Exhibit 10.6
AMENDED AND RESTATED SECURITY AGREEMENT
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THIS AGREEMENT is made this 26th day of March, 1997, by ARMOR
HOLDINGS, INC., a Delaware corporation (the "Debtor"), whose address is 000
Xxxxxx Xxxxx Xxxx, Xxxxx, Xxxxxxx 00000, and XXXXXXX BANK, N.A. (the "Secured
Party"), whose address is 00 X. Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000.
For good and valuable consideration, the Debtor agrees as follows:
1. Security Interest. In consideration of and as an inducement for the
Secured Party's extending or continuing to extend credit to the Debtor, the
Debtor hereby gives the Secured Party a continuing and unconditional security
interest (the "Security Interest") in, and assigns to the Secured Party, the
assets described below and all parts, accessories, attachments, additions,
replacements, accessions, substitutions, increases, profits, income,
distributions, proceeds and products thereof and thereto in any form
(including, without limitation, insurance proceeds) together with all records
(including, without limitation, computer tapes, disks and records) relating
thereto (the "Collateral"):
(a) All of the Debtor's inventory (whether now owned or hereafter
acquired), including without limitation all goods held for sale or
lease or to be furnished under contracts of service, raw materials,
work in process and materials to be used or consumed in the Debtor's
business.
(b) All of the Debtor's right to receive payments from any source
and for any reason (whether characterized as accounts, chattel paper,
choses-in-action, contract rights, general intangibles, instruments,
notes or otherwise) (whether now existing or hereafter arising)
including, without limitation, the Debtor's right to receive payments
for goods and other products sold or leased or for services rendered,
whether or not earned by performance or recognized or billed by the
Debtor.
(c) All of the Debtor's receivables, chattel paper, notes,
securities, and instruments, including the right to receive payments
thereunder (whether now existing or hereafter arising).
(d) All of the Debtor's general intangibles, including without
limitation copyrights, trademarks, trade names, service marks,
patents, patent drawings, designs and formulas.
(e) All of the Debtor's furniture and equipment, including,
without limitation, all office equipment, office furniture, computers,
computer software, modems, interface equipment, computer terminals,
printers, peripheral computer
equipment, accessory equipment, hand and power tools, trucks,
automobiles, heavy equipment and other motor vehicles, machinery and
equipment of all classes.
(f) All of the Debtor's contract rights including, without
limitation, the Debtor's rights under distribution contracts,
franchise agreements, license agreements, sales contracts, unfilled
customer orders, and lease agreements.
(g) All of the Debtor's revenues, income, receipts and money
received as a result of or in connection with the Debtor's: (i)
operation, ownership or sale of property; (ii) performance of
services; or (iii) sale of assets or otherwise.
(h) All of the Debtor's deposit accounts, certificates of
deposit, investment accounts, money market funds, mutual funds, cash
and cash equivalents.
The Collateral also includes other assets of the same class or classes
hereafter owned or acquired by the Debtor and the Secured Party shall have a
security interest in all such after acquired assets and all parts, accessories,
attachments, additions, replacements, accessions, substitutions, increases,
profits, income, distributions, proceeds and products thereof in any form.
2. Indebtedness Secured. The borrowing relationship between the Debtor
and the Secured Party may be a continuing one and may include numerous types of
extensions of credit, loans, overdraft payments or advances made directly or
indirectly to or for the benefit of the Debtor. Accordingly, this Agreement and
the Security Interest created by it secures payment of all obligations of any
kind owing by the Debtor to the Secured Party (the "Indebtedness"). The
Indebtedness includes, without limitation, those obligations of the Debtor
which: (a) are now existing or hereafter incurred; (b) are direct or indirect;
or (c) arise from loans, guaranties, endorsements, letters of credit,
reimbursement agreements, drafts, acceptances or otherwise. The Indebtedness
may be: (a) related or unrelated to the extension of credit contemplated in
that certain Amended and Restated Loan Agreement, dated as of the date hereof
between the Debtor and the Secured Party (as amended or restated from time to
time, the "Loan Agreement"), or any extensions, renewal or modifications
thereof; (b) of the same or a different class as the primary obligation; and
(c) from time to time reduced or extinguished and thereafter increased or
re-incurred. The Indebtedness specifically includes, without limitation, any
sums advanced and any expenses or obligations incurred by the Secured Party
pursuant to this Agreement or any other agreement concerning, evidencing or
securing obligations of the Debtor to the Secured Party and any liabilities of
the Debtor to the Secured Party arising from any sources whatsoever.
