EXHIBIT 10.1

 

AMENDED AND RESTATED LOAN AGREEMENT

 

Wachovia Bank, National Association

177 Meeting Street, Suite 450

Charleston, South Carolina 29401

(Hereinafter referred to as the “Bank”)

 

Force Protection, Inc.

9801 Highway 78

Ladson, South Carolina 29458

 

Force Protection Technologies, Inc.

9801 Highway 78

Ladson, South Carolina 29456

 

Force Protection Industries, Inc.

9801 Highway 78

Ladson, South Carolina 29456

 

(Individually and collectively, “Borrower”)

 

This Amended and Restated Loan Agreement (“Agreement”) is entered into May 6,
2008, by and between Bank and Borrower and amends and restates that certain loan
agreement of Borrower and Bank dated July 20, 2007.

 

This Agreement applies to the loan or loans {individually and collectively, the
“Loan”) evidenced by one or more promissory notes dated April 30, 2008 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
ail standby Letters of Credit plus the aggregate amount of unreimbursed drawings
under all standby Letters of Credit at any one time does not exceed
$2,000,000.00, 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 Promissory Note in the amount of
$30,000,000.00, dated April 30, 2008) plus the aggregate amount available to be
drawn under all Letters of Credit plus the aggregate amount of unreimbursed
drawings under ail Letters of Credit at any one time shall not exceed
$30,000,000.00. The Letters of Credit are to be used by Borrower solely for
trade credit

 

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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 October 15, 2008.

 

LETTER OF CREDIT FEES. Borrower shall pay to Bank, at such times as Bank shall
require, Bank’s standard fees In connection with Letters of Credit, as in effect
from time to time, and with respect to standby Letters of Credit, an additional
fee equal to 1.00% per annum on the face amount of each standby Letter of
Credit, payable annually, in advance, for so tong as such Letter of Credit is
outstanding.

 

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 dates) 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 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 taws and regulations intended to
protect the environment, and the

 

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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
http://www.treas.gov/offices/enforcement/ofac/sdnandexshtml, 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 http://www.treas.gov/offices/enforcement/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 that have not been disclosed 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

 

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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 Bane 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. All such regular and
periodic reports which remain unfiled on the date hereof shall be filed on or
before September 30, 2008 in a manner and Iona acceptable to the applicable
governmental agency or authority.

 

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

 

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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.

 

ANNUAL FINANCIAL STATEMENTS. Borrower shall deliver to Bank for fiscal year
ended December 31, 2007, unqualified, audited financial statements no later than
August 31, 2008 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 the
independent certified public accountant firm of Grant Thornton. 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. Commencing with the second quarter of 2008, the
Borrower shall deliver to Bank, within 60 days after the end of each fiscal
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, provided however, the financial
statements for the first quarter of 2008 shall be due on or before August 31,
2008. 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.

 

CASH FLOW PROJECTIONS. Borrower shall deliver to Bank updated cash flow
projections in a form acceptable to Bank as soon as available, but in any event
no later than August 31, 2008.

 

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

 

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company, as applicable: Deposit Relationship. Borrower shall maintain a
non-interest bearing demand deposit and all of its other depository and treasury
services with Bank.

 

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. The Borrower hereby agrees that, upon request of the Bank, it will
assign its claims under contracts with the United States government and any of
its departments, agencies, divisions, and other instrumentalities. The 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.

 

IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above,
have caused this Agreement to be duly executed under seat.

 

 

 

Force Protection, Inc.

 

 

 

 

 

 

 

 

By:

      /s/ Michael Moody

(SEAL)

 

 

Michael Moody, its Chief Executive Officer

 

 

 

Force Protection Technologies, Inc.

 

 

 

 

 

 

 

 

By:

      /s/ Michael Moody

(SEAL)

 

 

Michael Moody, its Chief Executive Officer

 

 

 

Force Protection Industries, Inc.

 

 

 

 

 

 

 

 

By

      /s/ Michael Moody

(SEAL)

 

 

Michael Moody, its Chief Executive Officer

 

 

 

Wachovia Bank, National Association

 

 

 

 

 

 

 

 

By:

         /s/ Guy M. Meares, III

(SEAL)

 

 

Guy M. Meares, III, Senior Vice President

 

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