EXECUTION VERSION
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT (this "Amendment") dated as of October 19, 2004
and effective in accordance with Section 3 below, is entered into by and among
ARMOR HOLDINGS, INC., as Borrower (the "Borrower"), the lenders from time to
time party to the Credit Agreement referred to below (the "Lenders"), BANK OF
AMERICA, N.A., as Administrative Agent (the "Administrative Agent"), WACHOVIA
BANK, NATIONAL ASSOCIATION, as Syndication Agent, and KEYBANK NATIONAL
ASSOCIATION, as Documentation Agent.
STATEMENT OF PURPOSE
Pursuant to the Credit Agreement dated as of August 12, 2003 (as
amended, restated, supplemented or otherwise modified, the "Credit Agreement")
by and among the Borrower, the Lenders, the Administrative Agent, the
Syndication Agent and the Documentation Agent, the Lenders have agreed to make,
and have made, certain extensions of credit to the Borrower.
In connection with the proposed issuance of up to $350 million
convertible subordinated notes of the Borrower, the Borrower has requested that
the Required Lenders amend the Credit Agreement as provided herein. Subject to
the terms and conditions set forth herein, the Required Lenders are willing to
consent to such amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
SECTION 1. DEFINITIONS. All capitalized terms used and not defined
herein shall have the meanings assigned thereto in the Credit Agreement.
SECTION 2. AMENDMENTS.
(a) Section 1.01 of the Credit Agreement ("Defined Terms") is hereby
amended by inserting the following new defined terms in correct alphabetical
order:
"Cash Equivalents" means (a) securities with maturities of 90
days or less from the date of acquisition issued or fully
guaranteed or insured by the United States government or any
agency thereof, (b) certificates of deposit and eurodollar time
deposits with maturities of 90 days or less from the date of
acquisition and overnight bank deposits of any Lender or of any
commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than seven days with respect
to securities issued or fully guaranteed or insured by the United
States government, (d) commercial paper of a domestic issuer rated
at least A-1 or the equivalent thereof by Standard and Poor's
Ratings Group ("S&P") or P-1 or the equivalent thereof by Xxxxx'x
Investors Service, Inc. ("Moody's") and in either case maturing
within 90 days after the day of
acquisition, (e) securities with maturities of 90 days or less
from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case
may be) are rated at least "A" by S&P or "A" by Moody's, (f)
securities with maturities of 90 days or less from the date of
acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of
clause (b) of this definition or (g) shares of money market mutual
or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
"Convertible Note Documents" means the collective reference
to the Prospectus Supplement to Prospectus dated May 27, 2004 and
any indenture or supplement to indenture executed in connection
with the Convertible Notes, including such indenture as
subsequently qualified under the Trust Indenture Act of 1939
pursuant to which notes registered under the Securities Act of
1933 will be issued in exchange for the notes issued on or about
October 22, 2004, as each may be amended, restated, supplemented
or otherwise modified pursuant to the terms and conditions set
forth in this Agreement.
"Convertible Notes" means the collective reference to the
convertible subordinated notes of the Borrower, due 2024, in the
initial principal amount of up to $350,000,000 and any registered
notes issued or to be issued as part of an Exchange Offer pursuant
to the terms of the Convertible Note Documents.
"Eligible Cash Investments" means all Cash Equivalents held
with a Controlled Intermediary (as defined in the Collateral
Agreement).
(b) Section 1.01 of the Credit Agreement ("Defined Terms") is hereby
further amended by amending and restating the definition of "Exchange Offer" as
follows:
"Exchange Offer" means (a) the exchange of registered High
Yield Bonds for the unregistered High Yield Bonds as contemplated
by the terms of the High Yield Bond Issuance or (b) the exchange
of registered Convertible Notes for any unregistered Convertible
Notes as contemplated by the terms of the Convertible Note
Documents, as applicable.
(c) Section 2.05(c) of the Credit Agreement ("Mandatory Prepayments of
Committed Loans") is hereby amended by amending and restating clause (iv) of
such subsection as follows:
"(iv) Equity Proceeds. The Borrower shall make mandatory
principal prepayments of the Committed Loans in the manner set
forth in Section 2.05(c)(vii) in amounts equal to one hundred
percent (100%)
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of the aggregate Net Cash Proceeds from any offering of equity
securities by the Borrower or any of its Subsidiaries (other than
(A) issuances with respect to the exercise of stock options and
stock grants pursuant to the Borrower's stock incentive plans in
effect from time to time, (B) issuances in connection with
specifically identified Permitted Acquisitions and (C) issuances
in connection with the conversion of the Convertible Notes). Such
prepayment shall be made within three (3) Business Days after the
date of receipt of Net Cash Proceeds of any such transaction."
(d) Section 7.01(b) of the Credit Agreement ("Consolidated Total
Indebtedness to EBITDA") is hereby amended by inserting the phrase ", minus all
Eligible Cash Investments," immediately following the defined term "Consolidated
Total Indebtedness" located in the second line of such subsection.
(e) Section 7.02 of the Credit Agreement ("Limitation on Indebtedness")
is hereby amended by inserting the following new subsection (l) at the end of
such section:
"(l) Indebtedness of the Borrower under the Convertible Notes
in an aggregate outstanding principal amount not to exceed
$350,000,000, and Indebtedness of the Borrower used to refinance,
refund, renew, extend or exchange the Convertible Notes, including
in connection with any Exchange Offer; provided that (A) no
Default or Event of Default exists and is continuing at the time
of such refinancing, refunding, renewal or extension above or
would be caused thereby, (B) the terms and conditions of the
replacement notes and the documents evidencing such refinancing,
refunding, renewal or extension shall be in form and substance no
more restrictive than this Agreement as reasonably agreed by the
Administrative Agent and (C) the principal amount of the
replacement notes shall not exceed the principal amount set forth
above on the date of such refinancing plus an amount equal to a
reasonable premium or other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such refinancing
and by an amount equal to any existing commitments unutilized
thereunder."
(f) Section 7.04 of the Credit Agreement ("Limitation on Guarantee
Obligations") is hereby amended by inserting the following new subsection (i) at
the end of such section:
"(i) Guarantee Obligations in respect of Indebtedness
permitted pursuant to Section 7.02(l)."
(g) Section 7.17 of the Credit Agreement ("Limitations of Lines of
Business") is hereby amended and restated as follows:
"7.17 LIMITATION ON LINES OF BUSINESS.
Enter into any business, either directly or through any
Subsidiary, except for businesses having some material application
to the manufacture,
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development, distribution, marketing and sale of law enforcement,
military and outdoor recreational use products and security,
investigative, risk management, safety, and similar business
services, and lines of business related thereto."
(g) Section 7.21 of the Credit Agreement ("Amendments, Payments and
Prepayments of High Yield Bonds") is hereby amended and restated as follows:
"7.21 AMENDMENTS, PAYMENTS AND PREPAYMENTS OF HIGH YIELD
BONDS AND CONVERTIBLE NOTES.
(a) Amend or modify (or permit the amendment or modification
of) any of the terms or provisions of the High Yield Bond
Documents or the Convertible Note Documents in any respect which
would materially adversely affect the rights or interests of the
Administrative Agent and the Lenders.
(b) Purchase, defease, make any payment or prepayment on
(including any sinking fund payment), or redeem or acquire for
value (including by way of depositing with any trustee with
respect thereto money or securities before due for the purpose of
paying when due), the High Yield Bonds or the Convertible Notes
(including making any offer to do any of the foregoing), other
than (i) refinancing, refundings, renewals, extensions or
exchanges of the High Yield Bonds, including in connection with
any Exchange Offer, pursuant to Section 7.02(j), (ii) refinancing,
refundings, renewals, extensions or exchanges of the Convertible
Notes, including in connection with any Exchange Offer, pursuant
to Section 7.02(l), (iii) conversion of the Convertible Notes to
Capital Stock of the Borrower pursuant to the terms thereof, and
(iv) regularly scheduled payments of accrued interest on the High
Yield Bonds and the Convertible Notes subject to the terms
thereof, or as otherwise contemplated by the Convertible Note
Documents."
SECTION 3. EFFECTIVENESS. This Amendment shall become effective on the
date that (a) the Administrative Agent shall have received satisfactory evidence
that this Amendment has been duly executed and delivered by the Borrower, the
Guarantors and the Required Lenders; (b) the Administrative Agent shall have
received a completed Compliance Certificate from the Borrower demonstrating pro
forma compliance with the convents set forth in Section 7.01 of the Credit
Agreement after giving effect to the issuance of the Convertible Notes; (c) the
Administrative Agent shall have received any other documents relating hereto or
with respect to the Convertible Notes that shall be reasonably requested by the
Required Lenders or the Administrative Agent prior to the date hereof; and (d)
the Administrative Agent shall have been reimbursed for all legal fees then due
and payable by the Borrower and invoiced prior to the date hereof.
SECTION 4. LIMITED EFFECT. Except as expressly provided in this
Amendment, the Credit Agreement and each other Loan Document shall continue to
be, and shall remain, in full
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force and effect and this Amendment shall not be deemed or otherwise construed
(a) to be a waiver of, or consent to or a modification or amendment of, any
other term or condition of the Credit Agreement or any other Loan Document, (b)
to prejudice any other right or remedies that the Administrative Agent or the
Lenders, or any of them, may now have or may have in the future under or in
connection with the Credit Agreement or the Loan Documents, as such documents
may be amended, restated or otherwise modified from time to time, (c) to be a
commitment or any other undertaking or expression of any willingness to engage
in any further discussion with the Borrower or any other person, firm or
corporation with respect to any waiver, amendment, modification or any other
change to the Credit Agreement or the Loan Documents or any rights or remedies
arising in favor of the Lenders or the Administrative Agent, or any of them,
under or with respect to any such documents or (d) to be a waiver of, or consent
to or a modification or amendment of, any other term or condition of any other
agreement by and among the Borrower, on the one hand, and the Administrative
Agent or any other Lender, on the other hand. References in the Credit Agreement
(including references to such Credit Agreement as amended hereby) to "this
Agreement" (and indirect references such as "hereunder", "hereby", "herein", and
"hereof") and in any Loan Document to the Credit Agreement shall be deemed to be
references to the Credit Agreement as amended hereby.
SECTION 5. REPRESENTATIONS AND WARRANTIES/NO DEFAULT. By its execution
hereof, and after giving effect to this Amendment, the Borrower hereby certifies
that:
(a) each of the representations and warranties set forth in the Credit
Agreement and the other Loan Documents is true and correct in all material
respects as of the date hereof as if fully set forth herein (other than
representations and warranties which speak as of a specific date pursuant to the
Credit Agreement, which representations and warranties shall have been true and
correct as of such specific dates) and that as of the date hereof no Default or
Event of Default has occurred and is continuing,
(b) the execution, delivery and performance of this Amendment have been
authorized by all requisite corporate action on the part of the Borrower and the
Guarantors, and
(c) attached hereto as Schedule 1 is a complete listing of all
Securities Accounts (as defined in the Collateral Agreement) owned by any Loan
Party in existence as of the date hereof.
SECTION 6. CONVERTIBLE NOTE DOCUMENTS. The Borrower shall deliver the
definitive Convertible Note Documents, which shall be substantially similar to
the draft Convertible Note Documents previously provided to the Administrative
Agent.
SECTION 7. ACKNOWLEDGEMENTS. By their execution hereof, each of the
Borrower and the Guarantors hereby expressly (a) consents to the modifications
and amendments set forth in this Amendment, (b) reaffirms all of its respective
covenants, representations, warranties and other obligations set forth in each
of the Loan Documents to which it is a party and (c) acknowledges, represents
and agrees that its respective covenants, representations, warranties and other
obligations set forth in each of the Loan Documents to which it is a party
remain in full force and effect.
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SECTION 8. EXPENSES. The Borrower shall pay all reasonable
out-of-pocket expenses of the Administrative Agent in connection with the
preparation, execution and delivery of this Amendment, including, without
limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent.
SECTION 9. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 10. COUNTERPARTS. This Amendment may be executed in separate
counterparts, each of which when executed and delivered is an original but all
of which taken together constitute one and the same instrument.
SECTION 11. FAX TRANSMISSION.A facsimile, telecopy or other
reproduction of this Amendment may be executed by one or more parties hereto,
and an executed copy of this Amendment may be delivered by one or more parties
hereto by facsimile or similar instantaneous electronic transmission device
pursuant to which the signature of or on behalf of such party can be seen, and
such execution and delivery shall be considered valid, binding and effective for
all purposes. At the request of any party hereto, all parties hereto agree to
execute an original of this Amendment as well as any facsimile, telecopy or
other reproduction hereof.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWER:
ARMOR HOLDINGS, INC., as Borrower
By: /s/ Xxxx Xxxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Corporate Controller and
Treasurer
GUARANTORS:
911EP, INC.
AHI PROPERTIES I, INC.
ARMOR ACCESSORIES, INC.
(formerly known as Break Free Armor Corp.)
ARMOR BRANDS, INC.
ARMORGROUP SERVICES, LLC
ARMOR HOLDINGS GP, LLC
ARMOR HOLDINGS LP, LLC
ARMOR HOLDINGS FORENSICS, L.L.C.
ARMOR HOLDINGS PRODUCTS, L.L.C.
ARMOR HOLDINGS PROPERTIES, INC.
ARMOR HOLDINGS MOBILE SECURITY, L.L.C.
ARMOR SAFETY PRODUCTS COMPANY
B-SQUARE, INC.
BREAK-FREE, INC.
CASCO INTERNATIONAL, INC.
CDR INTERNATIONAL, INC.
DEFENSE TECHNOLOGY CORPORATION OF AMERICA
IDENTICATOR, INC.
MONADNOCK LIFETIME PRODUCTS, INC., a
Delaware corporation
MONADNOCK LIFETIME PRODUCTS, INC. a New
Hampshire corporation
MONADNOCK POLICE TRAINING COUNCIL, INC.
Each of the above
By: /s/ Xxxx Xxxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
ODV HOLDINGS CORP.
NEW TECHNOLOGIES ARMOR, INC.
X'XXXX-XXXX & XXXXXXXXXX ARMORING
COMPANY, L.L.C.
PRO-TECH ARMORED PRODUCTS OF
MASSACHUSETTS, INC.
RAMTECH DEVELOPMENT CORP.
SAFARILAND GOVERNMENT SALES, INC.
SAFARI LAND LTD., INC.
SPEEDFEED ACQUISITION CORP.
THE O'GARA COMPANY
CYCONICS INTERNATIONAL TRAINING
SERVICES, INC.
(formerly known as USDS, INC.)
HATCH IMPORTS, INC.
Each of the above
By: /s/ Xxxx Xxxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
NAP PROPERTIES, LTD., A CALIFORNIA LIMITED
PARTNERSHIP
By: NAP PROPERTY MANAGERS LLC, its General
Partner
By: ARMOR HOLDINGS PROPERTIES, INC., its
Managing Member
By: /s/ Xxxx Xxxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
NAP PROPERTY MANAGERS LLC
By: ARMOR HOLDINGS PROPERTIES, INC., its
Managing Member
By: /s/ Xxxx Xxxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
KLEEN BORE, INC.
By: /s/ Xxxx Xxxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President and Assistant
Secretary
ARMOR HOLDINGS PAYROLL SERVICES, LLC
By: /s/ Xxxx Xxxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Manager
SIMULA, INC.
SIMULA AEROSPACE & DEFENSE GROUP, INC.
SIMULA POLYMER SYSTEMS, INC.
SIMULA TECHNOLOGIES, INC.
INTERNATIONAL CENTER FOR SAFETY
EDUCATION, INC.
AHI BULLETPROOF ACQUISITION CORP.
Each of the above
By: /s/ Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
Title: Secretary and Treasurer
LENDERS:
BANK OF AMERICA, N.A., as Administrative
Agent
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President and Senior Agency
Officer
BANK OF AMERICA, N.A., as L/C Issuer,
Swingline Lender and a Lender
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Syndication Agent and a Lender
By: /s/ Xxxxxxx X. Xxx
----------------------------------------
Name: Xxxxxxx X. Xxx
Title: Vice President
KEYBANK NATIONAL ASSOCIATION, as
Documentation Agent and a Lender
By: /s/ Xxxxx X. Fender
----------------------------------------
Name: Xxxxx X. Fender
Title: Senior Vice President
