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Exhibit 10.1
NON-NEGOTIABLE PROMISSORY NOTE
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$11,000,000 February 27, 1998
FOR VALUE RECEIVED, Western Realty Development LLC, a Delaware limited
liability company ("Maker"), hereby unconditionally promises to pay to Apollo
Real Estate Investment Fund III, L.P., a Delaware limited partnership ("Payee"),
in lawful money of the United States of America, the principal sum of Eleven
Million Dollars ($11,000,000), together with interest in arrears accruing from
the date hereof on the unpaid principal balance at an annual rate equal to 15%,
in the manner provided below. Interest shall be calculated on the basis of a
year of 365 or 366 days, as applicable, and charged for the actual number of
days elapsed.
This Note has been executed and delivered pursuant to and in accordance
with the terms and conditions of the Amended and Restated Western Realty
Development LLC Limited Liability Company Agreement (the "LLC Agreement"), dated
as of February 20, 1998, among Maker, Payee, New Valley Corporation, a Delaware
corporation ("New Valley"), and BrookeMil Ltd., a Cayman Islands company
("BrookeMil").
1. PAYMENTS
1.1 PRINCIPAL AND INTEREST
The principal amount of this Note shall be due and payable on the
earlier of (i) September 30, 1998 or (ii) the date on which amounts hereunder
are declared due and payable pursuant to Section 2.3 (such earlier date, the
"Maturity Date"). Interest on this Note shall be due and payable on the Maturity
Date.
1.2 MANNER OF PAYMENT
All payments of principal and interest on this Note shall be made by
wire transfer in immediately available funds in U.S. Dollars to an account
designated by Payee in writing. If any payment of principal or interest on this
Note is due on a day which is not a Business Day, such payment shall be due on
the next succeeding Business Day, and such extension of time shall be taken into
account in calculating the amount of interest payable under this Note. "Business
Day" means any day other than a Saturday, Sunday or legal holiday in the State
of New York.
1.3 PREPAYMENT
Maker may, without premium or penalty, at any time and from
time to time, prepay all or any portion of the outstanding principal balance due
under this Note, provided that each such prepayment is accompanied by accrued
interest on the amount of principal prepaid calculated to the date of such
prepayment.
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2. DEFAULTS
2.1 EVENTS OF DEFAULT
The occurrence of any one or more of the following events with respect
to Maker shall constitute an event of default hereunder ("Event of Default"):
(a) If Maker shall fail to pay when due any payment of
principal or interest on this Note or any amount due pursuant to the Pledge
Agreement dated as of the date hereof (the "Pledge Agreement") between New
Valley, Payee and BrookeMil and such failure continues for 10 days after Payee
notifies Maker in writing; or
(b) If, pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to insolvency or
relief of debtors (a "Bankruptcy Law"), Maker, New Valley, Brooke Group Ltd.,
BGLS Inc., ▇▇▇▇▇▇▇ Group Inc., Brooke (Overseas) Ltd. or Western Tobacco
Investments LLC shall (i) commence a voluntary case or proceeding; (ii) consent
to the entry of an order for relief against it in an involuntary case; (iii)
consent to the appointment of a trustee, receiver, assignee, liquidator or
similar official; (iv) make an assignment for the benefit of its creditors; or
(v) admit in writing its inability to pay its debts as they become due; or
(c) If a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that (i) is for relief against Maker or New
Valley in an involuntary case; (ii) appoints a trustee, receiver, assignee,
liquidator or similar official for Maker or New Valley or substantially all of
Maker's or New Valley's properties; or (iii) orders the liquidation of Maker or
New Valley, and in each case the order or decree is not dismissed within 120
days; or
(d) If at any time Payee shall cease to have a perfected first
priority lien in the Collateral (as defined in the Pledge Agreement); or
(e) If Payee shall have terminated the LLC Agreement in
accordance with Section 14(a)(iii) thereof.
2.2 Notice by Maker
Maker shall notify Payee in writing within five days after the
occurrence of any Event of Default of which Maker acquires knowledge.
