Exhibit 10.1
SIXTEENTH AMENDMENT TO LOAN
AND SECURITY AGREEMENT
This SIXTEENTH AMENDMENT TO LOAN AND SECURITY
AGREEMENT (this “ Amendment ”) is entered into
as of this 29 th
day of October, 2009 by and among
BANK OF AMERICA, N.A., as successor by merger to LaSalle Business
Credit, LLC, as administrative agent and collateral agent (in such
agent capacities, “ Agent ”) for itself and all
other lenders from time to time a party hereto (“
Lenders ”), located at 135 South LaSalle Street,
Chicago, Illinois 60603-4105, PROTECTIVE APPAREL CORPORATION OF
AMERICA, a New York corporation (“ PACA ”),
POINT BLANK BODY ARMOR INC., a Delaware corporation (“
Point Blank ”) and LIFE WEAR TECHNOLOGIES, INC., a
Florida corporation (“ Life Wear ”, and together
with PACA and Point Blank, collectively, the “
Borrowers ” and each, individually, a “
Borrower ”) and POINT BLANK SOLUTIONS, INC., a
Delaware corporation (the “ Parent ” and a
“ Guarantor ”). Unless otherwise
specified herein, capitalized terms used in this Amendment shall
have the meanings ascribed to them by the Loan Agreement (as
hereinafter defined).
RECITALS
WHEREAS, Borrowers, Parent, Agent and Lenders
have entered into that certain Amended and Restated Loan and
Security Agreement dated as of April 3, 2007 (as amended,
supplemented, restated or otherwise modified from time to time, the
“ Loan Agreement ”);
WHEREAS, Borrowers, Parent, Agent and Lenders
have agreed to the amendments set forth herein;
NOW THEREFORE, in consideration of the foregoing
recitals, mutual agreements contained herein and for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrowers, Parent, Agent and Lenders hereby
agree as follows:
(a) The
definition of “Applicable Margin” set forth in Section
1 of the Loan Agreement is hereby amended and restated in its
entirety to read as follows:
“ Applicable Margin ” means
(a) 4.00% for all Term Loans that are Base Rate Loans and (b) 4.00%
for all Revolving Loans that are Base Rate Loans.
(b) The
definition of “Eligible Accounts” set forth in Section
1 of the Loan Agreement is hereby amended by adding a new sentence
to the end thereof to read as follows:
“Notwithstanding any language to the
contrary or prior practice by Agent, from and after the Sixteenth
Amendment Effective Date, no Account shall be an Eligible Account
unless (i) Agent shall have received all documentation
requested by it with respect to the Federal Assignment of Claims
Act in connection with any Account Debtor that is the United States
Government or any department, agency or instrumentality thereof and
(ii) the underlying contract shall either explicitly incorporate by
reference the “Assignment of Claims (Jan. 1986)” clause
including its “Alternate I” as set forth in “48
C.F.R. 52.232-23” or include the actual text of the clause
and its Alternate I.”
(c) The
definition of “Permitted Liens” set forth in Section 1
of the Loan Agreement is hereby amended and restated in its
entirety to read as follows:
“ Permitted Liens ” shall
mean (i) liens of lessors under lease agreements and statutory
liens of landlords, carriers, warehousemen, processors, mechanics,
materialmen or suppliers incurred in the ordinary course of
business and securing amounts not yet due or declared to be due by
the claimant thereunder; (ii) liens or security interests in favor
of Agent; (iii) zoning restrictions and easements, licenses,
covenants and other restrictions affecting the use of real property
that do not individually or in the aggregate have a material
adverse effect on Parent’s or any Borrower’s ability to
use such real property for its intended purpose in connection with
such Parent’s or Borrower’s business; (iv) liens in
connection with purchase money indebtedness and capitalized leases
otherwise permitted pursuant to this Agreement; provided ,
that such liens attach only to the specific assets the purchase of
which was financed by such purchase money indebtedness or which is
the subject of such capitalized leases; (v) liens securing the
payment of taxes not yet due or the payment of which is being
contested in good faith and by appropriate proceedings;
provided , that (a) adequate reserves for such taxes have
been established to the extent required by generally accepted
accounting principles, consistently applied, and (b) no notice of
any such lien has been filed in any jurisdiction;
(vi) deposits under workers compensation, unemployment insurance or
social security laws, or to secure the performance of bids,
tenders, contracts or leases, or to secure statutory obligations,
surety or appeal bonds, or other bonds in the ordinary course of
business; (vii) liens securing judgments or awards which do not
constitute Events of Default hereunder and which are being appealed
while a stay is in effect; (viii) the filing of Uniform Commercial
Code financing statements solely as a precautionary measure in
connection with operating leases or consignment of goods; (ix)
leases or subleases of property of Parent or any Borrower, in each
case entered into in the ordinary course of such Person’s
business; (x) licenses or sublicenses of intellectual property
granted by Parent or any Borrower in the ordinary course of its
business and not interfering in any material respect with the
conduct of the business of Parent and the Borrowers, taken as a
whole; (xi) liens securing Acquired Debt incurred or assumed in
connection with any Permitted Acquisition; provided such
liens attach only (a) in the case of mortgage indebtedness, to the
real estate previously financed by such lienholder, (b) in the case
of indebtedness with respect to capitalized leases, to the assets
which are the subject of such capitalized leases, or (c) in the
case of any other indebtedness in respect of purchase money
security interest financing, to the assets which are the subject of
such purchase money security interest financing; it being
understood and agreed that in no event shall any liens under this
clause (xii) attach to any assets constituting Collateral; (xiii)
liens securing the Subordinated Indebtedness if a subordination
agreement in favor of Agent and Lenders in form and substance
acceptable to Agent is executed and delivered to Agent relative
thereto (such liens, the “ Subordinated Liens
”), (xiv) other liens that secure obligations, the aggregate
principal amount of which does not exceed, as of any date of
determination, One Hundred Thousand and No/100 Dollars ($100,000);
and (xv) liens to which Agent has given its prior written
consent.
(d) Section
1 of the Loan Agreement is hereby further amended by the addition
of the following definitions, which shall be inserted in their
appropriate alphabetical order:
“ Sixteenth Amendment ”
means the Sixteenth Amendment to Loan and Security Agreement dated
as of October 29th, 2009 among Borrowers, Parent, the Agent and the
Lenders signatory thereto.
“ Sixteenth Amendment Effective
Date ” means the date on which the conditions set forth
in Section Two of the Sixteenth Amendment are satisfied.
“ Sixteenth Amendment Reserve
” means, for the relevant period, (x) the dollar amount of
the “Availability Block” set forth below for such
period minus (y) settlement costs in respect of the
Department of Justice matters regarding Zylon and the investigation
commenced by the Securities and Exchange Commission involving
Parent and Borrowers (the “ Specific Settlement Costs
”) paid in cash after the Sixteenth Amendment Effective Date
in an aggregate amount not to exceed $1,000,000:
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Sixteenth
Amendment
Effective Date
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“ Specific Settlement Costs
” shall have the meaning specified in the defined
term “Sixteenth Amendment Reserve.”
“ Subordinated Indebtedness
” shall have the meaning specified in Section 13(b)(x)
hereof.
“ Subordinated Lien ” shall
have the meaning specified in clause (xiii) of the definition
“Permitted Liens”.
“ Subordination Agreement ”
means the Subordination and Intercreditor Agreement dated as of
October 29th, 2009 between Agent and the Subordinated Creditor (as
defined therein) governing the Subordinated Lien and the
Subordinated Indebtedness.
(e) The
definition of “Maximum Revolving Loan Limit” set forth
in Section 2(a) of the Loan Agreement is hereby amended by deleting
the reference to the amount of “Thirty Million and No/100
Dollars ($30,000,000)” and replacing it with the reference
“(A) during the period from the Sixteenth Amendment Effective
Date through January 29, 2010, Fifteen Million and No/100 Dollars
($15,000,000), (B) during the period from January 30, 2010 through
February 11, 2010, Ten Million and No/100 Dollars ($10,000,000) and
(C) from and after February 12, 2010, Five Million and No/100
Dollars ($5,000,000)”.
(f) Clause
(v) of Section 2(a) of the Loan Agreement is hereby amended and
restated in its entirety to read as follows:
“(v) the Sixteenth Amendment Reserve;
minus ”
(g) Section
2(a) of the Loan Agreement is hereby further amended by adding one
new sentence to the end of the penultimate paragraph thereof to
read as follows:
“Notwithstanding anything to the contrary
herein, all Revolving Loans made on or after the Sixteenth
Amendment Effective Date shall be Base Rate
Loans.”
(h) Section
2 of the Loan Agreement is hereby amended by amending and restating
Section 2(e) to read as follows:
“(e)
Term Loan . (i) The parties hereto agree that as
of October 31, 2008, a portion of the outstanding principal amount
of Revolving Loans equal to $10,000,000 shall be converted into a
separate term loan issued by the Borrowers in the original
principal amount of $10,000,000 (herein, the “ Initial
Term Loan ”) evidenced by this Agreement and any
promissory note executed under Section 2(c) of this Agreement and
shall be allocated ratably to the Lenders holding Revolving Loans
as of such date. Simultaneously with such conversion,
the outstanding principal amount of the Revolving Loans shall be
deemed to be reduced by $10,000,000. The Lenders agree
to make an incremental term loan to Borrowers on the Sixteenth
Amendment Eff
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