Exhibit 10.28


 


ADDENDUM TO LETTER OF
UNDERSTANDING


 


MADE BETWEEN


 


VANGUARD RENTAL (UK) LIMITED


 


AND


 


LOMBARD NORTH CENTRAL PLC


 


AND


 


DATED


 


Vanguard Rental (UK) Limited
has requested, and Lombard North Central PLC has agreed, to permit Vanguard
Rental (UK) Limited to use the services of Franchisees subject to the
replacement of the “SUBLETTING APPENDIX” attached to the Letter of
Understanding dated 25th March 2004 with the form attached to this Addendum.


 


Save as varied by this
Addendum the terms of the Letter of Understanding dated 25th March 2004 shall
remain unaltered.


 


	
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  Date

  	
  25th March 2004

  
					



 

















 


Letter
of procedure made between Lombard
North Central PLC (“Lombard”)


 


of 3
Princess Way Redhill Surrey RH1 1NP


 


and VANGUARD RENTAL (UK) LTD (the “Hirer”)


 


of JAMES HOUSE, 55 WELFORD ROAD, LEICESTER LE2 7AR


 


and dated


 


Pursuant to an agreement dated 25th March 2004 Lombard and the Hirer have transacted Rental
Agreements in respect of motor cars.


 


Both Lombard and the Hirer
are aware that there are logistical problems in collecting Rental Agreements
from the Hirer and delivering them to Lombard.


 


The Hirer has requested that
Lombard accept signed Rental Agreements by facsimile transmission which request
Lombard is prepared to agree provided that the Hirer agrees to post the
original of the Rental Agreement that has been sent by facsimile transmission
to Lombard on the same day that it is transmitted.


 


From the date of this letter
and until further notice Lombard and the Hirer agree that for each lease;


 


1.               The Hirer will send to Lombard such information
as Lombard requires to prepare a Rental Agreement.


 


2.               Lombard will transmit the form of Rental
Agreement to the Hirer by use of the internet or such other instrument as
Lombard and the Hirer shall agree.


 


3.               The Hirer will print an original Rental
Agreement and will have the Rental Agreement signed for the Hirer.


 


4.               The Hirer will post, by first class letter
post, the original Rental Agreement to Lombard.


 


These
arrangements may be terminated with immediate effect by Lombard or the Hirer by
written notice from each to the other.


 


	
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  Date

  	
  25th March 2004

  
					



 

















 


Letter of Understanding made between Lombard
North Central PLC (“Lombard”)


 


of 3 Princess Way Redhill Surrey RH1 1NP


 


and VANGUARD RENTAL (UK) LTD (the “Hirer”)


 


of JAMES HOUSE, 55 WELFORD ROAD, LEICESTER
LE2 7AR


 


and dated


 


The terms
under which Lombard and the Hirer will enter into leasing agreements (each the “Rental
Agreement” and together the “Rental Agreements”) from the date of this
agreement will be as follows:


 


1.                                       Each
Rental Agreement will be entered into in the form attached.


 


2.                                       Each
Rental Agreement will be deemed to incorporate all of the terms attached to
this letter and headed the “Terms of each Rental Agreement” (the “Terms”) as if
those terms were actually printed on the Rental Agreement.


 


3.                                       The
Terms will be modified by the Addenda (if any) attached to this letter the
heading of which and the number of pages of which are shown in this letter. The
Addenda (if any) will apply to
each Rental Agreement written to the terms of this agreement.


 


4.                                       Each
Rental Agreement may be further modified by the attachment of any further Addenda
specifically referring to that Rental Agreement.


 


5.                                       Lombard
will treat Rental Agreements as being operating leases as that term is defined
by exclusion to SSAP21 but Lombard accepts that the accounting treatment of the
Rental Agreements in the Hirer’s individual and consolidated records and
financial statements are at the absolute discretion of the Hirer and its
auditors and neither the Hirer nor its auditors shall have any obligation or
liability whatsoever, whensoever or howsoever arising out of or in connection
with any such treatment. Where the Rental Agreement is categorised as a finance
lease as that term is defined in Section 219 of the Capital Allowances Act
2001, Lombard agrees that it will not increase or decrease rentals payable
under any Rental Agreement arising from the indemnities contained in the Terms
of each Schedule to the Rental Agreement.


 


The attachments
to this letter are:


ADDENDUM TO RENTAL AGREEMENT
(FOR RETURN CONDITIONS)


STANDARD CONDITIONS OF SALE


SUBLETTING APPENDIX


 


Lombard may register details
of this Agreement and any Schedule to Rental Agreement made subject to the
terms of this Agreement and the conduct of the Hirer’s account with any
licensed credit reference agency. This and the information the Hirer has given
may be used to help make credit decisions, to prevent fraud, for tracing
debtors and for recovering Lombard’s property. Lombard may also disclose this
information to any member company of The Royal Bank of Scotland group of
companies, to any company or business associated with Lombard and to any person
acting on Lombard’s behalf for any purpose connected with the group’s business.
Lombard, or those identified above, may also contact the Hirer about services
which may be of interest. The Hirer may choose not to be contacted in this way.


 


	
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  Date

  	
  25th March 2004

  
					



 

















 


Terms of each Schedule to the Rental Agreement


 


1.                        Definitions


 


In
this agreement:


 


1.01             “Agreement Date” means the date so called in
the Schedule.


 


1.02             “Equipment” means the equipment described in
the Schedule and includes each item thereof and all component parts,
accessories, additions, alterations and replacement parts thereto together with
all manuals and handbooks.


 


1.03             “Schedule” means the Schedule to this
agreement which shall form part of this agreement.


 


1.04             “Fixed Period” means the period so called in
the Schedule.


 


1.05             “Total Loss” means any loss, theft, seizure,
confiscation or destruction of all (but not subject to the provisions of Clause
9 any part or single item only) of the Equipment or any damage thereto which in
the insurer’s opinion may not be economical to repair.


 


1.06             Reference to any statutory enactment shall
include references to such enactment as it may after the date hereof from time
to time be amended, supplemented or re-enacted.


 


2.                        The Hiring; Rentals; Delivery of
the Equipment


 


2.01             Lombard agrees to hire and the Hirer agrees to
take on hire the Equipment on the terms of this agreement. The hiring will
start on the Agreement Date and will continue for the Fixed Period and at the
rentals shown in the Schedule. It is agreed and declared that the Hirer shall
have no right to terminate the hire earlier than a date 3 months from the Agreement Date.  If the Hirer wishes to terminate the hiring
after that date the Hirer will give Lombard one month’s notice and pay to
Lombard the amounts calculated in accordance with Clause 9.01 on or before the
next rental payment date.


 


2.02             The Hirer will pay Lombard at the address
shown in the Schedule at the times stated in the Schedule together with value
added tax (“VAT”):


 


(a)          the rentals shown in the Schedule or as adjusted under this agreement;


 


(b)         any other sums payable under this agreement.


 


Payments made by post will be at the Hirer’s own risk. Punctual payment
shall be of the essence of this agreement.


