EXHIBIT 10.1

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT (the “ Agreement ”) is   made and entered into this 20 th day of March, 2014, by and between The Bank of Tampa, a Florida banking corporation (" Lender "), having an address of Post Office Box One, Tampa , Florida 33601 and Bovie Medical Corporation , a Delaware corporation (“ Borrower ”), having an address of 5115 Ulmerton Road , Clearwater, Florida 33760.

 

W I T N E S S E T H:

 

WHEREAS , Borrower has requested that Lender extend to Borrower a mortgage loan in the principal amount of $3,592,000.00 and Lender has agreed to provide such financing as more particularly provided herein upon all of the terms and conditions of this Agreement;

NOW, THEREFORE , in consideration of the mutual covenants contained herein, the receipt and adequacy of which is acknowledged by the parties, the parties agree as follows:

ARTICLE ONE

DEFINITIONS AND CERTAIN TERMS

1.01  Defined Terms . For purposes of this Agreement, in addition to the terms defined elsewhere herein, including without limitation the preamble to this Agreement, the following terms shall have the meanings set forth below (such meanings to be equally applicable to the singular and plural forms thereof):

To the extent used herein, the terms “ Account ”, “ Account Debtor ”, “ Chattel Paper ”, “ Commercial Tort Claim ”, “ Deposit Account ”, “ Document ”, “ Electronic Chattel Paper ”, “ Equipment ”, “ Fixtures ”, “ General Intangible ”, “ Goods ”, “ Healthcare Insurance Receivable ”, “ Instrument ”, “ Inventory ”, “ Investment Property ”, “ Letter of Credit Right ”, “ Payment Intangible ”, “ Software ”, and “ Supporting Obligation ” shall each have the respective meanings ascribed thereto in the UCC.

“ Affiliate ” shall mean, as to any Person: (i) each other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified and (ii) any officer, director, manager, or general partner of such Person. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “controlled” have meanings correlative thereto. A Person shall be deemed to be controlled by another Person if such other Person beneficially owns or holds directly or indirectly, 5 % or more of the voting control or equity interests of such Person.

“ Assignment of Rents ” shall mean that certain Assignment of Rents, Leases, Profits and Contracts dated on or about the date hereof from Borrower in favor of Lender and relating to the Real Estate Collateral, as the same may be modified, amended, restated or supplemented at any time or from time to time.

“ Blocked Persons List ” shall mean the list of Specially Designated Nationals and Blocked Persons generated and maintained by OFAC, as it exists from time to time or at any time, together with any and all amendments or replacements thereto or thereof.

“ Business Day ” shall mean (i) any day on which Lender is open for commercial banking business in Tampa, Florida, and (ii) in respect of any determination relevant to any interest rate provided in the Note, any such day that is also a day on which tradings are conducted in the London interbank Eurodollar market.

 

“ CD Collateral ” shall mean that certain Certificate Deposit currently bearing account no.: 758038513 issued by Lender in favor of Borrower in the original amount of $898,000.00, all amounts deposited therein, and all replacements or substitutions thereof.

“ CD Pledge Agreement ” shall mean that certain Certificate of Deposit Pledge Agreement dated on or about the date hereof from Borrower in favor of Lender pursuant to which Borrower has pledged to Lender the CD Collateral as collateral security for the Loan, as the same may be amended, modified, restated or supplemented at any time or from time to time.

“ Collateral ” shall mean all the assets, property and interests in property that shall from time to time be pledged or be purported to be pledged as direct or indirect security for any of the Obligations pursuant to any one or more of the Security Documents, other Loan Documents, or otherwise, including without limitation, all Accounts (including without limitation, all Healthcare Insurance Receivables), all Chattel Paper (including, without limitation, Electronic Chattel Paper), to the extent that same constitutes proceeds of the Accounts, all Payment Intangibles, to the extent that same constitutes proceeds of the Accounts, all Documents, all Instruments, to the extent that same constitutes proceeds of the Accounts, Supporting Obligations and/or, Letter of Credit Rights to the extent that the same secure, guaranty or otherwise relate to the Accounts, the CD Collateral, and the Real Estate Collateral. In the event of any inconsistency between this definition and the definition of Collateral in any Security Document, such Security Document shall control.

“ Debt Service Coverage Ratio ” shall mean the ratio of (a) EBITDA for the period of measure to (b) the sum of (i) Borrower's interest expense, and (ii) all principal payments with respect to Indebtedness that were paid or were due and payable by Borrower during the period of measure.

“ Default Condition ” shall mean any event or condition that, with the passage of time or giving of notice, or both, would constitute an Event of Default .

“ Default Rate ” shall have the meaning ascribed to said term in the Note.

“ Document Fee ” a fee in the amount of $300.00 payable by Borrower to Lender as a condition of Lender’s making the Loan to Borrower.

“ EBITDA ” shall mean the amount of Borrower’s earnings before interest, taxes, depreciation and amortization expense, adjusted for non-recurring items, in Lender’s sole and absolute discretion, for the period of measure.

“ Eligible Stocks ” shall mean any common or preferred stock which (i) is not control or restricted stock under Rule 144 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended, or subject to any other regulatory or contractual restrictions on sales, (ii) is traded on a U. S. national stock exchange, including NASDAQ, with a liquidity on such exchange for such stock acceptable to Lender, and (iii) has, as of the close of trading on the applicable exchange (excluding after hours trading), a per share price of at least Fifteen Dollars ($15).

“ Environmental Laws ” shall mean any and all federal, state and local laws, statutes, ordinances, rules, regulations, permits, licenses, approvals, rules of common law and orders of courts or any Governmental Authority , relating to the protection of human health or occupational safety or the environment, now or hereafter in effect and in each case as amended from time to time, including, without limitation, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Substances , including, without limitation, the following federal laws: the Resource Conservation Recovery Act , the Comprehensive Environmental Response Compensation and Liability Act, the Superfund Amendments and Reauthorization Act , the Toxic Substances Control Act , the Hazardous Materials Transportation Act , the Clean Air Act , and the Clean Water Act .

 

 

“ Environmental Liability ” shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental investigation and remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities) of Borrower directly or indirectly resulting from or based upon (i) any actual or alleged violation of any Environmental Law , (ii) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Substances , (iii) any actual or alleged exposure to any Hazardous Substances , (iv) the release or threatened release of any Hazardous Substances or (v) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“ ERISA Event ” shall mean (i) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to an employee benefit (“ Plan ”) (other than an event for which the 30-day notice period is waived); (ii) the existence with respect to any Plan of an “ accumulated funding deficiency ” (as defined in Section 412 of the Code or Section 302 of ERISA ), whether or not waived; (iii) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan ; (iv) the incurrence by Borrower of any liability under Title IV of ERISA with respect to the termination of any Plan ; (v) the receipt by Borrower from the PBGC or a plan administrator appointed by the PBGC of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan ; (vi) the incurrence by Borrower of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan ; or (vii) the receipt by Borrower of any notice, or the receipt by any multiemployer plan, as defined in ERISA, from Borrower of any notice, concerning the imposition of withdrawal liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA .

 

“ Event of Default ” shall have the meaning ascribed to said term in Section 9.01 hereof.

 

“ Executive Order 13224 ” shall mean Executive Order No. 13224, 66 Fed. Reg. 49709 (Sept. 25, 2001) , as well as any supplement, amendment or replacement thereto or thereof.

 

“ Extended Maturity Date ” shall mean March 20 , 2022

 

“ Financial Officer ” shall mean, with respect to Borrower , the vice president of finance, chief financial officer, principal accounting officer or treasurer of Borrower .

 

“ Fiscal Year ” shall mean any fiscal year of the Borrower .

 

“ GAAP ” shall mean generally accepted accounting principles in the United States .

 

“ Governmental Authority ” shall mean any nation or government, any state or local government political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

 

“ Hazardous Substances ” shall mean any substances or materials (i) that are or become defined as hazardous wastes, hazardous substances, pollutants, contaminants or toxic substances under any applicable Environmental Law, (ii) that are defined by any applicable Environmental Law as toxic, explosive, corrosive, ignitable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous (iii) the presence of which require investigation, removal, remediation or any other response of any kind under any applicable Environmental Law or causes or threatens to cause a nuisance upon any property of Borrower or to any adjacent properties or poses or threatens to pose a hazard to the health or safety of persons on or about any such property, (iv) that consist of underground or aboveground storage tanks, whether empty, filled or partially filled with any substance, or (v) that contain, without limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived substances or wastes, crude oil, nuclear fuel, natural gas, synthetic gas, radon gas, radioactive materials, or isotopes.

 

 

“ Hedging Obligations ” of any Person shall mean any and all obligations of such Person, whether absolute or contingent and howsoever and whomsoever created, arising, evidenced or acquired under (i) any and all Hedging Transactions, (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Hedging Transactions and (iii) any and all renewals, extensions and modifications of any Hedging Transactions and any and all substitutions for any Hedging Transactions, and shall include without limitation any obligations arising under any Interest Rate Management Agreement.

 

“ Hedging Transaction ” of any Person shall mean any transaction (including an agreement with respect thereto) now existing or hereafter entered into by such Person that is a rate swap, basis swap, forward rate transaction, commodity swap, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collateral transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures and shall include without limitation any transaction evidenced by any Interest Rate Management Agreement.

 

“ Indebtedness ” of any Person shall mean, without duplication (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of the deferred purchase price of property or services (other than (A) trade payables incurred in the ordinary course of business not more than ninety (90) days past due and (B) and accrued obligations), (iv) all obligations of such Person under any conditional sale or other title retention agreement(s) relating to property acquired by such Person (other than accrued obligations), (v) all capital lease obligations of such Person, (vi) all obligations, contingent or otherwise, of such Person in respect of letters of credit, acceptances or similar extensions of credit, (vii) all guaranties of such Person of the type of Indebtedness described in clauses (i) through (vi) above, (viii) the value of property owned by such Person securing the Indebtedness of a third party, whether or not such Indebtedness has been assumed by such Person, (ix) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any common stock of such Person, (x) all off-balance sheet liabilities or such Person and (xi) all Net Mark-to-Market Exposure in respect of all Hedging Obligations of such Person. The Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor.

 

“ Initial Maturity Date ” shall mean March 20, 2017.

“ Interest Rate ” shall have the meaning ascribed to said term in the Note.

“ Interest Rate Protection Agreement ” shall mean any agreement between Borrower and Lender or any affiliate of Lender now existing or hereafter entered into, which provides for an interest rate, currency, equity, credit or commodity swap, cap, floor or collar, spot or forward foreign exchange transaction, cross currency rate swap, currency option, any combination of, or option with respect to, any of the foregoing or any similar transactions, for the purpose of hedging Borrower's exposure to fluctuations in interest rates, exchange rates, currency, stock, portfolio or loan valuations or commodity prices (including any such or similar agreement or transaction entered into by Lender or any affiliate thereof in connection with any other agreement or transaction between Borrower and Lender or any affiliate thereof ).

“ Lien ” shall mean any mortgage, pledge, hypothecation, assignment, security interest, lien (statutory or otherwise), preference, priority, charge or other encumbrance of any nature, whether voluntary or involuntary, including, without limitation, the interest of any vendor or lessor under any conditional sale agreement, title retention agreement, capital lease or any other lease or arrangement having substantially the same effect as any of the foregoing.

 

“ Loan ” shall mean the term mortgage loan made by Lender to Borrower and taken by Borrower from Lender pursuant to the provisions of this Agreement and as more particularly described in Section 2.01 hereof.

“ Loan Documents ” shall mean, collectively, this Agreement, the Note, the Security Documents, any Interest Rate Protection Agreement, and all other agreements, instruments, documents and certificates now or hereafter executed and delivered to the Lender by or on behalf of Borrower with respect to this Agreement and the transactions contemplated hereby, in each case as amended, modified, supplemented or restated from time to time.

“ Loan Fee ” a fee in the amount of $17,760.00 payable by Borrower to Lender as a condition of Lender’s making the Loan to Borrower.

“ Material Adverse Effect ” shall mean a material adverse effect upon (i) the financial condition, operations, business, properties, liabilities (actual or contingent), assets, or prospects of Borrower, (ii) the ability of Borrower to perform its obligations under this Agreement or any of the other Loan Documents, or (iii) the legality, validity or enforceability of this Agreement or any of the other Loan Documents or the rights and remedies of Lender hereunder and thereunder.

“ Mortgage ” shall mean that certain Mortgage, Security Agreement, Fixture Filing and Assignment of Rents dated on or about the date hereof from Borrower in favor of Lender, encumbering the Real Estate Collateral and securing the Loan and other Obligations, as the same may be amended, modified, restated or supplemented at any time or from time to time.

“ Net Mark-to-Market Exposure ” of any Person shall mean, as of any date of determination with respect to any Hedging Obligation, (i) for any Hedging Transaction which has been closed out and termination values determined in accordance therewith, such termination values; and (ii) for any other Hedging Transaction, the excess (if any) of all unrealized losses over all unrealized profits of such Person arising from such Hedging Obligation. “Unrealized losses” shall mean the fair market value of the cost to such Person of replacing the Hedging Transaction giving rise to such Hedging Obligation as of the date of determination (assuming the Hedging Transaction were to be terminated as of that date), and “unrealized profits” means the fair market value of the gain to such Person of replacing such Hedging Transaction as of the date of determination (assuming such Hedging Transaction were to be terminated as of that date).

“ Note ” shall mean the Promissory Note dated on or about the date hereof in the principal amount of the Loan, and made by Borrower and payable to the order of Lender, as the same may be amended, modified

“ Obligations ” shall mean (a) all amounts owing by Borrower to Bank pursuant to or in connection with the Note, this Agreement or any other Loan Document or otherwise with respect to the Loan, including without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), all reimbursement obligations, fees, expenses, indemnification and reimbursement payments, costs and expenses (including all fees and expenses of counsel to Lender incurred pursuant to the Note this Agreement or any other Loan Document), whether direct or indirect, absolute or contingent, liquidated or unliquidated, now existing or hereafter arising hereunder or thereunder, (b) all obligations, sums or fees owing under any Interest Rate Protection Agreement, and (c) all other indebtedness of whatever kind arising of Borrower to Lender or any affiliate of Lender, together with all renewals, extensions, modifications or refinancings of any of the foregoing.

“ Organizational Documents ” shall mean as to any Person which is not a natural person, the documents and/or instruments creating and/or governing the formation or operation of such Person, including without limitation such documents required to be filed with any Governmental Authority having jurisdiction over the creation or formation of such Person and including without limitation, articles of incorporation, bylaws, shareholder agreements, voting trust agreements, articles of organization, operating agreements, management agreements, certificates of limited partnership, partnership agreements, statements of qualification, trust agreements or indentures or other agreements or instruments as appropriate for such Person.

 

“ Permitted Encumbrances ” shall mean: (i) Liens imposed by law for taxes, assessments or charges or levies of any Governmental Authority not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP; (iii) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of Borrower, including without limitation those items set forth in the Mortgage as “Permitted Encumbrances”; (iv) extensions, renewals or replacements of any Lien referred to in paragraphs (i) through (iii) above, provided that the principal amount of the obligation secured thereby is not increased and that any such extension, renewal or replacement is limited to the property originally encumbered thereby; and (v) Liens that are contractual rights of set-off relating to purchase orders and other agreements entered into with customers of Borrower in the ordinary course of business.

“ Person ” shall mean any natural person, corporation, association, joint venture, partnership, limited liability company, company, association, trust, Governmental Authority or other entity.

“ Real Estate Collateral ” shall mean that certain real property and all improvements thereon, at any time or from time to time, which real property is described on Exhibit “A” , and which shall be encumbered by the Mortgage in order to secure the Credit Facility and other Obligations.

“ Responsible Officer ” shall mean with respect to Borrower any of the president, the chief executive officer, the chief operating officer, the Financial Officer, or a vice president or a manager or managing member or a general partner or managing general partner of Borrower or such other representative of Borrower as may be designated in writing by any one of the foregoing with the consent of Lender; and, with respect to the financial covenants only, the Financial Officer of Borrower. Any document delivered in connection with this Agreement or any of the other Loan Documents that is signed by a Responsible Officer of Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership or other entity action on the part of Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of Borrower.

“ Security Agreement ” shall mean the Security Agreement, made by the Borrower in favor of Lender dated on or about the date hereof, pursuant to which Borrower has granted to Lender a security interest in and to that portion of the Collateral described therein, as amended, modified, restated or supplemented at any time or from time to time.

“ Security Documents ” shall mean the CD Pledge Agreement, the Mortgage, the Security Agreement, the Assignment of Rents, and all other pledge or security agreements, mortgages, deeds of trust, assignments or other similar agreements or instruments executed and delivered by Borrower in favor of Lender securing any or all of the Obligations or otherwise in connection with the transactions contemplated hereby, in each case as amended, modified, restated, or supplemented at any time or from time to time

“ UCC ” shall mean the Uniform Commercial Code as in effect in each applicable jurisdiction, as amended or modified from time to time.

“ Unencumbered Liquid Assets ” shall mean the following assets (excluding assets of any retirement plan) which (i) are not the subject of any lien, pledge, security interest or other arrangement with any creditor to have such creditor’s claim satisfied out of the asset (or proceeds thereof) prior to the general creditors of the owner of the asset , (ii) are held solely in the name of Borrower; (iii) may be converted to cash within five (5) days, (iv ) are otherwise acceptable to Lender in its reasonable discretion; and (v) are not being counted or included to satisfy any other liquidity requirement under any other obligation, whether with Lender or any other lender, unless otherwise expressly agreed by Lender in writing:

 

(a) Cash or cash equivalents held in the United States and denominated in United States dollars;

(b) United States Treasury or governmental agency obligations which constitute full faith and credit of the United States of America;

(c) Commercial paper rated P-1 or A1 by Moody’s or S&P, respectively;

(d) Medium and long-term securities rated investment grade by one of the rating agencies described in (c) above;

(e) Eligible Stocks; and

(f) Mutual funds quoted in The Wall Street Journal which invest primarily in the assets described in (a) – (e) above.

1.02  Accounting Terms and Determinations . Unless otherwise defined or specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP as in effect from time to time, applied on a consistent basis or other standard acceptable to Bank. For purposes of determining compliance with any covenant (including computation of any financial covenant) contained herein, Indebtedness of Borrower shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB Accounting Standards Codification 825 on financial liabilities shall be disregarded.

1.03  Internal References. Unless otherwise specified or unless the context otherwise requires, all references herein to sections, annexes, schedules and exhibits are references to sections, annexes, schedules and exhibits in and to this Agreement, and all terms defined in this Agreement shall have the defined meanings when used in any other Loan Document or any certificate or other document made or delivered pursuant hereto.

ARTICLE TWO

CREDIT

2.01  Loan . Lender hereby makes and Borrower hereby agrees to take the Loan in the principal amount of $3,592,000.00, which shall be evidenced by the Note in said principal sum dated as of even date herewith payable to the order of Lender. The Loan shall be available to Borrower in a single advance on or about the date hereof for the purpose of refinancing existing mortgage debt secured by the Real Estate Collateral. The Loan shall be due and payable in full on the Initial Maturity Date, unless all of the conditions set forth in Section 2.04 hereof shall have been satisfied prior to the Initial Maturity Date in which case the maturity of the Loan shall be extended and the Loan shall be due and payable in full on the Extended Maturity Date. Until maturity of the Loan, the Loan shall be payable by Borrower as provided in and in accordance with the terms of the Note.

2.02  Loan Fee . Borrower shall unconditionally pay to Lender the Loan Fee, which shall be due and payable in good, collected funds on the date of the execution and delivery of this Agreement.

 

2.03  Document Fee . Borrower shall unconditionally pay to Lender the Document Fee, which shall be due and payable in good, collected funds on the date of the execution and delivery of this Agreement.

2.04  Extension of Maturity of Loan . Provided that all of the following terms and conditions shall have been met or exist on or before the Initial Maturity Date, the maturity of the Loan shall be extended until the Extended Maturity Date:

(a)   No Event of Default or Default Condition shall then exist; and,

(b)   Borrower shall have maintained a Debt Service Coverage Ratio for each of the preceding four (4) consecutive fiscal quarters of not less than 1.00 to 1.00.

 

In the event that the foregoing conditions have not been satisfied as of, on or before the Initial Maturity Date, then the Loan shall mature and be due and payable in full as provided in the Note on the Initial Maturity Date.

ARTICLE THREE

CONDITIONS TO LOAN

3.01  Conditions to Effectiveness. The obligations of Lender to make the Loan to Borrower shall not become effective until the date on which each of the following conditions is satisfied:

(a) Lender shall have received all fees and other amounts due and payable on or prior to the date hereof, including without limitation the Document Fee and the Loan Fee and reimbursement or payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel to Lender) required to be reimbursed or paid by Borrower hereunder or under any other Loan Document.

(b) Lender (or its counsel) shall have received the following (all of which shall be in form and substance satisfactory to Lender in its sole discretion):

 

 

 

 

 

 

3.02 Delivery of Documents . All of the Loan Documents, certificates, legal opinions and other documents and papers referred to in this Article Three, unless otherwise specified, shall be delivered to Lender and, except for the Note, in sufficient counterparts or copies as Lender shall require and shall be in form and substance satisfactory in all respects to Lender.

ARTICLE FOUR

REPRESENTATIONS AND WARRANTIES

To induce Lender to enter into this Agreement and to make the Loan to Borrower, Borrower represents and warrants to Lender both before and after giving effect to the transactions contemplated hereby, which representations and warranties shall be deemed made as of the date of this Agreement, as follows:

 

4.01  Existence; Power. Borrower (i) is duly organized, validly existing and in good standing as a corporation under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to carry on its business as now conducted, and (iii) is duly qualified to do business, and is in good standing, in each jurisdiction where such qualification is required, except where a failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect.

 

4.02  Organizational Power; Authorization. The execution, delivery and performance by the Borrower of the Loan Documents are within Borrower’s organizational powers and have been duly authorized by all necessary organizational, and if required, shareholder action. This Agreement and each other Loan Document dated the date hereof has been duly executed and delivered by Borrower, and constitutes, and each other Loan Document to which Borrower will become a party, when executed and delivered by Borrower shall constitute, valid and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

 

4.03  Places of Business. Borrower’s correct, legal name and jurisdiction of organization is as set forth in the preamble to this Agreement and (i) the chief executive office of Borrower is as set forth in the preamble to this Agreement. Except as disclosed in the preamble hereto: (i) Borrower has not been organized in any other jurisdiction, nor changed its location for purposes of Article 9 of the UCC in the last five (5) years, (ii) Borrower has not changed its name in the last five (5) years, and (iii) during such period Borrower has not used, nor does Borrower now use, any fictitious or trade name.

 

 

4.04 Pending Litigation. There are no judgments or judicial or administrative orders, proceedings or investigations (civil or criminal) pending or, to the knowledge of Borrower, threatened, against Borrower in any court or before any Governmental Authority, other than as set forth on Schedule 4.04 hereto or which, if adversely determined, could not reasonably be expected to cause a Material Adverse Effect. No shareholder, director, or executive officer of Borrower has been indicted or convicted in connection with or is engaging in any racketeering or other similar criminal conduct or activity, or is currently subject to any lawsuit or proceeding or under investigation in connection with any racketeering or other similar criminal conduct or activity.

 

4.05  Governmental Approvals ; No Conflicts . The execution, delivery and performance by Borrower of this Agreement , and the other Loan Documents (i) do not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority , except those as have been obtained or made and are in full force and effect, (ii) do not violate or result in the breach of any of the terms and provisions of any Organizational Document to which Borrower is bound or is a party, (iii) will not violate any requirements of law applicable to Borrower, or any judgment, order or ruling of any Governmental Authority , (iv) will not violate or result in a default under any indenture, material agreement or other material instrument binding Borrower or any of its assets or give rise to a right thereunder to require any payment to be made by Borrower , and (v) will not result in the creation or imposition of any Lien on any asset of Borrower , except Liens created under the Loan Documents .

 

4.06  Financial Statements.   The annual financial statements of Borrower dated as of December 31, 2012, and the interim financial statements of Borrower dated as of September 30, 2013, delivered to Lender in connection with the Loan (including in all cases the notes thereto, if any) have been prepared in accordance with GAAP, are accurate and complete in all material respects as of the respective dates thereof, are consistent with each Borrower’s books and records (which, in turn, are accurate and complete in all material respects), present fairly in all material respects Borrower’s financial condition, results of operations and cash flows as of the respective times and for the respective periods referred to therein. There have been no changes to the financial condition of Borrower which have had or could reasonably be expected to have, singly or in the aggregate, a Material Adverse Effect. Borrower has no indebtedness, Lien or other liability that would be required to be disclosed on a balance sheet in accordance with GAAP, except for those (i) set forth on the financial statements referred to hereinabove or (ii) incurred in the ordinary course of business since the respective dates of Borrower’s financial statement referred to hereinabove.

 

4.07  Environmental Matters.   Borrower (i) has not stored or disposed of any Hazardous Substances on the Real Estate Collateral or any of its other properties except in compliance with Environmental Laws, (ii) has not failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (iii) is not or has not become subject to any Environmental Liability, (iv) has received no notice of any claim with respect to any Environmental Liability or (v) knows of no basis for any Environmental Liability.

 

4.08  Compliance with Laws and Agreements . To the best of Borrower’s knowledge, Borrower is in compliance with (a) all requirements of law and all judgments, decrees and orders of any Governmental Authority and (b) all indentures, agreements or other instruments binding upon it or its properties, except where non-compliance, either singly or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect .

 

4.09  Taxes .   Borrower has timely filed or caused to be filed all Federal and state income tax returns and all other material tax returns that are required to be filed by them, and have paid all taxes shown to be due and payable on such returns or on any assessments made against it or its property, except where the same are currently being contested in good faith by appropriate proceedings and for which Borrower has set aside on its books adequate reserves in accordance with GAAP . The charges , accruals and reserves on the books of Borrower in respect of such taxes are adequate, and no tax liabilities that could be materially in excess of the amount so provided are anticipated.

 

 

4.10  ERISA .   Borrower is in compliance with all applicable provisions of the Employee Retirement Income Security Act of 1974 , as amended (“ ERISA ”), the Internal Revenue Code of 1986 , as amended (the “ Code ”) and the regulations and published interpretations thereunder with respect to all employee benefit plans covered thereby. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect .

 

4.11  Investment Company Act, etc. Borrower is (a) not an “investment company” nor is it “controlled” by an “investment company”, as such terms are defined in, or subject to regulation under, the Investment Company Act of 1940, as amended, or (b) not otherwise subject to any other regulatory scheme limiting its ability to incur debt or requiring any approval or consent from or registration or filing with, any Governmental Authority in connection therewith.

 

 

(a)   Borrower has good title to the Real Estate Collateral, which is free and clear of Liens other than Permitted Encumbrances.

 

(b)   The Real Estate Collateral is insured with financially sound and reputable insurance companies which are not Affiliates of Borrower , in such amounts with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Real Estate Collateral is located and otherwise in compliance the terms of the Mortgage .

 

4.13  Subsidiaries. Borrower has no Subsidiaries, except as set forth on Schedule 4.13 .

 

4.14  Borrower Disclosures. Borrower has disclosed to Lender all agreements, instruments, and corporate or other restrictions to which Borrower is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates nor other information furnished by or on behalf of Borrower to the Lender in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by any other information so furnished) contains any material misstatement of fact nor omits to state any material fact necessary to make the statements therein, taken as a whole, in light of the circumstances under which they were made, not misleading.

