EXHIBIT 10.101

 

PAYCHECK PROTECTION PROGRAM LOAN AGREEMENT

 

This Paycheck Protection Program Loan Agreement (this “Agreement”), made and
entered into by and between ______ DIGITAL ALLY, INC
_____________________________________________________________, a Nevada
___________ entity (collectively, whether one or more, the “Borrower”) and
FIRST-CITIZENS BANK & TRUST COMPANY (“Lender”).

 

RECITALS:

 

Borrower has requested that Lender provide financing to Borrower, and Lender is
willing to make a loan to Borrower subject to the terms and conditions set forth
in this Agreement; NOW, THEREFORE, for good and valuable consideration contained
in this Agreement, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto, intending to be legal bound, agree to be bound as follows:

 

ARTICLE I

LOAN AND NOTE

 

1.1 LOAN. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES
Act”) has authorized the funding of loans under the Paycheck Protection Program
which are fully guaranteed by the U.S. Small Business Administration (“SBA”),
pursuant to which Lender has agreed to make SBA Loan Number ____34804373-01
_______________________ in the original principal amount of ____ ONE MILLION
FOUR HUNDRED EIGHTEEN THOUSAND NINE HUNDRED AND NO/100
________________________________________________________________ DOLLARS
(___$1,418,900.00_____________________) (the “Loan”) to Borrower subject to the
terms and conditions

contained in this Agreement.

 

   

 

 

1.2 NOTE. Borrower has executed and delivered to Lender that certain SBA Note
(the “Note”), dated of even date herein, which evidences the indebtedness of
Borrower to Lender in the original principal amount of
_______________________________________________________ DOLLARS
(__________________________). Payment of the Note shall be made at Lender’s
office at 100 E. TRYON ROAD, DAC 90, ATTN: SBA LOAN OPERATIONS, RALEIGH, NORTH
CAROLINA 27603 as set forth in the Note, unless otherwise directed in writing by
Lender. The Note shall bear interest at the fixed rate of ONE PERCENT (1.00%)
per annum, in accordance with the terms of the Note. The term “Note” as used in
this Agreement shall be inclusive of any and all future renewals, extensions,
increases, substitutions and other modifications of the Note.

 

1.3 LOAN FORGIVENESS. Pursuant to Section 1106 of the CARES Act, the Loan can be
forgiven up to the full principal amount of the Loan and any accrued interest if
Borrower (i) uses all proceeds for eligible purposes as set forth in the CARES
Act; (ii) maintains employment levels; and (iii) maintains compensation levels.
Borrower agrees and acknowledges that SBA will issue further guidance on loan
forgiveness under the CARES Act and that Lender has made no representations and
warranties regarding the applicability, eligibility or determination of
forgiveness of the Loan under the CARES Act. Borrower agrees and understands
that if the Loan proceeds are used for any other unauthorized purposes, the
federal government may pursue criminal fraud charges against Borrower and all
principals of Borrower. Borrower acknowledges that knowingly making a false
statement to obtain a guaranteed loan from SBA is punishable 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.

 

ARTICLE II

CONDITIONS OF LENDING

 

2.1 CONDITIONS PRECEDENT. The obligation of Lender to make the Loan to Borrower
is expressly subject to the performance by Borrower of all of their obligations
under this Agreement and to the following further conditions: (i) Borrower shall
execute and deliver to Lender this Agreement, the Note, and any and all
documents, applications, certifications or other agreements evidencing or
otherwise related to the Loan (collectively, the “Loan Documents”) which may be
required in the sole and absolute discretion of Lender; (ii) all representations
and warranties of Borrower as set forth in this Agreement, the Note and the Loan
Documents are true and correct.

 

2.2 USE OF PROCEEDS. Borrower shall only use the proceeds of the Loan for
payroll costs, costs related to the continuation of group health care benefits
during periods of paid sick, medical, or family leave, insurance premiums,
employee salaries, commissions or similar compensations, payments of interest on
any mortgage obligation (which shall not include any prepayment of or payment of
principal on a mortgage obligation), utilities, rent (including rent under a
lease agreement) and interest on any other debt obligations that were incurred
prior to February 15, 2020. Borrower shall not use any proceeds of the Loan for
(i) personal, family or household purposes; (ii) payments, distributions or
loans to Borrower or any associate or principal of Borrower, except for
compensation actually rendered at a fair and reasonable rate; (iii) payments of
delinquent Internal Revenue Service (“IRS”) withholding/payroll taxes; or (iv)
payments towards personal debt.

