Document:

Exhibit 10.1

 

SEPARATION AGREEMENT

AND GENERAL RELEASE OF ALL CLAIMS

 

This Separation Agreement and General Release
of All Claims (“Agreement”) is made by and between Patriot Scientific Corporation (the “Company”) and Clifford
Flowers (“Employee”) (collectively referred to as the “Party” or “Parties” appropriately) as
of the date the Parties have signed it below (the “Effective Date”), with respect to the following facts:

 

A.      
Employee has been employed by the Company as Chief Financial Officer since approximately September 17, 2007. Employee was
also employed as interim Chief Executive Officer (“CEO”) from October 2009 through March 2019 and has been a member
of the Company’s Board of Directors since approximately the same time as becoming interim CEO through present date. Employee
is separating from the Company’s employment by mutual agreement effective September 30, 2019 (“Separation Date”).

 

B.      
The Parties acknowledge that this Agreement reflects their mutual agreement relating to Employee’s separation and
that the severance described below terminates any rights under the Amended and Restated Employment Agreement dated December 1,
2016 (“Employment Agreement”). The Parties acknowledge and agree that the Employment Agreement shall be deemed null
and void in its entirety upon the Effective Date of this Agreement except that the provisions protecting the Company’s Trade
Secrets, Confidential Information and Inventions as set forth in paragraph 8 of the Employment Agreement survive and are hereby
incorporated herein by this reference.

 

C.      
Aside from the severance described below, Employee acknowledges that he has received all compensation, wages, vacation pay,
earned commissions, if any, earned bonuses, if any, and/or expense reimbursement owed to him by the Company through the Separation
Date.

 

THEREFORE,
in consideration of the promises and mutual agreements hereinafter set forth, it is agreed by and between the undersigned as follows:

1.            
Severance. The Company shall provide Employee with the following severance, subject to Employee signing and
returning this Agreement on October 1, 2019:

 

1.1         
Severance Payment. The Company agrees to pay Employee a severance payment equal to Three Hundred Twenty-Seventy Thousand
Seven Hundred Fifty Dollars ($327,750), less all appropriate federal and state tax withholding (“Severance Payment”).
The Severance Payment will be made in seven equal installments of Forty-Six Thousand Eight Hundred Twenty-One Dollars and 43/100
($46,821.43), less applicable federal and state tax withholding, to be made to Employee on the 30th of each month commencing October
30, 2019 and ending April 30, 2020. If Employee dies before receiving all of the Severance
Payment from the Company, then the Company shall pay the remainder to the Employee’s surviving spouse, if any, and if none
to the Employee’s surviving dependent children, if any.

 

The Parties expressly agree and acknowledge
that that the Severance Payment described above is in lieu of any rights under the Employment Agreement and that the Employment
Agreement shall be deemed null and void in its entirety upon the Effective Date of this Agreement except that the provisions protecting
the Company’s Trade Secrets, Confidential Information and Inventions as set forth in paragraph 8 of the Employment Agreement
survive and are hereby incorporated herein by this reference.

 

1.2         
Consideration. Employee acknowledges and agrees that the Severance Payment constitutes adequate legal consideration
for the promises and representations made by Employee in this Agreement. Employee understands that his entitlement to and receipt
of the Severance Payment is conditioned upon Employee’s execution of this Agreement.

 

 

 

    
	 	1	 

     

    

 

2.            
General Mutual Release.

 

