EXHIBIT 10.1
EXECUTION COPY
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PRESTOLITE ELECTRIC INCORPORATED
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JANUARY 22, 1998
COMERICA BANK
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TABLE OF CONTENTS
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Page(s)
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1. DEFINITIONS....................................................... 1
2. THE INDEBTEDNESS: Facility A......................................10
3. INTEREST AND PREPAYMENTS..........................................12
4. CONDITIONS; SECURITY..............................................12
5. REPRESENTATIONS AND WARRANTIES....................................13
6. AFFIRMATIVE COVENANTS.............................................16
7. NEGATIVE COVENANTS................................................20
8. ENVIRONMENTAL PROVISIONS..........................................23
9. EVENTS OF DEFAULT.................................................25
10. MISCELLANEOUS.....................................................27
This Table of Contents shall not, for any purpose, be considered to be a part of
the Credit Agreement.
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AMENDED AND RESTATED CREDIT AGREEMENT
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THIS AMENDED AND RESTATED CREDIT AGREEMENT, made as of the 22nd day of
January, 1998, by and between PRESTOLITE ELECTRIC INCORPORATED, a Delaware
corporation, of Ann Arbor, Michigan (herein called "Company"), and COMERICA
BANK, a Michigan banking corporation, of Detroit, Michigan (herein called
"Bank");
RECITALS:
A. Company and Bank are parties to the Credit Agreement dated as of
October 25, 1994, as amended by the First Amendment dated as of February 20,
1996 and the Second Amendment dated as of October 26, 1997 ("Prior Credit
Agreement").
B. Company has requested Bank to amend certain provisions of the Prior
Credit Agreement.
C. Company and Bank wish to amend and restate the Prior Credit Agreement
on the terms and conditions provided herein.
NOW, THEREFORE, Bank and Company agree that the Prior Credit Agreement is
amended and restated in its entirety as follows:
1. DEFINITIONS
For the purposes of this Agreement the following terms will have the
following meanings:
"Account" shall have the meaning assigned to it in the Michigan Uniform
Commercial Code on the date of this Agreement.
"Account Debtor" shall mean the party who is obligated on or under any
Account.
"Advance" shall mean a borrowing requested by Company and made by Bank
under Section 2 of this Agreement.
"Affiliate" shall mean, with respect to any Person, any other Person or
group acting in concert in respect of the first Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with such first Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person or group of Persons, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise. Unless otherwise specified to the
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contrary herein, or the context requires otherwise, Affiliate shall refer to the
Company's Affiliates.
"Approved Account Debtors" shall mean Ford Motor Company, General Motors
Corporation, Chrysler Corporation, Freightliner Corporation, Caterpillar
Corporation, Cummins Corporation, Western Star Corporation, Navistar
Corporation, or Thermo King Corporation, or any subsidiary thereof, or any other
Person approved in writing by Bank in its sole discretion.
"Applicable Prime-based Margin" shall mean (i) at all times other than
during a Margin Reduction Period, one-eighth of one percent (1/8%) per annum,
and (ii) during any Margin Reduction Period, zero percent (0%) per annum.
"Borrowing Base" shall mean as of any date of determination, (i) at all
times other than during a Margin Reduction Period, the sum of (a) eighty-four
percent (84%) of Eligible Accounts plus (b) the lesser of thirty-five percent
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(35%) of Eligible Inventory or Nine Million Dollars ($9,000,000), and (ii)
during any Margin Reduction Period, the sum of (a) eighty percent (80%) of
Eligible Accounts plus the lesser of twenty-five percent (25%) of Eligible
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Inventory or Nine Million Dollars ($9,000,000).
"Business Day" shall mean any day on which commercial banks are open for
domestic and international business in Detroit, Michigan.
"Capital Expenditure" shall mean any payment made directly or indirectly
for the purpose of acquiring or constructing fixed assets, real property or
equipment which in accordance with GAAP would be added as a debit to the fixed
asset account of the Person making such expenditure, including, without
limitation, amounts paid or payable under any conditional sale or other title
retention agreement or under any lease or other periodic payment arrangement
which is of such a nature that payment obligations of the lessee or obligor
thereunder would be required by GAAP to be capitalized and shown as liabilities
on the balance sheet of such lessee or obligor.
"Collateral Assignments" shall mean the three Collateral Assignments of the
Indemnity Agreements dated as of October 25, 1994, executed and delivered by
Company to Bank.
"Collateral Documents" shall mean the Security Agreement and any other
document or instrument of security executed and delivered by Company or any
Domestic Subsidiary after the date hereof.
"Consolidated" or "consolidated" shall mean, when used with reference to
any financial term in this Agreement, the aggregate for two or more persons of
the amounts signified by such term for all such persons determined on a
consolidated basis in accordance with GAAP. Unless otherwise indicated herein,
"Consolidated" shall mean the consolidated accounts of PEI and its Subsidiaries.
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"Consolidated Capitalization" shall mean, as of any date of determination,
the sum of Consolidated Tangible Net Worth plus the principal balance of the
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Senior Debt.
"Consolidated Income Taxes" shall mean for any period the aggregate amount
of taxes based on income or profits for such period of the operations of PEI and
its Subsidiaries determined in accordance with GAAP (to the extent such income
and profits were included in computing Consolidated Net Income).
"Consolidated Interest Expense" shall mean for any period the aggregate
gross interest expense (excluding amortization of original issue discount and
non-cash interest expense and including the interest component of capitalized
lease obligations) of PEI and its Subsidiaries for such period as determined in
accordance with GAAP (to the extent such interest expense was included in
computing Consolidated Net Income).
"Consolidated Net Income" shall mean the net income (or loss) of PEI and
its Subsidiaries for any period determined in accordance with GAAP but excluding
in any event any gains or losses on the sale or other disposition, not in the
ordinary course of business, of investments or fixed or capital assets, and any
taxes on the excluded gains and any tax deductions or credits on account of any
excluded losses.
"Consolidated Net Worth" shall mean at any time the net worth of PEI and
its Subsidiaries as determined in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean at any time Consolidated Net
Worth less the net book value of investments in unconsolidated subsidiaries and
prepaid expenses (other than deferred taxes) and all intangible assets of PEI
and its Subsidiaries such as patents, patent rights, trademarks, trade names,
copyrights, goodwill and similar intangible assets as determined in accordance
with GAAP.
"Debt to Capitalization Ratio" shall mean as of any date of determination
the ratio of total liabilities of PEI and its Subsidiaries determined in
accordance with GAAP, to Consolidated Capitalization.
"Default" shall mean any event, act or omission which, with the giving of
notice, the running of time, or both, would constitute an Event of Default.
"Domestic Subsidiary" shall mean any Subsidiary of PEI that is incorporated
under the laws of any state of the United States of America. For purposes of
this Agreement, 756780 Ontario Limited shall be deemed to be a Domestic
Subsidiary.
"EBITDA" shall mean for any period the sum of Consolidated Net Income for
such period plus Consolidated Income Taxes, Consolidated Interest Expense and
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Consolidated depreciation, amortization and other non-cash charges for such
period.
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"Eligible Account" shall mean an Account (but shall not include interest
and service charges) arising in the ordinary course of Company's business which
meets each of the following requirements:
(a) it is not owing more than ninety (90) days after the date of the
original invoice or other writing evidencing such Account;
(b) it is not owing by an Account Debtor (other than an Approved Account
Debtor) who has failed to pay twenty-five percent (25%) or more of the
aggregate amount of its Accounts owing to Company within ninety (90)
days after the due date of the respective invoices or other writings
evidencing such Accounts;
(c) it arises from the sale or lease of goods and such goods have been
shipped or delivered to the Account Debtor under such Account; or it
arises from services rendered and such services have been performed;
(d) it is evidenced by an invoice, dated not later than the date of
shipment or performance, rendered to such Account Debtor or some other
evidence of billing acceptable to Bank;
(e) it is not evidenced by any note, trade acceptance, draft or other
negotiable instrument or by any chattel paper;
(f) it is a valid, legally enforceable obligation of the Account Debtor
thereunder, and is not subject to any offset, counterclaim or other
defense on the part of such Account Debtor or to any claim on the part
of such Account Debtor denying liability thereunder in whole or as to
any portion greater than 25% of such Account (provided, however, that
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any offset asserted by such Account Debtor [up to 25% of the amount of
such Account] shall decrease the amount of such Eligible Account by the
amount of such claimed offset);
(g) it is not subject to any sale of accounts, any rights of offset,
assignment, lien or security interest whatsoever other than to Bank;
(h) it is not owing by a subsidiary or affiliate of Company nor by an
Account Debtor which (i) does not maintain its chief executive office
in the United States of America or is not described in sub-section (ii)
of this Section (h), (ii) is not organized under the laws of the United
States of America, or any state thereof (unless the Account Debtor is
an Approved Account Debtor, or unless the Account is covered by FCIA
insurance or a letter of credit issued by a bank which is acceptable to
Bank in the exercise of its sole discretion), or (iii) is the
government of any foreign country or sovereign state, or of any state,
province, municipality or other instrumentality thereof;
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(i) it is not an Account owing by the United States of America or any state
or political subdivision thereof, or by any department, agency, public
body corporate or other instrumentality of any of the foregoing, unless
all necessary steps are taken to comply with the Federal Assignment of
Claims Act of 1940, as amended, or with any comparable state law, if
applicable, and all other necessary steps are taken to perfect Bank's
security interest in such Account (provided, however, that this sub-
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section (i) shall apply only during the continuance of a Default or
Event of Default);
(j) it is not owing by an Account Debtor for which Company has received a
notice of (i) the death of the Account Debtor or any partner of the
Account Debtor, (ii) the dissolution, liquidation, termination of
existence, insolvency or business failure of the Account Debtor, (iii)
the appointment of a receiver for any part of the property of the
Account Debtor, or (iv) an assignment for the benefit of creditors, the
filing of a petition in bankruptcy, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against the
Account Debtor;
(k) it is not an account billed in advance, payable on delivery, for
consigned goods, for guaranteed sales, for unbilled sales, for progress
xxxxxxxx, payable at a date more than thirty (30) days after the
invoice date in accordance with its terms, subject to a retainage or
holdback by the Account Debtor or insured by a surety company; and
(l) it is not owing by any Account Debtor whose obligations Bank, acting in
its sole discretion, shall have notified Company are not deemed to
constitute Eligible Accounts.