 

   

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BORROWER

 

Borrower, understanding that Lender is relying upon Borrower’s representations
and warranties set forth below in making the Loan, represents and warrants to
Lender as follows:

 

3.1 POWER AND AUTHORIZATION. Borrower has duly authorized the execution and
delivery of this Agreement, the Note, and the Loan Documents, and the execution
and delivery to Lender thereof will not violate any applicable law or agreement
to which Borrower is a party to or may be bound or affected by.

 

3.2 BINDING AGREEMENTS. This Agreement, the Note and the Loan Documents
constitute legal, valid and binding obligations of Borrower which are
enforceable against the Borrower by Lender.

 

3.3 VALID ORGANIZATION AND GOOD STANDING. For any Borrower which is an entity,
they are duly organized, validly existing and in good standing under the laws of
the State(s) in which they were formed and authorized to conduct business, have
the full power and authority to carry on its business operations and are duly
licensed or qualified under the laws of each jurisdiction in which they operate.

 

3.4 OWNERSHIP INTERESTS. All ownership interests of Borrower, including, but not
limited to, membership interests, stock, options, warrants and any and all other
agreements affecting the ownership, control or voting rights of such ownership
interests of Borrower are properly and accurately reflected in this Agreement,
the Note and the Loan Documents.

 

3.5 FINANCIAL INFORMATION. The payroll reports, disclosures, statements and
other financial information (collectively, the “Financial Information”)
submitted by Borrower in writing to Lender in connection with the Loan fairly
and accurately reflect the payroll and other financial condition of Borrower for
the periods defined therein.

 

3.6 ILLEGAL ACTIVITY. Borrower is not engaged in any activity that is illegal
under federal, state or local law, including business operations which directly
or indirectly support the end use of marijuana, whether medicinal or
recreational.

 

3.7 ACCURACY OF REPRESENTATIONS AND WARRANTIES. Any and all representations and
warranties by Borrower contained in this Agreement, the Note and the Loan
Documents are true and correct. There is no material fact or circumstance that
Borrower has knowledge of which has not been disclosed to Lender.

 

ARTICLE IV

COVENANTS OF BORROWER

 

Until all the obligations under the Loan as evidenced by this Agreement, the
Note and the Loan Documents have been performed and paid in full, Borrower
covenants and agrees as follows:

 

4.1 MAINTENANCE AND EXISTENCE. For any Borrower which is a corporate entity,
they shall remain in good standing under the laws of the State(s) in which they
were formed and conduct business. Further, Borrower shall comply with all valid
and applicable statutes, ordinances, rules and regulations and shall keep in
force and effect all licenses, permits, bonds and other agreements or approvals
necessary to conduct business.

 

4.2 PATRIOT ACT. Borrower certifies that they are, and will remain, in
compliance with the United States of America Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Patriot Act”) and shall
continue to provide evidence satisfactory to and sufficient for the Lender to
verify the identity of the Borrower, as required under the Patriot Act. Borrower
shall notify Lender promptly of any change in such information.

 

   

 

 

4.3 ERRORS AND OMISSIONS. Borrower shall, during and after the closing of the
Loan, execute and deliver to Lender any and all documents, reports, financial
statements, affidavits, certifications or other agreements to correct,
supplement or modify the Loan Documents which may be reasonably requested by
Lender. Borrower shall not be obligated to execute and deliver to Lender any
documents or agreements which contain any covenant, provision, term or condition
which constitutes a material and adverse variance from the Loan Documents.

 

4.4 STRICT COMPLIANCE. Borrower shall (i) perform and comply, in a timely
manner, with all terms, conditions, and provisions of this Agreement, the Note
and the Loan Documents; and (ii) immediately notify Lender in writing of an
Event of Default in connection with this Agreement, the Note and the Loan
Documents.

