Exhibit 10.1


 





 


PAYCHECK PROTECTION PROGRAM LOAN NOTE


 


	SBA Loan#	PLP 34824873-09
	SBA Loan Name	POLAR POWER INC
	Date	5/4/2020
	Loan Amount	$1,714,989.00
	Interest Rate	1.00%
	Borrower	POLAR POWER INC
	Lender	Citibank, N.A.
	Maturity Date	05/04/2022


 


		1.	PROMISE TO PAY:



 


In return for the Loan, Borrower
promises to pay to the order of Lender the Loan Amount specified above, interest on the unpaid principal balance, and all other
amounts required by this Note as specified below.


 


		2.	DEFINITIONS:



 


“Loan” means the loan evidenced by this
Note.


 


“Loan Documents” means the documents
related to the Loan signed and delivered by Borrower.


 


“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:


 


The interest rate is fixed as
specified above and will not change during the life of the Loan.


 


No payments are due on the Loan
for six (6) months (the “Deferment Period”) from the date of first disbursement of the Loan. Interest will continue
to accrue during the Deferment Period. Borrower must make principal and interest payments every month beginning in the month immediately
following the end of the Deferment Period (the “Payment Commencement Date”) in an amount calculated at the interest
rate specified herein and based on the amount of the unpaid principal balance hereunder as of the Payment Commencement Date and
a final payment on the Maturity Date equal to all unpaid interest, principal, and fees. Payments must be made on the first calendar
day of each month in the months they are due. Borrower shall also pay on the Payment Commencement Date all accrued interest on
the unpaid principal balance of this Note from the date of first disbursement of the Loan through the Payment Commencement Date.


 






     


    

 
PAYCHECK PROTECTION PROGRAM LOAN NOTE


    

 


Lender will apply each installment
payment first to pay interest accrued on the Loan to the day Lender receives the payment, then to bring principal current, then
to pay any late fees, and then to any remaining balance to reduce the outstanding principal balance of this Note.


 


NOTICE - LOAN FORGIVENESS:
Borrower may apply through Lender for forgiveness of the amount due on this Loan in an amount equal to the sum of the following
costs incurred by Borrower during the 8-week period (or any other period that may hereafter be authorized by SBA) beginning on
the date of Blockfirst disbursement of the Loan:


 


		a.	Payroll costs



 


		b.	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)



 


		c.	Any payment on a covered rent obligation



 


		d.	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 Coronavirus
Aid, Relief, and Economic Security Act (CARES Act) (P.L. 116-136). Borrower covenants and agrees to use the Loan only for purposes
authorized by the CARES Act. Not more than twenty-five (25%) percent of the amount forgiven can be attributable to non-payroll
costs. The amount of each monthly Loan payment due hereunder will change to the extent SBA determines that Borrower has met the
eligibility requirements under the CARES Act and pays to Lender the amount of the Loan that is entitled to forgiveness. If the
entire principal amount of the Loan is forgiven and the Note indebtedness is paid to Lender by the SBA, no further principal payments
under this Note shall be payable by Borrower.



 


		4.	LOAN PREPAYMENT/LATE CHARGE:



 


Notwithstanding any provision
of this Note to the contrary, Borrower may prepay all or any part of the unpaid principal balance of this Note without premium
or penalty at any time without notice. Borrower may prepay twenty (20%) percent or less of the unpaid principal balance at any
time without notice. If Borrower prepays more than twenty (20%) percent and the Loan has been sold on the secondary market, Borrower
must (a) give Lender written notice; (b) pay all accrued interest; and (c) if the prepayment is received less than twenty-one (21)
days from the date Lender received the notice, pay an amount equal to twenty-one (21) days interest from the date Lender received
the notice, less any interest accrued during the twenty-one (21) days and paid under (b) of this paragraph. If Borrower does not
prepay within thirty (30) days from the date Lender received the notice, Borrower must give Lender a new notice.


 






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PAYCHECK PROTECTION PROGRAM LOAN NOTE


    

 


All unpaid principal and accrued
interest is due and payable two years from the date of this Note.


 


Late Charge: If a payment
on this Note is more than 15 days late, Lender may charge Borrower a late fee of up to 4.00% of the unpaid portion
of the regularly scheduled payment.


 


		5.	REPRESENTATIONS AND WARRANTIES:



 


Borrower represents and warrants
to Lender as of the date of this Note that:


 


		A.	Borrower is duly organized, validly existing, and in good standing under and by virtue of the laws
of the state in which it has been formed.



 


		B.	Borrower is duly authorized to transact business in all other states in which Borrower is doing
business, having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing
business; Borrower’s execution, delivery, and performance of this Note and any Loan Documents have been duly authorized by
all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision
of (a) Borrower’s articles of incorporation or organization, or bylaws, or (b) any agreement or other instrument binding
upon Borrower, or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower’s properties.



 


		C.	This Note has been duly executed and delivered by the undersigned as a duly authorized representative
of Borrower, and is Borrower’s legal, valid and binding obligation enforceable against Borrower in accordance with its terms.



 


		D.	All financial, tax, payroll costs, and other information submitted to Lender, including in connection
with Borrower’s application for the loan evidenced by this Note is true, correct, and complete as of the date of this Note.



 






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PAYCHECK PROTECTION PROGRAM LOAN NOTE


    

 


		6.	DEFAULT:



 


Borrower will be in default under
this Note if Borrower does not make a payment when due under this Note, or if Borrower:


 


		A.	Fails to do anything required by this Note or in any document executed or delivered in connection
with this Note;



 


		B.	Defaults on any other loan with Lender;



 


		C.	Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender
or SBA;



 


		D.	Makes, or anyone acting on their behalf makes, a materially false or misleading representation,
information submission, or certification to Lender or SBA, including in respect of any representation or warranty contained in
this Note;



 


		E.	Defaults on any loan or agreement with another creditor, if Lender believes the default may materially
affect Borrower’s ability to pay this Note;



 


		F.	Fails to pay any taxes when due;



 


		G.	Becomes the subject of a proceeding under any bankruptcy or insolvency law;



 


		H.	Has a receiver or liquidator appointed for any part of their business or property;



 


		I.	Makes an assignment for the benefit of creditors;



 


		J.	Has any adverse change in financial condition or business operation that Lender believes may materially
affect Borrower’s ability to pay this Note;



 


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



 


		L.	Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower’s
ability to pay this Note.



 


		7.	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



 


		C.	File suit and obtain judgment.



 


		8.	LENDER’S GENERAL POWERS:



 


Without notice and without Borrower’s
consent, Lender may:


 


		A.	Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other
Loan Document. Among other things, the expenses may include payments for prior liens 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 of
this Note;



 


		B.	Release anyone obligated to pay this Note; and



 


		C.	Take any action necessary to collect amounts owing on this Note.



 






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PAYCHECK PROTECTION PROGRAM LOAN NOTE


    

 


		9.	WHEN FEDERAL LAW APPLIES:



 


When SBA is the holder, this
Note will be interpreted and enforced under federal law, including SBA regulations. 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.


 


		10.	NON-RECOURSE:



 


Lender and SBA shall have no
recourse against any individual shareholder, member or partner of Borrower for nonpayment of the Loan, except to the extent that
such shareholder, member or partner uses the Loan proceeds for an unauthorized purpose.


 


		11.	SUCCESSORS AND ASSIGNS:



 


Under this Note, Borrower includes
any of its successors, and Lender includes its successors and assigns.


 


		12.	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.



 


		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.



 


		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.



 


		H.	Borrower shall use all Loan proceeds solely for Borrower’s business operations and strictly
in accordance with the requirements of the CARES Act.



 


		I.	Until such time as all of Borrower’s Loans have been either forgiven or paid in full and
this Note has been cancelled, Borrower agrees to maintain its Primary Demand Deposit Account with Lender. “Primary Demand
Deposit Account” means the business demand deposit account into which substantially all of Borrower’s receipts from
its operations are deposited and from which substantially all of Borrower’s disbursements for its operations are made.



 






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PAYCHECK PROTECTION PROGRAM LOAN NOTE


    

 


		J.	Except as otherwise provided in Section 9 hereof, this Note shall be governed by and construed
in accordance with the laws of the State of New York, without regard to its conflicts of law provisions.



 


		K.	If there is a lawsuit, Borrower agrees, upon Lender’s request, to submit to the jurisdiction
of the courts of New York County, State of New York. Nothing herein shall affect the right of the Lender to bring any action or
proceeding against the Borrower in the courts of any other jurisdiction.



 


		L.	BORROWER HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
ARISING UNDER OR IN CONNECTION WITH THIS NOTE OR ANY LOAN DOCUMENT TO THE EXTENT PERMITTED BY APPLICABLE LAW.



 


		M.	Delivery of an executed counterpart of a signature page of this Note by telecopy or other digital
or electronic imaging means shall be effective as delivery of a manually executed counterpart of this Note.



 


		13.	BORROWER’S NAME(S) AND SIGNATURE(S):



 


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


 


FOR LEGAL ENTITIES:


 


	
        Name of Borrower: 
	POLAR POWER
INC	 



 


	By:	/s/ Arthur Sams	 
	Name:	Arthur Sams	 
	Title:	CEO	 


 


FOR
SOLE PROPRIETORSHIPS:


 


	
        Name of Borrower: 
		 





 


	By:	 	 


 


 


X Citi QC Complete


 


 


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