LOAN EXTENSION AGREEMENT
for Promissory Note held by
MERCANTILE BANK MIDWEST
1. DATE AND PARTIES. The date of this Extension Agreement (Agreement) is
November 10, 1999 and the parties are the following:
BORROWER:
TOP AIR MANUFACTURING, INC an Iowa corporation 317 Savannah Park Rd
Cedar Falls, Iowa 50613 Tax I.D. # 42-1155462
BANK:
MERCANTILE BANK MIDWEST
an IOWA banking corporation
425 Cedar Street
P.O. Box 88
Waterloo, Iowa 50704
Tax I.D. # 42-0167390
2. BACKGROUND. Borrower executed a promissory note payable to the order of
Bank dated March 4, 1999, (Note) evidencing a revolving draw loan
(Loan) which Note is further described as follows: Note number 254839,
in the principal amount of $6,000,000.00, and payable on November 10,
1999. As of the date of this Agreement, the principal balance on the
Note is $1,909,000.00. The total amount currently due on the Note is
$1,909,000.00. Borrower and Bank hereby agree to extend the Note on the
terms contained in this Agreement.
3. SECURITY. To the extent not prohibited by law, the Note is and shall
continue to be secured by virtue of cross-collateralization by the
following described security agreements: A Security Agreement dated
November 2, 1998. However, the Note will not be secured by such
security agreements if:
A. Bank fails to make any disclosure of the existence of the
security agreements as required by law; or
B. to the extent such security agreements are "consumer" loans in
"household goods" (as those terms are defined in applicable
federal regulations governing unfair and deceptive credit
practices); or
C. to the extent such security agreements are in margin stock
subject to the requirements of 12 C.F.R. Section 207 or 221.
4. TERMS. Borrower shall pay Bank as follows:
A. The Note is hereby amended to provide that from the date of this
Agreement, the principal of $6,000,000.00 (Principal) or so much
thereof as may, from time to time, be advanced to Borrower
hereunder will accrue Interest from the date of disbursement, on
the unpaid principal balance at an annual rate equal to .5
percentage point below Bank's Prime Rate, as adjusted and
announced from time to time until the Note matures or the
obligation is accelerated. The Prime Rate, minus .5 percentage
points, may also be referred to hereafter as the "Contract Rate".
"Prime Rate" shall mean a rate per annum equal to the interest
rate announced from time to time by Mercantile Bank National
Association as its "prime rate" on Commercial loans (which rate
shall fluctuate as and when said prime rate shall change). The
Contract Rate is the sum of Bank's Prime Rate (8.25%) minus .5
percentage point. The effective Contract Rate today is 7.75%.
Bank's Prime Rate today is not necessarily the lowest rate at
which Bank lends its funds. The Prime Rate is only an index rate
from which Interest rates actually charged to customers may be
measured. The use of the Prime Rate is for convenience only and
does not constitute a commitment by Bank to lend money at a
preferred rate of interest. The Prime Rate is a benchmark for
pricing certain types of loans. Depending on the circumstances,
such as the amount and term of the loan, the creditworthiness of
the borrower or any guarantor, the presence and nature of
collateral and other relationships between a borrower and Bank,
loans may be priced at, above or below the Prime Rate.
All adjustments to the Contract Rate will be made on each day
that the Prime Rate changes. Any increase to the Prime Rate may
be carried over to a subsequent adjustment date without resulting
in a waiver or forfeiture of such adjustment, provided an
adjustment to the Contract Rate is made within one year from the
date of such increase. Any change in the Contract Rate will take
the form of different payment amounts. After maturity or
acceleration, the unpaid balance shall bear interest at the rate
specified in the Note until paid. The Loan and the Note are
limited to the maximum lawful amount of interest (Maximum Lawful
Interest) permitted under federal and state laws. If the interest
accrued and collected exceeds the Maximum Lawful Interest as of
the time of collection, such excess shall be applied to reduce
the principal amount outstanding, unless otherwise required by
law. If or when no principal amount is outstanding, any excess
interest shall be refunded to Borrower according to the actuarial
method. Interest shall be computed on the basis of the actual
calendar year and the actual number of days elapsed.