 

ARTICLE V

EVENTS OF DEFAULT

 

5.1 EVENT OF DEFAULT. An event of default (an “Event of Default”) shall be
deemed to have occurred hereunder upon any of the following:

 

(a) Nonpayment, when due, of any principal, accrued interest, premium, fee or
other charge due under the Note;

(b) Any representation, warranty, or statement made or furnished to Lender by or
on behalf of Borrower under this Agreement, the Note and the Loan Documents is
false or misleading in any material respect, or becomes false or misleading in
any material respect at any time thereafter;

 

(c) The failure or violation of Borrower to keep, perform, observe, or comply
with any covenant, agreement, term, or condition required under provisions of
this Agreement, the Note or the Loan Documents;

 

(d) The occurrence of any event or condition which constitutes a default under
the terms of the Note or the Loan Documents;

 

(e) If this Agreement, the Note or the Loan Documents cease to be in full force
and effect;

 

(f) If Borrower revokes or disputes the validity or enforceability of their
obligations under this Agreement, the Note or the Loan Documents;

 

(g) If Borrower (i) makes a general assignment for the benefit of its creditors;
(ii) files a voluntary petition in bankruptcy; (iii) is adjudicated as bankrupt
or insolvent; (iv) files any petition or answer seeking, consenting to, or
acquiescing in, reorganization, arrangement, composition, liquidation,
dissolution or similar relief, under any present or future statute, law or
regulation; (v) files an answer admitting or failing to deny the material
allegations of the petition against it for any such relief; or (vii)
discontinues business.

 

ARTICLE VI

REMEDIES ON EVENT OF DEFAULT

 

6.1 DECLARE NOTE DUE. Upon the occurrence of an Event of Default as defined in
this Agreement, the Note or the Loan Documents, Lender may declare the entire
unpaid balance of the Note and all other indebtedness of Borrower to Lender,
including but not limited to accrued interest, fees and other costs to be
immediately due and payable without presentment, protest or further demand or
notice of any kind, all of which are hereby expressly waived. Lender may, in
addition to declaring the entire unpaid balance of the Note immediately due and
payable, exercise each and every right and remedy granted to Lender under this
Agreement, the Note, the Loan Documents and under any other applicable law or at
equity. The rights, remedies, powers and privileges provided for in this
Agreement shall not be deemed exclusive but shall be cumulative and shall be in
addition to all other rights, remedies, powers and privileges in Lender’s favor
at law or in equity.

 

   

 

 

6.2 RIGHT OF SETOFF. Following an Event of Default, to the extent permitted by
applicable law and under the CARES Act, Lender shall have a right of setoff
against any and all of Borrower’s accounts with Lender, including but not
limited to any balance of any deposit, trust or agency account, or any other
bank account with Lender. Lender may administratively freeze all such accounts
to protect its rights under this Agreement.

 

6.3 RELATIONSHIP TO STATE LAW. Notwithstanding any other provision of this
Agreement, the Note or the Loan Documents, if any provision of applicable law
requires that Borrower be granted a longer notice period or a greater
opportunity to cure, that provision of law shall control; provided, however,
that the applicable notice period set forth in this Agreement, the Note or the
Loan Documents shall run concurrently with the notice period required by law.

 

6.4 NO WAIVER. Neither the failure nor delay on the part of Lender to exercise
any right, remedy, power or privilege under this Agreement, the Note or the Loan
Documents upon the occurrence of any Event of Default or otherwise shall operate
as a waiver thereof or impair any such right, remedy, power or privilege of
Lender. No course of dealing between Lender and Borrower shall operate as or be
deemed to constitute a waiver of Lender’s rights under this Agreement, the Note
or the Loan Documents or affect the duties or obligations of Borrower
thereunder.

 

ARTICLE VII

MISCELLANEOUS

 

7.1 INTEGRATED AGREEMENT. This Agreement, together with the Note and Loan
Documents, constitute the entire understanding and agreement of the parties as
to the matters set forth herein. The Loan Documents shall be construed as
integrated and complementary of each other, and as augmenting and not
restricting Lender’s rights, powers, and remedies. The Loan Documents supersede
all prior statements, agreements and understandings between the parties with
respect to the Loan.

