Exhibit 10.1.3

 

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August 31, 2018

 

Mr. Jeffrey Barocas

Ocean Bio-Chem, Inc.

4041 S.W. 47 Ave.

Ft. Lauderdale, FL 33314

 

Dear Jeff:

 

The purpose of this letter is to document an agreement between Ocean Bio-Chem,
Inc. and Regions Bank regarding specific terms and conditions relating to the
renewal of a $6,000,000 line of credit. The terms presented below will supersede
any conflicting language in the Promissory Note (Note), Business Loan Agreement
(BLA), and Commercial Security Agreement (Security Agreement), each to be dated
August 31, 2018. Capitalized terms not defined in this letter will have the
meanings ascribed to them in the Note, BLA, or the Security Agreement, as
applicable.

 

ALL DOCUMENTS

 

●Change in Ownership-Regions agrees that a change in ownership of 25% or more
will not constitute an event of default. Instead, a default will be triggered in
the event that the majority shareholder’s ownership drops below 50% of all
outstanding shares.

 

BUSINESS LOAN AGREEMENT (BLA)

 

●Hazardous Substances. Regions agrees that clauses (1), (2) and (3) of the
provision Hazardous Substances shall read as follows: Except as disclosed to and
acknowledged by Lender in writing, Borrower represents and warrants that: (1)
During the period of Borrower’s ownership of the Collateral, there has been no
use, generation, manufacture, storage, treatment, disposal, release or
threatened release of any Hazardous Substance by any person on, under, about or
from any of the Collateral except in material compliance with Environmental
Laws. (2) Borrower has no knowledge of, or reason to believe that there has been
(a) any breach or violation of any Environmental Laws; (b) any use, generation,
manufacture, storage, treatment, disposal, release or threatened release of any
Hazardous Substance on, under, about or from the Collateral by any prior owners
or occupants of any of the Collateral except in material compliance with
Environmental Laws; or (c) any actual or threatened litigation or claims of any
kind by any person relating to such matters. (3) Neither Borrower nor any
tenant, contactor, agent or other authorized user of any of the Collateral shall
use, generate, manufacture, store, treat, dispose of or release any Hazardous
Substance on, under, about or from any of the Collateral except in material
compliance with Environmental Laws; and any such activity shall be conducted in
material compliance with all applicable federal, state, and local laws,
regulations, and ordinances, including without limitation all Environmental
Laws.

 

   

 

 

●Environmental Compliance and Reports. Regions agrees that the provision
Environmental Compliance and Reports shall read as follows: Borrower shall
comply in all material respects with any and all Environmental Laws; not cause
or permit to exist, as a result of an intentional or unintentional action or
omission on Borrower’s part or on the part of any third party, on property owned
and/or occupied by Borrower, any environmental activity where damage may result
to the environment, unless such environmental activity is pursuant to an in
material compliance with the conditions of a permit issued by the appropriate
federal, state or local governmental authorities or otherwise in material
compliance with Environmental Laws; shall furnish to Lender promptly and in any
event within thirty (30) days after receipt thereof a copy of any notice,
summons, lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional or
unintentional action or omission on Borrower’s part in connection with any
environmental activity whether or not there is damage to the environment and/or
other natural resources.

 

●Indebtedness and Liens. Regions agrees that the provision Indebtedness and
Liens shall read as follows: (1) Except for trade debt incurred in the normal
course of business, indebtedness otherwise disclosed to Lender and indebtedness
to Lender contemplated by this Agreement, create, incur or assume indebtedness
for borrowed money, including capital leases, (2) sell, transfer or lease any of
Borrower’s assets (except for inventory sold or accounts collected in the
ordinary course of business, or as otherwise provided for in this Agreement),
(3) mortgage, assign, pledge, grant a security interest in, or encumber any of
Borrower’s assets (except as allowed as Permitted Liens), or (3) sell with
recourse any of Borrower’s accounts, exceptto Lender.

 

●Subsidiaries and Affiliates of Borrower. Regions agrees that the provision of
Subsidiaries and Affiliates of Borrower shall be renamed “Subsidiaries of
Borrower” and the phrase “and affiliates” and the phrase “or affiliates” deleted
therefrom.

 

●EBITDA. Under Additional Definitions, EBITDA should mirror the EBITDA
measurement found within the definition of Fixed Charge Coverage Ratio (Minimum)
which reads as follows: defined as Net Income before taxes and depreciation plus
amortization plus interest expense plus non-recurring and/or non-cash losses and
expenses minus nonrecurring and/or non-cash gains and income.

 

●Eligible Accounts. Regions agrees that the second clause under this section
(related to exclusions to eligible accounts) should read as follows “Accounts
with respect to which the Account Debtor is a subsidiary of, or affiliated with
Borrower or its officers or its directors”.

 

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●Eligible Inventory. Regions agrees that the second clause under this section
(related to exclusions to eligible inventory) should read as follows “Inventory
which Lender reasonably deems to be obsolete, unsaleable, damaged, defective, or
unfit for further processing”.

 

SECURITY AGREEMENT

 

●Enforceability of Collateral. Regions agrees that second sentence of the
provision Enforceability of Collateral shall read as follows: There shall be no
setoffs or counterclaims against any of the Collateral, and no agreement shall
have been made under which any deductions or discounts many be claimed
concerning the Collateral except those deductions or discounts in the ordinary
course of business and those disclosed to Lender in writing.

 

●Transactions Involving Collateral. Regions agrees that the first sentence of
the provision Transactions Involving Collateral shall read as follows: Except
for inventory sold or accounts collected in the ordinary course of Granter’s
business, or as otherwise provided for in this Agreement, Granter shall not
sell, offer to sell, or otherwise transfer of dispose of the Collateral. Grantor
shall not pledge, mortgage, encumber or otherwise permit the Collateral to be
subject to any lien, security interest, encumbrance, or charge, other than the
security interest provided for in this Agreement and Permitted Liens, without
the prior written consent of Lender.

 

●Title. Regions agrees that the first sentence of the provision Title shall read
as follows: Granter represents and warrants to Lender that Granter holds good
and marketable title to the Collateral, free and clear of all liens and
encumbrances except for the lien of this Agreement and Permitted Liens.

 

●Hazardous Substances. Regions agrees that the first sentence of the provision
Hazardous Substances shall read as follows: Grantor represents and warrants that
the collateral never has been, and never will be so long as this Agreement
remains a lien on the Collateral, used in violation of any Environmental Laws or
for the generation, manufacture, storage, transportation, treatment, disposal,
release or threatened release of any Hazardous Substance except in material
compliance with Environmental Laws.

 

Sincerely,

 

/s/ Draper L. Stanford   Draper L. Stanford   Vice President   Regions Bank  

 

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