REDI Loan Xxxxxx 00-00-X
XXXXX XX XXXXX XXXXXX
BOARD OF ECONOMIC DEVELOPMENT
REVOLVING ECONOMIC DEVELOPMENT
AND INITIATIVE FUND (REDI)
LOAN AGREEMENT
LOAN AGREEMENT made and entered into this 26th day of May, 1998, by and
between the 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, (herein the "Borrower").
WHEREAS, the South Dakota Board of Economic Development is a board
created pursuant to SDCL 1-16G-1 for the purpose of promoting economic
development in South Dakota, and the South Dakota Governor's Office of
Economic Development, acting pursuant to ARSD 68:02:01:23, provides
administrative support to BED in the application, processing, monitoring, and
servicing of loans made by BED; and,
WHEREAS, 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), which Application was approved by BED pursuant to
SDCL Chapters 1-33 and 1-16G, as amended, and ARSD Article 68:02 (the "BED
Loan"); and,
WHEREAS, BED has by duly adopted resolution designated one of the members
of the Board of Economic Development to execute this Loan Agreement; has
designated the Commissioner, Governor's Office of Economic Development, (the
"Commissioner"), and BankWest, Inc., a state chartered financial institution,
of Pierre, South Dakota (BankWest), as its representatives hereunder; has
authorized the Commissioner to act on its and the State's behalf hereunder;
has empowered the Commissioner to delegate his duties in connection herewith
to those persons under his supervision as he deems appropriate; has entered
into a Loan Servicing Agreement with BankWest, whereby BankWest will act as
BED's agent for purposes of closing, funding, receiving payment and servicing
the BED Loan with the Borrower: and has authorized BankWest to act on behalf
of BED consistent with the terms of the Loan Servicing Agreement and the
Borrower's BED Loan Documents;
NOW THEREFORE it is mutually agreed as follows:
1. In consideration of the Borrower's execution and delivery of a
Promissory Note dated the date hereof, and observance and performance of the
covenants, terms and conditions hereof, and in reliance on the Borrower's
representations made herein, BED, through its duly designated agent, agrees to
loan to Borrower, from the Revolving Economic Development and Initiative Fund
the principal sum of Two Hundred Fifty-five Thousand Dollars ($255,000.00),
according to the terms and conditions set forth in this Loan Agreement and the
Promissory Note of even date herewith, a true copy of which is attached hereto
as Exhibit A and by this reference incorporated herein.
2. In consideration of BED's agreement to loan said funds to the
Borrower, the Borrower has made, executed and delivered to BED a Promissory
Note dated the date hereof, in the principal sum of Two Hundred Fifty-five
Thousand dollars ($255,000.00), due and payable, together with interest
thereon at the rate of Three percent (3.0%) per annum, simple interest,
according to the terms and conditions set forth therein and in this Loan
Agreement.
3. As security for the repayment of the BED Loan above described, the
Borrower agrees as follows:
a. To mortgage to BED the real property, buildings, and
improvements owned by the Borrower as described with particularity
in the Mortgage dated May 26, 1998, a true copy of which is attached
hereto as Exhibit B and by this reference incorporated herein;
b. To execute an Employment Agreement with BED agreeing to create
and retain not less than 51 full time employee positions, as set
forth in the Borrower's Application dated January 20, 1997.
4. Unless otherwise provided herein or in the Loan Servicing
Agreement, or unless a Lender disburses the funds pursuant to a Lender
Agreement, the loan proceeds will be kept in the state treasury, in the
Revolving Economic Development and Initiative Fund, and shall be disbursed to
the Borrower based upon the Borrower's request for disbursements. In order to
obtain a disbursement, the Borrower shall submit to BED a signed request for
disbursement on a form prescribed by BED, together with all attachments
required by such form. Disbursements may be obtained only for those Project
costs which have been legally incurred, and which are due and payable, or have
been paid by the Borrower. The Borrower will designate, by duly adopted
resolution, an official to certify on Borrower's behalf that the request
submitted is correct and is a valid expenditure for the Project. Unless BED
specifically agrees otherwise, or unless the Borrower has already paid the
costs, disbursements shall be made directly to the person to whom the Borrower
owes such amount. First disbursement of the BED Loan must be made not later
than six months from the date hereof, and no disbursement may be made later
than twelve months from the date of BED's original approval of Borrower's
Application, unless such time is extended in writing by BED.
