EXHIBIT
10.2


 


AMENDED
AND RESTATED PROMISSORY NOTE

(Increase)


 


	
  $40,000,000.00

  	
  October 31,
  2008

  



 


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”)


 


Wachovia Bank,
National Association

177 Meeting Street, Suite 450

Charleston, South Carolina 29401

Hereinafter referred to as “Bank”)


 


Borrower
promises to pay to the order of Bank, in lawful money of the United States of
America by debiting a direct deposit account as herein provided, the sum of
Forty Million and No/100 Dollars ($40,000,000.00) or such sum as may be
advanced and outstanding from time to time, with interest on the unpaid
principal balance at the rate and on the terms provided in this Promissory Note
(including all renewals, extensions or modifications hereof, this “Note”).


 


RENEWAL/MODIFICATION.  This Promissory Note renews, extends and/or
modifies that certain Promissory Note dated May 6, 2008 (the “Original
Promissory Note”), evidencing an original principal amount of
$30,000,000.00.  This Promissory Note is
not a novation.


 


LOAN
AGREEMENT.  This
Note is subject to the provisions of that certain Second Amended and Restated
Loan Agreement between Bank and Borrower dated as of October 31, 2008 (the
“Loan Agreement”).


 


LINE OF
CREDIT. 
Borrower may borrow, repay and reborrow, and, upon the request of
Borrower, Bank shall advance and readvance under this Note from time to time
until the maturity hereof (each an “Advance” and together the “Advances”), so
long as the total principal balance outstanding under this Note at any one time
does not exceed the principal amount stated on the face of this Note, subject
to the limitations described in the Loan Agreement to which this Note is
subject. Bank’s obligation to make Advances under this Note shall terminate if
Borrower is in Default. As of the date of each proposed Advance, Borrower shall
be deemed to represent that 


 

















 


each
representation made in the Loan Documents is true as of such date, except to
the extent of changes in the ordinary course of business that singly or in the
aggregate are not materially adverse and to the extent such representations and
warranties expressly relate to an earlier date.


 


If Borrower
subscribes to Bank’s cash management services and such services are applicable
to this line of credit, the terms of such service shall control the manner in
which funds are transferred between the applicable demand deposit account and
the line of credit for credit or debit to the line of credit.


 


USE OF
PROCEEDS. 
Borrower shall use the proceeds of the loan(s) evidenced by this
Note for the commercial purposes of Borrower, as follows: for working capital
and general corporate purposes.


 


SECURITY.  Borrower has granted or will grant Bank a
security interest in the collateral described in the Loan Documents and such
other security instruments as are executed from time to time, including, but
not limited to, personal property collateral described in that certain Security
Agreement dated July 20, 2007.


 


INTEREST
RATE.  Interest
shall accrue on the unpaid principal balance of this Note during each Interest
Period from the date hereof through March 31, 2009 at a rate per annum
equal to 1-month LIBOR plus 1.75% (“Interest Rate”). Beginning April 1,
2009, based on the Funded Debt (as defined in the Loan Agreement) to EBITDA (as
defined in the Loan Agreement) ratio as of December 31, 2008, the interest
rate will be 1-month LIBOR plus an Applicable Margin based on the Funded Debt
to EBITDA and Matrix ratio shown below. Thereafter, on the first day of each
calendar quarter (April 1, July 1, October 1, and January 1)
the Applicable Margin shall be adjusted based upon the Funded Debt to EBITDA
Ratio for the calendar quarter ended immediately preceding the most recent
calendar quarter end. For example, the Applicable Margin applicable on the
quarter starting April 1st shall be based upon the Funded Debt
to EBITDA Ratio on December 31st, the Applicable Margin for the
quarter starting July 1st shall be based upon the Funded Debt
to EBITDA Ratio as of March 31st, and so forth. Interest for
each Interest Period shall accrue each day during such Interest Period,
commencing on and including the first day to but excluding the last day. “Interest
Period” means each one month period commencing on the last day of the
immediately preceding Interest Period and ending on the same day of the month
that interest is due 1 month thereafter; provided (i) the first Interest
Period shall commence on the date hereof and end on the first day thereafter
that interest is due, (ii) any Interest Period that ends in a month for
which there is no day which numerically corresponds to the last day of the
immediately preceding Interest Period shall end on the last day of the month
and (iii) any Interest Period that would otherwise extend past the
maturity date of this Note shall end on the maturity date of this Note. “LIBOR”
means, with respect to each Interest Period, the rate for U.S. dollar deposits
with a maturity equal to the number of months specified above, as reported on
Telerate Successor Page 3750 as of 11:00 a.m., London time, on the
second London business day before such Interest Period begins (or if not so
reported, then as determined by the Bank from another recognized source or
interbank quotation).


