Document:

Exhibit 10.1

 

PROMISSORY
NOTE

 

	Principal:

        $1,068,686.00
        
	Loan
        Date

        05-05-2020
	Maturity

        05-05-2022
	Loan
        No

         
	Call
    / Coll 

    
	Account	Officer	Initials
	References
    in the boxes above are for Lender’s use only and do not limit the applicability of this document to any particular
    loan or item. 

    Any item above containing ““*” has been omitted due to text length limitations.

 

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

 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

     

     

    

 

	 	PROMISSORY NOTE	 
	Loan No:	(Continued)	Page 2

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

WHEN
FEDERAL LAW APPLIES. When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations.
Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and
other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or
liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat
any claim of SBA, or preempt federal law.

 

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

 

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

 

     

     

    

 

	 	PROMISSORY NOTE	 
	Loan No:	(Continued)	Page 3

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

     

     

    

 

	 	PROMISSORY NOTE	 
	Loan No:	(Continued)	Page 4

 

 

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

 

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

 

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

 

BORROWER:

 

ARCIMOTO

 

	By: 	 	 
	 	Mark Frohnmayer, CEO of Arcimoto	 

 

 

LaserPro
Ver 19.3.0.039 Cop, Posers USA Cor9oratten 1997, 2020 All RIOIs Reserved - WA U CFPLPL1020 FC TR-2073 PR-1122020-05-07 8K Ex 10.1

			

					

						 

					

					

						 

					

					

						 

				
	

					

						 

					

					

						 

					

					

						Exhibit 10.1

				

		

			 

		

		
			
		

		

		

		 

		

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