2.1         
The Parties unconditionally, irrevocably and absolutely release and discharge each other and their heirs, predecessors,
successors and assigns, any parent and subsidiary corporations, divisions and other affiliated entities, their trustees, shareholders,
employees, officers, directors (specifically including without limitation Carlton Johnson and Gloria Felcyn, both in their respective
corporate representative and individual capacities), agents, and attorneys (all past and present)(collectively, “Released
Parties”), from any and all claims, causes of action, demands, damages, expenditures, costs, attorney fees, liens, assessments,
obligations and liability of any type or nature, known or unknown, suspected or unsuspected, either has or may have against the
other, accruing or arising on or before the date of this Agreement, to the fullest extent permitted by law, including but not limited
to any claim: (1) arising out of or in any way related to Employee’s employment relationship with the Company or any Released
Parties, including Employee’s separation of employment with the Company; (2) arising out of or in any way related to any
transactions, services, occurrences, acts, relationships or omissions occurring between them prior to the date hereof; or (3) any
claim for services, payment, severance, bonus pay, administrative leave, sick leave, holiday pay, vacation pay, life, health and
medical insurance, stocks, options or any other fringe benefit, except as set forth herein. This release is intended to have the
broadest possible application and includes, but is not limited to, any tort, contract, common law, constitutional or other statutory
claims, including without limitation, alleged violations of the California Constitution, the California Labor and Civil Codes,
any applicable California Industrial Welfare Commission order, the California Business and Professions Code, Title VII of the Civil
Rights Act of 1964, the California Fair Employment and Housing Act, the Americans with Disabilities Act, the Employee Retirement
Income Security Act, the False Claims Act, the Fair Credit Reporting Act, the Age Discrimination in Employment Act, the Sarbanes-Oxley
Act, all as amended, and all claims for attorneys’ fees, costs and expenses except as expressly stated herein (collectively,
the “Released Claims”). Notwithstanding the foregoing, this mutual release shall not apply to any of the following
claims (collectively, the “Excluded Claims”): (1) claims for workers’ compensation benefits or unemployment insurance
benefits; (2) claims for indemnity by Employee against third-party litigation based on any policy of insurance purchased or held
by the Company, any existing indemnity agreement between Employee and the Company and/or applicable law pertaining to actions taken
by Employee in the lawful discharge of his duties within the course and scope of his employment and/or in his capacity as a member
of the Company’s Board of Directors; (3) claims for breach or enforcement of this Agreement; and (4) any other claims of
Employee that cannot, by statute, lawfully be waived by this Agreement. Nothing in this Agreement affects any vested rights Employee
has in any retirement, welfare or benefit plans or programs of the Company as of Employee’s Separation Date.

 

2.2         
The Parties acknowledge that they may discover facts or law different from, or in addition to, the facts or law that they
know or believe to be true with respect to the claims released in this Agreement and agree, nonetheless, that this Agreement and
the release contained in it shall be and remain effective in all respects notwithstanding such different or additional facts or
the discovery of them.

 

2.3         
The Parties declare and represent that they intend this Agreement to be final and complete and not subject to any claim
of mistake. The Parties execute this release with the full knowledge that this release covers all possible claims against the Released
Parties, to the fullest extent permitted by law.

 

2.4         
Employee expressly waives any right to recover any type of personal relief from the Company, including monetary damages
or reinstatement, in any administrative action or proceeding, whether state or federal, and whether brought by Employee or on Employee’s
behalf by an administrative agency, related in any way to the matters released herein to the greatest extent permitted under applicable
law. Nothing in this paragraph nor any other provision of this Agreement shall be construed to prevent or limit an award to Employee
under the Security and Exchange Commission’s whistleblower program.

 

 

 

    
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3.             
California Civil Code Section 1542 Waiver. The Parties expressly acknowledge and agree that all rights
under Section 1542 of the California Civil Code are expressly waived. That section provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR
OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN
BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

 

The Parties understand that they are a “creditor”
or “releasing party” within the meaning of Section 1542.

 

4.             
Representation Concerning Filing of Legal Actions. The Parties represent that, as of the date they sign this
Agreement, they have no pending lawsuits, complaints, petitions, claims or other accusatory pleadings against the other or any
of the other Released Parties in any court of law (excluding any actions disclosure of which is prohibited by court order). The
Parties represent that they have not assigned and will not assign their respective interest in any of the Released Claims they
may have against the other or any of the Released Parties to anyone. The Parties further agree that, to the fullest extent permitted
by law, they will not prosecute in any court, whether state or federal, any Released Claim or demand of any type related to the
Released Claims, it being the intention of the Parties that with the execution of this Agreement, the Released Parties will be
absolutely, unconditionally and forever discharged of and from all obligations to or on behalf of the other related in any way
to the Released Claims. The Parties represent and warrant to the extent permitted by applicable law, that they are not a plaintiff
or party to any suit, arbitration, action or administrative proceeding in which any Released Party is a party. Employee further
represents and warrants that he has reported to the members of the Company’s Board of Directors any and all work-related
injuries that he has sustained during his employment with the Company.

