lake_ex101



 


Exhibit 10.1


 



 


LOAN
AGREEMENT


 





This
Agreement dated as of June 25, 2020, is between Bank of America,
N.A. (the "Bank") and Lakeland Industries, Inc., a Delaware
corporation (the "Borrower").

 




1.


DEFINITIONS





 


In
addition to the terms which are defined elsewhere in this
Agreement, the following terms have the meanings indicated for the
purposes of this Agreement:

 



1.1            

"Acceptable Inventory" means
inventory which satisfies the following requirements:





 



(a) 

The inventory is
owned by the Borrower free of any title defects or any liens or
interests of others except the security interest in favor of the
Bank. This does not prohibit any statutory liens which may exist in
favor of the growers of agricultural products which are purchased
by the Borrower.





 



(b) 

The inventory is
located at locations which the Borrower has disclosed to the Bank
and which are acceptable to the Bank. If the inventory is covered
by a negotiable document of title (such as a warehouse receipt)
that document must be delivered to the Bank. Inventory which is in
transit is not acceptable.





 



 (c) 

The inventory is
held for sale or use in the ordinary course of the Borrower's
business and is of good and merchantable quality. Display items,
work-in-process, samples, and packing and shipping materials are
not acceptable. Inventory which is obsolete, unsalable, damaged,
defective, used, discontinued or slow-moving, or which has been
returned by the buyer, is not acceptable.





 



 (d) 

The inventory is
covered by insurance as required in the "Covenants" section of this
Agreement.





 



(e) 

The inventory has
not been manufactured to the specifications of a particular account
debtor.





 



(f) 

The inventory is
not subject to any licensing agreements which would prohibit or
restrict in any way the ability of the Bank to sell the inventory
to third parties.





 



(g) 

The inventory has
been produced in compliance with the requirements of the U.S. Fair
Labor Standards Act (29 U.S.C. §§201 et
seq.).





 



(h) 

The inventory is
not placed on consignment.





 


For the
sake of clarity, raw materials that satisfy the requirements set
forth above are included in the definition of “Acceptable
Inventory”.

 



1.2            

"Acceptable Receivable" means an
account receivable which satisfies the following
requirements:





 



 (a) 

The account has
resulted from the sale of goods by the Borrower in the ordinary
course of the Borrower's business and without any further
obligation on the part of the Borrower to service, repair, or
maintain any such goods sold other than pursuant to any applicable
warranty.






 






 







 





  






(b) 

There are no
conditions which must be satisfied before the Borrower is entitled
to receive payment of the account. Accounts arising from COD sales,
consignments or guaranteed sales are not acceptable.





 



(c) 

The debtor upon the
account does not claim any defense to payment of the account,
whether well founded or otherwise.





 



(d) 

The account is not
the obligation of an account debtor who has asserted or may assert
any counterclaims or offsets against the Borrower (including
offsets for any "contra accounts" owed by the Borrower to the
account debtor for goods purchased by the Borrower or for services
performed for the Borrower).





 



 (e) 

The account
represents a genuine obligation of the debtor for goods sold to and
accepted by the debtor. To the extent any credit balances exist in
favor of the debtor, such credit balances shall be deducted from
the account balance.





 



(f) 

The account balance
does not include the amount of any finance or service charges
payable by the account debtor. To the extent any finance charges or
service charges are included, such amounts shall be deducted from
the account balance.





 



(g) 

The Borrower has
sent an invoice to the debtor in the amount of the
account.





 



(h) 

The Borrower is not
prohibited by the laws of the state where the account debtor is
located from bringing an action in the courts of that state to
enforce the debtor's obligation to pay the account. The Borrower
has taken all appropriate actions to ensure access to the courts of
the state where the account debtor is located, including, where
necessary, the filing of a Notice of Business Activities Report or
other similar filing with the applicable state agency or the
qualification by the Borrower as a foreign corporation authorized
to transact business in such state.





 



(i) 

The account is
owned by the Borrower free of any title defects or any liens or
interests of others except the security interest in favor of the
Bank.





 



(j)            

The debtor upon the
account is not any of the following:





 



(i) 

An employee,
affiliate, parent or subsidiary of the Borrower, or an entity which
has common officers or directors with the Borrower.





 



(ii) 

The U.S. government
or any agency or department of the U.S. government unless the Bank
agrees in writing to accept the obligation, the Borrower complies
with the procedures in the Federal Assignment of Claims Act of 1940
(41 U.S.C. §6305) with respect to the obligation, and the
underlying contract expressly provides that neither the U.S.
government nor any agency or department thereof shall have the
right of set-off against the Borrower.





 



(iii)            

Intentionally
Deleted.





 



 (iv) 

Any person or
entity located in a foreign country unless (A) the account is
supported by an irrevocable letter of credit issued by a bank
acceptable to the Bank, and, if requested by the Bank, the original
of such letter of credit and/or any usance drafts drawn under such
letter of credit and accepted by the issuing or confirming bank
have been delivered to the Bank, or (B) the account is covered by
foreign credit insurance acceptable to the Bank and the account is
otherwise an Acceptable Receivable.






 






 

1







 





 






 (k) 

The account is not
in default. An account will be considered in default if any of the
following occur:





 



(i) 

the account is not
paid within 90 days from its invoice date;





 



(ii) 

the debtor
obligated upon the account suspends business, makes a general
assignment for the benefit of creditors, or fails to pay its debts
generally as they come due; or





 



(iii) 

any petition is
filed by or against the debtor obligated upon the account under any
bankruptcy law or any other law or laws for the relief of
debtors.





 



(l) 

The account is not
the obligation of a debtor who is in default (as defined above) on
50% or more of the accounts upon which such debtor is
obligated.





 



(m) 

The account does
not arise from the sale of goods which remain in the Borrower's
possession or under the Borrower's control.





 



(n) 

The account is not
evidenced by a promissory note or chattel paper, nor is the account
debtor obligated to the Borrower under any other obligation which
is evidenced by a promissory note.





 


In
addition to the foregoing limitations, the dollar amount of
accounts included as Acceptable Receivables which are the
obligations of a single debtor shall not exceed the concentration
limit established for that debtor. To the extent the total of such
accounts exceeds a debtor's concentration limit, the amount of any
such excess shall be excluded. The concentration limit for each
debtor shall be equal to 25% of the total amount of the Borrower's
total accounts receivable at that time.

 



1.3            

“Beneficial Ownership
Certification” means a certification regarding
beneficial ownership required by the Beneficial Ownership
Regulation.






 



1.4            

“Beneficial Ownership
Regulation” means 31 C.F.R. §
1010.230.





 



1.5            

"Borrowing Base" means the sum
of:





 



(a) 

80% of the balance
due on Acceptable Receivables; and





 



(b) 

50% of the value of
Acceptable Inventory.





 


In
determining the value of Acceptable Inventory to be included in the
Borrowing Base, the Bank will use the lowest of (i) the Borrower's
cost, (ii) the Borrower's estimated market value, or (iii) the
Bank's independent determination of the resale value of such
inventory in such quantities and on such terms as the Bank deems
appropriate, provided that such valuation under this clause (iii)
shall in no event be less than 75% of the Borrower’s
cost.

 



 After calculating the Borrowing Base as provided
above, the Bank may deduct such reserves as the Bank may establish
from time to time in good faith for the amount of estimated maximum
exposure, as reasonably determined by the Bank from time to time,
under any interest rate contracts which the Borrower enters into
with the Bank (including interest rate swaps, caps, floors, options
thereon, combinations thereof, or similar contracts).

 



 1.6            

"Borrowing Base Certificate"
means a report in the format shown as Exhibit A-1, calculated by
the Borrower and setting forth the Borrowing Base on which the
requested extension of credit is to be based.





 



1.7            

Reserved.






 






 

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 1.8            

"Credit Limit" means the amount
of Twelve Million Five Hundred Thousand Dollars
($12,500,000).





 



1.9            

Reserved.





 



1.10            

Reserved.





 



1.11            

Reserved.





 



1.12            

Reserved.





 



1.13            

“Guarantor” means any
person or entity, if any, providing a guaranty with respect to the
obligations hereunder.





 



1.14            

“Land” means the land
described in Non-encumbrance Agreement.





 



1.15            

“Non-encumbrance
Agreement” means each non-encumbrance agreement of
even date herewith given by the Borrower or other applicable
Obligor to the Bank, as the same may from time to time be extended,
amended, restated, supplemented or otherwise modified.





 



1.16            

“Obligor” means any
Borrower, Guarantor and/or Pledgor, or if the Borrower is comprised
of the trustees of a trust, any trustor.





 



1.17            

Reserved.





 



1.18            

Reserved.





 



1.19            

“Pledgor” means any
person, if any, providing a pledge of collateral with respect to
the obligations hereunder.





 



 1.20            

“Related Party” means each
of the Borrower and its subsidiaries.





 




2.

LINE OF CREDIT
AMOUNT AND TERMS





 




2.1

Line of Credit
Amount.





 



(a) 

During the
availability period described below, the Bank will provide a line
of credit to the Borrower (the “Line of Credit”). The
amount of the Line of Credit (the "Commitment") is equal to the
lesser of (i) the Credit Limit, or (ii) at any time the
Borrower’s Funded Debt to EBITDA Ratio exceeds
2.00:1.00, the
Borrowing Base.





 



(b) 

This is a revolving
line of credit. During the availability period, the Borrower may
repay principal amounts and reborrow them.





 



(c) 

The Borrower agrees
not to permit the principal balance outstanding to exceed
Commitment. If the Borrower exceeds this limit, the Borrower will
immediately pay the excess to the Bank upon the Bank's
demand.





 




2.2

Availability
Period.





 


The
Line of Credit is available between the date of this Agreement and
June 12, 2025, or such earlier date as the availability may
terminate as provided in this Agreement (the "Expiration
Date").

