TERM NOTE
$1,000,000.00 As of September 30, 2002
FOR VALUE RECEIVED, the undersigned, BALTEK CORPORATION, a Delaware
corporation, and CRUSTACEA CORPORATION, a Delaware corporation (each of Baltek
Corporation and Crustacea Corporation a "Borrower" and collectively the
"Borrowers"), hereby jointly and severally unconditionally promise to pay on or
before September 29, 2007 (the "Term Loan Maturity Date"), to the order of FLEET
NATIONAL BANK, a national banking association, as successor-by-merger to Summit
Bank (the "Bank"), at the office of the Bank located at 000 Xxxxxxxxxx Xxxx,
Xxxx Xxxx, Xxx Xxxxxx, or at such other location as the Bank shall designate, in
lawful money of the United States of America and in immediately available funds,
the principal amount of $1,000,000.00 pursuant to the terms, conditions, and
provisions of this Term Note and that certain Revolving Loan and Security
Agreement dated December 21, 1999, as amended by a First Amendment to Revolving
Loan and Security Agreement dated as of September 30, 2000, a Second Amendment
to Revolving Loan and Security Agreement dated as of December 31, 2000, a Third
Amendment to Revolving Loan and Security Agreement and Modification to Equipment
Line of Credit Note dated as of September 28, 2001, a Fourth Amendment to
Revolving Loan and Security Agreement dated as of July 31, 2002, but effective
as of June 30, 2002, and a Fifth Amendment to Revolving Loan and Security
Agreement and the Other Loan Documents dated as of September 30, 2002, all by
and among the Borrowers and the Bank, as such Loan and Security Agreement may be
further amended from time to time (collectively, the "Agreement"). Defined terms
used but not expressly defined herein shall have the same meanings when used
herein as set forth in the Agreement.
The Borrowers jointly and severally further agree to pay interest in like
money at such office on the unpaid principal amount hereof from time to time at
the interest rate(s) provided for in Sections 2A.2 and 2A.3 of the Agreement.
Interest shall be calculated on the basis of a 360-day year for the actual
number of days elapsed.
Installments of accrued interest only shall be due and payable hereon
monthly, with the first such installment being due and payable on November 1,
2002, and the remainder of such monthly installments of interest being due and
payable on the first day of each and every month thereafter until this Term Note
shall have been paid in full.
The Borrowers shall repay to the Bank the outstanding principal balance of
this Term Note in sixty (60) equal consecutive monthly installments, each in the
amount of $16,666.66, with the first such principal installment commencing on
November 1, 2002, and each succeeding monthly principal installment due on the
first day of each and every month thereafter up through and including the Term
Loan Maturity Date. Notwithstanding any term, condition, or provision of this
Term Note or the Agreement to the contrary, on the Term Loan Maturity Date the
Borrowers shall repay to the Bank any and all amounts then outstanding in
connection with this Term Note, including, without limitation, any and all
principal, interest, fees, costs, and other expenses, if any, due and owing to
the Bank.
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In the event that any payment due under this Term Note shall not be
received by Bank within ten (10) days of the due date, the Borrowers shall, to
the extent permitted by law, pay Bank a late charge of five percent (5%) of the
overdue payment (but in no event more than $2,500.00) as compensation to Bank.
Any such late charge shall be in addition to all other rights and remedies to
which Bank may be entitled and shall be immediately due and payable. Borrowers
acknowledge that (i) such late charge is a material inducement to Bank to make
the Term Loan available to the Borrowers, (ii) Bank would not have made the Term
Loan available to the Borrowers in the absence of the agreement of the Borrowers
to pay such late charge, and (iii) such late charge in not a penalty and
represents a reasonable estimate of the cost to Bank in allocating its resources
(both personnel and financial) to the additional review, monitoring,
administration and collection of the Term Loan.
All payments received hereunder may be applied first to the payment of any
expenses or charges payable hereunder and accrued interest, and the balance only
applied to principal.
Subject to the provisions of Section 2.7 of the Agreement, this Term Note
may be prepaid, in whole or in part, at one time or from time to time, without
prepayment premium or fee.
This Term Note is the "Term Note" referred to in the Fifth Amendment to
Revolving Loan and Security Agreement and the Other Loan Documents dated as of
September 30, 2002, and is secured by the Collateral described in the Agreement
and the Guaranty Agreement.
The Bank may declare this Term Note to be immediately due and payable if an
Event of Default shall have occurred under the Agreement or any of the other
Loan Documents (including any grace periods provided herein or therein).
To the extent permitted by law, whenever there is any Event of Default
under this Term Note, the rate of interest on the unpaid principal balance
shall, at the option of the Bank, be 5% in excess of the rate of interest
provided herein. Borrowers acknowledge that: (i) such additional rate is a
material inducement to Bank to make the Term Loan available to the Borrowers;
(ii) Bank would not have made the Term Loan available to the Borrowers in
absence of the agreement of the Borrowers to pay such additional rate; (iii)
such additional rate represents compensation for increased risk to Bank that the
Term Loan will not be repaid; and (iv) such rate is not a penalty and represents
a reasonable estimate of (a) the cost to Bank in allocating its resources (both
personnel and financial) to the on-going review, monitoring, administration and
collection of the Term Loan and (b) compensation to Bank for losses that are
difficult to ascertain.
This Term Note may not be changed orally, but only by an agreement in
writing, signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
Should the indebtedness represented by this Term Note or any part hereof be
collected at law or in equity, or in bankruptcy, receivership, or any other
court proceeding, or should this Term Note be placed in the hands of attorneys
for collection upon default, the Borrowers agree to pay, in addition to the
principal and interest due and payable hereon, all reasonable costs of
collecting or attempting to collect this Term Note, including reasonable
attorneys' fees and expenses and further including, without limitation, all post
judgment collection costs and expenses.
2
This Term Note shall be and remain in full force and effect and in no way
impaired until the actual payment thereof to the Bank, its successors or
assigns.
Anything herein to the contrary notwithstanding, the obligations of the
Borrowers under this Term Note shall be subject to the limitation that payments
of interest shall not be required to the extent that receipt of any such payment
by the Bank would be contrary to provisions of law applicable to the Bank
limiting the maximum rate of interest which may be charged or collected by the
Bank.
Each of the Borrowers and all endorsers and guarantors of this Term Note
hereby waive presentment, demand of payment, protest and notice of dishonor of
this Term Note.
This Term Note is binding upon the Borrowers and their respective
successors and assigns and shall inure to the benefit of the Bank and its
successors and assigns.
This Term Note and the rights and obligation of the parties hereto shall be
subject to and governed by the laws of the State of New Jersey.
IN WITNESS WHEREOF, the undersigned have caused this Term Note to be duly
executed by their respective authorized officers, all as of the day and year
above written.
ATTEST: BALTEK CORPORATION
/s/ Xxxxxx X. Xxxx By: /s/ Xxxxxxx Xxxx
------------------------- -------------------------------
Xxxxxx X. Xxxx, Secretary Xxxxxxx Xxxx, President
ATTEST: CRUSTACEA CORPORATION
/s/ Xxxxxx X. Xxxx By: /s/ Xxxxxxx Xxxx
------------------------- -------------------------------
Xxxxxx X. Xxxx, Secretary Xxxxxxx Xxxx, President
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