SUBORDINATED TERM LOAN NOTE
West Berlin, New Jersey
September 30, 2008
$2,000,000
FOR VALUE RECEIVED, the undersigned, Dynasil Corporation of
America, a
Delaware corporation having an address at 385 Cooper Road, West
Berlin,
NJ 08091 ("Borrower"), promises to pay to the order of RMD
Instruments,
LLC, a Massachusetts limited liability company having an address at
44
Hunt Street Watertown, MA 02472 ("Lender"), the principal sum of
two
million Dollars ($2,000,000) (the "Loan") or so much thereof as may
be
outstanding from time to time on or before March 31, 2009 (the
"Maturity Date"), together with interest on the amount thereof
outstanding from time to time, from the date hereof until fully
paid at
the fixed interest rate of eight percent (8%) per annum. All
payments
under this Subordinated Term Loan Note shall be made at the
Lender's
office set forth above, unless otherwise agreed in writing by
Borrower
and Lender.
Interest shall accrue on the outstanding principal balance of
this
Subordinated Term Loan Note and be calculated as set forth in
Section 1
of this Subordinated Term Loan Note. All interest, late fees, and
all
other fees and charges payable under this Subordinated Term Loan
Note
shall continue to be due and payable at such rates for so long as
any
balance remains outstanding under this Subordinated Term Loan
Note,
whether or not the Loan has matured or been accelerated. This
provision
shall survive and apply following any default, maturity,
acceleration,
recovery of judgment, judgment of foreclosure, bankruptcy,
insolvency
proceedings of any kind, or the happening of any other event or
occurrence, similar or dissimilar.
1. Payments. The Note shall bear interest and be payable in
accordance
with the terms and conditions, at the times, and in the manner
set
forth herein. Commencing on the first day of the first full month
after
the Closing Date and continuing on the first day of each
succeeding
calendar month thereafter, to and including the first day of
December,
Borrower shall pay Lender monthly installments of interest only on
the
total outstanding principal balance beginning on the date of the
first
advance. On the Maturity Date, Borrower shall pay Lender the
outstanding principal balance of this Subordinated Term Loan
Note
together with all accrued interest and all other sums outstanding
or
due and payable under this Subordinated Term Loan Note. All
computations of interest shall be made on the basis of a three
hundred
sixty five (365) day year and the actual number of days elapsed. If
the
entire amount of any required principal and/or interest is not paid
in
full within ten (10) days after the same is due, Borrower shall pay
to
Lender a late fee equal to five percent (5%) of the required
payment
and the interest rate on any late amounts shall increase to
15%.
Borrower may prepay all or any part of the unpaid principal balance
at
any time without premium or penalty.
2. Events of Default. The occurrence and continuance of any of
the
following events or conditions shall constitute an "Event of
Default"
hereunder: (a) failure by Borrower to pay Lender any sums on the
date
such sums are due and payable, whether for principal, interest,
fees,
costs, charges, or otherwise, and whether upon stated maturity,
acceleration, or otherwise, due under this Subordinated Term Loan
Note;
(b) any action of Borrower in connection with or in contemplation
of
its dissolution or liquidation; (c) the entry of any final judgment
or
attachment or seizure of, or levy upon, any property of Borrower,
and
not covered by insurance, removed, or bonded within sixty (60)
days
after such attachment, seizure, or levy; (d) institution of any
proceedings by or against Borrower under any bankruptcy,
insolvency,
debt adjustment, debtor rehabilitation, or similar statute,
whether
state or federal, and such proceedings shall have continued
undischarged and unstayed for ninety (90) days after the
commencement
thereof, or (e) the admission in writing by Borrower of any
inability
to pay Borrower's, debts generally as they become due, the
appointment
of a judicial officer or representative for Borrower or for
Borrower's
property, including, without limitation, a receiver, trustee,
conservator, liquidator, sequestrator, custodian, or other similar
or
dissimilar judicial officer or representative.
3. Remedies. After the occurrence of any one or more Events of
Default,
or at any time thereafter, if such Event of Default is continuing
ten
(10) days after written notice from Lender that an Event of Default
has
occurred and has not been waived by Lender and if the Borrower has
not
cured or commenced commercially reasonable efforts to cure such
Event
of Default, the Lender's obligations to make any further advances
to
the Borrower shall immediately and automatically terminate; the
outstanding principal balance hereunder, all interest and fees
accrued
and unpaid thereon, and all other amounts and obligations payable
by
Borrower hereunder may, at the option of Lender, be accelerated
and
become due and payable in full immediately, all without
protest,
present
