Document:

ex10_4.htm

 

EXHIBIT 10.4

 

 

TO:        Mr. Uri Nissani

Defense Industries International, Inc. (the "Company")

12, Hamefalsim Street

Kiryat Arich — Petach Tikva — Ramat Gan 52121, Israel

 

FROM: Mr. Elie Gugenheim (the "Investor")

Avenida de las Fuentes No. 41-A, Desp. 1001/1002 Col. Lomas de Tecamachalco

Naucalpan de Juarez, Estado de Mexico

Mexico C.P. 53950

 

September 3, 2013 

 

Dear Mr. Nissani:

 

Myself and the Company entered into that certain Subscription Agreement dated March 7, 2013 (the "Subscription Agreement"). Pursuant to the letter dated June 3, 2013, we extended the time period for us to enter into a stock purchase agreement pursuant to Section 8 of the Subscription Agreement (the "SPA"), and the time period for me to make the investment contemplated by Section 1.2 of the Subscription Agreement (the "Tranche 2 Investment") until September 9, 2013.

 

This letter is to confirm our agreement that we further extend the period for (i) myself and the Company to enter into the SPA, and (ii) the time period for me to make the Tranche 2 Investment, each until the later of (A) the date that is 45 days from the date I receive from the Company complete and audited financial statements for the years 2011, 2012 and for the nine months concluding on September 30, 2013 (the "Financial Statements"), or (B) December 31, 2013. The Company hereby covenants to deliver the Financial Statements to me no later than October 31, 2013.

 

This letter also confirms our agreement that within thirty (30) days after the date hereof, we will negotiate and enter into an amendment to the Subscription Agreement that includes the terms and conditions set forth on the Term Sheet attached hereto as Exhibit A. This letter further confirms our understanding that, notwithstanding the extension above or the terms of the Subscription Agreement, if we fail to enter into the amendment to the Subscription Agreement as contemplated herein, Investor shall have the right, at its option, to realize the "Contemplated Transaction" (as defined in the Subscription Agreement) at an average price per share of the Company's stock that reflects the fifteen percent (15%)
discount provided pursuant to Section 10 of the Subscription Agreement. Such fifteen percent (15%) discount shall also apply to any conversion undertaken by Investor pursuant to a to be executed US $1 million Convertible Promissory Note to evidence the Loan Agreement dated September 3, 2013, between Investor and the Company.

 

Please indicate your acknowledgment of these terms by executing this letter in the space provided below, and returning the signed copy to me at the address above.

 

[Signature Page Follows]

  

  

  

 

EXHIBIT A

 

Term Sheet

 

Within thirty (30) days after the date of this letter, Investor and the Company agree to enter into an amendment to the Subscription Agreement which shall contain the following terms and conditions:

 

	
  1.  

	
A scheme for repayment of the Loan Agreements between the Company and Intercambio Comercial, SA de CV, or between the Company and Investor, as applicable, dated April 18, 2013, June 3, 2013, and September 3, 2013, or the right of Investor to set off the amount outstanding under such loan agreements against Investor's investment obligations under the Subscription Agreement, or the right of Investor to demand repayment of such loans in accordance with the terms and conditions of each Loan Agreement.

 

	
2.  

	
Provisions related to the conversion into non-voting stock, at Investor's option, of a to be executed US $1 million Convertible Promissory Note to evidence the Loan Agreement between Investor and the Company dated September 3, 2013. The parties agree that upon the conversion of all of the then-outstanding notes and loans by Investor, as well as the consummation of all of the transactions contemplated by the Subscription Agreement, Investor would own 33.33% of the voting stock, and 11.11% of the non-voting stock, of the Company.

 

	
3.  

	
In addition, Uri Nissani shall execute a formal guaranty of all obligations of the Company to Investor, or his assigns, in form and substance satisfactory to Investor.

 

 

Term Sheet

Page 1

  

  

  

	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	
Sincerely,

	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	
/s/Elie Gugenheim

	  	  	  	  	  	  	  	
Eli Gugenheim

 

 

 

	  	  	  	  
	  	  	  	
Acknowledged and Agreed By:

	  	  	  	  
	  	  	  	
/s/Uri Nissani

	  	  	  	
Uri Nissani

	  	  	  	
President and CEOex10_5.htm

 

EXHIBIT 10.5

 

LOAN AGREEMENT

 

This Loan Agreement (the "Agreement" or the "Loan Agreement") is signed and executed on the 3rd day of September, 2013 (the "Effective Date") by and between Elie Gugenheim, a Mexican tax resident with the Mexican tax ID number [         ], or his assigns (the "Lender")
and Defense Industries International, Inc. (the "Borrower" or the "Company") (each shall be referred hereto as a "Party" and collectively the "Parties").