 

7.2 AMENDMENTS AND APPROVALS. No amendment of any provision of this Agreement,
the Note, or any of the Loan Documents, nor consent by Lender to Borrower for
any departure thereof, shall be effective unless the same shall be in writing
and signed by Lender and Borrower.

 

7.3 NOTICES. Any and all notices, elections or demands permitted or required to
be given under this Agreement, the Note and the Loan Documents shall be in
writing, signed by or on behalf of the party giving such notice, election or
demand, and shall be deemed to have been properly given and shall be effective
upon being personally delivered, or upon being deposited in the United States
mail, postage prepaid, certified with return receipt required, and shall be
deemed to have been received on the earlier of the date shown on the receipt or
three (3) business days after the postmarked date thereof, to the other party at
the address of such other party set forth below or such other address within the
continental United States as such other party may designate by specifically
designating as a notice of change of address and given in accordance herewith.
No notice of change of address shall be effective until the date of receipt
thereof. Personal delivery to a partner or any officer, partnership, agent or
employee of such party at said address shall constitute receipt. Rejection or
other refusal to accept or inability to deliver because of changed address of
which no notice has been given shall also constitute receipt. Any such notice,
election, demand, request or response shall be addressed as follows:

 

If given to Lender:

 

FIRST-CITIZENS BANK & TRUST COMPANY 100 E. TRYON ROAD, DAC 90 ATTN: SBA LOAN
OPERATIONS RALEIGH, NORTH CAROLINA 27603

 

If given to Borrower:

 

DIGITAL ALLY, INC. 9705 LOIRET BLVD, LENEXA, KS 66219

____________________________________________________________

____________________________________________________________

____________________________________________________________

____________________________________________________________

 

   

 

 

7.4 GOVERNING LAW AND PARTIES BOUND. This Agreement, the Note and the Loan
Documents shall be governed by and construed in accordance with the laws of the
State of North Carolina. However, in the event that the enforceability or
validity of any provision of this Agreement, the Note or the Loan Documents is
challenged or questioned, such provision shall be governed by which whichever
applicable state or federal law would uphold or enforce such challenged or
questioned provision. Borrower waives any objection which they may have based on
lack of personal jurisdiction, improper venue or forum non conveniens.

 

7.5 NO ASSIGNMENT BY BORROWER. No commitment or other agreement issued by Lender
to Borrower relating to the Loan nor any of Borrower’s rights under this
Agreement, the Note or the Loan Documents shall be assignable by Borrower
without the express prior written consent of Lender in its sole and absolute
discretion.

 

7.6 SEVERABILITY. In the event that any clause or provisions of this Agreement,
the Note or the Loan Documents is held to be invalid, illegal or unenforceable
by any court of competent jurisdiction, the invalidity of such clause or
provision shall not affect the validity, legality or enforceability any of the
remaining portions or provisions of this Agreement, the Note or the Loan
Documents. If feasible, the offending provision shall be considered modified so
that it becomes legal, valid, and enforceable. If the offending provision cannot
be so modified, it shall be considered deleted from this Agreement, the Note or
the Loan Documents, as the case may be.

 

7.7 INCONSISTENCY WITH OTHER LOAN DOCUMENTS. In the event of any inconsistency
between provisions contained within this Agreement, the Note and the Loan
Documents, it is intended that the provisions of this Agreement shall be
controlling.

 

7.8 FORCE MAJURE. If Lender is delayed, hindered, or prevented from performing
any act required under this Agreement by reason of pandemic, war, governmental
restrictions, civil commotion, shortage of labor or materials, strikes, fire, or
any other reason beyond the control of Lender, the performance of such act shall
be excused for the period of delay.

 

7.9 COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all such separate
counterparts shall together constitute but one and the same instrument.

 

   

 

 

7.10 JOINT AND SEVERAL LIABILITY. If there is more than one Borrower, the
liability of each Borrower under this Agreement shall be joint and several.

