Document:

adom-ex101_46.htm

Exhibit 10.1

		
	
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Paycheck Protection Program Promissory Note and Agreement

 

Wells Fargo SBA Lending

Borrower Names:

Adomani Inc

Important Notice: This Instrument Contains A Confession Of Judgment Provision Which Constitutes A Waiver Of' Important Rights You May Have As A Debtor And Allows The Creditor To Obtain A Judgment Against You Without Any Further Notice. Venue Will Be In The City Of Richmond.I

Paycheck Protection Program Promissory Note and Agreement

	
 
	
1.
	
Parties To Agreement And Acceptance

This Wells Fargo Paycheck Protection Promissory Note and Agreement {'.'Agreement") governs the Wells Fargo Paycheck Protection Loan ("Loan") that Wells Fargo Bank, N.A. ("we" or "Lender" is providing to you (if a sole proprietor) or your business organization, Borrower(s) listed above, (such a sole proprietor or business organization are referred to in this Agreement as "Customer", "you", and "your" or "Borrower") and your designated representatives. The Loan is established under the terms and conditions of the SBA program of the United States Small Business Administration ("SBA") and the USA CARES Act (2020l(H.R. 748)(15 U.S.( 636 et seq.)(the "Act") and the availability of the Loan is expressly contingent on funds being available from the SBA under the Act to guaranty this Loan. You agree to be bound by and comply with each and every following term and condition of this Agreement. Lender agrees, based on the terms and conditions and relying upon the representations and warranties set forth in this Agreement, to make available to Borrower the Loan as more fully described herein.

	
 
	
2.
	
Promise to Pay

Borrower promises to pay, to Lender, or order, the principal amount of $261,244, together with interest on the outstanding principal balance. Borrower will pay Lender at Lender's address showing this Agreement or at such other place as Lender may designate in writing.

	
 
	
3.
	
Interest

Interest will accrue on the outstanding principal balance at a fixed rate of 1.00%. Interest will be calculated as described in the Interest Accrual Basis paragraph below.

	
 
	
4.
	
Interest Accrual Basis

Interest shall be computed on an actual/365 simple interest basis; that is, by multiplying the applicable interest rate, times the outstanding principal balance, times the actual number of days the principal is outstanding and dividing by a year of 365 days.

	
 
	
5.
	
Repayment

Payments shall be due and payable monthly in the amount of $10,998.70 commencing 11/3/2020 and continuing on Day 03 of each month thereafter until maturity. The Loan shall mature two (2) years from the date of this Agreement, or 5/3/2022, at which time all unpaid principal. accrued interest, and any other unpaid amounts shall be due and payable in full. Unless otherwise agreed, all sums received from Borrower may be applied to interest, fees, principal, or any other amounts due to Lender in any order at Lender's sole discretion.

As discussed further herein, the Borrower may apply for the loan to be forgiven in whole or in part.

 

 

{02874337;vl )

 

		
	
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If any portion of the principal and/or interest payments are forgiven by the Lender, upon forgiveness, the remaining balance of the loan will be reamortized over the remaining term with the entire principal balance remaining unpaid, along with all accrued and unpaid interest, due and payable upon the Maturity Date.

	
 
	
6.
	
Permissible Use

The Account will be used for only for purposes authorized by the Act, specifically the Paycheck Protection Program contained within such Act.

In no event shall the Loan be used for any transaction that is illegal under any applicable law. You represent that you (if a sole proprietor) and your business organization are not a Money Service Business as defined by federal law, or have identified yourself to Lender as such a business and have complied with all applicable laws, rules and regulations governing such businesses.

	
 
	
7.
	
Forgiveness

The Borrower will not be responsible for any loan payment if Borrower provides to Lender, in its sole and absolute discretion, sufficient documentation that (i) the Borrower used all of the loan proceeds for forgivable purposes described below and (ii) employee and compensation levels are maintained.

The actual amount of loan forgiveness will depend, in part, on the total amount of payroll costs, payments of interest on mortgage obligations incurred before February 15, 2020, rent payments on leases dated before February 15, 2020, and utility payments under service agreements dated before February 15, 2020, over the eight-week period following the date of the loan. Not more than 25 percent of the loan forgiveness amount may be attributable to non-payroll costs. The following is an exhaustive list of forgivable purposes:

	
 
	
1)
	
payroll costs (as defined in the Act and in 2.f.);

	
 
	
2)
	
costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;

	
 
	
3)
	
mortgage interest payments (but not mortgage prepayments or principal payments);

	
 
	
4)
	
rent payments;

	
 
	
5)
	
utility payments;

	
 
	
6)
	
interest payments on any other debt obligations that were incurred before February 15,.2020; and/or

	
 
	
7)
	
refinancing an SBA EIDL loan made between January 31, 2020 and April 3: 2020.

	
 
	
8.
	
Late Charges

For each payment of principal, interest. and/or fees which has not been paid in full within fifteen days after its date due, Borrower will pay to Lender a late charge of $15.00 or five percent (5%) of the amount due, whichever is greater. Borrower acknowledges and agrees that the amount of this late fee is reasonable with respect to this Loan, taking into account Lender's expectation of timely receipt of payments with regard to the favorable pricing of this Loan, and the operational, administrative and regulatory burdens flowing from late payments and delinquencies. To the extent this late fee or any other fee or charge set forth in this Agreement may be prohibited or exceed any limit provided by any present or future applicable law, such fee or charge shall be reduced to the maximum amount allowed.

	
 
	
9.
	
Prepayment

Borrower may prepay principal of the Loan at any time, in any amount, without penalty.

	
 
	
10.
	
Default

The following constitute defaults under this Agreement:

	
 
	
1)
	
a payment is not made when it is due;
	
 

	
 
	
2)
	
the terms of this Agreement are breached in any way;
	
 

	
 
	
3)
	
Customer defaults under the terms of any other obligation to Lender;
	
 

	
 
	
4)
	
a bankruptcy petition is filed by or against Customer or any of Customer's owners;
	
 

	
 
	
5)
	
a significant change occurs in the ownership or organizational structure of Customer or in the type or volume of such Customer's business or the death of a Customer;
	
 

	
 
	
6)
	
Customer becomes insolvent or is dissolved, or Lender otherwise believes in good faith that the prospect of payment and/or performance under this Agreement;
	
 

	
 
	
7)
	
payments to the Loan are returned or reversed for any reason;
	
 

	
 
	
8)
	
Customer fails to submit required information the Lender deems necessary.
	
 

	
 
	
11.
	
Remedies

In the event of any Default or failure to meet any condition under the preceding paragraphs, or upon any termination of a Loan, Lender may, at its option and without prior notification:

	
 
	
1)
	
close any and all Loans to all use, as well as any other account s for which the Customer is li able to Lender;
	
 

2

 

 

		
	
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2)
	
accelerate  payment of the full balance  on any or all Loans  as well as  any or all other account s  for which the Customer is liable to Len der, and thereby require immediate payment of the full balance,  including, without limitation any Lat e  Charges  or any other charges or fees of any kind due Len der.
	
 

	
 
	
3)
	
Lender may exercise its right of set-off against any obligation Lender owes to you, including a set-off to the extent permitted by law against any deposit account(s) you have with Lender.
	
 

	
 
	
12.
	
Borrower hereby certifies and represents that:

	
 
	
1)
	
Borrower is eligible to receive a loan under the rules in effect at the time the loan is made that have been issued by the Small Business Administration (SBA) implementing the Paycheck  Protection Program under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (the Paycheck Protection Program Rule).
	