 

4.15  OFAC.   Borrower (i) is not a Person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit , Threaten to Commit , or Support Terrorism (66 Fed. Reg. 49079 (2001)) , (ii) does not engage in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such Person in any manner violative of Section 2 , or (iii) is not a Person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order.

 

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

 

 

4.17  Schedules. Each of the Schedules, if any, attached to this Agreement sets forth a true, correct and complete description, in all material respects, of the matter or matters covered thereby.

 

4.18  Absence of Defaults. No Default Condition or Event of Default has occurred or is continuing.

 

ARTICLE FIVE

AFFIRMATIVE COVENANTS

Borrower covenants and agrees until such time as the Obligations have been indefeasibly paid in full in cash:

 

5.01  Payment of Obligations. Borrower shall pay principal, interest, fees and other charges on the Loan and the other Obligations as and when due pursuant to the Note, this Agreement, and the other Loan Documents.

 

 

(a) As soon as available and in any event within 120 days after the end of each Fiscal Year of Borrower, Borrower shall submit to Lender the audited annual financial statements for Borrower for the Fiscal Year most recently ended, prepared in conformity with GAAP consistently applied and consisting of a balance sheet, and related statements of income, equity and cash flows (together with footnotes thereto) of Borrower reported on by an independent public accounting firm acceptable to Bank (without a “going concern” or like qualification, exception or explanation and without any qualification or exception as to scope of such audit) to the effect that such financial statements present fairly in all material respects the financial condition and the results of operations of Borrower for such Fiscal Year;

 

(b) As soon as available and in any event within 30 days after the end of each fiscal quarter, Borrower shall submit to Lender an internally prepared balance sheet of Borrower as of the end of such fiscal quarter and the related statements of income and cash flows of Borrower, for such fiscal quarter and the then elapsed portion of such Fiscal Year, setting forth in each case in comparative form the figures for the corresponding fiscal quarter and the corresponding portion of Borrower’s previous Fiscal Year certified by Borrower’s Financial Officer;

 

(c) As soon as available, and in any event within thirty (30) days of the date of filing thereof, but in any and all events not later than September 15 th of each year, Borrower shall submit to Lender a complete copy of its federal income tax return for each calendar year together with all schedules or exhibits thereto;

 

(d) Upon occurrence, prompt written notice of any change (i) in Borrower ’s organizational name, (ii) in the jurisdiction of organization or formation of Borrower , (iii) in Borrower’s identity or form of organization or (iv) Borrower’s Federal Taxpayer Identification Number . Borrower agrees not to effect or permit any change referred to in the preceding sentence unless it has obtained the prior written consent of Lender , in its sole and absolute discretion, and all filings have been made under the UCC or otherwise that are required in order for Lender to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral ; and

 

 

(e)   Promptly following any request therefor by Lender, such other information regarding the results of operations, business affairs and financial condition of Borrower as Lender may reasonably request.

 

All financial statements and financial information submitted to Bank in accordance with this Agreement shall include, among other things, detailed information regarding (i) any Person of which Borrower is the majority owner and (ii) any Person of which Borrower is not the majority owner, but for which such Borrower is directly or contingently liable on debts or obligations of any kind incurred by such Persons. All financial statements or records submitted to Lender via electronic means, including, without limitation by facsimile, open internet communications or other telephonic or electronic methods, including, without limitation, documents in Tagged Image Format Files (“ .tiff ”) or Portable Document Format (“. pdf ”) shall be treated as originals, fully binding and with full legal force and effect and the parties waive any rights they may have to object to such treatment. Lender may rely on all such records in good faith as complete and accurate records produced or maintained by or on behalf of the party submitting such records.

5.03  Maintenance of Insurance, Financial Records and Existence.

 

(a)  Required Insurance. Borrower shall maintain or cause to be maintained insurance on Borrower’s properties and assets against fire, casualty, public liability, as well as general liability, and other liability insurance related to the business of Borrower (or, if applicable, its direct or indirect Subsidiaries) as is customary for such business, all in such amounts, with such deductibles and with such insurers as are customary for such business, and otherwise as required pursuant to the terms of the Security Documents (the “ Required Insurance ”). All of the policies relating to the Required Insurance shall contain standard “mortgagee” (where applicable), “lender loss payable” and “additional insured” (where applicable) clauses issued in favor of Lender pursuant to which all losses thereunder shall be paid to Lender as Lender’s interests may appear. Such policies shall expressly provide that the Required Insurance cannot be altered in any way adverse to Lender or canceled without thirty (30) days’ (or ten (10) days with respect to nonpayment of premium) prior written notice to Lender and shall insure Lender notwithstanding the act or neglect of the insured. At or prior to the date hereof, Borrower shall furnish Lender with insurance certificates certified as true and correct and being in full force and effect as of the date hereof or such other evidence of the Required Insurance as Lender may require. In the event the Borrower fails to procure or causes to be procured any of the Required Insurance or to timely pay or cause to be paid the premium(s) on any of the Required Insurance, Lender may do so for Borrower, but Borrower shall continue to be liable for the same. Borrower further covenants that all insurance premiums owing under its current casualty policy or policies will be paid when due. Borrower also agrees to notify Lender, promptly, upon Borrower’s receipt of a notice of termination, cancellation or non-renewal from its insurance company of any of the Required Insurance. Borrower hereby appoints Lender as its attorney-in-fact, exercisable at Lender’s option upon the occurrence and during the continuance of an Event of Default, to endorse any check which may be payable to Borrower in order to collect the proceeds of the Required Insurance. The foregoing general requirements shall not be in limitation or derogation of any other requirement of Borrower to obtain and/or maintain insurance as specified in any other Loan Document, including without limitation, any Security Document.

 

(b)  Financial Records. Borrower shall keep current and accurate books of records and accounts in which full and correct entries in all material respects will be made of all of its business transactions, and will reflect in its financial statements adequate accruals and appropriations to reserves, all in accordance with GAAP. Borrower shall not change its Fiscal Year end date without prior written notice to Lender.

 

(c)  Existence; Rights; Conduct of Business. Borrower shall do (or cause to be done) all things reasonably necessary to preserve and keep in full force and effect its legal existence and good standing and Borrower’s rights, licenses , permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business, and will continue to engage in the same business as presently conducted or such other businesses that are reasonably related thereto .

 

 

5.04  Notices of Material Events. Borrower shall furnish to Lender prompt written notice of the following:

 

(a)  the occurrence of any Default Condition or Event of Default ;

 

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

 

(c)  any change in the nature or extent of Hazardous Substances maintained on or with respect to the Mortgaged Property or any other property of Borrower or the occurrence of any event or any other development by which Borrower (i) fails to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law , (ii) becomes subject to any Environmental Liability , (iii) receives notice of any claim with respect to any Environmental Liability , or (iv) becomes aware of any basis for any Environmental Liability and in each of the preceding clauses, which individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect ;

 

(d)  the occurrence of any ERISA Event that alone, or together with any other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect ; and

 

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

 

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

 

5.05  Litigation. Borrower shall give prompt notice to Lender of any litigation claiming in excess of $100,000.00 from Borrower or which, if adversely determined, could reasonably be expected to cause a Material Adverse Effect.

 

5.06  Taxes. Borrower shall pay all taxes when due (other than taxes levied upon Bank based upon or measured by Lender’s income or revenues), if any, in connection with the Loan, the Loan Documents and/or the execution, delivery or recording of any mortgage, deed of trust, security deed, security agreement, financing statements or other Loan Documents. The Obligations of Borrower under this Section shall survive the payment of Borrower’s Obligations under this Agreement and the termination of this Agreement.

 

5.07  Compliance with Laws, etc . Borrower shall: (i) comply with all laws, rules, regulations and requirements of any Governmental Authority applicable to its business and properties, including without limitation, all Environmental Laws, ERISA, and the Occupational Safety and Health Act of 1970, as amended (“ OSHA ”), except where the failure to do so, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; (ii) at all times maintain the Real Estate Collateral in compliance with all applicable Environmental Laws and free of any Hazardous Substances except in compliance with all applicable Environmental Laws; (iii) pay, perform or otherwise satisfy any fine, charge, penalty, fee, damage, order, judgment, decree or imposition related thereto which, if unpaid, would constitute a lien or encumbrance on any Collateral, other than a Permitted Encumbrance, unless (a) the validity thereof shall be contested diligently and in good faith by appropriate proceedings and with counsel reasonably satisfactory to Lender and (b) so long as Borrower shall at all times have deposited with Lender, or posted a bond satisfactory to Lender in, a sum equal to the amount necessary (in the reasonable discretion of Lender) to comply with such order or directive (including, but not limited to, the amount of any fine, penalty, interest or cost that may become due thereon by reason of or during such contest); provided, however , that Lender shall be subrogated to the rights of the payee of such amount upon payment in full with respect to such fine, charge, or any portion thereof, (iv) to take all appropriate response actions, including any removal or remedial actions, in the event of a release, emission, discharge, or disposal of any Hazardous Substances in, on, under or from the Real Estate Collateral in order for such property to be or remain in compliance with all Environmental Laws, (v) upon request of Lender, to permit Lender, including its officers, agents, employees, contractors and representatives, to enter and inspect the Real Estate Collateral for purposes of conducting an environmental assessment and (vi) upon the request of Lender, and at Borrower’s expense, to cause to be prepared for the Real Estate Collateral such site assessment reports, including, without limitation, engineering studies, historical reviews and testing, as may be reasonably requested from time to time by Lender.

 

 

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

 

5.09  Visitation, Inspection, etc .   Borrower will permit any of Lender’s officers or other representatives to visit and inspect any location(s) of Borrower or where any Collateral is kept during regular business hours to examine and audit all of such Person’s books of account, records, reports and other papers, to make copies and extracts therefrom and to discuss its affairs, finances and accounts with its officers, employees and independent certified public accountants and attorneys. Borrower shall pay to Lender all reasonable fees, costs and expenses actually incurred by Lender in connection with such inspections .

 

5.10  Collateral Reporting. Borrower agrees to furnish to Lender such information as Lender reasonably requires in connection with monitoring the Collateral, at the times and in the manner reasonably determined by Lender.

 

5.11  Maintenance of Properties. Borrower shall keep and maintain all property material to the conduct of its business, including without limitation the Real Estate Collateral, in good working order and condition, ordinary wear and tear excepted.

 

5.12  Use of Proceeds. Borrower shall use the proceeds of the Loan for the purposes stated herein. No part of the proceeds of the Loan will be used, whether directly or indirectly, for any purpose that would violate any rule or regulation of the Board of Governors of the Federal Reserve System, including without limitation Regulations T, U or X.

 

5.13  Operating Accounts. Borrower will establish and thereafter maintain with Lender until such time as the Obligations have been indefeasibly paid in full in good collected funds its primary depository relationship including all of its operating deposit accounts and all collection accounts.

 

5.14  Leased Premises. In the event that any Collateral or books and records related thereto is or becomes located on any of the properties leased by Borrower, Borrower shall promptly upon request by Lender obtain from the owner and landlord of such leased properties a landlord’s lien waiver and collateral access agreement in form and substance reasonably acceptable to Bank.

 

 

5.15  Further Assurances. Borrower shall execute and/or deliver any and all further documents, financing statements, agreements and instruments, and take all further action (including filing Uniform Commercial Code and other financing statements, mortgages and deeds of trust and preparing all documentation relating to filings under the Federal Assignment of Claims Act) that may be required under applicable law, or that Lender may reasonably request, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity and first priority of the security interests created or intended to be created by the Security Documents. Such security interests and Liens will be created under the Security Documents and other security agreements, mortgages, deeds of trust and other instruments and documents in form and substance reasonably satisfactory to Lender, and Borrower shall deliver or cause to be delivered to Lender all such instruments and documents (including legal opinions, title insurance policies, ownership and encumbrances reports and lien searches) as Lender shall reasonably request to evidence compliance with this Section.

 

ARTICLE SIX

NEGTIVE COVENANTS

Borrower covenants and agrees until such time as the Obligations have been indefeasibly paid in full in cash and any obligation of Bank to fund any portion of the Credit Facility has terminated or expired:

 

6.01  Indebtedness . Borrower will not create, incur, assume or suffer to exist any Indebtedness secured by, or otherwise with respect to the financing of, the Collateral, including without limitation the Real Estate Collateral.

 

6.02  Liens. Borrower shall not create, incur, assume or suffer to exist any Lien on any of the Collateral, including without limitation the Real Estate Collateral, except:

 

(a) Liens in favor of Lender securing the Obligations ;

 

(b) Permitted Encumbrances ; and

 

(c) extensions or renewals of any Lien referred to in paragraph (b) of this Section 6.02 ; provided, that the principal amount of the Indebtedness secured thereby is not increased and that any such extension, renewal or replacement is limited to the assets originally encumbered thereby.

 

6.03   Fundamental Changes. Borrower shall not merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, lease, transfer or otherwise dispose of (in a single transaction or a series of transactions) all or substantially all of its assets (in each case, whether now owned or hereafter acquired).

 

6.04  Transactions with Affiliates. Borrower shall not sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property, assets or services from, or otherwise engage in any other transactions with, any Affiliate, except in the ordinary course of business at prices and on terms and conditions not less favorable to Borrower than could be obtained on an arm’s-length basis from unrelated third parties.

 

6.05  Amendment to Material Documents. Borrower shall not amend, modify or waive any of its rights in a manner materially adverse to the Lender, or which could otherwise be reasonably expected to have a Material Adverse Effect under its Organizational Documents.

 

6.06  Accounting Changes. Borrower shall not make any significant change in accounting treatment or reporting practices, except as required or permitted by GAAP, or change the Fiscal Year of Borrower.

 

 

ARTICLE SEVEN

FINANCIAL COVENANTS

Borrower covenants and agrees until such time as the Obligations have been indefeasibly paid in full in cash:

 

(a)   Minimum Liquidity. Borrower shall at all times maintain Unencumbered Liquid Assets of not less than $750,000.00; and

 

(b)   Debt Service Coverage Ratio . In the event that the maturity of the Loan shall be extended to the Extended Maturity Date as provided in Section 2.04 hereof, then from and after the Initial Maturity Date , Borrower shall maintain a Debt Service Coverage Ratio of not less than 1.20 to 1.00 tested annually as of the end of each of Borrower ’s Fiscal Years based on the annual financial statements required to be delivered by Borrower to Lender pursuant to the provisions of Section 5.02(a) hereof.

 

ARTICLE EIGHT

SECURITY

8.01  Collateral . The Loan shall be and shall remain at all times secured by the Mortgage, the Security Agreement and, subject to the provisions of Section 8.02 below, the CD Pledge Agreement.

 

8.02  Reduction of CD Collateral . Provided no Event of Default or Default Condition then exists, Lender agrees with Borrower that annually as of each anniversary date of this Agreement commencing on March 20, 2015, Lender shall release the sum of $59,866.67 per year from the CD Collateral.

 

ARTICLE NINE

DEFAULTS

9.01  Events of Default . Any one or more of the following shall constitute an “ Event of Default ” hereunder:

 

(a) the failure by Borrower to pay within ten (10) days of when due any payment of principal and/or interest on or with respect to (A) the Loan under the Note, (B) any other Obligation, or (C) any other Loan Document, whether a regularly scheduled payment, at maturity or by acceleration; or

 

(b) nonpayment by Borrower of any Interest Rate Protection Agreement when due or the breach by Borrower of any term, provision or condition contained in any Interest Rate Protection Agreement; or

 

(c) any representation or warranty made or deemed made by or on behalf of Borrower in or in connection with this Agreement or any other Loan Document (including the Schedules attached thereto) and any amendments or modifications hereof or waivers hereunder, or in any certificate, report, financial statement or other document submitted to Lender by Borrower, or any representative thereof pursuant to or in connection with this Agreement or any other Loan Document shall prove to be materially incorrect when made or deemed made or submitted; or

 

(d) the breach of any (i) affirmative covenant as provided in Article Five, (ii) negative covenant as provided in Article Six hereof or (iii) any financial covenant as provided in Article Seven hereof; or

 

 

(e) a default or breach which is not otherwise the subject of any other provision of this Section 9.01 shall occur in the performance of any of the covenants or agreements of Borrower contained in this Agreement, the Note, the Security Documents or any other Loan Document and such default is not capable of being cured, or if capable of being cured shall continue uncured to the reasonable satisfaction of Bank for a period of forty-five (45) days after written notice thereof from Bank to Borrower, or such other lesser or greater period of time, if any, with or without notice as specifically set forth in the applicable document or instrument; provided, however, in the event that such default or breach is capable of being cured but not within forty-five (45) days, or such other greater or lesser curative period with respect to the particular default or breach, Borrower shall have such additional time, not to exceed an additional fifteen (15) days within which to cure such default or breach within the original curative period therefor and thereafter diligently prosecutes the same to completion; or

 

(f)   Borrower (whether as primary obligor or as guarantor or other surety) shall default on any Indebtedness of Borrower to Lender other than the Obligations; or

 

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

 

(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other similar relief in respect of Borrower or its debts, or any substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or (ii) the appointment of a custodian, trustee, receiver, liquidator or other similar official for Borrower, or for a substantial part of its assets, and in any such case, such proceeding or petition shall remain undismissed for a period of sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered; or

 

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

 

(j) an ERISA Event shall have occurred that, in the opinion of Lender, when taken together with other ERISA Events that have occurred, could reasonably be expected to result in liability to Borrower in an aggregate amount exceeding $100,000.00; or

 

(k) any judgment, garnishment, seizure, tax lien, levy or order for the payment of money, which Lender deems to be of a material nature, shall be rendered against Borrower or any assets of Borrower and the same not be satisfied or bonded to the reasonable satisfaction of Lender within forty-five (45) days from the entry thereof; or

 

(l) any non-monetary judgment or order shall be rendered against Borrower that could reasonably be expected to have a Material Adverse Effect; or

 

(m) any security interest or Lien purported to be created by any Security Document shall cease to be, or shall be asserted by Borrower not to be, a valid, perfected, first priority (except as otherwise expressly provided in this Agreement or such Security Document) security interest in the securities, assets or properties covered thereby; or

 

 

(n)   Borrower shall be prohibited or otherwise restrained from conducting the business theretofore conducted by it in any manner that has or could reasonably be expected to have or result in a Material Adverse Effect by virtue of any determination, ruling, decision, decree, ordinance, or order of any court of competent jurisdiction, Governmental Authority, or municipality; or

 

(o) there shall be any evidence received by Lender that reasonably leads it to believe that Borrower may have directly or indirectly been engaged in any type of criminal activity which would be reasonably likely to result in the forfeiture of a material portion of its assets or properties to any Governmental Authority or which would otherwise result in a Material Adverse Effect.

 

9.02  Rights Upon Event of Default . Upon the occurrence of an Event of Default and in every such event (other than an event with respect to Borrower described in subparagraph (g) or (h) of Section 9.01 ) and at any time thereafter during the continuance of such event, Lender may take, without limitation, any or all of the following actions, at the same or different times: (i) declare the principal of and any accrued interest on the Loan, and all other Obligations, to be, whereupon the same shall become, due and payable immediately in full, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Borrower, (ii) exercise all rights and remedies contained in the Security Documents, including foreclosure of the Mortgage against the Real Estate Collateral, exercise of Lender’s rights and remedies under the Assignment of Rents and exercise of all rights and remedies of a secured party under the UCC and the Security Agreement, (iii) exercise all rights and remedies contained in any other Loan Document, and (iv) exercise any other remedies available at law or in equity; and that, if an Event of Default specified in either subparagraph (g) or (h) of Section 9.01 shall occur, the principal of the Loan then outstanding, together with accrued interest thereon, and all fees, and all other Obligations shall automatically immediately become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Borrower.

 

9.03 Application of Proceeds from Collateral. All proceeds from each sale of, or other realization upon, all or any part of the Collateral by Lender after an Event of Default arises shall be applied as follows:

 

(a) first , to the reimbursable expenses of Lender incurred in connection with such sale or other realization upon the Collateral, until the same shall have been paid in full;

 

(b) second , to the fees and other reimbursable expenses of Lender then due and payable pursuant to any of the Loan Documents, including without limitation attorneys’ fees and expenses and other costs of collection or enforcement, until the same shall have been paid in full ;

 

(c) third , to late charges then due and payable under the terms of the Note , until the same shall have been paid in full ;

 

(d) fourth , to interest, including without limitation default interest, then due and payable under the terms of the Note, until the same shall have been paid in full ;

 

(e) fifth , to the outstanding principal amount of the Loan, in such order as Lender shall determine in its sole and absolute discretion ;

 

(f) sixth , to all other Obligations until the same shall have been paid in full to Lender; and

 

(g) seventh , to the extent any proceeds remain, to the Borrower or other parties lawfully entitled.

 

 

 

(b) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All such notices and other communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third Business Day after the date deposited into the mail or if delivered, upon delivery; provided , that notices delivered to Lender shall not be effective until actually received by such Person at its address specified above.

 

(c) Any agreement of the Lender to receive certain notices by telephone or facsimile is solely for the convenience and at the request of Borrower . Lender shall be entitled to rely on the authority of any Person purporting to be a Person authorized by Borrower to give such notice and Lender shall not have any liability to the Borrower or other Person on account of any action taken or not taken by Lender in reliance upon such telephonic or facsimile notice. The obligation of the Borrower to repay the Loan and all other Obligations hereunder shall not be affected in any way or to any extent by any failure of Lender to receive written confirmation of any telephonic or facsimile notice or the receipt by Lender of a confirmation which is at variance with the terms understood by Lender to be contained in any such telephonic or facsimile notice.

 

10.02 Waiver; Amendments. No failure or delay by Lender in exercising any right or power hereunder or any other Loan Document, and no course of dealing between Borrower and Lender, shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exercise of any other right or power hereunder or thereunder. The rights and remedies of Lender hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies provided by law. No amendment or waiver of any provision of this Agreement or the other Loan Documents , nor consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by Borrower and Lender and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given . Without limiting the generality of the foregoing, the making of an advance under the Loan shall not be construed as a waiver of any Default Condition or Event of Default, regardless of whether the Lender may have had notice or knowledge of such Default Condition or Event of Default at the time.

 

 

(a) Borrower shall pay (i) all reasonable, out-of-pocket costs and expenses of Lender , including the reasonable fees, charges and disbursements of counsel for Lender , in connection with the preparation and administration of the Loan Documents and any amendments, modifications or waivers thereof (whether or not the transactions contemplated in this Agreement or any other Loan Document shall be consummated), and (ii) all out-of-pocket costs and expenses (including, without limitation, the reasonable fees, charges and disbursements of outside counsel and the allocated cost of inside counsel) incurred by Lender in connection with the enforcement or protection of its rights in connection with this Agreement , including its rights under this Section, or in connection with the Loan or other Obligations , including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of the Loan or other Obligations .

 

(b) Borrower shall indemnify Lender and any of its affiliates, as well as its shareholders, directors, officers, employees, agents or (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee, and all fees and time charges and disbursements for attorneys who may be employees of any Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any third party or by Borrower arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) the Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Substances on or from, or migrating to or from, any property owned or operated by Borrower, or any actual or alleged Environmental Liability related in any way to Borrower or any Collateral, (iv) any breach of any representation, warranty or covenant contained herein, or (v) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by Borrower, and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

 

(c) Borrower shall pay, and hold Lender harmless from and against, any and all present and future stamp, documentary, indebtedness , and other similar taxes with respect to this Agreement and any other Loan Documents , any collateral described therein, or any payments due thereunder, and shall defend, indemnify and save the Lender harmless from and against any and all liabilities with respect to, or resulting from any delay or omission to pay such taxes .

 

(d) To the extent permitted by applicable law , Borrower shall not assert, and hereby waives, any claim against any Indemnitee , on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to actual or direct damages) arising out of, in connection with or as a result of, this Agreement or any agreement or instrument contemplated hereby, the transactions contemplated therein, any loan or the use of proceeds thereof.

 

(e) All amounts due under this Section shall be payable promptly after written demand therefor.

 

 

10.04 Successors and Assigns.

 

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Lender. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, and Participants as provided in subparagraph (b) below) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b) Lender may at any time, without the prior consent of, or notice to, Borrower , sell and assign or grant participations to any Person (other than a natural person , Borrower or any of its Affiliates ) (each, a “ Participant ”) all or a portion of Lender ’s rights and/or obligations under this Agreement .

 

10.05 Governing Law; Jurisdiction; Venue. This Agreement is made and delivered in the State of Florida and shall be governed by and construed in accordance with the laws thereof without reference to the conflicts of law principles that would cause the application of the laws of another jurisdiction. Borrower hereby irrevocably submits and consents to the exclusive personal jurisdiction and venue of any state or federal court in Florida located in the same judicial district as the office of Lender specified in the first paragraph of this Agreement and agrees that all actions or proceedings arising directly, indirectly or otherwise in connection with, out of, related to or from this Agreement shall be litigated only in one of the foregoing described courts. Borrower, for itself, and its successors and assigns, and for any Person claiming under or through any of them, hereby knowingly and voluntarily waives any and all rights to contest the jurisdiction or venue as set forth above and hereby knowingly and voluntarily waives any and all rights to remove this action to, or to transfer, dismiss, or change venue to, any other court. Borrower further acknowledges and agrees that neither Lender nor any Person acting on behalf of Lender has represented to Borrower that the provisions of this paragraph have been waived or will not be fully enforced by Lender. Notwithstanding the foregoing, Lender may initiate necessary judicial actions in any jurisdiction to recover Collateral securing the Loan or any other Obligation.

 

10.06 WAIVER OF JURY TRIAL. BORROWER KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS BORROWER MAY HAVE TO TRIAL BY JURY IN ANY LEGAL PROCEEDING BASED ON, ARISING OUT OF, OR IN ANY WAY RELATED TO: THIS AGREEMENT; THE OBLIGATIONS; ANY NOTES, LOAN AGREEMENTS, OR ANY OTHER LOAN DOCUMENTS OR AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH ANY OF THE OBLIGATIONS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THIS JURY WAIVER ALSO APPLIES TO ANY CLAIM OR, COUNTERCLAIM, CAUSE OF ACTION OR DEMAND ARISING FROM OR RELATED TO (I) ANY COURSE OF CONDUCT, COURSE OF DEALING, OR RELATIONSHIP OF BORROWER, OR ANY OTHER PERSON WITH LENDER OR ANY EMPLOYEE, OFFICER, DIRECTOR OR ASSIGNEE OF LENDER IN CONNECTION WITH THE OBLIGATIONS WITH LENDER; OR (II) ANY STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PERSON BY OR ON BEHALF OF LENDER TO BORROWER, OR ANY OTHER PERSON IN CONNECTION WITH THE OBLIGATIONS OR LENDER REGARDLESS OF WHETHER SUCH CAUSE OF ACTION ARISES BY CONTRACT, TORT OR OTHERWISE. BORROWER ACKNOWLEDGES THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO THE LENDER IN EXTENDING CREDIT TO BORROWER, THAT THE LENDER WOULD NOT HAVE EXTENDED SUCH CREDIT WITHOUT THIS JURY TRIAL WAIVER, AND THAT BORROWER HAS BEEN REPRESENTED BY AN ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS JURY TRIAL WAIVER AND UNDERSTANDS THE LEGAL EFFECT OF THIS WAIVER. BORROWER FURTHER CERTIFIES THAT NO PERSON HAS REPRESENTED TO IT, EXPRESSLY OR OTHERWISE, THAT LENDER OR ANY OTHER PERSON WOULD NOT, IN THE EVENT OF A LEGAL PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER.

