Exhibit 10.19
PROMISSORY NOTE
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$16,763,718.53
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New York, New York
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May 30, 2008
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I. Promise to Pay .
FOR VALUE RECEIVED, the undersigned, hereby unconditionally
promises to pay to the order of CITICORP USA, INC., a Delaware
corporation (the “Lender”), at its office or branch at
Citicorp Center, 666 Fifth Avenue, New York, New York 10103 or at
such other office as the Lender may subsequently designate in
writing, the principal sum of SIXTEEN MILLION SEVEN HUNDRED
SIXTY-THREE THOUSAND SEVEN HUNDRED EIGHTEEN AND 53/100 DOLLARS
($16,763,718.53), or such other amount necessary to repay in full
the then unpaid principal amount of this Note, which shall be
payable on May 31, 2011 (the “Maturity Date”). The
undersigned also agrees to pay interest on any and all unpaid
amounts from and including the date hereof to the Business Day (a
day of the year on which national banks in New York City are not
required or permitted to be closed and on which dealings in United
States Dollars are carried on in the London interbank market) on
which any principal amount becomes due at the interest rate per
annum determined in accordance with the terms below, but in no
event in excess of the maximum rate permitted by applicable law.
The undersigned further agrees to pay interest on any advance and
all other obligations of the undersigned hereunder that are not
paid when due (whether at stated maturity, by acceleration or
otherwise) from the date payment of such advance or other
obligations is due until such advance or other obligations are paid
in full, payable upon demand at the Base Rate (as defined below),
plus 3% (the “Overdue Rate”), but in no event in excess
of the maximum rate permitted by applicable law. The proceeds of
the loan made pursuant to this Note (the “Loan”) shall
be used by the undersigned for lawful purposes and, in any event,
no such proceeds shall be used to finance gambling enterprises, to
purchase military arms or to finance or make contributions to
political candidates or organizations.
II. Interest Rate .
The undersigned promises to pay interest on the outstanding
principal amount hereunder monthly on the last Business Day of each
month (in arrears) at an interest rate (the “Applicable
Interest Rate”) (a) prior to the Fixed Rate Conversion
Effective Date (defined below), (i) if the undersigned has
elected a rate of interest determined by reference to the LIBOR
Rate (as defined below) to apply to the Loan (or portion thereof),
equal, at all times during each Interest Period (as described
below) therefor, to one and six-tenths percent (1.6%) per
annum above the LIBOR Rate for such Interest Period or (ii) if
the undersigned has elected a rate of interest determined by
reference to the Base Rate (as defined below) to apply to the Loan
(or portion thereof), equal at all times to the Base Rate,
(b) from and including the Fixed Rate Conversion Effective
Date, if a Fixed Rate Conversion occurs, to but excluding the
Maturity Date, the Fixed Rate, or (c) as otherwise determined
in accordance with paragraph III below.
A. Interest Periods . The
duration of each interest period (each an “Interest
Period”) applicable to any LIBOR shall be one month, two
months, three months, six months or twelve months, as the
undersigned may select upon written notice received by the Lender
not later than 12:00 noon (New York City time) three
(3) Business Days prior to (a) the first day of the
initial Interest Period (which shall be a Business Day) or
(b) the last day of the preceding Interest Period. Each
selection by the undersigned in accordance with this Note of an
Interest
Period relating to all or any
portion of the Note to accrue interest based on the LIBOR Rate,
shall be herein referred to as a “LIBOR Contract”. No
Interest Period may be selected that would end after the Maturity
Date. The initial Interest Period shall commence on the date hereof
and shall end on the same numerical day on which the Interest
Period commenced one, two, three, six or twelve months later,
depending upon the Interest Period the undersigned has selected.
