Exhibit 10.2


    
      

      

    

    
       

      Exhibit
        10.2

      LOAN
        AGREEMENT

      


      


      AGREEMENT
        entered into on May 23, 2005, between Michael J. Spector and Margaret D.
        Spector
        (herein-after referred to collectively as the “Lenders”), and Margo Caribe,
        Inc., a corporation organized and existing under the laws of the Commonwealth
        of
        Puerto Rico (hereinafter referred to as the “Borrower”). This Agreement covers
        the terms and conditions upon which the Lenders may make a loan to the Borrower.
        Such terms and conditions are the following:

      


      
        	1.	
                Purpose
                  of Loan.

              


      

      


      1.1    Subject
        to the terms and conditions contained herein, the Lenders agree to make a
        loan
        to the Borrower in the amount of THREE MILLION DOLLARS ($3,000,000) to be
        used
        by the Borrower to repay outstanding obligations to the Borrowers under one
        or
        more outstanding promissory notes.

      


      
        	2.	
                Commitment;
                  Making of Loan, Interest and Repayment and Fees.

              


      

      


      2.1    Commitment.  The
        Lenders agree, on the terms and conditions hereinafter set forth, to make
        one
        advance to the Borrower (the “Loan”) in an aggregate principal amount of THREE
        MILLION DOLLARS ($3,000,000) (the “Commitment”) for the purpose set forth in
        Section 1.1 hereof. The Lenders shall make the amounts available under the
        Commitment on one single borrowing on the date hereof. Amounts borrowed
        hereunder will not be available for reborrowing by the Borrower.

      


      2.2    Loan;
        Interest and Repayment.  The
        Loan from the Lenders to the Borrower shall be evidenced by a promissory
        note of
        the Borrower payable to the order of the Lenders in the form of Exhibit A
        hereto
        (the “Note”). The Loan evidenced by the Note shall bear interest from its date
        until full payment of the unpaid principal balance thereof at an annual rate
        equal to the rate of interest announced publicly by Citibank, N.A. in New
        York,
        New York, from time to time, as Citibank’s base or prime rate. Interest due on
        the Note shall be payable monthly in arrears on the first day of each month,
        commencing on June 1, 2005 and on the date on which such Note is paid in
        full.



      
        
          
          

        

        
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        The Note shall have a maturity of May 1, 2010. The aggregate principal amount
        of
        the Note shall be payable in sixty (60) consecutive monthly installments
        on the
        first day of each month, with fifty-nine (59) equal consecutive monthly
        installments of EIGHT
        THOUSAND THREE THIRTY-THREE DOLLARS WITH THIRTY-THREE CENTS
        ($8,333.33) each, commencing on June 1, 2005, and a balloon payment on the
        sixtieth (60th)
        and
        final installment of TWO
        MILLIONS FIVE HUNDRED DOLLARS WITH TWENTY CENTS
        ($2,500,000.20); provided,
        however,
        that
        the last such principal repayment installment shall be in the amount necessary
        to repay in full the unpaid principal amount of the Loan and all amounts
        outstanding hereunder, unless otherwise agreed to in writing by the parties.
        

      


      2.3    Payments
        and Computations.  The
        Borrower shall make each payment hereunder, under the Note not later than
        12:00
        noon (San Juan, Puerto Rico time) on the day when due in lawful money of
        the
        United States of America to the Lenders at the address referred to in
        Section 5.4 in immediately available funds. All computations of interest
        under the Note and fees payable hereunder shall be made by the Lenders on
        the
        basis of a year of 360 days, for the actual number of days occurring in the
        period for which such interest is payable.

      


      2.4    Payments
        on Non-Business Days.  Whenever
        any payment to be made hereunder or under the Note shall be stated to be
        due on
        a day other than a Business Day, such payment may be made on the next succeeding
        Business Day, and such extension of time shall in such case be included in
        the
        computation of payment of interest or fees, as the case may be. The term
        “Business Day” means any day of the year that is not a Saturday, Sunday or other
        day on which commercial banks in Puerto Rico are authorized or required by
        law
        to remain closed.


      
        
          
          

        

        
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        	3.	
                Prepayment.

              


      

      


      3.1    At
        its
        option, the Borrower may at any time and from time to time prepay the Note
        in
        whole or in part upon at least five (5) Business Days’ written notice to the
        Lenders specifying the date of the proposed prepayment and the amount thereof.
        

      


      3.2    At
        the
        time of making each such prepayment pursuant to the provisions of this Section
        3, the Borrower shall pay to the Lenders accrued interest thereon to the
        date of
        such prepayment. Prepayment shall be made without premium or
        penalty.

