured Party) (b) Customer agrees to furnish its
annual financial statements and such interim statements as Secured Party may
require in form satisfactory to Secured Party. Any and all financial statements
submitted and to be submitted to Secured Party have and will have been prepared
on a basis of generally accepted accounting principles, and are and will be
complete and correct and fairly present Customer's financial condition as at the
date thereof. Secured Party may at any reasonable time examine the books and
records of Customer and make copies thereof.
6. FURTHER ASSURANCES:
(a) Customer shall, upon request of Secured Party, furnish to Secured Party such
further information, execute and deliver to Secured Party such documents and
instruments (including, without limitation, Uniform Commercial Code financing
statements) and do such other acts and things, as Secured Party may at any time
reasonably request relating to the perfection or protection of the security
interest created by this Agreement or for the purpose of carrying out the intent
of this Agreement. Without limiting the foregoing, Customer shall cooperate and
do all acts deemed necessary or advisable by Secured Party to continue in
Secured Party a perfected first security interest in the Collateral, and shall
obtain and furnish to Secured Party any subordinations, releases, landlord,
lessor, or mortgagee waivers, and similar documents as may be from time to time
requested by, and which are in form and substance satisfactory to, Secured Party
(b) Customer hereby grants to Secured Party the power to sign Customer's name
and generally to act on behalf of Customer to execute and file applications for
title, transfers of title, financing statements, notices of lien and other
documents pertaining to any or all of Collateral. Customer shall, if any
certificate of title be required or permitted by law for any of the Collateral,
obtain such certificate showing the lien hereof with respect to the Collateral
and promptly deliver same to Secured Party (c) Customer shall indemnify and
defend the Secured Party, its successors and assigns, and their respective
directors, officers and employees, from and against any and all claims, actions
and suits (including, without limitation, related attorneys' fees) of any kind,
nature or description whatsoever arising, directly or indirectly, in connection
with any of the Collateral
7. EVENTS OF DEFAULT:
Customer shall be in default under this Agreement and each of the other
Transaction Documents upon the occurrence of any of the following "Event(s) of
Default" (a) Customer fails to pay any installment or other amount due or coming
due under any of the Transaction Documents within ten (10) days after its due
date; (b) any attempt by Customer, without the prior written consent of Secured
Party, to sell, rent, lease, mortgage, grant a security interest in, or
otherwise transfer or encumber (except for liens in favor of Secured Party) any
of the Collateral; (c) Customer fails to procure, or maintain in effect at all
times, any of the insurance on the Collateral in accordance with Section 4 of
this Agreement, (d) Customer breaches any of its other obligations under any of
the Transaction Documents and fails to cure the same within thirty (30) days
after written notice thereof; (e) any warranty, representation or statement made
by Customer in any of the Transaction Documents or otherwise in connection with
any of the Indebtedness shall be false or misleading in any material respect;
(f) any of the Collateral being subjected to, or being threatened with,
attachment, execution, levy, seizure or confiscation in any legal proceeding or
otherwise; (g) any default by Customer under any other agreement between
Customer and Secured Party; (h) any dissolution, termination of existence,
merger, consolidation, change in controlling ownership, insolvency, or business
failure of Customer or any guarantor or other obligor for any of the
Indebtedness (collectively "Guarantor"), or if Customer or any Guarantor is a
natural person, any death or incompetency of Customer or such Guarantor, (i) the
appointment of a receiver for all or of any part of the property of Customer or
any Guarantor, or any assignment for the benefit of creditors by Customer or any
Guarantor, or (j) the filing of a petition by Customer or any Guarantor under
any bankruptcy, insolvency or similar law, or the filing of any such petition
against Customer or any Guarantor if the same is not dismissed within thirty
(30) days of such filing.
8. REMEDIES ON DEFAULT:
(a) Upon the occurrence of an Event of Default under this Agreement, the Secured
Party, at its option, may declare any or alt of the Indebtedness (including,
without limitation, the Lease) to be immediately due and payable, without demand
or notice to Customer or any Guarantor. The obligations and liabilities
accelerated thereby shall bear interest (both before and after any judgment)
until paid in full at the lower of eighteen percent (18%) per annum or the
maximum rate not prohibited by applicable law (b) Upon such declaration of
default, Secured Party shall have all of the rights and remedies of a Secured
Party under the Uniform Commercial Code, and under any other applicable law.
