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EXHIBIT 10.3
COMERICA BANK
September 29, 2000
Prestolite Electric Incorporated
0000 Xxxxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
This letter, when signed by Prestolite Electric Incorporated
("Company"), will constitute our agreement concerning the issuance by Comerica
Bank ("Bank") of standby letters of credit for the account of Company.
The Bank may issue, from time to time until January 31, 2002, standby
letters of credit for the account of Company in an aggregate face amount not to
exceed $2,000,000; provided. however, that the sum of the aggregate amount of
advances outstanding under the $5,000,000 Master Revolving Note dated as of the
date hereof from Company as maker to Bank as payee ("Note") plus the aggregate
face amount of all outstanding letters of credit issued pursuant to this letter
plus the aggregate face amount of all outstanding letters of credit issued for
the account of Company pursuant to the $5,000,000 letter agreement dated as of
date hereof between Company and Bank shall not exceed the lesser of $7,000,000
or the advance formula as determined in the Advance Formula Agreement dated as
of the date hereof between Company and Bank; provided further, that no letter of
credit shall, by its terms, have an expiration date which extends beyond the
earlier to occur of one year after issuance or January 31, 2002 and provided
further, that in the event any letter of credit has an expiration date later
than January 31, 2002, Company shall deliver to Bank on demand cash collateral
in an amount equal to the maximum undrawn amount of such letter of credit. The
issuance of any letters of credit shall be subject to the terms and conditions
of any letter of credit applications and agreements executed and delivered by
the Company to the Bank with respect thereto. The Company shall pay to the Bank
annually in advance a fee of two percent (2%) per annum of the face amount of
each such letter of credit. No letter of credit shall he issued during the
continuance of a Default under the Note.
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Prestolite Electric Incorporated
September 29, 2000
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If the foregoing clearly sets forth our understanding regarding these
matters, please sign this letter were indicated and return it to me.
Very truly yours,
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
First Vice President
Acknowledged and agreed to as of the date set
forth above:
PRESTOLITE ELECTRIC INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Its:
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By: /s/ Xxxxxx X. Xxxxxxxxxx
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Its:
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REAFFIRMATION OF GUARANTY
The undersigned reaffirms and ratifies all of its obligations to the
Bank under or in respect of the Guaranty dated October 25, 1994, executed and
delivered by the undersigned to the Bank.
PRESTOLITE ELECTRIC HOLDING, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Its:
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