Exhibit 10.27


 


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


 


of 3 Princess Way Redhill Surrey RH1 1NP


 


and NATIONAL CAR RENTAL 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 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 Addanda specifically referring to that Rental
Agreement.


 


5.                                       The terms of the a copy of which is attached
hereto shall continue to apply to all Leases that have been made to the terms
of the Master Agreement dated 5 October 1993 and, additionally, to all Rental
Agreements written to the terms of this agreement.


 


6.                                       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 47 (1) of the Finance (No2) Act 1997
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


PHOTOCOPY
OF THE DEED DATED 22 JANUARY 1996


 


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


 


	
  Accepted by the Hirer

  	
   

  	
  Accepted by Lombard

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  
	
  Status

  	
  Director

  	
   

  	
  Status

  
	
   

  	
   

  	
   

  
	
  Date

  	
  23/3/99

  	
   

  	
  Date

  



 

















 


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.


 


2.                                      The Hiring; Rentals; Delivery
of the Equipment


 


2.01                           We agree to hire and you agree 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 you shall have no right to
terminate the hire earlier than a date 3 months from the Agreement Date. If you
wish to terminate the hiring after that date you will give us one months notice
and pay to us the amounts calculated in accordance with Clause 9.01 or for before
the next rental payment date.


 


2.02                           You will pay us at our 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 your own risk. Punctual payment shall
be of the essence of this agreement.


 


2.03                           You will accept delivery of the Equipment only
if it is satisfactory. If the Equipment is unsatisfactory you will notify us
immediately by fax. If we do not receive a fax from you within 48 hours of
delivery it will be conclusively presumed that you have accepted the Equipment
and that it is completely satisfactory.


 


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


 


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


 


3.01                           You 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                           You will at your 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. You
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 as between us and you will
remain personal and moveable property. You will ensure that we or our 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 you will at our request demonstrate the Equipment to any
potential purchaser and allow them to inspect the Equipment and all related
records. You will tell us immediately if you change your address. You will not
take the Equipment outside Great Britain without our 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                           You 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                           You will not let anyone obtain any rights over
the Equipment or let anyone take or threaten to take it to pay any of your
debts and, in our opinion, such threat is likely to succeed. You will keep the
Equipment in your possession and under your control and you will not sell,
transfer, mortgage, lend, let, subject (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 our previous
written approval (deemed to be given in respect of temporary use of the
Equipment by any United Kingdom holding company of yours or any United Kingdom
subsidiary of such holding company within the meaning of section 736 of the
Companies Act 1985 on terms that such holding company or subsidiary must
deliver up possession of the Equipment to us or the owner immediately on demand
or earlier termination of the hiring under this agreement).


 


3.06                           You 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 you or we are
aware of such use, it shall be regarded as a repudiation of this agreement.


 


3.07                           You will not make any alterations to the
Equipment without our prior written consent unless you are obliged to do so by
law. Any addons, upgrades, accessories, alterations or replacements will become
the property of the owner of the Equipment and subject to this agreement.


 


3.08                           You will not change the usual location of the
Equipment from the location shown in the Schedule without our written consent.


 


3.09                           You will maintain or cause to be maintained in
full force and effect all certificates licenses, 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                           You 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 us. 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 you may have with us or Lombard North Central PLC (whether
before or after the date hereof) or any of its subsidiaries or any of our
subsidiaries or any member of the National Westminster Bank PLC group of
companies from time to time (as such expressions are defined in section 736 of
the Companies Act 1985) and which ican, instalment credit, rental, hire or
leasing agreement has an outstanding aggregate amount 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 we reasonably believe (such belief to be evidenced by the signature of
not less than two directors of Lombard North Central PLC identifying such act or
acts) may put at risk the performance of your obligations under this agreement
or jeopardise our interest in the Equipment;


 


(c)           if you are a limited company or a
partnership, not cause or allow any change in your control (as defined in
section 840 of the Income and Corporation Taxes Act 1988).


