The Bank of N.T. Xxxxxxxxxxx & Son Ltd. Page 1
--------------------------------------------------------------------------------
APPLICATION TO OPEN AN IRREVOCABLE STANDBY LETTER OF CREDIT
--------------------------------------------------------------------------------
Bank Reference Number:
Please open by ( ) airmail ( ) telex (X) SWIFT an irrevocable Credit as follows:
--------------------------------------------------------------------------------
Beneficiary's name and full address: Applicant's name and full address:
The Chase Manhattan Bank Consolidated American Rental Insurance
000 Xxxxxxx Xxxxxx Xx., Xxx.
Ground Floor X.X. Xxxxx Building
New York, NY 10017 00 Xxxxxx Xxxxxx
X.X.X. X.X. Box HM 1995
Xxxxxxxx XX HX, Bermuda
Attention: Xxxxx X. Xxxxxxx J. Xxxxxx Xxxxxxxx
--------------------------------------------------------------------------------
Expiry Date: Amount (in figures and words):
March 31st, 1998 US$250,000
Two hundred and fifty thousand dollars
--------------------------------------------------------------------------------
Available by drafts at (X) sight, (X)____ days sight, ( )____ days from date of
_____________________ accompanied by:
( ) Any documents required (should clearly reflect beneficiary's right or reason
for drawing).
See attached draft.
--------------------------------------------------------------------------------
Special Conditions (Specify):
The Bank of N.T. Xxxxxxxxxxx & Son Ltd. Page 2
--------------------------------------------------------------------------------
SUPPLEMENTARY INFORMATION TO ACCOMPANY APPLICATION
--------------------------------------------------------------------------------
1. The name and telephone number of the person in your organization most
familiar with this application.
X. Xxxxxx Xxxxxxxx Tel: (000) 000 0000
---------------------------------------------------------------------------
2. The effective date of the Letter of Credit: As soon as possible
--------------------------------
3. Brief details of the transaction of which the Credit forms part (e.g. to
secure reinsurance obligations to ceding insurer).
LOC to be issued to Chase to back up their securing of Obligations of an
---------------------------------------------------------------------------
AIG Group ceding insurer.
---------------------------------------------------------------------------
4. Is the Credit required in connection with the usual business operations of
the Applicant? (e.g. insurance).
Yes.
---------------------------------------------------------------------------
5. What is the name of the Applicant's parent company or the names of any
person or company holding 10% or more of any class of stock in the company?
Rent-A-Wreck of America, Inc.
---------------------------------------------------------------------------
Yes No
6. If the Applicant is a corporation, have you attached the following
documents? (please check)
a. Certified copy Resolution of the Board of Directors under seal authorizing
named directors/officers or other persons to negotiate the Credit(s) and
execute the security document(s) (X) ( )
b. Fully completed Application to open an irrevocable Standby Letter of
Credit. (X) ( )
c. Letter of Set-Off, Collateral Deposit Agreement, or other security
document(s) signed by those authorized under (a) above. (X) ( )
d. Attorney's opinion that these arrangements are within the powers and
support a transaction valid pursuant to the business objects of the
corporation. Alternatively, supply the Memorandum of Association. (X) ( )
7. Please check the following:
a. Must the Credit be confirmed by another bank? ( ) (X)
b. Must the Credit be confirmed by a bank approved by the National Association
of Insurance Commissioners (N.A.I.C.)? ( ) (X)
c. Is an Evergreen Clause (Automatic Xxxxxxx Xxxxxx) requested? (X) ( )
d. Please check notice period for avoiding automatic renewal of the Credit.
30 days ( ) 60 days ( X ) 90 days ( )
Page 3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Yes No
8. Is the Credit to be issued in conformity with:
a. State of New York Department of Insurance Regulations on admissibility
of Letters of Credit? ( ) (X)
b. State of California Department of Insurance Regulations on
admissibility of Letters of Credit? ( ) (X)
INSERT (please tick clause to be inserted):
( ) 1. Applies where Letter of Credit is to be issued in conformity with the
State of New York Department of Insurance Regulations.
"Draft(s) drawn by a party indicated as the domiciliary conservator,
liquidator or statutory successor of the beneficiary shall also be
honoured hereunder, provided said draft(s) is accompanied by a
certification signed by the domiciliary conservator, liquidator, or
statutory successor of the beneficiary stating he is the successor by
operation of law of the named beneficiary".
OR EITHER (1) or (2) below applies where Letter of Credit is to be issued in
conformity with the State of California Department of Insurance Regulations.
( ) 1. "In the event of insolvency of the beneficiary, a drawing against this
Letter of Credit shall be honoured upon presentation by the domiciliary
conservator, liquidator or statutory successor of the beneficiary".