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3. Warranties of Debtor. The Debtor warrants and so long as this
Agreement continues in force shall be deemed continuously to warrant that:
(a) The Debtor is the owner of the Collateral free of all
security interests or other encumbrances, except the Security Interest
and except for liens and other matters set forth on Exhibit "A"
attached hereto.
(b) The Debtor is authorized to enter into the Security
Agreement.
(c) The Collateral is used or bought for use primarily in
business or professional operations.
(d) The Collateral is or will be located at the Debtor's
addresses specified on Exhibit "B" attached hereto.
(e) The chief executive office of the Debtor is at the address
set forth above. The Debtor does not operate under any trade names.
(f) Each instrument, account, general intangible, receivable and
chattel paper constituting the Collateral is genuine and enforceable
in accordance with its terms against the party obligated to pay the
same (the "Account Debtor"), and each Account Debtor has no defense,
setoff, claim or counterclaim against the Debtor.
(g) The amount represented by the Debtor to the Secured Party as
owing by each Account Debtor or by all Account Debtors is the correct
amount actually and unconditionally owing by such Account Debtor or
Debtors, except for normal cash discounts where applicable.
4. Covenants of Debtor. So long as this Agreement has not been
terminated as provided hereafter, the Debtor: (a) will defend the Collateral
against the claims of all other persons except for liens and other matters set
forth on Exhibit "A" attached hereto; (b) will keep the Collateral free from
all security interests or other encumbrances, except the Security Interest and
except for liens and other matters set forth on Exhibit "A" attached hereto;
(c) will not assign, deliver, sell, transfer, lease or otherwise dispose of any
of the Collateral or any interest therein without the prior written consent of
the Secured Party, except that prior to an Event of Default, the Debtor may
sell or lease inventory in the ordinary course of the Debtor's business and may
sell or remove worn-out or obsolete equipment in the ordinary course of the
Debtor's business; (d) will keep in accordance with generally accepted
accounting principles consistently applied, accurate and complete records
concerning the Collateral and upon the Secured Party's request will xxxx any of
such records and all or any other
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Collateral to give notice of the Security Interest and will permit the Secured
Party or its agents to inspect the Collateral and to audit and make abstracts
of such records or any of the Debtor's books, ledgers, reports, correspondence
and other records; (e) upon demand, will deliver to the Secured Party any
documents of title and any chattel paper representing or relating to the
Collateral or any part thereof, schedules, invoices, shipping or delivery
receipts, purchase orders, contracts or other documents representing or
relating to purchases or other acquisitions or sales or leases or other
dispositions of the Collateral and proceeds thereof and any and all other
schedules, documents and statements which the Secured Party may from time to
time reasonably request; (f) will notify the Secured Party immediately of any
default by Account Debtors in payment or other performance of material
obligations with respect to any Collateral; (g) without the Secured Party's
written consent, will not make or agree to make any alteration, modification or
cancellation of or substitution for or credits adjustments or allowances on any
Collateral; (h) will keep the Collateral at the addresses specified in Exhibit
"B" until the Secured Party is notified in writing of any change in its
location, and the Debtor will not change the location of the Debtor's chief
executive office without the written consent of the Secured Party (which
consent shall not be unreasonably withheld or delayed ), except that the Debtor
shall be entitled to change its chief executive office to a location in
Jacksonville, Florida without the Secured Party's prior consent; (i) will
notify the Secured Party promptly in writing of any change in the Debtor's
address, name, trade names or identity from that specified above or of any
change in the location of the Collateral; (j) will permit the Secured Party or
its agents to inspect the Collateral; (k) will keep the Collateral in good
