EXHIBIT 10.02
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▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ Demand Loan Agreement
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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February 24, 2003
▇▇▇▇▇▇▇▇ & Struggles International, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇.▇. ▇▇▇▇▇▇
Ladies/Gentlemen:
BANK OF AMERICA, N.A. (the "Lender") is pleased to confirm that the Lender
may, in its sole and absolute discretion, make loans to ▇▇▇▇▇▇▇▇ & STRUGGLES
INTERNATIONAL, INC. (the "Borrower") from time to time, on the following terms
and conditions:
1. LINE OF CREDIT AMOUNT AND TERMS
1.1 Line of Credit Amount. The Borrower may borrow, repay and reborrow
from the Lender to and including February 24, 2004 (the "Termination Date"),
unless sooner notified by the Lender of the termination of this line of credit,
such amounts (the "Advances") as the Borrower may from time to time request, but
not exceeding the amount of $5,000,000 (or such reduced amount as may be fixed
by the Lender by written notice to the Borrower) in the aggregate at any one
time outstanding.
1.2 Note Evidencing Advances. The Advances will be evidenced by the
Borrower's promissory note (the "Note") in the form set forth as Exhibit A and
will be payable on the earlier of the Termination Date or demand. The Lender
will record all Advances made pursuant to this Agreement and all payments of
principal in its records, or at its option, on the schedule attached to the
Note, which records will be rebuttable presumptive evidence of the subject
matter thereof.
1.3 Election to Make Advances. The Borrower agrees that its compliance
with and its performance of the provisions of this Agreement do not obligate the
Lender to make any Advances and that the Lender will make any Advance in its
sole and absolute discretion.
1.4 Interest Rate.
(a) Prime Rate. Unless the Borrower elects an optional interest rate
as described below, the interest rate is a per annum rate equal to the
Lender's Prime Rate defined below.
The "Prime Rate" is the rate of interest publicly announced from
time to time by the Lender as its Prime Rate (the "Index"). The Prime
Rate is set by the Lender based on various factors, including the
Lender's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some
loans. The Lender may price loans to its customers at, above or below
the Prime Rate. Any change in the Prime Rate will take effect at the
opening of business on the day specified in the public announcement of
a change in the Lender's Prime Rate. The Index is not necessarily the
lowest rate charged by the Lender on its loans and is set by the
Lender in its sole discretion. If the Index becomes unavailable during
the term of this
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February 24, 2003
Page 2
loan, the Lender may designate a substitute index after notifying the
Borrower. The Lender will tell the Borrower the current Index rate
upon the Borrower's request.
(b) Optional Interest Rates. Instead of the interest rate based on
the Prime Rate, the Borrower may elect the optional LIBOR rate described in
Section 1.4(c) for the Advances. The optional rate(s) shall be subject to
the terms and conditions described in this Agreement. Any principal amount
bearing interest at an optional rate under this Agreement is referred to as
a "Portion". At the end of any interest period, the interest rate will
revert to the rate based on the Prime Rate, unless the Borrower has
designated another optional interest rate for the Portion.
(c) LIBOR Rate. The Borrower may elect to have all or Portions of the
principal balance bear interest at a rate per year equal to the LIBOR Rate
plus three-quarters (0.75) percentage points. Designation of a LIBOR Rate
Portion is subject to the following requirements:
(i) The interest period during which the LIBOR Rate will be in
effect will be one, two or three months. The first day of the interest
period must be a day other than a Saturday or a Sunday on which the
Lender is open for business in New York and London and dealing in
offshore dollars (a "LIBOR Banking Day"). The last day of the interest
period and the actual number of days during the interest period will
be determined by the Lender using the practices of the London
inter-bank market.
(ii) Each LIBOR Rate Portion will be for an amount not less than
$500,000. No more than eight separate LIBOR Rate Portions may be
outstanding at any time.
(iii) "LIBOR Rate" means the interest rate determined by the
following formula, rounded upward to the nearest 1/100 of one percent.
