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EXHIBIT 6.30
LOAN AGREEMENT
Date April 30, 1996
COMMERCE NATIONAL BANK
X.X. Xxx 00000
Xxxxxxx Xxxxxxx, XX 00000
Attention: XXXXXX X. XXXXXXXXXXX, III
EXECUTIVE VICE PRESIDENT
Gentlemen:
The undersigned, Neutral Posture Ergonomics, Inc. ("Borrower"), a Corporation
duly organized, existing and in good standing under the laws of the State of
Texas and with its principal office, place of record-keeping and mailing
address located at 0000 Xxxxxxxx Xxx., Xxxxx, Xxxxx 00000, has applied to you
(Bank") for a loan to be evidenced by Borrower's promissory note ("Note") dated
April 30, 1996, in the principal sum of $500,000.00, payable to the order of
Bank as therein specified. In consideration of Bank making such loan, Borrower
agrees with Bank as follows:
1. Representations and Warranties. Borrower represents and warrants to
Bank that:
a. The foregoing statements concerning Borrower are true and
correct;
b. The borrowing hereunder and the execution, delivery, and
performance by Borrower of this Agreement, the Note and any
other agreements contemplated in connection herewith have been
duly authorized by all necessary action of borrower and are
not in contravention of any law, rule, or regulation or of the
terms of Borrower's articles of incorporation (or partnership)
or bylaws or of any agreement or instrument to which Borrower
is a party or by which it may be bound;
c. Each financial statement of Borrower herewith or heretofore
delivered to Bank was prepared in conformity with generally
accepted accounting principles applied on a basis consistent
with that of previous such statements and truly disclosed
Borrower's financial condition (including all of Borrower's
contingent liabilities) as of the date thereof and the results
of its operations for the period covered thereby, and there
has been no material adverse change in Borrower's financial
condition and operations subsequent to the date of the most
recent financial statement of Borrower delivered to Bank;
d. No litigation or governmental proceeding is pending, or, to
the knowledge of any of Borrower's officers, threatened
against or affecting Borrower, which may result in any
material adverse change in Borrower's business, properties or
operations;
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e. Borrower is not the lessee of any real or personal property
except as has been disclosed in writing to the above-named
officer of Bank;
f. None of Borrower's assets is subject to any lien, security
interest or other encumbrance except as has been disclosed in
writing to the above-named officer of Bank;
g. No certificate or statement herewith or heretofore delivered
by Borrower to Bank in connection herewith, or in connection
with any transaction contemplated hereby, contains any untrue
statement of a material fact or fails to state any material
fact necessary to keep the statements contained therein from
being misleading.
2. Affirmative Covenants. Borrower covenants to:
a. Keep adequate records, in accordance with good accounting
practice, of all of its transactions so that at any time, and
from time to time, its true and complete financial condition
may be readily determined, and, at Bank's request, make such
records available for Bank's inspection and permit Bank to
make and take away copies thereof;
b. Promptly, and in any event within 15 days, after the close of
each Quarterly period of each fiscal year of Borrower (except
the last such period in each such fiscal year), deliver to
Bank a financial report consisting of Borrower's balance sheet
as of the end of such period and a profit and loss statement
and reconciliation of surplus from the beginning of such
fiscal year to the end of such period, which financial report
shall be prepared in such form and detail as Bank may request
and shall be in conformity with generally accepted accounting
principles applied on a basis consistent with that of the
preceding fiscal year and shall be certified to be true and
correct by Borrower's chief financial officer;
c. Within 90 days after the close of each fiscal year of
Borrower, deliver to Bank a copy of the annual audit report of
Borrower, prepared in conformity with generally accepted
accounting principles applied on a basis consistent with that
of the preceding fiscal year, and signed by independent
certified public accountants satisfactory to Bank;
d. Promptly, and in any event within 30 days, after the close of
each fiscal year of Borrower, deliver to Bank a certificate
signed by Borrower's chief financial officer and containing a
statement whether, to the knowledge of such officer, a Default
(as hereinafter defined) has occurred and is continuing (or in
any event which might become a Default after the lapse of time
or the giving of notice, or both), and if the certificate
shows that a Default has occurred and is continuing, it shall
also specify what steps are being taken by Borrower to cure
the same;
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e. Promptly inform Bank of any litigation, or of any claim or
controversy which might become the subject of litigation,
against Borrower or affecting any of Borrower's property, if
such litigation or potential litigation might, in the event of
an unfavorable outcome, have a material adverse effect on
Borrower's financial condition or might cause a Default;
f. Promptly furnish to Bank, at Bank's request, such additional
financial or other information concerning the assets,
liabilities, operations and transactions of Borrower as Bank
may from time to time reasonably request;
g. Promptly pay when due any and all taxes, assessments and
governmental charges upon Borrower or against any of
Borrower's property, unless the same is being contested in
good faith by appropriate proceedings and reserves deemed
adequate by Bank have been established therefor;
h. Properly pay all lawful claims, whether for labor, materials
or otherwise, which might or could, if unpaid, become a lien
or charge on any property or assets of Borrower, unless and to
the extent only that the same are being contested in good
faith by appropriate proceedings and reserves deemed adequate
by Bank have been established therefor;
i. Maintain its existence and promptly and properly comply with
all laws, statutes, ordinances and governmental regulations
applicable to it or to any of its property, business
operations and transactions;
j. Maintain, with financially sound and reputable insurance
companies or associations, insurance of the kinds, covering
the risks and in the relative proportionate amounts, usually
carried by companies engaged in businesses similar to that of
Borrower (such insurance to be in any event in such amounts
and covering such risks as shall be satisfactory to Bank),
and, at Bank's request, deliver to Bank evidence of the
maintenance of such insurance;
k. Maintain all of its tangible property in good condition and
repair, and make all necessary replacements thereof, and
operate the same properly and efficiently; and
l. Preserve and maintain all licenses, privileges, franchises,
certificates and the like necessary for the operation of its
business.
3. Negative Covenants. Until the note and all other obligations and
liabilities of Borrower hereunder are fully paid, Borrower covenants
that it will not, without the prior written consent of Bank:
a. Permit its working capital (being the excess of its current
assets over its current liabilities) to be less than
$100,000.00, or permit the ratio of its current assets to its
current liabilities to be less than 1.08;
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b. Permit its net worth to be less than $200,000.00, or permit
the ratio of its total liabilities to its net worth to exceed
3.00;
c. Invest in fixed assets in excess of $450,000.00 in any 12-
month period; Primarily for Injection Molds for Chair
Manufacturing;
d. In any year pay or contract to pay in the aggregate any
salaries, commissions, bonuses or other compensation in excess
of the following amounts for the following persons or groups:
Name of Person or Group Amount
N/A N/A
e. Hereafter incur or assume any indebtedness for borrowed money
except to Bank; Excepts for the Accounts Receivable Line with
Fidelity Funding, Inc.;
f. Endorse, guarantee, or otherwise become surety for or
contingently liable upon, the obligations of any person, firm
or corporation (provided, however, that the foregoing shall
not apply to endorsements of negotiable instruments by
Borrower in the ordinary course of business);
g. Mortgage, assign, hypothecate, grant a security interest in,
or encumber any of Borrower's assets, except to Bank
(provided, however, that the foregoing shall not apply to
liens for taxes which are not delinquent or which are being
contested in good faith, mechanic's and materialmen's liens
with respect to obligations which are not overdue or which are
being contested in good faith, and liens resulting from
deposits to secure the payments of workmen's compensation or
other social security or to secure the performance of bids or
contracts in the ordinary course of business);
h. Reorganize, merge or consolidate with, or acquire all or
substantially all of the assets of any other company, firm or
association, or make any other substantial change in its
capitalization or character of its business;
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 or purchase or redeem any of its stock;
j. Sell any of its assets used or useful in its business, except
in the regular course of business;
k. Sell any of its assets to any other person, firm, or
corporation with the understanding or agreement that such
assets shall be leased back to Borrower;
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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;
m. Make any loans or advances or sell any of its accounts
receivable with or without recourse; or
n. Enter into any lease in which the annual rental exceeds
$20,000.00 or permit the aggregate of all of its lease
payments to exceed $20,000.00 in any 12-month period.
4. Default. The term "Default" as used in this Agreement, means any one
or more of the following:
a. The failure of Borrower to pay the Note in accordance with its
terms;
b. The failure of Borrower to pay any other note in accordance
with its terms which at any time evidences indebtedness
(whether now existing or at any time hereafter arising) of
Borrower to Bank;
c. The failure of Borrower to perform any covenant or agreement
of Borrower contained herein or in any security agreement,
mortgage, deed of trust,, assignment or other contract
securing or assuring payment of any indebtedness (whether now
existing or at any time hereafter arising) of Borrower to
Bank;
d. The receipt by Bank of information establishing that any
statement or representation of Borrower contained herein or in
any other writing heretofore or hereafter furnished by
Borrower to Bank is false or misleading in any material
respect;
e. The insolvency of Borrower;
f. The appointment of a receiver of Borrower, or of all or any
substantial part of its property, and the failure of such
receiver to be discharged within thirty (30) days thereafter;
g. The adjudication of Borrower as a bankrupt;
h. The admission by Borrower in writing of its inability to pay
its debts generally as they become due;
i. The execution by Borrower of an assignment for the benefit of
its creditors;
j. The filing by Borrower of a petition to be adjudged a
bankruptcy, or a petition or answer seeking reorganization or
admitting the material allegations of a petition filed against
it in any bankruptcy or reorganization proceeding, or the act
of Borrower in instituting of voluntarily being or
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becoming a party to any other judicial proceeding intended to
effect a discharge of the debts of Borrower, in whole or in
part, or a postponement of the maturity or the collection
thereof, or a suspension of any of the rights or powers of a
trustee or of any of the rights of powers granted to Bank
herein or in any other documents executed in connection
herewith;
k. The failure of Borrower to pay any money judgment against it
before the expiration of sixty (60) days after such judgment
becomes final and no longer appealable; or
l. The failure of any attachment, sequestration or similar
proceeding against any of Borrower's property to remain
undischarged, unbonded by Borrower, or undismissed for a
period of sixty (60) days after the commencement thereof.
Upon the occurrence of a Default, Bank, at its option, without notice, demand
or presentment, which are hereby waived, may declare immediately due and
payable the entire unpaid balance of principal and all accrued interest then
unpaid on the Note and any other indebtedness of Borrower to Bank, and, upon
the exercise of such option, such entire unpaid balance of principal and
accrued interest shall become immediately due and payable.
5. Miscellaneous. 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 an officer of Bank, and then shall be effective only in the
specific instance and for the purpose for which given. 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 Bank in exercising any power
or right hereunder shall impair any such right or power or 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 of power
hereunder. All rights and remedies of Bank hereunder are cumulative
of each other and of every other right or remedy which Bank may
otherwise have at law or in equity or under any other contract or
document, and the exercise of one or more rights or remedies shall
not prejudice or impair the concurrent or subsequent exercise of other
rights or remedies. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted
principles of good accounting practice consistently applied on the
basis used by Borrower in prior years. This Agreement is binding upon
Borrower, its successors and assigns, and inures to the benefit of
Bank, its successors and assigns.
6. Additional Provisions (which shall be controlling to the extent of any
conflict with the preceding provisions):
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1. Loan Guarantors, Xxxxxx and Xxxx Xxxxxxxxx and Xxxxx and
Xxxxxxx Xxxxxxx agree to provide Lender with Annual Financial
Statements in a form acceptable to Bank.
Accepted: Very truly yours,
COMMERCE NATIONAL BANK NEUTRAL POSTURE ERGONOMICS, INC.
/s/ Xxxxxx X. Xxxxxxxxxxx, III /s/ Xxxxxxx Xxxxxxx
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Xxxxxx X. Xxxxxxxxxxx, III Xxxxxxx Xxxxxxx
Executive Vice President Chairman and Chief Executive Officer
/s/ Xxxx Xxxxxxxxx VP
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Xxxx Xxxxxxxxx
Vice President and Secretary
Date: 4-30-96 Date: 4-30-96
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