 

	
 
	
2)
	
Borrower does  not  operate  an  ineligible  business  under  the CARES  Act and any  implementing rules, 13 CFR 120 .110 and described further in SBA's Standard Operating Procedure 50 10 , Subpart B,  Chapter 2. Borrower further certifies that Borrower is not engaged inany act ivity that is illegal under federal, state or local law.
	
 

	
 
	
3)
	
Borrower (1) is an independent contractor, eligible self-employed individual, or sole proprietor or (2) employs no more than the greater of 50 0 or employees or, if applicable,the size standard  in  number of employees established by the SBA in 13 CF.R. 121.201 for the Applicant's industry.
	
 

	
 
	
4)
	
The Borrower or any owner of Borrower is not presently suspended, debarred, proposed for debarment , declared ineligible, voluntarily excluded from participate  in this transaction by any Federal department or agency, or presently involved in any bankruptcy.
	
 

	
 
	
5)
	
The Borrower, any owner of Borrower or any business owned or controlled by either of them, has not obtained a direct or guaranteed  loan from SBA or an y other Federal  agency  that is  currently delinquent or has defaulted within the last seven (7) years   and caused a loss to the government
	
 

	
 
	
6)
	
The Borrower (if an individual) or any individual owning 20 %or more of the equity of the Borrower is not (a ) subject to an indictment, criminal inform at ion, arraignment, or other means by which formal criminal charges are brought in any jurisdiction, (b) presently incarcerated , or (c) on probation or parole.
	
 

	
 
	
7)
	
Within the last five (5) years,  the Borrower (if an individual) or an y individual owning 20%or more of the equity of the Borrower ha s not (a) been convicted of a felony; (b) pleaded guilty to a  felony; (c) pleaded nolo contend ere to a felony; (d) been placed on pretrial diversion for a felony; or (e) been pl a ced on any form of parole or probation (including probat ion before judgment ) for felony charges.
	
 

	
 
	
8)
	
The Borrower is not a household employer (e.g. an individual who employs household employees such as nannies or housekeepers).
	
 

	
 
	
9)
	
All document s submitted to Lender, including without limitation, payroll processor (records, payroll t ax filings, Form 10 99-MISC, or bank records, are true and correct.
	
 

	
 
	
10)
	
The Un it ed Stat es is the principal pl ace  of residence for all employees of the Borrower included in the Borrower's payroll calculation submitted to Lender.
	
 

	
 
	
11)
	
If the Borrower operates a franchise business, such franchise is listed on the SBA Franchise Directory.
	
 

	
 
	
12)
	
Any loan received by the Borrower under Section 7(b)(2) of the Small Business Act between January 31, 2020 and April 3, 2020 was  for a purpose other than paying payroll costs and other, allowable uses loans under the Paycheck Protection Program Rule.
	
 

	
 
	
13)
	
The Borrower was in operation on February 5, 2020 and had employees for whom it pa id salaries  and payroll t axes  or pa id independent contractors, as reported on Form(s) 1099-MISC.
	
 

	
 
	
14)
	
Current economic uncertainty makes this Loan request necessary to support the ongoing operations of the Borrower.
	
 

	
 
	
15)
	
The funds will be used to retain workers and maintain payroll or make  mortgage interest payments, lease payments, and utility payments, as specified under the Paycheck  Protection Program Rule;  I understand  that if the funds are knowingly used for unauthorized purposes, the federal government may hold me leg ally li able, such as for charges of  fraud.
	
 

	
 
	
16)
	
During the period beginning on February 15, 20 20 an d ending on December 31, 20 20 ,the Borrower ha s not and will not receive anot her loan under the Paycheck Protection Program.
	
 

	
 
	
17)
	
Borrower certifies that the information provided in the application and the information provided in all supporting documents and forms is true and accurate in all material respects. Borrower understands that knowingly making a false statement to obtain a guaranteed  loan from SBA is punishable under the law, including under 18 USC 10 0 1 and 3571 by imprisonment of not more than five years and/ or afine of up to $250,0 0 0 ; und er 15 USC 645 by imprisonment of not more than two years a nd/ or a fine of not more than $5,0 0 0 ; and, if submitted to a federally insured institution, under 18 USC 10 14 by imprisonment of not more than thirty years and/or a fine of not more than $1,000,000.
	
 

	
 
	
18)
	
Borrower acknowledges  that the lender will confirm the eligible loan amount using required document s submitted. Borrower understands, acknowledges and agrees that the Len der ca n sha re any t a x inform at ion that it ha s provided with SBA's authorized represent at ives, including authorized representatives of the SBA Office of Inspect or General,for the purpose of compliance with SBA Loa n Program Requirements and all SBA reviews.
	
 

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19)
	
The undersigned officer of the Borrower is duly authorized to execute and deliver this Agreement, the Note and all other documents executed in connection therewith, and the performance by the Borrower of the transact ions herein contemplated are and will be within its powers, have been duly authorized by all necessary entity action, and are not and will not be in contravention of any order of court or other agency of government, of law or, if applicable, its organizing or governing documents, or any indenture,agreement or undertaking to which it is a party or by which its property is bound, or be in conflict with, result in a breach of or constitute (with due notice and/or lapse of time) a default under any such indenture, agreement or undertaking or result in the imposition of any lien, charge or encumbrance of any nature on any of t he properties of such Borrower.
	
 

	
 
	
13.
	
Indemnification

Borrower agrees to indemnify Lender an d hereby holds Lender harmless against any and all claims, actions, suits, proceedings, costs, expenses, brokerage or other fees, including reasonable attorneys' fees, losses, damages and liabilities of any kind, including in tort, penalties and interest , which Lender may incur in any manner other  than Lender's own gross negligence or willful misconduct, by reason of any matter relating, directly or indirectly, to the Loan and the  Loan Documents, including, but in no way limited to, without limitation, the calculation of the  maximum Loan amount or the  amount of the Loan that qualifies as eligible for forgiveness.

	
 
	
14.
	
Attorney's fees and costs

Customer agrees to pay Lenders attorney's fees and costs: 1) related to this Agreement; or 2) related to enforcing this Agreement against customer or customer's owners (if applicable); or 3) related to collecting any amounts due under this Agreement from Customer or Customer's owners (if applicable).

	
 
	
15.
	
Collateral Exclusions

No deed of trust, mortgage, security deed, or similar real estate collateral agreement ("Lien Document"), nor any personal propert y security agreement other than this Agreement or any modification of same ("Security Agreement"), shall secure this Note unless such Lien Document or Security Agreement specifically describes this Agreement as a part of the indebtedness secured thereby. As used herein, this "Agreement" means either (i) this Agreement or (ii) a promissory note, Confirmation Letter or other evidence of indebtedness which has been modified, renewed or extended in whole or in part by this Agreement. This exclusion shall apply notwithstanding the fact that such Lien Document or Security Agreement may appear to secure this Agreement by virtue of a cross- collateralization provision or other provisions expanding the scope of the secured obligations.

	
 
	
16.
	
