Letter Agreement Regarding $5,000,000 Master Revolving Note and Letters of Credit between Comerica Bank and Prestolite Electric Incorporated

Summary

Comerica Bank and Prestolite Electric Incorporated have entered into an agreement outlining the terms for advances under a $5,000,000 Master Revolving Note and the issuance of standby or commercial letters of credit. Prestolite must provide regular financial statements and other information to Comerica Bank. The total amount of advances and outstanding letters of credit cannot exceed $5,000,000, and specific fees and collateral requirements apply. Any default under this agreement is considered a default under the Note. Prestolite Electric Holding, Inc. reaffirms its guaranty obligations to Comerica Bank.

EX-10.1 2 k58620ex10-1.txt LETTER AGREEMENT 1 EXHIBIT 10.1 COMERICA BANK September 29, 2000 Prestolite Electric Incorporated 2100 Commonwealth Boulevard Suite 300 Ann Arbor, Michigan 48 105 Ladies and Gentlemen: Reference is hereby made to the $5,000,000 Master Revolving Note dated as of the date hereof (together with all amendments thereto, the "Note"), from Prestolite Electric Incorporated ("Company") as maker to Comerica Bank ("Bank") as payee. This letter, when signed by you. will constitute our agreement concerning advances under the Note and the issuance of standby or commercial letters of credit for the account of the Company. As used in this letter, the term "Indebtedness" shall mean all indebtedness and any other obligations of the Company to the Bank under or in respect of the Note, any letters of credit issued pursuant to this letter. and all other indebtedness or obligations of the Company to the Bank of any kind or nature whatsoever. whether now owing or hereafter created, and whether absolute or contingent. I. The Company and the Bank agree that so long as any Indebtedness remains outstanding, the Company will furnish to the Bank: (a) within ninety (90) days after and as of the end of each fiscal year of Prestolite Electric Holding, Inc. ("PEJ"), detailed consolidated financial statements of PEI and its consolidated subsidiaries, audited and certified by independent certified public accountants satisfactory to Bank, and unaudited consolidating financial statements of PET and its consolidated subsidiaries; (h) 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 Phi and its subsidiaries presented in the form previously submitted to Bank, certified (upon request of Bank) by an authorized officer of Company as being correct and accurate to the best of his knowledge; Page 19 2 Prestolite Electric Incorporated September 29, 2000 Page 2 (c) within ninety (90) days after the beginning of each fiscal year of PEI, financial projections for PET and subsidiaries (on a month by month basis) for such fiscal year; (d) such information as required by the terms and conditions of any security agreements or advance formula agreements; (e) simultaneously with the delivery of any financial statements or reports, certificates, notices of default or other material correspondence to the holders of any senior debt of the Company, copies thereof; and (f) promptly, and in form to he satisfactory to Bank. such other information as Bank may reasonably request from time to time. 2. In addition to advances under the Note, the Bank may issue. from time to time until January 31, 2002, standby letters of credit for the account of the Company in an aggregate face amount not to exceed $5,000,000; provided, however, that the sum of the aggregate amount of advances outstanding under the Note plus the aggregate face amount of all outstanding letters of credit issued pursuant to this letter shall not exceed $5,000,000; provided further, that except as described in the following proviso, 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. 1he issuance of any letters of credit shall he 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. 3. The Company agrees to pay to the Bank a commitment fee on the average daily balance of the unused portion of the Note at the rate of one-quarter of one percent (1/4%) per annum computed on the actual number of day elapsed using the year of 360 days. The commitment fee shall be payable quarterly in arrears on the first day of January. April, July and October, commencing January 1,2001, and at the maturity of the Note, and shall be non-refundable. For purposes calculating the commitment fee, the face amount of all outstanding letters of credit issued pursuant to this letter shall be considered to be outstanding advances under the Note. Page 20 3 Prestolite Electric Incorporated September 29, 2000 Page 3 4. Any default by the Company under this Agreement shall constitute a Default under the Note. 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/ Peggy A. Cummins Peggy A. Cummins First Vice President Acknowledged and agreed to as of the date set forth above: PRESTOLITE ELECTRIC INCORPORATED By: /s/ Kenneth C. Cornelius ------------------------- Its: ------------------------- By: /s/ Dennis P. Chelminski ------------------------- Its: ------------------------- 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/ Kenneth C. Cornelius ------------------------- Its: ------------------------- Page 21