Exhibit 10.53
▇▇▇▇▇▇▇ ▇▇▇▇▇ LETTER OF CREDIT SUPPLEMENT
This LETTER OF CREDIT SUPPLEMENT ("Supplement") is hereby made a part of that
certain WCMA LOAN AND SECURITY AGREEMENT N0. 749-07V74 (the "Loan Agreement")
between ▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS FINANCIAL SERVICES INC. ("MLBFS") and
RENT-A-WRECK OF AMERICA, INC. D/B/A "RENT-A-WRECK" AND "PRICELESS" ('Customer')
In connection with Customer's WCMA Line of Credit under the Loan Agreement,
Customer may from time to time apply for the opening of letters of credit by an
Issuing Bank, subject in each case to the consent and approval of MLBFS This
Supplement sets forth the understandings between MLBFS and Customer with respect
to any and all such letters of credit
Accordingly, and in consideration of the mutual covenants of the parties
hereinafter set forth, MLBFS and Customer hereby agree as follows
1 DEFINITIONS.
(a) Specific Terms. In addition to terms defined elsewhere in the Loan Agreement
or in any exhibit or amendment thereto or document incorporated therein (which
terms shall have the same meaning herein), when used herein, the following terms
shall have the following meanings
(i) "Application" shall mean the applicable Issuing Bank's document or documents
used to apply for and request, with MLBFS' prior approval, a Credit to be issued
by such Issuing Bank under this Supplement and the applicable CLC Agreement.
