Exhibit
10.1


 


THIRD
AMENDED AND RESTATED LOAN AGREEMENT


 


Wells Fargo Bank, National Association

(successor by merger to Wachovia Bank, National Association)

177 Meeting Street, Suite 200

Charleston, South Carolina 29401

(Hereinafter referred to as the “Bank”)


 


Force Protection, Inc.

9801 Highway 78

Ladson, South Carolina 29456


 


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
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
http://www.treas.gov/offices/enforcement/ofac/sdn/index.shtml, 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 except as
disclosed in Borrowers financial statements filed with the Securities and
Exchange Commission 


 


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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 


 


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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.


 


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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]


 


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


 


	
   

  	
  Force
  Protection, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Michael Moody

  	
  (SEAL)

  
	
   

  	
   

  	
  Michael
  Moody, Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Force
  Protection Technologies, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Michael Moody

  	
  (SEAL)

  
	
   

  	
   

  	
  Michael
  Moody, Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Force
  Protection Industries, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Michael Moody

  	
  (SEAL)

  
	
   

  	
   

  	
  Michael
  Moody, Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Wells
  Fargo Bank, National Association (successor by merger to Wachovia Bank,
  National Association)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Guy M. Meares, III

  	
  (SEAL)

  
	
   

  	
   

  	
  Guy M. Meares, III, Senior Vice President

  	
   

  



 


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