 

4.1         
The Parties agree that they will not voluntarily participate in, be a witness in, be a party to, or otherwise voluntarily
become involved in any claims, potential claim or litigation against the other or the respective Released Parties except for the
Excluded Claims or as otherwise expressly provided herein. The Parties further agree that they will not voluntarily assist or encourage
in any manner whatsoever any person, party, or litigant, in any claim, potential claim or action against the other or the respective
Released Parties except for the Excluded Claims or as otherwise expressly provided herein.

 

4.2         
Nothing in this paragraph nor any other provision of this Agreement is intended to prevent, interfere or restrict Parties
from responding to a legally issued subpoena from a court of competent jurisdiction or from participating in any investigation
or proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”), the Department of Fair Employment
and Housing (“DFEH”) or other federal or equivalent state or local agency proceeding in which a person’s voluntary
participation is protected by law, provided, however, that nothing in the paragraph limits or affects the finality or scope of
the releases provided in this Agreement. Employee remains free to file a charge with the EEOC, DFEH or other similar state, federal
or local government enforcement agency. Should Parties be served with a subpoena relating to any of the Released Parties, the Parties
agree to promptly notify the other or the respective Released Party in writing of the subpoena and provide the Released Party with
a copy of the subpoena no later than ten days prior to providing testimony or producing any documents in compliance with the subpoena.

 

5.             
No Admissions. By entering into this Agreement, the Released Parties make no admission that they have engaged,
or are now engaging, in any breach or unlawful conduct. The Parties understand and acknowledge that this Agreement is not an admission
of liability and shall not be used or construed as such in any legal or administrative proceeding.

 

 

 

    
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6.             
Employment Separation and Board Resignation. With Employee’s separation from employment and the execution
of this Agreement, Employee resigns from the Company’s Board of Directors, effective the Separation Date. Employee represents
and warrants, and the Company agrees, that he has upon execution of this Agreement completed all transition items as directed by
the Company’s CEO and/or Board of Directors, a copy of which is attached hereto as Exhibit A.

 

Employee represents and warrants that, as
of the date of his execution of this Agreement, he has returned to the best of his knowledge all property in his possession belonging
to the Company, including but not limited to, credit cards, hardware (including the Company’s laptop with all Company data
retained and preserved), software, all proprietary and confidential information and all company documents (including all copies).
Employee represents and warrants that as of the Separation Date, Employee’s cell phone and any other personal laptop or other
electronic device is void of any Company data especially including without limitation proprietary and/or confidential information,
and that all such information has been retained and preserved on the Company laptop being returned as part of Employee’s
separation. Employee also agrees to promptly return any subsequently discovered Company property that is or comes into his possession,
custody, or control.

 

Employee affirms and warrants that he has
appropriately received all compensation, wages, vacation, overtime pay, reimbursements, bonuses, stocks, options, benefits and
other payments to which he was entitled, including, but not limited to, those under the Fair Labor Standards Act and any other
federal, state or local wage and hour law, regulation or ordinance or agreement with the Company. Employee further affirms and
warrants that he has appropriately received any leave (paid and unpaid) to which he was entitled, including, but not limited to,
leave under any federal, state or local leave or disability accommodation law, regulation, ordinance or agreement with the Company.

 

Although the Company does not guarantee
to Employee any particular tax treatment relating to the payment under this Agreement, it is intended that such payment be exempt
from Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). It is intended that each installment
of the Severance Payment provided under this Agreement shall be paid only after the Separation Date and treated as a separate “payment”
for purposes of Section 409A and the guidance issued thereunder. Notwithstanding anything herein to the contrary, the Company shall
have no liability to Employee or to any person if the payment(s) provided in this Agreement that are intended to be exempt from
or compliant with Section 409A are not so exempt or compliant. The Company represents and warrants that no other separation pay
plans were offered to other employees on the Separation Date, and that this Agreement negotiated with Employee is the only separation
pay plan offered by the Company to any of its employees during the 18 month period prior to the Company’s execution of this
Agreement.

 

7.             
Confidentiality. The Parties agree that confidentiality is one of the most important terms of this Agreement.
The terms and conditions of this Agreement shall remain confidential, and neither party shall disclose, directly or indirectly,
the facts underlying the terms and conditions of this Agreement or this Agreement itself to any other person or entity except the
Company may disclose such information on a need to know basis for accounting, personnel management and other required purposes.
The Company will file within the time required by the rules and regulations of the Securities and Exchange Commission a Current
Report on Form 8-K stating: “Mr. Flowers resigned as Chief Financial Officer, effective September 30, 2019.” Employee
specifically agrees that neither he nor his agent(s) will disclose that Employee has received the severance described above, or
that Employee has received any money relating to his separation from employment, except to Employee’s spouse, attorneys or
financial advisors (all of whom shall maintain the information in confidence), unless required to do so by law. However, the Parties
agree that if they receive a subpoena or order from any court, governmental entity or other tribunal, seeking disclosure of this
Agreement or its terms or any confidential information of a party, that party shall notify to the extent permitted by applicable
law, the other in writing immediately to allow the party to object to such disclosure, if that party so elects. In response to
inquiries from others about Employee’s separation from the Company, the Parties may state “[Employee] and [the Company]
are separating under mutually agreeable terms that [the Parties] are not at liberty to discuss.”

 

 

 

    
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Defend Trade Secrets
Act. Notwithstanding any provision herein, pursuant to the Defend Trade Secrets Act, 18 U.S.C. section 1833(b), Employee understands
that:

 

An individual shall not be held criminally
or civilly liable under Federal or State trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence
to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose
of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other proceeding, if such filing is
made under seal.

 

Further, an individual who files a lawsuit
for retaliation for reporting a suspected violation of law may disclose the Company’s trade secrets to the attorney of the
individual and use the trade secret information in the court proceeding if the individual: (a) files any document containing the
trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.

 

8.             
Non-Disparagement. Employee and the Company’s officers agree not to make, induce or attempt to influence
anyone to make, any statement whatsoever, whether written or oral, directly or indirectly, publicly or privately, to any other
person or entity, or in the presence of any third party, any defamatory, derogatory and/or disparaging remarks, comments or statements
about the other Party or any respective Released Party, including without limitation, statements made verbally or sent on the internet
or by text. The statements prohibited by this Agreement include, but are not limited to, those made on social media sites such
as Facebook, Twitter and LinkedIn blogs and message boards, even if posted by pseudonym or anonymously. Nothing in this paragraph
nor any other provision of this Agreement shall be construed to prevent the Parties from responding truthfully and completely to
any lawfully issued court order or subpoena, or from communicating with a government regulatory enforcement agency concerning the
Company, Employee or any other issue related to law enforcement.

 

Further, nothing in this Agreement is intended
to suppress or limit the Parties’ rights to testify in any administrative, legislative or judicial forum about alleged criminal
conduct or sexual harassment, or to prevent the disclosure of factual information related to claims filed in a civil or administrative
action regarding sexual assault, sexual harassment or other forms of sex-based workplace harassment, discrimination or retaliation,
to the extent such communications are expressly protected under California law.

 

9.             
Violation of Confidentiality and Non-Disparagement Provisions. The Parties agree and acknowledge that the
Confidentiality and Non-Disparagement provisions of this Agreement as set forth in paragraphs 7 and 8 are of material importance
and were a material inducement to their execution of this Agreement. The Parties stipulate and agree that any violation thereof
shall be deemed a material breach of this Agreement. The Parties additionally agree that, should there be any violation of paragraphs
7 or 8 of this Agreement, then the Released Parties shall be entitled to, among other remedies: (a) recover attorneys’ fees
and costs if the prevailing party in enforcing these provisions; (b) obtain equitable relief, specific performance, and/or an injunction
restraining the Party from committing or continuing any such violation of this Agreement; and (c) recover any damages whatsoever
caused by the breach of these provisions herein. The Parties understand that these remedies are cumulative, and the use or non-use
of any one remedy shall not preclude the use of all or any other remedies. These remedies are in addition to those the Parties
may have under law, statute or regulation.

 

10.           
Neutral Reference. The Company agrees to provide Employee with a neutral job reference, upon request, which
will be limited to the dates Employee was employed by the Company and his position held.

 

11.           
Severability. In the event any provision of this Agreement shall be found unenforceable by a tribunal of competent
jurisdiction, the provision shall be deemed modified to the extent necessary to allow enforceability of the provision as so limited,
it being intended that the Released Parties shall receive the benefits contemplated herein to the fullest extent permitted by law.
If a deemed modification is not satisfactory in the judgment of such tribunal, the unenforceable provision shall be deemed deleted,
and the validity and enforceability of the remaining provisions shall not be affected thereby.

 

 

 

    
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12.           
Integration. This Agreement contains the entire agreement between the Company and Employee on the subjects
addressed in this Agreement and replaces any other prior agreements or representations, whether oral or written, between them;
provided, however, that any non-disclosure or confidentiality agreements or provisions Employee entered into with the Company that
contain post-termination obligations of Employee, including but not limited to the Trade Secrets, Confidential Information and
Inventions provisions referenced above and incorporated herein, shall remain in full force in accordance with their terms and are
not superseded by this Agreement. The Parties acknowledge that they have not relied on any promise, inducement, assurance or other
representation not specifically contained in this Agreement.

 

13.           
Applicable Law/Interpretation. The validity, interpretation and performance of this Agreement shall be construed
and interpreted according to the laws of the United States of America and the State of California. The Parties acknowledge that
this Agreement has been negotiated between the Parties and their respective counsel. This Agreement shall be construed without
regard to the Party or Parties responsible for the preparation of the same and shall be deemed to have been prepared jointly by
the Parties hereto. Any ambiguity or uncertainty existing herein shall not be interpreted against either Party, but according to
the application of other rules of contract interpretation, if any ambiguity or uncertainty exists. No provision contained herein
shall be interpreted against any Party because that Party drafted the provision.

 

14.           
Binding on Successors. The Parties agree that this Agreement shall be binding on, and inure to the benefit
of Employee’s or the Company’s successors and/or heirs, respectively.

 

15.           
Arbitration. Any dispute arising out of this Agreement or the performance hereunder will be resolved by binding
arbitration in accordance with Title 9 of the U.S. Code and to the then-current Employment Practices Arbitration Rules of the American
Arbitration Association (“AAA”) found at https://www.adr.org and shall take place in San Diego County, California to
the extent permitted by law. All statutes of limitation which would otherwise be applicable will apply to any arbitration proceeding
under this paragraph. To commence arbitration, a party desiring arbitration must give written notice to the other party containing
a general description of the controversy to be subjected to arbitration. If a party, after being duly notified, fails to appear
at or participate in arbitration proceedings, or fails to produce evidence demanded by the arbitrator, the arbitrator is authorized
to make an award based on the evidence produced at the hearings by the party who does participate. The prevailing party in such
arbitration proceedings shall be entitled to recover from the other party reasonable attorneys’ fees and other recoverable
costs incurred in connection with such arbitration proceedings. Provisional injunctive relief may be sought in a court of law for
any violation of paragraphs 6, 7 and/or 8 or any applicable agreement protecting the Company’s proprietary or confidential
information.

 

No Consolidation of Claims/Waiver of
Class Claims: The Parties agree to individualized arbitration, with claims pertaining to different individuals to be heard
in separate proceedings. This means that no other person shall be entitled to join or consolidate in arbitration any claim by or
against other current or former employees. As such, except as set forth above, the Parties agree that both the Company and Employee
hereby waive any right to bring on behalf of other persons, or to otherwise participate in, a class, collective or representative
action (i.e. a type of lawsuit in which one or several persons sue on behalf of a larger group of persons). Regardless of what
is provided by AAA rules, the arbitrator will not have authority or jurisdiction to consolidate claims of different individuals
into one proceeding, nor shall the arbitrator have authority or jurisdiction to hear the arbitration as a class, collective or
representative action. The arbitration provisions herein will not apply to any claims necessarily excluded from mandatory arbitration
by law.

 

16.           
Full Defense/Attorneys’ Fees. This Agreement may be pled as a full and complete defense to, and may
be used as a basis for an injunction against, any action, suit or other proceeding that may be prosecuted, instituted or attempted
by a party in breach hereof. The Parties agree that in the event an action or proceeding is instituted by the Released Parties
in order to enforce the terms or provisions of this Agreement, the prevailing party or parties shall be entitled to an award of
reasonable costs and attorneys’ fees incurred in connection with enforcing this Agreement.

 

 

 

    
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17.           
Good Faith/Cooperation. The Parties agree to do all things necessary and to execute all further documents
necessary and appropriate to carry out and effectuate the terms and purposes of this Agreement. Employee further agrees that he
will, promptly, in good faith and with due diligence, continue to assist, facilitate and fully cooperate with the Company (including
for purposes of this paragraph, any successor of the Company) in transition related issues and provide information as to matters
which he was personally involved, or has information on, while he was an employee of the Company, making himself available to answer
questions upon reasonable notice for the time period during which Employee is receiving the Severance Payment. Such assistance
and cooperation is not intended to require Employee to engage in substantive work or long sessions with the Company. Employee further
agrees following the Separation Date, Employee will cooperate fully with the Company and with the Company’s counsel in connection
with any present and future actual or threatened litigation, administrative proceeding or other investigation involving the Company
that relates to events, occurrences, or conduct occurring (or claimed to have occurred) during the period during which Employee
provided services to the Company. Cooperation will include without limitation: (a) making himself reasonably available for interviews
and discussions with the Company’s counsel, as well as for depositions and trial testimony; (b) if depositions or trial testimony
are to occur, making himself reasonably available for and cooperate with the related preparations, as and to the extent that the
Company or the Company’s counsel reasonably requests; (c) refraining from impeding in any way the Company’s prosecution
or defense of such litigation or administrative proceeding; and (d) cooperating fully in the development of the Company’s
prosecution or defense of such litigation or administrative proceeding. The Company shall promptly reimburse Employee for pre-approved
reasonable travel, lodging, telephone and similar expenses, as well as reasonable attorneys’ fees (if independent legal counsel
is deemed necessary or appropriate by the Company’s counsel or otherwise reasonably requested by Employee due to legal conflicts
of interest acknowledged by the Company’s counsel) incurred by counsel who has been pre-approved by the Company in the exercise
of reasonable discretion in connection with any cooperation, consultation, or advice rendered pursuant to this paragraph 17. For
purposes of this paragraph, the Company’s approval of independent counsel or the acknowledgment of a conflict of interest
meriting independent counsel for Employee, shall not be unreasonably withheld. Nothing herein is intended or should be construed
as an employment relationship with the Company or requiring anything other than Employee’s cooperation in providing timely,
truthful and accurate information.

 

18.           
Modification/Waiver. This Agreement may be amended only by a written instrument executed by all Parties hereto.
No breach of any provision of this Agreement can be waived unless in writing. No waiver of any provision of this Agreement shall
constitute a continuing waiver or waiver of any other provision.

 

19.           
Counterparts. This Agreement may be executed in counterparts and shall be binding on all Parties when each
has signed either an original or copy of this Agreement.

 

20.           
Non-Assignability. This Agreement is of a personal nature and shall be non-assignable except upon the Parties’
written mutual agreement.

 

21.           Representations
and Warranties. The Parties represent and warrant that no adverse reports have been made to any law enforcement agency relating
to any alleged or potential violation by any Released Party, and that no known basis or reason compelling such a report exists
as of the date of execution of this Agreement. The Parties represent and warrant they have full authority to execute this Agreement
and to consummate the transactions contemplated by this Agreement. Each individual executing this Agreement represents and warrants
that he or she is duly authorized to do so.

 

22.            Voluntary
Agreement. Employee acknowledges that he has been given ten (10) calendar days in which to consider whether or not to enter
into this Agreement in consultation with his counsel to the extent desired. The Parties certify that each has read and understands
all of this Agreement, has received any advice or counsel the Parties deem necessary regarding this Agreement, including without
limitation Employee seeking independent tax advice to the extent he desires with respect to tax considerations and Section 409A,
and are entering into this Agreement freely, knowingly and voluntarily, intending to be bound by its terms.

 

 

 

    
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WHEREFORE, THE PARTIES HAVE EXECUTED THIS AGREEMENT ON THE DATES
SHOWN BELOW.

 

 

	Dated: October 1, 2019	By:   /s/Clifford Flowers                                                                  
	 	 	     Clifford Flowers
	 	 
	 	 
	 	Patriot Scientific Corporation
	 	 
	Dated: October 1, 2019	By:   /s/
    Carlton Johnson                                                                 
	 	 	Carlton Johnson, CEO
	 	 
	 	 
	 	 

 

 

 

 

 

 

 

    
	 	8Exhibit 4.1

 

NEITHER THIS SECURITY NOR THE SECURITIES
FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

COMMON STOCK PURCHASE WARRANT

 

Arcimoto,
Inc.

 

	Warrant Shares: _______	Issue Date:______, 2019
	 	 
	 	Initial Exercise Date: _______, 2020

 

THIS COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on
or after six months of the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York
City time) on ______________1 (the
“Termination Date”) but not thereafter, to subscribe for and purchase from Arcimoto, Inc., an Oregon corporation
(the “Company”), up to ______ shares (as subject to adjustment hereunder, the “Warrant Shares”)
of the Company’s common stock (the “Common Stock”). The purchase price of one share of Common Stock under this
Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement
(the “Purchase Agreement”), dated September 3, 2019, among the Company and the purchasers signatory thereto.

 

 

1
Insert the date that is the five and one-half (5.5) year anniversary of the Initial Exercise Date, provided that, if such date
is not a Trading Day, insert the immediately following Trading Day.

 

    1

     

    

 

Section 2. Exercise.

 

a) Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile
copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice
of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard
Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver
the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s
check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the
applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other
type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant
Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to
the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the
Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available
hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to
the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant
Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1)
Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that,
by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number
of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

b) Exercise
Price. The exercise price per share of Common Stock under this Warrant shall be $2.83, subject to adjustment hereunder
(the “Exercise Price”).

 

c) Cashless
Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained
therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole
or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number
of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

		(A) =	as applicable: (i) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant
to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on
a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated
under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day
immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal
Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise
if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two
(2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant
to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise
is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of
“regular trading hours” on such Trading Day;

 

    2

     

    

 

		(B) =	the Exercise Price of this Warrant, as adjusted hereunder;
and

 

		(X) =	the number of Warrant Shares that would be issuable upon
exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather
than a cashless exercise.

 

“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on
a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most
recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities
then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is
then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on
a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as
applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock
are then reported in the The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices),
the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a
share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest
of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the
Company.

 

    3

     

    

 

If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9)
of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period
of the Warrant Shares being issued may be tacked on to the holding period of this Warrant.  The Company agrees not to
take any position contrary to this Section 2(c).

 

Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).

 

d) Mechanics
of Exercise.

 

i. Delivery
of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or
resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale
limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate,
registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to
which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the
date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1)
Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard
Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery
Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery
of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is
received by the Warrant Share Delivery Date. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject
to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages
and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the
date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after
such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares
are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST
program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with
respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.

 

    4

     

    

 

ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.

 

iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder,
if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder
is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise
purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated
receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount,
if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required
to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise
and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000
to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the
Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.

 

    5

     

    

 

v. No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.

 

vi. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the
Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder;
provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental
thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees
to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day
electronic delivery of the Warrant Shares.

 

vii. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

 

    6

     

    

 

e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after
exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes
of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution
Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining,
nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii)
exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation,
any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding sentence,
for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing
to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible
for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e)
applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together
with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion
of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this
Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties)
and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder
may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual
report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent
written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon
the written or oral request of a Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder
or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported.
The “Beneficial Ownership Limitation” shall be [4.99%/9.99%] of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon
notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions
of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the
61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof)
which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall
apply to a successor holder of this Warrant.

 

    7

     

    

 

Section 3. Certain
Adjustments.

 

a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues
or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to
any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, that to the extent that the Holder’s right to participate in any such Purchase Right would
result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such
Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

c) Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of
a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation,
the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in
such Distribution (provided, however, that to the extent that the Holder's right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution
to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if
ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

    8

     

    

 

d) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets
in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person
or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the
other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock
or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any
subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable
upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard
to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant
is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to
apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder
shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental
Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor
Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after,
the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental
Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value
(as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction;
provided, however, if the Fundamental Transaction is not within the Company's control, including not approved by
the Company's Board of Directors, Holder shall only be entitled to receive from the Company or any Successor Entity, as of the
date of consummation of such Fundamental Transaction, the same type or form of consideration (and in the same proportion), at the
Black Scholes Value (as defined below) of the unexercised portion of this Warrant, that is being offered and paid to the holders
of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash,
stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative
forms of consideration in connection with the Fundamental Transaction. “Black Scholes Value” means the value
of this Warrant based on the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P.
(“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing
purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility
equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365
day annualization factor) as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction,
(C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered
in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the
greater of (x) the last VWAP immediately prior to the public announcement of such Fundamental Transaction and (y) the last VWAP
immediately prior to the consummation of such Fundamental Transaction and (D) a remaining option time equal to the time between
the date of the public announcement of the applicable Fundamental Transaction and the Termination Date. The payment of the Black
Scholes Value will be made by wire transfer of immediately available funds within five Business Days of the Holder’s election
(or, if later, on the effective date of the Fundamental Transaction).  The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the
obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section
3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without
unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange
for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance
to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent
entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the
exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock
and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation
of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence
of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the
date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity
had been named as the Company herein.

 

    9

     

    

 

e) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

f) Notice
to Holder.

 

i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email
to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least
20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which
a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or
share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice
or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the
date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

    10

     

    

 

Section 4. Transfer
of Warrant.

 

a) Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions
of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration
rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder
or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue
to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.
Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company
unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within
three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full.
The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.

 

b) New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Issue
Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c) Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.

 

d) Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer
of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and
under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or
current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer,
that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.

 

    11

     

    

 

e) Representation
by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any
exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for
distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.

 

Section 5. Miscellaneous.

 

a) No
Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except
as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise”
pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall
the Company be required to net cash settle an exercise of this Warrant.

 

b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of
the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.

 

c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding
Business Day.

 

d) Authorized
Shares.

 

The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged
with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be
listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by
the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such
issue).

 

    12

     

    

 

Except and
to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions
as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting
the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant
and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking
any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.

 

e) Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.

 

f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does
not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the
right to exercise this Warrant terminates on the Termination Date. Without limiting any other provision of this Warrant or the
Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in
any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs
and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred
by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

    13

     

    

 

h) Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Purchase Agreement.

 

i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder
for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.

 

j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be adequate.

 

k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.

 

l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions
of this Warrant.

 

n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of
this Warrant.

 

********************

 

(Signature Page Follows)

 

    14

     

    

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	 	Arcimoto, Inc.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

    15

     

    

 

NOTICE OF EXERCISE

 

To:
Arcimoto, Inc.

 

(1) The undersigned hereby
elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full),
and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2) Payment shall take
the form of (check applicable box):

 

☐ in lawful
money of the United States; or

 

☐ if permitted
the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c),
to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).

 

(3) Please issue said
Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

The Warrant Shares shall be delivered to
the following DWAC Account Number:

 

_______________________________

 

_______________________________

 

_______________________________

 

(4)
Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated
under the Securities Act of 1933, as amended.

 

[SIGNATURE
OF HOLDER]

 

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of
Investing Entity: __________________________________________________

Name of Authorized Signatory: ____________________________________________________________________

Title of Authorized Signatory: _____________________________________________________________________

Date: ________________________________________________________________________________________

 

     

     

    

 

EXHIBIT B

 

ASSIGNMENT
FORM

 

(To assign the
foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED,
the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	Name:	 
	 	(Please Print)
	 	 
	Address:	 
	 	(Please Print)
	 	 
	Phone Number:	 
	 	 
	Email Address: 	 
	 	 
	Dated: _______________ __, ______	 
	 	 
	Holder’s Signature:______________________	 
	 	 
	Holder’s Address:_______________________

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