UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-KSB/A
(Amendment No. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended March 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to __________________
Commission File No. 0-14819
RENT-A-WRECK OF AMERICA, INC.
-------------------------------------
(EXACT NAME OF ISSUER IN ITS CHARTER)
Delaware 95-3926056
- ------------------------------- ------------------------------------
(State or other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
11460 Cronridge Drive, Suite 120, Owings Mills, MD 21117
- -------------------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Issuer's telephone number: (410) 581-5755
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.01
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
------ ------
Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
State Issuer's revenues for its most recent fiscal year. $4,676,645
---------------
4,162,792 shares of common stock were outstanding as of May 26, 1998.
Aggregate market value of voting stock held by nonaffiliates of
registrant, based upon the average of the last bid and asked price of the Common
Stock on the Nasdaq SmallCap Market, was $2,538,080 on May 26, 1998. Shares of
Common Stock held by each officer and director and by each person who owns 10%
or more of the outstanding Common Stock have been excluded in that such persons
may be deemed t be affiliates. This determination of affiliate status is not
necessarily conclusive.
The following documents are incorporated by reference and made a part
of the Form 10-KSB/A:
1. None.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
<PAGE>
This Amendment No. 1 is being filed to include portions of Schedule No.
1 to Exhibit 10.15 which the issuer no longer seeks confidential treatment of
with the Securities and Exchange Commission.
<PAGE>
SIGNATURES
In accordance with Rule 12b-25 and Section 13 or 15(d) of the
Securities Exchange Act of 1934, Rent-A-Wreck of America, Inc. has caused this
Amendment No. 1 to be signed on its behalf by the undersigned, thereunto duly
authorized:
Rent-A-Wreck of America, Inc.
Registrant
By: Date:
/s/ Mitra Ghahramanlou 9/25/98
- ------------------------- -------------------
Mitra Ghahramanlou
Chief Accounting Officer
<PAGE>
RENT-A-WRECK OF AMERICA, INC.
EXHIBIT INDEX
FORM 10-KSB/A
FOR FISCAL YEAR
ENDED MARCH 31, 1998
Incorporated by
Exhibit No. Exhibit Reference from
- ----------- ------- --------------
10.15 Facultative Reinsurance Amended Schedule 1 filed
Agreement dated March 1, 1997 herewith.
between National Union Fire
Insurance Company of Pittsburgh,
PA and Consolidated American
Rental Insurance Company, Ltd.
FACULTATIVE REINSURANCE AGREEMENT
between
NATIONAL UNION FIRE INSURANCE COMPANY OF PlTTSBURGH, PA.
(hereinafter called the "Company")
and
CONSOLIDATED AMERICAN RENTAL INSURANCE COMPANY, LTD.
(hereinafter called "the Reinsurer")
WITNESSETH:
WHEREAS, the Company is willing to cede to the Reinsurer certain
insurance under the terms and conditions hereinafter set forth; and
WHEREAS, the Reinsurer is willing to reinsure such insurance on said
terms and conditions:
NOW, THEREFORE, in consideration of the premiums Schedule(s) and of the
mutual covenants and agreements herein set forth, the parties hereto hereby
covenant and agree as follows:
ARTICLE I
POLICY(IES) REINSURED:
As per Schedule(s) attached hereto and made a part hereof.
ARTICLE II
TERM:
This Agreement is effective at 12:01 A.M. Eastern Standard Time, the
1st day of March, 1997.
This Agreement shall continue in effect until terminated.
<PAGE>
ARTICLE III
TERRITORY:
This Agreement shall cover Losses occurring within the territorial
limits provided by the Policies reinsured hereunder and listed in Schedule(s).
ARTICLE IV
DEFINITIONS:
A. The term "Policies" as used in this Agreement shall mean any and all
binders, certificates, policies and contracts of insurance, accepted or
held covered provisionally or otherwise and issued to the Insured named in
Schedule(s) hereof.
B. The term "Ultimate Net Loss" as used in this Agreement shall mean the
actual Loss sustained by the Company, but salvages and all other
recoveries, including recoveries under all other reinsurance except
catastrophe excess reinsurance of the Company, shall be deducted from such
Loss to arrive at the amount of liability, if any, attached hereunder. All
salvages, recoveries, or payments recovered or received subsequent to loss
settlement hereunder, shall be applied as if recovered or received prior to
the aforesaid settlement, and all necessary adjustments shall be made by
the parties hereto. Nothing in this clause shall be construed to mean that
Losses are not recoverable hereunder, until the Company's Ultimate Net Loss
has been ascertained.
C. The term "Gross Premiums Written" as used in this Agreement shall mean
Direct Written Premiums for Policies covered hereunder, adding all other
Additional Premiums and subtracting all other Return Premiums and
cancellations; however, Direct Premiums written on installment premium
payment policies shall be deemed to be the installment due in the period
for which the account is rendered, in
<PAGE>
accordance with the Reports and Remittances article contained in this
Agreement.
