EXHIBIT 10.1
Loan Agreement
THIS LOAN AGREEMENT, dated as of March 28, 2005, by and between Xxxxxx
Xxxx Xxxxxxxx III, an individual with a residence of 00000 Xxxxx Xxxxx Xxx, Xxx
Xxxxx, Xxxxxxxxxx 00000 (the "Borrower"), and AICI, Inc, a corporation organized
and existing under the laws of the State of Nevada and having a place of
business at 0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000 (the
"Lender"):
W I T N E S S E T H:
WHEREAS, the Borrower desires to borrow four hundred thousand dollars
($400,000) from the Lender in order to pay certain debts due to the Internal
Revenue Service; and
WHEREAS, the Lender desire to loan four hundred thousand dollars
($400,000) to the Borrower upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. The Loan. Subject to the terms and conditions hereof, the Lender agrees
to loan to the Borrower the principal sum of four hundred thousand dollars
($400,000) (the "Loan") which principal sum, together with interest and premium
if any accrued thereon as herein provided, shall be due and payable in a single
installment one year from the funding of the Loan. The Borrower may extend the
due date an additional three (3) months, provided that he is not in default of
the Note, Deed of Trust or Pledge Agreement, as defined herein below, and the
Borrower pays an extension fee in the amount of five thousand dollars ($5,000)
prior to the one (1) year due date.
2. The Note; the Deed of Trust; the Pledge Agreement. The Loan shall be
evidenced by a promissory note of the Borrower, substantially in the form of
Exhibit A attached hereto and made a part hereof (the "Note"). The payment when
due of the principal amount of the Loan, together with accrued interest
(including overdue interest) thereon and all other amounts due and payable to
the Lender under this Loan Agreement and the Note, and the performance by the
Borrower of all of its other obligations under this Loan Agreement and the Note,
shall be secured by (i) a Deed of Trust on the real property located at 00000
Xxxxx Xxxxx Xxx, Xxx Xxxxx, Xxxxxxxxxx 00000, to be prepared by Chicago Title,
La Jolla, California, and (ii) a Pledge and Security Agreement, substantially in
the form of Exhibit B attached hereto and made a part hereof (the "Pledge").
3. Interest. Interest on the Note shall accrue at a rate per annum equal
to five and one-half percent (5 1/2) per annum, provided that upon the
occurrence of an Event of Default, including without limitation the failure of
the Borrower to pay any amount of principal or interest as and when due and
payable hereunder or under the Note, such amount shall thereafter bear interest
at a rate per annum equal to ten percent (10%) per annum, payable upon demand
until such overdue principal and interest are paid in full (both before and
after judgment).
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4. Prepayments. The Borrower may, at its option, at any time prepay the
Note in whole, without penalty, together with accrued interest (including
overdue interest) to the date of prepayment, upon at least five (5) days' prior
written notice to the Lender, specifying the date of prepayment. Such notice
shall be irrevocable and the payment amount specified in such notice shall be
due and payable on the date specified.
5. Payments. All payments (including prepayments) by the Borrower shall be
made without setoff or counterclaim to the Lender at the office of the Lender
referred to in the first paragraph hereof, or such other location which may from
time to time be designated in writing by the Lender, in lawful money of the
United States of America, by wire transfer of immediately available funds on the
due date thereof. If any payment hereunder or under the Note becomes due and
payable on a day other than a day on which banking institutions in the City of
San Diego and State of California are authorized by law to be open for business
(a "Business Day"), then payment shall be due and payable on the next succeeding
Business Day.
6. Use of Proceeds. The proceeds of the Loan shall be used to pay the
Borrower's federal income taxes to the Internal Revenue Service. No portion of
the proceeds of the Loan shall be used by the Borrower in any manner which might
cause the Loan or the application of its proceeds to violate Regulation G,
Regulation U, Regulation T, or Regulation X of the Board of governors of the
Federal Reserve System or any other regulation promulgated by such Board of
governors or to violate the Securities Exchange Act of 1934, as amended.
