Document:

Exhibit 10.12

 

 

 

Execution Copy

 

 

 

GRANT AGREEMENT

 

 

between

 

 

ARIZONA COMMERCE AUTHORITY,

an agency of the State of Arizona,

 

 

and

 

 

ACCELR8
TECHNOLOGIES CORPORATION,

a Colorado corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

     

     

    

   

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GRANT
AGREEMENT

THIS
GRANT AGREEMENT (the “Agreement”), dated to be effective as of August __, 2012 (the “Effective Date”),
is made by and between the ARIZONA COMMERCE AUTHORITY, an agency of the State of Arizona (together
with its successors and assigns, the “Authority”); and ACCELR8
TECHNOLOGIES CORPORATION, a Colorado corporation, (“Accelr8”). The Authority and Accelr8 are sometimes referred
to individually as a “Party,” and collectively, as the “Parties”.

RECITALS:

A.               
The Authority was established by the State of Arizona with a mission to provide private sector
leadership in growing and diversifying the economy of the State, and creating high quality employment in the State through expansion,
attraction and retention of businesses and marketing the State for the purpose of expansion, attraction and retention of business.

B.                
The Authority has the power and authority, inter alia, to provide grants to
qualifying businesses that promote the mission of the Authority.

C.                
Accelr8 has proposed the development, operation and expansion of a business enterprise
within the State (the “Project”). In its first three years from the Relocation Date, Accelr8 anticipates that
the Project will involve the creation of a significant number of new Qualified Jobs (as hereinafter defined), with highly competitive
average annual wages and a meaningful Capital Investment (as hereinafter defined). The Parties
acknowledge that the foregoing Qualified Jobs and Capital Investment may be created and/or funded, as applicable, by Accelr8 or
an affiliate thereof, including one of its subsidiaries.

D.               
Accelr8 is currently headquarted in Colorado, has evaluated the feasibility of developing
the Project in Arizona, Colorado and Michigan. In reliance upon the Grant (as hereinafter defined) from the Authority, as well
as other State- and County-sponsored incentives, Accelr8 has elected, in the exercise of its discretion and without any legal obligation
to do so, to locate the Project in Arizona. The Authority, in view of its mission to promote economic development in Arizona, and
based upon independent, third-party fiscal and economic impact projections for the Project commissioned and paid
for by the Authority (the “Economic Study”), wishes to incentivize Accelr8
to develop the Project in Arizona by offering a grant (pursuant to A.R.S. § 41-1545.02) to Accelr8 in the amount of $1,000,000.00
(the “Grant”) for use in the advancement of the Project, subject in full or in part to Accelr8 achieving the
conditions set forth herein, including the employment projections.

E.                
The Authority has determined, in the exercise of its informed judgment, and based upon
the Economic Study, that the objective value of the performance obligations of Accelr8 which have been bargained for in this Agreement,
including but not limited to Accelr8’s commitment to create the Qualified Jobs, exceeds the benefits conferred on Accelr8
by the Authority under this Agreement.

F.                 
The Parties agree and intend that the acts of the Parties described in and required
by this Agreement (including those acts which Accelr8 presently is neither obligated nor under any legal compulsion to do), are
specifically and expressly “bargained for” by and between the Parties as part of the Parties’ promised performance
to each other, and therefore constitute direct “consideration” to support this Agreement.

 

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G.               
The Authority has determined that Accelr8’s anticipated creation of Qualified Jobs (as
hereinafter defined) will enhance the economic vitality of Arizona by generating employment opportunities and tax revenues that
would not otherwise exist but for Accelr8’s development and implementation of the Project in Arizona pursuant to the terms
of this Agreement, and has further determined that the Grant will be of material benefit to Arizona in light of such employment
opportunities and revenues generated by the development and implementation of the Project in Arizona and potential future expansion
of the Project in this State.

H.               
In furtherance of the benefits it has concluded will be obtained by Arizona as a result of
the Grant, the Authority has agreed to make a separate Loan (as hereinafter defined) to Pima County, Arizona for the purpose of
funding certain real estate and building improvements to a facility in Tucson, Arizona that will house the Project.

I.                  
Based on the Grant and other considerations provided by the Authority, and acting in material
reliance thereon, Accelr8 has agreed to locate and develop the Project in Arizona.

AGREEMENT

NOW,
THEREFORE, in consideration of the mutual covenants, conditions, representations and warranties herein contained, and for other
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE
1: DEFINITIONS

1.1.           
Defined Terms. For purposes of this Agreement, the following terms shall have the meanings
ascribed to them below, unless the context requires otherwise:

1.1.1.           
“Accelr8” shall have the meaning set forth in the first grammatical paragraph
of this Agreement;

1.1.2.           
“Accelr8 Information” shall have the meaning set forth in Section 8.6;

1.1.3.           
“Accelr8’s Closing Affidavit” shall mean Accelr8’s Closing
Affidavit in form and substance satisfactory to the Authority, to be executed and delivered by Accelr8 to the Authority at the
Closing, substantially in the form attached hereto as Exhibit A;

1.1.4.           
 “Agreement” shall mean this Grant Agreement and all exhibits and supplements
hereto as it or they may be amended or supplemented from time to time as provided in this Agreement;

1.1.5.           
“Applicable Laws” shall mean the federal, state, county and
local laws (statutory and common law), ordinances, rules, regulations, permit requirements, and other requirements and official
policies of the State of Arizona (or any applicable political subdivision or agency thereof) which apply to the Project as of the
Effective Date;

 

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1.1.6.           
“Arizona Investment” shall mean compliance with all of the following:

A.   
As soon as reasonably practicable but in no case later than one year from the Effective Date,
Accelr8 shall relocate substantially all of its existing operations, including its corporate headquarters, to Arizona and shall
retain those currently-existing operations, together with expanded operations associated with the Project, in Arizona through the
Maturity Date; and

B.    
Within three years after the Relocation Date, the Project shall create in Arizona at least
65 new Qualified Jobs (“Qualified Jobs”) in Arizona and shall retain the new Qualified Jobs in Arizona through
the Maturity Date; and 

C.    
Within three years after the Relocation Date, Grantee shall make a Capital Investment (as
hereinafter defined) in the Project of at least $4,520,000.00.