(All amounts in the calculation will be determined by the Lender as of
the first day of the interest period):
LIBOR Rate = London Inter-Bank Offered Rate
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(1.00 - Reserve Percentage)
Where,
(1) "London Inter-Bank Offered Rate" means the average per
annum interest rate at which U.S. dollar deposits would be
offered for the applicable interest period by major banks in the
London inter-bank market, as shown on the Telerate Page 3750 (or
any successor page) at approximately 11:00 a.m. London time two
(2) London Banking Days before the commencement of the interest
period. If such rate does not appear on the Telerate Page 3750
(or any successor page), the rate for that interest period will
be determined by such alternate method as reasonably selected by
Lender. A "London Banking Day" is a day on which Lender's London
Banking Center is open for business and dealing in offshore
dollars.
(2) "Reserve Percentage" means the total of the maximum
reserve percentages for determining the reserves to be maintained
by member banks of the Federal Reserve System for Eurocurrency
Liabilities, as defined in Federal Reserve Board Regulation D,
rounded upward to the nearest 1/100 of one percent. The
percentage will be expressed as a decimal, and will include, but
not be limited to, marginal, emergency, supplemental, special,
and other reserve percentages.
(iv) The Borrower shall irrevocably request a LIBOR Rate Portion
no later than 10:00 a.m. Chicago time on the LIBOR Banking Day
preceding the day on which the London Inter-Bank Offered Rate will be
set, as specified above. For example, if there are no intervening
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February 24, 2003
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holidays or weekend days in any of the relevant locations, the request
must be made at least three days before the LIBOR Rate takes effect.
(v) The Borrower may not elect a LIBOR Rate with respect to any
principal which is scheduled to be repaid before the last day of the
applicable interest period.
(vi) Each prepayment of a LIBOR Rate Portion, whether voluntary,
by reason of acceleration or otherwise, will be accompanied by the
amount of accrued interest on the amount prepaid and a prepayment fee
as described below. A "prepayment" is a payment of an amount on a date
earlier than the scheduled payment date for such amount as required by
this Agreement. The prepayment fee shall be equal to the amount (if
any) by which:
(1) the additional interest which would have been payable
during the interest period on the amount prepaid had it not been
prepaid, exceeds
(2) the interest which would have been recoverable by the
Lender by placing the amount prepaid on deposit in the domestic
certificate of deposit market, the eurodollar deposit market, or
other appropriate money market selected by the Lender, for a
period starting on the date on which it was prepaid and ending on
the last day of the interest period for such Portion (or the
scheduled payment date for the amount prepaid, if earlier).
(vii) The Lender will have no obligation to accept an election
for a LIBOR Rate Portion if any of the following described events has
occurred and is continuing:
(1) Dollar deposits in the principal amount, and for
periods equal to the interest period, of a LIBOR Rate Portion are
not available in the London inter-bank market; or
(2) the LIBOR Rate does not accurately reflect the cost of
a LIBOR Rate Portion.
(d) Interest Calculation. Except as otherwise stated in this
Agreement, all interest will be computed on the basis of a 360-day year and
the actual number of days elapsed.
(e) Default Rate. Commencing 48 hours after demand, the unpaid
principal balance of the Note will bear interest at a rate per annum which
is 4% percent higher than the rate of interest otherwise provided under
this Agreement.
1.5 Repayment Terms.
(a) Interest. Interest accruing prior to demand on a Prime Rate
Portion will be payable monthly on the first day of each month and at the
time of demand, beginning with the first such date to occur after the
initial Advance. Interest accruing prior to demand on an optional rate
Portion will be paid on the last day of each interest period, and, if the
interest period is longer than 3 months then on the day which is 3 months
after the first day of the interest period, and thereafter each 3 months
during the interest period. Interest accruing after demand will be payable
on demand.
(b) Principal. If demand for payment is not sooner made, the Borrower
will repay in full all principal and any unpaid interest or other charges
outstanding under this Agreement no later than the Termination Date;
provided, however, that any amount bearing interest at an optional interest
rate may be repaid at the end of the applicable interest period, which
shall be no later than the Termination Date.
