CHANGE IN TERMS AGREEMENT
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Principal
$3,898,161.13
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Loan
Date
05-01-2008
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Maturity
05-01-2013
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Loan
No
0000000000
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Call
/ Coll
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Account
0000128524
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Officer
322
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Initials
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References
in the boxes above are for Xxxxxx’s use only and do not limit the
applicability of this document to any particular loan or
item.
Any
item above containing “***’ has been omitted due to text length
limitations.
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ART’S-WAY MANUFACTURING CO., INC. (TIN:
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Lender:
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WEST BANK
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00-0000000)
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MAIN BANK
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0000 XXXXXXX 0 XXXX,
PO BOX 288
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0000
00XX XXXXXX
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WEST
DES MOINES, IA 50265
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(000)
000-0000
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Principal
Amount: $3,898,161.13
Interest
Rate: 5.750%
Date
of Agreement: May 1, 2008
DESCRIPTION
OF EXISTING INDEBTEDNESS.
LOAN
#1260080536 IN THE ORIGINAL AMOUNT OF $4,100,000.00 DATED 06/07/07 WITH A
MATURITY DATE OF 05/01/17.
DESCRIPTION
OF COLLATERAL.
UNLIMITED SECURED GUARANTEES OF ARTS-WAY SCIENTIFIC, INC, AND ARTS-WAY VESSELS,
INC.; SECURITY AGREEMENTS DATED 04/25/03 AND 04/20/07; REAL ESTATE MORTGAGES
DATED 04/25/03, 10/09/07, AND 11/30/07.
DESCRIPTION
OF CHANGE IN TERMS.
MODIFY
MATURITY DATE, INTEREST RATE AND PAYMENTS.
PROMISE
TO PAY. ART’S-WAY MANUFACTURING CO., IN. (“Borrower”) promises to pay to WEST
BANK (“Lender”), or order, in lawful money of the United States of America, the
principal amount of Three Million Eight Hundred Ninety-eight Thousand One
Hundred Sixty-one & 13/100 Dollars ($3,898,161.13), together with interest
at the rate of 5.750% per annum on the unpaid principal balance from May 1,
2008, until paid in full. The interest rate may change under the terms and
conditions of the “INTEREST AFTER DEFAULT” section.
PAYMENT.
Borrower will pay this loan in 59 regular payments of $42,500.00 each and one
irregular last payment estimated at $2,304,789.08. Xxxxxxxx’s first payment is
due June 1, 2008, and all subsequent payments are due on the same day of each
month after that. Xxxxxxxx’s final payment will be due on May 1, 2013, and will
be for all principal and all accrued interest not yet paid. Payments include
principal and interest. Unless otherwise agreed or required by applicable law,
payments will be applied first to any accrued unpaid interest; then to
principal; then to any unpaid collection costs; and then to any late charges.
Interest on this loan is computed on a 365/360 simple interest basis; that
is,
by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. Borrower will pay Lender at
Xxxxxx’s address shown above or at such other place as Lender may designate in
writing.
MAXIMUM
INTEREST RATE.
Under no
circumstances will the interest rate on this loan exceed (except for any higher
default rate shown below) the lesser of 7.500% per annum or the maximum rate
allowed by applicable law.
PREPAYMENT
PENALTY; MINIMUM INTEREST CHARGE.
In any
event, even upon full prepayment of this Agreement, Xxxxxxxx understands that
Lender is entitled to a minimum
interest charge of $7.50.
Upon
prepayment of this Agreement, Xxxxxx is entitled to the following prepayment
penalty: 3% IF REFINANCED ELSEWHERE.
Other
than Xxxxxxxx’s obligation to pay any minimum interest charge and prepayment
penalty, Borrower may pay all or a portion of the amount owed earlier than
it is
due. Early payments will not, unless agreed to by Xxxxxx in writing, relieve
Xxxxxxxx of Xxxxxxxx’s obligation to continue to make payments under the payment
schedule. Rather, early payments will reduce the principal balance due and
may
result in Xxxxxxxx’s making fewer payments. Xxxxxxxx agrees not to send Lender
payments marked “paid in full”, “without recourse”, or similar language. If
Borrower sends such a payment, Xxxxxx may accept it without losing any of
Xxxxxx’s rights under this Agreement, and Borrower will remain obligated to pay
any further amount owed to Lender. All written communications concerning
disputed amounts, including any check or other payment instrument that indicates
that the payment constitutes “payment in full” of the amount owed or that is
tendered with other conditions or limitations or as full satisfaction of a
disputed amount must be mailed or delivered to: WEST BANK, MAIN BANK, 0000
00XX
XXXXXX,
XXXX XXX XXXXXX, XX 00000.
LATE
CHARGE.
If a
payment is 11 days or more late, Borrower will be charged $15.00.
INTEREST
AFTER DEFAULT.
Upon
default, including failure to pay upon final maturity, the interest rate on
this
loan shall be increased by 2.000 percentage points. However, in no event will
the interest rate exceed the maximum interest rate limitations under applicable
law.
DEFAULT.
Each of
the following shall constitute an Event of Default under this
Agreement:
Payment
Default.
Borrower
fails to make any payment when due under the Indebtedness.
Other
Defaults.
Borrower
fails to comply with or to perform any other term, obligation, covenant or
condition contained in this Agreement or in any of the Related Documents or
to
comply with or to perform any term, obligation, covenant or condition contained
in any other agreement between Lender and Borrower.
Default
in Favor of Third Parties.
Borrower
defaults under any loan, extension of credit, security agreement, purchase
or
sales agreement, or any other agreement, in favor of any other creditor or
person that may materially affect any of Borrower’s property or ability to
perform Borrower’s obligations under this Agreement or any of the Related
Documents.
False
Statements.
Any
warranty, representation or statement made or furnished to Lender by Borrower
or
on Borrower’s behalf under this Agreement or the Related Documents is false or
misleading in any material respect, either now or at the time made or furnished
or becomes false or misleading at any time thereafter.
Insolvency.
The
dissolution or termination of Xxxxxxxx’s existence as a going business, the
insolvency of Xxxxxxxx, the appointment of a receiver for any part of Xxxxxxxx’s
property, any assignment for the benefit of creditors, any type of creditor
workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.
Creditor
or Foreiture Preceedings.
Commencement of foreclosure or forfeiture proceedings, whether by judicial
proceeding, self-help, repossession or any other method, by any creditor of
Borrower or by any governmental agency against any collateral securing the
Indebtedness. This includes a garnishment of any of Borrower’s accounts,
including deposit accounts, with Lender. However, this Event of Default shall
not apply if there is a good faith dispute by Xxxxxxxx as to the validity or
reasonableness of the claim which is the basis of the creditor or forfeiture
proceeding and if Borrower gives Xxxxxx written notice of the creditor or
forfeiture proceeding and deposits with Lender monies or a surety bond for
the
creditor or forfeiture proceeding, in an amount determined by Lender, in its
sole discretion, as being adequate reserve or bond for the dispute.
Events
Affecting Guarantor. Any
of
the preceding events occurs with respect to any guarantor, endorser, surety,
or
accommodation party of any of the Indebtedness or any guarantor, endorser,
surety, or accommodation party dies or becomes incompetent, of revokes or
disputes the validity of, or liability under, any Guaranty of the indebtedness
evidenced by this Note.
Change
In Ownership. Any
change in ownership of twenty-five percent (25%) or more of the common stock
of
Borrower.
Adverse
Change. A
material adverse change occurs in Borrowers financial condition, or Xxxxxx
believes the prospect of payment or performance of the Indebtedness is
impaired.
Insecurity.
Lender
in
good faith believes itself insecure.
Cure
Provisions. If
any
default, other than a default in payment is curable and if Borrower has not
been
given a notice of a breach of the same provision of this Agreement within the
preceding twelve (12) months, it may be cured if Borrower, after receiving
written notice from Lender demanding cure of such default; (1) cures the default
within twenty (20) days; or (2) if the cure requires more than twenty (20 )
days, immediately initiates steps which Lender deems in Lender’s sole discretion
to be sufficient to cure the default and thereafter continues and completes
all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical.
XXXXXX’S
RIGHTS
Upon
default, Xxxxxx may declare the entire unpaid principal balance under this
Agreement and all accrued unpaid interest immediately due, and then Borrower
will pay that amount.
ATTORNEYS’
FEES; EXPENSES Lender
may hire
or pay someone else to help collect this Agreement if Borrower does not pay.
Borrower will pay Lender that amount. This includes, subject to any limits
under
applicable law, Xxxxxx’s attorneys’ fees and Lenders’ legal expenses, whether or
not there is a lawsuit, including without limitation all attorneys’ fees and
legal expenses for bankruptcy proceedings (including efforts to modify or vacate
any automatic stay or injunction), and appeals. If not prohibited by applicable
law, Xxxxxxxx also will pay any court costs, in addition to all other sums
provided by law.