 


	
  Funded Debt to EBITDA Ratio

  	
   

  	
  Applicable Margin

  	
   

  
	
  > 1.50

  	
   

  	
  2.75

  	
  %

  
	
  >1.00 < 1.50

  	
   

  	
  2.25

  	
  %

  
	
  < 1.00

  	
   

  	
  1.75

  	
  %

  



 


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INDEMNIFICATION.  Borrower shall indemnify Bank against Bank’s
loss or expense as a consequence of (a) Borrower’s failure to make any
payment when due under this Note, (b) any payment, prepayment or
conversion of any loan on a day other than the last day of the Interest Period,
or (c) any failure to make a borrowing or conversion after giving notice
thereof.


 


DEFAULT
RATE.  In
addition to all other rights contained in this Note, if a Default (as defined
herein) occurs and as long as a Default continues, all outstanding Obligations,
other than Obligations under any swap agreements (as defined in 11 U.S.C. §
101, as in effect from time to time) between Borrower and Bank or its
affiliates, shall bear interest at the Interest Rate plus 3% (“Default Rate”).
The Default Rate shall also apply from acceleration until the Obligations or
any judgment thereon is paid in full.


 


INTEREST
AND FEE(S) COMPUTATION (ACTUAL/360).  Interest and fees, if any, shall be computed
on the basis of a 360-day year for the actual number of days in the applicable
period (“Actual/360 Computation”). The Actual/360 Computation determines the
annual effective interest yield by taking the stated (nominal) rate for a year’s
period and then dividing said rate by 360 to determine the daily periodic rate
to be applied for each day in the applicable period. Application of the
Actual/360 Computation produces an annualized effective rate exceeding the
nominal rate.


 


REPAYMENT
TERMS.  This
Note shall be due and payable in consecutive monthly payments of accrued
interest only, commencing on November 30, 2008, and continuing on the last
day of each month thereafter until fully paid. In any event, all principal and
accrued interest shall be due and payable on April 30, 2010.


 


AUTOMATIC
DEBIT OF CHECKING ACCOUNT FOR LOAN PAYMENT.  Borrower authorizes Bank to debit demand
deposit account number XXXXXXXX or any other account with Bank (routing number
XXXXXXX) designated in writing by Borrower for any payments due under this
Note. Borrower further certifies that Borrower holds legitimate ownership of
this account and preauthorizes this periodic debit as part of its right under
said ownership.


 


TRANSACTION
FEE.  Borrower
shall pay to Bank a transaction fee of $80,000.00 at closing of this Note.


 


UNUSED FEE.  Borrower shall pay to Bank a quarterly unused
fee of thirty (30) basis points on the average unused portion of this Note
during the period.


 


APPLICATION
OF PAYMENTS. 
Monies received by Bank from any source for application toward payment
of the Obligations shall be applied to accrued interest and then to principal.
If a Default occurs, monies may be applied to the Obligations in any manner or
order deemed appropriate by Bank.


 


If any payment
received by Bank under this Note or other Loan Documents is rescinded, avoided
or for any reason returned by Bank because of any adverse claim or threatened
action, the returned payment shall remain payable as an obligation of all
persons liable under this Note or other Loan Documents as though such payment
had not been made.