condition and repair and will not use the Collateral in violation of any
provisions of this Agreement, any applicable statute, regulation or ordinance
or any policy of insurance insuring the Collateral; (l) will execute and
deliver to the Secured Party such financing statements, landlord waivers and
other documents reasonably requested by the Secured Party, and take such other
action and provide such further assurances as the Secured Party may reasonably
deem advisable to evidence, perfect or enforce the Security Interest created by
this Agreement; (m) will pay all taxes, assessments and other charges of every
nature which may be levied or assessed against the Collateral (unless the same
are being contested in good faith); (n) will insure the Collateral against
risks by obtaining policies (none of which shall be cancellable without at
least 30 days prior written notice to the Secured Party) in coverage, form and
amount and with companies reasonably satisfactory to the Secured Party,
containing a loss payee provision in favor of the Secured Party, and at the
Secured Party's request will deliver each policy or certificate of insurance
therefor to the Secured Party; (o) will prevent any part of the Collateral from
becoming an accession to other goods not covered by this Agreement; (p) will
prevent the Collateral or any part of the Collateral from becoming a fixture;
and (q) if any
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certificate of title may be issued with respect to any of the Collateral, will
cause the Secured Party's interest under this Agreement to be noted on the
certificate and will deliver the original certificate to the Secured Party.
5. Verification. The Secured Party may verify any Collateral in any
manner and through any medium which the Secured Party may deem appropriate, and
the Debtor shall furnish such assistance as the Secured Party may reasonably
require in connection therewith.
6. Default.
(a) Each of the following shall constitute an "Event of Default"
hereunder: (i) the occurrence of an Event of Default under the Loan
Agreement; (ii) failure by the Debtor to perform any material
obligations under this Agreement or under any other agreement between
the Debtor and the Secured Party or by the Debtor in favor of the
Secured Party, time being of the essence (subject, however, to any
applicable notice and cure periods); (iii) material falsity in any
certificate, statement, representation, warranty or audit at any time
furnished by or on behalf of the Debtor or any endorser or guarantor
or any other party liable for payment of all or part of the
Indebtedness, pursuant to or in connection with this Agreement or
otherwise to the Secured Party, including warranties in this Agreement
and including any omission to disclose any substantial contingent or
liquidated liabilities required to be disclosed) or any material
adverse change in facts disclosed by any certificate, statement,
representation, warranty or audit furnished to the Secured Party; or
(iv) any attachment or levy against the Collateral or any other
occurrence which inhibits the Secured Party's free access to the
Collateral (including, without limitation, the Secured Party's receipt
of any notice from a lessor of real property where collateral is
located indicating that the lease will be terminated prior to its
scheduled termination date) (except, however, that the relocation of
the Debtor's principal offices to Jacksonville, Florida shall not be
deemed an Event of Default hereunder or under any other Loan
Document).
(b) Upon the occurrence of an Event of Default, the Secured Party
may exercise such remedies and rights as are available hereunder,
under the Loan Agreement or otherwise (including without limitation,
acceleration of the Indebtedness or any part thereof).
(c) Upon the occurrence of any Event of Default, the Secured
Party's rights with respect to the Collateral shall be those of a
secured party under the Uniform Commercial Code and any other
applicable law in effect from time to time. The Secured Party shall
also have any additional rights granted
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herein and in any other agreement now or hereafter in effect between
the Debtor and the Secured Party. If requested by the Secured Party
after the occurrence of an Event of Default, the Debtor will assemble
the Collateral and make it available to the Secured Party at a place
to be designated by the Secured Party.
(d) The Debtor agrees that any notice by the Secured Party of the
sale or disposition of the Collateral or any other intended action
hereunder, whether required by the Uniform Commercial Code or
otherwise, shall constitute reasonable notice to the Debtor if the
notice is mailed by regular or certified mail, postage prepaid, at
least five days before the action to the Debtor's address as specified
in this Agreement or to any other address which the Debtor has
specified in writing to the Secured Party as the address to which
notices shall be given to the Debtor.
(e) The Debtor shall pay all costs and expenses incurred by the
Secured Party in enforcing this Agreement, realizing upon any
Collateral and collecting any Indebtedness (including a reasonable
attorney's fee) whether suit is brought or not and whether incurred in
connection with collection, trial, appeal or otherwise and, to the
extent of the Debtor's liability for repayment of any of the
Indebtedness, shall be liable for any deficiencies in the event the
proceeds of disposition of the Collateral do not satisfy the
Indebtedness in full. Nothing contained herein shall be deemed to
require the Secured Party to proceed against the Collateral or any
part thereof before or as a condition to the pursuit of any of its
other rights and remedies in respect of the Indebtedness.
7. Miscellaneous.
(a) The Debtor authorizes the Secured Party at the Debtor's
expense to file any financing statements relating to the Collateral
(without the Debtor's signature thereon) which the Secured Party deems
appropriate and the Debtor irrevocably appoints the Secured Party as
the Debtor's attorney-in-fact to execute any such financing statements
in the Debtor's name and to perform all other acts which the Secured
Party deems appropriate to perfect and to continue perfection of the
Security Interest.
(b) The Debtor hereby irrevocably consents to any act by the
Secured Party or its agents in entering upon any premises for the
purposes of either (i) inspecting the Collateral or (ii) taking
possession of the Collateral after any Event of Default in any
commercially reasonable manner; and the Debtor hereby waives its right
to assert against the Secured Party or its agents any claim based upon
trespass or any similar cause
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of action for entering upon any premises where the Collateral may be
located.
(c) The Debtor authorizes the Secured Party to collect and apply
against the Indebtedness any refund of insurance premiums or any
insurance proceeds payable on account of the loss or damage to any of
the Collateral and appoints the Secured Party as the Debtor's
attorney-in-fact to endorse any check or draft representing such
proceeds or refund.
(d) Upon the Debtor's failure to perform any of its duties
hereunder, the Secured Party may, but it shall not be obligated to,
perform any of the duties and the Debtor shall forthwith upon demand
reimburse the Secured Party for any expenses incurred by the Secured
Party in so doing.
(e) No delay or omission by the Secured Party in exercising any
right hereunder or with respect to any Indebtedness shall operate as a
waiver of that or any other right, and no single or partial exercise
of any right shall preclude the Secured Party from any other or
further exercise of the right or the exercise of any other right or
remedy. The Secured Party may cure any Event of Default by the Debtor
in any reasonable manner without waiving the Event of Default so cured
and without waiving any other prior or subsequent Event of Default by
the Debtor. All rights and remedies of the Secured Party under this
Agreement and under the Uniform Commercial Code shall be deemed
cumulative.
(f) The Secured Party shall exercise reasonable care in the
custody and preservation of the Collateral to the extent required by
law and it shall be deemed to have exercised reasonable care if it
takes such action for that purpose as the Debtor shall reasonably
request in writing; however, no omission to do any act not requested
by the Debtor shall be deemed a failure to exercise reasonable care
and no omission to comply with any requests by the Debtor shall of
itself be deemed a failure to exercise reasonable care. The Secured
Party shall have no obligation to take and the Debtor shall have the
sole responsibility for taking any steps to preserve rights against
all prior parties to any instrument or chattel paper in the Secured
Party's possession as Collateral or as proceeds of the Collateral. The
Debtor waives notice of dishonor and protest of any instrument
constituting Collateral at any time held by the Secured Party on which
the Debtor is in any way liable and waives notice of any other action
taken by the Secured Party.