(ii "Business Day" means any day upon which the applicable Issuing Bank's
principal office is open for the conduct of substantially all of its banking
functions
(iii) "CLC Agreement" means that agreement which Customer enters into with the
applicable Issuing Bank in consideration of such Issuing Bank's role in
connection with the Letter of Credit Arrangement under the WCMA Program
(iv) "Credit" means a letter of credit authorized and agreed to by the
applicable Issuing Bank from time to time to be issued on Customer's behalf and
which is issued by such Issuing Bank at Customer's request with MLBFS' consent
while this Supplement and the applicable CLC Agreement are in effect
(v) "Document" means not only documents of title, but also all other papers,
securities, invoices, certificates, letters, notices, receipts, telegrams, telex
or telephonic transmissions, facsimiles, computer data printouts and any other
tangible expression of words or data, whether transmitted or delivered by
written, electromagnetic or other means
(vi) "Draft" means any ▇▇▇▇ of exchange or acceptance, whether payable at sight
or at a future time. If a Credit provides for presentation of Documents without
Drafts, references herein to Drafts, acceptances, Documents relative thereto or
payments or acceptances thereof, shall refer to Documents presented for payment
against or acceptances of such Documents, and all rights and obligations
hereunder shall be the same as though Drafts had accompanied such Documents
(vii) "Issuing Bank" refers as of the date hereof to The Northern Trust Company
("Northern") or Bank of America, N.A. ("Bank of America"), as applicable, and
"Issuing Banks" refers as of the date hereof to Northern and Bank of America,
collectively MLBFS reserves the right without notice to or the consent of
Customer to designate any other or additional financial institutions as an
Issuing Bank, and upon any such designation by MLBFS, such other or additional
financial institutions shall be included in the definition of Issuing Bank and
Issuing Banks for all purposes hereof
(viii) "Letter of Credit Arrangement" shall mean the arrangement made between
MLBFS and each Issuing Bank with respect to the issuance of Credits in
connection with the WCMA Program
(b) Other Terms Except as otherwise provided herein or in the Loan Agreement,
other terms herein shall have the meaning assigned to them by the "Uniform
Customs and Practice for Documentary Credits" (1993 Revision) International
Chamber of Commerce Publication No 500 and all successor publications
2 APPLICATIONS FOR THE ISSUANCE OF CREDITS.
Each Application executed by Customer shall constitute a certification by
Customer that all representations and warranties made by Customer in this
Supplement, the applicable CLC Agreement and in the Loan Agreement are true and
correct as of the date of such Application Upon receipt of an Application, MLBFS
may elect, but shall not be required, to request that an Issuing Bank issue or
amend a Credit in connection with MLBFS' Letter of Credit Arrangement in
response thereto In no event, however, shall (i) the aggregate amount
outstanding under all such Credits exceed $1,000,000.00, or (ii) the expiration
date of any Credit extend beyond the Maturity Date of the WCMA Line of Credit
Amendments to any Application and requests to amend any Credit issued shall be
in accordance with the procedures of the applicable Issuing Bank and MLBFS
governing such amendments Customer expressly acknowledges and agrees that in
order to make Applications or request amendments by certain means permitted by
the procedures of the applicable Issuing Bank and MLBFS (including, but not
limited to, microcomputer transmissions), Customer may be required to execute
one or more additional agreements governing the rights and duties of Customer,
the Issuing Bank and/or MLBFS with respect thereto Customer further acknowledges
and agrees that upon the issuance of each Credit, the WCMA Line of Credit under
the Loan Agreement will be reduced by the amount of such Credit so long as such
Credit remains outstanding
3 PAYMENT OBLIGATIONS.
(a) Customer unconditionally agrees to pay to MLBFS (i) as to any Drafts or
clams drawn under or made in connection with any Credit, all amounts paid or
payable by MLBFS under, pursuant to or in connection with such Credit, (ii) all
fees and charges of MLBFS in connection with such Credit and/or Application,
which fees and charges shall be in such amount or at such rate as MLBFS shall
determine in its sole discretion, and (iii) any and all expenses, obligations or
charges paid or incurred by MLBFS, the applicable Issuing Bank or any of its
correspondents in connection with such Credit, this Supplement and/or the
applicable CLC Agreement A schedule of the current fees, charges and limitations
applicable to this Supplement and any Credit issued pursuant hereto is set forth
on Exhibit A attached hereto and hereby made a part hereof The Commitment Fee
referred to on said Exhibit A shall apply only with respect to the period
between the date hereof and the current Maturity Date of the WCMA Line of
Credit. In the event of any renewal of the WCMA Line of Credit, an additional
Commitment Fee shall be payable in the amount then determined by MLBFS The
acceptance of any Commitment Fee by MLBFS shall not in any event obligate MLBFS
to consent to the issuance of any Credit or particular number of Credits No fees
or charges shall be refundable under any circumstances.
(b) Provided that no Event of Default shall then have occurred and is
continuing, within a reasonable time after the presentation of any Drafts or
other third party claims in connection with any Credit, MLBFS will increase the
WCMA Line of Credit by an amount equal to the lesser of (i) the aggregate amount
of such Drafts or claims, or (ii) the amount by which the WCMA Line of Credit
was previously reduced on account of such Credit
(c) Without limiting in any way Customer's obligations to pay MLBFS any amounts
due pursuant to or in connection with any Credit, this Supplement or the
applicable CLC Agreement, Customer hereby irrevocably authorizes MLBFS to pay on
Customer's behalf any and all amounts due pursuant to or in connection with any
Credit or this Supplement or the applicable CLC Agreement, upon the demand of
the applicable Issuing Bank for payment
(d) In order to make such payments to the applicable Issuing Bank on Customer's
behalf, or to MLBFS for the fees and charges referred to above or other sums
payable, Customer hereby irrevocably authorizes MLBFS to (i) debit Customer's
WCMA Account, electronically, by draft, and/or by any other means that MLBFS may
in its sole discretion deem appropriate, and Customer understands and agrees
that such debit may, without limitation, cause the redemption of any and all of
Customer's shares in a CMA money market fund and/or the withdrawal of any and
all of its deposits maintained in any ISA arrangement and Customer irrevocably
authorizes ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated to redeem and/or
withdraw such fund shares and/or deposits to pay the amounts to MLBFS, and (ii)
