Document:

Unassociated Document

    Exhibit
10.1

     

     

    LICENSE
AGREEMENT

     

    This
Agreement (the "Agreement") dated as of February,24, 2010 ("Effective Date") is
made by and between Globotek Holdings, Inc., a Nevada corporation having a
business address at 22, Severnaya Street, Togliatti, Samara region,
Russia.("Globotek") and Energy Network Limited (TOM) ("Licensee") having a
business address of 1st Floor, Arbory House, 41 Arbory Street, Castletown, Isle
of Man, British Isles, 1M9 ILL. Globotek is presently reporting to the
Securities and Exchange Commission ("SEC") under the company name Caribbean
Villa Catering Corp. with its formal legal name change in progress.

     

    WHEREAS,
Globotek and its affiliates represent a group of enterprises that have developed
a unique and patented technology specializing in the treatment of Associated
Petroleum Gas ("APG") via a modular processing plant (the "Globotek APG System"
or 'the Intellectual Property" or "Licensed Property"), which is set forth in
Attachment 1. The Globotek APG System can be used in operations in the Russian
Federation as well as other parts of the world.

     

    WHEREAS,
Licensee desires to (i) license such Intellectual Property to use in sales and
marketing of various packaging products in the Territory (as defined
herein).

     

    NOW,
THEREFORE, in consideration of the covenants and premises set forth herein, the
parties hereby agree as follows_

     

    I.
EFFECTIVE DATE

     

    This
Agreement is effective February,24, 2010 ("Effective Date"). 2. DEFINITIONS

     

    As used
in this Agreement, the following terms have the meanings indicated:

     

    2.1 "Affiliate" means any business
entity more than 50% owned by Licensee, any business entity which owns more than
50% of Licensee, or any business entity that is more than 50% owned by a
business entity that owns more than 50% of Licensee.

     

    2.2 "Licensed Field" means solving
APG flaring problem by utilization via processing with output to be the
following products: Natural gasoline (stable or unstable) and/or LPG and/or Dry
natural gas and/or Electricity at the territory of Nigeria

     

    2.3 "Licensed Product" means any
product Sold by Licensee comprising Licensed Subject Matter pursuant to this
Agreement. The primary product sold under this Agreement will be the Globotek
APG System.

     

    2.4 "Licensed Subject Matter"
means the exclusive marketing and sales rights at Licensed
Field.

     

    2.5 "Licensed Territory"
means Nigeria. , and other
territories added by mutual written agreement and listed at time to time on
schedule
A.

     

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

     

     

    2.6 "Net Sales" means the gross
revenues received by Licensee from the Sale of Licensed Products less sales
and/or use taxes actually paid, import and/or export duties actually paid,
outbound transportation prepaid or allowed, and amounts allowed or credited due
to returns (not to exceed the original billing or invoice amount).

     

    2.7 "Sale, Sell or Sold" means the
transfer or disposition of a Licensed Product for value to a party other than
Licensee.

     

    2.8 "Technology Rights" means
Globotek's rights in technical information, know-how, processes, procedures,
compositions, devices, methods, fottnulas, protocols, techniques, software,
designs, drawings or data created Globotek before the Effective Date relating to
the Licensed Subject Matter.

     

    3. WARRANTY:
SUPERIOR-RIGHTS

     

    3.1
Except for the rights, if any, of the Government of the United States, Nigeria
or Russia, Globotek represents and warrants its belief that (i) it is the owner
of the entire right, title, and interest in and to Licensed Subject Matter, (ii)
it has the sole right to grant licenses thereunder, and (iii) it has not
knowingly granted licenses thereunder to any other entity that would restrict
rights granted to Licensee except as stated herein.

     

    3.2
Licensee understands and acknowledges that Globotek, by this Agreement, makes no
representation as to the operability or fitness for any use, safety, efficacy,
ability to obtain regulatory approval, and/or breadth of the Licensed Subject
Matter.

     

    3.3
Licensee understands and acknowledges that Globotek, by this Agreement, makes no
representation as to the ability to obtain regulatory approval for the Licensed
Subject Matter for purposes outside the scope of its current regulatory
approval, but will make best efforts to work with Licensee if additional
regulatory approvals are required.

     

    3.4
Licensee, by execution hereof, acknowledges, covenants and agrees that it has
not been induced in any way by Globotek, or its employees to enter into this
Agreement, and further warrants and represents that it has conducted sufficient
due diligence with respect to all items and issues pertaining to this Article 3
and all other matters pertaining to this Agreement.

     

    4. LICENSE

     

    4.1
Globotek hereby grants to Licensee an exclusive license under Licensed Subject
Matter to sell Licensed Products within the Licensed Territory for use within
Licensed Field. Exclusivity in the Licensed Territory shall be forfeited by
Licensee if one Globotek APG System (referred to throughout as a "Unit") is not
sold within the 9 months from the Effective Date, and a unit for each
consequetive 9 month period thereafter within in each country of the Licensed
Territory. This grant is also subject to the payment by Licensee to Globotek of
all consideration as provided herein, and is further subject to rights retained
by Globotek to:

     

    
      	
               
      

            	
              a.
      Publish the general scientific findings from research related to Licensed
      Subject Matter subject to the terms of Section 10, Confidential
      Information; and

            

    

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
              b.
      Use Licensed Subject Matter for research, teaching and other
      educationally-related purposes.

