Article

Note: On October 16, 2017, the United States District Court entered a judgment in favor of Plaintiff/Appellee, Beau Townsend Ford Lincoln (Beneficiary) against Defendant/Appellant, Don Hinds Ford (Applicant). Applicant timely appealed the judgment to the United States Court of Appeals for the Sixth Circuit. Applicant moved to stay execution of the judgment pending appeal and sought leave to secure the judgment pending appeal through use of a standby subject to ISP98. The parties indicated that they had agreed to the terms of the standby “together with any substitute or replacement for it”. The United States District Court for the Southern District of Ohio, Rose, J., approved use of the standby as adequate security and granted a stay of execution of the judgment pending appeal.

The Judge ordered Applicant to obtain a USD 850,000.00 standby in favor of Beneficiary. The Order provided that Beneficiary may demand payment on the standby without further court order provided that the judgment “has become final and nonappealable”, the Issuer elects not to extend the standby, or the issuer discloses a demand for payment. The Order further stated that so long as Applicant and Issuer maintain the standby, execution of the judgment would be stayed and no execution would issue other than as provided in the Order. In the event the standby was not maintained, the stay would cease to operate and execution on the judgment could commence. If the judgment were vacated or reversed, Beneficiary would immediately return the standby to Applicant upon demand.

The Opinion included the text of the standby in an appendix as follows:

“The Huntington National Bank International Services — EA2ES5 7 Easton Oval Huntington Columbus, OH 43219 614-480- INTL (4685) — Customer Service International@Huntington.com Irrevocable Standby Letter of Credit Beneficiary: Beau Townsend Ford Lincoln, Inc. 1020 West National Road Vandalia, OH 45377 Applicant: Don Hinds Ford, Inc. 12610 Ford Drive Fishers, IN 46038 Issue Date: 10/30/17 Expiration Date: 10/31/18 Amount: USD850,000.00 Our Reference: OSB.00[REDACTED/]

We hereby establish our Irrevocable Standby Letter of Credit No. OSB.00[REDACTED/] in your favor for the account of Don Hinds Ford, Inc., 12610 Ford Drive, Fishers, IN 46038 up to an aggregate amount of USD850,000.00 (Eight Hundred Fifty Thousand and 00/100 United States Dollars) available by your sight draft(s) drawn on The Huntington National Bank marked ‘Drawn under The Huntington National Bank Irrevocable Standby Letter of Credit No. OSB.OO[REDACTED/] dated 10/30/17’ accompanied by the following document(s):

1. Beneficiary's statement signed by one purporting to be an authorized signer of the Beneficiary stating ‘Beau Townsend Ford Lincoln, Inc. is entitled to draw on the Letter of Credit pursuant to the terms of the Order governing the stay of execution and Letter of Credit issued by the Court in the case styled Beau Townsend Ford Lincoln, Inc. d/b/a Beau Townsend Ford v. Don Hinds Ford, Inc. d/b/a Don Hinds Ford, No. 3:15-cv-400, In the United States District Court for the Southern District of Ohio, and the amount drawn is due and owing.’

2. Original Letter of Credit and any amendments.

The expiration date of this Irrevocable Standby Letter of Credit shall be automatically extended without amendment for successive one year periods from the present and each future expiration date, unless we notify you by registered mail, or other receipted means of delivery sent to your above-stated address 30 or more days before the then current expiration date that we elect not to extend the expiration date. The expiration date is not subject to automatic extension beyond 10/31/20 and any pending automatic one-year extension shall be ineffective beyond that date. Said notice will be sent to the address indicated above, unless you notify the Issuing Bank of a change of your address.

Beneficiary's notice of such change of address must be in writing referencing this Letter of Credit Number and must be sent by registered mail, certified mail or courier service to the Issuing Bank's address set forth hereinbelow. Any notice to us will be deemed effective only upon actual receipt by the Issuing Bank.

We hereby agree with you that drafts drawn under and in strict compliance with the terms of this credit will be duly honored by us upon presentation at The Huntington National Bank, Attn: International Services EA2E85, 7 Easton Oval, Columbus, Ohio 43219, on or before our close of business on 10/31/18 or any automatically extended expiration date.

Except as otherwise expressly stated herein, this Letter of Credit is issued subject to the International Standby Practices of the International Chamber of Commerce(‘ISP98’). This Letter of Credit shall be deemed to be a contract made under the laws of the State of Ohio and shall, as to matters not governed by ISP98, be governed by and construed in accordance with the laws of the State of Ohio, other than its conflict of laws rules, which would result in the application of the law of any jurisdiction other than the laws of the State of Ohio.

Sincerely, ______________________ Authorized Signature Amend date: 11/02/17 Standby Letter of Credit Advice of Amendment OSB.00[REDACTED/] Beneficiary: Beau Townsend Ford Lincoln, Inc. 1020 West National Road Vandalia, OH 45377 Applicant: DON HINDS FORD, INC. 12610 FORD DRIVE FISHERS, IN 46038

We hereby amend our Irrevocable Standby Letter of Credit OSB.00[REDACTED/] issued in your favor for the above referenced applicant as follows:

NOTIFICATION TO BENEFICIARY OF NON-EXTENSION CHANGED FROM 30 DAYS TO 60 DAYS

All other terms and conditions remain unchanged.

Sincerely, ______________________ Authorized Signature”

[MMY]

COPYRIGHT OF THE INSTITUTE OF INTERNATIONAL BANKING LAW & PRACTICE

The views expressed in this Case Summary are those of the Institute of International Banking Law and Practice and not necessarily those of the ICC or Coastline Solutions.