The next Interest Period shall commence on the last day of the
immediately preceding period and, again depending upon the Interest
Period selected, shall end on the corresponding date of the month
one month, two months, three months, six months or twelve months
later. If, however, the corresponding date in the calendar month in
which the Interest Period ends is not a Business Day, then the last
day of the Interest Period shall be extended to the next succeeding
Business Day, unless there is no such Business Day in that calendar
month, in which case the last day of such Interest Period shall be
the last Business Day of such calendar month. Further, if there is
no corresponding date in the calendar month in which the Interest
Period ends, then the last day of the Interest Period shall be the
last Business Day of such calendar month. If the undersigned shall
fail to select, at least three (3) Business Days before the
expiration of any Interest Period, the duration of the next
subsequent Interest Period, the undersigned will be deemed to have
selected an Interest Period that is the same as the then prevailing
Interest Period (to the extent such Interest Period otherwise
complies with the remaining provisions regarding the duration of
Interest Periods). If an Interest Period is unavailable as provided
herein the Loan (or portion thereof) shall accrue interest at the
Base Rate at the end of the then applicable Interest Rate Period.
The undersigned agrees that (i) no LIBOR Contract shall be for
an amount less than $1,000,000.00 and (ii) there shall be no
more than three (3) LIBOR Contracts outstanding at any time
during the term of this Note.
B. LIBOR Rate . “LIBOR
Rate” means, for any Interest Period, an interest rate per
annum equal to the rate of interest per annum at which deposits in
United States dollars are offered on Reuters Screen LIBOR 01 (or
such replacement page or service as may be appropriate), to prime
banks in the London interbank market at 11:00 a.m. (London time)
two (2) Business Days before the first day of the Interest
Period in an amount substantially equal to the outstanding
principal balance hereunder (or for the portion thereof that
Borrower has elected to be subject to a LIBOR Contract) and for a
period equal to such Interest Period. All computations of interest
shall be made by the Lender on the basis of a year of 360 days for
the actual number of days (including the first day, but excluding
the last day) in the Interest Period for which such interest is
payable; provided, however, that if such computation shall cause
the amount of interest payable hereunder to exceed the maximum rate
of interest permitted by applicable law, all computations of
interest shall be made upon the basis of a year of 365 or 366
days.
C. Base Rate . “Base
Rate” means a fluctuating interest rate per annum equal at
all times to the interest rate announced publicly from time to time
by Citibank, N.A. in New York City as its base rate. All
computations of interest with respect to a Base Rate shall be made
by the Lender on the basis of a year of 360 days for the actual
number of days elapsed; provided, however, that if such computation
shall cause the amount of interest payable hereunder to exceed the
maximum rate of interest permitted by applicable law, all
computations of interest shall be made upon the basis of a year of
365 or 366 days.
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D. Fixed Rate Conversion
Option .
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(a)
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Provided no
Event of Default shall have occurred, the undersigned shall have a
one time option, subject to the terms and conditions of this Note,
to have the interest rate payable on this Note converted from the
then existing Applicable Interest Rate to the Fixed Rate (the
“Conversion Option”). If the interest rate on this Note
is converted to the Fixed Rate, the interest rate on this Note
shall remain at the Fixed Rate (except as provided in paragraph III
below) until the Maturity Date and may not thereafter be
reconverted to LIBOR Rate and/or Base Rate.
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(b)
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If the
undersigned elects to exercise the Conversion Option (a
“Fixed Rate Conversion”), (i) the undersigned
shall provide written notice (in accordance with paragraph XV
below) of its election to Lender (with the date of Lender’s
receipt of such written notice being the “Conversion Exercise
Date”), and (ii) such election shall be irrevocable, and
(iii) the interest rate payable on this Note shall be
converted from the then existing Applicable Interest Rate to the
Fixed Rate on the date which is two (2) Business Days after
the Conversion Exercise Date (the “Fixed Rate Conversion
Effective Date”). To the extent that all or any portion of
the Loan was accruing interest at the LIBOR Rate prior to the Fixed
Rate Conversion Effective Date, the undersigned shall be
responsible to pay all Breakage Fees incurred to effectuate the
Fixed Rate Conversion.
