EXHIBIT 10.2
LOAN AGREEMENT
This Agreement (the "Agreement") is made and entered into this 12th day of
January, 2000, by and between -------------- ("Lender"), an individual residing
at -----------------------------------------------, and AmeriStar Corp. and/or
assigns ("Borrower"), with offices located in care of AmeriStar Network, Inc.,
000 Xxxxx Xxxx Xxxxx, Xxxxx X-000, Xx. Xxxxxx, XX 00000.
Lender and Borrower may collectively be referred to herein as the "Parties".
RECITALS
WHEREAS, Borrower is simultaneously entering into a Subscription Agreement with
Lender under which Lender is purchasing an aggregate of Eight Million
(8,000,000) shares of the common stock of Borrower (the shares of common stock
of Borrower shall be referred to hereinafter as the "Stock"), and Lender expects
to utilize the value of the Stock to obtain capital for the acquisition of
assets and/or securities of other businesses in connection with the operations
of Borrower;
WHEREAS, Lender has represented to Borrower that Lender may be able to utilize
the Stock to obtain the funds aggregating Sixty-Five Million U.S. Dollars
(US$65,000,000) to loan to Borrower in accordance with the terms and conditions
of this Agreement; and
WHEREAS, Borrower and Lender are willing to comply with the herein contained
terms and conditions for the aforesaid loan to Borrower;
NOW, THEREFORE, in consideration of the herein contained recitals, the mutual
covenants set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties agree as follows:
1. RECITALS
The foregoing recitals shall be deemed to be a part of this agreement for
all purposes and not merely recitals.
2. TERMS OF LOAN
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a. Lender shall loan an aggregate of Thirty-Five Million Dollars
($35,000,000) to Borrower in an initial funding (the "Initial
Funding") in accordance with the terms and conditions of this
Agreement. The Initial Funding shall be made in four increments in the
respective amounts of $3,500,000 ("First Traunche"), $10,500,000
("Second Traunche"), $10,500,000 ("Third Traunche") and $10,500,000
("Fourth Traunche") and in the manner set forth herein.
b. Lender shall loan an additional Thirty Million Dollars ($30,000,000)
to Borrower in a subsequent funding (the "Second Funding") in
accordance with the terms and conditions of this Agreement. The Second
Funding shall be made in three increments, each in the amount of
$10,000,000 and in the manner set forth herein.
c. Lender will provide the First Traunche of the Initial Funding no later
than twenty (20) business days after the Borrower shall have deposited
the Stock into the Designated Account, but in no event prior to
Borrower having furnished to Lender documentation substantiating that
either (i) the daily closing market price for Borrower's Stock shall
have been a price of at least $5.00 per share and trading at an
average volume of at least fifteen thousand (15,000) shares per day
for twenty (20) business days in a period of thirty (30) business days
or less, or (ii) three of the Targets (as that term is defined in
Paragraph 3.a. below) are ready to close with Borrower and all that is
necessary to close same is the cash provided by the Initial Funding;
and Lender shall have three (3) business days thereafter in which to
make such payment. Subsequent to the provision of the First Traunche,
Lender shall not be required to provide any other funding required
hereunder on its respective due date if condition (i) immediately
above shall not have been met, instead providing such funding on the
day subsequent to condition (i) above having been met. The remaining
increments of the Initial Funding shall be provided monthly thereafter
on the same day of each calendar month as the First Traunche shall
have been made, commencing on the next calendar month after the First
Traunche shall have been made and continuing for consecutive calendar
months until all four increments shall have been provided, or as
otherwise deemed necessary by mutual agreement to close Target
Transactions, subject to condition (i) above having been met.
