Document:

Exhibit 10.16

 

THE NOTE REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

SENIOR SECURED NOTE

 

	
$ ___________

	
___________, 2017

	
Note Number: ___________

	
Clearwater, Florida

 

FOR VALUE RECEIVED, e-TeleQuote Insurance, Inc., a Florida corporation (the “Company”), promises to pay to ___________ (the “Holder”), subject to the terms and conditions set forth herein, the principal sum of ___________ ($___________).  This Senior Secured Note (this “Note”) is issued as of the date first written above (the “Issuance Date”) and is one of a series of notes containing substantially identical terms and conditions issued pursuant to that certain Note Purchase Agreement dated as of June, 2017 (as amended, restated or otherwise modified from time to time, the “NPA”).  Capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the NPA.  Such notes are referred to herein collectively as the “Notes,” and the holders thereof are referred to herein collectively as the “Holders”.  This Note is subject to the following terms and conditions.

1.          Maturity; Payment.  Subject to the terms hereof, the “Maturity Date” for this Note shall be the one year anniversary of the Issuance Date (____, 2018); provided, however, that this Note is callable in advance of the Maturity Date by the Company in its sole discretion in accordance with Section 2(d) of the NPA. Payments of accrued interest shall be made on this Note on the [____th] calendar day of each month (each a “Monthly Payment Date”) beginning in July, 2017.  If the [____th] calendar day of a month is not a business day, payments shall be made on the next business day.  At the Maturity Date, even if the Company has not repaid in full the principal and all interest accrued thereon, all obligations under this Note shall become due and payable and the Holder (together with the other Holders) shall have recourse to the Collateral.

2.          Interest Payment and Accrual.  On each Monthly Payment Date, the Company will compute the principal and compute and distribute the interest payable on this Note.  The average monthly outstanding Note principal for the preceding calendar month will earn interest at an annual rate of 12%, calculated using a month of thirty (30) calendar days divided by a year of 360 calendar days.  In the event the Company fails to make any principal or interest payment then due on a Monthly Payment Date, such overdue amount shall thereafter accrue additional interest at an annual rate of 2% (so that the total interest rate is 14% per annum), calculated using a month of thirty (30) calendar days divided by a year of 360 calendar days.

3.          Payment; Prepayment.

A.          In accordance with Section 1 hereof, payments of interest on this Note shall be made commencing in July, 2017. Payments shall be characterized first as interest then due and payable, computed according to Section 2 above, and the remainder of any payments to the Holder shall be characterized as amortized principal.

B.          All payments shall be made in lawful money of the United States of America at such place as the Holder hereof may from time to time designate in writing to the Company.

C.          As provided in the NPA, the Company may return Note principal to the Holder in advance of the Maturity Date, so long as the Company concurrently pays in connection with such prepayment a prepayment fee in an amount calculated pursuant to Section 2(d) of the NPA as well as all accrued and unpaid interest.

4.          Events of Default.  Upon the occurrence of any of the following events (each an “Event of Default”):

A.          The Company fails to pay when due any principal of, or interest on, this Note and such failure shall continue for ten (10) business days;

B.          The Company shall become insolvent or generally fail to pay, or admit in writing its inability or unwillingness to pay, debts as they become due;

C.          The Company shall apply for, consent to or acquiesce in the appointment of a trustee, receiver, sequestrator or other custodian for the Company or any property thereof, or make a general assignment for the benefit of creditors;

D.          The Company shall permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for the Company or for a substantial part of the property thereof, and such trustee, receiver, sequestrator or other custodian shall not be discharged within sixty (60) days;

E.          The Company shall permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Company and, if any such case or proceeding is not commenced by the Company, such case or proceeding shall be consented to or acquiesced in by the Company or shall result in the entry of an order for relief or shall remain for sixty (60) days undismissed;

F.          The Guarantee from The Resource Group International Limited, an exempt Bermuda company (“TRG”) to the Company ceases for any reason to be in full force and effect, or;

G.          The Company fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in any Document, and as to any default (other than those otherwise specified in this Section) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within ten (10) business days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) business day period or cannot after diligent attempts by the Company be cured within such ten (10) business day period, and such default is likely to be cured within a reasonable time, then the Company shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default;

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H.          Any representation or warranty of the Company set forth in any Document shall prove to have been false or incorrect in any material respects when made or furnished; or

