LAKE Lakeland Industries Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

 

 

Date of Report (Date of earliest event reported): June 3, 2015

__________________________________________

 

Lakeland Industries, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware	0-15535	13-3115216
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

 

3555 Veterans Memorial Highway, Suite C, Ronkonkoma, New York 11779-7410

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: (631) 981-9700

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Item 1.01.

Entry into a Material Definitive Agreement.

 

On June 3, 2015, Lakeland Industries, Inc. (the “Company”) and its wholly-owned subsidiary, Lakeland Protective Wear Inc. (together with the Company, the “Borrowers”), entered into a Second Amendment (the “Amendment”) to the Loan and Security Agreement, dated as of June 28, 2013, with AloStar Bank of Commerce (as amended, the “Loan Agreement”) relating to their senior revolving credit facility. The primary purposes of the Amendment are to (i) modify the definition of Permitted Asset Disposition to provide the Company with the ability to sell the stock of the Company’s wholly-owned Brazilian subsidiary, Lake Brasil Indústria e Comércio de Roupas e Equipamentos de Proteção Individual Ltda. (“Lakeland Brazil”), and (ii) allow the Borrowers to transfer funds to Lakeland Brazil for the specific purposes of settling arbitration claims, paying contractual expenses, and paying expenses incurred in connection with a sale of the stock of Lakeland Brazil so long as, after giving effect to any such transfer, the amount Borrowers have as excess availability under the revolver loans, excluding the $15 million facility cap for this purpose only, calculated pursuant to and under the Loan Agreement, is at least $3 million. Also, as part of the Amendment, Lender consented to the sale of the Company’s corporate offices in Ronkonkoma, New York on the condition that the net cash proceeds from the sale in the amount of at least $450,000 are used by the Company to pay down the Borrower’s obligations to Lender under the Loan Agreement.

 

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, which is attached hereto as Exhibit 10.1 and incorporated herein by reference. The agreements entered into in connection with the senior revolving credit facility have been previously filed with, and are described in, the Company’s Current Reports on Form 8-K dated June 28, 2013 and March 31, 2015.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

10.1

Second Amendment, dated as of June 3, 2015, to Loan and Security Agreement, dated as of June 28, 2013 and amended on March 31, 2015, by and among Lakeland Industries, Inc. and Lakeland Protective Wear Inc., as borrowers, and Alostar Bank of Commerce.

 

 

 

 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

	LAKELAND INDUSTRIES, INC.
	/s/ Christopher J. Ryan
	Christopher J. Ryan
	Chief Executive Officer &
	President

 

 

Dated: June 8, 2015

 

EXHIBIT INDEX

 

Exhibit

Number		Description
10.1		Second Amendment, dated as of June 3, 2015, to Loan and Security Agreement, dated as of June 28, 2013 and amended on March 31, 2015, by and among Lakeland Industries, Inc. and Lakeland Protective Wear Inc., as borrowers, and Alostar Bank of Commerce.

 

 

 

 

 

 

 

 

Exhibit 10.1

 

SECOND AMENDMENT
TO
LOAN AND SECURITY AGREEMENT

 

THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Agreement”) is made and entered into as of June 3, 2015 by and among LAKELAND INDUSTRIES, INC., a Delaware corporation (“Lakeland US”), LAKELAND PROTECTIVE WEAR INC., a Canadian corporation (“Lakeland Canada”; Lakeland US and Lakeland Canada are sometimes referred to herein individually as a “Borrower” and collectively as “Borrowers”), and ALOSTAR BANK OF COMMERCE, a state banking institution incorporated or otherwise organized under the laws of the State of Alabama (“Lender”).

 

W I T N E S S E T H:

 

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

 

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

 

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

 

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

 

2.                Sale of Stock of Lakeland Brazil3.. The Loan Agreement is hereby amended by deleting clause (d) of the definition of “Permitted Asset Disposition” set forth in Section 1.1 of the Loan Agreement and substituting the following in lieu thereof:

 

(d) sale of the stock or assets of Lakeland Brazil, the assets of QingDao Lakeland Protective Products, Co., Ltd., and the assets held for sale in India, in any such case on terms and conditions reasonably acceptable to Lender.

 

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

 

9.14           Lakeland Brazil. Without limiting the generality of anything contained in Section 9.1 or Section 9.9, loan, invest, distribute or otherwise transfer any money or any other assets to Lakeland Brazil; provided, however, that Borrowers may transfer to Lakeland Brazil a net amount of up to $5,400,000 in the aggregate from and after June 3, 2015 for purposes of settling arbitration claims, paying contractual expenses and paying expenses incurred in connection with sale of the stock of Lakeland Brazil so long as, after giving effect to any such transfer, Availability is at least $3,000,000 (it being agreed that, solely for the purposes of this paragraph, Availability shall be determined without giving effect to the Maximum Revolver Facility Amount).

 

 

4.                New Headquarters Location; Sale of Real Estate. Borrowers have informed Lender that Borrowers intend to sell the real property located at 701 Koehler Avenue, Ronkonkoma, New York 11779 (the “Current Headquarters”) and establish a new corporate headquarters at 3555 Veterans Memorial Highway, Suite C, Ronkonkoma, New York 11779 (the “New Headquarters”). Accordingly, the Loan Agreement is hereby amended by deleting the address for the Current Headquarters set forth in Item 17 of the Terms Schedule and Schedules 5.1(a), 5.1(b) and 7.10 of the Disclosure Schedule and inserting the address for the New Headquarters in lieu thereof. Lender hereby consents to the sale of the Current Headquarters so long as the net proceeds thereof in an amount of at least $450,000 are paid directly to Lender for application to the Obligations.

 

5.                Amendment Fee; Costs and Expenses. In consideration of the accommodations made by Lender hereunder, Borrowers agree to pay to Lender (a) on the date hereof, an amendment fee in the amount of $20,000, and (b) on demand, all costs and expenses of Lender in connection with the preparation, execution, delivery and enforcement of this Agreement and the other Loan Documents and any other transactions contemplated hereby and thereby, including, without limitation, the fees and out-of-pocket expenses of legal counsel to Lender. Without limiting any provision of the Loan Agreement, Borrowers hereby agree that Lender may charge any amount due under this paragraph to Borrowers’ loan account as a Revolver Loan.

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

[Remainder of Page Intentionally Left Blank]

 

 

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

 

 

	BORROWERS:
	LAKELAND INDUSTRIES, INC.
	By:	/s/ Gary Pokrassa
		Name:	Gary Pokrassa
		Title:	Chief Financial Officer
	[SEAL]
	LAKELAND PROTECTIVE WEAR INC.
	By:	/s/ Gary Pokrassa
		Name:	Gary Pokrassa
		Title:	Chief Financial Officer
	[SEAL]
	Accepted in Atlanta, Georgia:
	LENDER:
	ALOSTAR BANK OF COMMERCE
	By:	/s/ Carlos E. Chang
		Name:	Carlos E. Chang
		Title:	Vice President

 

 

 

Second Amendment to Loan and Security Agreement

 

ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR

 

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

 

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

 

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

 

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

 

 

[Remainder of Page Intentionally Left Blank]

 

 

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

 

	LAIDLAW ADAMS & PECK INC.
	By:	/s/ Gary Pokrassa
		Name:	Gary Pokrassa
		Title:	Chief Financial Officer