d. Lender will provide the first increment of the Second Funding no later
than thirty (30) business days after Lender has made the Fourth
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Traunche; PROVIDED, HOWEVER, prior to the provision of the first
increment of such Second Funding, Borrower shall submit to Lender for
Lender's approval, such approval to be not unreasonably withheld, the
Targets (as that term is defined in Paragraph 3.a below) in which
Borrower intends to acquire or invest on the securities thereof with
the funds provided by such Second Funding. Lender shall not be
required to provide any increment of the Second Funding required
hereunder on its respective due date if the daily closing market price
for Borrower's Stock shall not have been at a price of at least $5.00
per share price and trading at an average volume of at least fifteen
thousand (15,000) shares per day for twenty (20) business during the
thirty (30) days preceding the due date of an increment of the Second
Funding, instead providing such funding on the day subsequent to
condition (i) set forth in Paragraph 2.c above having been met. The
remaining increments of the Second Funding shall be provided monthly
thereafter on the same day of each calendar month as the first
increment of the Second Funding shall have been made, commencing on
the next calendar month after the first increment of the Second
Funding shall have been made and continuing for consecutive calendar
months until all three increments shall have been provided, or as
otherwise deemed necessary by mutual agreement to close Target
Transactions.
e. Simultaneously with execution of this Agreement by the Parties,
Borrower shall execute a series of promissory notes payable to the
order of Lender (the "Notes") and deliver same to Lender's Attorney to
be held in escrow in accordance with the provisions of the
Subscription Agreement. The Notes shall be prepared by Lender's
Attorney, shall bear interest at 6% per annum before maturity and 18%
per annum after maturity, shall be for a term of one (1) year and
shall otherwise be in form acceptable to Lender. The Notes are
identified as follows:
NOTE PRINCIPAL AMOUNT
---- ----------------
Series A $ 3,500,000
Series B $10,500,000
Series C $10,500,000
Series D $10,500,000
Series E $10,000,000
Series F $10,000,000
Series G $10,000,000
f. Upon receipt by Borrower of the First Traunche, the Series A Note
shall be deemed delivered to Lender and such date shall be deemed to
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be the date on which the Series A Note was made. The due date of the
Series A Note shall be the first anniversary of the Series A Note.
g. Upon receipt by Borrower of the Second Traunche, the Series B Note
shall be deemed delivered to Lender and such date shall be deemed to
be the date on which the Series B Note was made. The due date of the
Series B Note shall be first anniversary of the Series B Note.
h. Upon receipt by Borrower of the Third Traunche, the Series C Note
shall be deemed delivered to Lender and such date shall be deemed to
be the date on which the Series C Note was made. The due date of the
Series C Note shall be the first anniversary of the Series C Note.
i. Upon receipt by Borrower of the Fourth Traunche, the Series D Note
shall be deemed delivered to Lender and such date shall be deemed to
be the date on which the Series D Note was made. The due date of the
Series D Note shall be the first anniversary of the Series D Note.
j. Upon receipt by Borrower of the first increment of the Second Funding,
the Series E Note shall be deemed delivered to Lender and such date
shall be deemed to be the date on which the Series E Note was made.
The due date of the Series E Note shall be the first anniversary of
the Series E Note.
k. Upon receipt by Borrower of the second increment of the Second
Funding, the Series F Note shall be deemed delivered to Lender and
such date shall be deemed to be the date on which the Series F Note
was made. The due date of the Series F Note shall be the first
anniversary of the Series F Note.
l. Upon receipt by Borrower of the third increment of the Second Funding,
the Series G Note shall be deemed delivered to Lender and such date
shall be deemed to be the date on which the Series G Note was made.
The due date of the Series G Note shall be the first anniversary of
the Series G Note.
m. Lender's Attorney is hereby authorized and instructed to enter the
dates of the making of the Notes and their respective due dates as
determined in the preceding subparagraphs.
n. In the event any funds are held or to be held in escrow pursuant to
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this Agreement, the escrow agent for such funds shall be Lender's
Attorney, who shall hold and maintain such funds pursuant to this
Agreement. Lender's Attorney shall be permitted to establish such
accounts as are reasonable under the circumstances so that the party
or parties entitled to the income therefrom will be able to derive
such income. Lender's Attorney shall be entitled to reimbursement for
all expenses incurred and a reasonable fee for the management of such
accounts and shall be paid for such fee and expenses, if any, out of
the funds in the accounts.
3. CONDITIONS, REQUIREMENTS, EXCLUSIVE REMEDIES
a. Borrower represents that the purpose of the transfer of Borrower's
Stock to Lender is to enable Lender to raise capital to loan to
Borrower to engage in the acquisition of assets and/or investment in
businesses (the "Targets") or merger with such Targets related to and
in connection with the operations of Borrower and its plan for growth.
