EXHIBIT 10.19
LOAN AGREEMENT
This Loan Agreement entered into this 30th day of September, 1996, by and
between XXXXXXX BANK, N.A., a national banking association, whose mailing
address is Xxxx Xxxxxx Xxx 000000, Xxxxxxx, Xxxxxxx, 00000-0000, hereinafter
referred to as "Lender"; XXXXXX INDUSTRIES, INC., a Florida corporation,
hereinafter referred to as "Borrower"; and XXXXX X. XXXXXX, individually,
hereinafter referred to as "Guarantor", whose mailing address is 0000 Xxxxx
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000.
W I T N E S S E T H :
WHEREAS, on the 30th day of September, 1996, Borrower executed a certain
Promissory Note in the principal sum of $2,400,000.00, which Promissory Note is
secured by a Mortgage and Security Agreement in favor of Lender, dated of even
date herewith, said Mortgage and Security Agreement encumbering certain real
property located in Brevard County, Florida, more particularly described on
attached Exhibit "A"; and
WHEREAS, as a condition of the aforementioned mortgage loan Lender
required certain conditions and obligations of the Borrower; and
WHEREAS, the Borrower has agreed that the conditions and obligations
contained hereinafter should be conditions and obligations for the
aforementioned mortgage loan; and
WHEREAS, Lender and Borrower agree that the conditions and obligations
contained hereinafter are a part of the Promissory
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Note executed by the Borrower in the same manner and effect as if stated
therein,
IT THEREFORE IS AGREED AS FOLLOWS:
1. Borrower and Guarantor agree that so long as any indebtedness
shall be due Lender from Borrower under this note, Xxxxxxx Bank,
N. A. shall remain the primary bank of account for all operating
account deposits of the Borrower and failure by Borrower to abide
by the conditions of this clause shall constitute a default by
Borrower under this note. All business operating accounts and all
business merchant services shall be maintained with Xxxxxxx Bank,
N. A., Central Florida.
2. As requested from Lender from time to time, promptly furnish
Lender with such additional information and statements, lists of
assets and liabilities, agings of receivables and payables,
inventory schedules, budgets, forecasts, tax payments and other
reports with respect to Borrower's financial condition and
business operations.
3. ADDITIONAL COVENANTS.
(a) Borrower will submit 10-K's annually within ninety (90) days
of Borrower's fiscal year end.
(b) Borrower will submit 10-Q's quarterly within
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sixty (60) days of period end.
(c) CPA audited fiscal year end statement shall be submitted to
Lender within ninety (90) days of Borrower's fiscal year end.
(d) Guarantor will provide to Lender annual personal financial
statements in a form and content acceptable to Lender by August
31st of each year.
(e) Guarantor will provide to Lender a copy of Guarantor's
personal income tax return, including all schedules, immediately
upon filing. In the event an extension is requested of IRS, then
a copy of such extension request shall be submitted to Lender
immediately upon filing.
(f) If requested by Lender, evidence of paid ad valorem taxes
shall be provided to Lender annually by May 1st of each year.
NEGATIVE COVENANT ALLOWANCES:
(a) Borrower will not create, incur or add additional
indebtedness, except for trade debt, including capital leases
without Lender's written consent.
(b) Borrower will not permit any purchase money security
interests without Lender's written consent.
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(c) Borrower will not enter into any operating leases as
permitted indebtedness without Lender's written consent.
(d) Borrower will not permit loans or investments to officers or
shareholders without Lender's written consent.
(e) Borrower will not pledge assets without Lender's prior
written consent.
4. FINANCIAL COVENANTS AND RATIOS. Comply with the following
covenants and ratios, which ratios are to be tested 3/31 and 9/30 of each
year.
Tangible Net Worth. Maintain a minimum Tangible Net Worth of not less
than:
Period Ratio
------ -----
At All Times $1,900,000.00
Leverage Ratio. Maintain a ratio of Total Liabilities to Tangible Net
Worth of less than:
Period Ratio
------ -----
At All Times 2.5:1
Current Ratio. Maintain a ratio of Current Assets to Current Liabilities
in excess of:
Period Ratio
------ -----
At All Times 1.0:1
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Fixed Charge Ratio. Maintain a ratio of Adjusted Net Income to Fixed
Charges of not less than:
Period Ratio
------ -----
At All Times 1.25:1 as of fiscal year end, de-
fined as earnings before interest,
deprecations, amortization and
taxes less dividends and bonuses
divided by principal and interest.
5. Borrower may not make any distribution of dividends unless bank
cash flow requirements are met and only to minimum cash flow level of
1.25:1 as defined above, and restricted to 50% of earnings.
6. Notwithstanding anything to the contrary, or any other loan
document in connection with the loan transaction Borrower's right to any
advances under the Revolving Line of Credit is subject to a quarterly audit
to be conducted by the "ABL" Department and which audit shall determine
that Borrower is in compliance with all of the terms and conditions of this
Loan Agreement as well as the terms and conditions of all other loan
documents.
For purposes of this Agreement and to the extent the following terms are
utilized in this Agreement, the term "Tangible Net Worth" shall mean Borrower's
total assets excluding all intangible assets determined in accordance with GAAP
(i.e., goodwill, trademarks, patents, copyrights, organizational
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expenses, and similar intangible items, but including leaseholds and
leasehold improvements at book value) or Borrower less total Debt. The term
"Debt" shall be determined in accordance with GAAP. The term "Subordinated
Debt" shall mean indebtedness and liabilities of Borrower which have been
subordinated by written agreement to indebtedness owed by Borrower to Lender
in form and substance acceptable to Lender. The term "Working Capital" shall
mean Borrower's current assets at lower of cost or current market value less
amounts due from any officer, director, shareholder or any entity related by
common control or ownership, excluding prepaid expenses, less Borrower's
current liabilities. The term "Liquid Assets" shall mean Borrower's cash on
hand, marketable securities, bank deposits and Borrower's receivables. The
term "Adjusted Net Income" means net income after taxes plus depreciation,
amortization, lease expense, and interest expense. The term "Fixed Charges"
means interest expense plus lease expense, current maturities of long-term
debt and current maturities of capital leases. The term "Cash Flow" shall
mean net income after taxes, and exclusive of extraordinary gains and income,
plus depreciation and amortization. The term "Senior Debt" shall mean Debt
less Subordinated Debt. The term "Capital Funds" shall mean Tangible Net
Worth plus Subordinated Debt. Except as provided above, all computations
made to determine compliance with the requirements contained in this
paragraph shall be made in accordance with GAAP and certified by Borrower as
being true and correct.
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A default in any of the conditions of this Agreement shall constitute a
default in the Mortgage.
IN WITNESS WHEREOF, the parties hereto have executed this Loan Agreement as
of the day and year first above written.
BORROWER:
XXXXXX INDUSTRIES, INC.
a Florida corporation
By: /s/ XXXXX X. XXXXXX
________________________ _____________________________________
Witness Signature Xxxxx X. Xxxxxx, President
________________________ Address: 0000 X. Xxxxxxxxxx Xxx.
Print Witness Name Xxxxxxxxxx, XX 00000
GUARANTOR:
________________________
Witness Signature
/s/ XXXXX X. XXXXXX
____________________________________
________________________ Xxxxx X. Xxxxxx, Individually
Print Witness Name
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LENDER:
XXXXXXX BANK, N.A.
By: /s/
________________________ _____________________________________
Witness Signature
________________________ Address: 000 Xxxxxxx Xxxxxxxxx
Print Witness Name Xxxxx 000
Xxxxxxx, XX 00000-0000
________________________
Witness Signature
________________________
Print Witness Name
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