LOAN AGREEMENT EXHIBIT 10.11
Wachovia Bank, National Association
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(Hereinafter referred to as the "Bank")
Lakeland Industries, Inc.
Attn: Xxxxxxxxxxx X. Xxxx, Chief Executive Officer and
Xxxx Xxxxxxxx, Chief Financial Officer
000-00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
(Individually and collectively "Borrower")
This Loan Agreement ("Agreement") is entered into July 7, 2005, by and between
Bank and Borrower.
This Agreement applies to the loan or loans (individually and collectively, the
"Loan") evidenced by a certain $25,000,000.00 Promissory Note from Borrower to
Bank of even date herewith, or other notes subject hereto, as modified from time
to time (whether one or more, the "Note"), the commercial letters of credit and
standby letters of credit issued hereunder (each, a "Letter of Credit" and
collectively, the "Letters of Credit") and all Loan Documents. The terms "Loan
Documents" and "Obligations," as used in this Agreement, are defined in the
Note.
Relying upon the covenants, agreements, representations and warranties contained
in this Agreement, Bank is willing to extend credit to Borrower upon the terms
and subject to the conditions set forth herein, and Bank and Borrower agree as
follows:
LETTERS OF CREDIT. Upon the request of Borrower, Bank shall issue commercial
Letters of Credit and standby Letters of Credit, provided, the aggregate amount
available to be drawn under all Letters of Credit plus the aggregate amount of
unreimbursed drawings under all Letters of Credit at any one time does not
exceed $2,000,000.00, and further provided, no Letter of Credit shall expire
more than 180 days after the date it is issued. Notwithstanding anything to the
contrary contained herein, the aggregate outstanding principal balance of
Advances (as defined in the Note) plus the aggregate amount available to be
drawn under all Letters of Credit plus the aggregate amount of unreimbursed
drawings under all Letters of Credit at any one time shall not exceed
$25,000,000.00. The Letters of Credit are to be used by Borrower solely to for
Borrower's general corporate purposes. Bank's obligation to issue Letters of
Credit shall terminate if Borrower is in default (however denominated) under the
Note or the other Loan Documents, or in any case, if not sooner terminated, on
July 7, 2010.
LETTER OF CREDIT FEES. Borrower shall pay to Bank, annually, in advance, at such
times as Bank shall require, Bank's standard fees in connection with commercial
Letters of Credit as in effect from time to time, for so long as such commercial
Letter of Credit is outstanding, and with respect to standby Letters of Credit,
at the time of issuance of each standby Letter of Credit, a fee equal to 1.25%
per annum on the face amount of each standby Letter of Credit, for so long as
such standby Letter of Credit is outstanding.
REPRESENTATIONS. Borrower represents that from the date of this Agreement and
until final payment in full of the Obligations: Accurate Information. All
information now and hereafter furnished to Bank, including information set forth
in a certain Borrower Information Certificate dated May 19, 2005 (the "Borrower
Information Certificate"), is and will be true, correct and complete. Any such
information relating to Borrower's financial condition will accurately reflect
Borrower's financial condition as of the date(s) thereof, (including all
contingent liabilities of every type), and Borrower further represents that its
financial condition has not changed materially or adversely since the date(s) of
such documents. Authorization; Non-Contravention. The execution, delivery and
performance by Borrower and any guarantor, as applicable, of this Agreement and
other Loan Documents to which it is a party are within its
power, have been duly authorized as may be required and, if necessary, by making
appropriate filings with any governmental agency or unit and are the legal,
binding, valid and enforceable obligations of Borrower and any guarantors; and
do not (i) contravene, or constitute (with or without the giving of notice or
lapse of time or both) a violation of any provision of applicable law, a
violation of the organizational documents of Borrower or any guarantor, or a
default under any agreement, judgment, injunction, order, decree or other
instrument binding upon or affecting Borrower or any guarantor, (ii) result in
the creation or imposition of any lien (other than the lien(s) created by the
Loan Documents) on any of Borrower's or any guarantor's assets, or (iii) give
cause for the acceleration of any obligations of Borrower or any guarantor to
any other creditor. Asset Ownership. Borrower has good and marketable title to
all of the properties and assets reflected on the balance sheets and financial
statements supplied Bank by Borrower, and all such properties and assets are
