Exhibit 10.1
CONSTRUCTION LOAN
AGREEMENT
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Principal
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Loan Date
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Maturity
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Loan No
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Call/Coll
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Account
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Officer
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Initials
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$10,000,000.00
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04-28-2009
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01-05-2010
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15525078252
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1A2/101
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Krugcg
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References in the boxes above are
for Lender’s use only and do not limit the applicability of
this document to any particular loan or item.
Any item above containing “ *** ” has been
omitted due to text length limitations.
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Borrower:
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TOWER TECH SYSTEMS
INC
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Lender:
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GREAT WESTERN BANK
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101 S 16TH ST PO BOX
1957
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Sioux Falls
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MANITOWOC, Wl
54221-1957
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200 E 10th Street
Sioux Falls, SD 57104
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THIS CONSTRUCTION LOAN AGREEMENT
dated April 28, 2009, is made and executed between TOWER TECH
SYSTEMS INC (“Borrower”) and GREAT WESTERN BANK
(“Lender”) on the following terms and conditions.
Borrower has applied to Lender for one or more loans for purposes
of constructing the Improvements on the Real Property described
below. Lender is willing to lend the loan amount to Borrower solely
under the terms and conditions specified in this Agreement and in
the Related Documents, to each of which Borrower agrees. Borrower
understands and agrees that: (A) in granting, renewing, or
extending any Loan, Lender is relying upon Borrower’s
representations, warranties, and agreements as set forth in this
Agreement, and (B) all such Loans shall be and remain subject
to the terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of
April 28, 2009, and shall continue in full force and effect
until such time as all of Borrower’s Loans in favor of Lender
have been paid in full, including principal, interest, costs,
expenses, attorneys’ fees, and other fees and charges, or
until such time as the parties may agree in writing to terminate
this Agreement.
ADVANCE AUTHORITY.
The following person or persons are
authorized to request advances and authorize payments under the
line of credit until Lender receives from Borrower, at
Lender’s address shown above, written notice of revocation of
such authority: STEVE HUNTINGTON, CHIEF FINANCIAL OFFICER of
TOWER TECH SYSTEMS INC.
LOAN. The Loan shall be in an amount not to exceed the
principal sum of U.S. $10,000,000.00 and shall bear interest
on so much of the principal sum as shall be advanced pursuant to
the terms of this Agreement and the Related Documents. The Loan
shall bear interest on each Advance from the date of the Advance in
accordance with the terms of the Note. Borrower shall use the Loan
Funds solely for the payment of: (A) the costs of constructing the
Improvements and equipping the Project in accordance with the
Construction Contract; (B) other costs and expenses incurred
or to be incurred in connection with the construction of the
Improvements as Lender in its sole discretion shall approve; and
(C) if permitted by Lender, interest due under the Note, including
all expenses and all loan and commitment fees described in this
Agreement. The Loan amount shall be subject at all times to all
maximum limits and conditions set forth in this Agreement or in any
of the Related Documents, including without limitation, any limits
relating to loan to value ratios and acquisition and Project
costs.
PROJECT DESCRIPTION.
The word “Project” as
used in this Agreement means the construction and completion of all
Improvements contemplated by this Agreement, including without
limitation the erection of the building or structure on the Real
Property identified to this Agreement by Borrower and Lender,
installation of equipment and fixtures, landscaping, and all other
work necessary to make the Project usable and complete for the
intended purposes. The Project includes the following
work:
CONSTRUCTION & PERMANENT
FINANCE FOR MANUFACTURING FACILITY IN BRANDON, SD (LOT 3, BLOCK 1,
CORSON DEVELOPMENT PARK ADDN LEGALLY KNOWN AS 1820 N TOWER TECH
AVE, BRANDON, SD).
The word “Property” as
used in this Agreement means the Real Property together with all
Improvements, all equipment, fixtures, and other articles of
personal property now or subsequently attached or affixed to the
Real Property, together with all accessions, parts, and additions
to, all replacements of, and all substitutions for any of such
property, and all proceeds (including insurance proceeds and
refunds of premiums) from any sale or other disposition of such
property. The real estate described below constitutes the Real
Property as used in this Agreement.
The real estate legally described
as:
LOT 3 IN BLOCK 1 OF CORSON
DEVELOPMENT PARK ADDITION TO THE CITY OF BRANDON, MINNEHAHA COUNTY,
SOUTH DAKOTA, ACCORDING TO THE RECORDED PLAT THEREOF.
