Attached files
PROMISSORY NOTE
Borrower:
Scientific Industries, Inc.
70 Orville Drive
Bohemia, NY 11716-251
Reference Number: xxxxxxxxxxxx
Lender:
JPMorgan Chase Bank, NA RM - Long Island East LPO
395 North Service Rd, Floor 03
Melville, NY 11747
Principal Amount: $700,000.00 Date of Note: 06/05/2013
PROMISE TO PAY: Scientific Industries, Inc. ("Borrower") promises to
pay to JPMorgan Chase Bank, NA, its successors and assigns ("Lender")
or order, in lawful money of the United States of America, the total
principal amount of $700,000.00 or so much as may be outstanding,
together with interest on the unpaid outstanding principal balance
from the date advanced until paid in full at the rate or rates
referenced in this Note.
RENEWAL NOTE: This Note is a renewal of an earlier loan or credit
extension to Borrower from Lender, or from a JPMorgan Chase & Co.
affiliate which transferred the loan to Lender, and is identified
in Lender or the affiliate's internal records as account number
xxxxxxxxxxxx. This Note shall not release or affect the liability
of any guarantor, surety or endorser of the loan, or release any
security interest granted by any owner of any collateral securing
the loan. This Note shall be considered a modification only, and
not a novation.
LOAN TYPE. This Note evidences a Commercial Line of Credit.
PAYMENT TERMS. Borrower will pay this loan in accordance with the
following payment schedule(s): Accrued interest and fees shall be
payable monthly, beginning July 14, 2013, and on the same calendar
day monthly thereafter , and the principal balance, together with
all accrued unpaid interest and any other unpaid amounts due under
this Note, shall be paid on June 14, 2014, the maturity date of
this Note.
Payments and any other credits shall be allocated among principal,
interest, late charges, collection costs, fees and other charges at
the discretion of Lender, unless otherwise required by applicable law.
Interest on this Note is computed on a 365/360 basis; that is, by
applying the ratio of the interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding.
INTEREST RATE.
The interest rate on this Note is subject to change from time to
time based on changes in an index which is the LIBOR Rate (the "Index").
"LIBOR Rate" shall mean the offered rate for U.S. Dollar deposits of
not less than $1,000,000.00 for a period of time equal to each
Interest Period as of 11:00 A.M. City of London, England time two
London Business Days prior to the first date of each Interest Period
of this Note as shown on the display designated as "British Bankers
Assoc. Interest Settlement Rates" on the Reuters Screen ("Reuters")
LIBOR01 Page, or such other page or pages as may replace such pages
on Reuters for the purpose of displaying such rate. Provided, however,
that if such rate is not available on Reuters then such offered rate
shall be otherwise independently determined by Lender from an
alternate, substantially similar independent source available to
Lender or shall be calculated by Lender by a substantially similar
methodology as that theretofore used to determine such offered rate
in Reuters. "London Business Day" means any day other than a Saturday,
Sunday or a day on which banking institutions are generally authorized
or obligated by law or executive order to close in the City of London,
England. Each change in the rate to be charged on this Note will
become effective without notice on the commencement of each Interest
Period based upon the Index then in effect. "Interest Period" means
each consecutive one month period (the first of which shall commence
on the date of this Note) effective as of the first day of each
Interest Period and ending on the last day of each Interest Period,
provided that if any Interest Period is scheduled to end on a date
for which there is no numerical equivalent to the date on which the
Interest Period commenced, then it shall end instead on the last day
of such calendar month. Except as otherwise provided herein, the
unpaid principal balance of this Note will accrue interest at a rate
equal to the sum of the Index plus 3.052 percentage point(s).
PREPAYMENT PREMIUM. Borrower may pay without fee all or any portion
of the loan evidenced by this Note at any time. All prepayments shall
be applied in such order and manner as Lender may from time to time
determine in its sole discretion.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be
charged a late charge of 5.00% of the payment due or $25.00, whichever
is greater, up to the maximum amount of $250.00 per late charge.
DEFAULT RATE. Upon the occurrence of any Event of Default, including,
but not limited to, (i) any material adverse change in the business
assets, affairs, prospects or financial condition of Borrower or any
Guarantor, (ii) failing to provide financial statements, copies of
Federal tax returns and other information relating to the financial
condition, properties and affairs of any Obligor, as provided for in
the Note and/or any Related Document or as Lender requests from time
to time, or (iii) failure to pay upon final maturity, at Lender's
option and if permitted by applicable law, Lender may (A) add any
unpaid accrued interest to principal and such sum will bear interest
there from until paid at the rate provided in this Note, including
any increased rate, and/or (B) increase the interest rate on this
Note by 3.000 percentage points (the "Default Rate Margin"). The
Default Rate Margin shall also apply to each succeeding interest
rate change, if any, that would have applied had there been no
Event of Default.
FEE(S): In addition to all other obligations under this Note, Borrower
shall pay the following fees together with all other fees described in
this Note:
Commitment Fee Waived $0.00
Total: $0.00
SECURITY AGREEMENT. Borrower hereby grants, pledges and assigns to Lender,
as security for repayment of the Indebtedness, a security interest in the
following property, together with any substitutions and replacements
therefor, and all products and proceeds thereof:
all business assets, inventory, equipment, accounts, general intangibles,
chattel paper, documents, instruments, and letter of credit rights
Such property, together with any property described in any Related Document,
is referred to in this Note as the "Collateral".
LINE OF CREDIT CLEARANCE. Borrower shall, at least once during the term
of this Note, reduce and maintain the outstanding principal balance of this
Note to a zero balance for a period of at least thirty consecutive calendar
days.
LENDER'S DISCRETIONARY MATURITY EXTENSION. Lender, in its sole discretion,
shall have the right, from time to time, to renew and extend the maturity
date of this Note (each a "Maturity Extension"). Borrower agrees Lender has
no obligation to extend the original or any subsequent maturity date and
may elect not to make a Maturity Extension at any time, even if one or more
Maturity Extensions has previously been made. Lender will inform Borrower
of any such Maturity Extension by written notice, executed by an officer
of Lender, addressed to Borrower at its then current billing address.
Notwithstanding the provision of this Note requiring that any alteration
or amendment to this Note shall require the signature of Borrower, Borrower
accepts and agrees to be bound by the Maturity Extension in the event this
Note is not paid in full on the maturity date, or after the date of the
Maturity Extension notice Borrower requests any advance or otherwise relies
upon or utilizes the extension of credit evidenced by this Note for any
purpose.
PERIODIC FEES. Not more often than one time in each calendar year, Lender
may elect to charge a fee in an amount determined by Lender, in its sole
discretion, for the extension of credit evidenced by this Note. The fee
may be charged, payable in advance, for each year, or portion of a year,
that there remains any unpaid amounts due on this Note or that advances
remain available under the line of credit evidenced by this Note,
including as a result of any Maturity Extension. The fee may be charged
to the line of credit. No refund of any portion of the fee shall be made
in the event of cancellation of the line of credit for any reason.
PRIMARY DEPOSIT ACCOUNTS. Lender expects Borrower to maintain its primary
deposit accounts at Lender. One of the factors the Lender will consider
in modification or renewal of this Note is the status of such accounts.
ADDITIONAL LOAN TERMS. Certain definitions and other additional terms
and conditions of the Note, are attached to this Note and are
incorporated herein by reference (the "Additional Terms"). This Note
represents the final agreement between Lender and Borrower and may not
be contradicted by evidence of prior, contemporaneous or subsequent
oral agreement of the parties. There are no unwritten agreements
between Lender and Borrower or Guarantors. Borrower agrees to be
bound by all terms of this Note, including but not limited to the
jury waiver provisions (where not prohibited by applicable law).
Borrower agrees that Lender may record or file this Note if Lender
deems it necessary to protect its interest. Borrower acknowledges
receipt of the important Additional Terms which are part of this
Note and the Security Agreement included in this Note. BORROWER
AGREES THIS SECURITY AGREEMENT SECURES ALL INDEBTEDNESS OF BORROWER
AND IS NOT LIMITED TO A SPECIFIC LOAN. "Indebtedness" is more fully
defined in the Additional Terms, is used in its most comprehensive
sense to mean any and all obligations of every kind and character
of Borrower, or any one or more of them, to Lender, now existing
or hereinafter incurred, and includes obligations owing after payment
in full of the specific term loan or line of credit described in
this Note.
Borrower agrees that a facsimile of the signature(s) of the signer(s)
of this Note, in any capacity, may be used to evidence the Borrower's
acceptance of the terms of this Note. Any use of the principal amount
or any other feature of this Note may be used as evidence of the
foregoing authorizations, acceptances and agreements.
CONDITIONS FOR FUNDING. IN ADDITION TO THE OTHER REMEDIES UNDER THIS
NOTE, WITHOUT THE CONSENT OF BORROWER OR NOTICE TO ANYONE, LENDER HAS
NO OBLIGATION TO MAKE THE INITIAL ADVANCE OR ANY ADVANCE UNDER THIS
NOTE IF LENDER DETERMINES, IN ITS SOLE DISCRETION, THAT (A) BORROWER'S
NAME ON THIS NOTE OR ANY GUARANTOR'S NAME ON THE GUARANTY IS INCORRECT
OR INCOMPLETE; (B) LENDER'S LIEN ON THE COLLATERAL WILL NOT BE THE
FIRST LIEN, FREE AND CLEAR OF ALL OTHER LIENS, SECURITY INTERESTS
OR ENCUMBRANCES; OR (C) ANY OTHER EVENT OF DEFAULT PROVIDED FOR IN
THIS NOTE HAS OCCURRED. ADVANCING FUNDS ON THIS LOAN DOES NOT WAIVE
ANY OF LENDER'S RIGHTS AND REMEDIES UNDER THIS NOTE.
Scientific Industries, Inc.
By: /s/ Helen M. Santos
_______________________
Helen M. Santos
Print Title: Pres/CEO Date: 6/7/13
