1
EXHIBIT 10.5
COMMERCIAL VARIABLE RATE LOAN
AGREEMENT
We, NATIONAL WESTMINSTER BANK PLC and any person to whom we transfer our rights
or duties under this agreement agree to offer you a loan under the terms and
conditions set out below and on the attached appendix. The first part of the
appendix explains some of the words and phrases used in this agreement.
1 DATE OF OFFER: 27TH DECEMBER 2000
2(A) YOUR NAME: PRESTOLITE ELECTRIC LIMITED (REGISTERED NO. 1189048)
XXXXXXXXX XXXX, XXXXXXX, XXXXXXX, XXXXXXXXXX, XX0 0XX
2(B) YOUR PARENT: PRESTOLITE ELECTRIC INCORPORATED
3 LENDING BRANCH: CHELTENHAM
4 AMOUNT: (POUND STERLING)1,400,000 (ONE MILLION FOUR HUNDRED THOUSAND
POUNDS)
5 PURPOSE OF THE LOAN: TO REPAY ELEMENT OF PARENTAL LOAN/INTEREST LIABILITIES
6 PERIOD OF THE LOAN: 5 YEARS
7 INTEREST RATE: You will pay interest at a rate equal to the sum of
1.375% per year plus the Bank's base rate from time to time.
8 FEE: (pound sterling) 24,000 to include availability of the Overdraft
facility per the concurrent Advice of Borrowing Terms.
9 DRAWING THE LOAN: You may draw the Loan in full in one amount or in
stages. If stage drawings are required, these are permitted subject to
minimum single drawings of (pound sterling)20,000. Full drawdown must be
achieved within 12 months of the Agreement Date. If the Loan is not
drawn in full within this period, the undrawn part of the Loan will be
deemed to be cancelled and no longer available for drawing.
10 REPAYMENT: You must have repaid the Loan in full on the last day of the
period shown in term 6 of this agreement (such period commencing on the
earlier of the date on which the Loan is drawn in full and the date on
which any undrawn part of the Loan is cancelled under term 9 of this
agreement).
Subject always to our rights under paragraph 12 of the appendix,
You will repay the Loan by 60 instalments of principal and interest
payable every one-month. We will tell you the amounts you need to
pay to repay the Loan in full by the last day of the period shown in
term 6 of this agreement together with interest which will be
calculated in the manner referred to in paragraph 4 of the appendix.
Such instalments will commence one month after the earlier of the
date on which you draw the Loan in full and the date on which any
undrawn part of the Loan is cancelled under term 9 of this
agreement.
From time to time we will tell you the instalments you must pay.
From the date on which a drawing is first made under the Loan until
such date as you commence your instalments of principal and interest
hereunder, interest at the rate specified in this agreement may be
debited to your loan account on our usual charging days in March,
June, September and December.
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11 SECURITY:
First legal mortgage over premises at Xxxxxx Xxxx, Xxxxx, Xxxxxx, X0 0XX
Unlimited Composite cross guarantee structure & Mortgage debentures between;
Prestolite Electric Limited
Prestolite Wales Limited
H B Switchgear (Contractors) Limited
Butec Electrics Limited
12 FINANCIAL AGREEMENTS:
You agree to the following:-
PLEASE SEE paragraph 2 of the appendix for an explanation of the words and
phrases used below.
a. You will not allow Total Borrowing to be more than 100% of Tangible Net
Worth.
b. You will not allow Cash Generated to be less than 100% of Debt Service
Costs.
c. You will not allow Profit to be less than 250% of Borrowing Costs.
d. Management Information to be provided monthly within 30 days of the
month end to which the information relates. To include Profit & Loss and
Balance Sheet statements aged debtor analysis, cash flow statement and
specific commentary on working capital movements.
e. No preference shares or redeemable ordinary shares to be
withdrawn/repaid during the term of this loan.
f. Acquisitions of more than (pound sterling)500,000 not to be made without
the Bank's prior agreement.
g. You will not, without the prior approval of the Bank, make any
repayments of loan principal to Prestolite Electric Incorporated.
h. You will not and you (and your Parent (if specified in term 2(b)) will
procure that none of your (or if your Parent is specified in term 2(b)
its) subsidiary undertakings as defined by S. 258 of the Companies Xxx
0000 ("Subsidiary Undertakings") will, without our prior written consent
either create, extend or increase any security interest on the whole or
any part of your or the Group's undertaking, property or assets
(including uncalled capital) whether present or future in aggregate
above (pound sterling)250,000. Security interest includes (without
limitation) liens, pledges, charges, mortgages or other encumbrances.
i. You will provide us with such financial and other information relating
to you or to the Group as we may reasonably require including (without
limitation) copies of the consolidated audited accounts of the Group not
later than 6 months after the end of the accounting period to which they
relate.
