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$620,235.00
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June ___, 2009
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FOR VALUE
RECEIVED, Converted Organics of Woodbridge, LLC, a New Jersey
limited liability company having its principal place of business at
75 Crows Mill Road, Keasbey, New Jersey 08832 and Converted
Organics, Inc., a Delaware corporation having its principal place
of business at 7A Commercial Wharf West, Boston, Massachusetts
02110 (collectively “ Borrower ”) promise to pay
to the order of Hatzel & Buehler, Inc., ( “Holder
”), at the following address: 3600 Silverside Road,
Wilmington, DE 19810, or such other place as the holder hereof may
from time to time designate in writing, the principal sum of Six
Hundred Twenty Thousand Two Hundred Thirty Five and 00/100 Dollars
($620,235.00) in lawful money of the United States of America, with
interest thereon to be computed from the date of this Promissory
Note (the “ Note ”) at the Applicable Interest
Rate (hereinafter defined), and to be paid in installments as
follows:
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A.
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A
payment, on the date hereof (the “ Disbursement Date
”) in the sum of: (i) $65,560.00, plus (ii) an amount
representing interest from the Disbursement Date through the last
day of the calendar month this Note is executed;
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B.
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A
payment of interest only at the Applicable Rate on the first day of
August, 2009 and on the first day of each calendar month thereafter
up to and including the first day of January, 2010;
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C.
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A
constant payment of $32,299.69 (based upon an 18 month
amortization schedule assuming a 360 day year consisting of
12 months of 30 days each) on the first day of February,
2010 and on the first day of each calendar month thereafter up to
and including the first day of June, 2011; and
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D.
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The
balance of said principal sum, all unpaid interest thereon and all
other amounts owed pursuant to this Note or otherwise in connection
with the debt evidenced by this Note (the “ Loan
”) shall be due and payable on the first day of July, 2011
(the “ Maturity Date ”).
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All payments to be
made by Borrower to Holder shall be deemed received by Holder only
upon Holder’s actual receipt of same.
1.
Applicable Interest Rate . Interest accruing on the
principal sum of this Note shall be calculated on the basis of a
360-day year comprised of twelve (12) thirty (30) day
months, except that interest due and payable for a period of less
than a full month shall be calculated by multiplying the actual
number of days elapsed in such period by a daily rate based on said
360 day year, provided that such method of calculation does
not cause the effective rate of interest on the loan evidenced
hereby to exceed the maximum lawful rate of interest applicable
hereto as calculated on the basis of a 365 or 366 day year.
The term “ Applicable Interest Rate ” as used in
this Note shall mean, from the date of this Note through and
including the Maturity Date, a rate of Six percent (6.0%) per
annum.
2.
Application . All payments on this Note shall be applied at
any time and from time to time in the following order: (i) the
payment or reimbursement of any expenses (including but not limited
to late charges), costs or obligations (other than the principal
hereof and interest hereon) for which Borrower shall be obligated
or Holder entitled pursuant to the provisions hereof, (ii) the
payment of accrued but unpaid interest thereon, and (iii) the
payment of all or any portion of the principal balance then
outstanding hereunder, in either the direct or inverse order of
maturity, at Holder’s option. Any
Hatzel &
Beuhler 112
Promissory Note
payment made by
Borrower must be received by Holder in immediately available funds
no later than 4:00 p.m. New York City time in order to receive same
day credit; any payment received thereafter shall be considered to
have been made on the following business day.
3. Late
Charge . If any part of the Debt (hereinafter defined) is not
actually received by Holder by close of business on the fifth
(5 th
) day after the date on which it was
due, Borrower shall pay to Holder an amount (the “ Late
Charge ”) equal to the lesser of five percent (5%) of
such unpaid portion of the missed payment or the maximum amount
permitted by applicable law, to defray the expenses incurred by
Holder in handling and processing such delinquent payment and to
compensate Holder for the loss of the use of such delinquent
payment. All such Late Charges shall be automatically due and
payable without notice or demand. In addition, Borrower shall pay
to Holder a charge of $75.00 if a check or preauthorized charge
with which Borrower makes a payment on this Note is dishonored or
refused by Borrower’s payor institution, and Holder may, at
its option, thereafter require any sums due under this Note to be
paid by wire transfer of federal funds, cashier’s check or
certified funds. Borrower’s payment of a Late Charge or the
payment of interest at the Default Rate (defined below) shall not
excuse late payment or constitute a waiver of any rights of
Holder.
4.
Security; Defined Terms; Incorporation by Reference . This
Note is secured by a Construction Lien filed by Holder in the
Office of the Middlesex County Clerk in Book 36, Page 824 as
amended by that certain First Amended Construction Lien Claim filed
by Holder in the Office of the Middlesex County Clerk in Book 37,
Page 533 (collectively, the “Construction Lien”)
in the amount of $620,238.40. All amounts due and payable under
this Note and all applicable attorney fees and costs, are
collectively referred to herein as the “ Debt .”
The term “business day” or “business days”
shall mean those days (other than Saturdays or Sundays) upon which
banks are generally open in New York City for the conduct of
substantially all of their commercial lending activities, and wire
transfers of funds can be made. Where appropriate, the singular
number shall include the plural, the plural shall include the
singular, and the words “Holder” and
“Borrower” shall include their respective successors,
assigns and personal representatives. The Borrower hereby agrees
and acknowledges that: (a) it has received good and valuable
consideration for the execution of this Note, (b) on the date
hereof, the full amount of the Debt is due to Holder, (c)
Borrower’s obligation to pay the Debt is not subject to any
claim, defense or offset, and (d) this Note shall not be
deemed to be a settlement, satisfaction or payment of the
Construction Lien unless and until the Debt is paid in full. Holder
has agreed to accept and Borrower has agreed to make payment of the
Debt under the terms contained herein to potentially avoid
protracted and costly litigation concerning the Construction Lien.
In order to prevent the Construction Lien from lapsing or expiring
or the forfeiture of any right under the Construction Lien Law,
N.J.S.A. P.L.1993, c. 318 (C. 2A:44A-1 et seq.), the Borrower:
(x) shall execute simultaneously with this Note a consent
order (“Consent Order”) which will extend the term of
the Construction Lien and extend any and all enforcement rights
thereunder, including but not limited to the right to file an
action in the Middlesex County Superior Court to establish the lien
claim, until October 31, 2011; (y) hereby consents to the
entry of the Consent Order with the Middlesex County Superior
Court; and (z) agrees to execute any and all documents
necessary to effectuate such extension or the entry of the Consent
Order. Notwithstanding the foregoing, Holder waives no rights it
currently possesses at law or equity concerning the Construction
Lien.
5.
Prepayment . The Debt due under this Note may be prepaid at
anytime, however, no such prepayment shall modify the monthly
payment due under paragraph C. of this Note which shall continue to
be paid until the entire Debt is paid in full.
6.
Default . An “ Event of Default
&rd
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