B. Accrued Interest is due and payable in I monthly payments on the
10th day of each month, beginning December 10, 1999, or the day
following if the payment day is a holiday or is a non-business
day for Bank. Unless paid prior to maturity, the last scheduled
payment plus all unpaid principal, accrued interest, costs and
expenses are due and payable on January 10, 2000, which is the
date of maturity. If the Contract Rate changes, any remaining
payments may be a different amount. All amounts shall be paid in
legal U.S. currency. Any payment made with a check will
constitute payment only when collected.
C. This Agreement evidences an extension on a revolving draw note
and all advances shall be made at the sole discretion of Bank.
The amount of advances under the Loan that are outstanding and
unpaid shall never exceed $6,000,000.00. Interest shall accrue
only on the amount of outstanding principal that is drawn and
unpaid under the Loan and this Agreement.
5. WARRANTIES. To induce Bank to enter into this Agreement, Borrower
warrants that:
A. Borrower has no existing defenses or right of offset against the
Note or any documents securing the Note.
B. Borrower reaffirms all of the terms of the Note and any documents
securing the Note.
C. Since the Note was signed by Borrower, the ownership of the
property securing the Note has not been altered nor has any lien
or claim been filed or threatened to be filed against the
property (other than Bank's lien securing the Note).
6. YEAR 2000 COMPLIANCE. As of the date of this Agreement, Borrower has
assessed the risk of Year 2000 noncompliance and has formulated,
approved, and implemented a comprehensive business plan (Year 2000
Plan) to meet "Year 2000 requirements." "Year 2000 requirements"
include analyzing, programming, and testing all of Borrower's
information technology systems to accurately process date and time
data, including, but not limited to, calculating, comparing, and
sequencing functions. "Year 2000 requirements" apply to all systems or
processes that directly or indirectly affect Borrower's business, such
as accounting and processing procedures, as well as basic electronic
devices that are necessary to facility management, such as security
systems, elevators, and telephones. Borrower's Year 2000 Plan includes
an allocation of resources toward meeting Year 2000 requirements, an
inventory of all affected systems, processes to assess and prepare for
the interaction of Borrower's systems with external systems, periodic
testing and evaluation of progress under Borrower's Year 2000 Plan, and
contingency arrangements for Year 2000 failure, either by Borrower or
Borrower's partners, affiliates, vendors, or customers.
Borrower will take all measures necessary to fulfill the requirements
of Borrower's Year 2000 Plan and meet all Year 2000 requirements as
specified above. Borrower agrees to make Borrower's Year 2000 Plan
available to Bank, if requested, and will keep Bank informed of
progress made under Borrower's Year 2000 Plan. Borrower will
immediately notify Bank of any actual or anticipated delays in meeting
dates designated in Borrower's Year 2000 Plan or failure to accomplish
any objectives of Borrower's Year 2000 Plan. Borrower will allow Bank,
or a third party Bank designate, reasonable access to Borrower's
information technology systems for the purpose of determining progress
made under Borrower's Year 2000 Plan. Borrower agrees that Bank has no
responsibility for managing, advising, or executing any of Borrower's
efforts to comply with Year 2000 requirements or Borrower's Year 2000
Plan.
7. CONTINUATION OF PROVISIONS. Except as expressly modified in this
Agreement, all of the provisions of the Note and any other documents
securing the Note remain in full force and effect.
8. GENERAL PROVISIONS.
A. TIME IS OF THE ESSENCE. Time is of the essence in Borrower's
performance of all duties and obligations imposed by this
Agreement.
B. NO WAIVER BY BANK. Bank's course of dealing, or Bank's
forbearance from, or delay in, the exercise of any of Bank's
rights, remedies, privileges or right to insist upon Borrower's
strict performance of any provisions contained in this Agreement,
or other loan documents, shall not be construed as a waiver by
Bank, unless any such waiver is in writing and is signed by Bank.