( ) 2. "If a court of law appoints a successor in interest to the named
beneficiary then the named beneficiary includes and is limited to the
court appointed domiciliary receiver (including conservator,
rehabilitator or liquidator").
OR (3) below is the "compromise" wording agreed to by both the State of New York
and State of California Department of Insurance Regulators.
( ) 3. "The term "beneficiary" includes any successor by operation of law of
the named beneficiary including, without limitation, any liquidator,
rehabilitator, receiver or conservator. Drawings by any liquidator,
rehabilitator, receiver, or conservator shall be for the benefit of all
of the beneficiary's policyholders".
We request you to issue a letter of credit as shown on this Application. The
Reimbursement Agreement on page 4 is hereby accepted and made applicable to this
Application and the letter of credit.
Date: 20th June, 1997 Signature(s) /s/ X. Xxxxxx Xxxxxxxx
---------------------------- ----------------------------------
(as per certified
resolution)
----------------------------------
(The applicant's attention is drawn to the overleaf, (REIMBURSEMENT AGREEMENT))
--------------------------------------------------------------------------------
FOR BANK USE ONLY
Credit Committee ( ) Rate:___________________________________
Credit Department ( ) Category:_______________________________
Other:_____________________________
--------------------------------------------------------------------------------
The Bank of N.T. Xxxxxxxxxxx & Son Ltd. Page 4
--------------------------------------------------------------------------------
REIMBURSEMENT AGREEMENT
--------------------------------------------------------------------------------
To: The Bank of N.T. Xxxxxxxxxxx & Son Limited
In consideration of your issuing from time to time your letters of credit
("Credits") at our request, we agree with you as follows:
1. We will pay you on demand in the currency in which the Credits are payable,
or in United States Dollars, at your option, in immediately available funds, all
moneys paid by you under or pursuant to the Credits, together with your
customary commissions and charges. We also authorize you to charge any of our
accounts with you for all moneys so paid or owed by us for which you become
liable under the Credits and we agree at least one business day before the same
is due to provide you with funds to meet all disbursements of any kind under the
Credits. If a time draft is drawn under the Credit, you will notify us of the
amount and maturity date and we will make such payment, sufficiently in advance
of such maturity, to enable you to arrange for cover in same day funds to reach
the place where it is payable, no later than the date of its maturity.
2. If any sums payable hereunder are not paid when due, they shall bear interest
from the due date until paid in full at a rate per annum 2% per annum above your
interbank offered rate determined by you two business days before each
successive period of three months commencing on the date such amounts become
payable, but not in excess of the maximum rate permitted by applicable law.
3. If any amount payable hereunder in a currency other than United States
dollars is not paid when due, such other currency amount may be converted, at
your option, into United States dollars at the rate of exchange most favourable
to you, measured by your offered rate of such foreign currency for United States
dollars, prevailing on the due date, and repayment shall be hereafter made to
you in United States dollars.
4. Should any of the following events of default occur, your commitment to issue
Credits shall immediately terminate, and if at the time of any such event there
remains any portion of the Credits undisbursed, such undisbursed portion shall
become immediately due and payable, without demand or further notice of any
kind, all of which we hereby expressly waive, and we shall pay to you for
application to drawings under such Credits the entire amount which has not been
drawn; (i) we default in respect of any payment due you under this agreement or
any individual Letter of Credit agreement, (ii) we default in the payment of any
indebtedness which we may have for the repayment of borrowed moneys, (iii) we
become insolvent, fail to pay our debts generally as they become due, make an
assignment for the benefit of creditors, file or suffer the filing of any
petition or action under bankruptcy laws for the relief of, or relating to,
debtors, (iv) the voluntary of involuntary appointment of a receiver, trustee,
custodian or similar official to take possession of any of our property, (v) the
attachment of any material involuntary lien or charge of any kind to our
property, (vi) any representation made in any financial statement or in any
other statement of document presented to you by us or on our behalf is, in any
material respect, false or misleading when made, (vii) there shall occur in our
business, operations, property or financial or other condition a change that is,
in your judgement, materially adverse to us, or (viii) should you deem yourself
insecure in respect of any of our reimbursement obligations. Any amount which
has not been drawn prior to the expiry date of the Credit to which it relates
shall be repaid to us.
5. Where we are a corporation, our completion of this agreement shall be a
representation and warranty to you that:
(i) we are properly incorporated under the laws of our country of
incorporation and have under those laws and under our own constitution
the powers to enter this agreement in pursuance of a valid business
object;
(ii) all corporate action and all approvals from any government tax,
monetary or other authorities to authorize and enable us to make this
agreement have been obtained and are in full force and effect;
(iii) the making of this agreement will not infringe any other agreement to
which we are a party; and
(iv) we are not the subject of any actual pending or threatened legal
proceedings which has or may have a material effect on our financial
condition or this agreement.
