Document:

Unassociated Document

EXHIBIT 10.25

 

CREDIT AGREEMENT

 

between

 

BOVIE MEDICAL CORPORATION

 

and

 

PNC BANK, NATIONAL ASSOCIATION

 

Dated: October 31, 2011

 

 

Relating to

 

$4,000,000 Pinellas County Industrial Development Authority 

Industrial Development Revenue Bonds (Bovie Medical Corporation Project) Series 2008

 

 

	 	This instrument was prepared by:
	 	 
	 	Steven D. Katz
	 	Akerman Senterfitt
	 	420 South Orange Avenue, Suite 1200
	 	Orlando, Florida 32801

 

  

  

  

 

TABLE OF CONTENTS

 

	  	  	  	
Page

	  	  	  	  
	
1.

	
THE OBLIGATIONS OF THE BANK

	
1

	  	
1.1.

	
Purchase of the Bonds

	
1

	  	  	  	  
	
2.

	
THE OBLIGATIONS OF THE COMPANY

	
2

	  	
2.1.

	
Obligations to the Bank

	
2

	  	
2.2.

	
Additional Payments

	
2

	  	
2.3.

	
Capital Adequacy

	
2

	  	
2.4.

	
Determination of Taxability

	
3

	  	
2.5.

	
Waivers

	
3

	  	
2.6.

	
Enforcement of Agreement

	
3

	  	
2.7.

	
Additional Waiver

	
3

	  	
2.8.

	
Benefit of Credit Agreement

	
4

	  	
2.9.

	
Subrogation

	
4

	  	
2.10.

	
Suspension of LIBOR

	
4

	  	  	  	  
	
3.

	
REPRESENTATIONS AND WARRANTIES

	
4

	  	
3.1.

	
Existence; Power.

	
4

	  	
3.2.

	
Organizational Power; Authorization

	
4

	  	
3.3.

	
Governmental Approvals; No Conflicts

	
5

	  	
3.4.

	
Financial Statements

	
5

	  	
3.5.

	
Litigation and Environmental Matters

	
5

	  	
3.6.

	
Compliance with Laws and Agreements

	
6

	  	
3.7.

	
Investment Company Act, Etc

	
6

	  	
3.8.

	
Taxes

	
6

	  	
3.9.

	
Margin Regulations

	
6

	  	
3.10.

	
ERISA

	
6

	  	
3.11.

	
Ownership of Property

	
7

	  	
3.12.

	
Disclosure

	
7

	  	
3.13.

	
Labor Relations

	
7

	  	
3.14.

	
Non-Controlled Person

	
7

	  	
3.15.

	
Insolvency

	
8

	  	
3.16.

	
OFAC

	
8

	  	
3.17.

	
Patriot Act

	
8

	  	  	  	  
	
4.

	
AFFIRMATIVE COVENANTS

	
8

	  	
4.1.

	
Financial Statements and Other Information

	
8

	  	
4.2.

	
Notices of Material Events

	
9

	  	
4.3.

	
Existence; Conduct of Business

	
10

	  	
4.4.

	
Compliance with Laws, Etc

	
10

	  	
4.5.

	
Payment of Obligations

	
10

	  	
4.6.

	
Books and Records

	
10

	  	
4.7.

	
Visitation, Inspection, Etc

	
10

	  	
4.8.

	
Maintenance of Properties; Insurance

	
10

 

  

- i -

  

 

	  	
4.9.

	
Publicly Traded

	
11

	  	
4.10.

	
Use of Bond Proceeds

	
11

	  	
4.11.

	
Subsidiaries

	
11

	  	
4.12.

	
Non-Controlled Person

	
11

	  	  	  	  
	
5.

	
NEGATIVE COVENANTS

	
11

	  	
5.1.

	
Indebtedness

	
11

	  	
5.2.

	
Fundamental Changes

	
11

	  	
5.3.

	
Investments, Loans, Etc

	
11

	  	
5.4.

	
Sale/Leaseback of Property

	
11

	  	
5.5.

	
Guarantees

	
11

	  	
5.6.

	
Business Change

	
11

	  	
5.7.

	
Fiscal Year

	
12

	  	  	  	  
	
6.

	
FINANCIAL COVENANTS

	
12

	  	
6.1.

	
Fixed Charge Coverage Ratio

	
12

	  	
6.2.

	
Tangible Net Worth

	
12

	  	  	  	  
	
7.

	
EVENTS OF DEFAULT

	
12

	  	
7.1.

	
Events of Default

	
12

	  	  	  	  
	
8.

	
DEFINITIONS

	
15

	  	  	  	  
	
9.

	
MISCELLANEOUS

	
19

	  	
9.1.

	
Amendments

	
19

	  	
9.2.

	
Survival of Representations and Warranties

	
19

	  	
9.3.

	
Expenses

	
20

	  	
9.4.

	
Set-off

	
20

	  	
9.5.

	
Notices

	
20

	  	
9.6.

	
Satisfaction Requirement

	
21

	  	
9.7.

	
Binding Effect; Assignment

	
21

	  	
9.8.

	
Governing Law

	
21

	  	
9.9.

	
Counterparts.

	
21

	  	
9.10.

	
Waiver of Jury Trial

	
21

	  	
9.11.

	
Severability

	
21

	  	
9.12.

	
Confidentiality

	
22

	  	
9.13.

	
Waiver of Effect of Corporate Seal

	
22

	  	  	  	  
	
10.

	
TERM

	
22

	  	  	  	  
	
11.

	
COUNTERPARTS

	
22

	  	  	  	  
	
12.

	
NON-WAIVER

	
22

	  	  	  	  
	
13.

	
ADDITIONAL COLLATERAL

	
22

	  	  	  	  
	
14.

	
TERMINATION

	
23

 

  

- ii -

  

 

ANNEX I            -   SUBSIDIARIES OF THE COMPANY

  

- iii -

  

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT (this "Agreement") dated October 31, 2011. is made by BOVIE MEDICAL CORPORATION, a Delaware corporation (the "Company"), in favor of PNC BANK, NATIONAL ASSOCIATION, a national banking association (the "Bank").

 

WHEREAS, the Company has previously requested the Pinellas County Industrial Development Authority, doing business as the Pinellas County Economic Development Authority (the "Issuer"), to issue $4,000,000 in aggregate principal amount of its Industrial Development Revenue Bonds (Bovie Medical Corporation Project) Series 2008 (the "Bonds"), pursuant to an Indenture of Trust dated as of November 1, 2008 (the "Indenture"), by and between the Issuer and The Bank of New York Mellon, as trustee (the "Trustee"), as amended and restated;

 

WHEREAS, the proceeds of the sale of the Bonds were loaned to the Company pursuant to a Loan Agreement, dated as of November 1, 2008 (the "Loan Agreement") as amended and restated, by and between the Issuer and the Company, in order to enable the Company to finance the construction and equipping of the Company's facilities in Clearwater, Florida; and

 

WHEREAS, the Bank has agreed to purchase the Bonds, and as a condition to such purchase, the Bank has required that the Company enter into this Agreement.

 

NOW, THEREFORE, in consideration of $10.00 and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company hereby agrees as follows;

 

1.         THE OBLIGATIONS OF THE BANK.

 

1.1.      Purchase of the Bonds. The Bank hereby agree to purchase the Bonds on the Date of Issuance, on the terms and subject to the conditions hereinafter set forth:

 

(a)         (i) the Issuer shall have duly adopted and there shall be in full force and effect such resolution as, in the opinion of Bond Counsel, shall be necessary in connection with the transactions contemplated hereby; (ii) the Bank shall have received an original of all documents, certificates and opinions as counsel for the Bank may reasonably request to evidence compliance by the Company and the Issuer with the legal requirements and the due performance or satisfaction by the Company and the Issuer, at or prior to the Date of Issuance, of all agreements then required to be performed and all conditions then required to be satisfied by the Company and the Issuer at the Date of Issuance; (iii) the original executed Bond; (iv) payment of 0.50% of the principal amount of the Bonds, as a structuring fee due to the Bank, and expenses of the Bank, including fees and expenses of counsel to the Bank, due in connection with the purchase and the sale of the Bonds to the Bank; and (iv) evidence satisfactory to the Bank and its counsel of (a) the cancellation of the letter of credit issued by RBC Bank, (b) the release by RBC Bank of the mortgage and security interest on all real and personal property held by RBC Bank and (c) the redemption of a portion of the outstanding principal amount of the Bonds in order that the remaining principal amount on the Date of Issuance is $3,560,000.

 

  

- 1 -

  

 

2.         THE OBLIGATIONS OF THE COMPANY. The obligations of the Company hereunder are as follows:

 

2.1.  Obligations to the Bank. The Company hereby unconditionally, irrevocably and absolutely agrees to make the prompt and full payment of all Payment Obligations (as defined below) owed to the Bank. For purposes of this Agreement, "Payment Obligations" shall include all payment obligations, liabilities and undertakings of the Company to the Bank pursuant to the Operative Documents, whether now existing or hereafter arising, irrespective of their nature, whether direct or indirect, absolute or contingent, as maker, drawer, guarantor, surety, endorser or otherwise, either individually or jointly or severally with any other Person or Persons, with interest thereon at the rate or rates as provided in the Operative Documents or at the maximum rate allowed from time to time by law, whichever is less, and all renewals or extensions in whole or in part of any of said payment obligations, liabilities, or undertakings, including any and all damages, losses, costs, fees and expenses of every kind and description suffered or incurred by the Bank arising in any manner out of or in any way connected with or growing out of said obligations, including, without limitation, all attorneys' fees, costs and expenses of collection.

 

The Company has secured the Payment Obligations by providing to the Trustee for the benefit of the Bank, as holder of all of the Bonds, a first priority Mortgage and Security Agreement encumbering its real property located at 5115 Ulmerton Road. Clearwater, Pinellas County, Florida and all improvements, buildings and structures located thereon and all fixtures attached thereto.

 

2.2.  Additional Payments. If any change in any law or regulation or in the interpretation thereof by any court or administrative or Governmental Authority charged with the administration thereof shall either (a) impose, modify or deem applicable any reserve, special deposit or similar requirement against the Bonds owned by the Bank or (b) impose on the Bank any other condition relating, directly or indirectly, to the Indenture, the Loan Agreement or this Agreement, and the result of any event referred to in the preceding clause (a) or (b) shall be to increase the cost to the Bank of owning the Bonds, then, upon demand by the Bank, the Company hereby agrees to pay promptly to the Bank, from time to time as specified by the Bank, such additional amounts as shall be sufficient to compensate the Bank for such increased cost. A certificate of the Bank claiming compensation under this subsection and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive absent manifest error. In determining any such amount, the Bank may use any reasonable averaging and attribution methods.

 

2.3.  Capital Adequacy. If, after the date of this Agreement, the Bank shall have determined that the adoption or implementation of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Bank with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on the Bank's capital, on the Bonds or otherwise, as a consequence of its ownership of the Bonds to a level below that which the Bank could have achieved but for such adoption, change or compliance (taking into consideration the Bank's policies with respect to capital adequacy) by an amount deemed by the Bank to be material, then from time to time, promptly upon demand by the Bank, the Company hereby agrees to pay the Bank such additional amount or amounts as will compensate the Bank for such reduction. A certificate of the Bank claiming compensation under this subsection and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive absent manifest error. In determining any such amount, the Bank may use any reasonable averaging and attribution methods.

 

  

- 2 -

  

 

2.4.  Determination of Taxability. Upon the occurrence of a Determination of Taxability (as defined in the Indenture), the Bonds shall be subject to mandatory tender by the Owners thereof upon the terms and conditions set forth in the Indenture. In addition to the Purchase Price required to be paid pursuant to the terms of the Indenture, the Company hereby agrees to pay to the Bank certain additional amounts, as follows:

 

(a)        an additional amount equal to the difference between (i) the amount of interest paid on the Bonds during the Taxable Period and (ii) the amount of interest that would have been paid on the Bonds during the Taxable Period had the Bonds borne interest at the Taxable Rate (with such rate being adjusted from time to time during such period as provided in the Indenture, to reflect any adjustments of the Bank Rate (as defined in the Indenture); plus

 

(b)        an amount equal to any interest, penalties on overdue interest and additions to tax (as referred to in Subchapter A of Chapter 68 of the Code) owed by the Bank as a result of the occurrence of a Determination of Taxability.

 

2.5.  Waivers. The Company hereby waives and agrees not to assert or take advantage of any defense at law or in equity based on the adequacy or value of the consideration for this Agreement.

 

2.6.  Enforcement of Agreement. The Bank may proceed to exercise any right or remedy which it may have against any property, real or personal, as a result of any lien or security interest it may have, including its rights under the Security Agreement, to secure all or any portion of the Payment Obligations.

 

2.7.  Additional Waivers. The Company hereby waives diligence, presentment and demand (whether for non-payment or protest or of acceptance, termination, extension of time, change in nature or form of the Payment Obligations, acceptance of further security, release of security, notice of adverse change in the Company's financial condition and any other fact which might materially increase the risk to the Company), with respect to any of the Payment Obligations, and all other demands whatsoever, and waive the benefit of all provisions of law which are or might be in conflict with the terms of this Agreement, except to the extent that this Agreement may otherwise specify the giving of notice. The Company represents and warrants and agrees that, as of the date of this Agreement, its obligations under this Agreement are not subject to any counterclaims, offsets or defenses against the Bank of any kind. The Company further agrees that its obligations under this Agreement shall not be subject to any counterclaims, offsets or defense against the Bank of any kind which may arise in the future.

 

  

- 3 -

  

 

2.8.  Benefit of Credit Agreement. The provisions of this Agreement are for the benefit of the Bank and its successors and assigns and nothing herein contained shall impair as between the Company and the Bank the obligations of the Company under the Operative Documents, or under any other agreements, documents, instruments or certificates which may be delivered under or pursuant to the Operative Documents.

 

2.9.  Subrogation.

 

(a)        The Company will not exercise any rights which it may have acquired by way of subrogation under this Agreement, by any payment or performance made hereunder or otherwise, unless and until the Payment Obligations have been satisfied and discharged in full, and if any payment shall be made to the Company on account of such subrogation rights at any time when the Payment Obligations shall not have been satisfied and discharged in full, each and every amount so paid will forthwith be paid to the Bank to be credited and applied upon the Payment Obligations, whether matured or unmatured.

