NOTE PURCHASE AGREEMENT
This Note Purchase Agreement, dated as of May 7, 2015
(this "Agreement"), is entered into by and between Scientific
Industries, Inc., a Delaware corporation (the "Company"), and
Xxxxx Xxxxx (the "Lender").
RECITALS
A. The Company requires certain funds in order to fulfill
certain existing orders.
B. The Lender wishes to advance a loan to the Company
in the principal amount set forth on the signature page hereto in
order to meet such need by the Company.
NOW THEREFORE, in consideration of the foregoing, and the
representations, warranties, and conditions set forth below, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. The Note.
(a) Issuance of Note. At the Closing (as defined below),
the Company agrees to issue and sell to the Lender, and, subject to
all of the terms and conditions hereof, the Lender agrees to
purchase a promissory note in the form of Exhibit A hereto (the "Note").
(b) Closing. The closing (the "Closing") of the purchase
of the Note shall take place at the offices of the Company on such date
(the "Closing Date") as the Company and the Lender agree upon orally or
in writing. At the Closing, the Lender shall deliver to the Company
the principal amount of the Note being purchased set forth on the
signature page hereto and (iii) the Company shall deliver the executed
Note to the Lender in return for the principal amount paid to
the Company.
2. Repayment of the Note; Prepayment. The Note, together
with all accrued and unpaid interest as provided therein, shall be due
and payable on May 8, 2016. Notwithstanding the foregoing, the
Company may prepay the Note, in full or in part, without premium or
penalty. Any such prepayment shall be applied first to accrued and
unpaid interest and second to the outstanding principal amount of
the Note.
3. Representations and Warranties of the Company. In
order to induce the Lender to enter into this Agreement and consummate
the transactions contemplated hereby, the Company hereby makes to the
Lender the following representations and warranties.
(a) Organization, Good Standing and Qualification. The
Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Company has the
requisite corporate power and authority to execute and deliver
this Agreement and the Note (collectively, the "Transaction
Documents"), to issue and sell the Note, and to perform its obligations
pursuant to the Transaction Documents.
(b) Authorization. All corporate action on the part of the
Company and its directors, officers and stockholders necessary for the
authorization, execution and delivery of the Transaction Documents by
the Company, the authorization, sale, issuance and delivery of the Note,
and the performance of all of the Company?s obligations under the
Transaction Documents has been taken or will be taken prior to the
Closing. The Transaction Documents, when executed and delivered by
the Company, shall constitute valid and binding obligations of
the Company, enforceable in accordance with their terms.
(c) Approvals. No consent, approval or authorization
of or designation, declaration or filing with any third party,
including any governmental authority on the part of the Company
is required in connection with the valid execution and delivery
of the Transaction Documents, or the offer, sale or issuance of
the Note, or the consummation of any other transaction
contemplated hereby.
4. Representations and Warranties of Lender. The
Lender represents and warrants to the Company upon the
acquisition of the Note as follows:
(a) Binding Obligation. The Lender has full legal
capacity, power and authority to execute and deliver this
Agreement and to perform the obligations of the Lender
hereunder. This Agreement is a valid and binding obligation
of the Lender, enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency or other laws of
general application relating to or affecting the enforcement
of creditors' rights generally and general principles of
equity.
(b) Securities Law Compliance. Such Lender has
been advised that the Note has not been registered under the
Securities Act of 1933, as amended (the "Securities Act") or
any state securities laws and, therefore, cannot be resold
unless they are registered under the Securities Act and
applicable state securities laws or unless an exemption
from such registration requirements is available. Such
Lender is aware that the Company is under no obligation to
effect any such registration with respect to the Note or
to file for or comply with any exemption from registration.
The Lender has not been formed solely for the purpose of
making this investment and is purchasing the Note for its
own account for investment, not as a nominee or agent, and
not with a view to, or for resale in connection with, the
distribution thereof. The Lender has such knowledge and
experience in financial and business matters that such
Lender is capable of evaluating the merits and risks of
such investment, is able to incur a complete loss of such
investment and is able to bear the economic risk of such
investment for an indefinite period of time. Such Lender
is an accredited investor as such term is defined in
Rule 501 of Regulation D under the Securities Act.
(c) Restricted Securities. Such Lender
understands that the Securities such Lender is and will
be purchasing are characterized as "restricted securities"
under the federal securities laws inasmuch as they are
being acquired from the Company in a transaction not
involving a public offering and that under such laws
and applicable regulations such securities
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may be resold without registration under the Securities Act,
only in certain limited circumstances.
(d) Legends. Such Lender understands that
the certificates evidencing the Securities may bear the
following or other relevant legends:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS THEY ARE REGISTERED UNDER
THE ACT AND ALL APPLICABLE STATE SECURITIES LAWS
OR ARE IN COMPLIANCE WITH AN EXEMPTION
THEREFROM."
5. Miscellaneous.
(a) Waivers and Amendments. Any provision
of this Agreement or the Note, may be amended, waived
or modified only upon the written consent of the
Company and the Lender.
(b) Governing Law. This Agreement and all
actions arising out of or in connection with this
Agreement shall be governed by and construed in
accordance with the laws of the State of New York,
without regard to the conflicts of law provisions of
the State of New York.
(c) Survival. The representations,
warranties, covenants and agreements made herein shall
survive the execution and delivery of this Agreement.
(d) Assignment. The rights, interests or
obligations hereunder may not be transferred or assigned,
by operation of law or otherwise, in whole or in part,
by the Company without the prior written consent of the
Lenders. The Note shall be non-negotiable
(e) Entire Agreement. The Transaction
Documents constitute and contain the entire agreement
between the Company and Lender and supersede any and
all prior agreements, negotiations, correspondence,
understandings and communications among the parties,
whether written or oral, respecting the subject matter
hereof.
(f) Expenses. Each of the parties will
bear its own expenses in connection with the
negotiation and the consummation of the transactions
contemplated by this Agreement.
(g) Severability of this Agreement. If
any provision of this Agreement shall be judicially
determined to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the
remaining provisions shall not in any way be
affected or impaired thereby.
(h) Counterparts. This Agreement may
be executed in one or more counterparts, each of
which will be deemed an original, but all of which
together will constitute
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one and the same agreement. This Agreement may be
executed and delivered by facsimile or .PDF and upon
such delivery each facsimile or .PDF signature will
be deemed to have the same effect as if the original
signature had been delivered to each other party.
(signatures appear on the following page)
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first written above.
COMPANY:
SCIENTIFIC INDUSTRIES, INC.
a Delaware corporation
By:_________________________________
Name:
Title:
LENDER:
____________________________________
XXXXX XXXXX
Address:
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Principal Amount
of Note Purchased: $100,000
Exhibit A
FORM OF NOTE
(see attached)