In order to verify whether you are complying with these covenants, we will
refer to your management accounts on a quarterly basis and audited accounts
on an annual basis, for the consolidated accounts of Prestolite Electric
Limited. In respect of the Cash Generated covenant (point b above), this
will be tested quarterly on a rolling 12 month basis as follows;
12 months ended 31/12/2000 and each rolling 12-month period thereafter.
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13 OVERDUE PAYMENTS:
If you do not make any payment under this agreement on the date it is due,
then, without prejudice to our other rights, we will charge interest on the
overdue amount from the date it was due to the date upon which we receive
payment (as well after as before judgement). This will be calculated (and
compounded in accordance with our normal practice) on the basis of a year of
365 days and the actual number of days elapsed.
You will pay interest to us at a rate which is equal to the sum of:-
5% per year; and
our base rate from time to time
Any late payments may be debited to a separate account.
14 EARLY REPAYMENT:
Paragraph 7 of the appendix gives details of how you may ask to repay the
Loan before the specified repayment dates. In connection with paragraph 7 of
the appendix, the prepayment fee is 0.5% of the amount which you prepay.
15 ENVIRONMENTAL LIABILITIES
Paragraph 18 of the Appendix will apply.
16 Prestolite Electric Incorporated, a corporation incorporated under the
laws of the State of Delaware in the United States of America
("Prestolite US"), joins in the execution of this Loan Agreement for
the purpose of confirming its acknowledgement of and agreement with the
terms and conditions of this Loan Agreement.
Prestolite US is Primary Obligor. National Westminster Bank Plc,
Prestolite UK and Prestolite US acknowledge and agree as follows with
respect to the Loan established by this Loan Agreement;
(a) Prestolite US is the primary obligor with respect to the Loan,
notwithstanding any other provision of this Loan Agreement, which may
imply otherwise.
(b) As a matter of administrative convenience, Prestolite US has
determined that its wholly owned subsidiary, Prestolite UK, will
service the Loan as an accommodation to Prestolite US.
(c) For purposes of Prestolite US's Senior Note Indenture, the Loan is
intended to and shall be deemed to be "Indebtedness" permitted by
Section 4.3.b (ix) of such Senior Note Indenture.
The above will not prejudice the rights and actions of National Westminster Bank
Plc to exercise the terms & conditions of the Loan Agreement with Prestolite
Electric Limited.
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1 AGREEMENT
This appendix forms part of the agreement between us.
If we refer to a paragraph, this will mean a paragraph of this
appendix. If we refer to a term this will mean a term of the agreement.
2 MEANINGS AND WORDS AND PHRASED USED IN THIS AGREEMENT
THE 'AGREEMENT DATE' means the date on which our offer is accepted
in the way set out in paragraph 3 of the appendix.
'BUSINESS DAY' shall mean a day on which banks in general are open
in the City of London for the transaction of business of the
nature set out in this agreement.
'EVENT OF DEFAULT' shall mean any event specified in paragraph 12
of the appendix.
'THE GROUP' means you and your (or where your Parent is specified
in term 2(b) your Parent and its) subsidiary undertakings (as
defined by Section 258 of the Companies Act 1985) taken as a whole
(and, save where the context does not admit, any of them
individually); if there are no subsidiary undertakings for the
time being, references to the Group shall be taken to be
references to you and the word "consolidated" in relation to any
accounts or other financial matters shall be ignored.
THE 'LOAN' means the loan facility which we have agreed to provide
under the terms and subject to the conditions of this agreement
and, where necessary, it will mean all amounts owed under this
agreement.
'YOUR PARENT' is the company shown in term 2(b) of the agreement
'THE OFFER DATE' is the date shown in term 1 of the agreement.