 


2.03             The Hirer will accept delivery of the
Equipment only if it is satisfactory. If the Equipment is unsatisfactory the
Hirer will notify Lombard immediately by fax. If Lombard do not receive a fax
from the Hirer within 48 hours of delivery it will be conclusively presumed
that the Hirer has accepted the Equipment and that it is completely
satisfactory.


 


2.04             The Hirer will comply with any reasonable
request from Lombard about the application for and preservation of any
available capital allowances and give Lombard written notice immediately of any happening requiring notification to a
competent taxation authority.


 


3.                        Risk, Care, Title, Use of
Equipment; Indemnity


 


3.01             The Hirer will be responsible for any loss,
theft destruction of or damage to
the Equipment from the date of delivery until it is sold or disposed of.


 


3.02             The Hirer will at its own expense keep the
Equipment properly serviced, maintained and in good repair and operating
condition allowing for fair wear and tear and subject to the provisions of
Clause 5 repair or replace any missing or unfit parts with parts of similar
manufacturing standards and specification as those recommended by the
manufacturer of the Equipment. The Hirer will maintain or cause to be maintained
complete records of all major services and significant repairs to the
Equipment. All replacement parts fixed to the Equipment will belong to the
owner of the Equipment and be subject
to the terms of this agreement.


 


3.03             The Equipment will remain personal and
moveable property. The Hirer will ensure that Lombard or Lombard’s agent will
have a right of access to the Equipment and all related records at all
reasonable times for inspection and removal and at any reasonable time during
the month immediately prior to the date of the expiry of the Fixed Period shown
in the Schedule the Hirer will at Lombard’s request demonstrate the Equipment
to any potential purchaser and allow them to inspect the Equipment and all related
records. The Hirer will tell Lombard immediately if it changes address. The
Hirer will not take the Equipment outside Great Britain without Lombard’s
previous written consent deemed to be given in respect of vehicles for use in
Western Europe for no more than 28 days at any one time.


 


3.04             The Hirer will use reasonable endeavours to
ensure that the Equipment is only used in a careful and proper manner for the
purpose for which the Equipment has been designed and in accordance with any operating
instructions issued by the manufacturer of the Equipment, any government agency
or any statutory authority.


 


3.05             The Hirer will not
let anyone obtain any rights over the Equipment or let anyone take or threaten
to take it to pay any of the Hirer’s debts and, in Lombard’s opinion, such
threat is likely to succeed. The Hirer will keep the Equipment in its possession
and under its control and the Hirer will not sell, transfer, mortgage,


 

















 


land,
let, sublet (except in accordance with the terms of the Subletting Appendix
attached to this agreement) or give the Equipment to anyone or otherwise part
with possession of the Equipment without Lombard’s previous written approval
(deemed to be given in respect of temporary use of the Equipment by any United
Kingdom holding company of the Hirer’s or any United Kingdom subsidiary of such
holding company within the meaning of section 736 or 736A of the Companies Act
1985 on terms that such holding company or subsidiary must deliver up
possession of the Equipment to Lombard or the owner immediately on demand or
earlier termination of the hiring under this agreement).


 


3.06                           The Hirer will not knowingly permit or allow
the Equipment to be used contrary to law including any statute or other rule,
regulation or order but, if the Equipment is so used and either the Hirer or
Lombard are aware of such use, it shall be regarded as a repudiation of
this agreement.


 


3.07                           The Hirer will not make any alterations to the
Equipment without Lombard’s prior written consent unless the Hirer is obliged
to do so by law. Any additions, upgrades, accessories, alterations or
replacements will become the property of the owner of the Equipment and subject
to this agreement.


 


3.08                           The Hirer will not change the usual location
of the Equipment from the location shown in the Schedule without Lombard’s
written consent.


 


3.09                           The Hirer will maintain or cause to be
maintained in full force and effect all certificates licences, registrations,
permits and authorisations required by any statutory authority at all times
during this agreement and to ensure that each of the foregoing are in force on
termination of this agreement.


 


3.10                           The Hirer must:


 


(a)                                  not default on the payment of any sum due or
commit any other breach under any schedule to a Rental Agreement which is not
remedied in accordance with clause 7.01 (c) or waived by Lombard. Furthermore
not default on the payment of any sum or commit any other breach under any
other loan, instalment credit, rental, hire or leasing agreement the Hirer may
have with Lombard (whether before or after the date hereof) or any of its subsidiaries
or any member of the The Royal Bank of Scotland group of companies from time to
time (as such expressions are defined in section 736 or 736A of the Companies
Act 1985) and which loan, instalment credit, rental, hire or leasing agreement
has an outstanding aggregate amount not less than the equivalent of Twenty
Million United States Dollars (US$20M) and which default is not cured within
the applicable cure period or waived;


 


(b)                                 not do or allow to be done anything which
Lombard reasonably believe (such belief to be evidenced by the signature of not
less than two directors of Lombard identifying such act or acts) may put at
risk the performance of the Hirer’s obligations under this agreement or
jeopardise Lombard’s interest in the Equipment;


 


(c)                                  if it is a limited company or a partnership,
not cause or allow any change in the Hirer’s control (as defined in section 840
of the Income and Corporation Taxes Act 1988).


 


3.11                           The Hirer will indemnify Lombard against any
liability or loss (including legal costs on a full indemnity basis) arising
from the possession or use of the Equipment by the Hirer or its ownership by
the owner or repossession by Lombard except where such liability or loss arises
as a result of Lombard’s default and negligence or that of the owner.


 


4.                                      Adjustments to Rentals


 


4.01                           The Hirer acknowledges that Lombard have
calculated the rentals payable in the Fixed Period on the assumptions that:


 


(a)                                  either a first year allowance, or if no rate
for this is shown in the Schedule, a writing down allowance will be made to the
owner on the whole of the expenditure incurred on the purchase of the Equipment
in the owner’s accounting period in which the Agreement Date falls; and


 


(b)           a writing down
allowance will be made to the owner on the unrelieved balance of that
expenditure brought forward in each succeeding accounting period of the owner
at the rate or rates shown in the Schedule (but if the Equipment is a private
motor car and the expenditure incurred is more than £12,000 excluding VAT where
appropriate any writing down allowance made to the owner will be restricted to
£3,000 or such other amounts as may be dictated by the relevant legislation
from time to time); and


 


(c)                                  no such first year allowance or writing down
allowance, having been made shall be withdrawn or the benefit of it reduced or
limited in any way whatsoever.


 


(d)                                 there will be no change in the nature, method or application of relevant
taxation in the United Kingdom.


 


(e)                                  if it states in the Schedule that this
assumption applies, Corporation Tax is and will continue to be chargeable at
the rate shown in the Schedule.


 


4.02                           If any of the assumptions referred to in
Clauses 4.01 (a) to (d) is incorrect other than by reason of any Schedule to
the Rental Agreement not being regarded as an Operating Lease by Lombard then if
the Hirer or Lombard require, each rental remaining to be paid in the Fixed
Period will be adjusted to the amount which Lombard certify to the Hirer is the
correct amount necessary to preserve Lombard’s after tax rate of return. If the
last rental payable in the Fixed Period has already been paid the Hirer will
pay


 

















 


on request an additional rental or Lombard will pay as soon as
practicable a rebate of rentals, in either case with VAT where appropriate, of
an amount certified on the same basis as above. Any amount certified will be
final and binding on the Hirer. Rentals will not be reduced or a rebate of
rentals paid to reflect any capital allowances (including writing-down
allowances) becoming available to Lombard in respect of the Equipment in
addition to or greater than those referred to in Clause 4.01(a) or at any
earlier time unless the additional or greater allowances are actually received
and can be used by Lombard.