5. Borrower warrants and represents as follows:
a. The Borrower is duly organized and existing under the laws of
the State of Wisconsin, or under the laws of another state or
country and is authorized to transact business in the State of South
Dakota; has taken all proper action, including the adoption of a
resolution, to authorize the execution, delivery and performance of
its obligations under this Loan Agreement, the Promissory Note, and
any other Loan Documents (hereinafter referred to jointly as the
"Loan Documents"), and the incurring of the debt represented by the
Promissory Note; and has the power and authority to enter into and
consummate all transactions contemplated by the Loan Documents, and
to carry out its obligations hereunder and thereunder.
b. There is no action, suit, proceeding, inquiry or investigation
at law or equity, by or before any judicial or administrative court,
agency or body, pending or threatened against the Borrower wherein
an unfavorable decision, ruling, or finding would materially and
adversely affect the validity or enforceability of any of the Loan
Documents.
c. Neither the execution and delivery of the Loan Documents, the
consummation of the transactions contemplated thereby, nor the
fulfillment of, or compliance with the provisions of the Loan
Documents will conflict with or result in the breach of any
restriction, agreement or instrument to which the Borrower is a
party, or by which it is bound, or result in the creation or
imposition of any lien of any nature upon any of the property of the
Borrower under the terms of any such instrument or agreement, nor
will such action result in the violation of any provision of any
law, ordinance, governmental order to which the Borrower, its
property or operations are subject.
d. No event of default has occurred in any agreement or instrument
as to any outstanding indebtedness of the Borrower for money
borrowed and no condition, event or act exists which, with the lapse
of time or the giving of notice, would constitute an event of
default under any such agreement or instrument. The Borrower is not
in violation of any term of any restriction, agreement, indenture,
ordinance, resolution, charter, or other instrument to which it is a
party or which it or its property may be bound, which violation
would materially and adversely affect the transactions contemplated
hereby or the compliance by the Borrower with the terms of the Loan
Documents.
e. The Borrower has obtained or made all permits, findings and
approvals required to the date of this Loan Agreement by any
governmental body or officer for the making and performance by the
Borrower of its obligations under the Loan Documents or for the
Project, the financing thereof or the reimbursement of the Borrower
for the costs thereof. No consent, approval or authorization of, or
filing, registration or qualification with, any governmental
authority (other than those, if any, already obtained) is required
on the part of the Borrower as a condition to entering into the Loan
Documents and the performance of the Borrower's obligations
hereunder and thereunder.
f. The Loan Documents to which the Borrower is a party are legal,
valid and binding obligations and agreements of the Borrower,
enforceable against the Borrower according to their terms, except as
the enforceability thereof may be limited by laws relating to
bankruptcy, insolvency or other similar laws affecting creditors'
rights generally and general principles of equity.
g. The Project consists of the facilities, improvements and
activities described in Exhibit E, attached hereto, and by this
reference incorporated herein, as such Exhibit may be amended from
time to time.
h. The funds provided pursuant to this Loan Agreement do not exceed
eleven percent (11%) of the total Project cost as described in the
Borrower's Application.
i. There is no fact that the Borrower has not specifically
disclosed in writing to BED that materially and adversely affects or
will materially and adversely affect the properties, operations and
finances of the Borrower, its status as a legal entity in good
standing, or its ability to perform its obligations under the Loan
Documents, or to pledge any revenues or property to the repayment of
the BED Loan.
j. The Borrower certifies that there has been no material adverse
change since the date of the Borrower's Application in the financial
condition, organization, operation, business prospects, property, or
the personnel of the Borrower; and that the information contained in
the Application, and other information the Borrower provided to BED
does not contain any material misrepresentations or misstatements of
fact.
k. The Borrower further certifies that it:
(1) has not received any notice or otherwise learned of any
Environmental Liability which would individually or in the
aggregate constitute a Material Adverse Occurrence arising in
connection with (i) any non-compliance with or violation of the
requirements of any Environmental Law or (ii) the release or
threatened release of any toxic or hazardous waste or other
substance into the environment;
(2) does not have any knowledge of any threatened or actual
liability in connection with the release or threatened release
of any toxic or hazardous waste, substance or constituent, or
other substance in the environment which would individually or
in the aggregate constitute a Material Adverse Occurrence; or
(3) has not received any notice or otherwise learned of any
federal or state investigation evaluating whether any remedial
action is needed to respond to a material release or threatened
release on any toxic or hazardous waste, substance or
constituent into the environment for which the Borrower is or
may be liable. The Borrower is in substantial compliance with
all Environmental Laws in the respective jurisdictions where it
is presently doing business or conducting operations.
