www.genesisny.net

Requirements For A Credit Facility

Three Alternatives To Providing This Credit Facility

Next Step In Providing A Credit Facility

Terms And Conditions For Credit Facility Backed By L/C Or A Surety Bond

Sample Term Sheet

Participant Irrevocable Letter Of Credit

Surety Bond

Project Pre-Approval Form

THREE ALTERNATIVES TO PROVIDING THIS CREDIT FACILITY

ALTERNATIVE 1

Issuance Of A Letter Of Credit Confirmed By A G-7 Bank

With Current Rates TBD

The Client provides a Letter of Credit confirmed by an investment rated G-7 bank. The Letter of Credit must be in the format as in EXHIBIT III. It must be payable in the United States and subject to United States Law. All fees and costs of obtaining the Letter of Credit are the responsibility of the borrower.

The entire program including issuance of funds can be accomplished in about 30-90 days following the receipt of the acceptable Letter of Credit. This program is designed for organizations that are strong financially and are paying significantly higher rates. The program and its requirements are discussed in more detail in Exhibit I attached.

ALTERNATIVE 2

Provide A Surety Bond Issued By A Investment Grade Insurance Company

If the Client is not in a position to obtain a Letter of Credit, a Surety Bond is acceptable. The Surety Bond must be in the format as described in Exhibit IV, attached, and issued by an Investment Grade Insurance Company (AA) such as Zurich, Allianz, AXA, AIG, USFG.

The Bond must be subject to the laws of the United States and must be enforceable in New York, NY. Fees and due diligence for providing the Surety Bond is of course the responsibility of the borrower.

The entire program including issuance of funds can be accomplished in about 30-90 days following the receipt of the acceptable Surety Bond.

ALTERNATIVE 3

Genesis Assists in Providing A Surety Bond

With Current Rates TBD

In cases where the client is not in a position to provide a Letter of Credit or a Surety Bond, Genesis can provide that assistance subject to review and analyses of the complete Project Package as described in NEXT STEPS. Fees and due diligence for providing the Surety Bond are of course the responsibility of the borrower.

Where such assistance is necessary to credit enhance the project, Genesis requires an Advisory Fee of $100,000 USD. In addition, client should have sufficient cash available to cover cost of due diligence which may cost upward of $100,000.

The entire program including issuance of funds can be accomplished in about 30-90 days following the receipt of the acceptable Surety Bond.

NEXT STEP IN PROVIDING A CREDIT FACILITY

1. Determine the Alternative, which is suitable for you.
2. Review the attached information and identify the Bank that you will be using for the Letter of Credit or the Insurance Company in case of the Surety Bond so that we can determine if these meet our requirements. Continue with step 4 below.
3. If you require assistance in obtaining a Surety Bond, please proceed as follows.
4. Complete the Project Pre-Approval Form, Exhibit V
5. Prepare a Letter of Intent addressed to Genesis Capital Management Group, Ltd., indicating:

• Request for financing and the complete identity of the borrower, name, address, Telephone/Fax, email
• Amount to be financed
• Use of the funds
• Identity of the Bank issuing the Letter of Credit or the Insurance Company issuing the Surety Bond to include contact name and title, address, telephone/fax
• Two page Executive Summary of the project
• Forward the complete Project Package to Genesis Capital Management Group, Ltd., consisting of the Letter of Intent, the Executive Summary and the Project Pre-Approval Form and any other pertinent information, business plan, etc., that is available.

1. Our fees will be determined after we have reviewed this information and assessed the amount of work required. We will communicate that to you in our Advisory Agreement.

EXHIBIT 1

TERMS AND CONDITIONS FOR CREDIT FACILITY

BACKED BY L/C OR A SURETY BOND

The credit facility program, which we have available, can range in size from $5 million and up and can be described as follows. The term is for one year at a time, renewable annually. Existing customers have been doing this for several years. Rates as described in the attached Term Sheet, Annex A. In addition there are fees due Genesis Capital Management Group Ltd., which will be determined upon complete review of all relevant information concerning the project.

The program requires the issuance of an Irrevocable Stand-by Letter of Credit for one year, rolling over for the duration of the loan, confirmation by a prime G7 bank, similar to Chase Manhattan, Citibank, Bank of New York. The Letter of Credit must be payable at the Bank’s counter in New York.