1.1.7.           
“Authority” shall have the meaning set forth in the preamble of this Agreement;

1.1.8.           
“Business Day” shall mean any day of the year, excluding Saturday, Sunday
and any day which is a legal holiday or a day on which banking institutions are authorized by law or other governmental actions
to close and are actually closed in Phoenix, Arizona;

1.1.9.           
“Capital Investment” shall mean the
aggregate of all expenditures by or on behalf of Accelr8 (or an affiliate thereof) to acquire or lease real property, improve real
property, and acquire or lease tangible personal property that is (or will be) used
in operating or advancing the Project, including, but not limited to, land, buildings, machinery, equipment (whether located at
real property owned or leased by Accelr8 (or an affiliate) or used by Accelr8 (or an affiliate) personnel and fixtures (including
but not limited to any lease payments made by Accelr8 prior to the Maturity Date;

1.1.10.       
“Close Out Report” shall have the meaning described in Section 6.1.3;

1.1.11.       
“Corporate Succession” means (i) a sale or transfer of all or substantially
all of Accelr8’s business assets, (ii) a change in the form of business entity (or State of domestication) through which
Accelr8 conducts its business, or (iii) the merger or consolidation of Accelr8 with another
business entity, in each case where such entity assumes all liabilities and obligations
of Accelr8 hereunder, or (iv) the acquisition of all the outstanding capital stock of Accelr8
by another entity.

1.1.12.       
“Default” shall mean the happening or occurrence of any event or circumstance
which, with notice or the lapse of time, or both, would constitute an Event of Default as defined in this Agreement;

1.1.13.       
“Economic Study” shall have the meaning set forth in Recital D;

 

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1.1.14.       
“Effective Date” shall have the meaning set forth in the first grammatical
paragraph of this Agreement; 

1.1.15.       
“Event of Default” shall mean any of the events described in Section
8.1;

1.1.16.       
“Governmental Authority” shall mean, as applicable, the United States of
America, the State of Arizona, and any other political subdivision, agency, or instrumentality exercising jurisdiction over Accelr8;

1.1.17.       
“Grant” shall have the meaning set forth in Recital D;

1.1.18.       
“Grant Payments” shall mean the incremental payments of the Grant from
the Authority to Accelr8 pursuant to Milestone Grant Payments in accordance with the achievement of Milestones; 

1.1.19.       
“Loan” shall mean the loan in the amount of $700,000 to be made by the
Authority to Pima County, Arizona for the purpose of funding certain real estate and building improvements to a facility in Tucson,
Arizona;

1.1.20.       
“Maturity Date” shall mean the date which is five years from the Relocation
Date;

1.1.21.       
“Measurement Date” shall mean the date which is three years from the Relocation
Date;

1.1.1.              
“Milestone” shall mean generally one of Milestone One, Two, Three or Four
(each as hereinafter defined);

1.1.2.              
“Milestone One” shall mean Accelr8 completing the following:

(i)Relocation
of substantially all existing Accelr8 operations, including its corporate headquarters, to Arizona; and

(ii)Creation
of 15 Qualified Jobs;

1.1.3.              
 “Milestone Two” shall mean Accelr8 having created an aggregate of 30 Qualified
Jobs (including Qualified Jobs under Milestone One);

1.1.4.              
 “Milestone Three” shall mean Accelr8 having created an aggregate of 40
Qualified Jobs (including Qualified Jobs under Milestone One and Milestone Two);

1.1.5.              
“Milestone Four” shall mean the date that is the earlier of the
Measurement Date or the date upon which Accelr8 has completed both of the following:

(i) Created in excess of 65 Qualified
Jobs (including Qualified Jobs under Milestone One, Milestone Two and Milestone Three); and 

(ii)
Made a Capital Investment of at least $4,520,000.00.

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1.1.22.       
“Milestone One Grant Payment” shall mean a payment from the Authority (via
the Escrow Account) to Accelr8 equal to the product of the Multiplier x $250,000;

1.1.23.       
“Milestone Two Grant Payment” shall mean a payment from the Authority (via
the Escrow Account) to Accelr8 equal to the product of the Multiplier x $250,000;

1.1.24.       
“Milestone Three Grant Payment” shall mean a payment from the Authority
(via the Escrow Account) to Accelr8 equal to the product of the Multiplier x $250,000;

1.1.25.       
“Milestone Four Grant Payment” shall mean a payment from the Authority
(via the Escrow Account) to Accelr8 calculated as follows:

		(i)	the product of (the product of the total
number, not to exceed 65, of Qualified Jobs created and maintained through Milestone Four x $13,076.93) x the Multiplier;

plus

		(ii)	the product of $150,000 x
the quotient of the Capital Investment made to date, up to $4,520,000.00 ÷ $4,520,000;

minus

		(iii)	total Grant Payments made to date.

In
the event that the amount calculated under the foregoing formula is negative, Accelr8 shall be required to pay the additive
inverse of that amount to the Authority, which payment shall be due within ten Business Days after written notice thereof
to Accelr8.

1.1.26.       
“Multiplier” shall be the lesser of (i) 1 or (ii) the quotient of the average
annual wages (including salary, bonuses and other payments designated by any applicable taxing authority as personal income) of
all Qualified Jobs created by Accelr8 as of the applicable Milestone ÷ $70,000. For clarification, the determination of
average annual wages does not require Accelr8 to include all jobs across its workforce but only those that it designates in its
sole discretion as a Qualified Job for purposes of a Milestone;

1.1.27.       
“Notice and Cure Period” shall mean, as used in this Agreement, 5:00 p.m.
Arizona Time on the 60th day after the deemed receipt by Accelr8 from the Authority
or by the Authority from Accelr8, in accordance with Section 8.1, of a written
notice of failure to perform any covenant or agreement or to pay when due any payment of principal, interest, fees, late charges,
or other sums due under the this Agreement, during which 60-day period the payment may be made or the performance undertaken and
completed;

1.1.28.       
 “Party” or “Parties” shall
have the meaning set forth in the preamble of this Agreement;

 

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1.1.29.       
“Person” means an individual, partnership, corporation (including
a business trust), joint stock company, trust, unincorporated association, joint venture, limited liability company or other entity,
or a government or any political subdivision or agency thereof; 

1.1.30.       
“Processing Fee” shall mean the sum of $10,000.00 due the Authority
and paid by Accelr8 from the Grant;

1.1.31.       
 “Progress Report” shall be provided pursuant to Section 6.1 and in the
form set forth on Exhibit B of this Agreement; provided that Accelr8 will endeavor to cooperate with an additional reasonable
requests for information made by the Authority;

1.1.32.       
“Project” shall have the meaning set forth in Recital C; 

1.1.33.       
“Qualified Job” shall mean a job that is permanent (i.e., not seasonal,
on a contract basis for a prescribed period or otherwise temporary), full-time (designated as such by Accelr8 in its reasonable
discretion), new to Arizona, and for which Accelr8 pays average (across all Qualified Jobs identified solely by Accelr8 in its
discretion for purposes of a Milestone) annual wages (including salary, bonuses and other payments designated by any applicable
taxing authority as personal income) of at least $63,000 and offers health insurance benefits and pays at least 65% of the premiums.
For clarification, the determination of average annual wages does not require Accelr8 to include all jobs across its workforce
but only those that it designates in its sole discretion as a Qualified Job for purposes of a Milestone; and

1.1.34.       
“Relocation Date” shall mean the earlier of (i) the one year anniversary
of the Effective Date or (ii) the date that Accelr8 officially changes its headquarters to Arizona as evidenced by the Kino facility
being completed and Accelr8 employees working there.