 

7.11 DEFINED TERMS. Capitalized words and terms have the meanings given to them
in this Agreement, the Note and the Loan Documents. All references to dollar
amounts shall mean amounts in lawful money of the United States of America.
Words and terms used in the singular shall include the plural, and words and
terms used in the plural shall include the singular, as the context may require.

 

7.12 SURVIVAL. All covenants, agreements, representations and warranties made by
Borrower in connection with the Loan shall survive the execution and delivery of
this Agreement, the Note and the Loan Documents.

 

7.13 CAIVRS. Lender is required by the Debt Collection Improvement Act of 1996
and by the SBA to comply with the provisions of 31 U.S.C. §3711 and report
information relating to the extension of the Loan to consumer or commercial
reporting agencies or bureaus, as appropriate (collectively, the “Reporting
Agencies”). The Borrower acknowledges this requirement and further, by execution
of this Loan Agreement, agree that the Lender may in the future report further
information concerning the Loan, including delinquent payments, other Loan
defaults, or charge offs to Reporting Agencies. This information may be
reflected in reports issued by Reporting Agencies. Further, Borrower
acknowledges and agrees that if the small business defaults on the
SBA-guaranteed loan and SBA suffers a loss, Lender is required to report any
Loan charge offs to the Department of Treasury’s delinquent debtor databases,
including without limitation, to the Credit Alert Interactive Voice Response
System (“CAIVRS”) and Debt Check, which may affect their eligibility for further
financial assistance.

 

7.14 SUCCESSORS AND ASSIGNS. All representations, warranties, covenants, and
agreements by or on behalf of Borrower contained in this Agreement, the Note and
the Loan Documents shall bind Borrower’s successors and assigns and shall inure
to the benefit of Lender and its successors and assigns.

 

7.15 WAIVER BY BORROWER. In connection with any proceeding under this Agreement,
the Note and Loan Documents, Borrower waives (i) presentment for payment,
demand, notice of demand, notice of non-payment, protest and notice of protest
of the Note; and (ii) all rights to claim or recover attorney’s fees and costs
in the event that Borrower is successful in any action to remove, suspend or
prevent the enforcement of a judgment entered by confession.

 

7.16 INDEMNIFICATION OF LENDER. Borrower agrees to indemnify, defend, and hold
Lender and its officers, directors, employees, and agents harmless from and
against any and all claims, suits, obligations, damages, losses, costs, expenses
(including, without limitation, reasonable attorneys’ fees), demands,
liabilities, penalties, fines, and forfeitures of any nature whatsoever and
whenever made that may be asserted against or incurred by Lender or its
officers, directors, employees, and agents arising out of, relating to, or in
any manner occasioned by, (i) this Agreement, the Note and the Loan Documents;
(ii) a breach by Borrower of this Agreement, the Note or the Loan Documents;
(iii) any dispute as to the applicability, eligibility or determination of
forgiveness of the Loan under the CARES Act; or (iv) the exercise of the rights
and remedies granted to Lender under this Agreement, the Note or the Loan
Documents. The provisions of this Section 7.16 shall survive the payment of the
Note and the expiration, cancellation, or termination of this Agreement.

 

7.17 LENDER EXPENSES. Borrower agrees to pay upon demand any and all of Lender’s
reasonable costs and expenses, actually incurred, in connection the enforcement
of this Agreement, the Note and the Loan Documents, whether or not an action or
claim is filed. Such Lender costs and expenses include, but are not limited to,
Lender’s reasonable attorneys’ fees and legal expenses incurred in connection
with litigation, alternative dispute resolution proceedings, bankruptcy
proceedings, appeals, anticipated post-judgment collection services and any fees
or costs as may be directed by a court of competent jurisdiction. All such
reasonable expenses actually incurred or paid by Lender as set forth herein will
become part of the indebtedness secured by the Note and are payable on demand.

 

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The parties have executed and entered into this Agreement as of
_________________.

 

LENDER:

 

FIRST-CITIZENS BANK & TRUST COMPANY

 

BY:     JULIE ADOLPHSEN   TITLE: VICE PRESIDENT  

 

BORROWER:

 

A _______________________ entity

 

BY:   TITLE:         BY:   TITLE:         BY:   TITLE: