Exhibit
10.1


 


SECURITIES
PURCHASE AGREEMENT


 


SECURITIES
PURCHASE AGREEMENT (this “Agreement”), dated as of June 1, 2018, by and between ATRM Holdings, Inc., a Minnesota
corporation (the “Company”), and Lone Star Value Co-Invest I, LP (“Purchaser”).


 


WITNESSETH:


 


WHEREAS,
Purchaser holds 353,060 shares of 10.00% Series B Cumulative Preferred Stock of the Company (“Preferred Stock”);
Jeffrey E. Eberwein, an affiliate of Purchaser, owns 408,017 shares of the Company’s common stock, par value $0.001 per
share (“Common Stock”), and Lone Star Value Investors, LP (“LSVI”), an affiliate of Purchaser,
holds 203,800 shares of Preferred Stock;


 


WHEREAS,
Lone Star Value Management, LLC (“LSVM”) is investment manager of Purchaser and LSVI;


 


WHEREAS,
Jeffrey E. Eberwein, the Chairman of the Company’s Board of Directors (the “Board”), serves as the manager
of Lone Star Value Investors GP, LLC, the general partner of LSVI and Purchaser, and as the sole member of LSVM, which serves
as the investment manager of LSVI, and therefore may be deemed to beneficially own the securities held by Purchaser and LSVI;


 


WHEREAS,
subject to the terms and conditions of this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended
(the “Securities Act”), the Company desires to issue and sell to Purchaser, and Purchaser desires to purchase
from the Company, a Promissory Note in the original principal amount of $900,000 (the “Note”).


 


NOW
THEREFORE, in consideration of the mutual promises and representations, warranties, covenants and agreements set forth herein,
the parties hereto, intending to be legally bound, hereby agree as follows:


 


1.
Purchase and Sale of Securities.


 


1.1
Purchase and Sale. On the terms and subject to the conditions set forth in this Agreement, at the Closing (as defined below),
the Company will sell and Purchaser will purchase the Note. The terms and provisions of the Note are more fully set forth in the
form of Promissory Note attached hereto as Exhibit A. The purchase price to be paid by Purchaser to the Company to acquire
the Note shall be $900,000 (the “Purchase Price”). The Company shall deliver to Purchaser an executed Promissory
Note.


 







    	 



    	 



    

 


1.2
Closing. On the terms and subject to the conditions set forth in this Agreement, the closing of the transactions contemplated
by this Agreement (the “Closing”) shall take place remotely via the exchange of electronic copies of documents,
and shall be deemed to have taken place simultaneously with the execution and delivery of this Agreement and the satisfaction
of the obligations of the parties under Section 1.1.


 


2.
Representations and Warranties of the Company. The Company represents and warrants to Purchaser as follows:


 


2.1
Corporate Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws
of the State of Minnesota, and has all requisite corporate power and authority to own, operate and lease its properties and to
carry on its business as and in the places where such properties are now owned, operated and leased or such business is now being
conducted.


 


2.2
Authorization. The Company has the requisite power and authority to enter into and perform this Agreement and any other
agreements, documents and instruments delivered together with this Agreement or in connection herewith (the “Transaction
Documents”) and to perform its obligations hereunder and thereunder, none of which shall violate the terms of any existing
agreement. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action, and no further consent
or authorization of the Board, any committee of the Board, or the Company’s stockholders is required. The Transaction Documents
have been duly authorized, executed and delivered by the Company and constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights generally
and to general principles of equity.


 


2.3
Approvals and Consents. The Company and/or its affiliates are not required to obtain any consent, authorization or order
of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any
of its obligations under the Transaction Documents or to issue and sell the Note in accordance with the terms hereof, provided
that for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the relevant
representations and agreements of Purchaser herein. If the Company and/or its affiliates is required to obtain any consent or
authorization of, or provide any notice to, a lender in order for it to execute, deliver or perform any of its obligations under
the Transaction Documents or to issue and sell the Note in accordance with the terms hereof, all such required consents or authorizations
have been properly obtained, and all such notices have been properly provided.


 




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2.4
Due and Valid Issuance. The Note, when issued and fully paid for in accordance with the terms of this Agreement, will be
validly issued, fully paid and non- assessable.


 


2.5
No Violation or Breach. Neither the Company nor any of its subsidiaries is in material violation of any federal, state,
local or foreign law, rule, regulation, order, judgment or decree applicable to the Company or any of its subsidiaries. Neither
the execution and delivery of any of the Transaction Documents, nor the consummation by the Company of the transactions contemplated
hereby, (i) will violate or cause a default under any federal, state, local or foreign law, rule, regulation, order, judgment
or decree applicable to the Company or any of its subsidiaries, (ii) breach or conflict with the provisions of the constituent
documents of the Company or any of its subsidiaries, or (iii) violate, conflict with or breach any agreement, arrangement, document
or instrument to which the Company or any of its subsidiaries is a party or by which it is bound.


