EXHIBIT 10.4
[THE ROYAL BANK OF SCOTLAND LETTERHEAD]
Date: 30 January 2003
Prestolite Electric Limited
Xxxxxx Xxxx
Xxxxx
Xxxxxx
X00XX
Attn: Xxxx Xxxxxx
Dear Sirs
Our Reference: D8550683
Re: GBP Amortising Baserate
Swap
The purpose of this document (this "Agreement") is to set forth the terms and
conditions of the transaction (the "Transaction") entered into between National
Westminster Bank plc ("Bank") and yourselves ("Counterparty") on the Trade Date
specified below.
Terms used in upper case in this Agreement shall have the meaning given to them
in Part B of this Agreement unless otherwise specified.
This Agreement evidences a complete and binding agreement between you and us as
to the terms of the transaction, which are as follows.
Part A
Notional Amount Please see Schedule A
Trade Date 30 December 2002 (time of trade is
available upon request)
Effective Date 30 December 2002
Termination Date 30 December 2007, subject to
adjustment in accordance with the
Business Day Convention
Counterparty Payments
Counterparty Payment Dates Every 30 March, 30 June, 30 September
and 30 December from and including 30
March 2003 to and including the
Termination Date. subject to adjustment
IN accordance with the Business Day
Convention
Counterparty Period End Dates Every 30 March, 30 June, 30 September
and 30 December from and including 30
March 2003 to and including the
Termination Date, subject to adjustment
in accordance with the Business Day
Convention
Fixed Rate 5.09000 pet per annum
[THE ROYAL BANK OF SCOTLAND LETTERHEAD]
Bank Payments
Bank Payment Dates Every 30 March, 30 June, 30 September
and 30 December from and including 30
March 2003 to and including the
Termination Date, subject to adjustment
in accordance with the Business Day
Convention
Bank Period End Dates Every 30 March, 30 June, 30 September
and 30 December from and including 30
March 2003 to and including the
Termination Date, subject to adjustment
in accordance with the Business Day
Convention
Floating Rate
Weighted Average The Weighted Average of the Base Rate
for each relevant Calculation Period.
Base Rate The arithmetic mean of the Base Rates
in effect for each day in a Calculation
Period determined by the Calculation
Agent by multiplying each Base Rate by
the number of days such Base Rate is in
effect, determining the sum of such
products and dividing such sum by the
number of days in that Calculation
Period.
The Bank's published Sterling Base Rate
expressed as a percentage rate per
annum.
For the purposes of this Agreement
"GBP" and "Sterling" both mean the
lawful currency of the United Kingdom.
Calculation Agent The Bank
Business Day London
Business Day Convention Modified Following
Additional Termination Event None
Notices for Address
Bank Address: c/o RBS Financial
Markets, Xxxxx 0,
000 Xxxxxxxxxxx,
Xxxxxx XX0X 0XX
Attention: Swaps Administration
Telephone: 000 0000 0000
Facsimile No: 0207334 1555
[THE ROYAL BANK OF SCOTLAND LETTERHEAD]
Counterparty Address:
Prestolite Electric
Limited
Xxxxxx Xxxx
Xxxxx
Xxxxxx
X0 0XX
Telephone:
02087354561
Facsimile No: 0208
0000000
ACCOUNT DETAILS
Payments to the Counterparty Please advise in return confirmation
Payments to the Bank For account of NatWest Bank Group
Swaps Book
[Swift NWIB GB2P SWP] with
National Westminster
Bank Pic, International Trade and
Banking Services
Account Number 00000000
Sort Code 60-00-04
[Swift NWBK XX 0X]
PART B
TERMS AND CONDITIONS
The following terms and conditions will apply to the Transaction.
1. Calculation of Interest Amounts
On or as soon as practicable following the first Business Day (or in the case of
a Base Rate Swap, the last Business Day) of each Calculation Period the
Calculation Agent will determine the amount payable by each party in respect of
that Calculation Period on the Payment Date falling at the end of (or in the
case of a Base Rate Swap, next following) that Calculation Period (each a
"Payment") in accordance with the following formulae;
Counterparty Payment = Notional Amount x Fixed Rate x Day Count Fraction
Bank Payment = Notional Amount x Floating Rate x Day Count Fraction
"Base Rate Swap" means a Transaction pursuant to which the Floating Rate is
calculated by reference to the Bank's base lending rate.