 


4.03                           If
the assumption referred to in Clause 4.01(e) is incorrect the Hirer will pay to
Lombard or vice versa as appropriate an additional payment.  This is calculated by multiplying the total
of the Fixed Period rentals by the percentage shown in the Schedule below the
financial year for which the change taxes place and by multiplying the result
by the change in the percentage rate of Corporation Tax. The change in the
percentage rate will be a negative figure if Corporation Tax reduces and a
positive figure if Corporation Tax increases. If the additional payment is
negative, Lombard will pay it to the Hirer exclusive of VAT. If it is positive,
the Hirer will pay it to Lombard with VAT added. If the additional payment is
less than £50, it will be ignored.


 


4.04                           notwithstanding
any of the provisions of Clause 4.01 allowing Lombard to adjust the rentals
payable in the Fixed Period no adjustments shall be made to such amounts to the
extent that the same would or might otherwise be required by virtue of


 


(a)                                  the
owner failing to claim the full amount of the allowances due in respect of the capital
expenditure within the applicable time limits in respect of the relevant
accounting period and otherwise in accordance with the legislation relating to
the presentation of such claims; or


 


(b)                                 the
owner disclaiming the capital allowances available in respect of the capital
expenditure; or


 


(c)                                  the
owner or the group of which it is a member for the purposes of the provisions
for group relief contained in Income and Corporation Taxes Act 1988 (the “Group”)
having, or proving to have, inadequate taxable profits in respect of the
accounting period in question to enable the owner fully to utilise the capital
allowances available in respect of the capital expenditure or interest paid or
accrued or to surrender losses to other members of the Group of which it is a
member.


 


4.05                           If
the Hirer is of the opinion that any certificate issued by Lombard relating to
any adjustment in the rentals or any claim on the Hirer for payments other than
rentals contains an error Lombard and shall consult to resolve the dispute and
Lombard will provide detailed calculations at the Hirer’s reasonable request in
an effort to resolve such dispute but, if Lombard and the Hirer cannot agree
within 21 days of the issue of a certificate pursuant to Clause 4.02, Lombard
shall refer the certificate and the calculation to Lombard’s external auditors
who, acting as experts and not arbitrators, shall confirm the correctness or
otherwise of any such calculation and certificate. The costs of such referral
shall be borne by the Hirer unless the auditors advise that the total
adjustment should vary by more than the greater of £500 or 0.125% of the
aggregate amount certified pursuant to Clause 4.02 (excluding Value Added Tax)
in which event the costs shall be borne by Lombard;


 


5.                                      Insurance and Damage


 


5.01                           The
Hirer will insure the Equipment under the Hirer’s normal form of insurance and
undertake:


 


(a)                                  to
maintain insurance cover against damage or injury to third parties and to
maintain such insurance over the Equipment as is required by Law; and


 


(b)                                 to
indemnify Lombard and to keep Lombard indemnified at all times against all loss
or damage incurred or sustained by Lombard by reason of any damage to the
Equipment and to third parties by the use, operation or presence of the
Equipment unless by Lombard’s gross negligence or wilful misconduct.


 


6.                                      Total Loss and Termination


 


6.01                           If
there is a Total Loss the Hirer will tell Lombard immediately and Lombard and
the Hirer agree that this agreement will terminate automatically (but if only
one or more items of the Equipment and not all the Equipment suffers such Total
Loss then this agreement will terminate only in relation to the item or items
suffering such Total Loss) and the Hirer will immediately pay to Lombard the
amounts due on termination for Total Loss in respect of such Equipment under
Clause 9. If there is a Total loss of some of the Equipment only then subject
to the Hirer making a payment of such amount due under Clause 9 as
Lombard shall certify to the Hirer is attributable to those items of the
Equipment that have been the subject of a Total Loss the rentals remaining to
be paid by the Hirer in respect of the remaining Equipment shall be reduced by
such amount as Lombard certify to the Hirer to take account thereof. Any
certificate of the amount payable by the Hirer under the provisions of Clause 9
or rentals remaining to be paid following a Total Loss of other than all of the
Equipment shall take account of the value of the Equipment and any residual
value Lombard have assumed of those items the subject of the Total Loss and
those items remaining following such Total Loss and, save for manifest error,
the amounts certified shall be final and binding.


 

















 


6.02                           If
there is a Total Loss the Hirer will use its best endeavours to ensure prompt payment of any insurance proceeds
to Lombard.


 


7.                                      Repudiation


 


7.01                           The
Hirer will be treated as having repudiated this agreement if it:


 


(a)                                  fails
for more than 28 days to pay any rental or other sum due under this agreement;
or


 


(b)                                 breaches Clause 3.04, 3.05 or 3.10; or


 


(c)                                  fails for more than 30 days after a request
from Lombard to remedy any other breach of this agreement.


 


(d)                                 abandons
the Equipment or does anything which in Lombard’s opinion based on reasonable grounds
might jeopardise Lombard’s rights over the Equipment taken as a whole;


 


8.                                      Default;
Bankruptcy and Termination


 


8.01                           This
agreement and the hiring:


 


(a)                                  will
terminate automatically and Lombard may repossess the Equipment at any time if
the Hirer:


 


(i)  has a petition for a
bankruptcy order presented against them or an application is made against the
Hirer for an Interim order under the Insolvency Act 1986 (as amended by the
Enterprise Act 2002) which remains undismissed for a period of (thirty) 30 days
or such longer period as Lombard may specifically agree;


 


(ii)  files a petition to take
advantage of any insolvency, reorganisation, bankruptcy, receivership or
similar law, make an assignment for the benefit of creditors; commence a
proceeding for the appointment of a receiver, trustee, liquidator or
conservator for the Hirer or for the whole or any substantial portion of the
Hirer’s property;


 


(iii)  has a court of competent
jurisdiction enter an order, judgement or decree appointing a custodian,
receiver, trustee, liquidator or conservator for the Hirer or for a substantial
portion of the Hirer’s property and such order, judgement or decree continues
unstayed for a period of (thirty) 30 days or such longer period as Lombard may
specifically agree.


 


(iv)  has a court of competent
jurisdiction assume custody or control over them or the whole or a substantial
portion of the Hirer’s properties under any other law for the relief or aid of
debtors, which control is not relinquished within (thirty) 30 days or such
longer period as Lombard may specifically agree; and


 


(b)                                 may
be terminated by Lombard at any time by repossessing the Equipment or in any other way if the
Hirer repudiates this agreement.