Alternatively we can accept a Surety Bond issued by an investment grade Insurance Carrier, renewable annually and rolling over for the duration of the loan. We can accept a Surety Bond that you provide, or, we can assist you in providing the Surety Bond.

The Letter of Credit or the Surety Bond must be in the form and content as in Exhibit III and Exhibit IV, attached herein.

The minimum amount is $5.0 million and larger amounts are readily available. Once documentation is completed and approved, funding can take place in about 30-90 days. Please note that this program can be used for any financing situation as long as the client can supply a Letter of Credit or a Surety Bond as described above.

A representative Term Sheet is presented in Exhibit II attached.

EXHIBIT II

SAMPLE TERM SHEET

GENESIS CAPITAL MANAGEMENT GROUP, LTD.

CREDIT FACILITY PROGRAM COSTS

Current Cost of Financing TBD %

One Time Advisory Fee payable at closing 5.00%

Escrow Balance 3.00%

In addition, an escrow account balance of 3% of the total amount borrowed is required at all times This account is held by Chase Bank, NY and pays the borrower interest on the unused portion. Interest and fees are deducted from this account and then billed to the borrower who must then absolutely replenish the escrow account 10 days after billing.

Borrower negotiates Local Bank Letter of Credit or Surety Bond charge separately.

FAILURE TO COMPLY WITH THESE TERM RESULTS IN A DEFAULT BY YOU AND CAUSES A COMPLETE DRAW DOWN OF THE LETTER OF CREDIT AND TOTAL PAYMENT OF THIS LOAN

EXHIBIT III

PARTICIPANT

IRREVOCABLE LETTER OF CREDIT DRAFT

No.

[DATE]

Bank of America NA

Attention: Investment banking

Dear Sirs:

We hereby establish, at the request and for the account of [Participant], (the "Participant"), in your favor our Irrevocable Letter of Credit No. in the amount of Dollars ($ ), effective immediately and expiring at the close of banking business at our principal banking office at [Address of Issuing Bank] on .

We hereby irrevocably authorize you to draw on us from time to time, in an aggregate amount not to exceed the amount of this Letter of Credit set forth above and in accordance with the terms and conditions and subject to the reductions in amount as hereinafter set forth, in one or more drawings by your drafts, drawn on our principal banking office at [Address of Issuing Bank] and payable at sight, each such draft accompanied by your written and completed certificate signed by one who states that he is a duly authorized officer of yours in substantially the form of Annex A attached hereto (such draft accompanied by such certificate being your "Draft").

Upon payment by us of any Draft, the amount of this Letter of Credit and the amounts available to be drawn by you by any subsequent Drafts shall be automatically decreased by an amount equal to the amount of such Draft.

All Drafts drawn under this Letter of Credit shall be marked "Drawn under Irrevocable Letter of Credit No. , dated , 19 , of [Issuing Bank]. Each such Draft shall be presented at our principal banking office located at [Address of Issuing Bank] or such other address as may be designated by us by written notice delivered to you. The Drafts and certificate required hereunder may be delivered to us in person, by mail, by delivery service, or by cable, telecopier, similar facsimile device or tested telex, answerback received, at such number as we shall notify you in writing from time to time; provided, however, that any Draft or certificate delivered by cable, telecopier, similar facsimile device or tested telex shall state your undertaking to cause the corresponding manually executed demand for payment to be physically delivered to us on the next succeeding Business Day. If we receive any of your Drafts at such office(s), all in strict conformity with the terms and conditions of this Letter of Credit, on or prior to the expiration date stated in the initial paragraph hereof, we will honor the same on presentation thereof by payment to you in same day funds no later than the third Business Day following receipt of such Drafts. "Business Day" means any day on which we are open for the purpose of conducting commercial banking business.

Upon the earliest of (i) our honoring your final Draft presented hereunder, (ii) the surrender to us by you of this Letter of Credit for cancellation, or (iii) the expiration date stated in the initial paragraph hereof, this Letter of Credit shall automatically terminate.

This Letter of Credit is transferable in its entirety to any transferee from you. Transfer of the available balance under this Letter of Credit to such transferee shall be effected by the presentation to us of this Letter of Credit accompanied by a certificate in substantially the form of Annex B attached hereto. Upon such presentation we shall forthwith issue an irrevocable letter of credit to your transferee, with provisions therein consistent with this Letter of Credit, in exchange for this Letter of Credit.