"Calculation Period" means in respect of a party, each period from and including
one Period End Date for that party to, but excluding, the next following Period
End Date for such party during the term of this Transaction, except that the
initial Calculation Period will commence on, and include, the Effective Date and
(b) the final Calculation Period will end on, but exclude, the Termination Date:
and
[THE ROYAL BANK OF SCOTLAND LETTERHEAD]
"Day Count Fraction" means the actual number of days in the Calculation Period
in respect of which payment is being made divided by 365.
"Effective Date" means the first day of the term of the Transaction, as
specified in Part A above.
"Payment Date" means, in respect of the Counterparty, each Counterparty Payment
Date and, in respect of the Bank, each Bank Payment Date.
"Period End Date" means each Payment Date, provided that in the case of a Base
Rate Swap it shall mean, in respect of the Counterparty, each date specified as
a Counterparty Period End Date in Part A, and in respect of the Bank, each date
specified as a Bank Period End Date in Part A.
"Termination Date" means the last day of the term of the Transaction, as
specified in Part A above.
The Calculation Agent will advise the parties of the Floating Rate, its
calculation of the Counterparty Payment and the Bank Payment on or about the
next following Payment Date.
2. Payments
On each Payment Date the parties will, subject to (1) the condition precedent
that no Event of Default or potential Event of Default with respect to the other
party has occurred and is continuing, and (2) the condition precedent that no
Early Termination Date in respect of the Transaction has occurred or been
effectively designated, make the Payments specified in Part A.
On each Payment Date each party's obligation to make payment of any amount will
be automatically satisfied and discharged and replaced by an obligation upon the
party by whom the larger amount would have been payable to pay to the other
party the excess of the larger amount over the smaller amount. If the amounts
payable by each party on any Payment Date are the same, then no payment shall be
made by either party on such Payment Date.
3. Business Days
Where "Following" is specified in Part A hereof as the applicable Business Day
Convention and a date on which a Payment Date is due to fall is not a Business
Day then such Payment Date will be the next following day that is a Business
Day.
Where "Modified Following" is specified in Part A hereof as the applicable
Business Day Convention and a date on which a Payment Date is due to fall is not
a Business Day then such Payment Date will be the next following day that is a
Business Day unless that day falls in the next calendar month, in which case
that Payment Date will be the first preceding day that is a Business Day.
"Business Day" shall mean (i) if "London" is specified in Part A as the
applicable Business Day, any day on which commercial banks are open for general
business in London, and (ii) if "TARGET" is specified in Part A as the
applicable Business Day, any day on which TARGET (the Trans-European Automated
Real-time Gross Settlement Express Transfer system) is open.
4. Events of Default
The occurrence of any one or more of the following in respect of either party
(the "Defaulting Party") shall be an Event of Default:
[THE ROYAL BANK OF SCOTLAND LETTERHEAD]
(a) Either party does not make any payment when due under this Agreement
and such failure is not remedied on or before the third Business Day
after notice of such failure is given to the party;
(b) Either party shall be in default of any other obligation under this
Agreement or any obligation under a transaction (including an
agreement with respect thereto) now existing or hereafter entered
into between the parties to this Agreement which is a rate swap
transaction, basis swap, forward rate transaction, interest rate
option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of
these transactions), which if capable of remedy is not remedied
within 30 days after notice by the other party;
(c) Any representation or warranty given by the Counterparty in Section 8
of this Agreement or otherwise or given by the Bank is incorrect or
misleading in any material respect;
(d) Either party or its Credit Support Provider (as such term is defined
in Section 4(e) below), (i) is dissolved (other than pursuant to a
consolidation, amalgamation or merger); (ii) becomes insolvent or is
unable to pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (iii) makes a general
assignment, arrangement or composition with or for the benefit of
its creditors; (iv) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any
other relief under any bankruptcy or insolvency law or other similar
law affecting creditors' rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding
or petition instituted or presented against it, such proceeding or
petition (A) results in a judgment of insolvency or bankruptcy or
the entry of an order for reliefer the making of an order for its
winding-up or liquidation or (B) is not dismissed, discharged,
stayed or restrained in each case within 30 days of the institution
or presentation thereof; (v) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (vi) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(vii) has a secured party take possession of all or substantially
all its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced or sued on or
against all or substantially all its assets and such secured party
maintains possession, or any such process is not dismissed,
discharged, stayed or restrained, in each case within 30 days
thereafter; (viii) causes or is subject to any event with respect to
it which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses (i) to
(vii) (inclusive); or (ix) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of
the foregoing acts, provided that where the Counterparty is a
private individual the following amendments shall be deemed to apply
in so far as this Section 4(d) applies to the Counterparty;
(1) Section 4(d)(i) will not apply to the Counterparty;
(2) the words "its winding up or liquidation" when they first appear
in Section 4(d)(iv) are replaced with the words "a declaration
of bankruptcy with respect to him" and the words "or the making
of an order for its winding-up or liquidation" in Section
4(d)(iv)(A) are omitted; and
(3) Section 4(d)(v) is amended to read as follows:
"The Counterparty declares himself bankrupt".