free and clear of mortgages, security deeds, pledges, liens, charges, and all
other encumbrances, except as disclosed on Exhibit B attached hereto or
otherwise disclosed to Bank by Borrower in writing and approved by Bank
("Permitted Liens"). To Borrower's knowledge, no default has occurred under any
Permitted Liens and no claims or interests adverse to Borrower's present rights
in its properties and assets have arisen. Discharge of Liens and Taxes. Borrower
has duly filed, paid and/or discharged all taxes or other claims that may become
a lien on any of its property or assets, except to the extent that such items
are being appropriately contested in good faith and an adequate reserve for the
payment thereof is being maintained. Sufficiency of Capital. Borrower is not,
and after consummation of this Agreement and after giving effect to all
indebtedness incurred and liens created by Borrower in connection with the Note
and any other Loan Documents, will not be, insolvent within the meaning of 11
U.S.C. ss. 101, as in effect from time to time. Compliance with Laws. Borrower
is in compliance in all respects with all federal, state and local laws, rules
and regulations applicable to its properties, operations, business, and
finances, including, without limitation, any federal or state laws relating to
liquor (including 18 U.S.C. ss. 3617, et seq.) or narcotics (including 21 U.S.C.
ss. 801, et seq.) and/or any commercial crimes; all applicable federal, state
and local laws and regulations intended to protect the environment; and the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), if
applicable. Organization and Authority. Each corporation, partnership or limited
liability company Borrower and/or guarantor, as applicable, is duly created,
validly existing and in good standing under the laws of the state of its
organization, and has all powers, governmental licenses, authorizations,
consents and approvals required to operate its business as now conducted. Each
corporation, partnership or limited liability company Borrower and/or guarantor,
as applicable, is duly qualified, licensed and in good standing in each
jurisdiction where qualification or licensing is required by the nature of its
business or the character and location of its property, business or customers,
and in which the failure to so qualify or be licensed, as the case may be, in
the aggregate, could have a material adverse effect on the business, financial
position, results of operations, properties or prospects of Borrower or any such
guarantor. No Litigation. There are no pending or threatened suits, claims or
demands against Borrower or any guarantor that: (i) have not been disclosed to
Bank by Borrower in writing, and approved by Bank, or (ii) could reasonably be
expected to have a material adverse effect on Borrower's results of operation,
financial condition or cash flow. ERISA. Each employee pension benefit plan, as
defined in ERISA, maintained by Borrower meets, as of the date hereof, the
minimum funding standards of ERISA and all applicable regulations thereto and
requirements thereof, and of the Internal Revenue Code of 1986, as amended. No
"Prohibited Transaction" or "Reportable Event" (as both terms are defined by
ERISA) has occurred with respect to any such plan.
AFFIRMATIVE COVENANTS. Borrower agrees that from the date hereof and until final
payment in full of the Obligations, unless Bank shall otherwise consent in
writing, Borrower will: Access to Books and Records. Allow Bank, or its agents,
during normal business hours, access to the books, records and such other
documents of Borrower as Bank shall reasonably require, and allow Bank, at
Borrower's expense, to inspect, audit and examine the same and to make extracts
therefrom and to make copies thereof. Accounts Payable Aging. Deliver to Bank,
from time to time hereafter but not less than quarterly within 45 days of the
end of each such period, a detailed payables report including aging of payables
by total, vendor names and addresses, a reconciliation statement, and the
original date of each invoice. Accounts Receivable Aging. Deliver to Bank, from
time to time hereafter but not less than quarterly within 45 days of the end of
each such period, a detailed receivables report including totals, customer names
and addresses, a reconciliation statement, and the original date of each
invoice. Business Continuity. Conduct its business in substantially the same
manner and locations as such
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business is now and has previously been conducted. Certificate of Full
Compliance From Accountant. Deliver to Bank, with the annual financial
statements required herein, a certification by Borrower's independent certified
public accountant that Borrower is in full compliance with the Loan Documents.
Compliance with Other Agreements. Comply with all terms and conditions contained
in this Agreement, and any other Loan Documents, and swap agreements, if
applicable, as defined in the 11 U.S.C. ss. 101, as in effect from time to time.
Estoppel Certificate. Furnish, within 15 days after request by Bank, a written
statement duly acknowledged of the amount due under the Loan and whether offsets
or defenses exist against the Obligations. Insurance. Maintain adequate
insurance coverage with respect to its properties and business against loss or
damage of the kinds and in the amounts customarily insured against by companies
of established reputation engaged in the same or similar businesses including,
without limitation, commercial general liability insurance, workers compensation
insurance, and business interruption insurance; all acquired in such amounts and
from such companies as Bank may reasonably require. Inventory Reports. Deliver
to Bank, from time to time hereafter but not less than quarterly within 45 days
of the end of each such period, an inventory report showing individual values
for raw materials, work-in-progress, finished products and any inventory
obsolescence. Management Letter. Borrower shall deliver to Bank within 120 days
after the close of each fiscal year, its Management Letter, in form and
substance acceptable to Bank, prepared by Borrower's independent certified
public accountant. Maintain Properties. Maintain, preserve and keep its property
in good repair, working order and condition, making all replacements, additions
and improvements thereto necessary for the proper conduct of its business,
unless prohibited by the Loan Documents. Non-Default Certificate From Borrower.
Deliver to Bank, with the Financial Statements required below, a certificate
signed by a principal financial officer of Borrower warranting that no "Default"
as specified in the Loan Documents nor any event which, upon the giving of
notice or lapse of time or both, would constitute such a Default, has occurred
and demonstrating Borrower's compliance with the financial covenants contained
herein. Notice of Default and Other Notices. (a) Notice of Default. Furnish to
Bank immediately upon becoming aware of the existence of any condition or event
which constitutes a Default (as defined in the Loan Documents) or any event
which, upon the giving of notice or lapse of time or both, may become a Default,
written notice specifying the nature and period of existence thereof and the
action which Borrower is taking or proposes to take with respect thereto. (b)
Other Notices. Promptly notify Bank in writing of (i) any material adverse
change in its financial condition or its business; (ii) any default under any
material agreement, contract or other instrument to which it is a party or by
which any of its properties are bound, or any acceleration of the maturity of
any indebtedness owing by Borrower; (iii) any material adverse claim against or
affecting Borrower or any part of its properties; (iv) the commencement of, and
any material determination in, any litigation with any third party or any
proceeding before any governmental agency or unit affecting Borrower with a
claim or demand in excess of $100,000.00; and (v) at least 30 days prior
thereto, any change in Borrower's name or address as shown above, and/or any
change in Borrower's structure. Other Financial Information. Deliver promptly
such other information regarding the operation, business affairs, and financial
condition of Borrower which Bank may reasonably request. Payment of Debts. Pay
and discharge when due, and before subject to penalty or further charge, and
otherwise satisfy before maturity or delinquency, all obligations, debts, taxes,
and liabilities of whatever nature or amount, except those which Borrower in
good faith disputes. Reports and Proxies. Deliver to Bank, promptly, a copy of
all financial statements, reports, notices, and proxy statements, sent by
Borrower to stockholders, and all regular or periodic reports required to be
filed by Borrower with any governmental agency or authority.
NEGATIVE COVENANTS. Borrower agrees that from the date hereof and until final
payment in full of the Obligations, unless Bank shall otherwise consent in
writing, Borrower will not: Change in Fiscal Year. Change its fiscal year.
Change of Control. Make or suffer a change of ownership that effectively changes
control of Borrower from current ownership. Encumbrances. Create, assume, or
permit to exist any mortgage, security deed, deed of trust, pledge, lien, charge
or other encumbrance on any of its assets, whether now owned or hereafter
acquired, other than: (i) security interests required by the Loan Documents;
(ii) liens for taxes contested in good faith; or (iii) Permitted Liens.
Guarantees. Guarantee or otherwise become responsible for obligations of any
other person or persons, other than the endorsement of checks and drafts for
collection in the ordinary course of business. Investments. Purchase any stock,
securities, or evidence of indebtedness of any other person or entity except
investments in direct obligations of the United States Government, other highly
liquid investments graded
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AAA or the equivalent within the United States of America (and with exception
for certain investments held in China and Mexico), and certificates of deposit
of United States commercial banks having a tier 1 capital ratio of not less than
6% and then in an amount not exceeding 10% of the issuing bank's unimpaired
capital and surplus, or other specific investment options, to be determined.
Default on Other Contracts or Obligations. Default on any material contract with
or obligation when due to a third party or default in the performance of any
obligation to a third party incurred for money borrowed. Government
Intervention. Permit the assertion or making of any seizure, vesting or
intervention by or under authority of any governmental entity, as a result of
which the management of Borrower or any guarantor is displaced of its authority
in the conduct of its respective business or such business is curtailed or
materially impaired. Judgment Entered. Permit the entry of any monetary judgment
or the assessment against, the filing of any tax lien against, or the issuance
of any writ of garnishment or attachment against any property of or debts due
Borrower in an amount in excess of $100,000.00 which is not discharged or
execution is not stayed within 45 days of entry. Prepayment of Other Debt.
Retire any long-term debt entered into prior to the date of this Agreement at a
date in advance of its legal obligation to do so. Retire or Repurchase Capital
Stock. Retire or otherwise acquire any of its capital stock in excess of
$1,000,000.00 or pay annual cash dividends in excess of $1,000,000.00 annually.
ANNUAL FINANCIAL STATEMENTS. Borrower shall deliver to Bank, within 120 days
after the close of each fiscal year, audited financial statements reflecting its
operations during such fiscal year, including, without limitation, a balance
sheet, profit and loss statement and statement of cash flows, with supporting
schedules; all on a consolidated basis with respect to Borrower and its
subsidiaries, affiliates and parent or holding company, as applicable, and in
reasonable detail, prepared in conformity with generally accepted accounting
principles, applied on a basis consistent with that of the preceding year. All
such statements shall be examined by an independent certified public accountant
acceptable to Bank. The opinion of such independent certified public accountant
shall not be acceptable to Bank if qualified due to any limitations in scope
imposed by Borrower or any other person or entity. Any other qualification of
the opinion by the accountant shall render the acceptability of the financial
statements subject to Bank's approval other than a consistency exception due to
a change in accounting by a governmental or professional entity required for
Borrower to remain in compliance. Any consolidating financial statements
provided by Borrower shall be management-prepared.
PERIODIC FINANCIAL STATEMENTS. Borrower shall deliver to Bank, within 45 days
after the end of each fiscal quarter, unaudited management-prepared quarterly
financial statements including, without limitation, a balance sheet, profit and
loss statement and statement of cash flows, with supporting schedules; all on a
consolidated basis with respect to Borrower and its subsidiaries, affiliates and
parent or holding company, as applicable, all in reasonable detail and prepared
in conformity with generally accepted accounting principles, applied on a basis
consistent with that of the preceding year. Such statements shall be certified
as to their correctness by a principal financial officer of Borrower and in each
case, if audited statements are required, subject to audit and year-end
adjustments.
TAX RETURNS. Borrower shall deliver to Bank, within 30 days of filing, complete
copies of federal and state tax returns, as applicable, together with all
schedules thereto, each of which shall be signed and certified by Borrower to be
true and complete copies of such returns. In the event an extension is filed,
Borrower shall deliver a copy of the extension within 30 days of filing.
FINANCIAL COVENANTS. Borrower agrees to the following provisions from the date
hereof until final payment in full of the Obligations, unless Bank shall
otherwise consent in writing, and each of the following covenants shall be
calculated on a consolidated basis, using the financial information for
Borrower, its subsidiaries, affiliates and its holding or parent company, as
applicable:
(a) Funded Debt to EBITDA Ratio. Borrower shall, at all times, maintain a
Funded Debt to EBITDA Ratio of not more than 3.50 to 1.00. This covenant shall
be tested quarterly, with EBITDA calculated on a rolling four quarters basis.
"Funded Debt to EBITDA Ratio" shall mean the sum of all Funded Debt divided by
the sum of earnings before interest, taxes, depreciation and amortization.