 

(b)        If pursuant to applicable law the Company, by payment or otherwise, becomes subrogated to all or any of the rights of the Bank under any of the Operative Documents or any other documentation underlying or securing the Payment Obligations, the rights of the Bank to which the Company shall be subrogated shall be accepted by the Company "as is" and without any representation or warranty of any kind by the Bank, expressed or implied, with respect to the legality, value, validity or enforceability of any of such rights, or the existence, availability, value, merchantability or fitness for any particular purpose of any collateral, whether covered by the Note or otherwise.

 

2.10.    Suspension of LIBOR, if for any reason the Bank is not able to determine LIBOR or it becomes illegal for the Bank to maintain the Bonds based on LIBOR, the Bank shall have the right to substitute the Base Rate for LIBOR and thereafter any reference to LIBOR shall mean the Base Rate until such time that the Bank is again able to determine LIBOR or it is no longer illegal for the Bank to maintain the Bonds based on LIBOR.

 

3.          REPRESENTATIONS AND WARRANTIES. Full reliance by the Bank upon the following representations and warranties is acknowledged:

 

3.1.  Existence; Power. The Company and each of its Subsidiaries (a) is duly organized, validly existing and in good standing as a Delaware corporation, (b) has all requisite power and authority to carry on its business as now conducted, and (c) is duly qualified to do business, and is in good standing, in the State of Florida and all other jurisdictions where such qualification is required.

 

3.2.  Organizational Power; Authorization. The execution, delivery and performance by the Company of this Agreement is within the Company's organizational powers and have been duly authorized by all necessary organizational, and board of director action. This

Agreement has been duly executed and delivered by the Company, and constitutes, when executed and delivered by the Company, will constitute, valid and binding obligation of the Company, enforceable against it in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity.

 

  

- 4 -

  

 

3.3.  Governmental Approvals; No Conflicts. The execution, delivery and performance by the Company of this Agreement (a) does not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority, except those as have been obtained or made and are in full force and effect or where the failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, (b) will not violate any applicable law, rule or regulation or the charter, by-laws or other organizational documents of the Company or any judgment, order or ruling of any Governmental Authority, (c) will not violate or result in a default under any indenture, material agreement or other material instrument binding on the Company or any of its assets or give rise to a right thereunder to require any payment to be made by the Company, and (d) will not result in the creation or imposition of any Lien on any asset of the Company, except Liens created under the Operative Documents.

 

3.4.  Financial Statements. The Company has furnished to the Bank (a) the consolidated audited financial statements of the Company and its Subsidiaries, as of December 31, 2010, and (b) the consolidated unaudited financial statements of the Company and its Subsidiaries as of June 30, 2011, each as certified by a Responsible Officer. Such financial statements fairly present the financial condition of the Company and its Subsidiaries as of such dates and the consolidated results of operations for such periods in conformity with GAAP consistently applied, subject to year end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (b). Since June 30, 2011, there have been no changes with respect to the financial condition of the Company and its Subsidiaries which have had or could reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect.

 

3.5.  Litigation and Environmental Matters.

 

(a)        Except as disclosed in the Company's public filings with the Securities and Exchange Commission, there is no litigation, investigation or proceeding of or before any arbitrators or Governmental Authorities is pending against or, to the knowledge of the Company, threatened against or affecting the Company (i) as to which there is a reasonable possibility of an adverse determination that could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect or (ii) which in any manner draws into question the validity or enforceability of this Agreement or any other Operative Document.

 

(b)        The Company (i) has not failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has not become subject to any Environmental Liability, (iii) has not received notice of any claim with respect to any Environmental Liability or (iv) does not know of any basis for any Environmental Liability.

  

- 5 -

  

 

3.6.  Compliance with Laws and Agreements. The Company is in compliance with (a) all applicable laws, rules, regulations, judgments and orders of any Governmental Authority, and (b) all indentures, agreements or other instruments binding upon it or its properties, except where non-compliance, either singly or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

3.7.  Investment Company Act, Etc. The Company is not (a) an "investment company" or is "controlled" by an "investment company", as such terms are defined in. or subject to regulation under, the Investment Company Act of 1940. as amended, or (b) otherwise subject to any other regulatory scheme limiting its ability to incur debt or requiring any approval or consent from, or registration or filing with, any Governmental Authority in connection therewith.

 

3.8.  Taxes. The Company and each other Person for whose taxes the Company could become liable have timely filed or caused to be filed all Federal income tax returns and all other material tax returns that are required to be tiled by them, and have paid all taxes shown to be due and payable on such returns or on any assessments made against it or its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority, except where the same are currently being contested in good faith by appropriate proceedings and for which the Company has set aside on its books adequate reserves in accordance with GAAP. As of the Date of Issuance, the charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of such taxes are adequate, and no tax liabilities that could be materially in excess of the amount so provided are anticipated.

 

3.9.  Margin Regulations. None of the proceeds of any of the Bonds will be used directly or indirectly for "purchasing" or "carrying" any "margin stock" with the respective meanings of each of such terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the applicable Margin Regulations. The Company is not engaged principally, or one of its important activities is not being in the business of extending credit for the purpose of purchasing or carrying "margin stock".

 

3.10.    ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is expected to occur, could reasonably be expected to result in a Material Adverse Effect. The Company will furnish to the Bank, upon request, true and complete copies of the latest annual report required to be filed pursuant to Section 104 of ERISA, with respect to each employee benefit plan or other plan maintained for employees of Company and covered by Title IV of ERISA (a "Plan"), and no Termination Event (as hereinafter defined) with respect to any Plan has occurred and is continuing which would result in a Material Adverse Change to the Company. For the purposes of this Agreement, a "Termination Event" shall mean a "reportable event" as defined in Section 4043(b) of ERISA, or the filing of a notice of intent to terminate under Section 4041 of ERISA. Company has no unfunded liability with respect to any Plan.

 

  

- 6 -

  

 

3.11.    Ownership of Property.

 

(a)        The Company has good title to, or valid leasehold interests in, all of its real and personal property material to the operation of its business, free and clear of any Liens except Permitted Liens. All leases that individually or in the aggregate are material to the business or operations of the Company are valid and subsisting and in full force.

 

(b)        The Company owns, or is licensed, or otherwise has the right, to use, all patents, trademarks, service marks, tradenames, copyrights, franchises, licenses, and other intellectual property material to its business, and the use thereof by the Company and its Subsidiaries does not infringe on the rights of any other Person.

 

(c)        The properties of the Company are insured with financially sound and reputable insurance companies, in such amounts and with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in locations where the Company operates.

 

3.12.    Disclosure. The Company has disclosed to the Bank all information requested by the Bank and is of the good faith belief that it has disclosed all agreements, instruments, and corporate or other restrictions to which the Company and its Subsidiaries is subject, and all other matters known to any of them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished by or on behalf of the Company to the Bank in connection with the negotiation of this Agreement or any other Operative Document or delivered hereunder or thereunder (as modified or supplemented by any other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, taken as a whole, in light of the circumstances under which they were made, not misleading; provided, that with respect to projected financial information, the Company represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

 

3.13.    Labor Relations. There are no strikes, lockouts or other material labor disputes or grievances against the Company or any of its Subsidiaries, to the Company's knowledge, threatened against or affecting the Company or any of its Subsidiaries, and no significant unfair labor practice, charges or grievances are pending against the Company or any of its Subsidiaries, or to the Company's knowledge, threatened against any of them before any Governmental Authority. All payments due from the Company or any of its Subsidiaries pursuant to the provisions of any collective bargaining agreement have been paid or accrued as a liability on the books of the Company, or any such Subsidiary, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

3.14.    Non-Controlled Person. The Company does not "control" the Bank, either directly or indirectly through one or more controlled companies, within the meaning of Section 2(a)(9) of the Investment Company Act of 1940.

 

  

- 7 -

  

 

3.15.    Insolvency. After giving effect to the execution and delivery of the Bonds and the Operative Documents, the Company will not be "insolvent" within the meaning of such term as defined in § 101 of Title 11 of the United States Code, as amended from time to time, or be unable to pay its debts generally as such debts become due, or have an unreasonably small capital to engage in any business or transaction, whether current or contemplated.

3.16.    OFAC. Neither the Company nor any of its Subsidiaries (i) is a person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engage in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such person in any manner violative of Section 2, or (iii) is a person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury's Office of Foreign Assets Control regulation or executive order.

3.17.    Patriot Act. The Company and each Subsidiary is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceeds of the Bonds will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

4.          AFFIRMATIVE COVENANTS. The Company covenants and agrees that so long as the Bank owns the Bonds:

 

4.1.      Financial Statements and Other Information. The Company will deliver to the Bank:

 

(a)        within 120 days of the end of each fiscal year, its unqualified consolidated audited financial statements prepared in accordance with GAAP by an independent certified public accountant selected by the Company and acceptable to the Bank along with other financial information for such year;

 

(b)        within 50 days of the end of each fiscal quarter, its unaudited consolidated financial statements prepared in accordance with GAAP consistently applied from period to period and utilization reports for such preceding quarter;

 

(c)        concurrently with the delivery of the financial statements referred to in clause (a) above, a certificate, in a form of Exhibit A or such other form acceptable to the Bank, signed by the principal financial officer of the Company certifying that: for the preceding Fiscal Year, and as of the date of the certificate that there does not exist, a Default or an Event of Default with respect to any agreement to which the Company is a party or guarantor;

  

- 8 -

  

 

(d)       concurrently with the delivery of the financial statements referred to in clause above, a certificate of the accounting firm that reported on such financial statements stating whether they obtained any knowledge during the course of their examination of such financial statements of any Event of Default (which certificate may be limited to the extent required by accounting rules or guidelines);

 

(e)        promptly after final approval, but in all events before the commencement of the ensuing fiscal year, the annual budget of the Company for such ensuing fiscal year and following any request therefor, such other information regarding the results of operations, business affairs and financial condition of the Company or any Subsidiary, as the Bank may reasonably request.

 

4.2.     Notices of Material Events. The Company will furnish to the Bank, so long as the Bank owns the Bonds, prompt written notice of the following:

 

(a)        the occurrence of any Default or Event of Default, or the receipt by the Company of any written notice of an alleged Default or Event of Default;

 

(b)        the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or, to the knowledge of the Company, affecting the Company or any of its Subsidiaries which, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;

 

(c)        the occurrence of any event or any other development by which the Company or any of its Subsidiaries (i) fails to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) becomes subject to any Environmental Liability, (iii) receives notice of any claim with respect to any Environmental Liability, or (iv) becomes aware of any basis for any Environmental Liability arid in each of the preceding clauses, which individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;

 

(d)        the occurrence of any ERISA Event that alone, or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Company and its Subsidiaries in an aggregate amount exceeding $100,000;

 

(e)        any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect; and

 

(f)         Each notice delivered under this Section shall be accompanied by a written statement of a Responsible Officer setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

 

  

- 9 -

  

 

4.3.  Existence; Conduct of Business. The Company will, do or cause to be done all things necessary to preserve, renew and maintain in full force and effect its legal existence and its respective rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business and will continue to engage in the same business as presently conducted or such other businesses that are reasonably related thereto; provided, that nothing in this Section shall prohibit any merger, consolidation, liquidation or dissolution permitted under Section 5.2.

 

4.4.  Compliance with Laws, Etc. The Company will comply with all laws, rules, regulations and requirements of any Governmental Authority applicable to its business and properties, including without limitation, all Environmental Laws, ERISA and OS 11 A. except where the failure to do so, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

4.5.  Payment of Obligations. The Company will pay and discharge at or before maturity, all of its obligations and liabilities (including without limitation all tax liabilities and claims that could result in a statutory Lien) before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Company has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

 

4.6.  Books and Records. The Company will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities to the extent necessary to prepare the financial statements of Company in conformity with GAAP.

 

4.7.  Visitation, Inspection, Etc. The Company will permit any representative of the Bank, to visit and inspect its properties, to examine its books and records and to make copies and take extracts therefrom, and to discuss its affairs, finances and accounts with any of its officers and with its independent certified public accountants, all at such reasonable times and as often as the Bank may reasonably request alter reasonable prior notice to the Company: provided, however, if an Event of Default has occurred and is continuing, no prior notice shall be required.

 

4.8.  Maintenance of Properties; Insurance. The Company will, and will cause each of its Subsidiaries to (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, and (b) maintain with financially sound and reputable insurance companies, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by companies in the same or similar businesses operating in the same or similar locations.

 

  

- 10 -

  

 

4.9.  Publicly Traded. The Company will maintain at all times its listing on the NYSE Euronext or other national securities exchange and its common stock shall at all times be listed for trading thereon.

 

4.10.    Use of Bond Proceeds. The Company used the proceeds of the Bonds for the purposes set forth in the Operative Documents. No part of the proceeds of the Bonds were used, whether directly or indirectly, for any purpose that violated any rule or regulation of the Board of Governors of the Federal Reserve System, including Regulations T, U or X.

 

4.11.    Subsidiaries. The Company has those Subsidiaries listed on ANNEX I.

 

4.12.    Non-Controlled Person. The Company will provide written notice to the Trustee thirty days prior to the consummation of any transaction that would result in the Company controlling or being controlled by the Bank within the meaning of Section 2(a)(9) of the Investment Company Act of 1940.

 

5.          NEGATIVE COVENANTS. The Company covenants and agrees that so long as the Bank owns the Bonds:

 

5.1.  Indebtedness. The Company will not create, incur, assume or suffer to exist any additional debt for borrowed money other than with the Bank, except such indebtedness as may be incurred in the ordinary course of business or as otherwise permitted in the Operative Documents.

 

5.2.  Fundamental Changes.

 

(a)        The Company will not merge into or consolidate into any other Person, or permit any other Person to merge into or consolidate with it, or sell, lease, transfer or otherwise dispose of (in a single transaction or a series of transactions) all or substantially all of its assets (in each case, whether now owned or hereafter acquired) or liquidate or dissolve.

