Exhibit 4.1


 


 


 


	WKHS	 	 	Interest free if paid in full
	                                       $400,000 CONVERTIBLE NOTE	within 3 months












 


Workhorse Group Inc., a Nevada corporation (the "Issuer" of this Security) with at least
167,583,554 common shares issued and outstanding, issues this Security and promises to pay to JMJ Financial, a Nevada sole proprietorship,
or its Assignees (the "Investor") the Principal Sum along with the Interest Rate and any other fees according to the
terms herein. This Note will become effective only upon execution by both parties and delivery of the first payment of Consideration
by the Investor (the "Effective Date").


The
Principal Sum is $400,000 (four hundred thousand) plus accrued and unpaid interest and any other fees. The Consideration is $360,000
(three hundred sixty thousand) payable by wire (there exists a $40,000 original issue discount (the "OID")). The Investor
shall pay $100,000 of Consideration upon closing of this Note. The Investor may pay additional Consideration to the Issuer in such
amounts and at such dates as the Investor may choose in its sole discretion. THE PRINCIPAL SUM DUE TO THE INVESTOR SHALL BE
PRORATED BASED ON THE CONSIDERATION ACTUALLY PAID BY INVESTOR (PLUS AN APPROXIMATE 10% ORIGINAL ISSUE DISCOUNT THAT IS PRORATED
BASED ON THE CONSIDERATION ACTUALLY PAID BY THE INVESTOR AS WELL AS ANY OTHER INTEREST OR FEES) SUCH THAT THE ISSUER IS ONLY REQUIRED
TO REPAY THE AMOUNT FUNDED AND THE ISSUER IS NOT REQUIRED TO REPAY ANY UNFUNDED PORTION OF THIS NOTE. The Maturity Date is
two years from the Effective Date of each payment (the "Maturity Date") and is the date upon which the Principal Sum
of this Note, as well as any unpaid interest and other fees, shall be due and payable, The Conversion Price is the lesser of $0,30
or 60% of the lowest trade price in the 25 trading days previous to the conversion (In the case that conversion shares are not
deliverable by DWAC an additional 10% discount will apply; and if the shares are ineligible for deposit into the DTC system and
only eligible for Xclearing deposit an additional 5% discount shall apply; in the case of both an additional cumulative 15% discount
shall apply). Unless otherwise agreed in writing by both parties, at no time will the Investor convert any amount of the Note into
common stock that would result in the Investor owning more than 4.99% of the common stock outstanding.


1.       ZERO
Percent Interest for the First Three Months. The Issuer may repay this Note at any time on or before 90 days from
the Effective Date, after which the Issuer may not make further payments on this Note prior to the Maturity Date without written
approval from the Investor. If the Issuer repays a payment of Consideration on or before 90 days from the Effective
Date of that payment, the Interest Rate on that payment of Consideration shall be ZERO PERCENT (0%). If the Issuer does not
repay a payment of Consideration on or before 90 days from its Effective Date, a one-time Interest charge of 12% shall be applied
to the Principal Sum. Any interest payable is in addition to the OID, and that OID (or prorated OID, if applicable) remains payable
regardless of time and manner of payment by the Issuer.


2.       Conversion,
The Investor has the right, at any time after the Effective Date, at its election, to convert all or part of the outstanding
and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common
stock of the Issuer as per this conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount
divided by the Conversion Price. Conversions may be delivered to the Issuer by method of the Investor's choice (including but
not limited to email, facsimile, mail, overnight courier, or personal delivery), and all conversions shall be cashless and not
require further payment from the Investor. If no objection is delivered from the Issuer to the Investor regarding any variable
or calculation of the conversion notice within 24 hours of delivery of the conversion notice, the Issuer shall have been thereafter
deemed to have irrevocably confirmed and irrevocably ratified such notice of conversion and waived any objection thereto. The
Issuer shall deliver the shares from any conversion to the Investor (in any name directed by the Investor) within 3 (three) business
days of conversion notice delivery.


3.         
Conversion Delays. If the Issuer fails to deliver shares in accordance with the timeframe stated in Section 2, the
Investor, at any time prior to selling all of those shares, may rescind any portion, in whole or in part, of that particular conversion
attributable to the unsold shares and have the rescinded conversion amount returned to the Principal Sum with the rescinded conversion
shares returned to the Issuer (under the Investor's and the Issuer's expectations that any returned conversion amounts will tack
back to the original date of the Note). In addition, for each conversion, in the event that shares are not delivered by the fourth
business day (inclusive of the day of conversion), a penalty of $2,000 per day will be assessed for each day after the third business
day (inclusive of the day of the conversion) until share delivery is made; and such penalty will be added to the Principal Sum
of the Note (under the Investor's and the Issuer's expectations that any penalty amounts will tack back to the original date of
the Note).


4.         
Reservation of Shares. At all times during which this Note is convertible, the Issuer will reserve from its authorized
and unissued Common Stock to provide for the issuance of Common Stock upon the full conversion of this Note. The Issuer will at
all times reserve at least 7,000,000 shares of Common Stock for conversion,


5.         
Piggyback Registration Rights. The Issuer shall include on the next registration statement the Issuer files with
SEC (or on the subsequent registration statement if such registration statement is withdrawn) all shares issuable upon conversion
of this Note. Failure to do so will result in liquidated damages of 25% of the outstanding principal balance of this Note, but
not less than $25,000, being immediately due and payable to the investor at its election in the form of cash payment or addition
to the balance of this Note.


6.         
Terms of Future Financings. So long as this Note is outstanding, upon any issuance by the Issuer or any of its subsidiaries
of any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security
that was not similarly provided to the Investor in this Note, then the Issuer shall notify the Investor of such additional or
more favorable term and such term, at the Investor's option, shall become a part of the transaction documents with the Investor.
The types of terms contained in another security that may be more favorable to the holder of such security include, but are not
limited to, terms addressing conversion discounts, conversion lookback periods, interest rates, original issue discounts, stock
sale price, private placement price per share, and warrant coverage.






