RBC Bank Modification Agreement (Cover Page)
Return
to:
Xxxxx
Xxxxxxxx
RBC
Bank (USA)
Lending
Service Center
000
Xxxxx Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxx Xxxxxxxx
00000
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______________________________Space
Above Line for Processing Data
_______________________________________________
RBC
Bank
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(Cover
Page)
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This
Agreement has been executed and delivered outside the State of Florida and
is not
secured by Florida real estate. No documentary stamp taxes are due
herewith.
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Prepared
by:
Xxxx
X. Xxx Xxxxx, Xxx
XxxxXxxxxxxx,
P.A.
000
X. Xxxxxxxx Xxxxxx, Xxx 0000
Xxxxx,
Xxxxxxx 00000
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State
of New York
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County
of New York
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From:
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BOVIE
MEDICAL CORPORATION, a Delaware corporation (whether one or more,
“Borrower”), with a business and mailing address of 0000
Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx
00000.
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To:
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RBC
BANK (USA) (“Bank”), with a business address of 000 X. Xxxxxx Xxxxxx,
Xxxxx Xxxxx, Xxxxx Xxxxxxxx 00000 and a mailing address of Post Office Box
0000, Xxxxx Xxxxx, Xxxxx Xxxxxxxx 00000-1220, which mailing address is the
place to which all notices and communications should be sent to Bank
regarding this Modification
Agreement.
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Date: As
of December 2, 2009
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Documents
Modified:
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Business
Loan Agreement (Asset Based), Promissory Note and Commercial Security
Agreement, each dated August 12, 2008
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Original
Credit Facility:
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Up
to $5,000.000.00
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Revised
Credit Facility:
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Up
to $8,000,000.00
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Customer
No. _____________
Loan No.
_________________
RBC
Bank
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MODIFICATION
AGREEMENT
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1
This
Agreement has been executed and delivered outside the State of Florida and is
not secured by Florida real estate. No documentary stamp taxes are due
herewith.
THIS
MODIFICATION AGREEMENT (“Modification Agreement”), entered into as of the
2nd day of December, 2009, by BOVIE MEDICAL CORPORATION, a Delaware corporation
(“Borrower”, whether one or more) with a mailing address of 0000 Xxxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxx 00000, and RBC BANK (USA) (“Bank”), with a mailing address
of Post Office Box 1220, Rocky Mount, North Carolina
27802-1220.
X.
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Xxxxxxxx
has made and issued to Bank its promissory note (“Note”) in the original
principal amount and dated as indicated on Attachment
1 attached hereto.
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B.
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If
so indicated on Attachment
1, the Note is secured and the security is generally as described
on Attachment
1.
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C.
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The
Note, any security documents described on Attachment
1 and any other loan and security documents that are outstanding
with respect to the extension of credit evidenced by the Note, even if not
listed on Attachment
1, are hereinafter collectively referred to as the “Contract” and
the Contract is hereby incorporated herein as a part of this Modification
Agreement.
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X.
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Xxxx
and Borrower mutually desire to modify the provisions of the Contract in
the manner hereinafter set out, it being specifically understood and
agreed that, except as herein modified, the terms and provisions of the
Contract and the individual instruments, documents and agreements that
make up the Contract shall remain unchanged and the Contract, as herein
modified, shall continue in full force and effect as therein and herein
written.
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NOW,
THEREFORE, Bank and Borrower, in consideration of the premises and the sum of
One Dollar ($1.00) to each in hand paid by the other, receipt and sufficiency of
which are hereby acknowledged by each, do hereby agree as follows:
Section
1. Modification. The
Contract shall be, and the same is, modified in the manner set forth in Attachment
2.
Section
2. Effect
of Modification. Nothing contained in this Modification
Agreement shall in any way impair the security now held for the indebtedness
evidenced by the Contract or the lien priority thereof, nor waive, annul, vary
or affect any provision, condition, covenant and agreement contained in the
Contract, nor affect or impair any rights, powers and remedies under the
Contract, except as herein specifically modified to do any one or more of the
foregoing. If any provision in this Modification Agreement shall be
interpreted or applied by a court or other tribunal with personal and subject
matter jurisdiction over the parties hereto and the Contract, as modified, so as
to impair the security now held for the indebtedness or lien priority thereof,
or do any one or more of any of the foregoing, such provision shall be
ineffective to the extent it causes an impairment of such security or the lien
priority thereof or causes any of such other consequences, or the application
thereof shall be in a manner and to an extent which does not impair such
security or the lien priority thereof, or result in the occurrence of any of the
other consequences. This Modification Agreement does not extend the
expiration dates or enlarge the terms of any property, physical damage, credit
and any other insurance written in connection with or financed by said
Contract.
