Form 8-K
8-K — Polar Power, Inc.
Accession: 0001493152-26-023191
Filed: 2026-05-14
Period: 2026-05-13
CIK: 0001622345
SIC: 3690 (MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES)
Item: Entry into a Material Definitive Agreement
Item: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
Item: Financial Statements and Exhibits
Documents
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): May 13, 2026
POLAR
POWER, INC.
(Exact
Name of Registrant as Specified in Charter)
Delaware
001-37960
33-0479020
(State
or Other Jurisdiction
of
Incorporation)
(Commission
File
Number)
(IRS
Employer
Identification
No.)
249
E. Gardena Boulevard, Gardena, California 90248
(Address
of Principal Executive Offices) (Zip Code)
(310)
830-9153
(Registrant’s
telephone number, including area code)
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
☐
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title of
each class
Trading Symbol(s)
Name of each
exchange on which registered
Common Stock, par value
$0.0001 per share
POLA
The NASDAQ Stock Market,
LLC
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into of a Material Definitive Agreement.
On
May 13, 2026, Polar Power, Inc. (the “Company”) entered into a Revolving Loan Agreement (the “Loan Agreement”)
with Stone Brothers Capital (the “Lender”). The Loan Agreement provides for a revolving credit facility under which the Lender
may, in its sole discretion upon the request of the Company, make loans (the “Loans”) to the Company, in an aggregate principal
amount at any one time outstanding not to exceed $2,500,000. Each Loan shall bear interest accruing at an annual rate of 12%. Pursuant
to the Loan Agreement, the Company shall use the proceeds from the Loans for general corporate purposes, including but not limited to
(for the avoidance of doubt) to finance the expense of a Qualified Public Equity Offering, which is a Public Equity Offering, as defined
by the Loan Agreement, for proceeds up to $6,000,000.
As
part of the closing conditions, two directors of the Company shall resign from the Company’s board of directors (the “Board”)
prior to the closing, and three individuals designed by the Lender should be appointed as the directors of the Company. The maturity
date of the loan is the first anniversary of the closing date of the Loan Agreement.
The
Loan Agreement also contains other customary terms and conditions.
This
description of the Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the Loan Agreement,
which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On
May 13, 2026, the Company entered into the Loan Agreement with the Lender, as described in Item 1.01 above and incorporated herein by
reference.
Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
On
May 14, 2026, Keith Albrecht and Katherine Koster, two of the Company’s independent directors, resigned as members of the Board
of the Company, effective May 19, 2026.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
Exhibit
No.
Description
10.1
Revolving Loan Agreement dated May 13, 2026 by and between Polar Power, Inc. and Stone Brothers Capital
104
Cover Page Interactive Data File (embedded within the
Inline XBRL document)
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date:
May 14, 2026
POLAR POWER, INC.
By:
/s/ Arthur D. Sams
Arthur D. Sams President, Chief Executive Officer and
Secretary
EX-10.1
EX-10.1
Filename: ex10-1.htm · Sequence: 2
Exhibit
10.1
REVOLVING
LOAN AGREEMENT
This
Revolving Loan Agreement (this “Agreement”) is dated as of May 13, 2026, between Polar Power, Inc., a Delaware corporation
(the “Borrower”), and the purchaser identified on the signature page hereto (including its successors and assigns,
the “Lender”).
WHEREAS,
Borrower wishes to obtain Loans from time to time from Lender in an aggregate principal amount at any one time outstanding not to exceed
the Maximum Outstanding Amount, and Lender wishes to provide such Loans, all on the terms and subject to the conditions hereinafter set
forth;
NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, Borrower and Lender agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.01. Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings set forth
in this Agreement.
“$”
means United States Dollars.
“Action”
shall have the meaning ascribed to such term in Section 3.01(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bankruptcy
Event” means any of the following events: (a) the Borrower or any Significant Subsidiary (as such term is defined in Rule 1-02(w)
of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Borrower or any Significant
Subsidiary thereof, (b) there is commenced against the Borrower or any Significant Subsidiary thereof any such case or proceeding that
is not dismissed within 90 days after commencement, (c) the Borrower or any Significant Subsidiary thereof is adjudicated insolvent or
bankrupt or any final, non-appealable order of relief or other order approving any such case or proceeding is entered, (d) the Borrower
or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property
that is not discharged or stayed within 90 calendar days after such appointment, (e) the Borrower or any Significant Subsidiary thereof
makes a general assignment for the benefit of creditors, (f) the Borrower or any Significant Subsidiary thereof calls a meeting of its
creditors with a view to arranging a composition, adjustment or restructuring of its debts, (g) the Borrower or any Significant Subsidiary
thereof admits in writing that it is generally unable to pay its debts as they become due, (h) the Borrower or any Significant Subsidiary
thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes
any corporate or other action for the purpose of effecting any of the foregoing.
“Board
of Directors” means the board of directors of the Borrower.
“Business
Day” means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which
banking institutions in the State of New York are authorized or required by law or other governmental action to close; provided, however,
for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”,
“shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any
physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including
for wire transfers) of commercial banks in The City of New York are generally open for use by customers on such day. 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.
“Change
of Control Transaction” means the occurrence after the date hereof of any of: (a) an acquisition after the date hereof by an
individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective
control (whether through legal or beneficial ownership of capital stock of the Borrower, by contract or otherwise) of in excess of 50%
of the voting securities of the Borrower, (b) the Borrower merges into or consolidates with any other Person, or any Person merges into
or consolidates with the Borrower and, after giving effect to such transaction, the stockholders of the Borrower immediately prior to
such transaction own less than 50% of the aggregate voting power of the Borrower or the successor entity of such transaction, (c) the
Borrower sells or transfers all or substantially all of its assets to another Person and the stockholders of the Borrower immediately
prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction,
(d) a replacement at one time or within a one year period of more than one-half of the members of the Board of Directors which is not
approved by a majority of those individuals who are members of the Board of Directors on the Closing Date (or by those individuals who
are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of
the members of the Board of Directors who are members on the date hereof), except the replacement pursuant to Section 5.05 of this Agreement,
or (e) the execution by the Borrower of an agreement to which the Borrower is a party or by which it is bound, providing for any of the
events set forth in clauses (a) through (d) above; provided, that any Qualified Public Equity Offering shall not be construed as a Change
of Control Transaction under any clause in this definition.
“Closing”
means the satisfaction of the conditions set forth in Section 2.04.
“Closing
Date” means the date on which the conditions set forth in Section 2.04 shall have been satisfied.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Borrower, par value $0.0001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalent” means any convertible security or warrant, option or other right to subscribe for or purchase any additional
shares of Common Stock or any other Common Stock Equivalent.
“Current
Report” means a current report on Form 8-K filed with the Commission pursuant to the Exchange Act.
“Default
Amount” means, at any time, the sum of: (A) the product of (i) the sum of: (1) the outstanding principal balance
of all outstanding Loans at such time, plus (2) all accrued and unpaid interest hereunder at such time and (ii) 105%, plus (2)
all other amounts, costs, expenses and/or liquidated damages due under or in respect of the Loan Documents.
“Departing
Directors” shall mean the two (2) incumbent members of the Board of Directors designated by the Borrower (in consultation with
the Lender) to resign from the Board of Directors in connection with the appointment of the Lender Board Nominees pursuant to Section
5.05.
