[GRAPHIC OMITTED] Standby Letter of Credit
Application and Agreement
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Date: November 30, 2006
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TO:
AND
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International Trade Services
Complete this section only if
Department
application is being submitted
Comerica
Bank
through another bank.
BY COURIER:
One
Detroit Center
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500
Woodward Avenue
NAME OF APPLICANT'S BANK
Detroit,
Michigan 48226-3341
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STREET ADDRESS
BY MAIL:
P.O. Box
75000
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Detroit,
Michigan 48275-3341
CITY, STATE, ZIP
(Bank's
Designated Office)
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The undersigned hereby requests Comerica Bank to issue an
irrevocable standby
letter of credit and notify directly or through an advising bank
by: a)
[ ] Forwarding directly to beneficiary via [ ] mail [ ] courier;
b)
[ ] S.W.I.F.T./telex; c) [ ] Hold for pickup by (insert
name):_________________;
or d) [ ] Send to third party (insert name and
address):________________________
_____________________ by [ ] mail [ ] courier; as follows (if the
preceding
information is not completed we will send the Credit directly to
the beneficiary
or an advising bank we select):
Advising Bank if applicable): Bank of America, Scranton, PA
Branch or S.W.I.F.T. No.: bofaus3n
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(COMPLETE STREET ADDRESS - NO P.O. BOX)
In favor of (Beneficiary) Bank of America
N.A.
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(NAME)
901 Main Street, Dallas Tx 75202-3714
ATTN: Mail Code
TX1-492-66-01
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(COMPLETE STREET ADDRESS - NO P.O. BOX)
For account of (Applicant) Scottish Re
Limited
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(NAME)
60 Lombard Street, London, EC3V 9EA, UK
ATTN:
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(COMPLETE STREET ADDRESS - NO P.O. BOX)
Amount
$1,403,204.00 One
Million Four Hundred and three
Thousand Two Hundred and Four Dollars and no cents
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(AMOUNT IN WORDS AND FIGURES)
Expiration Date
one year from issuance
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(PROVIDE SPECIFIC DATE)
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Auto Extension Provisions (select one option and complete, or the
default
selection is not automatically extendable):
X NOT AUTOMATICALLY EXTENDABLE; OR
[ ] AUTO EXTENDABLE ____ Number of Days Notice Prior to
Expiration
(i.e., 30,
45, 60, 90) ____ How often (i.e., yearly, semi-yearly)
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Drawing and Presentation Options (you must select only one
option):
[ ] Partial Drawing
Permitted/Multiple
X Partial Drawings/
[ ] Partial Drawings/ Presentation
Prohibited
Multiple Presentations
Multiple
Presentations (only one
presentation
Permitted (multiple
Prohibited (only one may be made but
it may be
presentations for less
presentation and for for less
than the full
than full
amount)
full amount)
amount available)
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Available by draft(s) at sight drawn on Comerica Bank as follows
(you must
select only one):
X Issue the Standby Letter of Credit substantially in the form
attached hereto
as Exhibit A. (Mark "Exhibit A" and Applicant must sign).
[ ] A written statement purportedly signed by the beneficiary with
the following
wording:
"______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
__________________________________________________________________________."
[ ] NO DOCUMENTS REQUIRED. (If selected, the only documentary
requirement for
payment is
presentation of a draft or presentation by S.W.I.F.T., as
applicable).
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<PAGE>
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[ ] OTHER CONDITIONS, INSTRUCTIONS AND
REQUESTS:________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
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TERMS AND CONDITIONS
In these provisions:
(1) "Applicant" means
the undersigned party or parties identified and signing
as
such.
(2) "Application" and
"Agreement" each means this Standby Letter of Credit
Application and Agreement for an irrevocable standby letter of
credit to be
issued by Bank, as such Application may be amended or modified from
time to
time
in accordance with the provisions hereof.
(3) "Bank" means
Comerica Bank.
(4) "Credit" means the
irrevocable standby letter of credit (or confirmation)
issued by Bank at its option pursuant to this Application, as such
letter
of
credit may be modified or amended from time to time.
(5) "Governing Rules"
means the rules governing letter of credit practice as
specified in the Credit, which shall be either the International
Standby
Practices 1998, International Chamber of Commerce ("ICC")
Publication No.
590,
and any revisions thereof approved by the ICC and adhered to by
Bank
or
the Uniform Customs and Practice for Documentary Credits (1993
Revision), ICC Publication No. 500, and any revisions thereof
approved by
the
ICC and adhered to by Bank.