1.1.35.       
“State” shall mean the state of Arizona.

ARTICLE
2: AUTHORITY’S AGREEMENT TO MAKE THE GRANT AND LOAN

2.1
Agreement to Pay the Grant Funds into Escrow. Within three Business Days after execution
and delivery to the Authority of this Agreement, the Escrow Agreement and the Closing Affidavit by Accelr8 and Escrow Agent
(as applicable), the Authority shall pay the full amount of the Grant ($1,000,000), net of the Processing Fee, into an
escrow account (the “Escrow Account”), which shall be administered by Alliance Bank of Arizona (the
“Escrow Agent”) and governed by an Escrow Agreement among the Parties and the Escrow Agent in the form set
forth on Exhibit C to this Agreement (“Escrow Agreement”).

2.2 Schedule
of Grant Payments from Escrow. The Authority shall direct the Escrow Agent in writing
to release the funds in the Escrow Account pursuant to the following schedule (or, in the case of Milestone Four, the
Authority shall, if applicable, notify Accelr8 in writing that it owes a payment to the Authority):

2.2.1The
Milestone One Grant Payment following submission of a Progress Report evidencing achievement of Milestone One; provided, however,
that if Milestone One has not occurred by the Measurement Date, no Milestone One Grant Payment shall be made.

 

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2.2.2The
Milestone Two Grant Payment following submission of a Progress Report evidencing achievement of Milestone Two; provided, however,
that if Milestone Two has not occurred by the Measurement Date, no Milestone Two Grant Payment shall be made.

2.2.3The
Milestone Three Grant Payment following submission of a Progress Report evidencing achievement of Milestone Three; provided, however,
that if Milestone Three has not occurred by the Measurement Date, no Milestone Three Grant Payment shall be made.

2.2.4The
Milestone Four Grant Payment following submission of a Progress Report evidencing achievement of Milestone Four.

2.3Time
Periods for Payments. Within 10 Business Days following submission of a complete Progress Report supporting an applicable Milestone
Payment, the Authority must instruct the Escrow Agent in writing (with a copy to Accelr8 in accordance with Section 8.1) to release
the applicable Milestone Grant Payment to Accelr8. 

2.4No
Further Payments for Activities After the Measurement Date. Except in relation to any dispute between the Parties about any
outstanding amounts or payments due Accelr8 and subject to Section 7.1.1, any unpaid portion of the Grant to which Accelr8
has not become entitled as of the Measurement Date (as reflected in a Progress Report submitted by Accelr8 and accepted as final
by the Authority), shall be returned to the Authority by the Escrow Agent and shall no longer be available to Accelr8.

2.5No
Representation or Warranty Regarding Tax Treatment. The Authority expressly disclaims any representation or warranty with respect
to the treatment of the Grant to Accelr8 under any state, local, or federal income (or similar) taxation statutes, ordinances,
or regulations.

2.6Loan
to Local Jurisdiction. Contemporaneous with the funding of the Grant into the Escrow Account, the Authority shall pay
the full amount of the Loan ($700,000) to Pima County. Accelr8 shall be under no obligation to guarantee or repay the Loan.

2.7Processing
Fee. Accelr8 agrees to pay to the Authority the Processing Fee which is and shall be earned by the Authority’s making
the Grant, and the Authority’s rights in and to the Processing Fee shall not be contingent upon any other act by the Authority
or any event or occurrence whatsoever.

ARTICLE
3: CONDITIONS TO THE GRANT

3.1               
Conditions to the Grant. As a condition to receiving a Grant payment, Accelr8 shall
have satisfied (or caused to be satisfied) the conditions and requirements specifically set forth below in this Section 3.1,
provided, however, that the condition set forth in Section 3.1.1(i) below shall apply only to the Milestone One Grant Payment
and shall not apply to any other Milestone payments or to Accelr8’s eligibility for any Arizona tax credits except as may
be separately required by applicable statute under such tax credit programs:

3.1.1Accelr8
shall have delivered to the Authority the following documents, duly executed and acknowledged as necessary:

 

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(i)Accelr8’s
Closing Affidavit, for the Milestone One Grant Payment only; 

(ii)Certificates
of Good Standing, (a) issued by the state in which Accelr8 is domiciled confirming that Accelr8 is in good standing in such state,
and (b) issued by the Arizona Corporation Commission confirming that Accelr8 is in good standing as a foreign corporation in the
State of Arizona; and

(iv)Evidence,
in form and content reasonably satisfactory to the Authority, that Accelr8 owes no delinquent taxes to a taxing jurisdiction in
the State; and

(v) Evidence,
in form and content reasonably satisfactory to the Authority, that Accelr8 is registered with and is participating in the E-Verify
program pursuant to A.R.S. § 23-214.

3.1.2No
Event of Default shall exist. 

ARTICLE
4: REPRESENTATIONS AND WARRANTIES OF THE AUTHORITY

The Authority hereby
represents to Accelr8 as of the Effective Date as follows:

4.1               
The Authority is duly created pursuant to A.R.S. §§41-1501 et seq.;

4.2               
The Authority has duly authorized its Interim President and Chief Executive Officer, Sandra
Watson, to enter into this Agreement on behalf of the Authority; and

4.3               
The Authority knows of no litigation, proceeding, initiative, referendum, investigation or
threat of any of the same contesting the powers of the Authority or its officials with respect to this Agreement that has not been
disclosed in writing to Accelr8. 

