Exhibit 10
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PROMISSORY NOTE AGREEMENT
$300,000 (Initial Amount) April 2, 2008
FOR VALUE RECEIVED, the undersigned, STC Investment Holdings LLC, a
Delaware limited liability company (the "BORROWER"), hereby unconditionally
promises to pay to Stone Tower Operating LP, a Delaware limited partnership (the
"HOLDER"), in lawful money of the United States of America, the sum of (i) a
principal sum of three hundred thousand dollars ($300,000) (the "INITIAL
ADVANCE"), plus the principal amount of any Additional Advances (as defined
below), in each case, on April 1, 2010 (the "MATURITY DATE"), and to pay
interest on the unpaid Principal Amount of this Note as set forth in Section 2
below from the date hereof until such principal amount is paid in full.
1. CERTAIN DEFINED TERMS. As used in this Note, the following terms
shall have the following meanings:
"ADDITIONAL ADVANCE" means any additional advance made by the Holder to
the Borrower hereunder, in the sole and absolute discretion of the Holder;
PROVIDED that the principal sum of the Initial Advance and all Additional
Advances (collectively, the "PRINCIPAL AMOUNT" of this Note) shall not
exceed six million dollars ($6,000,000). The Initial Advance and all
Additional Advances shall be set forth by the Holder on Annex A hereto, as
the same shall be updated from time to time by the Holder to reflect the
making of Additional Advances and the prepayments of principal amounts
hereunder in accordance with Section 3 hereof. The amounts reflected on
Annex A hereto shall be binding upon the parties hereto and conclusive
evidence of the unpaid principal amount of this Note outstanding from time
to time, absent manifest error.
"COMPANY" means STC Investment Holdings LLC, a Delaware limited liability
company.
"COMPANY AGREEMENT" means the First Amended and Restated Limited Liability
Company Agreement of STC Investment Holdings LLC, dated as of March 4,
2008 (as the same may be amended, supplemented or otherwise modified from
time to time).
"PRIME RATE" means the prime rate as published in the "Money Rates" table
in THE WALL STREET JOURNAL. If more than one rate is published, the
highest rate prevails.
"LIEN" means with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
Property.
"NET CASH PROCEEDS" means proceeds, if any, in the form of cash received
by the Borrower from (a) any sale by the Borrower to an unaffiliated third
party of the Borrower's interest in the Company or (b) a distribution from
the Company to the Borrower of proceeds resulting from any sale of asset,
in each case net of (i) the costs related to such sale and (ii) taxes paid
or reasonably estimated to be payable as a result of such sale.
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"NOTE" Means this Note Agreement.
"PROPERTY" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or
intangible.
2. INTEREST. The Borrower hereby unconditionally promises to pay to
Holder interest (computed on the basis of a 360 day year, for the actual number
of days elapsed in the period for which interest is being computed) on the
unpaid Principal Amount of this Note from the date hereof to and including the
date of repayment at a rate per annum equal to the Prime Rate plus 1.0%.
Notwithstanding the foregoing, the Borrower hereby unconditionally promises to
pay to the Holder interest on any principal or interest payable by the Borrower
under this Note that shall not be paid in full when due (whether at stated
maturity or upon optional or mandatory prepayment or otherwise), for the period
from and including the due date of such payment to but excluding the date the
same is paid in full, at a rate per annum equal to the Prime Rate plus 2.0% (the
"POST-DEFAULT RATE"). All accrued interest shall be due and payable (a) on the
first Business Day of each month, commencing on the first such day following the
date hereof, (b) to the extent not previously paid in full, on the Maturity
Date, (c) upon the payment or prepayment of any principal owing under this Note
(but only on the Principal Amount so paid or prepaid), and (d) in the case of
interest payable at the Post-Default Rate, from time to time on demand of the
Holder. At the election of the Borrower, the Borrower may pay accrued interest
on each interest payment date either in (i) cash or (ii) through the addition of
such accrued interest (a "PIK INTEREST AMOUNT") to the Principal Amount of this
Note. For all purposes of this Note, all PIK interest amounts shall be treated
as principal hereunder and all references to the Principal Amount shall include
all PIK interest amounts.
3. PREPAYMENT.
(a) PREPAYMENT AT THE OPTION OF THE BORROWER. The Borrower may
prepay the Principal Amount of this Note without premium or penalty at any time
or from time to time. Each such prepayment of principal shall be accompanied by
the payment of all accrued and unpaid interest on the Principal Amount so
prepaid to the date of prepayment. The Holder shall reflect any such repayment
on Annex A hereto.
(b) MANDATORY PREPAYMENT. To the fullest extent permitted by
applicable law, upon receipt by the Borrower of Net Cash Proceeds, the Borrower
shall promptly thereafter apply such Net Cash Proceeds to repay all obligations
of the Borrower to the Holder under this Note.
4. RECORDATION OF AMOUNTS OWING. The Holder shall maintain records of
the amounts owing under this Note, and such records shall, absent manifest
error, be conclusive evidence of such amounts. Prior to any sale, assignment or
transfer of this Note, each payment of principal theretofore made under this
Note shall be endorsed by the Holder on Annex A hereto (or any continuation of
said Annex).
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5. MANNER OF PAYMENT. All payments of principal and interest to be made
by the Borrower under this Note shall be made in U.S. Dollars, in immediately
available funds, by wire transfer to an account identified in a notice to the
Borrower not later than three Business Days prior to the date of such payment,
not later than 4:00 p.m. New York time on the date on which such payment shall
become due (each such payment made after such time on such due date to be deemed
to have been made on the next succeeding Business Day). All amounts payable
under this Note shall be paid free and clear of and without deduction by reason
of any set-off, counterclaim, deduction or withholding whatsoever (including,
without limitation, any deduction or withholding in respect of taxes). The
Borrower shall, at the time of making each payment under this Note, specify to
the Holder the amounts payable by the Holder under this Note to which such
payment is to be applied, in which case such payment shall be so applied (and in
the event that the Borrower fails to so specify, or if an Event of Default has
occurred and is continuing, such payment shall be applied in such manner as is
determined to be appropriate by the Holder). As used in this Note, "Business
Day" means any day except a Saturday, Sunday or other day on which commercial
banks in New York City are authorized by law to close.
6. PAYMENTS ON BUSINESS DAYS. If the due date of any payment under this
Note would otherwise fall on a day that is not a Business Day, such due date
shall be extended to the next succeeding Business Day, and interest shall be
payable on any principal so extended for the period of such extension.
7. RIGHT OF SETOFF. The Borrower agrees that, in addition to (and
without limitation of) any right of setoff the Holder may otherwise have, the
Holder shall be entitled at its option, to offset amounts owing by the Borrower
to the Holder, in Dollars or in any other currency (regardless of whether such
amounts are then due to the Borrower), against any amount payable by the
Borrower to the Holder under this Note that is not paid when due; provided that
nothing contained herein shall require the Holder to exercise any such right.
8. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Holder as follows:
(a) ORGANIZATION. The Borrower is a limited liability company duly
organized and validly existing under the law of the State of Delaware and has
all requisite limited liability power necessary to own its assets and carry on
its business as now being or as proposed to be conducted.
(b) NO BREACH. None of the execution or delivery of this Note, the
making of the extension(s) of credit evidenced hereby, the consummation of the
transactions herein contemplated and compliance with the terms and provisions
hereof will conflict with or result in a breach of, or require any consent
under, the certificate of formation of the Borrower or the limited liability
agreement (or any equivalent documents) of the Borrower, or any applicable law
or regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument to which the
Borrower is a party or by which the Borrower is bound or to which the Borrower
is subject, or constitute a default under, or result in the creation of any Lien
under, any such agreement or instrument.