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2. DISBURSEMENTS, PAYMENTS AND COSTS
2.1 Requests for Advances. Each request for an Advance will be made in
writing in a manner acceptable to the Lender, or by another means acceptable to
the Lender.
2.2 Disbursements and Payments. Each Advance made by the Lender in its
sole and absolute discretion and each payment by the Borrower will be made in
immediately available funds.
2.3 Telephone and Telefax Authorization.
(a) The Lender may honor telephone or telefax instructions for
advances or repayments or the designation of optional interest rates given
or purported to be given by any one of the individuals authorized to sign
loan agreements on behalf of the Borrower, or any other individual
designated by any one of such authorized signers.
(b) The Borrower will indemnify and hold the Lender harmless from all
liability, loss, and costs in connection with any act resulting from
telephone or telefax instructions the Lender reasonably believes are made
by any individual authorized by the Borrower to give such instructions.
This paragraph will survive this Agreement's termination, and will benefit
the Lender and its officers, employees, and agents.
2.4 Direct Debit.
(a) The Lender agrees to notify the Borrower of principal and
interest due and upon notification and approval by the Borrower, with such
approval not to be unreasonably withheld or delayed, the Borrower agrees
that interest and principal payments will be deducted automatically on the
due date from the Borrower's checking account number 8666108573, or such
other of the Borrower's accounts with the Lender as designated in writing
by the Borrower.
(b) The Borrower will maintain sufficient funds in the account on the
dates the Lender enters debits authorized by this Agreement. If there are
insufficient funds in the account on the date the Lender enters any debit
authorized by this Agreement, the debit will be reversed.
2.5 Banking Days. Unless otherwise provided in this Agreement, a "Banking
Day" is a day other than a Saturday, Sunday or other day on which commercial
banks are authorized to close, or are in fact closed, in the state where the
Lender's lending office is located. All payments and disbursements which would
be due on a day which is not a Banking Day will be due on the next Banking Day.
All payments received on a day which is not a Banking Day will be applied to the
credit on the next Banking Day.
2.6 Additional Costs. The Borrower will pay the Lender, on demand, for the
Lender's costs or losses arising from any statute or regulation, or any request
or requirement of a regulatory agency which is applicable to all national banks
or a class of all national banks. The costs and losses will be allocated to the
Advances in a manner determined by the Lender, using any reasonable method. The
costs include the following:
(a) any reserve or deposit requirements; and
(b) any capital requirements relating to the Lender's assets and
commitments for credit.
2.7 Taxes. The Borrower will not deduct any taxes from any payments it
makes to the Lender. If any government authority imposes any taxes on any
payments made by the Borrower, the Borrower will pay the taxes and will also pay
to the Lender, at the time interest is paid, any additional amount which the
Lender specifies as necessary to preserve the after-tax yield the Lender would
have received if such taxes had not been imposed. Upon request by the Lender,
the Borrower will confirm that it has paid the taxes by giving the Lender
official tax receipts
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(or notarized copies) within 30 days after the due date. The Borrower will not
pay the Lender's net income taxes or any taxes based upon the Lender's revenues.
3. CONDITIONS. Prior to requesting the initial Advance, the Borrower will
furnish the Lender with each of the following documents, each duly executed and
dated as of the date of the Borrower's acceptance of this Agreement:
3.1 Note. The Note payable to the order of the Lender.
3.2 Authorizations. Evidence that the execution, delivery and performance
by the Borrower of this Agreement and the Note have been duly authorized.
3.3 Good Standing. Certificate of good standing for the Borrower from its
state of incorporation.
3.4 Other Items. Any other items that the Lender reasonably requires.
4. ENFORCING THIS AGREEMENT; MISCELLANEOUS.
4.1 Illinois Law. THIS AGREEMENT IS GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF ILLINOIS.
4.2 Successors and Assigns. This Agreement is binding on the Borrower's
and the Lender's successors and assignees. The Borrower agrees that it may not
assign this Agreement without the Lender's prior written consent.
4.3 Severability; Waivers. If any part of this Agreement is not
enforceable, the rest of the Agreement may be enforced.