 


9.                                      Payments on Termination


 


9.01                           On
any termination (including Total Loss) at this
agreement earlier than the date of expiry of the full Fixed Period of this
agreement shown in the Schedule (but in the case of a Total Loss of other than
all of the Equipment such proportion of the sums calculated in accordance with
this clause as Lombard shall certify to the Hirer under the provisions of
Clause 6.01 in accordance with the terms hereof) the Hirer will immediately
(but if termination is due to other than a breach of the agreement by the Hirer
on the next due date) pay Lombard, together with VAT, the aggregate of:


 


(a)                                  all
arrears of rentals and other sums due under this agreement together with
interest thereon calculated at the same rate as that stated in Clause 14.02;


 


(b)                                 as
compensation for Lombard’s full financial
loss a sum calculated as follows:


 


(i)  all rentals which would but
for termination of this agreement have become due and payable from the date of
such termination down to the end of the full Fixed Period;


 


(ii) such sum (if any) as Lombard shall certify to the Hirer to be the
difference between: 


 


(aa) the net proceeds of sale of the Equipment which Lombard would
expect to have become due to them from the buyer on completion of the sale of
the Equipment by Lombard following expiry of the full Fixed Period if this
agreement had continued for the full Fixed Period and the Hirer had strictly
observed and performed all the terms and conditions of this agreement, and 


 


(bb) the net proceeds of sale of the Equipment actually realised by
Lombard on the sale of the Equipment by Lombard following the said early
termination of this agreement which shall, if (aa) exceeds (bb) be payable by
the Hirer in addition to the sum referred to in sub-clause (b)(i) above or, if
(bb) exceeds (aa), be deducted from the said sum;


 


(iii) Lombard will allow a discount for accelerated payment on each
rental or other sum received by Lombard under this sub-clause (b) so that the
amount payable shall be such amount as Lombard shall certify to be the correct
amount necessary to preserve their rate of return on the after tax cashflow of
the Schedule to the Rental Agreement; and


 


(c)                                  Lombard’s
costs:


 


(i)  in relation to the said
early termination and of repossession, storage, insurance and disposal of the
Equipment;


 

















 


(ii)
 of servicing, providing replacement
parts and carrying out repairs which are needed to put the Equipment in good
condition following its return or repossession; or


 


(iii)
 resulting from any accidental,
deliberate or negligent damage to the Equipment;


 


(d)                                 where the event giving rise to the termination
is a Total Loss, the insurance proceeds received by Lombard will be deemed to be the sale proceeds for the purpose of
calculating the amounts due on
termination for Total Loss.


 


9.02                           Any certification of a sum or amount made by
Lombard pursuant to Clause 9.01 above will be conclusive and binding on the
Hirer, save in respect of manifest error.


 


9.03                           The Hirer’s obligations under Clause 9.01 will
be treated as if they had arisen immediately before and not after termination.


 


10.                               End of Fixed Period;
Extension of Rental and Return of Equipment


 


10.01                     Unless terminated under Clause 8.01 this
agreement will terminate automatically on expiration of the Fixed Period shown
in the Schedule and the Hirer will return the Equipment to Lombard as required by
Clause 10.03. If Lombard do not require the Hirer to provide storage in
accordance with Clause 10.04 or
any agreed storage arrangements have come to an end and the Hirer fails to
return the Equipment to Lombard on time the Hirer will pay to Lombard, together
with VAT thereon, an additional rental charge for each day from the date of
termination of this agreement to the date on which the Equipment is returned to
Lombard as required by Clause 10.03. The said rental charge will be calculated
by:


 


(a)                                  adding together all the rentals paid and
payable during the Fixed Period; and


 


(b)                                 multiplying the resulting figure by 150%; and


 


(c)                                  dividing the resulting figure by the number of
days which comprise the Fixed Period and for the purpose of this calculation a
year shall be deemed to comprise 360 days and a month shall be deemed to
comprise 30 days.


 


Such
additional rental shall be due on demand.


 


10.02                     If the Hirer wishes to use the Equipment after
expiry of the Fixed Period the Hirer must write to Lombard at
least one month before the date of expiry of the Fixed Period to request this.
Lombard will be under no obligation to agree to the Hirer’s request although
Lombard will notify the Hirer of Lombard’s decision as soon as possible.


 


10.03                     Immediately after termination of the hiring
the Hirer will return the Equipment to Lombard at any place within the United
Kingdom which Lombard may reasonably require.  All decommissioning, transportation, handling
and storage costs are to be borne by the Hirer and the Hirer will insure the Equipment
whilst in transit on the terms set out in Clause 5. The Equipment must be
returned in the same original, complete working condition that it was in when
originally supplied new and in particular (but without limitation), in a
condition and manner which complies with the requirements set out in the “Addendum
to Rental Agreement (for return conditions)” attached to this agreement.


 


10.04                     If Lombard shall so require the Hirer will
provide free and secure storage and insurance (on the terms set out in Clause 5)
for the Equipment for a period not exceeding 180 days after termination of the hiring
under this agreement. The Hirer will not use or allow anyone else to use the
Equipment during this period.  During
this period the Equipment must remain totally operational and the Hirer shall
provide adequate electrical power, lighting, heat, water and any other relevant
utility facilities. During the storage period the Hirer will permit Lombard or
any persons designated by Lombard, including the representatives of any
prospective purchaser of the Equipment, to inspect the Equipment and the
records maintained therewith. If requested to do so the Hirer will demonstrate
the Equipment to any prospective purchaser. 
If an auction of the Equipment is necessary, Lombard shall be permitted to
auction the Equipment on-site and in situ at a time reasonable to Lombard and
the Hirer.


 


11.                               Manufacturer’s or Supplier’s
Warranties and Exclusion of Liability


 


11.01                     If the Hirer does not obtain direct from the
manufacturer or supplier express warranties about the Equipment Lombard will at
the Hirer’s request and cost and on Lombard’s terms transfer to the Hirer so
far as possible the benefit of any manufacturer’s or supplier’s express
warranties of fitness and performance of the Equipment given to Lombard.


 


11.02                     (a)                                  EXCEPT AS MENTIONED IN SUB-CLAUSE (b) BELOW,
SINCE THE EQUIPMENT HAS BEEN CHOSEN BY THE HIRER AND HAS NOT BEEN INSPECTED BY
LOMBARD, LOMBARD DOES NOT MAKE OR GIVE ANY REPRESENTATION OR UNDERTAKING
EXPRESS OR IMPLIED AS TO THE CONDITION, DESCRIPTION, QUALITY OR PERFORMANCE OF
THE EQUIPMENT OR AS TO ITS FITNESS FOR ANY OR ANY PARTICULAR PURPOSE.  ALL SUCH REPRESENTATIONS AND UNDERTAKINGS ARE
SPECIFICALLY EXCLUDED.


 


(b)                                 NO LIABILITY (EXCEPT FOR DEATH OR PERSONAL
INJURY RESULTING FROM LOMBARD’S NEGLIGENCE) WILL ATTACH TO LOMBARD IN CONTRACT
OR IN TORT. FOR LOSS, INJURY OR DAMAGE SUSTAINED BY ANY REASON OF ANY DEFECT IN
THE EQUIPMENT WHETHER LATENT OR APPARENT AND HOWEVER CAUSED.


 

















 


11.03                     Lombard
will not be obliged to supply any replacement for the Equipment and will not be
liable for any loss including loss of earnings or profits suffered by the Hirer
if the Equipment is or becomes
unusable.