            

    

     

    4.2
Licensee may extend the license granted herein to any Affiliate if the Affiliate
consents to be bound by this Agreement to the same extent as
Licensee.

     

    4.3
Licensee may grant sublicenses consistent with this Agreement if Licensee is
responsible for the operations of its sublicensees relevant to this Agreement as
if the operations were carried out by Licensee, including the payment of
royalties whether or not paid to Licensee by a sublicensee. The granting of a
sublicense must be approved by Globotek in advance. Licensee must deliver to
Globotek a true and correct copy of each sublicense granted by Licensee, and any
modification or termination thereof, within 30 days after execution,
modification, or termination. When this Agreement is terminated, all existing
sublicenses granted by Licensee must be assigned to Globotek.

     

    5.
PAYMENTS AND REPORTS

     

    5.1 In
consideration of rights granted by Globotek to Licensee under this Agreement,
Licensee will pay Globotek a running royalty as described in Schedule A for each
country in Licensed Teritory. Any royalty payments shall be deferred for three
years for each Unit purchased. Royalty payments will then be due 30 days after
each quarter of a calendar year.

     

    5.2
During the Term of this Agreement and for 1 year thereafter, Licensee agrees to
keep complete and accurate records of its and its sublicensees' Sales and Net
Sales of Licensed Products under the license granted in this Agreement in sufficient
detail to enable the royalties payable hereunder to be determined. Licensee
agrees to permit Globotek or its representatives, at Globotek's expense, to
periodically examine its books, ledgers, and records during regular business
hours for the purpose of and to the extent necessary to verify any report
required under this Agreement. If there are any discrepancies discovered by
Licensee or Globotek, such under or overpayment will be reconciled
immediately.

     

    5.3
Within 60 days after December 31, beginning immediately after the Effective
Date, Licensee must deliver to Globotek a true and accurate written report, even
if no payments are due Globotek, giving the particulars of the business
conducted by Licensee and its sublicensee(s), if any exist, during the preceding
calendar year under this Agreement as are pertinent to calculating payments
hereunder. This report will include at least:

     

    a. the
quantities of Licensed Subject Matter that it has produced;

     

    b. the total
Sales;

     

    c. the
calculation of royalties thereon; and

     

    d. the
total royalties computed and due Globotek.

     

    5.4 All
amounts payable here by Licensee must be paid by electronic transfer in Euros or
United States Dollar funds as directed by Globotek.

     

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

     

    6.
TERM AND TERMINATION

     

    6.1 The
term of this Agreement is from the Effective Date for a period of ten (10) years
("Licenced Period"), provided that one Unit is sold within the first 9 months.
If after nine months, there has not been a sale of a single Unit, the
exclusivity in the Territory will cease for the remainder of the Licenced
Period. Thereafter for every following year, if there has not been a sale of a
single Unit within the first nine months of that year, the exclusivity in the
Territory will cease for the remainder of the Licensed Period.

     

    6.2 The
following definitions apply to Article 6: (i) "Commercialize" means having Sales
of Licensed Products in such jurisdiction; and (ii) "Active attempts to
commercialize" means having Sales of Licensed Products or an effective, ongoing
and active research, development, marketing or sales program as appropriate,
directed toward obtaining regulatory approval or Sales of Licensed Products in
any jurisdiction, and plans acceptable to Globotek, in its sole discretion, to
commercialize licensed product in the jurisdiction(s) that Globotek intends to
terminate.

     

    6.3 This
Agreement will earlier terminate:

     

    
      
        	
                a. 

              	
                automatically
      if Licensee becomes bankrupt or insolvent and/or if the business of
      Licensee is placed in the hands of a receiver, assignee, or trustee,
      whether by voluntary act of Licensee or otherwise;
  or

              

      

    

     

    
      	
              b.  

            	
              upon
      90 days written notice from Globotek, once a breach has occurred unless,
      before the end of the 90 day period, Licensee has cured the default or
      breach and so notifies Globotek, stating the manner of the cure;
      or

            

    

     

    
      
        
          
            	
                    c.

                  	
                    effective
      180 days of such written agreement between the parties. 6.4 If this
      Agreement is terminated for any
cause:

                  

          

        

      

    

     

    
      	
              a.  

            	
              nothing
      herein will be construed to release either party of any obligation matured
      prior to the effective date of the
termination;

            

    

     

    
      	
              b.  

            	
              after
      the effective date of the termination, Licensee may sell all Licensed
      Products and parts thereof it has on hand at the date of termination;
      and

            

    

     

    
      	
              c.

            	
              Licensee
      will be bound by the provisions of Articles 7 (Indemnification), 8 (Use of
      Globotek and Component's Name), and 9 (Confidential Information) of this
      Agreement.

            

    

     

    7. ASSIGNMENT

     

    Except in
connection with the sale of substantially all of Licensee's assets to a third
party, this Agreement may not be assigned by Licensee without the prior written
consent of Globotek, which will not be unreasonably withheld.

