Exhibit 10.2
THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE
IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AND
INTERCREDITOR AGREEMENT (THE "SUBORDINATION AGREEMENT") DATED AS OF OCTOBER 29,
2009 BETWEEN SUBORDINATED CREDITOR (AS DEFINED IN THE SUBORDINATION AGREEMENT)
AND BANK OF AMERICA, N.A. ("AGENT") TO THE INDEBTEDNESS (INCLUDING INTEREST)
OWED BY PROTECTIVE APPAREL CORPORATION OF AMERICA, A NEW YORK CORPORATION
("PACA"), POINT BLANK BODY ARMOR INC., A DELAWARE CORPORATION ("BODY ARMOR"),
LIFE WEAR TECHNOLOGIES, INC., A FLORIDA CORPORATION ("LIFE WEAR"), AND POINT
BLANK SOLUTIONS, INC., A DELAWARE CORPORATION (THE "POINT BLANK" AND TOGETHER
WITH PACA, BODY ARMOR AND LIFE WEAR, THE "COMPANY") PURSUANT TO THAT CERTAIN
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT DATED AS OF APRIL 3, 2007 AMONG
THE COMPANY, AGENT AND THE LENDERS FROM TIME TO TIME PARTY THERETO, AS SUCH LOAN
AND SECURITY AGREEMENT HAS BEEN AND HEREAFTER MAY BE AMENDED, SUPPLEMENTED OR
OTHERWISE MODIFIED FROM TIME TO TIME AND TO INDEBTEDNESS REFINANCING THE
INDEBTEDNESS UNDER THAT AGREEMENT AS CONTEMPLATED BY THE SUBORDINATION
AGREEMENT; AND EACH HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF,
IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.
Subordinated Note
Dated: October 29, 2009
FOR VALUE RECEIVED, the undersigned, PROTECTIVE APPAREL CORPORATION OF AMERICA,
a New York corporation ("PACA"), POINT BLANK BODY ARMOR INC., a Delaware
corporation ("Body Armor"), LIFE WEAR TECHNOLOGIES, INC., a Florida corporation
("Life Wear"), and POINT BLANK SOLUTIONS, INC., a Delaware corporation ("Point
Blank" and collectively, together with PACA, Body Armor and Life Wear, the
"Company"), hereby promise to pay on the Maturity Date to Subordinated Creditor
(as defined in the Subordination Agreement) the lesser of (i) the principal
amount of Ten Million DOLLARS ($10,000,000) or (ii) such lesser amount as may be
advanced by the Subordinated Creditor on behalf of the Company pursuant to the
terms of the Guarantee (defined herein), together with all accrued interest on
the principal sum outstanding from time to time hereunder.
Capitalized terms
used and not otherwise defined herein shall have the meanings assigned to them
in the Subordination Agreement.
1.
Defined Terms.
(a) The following terms shall have the following
meanings:
"Collateral" has the meaning set forth in Section
5 of this Note.
"Event of Default" has the meaning set forth in Section 6 of this
Note.
"Guarantee" means that certain Amended and Restated Corporate
Guarantee dated as of October 29, 2009 made by Subordinated Creditor in favor of
Agent.
"Maturity Date" means the earlier of (a) October 31, 2010 or (b) 91st day
after the date on which all Senior Debt under the BOFA Loan Documents and any
Refinancing Senior Debt Documents is paid in full and all commitments under the
BOFA Loan Documents and any Refinancing Senior Debt Documents are terminated.
"Subordination Agreement" means that certain Subordination and Intercreditor
Agreement dated as of October 29, 2009 among Subordinated Creditor and Agent.
2.
Payment of Interest.
(a)
The Company shall pay interest in kind
on the