Its address is commonly known
as:
Real Property located at 1820 N
TOWER TECH AVE, BRANDON, SD 57005.
FEES AND EXPENSES.
Whether or not the Project shall be
consummated, Borrower shall assume and pay upon demand all
out-of-pocket expenses incurred by Lender in connection with the
preparation of loan documents and the making of the Loan, including
without limitation the following: (A) all closing costs, loan
fees, and disbursements; (B) all expenses of Lender’s legal
counsel; and (C) all title examination fees, title insurance
premiums, appraisal fees, survey costs, required fees, and filing
and recording fees.
NO CONSTRUCTION PRIOR TO
RECORDING OF SECURITY DOCUMENT. Borrower will not permit any work or materials
to be furnished in connection with the Project until
(A) Borrower has signed the Related Documents;
(B) Lender’s mortgage or deed of trust and other
Security Interests in the Property have been duly recorded and
perfected; (C) Lender has been provided evidence, satisfactory
to Lender, that Borrower has obtained all insurance required under
this Agreement or any Related Documents and that Lender’s
liens on the Property and Improvements are valid perfected first
liens, subject only to such exceptions, if any, acceptable to
Lender.
REPRESENTATIONS AND
WARRANTIES. Borrower
represents and warrants to Lender, as of the date of this
Agreement, as of the date of each disbursement of loan proceeds, as
of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:
Organization.
Borrower is a corporation for profit
which is, and at all times shall be, duly organized, validly
existing, and in good standing under and by virtue of the laws of
the State of Wisconsin. Borrower is duly authorized to transact
business in all other states in which Borrower is doing business,
having obtained all necessary filings, governmental licenses and
approvals for each state in which Borrower is doing business.
Specifically, Borrower is, and at all times shall be, duly
qualified as a foreign corporation in all states in which the
failure to so qualify would have a material adverse effect on its
business or financial condition. Borrower has the full power and
authority to own its properties and to transact the business in
which it is presently engaged or presently proposes to engage.
Borrower maintains its principal office at 101 S 16TH ST PO BOX
1957, MANITOWOC, Wl 54221-1957. Unless Borrower has designated
otherwise in writing, this is the principal office at which
Borrower keeps its books and records including its records
concerning the Collateral. Borrower will notify Lender prior to any
change in the location of Borrower’s state of organization or
any change in Borrower’s name. Borrower shall do all things
necessary to preserve and to keep in full force and effect its
existence, rights and privileges, and shall comply with all
regulations, rules, ordinances, statutes, orders and decrees of any
governmental or quasi-governmental authority or court applicable to
Borrower and Borrower’s business activities.
Assumed Business
Names. Borrower has filed
or recorded all documents or filings required by law relating to
all assumed business names used by Borrower. Excluding the name of
Borrower, the following is a complete list of all assumed business
names under which Borrower does business: None.
Authorization.
Borrower’s execution,
delivery, and performance of this Agreement and all the Related
Documents have been duly authorized by all necessary action by
Borrower and do not conflict with, result in a violation of, or
constitute a default under (1) any provision of
(a) Borrower’s articles of incorporation or
organization, or bylaws, or (b) any agreement or other
instrument binding upon Borrower or (2) any law, governmental
regulation, court decree, or order applicable to Borrower or to
Borrower’s properties.
Financial Information.
Each of Borrower’s financial
statements supplied to Lender truly and completely disclosed
Borrower’s financial condition as of the date of the
statement, and there has been no material adverse change in
Borrower’s financial condition subsequent to the date of the
most recent financial statement supplied to Lender. Borrower has no
material contingent obligations except as disclosed in such
financial statements.
Legal Effect.
This Agreement constitutes, and any
instrument or agreement Borrower is required to give under this
Agreement when delivered will constitute legal, valid, and binding
obligations of Borrower enforceable against Borrower in accordance
with their respective terms.
Properties.
Except as contemplated by this
Agreement or as previously disclosed in Borrower’s financial
statements or in writing to Lender and as accepted by Lender, and
except for property tax liens for taxes not presently due and
payable, Borrower owns and has good title to all of
Borrower’s properties free and clear of all Security
Interests, and has not executed any security documents or financing
statements relating to such properties. All of Borrower’s properties
are titled in Borrower’s legal name, and Borrower has not
used or filed a financing statement under any other name for at
least the last five (5) years.
Hazardous Substances.