4.4 Expenses. The Borrower agrees to reimburse the Lender upon demand,
whether or not any Advance is made under this Agreement, for all expenses and
reasonable attorneys' fees, including any allocated costs of in-house counsel,
incurred by the Lender in (a) the preparation, negotiation and execution of this
Agreement, the Note and all other documents delivered in connection with this
Agreement; (b) enforcing the Borrower's obligations under this Agreement, the
Note or any other document delivered in connection with this Agreement; and (c)
participating in any proceeding (whether instituted by the Lender, the Borrower
or any other person and whether in bankruptcy or otherwise) or responding to any
claim in any way relating to this Agreement, the Note or any document delivered
in connection with this Agreement. The Borrower further agrees to pay, and save
the Lender harmless from all liability for, any stamp or other taxes which may
be payable with respect to the execution or delivery of this Agreement or the
issuance of the Note, which obligations will survive any termination of this
Agreement.
4.5 One Agreement. This Agreement and any related other agreements
required by this Agreement, collectively:
(a) represent the sum of the understandings and agreements between
the Lender and the Borrower concerning this credit; and
(b) replace any prior oral or written agreements between the Lender
and the Borrower concerning this credit; and
(c) are intended by the Lender and the Borrower as the final,
complete and exclusive statement of the terms agreed to by them.
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February 24, 2003
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In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail.
4.6 Notices. All notices required under this Agreement shall be personally
delivered or sent by first class mail, postage prepaid or by overnight courier,
to the addresses set forth above, or to such other addresses as the Lender and
the Borrower may specify from time to time in writing. Notices sent by first
class mail shall be deemed delivered on the earlier of actual receipt or the
fourth Banking Day after deposited in the U.S. mail.
4.7 Headings. Article and paragraph headings are for reference only and
shall not affect the interpretation or meaning of any provisions of this
Agreement.
4.8 Counterparts. This Agreement may be executed in as many counterparts
as necessary or convenient, and by the different parties on separate
counterparts each of which, when so executed, shall be deemed an original but
all such counterparts shall constitute but one and the same agreement.
4.9 Consent to Jurisdiction. To induce the Lender to accept this
Agreement, the Borrower irrevocably agrees that subject to the Lender's sole and
absolute election, ALL ACTIONS OR PROCEEDINGS IN ANY WAY ARISING OUT OF, FROM OR
RELATED TO THIS AGREEMENT OR THE NOTE WILL BE LITIGATED IN COURTS HAVING SITUS
WITHIN CHICAGO, ILLINOIS. THE BORROWER HEREBY CONSENTS AND SUBMITS TO THE
JURISDICTION OF ANY COURT LOCATED WITHIN CHICAGO, ILLINOIS, WAIVES PERSONAL
SERVICE OF PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL DIRECTED TO THE BORROWER AT THE ADDRESS STATED ABOVE AND SERVICE
SO MADE WILL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT.
4.10 WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER EACH WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS (a) UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH
THIS AGREEMENT OR (b) ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE BORROWER FURTHER AGREES
THAT IT WILL NOT ASSERT ANY CLAIM AGAINST THE LENDER ON ANY THEORY OF LIABILITY
FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES.
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February 24, 2003
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If the foregoing is acceptable, please indicate the Borrower's agreement by
signing a copy of this Agreement where indicated below.
Very truly yours,
BANK OF AMERICA, N.A
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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VICE PRESIDENT
The foregoing is agreed to this
24th day of FEBRUARY,2003 KJA
▇▇▇▇▇▇▇▇ & STRUGGLES INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: TREASURER
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STATE OF IL )
}
COUNTRY OF ▇▇▇▇ )
Subscribed sworn to and acknowledged before me this 24th day of February,
2003 by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Treasurer of ▇▇▇▇▇▇▇▇ & Struggles International,
Inc, who personally appeared before me.
Witness my hand and official seal.
My commission expires: 1/6/06 /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Notary Public
[SEAL OF ▇▇▇▇▇ ▇▇▇▇▇▇]
