EXHIBIT 10.18
NON-NEGOTIABLE
PROMISSORY NOTE
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$2,600,000.00
May 22, 1986
New York, New York
FOR VALUE RECEIVED, Cogen Technologies NJ, Inc., a Delaware corporation with an
address at 14614 Falling Creek Drive, Suite 212, Houston, Texas 77068 (the
"Maker"), promises to pay to Bayonne Industries, Inc., a New Jersey corporation
with an address at the Foot of East 22nd Street, Bayonne, New Jersey 07002 (the
"Holder"), in lawful money of the United States of America, the principal amount
of Two Million Six Hundred Thousand Dollars ($2,600,000.00), with interest
thereon computed on the unpaid principal balance of this Note from the date
hereof at a fluctuating rate per annum equal to one percent (1%) in excess of
the Prime Rate of First National Bank of Chicago. The term "Prime Rate" means
the interest rate (sometimes referred to as the "Base Rate") for large
commercial loans to creditworthy entities published by First National Bank of
Chicago, or its successor bank, as such rate may be in effect from time to time.
The principal amount of and interest on this Note shall be payable in the
following manner:
(i) Interest on the first $2,400,000.00 of
the principal amount shall accrue from
the date hereof and shall be payable
on the 22nd day of June, 1986, and on
the 22nd day of each month thereafter
until the first $2,400,000.00 of the
principal amount is paid in full.
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(ii) Interest on the last $200,000.00 of
the principal amount (hereinafter
referred to as the "Deferred Interest")
shall accrue from the date hereof
until the last $200,000.00 of the
principal amount is paid in full and
shall be payable in accordance with the
provision of paragraph (iv) below.
(iii) Commencing on 22nd day of May, 1988,
and on each of the next four succeeding
anniversary dates thereof, installments
of $480,000.00 of the first $2,400,000.00
of the principal amount shall be payable.
(iv) The last $200,000.00 of the principal amount
hereof (the "Deferred Principal Amount"),
plus Deferred Interest on the Deferred
Principal Amount (collectively, the
"Deferred Amount") shall be due and payable
on the 22nd day of May 1998; provided, however,
that if on such date the term of that certain
agreement between Cogen Technologies NJ, Inc.
and IMTT-Bayonne dated June 13, 1985 for the
sale of steam and electricity from a cogeneration
plant, and all amendments thereto that may be
made from time to time, is in effect, such
payment date shall be extended to the
termination date of such agreement or of any
extension or renewal of the term thereof.
The first $2,400,000.00 of the principal amount of this Note may be
prepaid in whole or in part at any time and from time to time in integral
multiples of $10,000.00. Any prepayments made from the date hereof through May,
1992 shall be applied to the payments required in (iii) above in the inverse
order of maturity of the payments thereof.
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All payments under this Note shall be made at the office of the Holder
hereinabove referred to or at any other address as the Holder may designate in
writing to the Maker, in any coin or currency of the United States of America
which, at the time of payment, is legal tender for payment of public and private
debts.
The payment hereof is secured pursuant to the provisions of a security
agreement of even date herewith between the Maker and the Holder (the "Security
Agreement"). Upon the occurrence of an Event of Default (as such term is defined
in the Security Agreement), all unpaid principal and interest on this Note shall
become due and payable at the option of the Holder as provided therein.
Payment of the Deferred Interest is secured solely by the Collateral (as
such term is defined in the Security Agreement) upon the occurrence of an Event
of a Default under the Security Agreement, and neither the Maker nor any of its
officers, directors or shareholder (nor the officers, directors, shareholders or
partners of any assignee of Maker) shall be personally liable for the payment of
any deficiency resulting from the application of the proceeds of the sale of
the Collateral to the Deferred Interests and the Holder shall not initiate any
action or proceeding against the Maker or such persons to collect the same.
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The Maker hereby waives presentment, demand for payment, protest and notice
of dishonor of this Note.
In case this Note should be placed in the hands of an attorney, after its
stated maturity or upon acceleration, to institute legal proceedings to recover
the amount hereof, or any part hereof, in principal or interest, or to protect
the interests of the Holder hereof, or in case the same should be placed in the
hands of an attorney for collection, compromise or other action, the Maker and
endorsers bind themselves to pay the reasonable fees of the attorney who may be
employed for that purpose if the Holder is the prevailing party in any such
legal proceeding.
No delay on the part of Holder in exercising any rights hereunder shall
operate as a waiver of such rights. Forbearance to exercise any right in favor
of the Holder, provided herein, shall not constitute a waiver of that right as
to any subsequent failure or breach.
This Note shall be governed by the laws of the State of New Jersey.
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IN WITNESS WHEREOF, the Maker has caused this Note to be signed as of
the date first written above.
[SEAL]
ATTEST: COGEN TECHNOLOGIES NJ, INC.
/s/ John B. Wing By: /s/ Robert C. McNair
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John B. Wing, Robert C. McNair,
Assistant Secretary President