D. The term "Unearned Premiums Reserve" as used in this Agreement shall mean
the premium represented by the unexpired portion of the policy in force as
of any specified date.
E. The term "Losses Paid" as used in this Agreement shall mean Losses Paid
less Recoveries for Salvage and Subrogation.
F. The term "Allocated Loss Expenses" as used in this Agreement shall mean all
court costs and court expenses; pre- and postjudgment interest; fees for
service of process; attorneys' fees; cost of undercover operative and
detective services; costs of employing experts; costs for legal
transcripts; costs for copies of any public records; costs of depositions
and court-reported or recorded statements; costs and expenses of
subrogation and any similar fee, cost or expense reasonably chargeable to
the investigation, negotiation, settlement or defense of a claim or loss or
to the protection and perfection of the subrogation rights of the Company
and/or of the Client. "Allocated Loss Expenses" shall not mean fees for
attorneys who are employees of the Company or on permanent retainer.
G. The term "Unallocated Loss Expense" as used in this Agreement shall mean
the Claims Service Fees charged hereunder as per Schedule(s) hereof.
H. The term "AIGRM Supervision Fee" shall mean the fee for services provided
in serving as liaison between the Reinsurer and the Claims Administrator,
reviewing claims in accordance with the Claims Handling Guidelines issued
by AIG Risk Management, Inc. (AIGRM) and monitoring and evaluating
performance of the Claims Administrator, and shall be adjusted as shown in
the Schedule(s).
<PAGE>
I. The term "Outstanding Loss Reserves" as used in this Agreement shall mean
losses reported to the Company which have been reserved but unpaid at any
specified date.
J. The term "Losses" as used in this Agreement shall mean payments to
claimants under Policies reinsured hereunder.
K. The term "Loss Escrow Fund" as used in this Agreement shall mean a
non-interest bearing escrow fund established in the amount shown in the
Schedule(s) and adjusted in accordance with Article VII.
L. The term "IBNR" (Incurred But Not Reported) as used in this Agreement shall
mean a reserve for liability for future payment on Losses which have
already occurred but have not yet been reported to the Company and shall
also include expected future development on Outstanding Loss Reserves.
M. The term "Obligations" as used in this Agreement shall mean:
(a) Losses and Allocated Loss Expenses paid by the Company but not
recovered from the Reinsurer;
(b) Outstanding Loss Reserves;
(c) Reserves for Losses Incurred But Not Reported;
(d) Reserves for Allocated Loss Expenses; and
(e) Reserves for Unearned Premium.
(f) Plus the difference between (a) through (e) above and the amount of
Security set by the Company.
N. Deductible Loss(es) as used in this Agreement shall mean those Losses paid
by the original insured under the Policy(ies) reinsured hereunder.
ARTICLE V
REINSURING CLAUSE: As per Schedule(s).
ARTICLE VI
PREMIUM AND COMMISSION:
The Premiums due the Reinsurer for the Reinsurance hereunder shall be
calculated in accordance with the Schedule(s).
<PAGE>
ARTICLE VII
CLAIMS:
The Reinsurer agrees to abide by the loss settlements of the Company,
it being understood, however, that when so requested, the Company will afford
the Reinsurer an opportunity to be associated with the Company, at the expense
of the Reinsurer, in the defense of any claim or suit or proceeding involving
this reinsurance, and that the Reinsurer may cooperate in every respect in the
defense or control of such claim, suit or proceeding.
For the payment of Losses and Loss Expenses the Reinsurer will fund a
Loss Escrow Fund in the amount shown in the Schedule(s) or two and one half (2
1/2) months estimated Ultimate Net Loss which will be replenished by the
Reinsurer at the same time as the account current shown in Schedule(s).
The Company may deduct paid loss and loss expenses paid as provided for
in the REPORTS AND REMITTANCES ARTICLE, and the Company shall record and advise
the Reinsurer of these deductions as provided in the REPORTS AND REMITTANCES
ARTICLE. The Company may, at its option, demand prompt payment of any loss where
the Reinsurer's share exceeds the amount shown in the Schedule(s) where the
Reinsurer will promptly pay such amounts.
ARTICLE VIII
CLAIMS SERVICE FEES: Adjustable as per Schedule(s).
ARTICLE IX
REPORTS AND REMITTANCES:
Within the time shown in the Schedule(s) while this Agreement remains
in effect, the Company shall render to the Reinsurer an account current and the
balance due shall be paid by the debtor party to the other within the time shown
in the Schedule(s) after the close of the month or as soon as reasonably
practicable thereafter.