 


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


 


4.                                      Adjustments to Rentals


 


4.01                           You acknowledge that we 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 sale or sales 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)       lf 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 assumption 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 us then if you or
we require. each rental remaining to be paid in the Fixed Period will be
adjusted to the amount which we certify to you is the correct amount necessary
to preserve our after tax rate of return. If the last rental payable in the Fixed Period has already been
paid you will pay on request an
additional rental or we 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 you. Rentals
will not be reduced or a rebate of rentals paid to reflect any capital
allowances (including writing-down allowances) becoming available to us in
respect of the Equipment in addition to or greater than those referred to in
Clause 4.0l(a) or at any earlier time unless the additional or greater
allowances are actually received and can be used by us.


 


4.03                           If the assumption referred to in Clause 4.0l(e)
is incorrect you will pay to us 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 takes 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, we will pay it to you exclusive
of VAT. If it is positive, you will pay it to us 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 us 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 you are of the opinion that any certificate
issued by us relating to any adjustment in the rentals or any claim on you for
payments other than rentals contains an error we and you shall consult to
resolve the dispute and we will provide detailed calculations at your
reasonable request in an effort to resolve such dispute but, if we and you
cannot agree within 21 days of the issue of a certificate pursuant to Clause
4.02, we shall refer the certificate and the calculation to our 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 you 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 us;


 


5.           Insurance
and Damage


 


5.01        You will insure the Equipment under your
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 us and to keep us indemnified at all times against all loss or
damage incurred or sustained by us by reason of any damage to the Equipment and
to third parties by the use, operation or presence of the Equipment unless by
our gross negligence or wilful misconduct.


 


 

















 


6.                                      Total Loss and Termination


 


6.01                           If there is a Total Loss you will tell us
immediately and we and you 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 you will
immediately pay to us 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 you making a payment of such amount due under
Clause 9 as we shall certify to you is attributable to those items of the
Equipment that have been the subject of a Total Loss the rentals remaining to
be paid by you in respect of the remaining Equipment shall be reduced by such
amount as we certify to you to take account thereof.


 


Any
certificate of the amount payable by you 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 we 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 you will use your
best endeavours to ensure prompt payment of any insurance proceeds to us.


 


7.                                      Repudiation


 


7.01                           You will be treated as having repudiated this agreement
if you:


 


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


 


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


 


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


 


(d)              abandon the Equipment or do anything which in
our opinion based on reasonable grounds might jeopardise our 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 we may
repossess the Equipment at any time if you:


 


(i)
have a petition for a bankruptcy
order presented against you or an application is made against you for an
interim order under the Insolvency Act 1986 which remains undismissed for a period
of (thirty) 30 days or such longer period as we may specifically agree: 


 


(ii)
file 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 you or for the whole or any substantial portion
of your property; 


 


(iii)
have a court of competent jurisdiction enter an order, judgment or decree
appointing a custodian, receiver, trustee, liquidator or conservator for you or
for a substantial portion of your property and such order, judgement or decree
continues unstayed for a period
of (thirty) 30 days or such longer period as we may specifically agree.


 


(iv)
have a court of competent jurisdiction assume custody or control over you or
the whole or a substantial portion of your 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 we may specifically agree and


 


(b)
may be terminated by us at any time by repossessing the Equipment or in any
other way if you repudiate this agreement.


 


 

















 


9.                                      Payments on Termination


 


9.01                           On any termination (including Total Loss) of
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 we shall certify to you under the provisions of Clause 6.01 in
accordance with the terms hereof) you will immediately (but if termination is
due to other than a breach of the agreement by you on the next due date) pay us,
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 our 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 we shall certify to you to be the difference
between: 


 


(aa)     the
net proceeds of sale of the Equipment which we would expect to have become due
to us from the buyer on completion of the sale of the Equipment by us following
expiry of the full Fixed Period if this agreement had continued for the full
Fixed Period and you 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 us on the sale of
the Equipment by us following the said early termination of this agreement
which shall; if (aa) exceeds (bb) be payable by you in addition to the sum
referred to in sub-clause (b)(i) above or, it (bb) exceeds (aa), be deducted
from the said sum;


 


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


 


(c)     our 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 us 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
us pursuant to Clause 9.01 above will be conclusive and binding on you, save in
respect of manifest error.


 


9.03                           Your 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 you will return the Equipment to us as required by Clause 10.03.
If we do not require you to provide storage in accordance with Clause 10.04 or
any agreed storage arrangements have come to an end and you fail to return the
Equipment to us on time you will pay to us, 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 us 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 you wish to use the Equipment after expiry
of the Fixed Period you must write to us at least one month before the date of
expiry of the Fixed Period to request this. We will be under no obligation to agree
to your request although we will notify you of our decision as soon as
possible.