should an insufficient amount of or no cash, CMA money market fund shares and/or
ISA balances be available in Customer's WCMA Account, advance funds from
Customer's WCMA Line of Credit on account thereof; all without notice to or any
separate consent of Customer
(e) All payments to which MLBFS is entitled shall be made to MLBFS by Customer
free and clear of and without deduction for any present and future foreign
taxes, exchange regulation charges or other levies, deductions or withholdings
of any kind, and shall be made in United States currency
4 EXAMINATION OF CREDITS, INSTRUMENTS AND DOCUMENTS; DISCREPANCIES.
(a) Customer shall promptly examine a copy of each Credit (and any amendments
thereto) sent to it by MLBFS and/or an Issuing Bank and all other instruments
and documents (or copies thereof) delivered to it from time to time by MLBFS
and/or such Issuing Bank in connection therewith, and Customer shall, within one
Business Day of its receipt thereof, notify MLBFS and such Issuing Bank by
telecommunication or other expeditious means of communication of any
discrepancy, irregularity or claim of non-compliance with the instructions set
forth in the appropriate Application or amendment request. Customer shall be
conclusively deemed to have waived any claim against MLBFS and such Issuing Bank
and its correspondents in connection with such Credit unless it notifies MLBFS
and such Issuing Bank in accordance with the term of the previous sentence
(b) In the event that MLBFS and/or the applicable Issuing Bank notifies Customer
as to any discrepancy between any instrument or document presented under any
Credit and the requirements of such Credit, Customer shall, within one Business
Day of its receipt of such notice (or such shorter interval as circumstances may
require and of which the applicable Issuing Bank shall advise Customer), notify
MLBFS by telecommunication or other expeditious means of communication as to
Customer's acceptance or non-acceptance thereof Customer shall also notify such
Issuing Bank of all such instances in accordance with terms of the applicable
CLC Agreement Customer shall be conclusively deemed to waive any claim of
improper honor or dishonor of any Credit, or of improper payment therefor, if it
fails to so notify MLBFS and such Issuing Bank within the time and in the manner
required herein
5 COMPLIANCE WITH LEGAL REQUIREMENTS.
Customer shall procure all licenses and comply with all formalities necessary
for the import, export and shipping of any property in connection with any
Credit and shall comply with all applicable domestic and foreign laws, orders
and regulations (including those relating to exchange) Upon MLBFS' request,
Customer shall promptly furnish MLBFS and the Issuing Bank with certificates
evidencing such compliance Customer hereby certifies and warrants to MLBFS on a
continuing basis that, (i) no transactions with respect to any property shipped
in connection with any Credit are or will be prohibited under any United States
or foreign law, order or regulation, and (ii) each shipment covered by any
Credit or regulation and any Documents required thereunder, shall fully conform
to all applicable United States and foreign laws, orders and regulations
6 LIMITATIONS.
(a) Customer agrees that neither MLBFS, the applicable Issuing Bank, nor any of
its correspondents shall be responsible for, and Customer's obligation to pay
and/or reimburse MLBFS shall not be affected by (i) acts or omissions of any
other person, including, without limitation, any beneficiary or assignee of any
Credit, and any correspondent, agent or sub-agent, (ii) the existence,
character, nature, quality, quantity, condition, packing value or delivery of
goods purporting to be represented by Documents, (iii) the validity,
sufficiency, genuiness or collectibility of Documents (including insurance) or
instruments, or of any endorsements thereon, (iv) any irregularity in connection
with shipment, including, without limitation, any default or fraud by the
shipper or others, the time, place, manner or order of shipment, non-shipment of
goods or partial or incomplete shipments, failure to arrive or delay in arrival
of goods or Documents, or failure to give notice of shipment or arrival of goods
or Documents, (v) breach of contract between Customer and any Credit beneficiary
or other party, (vi) consequences of compliance with laws, orders, regulations
or customs in effect in places of negotiation or payment of any Credit, (vii)
failure of Drafts or other payment demands to bear reference or adequate
reference to any Credit, (viii) failure of any negotiating bank to comply with
MLBFS' directions, (ix) failure of any party to surrender or take up any Credit,
(x) failure of any party to note the amount of any Draft or payment demand on
the reverse side of any Credit, or forward Documents apart from Drafts as
required by the terms of any Credit (each of which requirements may be waived by
the applicable Issuing Bank even if included in any Credit); (xi) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
however sent and whether plain or in code or cipher, or errors in translation or
interpretation of technical or other terms, or (xii) without limiting the
foregoing, any other act or omission not done or omitted in bad faith
(b) MLBFS shall have no duty to inquire into (i) the existence of any disputes
or controversies between Customer and the beneficiary of any Credit or any other
person, including without limitation the applicable Issuing Bank and/or its
correspondents, or (ii) the truth, accuracy or occurrence of any fact or event
referred to in any certificate or other Document presented under or in
connection with any Credit MLBFS' sole obligation shall be limited to honoring
requests for payment by the applicable Issuing Bank made under and in compliance
with any Credit notwithstanding, (A) any assistance which MLBFS may have
rendered in connection with the preparation of the wording of the Credit or any
certificate or other Documents required to be presented thereunder, or (B) any