 

 

10.07 Right of Setoff . In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, Lender shall have the right, at any time or from time to time upon the occurrence and during the continuance of an Event of Default , without prior notice to Borrower , any such notice being expressly waived by Borrower to the extent permitted by applicable law , to set off and apply against all deposits (general or special, time or demand, provisional or final) of Borrower at any time held or other obligations at any time owing by Lender to or for the credit or the account of Borrower against any and all Obligations held by Lender , irrespective of whether Lender shall have made demand hereunder and although such Obligations may be unmatured. Lender agree promptly to notify Borrower after any such set-off and any application made by Lender ; provided , that the failure to give such notice shall not affect the validity of such set-off and application.

 

10.08 Counterparts . This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Any party to this Agreement may execute a counterpart copy of this Agreement and deliver the same by telecopier, or by an electronically or digitally scanned copy signed counterpart stored in an electronic or digital format ( e.g ., “.pdf” or “.tft” format) which preserves the graphical or pictorial appearance of the original and delivered by electronic or digital means, such as electronic mail, so that the same may be printed in a tangible format, which shall be deemed an original for all purposes.

 

10.09 Entire Agreement . This Agreement , the Note[s] and the other Loan Documents constitute the entire agreement among the parties hereto and thereto regarding the subject matters hereof and thereof and supersede all prior agreements and understandings, oral or written, regarding such subject matters. No course of dealing, course of performance, usage of trade or evidence of any prior, contemporaneous or subsequent oral agreements or discussions or other extrinsic evidence of any nature shall be used to contradict, vary, supplement or modify any term of this Agreement or the other Loan Documents . There are no oral agreements between the parties.

 

10.10 Survival . All covenants, agreements, representations and warranties made by Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by Lender and shall survive the execution and delivery of this Agreement and the making of any advance of the Loan , regardless of any investigation made by any such other party or on its behalf and notwithstanding that Lender may have had notice or knowledge of any Default Condition or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on the Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as any commitment of Lender to make advances under the Loan has not expired or terminated. The provision entitled “Expenses; Indemnification” above shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loan , the expiration or termination of the Loan or the termination of this Agreement or any provision hereof. All representations and warranties made herein, in the certificates, reports, notices, and other documents delivered pursuant to this Agreement shall survive the execution and delivery of this Agreement and the other Loan Documents , and the making of any advance by Lender under the Loan .

 

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

 

 

10.12 Gender and Number. In this Agreement, whenever the context so requires, the neuter gender includes the feminine and/or masculine, as the case may be and the singular number includes the plural.

 

10.13 Headings. Any captions or headings in this Agreement are for convenience and reference and are not to be considered a part hereof and shall not limit or otherwise affect any of the provisions or terms hereof.

 

10.14 Interpretation. No provision of this Agreement shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such Person having or being deemed to have structured, written or dictated such provision.

 

10.15 Lack of Duress. Borrower represents and warrants to Lender that Borrower is a sophisticated business Person, having had substantial experience in connection with financing and credit arrangements such as contemplated by this Agreement, was duly represented by or had the opportunity to be represented by an attorney in the negotiation of the documentation to evidence and secure the Loan and bargained with Lender at arm's length and without duress of any kind whatsoever relative to all of the terms and conditions pursuant to which Lender agreed to make available the Loan including, but not limited to, the terms and conditions contained in this Section.

 

10.16 Interest Rate Limitation . The parties hereto stipulate and agree that it is their common and overriding intent to contract in strict compliance with the applicable usury laws. Notwithstanding anything herein to the contrary, if at any time the interest rate or rates applicable to the Loan , together with all fees, charges and other amounts which may be treated as interest on such Loan under applicable law (collectively, the “ Charges ”), shall exceed the maximum lawful rate of interest (the “ Maximum Rate ”) which may be contracted for, charged, taken, received or reserved by Lender in accordance with applicable law , the rate of interest payable in respect of Loan , together with all Charges payable in respect thereof, shall be limited to the Maximum Rate . If for any reason the charges paid by Borrower exceed the Maximum Rate, Lender shall credit against the principal balance of the Loan (or, if such indebtedness shall have been paid in full, refund to the payor of such charges ) such portion of said charges as shall be necessary to ensure that the total charges do not exceed the Maximum Rate .

 

10.17 Patriot Act . The Lender hereby notifies Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Patriot Act ”), it is required to obtain, verify and record information that identifies Borrower and any Person acting on Borrower’s behalf , which information includes the name and address of such Person and other information that will allow such Lender to identify such Person in accordance with the Patriot Act . Borrower shall provide such information and take such other actions as are reasonably requested by the Lender in order to assist the Lender in maintaining compliance with the Patriot Act .

 

[Remainder of Page Intentionally Blank]

 

 

IN WITNESS WHEREOF , the parties have executed and delivered this Agreement as of the day and year first above written.

 

 

[Remainder of Page Intentionally Blank]

 

	Borrower:
	BOVIE MEDICAL CORPORATION, a Delaware corporation
	By:
		Robert L. Gershon, Chief Executive Officer

 

Exhibit :

A—Legal Description

 

 

EXHIBIT “A”

 

LEGAL DESCRIPTION

 

Lot 9, in the Southeast 1/4 of Section 4, Township 30 South, Range 16 East, according to the plat of Pinellas Groves, Inc., recorded in Plat Book 1, Page 55, of the Public Records of Pinellas County, Florida, LESS the West 150 feet thereof and also LESS that part lying within 120 feet of survey line of State Road S-688, Section 15120, as described in Clerk's Instrument No. 260901B, Official Records Book 2081, Page 593, Pinellas County Records.

 

 

 

 

SCHEDULE 4.04

SCHEDULE OF PENDING LITIGATION

 

 

 

 

SCHEDULE 4.13

SCHEDULE OF SUBSIDIARIES OF BORROWER

Bovie Holdings, Inc., a Delaware corporation

BVX Holdings LLC, a Delaware limited liability company

Aaron Medical Industries, Inc., a Florida corporation

 

 

 

 

 

 

31

EXHIBIT 10.2

 

Prepared By and

When Recorded Return to:

W. Kent Ihrig, Esq.

101 East Kennedy Boulevard

Suite 2800

Tampa, Florida 33602

Phone: (813) 229-7600

MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT

AND ASSIGNMENT OF RENTS

Between:

BOVIE MEDICAL CORPORATION ,

a Delaware corporation

as " Mortgagor "

and

THE BANK OF TAMPA ,

 a Florida banking corporation

as " Mortgagee "

Loan Amount: $3,592,000.00

Date: March 20, 2014

 

 

MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT AND ASSIGNMENT OF RENTS

THIS MORTGAGE , SECURITY AGREEMENT , FINANCING STATEMENT AND ASSIGNMENT OF RENTS (as the same be amended, modified, restated, supplemented, increased or spread at any time or from time to time, the " Mortgage ") is executed as of the 20 th day of March , 2014, by Bovie Medical Corporation , a Delaware corporation, having an address of 5115 Ulmerton Road , Clearwater, Florida 33760 (whether one or more, the " Mortgagor " and, if more than one, the expression " Mortgagor " shall mean all mortgagors and each of them jointly and severally), to The Bank of Tampa , a Florida banking corporation, having an address of Post Office Box One, Tampa , Florida 33601 (together with any holder or holders of all or any part of the " Secured Indebtedness " [as defined below] , the " Mortgagee ").

ARTICLE ONE

DEFINITIONS

The following terms shall have the following meanings, unless the context clearly requires otherwise:

" Access Laws " shall mean the Americans with Disabilities Act of 1990 (42 U.S.C. §§ 12101, et seq. ), as amended from time to time, the Fair Housing Amendments Act of 1988 (42 U.S.C. §§ 3601, et seq. ), as amended from time to time, and all other federal, state or local laws, statutes, ordinances, rules, regulations, and orders relative to handicapped access.

" Affiliate " shall mean with respect to any Person, (i) any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, (1) such Person or (2) any general partner of such Person; (ii) any other Person 5% or more of the equity interest of which is held beneficially or of record by (1) such Person or (2) any general partner of such Person, and (iii) any general or limited partner or member of (1) such Person or (2) any general partner of such Person. "Control" means the possession, directly or indirectly, of the power to cause the direction of the management of a Person, whether through voting securities, by contract, family relationship or otherwise.

“ Blocked Persons List ” shall mean the list of Specially Designated Nationals and Blocked Persons generated and maintained by OFAC, as it exists from time to time or at any time, together with any and all amendments or replacements thereto or thereof.

" Code " shall mean the Florida Uniform Commercial Code , as amended from time to time, Chapters 671 through 680, Florida Statutes .

“ Commodity Exchange Act ” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq .), as amended from time to time, and any successor statute.

" Environmental Law " shall mean any federal, state or local law, statute, ordinance, or regulation pertaining to health, industrial hygiene, or the environmental conditions on, under or about the Mortgaged Property , including but not limited to, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§ 9601 et seq .) (" CERCLA "), as amended from time to time, including without limitation, the Superfund Amendments and Reauthorization Act (" SARA ") , and the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Sections 6901, et seq .) (" RCRA "), as amended from time to time.

" Event of Default " shall have the meaning ascribed to said term in Section 5.01 hereof.

“ Excluded Swap Obligation ” shall mean, with respect to any guarantor of a Swap Obligation, and including the grant of a security interest to secure the guaranty of such Swap Obligation, any Swap Obligation if, and to the extent that, such Swap Obligation is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guaranty or grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Swap Obligation or security interest is or becomes illegal.

 

“ Executive Order 13224 ” shall mean Executive Order No. 13224, 66 Fed. Reg. 49709 (Sept. 25, 2001) , as well as any supplement, amendment or replacement thereto or thereof.

“ Extended Maturity Date ” shall mean March 20 , 2022.

" Hazardous Substance " shall mean one or more of the following substances: (i) those substances included within the definitions of "hazardous substances," "hazardous materials," "toxic substances," or "solid waste" in CERCLA, SARA, RCRA, the Toxic Substances Control Act, Federal Insecticide, Fungicide, and Rodenticide Act, and the Hazardous Materials Transportation Act (49 U.S.C. Sections 1801 et seq .), and in the regulations promulgated pursuant to said laws; (ii) those substances listed in the United States Department of Transportation Table (49 CFR 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency) as hazardous substances (40 CFR Part 302 and amendments thereto); (iii) such other substances, materials and wastes which are or become regulated under applicable local, state or federal law, or the United States government, or which are classified as hazardous or toxic under federal, state, or local laws or regulations; and (iv) any material, waste or substance which is: (a) asbestos; (b) polychlorinated biphenyls; (c) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Sections 1251 et seq . (33 U.S.C. §1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. §1317); (d) petroleum or petroleum distillate; (e) explosives; (f) radioactive materials; or (g) lead based paint.

" Improvements " shall mean all buildings, structures and improvements now or in the future on the Land .

“ Initial Maturity Date ” shall mean March 20 , 2017.

" Interest Rate Protection Agreement " shall mean any agreement between Mortgagor and Mortgagee or any Affiliate of Mortgagee now existing or hereafter entered into, which provides for an interest rate, currency, equity, credit or commodity swap, cap, floor or collar, spot or forward foreign exchange transaction, cross currency rate swap, currency option, any combination of, or option with respect to, any of the foregoing or any similar transactions, for the purpose of hedging Mortgagor's exposure to fluctuations in interest rates, exchange rates, currency, stock, portfolio or loan valuations or commodity prices (including any such or similar agreement or transaction entered into by Mortgagee or any Affiliate thereof in connection with any other agreement or transaction between Mortgagor and Mortgagee or any Affiliate thereof ).

" Land " shall mean the tract of real property described upon Exhibit "A" attached hereto.

" Leases " shall mean all present and future leases and agreements, written or oral, for the use or occupancy of any portion of the Mortgaged Property , and any renewals, extensions or substitutions thereof and any and all subleases thereunder.

“ Loan Agreement ” shall mean that certain Loan Agreement dated on or about the date hereof between Mortgagee and Mortgagor pursuant to which Mortgagee has made to Mortgagor and Mortgagor has borrowed from Mortgagee the principal sum of $3,592,000.00, as evidenced by the Note , and as the same may be amended, modified, restated or supplemented at any time or from time to time.

" Loan Documents " shall mean the Loan Agreement , the Note and this Mortgage , together with all documents, agreements, certificates, affidavits, loan agreements, security agreements, mortgages, collateral pledge agreements, assignments and contracts representing, evidencing or securing any or all of the Secured Indebtedness or executed in connection therewith, now or at any time, as the same may be amended, modified, restated or supplemented at any time or from time to time.

 

" Mortgaged Property " shall mean: (i) t he Land and (a) the Improvements; (b) all estates, easements, interests, licenses, rights and titles of Mortgagor in and to or benefiting the Land; (c) all estates, easements, interests, licenses, rights and titles, if any, of Mortgagor in and to the real estate lying in all present or future roads and sidewalks, in front of, or adjoining, the Land, and in and to any strips or gores of real estate adjoining the Land; (d) all passages, waters, water rights, water courses, riparian rights, other rights appurtenant to the Land, as well as any after-acquired title, franchise or license, and the reversions and remainders thereof; and (e) all estates, easements, licenses, interests, rights and titles appurtenant or incident to the foregoing; (ii) the Personal Property; and (iii) all other estates, easements, licenses, interests, rights and titles which Mortgagor now has, or at any time hereafter acquires, in and to the Land, the Improvements, the Personal Property, and all property which is used or useful in connection therewith, including without limitation (a) all proceeds payable in lieu of or as compensation for loss or damage to any of the foregoing; (b) all awards for a taking or for degradation of value in any eminent domain proceeding involving any of the foregoing; and (c) the proceeds of any and all insurance (including without limitation, title insurance) covering the Land, the Improvements, the Personal Property, and any of the foregoing.

" Note " shall mean Mortgagor 's Promissory Note, dated the same date as this Mortgage in the principal amount of $3,592,000.00, payable to the order of Mortgagee , and providing for maturity on the Initial Maturity Date unless the maturity is extended until the Extended Maturity Date , upon satisfaction of all of the terms and conditions for such extension as provided in the Loan Agreement, in which case it shall mature on the Extended Maturity Date, as the same may be amended, modified, restated, supplemented, renewed, decreased, increased or replaced at any time or from time to time.

" Obligations " shall mean (i) any and all of the indebtedness, liabilities, covenants, promises, agreements, terms, conditions, and other obligations of every nature whatsoever, whether joint or several, direct or indirect, absolute or contingent, liquidated or unliquidated, of Mortgagor to Mortgagee , evidenced by, secured by, under and as set forth in the Note , this Mortgage and the other Loan Documents ; (ii) any and all other indebtedness, liabilities and obligations of every nature whatsoever (whether or not otherwise secured or to be secured) of Mortgagor (whether as maker, endorser, surety, guarantor or otherwise) to Mortgagee or any of Mortgagee 's Affiliates , whether now existing or hereafter created or arising or now owned or howsoever hereafter acquired by Mortgagee or any of Mortgagee 's Affiliates , whether such indebtedness, liabilities and obligations are or will be joint or several, direct or indirect, absolute or contingent, liquidated or unliquidated, matured or unmatured; (iii) any and all future advances under this Mortgage ; (iv) any and all of the indebtedness, liabilities, covenants, promises, agreements, terms, conditions, and other obligations of any nature whatsoever, whether joint or several, direct or indirect, absolute or contingent, liquidated or unliquidated, of Mortgagor to Mortgagee under any Interest Rate Protection Agreements , including, without limitation, any and all unpaid accrued payments due Mortgagee , under any Interest Rate Protection Agreement , and/or the present value of future benefits lost by Mortgagee 's nonreceipt of future payments in excess of corresponding future liabilities under any Interest Rate Protection Agreement ; and (v) all expenses and costs, including without limitation attorneys' fees , incurred by Mortgagee in the preparation, execution, or enforcement of any document relating to any of the foregoing; provided, however, in any and all events, the term “ Obligations ” shall specifically exclude any and all Excluded Swap Obligations , which Excluded Swap Obligations shall not be deemed to be secured hereby.

“ OFAC ” shall mean the Office of Foreign Assets Control of the United States Treasury Department or any successor.

" Organizational Documents " shall mean, as to any Person which is not a natural person , the documents and/or instruments creating and/or governing the formation or operation of such Person , including without limitation such documents required to be filed with any governmental authority having jurisdiction over the creation or formation of such Person and including without limitation, articles of incorporation, bylaws, shareholder agreements, voting trust agreements, articles of organization, operating agreements, management agreements, certificates of limited partnership, partnership agreements, statements of qualification, trust agreements or indentures or other agreements or instruments as appropriate for such Person .

 

“ Patriot Act ” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended at any time or from time to time.

" Permitted Exceptions " shall mean the exceptions to title described upon Exhibit "B" attached hereto.

" Person " shall mean any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other form of entity.

" Personal Property " shall mean the following, now owned or hereafter acquired by Mortgagor, and all accessories, attachments, additions, replacements, substitutes, products, proceeds, and accessions thereto or thereof: (i) all property, personal or other­wise, at any time attached to or incorporated into or used in or about the Land and/or Improvements, including, without limitation, all fixtures, building materials, inventory, furniture, appliances, furnishings, goods, equipment, and machinery and all other tangible personal property affixed, attached or related to such property or used in connection therewith, other than equipment otherwise financed by Mortgagor with lenders other Mortgagee in the ordinary course of Mortgagor’s business; (ii) all accounts, deposit accounts, inventory, instruments, chattel paper, documents, consumer goods, insurance proceeds, surveys, plans and specifications, drawings, permits, licenses, warranties, guaranties, deposits, prepaid expenses, contract rights, and general intangibles now, or hereafter related to, any of the Land and/or Improvements; (iii) all Rents and Leases; (iv) all other income or revenues of any kind now or hereafter derived from the operation of the Land and/or the Improvements, including without limitation overnight or other room rental charges, service fees and charges, and other fees for the use of all or any portion of the Mortgaged Property or any facilities thereon, or services provided thereon or therein, (v) all general intangibles relating to the development or use of the Land and/or Improvements, including but not limited to all governmental permits relating to construction on the Land and/or, all names under or by which the Land and/or Improvements may at any time be operated or known, and all rights to carry on the business under any such names or any variant thereof, and all trademarks and goodwill in any way relating to the Land and/or Improvements; (vi) all water rights relating to the Land and/or Improvements that is owned by Mortgagor in common with others, and all documents of membership in any owners' or members' association or similar group having responsibility for managing or operating any part of the Land and/or Improvements; and (vii) all proceeds and claims arising on account of any damage to or taking of the Land and/or Improvements or any part thereof, and all causes of action and recovery for any loss or diminution in the value of the Land and/or Improvements and all rights of the Mortgagor under any policy or policies of insurance covering the Land and/or Improvements or any Rents relating to the Land and/or Improvements and all proceeds, loss payments and premium refunds which may become payable with respect to such insurance policies.

“ Prohibited Person ” shall mean a Person who at any time: (i) is listed in the Annex to Executive Order 13224, (ii) listed on the Blocked Persons List; (iii) is a Person with whom Mortgagee is prohibited from doing business or entering into any transaction with pursuant to any law, regulation or order relating to terrorism or money laundering, including without limitation Executive Order 13224; or (iv) is an Affiliate of, or is controlled by, any Person described in clauses (i), (ii) and (iii) preceding.

" Rents " shall mean the rents, income, receipts, revenues, issues and profits now due or which may become due or to which Mortgagor may now or hereafter become entitled or may demand or claim, arising or issuing from or out of the Leases or from or out of the Mortgaged Property , or any part thereof, including, without limitation, minimum rents, additional rents, percentage rents, common area maintenance charges, parking charges (including monthly rental for parking spaces), tax and insurance premium contributions, and liquidated damages following default, premiums payable by any Lessee upon the exercise of any cancellation privilege provided for in any of the Leases , and all proceeds payable under any policy of insurance covering the loss of rent resulting from untenantability caused by destruction or damage of the Mortgaged Property , together with any and all rights and claims of any kind which Mortgagor may have against any Lessee or against any other occupants of the Mortgaged Property .

 

" Secured Indebtedness " shall mean: (i) all principal, interest, late charges, fees, premiums, expenses, obligations and liabilities of Mortgagor to Mortgagee arising pursuant to or represented by the Note;(ii) all indebtednesses, liabilities, and obligations arising under this Mortgage or under any other Loan Documents; (iii) all Obligations; and (iv) any and all renewals, increases, extensions, modifications, rearrangements, or restatements of the Note or all or any part of the loans, advances, future advances, indebtednesses, liabilities, and obligations described or referred to herein together with all costs, expenses, and attorneys' fees incurred in connection with the enforcement or collection thereof.

“ Swap Obligation ” shall mean any obligation under or in connection with an Interest Rate Protection Agreement that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act, as amended from time to time.

ARTICLE TWO

GRANT; WARRANTY OF TITLE

 

For good and valuable consideration, including the loan evidenced by the Note, and in order to secure the Secured Indebtedness, Mortgagor does hereby GRANT, BARGAIN, SELL, TRANSFER, ASSIGN, MORTGAGE, AND CONVEY unto Mortgagee, and Mortgagee's successors and assigns, the Mortgaged Property, subject to the Permitted Exceptions, TO HAVE AND TO HOLD the Mortgaged Property , together with all and singular the rights, hereditaments, and appurtenances thereto, for the use and benefit of Mortgagee , forever. CONDITIONED , however, that if Mortgagor shall promptly pay or cause to be paid to Mortgagee the Secured Indebtedness , then these presents shall cease and be void, otherwise these presents shall remain in full force and effect. Mortgagor for Mortgagor and Mortgagor's successors, hereby agrees to warrant and forever defend, all and singular, good and marketable unencumbered fee simple title to the Mortgaged Property unto Mortgagee, and Mortgagee's successors or assigns, forever, against every person whomsoever lawfully claiming, or to claim, the same or any part thereof, subject, however , to the Permitted Exceptions. The foregoing warranty of title shall survive the foreclosure of this Mortgage and shall inure to the benefit of and be enforceable by any person who may acquire title to the Mortgaged Property pursuant to such foreclosure.

 

ARTICLE THREE

REPRESENTATIONS AND WARRANTIES AND COVENANTS

3.01 Representations and Warranties . Mortgagor represents and warrants to Mortgagee as follows:

(a) Authority , etc . Mortgagor is a corporation duly formed, validly existing and in good standing under the laws of its state of organization and its Organizational Documents and is duly qualified to transact business within the State of Florida; Mortgagor has all requisite power and authority to own, lease and operate its properties, including without limitation the Mortgaged Property; Mortgagor has full and lawful authority and power to execute, acknowledge, deliver, and perform this Mortgage and the other Loan Documents and the Loan Documents constitute the legal, valid, and binding obligations of Mortgagor and any other party thereto, enforceable against Mortgagor and such other parties in accordance with their respective terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting creditors' rights generally; and neither the execution and delivery of the Loan Documents, nor performance of or compliance with the terms thereof, will contravene or conflict with any law, statute or regulation to which Mortgagor is subject or any judgment, license, order or permit applicable to Mortgagor or any Organizational Document, indenture, mortgage, agreement or other instrument to which Mortgagor is a party or by which Mortgagor or the Mortgaged Property may be bound or subject.

 

(b) Place of Business . Mortgagor’s principal place of business, chief executive office, location of its account records, mailing address and address for notices hereunder is set forth in the preamble hereof.

 

(c) Title . Mortgagor is the owner of good and marketable title to the Mortgaged Property, subject only to the Permitted Exceptions; Mortgagor has not previously sold, assigned, transferred or granted a lien or encumbrance in, and no liens or encumbrances exist in, the Mortgaged Property, or any part thereof.

 

(d) Access . The Mortgaged Property has full and free access to and from public streets and utilities' services and connections as are necessary for the occupancy and operation thereof.

 

(e) Conflicts . Neither the execution and delivery of the Loan Documents, nor consummation of any of the transactions therein contemplated, nor compliance with the terms and provisions thereof, will contravene or conflict with any provision of law, statute or regulation to which Mortgagor is subject or any judgment, license, order or permit applicable to Mortgagor or any indenture, mortgage, deed of trust, agreement or other instrument to which Mortgagor is a party or by which Mortgagor or the Mortgaged Property may be bound, or to which Mortgagor or the Mortgaged Property may be subject.

 

(f) Information Provided . To the best of Mortgagor’s knowledge, all reports, statements, financial statements, cost estimates and other data, furnished by or on behalf of Mortgagor including, without limitation, any maps of survey, plans and specifications, and commitments for title insurance are true and correct in all material respects.

 

(g) Defaults . No event has occurred and is continuing which constitutes an Event of Default or would, with the lapse of time or giving of notice or both, constitute an Event of Default.

 

(h) Taxes . All taxes, assessments and other charges levied against the Mortgaged Property and currently payable have been paid in full.

 

(i) Leases . Mortgagor has duly and punctually performed all and singular its obligations under any existing Leases up to the date hereof and, to Mortgagor’s knowledge, no default currently exists under any such existing Lease.

 

(j) Commercial Loan . The Secured Indebtedness constitutes a contract under which credit is extended for business, commercial, investment, or other similar purpose, and is not for personal, family, household or agricultural use.

 

(k) No Casualty . The Mortgaged Property is not now damaged or injured as a result of any casualty.

 

(l) Priority of Security Interest . The security interests created pursuant to the terms of the Loan Documents (to the extent that they create security interests) are valid and subsisting security interests constituting first priority security interests in and to the collateral identified therein, subject to the Permitted Exceptions, all as more fully provided in the Loan Documents.

 

(m) Zoning . The Mortgaged Property is shown on the applicable zoning map as being zoned for a classification that permits the use of theImprovements and, except as expressly disclosed to Mortgagee in writing as of the date hereof, there are no conditional governmental permits relating to the use of the Mortgaged Property or any such Improvements.

 

(n) Permits . Except as expressly disclosed to Mortgagee in writing as of the date hereof, Mortgagor has obtained, and paid the fees for, all governmental permits and licenses necessary for the use and operation of the Mortgaged Property.

 

(o) Compliance with Governmental Regulations . To the Mortgagor’s knowledge, there are no material violations of governmental laws or regulations that pertain to the Mortgaged Property, and the existing Improvements do not violate any applicable building, fire or zoning codes or regulations of any governmental agencies having jurisdiction thereof.

 

(p) No Adverse Change . There has been no material adverse change in the financial condition of the Mortgagor since the date of application for the loan evidenced by the Note, nor has any portion of the Mortgaged Property been taken by eminent domain or condemned.

 

(q) No Possessory Interests . Except for tenants under written Leases approved by Mortgagee, no Person has any possessory interest in the Mortgaged Property or right to occupy any portion thereof.

 

(r) Legal Proceedings . There are no claims, suits or other legal proceedings, pending or, to the actual knowledge of Mortgagor, on the date hereof, threatened against Mortgagor before any court or tribunal, which, if adversely determined, could (1) result in a judgment in money damages, or a fine or penalty against Mortgagor or the Mortgaged Property, (2) impair Mortgagor's ability to perform its obligations under the Loan Documents, (3) impair Mortgagor's ability to use or occupy any Improvements, or (4) reduce Mortgagor's income.