(4)Material Adverse Occurrence shall mean any occurrence of
whatsoever nature (including, without limitation, any adverse
determination in any litigation, arbitration or governmental
investigation or proceeding) which the BED shall reasonably
determine materially adversely affects the then present or
prospective financial condition or operations of any party to
the BED Loan, or impairs the ability of any such Party to
perform its obligations under any of the Loan Documents.
6. To further induce BED to make this BED Loan, Borrower agrees to
the following conditions:
a. Borrower will execute the Loan Documents and any supplements or
additions thereto, and such other documents in connection with this
BED Loan as BED may from time to time request.
b. Borrower will, on demand, reimburse BED for any and all
expenses, including reasonable attorney fees, incurred, or which may
be hereafter incurred, by BED or its agents from time to time in
connection with or by reason of Borrower's Application for, and the
making and administration of the BED Loan.
c. Borrower will at all times keep proper books of account in a
manner satisfactory to BED. Borrower authorizes BED to make or
cause to be made, during regular business hours, at Borrower's
expense and in such manner and at such times as BED may require, (i)
inspections and audits of any books, records and papers in the
custody or control of Borrower or others, relating to Borrower's
financial or business conditions, including the making of copies
thereof and extracts therefrom. Borrower will furnish to BED the
10-Q statements within 60 days of quarter end and the 10K statements
within 120 days of year end. All financials must consist, at a
minimum of a balance sheet and income statement. Borrower hereby
authorizes all federal, state and municipal authorities to furnish
reports, examination, records, and other information relating to the
conditions and affairs of Borrower and any desired information from
such reports, returns, files, and records of such authorities upon
request therefor by BED.
d. Borrower agrees to comply with those federal, state and local
laws, regulations, ordinances and permits applicable to the Project,
as well as the provisions of SDCL Chapter 1-16G, SDCL Chapter 1-33,
and ARSD Chapter 68:02, and shall furnish to BED such reports and
information and provide such access required by those statutes and
rules.
e. Borrower agrees to pay in a timely manner the principal and
interest on the Promissory Note, and on any other indebtedness now
or hereafter at any time due to BED or any other Lender.
f. The Borrower will promptly pay all taxes, charges, liens,
assessments and encumbrances which now affect, or which may in the
future affect, the Project or the security for the payment of the
Promissory Note as herein provided, or BED's interest therein for
which it is legally liable.
g. Borrower agrees to indemnify and hold BED, its officers, agents
and employees, harmless from and against any and all actions, suits,
damages, liability or other proceedings arising from or connected
with the Borrower's Project funded herein. This section does not
require the Borrower to be responsible for or defend against claims
or damages arising solely from errors or omissions of BED, its
officers, agents or employees.
7. On or prior to the disbursement of funds pursuant to this Loan
Agreement, the Borrower shall submit to BED all documents required by the
Commitment Letter, the Loan Documents and the applicable statutes and
regulations. In addition, the Borrower shall submit the following items:
a. the executed Promissory Note;
b. an executed counterpart of this Loan Agreement;
c. a certified resolution of the Borrower's governing body
approving the BED Loan, this Loan Agreement, the Promissory Note,
and the Loan Documents;
d. any certificate of insurance required by the Loan Agreement or
the Loan Documents, including , if applicable, a title insurance
policy;
Once the documents listed above have been executed and delivered, the BED Loan
will be deemed closed.
8. In the event the Borrower fails to make any payment or any part
thereof as provided in the Promissory Note described herein, within fifteen
days of the due date thereof, or in the event that the Borrower fails or
refuses to perform any covenants or agreements hereunder on Borrower's part
made and entered into, or under any agreement between the Borrower and BED
made in connection with the BED Loan, or in the event of the failure of the
Borrower to promptly pay, when due, any taxes, charges, liens, assessments, or
encumbrances, or in the event of the insolvency of the Borrower, BED may at
its option declare this Agreement to be in default and shall provide Borrower
with written notice of such default. If such default has not been cured
within fifteen (15)days of Borrower's receipt of written notice thereof, BED
at its sole option, may accelerate the payment of the outstanding debt and may
declare the entire unpaid principal sum including interest due thereon
immediately due and payable, and if not paid within 10 days thereof this
Agreement may be foreclosed in the manner provided by law.
