STATE OF SOUTH DAKOTA
BOARD OF ECONOMIC DEVELOPMENT
REVOLVING ECONOMIC DEVELOPMENT AND INITIATIVE FUND
(ARSD 68:02:01)
EMPLOYMENT AGREEMENT
REDI Loan Number 97-04-A
EMPLOYMENT AGREEMENT, made and entered into this 26th day of May, 1998,
by and between the State of South Dakota, Board of Economic Development, 000
Xxxxx Xxxxxx, Xxxxxx, Xxxxx Xxxxxx 00000 (herein "BED"), and Xxxx Company, of
000 Xxxxx Xxxxxx, Xxxx Xxxx, XX 00000 for a project at 000 X.X. 0xx Xxxxxx,
Xxxxxxx, Xxxxx Xxxxxx 00000,(xxxxxx the "Borrower").
WHEREAS, Xxxx Company, (the "Borrower") made an application (the
"Application") dated January 20, 1997, to BED for a loan from the Revolving
Economic Development and Initiative Fund (REDI), for the purposes of
Borrower's business expansion or relocation in the State of South Dakota (the
"Project"), as described with particularity in the Application and the BED
Loan Documents, which are by this reference incorporated herein; and,
WHEREAS, the Application was approved by BED and the Borrower and BED
entered into a certain Revolving Economic Development and Initiative Fund
(REDI) Loan Agreement dated the 26th day of May, 1998, (the "Loan Agreement"),
whereby BED loaned to Borrower from the REDI Fund the sum of $255,000.00,
together with interest thereon at 3.0% per annum, due and payable as set forth
in the Promissory Note of even date, all pursuant to SDCL Chapter 1-33 and 1-
16G, as amended, and ARSD Article 68:02 (the "BED Loan"); and,
WHEREAS, the BED Loan accrues interest at the rate of three_ percent per
annum, which interest rate is below the prevailing rate available from
commercial lending institutions at the time the BED Loan was made; and,
WHEREAS, part of the inducement and consideration for BED to make said
BED Loan to Borrower is the Project's creation of employment opportunities for
South Dakota citizens, as set forth in the projections made by Borrower in the
Application; and,
WHEREAS, failure of Borrower to meet the projections in the Application
will constitute a failure of consideration , and a default under the terms and
conditions of this Employment Agreement, the Loan Agreement, Promissory Note,
and other Loan Documents executed by Borrower and BED in connection with this
Application, BED Loan, and Project, all of which documents are incorporated by
reference herein;
NOW, THEREFORE IT IS MUTUALLY AGREED AS FOLLOWS:
1. The parties specifically agree that due to the nature of the
consideration for the BED Loan to the Borrower it is impracticable or
extremely difficult to fix the actual damages resulting from the breach of
this Employment Agreement, the Loan Agreement, the Promissory Note, or the
other Loan Documents.
2. The parties specifically agree that it will constitute a default
under the terms and conditions of this Employment Agreement and the Loan
Agreement if the Borrower fails to meet the employment projections set forth
in the Application, or substantially changes the nature of the Project or
ceases operations or relocates the business or Project from
Madison, South Dakota, so that there is a loss of the employment created by
the Project in that area of the State, within five years from the date of this
Employment Agreement or the term of the BED Loan whichever is longer. In the
event of default, BED at its sole option, may accelerate the payment of the
outstanding debt by providing written notice to the Borrower, and may declare
the entire unpaid principal sum including interest due thereon immediately due
and payable. Borrower shall, to the extent the principal amount of the BED
Loan shall not have been repaid, immediately repay the remaining principal
amount of the BED Loan in full, plus all unpaid accrued interest thereon, and,
in addition, shall pay liquidated damages, and if not paid within 10 days
thereof this Employment Agreement may be enforced through any remedy conferred
by the loan documents or any applicable law. It is agreed that liquidated
damages will be computed as follows:
Damages shall be an amount equal to the difference between the total
interest paid on each payment date prior to the final payment of the
BED Loan and on the final payment date (whether at maturity or upon
prepayment) and the total interest that would have been paid on
those dates had the BED Loan been made at 9.0%, the current
commercial rate at the time of this Employment Agreement, rather
than 3.0%, the interest rate at which BED made the BED Loan to
Borrower. If BED demands such liquidated damages five years or more
after the date of the Loan Agreement, and each monthly installment
payment and the final payment on the BED Loan shall have been made
when due without prepayment, and if no default exists, then the
damages due and owing to BED will be $52,800.00. .
3. This Employment Agreement is made as additional security for the Loan
Agreement.
4. This Employment Agreement shall be governed by and construed in
accordance with the laws of the State of South Dakota. Any lawsuit pertaining
to or affecting this Employment Agreement shall be venued in Circuit Court,
Sixth Judicial Circuit, Xxxxxx County, South Dakota.
5. This Employment Agreement may not be modified or amended except by
mutual consent expressed in writing, which writing shall be expressly
identified as a part hereof, and which writing shall be signed by an
authorized representative of each of the parties hereto.
6. Any notice provided for herein shall be deemed given when transmitted
as provided in Section 14 of the Loan Agreement.
7. The covenants in this Employment Agreement shall be deemed to be
severable; in the event that any portion of this Employment Agreement is
determined to be void or unenforceable, that determination shall not affect
the validity of the remaining portions of the Employment Agreement.
8. Terms used herein and defined in the Loan Agreement shall have the
same meaning as set forth in the Loan Agreement unless the context clearly
requires otherwise.
9. Time is of the essence in the performance of the covenants, terms and
conditions contained in this Employment Agreement. This Employment Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective transferees, successors and assigns except that the Borrower may
not assign or transfer it rights under the Loan Documents without prior
written consent of BED
Dated this 26th day of May, 1998.
SOUTH DAKOTA BOARD OF ECONOMIC DEVELOPMENT
BY: /s/ Xxxx Xxxxx
ITS: Treasurer
XXXX COMPANY
BY: /s/ Xxxxxxx X. Xxxx
ITS: Vice President
(SEAL)
ATTEST: X.X. Xxxxxxx
BY: /s/ X.X. Xxxxxxx
Its: Secretary
NOTE: Corporate Borrowers must execute Employment Agreement, in
corporate name, by duly authorized officer, and seal must be affixed
and duly attested; Limited Liability Company Borrowers must execute
Employment Agreement by duly authorized Manager or by all members;
Partnership Borrowers must execute Employment Agreement in firm
name, together with signature of an authorized general partner.