Supplemental provisions concerning cross-collateralization and personal property 

Notwithstanding anything to the contrary in any Lien Document which specifically describes this Agreement is  a part of the indebtedness secured thereby, (1) any cross-collateralization provision and any other provisions contained therein expanding the scope of the secured obligations beyond the Secured Debt, any related "swap agreements" (as defined in 11 U.S.C. Section 101), and obligations to protect and preserve collateral, shall have no force or effect, and (2) any lien or security interest granted in such Lien Document upon personal property shall not include any items of personal property located in a Covered Structure unless all applicable requirements of the Act, if any, have been satisfied with respect to such items of personal property.As used herein, "Secured Debt" means this Agreement and any other notes or agreements evidencing indebtedness specifically described or listed in and expressly secured by any such Lien Document(s) and modifications, renewals, and extensions of such notes and agreements, and "Covered Structure" means a building or mobile home as defined in the National Flood Insurance-Act (as amended), and its implementing regulations (collectively, the “Act ") locatedin an area designated by the Administrator of the Federal Emergency Management Agency as a special flood hazard area which requires flood insurance pursuant to the terms of the Act . Additionally, notwithstanding anything to the contrary in the Agreement, personal property security interests granted pursuant to the terms of the Agreement shall not secure any obligations beyond this Agreement any related "swap agreements" (as defined in 11 U.S.C. Section 101), and obligations to protect and preserve collateral. This exclusion shall apply notwithstanding  the fact that the Agreement may appear to secure such other obligations by virtue of the definition of Indebtedness contained in the Agreement.

	
 
	
17.
	
Money Laundering, Sanctions, Corrupt Practices, and Compliance with all laws

Borrower represents, warrants and agrees that Borrower, all Borrowers, and any of their parents, affiliates, subsidiaries, officers, directors, or agents (the "Borrowing Group") (1) are not now and will not become a Sanctioned Target (as defined below) of any trade, economic, financial, sectoral or secondary sanctions, restrictions, embargoes, or anti-terrorism laws promulgated by the United Nations or the governments of the United States, the United Kingdom, the European Union, or any other governmental authority with jurisdiction over any of the Borrowing Group (collectively, “Sanctions"), and are not owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, a Sanctioned Target, (2) now comply and will at all times comply with, and have instituted and maintain, policies, procedures and controls reasonably designed to assure compliance with, the requirements of all laws, rules, regulations and orders of any governmental authority with jurisdiction over any of the Borrowing Group, or that are otherwise  applicable to the Borrowing Group, including, without limitation, (a) all Sanctions, (b) all laws and regulations that relate to money laundering, any predicate crime to money laundering, or any financial record keeping and reporting requirements related thereto ("Anti-Money Laundering Laws"),and (c) the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.K. Bribery Act of 2010, as amended, and any other anti-bribery or anti-corruption laws and regulations in any jurisdiction in which the Borrowing Group is located or doing business ("Anti-Corrupt ion Laws"), (3) to the best of Borrower's knowledge, after due care and inquiry, are not under investigation for an alleged violation of Sanctions, Anti-Money Laundering Laws or Anti-Corruption Laws by a governmental authority that enforces such Sanctions, Anti-Money Laundering Laws or Anti-Corruption Laws, (4) will not at any time directly or indirectly use any proceeds of any credit extended by Lender to fund, finance or facilitate any activities, businesses or transactions that are prohibited by Sanctions, Anti-Money Laundering Laws or Ant i-Corruption Laws, or that would be prohibited by the same if conducted by Lender or any other party hereto, and (5) shall not fund any 

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repayment of the credit with proceeds, or provide as collateral any property, that is directly or indirectly derived from any transaction or activity that is prohibited by Sanctions, Anti-Mon(¥ Laundering Laws or Anti-Corruption Laws, or that could otherwise cause the Lender or any other party to this agreement to be in violation of Sanctions, Anti- Money Laundering Laws or Anti-Corruption Laws. Borrower shall notify Lender in writing not more than one (1) business day after first becoming aware of any breach of the foregoing paragraph. "Sanctioned Target" means any target of Sanctions, including (1) persons on any list of targets identified or designated pursuant to any Sanctions, (2) persons, countries, or territories that are the target of any territorial or country-based Sanctions program, (3) persons that are a target of Sanctions due to their ownership or control by any Sanctioned Target(s), or (4) persons otherwise a target of Sanctions, including vessels and aircraft, that are designated under any Sanctions program.

	
 
	
18.
	
Laws governing this agreement

The laws of the state of South Dakota shall govern this Agreement. If any part of this Agreement cannot be enforced, this fact will not affect the rest of this Agreement. Lender may delay or forego enforcing any of its rights or remedies under this Agreement without losing them. Notwithstanding anything to the contrary, this Agreement shall not require or permit the payment, taking, reserving, receiving, collection, or charging of any sums constituting interest that exceed any maximum amount of interest permitted by applicable law. Any such excess interest shall be credited against the then unpaid principal balance or refunded to Customer. Without limiting the foregoing, all calculations to determine whether interest exceeds the maximum amount shall be made by amortizing, pro-rating, allocating, and spreading such sums over the full term of the loan.

	
 
	
19.
	
Limitation on Lawsuits

Customer agrees that any lawsuit based upon any cause of action which Customer may have against Lender must be filed within one year from the date that it arises or Customer will be barred from filing the lawsuit. This limitation is intended to include tort, contract, and all other causes of action for which Customer and Lender may lawfully contract to set limitations for bringing suit.

	
 
	
20.
	
Credit Evaluation

Credit reports and re-evaluation of credit: You authorize Lender to obtain business and personal credit bureau reports in the name of the Customer or its owners, at any time. You agree to submit to Lender current financial information in the name of the Customer and to submit to Lender, current financial information in its name, and the name of its owners at any time upon request. Such information shall be used1for, the purpose of evaluating or re-evaluating Customer's or its owners' creditworthiness. You also authorize Lender to use such information and to share it with its affiliates in order to determine whether you are qualified for other products and services offered by Lender and its affiliates. Lender may report its credit experience with Customer, its owners', and Customer's Loan(s) to third parties. Customer agrees that Lender may release information about Customer, its owners', the Loan Borrower(s)' and/or Customer's Loan to Lender affiliates.

Important Notice about Credit reporting: Lender may report information about your Loan(s) to credit bureaus and/or consumer reporting agencies in your name or the name of your business organization. Late payments, missed payments, or other defaults on your Loan(s) may be reflected in your personal credit report or your business organization's credit report{s).

	
 
	
21.
	
ARBITRATION

	
 
	
1)
	
Binding Arbitration: The parties hereto agree, upon demand by any party, to submit any dispute to binding arbitration in accordance with the terms of this Paragraph 19 (the "Arbitration Program"). Arbitration may be demanded before the institution of a judicial proceeding, or during a judicial proceeding, but not more than 60 days after service of a complaint, third party complaint, cross-claim, or any answer thereto, or any amendment to any of such pleadings. A "Dispute" shall include any dispute, claim, or controversy of any kind, in contract or in tort, legal or equitable, now existing or hereafter arising, relating in any way to any aspect of this agreement, or any other agreement, document or instrument to which this Arbitration Program is attached or in which it appears or is referenced, or any related agreements, documents or instruments or any renewal, extension, modification, or refinancing of any indebtedness or obligation relating to the foregoing, including without limitation, their negotiation, execution, collateralization, administration, repayment, modification, extension, substitution, formation, inducement, enforcement, default, or termination. This provision is a material inducement for the parties entering into the transactions relating to this Agreement, DISPUTES SUBMITTED TO ARBITRATION ARE NOT RESOLVED IN COURT BY A JUDGE OR JURY. TO THE EXTENT ALLOWED BY APPLICABLE LAW, THE PARTIES IRREVOCABLY AND VOLUNTARILY WAIVE ANY RIGHTTHEY MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY DISPUTE ARBITRATED PURSUANT TO THIS ARBITRATION PROGRAM.
	
