lake_ex104





 







Exhibit 10.4


 


This
instrument prepared by and after


recordation
should be returned to:


Austin
A. Averitt, Esq.


Butler
Snow LLP


One
Federal Place, Suite 1000


1819
Fifth Avenue North


Birmingham,
Alabama 35203


(205)
297-2225


 




STATE
OF ALABAMA

)






 




COUNTY
OF MORGAN

)






 



NON-ENCUMBRANCE AGREEMENT


 


THIS NON-ENCUMBRANCE AGREEMENT (the
“Agreement”) is
delivered and effective as of June 25, 2020, by LAKELAND INDUSTRIES, INC., a Delaware
corporation (the “Borrower”), for the benefit
of BANK OF AMERICA, N.A.
(together with its successors or assigns, the “Bank”).


 


WHEREAS, pursuant to that certain Loan
Agreement dated as of June 12, 2020, (as may be amended, the
“Loan
Agreement”; together with this Agreement and all other
documents, agreements and instruments executed and delivered in
connection therewith, collectively, the “Loan Documents”;
capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed in the Loan Agreement), Bank has
agreed to make available to Borrower a line of credit in the
maximum principal amount of up to Twelve Million Five Hundred
Thousand and No/100 Dollars ($12,500,000.00) (as amended, extended,
modified, renewed, restated or refinanced, collectively, the
“Loan”);


 


WHEREAS, as a condition of the Loan,
Bank requires that Borrower execute and deliver this
Agreement.


 


NOW, THEREFORE, in consideration of the
Loan and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, Borrower agrees as
follows:


 

1. No Transfer or Encumbrance of the Land.
Borrower is the owner in fee simple of the real estate described on
Exhibit A and all
improvements thereon (as may be amended, collectively, the
“Land”).
Borrower acknowledges that Bank has examined and relied on the
creditworthiness of Borrower in agreeing to make the Loan, and that
Bank will continue to rely on Borrower’s ownership of the
Land as a means of maintaining the value of the Land and
Borrower’s ability to pay the Loan. Borrower acknowledges
that Bank has a valid interest in maintaining the value of the
Land. Borrower shall not, without the prior written consent of
Bank, which consent shall be determined in Bank’s sole and
absolute discretion, sell, convey, alien, assign, mortgage,
encumber, pledge or otherwise transfer the Land or any part
thereof, or permit the Land or any part thereof to be sold,
conveyed, aliened, assigned, mortgaged, encumbered, pledged or
otherwise transferred. The foregoing prohibitions shall apply to
any and all acts or omissions so described, without regard to
whether such acts or omissions may occur voluntarily or involuntary
or by operation of law or otherwise.


 




 

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2. Insurance. Borrower shall keep, or cause
to be kept, the Land insured against loss or damage by fire,
extended coverage perils, vandalism, malicious mischief, and any
such other hazards, casualties, or other contingencies as more
particularly set out in the Loan Documents.


 

3. Taxes and Assessments. Borrower will pay
all taxes and assessments against or affecting the Land as the same
shall become due and payable, and, if Borrower fails to do so, Bank
may pay them, together with all costs and penalties thereon, at
Borrower’s expense. Notwithstanding the foregoing, Borrower
may in good faith by appropriate proceedings contest the validity
of such taxes and assessments and, pending such contest, Borrower
shall not be deemed in default hereunder due to such nonpayment if
(i) prior to delinquency of the asserted tax or assessment,
Borrower furnishes Bank an indemnity bond, and (ii) Borrower
promptly pays any amount adjudged by a court of competent
jurisdiction to be due, with all costs, penalties and interest
thereon, before such judgment becomes final.


 

4. Waste, Demolition, Alteration, Replacement or
Repair of Land. Borrower shall cause the Land and every part
thereof to be maintained, preserved, kept safe and in good repair,
and in good working condition. Borrower shall not commit or permit
waste thereon. Borrower shall not remove, demolish or alter the
design or structural character of the Land or the Land now or
hereafter erected on the Land without the express prior written
consent of Bank. Borrower shall comply with all laws and
regulations of any governmental authority with reference to the
Land and the manner and use of the same, and shall from time to
time make all necessary and proper repairs, renewals, additions and
restorations thereto so that the value and efficient use thereof
shall be fully preserved and maintained. Borrower will discharge
all claims for labor performed and material furnished therefor, and
will not suffer any lien of mechanics or materialmen to attach to
any part of the Land. Borrower agrees not to remove any of the
fixtures included in the Land without the express prior written
consent of Bank and unless the same is immediately replaced with
like property of at least equal value and utility.