 

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Parties hereby agree as follows:

 

1.   The Loan

The Lender shall provide the Company with a loan in the amount of US $1,000,000 (One Million United States Dollars) (the "Loan"). The Loan shall be transferred to the Company upon signing of this Agreement by wire transfer as directed in writing by the Company.

2.           Repayment of the Loan

 

2.1    The Loan shall be due and payable on demand by Lender.

 

2.2           To ensure the repayment of the Loan to the Lender, the CEO of the Company and the controlling shareholder of the Company, Mr. Uri Nissani, will personally guarantee the repayment of the Loan so in any event that the Company shall not comply with the terms of the Loan, then the responsibility for said repayment shall be transferred to Mr. Nissani in person.

 

2.3    In the event the Loan is not repaid to the Lender in accordance with this Section 2, the amount of the Loan, at Lender's option, may be applied against Lender's investment obligations pursuant to the Subscription Agreement dated March 7, 2013, between Lender and the Company.

3.            Miscellaneous

 

3.1    This Agreement shall be binding upon and inure to the benefit of each of the Parties hereto and their respective successors, heirs and assigns.

 

3.2    If any provision of this Agreement is held to be invalid, unenforceable or illegal for any reason, the validity or enforceability of any or all of the remaining portions shall not be affected.

 

3.3    This Agreement shall be governed by and construed in accordance with the laws of the State of Israel, without giving effect to conflict of law principles. The courts situated in Israel at Tel Aviv, shall have exclusive jurisdiction over any dispute which may arise between the Parties in any matters relating to this Agreement and of the Parties hereto.

 

  

  

  

 

3.4    This Agreement constitutes the entire understanding of the Parties with respect to the transactions contemplated hereby, and supersedes all previous agreements and understandings, whether written or oral.

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement:

 

Defense Industries International, Inc.

/s/Uri Nissani                                                                   /s/Eli Gugenheim

Elie Gugenheim

Defense Industries International, Inc.

By: /s/Uri Nissani

Name:  Uri Nissani

Title: President and CEO

/s/Uri Nissani

Uri Nissani

As Guarantor5th amendment to BofA revolver

Exhibit  10(l)

FIFTH AMENDMENT TO SECOND AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT

THIS FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT ("Fourth Amendment") is made as of this 7th day of June, 2013, by and among BANK OF AMERICA, N.A., a national banking association ("Bank of America") with an office at 135 South LaSalle Street, 4th Floor, Chicago, Illinois 60603, individually as a Lender and as Agent ("Agent") for itself and any other financial institution which is or becomes a party hereto (each such financial institution, including Bank of America, is referred to hereinafter individually as a "Lender" and collectively as the "Lenders"), the LENDERS and MFRI, INC., a Delaware corporation ("MFRI"), MIDWESCO FILTER RESOURCES, INC., a Delaware corporation ("Midwesco"), PERMA-PIPE, INC., a Delaware corporation ("Perma-Pipe"), TC NILES CORPORATION (f/k/a THERMAL CARE, INC.), a Delaware corporation ("Thermal Care"), TDC FILTER MANUFACTURING, INC., a Delaware corporation ("TDC"), MIDWESCO MECHANICAL AND ENERGY, INC., a Delaware corporation ("Mechanical") and PERMA-PIPE INTERNATIONAL COMPANY, LLC, a Delaware limited liability company ("Perma-Pipe International") and PERMA-PIPE CANADA, INC., a Delaware corporation ("Perma-Pipe Canada"). Capitalized terms used in this Agreement have the meanings assigned to them in Appendix A, General Definitions. Accounting terms not otherwise specifically defined herein shall be construed in accordance with GAAP consistently applied. MFRI, Midwesco, Perma-Pipe, Thermal Care, TDC, Mechanical, Penna-Pipe International and Perma-Pipe Canada are sometimes hereinafter referred to individually as a "Borrower" and collectively as "Borrowers".

WHEREAS, Borrowers, Agent, and the Lender signatories thereto hereto entered into that certain Second Amended and Restated Loan and Security Agreement dated April 30, 2012 as amended by a certain First Amendment to Second Amended and Restated Loan and Security Agreement by and among Borrowers, Agent and the Lender signatories thereto dated June 8, 2012, by a certain Second Amendment to Second Amended and Restated Loan and Security Agreement by and among Borrowers, Agent and the Lender signatures thereto dated October 12, 2012, by a certain Third Amendment to Second Amended and Restated Loan and Security Agreement by and among Borrowers, Agent and the Lender signatures thereto dated March IS, 2013 and by a certain Fourth Amendment to Second Amended and Restated Loan and Security Agreement dated April 25, 2013 (said Second Amended and Restated Loan and Security Agreement, as amended fr01l1 time to time, the "Loan Agreement");

NOW, THEREFORE, in consideration of the following terms and conditions, the parties agreed as follows:

		
	1.
	Definitions. Except as otherwise specifically provided for herein, all capitalized terms used herein without definition shall have the meanings contained in the Loan Agreement.

