MEMORANDUM OF AGREEMENT
This
MEMORANDUM OF AGREEMENT, dated the 13th day of
November, 2008, between PINELLAS COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, doing
business as the Pinellas County Economic Development Authority, a public body
corporate and politic created and existing under and by virtue of the laws of
the State of Florida (the "Issuer") and BOVIE MEDICAL CORPORATION, a for-profit
corporation duly organized and existing under the laws of the State of Delaware
(the "Company").
SECTION
1. The matters of mutual inducement and reliance which resulted in
the execution of this Memorandum of Agreement are as follows:
(a) The
Issuer is a local agency under the provisions of Chapter 159, Part II, Florida
Statutes and has been created pursuant to Chapter 159, Part III, Florida
Statutes, by the Board of County Commissioners of Pinellas County, Florida (the
"County") as amended (collectively, the "Act"), to provide for the issuance of
and to issue and sell its Industrial Development Revenue Bonds for the purpose
of paying all or any part of the cost of any "project" as defined in the
Act.
(b) In
order to improve the economic base of Pinellas County (the "County") and to
preserve employment in the State of Florida (the "State"), to promote the
economic growth of the County and the State, to increase purchasing power and
opportunities for gainful employment, and to advance and improve the economic
prosperity and the general welfare of the State and its people, it is desirable
that the Issuer issue and sell its Industrial Development Revenue Bonds (Bovie
Medical Corporation Project), Series 2008, in the aggregate principal amount of
not to exceed $4,500,000 (the "Bonds").
(c) The
Issuer intends to use the proceeds thereof, to the extent of such proceeds, as
follows: (i) to pay all or any part of the cost of issuance of the Bonds, (ii)
to finance the costs of acquiring, renovating and equipping an approximately
60,000 square foot manufacturing facility to be used in manufacturing of medical
devices and accessories (the "Project"), and (iii) to pay any other "cost" (as
defined in the Act) of the Project. The Project will be owned and
operated by the Company.
(d) The
Issuer intends to finance the Project for the Company from proceeds of the sale
of its Bonds, such loan to be payable by the Company in installments sufficient
to pay the principal of, premium (if any), interest and costs due on the Bonds
when and as the same become due.
(e) The
Company has requested that the Issuer enter into this Memorandum of Agreement
for the purpose of declaring the Issuer's intention to provide financing to pay
a portion of the cost of the Project.
(f) The
Issuer, by resolution duly passed and adopted, has made certain findings and
determinations and has approved and authorized the execution and delivery of
this Memorandum of Agreement.
(g) The
Company represents that Bond proceeds will not be used to finance any costs for
the Project incurred prior to sixty (60) days before the date of this Memorandum
of Agreement, except to the extent allowed by federal tax law.
SECTION
2. The Issuer will cooperate with the Company and its agents in the
Company's efforts to find one or more institutional purchasers for the Bonds,
and if purchase arrangements satisfactory to the Company can be made by the
Company and its agents, the Issuer will authorize the issuance and sale of the
Bonds, and will issue and sell the Bonds to such purchaser or purchasers of the
Bonds as may be designated by the Company all upon such terms and conditions as
shall be approved by the Company and authorized by law; provided, however, the
Issuer will approve the sale of the Bonds solely to institutional investors
which will at no time cause the Bonds to be offered for sale to the public,
unless the Company provides a letter of credit from the RBC Bank (USA) to secure
the Bonds. The Bonds will be payable solely from the revenues and
proceeds derived by the Issuer from the operation of the Project, and will not
constitute a debt, liability or obligation of the County, the Issuer, or of the
State or of any other political subdivision thereof. The Issuer shall
not be obligated to pay the same nor interest, premium (if any) or costs thereon
except from the revenues and proceeds pledged therefore, and neither the faith
and credit nor the taxing power of the County or of the State or of any other
political subdivision thereof will be pledged to the payment of the principal
of, premium (if any), interest or costs due pursuant to or under such
Bonds.