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(c)
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The term
“Fixed Rate” shall mean the rate per annum determined
by Lender to be its then current prevailing fixed rate of interest
on comparable loans for which a borrower has paid no fee.
Determination of the Fixed Rate by Lender shall be conclusive in
all respects. Lender shall quote an indicative Fixed Rate based
upon receipt of a written request from the undersigned prior to the
undersigned’s exercise of the Conversion Option. The
undersigned acknowledges that the indicative Fixed Rate quoted by
Lender shall be based upon market conditions at the time of the
undersigned’s exercise of the Conversion Option and is
subject to change in the time period between the
undersigned’s request for a Fixed Rate quote and the exercise
of the Conversion Option.
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E. Maximum Legal Rate .
Notwithstanding anything to the contrary contained in this Note or
in any other document executed in connection herewith, the total
liability for payments in the nature of interest, additional
interest and other charges shall not exceed the limits imposed by
applicable law. If any payments in the nature of interest,
additional interest and other charges made under this Note or any
other document executed in connection herewith are held to be in
excess of the limits imposed by applicable law, it is agreed that
any such amount held to be in excess shall be considered payment of
principal hereunder and the indebtedness evidenced hereby shall be
reduced by such amount so that the total liability for payments in
the nature of interest, additional interest and other charges shall
not exceed the limits imposed by the applicable law.
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F. Determination Conclusive .
Each determination of the Applicable Interest Rate hereunder shall
be conclusive and binding for all purposes, absent manifest
error.
III. Payments . All
payments of principal, interest and other amounts due under this
Note shall be made to the Lender at its office or branch referred
to above in lawful money of the United States not later than 12:00
noon (New York City time) on the day when due. Unless the
undersigned and Lender shall have agreed otherwise, the undersigned
hereby authorizes Lender to deduct automatically from 57 AVIATION
SERVICES, LLC’s account number 48900753 maintained with The
Citigroup Private Bank the amount of principal and accrued and
unpaid interest then due under this Note on the last Business Day
of each month (unless otherwise demanded), and the undersigned
agrees to maintain on the last Business Day of each month
sufficient available and cleared funds in such account to cover
such principal and interest payments. All payments of principal,
interest and other amounts payable hereunder shall be made without
defense, claim, counterclaim, setoff or recoupment.
A. Prepayments, Payments Before
End of Interest Period . The undersigned shall have the right
to prepay this Note without premium or penalty, in whole or in part
(provided, however, if prepaid in part the amount of the partial
prepayment shall be in an amount not less than $100,000.00)
(i) in the case of the Loan (or portion thereof) which accrues
interest at the Base Rate, upon one (1) Business Day’s
notice to the Lender, (ii) in the case of the Loan (or portion
thereof) which accrues interest at the LIBOR Rate, on, and only on,
the last day of an Interest Period, with, in each case, accrued
interest to the date of such prepayment on the amount prepaid, and
(iii) to the extent that the Loan is accruing interest at the
Fixed Rate, upon not less than five (5) Business Day’s
prior written notice (the “Fixed Rate Prepayment
Notice”) to Lender specifying the date on which prepayment is
to be made (the “Fixed Rate Prepayment Date”) and the
principal amount of any such prepayment (the “Fixed Rate
Prepayment Amount”). Amounts repaid or prepaid may NOT
be reborrowed under this Note.
If the undersigned repays or prepays
this Note (or part thereof) which is then accruing interest at the
LIBOR Rate on a day other than the last day of an Interest Period,
then, in addition to the interest otherwise due and payable
(including any interest accrued at the Overdue Rate), the
undersigned shall pay to the Lender an amount equal to the positive
difference, if any, between (i) the amount of interest that
would accrue on such amount prepaid or repaid for the remainder of
such Interest Period at the LIBOR Rate set for such Interest Period
(such amount, the “LIBOR Breakage Fee”), and
(ii) the amount of interest that would accrue on such amount
prepaid or repaid for the remainder of such Interest Period at the
Market Rate (as defined below). The term “Market Rate”
means the rate of interest per annum at which deposits in United
States dollars are offered on Reuters Screen LIBOR 01 (or such
replacement page or service as may be appropriate), to prime banks
in the London interbank market at 11:00 a.m. (London time) two
(2) Business Days before the date of payment of the principal
amount prepaid in an amount substantially equal to the amount of
such prepayment and for a deposit period comparable to the
remaining Interest Period, as determined by the Lender in its sole
discretion.