"Funded Debt" shall mean, as applied to any person or entity, the sum of all
indebtedness for borrowed money (including, without limitation, capital lease
and synthetic lease obligations, subordinated debt
Page 4
(including debt subordinated to the Bank), and unreimbursed drawings under
letters of credit), or any other monetary obligation evidenced by a note, bond,
debenture or other agreement or similar instrument of that person or entity.
(b) Fixed Charge Coverage Ratio. Borrower shall, at all times, maintain a
Fixed Charge Coverage Ratio of not less than 1.50 to 1.00. This covenant shall
be calculated at Borrower's fiscal year end and quarterly, on a rolling four
quarters basis. "Fixed Charge Coverage Ratio" shall mean the sum of earnings
before interest, taxes, depreciation and amortization plus other non-cash
expenses minus dividends, cash taxes paid, unfunded capital expenditures (i.e.,
capital expenditures not funded with bank debt or other forms of equipment
financing) and non-cash income divided by the sum of current maturities of
long-term debt plus current maturities of capital lease obligations plus
interest expense.
(c) Collateral Coverage Ratio. Borrower shall, at all times, maintain a
ratio of (a) Total Borrower Accounts plus Total Borrower Inventory to (b) total
outstanding Obligations under the Note, of not less than 1.00 to 1.00. This
covenant shall be tested quarterly.
"Total Borrower Accounts" shall mean all Accounts owing to Borrower, less
intercompany accounts receivables, for the tested period. "Accounts" has the
--------
meaning set forth in the Uniform Commercial Code (or any successor statute) as
presently and hereafter enacted under the law of the State of New York (the
"Code"), but shall not include Accounts owing to any subsidiary or affiliate of
Borrower, or any other party other than Borrower.
"Total Borrower Inventory" shall mean all Inventory owned by Borrower and
located within the United States of America for the tested period. "Inventory"
---------
has the meaning set forth in the Code, but shall not include: (a) Inventory
owned by any subsidiary or affiliate of Borrower, or any other party other than
Borrower; and (b) Inventory that is not located at a location identified and
certified by Borrower on the Borrower Information Certificate as being within
the United States of America.
ADDITIONAL COVENANTS. Borrower agrees to the following provisions from the date
hereof until final payment in full of the Obligations, unless Bank shall
otherwise consent in writing, and each of the following covenants shall be
calculated on a consolidated basis, using the financial information for
Borrower, its subsidiaries, affiliates and its holding or parent company, as
applicable:
(a) Limitation on Debt. Borrower and each guarantor shall not, directly or
indirectly, create, incur, assume or become liable for any additional
indebtedness, whether contingent or direct.
(b) Deposit Relationship. Borrower shall maintain its primary depository
account and cash management account with Bank.
(c) Leases. Borrower shall not incur, create, or assume any direct or
indirect liability for the payment of rent or otherwise, under any lease or
rental arrangement (excluding capitalized leases) if immediately thereafter the
sum of such lease or rental payments to be made by Borrower during any 12-month
period is increased by $250,000.00 in the aggregate.
(d) Loans and Advances. Borrower shall not, during any fiscal year, make
loans or advances, excepting ordinary course of business travel and expense
advances, to any person or entity, which total more than $250,000.00 in the
aggregate.
(e) Permitted Acquisitions. Borrower shall be permitted to make an
acquisition of assets or a targeted entity (collectively "Permitted
Acquisitions") provided that (i) the acquisition consideration for any single
Permitted Acquisition as well as the aggregate acquisition consideration for all
Permitted Acquisitions over the term of the facility shall be subject to certain
limitations as referenced below, (ii) no Default exists or would exist after
giving effect thereto, and (iii) the Borrower has complied with all
documentation requirements for a Permitted Acquisition, including but not
limited to financial statements of the target entity to be acquired, copy of the
relevant purchase agreement, and a pro forma balance sheet and income statement
of the Borrower after giving effect to the proposed acquisition. Advances for
Page 5
Permitted Acquisitions shall not exceed $8,000,000.00 for an individual
transaction, or $15,000,000.00 in the aggregate during any twelve month period.