 



The availability period for this Line of Credit will be considered
renewed if and only if the Bank has sent to the Borrower a written
notice of renewal for the Line of Credit (the “Renewal
Notice”). If this Line of Credit is renewed, it will continue
to be subject to all the terms and conditions set forth in this
Agreement except as modified by the Renewal Notice. If this Line of
Credit is renewed, the term “Expiration Date” shall
mean the date set forth in the Renewal Notice as the Expiration
Date and all outstanding principal plus all accrued interest shall
be paid on the Expiration Date. The same process for renewal will
apply to any subsequent renewal of this Line of
Credit. A renewal fee may be charged at the Bank’s
option. The amount of the renewal fee will be specified in
the Renewal Notice.


 






 

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2.3

Conditions to Each Extension of
Credit.





 


The
Borrower will deliver the following documents, dated as of the most
recent fiscal quarter-end in accordance with the Financial
Information covenant of this Agreement, before each extension of
credit under this facility, but if and only if (i) the
Borrower’s Funded Debt to EBITDA Ratio exceeds 2.00:1.00, and
(ii) a borrowing base certificate has not been provided to the Bank
within 45 days prior to the date of such request for an extension
of credit:


 




(a)

a borrowing base
certificate setting forth the amount of Acceptable Receivables and
Acceptable Inventory,






 




(b)

a detailed aging of
the Borrower’s Acceptable Receivables by invoice or a summary
aging by account debtor, as specified by the Bank,






 




(c)

a detailed accounts
payable aging of the Borrower by invoice or a summary aging by
account creditor, as specified by the Bank, and






 





(d)

an inventory
listing, which must include a description of the inventory, its
location and cost, and such other information as the Bank may
require.





 

2.4 Repayment Terms.

 



(a) 

The Borrower will
pay interest on July 1, 2020, and then on the same day of each
month thereafter until payment in full of all principal outstanding
under this facility. The amount of each interest payment shall be
the amount of accrued interest on the Line of Credit as of the
interest payment date or such earlier accrual date as indicated on
the billing statement for such interest payment.





 



(b) 

The Borrower will
repay in full all principal, interest or other charges outstanding
under this Agreement no later than the Expiration
Date.





 



(c) 

The Borrower may
prepay the Line of Credit in full or in part at any time. The
prepayment will be applied to the most remote payment of principal
due under this Agreement.





 




2.5

Interest Rate.





 



 (a) 

The interest rate
is a rate per year equal to the sum of (i) the greater of the LIBOR
Daily Floating Rate or the Index Floor, plus (ii) one and a quarter
percentage point(s). For the purposes of this paragraph, "Index
Floor" means one percent.





 



 (b) 

The LIBOR Daily
Floating Rate is a fluctuating rate of interest which can change on
each banking day. The rate will be adjusted on each banking day to
equal the London Interbank Offered Rate (or a comparable or
successor rate which is approved by the Bank) for U.S. Dollar
deposits for delivery on the date in question for a one month term
beginning on that date. The Bank will use the London Interbank
Offered Rate as published by Bloomberg (or other commercially
available source providing quotations of such rate as selected by
the Bank from time to time) as determined at approximately 11:00
a.m. London time two (2) London Banking Days prior to the date in
question, as adjusted from time to time in the Bank’s sole
discretion for reserve requirements, deposit insurance assessment
rates and other regulatory costs. If such rate is not available at
such time for any reason, then the rate will be determined by such
alternate method as reasonably selected by the Bank. A "London
Banking Day" is a day on which banks in London are open for
business and dealing in offshore dollars. If at any time the LIBOR
Daily Floating Rate is less than zero, such rate shall be deemed to
be zero for the purposes of this Agreement.






 






 

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2.6

Letters of Credit.





 



(a) 

As a subfacility
under the Line of Credit, during the availability period, the Bank
agrees from time to time to issue or cause an affiliate to issue
commercial and standby letters of credit for the account of the
Borrower (each a "Letter of Credit," and collectively "Letters of
Credit"); provided however, that the aggregate drawn and undrawn
amount of all outstanding Letters of Credit shall not at any time
exceed Five Million Dollars ($5,000,000). The form and substance of
each Letter of Credit shall be subject to approval by the Bank, in
its sole discretion. Each Letter of Credit shall be issued for a
term, as designated by the Borrower; provided however, that no
Letter of Credit shall have an expiration date subsequent to the
Expiration Date unless approved by the Bank.  The undrawn amount
of all Letters of Credit shall be reserved under the Line of Credit
and such amount shall not be available for borrowings. Each Letter
of Credit shall be subject to the additional terms and conditions
of the Letter of Credit agreements, applications and any related
documents required by the Bank in connection with the issuance of
Letters of Credit. At the option of the Bank, any drawing paid
under a Letter of Credit may be deemed an advance under the Line of
Credit and shall be repaid by the Borrower in accordance with the
terms and conditions of this Agreement applicable to such advances;
provided however, that if advances under the Line of Credit are not
available, for any reason, at the time any drawing is paid, then
the Borrower shall immediately pay to the Bank the full amount
drawn, together with interest from the date such drawing is paid to
the date such amount is fully repaid by the Borrower, at the rate
of interest applicable to advances under the Line of Credit. In
such event the Borrower agrees that the Bank, in its sole
discretion, may debit any account maintained by the Borrower with
the Bank for the amount of any such drawing. The Borrower agrees to
deposit in a cash collateral account with the Bank an amount equal
to the aggregate outstanding undrawn face amount of all letters of
credit which remain outstanding on the Expiration Date. The
Borrower grants a security interest in such cash collateral account
to the Bank. Amounts held in such cash collateral account shall be
applied by the Bank to the payment of drafts drawn under such
letters of credit and to the obligations and liabilities of the
Borrower to the Bank, in such order of application as the Bank may
in its sole discretion elect.





 



(b) 

The Borrower shall
pay the Bank a non-refundable fee equal to 2.0% per annum of the
outstanding undrawn amount of each standby letter of credit,
payable in advance,
calculated on the basis of the face amount outstanding on the day
the fee is calculated.  If there is a default under
this Agreement, at the Bank's option, the amount of the fee shall
be increased to 4.0%
per annum, effective starting on the day the Bank provides notice
of the increase to the
Borrower.





 




2.7

Increase in Line of
Credit.





 



(a) 

Provided there
exists no Default, upon notice to the Bank, the Borrower may on a
one-time basis, request an increase in the Line of Credit by an
amount not exceeding $5,000,000 (an “Incremental
Facility”); provided that any such request for an Incremental
Facility shall be in a minimum amount of $1,000,000. Any such
request for an Incremental Facility will be subject to the
Bank’s approval, which may be withheld at the Bank’s
sole discretion.





 



(b) 

If the Line of
Credit is increased in accordance with this Section 2.7, the Bank and the
Borrower shall determine the effective date of such increase (the
“Line of Credit
Increase Effective Date”). As a condition precedent to
such increase, the Borrower shall deliver to the Bank a certificate
of the Borrower and each Related Party date as of the Line of
Credit Increase Effective Date (i) certifying and attaching
the resolutions adopted by such party approving or consenting to
such increase, and (ii) in the case of the Borrower,
certifying that, before and after giving effect to such increase,
(A) the representations and warranties contained in this
Agreement and the other Loan Documents are true and correct, on and
as of the Line of Credit Increase Effective Date, and (B) both
before and after giving effect to the Incremental Facility, no
Default exists. The Borrower shall deliver or cause to be delivered
any other customary documents (including, without limitation, legal
opinions) as reasonably requested by the Bank in connection with
any Incremental Facility.






 






 

5







 





 






(c) 

Except as otherwise
specifically set forth herein, all of the other terms and
conditions applicable to such Incremental Facility shall be
identical to the terms and conditions applicable to the Line of
Credit.





 




2.8

Term Option.





 



(a) 

Provided there
exists no Default, upon notice to the Bank, on a one-time basis,
Borrower may elect to convert up to $5,000,000 of the then
outstanding principal of the Line of Credit to a term facility (the
“Term Facility”) with an assumed amortization of
fifteen (15) years and the same interest rate as the Line of Credit
(the “Term Option”).





 



(b) 

Upon exercise of
the Term Option, the Bank will determine the amount of the monthly
payments that will be necessary to repay the unpaid principal of
the Term Facility over an assumed amortization period of fifteen
(15) years. The Borrower shall make monthly payments of the
principal and accrued interest due on the Term Facility beginning
on the first monthly payment date following the effective date of
the Term Option and continuing on each monthly payment date
thereafter until the last day of the Expiration Date, on which date
all remaining unpaid principal and accrued interest shall be due
and payable. For the avoidance of doubt, the Term Option will
mature on the same date as the Line of Credit, and all unpaid
principal and accrued interest shall be due and payable at such
time.





 



(c) 

Except as otherwise
specifically set forth herein, all of the other terms and
conditions applicable to such Term Facility shall be identical to
the terms and conditions applicable to the Line of
Credit.





 




3.

COLLATERAL





 




3.1

Personal Property.





 


All
personal property and intangibles now owned or owned in the future
by Borrower or Guarantor will secure the Borrower’s
obligations to the Bank under this Agreement or, if the collateral
is owned by a Guarantor, will secure the guaranty, if so indicated
in the security agreement. The collateral is further defined in
security agreement(s) executed by the owners of the collateral.
Without limiting the generality of the foregoing, the Bank’s
security interest will include, without limitation, the
following:

 



(a)            

Equipment owned by
Borrower or any domestic Guarantor.





 



(b)            

Inventory owned by
Borrower or any domestic Guarantor.





 



(c)            

Receivables owned
by Borrower or any domestic Guarantor.





 




(d)

Securities or other
investment property owned by Borrower or Guarantors as described in
the Pledge Agreement required by the Bank.





 


Regulation U of the
Board of Governors of the Federal Reserve System places certain
restrictions on loans secured by margin stock (as defined in the
Regulation). The Bank and the Borrower shall comply with Regulation
U. If any of the collateral is margin stock, the Borrower shall
provide to the Bank a Form U-1 Purpose Statement.

 



(e) 

Time deposits with
the Bank and owned by Borrower or any domestic
Guarantor.





 



(f) 

Accounts owned by
Borrower or any domestic Guarantor.






 






 

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3.2

Real Property.





