Exhibit 10.1

 

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SBA Loan# 91780070 - 03 SBA Loan Name Section 7(a)(36) of the Small Business
Act, as amended, for SBA to guarantee 100% of a Paycheck Protection Program
(PPP) Date Loan Amount $474,400.00 Interest Rate 1.00% Borrower TECHNICAL
COMMUNICATIONS CORPORATION D Operating Company NIA Lender Hometown Bank Page 1
/4 U.S. Small Business Administration NOTE 1. PROMJSE TO PAY: D o l l ar s , In
return for the Loan , Borrower promises to pay to the order of Lender the amount
of FOUR HUNDRED SEVENTY FOUR THOUSAND FOUR HUNDRED interest on the unpaid
principal balance, and all other amounts required by this Note . 2 . DEFINITIONS
: "Collateral" means any property taken as security for payment of this Note or
any guarantee of this Note. "Deferral Period" means the period beginning on the
date of this Note and ending on six months from the date of Note. "Gua rantor "
means each person or entity that signs a guarantee of payment of this Note. "
Loan" means the loan evidenced by this Note. " Loan Documents" means the
documents related to this loan signed by Borrower, any Guarantor, or anyone who
pledges collateral. "Program Rules" means all statutes applicable to the
Paycheck Protection Program of the Small Business Act ( 15 U . S . C . † 636 ),
as amended by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
(P . L . 116 - 136 ), and all regulations, rules and guidance applicable to the
Paycheck Protection Program at any time issued by the United States Department
of the Treasury or the SBA . "SBA" means the Small Business Administration, an
Agency of the United States of America.

 

 

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3 . PAYMENT TERMS: Borrower must make all payments at the place Lender
designates . The payment terms for this Note are: Compliance with Program Rules:
This Note and the Loan evidenced hereby is subject to the Program Rules. If the
terms of this Note conflict in any way with the Program Rules or fail to include
any term required under the Program Rules, this Note shall be deemed
automatically amended to eliminate any such conflict and/or to include such te1m
. Promptly following request by Lender, Borrower shall execute and deliver to
Lender any documentation deemed necessary by Lender to ensure that this Note and
the Loan evidenced hereby comply in all respect with the Program Rules.
Forgiveness. Borrower may apply to Lender for forgiveness of the amount due on
the 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 the Loan: Page 2 /4 (a) (b) (c) (d) Payroll costs Any payment of interest on
a covered mortgage obligation (which shall not include any prepayment of or
payment of principal on a covered mortgage obligation) Any payment on a covered
rent obligation Any covered utility payment 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
CARES ACT . Not more than 25 % of the amount forgiven can be attributable to non
- payroll costs . IfBorrower has received an advance under the SBA's Economic
Injury Disaster Loan Program, the amount of the advance shall be subtracted from
the loan forgiveness amount . Upon application of the Borrower , and provision
by Borrower of the documentation required under the Program Rules, Lender will
make a determination of the principal and interest amounts to be forgiven .
Maturity: Any remaining balance of this Note that Lender determines cannot be
forgiven under the Program Rules shall be due and payable in full on the second
anniversary of the date of the Note . Interest: Interest on this Note shall
begin to accrue on the date hereof at the interest rate set forth above. The
interest rate is fixed and will not change during the term of this Note.
Interest shall be computed on an actual /365 simple interest basis; that is by
multiplying the interest rate by the outstanding principal balance, multiplying
the resulting product by the actual number of days the principal balance is
outstanding and dividing the resulting product by 365. Deferral Period: No
payments will be due during the Deferral Period, provided that interest will
continue to accrue during the Deferral Perio d . Such accrued interest shall be
paid in 18 consecutive monthly installments along with the principal
installments described below . Payment Terms: Borrower shall repay the principal
balance of this Note in 18 consecutive equal monthly installments, with the
first such installment due on the day immediately following the expiration of
the Deferral Period and the remaining payments due on the same day of each month
thereafter. Borrower shall pay all accrued interest on each day that a principal
installment is due . Lender will apply each installment payment first to pay
applicable late charges, then 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. Payment Schedule: Lender will provide Borrower with
a schedule of payments once the amounts to be forgiven have been determined and
the principal balance to be repaid becomes known. Prepayment : Borrower may
prepay this Note at any time without penalty . Borrower may prepay 20 percent or
less of the unpaid principal balance of this Note 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) (b) (c) Give Lender prior written notice;
Pay all accrued interest; and 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 clause (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 .

 

 

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Late Charges : If any payment due on this Note is not paid within fifteen days
of its due date, Borrower will pay to Lender a late charge equal to the greater
of $ 15 . 00 and 5 % of the late payment . To the extent any late fee otherwise
payable under this Note is prohibited or exceeds any limit provided by
applicable law, including the Program Rules, such late fee shall be reduced to
the maximum amount allowed . 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. Business Day : If
any installment of principal and interest is due on a day other than a day on
which Lender is open for the conduct of normal banking activities, such
installment shall be due on the next day for which Lender is open for the
conduct of normal banking activities . Electronic Signatures ; Counterparts .
This Note and all documents delivered in connection herewith (including
Borrower's application for the Loan) may be executed and/or transmitted
electronically or digitally (including, without limitation, via facsimile,
electronic mail in . pdf, DocuSign or similar platform) and shall be considered
originals and shall have the same legal effect, validity and enforceability as
manually - executed paper originals . This Note and all such other documents may
be executed in as many counterparts as necessary or convenient, including both
paper and electronic or digital counterparts, but all such counterparts are one
and the same document . For the avoidance of doubt, the authorization under this
paragraph includes, without limitation, use or acceptance by the parties of a
manually - executed counterpart which has been converted into electronic form
(such as scanned into a . pdf file), or an electronically or digitally signed
document converted into another format, for transmission, delivery and/or
retention . Upon request from Lender, and to the extent required by the Program
Rules, Borrower shall execute and deliver manually - executed originals of this
Note and such other documents . Other Debt Owed To Lender : No collateral
granted to Lender by Borrower to secure other debt owed to Lender by Borrower
shall secure this Note, notwithstanding any cross - collateralization provision
or similar provision in the documentation applicable to such other debt . 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. Fafls
to do anything required by this Note and other Loan Documents; B. Defaults on
any other loan with Lender; C. Does not preserve, or account to Lender's
satisfaction for, any of the Collateral or its proceeds; 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 'sability 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 'sability to pay this Note; L. Reorganizes,
merges, consolidates, or otherwise changes ownership or business structure
without Lender 's prior written consent; or Page 3 /4

 

 

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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 any Bonower or Guarantor; C. File suit
and obtain judgment; D. Take possession of any Collateral; or E. Sell, lease, or
otherwise dispose of, any Collateral at public or private sale, with or without
advertisement. 6. LENDER'S GENERAL POWERS: Without notice and without Borrower's
consent, Lender may: A. Bid on or buy the Collateral at its sale or the sale of
another lienholder, at any price it chooses; B. Incur expenses to collect
amounts due under this Note, enforce the terms of this Note or any other Loan
Document, and preserve or dispose of the Collateral . Among other things, the
expenses may include payments for property taxes, prior liens, insurance,
appraisals, environmental remediation costs, and reasonable attorney 'sfees and
costs . If Lender incurs such expenses, it may demand immediate repayment from
Borrower or add the expenses to the principal balance ; C. Release anyone
obligated to pay this Note; D. Compromise, release, renew, extend or substitute
any of the Collateral; and E. Take any action necessary to protect the
Collateral or 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, Bonower 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 . P ag e 4 /4

 

 

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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 unenfo
rceable , all other patis 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. STAI E -
SPECIFJC PROVIS_IONS: NA 11. BORROWER 'S NAME{S) AND SIONATURE{S) : By signing
this Note , Borrower additionally certifies to Lender that: A. Borrower has
received a copy of the SBA Paycheck Protection Program Autho r ization ; B.
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 forgiveness of the loan, as
described in Paragraph 3 above) ; C. Borrowe r will keep books 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; D. Borrower will not ,
without Lender's consent, change its ownership structure , make any distribution
of company assets that would adversely affect its financial condition or
transfer (including by pledge) or dispose of any assets, except in the ordinary
course of business ; and E. Borrower will use the proceeds of the Loan for the
purposes stated in the SBA Paycheck Protection Program Authorization. By signing
below, each individual or entity becomes obligated under this Note as Borrower .
P ag e 5 /4 Borrower(s): B y :

 

 

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Borrower Certifications and Agreements Paycheck Protection Program Loan 1 of3
The undersigned is the duly elected, qualified, and acting Treasurer I CFO
TECHNICAL COMMUNICATIONS CORPORATION of ( "Borrower" ). In connectio n with
Borrower's submission of an application (the "Application") for a loan (the
"Loan") from Hometown Bank ("Lender") under the Paycheck Protection Program
("PPP") of the Small Business Act ( 15 U . S . C . † 636 ), as amended by the
Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), Borrower
hereby certifies, attests, confirms to and agrees with Lender as follows : 1.
The Application, the previously provided documentation showing Borrower's
calculation of its average monthly payroll costs for purposes of the
Application, and each supporting document showing compensation paid to
Borrower's employees in 2019 (or other period, if applicable) and provided by or
on behalf of Borrower to Lender to support the Application (the "Supporting
Documents") is accurate and complete in all material respects and, to the extent
previously filed with the United States Internal Revenue Service ("IRS"), is
identical in substance to the document filed with the IRS . 2. Borrower will
indemnify and hold Lender, and each of its officers, trustees, employees,
affiliates or agents (each, an "Indemnified Party"), harmless to the fullest
extent permitted by law, from and against any and all losses, claims, damages
and liabilities, joint or several, to which such Indemnified Party may become
subject under applicable law related to or arising out of any false statement by
Borrower in the Application or any of the Supporting Documents . 3. During 2019
, Borrower did not, and as of the date of the Application Borrower does not,
have more than 500 employees (including, for this purpose, the employees of any
company that is affiliated with Borrower and which employees must be aggregated
with Borrower's employees under the regulations and other guidance promulgated
or issued by the Small Business Administration ("SBA") and applicable to the
Application) . 4. Borrower acknowledges that it has received a copy of the
"Paycheck Protection Program (PPP) Information Sheet : Borrowers" (the "Fact
Sheet") issued by the United States Department of the Treasury ("Treasury") and
the Interim Final Rule published by the United States Small Business
Administration implementing the Paycheck Protection Program (the "Interim Rule")
and that Borrower has read and understands the Fact Sheet and the Interim Rule .
Borrower further acknowledges that (a) Borrower has the burden to document
expenditures made during the eight - week period described in the Fact Sheet
(the eight - week period beginning on the date the Lender makes the first
disbursement of the Loan to the Borrower) and the Interim Rule that may result
in forgiveness of the Loan in whole or in part, (b) not more than 25 percent of
the loan forgiveness amount may be attributable to non - payroll costs such as
interest on mortgages, rent and utilities ; (c) the amount of the Loan that may
be forgiven may be reduced as a result of Borrower's reduction in the number of
full - time equivalent employees or in the salaries and wages paid to employees,
(d) neither Lender nor any of its officers, trustees, employees, affiliates or

 

 

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agents has provided any assurance to Borrower that all or any portion of the
Loan will be forgiven, and (e) any portion of the Loan that is not forgiven
shall be due and payable in full on the second anniversary of the date of the
Note . Borrower also acknowledges that the PPP is subject to change due to
reasons outside Lender's control, including as a result of changes in
legislation, regulation or formal or informal guidance from Treasury or the SBA
(the "PPP Program Rules"), and such changes may be effective retroactively to
apply with respect to the Application and the Loan . Borrower further
acknowledges and agrees that Lender shall have no liability to Borrower as a
result of any change in the PPP Program Rules . 2 of3 5. Borrower acknowledges
receipt of the attached SBA E - Tran Paycheck Protection Program Authorization
with respect to the Loan. 6. Borrower acknowledges that if Borrower defaults on
the loan, SBA may be required to pay Lender under the guarantee provided by SBA
to Lender under the PPP and PPP Program Rules, and SBA may then seek recovery on
the Loan (to the extent any balance remains after loan forgiveness) . 7.
Borrower agrees with Lender to keep books 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 . Without limiting the scope of the preceding
sentence, Borrower will provide to Lender, upon Lender's request from time to
time during the eight - week Covered Period (as defined below) relevant to loan
forgiveness, a schedule in a form reasonably acceptable to Lender showing
Borrower's calculation of amounts eligible to be included in the calculation of
the "expected forgiveness amount" as that term is used in Section 1106 of the
CARES Act . 8. Borrower agrees that not more than fifteen ( 15 ) days after the
expiration of the Covered Period as defined in Section 1106 of the CARES Act,
Borrower will deliver to Lender an accurate and complete application for
forgiveness of the Loan in accordance with Section 1106 , which application will
show in reasonable detail all of the data relevant to determining the extent to
which (if at all) the Loan qualifies for forgiveness under Section 1106 of the
CARES Act . 9. Without prior written notification to, and the consent of,
Lender, Borrower will not make any changes to its ownership structure, make any
distribution of company assets that would adversely affect its financial
condition, or transfer , pledge or dispose of any assets, except in the ordinary
course of business .

 

 

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10. Borrower acknowledges and agrees that (a) neither Lender nor any of its
officers, directors, trustees, employees, affiliates or agents has provided any
financial advice to Borrower or any of its owners, directors, officers or
affiliates in connection with the PPP, including the Application and the Loan or
whether Borrower can reasonably expect that some or all of the Loan may be
forgiven ; (b) neither Lender nor any of its officers, [directors/trustees],
employees, affiliates or agents has recommended that the Borrower submit the
Application or accept the Loan ; (c) Borrower has calculated without relying on
any advice from Lender the amount of Borrower's "average monthly payroll costs"
as that term is used in the Application ; (d) Borrower will calculate without
relying on any advice from Lender the portion of the Loan that Borrower believes
should be forgiven under Section 1106 of the CARES Act and the PPP Program Rules
; (e) interpretation of the PPP Program Rules is not well developed and
subsequent guidance from the Treasury or SBA may differ from the generally
accepted interpretations of PPP Program Rules as of the time the Application was
submitted and the Loan is closed and funded ; and (f) Lender shall have no
liability fo Borrower as a result of any miscalculation made by or on behalf of
Borrower for PPP purposes, including with respect to the average monthly payroll
costs or the amount of the Loan that may be forgiven, arising out of a change in
the interpretation of the PPP Program Rules or otherwise . 11. The person whose
name is set forth below is a duly elected, qualified, and acting officer of
Borrower as of the date hereof and as of the date of the Application, holding
the office set forth opposite his/her name, and the signature set forth opposite
his/her name is his/her true signature . 3 of3 Signature: ///JAi Dated: ol.J/J ,
) o 0 Printed Name: Michael P. Malone Printed Title: Treasurer / CFO
Attachments: SBA E - Tran Loan Approval document with respect to Loan