 

(b)        The Company will not engage in any business other than businesses of the type conducted by the Company on the date hereof and businesses reasonably related thereto.

 

5.3.  Investments. Loans, Etc. The Company will not make any investments with or loans to any officers or directors of the Company.

 

5.4.  Sale/Leaseback of Property. At no time shall Company enter into one or more transactions involving the sale and leaseback of any property.

 

5.5.  Guarantees. At no time during the term of this Agreement shall the Company act as a Guarantor or otherwise guarantee or act as a surety for the indebtedness of a third party.

 

5.6.  Business Change. At no time during the term of this Agreement: shall the Company make a significant change in the purpose of its business operations.

  

- 11 -

  

 

5.7.      Fiscal Year. At no time during the term of this Agreement shall the Company adopt a Fiscal Year other than January 1 through December 31 without the prior written consent of Bank, which consent may be granted or withheld in the sole and absolute discretion of Bank.

 

6.          FINANCIAL COVENANTS. The Company covenants and agrees that so long as the Bank owns the Bonds:

 

6.1.  Fixed Charge Coverage Ratio. The Company will maintain a Fixed Charge Coverage Ratio as of the end of each fiscal quarter, on a rolling four quarters basis of at least 1.50 to 1.00, commencing with the fiscal quarter ending December 31. 2011, and certified to the Bank within fifty (50) days after the end of the fiscal quarter. The Company hereby certifies that it has a good faith belief that such ratio is satisfied as of the Date of Issuance.

 

6.2.  Tangible Net Worth. The Company will maintain at all times a ratio of total liabilities to tangible Net Worth of less than 0.75 to 1.00. This test shall be computed as of each fiscal quarter, commencing with the fiscal quarter ending December 31, 2011. and certified to the Bank within fifty (50) days after the end of the fiscal quarter. The Company hereby certifies that it has a good faith belief that the total liabilities to Tangible Net Worth is less than 0.75 to 1.00 as of the Date of Issuance.

 

7.          EVENTS OF DEFAULT.

 

7.1.      Events of Default. Upon the occurrence of any of the following events (herein referred to as an "Event of Default"), unless waived by the Bank:

 

(a)         the occurrence of a "Default" or an "Event of Default" as described and defined in any of the Operative Documents;

 

(b)        failure of the Company to pay any amount when due under the terms of this Agreement, and the continuation of such failure for a period of three (3) business days;

 

(c)        any representation or warranty made or deemed made by the Company in or in connection with this Agreement or any other Operative Document and any amendments or modifications hereof or waivers hereunder, or in any certificate, report, financial statement or other document submitted to the Bank by the Company pursuant to or in connection with this Agreement or any other Operative Document shall prove to be incorrect which would reasonably be expected to result in a Material Adverse Effect, when made or deemed made or submitted; or

 

(d)        the Company shall fail to observe or perform any covenant or agreement contained in Sections 4.2. 4.3 (with respect to the Company's existence) or Articles 5 or 6; or

 

(e)        the Company shall fail to perform or observe any material term, covenant or agreement contained in this Agreement or in any of the Operative Documents (other than those described in (a), (b), (c) or (d) above) to which it is a party on its part to be performed or observed and (i) with respect to any such term, covenant or agreement contained herein, any such failure remains unremedied for 15 days after the earlier of its discovery by the Company or written notice thereof to the Company by the Bank: and (ii) with respect to any such term, covenant or agreement contained in any of the other Operative Documents to which the Company is a party, any such failure remains unremedied after any applicable grace period specified in such Operative Documents; or

 

  

- 12 -

  

 

(f)         the Company (whether as primary obligor or as guarantor or other surety) shall fail to pay any principal of or premium or interest on any Material Indebtedness that is outstanding, when and as the same shall become due and payable (whether at scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument evidencing such Material Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument relating to such Material Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or permit the acceleration of, the maturity of such Indebtedness: or any such Indebtedness shall be declared to be due and payable; or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or any offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case prior to the stated maturity thereof; or

 

(g)        the Company shall (i) commence a voluntary case or other proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official of it or any substantial part of its property, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (i) of this Section, (iii) apply for or consent to the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Company or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take any action for the purpose of effecting any of the foregoing; or

 

(h)        an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Company or its debts, or any substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or (ii) the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Company or for a substantial part of its assets, and in any such case, such proceeding or petition shall remain undismissed for a period of 30 days or an order or decree approving or ordering any of the foregoing shall be entered; or

 

  

- 13 -

  

 

(i)         the Company shall become unable to pay, shall admit in writing its inability to pay, or shall fail to pay, its debts as they become due; or

 

(j)        any judgment or order for the payment of money in excess of $100,000 in the aggregate shall be rendered against the Company and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be a period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

 

(k)        any non-monetary judgment or order shall be rendered against the Company that could reasonably be expected to have a Material Adverse Effect, and there shall be a period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

 

(1)        the occurrence of any ERISA Event that alone, or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Company in an aggregate amount exceeding $5,000; or

 

(m)       any event which could reasonably be expected to result in a Material Adverse Effect shall occur and be continuing:

 

then, and in any such event, the Bank may, in its sole discretion, but shall not be obligated to, (i) by notice to the Company, declare all amounts payable by the Company hereunder to be forthwith due and payable, and the same shall thereupon become due and payable without demand, presentment, protest or further notice of any kind, all of which are hereby expressly waived, and/or (ii) exercise all of its rights and remedies under the Operative Documents and/or (iii) by notice to the Trustee, require the Trustee to accelerate payment of all Bonds and interest accrued thereon as provided in Section 9.02 of the Indenture.

 

No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or any other Operative Document or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default, omission or failure of performance hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to exercise any remedy reserved to the Bank in this Agreement, it shall not be necessary to give any notice, other than such notice as may be herein expressly required. In the event any provision contained in this Agreement should be breached by any party and thereafter duly waived by the other party so empowered to act, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. No waiver, amendment, release or modification of this Agreement shall be established by conduct, custom or course of dealing, but solely by an instrument in writing duly executed by the parties thereunto duly authorized by this Agreement.

 

  

- 14 -

  

 

8.          DEFINITIONS. For the purpose of this Agreement, in addition to terms defined elsewhere herein (capitalized terms not otherwise defined below shall have the meanings provided in the Amended and Restated Master Trust Indenture), the following terms shall have the following meanings:

 

"Affiliate" shall mean, as to any Person, any other Person, directly or indirectly controlling (including all directors, officers and employees of such Person), directly or indirectly controlled by or under direct or indirect common control with such Person.

 

"Base Rate" means the higher of (i) the per annum rate which the Bank publicly announces from time to time to be its prime lending rate, as in effect from time to time and (ii) the Federal Funds Rate, as in effect from time to time, plus 1.50% per annum. Any change in such rates shall be effective as of the date of such change in such rates.

 

"Business Day" shall mean a day on which commercial banks located in the State of Florida are required or permitted by law to be open for the purpose of conducting a commercial banking business.

 

"Capital Lease Obligations" of any Person shall mean all obligations of such Person to pay rent or other amounts under any lease (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

"Current Maturities" means the scheduled payments of principal on all indebtedness for borrowed money having an original term of more than one year (including but not limited to amortization of capitalized lease obligations), as shown on the Borrower's financial statements as of one year prior to the date of determination.

 

"Date of Issuance" shall mean the date of issuance and delivery of the Bonds.

 

"Default" shall mean any event which with notice or lapse of time, or both, would become an Event of Default.

 

"EBITDA" means net income plus interest expense plus income tax expense plus depreciation, plus amortization.

 

"Environmental Laws" shall mean all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by or with any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters.

 

  

- 15 -

  

 

"Environmental Liability" shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental investigation and remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), of the Company directly or indirectly resulting from or based upon (a) any actual or alleged violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any actual or alleged exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time.

 

"ERISA Affiliate" shall mean each trade or business (whether or not incorporated) which, together with the Company, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

 

"ERISA Event" shall mean (a) any "reportable event", as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an "accumulated funding deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan: (e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan administrator appointed by the PBGC of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Company or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Company or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Company or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

 

"Event of Default" shall have the meaning specified in Article 7.

 

"Federal Funds Rate" shall mean, for any day, the rate per annum ("rounded upwards, if necessary, to the next 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with member banks of the Federal Reserve System arranged by Federal funds brokers, as published by the Federal Reserve Bank of New York on the next succeeding Business Day or if such rate is not so published for any Business Day, the Federal Funds Rate for such day shall be the average rounded upwards, if necessary, to the next 1/100th of 1% of the quotations for such day on such transactions received by the Bank from three Federal funds brokers of recognized standing selected by the Bank.

 

  

- 16 -

  

 

"Fixed Charge Coverage Ratio" means (i) EBITDA, divided by (ii) the sum of Current Maturities plus interest expense plus cash taxes paid plus dividends plus Unfunded Capital Expenditures.

 

"Generally Accepted Accounting Principles" or "GAAP" shall mean generally accepted accounting principles as defined by the Financial Accounting Standards Board as from time to time in effect that are consistently applied and, when used with respect to the Company, that are consistent with the accounting practice of the Company, reflected in the financial statements for the Company, with such changes as may be approved by an independent public accountant satisfactory to the Bank.

 

"Governmental Authority" shall mean the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

"Hedging Agreements" shall mean interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts, commodity agreements and other similar agreements or arrangements designed to protect against fluctuations in interest rates, currency values or commodity values, in each case to which the Company is a party.

 

"Indenture" shall mean collectively the Indenture and the Amended and Restated Indenture of Trust, dated as of the date hereof, between the Issuer and the Trustee.

 

"LIBOR" shall have the definition ascribed to such term in the Indenture.

 

"Lien" shall mean, as to any asset, (a) any lien, charge, claim, mortgage, security interest, pledge or other encumbrance of any kind with respect to such asset, (b) any interest of a vendor or lessor under any conditional sale agreement, capitalized lease or other title retention agreement relating to such asset, (c) any reservation, exception, encroachment, easement, right-of-way, covenant, condition, restriction, lease or other title exception affecting such asset, or (d) any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction).

 

"Loan Agreement" shall mean collectively the Loan Agreement and the Amended and Restated Loan Agreement, dated as of the date hereof between the Issuer and the Company.

 

"Material Adverse Effect" shall mean, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences whether or not related, a material adverse change in. or a material adverse effect on. (a) the business, results of operations, financial condition, assets or liabilities of the Company and its Subsidiaries taken as a whole, other than changes or effects arising out of general economic conditions or the conditions in the financial markets, (b) the ability of the Company to perform any of its obligations under the Operative Documents, (c) the rights and remedies of the Bank under any of the Operative Documents or (d) the legality, validity or enforceability of any of the Operative Documents.

 

  

- 17 -

  

 

"Material Indebtedness" shall mean current or long term debt or obligations in respect of one or more Hedging Agreements, of the Company in an aggregate principal amount exceeding $100,000. For purposes of determining Material Indebtedness, the "principal amount" of the obligations of the Company in respect to any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Company would be required to pay if such Hedging Agreement were terminated at such time.

 

"Operative Documents" shall mean the Indenture, the Loan Agreement, the Mortgage, this Agreement and the Bonds and all other loans, notes and agreements by and between the Company and the Bank.

 

"Permitted Investments" shall mean the investments permitted by the Board of Directors of the Company, subject to the terms herein.

 

"Permitted Liens" shall mean the Liens permitted under the Mortgage, subject to the terms herein.

 

"Person" shall mean an individual, corporation, partnership, joint venture, trust, unincorporated organization or any other juridical entity, or a foreign state or any agency or political subdivision thereof.

 

"Regulation D" shall mean Regulation I) of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.

 

"Related Party" shall mean, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person's Affiliates.

 

"Release" means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.

 

"Responsible Officer" shall mean any of the president, the chief executive officer, the chief operating officer, the chief financial officer, the treasurer or a vice president of the Company or such other representative of the Company as may be designated in writing by any one of the foregoing with the consent of the Bank; and, with respect to the financial covenants only, the chief financial officer or the treasurer of the Company.

 

  

- 18 -

  

 

"Subsidiary" shall mean, with respect to any Person (the "parent"), any corporation, partnership, joint venture, limited liability company, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, partnership, joint venture, limited liability company, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50%) of the ordinary voting power, or in the case of a partnership, more than 50% of the general partnership interests are. as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless otherwise indicated, all references to "Subsidiary" hereunder shall mean a Subsidiary of the Company.

 

"Tangible Net Worth" means stockholders' equity in the Borrower less any advances to affiliated parties less all items properly classified as intangibles, in accordance with GAAP.

 

"Taxes" shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

 

"Taxable Period" means, with respect to the Bonds, the period which elapses from the date on which the interest on the Bonds is includable in the gross income of the holders thereof as a result of a Determination of Taxability to and including the Mandatory Purchase Date for the Bonds as a result of such Determination of Taxability.

 

"Taxable Rate" means the Bank Rate plus 3%.

 

"Unfunded Capital Expenditures" means capital expenditures made from the Borrower's funds other than funds borrowed as term debt to finance such capital expenditures.

 

"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

9.          MISCELLANEOUS.

 

9.1.  Amendments. This Agreement may be amended, and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, if the Company shall obtain the written consent of the Bank. No course of dealing between the Company and the Bank, nor any delay in exercising any rights hereunder shall operate as a waiver of any rights of the Bank hereunder.

 

9.2.  Survival of Representations and Warranties. All representations and warranties contained herein or made in writing by the Company in connection herewith shall survive the execution and delivery of this Agreement, regardless of any investigation made by the Bank or on its behalf.

 

  

- 19 -

  

 

9.3.  Expenses. The Company hereby agrees to pay promptly all costs and expenses in connection with the preparation, issuance, delivery, filing, recording and administration of this Agreement, the other Operative Documents, the Bonds and any other documents which may be delivered in connection with this Agreement, including, without limitation, the fees and expenses of Akerman Senterfitt, counsel for the Bank, and all costs and expenses (including reasonable counsel fees and expenses) in connection with (a) any and all amounts which the Bank has paid relative to the Bank's curing of any Event of Default resulting from the acts or omissions of the Company under this Agreement, any other Operative Document or the Bonds or (b) the enforcement of this Agreement or any other Operative Document. In addition, the Company hereby agrees to pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing and recording of this Agreement, any other Operative Document or the Bonds, or any other documents which may be delivered in connection with this Agreement, and agrees to save the Bank harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees. Notwithstanding the foregoing, no payment shall be required under this Section 9.3 in respect of any cost or expense the Bank has incurred because of its gross negligence or willful misconduct.