     

    8.
INDEMNIFICATION AND INSURANCE

     

    8.1
Licensee agrees to hold harmless and indemnify Globotek, officers, employees and
agents from and against any claims, demands, or causes of action whatsoever,
including without limitation those

    arising
on account of any injury or death of persons or damage to property caused by, or
arising out of, or resulting from, the exercise or practice of the license
granted hereunder by Licensee, its Affiliates or their officers, employees,
agents or representatives, this indemnity specifically excludes acts of
negligence or malicious intent.

     

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    8.2 In no
event shall Globotek be liable for any indirect, special. consequential or
punitive damages or for injury to persons or property arising out of or in
connection with this Agreement or its subject matter, regardless of whether
Globotek knows or should know of the possibility of such damages.

     

    8.3
Insurance

     

    Beginning
at the time when any Licensed Subject Matter is being distributed or sold
(including for the purpose of obtaining regulatory approvals) by Licensee or by
a sublicensee, Licensee shall in consultation with its insurance advisors, seek
to determine what levels of additional risk Globotek may incur through the
implementation of this agreement and thereby determine what level of commercial
general liability insurance is appropriate to maintain. Should it be determined
that additional insurance, to that maintained in the general course of
Licensee's business.
be procured, and such limits be available to the Licensee at reasonable
commercial rates, from a suitable insurance provider, then such additional
limits will be procured and maintained by the Licensee at its sole cost and
expense. 1 this case,
Licensee shall use reasonable efforts to have the Globotek, APG System,
Globotek, its officers, employees and agents named as additional insureds, and
that such commercial general liability insurance shall provide (i) product
liability coverage; (ii) broad fotm contractual liability coverage for
Licensee's indemnification under this Agreement; and (iii)

    coverage
for litigation costs. The minimum amounts of insurance coverage required shall
not be construed to create a limit of Licensee's liability with respect to its
indemnification under this Agreement. Should such additional insurance be
procured, the Licensee shall maintain such additional commercial general
liability insurance beyond the expiration or termination of this Agreement
during (i) the period that any Licensed Subject Matter developed pursuant to
this Agreement is being commercial distributed or sold by Licensee or by a
sublicensee or agent of Licensee; and (ii) the five (5) year period immediately
after such period.

     

    9. USE
OF GLOBOTEK AND COMPONENT'S NAME

     

    Licensee
may not use the name of Globotek without express written consent.

     

    10. CONFIDENTIAL
INFORMATION AND PUBLICATION

     

    10.1
Globotek and Licensee each agree that all information contained in documents
marked "confidential" and forwarded to one by the other (i) be received in
strict confidence, (ii) be used only for the purposes of this Agreement, and
(iii) not be disclosed by the recipient party, its agents or employees without
the prior written consent of the other party, except to the extent that the
recipient party can establish competent written proof that such
information:

     

    
      	
              a.  

            	
              was
      in the public domain at the time of
disclosure;

            

    

     

    
      	
              b.  

            	
              later
      became part of the public domain through no act or omission of the
      recipient party, it's employees, agents, successors or
      assigns;

            

    

     

    
      	
              c.

            	
              was
      lawfully disclosed to the recipient party by a third party having the
      right to disclose it;

            

    

     

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

     

    
      	
              d. 

            	
              was
      already known by the recipient party at the time of
      disclosure;

            

    

     

    
      	
              e.

            	
              was
      independently developed by the recipient;
or

            

    

     

    
      	
              f.

            	
              is
      required by law or regulation to be
disclosed.

            

    

     

    10.2 Each
party's obligation of confidence hereunder shall be fulfilled by using at least
the same degree of care with the other party's confidential information as it
uses to protect its own confidential information_ This obligation shall exist
while this Agreement is in force and for a period of 3 years
thereafter.

     

    11. ALTERNATE
DISPUTE RESOLUTION

     

    Any
dispute or controversy arising out of or relating to this Agreement, its
construction or its actual or alleged breach will be decided by mediation. If
the mediation does not result in a resolution of such dispute or controversy, it
will be finally decided by an appropriate method of alternate dispute
resolution, including without limitation, arbitration, conducted in the United
Kingdom. The arbitration panel will include members knowledgeable in the
evaluation of APG processing technology. Judgment upon the award rendered may be
entered in the highest court or forum having jurisdiction. The provisions of
this Article 10 will not apply to any dispute or controversy as to which any
treaty or law prohibits such arbitration. The decision of the arbitration must
be sanctioned by a court of law having jurisdiction to be binding upon and
enforceable by the parties.

     

    12. GENERAL

     

    12.1 This
Agreement constitutes the entire and only agreement between the parties for
Licensed Subject Matter and all other prior negotiations, representations,
agreements, and understandings are superseded hereby. No agreements altering or
supplementing the terms hereof may be made except by a written document signed
by both parties.

     

    12.2 This
Agreement has been reviewed and was approved by Russian counsel, Mr. Peter
Sobolev, on behalf of Globotek, and indicated that it is in accordance with the
Laws of the Russian Federation.