C. AMENDMENT. The provisions contained in this Agreement may not be
amended, except through a written amendment which is signed by
Borrower and Bank.
D. INTEGRATION CLAUSE. This written Agreement and all documents
executed concurrently herewith, represent the entire
understanding between the parties as to the Obligations and may
not be contradicted by evidence of prior, contemporaneous, or
subsequent oral agreements of the parties.
E. FURTHER ASSURANCES. Borrower agrees, upon request of Bank and
within the time Bank specifies, to provide any information, and
to execute, acknowledge, deliver and record or file such further
instruments or documents as may be required by Bank to secure the
Note or confirm any lien.
F. GOVERNING LAW. This Agreement shall be governed by the laws of
the State of IOWA, provided that such laws are not otherwise
preempted by federal laws and regulations.
G. FORUM AND VENUE. In the event of litigation pertaining to this
Agreement, the exclusive forum, venue and place of jurisdiction
shall be in the State of IOWA, unless otherwise designated in
writing by Bank or otherwise required by law.
H. SUCCESSORS. This Agreement shall inure to the benefit of and bind
the heirs, personal representatives, successors and assigns of
the parties; provided however, that Borrower may not assign,
transfer or delegate any of the rights or obligations under this
Agreement.
I. NUMBER AND GENDER. Whenever used, the singular shall include the
plural, the plural the singular, and the use of any gender shall
be applicable to all genders.
J. DEFINITIONS. The terms used in this Agreement, if not defined
herein, shall have their meanings as defined in the other
documents executed contemporaneously, or in conjunction, with
this Agreement.
K. PARAGRAPH HEADINGS. The headings at the beginning of any
paragraph, or any subparagraph, in this Agreement are for
convenience only and shall not be dispositive in interpreting or
construing this Agreement.
L. IF HELD UNENFORCEABLE. If any provision of this Agreement shall
be held unenforceable or void, then such provision to the extent
not otherwise limited by law shall be severable from the
remaining provisions and shall in no way affect the
enforceability of the remaining provisions nor the validity of
this Agreement.
M. CHANGE IN APPLICATION. Borrower will notify Bank in writing prior
to any change in Borrower's name, address, or other application
information.
N. NOTICE. AlI notices under this Agreement must be in writing. Any
notice given by Bank to Borrower hereunder will be effective upon
personal delivery or 24 hours after mailing by first class United
States mail, postage prepaid, addressed to Borrower at the
address indicated below Borrower's name on page one of this
Agreement. Any notice given by Borrower to Bank hereunder will be
effective upon receipt by Bank at the address indicated below
Bank's name on page one of this Agreement. Such addresses may be
changed by written notice to the other party.
9. ADDITIONAL TERMS. This loan is subject to the terms and conditions of a
Loan Agreement dated November 2, 1998.
10. RECEIPT OF COPY, Borrower acknowledges receiving a copy of this
Agreement.
<PAGE>
--------------------------------------------------------------------------------
IMPORTANT: READ BEFORE SIGNING.
THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN
WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS
WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS
AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
--------------------------------------------------------------------------------
BORROWER:
TOP AIR MANUFACTURING, INC an
Iowa corporation
[Corporate Seal*]
By: /s/ Steven R. Lind
--------------------------------------
STEVE R. LIND, PRESIDENT
(*Corporate seal may be affixed, but failure to affix shall not affect validity
or reliance.)
APPROVED: November 10, 1999
BANK:
MERCANTILE BANK MIDWEST
an IOWA banking corporation
[Corporate Seal*]
By: /s/ Steve D. Brewer
------------------------------
STEVE D. BREWER,
EXEC. VICE PRESIDENT
(*Corporate seal may be affixed, but failure to affix shall not affect validity
or reliance.)
THIS IS THE LAST PAGE OF A 2 PAGE DOCUMENT. EXHIBITS AND/OR ADDENDA MAY FOLLOW.
