EXHIBIT
10.1


 


SECOND
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 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 Second
Amended and Restated Loan Agreement (“Agreement”) is entered into October 31,
2008, by and between Bank and Borrower and amends and restates that certain
Amended and Restated Loan Agreement of Borrower and Bank dated May 6,
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, 2010.


 


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 the
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 (i.e. Roxboro claim of lien) 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 


 


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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/ofadsdn/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/ ofadprograms/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
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 


 


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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 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 


 


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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, on and after November 1, 2008, 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. 
Commencing with the fourth 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. 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. 
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 ail of its other primary 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 December 31, 2008. “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.


 


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 to the extent of any Loans hereunder. To secure the Loans of
Bank to Borrower hereunder and to such extent, 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. 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.


 


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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, 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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