 


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DEFINITIONS.  Loan Documents.  The term “Loan Documents”, as used in this
Note and the other Loan Documents, refers to all documents executed in
connection with or related to the loan evidenced by this Note and any prior
notes which evidence all or any portion of the loan evidenced by this Note, and
any letters of credit issued pursuant to the Loan Agreement to which this Note
is subject, any applications for such letters of credit and any other documents
executed in connection therewith or related thereto, and may include, without
limitation, a commitment letter that survives closing, the Loan Agreement, this
Note, guaranty agreements, security agreements, security instruments, financing
statements, mortgage instruments, any renewals or modifications, whenever any
of the foregoing are executed, but does not include swap agreements (as defined
in 11 U.S.C. § 101, as in effect from time to time).  Obligations.
The term “Obligations”, as used in this Note and the other Loan Documents,
refers to any and all indebtedness and other obligations under this Note, all
other obligations under any other Loan Document(s), and all obligations under
any swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to
time) between Borrower and Bank, or its affiliates, whenever executed. Certain Other Terms. 
All terms that are used but not otherwise defined in any of the Loan
Documents shall have the definitions provided in the Uniform Commercial Code.


 


LATE
CHARGE.  If any
payments are not timely made, Borrower shall also pay to Bank a late charge
equal to 5% of each payment past due for 15 or more days. This late charge
shall not apply to payments due at maturity or by acceleration hereof, unless
such late payment is in an amount not greater than the highest periodic payment
due hereunder.


 


Acceptance by
Bank of any late payment without an accompanying late charge shall not be
deemed a waiver of Bank’s right to collect such late charge or to collect a
late charge for any subsequent late payment received.


 


ATTORNEYS’
FEES AND OTHER COLLECTION COSTS.  Borrower shall pay all of Bank’s reasonable
expenses actually incurred to enforce or collect any of the Obligations
including, without limitation, reasonable arbitration, paralegals’, attorneys’
and experts’ fees and expenses, whether incurred without the commencement of a
suit, in any trial, arbitration, or administrative proceeding, or in any
appellate or bankruptcy proceeding.


 


USURY.  If at any time the effective interest rate
under this Note would, but for this paragraph, exceed the maximum lawful rate,
the effective interest rate under this Note shall be the maximum lawful rate,
and any amount received by Bank in excess of such rate shall be applied to
principal and then to fees and expenses, or, if no such amounts are owing,
returned to Borrower.


 


DEFAULT.  If any of the following occurs, a default (“Default”)
under this Note shall exist: Nonpayment; Nonperformance.  The failure of timely payment or performance
of the Obligations or Default under this Note or any other Loan Documents
within ten (10) days of the due date thereof.  False Warranty.  A warranty or representation made in the Loan
Documents or furnished Bank in connection with the loan evidenced by this Note
proves materially false, or if of a continuing nature, becomes materially
false. Cessation; Bankruptcy. The death of,
appointment of a guardian for, dissolution of, termination of existence of,
loss of good standing status by, appointment of a receiver for, assignment for
the benefit of creditors of, or commencement of any bankruptcy or insolvency
proceeding by or against Borrower, its 


 


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Subsidiaries
or Affiliates, if any, or any general partner of or the holder(s) of the
majority ownership interests of Borrower, or any party to the Loan Documents. Material Capital Structure or Business Alteration. Without
prior written consent of Bank, (i) a material alteration in the kind or
type of Borrower’s business or that of Borrower’s Subsidiaries or Affiliates,
if any; (ii) the sale of substantially all of the business or assets of
Borrower, any of Borrower’s Subsidiaries or Affiliates or any guarantor, or a
material portion (25% or more) of such business or assets if such a sale is
outside the ordinary course of business of Borrower, or any of Borrower’s
Subsidiaries or Affiliates or any guarantor, or more than 50% of the
outstanding stock or voting power of or in any such entity in a single
transaction or a series of transactions; (iii) the acquisition of
substantially all of the business or assets or. more than 50% of the
outstanding stock or voting power of any other entity; or (iv) should any
Borrower or any of Borrower’s Subsidiaries or Affiliates or any guarantor enter
into any merger or consolidation. Material Adverse Change.
Bank determines in good faith, in its sole discretion, that the prospects for
payment or performance of the Obligations are impaired or there has occurred a
material adverse change in the business or prospects of Borrower, financial or
otherwise.