 


 

















 


10.03                     Immediately after termination of the hiring
you will return the Equipment to us at any place within the United Kingdom
which we may reasonably require. All decommissioning, transportation, handling
and storage costs are to be borne by you and you 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 we shall so require you 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. You will not
use or allow anyone else to use the Equipment during this period. During this
period the Equipment must remain totally operational and you shall provide
adequate electrical power, lighting, heat, water and any other relevant utility
facilities. During the storage period you will permit us or any persons
designated by us, including the representatives of any prospective purchaser of
the Equipment, to inspect the Equipment and the records maintained therewith. If
requested to do so you will demonstrate the Equipment to any prospective
purchaser. If an auction of the Equipment is necessary, we shall be permitted
to auction the Equipment on-site and in situ at a time reasonable to us and
you.


 


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


 


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


 


11.02                     (a)     
EXCEPT AS MENTIONED IN SUB-CLAUSE (b) BELOW. SINCE THE EQUIPMENT HAS BEEN
CHOSEN BY YOU AND HAS NOT BEEN INSPECTED BY US WE DO 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 OUR
NEGLIGENCE) WILL ATTACH TO US 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                     We 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 you 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 we shall notify you provided you
have made the payment to us as required in Clause 12.07) or the date of any
earlier termination of the hiring under this agreement but not otherwise, you
will use all reasonable endeavours to sell the Equipment for the highest value
possible acting as our agent within the three months ending with such expiry or
termination. If you have not sold the Equipment within the said three months
then you will return the Equipment to us or otherwise deal with the Equipment
(as we 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 we are in possession of
the Equipment we shall try and sell it, or if you are still in possession of
the Equipment we may at our option require you use all reasonable endeavours to
sell the Equipment for the highest value possible within an agency period
specified by us.


 


(b)           the sale of the Equipment by you
shall be in your own name, either to a buyer who requires the Equipment for
business use who is not connected or associated with either you 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
with our applicable Standard Conditions of Sale, a copy of the current form is
attached hereto (or such other conditions as we 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 we may
agree with you in writing from time to time, or for such lesser price without
our prior written permission, provided that you make good the shortfall.


 


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


 


12.02                     At our request, you will provide us with
copies of your VAT invoice or invoices to the purchaser or copies of the sales
invoice from the auctioneer as appropriate. We shall issue you with an invoice for the sale price of the
Equipment plus VAT (if applicable) or you will raise a Self-Billed Invoice upon
us should you 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 you sell the motor car as our agent and must
be sent to us so that we receive 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 you have complied with Clause 9.01 or you
have paid us any sums due under the provisions of 12.07 we will pay to you 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
provision 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                     Your obligations under Clauses 10.01, 10.02
and 10.04 of this agreement will commence on the expiry of this agency for sale
or our 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 you under the provisions of this
Clause should fall short of the Minimum Safe Price you will at the end of such
period, immediately pay to us 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 us shall be limited to the
aggregate of the Rebates of Rentals paid in respect of each and every item of
Equipment sold by you 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 you have paid to us all sums due to us in respect of that item
of Equipment;


 


12.07                     (a)           In
order that you shall not be regarded as in breach of the terms of the Schedule
to the Rental Agreement you will pay to us 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 we 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 us.


 


(b)           You undertake, 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 us 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 you have paid such Account Monies
to us 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 us
following the Agreement Date of the Schedule to the Rental Agreement (as
advised by us if so required by you) there shall be no additional Fixed Period
Rental under the Schedule to the Rental Agreement payable by you 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 you have not disposed of an item
of the Equipment on or before the first anniversary of the year end of us
following the Agreement Date of the Schedule to the Rental Agreement (as
advised by us if so required by you) you shall pay to us, if demanded by us, on
the next day an additional Fixed Period Rental of the amount specified in the
Schedule multiplied by the Expenditure Incurred as advised by us and divided by
1000. We will make such a demand only in respect of that Equipment that has not
been sold prior to this date.


 


 

















 


(e)           We 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, we 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 you will within seven days of receipt of written demand made by us
shall pay to us 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 us
pursuant to 13.02 shall, save for manifest error, be final and binding on you
and your obligation to pay the additional rental sc demanded shall survive termination
of the Schedule to the Rental Agreement.