 

9.4.      Set-off. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, during the continuance of any Event of Default hereunder the Bank is hereby authorized at any time and from lime to time, without notice to the Company or to any other person or entity, any such notice being hereby expressly waived, to set-off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by the Bank to or for the credit or the account of the Company against and on account of the obligations and liabilities of the Company to the Bank under this Agreement, irrespective of whether or not the Bank shall have made any demand hereunder and although said obligations, liabilities or claims, or any of them, shall be contingent or unmatured.

 

9.5.      Notices. Except as otherwise specified herein, all notices hereunder shall be given by United States certified or registered mail or by telecommunication device capable of creating written record of such notice and its receipt. Notices hereunder shall be effective when received and shall be addressed as follows:

 

	 	If to the Bank, to: 	PNC Bank, National Association
	 	 	5422 Bay Center Drive Suite 100
	 	 	Tampa, Florida 33609 
	 	 	Attention: Eric Vogt

 

	 	with a copy to:	
Akerman Senterfitt

	 	 	
420 South Orange Ave, Suite 1200

	 	 	Orlando, Florida 32801
	 	 	Attention: Steven D. Katz, Esq.

 

  

- 20 -

  

 

	 	If to the Company, to: 	Bovie Medical Corporation
	 	 	5115 Ulmerton Road 
	 	 	Clearwater, Florida 33760 
	 	 	Attention: Gary Pickett

 

	 	with a copy to: 	
Ruskin Moscou Faltischek

	 	 	
1425 RXR Plaza 

	 	 	East Tower, 15th Floor
	 	 	Uniondale, New York 11556 
	 	 	Attention: Adam P. Silvers

                        

9.6.  Satisfaction Requirement. If any agreement, certificate or other writing, or any action taken or to be taken, is by the terms of this Agreement required to be satisfactory to the Bank, the determination of such satisfaction shall be made by the Bank in its sole and exclusive judgment exercised in good faith.

 

9.7.  Binding Effect; Assignment. This Agreement is a continuing obligation and shall (a) be binding upon the Company and its successors, transferees and assigns and (b) inure to the benefit of and be enforceable by the Bank and its successors, transferees and assigns; provided, however, that the Company may not assign all or any part of this Agreement without the prior written consent of the Bank.

 

9.8.      Governing Law. This Agreement is being delivered and is intended to be performed in the State of Florida, and shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Florida.

 

9.9.      Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

 

9.10.    Waiver of Jury Trial. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THERE BY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN fill- EVENT OF LITIGATION, SEEK. TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER OPERATIVE DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

9.11.    Severability. Any provision of this Agreement or any other Operative Document held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

  

- 21 -

  

 

9.12.    Confidentiality. The Bank agrees to take normal and reasonable precautions to maintain the confidentiality of any information designated in writing as confidential and provided to it by the Company or any Subsidiary, except that such information may be disclosed (i) to any Related Party of the Bank, including without limitation accountants, legal counsel and other advisors, (ii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iii) to the extent requested by any regulatory agency or authority, (iv) to the extent that such information becomes publicly available other than as a result of a breach of this Section 9.12, or which becomes available to the Bank on a non-­confidential basis from a source other than the Company, (v) in connection with the exercise of any remedy hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, and (ix) subject to provisions substantially similar to this Section 9.12, to any actual or prospective assignee or participant, or (vi) with the consent of the Company. Any Person required to maintain the confidentiality of any information as provided for in this Section 9.12 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such information as such Person would accord its own confidential information.

 

9.13.    Waiver of Effect of Corporate Seal. The Company represents and warrants that it is not required to affix its corporate seal to this Agreement or any other Operative Document pursuant to any requirement of law or regulation, agrees that this Agreement is delivered by the Company under seal and waives any shortening of the statute of limitations that may result from not affixing the corporate seal to this Agreement or such other Operative Documents.

 

10.       TERM. Except as otherwise provided in Section 14 below, the Company agrees that this Agreement shall remain in full force and effect until the performance in full of the Payment Obligations.

 

11.       COUNTERPARTS. This Agreement may be executed in counterparts which together shall constitute the same instrument.

 

12.       NON-WAIVER. The failure of the Bank to enforce any right or remedy hereunder, or promptly to enforce any such right or remedy, shall not constitute a waiver thereof, nor give rise to any estoppel against the Bank, nor excuse the Company from its obligations hereunder. Any waiver of any such right or remedy must be in writing and signed by the Bank.

 

13.       ADDITIONAL COLLATERAL. In the event the Company shall furnish a letter of credit or other collateral to the Bank as additional collateral for the indebtedness of the Company to the Bank, whether heretofore or hereafter, such additional collateral shall not diminish or modify the Company's liability to the Bank hereunder unless the Bank shall otherwise specifically agree in writing.

  

- 22 -

  

 

14.        TERMINATION. Notwithstanding anything to the contrary herein contained, and provided that there does not then exist any Default or Event of Default under any of the Operative Documents, this Agreement shall terminate and be of no further force and effect at such time as the Company shall have satisfied all other payment and performance obligations to the Bank in accordance with the Operative Documents. This Agreement shall be binding upon the Company and its successors and assigns and inure to the benefit of and be enforceable by the Bank and its successors, transfers and assigns.

  

- 23 -

  

IN WITNESS WHEREOF, the Company and the Bank have caused this Agreement to be duly executed and delivered by their duly authorized officers, all as of the date first above written.

 

	 	
BOVIE MEDICAL CORPORATION

	 
	 	
a Delaware corporation.

	 
	 	 	 	 
	 	
By: 

	
/s/ Gary Pickett

	 
	 	 	
Gary Pickett

	 
	 	 	
Chief Financial Officer

	 

 

	 	
PNC BANK, NATIONAL ASSOCIATION

	 
	 	 	 	 
	 	
By: 

	/s/ Eric Vogt	 
	 	 	
Eric Vogt

	 
	 	 	
Senior Vice President

	 
	 	 	 	 

 

  

  

  

 

ANNEX I

 

SUBSIDIARIES OF THE COMPANY

 

  

  

  

[EXHIBIT A]

 

This Compliance Certificate is furnished to PNC Bank, National Association, (the "Bank") pursuant to that certain Credit Agreement dated as of October )), 2011 (the "Agreement"), between Bovie Medical Corporation.(the "Borrower") et.al and the Bank. Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.

 

The Undersigned hereby certifies that:

 

1.          I am the duly elected  ___________________________________________  of the Borrower;

 

2.          This Certificate relates to the fiscal [year] [quarter ] ended _______________  _______, 20 ______;

 

3.          I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Borrower during the accounting period covered by the attached financial statements;

 

4.          The examinations described in paragraph 3 did not disclose, and I have no knowledge of, the existence of any condition or the occurrence of any event which constitutes a Default or Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, or, if any such Default or Event of Default has occurred during such period, set forth below is a description of such Default or Event of Default and the action, if any, taken by the Borrower to remedy the same;

 

5.          To the best of my knowledge the financial statements required by Section 4.1 of the Agreement and being furnished to you concurrently with this certificate fairly represent the Borrower's condition in accordance with GAAP (except for the omission of footnotes and year end adjustments for any partial year financial statements) as of the dates and for the periods covered thereby;

 

6.          As of _____________,  _____, 20 ______ the Fixed Coverage Charge Ratio was ________ %; and

 

7.          As of ___________, ______, 20_____,  the Tangible Net Worth Ratio was:_______                                                              .

 

8.          The Attachment hereto sets forth financial data and computations evidencing the conclusions expressed in paragraphs 6 and 7 above, and such data and computations are. to the best of my knowledge, true, complete and correct and have been made in accordance with the Agreement.

 

	
Dated  _________________

	
BOVIE MEDICAL CORPORATION

	 
	 	 	 	 
	 	
By: 

	 	 
	 	 	Name 	 
	 	 	Titleex10_26.htm

EXHIBIT 10.26

 

	Revolving Loan Agreement	 

 

THIS REVOLVING LOAN AGREEMENT (the “Agreement”), is entered into as of October 31, 2011, between BOVIE MEDICAL CORPORATION, a Delaware corporation (the “Borrower”), with an address at 5115 Ulmerton Road, Clearwater, Florida  33760 in favor of  PNC BANK, NATIONAL ASSOCIATION (the “Bank”), with an address at 201 East Pine Street, Suite 200, Orlando, Florida  32801.

The Borrower and the Bank, with the intent to be legally bound, agree as follows:

1.  Loan and Hedge Obligations.  Subject to the terms and conditions and in reliance upon the representations and warranties of the Borrower set forth in this Agreement, the Bank hereby establishes for the benefit of the Borrower a revolving line of credit facility (the “Loan”) in the maximum aggregate principal amount of $6,000,000.00 (the “Permitted Loan Limit”) for working capital and general corporate purposes, all upon the following terms and conditions:

1.1.  Loan; Advances Under Loan.  (a) The Bank agrees from time to time during the period (the “Revolving Period”) from the date hereof until the earlier of (i) October 31, 2013, (ii) the occurrence of an Event of Default or (iii) such later date as may be designated by the Bank by written notice to the Borrower (the “Expiration Date”) to lend to the Borrower under the Loan upon the request of the Borrower up to the lesser of (a) the Permitted Loan Limit or (b) the Borrowing Base (as defined in the Borrowing Base Rider attached hereto and made a part hereof (the “Borrowing Base Rider”), subject to the borrowing base formula and the other additional terms and conditions set forth in the Borrowing Base Rider and the provisions of the Note (as hereinafter defined).  During the Revolving Period, the Borrower shall be entitled to receive up to the lesser of the Permitted Loan Limit or the Borrowing Base in one or more advances (each, an “Advance” and collectively, the “Advances”), except as otherwise specifically set forth in this Agreement and the Borrowing Base Rider and may borrow, repay and reborrow under the Loan during the Revolving Period; provided, however, the Borrower may not borrow or reborrow if a default or Event of Default exists.  At no time shall the aggregate principal amount of Advances outstanding under the Loan exceed the lesser of the Permitted Loan Limit or the Borrowing Base.  Advances under the Loan shall be used only for working capital and/or other general corporate business purposes of the Borrower.  Advances under the Loan shall be evidenced by a Revolving Line of Credit Note in the face amount of $6,000,000.00 executed or to be executed by the Borrower in favor of the Bank dated on or before the date hereof (as the same may be amended, modified, renewed, extended or replaced from time to time, the “Note”) acceptable to the Bank, shall bear interest at the rate or rates set forth in the Note and shall be payable as set forth in the Note.  After the Expiration Date, the Borrower shall not be entitled to receive any further Advances.

(b)             Upon satisfaction of the conditions precedent set forth in this Agreement, the Borrowing Base Rider, the Note and the other Loan Documents (as hereinafter defined), the Borrower shall be entitled to obtain Advances under the Loan.  Each request for an advance shall be in the form attached hereto, or such other form as may be acceptable to the Bank.  Advances shall be made electronically into the Borrower's DDA account.

(c)             During the term of the Loan, the Borrower shall pay to the Bank a quarterly fee (the “Unused Fee”) on the average unused portion of the Loan for each calendar quarter in an amount equal to twelve and one half (12.5) basis points (i.e., 0.125%) per annum (on the basis of a year of 360 days, for the actual number of days elapsed).  Such fee shall accrue from the date of this Agreement until the Bank's obligation to make Advances under the Loan pursuant to this Agreement are terminated.  The Unused Fee shall be payable quarterly in arrears, on the first day of each calendar quarter for the previous quarter, beginning on January 1, 2012 (pro-rated for the first partial quarter), and continuing on the first day of each calendar quarter thereafter and on the Expiration Date.

 

  

  

  

 

1.2.  Hedge Obligations.  The Borrower may, from time to time, enter into one or more interest or currency swaps, futures, options or other interest rate protection or similar agreements with respect to all or any portion of the Loan, each of which is a “Transaction” pursuant to and defined in one or more ISDA Master Agreements (whether one or more, the “Master Agreement”) (the obligations of the Borrower under the Master Agreement, as supplemented by one or more Transactions from time to time, whether simultaneously herewith or after the date hereof, under the Master Agreement, being herein called the “Hedge Obligations”).

2.  Security.  The security for repayment of the Loan and all Hedge Obligations shall include but not be limited to the collateral, guaranties and other documents heretofore, contemporaneously or hereafter executed and delivered to the Bank, including but not limited to a Security Agreement executed or to be executed by the Borrower in favor of the Bank (as the same may be amended, modified, restated or replaced from time to time, the “Security Agreement”) encumbering present or future personal property assets of the Borrower (collectively, the “Security Documents”), which shall secure repayment of the Loan, the Note and all other loans, advances, debts, liabilities, obligations, covenants and duties owing by the Borrower to the Bank or to any other direct or indirect subsidiary of The PNC Financial Services Group, Inc., of any kind or nature, present or future (including any interest accruing thereon after maturity, or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, whether or not (i) evidenced by any note, guaranty or other instrument, (ii) arising under any agreement, instrument or document, (iii) for the payment of money, (iv) arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease or guarantee, (v) under any interest or currency swap, future, option or other interest rate protection or similar agreement, (vi) under or by reason of any foreign currency transaction, forward, option or other similar transaction providing for the purchase of one currency in exchange for the sale of another currency, or in any other manner, or (vii) arising out of overdrafts on deposit or other accounts or out of electronic funds transfers (whether by wire transfer or through automated clearing houses or otherwise) or out of the return unpaid of, or other failure of the Bank to receive final payment for, any check, item, instrument, payment order or other deposit or credit to a deposit or other account, or out of the Bank’s non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository or other similar arrangements; and any amendments, extensions, renewals and increases of or to any of the foregoing, and all costs and expenses of the Bank incurred in the documentation, negotiation, modification, enforcement, collection and otherwise in connection with any of the foregoing, including reasonable attorneys’ fees and expenses (hereinafter referred to collectively as the “Obligations”).  Unless expressly provided to the contrary in documentation for any other loan or loans, it is the express intent of the Bank and the Borrower that all Obligations including those included in the Loan and the Hedge Obligations be cross-collateralized and cross-defaulted, such that collateral securing any of the Obligations shall secure repayment of all Obligations and a default under any Obligation shall be a default under all Obligations.

