EXHIBIT 10
PROMISSORY NOTE
$1,300,000.00 June 3, 2005
FOR VALUE RECEIVED, the undersigned, OAK FINANCE INVESTMENTS
LIMITED, a British Virgin Islands company, having its principal place of
business at c/o ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Trust Company BVI Ltd., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ Building, 2nd Floor, ▇▇▇▇▇▇▇'▇ ▇▇▇, Road Town, Tortola, BVI
("Borrower"), promises to pay to the order of ▇▇▇▇▇▇▇ CONSULTANTS, INC. MONEY
PURCHASE PLAN, with an address at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("Lender"), the principal sum of ONE MILLION THREE HUNDRED THOUSAND DOLLARS
($1,300,000.00) (the "Principal Amount") advanced (the "Advance") by Lender to
Borrower on the date hereof pursuant to the Line of Credit Agreement (as defined
below), together with interest on the unpaid Principal Amount thereof computed
from the date hereof, at the rates provided herein until the Final Maturity
Date, unless accelerated sooner (the "Maturity Date"); provided, however, that
from and after (i) the Maturity Date, whether upon stated maturity, acceleration
or otherwise, or (ii) the date on which the interest rate hereunder is increased
to the Default Rate (as hereinafter defined) as provided herein, such additional
interest shall be computed at the Default Rate.
Defined terms used herein but not defined herein shall have the
meaning ascribed to them in the Line of Credit Agreement entered into as of May
24, 2005 by and between Borrower, Lender and the other lenders party thereto,
and Stonegate Bank, as administrative agent and collateral agent (the "Line of
Credit Agreement").
Principal and interest hereunder shall be payable as follows:
(a) Interest on the entire principal amount of the Advance from and
including the date on which the Advance is made to but excluding the Final
Maturity Date at the rate of fifteen percent (15%) per annum (such rate being
referred to as the "Non-Default Interest Rate"). On the Escrow Closing Date,
interest on the entire principal amount of the Advance will be paid in advance
for the period from the Escrow Closing Date through and including August 31,
2005. After August 31, 2005, accrued interest on the Advance shall be payable by
Borrower (i) monthly in arrears, with the first payment due one month following
August 31, 2005 and continuing on the first Business Day of each succeeding
month, and (ii) on each date on which such Advance or any portion thereof shall
be paid (whether at stated maturity, by acceleration or otherwise); provided,
however, that if Borrower prepays interest on the entire principal amount of the
Advance through the period ending September 30, 2005 in accordance with clause
(ii) of the definition of "Final Maturity Date" in the Line of Credit Agreement,
accrued interest on the Advance shall be payable by Borrower monthly in arrears
after September 30, 2005 with the first payment due one month following
September 30, 2005.
(b) All principal, interest and other sums due hereunder, shall be
due and payable on the Maturity Date. Each payment of principal of an Advance
shall be accompanied by unpaid interest accrued on such principal to the date of
payment.
(c) This Note and the Advance may be prepaid at any time in whole or
in part, provided, however, that unless the Note and Advance are being prepaid
in whole, any such prepayment shall be in an amount that is an integral multiple
of $10,000 and not less than $100,000. Notwithstanding any such prepayment, in
whole or in part, of the principal amount of the Advance, interest (the "Minimum
Interest") shall accrue and shall be payable on the Principal Amount from and
including the Escrow Closing Date to but excluding the Final Maturity Date
(i.e., $2,512,500.00), in accordance with the foregoing paragraph (a), provided,
however, that Minimum Interest shall not accrue and be payable on or with
respect to any principal amounts of the Advance prepaid as required by Section
2(g) of the Line of Credit Agreement from and after the date of such prepayment;
provided, further, that if the entire principal amount of the Advance at the
time outstanding is prepaid before November __, 2005, the sixth month
anniversary of this Note, then the Minimum Interest will be deemed to have
accrued on the Principal Amount from the date of this Note through such
prepayment date in the aggregate amount of $1,675,000, and such Minimum
Interest, less the aggregate amount of interest previously paid hereunder, shall
be due and payable on the date of such prepayment. The Minimum Interest shall
constitute part of the Obligations.