     

    12.3 Any
notice required by this Agreement must be given by prepaid, first class,
certified mail, return receipt requested, addressed to:

     

    GLOBOTEK

     

    Office
address: 22, Severnaya Street, Togliatti, Samara region, Russia

     

    Attention:
Vladislav Tenenbaum

     

    For mail:
P.O.B.1127, Togliatti, 445028 Russia

     

    Tel/fax.+7
848 2319999 (multiline)

     

    e-mail:
tenenbaum@globotek.ru

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

     

    or in the
case of Licensee to:

     

    Energy
Network Limited (IOM)

    1st
Floor, Arbory House, 41 Arbory

    Street,
Castletown, Isle of Man, British Isles, IM9 1 LL.

     

    AIIENTION:
Steven Douglas Redman

     

    PHONE:
+44 (0) 845 269 2048

     

    FAX: +44
(0) 845 269 2049

     

    or other
addresses as may be given from time to time under the terms of this notice
provision,

     

    12.3
Licensee must comply with all applicable laws and regulations in connection with
its activities pursuant to this Agreement.

     

    12.4 This
Agreement will be construed and enforced in accordance with the laws of the
United Kingdom.

     

    12.5
Failure of either party to enforce a right under this Agreement will not act as
a waiver of that right or the ability to later assert that right relative to the
particular situation involved.

     

    12.6
Headings are included herein for convenience only and shall not be used to
construe this Agreement.

     

    12.7 If
any part of this Agreement is for any reason found to be unenforceable, all
other parts nevertheless remain enforceable.

     

    13.
OBLIGATIONS AND REPRESENTATIONS AND WARRANTIES

     

    13.1
GLOBOTEK hereby represents and warrants to Licensee that (a) GLOBOTEK has full
legal right, power and authority to execute, deliver and perform its obligations
under this Agreement and (b) this Agreement constitutes a valid and binding
agreement of GLOBOTEK, enforceable against GLOBOTEK in accordance with its
terms.

     

    13.2
Licensee hereby represents and warrants to GLOBOI EK that (a) Licensee has full
legal right, power and authority to execute, deliver and perform its obligations
under this Agreement and (b) this Agreement constitutes a valid and binding
agreement of Licensee, enforceable against Licensee in accordance with its
terms.

     

    13.3 The
representations and warranties contained herein shall survive the execution,
delivery and performance of this Agreement by the parties, notwithstanding any
investigation at any time made by or on behalf of any party or
parties.

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    14. WARRANTY
AND DISCLAIMER OF WARRANTIES

     

    14.1 Each
party represents and warrants that it will not assume any contractual obligation
that prevents such party from performing its obligations or conflicts with the
rights and licenses granted in this Agreement.

     

    14.2 THE
FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, EITHER EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABLITIY AND FITNESS FOR ANY PARTICULAR PURPOSE, EVEN IF HARVEST HAS BEEN
MADE AWARE OF SUCH PURPOSE, AND THE WARRANTY AGAINST INFRINGEMENT OF PATENTS OR
OTHER INTELLECTUAL PROPERTY RIGHTS.

     

    15. GENERAL

     

    15.1 Each
party is an independent contractor. Neither party is, nor will claim to be, a
legal representative, partner, franchisee, agent or employee of the other.
Neither party will assume or create obligations for the other. Each party is
responsible for the direction and compensation of its employees.

     

    15.2 Any
notice required or permitted to be made by either party to this Agreement must
be in writing and will be properly delivered when personally delivered or upon
confirmation of receipt of a certified mailing to the other party at its address
as set forth in the beginning of this Agreement.

     

    15.3
Nothing contained herein shall be construed as granting or conferring by
implication, estoppel or otherwise any license or right under any patent,
trademark, copyright or other intellectual property right.

     

    15.4
Neither party has any right or license to use in advertising, publicity,
promotion, marketing, or other similar activity, any name, trade name,
trademark, or other designation including any abbreviation, contraction or
simulation of the other without the prior written permission of the other
party.

     

    15.5 The
headings of this Agreement are for reference only. They will not affect the
meaning or interpretation of this Agreement.

     

    15.6 This
Agreement may be signed in one or more counterparts, each of which will be
considered an original, but all of which together form one and the same
instrument.

     

    15.7 For
a change to this Agreement to be valid, both parties must sign it. No approval,
consent or waiver will be enforceable unless signed by the granting party.
Failure to insist on strict performance or to exercise a right for a breach when
entitled does not prevent a party from doing so later for that breach or a
future one.

     

    15.8 No
waiver of any breach of this Agreement shall constitute a waiver of any prior,
concurrent or subsequent breach of the same or any other provision
hereof.

     

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

     

     

    15.9 If
any provision or portion of a provision of this Agreement is held invalid or
unenforceable, the remainder of the Agreement shall not be affected, and the
remaining terms will continue in effect and be binding on the parties, provided
that such holding of invalidity or unenforceability does not materially affect
the essence of the Agreement.

     

    15.10
Neither Party shall be liable to the other for non-compliance with any provision
of this Agreement if the non-compliance resulted directly from any cause beyond
the reasonable control of the Party.

     

    15.11
This Agreement must be construed and enforced according to the laws of the
United Kingdom without regard to those laws relating to conflict of laws. All
disputes arising hereunder or with respect hereto shall be brought and
maintained in the federal courts of the United Kingdom and each party agrees to
be subject to the jurisdiction of such courts for such purpose.

     

    IN
WITNESS WHEREOF, parties hereto have caused their duly authorized
representatives to execute this Agreement

     

     

    
      
        	GLOBOTEK HOLDINGS, INC.	 	 	LICENSEE - Ene Network Limited (IOM)	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                /s/
      Dimitry
      Lukin

              	 	 	
                /s/ Steven Douglas
      Redman

              	 
	
                Name:
      Dimitry
      Lukin

              	 	 	
                Name:
      Steven
      Douglas Redman

              	 
	
                Title:
      CEO 

              	 	 	
                Title:
      Director 

              	 
	Date:
      24
      February 2010	 	 	Date:
      24
      February 2010	 

      

    

     

     

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

     

    ATTACHMENT
 1

     

    DESCRIPTION
OF THE LICENCED PROPERTY

     

    See
attached certificates and documents supporting Globotek's ownership of the
Licensed Property.

     

     

     

     

    SCHEDULE
A

     

     

    LICENCED
TERITORY

     

    Countries:
Nigeria

     

    ROYALTY
PAYMENTS

     

     

    

    
      	
              Countries: Nigeria - 10%
      of Net Sales for Licensed Products.

            	
               

            

    

    
 

     

     

     

     

     

    10acme_10k123109ex109.htm

    Exhibit
10.9

    
 

    FIFTH
MODIFICATION TO REVOLVING PROMISSORY NOTE AND

    REVOLVING
CREDIT AND SECURITY AGREEMENT,

    AND
REAFFIRMATION OF GUARANTY

    

    

    Acme
United Corporation

    60 Round
Hill Road

    Fairfield,
Connecticut 06824

    (Hereinafter
referred to as
"Borrower")

    

    Acme
United Limited

    351
Foster Street

    Mount
Forest, Ontario, Canada, NOG 2LO

    (Individually
and collectively "Guarantor")

    

    Wachovia
Bank, National Association

    50 Main
Street

    White
Plains, New York 10606

    (Hereinafter
referred to as "Bank")

    

    THIS
AGREEMENT is entered into as of January 25, 2010 by and between Bank, Borrower
and Guarantor.

    

    RECITALS

    

    Bank is
the holder of a certain Amended and Restated Revolving Promissory Note dated
June 23, 2008 in the principal amount of up to $20,000,000.00 (the "Amended
Note"), which Amended Note amended and restated a certain Revolving Promissory
Note in the principal amount of up to $10,000,000.00 dated August 2, 2002 (the
“Original Note”);

    

    The
Original Note was previously amended pursuant to the Second Modification
Agreement, as defined below, to be in the principal amount of up to
$15,000,000.00;

    

    The
Amended Note evidences a certain revolving loan from Bank to Borrower (the
"Loan"), which Loan is made pursuant to the terms of a certain Revolving Credit
And Security Agreement dated August 2, 2002 (as modified from time to time, the
"Loan Agreement”);

    

    The
Original Note and Loan Agreement were modified pursuant to the terms of a
certain Modification to Revolving Promissory Note and Revolving Credit and
Security Agreement and Reaffirmation of Guaranty dated September 30, 2004 (the
“First Modification Agreement”), further amended by a Second Modification to
Revolving Promissory Note and Revolving Credit and Security Agreement and
Reaffirmation of Guaranty dated as of March 6, 2006 (the “Second Modification
Agreement”), further amended by a Third Modification to Revolving Promissory
Note and Revolving Credit and Security Agreement and Reaffirmation of Guaranty
dated as of August 22, 2007 (the “Third Modification Agreement”), and further
amended by a Fourth Modification to Revolving Promissory Note and Revolving
Credit and Security Agreement and Reaffirmation of Guaranty dated as of June 23,
2008 (the “Fourth Modification Agreement” and collectively with this Agreement,
the First Modification Agreement, the Second Modification Agreement, the Third
Modification Agreement, the Fourth Modification Agreement, the Original Note,
the Amended Note, the Loan Agreement, the Guaranty as hereafter defined, and all
of the other documents which evidence or secure the Loan, the "Loan
Documents");

    

    
      
        1

      

      
        
          

        

      

      
         

      

    

     

    Borrower
and Bank have agreed to decrease the principal amount of the Loan, extend the
maturity date of the Loan, modify the interest rate payable under the Amended
Note, and have further agreed to certain other modifications to the Loan
Documents;

    

    Pursuant
to its Unconditional Guaranty dated August 2, 2002 (the “Guaranty”), Guarantor
unconditionally agreed to the full payment and performance of all Guaranteed
Obligations, as defined in the Guaranty, and has agreed to the modifications set
forth herein and to reaffirm its Guaranty;

    

    In
consideration of Bank's agreement to such modifications and the other agreements
contained herein, the parties agree as follows:

    

    

    AGREEMENT

    

    ACKNOWLEDGMENT OF
BALANCE.  Borrower acknowledges that the most recent Commercial
Loan Invoice sent to Borrower with respect to the Indebtedness, as that term is
defined in the Loan Agreement, is correct.

    

    MODIFICATIONS.

