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Exhibit 10.19
WAIVER, DIRECTION AND AMENDMENT NUMBER ONE
RE:
THE XXXXX-X'XXXX COMPANY, X'XXXX-XXXX & XXXXXXXXXX ARMORING COMPANY,
XXXXX HOLDINGS, INC and XXXXX ASSOCIATES, INC.
$40,000,000
SECOND AMENDED AND RESTATED LOAN AGREEMENT DATED AS OF MARCH 30, 2001
Dated as of April 20, 2001
THE XXXXX-X'XXXX COMPANY
0000 XxXxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
To: KeyBank National Association
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Revolving Credit
Note (the "NOTE") of The Xxxxx-X'Xxxx Company, X'Xxxx-Xxxx & Xxxxxxxxxx Armoring
Company, Xxxxx Holdings, Inc and Xxxxx Associates, Inc. (together with their
successors and assigns, the "COMPANY"), in the aggregate principal amount of
$40,000,000 outstanding under the Second Amended and Restated Loan Agreement
dated as of March 30, 2001 (collectively, the "LOAN AGREEMENT"), between the
Company and KeyBank National Association (the "BANK"). All terms not otherwise
defined herein are used with the same meaning as set forth in the Loan
Agreement. Pursuant to a Stock Purchase Agreement (the "STOCK PURCHASE
AGREEMENT") in the form attached hereto as ANNEX 1, the Company intends to
consummate a transaction (the "STOCK SALE") whereby the Company will sell, and
Armor Holdings, Inc., and Bengal Acquisition Corp will purchase, the Securities
(as described in the Stock Purchase Agreement) of the Company. The Company
hereby requests that the Bank waive certain rights under the Loan Agreement and
instruct the Collateral Agent to release certain collateral, all as more
particularly set forth herein.
1. WAIVER AND DIRECTION. Subject to the terms and conditions set forth
in Section 3 hereof, and based upon information furnished by the Company to the
Bank, the Bank hereby (a) agrees to waive its rights to take any action under
the Loan Agreement as a result of any Event of Default resulting from the
Company's failure to comply with Section 7.13 of the Loan Agreement due solely
to the Stock Sale and (b) instructs the Collateral Agent to release its Lien on
the assets and stock of the corporations whose stock is which are the subject of
the Stock Sale contemporaneously with the closing of the Stock Sale.
2. AMENDMENT TO INTEREST RATE.
(a) Effective April 20, 2001, the Rate of interest payable
under the Note will be the Note Interest Rate. As used herein, "NOTE
INTEREST RATE" means, as of any date of determination, a rate per annum
equal to (a) if such date is prior to April 20, 2001, the greater of:
(i) 8.56% or (ii) the Prime Rate plus one and one-half percent (1.50%)
and (b) if such date is on or after April 20, 2001, the greater of: (i)
8.56% or (ii) the lesser of (A) the highest interest rate allowed by
applicable law on the Note and (B) the Prime Rate PLUS one and one-half
of one percent (1.50%) plus the Applicable Adjustment Margin as of such
date."
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(b) Effective April 20, 2001, Section 14 of the Loan Agreement
is hereby amended by adding the following definition in appropriate
alphabetical order:
"APPLICABLE ADJUSTMENT MARGIN - means, as of any date of
determination, an amount equal to the product of (a) one-half of one
percent (0.50%) TIMES (b) the number of complete 30 consecutive day
periods which shall have expired since April 20, 2001 as of such date
of determination."
3. EFFECTIVENESS OF WAIVER AND DIRECTION; EFFECT UPON OTHER
PROVISIONS OF THE LOAN AGREEMENT AND THE NOTE.
(a) The waiver and direction set forth in Section 1 above is
subject to satisfaction of each of the following conditions:
(i) the full execution and the delivery of this
letter agreement by the Company and the Bank;
(ii) contemporaneously with the closing of the Stock
Sale, the Company shall prepay, pursuant to the Loan
Agreement, the Note in an aggregate principal amount of not
less than the greater of (A) $19,876,500 and (B) and amount
equal to 56.79% of: (1) the cash portion of the purchase price
actually received at the closing by the Seller (as defined in
the Stock Purchase Agreement) under the Stock Purchase
Agreement minus (2) $3,000,000;
(iii) the execution, delivery and effectiveness of an
agreement, signed by Noteholders under the Note Purchase
Agreement in form and substance acceptable to the Bank
containing (A) a waiver on behalf of the Noteholders,
identical in substance to the waiver set forth in Section 1
hereof, with respect to Section 8.19 of the Note Purchase
Agreement and (B) a direction to the Collateral Agent
identical in substance to the direction set forth in Section 1
hereof;
(iv) the warranties and representations contained in
Section 4 hereof being true on and as of the date hereof.;
(v) any and all shares of capital stock of Armor
Holdings, Inc. ("AHI") or any other Person received by the
Company or any of its Affiliates in connection with the Stock
Sale shall have been pledged to the Collateral Agent pursuant
to a pledge agreement in form and substance reasonably
satisfactory to the Noteholders and the Bank and such shares
will be released by the Collateral Agent upon sales by the
Company pursuant to the terms of the Purchase Agreement; and
(vi) the closing of the Stock Sale shall have been
completed on or before the Termination (as such term is
defined in the Stock Purchase Agreement).
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(b) The Company agrees that the waiver set forth in
Section 1(a) shall remain in effect if and so long as the Company
(i) prepays, pursuant to the provisions of Section 3
of the Note, the following principal amounts of Note:
(A) upon receipt by the Company of any
proceeds from the sale of shares of capital stock of AHI or
payments made by AHI as Tranche One Deficit or Tranche One
Excess amounts pursuant to the provisions of Section 3 of
Schedule 2.6 of the Stock Purchase Agreement, in each case
received as consideration by it in connection with the Stock
Sale a principal amount of the Note equal to 56.79% of such
proceeds or amounts as the case may be, and
(B) within sixty (60) days of the closing of
the Stock Sale, a principal amount of Note equal to the
difference (if a positive number) between (1) $8,518,500 and
(2) an amount equal to 56.79% of the aggregate proceeds
received by the Company from each sale of one or more shares
of such capital stock of AHI within the sixty (60) day period
immediately following the closing of the Stock Sale and paid
by the Company pursuant to clause (A) above;
(ii) On or before sixty (60) days immediately
following the closing of the Stock Sale the Company pays in
full the entire outstanding principal amount of the Note
together with interest thereon.
(c) It is further agreed and understood that (i) the amounts
contemplated to be so paid shall be considered due and payable on each
of such dates and (ii) the failure of the Company to pay the amounts
due on the Note as provided in clause (b) above shall constitute an
immediate Event of Default.
(d) The execution, delivery and effectiveness of this letter
agreement shall not be deemed, except as expressly provided herein, (i)
to operate as a waiver of any right, power or remedy of the Bank under
the Loan Agreement or the Note, nor constitute a waiver of any
provision thereunder, or (ii) to prejudice any rights which the Bank
now has or may have in the future under or in connection with the Loan
Agreement, the Note or any other documents referred to therein. Except
as specifically set forth above, all terms and conditions of the Loan
Agreement shall remain unchanged and in full force and effect.
4. WARRANTIES AND REPRESENTATIONS. To induce you to enter into this
letter agreement, the Company warrants and represents, as of the date hereof, as
follows:
(a) No Default or Event of Default has occurred or is
continuing (other than the Event of Default which will be waived by the
execution, delivery and effectiveness of this letter agreement and the
agreements described in Section 3 hereof), nor does any event or
condition exist that, upon the execution, delivery and effectiveness of
this letter agreement, would constitute a Default or an Event of
Default; and
(b) Except for an amendment to the interest rate in the Note
Purchase Agreement
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which is the same as the amendment set forth in Section 2 above, the
Noteholders will not receive, directly or indirectly, any fee, interest
rate adjustment or other remuneration for the waiver or direction under
the agreement described in Section 3(a)(iii) hereof.
(c) The assets of the corporations whose stock is the subject
of the Stock Purchase Agreement are the assets (other than the Excluded
Assets) of the Company's Security Products and Services Group described
in the Company's Preliminary Proxy Statement filed September 19, 2000
with the Securities and Exchange Commission. Excluded Assets means the
assets and capital stock of Securify, Inc., O'Xxxx Xxxxx Automotive
Group, O'Gara Security Systems, X'Xxxx-Xxxx & Xxxxxxxxxx CIS and
certain other entities that have no assets or business operations.
5. PAYMENT OF FEES AND EXPENSES. In accordance with Section 11 of the
Loan Agreement, the Company shall pay or, if paid by the Bank, reimburse the
Bank for, all out-of-pocket fees, costs and expenses paid or incurred by the
Bank in connection with the negotiation, preparation, drafting, implementation,
actual or proposed amendment or modification, administration and enforcement of
this letter agreement, the Loan Agreement and the Note.
6. COUNTERPARTS. This letter agreement and all acceptances hereof may
be executed simultaneously in any number of counterparts, each of which shall be
deemed an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.
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Very truly yours,
THE XXXXX-X'XXXX COMPANY
By:
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Name:
Title:
ACCEPTED AND AGREED:
KEYBANK NATIONAL ASSOCIATION
By:
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Name:
Title:
Xxxxx 0-0
0
XXXXX 0
XXXXX XXXXXXXX AGREEMENT
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Annex 1-2