[THE ROYAL BANK OF SCOTLAND LETTERHEAD]
(i) either party or a party providing credit support in respect of
the obligations of that party (a "Credit Support Provider") fails
to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with the relevant
credit support arrangements if such failure is continuing after
any applicable grace period has elapsed;
(ii) the expiration or termination of any credit support in respect of
the obligations of that party or the failing or ceasing of such
credit support arrangement to be in full force and effect for the
purpose of this Agreement (in either case other than in
accordance with their terms) prior to the satisfaction of all
obligations of the relevant party under this Agreement without
the prior written consent of the other party; or
(iii) either party or its Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of any credit support arrangements in
respect of the obligations of that party.
The occurrence of the following in respect of the Counterparty (the "Defaulting
Party") shall constitute an Event of Default:
(f) Any sums due from the Counterparty, whether such sum is due to the Bank
or to any other person or entity, by way of borrowing or under any
obligation of any description for the payment of money on the part of the
Counterparty:
(i) are not paid when due and demanded nor within any applicable grace
period; or
(ii) become due and payable prior to the scheduled due date or become
capable of being declared, due and payable prior to the scheduled due
date, in either case by reason of default or event of default (howsoever
described) on the part of the Counterparty,
provided that notwithstanding the foregoing, an Event of Default shall
not occur under either (i) or (ii) above if (A) the failure to pay in (i)
or the default referred to in (ii) arises out of a failure to pay caused
by an error or omission of an administrative or operational nature, (B)
funds were available to such party to make the relevant payment when due.
and (C) such payment is made within three days following receipt of
notice of such failure to pay."
5. Termination Event
The following shall constitute
Termination Events:
(a) Due to the adoption of, or any change in, any applicable law after the
date on which this Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful for a party (which
party or parties shall be the Affected Party) to perform any obligation
to make or receive a payment in respect of this Agreement; and
(b) Due to any action taken by a taxing authority, or brought in a court of
competent jurisdiction, on or after the Trade Date, or a change in
taxation legislation, the party (which will be the Affected Party) will,
or there is a substantial likelihood that it will, on the next succeeding
scheduled Payment Date, be required to deduct or withhold any amount for
or on account of any tax or other assessment, and
(c) Either party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all of its assets to another entity, or
any person or entity acquires directly or indirectly the beneficial
ownership of equity securities having the power to elect a majority of
the board of directors
[THE ROYAL BANK OF SCOTLAND LETTERHEAD]
of that party or otherwise acquires directly or indirectly the power to
control the policy-making decisions of that party, and the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of that party (which party shall be the
Affected Party) immediately prior to such action, provided that this
Termination Event shall not apply to a Counterparty that is a private
individual; and
(d) Any Additional Termination Event as set out in Part A.
6. Notice of Termination
(a) Immediately following the occurrence of an Event of Default or Termination
Event the defaulting party or the party in respect of which the
Termination Event occurs (in each case, the "Affected Party"), shall
notify the other party (the "non-Affected Party"), specifying the nature
of that Event of Default or Termination Event, and will also give such
other information about that Event of Default or Termination Event as the
other party may reasonably require.
(b) The non-Affected Party may, in the notice described in Section 6(a) above
or in a later notice, elect to designate a date on which the Transaction
will terminate (the "Early Termination Date"), immediately whereupon each
party shall be released and discharged from its obligations under the
Transaction subject always to Section 7 below and providing always that
the foregoing shall be without prejudice to any rights, obligations or
liabilities of the parties hereto under the Transaction which may have
accrued up to and including the date of such notice.
7. Payments on Termination
(a) The Calculation Agent, in good faith and acting reasonably, will determine
an amount, if any, (the "Termination Payment") that would be paid by
(expressed as a positive) or to (expressed as a negative) the non-Affected
Party in consideration of an agreement between the non-Affected Party and
a Reference Market Maker that would have the effect of preserving for the
non-Affected Party the economic equivalent of any payment in respect of
the Transaction that would, but for the occurrence of the Early
Termination Date, have been required after that date.
