EXECUTION COPY
CONSENT AND WAIVER
THIS CONSENT AND WAIVER (this "Consent") dated as of July 30, 2003,
effective in accordance with Section 4 below, to the Amended and Restated Credit
Agreement, dated as of August 22, 2001 (as amended, supplemented or otherwise
modified prior to the date hereof, the "Credit Agreement"), among ARMOR
HOLDINGS, INC., as Borrower (the "Borrower"), the several lenders from time to
time parties thereto (the "Lenders"), Bank of America, N.A., as administrative
agent (the "Administrative Agent"), WACHOVIA BANK, NATIONAL ASSOCIATION,
successor to First Union National Bank, as documentation agent, and SunTrust
Bank, as co-agent.
Statement of Purpose
The Borrower has entered into certain letter agreements dated July 18,
2003 with Bank of America, N.A. ("Bank of America") and Banc of America
Securities LLC ("BAS") whereby the Borrower has engaged BAS to arrange the
refinance of the indebtedness under the Credit Agreement pursuant to a new
senior secured credit facility (the "Replacement Credit Facility").
In conjunction with the closing of the Replacement Credit Facility, the
Borrower anticipates issuing unsecured senior subordinated notes (the "High
Yield Notes") guaranteed by its Domestic Subsidiaries (other than USDS, Inc.) on
a senior subordinated basis (the "High Yield Note Guarantors") in an initial
principal amount of up to $200,000,000 (the "High Yield Note Offering"). The
Borrower has requested that the Administrative Agent seek approval from the
Lenders of a consent and waiver under the Credit Agreement to permit the High
Yield Notes in the event the Replacement Facility is not closed on or prior to
the issuance of the High Yield Notes.
In addition, the Borrower has entered into negotiations for a proposed
business combination between the Borrower or a Subsidiary thereof and Simula,
Inc., an Arizona corporation and, in connection therewith, the Borrower and
Simula, Inc. have executed a letter of intent dated July 23, 2003 (the "Simula
Acquisition"). The Borrower has requested that the Administrative Agent seek
approval from the Lenders of a consent and waiver under the Credit Agreement to
permit the Simula Acquisition.
Further, the Required Lenders have executed that certain Waiver dated
as of June 30, 2003 under the Credit Agreement (the "Prior Waiver"), in
connection with the conversion of each of Armor Holdings Mobile Security, Inc.
(f/k/a Bengal Acquisition Corp.) and O'Gara-Hess & Eisenhardt Armoring Company
from a corporation to a limited liability company. Paragraph 4 of the Prior
Waiver requires that the Borrower satisfy certain requirements no later than
July 30, 2003 (the "Waiver Deadline"). The Borrower has requested that the
Required Lenders extend the Waiver Deadline to August 15, 2003.
The Required Lenders party hereto are willing to agree to the requested
consent and waiver, but only on the terms and subject to the conditions set
forth in this Consent.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. All capitalized, undefined terms used in this
Consent shall have the meanings assigned thereto in the Credit Agreement.
SECTION 2. CONSENTS AND WAIVERS.
(a) Subject to Section 3 hereof, notwithstanding the provisions of the
Credit Agreement and the other Loan Documents to the contrary, the Required
Lenders hereby consent to the incurrence of Indebtedness by the Borrower under
the High Yield Notes, the issuance of the guaranties by the High Yield Note
Guarantors and the exchange of registered High Yield Notes for the unregistered
High Yield Notes as contemplated by the terms of the High Yield Note Offering
(the "Exchange Offer") and waive any Default or Event of Default that may arise
directly as a result of the offer, sale and issuance of the High Yield Notes the
guaranties issues by the High Yield Note Guarantors and the Exchange Offer.
(b) Subject to Section 3 hereof, notwithstanding the provisions of the
Credit Agreement and the other Loan Documents to the contrary, the Required
Lenders hereby consent to the Simula Acquisition and waive any Default or Event
of Default that may arise directly as a result of the consummation of the Simula
Acquisition.
(c) Subject to Section 3 hereof, the Required Lenders hereby agree to
extend the Waiver Deadline to August 15, 2003.
SECTION 3. COVENANTS OF THE BORROWER.
