SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 26, 1997
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Armor Holdings, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-18863 59-3392443
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State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
13386 International Parkway, Jacksonville, Florida 32218
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (904) 741-5402
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191 Nassau Place Road, Yulee, Florida 32097
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(Former name or former address, if changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
SUPERCRAFT (GARMENTS) LIMITED
On April 7, 1997, Armor Holdings, Inc., a Delaware
corporation (the "Company"), through its newly formed wholly-owned subsidiary
Armor Holdings Limited, a United Kingdom corporation ("AHL"), acquired all of
the outstanding share capital (the "Supercraft Shares") of Supercraft
(Garments) Limited, a United Kingdom corporation ("Supercraft") pursuant to
the terms of a Share Acquisition Agreement (the "Supercraft Acquisition
Agreement") dated April 7, 1997, between the Company, AHL and Bodycote
International PLC, a United Kingdom corporation ("Bodycote"), the sole
shareholder of Supercraft. Supercraft is a leading European manufacturer and
distributor of military apparel, high visibility garments and bullet resistant
vests to law enforcement and military agencies through Europe, the Middle East
and Asia.
Pursuant to the terms of the Supercraft Acquisition
Agreement, as consideration for the Supercraft Shares, AHL paid to Bodycote:
(i) (pound)813,500 in cash at closing (the "Initial Consideration"), which is
subject to adjustment in the event Supercraft's net assets, as shown in
the Completion Accounts of Supercraft, are less than (pound)825,000; (ii)
(pound)536,500, which was placed in a segregated account pending the final
disposition of title to certain real property acquired by AHL from Bodycote;
and (iii) certain deferred compensation in an amount not to exceed
(pound)250,000, if Supercraft's profit before interest (income or expense) and
taxes (as computed in accordance with the accounting principles adopted by
Supercraft and consistently applied but subject to United Kingdom generally
accepted accounting principles) for the fiscal year ended December 31, 1997
exceeds (pound)350,000. In addition, AHL loaned (pound)400,000 to Supercraft in
exchange for a promissory note of Supercraft.
AHL funded the acquisition from working capital of the
Company.
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The foregoing description of the Supercraft Acquisition
Agreement and the transactions contemplated thereby is not intended to be
complete and is qualified in its entirety by the complete text of the
Supercraft Acquisition Agreement. Capitalized terms not otherwise defined
shall have their respective meanings as set forth in the Supercraft
Acquisition Agreement.
DSL GROUP LIMITED
On April 16, 1997 (the "Completion Date") pursuant to an
agreement (the "DSL Purchase Agreement") for the sale and purchase of the
whole of the issued share capital of DSL Group Limited ("DSL") between the
Company, AHL (AHL, together with the Company, hereinafter being referred to as
the "Purchasers"), the Institutional Vendors, the Management Vendors
(collectively, the "Vendors") and Martin Brayshaw, the Company agreed to
acquire all of the issued ordinary and deferred share capital of DSL and AHL
agreed to acquire all of the issued preference share capital of DSL (together,
the "DSL Shares") from the Vendors (the "DSL Acquisition"). DSL's core business
is devising and then implementing solutions to complex security problems in
high risk areas. DSL's services encompass the provision of detailed threat
assessments, security planning, security training, the provision, training and
supervision of specialist manpower and other services up to the implementation
and management of fully integrated security systems. Pursuant to the terms of
the DSL Purchase Agreement, the Purchasers agreed to purchase the DSL Shares
from the Vendors, and as consideration therefor (i) in respect of all of the
outstanding ordinary share capital of DSL, the Company issued to the Vendors
1,274,217 shares of common stock, $0.01 per share (the "Common Stock"), of the
Company (the "Consideration Shares") having a value, when valued in accordance
with the DSL Purchase Agreement, equal to (pound)6,725,656, (ii) in respect of
all of the outstanding deferred share capital of DSL, the Company paid the sum
of (pound)1 in the aggregate (which the Vendors requested and authorized the
Purchasers to retain and apply for the benefit of DSL) and (iii) in respect of
all of the outstanding preference share capital of DSL, AHL paid the sum of
(pound)4,635,000 in the aggregate. All of the DSL Shares were acquired
together with all rights to unpaid dividends, including in particular the
right to an aggregate dividend of (pound)235,000 accrued in respect of the
preference shares. In addition, the Company also paid $6,850,000 plus
interest to N.M. Rothschild & Sons Limited ("Rothschild") in repayment of
DSL's outstanding balance on its credit facility with Rothschild (the
"Rothschild Debt").
In connection with the execution of the DSL Purchase
Agreement, the Company agreed to register the Consideration Shares for sale
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant
to the terms of a Registration Rights Agreement between the Company and the
Vendors (the "Registration Rights Agreement").
Pursuant to the terms of the Registration Rights Agreement,
the Holders are entitled to one (1) demand registration right. On the Completion
Date, three Holders, NatWest Ventures Nominees Limited, Phoenix General Partner
Limited and Compass Representatives Limited served a Demand upon the Company
to register under the Securities Act all of the Registrable Securities held
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by such Electing Holders. Pursuant to the Demand and the terms of the
Registration Rights Agreement, the Company is obligated to file with the
Securities and Exchange Commission an appropriate Registration Statement under
the Securities Act with respect to the Shares by May 16, 1997. As soon as
practicable, and in any event by July 10, 1997, the Company shall cause to be
published combined operating results of the Company, including at least thirty
(30) days of combined sales and net income of the Company, its consolidated
subsidiaries and DSL and its consolidated subsidiaries following the
Completion Date (the "Combined Results"). The Company agreed to use its best
efforts to cause the Registration Statement to be declared effective as soon
as practicable after publication of the Combined Results.
In addition to the demand registration right, if at any time
within one (1) year after the Completion Date, the Company proposes to file a
Registration Statement under the Securities Act (except in certain
circumstances) relating to a public offering of the Company's Common Stock
after Jonathan M. Spiller, the President and Chief Executive Officer of the
Company, has sold, transferred or disposed or proposes to sell, transfer, or
dispose of, shares of Common Stock held by him in excess of 64,666 shares,
then the Holders that own Registrable Securities shall have a piggyback right
to register certain of their Registrable Securities pursuant to such
Registration Statement. The Holders are entitled to an unlimited number of
piggyback registrations.
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Pursuant to the DSL Purchase Agreement, certain of the
Management Vendors (the "Warrantors") made representations and warranties to
the Purchasers. In order to secure the obligations of the Warrantors in
respect of these representations and warranties, the Warrantors agreed to
deliver to Ashurst Morris Crisp, solicitors, in London, as escrow agent (the
"Escrow Agent"), an aggregate of 49,694 of the Consideration Shares (the
"Escrow Shares"), to be held in escrow until the earlier of April 16, 1998 and
the issuance by the Company of its audited accounts for the year ending
December 31, 1997, provided that the Escrow Shares will be retained in escrow
beyond such date if, prior thereto, the Company, among other things, makes a
warranty claim against the relevant Warrantor.
Subject to any rights in favor of third parties that may be
granted by the Warrantors, each Warrantor shall be entitled to vote the shares
of Common Stock in the Escrow Fund deposited by such Warrantor and to receive
dividends thereon, when, as and if declared by the Board of Directors of the
Company.
The foregoing descriptions of the DSL Purchase Agreement,
the Escrow Agreement and the Registration Rights Agreement and the
transactions contemplated thereby are not intended to be complete and are
qualified in their entirety by the complete texts of the DSL Purchase
Agreement, the Escrow Agreement and the Registration Rights Agreement.
Capitalized terms not otherwise defined herein shall have their respective
meanings as set forth in such agreements.
The Company funded the cash acquisition of the preference
shares, the repayment of the Rothschild Debt and the payment of other fees and
expenses by drawing down on its revolving credit facility with Barnett Bank,
N.A. in the amount of $15,400,000. The terms of the Company's revolving
credit facility with Barnett Bank, N.A. are hereinafter described in Item 5.
ITEM 5. OTHER EVENTS
On March 26, 1997, the Company restructured its existing
credit facility with Barnett Bank, N.A. ("Barnett Bank") pursuant to an
Amended and Restated Loan Agreement (the "Loan Agreement") dated March 26,
1997, between the Company and Barnett Bank. Pursuant to the Loan Agreement,
Barnett Bank established a $20,000,000 revolving line of credit (the "Credit
Facility") for the benefit of the Company. The Company's indebtedness under
such revolving credit facility is evidenced by a Renewal Promissory Note in
the principal amount of $20,000,000 bearing interest at a rate of either (i)
Barnett Bank's prime rate less one-quarter of one percent (.25%) or (ii) an
adjusted LIBOR rate equal to 2.25% per annum over the LIBOR
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rate, as selected by the Company. In addition, the Loan Agreement provides
that Barnett Bank will make available to the Company an acceptance facility,
subject to the terms and conditions of an Acceptance Credit Agreement dated
November 14, 1996, as amended, between the Company and Barnett Bank. The
maximum amount of acceptances under this facility outstanding at any time
cannot exceed $5,000,000. Barnett Bank will also issue to the Company letters
of credit pursuant to reimbursement agreements to be entered into from time to
time between the Company and Barnett Bank. The amount of any acceptances or
letters of credit shall be counted towards the revolving credit facility,
which is in the maximum principal amount of $20,000,000.
As part of the Loan Agreement, NIK Public Safety, Inc.
("NIK"), Armor Holdings Properties, Inc. and Defense Technology Corporation of
America ("DTC," NIK, Armor Holdings Properties, Inc. and DTC collectively, the
"Subsidiaries") reaffirmed each of their prior obligations to Barnett Bank to
act as a guarantor for the Company's obligations under the Loan Agreement
pursuant to a Guaranty of Payment (the "Guaranty"). The Loan Agreement is
secured by a security interest in all of the assets of the Company and each of
the Subsidiaries. Each such security interest is evidenced by a separate
Amended and Restated Security Agreement between Barnett Bank, the Company and
each of the Subsidiaries (the "Amended and Restated Security Agreement"). In
addition, as further collateral for the Credit Facility (i) the Company
entered into a Pledge Agreement with Barnett Bank pursuant to which the
Company pledged as further collateral for the Loan Agreement, all of the
issued and outstanding capital stock of the Subsidiaries, and (ii) NIK and DTC
entered into a Collateral Assignment with Barnett Bank (the "Collateral
Assignment") pursuant to which they each granted a security interest in the
trademarks and patents owned by each entity. The Company agreed to cause any
newly formed or acquired subsidiaries to enter into an Amended and Restated
Security Agreement, a Collateral Assignment and a Guaranty, as appropriate, to
secure the Company's obligations to Barnett Bank under the Loan Agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA
FINANCIAL INFORMATION AND EXHIBITS
(a) and (b) Financial Statements and Pro Forma Financial
Information.
It is impracticable at this time for the Company to provide
the financial statements that may be required to be included herein. The
Company hereby undertakes to file such required financial statements and pro
forma financial information as soon as practicable, but in no event later than
June 21, 1997.
(c) Exhibits.
The following Exhibits are hereby filed as part of this
Current Report on Form 8-K.
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EXHIBIT DESCRIPTION
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2.1 Share Acquisition Agreement, dated as of April 7,1997, between Bodycote, AHL
and the Company.
2.2 Agreement for the Sale and Purchase of the Whole of the Issued Share Capital of
DSL Group Limited, dated April 16, 1997, between the Company, AHL, NatWest
Ventures Nominees Limited and Others and Martin Brayshaw.
10.1 Tax Deed, dated April 7, 1997, between the Company and Bodycote.
10.2 Form of Escrow Agreement, dated April 16, 1997, between the Company, the
Warrantors and Ashurst Morris Crisp.
10.3 Form of Registration Rights Agreement, dated April 16, 1997, between the
Company and the Vendors.
10.4 Amended and Restated Loan Agreement dated March 26, 1997, between the
Company and Barnett Bank.
10.5 Renewal Promissory Note, dated March 26, 1997, made by Armor Holdings, Inc.
in favor of Barnett Bank.
10.6 Form of Amended and Restated Security Agreement, dated March
26, 1997, made by each of the Company and the Subsidiaries
in favor of Barnett Bank.
10.7 Pledge Agreement, dated March 26, 1997, made by the Company in favor of
Barnett Bank.
10.8 Form of Collateral Assignment, dated March 26, 1997, made by each of Defense
Technology Corporation of America and NIK Public Safety, Inc. in favor of
Barnett Bank.
10.9 Amendment to Acceptance Credit Agreement, dated March 26, 1997, between the
Company and Barnett Bank.
10.10 Consent with respect to Guaranty of Payment, dated as of March 26, 1997, of NIK
Public Safety, Inc., Armor Holdings Properties, Inc. and Defense Technology
Corporation of America.
10.11 Form of Guaranty of Payment, dated November 14, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
ARMOR HOLDINGS, INC.
/s/ Jonathan M. Spiller
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Jonathan M. Spiller
President and Chief Executive Officer
Dated: April 22, 1997
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EXHIBIT INDEX
The following exhibits are filed herewith:
EXHIBIT DESCRIPTION
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2.1 Share Acquisition Agreement, dated as of April 7,1997, between Bodycote, AHL
and the Company.
2.2 Agreement for the Sale and Purchase of the Whole of the Issued Share Capital of
DSL Group Limited, dated April 16, 1997, between the Company, AHL, NatWest
Ventures Nominees Limited and Others and Martin Brayshaw.
10.1 Tax Deed, dated April 7, 1997, between the Company and Bodycote.
10.2 Form of Escrow Agreement, dated April 16, 1997, between the Company, the
Warrantors and Ashurst Morris Crisp.
10.3 Form of Registration Rights Agreement, dated April 16, 1997, between the
Company and the Vendors.
10.4 Amended and Restated Loan Agreement dated March 26, 1997, between the
Company and Barnett Bank.
10.5 Renewal Promissory Note, dated March 26, 1997, made by Armor Holdings, Inc.
in favor of Barnett Bank.
10.6 Form of Amended and Restated Security Agreement, dated March
26, 1997, made by each of the Company and the Subsidiaries
in favor of Barnett Bank.
10.7 Pledge Agreement, dated March 26, 1997, made by the Company in favor of
Barnett Bank.
10.8 Form of Collateral Assignment, dated March 26, 1997, made by each of Defense
Technology Corporation of America and NIK Public Safety, Inc. in favor of
Barnett Bank.
10.9 Amendment to Acceptance Credit Agreement, dated March 26, 1997, between the
Company and Barnett Bank.
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EXHIBIT DESCRIPTION
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10.10 Consent with respect to Guaranty of Payment, dated as of March 26, 1997, of NIK
Public Safety, Inc., Armor Holdings Properties, Inc. and Defense Technology
Corporation of America.
10.11 Form of Guaranty of Payment, dated November 14, 1996.
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