 

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2)
	
Governing Rules:  Any arbitration proceeding will: (i) be governed by the Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law provision in any of the documents between the parties; and (ii) be conducted by the American Arbitration Association ("AAA"), or such other administrator as the parties shall mutually agree upon, in accordance with the AAA's commercial dispute resolution procedures, unless the claim or counterclaim is at least $1,000,000.00 exclusive of claimed interest, arbitration fees, and costs in which case the arbitration shall be conducted in accordance with the AAA's optional procedures for large, complex commercial disputes (the commercial dispute resolution  procedures or the optional procedures for large complex commercial disputes to be referred to herein, as applicable, as the "Rules"). If there is an inconsistency between the terms hereof and the Rules , the terms and procedures set forth herein shall control. Arbitration proceedings hereunder shall be conducted at a location mutually agreeable to the parties, or if they cannot agree, then a t a location selected by the AAA in the state of South Dakota . Any party who fails or refuses to submit to arbitration following a demand by any other party shall bear all costs and expenses incurred by such other party in compelling arbitration of any Dispute.The arbitrator shall award all costs and expenses of the arbitration proceeding. Nothing contained herein shall be deemed to be a waiver by any party that is a lender of the protections afforded to it under 12 U.S.C. §91 or any similar applicable state law.
	
 

	
 
	
3)
	
No Waiver of Provisional Remedies, Self-Help, and Foreclosure: The arbitration requirement does not limit the right of any pa rty to: (i) foreclose against any rea l or personal property collateral; (ii) exercising self-help remedies relating to collateral or proceeds of collateral such as setoff or repos s es s ion; or (iii) obtain provisional or ancillary remedies such as replevin, injunctive relief, attachment, or the appointment of a receiver, before during or after the pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the right or any party, including the plaintiff, to submit the controversy or claim to arbitration if any other pa rty contests such action for judicial relief, including those arising from the exercise of the action s detailed in section (i), (ii), and (iii) of this paragraph.
	
 

	
 
	
4)
	
Arbitrator Qualifications and Powers: Any arbitration proceeding in which the amount in controversy is $5,000,000.00 or less will be decided by a single arbitrator selected according to the Rules, and shall not render an award of greater than $5,000,000.00. Any Dispute in which the amount in controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel of three arbitrators; provided however, that all three arbitrators must actively participate in all hearings and deliberations. Every arbitrator must be a neutral practicing attorney or a retired member of the state or federal judiciary, in either case with a minimum of ten years' experience in the substantive law applicable to the subject matter of the Dispute. The arbitrator will determine whether or not an issue  is arbitrable  and will give effect to the statutes of limitation in determining any claim. In any arbitration proceeding the arbitrator will decide (by documents only or with a hearing at the arbitrator’s discretion) all pre-hearing motions which are similar to motions to dismiss for failure to state a claim or motions for summary adjudication. The arbitrator shall resolve  all Disputes in accordance with the applicable substantive law and may grant any remedy or relief that a court of such state could order or grant within the scope hereof and such ancillary relief as is necessary to make effective any award. The arbitrators shall also have the power to award recovery of all costs and fees, to impose sanctions and to take such other actions  a s the arbitra tor deems necessary to the same extent a judge could pursuant to the Federal Rules of Civil Procedure, the applicable state rules of civil procedure, or other applicable law.  Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction.The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of any party, including the plaintiff ,to submit the controversy or claim to arbitration if any other party contests such action for judicial relief.
	
 

	
 
	
5)
	
Discovery: In any arbitration proceeding discovery will be permitted in accordance with the Rules .All discovery shall be expressly limited to matters directly relevant to the Dispute being arbitrated and must be completed no later than 20 days before the hearing date. Any requests for an extension of the discovery periods, of any discovery disputes, will be subject to final determination by the arbitrator  upon a showing that the request for discovery is essential for the party's presentation and that no alternative means for obtaining information is available.
	
 

	
 
	
6)
	
Class Proceedings and Consolidations: No party shall be entitled to join or consolidate disputes by or against others in any arbitration, except parties to this Agreement, or to include in any arbitration any dispute as a representative or member of a class, or to act in any arbitration in the interest of the general public or in a private attorney general capacity.
	
 

	
 
	
7)
	
Miscellaneous: To the maximum extent practicable, the AAA, the arbitrators, and the parties shall take all action required to conclude any. arbitration proceeding within 180 days of the filing of the Dispute with the AAA. No arbitrator or other party to an arbitration proceeding may disclose the existence, content or results thereof, except for disclosures of information by a party  required in the ordinary course of its business or by applicable law or regulation. If more than one agreement for arbitration by or between the parties potentially applies to a Dispute, the arbitration provision most directly related to the documents between the pa rties or the subject matter of the disputes shall control. This arbitration provision shall  survive the repayment of the obligation s that are the subject of the agreement and the termination, amendment, or expiration of any of the documents or any relationship between the parties .
	
 

	
 
	
8)
	
SBA Arbitration: The parties specifically agree that the provisions of the Arbitration Program set forth above are not applicable to any dispute between any party and the U.S. Small Business Administration (the "SBA"), including but not limited to, any dispute with the SBA after purchase of the loan by the SBA.
	
 

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DocuSign  Envelope ID: BE323CFA-9C39-4DCD-BD39-E659BA7B5501
	
THIS IS A COPY

	
 
	
The Authoritative Copy of this record is held at www.docusign.net

 

	
 
	
22.
	
SMALL BUSINESS ADMINISTRATION (SBA)

When SBA is the holder, this Agreement 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 Agreement, 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.

	
 
	
24.
	
FACSIMILEANDCOUNTERPARTS

This document may be signed in any number of separate copies, each of which shall be effective as an original, but all of which taken together shall constitute a single document. This Agreement shall be valid, binding, and enforceable against a party when executed by an authorized individual on behalf of the party by means of (i) an electronic signature that complies with the federal Electronic Signatures in Global and National Commerce Act, state enactments of the

Uniform Electronic Transactions Act, or any other relevant and applicable electronic signatures law; {ii) an original manual signature; or (iii) a faxed, scanned, or photocopied manual signature. Each electronic signature or faxed, scanned, or photocopied manual signature shall for all purposes have the same validity, leg a effect, and admissibility in evidence as an original manual signature.

	
 
	
25.
	
TELEPHONE MONITORING AND CONTACTING YOU

The Lender may monitor or record calls. You agree, in order for Lender to service the Loan or to collect any amounts you may owe, that Lender may from time to time make calls and send text messages to you, using prerecorded/artificial voice messages and/or through the use of an automatic dialing device, at any telephone number associated with your account, including mobile telephone numbers that could result in charges to you. You also expressly consent to Lender sending email messages regarding your Loan to your email address.

	
 
	
26.
	
FINAL AGREEMENT

The persons and entities signing below ("Party", or collectively, the "Parties") acknowledge and agree that each Party's execution of this Agreement constitutes acknowledgment that such Party (i) agrees that there are no oral agreements relating to this Agreement, (ii) agrees that agreements will be binding upon Lender only if in writing and signed by Lender, and (iii) acknowledges receipt of the following Notice, and to the fullest extent allowed by law, agrees to be bound by the terms of this Agreement and this Notice.

