Promissory Note, dated April 8, 2020, made by Nanophase Technologies Corporation payable to Libertyville Bank & Trust Company, N.A., evidencing a loan under the Paycheck Protection Program

Nanophase Technologies Corporation 10-Q

Exhibit 10.1

In return for the Loan, Borrower promises to pay to the order of Lender the amount of 951,600.00                             , interest on the unpaid principal balance, and all other amounts required by this Note.

“Loan” means the loan evidenced by this Note.

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

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

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

Initial Deferment Period: No payments are due on this loan for 6 months from the date of first disbursement of this Loan. Interest will continue to accrue during the deferment period.

Loan Forgiveness:  Borrower may apply to Lender for forgiveness of the amount due on this Loan in an amount equal to the sum of the following costs incurred by Borrower during the 8-week period beginning on the date of first disbursement of this Loan:

The amount of loan forgiveness shall be calculated (and may be reduced) in accordance with the requirements of the Paycheck Protection Program, including the provisions of Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (P.L. 116-136).  Not more than 25% of the amount forgiven can be attributable to non-payroll costs.

Maturity: This Note will mature two years from date of first disbursement of this Loan.

Repayment Terms:   The interest rate on this Note is one percent per year. The interest rate is fixed and will not be changed during the life of the loan.

For any amounts that remain owing on this Note as of the date that is six (6) months from the date of this Note, Borrower must pay principal and interest payments, beginning seven (7) months from the month this Note is dated, in such amount as is required to fully amortize the unpaid balance of this Note over the remaining term of eighteen (18) months. Payments must be made on the same calendar day as the day this Note is dated in the months they are due.

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

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; and c. If the prepayment is received less than 21 days from the date Lender received the notice, pay an amount equal to 21 days interest from the date Lender received the notice, less any interest accrued during the 21 days and paid under b. of this paragraph.  If Borrower does not prepay within 30 days from the date Lender received the notice, Borrower must give Lender a new notice.

Non-Recourse. Lender and SBA shall have no recourse against any individual shareholder, member or partner of Borrower for non-payment of the loan, except to the extent that such shareholder, member or partner uses the Loan proceeds for an unauthorized purpose.

4.    DEFAULT:

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

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

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

7.    WHEN FEDERAL LAW APPLIES:

When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. ender 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.

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

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

BORROWER: 

Nanophase Technologies Corporation
By:
Name:	Jess Jankowski
Its:	President