Exhibit 10.3

 

INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

THIS INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “IP Security
Agreement”) dated as of July 6, 2018, is made by WORKHORSE GROUP INC., a Nevada
corporation (“Borrower”), WORKHORSE TECHNOLOGIES INC., an Ohio corporation (“WH
Technologies”), WORKHORSE PROPERTIES INC., an Ohio corporation (“WH
Properties”), WORKHORSE MOTOR WORKS INC., an Indiana corporation (“WH MW”), and
SUREFLY, INC., a Delaware corporation (“Surefly” and together with Borrower, WH
Technologies, WH Properties, and WH MW, collectively, the “Grantors” and each
individually a “Grantor”) in favor of _______, a Cayman Islands exempted limited
partnership (“Lender”), as lender under that certain Loan Agreement dated as of
the date hereof between Borrower and Lender (as amended and restated,
supplemented or otherwise modified from time to time, the “Loan Agreement”).
Terms defined in the Loan Agreement and not otherwise defined herein are used
herein as defined in the Loan Agreement.

 

WHEREAS, as a condition precedent to the making of the Loan by Lender under the
Loan Agreement, each Grantor has executed and delivered that certain Guarantee
and Collateral Agreement dated as of the date hereof between the Grantors and
the Lender (as amended, amended and restated, supplemented or otherwise modified
from time to time, the “Security Agreement”).

 

WHEREAS, under the terms of the Security Agreement, each Grantor has granted a
security interest in, among other property, certain intellectual property of
such Grantor to the Lender, and has agreed as a condition thereof to execute
this IP Security Agreement covering such intellectual property for recording
with the U.S. Patent and Trademark Office, the United States Copyright Office
and other governmental authorities.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each Grantor agrees as follows:

 

SECTION 1. Grant of Security. Each Grantor hereby grants to the Lender a
security interest in and to all of such Grantor’s right, title and interest in
and to the following (the “IP Collateral”):

 

(i)           the United States, international and foreign patents, patent
applications and patent licenses set forth in Schedule A hereto (as such
Schedule A may be supplemented from time to time by supplements to the Security
Agreement and this IP Security Agreement (each such supplement, an “IP Security
Agreement Supplement”), executed and delivered by any Grantor to the Lender from
time to time), together with all reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations thereof, and all rights
therein provided by international treaties or conventions (the “Patents”);

 

(ii)          the United States and foreign trademark and service mark
registrations, applications, and licenses set forth in Schedule B hereto (as
such Schedule B may be supplemented from time to time by IP Security Agreement
Supplements executed and delivered by any Grantor to the Lender from time to
time) (the “Trademarks”);

 

(iii)         the copyrights, United States and foreign copyright registrations
and applications and copyright licenses set forth in Schedule C hereto (as such
Schedule C may be supplemented from time to time by IP Security Agreement
Supplements executed and delivered by any Grantor to the Lender from time to
time) (the “Copyrights”);

 

(iv)         any and all claims for damages for past, present and future
infringement, misappropriation or breach with respect to the Patents, Trademarks
and Copyrights, with the right, but not the obligation, to sue for and collect,
or otherwise recover, such damages; and

 

(v)          any and all proceeds of the foregoing.

 

Notwithstanding the foregoing, however, the IP Collateral shall not include any
intent-to-use trademarks, prior to the filing of a “Statement of Use” with
respect thereto if and solely to the extent that (and so long as) any such
intent-to-use trademark application would be rendered void by the attachment or
creation of a security interest in the right, title or interest of such Grantor
therein).

 

 

 

 

SECTION 2. Security for Obligations. The grant of a security interest in the IP
Collateral by each Grantor under this IP Security Agreement secures the payment
of the Obligations of such Grantor now or hereafter existing, whether direct or
indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest (including any interest that accrues after the
commencement of bankruptcy), premiums, penalties, fees, indemnifications,
contract causes of action, costs, expenses or otherwise.

 

SECTION 3. Recordation. Each Grantor authorizes and requests that the Register
of Copyrights, the Commissioner of Patents and Trademarks and any other
applicable government office record this IP Security Agreement.