Section
3. Financing
Statements. Borrower irrevocably authorizes Bank to file such
financing statements as may be necessary to protect, in Bank’s opinion, Bank’s
security interests and liens and, to the extent Bank deems necessary or
appropriate, to sign the name of Borrower with the same force and effect as if
signed by Xxxxxxxx and to make public in financing statements and other public
filings such information regarding Borrower as Bank deems necessary or
appropriate, including, without limitation, federal tax identification numbers,
social security numbers and other identifying information.
Section
4. Credit
Investigations; Bank’s Responsibilities. Bank is irrevocably
authorized by Borrower to make and Section 5. have made
such credit investigations as it deems
2
appropriate
to evaluate Xxxxxxxx’s credit, personal and financial standing and employment,
and Borrower authorizes Bank to share with consumer reporting agencies and
creditors its experiences with Borrower and other information in Bank’s
possession relative to Borrower. Bank shall not have any obligation
or responsibility to do any of the following: (1) protect and preserve any
collateral and other security given or to be given in connection with the
Contract, as herein modified, against the rights of third persons having an
interest therein; (2) provide information to third persons relative to the
Contract, as herein modified, Bank’s liens and security interests in any
collateral and other security, or otherwise with respect to Borrower; and (3)
subordinate its liens and security interests in any collateral and other
security to the interests of any third persons or to enter into control
agreements relative to such collateral and other security.
Section
6. Usury. Bank
does not intend to and shall not reserve, charge and collect interest, fees and
charges under the Contract, as herein modified, in excess of the maximum rates
and amounts permitted by applicable law. If any interest, fees and
charges are reserved, charged and collected in excess of the maximum rates and
amounts, it shall be construed as a mutual mistake, appropriate adjustments
shall be made by Bank and to the extent paid, the excess shall be returned to
the person making such a payment.
Section
7. Documentary
Stamps, etc. To the extent not prohibited by law and
notwithstanding who is liable for payment of the taxes and fees, Borrower shall
pay, on Bank’s demand, all intangible taxes, documentary stamp taxes, excise
taxes and other similar taxes assessed, charged and required to be paid in
connection with this Modification Agreement, and any future extension, renewal
and modification of the Contract, or assessed, charged and required to be paid
in connection with any of the loan documents which make up the
Contract.
Section
8. Anti-Terrorism.
Borrower represents, warrants and covenants to Bank as follows: (1) Borrower (a)
is not and shall not become 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)), (b) does not engage in and shall not engage in any dealings or
transactions prohibited by Section 2 of such executive order, and is not and
shall not otherwise become associated with any such person in any manner
violative of Section 2, (c) is not and shall not become a person on the list of
Specially Designated Nationals and Blocked Persons, and (d) is not and shall not
become subject to the limitations or prohibitions under any other U.S.
Department of Treasury’s Office of Foreign Assets Control regulation or
executive order; (2) Borrower is and shall remain in compliance, in all material
respects, with (a) 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 (b) the Uniting And Strengthening America
By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA
Patriot Act of 2001); and (3) Borrower has not and shall not use all or any part
of the extension of credit evidenced by the Note, 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..
Section
9. Costs
and Expenses. All of the costs and expenses incurred by Bank
in connection with this Modification Agreement shall be paid by Borrower upon
the request of and at the time of demand for payment thereof made by Bank on
Borrower. As used herein, “costs and expenses” include, without
limitation, reasonable attorneys’ fees and fees of legal assistants, and
reasonable fees of accountants, engineers, surveyors, appraisers and other
professionals or experts – and all references to attorneys’ fees or fees of
legal assistants, or fees of accountants, engineers, surveyors, appraisers or
other professionals or experts shall mean reasonable fees.
Section
10. Maintenance
of Records. Bank is authorized to maintain, store and
otherwise retain this Modification Agreement and the other documents
constituting the Contract in their original, inscribed tangible forms or records
thereof in an electronic medium or other non-tangible medium which permits such
records to be retrieved in perceivable forms.
Section
11. Waiver
of Jury Trial. Borrower, to the extent permitted by law,
waives any right to a trial by jury in any action arising from or related to
this Modification Agreement and waives any right to a trial by jury in any
action or proceeding arising from or related to the Contract, as herein
modified.
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Section
12. Governing
Law. This Agreement shall be governed and construed in
accordance with the laws of the State whose laws govern the Contract, excepting,
however, its conflict of law provisions.
Section
13. Reservation
of Rights; Entire Agreement. Bank does hereby reserve all
rights and remedies it may have against all parties secondarily liable for
repayment of the indebtedness evidenced by the Contract. The Contract, as herein
modified, contains the entire agreement of the parties and the undersigned do
hereby ratify and confirm the terms of the Contract, all of which shall remain
in full force and effect, as modified herein. This Modification
Agreement shall be binding upon any assignee and successor in interest of the
parties hereto. Borrower waives and will not assert against any transferee and
assignee of Bank any claims, defenses, set-offs and rights of recoupment which
Borrower could assert against Bank, except defenses which Borrower cannot
waive. All references herein to the “Modification Agreement” include
any supplemental agreements filed of record to reflect modifications of any of
the instruments, documents and other agreements making up the Contract that are
of record.
