Exhibit 10.1


 


Silicon Valley Bank


 


U.S. Small Business
Administration


Paycheck Protection
Program


Note


 


	SBA Loan No.	5518817107
	SBA Loan Name	Borrower Legal Name	Lantronix, Inc.
	DBA	 
	Date	4/21/2020
	Loan Amount	$ 2437714
	Interest Rate	1.0% Per Annum
	Borrower	Lantronix, Inc.
	Operating Company	Not applicable
	Lender	Silicon Valley Bank


 


 


	1.	PROMISE TO PAY.






 


In
return for the Loan, Borrower promises to pay to the order of Lender the amount of $2437714
Dollars, 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.


 


“CARES
Act” means the Coronavirus Aid, Relief, and Economic Security Act.


 


“Guarantor”
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.


 


“Paycheck
Protection Program” means loan program created by Section 1102 of the CARES Act.


 


 


 


 






    	 	1	 



     

    

 


“Per
Annum” means for a year deemed to be comprised of 360 days.


 


“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:




 


	A.	Conditions Precedent to Disbursement of Loan Proceeds.




 


Before the funding of the Loan,
the following conditions must be satisfied:


 


1. Lender has approved the
request for the Loan.


 


2. Lender has received approval from SBA to fund the Loan.




 


	B.	No Payments During Deferral Period. There shall be no payments due by Borrower during the six- month period beginning on
the date of this Note (the “Deferral Period”). However, during the Deferral Period interest will accrue at the Interest
Rate on the unpaid principal balance computed on the basis of the actual number of days elapsed in a year of 360 days.




 


	C.	Principal and Interest Payments. Commencing one month after the expiration of the Deferral Period, and continuing on the
same day of each month thereafter until the Maturity Date, Borrower shall pay to Lender monthly payments of principal and interest,
each in such equal amount required to fully amortize the principal amount outstanding on the Note on the last day of the Deferral
Period by the Maturity Date.






 


	D.	Maturity Date. On the date which is twenty-four (24) months from the date of this Note (the “Maturity Date”),
Borrower shall pay to Lender any and all unpaid principal plus accrued and unpaid interest plus interest accrued during the Deferral
Period. This Note will mature on the Maturity Date.






 


	E.	Not a Business Day. If any payment is due on a date for which there is no numerical equivalent in a particular calendar
month then it shall be due on the last day of such month. If any payment is due on a day that is a Saturday, Sunday or any other
day on which California chartered banks are authorized to be closed, the payment will be made on the next business day.






 


	F.	Payment Allocation. Payments shall be allocated among principal and interest at the discretion of Lender unless otherwise
agreed or required by applicable law (including the CARES Act). Notwithstanding, in the event the Loan, or any portion thereof,
is forgiven pursuant to the Paycheck Protection Program under the federal CARES Act, the amount so forgiven shall be applied to
principal.






 


	F.	Prepayments. Borrower may prepay this Note at any time without payment of any penalty or premium.






 


 


 


 






    	 	2	 



     

    

 


 


	G.	Borrower Certifications.






 


Borrower certifies to Lender as follows:


 


	 	1.	Current economic uncertainty makes this Loan necessary to support the ongoing operations of Borrower.






 


		2.	Loan funds will be used by Borrower to retain its workers
and maintain its payroll or make its mortgage payments, lease payments, and utility payments.





 


		3.	For the period beginning on February 15, 2020 and ending
on December 31, 2020, Borrower did not receive, and agrees it will not apply for or receive, another loan under the Paycheck Protection
Program.





 


		4.	Borrower was in operation on February 15, 2020 and (i)
had employees for whom it paid salaries and payroll taxes or (ii) paid independent contractors as reported on a 1099-Misc.





 


		5.	Borrower has reviewed and understands Sections 1102 and
1106 of the CARES Act and the related guidelines and has completed the Application, including Borrower’s eligibility in
conformity with those provisions.





 


		6.	Borrower has taken its “affiliates” (as defined
by the SBA) into account when determining the number of employees and the total amount of loans permitted under the Paycheck Protection
Program.





 


		7.	Borrower is a small business concern and is eligible to
receive a covered loan.





 


		8.	The person who has completed and signed the application,
this Note and the Loan Documents has been validly authorized by Borrower to enter into borrowings on behalf of Borrower.





 


	H.	Agreements.






 


Borrower understands and agrees, and waives and releases
Lender, its affiliates and their respective directors, officers, agents and employees, as follows:


 


		1.	The Loan will be made under the SBA’s Paycheck Protection
Program. Accordingly, this Note and the other Loan Documents must be submitted to and approved by the SBA. There is limited funding
available under the Paycheck Protection Program and accordingly, all applications submitted will not be approved by the SBA.





 


		2.	Lender is participating in the Payroll Protection Program
to help businesses impacted by the economic impact from COVID-19. However, Lender anticipates high volumes and there may be processing
delays and system failures along with other issues that interfere with submission of Borrower’s application to SBA. Lender
does not represent or guarantee that it will submit the application while SBA funding remains available under the Payroll Protection
Program or at all. Borrower hereby agrees that Lender is not responsible or liable to Borrower or any of its affiliates (i) if
the Lender does not submit Borrower’s application to the SBA until after the date that SBA stops approving





 


 


 


 






    	 	3	 



     

    

 


 


		 	applications under the Paycheck Protection Program, for
any reason or (ii) if the application is not processed by Lender. Borrower forever releases and waives any claims against Lender,
its affiliates and their respective directors, officers, agents and employees concerning failure to obtain the Loan. This release
and waiver applies to, but is not limited to, any claims concerning Lender’s (i) pace, manner or systems for processing
or prioritizing applications, or (ii) representations by Lender regarding the application process, the Paycheck Protection Program,
or availability of funding. This agreement to release and waiver supersedes any prior communications, understandings, agreements
or communications on the issues set forth herein.



 


		3.	Forgiveness of the Loan is only available for principal
that is used for the limited purposes that expressly qualify for forgiveness under SBA requirements, and that to obtain forgiveness,
Borrower must request forgiveness from the Lender, provide documentation in accordance with the SBA requirements, and certify
that the amounts Borrower is requesting to be forgiven qualify under those requirements. Borrower also understands that Borrower
shall remain responsible under the Loan for any amounts not forgiven, and that interest payable under the Loan will not be forgiven,
but that the SBA may pay the Loan interest on forgiven amounts.





 


		4.	Forgiveness of the Loan is not automatic and Borrower must
request forgiveness of the Loan from Lender. Borrower is not relying on Lender for its understanding of the requirements for forgiveness
such as eligible expenditures, necessary records/documentation, or possible reductions due to changes in number of employees or
compensation. Borrower agrees that will consult the SBA’s program materials and consult with its own counsel regarding the
criteria forgiveness.





 


		5.	The Loan Documents are subject to review, and Borrower
may not receive the Loan. The Loan also remains subject to availability of funds under the SBA’s Payment Protection Program,
and to the SBA issuing an SBA loan number.





 


		6.	Borrower's liability under this Note will continue with
respect to any amounts SBA may pay Bank based on an SBA guarantee of this Note. Any agreement with Bank under which SBA may guarantee
this Note does not create any third party rights or benefits for Borrower and, if SBA pays Bank under such an agreement, SBA or
Bank may then seek recovery from Borrower of amounts paid by SBA.





 


		7.	Lender reserves the right to modify the Note Amount based
on documentation received from Borrower.





 


		8.	Borrower’s execution of this Note has been duly authorized
by all necessary actions of its governing body. The person signing this Note is duly authorized to do so on behalf of Borrower.





 


		9.	This Note shall not be governed by any existing or future
credit agreement or loan agreement with Lender. The liabilities guaranteed pursuant to any existing or future guaranty in favor
of Lender shall not include this Note. The liabilities secured by any existing or future security instrument in favor of Lender
shall not include the Loan.





 


 


 



    	 	4	 



     

    




 


		10.	The proceeds of the Loan will be used to retain workers
and maintain payroll or make mortgage interest payments, lease payments, and utility payments, as specified under the Paycheck
Protection Program Rule. Borrower understands that if the funds are knowingly used for unauthorized purposes, the federal government
may hold Borrower legally liable, such as for charges of fraud.





 


Electronic Execution of Loan Documents.


 


The words “execution,”
“signed,” “signature” and words of like import in this Note and any Loan Document shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity and
enforceability as a manually executed signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent
and as provided for in any applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions
Act.


 


	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 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’s ability 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’s ability to pay this Note;





 


		L.	Reorganizes, merges, consolidates, or otherwise changes
ownership or business structure without Lender’s prior written consent; or





 


 


 



    	 	5	 



     

    




 


		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 Borrower 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’s fees 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; GOVERNING LAW; FORUM SELECTION.






 


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.


 


 


 



    	 	6	 



     

    




 


	8.	SUCCESSORS AND ASSIGNS.






 


Under this Note, Borrower and Operating Company
includes its successors, 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.



 


		E.	If any part of this Note is unenforceable, all other parts
remain in effect.





 


		F.	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 the SBA is
not the holder, this Note shall be governed by and construed in accordance with the laws of the State of California where the
main office of Lender is located. MATTERS REGARDING INTEREST TO BE CHARGED BY LENDER AND THE EXPORTATION OF INTEREST SHALL BE
GOVERNED BY FEDERAL LAW (INCLUDING WITHOUT LIMITATION 12 U.S.C. SECTIONS 85 AND 1831(u) AND THE LAW OF THE STATE OF
CALIFORNIA. Borrower agrees that any legal action or proceeding with respect to any of its obligations under this Note may be
brought by Lender in any state or federal court located in the State of California, as Lender in its sole discretion may
elect. Borrower submits to and accepts in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of those courts. Borrower waives any claim that the State of California is not a convenient forum or the proper
venue for any such suit, action or proceeding. The extension of credit that is the subject of this Note is being made by
Lender in California.


 


 


 



    	 	7	 



     

    




 


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






 


BORROWER
CERTIFIES THAT THE INFORMATION PROVIDED IN THIS APPLICATION AND THE INFORMATION PROVIDED IN ALL SUPPORTING DOCUMENTS AND
FORMS IS TRUE AND ACCURATE IN ALL MATERIAL RESPECTS. BORROWER UNDERSTANDS THAT KNOWINGLY MAKING A FALSE STATEMENT TO OBTAIN A
GUARANTEED LOAN FROM SBA IS PUNISHABLE UNDER THE LAW, INCLUDING UNDER 18 USC 1001 AND 3571 BY IMPRISONMENT OF NOT MORE THAN
FIVE YEARS AND/OR A FINE OF UP TO $250,000; UNDER 15 USC 645 BY IMPRISONMENT OF NOT MORE THAN TWO YEARS AND/OR A FINE OF NOT
MORE THAN $5,000; AND, IF SUBMITTED TO A FEDERALLY INSURED INSTITUTION, UNDER 18 USC 1014 BY IMPRISONMENT OF NOT MORE THAN
THIRTY YEARS AND/OR A FINE OF NOT MORE THAN $1,000,000.


 


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


 


	Funds will be credit
to your Deposit Account Number ending in: 1468	 	BORROWER:
	 	 	 	 
	 	 	By:	/s/ Jeremy Whitaker                
	 	 	Name:	Jeremy Whitaker
	 	 	Title:	Authorized Signer
	 	 	Date:	4/21/20
	 	 	 	 






 


 


 


 


 






    	 	8