Without limiting the foregoing, Secured Party shall have the right to (i) notify
any Customer of Customer or any obligor on any instrument which constitutes part
of the Collateral to make payment to the Secured Party, (ii) with or without
legal process, enter any premises where the Collateral may be and take
possession and/or remove said Collateral from said premises. (iii) sell the
Collateral at public or private sale, in whole or in part, and have the right to
bid and purchase at said sale, and/or (iv) lease or otherwise dispose of all or
part of the Collateral, applying proceeds therefrom to the obligations then in
default. If requested by Secured Party, Customer shall promptly assemble the
Collateral and make it available to Secured Party at a place to be designated by
Secured Party which is reasonably convenient to both parties. Secured Party may
also render any or all of the Collateral unusable at the Customer's premises and
may dispose of such Collateral on such premises without liability for rent or
costs. Any notice which Secured Party is required to give to Customer under the
Uniform Commercial Code of the time and place of any public sale or the time
after which any private sale or other intended disposition of the Collateral is
to be made shall be deemed to constitute reasonable notice if such notice is
given to the last known address of Customer at least five (5) days prior to such
action. (c) Proceeds from any sale or lease or other disposition shall be
applied; first, to all costs of repossession, storage, and disposition including
without limitation attorneys', appraisers, and auctioneers fees, second. to
discharge the obligations then in default, third, to discharge any other
Indebtedness of Customer to Secured Party, whether as obligor, endorser,
guarantor, surety or indemnitor, fourth, or expenses incurred in paying or
settling liens and claims against the Collateral, and lastly, to Customer, if
there exists any surplus. Customer shall remain fully liable for any deficiency
(d) In the event that any of the Transaction Documents are placed in the hands
of an attorney for collection of money due or to become due or to obtain
performance of any provision hereof, Customer agrees to pay all reasonable
attorneys' fees incurred by Secured Party, and further agrees that payment of
such fees is secured hereunder. Customer and Secured Party agree that such fees
to the extent not in excess of twenty percent (20%) of subject amount owing
after default (if permitted by law, or such lesser sum as may otherwise be
permitted by law) shall be deemed reasonable. (e) Secured Party's rights and
remedies hereunder or otherwise arising are cumulative and may be exercised
singularly or concurrently. Neither the failure nor any delay on the part of the
Secured Party to exercise any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. Secured Party shall not be
required deemed to have waived any of its rights hereunder or under any other
agreement, instrument or paper signed by Customer unless such waiver be in
writing and signed by Secured Party. A waiver on any one occasion shall not be
construed as a bar to or waiver of any right or remedy on any future occasion.
CUSTOMER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS
AGREEMENT, ANY OF THE OTHER TRANSACTION DOCUMENTS, ANY OF THE INDEBTEDNESS
SECURED HEREBY, ANY DEALINGS BETWEEN CUSTOMER AND SECURED PARTY RELATING TO THE
SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN CUSTOMER AND SECURED PARTY. 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 STATUTORY
CLAIMS) THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS.
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION
OR ANY RELATED TRANSACTION IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
9. MISCELLANEOUS:
(a) This Agreement, the Lease and/or any of the other Transaction Documents may
be assigned, in whole or in part, by Secured Party without notice to Customer,
and Customer hereby waives any defense, counterclaim or cross-complaint by
Customer against any assignee, agreeing that Secured Party shall be solely'
responsible therefor. (b) All notices to be given in connection with this
Agreement shall be in writing, shall be addressed to the parties at their
respective addresses set forth herein above (unless and until a different
address may be specified in a written notice to the other party). and shall be
deemed given (i) on the date of receipt if delivered in hand or by facsimile
transmission, (ii) on the next business day after being sent by express mail,
and (iii) on the fourth business day after being sent by regular, registered or
certified mail. As used herein, the term "business day" shall mean and include
any day other than Saturdays, Sundays, or other days on which commercial banks
in New York, New York are required or authorized to be closed. (c) Secured Party
may correct patent errors herein and fill in all blanks herein or in the
Collateral Schedule consistent with the agreement of the parties. (d) Time is of
the essence hereof. This Agreement shall be binding, jointly and severally, upon
all parties described as the "Customer" and their respective heirs, executors,
representatives, successors and assigns, and shall inure to the benefit of
Secured Party, its successors and assigns (e) This Agreement and its Collateral
Schedule constitute the entire agreement between the parties with respect to the
subject matter hereof and supercede all prior understandings (whether written,
verbal or implied) with respect thereto. This Agreement and its Collateral
Schedule shall not be changed or terminated orally or by course of conduct, but
only by a writing signed by both parties hereto. Section headings contained in
this Agreement have been included for convenience only, and shall not affect the
construction or interpretation hereof (f) This Agreement shall continue in full
force and effect until all of the Indebtedness has been indefeasibly paid in
full to Secured Party. This Agreement shall automatically be reinstated in the
event that Secured Party is ever required to return or restore the payment of
all or any portion of the Indebtedness (all as though such payment had never
been made).
IN "WITNESS WHEREOF, Customer and Secured Party, intending to be legally bound
hereby, have duly executed this Agreement in one or more counterparts, each of
which shall be deemed to be an original, as of the day and year first aforesaid.
SECURED PARTY: CUSTOMER:
General Electric Capital Corporation Internet Financial Services Inc.
By: ____________________________ By: _________________________
Name: __________________________ Name: _______________________
Title: ____________________________ Title: _________________________
IN "WITNESS WHEREOF, Customer and Secured Party, intending to be legally bound
hereby, have duly executed this Agreement in one or more counterparts, each of
which shall be deemed to be an original, as of the day and year first aforesaid.
LESSOR: LESSEE:
General Electric Capital Corporation Internet Financial Services Inc.
By: ____________________________ By: _________________________
Name: __________________________ Name: _______________________
Title: ____________________________ Title: _________________________