<PAGE>
ARTICLE X
RESERVE DEPOSIT (NON-ADMITTED REINSURER):
With respect to the premium derived from any jurisdiction in which an
insured risk is located and in which the Reinsurer is not admitted, the Company
shall be entitled to require from the Reinsurer any one or a combination of the
following; (1) a Letter of Credit complying with 11 NYCRR 79 (Regulation 133),
(2) A Security Trust complying with 11 NYCRR 126 (Regulation 114) and/or (3)
Cash as security for the payment of the latter's Obligations hereunder.
The amount required shall initially equal the amount shown in the
Schedule(s). The amount shall be adjusted to equal the Reinsurer's Obligations.
Upon default by the Reinsurer of sums due and owing to the Company, the
Company may appropriate as much of the Letter of Credit, Security Trust and/or
Cash as necessary to eliminate the default. The Company may, however, at its
discretion, require payment of any sum in default, and it shall be no defense to
any such claim that the Company might have had recourse to the Letter of Credit,
Security Trust and/or Cash.
The Company and the Reinsurer hereby agree that the Letter of Credit,
Security Trust and/or Cash, provided pursuant to this Agreement may be drawn
upon at any time, notwithstanding any other provisions herein contained. The
Letter of Credit, Security Trust and/or Cash may be utilized by Company or any
successor by operation of law, including, without limitation, any liquidator,
rehabilitator, receiver or conservator of the Company for any of the following
reasons:
(i) To reimburse the Company for the Reinsurer's share of premiums
returned to the owners of the Policy(ies) reinsured hereunder due
to cancellations of said Policy(ies);
<PAGE>
(ii) To reimburse the Company for the Reinsurer's share of surrenders
and benefits or losses paid by the Company under the terms and
provisions of the Policy(ies) reinsured hereunder;
(iii)To fund an account with the Company in an amount at least equal
to the deduction, for reinsurance ceded, from the Company's
liabilities for Policy(ies) ceded hereunder. Such amount shall
include, but not be limited to, amounts for policy reserves,
reserves for claims and losses incurred (including IBNR,
Allocated Loss Expenses and Unearned Premiums); and
(iv) To pay any other amounts due to the Company under this
Agreement.
All of the foregoing apply without diminution because of the insolvency
of the Company or the Reinsurer.
ARTICLE Xl
INDEMNIFICATION AND ERRORS AND OMISSIONS:
Any recitals in this Agreement of the terms and provisions of the
original policy or policies are merely descriptive and the Reinsurer is
reinsuring, to the amount herein provided, the obligations of the Company under
the original policy or policies. The Company shall be the sole judge as to what
shall constitute a claim or loss covered under the Company's original policy or
policies and as to the Company's liability thereunder and as to amount or
amounts which it shall be proper for the Company to pay thereunder and the
Reinsurer shall be bound by the judgement of the Company as to the liability and
obligation of the Company under its policy or policies.
Any inadvertent delay, omission or error shall not be held to relieve
either party hereto from any liability which would attach to it hereunder if
such delay, omission, or error had not been made, provided such delay, omission
or error is rectified as
<PAGE>
soon as possible.
ARTICLE XII
TAXES:
The Company will be liable for taxes (except Federal Excise Tax) on
premiums reported to the Reinsurer hereunder.
Federal Excise Tax applies only to those reinsurers which are not
exempt from Federal Excise Tax.
The Reinsurer has agreed to allow for the purpose of paying the Federal
Excise Tax one percent (1%) of the subject premium shown in Schedule(s), or such
other rate that may be in effect from time to time, to the extent such premium
is subject to Federal Excise Tax.
ARTICLE XIII
INSPECTION:
The Company shall place at the disposal of the Reinsurer, and the
Reinsurer shall have the right to inspect, at all reasonable times, through its
authorized representatives, all books, records and papers of the Company in
connection with the reinsurance hereunder, or any claims in connection herewith.
ARTICLE XIV
FOLLOW THE FORTUNES CLAUSE:
The Reinsurer's liability shall attach simultaneously with that of the
Company and all reinsurance for which the Reinsurer shall be liable by virtue of
this Agreement shall be subject in all respects to the same risks, terms, rates,
conditions, interpretations, assessments, waivers, and to the same
modifications, alterations and cancellations, as the respective insurances (or
reinsurances) of the Company to which such reinsurances relate. This Agreement
shall further protect the Company in connection with any loss for which the
Company may be legally liable to pay in excess of the limit having been incurred
because of failure by it to settle within the policy limit or by
<PAGE>
reason of alleged or actual negligence, fraud or bad faith in rejecting an offer
of settlement or in the preparation of the defense or in the trial of any action
against their Insured or in the preparation or prosecution of an appeal
consequent upon such action.
The true intent of the Agreement being that the Reinsurer shall, in
every case to which this Agreement applies and in the Proportions specified
herein, follow the fortunes of the Company.