This is the date on which we make the written offer of the Loan.
'SECURITY' means the security shown in term 11 of the agreement
and any other security which you provide under paragraph 5 of the
appendix.
'SUBSIDIARY UNDERTAKING' shall mean a subsidiary undertaking (as
defined by S.258 of the Companies Act 1985).
The following definitions apply to the financial agreements in
term 13 of the agreement.
'BORROWING COSTS' means, in respect of any financial period, all
continuing, regular or periodic costs, charges and expenses
(including but not limited to, interest and any capitalised
interest) incurred by the Group in effecting, servicing or
maintaining Total Borrowing.
'CAPITAL EXPENDITURE' means, in respect of any financial period,
the aggregate expenditure of the Group on the purchase of fixed
assets (as determined in accordance with generally accepted United
Kingdom accounting principles (consistently applied)).
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'CASH GENERATED' means, in respect of any financial period, the sum of:-
(i) Profit; plus
(ii) an amount equal to the depreciation charged on fixed assets of the
Group during such period and any other non-cash movements; plus
(iii) an amount equal to any decrease in net working capital (being, in
respect of any period, the net surplus (or deficit) of the aggregate stock
in trade of the Group and the amount owed to members of the Group by
debtors less the amount owed by them to creditors at the end of such
period); plus (iv) the proceeds of new ordinary or other non-redeemable
shares issued by you during such period
LESS the sum of:-
(i) an amount equal to the tax paid by the Group during such period; plus
(ii) an amount equal to any increase in net working capital (as defined
above) during such period; plus
(iii) an amount equal to the Capital Expenditure (including investments) by
the Group during such period less an amount equal to the net proceeds of
disposal of fixed assets during such period; plus
(iv) an amount equal to the aggregate amount of dividends on ordinary
shares paid by you during such period; plus
(v) any receipts of the Group by way of extraordinary items during such
period;
'CURRENT ASSETS' means all assets of the Group which would be classified, in
accordance with generally accepted United Kingdom accounting principles
(consistently applied) as current assets.
'CURRENT LIABILITIES' means all liabilities of the Group which would be
classified, in accordance with generally accepted United Kingdom accounting
principles (consistently applied) as current liabilities.
'DEBT SERVICE COSTS' means in respect of any financial period :-
(i) all interest, commission, periodic fees and other financial charges
payable by any member of the Group during such period (including the
interest element payable under finance leases) ; plus
(ii) the aggregate amount of all dividend payments on redeemable preference
shares (and other shares) made by you during such period; plus
(iii) the aggregate amount of all debt repayments made by any member of the
Group or due from any member of the Group (including redemption of any
redeemable preference shares) during such period;
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'NET CASH FLOW BEFORE FINANCING' means, in respect of any
financial period, the sum of :-
(i) Profit; plus
(ii) an amount equal to the depreciation charged on fixed
assets of the Group during such period and any other non- cash
movements during such period; plus
(iii) an amount equal to any decrease in net working capital
(being, in respect of any period, the net surplus (or deficit)
of the aggregate stock in trade of the Group and the amount
owed to members of the Group by debtors less the amount owed
by them to creditors at the end of such period);
LESS the sum of :-
(i) an amount equal to the tax paid by the Group during such
period; plus
(ii) an amount equal to any increase in net working capital
(as defined above) during such period; plus
(iii) an amount equal to the Capital Expenditure (including
investments) by the Group during such period less an amount
equal to the net proceeds of disposal of fixed assets during
such period; plus
(iv) an amount equal to the interest paid (less interest
received) by the Group for such period;
(v) an amount equal to the aggregate amount of dividends on
ordinary shares paid by you during such period; plus
(vi) any receipts of the Group by way of extraordinary items
during such period.
'NET WORKING ASSETS' means, in respect of any period, the
aggregate stock in trade of the Group and the amounts owed to
members of the Group by trade debtors less the amounts owed by
them to trade creditors at the end of such period.
'PROFIT' means, in respect of any financial period, the amount of
profit of the Group (excluding profit attributable to minority
interests) before taxation, interest payable, and any unusual,
extraordinary or exceptional items.