awareness or knowledge which MLBFS may have concerning any transaction giving
rise to any Credit.
7 INDEMNIFICATION AND INCREASED COSTS.
(a) Customer agrees to indemnify and hold MLBFS, the applicable Issuing Bank and
its correspondents and their respective officers, agents, directors, successors
and assigns harmless from and against any and all claims, losses, liabilities
and expenses (including reasonable attorneys' fees) resulting from or incurred
in connection with this Supplement, any Application and/or any Credit, and,
without limiting the foregoing, Customer agrees to bear and pay all reasonable
expenses of every kind for the enforcement of any of MLBFS' and/or the
applicable Issuing Bank's rights herein mentioned or of any claim or demand by
MLBFS and/or the applicable Issuing Bank against Customer; excluding, however,
from said indemnity any such claims, liabilities, etc arising directly out of
the willful wrongful act or active gross negligence of MLBFS or the Issuing Bank
If any attorney is used at any time or from time to time to enforce any of said
obligations or this Supplement or to represent MLBFS and/or such Issuing Bank in
any legal proceeding concerning any Credit (including, without limitation, any
attempt by Customer to enjoin or delay MLBFS' payment for the honor of a draft
or payment demand under any Credit), MLBFS' and such Issuing Bank's reasonable
attorneys' fees shall be added thereto
(b) If any law or regulation, any change in any law or regulation, or any
interpretation thereof by any court or administrative or governmental authority
charged or claiming to be charged with the administration thereof, or any change
in generally accepted accounting principles applicable to MLBFS and/or the
applicable Issuing Bank, shall (i) impose, modify or make applicable any
reserve, special deposit or similar requirement against any Credits issued by
such Issuing Bank or with respect to this Supplement or the applicable CLC
Agreement, the Credit or any related Document or any transactions hereunder or
thereunder, or (ii) impose on MLBFS and/or the applicable Issuing Bank any other
condition regarding this Supplement, the applicable CLC Agreement, the Credit or
any related Document, or (iii) subject MLBFS and/or the applicable Issuing Bank
to any tax, charge, fee, deduction or withholding of any kind whatsoever and the
result of any such event or any similar measure, shall be to increase the cost
to MLBFS or to such Issuing Bank with respect to issuing or maintaining any
Credit or to reduce the amount of principal of, interest on, or any fee or
compensation receivable by MLBFS and/or such Issuing Bank in respect of any
Credit or this Supplement, Customer shall promptly pay to MLBFS or such Issuing
Bank, upon demand, and from time to time upon receipt from MLBFS and/or such
Issuing Bank of a certificate as to such increased cost, completed as of the
effective date of such change of interpretation, all additional amounts which
are necessary to compensate MLBFS and/or such Issuing Bank for such increased
cost A certificate from MLBFS or the applicable Issuing Bank as to increased
costs shall show the manner of calculation and shall be conclusive (absent
manifest error) as to the amount thereof In addition, without limiting the
foregoing, if any such change in applicable law or regulations, or
interpretation thereof or in generally accepted accounting principles should
occur, but such change or interpretation does not increase any cost or reduce
any fee or compensation, Customer nevertheless agrees to pay to MLBFS a fee
which will adequately compensate MLBFS, in its' reasonable judgment, for any
adverse non-monetary impact on MLBFS.
8. INSURANCE. Customer shall keep all property shipped in connection with any
Credit insured in such amounts, against such risks, upon such terms and with
such insurers as may be required by MLBFS from time to time, and shall furnish
to MLBFS on request a certificate or other evidence satisfactory to MLBFS of
such insurance Customer understands and agrees that any insurance required to be
obtained pursuant to this Section is and shall be deemed supplemental to any
required by or obtained in favor of the applicable Issuing Bank
9. RESERVATION OF RIGHTS OF MLBFS MLBFS RESERVES THE RIGHT AT ANY TIME WITHOUT
NOTICE TO OR THE CONSENT OF CUSTOMER AND IN MLBFS' SOLE DISCRETION TO (i)
TERMINATE OR MODIFY IN ANY MANNER ITS LETTER OF CREDIT ARRANGEMENT WITH ANY
ISSUING BANK, (ii) TERMINATE ITS LETTER OF CREDIT PROGRAM, (iii) REFUSE WITH OR
WITHOUT CAUSE TO APPROVE ANY REQUEST OR REQUESTS OF CUSTOMER FOR THE ISSUANCE OR
AMENDMENT OF A CREDIT OR WAIVER OF ANY DISCREPANCY IN A DRAWING OF A CREDIT,
(iv) LIMIT THE NUMBER OF LETTERS OF CREDIT ISSUED PURSUANT HERETO, AND (v)
TERMINATE OR AMEND THIS SUPPLEMENT AND CUSTOMER'S RIGHTS HEREUNDER
10 MISCELLANEOUS.
(a) Customer shall furnish MLBFS with a list of persons authorized to act for
Customer in connection with this Supplement, any Application or any Credit
issued pursuant to this Supplement MLBFS shall be authorized and entitled to
rely upon any written or tele-transmitted Application or other communication or
any message or conversation by telephone received or purporting to be received
from one of such persons or any other person reasonably believed by MLBFS to be
duly authorized to act for Customer hereunder
(b) Customer shall not assign any of its rights and/or obligations hereunder
unless the prior written consent of each of MLBFS and the applicable Issuing
Bank is obtained Customer acknowledges and agrees that MLBFS may freely assign
or delegate any of its rights and duties hereunder, or in connection with any
Credit, to any entity without notice to or the consent of Customer
(c) No delay on the part of MLBFS and/or the applicable issuing Bank, or on the
part of any assignee, in exercising any power or right hereunder shall operate
as a waiver of any power or right nor shall any single or partial exercise of
any power or right hereunder preclude oilier of further exercise thereof, or the