 


12.                               Sales Agency


 


12.01                     Up
until a date three months after the expiry
of the Fixed Period (or such later date as Lombard shall notify the Hirer
provided the Hirer has made the payment to Lombard as required in Clause 12.07)
or the date of any earlier termination of the hiring under this agreement but
not otherwise, the Hirer will use all reasonable endeavours to sell the
Equipment for the highest value possible acting as Lombard’s agent within the
three months ending with such expiry or termination. If the Hirer has not sold the
Equipment within the said three months then the Hirer will return the Equipment
to Lombard or otherwise deal with the Equipment (as Lombard may require) in
accordance with Clause 10 of this agreement.


 


(a)                                  in
the event of a termination of the hiring under this agreement pursuant to
Clause 8.01, if Lombard are in possession of the Equipment Lombard shall try
and sell it, or if the Hirer is still in possession of the Equipment Lombard
may at their option require the Hirer use all reasonable endeavours to sell the
Equipment for the highest value possible within an agency period specified by
Lombard


 


(b)                                 the
sale of the Equipment by the Hirer shall be in the name of the Hirer, either to
a buyer who requires the Equipment for business use who is not connected or
associated with either the Hirer or any sub-lessee of the Equipment and who is willing
and able to buy the Equipment for cash for at least its fair market value in
which case the sale will comply will Lombard’s applicable Standard Conditions
of Sale, a copy of the current form is attached hereto (or such other
conditions as Lombard may advise in writing), or at a public auction.


 


(c)                                  the
sale will be for a price greater than the Minimum Sale Price shown in the Schedule to the Rental
Agreement exclusive of VAT where appropriate or such other minimum sale price as
Lombard may agree with the Hirer in writing from time to time, or for such
lesser price without Lombard’s prior written permission, provided that the
Hirer makes good the shortfall.


 


(d)                                 it
is agreed and acknowledged that if the Hirer does not accept the change in the
minimum sale price for the Equipment from time to time and on receipt of such
notice the Hirer may at the Hirer’s option return the Equipment to Lombard at the
expiry of the Fixed Period and the Hirer will no longer act as Lombard’s agent
for the sale of the Equipment.


 


12.02                     At
Lombard’s request, the Hirer will provide Lombard with copies of the Hirer’s
VAT invoice or invoices to the purchaser or copies of the sales invoice from
the auctioneer as appropriate. Lombard shall issue the Hirer with an invoice
for the sale price of the Equipment plus VAT (if applicable) or the Hirer will
raise a Self-Billed Invoice upon Lombard should the Hirer be approved by H.M
Customs and Excise to do so and where the Equipment is a motor car, such
invoice must be issued no later than the last working day of the month in which
the Hirer sells the motor car as Lombard’s agent and must be sent to Lombard so
that Lombard receives it within 10 days of that month end.


 


12.03                     if in the case of termination under
Clauses 2.01, 6.01 or 8.01 of this agreement the Hirer has complied with Clause
9.01 or the Hirer has paid Lombard any sums due under the provisions of 12.07
Lombard will pay to the Hirer a Rebate of Rentals which is the amount by which
the proceeds of sale exceeds the Minimum Sale Price shown in the Schedule to
the Rental Agreement but, in the case of a payment under the provisions of
Clause 12.07 the Minimum Sale Price shall be deemed to be zero.


 


12.04                     The
net proceeds of sale of the Equipment will be as defined in Clause 14.13 of
this agreement.


 


12.05                     The
Hirer’s obligations under Clauses 10.01,10.02 and 10.04 of this agreement will
commence on the expiry of this agency for sale or Lombard’s earlier termination
of such agency.


 


12.06                     If
during any period of three consecutive months ending on the 31 March, 30 June,
30 September and 31 December in any year the Net Proceeds of Sale of Equipment
sold by the Hirer under the provisions of this Clause should fall short of the
Minimum Sale Price the Hirer will, at the end of such period, immediately pay
to Lombard a sum equal to the amount by which the Net Proceeds of Sale of such
Equipment falls short of the Minimum Sale Price provided that the aggregate of
such shortfalls paid to Lombard shall be limited to the aggregate of the Rebates
of Rentals paid in respect of each and every item of Equipment sold by the
Hirer under this Clause in such period. For the purposes of this Clause the Net
Sales Proceeds of an item of Equipment the subject of a voluntary termination
or a Total Loss shall be deemed to be the Minimum Sale Price provided the Hirer
has paid to Lombard all sums due to them in respect of that item of Equipment;


 


12.07                     (a)
In order that the Hirer shall not be regarded as in breach of the terms of the
Schedule to the Rental Agreement the Hirer will pay to Lombard on the date
shown in the Schedule to the Rental Agreement as the Payment Date on account of
the actual Sales Proceeds of an Equipment Account Monies equivalent to the
Minimum Sale Price which Lombard shall not be obligated to repay under any circumstances.
The payment of these Account Monies shall be in addition to any rental or other payment properly payable to
Lombard.


 

















 


(b)  The Hirer undertakes,
promptly on disposal of each item of the Equipment, but in any event no later
than 10 days after the end of the calendar month following the disposal of each
item of the Equipment to account to Lombard in full for the actual Sales
Proceeds of an item of the Equipment and shall be entitled to deduct from the
actual Sales Proceeds any Account Monies paid in respect of the relevant item
of the Equipment.


 


(c)  If the Hirer has paid such
Account Monies to Lombard then, provided all of the Equipment on the Schedule
to the Rental Agreement is sold on or before the first anniversary of the year
end of Lombard following the Agreement Date of the Schedule to the Rental
Agreement (as advised by Lombard if so required by the Hirer) there shall be no
additional Fixed Period Rental under the Schedule to the Rental Agreement
payable by the Hirer and those Account Monies shall be regarded as the rental applicable
from the date of payment until the date the Equipment is disposed of.


 


(d)  If the Hirer has not
disposed of an item of the Equipment on or before the first anniversary of the
year end of Lombard following the Agreement Date of the Schedule to the Rental
Agreement (as advised by Lombard if so required by the Hirer) the Hirer shall
pay to Lombard, if demanded by Lombard, on the next day an additional Fixed
Period Rental of the amount specified in the Schedule multiplied by the
Expenditure incurred as advised by Lombard and divided by 1000. Lombard will make
such a demand only in respect of that Equipment that has not been sold prior to
this date.


 


(e)  Lombard are willing to
aggregate the Actual Sales Proceeds used in the calculation of the additional
Fixed Period Rental pursuant to Clause 13 and, as such, Lombard will perform
the calculations at the end of the calendar quarter in which the first
anniversary of the Agreement Date falls in respect of all Equipment sold prior
to that time and not previously the subject of the calculation of the Additional
Fixed Rental pursuant to Clause 13, and at the end of each calendar quarter
thereafter until all of the Equipment the subject of a Schedule to Rental
Agreement is sold. Such aggregation shall only include those Schedules to
Rental Agreements which have Agreement Dates in the same calendar quarter.