 



(a) 

The Borrower's
obligations to the Bank under this Agreement will be secured by a
negative pledge evidenced by the Non-encumbrance Agreement covering
the real property described therein.





 




4.

LOAN ADMINISTRATION
AND FEES





 




4.1

Fees.





 


The
Borrower will pay to the Bank the fees set forth on Schedule
A.

 




4.2

Collection of Payments; Payments
Generally.





 



(a) 

Regularly scheduled
interest and principal payments will be made by debit to a deposit
account, if direct debit is provided for in this Agreement or is
otherwise authorized by the Borrower. For regularly scheduled
interest and principal payments not made by direct debit and for
all other payments, such payments will be made by such other method
as may be permitted by the Bank.





 



(b) 

Each disbursement
by the Bank and each payment by the Borrower will be evidenced by
records kept by the Bank which will, absent manifest error, be
conclusively presumed to be correct and accurate and constitute an
account stated between the Borrower and the Bank.





 



(c) 

All payments to be
made by the Borrower shall be made free and clear of and without
condition or deduction for any counterclaim, defense, recoupment or
setoff.





 




4.3

Borrower’s
Instructions.





 


Subject
to the terms, conditions and procedures stated elsewhere in this
Agreement, the Bank may honor instructions for advances or
repayments and any other instructions under this Agreement given by
the Borrower (if an individual), or by any one of the individuals
the Bank reasonably believes is authorized to sign loan agreements
on behalf of the Borrower, or any other individual(s) designated by
any one of such authorized signers (each an “Authorized
Individual”). The Bank may honor any such instructions made
by any one of the Authorized Individuals, whether such instructions
are given in writing or by telephone, telefax or Internet and
intranet websites designated by the Bank with respect to separate
products or services offered by the Bank.

 




4.4

Direct Debit.





 



(a) 

The Borrower agrees
that on the due date of any amount due under this Agreement, the
Bank will debit the amount due from deposit account number
4451408189 101 owned by Borrower, or such other of the
Borrower’s accounts with the Bank as designated in writing by
the Borrower (the "Designated Account"). Should there be
insufficient funds in the Designated Account to pay all such sums
when due, the full amount of such deficiency shall be immediately
due and payable by the Borrower.





 




4.5

Banking Days.





 


Unless
otherwise provided in this Agreement, a banking day is a day other
than a Saturday, Sunday or other day on which commercial banks are
authorized to close, or are in fact closed, in the state where the
Bank's lending office is located, and, if such day relates to
amounts bearing interest at an offshore rate (if any), means any
such day on which dealings in dollar deposits are conducted among
banks in the offshore dollar interbank market. All payments and
disbursements which would be due or which are received on a day
which is not a banking day will be due or applied, as applicable,
on the next banking day.


 






 

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4.6

Additional Costs.





 


The
Borrower will pay the Bank, on demand, for the Bank's costs or
losses arising from any Change in Law which are allocated to this
Agreement or any credit outstanding under this Agreement.  The
allocation will be made as determined by the Bank, using any
reasonable method.  The costs include, without limitation, the
following:

 



(a) 

any reserve or
deposit requirements (excluding any reserve requirement already
reflected in the calculation of the interest rate in this
Agreement); and





 



(b) 

any capital
requirements relating to the Bank's assets and commitments for
credit.





 


“Change
in Law” means the occurrence, after the date of this
Agreement, of the adoption or taking effect of any new or changed
law, rule, regulation or treaty, or the issuance of any request,
rule, guideline or directive (whether or not having the force of
law) by any governmental authority; provided that (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, guidelines or directives issued in connection with
that Act, and (y) all requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor authority) or
the United States regulatory authorities, in each case pursuant to
Basel III, shall in each case be deemed to be a “Change in
Law,” regardless of the date enacted, adopted or
issued.

 




4.7

Interest
Calculation.





 


Except
as otherwise stated in this Agreement, all interest and fees, if
any, will be computed on the basis of a 360-day year and the actual
number of days elapsed. This results in more interest or a higher
fee than if a 365-day year is used. Installments of principal which
are not paid when due under this Agreement shall continue to bear
interest until paid. To the extent that any calculation of interest
or any fee required to be paid under this Agreement shall be less
than zero, such rate shall be deemed zero for purposes of this
Agreement.

 




4.8

Interest Apportionment and
Allocation.





 


The
amount of each year's interest on the loan will, as it accrues, be
apportioned among calendar months on the basis of a year consisting
of 12 thirty-day months. Each payment will be applied first to
accrued but unpaid interest (for the applicable accrual period)
then to principal. The early or late date of making a monthly
payment will be disregarded for purposes of allocating the payment
between principal and interest. For this purpose, the payment will
be treated as though made on the due date.

 




4.9

Default Rate.





 


Upon
the occurrence of any default or after maturity or after judgment
has been rendered on any obligation under this Agreement, all
amounts outstanding under this Agreement, including any unpaid
interest, fees, or costs, will at the option of the Bank bear
interest at a rate which is 4.0 percentage point(s) higher than the
rate of interest otherwise provided under this Agreement. This may
result in compounding of interest. This will not constitute a
waiver of any default.


 






 

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4.10

Taxes.





 


If any
payments to the Bank under this Agreement are made from outside the
United States, the Borrower will not deduct any foreign taxes from
any payments it makes to the Bank. If any such taxes are imposed on
any payments made by the Borrower (including payments under this
paragraph), the Borrower will pay the taxes and will also pay to
the Bank, at the time interest is paid, any additional amount which
the Bank specifies as necessary to preserve the after-tax yield the
Bank would have received if such taxes had not been imposed. The
Borrower will confirm that it has paid the taxes by giving the Bank
official tax receipts (or notarized copies) within thirty (30) days
after the due date.

 




4.11

Overdrafts.





 


At the
Bank's sole option in each instance, the Bank may do one of the
following:

 



(a) 

The Bank may make
advances under this Agreement to prevent or cover an overdraft on
any account of the Borrower with the Bank. Each such advance will
accrue interest from the date of the advance or the date on which
the account is overdrawn, whichever occurs first, at the interest
rate described in this Agreement. The Bank may make such advances
even if the advances may cause any credit limit under this
Agreement to be exceeded.





 



(b) 

The Bank may reduce
the amount of credit otherwise available under this Agreement by
the amount of any overdraft on any account of the Borrower with the
Bank.





 


This
paragraph shall not be deemed to authorize the Borrower to create
overdrafts on any of the Borrower's accounts with the
Bank.

 




4.12

Payments in Kind.





 


If the
Bank requires delivery in kind of the proceeds of collection of the
Borrower's accounts receivable, such proceeds shall be credited to
interest, principal, and other sums owed to the Bank under this
Agreement in the order and proportion determined by the Bank in its
sole discretion. All such credits will be conditioned upon
collection and any returned items may, at the Bank's option, be
charged to the Borrower.

 




5.

CONDITIONS





 


Before
the Bank is required to extend any credit to the Borrower under
this Agreement, it must receive any documents and other items it
may reasonably require, in form and content acceptable to the Bank,
including any items specifically listed below.

 




5.1

Authorizations.





 


If the
Borrower or any other Obligor is anything other than a natural
person, evidence that the execution, delivery and performance by
the Borrower and/or such Obligor of this Agreement and any
instrument or agreement required under this Agreement have been
duly authorized.

 




5.2

Governing
Documents.





 


If
required by the Bank, a copy of the Borrower's organizational
documents.

 




5.3

KYC Information.





 




(a)

Upon the request of
the Bank, the Borrower shall have provided to the Bank, and the
Bank shall be reasonably satisfied with, the documentation and
other information so requested in connection with applicable
“know your customer” and anti-money-laundering rules
and regulations, including, without limitation, the PATRIOT
Act.






 



 

9







 






  







(b)

If the Borrower
qualifies as a “legal entity customer” under the
Beneficial Ownership Regulation, it shall have provided a
Beneficial Ownership Certification to the Bank if so
requested.





 




5.4

Guaranties.





 


Guaranties
signed by each existing direct and indirect domestic and, to the
extent no material adverse tax consequences would result, foreign
subsidiary of the Borrower.

 




5.5

Security
Agreements.





 


Signed
original security agreements covering the personal property
collateral which the Bank requires.

 




5.6

Perfection and Evidence of
Priority.





 


Evidence
that the security interests and liens in favor of the Bank are
valid, enforceable, properly perfected in a manner acceptable to
the Bank and prior to all others' rights and interests, except
those the Bank consents to in writing.

 




5.7

Payment of Fees.





 


Payment
of all fees, expenses and other amounts due and owing to the Bank.
If any fee is not paid in cash, the Bank may, in its discretion,
treat the fee as a principal advance under this Agreement or deduct
the fee from the loan proceeds.

 




5.8

Good Standing.





 


Certificates
of good standing for the Borrower from its state of formation and
from any other state in which the Borrower is required to qualify
to conduct its business.

 




5.9

Legal Opinion.





 


A
written opinion from the Borrower's legal counsel, covering such
matters as the Bank may require. The legal counsel and the terms of
the opinion must be acceptable to the Bank.

 




5.10

Insurance.





 


Evidence
of insurance coverage, as required in the "Covenants" section of
this Agreement.

 




5.11

Non-encumbrance
Agreement.





 


Signed
and acknowledged original non-encumbrance agreement, as required by
the Bank, creating a negative pledge against the Land.

 




5.12

Title Insurance.





 


A title
search report covering the Land subject to the Non-encumbrance
Agreement that is acceptable to the Bank in all
respects.

 




5.13

Other Required
Documentation.





 


A
Pledge Agreement executed by Borrower pledging 65% of the ownership
of each of Borrower’s foreign subsidiaries.


 






 

10







 





 







6.

REPRESENTATIONS AND
WARRANTIES





 


When
the Borrower signs this Agreement, and until the Bank is repaid in
full, the Borrower makes the following representations and
warranties. Each request for an extension of credit constitutes a
renewal of these representations and warranties as of the date of
the request:

 




6.1

Formation.





 


If the
Borrower is anything other than a natural person, it is duly formed
and existing under the laws of the state or other jurisdiction
where organized.