The
undersigned have executed this Modification Agreement under seal as of the day
and year first above stated.
BANK:
RBC
BANK (USA)
By: _______________________________________
Print
Name:_________________________________
Title:
______________________________________
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BOVIE
MEDICAL CORPORATION,
a
Delaware corporation
By: ________________________________________
Print
Name: Xxxxxx Xxxxxxxx
Title: President
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Witness:
_______________________________________
Print
Name: _____________________________
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4
Attachment
1
to
Modification
Agreement
1.
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Describe
Promissory Note (Date, Original Amount, Current Amount and all
Modifications):
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Promissory
Note dated August 12, 2009 in the original principal amount of
$5,000,000.00
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2.
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Describe
Security Documents (Type, Date and if recorded, Recording
Information):
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Business
Loan Agreement (Asset Based) dated August 12, 2008
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Commercial
Security Agreement dated August 12, 2008
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Assignment
of Deposit Agreement dated August 12,
2008
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5
Attachment
2
To
Modification
Agreement
The
Contract shall be, and the same is, modified as follows:
1. The
maturity date stated in the Note is changed to October 1, 2012 and to the extent
the maturity date is stated in any of the other individual instruments,
documents and agreements that make up the Contracts, the maturity date stated
therein is changed to the date stated herein.
2. The
interest rate stated in the Note is changed by changing the base index used for
determining the rate. The base index is changed to the LIBOR Base
Rate effective December 2, 2009, and after the change the new interest rate will
be the LIBOR BASE RATE plus 2.00%. The “LIBOR Base Rate” is the
London Interbank Offer Rate for U.S. Dollars for a term of one month which
appears on Bloomberg Professional Screen BBAM (or any generally recognized
successor method or means of publication) as of 11:00 a.m., London time, two (2)
London business days prior to the day on which the rate will become effective.
The rate for the first month or part thereof will initially become effective on
the date of this Modification Agreement as shown on the face hereof. Thereafter,
the rate will change and a new rate will become effective on the first calendar
day of each succeeding month. If for any reason, the London Interbank Offer Rate
is not available, then the “LIBOR Base Rate” shall mean the rate per annum which
banks charge each other in a market comparable to England’s Eurodollar market on
short-term money in U.S. Dollars for an amount substantially equivalent to the
principal amount due under the Contract as determined at 11:00 A.M., London
time, two (2) London business days prior to the day on which the rate will
become effective, as determined in the Bank’s sole discretion. Bank’s
determination of such interest rate shall be conclusive, absent manifest error.
Under no circumstances will the effective rate of interest on the Note be less
that a minimum floor rate of 4.00% per annum or greater than the maximum rate
allowed by applicable law.
3. The
Note is supplemented by adding the following provisions:
Unused
Fee. Borrower shall pay a fee to Bank equal to 0.40% per annum
(40 basis points) on the undrawn balance of the Credit Facility. The fee shall
be billed with the interest and shall be due and payable monthly at the time the
interest is due and payable.
Annual
Fee. Borrower shall pay an annual fee to Bank equal to 0.50%
(50 basis points) which shall be due and payable on the date hereof and on
October 12, 2010.
Late
Charges. Borrower agrees to pay, upon demand by Bank or if demand
is not sooner made, on maturity of this Note, whether such maturity occurs by
acceleration or on the Maturity Date, for each payment past due for fifteen (15)
or more calendar days, a late charge in an amount equal to the lesser of
(1) five percent (5%) of the amount of the payment past due or (2) the maximum
percentage of the payment past due permitted by applicable law, or the maximum
amount if not expressed as a percentage.
4.
The financial reporting requirements set forth in the Business Loan
Agreement (Asset Based) is changed to the following:
Financial
Statements. Furnish Lender with the
following:
Annual
Statements. As soon as available, but in no event later than ninety (90)
days after the end of each fiscal year, Borrower shall provide an annual budget
for the upcoming calendar year, together with a consolidated and consolidating
balance sheet, statement of income and retained earnings for the period then
ended and a statement of changes in the financial position of Borrower, all
prepared in accordance with GAAP consistently applied. The financial statements
shall be audited by an independent certified accountant satisfactory to the
Bank.