		
	2.
	Consent to Sale. Agent and Lenders consent to the sale by Mechanical of all or substantially all of its assets and business ("Mechanical Sale") so long as: (i) the net sales proceeds received by Mechanical for such transaction are not less than $200,000 and such net sales proceeds are applied to the Loans when received as provided in subsection 3.3.1 of the Loan Agreement; (ii) after giving effect to such Mechanical Sale no Default or Event of Default exists; (iii) prior to the consummation of the Mechanical Sale, true and complete copies of the  material documents and agreements (in substantially final form) evidencing the Mechanical Sale have been delivered to Agent and the terms and conditions of such documents and agreements shall have been reasonably acceptable to Agent; and (iv) the Mechanical Sale is consummated on or prior to June 30, 2013.

Exhibit  10(l)

		
	3.
	Consent to Guaranty of Performance Bond. Agent and Lenders consent to Borrowers providing unsecured guaranties of performance bonds of MM&E, LLC, the person acquiring the Mechanical assets and business so long as (x) the aggregate amount of such outstanding performance bonds so guaranteed does not exceed $25,000,000 at any time, and (y) no such guarantees are given or dated on or after June 1, 2015,

		
	4.
	Conditions Precedent. This Fifth Amendment shall become effective when Borrowers, Agent and Lenders shall each have executed and delivered to each other this Fifth Amendment.

		
	5.
	Governing Law. This Fifth Amendment shall be governed by, and construed in accordance with, the laws of the State of Illinois, without regard to the principles thereof relating to conflict of laws.

		
	6.
	Execution in Counterparts. This Fifth Amendment may be executed in any number of counterparts, which shall, collectively and separately, constitute one Agreement.

		
	7.
	Continuing Effect. Except as otherwise provided herein, the Loan Agreement remains in full force and effect.

(Signature Page Follows)

Exhibit  10(l)

(Signature Page to Fifth Amendment to Second
Amended and Restated Loan and Security Agreement)

	
			
	 
	 
	MFRI, INC.

By: /s/ Karl J. Schmidt

	 
	 
	Karl J. Schmidt

	 
	 
	Vice President and Chief Financial Officer

	 
	 
	 

	 
	 
	MIDWESCO FILTER RESOURCES, INC.

By: /s/ Michael D. Bennett

	 
	 
	Michael D. Bennett

	 
	 
	Vice President, Secretary and Treasurer

	 
	 
	 

	 
	 
	PERMA‐PIPE, INC.
By: /s/ Michael D. Bennett

	 
	 
	Michael D. Bennett

	 
	 
	Vice President, Secretary and Treasurer

	 
	 
	 

	 
	 
	TC Niles Corporation (f/k/a THERMAL CARE, INC.)

By: /s/ Michael D. Bennett

	 
	 
	Michael D. Bennett

	 
	 
	Vice President, Secretary and Treasurer

	 
	 
	 

	 
	 
	TDC FILTER MANUFACTURING, INC.

By: /s/ Michael D. Bennett

	 
	 
	Michael D. Bennett

	 
	 
	Vice President, Secretary and Treasurer

	 
	 
	 

	 
	 
	MIDWESCO MECHANICAL AND ENERGY, INC.

By: /s/ Michael D. Bennett

	 
	 
	Michael D. Bennett

	 
	 
	Vice President, Secretary and Treasurer

	 
	 
	 

	 
	 
	PERMA‐PIPE INTERNATIONAL COMPANY, LLC.
By: /s/ Michael D. Bennett

	 
	 
	Michael D. Bennett

	 
	 
	Vice President, Secretary and Treasurer

	 
	 
	 

Exhibit  10(l)

	
			
	 
	 
	PERMA‐PIPE CANADA, INC.
By: /s/ Michael D. Bennett

	 
	 
	Michael D. Bennett

	 
	 
	Vice President, Secretary and Treasurer

	 
	 
	 

	 
	 
	BANK OF AMERICA, N.A., as Agent and as a Lender
By: /s/ Brian Conole

	 
	 
	Brian Conole

	 
	 
	Senior Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00221-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00221-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00221-of-00352.parquet"}]]