(m) it is not a "core receivable", as currently identified on Company's
books and records.
An Account which is at any time an Eligible Account, but which subsequently
fails to meet any of the foregoing requirements, shall forthwith cease to be an
Eligible Account.
"Eligible Inventory" shall be valued at the lesser of cost or present
market value in accordance with GAAP, on a first in/first out basis, and shall
mean all of Company's Inventory which is in good and merchantable condition, is
not obsolete or discontinued, and which would properly be classified as "raw
materials", "work in process" or as "finished goods inventory" under GAAP,
excluding (a) cores, consigned goods, inventory located outside the United
States of America, (b) Inventory covered by or subject to a seller's right to
repurchase, or any consensual or nonconsensual lien or security interest
(including without limitation purchase money security interests) other than in
favor of Bank, whether senior or junior to Bank's security interest, and (c)
Inventory that Bank, acting in its reasonable discretion, after having notified
Company, excludes.
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Inventory which is at any time Eligible Inventory, but which subsequently
fails to meet any of the foregoing requirements, shall forthwith cease to be
Eligible Inventory.
"Environmental Laws" shall mean all federal, state and local laws including
statutes, regulations, ordinances, codes, rules, and other governmental
restrictions and requirements, relating to environmental pollution,
contamination or other impairment of any nature, any hazardous or other toxic
substances of any nature, whether liquid, solid and/or gaseous, including smoke,
vapor, fumes, soot, acids, alkalis, chemicals, wastes, by-products, and recycled
materials. These Environmental Laws shall include but not be limited to the
Federal Solid Waste Disposal Act, the Federal Clean Air Act, the Federal Clean
Water Act, the Federal Resource Conservation and Recovery Act of 1976, the
Federal Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Federal Superfund Amendments and Reauthorization Act of 1986,
regulations of the Environmental Protection Agency, regulations of the Nuclear
Regulatory Agency, regulations of any state department of natural resources or
state environmental protection agency now or at any time hereafter in effect and
local health department ordinances.
"Equipment Security Agreement" shall mean the Security Agreement
(Equipment) dated October 25, 1994, executed and delivered by Company to Bank.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, or any successor act or code.
"Event of Default" shall mean any of the Events of Default specified in
Section 9 hereof.
"Facility A Maturity Date" shall mean January 31, 2000.
"Facility A Note" shall mean the Note described in Section 2.1 hereof made
by Company to Bank in the form annexed to this Agreement as Exhibit "A".
"Fixed Charge Coverage Ratio" shall mean as of any date of determination, a
ratio, the numerator of which is EBITDA for the four fiscal quarters then ended
and the denominator of which is the sum of all principal payments paid or
payable during such period with respect to any indebtedness (including capital
leases) of PEI and its Subsidiaries, plus Consolidated Interest Expense for such
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period.
"Funded Debt" shall mean, as of any date of determination, all indebtedness
of PEI and its Subsidiaries for borrowed money or on account of capitalized
lease obligations as of such date, as determined in accordance with GAAP.
"Funded Debt Ratio" shall mean, as of any date of determination thereof, a
ratio, the numerator of which shall be Funded Debt as of such date and the
denominator of which shall be EBITDA for the four fiscal quarters then ended.
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"GAAP" shall mean, as of any applicable date of determination, generally
accepted accounting principles consistently applied.
"Guaranty" shall mean the unconditional guaranty of the Indebtedness dated
October 25, 1994, executed and delivered by PEI to the Bank.
"Indebtedness" shall mean all loans, advances, indebtedness, obligations
and liabilities of Company to Bank under this Agreement, together with all other
indebtedness, obligations and liabilities whatsoever of Company to Bank, whether
matured or unmatured, liquidated or unliquidated, direct or indirect, absolute
or contingent, joint or several, due or to become due, now existing or hereafter
arising.
"Indemnity Agreements" shall mean the agreements dated September 30, 1991,
December 7, 1993 and October 28, 1991 among Company and Allied-Signal, Inc.,
Xxxxxxx-Globe Corporation and Motorola, Inc., respectively, concerning
environmental remediation and other matters.
"Inventory" shall have the meaning assigned to it in the Michigan Uniform
Commercial Code on the date of this Agreement.
"Letter(s) of Credit" shall mean any standby letters of credit issued by
Bank for the account of Company pursuant to Section 2.6 hereof.
"Letter of Credit Reserve" shall mean, as of any applicable date of
determination, an amount equal to the aggregate face amount of all Letters of
Credit.
"Loan Documents" shall mean collectively, this Agreement, the Note, the
Security Agreement, the Letters of Credit, and any other instruments or
agreements executed at any time pursuant to or in connection with any such
documents.
"Xxxxx Acquisition" shall have the meaning given to such term in the
Offering Circular. For purposes of this Agreement, "Xxxxx Acquisition" shall be
deemed to include (a) the purchase by Company or a Wholly Owned Subsidiary of
shares of Xxxxx Argentina pursuant to the Xxxxx Argentina Option and (b) the
purchase by Company or a Wholly Owned Subsidiary of any of the approximately 1%
of the outstanding shares of Xxxxx Argentina not owned by Company, directly
or indirectly, on the Issue Date and not subject to the Xxxxx Argentina Option
for an aggregate purchase price not to exceed $300,000. Capitalized terms used
in the immediately preceding sentence and not otherwise defined in this
Agreement shall have the meanings given to such terms in the Offering Circular.
"Margin Reduction Period" is defined in Section 3.3(c).
"Material Adverse Effect" shall mean, with respect to any Person, a
material adverse effect on (a) the business, operations, property, or financial
condition of such Person, or (b) the ability of such Person to perform its
obligations under the Loan Documents.
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"Mortgages" shall mean the mortgages of Company's real estate located in
Arcade, New York and Decatur, Alabama.
"Note" shall mean the Facility A Note, as amended from time to time, and
promissory note(s) issued in extension or renewal thereof.
"Offering Circular" shall mean the Confidential Offering Circular dated
January 16, 1998, relating to the Senior Debt.
"PEI" shall mean PEI Holding, Inc., a Delaware corporation.
"Pension Plans" shall mean all pension plans of Company or any Domestic
Subsidiary which are subject to ERISA.
"Permitted Liens" shall mean with respect to any Person:
(a) liens for taxes not yet due and payable or which are being
contested in good faith by appropriate proceedings diligently pursued, provided
that provision for the payment of all such taxes has been made on the books of
such Person as may be required by GAAP;
(b) mechanics', materialmen's, banker's, carriers', warehousemen's and
similar liens and encumbrances arising in the ordinary course of business and
securing obligations of such Person that are not overdue for a period of more
than 60 days or are being contested in good faith by appropriate proceedings
diligently pursued, provided that in the case of any such contest (i) any
proceedings commenced for the enforcement of such liens and encumbrances shall
have been duly suspended; and (ii) such provision for the payment of such liens
and encumbrances has been made on the books of such Person as may be required by
GAAP;
(c) liens arising in connection with worker's compensation,
unemployment insurance, old age pensions and social security benefits and
similar statutory obligations which are not overdue or are being contested in
good faith by appropriate proceedings diligently pursued, provided that in the
case of any such contest (i) any proceedings commenced for the enforcement of
such liens shall have been duly suspended; and (ii) such provision for the
payment of such liens has been made on the books of such Person as may be
required by GAAP;
(d)(i) liens incurred in the ordinary course of business to secure the
performance of statutory obligations arising in connection with progress
payments or advance payments due under contracts with the United States
government or any agency thereof entered into in the ordinary course of business
and (ii) liens incurred or deposits made in the ordinary course of business to
secure the performance of statutory obligations, bids, leases, fee and expense
arrangements with trustees and fiscal agents and other similar obligations
(exclusive of obligations incurred in connection with the borrowing of money,
any lease-purchase arrangements or the payment of the deferred purchase price of
property), provided
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that full provision for the payment of all such obligations set forth in
clauses (i) and (ii) has been made on the books of such Person as may be
required by GAAP;
(e) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other similar
purposes, or zoning or other restrictions as to the use of real properties,
which do not materially interfere with the business of such Person; and
(f) liens described in attached Schedule 7.7.