Each application for a Credit hereunder shall constitute a
certification by us that any representation or warranty made hereunder is true
as of the date of each such application.
6. The authorization in Paragraph 1 above to charge our accounts shall apply
notwithstanding that all or part of the moneys held to our credit may have been
deposited for a fixed period which may not have expired. We acknowledge and
agree that in the event of appropriation by you of any such deposit before its
maturity date, the amount applied hereunder shall be net of the amount of early
withdrawal penalty (if any) charged by you in the ordinary course of your
deposit business.
7. Where we have requested that any Credits issued hereunder contain a provision
whereby drawings by a person other than the named beneficiary against the Credit
shall be honoured if such a person is a domiciliary conservator, liquidator,
receiver, rehabilitator or statutory successor, then we confirm you may rely
without independent investigation or verification of any criteria furnished by
such drawer including, without limitation, a statement from such drawer as to
his status as successor by operation of law to the named beneficiary.
8. If the costs to you or any confirming banks of issuing, confirming or
maintaining the Credits increase because of any reserves, special deposits,
assessments of similar requirements imposed on you, we agree to pay you on
demand any additional amounts sufficient to compensate you or any confirming
banks for the increased cost, as determined by you.
9. Where we have requested it in the Credits Article 17 of the Uniform Customs
and Practice for Documentary Credits (1993 Revision) International Chamber of
Commerce Publication No. 500 shall be amended so that notwithstanding the expiry
of a Credit occurring during an interruption of your business or the business of
any confirming bank, you are authorized to effect payment if such Credit is
drawn against within thirty (30) days after the resumption of such business. We
understand that our obligations hereunder, in that event, shall likewise be
amended.
10. We agree that you and your correspondents are obliged only to verify that
the drafts and any documents purport to comply with the terms and conditions of
the Credits on their face, and that neither you nor your correspondents will be
liable for any loss, damage or delay, however caused, except to the extent of
any direct, as opposed to consequential, damages suffered by us which we prove
were caused by you or your correspondents' willful misconduct or negligence, nor
will you or your correspondents be in any way responsible for performance by any
beneficiary of its obligations to us.
11. We agree to pay your out-of-pocket costs and expenses, including reasonable
attorney's fees for independent and in-house counsel, paid or incurred by you in
the performance of your obligations or enforcement of your rights and remedies
hereunder, such costs and expenses to become part of the reimbursement
obligations set out in paragraph 1 above.
12. We or a third party will obtain insurance on all goods described in the
Credits. The insurance will cover fire and other usual risks and any additional
risks you may request. We authorize you to receive the proceeds of the insurance
and apply it against any of our obligations to you under the Credit.
13. The Credits shall be subject to, and performance by you, your correspondents
and the beneficiaries of the Credits shall be governed by, the Uniform Customs
and Practice for Documentary Credits (1993 Revision) International Chamber of
Commerce Publication No. 500 or by subsequent Uniform Customs and Practice fixed
by subsequent Congresses of the International Chamber of Commerce, unless
otherwise indicated to the contrary.
14. The obligations herein shall bind our heirs, executors, administrators,
successors and assigns.
LETTER OF SET-OFF OVER CREDIT BALANCES
To: THE BANK OF N.T. XXXXXXXXXXX & SON LTD.,
THE BANK OF XXXXXXXXXXX EXECUTOR & TRUSTEE COMPANY LTD.,
XXXXXXXXXXX MORTGAGE & FINANCE LTD.
(Delete and initial where necessary)
In consideration of the Bank (which expression shall include all or any of the
above named companies where applicable) giving time credit banking facilities or
other accommodation to
CONSOLIDATED AMERICAN RENTAL INSURANCE CO., LTD.
(the Debtor)
the Debtor agrees that the Bank's right of set-off shall extend to include a
continuing right at any time without prior notice or demand to appropriate from
all moneys from time to time held to the credit of the Debtor by the Bank on any
Current Deposit or other Account or Accounts which the Debtor may now or
hereafter have with the Bank towards payment to the Bank of all present or
future actual or contingent liabilities of the Debtor (whether as principal
agent trustee or guarantor) to the Bank whether on account of moneys advanced
bills of exchange promissory notes guarantees indemnities interest commission
banking charges securities trades and whether incurred solely severally or
jointly and all legal fees commissions or other expenses (on a full indemnity
basis) howsoever incurred by the Bank in connection therewith. Such amounts will
include all costs, charges and expenses on a full indemnity basis which the Bank
may incur in enforcing or obtaining payment of the sums of money due to the Bank
under the offer agreement, set-off agreement, and any other security
documentation held by the Bank. The Debtor irrevocably agrees and confirms as
follows:
1. This authorization shall apply notwithstanding that all or part of the
moneys held to the credit of the Debtor may have been deposited for a
fixed period which may not have expired. The Debtor acknowledges and
agrees that in the event of appropriation by the Bank of any such
deposit before its maturity date the amount applied hereunder shall be
net of the amount of early withdrawal penalty (if any) charged by the
Bank in the ordinary course of its deposit business.