Borrower represents that the following Targets constitute the entirety
of the Targets and their respective projected acquisition costs that
Borrower has identified and disclosed to Lender and that Borrower
intends to acquire or make an investment in the securities of such
Targets:
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b. No later than thirty (30) business days after Lender's Stock shall
have been deposited to the Designated Accounts, Borrower shall provide
to Lender an executed contract between Borrower and Targets confirming
their agreement to the following:
(i) that each such Target identified in this Agreement is considering
being acquired by Borrower or is prepared to accept an investment
by Borrower and that the projected acquisition cost or investment
are approximately as stated in this Agreement;
(ii) that Lender shall have the option of disbursing loan proceeds set
forth hereunder to Borrower or directly to a Target on behalf of
Borrower.
c. No later than sixty (60) business days after Lender's Stock shall have
been deposited to the Designated Accounts, Borrower shall produce to
Lender letters of intent executed by the Borrower and by each Target
confirming and acknowledging (i) the intent of the Borrower to acquire
or invest in such Target, (i) the intent of the Target to be acquired
by or sell its securities to Borrower, (iii) the financial details of
each acquisition or investment, and (iv) the projected closing date of
each acquisition or investment.
d. If at any time during the period of funding of this loan, any
projected closing date for these acquisitions shall not have occurred
as stated in the letters of intent, or any such closing is not ready
to occur by the time a funding is to be made, a pro rata portion of
such funding may, at Lender's sole option, be held in escrow and not
disbursed or deemed disbursed to Borrower unless and until such
delayed closings shall have occurred or are about to occur and for
which such funds are necessary. The purpose of the last sentence is to
assure that the proceeds from this transaction are utilized for the
intended acquisitions or investments; provided, however, that up to
ten (10%) percent of the total loan, as funded, may be directed and
disbursed by Borrower, at its sole discretion, to be used in the
general operations of Borrower. Borrower shall have the right to
substitute new targets for the Targets identified herein; provided,
however, the acquisition or investment transactions contemplated
hereby shall not change in any substantial or material aspect as a
result of substitutions.
e. Until the First Traunche shall have been made, all of Lender's Stock
shall remain in the Designated Accounts, except only in the event
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Lender is required to move same for use as collateral in raising the
funds for this loan. After each funding shall have been made, Lender
shall be entitled to transfer, alienate, hypothecate or encumber that
number of shares equal to the amount of each such funding at the
conversion value of such shares. At such time as the Lender shall have
funded $14,000,000 of the loan, Lender shall thereafter be free to
transfer, alienate, hypothecate or encumber all or any portion of the
Stock.
f. Borrower shall have the option, so long as Borrower is not in default
of any of the notes, to repurchase Lender's Stock for the price of
$14.00 per share.
g. The following remedies are designed to give neither party any
incentive, reason or advantage for breaching or terminating this
transaction, but instead to give both parties every reason to complete
the performance of this Agreement:
(i) BORROWER'S REMEDY. In the event any funding of the loan is not
made within ten (10) days after its due date, Borrower shall have
the option to terminate further performance of this transaction
and obtain return of Lender's Stock remaining encumbered pursuant
to the Subscription Agreement executed simultaneously with this
Agreement after written notice to the Lender and three (3)
business days shall have thereafter passed without cure of the
failure to fund. Upon receipt of such notice and lapse of the
cure period without cure, Lender and Borrower shall instruct the
depository institution at which the Designated Accounts are
located to immediately begin to effect the release of said
Lender's Stock and transfer and return of same to Borrower in the
same proportionate ownership as in effect immediately prior to
execution of this Agreement. The Parties understand that return
of said Lender's Stock may require certain time as dictated by
law and/or by the depository institution. The termination of
further performance of this transaction and return of said
Lender's Stock shall be the exclusive remedy of the Borrower for
Lender's breach of this Agreement, and the Borrower waives any
other remedies at law or in equity. If Borrower must resort to
judicial process in order to obtain return of such Stock, then
Lender shall be responsible to Borrower for reasonable attorneys
fees and court costs incurred thereby. In order to facilitate the
return of said Lender's Stock to the Borrower, the Parties agree
that such of Lender's Stock to which Borrower shall be entitled
to obtain return shall be deemed invalid and wrongfully endorsed
by mutual consent (with no liability between or among the Parties
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for such invalidity or wrongful endorsement), and the Parties
shall take all reasonable actions to obtain return thereof,
including notice of a stop order cancellation.
