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PROMISSORY NOTE

Promissory Note

PROMISSORY NOTE | Document Parties: OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC | 57 AVIATION SERVICES, LLC | CITICORP USA, INC You are currently viewing:
This Promissory Note involves

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC | 57 AVIATION SERVICES, LLC | CITICORP USA, INC

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Title: PROMISSORY NOTE
Governing Law: New York     Date: 3/12/2009
Industry: Investment Services     Sector: Financial

PROMISSORY NOTE, Parties: och-ziff capital management group llc , 57 aviation services  llc , citicorp usa  inc
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Exhibit 10.19

PROMISSORY NOTE

 

$16,763,718.53

  

New York, New York

  

May 30, 2008

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 .

 

 

(a)

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.

 

 

(b)

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.

 

 

(c)

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.

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 .

 

 

(a)

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”).

 

 

(b)

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”).

 

 

(c)

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)

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.

 

 

(e)

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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