Exhibit 10.3

 

SECOND AMENDED AND RESTATED TERM NOTE

 

$17,103,291.61

 

Baltimore, Maryland

 

 

 

 

 

April     , 2009

 

FOR VALUE RECEIVED, TVI CORPORATION, a Maryland corporation (“TVI”), CAPA
MANUFACTURING CORP., a Maryland corporation (“CAPA”), SAFETY TECH INTERNATIONAL,
INC., a Maryland corporation (“Safety Tech”) and SIGNATURE SPECIAL EVENT
SERVICES, INC., a Maryland corporation, formerly named “TVI Holdings One, Inc.”
(“Signature TVI”), jointly and severally (each of TVI, CAPA, Safety Tech and
Signature TVI, a “Borrower”; TVI, CAPA, Safety Tech and Signature TVI,
collectively, the “Borrowers”), promise to pay to the order of BRANCH BANKING
AND TRUST COMPANY, a North Carolina banking corporation (the “Lender”), the
principal sum of SEVENTEEN MILLION ONE HUNDRED THREE THOUSAND TWO HUNDRED
NINETY-ONE DOLLARS AND SIXTY-ONE CENTS ($17,103,291.61) (the “Principal Sum”),
together with interest thereon at the rate or rates hereinafter provided, in
accordance with the following:

 

1.                                       Interest.

 

Commencing as of the date hereof and continuing until repayment in full of all
sums due hereunder, the unpaid Principal Sum shall bear interest in accordance
with Section 2.5 (Interest and Certain Fee Provisions) of the Financing
Agreement (as defined hereinafter).

 

2.                                       Payments and Maturity.

 

The unpaid Principal Sum, together with interest thereon at the rate or rates
provided above, shall be payable as follows:

 

(a)                                  Interest on the unpaid Principal Sum shall
be due and payable in accordance with Section 2.5.3 (Payment of Interest) of the
Financing Agreement;

 

(b)                                 Principal payments on the outstanding
Principal Sum shall be due and payable in accordance with Section 2.2.3 (Term
Loan Payments);

 

(c)                                  Notwithstanding anything contained herein
to the contrary, the Borrowers shall pay to the Lender the Term Loan Mandatory
Prepayments set forth in Section 2.2.4 (Mandatory Prepayments of the Term Loan)
of the Financing Agreement; and

 

(d)                                 Unless sooner paid, the unpaid Principal
Sum, together with interest accrued and unpaid thereon, shall be due and payable
in full on the earlier of the Term Loan Maturity Date (as defined in the
Financing Agreement).

 

3.                                       Default Interest.

 

Upon the occurrence and during the continuance of an Event of Default (as
hereinafter defined), the unpaid Principal Sum shall bear interest thereafter at
the Post-Default Rate (as defined in the Financing Agreement) until such Event
of Default is cured.

 

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4.                                       Late Charges.

 

If the Borrowers shall fail to make any payment under the terms of this Note
within ten (10) days after the date such payment is due, the Borrowers shall pay
to the Lender on demand a late charge equal to five percent (5%) of such
payment.

 

5.                                       Application and Place of Payments.

 

Unless otherwise set forth in the Financing Agreement, all payments, made on
account of this Note shall be applied in accordance with Section 2.2 (The Term
Loan) of the Financing Agreement.

 

6.                                       Prepayment.

 

Without implying any limitation on the Borrowers’ obligation to pay the Early
Termination Fee as and when provided in Section 2.5.2 (Early Termination Fee) of
the Financing Agreement, the Borrowers may prepay the Principal Sum in whole or
in part at any time without premium or penalty.

 

7.                                       Financing Agreement and Other Financing
Documents.

 

This Note is the “Term Note” described in an Amended and Restated Financing and
Security Agreement dated as of February 22, 2008 by and among the Borrowers and
the Lender (as amended by (a) that certain First Amendment to Amended and
Restated Financing and Security Agreement dated as of July 3, 2008, (b) that
certain Limited Forbearance Agreement dated as of November 20, 3008, (c) that
certain Acknowledgment and Agreement dated as of January 30, 2009, (d) that
certain Agreement for Post-Petition Financing dated as of even date herewith and
(e) as otherwise amended, modified, restated, substituted, extended and renewed
at any time and from time to time, the “Financing Agreement”).  The indebtedness
evidenced by this Note is included within the meaning of the term “Obligations”
as defined in the Financing Agreement.  This Note is one of the “Financing
Documents” (as that term is defined in the Financing Agreement).

 

8.                                       Security.

 

This Note is secured as provided in the Financing Agreement.

 

9.                                       Events of Default.

 

The occurrence of any one or more of the following events shall constitute an
event of default (individually, an “Event of Default” and collectively, the
“Events of Default”) under the terms of this Note:

 

(a)                                  The failure of the Borrowers to pay to the
Lender when due any and all amounts payable by the Borrowers to the Lender under
the terms of this Note; or

 

(b)                                 The occurrence of an event of default (as
defined therein) under the terms and conditions of any of the other Financing
Documents.

 

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10.                                 Remedies.

 

Upon the occurrence and during the continuance of an Event of Default, at the
option of the Lender, all amounts payable by the Borrowers to the Lender under
the terms of this Note shall immediately become due and payable by the Borrowers
to the Lender without notice to the Borrowers or any other person, and the
Lender shall have all of the rights, powers, and remedies available under the
terms of this Note, any of the other Financing Documents and all applicable
laws.  The Borrowers and all endorsers, guarantors, and other parties who may
now or in the future be primarily or secondarily liable for the payment of the
indebtedness evidenced by this Note hereby severally waive presentment, protest
and demand, notice of protest, notice of demand and of dishonor and non-payment
of this Note and expressly agree that this Note or any payment hereunder may be
extended from time to time without in any way affecting the liability of the
Borrowers, guarantors and endorsers.

 

11.                                 Expenses.

 

The Borrowers promise to pay to the Lender on demand by the Lender all costs and
expenses incurred by the Lender in connection with the collection and
enforcement of this Note, including, without limitation, reasonable attorneys’
fees and expenses and all court costs.

 

12.                                 Notices.

 

Any notice, request, or demand to or upon the Borrowers or the Lender shall be
deemed to have been properly given or made when delivered in accordance with
Section 8.1 (Notices) of the Financing Agreement.

 

13.                                 Miscellaneous.

 

Each right, power, and remedy of the Lender as provided for in this Note or any
of the other Financing Documents, or now or hereafter existing under any
applicable law or otherwise shall be cumulative and concurrent and shall be in
addition to every other right, power, or remedy provided for in this Note or any
of the other Financing Documents or now or hereafter existing under any
applicable law, and the exercise or beginning of the exercise by the Lender of
any one or more of such rights, powers, or remedies shall not preclude the
simultaneous or later exercise by the Lender of any or all such other rights,
powers, or remedies.  No failure or delay by the Lender to insist upon the
strict performance of any term, condition, covenant, or agreement of this Note
or any of the other Financing Documents, or to exercise any right, power, or
remedy consequent upon a breach thereof, shall constitute a waiver of any such
term, condition, covenant, or agreement or of any such breach, or preclude the
Lender from exercising any such right, power, or remedy at a later time or
times.  By accepting payment after the due date of any amount payable under the
terms of this Note, the Lender shall not be deemed to waive the right either to
require prompt payment when due of all other amounts payable under the terms of
this Note or to declare an Event of Default for the failure to effect such
prompt payment of any such other amount.  No course of dealing or conduct shall
be effective to amend, modify, waive, release, or change any provisions of this
Note.

 

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14.                                 Partial Invalidity.

 

In the event any provision of this Note (or any part of any provision) is held
by a court of competent jurisdiction to be invalid, illegal, or unenforceable in
any respect, such invalidity, illegality, or unenforceability shall not affect
any other provision (or remaining part of the affected provision) of this Note;
but this Note shall be construed as if such invalid, illegal, or unenforceable
provision (or part thereof) had not been contained in this Note, but only to the
extent it is invalid, illegal, or unenforceable.

 

15.                                 Captions.

 

The captions herein set forth are for convenience only and shall not be deemed
to define, limit, or describe the scope or intent of this Note.

 

16.                                 Applicable Law.

 

The Borrowers acknowledge and agree that this Note shall be governed by the laws
of the State of Maryland, even though for the convenience and at the request of
the Borrowers, this Note may be executed elsewhere, and solely to the extent
applicable, the Bankruptcy Code (as defined in the Financing Agreement).

 

17.                                 Consent to Jurisdiction.

 

Each Borrower irrevocably submits to the jurisdiction of the Bankruptcy Court
(as defined in the Financing Agreement) any state or federal court sitting in
the State of Maryland over any suit, action, or proceeding arising out of or
relating to this Note or any of the other Financing Documents.  Each Borrower
irrevocably waives, to the fullest extent permitted by law, any objection that
such Borrower may now or hereafter have to the laying of venue of any such suit,
action, or proceeding brought in any such court and any claim that any such
suit, action, or proceeding brought in any such court has been brought in an
inconvenient forum.  Final judgment in any such suit, action, or proceeding
brought in any such court shall be conclusive and binding upon each Borrower and
may be enforced in any court in which any Borrower is subject to jurisdiction by
a suit upon such judgment, provided that service of process is effected upon the
Borrower as provided in this Note or as otherwise permitted by applicable law.

 

18.                                 Service of Process.

 

Each Borrower hereby consents to process being served in any suit, action, or
proceeding instituted in connection with this Note by (a) the mailing of a copy
thereof by certified mail, postage prepaid, return receipt requested, to the
Borrowers and (b) serving a copy thereof upon the registered agent for TVI as
set forth in the records of the Maryland State Department of Assessments and
Taxation, the agent hereby designated and appointed by each of the Borrowers as
each Borrower’s agent for service of process.  Each Borrower irrevocably agrees
that such service shall be deemed in every respect effective service of process
upon the Borrower in any such suit, action or proceeding, and shall, to the
fullest extent permitted by law, be taken and held to be valid personal service
upon the Borrower.  Nothing in this Section shall affect the right of the Lender
to serve process in any manner otherwise permitted by law or limit the right of
the

 

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Lender otherwise to bring proceedings against any Borrower in the courts of any
jurisdiction or jurisdictions.

 

19.                                 No Novation.

 

This Note amends and restates, is intended as a replacement of, and is in
substitution for, that certain Amended and Restated Term Note dated as of
February 22, 2008 (the “Original Note”) from the Borrowers, as maker, payable to
the order of the Lender, but is not intended as a novation of the Original Note
or any of the Obligations evidenced by the Original Note.  All references in the
Financing Agreement or any of the other Financing Documents to the Term Note
shall mean the Original Note, as amended and restated in accordance with the
provisions of this Note.

 

20.                                 Confessed Judgment.

 

UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, EACH BORROWER HEREBY AUTHORIZES ANY
ATTORNEY DESIGNATED BY THE LENDER OR ANY CLERK OF ANY COURT OF RECORD TO APPEAR
FOR SUCH BORROWER IN ANY COURT OF RECORD AND CONFESS JUDGMENT WITHOUT PRIOR
HEARING AGAINST THE BORROWER IN FAVOR OF THE LENDER FOR AND IN THE AMOUNT OF THE
UNPAID PRINCIPAL SUM, ALL INTEREST ACCRUED AND UNPAID THEREON, ALL OTHER AMOUNTS
PAYABLE BY THE BORROWER TO THE LENDER UNDER THE TERMS OF THIS NOTE OR ANY OF THE
OTHER FINANCING DOCUMENTS, COSTS OF SUIT, AND ATTORNEYS’ FEES OF FIFTEEN PERCENT
(15%) OF THE UNPAID PRINCIPAL SUM AND INTEREST THEN DUE HEREUNDER.  BY ITS
ACCEPTANCE OF THIS NOTE, THE LENDER AGREES THAT IN THE EVENT THE LENDER
EXERCISES AT ANY TIME ITS RIGHT TO CONFESS JUDGMENT UNDER THIS NOTE, THE LENDER
SHALL USE ITS BEST EFFORTS TO OBTAIN LEGAL COUNSEL WHO WILL CHARGE THE LENDER
FOR ITS SERVICES ON AN HOURLY BASIS, AT ITS CUSTOMARY HOURLY RATES AND ONLY FOR
THE TIME AND REASONABLE EXPENSES INCURRED.  IN NO EVENT SHALL THE LENDER ENFORCE
THE LEGAL FEES PORTION OF A CONFESSED JUDGMENT AWARD FOR AN AMOUNT IN EXCESS OF
THE FEES AND EXPENSES ACTUALLY CHARGED TO THE LENDER FOR SERVICES RENDERED BY
ITS COUNSEL IN CONNECTION WITH SUCH CONFESSION OF JUDGMENT AND/OR THE COLLECTION
OF SUMS OWED TO THE LENDER.  IN THE EVENT THE LENDER RECEIVES, THROUGH EXECUTION
UPON A CONFESSED JUDGMENT, PAYMENTS ON ACCOUNT OF ATTORNEYS’ FEES IN EXCESS OF
SUCH ACTUAL ATTORNEYS’ FEES AND EXPENSES INCURRED BY THE LENDER, THEN, AFTER
FULL REPAYMENT AND SATISFACTION OF ALL OF THE OBLIGATIONS UNDER AND IN
CONNECTION WITH THIS NOTE, THE LOAN AGREEMENT AND ALL OF THE OTHER LOAN
DOCUMENTS, THE LENDER SHALL REFUND SUCH EXCESS AMOUNT TO THE BORROWERS. EACH
BORROWER HEREBY RELEASES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL ERRORS
AND ALL RIGHTS OF EXEMPTION, APPEAL, STAY OF EXECUTION, INQUISITION, AND OTHER
RIGHTS TO WHICH SUCH BORROWER MAY OTHERWISE BE ENTITLED UNDER THE LAWS OF THE
UNITED STATES OF AMERICA OR OF ANY STATE OR POSSESSION OF THE UNITED STATES OF
AMERICA NOW IN FORCE AND

 

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WHICH MAY HEREAFTER BE ENACTED.  THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER
JUDGMENT AGAINST ANY BORROWER SHALL NOT BE EXHAUSTED BY ONE OR MORE EXERCISES
THEREOF OR BY ANY IMPERFECT EXERCISE THEREOF AND SHALL NOT BE EXTINGUISHED BY
ANY JUDGMENT ENTERED PURSUANT THERETO.  SUCH AUTHORITY MAY BE EXERCISED ON ONE
OR MORE OCCASIONS OR FROM TIME TO TIME IN THE SAME OR DIFFERENT JURISDICTIONS AS
OFTEN AS THE LENDER SHALL DEEM NECESSARY OR DESIRABLE, FOR ALL OF WHICH THIS
NOTE SHALL BE A SUFFICIENT WARRANT.

 

21.                                 WAIVER OF TRIAL BY JURY.

 

EACH BORROWER AND THE LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY WAIVE TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO WHICH SUCH BORROWER AND THE LENDER MAY BE
PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS NOTE OR (B) THE
FINANCING DOCUMENTS.  IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A
WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR
PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE.

 

THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY EACH BORROWER, AND
EACH BORROWER HEREBY REPRESENTS THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE
BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT.  EACH BORROWER FURTHER REPRESENTS THAT IT HAS
BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD
THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

 

[Signatures Follow on Next Page]

 

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SIGNATURE PAGE TO SECOND AMENDED AND RESTATED TERM NOTE

 

IN WITNESS WHEREOF, each Borrower has caused this Note to be executed under seal
by its duly authorized representatives as of the date first written above.

 

WITNESS OR ATTEST:

 

BORROWERS:

 

 

 

 

 

TVI CORPORATION

 

 

 

 

 

 

/s/ Sherri Voelkel

 

By:

/s/ Harley A. Hughes

 (Seal)

 

 

 

Harley A. Hughes,

 

 

 

President and Chief Executive Officer

 

 

 

 

 

CAPA MANUFACTURING CORP.

 

 

 

 

 

 

/s/ Sherri Voelkel

 

By:

/s/ Harley A. Hughes

 (Seal)

 

 

 

Harley A. Hughes,

 

 

 

President

 

 

 

 

 

SAFETY TECH INTERNATIONAL, INC.

 

 

 

 

 

 

/s/ Sherri Voelkel

 

By:

/s/ Harley A. Hughes

 (Seal)

 

 

 

Harley A. Hughes,

 

 

 

President

 

 

 

 

 

SIGNATURE SPECIAL EVENT SERVICES, INC.

 

 

 

 

 

 

/s/ Sherri Voelkel

 

By:

/s/ Harley A. Hughes

 (Seal)

 

 

 

Harley A. Hughes,

 

 

 

President

 

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