Exhibit 10 (mm)
STATE OF SOUTH DAKOTA
BOARD OF ECONOMIC DEVELOPMENT
REVOLVING ECONOMIC DEVELOPMENT AND INITIATIVE FUND
(ARSD 68:02:01)
EMPLOYMENT AGREEMENT
REDI LOAN NUMBER 02-18-A
EMPLOYMENT AGREEMENT, made and entered into this 19th day of December,
2002, by and between the State of South Dakota, Board of Economic Development,
000 Xxxxx Xxxxxx, Xxxxxx, Xxxxx Xxxxxx 00000 (herein "BED"), and M-tron
Industries, Inc., of 000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxx 00000 (herein the
"Borrower").
WHEREAS, M-tron Industries, Inc., (the "Borrower") made an application
(the "Application") dated September 20, 2002, 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 19th day of December, 2002, (the "Loan Agreement"),
whereby BED loaned to Borrower from the REDI Fund the sum of $296,000, together
with interest thereon at 3% 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;
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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 an event of
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 Yankton, 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 a default, then the
total indebtedness owed by the Borrower to the BED, including principal and
interest, and the payment of liquidated damages by the Borrower to BED, shall at
the option of BED immediately become due and payable upon twenty (20) days'
written notice to the Borrower. 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 5.25%, the current commercial rate
at the time of this Employment Agreement, rather than 3%, 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
$21,180.
3. This Employment Agreement is made in consideration of the BED Loan.
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.
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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 19th day of December, 2002.
SOUTH DAKOTA BOARD OF
ECONOMIC DEVELOPMENT
BY: /s/ Xxxxxxx Xxxxx
--------------------------
(SEAL)
ITS: TREASURER
M-TRON INDUSTRIES, INC.
(SEAL) BY: /s/ Xxxxxx X. Xxxxxxx
---------------------
ITS: President & CEO
ATTEST:
BY: Xxxxx X. Xxxx
-----------------------
ITS: Secretary
NOTE: Corporate Borrowers must execute Employment Agreement, in corporate name,
by duly authorized officer, and seal must be affixed and duly attested.
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