SECURITY AGREEMENT
OWNER OF
COLLATERAL: Scientific Industries, Inc.
70 Orville Drive, Bohemia, NY 11716-2547
DESCRIPTION OF COLLATERAL: The undersigned borrower
("Borrower")
hereby grants to Capital One, N. A. (the "Bank") a security
interest
(see Right to Repossess Section below for explanation of
"security
interest") in the following described collateral
("Collateral"):
All Assets of the Borrower perfected through UCC-1 lien
filings.
OBLIGATIONS: The obligations that this agreement is to secure are:
1. The amount of
$500,000.00, which amount represents a loan made
on even date herewith by the Bank to Borrower, as evidenced by
a
certain note dated as of even date herewith executed by
Borrower
promising, among other things, to pay the Bank, together with
interest due and extensions and renewals thereof, plus all
costs
of collection in the event of default, including attorney's
fees.
2. Any and all other liabilities of Borrower to the Bank under
this
agreement.
3. Any and all other liabilities of Borrower to the Bank,
direct
or indirect, absolute or contingent, present or future, due or
to
become due. Borrower
agrees to promptly pay all obligations
when due.
STATEMENT OF OWNER:
Borrower states and promises that:
1. The Collateral is
bought or used primarily for: [ ]Personal,
family of household purposes; [ ]Farming operations;
[ X ]Business, and, if checked here, [ ]is being acquired with
the proceeds of a loan signed at the same time as this
agreement
and the Bank may pay those proceeds directly to the seller of
the Collateral.
2. The Collateral is
or is to be located at Borrower's address
shown above (or at____________________).
(Address if Collateral is to be kept elsewhere)
3. The Collateral will
not be attached to real estate unless
indicated here:
______________________________________________
(Description of real estate by Street, Number,
______________________________________________
(Town or City, County & State)
______________________________________________
(Name and address of owner of real estate)
If the Collateral is to be attached to real estate and if the Bank
requests
it, Borrower agrees to furnish the Bank with statements signed and
notarized by everybody who has an interest in that real estate
stating that
they claim no interest in the Collateral. Borrower gives the Bank
permission
to file a financing statement (notice of the Bank's security
interest filed
for public record) covering the Bank's security interest without
Borrower's
signature on it. Upon request of the Bank, Borrower will pay all
filing fees
to protect the Bank's security interest on the Collateral. The Bank
may charge
those fees to any account Borrower has with the Bank.
INSURANCE REQUIREMENTS: Borrower will keep the Collateral insured
against
fire, including so-called extended coverage, theft and if the
Collateral
is a motor vehicle, Borrower will also maintain $500 deductible
collision
insurance. The limits and terms of the coverage and the insurance
company
must be satisfactory to the Bank. If the Bank requires additional
insurance
on the Collateral, Borrower will obtain and maintain the additional
coverage.
The Bank shall be named as the