The target company shall be in the same line of business as Borrower, and shall
involve assets and operations domiciled in the United States, or in the case of
a foreign acquisition, the business to be acquired shall be acquired by the
Borrower or a guarantor. The Bank shall, in any event, receive an enforceable
first priority security interest, in Bank's sole judgment, in all assets
acquired by Borrower or such guarantor. With regard to foreign acquisitions
only, during the term of the Note, Advances for Permitted Acquisitions with
respect to which Bank shall not receive an enforceable first priority security
interest, in Bank's sole judgment, shall not exceed $5,000,000.00.
CONDITIONS PRECEDENT. The obligations of Bank to make the loan and any advances
pursuant to this Agreement are subject to the following conditions precedent:
Letter of Credit Documents. Receipt by Bank of all documents required by Bank in
connection with Letters of Credit, including without limitation, applications
therefor, all in form satisfactory to Bank. Additional Documents. Receipt by
Bank of such additional supporting documents as Bank or its counsel may
reasonably request.
IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above,
have caused this Agreement to be executed under seal.
Borrower
Lakeland Industries, Inc.
CORPORATE By: /s/Xxxxxxxxxxx X. Xxxx
SEAL --------------------------------------------
Xxxxxxxxxxx X. Xxxx, Chief Executive Officer
Bank
Wachovia Bank, National Association
CORPORATE By: /s/Xxxxxx Xxxxx
SEAL --------------------------------------------
Xxxxxx Xxxxx, Vice President
Page 6
State of New York
City/County of _________________
Corporate Acknowledgment
On the _____ day of _______________ in the year 2005 before me, the
undersigned, a Notary Public in and for said State, personally appeared
Xxxxxxxxxxx X. Xxxx personally known to me or proved to me on the basis of
satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed
to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their capacity(ies), and that by his/her/their signature(s) on
the instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.
, Notary Public
---------------------------------------
Notary Seal
-------------------------------------------------------
(Printed Name of Notary)
My Commission Expires:
--------------------------------
Page 7
State of New York
County of _________________
Bank Acknowledgment
On the _____ day of _______________ in the year 2005 before me, the
undersigned, a Notary Public in and for said State, personally appeared Xxxxxx
Xxxxx personally known to me or proved to me on the basis of satisfactory
evidence to be the individual(s) whose name(s) is (are) subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the
instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.
In witness whereof I hereunto set my hand.
, Notary Public
---------------------------------------
Notary Seal
-------------------------------------------------------
(Printed Name of Notary)
My Commission Expires:
--------------------------------
Page 8
EXHIBIT A
NON-DEFAULT CERTIFICATE
In accordance with the terms of the Loan Documents dated July 7, 2005 by and
between Wachovia Bank, National Association and Lakeland Industries, Inc.
("Borrower"), I hereby certify that:
1. I am the Chief Financial Officer of Borrower;
2. The enclosed financial statements are prepared in accordance with
generally accepted accounting principles;
3. No Default (as defined in the Loan Documents) or any event which, upon the
giving of notice or lapse of time or both, would constitute such a
Default, has occurred.
4. Borrower is in compliance with the Financial Covenant(s) set forth in the
Loan Documents, as demonstrated by the calculations contained in the
Covenant Compliance Certificate attached hereto as Schedule 1.
/s/Xxxx Xxxxxxxx
------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
Page 9
SCHEDULE 1
COVENANT COMPLIANCE CERTIFICATE
Borrower Name: Lakeland Industries, Inc.
For the fiscal ________________________ ended ____________________
ALL CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN
IN THE LOAN DOCUMENTS.
COVENANT ACTUAL REQUIRED
-------- ------ --------
Funded Debt to EBIDTA not more than _____ to 1.00
(a) Funded Debt
-------
(b) net income
-------
(c) interest
-------
(d) taxes
-------
(e) depreciation
-------
(f) amortization
-------
(a) divided by the sum of
(b) plus (c) plus (d) plus (e)
plus (f) equals Funded Debt to EBIDTA of ______ Compliance? Yes No
Leases 12 month aggregate
12 month aggregate increase: ______ increase not to exceed $________
Compliance? Yes No
Loans and Advances ______ Not to Exceed Aggregate of $______
Compliance? Yes No
CALCULATIONS FOR ROLLING FOUR QUARTERS COVENANT
-----------------------------------------------
COMPLIANCE FOR THE QUARTER ENDED ________________
Borrower Name: Lakeland Industries, Inc.