This Agreement, the Note, the Security Documents and all other agreements and documents executed and/or delivered pursuant hereto, as each may be amended, modified, extended or renewed from time to time, are collectively referred to as the “Loan Documents.”  Capitalized terms not defined herein shall have the meanings ascribed to them in the Loan Documents.

3.  Representations and Warranties.  The Borrower hereby makes the following representations and warranties, which shall be continuing in nature and remain in full force and effect until the Obligations are paid in full, and which shall be true and correct except as otherwise set forth on the Addendum attached hereto and incorporated herein by reference (the “Addendum”):

3.1.  Existence, Power and Authority.  The Borrower is duly organized, validly existing and in good standing as a corporation under the laws of its State of incorporation and has the power and authority to own and operate its assets and to conduct its business as now or proposed to be carried on, and is duly qualified, licensed and in good standing to do business in all jurisdictions where its ownership of property or the nature of its business requires such qualification or licensing.  The Borrower is duly authorized to execute and deliver the Loan Documents, all necessary action to authorize the execution and delivery of the Loan Documents has been properly taken, and the Borrower is and will continue to be duly authorized to borrow under this Agreement and to perform all of the other terms and provisions of the Loan Documents.

 

  

- 2 -

  

 

3.2.  Financial Statements.  The Borrower has delivered or caused to be delivered to the Bank its most recent balance sheet, income statement and statement of cash flows, each for the period ending June 30, 2011(the “Historical Financial Statements”). The Historical Financial Statements are true, complete and accurate in all material respects and fairly present the financial condition, assets and liabilities, whether accrued, absolute, contingent or otherwise and the results of the Borrower’s operations as of the date and for the period specified therein.  The Historical Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) consistently applied from period to period, subject in the case of interim statements to normal year-end adjustments.

3.3.  No Material Adverse Change.  Since the date of the most recent Financial Statements (as hereinafter defined), the Borrower has not suffered any damage, destruction or loss, and no event or condition has occurred or exists, which has resulted or could reasonably be expected to result in a material adverse change in its business, assets, operations, condition (financial or otherwise) or results of operation.

3.4.  Binding Obligations.  The Borrower has full power and authority to enter into the transactions provided for in this Agreement and has been duly authorized to do so by appropriate action of its board of directors or otherwise as may be required by law, charter, other organizational documents or agreements; and the Loan Documents, when executed and delivered by the Borrower, will constitute the legal, valid and binding obligations of the Borrower enforceable in accordance with their terms.

3.5.  No Defaults or Violations.  There does not exist any Event of Default under this Agreement or any default or violation by the Borrower of or under any of the terms, conditions or obligations of:  (i) its articles or certificate of incorporation or bylaws; (ii) any indenture, mortgage, deed of trust, franchise, permit, contract, agreement, or other instrument to which it is a party or by which it is bound; or (iii) any law, ordinance, regulation, ruling, order, injunction, decree, condition or other requirement applicable to or imposed upon it by any law, the action of any court or any governmental authority or agency; and the consummation of this Agreement and the transactions set forth herein will not result in any such default or violation or Event of Default.

3.6.  Title to Assets.  The Borrower has good and marketable title to the assets reflected on the most recent Financial Statements, free and clear of all liens and encumbrances, except for (i) current taxes and assessments not yet due and payable, (ii) assets disposed of by the Borrower in the ordinary course of business since the date of the most recent Financial Statements, (iii) liens on rolling stock owned by the Borrower and used by it in its business, and (iv) those additional liens or encumbrances, if any, specified on the Addendum attached hereto.

3.7.  Litigation.  There are no actions, suits, proceedings or governmental investigations pending or, to the knowledge of the Borrower, threatened against the Borrower, which could reasonably be expected to result in a material adverse change in its business, assets, operations, condition (financial or otherwise) or results of operations and there is no reasonable basis known to the Borrower for any action, suit, proceeding or investigation which could result in such a material adverse change.  All pending and threatened litigation against the Borrower is listed on the Addendum attached hereto.

3.8.  Tax Returns.  The Borrower has filed all returns and reports that are required to be filed by it in connection with any federal, state or local tax, duty or charge levied, assessed or imposed upon it or its property or withheld by it, including income, unemployment, social security and similar taxes, or has obtained valid extensions thereof, and all of such taxes have been either paid or adequate reserve or other provision has been made therefor.

3.9.  Employee Benefit Plans.  Each employee benefit plan as to which the Borrower may have any liability complies in all material respects with all applicable provisions of the Employee Retirement Income Security Act of 1974 (as amended from time to time, “ERISA”), including minimum funding requirements, and (i) no Prohibited Transaction (as defined under ERISA) has occurred with respect to any such plan, (ii) no Reportable Event (as defined under Section 4043 of ERISA) has occurred with respect to any such plan which would cause the Pension Benefit Guaranty Corporation to institute proceedings under Section 4042 of ERISA, (iii) the Borrower has not withdrawn from any such plan or initiated steps to do so, and (iv) no steps have been taken to terminate any such plan.

 

  

- 3 -

  

 

3.10.  Environmental Matters.  The Borrower is in compliance, in all material respects, with all Environmental Laws (as hereinafter defined), including, without limitation, all Environmental Laws in jurisdictions in which the Borrower owns or operates, or has owned or operated, a facility or site, stores Collateral, arranges or has arranged for disposal or treatment of hazardous substances, solid waste or other waste, accepts or has accepted for transport any hazardous substances, solid waste or other wastes or holds or has held any interest in real property or otherwise.  Except as otherwise disclosed on the Addendum, no litigation or proceeding arising under, relating to or in connection with any Environmental Law is pending or, to the best of the Borrower’s knowledge, threatened against the Borrower, any real property which the Borrower holds or has held an interest or any past or present operation of the Borrower.  No release, threatened release or disposal of hazardous waste, solid waste or other wastes is occurring, or to the best of the Borrower’s knowledge has occurred, on, under or to any real property in which the Borrower holds or has held any interest or performs or has performed any of its operations, in violation of any Environmental Law.  As used in this Section, “litigation or proceeding” means any demand, claim notice, suit, suit in equity, action, administrative action, investigation or inquiry whether brought by a governmental authority or other person, and “Environmental Laws” means all provisions of laws, statutes, ordinances, rules, regulations, permits, licenses, judgments, writs, injunctions, decrees, orders, awards and standards promulgated by any governmental authority  concerning health, safety and protection of, or regulation of the discharge of substances into, the environment.

3.11.  Intellectual Property.  The Borrower owns or is licensed to use all patents, patent rights, trademarks, trade names, service marks, copyrights, intellectual property, technology, know-how and processes necessary for the conduct of its business as currently conducted that are material to the condition (financial or otherwise), business or operations of the Borrower.

3.12.  Regulatory Matters.  No part of the proceeds of the Loan will be used for “purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time in effect or for any purpose which violates the provisions of the Regulations of such Board of Governors.

3.13.  Solvency.  As of the date hereof and after giving effect to the transactions contemplated by the Loan Documents, (i) the aggregate value of the Borrower’s assets will exceed its liabilities (including contingent, subordinated, unmatured and unliquidated liabilities), (ii) the Borrower will have sufficient cash flow to enable it to pay its debts as they become due, and (iii) the Borrower will not have unreasonably small capital for the business in which it is engaged.

3.14.  Disclosure.  None of the Loan Documents contains or will contain any untrue statement of material fact or omits or will omit to state a material fact necessary in order to make the statements contained in this Agreement or the Loan Documents not misleading.  There is no fact known to the Borrower which materially adversely affects or, so far as the Borrower can now reasonably foresee, might materially and adversely affect the business, assets, operations, condition (financial or otherwise) or results of operation of the Borrower and which has not otherwise been fully set forth in this Agreement or in the Loan Documents.

4.  Affirmative Covenants.  The Borrower agrees that from the date of execution of this Agreement until all Obligations have been paid in full and any commitments of the Bank to the Borrower have been terminated, the Borrower will:

4.1.  Books and Records.  Maintain books and records in accordance with GAAP and subject to an appropriate non-disclosure agreement, give representatives of the Bank access thereto at all reasonable times, and upon reasonable notice, including permission to examine, copy and make abstracts from any of such books and records and such other information as the Bank may from time to time reasonably request, and the Borrower will make available to the Bank for examination copies of any reports, statements and returns which the Borrower may make to or file with any federal, state or local governmental department, bureau or agency.

 

  

- 4 -

  

 

4.2.  Interim Financial Statements; Certificate of No Default.  Furnish the Bank within 50 days after the end of each fiscal quarter, the Borrower’s Financial Statements for such period, in reasonable detail, certified by an authorized officer of the Borrower and prepared in accordance with GAAP consistently applied from period to period.  The Borrower shall also deliver a certificate as to its compliance with applicable financial covenants (containing detailed calculations of all financial covenants) for the period then ended and whether any Event of Default exists, and, if so, the nature thereof and the corrective measures the Borrower proposes to take.  As used in this Agreement, if the Borrower is not a natural person, “Financial Statements” means the Borrower’s consolidated and, if required by the Bank in its sole discretion, consolidating balance sheets, income statements and statements of cash flows for the year, month or quarter together with year-to-date figures and comparative figures for the corresponding periods of the prior year.

4.3.  Annual Financial Statements and Tax Returns.  Furnish the Borrower’s year end consolidated Financial Statements to the Bank within 120 days after the end of each fiscal year.  Those Financial Statements will be prepared on an audited basis in accordance with GAAP by an independent certified public accountant selected by the Borrower and satisfactory to the Bank.  Audited Financial Statements shall contain the unqualified opinion of an independent certified public accountant and all accountant examinations shall have been made in accordance with GAAP consistently applied from period to period.  In addition, the Borrower will furnish to the Bank within 30 days, after their filing with the Internal Revenue Service, copies of the Borrower's federal income tax returns and all attachments and schedules thereto.

4.4.  Monthly Reports; Other Reports and Information.  Furnish the Bank within 20 days after the end of each month, (i) a detailed schedule/aging report of Accounts (as defined in the Borrowing Base Rider), detailing the amounts due from each Account Debtor (as defined in the Borrowing Base Rider) as of the last day of the previous month; (ii) an accounts payable aging analysis as of the last day of the previous month; (iii) an inventory report as of the last day of the previous month; and (iv) a Borrowing Base Certificate (as defined in the Borrowing Base Rider) as of the last day of the previous month, each in form and substance satisfactory to the Bank.  Further, if requested by the Bank, the Borrower shall promptly provide to the Bank such other information, reports, contracts, invoices, statements, listings, budgets, forecasts and other data concerning the Borrower and the Collateral as the Bank may request from time to time.

4.5  Payment of Taxes and Other Charges.  Pay and discharge when due all indebtedness and all taxes, assessments, charges, levies and other liabilities imposed upon the Borrower, its income, profits, property or business, except those which currently are being contested in good faith by appropriate proceedings and for which the Borrower shall have set aside adequate reserves or made other adequate provision with respect thereto acceptable to the Bank in its sole discretion.

4.6.  Maintenance of Existence, Operation and Assets.  Do all things necessary to (i) maintain, renew and keep in full force and effect its organizational existence and all rights, permits and franchises necessary to enable it to continue its business as currently conducted; (ii) continue in operation in substantially the same manner as at present; (iii) keep its properties in good operating condition and repair; and (iv) make all necessary and proper repairs, renewals, replacements, additions and improvements thereto.

4.7.  Insurance.  Maintain, with financially sound and reputable insurers, insurance with respect to its property and business against such casualties and contingencies, of such types and in such amounts,  as is customary for established companies engaged in the same or similar business and similarly situated.  In the event of a conflict between the provisions of this Section and the terms of any Security Documents relating to insurance, the provisions in the Security Documents will control.

 

  

- 5 -

  

 

4.8.  Compliance with Laws.  Comply with all laws applicable to the Borrower and to the operation of its business (including without limitation any statute, ordinance, rule or regulation relating to employment practices, pension benefits or environmental, occupational and health standards and controls).

4.9.  Bank Accounts.  Establish by December 1, 2011, and maintain at the Bank thereafter, the Borrower’s primary depository accounts.

4.10.  Financial Covenants.  Comply with all of the financial and other covenants, if any, set forth on the Addendum attached hereto.

 

4.11.  Additional Reports.  Provide prompt written notice to the Bank of the occurrence of any of the following (together with a description of the action which the Borrower proposes to take with respect thereto):  (i) any Event of Default or any event, act or condition which, with the passage of time or the giving of notice, or both, would constitute an Event of Default (a “Default”), (ii) any litigation filed by or against the Borrower, which seeks damages in excess of $100,000, (iii) any Reportable Event or Prohibited Transaction with respect to any Employee Benefit Plan(s) (as defined in ERISA), (iv) any event which might reasonably be expected to result in a material adverse change in the business, assets, operations, condition (financial or otherwise) or results of operation of the Borrower or (v) any change in the name of the Borrower, within three (3) business days of such change.

4.12  Field Examinations.  The Bank may, in its sole discretion, conduct field examinations, audits and/or appraisals of the Borrower's facilities and the Collateral, the results of which shall be satisfactory to the Bank and the Borrower, which, in the absence of an Event of Default, shall not be more often than once each quarter. If the Bank elects to conduct any such field examination, audit and/or appraisal, Borrower shall make its facilities, books and records available to the Bank or its representatives for such purposes and shall cause its officers and employees to give full cooperation and assistance in connection therewith, at any reasonable time during normal business hours.  The Borrower shall promptly reimburse the Bank for all reasonable costs incurred in connection with such field examinations, audits and/or appraisals.  If there shall exist an Event of Default, and/or at any other time when the Bank, in its reasonable judgment, deems necessary, the Bank may, in its sole discretion, conduct such field examinations, audits and/or appraisals more often than quarterly, the results of which shall be satisfactory to the Bank.  In such event, Borrower shall cause its officers and employees to give full cooperation and assistance in connection therewith and shall promptly reimburse the Bank for all reasonable costs incurred in connection therewith.