 




6.2

Authorization.





 


This
Agreement, and any instrument or agreement required under this
Agreement, are within the Borrower's powers, have been duly
authorized, and do not conflict with any of its organizational
papers.

 




6.3

Beneficial Ownership
Certification.





 


The
information included in the Beneficial Ownership Certification most
recently provided to the Bank, if applicable, is true and correct
in all respects.

 




6.4

Good Standing.





 


In each
state in which the Borrower does business and where required, it is
properly licensed, in good standing, and in compliance with
fictitious name (e.g. trade name or d/b/a) statutes.

 




6.5

Government
Sanctions.





 



(a) 

The Borrower
represents that no Obligor, nor any affiliated entities of any
Obligor, including in the case of any Obligor that is not a natural
person, subsidiaries nor, to the knowledge of the Borrower, any
owner, trustee, director, officer, employee, agent, affiliate or
representative of the Borrower or any other Obligor is an
individual or entity (“Person”) currently the subject
of any sanctions administered or enforced by the United States
Government, including, without limitation, the U.S. Department of
Treasury’s Office of Foreign Assets Control, the United
Nations Security Council, the European Union, Her Majesty’s
Treasury, or other relevant sanctions authority (collectively,
“Sanctions”), nor is the Borrower or any other Obligor
located, organized or resident in a country or territory that is
the subject of Sanctions.





 



(b) 

The Borrower
represents and covenants that it will not, directly or indirectly,
use the proceeds of the credit provided under this Agreement, or
lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other Person, to fund any
activities of or business with any Person, or in any country or
territory, that, at the time of such funding, is the subject of
Sanctions, or in any other manner that will result in a violation
by any Person (including any Person participating in the
transaction, whether as underwriter, advisor, investor or
otherwise) of Sanctions.





 




6.6

Financial
Information.





 


All
financial and other information that has been or will be supplied
to the Bank is sufficiently complete to give the Bank accurate
knowledge of the Borrower's (and any other Obligor's) financial
condition, including all material contingent liabilities. Since the
date of the most recent financial statement provided to the Bank,
there has been no material adverse change in the business condition
(financial or otherwise), operations, properties or prospects of
the Borrower (or any other Obligor). If the Borrower is comprised
of the trustees of a trust, the above representations shall also
pertain to the trustor(s) of the trust.


 






 

11







 





 







6.7

Lawsuits.





 


There
is no lawsuit, tax claim or other dispute pending or threatened
against the Borrower or any other Obligor which, if lost, would
impair the Borrower's or such Obligor’s financial condition
or ability to repay its obligations as contemplated by this
Agreement or any other agreement contemplated hereby, except as
have been disclosed in writing to the Bank prior to the date of
this Agreement.

 




6.8

Other Obligations.





 


The
Borrower and each Related Party is not in default on any obligation
for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation,
except as have been disclosed in writing to the Bank prior to the
date of this Agreement.

 




6.9

Tax Matters.





 


The
Borrower has no knowledge of any pending assessments or adjustments
of income tax for itself or for any Related Party for any year and
all taxes due have been paid, except as have been disclosed in
writing to the Bank prior to the date of this
Agreement.

 




6.10

PACE Financing.





 


The
Borrower has not entered into any Property Assessed Clean Energy
(“PACE”) or similar energy efficiency or renewable
energy financing and has no knowledge of any pending assessments or
adjustments in connection therewith.

 




6.11

Collateral.





 


All
collateral required in this Agreement is owned by the grantor of
the security interest free of any title defects or any liens or
interests of others, except those which have been approved by the
Bank in writing.

 




6.12

No Event of
Default.





 


There
is no event which is, or with notice or lapse of time or both would
be, a default under this Agreement.

 




6.13

ERISA Plans.





 



(a) 

Each Plan (other
than a multiemployer plan) is in compliance in all material
respects with ERISA, the Code and other federal or state law,
including all applicable minimum funding standards and there have
been no prohibited transactions with respect to any Plan (other
than a multiemployer plan), which has resulted or could reasonably
be expected to result in a material adverse effect.





 



(b) 

With respect to any
Plan subject to Title IV of ERISA:





 



(i) 

No reportable event
has occurred under Section 4043(c) of ERISA which requires
notice.





 



(ii) 

No action by the
Borrower or any ERISA Affiliate to terminate or withdraw from any
Plan has been taken and no notice of intent to terminate a Plan has
been filed under Section 4041 or 4042 of ERISA.





 



(c) 

The following terms
have the meanings indicated for purposes of this
Agreement:





 



(i) 

"Code" means the
Internal Revenue Code of 1986, as amended.





 


 



 

12







 





 






(ii) 

"ERISA" means the
Employee Retirement Income Security Act of 1974, as
amended.





 



(iii) 

"ERISA Affiliate"
means any trade or business (whether or not incorporated) under
common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code.





 



(iv) 

"Plan" means a plan
within the meaning of Section 3(2) of ERISA maintained or
contributed to by the Borrower or any ERISA Affiliate, including
any multiemployer plan within the meaning of Section 4001(a)(3) of
ERISA.





 




6.14

No Plan Assets.





 


The
Borrower represents that, as of the date hereof and throughout
the term of this Agreement, no Borrower or Guarantor, if any, is
(1) an employee benefit plan subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended
(“ERISA”), (2) a plan or account subject to Section
4975 of the Internal Revenue Code of 1986 (the “Code”);
(3) an entity deemed to hold “plan assets” of any such
plans or accounts for purposes of ERISA or the Code; or (4) a
“governmental plan” within the meaning of
ERISA.

 




6.15

Enforceable
Agreement.





 


This
Agreement is a legal, valid and binding agreement of the Borrower,
enforceable against the Borrower in accordance with its terms, and
any instrument or agreement required under this Agreement, when
executed and delivered, will be similarly legal, valid, binding and
enforceable.

 




6.16

No Conflicts.





 


This
Agreement does not conflict with any law, agreement, or obligation
by which the Borrower or any other Obligor is bound.

 




6.17

Permits,
Franchises.





 



 Each Related Party possesses all permits, memberships,
franchises, contracts and licenses required and all trademark
rights, trade name rights, patent rights, copyrights, and
fictitious name rights necessary to enable it to conduct the
business in which it is now engaged.

 




6.18

Insurance.





 


The
Borrower and each Related Party has obtained, and maintained in
effect, the insurance coverage required in the "Covenants" section
of this Agreement.

 




6.19

Merchantable Inventory; Compliance
with FSLA.





 


All
inventory which is included in the Borrowing Base is of good and
merchantable quality and free from defects, and has been produced
in compliance with the requirements of the U.S. Fair Labor
Standards Act (29 U.S.C. §§201 et seq.)

 




7.

COVENANTS





 


The
Borrower agrees, so long as credit is available under this
Agreement and until the Bank is repaid in full, the Borrower shall,
and shall cause each Related Party:

 




7.1

Use of Proceeds.





 


To use
the proceeds of the credit extended under this Agreement only for
business purposes.


 






 

13







 






 




7.2

Financial
Information.





 


To
provide the following financial information and statements in form
and content acceptable to the Bank, and such additional information
as requested by the Bank from time to time The Bank reserves the
right, upon written notice to the Borrower, to require the Borrower
to deliver financial information and statements to the Bank more
frequently than otherwise provided below, and to use such
additional information and statements to measure any applicable
financial covenants in this Agreement.

 



(a) 

Within 120 days of
the fiscal year, copies of the Form 10-K Annual Report of Borrower
for the immediately preceding fiscal year.





 



(b) 

Within 45 days
after each fiscal quarter, a copy of the Form 10-Q Quarterly Report
for the immediately preceding fiscal quarter.





 



(c) 

Within 120 days of
the end of each fiscal year, a compliance certificate of the
Borrower, signed by an authorized financial officer and setting
forth (i) the information and computations (in sufficient detail)
to establish compliance with all financial covenants at the end of
the period covered by the financial statements then being furnished
and (ii) whether there existed as of the date of such financial
statements and whether there exists as of the date of the
certificate, any default under this Agreement applicable to the
party submitting the information and, if any such default exists,
specifying the nature thereof and the action the party is taking
and proposes to take with respect thereto.






 



 (d) 

Within 45 days of
the end of each quarter (including the last period in each fiscal
year), a compliance
certificate of the Borrower, signed by an authorized financial
officer and setting forth (i) the information and computations (in
sufficient detail) to establish compliance with all financial
covenants at the end of the period covered by the financial
statements then being furnished and (ii) whether there existed as
of the date of such financial statements and whether there exists
as of the date of the certificate, any default under this Agreement
applicable to the party submitting the information and, if any such
default exists, specifying the nature thereof and the action the
party is taking and proposes to take with respect
thereto.





 



(e) 

A borrowing base
certificate setting forth the amount of Acceptable Receivables and
Acceptable Inventory as of the last day of each fiscal quarter
within 30 days after the period end and, upon the Bank's request,
copies of the invoices or the record of invoices from the
Borrower's sales journal for such Acceptable Receivables, copies of
the delivery receipts, purchase orders, shipping instructions,
bills of lading and other documentation pertaining to such
Acceptable Receivables, and copies of the cash receipts journal
pertaining to the borrowing base certificate. The borrowing base
certificate will be required only when the Funded Debt to EBITDA
ratio exceeds 2.0:1.0.





 



(f) 

A detailed
receivables aging of the Borrower by invoice or a summary aging by
account debtor, as specified by the Bank, within 30 days after the
end of each quarter. The foregoing report will be required only
when the Funded Debt to EBITDA ratio exceeds 2.0:1.0.





 



(g) 

A detailed accounts
payable aging of the Borrower by invoice or a summary aging by
account creditor, as specified by the Bank, within 30 days after
the end of each quarter. The foregoing report will be required only
when the Funded Debt to EBITDA ratio exceeds 2.0:1.0.





 



(h) 

An inventory
listing within 30 days after the end of each quarter. The listing
must include a description of the inventory, its location and cost,
and such other information as the Bank may require. The foregoing
report will be required only when the Funded Debt to EBITDA ratio
exceeds 2.0:1.0.