    

    1.  The
Amended Note is hereby modified as follows:

    

    a.  The
principal amount of Twenty Million and 00/100 dollars ($20,000,000.00) set forth
in the caption and in the first paragraph of the Amended Note is hereby modified
to be Eighteen Million and 00/100 dollars ($18,000,000.00).  Any other
reference in the Amended Note or in any other Loan Documents to the principal
amount of the Amended Note is hereby modified to be Eighteen Million and 00/100
dollars ($18,000,000.00).

    

    b.  The
section of the Amended Note entitled “INTEREST RATE DEFINITIONS” set forth on
the second page thereof is hereby deleted in its entirety and the following
paragraphs are substituted therefor:

    

    INTEREST
RATE DEFINITIONS.

    

    LIBOR-Based
Rate.  “LIBOR-Based Rate” means 1-month LIBOR plus
2.0%.

    

    LIBOR.  "LIBOR"
means, with respect to each Interest Period, the rate for U.S. dollar deposits
with a maturity equal to the number of months specified above, as reported on
Telerate Successor Page 3750 as of 11:00 a.m., London time, on the second London
business day before such Interest Period begins, or, in the case of the first
Interest Period, the second London business day before the first day of the
calendar month during which such Interest Period begins (or if not so reported,
then as determined by Bank from another recognized source or interbank
quotation).

    

    Interest
Period.  “Interest Period” means, when interest accrues at the
LIBOR-Based Rate, each period commencing on the first day of the calendar month
and ending on the first day of the next succeeding calendar month; provided that
any Interest Period that would otherwise extend past the maturity date of this
Note shall end on the maturity date of this Note.

    

    LIBOR Market Index-Based
Rate.  1-month LIBOR Market Index Rate plus 2.0%, as 1-month
LIBOR Market Index Rate may change from day to day.

    

    LIBOR Market Index
Rate.  1-month "LIBOR Market Index Rate", for any day, means
the rate for 1 month U.S. dollar deposits as reported on Telerate Successor Page
3750 as of 11:00 a.m., London time, on such day, or if such day is not a London
business day, then the immediately preceding London business day (or if not so
reported, then as determined by Bank from another recognized source or interbank
quotation).

    

    
      
        2

      

      
        
          

        

      

      
         

      

    

     

    Except as
set forth above with respect to the modification of such Interest Rate
Definitions, the provisions of the Amended Note specifying the application of
the Interest Rate shall remain unmodified and in full force and
effect.

    

    c.  The
paragraph entitled “REPAYMENT TERMS” set forth on the second page of the Amended
Note is hereby deleted in its entirety and the following paragraph is
substituted therefor:

    

    REPAYMENT
TERMS.  This Note shall be due and payable in consecutive
monthly payments of accrued interest only commencing February 1, 2010 and
continuing on the first Business Day of each month thereafter, until fully
paid.  All outstanding principal will be repaid in accordance with the
Loan Agreement, as hereinafter defined, and, if Borrower subscribes to Bank's
cash management services and such services are applicable to this line of
credit, the terms of such services.  In any event, this Note shall be
due and payable in full, including all principal and accrued interest, on
January 31, 2012, the maturity date of this Note.

    

    2.  The
Loan Agreement is hereby modified as follows:

    

    a.  Section
5.6(e) of the Loan Agreement, entitled “Payables Report”, is hereby deleted in
its entirety and the following is substituted therefor: “Intentionally
Deleted.”

    

    b.  Section
7.4 of the Loan Agreement, entitled “Fixed Charge Coverage
Ratio”, is hereby deleted in its entirety and the following paragraph is
substituted therefor:

    

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

    

    c.  The
definition of “Maximum Loan Amount” set forth in Exhibit 1 to the Loan
Agreement, as previously modified, is hereby deleted in its entirety and the
following is substituted therefor:

    

    "’Maximum Loan Amount’
means: $18,000,000.00.”

    

    d.  The
definition of “Termination Date” set forth in the Loan Agreement is hereby
deleted in its entirety, and the following is substituted therefor:

    
 

    “’Termination Date’
means January 31, 2012.

    

    3.  Except
as modified herein, all other terms, covenants and conditions set forth in any
Loan Document shall remain unmodified and in full force and effect.

    

    ACKNOWLEDGMENTS AND
REPRESENTATIONS.  Borrower and Guarantor acknowledge and
represent that the Amended Note, the Loan Agreement, the Guaranty and all other
Loan Documents, as amended hereby, are in full force and effect without any
defense, counterclaim, right or claim of set-off; that, after giving effect to
this Agreement, no default or event that with the passage of time or giving of
notice would constitute a default under the Loan Documents has occurred; that
all representations and warranties contained in the Loan Documents are true and
correct as of this date; that all necessary action to authorize the execution
and delivery of this Agreement has been taken; and that this Agreement is a
modification of an existing obligation and is not a novation.

    

    
      
        3

      

      
        
          

        

      

      
         

      

    

     

    COLLATERAL.  Borrower
and Guarantor acknowledge and confirm that there have been no changes in the
ownership of the collateral pledged to secure the Loan (the "Collateral") since
the Collateral was originally pledged; that the Bank has existing, valid first
priority security interests and liens in the Collateral; and that such security
interests and liens shall secure Borrower’s and Guarantor’s obligations to Bank,
including without limitation the Note as amended hereby, and all future
modifications, extensions, renewals and/or replacements of the Loan
Documents.

