THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AND INTERCREDITOR AGREEMENT (THE “SUBORDINATION AGREEMENT”) DATED AS OF OCTOBER 29, 2009 BETWEEN...
Exhibit 10.2
THIS
INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN
THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AND
INTERCREDITOR AGREEMENT (THE “SUBORDINATION AGREEMENT”) DATED AS OF OCTOBER 29,
2009 BETWEEN SUBORDINATED CREDITOR (AS DEFINED IN THE SUBORDINATION AGREEMENT)
AND BANK OF AMERICA, N.A. (“AGENT”) TO THE INDEBTEDNESS (INCLUDING INTEREST)
OWED BY PROTECTIVE APPAREL CORPORATION OF AMERICA, A NEW YORK CORPORATION
(“PACA”), POINT BLANK BODY ARMOR INC., A DELAWARE CORPORATION (“BODY ARMOR”),
LIFE WEAR TECHNOLOGIES, INC., A FLORIDA CORPORATION (“LIFE WEAR”), AND POINT
BLANK SOLUTIONS, INC., A DELAWARE CORPORATION (THE “POINT BLANK” AND TOGETHER
WITH PACA, BODY ARMOR AND LIFE WEAR, THE “COMPANY”) PURSUANT TO THAT CERTAIN
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT DATED AS OF APRIL 3, 2007 AMONG
THE COMPANY, AGENT AND THE LENDERS FROM TIME TO TIME PARTY THERETO, AS SUCH LOAN
AND SECURITY AGREEMENT HAS BEEN AND HEREAFTER MAY BE AMENDED, SUPPLEMENTED OR
OTHERWISE MODIFIED FROM TIME TO TIME AND TO INDEBTEDNESS REFINANCING THE
INDEBTEDNESS UNDER THAT AGREEMENT AS CONTEMPLATED BY THE SUBORDINATION
AGREEMENT; AND EACH HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF,
IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION
AGREEMENT.
Subordinated
Note
Dated:
October 29, 2009
FOR VALUE
RECEIVED, the undersigned, PROTECTIVE APPAREL CORPORATION OF
AMERICA, a New York corporation (“PACA”), POINT BLANK BODY ARMOR INC., a
Delaware corporation (“Body
Armor”), LIFE WEAR
TECHNOLOGIES, INC., a Florida corporation (“Life
Wear”), and POINT BLANK
SOLUTIONS, INC., a Delaware corporation (“Point Blank” and collectively,
together with PACA, Body Armor and Life Wear, the “Company”), hereby
promise to pay on the Maturity Date to Subordinated Creditor (as defined in the
Subordination Agreement) the lesser of (i) the principal amount of Ten Million
DOLLARS ($10,000,000) or (ii) such lesser amount as may be advanced by the
Subordinated Creditor on behalf of the Company pursuant to the terms of the
Guarantee (defined herein), together with all accrued interest on the principal
sum outstanding from time to time hereunder. Capitalized terms used
and not otherwise defined herein shall have the meanings assigned to them in the
Subordination Agreement.
1. Defined
Terms. (a) The following terms shall have the following
meanings:
“Collateral”
has the meaning set forth in Section 5 of this Note.
“Event of Default” has
the meaning set forth in Section 6 of this Note.
“Guarantee” means that
certain Amended and Restated Corporate Guarantee dated as of October 29,
2009 made by Subordinated Creditor in favor of Agent.
“Maturity Date”
means the earlier of (a) October 31, 2010 or (b) 91st day
after the date on which all Senior Debt under the BOFA Loan Documents and any
Refinancing Senior Debt Documents is paid in full and all commitments under the
BOFA Loan Documents and any Refinancing Senior Debt Documents are
terminated.
“Subordination
Agreement” means that certain Subordination and Intercreditor Agreement
dated as of October 29, 2009 among Subordinated Creditor and Agent.
2. Payment of
Interest. (a) The Company shall pay interest in
kind on the unpaid principal amount hereof from the date such principal is
deemed advanced pursuant to the Guarantee until such principal amount is paid in
full, quarterly on the last day of each calendar quarter (each, an “Interest Payment
Date”), at an interest rate equal to the rate charged to the “Term Loan”
under the “Senior Credit Agreement” (as such terms are defined in the
Subordination Agreement), and such accrued interest shall be added to the
principal balance under this Note on each Interest Payment Date.
(b) All
computations of interest shall be made on the basis of a year of 365 days for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest is accrued. All
accrued interest shall be due and payable in cash on the Maturity
Date.
3. Transferability. Subordinated
Creditor may not assign (or sell participation interests in) its interest in
this Note to any Person without the prior written consent of the Agent. Any
assignment made in violation of this Section 3 shall be null and
void.
4. Subordination. The
Company agrees, and the Subordinated Creditor, by its acceptance thereof, also
agrees, that the Subordinated Debt evidenced hereby is, and the liens securing
the Subordinated Debt are, and shall be, subordinate to the Senior Debt and the
liens securing the Senior Debt pursuant to the terms of the Subordination
Agreement. Except with respect to interest that is paid in kind and
as otherwise expressly permitted under the Subordination Agreement, the Company
will not make, and neither the Subordinated Creditor will accept, any payment or
distribution on the Subordinated Debt of any kind directly or indirectly, in
cash or other property or by set off or in any other manner, including, without
limitation, from or by way of any Collateral.
5. Grant of
Security Interest. To secure the prompt and complete
payment, performance and observance of the Subordinated Debt evidenced by this
Note, each of PACA, Body Armor, Life Wear and Point Blank hereby grants to
Subordinated Creditor a junior subordinated security interest in the following
property of such company, whether now or hereafter owned, existing, acquired or
arising and wherever now or hereafter located: (a) all Accounts; (b) all Chattel
Paper, Instruments, Documents and General Intangibles (including, without
limitation, all patents, patent applications, trademarks, trademark
applications, tradenames, trade secrets, goodwill, copyrights, copyright
applications, registrations, licenses, software, franchises, customer lists, tax
refund claims, claims against carriers and shippers, guarantee claims, contracts
rights, payment intangibles, security interests, security deposits and rights to
indemnification); (c) all Inventory; (d) all Goods (other than Inventory),
including, without limitation, Equipment, vehicles and Fixtures; (e) all
Investment Property; (f) all Deposit Accounts, bank accounts, deposits, cash and
such cash equivalents; (g) all Letter-of-Credit Rights; (h) Commercial Tort
Claims; (i) all policies and certificates of insurance insuring the property and
assets of such company and all policies and certificates of insurance of such
company; (j) any other property of such company, now or hereafter in the
possession, custody or control of Subordinated Creditor (whether for
safekeeping, deposit, collection, custody, pledge, transmission or otherwise)
and (k) all additions and accessions to, substitutions for, and replacements,
products and Proceeds of the foregoing property, including, without limitation,
proceeds of all insurance policies insuring the foregoing property, and all of
such company’s books and records relating to any of the foregoing and to such
company’s business (collectively, the “Collateral”). Capitalized terms used
in this Section 5 and not otherwise defined in this Note shall have the meanings
assigned to such terms in the Senior Credit Agreement or the Uniform Commercial
Code of the State of New York.
2
Each of
PACA, Body Armor, Life Wear and Point Blank hereby irrevocably authorizes
Subordinated Creditor at any time and from time to time to file in any filing
office in any Uniform Commercial Code jurisdiction any initial financing
statements and amendments thereto that indicate the Collateral as all assets of
such company or words of similar effect.
6. Events of
Default.
(a) If any of
the following events (“Events of Default”)
shall occur and be continuing:
(i) the Company
shall fail to pay the principal amount of this Note on the Maturity Date;
or
(ii) The
commencement of any proceedings in bankruptcy by or against any Company; provided, however, that if such
commencement of proceedings against the Company is involuntary, such action
shall not constitute an Event of Default unless such proceedings are not
dismissed within forty-five (45) days after the commencement of such
proceedings;
then,
subject to the Subordination Agreement, and in any such event, the Subordinated
Creditor may declare this Note and all interest thereon to be forthwith due and
payable, whereupon this Note and all such interest 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 Company.
(b) Subject
to the Subordination Agreement, upon acceleration of the Subordinated Debt
hereunder, Subordinated Creditor may exercise all rights and remedies of a
secured party under applicable law.
3
7. Miscellaneous. (a) Amendments. No
amendment or waiver of any provision of this Note, nor any consent to any
departure by the Company under this Note, shall in any event be effective unless
the same shall be in writing and signed by the Company and the Subordinated
Creditor and with the prior written approval of the Agent and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
(b) Binding
Effect. This Note shall be binding upon, and shall inure to
the benefit of, the Company and the Subordinated Creditor and their respective
successors and permitted assigns.
(c) Governing
Law. This Note shall be governed by, and construed in
accordance with, the laws of the State of New York, United States.
(d) Jurisdiction. The
Company hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Note or for recognition or enforcement of any judgment, and the
Company hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in any such New
York State court or, to the extent permitted by law, in such federal
court. The Company agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing
in this Note shall affect any right that any party may otherwise have to bring
any action or proceeding relating to this Note in the courts of any
jurisdiction.
(e) Cancellation, Exchange,
Conversion or Surrender. Subordinated Creditor may not cancel,
exchange, convert or surrender its interests in this Note for consideration of
any kind without the prior written consent of the Agent.
(f) JURY
TRIAL. THE COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS NOTE OR THE
ACTIONS OF SUBORDINATED CREDITOR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE
OR ENFORCEMENT THEREOF.
[Signature
Page Follows]
4
IN
WITNESS WHEREOF, the Company has caused this Note to be executed by its officer
thereunto duly authorized, as of the date first above written.
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PROTECTIVE
APPAREL CORPORATION OF AMERICA
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|
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By:
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/s/ Xxx Xxxxxxxxx |
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Name:
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Xxx Xxxxxxxxx |
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Title:
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President |
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POINT
BLANK BODY ARMOR INC.
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By:
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/s/ Xxx Xxxxxxxxx |
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Name:
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Xxx Xxxxxxxxx |
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Title:
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President |
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LIFE
WEAR TECHNOLOGIES, INC.
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By:
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/s/ Xxx Xxxxxxxxx |
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Name:
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Xxx Xxxxxxxxx |
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Title:
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President |
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By:
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/s/ Xxx Xxxxxxxxx |
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Name:
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Xxx Xxxxxxxxx |
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Title:
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Chief Executive Officer |
