Exhibit 10.2

 



PROMISSORY NOTE



PAYCHECK PROTECTION PROGRAM



U.S. SMALL BUSINESS ADMINISTRATION


 



SBA Loan # 94252172-01



Date 4/29/2020



Loan Amount $3,477,412



Interest Rate 1.00%



Operating Company



SBA Loan Name Dynatronics
Corporation



Borrower Dynatronics
Corporation



Lender Bank of the
West


 



1. PROMISE TO PAY:


 



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



$3,477,412 _ _ and
no/100Dollars, interest on the



unpaid principal balance, and all other amounts required by this
Note.






 



2. DEFINITIONS:


 



“Amortization Commencement Date”
means the date that is the six (6)
month anniversary of the date



of initial disbursement on this Note.


 



“Deferral Period” means a period of six (6) months commencing with
the date of initial disbursement



on this Note and ending on the day immediately preceding the six
(6) month anniversary of such date.


 



“Loan” means the
loan evidenced by this Note.


 



“Loan Documents” means the documents related to this loan signed by
Borrower.


 



“Maturity Date” shall mean the date that is the two year
anniversary of the date of initial disbursement



on this Note.


 



“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
payment terms for this Note



are:


 



The interest rate is 1.00% per annum, fixed for the term of the
Note.


 



Principal and interest payments are deferred during the first six
(6) months of the term of this Note



(the “Deferral
Period”). Interest will
continue to accrue on the outstanding principal balance
during



the Deferral Period.


 



After proceeds of this Note have been expended by Borrower, but not
sooner than eight weeks



after the date of initial disbursement on this Note, Borrower may
submit to Lender a request for



forgiveness of the Loan. Borrower must submit all documentation
required by Lender to verify



number of full-time equivalent employees and pay rates, as well as
the payments on eligible



mortgage, lease, and utility obligations, certifying that the
documents are true and that Borrower



used the forgiveness amount to keep employees and make eligible
mortgage interest, rent, and



utility payments. Lender will notify Borrower within 60 days
whether all or part of the requested



forgiveness of the Loan has been approved.


 



If the entire principal balance of this Note and accrued interest
is not forgiven before the end of the



Deferral Period, then the principal balance together with and all
accrued and unpaid interest



outstanding on the Amortization Commencement Date shall be paid in
eighteen (18) monthly



payments, commencing in the month immediately following the
Amortization Commencement Date



and continuing each month thereafter until the Maturity Date;
provided, however, that the last



monthly installment shall be on the Maturity Date and shall be in
an amount equal to all principal



and accrued interest outstanding on the Maturity Date. Monthly
payments will be in an amount



determined by the Lender to be the amount necessary to fully
amortize the principal and interest



outstanding on the Amortization Commencement Date over the
remaining term of this Note.


 



Payment must be made on the fifth calendar day in the month it is
due.


 



Lender will apply each installment payment first to pay interest
accrued to the day Lender receives



payment, then bring principal current, then to pay any late fees,
and will apply any remaining



balance to reduce principal.


 



Borrower may prepay this Note at any time without penalty. Borrower
must:


 



a. Give Lender written notice; and


 



b. Pay all accrued interest.


 



All remaining principal and accrued interest is due and payable two
(2) years from the date of initial



disbursement.


 



Late Charge: If a payment on this Note is more than 10 days late,
Lender may charge Borrower a



late fee of up to 5.00% of the unpaid portion of the regularly
scheduled payment.


 



4. 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. 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;



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;



L. Reorganizes, merges, consolidates, or otherwise changes
ownership or business structure



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.


 



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 Borrower; and



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 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;



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


 



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 and Operating Company include the
successors of each, and Lender



includes its successors and assigns.


 



9. GENERAL PROVISIONS:


 



A. All individuals and entities signing this Note 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



and to enable Lender to acquire, perfect, or maintain
Lender’s
liens on
Collateral.






 



 







 






 



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. Borrower also waives any



defenses based upon any claim that Lender did not obtain any
guarantee; did not obtain, perfect,



or maintain a lien upon Collateral; impaired Collateral; or did not
obtain the fair market



value of Collateral at a sale.


 



10. STATE-SPECIFIC PROVISIONS: If Borrower is located in any of the
following states, the clause



indicated for such state is incorporated herein:


 



MISSOURI.


 



Oral or unexecuted agreements or commitments to loan money, extend
credit or to forbear from



enforcing repayment of a debt including promises to extend or renew
such debt are not enforceable,



regardless of the legal theory upon which it is based that is in
any way related to the credit



agreement. To protect you (Borrowers(s)) and us (Creditor) from
misunderstanding or



disappointment, any agreements we reach covering such matters are
contained in this writing, which



is the complete and exclusive statement of the agreement between
us, except as we may later agree



in writing to modify it.


 



OREGON.


 



UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE
BY



LENDER CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT
FOR



PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY
BORROWER'S



RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED
BY AN



AUTHORIZED REPRESENTATIVE OF LENDER TO BE
ENFORCEABLE.


 



WASHINGTON.


 



Oral agreements or oral commitments to loan money, extend credit,
or to forbear from enforcing



repayment of a debt are not enforceable under Washington
law


 



WISCONSIN.


 



Each Borrower who is married represents that this obligation is
incurred in the interest of his or her



marriage or family.


 



11. BORROWER’S
NAME(S) AND
SIGNATURE(S):


 



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


 


 








/s/ John
Krier                                   
            
           
           
           
       4/28/2020



Signature of Authorized Representative of Applicant
           
           
    Date


 



John Krier
           
           
           
           
           
           
           
           
Chief Financial
Officer



Print Name            
           
           
           
           
           
           
          Title








 



 







 






 



DISBURSEMENT AUTHORIZATION



PAYCHECK PROTECTION PROGRAM



U.S. SMALL BUSINESS ADMINISTRATION


 



SBA Loan # 94252172-01



Date 4/29/2020



Loan Amount $3,477,412



Interest Rate 1.00%



Operating Company



SBA Loan Name Dynatronics
Corporation



Borrower Dynatronics
Corporation



Lender Bank of the
West


 



Disbursement Instruction. Borrower understands that no loan
proceeds will be disbursed until all of



Lender’s conditions for making the Loan have been satisfied.
Please disburse the loan proceeds in equal



amount to the Loan Amount stated in the Promissory Note to the
following Bank of the West deposit



account # .


 


 



/s/ John
Krier                                   
            
           
           
           
       4/28/2020



Signature of Authorized Representative of Applicant
           
           
    Date


 



John Krier
           
           
           
           
           
           
           
           
Chief Financial
Officer



Print Name            
           
           
           
           
           
           
          Title