'TANGIBLE NET WORTH' means the amount for the time being paid up
or credited as paid up on your issued share capital plus all
reserves of the Group which would, in accordance with generally
accepted United Kingdom accounting principles consistently applied
be classified as shareholders capital plus retained earnings but
deducting assets of the Group which would, in accordance with such
principles, be classified as intangible assets.
'TOTAL BORROWING' means the total outstanding principal amount of
all borrowings or monies otherwise raised by the Group from all
sources whatever, whether by way of debenture, mortgage, unsecured
loan, overdraft or in any other manner (including redeemable
preference shares and inter company and parental loans) plus the
aggregate face amount of all discounted acceptance credits.
3 AVAILABILITY OF LOAN
From the Agreement Date you will have 12 months in which you can draw
the Loan. However, you can only accept this offer and draw the Loan if
we have received the following items from you and are satisfied with
them:-
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a) A copy of this agreement with the acceptance form signed
on your behalf (and if your Parent is specified in term 2(b)
on behalf of your Parent).
b) A certified copy of a resolution of your board of
directors (and if your Parent is specified in term 2(b)
a certified copy of a resolution of its board of directors)
showing that you (and if applicable your Parent)
- accept the terms and conditions of the Loan;
- agree to give the security set out in term 11 of the
agreement; and
- authorise a person or persons to take such other
action on your behalf (and if applicable your
Parent's behalf) as may be necessary for the purpose
of the agreement.
You must give us three days' notice of your intention to draw the Loan
or any part of it. These days must be Business Days. We will credit
your current account with the amount of your drawing.
ACCEPTANCE OF THE OFFER CONTAINED IN THIS AGREEMENT MAY BE EFFECTED BY
RECEIPT BY US AT THE LENDING BRANCH (PLEASE SEE TERM 3 OF THE
AGREEMENT) WITHIN THIRTY DAYS OF THE DATE SPECIFIED IN TERM 1 OF THE
AGREEMENT OF THE ITEMS SPECIFIED IN THIS PARAGRAPH.
4 INTEREST
We will work out interest on the balance of the Loan outstanding from
day to day on the basis of the actual number of days elapsed and a 365
day year.
You must pay interest to us on our usual charging days in March, June,
September and December or by combined interest and principal
instalments (where specified under term 10) on such dates as are
specified under term 10 of the agreement.
You will pay interest at the rate shown in term 7 of the Agreement.
We may charge interest to your current account or to your loan account.
If you do not make any payments on the due date under this agreement,
then the rate of interest specified in term 14 shall apply to any
overdue amounts.
5 SECURITY
You must give us the security shown in term 11 of the agreement and
this will be a continuing security for the discharge on demand of all
your indebtedness and your other liabilities to us from time to time.
You undertake to provide any extra security which we need to maintain
the value of the Security at the level specified in term 12 of the
agreement within such period as we may require. The open market value
of the Security shall be determined at our option from time to time by
an independent professional valuation. You will have to pay for this
valuation.
6 FEES AND COSTS
We have the right to debit your current account with the fees set out
in term 8 and 15 of the agreement.
7 EARLY REPAYMENT
We may (but are not obliged to) agree to let you repay the Loan early
if you ask us in writing. You must give us five days notice in writing
to do this. This notice shall be irrevocable and these days must be
Business Days. If we allow you to repay the Loan early, the prepayment
will be on such terms as we may
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require including (without limitation) you indemnifying us against any
funding or other costs, losses, expenses or liabilities (including loss
of profit) sustained or incurred by us as a result of such prepayment.
If we allow you to repay the Loan early you will also have to pay us
the prepayment fee set out in term 15 of the agreement.
You cannot reborrow any amount you have prepaid.
8 LIABILITY
If you are more than one person then the expression "you" shall mean
all of such persons and (save where the context does not so admit) any
of them and the obligation of those persons shall be joint and several.
Each such person irrevocably appoints each other person as his agent
for the service of any demand or notice under this agreement.
9 CURRENT ACCOUNTS
You agree to maintain a current account with us throughout the period
of the Loan.
10 PAYMENTS
We may transfer amounts from your current account to meet the
repayments set out in term 10 of the agreement.
We may use any repayment instalment (including instalments of principal
and interest) or any part of any repayment instalment to:
- reduce the amount of principal outstanding on the
Loan.
- pay interest accrued on the Loan.