I.          There is an Event of Default under any other Note issued pursuant to the NPA;

then the Holder may, with the prior written consent of the Required Purchasers, (i) declare this Note and the principal of and accrued interest hereon, and all other amounts payable hereunder, to be forthwith due and payable in full (provided that this Note and all amounts payable hereunder shall be immediately due and payable without any action by the Holder upon the occurrence of any Event of Default pursuant to clauses (B) through (E) of Section 4); and (ii) exercise such rights and remedies with respect to the Collateral as are available to a secured party under the Code and other applicable laws.  The Company shall pay all costs of the Holder incurred in connection with the enforcement and collection of this Note, including but not limited to all reasonable attorneys’ fees, court costs and expenses incurred by the Holder in connection with such preparation, negotiation, execution, delivery, enforcement and collection hereunder.

5.          Transfer; Successors and Assigns.  The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Notwithstanding the foregoing, neither the Holder nor the Company may assign, pledge, or otherwise transfer this Note without the prior written consent of the other party.  Subject to the preceding sentence, this Note may be transferred only upon surrender of the original Note for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company.  Thereupon, a new note for the same principal amount and interest will be issued to, and registered in the name of, the transferee.  Interest and principal are payable only to the registered holder of this Note.

6.          Governing Law.  This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Florida, without giving effect to principles of conflicts of law.

7.          Notices.  Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or 24 hours after confirmation of delivery by electronic mail, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party’s address, electronic mail address or facsimile number as set forth below or as subsequently modified by written notice.  In the event notices are deposited in the U.S. mail or delivered personally, by overnight delivery service or facsimile, the sender of such notice shall also provide the recipient with a copy of such notice via electronic mail at the appropriate e-mail address set forth below, which electronic mail shall not constitute notice.

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8.          Amendments and Waivers.  Any term of this Note may be amended only with the written consent of the Company and the Required Purchasers (as defined in the NPA), provided that, except as set forth in Section 13, any amendment which affects the Holder in a manner that is materially adverse to the Holder, relative to the other Holders, shall additionally require the written consent of the Holder.  Any amendment or waiver effected in accordance with this Section 8 shall be binding upon the Company, each Holder and each transferee of any Note.

9.          Officers and Directors Not Liable.  In no event shall any officer or director of the Company be personally liable for any amounts due or payable pursuant to this Note.

10.        Interest Rate Limitation.  Notwithstanding anything to the contrary contained in this Note or the NPA (the “Loan Documents”), the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable law (the “Maximum Rate”).  If the Holder shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal remaining owed under this Note or, if it exceeds such unpaid principal, refunded to the Company.  In determining whether the interest contracted for, charged, or received by the Holder exceeds the Maximum Rate, the Holder may, to the extent permitted by applicable law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of this Note.

11.        Loss of Note.  Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Note or any Note exchanged for it, and indemnity satisfactory to the Company (in case of loss, theft or destruction) or surrender and cancellation of such Note (in the case of mutilation), the Company will make and deliver in lieu of such Note a new Note of like tenor.

12.        Counterparts.  This Note may be executed in any number of counterparts, each of which will be deemed to be an original and all of which together will constitute a single agreement.

13.        Pari Passu Notes.  Holder acknowledges and agrees that the payment of all or any portion of the outstanding principal amount of this Note and all interest hereon shall be pari passu in right of payment and in all other respects to the other Notes, unless the Required Purchasers have agreed otherwise.  In the event Holder receives payments in excess of its pro rata share of the Company’s payments to the Holders of all of the Notes, then Holder shall hold in trust all such excess payments for the benefit of the Holders of the other Notes and shall pay such amounts held in trust to such other Holders upon demand by such Holders.

[Signature Page Follows]

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IN WITNESS WHEREOF, the undersigned have executed this Senior Secured Note as of the date first written above.

	 	
COMPANY:

 

E-TELEQUOTE INSURANCE, INC.

 

By:                                                                                

 

___________ Its: ___________

 

Address:

 

___________

	
AGREED TO AND ACCEPTED

 

 [LENDER NAME]

 

                                                                                                                      

(Signature)

 

Name:                                                                                                           

(print)

 

Title:                                                                                                             

 

Address:

 

Electronic Mail: Phone:

Fax (optional):

 

Preferred Payment Method (please check one):

☐ Check

☐ Wire Transfer (please include wire transfer instructions below): Bank Name: Keypoint

Bank ABA/Routing # for wire transfers:

Bank ABA/Routing # for ACH (if different from wire transfer): Beneficial Account # at bank:

	 

SIGNATURE PAGE TO THE SENIOR SECURED NOTE OF ETELEQUOTE INSURANCE, INCExhibit 10.17

 

Dated: June 20, 2016

 

	(1)	
THE RESOURCE GROUP INTERNATIONAL, LTD.

	(2)	
ETELEQUOTE PLC

Loan Agreement

 

	
THIS LOAN AGREEMENT is made on

	
June 20, 2016 (“Effective Date”)

 

BETWEEN

		(1)	
THE RESOURCE GROUP INTERNATIONAL, LTD. (any exempted company incorporated in Bermuda) whose registered office is at Crawford House, 50 Cedar Avenue, Hamilton HM11, Bermuda (“Lender”); and

	(2)	
ETELEQUOTE PLC, a company formed under the laws of England and Wales with Registration No. 8587657 (“Borrower”).

BACKGROUND

	(A)	
The Lender is willing to advance monies to Borrower on the terms of this Agreement, and Borrower seeks to receive such monies under the terms of this Agreement.

OPERATIVE CLAUSES

	
1.

	
INTERPRETATION

		
In this Agreement:

 

	
1.1

	
the following expressions have the following meanings unless inconsistent with the context:

 

	 	
“Loan”

	
the  loan  of  the  Loan  Amount  to  the  Borrower pursuant to clause 2

	 	 	
	 	
“Loan Amount”

	
Ten Million Dollars USD ($10,000,000.00) subject as may be increased pursuant to clause 4 or reduced pursuant to clause 6

	 	 	
	 	
“Interest Rate”

	
15.00 per cent per annum

 

	1.2	
any reference to a clause is a reference to one of the clauses of this Agreement;

	1.3	
references to this Agreement (or to any other agreement or deed) means, at any time, this Agreement (or, as applicable, such other agreement or deed) as amended, novated, re-stated, substituted or supplemented at such time, provided that the relevant amendment, novation, re-statement, substitution or supplement does not breach any term of this Agreement;

	1.4	
references to any statutory provisions will, where the context so admits or requires, be construed as including references to the corresponding provisions of any earlier statute (whether repealed or not) directly or indirectly amended, consolidated, extended or replaced by those provisions (or re-enacted in those provisions) and of any subsequent statute in force at any relevant time directly or indirectly amending, consolidating, extending, replacing or re-enacting the same and will include any orders, regulations, instruments or other subordinate legislation made under the relevant statute;

	1.5	
US$ shall refer to the lawful currency of the United States of America;

 

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	1.6	
the descriptive headings to Clauses are inserted for convenience only, have no legal effect and shall be ignored in the interpretation of this Agreement; and

	1.7	
references to the singular include the plural and vice versa and any reference to the masculine shall include the feminine, as the context permits or requires.

	2.	
LOAN

The Lender shall lend to Borrower on or before 23 June 2016 an amount equal to the Loan Amount.

	3.	
PURPOSE OF LOAN

	3.1	
The proceeds of the Loan shall be applied to fully pay off of the current Ten Million Dollars USD ($10,000,000) note credit facility currently used by Borrower’s subsidiary, e-TeleQuote Insurance, Inc. (“Etel US”).

	4.	
INTEREST

	4.1	
Subject to clause 4.5, Borrower shall be required to pay interest, in accordance with clause 4.4, on the amount of the Loan Amount at a rate equal to the Interest Rate.

	4.2	
Interest on the amount of the outstanding Loan shall be calculated on a day to day basis, on the basis of a year of 365 days and shall accrue at the rate determined in accordance with clause 4.1.

	4.3	
On the last working day of each anniversary that the Loan remains outstanding, the total of any interest accrued during the current preceding year shall be added to the outstanding Loan Amount and interest shall accrue on such increased amount thereafter.

	4.4	
Subject to clause 6.1, Borrower shall pay accrued interest in respect of the amount of the outstanding Loan in arrears on the date on which Borrower repays the outstanding Loan Amount.

	4.5	
In the event that the circumstances in clause 6.2.2 arise, the Lender may increase the rate of interest from the Interest Rate to 25 percent (25%) per annum.

		5.	
COVENANT

		5.1	
The Borrower shall, at at all times when any Loan Amount is outstanding under this Agreement, maintain an LTV of sixty percent (60%) or less.

		5.1.1	
“LTV” means the then-existing Loan Amount divided by the Value.

		5.1.2	
“Value” means the then-existing fair market value of all Policies, as measured using reasonable methods.

