Exhibit 10.4
AMENDED AND RESTATED LOAN AGREEMENT
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THIS AGREEMENT is made this 26th day of March, 1997, between ARMOR
HOLDINGS, INC., a Delaware corporation (the "Borrower"), and BARNETT BANK, N.A.
(the "Bank").
RECITALS
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The Bank has provided a credit facility to the Borrower pursuant to a
Loan Agreement (as amended from time to time, the "Loan Agreement") dated
November 14, 1996, by and between the Borrower and the Bank. The Bank has
approved certain modifications to the credit facility, and the parties wish to
amend and restate the Loan Agreement to set forth their understanding
concerning the credit facility provided, or to be provided, by the Bank to the
Borrower.
NOW, THEREFORE, for good and valuable consideration, the parties
hereby amend and restate the Loan Agreement so that, from and after the date
hereof, the Loan Agreement shall read as follows:
ARTICLE I
BORROWING AND PAYMENT
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1.01 Revolving Credit Advances.
(a) The Bank hereby establishes in favor of the Borrower a
revolving line of credit. The Borrower shall be entitled to borrow,
repay and reborrow funds from the Bank in accordance with the terms
hereof so long as the total principal amount owed to the Bank under
the revolving line of credit does not exceed $20,000,000.00 (or such
lesser amount as is set forth herein) during the Revolving Period (as
defined herein). The Bank's obligation to make advances hereunder
shall terminate at the expiration of the Revolving Period.
(b) The Borrower's indebtedness under the revolving line of
credit shall be evidenced by a Renewal Promissory Note of even date
herewith (as amended, extended or renewed from time to time, the
"Note") executed by the Borrower in favor of the Bank in the original
principal amount of $20,000,000.00. The Note shall bear interest at
the rate set forth therein and shall be payable as set forth therein.
(c) The Bank shall make each advance under the revolving line of
credit upon notice from the Borrower to the Bank specifying the date
and amount of the advance. The Bank must receive the notice not later
than 12:00 noon (Eastern time) on the business day of the advance.
Alternatively, the Borrower may request advances by drawing checks on
a deposit account which is linked to the credit facility hereunder in
accordance with disbursement arrangements that are mutually
satisfactory
to the parties. The Bank will make each requested advance available to
the Borrower not later than the close of business on the business day
of the request by crediting the Borrower's account maintained with the
Bank in the amount of the advance if as of such time: (i) the Bank's
obligation to make advances hereunder has not terminated or expired;
(ii) a Default or Event of Default (as defined herein) has not
occurred; and (iii) all conditions to the advance set forth herein or
in any other Loan Documents (as defined herein) have been satisfied.
(d) For purposes hereof, the term "Revolving Period" shall have
the meaning ascribed thereto in the Note.
1.02 Acceptances. Subject to the terms set forth herein and in that
certain Acceptance Credit Agreement (as amended or restated from time to time,
the "Acceptance Agreement") dated November 14, 1996, between the Borrower and
the Bank, the Bank shall from time to time during the Revolving Period make
available to the Borrower an acceptance facility pursuant to which the Bank may
accept drafts drawn upon it by the Borrower (each, an "Acceptance"). The
aggregate face amount of outstanding Acceptances shall not at any one time
exceed $5,000,000 (or such lesser amount as is set forth herein). The Bank
shall not be required to create any Acceptance which has a maturity date after
the expiration of the Revolving Period. Upon the Bank's payment of an
Acceptance upon maturity thereof, the Bank may at its option obtain an advance
under the Note (without further notice to or consent of the Borrower) to
reimburse the Bank for such payment. If the Bank elects not to obtain an
advance under the Note or if credit in the amount of the Acceptance is not then
available under the Note, the Borrower shall immediately upon demand reimburse
the Bank for the face amount of each Acceptance upon the maturity thereof
together with such other amounts as may be due in connection therewith in
accordance with the Acceptance Agreement. The parties acknowledge that the Bank
may at any time sell, discount, rediscount or otherwise dispose of any
Acceptances. The Borrower shall pay the Bank such fees and costs in connection
with the Acceptances as are set forth in the Acceptance Agreement.
1.03 Letters of Credit. The Bank may from time to time, in its
discretion, issue letters of credit (the "Letters of Credit") for the
Borrower's account. For purposes of this Agreement, the amount of outstanding
Letters of Credit shall include: (a) amounts available for draws under
outstanding Letters of Credit (whether or not such draws are subject to
satisfaction of prior conditions); and (b) the amount of any draws under
Letters of Credit for which the Bank has not received reimbursement. The
Borrower shall request Letters of Credit by giving the Bank written notice of
each request at least two business days prior to the issuance of the Letter of
Credit. The Borrower shall, with such request, complete an application in form
acceptable to the Bank and execute such
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terms, conditions and reimbursement agreements (each, a "Reimbursement
Agreement") concerning the Letter of Credit as the Bank may require. No Letter
of Credit shall be issued which could be drawn on after the expiration of the
Revolving Period. In the event of a draw on a Letter of Credit, the Bank may at
its option obtain an advance under the Note (without further notice to or
consent of the Borrower) to reimburse the Bank for such draw. If the Bank
elects not to obtain an advance under the Note or if credit in the amount of
the draw is not then available under the Note, the Borrower shall immediately
upon demand reimburse the Bank for the amount of the draw together with
interest thereon and such other amounts as may be due under any applicable
Reimbursement Agreement. The Bank shall not in any event be required to issue a
Letter of Credit during the continuance of a Default or Event of Default
hereunder. The Borrower shall pay the Bank such issuance fees as the Bank may
establish with respect to each Letter of Credit. Nothing set forth herein or
otherwise shall obligate the Bank to issue Letters of Credit hereunder, and the
Bank may at any time in its discretion elect not to issue a Letter of Credit.
1.04 Loan Documents and Related Terms.
(a) The indebtedness (the "Indebtedness") now or hereafter
evidenced by the Note, the Acceptance Agreement and each Reimbursement
Agreement shall: (i) be secured by a first priority lien pursuant to
the Amended and Restated Security Agreement (as amended or restated
from time to time, the "Security Agreement") dated March 26, 1997,
executed by the Borrower and the Bank covering the Borrower's
inventory, accounts receivable, equipment, general intangibles and
other assets described therein; (ii) be secured by a first priority
lien pursuant to the Pledge Agreement (as amended or restated from
time to time, the "Pledge Agreement") dated March 26, 1997, executed
by the Borrower in favor of the Bank covering the securities and other
assets described therein; and (iii) be guaranteed by each of the
Borrower's Subsidiaries as of March 26, 1997, pursuant to guaranties
(collectively, as amended or restated from time to time, the
"Guaranties") executed by such Subsidiaries in favor of the Bank. The
Guaranties and the Indebtedness shall be secured by: (i) Amended and
Restated Security Agreements (collectively, as amended or restated
from time to time, the "Subsidiary Security Agreements") dated March
26, 1997, executed by each of the Borrower's Subsidiaries as of such
date in favor of the Bank covering the inventory, receivables and
other assets of such Subsidiaries described therein; (ii) Collateral
Assignments (collectively, as amended or restated from time to time,
the "Subsidiary Collateral Assignments") dated March 26, 1997,
executed by NIK Public Safety, Inc. ("NIK") and Defense Technology
Corporation of America ("DTC") as of such date in favor of the Bank
covering the patents, trademarks and other assets of such Subsidiaries
described therein; and (iii)
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Pledge Agreements (as amended or restated from time to time, the
"Subsidiary Pledge Agreements") executed by the Borrower's
Subsidiaries from time to time pursuant to subparagraph (b) (ii)
below. The Borrower and each such Subsidiary shall execute and deliver
such financing statements and other documents as the Bank may
reasonably request to perfect and continue perfection of the Bank's
liens. The Borrower has executed and delivered an Environmental
Agreement (as amended or restated from time to time the "Environmental
Agreement") dated November 14, 1996, in favor of the Bank. If at any
time hereafter the Borrower or any Included Subsidiary (as defined
herein), in addition to NIK and DTC, acquires or holds any patents or
trademarks, or applications therefor, that are filed or registered
with the United States Patent and Trademark Office, or any other
governing agency or body, then the Borrower or such Subsidiary, as the
case may be, shall execute a collateral assignment (each, as amended
or restated from time to time, a "Collateral Assignment") covering the
same in form substantially similar to the Subsidiary Collateral
Assignments. The Guaranties, the Subsidiary Security Agreements, the
Subsidiary Collateral Assignments and the Subsidiary Pledge Agreements
shall include, in addition to the Guaranties, Subsidiary Security
Agreements, Subsidiary Collateral Assignments, Collateral Assignments
and Subsidiary Pledge Agreements contemplated in this subparagraph,
all guaranties, security agreements , collateral assignments and
pledge agreements, as the case may be, now or hereafter executed by
any Subsidiaries pursuant to subparagraph (b) below.
(b) For purposes of this Agreement, the following terms shall
have the following meanings:
(i) "Loan Documents" shall mean and include this Agreement
(as amended from time to time), the Note, the Acceptance
Agreement, the Reimbursement Agreements, the Acceptances, the
Letters of Credit, the Security Agreement, the Collateral
Assignments, the Pledge Agreement, the Guaranties, the Subsidiary
Security Agreements, the Subsidiary Collateral Assignments, the
Subsidiary Pledge Agreements, the Environmental Agreement and all
documents related to the foregoing documents.
(ii) "Included Subsidiary" shall mean and include each
Subsidiary that has satisfied the following conditions:
(aa) The Subsidiary has granted the Bank a perfected
security interest in its inventory, equipment, accounts
receivable, general intangibles, patents and trademarks
subject only to
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such prior liens and claims as the Bank, in its discretion,
may approve; and
(bb) The Subsidiary has executed the following
documents in favor of the Bank substantially in the form of
such documents executed by the Borrower's Subsidiaries as of
March 26, 1997: (1) Guaranty of Payment; (2) Security
Agreement; (3) Collateral Assignment; (4) Waiver of Jury
Trial; and (5) financing statements (conforming in each case
to the requirements of the applicable jurisdictions where
such statements will be filed). Each such document shall be
deemed to be a Loan Document hereunder; and
(cc) The Bank holds a perfected first priority lien on
all of the issued and outstanding shares of capital stock of
the Subsidiary pursuant to the Pledge Agreement or, if
applicable, pursuant to a pledge agreement substantially
similar to the Pledge Agreement executed by the owner of
such shares in favor of the Bank.
(iii) "Subsidiary" shall mean and include any partnership,
corporation or other entity if the Borrower now or hereafter
directly or indirectly owns or controls a majority of the equity
or voting interests in such partnership, corporation or entity.
(c) For purposes of this Agreement, the plural shall include the
singular, and vice versa, as the context requires.
1.05 Borrowing Limitations. Notwithstanding any contrary provision set
forth herein or in any other Loan Document, the Borrower agrees that the
outstanding principal balance of the Note, when combined with the aggregate
face amount of outstanding Letters of Credit and Acceptances, shall not at any
time exceed $20,000,000. The Borrower shall not be entitled to obtain any
advance under the Note or other credit hereunder if the advance or credit would
result in a violation of the lending limits set forth herein. The outstanding
principal balance of the Note, together with the aggregate face amount of
outstanding Letters of Credit and Acceptances, is referred to herein as the
"Outstanding Credit."
1.06 Facility Fees. The Borrower shall pay the Bank a fee on the daily
average unused amount of the revolving line of credit under the Note for a
period commencing on November 14, 1996, and continuing until the expiration or
termination of the Revolving Period. The fee shall accrue at the rate of
one-eighth of one percent (0.125%) per annum calculated on the basis of a
360-day year (based on actual days elapsed). The Borrower shall pay the fee
quarterly in arrears: (a) within 15 days after the end of each
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calendar quarter; and (b) on the expiration or termination of the Revolving
Period. In calculating the fee, the amount of outstanding Acceptances shall be
treated as amounts outstanding under the Note.
ARTICLE II
CONDITIONS
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2.01 Conditions to Initial Advance. The obligation of the Bank to make
an initial extension of credit hereunder is subject, without limitation, to
satisfaction of the following conditions precedent:
(a) The Bank shall have received on or before March 26, 1997, and
the date of such extension of credit in form reasonably satisfactory
to it: (i) the duly executed Loan Documents; (ii) such evidence of
corporate authorization from the Borrower and each Subsidiary as the
Bank may reasonably require; (iii) good standing certificates
indicating that the Borrower and each Subsidiary are in good standing
in their respective states of incorporation and in any other states
where they are required to qualify to do business; and (iv) certified
articles of incorporation and bylaws of the Borrower and each
Subsidiary.
(b) The Bank shall have received on or before March 26, 1997,
from attorneys for the Borrower reasonably acceptable to the Bank, an
opinion addressed to the Bank in form and substance reasonably
satisfactory to the Bank.
2.02 Conditions to Advances. The obligation of the Bank to make any
advances hereunder or under the Note, or to create any Acceptances, is subject,
without limitation, to satisfaction of the following additional conditions
precedent:
(a) The representations and warranties of the Borrower and each
Subsidiary set forth in this Agreement and in the Loan Documents shall
be true and correct in all material respects on and as of the date of
each such advance or extension of credit.
(b) On the date of each such advance or extension of credit, the
Borrower shall be in compliance with all the material terms and
provisions set forth in this Agreement on its part to be observed or
performed, and no Default or Event of Default shall be continuing
hereunder.
2.03 Other Documents. The Bank shall have received on or before the
date hereof or the date of any advance or credit extension hereunder such other
documents or items as the Bank may reasonably request.
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ARTICLE III
AFFIRMATIVE COVENANTS
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The Borrower as to itself and as to any Subsidiaries covenants and
agrees that from the date hereof:
3.01 Financial Statements of the Borrower. The Borrower will deliver
to the Bank the following:
(a) Within forty-five (45) days after the end of each quarter of
the Borrower's fiscal year (other than the last quarter of each fiscal
year): (i) a balance sheet, income statement and statement of cash
flows for the Borrower and its Subsidiaries on a consolidated basis as
of the end of and for such period in reasonable detail certified by an
authorized officer of the Borrower; and (ii) a balance sheet and
income statement for each of the Borrower and its Subsidiaries on a
stand alone basis for each such entity as of the end of and for such
period in reasonable detail certified by an authorized officer of the
Borrower.
(b) Within ninety (90) days after the end of each fiscal year of
the Borrower, a balance sheet, income statement and statement of cash
flows for the Borrower and its Subsidiaries on a consolidated basis as
of the end of and for such period in reasonable detail, audited and
certified by independent certified public accountants of recognized
national standing, whose opinion thereon shall be reasonably
satisfactory to the Bank in scope and substance.
(c) Within fifteen (15) days after the end of each calendar
quarter, accounts receivable aging schedules and inventory status
reports for the Borrower and each Subsidiary as of the end of such
quarter certified to the Bank by an authorized officer of the
Borrower.
(d) Promptly upon receipt thereof, copies of all management
letters submitted to the Borrower by independent certified public
accountants in connection with each annual or interim audit of the
books of the Borrower by such accountants.
(e) With each delivery required under subparagraphs (a) and (b)
above, a compliance certificate in form approved by the Bank executed
by an executive officer of the Borrower demonstrating compliance with
the Loan Documents.
(f) Promptly upon the occurrence of any Default or Event of
Default, a notice thereof, specifying the nature thereof.
(g) Promptly upon becoming available, a copy of all: (i) reports,
registration statements and other materials filed
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with the Securities and Exchange Commission; (ii) all offering
circulars made in connection with any distribution or sale of the
Borrower's securities; and (iii) all notices, proxy statements and
other materials mailed or distributed to the Borrower's shareholders.
(h) Such other material information as the Bank may from time to
time reasonably request.
3.02 Financial Information. All financial information submitted by the
Borrower or any Subsidiary hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect as of the time that such
financial statements are prepared. The Borrower and its Subsidiaries will
maintain books of account in accordance with generally accepted accounting
principles.
3.03 Taxes and Other Charges. The Borrower and the Subsidiaries, as
applicable, will pay and discharge or cause to be paid and discharged all
taxes, charges, liabilities or claims of any type at any time assessed against
or incurred by the Borrower or any Subsidiary, or which could become a lien
against the Borrower or any Subsidiary or any of their properties. Nothing in
this subsection shall require the payment of any such sum if the Borrower by
appropriate proceedings contests the same in good faith and so long as the
Borrower, if required by generally accepted accounting principles, creates a
funded reserve in an amount required by generally accepted accounting
principles.
3.04 Insurance. The Borrower and its Subsidiaries will maintain
adequate insurance with responsible insurers with coverage normally obtained by
businesses similar to that of the Borrower or its Subsidiaries, but covering at
least: (i) damage to physical property from fire and other hazards; (ii)
liability on account of injury to persons; (iii) product liability risks; and
(iv) insurance against theft, forgery or embezzlement or other illegal acts of
officers or employees in reasonable amounts. If requested by the Bank, the
Borrower will provide the Bank, within ninety (90) days after the end of each
fiscal year, a certificate of the Borrower specifying the types and amounts of
insurance in force and the insurers of each risk covered by such insurance.
3.05 Maintenance of Corporate Existence. The Borrower and its
Subsidiaries will do or cause to be done all things necessary to preserve and
keep in full force and effect their existence, franchises, rights and
privileges as corporations under the laws of their states of incorporation and
any other jurisdiction where the conduct of their business or the ownership of
their properties would require them to be qualified to do business (except
where the failure to be so qualified would not have a material adverse effect
on the Borrower and its Subsidiaries, taken as a whole).
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3.06 Use of Proceeds. The funds borrowed under the Note shall be used
for working capital purposes, for Permitted Acquisitions and for such other
purposes as the Bank may approve from time to time.
3.07 Notice of Litigation. Promptly after the commencement thereof,
the Borrower shall furnish the Bank notice of all material actions, suits and
proceedings before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, affecting the Borrower
or any Subsidiary.
3.08 Notice of ERISA Requirements. As soon as possible and in any
event within thirty (30) days after the Borrower knows or has reason to know
that any reportable event, accumulated funding deficiency, prohibited
transaction, disqualification or termination (as such terms are defined in the
Employee Retirement Income Security Act of 1974, as amended) with respect to
any Plan has occurred, the Borrower shall furnish the Bank with the statement
of the chief financial officer of the Borrower setting forth details as to such
event and the action which the Borrower proposes to take with respect thereto,
together with a copy of the notice of such event to the Pension Benefit
Guaranty Corporation. For purposes of this Agreement, "Plan" shall mean any
employee benefit plan maintained in whole or in part for employees of the
Borrower or its Subsidiaries which is subject to the provisions of Title IV of
the Employee Retirement Income Security Act of 1974, as amended from time to
time, or subject to the minimum funding standards under Section 412 of the
Internal Revenue Code of 1986, as amended from time to time.
3.09 Other Events. The Borrower shall promptly notify the Bank of any
material default under or violation of any material agreement, law or
regulation to which the Borrower or any Subsidiary is a party or by which it is
bound. The Borrower and its Subsidiaries shall promptly perform all of their
material obligations under any material agreements to which any of them is a
party, and each of them shall use its best efforts to ensure compliance by
other parties in all material respects with such agreements.
3.10 Compliance with Laws. The Borrower and its Subsidiaries shall
comply in all material respects at all times with all statutes, regulations,
orders and judgments to which they, or any of them, are subject.
3.11 Access. The Bank (by any of its officers, employees or agents)
shall have the right, exercisable as frequently as the Bank reasonably
determines to be appropriate, to inspect and make extracts from all of the
records, files and books of account of the Borrower or its Subsidiaries. All
reasonable costs, fees and expenses incurred by the Bank, or for which the Bank
has become obligated, in connection with any such inspection, and verification
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shall be payable by the Borrower to the Bank. Notwithstanding the foregoing
provisions of this Section, the Bank shall not exercise its right of inspection
hereunder more than once per calendar year for so long as no Event of Default
is continuing hereunder.
3.12 Deposits. The Borrower and the Included Subsidiaries shall
maintain their primary operating accounts with the Bank (except, however, that
the Borrower and its Included Subsidiaries shall be entitled to maintain
deposit accounts with other banks in market areas where the Bank does not
maintain a banking office to the extent reasonably necessary to support the
operations of the Borrower and its Subsidiaries in those market areas).
3.13 Landlord's Agreements. The Borrower and the Included Subsidiaries
shall at all times use their best efforts to obtain and maintain in effect
subordination and access agreements executed by any lessor or sublessor who
holds any interest in premises utilized by the Borrower or any Included
Subsidiary if the aggregate value of property of the Borrower and its Included
Subsidiaries located thereon exceeds $100,000 (except, however, that no such
agreement shall be required prior to December 31, 1997, for the premises
located at 191 Nassau Place Road, Yulee, Florida). The agreements shall be in
form and substance reasonably satisfactory to the Bank.
3.14 Further Assurances. If at any time counsel for the Bank is of the
reasonable opinion that any portion of the Outstanding Credit is not secured by
a first priority lien on the property described in the Security Agreement, the
Collateral Assignment and the Pledge Agreement, or as contemplated herein,
subject only to exceptions described in the Security Agreement, the Collateral
Assignment and the Pledge Agreement, and has so advised the Bank in writing,
then the Borrower shall, after written notice of such opinion from the Bank, do
all things and matters necessary to assure to the reasonable satisfaction of
counsel for the Bank that any part of the Outstanding Credit is secured or will
be secured as contemplated by this Agreement and the Security Agreement, the
Collateral Assignment and the Pledge Agreement.
ARTICLE IV
NEGATIVE COVENANTS
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The Borrower and its Subsidiaries shall comply with the following
covenants during the term hereof:
4.01 Liens. Neither the Borrower nor any Subsidiary will create,
incur, assume or suffer to exist any mortgage, pledge, lien, charge or other
encumbrance of any nature whatsoever on any of the assets of the Borrower or
any Subsidiary now or hereafter owned, or enter into or suffer to exist any
conditional sales contracts or other title retention agreements except for
Permitted Liens. For purposes hereof, Permitted Liens shall mean:
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(a) liens in favor of the Bank;
(b) existing liens described on Exhibit "C" attached hereto
(together with any replacement lien arising out of any extension,
renewal or refinancing of any such lien provided that: (i) the
indebtedness secured by each such replacement lien shall not exceed
the indebtedness secured by the lien theretofore existing; and (ii)
such replacement lien attaches only to the same property theretofore
securing the indebtedness so extended, renewed or refinanced);
(c) liens on equipment to secure indebtedness permitted hereunder
to finance the acquisition thereof;
(d) the lien of ad valorem and other taxes and assessments not
yet due and payable;
(e) liens arising out of pledges, deposits, or other amounts owed
under worker's compensation laws, unemployment insurance, old age
pensions or other social security or retirement benefits, or similar
legislation, or to secure payment of premiums for insurance purchased
in the usual course of operations or in connection with self-insurance
or to secure the performance of bids, tenders or trade contracts
incurred in the ordinary course of operations and not in connection
with the borrowing of money;
(f) deposits for indemnity bonds and other bonds required in the
ordinary course of the Borrower's or any Subsidiary's business, and
not in connection with borrowed money;
(g) inchoate materialmen's, suppliers', operators', mechanics',
workmen's, repairmen's, employees', carriers', warehousemen's or
attorneys' liens or other like statutory liens arising in the ordinary
course of business and securing obligations (i) which are not
delinquent or (ii) the amounts or validity of which are being
contested in good faith as to which the Borrower has established
appropriate funded reserves to the extent required by generally
accepted accounting principles;
(h) deposits made by the Borrower or any Subsidiary in the
ordinary course of business;
(i) liens of financial institutions arising in the ordinary
process of collection of instruments;
(j) statutory landlord's liens, and contractual landlord's liens
created prior to this date (or in the case of any Subsidiary acquired
pursuant to a Permitted Acquisition,
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prior to the date of such acquisition) provided that amounts secured
thereby are not past due by more than 30 days; and
(k) liens securing Permitted Acquisition Debt (as defined herein)
so long as such liens do not encumber any assets of the Borrower or
any Included Subsidiary.
4.02 Obligations.
(a) Neither the Borrower nor any Subsidiary is or will become
directly or indirectly obligated in any way for any obligation for
borrowed money except for Permitted Obligations. For purposes hereof,
Permitted Obligations shall mean:
(i) any and all obligations now or hereafter owed by the
Borrower or any Subsidiary to the Bank;
(ii) indebtedness incurred solely to finance the acquisition
of equipment in the ordinary course of business so long as no
Default or Event of Default has occurred and is continuing
hereunder and so long as such indebtedness will not result in a
default in the financial covenants hereunder: (aa) at the time
such indebtedness is incurred after giving effect to such
indebtedness; and (bb) on a projected basis based upon reasonable
projections for the term of such indebtedness after giving effect
to such indebtedness;
(iii) customer deposits in the ordinary course of business;
(iv) obligations described on Exhibit "D" attached hereto;
(v) obligations subordinated to the Indebtedness pursuant to
subordination agreements reasonably acceptable to the Bank;
(vi) Permitted Acquisition Debt (as defined herein);
(vii) Obligations resulting from loans and advances
permitted under Section 4.04 hereof; and
(viii) Obligations of the Borrower or any Subsidiary in an
aggregate amount not exceeding $800,000 incurred in connection
with any governmental assistance received by the Borrower or any
such Subsidiary in connection with the construction of a
headquarters facility at the Jacksonville International Tradeport
in Jacksonville, Florida.
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(b) Neither the Borrower nor any Subsidiary shall without the
Bank's prior written consent: (i) guarantee or purchase any
obligations of any other person or entity (except pursuant to the
Guaranties and except that any such entity shall be entitled to
guarantee any Permitted Obligations of the Borrower or any other
Subsidiary); (ii) enter into any credit support, financial
maintenance, credit enhancement or similar arrangement in favor of any
person or entity; or (iii) enter into any other transaction which is
intended to assure performance of the obligations of any other person
or entity.
(c) For purposes hereof, "Permitted Acquisition Debt" shall mean
any indebtedness incurred by the Borrower or any of its Subsidiaries
to finance any Permitted Acquisition (as defined in Section 4.04
hereof) or assumed by the Borrower or any such Subsidiary in
connection with any Permitted Acquisition.
4.03 Merger; Consolidation; Sale of Substantial Assets. Neither the
Borrower nor any Subsidiary will: (a) merge into, consolidate with, or sell or
transfer all or a substantial part of its assets to, any other person or
entity; (b) sell or transfer any stock or equity interest in any Subsidiary to
any other person or entity (except for transfers to the Borrower or any other
wholly owned Included Subsidiary); (c) take any action which would reduce the
ownership or voting interest of the Borrower and its Subsidiaries in any
Subsidiary; or (d) pledge or encumber any stock of any Subsidiary (except for
pledges in favor of the Bank). Notwithstanding the foregoing: (a) each of the
Borrower and its Subsidiaries shall be entitled to sell or transfer assets to
wholly owned Included Subsidiaries; and (b) each of the Borrower's Subsidiaries
shall be entitled to merge into other corporations in order to effect Permitted
Acquisitions (as defined herein) (except, however, that if the merging
corporation is an Included Subsidiary prior tho the merger, the surviving
corporation shall also be an Included Subsidiary immediately after the
consummation of the merger).
4.04 Loans, Investments and Acquisitions.
(a) Neither the Borrower nor any Subsidiary will purchase any
stock, securities or evidence of indebtedness, or make or permit to
exist any loans or advances to, or make any investment or acquire any
interest in, any other corporation, partnership or other entity or
person (except, however, that the Borrower and its Subsidiaries shall
be entitled to make Permitted Acquisitions in accordance with the
terms hereof). Neither the Borrower nor any Subsidiary shall, without
the Bank's prior written consent, enter into partnership or joint
venture agreements with any other person or entity. Notwithstanding
the foregoing: (i) the Borrower and its Subsidiaries
13
shall be entitled to extend credit and make advances to wholly owned
Included Subsidiaries; (ii) the Borrower and its Subsidiaries shall be
entitled to extend credit and make advances to Subsidiaries, other
than wholly owned Included Subsidiaries, so long as the total
outstanding amount of such credit and advances, on a combined basis,
does not exceed $250,000 at any one time; (iii) the Borrower and its
Subsidiaries may extend credit and make advances in the ordinary
course of business, in addition to credit and advances permitted under
the foregoing subparagraphs (i) and (ii), so long as the total
outstanding amount of such credit and advances, on a combined basis
under this subparagraph (iii), does not exceed $250,000 at any time;
(iv) the Borrower and its Subsidiaries may extend trade credit to
purchasers in the ordinary course of business in connection with the
sale of inventory to such purchasers; (v) the Borrower and its
Subsidiaries may invest in direct obligations of the United States
government and time certificates of deposit of banks maturing within
one year from the date of the acquisition thereof; and (vi) the
Borrower and its Subsidiaries may invest in Eligible Securities. For
purposes hereof, "Eligible Securities" shall mean: (i) government
bonds rated BBB or better by Standard & Poor's Corporation ("S&P") or
Baa2 or better by Moody's Investors Service, Inc. ("Moody's"); (ii)
commercial paper rated BBB or better by S&P or Baa2 or better by
Moody's; (iii) corporate bonds or debt rated BBB or better by S&P or
Baa2 or better by Moody's; (iv) preferred stock rated BBB or better by
S&P or Baa2 or better by Moody's; and (v) common stock of any publicly
traded corporation. Notwithstanding anything to the contrary in this
Section 4.04(a), the limitations of this Section 4.04(a) shall not be
applicable in connection with the Borrower's or any Subsidiary's
formation and funding of a newly created Subsidiary for the purposes
of consummating a Permitted Acquisition in accordance with the terms
of this Agreement.
(b) The Borrower and its Subsidiaries shall be entitled to
acquire businesses through stock acquisitions, asset purchases or
mergers upon satisfaction of the following conditions:
(i) Each such acquisition shall be made on arms length
terms. The Borrower or one of its Subsidiaries shall, after
consummation of the acquisition, own and control more than 50% of
the outstanding equity and voting rights in any corporation,
partnership or other entity acquired by the Borrower or any such
Subsidiary in connection with the acquisition.
(ii) The aggregate acquisition consideration payable by the
Borrower and its Subsidiaries for any acquisition shall not
exceed $10,000,000 (except, however, that the
14
Borrower and its Subsidiaries shall be entitled to make
acquisitions for acquisition consideration in excess of such
amount with the Bank's prior written consent). The acquisition
consideration payable in connection with any such acquisition
shall mean the sum of the following items (without duplication):
(aa) all cash paid by the Borrower and its Subsidiaries in
connection with the acquisition; (bb) the fair market value of
all property transferred (including, without limitation, the fair
market value of all securities issued) by the Borrower and its
Subsidiaries in connection with the acquisition; (cc) the
principal amount of all indebtedness payable by the Borrower and
its Subsidiaries to the sellers in connection with the
acquisition; (dd) the principal amount of all obligations assumed
by the Borrower and its Subsidiaries in connection with any asset
acquisition; and (ee) all amounts paid or payable under or with
respect to covenants not to compete in connection with the
acquisition.
(iii) The acquisition will not result in a default under the
financial or other covenants hereunder: (aa) at the time such
acquisition is consummated after giving effect to such
acquisition; and (bb) on a projected basis based upon reasonable
projections after giving effect to such acquisition. In addition,
the acquisition will not result in a default or event of default
under any Guaranty, any Subsidiary Security Agreement or any
Subsidiary Collateral Assignment.
(c) For purposes of this Agreement, the term "Permitted
Acquisition" shall mean any acquisition made in accordance with the
foregoing subparagraph (b).
(d) The Borrower shall, as promptly as practicable after
consummation of any Permitted Acquisition, take all such action as may
be required to cause any Subsidiary acquired in connection therewith,
or resulting therefrom, to become an Included Subsidiary hereunder
(except to the extent that any obligations incurred or assumed in
connection with the acquisition prohibit such action).
4.05 Sale or Pledge of Property. Neither the Borrower nor any
Subsidiary will sell, lease or otherwise dispose of or transfer any of its
interests in any of its assets except in the ordinary course of business
(except for transfers permitted in Section 4.03 hereof).
4.06 Dividends and Distributions. Neither the Borrower nor any
Subsidiary which is not wholly owned by the Borrower will pay or declare any
dividends on or make any other distribution with respect to any class of its
stock whether in cash or in property.
15
In addition, neither the Borrower nor any Subsidiary shall redeem, purchase or
otherwise acquire any stock or any outstanding securities of the Borrower or
any Subsidiary. Notwithstanding the foregoing: (a) the Borrower may pay a stock
dividend or declare a stock split which does not result in a reduction in the
total value of the Borrower's stockholders' equity determined immediately prior
to the stock dividend or stock split; and (b) each of the Borrower's
Subsidiaries may pay dividends and distributions to the Borrower or any
Included Subsidiary.
4.07 Pension Plan Funding Deficiency. Neither the Borrower nor any
Subsidiary shall incur or suffer to exist any material accumulated funding
deficiency within the meaning of the Employee Retirement Income Security Act of
1974 or incur any material liability to the Pension Benefit Guaranty
Corporation (or any successor) established thereunder in connection with any
Plan.
4.08 Transactions with Affiliates. The Borrower and its Subsidiaries
shall not directly or indirectly enter into any transaction with any affiliate
other than in the ordinary course and pursuant to the reasonable business
requirements of the Borrower or such Subsidiaries. Any such transaction shall
be upon fair and reasonable terms and provisions no less favorable to the
Borrower or any such Subsidiary than it could have obtained in a comparable
arm's-length transaction with a person who is not an affiliate of the Borrower
or such Subsidiary.
4.09 Financial Covenants. The Borrower and its Subsidiaries shall
comply at all times with the following financial covenants. All accounting
terms not specifically defined herein shall be construed in accordance with
generally accepted accounting principles as in effect at the time in question
on a basis consistently applied. All financial covenants set forth herein shall
be calculated on a consolidated basis for the Borrower and its Subsidiaries.
(a) The Borrower's Capitalization Ratio shall not at any time
exceed: (i) .50 to 1 commencing on March 26, 1997, and continuing
through December 26, 1997; (ii) .41 to 1 commencing on December 27,
1997, and continuing through December 25, 1998; and (iii) .33 to 1
from and after December 26, 1998. The Borrower's Capitalization Ratio
shall mean: (i) the Borrower's Funded Debt; divided by (ii) the sum of
the Borrower's Funded Debt plus its Total Equity. For purposes hereof,
the following terms shall have the following meanings:
(i) "Funded Debt" shall mean: (aa) all obligations of the
Borrower to the Bank under the Loan Documents; plus (bb) all
other indebtedness of the Borrower or any Subsidiary for borrowed
money other than Short Term Indebtedness. "Short Term
Indebtedness" shall mean all indebtedness for borrowed money
(other than the
16
Indebtedness) that matures not more than one year from the date
of incurrence thereof and that is not extendible or renewable at
the sole option of the obligor for a period in excess of one
year. Notwithstanding the foregoing, Short Term Indebtedness
shall not in any event include: (aa) indebtedness for borrowed
money for which the Borrower or any Subsidiary may become liable
as a result of any Permitted Acquisition (including, without
limitation, any indebtedness of the acquired entity for which the
Borrower or any Subsidiary may become liable); or (bb)
indebtedness (including, without limitation, seller financing)
incurred to finance Permitted Acquisitions.
(ii) "Total Equity" shall mean the Borrower's consolidated
stockholders equity determined in accordance with generally
accepted accounting principles as in effect at the time in
question on a basis consistently applied. "Total Equity" shall
not include the value of any stock issued by the Borrower in
connection with any Permitted Acquisition with respect to which
the Borrower or any Subsidiary has provided price guarantees or
similar value assurances.
(b) The Borrower's Debt Ratio shall be calculated as of the first
day of each fiscal quarter of the Borrower and shall not exceed 3.0 to
1 as of any such date. The Debt Ratio shall mean: (i) the Borrower's
Funded Debt as of each calculation date; divided by (ii) the
Borrower's Adjusted Earnings as of such date. For purposes hereof, the
Borrower's Adjusted Earnings shall mean:
(i) For all calculations made on or before December 28,
1997: (aa) the Borrower's and all Subsidiaries' earnings before
interest, taxes, depreciation and amortization (including,
without limitation, any income tax credits utilized) (less the
amount or value of any contingent payments made by the Borrower
or any Subsidiary in connection with any acquisition) on a
consolidated basis for the immediately preceding fiscal quarter;
multiplied by (bb) four.
(ii) For all calculations made after December 28, 1997, the
Borrower's and all Subsidiaries' earnings before interest, taxes,
depreciation and amortization (including, without limitation, any
income tax credits utilized) (less the amount or value of any
contingent payments made by the Borrower or any Subsidiary in
connection with any acquisition) on a consolidated basis for the
four preceding fiscal quarters.
17
(c) The Borrower's Interest Coverage Ratio shall be the ratio of:
(i) the Borrower's and all Subsidiaries' earnings before interest,
taxes, depreciation and amortization (including, without limitation,
any income tax credits utilized) (less the amount or value of any
contingent payments made by the Borrower or any Subsidiary in
connection with any acquisition) on a consolidated basis for the four
preceding fiscal quarters to (ii) the sum of all interest payable by
the Borrower or any such subsidiary during such fiscal quarters. The
Interest Coverage Ratio shall be computed on the first day of each
fiscal quarter of the Borrower, so long as the Indebtedness to the
Bank is outstanding and shall not be less than 3.0 to 1.
(d) The ratio of the Borrower's consolidated current assets to
consolidated current liabilities shall at no time be less than 2.0 to
1. "Current assets" shall mean the aggregate amount of all assets of
an entity that may properly be classified as current assets in
accordance with generally accepted accounting principles, not
including, however, (i) any deferred assets, (ii) common stock of any
publicly traded corporation if the Borrower and its Subsidiaries own
in the aggregate more than 5% of such corporation's issued and
outstanding shares of common stock, and (iii) any amounts owed to such
entity by officers, directors, employees, stockholders or subsidiaries
or other affiliates of such entity. "Current liabilities" shall mean
all indebtedness of an entity payable on demand or within a period of
one year from the date of the creation thereof (excluding any
indebtedness renewable or extendible at the option of the debtor,
absolutely or conditionally, for a period or periods extending to more
than one year after such date, whether or not actually so renewed or
extended) plus current maturities of long term debt.
(e) The Borrower and the Subsidiaries shall not allow the ratio
of Total Liabilities to Total Equity for the Borrower and its
Subsidiaries to exceed 1.2 to 1. For purposes of this Agreement,
"Total Liabilities" shall mean: (i) any indebtedness or liability for
borrowed money and any other indebtedness or liability evidenced by
notes, debentures, bonds or similar obligations; and (ii) all other
obligations which under generally accepted accounting principles are
shown or should be shown on the balance sheet as liabilities.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants, and so long as this Agreement is
in effect or any part of the Indebtedness remains unpaid, shall continue to
represent and warrant at all times, that:
18
5.01 The Borrower and Subsidiaries. The Borrower and the Subsidiaries
are corporations duly incorporated and validly existing under and by virtue of
their respective states of incorporation. Each is duly licensed and qualified
in all other states and jurisdictions wherein the nature of the business
transacted by it or the ownership of its properties makes such licensing or
qualification as a foreign corporation necessary, if any except where the
failure to be so qualified would not have a material adverse effect on the
Borrower and its Subsidiaries taken as a whole. Each of the Borrower and its
Subsidiaries holds in full force and effect all material permits, licenses and
franchises necessary for it to carry out its operations in conformity with all
applicable laws and regulations.
5.02 Authorization, Conflicts and Validity. The execution and delivery
of this Agreement and each of the other Loan Documents to which the Borrower is
or will be a party and the performance by the Borrower of all of its
obligations thereunder: (a) have been duly authorized by all requisite
corporate action; (b) will not violate or be in conflict with (i) any material
provision of applicable law (including, without limitation, any applicable
usury or similar law); (ii) any material order, rule or regulation of any court
or other governmental authority; (iii) any material provision of its
certificate of incorporation or bylaws, including any amendments thereto, or
any resolution with continuing effect adopted by its Board of Directors or
shareholders; or (iv) any material provision of any shareholders' agreement or
trust respecting securities of its issue or related rights; (c) will not
violate, be in conflict with, result in a breach of or constitute a default
(with or without the giving of notice or the passage of time or both) under any
material instrument, indenture, agreement or other obligation to which it is a
party or by which it or any of its assets and properties is or may be bound or
subject; and (d) except as specifically contemplated by this Agreement or any
other Loan Documents, will not result in the creation or imposition of any
lien, charge or encumbrance of any nature upon any of its assets and
properties. The Loan Documents to which the Borrower is or will be a party when
executed and delivered will be legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms and provisions.
5.03 Consents. Except as otherwise disclosed on Schedule 5.03 attached
hereto, no consent, approval or authorization of, or registration, declaration
or filing with, any governmental authority or other person (including, without
limitation, the shareholders of the Borrower) is required as a condition
precedent, concurrent or subsequent to or in connection with the due and valid
execution, delivery and performance by the Borrower of this Agreement or any
other Loan Document to which it is or will be a party, or the legality,
validity, binding effect or enforceability of any of the respective
representations, warranties, covenants and other terms and provisions thereof.
Each franchise, license,
19
certificate, authorization, approval or consent from any governmental authority
material to the present conduct of the business and operations of the Borrower
or its Subsidiaries, or required for the acquisition, ownership, improvement,
operation or maintenance by it of any material portion of the assets and
properties it now owns, operates or maintains, has been obtained and validly
granted, is in full force and effect and constitutes valid and sufficient
authorization therefor.
5.04 Financial Statements. The Borrower has heretofore made available
to the Bank financial statements as of and for the fiscal year ending December
28, 1996. Those financial statements fairly present the financial condition of
the Borrower and the Subsidiaries taken as a whole and the results of their
operations as of the dates thereof. Those financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except for changes, if
any, stated in the related accountants' reports.
5.05 Changes in Financial Condition. Since December 28, 1996, there
has been no material adverse change in the assets or the financial condition of
the Borrower or its Subsidiaries taken as a whole from that set forth or
reflected in the financial statements as of that date. The Borrower and its
Subsidiaries are current in the payment of all of their debts and performance
of all of their material obligations.
5.06 Legal or Administrative Proceedings. Except as otherwise
disclosed on Schedule 5.06 attached hereto, there are no material actions,
suits, investigations or proceedings by any person or entity pending or to the
best knowledge of the Borrower threatened against the Borrower or any
Subsidiary or to which they are a party involving the possibility of any
judgment or liability not fully covered by insurance or by adequate reserves
set up on the books of the Borrower or the Subsidiaries.
5.07 Assets. Except as otherwise disclosed on Schedule 5.07 attached
hereto, the Borrower and the Subsidiaries have good, marketable title to all of
their assets reflected in the financial statements dated December 28, 1996, and
such assets are free and clear of all liens, charges and encumbrances except as
shown on those financial statements.
5.08 Losses. Since December 28, 1996, no material loss, damage,
destruction or taking of any of the physical properties of the Borrower or any
of its Subsidiaries has occurred which has not been fully restored or replaced,
or which is not fully covered by insurance, and neither the property nor
business of the Borrower and its Subsidiaries, taken as a whole, has been
adversely affected in any substantial way as the result of any accident,
strike, lockout, combination of workmen, embargo, riot, war, act of God or
20
public enemy. Neither the Borrower, any Subsidiary nor any of their officers
are aware of any material adverse fact concerning the conditions or future
prospects of the Borrower or any Subsidiary which has not been fully disclosed
in writing to the Bank.
5.09 Corporate Restrictions. Except as otherwise disclosed on Schedule
5.09 attached hereto, neither the Borrower nor any Subsidiary is a party to any
contract or subject to any charter or other corporate restriction which would
materially and adversely affect its property or business, or its ability to
perform its obligations under the Loan Documents.
5.10 Taxes. The Borrower and the Subsidiaries have filed all federal
and state tax returns which are required to be filed, and have paid all taxes
as shown on the returns and on all assessments received by them to the extent
that the taxes have become due. Proper and accurate amounts have been withheld
by the Borrower and its Subsidiaries from their respective employees for all
periods in full and complete compliance with the tax, social security and
unemployment withholding provisions of applicable federal, state, local and
foreign law and such withholdings have been timely paid to the respective
governmental agencies.
5.11 Default. There exists as of the date hereof no Default or Event
of Default.
5.12 Other Representations. All warranties and representations of
the Borrower or any of the Subsidiaries contained in any of the Loan Documents
are true and accurate in all material respects.
5.13 Subsidiaries. As of the date hereof, the Borrower owns no
Subsidiaries other than NIK, DTC, Armor Holdings Properties, Inc. and Armor
Holdings Limited. The Borrower owns 100% of the outstanding common stock of its
Subsidiaries. The only persons or entities in which the Borrower owns an equity
interest are the Subsidiaries. No person or entity holds or is entitled to
obtain any other equity interest in the Subsidiaries.
5.14 ERISA. No Plan has incurred any material accumulated funding
deficiency within the meaning of the Employee Retirement Income Security Act of
1974, and neither the Borrower nor any Subsidiary has incurred any material
liability to the Pension Benefit Guaranty Corporation (or any successor) in
connection with any Plan.
5.15 Purpose of the Borrower. The Borrower does not own any "margin
security" within the meaning of Regulation U (12 CFR Part 221) of the Board of
Governors of the Federal Reserve System. None of the proceeds of the loan by
the Bank to the Borrower will be used for the purpose of purchasing or carrying
any margin security
21
or for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry a margin security or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of Regulation U, as now in effect or as it may hereafter be amended.
Neither the Borrower nor any agent acting on its behalf has taken or will take
any action which might cause this Agreement or any Loan Document to violate
Regulation U or any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Securities Exchange Act of 1934, in each case
as in effect now or as the same may hereafter be amended.
5.16 Payment of Loan Proceeds. The Bank is authorized to disburse all
proceeds of any loan to the Borrower hereunder directly to or upon the order of
the president, vice president--finance, vice president--corporate development
or controller of the Borrower without looking into the use of those proceeds.
The president of the Borrower as of the date hereof is Jonathan Spiller, the
vice president--finance of the Borrower as of the date hereof is Carol Burke,
the vice president--corporate development of the Borrower as of the date hereof
is Robert Schiller and the controller of the Borrower as of the date hereof is
Scott Vining. The Bank may rely on the fact that each continues to serve in
that capacity until the Bank receives written notice to the contrary.
5.17 Solvency. After giving effect to the full funding of the loans
contemplated herein, the Borrower and each Subsidiary will be solvent.
"Solvent" shall mean, when used with respect to any person or entity, that: (a)
such person or entity does not intend to incur, and does not believe and has no
reason to believe that it will incur, debts beyond its ability to pay as they
become due; (b) the sum of such person's or entity's assets is greater than all
of such person's or entity's liabilities at a fair valuation; (c) such person
or entity has sufficient cash flow to enable it to pay its debts as they become
due; and (d) such person or entity does not have unreasonably small capital to
carry on such person or entity's business as theretofore operated and all
businesses in which such person or entity is about to engage. "Fair valuation"
is intended to mean that value which can be obtained if the assets are sold
within a reasonable time in arm's-length transactions in an existing and not
theoretical market.
5.18 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
ARTICLE VI
EVENTS OF DEFAULT
-----------------
6.01 Events of Default. Each of the following events shall constitute
an "Event of Default" hereunder:
22
(a) if the Borrower defaults in the payment of any principal,
interest or other amount under the Note, the Acceptance Agreement or
any Reimbursement Agreement when the same shall become due, either by
the terms thereof or otherwise as provided herein and such default
continues for a period of ten days thereafter; or
(b) if the Borrower or any Subsidiary defaults: (i) in any
payment of principal of or interest on any other obligation beyond
any period of grace provided with respect thereto and such default
results in the acceleration of the obligation in question or (ii) in
the performance or observance of any other agreement, term, or
condition contained in any agreement under which any such obligation
is created if the effect of such default is to cause, or permit the
holder or holders of such obligation (or trustee on behalf of such
holder or holders) to cause, such obligation to become due prior to
its stated maturity, except for obligations disputed in good faith if
the Bank is promptly notified thereof and, if required by generally
accepted accounting principles, funded reserves are established or
(c) if any statement, representation or warranty made by the
Borrower or any Subsidiary herein or in any writing now or hereafter
furnished in connection with or pursuant to the Loan Documents or in
connection with any audit shall be false in any material respect; or
if the Borrower or any Subsidiary omits or fails to disclose within 10
days any substantial contingent or liquidated liabilities, or any
material adverse change in facts previously disclosed by any
statement, representation, certificate or warranty to the Bank; or
(d) if the Borrower or any Subsidiary defaults in the performance
or observance of any covenants contained in Section 4.09 hereof; or
(e) (i) if any Event of Default occurs under any Loan Document;
or (ii) if the Borrower or any Subsidiary defaults in the performance
or observance of any other agreement, covenant, term or condition
contained herein or in any other Loan Document and such default shall
not have been remedied within 30 days after written notice thereof is
sent by the Bank to the Borrower except, however, that an Event of
Default shall not be deemed to have occurred if the Borrower or the
Subsidiary, as the case may be, commences to cure such default within
such 30-day period and the Borrower or such Subsidiary, as the case
may be, completes such cure within 60 days after such notice; or
(f) if any Included Subsidiary disputes, attempts to avoid or
indicates its intent to seek to avoid its obligations under any
Guaranty; or
23
(g) if the Borrower or any Subsidiary makes an assignment for the
benefit of creditors or is generally not paying its debts as they
become due; or
(h) if any order, judgment or decree is entered under the
bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction adjudicating the Borrower or any Subsidiary, bankrupt or
insolvent; or
(i) if the Borrower or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of a trustee, receiver,
custodian, liquidator, or similar official, of the Borrower or any
Subsidiary or of any substantial part of the assets of the Borrower or
any Subsidiary, or commences a voluntary case under the Bankruptcy
Code of the United States or any proceedings relating to the Borrower
or any Subsidiary, under the bankruptcy, insolvency, or moratorium law
of any other jurisdiction, whether now or hereafter in effect; or
(j) if any such petition or application is filed, or any such
proceedings are commenced, against the Borrower or any Subsidiary and
if the Borrower or the Subsidiary by any act indicates its or his
approval thereof, consent thereto, or acquiescence therein, or an
order is entered in an involuntary case under the Bankruptcy Code of
the United States, or an order, judgment or decree is entered
appointing any such trustee, receiver, custodian, liquidator, or
similar official, or approving the petition in any proceedings, and
such order remains unstayed and in effect for more than 60 days; or
(k) if any order is entered in any proceedings against the
Borrower or any Subsidiary decreeing the dissolution or split-up of
the Borrower or any Subsidiary.
6.02 Default. A "Default" shall be deemed to have occurred hereunder
if any event or condition occurs which would constitute an Event of Default
hereunder upon the satisfaction of any requirement for notice or passage of
time in connection with such event or condition.
6.03 Remedies. If any Default shall occur, any obligation of the Bank
to make advances hereunder or under any Loan Document, or to create
Acceptances, shall be terminated without notice to the Borrower. In addition,
if any Event of Default shall occur, the Bank may by notice to the Borrower,
effective upon dispatch, declare the entire unpaid principal amount then
outstanding under the Loan Documents, all interest accrued and unpaid under the
Loan Documents and all other Indebtedness of the Borrower to the Bank under
this Agreement or any of the other Loan Documents to be forthwith due and
payable. Thereupon, the then outstanding
24
principal amount under the Loan Documents, all such accrued interest and all
such other Indebtedness shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower, and the Bank may immediately enforce
payment of all such amounts and exercise any or all of the rights and remedies
of the Bank under this Agreement and other Loan Documents, including without
limitation the right to resort to any or all collateral securing any
obligations under the Loan Documents and exercise any or all of the rights of a
secured party pursuant to the Uniform Commercial Code of Florida and other
applicable similar statutes in other jurisdictions.
6.04 Termination of Rights to Advances; Automatic Acceleration.
Notwithstanding anything herein to the contrary, (a) the Borrower's right, if
any, to obtain any additional advances under the Loan Documents shall
automatically terminate upon the initiation against the Borrower or any
Subsidiary of any proceeding under the Federal Bankruptcy Code, or upon the
occurrence of any Event of Default described in subparagraphs (g), (h), (i),
(j), or (k) of Section 6.01, and (b) all Indebtedness shall automatically be
and become immediately due and payable upon the occurrence of any Event of
Default described in subparagraphs (h), (i), or (j) of Section 6.01.
ARTICLE VII
MISCELLANEOUS
-------------
7.01 Expenses. The Borrower agrees to pay, and save the Bank harmless
against liability for the payment of, all reasonable out-of-pocket expenses
arising in connection with this transaction (including any renewals or
modifications relating hereto), including any state documentary stamp taxes or
other taxes (including interest and penalties, if any) which may be determined
to be payable in respect to the execution and delivery of any Loan Documents
executed in connection with this Agreement or any such renewal or modification,
and the reasonable fees and expenses of the Bank's counsel. The Borrower
acknowledges that it has participated with the Bank in establishing the
structure of this transaction and that it has independently determined the
amount of documentary stamp and other taxes due in connection herewith. The
Borrower has not relied upon representations of the Bank or its counsel in
calculating the amount of such taxes, and the Borrower shall be liable for any
additional taxes (including interest and penalties) which may be due in
connection with this transaction or any renewals hereof. If an Event of Default
shall occur, the Borrower shall also pay all of the Bank's costs of collection
including reasonable Bank employee travel expenses, court costs and reasonable
fees of attorneys and legal assistants (whether incurred in connection with
trial or appellate proceedings). The Borrower authorizes the Bank to make
advances under the Note and to debit its deposit accounts to pay all expenses.
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7.02 Survival of Representations and Warranties. All representations
and warranties contained herein or made in writing by the Borrower in
connection herewith shall survive the execution and delivery of the Loan
Documents.
7.03 Successors and Assigns. All covenants and agreements in this
Agreement contained by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not. The Borrower shall not be entitled to
assign its rights hereunder. The Bank may, with the Borrower's consent, which
shall not be unreasonably withheld or delayed, assign all or part of its rights
hereunder or grant participations herein. The Bank may disclose to any such
assignee or participant (or any prospective assignee or participant) such
information concerning the Borrower and its affiliates as the Bank deems
appropriate.
7.04 No Third Party Beneficiaries. The Included Subsidiaries are not
third party beneficiaries to this Loan Agreement and, in addition to the rights
of the Bank set forth in the Guaranties, the Bank, with the concurrence of the
Borrower, shall have the right without impairing the liability of the Included
Subsidiaries to alter and amend this Loan Agreement without notice to or
consent by the Included Subsidiaries.
7.05 Notices. All communications, notices or demands provided for
hereunder or under any other Loan Document to which the Borrower is a party
shall be sent by first class mail, by courier, by hand or by certified mail as
follows or to such other address with respect to any party as such party shall
notify the others in writing:
To the Bank: Barnett Bank, N.A.
50 North Laura Street
Jacksonville, Florida 32202
Attn: Corporate Banking Group
To the Borrower: Armor Holdings, Inc.
191 Nassau Place Road
Yulee, Florida 32097
Attn: Robert Schiller
With a copy to:
Kane Kessler, P.C.
1350 Avenue of the Americas
New York, New York 10019
Attn: Robert L. Lawrence, Esq.
Each such communication, notice or demand shall be deemed given:
(i) when deposited in the mail with proper postage affixed if sent
26
by mail; or (ii) when actually delivered to the appropriate address if sent by
courier or by hand.
7.06 Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Florida.
7.07 Headings. The descriptive section headings herein have been
inserted for convenience only and shall not be deemed to limit or otherwise
affect the construction of any provisions hereof.
7.08 Counterparts. This Agreement may be executed simultaneously in
several counterparts. Each counterpart shall be deemed an original.
7.09 Remedies Cumulative. All rights and remedies of the Bank
hereunder are cumulative and in addition to any rights and remedies which the
Bank may have under the laws of Florida. The Bank's exercise of any one right
or remedy against one party hereto will not deprive the Bank of any right or
remedy against that party or any other parties hereto. No right, power or
remedy conferred upon or reserved to the Bank under this Agreement or any other
of the Loan Documents is exclusive of any other right, power or remedy in any
of the Loan Documents, but each and every such right, power and remedy shall be
cumulative and concurrent and shall be in addition to any other right, power
and remedy given hereunder or under any other Loan Documents, or now or
hereafter existing at law, in equity or by statute.
7.10 Delay or Omission. No delay or omission of the Bank to exercise
any right, power or remedy under any of the Loan Documents or accruing upon any
Event of Default shall exhaust or impair any such right, power or remedy or
shall be construed to waive any such Event of Default or to constitute
acquiescence therein. Every right, power and remedy given to the Bank under any
of the Loan Documents may be exercised from time to time and as often as may be
deemed expedient by the Bank.
7.11 No Waiver of One Default to Affect Another. No waiver of any
Default or Event of Default hereunder shall extend to or affect any subsequent
Default or Event of Default or any other Default or Event of Default then
existing, or impair any rights, powers or remedies consequent thereon.
7.12 Changes. No term of any Loan Document may be changed, waived,
discharged or terminated orally, or by any action or inaction, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
7.13 Severability. If any portion of any Loan Document is declared
void by any court as illegal or against public policy, the
27
remainder of the Loan Documents in question shall continue in full effect.
7.14 Lost or Damaged Note. Upon receipt by the Borrower of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
the Note (the "Lost Note") and of an indemnity agreement reasonably
satisfactory to the Borrower, the Borrower will make and deliver to the Bank a
new Note of like tenor, date and principal amount in lieu of the Lost Note.
7.15 Merger. This Agreement supersedes and replaces any commitment
letter relating to the Indebtedness.
7.16 Capitalized Terms. Capitalized terms that are not otherwise
defined herein shall have the meanings set forth in the introductory paragraph
or the Recitals, as the case may be, to this Amended and Restated Loan
Agreement.
IN WITNESS WHEREOF, the parties hereto have signed and sealed this
Agreement on the day and year first above written.
ARMOR HOLDINGS, INC.
By /s/ Carol T. Burke
--------------------------------
Its Vice President - Finance
----------------------------
BARNETT BANK, N.A.
By /s/ Sharon W. Bowens
---------------------------------
Its Loan Closing Officer
-----------------------------
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STATE OF GEORGIA
COUNTY OF CAMDEN
The foregoing instrument was executed, acknowledged and delivered
before me this 26th day of March, 1997, by Carol T. Burke, the Vice President
of Finance of Armor Holdings, Inc., on behalf of the corporation, in Camden
County, Georgia.
/s/ V. Thomas Fountain
-----------------------------------
Notary Public, State and County
Aforesaid
My Commission Expires: Jan 16, 2000
(Notary Seal)
STATE OF GEORGIA
COUNTY OF CAMDEN
The foregoing instrument was executed, acknowledged and delivered
before me this 26th day of March, 1997, by Sharon W. Bowens, the Loan Closing
Officer of Barnett Bank, N.A., on behalf of the bank, in Camden County,
Georgia.
/s/ V. Thomas Fountain
-----------------------------------
Notary Public, State and County
Aforesaid
My Commission Expires: Jan 16, 2000
(Notary Seal)
29