Exhibit 10(a)
SPECIAL ADVANCE AGREEMENT
This Special Advance Agreement is made this 28th day of June, 2000, by
and between MERCANTILE BANK MIDWEST ("Bank"), TOP AIR MANUFACTURING, INC., an
Iowa corporation ("Top Air"), XXXXXX INDUSTRIES, INC., an Iowa corporation
("Xxxxxx"), and XXXXXX ACQUISITION SUB, INC., an Iowa corporation ("Xxxxxx
Sub").
RECITALS
WHEREAS, Top Air and Bank entered into a November 2, 1998, Loan
Agreement, which was modified by a March 4, 1999, Modification Agreement,
further modified by an Agreement dated January 28, 2000, and further modified by
an Agreement dated April 18, 2000 (collectively, the "Loan Agreement"); and
WHEREAS, Top Air borrowed money pursuant to said Loan Agreement
evidenced by promissory note No. 254839 dated March 4, 1999, as extended by a
written Loan Extension Agreement dated November 10, 1999, (collectively, the
"Note"), which Note was extended and replaced by an Overadvance Line of Credit
Promissory Note and a Line of Credit Promissory Note, (collectively, the "New
Notes") pursuant to the January 28, 2000 Agreement, term note No. 211094 and
term note No. 300822 (collectively, the "Term Notes"); and
WHEREAS, the Note, New Notes and Term Notes continue to be secured by
certain assets of Top Air and certain assets of Top Air's subsidiaries, Xxxxxx
and Xxxxxx Sub, all as provided under the Loan Agreement, Note, New Notes and
Term Notes; and
WHEREAS, Bank and Top Air have agreed, notwithstanding the limitations
otherwise contained in the Loan Agreement, Note, New Notes and Term Notes, that
Bank will make a special advance to Top Air under the Line of Credit Promissory
Note on the terms and conditions of this Agreement as hereinafter set forth;
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Contemporaneously with the execution of this Agreement, Bank shall
make a one-time special advance to Top Air on the Line of Credit Promissory Note
in the principal amount of $200,000.00. Top Air acknowledges and agrees that
Bank has no obligation to make such an advance under the terms of the Loan
Agreement, Note, New Notes and Term Notes, and that the special advance made by
Bank pursuant to this Agreement is a one-time special exception to the existing
terms and conditions of the Loan Agreement, Note, New Notes and Term Notes.
2. The one-time special advance made by Bank under this Agreement shall
be secured by the same property, and receive the same treatment as all other
advances under the Line of Credit Promissory Note, except that interest shall
accrue on the one-time special advance at a variable rate equal to the Bank
Prime Rate plus 4%, and the entire one-time special advance, and all accrued
interest thereon, shall be due and payable in full on July 10, 2000. Top Air
acknowledges and agrees that it will repay the one-time special advance from
additional capital contributions, and not from any other property securing its
obligations to Bank.
3. In consideration of the special advance, Top Air shall pay Bank with
the execution of this Agreement an origination fee of $1,184.00.
4. To induce Bank to enter this Agreement, Top Air:
a. Warrants that it has no existing defenses or right of offset
against the Note, New Notes, Terms Notes, Loan Agreement or any
other document executed in connection therewith:
b. Reaffirms all of its obligations under the Loan Agreement, Note,
New Notes, Term Notes and any other documents executed in
connection therewith;
c. Warrants that since the Note, New Notes, Term Notes and Loan
Agreement were signed by Top Air, the ownership of the property
securing the Note, New Notes and Term Notes has not been altered
nor has any lien or claim been filed or threatened to be filed
against the property securing Top Air's obligations to Bank;
d. For itself, its successors and assigns, hereby irrevocably and
unconditionally releases and forever discharges Bank, its
employees, officers, attorneys, representatives and assigns from
any and all claims and defenses with respect to the Note, New
Notes, Term Notes, Loan Agreement and any other documents
executed in connection therewith that have been or could be
asserted against Bank as of the date of this Agreement.
5. Each party is executing this Agreement solely in reliance upon their
own knowledge, belief and judgment and not upon the representations made by any
other party or others on their behalf.
6. This Agreement shall be binding upon and inure to the benefit of and
shall be enforceable by the parties hereto, their respective personal
representatives, heirs, administrators, successors and assigns.
7. Except as modified by this Agreement, all of the terms and
conditions of the Note, New Notes, Term Notes and Loan Agreement remain
unchanged and in full force and effect.
8. No delay or failure by Bank to exercise any right under this
Agreement, and no partial or single exercise of that right, shall constitute a
waiver of that or any other right, unless otherwise expressly provided by Bank.
9. No further modifications of any kind, whether oral or written, shall
be made or accepted with respect to any of Top Air's obligations to the Bank,
except as may be agreed to and confirmed in writing between the parties'
attorneys.
10. Top Air acknowledges receiving a copy of this Agreement.
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.
TOP AIR MANUFACTURING, INC. MERCANTILE BANK MIDWEST
By: /s/ Xxxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxx
--------------------------------- --------------------------------
Xxxxxx X. Xxxx Xxxxxx X. Xxxxx
President and Chief Executive Vice President
Officer
XXXXXX INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxx
--------------------------------
Xxxxxx X. Xxxx
President
XXXXXX ACQUISITION SUB, INC.
By: /s/ Xxxxxx X. Xxxx
--------------------------------
Xxxxxx X. Xxxx
President