This Article shall not apply insofar as it can be shown that the
Company has been negligent or guilty of bad faith in handling a claim which is
the subject matter of this Agreement.
ARTICLE XV
INSOLVENCY:
In the event of the insolvency of the Company, reinsurance under this
Agreement shall be payable by the Reinsurer (on the basis of the liability of
the Company under contract or contracts reinsured without diminution because of
the insolvency of the Company) to the Company or to its liquidator, receiver, or
statutory successor, except as provided by Section 4118 of the New York
Insurance Law or except:
(1) where the Agreement specifically provides another payee of such
reinsurance in the event of the insolvency of the Company, and
(2) where the Reinsurer, with the consent of the direct insured or
insureds, has assumed such policy obligations of the Company as
direct obligations, of the Reinsurer to the payees under such
policies and in substitution for the obligations of the Company
to such payees.
It is agreed, however, that the liquidator or receiver or statutory
successor of the insolvent Company shall give written notice to the Reinsurer of
the pendency of a claim against the
<PAGE>
insolvent Company on the contract or contracts reinsured within a reasonable
time after such claim is filed in the insolvency proceeding and that, during the
pendency of such claim the Reinsurer may investigate such claim and interpose at
their own expense in the proceeding where such claim is to be adjudicated, any
defense or defenses which they may deem available to the Company or its
liquidator or receiver or statutory successor. The expense thus incurred by the
Reinsurer shall be chargeable, subject to court approval against the insolvent
Company as part of the expense of liquidation to the extent of a proportionate
share of the benefit which may accrue to the Company solely as a result of the
defense undertaken by the Reinsurer.
ARTICLE XVI
ARBITRATION CLAUSE:
All disputes or differences arising out of the interpretation of this
Agreement shall be submitted to the decision of two (2) Arbitrators, one to be
chosen by each party, and in the event the Arbitrators fail to agree, to the
decision of an Umpire to be chosen by the Arbitrators. The Arbitrators and
Umpire shall be executive officials of Fire and Casualty Insurance or
Reinsurance Companies. If either of the parties fails to appoint an Arbitrator
within one (1) month after being required by the other party in writing to do
so, or if the Arbitrators fail to appoint an Umpire, within one (1) month of a
request in writing by either of them to do so, such Arbitrator or Umpire, as the
case may be, shall at the request of either party be appointed by a Justice of
the Supreme Court of the State of New York.
The Arbitration proceedings shall take place in New York, New York. The
applicant shall submit its case within one (1) month after the appointment of
the Court of Arbitration, and the respondent shall submit his reply within one
(1) month after
<PAGE>
receipt of a claim. The Arbitrators and Umpire are relieved from all Judicial
formality and may abstain from following the strict rules of law. They shall
settle any dispute under this Agreement according to an equitable rather than a
strictly legal interpretation of its terms and their decision shall be final and
not subject to appeal.
Each party shall bear the expenses of its Arbitrator and shall jointly
and equally share with the other the expenses of the Umpire and of the
Arbitration.
This Article shall survive the termination of this Agreement.
ARTICLE XVII
RESERVES:
The Reinsurer will maintain legal reserves with respect to Outstanding
Losses and Loss Expenses and Unearned Premium
Reserves.
ARTICLE XVIII
TERMINATION:
A. Neither the Company nor the Reinsurer may terminate this Agreement while
the Policy(ies) listed in the Schedule(s), Item B are in force; however, if
the policy(ies) listed in the Schedule(s), item B are in fact terminated
then in that event and that event only this Agreement may be terminated
simultaneously therewith.
B. However, the Company shall have the right to terminate this Agreement
immediately by giving the Reinsurer notice: (1) If the performance of the
whole or any part of this Agreement be prohibited or rendered impossible de
jure or defacto in particular and without prejudice to the generality of
the preceding words in consequence of any law or regulation which is or
shall be in force in any state or territory or if any law or regulation
shall prevent directly
<PAGE>
or indirectly the remittance of any or all or any part of the balance or
payments due to or from the Reinsurer.
(2) If the reinsurer at any time shall:
(a) Become insolvent, or
(b) Suffer any impairment of capital, or
(c) File a Petition in bankruptcy, or
(d) Go into liquidation or rehabilitation, or
(e) Have a receiver appointed, or
(f) Be acquired or controlled by any other insurance company or
organization.
(3) In the event of the severance or obstruction of free and unfettered
communication and/or normal commercial and/or financial intercourse
between the United States of America and the country in which the
Reinsurer is incorporated or has its principal office as a result of
war, currency regulations, or any circumstances arising out of
political, financial or economic emergency. All notices of termination
in accordance with any of the provisions of this paragraph may be by
Telex or Telegram and shall be deemed to be served upon dispatch, or
where communications between the parties are interrupted, upon attempt
dispatch.