(b) An amount will be payable equal to the amount determined by the
Calculation Agent in accordance with Section 7(a) plus any amounts which
have fallen due but remain unpaid as at the Early Termination Date owing
to the non-Affected Party, and less any amounts which have fallen due but
remain unpaid as at the Early Termination Date owing to the Affected
Party.
(c) If the amount determined in accordance with Section 7(b) above is a
positive number, the Affected Party will pay that amount to the
non-Affected Party; if it is a negative number then the non-Affected Party
will pay that amount to the Affected Party.
(d) Any amount payable under this Section 7 will, at the option of the
non-Affected Party, be reduced by its set-off against any amounts payable
(whether at such time or in the future or upon the occurrence of a
contingency) by or to, as appropriate, the non-Affected Party
(irrespective of the currency, place of payment or booking office of the
obligation) under any other agreement(s) between the parties or
instrument(s) or undertaking(s) issued or executed by one party to, or in
favour of, the other party.
For the purposes of this Section 7, the term "Reference Market Maker" shall mean
a leading dealer in interest rate swaps that is (a) a dealer of the highest
credit standing which satisfy all criteria that the Calculation Agent applies
generally at the time in deciding whether to offer or to make an extension of
credit and (b) to the extent practicable, a dealer having an office in the same
city.
[THE ROYAL BANK OF SCOTLAND LETTERHEAD]
8. Representations and Warranties
The Counterparty is deemed to represent and warrant to the Bank on the Trade
Date that:
(a) it has full power and authority (corporate and otherwise) to enter into
this Agreement and to exercise its rights and perform its obligations
thereunder and has obtained all authorisations and consents necessary for
it so to enter, exercise rights and perform obligations and such
authorisations and consents are in full force and effect:
(b) the obligations expressed to be assumed by it under this Agreement are
legal and valid obligations binding on it in accordance with their terms:
(c) all payments to be made by it under this Agreement may be made free and
clear of, and without deduction for or on account of any taxes whatsoever.
(d) it is entering into this Agreement solely for the purpose of reducing the
risks associated with fluctuating rates of interest and not for the
purpose of speculation.
(e) In entering into this Agreement it is not relying upon the Bank in
relation to any advice or forecast or estimate of future trends in
relation to interest rates or otherwise nor in relation to the fiscal
consequences of this Agreement.
(f) It is acting for its own account, and it has made its own independent
decisions to enter into this Agreement and as to whether this Agreement is
appropriate or proper for it based upon its own judgement and upon advice
from such advisers as it has deemed necessary. It is not relying on any
communication (written or oral) of the Bank as investment advice or as a
recommendation to enter into this Agreement; it being understood that
information and explanations related to the terms and conditions of this
Agreement shall not be considered investment advice or a recommendation to
enter into this Agreement. It understands that no communication (written
or oral) received from the Bank can be considered to be an assurance or
guarantee as to the expected results of this Agreement.
(g) It is capable of assessing the merits of and understanding (on its own
behalf or through independent professional advice), and understands and
accepts, the terms, conditions and risks of this Agreement. It is also
capable of assuming, and assumes, the risks of this Agreement.
(h) It is entering into this Agreement as principal (and not as agent or in
any other capacity, fiduciary or otherwise).
(i) The Counterparty has signed the Financial Services Act: Money Market
Regulation agreement provided by the Bank prior to entering into this
Agreement and acknowledges and confirms its agreement to the provisions
and risk disclosures contained therein
9. Calculation Agent
(a) Whenever the Calculation Agent is required to act or exercise judgment in
any other way, it will do so in good faith and in a commercially
reasonable manner.
(b) Whenever the Calculation Agent is required to select Reference Market
Makers for the purposes of making a calculation under Section 7, or
determining a Floating Rate due to the unavailability of the relevant
Telerate screen, the Calculation Agent shall make such selection or
determination in good faith after consultation with the other party, if
practicable, for the purposes of obtaining a representative rate
[THE ROYAL BANK OF SCOTLAND LETTERHEAD]
that will reasonably reflect conditions prevailing at the time in the
relevant market or a representative Termination Payment as the case may
be.
10. Notices
Any notice or communication shall be sent to the address or number of the
respective party as shown in Part A or such other address or number as may be
notified for this purpose and will be deemed effective;-
(a) if in writing and delivered in person or by courier, on the date it is
delivered;
(b) if sent by facsimile transmission, on the date that transmission is
received by the recipient (it being agreed that the burden of proving
receipt will be on the sender and will not be met by a transmission report
generated by the sender's facsimile machine);
(c) if sent by certified or registered mail on the date that mail is delivered
or its delivery is attempted; or
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Business
Day, in which ease that communication shall be deemed given and effective on the
first following day that is a Business Day.
