Exhibit 10.2

 

THIRD AMENDMENT
TO
LOAN AND SECURITY AGREEMENT

 

THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Agreement”) is made
and entered into as of December 11, 2015 by and among LAKELAND INDUSTRIES, INC.,
a Delaware corporation (“Lakeland US”), LAKELAND PROTECTIVE WEAR INC., a
Canadian corporation (“Lakeland Canada”; Lakeland US and Lakeland Canada are
sometimes referred to herein individually as a “Borrower” and collectively as
“Borrowers”), and ALOSTAR BANK OF COMMERCE, a state banking institution
incorporated or otherwise organized under the laws of the State of Alabama
(“Lender”).

 

W I T N E S S E T H:

 

WHEREAS, Borrowers and Lender are parties to that certain Loan and Security
Agreement dated as of June 28, 2013 (as amended, restated, supplemented, or
otherwise modified from time to time, the “Loan Agreement”); and

 

WHEREAS, Borrowers and Lender desire to amend the Loan Agreement on the terms
and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing premises, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

 

1.          Defined Terms. All capitalized terms used herein and not otherwise
expressly defined herein shall have the respective meanings given to such terms
in the Loan Agreement, as amended by this Agreement.

 

2.          Investments in Lakeland Brazil. The Loan Agreement is hereby amended
by deleting Section 9.14 of the Loan Agreement and substituting the following in
lieu thereof:

 

9.14      Lakeland Brazil. Without limiting the generality of anything contained
in Section 9.1 or Section 9.9, loan, invest, distribute or otherwise transfer
any money or any other assets to Lakeland Brazil or Lake Brasil Industria e
Comercio de Roupas e Equipamentos de Protecao Individual LTDA (“Qualytextil”),
the buyer of Lakeland Brazil; provided, however, that Borrowers may transfer to
Qualytextil a net amount of up to $2,500,000 in the aggregate from and after
December 11, 2015 (all or part of which may be in the form of a loan) for
purposes of settling value-added tax claims and paying expenses incurred in
connection therewith so long as, after giving effect to any such transfer,
Availability is at least $3,000,000 (it being agreed that, solely for the
purposes of this paragraph, Availability shall be determined without giving
effect to the Maximum Revolver Facility Amount). Borrowers acknowledge and agree
that any and all rights of Borrowers in connection with any such loan, including
all collateral therefor, constitute Collateral, and Borrowers shall cause all
payments with respect to any such loan to be made directly to Lender for
application to the Obligations. Borrowers agree to provide to Lender, promptly
following any request by Lender from time to time, such information, documents
and agreements as Lender may reasonably request in connection with any such loan
or any other transfer from any Borrower to Qualytextil. Additionally, Borrowers
may transfer to Lakeland Brazil a net amount of up to $500,000 in the aggregate
from and after December 11, 2015 for purposes of settling arbitration claims,
paying contractual expenses and paying expenses incurred in connection with sale
of the stock of Lakeland Brazil so long as, after giving effect to any such
transfer, Availability is at least $3,000,000 (it being agreed that, solely for
the purposes of this paragraph, Availability shall be determined without giving
effect to the Maximum Revolver Facility Amount).

 

 

 

 

3.          Minimum Availability Covenant. The Loan Agreement is hereby amended
by inserting the following new clause (d) in Item 16 of the Terms Schedule:

 

      (d)          Borrowers shall cause Availability to be at least $3,000,000
at all times (it being agreed that, solely for the purposes of this paragraph,
Availability shall be determined without giving effect to the Maximum Revolver
Facility Amount).

 

4.          Sale of Real Estate. Borrowers have informed Lender that Borrowers
intend to sell the real property enrolled before the Second Real Estate Registry
Office of the city of Salvador, State of Bahia, Brazil, under the numbers 780,
781, 75667 and 76982 (the “Brazilian Real Estate”). Lender hereby consents to
the sale of the Brazilian Real Estate so long as the net proceeds thereof are
paid directly to Lender for application to the Obligations.

 

5.          New Chief Financial Officer. Borrowers have informed Lender that
Teri Hunt has replaced Gary Pokrassa as Chief Financial Officer of each Borrower
and Laidlaw, Adams & Peck, Inc. Accordingly, the Loan Agreement is hereby
amended by deleting each reference to “Gary Pokrassa” and substituting “Teri
Hunt” in lieu thereof.