 

(s) Utilities . All utilities required by law or required for use and operation of the Mortgaged Property are available in sufficient capacity to meet the needs of the existing Improvements, and all lines for such utilities run either from publicly dedicated streets or, in the event they run through or over private property, there exist properly recorded easements which run with the land within which same run.

 

(t) Access Laws . To Mortgagor’s knowledge, the Improvements arein compliance with all Access Laws applicable to the Mortgaged Property.

 

(u) Bankruptcy . There are no actions, whether voluntary or involuntary, pending or threatened under the United States Bankruptcy Code in which Mortgagor is a "debtor".

 

(v) Patriot Act . Mortgagor is not a Prohibited Person and Mortgagoris in full compliance with all applicable, orders, rules, or regulations promulgated under or in connection with Executive Order 13224 and/or the Patriot Act.

 

(w) Tax Liability. Mortgagor has filed all required federal, state and local tax returns and has paid all taxes due (including interest and penalties, but subject to lawful extensions disclosed to Mortgagee in writing) other than taxes being promptly and actively contested in good faith and by appropriate proceedings. Mortgagor is maintaining adequate reserves for tax liabilities (including contested liabilities) in accordance with generally accepted accounting principles or in accordance with such other principles or methods as are reasonably acceptable to Mortgagee.

 

3.02 Covenants . So long as this Mortgage shall remain in effect, Mortgagor covenants and agrees with Mortgagee as follows:

 

(a) Payment of Obligations . Mortgagor shall pay as and when due all amounts owing on the Obligations, including without limitation the Secured Indebtedness.

 

(b) Other Loan Documents . Mortgagor shall perform all covenants, agreements and undertakings required of Mortgagor under the other Loan Documents, as and when required thereunder.

 

(c) Taxes . Mortgagor shall pay all lawful taxes and assessments as to any of the Mortgaged Property, and shall furnish to Mortgagee evidence satisfactory to Mortgagee of the timely payment of such taxes and assessments; provided, however , Mortgagor shall not be required to pay any such tax or assessment if and so long as the amount, applicability or validity thereof is being contested in good faith by appropriate legal proceedings and appropriate cash reserves therefor have been deposited with Mortgagee in an amount equal to the amount being contested plus a reasonable additional sum to cover costs, legal fees and expenses, interest and penalties.

 

(d) Insurance .

 

(i) Type and Amounts . Mortgagor shall maintain or cause to be maintained, to promptly pay, on or before the same becoming due, all premiums relative to, shall provide Mortgagee with evidence of such coverages as Mortgagee shall require with respect to, and shall name Mortgagee as an additional insured, loss payee and/or mortgagee, as appropriate, under, the following policies of insurance as and when required below, which must be carried with insurers approved by and acceptable to Mortgagee , in its sole discretion: (i) an "all risk" policy of insurance insuring against loss or damage by fire, casualty and other hazards as now are or subsequently may be covered by an "all risk" policy of insurance including, without limitation, riot and civil commotion, vandalism, malicious mischief, burglary and theft, lightning, hail, windstorm, and explosion; (ii) comprehensive general public liability insurance covering occurrences that may arise in the Mortgaged Property, including broad form property damage, blanket contractual and personal injuries (including death resulting therefrom), and containing minimum limits of $1,000,000.00 per occurrence and $2,000,000.00 in the aggregate; (iii) workers' compensation insurance sufficient to meet all statutory requirements, as may be amended from time to time; (iv) if any of the Mortgaged Property is located in an area designated as a special flood hazard area, insurance against flood hazards in the maximum amounts available under the National Flood Insurance Program; and (v) such other coverages as Mortgagee may from time to time or at any time require. All policies of insurance required hereunder shall be satisfactory in form and substance to Mortgagee and shall be approved by Mortgagee as to amounts, form, risk coverage, deductibles, loss payees and insureds.

 

(ii) Requirements as to Policies . All policies of insurance required hereunder are (1) to be issued by companies approved by Mortgagee and either licensed to transact business in the State of Florida, or obtained through a duly authorized surplus line insurance agent or otherwise in conformity with the laws of such state, with a claims paying ability rating of "A" or better by Standard & Poor's Ratings Group or a rating of "A:X" or better in the current Best's Insurance Reports, (2) to contain the standard New York mortgagee non-contribution clause naming Mortgagee as the Person to which all payments made by such insurer shall be paid, (3) to be maintained so long as the Secured Indebtedness remains unpaid without cost to Mortgagee, and (4) to provide that Mortgagee shall receive at least thirty (30) days prior written notice of any modification, termination or cancellation.

 

(iii) Delivery of Policies . Mortgagor shall cause the originals or duplicate originals of each policy required hereunder to be delivered to Mortgagee.

 

(iv) Payment of Premiums . Mortgagor shall pay, or cause to be paid, all insurance premiums at least thirty (30) days before such premiums become due and shall furnish Mortgagee satisfactory proof of such timely payments and shall deliver all renewal policies to Mortgagee at least thirty (30) days prior to the expiration of each expiring policy.

 

(v) Review of Values . Upon the written request of Mortgagee, Mortgagor shall increase the amount of insurance covering the Mortgaged Property to its then full insurable value.

 

(e) Notice of Casualty. Mortgagor shall immediately deliver written notice to Mortgagee of any casualty loss affecting the Mortgaged Property that would cost more than $10,000.00 to repair or replace.

 

(f) Compliance with Laws . Mortgagor shall comply with all governmental laws, ordinances, rules, and regulations applicable to the Mortgaged Property and its ownership, use, and operation, and shall comply with all, and not violate any, easements, restrictions, agreements, covenants, and conditions with respect to or affecting the Mortgaged Property, or any part thereof.

 

(g)   Condition of Mortgaged Property . Mortgagor shall maintain, preserve, and keep the Mortgaged Property in good repair and condition at all times and from time to time.

(h)   Payments for Labor and Materials . Mortgagor shall pay promptly all bills for labor, materials and equipment incurred in connection with the Mortgaged Property, and shall never permit to be fixed against the Mortgaged Property, or any part thereof, any lien, even though inferior to the liens and security interests hereof, for any such bill which may be legally due and payable; provided, however , Mortgagor shall not be required to pay any such bill if the amount, applicability or validity thereof is being contested in good faith by appropriate legal proceedings and Mortgagor has furnished to Mortgagee a bond in form and substance acceptable to Mortgagee with corporate surety satisfactory to Mortgagee, or other security satisfactory to Mortgagee, and sufficient such that the contested lien shall be transferred from the Mortgaged Property to such bond.

(i)   Further Assurances . Mortgagor shall execute and deliver forthwith to Mortgagee, at any time and from time to time upon request by Mortgagee, any and all additional instruments (including, without limitation, deeds of trust, mortgages, security agreements, assignments, and financing statements) and further assurances, and to do all other acts and things at Mortgagor's expense, as may be necessary or proper, in Mortgagee's reasonable opinion, to effect the intent of these presents, to more fully evidence and to perfect, the rights, titles and Liens, herein created or intended to be created hereby and to protect the rights of Mortgagee hereunder.

(j)   Prohibition Against Liens . Without the prior written consent of Mortgagee, Mortgagor shall not create, incur, permit or suffer to exist in respect of the Mortgaged Property, or any part thereof, any other or additional lien on a parity with or superior or inferior to the liens and security interests hereof; provided, however , if any such lien now or hereafter affects the Mortgaged Property or any part thereof, Mortgagor covenants to timely perform all covenants, agreements and obligations required to be performed under or pursuant to the terms of any instrument or agreement creating or giving rise to such lien.

(k)   Conveyance; Due On Sale .   Without the prior written consent of Mortgagee, in Mortgagee's sole and absolute discretion ( i.e. , such consent may be withheld for any reason or for no reason whatsoever), Mortgagor shall not sell or otherwise dispose (which shall include any installment sales contract or agreement for deed, lease-option agreement, ground lease, or lease under which the tenant does not occupy any portion of the Mortgaged Property) of the Mortgaged Property , or any part thereof, nor shall it permit the change in control in Mortgagor or any Person comprising Mortgagor that results in a material change in the identity of the Person(s) in control of such entity. In the event of the violation of any of the foregoing, Mortgagee may, at its election, declare the entire Secured Indebtedness to be immediately due and payable, without notice to Mortgagor (which notice Mortgagor hereby expressly waives); and upon such declaration, the entire Secured Indebtedness shall be immediately due and payable, anything contained in any Loan Document to the contrary notwithstanding, and the Mortgagee shall have such options as are provided herein and the Loan Documents . Mortgagee shall not be required to demonstrate any actual impairment of its security in order to exercise such option. The provisions hereof shall be operative with respect to, and be binding upon, any Persons who shall acquire any part or interest in or encumbrance upon the Mortgaged Property, or any interest in the Mortgagor. Any waiver by the Mortgagee of the provisions hereof shall not be a waiver of the right of the Mortgagee in the future to insist upon strict compliance with the provisions hereof.

(l)   Annual Financial Statements . Mortgagor shall deliver to Mortgagee financial statements and other financial information as and when required pursuant to the terms of the Loan Agreement.

(m)   Additional Reports and Information . Mortgagor shall also deliver to Mortgagee, in form and substance reasonably satisfactory to Mortgagee and within ten (10) days of Mortgagee's request therefor from time to time, (a) copies of all financial statements and reports that Mortgagor sends to its shareholders (if Mortgagor is a corporation), its partners (if Mortgagor is a partnership or joint venture) or to its members (if Mortgagor is a limited liability company), (b) copies of all reports which are available for public inspection or which Mortgagor is required to file with any governmental authority, and (c) all other information relating to Mortgagor, the Mortgaged Property or the Secured Indebtedness reasonably required by Mortgagee from time to time.

 

(n)   Tax on Liens . If at any time any law shall be enacted imposing or authorizing the imposition of any tax upon this Mortgage, or upon any rights, titles, liens, or security interests created hereby, or upon the Secured Indebtedness, or any part thereof, Mortgagor shall pay immediately all such taxes to the extent permitted by law; provided that, if it is unlawful for Mortgagor to pay such taxes, then Mortgagor shall, if Mortgagee so requires, prepay the Secured Indebtedness in full within sixty (60) days after demand therefor by Mortgagee.

(o)   Inspections . During all business hours, Mortgagor shall allow any representative of Mortgagee to inspect the Mortgaged Property, and all books and records of Mortgagor, and to make and take away copies of such books and records. Mortgagor shall maintain complete and accurate books and records in accordance with good accounting practices.

(p)   Removal of Personalty . Mortgagor shall not cause or permit any of the Personal Property to be removed from Mortgaged Property, except items of Personal Property which have become obsolete or worn beyond practical use and which have been replaced by adequate substitutes having a value equal to, or greater than, the replaced items when new.

(q)   Expenses . Mortgagor shall promptly pay and hold Mortgagee harmless from all appraisal fees, survey fees, recording fees, abstract fees, title policy fees, escrow fees, attorneys' fees, and all other costs of every kind incurred by Mortgagee in connection with the Secured Indebtedness, the collection thereof and the exercise by Mortgagee of its rights and remedies hereunder and under the other Loan Documents. Additionally, Mortgagor agrees to reimburse Mortgagee of the cost of periodic field examinations of the Mortgagor’s books and records at such intervals as Mortgagee may require.

(r)   Mortgagee 's Right to Make Certain Payments.   In the event Mortgagor fails to pay and/or discharge the taxes, assessments, liens, levies, liabilities, obligations and encumbrances, or fails to keep the Mortgaged Property insured or to deliver the policies, premiums paid or fails to repair the Mortgaged Property as herein agreed, Mortgagee is hereby authorized at its election to pay and/or discharge, the taxes, assessments, liens, levies, liabilities, obligations and encumbrances or any part thereof, to procure and pay for such insurance or to make and pay for such repairs, without any obligation on its part to determine the validity and/or necessity thereof, and without Mortgagee waiving or affecting any option, lien, equity or right under or by virtue of this Mortgage; Mortgagee shall endeavor to provide written notice of Mortgagee’s intention to take make any such payment or otherwise take any such action but shall not be required to do so as a condition of making any such payment or taking any such action . The full amount of each and every such payment made by the Mortgagee shall be immediately due and payable by Mortgagor and shall bear interest from date thereof until paid at the default rate set forth in the Note and together with such interest, shall be secured by the lien of this Mortgage . Nothing herein contained shall be deemed as requiring Mortgagee to advance or spend monies for any of the purposes mentioned in this paragraph.

(s)   Obligations Under Personal Property; Governmental Approvals; and Contracts . Mortgagor shall perform fully all obligations imposed upon Mortgagor by the agreements and instruments constituting part of the Personal Property (including, without limitation, the Leases), all governmental approvals, licenses or permits relative to the use and occupancy of the Improvements, and shall maintain and keep all of the foregoing in full force and effect.

(t)   Alterations . Mortgagor shall make no material alterations in the Mortgaged Property, except as required by law or municipal ordinance, without Mortgagee's prior written consent, which consent shall not be unreasonably withheld or delayed provided that such alterations shall not have any materially adverse effect on the value or use of the Mortgaged Property.

 

(u)   Payment of Utilities Mortgagor shall pay promptly all charges for utilities or services related to the Mortgaged Property.

(v)   Patriot Act Compliance . Mortgagor shall not, and shall use commercially reasonable efforts to ensure that any Affiliate of Mortgagor shall not: (i) conduct any business, or engage in any transaction or dealing, with any Prohibited Person, including without limitation knowingly making or receiving any contribution of funds, goods, or services, to or for the benefit of a Prohibited Person; or (ii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order 13224 or the Patriot Act. On request from time to time by Mortgagee, Mortgagor shall promptly deliver to Mortgagee any such certification or other evidence as Mortgagee shall reasonably require confirming that, to Mortgagor’s knowledge, no violation of this subsection shall have occurred.

 

(w)   Forfeiture . Mortgagor shall not commit, permit or suffer any act, omission or circumstance which would afford any federal, state or local government, or agency thereof, the right of forfeiture as against the Mortgaged Property or any part thereof or any monies paid in performance of the Obligations. In furtherance thereof, Mortgagor hereby agrees to, and does, indemnify, defend and hold Mortgagee harmless of, from and against any loss, damage or injury by reason of any such forfeiture as a result of Mortgagor’s breach of the foregoing covenants.

(x)   Access Laws . Mortgagor shall strictly comply at all times, to the extent required thereby, with all Access Laws.

(y)   Appraisals . Mortgagor shall pay for and cooperate with Mortgagee in obtaining an appraisal of the Mortgaged Property when required by the regulations of the Federal Reserve Board or the Federal Deposit Insurance Corporation or any other governmental agency or regulator having jurisdiction over Mortgagee or at such other times as the Mortgagee may reasonably require. Such appraisals shall be performed by an independent third party appraiser selected by Mortgagee. The cost of such appraisals shall be paid by Mortgagor within ten (10) days of receiving an invoice therefor.

ARTICLE FOUR

ENVIRONMENTAL MATTERS

4.01 Representations and Warranties . Mortgagor represents and warrants to Mortgagee as follows: (i) to the best of Mortgagor’s knowledge, neither the Mortgaged Property nor the Mortgagor is in violation of or subject to any existing, pending or threatened investigation by any governmental authority under any Environmental Law; (ii) except as otherwise disclosed in a separate Environmental Indemnity Agreement dated on or about the date hereof from Mortgagor in favor of Mortgagee, Mortgagor has not and is not required by any Environmental Law to obtain any permits or license to construct or use any improvements, fixtures or equipment forming a part of the Mortgaged Property; (iii) Mortgagor has made diligent inquiry into previous uses and ownership of the Mortgaged Property, and has determined that no Hazardous Substance has been disposed of or released on or to the Mortgaged Property; (iv) Mortgagor's prior, current and intended future use of the Mortgaged Property will not result in the disposal or release of any Hazardous Substance on or to the Mortgaged Property except as permitted by applicable law.

 

4.02 Environmental Matters . Mortgagor shall not use, generate, manufacture, store, release, discharge, or dispose of on, under, or about the Mortgaged Property or transport to or from the Mortgaged Property any Hazardous Substance or allow any other person or entity to do so except under conditions permitted by applicable laws (including all Environmental Laws). Mortgagor shall keep and maintain the Mortgaged Property in compliance with, and shall not cause or permit the Mortgaged Property to be in violation of, any Environmental Law. Mortgagor shall give prompt written notice to Mortgagee of: (i) any proceeding or inquiry by any governmental authority with respect to the presence of any Hazardous Substance on the Mortgaged Property or the migration thereof from or to other property; (ii) all claims made or threatened by any third party against Mortgagor or the Mortgaged Property relating to any loss or injury resulting from any Hazardous Substance; and (iii) Mortgagor's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Mortgaged Property that could cause the Mortgaged Property or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of the Mortgaged Property under any Environmental Law, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Mortgaged Property under any Environmental Law. Mortgagor shall provide to Mortgagee copies, contemporaneously with filing same, of all reports, inventories, notices or other forms filed or submitted to the Environmental Protection Agency, or any state or local agency having responsibility for overseeing or enforcing any Environmental Laws. In the event that any investigation, site monitoring, containment, cleanup, removal, restoration or other remedial work of any kind or nature (the ” Remedial Work ") is reasonably necessary under any applicable local, state or federal law or regulation, any judicial order, or by any governmental entity because of, or in connection with, the current or future presence or release of a Hazardous Substance, Mortgagor shall within such period of time as may be required under any applicable law, regulation, order or agreement, commence and thereafter diligently prosecute to completion, all such Remedial Work. All Remedial Work shall be performed by competent contractors. All costs and expenses of such Remedial Work shall be paid by Mortgagor including, but not limited to, Mortgagee's reasonable attorneys' fees and costs incurred in connection with review of such Remedial Work. In the event Mortgagor shall fail to diligently prosecute to completion such Remedial Work, Mortgagee may, but shall not be required to, cause such Remedial Work to be performed and all costs and expenses thereof, or incurred in connection therewith, shall become part of the Secured Indebtedness.

 

 

4.03 Environmental Indemnity . Mortgagor shall protect, indemnify and hold harmless Mortgagee, its directors, officers, employees, agents, successors and assigns from and against any and all loss, damage, cost, expense or liability (including attorneys' fees and costs) directly or indirectly arising out of or attributable to the use, generation, manufacture, production, storage, release, threatened release, discharge, disposal, or presence of a Hazardous Substance on, under or about the Mortgaged Property whether known or unknown, fixed or contingent, occurring prior to the termination of this Mortgage, including, but not limited to: (i) all foreseeable consequential damages; and (ii) the costs of any required or necessary repair, cleanup or detoxification of the Mortgaged Property and the preparation and implementation of any closure, remedial or other required plans. This indemnity shall survive the release of the lien of this Mortgage, or the extinguishment of the lien by foreclosure or action in lieu thereof, and this covenant shall survive such release or extinguishment.

 

ARTICLE FIVE

EVENTS OF DEFAULT; REMEDIES

 

5.01 Events of Default . Any one or more of the following shall constitute an " Event of Default " hereunder:

 

(a) the failure to make any payment of principal and/or interest on the Secured Indebtedness or any other obligation of Mortgagorto Mortgagee (i) within ten (10) days of when due, as to any regular payment, and/or (ii) when due as to any payment due on demand, at maturity or by acceleration;

 

(b) if any representation or warranty of Mortgageein any of this Mortgage, the Loan Agreement, the other Loan Documents, any endorsement, any guaranty, or in any certificate or statement furnished at any time thereunder or in connection therewith proves to be untrue or misleading in any material respect when made or furnished;

 

(c) default which is not otherwise the subject of any other provision of this paragraph shall occur in the performance of any of the covenants or agreements of Mortgagorcontained in the Note, the Loan Agreement, this Mortgage, or any other Loan Document and such default is not capable of being cured, or if capable of being cured shall continue uncured to the reasonable satisfaction of Mortgagee for a period of forty-five (45 ) days after written notice thereof from Mortgagee to Mortgagor, or such other lesser or greater period of time, if any, with or without notice as specifically set forth in the applicable document or instrument; provided, however , in the event that such default is capable of being cured but not within forty-five (45) days, or such other greater or lesser curative period with respect to the particular default, Mortgagor shall have such additional time, not to exceed an additional fifteen (15) days within which to cure such default, provided that it commences such cure within the original curative period therefor and thereafter diligently prosecutes the same to completion;

 

(d) the commencement of a proceeding by or against Mortgagor for dissolution or liquidation, the voluntary or involuntary termination or dissolution of Mortgagor or the merger or consolidation of Mortgagor with or into another entity, and in the case of an involuntary proceeding only the same is not dismissed within sixty (60) days from the date of filing thereof;

 

(e) the insolvency of, the business failure of, the appointment of a custodian, trustee, liquidator or receiver for or for any of the property of, the assignment for the benefit of creditors by, or the filing of a petition under bankruptcy, insolvency or debtor's relief law or the filing of a petition for any adjustment of indebtedness, composition or extension by or against Mortgagor, and in the case of an involuntary proceeding only the same is not dismissed within sixty (60) days from the date of filing thereof

 

(f) the failure of Mortgagor to timely deliver such financial statements and other statements of condition or other information, as required by the Loan Agreementor as Mortgagee shall request from time to time;

 

(g) the entry of a judgment against Mortgagor which Mortgagee deems to be of a material nature, in Mortgagee's sole discretion, which is not released or satisfied within forty-five (45) days of the entry thereof;

 

(h) the seizure or forfeiture of, or the issuance of any writ of possession, garnishment or attachment, or any turnover order for any property of Mortgagor, including without limitation the Mortgaged Property;

 

(i) should Mortgagee’s liens, mortgages or security interests, including without limitation this Mortgage, in any of the collateral for the Note, including without limitation the Mortgaged Property, become unenforceable, or cease to be first priority liens, mortgages or security interests;

 

(j) the determination by Mortgagee that a material adverse change has occurred in the financial condition of Mortgagor;

 

(k) the failure of Mortgagor's business to comply with any law or regulation controlling its operation which has a material adverse effect on Mortgagor, its business or the Mortgaged Property; or

 

(l) condemnation or taking by eminent domain of all or any material part (as determined by Mortgagee in its sole discretion) of the Mortgaged Property.

 

5.02 Remedies of Mortgagee . Upon the occurrence of any Event of Default , the Mortgagee may immediately do any one or more of the following:

 

(a) Declare the outstanding principal amount of the Note and the interest accrued thereon, and all other sums comprising the Secured Indebtedness , to be due and payable immediately, and upon such declaration such principal and interest and other sums shall immediately become due and payable without demand, notice or presentment for payment.

(b) Mortgagee may proceed by suit or suits at law or in equity or by any other appropriate proceeding or remedy (i) to enforce payment of the Note or the performance of any term hereof or any other right; (ii) to foreclose this Mortgage and to sell, as an entirety or in separate lots or parcels, the Mortgaged Property under the judgment or decree of the court or courts of competent jurisdiction; (iii) to collect all Rents , issues, profits, revenues, income, proceeds or other benefits from the Mortgaged Property ; (iv) to seek appointment of a receiver; (v) to enter upon and take possession of the Mortgaged Property and to collect all Rents , issues, profits, revenues, income or other benefits thereof and apply the same as the court may direct and such receiver shall have all rights and powers permitted under law; (vi) to pursue any other remedy available to it, including, but not limited to, taking possession of the Mortgaged Property without notice or hearing to Mortgagor ; (vii) to make repairs, alterations, additions and improvements to the Mortgaged Property for the purpose of preserving it or its value; or (viii) to surrender all insurance policies. Mortgagee shall take action either by such proceedings or by the exercise of its power with respect to entry or taking possession, or both as Mortgagee may determine.

 

(c) Pursue any and all remedies available under the Code , it being agreed that ten (10) days' notice as to the time, date and place of any proposed sale shall be reasonable.

 

(d) Exercise any and all rights or other remedies as contained in the other Loan Documents .

 

5.03 Remedies Cumulative . The rights of Mortgagee and its successors and assigns hereunder or under any other Loan Document , shall be separate, distinct and cumulative of other powers and rights herein granted and all other rights which Mortgagee may have in law or equity, and none of them shall be in exclusion of the others; and all of them are cumulative to the remedies for collection of indebtedness, enforcement of rights under mortgages, and preservation of security as provided at law. No act of Mortgagee or its successors or assigns, shall be construed as an election to proceed under any one provision to the exclusion of any other provision, or an election of remedies to the bar of any other remedy allowed at law or in equity, anything herein or otherwise to the contrary notwithstanding.

ARTICLE SIX

SECURITY AGREEMENT

6.01 Grant and Perfection of Security Interest . Mortgagor hereby transfers, assigns, delivers and grants to Mortgagee a security interest in and right of set-off against the Personal Property as security for payment of the Secured Indebtedness. Mortgagor hereby authorizes Mortgagee to file in each and every jurisdiction as Mortgagee shall determine one or more financing statements (or a photocopy of this Mortgage in substitution for a financing statement), continuation statements or amendments thereto as Mortgagee shall at any time or from time to time determine, and otherwise containing such information as is required or is permissible to be contained in a financing statement filed pursuant to Article 9 of the Code. Mortgagor shall have possession of the Personal Property, except to the extent otherwise expressly provided in this Mortgage or where Mortgagee elects, in its sole and absolute discretion, to perfect its security interest by possession in addition to or instead of filing of a financing statement. To the extent that any Personal Property is in the possession of a third party, Mortgagor agrees that it shall join with Mortgagee, and take such other steps as Mortgagee shall require, in notifying, but also hereby authorizes Mortgagee to directly notify without Mortgagor's joinder, the third party of Mortgagee's security interest and obtaining an acknowledgment in such form or forms as Mortgagee shall require from the third party that it is holding the Personal Property or such portion as is held by the third party for the benefit of the Mortgagee and subject to the security interest granted herein and the operation of this Mortgage. Mortgagor agrees that it shall join with Mortgagee, and take such other steps as Mortgagee shall require, in obtaining "control" of any Investment Property, Deposit Accounts, Letter of Credit Rights or Electronic Chattel Paper (as such terms are defined in the Code) forming any part of the Personal Property, with any agreements establishing control to be in form and substance satisfactory to Mortgagee.

 

6.02 Notice of Change in Location . Mortgagor covenants and agrees that in the event that the state of its "location," as used in the Code, shall change from its "location" existing as of the date hereof, Mortgagor shall notify Mortgagee in writing within fifteen (15) days thereof and shall further provide to Mortgagee the state of its location and shall take all such actions as are required in order to perfect or continue the perfection of Mortgagee's security interest in the Personal Property.

 

6.03 Assignment of Non-Code Personal Property . To the extent that any of the Personal Property is not subject to the Code, Mortgagor hereby assigns to Mortgagee all of Mortgagor's right, title, and interest in and to the Personal Property to secure the Secured Indebtedness, together with the right of set-off with regard to such Personal Property (or any part hereof). Release of the lien of this Mortgage shall automatically terminate this assignment.

 

 

ARTICLE SEVEN

ASSIGNMENT OF RENTS

7.01 Assignment . Mortgagor does hereby grant, transfer and assign unto Mortgagee (i) the Leases; (ii) any and all guaranties of payment or performance of the obligations of any lessee under any Leases; and (iii) all Rents or issues from the Mortgaged Property; provided, however , that Mortgagee hereby grants to Mortgagor a license to collect and receive all Rents, which license shall be revocable by notice from Mortgagee to Mortgagor at any time after the occurrence and during the continuation of an Event of Default.

