EXHIBIT 10.11
PROMISSORY NOTE IV-1
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BORROWER: ASTROPOWER, INC. LENDER: Artisans' Bank
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PRINCIPAL AMOUNT: $750,000.00 INITIAL RATE: 9.750% DATE OF NOTE: JANUARY 10, 1997
PROMISE TO PAY. FOR VALUE RECEIVED (GOOD AND VALUABLE CONSIDERATION):
ASTROPOWER, INC. ("BORROWER") PROMISES TO PAY TO ARTISANS'BANK ("LENDER"), OR
ORDER, IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA, THE PRINCIPAL AMOUNT OF
SEVEN HUNDRED FIFTY THOUSAND & 00/100 DOLLARS ($750,000.00), TOGETHER WITH
INTEREST ON THE UNPAID PRINCIPAL BALANCE FROM JANUARY 10, 1997, UNTIL PAID IN
FULL.
PAYMENT. SUBJECT TO ANY PAYMENT CHANGES RESULTING FROM CHANGES IN THE INDEX,
BORROWER WILL PAY THIS LOAN IN ACCORDANCE WITH THE FOLLOWING PAYMENT SCHEDULE:
MONTHLY PRINCIPAL PAYMENTS OF $10,000.00 PLUS ACCRUED INTEREST BEGINNING
FEBRUARY 10, 1997 AND THEREAFTER ON THE TENTH (10TH) OF EACH SUBSEQUENT
MONTH UNTIL MATURITY. ALL OUTSTANDING PRINCIPAL AND INTEREST, IF NOT SOONER
PAID, DUE AND PAYABLE ON JANUARY 10, 1999.
Interest on this Note is computed on a 365/365 simple interest basis; that is,
by applying the ratio of the annual interest rate over the number of days in a
year (366 during leap years), multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding.
Borrower will pay Lender at a address shown above or at such other place
as Lender may designate in writing. Unless otherwise agreed or required by
applicable law, payments will be applied first to any unpaid collection costs
and any late charges, then to any unpaid interest, and any remaining amount to
principal.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an index which is Lender's Prime Rate (the
"Index"). This is the rate Lender charges, or would charge, on 90-day a
loans to the most creditworthy corporate customers. This rate may or may not be
the lowest rate available from Lender at any given time. Lender will tell
Borrower the current Index rate upon Borrower's request. Borrower understands
that Lender may make loans based on other rates as well. The interest rate
change will not occur more often than each day. THE INDEX CURRENTLY IS 8.250%
PER ANNUM. THE INTEREST RATE TO BE APPLIED TO THE UNPAID PRINCIPAL BALANCE OF
THIS NOTE WILL BE AT A RATE OF 1.500 PERCENTAGE POINTS OVER THE INDEX, RESULTING
IN A CURRENT RATE OF 9.750% PER ANNUM. NOTICE: Under no circumstances will the
interest rate on this Note be more than the maximum rate allowed by applicable
law. Whenever increases occur in the interest rate. Lender, at its option, may
do one or more of the following: (a) increase Borrower's payments to ensure
Borrower's loan will pay off by its original final maturity date, (a)) increase
Borrower's payments to cover accruing interest, (c) Increase the number of
Borrower's payments, and (a) continue Borrower's payments at the same amount and
increase Borrower's final payment.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower's obligation to continue to make payments
under the payment schedule. Rather, they will reduce the principal balance due
and may result in Borrower making fewer payments.
LATE CHARGE. IF a payment is 15 DAYS OR MORE LATE, Borrower will be charged
5.000% OF THE UNPAID PORTION OF THE REGULARLY SCHEDULED PAYMENT.
DEFAULT. Borrower will be in default it any of the following happens: (a)
Borrower falls to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender. or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Borrower defaults under any loan, extension of credit,
security agreement, purchase or sales agreement, or any other agreement. in
favor of any other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (a) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (a) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor tries
to take any of Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's accounts with Lender.