 

6.          Costs and Expenses. In consideration of the accommodations made by
Lender hereunder, Borrowers agree to pay to Lender, on demand, all costs and
expenses of Lender in connection with the preparation, execution, delivery and
enforcement of this Agreement and the other Loan Documents and any other
transactions contemplated hereby and thereby, including, without limitation, the
fees and out-of-pocket expenses of legal counsel to Lender. Without limiting any
provision of the Loan Agreement, Borrowers hereby agree that Lender may charge
any amount due under this paragraph to Borrowers’ loan account as a Revolver
Loan.

 

7.          Representations and Warranties of Borrowers. Borrowers represent and
warrant that (a) no Event of Default exists; (b) the representations and
warranties of Borrowers contained in the Loan Agreement were true and correct in
all material respects when made and continue to be true and correct in all
material respects on the date hereof (except to the extent such representations
or warranties were made with respect to a specific date, in which case they
shall be true and correct in all material respects as of the such date); (c) the
execution, delivery and performance by Borrowers of this Agreement and the
consummation of the transactions contemplated hereby are within the corporate
power of each Borrower, have been duly authorized by all necessary corporate
action on the part of each Borrower, do not violate any provisions of any law,
rule or regulation or any provision of any order, writ, judgment, injunction,
decree, determination or award presently in effect in which any Borrower is
named or any provision of the charter documents of any Borrower, and do not
result in a breach of or constitute a default under any agreement or instrument
to which any Borrower is a party or by which any Borrower or any of properties
of any Borrower are bound; (d) this Agreement constitutes the legal, valid and
binding obligation of each Borrower, enforceable against each Borrower in
accordance with its terms; (e) each Borrower is entering into this Agreement
freely and voluntarily with the advice of legal counsel of its own choosing; and
(f) each Borrower has freely and voluntarily agreed to the releases, waivers and
undertakings set forth in this Agreement.

 

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8.          Reaffirmation of Representations and Warranties. Each Borrower
hereby restates, ratifies and reaffirms each and every term, condition,
representation and warranty heretofore made by such Borrower under or in
connection with the execution and delivery of the Loan Agreement, as amended
hereby, and the other Loan Documents, as fully as though such representations
and warranties had been made on the date hereof and with specific reference to
this Agreement and the Loan Documents (except to the extent such representations
or warranties were made with respect to a specific date, in which case they
shall be true and correct in all material respects as of the such date).

 

9.          Reaffirmation of Obligations. Each Borrower hereby ratifies and
reaffirms the Loan Agreement and all of its obligations and liabilities
thereunder, except to the extent expressly modified by this Agreement. Each
Borrower acknowledges and agrees that all terms and provisions, covenants and
conditions of the Loan Agreement, as amended hereby, shall be and remain in full
force and effect and constitute the legal, valid, binding and enforceable
obligations of such Borrower in accordance with their respective terms as of the
date hereof.

 

10.         No Other Amendment. Each Borrower acknowledges that (a) except as
expressly set forth herein, Lender has not agreed to (and has no obligation
whatsoever to discuss, negotiate or agree to) any restructuring, modification,
amendment, waiver or forbearance with respect to the Loan Agreement or any other
Loan Document, (b) no understanding with respect to any other restructuring,
modification, amendment, waiver or forbearance with respect to the Loan
Agreement or any of the terms thereof or of any other Loan Document shall
constitute a legally binding agreement or contract, or have any force or effect
whatsoever, unless and until reduced to writing and signed by an authorized
representative of Borrowers and Lender, and (c) the execution and delivery of
this Agreement has not established any course of dealing among the parties
hereto or created any obligation or agreement of Lender with respect to any
future restructuring, modification, amendment, waiver or forbearance with
respect to the Obligations or any of the terms of the Loan Documents.

 

11.         Waiver and Release. To induce Lender to enter into this Agreement
and grant the accommodations set forth herein, each Borrower (a) acknowledges
and agrees that no right of offset, defense, counterclaim, claim or objection
exists in favor of such Borrower against Lender arising out of or with respect
to the Loan Agreement, any other Loan Document, the Obligations, or any other
arrangement or relationship between Lender and one or more Borrowers, and (b)
releases, acquits, remises and forever discharges Lender and its affiliates and
all of their past, present and future officers, directors, employees, agents,
attorneys, representatives, successors and assigns from any and all claims,
demands, actions and causes of action, whether at law or in equity, whether now
accrued or hereafter maturing, and whether known or unknown, which such Borrower
now or hereafter may have by reason of any manner, cause or things to and
including the date of this Agreement with respect to matters arising out of or
with respect to the Loan Agreement, any other Loan Document, the Obligations, or
any other arrangement or relationship between Lender and one or more Borrowers.

 

12.         No Waiver. Neither this Agreement nor Lender’s continued making of
Loans or other extensions of credit at any time extended to Borrowers shall be
deemed a waiver of or consent to any Event of Default.

 

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13.         Agreement is a Loan Document. This Agreement shall constitute a
“Loan Document” and the breach of any representation, warranty, covenant or
agreement by any Borrower hereunder shall constitute an Event of Default under
the Loan Agreement.

 

14.         Counterparts; Facsimile or Electronic Signatures. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which, when so executed and delivered, shall be
deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same instrument. Delivery of an executed counterpart
of this Agreement by telecopier or e-mail shall be equally as effective as
delivery of an original executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by telecopier or e-mail
also shall deliver an original executed counterpart of this Agreement, but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Agreement.

 

15.         Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

 

16.         Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Georgia, other than its laws
respecting choice of law.

 

17.         References. Any reference to the Loan Agreement contained in any
document, instrument or agreement executed in connection with the Loan
Agreement, shall be deemed to be a reference to the Loan Agreement as modified
by this Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to Loan
and Security Agreement to be duly executed as of the date first above written.

 

  BORROWERS:   LAKELAND INDUSTRIES, INC.

 

  By: /s/ Teri Hunt     Name: Teri Hunt     Title: Chief Financial Officer      
    [SEAL]

 

  LAKELAND PROTECTIVE WEAR INC.

 

  By:  /s/ Teri Hunt     Name: Teri Hunt     Title: Chief Financial Officer    
      [SEAL]

 

  Accepted in Atlanta, Georgia:   LENDER:   ALOSTAR BANK OF COMMERCE

 

  By: /s/ Wes Scott     Name: Wes Scott     Title: Vice President

 

Third Amendment to Loan and Security Agreement

 

 

 

 

ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR

 

Please refer to the foregoing Third Amendment to Loan and Security Agreement
(the “Agreement”). Capitalized terms used herein have the meanings ascribed to
such terms in the Agreement and in the Loan Agreement referred to therein.

 

Laidlaw Adams & Peck Inc. (“Guarantor”) has guaranteed the indebtedness of
Borrowers to Lender pursuant to that certain Continuing Guaranty by Guarantor in
favor of Lender dated as of June 28, 2013 (the “Guaranty”).

 

Guarantor hereby (a) acknowledges receipt of the Agreement; (b) consents to the
terms and execution of the Agreement; (c) reaffirms the obligations of Guarantor
to Lender pursuant to the terms of the Guaranty; and (d) acknowledges that
Lender may amend, restate, extend, renew or otherwise modify the Loan Agreement
and any indebtedness or agreement of any Borrower, or enter into any agreement
or extend additional or other credit accommodations, without notifying or
obtaining the consent of Guarantor and without impairing the liability of
Guarantor under the Guaranty for all of each Borrower’s present and future
indebtedness to Lender.

 

Additionally, Guarantor, in order to induce Lender to enter into the Agreement
and grant the accommodations set forth therein, (y) acknowledges and agrees that
no right of offset, defense, counterclaim, claim or objection exists in favor of
Guarantor against Lender arising out of or with respect to the Loan Agreement,
the Guaranty, any other Loan Document, the Obligations, or any other arrangement
or relationship between Lender and any Borrower or Guarantor, and (z) releases,
acquits, remises and forever discharges Lender and its affiliates and all of
their past, present and future officers, directors, employees, agents,
attorneys, representatives, successors and assigns from any and all claims,
demands, actions and causes of action, whether at law or in equity, whether now
accrued or hereafter maturing, and whether known or unknown, which any Borrower
or Guarantor now or hereafter may have by reason of any manner, cause or things
to and including the date of this Agreement with respect to matters arising out
of or with respect to the Loan Agreement, the Guaranty, any other Loan Document,
the Obligations, or any other arrangement or relationship between Lender and one
or more Borrowers or Guarantor.

 

[Remainder of Page Intentionally Left Blank]

 

 

 

 

IN WITNESS WHEREOF, the Guarantor has caused this Acknowledgement and Agreement
of Guarantor to be duly executed as of the date first above written.

 

  LAIDLAW ADAMS & PECK INC.           By:  /s/ Teri Hunt     Name: Teri Hunt    
Title: Chief Financial Officer