4.13  Publicly Traded.  The Borrower will maintain at all times during the term hereof its listing on the NYSE Euronext or other national security exchange and its common stock shall at all times be listed for public trading thereon.

5.  Negative Covenants.  The Borrower covenants and agrees that from the date of this Agreement until all Obligations have been paid in full and any commitments of the Bank to the Borrower have been terminated, except as set forth in the Addendum, the Borrower will not, without the Bank’s prior written consent:

5.1.  Indebtedness. Create, incur, assume or suffer to exist any indebtedness for borrowed money other than :  (i) the Loan and any other indebtedness to the Bank (including without limitation, the Equipment Loan, as hereinafter defined), (ii) indebtedness incurred in connection with the Bonds, as defined herein, and (iii) open account trade debt incurred in the ordinary course of business and not past due.

5.2.  Liens and Encumbrances.  Except as provided in Section 3.6, and other than licenses of patents, create, assume, incur or permit to exist any mortgage, pledge, encumbrance, security interest, lien or charge of any kind upon any of its property, now owned or hereafter acquired, or acquire or agree to acquire any kind of property subject to any conditional sales or other title retention agreement, except liens securing purchase money indebtedness and liens which are subordinate to the security interest of the Bank hereunder and under the other Loan Documents.

 

  

- 6 -

  

 

5.3.  Guarantees.  Guarantee, endorse or become contingently liable for the obligations of any person, firm, corporation or other entity, except in connection with the endorsement and deposit of checks in the ordinary course of business for collection.

5.4.  Loans or Advances.  Purchase or hold beneficially any stock, other securities or evidences of indebtedness of, or make or have outstanding, any loans or advances to, or otherwise extend credit to, or make any investment or acquire any interest whatsoever in, any other person, firm, corporation or other entity, except investments disclosed on the Borrower’s Historical Financial Statements or acceptable to the Bank in its sole discretion.

5.5.  Merger or Transfer of Assets.  Liquidate or dissolve, or merge or consolidate with or into any person, firm, corporation or other entity, or sell, lease, transfer or otherwise dispose of all or any substantial part of its property, assets, operations or business, whether now owned or hereafter acquired, except the sale of inventory in the ordinary course of Borrower’s business.

5.6.  Change in Business.  Make or permit any change in its form of organization or the nature of its business as carried on as of the date hereof.

5.7.  Acquisitions.  Make acquisitions of all or substantially all of the property or assets of any person, firm, corporation or other entity.

5.8  Restriction on Transfer or Encumbrance of Intellectual Property.  During the term of this Agreement, and other than licenses of patents, the Borrower shall not, without the prior written consent of the Bank, sell, convey, assign or otherwise transfer or mortgage, pledge, hypothecate or otherwise encumber any of its intellectual property, including, without limitation, patents, patent applications, copyrights, copyright applications, tradenames, trademarks, service marks and trademark applications.

6.  Events of Default.  The occurrence of any of the following will be deemed to be an Event of Default:

6.1.  Covenant Default.  The Borrower defaults in the performance of any of the financial covenants contained in the Addendum to this Agreement.  The Borrower defaults in the performance of any of the other covenants or agreements contained in this Agreement which is capable of being cured, and which default is not cured within fifteen (15) days after the earlier of the date on which (a) any officer of the Borrower becomes aware of such default or (b) written notice thereof shall have been given to the Borrower by the Bank; or any default occurs under the Borrowing Base Rider, including without limitation, the Borrowing Base formula is violated.

6.2.  Breach of Warranty.  Any Financial Statement, representation, warranty or certificate made or furnished by the Borrower to the Bank in connection with this Agreement shall be false, incorrect or incomplete when made.

6.3.  Other Default Under Loan Documents.  The occurrence of an Event of Default as defined in the Note, the Security Documents or any of the other Loan Documents which remains uncured after the expiration of any applicable grace or cure period.

6.4.  Default Under Other Loans.  The occurrence of a default or an event of default under any and all further or future loans or advances extended by the Bank to the Borrower from time to time, including, without limitation, the non-revolving line of credit loan convertible to a term loan facility (the "Equipment Loan") extended to the Borrower simultaneously herewith pursuant to that certain Equipment Line Loan Agreement of even date herewith between the Borrower and the Bank (as amended, modified, supplemented, restated or replaced from time to time, the "Equipment Loan Agreement"), or any of the documents executed in connection therewith which remains uncured after the expiration of any applicable grace or cure period.

 

  

- 7 -

  

 

6.5  Default Under Bond Documents  The occurrence of a default or an event of default under the Credit Agreement of even date herewith, between the Borrower and the Bank relating to the Pinellas County Industrial Development Authority Industrial Revenue Bonds (Bovie Medical Corporation Project) Series 2008 (the "Bonds"), or any other documents executed in connection therewith or with the Bonds (collectively, the "Bond Documents") which remains uncured after the expiration of any applicable grace or cure period.

6.6  Default Under Other Credit Accommodations.  Any default shall occur under any other loans, advances, debts, liabilities, leases, obligations or credit accommodations of any kind or nature, present or future, extended to the Borrower by the Bank or any other direct or indirect subsidiary of The PNC Financial Services Group, Inc., including, without limitation, PNC Equipment Finance, LLC which remains uncured after the expiration of any applicable grace or cure period.

6.7  Material Adverse Effect. The occurrence of any event which could reasonably be expected to result in a Material Adverse Effect.  For purposes hereof, "Material Adverse Effect" shall mean, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences whether or not related, a material adverse change in, or a material adverse effect on, (a) the business, results of operations, financial condition, assets or liabilities of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower to perform any of its obligations under the Loan Documents, (c) the rights and remedies of the Bank under any of the Loan Documents or (d) the legality, validity or enforceability of any of the Loan Documents, except for general economic conditions and the conditions of the financial markets.

Upon the occurrence of an Event of Default, the Bank will have all rights and remedies specified in the Note, the Security Documents and the other Loan Documents and all rights and remedies (which are cumulative and not exclusive) available under applicable law or in equity.

7.  Conditions.  The Bank’s obligation to make the initial advance under the Loan is subject to the conditions that as of the date of the advance:

7.1.  No Event of Default.  No Event of Default or event which with the passage of time, the giving of notice or both would constitute an Event of Default shall have occurred and be continuing;

7.2.  Authorization Documents.  The Bank shall have received certified copies of resolutions of the board of directors of the Borrower authorizing the obtaining of the Loan, the entering into of any Master Agreement, the pledging of the assets of the Borrower as collateral for the Loan and the Hedge Obligations, as provided for herein, the execution of this Agreement, the Note, the Security Agreement and the other Loan Documents; or other proof of authorization satisfactory to the Bank; and

7.3.  Receipt of Loan Documents.  The Bank shall have received the Loan Documents and such other instruments and documents which the Bank may reasonably request in connection with the transactions provided for in this Agreement, which may include an opinion of counsel in form and substance satisfactory to the Bank for any party executing any of the Loan Documents.

7.4.  Receipt of Commitment Fee.  The Bank shall have received the non-refundable commitment fee in the aggregate amount of twenty-five (25) basis points (i.e., 0.25%) of the Loan and costs as reflected in the Closing Statement.

7.5.  Payment of Bank's Counsel's Fees and Costs.  The Bank's counsel, Akerman Senterfitt, shall have received payment of all of its fees and costs as reflected in the Closing Statement.

7.6.  Evidence of Termination of Existing Indebtedness.  The Bank shall have received evidence satisfactory to the Bank of repayment and termination of all existing indebtedness to and termination of all existing liens in favor of RBC Bank (USA).

 

  

- 8 -

  

 

7.7.  Satisfaction of Other Commitment Letter Conditions.  All other conditions precedent contained in the commitment letter dated September 23, 2011 and the Term Sheet attached thereto issued by the Bank to the Borrower shall have been completed and/or satisfied to the Bank's satisfaction.

8.  Expenses.  The Borrower agrees to pay the Bank, upon the execution of this Agreement, and otherwise on demand, all costs and expenses incurred by the Bank in connection with the preparation, negotiation and delivery of this Agreement and the other Loan Documents, and any modifications thereto, and the collection of all of the Obligations, including but not limited to enforcement actions, relating to the Loan, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions or proceedings arising out of or relating to this Agreement, including reasonable fees and expenses of counsel (which may include costs of in-house counsel), expenses for auditors, appraisers and environmental consultants, lien searches, recording and filing fees and taxes.

9.  Increased Costs.  On written demand, together with written evidence of the justification therefor, the Borrower agrees to pay the Bank all direct costs incurred and any losses suffered or payments made by the Bank as a consequence of making the Loan available and making Advances thereunder by reason of any change in law or regulation, or the interpretation thereof, imposing any reserve, deposit, allocation of capital or similar requirement (including without limitation, Regulation D of the Board of Governors of the Federal Reserve System) on the Bank, its holding company or any of their respective assets.

10.  Miscellaneous.

 

10.1.  Notices: All notices, demands, requests, consents, approvals and other communications required or permitted hereunder (“Notices”) must be in writing and will be effective upon receipt.  Notices may be given in any manner to which the parties may separately agree, including electronic mail.  Without limiting the foregoing, first-class mail, facsimile transmission and commercial courier service are hereby agreed to as acceptable methods for giving Notices.  Regardless of the manner in which provided, Notices may be sent to a party’s address as set forth above or to such other address as any party may give to the other for such purpose in accordance with this section.

10.2.  Preservation of Rights.  No delay or omission on the Bank’s part to exercise any right or power arising hereunder will impair any such right or power or be considered a waiver of any such right or power, nor will the Bank’s action or inaction impair any such right or power.  The Bank’s rights and remedies hereunder are cumulative and not exclusive of any other rights or remedies which the Bank may have under other agreements, at law or in equity.

10.3.  Illegality. If any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, it shall not affect or impair the validity, legality and enforceability of the remaining provisions of this Agreement.

10.4.  Changes in Writing.  No modification, amendment or waiver of, or consent to any departure by the Borrower from, any provision of this Agreement will be effective unless made in a writing signed by the party to be charged, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No notice to or demand on the Borrower will entitle the Borrower to any other or further notice or demand in the same, similar or other circumstance.

10.5.  Entire Agreement.  This Agreement (including the documents and instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.

10.6.  Counterparts.  This Agreement may be signed in any number of counterpart copies and by the parties hereto on separate counterparts, but all such copies shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart.  Any party so executing this Agreement by facsimile transmission shall promptly deliver a manually executed counterpart, provided that any failure to do so shall not affect the validity of the counterpart executed by facsimile transmission.

 

  

- 9 -

  

 

10.7.  Successors and Assigns.  This Agreement will be binding upon and inure to the benefit of the Borrower and the Bank and their respective heirs, executors, administrators, successors and assigns; provided, however, that the Borrower may not assign this Agreement in whole or in part without the Bank’s prior written consent and the Bank at any time may assign this Agreement in whole or in part.

10.8.  Interpretation.  In this Agreement, unless the Bank and the Borrower otherwise agree in writing, the singular includes the plural and the plural the singular; words importing any gender include the other genders; references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute referred to; the word “or” shall be deemed to include “and/or”, the words “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; references to articles, sections (or subdivisions of sections) or exhibits are to those of this Agreement; and references to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications to such instruments, but only to the extent such amendments and other modifications are not prohibited by the terms of this Agreement.  Section headings in this Agreement are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.  Unless otherwise specified in this Agreement, all accounting terms shall be interpreted and all accounting determinations shall be made in accordance with GAAP.  If this Agreement is executed by more than one party as Borrower, the obligations of such persons or entities will be joint and several.

10.9.  No Consequential Damages, Etc.  The Bank will not be responsible for any damages, consequential, incidental, special, punitive or otherwise, that may be incurred or alleged by any person or entity, including the Borrower and any Guarantor, as a result of this Agreement, the other Loan Documents, the transactions contemplated hereby or thereby, or the use of the proceeds of the Loan.

10.10.  Assignments and Participations.  At any time, without any notice to the Borrower, the Bank may sell, assign, transfer, negotiate, grant participations in, or otherwise dispose of all or any part of the Bank’s interest in the Loan.  The Borrower hereby authorizes the Bank to provide, without any notice to the Borrower, any information concerning the Borrower, including information pertaining to the Borrower’s financial condition, business operations or general creditworthiness, to any person or entity which may succeed to or participate in all or any part of the Bank’s interest in the Loan.

10.11.  Governing Law and Jurisdiction.  This Agreement has been delivered to and accepted by the Bank and will be deemed to be made in the State of Florida.  THIS AGREEMENT WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA, EXCLUDING ITS CONFLICT OF LAWS RULES.  The Borrower hereby irrevocably consents to the exclusive jurisdiction of any state or federal court in the county or judicial district where the Bank’s office indicated above is located; provided that nothing contained in this Agreement will prevent the Bank from bringing any action, enforcing any award or judgment or exercising any rights against the Borrower individually, against any security or against any property of the Borrower within any other county, state or other foreign or domestic jurisdiction.  The Bank and the Borrower agree that the venue provided above is the most convenient forum for both the Bank and the Borrower.  The Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Agreement.

10.12.  USA Patriot Act Notice.  Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account or obtains a loan.  The first time a borrower requests a loan, the Bank will ask for the borrower's legal name, address, tax ID or social security number and other identifying information.  The Bank may ask for copies of business licenses, governing documents or other documents evidencing the existence and good standing of the entity.  For individuals (including sole proprietors and general partners of general partnerships) the Bank will ask for the date of birth, and may also ask to see and retain a copy of a driver's license or other identifying documents.  The Borrower acknowledges that the Bank may from time to time request such documents and information in order to comply with such federal law and the Borrower agrees to promptly provide same to the Bank upon request.