 

SECTION 4. Execution in Counterparts. This IP Security Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement.

 

SECTION 5. Grants, Rights and Remedies. This IP Security Agreement has been
entered into in conjunction with the provisions of the Security Agreement. Each
Grantor does hereby acknowledge and confirm that the grant of the security
interest hereunder to, and the rights and remedies of, the Lender with respect
to the IP Collateral are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated herein by reference as if fully
set forth herein. In the event of any conflict between the Security Agreement
and this IP Security Agreement, the provisions of the Security Agreement shall
control.

 

SECTION 6. Governing Law. This IP Security Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.

 

[SIGNATURE PAGE FOLLOWS]

 

2

 

 

IN WITNESS WHEREOF, each Grantor has caused this IP Security Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.

        Address for Notices: WORKHORSE GROUP INC., as a Grantor         Address:
      Attention: By:     Telephone: Name:   E-mail: Title:           Address:
WORKHORSE TECHNOLOGIES INC., as a Grantor Attention:       Telephone:      
E-mail: By:       Name:     Title:           Address: WORKHORSE PROPERTIES INC.,
as a Grantor Attention:       Telephone:       E-mail: By:       Name:    
Title:           Address: WORKHORSE MOTOR WORKS INC., as a Grantor Attention:  
    Telephone:       E-mail: By:       Name:     Title:           Address:
SUREFLY, INC., as a Grantor Attention:       Telephone:       E-mail: By:      
Name:     Title:  

 

(Signature Page to IP Security Agreement)

 

 

 

 

IN WITNESS WHEREOF, the Lender has caused this IP Security Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

 

  ______________, as Lender         By:       Name:     Its:

 

Address for Notices:

 

(Signature Page to IP Security Agreement)

 

 

 

 

Schedule A to the
IP Security Agreement

 

PATENTS:

 

Code/Matter No. Country Serial
Number Application
Date Patent
Number Issue/
Grant Date Expiration
Date Title Assignee AMPI Canada 2523653 10/17/2005 2523653 12/22/2009 10/17/2025
VEHICLE CHASSIS ASSEMBLY AMP Trucks Inc. AMPI United States 11/252,220
10/17/2005 7,717,464 05/18/2010 09/06/2026 Vehicle Chassis Assembly AMP Trucks
Inc. AMPI United States 11/252,219 10/17/2005 7,559,578 07/14/2009 09/06/2026
Vehicle Chassis Assembly AMP Trucks Inc. AMPI United States 29/243,074
11/18/2005 D561,078 02/05/2008 02/05/2022 Vehicle Header AMP Trucks Inc. AMPI
United States 29/243,129 11/18/2005 D561,079 02/05/2008 02/05/2022 Vehicle
Header AMP Trucks Inc. AMPI 10US United States 13/283,663 10/28/2011 8,541,915
09/24/2013 12/16/2031 DRIVE MODULE AND MANIFOLD FOR ELECTRIC MOTOR DRIVE
ASSEMBLY Workhorse Group Incorporated AMPI 23U United States 14/606,497
01/27/2015 9,481,256 11/01/2016 05/03/2035 ONBOARD GENERATOR DRIVE SYSTEM FOR
ELECTRIC VEHICLES Workhorse Group Incorporated AMPI 24A United States 15/915,144
03/08/2018       PACKAGE DELIVERY BY MEANS OF AN AUTOMATED MULTI-COPTER UAS/UAV
DISPATCHED FROM A CONVENTIONAL DELIVERY VEHICLE Workhorse Group Incorporated
AMPI 24U United States 14/989,870 01/07/2016 9,915,956 03/13/2018 06/24/2036
PACKAGE DELIVERY BY MEANS OF AN AUTOMATED MULTI-COPTER UAS/UAV DISPATCHED FROM A
CONVENTIONAL DELIVERY VEHICLE Workhorse Group Incorporated AMPI 26U United
States 15/944,185 05/31/2018       AUXILIARY POWER SYSTEM FOR ROTORCRAFT WITH
FOLDING PROPELLER ARMS AND CRUMPLE ZONE LOADING GEAR Surefly, Inc. AMPI-26WO PCT
US2018/035353 5/31/2018       AUXILIARY POWER SYSTEM FOR ROTORCRAFT WITH FOLDING
PROPELLER ARMS AND CRUMPLE ZONE LOADING GEAR Surefly, Inc.