If the undersigned repays or prepays
this Note which is then accruing interest at the Fixed Rate, the
undersigned shall pay (a) the Fixed Rate Prepayment Amount,
(b) interest accrued and unpaid on the Fixed Rate Prepayment
Amount through and including the Fixed Rate Prepayment Date,
(c) all other unpaid indebtedness evidenced hereby and
(d) a premium (the “Fixed Rate
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Prepayment Premium”) as liquidated damages
and not as a penalty, equal to the present value of the
(x) the amount of interest that would have accrued on the
Fixed Rate Prepayment Amount for the remainder of the term of this
Note, at the Fixed Rate minus (y) the amount of interest that
would have accrued on the Fixed Rate Prepayment Amount during the
remainder of the term of this Note, at the Current Market Rate (as
hereinafter defined) plus 1.6%. For the purposes hereof,
“Current Market Rate” shall mean the Market Rate as
determined for a period equal to the remaining term of the Note and
if no Reuters Screen Rate 01 is available for such period, then the
Treasury Rate (as hereinafter defined) shall be used for such
period). The term “Treasury Rate” shall mean, as of the
applicable Fixed Rate Prepayment Date, the yield to maturity as of
such Fixed Rate Prepayment Date of United States Treasury
securities with a constant maturity (as complied and published in
the most recent Federal Reserve Statistical Release H.I5
(519) that has become publicly available at least two
(2) Business Days prior to such Fixed Rate Prepayment Date
(or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most equal to
the period from such Fixed Rate Prepayment Date to the remainder of
the term of this Note. For the purposes hereof, “present
value” calculation shall use the Current Market Rate plus
.50% as the discount rate and shall be calculated as if each
installment of the principal balance had been made during the
remaining term of this Note.
If any Fixed Rate Prepayment Notice
is given, the entire Fixed Rate Prepayment Amount specified therein
(together with the applicable Fixed Rate Prepayment Premium, if
any) shall be due and payable on the Fixed Rate Prepayment Date set
forth therein. Any partial prepayment made hereunder shall be
applied against the principal balance in inverse order of maturity
(i.e., so as to reduce the final payments of principal due and
owing hereunder and not result in any reduction in or deferment of
the monthly payments of principal due and owing
hereunder).
Payment of the entire outstanding
principal balance following an acceleration of the same shall be
deemed to be a voluntary prepayment to which the LIBOR Breakage
and/or the Fixed Rate Prepayment Premium, as the case may be, shall
be applicable.
B. Increased Costs . If,
after the date of this Note, any change in applicable law or
regulation or in the interpretation or administration thereof by
any governmental authority charged with the interpretation or
administration thereof (whether or not having the force of law),
and which change is applicable generally to other financial
institutions, shall change the basis of taxation of payments to the
Lender of the principal of or interest on the advances made by the
Lender hereunder or any fees or other amounts payable hereunder
(other than changes in respect of taxes imposed on the overall net
income of the Lender), or shall impose, modify or deem applicable
any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of or credit extended by the
Lender or shall impose on the Lender any other condition affecting
this Note or the advances hereunder, and the result of any of the
foregoing shall be to increase the cost to the Lender of making or
maintaining the advances hereunder or to reduce the amount of any
sum received or receivable by the Lender hereunder (whether of
principal, interest or otherwise), then the undersigned shall, upon
written notice by the Lender, pay to the Lender such additional
amount or amounts determined by the Lender in a reasonable manner
as will compensate the Lender for such additional costs incurred or
reduction suffered. In the event that the undersigned is required
to make any additional payments to Lender pursuant to the terms of
this paragraph then undersigned shall have the option to prepay
this Note in accordance with the terms of paragraph IIIA hereof,
provided that no prepayment fee LIBOR Breakage Fee or Fixed Rate
Prepayment Premium shall be due in connection therewith.