 

  

- 10 -

  

 

10.13.  Electronic Transmission of Data.  The Bank and the Borrower agree that certain data related to the Obligations (including confidential information, documents, applications and reports) may be transmitted electronically, including transmission over the internet.  This data may be transmitted to, received from or circulated among agents and representatives of the Borrower and the Bank and their respective Affiliates and other persons involved with the subject matter of this Agreement.  The Borrower acknowledges and agrees that (a) there are risks associated with the use of electronic transmission and that the Bank does not control the method of transmittal or service providers, (b) the Bank has no obligation or responsibility whatsoever and assumes no duty or obligation for the security, receipt or third party interception of any such transmission unless caused solely by its gross negligence or intentional misconduct, and (c) the Borrower will release, hold harmless and indemnify the Bank from any claim, damage or loss, including that arising in whole or part from the Bank's strict liability or sole, comparative or contributory negligence, which is related to the electronic transmission of data excluding matters arising solely from the gross negligence or intentional misconduct of Bank.

REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

 

  

- 11 -

  

10.14.  WAIVER OF JURY TRIAL.  EACH OF THE BORROWER AND THE BANK IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS.  THE BORROWER AND THE BANK ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

The Borrower acknowledges that it has read and understood all the provisions of this Agreement, including the waiver of jury trial, and has been advised by counsel as necessary or appropriate.

WITNESS the due execution hereof as a document, as of the date first written above.

	
Signed and delivered in the presence of:

	
BORROWER:

 

	 	 	
BOVIE MEDICAL CORPORATION,

	 	 	
a Delaware corporation

	 	 	 	 
	 	 	 	 	 
	 	 	
By:   

	 
	
Print Name:  

	 	 	 	
Name:  

	 
	 	 	 	
Title:

	 

 

	 	 	 	 
	
Print Name:  

	 	 	 	 	 

 

	 	 	

BANK:

	 	 	 
	 	 	
PNC BANK, NATIONAL ASSOCIATION

	 	 	 	 
	 	 	 	 	 
	 	 	
By:  

	 
	 	 	 	 	
Name:  

	 
	 	 	 	
Title:

	 

 

  

- 12 -

  

 

ADDENDUM

ADDENDUM to that certain Revolving Loan Agreement dated October 31, 2011 (the "Agreement"), between Bovie Medical Corporation as the Borrower, and PNC Bank, National Association, as the Bank.  Capitalized terms used in this Addendum and not otherwise defined shall have the meanings given them in the Agreement.  Section numbers below refer to the sections of the Agreement.

 

3.6  Title to Assets. Describe additional liens and encumbrances below:

Liens on pari passu basis in favor of the Bank to secure the Equipment Loan extended to the Bank under the Equipment Loan Agreement and the obligations of the Borrower under the Bond Documents.

 

	
Secured Party

	
Filing Information

	
Collateral

	
Cisco Systems Capital Corporation

	
Delaware

83939848  11/25/2009

	
Lease Agreement by and between Cisco Systems Capital Corporation and Bovie Medical Corporation on specific equipment

	
US Express Leasing, Inc.

	
Delaware

6269871 08/04/2006

	
Lease Agreement dated July 19, 2006

3.7  Litigation. Describe pending and threatened litigation, investigations, proceedings, etc. below:

The Financial Industry Regulatory Authority (“FINRA”) has conducted a review of trading activity in the Company common stock surrounding the November 4, 2010 news announcement that the Company applied for 510(k) clearance from the FDA to market its J-Plasma hand piece for additional uses and the November 9, 2010 news announcement that the Company filed additional patents for its J-Plasma hand piece and earnings for the quarter ended September 30, 2010.  In furtherance of this review,  FINRA requested certain information from the Company, which the Company responded to.  Notice was recently received that the inquiry is completed.

On July 9, 2010, Bovie filed a complaint in the United States District for the Middle District of Florida (Tampa division) naming Steven Livneh, who at the time was a director of the Company, and two of his related entities as defendants. In its complaint, the Company are seeking, among other things, a declaratory judgment from the Court concerning its rights under certain agreements entered into with the defendants in 2006 in connection with the acquisition of certain assets and technology, including intellectual property relating to the Company’s Seal-N-CutTM product. The Company is also seeking damages for breach of contract, breach of fiduciary duty by Mr. Livneh relating to his service as an officer and director of the Company, tortious interference with contractual relations, defamation, slander of title and injunctive relief.  Mr. Livneh filed a motion seeking to (a) dismiss the complaint or, in the alternative, to (b) transfer venue. On December 20, 2010 the court issued an order dismissing without prejudice five of our fifteen claims, due to New York being defined in the forum selection clauses in two of the underlying contracts with Mr. Livneh.  The Company re-filed these five claims in federal court in New York.  Mr. Livneh’s motion to dismiss the remaining claims in Florida was denied and the venue was not transferred.

 

  

  

  

On January 10, 2011 defendant Livneh filed a counter-complaint/third party complaint against the Company, its CEO, and COO, alleging fraud, fraud in the inducement, fraudulent misrepresentation, breach of fiduciary duty, negligent misrepresentation, innocent misrepresentation, breach of contract, tortuous interference, shareholder derivative, defamation, breach of good faith and fair dealing, violation of the Uniform Trade Secrets Act, and violation of the Florida Whistleblower’s Act, and seeking rescission and a declaratory judgment. In addition to the foregoing relief, defendant also seeks reinstatement of Mr. Livneh to the Company’s board of directors, issuance of certain shares of unrestricted stock, compensatory, actual and/or special damages, punitive and/or exemplary damages, and attorney’s fees and costs. Discovery in the matter is proceeding and a mediation has been scheduled for November 2011.

On September 19, 2011, Bovie Medical Corporation (the “Company”) was served in a purported stockholder derivative action that was filed in the United State District Court for the Middle District of Florida against the Company and certain of its present and former officers and directors.  The complaint asserts, among other things, breach of fiduciary duties and bad faith in relation to the management of the Company.  The complaint seeks, among other things, unspecified compensatory damages and various forms of equitable relief.  The Company is reviewing the allegations in the complaint but believes them to be frivolous and without merit and intends to defend the action vigorously.

An action was commenced by Darla Thompson in the 14th Judicial District, Parish of Calcasieu, State of Louisiana alleging product liability and seeking unspecified damages arising out of the use of a Bovie generator.  The Company’s insurance carrier is defending the claim subject to a $25,000 deductible.    The Company does not believe any award or settlement in this matter will be material.

 

  

  

  

CONTINUATION OF ADDENDUM

FINANCIAL COVENANTS

(1)  The Borrower will maintain a Fixed Charge Coverage Ratio as of the end of each fiscal quarter, on a rolling four quarters basis of at least 1.50:1.00, commencing with the fiscal quarter ending December 31, 2011.

(2) The Borrower will maintain at all times a ratio of total liabilities to Tangible Net Worth of less than 0.75:1.00, tested quarterly, as of the end of each fiscal quarter, commencing with the fiscal quarter ending December 31, 2011.

As used herein:

 “Current Maturities” means the scheduled payments of principal on all indebtedness for borrowed money having an original term of more than one year (including but not limited to amortization of capitalized lease obligations), as shown on the Borrower’s Financial Statements as of one year prior to the date of determination.

“EBITDA” means net income plus interest expense plus income tax expense plus depreciation plus amortization.

“Fixed Charge Coverage Ratio” means (i) EBITDA, divided by (ii) the sum of Current Maturities plus interest expense plus cash taxes paid plus dividends plus Unfunded Capital Expenditures.

“GAAP” means generally accepted accounting principles as defined by the Financial Accounting Standards Board as from time to time in effect that are consistently applied and, when used with respect to the Borrower, that are consistent with the accounting practice of the Borrower, reflected in the Financial Statements for the Borrower, with such changes as may be approved by an independent public accountant satisfactory to the Bank.

“Tangible Net Worth” means stockholders' equity in the Borrower less any advances to affiliated parties less all items properly classified as intangibles, in accordance with GAAP.

“Unfunded Capital Expenditures” means capital expenditures made from the Borrower’s funds other than funds borrowed as term debt to finance such capital expenditures.

All of the above financial covenants shall be computed and determined in accordance with GAAP applied on a consistent basis (subject to normal year-end adjustments).

 

  

  

  

 

	Request for Advance 

Advance Number  _______

	 

 

BOVIE MEDICAL CORPORATION (the “Borrower”) hereby requests an advance in the amount of $__________________ under the Revolving Line of Credit Note in the face amount of $6,000,000.00 executed by the Borrower and delivered to PNC BANK, NATIONAL ASSOCIATION (the “Bank”), dated October 31, 2011 (the “Note”).  Initially capitalized words and terms used herein without definition shall have the respective meanings assigned to them in the Note.

To induce the Bank to make such advance, the Borrower hereby represents and agrees as follows:

1.  The advance hereby requested is for the following purpose (check one) :

	
  

	
    

	
Working Capital Purposes

	
  

	
    

	
Other  General Corporate Purposes:

 

2.  No Event of Default exists and no event has occurred which with the passage of time, notice or both would constitute an Event of Default.

3.  The approval of this Request for Advance by the Bank will not be deemed to be a waiver by the Bank of any Event of Default.

4.  The Borrower has performed all of its obligations under the Loan Documents, and all of the representations and warranties made by the Borrower in the Loan Documents are true and correct as of the date hereof.

5.  The undersigned has been duly authorized by the Borrower to make this request for advance.

WITNESS the due execution hereof with the intent to be legally bound hereby as of this _____ day of _______________, _____.

 

	 	 	
BOVIE MEDICAL CORPORATION,

	 	 	
a Delaware corporation

	 	 	 	 	 
	 	 	
By:  

	 
	 	 	 	
Name:  

	 
	 	 	 	
Title:

	 

 

  

  

  

 

	

Borrowing Base Rider

	

 

THIS BORROWING BASE RIDER (“Rider”) is executed as of the 31st day of October, 2011, by and between BOVIE MEDICAL CORPORATION, a Delaware corporation (the “Borrower”), with an address at 5115 Ulmerton Road, Clearwater, Florida  33760 and PNC BANK, NATIONAL ASSOCIATION (the “Bank”), with an address at 201 East Pine Street, Suite 200, Orlando, Florida  32801.  This Rider is incorporated into and made part of that certain Revolving Loan Agreement dated October 31, 2011, and Revolving Promissory Note dated October 31, 2011, and also into certain other financing documents and security agreements executed by and between the Borrower and the Bank (all such documents including this Rider are collectively referred to as the “Loan Documents”).  All initially capitalized terms not otherwise defined in this Rider shall have the same meanings assigned to such terms in the other Loan Documents.

Pursuant to the Loan Documents, the Bank has extended a “Facility” or “Loan” (as defined in the Loan Documents) to the Borrower, under which the Borrower may borrow, repay and reborrow funds at any time prior to the Expiration Date (such Facility or Loan being referred to herein as the “Facility”).  As a condition to the Bank’s willingness to extend the Facility to the Borrower, the Bank and the Borrower are entering into this Rider in order to set forth their agreement regarding the maximum amount which may be outstanding under the Facility at any time, and for the other purposes set forth below.

NOW, THEREFORE, with the foregoing background deemed incorporated by reference and made a part hereof, the parties hereto, intending to be legally bound, covenant and agree as follows:

1.           Limitations on Borrowings Under Facility.  Notwithstanding any provision to the contrary in any of the other Loan Documents, at no time shall the aggregate principal amount of indebtedness outstanding at any one time under the Facility exceed the Borrowing Base (as hereinafter defined) at such time.  If at any time the aggregate principal amount of indebtedness outstanding under the Facility exceeds the limitations set forth in this Section 1 for any reason, then the Borrower shall immediately repay the amount of such excess to the Bank in immediately available funds.

2.           Borrowing Base Certificates.  In addition to any and all provisions of the other Loan Documents which establish conditions to the Borrower’s ability to request and obtain any advance under the Facility, the Borrower may not request an advance under the Facility unless a Borrowing Base Certificate (as hereinafter defined) shall have been delivered to the Bank on or before the twentieth (20th) day of each month.

3.           Certain Defined Terms.  In addition to the words and terms defined elsewhere in this Rider or in the other Loan Documents, the following words and terms, as used in this Rider, shall have the following meanings:

“Account” shall mean an "account" or a "general intangible" as defined in the Florida Uniform Commercial Code, whether now owned or hereafter acquired or arising.

“Account Debtor” shall mean, with respect to any Account, each Person who is obligated to make payments to the Borrower on such Account.

“Affiliate” of the Borrower or any Account Debtor shall mean (a) any Person who (either alone or with a group of Persons, and either directly or indirectly through one or more intermediaries) is in control of, is controlled by or is under common control with the Borrower or such Account Debtor, (b) any director, officer, partner, employee or agent of the Borrower or such Account Debtor, and (c) any member of the immediate family of any natural person described in the preceding clauses (a) and (b).  A Person or group of Persons shall be deemed to be in control of the Borrower or an Account Debtor when such Person or group of Persons possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the Borrower or such Account Debtor, whether through the ownership of voting securities, by contract or otherwise.

 

  

Rider - Page 1

  

 

“Borrowing Base” at any time shall mean the lesser of (a) $6,000,000.00 (the maximum principal amount of the Facility) and (b) the sum of (i) 80% of Qualified Accounts at such time and (ii) 50% of Qualified Inventory at such time; provided, however, that availability created by Qualified Inventory shall not exceed the lesser of (i) $3,000,000.00 or (ii) the availability provided by Qualified Accounts  The value of Qualified Accounts and Qualified Inventory at any time shall be determined by reference to the most recent Borrowing Base Certificate delivered by the Borrower to the Bank; provided, however, in no event may the Borrowing Base Certificate be more than thirty (30) days old.

“Borrowing Base Certificate” shall mean each Borrowing Base Certificate to be delivered by the Borrower to the Bank pursuant to Section 2 of this Rider, in substantially the form attached as Exhibit A to this Rider, executed by the Borrower and with blanks appropriately completed, as amended, supplemented or otherwise modified from time to time.

“Eligible Location” shall mean one of the addresses in the United States of America at which the Borrower maintains, keeps or stores Inventory, as listed in the Security Agreement executed and delivered by the Borrower and the Bank in connection with the Facility, and, if such location is leased by the Borrower, for which the Bank has received a landlord’s waiver acceptable to the Bank.  The Borrower and the Bank may agree jointly to add other addresses of the Borrower to such list at any time by executing and delivering a substitute list of addresses under said Security Agreement.  The Bank may in its discretion at any time determine that any address on such list shall no longer be an Eligible Location, by giving written notice of such determination to the Borrower.