Except as disclosed to and
acknowledged by Lender in writing, Borrower represents and warrants
that: (1) During the period of Borrower’s ownership of
the Collateral, there has been no use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any
Hazardous Substance by any person on, under, about or from any of
the Collateral. (2) Borrower has no knowledge of, or reason to
believe that there has been (a) any breach or violation of any
Environmental Laws; (b) any use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any
Hazardous Substance on, under, about or from the Collateral by any
prior owners or occupants of any of the Collateral; or (c) any
actual or threatened litigation or claims of any kind by any person
relating to such matters. (3) Neither Borrower nor any tenant,
contractor, agent or other authorized user of any of the Collateral
shall use, generate, manufacture, store, treat,
CONSTRUCTION LOAN AGREEMENT
(Continued)
dispose of or release any Hazardous
Substance on, under, about or from any of the Collateral; and any
such activity shall be conducted in compliance with all applicable
federal, state, and local laws, regulations, and ordinances,
including without limitation all Environmental Laws. Borrower
authorizes Lender and its agents to enter upon the Collateral to
make such inspections and tests as Lender may deem appropriate to
determine compliance of the Collateral with this section of the
Agreement. Any inspections or tests made by Lender shall be at
Borrower’s expense and for Lender’s purposes only and
shall not be construed to create any responsibility or liability on
the part of Lender to Borrower or to any other person. The
representations and warranties contained herein are based on
Borrower’s due diligence in investigating the Collateral for
hazardous waste and Hazardous Substances. Borrower hereby (1)
releases and waives any future claims against Lender for indemnity
or contribution in the event Borrower becomes liable for cleanup or
other costs under any such laws, and (2) agrees to indemnify,
defend, and hold harmless Lender against any and all claims,
losses, liabilities, damages, penalties, and expenses which Lender
may directly or indirectly sustain or suffer resulting from a
breach of this section of the Agreement or as a consequence of any
use, generation, manufacture, storage, disposal, release or
threatened release of a hazardous waste or substance on the
Collateral. The provisions of this section of the Agreement,
including the obligation to indemnify and defend, shall survive the
payment of the Indebtedness and the termination, expiration or
satisfaction of this Agreement and shall not be affected by
Lender’s acquisition of any interest in any of the
Collateral, whether by foreclosure or otherwise.
Litigation and Claims.
No litigation, claim, investigation,
administrative proceeding or similar action (including those for
unpaid taxes) against Borrower is pending or threatened, and no
other event has occurred which may materially adversely affect
Borrower’s financial condition or properties, other than
litigation, claims, or other events, if any, that have been
disclosed to and acknowledged by Lender in writing.
Taxes. To the best of Borrower’s knowledge, all
of Borrower’s tax returns and reports that are or were
required to be filed, have been filed, and all taxes, assessments
and other governmental charges have been paid in full, except those
presently being or to be contested by Borrower in good faith in the
ordinary course of business and for which adequate reserves have
been provided.
Lien Priority.
Unless otherwise previously
disclosed to Lender in writing, Borrower has not entered into or
granted any Security Agreements, or permitted the filing or
attachment of any Security Interests on or affecting any of the
Collateral directly or indirectly securing repayment of
Borrower’s Loan and Note, that would be prior or that may in
any way be superior to Lender’s Security Interests and rights
in and to such Collateral.
Binding Effect.
This Agreement, the Note, all
Security Agreements (if any), and all Related Documents are binding
upon the signers thereof, as well as upon their successors,
representatives and assigns, and are legally enforceable in
accordance with their respective terms.
Title to Property.
Borrower has, or on the date of
first disbursement of Loan proceeds will have, good and marketable
title to the Collateral free and clear of all defects, liens, and
encumbrances, excepting only liens for taxes, assessments, or
governmental charges or levies not yet delinquent or payable
without penalty or interest, and such liens and encumbrances as may
be approved in writing by the Lender. The Collateral is contiguous
to publicly dedicated streets, roads, or highways providing access
to the Collateral.
Project Costs.
The Project costs are true and
accurate estimates of the costs necessary to complete the
Improvements in a good and workmanlike manner according to the
Plans and Specifications presented by Borrower to Lender, and
Borrower shall take all steps necessary to prevent the actual cost
of the Improvements from exceeding the Project costs.
Utility Services.
All utility services appropriate to
the use of the Project after completion of construction are
available at the boundaries of the Collateral.
