exv10w16







Exhibit 10.16




PROMISSORY NOTE




			
	 	 	 
	$790,718.64
	 	March 31, 2009






1. FOR VALUE RECEIVED, CONVERTED ORGANICS, INC., a Delaware corporation, and CONVERTED ORGANICS OF
WOODBRIDGE, LLC, a limited liability company organized and existing under the laws of the State of
Delaware, jointly and severally, as “Borrower” (collectively “Borrower” to be construed as
“Borrowers” if the context so requires), having offices at 7A Commercial Wharf West, Boston,
Massachusetts 02110, hereby promises to pay to the order of RECYCLING TECHNOLOGY DEVELOPMENT, LLC,
a limited liability company organized and existing under the laws of the State of New Jersey (as
“Lender”), having offices at 75 Crows Mill Road, Keasbey, New Jersey 08832, or at such
other place as Lender may designate, the principal sum of seven hundred ninety thousand seven
hundred eighteen dollars and 64/000 ($790,718.64) Dollars (the “Loan Amount”), together
with interest on the unpaid balance of the Loan Amount from and after the date hereof, at the rate
of nine percent (9.00%) per annum (the “Interest Rate”). The unpaid principal balance of
the Loan Amount, together with accrued interest, and any other sum due Borrower to Lender hereunder
is hereinafter collectively referred to as the “Indebtedness”).




     Interest shall be computed on the unpaid balance of the Loan Amount on the basis of a 360-day
year composed of twelve 30-day months. Beginning on September 30, 2009, principal and interest on
the Loan Amount shall be due and payable in installments of two hundred sixty three thousand five
hundred seventy two dollars and 88/000 ($) Dollars, with an installment in a like amount due and
payable on the first day of each month thereafter until said principal and interest are fully paid,
except that the remaining principal of the Loan Amount and interest shall be due and payable on
March 31, 2010, or such earlier date resulting from the acceleration of the Indebtedness by Lender
(“Maturity Date”). Each installment shall be credited first to interest then accrued and the
remainder to the Loan Amount. All principal and interest shall be paid in lawful money of the
United States of America.



2. Borrower may prepay all or any portion of the Indebtedness prior to the Maturity Date, without
penalty.




3. If any payment of Indebtedness is not made when due, damages will be incurred by Lender,
including additional expense in handling overdue payments, the amount of which is difficult and
impractical to ascertain. Borrower therefore agrees to pay, upon demand, the sum of five cents
($.05) for each one dollar ($1.00) of each said payment which becomes overdue (“Late
Charge”) as a reasonable estimate of the amount of said damages, subject, however, to the
limitations contained in paragraph 6 hereof.




4. Converted Organics, Inc. is the tenant under that certain lease with Lender, as landlord, dated
June 2, 2006, which lease was amended by the certain First Amendment to Agreement of Lease date
January 18, 2007, and then assigned to Converted Organics of Woodbridge, LLC, (without Converted
Organics, Inc. being released from any liability thereunder), on February 1,


 









 







2007, and which lease
was later amended by that that certain Second Amendment to Agreement of Lease dated June 30, 2008
and
that certain Third Amendment of Lease of even date herewith (collectively the “Lease”).
Lender and Borrower agree that the Indebtedness constitutes “Additional Rent” pursuant to the Lease
and that this Promissory Note is deemed to be “another agreement with Landlord” for all purposes of
the Lease.




5. If any Event of Default (as defined in the Lease) has occurred and is continuing under the
Lease, or Borrower fails to perform any of its obligations under this Promissory Note, the
Indebtedness, whether or not otherwise then due, shall at the option of Lender, become immediately
due and payable without demand or notice, and whether or not Lender has exercised said option,
interest shall accrue on the Indebtedness at a rate equal to the Interest Rate plus five percent
(5%), until fully paid.




6. Notwithstanding anything herein or in the Lease, no provision contained herein or therein which
purports to obligate Borrower to pay any amount of interest or any fees, costs or expenses which
are in excess of the maximum permitted by applicable law, shall be effective to the extent it calls
for the payment of any interest or other amount in excess of such maximum. All agreements between
Borrower and Lender, whether now existing or hereafter arising and whether written or oral, are
hereby limited so that in no contingency, whether by reason of demand for payment or acceleration
of the maturity hereof or otherwise, shall the interest contracted for, charged or received by
Lender exceed the maximum amount permissible under applicable law. If, from any circumstance
whatsoever, interest would otherwise be payable to Lender in excess of the maximum lawful amount,
the interest payable to Lender shall be reduced to the maximum amount permitted under applicable
law; and if from any circumstance Lender shall ever receive anything of value deemed interest by
applicable law in excess of the maximum lawful amount, an amount equal to any excessive interest
shall, at the option of Lender, be refunded to Borrower or be applied to the reduction of the
Indebtedness, if such excessive interest exceeds the Indebtedness, such excess shall be refunded to
Borrower.




7. Borrower waives presentment, demand for payment, protest, notice of dishonor and notice of
nonpayment, and agrees the Maturity Date of this Promissory Note or any installment may be extended
by Lender without affecting any liability hereunder, and further promises to pay all reasonable
costs and expenses, including but not limited to, attorney’s fees, costs and expenses incurred by
Lender in connection with any default or in any proceeding to interpret and/or enforce this
Promissory Note or any provision of the Lease.




8. This Promissory Note is executed in connection with debt arising in pursuant to the Lease. Any
default in the covenants and conditions of the Lease (which covenants and conditions are made a
part hereof as though set forth herein at length), shall be a default under this Promissory Note.
In no event shall the Lease be construed inconsistently with the terms of this Promissory Note, and
in the event of any discrepancy between the Lease and this Promissory Note, the terms hereof shall
govern.




9. All obligations and agreements of Borrower hereunder are joint and several.




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10. This Promissory Note may not be changed or terminated orally, but only by an agreement in
writing and signed by the party against whom enforcement of any waiver, change, modification or
discharge is sought. All of the rights, privileges and obligations hereunder shall inure to the
benefit of the heirs, successors and assigns of Lender and shall bind the heirs and permitted
successors and assigns of Borrower.




11. The remedies of Lender, as provided herein, shall be cumulative and concurrent and may be
pursued singly, successively or together, at the sole discretion of Lender, and may be exercised as
often as occasion therefore shall occur; and the failure to exercise any such right or remedy shall
in no event be construed as a waiver or release thereof.




12. This Promissory Note shall be construed and enforced in accordance with the substantive law of
the State of New Jersey; the Courts of New Jersey shall have exclusive jurisdiction over suits as
to this Promissory Note; and Borrower hereby consents to the jurisdiction of the courts of the
state of New Jersey.




13. If any provision of this Promissory Note shall, for any reason, be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, but
this Promissory Note shall be construed as if such invalid or unenforceable provision had never
been contained herein.




14. WAIVER OF JURY TRIAL




     BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT BORROWER MAY HAVE TO
TRIAL BY JURY IN ANY LEGAL ACTION, PROCEEDING, OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR
OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE INDEBTEDNESS EVIDENCED BY THIS PROMISSORY NOTE,
THE INTERPRETATION, CONSTRUCTION, VALIDITY, ENFORCEMENT OR PERFORMANCE OF THIS PROMISSORY NOTE; OR
ANY ACTS OR OMISSION OF LENDER IN CONNECTION WITH ANY OF THE FOREGOING.



15. This Promissory Note may be executed in counterparts, each of which shall be deemed an
original; and such counterparts when taken together shall constitute but one agreement.




(Signatures on next page)



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     IN WITNESS WHEREOF, Borrower, intending to be legally bound, has caused this Promissory Note
to be duly executed and delivered as of the date first written above.



	 	 	 	 	 
	 	CONVERTED ORGANICS, INC.,

a Delaware corporation
	 
	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	CONVERTED ORGANICS OF WOODBRIDGE, LLC, 
a New Jersey limited liability company

 	 
	 	By 	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




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