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EXHIBIT 10(a)(1)
LOAN AGREEMENT
June 30, 1996
BETWEEN
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BORROWER and LENDER
BodyBilt Seating, Inc. The First National Bank
One BodyBilt Place of Bryan
Xxxxxxxx, Xxxxx 00000 0000 Xxxxx Xxx.
Xxxxx, Xxxxx 00000
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This Loan Agreement (Agreement) is made on the above date by and between
Borrower and Lender.
1. THE LOAN. Lender agrees to lend and Borrower agrees to borrow an
amount not to exceed the sum of Two Million and No/100 --- Dollars
($2,000,000.00) (the Loan) on the terms and conditions set forth
herein. This loan will be evidenced by Borrower's Note or Notes in the
form attached hereto as Exhibit A, or any renewal thereof with
interest and principal payable as stated therein (the Note).
2. SECURITY. When Collateral is pledged as security for the Loan,
Borrower will grant to Lender a first lien in the Collateral (unless
otherwise represented) and agrees to do all things necessary to
perfect the lien of Lender in such Collateral.
3. GUARANTEES. This loan will be unconditionally guaranteed as evidenced
by guarantees executed by Xxxx X. XxXxxxxx.
4. REPRESENTATIONS.
A. GOOD STANDING. Borrower is a corporation, duly organized and
in good standing, under the laws of The State of Texas and has
the power to own its property and to carry on its business in
each jurisdiction in which Borrower operates.
B. AUTHORITY AND COMPLIANCE. Borrower has full power and
authority to enter into this Agreement, to make the borrowing
hereunder, to execute and deliver the Note and to incur the
obligations provided for herein, all of which has been duly
authorized by all proper and necessary corporate action. No
consent or approval of stockholders or of any public authority
is required as a condition to the validity of this Agreement
or the Note, and Borrower is in compliance with all laws and
regulatory requirements to which it is subject.
C. BINDING AGREEMENT. This Agreement constitutes, and the Note
when issued and delivered pursuant hereto for value received
will constitute, valid and legally binding obligations of
Borrower in accordance with their terms.
D. LITIGATION. There are no proceedings pending or, to the
knowledge of Borrower, threatened before any court or
administrative agency which will or may have a material
adverse effect on the financial condition or operations of
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Borrower or any subsidiary, except as disclosed to Lender in
writing prior to the date of this agreement.
E. NO CONFLICTING AGREEMENTS. There are no charter, bylaw or
stock provisions of Borrower and no provisions of any existing
agreement, mortgage, indenture or contract binding on Borrower
or affecting its property, which would conflict with or in any
way prevent the execution, delivery or carrying out of the
terms of this Agreement and the Note,
F. OWNERSHIP OF ASSETS. Borrower has good title to any Collateral
pledged and the Collateral is owned free and clear of liens.
Borrower will at all times maintain its tangible property,
real and personal, in good order and repair taking into
consideration reasonable wear and tear.
G. TAXES. All income taxes and other taxes due and payable
through the date of this Agreement have been paid prior to
becoming delinquent.
H. FINANCIAL STATEMENTS. The books and records of Borrower
properly reflect the Borrower's financial condition, and there
has been no material change in Borrower's financial condition
as represented in statements dated March 31, 1996.
I. PLACE OF BUSINESS. Borrower's principal place of business is
in Navasota, Texas.
J. LEASES. Borrower is not the lessee of any real or personal
property except as has been disclosed in writing to Lender.
5. AFFIRMATIVE COVENANTS. So long as Borrower may borrow hereunder and
until payment in full of the Note and performance of all other
obligations of Borrower hereunder, Borrower will
A. WORKING CAPITAL AND TANGIBLE NET WORTH. In accordance with
generally accepted accounting principles:
1. Maintain working capital of not less than
$500,000.00.
2. Maintain a ratio of current assets to current
liabilities of not less than 1.50 to 1.
3. Maintain tangible net worth of not less than
$1,750,000.00.
4. Not permit the ratio of tangible net worth to total
liabilities to be less than 1 to 1.
B. FINANCIAL STATEMENTS. Maintain a system of accounting
satisfactory to Lender and in accordance with generally
accepted accounting principles consistently applied, and will
permit Lender's officers or authorized representatives to
visit and inspect Borrower's books of account and other
records at such reasonable times and as often as Lender may
desire, and will pay the reasonable fees and disbursements of
any accountants or other agents of Lender selected by Lender
for the foregoing purposes. Unless written notice of another
location is given to Lender, Borrower's books and records will
be located at: Xxx XxxxXxxx Xxxxx, Xxxxxxxx, Xxxxx and 0000
Xxxxxx Xxxxx Xxxxxxx, Xxxxx, Xxxxx.
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1. Furnish to Lender year end CPA audited financial
statements with a nonqualified opinion to include
balance sheet, operating statement and surplus
reconciliation, together with an officer's
certificate of compliance with this Agreement
including computations of all quantitative covenants,
within 120 days after the end of each annual
accounting period.
2. Furnish to Lender quarterly financial statements, to
include balance sheet and profit and loss statement,
within 30 days of the end of each such accounting
period.
3. Promptly provide Lender with such additional
information, reports or statements respecting its
business operations and financial condition as Lender
may reasonable request from time to time. This
includes a quarterly aging of accounts receivable and
a list of inventory.
C. INSURANCE. Maintain insurance with responsible insurance
companies on such of its properties, in such amounts and
against such risks as is customarily maintained by similar
businesses operating in the same vicinity, specifically to
include a policy of fire and extended coverage insurance
covering all assets, business interruption insurance and
liability insurance, all to be with such companies and in such
amounts satisfactory to Lender and to contain a mortgage
clause naming Lender as its interest may appear. Evidence of
such insurance will be supplied to Lender.
D. CORPORATE EXISTENCE AND COMPLIANCE. Maintain its corporate
existence in good standing and comply with all laws,
regulations and governmental requirements applicable to it or
to any of its property, business operations and transactions.
E. ADVERSE CONDITIONS OR EVENTS. Promptly advise Lender in
writing of any condition, event or act which comes to its
attention that would or might materially affect Borrower's
financial condition, Lender's rights in or to the Collateral
under this Agreement or the loan documents, and of any
litigation filed against Borrower.
F. TAXES. Pay all taxes as the same become due and payable.
G. MAINTENANCE. Maintain all of its tangible property in good
condition and repair and make all necessary replacements
thereof, and preserve and maintain all licenses, privileges,
franchises, certificates and the like necessary for the
operation of its business.
H. REPORTING. Borrower shall submit to Lender within thirty (30)
days of the end of each quarter a Certificate in form or
substance as is acceptable to Lender executed by an officer of
the Corporation certifying that none of the Affirmative or
Negative Covenants within this Agreement have been violated
during the previous quarterly period and that Borrower has not
committed any violation of such Covenants without the prior
written consent of Lender.
6. NEGATIVE COVENANTS. So long as Borrower may borrow hereunder and until
payment in full of the note and performance of all other obligations
of Borrower
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hereunder, Borrower will not, without the prior written consent of
Lender, which will not be unreasonably withheld,
A. CAPITAL EXPENDITURES. Make capital expenditures (including
capitalized leases) in excess of $ 900,000.00 during any 12
month period beginning January 1, 1996.
B. COMPENSATION. Pay by way of salary, bonus, loan or otherwise,
aggregate annual compensation in excess of $700,000.00 to Xxxx
XxXxxxxx and/or Xxxxxxx Xxxxxxxx and/or Xxxx Xxxxxxxxx and/or
any entity affiliated with same.
C. TRANSFER OF ASSETS. Enter into any merger or consolidation, or
sell, lease, assign or otherwise dispose of or transfer any
assets except in the normal course of its business.
D. LIENS. Fail to promptly pay all lawful claims, whether for
labor, materials or otherwise.
E. LOANS. Make any loans, advances (other than minor employee
advances) or investments to or in any partnership, joint
venture, corporation or other entity or person(s), except for
the purchase of obligations of Lender or U.S. Government
obligations.
F. BORROWINGS. Create, incur, assume or become liable in any
manner for any indebtedness (for borrowed money, deferred
payment for the purchase of assets, lease payments, as surety
or guarantor for the debt of another, or otherwise) other than
to Lender, except for normal trade debts incurred in the
ordinary course of Borrower's business, and the existing
indebtedness listed in Exhibit B.
G. DIVIDENDS. Declare any dividends (other than dividends payable
in capital stock of Borrower) on any shares of any class of its
capital stock, or apply any of its property or assets to the
purchase, redemption or other retirement of any shares of any
class of capital stock of Borrower or in any way amend its
capital structure.
H. EXECUTIVE PERSONNEL. Substantially change its present executive
or management personnel including the employment of Xxxx X.
XxXxxxxx, contractual or otherwise.
I. CHARACTER OF BUSINESS. Change the general character of business
as conducted at the date hereof, or engage in any type of
business not reasonably related to its business as presently
and normally conducted.
J. VIOLATE OTHER COVENANTS. Violate or fail to comply with any
covenants or agreements regarding other debt which will or
would with the passage of time or upon demand cause the
maturity of any other debt to be accelerated.
K. INVESTMENTS. Invest in any partnership, joint venture,
corporation, or any other asset outside of the Borrower's
normal business.
7. EVENTS OF DEFAULT. If one or more of the following events of default
shall occur, all outstanding principal plus unpaid interest of the
Loan and any other
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indebtedness of Borrower to Lender shall be due and payable
immediately and Lender shall have no further obligation to fund under
this Agreement:
A. Default shall be made in the payment of any installment of
principal or interest upon the Note or any other obligation of
Borrower to Lender when due and payable, whether at maturity
or otherwise; or
B. Default shall be made in the performance of any term, covenant
or agreement contained herein or in any security agreement,
deed of trust, mortgage, assignment or other contract securing
payment of any indebtedness of Borrower to Lender; or
C. Any representation or warranty herein contained or in any
financial statement, certificate, report or opinion submitted
to Lender in connection with the Loan or pursuant to the
requirements of this Agreement shall prove to have been
incorrect or misleading in any material respect when made; or
D. Any judgment against Borrower or any attachment or other levy
against the property of Borrower with respect to a claim
remains unpaid, unstayed on appeal, undischarged, not bonded
or not dismissed for a period of 30 days; or
E. A guarantor shall die or be adjudicated as bankrupt, or there
is a substantial change in ownership or control of Borrower;
or
F. Borrower makes an assignment for the benefit of creditors,
admits in writing its inability to pay its debts generally as
they become due, files a petition in bankruptcy, is
adjudicated insolvent or bankrupt, petitions or applies to any
tribunal for any receiver or any trustee of Borrower or any
substantial part of its property, commences any action
relating to Borrower under any reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, whether now or hereafter in
effect, or if there is commenced against Borrower any such
action, or Borrower by any act indicates its consent to or
approval of any trustee for Borrower or any substantial part
of its property, or suffers any such receivership or trustee
to continue undischarged;
8. MISCELLANEOUS.
A. EXPENSES. Borrower agrees to pay all out-of-pocket expenses of
Lender in connection with this Agreement and the collection of
the Note. Borrower also agrees to pay all reasonable
attorney's fees and all expenses incurred in recording the
documents securing the Loan. To the extent not prohibited by
applicable law, Borrower will pay all costs and expenses and
reimburse Lender for any and all expenditures of every
character incurred or expanded from time to time, regardless
of whether or not a default shall have occurred, in connection
with Lender's evaluating, monitoring, administering and
protecting the Collateral, and creating, perfecting and
realizing upon Lender's security interest in and liens on the
Collateral, and all costs and expenses relating to Lender's
exercising any of its rights and remedies hereunder or at law,
including, without limitation, all appraisal fees, consulting
fees, filing fees,
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taxes, brokerage fees and commissions, fees incident to
security interest, lien and other title searches and reports,
escrow fees, attorney's fees, legal expenses, court costs,
auctioneer fees and expenses, other fees and expenses incurred
in connection with liquidation or sale of Collateral and all
other professional fees. Any amount to be paid hereunder by
Borrower to Lender shall be a demand obligation owing by
Borrower to Lender and, to the extent not prohibited by
applicable law, shall bear interest from the date of
expenditure until paid at the maximum nonusurious rate of
interest from time to time permitted by applicable law.
B. CUMULATIVE RIGHTS AND NO WAIVER. Each and every right granted
to Lender hereunder or under any other document delivered
hereunder or in connection herewith, or allowed it by law or
equity shall be cumulative of and may be exercised in addition
to any and all other rights of Lender, and no delay in
exercising any right shall operate as a waiver thereof, nor
shall any single or partial exercise by Lender of any right
preclude any other or future exercise thereof or the exercise
of any other right. Any of the foregoing covenants and
agreements may be waived by Lender but only in writing signed
by a a Vice President or higher level officer of Lender.
Borrower expressly waives any presentment, demand, protest or
other notice of any kind.
No notice to or demand on Borrower in any case shall, of
itself, entitle Borrower to any other or further notice or
demand in similar or other circumstances. No delay or omission
by Lender in exercising any power or right hereunder shall
impair any such right or power to be construed as a waiver
thereof or any acquiescence therein, nor shall any single or
partial exercise of any such power preclude other or further
exercise thereof, or the exercise of any other right or power
hereunder.
C. APPLICABLE LAW. This Agreement and the rights and obligations
of the parties hereunder shall be governed by and interpreted
in accordance with the laws of the State of Texas and
applicable federal law. The parties hereto intend to conform
strictly to the applicable usury laws. In no event shall the
amount paid or agreed to be paid to Lender exceed the maximum
amount permissible under applicable law.
D. AMENDMENT. No modification, consent, amendment or waiver of
any provision of this Agreement, nor consent to any departure
by Borrower therefrom, shall be effective unless the same
shall be in writing and signed by a Vice President or higher
level officer of Lender, and then shall be effective only in
the specific instance and for the purpose for which given.
This Agreement is binding upon Borrower, its successors and
assigns, and inures to be benefit of Lender, its successors
and assigns.
9. ADDITIONAL PROVISIONS (which shall be controlling in the event of any
conflict with the preceding provisions).
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A. Borrower shall permit Lender to enter upon its operating
premises maintained by it and any other location where the
Collateral is stored, for the purpose of inspection of the
Collateral at reasonable times as the Lender may request from
time to time.
B. An aging of accounts receivable and a list of inventory is
required quarterly delivered to Lender within 30 days of the
end of each calendar quarter.
C. Advances under the line of credit will be limited to a
borrowing base of 75% of eligible trade accounts receivable 90
days old or less, and 25% of inventory.
Borrower and Guarantor hereby acknowledge and agree that this Agreement is on a
parity with the Note of even date herewith in the original principal sum of
$2,000,000.00 executed by BODYBILT SEATING, INC., a Texas Corporation, payable
to FIRST NATIONAL BANK OF XXXXX, and the undersigned agrees that default on the
$2,000,000.00 note or in the payment of the amount due hereunder shall, at the
option of First National Bank of Bryan, ipso facto constitute default in the
other.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date above first written.
BodyBilt Seating, Inc. The First National Bank of Bryan
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(Borrower) (Lender)
By: By:
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Its Its
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EXHIBIT 10(a)(1) - SCHEDULE OF SIMILAR LOAN AGREEMENTS
Lender: . . . . . . . . . . The First National Bank of Xxxxx
0000 Xxxxx Xxxxxx
XX Xxx 000
Xxxxx, Xxxxx 00000
Borrower: . . . . . . . . . BodyBilt Seating, Inc.
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxx 00000
Date: . . . . . . . . . . . May 1, 1995
Loan Type: . . . . . . . . . Revolving Line of Credit (#033-118-60)
Amount: . . . . . . . . . . $1 million
Expiration: . . . . . . . . April 30, 1996
Minimum Advance/
Repayment: . . . . . . . . . $25,000 until April 30, 1996
Repayment: . . . . . . . . . Monthly installments of principal due plus
interest from May 31, 1996 to April 30, 1999