(a) Past due payments of principal and interest bear interest at a
rate per annum three (3) percentage points higher than the prime
rate of interest published weekly in the Wall Street Journal at the
time of default until paid.
(b) In the event that Borrower defaults in providing the financial
information required by Section 6(c), the reports required under
Section 6(d), or proof of the insurance required by Section 12 of
this Loan Agreement, then the Borrower shall pay to BED the sum of
$200 for each such default. This sum is intended by the parties and
shall be considered and treated as liquidated damages due to BED,
and not as a penalty. The parties specifically agree that due to
the nature of the BED Loan made to the Borrower it is impracticable
or extremely difficult to fix the actual damages resulting from the
Borrower's breach of those provisions of this Loan Agreement because
failure to provide the information in a timely manner prevents BED
from having complete and accurate data concerning the status of its
economic development program for the purpose of preparing its annual
report, assessing the success of its economic development strategies
and developing future strategies; from assessing the financial
strength of the businesses BED assists, and the success of its
assistance efforts; and it makes it difficult for BED to protect the
continued viability of its revolving loan program.
9. At its sole option, BED, in event of default, has the right, but
not the duty, to incur and pay any reasonable expenses, for the account of the
Borrower, for the payment of any taxes, charges, liens, assessments and
encumbrances with relation to the Project, and add any amounts so paid to the
principal sum due hereunder. Borrower agrees that if an event of default
occurs, in addition to any other amounts that may be due from the Borrower, it
will pay BED an amount equal to the costs and expenses, including reasonable
expert and attorneys fees, incurred by BED in enforcing its rights under this
Loan Agreement or the other Loan Documents.
10. The rights and remedies herein conferred upon BED shall be
cumulative and not alternative and shall be in addition and not in
substitution of or in derogation of rights and remedies conferred by the Loan
Documents or any other agreements between the parties hereto or by any
applicable law. The failure of BED to enforce strict performance of any
covenant, promise, or condition herein contained, including timely payments
due hereunder, shall not operate as a waiver of the right of BED thereafter to
require that the terms hereof be strictly performed according to the tenor
thereof.
11. If BED participates in this loan with a bank, credit union,
savings and loan, a federal or state agency, or other lender ("the Lender"),
the Borrower agrees to cooperate and abide by all terms and conditions of any
and all loan documents involving any loan from the Lender to the Borrower for
the Project, including the Lender Agreement. A default in any provision of
any such loan documents with the Lender shall constitute a default under this
Loan Agreement and the Promissory Note. Borrower further agrees to cooperate
with BankWest as closing agent and loan servicing agent, to facilitate the
performance of the duties of BankWest pursuant to the Loan Servicing
Agreement.
12. The Borrower shall at all times during the term of this Loan
Agreement, and while the Promissory Note is outstanding, keep and maintain, or
provide evidence acceptable to BED that it has obtained, property and casualty
insurance, workers compensation, and liability insurance with insurers
licensed to do business in the State, against such risks and in such amounts
as are customary in the State for entities of the same or similar size and
type as the Borrower, and similarly situated with facilities of the Project's
type, and provide proof of such coverage to BED. Each policy shall be Lender
Loss Payable, and name BED as an additional insured or loss payee, as its
interests may appear. Any policy provided pursuant to this section must
provide that it cannot be canceled without 30 days prior written notice of
cancellation. In the event of cancellation the Borrower will promptly obtain
replacement insurance with the same or substantially similar coverage and
provide proof of such coverage to BED. In the event of renewal, replacement,
or changes in coverage, the Borrower will promptly provide written notice of
such changes to BED.
13. The Borrower covenants and agrees to comply with all present and
future environmental laws, ordinances, permits, rules and regulations.
Borrower shall not permit the generation, creation, treatment, incorporation,
discharge, disposal, escape, release or threat of release of any contaminant
above, upon, under, within, or from the Project site which is not in
compliance with any applicable laws, ordinances, permits, rules and
regulations. Borrower represents that there are no underground storage tanks
containing any contaminant located on the Project site, or property assigned
as Collateral for this BED Loan, and that no new tanks will be located on such
property unless the Borrower complies with any applicable laws, ordinances,
rules and regulations, and obtains all necessary permits.
a. For purposes of this Loan Agreement, "contaminant" is a
"Petroleum Product" as described in SDCL 37-2-5; "Asbestos" as
described in SDCL 34-44-1(2); a "Regulated Substance" as described
in SDCL 34A-12-1(8); substances regulated under and defined in the
provisions of 15 U.S.C. 2601-2671, 33 U.S.C. 1251-1387, 42 U.S.C.