exercise of any other power or right The rights and remedies herein expressly
specified are cumulative and not exclusive of any other rights or remedies which
MLBFS and/or the applicable Issuing Bank or any of their assigns may otherwise
have or would have under applicable law
(d) MLBFS is hereby irrevocably authorized, but not obligated, to obtain and
receive any and all communications and/or material of any nature whatsoever
relating to Credits or in connection with Customer's participation in MLBFS'
Letter of Credit Arrangement, including, without limitation, any and all
communications from or to the applicable Issuing Bank
(e) All notices and other communications required or permitted hereunder shall
be given and shall become effective in the manner and at the time set forth in
the Loan Agreement
(f) If Customer shall fail to do any act or thing it has covenanted to do under
this Supplement or the applicable CLC Agreement or if any representation or
warranty on the part of Customer contained in this Supplement or the CLC
Agreement shall be breached, MLBFS may, in its sole discretion, after 5 days
written notice is sent to Customer, do the same or cause it to be done or remedy
any such breach, and may expend its funds for such purpose, and any and all
amounts so expended by MLBFS shall be repayable to MLBFS by Customer immediately
upon MLBFS' demand therefor, with interest at the Interest Rate described in the
Loan Agreement during the period from and including the date funds are so
expended by MLBFS to the date of repayment, and any such amounts due and owing
MLBFS shall be additional Obligations of Customer to MLBFS secured hereunder and
under the Loan Agreement
(g) Customer agrees to do such further acts and things and to execute and
deliver to MLBFS such additional agreements, instruments and documents as MLBFS
may reasonably require or deem advisable to carry into effect the purposes of
this Supplement, or to confirm unto MLBFS its rights, powers and remedies under
this Supplement
(h) This Supplement shall be governed by and interpreted under the laws of the
State of Illinois, and may be enforced by MLBFS in any jurisdiction where the
Loan Agreement may be enforced
(i) Whenever possible, each provision of this Supplement shall be interpreted is
such manner as to be effective and valid under applicable law Any provision of
this Supplement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective only to the extent of such prohibition
or unenforceability without invalidating the remaining provisions of this
Supplement or affecting the validity or enforceability of such provision in any
other jurisdiction
(j) This Supplement is an Additional Agreement under the Loan Agreement,
constitutes the entire understanding and represents the full and final agreement
between the parties with respect to the subject matter hereof, and may not be
contradicted by evidence of prior written agreements or prior, contemporaneous
or subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.
IN WITNESS WHEREOF, this Supplement has been executed as of June 19, 2001
RENT-A-WRECK OF AMERICA, INC. D/B/A -RENT-A-WRECK" AND "PRICELESS"
By /s/ ▇▇▇ ▇▇▇▇, ▇▇. /s/ Mitra Ghahramanlou
---------------------------- ----------------------------
Signature (1) Signature (2)
▇▇▇ ▇▇▇▇, ▇▇. Mitra Ghahramanlou
---------------------------- ----------------------------
Printed Name Printed Name
President CAO
---------------------------- ----------------------------
Title Title
Accepted at Chicago, Illinois
▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS FINANCIAL SERVICES INC.
By /s/
----------------------------
EXHIBIT A
ATTACHED TO AND HEREBY MADE A PART OF THAT CERTAIN LETTER OF CREDIT SUPPLEMENT
TO WCMA LOAN AND SECURITY AGREEMENT NO. 749-07V74 BETWEEN ▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS
FINANCIAL SERVICES INC. AND RENT-A-WRECK OF AMERICA, INC. D/B/A "RENT-A-WRECK"
AND "PRICELESS".
Stand-By Letters of Credit
Commitment Fee. 1/4% flat
Processing Fee $1,500 each
Amendment Fee $150 each (for amendments other than an annual extension)
Stand-By Commission 1.0% flat, or $1,000, whichever is higher
Negotiation Fees 1/2% flat or $500 minimum per draw
Documentary Letters of Credit:
Commitment Fee 1/4% flat
Issuance Fee. 1/4% flat or $200.00, whichever is higher
Amendment Fees 1/4% flat or $150.00, whichever is higher
Cancellation Fees. $150.00
Negotiation Fees 3/4% flat or $250.00 minimum per draw
Cable Fees $50.00 each
Note The above are per annum charges. Fees subject to change There may be
additional fees if any additional services are required.
EXHIBIT A TO SERVICE AGREEMENT
CONTINUING AGREEMENT FOR
LETTERS OF CREDIT FOR CLIENTS
OF ▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS
FINANCIAL SERVICES INC.
The Northern Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Division Head, Financial Institutions Division
Gentlemen:
In consideration for the issuance by THE NORTHERN TRUST COMPANY (the "Bank")
from time to time, upon receipt of Applications AND solely at the option of the
Bank, of one or more letters of credit (each a "Credit" and collectively, the
"Credits") in connection with the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc.
("MLBFS") letter of credit arrangement, Rent-A-Wreck of America, Inc. , a
corporation (the "Applicant") hereby agrees with MLBFS and the Bank with respect
to each Credit issued by the Bank, as follows:
1. Definitions. As used in this Agreement:
(a) An "Application" means the Application by the Applicant for a Credit,
substantially in the form of Annex 1 or Annex 2 hereto, as applicable, as such
Application may be amended or modified from time to time.
(b) An "Instrument" means any draft, receipt, acceptance, teletransmission
(including, but not limited to, telex or cable), or other written demand for
payment made in connection with a Credit.
(c) "Property" means goods and merchandise and any and all documents relating
thereto, securities, funds, chooses in action and any and all other forms of
property, whether real, personal or mixed and any right or interest therein.