“Inventory” shall mean “inventory” as defined in the Uniform Commercial Code as in effect in the jurisdiction whose Law governs the perfection of the Bank’s security interest therein, whether now owned or hereafter acquired and wherever located.

“Law” shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of any Official Body.

“Lien” shall mean any mortgage, pledge, security interest, bailment, encumbrance, claim, lien or charge of any kind, including any agreement to give any of the foregoing, any conditional sale or other title retention agreement and any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code.

“Official Body” shall mean any government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of any government or political subdivision, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic.

“Payment Intangible” shall mean a “payment intangible” as defined in the Florida Uniform Commercial Code.

“Person” shall mean an individual, sole proprietorship, corporation, partnership (general or limited), trust, business trust, limited liability company, unincorporated organization or association, joint venture, joint-stock company, Official Body, or any other entity of whatever nature.

“Qualified Accounts” shall mean Accounts which are and at all times continue to be acceptable to the Bank in its sole discretion.  Standards of acceptability include but are not limited to the following conditions:

(a)           The Account duly complies with all applicable Laws, whether Federal, state or local, including but not limited to usury Laws, the Federal Truth in Lending Act, the Federal Consumer Credit Protection Act, the Fair Credit Billing Act, and Regulation Z of the Board of Governors of the Federal Reserve System;

 

  

Rider - Page 2

  

 

(b)           The Account was not originated in, and is not subject to the Laws of, a jurisdiction whose Laws would make the account or the grant of the security interest in the Account to the Bank unlawful, invalid or unenforceable;

(c)           The Account was originated by the Borrower in connection with the sale of goods or the rendering of services by the Borrower in the ordinary course of business under an enforceable contract, and such sale has been consummated and such goods have been delivered or such services have been rendered so that the performance of such contract has been completed by the Borrower and by all parties other than the Account Debtor;

(d)           The Account is evidenced by a written invoice or other documentation and arises from a contract, all of which are in form and substance satisfactory to the Bank;

(e)           The Account does not arise out of a contract with, or order from, an Account Debtor that, by its terms, forbids or makes void or unenforceable the grant of the security interest by the Borrower to the Bank in and to the Account arising with respect thereto;

(f)           The title of the Borrower to the Account and, except as to the Account Debtor, to any related goods is absolute and is not subject to any Lien except Liens in favor of the Bank;

(g)          The Account provides for payment in United States Dollars by the Account Debtor;

(h)          The Account shall have amounts owing that are not less than the amounts represented by the Borrower;

(i)            The portion of the Account for which income has not yet been earned or which constitutes unearned discount, service charges or deferred interest shall be ineligible;

(j)            The Account shall be eligible only to the extent that it is not subject to any defense, claim of reduction, counterclaim, set-off, recoupment, or any dispute or claim for credits, allowances or adjustments by the Account Debtor because of returned, inferior, damaged goods or unsatisfactory services, or for any other reason;

(k)           The goods the sale of which gave rise to the Account were shipped or delivered or provided to the Account Debtor on an absolute sale basis and not on a bill and hold sale basis, a consignment sale basis, a guaranteed sale basis, a sale or return basis, or on the basis of any other similar terms making the Account Debtor’s payment obligations conditional;

(l)            The Account Debtor has not returned, rejected or refused to retain, or otherwise notified the Borrower of any dispute concerning, or claimed nonconformity of, any of the goods from the sale of which the Account arose;

(m)          No default exists under the Account by any party thereto, and all rights and remedies of the Borrower under the Account are freely assignable by the Borrower;

(n)          The Account has not been outstanding for more than ninety (90) days past the invoice date and is not subject to “dating” terms;

(o)          The Account shall be ineligible if 25% or more of the accounts of the related Account Debtor and its Affiliates are more than ninety (90) days past due from the date of original invoice therefor;

(p)          The Account shall be ineligible to the extent that the aggregate amount of all the Accounts of the Account Debtor and its Affiliates exceed 25% of all of the Borrower’s Accounts;

 

  

Rider - Page 3

  

 

(q)          The Borrower has not received any note, trade acceptance, draft, chattel paper or other instrument with respect to, or in payment of, the Account, unless, if any such instrument has been received, the Borrower immediately notifies the Bank and, at the Bank’s request, endorses or assigns and delivers such instrument to the Bank;

(r)           The Borrower has not received any notice of (i) the death of the Account Debtor, if an individual, or of a partner or member thereof if a partnership or a limited liability company, (ii) the filing by or against the Account Debtor of any proceeding in bankruptcy, receivership, insolvency, reorganization, liquidation, conservatorship or any similar proceeding, or (iii) any assignment by the Account Debtor for the benefit of creditors.  Upon receipt by the Borrower of any such notice, it will give the Bank prompt written notice thereof;

(s)          The Account Debtor is not an Affiliate of the Borrower;

(t)           The Account shall be ineligible if the related Account Debtor is domiciled in any country other than the United States of America or the Province of Ontario, Canada, or a Province of Canada which has adopted and has in effect the Personal Property Security Act, unless such Account is supported by a documentary letter of credit, duly assigned to and in the possession of the Bank, from a financial institution acceptable to the Bank and the terms and conditions of which are acceptable to the Bank;

(u)          The Account shall be ineligible if the Account Debtor is an Official Body, unless the Borrower shall have taken all actions deemed necessary by the Bank in order to perfect the Bank’s security interest therein, including but not limited to any notices or filings required under the Assignment of Claims Act of 1940, as amended, or other applicable Laws;

(v)          The Bank has not deemed such Account ineligible because of uncertainty about the creditworthiness of the Account Debtor (including, without limitation, unsatisfactory past experiences of the Borrower or the Bank with the Account Debtor or unsatisfactory reputation of the Account Debtor) or because the Bank otherwise makes a determination that the collateral value of the Account to the Bank is impaired or that the Bank’s ability to realize such value is insecure;

(w)          The Account shall be eligible only to the extent that the amount owing on the Account is not a Payment Intangible; and

(x)           The Account shall comply with the additional eligibility standards, if any, which are set forth on Exhibit B to this Rider.Standards of acceptability shall be fixed and may be revised from time to time solely by the Bank in its exclusive judgment.  In the case of any dispute about whether an Account is or has ceased to be a Qualified Account, the decision of the Bank shall be final.

“Qualified Inventory” shall mean the Borrower’s Inventory of saleable raw materials and finished goods manufactured or acquired by the Borrower in the ordinary course of business, subject to its control or sole possession, stored in an Eligible Location and in a manner acceptable to the Bank, valued at the lower of cost or market value (determined on a first-in, first-out basis), which is not subject to any Lien except Liens in favor of the Bank, which complies with the additional eligibility standards, if any, which are set forth on Exhibit B to this Rider, and which is and at all times continues to be acceptable to the Bank.  Standards of acceptability shall be fixed and may be revised from time to time exclusively by the Bank in its sole discretion.  In the case of any dispute about whether Inventory is or has ceased to be Qualified Inventory, the decision of the Bank shall be final.

4.           Governing Law.  This Rider will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the State of Florida, excluding its conflicts of laws rules.

 

  

Rider - Page 4

  

 

5.           Counterparts.  This Rider may be signed in any number of counterpart copies and by the parties hereto on separate counterparts, but all such copies shall constitute one and the same instrument.  Delivery of an executed counterpart of a signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart.  Any party so executing this Agreement by facsimile transmission shall promptly deliver a manually executed counterpart, provided that any failure to do so shall not affect the validity of the counterpart executed by facsimile transmission.

REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

 

  

Rider - Page 5

  

 

WITNESS the due execution hereof as a document as of the date first written above.

 

	
Signed and delivered in the presence of:

	
BORROWER:

 

	 	 	
BOVIE MEDICAL CORPORATION,

	 	 	
a Delaware corporation

	 	 	 	 	 
	 	 	
By:  

	 
	
Print Name:  

	 	 	 	
Name:  

	 
	 	 	 	
Title:

	 

 

	 	 	 	 
	
Print Name:  

	 	 	 	 	 

 

	 	 	

BANK:

	 	 	 
	 	 	
PNC BANK, NATIONAL ASSOCIATION

	 	 	 	 	 
	 	 	
By:  

	 
	 	 	 	 	
Name:  

	 
	 	 	 	
Title:

	 

 

  

Rider - Page 6

  

 

EXHIBIT A

TO BORROWING BASE RIDER

Borrowing Base Certificate

 

  

  

  

 

Exhibit “A”

to Borrowing Base Rider

 

	  	
BBC#  

	  

	 	
BORRWING BASE CERTIFICATE

	  

	
Debtor: Bovie Medical Corporation

	
Submit Date:

	  
	  	  	  
	  	
Security Agreement Date:

	  

	
Statement of Collateral

	 	
Accts Rec (A)

As of:

10/31/11

	 	 	
Inventory (B)

As of: 

10/31/11

	 	 	
Total (A+B)

	 
	 	1.	 	
Gross Collateral from last report (line 5)

	 	 	 	 	 	 	 	 	 
	 	2.	 	
Plus: Sales (A) / Purchased Inventory (B)

	 	 	0.00	 	 	 	 	 	 	 
	 	3.	 	
Less: Collections (A) / Cost of Goods Sold (B)

	 	 	0.00	 	 	 	0.00	 	 	 	 
	 	4a.	 	
Less: Adjustments

	 	 	0.00	 	 	 	0.00	 	 	 	 
	 	4b.	 	
Plus: Adjustments

	 	 	0.00	 	 	 	0.00	 	 	 	 
	 	5.	 	
Gross collateral Value

	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 
	 	5a.	 	
Per A/R Aging/Inventory Back-up

	 	 	0.00	 	 	 	0.00	 	 	 	 	 
	 	5b.	 	
Difference (Should be zero-an explanation should be provided for any differences)

	 	 	0.00	 	 	 	0.00	 	 	 	 	 
	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 
	 	6.	 	
Less: Ineligibles as of ______

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	
A.  Past Due

	 	 	0.00	 	 	 	 	 	 	 	 	 
	 	 	 	
B.  Taint Rule 25%

	 	 	0.00	 	 	 	 	 	 	 	 	 
	 	 	 	
C.  Contra

	 	 	0.00	 	 	
***See Page 2***

	 	 	 	 	 
	 	 	 	
D.  Foreign (w/o L/C or Insurance)

	 	 	0.00	 	 	 	 	 	 	 	 	 
	 	 	 	
E.  Government

	 	 	0.00	 	 	 	 	 	 	 	 	 
	 	 	 	
F.  Other (See Page 2)

	 	 	0.00	 	 	 	0.00	 	 	 	 	 
	 	7.	 	
Total Ineligible

	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 
	 	8.	 	
Total Eligible A/R (A) / Inventory (B)

	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 
	 	9.	 	
Percentage of advance

	 	 	80	%	 	 	50	%	 	 	 	 
	 	10.	 	
Available A/R (A) / Inventory (B)

	 	 	0.00	 	 	 	0.00	 	 	 	 	 
	 	11.	 	
Lesser of Inventory Loan Value or Cap (see below) 1

	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 
	 	12.	 	
Plus: Misc Collateral

	 	 	0.00	 	 	 	100	%	 	 	0.00	 
	 	13.	 	
Less: Reserves, if any

	 	 	0.00	 	 	 	100	%	 	 	0.00	 
	 	14.	 	
Total Availability

	 	 	 	 	 	 	 	 	 	 	0.00	 
	 	15a.	 	
Outstanding L/C’s ($1MM Maximum)

	 	 	 	 	 	 	 	 	 	 	0.00	 
	 	15b.	 	
Loan balance (at month end)

	 	 	 	 	 	 	 	 	 	 	0.00	 
	 	16.	 	
Loan availability remaining (subject to loan maximum)

	 	 	 	 	 	 	 	 	 	 	0.00	 
	 	17.	 	
Authorized Loan Maximum

	 	 	 	 	 	 	 	 	 	 	6,000,000.00	 

	
Footnotes:

	 	
Lesser of the Inv Loan Value Reliance Ratio or Cap

	 
	
(1) Inventory value calculation:

	 	
Loan value of Inventory

	 	 	
50% Reliance Ratio

	 	 	
Dollar Cap

	 
	  	 	$	-	 	 	$	-	 	 	$	-	 

	
THIS BORROWING BASE CERTIFICATE is executed and delivered by the undersigned borrower (the “Borrower”) in favor of PNC BANK, NATIONAL ASSOCIATTION (the “Bank”), pursuant to a letter agreement or loan agreement dated as of _______________ ____, _____ (including any Borrowing Base Rider executed pursuant thereto and made a part thereof, and as amended or otherwise modified from time to time, the “Agreement”). All initially capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement. To induce the Bank to make loans and other financial accommodations available to the Borrower under the Agreement, the Borrower hereby certifies, represents and warrants to the Bank, as of the date hereof, that (a) the person signing below is an authorized officer or representative of the Borrower; (b) the statements below concerning the collateral securing the Obligations are true and complete; (c) the eligible collateral described below represents only Qualified Accounts and Qualified Inventory; (d) the Borrower is in compliance with all of the terms and provisions of the Agreement and the other Loan Documents; (e) all of the Borrower’s representations and warranties in the Agreement and the other Loan Documents are true and correct; and (f) no Event of Default has occurred and is continuing or exists.

	
By

	  	  
	
Bovie Medical Corporation

	  	
Name and Title

All Borrowing Base Certificates should be submitted to the bank no later than the 15th of the month following the month covered on the report (the latest closed month). Include standard back-up of A/R & A/P aging and inventory report if applicable.

 

  

  

  

 

EXHIBIT B

TO BORROWING BASE RIDER

The following shall constitute additional eligibility standards for Accounts, as fully as if set forth in the definition of “Qualified Accounts” in the Rider to which this Exhibit B is attached:

 

 

The following shall constitute additional eligibility standards for Inventory, as fully as if set forth in the definition of “Qualified Inventory” in the Rider to which this Exhibit B is attached:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}]]