(ii) LENDER'S REMEDY. In the event Borrower shall for any reason or
for no reason fail or refuse to close the acquisition of or
investment in the Targets in the manner established by the
letters of intent, fundings of the loan may, as stated elsewhere
herein, be held in escrow until such time as the acquisition or
merger shall be closed. If any of said closings do not occur
within a reasonable time after they were initially scheduled,
then the portion of the moneys held in escrow that were earmarked
for such failed closings shall be returned to Lender and the
total loan amount shall be deemed to be reduced by the amount of
such return.
h. From the time this Agreement is executed until such time as Lender
shall have funded $14,000,000 of the Loan, Lender's name shall not be
set forth in any press releases or other documents intended for
general dissemination or circulation unless dictated by regulatory
requirements, and all releases shall first be made available to Lender
for review prior to release.
i. The chronology of events and requirements hereunder shall be deemed to
establish a series of conditions precedent to events and requirements
subsequent thereto. In other words, any event or requirement that is
to occur before any other event or requirement shall be a condition
precedent to such other event or requirement, and the failure or delay
of such condition shall be good reason for the failure or delay of
such other event or requirement.
4. CONTINUING REPRESENTATIONS AND WARRANTIES, SAVINGS CLAUSE, INDEMNIFICATION
a. Borrower represents and warrants, which representations and warranties
shall continue so long as there remains any performance hereunder due
by any of the Parties and which shall survive this transaction and its
full performance, as follows:
(i) that Lender's Stock shall be shares of the capital stock of
Borrower that are non-assessable and non-callable and that
Borrower will produce proof of such no later than the time for
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producing letters of intent regarding acquisition of or
investment in Targets as provided elsewhere herein;
(ii) that the transactions set forth herein and contemplated hereby
are fully and completely authorized by Borrower, do not conflict
with and are not in violation of any of the minutes or
organizational documents of Borrower or any contracts to which
the Borrower may be a party;
(iii)that Borrower is and shall be in full compliance with all
requirements of applicable jurisdictions and the Securities
Exchange Act of 1934, as amended and all applicable securities
laws;
(iv) that the transaction set forth herein and contemplated hereby is
not in violation of the provisions of the Securities Exchange Act
of 1934, as amended; and
(v) that Borrower has reviewed this Agreement in its entirety and has
obtained independent advice of counsel before executing same, or
has decided of its own volition not to seek such counsel and/or
to follow advice of such counsel.
b. If any term, covenant, condition or provision of this agreement or the
application thereof, at any time or to any extent, is held invalid or
unenforceable, the remainder of this agreement shall not be affected,
and each other term, covenant, condition, and provision of this
agreement shall be valid and enforceable to the fullest extent
permitted by law.
c. Borrower hereby holds Lender harmless and indemnifies Lender from and
against any and all claims, assertions, actions, causes of action,
damages, losses, costs and attorneys fees that may arise in connection
with this Agreement and this transaction and which may be claimed or
asserted by persons or entities not party to this Agreement, except as
may be asserted by Lender or any persons or entities claiming by,
through, under or against Lender. For purposes of this paragraph,
Lender shall be deemed to include Lender's officers, agents,
directors, stockholders, employees and attorneys.
5. NOTICES
a. Any notice required or advisable hereunder, from Borrower to Lender or
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from Lender to Borrower, shall be deemed served effective upon receipt
by the intended recipient and shall be given only by personal delivery
or by registered or certified mail return receipt requested, addressed
to the Borrower or to the Lender. The Parties may communicate by
facsimile transmission, but notices given in this manner shall be
deemed as received only if such receipt is explicitly or implicitly
acknowledged by the intended recipient. Notices received by a majority
of the persons and entities in the Borrower group shall be deemed as
received by all of them if such notices have been sent to all of them.
For purposes hereof, the following addresses and fax numbers are
furnished:
(i) Borrower:
AmeriStar Corp., c/o AmeriStar Network, Inc., 000 Xxxxx Xxxx
Xxxxx, Xxxxx X-000, Xx. Xxxxxx, Xxxx; Fax: 000-000-0000.