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C. Illegality . If the Lender
shall notify the undersigned that the introduction of or any change
in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority
asserts that it is unlawful, for the Lender to perform its
obligations hereunder to make or maintain the Loan hereunder (or
any portion thereof) as a loan that bears interest at a rate based
on the LIBOR Rate, the undersigned shall forthwith prepay in full
the outstanding principal balance of the portion of the Loan
accruing interest at the LIBOR Rate, together with interest accrued
thereon, unless the undersigned, within five Business Days of
written notice to that effect from the Lender, elects to convert
the per annum rate of interest accruing on the outstanding
principal amount of the Loan based upon the LIBOR Rate to the Base
Rate or the Fixed Rate. In addition, if the Lender notifies the
undersigned that by reason of circumstances affecting the London
interbank market for United States Dollar deposits there does not
exist adequate and reasonable means for ascertaining the LIBOR Rate
for any Interest Period, then, on the last day of the then existing
Interest Period, the interest rate on the outstanding principal
amount of that portion of the Note then accruing interest at the
LIBOR Rate shall automatically convert to the Base Rate (which the
undersigned shall be deemed to have accepted) until the Lender
shall notify the undersigned that the circumstances causing such
suspension no longer exist, or in the alternative undersigned may
elect to prepay this Note in accordance with the terms of paragraph
IIIA hereof, provided no prepayment fee shall be due in connection
therewith.
IV. Taxes .
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(a)
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Any and all
payments by the undersigned under this Note shall be made free and
clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto excluding any income or
franchise taxes imposed on the net income of the Lender (all such
non-excluded taxes, levies imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as
“Taxes”).
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(b)
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In addition,
the undersigned shall pay any present or future stamp, documentary,
excise, property or similar taxes, charges or levies that arise
from any payment made under this Note or from the execution,
delivery or registration of, or otherwise with respect to, this
Note (all such taxes, charges and levies being hereinafter referred
to as “Other Taxes”).
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(c)
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The undersigned
shall indemnify the Lender for the full amount of Taxes and Other
Taxes, and for the full amount of taxes imposed by any jurisdiction
on amounts payable under this paragraph IV, paid by the Lender and
any liability (including, without limitation, penalties, additions
to tax, interest and expenses) arising therefrom or with respect
thereto. This indemnification payment shall be made within thirty
days from the date the Lender makes written demand
therefor.
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(d)
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In the case of
each Lender that becomes a Lender by assignment or participation
pursuant to the provisions of Section XII hereof, such Lender
shall, upon the date of acceptance of its assignment or
participation, provide appropriate forms or other evidence
reasonably acceptable to the undersigned certifying that such
Lender is not currently subject to any Taxes, Other Taxes or
Increased Costs pursuant to Section III B, above. To the extent
that such Lender provides evidence that it is currently subject to
any amount of Taxes, Other Taxes, or Increased Costs, the amount of
such Taxes, Other Taxes or Increased Costs shall be excluded from
any indemnity pursuant to Sections III and IV hereof.
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(e)
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If any Lender
requests compensation under Sections III and IV hereof or if the
undersigned is required to pay any additional amount for the
account of any Lender pursuant to Section IV hereof, the
undersigned shall have the right upon notice to such Lender, to
(i) require such Lender to assign to one or more assignees
specified by the undersigned who are willing to so purchase from
such Lender all, or any portion thereof, of such Lender’s
rights and obligations under this Note provided that such assignee
or assignees shall pay to such Lender, in consideration for such
assignment, an amount equal to all
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