From the
date hereof, until the sale of the Bonds, the Company will, within ten (10) days
after its occurrence, notify the Issuer of any material change, whether or not
adverse, in the business, operations or financial condition of the
Company. In the event the Issuer shall, at any time prior to the sale
of the Bonds, determine in its sole discretion that there has been a material
adverse change in the business, operations or financial condition based upon
financial statements or notices provided by the Company in accordance herewith,
the obligation of the Issuer to issue and sell the Bonds shall, at the option of
the Issuer, be terminated.
SECTION
3. The Issuer will, at the proper time, and subject in all respects
to the prior advice, consent and approval of the Company, submit applications,
adopt such proceedings and authorize the execution of such documents as may be
necessary and advisable for the authorization, sale and issuance of the Bonds
and the acquisition, improving, constructing and equipping of the Project, all
as shall be authorized by law mutually satisfactory to the Issuer and the
Company.
SECTION
4. The Bonds issued shall be in such aggregate principal amount,
shall bear interest at such rate or rates, shall be payable at such times and
places, shall be in such forms and denominations, shall be sold in such manner
and at such time or times, shall have such provisions for redemption, shall be
executed, and shall be secured, all as shall be authorized by the Act and all on
terms mutually satisfactory to the Issuer and the Company.
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SECTION
5. The Issuer will use and apply the proceeds of the issuance and
sale of the Bonds, or cause such proceeds to be used and applied, to the extent
of such proceeds, to pay the cost of the Project, and will loan such Bond
proceeds to the Company for the Project pursuant to a financing agreement
requiring the Company to make payment for the account of the Issuer in
installments sufficient to pay all of the interest, principal, redemption
premiums (if any) and other costs due under and pursuant to the Bonds when and
as the same become due and payable, to operate, repair and maintain the Project
at the Company's own expense, to pay all other costs incurred by the Issuer in
connection with the financing of the renovation, equipping and administration of
the Project which are not paid out of the Bond proceeds or otherwise for so long
as any of the Bonds remain outstanding, and for the conveyance to the Company of
all rights, title and interest of the Issuer in and to the Project when all of
the obligations of the Company under the financing agreement have been performed
and satisfied.
SECTION
6. The Company hereby agrees to acquire, renovate and equip the
Project, it being understood and agreed that the Company shall provide all
services incident to the equipping of the Project (including, without
limitation, the preparation of plans, specifications and contract documents, the
award of contracts, the inspection and supervision of work performed, the
employment of engineers, architects, building and other contractors) and that
the Company shall pay all costs of the Project, subject to reimbursement by the
Issuer upon the issuance and sale of the Bonds and the use and application of
the proceeds thereof as provided above, the Issuer shall have no responsibility
for the provision of the aforesaid services. It is expected that the
cost of the Project will not exceed Four Million Five Hundred Thousand Dollars
($4,500,000), including interest during the period of expansion, and legal,
accounting and financing expenses. The Company agrees that to the
extent that the proceeds derived from the sale of the Bonds are not sufficient
to complete the Project, the Company, as the owner of the Project, will be
responsible for supplying all additional funds which are necessary for the
completion of the Project. So long as this Memorandum of Agreement is
in effect all risk of loss to the Project will be borne by the
Company.
SECTION
7. At or prior to the time of issuance and sale of the Bonds, the
Issuer will enter into a trust indenture or other such escrow arrangement to
secure the Bonds, whereby the Issuer's interest in the Project, the financing
agreement with the Company, and all fees, rents, charges, proceeds from the
operation of the Project, and other funds and revenues in respect of the
Project, will be pledged and assigned to a trustee or escrow agent, and held in
trust, for the benefit of the holders, from time to time, of the
Bonds.
SECTION
8. At or prior to the time of issuance and sale of the Bonds, the
following conditions precedent shall have been satisfied:
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(a) The
Company shall have satisfactorily completed all procedures established by the
Issuer for the review and approval of industrial development revenue bond
issues.
(b) The
Issuer shall have duly passed and adopted a resolution making all findings
required by law and authorizing the issuance and sale of the Bonds and the
execution and delivery of the financing agreement, the trust agreement and such
other agreements, instruments and documents as may be required to be
specifically authorized. It is an express condition of this
Memorandum of Agreement that the Bonds be sold only in the manner and to a
purchaser or purchasers approved by the Issuer.