 


13.04                     For the purposes of this Clause


 


(i)            “Expenditure Incurred” (or “El”)
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 us, 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 us 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                     You confirm that the information provided by you
and shown in the Schedule is true and you acknowledge and agree that such
information will be treated as if it were terms of this agreement.


 


14.02                     If you fail to pay any sum due on time we will
charge you 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
judgment we may obtain against you and will survive and apply after
termination.


 


14.03                        If you incur any liability (whether liquidated or unliquidated) under
any rental agreement but not otherwise to us or our holding company or any of
our subsidiaries (as such expressions are defined in section 736 of the
Companies Act 1985) we may set off such liability against any sum that would otherwise
be due to you 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 you

  	
   

  	
  National
  Car Rental Ltd

  
	
   

  	
   

  	
  c/o
  Republic Industries Inc

  
	
   

  	
   

  	
  200
  South Andrews Avenue

  
	
   

  	
   

  	
  FL
  Lauderdale FL 33301

  
	
   

  	
   

  	
  Attention:
  Treasurer

  
	
   

  	
   

  	
  Telecopier
  954-769-4521

  
	
   

  	
   

  	
   

  
	
  and
  solely in the case of clause 8:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Republic
  Industries Inc

  
	
   

  	
   

  	
  200
  South Andrews Avenue

  
	
   

  	
   

  	
  FL
  Lauderdale FL 33301

  
	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
  Telecopier:
  954-769-6328

  
	
   

  	
   

  	
   

  
	
  if
  to us

  	
   

  	
  Lombard
  North Central Plc

  
	
   

  	
   

  	
  Lombard
  House

  
	
   

  	
   

  	
  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.


 


14.5                           If you are more than one person your
obligations will be binding on each person separately and all persons jointly.


 


14.6                           Our rights under this agreement will not be
affected by any forbearance or concession made by us to you.


 


14.7                           In negotiations for this agreement only
persons expressly authorised in writing by us have had authority to act as our
agent.


 


14.8                           This agreement contains all the terms agreed
between us except variations recorded in writing and signed by our authorised
employee and you.


 


14.9                           You will not assign this agreement We may only
assign this agreement to a member of the Nat West Group of Companies from time
to time.


 


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


 


14.11                     Your obligation to indemnify us under Clause
3.11 to pay us interest under Clause 14.02 and to pay us 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                     You
will pay us on demand our charges for changing the terms of this agreement or
providing additional services at your requirest and for reminding you about or
dealing with any failure by you to comply with the terms of this agreement.
Details of our charges are available on requirest and will be notified to you
in any event before you are 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 en intermediary with the European
Investment Bank (“EIB”) Lombard may be able to obtain partial funding from the
EIB 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 representatives) visiting
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.


 


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


 


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


 


14.19       This
agreement will also incorporate the items of any Addenda signed by you and us.


 


 

















 


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 win 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
indemnity 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, we shall be entitled to have any
necessary restoration work carried out and you agree 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 your 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 you.
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 recognised 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 sat 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 farther 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 you 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 -Trust
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 carpels.
Wear and soiling 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 you fit at your 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 we agree that Sub-Letting will
be permitted:


 


1.                                       You will indemnify us and keep us indemnified
at all times against all loss or damage howsoever caused as a result of our
granting this consent.


 


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


 


3.                                       The duration of the Sub-Letting Agreement
shall not exceed 30 days nor extend for a period longer than the Fixed Period
then unexpired of the Schedule less one day.


 


4.                                       You agree not to deaf in the Equipment in such
a manner that would prejudice our title in the Equipment


 


5.                                       during the currency of the Sub-Letting
Agreement but not otherwise we are prepared to waive our requirement that you
insure the Equipment provided that


 


(i)            you require in the Sub-Letting
Agreement and procure 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 our interest as owners of the
Equipment is noted on such policy); and


 


(b)
you 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)           you will indemnify us and keep us
fully indemnified against all loss or damage incurred or sustained by us by
reason of any less, 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 our agreeing to such
modification;


 


6.                                       We reserve 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 our giving reasonable notice for the purpose of
ensuring that you are complying all of its obligations under the Schedule.