 

Schedule A To the Intellectual Property Agreement

 

 

 

 

Schedule B to the
IP Security Agreement

 

TRADEMARKS

 

Code/Matter
No. Mark Name Country Current Owner Application
Number Application
Date Registration
Number Registration
Date Classes Goods AMPI 01 NOTHING OUTWORKS A WORKHORSE Canada Workhorse Custom
Chassis, LLC 1,053,053 03/30/2000 601,870 02/11/2004 N/A Chassis, bodies and
parts thereof for delivery trucks, recreational land vehicles, buses and other
specialty motorized vehicles, namely, auto transport trucks, concrete mixer
trucks, dump trucks, garbage hauler trucks, oil-field trucks, stake and platform
trucks, tank trucks, wrecker and tow trucks and scissors trucks, but
specifically excluding utility cars for turf maintenance for use at golf
courses, country clubs, municipalities, building complexes and large scale
industrial complexes AMPI 01 WORKHORSE CUSTOM CHASSIS Canada Workhorse Custom
Chassis, LLC 1,053,052 03/30/2000 601,775 02/10/2004 N/A Chassis, bodies and
parts thereof for delivery trucks, recreational land vehicles, buses and other
specialty motorized vehicles, namely, auto transport trucks, concrete mixer
trucks, dump trucks, garbage hauler trucks, oil-field trucks, stake and platform
trucks, tank trucks, wrecker and tow trucks and scissors trucks, but
specifically excluding utility cars for turf maintenance for use at golf
courses, country clubs, municipalities, building complexes and large scale
industrial complexes AMPI 01 Workhorse UFO and Logo Canada Workhorse Custom
Chassis, LLC 1,328,215 12/14/2006 757,840 01/26/2010 N/A Chassis and bodies for
recreational vehicles AMPI 01 WORKHORSE Canada Workhorse Custom Chassis, LLC
1,468,395 02/04/2010 783,257 11/23/2010 N/A Chassis, bodies, and parts thereof,
for recreational land vehicles, buses and trucks AMPI 01 WORKHORSE Mexico
Workhorse Custom Chassis, LLC 1068329 02/18/2010 1200569 02/10/2011     AMPI 01
WORKHORSE CUSTOM CHASSIS Mexico Workhorse Custom Chassis, LLC 419462 04/05/2000
685022 01/31/2001     AMPI 01 NOTHING OUTWORKS A WORKHORSE Mexico Workhorse
Custom Chassis, LLC 419463 04/05/2000 685023 01/31/2001     AMPI 01 WORKHORSE
CUSTOM CHASSIS United States AMP Trucks Inc. 75/816,152 10/05/1999 2,413,878
12/19/2000 12 Chassis, bodies, and parts thereof, for recreational land
vehicles, buses AMPI 15IS AMP Iceland Workhorse Group Incorporated 1295/2011
05/05/2011 557/2011 05/31/2011 12 Electric drives for vehicles; Electric
vehicles, namely, land vehicles AMPI 25 WORKHORSE United States AMP Trucks Inc.
78/571,788 02/21/2005 3,214,777 03/06/2007 12 Chassis, bodies, and parts
thereof, for recreational land vehicles, buses and trucks AMPI 27 SUREFLY United
States Workhorse Group Incorporated 87/431,425 05/01/2017 5,476,952 05/22/2018
12 Aircraft AMPI 28 Horsefly United States Workhorse Group Incorporated
87/770,725 01/25/2018     12 Package Delivery System
Utilizing Drones

 

Schedule B To the Intellectual Property Agreement

 

 

 

 

Schedule C to the
IP Security Agreement

 

COPYRIGHTS

 

None.

 

Schedule C To the Intellectual Property Agreement