ARTICLE
5: REPRESENTATIONS AND WARRANTIES OF ACCELR8

Accelr8
hereby represents and warrants to the Authority as of the Effective Date as follows: 

5.1               
To the best of Accelr8’s knowledge and belief, all information supplied or delivered
to the Authority by Accelr8 in connection with the transactions contemplated by this Agreement is materially true, correct, and
complete as of the dates specified therein; 

5.2               
No material adverse change has occurred in the financial condition of Accelr8 since the dates
of the financial statements;

5.3               
Except as may have previously been disclosed, in writing, to the Authority, there are no actions,
suits, or proceedings pending or, to Accelr8’s knowledge after due diligence, threatened in any court or before or by any
Governmental Authority which materially and adversely affect Accelr8’s ability to pay and perform Accelr8’s obligations
under the Agreement, or which involve the validity, enforceability, or priority of any of the Agreement; 

5.4               
The Agreement constitutes a valid and binding obligation of Accelr8, enforceable in accordance
with its terms. The consummation of the transactions contemplated hereby and the performance of any of the terms and conditions
hereof will not result in a breach of or constitute a default under any mortgage, deed of trust, promissory note, credit agreement,
judgment or any other agreement to which Accelr8 is a party or by which Accelr8 may be bound;

 

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5.5               
Accelr8 has examined and is familiar with all conditions associated with the Grant, as set
forth herein;

5.6               
Accelr8 is a Colorado corporation, duly formed and validly existing under the laws of the
State of Colorado, as currently enacted, and Accelr8 has the full corporate power and authority to enter into this Agreement and
to carry out the transactions contemplated to be carried out hereunder. The persons signing this Agreement on behalf of Accelr8
have full corporate power and authority to do so. All necessary consents, approvals, resolutions and other action required to duly
authorize, execute and deliver the Agreement and to perform thereunder, to the extent required by Accelr8 for such authorization,
execution, delivery and performance thereunder, have been obtained or taken by Accelr8;

5.7               
To the best of Accelr8’s knowledge and belief, there are no attachments, levies, executions,
assignments for the benefit of creditors, receiverships, conservatorships or voluntary or involuntary proceedings in bankruptcy
or pursuant to any other debt or relief laws pending against Accelr8 or currently contemplated by Accelr8;

5.8               
To the best of Accelr8’s knowledge and belief, Accelr8 has
timely filed all material federal, state, and local tax returns due during calendar year 2011, and has paid all of its current
material tax-related obligations before delinquent or has obtained an extension therefor, including all material federal, state
and local taxes, except for such returns, obligations, and payments which are being contested in good faith; and

5.9               
Accelr8 does not have scrutinized business operations in Iran or Sudan, in accordance with
A.R.S. §35-393 et seq. and A.R.S. §35-391 et seq.

Accelr8
acknowledges and agrees that, for Accelr8’s purposes, this Agreement constitutes the written agreement required
by and referred to in A.R.S. § 41-1545.02. 

ARTICLE 6: ADDITIONAL COVENANTS AND AGREEMENTS OF ACCELR8

6.1               
Progress Reports; Close Out Report.
Accelr8 shall submit Progress Reports to the Authority in accordance with the following
schedule:

		6.1.1	Annually, on or before July 31 of each year
within the term of this Agreement, reporting on the twelve-month period ending the previous June
30 (the Authority’s fiscal year); 

		6.1.2	Upon or after achievement of each Milestone,
reporting on the period from the Effective Date through the date of achievement of the most recent Milestone (these Progress Reports
shall hereinafter be referred to as the “Milestone Reports”); provided that
the Milestone Report due following Milestone Four shall be submitted no later than
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		6.1.3	Upon the Relocation Date; and 

		6.1.4	Within 20 Business Days after the Maturity
Date, reporting on the period from Effective Date through the Maturity Date (this Progress Report shall hereinafter be referred
to as the “Close Out Report”). 

Except
as provided in the preceding sentence, there shall be no filing deadline for Milestone Reports. Accelr8’s failure to timely
submit a Progress Report, or to otherwise comply with conditions of receiving Grant Payments under this Agreement, including without
limitation those set forth in Article 3, shall have the effect of correspondingly deferring any time requirements imposed
hereunder on the Authority relating to any payment obligations associated with the late Progress Report. Notwithstanding the preceding
sentence, if Accelr8 fails to submit a required Progress Report or to otherwise comply with conditions of receiving Grant Payments
under this Agreement, including without limitation those set forth in Article 3, within three months after such condition
being due, then subject to a Notice and Cure Period, Accelr8 shall be required to repay all net Grant proceeds received
hereunder, within 10 Business Days following written notice thereof from the Authority, and the Authority shall be forever relieved
of its obligations hereunder. Progress Reports shall require Accelr8 to disclose only such information necessary for the Authority
to determine whether Accelr8 has satisfied the requirements set forth herein.

6.2      Within
10 Business Days from receipt of each Progress Report, the Authority shall take
one of the following actions with respect to the report and convey such action, together with a statement of the reasons for such
action, to Accelr8 in writing (including by E-mail, notwithstanding anything herein to the contrary): (i) accept
the contents of the report in whole, (ii) accept the contents of the report in part and reject the contents of the report in part,
(iii) reject the contents of the report in whole, or (iv) reasonably request additional
information to assist with the Authority’s review of the report. In the event the Authority
does not timely respond to a Progress Report, then, subject to a Notice and Cure Period, the
Progress Report will be deemed accepted and the
Parties’ rights will be established as provided herein based on the information in the Progress
Report. In the event the Authority does request additional information to assist
with its review of a Progress Report, the Parties shall work in good faith to resolve any open issues, and the Authority’s
response obligations with respect to the original Progress Report
shall apply to each receipt, in writing, of such additional information requested by the Authority; provided, however, that the
Authority shall use best efforts to address and notify Accelr8 of all open issues at each step and shall not request additional
information from Accelr8 for the purposes of avoiding its timing obligations under this section. Under no circumstances shall
the Authority have longer than 45 days in which to make a final decision with respect to a Progress
Report so long as Accelr8 has timely responded to all reasonable information requests
during the preceding time period. If the Authority rejects the contents of a Progress Report, in whole or part, Accelr8 shall
have such appeal rights with respect to such decision as are available for Authority actions.

6.3               
Accelr8 shall pay when due all of its own costs and expenses required by or incident to this
Agreement and the Project, including, without limitation all taxes and assessments applicable to the Project, other than such taxes
and assessments as are actively contested by Accelr8, in good faith, by appropriate proceedings.

6.4               
Accelr8, at the Authority’s cost, shall permit the Authority, upon reasonable notice
during normal business hours and subject to Accelr8’s security policies, while this Agreement is in effect, and for one (1)
year thereafter, to examine and audit such books and records of Accelr8 as are necessary for the Authority to determine whether
Accelr8 has performed the Arizona Investment and the other conditions set forth herein.

 

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ARTICLE
7: EVENTS OF DEFAULT; REMEDIES

7.1
Event of Default. The occurrence of any of the following shall constitute an Event of Default by Accelr8 under this
Agreement:

7.1.1Subject
to the Notice and Cure Period, the failure by Accelr8 to comply with, perform and discharge, fully and timely, any material covenant,
agreement, condition or obligation to be performed by Accelr8 hereunder; provided, however, that if such cure shall require more
than 60 days to complete, Accelr8 shall not be in default hereunder so long as Accelr8 shall commence such cure within the 60-day
period and thereafter diligently prosecute such cure to completion; and further provided, that such cure is completed within 60
days thereafter.