(c) The
Company shall have authorized the execution, delivery and performance of the
financing agreement, and approved the trust agreement and the issuance and sale
of the Bonds, and authorized or approved such other agreements, instruments and
documents for which specific authorization or approval may be
required.
(d) The
Company shall have provided a satisfactory opinion of its counsel with respect
to the due authorization, execution and delivery of the financing agreement, and
related agreements, instruments and documents, their legality, validity, binding
effect and enforceability in accordance with their respective terms, and the
absence of any violation of law, rule, regulation, judgment, decree or order of
any court or other agency of government and agreements, or other instruments to
which the Company is a party or by which it or any of its property, is or may be
bound and to such other matters as may be reasonably requested.
(e) The
Company and the Issuer shall have executed and delivered such non-arbitrage
certificates and representations, as may be required to comply with Section 148
of the Internal Revenue Code of 1986, as amended, or any similar successor
provisions and the regulations, rulings and interpretative court decisions
thereunder.
(f) Xxxxxx
Xxxxxx Olive P.A., as bond counsel, shall have delivered its opinion with
respect to the validity of the Bonds, and to the income tax status of the
interest on the Bonds.
(g) The
Company shall have provided such other or additional representations,
warranties, covenants, agreements, certificates, financial statements, and other
proofs as may be required by the Issuer or by Xxxxxx Xxxxxx Olive P.A., as bond
counsel.
SECTION
9. In the event that the Bonds are not issued and sold and the
transactions contemplated hereby are not closed within a timely basis for any
reason whatsoever and whether or not as a result of any failure to find one or
more purchasers for the Bonds, any default or failure of performance by the
Issuer, the inability of the Issuer to issue and sell the Bonds or the failure
or inability of the Issuer and the Company to agree to the terms and conditions
of the agreements, instruments and other documents provided for herein or
contemplated hereby, the Company agrees unless waived in the sole discretion of
the Issuer that:
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(a) The
Company will (i) pay all its costs and expenses, including any fees due any
attorneys, financial agents or others employed by the Company, (ii) pay the
reasonable fees and expenses of bond counsel, and (iii) reimburse the Issuer for
all reasonable out-of-pocket costs and expenses, including reasonable fees and
expenses of the Issuer's Counsel, which the Issuer may have incurred in
connection with this Memorandum of Agreement or the Bond issue.
(b) The
Company will indemnify and hold the Issuer, and the Issuer's members, officers,
employees and agents, harmless against any liabilities, allegations or claims of
loss or damage (including attorneys' fees and expenses) pertaining to the
Project, the Bonds, or any transaction contemplated hereunder, or arising out of
or predicated upon this Memorandum of Agreement, any action or non-action taken
or omitted in reliance upon this Memorandum of Agreement, or any default or
failure of performance hereunder.
SECTION
10. No covenant or agreement contained in this Memorandum of
Agreement or the Bonds, the trust agreement, the financing agreement,
or in any other instrument relating to the Bonds or the Project, shall be deemed
to be a covenant or agreement or any member, officer, employee or agent of the
Issuer in an individual capacity, and neither the members of any other officer
of the Issuer executing the Bonds or any such agreements or instruments shall be
liable personally thereon or be subject to any personal liability or
accountability by reason thereof.
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IN WITNESS WHEREOF, the
parties have executed this Memorandum of Agreement and affixed their respective
seals, as of the date first written above.
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PINELLAS
COUNTY INDUSTRIAL
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DEVELOPMENT AUTHORITY,
doing
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business
as the Pinellas County
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Economic
Development Authority
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(SEAL)
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By:
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/s/
Xxxx Xxxxxx
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Name:
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Xxxx
Xxxxxx
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Title:
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Executive
Director
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BOVIE
MEDICAL CORPORATION
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By:
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/s/
Xxxxx Citronowicz
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Name:
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Xxxxx
Citronowicz
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Chief
Operations Officer &
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Vice
President
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[Signature
Page to Memorandum of Agreement]
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