6901-6999(I), or 42 U.S.C. 7401-7642; or any corresponding federal
or state regulations promulgated under the above federal or state
statutes, as well as any amendments, deletions, or corrections to
any such laws, ordinances, rules and regulations, including any
laws, ordinances, rules and regulations which may be enacted or
adopted subsequent to the date of, and which become effective during
the term of, and while the property remains subject to the terms and
conditions of this Loan Agreement.
b. Borrower agrees to indemnify and hold BED, its officers, agents,
employees, assigns and successors in interest harmless from any and
all claims, demands, judgments, penalties, costs, damages, expenses
or liability of any kind or character whatsoever, including court
costs and reasonable attorneys' fees, arising or resulting from or
connected with a breach of the foregoing covenant, it being the
intent of BED and the Borrower that BED shall have no liability for
damage to the environment or natural resources, for abatement,
removal, or cleanup of, or otherwise with respect to, any
contaminants either by virtue of any interest of BED in the
property, or created as a result of BED's exercise of any of its
rights or remedies under this Loan Agreement or any of the Loan
Documents.
c. Borrower shall, for the purposes of this Loan Agreement, be
designated the "owner" or "Operator" of the property.
14. Any required or permitted notice or other communication under
this Agreement shall be in writing and addressed as follows:
If to BED: State of South Dakota
Board of Economic Development
c/o Governors Office of
Economic Development
000 Xxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
BankWest, Inc.
X.X. Xxx 000
Xxxxxx, X.X. 00000
If to Borrower: Xxxx Company
000 Xxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Notices required or permitted under this Loan Agreement shall be given by and
to the Commissioner, Governor's Officer of Economic Development and Xxxxx
Xxxxxxxx, Vice President of Bankwest on behalf of BED, and the Borrower or
General Counsel on behalf of the Borrower, or such authorized designees as
either party may from time to time designate in writing. Any such notice or
other communication, if mailed, shall be sent by registered or certified mail,
return receipt requested. Notices or communications to or between the parties
shall be deemed to have been delivered when mailed by registered or certified
mail or, if personally delivered, when received by such party.
15. Time is of the essence in the performance of the covenants, terms
and conditions contained in this BED Loan Agreement. This Loan 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.
16. All other prior discussions, communications and representations
concerning the subject matter of the Loan Documents are superseded by the
terms of the Loan Documents, and except as specifically provided herein, the
Loan Documents constitute the entire agreement with respect to the subject
matter hereof.
17. This 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 Loan Agreement shall be venued in Circuit Court, Sixth Judicial Circuit,
Xxxxxx County, South Dakota.
18. All representations contained in the Borrower's Application, and all
representations, terms, conditions and covenants contained in the Commitment
Letter executed in conjunction with this Loan Agreement are hereby
incorporated by reference herein. To the extent there is a conflict between
the terms of the Application or Commitment Letter and this Loan Agreement, the
terms of this Loan Agreement shall prevail.
19. This Loan Agreement and the Loan Documents may not be amended except
in writing, which writing shall be expressly identified as a part hereof or
thereof, and which writing will be signed by an authorized representative of
each of the parties. No provision stated herein shall be waived without the
prior written consent of BED.
20. In the event that any provision of this Loan Agreement shall be held
unenforceable or invalid by any court of competent jurisdiction, such holding
shall not invalidate or render unenforceable any other provision hereof.
IN WITNESS WHEREOF the parties hereto have set their hands and seals
effective the day and year above first written.
SOUTH DAKOTA BOARD OF ECONOMIC DEVELOPMENT
(SEAL) BY: /s/ Xxxx Xxxxx
ITS: Treasurer
XXXX COMPANY
BY: /s/ Xxxxxxx X. Xxxx
ITS: Vice President
(SEAL)
ATTEST:
BY: X.X. Xxxxxxx
Its Secretary
NOTE: Corporate Borrowers must execute Loan Agreement, in corporate name, by
duly authorized officer, and seal must be affixed and duly attested; Limited
Liability Company Borrowers must execute Loan Agreement by duly authorized
Manager or by all members; Partnership Borrowers must execute Loan Agreement
in firm name, together with signature of an authorized general partner.