Notice: This Document And All Other Documents Relating To This Loan Constitute A Written Loan Agreement Which Represents The Final Agreement Between The Parties And May Not Be Contradicted By Evidence Of Prior, Contemporaneous, Or Subsequent Oral Agreements Of The Parties. There Are No Unwritten Oral Agreements Between The Parties Relating To This Loan.

	
 
	
27.
	
TIME IS OF THE ESSENCE. Time is of the essence in the performance of the Agreement. '

	
 
	
28.
	
JOI NT AND SEVERAL LIABILITY. The obligations of each Borrower shall be joint and several.

	
 
	
29.
	
STATE SPECIFIC PROVISIONS.

If Borrower is resident of Delaware, Pennsylvania, or Maryland:.

Confession Of Judgment. The Undersigned Hereby Irrevocably Authorizes And Empowers Any Attorney-At-Law To Appear In Any Court Of Record And To Confess Judgment Against The Undersigned For The Unpaid Amount Of This Note As Evidenced By An Affidavit Signed By An Officer Of Lender Setting Forth The amount Then Due, Together With All Indebtedness Provided For Therein (With Or Without Acceleration Of Maturity), Plus Attorneys' Fees Of Ten Percent (10%) Of The Total indebtedness Or Five Thousand Dollars ($5,000.00), Whichever Is The Larger Amount For The Collection, Which Borrower And Lender Agree Is Reasonable, Plus Costs Of Suit, and To Refease All Errors, And Waive All Rights Of Appeal. The Undersigned Expressly Releases All Errors, Waives All Stay Of Execution, Rights Of Inquisition And Extension Upon Any Levy Upon Real Estate And All Exemption Of Property From Levy And Sale Upon Any Execution Hereon; And The Undersigned Expressly Agrees To Condemnation And Expressly Relinquishes All Rights To Benefits Or Exemptions Under Any And All Exemption Laws Now-In Force Or Which May Hereafter Be Enacted. No Single Exercise Of The Foregoing Warrant And Power To Confess Judgment Will Be Deemed To Exhaust The Power, Whether Or Not Any Such Exercise Shall Be Held By Any Court To Be Invalid, Voidable Or Void; But The Power Will Continue Undiminished And May Be Exercised From Time To Time As Lender May Elect Until All Amounts Owing On This Note Have Been Paid In Full. The Undersigned Hereby Waives And Releases Any And All Claims Or Causes Of Action Which The Undersigned Might Have Against Any Attorney Acting Under The Terms Of Authority Which The Undersigned Has Granted Herein Arising Out Of Or Connected With The Confession Of Judgment Hereunder.

If Borrower is resident of Ohio:

Confession Of Judgment. The Undersigned Hereby Irrevocably Authorizes And Empowers Any Attorney-At-Law To Appear In Any Court Of Record And To Confess Judgment Against The Undersigned For The Unpaid Amount Of This Note As Evidenced By An Affidavit Signed By An Officer Of Lender Setting Forth The Amount Then Due, Together With All Indebtedness Provided For Therein (With Or Without Acceleration Of Maturity), Plus Attorneys' Fees Of Ten Percent (10%) Of The Total Indebtedness Or Five Thousand Dollars ($5,000.00), Whichever Is The Larger Amount For The Collection, Which Borrower And Lender Agree Is Reasonable, Plus Costs Of Suit, And To Release All Errors, And Waive All Rights Of Appeal. The Undersigned Expressly Releases All Errors, Waives All Stay Of Execution, Rights Of Inquisition And Extension Upon Any Levy Upon Real Estate And All Exemption Of Property From Levy And Sale Upon Any Execution Hereon; And The Undersigned Expressly Agrees To Condemnation And Expressly Relinquishes All Rights To Benefits Or 

7

 

 

		
	
DocuSign  Envelope ID: BE323CFA-9C39-4DCD-BD39-E659BA7B5501
	
THIS IS A COPY

	
 
	
The Authoritative Copy of this record is held at www.docusign.net

 

Exemptions Under Any And All Exemption Laws Now In Force Or Which May Hereafter Be Enacted. No Single Exercise Of The Foregoing Warrant And Power To Confess Judgment Will Be Deemed To Exhaust The Power, Whether Or Not Any Such Exercise Shall Be Held By Any Court To Be Invalid, Voidable Or Void; But The Power Will Continue Undiminished And May Be Exercised From Time To Time As Lender May Elect Until All Amounts Owing On This Note Have Been Paid In Full. The Undersigned Hereby Waives And Releases Any And All Claims Or Causes Of Action Which The Undersigned Might Have Against Any Attorney Acting Under The Terms Of Authority Which The Undersigned Has Granted Herein Arising Out Of Or Connected With The Confession Of Judgment Hereunder.

WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINSTTHE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE

If Borrower is resident of Virginia:

Confession Of Judgment. In The Event Of Any Default Under This Instrument, Including, But Not Limited To Any Payment Under This Instrument Not Being Paid When Due, Whether At Maturity, By Acceleration Or Otherwise, Borrower Hereby Irrevocably Appoints And Constitutes Dawn Dibenedetto Whose Address Is 400 N 8Th Street, Suite 1150, Richmond, VA 23219, Borrower's Duly Constituted Attorney-In-Fact To Appear In The Clerk's Office Of The Circuit Court For City Of Richmond, Virginia Or In Any Other Court Of Competent Jurisdiction, And To Confess Judgment Pursuant To The Provisions Of Section 8.01- 432 Of The Code Of Virginia Of 1950, As Amended, Against Borrower For All Principal And Interest And Any Other Amounts Due And Payable Under This Instrument As Evidenced By An Affidavit Signed By An Officer Of The Lender Setting Forth The Amount Then Due, Together With Attorney’s Fees And Collection Fees As Provided In This Instrument (To The Extent Permitted By Law). This Power Of Attorney Is Coupled With An Interest And May Not Be Terminated By Borrower And Shall Not Be Revoked Or Terminated By Borrower And Shall Not Be Revoked Or Terminated By Borrower's death, Disability Or Dissolution. If A Copy Of The Instrument, Verified By Affidavit, Shall Have Been Filed In The Above Clerk's ice; It Will Not Be Necessary To File The-Original As A Warrant Of Attorney. Borrower Releases All Errors And Waives All Rights Of Appeal, Stay Of Execution, And The Benefit Of All Exemption Laws Now Or Hereafter In Effect. Borrower Shall, Upon Lender's Request, Name Such Additional Or Alternative Person(S) Designated By Lender As Borrower's Duly Constituted Attorney(S)-ln-Fact To Confess Judgment Against The Borrower. No Single Exercise Of The Power To Confess .Judgment Shall Be Deemed To Exhaust The Power And No Judgment Against Fewer Then All The Persons Constituting The Borrower Shall Bar Subsequent Action Or Judgment Against Any One Or More Of Such Persons Against Whom Judgment Has Not Been Obtained In This Instrument

If Borrower is resident of Wisconsin:

Each Borrower who is married represents that this obligation is Incurred in the interest of his or her marriage or family.

If Borrower is resident of Missouri:

Oral or unexecuted agreements or commitments to loan money, extend credit or to forbear from enforcing repayment of a debt including promises to extend or renew such debt are not enforceable, regardless of the legal theory upon which it is based that is in any way related to the credit agreement To protect you, the Borrower(s), and us, the Lender, from misunderstanding or disappointment, any agreements we reach covering such matters are contained in this writing, which is the complete and exclusive statement of the agreement between us, except as we may later agree in writing to modify it.