2. A certificate by an officer of the Bank as to the amount for the time
being due from the Debtor to the Bank shall be conclusive evidence for
all purposes against the Debtor. If any sums appropriated hereunder are
not in the currency of the sums owed by the Debtor to the Bank the Bank
shall convert such sums into the currency of the debt at a rate
conclusively determined by the Bank acting in the ordinary course of
its foreign exchange business.
3. The Debtor will not create nor agree to create nor allow to arise or be
subsisting any security interest whatsoever in any moneys held to the
credit of the Debtor by the Bank other than with the Bank's express
prior written consent.
4. This authorization shall be continuing and shall remain in force and
shall not be determined affected or prejudiced by the death or
disability of the Debtor or by the Bank holding taking or releasing any
other or further security or by the Bank renewing varying or
determining any accommodation given to the Debtor or granting time or
indulgence to or compounding with the Debtor or any other person.
5. Where the Debtor is a corporation its execution of this authorization
shall be a representation and warranty to the Bank that the Debtor
(i) is properly incorporated under the laws of its country of incorporation
and has under those laws and under its own constitution the powers to
enter this agreement in pursuance of a valid business object;
(ii) all corporate action and all approvals from any government tax monetary
or other authorities to authorize and enable the Debtor to make this
agreement have been obtained and are in full force and effect;
(iii) the making of this agreement will not infringe any other agreement to
which the Debtor is a party; and
(iv) the Debtor is not the subject of any actual pending or threatened legal
proceedings which has or may have a material affect on its financial
condition or this agreement.
6. Where there is more than one person comprised in the term "the Debtor"
references to the Debtor shall where the context admits take effect as
references to such persons or any of them and where the Debtor is a
firm shall include the person or persons from time to time constituting
the firm whether or not under the same style or firm name and generally
where the context so admits the singular will include the plural.
7. Where this authorisation is signed by more than one person (otherwise
than as agent for a named principal) the agreements on the part of the
Debtor herein contained shall be binding on them jointly and severally
and references to the Debtor shall take effect as references to the
Debtor or any of them.
8. The construction validity and performance of this agreement shall be
governed by Bermuda law.
DATED this 20th day of June One thousand nine hundred and ninety-seven.
Limited SIGNED BY
Company
(do not /s/ X. XXXXXX XXXXXXXX
use seal) ------------------------------------------------
(Print Name)
/s/ X. Xxxxxx Xxxxxxxx
------------------------------------------------ ------------------------------------------------
(Print Name) (Signature
Directors/Director and Secretary of
--------
CONSOLIDATED AMERICAN RENTAL
------------------------------------------------
INSURANCE CO., LTD
------------------------------------------------ ------------------------------------------------
acting for an on behald of the Company by virtue Signature
of a Resolution of the Directors passed on
------------------------------------------------
Individual(s) SIGNED by the above-named
------------------------------------------------ ------------------------------------------------
(Print Name) (Print Name)
------------------------------------------------ ------------------------------------------------
(Signature) (Signature)
in the presence of: in the presence of:
/s/ Xxxxxx X. Xxxx /s/ P.M. Pereech
------------------------------------------------ ------------------------------------------------
(Signature of Witness) (Signature of Witness)
XXXXXX X. XXXX XXXX X. PEREECH
------------------------------------------------ ------------------------------------------------
(Print Name) (Print Name)
c/o Xxxxxx Xxxxxxx Management Co. c/o Xxxxxx Xxxxxxx Mgmt. (Bda)
(Bda) Ltd., Church St., Xxxxxxxx Church Street, Xxxxxxxx
------------------------------------------------ ------------------------------------------------
(Address) (Address)
Administrative Assistant CONTROLLER
------------------------------------------------ ------------------------------------------------
(Occupation) (Occupation)
----------------------
Stamp
----------------------
The Bank of N.T. Xxxxxxxxxxx & Son Ltd.
--------------------------------------------------------------------------------
CREDIT DEPARTMENT LETTER OF SET-OFF
--------------------------------------------------------------------------------
Account_________________________________________________________________________
Date________________________________ 19________
CONSOLIDATED AMERICAN RENTAL INSURANCE CO., LTD.
________________________________________________________________________________
To:
THE BANK OF N.T. XXXXXXXXXXX & SON LTD.