Each payment shall be credited first to ▇▇▇▇▇▇'s collection expenses
provided for in any of the Loan Documents, next to late charges provided for in
any of the Loan Documents, next to unpaid interest (including, in the event of
prepayment in whole, the Minimum Interest), and the balance, if any, to the
reduction of principal. The interest on this Note shall be calculated on the
basis of a 30-day month and a 360-day year. Except as otherwise provided in the
Loan Documents, if the due date of any payment to be made hereunder 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 for
any principal so extended for the period of such extension.
As used herein, the term "Default Rate" shall mean a rate per annum
equal to 36%, but in no event shall the Default Rate be in excess of the Maximum
Rate (as hereinafter defined).
If any payment of interest is not paid on or before the due date for
such payment (after giving effect to any grace or notice period), a late charge
equal to the lesser of ten percent (10%) of such overdue payment or the maximum
amount permitted by applicable law shall automatically become due to the holder
of this Note, subject, however, to the limitation that late charges may be
assessed only once on each overdue payment. Said late charges do not constitute
interest and shall constitute compensation to the holder of this Note for
collection and ▇▇▇▇▇▇'s administration costs incurred hereunder. In addition, if
any payment of principal or interest is not paid when due (after giving effect
to any grace or notice period provided in the Loan Documents), the holder of
this Note shall have the right, upon written notice to Borrower, to increase the
rate of interest per annum on the entire amount due and payable under this Note
and any other Loan Documents to the Default Rate and, upon said notice such rate
increase shall be effective retroactively as of the date the overdue payment was
due and shall remain in force and effect for so long as such default shall
continue. This paragraph shall not be construed as an agreement or privilege to
extend the due date of any payment, nor as a waiver of any other right or remedy
accruing to the holder of this Note by reason of any default.
It is understood and agreed that, except as may be provided in the
Line of Credit Agreement, Borrower shall not be entitled to a refund of the
interest (other than interest which has been prepaid but not yet earned), any
fees, points, charges and the like paid by Borrower to Lender in connection with
the Advance, or for fees and expenses incurred by Lender in making the Advance,
all of which payments shall be retained by ▇▇▇▇▇▇ from and after the date each
such payment is made hereunder.
2
Borrower and each surety, endorser and guarantor hereof hereby waive
all presentations for payment, notices of intention to accelerate maturity,
notices of acceleration of maturity, demand for payment, protest, notice of
protest and notice of dishonor, to the extent permitted by law, except for those
notices expressly provided for herein. ▇▇▇▇▇▇▇▇ further waives trial by jury. No
extension of time for payment of this Note or any installment hereof, no
alteration, amendment or waiver of any provision of this Note and no release or
substitution of any collateral securing Borrower's obligations hereunder shall
release, modify, amend, waive, extend, change, discharge, terminate or affect
the liability of Borrower under this Note.
Any forbearance by the holder of this Note in exercising any right
or remedy hereunder or under any other agreement or instrument in connection
with this line of credit or otherwise afforded by applicable law shall not be a
waiver or preclude the exercise of any right or remedy by the holder of this
Note. The acceptance by the holder of this Note of payment of any sum payable
hereunder after the due date of such payment shall not be a waiver of the right
of the holder of this Note to require prompt payment when due of all other sums
payable hereunder or to declare a default for failure to make prompt payment.
If this Note is placed in the hands of an attorney for collection,
Borrower shall pay all costs incurred and reasonable attorneys' fees for legal
services in the collection effort whether or not suit be brought.
At the election of the holder of this Note, all payments due
hereunder may be accelerated, and this Note shall become immediately due and
payable without notice or demand, upon the occurrence of an Event of Default
under any Loan Document, which default is not cured within any grace period
expressly provided therefor in such Loan Document; provided, however, that in
the case of the occurrence of an Event of Default referred to in Sections 10(j),
(k), (l) or (m) of the Line of Credit Agreement, all payments due hereunder
shall be automatically accelerated and this Note shall become immediately due
and payable without notice or demand and without any further action on the part
of Lender. In addition to the rights and remedies provided herein, the holder of
this Note may exercise any other right or remedy in any other document,
instrument or agreement evidencing, securing or otherwise relating to the
indebtedness evidenced hereby in accordance with the terms thereof, or under
applicable law, all of which rights and remedies shall be cumulative.
If this Note is transferred in any manner, the right, option or
other provisions herein shall apply with equal effect in favor of any subsequent
holder hereof.
3
Notwithstanding anything to the contrary contained herein, under no
circumstances shall the aggregate amount paid or agreed to be paid hereunder
exceed the highest lawful rate permitted under applicable usury law (the
"Maximum Rate") and the payment obligations of Borrower under this Note are
hereby limited accordingly. If under any circumstances, whether by reason of
advancement or acceleration of the maturity of the unpaid principal balance
hereof or otherwise, the aggregate amounts paid on this Note shall include
amounts which by law are deemed interest and which would exceed the Maximum
Rate, Borrower stipulates that payment and collection of such excess amounts
shall have been and will be deemed to have been the result of a mistake on the
part of both Borrower and the holder of this Note, and the party receiving such
excess payments shall promptly credit such excess (to the extent only of such
payments in excess of the Maximum Rate) against the unpaid principal balance
hereof and any portion of such excess payments not capable of being so credited
shall be refunded to Borrower.
This Note is secured by the Pledge Agreements each executed in
connection with this Note and the Line of Credit Agreement, and is entitled to
the benefits and security thereof and any other documents or agreements given to
Agent or Lender by Borrower, the Guarantors, or others as security for the
Advance made under the Facility. This Note is guaranteed by the Guaranties and
reference is made to the Guaranties for the respective rights of the parties
thereunder. ▇▇▇▇▇▇▇▇ hereby agrees to indemnify, defend and hold harmless Lender
from and against any and all claims, loss, cost, damage or expense (including,
without limitation, reasonable attorneys' fees) which may be incurred by ▇▇▇▇▇▇
as provided in the Line of Credit Agreement.
All payments of principal and interest hereunder are payable in
lawful money of the United States of America and shall be made by wire transfer
to Agent, for the account of Lender, at such bank or other financial institution
as Agent designates pursuant to wiring instructions to be provided to Borrower
at the Closing of the Advance or thereafter.
Borrower is hereby prohibited from exercising against Lender any
right or remedy which it might otherwise be entitled to exercise against any one
or more (but less than all) of the parties constituting Lender, including
without limitation any right of setoff or any defense.
This Note shall be binding on the parties hereto and their
respective heirs, legal representatives, executors, successors and assigns.
This Note shall be construed without any regard to any presumption
or rule requiring construction against the party causing such instrument or any
portion thereof to be drafted.
This Note shall be governed by and construed in accordance with the
laws of the State of New York without regard to choice of law considerations.
Borrower hereby irrevocably consents to the jurisdiction of the courts of the
State of New York, County of New York and of any federal court located in the
Southern District of New York in connection with any action or proceeding
arising out of or relating to this Note or the other Loan Documents.
This Note may not be changed or terminated orally.
A determination that any portion of this Note is unenforceable or
invalid shall not affect the enforceability or validity of any other provision,
and any determination that the application of any provision of this Note to any
person or circumstance is illegal or unenforceable shall not affect the
enforceability or validity of such provision to the extent legally permissible
and otherwise as it may apply to other persons or circumstances.
4
JURY TRIAL WAIVER. ▇▇▇▇▇▇▇▇ AGREES THAT ANY SUIT, ACTION OR
PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT BY BORROWER OR THE HOLDER OF
THIS NOTE ON OR WITH RESPECT TO THIS NOTE OR ANY OTHER LOAN DOCUMENT OR THE
DEALINGS OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED ONLY BY A
COURT AND NOT BY A JURY. ▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ EACH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
PROCEEDING. FURTHER, BORROWER WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER,
IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE,
CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.
▇▇▇▇▇▇▇▇ ACKNOWLEDGES AND AGREES THAT THIS PARAGRAPH IS A SPECIFIC AND MATERIAL
ASPECT OF THIS NOTE AND THAT LENDER WOULD NOT EXTEND CREDIT TO BORROWER IF THE
WAIVERS SET FORTH IN THIS PARAGRAPH WERE NOT A PART OF THIS NOTE.
[Remainder of page intentionally left blank. Signature page
follows.]
5
IN WITNESS WHEREOF, the undersigned has executed this Note on the
date first set forth above.
OAK FINANCE INVESTMENTS LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