If Borrower is resident of Illinois:

Borrower Agrees That Borrower, This Note And All Other Documents Executed In Connection Herewith, Regardless Of The Choice Of Law Made By Lender/Holder, Shall Be Governed By The Provisions Of The Credit Agreements Act (As Enacted By And Interpreted In The State Of Illinois) (815 llcs 160 Et. Seq.) And As ThatAct May Be Amended From Time To Time.

If Borrower is resident of Oregon:

Under Oregon Law, Most Agreements, Promises And Commitments Made By Lender Concerning Loans And Other Credit Extensions Which Are Not For Personal, Family, Or Household Purposes Or Secured Solely By Grantor's/Borrower's Residence Must Be In Writing, Express Consideration And Be Signed By An Authorized Representative Of Lender To Be Enforceable.

 

8

 

 

		
	
DocuSign  Envelope ID: BE323CFA-9C39-4DCD-BD39-E659BA7B5501
	
THIS IS A COPY

	
 
	
The Authoritative Copy of this record is held at www.docusign.net

 

 

If Borrower is resident of Washington: 

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.

 

			
	
Wells Fargo Bank, National Association

	
By
	
 
	

	
Name
	
 
	
 

	
 
	
 
	
Division Lending Manager

	
Title
	
 
	
 

	
 
	
 
	
05/03/2020

	
Date
	
 
	
 

 

9

 

 

		
	
DocuSign  Envelope ID: BE323CFA-9C39-4DCD-BD39-E659BA7B5501
	
THIS IS A COPY

	
 
	
The Authoritative Copy of this record is held at www.docusign.net

 

Borrower Acknowledgement and Acceptance

By signing below, and intending to be legally bound, Borrower acknowledges receipt of the Agreement. Adomani Inc 

 

BY.DocuSlgned by: 

Michael K Menerey 

Nam  (Signature)

 

 

Title (Borrower's Title)

 

 

If Borrower is resident of Delaware, Pennsylvania, Ohio, Maryland or Virginia:

 

 

Borrower (Borrower's Name)

Wells Fargo Bank, National Association

Lender

05/03/2020 I 7:03:20 PM CDT

Date

 

 

 

Disclosure for Confession of Judgment

 

I/We have executed a Promissory Note (the “Note") obligating Borrower to repay the amount described therein.

 

	
 
	

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
Initials
	
 
	
Initials

 

I/We understand that the Note contains wording that would permit Lender to enter judgment against Borrower in Court, without advance notice to Borrower and without offering Borrower an opportunity  to defend against the  entry of judgment, and that the judgment may be collected immediately by any legal means.

 

	
 
	

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
Initials
	
 
	
Initials

 

In executing the Note, Borrower is knowingly, understandingly and voluntarily waiving its rights to resist the entry of judgment against it at the courthouse, including any right to advance notice of the entry of, or execution upon, said judgment, and Borrower is consenting to the confession of judgment.

 

	
 
	

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
Initials
	
 
	
Initials

 

10adom-ex102_47.htm

Exhibit 10.2

 

	
SBA Loan #7852037408
	
Application #3600041404

 

LOAN AUTHORIZATION AND AGREEMENT (LA&A)

 

A PROPERLY SIGNED DOCUMENT IS REQUIRED PRIOR TO ANY DISBURSEMENT

 

	
CAREFULLY READ THE LA&A:

This document describes the terms and conditions of your loan. It is your responsibility to comply with ALL the terms and conditions of your loan.

 

 

	
	
SIGNING THE LA&A:

All borrowers must sign the LA&A.

•     Sign your name exactly as it appears on the LA&A. If typed incorrectly, you should sign with the correct spelling.

•    If  your middle  initial  appears  on the signature line, sign with your middle initial.

•    If a suffix appears on the signature line, such as Sr. or Jr., sign with your suffix.

•    Corporate Signatories: Authorized representatives should sign the signature page.

 

Your signature represents your agreement to comply

 with the terms and conditions of the loan.

 

 

 

 

 

 

Ref 50 30

 

Exhibit 10.2

 

	
SBA Loan #7852037408
	
Application #3600041404

 

 

 

Economic Injury Disaster Loan

U.S. Small Business Administration

 

 

LOAN AUTHORIZATION AND AGREEMENT

 

 

Date: 05.17.2020 (Effective Date)

 

On the above date, this Administration (SBA) authorized (under Section 7(b) of the Small Business Act, as amended) a Loan (SBA Loan #7852037408) to ADOMANI, Inc. (Borrower) of 4740 Green River Road, Ste. 106 Corona California 92880 in the amount of one hundred and fifty thousand and 00/100 Dollars ($150,000.00), upon the following conditions:

 

PAYMENT

 

	
 
	
•
	
Installment payments, including principal and interest, of $731.00 Monthly. will begin Twelve (12) months from the date of the promissory Note. The balance of principal and interest will be payable Thirty (30) years from the date of the promissory Note.

 

INTEREST

 

	
 
	
•
	
Interest will accrue at the rate of 3.75% per annum and will accrue only on funds actually advanced from the date(s) of each advance.

 

PAYMENT TERMS

 

	
 
	
•
	
Each payment will be applied first to interest accrued to the date ofreceipt of each payment, and the balance , if any, will be applied to principal.

 

	
 
	
•
	
Each payment will be made when due even if at that time the full amount of the Loan has not yet been advanced or the authorized amount of the Loan has been reduced.
	
 

 

COLLATERAL

 

	
 
	
•
	
For loan amounts of greater than $25,000, Borrower hereby grants to SBA, the secured party hereunder, a continuing security interest in and to any and all " Collateral" as described herein to secure payment and performance of all debts, liabilities and obligations of Borrower to SBA hereunder without limitation, including but not limited to all interest , other fees and expenses (all hereinafter called "Obligations "). The Collateral includes the following property that Borrower now owns or shall acquire or create immediately upon the acquisition or creation thereof: all tangible and intangible personal property, in cluding , but not limited to: (a) in ventory, (b) equipment, (c) inst ruments, including promissory notes (d) chattel paper, including tangible chattel paper and electronic chattel paper, (e) documents, (f) letter of credit rights, (g) accounts, includinghealth-care insurance receivables and credit card receivables, (h) deposit accounts, (i) commercial tort claims, (j) general intangibles, including payment intangibles and software and (k) as-extracted collateral as such terms may from time to time be defined in the Uniform Commercial Code. The security interest Borrower grants includes all accessions, attachments, accessories, parts, supplies and replacements for the Collateral, all products, proceeds and collections thereof and all records and data relating thereto.

 

	
 
	
•
	
For loan amounts of $25,000 or less, SBA is not taking a security interest in any collateral.

 

 

Page 2 of 7

 

	
SBA Form 1391 (5-00)
	
Ref 50 30

 

Exhibit 10.2

 

	
SBA Loan #7852037408
	
Application #3600041404

 

 

REQUIREMENTS RELATIVE TO COLLATERAL

 

	
 
	
•
	
Borrower will not sell or transfer any collateral (except normal inventory turnover in the ordinary course of business) described in the "Collateral" paragraph hereof without the prior written consent of SBA.

 

	
 
	
•
	
Borrower will neither seek nor accept future advances under any superior liens on the collateral securing this Loan without the prior written consent of SBA.

 

USE OF LOAN PROCEEDS

 

	
 
	
•
	
Borrower will use all the proceeds of this Loan solely as working capital to alleviate economic injury caused by disaster occurring in the month of January 31, 2020 and continuing thereafter and to pay Uniform Commercial Code (UCC) lien filing fees and a third-party UCC handling charge of$100 which will be deducted from the Loan amount stated above.

 

REQUIREMENTS FOR USE OF LOAN PROCEEDS AND RECEIPTS

 

	
 
	
•
	
Borrower will obtain and itemize receipts (paid receipts, paid invoices or cancelled checks) and contracts for all Loan funds spent and retain these receipts for 3 years from the date of the final disbursement. Prior to each subsequent disbursement (if any) and whenever requested by SBA, Borrower will submit to SBA such itemization together with copies of the receipts.

 

	
 
	
•
	
Borrower will not use, directly or indirectly, any portion of the proceeds of this Loan to relocate without the prior written permission of SBA. The law prohibits the use of any portion of the proceeds of this Loan for voluntary relocation from the business area in which the disaster occurred. To request SBA's prior written pennission to relocate, Borrower will present to SBA the reasons therefore and a description or address of the relocation site. Determinations of(l) whether a relocation is voluntary or otherwise, and (2) whether any site other than the disaster-affected location is within the business area in which the disaster occurred, will be made solely by SBA.

 

	
 
	
•
	
Borrower will, to the extent feasible, purchase only American-made equipment and products with the proceeds of this Loan.

 

	
 
	
•
	
Borrower will make any request for a loan increase for additional disaster-related damages as soon as possible after the need for a loan increase is discovered. The SBA will not consider a request for a loan increase received more than two (2) years from the date of loan approval unless, in the sole discretion of the SBA, there are extraordinary and unforeseeable circumstances beyond the control of the borrower.

 

DEADLINE FOR RETURN OF LOAN CLOSING DOCUMENTS

 

	
 
	
•
	
Borrower will sign and return the loan closing documents to SBA within 2 months of the date of this Loan Authorization and Agreement. By notifying the Borrower in writing, SBA may cancel this Loan if the Borrower fails to meet this requirement. The Borrower may submit and the SBA may, in its sole discretion, accept documents after 2 months of the date of this Loan Authorization and Agreement.

 

COMPENSATION FROM OTHER SOURCES

 

	
 
	
•
	
Eligibility for this disaster Loan is limited to disaster losses that are not compensated by other sources. Other sources include but are not limited to: (1) proceeds of policies of insurance or other indemnifications , (2) grants or other reimbursement (including loans) from government agencies or private organizations, (3) claims for civil liability against other individuals, organizations or governmental entities, and (4) salvage (including any sale or re-use) of items of damaged property.

 

	
 
	
•
	
Borrower will promptly notify SBA of the existence and status of any claim or application for such other compensation, and of the receipt of any such compensation, and Borrower will promptly submit the proceeds of same (not exceeding the outstanding balance of this Loan) to SBA.

 

Page 3 of 7

 

	
SBA Form 1391 (5-00)
	
Ref 50 30

 

Exhibit 10.2

 

	
SBA Loan #7852037408
	
Application #3600041404

 

 

	
 
	
•
	
Borrower hereby assigns to SBA the proceeds of any such compensation from other sources and authorizes the payor of same to deliver said proceeds to SBA at such time and place as SBA shall designate.

 

	
 
	
•
	
SBA will in its sole discretion determine whether any such compensation from other sources is a duplication of benefits. SBA will use the proceeds of any such duplication to reduce the outstanding balance of this Loan, and Borrower agrees that such proceeds will not be applied in lieu of scheduled payments.

 

DUTY TO MAINTAIN HAZARD INSURANCE

 

	
 
	
•
	
Within 12 months from the date of this Loan Authorization and Agreement the Borrower will provide proof of an active and in effect hazard insurance policy including fire, lightning, and extended coverage on all items used to secure this loan to at least 80% of the insurable value. Borrower will not cancel such coverage and will maintain such coverage throughout the entire term of this Loan. BORROWER MAY NOT BE ELIGIBLE FOR EITHER ANY FUTURE DISASTER ASSISTANCE OR SBA FINANCIAL ASSISTANCE IF THIS INSURANCE IS NOT MAINTAINED AS STIPULATED HEREIN THROUGHOUT THE ENTIRE TERM OF THIS LOAN. Please submit proof of insurance to: U.S. Small Business Administration, Office of Disaster Assistance, 14925 Kingsport Rd, Fort Worth , TX. 76155.

 

BOOKS AND RECORDS

 

	
 
	
•
	
Borrower will maintain current and proper books of account in a manner satisfactory to SBA for the most recent 5 years until 3 years after the date of maturity, including extensions, or the date this Loan is paid in full, whichever occurs first. Such books will include Borrower's financial and operating statements, insurance policies, tax returns and related filings, records of earnings distributed and dividends paid and records of compensation to officers, directors, holders of 10% or more of Borrower's capital stock, members , partners and proprietors.

 

	
 
	
•
	
Borrower authorizes SBA to make or cause to be made, at Borrower's expense and in such a manner and at such times as SBA may require: (1) inspections and audits of any books, records and paper in the custody or control of Borrower or others relating to Borrower's financial or business conditions, including the making of copies thereof and extracts therefrom, and (2) inspections and appraisals of any of Borrower's assets.

 

	
 
	
•
	
Borrower will furnish to SBA, not later than 3 months following the expiration of Borrower's fiscal year and in such form as SBA may require, Borrower's financial statements.

 

	
 
	
•
	
Upon written request of SBA, Borrower will accompany such statements with an 'Accountant's Review Report' prepared by an independent public accountant at Borrower's expense.

 

	
 
	
•
	
Borrower authorizes all Federal, State and municipal authorities to furnish reports of examination, records and other information relating to the conditions and affairs of Borrower and any desired information from such reports, returns, files, and records of such authorities upon request of SBA.

 

 

Page 4 of 7

 

	
SBA Form 1391 (5-00)
	
Ref 50 30

 

Exhibit 10.2

 

	
SBA Loan #7852037408
	
Application #3600041404

 

 

LIMITS ON DISTRIBUTION OF ASSETS

 

	
 
	
•
	
Borrower will not, without the prior written consent of SBA, make any distribution of Borrower's assets, or give any preferential treatment , make any advance, directly or indirectly, by way ofloan, gift, bonus, or otherwise, to any owner or partner or any of its employees, or to any company directly or indirectly controlling or affiliated with or controlled by Borrower, or any other company.

 

EQUAL OPPORTUNITY REQUIREMENT

 

	
 
	
•
	
If Borrower has or intends to have employees, Borrower will post SBA Form 722, Equal Opportunity Poster (copy attached ), in Borrower's place of business where it will be clearly visible to employees, applicants for employment, and the general public.

 

DISCLOSURE OF LOBBYING ACTIVITIES

 

	
 
	
•
	
Borrower agrees to the attached Certification Regarding Lobbying Activities

 

BORROWER S CERTIFICATIONS

 

Borrower certifies that:

 

	
 
	
•
	
There has been no substantial adverse change in Borrower's financial condition (and organization, in case of a business borrower) since the date of the application for this Loan. (Adverse changes include, but are not limited to: judgment lie ns, tax liens, mechanic's liens , bankruptcy, financial reverses, arrest or conviction of felony, etc.)

