Attached files
COMMERCIAL SECURITY AGREEMENT
Principal Loan Date Maturity Loan No. Call/Coll
$300,000 07-05-2016 45668585 150
____________________________________________________________________
Account Officer Initials
2705
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References in the boxes above are for Lender's use only and do not
limit the applicability of this document to any particular loan or
item. Any item above containing******* has been omitted due to the
text length limitations.
____________________________________________________________________
Grantor: Sciertific Industries,Inc.
80 Orville Drive, Suite 102
Bohemia, NY 11716
Lender: First National Bank of
Pennsylvania
BBU Pittsburgh
ONE FNB BLVD
HERMITAGE,PA 16148
THIS COMMERCIAL SECURITY AGREEMENT dated July 5, 2016, is made and
executed between Scientific Industries, Inc. ("Grantor") and First
National Bank of Pennsylvania ("Lender").
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants
to Lender a security interest in the Collateral to secure the
Indebtedness and agrees that Lender shall have the rights stated in this
Agreement with respect to the Collateral, in addition to all other rights
which Lender may have by law.
COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement
means the following described property, whether now owned or hereafter
acquired whether now existing or hereafter arising, and wherever located,
in which Grantor is giving to Lender a security interest for the payment
of the Indebtedness and performanceof all other obligations under the Note
and this Agreement:
All Inventory, Chattel Paper, Accounts, Equipment, Documents and General
Intangibles
In addition, the word "Collateral" also includes all the following, whether
now owned or hereafter acquired, whether now existing or hereafter
arising, and where er located:
(A) All accesions, attachments, accessories, tools, parts, supplies,
replacements of and additions to any of the collateral described herein,
whether added now or later.
(B) All products and produce of any of the property describedin this
Collateral section.
(C) All accounts, general intangibles, instruments, rents, monies,
payments, and all other rights, arising out of a sale, lease,
consignment or other disposition of any of the property described
in this Collateral section.
(D) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property described
in this Collateral section, and sums due from a third party who has
damaged or destroyed the Collateral or from that party's insurer,
whether due to judgment, settlement or other process.
(E) All records and data relating to any of the property described
in this Collateral section, whether in the form of a writing,
photograph, microfilm, microfiche, or electronic media, together
with all of Grantor's right, title, and interest in and to all
computer software required to utilize, createi maintain, and
process any such recordsor data on electronic media.
CROSS-COLLATERALIZATION. In addition to the Note, this Agreement secures
all obligations, debts and liabilities, plus interest thereon, of
Granter to Lender, or any one or more of them, as well as all claims
by Lender against Grantor or any one or more of them, whether now
existing or hereafter arising, whether related or unrelated to the
purpose of the Note, whether voluntary or otherwise, whether due
or not due, direct or indirect, determined or undetermined, absolute
or contingent, liquidated or unliquidated, whether Granter may be liable
individually or jointly with others whether obligated as guarantor,
surety, accommodationparty or otherwise, and whether recovery upon
such amounts may be or hereafter may become barred by any statute of
limitations, and whether the obligation to repay such amounts may be
or hereafter may become otherwise unenforceable.
FUTURE ADVANCES. In addition to the Note, this Agreement secures all
future advances made by Lenderto Granter regardless of whether the
advances are made a) pursuant to a commitment or b) for the same purposes.
RIGHT OF SETOFF. To the extent permitted by applicablelaw, Lender reserves
a right of setoff in all Grantor's accounts with Lender (whether
checking, savings or some other account and whether evidenced by a
certificate of deposit). This includes all accounts Granter holds jointly
with someone else and all accounts Granter may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust
accounts for which setoff would be prohibited by law. Grantor
authorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing o the Indebtednessagainst any and all such
accounts.
GRANTOR'S REPRESENTATIONSAND WARRANTIESWITH RESPEC TO THE COLLATERAL.
With respect to the Collateral, Grantor represents and promises to Lender
that:
Perfection of Security Interest. Granter agreesto take whatever actions are
requested by Lender to perfect and continue Lender's security interest
in the Collateral. Upon request of Lender, Grantor will deliver to Lender
any and all of the documents evidencing or constituting the Collateral,
and Grantor will note Lender's interest upon any and all chattel paper
and instruments if not delivered to Lender for possession by Lender. This
is a continuing Security Agreement and will continue in effect even though
all or any part of the Indebtednessis paid in full and even tho gh for a
period of time Grantor may not be indebted to Lender.