 

7.02 No Liability on Mortgagee . Mortgagee shall not be liable for any loss sustained by Mortgagor resulting from Mortgagee's failure to let the Mortgaged Property, or any part thereof, after an Event of Default or from any other act or omission of Mortgagee in managing the Mortgaged Property, or any part thereof. Mortgagee shall not be obligated to perform or discharge, any obligation, duty or liability under the Leases and Mortgagor shall indemnify Mortgagee for, and hold Mortgagee harmless from, any and all liability, loss or damage which may or might be incurred under the Leases, and from any and all claims and demands whatsoever which may be asserted against Mortgagee by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants or agreements contained in the Leases. Should Mortgagee incur any such liability under the Leases or in defense of any such claims or demands, the amount thereof, including costs, expenses and reasonable attorneys' fees shall be secured hereby and Mortgagor shall reimburse Mortgagee therefor immediately upon demand, and upon the failure of Mortgagor to do so Mortgagee may, at its option, declare the Secured Indebtedness immediately due and payable.

 

7.03 Covenants Regarding Leases . With respect to the Leases from time to time or at any time existing, Mortgagor shall (i) appear in and defend any action or proceeding arising under, occurring out of, or in any manner connected with, the Leases, (ii) not receive or collect any Rents from any of the Leases for a period of more than one (1) month in advance, (iii) not waive, discount, set-off, compromise, or in any manner release or discharge any lessee, of and from any obligations, covenants, conditions and agreements by such lessee under its Lease, (iv) not terminate or consent to any surrender of any Lease, or modify or in any way alter the terms thereof, without the prior written consent of Mortgagee, and shall use all reasonable efforts to maintain each of the Leases in full force and effect during the term of this Mortgage, (v) not subordinate any Lease to any mortgage or other encumbrance (other than the lien of this Mortgage), and (vi) shall (A) obtain Mortgagee's approval as to the form and substance of each Lease or amendment thereto, (B) deliver to Mortgagee, true and complete copies of the Leases and any amendments thereto, (C) not enter into any oral leases or any side agreements with respect to a Lease with any Lessee, except upon notice to and approval in writing by Mortgagee, (D) not execute any Lease except for actual occupancy by the lessee thereunder, and (E) from time to time upon request of Mortgagee, furnish to Mortgagee a written certification signed by Mortgagor describing all then existing Leases and the names of the tenants and Rents payable thereunder.

 

ARTICLE EIGHT

MISCELLANEOUS

 

8.01 Marshaling . Mortgagor hereby waives all rights of marshaling in the event of any foreclosure of the liens hereby created.

 

8.02 Reserve for Taxes and Insurance . Upon notification from Mortgagee , Mortgagor shall create a fund or reserve for the payment of all ground rentals, insurance premiums, taxes, and assessments against the Mortgaged Property by paying the Mortgagee, contemporaneously with each installment of principal and interest on the Note, a sum equal to the rentals payable by Mortgagor to any lessor of the Mortgaged Property, or any part thereof, plus the premiums that will become due and payable on the insurance policies covering the Mortgaged Property, or any part thereof, plus taxes and assessments next due on the Mortgaged Property, or any part thereof, as estimated by Mortgagee, less all sums paid previously to Mortgagee therefor, divided by the number of installments of principal and/or interest to elapse before one month prior to the date when such ground rentals, premiums, taxes, and assessments will become delinquent, such sums to be held by Mortgagee, without interest, for the purposes of paying such ground rentals, premiums, taxes, and assessments. Prior to the occurrence of an Event of Default, Mortgagee shall apply such sums to the payment of such ground rentals, premiums, taxes and assessments. After the occurrence and during the continuation of an Event of Default, Mortgagee may, in its sole discretion, apply such sums to the payment of such expenses or to the Secured Indebtedness. Any excess reserve shall, at the discretion of Mortgagee, be credited by Mortgagee on subsequent payments to be made on the Secured Indebtedness by Mortgagor, and any deficiency shall be paid by Mortgagor to Mortgagee on or before the date when such ground rentals, premiums, taxes, and assessments, shall have become delinquent.

 

 

8.03 Condemnation and Eminent Domain . Mortgagee shall be entitled to receive any and all sums which may be awarded or become payable to Mortgagor for the condemnation of, or taking upon exercise of the right of eminent domain with respect to, any of the Mortgaged Property or as a result of private sale in lieu thereof, and any sums which may be awarded or become payable to Mortgagor for damages caused by public works or construction on or near the Mortgaged Property. Mortgagor shall give immediate written notice to Mortgagee of any such proceedings affecting the Mortgaged Property, and shall afford Mortgagee an opportunity to participate in any proceeding or settlement of awards with respect thereto. All sums are hereby assigned to Mortgagee, and Mortgagor shall, upon request of Mortgagee, make, execute, acknowledge, and deliver any and all additional assignments and documents as may be necessary from time to time to enable Mortgagee to collect and receipt for any such sums. Mortgagee shall not be, under any circumstances, liable or responsible for failure to collect, or exercise diligence in the collection of, any of such sums. Any sums so collected shall be applied by Mortgagee, first, to the expenses, if any, of collection, and then to the Secured Indebtedness, and if any sums then be remaining then to Mortgagor.

 

8.04 Insurance Proceeds . Mortgagee is authorized and empowered to collect and receive the proceeds of any and all insurance that may become payable with respect to any of the Mortgaged Property, which shall be payable by the insurer thereunder jointly to Mortgagor and Mortgagee. In event of any casualty loss, Mortgagor shall give immediate notice by mail to Mortgagee and Mortgagee may make proof of loss if not made promptly by Mortgagor , and each insurance company concerned is hereby authorized and directed to make payments for such loss directly to Mortgagee instead of to Mortgagor or to Mortgagor and Mortgagee jointly. The insurance proceeds or any part hereof may be applied by Mortgagee at its option, after deducting therefrom all its expenses including attorneys' fees , either to reduction of the Secured Indebtedness or the restoration or repair of the property damaged. Mortgagee is hereby authorized, at its option, to settle and compromise any claims, awards, damages, rights of action and proceeds, and any other payment or relief under any insurance policy. In the event of foreclosure of this Mortgage or other transfer of title to the Mortgaged Property in extinguishment of the Secured Indebtedness , all right, title and interest of Mortgagor in and to any insurance policies then in force shall pass to the purchaser or grantee.

 

8.05 Illegality . If any provision of this Mortgage is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Mortgage, the legality, validity, and enforceability of the remaining provisions of this Mortgage shall not be affected thereby, and in lieu of each such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Mortgage a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.

 

8.06 Counterparts . This Mortgage may have simultaneously been executed in a number of identical counterparts, each of which, for all purposes, shall be deemed an original.

 

8.07 Exhibits . All exhibits attached hereto are by this reference made a part hereof.

 

8.08 Indemnity . Mortgagor hereby agrees to indemnify and hold Mortgagee harmless from and against, any and all losses, damages, claims, costs, penalties, causes of action, liabilities and expenses, including court costs and attorneys' fees, howsoever arising (including, without limitation, for injuries to or deaths of persons and damage to property), from or incident to the ownership of the Mortgaged Property and development, use, possession, maintenance, management, and construction.

 

 

8.09 Singular; Plural . Whenever herein the singular number is used, the same shall include the plural where appropriate, and words of any gender shall include each other gender where appropriate.

 

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

 

8.11 Notices . Whenever this Mortgage requires or permits any consent, approval, notice, request, or demand from one party to another, the consent, approval, notice, request, or demand must be in writing to be effective and shall be deemed to have been given when personally delivered or deposited in the United States mails, registered or certified, return receipt requested, addressed to the party to be notified at the address set forth in the preamble hereof (or at such other address as may have been designated by written notice).

 

8.12 Governing Laws . The substantive laws of the State of Florida shall govern the validity, construction, enforcement, and interpretation of this Mortgage, and the other Loan Documents, unless otherwise specified therein.

 

8.13 Time of Essence . Time is of the essence of this Mortgage.

 

8.14 Fixture Filing . This Mortgage shall also constitute a security agreement with respect to the Personal Property and a "fixture filing" for purposes of the Code. Portions of the Personal Property are or may become fixtures. Information concerning the security interests herein granted may be obtained at the addresses stated in the preamble hereof.

 

8.15 Financing Statement . Mortgagee shall have the right at any time to file this Mortgage as a financing statement, but the failure to do so shall not impair the validity and enforceability of this Mortgage in any respect whatsoever. A carbon, photographic, or other reproduction of this Mortgage, or any financing statement relating to this Mortgage, shall be sufficient as a financing statement.

 

8.16 Entire Agreements; Amendments . This Mortgage, the Note and the other documents executed in connection herewith represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties. This Mortgage cannot be amended except by agreement in writing by the party against whom enforcement of the amendment is sought.

 

8.17 No Right of Setoff . No setoff or claim that Mortgagor may now or in the future have against Mortgagee shall relieve or excuse Mortgagor from paying the installments under the Note or performing any other obligation secured hereby when the same is due.

 

8.18 Mortgagee Liability . Mortgagee shall not be liable for any error of judgment or act done by Mortgagee in good faith, or be otherwise responsible or accountable to Mortgagor under any circumstances whatsoever, nor shall Mortgagee be personally liable in case of entry by Mortgagee, or anyone entering by virtue of the powers herein granted, upon the Mortgaged Property or for debt contracted or for damages incurred in the management or operation of the Mortgaged Property. Mortgagee shall have the right to rely on any instrument, document, or signature authorizing or supporting any action taken or proposed to be taken by Mortgagee hereunder, believed by Mortgagee in good faith to be genuine.

 

8.19 Right to Modify . Without affecting the obligation of Mortgagor to pay and perform as herein required, without affecting the personal liability of any person for payment of the Obligations including without limitation the Secured Indebtedness, and without affecting the lien or priority of the lien hereof on the Mortgaged Property, Mortgagee may, at its option, extend the time for payment of the Obligations or any portion thereof, reduce the payments thereon, release any person liable on any portion of the Obligations, accept a renewal note or notes therefor, modify the terms of the Secured Indebtedness, release or reconvey any part of the Mortgaged Property, take or release other or additional security, consent to the making of any map or plat thereof, join in granting any easement thereon, or join in any extension agreement or agreement subordinating the lien hereof. Any such action by Mortgagee may be taken without Mortgagor's consent and without the consent of any subordinate lienholder, and shall not affect the priority of this Mortgage over any subordinate lien.

 

 

8.20 Expenses of Recording . Mortgagor agrees to pay all recording fees, documentary stamp taxes, intangible taxes, charges and filing, registration and recording fees imposed upon this Mortgage, the recording or filing thereof, or upon the Mortgagee by reason of its ownership of this Mortgage, or its enforcement thereof.

 

8.21 Attorneys' Fees . The term " attorneys' fees " as used herein shall also include charges for paralegals, law clerks and other staff members operating under the supervision of an attorney, and shall also include, without limitation, any allocated costs of Mortgagee’s in-house counsel to the extent permitted by applicable law. Any award or payment of attorneys' fees hereunder or by order of a court of competent jurisdiction shall include as a part thereof any and all sales and/or use taxes imposed thereon by any appropriate governmental authority.

 

8.22 Future Advances . Any additional sum or sums advanced by the then holder of the Note secured hereby, to or for the benefit of Mortgagor, whether obligatory or made at the option of Mortgagee, or otherwise, at any time within twenty (20) years from the date of this Mortgage, with interest at the rate agreed upon at the time of each additional loan or advance, shall be equally secured with and have the same priority as the original indebtedness and be subject to all of the terms and provisions of this Mortgage, whether or not such additional loan or advance is evidenced by a promissory note of the borrowers and whether or not identified by a recital that it is secured by this Mortgage; provided that the aggregate amount of principal indebtedness outstanding and so secured at any one time shall not exceed a maximum principal sum equal to four (4) times the face amount of the Note, plus interest thereon and any disbursements made for the payment of taxes, levies, insurance or other sums in connection with the Mortgaged Property with interest on such disbursements.

 

[Remainder of Page Intentionally Blank]

 

 

IN WITNESS WHEREOF , Mortgagor, intending to be legally bound hereby, has executed this Mortgage as of the day and year first above written.

 

 

STATE OF FLORIDA

COUNTY OF PINELLAS

 

THE FOREGOING INSTRUMENT was acknowledged before me this ___ day of March, 2014, by Robert L. Gershon, as Chief Executive Officer of Bovie Medical Corporation, a Delaware corporation, on behalf of the corporation. He/she o is personally known to me or o has produced ___________________________, as identification.

 

 

Exhibits:

 

A—Legal Description of Land

B— Schedule of Permitted Exceptions

 

 

EXHIBIT “A”

 

LEGAL DESCRIPTION OF LAND

 

Lot 9, in the Southeast 1/4 of Section 4, Township 30 South, Range 16 East, according to the plat of Pinellas Groves, Inc., recorded in Plat Book 1, Page 55, of the Public Records of Pinellas County, Florida, LESS the West 150 feet thereof and also LESS that part lying within 120 feet of survey line of State Road S-688, Section 15120, as described in Clerk's Instrument No. 260901B, Official Records Book 2081, Page 593, Pinellas County Records.

 

 

EXHIBIT “B”

 

SCHEDULE OF PERMITTED EXCEPTIONS

 

1.	Easement in favor of Florida Power Corporation recorded in Official Records Book 4272, Page 1476.

2.	Unrecorded Outdoor Billboard lease dated June 30, 2002, between Harland Clarke Corporation and Clear Channel Outdoor, Inc.

 

 

 

 

20

---

EXHIBIT 10.3

 

PROMISSORY NOTE

$3,592,000.00	Clearwater, Florida
	March 20, 2014

FOR VALUE RECEIVED , the undersigned, Bovie Medical Corporation, a Delaware corporation(the " Maker ") unconditionally promises to pay to the order of The Bank of Tampa , a Florida banking corporation (" Payee, " which shall include any subsequent holder hereof or any interest herein), at Post Office Box One, Tampa , Florida 33601, or at such other place as the Payee may from time to time designate in writing, without grace, the principal sum of $3,592,000.00, together with interest on the unpaid principal balance from time to time outstanding in accordance with the following provisions:

(a) In addition to the other terms elsewhere defined in this Note, the following terms shall have the respective meanings set forth below:

" Business Day " shall mean (i) any day other than a Saturday, Sunday or any other day on which Payee is not open for business and (ii) with respect to all notices, determinations, funding and payments in connection with the LIBOR Rate, any day that is a Business Day pursuant to clause (i) and that is also a day on which trading is carried on by and between banks in the London interbank market.

“ Extended Maturity Date ” shall mean March 20, 2022.

“ Initial Maturity Date ” shall mean March 20, 2017.

“ Interest Period ” shall mean each one month period commencing on the first day of each calendar month and ending on the last day of each calendar month, provided that the initial Interest Period shall commence on the date hereof and shall end on March 31, 2014.

“ Interest Rate ” shall mean a monthly adjusting interest rate per annum equal to the sum of (A) the LIBOR Rate as in effect as of the first Business Day of each Interest Period plus (B) the Interest Rate Margin and fixed until the first day of the next succeeding Interest Period at which time the Interest Rate shall be adjusted as herein provided. The maintenance of principal at Interest Rate shall be subject to the following additional terms and conditions:

(i) If Payee notifies Maker that reasonable means do not exist for Payee to determine the LIBOR Rate, as determined by Payee in its sole discretion, then the principal subject or to be subject to the Interest Rate shall accrue or shall continue to accrue interest at a rate as determined by Payee in its discretion based on a reasonably comparable index and an interest rate margin determined by Payee in its reasonable discretion.

 

(ii) If any treaty, statute, regulation, interpretation thereof, or any directive, guideline, or otherwise by a central bank or fiscal authority (whether or not having the force of law) shall either prohibit or extend the time at which any principal subject to Interest Rate, or corresponding deposits, if any, may be purchased, maintained, or repaid, then on and as of the date the prohibition or extension becomes effective, the principal subject to that prohibition or extension shall continue to accrue interest at a rate as determined by Payee in its discretion based on a reasonably comparable index and an interest rate margin determined by Payee in its reasonable discretion..

 

(iii) All payments of principal and interest shall be made net of any taxes, costs, fees, losses and expenses incurred or charged by Payee resulting from having principal outstanding hereunder at the Interest Rate, including:

 

(A) taxes (or the withholding of amounts for taxes) of any nature whatsoever including income, excise, and interest equalization taxes (other than income taxes imposed by the United States or any state thereof on the income of Payee), as well as all levies, imposts, duties, or fees whether now in existence or resulting from a change in, or promulgation of, any treaty, statute, regulation, interpretation thereof, or any directive, guideline, or otherwise, by a central bank or fiscal authority (whether or not having the force of law) or a change in the basis of, or time of payment of, such taxes and other amounts resulting therefrom;

 

(B) any reserve or special deposit requirements against assets or liabilities of, or deposits with or for the account of, Payee with respect to principal outstanding at the Interest Rate (including those imposed under Regulation D of the Federal Reserve Board) or resulting from a change in, or the promulgation of, such requirements by treaty, statute, regulation, interpretation thereof, or any directive, guideline, or otherwise by a central bank or fiscal authority (whether or not having the force of law);

 

(C) any other costs resulting from compliance with treaties, statutes, regulations, interpretations, or any directives or guidelines, or otherwise by a central bank or fiscal authority (whether or not having the force of law);

 

(D) Any breakage fees and other losses and expenses (including interest rate margin and any other losses of anticipated profits, and any minimum breakage fee charged by Payee from time to time) incurred by reason of the liquidation or re-employment of deposits or other funds acquired by Payee to make the loan evidenced by this Note or maintain principal outstanding at the Interest Rate as a result of a prepayment of the loan evidenced by this Note on a day other than the last day of an Interest Period.

If Payee incurs or charges any such taxes, costs, fees, losses and expenses, Maker, upon demand in writing specifying the amounts thereof, shall promptly pay them; save for manifest error Payee’s specification shall be presumptively deemed correct. The loan evidenced by this Note shall be conclusively deemed to have been funded by or on behalf of Payee in the London or another offshore interbank market by the purchase of U.S. Dollar deposits or other funds corresponding in amount to the amounts under this Note for each Interest Period.

" Interest Rate Margin " shall mean 3.50%.

“ LIBOR Rate " shall mean the One Month LIBOR (London Interbank Offered Rate) published in The Wall Street Journal on the 1st Business Day of each Interest Period.

(b) This Note shall bear interest at the Interest Rate, as from time to time in effect.

(c) Commencing on April 20 , 2014 , and on the numerically corresponding day of each and every calendar month thereafter during the term of this Note, Maker shall pay to Payee equal monthly installments of principal of $19,955.56 each plus accrued interest at the Interest Rate.

 

(d) The entire outstanding principal balance together with all accrued interest owed thereon, as well as all other costs associated with the indebtedness evidenced hereby, shall be due and payable in full on the Initial Maturity Date ; provided, however , that in the event that all of the terms and conditions as set forth in the Loan Agreement (as hereinafter defined) with respect to extension of the maturity of this Note until the Extended Maturity Date then the maturity of this Note shall be extended until the Extended Maturity Date , at which time the entire outstanding principal balance together with all accrued interest owed thereon, as well as all other costs associated with the indebtedness evidenced hereby, shall be due and payable in full. In the event that the maturity of this Note is extended until the Extended Maturity Date, Maker shall continue to make the payments of principal plus interest as provided in subparagraph (c) above.

In the event that any interest index referred to herein which is used as the basis for determination of any rate of interest set forth herein ceases to be published or made available, the rate of interest charged hereunder shall be based upon similar published averages reasonably selected by Payee.

 

This Note is (i) made pursuant to the terms of that certain Loan Agreement (as amended, modified, restated or supplemented at any time or from time to time, the “ Loan Agreement ”)by and between Payee and Maker and (ii) secured by, among other things, that certain Mortgage , Security Agreement , Financing Statement and Assignment of Rents (as amended, modified or restated at any time or from time to time, the " Mortgage ") dated the same date as this Note between Maker and Payee, which is a lien on a certain estate in real property described therein, and other loan documents (together with any document or instrument now or hereafter executed in connection with any obligation of Maker to Payee, as the same may be amended, modified or restated at any time or from time to time, the " Loan Documents ").

 

If any payment hereunder is due on a date which is not a Business Day (as defined below), the due date therefor shall be extended to the next succeeding Business Day, and interest shall be payable at the then applicable rate during such extension. All payments hereunder shall be first applied to any accrued unpaid interest, principal, unpaid collection costs, and the balance, if any, to unpaid late charges. All interest provided for in this Note shall be calculated on the basis of a three hundred sixty (360) day year, based on the actual number of days elapsed. Payments must be made in legal tender of the United States of America in good, collected funds at the place of payment. Any payment received after 5:00 p.m. (place of payment time) shall be credited on the next succeeding Business Day.

 

Any payment which is not made within ten (10) days of when due, shall be assessed a "late charge" of five percent (5%) of such payment, which shall be immediately due and payable to Payee.

Prepayments may be made in whole or in part at any time without penalty or premium. All prepayments of principal shall be applied in the inverse order of maturity, or in such other order as Payee shall determine in its sole discretion.

Maker, any endorser, any guarantor hereof or any other party hereto (individually, an " Obligor " and collectively, " Obligors ") and each of them jointly and severally: (a) waive presentment, demand, protest, notice of demand, notice of intent to accelerate, notice of acceleration of maturity, notice of protest, notice of nonpayment, notice of dishonor, and any other notice required to be given under the law to any Obligor in connection with the delivery, acceptance, performance, default or enforcement of this Note, any endorsement or guaranty of this Note, or any other documents executed in connection with this Note or any other note or other Loan Documents; (b) consent to all delays, extensions, renewals or other modifications of this Note or the Loan Documents, or waivers of any term hereof or of the Loan Documents, or release or discharge by Payee of any of Obligors, or release, substitution or exchange of any security for the payment hereof, or the failure to act on the part of Payee, or any indulgence shown by Payee (without notice to or further assent from any of Obligors), and agree that no such action, failure to act or failure to exercise any right or remedy by Payee shall in any way affect or impair the obligations of any Obligors or be construed as a waiver by Payee of, or otherwise affect, any of Payee's rights under this Note, under any endorsement or guaranty of this Note or under any of the Loan Documents; and (c) agree to pay, on demand, all costs and expenses of collection or defense of this Note or of any endorsement or guaranty hereof and/or the enforcement or defense of Payee's rights with respect to, or the administration, supervision, preservation, protection of, or realization upon, any property securing payment hereof, including, without limitation, attorneys' and paralegals' fees (including, without limitation, any allocated costs of Holder’s in-house counsel or legal staff to the extent permitted by applicable law), including fees related to any suit, mediation or arbitration proceeding, out of court payment agreement, trial, appeal, bankruptcy proceedings (including without limitation seeking relief from the stay of 11 U.S.C. §362 and limiting the use of cash collateral under 11 U.S.C. §363), receivership, or other proceeding, in such amount as may be determined reasonable by any arbitrator or court, whichever is applicable. Any award or payment of attorneys’ or paralegals’ fees hereunder or by order of a court of competent jurisdiction shall include as a part thereof any and all sales or use taxes imposed thereon by any appropriate governmental authority.

 

Any one or more of the following shall constitute an " Event of Default " hereunder: (a) the failure to make any payment of principal and/or interest under this Note or any other obligation of any Obligor to Payee (i) within ten (10) days of when due, as to any regular payment and/or (ii) when due as to any payment due on demand, at maturity or by acceleration; (b) if any representation or warranty of any Obligor in any of the Loan Agreement, the Mortgage, the other Loan Documents, any endorsement, any guaranty, or in any certificate or statement furnished at any time thereunder or in connection therewith proves to be untrue or misleading in any material respect when made or furnished; (c) default which is not otherwise the subject of any other provision of this paragraph shall occur in the performance of any of the covenants or agreements of any Obligor contained in this Note, the Loan Agreement, the Mortgage, any guaranty, or any other Loan Document and such default is not capable of being cured, or if capable of being cured shall continue uncured to the reasonable satisfaction of Payee for a period of forty-five (45) days after written notice thereof from Payee to Maker, or such other lesser or greater period of time, if any, with or without notice as specifically set forth in the applicable document or instrument; provided, however, in the event that such default is capable of being cured but not within forty-five (45) days or such other greater or lesser curative with respect to the particular default, Maker shall have such additional time, not to exceed and additional fifteen (15) days within which to cure such default, provided that it commences such cure within the original curative period therefor and thereafter diligently prosecutes the same to completion; (d) the commencement of a proceeding by or against any Obligor for dissolution or liquidation, the voluntary or involuntary termination or dissolution of any Obligor or the merger or consolidation of any Obligor with or into another entity and, in the case of an involuntary proceeding only, such proceeding is not dismissed within sixty (60) days from the date of filing thereof; (e) the insolvency of, the business failure of, the appointment of a custodian, trustee, liquidator or receiver for or for any of the property of, the assignment for the benefit of creditors by, or the filing of a petition under bankruptcy, insolvency or debtor's relief law or the filing of a petition for any adjustment of indebtedness, composition or extension by or against any Obligor, and, in the case of an involuntary proceeding only, such proceeding is not dismissed within sixty (60) days from the date of filing thereof; (f)the failure of any Obligor to timely deliver such financial statements, including tax returns, other statements of condition or other information, as required by the Loan Agreementor as Payee shall request from time to time; (g) the entry of a judgment against any Obligor which Payee deems to be of a material nature, in Payee's sole discretion, which is not released or satisfied within forty-five (45) days of the entry thereof; (h) the seizure or forfeiture of, or the issuance of any writ of possession, garnishment or attachment, or any turnover order for any property of any Obligor, including without limitation the property encumbered by the Mortgage; (i) should Payee’s liens, mortgages or security interests in any of the collateral for this Note become unenforceable, or cease to be first priority liens, mortgages or security interests;(j) the determination by Payee that a material adverse change has occurred in the financial condition of Maker that has a material adverse effect on Maker, its business or the property encumbered by the Mortgage; or (k) the failure of Maker's business to comply with any law or regulation controlling its operation.

 

Upon the occurrence of an Event of Default, (a) Payee shall have the optional right to accelerate and declare as immediately due and payable in full the entire balance (principal, interest and all other charges due hereunder or under the Loan Documents) outstanding hereunder and all other obligations of any Obligor to Payee (however acquired or evidenced) and/or (b) to the extent permitted by law, the rate of interest on the unpaid principal shall be increased at Payee's discretion up to the Maximum Rate (as defined below), or if there shall cease to be a Maximum Rate at a simple interest rate of 25% per annum (the " Default Rate "). The provisions herein for a Default Rate shall not be deemed to extend the time for any payment hereunder or to constitute a "grace period" giving Obligors a right to cure any default. At Payee's option, any accrued and unpaid interest, fees or charges may, for purposes of computing and accruing interest on a daily basis after the due date of thisNote or any installment thereof, be deemed to be a part of the principal balance, and interest shall accrue on a daily compounded basis after such date at the Default Rate provided in this Note until the entire outstanding balance of principal and interest is paid in full. Payee is hereby authorized at any time to set off any charge against any deposit accounts of any Obligor, as well as any money, instruments, securities, documents, chattel paper, credits, claims, demands, income and any other property, rights and interests of any Obligor which at any time shall come into the possession or custody or under the control of Payee or any of its agents, affiliates or correspondents, without notice or demand, any and all obligations due hereunder. Additionally, Payee shall have all rights and remedies available under each of the Loan Documents, including without limitation foreclosure of the Mortgage, as well as all rights and remedies available at law or in equity. Any judgment rendered on this Note shall bear interest at the highest rate of interest permitted pursuant to Chapter 687, Florida Statutes .