 

	
 
	
•
	
No fees have been paid, directly or in directly , to any representative (attorney , accountant, etc.) for services provided or to be provided in connection with applying for or closing this Loan, other than those reported on SBA Form 5 Business Disaster Loan Application' ; SBA Form 3501 COVID-19 Economic Injury Disaster Loan Application ; or SBA Form 159, 'Compensation Agreement'. All fees not approved by SBA are prohibite d.

 

	
 
	
•
	
All representations in the Borrower's Loan application (including all supplementary submissions) are true, correct and complete and are offered to induce SBA to make this Loan.

 

	
 
	
•
	
No claim or application for any other compensation for disaster losses has been submitted to or requested of any source, and no such other compensation has been received, other than that which Borrower has fully disclosed to SBA.

 

	
 
	
•
	
Neither the Borrower nor, if the Borrower is a business, any principal who owns at least 50% of the Borrower , is delinquent more than 60 days under the terms of any: (a) administrative order; (b) court order; or (c) repayment agreement that requires payment of child support.

 

	
 
	
•
	
Borrower certifies that no fees have been paid, directly or indirectly, to any representative (attorney, accountant, etc.) for services provided or to be provided in connection with applying for or closing this Loan, other than those reported on the Loan Application . All fees not approved by SBA are prohibited. If an Applicant chooses to employ an Agent, the compensation an Agent charges to and that is paid by the Applicant must bear a necessary and reasonable relationship to the services actually performed and must be comparable to those charged by other Agents in the geographical area. Compensation cannot be contingent on loan approval. In addition, compensation must not include any expenses which are deemed by SBA to be unreasonable for services actually performed or expenses actually incurred. Compensation must not include charges prohibited in 13 CFR 103 or SOP 50-30, Appendix 1. If the compensation exceeds $500 for a disaster home loan or $2,500 for a disaster business loan, Borrower must fill out the Compensation Agreement Form 159D which will be provided for Borrower upon request or can be found on the SBA website.

 

 

Page 5 of 7

 

	
SBA Form 1391 (5-00)
	
Ref 50 30

 

Exhibit 10.2

 

	
SBA Loan #7852037408
	
Application #3600041404

 

	
 
	
•
	
Borrower certifies, to the best of its, his or her knowledge and belief, that the certifications and representations in the attached Certification Regarding Lobbying are true, correct and complete and are offered to induce SBA to make this Loan.

 

CIVIL AND CRIMINAL PENALTIES

 

	
 
	
•
	
Whoever wrongfully misapplies the proceeds of an SBA disaster loan shall be civilly liable to the Administrator in an amount equal to one-and-one halftimes the original principal amount of the loan under 15 U.S.C. 636(b). In addition, any false statement or misrepresentation to SBA may result in criminal, civil or administrative sanctions including, but not limited to: 1) fines, imprisonment or both, under 15 U.S.C. 645, 18 U.S.C. 1001, 18 U.S.C. 1014, 18 U.S.C. 1040, 18 U.S.C. 3571, and any other applicable laws; 2) treble damages and civil penalties under the False Claims Act , 31 U.S.C. 3729; 3) double damages and civil penalties under the Program Fraud Civil Remedies Act , 31 U.S.C. 3802; and 4) suspension and/or debarment from all Federal procurement and non-procurement transactions. Statutory fines may increase if amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.
	
 

 

RESULT OF VIOLATION OF THIS LOAN AUTHORIZATION AND AGREEMENT

 

	
 
	
•
	
If Borrower violates any of the terms or conditions of this Loan Authorization and Agreement, the Loan will be in default and SBA may declare all or any part of the indebtedness immediately due and payable. SBA's failure to exercise its rights under this paragraph will not constitute a waiver.

 

	
 
	
•
	
A default (or any violation of any of the terms and conditions) of any SBA Loan(s) to Borrower and/or its affiliates will be considered a default of all such Loan(s).

 

DISBURSEMENT OF THE LOAN

 

	
 
	
•
	
Disbursements will be made by and at the discretion of SBA Counsel, in accordance with this Loan Authorization and Agreement and the general requirements of SBA.

 

	
 
	
•
	
Disbursements may be made in increments as needed.

 

	
 
	
•
	
Other conditions may be imposed by SBA pursuant to general requirements of SBA.

 

	
 
	
•
	
Disbursement may be withheld if, in SBA's sole discretion, there has been an adverse change in Borrower's financial condition or in any other material fact represented in the Loan application, or if Borrower fails to meet any of the terms or conditions of this Loan Authorization and Agreement.

 

	
 
	
•
	
NO DISBURSEMENT WILL BE MADE LATER THAN 6 MONTHS FROM THE DATE OF THIS LOAN AUTHORIZATION AND AGREEMENT UNLESS SBA, IN ITS SOLE DISCRETION, EXTENDS THIS DISBURSEMENT PERIOD.

 

 

Page 6 of 7

 

	
SBA Form 1391 (5-00)
	
Ref 50 30

 

 

		
	
DocuSign Envelope ID: FBD63BF7-2454-47EF-A01E-6A620ABF842D
	
Doc # L-01-0345415-01

	
 
	
 

	
SBA Loan #7852037408
	
Application

 

 

PARTIES AFFECTED

 

	
 
	
•
	
This Loan Authorization and Agreement will be binding upon Borrower and Borrower's successors and assigns and will inure to the benefit of SBA and its successors and assigns.

 

RESOLUTION OF BOARD OF DIRECTORS

 

	
 
	
•
	
Borrower shall, within 180 days of receiving any disbursement of this Loan, submit the appropriate SBA Certificate and/or Resolution to the U.S. Small Business Administration, Office of Disaster Assistance, 14925 Kingsport Rd, Fort Worth, TX. 76155.

 

ENFORCEABILITY

 

	
 
	
•
	
This Loan Authorization and Agreement is legally binding, enforceable and approved upon Borrower's signature, the SBA' s approval and the Loan Proceeds being issued to Borrower by a government issued check or by electronic debit of the Loan Proceeds to Borrower' banking account provided by Borrower in application for this Loan.

 

	
 
	
 
	

	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
James E. Rivera 

Associate Administrator
	
 
	
 
	
	
 
	
U.S. Small Business Administration
	
 
	
 
	

 

 

The undersigned agree(s) to be bound by the terms and conditions herein during the term of this Loan, and further agree(s) that no provision stated herein will be waived without prior written consent of SBA. Under penalty of perjury of the United States of America, I hereby certify that I am authorized to apply for and obtain a disaster loan on behalf of Borrower, in connection with the effects of the COVID-19 emergency.

 

	
 
	
ADOMANI, Inc.
	
 
	
 
	
 

	
 
	

	
 
	
 
	
 

	
 
	
 
	
 
	
Date:
	
     05.17.2020

	
 
	
 
	
 
	
 
	
 

	
 
	
James Reynolds, Owner/Officer
	
 
	
 
	
 

 

 

Note: Corporate Borrowers must execute Loan Authorization and Agreement in corporate name, by a duly authorized officer. Partnership Borrowers must execute in firm name, together with signature of a general partner. Limited Liability entities must execute in the entity name by the signature of the authorized managing person.

 

Page 7 of 7

 

	
SBA FORM 722 (10-02) REF: SOP 9030          PREVIOUS EDITIONS ARE OBSOLETE
	
U.S. GOVERNMENT PRINTING OFFICE: 1994 0- 153-346

	
This form was electronically produced by Elite Federal Inc.

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