This Letter of Credit is subject to the Uniform Customers and Practice for Documentary Credits (1993 Revision) International Chamber of Commerce Publication No. 500 and any subsequent revisions thereof approved by a Congress of the International Chamber of Commerce and adhered to by us (the "UCP") and, except as to matters governed thereby, shall be governed by and construed in accordance with the laws of the State of [State of Principal Office of Issuing Bank]. Communications with respect to this Letter of Credit shall be in writing and shall be addressed to us at [Address of Issuing Bank, Attention: Name, Title], specifically referring to the number of this Letter of Credit.

This Letter of Credit sets forth in full our undertaking, and such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the Commercial Paper), except only the Drafts referred to herein and the UCP; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except for such Drafts and the UCP.

EXHIBIT lV

SURETY BOND DRAFT

No………… Amount: $_______________

KNOW ALL MEN BY THESE PRESENTS THAT [name of Participant], as Principal, hereinafter called the Principal, and [Insurance Company], a corporation created and existing under the laws of [jurisdiction of incorporation] and duly authorized to transact the business of Suretyship in [location of Participant], as Surety, hereinafter called the Surety, are held and firmly bound unto BANK OF AMERICA, N.A. (successor by merger to NationsBank of Texas, N.A.), hereinafter called the Obligee, in the amount of [Principal Amount to be Borrowed from VSA] Million U.S. Dollars ($____________________ USD) lawful money of the United States (the "Sum"), for the payment of which sum, well and truly to be made, the Principal and the Surety bind themselves, their heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents as follows:

We hereby jointly and severally unconditionally and irrevocably guaranty to the Obligee, subject only to the terms of this Surety Bond, all obligations due to the Obligee under the Reimbursement Agreement dated as of 20__ (the "Reimbursement Agreement"), as amended and extended from time to time among the Obligee _________________________, and certain Participants named therein (the "Guaranteed Obligations") and undertake to honor Obligee’s claims under this Surety Bond from time to time, in an aggregate amount not to exceed the Sum and in accordance with the terms and conditions and subject to the reductions in amount as hereinafter set forth, in one or more claims made at our principal office at [principal address of Surety], each such claim made by presentation of Obligee’s written and completed certificate signed by one who states that he or she is a duly authorized officer of Obligee in substantially the form of Annex A attached hereto (each, a "Claim").

Upon payment from time to time by us of any Claim, the amount of this Surety Bond and the amounts available to be drawn by you from time to time for any subsequent Claims shall be automatically decreased by an amount equal to the amount of such Claim.

The Claims required hereunder may be delivered to us in person, by mail, by delivery service, or by cable, telecopier, similar facsimile device or tested telex, answerback received, at such number as specified on Annex A, or such other number as we shall notify you in writing from time to time; provided, however, that any Claim or certificate delivered by cable, telecopier, similar facsimile device or tested telex shall state Obligee’s undertaking to cause the corresponding manually executed demand for payment to be physically delivered to us on the next succeeding Business Day. If we receive any of Obligee’s Claims at such office(s), all in strict conformity with the terms and conditions of this Surety Bond, on or prior to the expiration date stated in the following paragraph, we will honor the same on presentation thereof by payment to you in same day funds no later than the third Business Day following receipt of such Claims. "Business Day" means any day on which we are open for the purpose of conducting business.

Upon the earliest of (i) our honoring Obligee’s final Claim in the remaining amount of this Surety Bond presented hereunder, (ii) the surrender to us by you of this Surety Bond for cancellation, or (iii) the close of business on [__________ ___, 20__], this Surety Bond shall automatically terminate; provided, however, that this Surety Bond shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by the Obligee upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any obligor of the Guaranteed Obligations, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, only obligor on the Guaranteed Obligations or any substantial part of its property, or otherwise, all as though such payments had not been made.