 






 

14







 






 




7.3

Funded Debt to EBITDA
Ratio.





 


To
maintain on a consolidated basis a ratio of Funded Debt to EBITDA
not exceeding 3.0:1.0.

 


“Funded
Debt” means all outstanding liabilities for borrowed money
and other interest-bearing liabilities, including current and long
term debt, less the non-current portion of Subordinated
Liabilities; provided that for the avoidance of doubt,
“Funded Debt” shall not include operating lease
liabilities.

 


“EBITDA"
means net income, less income or plus loss from discontinued
operations (including unusual and infrequent items, agreed to at
the sole discretion of the Bank), plus income taxes, plus interest
expense, plus depreciation, depletion, and amortization. This ratio
will be calculated at the end of each reporting period for which
the Bank requires financial statements, using the results of the
twelve-month period ending with that reporting period.

 


“Subordinated
Liabilities” means liabilities subordinated to the
Borrower’s obligations to the Bank in a manner acceptable to
the Bank in its sole discretion.

 




7.4

Basic Fixed Charge Coverage
Ratio.





 


To
maintain on a consolidated basis a Basic Fixed Charge Coverage
Ratio of at least 1.15:1.0.

 


"Basic
Fixed Charge Coverage Ratio" means the ratio of (a) the sum of
EBITDA plus lease expense and rent expense minus non-financed
capital expenditures to (b) the sum of lease expense and rent
expense, taxes, interest expense, scheduled principal payments and
dividends and distributions.

 


"EBITDA"
means net income, less income or plus loss from discontinued
operations (including unusual and infrequent items, agreed to at
the sole discretion of the Bank), plus income taxes, plus interest
expense, plus depreciation, depletion, and amortization and other
non-cash charges.

 


This
ratio will be calculated at the end of each reporting period for
which the Bank requires financial statements, using the results of
the twelve-month period ending with that reporting
period.

 




7.5

Bank as Principal
Depository.





 


To
maintain the Bank or one of its affiliates as its principal
depository bank, including for the maintenance of business, cash
management, operating and administrative deposit
accounts.

 




7.6

Other Debts.





 


Not to
have outstanding or incur any direct or contingent liabilities or
lease obligations (other than those to the Bank or to any affiliate
of the Bank), or become liable for the liabilities of others,
without the Bank's written consent. This does not
prohibit:

 



(a) 

Acquiring goods,
supplies, or merchandise on normal trade credit.





 



(b) 

Liabilities, lines
of credit and leases in existence on the date of this Agreement
disclosed in writing to the Bank in the Borrower's most recent
financial statement.





 



(c) 

Leases of real
estate in the ordinary course of business.





 




7.7

Other Liens.






 






 

15







 






 


Not to
create, assume, or allow any security interest or lien (including
judicial liens) on property the Borrower and each Related Party now
or later owns without the Bank's written consent. This does not
prohibit:

 



(a) 

Liens and security
interests in favor of the Bank or any affiliate of the
Bank.





 



(b) 

Liens for taxes not
yet due.





 



(c) 

Liens outstanding
on the date of this Agreement disclosed in writing to the
Bank.





 




7.8

Maintenance of
Assets.





 



(a) 

Not to sell,
assign, lease, transfer or otherwise dispose of any part of any
Related Party’s business or any Related Party’s assets
except inventory sold in the ordinary course of such Related
Party’s business.





 



(b) 

Not to sell,
assign, lease, transfer or otherwise dispose of any assets for less
than fair market value, or enter into any agreement to do
so.





 



(c) 

Not to enter into
any sale and leaseback agreement covering any of its fixed
assets.





 



(d) 

To maintain and
preserve all rights, privileges, and franchises the
Borrower or any Related
Party now has.





 



(e) 

To make any
repairs, renewals, or replacements to keep the
Borrower's and each Related
Party’s properties in good working condition.





 



 

16







 






 




7.9

Investments.





 


Not to
have any existing, or make any new, investments in any individual
or entity, or make any capital contributions or other transfers of
assets to any individual or entity, except for:

 



(a) 

Existing
investments disclosed to the Bank in writing prior to the date of
this Agreement.





 



(b) 

Investments in any
of the following:





 



(i) 

certificates of
deposit;





 



(ii) 

U.S. treasury bills
and other obligations of the federal government;





 



(iii) 

readily marketable
securities (including commercial paper, but excluding restricted
stock and stock subject to the provisions of Rule 144 of the
Securities and Exchange Commission);





 



(iv) 

stock of
subsidiaries.





 




7.10

Loans.





 


Not to
make any loans, advances or other extensions of credit to any
individual or entity, except for:

 



(a) 

Existing extensions
of credit disclosed to the Bank in writing prior to the date of
this Agreement.





 



(b) 

Extensions of
credit to each Related Party’s current subsidiaries or
affiliates.





 



(c) 

Extensions of
credit in the nature of accounts receivable or notes receivable
arising from the sale or lease of goods or services in the ordinary
course of business to non-affiliated entities.






 






 

17







 






 




7.11

Change of
Management.





 


Not to
make any substantial change in the present executive or management
personnel of the Borrower.

 




7.12

Change of
Ownership.





 



 Not to cause, permit, or suffer any change in capital
ownership such that there is a material change, as determined by
the Bank in its sole discretion in the direct or indirect capital
ownership of the Borrower.

 




7.13

Additional Negative
Covenants.





 


Not to,
without the Bank's written consent:

 



(a) 

Enter into any
consolidation, merger, or other combination, or become a partner in
a partnership, a member of a joint venture, or a member of a
limited liability company.





 



(b) 

Acquire or purchase
a business or its assets.





 



(c) 

Engage in any
business activities substantially different from the Borrower's
present business.





 



(d) 

Liquidate or
dissolve any Obligor’s business.





 



(e) 

Apply for or accept
any PACE or similar energy efficiency or renewable energy
financing.





 



(f) 

With respect to any
Obligor which is a business entity, adopt a plan of division or
divide itself into two or more business entities (pursuant to a
“plan of division” under Section 18-217 of the Delaware
Limited Liability Company Act or a similar arrangement under any
other applicable state statute).





 



 (g) 

Voluntarily suspend
its business for more than thirty (30) days in any one hundred
eighty (180) day period.





 




7.14

Notices to Bank.





 


To
promptly notify the Bank in writing of:

 



(a) 

Any event of
default under this Agreement, or any event which, with notice or
lapse of time or both, would constitute an event of
default.





 



(b) 

Any change in any
Obligor’s name, legal structure, principal residence, or name
on any driver’s license or special identification card issued
by any state (for an individual), state of registration (for a
registered entity), place of business, or chief executive office if
the Obligor has more than one place of business.





 



(c) 

Any lawsuit in
which the claim for damages exceeds Two Hundred Fifty Thousand
Dollars ($250,000) against the Borrower or any other
Obligor.





 



(d) 

Any actual or
potential contingent liabilities.





 




7.15

Insurance.





 



(a) 

General Business Insurance. To
maintain insurance policies attached hereto as Schedule B or such
other policies acceptable to Bank covering property damage
(including loss of use and occupancy) to any of the Obligor’s
properties, business interruption insurance, public liability
insurance including coverage for contractual liability, product
liability and workers' compensation, and any other insurance which
is usual for such Obligor’s business. Each policy shall
include a cancellation clause in favor of the Bank.






 






 

18







 





 






 (b) 

Insurance Covering Collateral.
To maintain all risk property damage insurance policies (including
without limitation windstorm coverage, flood coverage, and
hurricane coverage as applicable) covering the tangible property
comprising the collateral. The insurance must be consistent with
the policies attached hereto as Schedule B or otherwise acceptable
to Bank.





 



(c) 

Evidence of Insurance. Upon the
request of the Bank, to deliver to the Bank a copy of each
insurance policy, or, if permitted by the Bank, a certificate of
insurance listing all insurance in force.





 


Unless
the Borrower provides the Bank with satisfactory evidence of the
insurance coverage required hereby, the Bank may purchase insurance
at the Borrower’s expense to protect the Bank’s
interest in the collateral. This insurance may, but need not,
protect the interests of the Borrower. The coverage that the Bank
purchases may not pay any claim that the Borrower makes or any
claim that is made against the Borrower in connection with the
collateral. The Borrower may later cancel any insurance purchased
by the Bank, but only after providing the Bank with satisfactory
evidence that the Borrower has obtained insurance as required
hereby. If the Bank purchases insurance of the collateral, the
Borrower will be responsible for the costs of that insurance,
including interest thereon at the Default Rate and any other
charges which the Bank may impose in connection with the placement
of the insurance until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be
added to the outstanding principal balance of the advances, shall
bear interest at the Default Rate as provided above, and shall be
payable upon demand. The costs of the insurance may be more than
the cost of insurance the Borrower may be able to obtain on its
own.

 




7.16


Compliance with Laws.





 


To
comply with the requirements of all laws and all orders, writs,
injunctions and decrees applicable to it or to its business or
property, except in such instances in which (a) such requirement of
law or order, writ, injunction or decree is being contested in good
faith by appropriate proceedings diligently conducted; or (b) the
failure to comply therewith could not reasonably be expected to
cause a material adverse change in any Obligor's business condition
(financial or otherwise), operations or properties, or ability to
repay the credit, or, in the case of the Controlled Substances Act,
result in the forfeiture of any material property of any
Obligor.

 




7.17

Books and Records.





 


To
maintain adequate books and records including complete
and accurate records regarding all Collateral.

 




7.18

Audits.





 


To
allow the Bank and its agents to inspect the Borrower's properties
and examine, audit, and make copies of books and records at any
time; provided such audits will be limited to one (1) in each
calendar year, unless a Default has occurred. If any of the
Borrower's properties, books or records are in the possession of a
third party, the Borrower authorizes that third party to permit the
Bank or its agents to have access to perform inspections or audits
and to respond to the Bank's requests for information concerning
such properties, books and records.

 




7.19

Perfection of
Liens.





 


To help
the Bank perfect and protect its security interests and liens, and
reimburse it for related costs it incurs to protect its security
interests and liens.


 






 

19







 





 







7.20

Cooperation.





 


To take
any action reasonably requested by the Bank to carry out the intent
of this Agreement.

 




7.21

Patriot Act; Beneficial Ownership
Regulation.





 



Promptly following any request therefor, to provide
information and documentation reasonably requested by the Bank for
purposes of compliance with applicable “know your
customer” and anti-money-laundering rules and regulations,
including, without limitation, the PATRIOT Act and the Beneficial
Ownership Regulation.

 




7.22

Subsidiary Guaranties and
Collateral.





 



(a) 

Guarantors. The Borrower will
cause each of its domestic subsidiaries and, to the extent no
material adverse tax consequences would result, foreign
subsidiaries, whether newly formed, after acquired or otherwise
existing to promptly (and in any event within thirty (30) days
after such subsidiary is formed or acquired (or such longer period
of time as agreed to by the Bank in its reasonable discretion))
become a Guarantor hereunder by way of execution of a Guaranty, in
form and substance satisfactory to the Bank. In connection
therewith, the Borrower shall give notice to the Bank not less than
ten (10) days prior to creating a subsidiary (or such shorter
period of time as agreed to by the Bank in its reasonable
discretion), or acquiring the equity interests of any other person.
In connection with the foregoing, the Borrower shall deliver to the
Bank, with respect to each new Guarantor, such other documents and
agreements as reasonably required by the Bank, including, without
limitation, resolutions, organizational documents and incumbency
certificates with respect to such new Guarantor.






 



(b) 

[Intentionally
Omitted].






 



(c) 

Further Assurances. At any time
upon request of the Bank, promptly execute and deliver any and all
further instruments and documents and take all such other action as
the Bank may deem necessary or desirable to maintain in favor of
the Bank, liens and insurance rights on the collateral required to
be delivered hereby that are duly perfected in accordance with the
requirements hereof, all other documents executed in connection
herewith and all applicable laws.








8.

HAZARDOUS
SUBSTANCES





 




8.1

Indemnity Regarding Hazardous
Substances.





 


The
Borrower will indemnify and hold harmless the Bank from any loss or
liability the Bank incurs in connection with or as a result of this
Agreement, which directly or indirectly arises out of the use,
generation, manufacture, production, storage, release, threatened
release, discharge, disposal or presence of a hazardous substance.
This indemnity will apply whether the hazardous substance is on,
under or about the Borrower's property or operations or property
leased to the Borrower. The indemnity includes but is not limited
to attorneys' fees (including the reasonable estimate of the
allocated cost of in-house counsel and staff). The indemnity
extends to the Bank, its parent, subsidiaries and all of their
directors, officers, employees, agents, successors, attorneys and
assigns.

 




8.2

Compliance Regarding Hazardous
Substances.





 


The
Borrower represents and warrants that the Borrower has complied
with all current and future laws, regulations and ordinances or
other requirements of any governmental authority relating to or
imposing liability or standards of conduct concerning protection of
health or the environment or hazardous substances.


 






 

20







 





 







8.3

Notices Regarding Hazardous
Substances.





 


Until
full repayment of the loan, the Borrower will promptly notify the
Bank in writing of any threatened or pending investigation of the
Borrower or its operations by any governmental agency under any
current or future law, regulation or ordinance pertaining to any
hazardous substance.

 




8.4

Site Visits, Observations and
Testing.





 


The
Bank and its agents and representatives will have the right at any
reasonable time, after giving reasonable notice to the Borrower, to
enter and visit any locations where the collateral securing this
Agreement (the “Collateral”) is located for the
purposes of observing the Collateral, taking and removing
environmental samples, and conducting tests. The Borrower shall
reimburse the Bank on demand for the costs of any such
environmental investigation and testing. The Bank will make
reasonable efforts during any site visit, observation or testing
conducted pursuant to this paragraph to avoid interfering with the
Borrower’s use of the Collateral. The Bank is under no duty
to observe the Collateral or to conduct tests, and any such acts by
the Bank will be solely for the purposes of protecting the Bank's
security and preserving the Bank's rights under this Agreement. No
site visit, observation or testing or any report or findings made
as a result thereof (“Environmental Report”) (i) will
result in a waiver of any default of the Borrower; (ii) impose any
liability on the Bank; or (iii) be a representation or warranty of
any kind regarding the Collateral (including its condition or value
or compliance with any laws) or the Environmental Report (including
its accuracy or completeness). In the event the Bank has a duty or
obligation under applicable laws, regulations or other requirements
to disclose an Environmental Report to the Borrower or any other
party, the Borrower authorizes the Bank to make such a disclosure.
The Bank may also disclose an Environmental Report to any
regulatory authority, and to any other parties as necessary or
appropriate in the Bank’s judgment. The Borrower further
understands and agrees that any Environmental Report or other
information regarding a site visit, observation or testing that is
disclosed to the Borrower by the Bank or its agents and
representatives is to be evaluated (including any reporting or
other disclosure obligations of the Borrower) by the Borrower
without advice or assistance from the Bank.

 







8.5

Definition of Hazardous
Substances.





 


"Hazardous
substance" means any substance, material or waste that is or
becomes designated or regulated as "toxic," "hazardous,"
"pollutant," or "contaminant" or a similar designation or
regulation under any current or future federal, state or local law
(whether under common law, statute, regulation or otherwise) or
judicial or administrative interpretation of such, including
without limitation petroleum or natural gas.

 




8.6

Continuing
Obligation.





 


The
Borrower's obligations to the Bank under this Article, except the
obligation to give notices to the Bank, shall survive termination
of this Agreement and repayment of the Borrower's obligations to
the Bank under this Agreement.

 




9.

DEFAULT AND
REMEDIES





 


If any
of the following events of default occurs, the Bank may do one or
more of the following without prior notice except as required by
law or expressly agreed in writing by Bank: declare the Borrower in
default, stop making any additional credit available to the
Borrower, and require the Borrower to repay its entire debt
immediately. If an event which, with notice or the passage of time,
will constitute an event of default has occurred and is continuing,
the Bank has no obligation to make advances or extend additional
credit under this Agreement. In addition, if any event of default
occurs, the Bank shall have all rights, powers and remedies
available under any instruments and agreements required by or
executed in connection with this Agreement, as well as all rights
and remedies available at law or in equity. If an event of default
occurs under the paragraph entitled
“Bankruptcy/Receivers,” below with respect to any
Obligor, then the entire debt outstanding under this Agreement will
automatically be due immediately.


 






 

21







 





 







9.1

Failure to Pay.





 


The
Borrower fails to make a payment under this Agreement within ten
(10) days after the date when due.

 




9.2

Other Bank
Agreements.





 


(a)       
(i) Any default occurs under any other document executed or
delivered in connection with this Agreement, including without
limitation, any note, guaranty, subordination agreement, mortgage
or other collateral agreement, (ii) any Obligor purports to revoke
or disavow any guaranty or collateral agreement provided in
connection with this Agreement; (iii) any representation or
warranty made by any Obligor is false when made or deemed to be
made; or (iv) any default
occurs under any other agreement the Borrower (or any Obligor) or
any of the Borrower's related entities or affiliates has with the
Bank or any affiliate of the Bank.

 


(b)      
If, in the Bank's opinion, any breach under subparagraph (a)(iv)
above is capable of being remedied but the applicable document does
not provide a cure or remedy period, the breach will not be
considered an event of default under this Agreement for a period of
thirty (30) days after earlier of (x) the date that the Borrower
knew or should have known of the default, and (y) the date on which
the Bank gives written notice of the default to the
Borrower.

 




9.3

Cross-default.





 


Any
default occurs under any agreement in connection with any credit
any Obligor or any of the Borrower's related entities or affiliates
has obtained from anyone else or which any Obligor or any of the
Borrower's related entities or affiliates has
guaranteed.

 




9.4

False Information.





 


The
Borrower or any other Obligor has given the Bank false or
misleading information or representations.

 




9.5

Bankruptcy/Receivers.





 


Any
Obligor or any general partner of any Obligor files a bankruptcy
petition, a bankruptcy petition is filed against any of the
foregoing parties, or any Obligor, or any general partner of any
Obligor makes a general assignment for the benefit of creditors; or
a receiver or similar official is appointed for a substantial
portion of any Obligor's business; or the business is terminated,
or such Obligor is liquidated or dissolved.

 




9.6

Lien Priority.





 


The
Bank fails to have an enforceable first lien (except for any prior
liens to which the Bank has consented in writing) on or security
interest in any property given as security for this Agreement (or
any guaranty).

 




9.7

Judgments.





 


Any
material judgments or arbitration awards are entered against any
Obligor. Materiality will be determined in the Bank’s sole
discretion.


 






 

22







 





 







9.8

Death.





 


If any
Obligor is a natural person, such Obligor dies or becomes legally
incompetent; if any Obligor is a trust, a trustor dies or becomes
legally incompetent; if any Obligor is a partnership, any general
partner dies or becomes legally incompetent.

 




9.9

Material Adverse
Change.





 


A
material adverse change occurs, or is reasonably likely to occur,
in any Obligor's business condition (financial or otherwise),
operations or properties, or ability to repay its obligations as
contemplated hereunder or under any document executed in connection
with this Agreement.

 




9.10

[Intentionally
Omitted]





 




9.11

ERISA Plans.





 


A
reportable event occurs under Section 4043(c) of ERISA, or any Plan
termination (or commencement of proceedings to terminate a Plan) or
the full or partial withdrawal from a Plan under Section 4041 or
4042 of ERISA occurs; provided such event or events could
reasonably be expected, in the judgment of the Bank, to have a
material adverse effect.

 




9.12

Covenants.





 


Any
default in the performance of or compliance with any obligation,
agreement or other provision contained in this Agreement (other
than those specifically described as an event of default in this
Article) and with respect to any such default that by its nature
can be cured, such default shall continue for a period of thirty
(30) days from the earlier of (x) the date that the Borrower knew
or should have known of the default, and (y) the date on which the
Bank gives written notice of the default to the
Borrower.

 




9.13

Forfeiture.





 


A
judicial or nonjudicial forfeiture or seizure proceeding is
commenced by a government authority and remains pending with
respect to any property of Borrower or any part thereof, on the
grounds that the property or any part thereof had been used to
commit or facilitate the commission of a criminal offense by any
person, including any tenant, pursuant to any law, including under
the Controlled Substances Act or the Civil Asset Forfeiture Reform
Act, regardless of whether or not the property shall become subject
to forfeiture or seizure in connection therewith.

 




10.

ENFORCING THIS
AGREEMENT; MISCELLANEOUS





 




10.1

GAAP.





 


Except
as otherwise stated in this Agreement, all financial information
provided to the Bank and all financial covenants will be made under
generally accepted accounting principles, consistently
applied.

 


If at
any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth herein, and either the
Borrower or the Bank shall so request, the Borrower and the Bank
shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in
GAAP; provided that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (ii) the Borrower shall provide to
the Bank financial statements and other documents required under
this Agreement or as reasonably requested hereunder setting forth a
reconciliation between calculations of such ratio or requirement
made before and after giving effect to such change in
GAAP.


 






 

23







 





 







10.2

Governing 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 (the “Governing Law State”), 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.

 




10.3

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 Governing Law State. 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
Governing Law State. 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
Governing Law State. The Bank reserves the right to commence an
action or suit in any other jurisdiction where any Borrower, any
other Obligor, or any Collateral has any presence or is located.
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.

 




10.4

Successors and
Assigns.





 


This
Agreement is binding on the Borrower's and the Bank's successors
and assignees. The Borrower agrees that it may not assign this
Agreement without the Bank's prior consent. The Bank may sell
participations in or assign this loan and the related loan
documents, and may exchange information about the Borrower and any
other Obligor (including, without limitation, any information
regarding any hazardous substances) with actual or potential
participants or assignees. If a participation is sold or the loan
is assigned, the purchaser will have the right of set-off against
the Borrower.

 




10.5


Waiver of Jury Trial.





 



EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER DOCUMENT EXECUTED IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (b) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER DOCUMENTS CONTEMPLATED HEREBY BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION AND (c) CERTIFIES THAT THIS WAIVER IS KNOWINGLY, WILLINGLY
AND VOLUNTARILY MADE.

 




10.6

Waiver of Class
Actions.





 


The
terms “Claim” or “Claims” refer to any
disputes, controversies, claims, counterclaims, allegations of
liability, theories of damage, or defenses between Bank of America,
N.A., its subsidiaries and affiliates, on the one hand, and the
other parties to this Agreement, on the other hand (all of the
foregoing each being referred to as a “Party” and
collectively as the “Parties”). Whether in state court,
federal court, or any other venue, jurisdiction, or before any
tribunal, the Parties agree that all aspects of litigation and
trial of any Claim will take place without resort to any form of
class or representative action. Thus the Parties may only bring
Claims against each other in an individual capacity and waive any
right they may have to do so as a class representative or a class
member in a class or representative action. THIS CLASS ACTION WAIVER PRECLUDES ANY PARTY
FROM PARTICIPATING IN OR BEING REPRESENTED IN ANY CLASS OR
REPRESENTATIVE ACTION REGARDING A CLAIM.


 






 

24







 





 







10.7

Severability;
Waivers.





 


If any
part of this Agreement is not enforceable, the rest of the
Agreement may be enforced. The Bank retains all rights, even if it
makes a loan after default. If the Bank waives a default, it may
enforce a later default. Any consent or waiver under this Agreement
must be in writing.

 




10.8

Expenses.





 



(a) 

The Borrower shall
pay to the Bank immediately upon demand the full amount of all
reasonable and necessary payments, advances, charges, costs and
expenses payable to any third parties, including reasonable
attorneys' fees, actually expended or incurred by the Bank in
connection with (i) the negotiation and preparation of this
Agreement and any related agreements, the Bank's continued
administration of this Agreement and such related agreements, and
the preparation of any amendments and waivers related to this
Agreement or such related
agreements, (ii) filing, recording and search fees, appraisal fees,
field examination fees, title report fees, and documentation fees
with respect to any collateral and books and records of the
Borrower or any other Obligor (iii) the Bank's costs or losses
arising from any changes in law which are allocated to this
Agreement or any credit outstanding under this Agreement, and (iv)
costs or expenses required to be paid by the Borrower or any other
Obligor that are paid, incurred or advanced by the
Bank.





 


The
Bank reserves the right to conduct field examinations at its own
expense, provided that the Bank will not conduct more than one
field examination per calendar year so long as no Event of Default
exists.

 



(b) 

The Borrower will
indemnify and hold the Bank harmless from any loss, liability,
damages, judgments, and costs of any kind relating to or arising
directly or indirectly out of (i) this Agreement or any document
required hereunder, (ii) any credit extended or committed by the
Bank to the Borrower hereunder, (iii) any claim, whether
well-founded or otherwise, that there has been a failure to comply
with any law regulating the Borrower's sales or leases to or
performance of services for debtors obligated upon the Borrower's
accounts receivable and disclosures in connection therewith, and
(iv) any litigation or proceeding related to or arising out of this
Agreement, any such document, any such credit, or any such claim,
including, without limitation, any act resulting from (A) the Bank
complying with instructions the Bank reasonably believes are made
by any Authorized Individual and (B)
the Bank’s reliance on any Communication executed using an
Electronic Signature, or in the form of an Electronic Record, that
the Bank reasonably believes is made by any Authorized
Individual. This paragraph will survive this Agreement's
termination, and will benefit the Bank and its officers, employees,
and agents.





 



(c) 

The Borrower shall
reimburse the Bank for any reasonable costs and attorneys' fees
incurred by the Bank in connection with (a) the enforcement or
preservation of the Bank's rights and remedies and/or the
collection of any obligations of the Borrower which become due to
the Bank and in connection with any "workout" or restructuring, and
(b) the prosecution or defense of any action in any way related to
this Agreement, the credit provided hereunder or any related
agreements, including without limitation, any action for
declaratory relief, whether incurred at the trial or appellate
level, in an arbitration proceeding or otherwise, and including any
of the foregoing incurred in connection with any bankruptcy
proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by the Bank or any other person)
relating to the Borrower or any other person or
entity.





 


 



 

25







 






 



 




10.9

Individual
Liability.





 


If the
Borrower is a natural person, the Bank may proceed against the
Borrower's business and non-business property in enforcing this
Agreement and other agreements relating to this loan. If the
Borrower is a partnership, the Bank may proceed against the
business and non-business property of each general partner of the
Borrower in enforcing this Agreement and other agreements relating
to this loan.

 




10.10

Set-Off.





 


Upon
and after the occurrence of an event of default under this
Agreement, (a) the Borrower hereby authorizes the Bank at any time
without notice and whether or not the Bank shall have declared any
amount owing by the Borrower to be due and payable, to set off
against, and to apply to the payment of, the Borrower’s
indebtedness and obligations to the Bank under this Agreement and
all related agreements, whether matured or unmatured, fixed or
contingent, liquidated or unliquidated, any and all amounts owing
by the Bank to the Borrower, and in the case of deposits, whether
general or special (except trust and escrow accounts), time or
demand and however evidenced, and (b) pending any such action, to
hold such amounts as collateral to secure such indebtedness and
obligations of the Borrower to the Bank and to return as unpaid for
insufficient funds any and all checks and other items drawn against
any deposits so held as the Bank, in its sole discretion, may
elect. The Borrower hereby grants to the Bank a security interest
in all deposits and accounts maintained with the Bank to secure the
payment of all such indebtedness and obligations of the Borrower to
the Bank.

 




10.11

One Agreement.





 


This
Agreement and any related security or other agreements required by
this Agreement constitute the entire agreement between the Borrower
and the Bank with respect to each credit subject hereto and
supersede all prior negotiations, communications, discussions and
correspondence concerning the subject matter hereof. In the event
of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will
prevail.

 




10.12

Notices.





 


Unless
otherwise provided in this Agreement or in another agreement
between the Bank and the Borrower, all notices required under this
Agreement shall be personally delivered or sent by first class
mail, postage prepaid, or by overnight courier, to the addresses on
the signature page of this Agreement, or sent by facsimile to the
fax number(s) listed on the signature page, or to such other
addresses as the Bank and the Borrower may specify from time to
time in writing (any such notice a “Written Notice”). Written
Notices shall be effective (i) if mailed, upon the earlier of
receipt or five (5) days after deposit in the U.S. mail, first
class, postage prepaid, (ii) if telecopied, when transmitted, or
(iii) if hand-delivered, by courier or otherwise (including
telegram, lettergram or mailgram), when delivered. In lieu of a
Written Notice, notices and/or communications from the Bank to the
Borrower may, to the extent permitted by law, be delivered
electronically (i) by transmitting the communication to the
electronic address provided by the Borrower or to such other
electronic address as the Borrower may specify from time to time in
writing, or (ii) by posting the communication on a website and
sending the Borrower a notice to the Borrower’s postal
address or electronic address telling the Borrower that the
communication has been posted, its location, and providing
instructions on how to view it (any such notice, an
“Electronic
Notice”). Electronic Notices shall be effective when
the communication, or a notice advising of its posting to a
website, is sent to the Borrower’s electronic
address.

 




10.13

Headings.





 


Article
and paragraph headings are for reference only and shall not affect
the interpretation or meaning of any provisions of this
Agreement.


 






 

26







 





 







10.14

Electronic Records and
Signatures.





 


This
Agreement and any document, amendment, approval, consent,
information, notice, certificate, request, statement, disclosure or
authorization related to this Agreement (each a “Communication”),
including Communications required to be in writing, may, if agreed
by the Bank, be in the form of an Electronic Record and may be
executed using Electronic Signatures, including, without
limitation, facsimile and/or .pdf. The Borrower agrees that any
Electronic Signature (including, without limitation, facsimile or
..pdf) on or associated with any Communication shall be valid and
binding on the Borrower to the same extent as a manual, original
signature, and that any Communication entered into by Electronic
Signature, will constitute the legal, valid and binding obligation
of the Borrower enforceable against the Borrower in accordance with
the terms thereof to the same extent as if a manually executed
original signature was delivered to the Bank. Any Communication may
be executed in as many counterparts as necessary or convenient,
including both paper and electronic counterparts, but all such
counterparts are one and the same Communication. For the avoidance
of doubt, the authorization under this paragraph may include,
without limitation, use or acceptance by the Bank of a manually
signed paper Communication which has been converted into electronic
form (such as scanned into PDF format), or an electronically signed
Communication converted into another format, for transmission,
delivery and/or retention. The Bank may, at its option, create one
or more copies of any Communication in the form of an imaged
Electronic Record (“Electronic Copy”), which
shall be deemed created in the ordinary course of the Bank’s
business, and destroy the original paper document. All
Communications in the form of an Electronic Record, including an
Electronic Copy, shall be considered an original for all purposes,
and shall have the same legal effect, validity and enforceability
as a paper record. Notwithstanding anything contained herein to the
contrary, the Bank is under no obligation to accept an Electronic
Signature in any form or in any format unless expressly agreed to
by the Bank pursuant to procedures approved by it; provided,
further, without limiting the foregoing, (a) to the extent the Bank
has agreed to accept such Electronic Signature, the Bank shall be
entitled to rely on any such Electronic Signature purportedly given
by or on behalf of any Obligor without further verification and (b)
upon the request of the Bank any Electronic Signature shall be
promptly followed by a manually executed, original counterpart. For
purposes hereof, “Electronic Record” and
“Electronic
Signature” shall have the meanings assigned to them,
respectively, by 15 USC §7006, as it may be amended from time
to time.

 




10.15

Borrower/Obligor Information;
Reporting to Credit Bureaus.





 


The
Borrower authorizes the Bank at any time to verify or check any
information given by the Borrower to the Bank, check the
Borrower’s credit references, verify employment, and obtain
credit reports and other credit bureau information from time to
time in connection with the administration, servicing and
collection of the loans under this Agreement. The Borrower agrees
that the Bank shall have the right at all times to disclose and
report to credit reporting agencies and credit rating agencies such
information pertaining to the Borrower and all other Obligors as is
consistent with the Bank's policies and practices from time to time
in effect.

 




10.16

Customary Advertising
Material.





 


The
Borrower consents to the publication by the Bank of customary
advertising material relating to the transactions contemplated
hereby using the name, product photographs, logo or trademark of
the Borrower.

 




10.17

Acknowledgement Regarding Any
Supported QFCs.





 


To the
extent that this Agreement and any document executed in connection
with this Agreement (collectively, “Loan Documents”) provide
support, through a guarantee or otherwise, for any Swap Contract or
any other agreement or instrument that is a QFC (such support,
“QFC Credit
Support”, and each such QFC, a “Supported QFC”), the
parties acknowledge and agree as follows with respect to the
resolution power of the Federal Deposit Insurance Corporation under
the Federal Deposit Insurance Act and Title II of the Dodd-Frank
Wall Street Reform and Consumer Protection Act (together with the
regulations promulgated thereunder, the “U.S. Special Resolution
Regimes”) in respect of such Supported QFC and QFC
Credit Support (with the provisions below applicable
notwithstanding that the Loan Documents and any Supported QFC may
in fact be stated to be governed by the laws of the Governing Law
State and/or of the United States or any other state of the United
States):


 






 

27







 





 






(a) 

In the event a
Covered Entity that is party to a Supported QFC (each, a
“Covered
Party”) becomes subject to a proceeding under a U.S.
Special Resolution Regime, the transfer of such Supported QFC and
the benefit of such QFC Credit Support (and any interest and
obligation in or under such Supported QFC and such QFC Credit
Support, and any rights in property securing such Supported QFC or
such QFC Credit Support) from such Covered Party will be effective
to the same extent as the transfer would be effective under the
U.S. Special Resolution Regime if the Supported QFC and such QFC
Credit Support (and any such interest, obligation and rights in
property) were governed by the laws of the United States or a state
of the United States. In the event a Covered Party or a BHC Act
Affiliate of a Covered Party becomes subject to a proceeding under
a U.S. Special Resolution Regime, Default Rights under the Loan
Documents that might otherwise apply to such Supported QFC or any
QFC Credit Support that may be exercised against such Covered Party
are permitted to be exercised to no greater extent than such
Default Rights could be exercised under the U.S. Special Resolution
Regime if the Supported QFC and the Loan Documents were governed by
the laws of the United States or a state of the United
States





 



(b)            

As used in this
paragraph, the following terms have the following
meanings:





 


“BHC Act Affiliate” of a
party means an “affiliate” (as such term is defined
under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of
such party.

 


“Covered Entity” means any
of the following: (i) a “covered entity” as that term
is defined in, and interpreted in accordance with, 12 C.F.R.
§ 252.82(b); (ii) a “covered bank” as that
term is defined in, and interpreted in accordance with, 12 C.F.R.
§ 47.3(b); or (iii) a “covered FSI” as that
term is defined in, and interpreted in accordance with, 12 C.F.R.
§ 382.2(b).

 


“Default Right” has the
meaning assigned to that term in, and shall be interpreted in
accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.

 


“QFC” has the meaning
assigned to the term “qualified financial contract” in,
and shall be interpreted in accordance with, 12 U.S.C.
5390(c)(8)(D).

 


“Swap Contract” means (a)
any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity
options, forward commodity contracts, equity or equity index swaps
or options, bond or bond price or bond index swaps or options or
forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other
similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether
or not any such transaction is governed by or subject to any master
agreement, and (b) any and all transactions of any kind, and the
related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association,
Inc., any International Foreign Exchange Master Agreement, or any
other master agreement (any such master agreement, together with
any related schedules, a “Master Agreement”),
including any such obligations or liabilities under any Master
Agreement.


 






 

28







 





 







10.18

Amendments.





 


This
Agreement may only be amended by a writing signed by the parties
hereto; which, to the extent expressly agreed to by the Bank in its
discretion, may include being amended by an Electronic Record
signed by the parties hereto using Electronic Signatures pursuant
to the terms of this Agreement.

 




10.19

Disposition of Schedules and
Reports.





 


The
Bank will not be obligated to return any schedules, invoices,
statements, budgets, forecasts, reports or other papers delivered
by the Borrower. The Bank will destroy or otherwise dispose of such
materials at such time as the Bank, in its discretion, deems
appropriate.

 




10.20

Returned
Merchandise.





 


Until
the Bank exercises its rights to collect the accounts receivable as
provided under any security agreement required under this
Agreement, the Borrower may continue its present policies for
returned merchandise and adjustments. Credit adjustments with
respect to returned merchandise shall be made immediately upon
receipt of the merchandise by the Borrower or upon such other
disposition of the merchandise by the debtor in accordance with the
Borrower's instructions. If a credit adjustment is made with
respect to any Acceptable Receivable, the amount of such adjustment
shall no longer be included in the amount of such Acceptable
Receivable in computing the Borrowing Base.

 




10.21

Verification of
Receivables.





 


The
Bank may at any time, either orally or in writing, request
confirmation from any debtor of the current amount and status of
the accounts receivable upon which such debtor is
obligated.

 




10.22

Waiver of
Confidentiality.





 


The
Borrower authorizes the Bank to discuss the Borrower's financial
affairs and business operations with any accountants, auditors,
business consultants, or other professional advisors employed by
the Borrower, and authorizes such parties to disclose to the Bank
such financial and business information or reports (including
management letters) concerning the Borrower as the Bank may
request.

 




10.23

Limitation of Interest and Other
Charges.





 



 Notwithstanding any other provision contained in this
Agreement, the Bank does not intend to charge and the Borrower
shall not be required to pay any amount of interest or other fee or
charge that is in excess of the maximum rate or amount permitted by
applicable law. Any payment in excess of such amount shall be
refunded to the Borrower or credited against principal, at the
option of the Bank. As used herein, the term “applicable
law” means the law in effect as of the date of this
Agreement; provided, however, that in the event there is a change
in the law which results in a higher permissible rate of interest
or a greater permissible fee or charge, then this Agreement shall
be governed by such new provision of law as of its effective
date.


 










 

29







 






 



Signature Page

 


The
Borrower executed this Agreement as of the date stated at the top
of the first page, intending to create an instrument executed under
seal.


 





Bank:


 



Bank of America, N.A.


 




By: /s/
J.
Brooks Emory IV


J.
Brooks Emory IV, VP, Senior Relationship Manager


 


Borrower:


 



Lakeland Industries, Inc., a Delaware
corporation


 





By: /s/
Allen
Dillard


(Seal)






Allen
Dillard, Chief Financial Officer


  





Prepared
by: Butler Snow
LLP:


 





Bank of America



NC1-001-05-13



One Independence Center



101 North Tryon Street



Charlotte, NC 28255-0001


 


	

Address
where notices to

	

Address
where notices to


	

the
Bank are to be sent:

	

the
Borrower are to be sent:


	
 

	
 


	

Bank of
America

	

202
Pride Lane SW


	

NC1-001-05-13

	

Decatur,
AL 35603


	

One
Independence Center

	

Attn:
Allen Dillard


	

101
North Tryon Street

	

aedillard@lakeland.com


	

Charlotte,
NC 28255-0001

	

Telephone:
256-445-4100







  





 


USA Patriot Act Notice; Affiliate
Sharing Notice; Affiliate Marketing Notice.

 



Federal law requires Bank of America, N.A. (the “Bank”)
to provide the following three notices. The notices are not
part of the foregoing agreement or instrument and may not be
altered. Please read the notices carefully.

 



(1)            

USA
PATRIOT ACT NOTICE






 


Federal
law requires all financial institutions to obtain, verify and
record information that identifies each person who opens an account
or obtains a loan. The Bank will ask for the Borrower’s legal
name, address, tax ID number or social security number and other
identifying information. The Bank may also ask for additional
information or documentation or take other actions reasonably
necessary to verify the identity of the Borrower, guarantors or
other related persons.


 




 30