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EXHIBIT 6.33
SECOND AMENDMENT TO LOAN AGREEMENT
(AND PERMANENT WAIVER)
THIS DOCUMENT is entered into as of October 14, 1997, between NEUTRAL
POSTURE ERGONOMICS, INC., a Texas corporation ("BORROWER") and COMERICA
BANK-TEXAS, a Texas banking association ("LENDER").
WHEREAS, Borrower and Lender are parties to the Loan Agreement (as
renewed, extended, and amended the "LOAN AGREEMENT") dated as of December 30,
1996, and amended as of August 12, 1997, providing for extension of credit to
Borrower. Borrower has requested that Lender permanently waive the matters
described in PARAGRAPH 2 below. Lender has agreed, subject to the terms and
conditions of this document, to those permanent waivers as provided below.
Borrower and Lender have further agreed to amend the Loan Agreement in respect
of the matters described in PARAGRAPH 4 below and to provide for a certain
waiver as described in PARAGRAPHS 2 AND 5 below.
ACCORDINGLY, for adequate and sufficient consideration, Borrower and
Lender agree as follows:
1. TERMS AND REFERENCES. Unless otherwise stated in this document (A) terms
defined in the Loan Agreement have the same meanings when used in this document
and (B) references to "SECTIONS," "SCHEDULES," and "EXHIBITS" are to the Loan
Agreement's sections, schedules, and exhibits.
2. PERMANENT WAIVERS. As of the effective date of this document, Lender
permanently waives any Default that may exist solely as a result of Borrower's
failure to previously provide the additions to Permitted Liens attached hereto
as EXHIBIT A.
3. LIMITATIONS OF WAIVERS AND AMENDMENTS. The permanent waivers under
PARAGRAPH 2, the amendments under PARAGRAPH 4, and the waiver, release and
termination under PARAGRAPH 5 are effective only upon, and at such time as,
Borrower's consummation of a public offering of its shares of Common Stock, par
value $.01. Except as stated in PARAGRAPH 2 above, nothing in this agreement
constitutes a waiver of existing or future Event of Default.
4. AMENDMENTS TO LOAN AGREEMENT. The Loan Agreement is amended as follows:
(A) SECTION 1.1 is amended to add the following definition:
"ACQUISITION LIENS" shall be liens in Acquired Assets of the
Borrower or its Subsidiaries which have been disclosed to the Lender
in writing not later than thirty (30) days before the assets are
acquired by the Borrower or any Subsidiary and, in the case of
inventory, machinery or equipment, disclosed so that the location,
and, where applicable, the landlord's name and address are provided,
and a copy of any applicable lease is provided to Lender.
"ACQUIRED ASSETS" shall mean assets hereinafter acquired by the
Borrower or any Subsidiary from the ongoing operations of a business
not then controlled by the Borrower.
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"CHANGE OF CONTROL" shall mean any of the following:
(1) any consolidation or merger of Borrower in which Borrower is
not the continuing or surviving corporation or pursuant to which
shares of Borrower's common stock would be converted into cash,
securities or other property, other than a merger of Borrower in
which the holders of Borrower's common stock immediately prior to the
merger have the same proportionate ownership of common stock of the
surviving corporation immediately after the merger;
(2) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of Borrower;
(3) any approval by the shareholders of Borrower of any plan or
proposal for the liquidation or dissolution of Borrower;
(4) the cessation of control (by virtue of their not
constituting a majority of directors) of Borrower's Board of
Directors by the individuals (the "CONTINUING DIRECTORS") who (x) at
the date of this amendment were directors or (y) become directors
after the date of this amendment and whose election or nomination for
election by Borrower's shareholders, was approved by the directors
then in office who were directors at the date of this amendment or
whose election or nomination for election was previously so
approved); or
(5) subject to applicable law, in a Chapter 11 bankruptcy
proceeding, the appointment of a trustee or the conversion of a case
involving Borrower to a case under Chapter 7.
(B) SECTION 5.6 is entirely amended as follows:
SECTION 5.6 NO LIENS, PLEDGES, MORTGAGES OR SECURITY INTERESTS.
Except for Permitted Liens, Acquisition Liens, or liens pursuant to
borrowings up to $3,000,000, none of the Borrower's or the
Subsidiaries' assets and properties, including the Collateral, is or
shall be subject to any mortgage, pledge, lien, security interest or
other encumbrance of any kind or character. With regard to
Acquisition Liens, the Borrower agrees to use its commercially
reasonable efforts to obtain landlord lien waivers, in form and
substance satisfactory to the Lender, on any property subject both to
an Acquisition Lien and a landlord's lien. Notwithstanding the
foregoing, there shall be no liens in that portion of the Collateral
which constitutes the Borrower's accounts receivable and/or
inventory. At all times the Bank shall be the owner and holder of a
first lien in and to the Borrower's accounts receivable and
inventory.
(C) SECTION 6.5 is entirely amended as follows:
SECTION 6.5 TANGIBLE NET WORTH AND TANGIBLE NET WORTH STEP UP
REQUIREMENT. The Borrower shall at all times maintain a minimum
Tangible Net Worth of Three Million and No/100 Dollars ($3,000,000)
and shall cause its Tangible Net Worth to increase by not less than
One Hundred Fifty Thousand and No/100 Dollars ($150,000.00) each
fiscal year.
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(D) SECTION 6.6 is entirely amended as follows:
SECTION 6.6 MAINTAIN DEBT RATIO. The Borrower shall maintain the
ratio of Debt to Tangible Net Worth of not more than 1.5 to 1.0.
(E) SECTION 6.7 is entirely amended as follows:
SECTION 6.7 MAINTAIN WORKING CAPITAL. The Borrower shall maintain
minimum Working Capital of $1,000,000. For purposes hereof, "Working
Capital" shall mean the sum of all cash, plus accounts receivable
(less accounts receivable more than ninety days old and less any
accounts for which there is a dispute concerning payment) plus
inventory (less any obsolete inventory) less Current Liabilities.
(F) SECTION 6.8 is entirely amended as follows:
SECTION 6.8 MAINTAIN FIXED CHARGE COVERAGE. The Borrower shall
maintain a Fixed Charge Coverage ratio of not less than 1.5 to 1.0 to
be calculated quarterly on a rolling quarterly basis.
For purposes hereof, "Fixed Charge Coverage" shall mean the sum
of net income plus depreciation, plus amortization plus interest
expense, divided by the sum of current maturities of long-term debt
(the Revolving Credit Note being considered short-term debt for
purposes hereof) plus current maturities of capital leases, plus
interest expense plus non-financed capital expenditures.
(G) SECTION 7.1 is entirely amended as follows:
SECTION 7.1 DIVIDENDS. The Company may not pay any dividends (other
than dividends payable in shares of its capital stock) or make any
other distribution with respect to (whether by reduction of capital
or otherwise) any shares of its capital stock, except that dividends
from any Subsidiary to the Borrower are permitted. NOTWITHSTANDING
THE FOREGOING, the Borrower may, from time to time, declare dividends
provided that after declaring such dividends and making such accrual
entries on its books and records as are required in accord and with
GAAP no Event of Default would result hereunder either from the
declaration of, or the accrual for such dividends. Borrower shall
obtain the prior consent of Lender before declaring such dividends.
(H) SECTION 7.2 is entirely deleted.
(I) SECTION 7.3 is entirely amended as follows:
SECTION 7.3 STOCK ACQUISITION. Purchase, redeem, retire or otherwise
acquire any of the shares of its capital stock, or make any
commitment to do so, without the prior consent of Lender.
(J) SECTION 7.4 is entirely amended as follows:
SECTION 7.4 LIENS AND ENCUMBRANCES. Incur, create or suffer to exist
any mortgage, pledge, encumbrance, security interest, lien or charge
of any kind (including any charge upon property purchased or acquired
under a conditional sales or other title-retaining agreement or lease
required to be capitalized under GAAP) upon any of its property or
assets whether now owned or hereinafter acquired, other than those
permitted pursuant to
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Section 5.6 hereof, and in no event shall the Borrower allow to exist
inferior liens in that portion of the Collateral constituting their
accounts receivable or inventory.
(K) SECTION 7.5 is entirely deleted.
(L) SECTION 7.9 is entirely amended, as follows:
SECTION 7.9 PROPERTY, TRANSFER OR LEASE-BACK. (a) Sell, lease,
transfer or otherwise dispose of all or, except as to the sale of
Inventory in the ordinary course of business, any material part of
its properties and assets (whether in one transaction or in a series
of transactions, or (b) enter into any sale-leaseback transaction;
provided, however, that a Subsidiary wholly owned by the Borrower may
sell, lease or transfer all or a substantial part of its assets to
the Borrower or another Subsidiary wholly owned by the Borrower, and
the Borrower or such Subsidiary may acquire all or substantially all
of the properties and assets of the Subsidiary so to sold, leased or
transferred to it.
(M) SECTION 7.10 is entirely amended as follows:
SECTION 7.10 ACQUIRE SECURITIES. Purchase or hold beneficially any
stock or other securities of, or make any investment or acquire any
interest in, any other person except for (a) certificates of deposit
with maturities of one year or less of United States commercial banks
with capital, surplus and undivided profits in excess of
$100,000,000, (b) direct obligations of the United States Government
maturing within one year from the date of acquisition thereof, or (c)
short-term, interest-bearing, securities, which are rated Baa2 or
better by Xxxxx'x Investors Services, Inc., or BBB or better by
Standard & Poors Ratings Group, a division of XxXxxx-Xxxx, Inc.
(N) SECTION 7.16 is entirely deleted.
(O) SECTION 8.1.7 is entirely amended as follows:
SECTION 8.1.7 CHANGE OF CONTROL. If the Borrower shall undergo a
Change of Control.
5. WAIVER OF GUARANTY. Lender hereby waives, releases and terminates the
personal guaranty of Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxx Xxxxxxxxx, and Xx.
Xxxxxx Xxxxxxxxx of any and all of Borrower's existing and future indebtedness
to Lender, and Lender shall take all actions necessary to accomplish such
waiver, release and termination.
6. RATIFICATIONS. Borrower (A) ratifies and confirms all provisions of the
Loan Agreement, as amended herein, (B) ratifies and confirms that all
guaranties, assurances, and liens granted, conveyed, or assigned to Lender
under the Loan Agreement by Borrower are not released, reduced, or otherwise
adversely affected by this agreement and continue to guarantee, assure, and
secure full payment and performance of the present and future obligation, and
(C) agrees to perform such acts and duly authorize, execute, acknowledge,
deliver, file, and record such additional documents and certificates as Lender
may request in order to create, perfect, preserve, and protect those
guaranties, assurances, and liens.
7. REPRESENTATIONS. Borrower represents and warrants to Lender that as of the
date of this document (A) Borrower has all requisite authority and power to
execute, deliver, and perform its obligations under this document, which
execution, delivery, and performance have been duly authorized by all necessary
corporate action, require no action by or filing with any governmental
authority, do not violate any of its organizational documents or (except where
not a materially adverse event) violate any governmental law, rule, or
regulation applicable to it or any material agreement to which it or its assets
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are bound, (B) upon execution and delivery by all parties to it, this agreement
will constitute the legal and binding obligation of Borrower, enforceable
against it in accordance with the terms of this agreement except as that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting creditors' rights generally and general
principles of equity and (C) except as permanently waived by this document, no
Event of Default exists.
8. EXPENSES. Borrower shall pay all costs, fees, and expenses paid or
incurred by Lender incident to this agreement, including, without limitation,
the reasonable fees and expenses of Lender's counsel in connection with the
negotiation, preparation, delivery, and execution of this agreement and any
related documents.
9. MISCELLANEOUS. Unless stated otherwise (A) the singular number includes
the plural and vice versa and words of any gender include each other gender, in
each case, as appropriate, (B) headings and captions may not be construed in
interpreting provisions, (C) this agreement must be construed, and its
performance enforced, under Texas law, (D) if any part of this agreement is for
any reason found to be unenforceable, all other portions of it nevertheless
remain enforceable, and (E) this agreement may be executed in any number of
counterparts with the same effect as if all signatories had signed the same
document, and all of those counterparts must be construed together to
constitute the same agreement.
10. ENTIRETIES. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES ABOUT THE SUBJECT MATTER HEREOF 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.
11. PARTIES. This document binds and inures to Borrower and Lender and their
respective successors and assigns.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.
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SIGNATURE PAGE
EXECUTED as of the date first stated above.
NEUTRAL POSTURE ERGONOMICS, INC., COMERICA BANK-TEXAS,
as Borrower as Lender
By /s/ Xxxxxxx X. Xxxx By /s/ Xxxxxx X. Xxxxx XX
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Xxxxxxx X. Xxxx, Name: Xxxxxx X. Xxxxx XX
Chief Financial Officer Title: Vice President
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EXHIBIT A
PERMITTED LIENS
Liens in the Borrower's real property, including all of that certain lot, tract
or parcel of land lying and being situated in Brazos County, Texas, and being
Lots One (1) and Two (2), Block One (1), X. X. Xxxxxxxxx Subdivision, an
addition to the City of Xxxxx, Brazos County, Texas, according to the plat
recorded in Vol. 407, pg. 113, Deed Records of Brazos County, Texas, pursuant
to a Deed of Trust, dated April 30, 1996, filed for record on May 2, 1996, and
in favor of Xxxxxx X. Xxxxxxxxxxx, III, Trustee, and Commerce National Bank,
Beneficiary, securing a loan in the amount of $500,000 by Commerce National
Bank.
Secondary liens in the Borrower's real property, including all of that certain
lot, tract or parcel of land lying and being situated in Brazos County, Texas,
and being Lots One (1) and Two (2), Block One (1), X. X. Xxxxxxxxx Subdivision,
an addition to the City of Xxxxx, Brazos County, Texas, according to the plat
recorded in Vol. 407, pg. 113, Deed Records of Brazos County, Texas, pursuant
to a Deed of Trust, dated April 30, 1996, filed for record on May 2, 1996, and
in favor of to Xxxxxx X. Xxxxxxxxxxx, III, Trustee, securing a loan in the
amount of $150,000 by Commerce National Bank, as subsequently assigned to the
Brazos Valley Development Council, Revolving Loan Fund.
