Exhibit 10.16
LOAN AGREEMENT
THIS LOAN AGREEMENT is entered into as of the 9th day of July 2004 by and
between AmeriFirst, Inc., a Delaware corporation ("AmeriFirst"), and Xxx Xxxxx,
("Xxxxx").
Background
AmeriFirst is in the viatical and life settlement business. Xxxxx desires
to loan Six Hundred Thousand ($ 600,000) Dollars (the "Loan") to AmeriFirst.
AmeriFirst and its shareholders have entered into that certain Letter Agreement
dated of even date herewith (the "Letter Agreement") which contemplates and is
conditioned upon Xxxxx making the Loan. As an inducement to make the Loan to
AmeriFirst, Xxxxx will receive a 10% equity interest in AmeriFirst. Capitalized
terms used and not otherwise defined herein shall have the meanings assigned
thereto in the Letter Agreement.
Agreement
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1. Loan. Xxxxx shall loan to AmeriFirst, and AmeriFirst shall borrow from
Xxxxx, the sum of Six Hundred Thousand Dollars ($600,000), to be funded as
follows: $200,000 shall be wired to the account of AmeriFirst on July 9, 2004,
$200,000 on August 9, 2004 and the remaining $200,000 on September 9, 2004. The
Loan shall be evidenced by a Promissory Note in the form attached hereto as
Exhibit A (the "Note").
2. Repayment of the Loan. The Loan, together with interest accrued at the
rate of eight percent (8.0%) per annum, shall be paid from the Net Operating
Income of AmeriFirst in accordance with the provisions of Section 3 of the
Letter Agreement; provided, however, the repayment of the Loan shall be
subordinate to the repayment of the Operational Loans and subject to the terms
of the Letter Agreement and any definitive documentation executed by AmeriFirst,
the Shareholders and Xxxxx, incorporating the terms thereof. Xxxxx hereby
acknowledges receipt of a copy of the executed Letter Agreement.
3. Equity Interest; Board Seat. As an inducement to make the Loan,
AmeriFirst agrees to grant to Xxxxx capital stock equal to a 10% equity interest
in AmeriFirst and appoint Xxxxx to a vacant seat on its Board of Directors, each
in accordance with the terms of the Letter Agreement. In the event Xxxxx fails
to fully fund the Loan, then Xxxxx shall not be entitled to either the equity
interest or Board appointment contemplated by this Section 3.
4. Governing Law; Venue. This Agreement shall be governed in all respects
by the laws of the State of Florida, without regard to any rules of conflict and
choice of laws that would
require the application of laws of another jurisdiction. The parties hereto (i)
agree that any suit, action or other legal proceeding arising out of or relating
to this Agreement shall be brought and heard in a court of competent
jurisdiction in the State of Florida and the United States District Court for
the Middle District of Florida, (ii) consent to the jurisdiction of any such
court in any such suit, action or proceeding, and (iii) waive any objection to
the laying of venue of any such suit, action or proceeding in any such court.
The prevailing party in any dispute arising hereunder, whether or not suit be
brought and including any appeals, will be entitled to recover from the other
party costs and reasonable attorneys' and paralegals' fees. Xxxxx waives any
objection based on forum non conveniens and any objection to venue in any action
instituted hereunder.
5. Indemnification. AmeriFirst hereby agrees to indemnify, defend and hold
harmless Xxxxx from any and all claims, loss, liability, costs and damage,
including without limitation court costs and attorney fees incurred by Xxxxx
arising out of or connected with, directly or indirectly with the operations of
AmeriFirst and this Loan.
6. Legal Fees. All reasonable legal fees incurred by Xxxxx in connection
with the negotiation, preparation and review of this Agreement, the Note or the
Letter Agreement shall be paid by AmeriFirst.
7. Non-Compete. Xxxxx agrees to execute and deliver a Non-Compete and
Non-Solicitation Agreement with AmeriFirst pursuant to which Xxxxx shall agree
not to compete with AmeriFirst in the viatical and life settlements business or
solicit any employees, investors, customers or business partners of AmeriFirst
for a period of three years from the date of the termination of his affiliation
with AmeriFirst.