"Permitted Prepayments" shall mean (a) the repayment by Company of
approximately $47,300,000 in outstanding indebtedness with the proceeds of the
Senior Debt, as described in the Offering Circular, (b) prepayments made while
no Default or Event of Default has occurred and is then continuing (either
before the prepayment or after giving effect thereto) (i) at any time that an
asset disposition permitted by Section 7.2 or as to which Bank has otherwise
consented, requires a mandatory prepayment of the Senior Notes, and/or (ii) at
any time prior to February 1, 2001 of up to $43,750,000 principal of the Senior
Debt with the proceeds of a public offering of the common stock of PEI or
Company, and (c) prepayments of debt permitted by Section 7.4(d) made while no
Default or Event of Default has occurred and is then continuing.
"Person" or "person" shall mean any individual, corporation, partnership,
joint venture, association, trust, unincorporated association, joint stock
company, government, municipality, political subdivision or agency, or other
entity.
"Prime Rate" shall mean the per annum interest rate established by Bank as
its prime rate for its borrowers as such rate may vary from time to time, which
rate is not necessarily the lowest rate on loans made by Bank at any such time.
"Prime-based Advance" shall mean an Advance which bears interest at the
Prime-based Rate.
"Prime-based Rate" shall mean a per annum interest rate which is the sum of
the Applicable Prime-based Margin plus the Prime Rate.
"Recapitalization Dividend" shall mean the dividend and related payments of
not more than $30,100,000 to be declared and paid by Company to PEI with the
proceeds of the Senior Debt, as described in the Offering Circular.
"Request for Advance" shall mean a Request for Advance issued by Company
under this Agreement in the form annexed to this Agreement as Exhibit "B".
"Security Agreement" shall mean the Security Agreement (Accounts, Chattel
Paper, and Inventory) dated October 25, 1994, executed and delivered by Company
to Bank.
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"Senior Debt" shall mean the indebtedness of Company evidenced by the
Senior Notes.
"Senior Debt Documents" shall mean the Senior Notes, the Senior Debt
Indenture, and all other documents and agreements to evidence the Senior Debt,
as the same may be amended from time to time (subject to the terms of this
Agreement), and any and all other documents executed in exchange therefor or
replacement or renewal thereof.
"Senior Debt Indenture" shall mean the Indenture relating to the Senior
Notes.
"Senior Notes" shall mean the 9-_% Senior Notes of Company due February 1,
2008 in the original principal amount of $125,000,000, and the notes of Company
issued in exchange therefor pursuant to the Registration Rights Agreement
entered into in connection with the Senior Debt Documents.
"Subsidiary(ies)" shall mean any corporation, association, joint stock
company, business trust, limited liability company or any other business entity
of which more than fifty percent (50%) of the outstanding voting stock, share
capital, membership or other interests, as the case may be, is owned either
directly or indirectly by any Person or one or more of its Subsidiaries, or the
management of which is otherwise controlled, directly, or indirectly through one
or more intermediaries, or both, by any Person and/or its Subsidiaries. Unless
otherwise specified to the contrary herein, Subsidiary(ies) shall refer to PEI's
Subsidiary(ies).
2. THE INDEBTEDNESS: Facility A
2.1 Bank agrees to make Advances to Company at any time and from time to
time from the effective date hereof until the Facility A Maturity Date, not to
exceed Twenty-Three Million Dollars ($23,000,000) in aggregate principal amount
at any one time outstanding. All of the Advances under this Section 2 shall be
evidenced by the Facility A Note under which advances, repayments and readvances
may be made, subject to the terms and conditions of this Agreement.
2.2 The Facility A Note shall mature on the Facility A Maturity Date and
each Advance from time to time outstanding thereunder shall bear interest at the
Prime-based Rate. The amount and date of each Advance and the amount and date of
any repayment shall be noted on Bank's records, which records will be conclusive
evidence thereof absent demonstrable error in computation.
2.3 Company may request an Advance under this Section 2 upon the delivery
to Bank of a Request for Advance executed by an authorized officer of Company,
subject to the following:
(a) each such Request for Advance shall set forth the information required
on the Request for Advance form annexed hereto as Exhibit "B";
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(b) each such Request for Advance shall be delivered to Bank by 11 a.m. on
the proposed date of Advance;
(c) the principal amount of such Advance, plus the sum of the amount of all
other outstanding Advances under this Section 2 and the Letter of
Credit Reserve shall not exceed the Borrowing Base; and
(d) a Request for Advance, once delivered to Bank, shall not be revocable
by Company.
Bank may at its option lend under this Section 2 upon Company's telephone or
facsimile request upon execution by Company of a Borrower's Telephone and
Facsimile Authorization in the form of Exhibit "D" attached hereto.
2.4 The aggregate principal amount at any one time outstanding under the
Facility A Note plus the Letter of Credit Reserve shall never exceed the lesser
of Twenty-Three Million Dollars ($23,000,000) or the Borrowing Base. Company
shall immediately make all payments necessary to comply with this provision.
2.5 Company agrees to pay to Bank a commitment fee on the average daily
balance of the unused portion of the Facility A commitment at the rate of three-
eighths of one percent (3/8%) per annum, computed on the actual number of days
elapsed using a year of 360 days. The commitment fee shall be payable quarterly
in arrears on the first day of each calendar quarter and on the Facility A
Maturity Date. For purposes of calculating the commitment fee, the face amount
of outstanding Letters of Credit shall be considered usage of the Facility A
commitment.
2.6 In addition to Advances under the Facility A Note to be provided to
Company by Bank under and pursuant to Section 2.1 of this Agreement, Bank
further agrees to issue, or commit to issue, from time to time, standby Letters
of Credit for the account of Company in aggregate undrawn amounts not to exceed
Two Million Dollars ($2,000,000) at any one time outstanding; provided, however,
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that the sum of the aggregate amount of Advances outstanding under the Facility
A Note plus the Letter of Credit Reserve shall not exceed the lesser of Twenty-
Three Million Dollars ($23,000,000) or the Borrowing Base at any time; provided
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further, that except as described in the following proviso, no Letter of Credit
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shall, by its terms, have an expiration date which extends beyond the earlier to
occur of one year after issuance or the Facility A Maturity Date; and provided
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further, that in the event any Letter of Credit has an expiration date later
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than the Facility A Maturity Date, Company shall deliver to Bank on demand cash
collateral in an amount equal to the maximum undrawn amount of such Letter of
Credit. In addition to the terms and conditions of this Agreement, the issuance
of any Letters of Credit shall also be subject to the terms and conditions of
any letter of credit applications and agreements executed and delivered by
Company to Bank with respect thereto. Company shall pay to Bank annually in
advance a fee of two percent (2%) per annum of the amount of each Letter of
Credit.
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2.7 Letters of Credit and proceeds of Advances under the Facility A Note
shall be used solely for (a) general corporate and working capital purposes and
(b) investments permitted by Section 7.6 hereof.
3. INTEREST AND PREPAYMENTS; MARGIN REDUCTION OPTION
3.1 Interest. The Facility A Note and the Advances shall bear interest
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from the date thereof on the unpaid principal balance thereof from time to time
outstanding at a rate per annum equal to the Prime-based Rate. Interest shall be
payable monthly on the first day of each month, commencing on February 1, 1998.
Notwithstanding the foregoing, from and after the occurrence of any Event of
Default and during the continuation thereof, the Advances shall bear interest,
payable on demand, at a rate per annum equal to three percent (3%) above the
Prime-based Rate. Interest on all Advances shall be calculated on the basis of a
360 day year for the actual number of days elapsed. The interest rate with
respect to any Advance shall change on the effective date of any change in the
Prime-based Rate.
3.2 Optional Prepayments. At its option Company may prepay the Advances in
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whole at any time or in part from time to time, without premium or penalty, but
with accrued interest on the principal being prepaid to the date of such
prepayment.
3.3 Margin Reduction Option. (a) From time to time and at any time during
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which no Default or Event of Default has occurred and is then continuing,
Company may elect (the "Margin Reduction Option") to reduce the Applicable
Prime-based Margin to zero percent (0%) by delivery to Bank of a notice on the
form of Exhibit "C" attached hereto. From and after the delivery of such
notice, and until such notice is revoked as provided in subsection (b), the
"Applicable Prime-based Margin" and the "Borrowing Base" shall be as defined in
subsection (ii) of such definitions.
(b) Company may revoke any effective exercise of the Margin Reduction
Option by delivery to Bank of a notice in the form of Exhibit "E" attached
hereto. From and after delivery of such notice, the "Applicable Prime-based
Margin" and the "Borrowing Base" shall be as defined in subsection (i) of such
definitions.
(c) Company may exercise the Margin Reduction Option no more frequently
than twice in any calendar year. Any period during which a Margin Reduction
Option shall be in effect is referred to herein as a "Margin Reduction Period."
4. CONDITIONS; SECURITY
4.1 Company agrees to furnish Bank prior to the initial borrowing under
this Agreement, in form and substance to be satisfactory to Bank, with (i) an
opinion of Company's legal counsel in form and substance satisfactory to Bank;
(ii) certified copies of resolutions of the Board of Directors of Company
evidencing approval of the borrowings and transactions contemplated hereunder;
(iii) a certificate of good standing from the state of Company's incorporation
and from the state(s) in which it is required to be qualified to do business;
and (iv) such other documents and instruments as Bank may reasonably require.
12
4.2 Prior to the initial borrowing hereunder, Company shall provide to
Bank, in form and substance satisfactory to Bank, with the following:
(a) evidence that the Senior Notes have been issued, and that Company
has received gross cash consideration (before underwriters'
discounts and commissions and other expenses of issuance) therefor
of not less than $125,000,000;
(b) certified copies of the Senior Debt Documents, which shall be
satisfactory to Bank; and
(c) evidence satisfactory to Bank that the Xxxxx Acquisition has
closed on terms substantially similar to those described in the
Offering Circular.
4.3 On the date of execution of this Agreement, Company shall pay to Bank
a non-refundable closing fee in the amount of $57,500. Such fee shall be deemed
fully earned upon execution of this Agreement.
4.4 Company reaffirms and ratifies all of its obligations to Bank under
the Collateral Documents, and agrees that the Collateral Documents shall secure
the Indebtedness in accordance with their terms.
4.5 Company and Bank hereby terminate the Equipment Security Agreement,
the Collateral Assignments, and each of the Mortgages. Bank shall promptly file
UCC termination statements and mortgage discharges with respect to the
collateral covered by such agreements.
5. REPRESENTATIONS AND WARRANTIES
Company represents and warrants and such representations and warranties
shall be deemed to be continuing representations and warranties during the
entire life of this Agreement and after giving effect to the Xxxxx Acquisition
and the issuance of the Senior Debt:
5.1 Company and each Domestic Subsidiary is a corporation duly organized
and existing in good standing under the laws of the jurisdiction of its
incorporation; Company and each Domestic Subsidiary is in good standing in each
jurisdiction in which it is required to be qualified to do business; execution,
delivery and performance of this Agreement and other documents and instruments
required under this Agreement, and the issuance of the Note by Company, are
within its corporate powers, have been duly authorized, are not in contravention
of law or the terms of Company's Certificate of Incorporation or Bylaws, and do
not require the consent or approval of any governmental body, agency or
authority; and this Agreement and other documents and instruments required under
this Agreement and the Note, when issued and delivered, will be valid and
binding on the Company in accordance with their terms.
13
5.2 The execution, delivery and performance of this Agreement and any
other documents and instruments required under this Agreement, and the issuance
of the Note by Company, are not in contravention of the unwaived terms of any
indenture, agreement or undertaking to which Company is a party or by which it
is bound.
5.3 No litigation or other proceeding before any court or administrative
agency is pending, or to the knowledge of the officers of Company is threatened
against Company or any Domestic Subsidiary, the outcome of which could
materially impair Company's or any Domestic Subsidiary's financial condition or
the ability of Company or any Domestic Subsidiary to carry on its business.
5.4 There are no security interests in, liens, mortgages, or other
encumbrances on any of Company's or any Domestic Subsidiary's assets, except to
Bank or as otherwise permitted by this Agreement.
5.5 Neither Company nor any Domestic Subsidiary maintains or contributes to
any employee pension benefit plan subject to title IV of the "Employee
Retirement Income Security Act of 1974" (herein called "ERISA"), except those
set forth in attached Schedule 5.5. Except as set forth on Schedule 5.5, there
was no unfunded past service liability of any Pension Plan as of December 31,
1997, and there is no accumulated funding deficiency within the meaning of
ERISA, or any existing material liability with respect to any pension plan owed
to the Pension Benefit Guaranty Corporation ("PBGC") or any successor thereto,
except any funding deficiency for which an application to the PBGC for waiver is
pending or for which a waiver has been granted by the PBGC.
5.6 The audited financial statements of PEI and its consolidated
Subsidiaries dated December 31, 1996, previously furnished Bank, are complete
and correct and fairly present the financial condition of PEI and its
consolidated Subsidiaries in accordance with GAAP as of such date; the unaudited
financial statements of PEI and its consolidated Subsidiaries dated October 4,
1997, previously furnished Bank, are complete and correct and, to the best of
the knowledge of Company's officers, fairly present the financial condition of
PEI and its consolidated Subsidiaries as of such date; since October 4, 1997
there has been no material adverse change in the financial condition of PEI and
its Subsidiaries (taken as a whole); and to the best of the knowledge of
Company's officers, neither Company nor any Subsidiary has any material
contingent obligations (including any liability for taxes) not disclosed by or
reserved against in said balance sheets, and at the present time there are no
material unrealized or anticipated losses from any present commitment of Company
or any Subsidiary.
5.7 The financial projections dated December 12, 1997 previously furnished
by Company to Bank, the receipt of which Bank acknowledges, were as of the date
thereof and are as of the date of execution of this Agreement reasonable in all
material respects taking into account all facts and information known to or
reasonably available to Company.
5.8 All tax returns and tax reports of Company and each Domestic
Subsidiary required by law to have been filed have been duly filed or extensions
obtained, and all taxes, assessments and other governmental charges or levies
(other than those presently payable
14
without penalty and those currently being contested in good faith for which
adequate reserves have been established) upon Company or any Domestic Subsidiary
(or any of its properties) which are due and payable have been paid. The
charges, accruals and reserves on the books of Company and the Domestic
Subsidiaries in respect of the Federal income tax for all periods are adequate
in the opinion of Company.
5.9 There are no Subsidiaries of PEI, except as set forth in attached
Schedule 5.9.
5.10 Company and each Domestic Subsidiary are, in the conduct of their
business, in compliance in all material respects with all federal, state or
local laws, statutes, ordinances and regulations applicable to any of them, the
enforcement of which, if Company or any Domestic Subsidiary were not in
compliance, would have a Material Adverse Effect on Company and the Domestic
Subsidiaries (taken as a whole). Company and each Domestic Subsidiary have all
approvals, authorizations, consents, licenses, orders and other permits of all
governmental agencies and authorities, whether federal, state or local, required
to permit the operation of their business as presently conducted, except such
approvals, authorizations, consents, licenses, orders and other permits with
respect to which the failure to have can be cured without having a Material
Adverse Effect on Company and the Domestic Subsidiaries (taken as a whole).
5.11 Neither Company nor any Domestic Subsidiary is a party to any
litigation or administrative proceeding, nor so far as is known by Company is
any litigation or administrative proceeding threatened against Company or any
Domestic Subsidiary, the outcome of which could have a Material Adverse Effect
on Company and the Domestic Subsidiaries (taken as a whole) which in either case
(A) asserts or alleges that Company or any Domestic Subsidiary violated
Environmental Laws, (B) asserts or alleges that Company or any Domestic
Subsidiary is required to clean up, remove, or take remedial or other response
action due to the disposal, depositing, discharge, leaking or other release of
any hazardous substances or materials, (C) asserts or alleges that Company or
any Domestic Subsidiary is required to pay all or a portion of the cost of any
past, present, or future cleanup, removal or remedial or other response action
which arises out of or is related to the disposal, depositing, discharge,
leaking or other release of any hazardous substances or materials by Company or
any Domestic Subsidiary.
5.12 Neither Company nor any Domestic Subsidiary is in violation of any
Environmental Laws which would subject Company or any Domestic Subsidiary to
damages, penalties, injunctive relief or cleanup costs under any applicable
Environmental Laws or which require or are likely to require cleanup, removal,
remedial action or other response pursuant to applicable Environmental Laws by
Company or any Domestic Subsidiary, except for such violations which are not
likely to have a Material Adverse Effect on Company and the Domestic
Subsidiaries (taken as a whole).
5.13 Neither Company nor any Domestic Subsidiary is subject to any
judgment, decree, order or citation related to or arising out of applicable
Environmental Laws which could have a Material Adverse Effect on Company and the
Domestic Subsidiaries (taken as a whole) and to the best knowledge of the
Company, neither Company nor any Domestic
15
Subsidiary has been named or listed as a potentially responsible party by any
governmental body or agency in a matter arising under any applicable
Environmental Laws, the result of which is likely to have a Material Adverse
Effect on Company and the Domestic Subsidiaries (taken as a whole).
5.14 Company and each Domestic Subsidiary has all permits, licenses and
approvals required under applicable Environmental Laws.
5.15 Neither Company nor any Domestic Subsidiary is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended. Neither
Company nor any Domestic Subsidiary is engaged principally, or as one of its
important activities, directly or indirectly, in the business of extending
credit for the purpose of purchasing or carrying margin stock, and none of the
proceeds of any of the loans hereunder will be used, directly or indirectly, for
any purpose which would violate the provisions of Regulation U or X of the Board
of Governors of the Federal Reserve System. Terms for which meanings are
provided in Regulation U of the Board of Governors of the Federal Reserve System
or any regulations substituted therefor, as from time to time in effect, are
used in this paragraph with such meanings.
5.16 Company has good and valid title to the collateral covered by the
Collateral Documents, subject only to Permitted Liens.
6. AFFIRMATIVE COVENANTS
Company covenants and agrees that it will, so long as Bank may make any
Advance under this Agreement and thereafter so long as any Indebtedness remains
outstanding under this Agreement:
6.1 Furnish Bank:
(a) within ninety (90) days after and as of the end of each fiscal year of
PEI, detailed consolidated and consolidating financial statements of
PEI and its consolidated Subsidiaries, audited and certified by
independent certified public accountants satisfactory to Bank;
(b) within thirty (30) days after and as of the end of each month other
than December, and within sixty (60) days after the end of each
December, a consolidated balance sheet and consolidated statement of
profit and loss and surplus reconciliation of PEI and the Subsidiaries
presented in the form previously submitted to Bank, certified by an
authorized officer of Company as being correct and accurate to the best
of his knowledge;
(c) within twenty (20) days after and as of the end of each month,
including the last month of each fiscal year, the monthly aging of
Company's Accounts and accounts payable and an inventory report;
16
(d) Within twenty (20) days after and as of the end of each month (and at
such other times as Bank may request), a schedule identifying each
Eligible Account as of the end of such month and any such schedule
shall be accompanied, if so requested by Bank, by a true and correct
copy of the invoices evidencing such Eligible Account and by evidence
of shipment or performance;
(e) within ninety (90) days after the beginning of each fiscal year of PEI,
financial projections for PEI and the Subsidiaries (on a month by month
basis) for such fiscal year;
(f) such information as required by the terms and conditions of any
security agreements referred to in this Agreement;
(g) simultaneously with the delivery of any financial statements or
reports, certificates, notices of default or other material
correspondence to the holders of the Senior Debt, copies thereof; and
(h) promptly, and in form to be satisfactory to Bank, such other
information as Bank may reasonably request from time to time.
6.2 Pay and discharge, and cause each Domestic Subsidiary to pay and
discharge, all taxes and other governmental charges before the same shall become
overdue, unless and to the extent only that such payment is being contested in
good faith.
6.3 Maintain, and cause each Domestic Subsidiary to maintain, insurance
coverage on their physical assets and against other business risks in such
amounts and of such types as are customarily carried by companies similar in
size and nature, and in the event of acquisition of additional property, real or
personal, or of incurrence of additional risks of any nature, increase such
insurance coverage in such manner and to such extent as prudent business
judgment and present practice would dictate; and in the case of all policies
covering property hereafter mortgaged or pledged to Bank or property in which
Bank shall have a security interest of any kind whatsoever, other than those
policies protecting against casualty liabilities to strangers, all such
insurance policies shall provide that the loss payable thereunder shall be
payable to Company (or the Domestic Subsidiary) and Bank (as mortgagee) as their
respective interests may appear, all said policies or copies thereof, including
all endorsements thereon and those required hereunder, to be deposited with
Bank.
6.4 Permit, and cause each Domestic Subsidiary to permit, Bank, through
its authorized attorneys, accountants and representatives, to examine Company's
and each Domestic Subsidiary's books, accounts, records, ledgers and assets of
every kind and description at all reasonable times upon oral or written request
of Bank, which shall include but shall not be limited to collateral audits of
Company conducted by Bank, at Company's cost and expense (provided that so long
as Company shall not be in default, Company shall be obligated to pay for no
more than two (2) collateral audits of its North American operations per year).
17
6.5 Promptly notify Bank of any Default or Event of Default, and promptly
inform Bank of the existence or occurrence of any condition or event (other than
conditions having an effect on the economy in general) which could have a
material adverse effect upon Company's or any Subsidiary's financial condition.
6.6 Maintain, and cause each Domestic Subsidiary to maintain, in good
standing all licenses required by any state or any agency thereof, or other
governmental authority that may be necessary or required for Company and the
Domestic Subsidiaries to carry on their general business objects and purposes.
6.7 Reserved.
6.8 Comply, and cause each Domestic Subsidiary to comply, with all
material requirements imposed by ERISA as presently in effect or hereafter
promulgated, including but not limited to, the minimum funding requirements of
any Pension Plan.
6.9 Promptly notify Bank after the occurrence thereof in writing of any of
the following events:
(a) the termination of a Pension Plan pursuant to Subtitle C of Title IV of
ERISA or otherwise;
(b) the appointment of a trustee by a United States District Court to
administer a Pension Plan;
(c) the commencement by the Pension Benefit Guaranty Corporation, or any
successor thereto of any proceeding to terminate a Pension Plan;
(d) the failure of a Pension Plan to satisfy the minimum funding
requirements for any plan year as established in Section 412 of the
Internal Revenue Code of 1954, as amended or any similar provision
under the Internal Revenue Code of 1986, as amended;
(e) the withdrawal of Company or any Domestic Subsidiary from a Pension
Plan; or
(f) a reportable event, within the meaning of Title IV of ERISA.
6.10 Furnish to the Bank concurrently with the delivery of each of the
financial statements required by Section 6.1(a) and each financial statement
required by Section 6.1(b) for the months of March, June, September and
December, a statement prepared and certified by the chief financial officer of
Company (or in his absence, a responsible senior officer of Company) (a) setting
forth all computations necessary to show compliance by Company with the
financial covenants contained in Sections 6.11 through 6.14 hereof, (b) stating
that as of the date thereof, no Default or Event of Default hereunder has
occurred and is continuing, or if any such event or condition has occurred and
is continuing or exists, specifying in detail the
18
nature and period of existence thereof and any action taken with respect thereto
taken or contemplated to be taken by Company and (c) stating that the signer has
personally reviewed this Agreement and that such certificate is based on an
examination sufficient to assure that such certificate is accurate.
6.11 Maintain Consolidated Capitalization of not less than the following on
the dates indicated below:
June 30, 1998 $81,500,000
December 31, 1998 $87,500,000
December 31, 1999 and
each December 31 thereafter $95,000,000
6.12 Maintain a Debt to Capitalization Ratio of not more than the following
on the dates indicated below:
June 30, 1998 2.5 to 1
December 31, 1998 2.5 to 1
December 31, 1999 and
each December 31 thereafter 2.25 to 1
6.13 Maintain a Fixed Charge Coverage Ratio of not less than the following
on the dates indicated below:
June 30, 1998 2 to 1
December 31, 1998 2 to 1
December 31, 1999 and
each December 31 thereafter 2.5 to 1
6.14 Maintain a Funded Debt Ratio of not more than the following on the
dates indicated below:
June 30, 1998 7.5 to 1
December 31, 1998 6 to 1
December 31, 1999 and
each December 31 thereafter 5 to 1
6.15 Except as otherwise agreed by Bank in writing, maintain, and cause the
Domestic Subsidiaries to maintain, all cash collection and general disbursement
accounts with Bank, other than the existing cash collection account with
Philadelphia National Bank and the existing lockbox and disbursement accounts
with NBD Bank.
6.16 Comply, and cause each Domestic Subsidiary to comply, in all material
respects with all applicable laws, rules, regulations and orders of any
governmental authority
19
(such compliance to include, without limitation, paying before the same become
delinquent all taxes, assessments and governmental charges imposed upon it or
upon its property), except to the extent that compliance with any of the
foregoing is then being contested in good faith by appropriate legal proceedings
and with respect to which adequate financial reserves have been established on
the books and records of the Company or such Domestic Subsidiary.
6.17 Pay and discharge, and cause each Domestic Subsidiary to pay and
discharge, all contractual obligations calling for the payment of money (other
than trade payables incurred in the ordinary course of business) before the same
shall become overdue, unless and to the extent only that such payment is being
contested in good faith.
6.18 In the event that, at any time while this Agreement is in effect,
Company shall issue any indebtedness for borrowed money which is not by its
terms subordinate and junior to the Indebtedness and such indebtedness shall
include, or be issued pursuant to a trust indenture or other agreement which
includes, financial covenants which are not substantially identical to the
financial covenants set forth in this Agreement, or in the event Company desires
to amend the Senior Debt Documents to revise any financial covenants or to add
any new financial covenants, Company shall so advise Bank in writing. Such
notice shall be accompanied by a copy of the applicable agreement containing
such financial covenants. If Bank determines in its sole discretion that some or
all of the financial covenants set forth in such agreement are more favorable to
the lender thereunder than the financial covenants set forth in this Agreement
("More Favorable Terms") and that Bank desires that this Agreement be amended to
incorporate the More Favorable Terms, then Bank shall give written notice of
such determination to Company. Thereupon, and in any event within thirty (30)
days following the date of notice by Bank to Company, Company and Bank shall
enter into an amendment to this Agreement incorporating, on terms and conditions
acceptable to Bank, the More Favorable Terms.
7. NEGATIVE COVENANTS
Company covenants and agrees that, so long as Bank may make any Advances
under this Agreement and thereafter so long as any Indebtedness remains
outstanding under this Agreement, it will not, and it will not permit any of the
Domestic Subsidiaries to, without the prior written consent of Bank:
7.1 Purchase, acquire or redeem any of its capital stock or other
securities or make any material change in its capital structure or general
business objectives or purpose, except that Company may redeem stock options, or
capital stock issued as a result of the exercise of such options, in an amount
not to exceed $1,000,000 in any fiscal year if no Event of Default has occurred
and is then continuing, either before or as a result of such redemption.
7.2 Enter into any merger or consolidation or sell, lease, transfer, or
dispose of all, substantially all, or any material part of its assets, except in
the ordinary course of its business.
20
7.3 Guarantee, endorse, or otherwise become secondarily liable for or upon
the obligations of others, except by endorsement for deposit in the ordinary
course of business and guaranties in favor of Bank and except for guaranties
incurred while no Default or Event of Default has occurred and is then
continuing of liabilities not to exceed $1,000,000 in the aggregate at any time.
7.4 Become or remain obligated for any indebtedness for borrowed money, or
for any indebtedness incurred in connection with the acquisition of any
property, real or personal, tangible or intangible, except:
(a) indebtedness to Bank;
(b) current unsecured trade, utility or non-extraordinary accounts payable
arising in the ordinary course of Company's or any Domestic
Subsidiary's business; and
(c) Senior Debt, and any renewals, refundings or refinancings thereof in
amounts not exceeding the original Senior Debt less all permitted
prepayments thereof;
(d) other indebtedness incurred while no Default or Event of Default has
occurred and is continuing, not to exceed $1,000,000 in the aggregate
at any time; and
(e) indebtedness described in attached Schedule 7.4.