This Surety Bond is transferable in its entirety to any transferee from you. Transfer of the available balance under this Surety Bond to such transferee shall be effected by the presentation to us of this Surety Bond accompanied by a certificate in substantially the form of Annex B attached hereto. Upon such presentation we shall forthwith issue an irrevocable Surety Bond for the then currently available amount to Obligee’s transferee, with provisions therein consistent with this Surety Bond, in exchange for this Surety Bond. No right of action shall accrue on this Surety Bond, to or for the use of, any person or corporation other than the Obligee named herein and any transferee as provided herein, or the heirs, executors, administrators or successors of the Obligee.

This Surety Bond sets forth in full our undertaking, and such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the Commercial Paper as defined in the above referenced Reimbursement Agreement), except only the Claims referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except for such Claims.

Each of the Principal and the Surety hereby waives and agrees not to assert any and all rights to require the Obligee to make demand on or to proceed against any person, party or security prior to the Obligee demanding payment under this Surety Bond.

Each of the Principal and the Surety shall remain obligated hereunder notwithstanding that, without any reservation of rights against the Principal or the Surety and without notice to or further assent by the Principal or the Surety, any demand for payment of any of the Guaranteed Obligations made by the Obligee may be rescinded by the Obligee and any of the Guaranteed Obligations continued, and the Guaranteed Obligations, or the liability of any other person or entity upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, restated, accelerated, compromised, waived, surrendered or released by the Obligee, and the Reimbursement Agreement, the other Operative Documents (as defined in the Reimbursement Agreement), and any other documents executed and delivered in connection therewith may be amended, modified, supplemented, restated, extended, renewed, or terminated, in whole or in part, as the Obligee may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Obligee for the payment of the Guaranteed Obligations may be sold, exchanged, waived, surrendered or released. The Obligee shall not have any obligation to protect, secure, perfect or insure any lien at any time held by it as security for the Guaranteed Obligations or any property subject thereto.

Each of the Principal and the Surety waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by the Obligee upon or acceptance of this Surety Bond; the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Surety Bond. Each of the Principal and the Surety waives diligence, presentment, protest, demand for payment, notice of acceleration or intent to accelerate, notice of default or nonpayment, and all other notices and demands to or upon the Obligee or any of the other obligors with respect to the Guaranteed Obligations. Each of the Principal and Surety understands and agrees that this Surety Bond shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of the Reimbursement Agreement, any other Operative Document, any of the Guaranteed Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Obligee, (b) any defense, set-off or counterclaim which may at any time be available to or be asserted by any other person or entity against the Obligee or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Principal or the Surety) which constitutes, or might be construed to constitute, an equitable or legal discharge of any obligor for the Guaranteed Obligations, or of Principal or the Surety under this Surety Bond, in bankruptcy or in any other instance.

No defenses, set-offs and counterclaims of any kind available to the Surety so as to deny payment of any amount due in respect of this Surety Bond shall be valid, and the Surety hereby waives and agrees not to assert any and all such defenses, set-offs and counterclaims, including, without limitation, any such rights acquired by subrogation, assignment or otherwise.

Notwithstanding any payment made by the Principal or the Surety hereunder or any set-off or application of funds of the Principal or the Surety by the Obligee, neither the Principal nor the Surety shall be entitled to be subrogated to any of the rights of the Obligee against any obligor on the Guaranteed Obligations or any collateral security or guarantee or right of offset held by the Obligee for the payment of the Guaranteed Obligations, nor shall the Principal or the Surety seek or be entitled to seek any contribution or reimbursement from any obligor on the Guaranteed Obligations in respect of payments made by such person hereunder, until all amounts owing to the Obligee on account of the Guaranteed Obligations are paid in full and the letter of credit issued by the Obligee under the Reimbursement Agreement is no longer outstanding. If any amount shall be paid to the Principal or the Surety on account of such subrogation rights at any time when all of the Guaranteed Obligations shall not have been paid in full, such amount shall be held by such person in trust for the Obligee, segregated from other funds of such person, and shall, forthwith upon receipt by such person, be turned over to the Obligee in the exact form received by such person (duly endorsed by such person to the Obligee, if required), to be applied against the Guaranteed Obligations, whether matured or unmatured, in such order as the Obligee may determine.