      


      3.3    Prepayments
        described in this Section shall be applied as follows: (A) first, to all
        accrued
        and unpaid interest due under the Note to the date of such prepayment and
        (B)
        second, to the principal installments set forth in Section 2.2, in inverse
        order
        of their maturities.

      


      
        	4.	
                Events
                  of Default.

              


      

      


      4.1    The
        following occurrences shall be considered events of default (each an “Event of
        Default”) hereunder:

       

                 
4.1.1  The
        Borrower or any Loan Party shall fail to pay, when due, any principal of
        or
        interest on the Loan or any other amount payable by the Borrower under this
        Agreement, or the Note; or

      


      4.1.2  The
        Borrower or any other Loan Party shall become insolvent or unable to pay
        its
        debts as they mature, or shall file a voluntary petition in bankruptcy, or
        a
        voluntary petition seeking reorganization, or to effect a plan or other
        arrangement with creditors, or shall file an answer consenting to, or take
        any
        other action indicating acquiescence in, an involuntary petition pursuant
        to, or
        purporting to be pursuant to, any bankruptcy, reorganization or insolvency
        law
        of any jurisdic-tion, or shall be adjudged a bankrupt or insolvent by any
        court
        of competent jurisdiction, or shall make an assignment for the benefit of
        creditors or to an agent authorized to liquidate any substantial amount of
        its
        assets, or shall apply for, or consent to the appointment of any receiver
        or
        trustee for it or for a substantial part of its property; or


      
        
          
          

        

        
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      4.1.3  An
        order
        shall be entered and shall not be dis-missed or stayed within thirty (30)
        days
        from its entry pursuant to, or purporting to be pursuant to, any bankruptcy,
        reorgani-zation or insolvency law of any jurisdiction, approving an involuntary
        petition seeking reorganization, or to affect a plan or other arrangement
        with
        creditors of the Borrower or any other Loan Party, or appointing any receiver
        or
        trustee for the Borrower or any other Loan Party or for a substantial part
        of
        the property of the Borrower or any other Loan Party; or

      


      4.2    Upon
        the
        occurrence of an Event of Default, the Lenders may, by notice to the Borrower
        (i) declare the Note, all interest thereon and all other amounts payable
        under the Note and this Agreement and all other obligations of the Borrower
        under this Agreement to be forthwith due and payable, whereupon the Note,
        all
        such interest and all such amounts shall become and be forthwith due and
        payable, without presentment, demand, protest or further notice of any kind,
        all
        of which are hereby expressly waived by the Borrower, and (ii) exercise any
        or
        all other rights and remedies existing at law or equity or by statute under
        the
        laws of Puerto Rico, including, without limitation, the right to seek specific
        performance and the rights and remedies of a secured creditor; provided,
        however,
        that in
        the event of an actual or deemed entry of an order for relief with respect
        to
        any Loan Party under the Federal Bankruptcy Code as described in
        Sections 4.1.2 and 4.1.3, the Note, all such interest and all such
        amounts
        shall automatically become and be due and payable, without presentment, demand,
        protest or any notice of any kind, all of which are hereby expressly waived
        by
        the Borrower.

      


      
        	5.	
                Miscellaneous.

              


      

      


      5.1    No
        Waiver.
        No
        delay or failure of the Lenders, or of any holder of the Note in the exercise
        of
        any right, power or privilege hereunder, or under the terms of the Note,
        shall
        affect such right, power or privilege; nor shall any single or partial exercise
        thereof, nor any event, abandonment or discontinuance of steps to enforce
        such
        right, power or privilege, preclude any further exercise thereof, or of any
        other right, power or privilege.


      
        
          
          

        

        
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      5.2    Remedies.
        The
        rights and remedies of the Lenders hereunder are cumulative and not exclusive
        of
        any right or remedy which it would otherwise have.

      


      5.3    Amendments,
        Etc.
        Any
        waiver, permit, consent or approval of any kind or character on the part
        of the
        Bank of any breach or default under this Agreement, or of any provision or
        condition of this Agreement must be in writing, and shall be effective only
        to
        the extent in such writing specifically set forth.

      


      5.4    Notices.
        All
        notices, statements, requests and demands given to or made upon the Borrower
        in
        accordance with the provisions of this Agreement shall be deemed to have
        been
        given or made when delivered in person or deposited in the mails addressed
        as
        follows: 

      


      If
        to
        Borrower at:

      


      Margo
        Caribe, Inc.

      Road
        690,
        Kilometer 5.8

      Vega
        Alta, Puerto Rico 00692

      


      Attention:
        Juan B. Medina

      


      If
        to the
        Lenders at:

      


      Mr.
        and
        Mrs. Michael J. Spector

      Call
        Box
        1370

      Dorado,
        P.R. 00646-1370

      


      5.5    Governing
        Law; Successors and Assigns.
        This
        agreement and the rights and obligations of the parties hereunder and thereunder
        shall be construed in accordance with and be governed by the law of the
        Commonwealth of Puerto Rico. This Agreement shall be binding upon and shall
        inure to the benefit of the Borrower and the Lenders and their respective
        successors and assigns, provided, however, that this Agreement shall not
        be
        assigned by the Borrower without the prior written consent of the
        Lenders.


      
        
          
          

        

        
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      5.6    Counterparts.
        This
        Agreement may be executed in any number of counterparts and by different
        parties
        hereto in separate counterparts, each of which when so executed shall be
        deemed
        to be an original and all of which taken together shall constitute one and
        the
        same agreement.

      


      


      [Signature
        Page Follows]

       

       

       

       

       

       

       

       

       


      
        
          
          

        

        
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      IN
        WITNESS WHEREOF,
        the
        parties hereto have caused this Agreement to be executed, as of the date
        first
        above written.

      


      


      
        	
                MARGO
                  CARIBE, INC

              
	 	 
	 	 
	 	 
	
                By:

              	
                /s/
                  Juan B.
                  Medina                                                  
                  

              
	
                Name:      Juan
                  B. Medina

              
	
                Title:         President
                  & COO

              


      

      


      


      


      
        	
                By:

              	
                /s/
                  Michael J.
                  Spector                  
                  

              
	
                Name:    Michael
                  J. Spector

              


      

      


      


      
        	
                By:

              	
                /s/
                  Margaret D.
                  Spector               
                  

              
	
                Name:   
                  Margaret
                  D. Spector

              


      

      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      



      
        
          
          

        

        
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      EXHIBIT
        A

      


      


      PROMISSORY
        NOTE

      


      


      
        	
                $3,000,000

              	
                Due
                  Date: May 1, 2010

              
	 	
                Vega
                  Alta, Puerto Rico

              


      

      


      FOR
        VALUE RECEIVED,
        MARGO
        CARIBE, INC., a corporation organized and existing under the laws of the
        Commonwealth of Puerto Rico (the “Maker”), hereby unconditionally promises to
        pay to the order of Michael J. Spector and Margaret D. Spector (collectively
        the
“Holders”), at the principal office of the maker located at Road 690, K.M. 5.8,
        Vega Alta, Puerto Rico, or at such other place as the holder hereof may from
        time to time designate in writing, the principal sum of THREE MILLION DOLLARS
        ($3,000,000), in lawful money of the United States of America with in
        immediately available funds, on the dates and in the principal amounts provided
        in the Loan Agreement dated May 23, 2005, between the Maker and the Holders
        (the
“Loan Agreement”) interest thereon to be computed from the date of this Note
        until satisfaction thereof at a fluctuating rate of interest equal to the
        Prime
        Rate. The entire principal balance of this Note shall be due and payable
        on May
        1, 2010 (the “Maturity Date”). Interest shall be paid on a monthly basis on the
        first day of each month commencing on June 1, 2005. For purposes of this
        Note,
“Prime Rate” shall mean at any time the fluctuating rate of interest announced
        publicly from time to time by Citibank, N.A., in New York as its “Prime”, “Base”
        or “Reference” Rate.

      


      The
        principal balance of this Note may be prepaid in whole or in part prior to
        the
        Maturity Date without premium or penalty.

      


      The
        Maker
        shall pay all reasonable costs and expenses incurred by or on behalf of the
        Holders in connection with the Holders’ exercise of any or all of their rights
        and remedies under this Note, including reasonable attorneys’ fees and
        expenses.

      


      This
        Note
        may not be modified, amended, waived, extended, changed, discharged or
        terminated orally or by any act or failure to act on the part of the Maker
        or
        the Holders, but only by an agreement in writing signed by the party against
        whom enforcement of any modification, amendment, waiver, extension, change,
        discharge or termination is sought.

      


      The
        Maker
        (and the undersigned representative of the Maker) represents that it has
        full
        power, authority and legal right to execute and deliver this Note and that
        this
        Note constitutes the valid and binding obligations of the Maker.

       

      
        
          

        

      

      
      


      This
        Note
        is subject to and shall be construed under the laws of the Commonwealth of
        Puerto Rico. The undersigned acknowledges receipt of a true and exact copy
        of
        this Note.

      


      In
        Vega
        Alta, Puerto Rico, on this 23 day of May, 2005.

      


      


      
        	
                MARGO
                  CARIBE, INC

              
	 	 
	 	 
	 	 
	
                By:

              	
                /s/
                  Juan B.
                  Medina                                                           
                  

              
	
                Name:  
                  Juan
                  B. Medina

              
	
                Title:    
                  President
                  & COO

              


      

      
 

       

       

       

       

       

       

       

       

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