 

5. Access. Bank and other persons
authorized by Bank shall have access to and the right to enter and
inspect the Land at all reasonable times, and upon reasonable
notice to Borrower, including monthly inspections if deemed
necessary by Bank. In the event Bank finds that Borrower is not
maintaining the Land as referenced herein, Bank shall notify
Borrower in writing of the needed repairs and Borrower shall have
twenty (20) business days to make satisfactory arrangements to
bring the Land back to good condition. If after such time,
satisfactory arrangements have not been made to bring the Land back
to good condition as determined by the reasonable discretion of
Bank, Bank shall have the right to make the repairs required at the
expense of Borrower as previously enunciated in this Agreement, or
shall have the right to declare the Loan to be at once due and
payable.


 




 

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6. Hold Harmless. Borrower will defend, at
its own cost and expense, and hold Bank harmless from, any
proceeding or claim affecting the Land. All costs and expenses
incurred by Borrower in protecting its interest hereunder,
including all court costs and reasonable attorneys’ fees,
shall be borne by Borrower.


 

7. Notices by Governmental Authority, Fire and
Casualty Losses, Etc. Borrower shall timely comply with and
promptly furnish to Bank true and complete copies of any official
notice or claim by any governmental authority pertaining to the
Land. Borrower shall promptly notify Bank of any fire or other
casualty or any notice or taking of eminent domain action or
proceeding affecting the Land.


 

8. Recording and Filing. This Agreement and
all applicable Loan Documents and all amendments, supplements and
extensions thereto and substitutions therefor shall be recorded,
filed, rerecorded and refiled in such manner and in such places as
Bank shall reasonably request, and Borrower will pay all such
recording, filing, rerecording and refiling fees, title insurance
premiums, and other charges.


 

9. Termination. If (A) Borrower shall pay
and satisfy in full (i) the Loan and any and all other sums payable
under the Loan Agreement and the Loan Documents and any and all
extensions and renewals of the same (including future advances) and
there shall be no additional commitment or other obligation of Bank
to fund any additional moneys or other obligations thereunder; and
(ii) all sums becoming due and payable by Borrower under the terms
of this Agreement and the Loan Documents, including but not limited
to advances made by Bank pursuant to the terms and conditions of
this Agreement; (B) have kept and performed each and every
obligation, covenant, duty, condition and agreement herein imposed
on or agreed to by Borrower; and (C) pay and satisfy all
obligations and all other liabilities of any kind under the Loan
Documents; then this Agreement shall become null and void and Bank
in such case shall, upon the request of Borrower and at
Borrower’s expense, deliver to Borrower proper instruments
acknowledging termination of this Agreement; otherwise, this
Agreement shall remain in full force and effect.


 

10. Notice and Addresses for Notices. All
notices, requests, demands and other communications provided for
hereunder shall be in writing and made in accordance with the terms
of the Loan Agreement.


 

11. Controlling
Law. Except to the
extent that any law of the United States may apply, this Agreement
shall be governed and interpreted according to the laws of Alabama,
without regard to any choice of law, rules or principles to the
contrary. Nothing in this paragraph shall be construed to limit or
otherwise affect any rights or remedies of the Bank under federal
law.


 




 

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12. Venue
and Jurisdiction. The
Borrower agrees that any action or suit against the Bank arising
out of or relating to this Agreement shall be filed in federal
court or state court located in the State of Alabama. The Borrower
agrees that the Bank shall not be deemed to have waived its rights
to enforce this section by filing an action or suit against the
Borrower or any Obligor in a venue outside of the State of Alabama.
If the Bank does commence an action or suit arising out of or
relating to this Agreement, the Borrower agrees that the case may
be filed in federal court or state court in the State of Alabama.
The Bank reserves the right to commence an action or suit in any
other jurisdiction where the Borrower has any presence. The
Borrower consents to personal jurisdiction and venue in such forum
selected by the Bank and waives any right to contest jurisdiction
and venue and the convenience of any such forum. The provisions of
this section are material inducements to the Bank’s
acceptance of this Agreement.


 

13. Jury
Trial Waiver.
BORROWER HEREBY WAIVES TRIAL BY
JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN
CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY
RELATED TO THIS AGREEMENT OR THE LOAN
DOCUMENTS.

 

 

 

 

 




 

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IN WITNESS WHEREOF, the undersigned have
hereunto set its signature and the seal of Borrower effective as of
the date set forth above.


 


LAKELAND INDUSTRIES, INC., a Delaware
corporation


 





By: 


/s/ Allen Dillard






Allen
Dillard




Its:

Chief Financial
Officer










 





 




 

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EXHIBIT A


 



LEGAL DESCRIPTION


 


Parcel
I:


A
portion of Unit A-7 of Certificate to Subdivide No. 1055-84 as
approved by the Decatur City Planning Commission and as recorded in
the Morgan County Probate Office in Book 1129, at Page 468, and
more particularly described as beginning at a railroad spike at the
Northwest corner of Section 8, Township 6 South Range 4 West,
Decatur, Morgan County, Alabama and run thence S
89°25’16” E (Alabama State Coordinate System-Grid
Bearing) along the North boundary of Section 8 a distance of 50.00
feet to the East right of way margin of Central Parkway; thence S
0°39’35” W along the East right of way margin of
Central Parkway a distance of 123.03 feet to the North right of way
margin of Pride Street; thence S 89°47’51” E along
the North right of way margin of Pride Street and the North
property line of the tract being subdivided a distance of 741.56
feet to the true point of beginning of the parcel herein described;
thence continue S 89°47’51” E a distance of 535.64
feet to the Westerly right of way margin of the CSX Railroad;
thence S 8°06’34” E along the Westerly right of
way margin of the CSX Railroad a distance of 180.90 feet; thence N
89°47’51” W a distance of 759.17 feet to the
Easterly right of way margin of Valley Avenue; thence N
12°16’59” W along the Easterly right of way margin
of Valley Avenue a distance of 35.85 feet; thence S
89°47’51” E a distance of 205.13 feet; thence N
0°12’09” E a distance of 144.00 feet to the true
point of beginning, lying in the NE1/4 of the NW1/4 and the NW1/4
of the NW1/4 of Section 8, Township 6 South, Range 4 West, Decatur,
Morgan County, Alabama.


 


Parcel
II:


A
portion of Unit A-7 of Certificate to Subdivide No. 1055-84 as
approved by the Decatur City Planning Commission and as recorded in
the Morgan County Probate Office in Book 1129, at Page 468, and
more particularly described as beginning at a railroad spike at the
Northwest corner of Section 8, Township 6 South, Range 4 West,
Decatur, Morgan County, Alabama and run thence S
89°25’16” E (Alabama State Coordinate System-Grid
Bearing) along the North boundary of said Section 8 a distance of
50.00 feet to an iron pin on the East right of way margin of
Central Parkway; thence S 00°39’35” W along the
East right of way margin of Central Parkway a distance of 123.03
feet to an iron pin on the North right of way margin of Pride
Street; thence S 89°47’51” E along the North right
of way margin of Pride Street a distance of 539.76 feet to an iron
pin and the true point of beginning of the parcel herein described;
thence S 89°47’51” E a distance of 201.80 feet;
thence S 00°12’09” W a distance of 144.00 feet;
thence N 89°47’51” W a distance of 205.13 feet to
the Easterly right of way margin of Valley Avenue; thence N
12°16’59” W along the Easterly right of way margin
of Valley Avenue a distance of 46.96 feet to a point on the
cul-de-sac right of way of Pride Street; thence Easterly, then
Northeasterly, then Northwesterly direction along the Pride Street
cul-de-sac right of way, along a curve to the left, having a radius
of 50.00 feet a distance of 170.73 feet (central angle
195°38’14”) to the true point of beginning, lying
in the NW1/4 of the NW1/4 of Section 8, Township 6 South, Range 4
West, Decatur, Morgan County, Alabama.


 




 

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Parcel
III:


A
portion of Unit A of Certificate to Subdivide No. 900-81 as
approved by the Decatur City Planning Commission and as recorded in
Morgan County Probate Office in Book 1058, at Page 792, and more
specifically described as beginning at a railroad spike at the
southwest corner of Section 5, Township 6 South, Range 4 West,
Decatur, Morgan County, Alabama, and run thence No
00°28’39”E (Alabama State Coordinate System Grid
Bearing) along the west boundary of said Section 5 and also along
the centerline of Central Parkway a distance of 151.65 feet to a
railroad spike; thence S 89°47’51” E a distance of
50.00 feet to an iron pin on the east right of way margin of
Central Parkway; thence continue S 89°47’51” E a
distance of 390.73 feet to an iron pin and the true point of
beginning of the tract herein described; thence from the true point
of beginning continue S 89°47’51”E a distance of
844.58 feet to an iron pin on the westerly right of way margin of
Seaboard System Railroad; thence S 08°06’34” E
along the westerly right of way margin of Seaboard System Railroad
a distance of 277.92 feet to an iron pin; thence N
89°47’51 W a distance of 823.86 feet to an iron pin;
thence N 12°16’59” W a distance of 281.66 feet to
the true point of beginning, lying and being within the SW1/4 of
the SW1/4 of Section 5 and the NW1/4 of the NW1/4 of Section 8,
Township 6 South, Range 4 West; Decatur, Morgan County,
Alabama.


 


 


 


 


 


 


 


 




 

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