THIRD AMENDED AND RESTATED LOAN AGREEMENT
Exhibit 10.1
THIRD AMENDED AND RESTATED LOAN AGREEMENT
Xxxxx Fargo Bank, National Association
(successor by merger to Wachovia Bank, National Association)
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
(Hereinafter referred to as the “Bank”)
Force Protection, Inc.
0000 Xxxxxxx 00
Xxxxxx, Xxxxx Xxxxxxxx 00000
Force Protection Technologies, Inc.
0000 Xxxxxxx 00
Xxxxxx, Xxxxx Xxxxxxxx 00000
Force Protection Industries, Inc.
0000 Xxxxxxx 00
Xxxxxx, Xxxxx Xxxxxxxx 00000
(Individually and collectively, “Borrower”)
This Third Amended and Restated Loan Agreement (“Agreement”) is entered into April 29, 2010, by and between Bank and Borrower and amends and restates that certain Second Amended and Restated Loan Agreement of Borrower and Bank dated October 31, 2008.
This Agreement applies to the loan or loans (individually and collectively, the “Loan”) evidenced by one or more promissory notes dated of even date herewith or other notes subject hereto, as modified from time to time (whether one or more, the “Note”), the standby letters of credit issued hereunder (each, a “Letter of Credit” and collectively, the “Letters of Credit”) and all Loan Documents. The terms “Loan Documents” and “Obligations,” as used in this Agreement, are defined in the Note.
Relying upon the covenants, agreements, representations and warranties contained in this Agreement, Bank is willing to extend credit to Borrower upon the terms and subject to the conditions set forth herein, and Bank and Borrower agree as follows:
LETTERS OF CREDIT. Upon the request of Borrower, Bank shall issue standby Letters of Credit, provided, the aggregate amount available to be drawn under all standby Letters of Credit plus the aggregate amount of unreimbursed drawings under all standby Letters of Credit at any one time does not exceed $5,000,000.00, and further provided, no standby Letter of Credit shall expire more than 365 days after the date it is issued. Notwithstanding anything to the contrary contained herein, the aggregate outstanding principal balance of Advances (as defined in the line of credit Amended and Restated Promissory Note in the amount of $40,000,000.00, dated of even date herewith) plus the aggregate amount available to be drawn under all Letters of Credit plus the aggregate amount of unreimbursed drawings under all Letters of Credit at any one time shall not exceed $40,000,000.00. The Letters of Credit are to be used by Borrower solely for trade credit enhancement. Bank’s obligation to issue Letters of Credit shall terminate if Borrower is in default (however denominated) under the Note or the other Loan Documents, or in any case, if not sooner terminated, on April 30, 2012.
LETTER OF CREDIT FEES. Borrower shall pay to Bank, at such times as Bank shall require, standard Bank fees in connection with Letters of Credit, as agreed upon by Bank and Borrower.
REPRESENTATIONS. Borrower represents that from the date of this Agreement and until final payment in full of the Obligations: Accurate Information. All information now and hereafter furnished to Bank is and will be true, correct and complete in all material respects. Any such information relating to Borrower’s financial condition will accurately reflect Borrower’s financial condition as of the date(s) thereof, (including
all contingent liabilities of every type), and Borrower further represents that its financial condition has not changed materially or adversely since the date(s) of such documents. Authorization; Non-Contravention. The execution, delivery and performance by Borrower and any guarantor, as applicable, of this Agreement and other Loan Documents to which it is a party are within its power, have been duly authorized as may be required and, if necessary, by making appropriate filings with any governmental agency or unit and are the legal, binding, valid and enforceable obligations of Borrower and any guarantors; and do not (i) contravene, or constitute (with or without the giving of notice or lapse of time or both) a violation of any provision of applicable law, a violation of the organizational documents of Borrower or any guarantor, or a default under any agreement, judgment, injunction, order, decree or other instrument binding upon or affecting Borrower or any guarantor, (ii) result in the creation or imposition of any lien (other than the lien(s) created by the Loan Documents) on any of Borrower’s or any guarantor’s assets, or (iii) give cause for the acceleration of any obligations of Borrower or any guarantor to any other creditor. Asset Ownership. Borrower has good and marketable title to all of the properties and assets reflected on the balance sheets and financial statements supplied Bank by Borrower, and all such properties and assets are free and clear of mortgages, security deeds, pledges, liens, charges, and all other encumbrances, except as otherwise disclosed in Borrower’s financial statements filed with Securities and Exchange Commission or to Bank by Borrower in writing and approved by Bank (“Permitted Liens”). To Borrower’s knowledge, no default has occurred under any Permitted Liens and no claims or interests adverse to Borrower’s present rights in its properties and assets have arisen. Discharge of Liens and Taxes. Borrower has duly filed, paid and/or discharged all taxes or other claims that may become a lien on any of its property or assets, except to the extent that such items are being appropriately contested in good faith and an adequate reserve for the payment thereof is being maintained. Sufficiency of Capital. Borrower is not, and after consummation of this Agreement and after giving effect to all indebtedness incurred and liens created by Borrower in connection with the Note and any other Loan Documents, will not be, insolvent within the meaning of 11 U.S.C. § 101, as in effect from time to time. Compliance with Laws. Borrower and any subsidiary and affiliate of Borrower and any guarantor are in compliance in all material respects with all federal, state and local laws, rules and regulations applicable to its properties, operations, business, and finances, including, without limitation, any federal or state laws relating to liquor (including 18 U.S.C. § 3617, et seq.) or narcotics (including 21 U.S.C. § 801, et seq.) and/or any commercial crimes; all applicable federal, state and local laws and regulations intended to protect the environment; and the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), if applicable. None of Borrower, or any subsidiary or affiliate of Borrower or any guarantor is a Sanctioned Person or has any of its assets in a Sanctioned Country or does business in or with, or derives any of its operating income from investments in or transactions with, Sanctioned Persons or Sanctioned Countries in violation of economic sanctions administered by OFAC. The proceeds from the Loan will not be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Country. “OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control. “Sanctioned Country” means a country subject to a sanctions program identified on the list maintained by OFAC and available at xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxx/xxxxx.xxxxx, or as otherwise published from time to time. “Sanctioned Person” means (i) a person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/ ofac/programs/index.shtml, or as otherwise published from time to time, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or (C) a person resident in a Sanctioned Country to the extent subject to a sanctions program administered by OFAC. Organization and Authority. Each corporation, partnership or limited liability company Borrower and/or guarantor, as applicable, is duly created, validly existing and in good standing under the laws of the state of its organization, and has all powers, governmental licenses, authorizations, consents and approvals required to operate its business as now conducted. Each corporation, partnership or limited liability company Borrower and/or guarantor, as applicable, is duly qualified, licensed and in good standing in each jurisdiction where qualification or licensing is required by the nature of its business or the character and location of its property, business or customers, and in which the failure to so qualify or be licensed, as the case may be, in the aggregate, could have a material adverse effect on the business, financial position, results of operations, properties or prospects of Borrower or any such guarantor. No Litigation. There are no pending material suits, claims or demands against Borrower or any guarantor except as disclosed in Borrowers financial statements filed with the Securities and Exchange Commission
or to Bank by Borrower in writing. To the best of Borrower’s knowledge, there are no threatened material suits, claims or demands against Borrower or any guarantor that have not been disclosed to Bank by Borrower in writing. ERISA. Each employee pension benefit plan, as defined in ERISA, maintained by Borrower meets, as of the date hereof, the minimum funding standards of ERISA and all applicable regulations thereto and requirements thereof, and of the Internal Revenue Code of 1986, as amended. No “Prohibited Transaction” or “Reportable Event” (as both terms are defined by ERISA) has occurred with respect to any such plan. Indemnity. Borrower will indemnify Bank and its affiliates from and against any losses, liabilities, claims, damages, penalties or fines imposed upon, asserted or assessed against or incurred by Bank arising out of the inaccuracy or breach of any of the representations contained in this Agreement or any other Loan Documents.
AFFIRMATIVE COVENANTS. Borrower agrees that from the date hereof and until final payment in full of the Obligations, unless Bank shall otherwise consent in writing, Borrower will: Access to Books and Records. Allow Bank, or its agents, during normal business hours, access to the books, records and such other documents of Borrower as Bank shall reasonably require, and allow Bank, at Borrower’s expense, to inspect, audit and examine the same and to make extracts therefrom and to make copies thereof. Business Continuity. Conduct its business in substantially the same manner and locations as such business is now and has previously been conducted. Certificate of Full Compliance From Officer. Deliver to Bank, with the financial statements required herein, a certification by Borrower’s chief financial officer, or its equivalent, that Borrower is in full compliance with the Loan Documents. Compliance with Other Agreements. Comply with all terms and conditions contained in this Agreement, and any other Loan Documents, and swap agreements, if applicable, as defined in 11 U.S.C. § 101, as in effect from time to time. Estoppel Certificate. Furnish, within 15 days after request by Bank, a written statement duly acknowledged of the amount due under the Loan and identifying each outstanding Letter of Credit, if any, and whether offsets or defenses exist against the Obligations. Insurance. Maintain adequate insurance coverage with respect to its properties and business against loss or damage of the kinds and in the amounts customarily insured against by companies of established reputation engaged in the same or similar businesses including, without limitation, commercial general liability insurance, workers compensation insurance, and business interruption insurance; all acquired in such amounts and from such companies as Bank may reasonably require. Maintain Properties. Maintain, preserve and keep its property in good repair, working order and condition (normal wear and tear excepted), making all replacements, additions and improvements thereto necessary for the proper conduct of its business, unless prohibited by the Loan Documents. Notice of Default and Other Notices. (a) Notice of Default. Furnish to Bank immediately upon becoming aware of the existence of any condition or event which constitutes a Default (as defined in the Loan Documents) or any event which, upon the giving of notice or lapse of time or both, may become a Default, written notice specifying the nature and period of existence thereof and the action which Borrower is taking or proposes to take with respect thereto. (b) Other Notices. Promptly notify Bank in writing of (i) any material adverse change in its financial condition or its business; (ii) any default under any material agreement, contract or other instrument to which it is a party or by which any of its properties are bound, or any acceleration of the maturity of any indebtedness owing by Borrower; (iii) any material adverse claim against or affecting Borrower or any part of its properties; (iv) the commencement of, and any material determination in, any litigation with any third party or any proceeding before any governmental agency or unit affecting Borrower; and (v) at least 30 days prior thereto, any change in Borrower’s name or address as shown above, and/or any change in Borrower’s structure. Other Financial Information. Deliver promptly such other information regarding the operation, business affairs, and financial condition of Borrower which Bank may reasonably request. Payment of Debts. Pay and discharge when due, and before subject to penalty or further charge, and otherwise satisfy before maturity or delinquency, all obligations, debts, taxes, and liabilities of whatever nature or amount, except those which Borrower in good faith disputes. Reports and Proxies. Deliver to Bank, promptly, a copy of all financial statements, reports, notices, and proxy statements, sent by Borrower to stockholders, and all regular or periodic reports required to be filed by Borrower with any governmental agency or authority. Securities and Exchange Commission. Except where non-compliance will not cause a material adverse change as set forth in the Note, Borrower shall comply with all Securities and Exchange Commission rules, regulations, and requirements at all times. National Association of Securities Dealers Automated Quotations (NASDAQ). Except where non-compliance will not cause a
material adverse change as set forth in the Note, Borrower shall comply with all National Association of Securities Dealers Automated Quotations (NASDAQ) rules, regulations, and requirements at all times.
NEGATIVE COVENANTS. Borrower agrees that from the date hereof and until final payment in full of the Obligations, unless Bank shall otherwise consent in writing, Borrower will not: Change in Fiscal Year. Change its fiscal year. Encumbrances. Create, assume, or permit to exist any mortgage, security deed, deed of trust, pledge, lien, charge or other encumbrance on any of its assets, whether now owned or hereafter acquired, other than: (i) security interests required by the Loan Documents; (ii) liens for taxes contested in good faith; or (iii) Permitted Liens. Investments. Purchase any stock, securities, or evidence of indebtedness of any other person or entity except investments in direct obligations of the United States Government and certificates of deposit of United States commercial banks having a tier 1 capital ratio of not less than 6% and then in an amount not exceeding 10% of the issuing bank’s unimpaired capital and surplus. Default on Other Contracts or Obligations. Default on any material contract with or obligation when due to a third party or default in the performance of any material obligation to a third party incurred for money borrowed. Government Intervention. Permit the assertion or making of any seizure, vesting or intervention by or under authority of any governmental entity, as a result of which the management of Borrower or any guarantor is displaced of its authority in the conduct of its respective business or such business is curtailed or materially impaired. Judgment Entered. Permit the entry of any material monetary judgment or the assessment against, the filing of any tax lien against, or the issuance of any writ of garnishment or attachment against any material property of or debts due. Prepayment of Other Debt. Retire any long-term debt entered into prior to the date of this Agreement at a date in advance of its legal obligation to do so. Retire or Repurchase Capital Stock. Retire or otherwise acquire any of its capital stock; provided however, Borrower shall be permitted to retire or otherwise acquire its capital stock up to a total of $10,000,000 in the aggregate after such date as long as Borrower is not in default under any of the loan documents and such purchases in the aggregate do not cause a default.
ANNUAL FINANCIAL STATEMENTS. Borrower shall deliver to Bank, within one hundred twenty (120) days after the close of each fiscal year, unqualified, audited financial statements reflecting its operations during such fiscal year, including, without limitation, a balance sheet, profit and loss statement and statement of cash flows, with supporting schedules; all on a consolidated and consolidating basis with respect to Borrower and its subsidiaries, affiliates and parent or holding company, as applicable, and in reasonable detail, prepared in conformity with generally accepted accounting principles, applied on a basis consistent with that of the preceding year. All such statements shall be examined by an independent certified public accountant firm acceptable to Bank. The opinion of such independent certified public accountant shall not be acceptable to Bank if qualified due to any limitations in scope imposed by Borrower or any other person or entity. Any other qualification of the opinion by the accountant shall render the acceptability of the financial statements subject to Bank’s approval.
PERIODIC FINANCIAL STATEMENTS. Borrower shall deliver to Bank; within 45 days after the end of Borrower’s first, second and third quarters, and within 75 days of the fourth quarter; unaudited management-prepared quarterly financial statements including, without limitation, a balance sheet, profit and loss statement and statement of cash flows, with supporting schedules; all on a consolidated and consolidating basis with respect to Borrower and its subsidiaries, affiliates and parent or holding company, as applicable, all in reasonable detail and prepared in conformity with generally accepted accounting principles, applied on a basis consistent with that of the preceding year. Such statements shall be certified as to their correctness by a principal financial officer of Borrower and in each case, if audited statements are required, subject to audit and year-end adjustments.
OTHER REPORTING. Budget. Borrower shall provide a budget on or before December 31st of each year for the subsequent year, all in form and substance acceptable to Bank. Covenant Compliance Certificate. Borrow will submit concurrently with the Annual Financial Statements and Periodic Financial Statements, a Covenant Compliance Certificate acceptable in form and substance to Bank with attached detailed calculations of the Financial Covenants. Borrower shall provide to Bank such other financial information that Bank may reasonably request from time-to-time.
FINANCIAL COVENANTS. Borrower agrees to the following provisions from the date hereof until final payment in full of the Obligations, unless Bank shall otherwise consent in writing, using the financial information for Borrower, its subsidiaries, affiliates and its holding or parent company, as applicable: Deposit Relationship. Borrower shall maintain a non-interest bearing demand deposit and all of its other primary domestic depository and treasury services with Bank. Funded Debt to EBITDA Ratio. Borrower shall, at all times, maintain a Funded Debt to EBITDA Ratio of not more than 2.00 to 1.00. This covenant shall be calculated quarterly on a rolling four quarters basis. “Funded Debt to EBITDA Ratio” shall mean the sum of all Funded Debt divided by the sum of net income, interest expense, income taxes, depreciation, and amortization. “Funded Debt” shall mean, as applied to any person or entity, the sum of all indebtedness for borrowed money, (including, without limitation, capital lease obligations, subordinated debt (including debt subordinated to Bank), and un-reimbursed drawings under letters of credit), or any other monetary obligation evidenced by a note, bond, debenture or other agreement or similar instrument of that person or entity. Fixed Charge Coverage Ratio. Borrower shall at all times maintain a Fixed Charge Coverage Ratio of not less than 1.50 to 1.00. This covenant shall be calculated at Borrower’s fiscal year end and quarterly, on a rolling four quarters basis beginning with the quarter ending March 31, 2010. “Fixed Charge Coverage Ratio” shall mean the sum of net income before interest, taxes, depreciation and amortization plus lease expense plus rent expense divided by the sum of interest expense plus lease expense plus rent expense plus taxes plus current maturities of long term debt. Testing shall be made each calendar quarter end based on financial statements required for such quarter end to be furnished by Borrower to Bank with the calculation and results of such testing set forth in the Covenant Compliance Certificate.
CONDITIONS PRECEDENT. The obligations of Bank to make the loan and any advances and to issue any Letters of Credit pursuant to this Agreement are subject to the following conditions precedent: Letter of Credit Documents. Receipt by Bank of all documents required by Bank in connection with Letters of Credit, including without limitation, applications therefor, all in form satisfactory to Bank. Additional Documents. Receipt by Bank of such additional supporting documents as Bank or its counsel may reasonably request.
ASSIGNMENT OF CLAIMS UNDER CONTRACTS WITH THE UNITED STATES GOVERNMENT AND ITS AGENCIES. Borrower hereby agrees that, upon request of Bank, it will assign its claims under contracts with the United States government and any of its departments, agencies, divisions, and other instrumentalities to the extent of any Loans hereunder. To secure the Loans of Bank to Borrower hereunder and to such extent, Borrower agrees to take any and all actions required to assign any claims it has under such contracts, including, but not limited to, any actions necessary to comply with the Assignment of Claims Act of 1940, (31 U.S.C. 3727, 41 U.S.C. 15) and the rules and regulations promulgated thereunder. All such claims shall be assigned by Borrower within thirty (30) days of Bank’s request and Borrower shall use reasonable efforts to promptly obtain the consent of and/or acknowledgement by such governmental instrumentality.
[Signature Page Attached]
IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above, have caused this Agreement to be duly executed under seal.
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Force Protection, Inc. |
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By: |
/s/ Xxxxxxx Xxxxx |
(SEAL) |
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Xxxxxxx Xxxxx, Chief Executive Officer |
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Force Protection Technologies, Inc. |
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By: |
/s/ Xxxxxxx Xxxxx |
(SEAL) |
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Xxxxxxx Xxxxx, Chief Executive Officer |
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Force Protection Industries, Inc. |
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By: |
/s/ Xxxxxxx Xxxxx |
(SEAL) |
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Xxxxxxx Xxxxx, Chief Executive Officer |
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Xxxxx Fargo Bank, National Association (successor by merger to Wachovia Bank, National Association) |
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By: |
/s/ Xxx X. Xxxxxx, III |
(SEAL) |
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Xxx X. Xxxxxx, III, Senior Vice President |
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