7.1.2The
appointment of a receiver, trustee, conservator, or liquidator for Accelr8, or in respect of any of the Project, or any material
part of any other property of Accelr8;

7.1.3The
filing of a voluntary petition in bankruptcy against or by Accelr8, or by the filing of any petition or answer seeking or acquiescing
in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief for or against Accelr8,
under any present or future federal, state or other statute, law or regulation relating to bankruptcy, insolvency, or other relief
for debtors; the filing of an involuntary petition in bankruptcy for or against Accelr8, which is not dismissed within 60 days
following such filing; if Accelr8 becomes “insolvent” as that term is defined in Section 101(26) of the Bankruptcy
Code, Title 11 of the United States Code, 11 U.S.C. 101, et seq.; or if Accelr8 shall make any general assignment for the
benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due; or if Accelr8 shall
solicit any creditors of Accelr8 to file an involuntary petition against Accelr8.

7.1.4
The validity or enforceability of the Agreement, at law or in equity, or before any Governmental Authority, is challenged by
Accelr8.

7.2
Remedies of Authority. Upon the occurrence of an Event of Default by Accelr8, the Authority shall have the following
remedies available to it: 

7.2.1          
Failure to deliver the Arizona Investment. In the event Accelr8 does not continuously
maintain the Qualified Jobs for which Accelr8 receives Milestone Grant Payments through the Maturity Date (as reflected in a final
Close Out Report), Accelr8 shall owe the Authority all or a portion of the Grant calculated as follows (assuming it is a positive
number): the number of Qualified Jobs for which Accelr8 received a Grant Payment but which were not retained through the Maturity
Date multiplied by $12,923.

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Execution
Copy 

 

If
the Authority determines, following receipt of the Close Out Report, that Accelr8 owes any amounts to the Authority under this
Section, the Authority shall give written notice thereof to Accelr8 and Accelr8 shall pay such amounts within 30 Business Days
following receipt of such notice. Notwithstanding anything herein to the contrary, requiring repayment by Accelr8 under
Section 1.1.23 or this Section are the exclusive remedies of the Authority for Accelr8’s failure to deliver the Arizona
Investment. In the event of any action by the Authority to recover any such amounts required to be repaid by Accelr8, in whole
or in part, the Authority shall be entitled to recover interest on such amounts at the rate of 5% per annum from
the Maturity Date, plus its reasonable attorneys fees and costs if it is the prevailing party in such action.

7.2.2Other
Breaches; Remedies of Authority Cumulative. Except as set forth herein, in the event of any
other uncured breach of any provision of this Agreement by Accelr8,
except as provided herein, the Authority shall have all of the rights and remedies
granted herein and all other rights and remedies available at law or in equity, and these same rights and remedies shall be cumulative
and may be pursued separately, successively, or concurrently against Accelr8.

7.4
Remedy of Accelr8. Upon the occurrence of any breach of this Agreement by the Authority, Accelr8, as its sole and
exclusive remedy against the Authority, subject to the Notice and Cure Period, may seek specific performance of the
Authority’s obligations arising under this Agreement.

7.5
Nonliability of Authority’s Officials. Notwithstanding anything in this Agreement to the contrary, no
officer, representative, agent, attorney or employee of the Authority shall be personally liable to any other Party hereto,
or to any successor in interest to such Party, in the event of any non-performance or breach by the Authority with respect to
any obligation of the Authority under the terms of this Agreement.

7.6 Limitation
of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL
DAMAGES ARISING OUT OF THIS AGREEMENT. IN NO EVENT SHALL AN AWARD OF DAMAGES EXCEED THE AMOUNT OF THE GRANT, BUT SUCH AWARD
TO THE AUTHORITY MAY, IN ADDITION, INCLUDE ITS REASONABLE ATTORNEY’S FEES AND COSTS. 

ARTICLE
8: GENERAL TERMS AND CONDITIONS

8.1               
Notices. All notices, demands, requests, and other communications required or permitted
hereunder shall be in writing and shall be delivered by hand, telegram, facsimile or deposited with the United States Postal Service
postage prepaid, registered or certified mail, return receipt requested, or delivered by courier or personal delivery addressed
as follows:

	If
to the Authority:	Arizona Commerce Authority
	 	333
North Central Avenue, Suite 1900
	 	Phoenix,
Arizona 85004
	 	Attn:
Greg Linaman
	 	Telephone
No.: 602-845-1255
	 	Facsimile
No.: 602-845-1201
	 	 

 

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Execution Copy

 

	with
a required copy to:	Mariscal, Weeks, McIntyre & Friedlander, P.A.
	 	2901
North Central Avenue, Suite 200
	 	Phoenix,
Arizona 85012
	 	Attn:
David I. Thompson, Esq.
	 	Telephone
No.: 602-285-5021
	 	Facsimile
No.: 602-285-5100
	 	 
	If to Accelr8:	Accelr8 Technologies Corporation
	 	 
	 	 
	 	Attn: Lawrence Mehren, CEO
	 	Telephone No.:
	 	Facsimile No.:
	 	 
	with a required copy to:	Snell & Wilmer L.L.P.
	 	One
Arizona Center
	 	Phoenix,
AZ 85004-2202
	 	Attn:
Daniel M. Mahoney, Esq.
	 	Telephone
No.: 602-382-6000
	 	Facsimile
No.: 602-382-6070

 

All
notices, requests, demands or other communications that are required or may be given pursuant to the terms of this Agreement will
be in writing and will be deemed to have been duly given: (i) on the date of delivery, if personally delivered by hand, (ii) upon
the fifth day after such notice is deposited in the United States mail, if mailed by registered or certified mail, postage prepaid,
return receipt requested, (iii) upon the date scheduled for delivery after such notice is sent by a nationally recognized overnight
express courier if the delivery date is a Business Day, or otherwise on the next Business Day or (iv) if delivered by facsimile,
courier or by personal delivery, then notice is deemed delivered upon the date and time of confirmed, actual receipt or refusal
of delivery by the representative’s agents and employees of Accelr8. Any Party may designate a different address or person
to whom such notices should be sent by giving notice thereof as provided in this Section 8.1, which change of address shall
be effective upon receipt.

