Commercial Promissory Note



 Exhibit 10.3 

 

							
	Bank Use Only:	 	Customer Number	 	  
	  	 
	 	Account Number	 	  
	  	

 COMMERCIAL PROMISSORY NOTE 

 

							
	Lender:	  	Fifth Third Bank	  	Borrower:	  	 Computer Software

Innovations, Inc.

				
	Amount:	  	$8,000,000.00	  		  	
				
	Type:	  	Revolving Line of Credit	  		  	
				
	Date:	  	March 6, 2012	  		  	

 FOR VALUE RECEIVED, COMPUTER SOFTWARE INNOVATIONS, INC., a Delaware corporation (“Borrower”),
promises to pay to FIFTH THIRD BANK (“Bank”), or order, the principal sum of Eight Million and No/100ths Dollars ($8,000,000.00), or so much thereof as shall have been disbursed and remains unpaid, together with interest, fees,
premiums, charges and costs and expenses as set forth in this Note or in the Credit Agreement. Payments by Borrower under this Note will be made as provided in this Note and the Credit Agreement. Payments will be made at the office of Bank, or such
other place as Bank may designate in writing from time to time. 
 Line of Credit 

This Note evidences a Revolving Loan that Bank has made available to Borrower pursuant to the Credit Agreement. The Revolving Loan is a line of credit.
Under the Revolving Loan, Borrower may make requests to Bank for Advances under this Note and Bank will, on the basis of those requests, make Loans under this Note and the Credit Agreement to or for the benefit of Borrower up to 2:00 p.m. on the day
before the Revolving Credit Termination Date, or if the Revolving Credit Termination Date is not on a Business Day, up to 2:00 p.m. on the day before the Business Day immediately preceding the Revolving Credit Termination Date. Amounts loaned under
this Note, once repaid, may be re-loaned in accordance with the applicable provisions of this Note and the Credit Agreement. At no time may the unpaid principal balance outstanding under this Note and the face amount of all outstanding Letters of
Credit (whether or not drawn) exceed the lesser of (a) the Revolving Credit Commitment and (b) the Borrowing Base. All Loans under this Note will be subject to and made on the terms and conditions of this Note and the other Credit
Documents, including Bank’s satisfaction of all conditions precedent to any Loans or waiver of such conditions by Bank. Upon the occurrence of a Default under this Note, Bank may suspend Borrower’s right to receive any future or additional
Advances under this Note and the other Credit Documents. 
 Borrower will be liable under this Note for only so much of the principal amount as
equals the total of the amounts loaned (including unreimbursed drawings under Letters of Credit) to or for Borrower by Bank from time to time under this Note, less all payments made by or for Borrower and applied by Bank to principal, and for
interest on each such Loan, fees, premiums, charges and costs and expenses incurred or due hereunder, all as shown on Bank’s books and records which will be conclusive evidence of the amount owed by Borrower under this Note, absent a clear and
convincing showing of bad faith or manifest error. 







 TERMS 
 Interest Rates 
 Except as provided below, prior to maturity of this Note, interest
will accrue on the unpaid principal of this Note at an interest rate per annum equal to 2.25% plus the LIBOR Rate. The “LIBOR Rate” means the rate (rounded upwards, if necessary, to the next 1/8 of 1% and adjusted for reserves if Bank is
required to maintain reserves with respect to relevant advances) fixed by the British Bankers’ Association at 11:00 a.m., London time, relating to quotations for the one month London InterBank Offered Rates on U.S. Dollar deposits as
published on Bloomberg LP, or, if no longer provided by Bloomberg LP, such rate as shall be determined in good faith by the Bank from such sources as it shall determine to be comparable to Bloomberg LP (or any successor) as determined by Bank at
approximately 10:00 a.m. Cincinnati, Ohio time on the relevant date of determination. The LIBOR Rate shall initially be determined as of the date of the initial advance of funds to Borrower under this Note and shall adjust effective on the first day
of each calendar month thereafter. 
 In the event that Bank shall have determined, which determination shall be final, conclusive and binding,
that by reason of circumstances occurring after the date of this Note affecting the London interbank market, (i) adequate and fair means do not exist for ascertaining the LIBOR Rate on the basis provided for in this Note, or (ii) any
applicable law, treaty, government rule, regulation, guideline or order, or compliance therewith by Bank, prohibits or restricts or makes impossible the charging of interest based on the LIBOR Rate, or (iii) the charging of interest based on
the LIBOR Rate has become impracticable, or would cause Bank material hardship, and Bank so notifies Borrower (by telephone confirmed in writing or by telecopy) of such determination, then until Bank notifies Borrower that the circumstances giving
rise to such notice no longer exist, interest shall accrue and be payable on the unpaid principal balance of this Note from the date Bank so notifies Borrower until the Revolving Credit Termination Date at a fluctuating rate of interest per annum
equal to the Prime Rate plus or minus such margin as would be required in order that such interest rate would be equal to the interest rate then in effect under this Note on the date of such determination, such margin to remain fixed thereafter so
long as the interest rate hereunder is based on the Prime Rate. The term “Prime Rate” means the rate of interest per annum announced by Bank from time to time and adopted as its Prime Rate. The Prime Rate is one of several rate
indexes employed by Bank when extending credit, and not necessarily the lowest rate. Any change in the interest rate resulting from a change in Bank’s Prime Rate shall become effective as of the opening of business on the effective date of the
change. 
 This is a variable rate note. The rates at which interest accrues under this Note may change from time to time. Any changes in the
interest accrual rates will equal changes in the variable rate index to which such interest rates are tied. Bank will not have any obligation to notify Borrower of adjustments in any interest rates under this Note or any of the other Credit
Documents. Adjustments to any rate of interest will be effective as of the first day of following month. 
 All interest payable under this Note
will be calculated monthly and will accrue daily on the basis of the actual number of calendar days elapsed and a year of three hundred sixty (360) calendar days. All accrual rates of interest under this Note will be contract rates of interest,
whether a pre-default rate or a default rate, and references to contract rates in any Credit Documents executed and delivered by Borrower or others to Bank in connection with this Note will be to such contract rates. 

Payment Terms 
 Prior to the
Revolving Credit Termination Date, principal and interest will be paid as follows: Interest shall be payable monthly, in arrears, beginning on April 1, 2012, and continuing on the same day of each calendar month thereafter until the Revolving
Credit Termination Date, when one final payment of the entire balance of principal, interest, fees, premiums, charges and costs and expenses then outstanding on this Note will be due and payable in full. In the event that any payment is due on a
calendar day that is not a Business Day, then such payment will be due on the next calendar day that is a Business Day and such extension of time will be included in computing interest or fees, if any, in connection with such amount. 

  
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 Unless an Event of Default shall have occurred and be continuing, all payments shall be applied
(i) first to the payment of late fees and delinquent interest on the outstanding principal balance; (ii) next to the payment of interest then due and payable on the outstanding principal balance; and (iii) the remainder to the
reduction of outstanding principal; or in such other order as Bank may determine in its sole discretion. The principal and interest shall be payable in lawful money of the United States which shall be legal tender for public and private debts at the
time of payment. 
 Borrower may prepay all or part of this Note, at any time without advance notice to Bank or penalty or premiums, which
prepaid amounts shall be applied to the amounts due in reverse order of their due dates. 
 Supporting Documents 

Borrower and Bank entered into that certain Credit Agreement on March 6, 2012 (as amended or modified from time to time, the “Credit
Agreement”). The terms of the Credit Agreement are incorporated into this Note. Advances under this Note will be made in accordance with the Credit Agreement. 
 This Note is secured by the Collateral pursuant to the Security Documents, and all terms, covenants and conditions thereof are hereby incorporated herein by this reference as if set forth herein at
length, and any holder of this Note is entitled to the benefits of and remedies provided in the Credit Agreement, the Security Documents and the other Credit Documents. 
 Late Charges and Expenses 
 If any payment is not paid when due (whether by
acceleration or otherwise) or within ten (10) days thereafter, Borrower agrees to pay to Bank a late payment fee of 5% of the payment amount, with a minimum fee of $20.00. After an Event of Default, Borrower agrees to pay to Bank a fixed charge
of $25.00, or Borrower agrees that Bank may, without notice, increase the Interest Rate by three percentage points (3%) (the “Default Rate”), whichever is greater. Bank may impose its customary non-sufficient funds fee for any check
that is presented for payment that is returned for any reason. In addition, Bank may charge loan documentation fees as may be reasonably determined by the Bank. 
 Default and Acceleration 
 For purposes hereof, an “Event of Default” shall
mean an Event of Default as defined in the Credit Agreement and/or the other Credit Documents. 
 Upon the occurrence of an Event of Default
under this Note, (1) the entire unpaid principal balance of this Note and all interest, fees, premiums, charges, costs and expenses owing and to be owing under this Note, and all other amounts due hereunder and under the other Credit Documents
shall become or may, at the option of Bank, become immediately due and payable, without notice or demand, and (2) the Bank may, both before and after acceleration, exercise any of and all of its other rights and remedies under this Note and the
other Credit Documents, as well as any additional rights and remedies it may have at law or in equity. Upon the occurrence of an Event of Default, Borrower will also pay to Bank, in addition to the amount due, all costs of collecting, securing or
attempting to collect or secure this Note, or foreclosing on or acquiring possession of the Collateral (as defined in the Credit Agreement), including without limitation, court costs and reasonable attorneys’ fees based on actual time incurred
at the attorneys’ customary hourly rates, whether incurred without the commencement of a suit, in any trial, arbitration, or administrative proceeding, or in any appellate or bankruptcy proceeding. 

  
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 The failure by Bank to exercise any of its options will not constitute a waiver of the right to exercise
same in the event of any subsequent default. 
 Break Funding Indemnification. The Borrower agrees to indemnify the Bank against
any liabilities, losses or expenses (including, without limitation, loss of margin, any loss or expense sustained or incurred in liquidating or employing deposits from third parties, and any loss or expense incurred in connection with funds acquired
to effect, fund or maintain any advance (or any part thereof) bearing interest under the LIBOR Rate which the Bank sustains or incurs as a consequence of either (a) the Borrower’s failure to make a payment on the due date thereof,
(b) the Borrower’s revocation (expressly, by later inconsistent notices or otherwise) in whole or in part of any notice given to the Bank to request, convert, renew or prepay any advance bearing interest under the LIBOR Rate or
(c) the Borrower’s payment or prepayment (whether voluntary, after acceleration of the maturity of this Note or otherwise) or conversion of any advance bearing interest under the LIBOR Rate on a day other than the last day of the
applicable interest period. A notice as to any amounts payable pursuant to this paragraph given to the Borrower by the Bank shall, in the absence of bad faith or manifest error, be conclusive and shall be payable upon demand. The Borrower’s
indemnification obligations hereunder shall survive the payment in full of the Advances and all other amounts payable hereunder and termination of the Credit Agreement. 
 General Terms 
 Bank shall not by an act, delay, omission or otherwise be deemed to
have waived any of its rights or remedies, and no waiver of any kind shall be valid unless in writing and signed by Bank. 
 All rights and
remedies of Bank under the terms of this Note and applicable statutes or rules of law shall be cumulative, and may be exercised successively or concurrently. 
 Borrower agrees that as of the date hereof there are no defenses, equities or setoffs with respect to the obligations set forth herein. 
 Each of the Borrower and all sureties, endorsers, guarantors and any other party now or hereafter liable for the payment of this Note in whole or in part, hereby waives presentment, demand, protest,
notice of protest, notice of dishonor and nonpayment, notice of intent to accelerate and all other notices (except any notices which are specifically required by this Note or any other Credit Document), filing of suit and diligence in collecting
this Note or enforcing any of the security herefor. 
 Time is of the essence for the performance of all of Borrower’s covenants and
agreements set forth in this Note, including its payment obligations under this Note. 
 Payment of this Note in whole or in part, or any other
partial or full satisfaction or discharge of Borrower’s obligations under this Note, will not release or otherwise terminate any of the security interests or liens created by any of the Security Documents, or entitle any person to a release or
termination thereof; the terms of each Security Document will be determinative of when and the conditions under which any of the security interests or liens created by such Security Document will be released or otherwise terminated. 

This Note will be governed by the substantive laws of the State of South Carolina, excluding, however, the conflict of law and choice of law provisions
thereof. Borrower submits to the jurisdiction of either the state courts of the jurisdiction whose laws govern this Note, or a United States District Court for any federal district in such jurisdiction, over any action or proceeding arising from or
related to this Note; and, Borrower irrevocably waives the defense of improper venue or an inconvenient forum. 

  
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 Each provision of this Note will be interpreted in a manner so as to be valid under applicable law, but if
any provision of this Note is held invalid under such law by a court or other tribunal of competent jurisdiction, the provision will be ineffective to the extent of such invalidity without invalidating the remainder of such provision or the
remaining provisions of this Note, or the application thereof will be in a manner and to an extent permissible under applicable law. 
 If the
rate at which interest accrues under this Note exceeds at any time the maximum contract rate which may be charged to or collected from Borrower on the Revolving Loan under applicable law, or if any fees, premiums, charges or costs and expenses
assessed against or collected from Borrower exceed those permitted by law, then ipso facto the same will be reduced to the limits prescribed by law; and, if Bank receives any interest, fees, premiums, charges or costs and expenses in excess
of any limits prescribed by law, such excess will be applied to the reduction of the principal balance owing under this Note in the inverse order of its maturity, even if not then due, or at the option of Bank, paid to Borrower. 

Borrower, to the extent permitted by law, waives any right to a trial by jury in any action or proceeding arising from or related to this Note.

 This Note will apply to and bind Borrower’s successors and assigns. At any time or times and without notice to Borrower or any other
person, Bank may sell one or more participations in the Credit Facility and may assign this Note in whole or in part; and, this Note will apply to, be binding upon and inure to the benefit of each one of and all of Bank’s participants,
successors and assigns, including any person that may administer or service this Note for any holder of this Note or any participants in the Credit Facility. Bank may disclose financial and other information concerning Borrower and any other person
obligated on the Credit Facility to any participant or prospective participant, and to any assignee or prospective assignee, to the extent permitted by applicable law. 
 This Note and the other Credit Documents contain the entire and final agreement between Borrower and Bank relative to the Loans. Bank will be under no obligation to extend, renew or refinance the Credit
Facility, or amend, modify or change any provision of this Note. This Note and any of the rights and remedies of any of the parties to this Note may not be changed or waived orally, but only by an agreement in writing signed by the party against
whom enforcement of any change or waiver is sought. 
 Definitions 
 In this Note: (1) “Borrower” refers to all signatories of this Note collectively and severally, as the context of this Note requires, and all signatories of this Note will be and the same
are jointly and severally liable hereunder; (2) “Revolving Loan” is defined in the Credit Agreement; (3) “Revolving Credit Termination Date” is defined in the Credit Agreement; (4) “maturity of this Note”
refers to the date on which payment of the entire balance of principal then outstanding on this Note becomes due and payable in full, whether on the Revolving Credit Termination Date, by acceleration or otherwise; (5) “Note” refers to
this Commercial Promissory Note as amended or modified from time to time; (6) “Security Documents” is defined in the Credit Agreement; and (7) any terms defined in the Credit Agreement that are not defined in this Note will have
the meanings given thereto in the Credit Agreement, and the rules of construction or rules related to use of terms in the Credit Agreement will apply to this Note. 
 [Signature Page to Follow] 

  
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 EXECUTED under SEAL by the undersigned as of the day and year first
above stated. 
  

			
	BORROWER:	  	 
		
	COMPUTER SOFTWARE INNOVATIONS, INC.	  	Witness:
		
	By: /s/ Nancy K.
Hedrick                        	  	
	Print Name: Nancy K. Hedrick	  	 /s/ Erika Newsom

	Title: Chief Executive Officer	  	Print Name: Erika Newsom

 STATE OF SOUTH CAROLINA 
 COUNTY OF GREENVILLE 
 I, Erika Newsom, a Notary Public for the
County and State aforesaid do hereby certify that Nancy K. Hedrick, the Chief Executive Officer of COMPUTER SOFTWARE INNOVATIONS, INC., a Delaware corporation, personally appeared before me this day and acknowledged the due execution of the
foregoing instrument. 
 Witness my hand and official seal this 23rd day of February, 2012. 

 

			
		  	 /s/ Erika Newsom

		  	Notary Public

  

	
	My Commission Expires: April 16, 2020

  

  
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