CAPITAL ONE, N.A.
PROMISSORY NOTE
BORROWER: Scientific Industries, Inc.
PRINCIPAL: $500,000.00
DATE: 10/30/08
PROMISE TO PAY: The undersigned, jointly and severally if more than
one
signer, does hereby promise to pay to the order of CAPITAL ONE,
N.A.
(the "Bank") at its offices at 275 Broadhollow Rd., Melville,
New
York, or at any of its branches, the sum of Five Hundred Thousand
and
00/100 ($500,000.00) DOLLARS or the aggregate unpaid principal
amount
of all advances made to the undersigned by the Bank, whichever is
less,
plus interest thereon, in the manner set below. Interest will begin
to
accrue on the date funds are actually disbursed.
RATE AND PAYMENT: Interest only on the unpaid principal balance
hereof
at the rate of the Bank's Prime Rate per annum payable on December
1,
2008 and on the 1st day of each month thereafter until November 1, 2009
when all unpaid principal and interest shall be due in full.
All payments shall be made by automatic debit from an account
maintained at
the Bank (Account #6924013102) in which
Borrower
shall maintain balances sufficient to pay the monthly payments.
Such debit will occur on each monthly payment due date, as
specified
above. If a monthly
payment due date falls on a Saturday, Sunday or
holiday, the next business day will become the monthly payment due
date.
Payments shall be applied first to interest on unpaid principal
balances
to the monthly payment due date or the date payment is received by
the
Bank, whichever is later, and then to reduction of principal.
If the
interest rate is based on the Bank's announced Prime Rate, the
interest
rate shall change when the Prime Rate changes and nothing herein
shall
prevent the Bank from loaning money at less than Prime on such
terms
and conditions as it deems advisable. Interest shall be calculated
on
a 360-day year and actual number of days elapsed.
GRID NOTE: The Borrower may borrow, repay in whole or in part,
and
reborrow on a revolving basis amounts up to $500,000.00.
However,
the Bank reserves the right to make or decline any request for
an
advance in its sole discretion and may condition the availability
of
an advance upon, among other things, the maintenance of a
satisfactory
financial condition.
Borrower authorizes the Bank to keep a record of
the amounts and dates of all advances and repayments hereunder,
which
record shall, in the absence of manifest error, be conclusive as to
the
outstanding principal amount due hereunder; provided, however, that
the
failure to record any advance or repayment shall not limit or
otherwise
affect the obligation of Borrower under this Note.
PREPAYMENT: Prepayment in whole or in part may be made at any
time
without penalty. Any prepayment will be applied in inverse order
of
maturity and will not defer the payment schedule.
RIGHT OF OFFSET: If any payment is not made on time, or if the
entire
balance becomes due and payable and is not paid, all or part of
the
amount due may be offset out of any account or other property which
the
undersigned has at the Bank or any affiliate of the Bank without
prior
notice or demand. This
provision is in addition to and not in limitation
of any right of common law or by statute.
DEFAULT INTEREST RATE: The unpaid principal sum due under this Note
shall
bear interest at a rate equal to five (5%) per centum above the
Rate set
forth above on and after the occurrence of any event of default and
until
the entire principal sum hereof has been fully paid, both before
and after
the entry of any judgment with respect to such event, but in no
event shall
the rate either before or after the occurrence of an event of
default
exceed the highest rate of interest, if any, permitted under
applicable
New York or Federal Law.
LATE CHARGES: Undersigned will pay a charge of 4% of the amount of
any
payment which is not made within 10 days of when due, or, if
applicable,
which cannot be debited from its account due to insufficient
balance on
the due date.
SECURITY: A security
interest in and assignment and pledge of all monies,