(d) "Uniform Customs and Practice" with respect to a Credit means the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 and any subsequent revision thereof
adhered to by the Bank on the date such Credit-is issued. The Uniform Customs
and Practice shall serve, in the absence of proof expressly to the contrary, as
evidence of general bank usage.
(e) "Instructions" means oral or written instruction or instructions transmitted
by teleprocessor given on behalf of the Applicant by one or more officers or
employees of the Applicant (each such officer or employee, or combination
thereof, being hereinafter referred to as an "authorized person").
2. Applications for the Issuance of Credits. The Applicant shall request the
issuance of any Credit pursuant to this Agreement by completing the Bank's
then-current Application. The present forms of Application are attached hereto
at Annex 1 and Annex 2. Each Application shall constitute a certification by the
Applicant that any representation, warranty or commitment made by the Applicant
in this Agreement is true and correct as of the date of such Application. Upon
the Bank's receipt of an Application, the Bank may, but shall not be required
to, issue a Credit in response thereto. However, if the Bank, in its sole
discretion, chooses not to issue a Credit, the Bank will notify the Applicant
and MLBFS promptly of its decision. Amendments to any Application and requests
to amend any Credit issued by the Bank shall be in accordance with the Bank's
procedures governing such amendments. The Bank will promptly notify the
Applicant and MLBFS of its decision upon such requests.
3. Reimbursement Obligation. On behalf of the Applicant, MLBFS will pay the
Bank, on demand at the Bank's principal office, in immediately available funds,
the amount required to pay each Instrument or other amount paid under or
purporting to be under a Credit upon documents presented in substantial
compliance with the terms of the Credit. Such payment shall be made with
interest from the date of the Bank's payment to the date of reimbursement. If
the Instrument is in foreign currency, such payment shall be in United States
currency at the Bank's selling rate for cable transfers to the place of payment
of the Instrument current on the date of payment or of the Bank's settlement of
its obligation, as the Bank may require. If, for any cause, on the date of
payment or settlement, as the case may be, there is no selling rate or other
rate of exchange generally current in New York for effecting such transfers,
MLBFS will pay the Bank on behalf of the Applicant, on demand, an amount in
United States currency equivalent to the Bank's actual cost of settlement of its
obligation however or whenever the Bank shall make such settlement, with
interest from the date of settlement to the date of payment. The Applicant will
comply with all governmental exchange regulations now or hereafter applicable to
each Credit or Instrument or payment related thereto and MLBFS will pay the Bank
on behalf of the Applicant, on demand, in United States currency, such amount as
the Bank may be or may have been required to expend on account of such
regulations.
4. Payment of Commissions, Expenses and Interest. MLBFS on behalf of the
Applicant will pay the Bank, on demand, the Bank's commission and all charges,
costs, and expenses paid or incurred by the Bank in connection with any Credit,
and interest where chargeable, including fees and charges of counsel and costs
allocated by the Bank's internal legal department in connection with the
performance or enforcement of this Agreement or any Credit. Unless otherwise
agreed:
(a) commissions payable hereunder shall be at the rate customarily charged by
the Bank at the time in like circumstances;
(b) interest payable hereunder on amounts not paid when due shall be at the
highest non-default interest rate provided for in the agreement between the
Applicant and MLBFS governing the Applicant's Working Capital Management
Account; and
(c) in addition to commissions, fees and amounts otherwise payable with respect
to the issuance of any Credit, MLBFS on behalf of the Applicant shall pay to the
Bank on demand such amounts as the Bank in its sole discretion determines are
necessary to compensate it for any cost or reduction of rate of return
attributable to the existence of this Agreement, any Application or its issuing
or having outstanding such Credits resulting from the application of any law,
rule or regulation applicable to the Bank (whether or not having force of law)
regarding any reserve, assessment, capital adequacy or similar requirements
relating to letters of credit or the reimbursement agreements with respect
thereto or to similar liabilities or assets of the Bank whether existing at the
time of issuance of the Credit or adopted thereafter; provided, however, that in
the case of a sale of a participation permitted by paragraph 15 hereof all
amounts payable by MLBFS on behalf of the Applicant under paragraph 3(c) hereof
shall be determined as if the Bank had not sold such participation. The
Applicant acknowledges that there may be various methods of allocation costs to
the Credits and agrees that the Bank's allocation for purposes of determining
the costs referred to above shall be conclusive and binding provided such
allocation is made in good faith.
5. Authorization of MLBFS. The Applicant hereby irrevocably authorizes MLBFS,
and MLBFS agrees, to pay to the Bank on behalf of the Applicant any and all
amounts due to the Bank in accordance with the terms of or in connection with
any Credit or this Agreement, including but not limited to all amounts specified
in Sections 3 and 4 of this Agreement. MLBFS agrees to make payment as follows:
MLBFS shall debit Applicant's WCMA Account at MLBFS's affiliate, ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, and apply the proceeds to the payment of
any amount due the Bank in accordance with the terms of any Credit. In the event
there are not sufficient funds or assets available to debit in such WCMA
Account, MLBFS shall advance the funds required to pay the Bank any amount due
in accordance with the terms of any Credit. The Applicant shall remain obligated
to reimburse MLBFS any amount paid to the Bank pursuant to the foregoing
sentence in accordance with the provisions of the Applicant's WCMA Account
Agreement and the supplement thereto entered into in connection with the letter
of credit arrangement.
6. Proper Drawing; Bank's Honoring. The Bank may honor, as complying with the
terms of the Credit and of the Application, any instrument or other document
otherwise in order signed or issued by a person purporting to be an
administrator, executor, trustee in bankruptcy, debtor in possession, assignee
for the benefit of creditors, liquidator, receiver or other legal representative
of the party authorized under such Credit to draw or issue such instruments or
other documents. The Bank shall have no duty to determine the proper identity of
any one appearing in any draft or document as a transferee and any payment by
the Bank to any purported transferee as determined by the Bank is hereby
authorized. The Bank may accept and pay drafts without requiring the delivery of
shipping documents.
7. Amendment, Change, Modification; No Waiver. In the event of any amendment,
change or modification, with the consent of the Applicant and MLBFS, relating to
any Credit or any Instruments or documents called for thereunder, including
waiver of noncompliance of any such Instruments or documents with the terms of
such Credit, this Agreement shall be binding upon the Applicant <1> with regard
to such Credit as so amended, changed, or modified, and with regard to any
action taken by MLBFS, the Bank or any of their correspondents relative thereto.
No amendment, change, waiver, or modification to which MLBFS or the Bank has
consented shall be deemed to mean that MLBFS or the Bank will consent or has
consented to any other or subsequent request to amend, change, modify, or waive
a term of such Credit. MLBFS or the Bank shall not be deemed to have waived any
of their respective rights hereunder, unless MLBFS or the Bank or their
respective authorized agents shall have signed such waiver in writing. No such
waiver, unless expressly stated therein, shall be effective as to any
transaction which occurs subsequent to the date of such waiver, nor as to any
continuance of a breach after such waiver.
8. U.C.P.; Agreements and Acknowledgments; Indemnification. The Uniform Customs
and Practice shall be binding on this Agreement, each Credit hereunder and all
transactions in connection therewith except to the extent that it is otherwise
expressly agreed. It is also agreed that:
(a) user(s) of any Credit shall not be deemed agents of the Bank;
(b) none of MLBFS, the Bank, their affiliates, their subsidiaries, or the Bank's
correspondents shall be responsible for any act, error, neglect, default,
omission, insolvency or failure in the business of any of their correspondents;
(c) any action, inaction or omission on the part of MLBFS or the Bank or any of
their affiliates, subsidiaries or correspondents, under or in connection with
any Credit or the relative Instruments, documents or Property, if in good faith,
shall be binding upon the Applicant <2> and shall not place MLBFS, the Bank or
any of its correspondents under any liability to the Applicant <3> and in no
event shall the Bank or any correspondent be liable for any special, punitive,
exemplary or consequential damages; and
(d) the Applicant will promptly examine: (i) the copy of any Credit (and of any
amendments thereof) sent to it by the Bank; and (ii) all Instruments and
documents delivered to it from time to time, and, in the event of any claim of
noncompliance with the Applicant's instructions or other irregularity, the
Applicant will immediately notify the Bank thereof in writing, with a copy to
MLBFS, the Applicant being conclusively deemed to have waived any such claim
against MLBFS, the Bank and their correspondents unless such notice is given as
aforesaid.
9. Instructions; No Liability. Instructions (whether oral, or by telephone,
teletransmission or by other means) may be honored by MLBFS or the Bank (as
applicable) when received from anyone purporting to be authorized to give such
instructions for the Applicant. Applicant agrees to furnish the Bank (with a
copy to MLBFS) with written confirmation of each such instruction signed by the
person giving such instruction, or other authorized officer, but MLBFS's or the
Bank's responsibility with respect to any instruction shall not be affected by
the. failure to receive, or the content of, such confirmation. Neither MLBFS nor
the Bank shall have any responsibility to notify Applicant of any discrepancies
between Applicant's instructions and its written confirmation, and in the event
of any such discrepancy, the original instructions shall govern. MLBFS and the
Bank shall be fully protected in, and shall incur no liability to the Applicant
for, acting upon any oral, telephone, teletransmission or other instructions
which MLBFS or the Bank in good faith believes to have been given by any
authorized person, and in no event shall MLBFS or the Bank be liable for any
special, punitive, exemplary or consequential damages. Either of MLBFS or the
Bank may, at its option, use any means of verifying instructions received by it.
Either of MLBFS or the Bank also may, at its option, refuse to act on any oral,
telephone, teletransmission or other instruction or any part thereof, without
incurring any responsibility for any loss, liability or expense arising out of
such refusal.
10. Indemnification. The Applicant agrees to hold MLBFS, the Bank, each officer
and employee and each branch, affiliate and subsidiary of MLBFS or the Bank, and
their correspondents indemnified and harmless against any and all claims, loss,
liability, damage or cost, including reasonable counsel fees and allocated costs
of internal counsel, howsoever arising from or in connection with any Credit,
including without limitation all amounts adjudicated or otherwise ordered by any
court or other tribunal to be payable in connection with the Credit to the
beneficiary or its successors or assigns, and any such claim, loss, liability,
damage or cost arising out of any transfer, sale, delivery, surrender, or
endorsement of any document at any time(s) held by MLBFS, the Bank or any of
their officers, employees, branches, affiliates or subsidiaries, held for the
account of any one of them by any correspondent of any one of them, in
connection with such Credit, or arising out of any action for injunctive or
other judicial or administrative relief arising out of or in connection with
such Credit and affecting, directly or indirectly, MLBFS, the Bank or such
affiliate or subsidiary.
11. Licenses; Insurance; Regulations. The Applicant will procure promptly any
necessary import, export or other licenses for the import, export or shipping of
the Property shipped under or pursuant to or in connection with such Credit, and
will comply with all foreign and domestic governmental regulations in regard to
the shipment of such Property or the financing thereof, and will furnish such
certificates in that respect as the Bank may at any time(s) require, and will
keep such Property adequately covered by insurance.
12. Continuing Rights and Obligations. MLBFS's and the Bank's rights hereunder
shall continue unimpaired, and the Applicant shall be and remain obligated in
accordance with the terms and provisions hereof. No delay, extension of time,
renewal, compromise or other indulgence which may occur or be granted by MLBFS
or the Bank shall impair MLBFS's or the Bank's rights or powers hereunder. If
the Applicant is a partnership, its obligations hereunder shall continue in
force and apply, notwithstanding any change in the membership of such
partnership, whether arising from the death or retirement of one or more
partners or the accession of one or more new partners. If more than one entity
and/or person signs this Agreement, each of them shall be jointly and severally
liable hereunder and all the terms and provisions regarding liabilities,
obligations and Property of such entities and/or persons shall apply to any
liabilities, obligations and Property of any and all of them.
13. Jurisdiction and Venue; Service of Process; Appointment of Agent; Waiver.
The Applicant hereby consents to the non-exclusive jurisdiction (i) of any court
of record of the State in which the branch of the Bank to which this Agreement
is addressed is located (ii) of the United States District Court for the
appropriate District of such State and agrees that such court shall be a proper
forum for any action or suit arising out of or in connection with this Agreement
or any Credit. Service of process in any such action or suit may be made upon
the Applicant by mailing a copy of the summons to the Applicant either at the
address set forth below or at the Applicant's last address appearing in MLBFS's
or the Bank's records. The Applicant also waives:
(a) the right to trial by jury in the event of any litigation to which MLBFS or
the Bank and the Applicant are parties in respect of any matter arising under
any Credit (including, but not limited to, this Agreement and any Application),
whether or not such litigation has been commenced in respect of a Credit
(including, but not limited to, this Agreement and any Application) and whether
or not other persons are also parties thereto;
(b) any immunity it or its Property may now or hereafter have from suit,
jurisdiction, attachment (whether prior to judgment or in aid of execution),
execution or other legal process; and
(c) any claim against MLBFS or the Bank for consequential, exemplary, punitive
or special damages.
Notice of acceptance of this Agreement by the Applicant is waived.
14. Consent to Disclose. Applicant hereby consents to the dissemination to
subsidiaries and affiliates of the Bank of information in the Bank's possession
relating to the Application in connection with any proposed participations by
the Bank of any of the rights and obligations hereunder.
15. Non-Waiver by MLBFS and Bank. It is expressly recognized and acknowledged by
the Applicant that notwithstanding anything to the contrary contained herein,
MLBFS and the Bank do not waive their common law or statutory rights of set-off
or any other rights generally available to creditors.
16. Assignment; Applicable Law. The Bank may assign or sell participations in
all or any part of each Credit or this Agreement to another entity. This
Agreement may not be assigned by the Applicant without the prior written consent
of MLBFS and the Bank. This Agreement and all rights, obligations and
liabilities arising hereunder shall be binding upon and inure to the benefit of
MLBFS and the Bank and the Applicant and their respective successors and
permitted assigns. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, provided that to the extent
there is any conflict between such laws and the Uniform Customs and Practice,
the Uniform Customs and Practice shall control.
17. Conflict. In the event that the terms hereof conflict with the terms
contained in any Application, the terms of this Agreement shall control.
Very truly yours,
/s/ ▇▇▇ ▇▇▇▇, ▇▇.
(APPLICANT)
ACKNOWLEDGED AND AGREED TO:
▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS
FINANCIAL SERVICES, INC.
By: /s/
Its: VP
THE NORTHERN TRUST COMPANY
By:
Its: