EXHIBIT 10.2

 

@ Fleet

  Small Business Services

 

LINE OF CREDIT WITH LETTER OF CREDIT AND/OR ACCEPTANCE FINANCING PROMISSORY NOTE

 

$600,000.00 Principal Amount

 

Date: November 5, 2004

 

BORROWER: TECHNICAL COMMUNICATIONS CORPORATION

 

BANK: Fleet National Bank, a Bank of America company

 

BANK’S ADDRESS: 111 Westminster Street, Providence, Rhode Island 02903

 

INTEREST RATE: The interest rate per annum shall be equal to One (1.000%)
percentage point above the Prime Rate (as defined in Section 2).

 

PAYMENT SCHEDULE: Monthly payments of interest only in arrears shall be due and
payable commencing on end of month and continuing on the same day of each
successive month, and upon payment in full of this Note. Principal shall be due
and payable ON DEMAND.

 

LOAN AGREEMENT: That certain Line of Credit Agreement of even date between the
Bank and the Borrower relating to the indebtedness evidenced hereby, the terms
and provisions of which are incorporated herein by reference.

 

All capitalized words or phrases which are not otherwise specifically defined
hereinabove or elsewhere in this Note shall have the meaning assigned in the
Loan Agreement.

 

  1. Promise to Pay. FOR VALUE RECEIVED, the Borrower (jointly and severally if
more than one) intending to be legally bound, promise(s) to pay to the order of
the Bank, ON DEMAND, the Maximum Principal Amount or if less, the aggregate
unpaid principal amount of advances made by the Bank to the Borrower pursuant to
the Loan Agreement; together with interest in accordance with the Payment
Schedule and at the Interest Rate on the unpaid principal balance hereof from
time to time outstanding. Notwithstanding the foregoing, from and after demand,
or after judgement has been rendered on this Note, and/or from and after any
Event of Default, the unpaid principal of all advances shall, the interest rate
on the Note shall, at the Banks’s option, bear interest at a rate which is four
percent (4%) per annum greater than that which would otherwise be applicable.
All computations of interest shall be made on the basis of a three hundred sixty
(360) day year and the actual number of days elapsed.

 

  2. Prime Rate. The term “Prime Rate” means the variable per annum rate of
interest so designated from time to time by the Bank as its prime rate. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate being charged to any customer. Changes in the rate of interest
resulting from changes in the Prime Rate shall take place immediately without
notice or demand of any kind.

 

  3. Payment Provisions. All payments shall be made by the Borrower to the Bank
at Bank’s Address, or such other place as the Bank may from time to time specify
in writing in lawful currency of the United States of America in immediately
available funds, without counterclaim or setoff and free and clear of, and
without any deduction or withholding for, any taxes or other payments. If this
Note or any payment hereunder becomes due on a day which is not a Business Day
(as defined below), the due date of this Note or payment shall be extended to
the next succeeding Business Day, and such extension of time shall be included
in computing interest and fees in connection with such payment. As used herein,
“Business Day” shall mean any day other than a Saturday, Sunday or day which
shall be in the Commonwealth of Massachusetts a legal holiday or day on which
banking institutions are required or authorized to close. All payments shall be
applied first to the payment of all fees, expenses and other amounts due to the
Bank (excluding principal and interest), then to accrued interest, and the
balance on account of outstanding principal; provided, however, that after an
Event of Default, payments will be applied to the obligations of the Borrower to
the Bank as the Bank determines in its sole discretion.

 

  4. Prepayment. This Note may be prepaid at any time, in whole or in part,
without premium, penalty or other charge (except as set forth in the next
sentence), but with accrued interest to the day of such prepayment on the amount
prepaid. To the extent that any full prepayment during the first twelve (12)
months from the date of this Note results, directly or indirectly, from the
application of funds borrowed by the Borrower from any lending or financial
services institution other than the Bank, the Borrower shall pay to the Bank at
the time of such prepayment a non-refundable early termination fee of $35 (if
unsecured) $75 (if secured).

 

TECHNICAL COMMUNICATIONS CORPORATION

 

Page 1 of 3

--------------------------------------------------------------------------------

  5. Late Fee. If the entire amount of any required principal and/or interest is
not paid in full within ten (10) days after the same is due (whether as a result
of demand or otherwise) the Borrower shall pay to the Bank a late fee equal to
five percent (5%) of the required payment; provided that such late fee shall be
reduced to two percent (3%) of any required principal and interest payment that
is not paid within fifteen (15) days of the date it is due if the Note is
secured by a mortgage on an owner-occupied residence.

 

  6. Fees and Expenses. The Borrower will pay all expenses incurred by the
Holder in connection with the preparation of the Loan Documents, the making of
the loan evidenced by this Note, and the enforcement of the rights of the Holder
in connection with this Note and the Loan Documents, including, but not limited
to, the reasonable fees of its counsel (which may include costs allocated by the
Holder’s internal legal department), plus the disbursements of said counsel. The
Borrower further agrees to pay to the Holder on demand all reasonable fees,
costs and expenses incurred by the Holder in connection with the administration
of this Loan, including, without limitation, overnight courier fees, lien search
fees, filing and recording fees, and other fees and charges as provided in the
Loan Agreement.

 

  7. Pledge to Federal Reserve. Bank may at any time pledge or assign all or any
portion of its rights under the loan documents including any portion of the
promissory note to any of the twelve (12) Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or
assignment or enforcement thereof shall release Bank from its obligations under
any of the loan documents.

 

  8. Right of Setoff. The Borrower hereby grants to the Bank, a continuing lien,
security interest and right of setoff as security for all liabilities and
obligations to the Bank, whether now existing or hereafter arising, upon and
against all deposits, credits, collateral and property, now or hereafter in the
possession, custody, safekeeping or control of the Bank or any entity under the
control of Bank of America Corporation and its successors and assigns or in
transit to any of them. At any time, without demand or notice (any such notice
being expressly waived by the Borrower), the Bank may setoff the same or any
part thereof and apply the same to any liability or obligation of the Borrower
and any guarantor even though unmatured and regardless of the adequacy of any
other collateral securing the Loan. ANY AND ALL RIGHTS TO REQUIRE THE BANK TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH
DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER OR ANY GUARANTOR, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

  9. Replacement of Note. Upon receipt of an affidavit of an officer of the Bank
as to the loss, theft, destruction or mutilation of the Note or any other
security document which is not of public record, and, in the case of any such
loss, theft, destruction or mutilation, upon cancellation of such Note or other
security document, the Borrower will issue, in lieu thereof, a replacement note
or other security document in the same principal amount thereof and otherwise of
like tenor.

 

  10. Waiver. The Borrower expressly waives diligence, demand, presentment for
payment, notice of nonpayment, protest and notice of dishonor, and all rights
under any applicable statute of limitations.

 

  11. Joint and Several Obligations. If this Note is signed by more than one
Borrower, all obligations of the Borrower are their joint and several
obligations.

 

  12. Choice of Law. This Note and the rights and obligations of the parties
hereunder shall be construed and interpreted in accordance with the laws of the
Commonwealth of Massachusetts (The “Governing State”) (excluding the laws
applicable to conflicts or choice of law.)

 

  13. WAIVER OF JURY TRIAL; DAMAGES. THE BORROWER AND THE BANK (BY ACCEPTANCE OF
THIS NOTE) MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE
RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED
TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY,
INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF THE BANK RELATING TO THE ADMINISTRATION OF THE LOAN OR
ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NEITHER PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT,
OR ATTORNEY OF THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.
THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE BANK TO ACCEPT THIS NOTE
AND MAKE THE LOAN.

 

TECHNICAL COMMUNICATIONS CORPORATION

 

Page 2 of 3

--------------------------------------------------------------------------------

The provisions of this Note shall bind the heirs, executors, administrators,
assigns and successors, as applicable, of the Borrower and shall inure to the
benefit of the Bank, its successors and assigns.

 

IN WITNESS WHEREOF, the Borrower has executed or caused this Note to be duly
executed, as a sealed instrument.

 

WITNESS:

 

   

TECHNICAL COMMUNICATIONS CORPORATION

/s/ William N. Grinnell

--------------------------------------------------------------------------------

 

By:

 

/s/ Michael P. Malone

--------------------------------------------------------------------------------

   

Name:

 

Michael P. Malone

   

Title:

 

Chief Financial Officer/Treasurer

 

TECHNICAL COMMUNICATIONS CORPORATION

 

Page 3 of 3