		5.1.3	
“Policies” means any and all of the rights of Borrower, Etel US, and Etel US’s subsidiaries to initial and renewal commissions for insurance policies sold or acquired.

 

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6.

	
REPAYMENT AND PREPAYMENT

	6.1	
Borrower may prepay all or part of the amount of the outstanding Loan at any time before it becomes due under this Agreement. At the same time as Borrower makes any prepayment, Borrower shall also pay all interest accrued in accordance with clause 4 in respect of the part of the Loan which is prepaid.

	6.2	
Borrower shall immediately repay the amount of the outstanding Loan and any interest accrued in accordance with clause 4, on the earlier of the following events:

		6.2.1	
The eight month anniversary of the Effective Date;

		6.2.2	
Borrower’s material breach of this Agreement or any other written agreement entered between Borrower and Lender;

		6.2.3	
the date that all or substantially all of the assets of the Borrower are sold to an unaffiliated third party;

		6.2.4	
the date the Borrower is acquired by (which includes an acquisition pursuant to a scheme of arrangement or an amalgamation) or merges with an unaffiliated company in a transaction in which the Borrower (as applicable) is not the surviving company;

		6.2.5	
the presentation of a petition for the Borrower’s bankruptcy;

		6.2.6	
the making of any composition, compromise, assignment or arrangement with any creditor of Borrower;

		6.2.7	
the appointment of an interim receiver of the Borrower's property;

		6.2.8	
the appointment of any other receiver or manager of any of the Borrower or the Borrower's assets;

		6.2.9	
any procedure in any jurisdiction which is analogous to any of the procedures referred to in clauses 6.2.6 to 6.2.9 above; or

		6.2.10	
Borrower is unable or admits inability to pay its debts as they fall due or is deemed to or declared to be unable to pay its debts under applicable law.

	6.3	
No amount of the Loan repaid or prepaid may be redrawn.

	
7.

	
TAXATION

	7.1	
Borrower hereby indemnifies the Lender in respect of any applicable taxes in relation to Borrower’s receipt of any portion of the Loan, or payment or accrual of any interest thereunder.

 

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	8.	
SET OFF

Borrower shall not exercise any right of set-off or counterclaim Borrower might have in respect of any payment due to the Lender under this Agreement. The Lender may, at any time, set off any obligation owed by the Lender to Borrower (whether or not matured at such time) against any matured obligation owed by Borrower under this Agreement.

	9.	
RIGHTS AND REMEDIES

The rights and remedies provided in this Agreement are in addition to (and not instead of) rights or remedies under law. If the Lender fails to exercise any right or remedy under this Agreement or delays his exercise of any such right or remedy, this shall not mean that it waives such right or remedy. If the Lender exercises a right or remedy once or only in part, this does not prevent it exercising such right or remedy again.

	10.	
THIRD PARTIES

Any person who is not party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement. The parties do not require the consent of any such person before rescinding or varying this Agreement.

	11.	
TERMINATION

This Agreement shall continue until the Loan has been repaid in full. On the Borrower repaying the Loan in full, this Agreement shall terminate.

	12.	
MISCELLANEOUS

	12.1	
This Agreement may be executed in any number of counterparts, and by the parties on separate counterparts, each of which when so executed and delivered will be an original, but all the counterparts will together constitute one and the same agreement.

	12.2	
The formation, existence, construction, performance, validity and all aspects whatsoever of this Agreement or of any term of this Agreement shall be governed by English law. The English Courts shall have jurisdiction to settle any dispute which may arise out of or in connection with this Agreement.

	12.3	
Borrower shall not assign, novate or otherwise deal with any rights, interests or obligations under this Agreement, except with the Lender’s prior written consent.

	12.4	
The terms of this Agreement shall inure for the benefit of and be binding upon the respective successors and assigns of the parties hereto.

 

[Signature Page to Follow]

 

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THIS DOCUMENT is executed as a deed and delivered on the date stated at the beginning of this Agreement.

 

	
The Resource Group International, Ltd.

	 	 
	
/s/ Mohammed Khaishgi

	
 

	
(Signature)

	 
	
Mohammed Khaishgi, Director

	 
	 	 
	WITNESS:	 
	 	 
	/s/	 
	
(Signature)

	 
	 	 
	Etelequote Pie 
		 
	/s/ Anthony Solazzo	 
	(Signature)	 
	Anthony Solazzo, Director	 
	 	 
	 	 
	WITNESS:	 
	 	 
	/s/ 	 
	(Signature)	 

 

 

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