 


REMEDIES
UPON DEFAULT. 
If a Default occurs under this Note or any Loan Documents, Bank may at
any time thereafter, take the following actions: Bank Lien.
Foreclose its security interest or lien against Borrower’s deposit accounts and
investment property with five (5) days written notice to Borrower. Acceleration Upon Default. Accelerate the maturity of this
Note and, at Bank’s option, any or all other Obligations, other than
Obligations under any swap agreements (as defined in 11 U.S.C. § 101, as in
effect from time to time) between Borrower and Bank, or its affiliates, which
shall be due in accordance with and governed by the provisions of said swap
agreements; whereupon this Note and the accelerated Obligations shall be
immediately due and payable; provided, however, if the Default is based upon a
bankruptcy or insolvency proceeding commenced by or against Borrower or any
guarantor or endorser of this Note, all Obligations (other than Obligations
under any swap agreement as referenced above) shall automatically and
immediately be due and payable. Cumulative.
Exercise any rights and remedies as provided under the Note and other Loan
Documents, or as provided by law or equity.


 


FINANCIAL
AND OTHER INFORMATION. 
Borrower shall deliver to Bank such information as Bank may reasonably
request from time to time, including without limitation, financial statements
and information pertaining to Borrower’s financial condition. Such information
shall be true, complete, and accurate.


 


WAIVERS
AND AMENDMENTS. 
No waivers, amendments or modifications of this Note and other Loan
Documents shall be valid unless in writing and signed by an officer of Bank. No
waiver by Bank of any Default shall operate as a waiver of any other Default or
the same Default on a future occasion. Neither the failure nor any delay on the
part of Bank in exercising any right, power, or remedy under this Note and
other Loan Documents shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or remedy.


 


Except to the
extent otherwise provided by the Loan Documents or prohibited by law, each Borrower
and each other person liable under this Note waives presentment, protest,
notice of dishonor, demand for payment, notice of intention to accelerate
maturity, notice of acceleration of maturity, notice of sale and all other
notices of any kind. Further, each agrees that Bank may 


 


5

















 


(i) extend,
modify or renew this Note or make a novation of the loan evidenced by this
Note, and/or (ii) grant releases, compromises or indulgences with respect
to any collateral securing this Note, or with respect to any Borrower or other
person liable under this Note or any other Loan Documents, all without notice
to or consent of each Borrower and other such person, and without affecting the
liability of each Borrower and other such person; provided, Bank may not
extend, modify or renew this Note or make a novation of the loan evidenced by
this Note without the consent of the Borrower, or if there is more than one
Borrower, without the consent of at least one Borrower; and further provided,
if there is more than one Borrower, Bank may not enter into a modification of
this Note which increases the burdens of a Borrower without the consent of that
Borrower.


 


MISCELLANEOUS
PROVISIONS.  Assignment.  This Note
and the other Loan Documents shall inure to the benefit of and be binding upon
the parties and their respective heirs, legal representatives, successors and
assigns. Bank’s interests in and rights under this Note and the other Loan
Documents are freely assignable, in whole or in part, by Bank. In addition,
nothing in this Note or any of the other Loan Documents shall prohibit Bank
from pledging or assigning this Note or any of the other Loan Documents or any
interest therein to any Federal Reserve Bank. Borrower shall not assign its
rights and interest hereunder without the prior written consent of Bank, and
any attempt by Borrower to assign without Bank’s prior written consent is null
and void. Any assignment shall not release Borrower from the Obligations. Applicable Law; Conflict Between Documents. This Note and,
unless otherwise provided in any other Loan Document, the other Loan Documents
shall be governed by and interpreted in accordance with federal law and, except
as preempted by federal law, the laws of the state named in Bank’s address on
the first page hereof without regard to that state’s conflict of laws
principles. If the terms of this Note should conflict with the terms of the
Loan Agreement or any commitment letter that survives closing, the terms of
this Note shall control. Borrower’s Accounts.
Except as prohibited by law, Borrower grants Bank a security interest in all of
Borrower’s deposit accounts and investment property with Bank and any of its
affiliates. Swap Agreements. All swap
agreements (as defined in 11 U.S.C. § 101, as in effect from time to time), if
any, between Borrower and Bank or its affiliates are independent agreements
governed by the written provisions of said swap agreements, which will remain
in full force and effect, unaffected by any repayment, prepayment,
acceleration, reduction, increase or change in the terms of this Note, except
as otherwise expressly provided in said written swap agreements, and any payoff
statement from Bank relating to this Note shall not apply to said swap agreements
except as otherwise expressly provided in such payoff statement. Jurisdiction.
Borrower irrevocably agrees to non-exclusive personal jurisdiction in the state
named in the Bank’s address on the first page hereof. Severability.
If any provision of this Note or of the other Loan Documents shall be
prohibited or invalid under applicable law, such provision shall be ineffective
but only to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Note or
other such document. Payments. All
payments if paid by check or other negotiable instrument shall be mailed to
Bank at Commercial Loan Services, P.O. Box 740502, Atlanta, GA 30374-0502;
or other such address as provided by Bank in writing. Notices.
Any notices to Borrower shall be sufficiently given, if in writing and mailed
or delivered to the Borrower’s address shown above or such other address as
provided hereunder, and to Bank, if in writing and mailed or delivered to
Wachovia Bank, National Association, Mail Code VA7628, P. 0. Box 13327,
Roanoke, VA 24040 or Wachovia Bank, National Association, Mail Code VA7628, 10
South Jefferson Street, Roanoke, VA 24011 or such other address as 