8. Binding Effect. This Agreement shall be binding and inure to the
benefit of the parties hereto and their representatives, respective heirs,
successors and assigns.
9. Amendment. This Agreement may be amended only by written agreement
signed by all the parties hereto.
10. Construction. Words used in the singular, neuter or masculine are to
be construed in the plural, masculine or feminine, where applicable.
11. Severability. If any provision of this Agreement is found by a Court
of competent jurisdiction to be invalid or unenforceable for any reason
whatsoever, this shall not affect the validity or enforceability of any other
provision hereof.
12. Not Assignable. The rights and obligations of the parties to this Loan
Agreement are not assignable, either directly or indirectly.
IN WITNESS WHEREOF, the parties hereto have executed this Loan Agreement
as of the year and date first above written.
XXXXX:
/s/ Xxx Xxxxx
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Xxx Xxxxx
COMPANY:
AmeriFirst, Inc.
By: /s/ Xxxx X. Xxxxx
------------------------------
Xxxx X. Xxxxx, President
PROMISSORY NOTE
$600,000.00 July 9, 0000
Xx. Xxxxx, Xxxxxxx
FOR VALUE RECEIVED, AmeriFirst, Inc., a Delaware corporation, (hereinafter
referred to as the "Debtor"), promises to pay to the order of Xxx Xxxxx
(hereinafter referred to as "Holder"), at such place as the Holder may designate
in writing, the principal sum of Six Hundred Thousand Dollars ($600,000), or
such portion thereof as shall have been advanced by Holder, together with
interest at a rate equal to eight (8%) percent per annum on the unpaid balance
in lawful money of the United States, which shall be legal tender in payment of
all debts and due, public and private, at the time of payment as follows:
Payments of principal and interest shall be payable in full to Holder from
the Net Operating Income of Debtor in accordance with the provisions of
Section 3 of that certain Letter Agreement dated of even date herewith and
attached hereto as Exhibit A; provided, however, the repayment of this
Note shall be subordinate to the repayment of the Operational Loans (as
defined in the Letter Agreement) and subject to the terms of the Letter
Agreement and any definitive documentation executed by AmeriFirst, the
Shareholders and Xxxxx, incorporating the terms thereof.
This Note may be prepaid, in full or in part, at any time, without the
payment of any prepayment fee or penalty. Any payments shall first be applied to
accrued interest and the balance against the principal.
If Debtor shall fail to perform any of Debtor's obligations hereunder,
then a default of Debtor's obligations hereunder shall be deemed to have
occurred.
No delay on the part of the Holder in exercising any right under this Note
shall operate as a waiver of the right or of any other right under this note.
The waiver of a right on any one occasion shall not be construed as the waiver
of the right or remedy on any future occasion.
The Debtor hereby waives presentment for payment, demand, notice of
non-payment, notice of protest and protest of this Note, and diligence in
collection or bringing suit. If the Debtor is in default and all indebtedness
owing under this Note is due and payable, the Debtor agrees to pay the Holder's
costs of collection, including reasonable attorney's fees and court costs
incurred by the Holder in enforcing collection of this Note.
Debtor acknowledges that Holder may assign this Note to any person or
entity at any time without prior notice to Debtor. This obligation shall bind
the Debtor and the Debtor's successors and assigns, and the benefits hereof
shall inure to the Holder hereof and his successors and assigns.
AMERIFIRST, INC., a Delaware corporation
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, President
STATE OF GEORGIA
COUNTY OF CAMDEN
The foregoing instrument was executed, acknowledged and delivered before
me this 9th day of July 2004 by Xxxx X. Xxxxx, President of AmeriFirst, Inc., a
Delaware corporation, who has produced a Florida Drivers License as
identification.
/s/ Xxxxxxxx Xxxxx
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Notary Public, State and County
Aforesaid
Print Name: Xxxxxxxx Xxxxx
My commission expires: 8/21/05
SEAL My commission number:
