Exhibit 10.3


 





 


ASSIGNMENT OF DEPOSIT ACCOUNT


 


	Grantor:	Polar Power, Inc.	Lender:	Citibank, N.A.
	 	249 E. Gardena Boulevard	 	6801 Colwell Boulevard
	 	Gardena, CA 90248	 	Irving, TX 75039
	 	 	 	 


 


THIS ASSIGNMENT OF DEPOSIT
ACCOUNT dated March 21, 2017, is made and executed between Polar Power, Inc. ("Grantor'') and Citibank, N.A. ("Lender").


 


ASSIGNMENT. For valuable
consideration, Grantor assigns and grants to Lender a security interest in the Collateral, including without limitation the deposit
account(s) described below, to secure the Indebtedness and agrees that Lender shall have the rights stated in this Agreement with
respect to the Collateral, in addition to all other rights which Lender may have by law.


 


COLLATERAL DESCRIPTION.
The word "Collateral" means the following described deposit account(s) ("Account"):


 


CD Account Number 271093445 with Lender


 


together with (A) all interest,
whether now accrued or hereafter accruing; (B) all additional deposits hereafter made to the Account; (C) any and all proceeds
from the Account; and (D) all renewals, replacements and substitutions for any of the foregoing.


 


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


 


GRANTOR’S REPRESENTATIONS
AND WARRANTIES WITH RESPECT TO THE COLLATERAL With respect to the Collateral, Grantor represents and promises to Lender that:


 


Ownership. Grantor is
the lawful owner of the Collateral free and clear of all loans, liens, encumbrances, and claims except as disclosed to and accepted
by Lender in writing.


 


Right to Grant Security Interest.
Grantor has the full right, power, and authority to enter into this Agreement and to assign the Collateral to Lender.


 


No Prior Assignment. Grantor
has not previously granted a security interest in the Collateral to any other creditor.


 


No Further Transfer. Grantor
shall not sell, assign, encumber, or otherwise dispose of any of Grantor's rights in the Collateral except as provided in this
Agreement.


 


No Defaults. There are
no defaults relating to the Collateral, and there are no offsets or counterclaims to the same. Grantor will strictly and promptly
do everything required of Grantor under the terms, conditions, promises, and agreements contained in or relating to the Collateral.


 


Proceeds. Any and all
replacement or renewal certificates, instruments, or other benefits or proceeds related to
the Collateral that are received by Grantor shall be held by Grantor in trust for Lender and immediately shall be delivered by
Grantor to Lender to be held as part of the Collateral.


 


Validity; Binding Effect.
This Agreement is binding upon Grantor and Grantor's successors and assigns and is legally enforceable in accordance with its
terms.


 


Financing Statements. Grantor
authorizes Lender to file a UCC financing statement, or alternatively, a copy of this Agreement to perfect Lender's security interest.
At Lender's request, Grantor additionally agrees to sign all other documents that are necessary to perfect, protect, and continue
Lender's security interest in the Property. Grantor will pay all filing fees, title transfer fees, and other fees and costs involved
unless prohibited by law or unless Lender is required by law to pay such fees and costs. Grantor irrevocably appoints Lender to
execute documents necessary to transfer title if there is a default. Lender may file a copy of this Agreement as a financing statement.


 


LENDER'S RIGHTS AND OBLIGATIONS
WITH RESPECT TO THE COLLATERAL. While this
Agreement is in effect, Lender may retain the rights to possession of the Collateral, together with any and all evidence of the
Collateral, such as certificates or passbooks. This Agreement will remain in effect until (a) there no longer is any Indebtedness
owing to Lender; (b) all other obligations secured by this Agreement have been fulfilled; and (c) Grantor, in writing, has
requested from Lender a release of this Agreement.


 


LENDER'S EXPENDITURES. If
any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Grantor fails to comply
with any provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay
when due any amounts Grantor is required to discharge or pay under this Agreement or any Related Documents, Lender on Grantor’s
behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging
or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Collateral and
paying all costs for insuring, maintaining and preserving the Collateral. All such expenditures incurred or paid by Lender for
such purposes, with the exception of insurance premiums paid by Lender with respect to motor vehicles, but including the payment
of attorneys· fees and expenses, will then bear interest at the rate charged under the Note from the date incurred or paid
by Lender to the date of repayment by Grantor. All such expenses will become a part of the indebtedness and, at Lender’s
option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any
installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of
the Note; or (C) be treated as a balloon payment which win be due and payable at the Note's maturity. The Agreement also will secure
payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon
Default.


 


LIMITATIONS ON OBLIGATIONS
OF LENDER. Lender shall use ordinary reasonable care in the physical preservation and custody of any certificate or passbook
for the Collateral but shall have no other obligation to protect the Collateral or its value. In particular, but without limitation,
Lender shall have no responsibility (A) for the collection or protection of any income on the Collateral;
(B) for the preservation of rights against issuers of the Collateral or against third persons; (C) for ascertaining any maturities,
conversions, exchanges, offers, tenders, or similar matters relating to the Collateral; nor (D) for informing the Grantor about
any of the above, whether or not Lender has or is deemed to have knowledge of such matters.