- discharge any other payment due under this agreement.
You must make all payments under this agreement in full in pounds
sterling without any deduction or withholding (whether in respect of
set-off, counterclaim, duties, taxes, charges or otherwise howsoever).
If you are compelled by law to make any deduction or withholding, you
will promptly pay to us such additional amounts as will make the net
amount received by us equal to the full amount payable by you had there
been no deduction or withholding.
11 SET-OFF
We shall be entitled to set-off against any of your liabilities to us
under this agreement (whether present, future, actual or contingent)
any of your credit balances on any of your accounts with us or in your
name. We do not have to give you any prior notice to do this.
12 DEFAULT
If any of the following events occur, WE MAY, by giving you written
notice, cancel our outstanding commitments to you (including the
availability of the Loan if you have not drawn it in full) and demand
immediate repayment of your indebtedness to us and exercise our rights
under any Security:-
(a) If you breach any term or condition (including any covenant) of
this agreement.
(b) If you do not make any payment on the date it is due under this
agreement and whether by way of principal, interest or otherwise.
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(c) If you do not use the Loan for the purpose set out in term 5 of
the agreement.
(d) If the Security or any part of the Security shall cease to be fully
enforceable in accordance with its terms or with effect from the
date on which the determination of the continuing nature of the
Security or any part thereof occurs, such continuing nature is
determined whether such determination be by actual or constructive
notice or be deemed to have occurred or any binding undertaking
provided in the Security or any part of the Security shall be
breached or any guarantor gives or purports to give notice to
terminate its liabilities under any guarantee in respect of the
Loan.
(e) If you sell or dispose of any asset listed in term 11 of the
agreement or it ceases to be in your sole possession.
(f) If your current account becomes overdrawn after the debiting of any
payment due from you under the Loan or it becomes overdrawn in
excess of any limit agreed with us and you do not offer payment in
cash to us when we inform you of this.
(g) If any representation, warranty or statement made to us by you in
connection with the Loan is breached or is false or if you fail to
tell us anything which in our opinion is material to the Loan.
(h) If you or any member of the Group make any default in the
performance of any other agreement for borrowed money whether with
us or any other lender whereby the due date of repayment thereunder
is rendered capable of acceleration; or if any of your indebtedness
or the indebtedness of any member of the Group becomes or is
declared by the holder or the lender thereof to be due and payable
prior to its stated maturity or such indebtedness is not repaid in
full at its stated maturity; or if such indebtedness (including the
indebtedness of any member of the Group) is repayable on demand and
is not repaid in full immediately upon demand being made or if any
guarantee or indemnity given by any giver of security in connection
with any of your liabilities to us or any other lender is not
honoured when due and called upon.
(i) If a petition is presented or a resolution passed for your winding
up or that of any member of the Group or a petition is presented
for an administration order to be made in relation to you or any
member of the Group; or your directors or the directors of any
member of the Group make a proposal for a voluntary arrangement
with your creditors or the creditors of any member of the Group;
or you are unable to pay your debts within the meaning of
Section 123 of the Insolvency Xxx 0000 or any member of the
Group is unable to pay its debts within the meaning of such
section or an encumbrancer takes possession of or a receiver or
an administrative receiver is appointed over any of your assets
or over the assets of any member of the Group;
(j) If there shall occur in our opinion a material effective change of
control (as defined by Section 840 of the Income and Corporation
Taxes Act 1988) of you or your Parent;
(k) If there has occurred any change which in our reasonable opinion is
a material adverse change in your business, assets or financial
condition or in the business, assets or financial condition of the
Group or any member of the Group which, in our reasonable opinion,
may affect your ability to comply with your obligations under this
agreement.
(l) If any judgement, distress, warrant of attachment, writ of
execution or similar process is issued, levied or enforced upon
any of your assets or the assets of any member of the Group or
if any asset held by the Bank as security for the Loan is
charged or becomes encumbered elsewhere.
(m) If you or any member of the Group ceases or threatens to cease to
carry on its business or sells, transfers or otherwise disposes of
in any one transaction or series of related transactions any
substantial part of its assets.
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(n) If you cease to be a Subsidiary Undertaking of your Prestolite
Electric Holding Incorporated.
13 DELAY IN EXERCISING OUR RIGHTS
If we delay in giving any notice or exercising any of our rights under
this agreement this should not be construed as a waiver of any of our
rights.
14 DEMANDS AND NOTICES
Any demand or notice to you will be made in writing and be signed by
one of our officers and served either by personal delivery on you at
any place or by post addressed to you at your place of business last
known to us.
Service by post on you shall be deemed to be effective on the next
Business Day after the date of posting even if it is returned
undelivered.
Any notice to us under this agreement must be made in writing and
signed by you or where you are a company, by a duly authorised officer
on your behalf. It must be delivered by hand or by post to the Lending
Branch specified in term 3 of the agreement.
15 COSTS AND EXPENSES
You will pay all costs, charges and expenses arising in connection with
the Loan and the Security including the negotiation and preparation of
this agreement and the Security and all costs, charges and expenses
arising in connection with the preservation and/or enforcement of our
rights under this agreement or under the Security and will indemnify us
for any and all losses, costs and expenses occasioned by the occurrence
of an Event of Default.
16 GENERAL POINTS
(a) If at any time any one or more of the provisions in this agreement
is or becomes invalid, illegal or unenforceable in any respect, the
validity, legality or enforceability of the remaining provisions
hereof shall not in any way be affected or impaired thereby.
(b) Unless we expressly agree to do so in writing we do not hold
ourselves out as providing advice on or considering the general
suitability of this Loan for your particular circumstances (including
tax circumstances ) and neither we nor our employees shall be liable
for any indications given as to such suitability. We make no
warranties or representations about the advisability of any underlying
transaction entered into by you. You should obtain independent
professional advice on such matters and upon any Security required by
us.
(c) If we determine in our opinion that as a result of any Requirement
or compliance by us with any Requirement the cost to us of funding,
maintaining or making available the Loan (or any undrawn amount of the
Loan) is increased or the effective return to us on the Loan or on our
capital is reduced, then you shall pay to us on demand such sums as
may be certified to you by us as shall compensate us for the increased
cost or reduction. `Requirement' means any law, regulation, directive
or official request (whether or not having the force of law) and
includes any change in its interpretation or application. It also
includes any Requirement relating to a change in currency of a
country.
(d) If more than one currency or currency unit are at the same time
recognised by the Bank of England as the lawful currency of the United
Kingdom then: any reference in this agreement to, and any obligations
arising under this agreement in, the currency of the United Kingdom
shall be translated into, or paid in, the currency or currency unit of
the United Kingdom designated by us; and
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any translation from one currency or currency unit to another shall be
at the official rate of exchange recognised by the Bank of England for
the conversion of that currency or currency unit into the other,
rounded up or down by us acting reasonably.
(e) If a change in any currency of the United Kingdom occurs, this
agreement will be amended to the extent we specify to be necessary to
reflect the change in currency and to put us in the same position, so
far as possible, that we would have been in if no change in currency
had occurred.
(f) We may assign or transfer all or any of our rights and obligations
under the Loan. You may not assign or transfer any of your rights or
obligations under the Loan.
(g) This agreement is governed by the laws of England.
(h) All expressions in this letter bearing a plural meaning shall
(where the context so admits) also bear the singular meaning and vice
versa.
(i) All references in this letter to any statutory provision shall be
deemed to include any statutory modification or re-enactment of such
provision.
(j) If the effect of the introduction of or any change in applicable
law or directive or the interpretation of such law or directive is to
make or purport to make the Loan unlawful then our obligations under
this agreement shall cease and you will on demand pay to us all
amounts outstanding under the Loan.
17 REPRESENTATIONS AND WARRANTIES
You represent and warrant that you have full power to accept and be
bound by the terms and conditions set out in this agreement and to draw
the Loan and that you have taken all necessary steps and obtained all
necessary consents and authorisations to do so and that accordingly
this agreement constitutes your legal, valid and binding obligations
fully enforceable in accordance with their terms.
You represent and warrant as follows:-
(a) You are duly incorporated and validly existing under the laws of
England.
(b) No Event of Default has occurred or is outstanding and no event has
occurred which with the giving of notice or the lapse of time would
constitute an Event of Default.
(c) All information, exhibits and reports furnished to us in connection
with this agreement were and remain true and accurate in all respects
and do not omit any facts thereby rendering misleading any statement
contained therein.