8.2               
Indemnity. To the fullest extent permitted by law, Accelr8 hereby indemnifies, and
agrees to defend, pay and hold harmless the Authority and the Authority’s directors, officers, agents and employees for,
from and against any and all liability, expense or damage of any kind or nature and from any suits, claims or demands, including
reasonable legal fees and expenses, arising from the gross negligence or willful misconduct of Accelr8 in connection with this
Agreement. Upon receiving knowledge of any suit, claim or demand asserted by a third party that the Authority believes is covered
by this indemnity, the Authority shall give Accelr8 prompt notice of the matter and an opportunity to defend the Authority, at
Accelr8’s sole cost and expense. The Authority shall be responsible for complete and active cooperation with Accelr8 in
defense of such claims, without compensation from Accelr8. The Authority shall not settle any such claims, suits, or demands without
prior written consent of Accelr8. Accelr8 shall pay any and all valid claims of any brokers or agents with whom it has dealt who
claim a right to any fees in connection with arranging the financing created pursuant to this Agreement, and shall hold the Authority
harmless from such claims, whether or not they are valid. The obligations of Accelr8 in this Section 8.2 shall survive
the termination of the Agreement and the repayment (if any) thereof for a period of one year.. No provision of this Agreement
may be amended or modified, except by written instrument executed by the Party against whom such amendment or modification is
sought to be enforced.

 

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Execution
Copy

 

8.4               
Limited Severability. The Authority and Accelr8 each believes that the execution, delivery
and performance of this Agreement are in compliance with all Applicable Laws. However, in the unlikely event that any provision
of this Agreement is declared void or unenforceable (or is construed as requiring the Authority to do any act in violation of any
Applicable Laws, constitutional provision, law, regulation, code or charter), such provision shall be deemed severed from this
Agreement, and this Agreement shall otherwise remain in full force and effect; provided that this Agreement shall retroactively
be deemed reformed to the extent reasonably possible in such a manner so that the reformed agreement (and any related agreements
effective as of the same date) provide essentially the same rights and benefits (economic and otherwise) to the Parties as if such
severance and reformation were not required. Unless prohibited by Applicable Laws, the Parties further shall perform all acts and
execute all amendments, instruments and consents necessary to accomplish and to give effect to the purposes of this Agreement,
as reformed. 

8.5               
No Waiver; the Authority’s Standard for Consents. No waiver by the Authority
or Accelr8 of any of its respective rights or remedies hereunder, shall be considered a waiver of any other or subsequent right
or remedy; no delay or omission in the exercise or enforcement by the Authority or Accelr8 of any rights or remedies shall be construed
as a waiver of any other right or remedy; and, to the extent permitted by applicable law, no exercise of enforcement of any such
rights or remedies shall be held to exhaust any right or remedy of the Authority or Accelr8. Unless otherwise provided in this
Agreement, all consents of the Authority or Accelr8 permitted or required under this Agreement shall be given or withheld in such
Party’s sole discretion.

8.6               
Confidentiality. The Authority may not disclose to any Person any confidential,
proprietary or non-public information of Accelr8 furnished to the Authority by Accelr8 or its representatives (such information
being referred to collectively herein as the “Accelr8 Information”), except that the Authority may disclose
Accelr8 Information (i) to its and its affiliates’ employees, officers, directors, agents and advisors who have a need to
know (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such
Accelr8 Information and instructed to keep such Accelr8 Information confidential on substantially the same terms as provided herein
and provided further that the Authority shall be responsible for any disclosure by such Persons to whom the Authority makes disclosure),
(ii) to the extent required by Applicable Laws or regulations or by any subpoena or similar legal process, (iii) in connection
with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of
rights hereunder, and (iv) with the consent of Accelr8. The obligations under this Section 8.6 shall survive the termination
of this Agreement.

8.7               
No Third Party Beneficiary. This Agreement is for the sole benefit of the Authority
and Accelr8 and is not for the benefit of any third party, other than the indemnified parties referenced in Section 8.2.

 

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Execution
Copy

8.8               
Number and Gender. Whenever used herein, the singular number shall include the plural
and the singular and the use of any gender shall be applicable to all genders. 

8.9               
Captions. The captions, headings, and arrangements used in
this Agreement are for convenience only and do not in any way affect, limit, amplify, or modify the terms and provisions hereof.

8.10           
Governing Law; Venue. This Agreement shall be deemed to be made under, shall
be construed in accordance with, and shall be governed by the internal, substantive laws of the State of Arizona (without reference
to conflict of law principles). Any action brought to interpret, enforce or construe any provision of this Agreement shall be commenced
and maintained solely and exclusively in the Superior Court of the State of Arizona in and for the County of Maricopa (or, as may
be appropriate, in the Justice Courts of Maricopa County, Arizona, or in the United States District Court for the District of Arizona).
The Parties irrevocably consent to sole and exclusive jurisdiction and venue in such courts for such purposes and waive all rights
to seek transfer or removal of any action commenced under or in connection with this Agreement.

8.11           
Time of the Essence. Time is of the essence with respect to
each and every term and condition of this Agreement to be performed by the Parties hereunder.

8.12           
Attorneys’ Fees. In the event of a breach by any Party of any provision
of this Agreement and commencement of a subsequent legal action in an appropriate forum, or in the event of an action seeking a
declaration of the rights or liabilities of the Parties, the prevailing Party in any such dispute shall be entitled to reimbursement
of its reasonable attorney's fees and court costs, including, but not limited to, its costs of expert witnesses, transportation,
lodging and meal costs of the parties and witnesses, costs of transcript preparation and other reasonable and necessary direct
and incidental costs of such dispute.

8.13           
Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed an original, and all of which together shall be deemed one and the same document.

8.14           
Recitals. The Recitals are incorporated herein by this reference
and made an integral part hereof. 

8.15           
Successors Bound. This Agreement shall inure to the benefit of, and shall be binding
upon, each of the Parties and their successors and assigns hereunder.

8.16           
Publicity. Accept as otherwise required by applicable laws, rules or regulation, neither
Party shall issue any press release or make any other public announcement concerning this Agreement without the prior written consent
of the other Party, which consent may be granted or withheld for any or no reason.

8.17           
Protection of Confidential Information. The Authority acknowledges that information
submitted by Accelr8 or made available by Accelr8 to the Authority prior to the date hereof, and information which Accelr8 may
submit or make available to the Authority after the date hereof (including all information contained on any progress report submitted
by Accelr8 to the Authority as required by this Agreement and/or A.R.S. §41-1545.03), includes or will include when submitted
or made available in the future highly confidential information (“Accelr8 Confidential Information”), the disclosure
of which to parties other than the Authority would divulge trade secrets of Accelr8, would harm Accelr8’s competitive position
related to business development opportunities and strategies (and otherwise), and/or could result in a material adverse effect
on the business, results of operations, financial condition and/or prospects of Accelr8. The Authority agrees (i) that, unless
otherwise expressly agreed in writing by Accelr8, such Accelr8 Confidential Information shall not be subject to disclosure to any
third party, including disclosure under A.R.S. §39-101 et seq., unless compelled by a court of law, and (ii) to use its best
efforts to maintain the confidentiality of all information relating to Accelr8 in its possession, including notifying Accelr8 within
two days of the Authority’s receipt of any request or demand for disclosure of any information relating to Accelr8 pursuant
to a public records request or otherwise. Upon such notice by the Authority, Accelr8 shall, within 10 Business Days, communicate
to the Authority, in writing, what parts, if any, of the information requested is deemed by Accelr8 to be Accelr8 Confidential
Information.