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(c) ACTION; EXECUTION AND DELIVERY; ENFORCEABILITY. The Borrower
has all necessary limited liability company power and authority to execute,
deliver and perform its obligations under this Note; the execution, delivery and
performance by the Borrower of this Note have been duly authorized by all
necessary limited liability company action on its part; and this Note has been
duly and validly executed and delivered by the Borrower and constitutes its
legal, valid and binding obligation, enforceable against the Borrower in
accordance with its terms.
(d) APPROVALS. No authorizations, approvals or consents of, and no
filings or registrations with, any governmental or regulatory authority or
agency are necessary for the execution, delivery or performance by the Borrower
of this Note or for the validity or enforceability hereof. This Note is the
legal, valid, and binding obligation of the Borrower, enforceable in accordance
with the terms hereof, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, moratorium, or other similar laws affecting
the enforcement of creditors' rights generally.
9. COVENANTS. The Borrower covenants and agrees with the Holder that,
until the payment in full of all amounts payable by the Borrower hereunder:
(a) NOTICE OF DEFAULT. Promptly after the Borrower knows or has
reason to believe that any Event of Default has occurred, the Borrower shall
deliver to the Holder a notice thereof describing the same in reasonable detail
and, together with such notice or as soon thereafter as possible, a description
of the action that the Borrower has taken or proposes to take with respect
thereto.
(b) CONDUCT OF BUSINESS. The Borrower shall (i) preserve and
maintain its legal existence and all of its material rights and privileges; (ii)
pay and discharge all taxes, assessments and governmental charges or levies
imposed on it or on its income or profits or on any of its Property prior to the
date on which penalties attach thereto, except for any such tax, assessment,
charge or levy the payment of which is being contested in good faith and by
proper proceedings and against which adequate reserves are being maintained; and
(iii) keep adequate records and books of account, in which complete entries will
be made in accordance with generally accepted accounting principles consistently
applied.
10. EVENTS OF DEFAULT; REMEDIES.
(a) EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an "EVENT OF DEFAULT" under this Note:
(i) the Borrower shall fail to pay any payment of principal
or interest payable under this Note within 5 business days of such payment
becoming due;
(ii) any representation, warranty or certification made
herein or pursuant hereto by the Borrower proves to have been false or
misleading as of the time made in any material respect;
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(iii) the Borrower defaults in any material respect in the
performance of any of its obligations under this Note and such default (if
remediable) continues unremedied for a period of 10 days after notice thereof to
the Borrower by the Holder; or
(iv) (A) the Borrower shall admit in writing its inability to
pay its debts generally or shall make a general assignment for the benefit of
creditors, (B) any proceeding shall be instituted by or against the Borrower
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts, under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a custodian, receiver, trustee or other similar
official for it or for any substantial part of its property and, in the case of
any such proceedings instituted against the Borrower (but not instituted by the
Borrower) either such proceedings shall remain un-dismissed or un-stayed for a
period of 60 days or more or any action sought in such proceedings shall occur,
or (C) the Borrower authorizes the liquidation, dissolution or winding-up of the
Borrower.
(b) ACCELERATION; REMEDIES. If an Event of Default (other than an
Event of Default specified in clause (iv) above) occurs and is continuing, then
the Holder, by written notice to the Borrower, may declare all unpaid principal
of, and accrued interest on, this Note to be due and payable (in which event
such principal and accrued interest shall be immediately due and payable). If an
Event of Default specified in clause (iv) above occurs, all unpaid principal of,
and accrued interest on, this Note shall ipso facto become and be immediately
due and payable.
The Borrower agrees to pay or reimburse the Holder for paying all costs and
expenses of the Holder (including, without limitation, reasonable counsels'
fees) in connection with any enforcement or collection proceedings resulting
from an Event of Default under this Note (including, without limitation,
enforcement of this paragraph).