(a) The Borrower shall provide the Administrative Agent with copies of
such documents relating to the High Yield Bonds as the Administrative Agent
shall reasonably request and such documents shall be in form and substance
reasonably satisfactory to the Administrative Agent.
(b) Upon the issuance of the High Yield Notes, the aggregate Revolving
Credit Commitments of the Lenders shall be automatically and permanently reduced
to $60,000,000 and the Borrower shall prepay Revolving Credit Loans to the
extent the Aggregate Outstanding Extensions of Credit on such date exceed
$60,000,000.
(c) The Borrower agrees to continue to use its reasonable best efforts
to close the Replacement Credit Facility on or before the issuance of the High
Yield Notes.
(d) In connection with the consummation of the Simula Acquisition, the
following conditions shall have been met:
(i) the Borrower shall deliver to the Administrative Agent and
the Lenders a Compliance Certificate for the most recent Rolling Period
preceding the date of the Simula Acquisition demonstrating, in form and
substance reasonably satisfactory to thereto, pro forma
compliance with each covenant contained in Section 10.1 of the Credit Agreement
(both before and after giving effect to such proposed acquisition) as if the
Simula Acquisition had been consummated as of the first day of such Rolling
Period, and based on the financial statements of Simula, Inc. for such Rolling
Period;
(ii) the Borrower shall deliver to the Administrative Agent
such documents relating to the Simula Acquisition as the Administrative Agent
shall reasonably request and such documents shall be in form and substance
reasonably satisfactory to the Administrative Agent;
(iii) the Borrower shall have certified on or before the
closing date of the Simula Acquisition, in writing and in a form reasonably
acceptable to the Administrative Agent and the Lenders, that the Simula
Acquisition has been approved by the board of directors or equivalent governing
body of Simula, Inc.; and
(iv) no Default or Event of Default shall have occurred and be
continuing both before and after giving effect to the Simula Acquisition.
(e) If the Replacement Credit Facility shall not have closed by August
30, 2003 and the High Yield Notes shall have been offered, sold and issued by
the Borrower and the transactions contemplated by the High Yield Note Offering
shall have closed by August 30, 2003, the Borrower shall execute and deliver to
the Administrative Agent on or before August 30, 2003 such documents as it may
reasonably request, and take such further action as it shall reasonably request,
in order to grant to the Administrative Agent, on behalf of the Lenders, a first
priority perfected security interest in (i) all of the Capital Stock of each
Domestic Subsidiary and 65% of the Capital Stock of each first tier Foreign
Subsidiary, which Capital Stock shall not be subject to any other lien or
encumbrance; and (ii) all other present and future assets and properties (other
than real property) of the Borrower and each of its Domestic Subsidiaries (other
than USDS, Inc.) (including, without limitation, accounts receivable, inventory,
machinery, equipment, contracts (excluding any domestic government contracts
that specifically prohibit the granting of a security interest in amounts
payable under such contract), trademarks, copyrights, patents, license rights
and general intangibles), in each case, on terms and conditions reasonably
satisfactory to the Administrative Agent.
(f) Should the Borrower default in its obligations under this Section
3, such default shall be deemed an immediate "Event of Default" under the Credit
Agreement and the other Loan Documents, the Administrative Agent, on behalf of
the Lenders, shall be entitled to exercise all of its remedies under the Credit
Agreement and the other Loan Documents without any rights to cure provided for
in the Credit Agreement and in the Loan Documents.
SECTION 4. EFFECTIVENESS. The consent and waiver set forth in this
Consent shall become effective on the date that (a) the Administrative Agent
shall have received satisfactory evidence that this Consent has been duly
executed and delivered by the Borrower, the Guarantors and the Required Lenders;
(b) the Administrative Agent shall have received any other documents relating
hereto that shall be reasonably requested by the Required Lenders or the
Administrative Agent; and (c) the Administrative Agent shall have been
reimbursed for all legal fees then due and payable by the Borrower and invoiced
prior to the date hereof.
SECTION 5. LIMITED CONSENT AND WAIVER. Except as expressly provided in
this Consent, the Credit Agreement and each other Loan Document shall continue
to be, and shall remain, in full force and effect. This Consent shall not be
deemed or otherwise construed (a) to be a waiver of, or consent to or a
modification or amendment of, any other term or condition of the Credit
Agreement or any other Loan Document, (b) to prejudice any other right or
remedies that the Administrative Agent or the Lenders, or any of them, may now
have or may have in the future under or in connection with the Credit Agreement
or the Loan Documents, as such documents may be amended, restated or otherwise
modified from time to time, (c) to be a commitment or any other undertaking or
expression of any willingness to engage in any further discussion with the
Borrowers or any other person, firm or corporation with respect to any waiver,
amendment, modification or any other change to the Credit Agreement or the Loan
Documents or any rights or remedies arising in favor of the Lenders or the
Administrative Agent, or any of them, under or with respect to any such
documents or (d) to be a waiver of, or consent to or a modification or amendment
of, any other term or condition of any other agreement by and among the
Borrower, on the one hand, and the Administrative Agent or any other Lender, on
the other hand.
SECTION 6. REPRESENTATIONS AND WARRANTIES/NO DEFAULT. By its execution
hereof, and after giving effect to this Consent, the Borrower hereby certifies
that (e) each of the representations and warranties set forth in the Credit
Agreement and the other Loan Documents is true and correct as of the date hereof
as if fully set forth herein (other than representations and warranties which
speak as of a specific date pursuant to the Credit Agreement, which
representations and warranties shall have been true and correct as of such
specific dates) and that as of the date hereof no Default or Event of Default
has occurred and is continuing, and (f) the execution, delivery and performance
of this Consent have been authorized by all requisite corporate action on the
part of the Borrowers.
SECTION 7. ACKNOWLEDGEMENT OF GUARANTORS. By their execution hereof,
each of the Guarantors listed on the signature pages to this Consent hereby
expressly (a) consents to the modifications and amendments set forth in this
Consent, (b) reaffirms all of its respective covenants, representations,
warranties and other obligations set forth in the Credit Agreement and the other
Loan Documents to which it is a party and (c) acknowledges, represents and
agrees that its respective covenants, representations, warranties and other
obligations set forth in the Credit Agreement and the other Loan Documents to
which it is a party remain in full force and effect.
SECTION 8. NO DEFENSES, RELEASE. None of the Borrower nor any other
Loan Party has any claims, counterclaims, offsets or defenses to the Loan
Documents or the Obligations, or if any such Person does have any claims,
counterclaims, offsets or defenses to the Loan Documents or the Obligations, the
same are hereby waived, relinquished and released in consideration of the
execution and delivery of this Consent by the Lenders parties hereto. By its
execution hereof and in consideration of the mutual covenants contained herein
and the accommodations granted to the Borrower hereunder, the Borrower on behalf
of itself and the other Loan Parties expressly waives and releases any and all
claims and causes of actions any of them may have, or allege to have (and all
defenses which may arise out of any of the foregoing), whether known or unknown,
against the Administrative Agent or any Lender or any of their
Affiliates, employees, directors, officers, attorneys or agents, arising out of
the credit relationship between the Borrower and the Lenders up to and including
the date of this Consent.
SECTION 9. EXPENSES. The Borrowers shall pay all reasonable
out-of-pocket expenses of the Administrative Agent in connection with the
preparation, execution and delivery of this Consent, including, without
limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent.
SECTION 10. GOVERNING LAW. This Consent shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 11. COUNTERPARTS. This Consent may be executed in separate
counterparts, each of which when executed and delivered is an original but all
of which taken together constitute one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Consent to be
duly executed under seal by their duly authorized representatives, all as of the
day and year first above written.
BORROWER:
ARMOR HOLDINGS, INC., as Borrower
By:
-----------------------------------------
Name:
Title:
GUARANTORS:
911EP, INC.
By:
-----------------------------------------
Name:
Title:
AHI PROPERTIES I, INC.
By:
-----------------------------------------
Name:
Title:
ARMOR BRANDS, INC.
By:
---------------------------------------
Name:
Title:
ARMORGROUP NORTH AMERICA, INC.
By:
-----------------------------------------
Name:
Title:
ARMOR HOLDINGS GP, LLC
By:
-----------------------------------------
Name:
Title:
ARMOR HOLDINGS LP, LLC
By:
-----------------------------------------
Name:
Title:
ARMOR HOLDINGS FORENSICS, INC.
By:
-----------------------------------------
Name:
Title:
ARMOR HOLDINGS PAYROLL SERVICES, LLC
By:
-----------------------------------------
Name:
Title:
ARMOR HOLDINGS PRODUCTS, INC.
By:
-----------------------------------------
Name:
Title:
ARMOR HOLDINGS PROPERTIES, INC.
By:
-----------------------------------------
Name:
Title:
ARMOR HOLDINGS MOBILE SECURITY, LLC
By:
-----------------------------------------
Name:
Title:
ARMOR SAFETY PRODUCTS COMPANY
By:
-----------------------------------------
Name:
Title:
B-SQUARE, INC.
By:
-----------------------------------------
Name:
Title:
BREAK-FREE, INC.
By:
-----------------------------------------
Name:
Title:
BREAK-FREE ARMOR CORP.
By:
-----------------------------------------
Name:
Title:
CASCO INTERNATIONAL, INC.
By:
-----------------------------------------
Name:
Title:
DEFENSE TECHNOLOGY CORPORATION OF AMERICA
By:
-----------------------------------------
Name:
Title:
IDENTICATOR, INC.
By:
-----------------------------------------
Name:
Title:
INTERNATIONAL TRAINING, INC.
By:
-----------------------------------------
Name:
Title:
ITI LIMITED PARTNERSHIP
By:
-----------------------------------------
Name:
Title:
MONADNOCK LIFETIME PRODUCTS, INC., a Delaware
corporation
By:
-----------------------------------------
Name:
Title:
MONADNOCK LIFETIME PRODUCTS, INC. a
New Hampshire corporation
By:
-----------------------------------------
Name:
Title:
MONADNOCK POLICE TRAINING COUNCIL, INC.
By:
-----------------------------------------
Name:
Title:
NAP PROPERTIES, LTD
By:
-----------------------------------------
Name:
Title:
NAP PROPERTY MANAGERS, LLC
By:
-----------------------------------------
Name:
Title:
NETWORK AUDIT SYSTEMS, INC.
By:
-----------------------------------------
Name:
Title:
NEW TECHNOLOGIES ARMOR, INC.
By:
-----------------------------------------
Name:
Title:
O'GARA-HESS & EISENHARDT ARMORING COMPANY,
LLC
By:
-----------------------------------------
Name:
Title:
O'GARA SECURITY ASSOCIATES, INC.
By:
----------------------------------------
Name:
Title:
PARVUS CRISIS MANAGEMENT CORPORATION
By:
-----------------------------------------
Name:
Title:
PRO-TECH ARMORED PRODUCTS OF MASSACHUSETTS,
INC.
By:
-----------------------------------------
Name:
Title:
RAMTECH DEVELOPMENT CORP.
By:
-----------------------------------------
Name:
Title:
SAFARILAND GOVERNMENT SALES, INC.
By:
-----------------------------------------
Name:
Title:
SAFARI LAND LTD. INC.
By:
-----------------------------------------
Name:
Title:
SPEEDFEED ACQUISITION CORP.
By:
-----------------------------------------
Name:
Title:
THE O'GARA COMPANY
By:
-----------------------------------------
Name:
Title:
THE PARVUS COMPANY
By:
-----------------------------------------
Name:
Title:
THE PARVUS INTERNATIONAL INFORMATION COMPANY
By:
-----------------------------------------
Name:
Title:
USDS, INC.
By:
-----------------------------------------
Name:
Title:
LENDERS:
BANK OF AMERICA, N.A., as Administrative
Agent
By:
-----------------------------------------
Name: Michael Brashler
Title: Vice President and Senior Agency
Officer
BANK OF AMERICA, N.A., as Lender
By:
-----------------------------------------
Name: Brian K. Keeney
Title: Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Documentation Agent and Lender
By:
-----------------------------------------
Name:
Title:
SUNTRUST BANK, as Co-Agent and as a Lender
By:
-----------------------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION, as Lender
By:
----------------------------------------
Name:
Title:
REPUBLIC BANK, as Lender
By:
-----------------------------------------
Name:
Title:
ING CAPITAL LLC, as Lender
By:
-----------------------------------------
Name:
Title: