EXHIBIT 10.11
DRAFT
2/14/03
SECOND AMENDMENT (this "AMENDMENT"), dated as of February 17, 2003, to
LOAN AND SECURITY AGREEMENT, dated as of September 24, 2001 (as amended,
modified or supplemented from time to time, the "LOAN AGREEMENT"), by and among
LASALLE BUSINESS CREDIT, INC., a Delaware corporation ("LASALLE"), and
PROTECTIVE APPAREL CORPORATION OF AMERICA, a New York corporation ("PACA"),
POINT BLANK BODY ARMOR, INC., a Delaware corporation ("POINT Blank"), and NDL
PRODUCTS, INC., a Florida corporation ("NDL", and with PACA and Point Blank,
collectively, the "BORROWERS" and each, a "BORROWER"), and DHB INDUSTRIES, INC.,
a Delaware corporation (f/k/a DHB Capital Group, Inc., the "PARENT"). Terms
which are capitalized in this Amendment and not otherwise defined shall have the
meanings ascribed to such terms in the Loan Agreement.
WHEREAS, the Borrowers and Parent have requested that LaSalle consent
to an increase in the Maximum Revolving Loan Limit and to the modification of
certain other terms and provisions contained in the Loan Agreement; and
WHEREAS, LaSalle has consented to such requests, on the terms and
subject to the satisfaction of the conditions contained in this Amendment;
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION ONE . AMENDMENTS. Effective upon the satisfaction of the
conditions set forth in SECTION TWO hereof, the Loan Agreement shall be and is
hereby amended as of February 17, 2003 as follows:
(A) SECTION 2(A). REVOLVING LOANS. Section 2(a) of the Loan Agreement
is amended by deleting in its entirety clause (y) of the proviso found
immediately after clause (iv) thereof, and substituting in lieu thereof the
following new clause (y):
"(y) the Revolving Loan Limit with respect to Revolving Loans
made to all Borrowers, at any one time outstanding, shall in
no event exceed the following applicable amount:
(I) Thirty-Five Million Dollars ($35,000,000) during the
period commencing on February 18, 2003 and ending on (and
including) August 31, 2003, (II) Thirty Million Dollars
($30,000,000) during the period commencing on September 1,
2003 and ending on (and including) November 30, 2003 and (III)
Twenty-Five Million Dollars ($25,000,000) at all times on and
after December 1, 2003 (such amount, as in effect on any date
of determination, the "Maximum Revolving Loan Limit")."
(B) SECTION 8. COLLECTIONS. SECTION 8 is amended by deleting the
introductory portion of clause (iii) which follows the definition of the term
"Triggering Event", and by substituting the following in lieu thereof:
"(iii) during any sixty-day period ending on or after the date
one hundred twenty (120) days from the date of this Agreement,
less than ninety percent (90%);"
(C) SECTION 10. TERMINATION; AUTOMATIC RENEWAL. SECTION 10 is amended
by deleting the penultimate sentence thereof, and by substituting the following
in lieu thereof:
"In the event that the Borrowers elect to and in fact
terminate this Agreement and prepay all of the Liabilities on
or before February 28, 2004, then, in such event, on the date
of such prepayment the Borrowers agree jointly and severally
to pay to Lender as a prepayment fee, in addition to the
payment of all other Liabilities, an amount equal to one per
cent (1%) of the Maximum Revolving Loan Limit in effect on
such date."
SECTION TWO . CONDITIONS PRECEDENT. This Amendment shall become
effective when all of the following conditions, the satisfaction of each of
which is a condition precedent to the effectiveness of this Amendment, shall
have occurred or shall have been waived in writing by LaSalle.
(A) LaSalle shall have received and reviewed each of the following,
which shall be in form and substance reasonably satisfactory to it:
(i) this Amendment, duly executed by each Borrower and Parent, and
by David H. Brooks;
(ii) an Amended and Restated Revolving Note, in the form of EXHIBIT
A hereto, in the principal amount of $35,000,000, duly
executed by each Borrower;
(iii) an opinion of counsel to the Borrowers and Parent regarding
each Borrower's and Parent's due incorporation, valid
existence, good standing and power and authority to execute
this Amendment, the due authorization, execution and delivery
of this Amendment by each Borrower and Parent, the
enforceability of this Amendment against each Borrower and
Parent, and such other matters as LaSalle and its counsel may
reasonably require;
(iv) a Certificate of the Secretary or Assistant Secretary of each
Borrower and of Parent (A) relating to the adoption of
resolutions by each such Borrower's and Parent's respective
Board of Directors approving this Amendment and the other
documents executed or delivered in connection herewith by such
party, (B) certifying that no amendments have been made to
each such Borrower's or Parent's Certificate of Incorporation,
as amended, other than the Certificate of Designations and
Preferences executed on December 14, 2001, and each such
Borrower's or Parent's by-laws, as amended, since September
24, 2001, and (C) further certifying the names and incumbency
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of officers of each such Borrower and of Parent authorized to
sign this Amendment and all other documents executed or
delivered in connection herewith, and the names and validity
of signatures of such officers.
(B) LaSalle shall have received payment, in cash, of an amendment fee
in the amount of $25,000, which fee shall be non-refundable and deemed fully
earned when paid, and the Borrowers authorize LaSalle to charge any loan account
of the Borrowers for such fee.
(C) All representations and warranties set forth in the Loan Agreement
(except for such inducing representations and warranties that were only required
to be true and correct as of a prior date) shall be true and correct in all
material respects on and as of the effective date hereof, and no Default or
Event of Default shall have occurred and be continuing.
(D) No event or development shall have occurred since _________, 2002
which event or development has had or is reasonably likely to have a Material
Adverse Effect.
(E) LaSalle shall have received a certificate from each Borrower and
Parent, executed by the chairman of each such party, as to the truth and
accuracy of paragraphs (c) and (d) of this SECTION TWO.
(F) All corporate and legal proceedings and all documents and
instruments executed or delivered in connection with this Amendment shall be
satisfactory in form and substance to LaSalle and its counsel, and LaSalle and
its counsel shall have received all information and copies of all documents
which it or its counsel may have reasonably requested in connection herewith and
the matters contemplated hereunder, such documents, when requested by them, to
be certified by appropriate corporate authorities.
(G) There shall be no action, suit or proceeding pending or to any
Borrower's or Parent's knowledge overtly threatened against any Borrower or
Parent before any court (including any bankruptcy court), arbitrator or
governmental or administrative body or agency which challenges or relates to the
consummation of this Amendment or the other transactions contemplated herein.
(H) LaSalle shall have received such further agreements, consents,
instruments and documents as may be necessary or proper in the reasonable
opinion of LaSalle and its counsel to carry out the provisions and purposes of
this Amendment.
SECTION THREE . REPRESENTATIONS AND WARRANTIES. Each Borrower and
Parent each hereby represents and warrants (which representations and warranties
shall survive the execution and delivery hereof) to LaSalle that:
(A) Each Borrower and Parent has the corporate or other power,
authority and legal right to execute, deliver and perform this Amendment and the
other instruments, agreements, documents and transactions contemplated hereby to
which it is a party, and has taken all actions necessary to authorize the
execution, delivery and performance of this Amendment and the other instruments,
agreements, documents to which it is a party and the transactions contemplated
hereby and thereby;
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(B) No consent of any Person (including, without limitation,
stockholders or creditors of any Borrower or Parent, as the case may be) other
than LaSalle, and no consent, permit, approval or authorization of, exemption
by, notice or report to, or registration, filing or declaration with, any
governmental authority is required in connection with the execution, delivery
and performance by each Borrower and Parent, or the validity or enforceability
against such parties, of this Amendment and the other instruments, agreements,
documents and transactions contemplated hereby to which they are a party;
(C) This Amendment has been duly executed and delivered on behalf of
each Borrower and Parent by their respective duly authorized officers, and
constitutes the legal, valid and binding obligation of such Borrower and Parent,
enforceable in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the rights of creditors
generally or equitable remedies (whether arising in a proceeding at law or in
equity);
(D) No Borrower or Parent is in material default under any indenture,
mortgage, deed of trust, agreement or other instrument to which it is a party or
by which it may be bound. Neither the execution and delivery of each of this
Amendment, nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof will (i) violate any law or regulation, or
(ii) result in or cause a violation by any Borrower or Parent of any order or
decree of any court or government instrumentality, or (iii) conflict with, or
result in the breach of, or constitute a default under, any indenture, mortgage,
deed of trust, material agreement or other material instrument to which each
such Borrower or Parent is a party or by which any of them may be bound, or (iv)
result in the creation or imposition of any lien, charge, or encumbrance upon
any of the property of each such Borrower or Parent, except in favor of LaSalle,
to secure the Liabilities, or (v) violate any provision of the Certificate of
Incorporation, By-Laws or any capital stock or similar equity instrument of each
such Borrower or Parent;
(E) No Default or Event of Default has occurred and is continuing on
the date hereof;
(F) Since the date of Parent's consolidated and consolidating financial
statements for the _____ month period ended _________, 2002, no change or event
has occurred which has had or is reasonably likely to have a Material Adverse
Effect;
(G) Upon execution of this Amendment and the satisfaction of the
conditions set forth in SECTION TWO hereof, each of Parent and each Borrower,
each in its capacity as Guarantor under the Loan Agreement, agrees that the term
"Liabilities" shall include any and all Liabilities arising under the Loan
Agreement, as amended by this Amendment, including but not limited to any and
all Revolving Loans resulting from the increase in the Maximum Revolving Loan
Limit from $25,000,000 to $35,000,000 and all interest accruing on such
Revolving Loans;
(H) Parent and its Subsidiaries, taken as a whole, are, and after
giving effect to the transactions contemplated by this Amendment, will be,
solvent, able to pay its debts as they become due, has capital sufficient to
carry on its business, now owns property having a value both at fair valuation
and at present fair saleable value greater than the amount required to pay its
debts, and will not be rendered insolvent by the execution and delivery of this
Amendment or any of the other agreements instruments being executed in
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connection herewith or by completion of the transactions contemplated hereunder
or thereunder.
SECTION FOUR . GENERAL PROVISIONS.
(A) Except as herein expressly amended, the Loan Agreement and all
other agreements, documents, instruments and certificates executed in connection
therewith, are ratified and confirmed in all respects and shall remain in full
force and effect in accordance with their respective terms.
(B) All references in the Other Agreements to the Loan Agreement shall
mean the Loan Agreement as amended hereby and as hereafter amended, supplemented
or modified from time to time. From and after the date hereof, all references in
the Loan Agreement to "this Agreement," "hereof," "herein," or similar terms,
shall mean and refer to the Loan Agreement as amended by this Amendment.
(C) This Amendment may be executed by the parties hereto individually
or in combination, in one or more counterparts, each of which shall be an
original and all which shall constitute one and the same agreement.
(D) This Amendment shall be governed and controlled by the internal
laws of the State of New York.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, LaSalle, each Borrower and Parent have caused this
Amendment to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
LASALLE BUSINESS CREDIT, INC.
By:___________________________________
Name:
Title:
PROTECTIVE APPAREL CORPORATION
OF AMERICA
By:___________________________________
Name:
Title:
POINT BLANK BODY ARMOR, INC.
By:___________________________________
Name:
Title:
NDL PRODUCTS, INC.
By:___________________________________
Name:
Title:
DHB INDUSTRIES INC.
By:___________________________________
Name:
Title:
ACKNOWLEDGED AND CONSENTED TO:
____________________________________
DAVID H. BROOKS
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EXHIBIT A
FORM OF AMENDED AND RESTATED
REVOLVING NOTE
ORIGINAL DATE OF EXECUTION: SEPTEMBER 24, 2001
DATE OF AMENDMENT AND RESTATEMENT: AS OF FEBRUARY 17, 2003
$35,000,000.00 NEW YORK, NEW YORK
FOR VALUE RECEIVED, PROTECTIVE APPAREL CORPORATION OF AMERICA,
POINT BLANK BODY ARMOR, INC. and NDL PRODUCTS, INC. (each a "Borrower" and
collectively, the "Borrowers") jointly and severally promise to pay to the order
of LASALLE BUSINESS CREDIT, INC. (the "Lender"), at its offices located at 135
South LaSalle Street, Chicago, Illinois 60603, the principal sum of Thirty-Five
Million and No/100 Dollars ($35,000,000.00) on the Maturity Date, which shall
mean the last day of the Original Term, or the applicable Renewal Term, in the
event that the Loan Agreement (as defined below) is renewed, as the case may be,
or so much of such principal sum as shall be outstanding and unpaid on the
Maturity Date, all as more fully set forth in the Loan and Security Agreement,
dated as of September 24, 2001 (as the same may be amended, modified,
supplemented or restated from time to time, the "Loan Agreement"), by and among
each of the Borrowers, DHB Industries, Inc., as Guarantor, the DHB Subsidiaries
and the Lender. Terms which are capitalized in this Revolving Note but are not
otherwise defined shall have the meanings ascribed to them in the Loan
Agreement. The Borrowers further promise jointly and severally to pay (a) the
principal of the Revolving Loans, as set forth in Section 2(d)(i) of the Loan
Agreement and (b) interest on the outstanding principal amount hereof on the
dates and at the rates provided in the Loan Agreement, from the date hereof
until payment in full hereof. This Revolving Note is referred to in and
delivered pursuant to the Loan Agreement, and is subject to and entitled to all
provisions and benefits thereof.
The Borrowers hereby authorize the Lender to charge any
account of the Borrowers maintained with the Lender for all sums payable
hereunder as and when such sums become due. If payment hereunder becomes due and
payable on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day, and interest shall be payable
thereon at the rate specified during such extension. Credit shall be given for
payments made, in the manner and at the times provided in the Loan Agreement. It
is the intent of the parties that the rate of interest and other charges to the
Borrowers under this Revolving Note shall be lawful; therefore, if for any
reason the interest or other charges payable hereunder are found by a court of
competent jurisdiction, in a final determination, to exceed the limit which the
Lender may lawfully charge the Borrowers, then the obligation to pay interest or
other charges shall automatically be reduced to such limit and, if any amount in
excess of such limit shall have been paid, then such amount shall be refunded to
the Borrowers.
The principal and all accrued interest hereunder may be
prepaid by the Borrowers, in part or in full, at any time; PROVIDED, HOWEVER,
that if the Borrowers terminate the Loan Agreement prior to the Maturity Date,
the Borrowers may be required to pay a prepayment fee as provided in Section 10
of the Loan Agreement.
The Borrowers waive the benefit of any law that would
otherwise restrict or limit the Lender in the exercise of its right, which is
hereby acknowledged, to set off against the Liabilities, without notice and at
any time hereafter, any amounts owing from the Lender to the Borrowers. The
Borrowers agree that the Lender shall not be liable for any error in judgment or
mistakes of fact or law, other than for gross negligence. To the extent the
Borrowers have any counterclaims, they agree to assert any and all such
counterclaims (other than compulsory counterclaims) by separate action.
The Borrowers, any other party liable with respect to the
Liabilities evidenced hereby and any and all endorsers and accommodation
parties, and each one of them, if more than one, waive any and all presentment,
demand, notice of dishonor, protest, and all other notices and demands in
connection with the enforcement of the Lender's rights hereunder.
The Revolving Loans evidenced hereby have been made, and this
Revolving Note has been delivered, at New York, New York. THIS REVOLVING NOTE
SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
AS TO INTERPRETATION, ENFORCEMENT, VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL
OTHER RESPECTS, INCLUDING WITHOUT LIMITATION, THE LEGALITY OF THE INTEREST RATE
AND OTHER CHARGES, and shall be binding upon the Borrowers and each of their
successors and assigns. If this Revolving Note contains any blanks when executed
by the Borrowers, the Lender is hereby authorized, without notice to the
Borrowers, to complete any such blanks according to the terms upon which the
Revolving Loan or Revolving Loans were granted. Wherever possible, each
provision of this Revolving Note shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Revolving
Note shall be prohibited by or be invalid under such law, such provision shall
be severable, and be ineffective to the extent of such prohibition or
invalidity, without invalidating the remaining provisions of this Revolving
Note.
To induce the Lender to make the Revolving Loans evidenced by
this Revolving Note, the Borrowers (i) irrevocably agree that all actions
arising directly or indirectly as a result or in consequence of this Revolving
Note shall be instituted and litigated only in courts having situs in the City
of New York, New York; PROVIDED, that Lender may elect to commence an action or
proceeding with respect to the Collateral in another jurisdiction, (ii) hereby
consent to the exclusive jurisdiction and venue of any State or Federal Court
located and having its situs in said city, and (iii) waive any objection based
on forum non-conveniens. IN ADDITION, THE BORROWERS HEREBY WAIVE TRIAL BY JURY
IN ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THIS
REVOLVING NOTE, THE LIABILITIES, THE COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY
ANY BORROWER OR THE LENDER OR WHICH IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISES
OUT OF OR RELATES TO THE RELATIONSHIP BETWEEN THE BORROWERS AND THE LENDER,
waive personal service of any and all process, and consent that all such service
of process may be made by certified mail, return receipt requested, directed to
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the Borrowers at the address indicated in the Lender's records; and service so
made shall be complete five (5) days after the same has been deposited in the
U.S. mails as aforesaid.
This Note amends, supersedes and replaces in its entirety that
certain Amended and Restated Revolving Note (the "Original Note") in the
original principal amount of Twenty-Five Million and No/100 Dollars
($25,000,000) dated as of June 28, 2002, executed by the Borrowers and payable
to the order of the Lender; provided, however, that all of the indebtedness
evidenced by the Original Note continues to be outstanding as of the date
hereof, no cancellation, adjustment or novation of such indebtedness shall be
deemed to have occurred on account of the amendment and restatement of the
Original Note pursuant to this Note, and the Borrowers' execution and delivery
of this Note shall constitute an express acknowledgment and confirmation of, and
agreement with, the foregoing.
IN WITNESS WHEREOF, each of the Borrowers has executed this
Revolving Note on the date first above set forth.
PROTECTIVE APPAREL CORPORATION OF AMERICA
By:______________________________________
Title:
Name:
POINT BLANK BODY ARMOR, INC.
By:______________________________________
Title:
Name:
NDL PRODUCTS, INC.
By:______________________________________
Title:
Name:
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