    	 



    	 



    

 


7.         
Default. The following are events of default under this Note: (i) the Issuer shall fail to pay any principal under
the Note when due and payable (or payable by conversion) thereunder; or (ii) the Issuer shall fail to pay any interest or any
other amount under the Note when due and payable (or payable by conversion) thereunder; or (iii) a receiver, trustee or other
similar official shall be appointed over the Issuer or a material part of its assets and such appointment shall remain uncontested
for twenty (20) days or shall not be dismissed or discharged within sixty (60) days; or (iv) the Issuer shall become insolvent
or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace
periods, if any; or (v) the Issuer shall make a general assignment for the benefit of creditors; or (vi) the Issuer shall file
a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); or (vii) an involuntary proceeding
shall be commenced or filed against the Issuer; or (viii) the Issuer shall lose its status as "DTC Eligible" or the
Issuer's shareholders shall lose the ability to deposit (either electronically or by physical certificates, or otherwise) shares
into the DTC System; or (ix) the Issuer shall become delinquent in its filing requirements as a fully-reporting issuer registered
with the SEC; or (x) the Issuer shall fail to meet all requirements to satisfy the availability of Rule 144 to the Investor or
its assigns including but not limited to timely fulfillment of its filing requirements as a fully-reporting issuer registered
with the SEC, requirements for XBRL filings, and requirements for disclosure of financial statements on its website.


8.      
Remedies. In the event of any default, the outstanding principal amount of this Note, plus accrued but unpaid interest,
liquidated damages, fees and other amounts owing in respect thereof through the date of acceleration, shall become, at the Investor's
election, immediately due and payable in cash at the Mandatory Default Amount. The Mandatory Default Amount means the greater of
(i) the outstanding principal amount of this Note, plus all accrued and unpaid interest, liquidated damages, fees and other amounts
hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either demanded or paid in full, whichever
has a lower Conversion Price, multiplied by the VWAP on the date the Mandatory Default Amount is either demanded or paid in full,
whichever has a higher VWAP, or (ii) 150% of the outstanding principal amount of this Note, plus 100% of accrued and unpaid interest,
liquidated damages, fees and other amounts hereon. Commencing five (5) days after the occurrence of any event of default that results
in the eventual acceleration of this Note, the interest rate on this Note shall accrue at an interest rate equal to the lesser
of 18% per annum or the maximum rate permitted under applicable law. In connection with such acceleration described herein, the
Investor need not provide, and the Issuer hereby waives, any presentment, demand, protest or other notice of any kind, and the
Investor 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 the Investor at any
time prior to payment hereunder and the Investor shall have all rights as a holder of the note until such time, if any, as the
Investor receives full payment pursuant to this Section 8. No such rescission or annulment shall affect any subsequent event of
default or impair any right consequent thereon. Nothing herein shall limit the Investor's right to pursue any other remedies available
to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect
to the Issuer's failure to timely deliver certificates representing shares of Common Stock upon conversion of the Note as required
pursuant to the terms hereof.


9.      
No Shorting. The Investor agrees that so long as this Note from the Issuer to the Investor remains outstanding, the
Investor will not enter into or effect "short sales" of the Common Stock or hedging transaction which establishes a net
short position with respect to the Common Stock of the Issuer. The Issuer acknowledges and agrees that upon delivery of a conversion
notice by the Investor, the Investor immediately owns the shares of Common Stock described in the conversion notice and any sale
of those shares issuable under such conversion notice would not be considered short sales.


10.   
Assignability. The Issuer may not assign this Note. This Note will be binding upon the Issuer and its successors
and will inure to the benefit of the Investor and its successors and assigns and may be assigned by the Investor to anyone without
the Issuer's approval,


11.   
Governing Law. This Note will be governed by, and construed and enforced in accordance with, the laws of the State
of Nevada, without regard to the conflict of laws principles thereof. Any action brought by either party against the other concerning
the transactions contemplated by this Agreement shall be brought only in the state courts of Florida or in the federal courts located
in Miami-Dade County, in the State of Florida. Both parties and the individuals signing this Agreement agree to submit to the jurisdiction
of such courts.


12.   
Delivery of Process by the Investor to the Issuer. In the event of any action or proceeding by the Investor against
the Issuer, and only by the Investor against the Issuer, service of copies of summons and/or complaint and/or any other process
which may be served in any such action or proceeding may be made by the Investor via U.S. Mail, overnight delivery service such
as FedEx or UPS, email, fax, or process server, or by mailing or otherwise delivering a copy of such process to the Issuer at its
last known attorney as set forth in its most recent SEC filing.


13.   
Attorney Fees. If any attorney is employed by either party with regard to any legal or equitable action, arbitration
or other proceeding brought by such party for enforcement of this Note or because of an alleged dispute, breach, default or misrepresentation
in connection with any of the provisions of this Note, the prevailing party will be entitled to recover from the other party reasonable
attorneys' fees and other costs and expenses incurred, in addition to any other relief to which the prevailing party may be entitled.


14.    
Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, the Investor
has the right to have any such opinion provided by its counsel. Investor also has the right to have any such opinion provided by
Issuer's counsel.


15.   
 Notices. Any notice required or permitted hereunder (including Conversion Notices) must be in writing and either
personally served, sent by facsimile or email transmission, or sent by overnight courier. Notices will be deemed effectively delivered
at the time of transmission if by facsimile or email, and if by overnight courier the business day after such notice is deposited
with the courier service for delivery.


 



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[Signature Page
to $400,000 Convertible Note]


 


 


 




 





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