(d) The representations and warranties set out above shall survive your
acceptance of this agreement and the drawing of the Loan and shall be
deemed to be repeated on each day throughout the period of the Loan
with reference to the facts and circumstances existing at that time.
18 Environmental Matters
(a) We may at any time during the period of the Loan require you to
obtain a written up-date of the environmental audit referred to in
paragraph 3 of the appendix (or if no audit was required under
paragraph 3, a written confirmation that neither your assets nor the
use of those assets has broken or is likely to break any Environmental
Law). This must be done by an environmental consultant acceptable to us
and at your expense.
b) You must notify us immediately if you receive any claim, notice or
other communication in respect of any alleged breach of Environmental
Law.
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(c) You undertake to notify us immediately if any Environmental
Licence is withdrawn or is not renewed.
(d) You must give us certified copies of any new Environmental Licence
and any renewal of any Environmental Licences within twenty-eight days
of issue and you must meet all associated costs and expenses.
(e) You represent and warrant to us that you have obtained all
necessary Environmental Licences and you have at all times complied in
all material respects with the terms and conditions of the
Environmental Licences applicable to you and all other applicable
Environmental Law.
You also confirm that no Hazardous Materials (other than those
incidental to your business and which are stored in full compliance
with Environmental Licence(s)) have been used, disposed of, generated,
stored, transported, deposited, buried or emitted at, on, from or
under any premises (whether or not owned, leased, occupied or
controlled by you) in circumstances where this might result in a
liability on you.
(f) You represent that you have not received any notices of
withdrawal, violations and/or advisory action by regulatory agencies
regarding environmental control matters or Environmental Licence
compliance.
(g) You will indemnify and hold us and our respective officers,
directors, employees and agents (the 'Indemnified Parties') free and
harmless from and against any and all actions, causes of action,
losses, costs, liabilities and damages of any kind and every kind of
character known or unknown, fixed or contingent, out of pocket or
consequential and all expenses incurred in connection therewith
including reasonable legal fees and disbursements irrespective of
whether any such Indemnified Parties are a party to the action for
which indemnification is sought) (the "Indemnified Environmental
Liabilities") incurred by the Indemnified Parties or any of them as a
result of or arising out of or relating to:-
(i) The imposition or recording of any liens, pledges, charges or
mortgages on or over any of your assets by any government agency
or local governmental agency or authority pursuant to any
Environmental Law or the removal of any such liens, pledges,
charges or mortgages over any of your assets.
(ii) The claims of any private parties or local government or
government agency or authority regarding violations of
Environmental Law in connection with your operations or the
effect of the presence of any Hazardous Material on the value of
the assets belonging to you or in connection with compliance by
you or the Indemnified Parties with any regulation or order
issued pursuant to Environmental Law. Your obligations to the
Indemnified Parties shall continue after you have repaid the
Loan. For the purposes of this agreement:-
"Environmental Law" shall mean any law, regulation, code of
practice, circular, guidance notes or the like (whether in the
United Kingdom or elsewhere and whether now existing or subsequently
enacted or promulgated) or any judicial or administrative
interpretation thereof concerning the protection of human health or
the environment or the conditions of the work place or the
generation, transportation, storage, treatment and disposal of
hazardous materials.
"Hazardous Materials" shall mean any radioactive emissions and any
natural or artificial substance (whether in solid or liquid form or
in the form of a gas or vapour and whether alone or in combination
with any other substance) which are defined, determined identified
prohibited, limited or regulated by Environmental Law or any other
chemical, material, substance or element existing now or in the
future and which is capable of causing harm to man or any other
living organism which is capable of damaging the environment or
public health or welfare including any controlled, special,
dangerous, toxic, radioactive or hazardous waste.
"Environmental Licence" shall mean any permit, licence or
authorisation, consent or other approval required by Environmental
Law.
13
_______________________________
For and on behalf of
National Westminster Bank Plc
Date___________________________
FORM OF ACCEPTANCE
We accept the Loan on the terms and conditions set out in this letter
By:_______________________________
For and on behalf of Prestolite Electric Limited
Date: ______________________________
By: ________________________________
For and on behalf of the Prestolite Electric Incorporated
Date: _______________________________
