On July 29, 2022, Greystone Logistics, Inc., Greystone Manufacturing, L.L.C. and International Bank of Commerce entered into an Amended and Restated Loan Agreement. The IBC Loan Agreement provides for the Lender to make to the Borrowers (i) a term loan in the amount of $7,854,707.54 to consolidate all existing term loans in the aggregate amount of $2,669,891.67 with Lender, extend credit in the amount of $3,271,986.98 to pay off a note payable to Robert B. Rosene, Jr. and extend additional credit to fund the purchase in the amount of $1,912,828.89 of the equipment subject to the iGPS Logistics, LLC, leases and (ii) an advancing term loan facility whereby Greystone may obtain advances up to the aggregate amount of $7,000,000 (items i and ii referred to collectively as “Term Loans”) (iii) a renewal of the revolving loan with an increase of $2,000,000 (the “Revolving Loan”). The exact amount which can be borrowed under the Revolving Loan from time to time is dependent upon the amount of the borrowing base but can in no event exceed $6,000,000.

The Revolving Loan bears interest at the higher per annum rate of (i) the New York Prime Rate, plus 0.5%, and (ii) 4.5%. The Borrowers are required to pay all interest accrued on the outstanding principal balance of the Revolving Loan beginning August 29, 2022 and continuing on the 29th of each month thereafter until July 29, 2024. The Borrowers are required to pay the outstanding principal balance of the Revolving Loan on July 29, 2024.

Any principal on the Revolving Loan that is prepaid by the Borrowers may be reborrowed by the Borrowers. The Term Loans bear interest at the higher per annum rate of (i) the New York Prime Rate, plus 0.5%, and (ii) 4.5%. The Borrowers are required to make equal payments of principal and interest in an amount sufficient to amortize the principal balance of the Term Loan over seven years, commencing on August 29, 2022 and continuing on the 29th day of each month thereafter until July 29, 2027.

The IBC Loan Agreement requires the Borrowers to pay aggregate fees totaling $35,452.45 to the Lender on July 29, 2022. The IBC Loan Agreement includes customary representations and warranties and affirmative and negative covenants. Some of the noteworthy covenants include (i) requiring the Borrowers to maintain a debt service coverage ratio of 1:25 to 1:00 and a funded debt to EBIDA ratio of 3:00 to 1:00, (ii) subject to certain exceptions, limiting the Borrowers' combined capital expenditures on fixed assets to $2,000,000 per year other than those expenditures for equipment additions to meet and fulfill customer requirements or designs, (iii) prohibiting Greystone Logistics, without the Lender's prior written consent, from declaring or paying any dividends, redemptions, distributions and withdrawals (as applicable) with respect of its equity interests, other than distributions to holders of its preferred stock in an amount not to exceed $500,000 in any fiscal year, (iv) subject to certain exceptions, prohibiting the incurrence of additional indebtedness by the Borrowers, and (v) requiring the Borrowers to cause, permit or suffer any change of control.

The foregoing list of covenants is not exhaustive and there are several other covenants contained in the IBC Loan Agreement.