7.5 Purchase or otherwise acquire or become obligated for the purchase of
all or substantially all of the assets or business interests of any person, firm
or corporation or any shares of stock of any corporation, trusteeship or
association or in any other manner effectuate an expansion of present business
by acquisition, other than (a) the Xxxxx Acquisition, (b) as permitted by
Section 7.6, and (c) any acquisition in which the sum of the total consideration
paid by Company and the Domestic Subsidiaries (including cash paid, indebtedness
assumed and all other consideration), plus the total consideration paid in
connection with all other acquisitions consummated during the same fiscal year,
does not exceed $1,000,000.
7.6 Make or allow to remain outstanding any investment (whether such
investment shall be of the character of investment in shares of stock, evidences
of indebtedness or other securities or otherwise) in, or any loans or advances
to, any Person, except (a) Company's existing investment in the Subsidiaries
(including the pending "roll over" of Company's 50% interest in Xxxxx Xxxxxxx
Autolek, Ltd. into a 5% interest in Auto-Ignition, Ltd., and the contemporaneous
dissolution of Prestolite Electric Mauritius, Ltd.), (b) new investments in, or
loans or advances to, any Subsidiary made while no Default or Event of Default
has occurred and is then continuing or would result therefrom (including
investments, loans or advances in connection with the Xxxxx Acquisition), (c)
investments in preferred stock of DAX Industries, Inc. not to exceed $2,000,000
in the aggregate ($500,000 of which has been so invested as of the date of this
Agreement), and (d) other investments made while no Default or Event of Default
has occurred and is continuing, not to exceed $1,000,000 in the aggregate at any
time; provided, however, that in no event may Company use more than $8,000,000
-------- -------
of the proceeds of Advances hereunder to make investments or loans or advances;
provided further that such
-------- -------
21
$8,000,000 limitation shall not be applicable to the remaining $1,500,000
investment in preferred stock of DAX Industries, Inc., or to investments, loans
or advances of not more than $1,600,000 with respect to post-closing purchases
of shares of Xxxxx Argentina (as such purchases are referenced in the second
sentence of the definition of Xxxxx Acquisition specified in this Agreement).
7.7 Affirmatively pledge or mortgage any of its assets, whether now owned
or hereafter acquired, or create, suffer or permit to exist any lien, security
interest in, or encumbrance thereon, except:
(a) to Bank; and
(b) the Permitted Liens.
7.8 Sell, assign, transfer or confer a security interest in any account,
contract, note, trade acceptance or other receivable, except to Bank.
7.9 Enter into, maintain, or make contribution to, directly or indirectly,
any employee pension plan that is subject to Title IV of ERISA, except the
Pension Plans.
7.10 Make loans, advances of credit or extensions of credit to any of its
Affiliates or to its officers, directors or shareholders or any member of their
immediate families or any entity controlled by any of the foregoing or to any
other Person, except for (a) sales on open account or in the ordinary course of
business, (b) advances to employees in an amount not exceeding $100,000 at any
time outstanding, and (c) loans or advances permitted by Section 7.6.
7.11 Declare or pay any dividends or make any other distribution upon its
shares of capital stock, except (a) dividends payable in the capital stock of
Company, and (b) dividends by Subsidiaries to Company, and (c) the
Recapitalization Dividend.
7.12 Make any Capital Expenditure during any fiscal year if, after giving
effect thereto, the aggregate amount of all Capital Expenditures made by PEI and
its Subsidiaries during such calendar year would exceed $15,000,000.
7.13 Pay any management, consulting or similar fees to Genstar Capital
Corporation or Genstar Investment Corporation or any of their Affiliates during
any fiscal year if, after giving effect thereto, the aggregate amount of such
payments during such calendar year would exceed the greater of $900,000 or
three-tenths of one percent (0.3%) of PEI's Consolidated net sales for the
preceding fiscal year.
7.14 Enter into any transaction with any of its stockholders or officers,
or its or their Affiliates, except in the ordinary course of business and on
terms not materially less favorable than would be usual and customary in similar
transactions between Persons dealing at arm's length, and except as permitted by
Section 7.13.
22
7.15 Enter into or become subject to any agreement (other than loan
documents evidencing or otherwise related to the Senior Debt) (i) prohibiting
the guaranteeing by Company or any Subsidiary of any obligations, (ii)
prohibiting the creation or assumption of any lien or encumbrance upon the
properties or assets of Company or any Subsidiary, whether now owned or
hereafter acquired, or (iii) requiring an obligation to become secured (or
further secured) if another obligation is secured or further secured.
7.16 Except for Permitted Prepayments, prepay, purchase, redeem or defease
any debt for money borrowed, excluding, subject to the terms hereof, the
Indebtedness.
7.17 Amend, modify or otherwise alter (or suffer to be amended, modified or
altered) or waive (or permit to be waived) in any material respect, any
documents or instruments evidencing or otherwise related to Senior Debt so as to
shorten the original maturity date or amortization thereof or increase the
interest rate applicable thereto, or amend, modify or otherwise alter (or suffer
to be amended, modified or altered) any documents or instruments evidencing or
otherwise related to Senior Debt to limit the maximum amount of the Indebtedness
to an amount less than the amount permitted by the Senior Debt Documents as in
effect on the date hereof or to include any covenants or other provisions, that
require, for the amendment of any term or provision of this Agreement, or the
waiver of any term or provision hereof, the approval or consent of any other
creditor of Company or any Subsidiary; provided, however, that any increase in
-------- -------
the interest rate applicable to the Senior Debt (not in excess of 0.5% per
annum) as a result of the failure to file or lack of effectiveness of the Shelf
Registration Statement or the Exchange Offer Registration Statement described in
the Offering Circular shall not be a violation of this Section 7.17.
8. ENVIRONMENTAL PROVISIONS
8.1 Company shall comply, and cause the Domestic Subsidiaries to comply,
in all material respects with all applicable Environmental Laws.
8.2 Company shall provide to Bank, immediately upon receipt, copies of any
correspondence, notice, pleading, citation, indictment, complaint, order,
decree, or other document from any source asserting or alleging a circumstance
or condition which requires or may require a financial contribution by Company
or any Domestic Subsidiary in respect of a cleanup, removal, remedial action, or
other response by or on the part of Company or any Domestic Subsidiary under
applicable Environmental Laws or which seeks damages or civil, criminal or
punitive penalties from Company or any Domestic Subsidiary for an alleged
violation of Environmental Laws; provided, however, that no such copies shall be
-------- -------
required to be delivered unless it reasonably appears that the matter may result
in a Material Adverse Effect on Company and the Domestic Subsidiaries (taken as
a whole).
8.3 Company shall promptly notify Bank in writing as soon as Company
becomes aware of the occurrence or existence of any condition or circumstance
which makes the environmental warranties contained in this Agreement incomplete
or inaccurate in any material respect as of any date.
23
8.4 In the event of any condition or circumstance that makes any
environmental warranty, representation and/or agreement incomplete or inaccurate
in any material respect as of any date, Company shall, at the request of Bank
(but only in cases in which Bank reasonably believes there may be a Material
Adverse Effect on Company and the Domestic Subsidiaries (taken as a whole)), at
its sole expense, retain an environmental professional consultant, reasonably
acceptable to Bank, to conduct a thorough and complete investigation regarding
the changed condition and/or circumstance and any environmental concerns arising
from that changed condition and/or circumstance. A copy of the environmental
consultant's report will be promptly delivered to both Bank and Company upon
completion.
8.5 At any time Company or any Domestic Subsidiary, directly or indirectly
through any professional consultant or other representative, determines to
undertake an environmental audit, assessment or investigation, Company shall
promptly provide Bank with written notice of the initiation of the environmental
audit, fully describing the purpose and intended scope of the environmental
audit. Upon receipt, Company will promptly provide to Bank copies of all final
findings and conclusions of any such environmental investigation.
8.6 Company hereby indemnifies, saves and holds Bank and any of its past,
present and future officers, directors, shareholders, employees, representatives
and consultants harmless from any and all loss, damages, suits, penalties,
costs, liabilities and expenses (including but not limited to reasonable
investigation, environmental audit(s), and legal expenses) arising out of any
claim, loss or damage of any property, injuries to or death of persons,
contamination of or adverse affects on the environment, or any violation of any
applicable Environmental Laws, caused by or in any way related to any property
owned or operated by Company or any Subsidiary, or due to any acts of Company or
any Subsidiary or such person's, officers, directors, shareholders, employees,
consultants and/or representatives; provided, however, that the foregoing
indemnification shall not be applicable when arising from events or conditions
occurring while the Bank is in sole possession (subject to the rights of any
creditors of Company) of such property. In no event shall Company be liable
hereunder for any loss, damages, suits, penalties, costs, liabilities or
expenses arising from any act of gross negligence of Bank, or its agents or
employees.
It is expressly understood and agreed that the indemnifications granted
herein are intended to protect Bank, its past, present and future officers,
directors, shareholders, employees, consultants and representatives from any
claims that may arise by reason of the security interest, liens and/or mortgages
granted to Bank, or under any other document or agreement given to secure
repayment of any indebtedness from Company, whether or not such claims arise
before or after Bank has foreclosed upon and/or otherwise become the owner of
any such property. All obligations of indemnity as provided hereunder shall be
secured by the Collateral Documents until payment in full of all indebtedness of
Company to Bank, unless there is a then known violation of the Environmental
Laws and Bank has asserted in writing a claim for indemnification from Company,
in which event the same shall continue until the violation is remediated.
It is expressly agreed and understood that the provisions hereof shall and
are intended to be continuing and shall survive the repayment of any
indebtedness from Company to Bank.
24
8.7 Company and the Domestic Subsidiaries shall maintain all permits,
licenses and approvals required under applicable Environmental Laws.
9. EVENTS OF DEFAULT
9.1 Upon non-payment of any installment of the principal or interest on
the Note when due in accordance with the terms thereof, or upon non-payment of
any other outstanding Indebtedness when due in accordance with the terms
thereof, and continuance in either case of such non-payment for five (5) days or
more, the Note may at Bank's option become immediately due and payable, and
thereafter Bank's commitment to make further Advances and to issue additional
Letters of Credit under this Agreement shall automatically terminate.
9.2 Upon occurrence of any of the following events of default:
(a) default in the observance or performance of any of the conditions,
covenants or agreements of Company set forth in Sections 2.4, 6.2,
6.3, 6.4, 6.5, 6.9, 6.11 through 6.14, 7 or 8 herein;
(b) default in the observance or performance of any of the conditions,
covenants or agreements of Company set forth in Sections 6.1 or 6.10,
and continuance thereof for five (5) Business Days after written
notice to Company by Bank;
(c) default in observance or performance of any of the other conditions,
covenants or agreements of Company herein set forth, and continuance
thereof for thirty (30) days after written notice to Company by Bank;
(d) any material representation or warranty made by Company herein or in
any instrument submitted pursuant hereto proves untrue in any material
respect when made or deemed made;
(e) default in the observance or performance of any of the conditions,
covenants or agreements of Company set forth in any collateral
document of security which may be given to secure the indebtedness
hereunder or in any other collateral document related to or connected
with this Agreement or the indebtedness hereunder and lapse of any
applicable notice or cure period;
(f) default in the payment of any other obligation of Company or any
Subsidiary for borrowed money in an aggregate amount in excess of One
Hundred Thousand Dollars ($100,000), or in the observance or
performance of any conditions, covenants or agreements related or
given with respect thereto, and lapse of any applicable notice, grace
or cure period;
(g) judgment(s) for the payment of money in excess of the sum of One
Hundred Thousand Dollars ($100,000) in the aggregate shall be rendered
against Company or any Subsidiary and any such judgment(s) shall
remain unpaid, unvacated, unbonded or unstayed by appeal or otherwise
for a period of thirty
25
(30) consecutive days from the date of its entry and such judgment is
not covered by insurance from a solvent insurer who is defending such
action without reservation of rights;
(h) the occurrence of any "reportable event", as defined in the Employee
Retirement Income Security Act of 1974 and any amendments thereto,
which is determined to constitute grounds for termination by the
Pension Benefit Guaranty Corporation of any employee pension benefit
plan maintained by or on behalf of Company or any Subsidiary for the
benefit of any of its employees or for the appointment by the
appropriate United States District Court of a trustee to administer
such plan and such reportable event is not corrected and such
determination is not revoked within thirty (30) days after notice
thereof has been given to the plan administrator or Company; or the
institution of proceedings by the Pension Benefit Guaranty Corporation
to terminate any such employee benefit pension plan or to appoint a
trustee to administer such plan; or the appointment of a trustee by
the appropriate United States District Court to administer any such
employee benefit pension plan;
(i) if there shall be any change for any reason whatsoever in the
ownership of Company or any Subsidiary which shall in the reasonable
judgment of Bank adversely affect future prospects for the successful
operation of Company or any Subsidiary;
(j) if PEI shall revoke its Guaranty or disavow any of its obligations
thereunder;
(k) if Company shall, or become obligated to, redeem, repurchase or prepay
any Senior Debt as a result of or in connection with an actual or
proposed change in control of Company, PEI or any Subsidiary ;
then, or at any time thereafter, unless such default is remedied, Bank may give
notice to Company declaring all outstanding indebtedness hereunder and under the
Note to be due and payable, whereupon all indebtedness then outstanding
hereunder and under the Note shall immediately become due and payable without
further notice or demand, and Bank shall not be obligated to make any further
Advances or issue any Letter of Credit hereunder.
9.3 If a creditors' committee shall have been appointed for the business
of Company or any Subsidiary; or if Company or any Subsidiary shall have made a
general assignment for the benefit of creditors or shall have been adjudicated
bankrupt, or shall have filed a voluntary petition in bankruptcy or for
reorganization or to effect a plan or arrangement with creditors; or shall file
an answer to a creditor's petition or other petition filed against it, admitting
the material allegations thereof for an adjudication in bankruptcy or for
reorganization; or shall have applied for or permitted the appointment of a
receiver, or trustee or custodian for any of its property or assets; or such
receiver, trustee or custodian shall have been appointed for any of its property
or assets (otherwise than upon application or consent of Company or a
Subsidiary, as applicable) and such receiver, trustee or custodian so appointed
shall not have been discharged within sixty (60) days after the date of his
26
appointment or if an order shall be entered and shall not be dismissed or stayed
within sixty (60) days from its entry, approving any petition for reorganization
of Company or any Subsidiary; then the Note and all indebtedness then
outstanding hereunder shall automatically become immediately due and payable,
and Bank shall not be obligated to make any further Advances or issue any
Letters of Credit under this Agreement.
9.4 Upon the occurrence of an Event of Default, unless all of the
Indebtedness is then immediately fully paid, Bank shall have and may exercise
any one or more of the rights and remedies for which provision is made for a
secured party under the UCC, under the Collateral Documents, or under any other
document contemplated hereby or for which provision is provided by law or in
equity, including, without limitation, the right to take possession and sell,
lease or otherwise dispose of any or all of the collateral and to set off
against the Indebtedness any amount owing by Bank to Company and/or any property
of Company in possession of Bank. Company agrees, upon request of Bank, to
assemble the collateral and make it available to Bank at any place designated by
Bank which is reasonably convenient to Bank and Company.
9.5 All of the Indebtedness shall constitute one loan secured by Bank's
security interest in the collateral and by all other security interests,
mortgages, liens, claims, and encumbrances now and from time to time hereafter
granted from Company to Bank. Upon the occurrence of an Event of Default, Bank
may in its sole discretion apply the collateral to any portion of the
Indebtedness. The proceeds of any such sale or other disposition of the
Collateral authorized by this Agreement shall be applied by Bank, first upon all
expenses authorized by the Michigan Uniform Commercial Code (or other applicable
law) or otherwise in connection with the sale and all reasonable attorneys' fees
and legal expenses incurred by Bank; the balance of the proceeds of such sale or
other disposition shall be applied in the payment of the Indebtedness, first to
interest, then to principal, then to other Indebtedness and the surplus, if any,
shall be paid over to Company or to such other Person or Persons as may be
entitled thereto under applicable law. Company shall remain liable for any
deficiency, which Company shall pay to Bank immediately upon demand.
9.6 The remedies provided for herein are cumulative to the remedies for
collection of the Indebtedness as provided by law, in equity or by any mortgage,
security agreement or other document contemplated hereby. Nothing herein
contained is intended, nor shall it be construed, to preclude Bank from pursuing
any other remedy for the recovery of any other sum to which Bank may be or
become entitled for the breach of this Agreement by Company.
9.7 Upon the occurrence of any Event of Default, Company shall immediately
upon demand by Bank deposit with Bank cash collateral in the amount equal to the
maximum amount available to be drawn at any time under any Letter of Credit then
outstanding.
10. MISCELLANEOUS
10.1 This Agreement shall be binding upon and shall inure to the benefit of
Company and Bank and their respective successors and assigns, except that the
credit provided
27
for under this Agreement and no part thereof and no obligation
of Bank hereunder shall be assignable or otherwise transferable by Company.
10.2 Company shall pay all closing costs and expenses, including, by way of
description and not limitation, reasonable outside attorney fees, title and lien
search fees and title policy premiums incurred by Bank in connection with the
commitment, consummation and closing of this Agreement. All of said amounts
required to be paid by Company may, at Bank's option, be charged by Bank as an
Advance against the proceeds of the Note. All costs, including reasonable
attorney fees incurred by Bank in reviewing, revising, protecting or enforcing
any of its or any of the Bank's rights against Company or any collateral or in
defending Bank from any claims or liabilities by any party or otherwise incurred
by Bank in connection with an event of default or the enforcement of this
Agreement or the related documents, including by way of description and not
limitation, such charges in any court or bankruptcy proceedings or arising out
of any claim or action by any person against Bank which would not have been
asserted were it not for Bank's relationship with Company hereunder, shall also
be paid by Company.
10.3 Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, it shall be done in accordance with GAAP.
10.4 No delay or failure of Bank in exercising any right, power or
privilege hereunder shall affect such right, power or privilege, nor shall any
single or partial exercise thereof preclude any further exercise thereof, or the
exercise of any other power, right or privilege. The rights of Bank under this
Agreement are cumulative and not exclusive of any right or remedies which Bank
would otherwise have.
10.5 All notices with respect to this Agreement shall be deemed to be
completed upon mailing by certified mail to the following or to such other
address as may be designated by Company or Bank in a notice that complies as to
delivery with the terms of this Section 10.5:
To Company:
0000 Xxxxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
To Bank:
One Detroit Center
000 Xxxxxxxx Xxxxxx
Mail Code 3258
Xxxxxxx, Xxxxxxxx 00000
Attention: Business Finance Division I
28
Bank shall use best efforts to send copies of all notices to Company's
legal counsel at the address set forth below, but failure to do so shall not be
a violation of this Agreement and shall not affect the validity of any notice
properly sent to Company:
Hooper, Hathaway, Price, Beuche & Xxxxxxx
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, Xx.
10.6 This Agreement and the Note have been delivered at Detroit, Michigan,
and shall be governed by and construed and enforced in accordance with the laws
of the State of Michigan. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
10.7 No amendments or waiver of any provisions of this Agreement nor
consent to any departure by Company therefrom shall in any event be effective
unless the same shall be in writing and signed by the Bank, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No amendment, waiver or consent
with respect to any provision of this Agreement shall affect any other provision
of this Agreement.
10.8 All sums payable by Company to Bank under this Agreement or the other
documents contemplated hereby shall be paid directly to Bank at its principal
office set forth Section 10.5 hereof in immediately available United States
funds, without set off, deduction or counterclaim. In its sole discretion, Bank
may charge any and all deposit or other accounts (including without limit an
account evidenced by a certificate of deposit) of Company with Bank for all or a
part of any Indebtedness then due; provided, however, that this authorization
-------- -------
shall not affect Company's obligation to pay, when due, any Indebtedness whether
or not account balances are sufficient to pay amounts due.
10.9 Any payment of the Indebtedness made by mail will be deemed tendered
and received only upon actual receipt by Bank at the address designated for such
payment, whether or not Bank has authorized payment by mail or any other manner,
and shall not be deemed to have been made in a timely manner unless received on
the date due for such payment, time being of the essence. Company expressly
assumes all risks of loss or liability resulting from non-delivery or delay of
delivery of any item of payment transmitted by mail or in any other manner.
Acceptance by Bank of any payment in an amount less than the amount then due
shall be deemed an acceptance on account only, and the failure to pay the entire
amount then due shall be and continue to be an Event of Default, and at any time
thereafter and until the entire amount then due has been paid, Bank shall be
entitled to exercise any and all rights conferred upon it herein upon the
occurrence of an Event of Default. Company waives the right to direct the
application of any and all payments at any time or times hereafter received by
Bank from or on behalf of Company. Company agrees
29
that Bank shall have the continuing exclusive right to apply and to reapply any
and all payments received at any time or times hereafter against the
Indebtedness in such manner as Bank may deem advisable, notwithstanding any
entry by Bank upon any of its books and records. Company expressly agrees that
to the extent that Bank receives any payment or benefit and such payment or
benefit, or any part thereof, is subsequently invalidated, declared to be
fraudulent or preferential, set aside or is required to be repaid to a trustee,
receiver, or any other party under any bankruptcy act, state or federal law,
common law or equitable cause, then to the extent of such payment or benefit,
the Indebtedness or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if such payment or benefit had not been
made and, further, any such repayment by Bank, to the extent that Bank did not
directly receive a corresponding cash payment, shall be added to and be
additional Indebtedness payable upon demand by Bank.
10.10 In the event Company's obligation to pay interest on the
principal balance of the Notes is or becomes in excess of the maximum interest
rate which Company is permitted by law to contract or agree to pay, giving due
consideration to the execution date of this Agreement, then, in that event, the
rate of interest applicable shall be deemed to be immediately reduced to such
maximum rate and all previous payments in excess of such maximum rate shall be
deemed to have been payments in reduction of principal and not of interest.
10.11 This Agreement shall become effective upon the execution hereof
by Bank and Company.
10.12 COMPANY AND BANK HEREBY IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY
JURY WITH RESPECT TO ANY AND ALL ACTIONS OR PROCEEDINGS AT ANY TIME IN WHICH
COMPANY AND BANK ARE PARTIES ARISING OUT OF THIS AGREEMENT OR THE OTHER
DOCUMENTS CONTEMPLATED HEREBY.
WITNESS the due execution hereof as of the day and year first above written.
COMERICA BANK PRESTOLITE ELECTRIC INCORPORATED
By:/s/ Xxxxxxx X. Xxxxxxxx By:/s/ Xxxxxx X. Xxxxxxxxxx
_______________________ _______________________
Its: VP Its: Controller - Treasurer
______________________ _______________________
30
LIST OF SCHEDULES
Schedule 5.5 - Pension Plans
Schedule 5.9 - Subsidiaries
Schedule 7.4 - Permitted Debt
Schedule 7.7 - Permitted Liens
LIST OF EXHIBITS
Exhibit A - Facility A Note
Exhibit B - Request for Advance
Exhibit C - Notice of Election of Margin Reduction Option
Exhibit D - Borrower's Telephone and Facsimile Authorization
Exhibit E - Notice of Revocation of Margin Reduction Option
EXHIBIT "A"
FACILITY A NOTE
Detroit, Michigan
$23,000,000 January 22, 1998
On or before the Facility A Maturity Date, FOR VALUE RECEIVED, PRESTOLITE
ELECTRIC INCORPORATED, a Delaware corporation (herein called "Company"),
promises to pay to the order of COMERICA BANK, a Michigan banking corporation
(herein called "Bank"), at its Main Office at 000 Xxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx, in lawful money of the United States of America the indebtedness or so
much of the sum of Twenty-Three Million Dollars ($23,000,000) as may from time
to time have been advanced and then be outstanding hereunder pursuant to the
Amended and Restated Credit Agreement dated as of January 22, 1998, by and
between Company and Bank (herein called "Agreement"), together with interest
thereon as hereinafter set forth.
Each of the Advances hereunder shall bear interest at the Prime-based Rate
from time to time applicable thereto under the Agreement or as otherwise
determined thereunder, and interest shall be computed, assessed and payable as
set forth in the Agreement.
This Note is a note under which advances, repayments and readvances may be
made from time to time, subject to the terms and conditions of the Agreement.
This Note evidences borrowing under, is subject to, is secured in accordance
with, and may be matured under, the terms of the Agreement, to which reference
is hereby made. As additional security for this Note, Company grants Bank a lien
on all property and assets including deposits and other credits of the Company,
at any time in possession or control of or owing by Bank for any purpose.
Company hereby waives presentment for payment, demand, protest and notice
of dishonor and nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence, release, or
forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note. Any transferees of,
or endorser, guarantor or surety paying this Note in full shall succeed to all
rights of Bank, and Bank shall be under no further responsibility for the
exercise thereof or the loan evidenced hereby. Nothing herein shall limit any
right granted Bank by other instrument or by law.
All capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Agreement.
PRESTOLITE ELECTRIC
INCORPORATED
By:___________________________________
Its:__________________________________
2
EXHIBIT "B"
REQUEST FOR ADVANCE
-------------------
Pursuant to the Amended and Restated Credit Agreement dated as of January
22, 1998 (herein called "Agreement"), the undersigned hereby requests COMERICA
BANK to make an Advance to the undersigned on _____________________, 199___, in
the amount of____________________________________ DOLLARS, ($____________) under
the Facility A Note dated January 22, 1998, issued by the undersigned to said
Bank (herein called "Note").
The undersigned certifies that no Default or Event of Default has occurred
and is continuing, and none will exist upon the making of the Advance requested
hereunder. The undersigned further certifies that upon advancing the sum
requested hereunder, the aggregate principal amount outstanding under the Note
will not exceed the face amount thereof or any advance formula applicable to
Advances under such Note. If the amount advanced to the undersigned under the
Note shall at any time exceed the face amount thereof or any Advance formula
applicable to Advances under such Note, the undersigned will pay such excess
amount on demand.
The undersigned hereby authorizes said Bank to disburse the proceeds of
this Request for Advance by crediting the account of the undersigned with Bank
separately designated by the undersigned or as the undersigned may otherwise
direct.
Dated this _______ day of __________________________, 199___.
PRESTOLITE ELECTRIC
INCORPORATED
By:________________________________
Its:_______________________________
EXHIBIT "C"
NOTICE OF ELECTION OF MARGIN REDUCTION OPTION
---------------------------------------------
To: Comerica Bank
Pursuant to Section 3.3(a) of the Amended and Restated Credit Agreement
dated as of January 22, 1998 between the undersigned and the Bank, the
undersigned hereby elects the Margin Reduction Option as provided therein. The
undersigned hereby certifies that no Default or Event of Default has occurred
and is continuing as of the date hereof.
Dated this _____ day of _______________, ______.
PRESTOLITE ELECTRIC
INCORPORATED
By:________________________________
Its:_______________________________
EXHIBIT "D"
BORROWER'S TELEPHONE AND FACSIMILE AUTHORIZATION
------------------------------------------------
See form attached.
EXHIBIT "E"
NOTICE OF REVOCATION OF MARGIN REDUCTION OPTION
-----------------------------------------------
To: Comerica Bank
Pursuant to Section 3.3(b) of the Amended and Restated Credit Agreement
dated as of January 22, 1998 between the undersigned and the Bank, the
undersigned hereby revokes the Notice of Election of Margin Reduction Option
dated ____________________, _______, delivered by the undersigned to the Bank.
Dated this _____ day of _______________, ______.
PRESTOLITE ELECTRIC
INCORPORATED
By:________________________________
Its:_______________________________