-16-

 

     

     

    
 

Execution
Copy

8.18           
Conflict of Interest. The requirements of A.R.S. § 38-511 apply to the Agreement.

8.19           
No Assignment. The Parties acknowledge that this Agreement, and the Grant made to Accelr8,
is personal to Accelr8 and is based solely and exclusively upon factors relevant to Accelr8’s unique business history, qualifications,
financial structure and experience, and that, except as provided for in this Agreement, Accelr8 may not assign
or transfer (which shall include but not be limited to encumbering or hypothecating), in whole or in part, this Agreement,
or its rights or obligations arising under this Agreement (including its right to receive any funds
or grant monies payable hereunder), in whole or in part, to any other person or entity, or for
any purpose not specified herein, without the prior written consent of the Authority, which may be granted, withheld, delayed
or conditioned in the Authority’s sole, absolute and unfettered discretion. Any assignment, or attempted or purported assignment,
in violation of this Section 9.20 shall be void, and not voidable, and shall vest no rights in the purported assignee or
transferee. Notwithstanding anything herein to the contrary, Accelr8 shall be permitted to
complete a Corporate Succession so long as Accelr8’s successor-in-interest assumes its obligations under this Agreement by
operation of law or otherwise.

 

[Signatures are on the following page.]

 

 

 

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Execution Copy 

 

IN
WITNESS WHEREOF, this Agreement has been executed and delivered by the Parties to be effective as of the Effective Date.

	ACCELR8:	ACCELR8
TECHNOLOGIES CORPORATION,
	 	a Colorado corporation
	 	 
	 	 
	 	By: Lawrence Mehren
	 	Its: President and CEO
	 	 
	AUTHORITY:	ARIZONA COMMERCE
AUTHORITY,
	 	an agency of the State of Arizona
	 	 
	 	 
	 	By: ______________________________________
	 	Sandra Watson
	 	Its: Interim President and CEO
	 	 
	 	 

 

 

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Execution Copy

 

Exhibit A

 

CLOSING
AFFIDAVIT

 

The undersigned hereby declares that he is the President and Chief Executive Officer of Accelr8 Technologies Corporation, a
Colorado corporation (“Accelr8”), and further declares, solely in such capacity for Accelr8 and not individually,
that:

 

1. The undersigned has examined the Grant
Agreement, executed and effective as of _____________, 2012, by and between Accelr8
and the Arizona Commerce Authority, an agency of the State of Arizona (the “Agreement”);
and

 

2.To the knowledge of the undersigned,
without an independent investigation, the representations and warranties of Accelr8 set forth in Article 5 of the Agreement
are true and correct in all material respects, or true and correct where such representations and warranties are already qualified
by materiality or material adverse change in the business, operations or financial condition
of Accelr8;, except that if a representation and warranty is made as of a specific date and such date is expressly referred
to therein, such representation or warranty shall be true and correct (or true and correct in all material respects, as applicable)
as of the date thereof.

 

Executed this ___ day of
______________2012.

 

	 	 
	 	By: ___________________________________________
	 	Name: _________________________________________
	 	Its:____________________________________________
	 	 

 

 

	STATE OF ARIZONA	)
	 	) ss
	County of Maricopa	)
	 	 

 

On ________________________, 2012,
before me, the undersigned Notary Public, personally appeared ____________________________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his authorized capacity and that by his signature on the instrument the person or the entity
upon behalf of which the person acted, executed the instrument.

 

	WITNESS my hand and official seal.	 
	 	
	 	Notary Public
	 	
	My Commission Expires:	 

 

 

 

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Execution Copy

 

 

Exhibit B

 

FORM
OF PROGRESS REPORT

 

 

 

 

 

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Exhibit C

 

 

ESCROW
AGREEMENT FOR GRANTthirdamendment.htm

Third Amendment to Loan Documents                                 PNC

THIS THIRD AMENDMENT TO LOAN DOCUMENTS (this "Amendment") is made as of October 18, 2012, by and between BOVIE MEDICAL CORPORATION (the "Borrower"), and PNC BANK, NATIONAL ASSOCIATION (the "Bank").

BACKGROUND

A.           The Borrower has executed and delivered to the Bank (or a predecessor which is now known by the Bank's name as set forth above), one or more promissory notes, letter agreements, loan agreements, security agreements, mortgages, pledge agreements, collateral assignments, and other agreements, instruments, certificates and documents, some or all of which are more fully described on attached Exhibit A, which is made a part of this Amendment (collectively as amended from time to time, the "Loan Documents") which evidence or secure some or all of the Borrower's obligations to the Bank for one or more loans or other extensions of credit (the "Obligations").

B.           The Borrower and the Bank desire to amend the Loan Documents as provided for in this Amendment.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and intending to be legally bound hereby, the parties hereto agree as follows:

1.           Certain of the Loan Documents are amended as set forth in Exhibit A. Any and all references to any Loan Document in any other Loan Document shall be deemed to refer to such Loan Document as amended by this Amendment. This Amendment is deemed incorporated into each of the Loan Documents. Any initially capitalized terms used in this Amendment without definition shall have the meanings assigned to those terms in the Loan Documents. To the extent that any term or provision of this Amendment is or may be inconsistent with any term or provision in any Loan Document, the terms and provisions of this Amendment shall control.

2.           The Borrower hereby certifies that: (a) all of its representations and warranties in the Loan Documents, as amended by this Amendment, are, except as may otherwise be stated in this Amendment: (i) true and correct as of the date of this Amendment, (ii) ratified and confirmed without condition as if made anew, and (iii) incorporated into this Amendment by reference, (b) no Event of Default or event which, with the passage of time or the giving of notice or both, would constitute an Event of Default, exists under any Loan Document which will not be cured by the execution and effectiveness of this Amendment, (c) no consent, approval, order or authorization of, or registration or filing with, any third party is required in connection with the execution, delivery and carrying out of this Amendment or, if required, has been obtained, and (d) this Amendment has been duly authorized, executed and delivered so that it constitutes the legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms. The Borrower confirms that the Obligations remain outstanding without defense, set off, counterclaim, discount or charge of any kind as of the date of this Amendment.

3.           The Borrower hereby confirms that any collateral for the Obligations, including liens, security interests, mortgages, and pledges granted by the Borrower or third parties (if applicable), shall continue unimpaired and in full force and effect, and shall cover and secure all of the Borrower's existing and future Obligations to the Bank, as modified by this Amendment.