Notices to Lendor. Grantor will promptly notify Lender in writing at
Lender's address shown above (or such other addressesas Lender may
designate from time to time) prior to any (1) changein Grantor's name;
(2) change in Grantor's assumedbusiness name(s); (3) change in the
management of the Corporation Granteo; (4) change in the authorized
signer(s); (5) change in Grantor's principal office address;
(6) change in Grantor's state of organization; (7) conversion of Grantor
to a new or different type of business entity; or (8) change in
any other as eel of Grantor that directly or indirectly relatesto any
agreements between Grantor and Lender. No change in Grantor's name
or state of organization will take effect until after Lender has received
notice.
No Violation. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Granter is
a party, and its certificate or articles of incorporation and bylaws
do not prohibit any term or condition of this Agreement.
Enforceability of Collateral. To the extent the Collateral consists of
accounts, chattel paper, or general intangibles, as defined by the
Uniform Commercial Code, the Collateral is enforceable in accordance with
its terms, is genuine, and fully complies with all applicable laws
and regulations concerning form, content and manner of preparation and
execution, and all persons appearing to be obligated on the Collateral
have authority and capacity to contract and are in fact obligated as they
appea rto be on the Collateral. At the time any account becomes subject
to a security interest in favor of Lender, the account shall be a good and
valid account representing an undisputed, bonafide indebtedness incurred
by the account debtor, for merchandise held subject to delivery instructions
or previously shipped or delivered
pursuant to a contract of sale, or for services previously performed by
Grantor with or for the account debtor. So long as this Agreement
remains in effect, Grantor shall not, without Lender's prior written
consent, compromise, settle, adjust, or extend payment under or with
regard to any such Accounts. There shall be no setoffs or counterclaims
against any of the Collateral, and no agreement shall have been
made under which any deductions or discounts may be claimed concerning
the Collateral except those disclosed to Lender in writing.
Location of tlie Collateral. Except in the ordinary course of Grantor's
business, Grantor agrees to keep the Collateral (or to the extent the
Collateral consists of intangible property such as accounts or general
intangibles, the records concerning the Collateral) at Grantor's
address shown above or at such other locations as are acceptableto Lender.
Upon Lender's request, Grantor will deliver to Lender in form
satisfactory to Lender a schedule of real properties and Collateral
locations relating to Grantor's operations, including without limitation
the following: (1) all real property Grantor owns or is purchasing;
(2) all real property Grantor is renting or leasing; (3) all storage
facilities Grantor owns rents, leases, or uses; and (4) all other
properties where Collateral is or may be located.
Removal of the Collateral. Except in the ordinary course of Grantor's
business, including the sales of inventory, Grantor shall not remove
the Collateral from its existing location without Lender's prior written
consent. To the extent that the Collateral consists of vehicles, or
other titled property, Grantor shall not take or permit any action which
would require application for certificates of title for the vehicles
outside the State of New York, without Lender's prior written consent.
Grantor shall, whenever requested, advise Lender of the exact
Location of the Collateral. Except in the ordinary course of Grantor's
business, Grantor agrees to keep the Collateral (or to the extent the
Collateral consists of intangible property such as accounts or general
intangibles, the records concerning the Collateral) at Grantor's address
shown above or at such other locations as are acceptable to Lender. Upon
Lender's request, Grantor will deliver to Lender in form satisfactory
to Lender a schedule of real properties and Collateral locations relating
to Grantor's operations, including without limitation the following:
(1) all real property Grantor owns or is purchasing; (2) all real property
Grantor is renting or leasing; (3) all storage facilities Grantor owns,
rents, leases, or uses; and (4) all other properties where Collateral is or
may be located.
Transactions involving Collateral. Except for inventory sold or accounts
collected in the ordinary course of Grantor's business, or as
otherwise provided for in this Agreement, Grantor shall not sell, offer
to sell, or otherwise transfer or dispose of the Collateral. While
Grantor is no in default under this Agreement, Grantor may sell inventory,
but only in the ordinary course of its business and only to buyers
who qualify as a buyer in the ordinary course of business. A sale in the
ordinary course of Grantor's business does not include a transfer in
partial or tota satisfaction of a debt or any bulk sale. Grantor
shall not pledge, mortgage, encumber or otherwise permit the Collateral to
be subject to any lien, security interest, encumbrance, or charge, other
than the security interest provided for in this Agreement, without
the prior written consent of Lender. This includes security interests
even if junior in right to the security interests granted under this
Agreement. Unless waived by Lender, all proceeds from any disposition
of the Collateral (for whatever reason) shall be held in trust for
Lender and slall not be commingled with any other funds; provided
however, this requirement shall not constitute consent by Lender to any
sale or other disposition. Upon receipt, Grantor shall immediately
deliver any such proceedsto Lender.