    

    REAFFIRMATION OF
GUARANTY.  Guarantor hereby consents to the modifications
contained herein and hereby ratifies and confirms: (a) that it unconditionally
guarantees to Bank the payment and performance from and by Borrower of the
Guaranteed Obligations, as defined in the Guaranty, upon the terms and
conditions set forth in the Guaranty and (b) such Guaranteed Obligations
include, without limitation, the Amended Note and Loan Agreement as modified
hereby.  Guarantor acknowledges that its reaffirmation and
ratification of the Guaranty is a material inducement for Bank to enter into
this Agreement and that Bank would not do so without said reaffirmation and
ratification.  This Agreement and the Guaranty are Guarantor’s valid
and binding obligation enforceable against it in accordance with their
terms.

    

    MISCELLANEOUS
PROVISIONS.  Assignment.  This Agreement and the
other Loan Documents shall inure to the benefit of and be binding upon the
parties and their respective heirs, legal representatives, successors and
assigns.  Bank's interests in and rights under this Agreement and the
other Loan Documents are freely assignable, in whole or in part, by
Bank.  In addition, nothing in this Agreement or any of the other Loan
Documents shall prohibit Bank from pledging or assigning this Agreement or any
of the other Loan Documents or any interest therein to any Federal Reserve
Bank.  Borrower shall not assign its rights and interest hereunder or
under any of the other Loan Documents without the prior written consent of Bank,
and any attempt by Borrower to assign without Bank's prior written consent is
null and void.  Any assignment shall not release Borrower from the
Obligations. Applicable Law;
Conflict Between
Documents. This Agreement and, unless otherwise provided in any
other Loan Document, the other Loan Documents shall be governed by and
interpreted in accordance with federal law and, except as preempted by federal
law, the laws of the state named in Bank's address on the first page hereof
without regard to that state's conflict of laws principles.  If the
terms of this Agreement should conflict with the terms of any loan agreement or
any commitment letter that survives closing, the terms of this Agreement shall
control.  Borrower's
Accounts.  Except as prohibited by law, Borrower grants Bank a
security interest in all of Borrower's deposit accounts and investment property
with Bank and any of its affiliates. Swap
Agreements.  All swap agreements (as defined in 11 U.S.C. §
101, as in effect from time to time), if any, between Borrower and Bank or its
affiliates are independent agreements governed by the written provisions of said
swap agreements, which will remain in full force and effect, unaffected by any
repayment, prepayment, acceleration, reduction, increase or change in the terms
of the Amended Note, except as otherwise expressly provided in said written swap
agreements, and any payoff statement from Bank relating to the Amended Note
shall not apply to said swap agreements except as otherwise expressly provided
in such payoff statement.  Jurisdiction.  Borrower
irrevocably agrees to non-exclusive personal jurisdiction in the state named in
the Bank’s address on the first page hereof.  Severability.  If
any provision of this Agreement or of the other Loan Documents shall be
prohibited or invalid under applicable law, such provision shall be ineffective
but only to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Agreement or
other such document.  Payments.  All
payments shall be mailed to Bank at Commercial Loan Services, P. O. Box 740502,
Atlanta, GA  30374-0502; or other such address as provided by Bank in
writing.  Notices.  Any
notices to Borrower shall be sufficiently given, if in writing and mailed or
delivered to the Borrower's address shown above or such other address as
provided hereunder, and to Bank, if in writing and mailed or delivered to
Wachovia Bank, National Association, Mail Code MAC J0528-110, 50 Main Street,
White Plains, NY 10606 or such other address as Bank may specify in writing from
time to time.  Notices to Bank must include the mail
code.  In the event that Borrower changes Borrower's address at any
time prior to the date the obligations under the Amended Note are paid in full,
Borrower agrees to promptly give written notice of said change of address by
registered or certified mail, return receipt requested, all charges
prepaid.  Plural;
Captions.  All references in the Loan Documents to Borrower,
guarantor, person, document or other nouns of reference mean both the singular
and plural form, as the case may be, and the term "person" shall mean any
individual, person or entity.  The captions contained in the Loan
Documents are inserted for convenience only and shall not affect the meaning or
interpretation of the Loan Documents.  Advances. Bank in its sole
discretion may make other advances and readvances under the Amended Note
pursuant to its terms.  Posting of
Payments.  All payments received during normal banking hours
after 2:00 p.m. local time at the office of Bank first shown above shall be
deemed received at the opening of the next banking day.  Unless
otherwise permitted by Bank, any repayments of the Amended Note, other than
immediately available U.S. currency, will not be credited to the outstanding
loan balance until Bank receives collected funds. Joint and Several
Obligations. If there is more than one Borrower, each is jointly and
severally obligated together with all other parties obligated for the
Obligations.  Fees
and Taxes.  Borrower shall promptly pay all documentary,
intangible recordation and/or similar taxes on this transaction whether assessed
at closing or arising from time to time.  Patriot Act
Notice.  To help fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person who opens an
account.  For purposes of this section, account shall be understood to
include loan accounts.  Telephone Communication
Monitoring.  Borrower agrees that Borrower’s telephone
communications with Bank may be monitored and/or recorded to improve customer
service and security.  Final
Agreement.  This Agreement and the other Loan Documents
represent the final agreement between the parties and may not be contradicted by
evidence of prior, contemporaneous or subsequent agreements of the
parties.  There are no unwritten agreements between the
parties.