INSTRUCTIONS: THIS IS A ROLLING FOUR-QUARTER CALCULATION. THE COLUMN LABELED Q1
SHOULD CONTAIN INFORMATION FOR THE MOST RECENTLY ENDED QUARTER (I.E., MATCHES
THE DATE ABOVE). Q2 SHOULD CONTAIN INFORMATION FOR THE IMMEDIATELY PRECEDING
QUARTER-END, AND SO ON FOR Q3 AND Q4.
MOST RECENT QUARTER PRECEDING THREE QUARTERS
---- ------ ------- --------- ----- --------
COVENANT: Q1 Q2 Q3 Q4 TOTAL
--------
Fixed Charge Coverage Ratio
---------------------------
(a) net income
----- ----- ----- ----- -----
(b) interest
----- ----- ----- ----- -----
(c) taxes
----- ----- ----- ----- -----
(d) depreciation
----- ----- ----- ----- -----
(e) amortization
----- ----- ----- ----- -----
(f) other non-cash
expenses
----- ----- ----- ----- -----
(g) dividends
----- ----- ----- ----- -----
(h) cash taxes
----- ----- ----- ----- -----
(i) unfunded capex
----- ----- ----- ----- -----
(j) non-cash income
----- ----- ----- ----- -----
(k) CMLTD*
----- ----- ----- ----- -----
(l) CMCLO**
----- ----- ----- ----- -----
(m) interest expense
----- ----- ----- ----- -----
Fixed Charge Coverage Ratio equals the sum of the Totals of (a) plus (b) plus
(c) plus (d) plus (e) plus (f) minus (g) minus (h) minus (i) minus (j) divided
by the sum of the Totals of (k) plus (l) plus (m).
Fixed Charge Coverage Ratio for period is ______ to 1.00.
The required Fixed Charge Coverage Ratio is not less than 1.50 to 1.00.
Compliance? ___Yes ___No
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* Current Maturities of Long Term Debt
** Current Maturities of Capital Lease Obligations
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CALCULATIONS FOR THE COLLATERAL COVERAGE RATIO
COMPLIANCE FOR THE QUARTER ENDED____________________
Borrower Name: Lakeland Industries, Inc.
Inventory (US Based) Category Amount
Borrower Owned
Disposables
-----------
Contractors WIP-US
---------
Warehouse FG
---------
Warehouse RM
---------
Contractor RM-US
---------
Samples & Misc FG
---------
WIP Cutting Room
---------
WIP Snap Dept
---------
(a) Sub-Total
---------
Gloves & Sleeves
----------------
Warehouse FG
---------
Warehouse RM
---------
WIP Decatur
---------
(b) Sub-Total
---------
Chemical Suits
--------------
Warehouse FG
---------
Warehouse RM
---------
WIP Decatur
---------
(c) Sub-Total
---------
Fire Suits & Wovens
-------------------
Warehouse FG
---------
Warehouse RM
---------
WIP@Uniland
----------- ---------
(d) Sub-total
---------
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(e) Total (a+b+c+d)
---------
Accounts Receivable Amount
Borrower Owned Receivables
---------
Less Intercompany Receivables ( )
---------
(f) Net Borrower Owned Receivables
---------
(g) Total Facility Outstandings
---------
The sum of the totals of (e) plus (f) divided by (g) equals a Collateral
Coverage Ratio of ________. The required collateral coverage ratio is not less
than 1.00 to 1.00. Compliance? ____Yes ______No
The undersigned hereby certifies that the values of the Inventory and Accounts
Receivable referenced above as of the fiscal period ended _______________ are
true, accurate and complete as of this __ day of ________, 20__.
Lakeland Industries, Inc.
By: /s/Xxxx Xxxxxxxx
------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
Page 4
EXHIBIT B
PERMITTED LIENS
Page 5