2.3 Remedies
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Upon the occurrence of an Event of Default hereunder (unless all Events
of Default have been cured or waived in writing by Payee), Payee may, at its
option, (i) by written notice to Maker, declare the entire unpaid principal
balance of this Note, together with all accrued interest thereon, immediately
due and payable regardless of any prior forbearance, and (ii) exercise any and
all rights and remedies available to it under applicable law, including, without
limitation, the right to collect from Maker all sums due under this Note and
exercise all rights and remedies of a secured party pursuant to the Pledge
Agreement. Maker shall pay all costs and expenses incurred by or on behalf of
Payee in connection with ▇▇▇▇▇'s exercise of any or all of its rights and
remedies under this Note and/or the Pledge Agreement, including, without
limitation, reasonable attorneys' fees.
3. MISCELLANEOUS
3.1 WAIVER
The rights and remedies of Payee under this Note shall be cumulative
and not alternative. No waiver by Payee of any right or remedy under this Note
or under the Pledge Agreement shall be effective unless in a writing signed by
Payee. Neither the failure nor any delay in exercising any right, power or
privilege under this Note or under the Pledge Agreement will operate as a waiver
of such right, power or privilege and no single or partial exercise of any such
right, power or privilege by Payee will preclude any other or further exercise
of such right, power or privilege or the exercise of any other right, power or
privilege. To the maximum extent permitted by applicable law, (a) no claim or
right of Payee arising out of this Note can be discharged by Payee, in whole or
in part, by a waiver or renunciation of the claim or right unless in a writing,
signed by ▇▇▇▇▇; (b) no waiver that may be given by Payee will be applicable
except in the specific instance for which it is given; and (c) no notice to or
demand on Maker will be deemed to be a waiver of any obligation of Maker or of
the right of Payee to take further action without notice or demand as provided
in this Note. Maker hereby waives presentment, demand, protest and notice of
dishonor and protest.
3.2 NOTICES
Any notice required or permitted to be given hereunder shall be given
in accordance with Section 13.1 of the LLC Agreement.
3.3 SEVERABILITY
If any provision in this Note is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Note will remain
in full force and effect. Any provision of this Note held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
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3.4 GOVERNING LAW; JURISDICTION
This Note will be governed by the laws of the State of New York without
regard to its conflict of laws principles.
Maker agrees that any legal action or proceedings arising out of or in
connection with this Agreement may be brought in any court of the State of New
York located in New York County or the United States District Court for the
Southern District of New York, and, by execution and delivery of this Note,
Maker hereby submits to and accepts with regard to any such action or
proceeding, for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts and waives any
objection which such party may now or hereafter have to any such court as the
venue for any such proceeding on the ground that it may constitute any forum
non-conveniens. The agreement set forth in this Section 3.4 is given solely for
the benefit of Payee and its permitted assigns and such agreement is not
intended to and shall not inure to the benefit of any other person.
3.5 NON-NEGOTIABILITY; PARTIES IN INTEREST
This Note shall bind Maker and its successors and assigns; provided,
however, that (i) Maker's obligations hereunder may not be assigned without the
prior written consent of ▇▇▇▇▇ and (ii) THIS NOTE IS NON-NEGOTIABLE AND SHALL
NOT BE ASSIGNED OR TRANSFERRED BY PAYEE WITHOUT THE EXPRESS PRIOR WRITTEN
CONSENT OF MAKER, EXCEPT BY OPERATION OF LAW, provided that (x) such consent
shall not be unreasonably withheld by Maker in the event of an assignment of
this Note to an affiliate of Payee, and (y) in the event of the occurrence of an
Event of Default, this Note shall be fully transferable.
3.6 TERMINATION
This Note shall be cancelled upon on the earlier to occur of (i) the
date on which payment of any and all amounts due and payable by Maker under this
Note and by New Valley under the Pledge Agreement is made to Payee and (ii) the
date on which this Note (including the interest accrued thereon) is converted,
in accordance with Section 12.8 of the LLC Agreement, into Class A Interests (as
defined therein) issued to Payee.
3.7 SECTION HEADINGS; CONSTRUCTION
The headings of Sections in this Note are provided for convenience only
and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Note unless otherwise specified.
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All words used in this Note will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided, the
words "hereof" and "hereunder" and similar references refer to this Note in its
entirety and not to any specific Section or subsection hereof.
IN WITNESS WHEREOF, Maker has executed and delivered this Note as of
the date first stated above.
Western Realty Development LLC
By:
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Name:
Title:
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