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Quarterly
Reports. As soon as available, but in no event later than 45 days after
the end of each calendar quarter, Borrower shall provide a balance sheet,
statement of income and retained earnings, a borrowing base report, accounts
payable report and an accounts receivable with aging and inventory report for
the period then ended and a statement of changes in financial position, all in
reasonable detail, and all prepared in accordance with GAAP consistently applied
and certified as true and correct by the chief financial officer or Borrower of
other officer approved by Bank.
Monthly
Reports. As soon as available, but in no event later than 20
days after the end of each calendar month, Borrower shall provide a Borrowing
Base report, accounts receivable with aging and summary inventory report for the
period then ended, together with a foreign receivables report showing the
Accounts that are insured through a Credit Insurance Policy acceptable to
Bank.
Additional
Information. Furnish such additional information and statements, as
Xxxxxx may request from time to time.
All
financial reports required to be provided under this Agreement shall be prepared
in accordance with GAAP, applied on a consistent basis, and certified by
Borrower as being true and correct.
5. The
financial covenants set forth in the Business Loan Agreement (Asset Based) are
changed to the following:
Financial
Covenants and Ratios. Comply with the following covenants and
ratios:
Borrower
to maintain a ratio of Maximum Debt to Tangible Net Worth of less than 2.00 to
1.00, defined as the ratio of Total Liabilities [Total Debt] to Tangible
Net Worth. The ratio shall be measured quarterly beginning September 30,
2009.
Tangible
Net Worth is defined as the total of Equity less (a) Intangibles, (b) deferred
charges, (c) leasehold improvements and (d) in certain circumstances, loans,
receivable from and investment in related parties. deferred taxes, doubtful
accounts not provided for, pre-paid expenses, etc.
Intangible
means any asset lacking physical substance or value.
Borrower
to maintain a ratio of Maximum Funded Debt to EBITDA of less than 3.25 to
1.00, defined as the ratio of Funded Debt to EBITDA. The ratio shall be
measured quarterly beginning September 30, 2009
Funded
Debt is defined as the total of (a) all obligations for borrowed money which
bears interest or to which interest is imputed, (b) all obligations for the
deferred payment of the purchase of property, (c) all capital lease obligations,
(d) all indebtedness secured by purchase money security interests (e) the amount
of any contingent liabilities such as guarantees or other financial assistance
provided in respect of liabilities of a third party. The term Funded Debt
excludes Subordinated Debt and Xxxxxxxx’s indebtedness under that certain
Promissory Note dated as of November 1, 2008 in the original principal amount of
$4,000,000.00 payable to the Pinellas County Economic Development
Authority.
EBITDA is
defined as the total of (a) net income from continuing operations (excluding
extraordinary gains or losses), and to the extent deducted in determining net
income, (b) interest expense, (c) income taxes (d) depreciation, depletion
and/or amortization expenses.
Borrower
to maintain a ratio of Minimum Debt Service Coverage of 1.50 to 1.00,
defined as the ratio of (a) EBITDA to the total of (b) Interest Expense plus
scheduled principal payments in respect of Funded Debt. The ratio shall be
measured quarterly on a rolling four quarter basis, beginning September 30,
2009.
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Except as
provided above, all computations made to determine compliance with the
requirements contained in this paragraph shall be made in accordance with GAAP,
applied on a consistent basis, and certified by Borrower as being true and
correct.
6. The
negative covenants set forth in the Business Loan Agreement (Asset Based) are
supplemented by adding the following:
Change
in Management. Borrower
shall not permit a material change in its senior management as identified in its
10-K Annual Report for the calendar year ending December 31,
2008.
7. The
definitions of “Borrowing Base” and “Note” set forth in the Business Loan
Agreement (Asset Based) are changed to read as follows:
Borrowing
Base. The words "Borrowing Base" means the lesser of (1) $8,000,000.00 or
(2) the sum of (a) 80% of good effective assigned unencumbered trade accounts
receivable, plus (b) 85% advance against eligible foreign Accounts Receivable
that are insured by a Credit Insurance Policy acceptable to the Bank, Plus (c)
50% of the less or cost or current market value of saleable inventory and raw
materials Inventory advances shall be limited to 50% of the total line amount.,
plus (d) 95% of assigned cash held in a deposit instrument at Bank, with a
proper collateral hold.
Note.
The word "Note" means the Renewal Note dated as of October 12, 2009 in the
principal amount of $8,000,000.00 from Borrower to Lender and any other Note
from Borrower to Lender pursuant to which future advances intended to be secured
by this Agreement are made, together with all present and future obligations
evidenced thereby and secured by this Agreement and together with all renewals,
extensions, modifications, refinancings, and substitutions for the
Note.
8. Any
reference to a negative pledge relating to the commercial property located at
0000 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx is hereby deleted.
9. Xxxxxxxx’s
General Intangibles are hereby released as Collateral for the Note and all
references to General Intangibles in the Commercial Security Agreement are
deleted.
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