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EXHIBIT 6.32
FIRST AMENDMENT TO LOAN AGREEMENT
(AND PERMANENT WAIVER)
THIS DOCUMENT is entered into as of October 10, 1997, between NEUTRAL
POSTURE ERGONOMICS, INC., a Texas corporation ("BORROWER") and COMPASS BANK
("LENDER").
WHEREAS, Borrower and Lender are parties to the Loan Agreement (as
renewed, extended, and amended the "LOAN AGREEMENT") dated as of April 30,
1996, providing for extension of credit to Borrower in the principal sum of
$500,000. 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 certain
waivers and releases as described in PARAGRAPHS 2, 5 AND 6 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
noncompliance with SECTION 3(E), 3(G), 3(I) AND 3(M).
3. LIMITATIONS OF WAIVERS AND AMENDMENTS. The permanent waivers under
PARAGRAPH 2, the amendments under PARAGRAPH 4, the release under PARAGRAPH 5,
and the waiver, release and termination under PARAGRAPH 6 are effective only
upon, and at such time as, the 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
Default.
4. AMENDMENTS TO LOAN AGREEMENT. The Loan Agreement is amended as follows:
(A) SECTION 3(a) is entirely amended as follows:
a) Permit its working capital (being the excess of its current
assets over its current liabilities) to be less than
$500,000, or permit the ratio of its current assets to its
current liabilities to be less than 1.5;
(B) SECTION 3(b) is entirely amended as follows:
b) Permit its net worth to be less than $2,500,000.00, or
permit the ratio of its total liabilities to its net worth
to exceed 1.50;
(C) SECTION 3(c) is entirely deleted.
(D) SECTION 3(e) is entirely deleted.
(E) SECTION 3(g) is entirely deleted.
PERMANENT WAIVER AGREEMENT
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(F) SECTION 3(h) is entirely amended as follows:
h) Undergo a Change of Control. "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 a vote of 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.
(G) SECTION 3(i) is entirely amended as follows:
i) Pay any dividends (other than stock dividends consisting of
its own stock but not the stock of any subsidiary) on any
of its outstanding stock. 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 accordance with generally accepted accounting
principles no 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 3(l) is entirely amended, as follows:
l) Own, purchase or acquire, directly or indirectly, any stock or
securities of any other person, firm or corporation, other than
securities guaranteed as to principal and interest by the United
States government or short-term, interest-bearing, investment
grade securities;
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(I) SECTION 3(m) is amended by deleting the words "with or," as
follows:
m) Make any loans or advances or sell any of its accounts
receivable without recourse; or
(J) SECTION 3(n) is entirely deleted.
(K) SECTION 6 is entirely deleted.
5. RELEASE OF CERTAIN COLLATERAL. Lender hereby releases the life insurance
policy with New York Life Insurance (#63514564) collateral referred to in the
Security Agreement attached to the Loan Agreement and shall take all actions
necessary to accomplish such release, including the filing of any required Form
UCC-3.
6. 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.
7. RATIFICATIONS. Borrower (A) ratifies and confirms all provisions of the
Loan Agreement, as amended, (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.
8. 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
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
Default exists.
9. 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.
10. 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
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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.
11. 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.
12. PARTIES. This document binds and inures to Borrower and Lender and their
respective successors and assigns.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.
PERMANENT WAIVER AGREEMENT
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EXECUTED as of the date first stated above.
NEUTRAL POSTURE ERGONOMICS, INC., COMPASS BANK,
as Borrower as Lender
By /s/ Xxxxxxx Xxxxxxx By /s/ XXXXX XXX
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Xxxxxxx Xxxxxxx, Name: Xxxxx Xxx
Chief Executive Officer Title: President
PERMANENT WAIVER AGREEMENT