The obligations of the Surety under this Surety Bond are irrevocable, primary, absolute and unconditional and neither the failure of the Principal or any other person or entity to perform any covenant or obligation in favor of the Surety (or otherwise), nor the failure or omission to make a demand permitted hereunder, nor the commencement of any bankruptcy, debtor or other insolvency proceeding by or against the Obligee or any other person shall in any way affect or limit the Surety’s obligations under this Surety Bond. If an action or proceeding to enforce this Surety Bond is brought by the Obligee, the Obligee shall be entitled to recover from the Surety costs and expenses reasonably incurred, including, without limitation, reasonable fees and expenses of counsel.

Presentment under this Surety Bond shall be made at Surety’s offices located in the _______________ of _____________.

OBLIGEE MAY ENFORCE ANY CLAIM ARISING OUT OF THIS SURETY BOND IN ANY STATE OR FEDERAL COURT HAVING SUBJECT MATTER JURISDICTION AND LOCATED IN _______________, New York. for the purpose of any action or proceeding instituted with respect to any such claim, EACH OF PRINCIPAL AND SURETY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS. pRINCIPAL HEREBY IRREVOCABLY DESIGNATES _____________________, WITH OFFICES ON THE DATE HEREOF AT _____________________________________________________________________ TO RECEIVE FOR AND ON BEHALF OF PRINCIPAL, SERVICE OF PROCESS IN NEW YORK. SURETY HEREBY IRREVOCABLY DESIGNATES ________________________, WITH OFFICES ON THE DATE HEREOF AT ____________________________________ __________________ TO RECEIVE FOR AN ON BEHALF OF SURETY SERVICE OF PROCESS IN nEW yORK. eACH OF PRINCIPAL AND SURETY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF SAID COURTS BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO PRINCIPAL AND SURETY RESPECTIVELY, AND AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW, (I) SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT, ACTION OR PROCEEDING AND (II) SHALL BE TAKEN AND HELD TO BE VALID PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO IT. NOTHING HEREIN CONTAINED SHALL AFFECT THE RIGHT OF OBLIGEE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR PRECLUDE ANY SUCH PERSON FROM BRINGING AN ACTION OR PROCEEDING IN RESPECT HEREOF IN ANY OTHER COUNTRY, STATE OR PLACE HAVING JURISDICTION OVER SUCH ACTION. eACH OF PRINCIPAL AND SURETY HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT LOCATED IN _______________ , nEW YORK AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

THIS SURETY BOND SHALL BE GOVERNED BY, AND CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS OF ANY OTHER JURISDICTION.

IN WINESS WHEREOF, the Principal and the Surety have signed and sealed this Surety Bond this ______ day of __________, 20__.

SIGNED

In the presence of:

[name of Participant] (Principal)

Per:

Witness

Name:

Title:

[name of Surety]

Per:

Witness

Name:

Title:

EXHIBIT IV-A

CLAIM FORM

[Name, Address

Phone and Fax of

Surety]

The undersigned, a duly authorized officer of the undersigned Obligee (the "Obligee") of Surety Bond No. _________ (the "Surety Bond"), hereby certifies to [name of Surety] in regard to the Surety Bond that the Obligee is entitled to submit a Claim on the Surety Bond pursuant to the terms of the Reimbursement Agreement dated as of / / / , as amended from time to time, among the Obligee, , and certain Participants named therein. The amount of the Claim is [Amount of Claim]

and does not exceed the outstanding amount of the Surety Bond.

Immediately available funds in US dollars in the amount of the claim shall be transferred to the following account:

[Insert wire transfer instructions]

All terms not defined herein shall have their respective meanings as set forth in the Surety Bond.

IN WITNESS WHEREOF, the Obligee has executed and delivered this Certificate as of the _________ day of ______________, 20__.

EXHIBIT V

PROJECT PRE-APPROVAL FORM

PROJECT NAME:

PROJECT DESCRIPTION AND PARTICULARS:

 

INFORMATION ON PRINCIPAL BORROWING ENTITY

PRINCIPAL BORROWERS NAME(S):

REFERENCES ON PROJECT & PRINCIPALS

Bank References (2)

INSTITUTION:

COMPANY NAME:

CONTACT:

SIGNATURE:

TITLE:

Please note all information we request in this form will be kept in the strictest confidence.

COMPANY:

CONTACT:

PHONE:

FAX:

E-MAIL:

SS# OR TAX ID:

ADDRESS:

Comments:

INTERNAL USE ONLY

Reviewed & Forwarded To Genesis By:

System Input By: