tomi_ex10-1





  Exhibit
10.1






 




	

SBA
Loan #

	

62271270-08


	

SBA
Loan Name

	

TOMI
ENVIRONMENTAL SOLUTIONS, INC.


	

Date

	

April
21, 2020


	

Loan
Amount

	

Four
Hundred Ten Thousand Seven Hundred Dollars ($410,700 )


	

Interest
Rate

	

1.00%
per annum


	

Borrower

	

TOMI
Environmental Solutions, Inc., a Florida Corporation


	

Operating
Company

	

N/A


	

Lender

	

City
National Bank






 







1.

PROMISE TO
PAY:





 


In
return for the Loan, Borrower promises to pay to the order of
Lender the amount of Four Hundred Ten Thousand Seven Hundred
Dollars ($410,700 ), interest on the unpaid principal balance, and
all other amounts required by this Note. Under the PPP (as defined
below), certain amounts may be forgiven by the Lender under the
direction of the Administrator of the SBA so long as the
requirements of the PPP for forgiveness are satisfied. Until an
amount is forgiven, the principal amount owed is as set forth in
the preceding paragraph and interest accrues thereon. Forgiveness does not occur automatically.
Borrower must submit a request for forgiveness and all required
documentation, and forgiveness will not occur unless and until the
request for forgiveness is approved. Borrower should submit the
request for approval timely in accordance with the rules of the PPP
to avoid unnecessary delay.

 




2.

DEFINITIONS:





 


"Application" shall
mean the SBA Form 2483 together with all supporting documentation
submitted to Lender as the application for the Loan.

 


"Disbursement Date"
means the date on which the Loan is disbursed by Lender. "Loan"
means the loan evidenced by this Note.

 


"Loan
Documents" means the documents related to this loan signed by
Borrower, including, without limitation, the
Application.

 


"Maturity Date"
means the date that is two (2)
years from the Disbursement Date.

 


"Payroll Costs"
shall have the meaning set forth in the CARES Act and Section 2(f)
of the SBA's PPP rules, as the same may be amended, modified,
supplemented or interpreted by the SBA from time to
time.

 


"PPP"
means the Paycheck Protection Program set forth in the Coronavirus
Aid, Relief, and Economic Security Act (the "CARES Act"), as may be
amended, modified or supplemented from time to time, and the rules
and regulations promulgated thereunder.

 


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

 




3.

PAYMENT
TERMS:





 


Borrower must make
all payments at the place Lender designates.

 


The
Loan shall be repaid in full no later than two (2) years from the Disbursement Date
(the "Maturity Date"). Unless earlier forgiven in whole or in part,
subject to and in accordance with the Forgiveness
Guidelines


 





	








 








 





 


described (and
defined) below, the Borrower shall begin making monthly payments of
principal in equal installments in an amount that would fully
amortize the Loan by the Maturity Date, plus interest, in arrears,
calculated based upon the original principal amount of this Note
until the date of any forgiveness and on the remaining outstanding
principal balance thereafter, and a per annum interest rate of one
percent (1.00%) beginning seven months from the month of the
Disbursement Date; payments must be made on the date in the months
they are due that corresponds to the date in the month on which
proceeds were initially disbursed or, if no such corresponding
date, on the next succeeding business day. Interest shall accrue,
and be due and payable from, the date of initial disbursement of
the Loan. The interest rate will not be changed during the life of
the loan. Borrower hereby authorizes Lender automatically to deduct
from any deposit account(s) of Borrower with Lender, the amount of
any payment due under this Note. Lender will apply each installment
payment first to pay interest accrued to the day Lender receives
the payment, then to bring principal current, then to pay any late
fees, and will apply any remaining balance to reduce
principal.

 




4.

USE OF
PROCEEDS:





 


Proceeds of the
Loan must be (1) paid or disbursed by Borrower within eight (8)
weeks of the date of initial disbursement of the Loan and (2) used
solely for the following purposes (the "Permitted
Purposes"):

 




A.

Payroll
Costs;





 




B.

costs related to
the continuation of group health care benefits during periods of
paid sick, medical, or family leave, and insurance
premiums;





 




C.

mortgage interest
payments (but not mortgage prepayments or principal
payments);





 




D.

rent
payments;





 




E.

utility payments;
in each case of C through E, to the extent the same were incurred
in connection with agreements in effect before February 15,
2020;





 




F.

interest payments
on any other debt obligations that were incurred before February
15, 2020; and/or





 




G.

refinancing an SBA
EIDL loan made between January 31, 2020 and April 3,
2020.





 




5.

LOAN
FORGIVENESS:





 


The
principal amount of the Loan may be forgiven, in whole or in part,
in accordance with the CARES Act, as may be amended from time to
time and modified or supplemented pursuant to any regulatory or
administrative regulations, guidance, or interpretations issued by
the SBA from time to time (collectively, the "Forgiveness
Guidelines"). Any such forgiveness shall be conditioned upon
Borrower providing to Lender in a timely manner all documentation
required under the Forgiveness Guidelines or otherwise requested by
Lender supporting Borrower's request for loan forgiveness,
including documentation to determine whether the forgiven amount
must be reduced in accordance with the Forgiveness Guidelines. The
final amount of loan forgiveness, if any, shall be determined by
Lender in Lender's discretion in accordance with, and to the extent
not expressly prohibited by, the Forgiveness Guidelines. Not more
than twenty-five percent (25%) of the amount forgiven shall be
attributable to non-Payroll Costs. Borrower has received an EIDL
(Economic Injury Disaster Loan) advance in the amount of $0. That
amount will be subtracted from the loan forgiveness
amount.

 




6.

OTHER
INDEBTEDNESS:





 


This
Note is considered permitted indebtedness, howsoever defined, under
any other loan evidenced by any promissory note or credit agreement
solely between Borrower and Lender (whether currently in effect or
hereafter entered into; each, a "Credit Agreement").
Notwithstanding any provision in any other Credit Agreement solely
between Borrower and Lender or this Note, any collateral or
guarantees for other obligations of Borrower to Lender shall not
apply to the indebtedness evidenced by this Note.

 




7.

BORROWER'S
AGREEMENTS:





 


Borrower
acknowledges and agrees that (1) Borrower has and shall maintain in
full force and effect through the Maturity Date or prior
satisfaction in full of this Loan, and shall provide evidence of
the same to Lender upon Lender's request therefor, the following:
liability insurance; other insurance of the type typically
maintained by companies in the same or similar lines of business as
Borrower; and worker's compensation insurance; in each case, with
an insurance company satisfactory to Lender and, with respect to
worker's compensation insurance, in an amount meeting state law
requirements; (2) Borrower's ownership and management have not
changed without Lender's approval since the application for this
Loan was submitted; and (3) Borrower will keep books


 




 

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and
records in a manner satisfactory to Lender, furnish financial
statements as requested by Lender and allow Lender and SBA to
inspect and audit books, records and papers relating to Borrower's
financial or business condition.

 




8.

FURTHER
ASSURANCES:





 


At any
time and from time to time Borrower shall execute and deliver such
further instruments and take such further action as may reasonably
be requested by Lender to effect the purposes of this Note and in
the event the SBA requires additional, supplemental or replacement
documents to, and/or of, this Note.

 




9.

LOAN
PREPAYMENT:





 


Notwithstanding any
provision in this Note to the contrary, Borrower may prepay this
Note at any time without penalty. Borrower may prepay 20 percent or
less of the unpaid principal balance at any time without notice. If
Borrower prepays more than 20 percent and the Loan has been sold on
the secondary market, Borrower must:

 




A.

Give Lender written
notice;





 




B.

Pay all accrued
interest then unpaid; and





 




C.

If the prepayment
is received less than 21 days from the date Lender receives the
written notice from Borrower, pay an amount equal to 21 days'
interest from the date Lender receives the notice, less any
interest accrued during the 21 days and paid under subparagraph b.,
above.





 


If
Borrower does not prepay the amount specified in its notice within
30 days from the date Lender receives the notice, Borrower must
give Lender a new written notice and comply with subparagraphs b
and c above.

 




10.

DEFAULT:





 


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

 




A.

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





 




B.

Defaults on any
other loan with Lender;





 




C.

Is not eligible to
receive a loan under the PPP when the Loan is made;





 




D.

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





 




E.

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





 




F.

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





 




G.

Fails to pay any
taxes when due;





 




H.

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





 




I.

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





 




J.

Makes an assignment
for the benefit of creditors;





 




K.

Has any adverse
change in financial condition or business operation that Lender
believes may materially affect Borrower's ability to pay this Note,
provided that this provision shall not apply to adverse changes or
conditions resulting from the Covid-19 pandemic and the
circumstances giving rise to the CARES Act;





 




L.

(1) Reorganizes,
merges, consolidates, or otherwise changes ownership or business
structure, (2) makes any distribution of Borrower's assets that
would adversely affect its financial condition, or (3) transfers
(including by pledge) or disposes of any assets except in the
ordinary course of business, in each case without Lender's prior
written consent; or





 




M.

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






 




 

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11.

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 Guarantor; or





 




C.

File suit and
obtain judgment.





 


Borrower
acknowledges that if Borrower defaults on the Loan, SBA may be
required to pay Lender under the SBA guarantee, and SBA may then
seek recovery on the Loan (to the extent any balance remains after
loan forgiveness in accordance with the Forgiveness Guidelines
above).

 




12.

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 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;





 




B.

Release anyone
obligated to pay this Note; and





 




C.

Take any action
necessary to collect amounts owing on this Note or comply with the
PPP.





 




13.

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.

 




14.

SUCCESSORS AND
ASSIGNS:





 


Under
this Note, "Borrower" include any successor, and "Lender" includes
its successors and assigns. Lender may assign all or any portion of
this Note without notice to, or consent of, Borrower.

 




15.

GENERAL
PROVISIONS:





 




A.

To the extent there
is more than one Borrower on this Note, all such Borrowers are
jointly and severally liable.





 




B.

Borrower waives all
suretyship defenses.





 




C.

Borrower must sign
all documents necessary at any time to comply with the Loan
Documents or the statutes and regulations applicable to the
PPP.





 




D.

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.





 




E.

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





 




F.

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





 




G.

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.





 




H.

Borrower shall
initial one of the boxes below and a failure to initial one of the
boxes shall be interpreted and construed as Borrower's
representation that no agent or broker was involved in arranging
the Loan, preparing an application for the Loan or referring
Borrower to Lender.





 


Borrower
acknowledges and agrees [initial
one]:

 



 ________  



No agent or broker
was involved in arranging the Loan, preparing an application for
the Loan or referring Borrower to Lender; OR






 




 

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_________


An agent or broker
arranged the Loan, assisted in the preparation of the Loan or
referred Borrower to Lender and Borrower has caused such agent or
broker to execute and deliver the Agent Fee Agreement required by
Lender.





 


Borrower shall not
be charged for any fee of agent or broker, nor shall Borrower or
Lender pay any such fee out of proceeds of the Loan. Borrower shall
indemnify and hold harmless Lender for any loss, costs or expenses
Lender incurs as a result of any misrepresentation by Borrower
under this Section 15.

 


Lender
will pay a flat fee to qualifying agents assisting applicants under
the PPP not to exceed: $600.*

 


*Additional terms
and conditions apply, contact a City National SBA specialist for
details.

 




16.

BORROWER'S NAME(S)
AND SIGNATURE(S):





 


By
signing below, the Borrower evidences that it is obligated under
this Note.

 


TOMI
Environmental Solutions, Inc., a Florida Corporation


 


 


 

By:                                                                     

Name: Nicholas John Jennings    
                 
  

Its: Authorized
Person                                      



 


Dated
as of the date first set forth above.



 


 


 


 


 


 


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