C. All notices of termination served in accordance with any of the provisions
of this Article shall be addressed to the party concerned at its head
office or at any other address previously designated by that party herein.
D. In the event of this Agreement being terminated the rights and obligations
of both parties to this Agreement shall remain in full force until the
effective date of termination.
E. As respects coverage hereunder, it is understood and agreed that upon
termination of this Agreement, coverage will
<PAGE>
continue hereunder beyond such termination date until the natural
expiration date, the cancellation date, or the date which the Company, as a
matter of law, may terminate coverage under the Policy(ies) listed in
Article I hereof.
F, Should this Agreement terminate while a loss occurrence is in progress, the
Reinsurer shall be liable to the extent of their interest, subject to the
other conditions of this contract, for all losses resulting from such loss
occurrence whether such losses arise before or after such termination.
ARTICLE XIX
SERVICE OF SUIT:
It is agreed that in the event of the failure of the Reinsurer hereon
to pay any amount claimed to be due hereunder, the Reinsurer hereon, at the
request of the Company, will submit to the jurisdiction of any court of
competent jurisdiction within the United States and will comply with all
requirements necessary to give such court jurisdiction and all matter arising
hereunder shall be determined in accordance with the law and practice of such
court.
It is further agreed that service of process in such suit may be made
upon the parties indicated in the Schedule(s) and that in any suit instituted
against any of them upon this contract, the Reinsurer will abide by the final
decision of such court or appellate court in the event of an appeal.
The Reinsurer will abide by the final decision of such court or of any
appellate court in the event of an appeal.
The party(ies) listed in the Schedule(s) are authorized and directed to
accept service of process on behalf of the Reinsurer in any such suit and/or
upon the request of the Company to give a written undertaking to the Company
that they will enter a general appearance upon the Reinsurer's behalf in the
event such a suit shall be instituted.
<PAGE>
Further, pursuant to any statute of any state, territory, or district
of the United States which makes provisions therefor, Reinsurer hereon hereby
designates the Superintendent, Commissioner or Director of Insurance or other
officer specified for that purpose in the statute, or his successor or
successors in office, as their true and lawful attorney upon whom may be served
any lawful process in any action, suit or proceeding instituted by or on behalf
of the Company or any beneficiary hereunder arising out of this Agreement of
reinsurance, and hereby designate the above named as the person to whom the said
office is authorized to mail such process or a true copy thereof.
ARTICLE XX
FOREIGN EXCHANGE:
All premium and loss payments hereunder shall be in United States
Currency.
Premiums due hereunder in other than United States Currency shall be
paid by the Company in United States Dollars at the rates of exchange at which
the original accounts were settled. Failing this the rate of exchange applied
shall be that used by the Company in their own books of account or in accordance
with any subsequent adjustments thereto.
The amounts recoverable for losses in other than United States Currency
shall be converted into United States Dollars at the same rates of exchange as
were applied in the settlement of the original losses. Failing this the rate of
exchange applied shall be that used by the Company in their own books either at
the time of the settlement or in accordance with any subsequent adjustment
thereto.
ARTICLE XXI
OFFSET CLAUSE:
The Company and the Reinsurer shall have the right to offset any
balance(s) due from one to the other under this Agreement.
<PAGE>
The party asserting the right of offset may exercise such right at any time
whether the balance(s) due are on account of premiums or losses or otherwise.
In the event of the insolvency of a party hereto, offsets shall only be
allowed in accordance with the provisions of Section 7427 of the Insurance Law
of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives in New York, New York this 5th
day of May, 1998.
NATIONAL UNION FIRE INSURANCE COMPANY OF
PITTSBURGH, PA.
BY: /s/ Jeff Engelbrecht
------------------------
TITLE: Attorney in Fact
ADDRESS: 70 Pine Street
New York, NY 10270
<PAGE>
and in Bermuda this 30 day of Apr, 1998
CONSOLIDATED AMERICAN RENTAL INSURANCE
CO., LTD.
BY:
TITLE: DIRECTOR
----------------------
ADDRESS: 40 CHURCH STREET
HAMILTON, BERMUDA
<PAGE>
SCHEDULE # 1
(Facultative Reinsurance Agreement)
March 1, 1997 to March 1, 1998
Reinsurer Name Consolidated American Rental
Insurance Company, Ltd.
Address C/O Willis Corroon Management
40 Church Street
Hamilton, Bermuda
Original Insured Rent a Wreck of America, Inc.
Address 11460 Cronridge Drive, Suite 118
Owings Mills, MD. 21117
Agent for Service
of Process Willis Corroon of Maryland
Address 10 North Park Drive
Hunt Valley, MD. 21030
ARTICLE I
POLICY(IES) REINSURED:
A. Policy Number(s):
(l) RMCA 5273030
(2) RMCA 5273031
(3) RMCA 5273032
which are incorporated herein by reference and made a part
hereof.
B. Territory: As per policy(ies) listed in Item A
C. Policy Period:
12:01 A.M. Eastern Standard Time, March 1, 1997 to 12:01 A.M. Eastern
Standard Time, March 1, 1998.
D. Policy Limits:
Policy Number(s): RMCA 5273030
RMCA 5273031
RMCA 5273032
<PAGE>
Automobile Liability: $100,000 Bodily Injury each Person
$300,000 Bodily Injury each Accident
$100,000 Property Damage each Accident
Automobile Physical Damage: Actual Cash Value Comprehensive
Actual Cash Value Collision
E. REINSURER'S SHARE: Exceeds $25,000 before Company may
request prompt payment.
F. REINSURING TERMS:
(l) The Reinsurers aggregate limit of liability is the most the reinsurer will
pay. The estimated aggregate limit of liability is one million three hundred
thousand dollars ($1,300,000). This limit of liability is subject to adjustment
as follows:
Adjustment Basis Adjustment Rate Per
---------------- --------------- ---
[redacted pending [redacted pending each
confidentiality confidentiality
request with SEC] request with SEC]
Subject to a maximum downward adjustment of 10%.
(2) Subject to (1) above, Automobile Liability (including Automobile Physical
Damage if agreed) under the Company's Policy Number RMCA 5273030, RMCA 5273031,
RMCA 5273032, the Reinsurer agrees to reinsure the Company and be liable for One
Hundred Percent (100%) of the first One Hundred Thousand Dollars ($100,000) of
the Company's Ultimate Net Loss per Bodily Injury each Person.
(3) Subject to (l) above, Automobile Liability (including Automobile Physical
Damage if agreed) under the Company's Policy Number RMCA 5273030, RMCA 5273031,
RMCA 5273032, the Reinsurer agrees to reinsure the Company and be liable for One
Hundred Percent (100%) of the first Three Hundred Thousand Dollars ($300,000) of
the Company's Ultimate Net Loss per Bodily Injury each Accident.
<PAGE>
(4) Subject to (1) above, Automobile Liability (including Automobile Physical
Damage if agreed) under the Company's Policy Number RMCA 5273030, RMCA 5273031,
RMCA 5273032, the Reinsurer agrees to reinsure the Company and be liable for One
Hundred Percent (100%) of the first One Hundred Thousand Dollars ($100,000) of
the Company's Ultimate Net Loss per Property Damage each Accident.
(5) Subject to (1) above, Allocated Loss Expense: Reinsurer agrees to reinsure
the Company against and be liable for Allocated Loss Expense under the policies
covered hereunder as follows: 1) if Ultimate Net Loss is contained within the
Reinsured Limit(s) - Reinsurer will pay all Allocated Loss Expenses; 2) if
Ultimate Net Loss exceeds the Reinsured Limit(s) - Reinsurer will pay that
amount of Allocated Loss Expenses that is in proportion to the ratio that the
Reinsured Limit(s) bears to the Loss paid under the Policy(ies); or 3) if there
is no Ultimate Net Loss - Reinsurer will pay all Allocated Loss Expenses up to
the Reinsured Limit(s) and fifty percent (50%) of the Allocated Loss Expenses
which exceed the Reinsured Limit(s).
G. PREMIUM AND COMMISSION:
Premium and Commission due from the Reinsurer for the Reinsurance
hereunder shall be calculated in accordance with the following schedule. Gross
Premiums Written shown are estimates for the beginning of the Agreement period.
1. Gross Premiums Written $*
LESS
2. Excess Premium $*
EQUALS
3. Subject Premium $*
LESS
4. Taxes, Board, Bureaus
and Residual Market
Charges; and FET adjustable - see note # 1 $*
<PAGE>
5. Claims Service Fees
Adjustable in Accordance
With Article VIII; and $*
6. Profit and Adminis-
tration; adjustable [redacted pending $*
confidentiality request
with SEC]
7. Sub-total (4,5,6) $*
EQUALS
8. Gross Ceded Premium
(line 3 less line 7) $*
9. Net Ceded Premium
(Line 8 less line 10) $*
10. Loss Escrow Fund $*
*Redacted pending confidentiality request with SEC
Note: #l) Taxes, Boards & Bureaus, Federal Excise Tax, and Residual Market
Loadings will be adjusted per the terms of the Large Risk Rating Plan
Endorsement located on policyn # RMCA 5273031.
H. CESSION STATEMENTS
Account Current Statements will be rendered 30 days after the close of
the month or as soon as reasonably practicable thereafter, as shown in the
attached form or in such other simplified form as prepared by the Company.
1. Gross Premiums Written __________
EQUALS
2. Excess Reinsurance __________
3. Subject Premium __________
LESS
4. Taxes, Board, Bureaus and __________
Residual Market Charges; and
5. Claims Service Fees; and __________
<PAGE>
6. Profit and Administration; and __________
7. Direct Commission; and __________
8. Sub-total (4,5,6,7) __________
EQUALS
9. Gross Ceded Premium __________
(line 3 less line 8)
10. Federal Excise Tax __________
(line 3 x 1%)
11. Net Ceded Premium __________
(line 9 less line 10)
LESS
12. Escrow Fund Reimbursement; and __________
13. Paid Losses __________
EQUALS
14. Balance Due To (From) Reinsurer __________
B. The balance due shall be paid by the debtor party to the other
within __(45) days after the close of the month or as soon as
reasonably practicable thereafter.
I. CLAIMS SERVICE FEES
The Company has engaged, through AIG Risk Management, Inc., Hertz
Claims Management Corporation to handle Claims Administration for claims arising
hereunder. Claims shall be paid for as follows:
a. Automobile Liability - Bodily Injury
$525.00 per claim
b. Automobile Liability - Property Damage
$ 155.00 per claim
c. Automobile Liability - No Fault
$ 525.00 per claim
d. Automobile Liability - Physical Damage
$ 135.00 per claim
<PAGE>
In addition, any other fees, charges or expenses will be adjustable per
the terms contained in that certain contract between AIGRM and the
Claims Administrator for the period covered by this Schedule.
J. INITIAL SECURITY: Amount $800,000; form Letter of Credit.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives in New York, New York this 5th
day of May, 1998.
NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA.
BY: /s/ Jeff Engelbreiht
TITLE: Attorney in fact
ADDRESS: 70 Pine Street
New York, NY 10270
and in Bermuda, this 30 day of Apr, 1998.
CONSOLIDATED AMERICAN RENTAL
INSURANCE CO., LTD.
BY: ________________________
TITLE: Director
ADDRESS: 40 Church Street
Hamilton, Bermuda
<PAGE>
SCHEDULE # 1
(Facultative Reinsurance Agreement)
March 1, 1998 to March 1, 1999
Reinsurer Name Consolidated American Rental Insurance
Company, Ltd.
C/O Willis Corroon Management
40 Church Street
Hamilton, Bermuda
Original Insured Rent a Wreck of America, Inc.
Address 11460 Cronridge Drive, Suite 118
Owings Mills, MD. 21117
Agent for Service
of Process Willis Corroon of Maryland
Address 10 North Park Drive
Hunt Valley, MD. 21030
ARTICLE I
POLICY(IES) REINSURED:
A. Policy Number(s):
(l) RMCA 3208643
(2) RMCA 3208644
(3) RMCA 3208645
which are incorporated herein by reference and made a part
hereof.
B. Territory: As per policy(ies) listed in Item A
C. Policy Period:
12:01 A.M. Eastern Standard Time, March 1, 1998 to 12:01 A.M. Eastern
Standard Time, March 1, 1999.
<PAGE>
D. Policy Limits:
Policy Number(s): RMCA 3208643
RMCA 3208644
RMCA 3208645
Automobile Liability: $100,000 Bodily Injury each Person
$300,000 Bodily Injury each Accident
$100,000 Property Damage each Accident
Automobile Physical Damage: Actual Cash Value Comprehensive
Actual Cash Value Collision
E. REINSURER'S SHARE: Exceeds $25,000 before Company may
request prompt payment.
F. REINSURING TERMS:
(1) The Reinsurers aggregate limit of liability is the most the reinsurer
will pay. The estimated aggregate limit of liability is one million
three hundred thousand dollars ($1,300,000). This limit of liability is
subject to adjustment as follows:
Adjustment Basis Adjustment Rate Per
---------------- --------------- ---
[redacted pending [redacted pending each
confidentiality request confidentiality request
with SEC] with SEC]
Subject to a maximum downward adjustment of 10%.
(2) Subject to (1) above, Automobile Liability (including Automobile
Physical Damage if agreed) under the Company's Policy Number RMCA
3208643, RMCA 3208644, RMCA 3208645, the Reinsurer agrees to reinsure
the Company and be liable for One Hundred Percent (100%) of the first
One Hundred Thousand Dollars ($100,000) of the Company's Ultimate Net
Loss per Bodily Injury each Person.
(3) Subject to (1) above, Automobile Liability (including Automobile
Physical Damage if agreed) under the Company's Policy Number RMCA
3208643, RMCA 3208644, RMCA 3208645, the Reinsurer agrees to reinsure
the Company and be liable for One Hundred Percent (100%) of the first
Three Hundred Thousand Dollars ($300,000) of the Company's Ultimate Net
Loss per Bodily Injury each Accident.