Assessment of
Property. The Collateral
is and will continue to be assessed and taxed as an independent
parcel by all governmental authorities.
Compliance with Governing
Authorities. Borrower has
examined and is familiar with all the easements, covenants,
conditions, restrictions, reservations, building laws, regulations,
zoning ordinances, and federal, state, and local requirements
affecting the Project. The Project will at all times and in all
respects conform to and comply with the requirements of such
easements, covenants, conditions, restrictions, reservations,
building laws, regulations, zoning ordinances, and federal, state,
and local requirements.
Survival of Representations and
Warranties. Borrower
understands and agrees that in extending Loan Advances, Lender is
relying on all representations, warranties, and covenants made by
Borrower in this Agreement or in any certificate or other
instrument delivered by Borrower to Lender under this Agreement or
the Related Documents. Borrower further agrees that regardless of
any investigation made by Lender, all such representations,
warranties and covenants will survive the extension of Loan
Advances and delivery to Lender of the Related Documents, shall be
continuing in nature, shall be deemed made and redated by Borrower
at the time each Loan Advance is made, and shall remain in full
force and effect until such time as Borrower’s Indebtedness
shall be paid in full, or until this Agreement shall be terminated
in the manner provided above, whichever is the last to
occur.
CONDITIONS PRECEDENT TO EACH
ADVANCE. Lender’s
obligation to make the initial Advance and each subsequent Advance
under this Agreement shall be subject to the fulfillment to
Lender’s satisfaction of all of the conditions set forth in
this Agreement and in the Related Documents.
Approval of Contractors,
Subcontractors, and Materialmen. Lender shall have approved a list of all
contractors employed in connection with the construction of the
Improvements, showing the name, address, and telephone number of
each contractor, a general description of the nature of the work to
be done, the labor and materials to be supplied, the names of
materialmen, if known, and the approximate dollar value of the
labor, work, or materials with respect to each contractor or
materialman. Lender shall have the right to communicate with any
person to verify the facts disclosed by the list or by any
application for any Advance, or for any other purpose.
Plans, Specifications, and
Permits. Lender shall
have received and accepted a complete set of written Plans and
Specifications setting forth all Improvements for the Project, and
Borrower shall have furnished to Lender copies of all permits and
requisite approvals of any governmental body necessary for the
construction and use of the Project.
Architect’s and
Construction Contracts. Borrower shall have furnished in form and
substance satisfactory to Lender an executed copy of the
Architect’s Contract and an executed copy of the Construction
Contract.
Budget and Schedule of Estimated
Advances. Lender shall
have approved detailed budget and cash flow projections of total
Project costs and a schedule of the estimated amount and time of
disbursements of each Advance.
Borrower’s
Authorization. Borrower
shall have provided in form and substance satisfactory to Lender
properly certified resolutions, duly authorizing the consummation
of the Project and duly authorizing the execution and delivery of
this Agreement, the Note and the Related Documents. In addition,
Borrower shall have provided such other resolutions,
authorizations, documents and instruments as Lender or its counsel,
in their sole discretion, may require.
Bond. If requested by Lender, Borrower shall have
furnished a performance and payment bond in an amount equal to 100%
of the amount of the Construction Contract, as well as a
materialmen’s and mechanics’ payment bond, with such
riders and supplements as Lender may require, each in form and
substance satisfactory to Lender, naming the General Contractor as
principal and Lender as an additional obligee.
Appraisal.
If required by Lender, an appraisal
shall be prepared for the Property, at Borrower’s expense,
which in form and substance shall be satisfactory to Lender, in
Lender’s sole discretion, including applicable regulatory
requirements.
Plans and
Specifications. If
requested by Lender, Borrower shall have assigned to Lender on
Lender’s forms the Plans and Specifications for the
Project.
Environmental Report.
If requested by Lender, Borrower
shall have furnished to Lender, at Borrower’s expense, an
environmental report and certificate on the Property in form and
substance satisfactory to Lender, prepared by an engineer or other
expert satisfactory to Lender stating that the Property complies
with all applicable provisions and requirements of the
“Hazardous Substances” paragraph set forth in this
Agreement.
Soil Report.
If requested by Lender, Borrower
shall have furnished to Lender, at Borrower’s expenses, a
soil report for the Property in form and substance satisfactory to
Lender, prepared by a registered engineer satisfactory to Lender
stating that the Property is free from soil or other geological
conditions that would preclude its use or d