<PAGE>
Exhibit 10 (kk)
REDI LOAN NUMBER 02-18-A
STATE OF SOUTH DAKOTA
BOARD OF ECONOMIC DEVELOPMENT
REVOLVING ECONOMIC DEVELOPMENT
AND INITIATIVE FUND (REDI)
LOAN AGREEMENT
LOAN AGREEMENT made and entered into this 19th day of December,
2002,
by and between the South Dakota Board of
Economic Development, 711 Wells Avenue,
Pierre, South Dakota 57501 (herein "BED"),
and M-TRON INDUSTRIES, INC. OF 100
DOUGLAS AVENUE, YANKTON, SOUTH DAKOTA 57078
(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
September 20, 2002, 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 Ninety-Six
Thousand and no/100 Dollars
($296,000), according to the terms and
conditions set forth in this Loan
Agreement and the Promissory Note of even
date herewith, which is incorporated
herein by reference.
Page 1 of 11
<PAGE>
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 Ninety-Six Thousand
and no/100 Dollars ($296,000), due and
payable, together with interest thereon
at the rate of three percent (3%) 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 of even date which is incorporated herein by
reference;
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 South Dakota, 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.
Page 2 of 11
<PAGE>
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, filings 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 A, 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
29
percent 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
Page 3 of 11
<PAGE>
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 warrants and represents 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 as defined in Section 13 or
(ii) the release or threatened release of any toxic
or hazardous waste, contaminant, constituent 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,
contaminant, constituent, or other substance in the
environment which would individually or in the
aggregate constitute a Material Adverse Occurrence;
and
(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, contaminant, constituent or other
substance 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.
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: (i) the then present
or prospective financial condition or operations of any party
to the Loan; (ii) the ability of any such Party to perform its
obligations under any of the Loan Documents; or (iii) the
value of the Collateral securing the Loan.
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