4.           As a condition precedent to the effectiveness of this Amendment, the Borrower shall comply with the terms and conditions (if any) specified in Exhibit A.

 

Form 17A-Multistate Rev. 9/12

  

  

  

5.           To induce the Bank to enter into this Amendment, the Borrower waives and releases and forever discharges the Bank and its officers, directors, attorneys, agents, and employees from any liability, damage, claim, loss or expense of any kind that it may have against the Bank or any of them arising out of or relating to the Obligations. The Borrower further agrees to indemnify and hold the Bank and its officers, directors, attorneys, agents and employees harmless from any loss, damage, judgment, liability or expense (including attorneys' fees) suffered by or rendered against the Bank or any of them on account of any claims arising out of or relating to the Obligations. The Borrower further states that it has carefully read the foregoing release and indemnity, knows the contents thereof and grants the same as its own free act and deed.

6.           This Amendment may be signed in any number of counterpart copies and by the parties to this Amendment 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 Amendment by facsimile transmission shall be effective as delivery of a manually executed counterpart. Any party so executing this Amendment 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.

7.           The Bank may modify this Amendment for the purposes of completing missing content or correcting erroneous content, without the need for a written amendment, provided that the Bank shall send a copy of any such modification to the Borrower (which notice may be given by electronic mail).

8.           This Amendment will be binding upon and inure to the benefit of the Borrower and the Bank and their respective heirs, executors, administrators, successors and assigns.

9.           This Amendment has been delivered to and accepted by the Bank and will be deemed to be made in the State where the Bank's office indicated in the Loan Documents is located. This Amendment will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the State where the Bank's office indicated in the Loan Documents is located, excluding its conflict of laws rules.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

 

Form 17A-Multistate Rev. 9/12

  

A-2

  

10.           Except as amended hereby, the terms and provisions of the Loan Documents remain unchanged, are and shall remain in full force and effect unless and until modified or amended in writing in accordance with their terms, and are hereby ratified and confirmed. Except as expressly provided herein, this Amendment shall not constitute an amendment, waiver, consent or release with respect to any provision of any Loan Document, a waiver of any default or Event of Default under any Loan Document, or a waiver or release of any of the Bank's rights and remedies (all of which are hereby reserved). The Borrower expressly ratifies and confirms the confession of judgment (if applicable) and waiver of jury trial provisions contained in the Loan Documents.

WITNESS the due execution of this Amendment as a document under seal as of the date first written above.

	
WITNESS / ATTEST

	  	
BOVIE MEDICAL CORPORATION

	 
	  	  	  	 
	
/s/ Alvera MacElroy                     

	  	
By:  /s/ Gary D. Pickett                          

	 
	  	  	
                (SEAL)

	 
	 	 	 	 
	
Print Name:  Alvera MacElroy         

	  	
Print Name:  Gary D. Pickett            

	 
	
Title:     Manager Human Res. 

	  	
Title:              CFO               

	 
	  	  	  	 
	  	  	  	 
	  	  	  	 
	  	  	
PNC BANK, NATIONAL ASSOCIATION

	 
	  	  	  	 
	  	  	
By:  /s/   Eric C. Vogt                                   

	 
	  	  	
Enc C. Vogt                               (SEAL)

	 
	  	  	
Senior Vice President

	 

 

Form 17A-Multistate Rev. 9/12

  

A-3

  

EXHIBIT A TO

THIRD AMENDMENT TO LOAN DOCUMENTS

DATED AS OF OCTOBER-, 2012

BOVIE MEDICAL CORPORATION

	
A.

	
The "Loan Documents" that are the subject of this Amendment include the following (as any of the foregoing have previously been amended, modified or otherwise supplemented):

	
  

	
1.

	
Revolving Loan Agreement dated as of October 31, 2011 between the Borrower and the Bank (the "Revolving Loan Agreement");

	
  

	
2.

	
Revolving Line of Credit Note dated October 31, 2011 in the original principal amount of $6,000,000.00 made by the Borrower in favor of the Bank (the "Revolving Line of Credit Note");

	
  

	
3.

	
Security Agreement (Revolving Loan) dated as of October 31, 2011 executed by the Borrower in favor of the Bank;

	
  

	
4.

	
Borrowing Base Rider dated October 31, 2011 between the Borrower and the Bank;

	
  

	
5.

	
Equipment Line Loan Agreement dated as of October 31, 2011 between the Borrower and the Bank (the "Equipment Loan Agreement" and collectively with the Revolving Loan Agreement, the "Loan Agreements");

	
  

	
6.

	
Non-Revolving Equipment Line of Credit Note dated October 31,2011 in the original principal amount of $1,000,000.00 made by the Borrower in favor of the Bank (the "Non-Revolving Equipment Note");

	
  

	
7.

	
Security Agreement (Equipment Loan) dated as of October 31, 2011 executed by the Borrower in favor of the Bank;

	
  

	
8.

	
Amendment to Loan Documents dated as of March 8, 2012 between the Borrower and the Bank;

	
  

	
9.

	
Amendment to Loan Documents dated as of April 7, 2012 between the Borrower and the Bank;

	
  

	
10.

	
All other documents, instruments, agreements, and certificates executed and delivered in connection with the Loan Documents listed in this Section A.

B.           The Loan Documents are amended as follows:

	
  

	
1.

	
Effective November 1, 2012, the "Expiration Date" as set forth in the Revolving Loan Agreement and the Revolving Line of Credit Note is hereby extended from October 31, 2013 to October 31,2014 on which date, unless further extended by the Bank by written notice from the Bank to the Borrower, the entire principal balance and any accrued but unpaid interest shall be due and payable.

	
  

	
2.

	
Effective November 1, 2012, the "Expiration Date" as set forth in the Equipment Loan Agreement and the Non-Revolving Equipment Note is hereby extended from October 31,2012 to October 31, 2013 on which date, unless further extended by the Bank by written notice from the Bank to the Borrower, the entire principal balance and any accrued but unpaid interest shall be due and payable.

A-1

 

Form 17A-Multistate Rev. 9/12

  

  

  

 

	
  

	
3.

	
Sections 1 of the Financial Covenants set forth in the Addendums to the Loan Agreements are hereby amended and restated to read in their entirety as follows:

"(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 1.25 to 1.00, commencing with the fiscal quarter ending September 30, 2012."

	
C.

	
Conditions to Effectiveness of Amendment: The Bank's willingness to agree to the amendments set forth in this Amendment is subject to the prior satisfaction of the following conditions:

1.           Execution by all parties and delivery to the Bank of this Amendment.

 

A-2

 

Form 17A-Multistate Rev. 9/12

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