GOVERNING
LAW. This Agreement will be governed by federal law applicable to Lender and,
to
the extent not preempted by federal law, the laws of the State of Iowa without
regard to its conflicts of law provisions. This Agreement has been accepted
by
Xxxxxx in the State of Iowa.
CHOICE
OF VENUE. If
there
is a lawsuit, Xxxxxxxx agrees upon Xxxxxx’s request to submit to the
jurisdiction of the courts of POLK County, State of Iowa.
RIGHT
OF SETOFF. To
the
extent permitted by applicable law, Lender reserves a right of setoff in all
Borrower’s accounts with Lender (whether checking, savings, or some other
account). This includes all accounts Borrower holds jointly with someone else
and all accounts Borrower may open in the future. However, this does not include
any IRA or Xxxxx accounts, or any trust accounts for which setoff would be
prohibited by law. Borrower authorizes Xxxxxx, to the extent permitted by
applicable law, to charge or setoff all sums owing on the indebtedness against
any and all such accounts, and, at Xxxxxx’s option, to administratively freeze
all such accounts to allow Lender to protect Xxxxxx’s charge and setoff rights
provided in this paragraph.
COLLATERAL.
Borrower
acknowledges this Agreement is secured by UNLIMITED SECURED GUARANTEES OF
ARTS-WAY SCIENTIFIC, INC, AND ARTS-WAY VESSELS, INC.; SECURITY AGREEMENTS DATED
04/25/03 AND 04/20/07; REAL ESTATE MORTGAGES DATED 04/25/03, 10/09/07, AND
11/30/07.
CONTINUING
VALIIDITY. Except
as
expressly changed by this Agreement, the terms of the original obligation or
obligations, including all agreements evidenced or securing the obligation(s),
remain unchanged and in full force and effect. Consent by Xxxxxx to this
Agreement does not waive Xxxxxx’s right to strict performance of the
obligation(s) as changed, nor obligate Lender to make any future change in
terms. Nothing in this Agreement will constitute a satisfaction of the
obligation(s). It is the intention of Lender to retain as liable parties all
makers and endorsers of the original obligation(s), including accommodation
parties, unless a party is expressly released by Xxxxxx in writing. Any maker
or
endorser, including accommodation makers, will not be released by virtue of
this
Agreement. If any person who signed the original obligation does not sign this
Agreement below, then all persons signing below acknowledge that this Agreement
is given conditionally, based on the representation to Lender that the
non-signing party consents to the changes and provisions of this Agreement
or
otherwise will not be released by it. This waiver applies not only to any
initial extension, modification or release, but also to all such subsequent
actions.
SUCCESSORS
AND ASSIGNS. Subject
to any limitations stated in this Agreement on transfer of Xxxxxxxx’s interest,
this Agreement shall be binding upon and inure to the benefit of the parties,
their successors and assigns. If ownership of the Collateral becomes vested
in a
person other than Xxxxxxxx, Lender, without notice to Xxxxxxxx, may deal with
Xxxxxxxx’s successors with reference to this Agreement and the Indebtedness by
way of forbearance or extension without releasing Borrower from the obligations
of this Agreement or liability under the Indebtedness.
MISCELLANEOUS
PROVISIONS. If
any
part of this Agreement cannot be enforced, this fact will not affect the rest
of
the Agreement. Lender may delay or forgo enforcing any of its rights or remedies
under this Agreement without losing them. Borrower and any other person who
signs, guarantees or endorses this Agreement, to the extent allowed by law,
waive presentment, demand for payment, and notice of dishonor. Upon any change
in the terms of this Agreement, and unless otherwise expressly stated in
writing, no party who signs this Agreement, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length
of
time) this loan or release any party or guarantor or collateral; or impair,
fail
to realize upon or perfect Lender’s security interest in the collateral; and
take any other action deemed necessary by Xxxxxx without the consent of or
notice to anyone. All such parties also agree that Xxxxxx may modify this loan
without the consent of or notice to anyone other than the party with whom the
modification is made. The obligations under this Agreement are joint and
several.
PRIOR
TO SIGNING THIS AGREEMENT, XXXXXXXX READ AND UNDERSTOOD ALL THE PROVISIONS
OF
THIS AGREEMENT. XXXXXXXX AGREES TO THE TERMS OF THE
AGREEMENT.
XXXXXXXX
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT
AND
ALL OTHER DOCUMENTS RELATING TO THIS DEBT.
BORROWER:
ART’S-WAY
MANUFACTURING CO., INC.
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BY:
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/S/
XXXXXX XXXXXXX
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XXXXXX
X. XXXXXXX, President of
ART’S-WAY
MANUFACTURING
CO.,
INC.
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