 


13.                               Disposal Value Assumptions.


 


13.01                     The
rentals shown in the Schedule to the Rental Agreement payable during the Fixed
Period of the Schedule to the Rental Agreement are, in addition to the
provisions of Clause 4, calculated on the assumption that the Disposal Value
will not be less than the Assumed Percentage as at the date of the sale or other
disposal of the Equipment after termination of the Schedule to the Rental
Agreement.


 


13.02                     If
the assumption referred to in 13.01 is incorrect the Hirer will within seven
days of receipt of written demand made by Lombard shall pay to Lombard an additional
Fixed Period rental (with V.A.T.) of an amount calculated by working the
following formula:-


 


	
  Amount of the additional Fixed Period rental

  	
  =

  	
  (AA x EI) x
  (AP - AcP)

  
	
   

  	
   

  	
  1000

  	
   

  



 


13.03                     The
contents of a written demand made
by Lombard pursuant to 13.02 shall, save for manifest error, be final and
binding on the Hirer and their obligation to pay the additional rental so
demanded shall survive termination of the Schedule to the Rental Agreement.


 


13.04.                  For the purposes of this Clause


 


(i)  “Expenditure Incurred” (or “EI”)
means the amount of the expenditure incurred by the owner of the Equipment on purchase of the Equipment.


 


(ii) “Disposal Value” means the disposal value to be brought into
account by the owner of the Equipment following the sale or other disposal of
the Equipment after termination of the Schedule to the Rental Agreement.


 


(iii)  “Assumed Percentage” (or “AP”)
means at the date of the demand made by Lombard, the figure, expressed as a
number, shown in the Schedule to Rental Agreement next to the number of
complete months expired since the Agreement Date of the Schedule to the Rental
Agreement.


 


(iv)  “Adjusted Amount” (or “AA”)
means at the date of the demand made by Lombard the amount shown in the
Schedule to Rental Agreement next to the number of complete months expired
since the Agreement Date of the Schedule to the Rental Agreement


 


(v)  “Actual Percentage” (or “AcP”)
means the figure expressed as a number, ascertained by dividing the Disposal
Value by the Expenditure incurred and multiplying the result by one hundred.


 


14.                               General


 


14.01                     The
Hirer confirms that the information provided by the Hirer and shown in the
Schedule is true and the Hirer acknowledges and agrees that such information
will be treated as if it were terms of this agreement.


 


14.02                     If
the Hirer fail to pay any sum due on time Lombard will charge the Hirer daily
interest on that sum at the rate Finance House Base Rate from time to time for
the first 10 days of non payment and thereafter at Finance House Base Rate plus
5%. Interest will be charged from the date for payment until
actual


 

















 


payment.
This provision will apply both before and after any court judgement Lombard may
obtain against the Hirer and will survive and apply after termination.


 


14.03                     If the Hirer incurs any liability (whether
liquidated or unliquidated) under any rental agreement but not otherwise to
Lombard or Lombard’s holding company or any of Lombard's subsidiaries (as such
expressions are defined in section 736 or 736A of the Companies Act 1985) Lombard
may set off such liability against any sum that would otherwise be due to the
Hirer under any other rental agreement.


 


14.04                     All notices and other communications under
this agreement shall be in writing and shall be deemed to be given


 


(i)
when delivered in person, or


 


(ii)
when sent by telecopier, telex, or other telegraphic means (with receipt
confirmed), or


 


(iii)
on receipt after being sent by express mail or delivery service guaranteeing
overnight delivery  provided
that in each of (i), (ii) and (iii) a copy is mailed by first class registered
or certified mail, postage
prepaid, return receipt requested, in each case addressed as follows:


 


	
  if to the
  Hirer

  	
   

  	
  Vanguard
  Rental (UK) Ltd

  
	
   

  	
   

  	
  James House

  
	
   

  	
   

  	
  55 Welford
  Road

  
	
   

  	
   

  	
  Leicester

  
	
   

  	
   

  	
  LE2 7AR

  
	
   

  	
   

  	
   

  
	
  end solely
  in the case of clause 8

  	
   

  	
  Vanguard Car
  Rental EMEA Holdings Limited

  
	
   

  	
   

  	
  James House

  
	
   

  	
   

  	
  55 Welford
  Road

  
	
   

  	
   

  	
  Leicester

  
	
   

  	
   

  	
  LE2 7AR

  
	
   

  	
   

  	
  For the
  attention of the Legal Counsel

  
	
   

  	
   

  	
   

  
	
  if to
  Lombard

  	
   

  	
  Lombard
  North Central Plc

  
	
   

  	
   

  	
  3 Princess
  Way

  
	
   

  	
   

  	
  Redhill

  
	
   

  	
   

  	
  Surrey

  
	
   

  	
   

  	
  RH1 1NP

  
	
   

  	
   

  	
  England

  
	
   

  	
   

  	
  Attention:
  Managing Director Lombard Business Finance Telecopier: 01737-776324

  



 


or
to such other person or address as any such party shall furnish by notice to
the other parties in writing. Notices need not be given or made by an officer
of either party but shall be deemed sufficiently given if made by the counsel
of such party, and all of such notices shall be deemed in compliance hereof
provided only that they be given in the manner specified herein.


 


14.05                     If the Hirer is more than one person the Hirer’s
obligations will be binding on each person separately and all persons jointly.


 


14.06                     Lombard’s rights under this agreement will not
be affected by any forbearance or concession made by Lombard to the Hirer.


 


14.07                     In negotiations for this agreement only
persons expressly authorised in writing by Lombard have had authority to act as
Lombard’s agent.


 


14.06                     This agreement contains all the terms agreed
between Lombard and the Hirer except variations recorded in writing and signed
by Lombard’s authorised employee and the Hirer.


 


14.09                     The Hirer will not assign this agreement.
Lombard may only assign this agreement to a member of The Royal Bank of
Scotland group of companies from time to time.


 


14.10                     For the purposes of UK taxation and
irrespective of the accounting treatment adopted by the Hirer, the Hirer is not
entitled to claim capital allowances on the Equipment.


 


14.11                     The Hirer’s obligation to indemnify Lombard
under Clause 3.11 to pay Lombard interest under Clause14.02 and to pay Lombard
an additional rental or payment under Clause 4.02, 4.03 or 10.01 will not be
affected by any termination of this agreement.


 


14.12                     The Hirer will pay Lombard on demand Lombard’s
charges for changing the terms of this agreement or providing additional
services at the Hirer’s request and for reminding the Hirer about or dealing
with any failure by Lombard to comply with the terms of this agreement. Details
of Lombard’s charges are available on request and will be notified to the Hirer
in any event before the Hirer is charged.


 


14.13                     For the purpose of Clause 9.01 the net
proceeds of sale of the Equipment will be the proceeds from selling the
Equipment after deducting VAT, any costs of repossession, repair, storage,
insurance, sale and delivery to the buyer, and any other costs incurred.


 

















 


14.14                     As
an intermediary with the European Investment Bank (“EIB”) Lombard may be able
to obtain partial funding from the EIB in respect of this agreement, whereupon
clause 14.15 will apply.