7. Conditions Precedent. The obligation of the Lender to make the Loan
shall be subject to the fulfillment prior to or contemporaneously with the
making of such Loan of the following conditions precedent: (a) each of this Loan
Agreement, the Note, the Deed of Trust and the Pledge (collectively, the "Loan
Documents") shall have been executed and delivered by the respective parties
thereto; and (b) all proceedings and all other documents and legal matters in
connection with the transactions contemplated by this Loan Agreement and the
other Loan Documents shall be satisfactory in form and substance to the Lender
and its counsel, including, but not limited to, a preliminary title report and a
title insurance policy, . For purposes of closing this Loan, the parties shall
open an escrow ("Escrow") at Chicago Title Company, La Jolla, California.
8. Events of Default. Upon the occurrence and during the continuance of
any of the following events:
(a) the Borrower shall fail to pay the principal of or interest on the
Note, or any other amount payable hereunder, when due, whether by acceleration,
by nature of prepayment or otherwise; or
(b) an Event of Default under any of the Loan Documents shall have
occurred and be continuing;
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then, and in any such event, automatically the Loan shall immediately terminate
and the Loan with accrued interest thereon and all other amounts owing under
this Loan Agreement and the other Loan Documents shall immediately become due
and payable.
9. Amendments and Waivers. No amendments to this Loan Agreement or any
other loan Document shall be effective without a written agreement signed by
authorized officers of both the Lender and the Borrower. No waiver of any
provision of this Loan Agreement or any other Loan Document shall be effective
without a written waiver signed by an authorized officer of the party making
such waiver.
10. Notices. Except as otherwise provided herein, all notices, requests
and demands to or upon the respective parties hereto to be effective shall be
transmitted in writing by hand delivery, by first class certified or registered
mail, or by overnight courier service, addressed to the Lender or the Borrower,
as the case may be, at the address for such person set forth in the first
paragraph of this Loan Agreement or at such other address as may be subsequently
submitted by written notice of either party. Notice given pursuant to this
paragraph 10 shall be deemed effective upon receipt.
11. No Waiver; Remedies Cumulative. No failure to exercise and no delay in
exercising on the part of the Lender any right, remedy, power or privilege under
this Loan Agreement or the other Loan Documents, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege under this Loan Agreement or any other Loan Document preclude any
other or further exercise thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege under this Loan Agreement or any other
Loan Document preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and shall be in addition to all other
remedies of Lender existing at law or in equity and not exclusive of any other
rights, remedies, powers and privileges provided by law or in equity or in this
Loan Agreement or the other Loan Documents.
12. Survival. All representations and warranties made under this Loan
Agreement and the other Loan Documents and in any document, instrument or
certificate delivered pursuant thereto or in connection therewith shall survive
the execution and delivery of this Loan Agreement and the other Loan Documents.
13. Payment of Expenses and Taxes. The Borrower agrees to promptly pay or
reimburse the Lender for all its costs and expenses incurred in connection with
this Loan Agreement and Escrow, or the other Loan Documents or in collecting any
payments due under this Loan Agreement or any other Loan Document, including
without limitation reasonable fees and disbursements of counsel and costs of
settlement to the Lender, any recording or filing fees and any and all
liabilities with respect to stamp, excise and other taxes, if any, which may be
payable or determined to be payable in connection with the transactions
contemplated hereby. The legal fees due for drafting the Loan Documents in the
amount of one thousand eight hundred dollars ($1,800) shall be paid to Xxxxxxxxx
Law Group PC.
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14. Successors and Assigns. This Loan Agreement and the other Loan
Documents shall be binding upon and inure to the benefit of the Borrower, the
Lender and their respective successors and assigns.
15. Counterparts. This Loan Agreement may be executed by one or more of
the parties on any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
16. Governing Law. This Loan Agreement and the other Loan Documents shall
be governed by, and construed and interpreted in accordance with, the laws of
the State of California.
17. Miscellaneous. Section or paragraph headings in this Loan Agreement
are for convenience of reference only and do not affect the rights or
obligations of any party hereto. In the event that any one or more of the
provisions contained in this Loan Agreement or any other Loan Document shall,
for any reason, be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
in this Loan Agreement or such other Loan Document. This Loan Agreement together
with the exhibits hereto, and those portions of the Loan Documents incorporated
by reference herein, embody the entire agreement and understanding between the
parties hereto and supersede all other agreements and understandings relating to
the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to
be duly executed and delivered by their duly authorized officers as of the day
and year first above written.
/s/ Xxxxxx Xxxx Xxxxxxxx III
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Xxxxxx Xxxx Xxxxxxxx III
AICI, Inc.
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
