Item 1.01 Entry into a Material Definitive Agreement
The information provided in Item 2.03 of this Current Report on Form 8-K is
hereby incorporated by reference into this Item 1.01.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
On April 23, 2020, Trans-Lux Corporation (the "Company" and "Borrower") entered
into that certain loan note (the "Loan Note") with Enterprise Bank and Trust
("Enterprise") as lender under the Coronavirus Aid, Relief, and Economic
Security Act ("CARES ACT") of the Small Business Administration of the United
States of America ("SBA"), dated as of April 20, 2020.
Under the Loan Note, the Borrower borrowed $810,800 from Lender under the
Payment Protection Program included in the SBA's CARES ACT. The Loan Note
proceeds are available to be used to pay for payroll costs, including salaries,
commissions, and similar compensation, group health care benefits, and paid
leave; rent; utilities; and interest on certain other outstanding debt. The
Loan Note has a term of two years.
Interest under the Loan Note accrues at a rate per annum of 1.00%, with the
first payment of principal and interest due on November 20, 2020.
According to the terms of the PPP and current guidance from the SBA and U.S.
Department of Treasury, all or a portion of loans under the program may be
forgiven if the Loan Note proceeds are used for permitted expenses, as outlined
in the CARES Act and related regulations, including 75% of the Loan Note
proceeds being used for payroll related costs. The amount that will be forgiven
will be calculated in part with reference to the Company's full time headcount
during the eight-week period following the funding of the Loan Note. The SBA
and U.S. Department of Treasury may continue to update guidance on the
calculation of loan forgiveness, which updated guidance could affect the amount
of the Loan Note proceeds that could be forgiven.
The foregoing description of the Loan Note is included to provide information
regarding its terms. It does not purport to be a complete description and is
qualified in its entirety by reference to the full text of the Loan Note, which
is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit 10.1 Loan Note dated as of April 20, 2020 and signed April 23, 2020, by
and among Trans-Lux Corporation and Enterprise Bank and Trust.
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