11. NO WAIVER BY THE HOLDER. No delay, failure or discontinuance by or
of the Holder in exercising any right, power or remedy under this Note shall
affect or operate as a waiver of such right, power or remedy, and no single or
partial exercise by the Holder of any right, power, or remedy will be presumed
to preclude any subsequent or further exercise by the Holder, of that right,
power or remedy. The rights, powers, and remedies and privileges of the Holder
provided in this Note are cumulative and not exclusive of any rights, powers,
remedies and privileges provided by law.
12. WAIVER BY THE BORROWER. Except as otherwise expressly provided
herein, the Borrower hereby waives presentment and demand in connection with the
enforcement of this Note.
13. REPLACEMENT OF NOTE. Upon receipt of evidence reasonably
satisfactory to the Borrower of the loss, theft, destruction or mutilation of
this Note and, in the case of any loss, theft or destruction, upon delivery of
an appropriate indemnification agreement from the Holder or, in the case of any
such mutilation, upon surrender and cancellation of such Note, the Borrower will
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execute and deliver, in lieu thereof, a new Note of like tenor, dated the date
to which interest on such lost, stolen, destroyed or mutilated Note has been
paid.
14. GOVERNING LAW; CONSENT TO JURISDICTION. THIS NOTE SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO ITS CONFLICT OF LAWS PRINCIPLES.
15. WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE HOLDER, BY ITS
ACCEPTANCE OF THE BENEFITS OF THIS NOTE, HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
16. MISCELLANEOUS.
(a) NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be transmitted by messenger,
reputable delivery service, certified mail or facsimile, if (i) to the Borrower,
to it at 000 Xxxx 00xx Xxxxxx - 33rd Floor, Xxx Xxxx, XX 00000 XXX, and (ii) if
to the Holder, to it at 000 Xxxx 00xx Xxxxxx - 35th Floor, New York, NY 10019
USA, or to such other address for a party as such party shall designate in a
written notice to the other party given in accordance with this Section. All
notices and other communications shall be effective (A) if sent by messenger or
reputable delivery service, when delivered and (B) if sent certified mail from
and to locations within the United States of America, 5 days after having been
sent by such mail, with return receipt requested.
(b) SUCCESSORS AND ASSIGNS. This Note shall be binding upon the
parties hereto and their respective successors and permitted assigns. The rights
and benefits of the parties under this Note shall inure to the benefit of their
respective successors and permitted assigns. The Borrower shall not assign or
delegate any of its rights or obligations under this Note without the prior
written consent of the Holder, and any purported assignment without such consent
shall be void and of no effect. The Holder may at any time and from time to
time, without consent of the Borrower, assign all of its rights under this Note
to any one person, and, upon the Holder giving notice of such assignment to the
Borrower specifying the interest being assigned, each reference herein to the
Holder shall (solely in respect of the interest so assigned) constitute a
reference to such assignee (as if such assignee were named herein) rather than
the Holder.
(c) AMENDMENT. This Note may not be amended unless such amendment
is in writing and signed by the Holder and the Borrower. Any waiver or consent
by the Holder or the Borrower under this Note must be in writing signed by the
party against which such waiver is to be enforced or that grants such consent
and shall be effective only in the instance and to the extent set forth in such
writing.
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(d) FURTHER ASSURANCES. The Borrower agrees that from time to time
it will promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary, or that the Holder may
reasonably request, in order to perfect and protect any assignment, pledge and
security interest granted or purported to be granted hereby or to enable the
Holder to exercise and enforce the rights and remedies provided hereunder.
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IN WITNESS WHEREOF, the undersigned Borrower has executed and delivered this
Note to the Holder on the date and year first above written.
STC INVESTMENT HOLDINGS LLC
By:
--------------------------------
Name:
Title:
Accepted and Agreed:
STONE TOWER OPERATING LP
By: Stone Tower Capital LLC, its General Partner
By:
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Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
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