The failure at any time of Payee to exercise any of its options or any other rights hereunder shall not constitute a waiver thereof, nor shall it be a bar to the exercise of any of its options or rights at a later date. All rights and remedies of Payee shall be cumulative and may be pursued singly, successively or together, at the option of Payee. The acceptance by Payee of any partial payment shall not constitute a waiver of any default or of any of Payee's rights under this Note. No waiver of any of its rights hereunder, and no modification or amendment of this Note, shall be deemed to be made by Payee unless the same shall be in writing, duly signed on behalf of Payee; each such waiver shall apply only with respect to the specific instance involved, and shall in no way impair the rights of Payee or the obligations of Obligor to Payee in any other respect at any other time.

This Note, the Loan Documents, and the rights and obligations of Maker and Payee shall be governed by and interpreted in accordance with the law of the State of Florida. In any litigation in connection with or to enforce this Note or any endorsement or guaranty of this Note or any Loan Documents (as defined in the Mortgage) , each Obligor irrevocably consents to and confers personal jurisdiction on the courts of the State of Florida or the United States located within the State of Florida and expressly waives any objections as to venue in any such courts. Nothing contained herein shall, however, prevent Payee from bringing any action or exercising any rights within any other state or jurisdiction or from obtaining personal jurisdiction by any other means available under applicable law.

 

 

Notwithstanding anything contained in this Note to the contrary, Payee shall never be deemed to have contracted for or be entitled to receive, collect or apply as interest on this Note, any amount in excess of the amount permitted and calculated at the Maximum Rate, and, in the event Payee ever receives, collects or applies as interest any amount in excess of the amount permitted and calculated at the Maximum Rate, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance of this Note, and, if the principal balance of this Note is paid in full, any remaining excess shall forthwith be paid to Maker. In determining whether or not the interest paid or payable under any specific contingency exceeds the Maximum Rate, Maker and Payee shall, to the maximum extent permitted under applicable law, (i) characterize any non-principal payment (other than payments which are expressly designated as interest payments hereunder) as an expense, fee, or premium, rather than as interest, (ii) exclude voluntary prepayments and the effect thereof, and (iii) spread the total amount of interest throughout the entire contemplated term of this Note. The term " Maximum Rate " shall mean, as to Payee, the maximum non usurious interest rate, if any, that at any time, or from time to time, may be contracted for, taken, reserved, charged, or received on the indebtedness evidenced by this Note under the laws which are presently in effect of the United States and the State of Florida applicable to Payee and such indebtedness or, to the extent permitted by applicable law, under such applicable laws of the United States and the State of Florida which may hereafter be in effect and which allow a higher maximum nonusuriousinterest rate than applicable laws now allow.

 

Time is of the essence hereunder.

 

Any notice to be given or to be served upon any party hereto shall be given as provided in the Mortgage.

 

In this Note, whenever the context so requires, the neuter gender includes the feminine and/or masculine, as the case may be, and the singular number includes the plural.

 

[Remainder of Page Intentionally Blank]

 

IN WITNESS WHEREOF , Maker has caused this Note to be executed in its name as of the day and year first above written.

 

 

DOCUMENTARY STAMP TAXES IN THE AMOUNT OF $ 12,572.00 HAVE BEEN PAID ON THE MORTGAGE SECURING THIS NOTE.

 

 

 

 

 

 

7

---

EXHIBIT 10.4

 

Prepared By and

When Recorded Return to:

W. Kent Ihrig, Esq.

101 East Kennedy Boulevard

Suite 2800

Tampa, Florida 33602

Phone: (813) 229-7600

 

ASSIGNMENT OF RENTS, LEASES, PROFITS AND CONTRACTS

Between:

BOVIE MEDICAL CORPORATION ,

a Delaware corporation

as " Assignor "

and

 

THE BANK OF TAMPA ,

 a Florida banking corporation

as " Assignee "

 

Loan Amount: $3,592,000.00

Date: March 20, 2014

 

 

ASSIGNMENT OF RENTS, LEASES, PROFITS AND CONTRACTS

THIS ASSIGNMENT OF RENTS , LEASES , PROFITS AND CON­TRACTS (the " Assignment ") made and executed this 20 th day of March , 2014, by and between Bovie Medical Corporation , a Delaware corporation, having an address of 5115 Ulmerton Road , Clearwater, Florida 33760 ( the " Assignor "), and The Bank of Tampa , a Florida banking corporation, having an address of Post Office Box One, Tampa , Florida 33601 (the " Assignee ").

W I T N E S S E T H :

WHEREAS , as of even date herewith, Assignee has made to Assignor and Assignor has borrowed from Assignee a certain loan (the " Loan ") in the principal amount of $3,592,000.00 , which Loan is evidenced and secured by Assignor's Promissory Note (as amended, modified, restated, increased, decreased or renewed, at any time or from time to time, the " Note ") in said sum, a Mortgage , Security Agreement , Financing Statement and Assignment of Rents (as amended, modified or restated at any time or from time to time, the " Mortgage "), this Assignment of Rents , Leases , Profits and Contracts, certain UCC-1 Financing Statements (the foregoing documents and instruments and all other documents or instruments executed and/or delivered in connection with the Loan, as amended, modified or restated at any time or from time to time, being referred to as the " Loan Documents "), which Loan is for the purposes of financing, and is secured by, certain real property located in Pinellas County, Florida , and more particularly described on Exhibit "A" attached hereto and by this reference made a part hereof (together with any improvements constructed or to be constructed thereon, the " Mortgaged Property "); and,

WHEREAS , the Assignor has agreed to and does execute this Assignment in connection with the Loan and for the purposes of securing the Secured Indebtedness (as such term is defined in the Mortgage) ;

NOW , THEREFORE , for and in consideration of the sum of $10.00, the Loan from Assignee to Assignor , and other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the Assignor covenants and agrees to and with the Assignee as follows:

1. Recitals . The foregoing recitals are true and correct and are hereby incorporated by reference for all purposes as if fully set forth herein.

 

2. A ssignment . The Assignor does hereby assign to Assignee all of its right, title and interest in, to and under, and does further hereby empower the Assignee, its agents or attorneys to collect, sue for, settle, compromise and give acquittances for all of the rents , income, receipts, revenues, issues and profits including, without limitation, minimum rents , additional rents , percentage rents , common area maintenance charges, parking charges (including monthly rental for parking spaces), tax and insurance premium contributions, and liquidated damages following default, premiums payable by any lessee upon the exercise of any cancellation privilege provided for in any of the Leases (as herein defined), and all proceeds payable under any policy of insurance covering the loss of rent resulting from untenantability caused by destruction or damage of the Mortgaged Property (collectively, the " Rents "), that may become due under, all leases now existing or hereafter made, including without limitation all modifications, amendments, or renewals thereof (collectively, the " Leases ") and avail itself of and pursue all remedies for the enforce­ment of the Leases and Assignor's rights in and under the Leases as the Assignor might have pursued but for this Assignment.

 

3. Warranties . The Assignor warrants that signed duplicates of the Leases shall be delivered to Assignee upon the execution thereof and said duplicates, as delivered to Assignee shall be true and correct duplicates, that Assignor has not here­tofore assigned or pledged the same or any interest therein, and in regard to presently existing Leases no default exists on the part of the lessees, or the Assignor, as lessor, in the perfor­mance on the part of either, of the terms, covenants, provisions or agreements in the Leases; that no Rents have been paid by any of the lessees for more than one (1) month in advance; and that the payment of the Rents has not been nor will be waived, released, reduced, discounted or otherwise discharged or compromised by the Assignor directly or indi­rectly or by assuming any lessee's obligations with respect to other premises.

 

 

4. Waiver Of Set-Off . The Assignor waives any rights of set-off which it may have against any such lessee.

 

5. Covenants Of Assignor . The Assignor agrees: (a) that the Leases shall remain in full force and effect irrespective of any merger of the interest of the lessor and lessee thereunder; and that it will not transfer or convey the title to the Mortgaged Property or any portion thereof to any of the lessees without requiring such lessees, in writing, to assume and agree to pay the debt secured hereby in accordance with the terms, covenants and conditions of the Note, the Mortgage and the other Loan Documents; provided, however , that the foregoing shall not be construed as authorization to any transfer by Assignor of any interest in the Mortgaged Property and any such transfer shall be subject to the provisions of the Mortgage relating thereto; (b) that if the Leases provide for the abatement of rent during repair of the demised premises by reason of fire or other casualty, the Assignor shall furnish rental insurance to the Assignee, the policies to be in an amount and form and written by such insurance com­panies as shall be satisfactory to the Assignee; (c) not to terminate, modify or amend the Leases or any of the terms thereof, or grant any conces­sions in connection therewith, either orally or in writing, or to accept the surrender thereof without the written consent of the Assignee and that any attempt at termination, modification, or amendment of the Leases without such written consent shall be absolutely null and void; (d) not to collect any of the Rents for more than one (1) month in advance of the time when the same become due under the terms thereof; (e) not to discount any future accruing Rents; (f) not to execute any other assignments of the Leases or any interest therein or any of the Rents; (g) to perform all of Assignor's covenants and agreements as lessor under the Leases and not to suffer or permit to occur any release of liability of the lessees or any rights to the lessees to withhold payment of rent; and to give prompt notice to the Assignee of any notice of default on the part of Assignor with respect to the Leases received from the lessees thereunder; and to furnish Assignee with complete copies of said notices; (h) if so requested by the Assignee, to enforce the Leases and all remedies available to the Assignor against the lessees in case of default under the Leases by the lessees; (i) that none of the rights or remedies of the Assignee under the Mortgage shall be delayed or in any way prejudiced by this Assignment; (j) that notwithstanding any variation of the terms of the Mortgage or any extension of time for payment thereunder or any release of part or parts of the Mortgaged Property from the lien and encumbrance thereof, the Leases, the Rents and benefits hereby assigned shall continue as additional security in accordance with the terms thereof; (k) not to alter, modify, amend or change the terms of any guaranties of any of the Leases or cancel or terminate such guaranties without the written consent of the Assignee; (l) not to request, consent to, agree to or accept a subordination of the Leases to any mortgage, deed of trust, security deed or other encumbrance now or hereaf­ter affecting the Mortgaged Property, except to the Assignee; (m) not to exercise any right of election, whether specifically set forth in any of the Leases or otherwise, which would in any way diminish the tenant's liability or have the effect of shortening the stated term of the respective Leases; and (n) not to sell, transfer, assign or remove any personal property owned by Assignor and encumbered by the Mortgage now or hereafter located on the Mortgaged Property, unless such action results in substitution or replacement with similar items owned by Assignor and not otherwise encumbered, of equal value, without the prior written consent of Assignee.

 

 

6. Income From Property; Other Encumbrances; No Other Assignments . As additional collateral and security for the payment of the Loan and for the performance of each and every of the covenants and agreements contained in the Mortgage and the other Loan Documents, including without limitation this Assignment, the Assignor sells, assigns, transfers, sets over and delivers unto the Assignee and agrees to and does hereby grant to the Assignee a first security interest in and to all present and future profits, income and issues from the Mortgaged Property, and each and every part and parcel thereof, and also all present and future right, title and interest of the Assignor under and by virtue of each and every franchise, license, permit, lease, contract for deed, reservation agreement, option agreement or purchase and sale agreements (" Purchase Agreements "), perma­nent loan commitments, or any other document or contractual right, written or verbal, covering any part or parcels of the Mortgaged Property whether any of such is now or hereafter made and any and all amendments to or modifica­tions, exten­sions or renewals of any of such. Assignor hereby warrants that there are no contracts for deed, purchase agreements, or Leases affecting the Mortgaged Property as of the day and year first above written nor shall there be any in existence on the date of recordation of the Mortgage and other instruments of security, except which are specifically described in a separate affidavit executed by Assignor in favor of Assignee of even date herewith. Assignor further warrants that it has not executed nor will it execute at any time during the term of the Loan any other assignments or instruments further encumbering the items described above, except as may be provided for in the Mortgage.

 

7. Rights Upon Default . The Assignee shall have the right to and may receive the Rents, issues, profits and income from said Mortgaged Property, including all Rents covered by this instrument or hereaf­ter made for appli­cation on the Secured Indebtednessonly if and in the event the Assignor defaults in, breaches or fails to perform any one or more of the covenants and agreements contained in (a) the Note, (b) the Mortgage, (c) this Assignment or (d) the other Loan Documents, and such is not cured within the applicable curative period, if any, specified in the applicable Loan Document (s) . In the event of any such default, breach or failure to perform which is not cured within the period as aforesaid, and the exercise of the Assignee of its right to receive such Rents, issues, profits and income, the amount so received prior to foreclosure sale, less all costs, fees and expenses of collection, including a reasonable attor­ney's fee, shall be applied on the Loan but any such default, breach or failure to perform, or the exercise by the Assignee of its right to receive the Rents, issues, profits and income, shall not prevent the Assignee from exercising any of its rights under the Loan Documents, including its right to foreclose any mortgage nor any of its other rights under this Assignment. Upon the occurrence of any such default, breach or failure to perform which is not cured within any applicable cura­tive period, as aforesaid, in addition to all rights, remedies contained herein and the rights and remedies provided for in Florida Statutes § 697.07, as amended from time to time, the Assignee shall have and may exercise from time to time any and all rights and remedies of a secured party under the Uniform Commercial Code of the State of Florida, as such Code is from time to time in effect, and any and all other rights and remedies available to it under any other applicable law, including but not limited to, the right to foreclose this Assignment and the Mortgage in the same proceedings. The security of this Assignment is and shall be primary and on a parity with the real estate encumbered by the Mortgage and not secondary.

 

8. Foreclosure . Upon issuance of a deed or deeds pur­suant to foreclosure of the Mortgage all right, title and interest of the Assignor in and to any and all franchises, licenses, permits, Leases, contracts for deed, reservation agreements, or purchase and sale agreements, or any other documents or contractual rights, shall, by virtue of this instrument, thereupon vest in and become the absolute property of the grantee or grantees in such deed or deeds without any further act or assignment by the Assignor. Assignor hereby irrevoca­bly appoints Assignee and its successors and assigns, as its agent and attorney-in-fact, to execute all instruments of assignment or further assurance in favor of such grantee or grantees and such deed or deeds as may be necessary or desirable for such purpose; however, nothing contained herein shall prevent Assignee from terminating any subordinate(d) lease through such foreclosure.

 

 

9. Taxes . If at any time any law shall be enacted imposing or authorizing the imposition of any tax upon this Assignment or the Mortgage, or upon any rights, titles, liens, or security interests created hereby or by the Mortgage, or upon the Loan, or any part thereof, Assignor shall pay immediately all such taxes to the extent permitted by law; provided that, if it is unlawful for Assignor to pay such taxes, then Assignor shall, if Assignee so requires, prepay the Loan in full within sixty (60) days after demand therefor by Assignee.

 

10. Indemnification; Attorneys' Fees . In the exercise of the powers herein granted the Assignee, no liability shall be asserted or enforced against the Assignee, all such liability being hereby expressly waived and released by the Assignor. The Assignee shall not be obligated to perform or discharge any obli­gation, duty or liability under the Leases or under or by reason of this Assignment and the Assignor shall and does hereby agree to indemnify the Assignee for and to defend and hold it harmless of and from any and all liability, loss or damage which it may or might incur under the Leases or under or by reason of this Assignment and of and from any and all claims and demands what­soever which may be asserted against it by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants or agreements contained in the Leases. Should the Assignee incur any such liability, loss or damage under the Leases or under or by reason of this Assignment or in the defense of any such claims or demands, the amount thereof including costs, expenses and reasonable attorney's fees shall be secured hereby and the Assignor shall reimburse the Assignee therefore immediately upon demand. Such attorney's fees and costs shall include but not be limited to fees and costs incurred in any phase of litigation including but not limited to all trials, proceedings and appeals and all appearances in and connected with any bankruptcy proceedings or creditors reorgani­zation proceedings or arbitration proceedings. Attorneys' fees shall also include hourly charges for paralegals, law clerks and other staff members operating under the supervision of an attorney and shall also include, without limitation, any allocated costs of Assignee’s in-house counsel to the extent permitted by applicable law. Any award or payment of attorneys' fees shall include any and all sales or use taxes imposed thereon by any governmen­tal authority.

 

11. Assignment Supplementary . This Assignment is intended to be supplementary to and not in substitution for or in derogation of any assignment of rents, profits or issues con­tained in the Mortgage or in any other document.

 

12. Extensions And Renewals of Leases . This Assignment shall include any extensions and renewals of the Leases, franchi­ses, licenses, permits, contracts for deed or purchase and sale agreements or any other documents or contractual rights and any reference hereto to the Leases, franchis­es, licenses, per­mits, contracts for deed or purchase and sale agreements or any other documents or contractual rights shall be construed as including any such extensions and renewals.

 

 

13. Binding Effect . This Assignment shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto. The words "Assignor", "Assign­ee", and "Lessees" wherever used herein, shall include the persons named herein and designated as such and their respec­tive suc­cessors and assigns and all words and phrases shall be taken to include the singular or plural and masculine, feminine or neuter gender, as may be grammatically required.

 

14. Remedies Cumulative . In the event that the Assignor defaults in, breaches or fails to perform any one or more of the covenants and agreements contained in this Assignment, such event shall constitute a default, breach or failure to perform under the Loan Documents. All of the rights of the Assignee hereunder shall be cumulative and not in limitation of the Assignee's rights under the terms of the Loan Documents.

 

15. Time of Essence . Time is of the essence of this Assignment.

 

16. Termination . This Assignment and all of its provi­sions shall terminate if and when the Assignee shall execute and record a satisfaction of the Mortgage in the public records of Pinellas County, Florida, otherwise the provisions hereof shall remain in full force and effect.

 

17. Headings . The paragraph headings contained herein are for convenience of reference only and shall not be used in the construction or interpretation hereof.

 

18. Governing Law . This Assignment shall be governed, interpreted and construed by, through and under the laws of the State of Florida , excepting, however , its laws or prin­ciples regarding conflicts of laws or choice of laws.

 

 

[Remainder of Page Intentionally Blank]

 

 

IN WITNESS WHEREOF , the Assignor hereto has caused this Assignment to be executed and delivered as of the date first stated above.

 

	Assignor :
Witnesses :
	BOVIE MEDICAL CORPORATION, a Delaware corporation
______________________________
______________________________	By:	_____________________________________
(Printed Name of Witness)		Robert L. Gershon , Chief Executive Officer
______________________________
______________________________
(Printed Name of Witness)

 

STATE OF FLORIDA

COUNTY OF PINELLAS

 

THE FOREGOING INSTRUMENT was acknowledged before me this ___ day of March, 2014, by Robert L. Gershon, as Chief Executive Officer of Bovie Medical Corporation, a Delaware corporation, on behalf of the corporation. He/she o is personally known to me or o has produced ___________________________, as identification.

 

		Notary Public
		(Printed Name)
My commission expires:
		(Rank or Serial Number)

 

Exhibit:

 

A—Legal Description of Mortgaged Property

 

 

EXHIBIT “A”

 

LEGAL DESCRIPTION OF MORTGAGED PROPERTY

 

Lot 9, in the Southeast 1/4 of Section 4, Township 30 South, Range 16 East, according to the plat of Pinellas Groves, Inc., recorded in Plat Book 1, Page 55, of the Public Records of Pinellas County, Florida, LESS the West 150 feet thereof and also LESS that part lying within 120 feet of survey line of State Road S-688, Section 15120, as described in Clerk's Instrument No. 260901B, Official Records Book 2081, Page 593, Pinellas County Records.

 

 

 

 

 

 7

EXHIBIT 10.5

 

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (the " Agreement ") is made and entered into this 20 th day of March, 2014, by and between Bovie Medical Corporation, a Delaware corporation, having an address of 5115 Ulmerton Road, Clearwater, Florida 33760 (" Debtor ") and The Bank of Tampa, a Florida banking corporation, having an address of Post Office Box One, Tampa, Florida 33601 (" Secured Party ").

W I T N E S S E T H:

WHEREAS , as provided in and pursuant to the terms of that certain Loan Agreement (as the same may be amended, modified, restated or supplemented at any time or from time to time, the “ Loan Agreement ”) dated on or about the date hereof between Secured Party and Debtor , Debtor is indebted to Secured Party in the principal amount of $3,592,000.00, as evidenced by Debtor ’s Promissory Note (as the same may be amended, modified, restated, renewed or increased at any time or from time to time, the “ Note ”), in said sum payable to the order of Secured Party and dated as of the same date as this Agreement , which Note is secured, inter alia , by that certain Mortgage , Security Agreement, Financing Statement and Assignment of Rents (as the same may be amended, modified, restated, or supplemented at any time or from time to time, the “ Mortgage ”), dated as of the same date as this Agreement , which Mortgage constitutes a lien and encumbrance against the real property described therein, together with various other Loan Documents (as such term is defined in the Mortgage ); and,

WHEREAS , in order to secure the Obligations (as herein defined), Secured Party is requiring that Debtor execute and deliver this Agreement granting a security interest in and to the collateral described herein upon the terms and conditions herein contained;

NOW , THEREFORE , for and in consideration of the foregoing recitals, the sum of $10.00, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto covenant and agree as follows:

1.   Recitals . The foregoing recitals are true and correct and are hereby incorporated by reference for all purposes as if fully set forth herein.

 

2.   Definitions . For the purposes of this Agreement, the following terms shall have the following meanings:

 

" Collateral " shall mean all of the following personal property of Debtor, wherever located, and now owned or hereafter acquired by the Debtor:

 

(a)   Accounts, including without limitation health-care-insurance receivables;

 

(b)   Chattel Paper, to the extent that the same constitute proceeds of the Accounts;

 

(c)   Documents, to the extent that the same constitute proceeds of the Accounts;

 

(d)   Instruments, including without limitation Promissory Notes, to the extent that the same constitute proceeds of the Accounts;

 

(e)   Letter-of Credit Rights, to the extent that the same constitute proceeds of the Accounts or to the extent that the same secure payment or performance of any Account;

 

(f)   Payment Intangibles, to the extent that the same constitute proceeds of the Accounts;

 

(g)   Supporting Obligations, to the extent that the same secure payment or performance of any Account;

 

 

(h)   All books and records relating to the conduct of Debtor 's business or relating to any of the foregoing;

 

(i)   To the extent not separately described above as original collateral, all proceeds and products of any of the foregoing.

 

“ Commodity Exchange Act ” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq .), as amended from time to time, and any successor statute.

" Debtor State " shall have the meaning ascribed to said term in subparagraph 5(e) hereof.

" Debtor's Chief Executive Office State " shall have the meaning ascribed to said term in subparagraph 5(e) hereof.

" Event of Default " shall have the meaning ascribed to said term in paragraph 8 hereof.

“ Excluded Swap Obligation ” shall mean, with respect to any guarantor of a Swap Obligation, and including the grant of a security interest to secure the guaranty of such Swap Obligation, any Swap Obligation if, and to the extent that, such Swap Obligation is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guaranty or grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Swap Obligation or security interest is or becomes illegal.

" Interest Rate Protection Agreement " shall mean any agreement between Debtor and Secured Party or any affiliate of Secured Party now existing or hereafter entered into, which provides for an interest rate, currency, equity, credit or commodity swap, cap, floor or collar, spot or forward foreign exchange transaction, cross currency rate swap, currency option, any combination of, or option with respect to, any of the foregoing or any similar transactions, for the purpose of hedging Debtor's exposure to fluctuations in interest rates, exchange rates, currency, stock, portfolio or loan valuations or commodity prices (including any such or similar agreement or transaction entered into by Secured Party or any affiliate thereof in connection with any other agreement or transaction between Debtor and Secured Party or any affiliate thereof ).

" Lien Reports " shall have the meaning ascribed to said term in subparagraph 4(b)hereof.

" Obligations " shall mean (i) all of Debtor's indebtedness, liabilities, or obligations under the Loan Agreement, the Note, the Mortgage, this Agreement, and any of the other Loan Documents; (ii) any indebtedness, liability or obligation of Debtor to Secured Party under any later or future advances or loans made by Secured Party to Debtor , any and all extensions or renewals thereof in whole or in part, and any and all future additional indebtednesses, liabilities or obligations of Debtor to Secured Party whatsoever and howsoever arising and in any event, whether existing as of the date hereof or hereafter arising, whether arising under a loan, lease, credit card arrangement, line of credit, letter of credit, any Interest Rate Protection Agreement (but specifically excluding any Excluded Swap Obligation , which Excluded Swap Obligations shall not be nor deemed to be included within the definition of Obligations or otherwise secured by this Agreement in any event), or other type of financing and whether direct, indirect, absolute or contingent, as maker, endorser, guarantor, surety or otherwise, and whether evidenced by, arising out of, or relating to, a promissory note , bill of exchange, check, draft, bond, letter of credit, guaranty agreement , bankers' acceptance, foreign exchange contract, commitment fee, service charge or otherwise ; (iii) the repayment of (a) any amounts that Secured Party may advance or spend for the maintenance or preservation of the Collateral and (b) any other expenditures the Secured Party may make under the provisions of this Agreement or for the benefit of the Debtor; (iv) all amounts owed under any modifications, renewals or extensions of any of the foregoing obligations; (v) all other amounts now or in the future owed by the Debtor to Secured Party; and (vi) any of the foregoing that arises after the filing of a petition by or against Debtor under the Federal Bankruptcy Code, even if the obligations cease to accrue as a result of the automatic stay under § 362 of the Federal Bankruptcy Code or otherwise.

 

" Permitted Liens " shall have the meaning ascribed to said term in subparagraph 5(d) hereof.

" Person " shall mean any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other form of entity.

“ Swap Obligation ” shall mean any obligation under or in connection with an Interest Rate Protection Agreement that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act, as amended from time to time.

 

" UCC " shall mean the Uniform Commercial Code as in effect in the state designated in paragraph 19hereof, as the state whose laws shall govern this Agreement, or in any other state whose laws are held to govern this Agreement or any portion hereof.

 

Any term not defined in this Agreement, but which is defined under the UCC, shall have the meaning given to said term in the UCC.

 

3.   Grant of Security Interest . The Debtor does hereby grant to the Secured Party a continuing security interest and lien of first priority in the Collateral for the purposes of securing the payment and performance in full of all Obligations .

 

4.   Perfection of Security Interests .

 

(a)   Debtor hereby authorizes Secured Party to file in each and every jurisdiction as Secured Party shall determine one or more financing statements (or a photocopy of this Agreement in substitution for a financing statement), continuation statements or amendments thereto as Secured Party shall at any time or from time to time determine, describing the Collateral as all assets of Debtor or words of similar effect, and otherwise containing such information as is required or is permissible to be contained in a financing statement filed pursuant to Article 9 of the UCC.

 

(b)   Secured Party shall receive, at Debtor's sole cost and expense, and prior to advancing any funds on the Obligations, an official report of each Filing Office of the Debtor State (collectively, the " Lien Reports "), indicating that Secured Party's interest is prior to all other security interests or other interests reflected in the Lien Reports, other than the Permitted Liens.

 

(c)   Debtor shall have possession of the Collateral, except to the extent otherwise expressly provided in this Agreement or where Secured Party elects, in its sole and absolute discretion, to perfect its security interest by possession in addition to or instead of filing of a financing statement. To the extent that any Collateral is in the possession of a third party, Debtor agrees that it shall join with Secured Party, and take such other steps as Secured Party shall require, in notifying, but also hereby authorizes Secured Party to directly notify without Debtor's joinder, the third party of Secured Party's security interest and obtaining an acknowledgment in such form as Secured Party shall require from the third party that it is holding the Collateral or such portion as is held by the third party for the benefit of the Secured Party and subject to the security interest granted herein and the operation of this Agreement.

 

 

(d)   Debtor agrees that it shall join with Secured Party, and take such other steps as Secured Party shall require, in obtaining "control" of any Letter-of-Credit Rights or Electronic Chattel Paper, with any agreements establishing control to be in form and substance satisfactory to Secured Party.

 

(e)   Debtor will not create any Chattel Paper without placing a legend on the Chattel Paper in such form as is acceptable to Secured Party indicating that Secured Party has a security interest in the Chattel Paper.

 

5.   Debtor 's Representations and Warranties . The Debtor represents and warrants to Secured Party , the following:

 

(a)   The Debtor has full right, power and authority to execute and deliver this Agreement and to grant the security interest in the Collateral as provided herein.

 

(b)   The execution, delivery and performance of this Agreement has been duly authorized by all necessary action appropriate to Debtor 's type of entity.

 

(c)   This Agreement has been duly executed and delivered by the Debtor and constitutes the legal, valid and binding obligation of the Debtor enforceable against the Debtor in accordance with its terms, except as may be limited by bankruptcy, reorganization, insolvency, moratorium, or other similar laws from time to time in effect affecting creditor's rights generally and by principles governing the availability of equitable remedies, and the grant of the security interest in the Collateral existing on the date hereof constitutes, and, as to subsequently acquired Collateral , will constitute, a valid and perfected first and prior security interest, superior to the rights of any other Person , in and to the Collateral , except as otherwise expressly provided herein.

 

(d)   Debtor owns, and will own, or has rights in or the power to transfer, the Collateral free from any setoff, claim, restriction, lien, security interest or encumbrance, except liens for taxes not yet due, the security interest granted pursuant to the terms hereof, and any liens set forth on Schedule 5 (d) attached hereto (the " Permitted Liens ").

 

(e)   Debtor's (i) chief executive office is located in the state identified in Schedule 5 (e) (" Debtor's Chief Executive Office State "), (ii) state of incorporation is the state identified in Schedule 5 (e) (" Debtor State "), and (iii) exact legal name is as set forth in the preamble to this Agreement.

 

(f)   None of the Collateral constitutes, or is proceeds of, "farm products" as defined in the UCC.

 

(g)   Except as disclosed on Schedule 5 (g) attached hereto, none of the account debtors in respect of any Accounts, Chattel Paper or Payment Intangibles and none of the obligors in respect of any Instruments included in the Collateral is or shall be a governmental entity subject to the Federal Assignment of Claims Act.

 

(h)   To the best of Debtor's knowledge, none of the account debtors under the Accounts, Chattel Paper or Payment Intangibles and none of the obligors under the Instruments have any right of setoff, counterclaim, or adjustment, or defense in connection with or relating to any such Account, Chattel Paper, Payment Intangible, or Instrument, and the enforcement thereof.

 

(i)   Each Account represents an amount owed to the Debtor as a result of a right to payment of a monetary obligation, whether or not earned by performance, for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of; for services rendered or to be rendered; for a policy of insurance issued or to be issued; for a secondary obligation incurred or to be incurred; for energy provided or to be provided; for the use or hire of a vessel under a charter or other contract; arising out of the use of a credit or charge card or information contained on or for use with the card; or as winnings in a lottery or other game of chance operated or sponsored by a state, governmental unit of a state, or Person licensed or authorized to operate the game by a state or governmental unit of a state.

 

 

(j)   Except as otherwise disclosed by Debtor to Secured Party in writing, Debtor has no knowledge of any fact, claim, or dispute, by any account debtor, or any third party, which may impair the validity of any Account, Chattel Paper, or Payment Intangible or by any obligor, or any third party, which may impair the validity of any Instrument or Supporting Obligation or make any part of any Account, Chattel Paper, Payment Intangible, Instrument or Supporting Obligation, uncollectible in accordance with its terms and face amount, to include, but not limited to, any dispute or claim as to price, terms, quality, quantity or delay in shipment. Should Debtor become aware of any fact, claim or dispute which may impair the validity of an Account, any Chattel Paper, any Payment Intangible, any Instrument, or any Supporting Obligation, or make any part of it uncollectible, Debtor will notify Secured Party immediately of this knowledge.

 

6.   Debtor's Covenants . Debtor covenants and agrees with Secured Party as follows:

 

(a)   Debtor will preserve its existence as the type of Person set forth in the preamble to this Agreement and not, in one or more transactions or in a series of related transactions, merge into or consolidate with any other Person, or sell all or substantially all of its assets.

 

(b)   Debtor will not change the state where it is located.

 

(c)   Debtor will not change its name without providing Secured Party with thirty (30) days' prior written notice.

 

(d)   Except for liens for taxes not yet due, the security interest granted pursuant to the terms hereof, and the Permitted Liens, Debtor shall keep the Collateral free from, and shall not otherwise pledge, mortgage, encumber or create, or suffer to exist, a security interest in the Collateral in favor of any Person other than Secured Party. Debtor shall defend title to the Collateral against all claims and demands of all persons at any time claiming the same or any interests therein adverse to Secured Party, except for the Permitted Liens.

 

(e)   The Collateral shall remain personal property at all times.

 

(f)   Debtor shall keep and maintain, at Debtor's sole cost and expense, complete books and records with respect to all of the Collateral. All of Debtor's books, accounts, correspondence, papers, and records pertaining to the Collateral are and shall be prepared and maintained in an accurate and timely fashion, and are and shall remain located at Debtor's Chief Executive Office.

 

(g)   At the request of Secured Party, at any time and from time to time, at Debtor's sole expense, Debtor shall execute and deliver or cause to be executed and delivered to Secured Party, such agreements, documents and instruments, including releases, terminations, waivers, consents and subordination agreements from mortgagees or other holders of security interests or liens, landlords, bailees, securities intermediaries, parties controlling any portion of the Collateral, or other third parties, and do or cause to be done such further acts as Secured Party, in its reasonable discretion, deems necessary to create, preserve, perfect or validate the security interest of Secured Party or the priority thereof in the Collateral and otherwise to effectuate the provisions and purposes of this Agreement.

 

(h)   The Secured Party may examine and inspect the books and records relating to or constituting a portion of the Collateral at any reasonable time, wherever located.

 

(i)   The Debtor will pay promptly when due all taxes and assessments upon the Collateral or upon this Agreement or other writing evidencing the Obligations, or any of them.

 

 

(j)   Debtor will notify Secured Party of any insolvency with respect to any account debtor under any of the Accounts, Chattel Paper or Payment Intangibles or any obligor on any Instrument as promptly as practical after the Debtor becomes aware of such insolvency. For purposes hereof, insolvency shall be deemed to have occurred when: (i) a general meeting of unsecured creditors shall be called by, or on behalf of, the account debtor or obligor; (ii) a voluntary or involuntary proceeding shall have been instituted in the United States Bankruptcy Court under any Chapter of the Federal Bankruptcy Code against the account debtor or obligor; (iii) a receiver is appointed for the whole or any part of the property of an account debtor or obligor; (iv) an account debtor or obligor, or a third party on behalf of the account debtor or obligor, shall have made a general offer of compromise, in writing, to such Person's creditors for less than such Person's indebtedness; (v) possession shall have been taken of an account debtor's or obligors assets under an assignment, deed of trust, or chattel mortgage for the benefit of such Person's creditors; (vi) a creditors' committee shall have been formed for the sole purpose of liquidation of an account debtor or obligor or such Person's assets; (vii) a sale in bulk is made of an account debtor's or obligor's property; (viii) an account debtor's or obligor's assets shall have been sold under a writ of execution or attachment, or a writ of execution shall have been returned unsatisfied against such Person; (ix) an account debtor or obligor shall have absconded; (x) an account debtor's or obligor's assets shall have been sold under a distraint or levy by any taxing authority, or by a landlord; or (xi) any act of bankruptcy or insolvency under the laws of any other jurisdiction shall be taken by or against any account debtor or obligor.

 

(k)   Debtor will at any time and from time to time upon the Secured Party's request deliver to the Secured Party any original Instruments, Chattel Paper, Payment Intangible, or Documents in the Debtor's possession relating to any of the Accounts, Chattel Paper, Instruments, Payment Intangibles, or other Collateral held or owned by the Debtor.

 

(l)   Secured Party shall have the right at any time or from time to time to enforce Debtor's rights against the account debtors and obligors.

 

(m)   Secured Party shall have the right at any time or from time to time, prior to and after the occurrence of an Event of Default, to require that Debtor enter into a "lockbox" or "blocked account" arrangement whereby Debtor shall notify any or all of the account debtors on the Accounts, Chattel Paper or Payment Intangibles of Debtor, or obligors on any instruments of which Debtor is obligee, all as Secured Party shall determine, to make payments directly to a post office box or address maintained by a collection agent designated by Secured Party, which collection agent may be Secured Party, all at Debtor's sole cost and expense, all pursuant to a "blocked account agreement" in form and substance as required by Secured Party, in its sole and absolute discretion.

 

(n)   Debtor will not sell, lease, exchange, assign, transfer, license, convey or otherwise dispose of, or grant any other security interest or lien in, any of the Collateral.

 

(o)   Debtor has the entire risk of loss of the Collateral.

 

(p)   Secured Party shall have no duty to collect any income accruing on the Collateral or to preserve any rights relating to the Collateral.

 

7.   Collateral Protection Expenses; Preservation of Collateral .

 

(a)   In its discretion, Secured Party may discharge taxes and other encumbrances at any time levied or placed on any of the Collateral (to the extent the validity or the amount thereof is not being contested in good faith by appropriate proceedings which stay the issuance of any attachment or levy with respect to the Collateral, provided that Debtor has made adequate reserves therefor), and pay any necessary filing fees. Debtor agrees to reimburse Secured Party on demand for any and all expenditures so made. Secured Party shall have no obligation to Debtor to make any such expenditures, nor shall the making thereof relieve Debtor of any Event of Default.

 

 

(b)   Anything herein to the contrary notwithstanding, Debtor shall remain liable under each contract or agreement comprised in the Collateral to be observed or performed by Debtor thereunder. Secured Party shall not have any obligation or liability under any such contract or agreement by reason of or arising out of this Agreement or the receipt by Secured Party of any payment relating to any of the Collateral, nor shall Secured Party be obligated in any manner to perform any of the obligations of Debtor under or pursuant to any such contract or agreement, to make inquiry as to the nature or sufficiency of any payment received by Secured Party in respect of the Collateral or as to the sufficiency of any performance by any party under any such contract or agreement, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to the Secured Party or to which the Secured Party may be entitled at any time or times.

 

8.   Events Of Default . The occurrence of any events or conditions described hereinbelow shall constitute an " Event of Default " hereunder, provided that any requirement for the giving of notice or the lapse of time, or both, has been satisfied; time is of the essence herein:

 

(a)   Debtor shall fail to make any payment of principal and/or interest due on the Note when due (after the running of any applicable grace period).

 

(b)   Debtor shall fail to make any payments of principal and/or interest on any of the Obligations when due (after the running of any applicable grace period).

 

(c)   Debtor shall make any representation or warranty in this Agreement, the Loan Agreement, the Mortgage or in any of the other Loan Documents or in any certificate or statement furnished at any time hereunder or in connection with any of the Loan Documents which proves to have been untrue or misleading in any material respect when made or furnished.

 

(d)   Debtor shall default in the observance or performance of any covenant or agreement contained in this Agreement, the Loan Agreement, the Mortgage, or in any of the other Loan Documents and the same shall not be cured within any applicable curative period.

 

(e)   Debtor shall default in connection with any agreement for borrowed money or other credit with any creditor other than Secured Party which entitles said creditor to accelerate the maturity thereof.

 

(f)   Debtor shall file a voluntary petition in bankruptcy or a voluntary petition or answer seeking liquidation, reorganization, arrangement, readjustment of its debts, or for any other relief under the Federal Bankruptcy Code, or under any other act or law pertaining to insolvency or debtor relief, whether state, federal or foreign, now or hereafter existing; Debtor shall enter into any agreement indicating such Person's consent to, approval of, or acquiescence in, any such petition or proceeding; Debtor shall apply for or permit the appointment by consent or acquiescence of a receiver, custodian or trustee of Debtor or a substantial part of Debtor's property; Debtor shall make an assignment for the benefit of creditors; or Debtor shall be unable or shall fail to pay its debts generally as such debts become due; or Debtor shall admit, in writing, its inability or failure to pay its debts generally as such debts become due.

 

(g)   There shall have been filed against Debtor an involuntary petition in bankruptcy or seeking liquidation, reorganization, arrangement, readjustment of its debts, or for any other relief under the Federal Bankruptcy Code, or under any other act or law pertaining to insolvency or debtor relief, whether state, Federal or foreign, now or hereafter existing; Debtor shall suffer or permit the involuntary appointment of a receiver, custodian or trustee of Debtorfor all or a substantial part of Debtor’s property; Debtor shall suffer or permit the issuance of a warrant of attachment, execution or similar process against all or any substantial part of the property of Debtor; and in the case of an involuntary proceeding only, such involuntary proceeding is not dismissed within ninety (90) days from the date of the filing thereof.

 

(h)   Debtor shall have concealed, removed, or permitted to be concealed or removed, any of Debtor's assets, with intent to hinder, delay or defraud its creditors or any of them, or made or suffered a transfer of any of Debtor's assets which may be fraudulent under any bankruptcy, fraudulent conveyance or similar law, or shall have suffered or permitted, while insolvent, any creditor to obtain a lien upon any of Debtor's assets through legal proceedings or otherwise.

 

 

(i)   The entry of a judgment against Debtor which Secured Party deems to be of a material nature, in Secured Party’s sole discretion, which is not released or satisfied within thirty (30) days of the entry thereof.

 

(j)   Debtor shall transfer or otherwise dispose of any of the Collateral, except to the extent expressly permitted herein.

 

(k)   Any attachment, execution or levy shall occur on or with respect to any of the Collateral.

 

(l)   Debtor shall fail to comply with, or become subject to any administrative or judicial proceeding under any federal, state or local (i) law, ordinance, rule or regulation relating to the environment or the generation, use, transport or storage of hazardous waste, (ii) asset forfeiture or similar law which can result in the forfeiture of property, or (iii) other law, noncompliance with which shall have any significant effect on all or any portion of the Collateral.

 

(m)   Secured Party shall receive at any time following the date hereof a Lien Report indicating that Secured Party's security interest is not prior to all other security interests or other interests reflected in said Lien Report, other than the Permitted Liens.

 

9.   Remedies . Upon the occurrence of any Event of Default, or at any time thereafter, without prejudice to the rights of Secured Party to enforce its claims against Debtor for damages for failure by Debtor to fulfill any of its obligations hereunder, subject only to prior receipt by Secured Party of payment in full of all Obligations then outstanding and in form acceptable to Secured Party, Secured Party in addition to all rights and remedies which it may have under the Loan Agreement, the Note, the Mortgage, the other Loan Documents, at law or in equity, shall have the following rights and remedies:

 

(a)   Secured Party, at its option, may declare all of the Obligations (including but not limited to the indebtedness evidenced by the Note) to be immediately due and payable, whereupon the same shall become immediately due and payable without presentment, demand, protest, notice of non-payment or any other notice required by law relative thereto, all of which are hereby expressly waived by Debtor, anything contained herein to the contrary notwithstanding. Thereafter, Secured Party, at its option, may but shall not be obligated to, accept less than the entire amount of Obligations due, if tendered, provided, however , that unless then agreed to in writing by Secured Party, no such acceptance shall or shall be deemed to constitute a waiver of any Event of Default or a reinstatement of any commitments of Secured Party hereunder.

 

(b)   Secured Party may, without demand or notice, appropriate any deposit account , money or other assets of Debtor in the possession of, or under control by, Secured Party and set off against and apply the same to the Obligations .

 

(c)   Secured Party shall have the rights and remedies of a secured party under the UCC in effect on the date thereof (regardless of whether the same has been enacted in the jurisdiction where the rights or remedies are asserted), including without limitation, the right to take possession of any personal property or the proceeds thereof, to sell or otherwise dispose the same, to apply the proceeds therefrom to any of the Obligations in such order as Secured Party, in its sole discretion, may elect and otherwise in accordance with the terms hereof. Secured Party shall give Debtor written notice of the time and place of any public sale of the Collateral or the time there after which any other intended disposition thereof is to be made. The requirement of sending reasonable notice shall be met if such notice is given to Debtor pursuant to the terms hereof at least ten (10) days before such disposition. Expenses of retaking, holding, insuring, preserving, protecting, preparing for sale or selling or the like with respect to the Collateral shall include, in any event, reasonable attorneys' fees and other legally recoverable collection expenses, all of which shall constitute Obligations.

 

 

(d)   Secured Party may take the Collateral or any portion thereof into its possession, by such means (without breach of the peace) and through agents or otherwise as it may elect (and, in connection therewith, demand that Debtor assemble the Collateral at a place or places and in such manner as Secured Party shall prescribe), and, without taking possession, sell, lease or otherwise dispose of the Collateral or any portion thereof in its then condition or following any commercially reasonable preparation or processing, provided, however, that Secured Party shall have no obligation to prepare or otherwise clean-up the Collateral for disposition, which disposition may be by public or private proceedings, by one or more contracts, as a unit or in parcels, at any time and place and on any terms, in accordance with the terms of the UCC.

 

(e)   Secured Party shall be entitled to require Debtor to notify, any and all account debtors on the Accounts , Chattel Paper and/or Payment Intangibles of Debtor and obligors on any Instruments for which Debtor is an obligee of the security interest of Secured Party in any of the Accounts , any Chattel Paper , any Payment Intangible and/or any Instrument and that payment thereof is to be made directly to Secured Party or any agent or nominee of Secured Party , and Secured Party may itself, without notice or demand upon Debtor , so notify account debtors and obligors as herein contemplated. After the making of any request upon Debtor to so notify account debtors and obligors as herein provided, Debtor shall hold any proceeds of collection of any Accounts , Chattel Paper , Payment Intangibles and Instruments received by Debtor as trustee for Secured Party without commingling the same with other funds of Debtor and shall turn the same over to Secured Party in the identical form received, together with any necessary endorsements or assignments. Secured Party shall apply proceeds of collection of any Accounts , Chattel Paper , Payment Intangibles and Instruments received by Secured Party to the Obligations , such payments to be entered after final payment in cash or solvent credits of the items giving rise to them.

 

(f)   Unless and except to the extent expressly provided for to the contrary herein, the rights of Secured Party specified herein shall be in addition to, and not in limitation of, Secured Party's rights at law or in equity, under the UCC, or under any other provision of any of the Mortgage or the other Loan Documents or under the provisions of any other document, instrument or other writing executed by Debtor or any third party in favor of Secured Party, all of which may be exercised successively or concurrently.

 

10.   Further Assurances . Debtor, at its own expense, shall do, make, execute and deliver all such additional and further acts, things, deeds, assurances and instruments as Secured Party may require more completely to vest in and assure to Secured Party its rights hereunder or in any of the Collateral, including, without limitation, (i) executing, delivering and, where appropriate, filing financing statements and continuation statements under the UCC, (ii) using its best efforts to obtain governmental and other third party consents and approvals, (iii) using its best efforts to obtain waivers from mortgagees and landlords, (iv) obtaining acknowledgments of Secured Party's security interest with respect to any Collateral which is in the possession or control of third parties, or (v) obtaining control with respect to any portion of the Collateral which is Letter-of-Credit Rights or Electronic Chattel Paper.

 

11.   No Waiver, etc . Debtor waives demand, notice, protest, notice of acceptance of this Agreement, notice of leases entered into, loans made, credit extended, Collateral received or delivered or other action taken in reliance hereon and all other demands and notices of any description. With respect to both the Obligations and the Collateral, Debtor assents to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of or failure to perfect any security interest in any Collateral, to the addition or release of any party or Person primarily or secondarily liable, to the acceptance of partial payment thereon and the settlement, compromising or adjusting of any thereof, all in such manner and at such time or times as the Secured Party may deem advisable. Secured Party shall have no duty as to the collection or protection of the Collateral or any income thereon, nor as to the preservation of rights against other Persons, nor as to the preservation of any rights pertaining thereto beyond the safe custody thereof as set forth in subparagraph 7(b)hereof. Secured Party shall not be deemed to have waived any of its rights upon or under the Obligations or the Collateral unless such waiver shall be in writing and signed by Secured Party. No delay or omission on the part of Secured Party in exercising any right shall operate as a waiver of such right or any other right. A waiver on any one occasion shall not be construed as a bar to or waiver of any right on any future occasion. All rights and remedies of the Secured Party with respect to the Obligations or the Collateral, whether evidenced hereby or by any other instrument or papers, shall be cumulative and may be exercised singularly, alternatively, successively or concurrently at such time or at such times as Secured Party deems expedient.

 

 

12.   No Marshaling . Secured Party shall not be required to marshal any present or future collateral security (including but not limited to this Agreement and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of the rights of Secured Party hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights, however existing or arising. To the extent that it lawfully may, Debtor hereby agrees that it will not invoke any law relating to the marshalling of collateral which might cause delay in or impede the enforcement of the Secured Party's rights under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, Secured Party hereby irrevocably waives the benefits of all such laws.

 

13.   No Obligation to Pursue Others . Secured Party shall have no obligation to attempt to satisfy the Obligations by collecting them from any other Person liable thereon and Secured Party may release, modify or waive any collateral provided by any other Person to secure any of the Obligations, all without affecting Secured Party's rights against Debtor. Debtor hereby waives any right it may have to require Secured Party to pursue any third person, including without limitation any Guarantor, for any of the Obligations.

 

14.   Compliance with Other Laws . Secured Party shall be entitled to comply with any applicable state or federal law or requirements in connection with any disposition of the Collateral and compliance therewith will not be considered adversely to affect the commercial reasonableness of any sale of all or any portion of the Collateral.

 

15.   Warranties . Secured Party may sell or otherwise dispose of all or any portion of the Collateral without warranty and Secured Party may specifically disclaim any and all warranties of title or like warranties. Any such sale made without warranty, including without limitation any warranty or title or like warranty, shall not be considered adversely to affect the commercial reasonableness of any sale of all or any portion of the Collateral.

 

16.   Sales on Credit . In the event that Secured Party sells or otherwise disposes of all or any portion of the Collateral upon credit, Debtor will be credited only to the extent of payments actually made by the purchaser or other acquirer of such Collateral, received by Secured Party and applied to the Obligations. In the event that such purchaser or other acquirer fails to pay for the Collateral sold upon credit in full, the Secured Party may resell or otherwise dispose of the Collateral and Debtor shall be credited with the proceeds of such sale to the extent hereinabove provided.

 

17.   Purchases by Secured Party . In the event that Secured Party purchases any portion of the Collateral at any sale or other disposition made pursuant to the terms hereof, Secured Party shall be entitled to credit some or all of the Obligations to said purchase, as it shall deem appropriate.

 

18.   Proceeds of Dispositions; Expenses . Debtor shall pay to Secured Party on demand any and all expenses, including reasonable attorneys' fees and disbursements, incurred or paid by Secured Party in protecting, preserving or enforcing Secured Party's rights under or in respect of any of the Obligations or any of the Collateral. After deducting all of said expenses, the residue of any proceeds of collection or sale of the Obligations or Collateral shall, to the extent actually received in cash, be applied to the payment of the Obligations in such order or preference as Secured Party shall determine, proper allowance and provision being made for any Obligations not then due. Upon the final payment and satisfaction in full in cash of all of the Obligations and after making any payments required by the UCC, any excess shall be returned to Debtor, and Debtor shall remain liable for any deficiency in the payment of the Obligations.

 

 

19.   Governing Law; Consent to Jurisdiction . This Agreement shall be governed, interpreted and construed by, through and under the laws of the State of Florida, except, however, its laws or principles regarding conflicts of laws or choice of laws, and except to the extent that the UCC provides for the application of the law of the Debtor States. Each party hereto irrevocably submits to the jurisdiction of any state or federal court sitting in Pinellas County, Florida, for any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, and each party irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in such state or federal court.

 

20.   Notices . Any notice or demand under or pursuant to this Agreement shall be made to the parties at the addresses set forth below and shall be deemed delivered when a record has been (a) deposited in any United States postal receptacle, postage prepaid, properly addressed to the intended recipient, (b) shipped by private express carrier of national reputation, shipment charges prepaid, and properly addressed to the intended recipient, (c) received by telecopy, (d) received via electronic transmission via the Internet, or (e) personally delivered. Notwithstanding the foregoing, all requests under Florida Statutes §679.210 (i) shall be made in a writing signed by An officer of Debtor, (ii) shall be personally delivered, sent by registered or certified U.S. mail, return receipt requested, or by private express carrier of national reputation, (iii) shall be deemed to be sent when received by the Secured Partyand (iv) shall otherwise comply with the requirements of Florida Statutes § 679.210. Notices shall be sent to the following addresses:

 

If to Secured Party :	The Bank of Tampa Post Office Box One Tampa, Florida 33601   Attention: David E. Brown, Senior Vice President Phone: (813) 998-2702 Telecopy: (813) 998-2668 Internet e-mail: dbrown@bankoftampa.com
With a copy to :	Shumaker, Loop & Kendrick, LLP 101 East Kennedy Boulevard Suite 2800 Tampa, Florida 33602   Attention: W. Kent Ihrig, Esq. Phone: (813) 229-7600 Telecopy: (813) 229-1660 Internet e-mail: kihrig@slk-law.com
If to Debtor :	Bovie Medical Corporation 5115 Ulmerton Road Clearwater, Florida 33760   Attention: Robert L. Gershon, Chief Executive Officer Phone: (___) ___-____ Telecopy: (___) ___-____ Internet e-mail: __________________

 

21.   Rights and Remedies Cumulative . The rights, powers and remedies of the Secured Party herein provided are cumulative and not exclusive of any rights, powers or remedies which the Secured Party would otherwise have.

 

 

22.   Indemnity . The Debtor shall indemnify the Secured Party and save harmless the Secured Party from and against any liability, cost (including reasonable attorneys' fees) or damage which it may incur as a result of Debtor 's acts or omissions in connection with this Agreement and the security interest granted hereby, including, without limitation, any such liability, cost or damage it may incur in connection with the exercise, performance or preservation of any of its rights, powers and remedies set forth herein or otherwise available under law (except for any liability, cost or damage arising from the Secured Party 's gross negligence or willful misconduct) as a result of Debtor 's acts or omissions.

 

23.   Binding Effect . This Agreement shall be binding upon the Debtor and its successors and assigns and shall inure to the benefit of the Secured Party and its successors and assigns, provided, however , the Debtor may not, without the prior written consent of the Secured Party , assign any of its rights or obligations hereunder to any Person. All agreements, representations and warranties made herein by the Debtor shall survive the execution and delivery of this Agreement .

 

24.   Continuing Nature . This Agreement is a continuing one and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon.

 

25.   Paragraph Headings . The paragraph headings used herein are for convenience of reference only and are not to be used in the construction or interpretation hereof.