(a) Any guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note. (h) A material
adverse change occurs in Borrower's financial condition, or Lender believes the
prospect of payment or performance of the Indebtedness is impaired.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued UNPAID interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, or if this Note is
not paid at final maturity, Lender, AT its option, may add any unpaid accrued
interest to principal and such sum will bear interest therefrom until paid, at
the rate provided in this NOTE. Lender may hire or pay someone else to help
collect this Note it Borrower does not pay. Borrower also will pay Lender that
amount. This includes, subject to any limits under applicable law. Lender's
reasonable attorneys' fees and Lender's legal expenses whether or not there is a
lawsuit, including reasonable attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services. If
not prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law. THIS NOTE HAS BEEN DELIVERED TO
LENDER AND ACCEPTED BY LENDER IN THE STATE OF DELAWARE. IF THERE IS A LAWSUIT,
BORROWER AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE
COURTS OF NEW CASTLE COUNTY, THE STATE OF DELAWARE SUBJECT TO THE PROVISIONS ON
ARBITRATION, THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED In ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE.
CONFESSION OF JUDGMENT. Borrower hereby irrevocably authorizes and empowers any
attorney-at-law to appear in any court of record and to confess judgment against
Borrower for the unpaid amount of this Note as evidenced by an affidavit signed
by an officer of Lender setting forth the amount then due, plus attorneys' fees
as provided in this Note, plus costs of suit, and to release all errors, and
waive all rights of appeal. If a copy of this Note, verified by an affidavit.
shall have been filed in the proceeding, it will not be necessary to file the
original as a warrant of attorney. Borrower a the right to any stay of
execution and the benefit of all exemption laws now or hereafter in effect. No
single exercise of the foregoing, warrant and power to confess judgment will be
deemed to exhaust the power, whether or not any such exercise shall be held by
any court to be Invalid, voidable, or void; but the power will continue
undiminished and may be exercised from time to time as Lender may elect until
all amounts owing on this Note have been paid In full.
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RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest In and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), Including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all ▇▇▇ and ▇▇▇▇▇ accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on this Note against any and
all such accounts.
ARBITRATION. LENDER AN BORROWER AGREE THAT ALL DISPUTES, CLAIMS AND
CONTROVERSIES BETWEEN THEM, WHETHER INDIVIDUAL, JONT, OR CLASS IN NATURE,
ARISING FROM THIS NOTE OR OTHERWISE, INCLUDING WITHOUT LIMITATION CONTRACT AND
TORT DISPUTES, SHALL BE ARBITRATED PURSUANT TO THE RULES OF THE AMERICAN
ARBITRATION ASSOCIATION, UPON REQUEST OF EITHER PARTY. No act to take a dispose
of any collateral securing this Note shall constitute a waiver of this
arbitration agreement or be prohibited by this arbitration agreement. This
includes, without limitation obtaining injunctive relief or a temporary
restraining order; invoking as power of sale under any deed of trust or
mortgage; obtaining a writ or attachment or imposition of a receiver; or
exercising any rights relating to personal property, including taking or
disposing of such property without judicial process pursuant to Article 9 of the
Uniform Commercial Code. Any disputes, claims, or controversies concerning the
lawfulness of reasonableness of any act, or exercise of any right, concerning
any collateral securing this Note, including any claim to rescind, reform, or
otherwise modify any agreement relating to the collateral securing this Note,
shall also be arbitrated, provided however that no arbitrator shall have the
right or the power to enjoin or restrain any act of any party. Judgment upon any
award rendered by any arbitrator may be entered in any court having
jurisdiction. Nothing in this Note shall preclude any party from seeking
equitable relief from a court of competent jurisdiction. The statute of
limitations, estoppel, waiver, laches, and similar doctrines which would
otherwise be applicable in a action brought by a party shall be applicable in
any arbitration proceeding, and the commencement of an arbitration proceeding
shall be deemed the commencement of an action for these purposes. a Federal
Arbitration Act shall apply to the construction, interpretation, and enforcement
of this arbitration provision.
ADDENDUM TO NOTE. An exhibit, titled "Addendum to Note," is attached to this
Note and by this reference is made a part of this Note just as if all the
provisions, terms and conditions of the Exhibit had been fully set forth in this
Note.
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01-10-1997 PROMISSORY NOTE PAGE 2
(CONTINUED)
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan, or
release any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
ASTROPOWER, INC.
BY: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------------------------(SEAL)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, VICE PRESIDENT, CONTROLLER AND TREASURER
ATTEST:
BY: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------------------- (CORPORATE SEAL)
Secretary or Assistant Secretary
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