(6) "Instrument" means
any draft, receipt, cable or written demand for payment
relating to the Credit.
In consideration of the issuance of the Credit by Bank, Applicant
hereby agrees
with Bank as follows:
1. Applicant
will reimburse Bank at its designated office, in cash, the
amount
required to pay each Instrument, such reimbursement to be made on
demand in
the
case of each sight draft or demand, with interest from the date
of
payment of the Instrument to the date of reimbursement. Any Credit
payable
in
U.S. dollars shall be reimbursed in U.S. dollars. Upon the
occurrence of
any
event of default described in paragraph 11 below, Applicant will
pay
Bank
a sum equal to Bank's outstanding liability under the Credit.
2. Applicant
will pay Bank such commission as has been agreed to, the
reasonable fees and expenses of Bank in connection with the
Credit
according to Bank's standard practice as in effect from time to
time, and
interest on the amount paid by Bank and not reimbursed as provided
in
paragraph 1 hereof, including all charges and expenses paid or
incurred by
Bank
in connection therewith, at the rate of three (3%) percent
above
Bank's prime rate; and effect shall be given to any change in the
interest
rate
resulting from a change in the prime rate on the date of such
change
in
the prime rate. The "prime rate" shall mean the rate of
interest
established by Bank from time to time as its prime rate, which may
not
necessarily be the lowest interest rate charged by Bank to its
borrowers.
There shall be no refund or decrease, and Applicant shall not be
entitled
to
any return, of any commission paid or owed to Bank in the event
that the
Credit is reduced, terminated, cancelled or otherwise modified.
Bank is
authorized to charge Applicant's deposit accounts and other
accounts with
Bank
for all required payments and reimbursements.
3. If any law or
regulation or the interpretation or implementation thereof by
any
court or administrative or governmental authority charged with
the
administration thereof shall either: (a) impose, modify or deem
applicable
any
reserve, special deposit, limitation or similar requirement
against
letters of credit issued by, or assets held by, or deposits in or
for the
account of, Bank, or (b) impose on Bank any insurance premium or
other
condition regarding this Application or the Credit, and the result
of any
event referred to in clause (a) or (b) above shall be to increase
the cost
of
issuing or maintaining the Credit over that which Bank assumed
in
determining its fees, then, upon demand by Bank, Applicant
shall
immediately pay to Bank, as specified by Bank from time to time,
additional
amounts which shall be sufficient to compensate Bank for such
increased
cost, together with interest on each such amount from the date
demanded
until payment in full thereof at the rate and on the terms set
forth in
paragraph 2 above. A certificate as to such increased cost incurred
by Bank
as a
result of any event mentioned in clause (a) or (b) above, submitted
by
Bank
to Applicant shall be conclusive, absent manifest error, as to
the
amount thereof.
4. Applicant
agrees to indemnify and hold Bank harmless from and against any
and
all claims, damages, losses, liabilities, costs or expenses
whatsoever
which Bank may incur (or which may be claimed against Bank by any
person)
by
reason of, or in connection with, the execution and delivery or
transfer
of,
or payment or failure to pay under, the Credit, or by reason of, or
in
connection with, any other matters arising under this Application,
or any
of
the transactions contemplated hereby; provided, however, Applicant
shall
not
be required to indemnify Bank for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the
extent,
caused by Bank's willful misconduct or gross negligence.
5. Applicant
assumes all risks of the acts or omissions of any beneficiary
or
transferee of the Credit with respect to its use of the Credit.
Neither
Bank
nor any of its officers, directors, employees or agents shall
be
liable or responsible for: (a) the use which may be made of the
Credit or
for
any acts or omissions of any beneficiary or transferee in
connection
therewith; (b) the validity, sufficiency or genuineness of
documents, or of
any
endorsements thereof, even if such documents should in fact prove
to be
in
any or all respects invalid, insufficient, fraudulent or forged;
(c)
payment by Bank made against presentation of documents which
substantially
comply with the terms of the Credit; or (d) any other
circumstances
whatsoever in making or failing to make payment under the Credit.
In
furtherance and not in limitation of the foregoing, Bank may
accept
documents that appear on their face to be in order, without
responsibility
for
further investigation, regardless of any notice or information to
the
contrary. Bank shall not be responsible for any act, error,
neglect,
default, omission, insolvency or failure in business of any of
Bank's
correspondents. The occurrence of any one or more of the
contingencies
referred to in the preceding clauses of this paragraph shall not
affect,
impair or prevent the vesting of any of Bank's righ