11. Transfer
This Agreement may not be transferred (whether by way of security or otherwise)
by either party without the prior written consent of the other party, except
that either party, or where the Counterparty is a private individual, the Bank
only, may make such a transfer of this Agreement pursuant to a consolidation or
amalgamation with, or merger with or into, or transfer of all or substantially
all its assets to, another entity (but without prejudice to any other right or
remedy under this Agreement).
12. Tape Recording
Each party to this Agreement acknowledges and agrees to the tape recording of
conversations between the parties to this Agreement whether by one or other or
both of the parties and that such tape recordings may be submitted in evidence
to any court or legal proceedings for the purpose of establishing any mailers
relating to this Agreement.
13. No Waiver of Rights
A failure or delay in exercising any right, power or privilege in respect of
this Agreement will not be presumed to operate as a waiver, and a single or
partial exercise of any right, power or privilege will not be presumed to
preclude any subsequent or further exercise, of that right, power or privilege
or the exercise of any other right, power or privilege.
14. Joint and Several Liability
Where a party to this Agreement consists of two or more persons (whether as
partners or otherwise) their liability hereunder shall be joint and several. An
Event of Default shall be deemed to have occurred with respect to both or all of
such persons if any such event occurs in respect of any one of them. All
representations, warranties, statements, undertakings, terms and conditions
made, or agreed to, by a party shall be deemed to have been made by both or all
of such persons. Each of such persons hereby irrevocably authorises each of the
others to give and receive all communications hereunder and irrevocably
authorises the other party or parties to this Agreement to act on the basis of
such communication and to give any communication hereunder to any of
[THE ROYAL BANK OF SCOTLAND LETTERHEAD]
the others. If a party receives conflicting notices it may act or decline to act
on the basis thereof as it, in its sole discretion, thinks fit. References in
this Agreement to a party that consists of two or more persons (whether as
partners or otherwise) as "it" or "its" will be replaced with the words "them",
"they" or "their" as appropriate in so far as they apply to that party.
15. Waiver of Jury Trial
Each party hereby waives any and all rights to trial by jury or suit, action or
proceeding arising out of or relating to this Agreement and acknowledges that
this waiver is a material inducement to the other party entering into this
Agreement.
16. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and
supersedes all oral communications and prior writings with respect
thereto.
(b) Counterparts. This Agreement (and each amendment, modification and waiver
in respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
17. Governing Law
This Agreement shall be governed by and construed in accordance with English Law
and the parties hereto hereby submit to the non-exclusive jurisdiction of the
English courts for all purposes.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by signing and returning a duly executed copy.
Confirmed as of the date first written
Yours faithfully Yours faithfully
Name-/ Xxxxxx Xxxx
Title : Authorised Signatory
Name: National Westminster
Title Bank pic
Prestolite Electric Limited London
[THE ROYAL BANK OF SCOTLAND LETTERHEAD]
SCHEDULE A - D8550683
Calculation Period NOTIONAL AMOUNT
-----------------------------------------------------------------------
30 December 2002 - 30 March 0000 XXX 3,000,000.00
30 March 2003 - 30 June 0000 XXX 2,850,000.00
30 June 2003 - 30 September 0000 XXX 2,700,000.00
30 September 2003 - 30 December 2003 vGBP 2,550,000.00
30 December 2003 - 30 March 0000 XXX 2,400,000.00
30 March 2004 - 30 June 0000 XXX 2,250,000.00
30 June 2004 - 30 September 0000 XXX 2,100,000.00
30 September 2004 - 30 December 2004 GBP 1,950,000.00
30 December 2004 - 30 March 0000 XXX 1,800,000.00
30 March 2005 - 30 June 0000 XXX 1,650,000.00
30 June 2005 - 30 September 0000 XXX 1,500,000.00
30 September 2005 - 30 December 2005 GBP 1,350,000.00
30 December 2005 - 30 March 0000 XXX 1,200,000.00
30 March 2006 - 30 June 0000 XXX 1,050,000.00
30 June 2006 - 30 September 0000 XXX 900,000.00
30 September 2006 - 30 December 2006 GBP 750,000.00
30 December 2006 - 30 March 0000 XXX 600,000.00
30 March 2007 - 30 June 0000 XXX 450,000.00
30 June 2007 - 30 September 0000 XXX 300,000.00
30 September 2007 - 30 December 2007 GBP 150,000.00
All dates are subject to adjustment in accordance with the Business Day
Convention
