Exhibit 10.1

 

PROMISSORY NOTE

 

Principal:

$1,068,686.00

Loan Date

05-05-2020

Maturity

05-05-2022

Loan No

 

Call / Coll

Account Officer Initials References in the boxes above are for Lender’s use only
and do not limit the applicability of this document to any particular loan or
item.
Any item above containing ““*” has been omitted due to text length limitations.

 

Borrower: Arcimoto Lender: Seattle Bank   2034 W. 2nd Street   Commercial
Banking   Eugene, OR 97402-7105   600 University Street, Suite 1850      
Seattle, WA 98101-1129

 

 

 

Principal Amount: $1,068,686.00 Date of Note: May 5, 2020

 

PAYCHECK PROTECTION PROGRAM. Lender is making this loan pursuant to the Paycheck
Protection Program (the “PPP”) created by Section 1102 of the Coronavirus Aid,
Relief, and Economic Security Act (the “CARES Act”) and governed by the CARES
Act, section 7(a)(36) of the Small Business Act, any rules or guidance that has
been issued by the Small Business Administration implementing the PPP, or any
other applicable Loan Program Requirements, as defined in 13 CFR § 120.10, as
amended from time to time (collectively “PPP Loan Program Requirements”).
Notwithstanding anything to the contrary herein, the Borrower (a) agrees that
this Promissory Note shall be interpreted and construed to be consistent with
the PPP Loan Program Requirements and (b) authorizes Lender to unilaterally
amend any provision of this Promissory Note to the extent required to comply
with the PPP Loan Program Requirements.

 

PROMISE TO PAY. Arcimoto (“Borrower”) promises to pay to Seattle Bank
(“Lender”), or order, in lawful money of the United States of America, the
principal amount of One Million Sixty-eight Thousand Six Hundred Eighty-six &
00/100 Dollars ($1,068,686.00), together with interest on the unpaid principal
balance from May 5, 2020, calculated as described in the “INTEREST CALCULATION
METHOD” paragraph using an interest rate of 1.000% per annum based on a year of
360 days, until paid in full. The interest rate may change under the terms and
conditions of the “INTEREST AFTER DEFAULT” section.

 

PAYMENT. Borrower will pay this loan in 17 payments of $60,153.73 each payment
and an irregular last payment estimated at $60,153.81. Borrower’s first payment
is due December 5, 2020, and all subsequent payments are due on the same day of
each month after that. Borrower’s final payment will be due on May 5, 2022, and
will be for all principal and all accrued interest not yet paid. Payments
include principal and interest. Unless otherwise agreed or required by
applicable law, payments will be applied first to any accrued unpaid interest;
then to principal; then to any late charges; and then to any unpaid collection
costs. Borrower will pay Lender at Lender’s address shown above or at such other
place as Lender may designate in writing.

 

LOAN FORGIVENESS. Pursuant to Section 1102 of the federal Coronavirus Aid,
Relief, and Economic Security Act (“CARES Act”), the following provisions shall
apply to the Loan:

 

A. Borrower has certified that this Loan is eligible for the limited loan
forgiveness provisions of Section 1102 of the CARES Act, and the SBA Interim
Final Rule dated April 2, 2020 (“Rule”).

 

B. The amount of loan forgiveness available to Borrower, if any, will be
determined by and subject to the sole approval of the SBA, and must conform to
the eligibility requirements set forth in the CARES Act and Rule, as either may
be amended from time to time. Borrower expressly acknowledges that the SBA has
announced plans to issue additional guidance regarding loan forgiveness which
may impact Borrower’s eligibility for and/or the amount of available loan
forgiveness.

 

C. To receive loan forgiveness, Borrower must apply through Lender by submitting
such information as the SBA or Lender requires or to substantiate the
eligibility and amount of loan forgiveness sought.

 

INTEREST CALCULATION METHOD. Interest on this Note is computed on a 365/360
basis; that is, by applying the ratio of the interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. All interest payable under
this Note is computed using this method. This calculation method results in a
higher effective interest rate than the numeric interest rate stated in this
Note.

 

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower’s obligation to continue to make payments
under the payment schedule. Rather, early payments will reduce the principal
balance due and may result in Borrower’s making fewer payments. Borrower agrees
not to send Lender payments marked “paid in full”, “without recourse”, or
similar language. If Borrower sends such a payment, Lender may accept it without
losing any of Lender’s rights under this Note, and Borrower will remain
obligated to pay any further amount owed to Lender. All written communications
concerning disputed amounts, including any check or other payment instrument
that indicates that the payment constitutes “payment in full” of the amount owed
or that is tendered with other conditions or limitations or as full satisfaction
of a disputed amount must be mailed or delivered to: Seattle Bank, 600
University Street, Suite 1850 Seattle, WA 98101-1129.

 

LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment or $25.00,
whichever is greater.

 

 

 

 

  PROMISSORY NOTE   Loan No: (Continued) Page 2

 

 

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, the interest rate on this Note shall be increased by 6.000 percentage
points. If judgment is entered in connection with this Note, interest will
continue to accrue after the date of judgment at the rate in effect at the time
judgment is entered. However, in no event will the interest rate exceed the
maximum interest rate limitations under applicable law.

 

DEFAULT. Each of the following shall constitute an event of default (“Event of
Default”) under this Note:

 

Payment Default. Borrower fails to make any payment when due under this Note.

 

Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Note or in any of the
related documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement between Lender and Borrower.

 

Default in Favor of Third Parties. Borrower or any Grantor defaults under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower’s property or Borrower’s ability to repay this
Note or perform Borrower’s obligations under this Note or any of the related
documents.

 

False Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower’s behalf under this Note or the related
documents is false or misleading in any material respect, either now or at the
time made or furnished or becomes false or misleading at any time thereafter.

 

Insolvency. The dissolution or termination of Borrower’s existence as a going
business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower’s property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.

 

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the loan. This includes a garnishment of any of
Borrower’s accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

 

Events Affecting Guarantor. Any of the preceding events occurs with respect to
any guarantor, endorser, surety, or accommodation party of any of the
indebtedness or any guarantor, endorser, surety, or accommodation party dies or
becomes incompetent, or revokes or disputes the validity of, or liability under,
any guaranty of the indebtedness evidenced by this Note.

 

Change In Ownership. Any change in ownership of twenty-five percent (25%) or
more of the common stock of Borrower.

 

Adverse Change. A material adverse change occurs in Borrower’s financial
condition, or Lender believes the prospect of payment or performance of this
Note is impaired.

 

Cure Provisions. If any default, other than a default in payment, is curable and
if Borrower has not been given a notice of a breach of the same provision of
this Note within the preceding twelve (12) months, it may be cured if Borrower,
after Lender sends written notice to Borrower demanding cure of such default:
(1) cures the default within thirty (30) days; or (2) if the cure requires more
than thirty (30) days, immediately initiates steps which Lender deems in
Lender’s sole discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps sufficient to produce
compliance as soon as reasonably practical.

 

LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance under this Note and all accrued unpaid interest immediately due, and
then Borrower will pay that amount.

 

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.

 

ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender’s attorneys’ fees
and Lender’s legal expenses, whether or not there is a lawsuit, including
attorneys’ fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law.

 

JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any
action, proceeding, or counterclaim brought by either Lender or Borrower against
the other.

 

 

 

 

  PROMISSORY NOTE   Loan No: (Continued) Page 3

 

 

GOVERNING LAW. This Note will be governed by federal law applicable to Lender
and, to the extent not preempted by federal law, the laws of the State of
Washington without regard to its conflicts of law provisions. This Note has been
accepted by Lender in the State of Washington.

 

CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to
submit to the jurisdiction of the courts of King County, State of Washington.

 

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $25.00 if Borrower
makes a payment on Borrower’s loan and the check or preauthorized charge with
which Borrower pays is later dishonored.

 

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower’s accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
debt against any and all such accounts, and, at Lender’s option, to
administratively freeze all such accounts to allow Lender to protect Lender’s
charge and setoff rights provided in this paragraph.

 

ARBITRATION. Borrower and Lender agree that all disputes, claims and
controversies between them whether individual, joint, or class in nature,
arising from this Note or otherwise, including without limitation contract and
tort disputes, shall be arbitrated pursuant to the Rules of the American
Arbitration Association in effect at the time the claim is filed, upon request
of either party. No act to take or dispose of any collateral securing this Note
shall constitute a waiver of this arbitration agreement or be prohibited by this
arbitration agreement. This includes, without limitation, obtaining injunctive
relief or a temporary restraining order; invoking a power of sale under any deed
of trust or mortgage; obtaining a writ of attachment or imposition of a
receiver; or exercising any rights relating to personal property, including
taking or disposing of such property with or without judicial process pursuant
to Article 9 of the Uniform Commercial Code. Any disputes, claims, or
controversies concerning the lawfulness or reasonableness of any act, or
exercise of any right, concerning any collateral securing this Note, including
any claim to rescind, reform, or otherwise modify any agreement relating to the
collateral securing this Note, shall also be arbitrated, provided however that
no arbitrator shall have the right or the power to enjoin or restrain any act of
any party. Judgment upon any award rendered by any arbitrator may be entered in
any court having jurisdiction. Nothing in this Note shall preclude any party
from seeking equitable relief from a court of competent jurisdiction. The
statute of limitations, estoppel, waiver, !aches, and similar doctrines which
would otherwise be applicable in an action brought by a party shall be
applicable in any arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of an action for these purposes. The
Federal Arbitration Act shall apply to the construction, interpretation, and
enforcement of this arbitration provision.

 

ORAL AGREEMENTS. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND
CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE
UNDER WASHINGTON LAW.

 

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower’s heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.

 

 

 

 

  PROMISSORY NOTE   Loan No: (Continued) Page 4

 

 

GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will
not affect the rest of the Note. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed by
law, waive presentment, demand for payment, and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length of
time) this loan or release any party or guarantor or collateral; or impair, fail
to realize upon or perfect Lender’s security interest in the collateral; and
take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with whom the
modification is made. The obligations under this Note are joint and several.

 

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE.

 

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

 

BORROWER:

 

ARCIMOTO

 

By:        Mark Frohnmayer, CEO of Arcimoto  

 

 

LaserPro Ver 19.3.0.039 Cop, Posers USA Cor9oratten 1997, 2020 All RIOIs
Reserved - WA U CFPLPL1020 FC TR-2073 PR-112