$1,932,000 or
so much thereof
as may have been advanced, to or
for the benefit of Maker
FOR VALUE
RECEIVED, the undersigned, ADVANCED ENVIRONMENTAL RECYCLING
TECHNOLOGIES, INC., a Delaware corporation whose local mailing
address is Post Office Box 1237, Springdale, Arkansas 72765
(“ Maker ”), promise to pay to LIBERTY
BANK OF ARKANSAS , an Arkansas state chartered bank whose local
mailing address is 4706 South Thompson, Suite 101, Springdale,
Arkansas 72764 (“ Holder ”), or order,
the principal sum of One Million Nine Hundred Thirty Two Thousand
and No/100 Dollars ($1,932,000), or so much thereof as may have
been advanced, to or for the benefit of Maker pursuant to the terms
of a Construction and Semi-Permanent Loan Agreement of even date
herewith (the “ Loan Agreement ”),
together with interest thereon calculated from the date or dates of
advancement until paid, upon advanced and unpaid principal
balances, at the Interest Rate set forth below, payable as set
forth below.
Definitions . The following definitions are
applicable to the words, phrases or terms used in this Note and all
other capitalized terms shall have the meaning set forth in the
Loan Agreement:
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(a)
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The
term “ Completion Deadline ” shall mean
twelve (12) months after the date hereof, which is the date by
which all development, construction of any and all Improvements,
landscaping and other work with regard to the Premises financed
with proceeds of this Note must be complete, as certified to Holder
by the Inspecting Architect/Engineer.
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(b)
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The
term “ Conversion Date ” shall mean the
date which is the earlier to occur of: 1) the Completion Deadline,
or 2) Maker elects to commence making equal monthly payments of
principal and interest based upon a twenty five (25) year
amortization period.
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(c)
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The
term “ Default Rate ” shall mean the
highest rate of interest permitted under Arkansas law at the time
of the occurrence of the Event of Default.
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(d)
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The
term “ Event of Default ” shall mean the
occurrence of any of the following:
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(1)
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A
failure by Maker to make any payment of principal or interest on
the Note within ten (10) days after such payment is due
provided that in the event a payment was actually made but such
payment is deficient as a result of a change in the interest rate,
Holder shall provide to
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Maker a notice of any Interest Rate
Change applicable to such payment and Maker shall have ten
(10) calendar days in which to pay and cure such
deficiency;
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(2)
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A
failure by Maker to comply with any of the other terms or
conditions specified herein this Note or in any of the other Loan
Instruments after any applicable periods of notice or
cure;
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(3)
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The
occurrence of any Event of Default, as defined in Article I of
the Loan Agreement.
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(e)
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The
term “ Holder ” shall mean Liberty Bank
of Arkansas and all of its successors and assigns and any
subsequent owner or holder of this Note.
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(f)
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The
term “ Interest Rate ” shall
mean:
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(1)
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from the date hereof until the
Conversion Date, a fixed rate equal to the Wall Street Journal
Prime Rate of Interest plus Twenty Five (25) basis points
determined on the Conversion Date. The actual Interest Rate,
therefore, will change as the Wall Street Journal Prime Rate
changes;
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(2)
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from the Conversion Date until the
Maturity, a floating rate equal to the Wall Street Journal Prime
Rate of Interest plus One Hundred (100) basis points. The actual
Interest Rate, therefore, will change as the Wall Street Journal
Prime Rate changes; and
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(3)
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on
and after Maturity, the Default Rate.
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(g)
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The
term “ Loan Instruments ” shall mean this
Note, the Loan Agreement, the Construction Mortgage, Security
Agreement and Fixture Filing (Secures Future Advances) of even date
herewith (the “ Mortgage ”), the
Assignment of Leases and Rents, and the other documents relating to
the indebtedness evidenced by this Note, whether any such documents
presently exist or are hereafter created.
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(h)
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The
term “ Maker ” shall mean Advanced
Environmental Recycling Technologies, Inc., a Delaware
corporation.
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(i)
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The
term “ Maturity ” shall mean the earlier
of the date that is exactly three (3) years after the
Conversion Date (the “ Scheduled Maturity
”), or the date on which Holder declares all sums due and
payable hereunder after an Event of Default, or such later date if
consented to in writing by both Maker and Holder, which consent may
be withheld for any or no reason by either party. For
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clarification purposes, in the event
the Conversion Date is the same date as the Completion Deadline,
the Scheduled Maturity would be September 28, 2009.
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(j)
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The
term “ Note ” shall mean this Promissory
Note.
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(k)
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The
term “ Per Annum ” with respect to the
Interest Rate shall mean a calendar year consisting of three
hundred sixty five (365) days.
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(l)
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The
term “ Wall Street Journal Prime Rate ”
shall mean the rate of interest equal to the prime rate on
corporate loans posted by at least seventy-five percent (75%) of
the nation’s thirty (30) largest banks as published
daily in the Wall Street Journal , Southwest Edition, or, in
the absence of such published rate, such other reference or
benchmark rate of interest that is established by the Holder as its
index rate to be in effect from time to time, whether or not such
rate is otherwise published, and which is used for its customers
previously tied to a Wall Street Journal Prime Rate of
interest.
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Advancement
Terms . Maker shall be entitled to demand advances under
this Note from time to time until the earlier to occur of: 1) the
Completion Deadline, or 2) five (5) days after completion of
development of the Mortgage Property (as defined in the Mortgage)
and construction of any and all Improvements financed with the
proceeds of this Loan, as certified to Holder by the Inspecting
Architect/Engineer, as that term is defined in the Loan Agreement.
Advances may be used solely for the Loan Purposes (as such term is
defined in the Loan Agreement) in accordance with the terms of the
Loan Instruments, but no more often than monthly, and only after
complying with the conditions precedent set forth in the Loan
Agreement, up to an aggregate principal balance which does not
exceed the lesser of the then undistributed amount of the principal
amount of this Note or an amount not to exceed eighty percent (80%)
loan to appraised value (as defined in the Loan Agreement). Maker
and Holder acknowledge and agree that the first advance under this
Note shall be in the amount of
and ___/100 Dollars ($
).
Repayment
Terms . Maker promises to pay all sums advanced to or for
the benefit of Maker under this Note as follows:
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(a)
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Commencing on October 28, 2005
and continuing on the same day of each calendar mont
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