<PAGE>
(4) Subject to (1) above, Automobile Liability (including Automobile
Physical Damage if agreed) under the Company's Policy Number RMCA
3208643, RMCA 3208644, RMCA 3208645, the Reinsurer agrees to reinsure
the Company and be liable for One Hundred Percent (100%) of the first
One Hundred Thousand Dollars ($100,000) of the Company's Ultimate Net
Loss per Property Damage each Accident.
(5) Subject to (l) above, Allocated Loss Expense: Reinsurer agrees to
reinsure the Company against and be liable for Allocated Loss Expense
under the policies covered hereunder as follows: 1) if Ultimate Net
Loss is contained within the Reinsured Limit(s) - Reinsurer will pay
all Allocated Loss Expenses; 2) if Ultimate Net Loss exceeds the
Reinsured Limit(s) - Reinsurer will pay that amount of Allocated Loss
Expenses that is in proportion to the ratio that the Reinsured Limit(s)
bears to the Loss paid under the Policy(ies); or 3) if there is no
Ultimate Net Loss - Reinsurer will pay all Allocated Loss Expenses up
to the Reinsured Limit(s) and fifty percent (50%) of the Allocated Loss
Expenses which exceed the Reinsured Limit(s).
G. PREMIUM AND COMMISSION:
Premium and Commission due from the Reinsurer for the Reinsurance
hereunder shall be calculated in accordance with the following schedule. Gross
Premiums Written shown are estimates for the beginning of the Agreement period.
<PAGE>
1. Gross Premiums Written $*
LESS
2. Excess Premium $*
EQUALS
3. Subject Premium $*
LESS
4. Taxes, Board, Bureaus
and Residual Market
Charges; adjustable-see note# 1. $*
5. Claims Service Fees
Adjustable in Accordance
With Article VIII; and $*
6. Profit and Adminis-
tration; adjustable [redacted pending $*
confidentiality request with SEC]
7. Sub-total (4,5,6) $*
EQUALS
8. Gross Ceded Premium
(line 3 less line 7) $*
9. Net Ceded Premium
(line 8 less line 9) $*
10. Loss Escrow Fund $*
*Redacted pending confidentiality request with SEC
Note: #1) Taxes, Boards & Bureaus, and Residual Market Loadings will be adjusted
per the terms of the Large Risk Rating Plan Endorsement located on policy #
RMCA 3208644.
H. CESSION STATEMENTS
Account Current Statements will be rendered 30 days after the close of
the month or as soon as reasonably practicable thereafter, as shown in the
attached form or in such other simplified form as prepared by the Company.
<PAGE>
1. Gross Premiums Written ____________
EQUALS
2. Excess Reinsurance ____________
3. Subject Premium ____________
LESS
4. Taxes, Board, Bureaus and
Residual Market Charges; and ____________
5. Claims Service Fees; and ____________
6. Profit and Administration;
and ____________
7. Direct Commission; and ____________
8. Sub-total (4,5,6,7) ____________
EQUALS
9. Gross Ceded Premium ____________
(line 3 less line 8)
10. Federal Excise Tax ____________
(line 3 x 1%)
11. Net Ceded Premium ____________
(line 9 less line 10)
LESS
12. Escrow Fund Reimbursement; and ____________
13. Paid Losses ____________
EQUALS
14. Balance Due To (From) Reinsurer ____________
B. The balance due shall be paid by the debtor party to the other
within ___ (45) days after the close of the month or as soon as
reasonably practicable thereafter.
I. CLAIMS SERVICE FEES
<PAGE>
The Company has engaged through AIG Risk Management, Inc., Hertz Claims
Management Corporation to handle Claims Administration for claims arising
hereunder. Claims shall be paid for as follows:
a. Automobile Liability - Bodily Injury
$ 525.00 per claim
b. Automobile Liability - Property Damage
$ 155.00 per claim
c. Automobile Liability - No Fault
$ 525.00 per claim
d. Automobile Liability - Physical Damage
$135.00 per claim
In addition, any other fees, charges or expenses will be adjustable per
the terms contained in that certain contract between AIGRM and the
Claims Administrator for the period covered by this Schedule.
J. INITIAL SECURITY: Amount $500,000. Security to be provided as follows:
$300,000 in the form a Letter of Credit, and $200,000 in the form of a
Bond.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives in New York, New York this
_____ day of __________, 19__.
NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA.
BY:___________________________
TITLE:________________________
ADDRESS: 70 Pine Street
New York, NY 10270
<PAGE>
and in Bermuda, this 30 day of Apr, 1998.
CONSOLIDATED AMERICAN RENTAL
INSURANCE CO., LTD.
BY:___________________________
TITLE: DIRECTOR
ADDRESS: 40 CHURCH STREET
HAMILTON, BERMUDA