(ii) Lender:
--------------------
6. CONFIDENTIALITY
a. This agreement will be maintained confidential and will not be
reproduced in any manner whatsoever to any person or entity not a
Party hereto, excluding attorneys engaged by any of the Parties, court
order or government order. Both Parties agree not to circumvent the
legitimate interests of the other, and to maintain strict
confidentiality regarding the transaction.
b. Each Party shall maintain the confidentiality of trade secrets,
techniques and contacts of the other Party.
7. BROKERS
The Parties represent and agree that there are no brokers or finders or any
other persons or entities who may be entitled to brokerage or finder's or
introducer's fees, with the sole exception of Xxx Xxxxx, for whom Lender
agrees to be solely responsible for the payment of any and all fees that
may inure to him as a result of the transaction contemplated herein; Lender
holds Borrower harmless in connection with same. In all other events, each
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party hereto hereby indemnifies and holds the other harmless in the event
any person or entity claims or asserts a claim to brokerage or finder's or
introducer's fees or the like, and each indemnitor shall provide such
indemnification in the event a claim is made through that indemnitor. All
such indemnification shall include liability, loss, damage, costs and
attorneys fees.
8. MISCELLANEOUS
a. This agreement constitutes the sole agreement between the Parties
hereto, with respect to the subject matter herein and cannot be
amended or waived except by an instrument in writing signed by the
Party to be bound thereby. Unless and except as otherwise provided
herein, no prior or contemporaneous discussions between or among or
representations of any of the Parties shall be admissible to change,
modify or amend the provisions hereof.
b. This agreement shall be governed and construed in accordance with the
laws of the State of Florida.
c. Borrower acknowledges that Lender is not acting as a mortgage or
securities broker or dealer or acting in any capacity as an investment
advisor as defined under the Investment Advisors Act of 1940 or other
similar law. This agreement is not intended for the purpose of buying
or trading securities, or offering counsel or advice with respect to
any such activities. This agreement is a single private transaction.
Borrower has sought or agrees to seek the advice of counsel in
connection with the negotiation and consummation of any transaction
contemplated hereunder, or has waived such as provided otherwise
herein.
d. All references herein to dollars shall be deemed to mean currency of
the United States of America, United States Dollars.
e. All references herein to the singular, plural, or any gender, shall be
deemed to include the singular, plural, and any or all genders, as
applicable.
f. All references herein to the Stock shall be deemed to include Lender's
Stock and all certificates representing Lender's Stock.
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g. This agreement is the result of negotiation between and among the
Parties. There shall not be applied a rule of construction which
construes any provision hereof or the entirety hereof against the
party who prepared or whose counsel prepared this agreement.
h. The Parties recognize that Borrower is contemplating a merger with
another entity, and it is intended that this Agreement shall follow
such merger so that the surviving entity is bound to this Agreement as
Borrower.
i. This agreement may be executed in counterparts, and each counterpart
will be deemed as if signed by all signatories who have signed a
counterpart.
j. Facsimile copies hereof, containing facsimile signatures of the
signatories, shall be deemed as originals and given the same operative
effect and have the same enforceability as originals.
9. PRIOR AGREEMENTS
All prior documents that may appear to be or be deemed to be agreements or
contracts between the Parties related in any way to the stock of the
Corporation are void and of no effect. The Parties acknowledge that other
such documents may have been signed but were never delivered or deemed
delivered by one party to the other or considered by the Parties to have
created a binding obligation among them. The Parties agree and acknowledge
that this Agreement is the first and final agreement between them in
relation to the Notes and Lender's Stock, unless and except as this
Agreement may be amended or modified in the manner permitted herein.
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SIGNATURE PAGE
IN WITNESS THEREOF, the Parties have caused this Agreement to be executed as of
the day first above written.
Borrower: Lender:
AMERISTAR CORP.
/s/ Xxxxx Xxxxxxx Xxxxxxxx, Xx.
------------------------------- ----------------------------
Xxxxx Xxxxxxx Xxxxxxxx, Xx. --------------, Individually
Chairman of the Board
Lender's Attorney, as Escrow Agent:
/s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx, Esquire
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