 

26.   Singular/Plural; Gender . Whenever herein the singular number is used, the same shall include the plural where appropriate, and vice versa and words of any gender shall include each other gender where appropriate.

 

27.   Integration . This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof, and all prior negotiations, understandings and agreements are superseded by this Agreement.

 

28.   Severability . If and to the extent that any provision of this Agreement is held to unenforceable or invalid, the remaining terms and provisions of this Agreement shall be enforced without reference to said unenforceable or invalid provision, it being the intent of the parties that the provisions hereof are and shall be severable.

 

29.   Modifications . Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing, signed by the party against whom enforcement of the change, waiver, discharge or termination is sought.

 

30.   Time of Essence . Time is of the essence of this Agreement and of each provision hereof.

 

31.   Counterparts . This Agreement may be executed in one or more counterparts, each of which when executed and delivered shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Any party may execute this Agreement by executing any of such counterparts.

 

32.   Exhibits; Schedules . All exhibits or schedules attached to this Agreement are an integral part hereof and are hereby incorporated herein by this reference.

 

[Remainder of Page Intentionally Blank]

 

 

IN WITNESS WHEREOF, the parties, intending to be legally bound hereby, have executed and delivered this Agreement as of the day and year first above written.

 

 

		" Debtor "
Witnesses :
		BOVIE MEDICAL CORPORATION,
		a Delaware corporation
______________________________
______________________________
(Printed Name of Witness)		By:	______________________________________
			Robert L. Gershon , Chief Executive Officer
______________________________
______________________________
(Printed Name of Witness)

 

[Remainder of Page Intentionally Blank]

 

 

		" Secured Party "
Witnesses :
		THE BANK OF TAMPA,
		a Florida banking corporation
______________________________
______________________________
(Printed Name of Witness)		By:	______________________________________
			David E. Brown, Senior Vice President
______________________________
______________________________
(Printed Name of Witness)

 

 

Schedule 5(d) --Permitted Liens

 

 

 

 

 

 

 

 

 

Schedule 5(e)—Debtor Chief Executive Office and Debtor State

Debtor's Chief Executive Office:

 

	5115 Ulmerton Road Clearwater, Florida 33760
Debtor State:	Delaware

 

 

 

 

 

Schedule 5(g)—Account Debtors or Obligors

Subject to Federal Assignment of Claims Act

 

 

 

 

 

17

EXHIBIT 10.6

 

ENVIRONMENTAL INDEMNITY AGREEMENT

THIS ENVIRONMENTAL INDEMNITY AGREEMENT (the " Agreement ") is made and entered into this 20 th day of March , 2014 , by Bovie Medical Corporation , a Delaware corporation ( " Indemnitor ") in favor and for the benefit of The Bank of Tampa , a Florida banking corporation (t he " Indemnitee ").

W I T N E S S E T H:

WHEREAS , as of even date herewith, Indemnitee has made to Indemnitor and Indemnitor has borrowed from Indemnitee a certain loan (the " Loan ") in the principal amount of $ 3,592,000.00 , which Loan is evidenced and secured by Indemnitor's Promissory Note (as amended, modified, restated, increased, decreased or renewed, at any time or from time to time, the " Note ") in said sum, a Mortgage , Security Agreement , Financing Statement and Assignment of Rents (as amended, modified or restated at any time or from time to time, the " Mortgage "), an Assignment of Rents, Leases , Profits and Contracts, certain UCC-1 Financing Statements (the foregoing documents and instruments and all other documents or instruments executed and/or delivered in connection with the Loan, as amended, modified, or restated at any time or from time to time, being referred to as the " Loan Documents "), which Loan is for the purposes of financing, and is secured by, certain real property located in Pinellas County, Florida , and more particularly described on Exhibit "A" attached hereto and by this reference made a part hereof (together with any improvements constructed or to be constructed thereon, the " Premises "); and,

WHEREAS , to induce Indemnitee to grant or extend the Loan to Indemnitor, Indemnitee is requiring that Indemnitor execute and deliver this Agreement as a condition of said Loan;

NOW, THEREFORE , for and in consideration of the sum of Ten Dollars ($10.00), Indemnitee's extension of credit to Indemnitor, and other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Recitals . The foregoing recitals are true and correct and are hereby incorporated by reference for all purposes.

 

2. Definitions . In addition to the various definitions as contained in the preamble and recitals of this Agreement, as well as those terms which are defined elsewhere in this Agreement, the following terms, as used in this Agreement, shall have the meanings indicated, unless the context otherwise demands:

 

" CERCLA " shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 USC §§9601, et seq .), as amended from time to time, including without limitation, the Superfund Amendments and Reauthorization Act (" SARA ").

" CERCLIS " shall mean the Comprehensive Environmental Response, Compensation and Liability Information System, or any other information system, established pursuant to CERCLA or any other Environmental Law or Environmental Regulation.

" Environmental Law " shall mean any federal, state or local law, statute, code, ordinance, or common law, whether now in existence or established or enacted in the future, relating to pollution, protection of the environment, health, industrial hygiene, Hazardous Substances (including, without limitation, the manufacture, generation, distribution, use, treatment, storage, disposal, transport or handling thereof) or relating to above ground or underground storage tanks, including but not limited to CERCLA, SARA, the Solid Waste Disposal Act, as amended by RCRA and the Solid and Hazardous Waste Amendments of 1984, the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, the Clean Air Act of 1966, as amended, the Toxic Substances Control Act of 1976, the Occupational Safety and Health Act of 1970, as amended, the Emergency Planning and Community Right-to-Know Act of 1986, the National Environmental Policy Act of 1975, RCRA, the Florida Resource Recovery and Management Act ( Florida Statutes §§403.701, et seq .), and the Pollutant Spill Prevention and Control Act ( Florida Statutes §§376.011 through 376.17 and 376.19 through 376.21), and any and all amendments to any of the foregoing.

 

" Environmental Regulation " shall mean any regulation or rule promulgated by any Environmental Regulator pursuant to any Environmental Law or otherwise.

" Environmental Regulator " shall mean any federal, state or local governmental or quasi-governmental unit, body or agency which regulates, or is charged with regulating, the environment or Hazardous Substances or which is charged with enforcing any Environmental Law or promulgating Environmental Regulations, including, without limitation, the Environmental Protection Agency (" EPA "), or the Florida Department of Environmental Protection (" FDEP ").

" Hazardous Substance " shall mean, without limitation, one or more of the following substances:

(i) Those substances included within the definition of "hazardous substances," "hazardous materials," "hazardous wastes", "toxic substances," "solid waste," "pollutants," "contaminants," or "nuclear or byproduct material" in CERCLA, SARA, RCRA, the Toxic Substances Control Act, as amended, the Federal Insecticide, Fungicide and Rodenticide Act, as amended, the Hazardous Materials Transportation Act, as amended, the Solid Waste Disposal Act, as amended, the Atomic Energy Act of 1954, as amended, and in any Environmental Regulations promulgated pursuant to said laws;

 

(ii) Those substances listed in the United States Department of Transportation Table (49 CFR 172.101, as amended) or by the EPA (or any successor agency) as hazardous substances (40 CFR Part 302, as amended) or by FDEP or any other Environmental Regulator as hazardous substances;

 

(iii) Such other substances, materials and wastes which are or become regulated under any Environmental Law, Environmental Regulation or any other federal, state or local law, rule or regulation; and

 

(iv) Any asbestos, polychlorinated biphenyls, petroleum products and distillates, and other solid, semi-solid, liquid or gaseous substances which are toxic, ignitable, explosive, corrosive, carcinogenic or otherwise dangerous to human, plant or animal health and well being.

" National Priorities List " shall mean the National Priorities List established pursuant to CERCLA or any other list identifying hazardous or toxic waste sites maintained or controlled by any Environmental Regulator.

" RCRA " shall mean the Resource Conservation and Recovery Act of 1976 (42 USC §§6901, et seq .), as amended from time to time.

3. Representations and Warranties . Indemnitor represents and warrants, after all due inquiry and investigation, that:

 

(a) The Premises have not been in the past nor are they presently being used for the storage or generation of any Hazardous Substance in violation of applicable Environmental Laws, Environmental Regulations, orders of Environmental Regulators, or permits issued by any Environmental Regulator.

 

 

(b) To Indemnitor’s knowledge, no Hazardous Substance has been released or disposed of on the Premises or any part thereof in violation of applicable Environmental Laws, Environmental Regulations, orders of Environmental Regulators or permits issued by Environmental Regulators.

 

(c) To Indemnitor’s knowledge, there are no underground storage tanks or storage facilities located in or on the Premises or any part thereof in violation of Environmental Laws, Environmental Regulations, orders of Environmental Regulators or permits issued by Environmental Regulators.

 

(d) There are no known violations on the Premises of any Environmental Laws or Environmental Regulations.

 

(e) Indemnitor has obtained all permits and/or licenses from Environmental Regulators necessary or required in order to conduct its operations as now conducted. A schedule of all such presently existing permits and/or licenses is attached hereto as Exhibit "B" and by this reference made a part hereof, which schedule accurately sets forth the type of permit or license, the issuing agency, the issuance date and the expiration date, if any. Indemnitor has provided to Indemnitee true and correct copies of all such permits and/or licenses and all of same are in full force and effect.

 

(f) The Premises are unencumbered by the lien of any Environmental Regulator or any third party for clean-up costs, damages or other costs pursuant to any Environmental Law or Environmental Regulation.

 

(g) Indemnitor has received no notice from any Environmental Regulator of any response action pursuant to any Environmental Law or Environmental Regulation with regard to the Premises or any other properties owned, operated or controlled by Indemnitor.

 

(h) No Environmental Regulator has sought to impose or enforce any fine, penalty, assessment, cost, forfeiture or imposition against Indemnitor or any person occupying, or operating any improvement or facility on the Premises or any part thereof for violation of, or non-compliance with, any Environmental Laws or Environmental Regulations, nor has any Environmental Regulator sought to impose a lien or claim of lien against the Premises, any part thereof, or any other properties owned, operated or controlled by Indemnitor.

 

(i) Neither the Premises nor any other properties owned, operated or controlled by Indemnitor, jointly or severally, are listed on the National Priorities List or with CERCLIS.

 

(j) No permit is or has been required from or by any Environmental Regulator for the use, maintenance or operation of any improvement or facility on, or which is a part of, the Premises, other than as specifically disclosed in Exhibit "B" attached hereto.

 

(k) No summons, citation, order directing compliance or inquiry has been made or given by any Environmental Regulator to Indemnitor.

 

(l) No Environmental Regulator or any third party has demanded any right of recovery nor brought or, to Indemnitor’s knowledge, threatened to bring any action, cause of action, suit or proceeding seeking recovery for payment or reimbursement for clean-up costs, damages or other costs incurred under or pursuant to any Environmental Law or Environmental Regulation.

 

 

(m) To the best of Indemnitor's knowledge and belief no properties adjoining or abutting the Premises (i) have been used for the storage, generation, release or disposal of any Hazardous Substance in violation of applicable Environmental Laws, Environmental Regulations, orders of any Environmental Regulator or permits issued by any Environmental Regulator, (ii) are subject to the lien of any Environmental Regulator or any third party for clean-up costs, damages or other costs pursuant to any Environmental Law or Environmental Regulation, (iii) are or have been the subject of any response action pursuant to any Environmental Law or Environmental Regulation, (iv) are listed on the National Priorities List or with CERCLIS, (v) are under or covered by any permit issued by any Environmental Regulator for the use, operation or maintenance of any improvement or facility located thereon or (vi) are the subject of any summons, citation, order directing compliance or inquiry of any Environmental Regulator.

 

(n) Any independent investigation by Indemnitee of any facts warranted above shall in no way diminish the reliance by Indemnitee upon the warranties and representations made by Indemnitor herein.

4. Covenant Not To Store Hazardous Substances In Violation of Law . Indemnitor covenants and agrees that it will not, at any time, use, operate, or maintain the Premises, or any part or parcel thereof, for (i) the storage, generation, release or disposal of any Hazardous Substance of any kind in violation of Environmental Laws or Environmental Regulations, orders of Environmental Regulators or permits issued by Environmental Regulators, (ii) any purpose that would give rise to a response action, to the imposition of any fine, penalty, assessment, cost, forfeiture or imposition for violation of Environmental Laws or Environmental Regulations or to a claim, claim of lien or lien against the Premises, any part or parcel thereof, Indemnitee, Indemnitee's properties, Indemnitor or Indemnitor's properties for clean-up costs, damages or other costs pursuant to any Environmental Law or Environmental Regulation, or (iii) any purpose that would cause the Premises to be listed on the National Priorities List or with CERCLIS. Indemnitor further agrees that it will not use, operate or maintain any other properties owned, operated or controlled by Indemnitor for the foregoing purposes and which would give rise to a claim, claim of lien or lien against the Premises or any part or parcel thereof. From time to time at the request of Indemnitee, Indemnitor(and such of Indemnitor's principals, officers, directors [if Indemnitor is a corporation], general partners [if Indemnitor is a partnership], employees, agents, managers, independent contractors or other persons having knowledge of the operation, use and maintenance of the Premises, as Indemnitee shall require) shall execute and deliver to Indemnitee a certificate, in form and content acceptable to Indemnitee, reaffirming the validity, correctness and currency of the warranties and representations made in this Agreement.

 

5. Covenants As To Permits . Indemnitor covenants and agrees that it shall at all times hereafter maintain and keep in full force and effect all permits and/or licenses issued by Environmental Regulators, necessary or required in order to conduct Indemnitor's operations, including without limitation those shown on Exhibit "B" attached hereto. Indemnitor further covenants and agrees that it shall apply for in a timely manner, obtain and thereafter maintain in full force and effect any and all such permits and/or licenses at any time hereafter required or necessary to conduct Indemnitor's operations.

 

 

6. Indemnification . Indemnitor acknowledges that Indemnitee is relying on the veracity of the warranties and representations made herein and on Indemnitor's full and faithful compliance with the covenants contained herein, and Indemnitor agrees to and shall indemnify, defend (by counsel reasonably acceptable to Indemnitee) and hold Indemnitee harmless of, from and against (i) any and all liabilities, claims, demands, obligations, losses, awards, judgments, or amounts paid in settlement or compromise thereon, and costs associated therewith, including reasonable attorneys' fees, by virtue of any investigation, inquiry, suit, proceeding, action, cause of action, right to recovery, assessment, claim, claim of lien or lien of or by any Environmental Regulator or any third party with respect to the Premises, Indemnitor, Indemnitor's operation of the Premises or any adjoining lands for clean-up costs, damages (including without limitation punitive or consequential damages, whether foreseeable or unforeseeable), or other costs pursuant to any Environmental Law, Environmental Regulation or order of an Environmental Regulator or any common law right of recovery, including without limitation those arising from personal injury, death or property damage, (ii) any and all fines, penalties, assessments, forfeitures, payments, impositions or amounts paid in settlement or compromise thereon, together with costs associated therewith, including reasonable attorneys' fees, imposed or obtained by or awarded to any Environmental Regulator for violation of, or non-compliance with, any Environmental Law or Environmental Regulation, (iii) any and all costs required to take necessary precautions to protect against the release of any Hazardous Substance in, on, under or affecting the Premises, or any part or parcel thereof, into the air, any body of water, any other public domain or any surrounding or adjoining properties, (iv) any and all costs required to comply, in connection with all or any portion of the Premises or any surrounding or adjoining properties, with applicable Environmental Laws, Environmental Regulations, orders of Environmental Regulators or permits issued by Environmental Regulators, (v) any breach of the representations, warranties or covenants of Indemnitor contained herein, and (vi) any and all costs of any required or necessary inspection, audit, clean-up, detoxification and the preparation of any closure or other required plans, consent orders, or permit or license applications.

 

7. Release of Hazardous Materials; Claim . Indemnitor agrees to immediately notify Indemnitee upon the occurrence of any storage, generation, release, disposal or placing of any Hazardous Substance of any kind in, on, about or under the Premises, or any part or parcel thereof. Indemnitor shall further immediately notify Indemnitee in writing of the receipt of any notice, order, correspondence, communication or information that (i) a permit is required from any Environmental Regulator for the use, maintenance or operation of any improvement or facility on, or which is a part of, the Premises, (ii) a summons, citation, order directing compliance or inquiry is being issued or made by any Environmental Regulator, (iii) any Environmental Regulator or any third party has demanded or asserted any right of recovery for payment or reimbursement, or any claim, claim of lien or lien against the Premises, or any part or parcel thereof, for clean-up costs, damages, or other costs incurred under or pursuant to Environmental Laws or Environmental Regulations or under any common law right of recovery, (iv) the Premises are or will be listed on the National Priorities List or with CERCLIS, (v) any fine, penalty, assessment, cost, forfeiture or imposition has been, or will be or is sought to be imposed against Indemnitor or Indemnitee for violation or asserted violation of Environmental Laws, Environmental Regulations, orders of Environmental Regulators or permits issued by any Environmental Regulator, (vi) an underground storage tank or storage facility is located in or on the Premises, or (vii) any response action pursuant to any Environmental Law or Environmental Regulation is being, or will be, commenced by any Environmental Regulator or any third party with regard to (1) the Premises or (2) any other properties owned, operated or controlled by Indemnitor which would give rise to a claim, claim of lien or lien against the Premises.

 

8. Clean-up Plan . In the event of any determination that any Hazardous Substance has been stored, generated, released, disposed of or is located in, on, about or under the Premises, or any part or parcel thereof, or, that any underground storage tank or storage facility is located in, on, about or under the Premises, or any part or parcel thereof, in violation of applicable Environmental Laws, Environmental Regulations, orders of Environmental Regulators, or permits issued by Environmental Regulators, Indemnitor shall immediately notify the appropriate Environmental Regulator having jurisdiction thereof, and accept full responsibility therefor. Indemnitor shall, further, within thirty (30) days of such determination, submit evidence to Indemnitee of the remedial action deemed necessary to provide for the full and adequate clean-up and removal of any such Hazardous Substance or underground storage tanks or storage facilities, and the total restoration of the Premises or any affected portion thereof, and as soon as possible shall provide, at Indemnitor's sole cost and expense, detailed plans and specifications therefor. Indemnitor shall, after obtaining all necessary approvals, permits and/or licenses of all appropriate governmental or quasi-governmental units, bodies or agencies, including without limitation Environmental Regulators, diligently prosecute the accomplishment of the remedial action contemplated herein, at Indemnitor's sole cost and expense.

 

 

9. Modification of Existing Improvements .

 

(a) Indemnitor covenants and agrees with Indemnitee that prior to any modification, renovation, demolition rehabilitation, remodeling, retrofit, or expansion of the existing improvements comprising a portion of the Premises, Indemnitor shall undertake and obtain, at its sole cost and expense, from a third-party licensed environmental consultant or engineer, reasonably acceptable to Indemnitee, an asbestos survey of said improvements, or, to the extent that such modification, renovation, demolition, rehabilitation, remodeling, retrofit, or expansion relates to only a portion of the improvements, such portion of the improvements, together with a written report of the results of such asbestos survey, in order to determine the existence of asbestos containing materials (“ ACMs ”) within said improvements and recommendations as to a proposed operating and maintenance program (“ O&M Program ”) with respect to any ACMs disclosed by such report. The asbestos survey must include an assessment of all suspected ACMs including those that are not normally accessible. Indemnitor shall provide a copy of the report of the asbestos survey and any recommended O&M Program to Indemnitee for its review, which O&M Program must provide for the removal, handling and/or disposal of any such ACMs consistent, and in compliance, with all applicable Environmental Laws and Environmental Regulations. To the extent that any ACMs are determined to exist with respect to any portion of the Premises, Indemnitor shall adopt and thereafter undertake an O&M Program for removal and/or management of such ACMs consistent with the recommendations of the report of the asbestos survey prior to, or in conjunction with, undertaking any modification, renovation, demolition rehabilitation, remodeling, retrofit, or expansion of the existing improvements comprising a portion of the Premises. If an O&M Program is established, Indemnitor shall comply in a timely manner with, and cause all employees, agents and contractors of Indemnitor to comply with the O&M Program. All costs of performance of Indemnitor’s obligations under any O&M Program shall be paid by Indemnitor, and Indemnitee’s out-of-pocket costs incurred in connection with the monitoring and review of the O&M Program and Indemnitor’s performance shall be paid by Indemnitor upon demand by Indemnitee.

 

(b) Indemnitor covenants and agrees with Indemnitee that prior to any actions taken with respect to, or which would impact, any painted surfaces within the Premises, including without limitation, sanding, scraping, or heat-gun or chemical removal, any existing painted surfaces shall be assessed, at Indemnitor’s sole cost and expense, by a third-party licensed environmental consultant or engineer, reasonably acceptable to Indemnitee for the presence of lead-based paints (“ LBPs ”). To the extent that the presence of LBPs is detected within the Premises, Indemnitor shall conduct, and/or shall cause all employees, agents and contractors of Indemnitor to conduct, the removal of any such LBPs in a controlled manner consistent, and in compliance, with all applicable Environmental Laws and Environmental Regulations. All costs of performance of Indemnitor’s obligations with respect to LBPs or their removal shall be paid by Indemnitor, and Indemnitee’s out-of-pocket costs incurred in connection with the monitoring and review of any course of action with respect to LBPs and Indemnitor’s performance shall be paid by Indemnitor upon demand by Indemnitee.

 

10. Indemnitee's Additional Rights . In the event that Indemnitee shall, at any time, determine that any Hazardous Substance has been stored, generated, released, disposed or is located on, in, upon, about or under the Premises or any part or parcel thereof or that any underground storage tank or storage facility is located on, in, upon or under the Premises or any part or parcel thereof, in violation of applicable Environmental Laws, Environmental Regulations, orders of Environmental Regulators or permits issued by Environmental Regulators or in the event that the Premises or any part or parcel thereof are subject to the claim, claim of lien or lien of any Environmental Regulator or any third party for clean-up costs, damages or other costs pursuant to any Environmental Law or Environmental Regulation or common law right of recovery, Indemnitee, in addition to all other rights and remedies which it may have hereunder, under any other Loan Document, or at law or in equity, shall have the right, but without any obligation, to reassign or reconvey the Premises or any part or parcel thereof to Indemnitor or Indemnitor's successor-in-interest.

 

 

11. Indemnitor's Liability . The liability of Indemnitor under this Agreement shall not be limited or impaired by (i) any amendment or modification of the Note, or the Loan Documents, (ii) any extension of time, or renewal, for the payment of the indebtedness evidenced by the Note or performance required under the Note or the other Loan Documents, (iii) any exculpatory provision in the Note, the Mortgage or the other Loan Documents limiting Indemnitee's recourse to the Premises or other collateral security for the Loan or limiting Indemnitee's right to seek a deficiency judgment against Indemnitor, (iv) the accuracy or inaccuracy of the representations and warranties made by Indemnitor in this Agreement, the Mortgage or any other Loan Documents, (v) the release of Indemnitor, or any other person from performance or observance of any agreements, covenants, terms or conditions contained in the Note, the Mortgage or the other Loan Documents, or (vi) the release or substitution in whole or in part of any of the collateral security for the Loan. If more than one person or entity shall execute this Agreement, the liability of Indemnitor shall be joint and several. Further, Indemnitor acknowledges and agrees that this Agreement constitutes a covenant separate and apart from the Note, the Mortgage or the other Loan Documents and may be enforced by Indemnitee without regard to said other documents or the enforcement thereof. This Agreement shall not be deemed to be secured by the Mortgage and nothing contained in the Note, the Mortgage or the other Loan Documents shall limit Indemnitor's liability hereunder.

 

12. Continuing Nature . The provisions of this Agreement shall survive the repayment of the Loan and shall continue in full force and effect so long as the possibility of any liability, claim, obligations or losses exist hereunder, and shall further survive the acquisition of the Premises by Indemnitee pursuant to a sale or foreclosure under the Mortgage or pursuant to a deed or assignment in lieu of foreclosure or otherwise, but only as it relates to any time period prior to the possession of the Premises by Indemnitee or anyone else acquiring the Premises through a sale or foreclosure under the Mortgage.

 

13. Insurance . Indemnitor acknowledges and agrees that the indemnity provisions contained herein and Indemnitor's obligations and liabilities arising hereunder are exclusive of, and in addition to, (i) any and all obligations of Indemnitor under the Loan Documents to carry insurance and (ii) any and all insurance policies maintained by or on behalf of Indemnitor and insuring against any of the matters described in said indemnity provisions.

 

14. Modifications . Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing, signed by the party against whom enforcement of the change, waiver, discharge or termination is sought.

 

15. Binding Effect . The terms, conditions, covenants, indemnities, agreements, powers and privileges contained herein shall extend to, be binding upon and available for the heirs, executors, administrators, successors, and to the extent permitted under the Loan Documents, assigns of each of the respective parties hereto.

 

16. Severance . In the event any one or more of the provisions or terms of this Agreement shall for any reason be held to be unenforceable in any respect, such unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such unenforceable provision had never been contained herein.

 

17. Headings . The paragraph headings used herein are for convenience of reference only and are not to be used in the construction or interpretation hereof.

 

18. Counterparts . This Agreement may be executed in one or more counterparts, all of which taken together will constitute one and the same instrument and any of the parties or signatories hereto may execute this Agreement by signing any such counterpart.

 

 

19. Governing Law . This Agreement, shall be governed, interpreted and construed by, through and under the laws of the State of Florida, excepting, however , its laws or principles regarding conflicts of laws or choice of laws.

 

20. Attorneys' Fees . In the event that Indemnitee shall retain an attorney to enforce its rights hereunder or shall bring, or appear in, any action, suit or proceeding (including without limitation appearances in bankruptcy proceedings) with respect to this Agreement or enforcement of the terms hereof, Indemnitee shall be entitled to recover all of its costs associated therewith including its reasonable attorneys' fees. Attorneys' fees shall be deemed to include charges for paralegals, law clerks and other staff members operating under the supervision of an attorney and shall also include, without limitation, any allocated costs of Indemnitee’s in-house counsel to the extent permitted by applicable law. Any award or payment of attorneys' fees hereunder or by a court of competent jurisdiction shall also include any and all sales and/or use taxes imposed thereon by any appropriate governmental authority.

 

[Remainder of Page Intentionally Blank]

 

 

IN WITNESS WHEREOF , Indemnitor has duly executed this Agreement as of the day and year first above written.

 

 

 

Exhibits:

A—Legal Description

B—Schedule of Existing Environmental Permits

 

EXHIBIT “A”

 

LEGAL DESCRIPTION

 

Lot 9, in the Southeast 1/4 of Section 4, Township 30 South, Range 16 East, according to the plat of Pinellas Groves, Inc., recorded in Plat Book 1, Page 55, of the Public Records of Pinellas County, Florida, LESS the West 150 feet thereof and also LESS that part lying within 120 feet of survey line of State Road S-688, Section 15120, as described in Clerk's Instrument No. 260901B, Official Records Book 2081, Page 593, Pinellas County Records.

 

 

 

 

EXHIBIT “B”

 

EXISTING ENVIRONMENTAL PERMITS

Privately Owned Collection and Transmission System Operating Permit No. 130717LS925-66, issued by the City of Largo, Florida, Department of Environmental Services, issued to Bovie Medical Corporation, with an Effective Date of July 20, 2013 and an Expiration Date of July 19, 2015.

 

 

 

 

 

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