Title. Grantor represents and warrants to Lender that Grantor holds
good and marketable title to the Collateral, free and clear of all liens
and encumbrances except for the lien of this Agreement. No financing
statement covering any of the Collateral is on file in any public
office other than those which reflect the security interest created
by this Agreement or to which Lender has specifically consented.
Grantor shall defend Lender's rights in the Collateral against the claims
and demands of all other persons.
Repairs and Maintenance. Grantor agrees to keep and maintain, and
to cause others to keep and maintain, the Collateral in good order,
repair and condition at all times while this Agreement remains in
effect. Grantor further agreesto pay when due all claims for work done
on, or services rendered or material furnished in connection with
the Collateral so that no lien or encumbrance may ever attach to or be
filed against the Collateral.
Inspection of Collateral. Lender and Lender's designated representatives
and agents shall have the right at all reasonable times to examine
and inspect the Collateral wherever located.
Taxes, Assessments and Liens. Grantor will pay when due all taxes,
assessments and liens upon the Collateral, its use or operation, upon
this Agreement, upon any promissory note or notes evidencing the
Indebtedness, or upon any of the other Related Documents. Grantor
may withhold any such payment or may elect to contest any lien if Grantor
is in good faith conducting an appropriate proceeding to contest
the obligation to pay and so long as Lender's interest in the Collateral
is not jeopardized in Lender's sole opinion. If the Collateral is
subjected to lien which is not discharged within fifteen (15) days,
Grantor shall deposit with Lender cash, a sufficient corporate surety
bond or othe security satisfactory to Lender in an amount adequate
to provide for the discharge of the lien plus any interest, costs,
reasonable attorneys' fees or other charges that could accrue as a
result of foreclosure or sale of the Collateral. In any contest Grantor
shall defend self and Lender and shall satisfy any final adverse
judgment before enforcement against the Collateral. Grantor shall name
Lender as an additional obligee under any surety bond furnished in the
contest proceedings. Grantor further agrees to furnish Lender with
evidencetha such taxes, assessments, and governmentaland other charges
have been paid in full and in a timely manner. Grantor may
withhold any such payment or may elect to contest any lien if Grantor
is in good faith conducting an appropriate proceeding to contest the
obligation to filay and so long as Lender's interest in the Collateral
is not jeopardized.
Compliance With Governmental Requirements. Grantor shall comply
promptly with all laws, ordinances, rules and regulations
of all governmental authorities, now or hereafter in effect,
applicable to the ownership, production, disposition, or use of
the Collateral, including all laws or regulations relating to the
undue erosion of highly-erodible land or relating to the conversion
of wetlands for the production of an agricultural product or commodity.
Grantor may contest in good faith any such law, ordinance or regulation
and withhold compliance during any proceeding, including appropriate
appeals, so long as Lender's interest in the Collateral, in Lender's
opinion, is not jeopardized.
Hazardous Substances. Grantor represents and warrants that the
Collateral never has been, and never will be so long as this Agreement
remains a lien on the Collateral, used in violation of any Environmental
Laws or for the generation, manufacture, storage, transportation,
treatment, disposal, release or threatened release of any Hazardous
Substance. The representationsand warranties contained herein are
based on Grantor's due diligence in investigating the Collateral for
Hazardous Substances. Grantor hereby (1) releases and waives any
future claims against Lender for indemnity or contribution in the
event Grantor becomes liable for cleanup or other costs under any
Environmental Laws, and (2) agrees to indemnify, defend, and hold
harmless Lendera gainst any and all claims and losses resulting from a
breachof this provision of this Agreement. This obligation to indemnify
and defend shall survive the payment of the Indebtedness and the
satisfaction o'f this Agreement.
Maintenance of Casualty Insurance. Grantor shall procure and maintain
all risks insurance, including without limitation fire, theft and
liability coverage together with such other insuranceas Lender may
require with respect to the Collateral, in form, amounts, coverages
and basis reasonably acceptable to Lender and issued by a company
or companies reasonably acceptable to Lender. Grantor, upon request of
Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without
at least ten (10) days' prior written notice to Lender and not
including any disclaimer of the insurer's liability for failure to
give such a notice. Each insurance policy also shall include an
endorsement providing that coverage in favor of Lender will not be
impaired in any way by any act, omission or default of Grantor or any
other person. In connection with all policies covering assets in
which Lender holds or is offered a security interest, Grantor will
provide Lender with such loss payable or other endorsements as Lender
may require. If Grantor at any time fails to obtain or maintain
any insurance as required under this Agreement, lender may (but
shall not be obligated to) obtain such insurance as Lender deems
appropriate, including if Lender so chooses "single interest insurance,"
which will cover only Lender's interest in the Collateral.
Application o Insurance Proceeds. Grantor shall promptly notify
Lender of any loss or damage to the Collateral, whether or not such
casualty or loss is covered by insurance. Lender may make proof of
loss if Grantor fails to do so within fifteen (15) days of the
casualty.
All proceeds. If any insurance on the Collateral, including accrued
proceeds thereon, shall be held by Lender as part of the Collateral.
If Lender consents to repair or replacement of the damaged or destroyed
Collateral, Lender shall, upon satisfactory proof of expenditure, pay
or reimburse grantor from the proceeds for the reasonable cost of repair
or restoration. If Lender does not consent to repair or replacement
of the Collateral, Lender shall retain a sufficient amount of the proceeds
to pay all of the Indebtedness, and shall pay the balance to Grantor.
Any proceeds which have not been disbursed within six (6) months after
their receipt and which Grantor has not committed to the repair or
restoration of the Collateral shall be used to prepay the Indebtedness.
Grantor hereby appoints Lender as its attorney-in-fact with full
power and authority to endorse in Grantor's name any check or draft
representing the proceeds of any insurance on the Collateral and to settle
or compromise in Grantor's name any claims with respect to such insurance.
Insurance Reserves. Lender may require Grantor to maintain with Lender
reserves for payment of insurance premiums, which reserves shall
be created by monthly payments from Grantor of a sum estimated by Lender
to be sufficient to produce, at least fifteen (15) days before
the premium ue date, amounts at least equal to the insurance premiums to
be paid. If fifteen (15) days before payment is due, the reserve
funds are insufficient, Grantor shall upon demand pay any deficiency
to Lender. The reserve funds shall be held by Lender as a general
deposit and shall constitute a non-interest-bearing account which Lender
may satisfy by payment of the insurance premiums required to be
paid by Grantor as they become due. Lender does not hold the reserve funds
in trust for Grantor, and Lender is not the agent of Grantor for
payment of the insurance premiums required to be paid by Grantor.
The responsibility for the payment of premiums shall remain
Grantor's sole responsibility.
Insurance Reports. Grantor, upon request of Lender, shall furnish to
Lender reports on each existing policy of insurance showing such
information a Lender may reasonably request including the following:
(1) the name of the insurer; (2) the risks insured; (3) the amount
of the policy; (4) the property insured; (5) the then current value
on the basis of which insurance has been obtained and the manner of
determining that value; and (6) the expiration date of the policy.
In addition, Grantor shall upon request by Lender (however not more
often than annually) have an independent appraiser satisfactory to
Lender determine, as applicable, the cash value or replacement
cost of the Collateral.
Financing Statements. Grantor authorizes Lender to file a UCC financing
statement, or alternatively, a copy of this Agreement to perfect
Lender's security interest. At Lender's request, Granter additionally
agrees to sign all other documents that are necessary to perfect,
protect, and flontinue Lender's security interest in the Property.
Grantor will pay all filing fees, title transfer fees, and other fees
and costs involved unless prohibited by law or unless Lender is required
by law to pay such fees and costs. Grantor irrevocably appoints Lender to
execute documents necessary to transfer title if there is a default.
Lender may file a copy of this Agreement as a financing statement.
GRANTOR'S RIGHT TO POSSESSION AND TO COLLECTACCOUNTS. Until default and
except as otherwise provided below with respect to accounts, Grantor
may have possession of the tangible personal property and beneficial use
of all the Collateral and may use it in any lawful manner not
inconsistent with this Agreement or the Related Documents, provided that
Grantor's right to possession and beneficial use shall not apply to any
Collaleral where possession of the Collateral by Lender is required by
law to perfect Lender's security interest in such Collateral.
Until otherwise notified by Lender, Granter may collect any of the
Collateral consisting of accounts. At any time and even though no Default
exists, Lender ma exercise its rights to collect the accounts and to notify
account debtors to make payments directly to Lender for application to the
lndebtedness. If Lender at any time has possession of any Collateral,
whether before or after Default, Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral if Lender
takes such action for that purpose as Granter shall request or as Lender,
in Lender's sole discretion, shall deem appropriate under the
circumstances, but failure to honor any request by Grantor shall not
of itself be deemed to be a failure to exercise reasonable care. Lender
shall not be required to take any steps necessary to preserve any rights
in the Collateral against prior parties, nor to protect, preserve or
maintain any security interest given to secure the Indebtedness.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that
would materially affect Lender's interest in the Collateral or if
Granter fails to comply with any provision of this Agreement or any
Related Documents, including but not limited to Grantor's failure to
discharge or pay when due any amounts Grantor is required to discharge
or pay under this Agreement or any Related Documents, Lender on Grantor's
behalf may (but shall not be obligated to) take any action that Lender
deems appropriate, including but not limited to discharging or paying
all taxes, liens, security interests, encumbrances and other claims,
at any time levied or placed on the Collateral and paying all costs for
insuring, maintaining and preserving the Collateral. All such expenditures
incurred or paid by Lender for such purposes will then bear interest at
the rate charged under the Note from the date incurred or paid by Lender
to the date of repayment by Grantor. All such expenses will become a
part of the Indebtedness and, at Lender's option, will (A) be payable
on demand; (B) be added to the balance of the Note and be apportioned
among and be payable with any installment payments to become due during
either (1) the term of any applicable insurance policy; or (2) the
remaining term of the Note; or (C) be treated as a balloon payment
which will be due and payable at the Note's maturity. The Agreement also
will secure payment of these amounts. Such right shall be in addition
to all other rights and remedies to which Lender may be entitled upon
Default.
DEFAULT. Defaul will occur if payment in full is not made immediately
when due.
RIGHTS AND REMEDIES ON DEFAULT. If Default occurs under this Agreement,
at any time thereafter, Lender shall have all the rights of a
secured party under the New York Uniform Commercial Code. In addition
and without limitation, Lender may exercise any one or more of the
following rights and remedies:
Accelerate Indebtedness. Lender may declare the entire Indebtedness,
including any prepayment penalty which Granter would be required
to pay, immediately due and payable, without notice of any kind to
Grantor.
Assemble Collateral. Lender may require Grantor to deliver to Lender
all or any portion of the Collateral and any and all certificates
of title and other do uments relating to the Collateral. Lender may
require Grantor to assemble the Collateral and make it available to
Lender at a place to be designated by Lender. Lender also shall
have full power to enter upon the property of Grantor to take
possession of and remove the collateral. If the Collateral contains
other goods not covered by this Agreement at the time of repossession,
Grantor agrees Lender may take such other goods, provided that Lender
makes reasonable efforts to return them to Grantor after repossession.
Sell the Collateral. Lender shall have full power to sell, lease,
transfer, or otherwise deal with the Collateral or proceeds thereof in
Lender's own name or that of Grantor. Lender may sell the Collateral
at public auction or private sale. Unless the Collateral threatens
to decline speedily in value or is of a type customarily sold on a
recognized market, Lender will give Grantor, and other persons as
required by law, reasonable notice of the time and place of any public
sale, or the time after which any private sale or any other
disposition of the Collateral is to be made. However, no notice
need be provided to any person who, after Event of Default occurs,
enters into and authenticates an agreement waving that person's
right to notification of sale. The requirements of reasonable notice
shall be met if such notice is given at least ten (10) days before
the time of the sale or disposition. All expenses relating to the
disposition of the Collateral, including without limitation the
expenses of retaking, holding, insuring, preparing for sale and
selling the Collateral (including legal fees and costs), shall
become a part of the Indebtedness secured by this Agreement and payable
from the proceeds of the disposition of the Collateral, and shall
be payable on demand, with interest at the Note rate from date of
expenditure until repaid.
Appoint Receiver. Lender shall have the right to have a receiver
appointed to take possession of all or any part of the Collateral,
with the power to protect and preserve the Collateral, to operate the
Collateral preceding foreclosure or sale, and to collect the
rents from the
Collateral and apply the proceeds, over and above the cost of
the receivership, against the Indebtedness. Lender's right to the
appointment of a receiver shall exist whether or not the apparent
value of the Collateral exceeds the Indebtednessby a substantial
amount. The right to a receiver shall be given to Lender
regardless of the solvency of Grantor and without any requirement
to give notice to Grantor.
Collect Revenues, Apply Accounts. Lender, either itself or through
a receiver, may collect the payments, rents, income, and revenues from
the Collateral. Lender may at any time in Lender's discretion transfer
any Collateral into Lender's own name or that of Lender's nominee
and receive the payments, rents, income, and revenues therefrom and
hold the same as security for the Indebtednessor apply it to
payment of the Indebtedness in such order of preferenceas Lender may
determine. Insofar as the Collateral consists of accounts, general
intangibles, insurance policies, instruments, chattel paper, choses
in action, or similar property, Lender may demand, collect, receipt
for, settle, compromise, adjust, sue for, foreclose, or realize on
the Collateral as Lender may determine, whether or not Indebtedness
or Collateral is then due. For these purposes, Lender may, on behalf
of and in the name of Grantor, receive, open and dispose of
mail addressed to Grantor; change any address to which mail and
payments are to be sent; and endorse notes, checks, drafts, money
orders, documents of title, instruments and items pertaining to
payment, shipment, or storage of any Collateral. To facilitate
collection, Lender may notify ac ount debtors and obligors on
any Collateralto makepaymentsdirectly to Lender.
Obtain Deficiency. If Lender chooses to sell any or all of the
Collateral, Lender may obtain a judgment against Grantor for any
deficiency remaining on the Indebtedness due to Lender after
application of all amounts received from the exercise of the rights
provided in this Agreement. Grantor shall be liable for a
deficiency even if the transaction described in this subsection
is a sale of accounts or chattel paper.
Other Rights and Remedies. Lender shall have all the rights and
remedies of a secured creditor under the provisions of the Uniform
Commercial Code, as may be amended from time to time. In addition,
Lender shall have and may exercise any or all other rights and
remedies it may have available at law, in equity, or otherwise.
Election of Remedies. Except as may be prohibited by applicable
law, all of Lender's rights and remedies, whether evidenced by
this Agreement, the Related Documents, or by any other writing,
shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to
take action to perform an obligation of Grantor under this
Agreement, after Grantor's failure to perform, shall not affect
Lender's right to declare a default and exercise its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions
are a part of this Agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties
as to the matters set forth in this Agreement. No alteration of or
amendment to this Agreement shall be effective unless given in
writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.
Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all
of Lender's costs and expenses, including Lender's reasonable
attorneys' fees and Lender's legal expenses, incurred in connection
with the enforcement of this Agreement. Lender may hire or pay
someone else to help enforce this Agreement, and Grantor shall pay
the costs and expenses of such enforcement. Costs and expenses
include Lender's reasonable attorneys' fees and 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.
Grantor also shall pay all court costs and such additional fees
as may be directed by the court.
Caption Headings. Caption headings in this Agreementare for
convenience purposes only and are not to be used to interpret
or define the provisions of this Agreement.
Governing Law. With respect to procedural matters related to the
perfection and enforcement of Lender's rights against the Collateral,
this Agreement will be governed by federal law applicable to Lender
and to the extent not preempted by federal law, the laws of the
State of New York. In all other respects, this Agreement will be
governed by federal law applicable to Lender and, to the extent
not preempted by federal law, we laws of the Commonwealth of
Pennsylvania without regard to its conflicts of law provisions.
However, if there ever is a question about whether any provision
of this Agreement is valid or enforceable, the provision that
is questioned will be governed by whichever state or federal law
would find the provision to be valid and enforceable. The loan
transaction that is evidenced by the Note and this Agreement has
been applied for, considered, approved and made, and all necessary
loan documents have been accepted by Lender in the Commonwealth of
Pennsylvania.
Choice of Venue. If there is a lawsuit, Grantor agrees upon
Lender's request to submit to the jurisdiction of the courts of
Suffolk County, State of New York.
No Waiver by Lender. Lender shall not be deemed to have waived
any rights under this Agreement unless such waiver is given in writing
and signed by Lender. No delay or omission on the part of Lender
in exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Agreement
shall not prejudice or constitute a waiver of Lender's right otherwise
to demand strict compliance with that provision or any other provision
of this Agreement. No prior waiver by Lender, nor any course of
dealing between Lender and Grantor, shall constitute a waiver of any
of Lender's rights or of any of Grantor's obligations as to any future
transactions. Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lenderin any instance
shall not constitute continuing consent to subsequent instances where
such consent is required and in all cases such consent may be granted
or withheld in the sole discretion of Lender.
Notices. Any notice required to be given under this Agreement shall
be given in writing, and shall be effective when actually delivered,
when actually received by telefacsimile (unless otherwise required by
law), when deposited with a nationally recognized overnight courier,
or, if mailed, when deposited in the United States mail, as first
class, certified or registered mail postage prepaid, directed to the
addresses shown near the beginning of this Agreement. Any party may
change its address for notices under this Agreement by giving formal
written notice to the other parties, specifying that the purpose of
the notice is to change the party's address. For notice purposes,
Grantor agrees to keep Lender informed at all times of Grantor's current
address. Unless otherwise provided or required by law, if there is
more than one Grantor, any notice given by Lender to any Grantor is
deemed to be notice given to all Grantors.
Power of Attorney. Grantor hereby appoints Lender as Grantor's
irrevocable attorney-in-fact for the purpose of executing any documents
necessary to perfect, amend, or to continue the security interest
granted in this Agreement or to demand termination of filings of other
secured parties. Lender may at any time, and without further
authorization from Grantor, file a carbon, photographic or other
reproduction of any financijng statement or of this Agreement for use
as a financing statement. Grantor will reimburse Lender for all
expenses for the perfection and the continuation of the perfection of
Lender's security interest in the Collateral. Grantor authorizes
Lender to file a financing statement covering the Collateral without
Grantor's signature pursuant to Uniform Commercial Code Section
9-402(2)(e).
Severability. If a court of competent jurisdiction finds any
provision of this Agreement to be illegal, invalid, or unenforceable
as to any circumstance that finding shall not make the offending
provision illegal, invalid, or unenforceableas to any other
circumstance. If feasible,
the offending provision shall be considered modified so that it becomes
legal, valid and enforceable. If the offending provision cannot be so
modified, it shall be considered deleted from this Agreement. Unless
otherwise required by law, the illegality, invalidity, or unenforceability
of any provision of this Agreement shall not affect the legality, validity
or enforceability of any other provision of this Agreement.
Successors and Assigns. Subject to any limitations stated in this Agreement
on transfer of Grantor's interest, this Agreement shall be binding upon
and inure to the benefit of the parties, their successors and assigns.
If ownership of the Collateral becomes vested in a person other than Grantor,
Lender, without notice to Grantor, may deal with Grantor's successors with
reference to this Agreement and the Indebtedness by way of forbearance or
extension without releasing Grantor from the obligations of this Agreement
or liability under the Indebtedness.
Survival of Representations and Warranties. All representations, warranties,
and agreements made by Grantor in this Agreement shall survive the execution
and delivery of this Agreement, shall be continuing in nature, and shall
remain in full force and effect until such time as Grantor's Indebtedness
shall be paid in full.
Time is of the Essence. Time is of the essence in the performance of this
Agreement.
Waive Jury. All parties to this Agreement hereb ywaive the right to any
jury trial in any action, proceeding, or counterclaim brought by any
party against any other party.
DEFINITIONS. The following capitalized words and terms shall have the
following meanings when used in this Agreement. Unless specifically
statedto the contrary, all references to dollar amounts shall mean amounts
in lawful money of the United States of America. Words and terms
usedin the singular shall include the plural, and the plural shall include
the singular, as the context may require. Words and terms not otherwise
definedin this Agreement shall have the meanings attributed to such terms
in the Uniform Commercial Code:
Agreement. The word "Agreement" means this Commercial Security Agreement,
as this Commercial Security Agreement may be amended or modified from time
to time, together with all exhibits and schedules attached to this
Commercial Security Agreement from time to time.
Borrower. The word "Borrower" means Scientific Industries, Inc. and
includes all co-signers and co-makers signing the Note and all their
successors and assigns.
Collateral. The word "Collateral" means all of Grantor's right, title
and interest in and to all the Collateral as described in the Collateral
Description section of this Agreement.
Default. The word "Default" means the Default set forth in this Agreement
in the section titled "Default".
Environmenta Laws. The words "EnvironmentalLaws" mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation
the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801,
et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901,
et seq., or other applicable state or federal laws, rules, or regulations
adopted pursuant thereto.
Event of Default. The words "Event of Default" mean any of the events of
default set forth in this Agreement in the default section of this
Agreement.
Grantor. The word "Grantor" means Scientific Industries, Inc..
Hazardous Substances. The words "Hazardous Substances" mean materials that,
because of their quantity, concentration or physical, chemical or infectious
characteristics, may cause or pose a present or potential hazard to
human health or the environment when improperly used, treated, stored,
disposed of, generated, manufactured, transported or otherwise handled. The
words "Hazardous Substances" are used in their very broadest sense and include
without limitation any and all hazardousor toxic substances, materials or
waste as defined by or listed under the Environmental Laws. The term "Hazardous
Substances" also includes, without limitation, petroleum and petroleum
by-products or any fraction thereof and asbestos.
Indebtedness. The word "Indebtedness" means and includes any and all of
Grantor's liabilities, obligations, debts, and indebtedness to Lender,
now existing or hereinafter incurred or created, including, without
limitation, all loans, advances, future advances, interest, costs, debts,
overdraft indebtedness, credit card indebtedness, leaseobligations, other
obligations, and liabilities of Grantor, or any of them, and any present or
future judgments against Grantor, or any of them; and whether any such
indebtedness is voluntarily or involuntarily incurred, due or not due,
absolute or contingent, liquidated or unliquidated, determined or
undetermined; whether Grantor may be liable individually or jointly with
others, or primarily or secondarily, or as guarantor or surety;
whether recovery on the indebtedness may be or may become barred or
unenforceable against Grantor for any reason whatsoever; and whether
the indebtedness arises from transactions which may be voidable on
account of infancy,insanity, ultra vires or otherwise..
Lender. The word "Lender" means First National Bank of Pennsylvania, its
successorsand assigns.
Note. Thew word "Note" means the Note executed by Scientific Industries, Inc.;
in the principal amount of $300,000.00 dated June 26, 2015 together with all
renewals of, extensions of, modifications of, refinancing of, consolidations of,
and substitutions for the note or credit agreement.
Property. The word "Property" means all of Grantor's right, title and
interest in and to all the Property as described in the "Collateral
Description" section of this Agreement.
Related Documents. The words "Related Documents" mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the Indebtedness.
GRANTOR HAS READ AND UNDERSTOODALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENTAND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JULY 5, 2016.
GRANTOR:
SCIENTIFIC INDUSTRIES, INC.
By: /s/ Helena R. Santos
__________________________________________________________________
Helena R. Santos, President and CEO of Scientific Industries, Inc.
AGREEMENT TO PROVIDE INSURANCE
Principal Loan Date Maturity Loan No. Call/Coll
$300,000 07-05-2016 45668585 150
____________________________________________________________________
Account Officer Initials
2705
____________________________________________________________________
References in the boxes above are for Lender's use only and do not
limit the applicability of this document to any particular loan or
item. Any item above containing******* has been omitted due to the
text length limitations.
____________________________________________________________________
Grantor: Sciertific Industries,Inc.
80 Orville Drive, Suite 102
Bohemia, NY 11716
Lender: First National Bank of
Pennsylvania
BBU Pittsburgh
ONE FNB BLVD
HERMITAGE,PA 16148
INSURANCE REQUIREMENTS. Grantor, Scientific Industries, Inc.
("Grantor"), understands that insurance coverage is required in
connection with the extending of a loan or the providing of other
financial accommodations to Granter by Lender. These requirements
are set forth in the security documents for the loan. The
following minimum insurance coverages must be provided on the
following described collateral (the Collateral)
Collateral: All Inventory and Equipment.
Type: All risks, including fire, theft and liability.
Amount: Full Insurable Value.
Basis: Replacement value.
Endorsements: Lender loss payable clause with stipulation
that coverage will not be cancelled or diminished without
a minimum of 10 days prior written notice to lender.
INSURANCE COMPANY. Grantor mayobtain insurance from any insurance
company Grantor may choose that is reasonably acceptable to Lender.
Grantor understands that credit may not be denied solely because
insurance was not purchased through Lender.
INSURANCE MAILING ADDRESS. All documents and other materials
relating to insurance for this loan should be mailed, delivered
or directed to the following address:
FIRST NATIONAL BANK OF PENNSYLVANIA
PO BOX 703809
DALLAS,TX 75370-3809
FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Lender,
on the latest delivery date stated above, proof of the required
insurance as provided above, with an effective date of July 5, 2016,
or earlier. Grantor acknowledges and agrees that if Grantor fails to
provide any required insurance or fails to continue such insurance
in force, Lender may do so at Grantor's expense as provided in the
applicable security document. The cost of any such insurance, at
the option of Lender, shall be added to the indebtedness as provided
in the security document.
GRANTOR ACKNOWLEDGES THAT IF LENDER SO PURCHASES ANY SUCH INSURANCE,
THE INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST PHYSICAL DAMAGE
TO THE COLLATERAL, UP TO AN AMOUNT EQUAL TO THE LESSER OF (1) THE
UNPAID BALANCE OF THE DEBT, EXCLUDING ANY UNEARNED FINANCE CHARGES,
OR (2) THE VALUE OF THE COLLATERAL; HOWEVER, GRANTOR'S EQUITY IN
THE COLLATERAL MAY NOT BE INSURED. IN ADDITION, THE INSURANCE
MAY NOT PROVIDE ANY PUBLIC LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION
AND MAY NOT MEET THE REQUIREMENTS OF ANY FINANCIAL RESPONSIBILITY
LAWS.
AUTHORIZATION. For purposes of insurance coverage on the Collateral,
Grantor authorizes Lender to provide to any person (including any
insurance agent or company) all information Lender deems appropriate,
whether regarding the Collateral, the loan or other financial
accommodations, or both.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT
TO PROVIDE INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED
JULY 5, 2016.
THIS AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS
AGREEMENT IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED
INSTRUMENT ACCORDING TO LAW.
GRANTOR:
SCIENTIFIC INDUSTRIES, INC.
By: /s/ Helena R. Santos
__________________________________________________________________(Seal)
Helena R. Santos, President and CEO of Scientific Industries, Inc.
