Exhibit 10.10

LOAN AGREEMENT
 
 
Wells Fargo Bank, N.A.
4 Corporate Drive
Shelton, Connecticut  06484
(Hereinafter referred to as the "Bank")

Acme United Corporation
60 Round Hill Road
Fairfield, Connecticut 06824
(Hereinafter referred to as "Borrower")
 
This Loan Agreement ("Agreement") is entered into as of February 18, 2011, by
and between Bank and Borrower.

This Agreement amends and restates in its entirety that certain Revolving Loan
and Security Agreement by and between Borrower and Bank, as successor in
interest by merger to Wachovia Bank, N.A., dated August 2, 2002, and 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") 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:

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 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,
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 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/ofac/programs/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/ofac/sdn/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
material pending or threatened suits, claims or demands against Borrower or any
guarantor that have not been disclosed to Bank by Borrower in writing, and
approved by Bank.   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.

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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.  Compliance with Other 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 Certificates.  Furnish, within 15 days
after request by Bank, a written statement duly acknowledged of the amount due
under the Loan 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,
making all replacements, additions and improvements thereto necessary for the
proper conduct of its business, unless prohibited by the Loan
Documents.  Non-Default Certificate From Borrower.  Deliver to Bank, with the
Financial Statements required below, a certificate signed by a principal
financial officer of Borrower, in the form attached hereto as Exhibit A,
warranting that no "Default" as specified in the Loan Documents nor any event
which, upon the giving of notice or lapse of time or both, would constitute such
a Default, has occurred and demonstrating Borrower’s compliance with the
financial covenants contained herein.  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.  With the exception of  financial
statements, reports, notices and proxy statements posted on EDGAR, deliver to
Bank, promptly, a copy of all other financial statements, reports, notices, and
proxy statements, sent by Borrower to stockholders, and all other regular or
periodic reports required to be filed by Borrower with any governmental agency
or authority.

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NEGATIVE COVENANTS.  Borrower and each guarantor agree that from the date hereof
and until final payment in full of the Obligations, unless Bank shall otherwise
consent in writing, Borrower and each guarantor will not:   Change in Fiscal
Year.  Change its fiscal year.  Change of Control.  Make or suffer a change of
ownership that effectively changes control of Borrower from current ownership.  
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 obligation to a third party incurred for money
borrowed.  Guarantees.  Guarantee or otherwise become responsible for
obligations of any other person or entity, without the written consent of the
Bank. 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
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 property of
or debts due Borrower or any guarantor, in an amount in excess of $175,000.00,
that is not discharged or execution is not stayed within 60 days of
entry.  Limitation on Debt.  Directly or indirectly, create, incur, assume or
become liable for, any debt, contingent or direct, other than the indebtedness
evidenced by the Note and the Permitted Debt shown on Exhibit B attached hereto
and made a part hereof.  Encumbrances.  Except as previously disclosed to Bank,
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 Permitted Liens shown on Exhibit B
attached hereto and made a part hereof.  Loans and Advances.  During any fiscal
year, make loans or advances, excepting loans and advances to any subsidiary,
suppliers or vendors in the ordinary course of business, and ordinary course of
business travel and expense advances, to any person or entity.

ANNUAL FINANCIAL STATEMENTS.  Borrower shall deliver to Bank, within ninety (90)
days after the end of each fiscal year, a detailed audited financial report of
Borrower and its subsidiaries containing a consolidated and consolidating
balance sheet at the end of that period and a consolidated and consolidating
income statement and statement of cash flows for that period, setting forth in
comparative form the figures for the preceding fiscal year, together with all
supporting schedules and footnotes, and containing an audit opinion of
independent certified public accountants acceptable to Bank that the financial
statements were prepared in accordance with GAAP.  Borrower shall obtain such
written acknowledgments from Borrower's independent certified public accountants
as Bank may require permitting Bank to rely on such annual financial
statements.  In addition, promptly upon receipt, one copy of each written report
submitted to Borrower by independent accountants for any other annual, quarterly
or special audit will be provided to Bank.

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PERIODIC FINANCIAL STATEMENTS.  Borrower shall deliver to Bank, within
forty-five (45) days after the end of each quarter, a consolidated and
consolidating balance sheet of Borrower and its subsidiaries at the end of that
period and a consolidated and consolidating income statement and statement of
cash flows for that period (and for the portion of the fiscal year ending with
such period), together with all supporting schedules, setting forth in
comparative form the figures for the same period of the preceding fiscal year,
and certified by the chief financial officer of Borrower as true and correct and
fairly representing the financial condition of Borrower and its subsidiaries and
that such statements are prepared in accordance with GAAP, except without
footnotes and subject to normal year-end audit adjustments.

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 its primary depository account
and cash management account with Bank. 

Tangible Net Worth.   Borrower on a consolidated basis shall, at all times,
maintain a Tangible Net Worth of not less than $18,000,000.00.  "Total
Liabilities" shall mean all liabilities of Borrower, including capitalized
leases and all reserves for deferred taxes and other deferred sums appearing on
the liabilities side of a balance sheet of Borrower, in accordance with GAAP
applied on a consistent basis.  "Tangible Net Worth" shall mean the  total
assets minus Total Liabilities.  For purposes of this computation, the aggregate
amount of any intangible assets of Borrower including, without limitation,
goodwill, franchises, licenses, patents, trademarks, trade names, copyrights,
service marks, prepaid pension costs and brand names, shall be subtracted from
total assets.  This covenant shall be tested quarterly.

Total Liabilities to Tangible Net Worth Ratio.  Borrower, on a consolidated
basis,  shall, at all times, maintain a ratio of Total Liabilities divided by
Tangible Net Worth of not more than 1.75 to 1.00.  "Total Liabilities" shall
mean all liabilities of Borrower, including capitalized leases and all reserves
for deferred taxes and other deferred sums appearing on the liabilities side of
a balance sheet of Borrower, in accordance with GAAP applied on a consistent
basis.  "Tangible Net Worth" shall mean the  total assets minus Total
Liabilities.  For purposes of this calculation, the aggregate amount of any
intangible assets of Borrower including, without limitation, goodwill,
franchises, licenses, patents, trademarks, trade names, copyrights, service
marks, prepaid pension costs and brand names, shall be subtracted from total
assets.  This covenant shall be tested quarterly.

Fixed Charge Coverage Ratio.  Borrower, on a consolidated basis, shall maintain
a Fixed Charge Coverage Ratio of not less than 2.0 to 1.0, to be calculated at
the end of each fiscal quarter on a rolling four quarter basis.  “Fixed Charge
Coverage Ratio” shall mean the sum of earnings before interest, taxes,
depreciation and amortization, less Unfinanced Capital Expenditures, dividends,
and funds used for stock repurchases, divided by the sum of interest expense
plus current maturities of long-term debt paid during the prior four
quarters.  “Unfinanced Capital Expenditures” shall mean increases in fixed
assets over a rolling four quarter basis, less financing associated with the
purchase of such fixed assets.

CONDITIONS PRECEDENT.  The obligations of Bank to make the loan and any advances
pursuant to this Agreement are subject to the following conditions
precedent: Additional Documents.  Receipt by Bank of such additional supporting
documents as Bank or its counsel may reasonably request.

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CONNECTICUT PREJUDGMENT REMEDY WAIVER.  BORROWER ACKNOWLEDGES THAT THE
TRANSACTIONS REPRESENTED BY THIS AGREEMENT ARE COMMERCIAL TRANSACTIONS AND
HEREBY VOLUNTARILY AND KNOWINGLY WAIVES ANY RIGHTS TO NOTICE OF AND HEARING ON
PREJUDGMENT REMEDIES UNDER CHAPTER 903A OF THE CONNECTICUT GENERAL STATUTES OR
OTHER STATUTES AFFECTING PREJUDGMENT REMEDIES, AND AUTHORIZES THE BANK'S
ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT ORDER, PROVIDED
THE COMPLAINT SHALL SET FORTH A COPY OF THIS WAIVER.

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

 

  ACME UNITED CORPORATION                   By:           Walter C. Johnsen    
 Its: Chairman of the Board and
Chief Executive Officer
     Duly Authorized                           WELLS FARGO BANK, N.A.          
        By:         John Mulvey, Senior Vice President                

 

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EXHIBIT A

NON-DEFAULT CERTIFICATE

In accordance with the terms of the Loan Documents dated February 18, 2011 by
and between Wells Fargo Bank, N. A. and Acme United Corporation (“Borrower”), I
hereby certify that:

1.
I am a principal financial officer of Borrower;

2.
The enclosed financial statements are prepared in accordance with generally
accepted accounting principles;

3.
No Default (as defined in the Loan Documents) or any event which, upon the
giving of notice or lapse of time or both, would constitute such a Default, has
occurred.

4.
Borrower is in compliance with the Financial Covenant(s) set forth in the Loan
Documents, as demonstrated by the calculations contained in the Covenant
Compliance Certificate attached hereto as Schedule 1.

_______________________________
Walter C. Johnsen
Its: Chairman of the Board and Chief Executive Officer
Duly Authorized

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SCHEDULE 1

COVENANT COMPLIANCE CERTIFICATE

Borrower Name: Acme United Corporation

For the fiscal ________________________ ended ____________________

ALL CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN
IN THE LOAN DOCUMENTS.

 

COVENANT ACTUAL REQUIRED       Fixed Charge Coverage Ratio   not less than 2.00
to 1.00          
Compliance?  Yes    No
      Total Liabilities to Tangible Net Worth   not more than 1.75 to 1.00      
    Compliance?  Yes    No       Tangible Net Worth   Not less than
$18,000,000.00           Compliance?  Yes    No

 
 
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Exhibit B
 

Permitted Debt
 
1. Debt of any subsidiary to or from Borrower or another subsidiary.

2. Debt associated with equipment leases and real property leases previously
disclosed to Bank.

Permitted Liens

1. Liens securing Permitted Debt.
 
 
 
 
 
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