Promissory Note

Exhibit 10.75

 

 

FOR VALUE RECEIVED, the undersigned Castle Brands Inc., a Delaware corporation (the "Company"), promises to pay to the order of Frost Nevada Investments Trust (the "Holder") the lesser of (x) FIVE MILLION US DOLLARS (US $5,000,000) and (y) the aggregate unpaid principal amount of Advances (as hereinafter defined) made under this Note to the Company pursuant to the terms of this Note and the Credit Agreement (as hereinafter defined), together in either case, with unpaid interest on the unpaid balance of the principal amount outstanding, on the Maturity Date and subject to the following provisions. Unless otherwise provided herein, accrued interest hereon shall be paid quarterly on the Interest Payment Dates (as hereinafter defined).

 

The capitalized terms in this Note shall have the meanings ascribed to such terms in the Note Purchase Agreement unless otherwise defined herein:

 

"Advance" and "Advances" shall have the meaning as set forth in Section 2.1 below;

 

"Credit Agreement" means that certain Credit Agreement dated as of the first date set forth above, by and among the Company and the Holder.

 

"Borrowing Commitment" means an aggregate of $5,000,000.

 

"Business Day" shall mean any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the State of New York.

 

"Company" has the meaning set forth in the introductory paragraph to this Note;

 

"Default Rate" shall have the meaning set forth in Section 6.1 below;

 

"Holder" has the meaning set forth in the introductory paragraph to this Note;

 

“Interest Payment Date(s)” means the last Business Day of each March, June, September and December;

 

"Interest Rate" means the rate of 10% per annum, calculated on the basis of a 360 day year based on the number of days elapsed including the first day, but excluding the day on which such calculation is being made;

 

"Maturity Date" means the earlier to occur of (i) one Business Day after the closing of the closing of any sale of debt or equity securities by the Company or its affiliates which results in net proceeds to the Company of at least $10,000,000 dollars when aggregated with all additional sales of debt or equity securities between the date hereof (excluding the Note) and such closing date and (ii) February 28, 2009;

 

"Note" means this Promissory Note;

 

"Principal Amount" means the total Advances made hereunder; or

 

2.1  Advances. With respect to each proposed additional advance to the Company under this Note (any advance, an "Advance" and, collectively, the "Advances"), the Company shall give at least 10 days prior written notice to the Holder of its intention to borrow hereunder, which notice shall specify the date and the principal amount of the proposed Advance (a "Borrowing Request"). All Advances shall be in increments of $1,000,000. Following the receipt of a Borrowing Request, the Holder shall make the Advance on the date and in the amount as outlined in the Borrowing Request and the Borrowing Commitment shall be reduced by the amount of such Advance. Anything to the contrary herein notwithstanding, Holder shall have no obligation to make any Advance to the extent that the aggregate of all Advances made, including the Advance contemplated by the first sentence of this Section 2.1, exceeds the Borrowing Commitment.

 

The Principal Amount together with all accrued but unpaid interest under this Note shall be due and payable on the Maturity Date in accordance with the terms of this Note. If the payment of the Principal Amount and interest on this Note becomes due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day, and any such extension of time shall be included in computing interest in connection with such payment.

 

The Company shall pay accrued interest to the Holder on each applicable Interest Payment Date based upon the Principal Amount outstanding from time to time at the Interest Rate.

 

 

The Company may prepay the Principal Amount and/or the accrued but unpaid interest on this Note or any part thereof without penalty at any time in the Company's sole discretion.

 

All payments of the indebtedness evidenced by this Note shall be applied first to any accrued but unpaid interest on this Note then due and payable hereunder, and then to the Principal Amount of this Note then outstanding.

 

All payments of Principal Amount or of interest on this Note shall be made in US dollars at the address of Holder indicated on the signature page hereof, or such other place as Holder shall designate in writing to Company.

 

The occurrence of any of the following shall constitute an Event of Default under this Note: (a) The Company's failure to pay the outstanding Principal Amount and accrued interest on this Note due on the Maturity Date; (b) the Company's failure to pay any fees or interest related to this Note when due and any such failure to pay shall remain unremedied after the Company has been provided with ten (10) Business Days prior written notice or (c) an Event of Default under, and as defined in, the Credit Agreement.

 

Upon the occurrence of an Event of Default, (i) this Note shall become due and payable upon the demand of the Holder, and upon such demand shall thereafter become automatically due and payable, without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly waived by the Company, and (ii) the Interest Rate shall increase by 200 basis points above the Interest Rate (the "Default Rate").

 

The Company waives presentment for payment, notice of nonpayment, protest, demand, notice of protest, notice of intent to accelerate, notice of acceleration and dishonor, diligence in enforcement and indulgences of every kind.

 

8.

No Waiver.

 

The acceptance by Holder of any payment under this Note which is less than the payment in full of all amounts due and payable at the time of such payment shall not (i) constitute a waiver of or impair, reduce, release or extinguish any right, remedy or recourse of Holder, or nullify any prior exercise of any such right, remedy or recourse, or (ii) impair, reduce, release or extinguish the obligations of any party as originally provided herein.

 

The rights, remedies and recourses of Holder, as provided in this Note, shall be cumulative and concurrent and may be pursued separately, successively or together as often as occasion therefore shall arise, at the sole discretion of Holder.

 

This Note shall be governed by, and interpreted in accordance with, the laws of the State of New York, without giving effect to the rules respecting conflicts of law.

 

If any provision hereof or the application thereof to any Person or circumstance shall, for any reason and to any extent, be invalid or unenforceable, neither the application of such provision to any other Person or circumstance nor the remainder of the instrument in which such provision is contained shall be affected thereby and shall be enforced to the greatest extent permitted by law.

 

The headings in this Note are included only for convenience and shall not affect the meaning or interpretation of this Note. The words "herein" and "hereof" and other words of similar import refer to this Note as a whole and not to any particular part of this Note.

 

All notices, demands, and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or mailed by registered or certified mail (return receipt requested) or sent via facsimile (with acknowledgment of complete transmission), to Holder at its address set forth below, or to the Company at its principal executive office (or at such other address for a party as shall be specified by like notice).

 

Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Note, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Note, if mutilated, the Company will execute and deliver a new Note of like tenor and date.

 

 

This Note shall be binding upon and inure to the benefit of both parties hereto and their respective successors and assigns. If any provision of this Note shall be held to be invalid or unenforceable, in whole or in part, neither the validity nor the enforceability of the remainder hereof shall in any way be affected.

 

Nothing contained in this Note shall be deemed to require the payment of interest or other charges by the Company or any other Person in excess of the amount which Holder may lawfully charge under the applicable usury laws. In the event that Holder shall collect moneys which are deemed to constitute interest which would increase the effective Interest Rate to a rate in excess of that permitted to be charged by applicable law, all such sums deemed to constitute interest in excess of the legal rate shall be credited against the Principal Amount then outstanding and the excess shall be returned to the Company.

 

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Date	Amount of Loan Made This Date	Outstanding Principal Balance This Date	Notation Made By
____10/ /07_____	______$0.00____	_____$0.00_____	______________
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