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Exhibit
10.1
THIS DOCUMENT PREPARED BY:
Leslie A. Lewis, Esq.
Lewis & Crichton
Post Office Box 1119
Winter Park, Florida 32790
Third Loan and Security
Agreement Modification and Extension Agreement
THIS Third Loan and Security
Agreement Modification and Extension Agreement is executed this 31
st
day of October, 2007 by
borrower, ACTION PRODUCTS INTERNATIONAL, INC., a Florida
corporation, with its address at 1101 North Keller Road, Suite E,
Orlando, Florida 32810, (hereinafter sometimes referred to as
Borrower) and REGIONS BANK, successor in interest by merger to
AmSouth Bank, a bank organized under the laws of Alabama, whose
address is 13535 Feathersound Drive, Building 1—Suite 525,
Clearwater, Florida 33762, (hereinafter referred to as
Regions).
W I T N E S S E T H
WHEREAS, on September 2,
2005, ACTION PRODUCTS INTERNATIONAL, INC. executed a Revolving
Promissory Note in favor of AmSouth Bank in the principal sum of
$3,000,000.00 (the “$3,000,000.00 Note”);
WHEREAS, on September 6,
2005, ACTION PRODUCTS INTERNATIONAL, INC. executed a Revolving Line
of Credit Loan and Security Agreement in favor of AmSouth
Bank;
WHEREAS, on
September 14, 2005, ACTION PRODUCTS INTERNATIONAL, INC.
executed a UCC-1 regarding the accounts receivables, inventory,
general intangibles, machinery, equipment and other personal
property as additional security for the debt of ACTION PRODUCTS
INTERNATIONAL, INC., which was recorded with the Florida Secretary
of State, file number 200500676214;
WHEREAS, on September 6,
2005, ACTION PRODUCTS INTERNATIONAL, INC. executed an Agreement Not
To Encumber or Transfer Property regarding certain real estate
owned by the Borrower, which such agreement is recorded at Official
Records Book 4177, Page 1373 of the Public Records of Marion
County, Florida.
WHEREAS, the preceding
September 2005 loan documents were executed outside the State of
Florida and no documentary or intangible tax was paid by ACTION
PRODUCTS INTERNATIONAL, INC. for the $3,000,000.00 Note.
WHEREAS Effective
October 31, 2006, ACTION PRODUCTS INTERNATIONAL, INC and
AmSouth executed a Loan and Security Agreement Modification and
Extension Agreement which extended the maturity on the
$3,000,000.00 Note until March 31, 2007.
WHEREAS, the Loan and
Security Agreement Modification and Extension Agreement documents
were executed outside the State of Florida and no documentary or
intangible tax was paid by ACTION PRODUCTS INTERNATIONAL, INC. for
the remaining balance due on the $3,000,000.00 Note.
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WHEREAS on or about
November 6, 2006 REGIONS BANK, (“Regions”) became
the successor in interest by merger to the interests of AmSouth
Bank in the subject loan;
WHEREAS, Regions extended the
maturity of the loan until April 30, 2007 by letter
agreement;
WHEREAS, Effective
April 30, 2007 ACTION PRODUCTS INTERNATIONAL, INC., and
Regions executed a Second Loan and Security Agreement Modification
and Extension Agreement which extended the maturity on the
$3,000,000.00 Note until October 31, 2007.
WHEREAS, the Second Loan and
Security Agreement Modification and Extension Agreement documents
were executed outside the State of Florida and no documentary or
intangible tax was paid by ACTION PRODUCTS INTERNATIONAL, INC. for
the remaining balance due on the $3,000,000.00 Note.
WHEREAS, Regions is owner and
holder of said note and security instruments, on which Borrower has
requested another extension of the maturity date.
WHEREAS Regions is willing to
grant borrower an extension of the maturity date in consideration
for Borrower agreeing to maintain current loan payments, paying
Regions an Extension Fee, securing a portion of the remaining
principal balance on the $3,000,000.00 Note by real estate
collateral, paying Regions’ out of pocket fees and costs for
this Agreement, paying the loan in full at the expiration of the
new Maturity Date on May 31, 2008, and other agreements as set
forth hereinbelow.
WHEREAS Regions and Borrower
agree that the loan be modified as set forth hereinbelow;
and
NOW THEREFORE, in
consideration of the premises, the mutual benefits to be derived
from this Third Loan and Security Modification and Extension
Agreement, and for other good and valuable consideration, receipt
of which is hereby acknowledged, the parties hereby mutually agree
as follows:
A. Recitals. The above
recitals are true and correct and are incorporated herein by
reference.
B. Principal Balance.
The outstanding principal balance under this revolving loan may
change daily. The principal balance on October 23, 2007 was
$1,843,187.00.
C. Extension Fee. A
$10,000.00 Extension Fee is due to Regions upon the signing and
delivery of this Agreement. Borrower’s failure to pay the
Extension Fee upon execution and delivery of this Agreement shall
cause Regions to withdraw its offer to enter into this
Agreement.
D. Decreased Line of
Credit. The $3,000,000.00 Note is hereby modified so that the
maximum available under the revolving line of credit is
$2,000,000.00 (the “$2,000,000.00 Note”).
E. Term. The term of
the $2,000,000.00 Note shall be changed. The $2,000,000.00 Note
shall mature on May 31, 2008 (the “Maturity Date”)
at which time all sums due under the loan and Note shall be due and
payable to Regions.
F. Interest Provision.
The interest provision of the Note shall remain at Prime plus 150
basis points. This is a variable rate adjusting each time a change
in the Prime Rate occurs.
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G. Monthly Reporting.
It remains a material covenant of this Agreement that the Borrower
continue to send Regions its ‘Monthly Borrowing Base
Report’ on the approved Regions Bank form and its monthly
‘Accounts Receivable Aging Report’. The initial reports
under this Agreement shall have an effective date of
October 31, 2007 and be due to Regions no later than 10 days
thereafter.
H. Default Rate of
Interest. The modified loan and all sums due hereunder shall
bear interest from the date when due (without any prior notice from
Regions to Borrower), whether by lapse of time or on acceleration,
and also after any judgment which may be entered against Borrower
and in favor of Regions, at the Default Rate (as hereinafter
defined) until paid. The Default Rate shall be a rate of interest
equal to the highest rate allowed by law until paid. In the event
of default, the interest rate shall be the highest legal rate
allowed by law, applied retroactively to all past due payments for
which Regions forbeared on its right to collect default
interest.
I. Additional
Collateral. It is a material covenant of this Agreement that
the Borrower pledge and mortgage its commercial real estate
warehouse located at 344 Cypress Road, Silver Springs Shores,
Florida as additional collateral for the $2,000,000.00 Note. A
mortgage securing the amount of $1,500,000.00 will be executed by
Borrower and delivered on even date herewith (the
“Mortgage”). If Borrower fails to execute and deliver
the Mortgage on even date herewith, Regions withdraws its offer to
make this agreement and the agreement herein to extend and modify
the loan is rescinded.
J. Remedies upon
Default. If an Event of Default shall occur Regions may, at its
option, exercise any, some or all of the following remedies,
concurrently or consecutively:
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Acceleration. Declare the unpaid portion of the
indebtedness to be immediately due and payable, without further
notice or demand (each of which hereby is expressly waived by
Borrower), whereupon the indebtedness shall become immediately due
and payable, anything in the loan documents to the contrary
notwithstanding. |
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2. |
Remedies
as to Personal Property. Regions may exercise any or all of its
rights and remedies under the Uniform Commercial Code of the state
of Florida as all other rights and remedies possessed by Regions,
all of which shall be cumulative. Regions hereby is authorized and
empowered to enter the business location of the Borrower or other
place where the Personal Property may be located without legal
process, and take possession of the Personal Property without
notice or demand which hereby are waived. Whenever Borrower is in
default hereunder, and upon demand by Regions, Borrower shall make
the Personal Property available to Regions at a place reasonably
convenient to Regions. Regions may waive any default or Event of
Default before or after that default or Event of Default has been
declared, without impairing its right to declare a subsequent
default or Event of Default hereunder, this right being a
continuing one. Regions, with notice may sell at one or more public
or private sales, without further notice, and for such price as
Regions may deem fair, any and all of the Personal Property secured
by the Security Agreements, and any other security or property held
by the Regions. Regions may be the purchaser of any or all of the
Personal Property and may hold the Personal Property thereafter in
its own right absolutely, free from any claims of Borrower or right
of
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redemption. It is
expressly agreed in accordance with the provisions of the Florida
Uniform Commercial Code, fifteen (15) days notice by Regions
to Borrower shall be deemed to be reasonable notice under any
provision of the Florida Uniform Commercial Code requiring such
notice; provided, that Regions may at its option dispose of the
collateral in accordance with Regions’s rights and remedies
in respect to the real property pursuant to the provisions in this
Agreement, in lieu of proceeding under the Florida Uniform
Commercial Code.
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3. |
Remedies as to Real Property. Borrower is executing and
delivering a Mortgage to Regions on even date herewith to secure
$1,500,000.00 of the principal balanc |
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