“Event
of Default” shall have the meaning ascribed to such term in Section 4.02.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Final
Loan Date” shall have the meaning ascribed to such term in Section 2.07.
“FINRA”
means the Financial Industry Regulatory Authority.
“Flow
of Funds” means a funds flow request memorandum substantially in the form set forth as Appendix B hereto.
“Fundamental
Transaction” shall mean and include any of the following: (i) the merger or consolidation of the Borrower with or into another
Person; (ii) any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of the Borrower’s
assets in one or a series of related transactions(including any asset or group of assets, regardless whether then so classified by the
Borrower, which would constitute a Significant Subsidiary, as such term is defined in Rule 1-02(w) of Regulation S-X), (iii) any, direct
or indirect, purchase offer, tender offer or exchange offer (whether by the Borrower 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 Borrower, 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 Borrower, 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); provided, that any Qualified Public Equity Offering shall
not be construed as a Fundamental Transaction under any clause in this definition.
“Indebtedness”
means any liabilities (excluding trade debt and accounts payables) of the Borrower or any of its Subsidiaries for borrowed money or amounts
owed and all guaranties made by the Borrower or any of its Subsidiaries of borrowed money or amounts owed by other Persons.
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.01(o).
“Lender
Board Nominees” shall mean the three (3) individuals designated by the Lender to serve on the Board of Directors pursuant to
Section 5.05, or any of their respective replacements or successors as may be designated by the Lender. Lender nominees shall be David
Piedra, Steven Brown, Angel Liriano.
“Liens”
shall mean a lien, charge, security interest, encumbrance or other similar restriction on title.
“Loans”
shall have the meaning ascribed to such term in Section 2.01.
“Loan
Date” shall have the meaning ascribed to such term in Section 2.02.
“Loan
Documents” means this Agreement, the Note, each Loan Request, and all appendices, exhibits and schedules hereto and thereto
and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Loan
Request” shall have the meaning ascribed to such term in Section 2.02.
“Material
Adverse Effect” shall have the meaning ascribed to such term in Section 3.01(b).
“Maturity
Date” shall mean the first anniversary of the Closing Date.
“Maximum
Outstanding Amount” means $2,500,000.
“Note”
means the promissory note issued by the Borrower to the Lender hereunder, in the form of Appendix A attached hereto.
“Payment
Amount” means, at any time, the sum of: (1) the outstanding principal balance of all outstanding Loans at such time,
plus (2) all accrued and unpaid interest hereunder at such time, plus (3) all other amounts, costs, expenses and/or liquidated
damages due under or in respect of the Loan Documents.
“Person”
means an individual or corporation, partnership, trust, incorporated or un-incorporated association, joint-venture, limited liability
company, joint-stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Pinnacle
Bank Loan” means that certain Loan and Security Agreement, dated as of August 31, 2020, by and between Pinnacle Bank, a California
corporation, and the Borrower, as amended from time to time through the date hereof.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Public
Equity Offering” means an underwritten or “best efforts” public offering by the Borrower of Common Stock and/or
Common Stock Equivalents registered under the Securities Act.
“Qualified
Public Equity Offering” means a Public Equity Offering for proceeds up to $6,000,000.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.01(e).
“SEC
Reports” has the meaning ascribed to such term in Section 3.01(g).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary”
means any subsidiary of the Borrower and shall, where applicable, include any direct or indirect subsidiary of the Borrower formed or
acquired after the date hereof.
ARTICLE
II
REVOLVING
LOANS
Section
2.01 Loans. Subject to the terms and conditions contained in this Agreement, Lender shall, from time to time prior to the Maturity
Date, at Borrower’s request, make Loans to Borrower (“Loans”); provided that, after giving effect to
each such Loan, the outstanding balance of all Loans will not exceed the Maximum Outstanding Amount. All Loans shall be made in and repayable
in U.S. Dollars.
Section
2.02 Notice of Borrowing; Manner. Borrower shall request each Loan by submitting such request via email to Lender (each, a “Loan
Request”). Subject to the terms and conditions of this Agreement, including Section 2.04, Lender shall deliver the amount of
the Loan requested in the Loan Request for credit to the account of Borrower at a bank in the United States of America as Borrower may
from time to time specify by wire transfer of immediately available funds: (i) on the immediately following Business Day if the Notice
of Borrowing is received by Lender on or before 12:00 noon, Pacific Time on a Business Day, or (ii) on the second succeeding Business
Day if the Notice of Borrowing is received by Lender after 12:00 noon, Pacific Time, on a Business Day, or is received by Lender on any
day that is not a Business Day. Lender shall charge Borrower Lender’s costs related for the wire transfer of each Loan. The date
on which any such Loan is actually funded by Lender is referred to herein as the “Loan Date” of such Loan.
Section
2.03 Lender Discretion Notwithstanding any other provision of this Agreement, any request by the Borrower to draw down, utilize,
or otherwise access any portion of the Loan Facility shall be subject to the Lender’s sole and absolute discretion. The Lender
shall be under no obligation to approve or permit any drawdown, whether in whole or in part, and may withhold its consent for any reason
or for no reason, without incurring any liability to the Borrower. Any approval granted by the Lender in respect of a particular drawdown
request shall not be deemed to create any obligation on the part of the Lender to approve any subsequent request or to constitute a waiver
of the Lender’s rights under this Agreement.
Section
2.04 Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with
the execution and delivery of this Agreement by the parties hereto, the Borrower shall deliver the items set forth in Section 2.05(a)
and (c) deliverable at the Closing.
Section
2.05 Conditions. Lender’s obligation to make any Loan is subject to the following conditions precedent, all of which must
be satisfied in a manner acceptable to Lender (and as applicable, pursuant to documentation which in each case is in form and substance
acceptable to Lender) as of each day that such Loan is issued:
(a)
Lender Conditions. On or prior to the Closing Date, Borrower shall deliver or cause to be delivered to Lender:
(i)
this Agreement,
duly executed by Borrower;
(ii)
a Note in the form of Appendix
A hereto, duly executed by an authorized officer on behalf of the Borrower;
(iii)
a completed Flow of Funds
in the form of Appendix B hereto, duly executed by an authorized officer on behalf of the Borrower;
(iv)
a Loan Request for the
initial Loan, duly executed by an authorized officer on behalf of the Borrower;
(v)
an officer’s
certificate of the Borrower certifying the Borrower’s: (A) certified charter (or similar formation document); (C) good standing
certificate in its state of incorporation; (D) bylaws (or similar governing document); and (D) resolutions of its Board of Directors
(or similar governing body) approving and authorizing the execution, delivery and performance of the Loan Documents and the transactions
contemplated thereby, including the matters set forth in the following clause (vi); and
(vi)
the Lender Board Nominees
shall have been elected or appointed by the remaining members of the Board of Directors (the “Remaining Directors”)
to the Board of Directors, and the Departing Directors shall have tendered their resignations from the Board of Directors, in each
case effective no later than the Closing Date.
(b)
Borrower Closing Date Conditions. On or prior to the Closing Date, Borrower shall have received:
(i)
this Agreement, duly executed by
Lender;
(ii)
the D&O questionnaires
executed by three Lender Board Nominees, each of whom shall not be subject to any order, decree or injunction of any court or governmental
body that would prevent such person from serving as a director of a public company, and shall meet the relevant Nasdaq eligibility
requirements; and
(iii)
a completed Flow of Funds, duly executed by Lender.
(c)
All Loans (including Closing Date): The obligation of Lender to make any Loans hereunder on any date, whether on or after the
Closing Date, shall be subject to the following conditions:
(i)
the delivery
by the Borrower of the items set forth in Section 2.05(a) on or before the Closing Date;
(ii)
the accuracy in all material
respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects)
when made and on the Loan Date of the representations and warranties of Borrower contained herein (unless as of a specific date therein
in which case they shall be accurate as of such date);
(iii)
all obligations, covenants
and agreements of Borrower under the Loan Documents required to be performed by Borrower at or prior to such date shall have been
performed;
(iv)
there shall have been no
Material Adverse Effect or Event of Default (including, without limitation, under Section 4.02(b) since the date of this Agreement;
(v)
on or prior to the proposed
Loan Date of such Loan, Borrower shall deliver or cause to be delivered to Lender a Loan Request requesting such Loan with a Loan
Date on or prior to the Final Loan Date in an aggregate amount which, when added to the aggregate amount of all other Loans at such
date, does not exceed the Maximum Outstanding Amount; and
(vi)
the Company shall have
filed with the Securities and Exchange Commission a Current Report on Form 8-K disclosing that it has entered into this Agreement,
providing its material terms, and attaching this Agreement as an exhibit thereto.
Each
Loan Request delivered to Lender under this Agreement shall constitute Borrower’s representation, warranty and certification to
Lender that the conditions set forth in this Section 2.05 with respect to such Loan and Loan Date have been fully satisfied (except to
the extent otherwise specifically set forth therein.
Section
2.06 Interest. Each Loan shall bear interest accruing at an annual rate of twelve percent (12%), calculated on the basis of a
360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Loan Date until paid in full.
Section
2.07 Maturity Date; Revolving Loans; Final Loan Date. On the Maturity Date, the entire Payment Amount (or, if an Event of Default
shall have previously occurred, the Default Amount) shall become due and payable. All outstanding Loans: (i) shall be payable in full
on the Maturity Date or may be paid or pre-paid, in whole or in any part, to the Lender prior to the Maturity Date, and (ii) may thereafter
be borrowed or reborrowed (subject to Section 2.05). All payments of principal of any Loan or Loans hereunder shall be accompanied by
the payment in full of all accrued and unpaid interest thereon. Notwithstanding anything to the contrary set forth in this Agreement,
no Loans may be requested or made hereunder on any date that is after the tenth (10th) Business Day preceding the Maturity
Date (the “Final Loan Date”).
Section
2.08 Voluntary Termination. The Borrower may, upon at least five (5) Business Days’ prior written notice to the Lender, terminate
this Agreement; provided that (a) no such termination shall be effective until all outstanding Loans, together with all accrued and unpaid
interest thereon and all other amounts owing hereunder, have been paid in full, and (b) upon such termination, the Borrower’s right
to request any further Loans hereunder shall immediately and permanently cease. Any such termination shall not affect the rights or obligations
of the parties with respect to any Loans made prior to such termination or any provisions of this Agreement that by their terms survive
termination.
Section
2.09 Maximum Outstanding Amount. If at any time for any reason whatsoever the sum of the principal balance of all outstanding
Loans exceeds the Maximum Outstanding Amount, then in each case, Borrower will immediately pay to Lender such amounts as shall be necessary
to eliminate such excess.
Section
2.10 Payments. The payment and performance of all Loans and other obligations of Borrower under the Loan Documents shall constitute
the absolute and unconditional obligations of Borrower and shall be independent of any defense or rights of set-off, recoupment or counterclaim
which Borrower or any other Person might otherwise have against Lender or any other Person. All Loans and payments required by the Loan
Documents shall be made in United States Dollars and paid free of any deductions or withholdings for any taxes or other amounts and without
abatement, diminution or set-off. If Borrower is required by applicable law to make such a deduction or withholding from a payment under
this Agreement or under any other Loan Document, Borrower shall pay to Lender such additional amount as is necessary to ensure that,
after the making of such deduction or withholding, Lender receives (free from any liability in respect of any such deduction or withholding)
a net sum equal to the sum which it would have received and so retained had no such deduction or withholding been made or required to
be made. Borrower shall (i) pay the full amount of any deduction or withholding, which it is required to make by law, to the relevant
authority within the payment period set by applicable law, and (ii) promptly after any such payment, deliver to Lender an original (or
certified copy) official receipt issued by the relevant authority in respect of the amount withheld or deducted or, if the relevant authority
does not issue such official receipts, such other evidence of payment of the amount withheld or deducted as is reasonably acceptable
to Lender.
Section
2.11 Accounting. Lender shall maintain a loan account for Borrower reflecting all outstanding Loans, along with interest accrued
thereon and such other items reflected therein (the “Loan Account”) and shall provide Borrower upon request with a
monthly accounting reflecting the activity in the Loan Account. Each such accounting shall be deemed correct, accurate and binding on
Borrower (excepting manifest errors), unless Borrower notifies Lender in writing to the contrary within five (5) days after such account
is rendered, describing the nature of any alleged error(s). However, Lender’s failure to maintain such accounting or to provide
any such accounting shall not affect the legality or binding nature of any of the obligations of Borrower hereunder. Interest and other
monetary obligations due and owing under this Agreement may, in Lender’s discretion, be charged to Borrower hereunder, and will
thereafter be deemed to be Loans and will bear interest at the same rate as other Loans.
Section
2.12 Further Obligations; Maximum Lawful Rate. With respect to all monetary obligations for which the interest rate is not otherwise
specified herein (whether such obligations arise hereunder or under any other Loan Document, or otherwise), such obligations shall bear
interest at the rate(s) in effect from time to time with respect to the applicable Loan and shall be payable upon demand by Lender. In
no event shall the interest charged with respect to any Loan or any other obligation exceed the maximum amount permitted under applicable
law. Notwithstanding anything to the contrary herein or elsewhere, if at any time the rate of interest payable or other amounts hereunder
or under any other Loan Document (the “Stated Rate”) would exceed the highest rate of interest or other amount permitted
under any applicable law to be charged (the “Maximum Lawful Rate”), then for so long as the Maximum Lawful Rate would
be so exceeded, the rate of interest and other amounts payable hereunder shall be equal to the Maximum Lawful Rate; provided that
if at any time thereafter the Stated Rate is less than the Maximum Lawful Rate, Borrower shall, to the extent permitted by applicable
law, continue to pay interest and such other amounts at the Maximum Lawful Rate until such time as the total interest and other such
amounts received is equal to the total interest and other such amounts which would have been received had the Stated Rate been (but for
the operation of this provision) the interest rate payable or such other amounts payable. Thereafter, the interest rate and such other
amounts payable shall be the Stated Rate unless and until the Stated Rate again would exceed the Maximum Lawful Rate, in which event
this provision shall again apply. In no event shall the total interest or other such amounts received by Lender exceed the amount which
it could lawfully have received had the interest and other such amounts been calculated for the full term hereof at the Maximum Lawful
Rate. If, notwithstanding the prior sentence, Lender has received interest or other such amounts hereunder in excess of the Maximum Lawful
Rate, such excess amount shall be applied to the reduction of the principal balance of the Loans or to other obligations (other than
interest) payable hereunder, and if no such principal or other obligations are then outstanding, such excess or part thereof remaining
shall be paid to Borrower. In computing interest payable with reference to the Maximum Lawful Rate applicable to any Lender, such interest
shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by the number of days in the year in which such calculation
is made.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
Section
3.01 Representations and Warranties of the Borrower. The Borrower hereby represents and warrants to Lender that, except as set
forth in extant SEC Reports, the following representations are true and complete as of the date of this Agreement and each Loan Date
that:
(a)
Subsidiaries. The Borrower does not have any Subsidiaries not disclosed in the SEC Reports.
(b)
Organization and Qualification. The Borrower is an entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the State of Delaware, with the requisite power and authority to own and use its properties and assets and
to carry on its business as currently conducted. The Borrower is not in violation or default of any of the provisions of its certificate
of incorporation or bylaws, each, as amended and in effect. A complete and correct copy of the Borrower’s certificate of incorporation
and bylaws, each as amended and in effect on the date of this Agreement and as they will be in effect on the Closing Date, is attached
to the officer’s certificate referenced in Section 2.02(a)(v). There are no other organizational or charter documents of the Borrower.
The Borrower is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction
in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to
be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse
effect on the legality, validity or enforceability of any Loan Document; (ii) a material adverse effect on the results of operations,
assets, business, prospects or condition (financial or otherwise) of the Borrower or any of its material assets or lines of business,
individually; or (iii) a material adverse effect on the Borrower’s ability to perform in any material respect on a timely basis
its obligations under any Loan Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding
has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority
or qualification; provided, however, that “Material Adverse Effect” shall not include any event, occurrence, fact,
condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions, (ii) conditions
generally affecting the industry in which the Borrower or any Subsidiary operates, (iii) any changes in financial or securities markets
in general, (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof, (v) any
pandemic, epidemics or human health crises (including COVID-19), (vi) any changes in applicable laws or accounting rules, (vii) the announcement,
pendency or completion of the transactions contemplated by the Loan Documents, or (viii) any action required or permitted by the Loan
Documents or any action taken (or omitted to be taken) with the written consent of or at the written request of the Lender.
(c)
Authorization; Enforcement. The Borrower has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Loan Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery
of each of the Loan Documents by the Borrower and the consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of the Borrower and no further action is required by the Borrower, the Board of Directors
or the Borrower’s stockholders in connection therewith other than in connection with the Required Approvals. Each Loan Document
to which it is a party has been (or upon delivery will have been) duly executed by the Borrower and, when delivered in accordance with
the terms hereof and thereof, will constitute the valid and binding obligation of the Borrower enforceable against the Borrower in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally; (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.
(d)
No Conflicts. The execution, delivery and performance by the Borrower of the Loan Documents to which it is a party and the consummation
by the Borrower of the other transactions contemplated hereby does not and will not: (i) conflict with or violate any provision of the
Borrower’s certificate of incorporation, bylaws or other organizational or charter documents; (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon
any of the properties or assets of the Borrower, or give to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Borrower debt
or otherwise) or other understanding to which the Borrower is a party or by which any property or asset of the Borrower is bound or affected;
or (iii) to the Borrower’s knowledge, subject to the Required Approvals, conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Borrower is
subject (including federal and State Securities Laws and regulations), or by which any property or asset of the Borrower is bound or
affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material
Adverse Effect.
(e)
Filings, Consents and Approvals. The Borrower is not required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Borrower of the Loan Documents, other than: (i) such consents,
waivers, or authorizations as have been obtained before the Closing; and (ii) the filing of a Current Report with the Commission, as
applicable, and such filings as may be required to be made under applicable State Securities Laws (collectively, the “Required
Approvals”).
(f)
Capitalization. The capitalization of the Borrower is as set forth in the SEC Reports. Except in instances where valid waivers
have been obtained, no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate
in the transactions contemplated by the Loan Documents. Except as set forth in the SEC Reports, there are no Common Stock Equivalents
of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or
giving any Person any right to subscribe for or acquire, any Common Stock or the capital stock of any Subsidiary, or contracts, commitments,
understandings or arrangements by which the Borrower or any Subsidiary is or may become bound to issue additional Common Stock or Common
Stock Equivalents or capital stock of any Subsidiary. The Loans will not obligate the Borrower or any Subsidiary to issue Common Stock
or other securities to any Person and will not result in a right of any holder of Borrower securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Borrower are duly authorized,
validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of
such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Except
for the Required Approvals and waivers that have heretofore been obtained, no further approval or authorization of any stockholder, the
Board of Directors or others is required for the Loans. There are no stockholder agreements, voting agreements or other similar agreements
with respect to the Borrower’s capital stock to which the Borrower is a party or, to the knowledge of the Borrower, between or
among any of the Borrower’s stockholders.
(g)
SEC Reports; Financial Statements. The Borrower has filed all reports, schedules, forms, statements and other documents required
to be filed by the Borrower under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for
the two years preceding the date hereof (or such shorter period as the Borrower was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred
to herein as the “SEC Reports”). As of their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Borrower included
in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with
respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain
all footnotes required by GAAP, and fairly present in all material respects the financial position of the Borrower and its consolidated
Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal year-end audit adjustments.
(h)
Undisclosed Liabilities. Except as disclosed in the SEC Reports, the Borrower has no liability, indebtedness, obligation, expense,
claim, deficiency or guaranty of any type, whether accrued, absolute, contingent, matured, unmatured or otherwise, required to be reflected
in financial statements in accordance with GAAP, which individually or in the aggregate: (A) has not been reflected in the latest balance
sheet included in the financial statements referenced hereinabove; or (B) has not arisen: (i) in the ordinary course of business, consistent
with past practices, since the date of the latest balance sheet included in such financial statements in an amount that does not exceed
$100,000 in any one case or $200,000 in the aggregate, (ii) pursuant to or in connection with this Agreement or other Loan Document,
or (c) are executory performance obligations to be performed after the date hereof in the ordinary course of business pursuant to agreement(s)
entered into in the ordinary course of business, consistent with past practices. Except as disclosed in the SEC Reports and Schedule
3.01(h), the Borrower is not in default with respect to any Indebtedness.
(i)
Material Changes. Except as disclosed in the SEC Reports, since the date of the latest financial statements included in the SEC
Reports: (A) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material
Adverse Effect; (B) the Borrower has not incurred any liabilities (contingent or otherwise) other than (i) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past practice, and (ii) liabilities not required to be reflected
in the Borrower’s financial statements pursuant to GAAP; (C) the Borrower has not altered their method of accounting; (D) the Borrower
has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock; and (E) the Borrower has not issued any equity securities except in
favor of officers, directors, employees (existing and new) or consultants pursuant to an existing Borrower equity incentive plans.
(j)
Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of
the Borrower, threatened against or affecting the Borrower, or any of its properties, before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which: (A) adversely affects or challenges the legality, validity or enforceability of any of the Loan Documents; or (ii) could, if there
were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. None of the Borrower or, to the
knowledge of Borrower, any director or officer thereof, is or has been the subject of any Action involving: (x) a claim of violation
of or liability under the Securities Act, the Exchange Act, FINRA rules or any State Securities Laws; (y) breach of fiduciary duty; or
(z) fraud (statutory or common law), embezzlement, misappropriation or conversion of property or rights, or any other crime involving
deceit.
(k)
Labor Relations. No labor dispute exists or, to the knowledge of the Borrower, is imminent with respect to any of the employees
of the Borrower which could reasonably be expected to result in a Material Adverse Effect. None of the Borrower’s employees is
a member of a union that relates to such employee’s relationship with the Borrower, and the Borrower is not a party to any collective
bargaining agreement. The Borrower believes that its relationships with its employees are good. No executive officer, to the knowledge
of the Borrower, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in
favor of any third party, and the continued employment of each such executive officer does not subject the Borrower to any liability
with respect to any of the foregoing matters. To the best of the Borrower’s knowledge, it is in compliance with all U.S. federal,
state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(l)
Compliance. Except as disclosed in the SEC Reports or as otherwise disclosed to the Lender, the Borrower: (i) is neither in default
under nor in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result
in a default by the Borrower under), nor has the Borrower received notice of a claim that it is in default under or that it is in violation
of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived); (ii) is not in violation of any order of any court, arbitrator
or governmental body; and (iii) is not and has not been in material violation of any statute, law, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws applicable to its business and all such laws that
affect the environment.
(m)
Regulatory Permits. The Borrower possesses all certificates, authorizations and permits issued by the appropriate federal, state,
local or foreign regulatory authorities necessary to conduct its business, except where the failure to possess such permits could not
reasonably be expected to result in a Material Adverse Effect, and the Borrower has not received any notice of proceedings relating to
the revocation or modification of any of the foregoing.
(n)
Title to Assets. Except as disclosed in the SEC Reports, the Borrower and its Subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title in all personal property owned by it that, in each case, is material to the
business of the Borrower and its Subsidiaries, in each case free and clear of all Liens, except for Liens that do not materially and
adversely (x) affect the value of such property or (y) interfere with the use made and proposed to be made of such property by the Borrower
and its Subsidiaries. Any real property and facilities held under lease by the Borrower or a Subsidiary is held by it under valid, subsisting
and enforceable leases, s with which the Borrower or such Subsidiary (as applicable) are in compliance.
(o)
Patents and Trademarks. (i) The Borrower has, or has rights to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar
rights as necessary or material for use in connection with its business and which the failure to so have could reasonably be expected
to have a Material Adverse Effect (collectively, the “Intellectual Property Rights”); (ii) the Borrower has not received
a notice (written or otherwise) that any of the Intellectual Property Rights violates or infringes upon the intellectual property rights
of any other Person; (iii) all Intellectual Property Rights are enforceable by the Borrower, and there is no existing infringement by
any other Person of any of the Intellectual Property Rights, except where the failure to be so enforceable or for such infringements
as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and (iv) the Borrower has taken
reasonable security measures to protect the secrecy, confidentiality and value of all of its Intellectual Property Rights, except where
failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(p)
Transactions with Officers, Directors and Employees. Except as disclosed in the SEC Reports, none of the officers or directors
of the Borrower and, to the knowledge of the Borrower, none of the employees of the Borrower, is presently a party to any transaction
with the Borrower (other than for services as employees, officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring
payments to or from, any such officer, director or employee or, to the knowledge of the Borrower, any entity in which any such officer,
director or employee has a substantial interest or is an officer, director, trustee, member or partner, in each case other than for:
(x) payment of salary or fees for services rendered; (y) reimbursement for expenses incurred on behalf of the Borrower; and (z) other
employee benefits, including stock option agreements under any stock option plan of the Borrower.
(q)
Investment Company. The Borrower is not, and is not an Affiliate of, and immediately after receipt of any Loan will not be or
be an Affiliate of, an ‘investment company’ within the meaning of the Investment Company Act of 1940, as amended. The Borrower
shall conduct its business in a manner so that it will not be an “investment company” subject to registration under the Investment
Company Act of 1940, as amended.
(r)
Disclosure. Except with respect to: (i) the material terms and conditions of the transactions contemplated by the Loan Documents;
and (ii) information given to the Lender, if any, which the Borrower hereby confirms will not constitute material non-public information,
the Borrower confirms that neither it nor any other Person acting on its behalf has provided any of the Lender or their agents or counsel
with any information that it believes constitutes or might constitute material, nonpublic information. The Borrower understands and confirms
that the Lender will rely on the foregoing representation in effecting transactions in securities of the Borrower. All disclosure furnished
by or on behalf of the Borrower to the Lender regarding the Borrower, its business and the transactions contemplated hereby, is true
and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they were made, not misleading.
(s)
Solvency. Based on the consolidated financial condition of the Borrower as of the Closing Date after giving effect to the receipt
by the Borrower of the proceeds from the sale of the Notes hereunder: (i) the fair saleable value of the Borrower’s assets exceeds
the amount that will be required to be paid on or in respect of the Borrower’s existing debts and other liabilities (including
known contingent liabilities) as they mature; (ii) the Borrower’s assets do not constitute unreasonably small capital to carry
on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Borrower, and projected capital requirements and capital availability thereof; and (iii)
the current cash flow of the Borrower, together with the proceeds the Borrower would receive, were it to liquidate all of its assets,
after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities
when such amounts are required to be paid. The Borrower will not, after the Closing Date, incur debts beyond its ability to pay such
debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). Except as disclosed
in the SEC Reports, the Borrower has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization
or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date.
(t)
Tax Status. Except as described in current SEC Reports and for matters that would not, individually or in the aggregate, have
or reasonably be expected to result in a Material Adverse Effect, the Borrower has filed all federal, state and foreign income and franchise
tax returns and have paid or accrued all taxes shown as due thereon, and the Borrower has no knowledge of a tax deficiency which has
been asserted or threatened against the Borrower.
(u)
Insurance. The Borrower is insured by insurers of recognized financial responsibility against such losses and risks and in such
amounts as management of the Borrower reasonably believes to be prudent and customary in the businesses in which the Borrower is engaged.
The Borrower has never been refused any insurance coverage sought or applied for, and the Borrower has no reason to believe that it will
not be able to renew all existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers.
(v)
Acknowledgment Regarding Lender. The Borrower acknowledges and agrees that the Lender is not acting as a financial advisor or
fiduciary of the Borrower (or in any similar capacity) with respect to the Loan Documents and the transactions contemplated thereby and
any advice given by Lender or any of their respective representatives or agents in connection with the Loan Documents and the transactions
contemplated thereby is merely incidental to the Lender making the Loans. The Borrower further represents to the Lender that the Borrower’s
decision to enter into this Agreement and the other Loan Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Borrower and its representatives.
(w)
Foreign Corrupt Practices. Neither the Borrower nor, to the knowledge of the Borrower, no agent or other person acting on behalf
of the Borrower, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses
related to foreign or domestic political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees
or to any foreign or domestic political parties or campaigns from corporate funds; (iii) failed to disclose fully any contribution made
by the Borrower (or made by any person acting on its behalf of which the Borrower is aware) which is in violation of law; or (iv) violated
in any material respect any provision of the Foreign Corrupt Practices Act.
(x)
Office of Foreign Assets Control. Neither the Borrower nor, to the Borrower’s knowledge, any director, officer, agent, employee
or Affiliate of the Borrower, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”); and Borrower will not directly or indirectly use any proceeds of the Loans, or lend, contribute
or otherwise make available such proceeds to, its subsidiaries or to any affiliated entity, joint venture partner or other person or
entity, to finance any investments in, or make any payments to, any country or person currently subject to any of the sanctions of the
United States administered by OFAC.
(y)
U.S. Real Property Holding Corporation. The Borrower is not and has never been a U.S. real property holding corporation within
the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Borrower shall so certify upon Lender’s request.
(z)
Bank Holding Company Act. Neither the Borrower nor any of its Affiliates is subject to the Bank Holding Company Act of 1956, as
amended (“BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (“Federal Reserve”).
Neither the Borrower nor any of its Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding
shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject
to the BHCA and to regulation by the Federal Reserve. Neither the Borrower nor any of its Affiliates exercises a controlling influence
over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(aa)
Money Laundering. The operations of the Borrower are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money
laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action
or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Borrower with respect
to the Money Laundering Laws is pending or, to the knowledge of the Borrower, threatened.
(bb)
No Brokers. No brokers, finders or other similar advisory fees or commissions will be payable by the Borrower or any Subsidiary
or by any of their respective agents with respect to the Loans or any of the other transactions contemplated by this Agreement or any
other Loan Documents through any act of omission on the part of the Lender.
(cc)
Representations. The representations and warranties of the Borrower contained in this Agreement, and the certificate(s) furnished
or to be furnished to the Lender at the Closing, when taken as a whole, do not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances
under which they were made. The Borrower acknowledges and agrees that the representations contained in Section 3.02 shall not modify,
amend or affect the Lender’s right to rely on the Borrower’s representations and warranties contained in this Section 3.01
or elsewhere in this Agreement or any representations and warranties contained in any other Loan Document, or any other document or instrument
executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby.
The
Borrower acknowledges and agrees that the representations contained in Section 3.02 shall not modify, amend or affect the Lender’s
right to rely on the Borrower’s representations and warranties contained in Section 3.01 of this Agreement or any representations
and warranties contained in any other Loan Document or any other document or instrument executed and/or delivered in connection with
this Agreement or the consummation of the transaction contemplated hereby.
Section
3.02 Representations and Warranties of the Lender.
The
Lender hereby represents and warrants as of the date hereof and as of the Closing Date to the Borrower as follows (unless as of a specific
date therein, in which case they shall be accurate as of such date):
(a)
Authority; Organization. The Lender has full power and authority to enter into this Agreement and to perform all obligations required
to be performed by it hereunder. If an entity, The Lender is an entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate
the transactions contemplated by the Loan Documents and otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of the Loan Documents and performance by the Lender of the transactions contemplated by the Loan Documents have been duly
authorized by all necessary corporate or similar action on the part of the Lender. Each Loan Document to which it is a party has been
duly executed by the Lender, and when delivered by the Lender in accordance with the terms hereof, will constitute the valid and legally
binding obligation of the Lender, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies, and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(b)
Experience of The Lender. The Lender, either alone or together with its representatives, has such knowledge, sophistication, and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the Loan, and has so evaluated
the merits and risks of making such a Loan. The Lender is able to bear the economic risk of making the Loan and, at the present time,
is able to afford a complete loss of such Loan.
(c)
No Trading Market. The Lender acknowledges that there is currently no trading market for the Loans and that none is expected to
develop for the Loans.
(d)
Confidentiality. Other than to other Persons party to this Agreement and its advisors who have agreed to keep information confidential
or have a fiduciary obligation to keep such information confidential, the Lender has maintained the confidentiality of all disclosures
made to it in connection with the transaction (including the existence and terms of this transaction).
(e)
Foreign Lender. If the Lender is not a United States person, the Lender represents that it has satisfied itself as to the full
observance of the laws of its jurisdiction, including: (i) the legal requirements within its jurisdiction for the making of the Loans,
(ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained,
and (iv) the income tax and other tax consequences, if any, that may be relevant to the making of the Loans. The Lender further represents
that its making of any Loan will not violate any applicable securities or other laws of its jurisdiction.
(f)
Information from Borrower. The Lender and its investment managers, if any, have been afforded the opportunity to obtain any information
necessary to verify the accuracy of any representations or information presented by the Borrower in this Agreement and have had all inquiries
to the Borrower answered, and have been furnished all requested materials, relating to the Borrower and the Loan and anything set forth
in the Loan Documents. Neither the Lender nor the Lender’s investment managers, if any, have been furnished any transaction literature
by the Borrower or any of its Affiliates, associates, or agents other than the Loan Documents, and the agreements referenced therein.
(g)
Money Laundering. The operations of the Lender are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Money Laundering Laws, and no Action or Proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Lender with respect to the Money Laundering Laws is pending or, to the knowledge
of the Lender, threatened.
(h)
Office of Foreign Assets Control. Neither Lender nor, to the Lender’s knowledge, any director, officer, agent, employee,
Affiliate of the Lender, is currently subject to any United States sanctions administered by OFAC; and such Lender has not obtained the
funds to be remitted as Loans, directly or indirectly, from any country or person currently subject to any of the sanctions of the United
States administered by OFAC.
(i)
No Brokers. No brokers, finders or other similar advisory fees or commissions will be payable by the Borrower or any Subsidiary
or by any of their respective agents with respect to the Loans or any of the other transactions contemplated by this Agreement or any
other Loan Documents through any act of omission on the part of the Lender.
The
Lender acknowledges and agrees that the representations contained in Section 3.01 shall not modify, amend or affect the Borrower’s
right to rely on the Lender’s representations and warranties contained in this Section 3.02 or elsewhere in this Agreement or any
representations and warranties contained in any other Loan Document, or any other document or instrument executed and/or delivered in
connection with this Agreement or the consummation of the transactions contemplated hereby.
ARTICLE
IV
NEGATIVE COVENANTS, EVENTS OF DEFAULT AND REMEDIES
Section
4.01 Negative Covenants. As long as any Loan remains outstanding, unless Lender shall have otherwise given prior written consent,
the Borrower shall not, and shall not permit any of its Subsidiaries (if any) to, directly or indirectly:
(a)
amend its organization documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of Lender;
(b)
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock or Common
Stock Equivalents other than (i) as required under the Loan Documents, (ii) repurchases of Common Stock or Common Stock Equivalents of
departing officers and directors of the Borrower, provided that such repurchases shall not exceed an aggregate of $25,000 for all officers
and directors during the term of any Loan, (iii) repurchases of Common Stock or Common Stock Equivalents, pursuant to existing repurchase
agreements, provided that such repurchases shall not exceed an aggregate of $25,000 during the term of any Loan, or (iv) shares of Common
Stock and Common Stock Equivalents which do not vest or are otherwise forfeited, provided (in case of forfeiture) that such Common Stock
and Common Stock Equivalents are not acquired for cash;
(c)
incur, repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness, other than (A) Loans, (B) regularly scheduled
principal and interest payments or accruals as such terms are in effect as of the Closing Date, or (C) payments required to be made pursuant
to the Pinnacle Bank Loan, or make any singular payment exceeding $25,000 without prior approval by Borrower’s Board of Directors,
other than the payment of those items intended by Section 5.01 of this Agreement or payments required to be made pursuant to the Pinnacle
Bank Loan; provided that (i) no Event of Default shall then exist or occur or exist by reason thereof, and (ii) if Borrower wishes
to obtain any debt financing, including by way of loan or credit agreement, from any other Person (each, a “Subsequent Financing”)
subsequent to the Closing Date, then Borrower shall specifically notify Lender of such Subsequent Financing, including (in reasonable
detail) the material terms and provisions thereof, and Lender shall have a right of first refusal to accept and provide such Subsequent
Financing on such terms and provisions for a period of up to thirty (30) days from its receipt of such notification, and whether or not
such right of first refusal is exercised by Lender, such debt financing shall be permitted under this Agreement notwithstanding the foregoing;
(d)
pay cash dividends or distributions on any equity securities of the Borrower; or
(e)
enter into any material transaction with any Affiliate of the Borrower, unless such transaction is made on an arm’s-length basis
and expressly approved by a majority of the disinterested directors of the Borrower (even if less than a quorum otherwise required for
board approval); or
(f)
enter into any agreement with respect to any of the foregoing.
Section
4.02 Events of Default. In this Agreement, an “Event of Default” means any of the following events (whatever the reason
for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment,
decree or order of any court, or any order, rule or regulation of any administrative or governmental body):
(a)
any default in the payment or prepayment of the Payment Amount as and when the same shall become due and payable (whether on the Maturity
Date, by acceleration or otherwise), which default continues for five (5) Business Days;
(b)
any Lender Board Nominee shall have been removed as a member of the Board of Directors without cause, without the prior written consent
of the Lender, and such removal is not cured by the appointment of a replacement Lender Board Nominee within ten (10) Business Days after
written notice from the Lender; provided, that, for the avoidance of doubt, the following are not an Events of Default: (i) the removal
of any Lender Board Nominee as a member of the Board of Directors with cause, (ii) the Lender failing to provide an eligible replacement
Lender Board Nominee who meets the relevant Nasdaq requirements, and (iii) the removal of Lender Board Nominees pursuant to Section 5.05(c);
(c)
the Borrower shall fail to observe or perform any other covenant or agreement contained in Loan Documents, which failure is not cured,
if possible to cure, within the earlier to occur of (i) ten (10) Business Days after notice of such failure sent by the Lender or by
any other Lender to the Borrower and (ii) fifteen (15) Business Days after the Borrower has become or should have become aware of such
failure;
(d)
a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall
occur under any other material agreement, lease, document or instrument to which the Borrower or any Subsidiary is obligated (and not
covered by clause (g) below);
(e)
any material representation or warranty made in this Agreement, any other Loan Document, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to Lender shall be untrue or incorrect in any material respect
as of the date when made, and, to the extent such breach is capable of cure, such breach is not cured within fifteen (15) Business Days
after the earlier of (i) written notice from the Lender or (ii) the Borrower becoming aware of such breach;
(f)
the Borrower or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;
(g)
the Borrower or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, capital lease, factoring agreement or other instrument under which there may be issued, or by which there may be secured or
evidenced, any Indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (i) involves an
obligation greater than $100,000, whether such Indebtedness now exists or shall hereafter be created, and (ii) results in such Indebtedness
becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;
(h)
the Borrower shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of all
or in excess of 33% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a
Change of Control Transaction); or
(i)
a final non-appealable judgment by any competent court in Canada or the United States for the payment of money in an amount of at least
$100,000 is rendered against the Borrower or any Subsidiary, and the same remains undischarged and unpaid for a period of 60 days during
which execution of such judgment is not effectively stayed.
Section
4.03 Remedies Upon Events of Default. If any Event of Default occurs, at the Lender’s election and demand the Default Amount
shall become immediately due and payable in cash. In connection with any acceleration of Loans as described herein, Lender need not provide,
and the Borrower hereby waives, any presentment, demand, protest or other notice of any kind, and Lender may immediately and without
expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under
applicable law. Such acceleration may be rescinded and annulled by Lender at any time prior to payment hereunder, and Lender shall have
all rights as a creditor of Borrower until such time, if any, as the Lender receives full payment as provided herein. No such rescission
or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
ARTICLE
V
OTHER
AGREEMENTS OF THE PARTIES
Section
5.01 Use of Proceeds. Borrower shall use the proceeds from the Loans hereunder for general corporate purposes, including but not
limited to (for the avoidance of doubt) to finance the expense of a Qualified Public Equity Offering.
Section
5.02 Qualified Public Equity Offering. From the date of this Agreement until the earlier to occur of (i) the Maturity Date, and
(ii) the repayment in full of all Loans in the Payment Amount (or, if an Event of Default shall have previously occurred, the Default
Amount), Borrower will use its commercially reasonable efforts to consummate a Qualified Public Equity Offering as soon as practicable,
and Lender shall cooperate with Borrower in connection therewith; provided, that the Borrower shall not be obligated to consummate
any such Qualified Public Equity Offering on terms that, in the good faith judgment of the Board of Directors, are not in the best interests
of the Borrower and its stockholders.
Section
5.03 Publicity. The Borrower and the Lender shall consult with each other in issuing any other press releases with respect to
the transactions contemplated hereby, and neither the Borrower nor the Lender shall issue any such press release nor otherwise make any
such public statement without the prior consent of the Borrower with respect to any press release of the Lender, or without the prior
consent of the Lender with respect to any press release of the Borrower mentioning the Lender, which consent shall not unreasonably be
withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other
party with prior notice of such public statement or communication.
Section
5.04 Indemnification of Lender. The Borrower shall indemnify, reimburse and hold harmless the Lender and its partners, members,
shareholders, officers, directors, employees and agents (and any other persons with other titles that have similar functions) (collectively,
“Indemnitees”) from and against any and all losses, claims, liabilities, damages, penalties, suits, costs and expenses,
of any kind or nature, (including fees relating to the cost of investigating and defending any of the foregoing) imposed on, incurred
by or asserted against such Indemnitee in any way related to or arising from or alleged to arise from: (i) any breach of any of the representations,
warranties, covenants or agreements made by the Borrower in this Agreement or in the other Loan Documents and (ii) any action instituted
against such Indemnitee in any capacity, or any of them or their respective Affiliates, by any stockholder of the Borrower who is not
an Affiliate of such Indemnitee, with respect to any of the transactions contemplated by the Loan Documents (unless such action is based
upon a breach of such Indemnitee’s representations, warranties or covenants under the Loan Documents or any agreements or understandings
such Indemnitee may have with any such stockholder or any violations by such Indemnitee of state or federal securities laws or any conduct
by such Indemnitee which results from the gross negligence or willful misconduct of the Indemnitee as determined by a final, nonappealable
decision of a court of competent jurisdiction).
Section
5.05 Loan Contingency, Board Reconstitution.
(a)
Board Reconstitution. In connection with the implementation of the revolving credit facility contemplated by this Agreement, the Borrower
shall cause (i) the Departing Directors to resign from the Board of Directors, and (ii) the Remaining Directors to elect or appoint the
Lender Board Nominees to the Board of Directors, in each case effective no later than [the Closing Date]. Following such reconstitution,
the Board of Directors shall consist of five (5) members, of whom three (3) shall be Lender Board Nominees and two (2) shall be the Remaining
Directors.
(b)
Snap-Back Provision. If the Qualified Public Equity Offering is not consummated within 50 days following the Closing Date (as
such period may be extended pursuant to this Section 5.05(b), the “Qualified Public Equity Offering Deadline”), then
each Lender Board Nominee shall resign from the Board of Directors effective immediately upon the expiration of such period; provided,
however, that such 50-day period shall be tolled during any period in which the consummation of the Qualified Public Equity Offering
is delayed due to regulatory review or approval processes by the U.S. Securities and Exchange Commission, the Financial Industry Regulatory
Authority, Nasdaq, or any other applicable regulatory authority (each, a “Regulatory Delay”), and the Qualified Public
Equity Offering Deadline shall be extended on a day-for-day basis for each day of such Regulatory Delay. The Lender shall cause each
Lender Board Nominee to deliver to the Borrower an irrevocable letter of resignation, contingent upon the occurrence of the Qualified
Public Equity Offering Deadline without the consummation of the Qualified Public Equity Offering, concurrently with his or her appointment
to the Board of Directors. Upon the effectiveness of such resignations, the Borrower shall be entitled to fill the resulting vacancies
on the Board of Directors in accordance with the Borrower’s bylaws and applicable law.
(c)
Cooperation. Each party shall use its commercially reasonable efforts to consummate the Qualified Public Equity Offering prior
to the Qualified Public Equity Offering Deadline. The Borrower and the Lender shall cooperate in good faith to effect the board reconstitution
contemplated by this Section 5.05, including by executing and delivering all documents and instruments, and taking all other actions,
as may be reasonably necessary to carry out the intent of this provision.
(d)
Lender Board Nominee Rights and Obligations. During the period in which the Lender Board Nominees serve on the Board of Directors,
each Lender Board Nominee shall (i) be entitled to the same rights, privileges, indemnification and insurance coverage as all other members
of the Board of Directors, and (ii) be subject to the same fiduciary duties and obligations applicable to all other members of the Board
of Directors under applicable law and the Borrower’s organizational documents. The Borrower shall not amend its certificate of
incorporation, bylaws or other organizational documents in any manner that would adversely affect the rights of the Lender Board Nominees
without the prior written consent of the Lender.
ARTICLE
VI
MISCELLANEOUS
Section
6.01 Fees and Expenses. The Borrower shall bear its own expenses incurred in connection with its negotiation, preparation, execution,
delivery and performance of the Loan Documents, including, without limitation, reasonable attorneys’ and consultants’ fees
and expenses relating to any amendments or modifications of the Loan Documents or any consents or waivers of provisions in the Loan Documents,
and fees and costs of restructuring the transactions contemplated by the Loan Documents. When possible, the Borrower must pay these fees
directly, including, but not limited to, any and all wire fees. In addition, on the Closing Date the Borrower shall cause to be owed
to Lender’s counsel $25,000 on account of Lender’s reasonable and documented legal expenses in connection with such negotiation,
preparation, execution and delivery of the Loan Documents and conducting the Closing. This fee will be deferred and dealt with at a later
time, reasonably agreeable between management and lender.
Section
6.02 Entire Agreement. The Loan Documents, together with the exhibits and schedules thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with
respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
Section
6.03 Notices. Any notice, request, instruction or other document to be given hereunder by any party to the others shall be in
writing and delivered personally or sent by registered or certified mail, postage prepaid, or by or email:
if
to Lender:
Attention:
Leonor Pietar
Email:
LP.stonecapital@yahoo.com
if
to the Borrower:
249
E. Gardena Blvd.
Gardena,
CA 90248
Attention:
Arthur D. Sams, Chief Executive Officer
Email:
asams@polarpowerinc.com
Attention:
Luiz Zavala, Chief Financial Officer
Email:
lzavala@polarpowerinc.com
with
a copy to (which shall not constitute notice):
Loeb
& Loeb LLP
345
Park Ave.
New
York, NY 10154
Attention:
Holt Goddard
Email.
hgoddard@loeb.com
or
to such other persons or addresses as may be designated in writing by the party to receive such notice as provided above.
Section
6.04 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented, or amended except in a written
instrument signed, in the case of an amendment, by the Borrower and the Lender or, in the case of a waiver, by the party against whom
enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right.
Section
6.05 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and permitted assigns. The Borrower may not assign this Agreement or any rights or obligations hereunder without the prior written consent
of the Lender (other than by merger). The Lender may sell or assign any or all of its rights under this Agreement, and Loans, to any
Person, provided that (i) unless an Event of Default has occurred and is continuing, the Lender shall not sell or assign any of
its rights or obligations hereunder without the prior written consent of the Borrower (such consent not to be unreasonably withheld,
conditioned or delayed), and (ii) such transferee agrees in writing with the Borrower to be bound by the provisions of the Loan Documents
that apply to the “Lender.”
Section
6.06 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
Section
6.07 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Loan Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, USA, without regard to
the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and
defense of the transactions contemplated by any of the Loan Documents (whether brought against a party hereto or its Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in the federal and state courts sitting in the County of
New York, New York, USA (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction
of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the Loan Documents), and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts,
or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. If any party shall commence
an action or proceeding to enforce any provisions of the Loan Documents, then the prevailing party in such action or proceeding shall
be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred in the investigation, preparation
and prosecution of such action or proceeding.
Section
6.08 Survival. The representations and warranties contained herein shall survive the Closing and each Loan Date.
Section
6.09 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party,
it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature
page was an original thereof.
Section
6.10 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
Section
6.11 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar
provisions of) any of the other Loan Documents, whenever the Lender exercises a right, election, demand or option under a Loan Document
and the Borrower does not timely perform its related obligations within the periods therein provided, then the Lender may rescind or
withdraw, in its sole discretion from time to time upon written notice to the Borrower, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights.
Section
6.12 Replacement of Note. If Lender’s Note is mutilated, lost, stolen or destroyed, the Borrower shall issue or cause to
be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Borrower of such loss, theft
or destruction.
Section
6.13 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages,
each of the Lender and the Borrower will be entitled to seek specific performance under the Loan Documents. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Loan Documents
and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at
law would be adequate.
Section
6.14 Payment Set Aside. To the extent that the Borrower makes a payment or payments to the Lender pursuant to any Loan Document
or the Lender enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise
or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by
or are required to be refunded, repaid or otherwise restored to the Borrower, a trustee, receiver or any other person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not occurred.
Section
6.15 Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to
revise the Loan Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of the Loan Documents or any amendments hereto.
Section
6.16 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed
to limit or affect any of the provisions hereof.
Section
6.17 Termination. Lender may terminate this Agreement at any time in its sole discretion upon written notice to the Borrower;
provided, however, that if the Lender terminates this Agreement, the Borrower shall not be required to repay any outstanding
Obligations under this Agreement until the Maturity Date, and such Obligations shall remain outstanding and continue to accrue interest
in accordance with the terms of this Agreement until the Maturity Date.
Section
6.17 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY,
THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties hereto have caused this Revolving Loan Agreement to be duly executed by their respective authorized
signatories as of the date below.
Borrower:
POLAR
POWER, INC.
By:
/s/
Arthur Sams
Name:
Arthur
Sams
Title:
Chief
Executive Officer
Lender:
STONE
BROTHERS CAPITAL
By:
/s/
Leonor Pietar
Name:
Leonor
Pietar
Title:
Principal
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The Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
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- Definition
Local phone number for entity.
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No definition available.
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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
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- Definition
Title of a 12(b) registered security.
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Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
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-Section 12
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- Definition
Name of the Exchange on which a security is registered.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
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- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
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Trading symbol of an instrument as listed on an exchange.
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- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
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-Name Securities Act
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