EXHIBIT 10.3

[***] Text omitted pursuant to Item

601(a)(6) of Regulation S-K            

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TERM NOTE

U.S. Small Business Administration Paycheck Protection Program

 

 

 

SBA Loan #

14994971-02

SBA Loan Name

inTEST EMS

Date

4/14/2020

Loan Amount

$416,400.00

Interest Rate

Fixed at 1.00% per year

Borrower

inTEST EMS LLC

Lender

M&T Bank 

One M& T Plaza (Attn: Office of General Counsel), Buffalo, New York 14203

 

 

1.

PROMISE TO PAY:

         

In return for the Loan, Borrower promises to pay to the order of Lender the
amount of

                  Four Hundred Sixteen Thousand Four Hundred Dollars and 00/100 
                      Dollars,

 

interest on the unpaid principal balance, and all other amounts, fees, and
costs, required by this Note.

       

2.

DEFINITIONS:

         

“Loan” means the loan evidenced by this Note.

 

“Loan Documents” means the documents related to this loan signed by Borrower,
including, but not limited to, the Paycheck Protection Program Application.

 

“Note” means this Term Note executed by Borrower in favor of Lender of even date
herewith.

 

“SBA” means the Small Business Administration, an Agency of the United States of
America.

 

“Paycheck Protection Program” means the Paycheck Protection Program under the
Coronavirus Aid, Relief, and Economic Security Act.

 

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3.

PAYMENT TERMS:

     

Borrower must make all payments at the place Lender designates. The payment
terms for this Note are:

         

Maturity: This is a term loan that will mature in 2 years (24 months) from the
date of this Note (the “Maturity Date”). The interest rate is fixed at 1.00% per
year. The interest rate may not be changed during the life of the loan unless
changed in accordance with H.R. 748 Coronavirus Aid, Relief, and Economic
Security Act or “CARES Act”.

     

The term of this loan is 24 months. During the first 6 months of the loan term,
(referred to herein as the “Deferral Period”), required payments of principal
and interest shall be deferred. During the Deferral Period, interest on the
outstanding principal balance will continue to accrue. After the Deferral
Period, beginning in the seventh month of the loan term, this Note shall be
repaid in installments comprised of principal and interest based upon an
18-month amortization period. Borrower must pay principal and interest payments
of $23,316.90 every month, beginning seven months from the date of this Note;
payments must be made on the 14th calendar day in the months they are due.

     

The amortization period for this loan is 18 months, meaning that this is the
approximate number of months that would be needed to repay the principal amount
in full, based on the installment amount and payment frequency stated above.
Lender must adjust the payment amount at least annually as needed to amortize
principal over the remaining term of the Note. Principal and interest payment
amounts are subject to change, in accordance with any loan forgiveness or other
adjustments made in connection with the Paycheck Protection Program. Absent
manifest error, the Lender’s determination of any amount due in connection
herewith shall be conclusive.

     

Interest shall be calculated on the basis of actual number of days elapsed in
each year, from and including the date the proceeds of this Note are disbursed
to, but not including, the date all amounts hereunder are paid in full. Interest
will continue to accrue on the actual principal balance outstanding until the
Loan is paid in full.

     

Lender will apply each installment payment first to pay interest accrued to the
day Lender receives the payment, then to bring principal current, and will apply
any remaining balance to reduce principal.

     

Loan Prepayment: Borrower may prepay this Note at any time without notice or
penalty.

     

All remaining principal and accrued interest, and any other amounts due pursuant
to this Note, shall be due and payable on the Maturity Date.

     

Preauthorized Transfers from Deposit Account. Borrower hereby authorizes Lender
to debit Borrower’s deposit account #[***] with M&T Bank automatically for any
amount which becomes due under this Note.

     

Default Rate. Upon the occurrence of a default, but at all times subject to the
restrictions and requirements of the Paycheck Protection Program and all other
applicable laws, Lender, in Lender’s sole discretion and without notice or
demand, may raise the rate of interest accruing on the principal balance
outstanding under this Note by the lesser of (i) 5% above the rate otherwise
applicable or (ii) such amount as permitted under the Paycheck Protection
Program or otherwise under applicable law, independent of whether the Lender
elects to accelerate the principal balance under this Note. Interest shall
continue to accrue at the default rate set forth in this Note on any judgment
Lender may obtain against Borrower, to the extent permitted under the Paycheck
Protection Program or otherwise under applicable law.

   

 

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4.

DEFAULT:

     

Borrower is in default under this Note if Borrower does not make a payment when
due under this Note, or if Borrower:

 

A.

Fails to do anything required by this Note and other Loan Documents;

 

B.

Defaults on any other loan, liability, covenant, or agreement with Lender;

 

C.

Does not disclose, or anyone acting on their behalf does not disclose, any
material fact to Lender or SBA;

 

D.

Makes, or anyone acting on their behalf makes, a materially false or misleading
representation to Lender or SBA;

 

E.

Defaults on any loan or agreement with another creditor, if Lender believes the
default may materially affect Borrower’s ability to pay this Note;

 

F.

Fails to pay any taxes when due;

 

G.

Becomes the subject of a proceeding under any bankruptcy or insolvency law;

 

H.

Has a receiver or liquidator appointed for any part of their business or
property;

 

I.

Makes an assignment for the benefit of creditors;

 

J.

Has any adverse change in financial condition or business operation that Lender
believes may materially affect Borrower’s ability to pay or perform any
obligation of Borrower to Lender;

 

K.

Reorganizes, merges, consolidates, or otherwise changes ownership or business
structure without Lender’s prior written consent; or

 

L.

Becomes the subject of a civil or criminal action that Lender believes may
materially affect Borrower’s ability to pay this Note.

           

5.

LENDER’S RIGHTS IF THERE IS A DEFAULT:

     

Without notice or demand and without giving up any of its rights, Lender may:

 

A.

Require immediate payment of all amounts owing under this Note;

 

B.

Collect all amounts owing from any Borrower; or

 

C.

File suit and obtain judgment.

           

6.

LENDER’S GENERAL POWERS:

     

Without notice and without Borrower’s consent, Lender may:

 

A.

Incur expenses to collect amounts due under this Note, enforce the terms of this
Note or any other Loan Document. Among other things, the expenses may include
payments for property taxes, prior liens, insurance, appraisals, environmental
remediation costs, and reasonable attorney’s fees and costs. If Lender incurs
such expenses, it may demand immediate repayment from Borrower or add the
expenses to the principal balance. Borrower understands and agrees that upon an
event of default, Lender may incur costs of collection, including attorneys’
fees, after the date of any judgment that Lender may obtain against Borrower.
Borrower agrees to pay all of such costs and fees. Borrower further agrees that
Borrower’s obligation to pay such costs and fees, which are incurred by Lender
after the date of any judgment obtained by Lender, shall survive the entry of,
and shall not be merged into, any such judgment;

 

B.

Release anyone obligated to pay this Note; and

 

C.

Take any action necessary to collect amounts owing on this Note.

 

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7.

WHEN FEDERAL LAW APPLIES:

     

When SBA is the holder, this Note will be interpreted and enforced under federal
law, including SBA regulations. Lender or SBA may use state or local procedures
for filing papers, recording documents, giving notice, foreclosing liens, and
other purposes. By using such procedures, SBA does not waive any federal
immunity from state or local control, penalty, tax, or liability. As to this
Note, Borrower may not claim or assert against SBA any local or state law to
deny any obligation, defeat any claim of SBA, or preempt federal law.

           

8

SUCCESSORS AND ASSIGNS:

     

Under this Note, Borrower includes its successors, and Lender includes its
successors and assigns.

           

9.

GENERAL PROVISIONS:

 

A.

Borrower waives all suretyship defenses.

 

B.

Borrower must sign all documents necessary at any time to comply with the Loan
Documents.

 

C.

Lender may exercise any of its rights separately or together, as many times and
in any order it chooses. Lender may delay or forgo enforcing any of its rights
without giving up any of them.

 

D.

Borrower may not use an oral statement of Lender or SBA to contradict or alter
the written terms of this Note.

 

E.

If any part of this Note is unenforceable, all other parts remain in effect.

 

F.

To the extent allowed by law, Borrower waives all demands and notices in
connection with this Note, including presentment, demand, protest, and notice of
dishonor. Borrower also waives any defenses based upon any claim that Lender did
not obtain any guarantee.

 

G.

Collateral Exclusion. Any indebtedness and related obligations evidenced herein
shall not be collateralized by any security interest or lien granted to Lender
by Borrower or other obligor, if any, in any real property or tangible personal
property, notwithstanding any provisions to the contrary in any other agreements
(including any unrelated lien instrument) now or hereafter existing between
Lender and Borrower or other obligor. It is acknowledged and understood by
Borrower that the preceding sentence shall be at all times subject to, and shall
not in any way compromise or impair, any other rights and remedies of Lender,
including, without limitation, rights of setoff, rights to enforce judgment
liens and rights related to judgment execution against applicable assets of any
judgment debtor.

 

H.

Business Purpose. The Loan proceeds shall be used only for a business purpose
and pursuant to, and in accordance with, the terms of the Paycheck Protection
Program. Borrower acknowledges that at least 75 percent of the Loan proceeds
must be used for payroll costs.

 

I.

Further Assurances. The Borrower shall take such action and execute and deliver
to Lender such additional documents, instruments, certificates, and agreements
as Lender may reasonably request to effectuate the terms and purposes of this
Note, and as may otherwise be required for Lender to comply with terms and
conditions of the Paycheck Protection Program Loan Authorization.

 

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9.

GENERAL PROVISIONS CONT.:

     

J. Good Standing. Borrower represents and warrants that it is an entity or sole
proprietor (i) duly organized and existing and in good standing under the laws
of the jurisdiction in which it was formed, (ii) duly qualified, in good
standing and authorized to do business in every jurisdiction in which failure to
be so qualified might have a material adverse effect on its business or assets
and (iii) has the power and authority to own each of its assets and to use them
as contemplated now or in the future.

     

K. Sale of Interest. There shall not be any sale or transfer of ownership of any
interest in Borrower without the Lender’s prior written consent.

     

L. Change of Name. Borrower shall not change its legal name or the State or the
type of its formation, without giving the Lender at least 30 days prior written
notice thereof.

     

M. Borrower will furnish to Lender from time to time, such financial data and
information about Borrower as Lender may reasonably request and Borrower
represents and warrants the accuracy of any information contained therein.

     

N. Electronic Signatures. The individual executing this Note agrees that
electronic signatures, whether pdf, scanned, digital, encrypted, captured or
otherwise attached or imposed hereto, are intended to authenticate this Note and
to have the same effect, validity, and enforceability as manually executed
signatures. For purposes hereof, electronic signature means any electronic
sound, symbol or process attached to or logically associated with a record and
executed and adopted by an individual with the intent to sign such record.

     

O. Loan Forgiveness under the Paycheck Protection Program. The Loan amount may
be eligible for forgiveness pursuant to the Paycheck Protection Program, which
minimally requires (1) at least 75% of the loan proceeds are used to cover
payroll costs and the remainder is used for mortgage interest, rent and utility
costs over the 8 week period after the loan is made, and (2) the number of
employees and compensation levels are generally maintained. Additional
requirements may apply. Further details on how to request loan forgiveness shall
be made available to you upon further guidance from the SBA.

     

P. Indemnification. Borrower shall indemnify, defend and hold Lender and Lender
Affiliates and their directors, officers, employees, agents and attorneys (each
an "Indemnitee") harmless against any claim brought or threatened against any
Indemnitee by Borrower or by any other person (as well as from attorneys'
reasonable fees and expenses in connection therewith) on account of Lender’s
relationship with Borrower (each of which may be defended, compromised, settled
or pursued by Lender with counsel of Lender’s selection, but at the expense of
the Borrower), except for any claim arising out of the gross negligence or
willful misconduct of Lender.

     

Q. Representations and Warranties. Borrower represents and warrants to, and with
regard to item (a) the individual executing this Note also represents and
warrants, in his/her individual capacity, to, and covenants with Lender as
follows: (a) the individual executing this Note is duly authorized to do so and
to bind Borrower and Borrower’s heirs, successors and/or assigns to the terms
hereof; (b) each of the Loan Documents is a valid and legal binding obligation
of Borrower, enforceable in accordance with its terms, and is not subject to any
defenses, counterclaims, or offsets of any kind; (c) there exists no action,
suit, proceeding or investigation, at law or in equity, before any court board,
administrative body or other entity, pending or threatened, affecting Borrower’s
property, wherein an unfavorable decision, ruling or finding would materially
adversely affect the business operations, property or financial condition of
Borrower; (d) Borrower shall advise Lender if there is an adverse change in
Borrower’s financial condition, organization, operations or fixed assets since
the date this Note is signed; (e) Borrower attests to the accuracy of and
reaffirms each certification made in the Paycheck Protection Program Application
as if fully set forth herein.

     

R. Credit Reporting. The undersigned authorizes Lender and its affiliates to
request and review all data it deems appropriate about Borrower and the
undersigned, including credit reports from agencies, now and for all future
reviews, extensions, or renewals of credit extended to Borrower, or for
collection of loans. The undersigned may inquire whether a credit report was
requested and if so, obtain the name and address of the credit reporting agency
furnishing the credit report.

   

 

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S. Reproductions. A photographic or other reproduction of this Note may be made
by Lender, and any such reproduction shall be admissible in evidence with the
same effect as the original itself in any judicial or administrative proceeding,
whether or not the original is in existence.

     

T. Right of Setoff. The Lender shall have the right to set off against the
amounts owing under this Note any property held in a deposit or other account
with the Lender or any affiliates or otherwise owing by the Lender or any
affiliates in any capacity to Borrower. Such set-off shall be deemed to have
been exercised immediately at the time the Lender or such affiliate elects to do
so.

     

U. Notices. Any demand or notice hereunder or under any applicable law
pertaining hereto shall be in writing and duly given if delivered to Borrower
(at its address on the Lender’s records) or to the Lender (at the address on
page one and separately to the Lender officer responsible for Borrower’s
relationship with the Lender). Such notice or demand shall be deemed
sufficiently given for all purposes when delivered (i) by personal delivery and
shall be deemed effective when delivered, or (ii) by mail or courier and shall
be deemed effective three (3) business days after deposit in an official
depository maintained by the United States Post Office for the collection of
mail or one (1) business day after delivery to a nationally recognized overnight
courier service (e.g., Federal Express). Notice by e-mail is not valid notice
under this or any other agreement between Borrower and the Lender.

     

V. Complete Agreement. This Note, together with any related Loan Documents,
contains the entire agreement between Borrower and Lender with respect to the
Note, and supersedes every course of dealing, other conduct, oral agreement and
representation previously made by Lender. No waiver or amendment of any
provision of this Note shall be effective unless made specifically in writing by
the Lender. No course of dealing or other conduct, no oral agreement or
representation made by the Lender, and no usage of trade, shall operate as a
waiver of any right or remedy of the Lender. No waiver of any right or remedy of
the Lender shall be effective unless made specifically in writing by the Lender.

     

W. Governing Law/Jurisdiction. This Note has been delivered to and accepted by
the Lender and will be deemed to be made in the State of New York. Except as
otherwise provided under federal law, this Note will be interpreted in
accordance with the laws of the State of New York excluding its conflict of laws
rules. Borrower hereby irrevocably consents to the exclusive jurisdiction of any
State or Federal Court in New York State in a county or judicial district where
Lender maintains a branch and consents that Lender may effect any service of
process in the manner and at Borrower’s address set forth in Lender’s records
for providing notice or demand; provided that nothing contained in this note
will prevent Lender from bringing any action, enforcing any award or judgment or
exercising any rights against Borrower individually, against any security or
against any property of Borrower within any county, state, or other foreign or
domestic jurisdiction.

 

Borrower acknowledges and agrees that the venue provided above is the most
convenient forum for both Lender and Borrower. Borrower waives any objection to
venue and any objection based on a more convenient forum in any action
instituted under this Note.

     

X. Waiver of Jury Trial. Borrower and Lender hereby knowingly, voluntarily, and
intentionally waive any right to trial by jury Borrower and Lender may have in
any action or proceeding, in law or in equity, in connection with this Note or
the transactions related hereto. Borrower represents and warrants that no
representative or agent of Lender has represented, expressly or otherwise, that
Lender will not, in the event of litigation, seek to enforce this jury trial
waiver. Borrower acknowledges that Lender has been induced to enter into this
Note by, among other things, the provisions of this section.

   

 

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10.

BORROWER’S NAME(S) AND SIGNATURE(S):

     

By signing below, each individual or entity becomes obligated under this Note as
Borrower.

     

Borrower acknowledges that it has read and understands all the provisions of
this Note, and has been advised by counsel as necessary or appropriate.

 

 

Executed effective as of the date first written above.

 

   

Borrower:

       

By:

/s/ Hugh T. Regan, Jr.

         

Hugh T. Regan, Jr.                                                        

Printed Name

         

CFO                                                                             
 

Title

         

804 East Gate Drive Suite 200 Mt Laurel, NJ 08054   

Address

 

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