 


14.15                     If
partial funding from the EIB is obtained in accordance with clause 14.14, the
Hirer irrevocably agrees to European Investment Bank personnel (accompanied by
Lombard’s representatives) visiting the location of the Equipment from time to
time and upon reasonable prior notice being given in order to appraise
themselves of the general nature of the transaction and the use of the
Equipment;


 


14.16                     Reference
in this agreement to a statutory enactment is deemed to be a reference to any
re-enactment thereof in force for the time being.


 


14.17                     The
Hirer will respect national and EC regulations with regard to protection of the
environment at the location in which the Equipment is situated.


 


14.18                     The
Hirer must not be a party in any legal proceedings brought by the EC
Commission.


 


14.19                     This
agreement will also incorporate the terms of any Addenda signed by the Hirer
and Lombard.


 

















 


Standard Conditions of Sale


 


Part 1 -
Consumer Sales


 


1.                                       Nothing in these conditions of sale affects
either the statutory rights of the Buyer in respect of the Equipment or the
Seller’s liability for death or personal injury to the Buyer resulting from the
Seller’s negligence.


 


2.                                       Title to the Equipment shall pass to the Buyer
upon payment to the Seller of the purchase price, but if payment is made by cheque
title shall not pass to the Buyer until the cheque has been honoured.


 


3.                                       If before the sale the Equipment have been
supplied by the Seller to a lessee (“the Lessee”) under a leasing agreement the
Buyer warrants (and it is a condition of any sale to him) that the Buyer is not
the Lessee or an agent, trustee or nominee of the Lessee, or an associate of,
or a person connected with, the Lessee nor will the Buyer subsequently sell the
Equipment to any such person or to the Lessee.


 


4.                                  The Buyer will at the Buyer’s cost remove the
Equipment, wherever located, within 14 days of the sale.


 


5.                                  English law is the law applicable to the sale.


 


6.                                  The foregoing conditions contain all the terms
agreed except any written variations signed by an authorised signatory of the
Seller and the Buyer.


 


Part 2 -
Business Sales


 


1.                                       The Buyer warrants that the Equipment are
being purchased in the course of the Buyer’s business.


 


2.                                       The Equipment are not sold with the benefit of
or subject to any condition or warranty express or implied by statute or
otherwise.


 


3.                                       The Buyer shall indemnify the Seller on a full
indemnify basis against any liability (other than liability for death or
personal injury resulting from the negligence of the Seller) or loss (including
legal costs) arising at any time from the sale of the Equipment. The Buyer
agrees that where the Equipment are vehicles the Buyer will not use the
Equipment on a road in Great Britain in such a condition that their use in that
condition would be unlawful.


 


4.                                       Title to the Equipment shall pass to the Buyer
upon payment to the Seller of the purchase price, but if payment is made by
cheque title shall not pass to the Buyer until the cheque has been honoured.


 


5.                                       If before the sale the Equipment have been
supplied by the Seller to a lessee (“the Lessee”) under a leasing agreement the
Buyer warrants (and it is a condition of any sale to him) that the Buyer is not
the Lessee or an agent, trustee or nominee of the Lessee, or an associated
company or an associate of, or a person connected with, the Lessee nor will the
Buyer subsequently sell the Equipment to any such person or to the Lessee.


 


6.                                       In the negotiations for the sale no third
party not expressly authorised in writing by the Seller has any authority to
act as the Seller’s agent.


 


7.                                       If requested by the Seller the Buyer will give
an undertaking in such form as the Seller shall require about the location and
use of the Equipment to enable the Seller to comply with any undertaking
required of it by any Governmental or other authority.


 


8.                                       The Buyer will at the Buyer’s cost remove the
Equipment, wherever located, within 14 days of the sale and indemnifies the
Seller against any resultant damage caused to third parties.


 


9.                                       English law is the law applicable to the sale.


 


10.                                 The foregoing conditions contain all the terms
agreed except any written variations signed by an authorised signatory of the
Seller and the Buyer.


 

















 


Addendum to Rental
Agreement (for return conditions)


 


the following shall be the conditions for the
return of the Equipment as referred to in clause 10.03 of the Agreement:


 


1.                                      General


 


a)                                      Non Compliance with these Return
Conditions


 


i)                                         If
when returned the Equipment does not satisfy the conditions set out herein,
Lombard shall be entitled to have any necessary restoration work carried out
and the Hirer agrees to pay all costs, charges and fees that may relate to that
restoration.


 


b)                                      Overall
condition


 


i)                                         The
Equipment must be returned thoroughly valeted and in good repair and condition
allowing for fair wear and tear.


 


c)                                      Servicing and documentation


 


i)                                         The
Equipment instruction book, full service record, maintenance agreements,
current certificates, licences, registrations, permits and authorisations,
required by any United Kingdom or European Community statutory authority and
any other documents relating to the Equipment are the Hirer’s responsibility
and must be intact and available. All documents must be in the Equipment on its
return including any details of radio codes.


 


ii)                                      The
Equipment shall comply with all legal requirements required by any United
Kingdom or European Community statutory authority and be fit for use on the
roads of Great Britain and shall have a current valid Ministry of Transport
Test Certificate appropriate for the class of Equipment with a minimum of six
months until expiry


 


d)                                      Additional equipment


 


i)                                         If
accessories such as telephones, radios or other non-standard equipment have
been installed and then removed, any holes or damage should be made good to a
professional standard. Aerials must be left in place or the hole repaired.


 


ii)                                      All
standard equipment including any tools and spare wheel (or replacements) as
originally equipped must also be returned secured property.


 


e)                                      Badges and labels


 


i)                                         Non-standard
badges, labels decals, or advertising fitted to the bodywork or glass of the
Equipment must be removed, with any damage caused by their attachment or
removal made good. Any paint work colour fade due to the attachment of
advertising will be chargeable to the Hirer. Signwriting must never be painted
directly onto the Equipment.


 


f)                                        Keys
and security


 


i)                                         If
the Equipment was originally supplied with a security system, this must be
intact and fully operational.


 


ii)                                      Any
additional security system must be fitted according to a recognized standard,
i.e. the Vehicle Security Installation Board (VSIB).


 


iii)                                   The
following security equipment must be returned with the Equipment:


 


a)                                      A
full set of keys including appropriate fully functional key fobs, if the locking
system is remote.


 


b)                                     A
note of all key numbers.


 


c)                                      Any
master key which controls the engine management system of the Equipment.


 


2.                                      Exterior


 


a)                                      Body
damage


 


i)                                         Any
damage must be repaired as and when it occurs. All work must be completed to a
professional standard, ensuring that any applicable anti-corrosion guarantees
are not invalidated. Obvious evidence of repair such as colour, mismatch or
misalignment between panels is unacceptable.


 


b)                                      Dents


 


i)                                         Minor
dents (up to 10 mm long) are acceptable provided the paint surface has not been
penetrated so that bare metal is visible or corrosion has set in. If multiple
dents occur on a single panel, no matter how small, the panel should be
repaired or replaced.


 

















 


c)                                      Paintwork


 


i)                                         Small
areas of stone chipping, door edge chipping and light scratches (up to 25 mm
long) are acceptable, relative to the age and mileage of the Equipment, as long as they have not penetrated through
to the base metal and caused corrosion. If stone chippings have penetrated
through the metal, suitable touching up should be carried out immediately to
prevent further paint deterioration. Exterior paintwork should be free from
major abrasions (more than 25 mm long) and have good gloss and colour. Colour
mismatch between panels, or poorly fitting panels, are unacceptable. All
repairs to the body work must be suitably re-rust proofed to the manufacturers
recommended standards.


 


d)                                      Bumper sections and rubbing
strips


 


i)                                         Provided
these are not broken, cracked or deformed a limited amount of scuffing and
score marks is acceptable.


 


e)                                      Window and mirror glass


 


i)                                         Cracks
or damage to the windscreen within the driver’s sight line are not acceptable
and the Hirer must replace the windscreen or, if relatively minor, repair using
resin impregnation to M.O.T. standards. Light scratches and minor chipping
around the periphery of the windscreen is accepted as fair wear and tear.


 


ii)                                      All
other windows and mirrors, which are defaced, cracked, damaged, broken or
missing must be replaced. 


 


f)                                        Lamp
glasses/lens


 


i)                                         All
lamps including service lamps must operate correctly. Minor scuff marks or
scratches are acceptable, but holes or cracks in the glass or plastic covers
are not and must be replaced.


 


3.                                      Interior


 


a)                                      Interior trim


 


i)                                         The
interior should be clean and tidy with no visible burns, tears or permanent
staining to the seats, headlining or carpets. Wear and solling through normal
use is accepted, as are any repairs that are not readily visible.


 


b)                                      Luggage area


 


i)                                         Surface
scoring and light blemishes that reflect normal use are acceptable, but floor
coverings and surrounding trim
panels should not be torn or split.


 


c)                                      Car
derived vans


 


i)                                         For
car derived vans it is recommended that the Hirer fits at their cost a lining
in the load area to prevent serious damage to panels and doors of the Equipment.


 


d)                                      Door
aperture tread area


 


i)                                         A
reasonable amount of scuffing to the door and luggage area treads and sills is
acceptable provided paintwork has not been damaged down to bare metal and
aperture seals are not torn.


 


e)                                      Controls


 


i)                                         All
original controls must be intact and operate correctly. If replacement has been
necessary, e.g. due to theft, then equipment of a similar value and
specification, preferably of the same manufacture as the original, should have
been fitted.


 


f)                                        Rubber
seals


 


i)                                         If
a seal becomes displaced it should be refitted immediately to avoid it becoming
trapped or torn and any evidence of neglect or abuse is unacceptable.


 


4.                                      Underside


 


a)                                      Underside


 


i)                                         Minor
dents and deformation, such as stones damage, is acceptable as long as it has
not caused major corrosion. Any suspected impact damage should be investigated
and dealt with professionally, as significant damage or distortion to chassis
components is not acceptable.


 


b)                                      Exhaust
system


 


i)                                         The
system should be properly suspended and in efficient working order, with no gas
leaks or evidence of blowing from the exhaust system joints and in an undamaged
condition. The exhaust system should be in a condition to meet the MOT
requirements in all aspects, particularly if fitted with a catalytic converter
(CAT). CAT failure is unacceptable and preventable through:


 


a)                                      using
the correct fuel


b)                                     regular
servicing and maintenance


c)                                      immediately
investigating any poor running symptoms


d)                                     towing or bump starting the Equipment


 

















 


c)                                      Oil leaks


 


i)                                         Any serious oil leakage should be rectified
at the earliest opportunity. Some minor oil misting or dampness around seals or
gaskets is acceptable, provided oil drips are not present.


 


d)                                      Wheels and wheel trims


 


i)                                         Dents or damage to the rim or main body of the wheels are not
acceptable. All wheel trims must be intact, with no more than minor scuffing
due to everyday use. If mudflaps are standard equipment they must all be intact
and properly attached.  The spare wheel, jack
and appropriate wheel tools must be stowed properly and be in good working
order.


 


e)                                      Tyre wear and damage


 


i)                                         All tyres, including the spare, must be in a
legal condition and comply with the Equipment manufacturer’s recommendations of
tyre type, size and speed rating and shall have no less than 3 mm of the
original tyre tread depth remaining across the tread width. There should be no
obvious damage to sidewalls or tread caused by ‘kerbing’ or other heavy abuse.


 


5.                                      Mechanical Condition


 


a)                                      Servicing


 


i)                                         The following examples are conditions usually
caused by neglect or abuse and therefore are not regarded as fair wear and tear:


 


a)                                      Brakes: Grooved brake discs caused by metal
to metal contact.


b)                                     Engine: Seized due to running with
insufficient coolant, lubricating oil or with broken internal components.


c)                                      Transmission: Slipping, erratic gear
changing, clutch slipping, noisy transmission or ineffective synchromesh.


 


b)                                      Batteries


 


All
batteries must be maintained in a clean condition and must be capable of
holding a full charge for at least 24 hours so as to enable any engine to be
started from cold. It must be sound by industry standards with no dead cells,
cracked or leaking casings or evidence of corrosion and must be correctly
filled with a proper electrolyte solution.


 

















 


Subletting Appendix


 


The following
are the terms under which Lombard agrees that Sub-Letting will be permitted:


 


1.                                       The
Hirer will indemnify Lombard and keep Lombard indemnified at all times against
all loss or damage howsoever caused as a result of Lombard granting this
consent.


 


2.                                       Possession
of the Equipment shall only be given to the Hirer’s customers from time to time
(each the “Sub Lessee”)  after the Sub
Lessee has entered into a sub-letting agreement (“the Sub Letting Agreement”)
with the Hirer in respect of the Equipment in the form approved by Lombard from
time to time such approval not to be unreasonably withheld.


 


3.                                       The
duration of the Sub-Letting Agreement shall not extend for a period longer than
the Fixed Period then unexpired of the Schedule less one day.


 


4.                                       The
Hirer agrees not to deal in the Equipment in such a manner that would prejudice
Lombard’s title in the Equipment.


 


5.                                       during
the currency of the Sub-Letting Agreement but not otherwise Lombard is prepared
to waive its requirement that the Hirer insures the Equipment provided that


 


(i)                                     the
Hirer requires in the Sub-Letting Agreement and procures that throughout the
period of the Sub-Letting Agreement the Sub-Lessee will insure


 


(a) the Equipment and keep them effectively insured during the currency
of the Sub-Letting Agreement to their full replacement value under a policy of
insurance without restriction or excess (and that Lombard’s interest as owners
of the Equipment is noted on such policy); and


 


(b) the Hirer and the Sub-Lessee against all liability to the employees
of the Sub-Lessee and to third parties for damage caused by the Equipment or
the use or operation of them; and


 


(ii) the Hirer will Indemnify Lombard and keep Lombard fully
indemnified against all loss or damage incurred or sustained by Lombard by
reason of any loss, injury or damage to the Equipment or to third parties by
the use or operation or presence of the Equipment or as a result of Lombard
agreeing to such modification;


 


6.                                       Lombard
reserves the right to carry out an audit from time to time of all of the
relevant books and records concerning the Schedule and the Equipment upon
Lombard giving reasonable notice for the purpose of ensuring that the Hirer is
complying with all of its obligations
under the Schedule.