UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 23, 2020
TRANS-LUX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-2257 13-1394750
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
135 East 57th Street, 14th Floor, New York, NY 10022
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code: (800) 243-5544
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
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.
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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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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: May 4, 2020 |
TRANS-LUX CORPORATION |
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By: |
/s/ Todd Dupee |
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Name: |
Todd Dupee |
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Title: |
Senior Vice President and Chief Accounting Officer |
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EXHIBIT INDEX
Exhibit Number Description
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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Exhibit 10.1
U.S. Small Business Administration
NOTE
SBA Loan #
1259977203
SBA Loan Name
TRANSLUX CORPORATION
Date
4/20/2020
Loan Amount
810,800.00
Interest Rate
1.00%
Borrower
TRANSLUX CORPORATION
Operating Company
Lender
Enterprise Bank & Trust
1.
PROMISE TO PAY
In return for the Loan, Borrower promises to pay to the order of Lender the amount of eight hundred ten thousand and eight hundred 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.
“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.
“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:
The Repayment Terms herein are subject to Sections 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES ACT).
Maturity: This Note will mature in 2 years from the date of the Note.
The interest rate shall be 1.00%.
The interest rate identified in the Note may not be changed during the life of the Loan unless changed in accordance with SOP 50 10.
Payment: 6 Months of Principal and Interest will be deferred.
Unless otherwise determined, Borrower must pay principal and interest payments of $45,616.11 monthly beginning 7 months from the date of Note; payments must be made on the tenth calendar day in the months they are due.
Lender will apply each installment payment first to pay interest accrued to the day Lender receives the payment, then to bring principal current, then to pay any late fees, and will apply any remaining balance to reduce principal.
Lender must adjust the payment amount at least annually as needed to amortize principal over the remaining term of the Note.
All remaining principal and accrued interest is due and payable 2 years from date of Note.
Late Charge: If a payment on this Note is more than 10 days late, Lender may charge Borrower a late fee of up to 5 % of the unpaid portion of the regularly scheduled payment.
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;
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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
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;
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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 to 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, 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.
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.
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 unenforceable, all other parts remain in effect.
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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.
STATE-SPECIFIC PROVISIONS:
ORAL AGREEMENTS. ORAL OR UNEXECUTED AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.
11.
BORROWER’S NAME(S) AND SIGNATURE(S):
By signing below, each individual or entity becomes obligated under this Note as Borrower.
TRANSLUX CORPORATION
By: /s/ Todd Dupee
Todd Dupee, Senior Vice President of TransLux Corporation
By: /s/ Thomas E. Durkin, III
Thomas E. Durkin, III, Executive Vice President/Secretary of TransLux Corporation
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