 


6

















 


Bank may
specify in writing from time to time. Notices to Bank must include the mail
code. In the event that Borrower changes Borrower’s address at any time prior
to the date the Obligations are paid in full, Borrower agrees to promptly give
written notice of said change of address by registered or certified mail,
return receipt requested, all charges prepaid. Plural;
Captions. All references in the Loan Documents to Borrower,
guarantor, person, document or other nouns of reference mean both the singular
and plural form, as the case may be, and the term “person” shall mean any
individual, person or entity. The captions contained in the Loan Documents are
inserted for convenience only and shall not affect the meaning or
interpretation of the Loan Documents. Advances. Bank
may, in its sole discretion, make other advances which shall be deemed to be
advances under this Note, even though the stated principal amount of this Note
may be exceeded as a result thereof. Posting of Payments.
All payments by check or other negotiable instrument, if any, received during
normal banking hours after 2:00 p.m. local time at the address for
payments set forth above shall be deemed received at the opening of the next
banking day. Joint and Several Obligations. If there is more than one Borrower,
each is jointly and severally obligated together with all other parties
obligated for the Obligations. Fees and Taxes.
Borrower shall promptly pay all documentary, intangible recordation and/or
similar taxes on this transaction whether assessed at closing or arising from
time to time. LIMITATION ON LIABILITY; WAIVER OF PUNITIVE
DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING BANK BY ACCEPTANCE
HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION PROCEEDING OR ANY
CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT OF OR BE IN
ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER
AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY
OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE
TO THE OTHER FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE
OR EXEMPLARY DAMAGES. EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR
CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE
IN THE FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR CONTROVERSY,
WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY OR
OTHERWISE. Patriot Act Notice. To help fight
the funding of terrorism and money laundering activities, Federal law requires
all financial institutions to obtain, verify, and record information that
identifies each person who opens an account. For purposes of this section,
account shall be understood to include loan accounts. Final
Agreement. This Note and the other Loan Documents represent the
final agreement between the parties and may not be contradicted by evidence of
prior, contemporaneous or subsequent agreements of the parties. There are no
unwritten agreements between the parties.


 


WAIVER OF
JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF BORROWER BY EXECUTION HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT EACH MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS NOTE, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO
BE EXECUTED IN CONNECTION WITH THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT
HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT 


 


7

















 


TO BANK TO
ACCEPT THIS NOTE. EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF SHALL
SUPERSEDE AND REPLACE ANY PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES
BETWEEN THE PARTIES CONTAINED IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR
AGREEMENT HERETOFORE EXECUTED IN CONNECTION WITH, RELATED TO OR BEING REPLACED,
SUPPLEMENTED, EXTENDED OR MODIFIED BY, THIS NOTE.


 


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


 


	
   

  	
  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

  



 


8