(g) After the occurrence of any Event of Default, the Secured
Party may notify any Account Debtor of the Security Interest and may
also direct such Account Debtor to make all payments on the Collateral
to the Secured Party. All payments
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on and other proceeds from the Collateral received by the Secured
Party directly or from the Debtor shall be applied to the Indebtedness
in such order and manner and at such time as the Secured Party shall
in its sole discretion determine. Unless the Secured Party notifies
the Debtor in writing that it dispenses with one or more of the
following requirements, any payments on or other proceeds of the
Collateral received by the Debtor after notification to any Account
Debtor in accordance with the terms hereof shall be held by the Debtor
in trust for the Secured Party in the same medium in which received,
shall not be commingled with any assets of the Debtor and shall be
turned over to the Secured Party not later than the next business day
following the day of their receipt. The Debtor shall also promptly
notify the Secured Party of the return to or repossession by the
Debtor of goods underlying any Collateral.
(h) The Debtor authorizes the Secured Party without affecting the
Debtor's obligations hereunder from time to time (i) to take from any
party and hold collateral (other than the Collateral) for the payment
of the Indebtedness or any part thereof, and to exchange, enforce or
release such collateral or any part thereof, (ii) to accept and hold
the endorsement or guaranty of payment of the Indebtedness or any part
thereof and to release or substitute any such endorser or guarantor or
any party who has given any security interest in any collateral as
security for the payment of the Indebtedness or any part thereof or
any party in any way obligated to pay the Indebtedness or any part
thereof; and (iii) upon the occurrence of any Event of Default to
direct the manner of the disposition of the Collateral and any other
collateral and the enforcement of any endorsements or guaranties
relating to the Indebtedness or any part thereof as the Secured Party
in its sole discretion may determine.
(i) The Secured Party may demand, collect and xxx for all
proceeds (either in the Debtor's name or the Secured Party's name at
the Secured Party's option), with the right to enforce, compromise,
settle or discharge any proceeds. The Debtor irrevocably appoints the
Secured Party as the Debtor's attorney-in-fact to endorse the Debtor's
name on all checks, commercial paper and other instruments pertaining
to the proceeds before or after the occurrence of an Event of Default.
(j) The rights and benefits of the Secured Party under this
Agreement shall, if the Secured Party agrees, inure to any party
acquiring an interest in the Indebtedness or any part thereof.
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(k) The terms "Secured Party" and "Debtor" as used in this
Agreement include the heirs, personal representatives and successors
or assigns of those parties.
(l) If more than one Debtor executes this Agreement, the term
"Debtor" includes each of the Debtors as well as all of them, and
their obligations under this Agreement shall be joint and several.
(m) This Agreement may not be modified or amended nor shall any
provision of it be waived except in writing signed by the Debtor and
by an authorized officer of the Secured Party.
(n) This Agreement shall be construed under the Florida Uniform
Commercial Code and any other applicable laws in effect from time to
time.
(o) This Agreement is a continuing agreement which shall remain
in force until the last to occur of: (i) the payment in full of all
Indebtedness; (ii) the termination of all agreements or obligations
(whether or not conditional) of the Secured Party to extend credit to
the Debtor; and (iii) the termination of the Loan Agreement.
8. Restated Agreement. This Agreement amends, restates, replaces and
supersedes that certain Security Agreement dated November 14, 1996, executed by
the Debtor in favor of the Secured Party.
9. Waiver. IF AN EVENT OF DEFAULT SHOULD OCCUR, THE DEBTOR WAIVES, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THE DEBTOR MAY HAVE TO NOTICE
AND A HEARING BEFORE THE SECURED PARTY TAKES POSSESSION OF THE COLLATERAL BY
SELF-HELP, REPLEVIN, ATTACHMENT, SETOFF OR OTHERWISE.
EXECUTED and delivered as of the day and year first above written.
ARMOR HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxx
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Its: Vice President - Finance
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XXXXXXX BANK, N.A.
By: /s/ Xxxxxx X. Xxxxxx
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Its: Loan Closing Officer
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