    

    
      
        4

      

      
        
          

        

      

      
         

      

    

     

    LIMITATION ON LIABILITY; WAIVER OF
PUNITIVE DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING BANK BY
ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION
PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT
OF OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
OTHER AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED
HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE
LIABLE TO THE OTHER FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2)
PUNITIVE OR EXEMPLARY DAMAGES.   EACH OF THE PARTIES HEREBY
EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY
HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING,
CLAIM OR CONTROVERSY, WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION,
JUDICIALLY OR OTHERWISE.

    

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

    

    WAIVER OF JURY
TRIAL.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER BY
EXECUTION HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONNECTION WITH THIS AGREEMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY WITH RESPECT HERETO.  THIS PROVISION IS A
MATERIAL INDUCEMENT TO BANK TO ACCEPT THIS AGREEMENT.  EACH OF THE
PARTIES AGREES THAT THE TERMS HEREOF SHALL SUPERSEDE AND REPLACE ANY PRIOR
AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE PARTIES CONTAINED IN
ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN
CONNECTION WITH, RELATED TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR
MODIFIED BY, THIS AGREEMENT.

    

    
      
        5

      

      
        
          

        

      

      
         

      

    

     

    BORROWER
HEREBY REPRESENTS AND WARRANTS TO BANK THAT THE WITHIN WAIVERS ARE THEIR FREE
ACT AND DEED MADE KNOWINGLY AND VOLUNTARILY FOLLOWING CONSULTATION WITH
INDEPENDENT COUNSEL OF THEIR CHOICE.

    

    PLACE OF EXECUTION AND
DELIVERY.  Borrower hereby certifies that this Agreement and
the Loan Documents were executed in the State of Connecticut and delivered to
Bank in the State of Connecticut.

    

    IN WITNESS WHEREOF, the
undersigned have signed and sealed this Agreement as of the day and year first
above written.

    

    

    WITNESSES:

    

     

    
      	 	 	Acme United
      Corporation	 
	 	 	 	 
	 	 By:  
      	/s/ Walter C.
      Johnsen	 
	 	 	Walter C.
      Johnsen	 
	 	 	Its: Chairman of the
      Board and	 
	 	 	     Chief
      Executive Officer	 
	 	 	 	 
	 	 	 	 
	 	 	 Acme United
      Limited	 
	 	 	 	 
	 	 By:  
      	/s/ Walter C.
      Johnsen	 
	 	 	Walter C.
      Johnsen	 
	 	 	Its: Chairman of the
      Board	 

    

     

    
    

     

    
      	STATE
      OF CONNECTICUT 	)	 
	                                                  
      	) ss:
      Fairfield            	January
      25, 2010
	 COUNTY OF
      FAIRFIELD	)	 

    

     

    

    Personally appeared this date, Walter
C. Johnsen, Chairman of the Board and Chief Executive Officer of Acme United
Corporation, a Connecticut corporation, signer and sealer of the
foregoing instrument and acknowledged the same to be his free act and deed as
such officer, and the free act and deed of said corporation, before
me.

     

    

     

    
      	 	 	 
	 	Notary
      Public	 
	 	My
      Commission Expires:	 
	 	Commissioner
      of the Superior Court	 

    

     

     

    
      
        6

      

      
        
          

        

      

      
         

      

    

    

    

    
       

      
        	STATE
      OF CONNECTICUT	)	 
	                                                  
      	) ss:
      Fairfield               	      
                January
      25, 2010

              
	COUNTY OF
      FAIRFIELD	)	 

      

       

    

    Personally appeared this date, Walter
C. Johnsen, Chairman of the Board of Acme United
Limited, a Canadian corporation, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed as such
officer, and the free act and deed of said corporation, before me.

    

    

       

      
        	 	 	 
	 	      
                Notary
      Public

              	 
	 	      
                My
      Commission Expires:

              	 
	 	      
                Commissioner
      of the Superior Court

              	 

      

       

    

     

    
       

      
        	 	 	 WACHOVIA BANK,
      NATIONAL ASSOCIATION
	 	 	 	 
	 	 By:  
      	/s/ Annette
      Herber	 
	 	 	      
                Annette
      Herber

              	 
	 	 	      
                Its:
      Vice President, Duly Authorized

              	 

      

       

    
      
         

        
          	      
                  STATE
      OF NEW YORK 

                	)	 
	                                                  
      	) ss:
      Fairfield            	      
                        
                    January
      26, 2010

                  

                
	COUNTY
      OF                          
      	)	 

        

      

    

     

     

    Personally appeared this date, Annette
Herber, Vice President of Wachovia Bank, National Association, a National
Banking Association, signer and sealer of the foregoing instrument and
acknowledged the same to be his/her free act and deed as such officer, and the
free act and deed of said banking association, before me.

    

    
      

         

        
          	 	 	 
	 	      
                        
                    Notary
      Public

                  

                	 
	 	      
                        
                    My
      Commission Expires:

                  

                	 

        

         

         

         7

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