 


DEFAULT.
Each of the following shall constitute an Event of Default under this Agreement:


 




     


     


    

 


	ASSIGNMENT OF DEPOSIT ACCOUNT	 
	(Continued)	Page 2
		 




 


Payment Default Grantor
fails to make any payment when due under the Indebtedness.


 


Other Defaults. Grantor
fails to comply
with or to perform any other
term, obligation,
covenant
or condition contained
in this Agreement or in
any of the Related Documents
or to comply with or
to perform any
term, obligation, covenant
or condition contained in any other
agreement between Lender and Grantor.


 


Default In Favor of Third
Parties. Grantor defaults
under any loan, extension
of credit, security agreement, purchase or sales
agreement, or any other agreement,
in favor of any other creditor
or person that may
materially
affect any of Grantor's property
or ability to perform Grantor's
obligations
under this Agreement or any of the
Related Documents.


 


False Statements. Any
warranty, representation or statement made or furnished
to Lender by Grantor or
on Grantor's behalf under
this Agreement or the Related Documents
is false or
misleading in any material respect, either
now or at the time made or furnished or becomes false or
misleading at any time thereafter.


 


Defective Collateralization.
This Agreement
or any of the Related Documents ceases to be in full force
and effect (including failure of any collateral document
to create a valid and perfected security interest
or lien) at any time and for any
reason.


 


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


 


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


 


Events Affecting Guarantor.
Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the Indebtedness
or guarantor, endorser, surety, or accommodation party dies or becomes incompetent or revokes or disputes the validity of, or liability
under, any Guaranty of the Indebtedness.


 


Adverse Change. A material
adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness
is impaired.


 


Insecurity. Lender in
good faith believes itself insecure.


 


RIGHTS AND
REMEDIES ON DEFAULT. Upon the occurrence of
an Event of Default, or at any time thereafter. Lender may exercise any one or more of the following rights and remedies, in addition
to any rights or remedies that may be available at law, in equity, or otherwise:


 


Accelerate Indebtedness.
Lender may declare an Indebtedness of Grantor to Lender immediately due and payable, without notice of any kind to
Grantor.


 


Application
of Account Proceeds. Lender may take directly
all funds in the Account and
apply them to the Indebtedness. If the Account is subject to an early withdrawal penalty, that
penalty shall be deducted from the Account before its application to the
Indebtedness, whether the Account is with Lender or some
other institution. Any excess funds remaining
after application of the Account
proceeds to the Indebtedness will be paid to Grantor as the interests of Grantor may appear. Grantor agrees, to the extent
permitted by law, to pay any deficiency after application of the proceeds of the Account to the Indebtedness. Lender also shall
have all the rights of a secured party under the New York Uniform Commercial Code, even if the Account is not otherwise subject
to such Code concerning security interests, and the parties to this Agreement agree that the provisions of the Code giving rights
to a secured party shall nonetheless be a part of this Agreement.


 


Transfer Title. Lender
may affect transfer of title upon sale of all or part of the Collateral. For this purpose, Grantor irrevocably appoints Lender
as Grantor's attorney-in-fact to execute endorsements, assignments and instruments in the name of Grantor and each of them (if
more than one) as shall be necessary or reasonable.


 


Other Rights and Remedies.
Lender shall have and may exercise any or all of the rights and remedies of a secured creditor under the provisions of the
New York Uniform Commercial Code, at law, in equity, or otherwise.


 


Deficiency Judgment. If
permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after
application of all amounts received from the exercise of the rights provided in this section.


 


Election of Remedies. Except
as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by this Agreement or by any other
writing, shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor
under this Agreement, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its
remedies.


 


Cumulative Remedies. All
of Lender's rights and remedies, whether evidenced by this Agreement or by any other writing, shall be cumulative and may be exercised
singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election
to make expenditures or to take action to perform an obligation of Grantor under this Agreement, after Grantor's failure to perform,
shall not affect Lender's right to declare a default and to exercise its remedies.


 


JURY WAIVER. ALL
PARTIES TO THIS ASSIGNMENT HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST
ANY OTHER PARTY, TO THE EXTENT PERMITTED BY
APPLICABLE LAW.


 


MISCELLANEOUS PROVISIONS.
The following
miscellaneous provisions
are a part of this
Agreement:


 


Amendments.
This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the
parties as to the matters
set forth in this Agreement. No alteration
of or amendment to this
Agreement shall be effective unless
given in writing and signed by the
party or parties sought
to be charged or bound by the alteration
or amendment.


 


Attorneys' Fees; Expenses.
Grantor agrees to pay upon demand all
of Lender's costs and
expenses, including
Lender's reasonable
attorneys' fees and Lender's legal
expenses, incurred in connection with the
enforcement of this Agreement.
Lender may hire or pay someone else to
help enforce this Agreement, and Grantor shall
pay the costs and expenses
of such enforcement. Costs and expenses
include Lender's reasonable
attorneys' fees and legal expenses
whether or not there is a
lawsuit, including reasonable attorneys' fees and legal expenses
for bankruptcy proceedings {including efforts to
modify or vacate any automatic
stay or injunction),
appeals, and any anticipated
post-judgment collection services. Grantor also shall pay all court costs and such additional fees as may be directed by the court.


 




     


     


    

 





	ASSIGNMENT OF DEPOSIT ACCOUNT	 
	(Continued)	Page 3
		 


 


Caption Headings.
Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions
of this Agreement.


 


Governing
Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the
laws of the State of New York without regard to its conflicts of law provisions.


 


Choice of
Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of New York
County, State of New York. Nothing herein shall affect the right of the Lender to bring any action or proceeding against the Grantor
or its property in the courts of any other jurisdiction.


 


No
Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in
writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such
right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's
right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender,
nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's
obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such
consent by Lender in any instance shall not constitute continuing consent to subsequent instances
where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.


 


Notices. Any
notice required to be given under this Agreement shall be
given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise
required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States
mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this
Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties,
specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender
informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor,
any notice given by Lender to any Grantor is deemed to be notice given to all Grantors.


 


Power of Attorney.
Grantor hereby appoints Lender as its true and lawful attorney-in-fact, irrevocably, with full power of substitution to do
the following: (1) to demand, collect, receive, receipt for, sue and recover all sums of money or other property which may now
or hereafter become due, owing or payable from the Collateral; (2) to execute, sign and endorse any and all claims, instruments,
receipts, checks, drafts or warrants issued in payment for the Collateral: (3) to settle or compromise any and all claims arising
under the Collateral, and in the place and stead of Grantor, to execute and deliver its release and settlement for the claim; and
(4) to file any claim or claims or to take any action or institute or take part in any proceedings, either in its own name or in
the name of Grantor, or otherwise, which in the discretion of Lender may seem to be necessary or advisable. This power is given
as security for the Indebtedness, and the authority hereby conferred is and shall be irrevocable and shall remain in full force
and effect until renounced by Lender.


 


Severability.
If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance.
If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending
provision cannot be so modified, it shall be considered
deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision
of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.


 


Successors
and Assigns. Subject to any limitations stated in this Agreement on transfer of Grantor's interest, this Agreement
shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes
vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to
this Agreement and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Agreement
or liability under the Indebtedness.


 


Survival of
Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Agreement shall survive
the execution and delivery of this Agreement, shall be continuing in nature, and shall remain in full force and effect until such
time as Grantor's Indebtedness shall be paid in full.


 


Time is of
the Essence. Time is of the essence in the performance of this Agreement.


 


DEFINITIONS. The following
capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to tile contrary,
all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise
defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code:


 


Account The word "Account"
means the deposit account(s) described in the "Collateral Description" section.


 


Agreement. The word "Agreement"
means this Assignment of Deposit Account, as this Assignment of Deposit Account may be amended or modified from time to time, together
with all exhibits and schedules attached to this
Assignment of Deposit Account from time to time.


 


Borrower. The word "Borrower''
means Polar Power, Inc. and includes all co-signers and co-makers signing the Note and au their successors and assigns.


 


Collateral. The word ''Collateral"
means all of Grantor's right, title and interest in and to all the Collateral as described in the Collateral Description section
of this Agreement.


 


Default. The word "Default"
means the Default set forth in this Agreement in the section titled "Default".


 


Event of Default. The
words "Event of Default" mean any of the events of default set forth in this Agreement in the default section of this
Agreement.


 


Grantor. The word "Grantor''
means Polar Power, Inc..


 


Guaranty. The word "Guaranty"
means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, including without limitation a guaranty
of all or part of the Note.


 


Indebtedness. The word
"Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and interest
together with all other indebtedness and costs and expenses for which Grantor is responsible under this Agreement or under any
of the Related Documents.


 


Lender. The word "Lender"
means Citibank, N.A., its successors and assigns.


 




     


     


    

 


 


	ASSIGNMENT OF DEPOSIT ACCOUNT	 
	(Continued)	Page 4
		 





 


Note. The word "Note"
means and includes without limitation Borrower's promissory note or notes, if any, or any credit agreement or loan agreement,
evidencing Borrower's Indebtedness, as well as any substitute, replacement or refinancing note or notes or credit agreement or
loan agreement therefore.


 


Property. The word "Property"
means all of Grantor's right, title and interest in and to all the Property as described in the "Collateral Description"
section of this Agreement.


 


Related
Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments,
agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness.


 


GRANTOR HAS READ AND UNDERSTOOD
ALL THE PROVISIONS OF THIS ASSIGNMENT OF DEPOSIT ACCOUNT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED MARCH 21, 2017.


 


GRANTOR:


 


	POLAR POWER, INC.	 	 	 
	 	 	 	 
	By:	/s/
    Luis Zavala	 	By:	/s/
    Arthur Sams
	 	Luis Zavala, Chief Financial Officer of Polar
    Power, Inc.	 	 	Arthur Sams, Chief Executive Officer & President
    of Polar Power, Inc.


 





 



 


LaserPro Ver.
15.4.10.D54 Copr D+H USA Corporation 1997 2017 All Rights Reserved. - NY D:
LASERPROGLOCFNPLESO FC TR 21500 PA-S