 


2.6
Finders. The Company has not retained any finder, broker, agent, financial advisor or other intermediary in connection
with the transactions contemplated by this Agreement. The Company agrees to indemnify and hold harmless Purchaser, its officers,
directors, affiliates, subsidiaries, employees and agents (as applicable) from liability for any compensation to any such intermediary
retained by the Company and the fees and expenses of defending against such liability or alleged liability.


 


2.7
Survival. The foregoing representations, warranties and agreements shall survive the execution of this Agreement indefinitely.


 


3.
Representations and Warranties of Purchaser. Purchaser hereby represents and warrants to and agrees with the Company as
follows:


 


3.1
Organization of Purchaser. Purchaser is a limited partnership duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has the requisite entity power to own its assets and to carry on its business.


 


3.2
Authorization. Purchaser has the requisite power and authority to enter into and perform the Transaction Documents and
to purchase the Note being sold to it hereunder. The execution, delivery and performance of the Transaction Documents by Purchaser
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary entity
action, and no further consent or authorization of Purchaser or its partners or members, as the case may be, is required. The
Transaction Documents have been duly authorized, executed and delivered by Purchaser and constitute, or shall constitute when
executed and delivered, valid and binding obligations of Purchaser enforceable against Purchaser in accordance with the terms
thereof, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights generally and to general principles of equity.


 


3.3
Approvals and Consents. Purchaser is not required to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under
the Transaction Documents or to purchase the Note in accordance with the terms hereof, provided that for purposes of the representation
made in this sentence, Purchaser is assuming and relying upon the accuracy of the relevant representations and agreements of the
Company herein, including representations as to no violation of any agreement to which the Company or any of its subsidiaries
is a party.


 







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3.4
No Violation or Breach. Neither the execution and delivery of any of the Transaction Documents, nor the consummation by
Purchaser of the transactions contemplated hereby, (i) will violate or cause a default under any federal, state, local or foreign
law, rule, regulation, order, judgment or decree applicable to Purchaser, (ii) breach or conflict with the provisions of the constituent
documents of Purchaser, or (iii) violate, conflict with or breach any agreement, arrangement, document or instrument to which
Purchaser is a party or by which it is bound, but as to (iii) makes no representations as to any agreement, arrangement, document,
or instrument in connection with the Company’s credit facilities with Gerber Finance.


 


3.5
Investment. Purchaser is acquiring the Note for its own account as principal, not as a nominee or agent, for investment
purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof in whole or in part and no other
person or entity has a direct or indirect beneficial interest in the Note. Purchaser does not have any contract, undertaking,
agreement or arrangement with any person or entity to sell, transfer or grant participations to such person or entity or to any
third person or entity with respect to the Note.


 


3.6
Exemption From Registration. Purchaser acknowledges that the sale of the Note is intended to be exempt from registration
under the Securities Act by virtue of Section 4(a)(2) of the Securities Act. In furtherance thereof, Purchaser represents and
warrants to the Company as follows:


 


(i)
Purchaser realizes that the basis for the exemption from registration under the Securities Act may not be present if, notwithstanding
any representation and/or warranty to the contrary contained in this Agreement, Purchaser has in mind merely acquiring the Note
for a fixed or determinable period of time;


 


(ii)
Purchaser has the financial ability to bear the economic risk of its investment in the Note, has adequate means for providing
for its current needs and contingencies and has no need for liquidity with respect to its investment in the Company; and


 


(iii)
Purchaser has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks
of an investment in the Note.


 


3.7
Accredited Investor. Purchaser is an “accredited investor,” as that term is defined in Rule 501 of Regulation
D.


 


3.8
Available Information. Purchaser: 


 


(i)
Has been furnished by the Company in connection with the sale of the Note with all information regarding the Company, the terms
and conditions of the sale of the Note and any additional information that Purchaser, its representative, attorney and/or accountant
has requested a reasonable time prior to the date hereof;


 




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(ii)
Has been provided an opportunity for a reasonable time prior to the date hereof to obtain additional information concerning the
sale of the Note, the Company and all other information to the extent the Company possesses such information or can acquire it
without unreasonable effort or expense;


 


(iii)
Has been given the opportunity for a reasonable time prior to the date hereof to ask questions of, and receive answers from, the
Company or its representatives concerning the terms and conditions of the sale of the Note and other matters pertaining to an
investment in the Note, or that which was otherwise provided in order for them to evaluate the merits and risks of a purchase
of the Note to the extent the Company possesses such information or can acquire it without unreasonable effort or expense;


 


(iv)
Has not been furnished with any oral representation or oral information in connection with the sale of the Note; and


 


(v)
Has determined that the Note is a suitable investment for Purchaser and that at this time Purchaser could bear a complete loss
of its investment in the Note.


 


3.9
Purchaser Representative. Purchaser is not relying on any statements or representations made by the Company or its affiliates
or any purchaser representative with respect to economic considerations involved in an investment in the Note.


 


3.10
Transfer Restrictions. Purchaser shall not sell or otherwise transfer the Note without registration under the Securities
Act or subject to an exemption therefrom, and Purchaser fully understands and agrees that Purchaser must bear the economic risk
of Purchaser’s purchase because, among other reasons, the Note has not been registered under the Securities Act or under
the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are
subsequently registered under the Securities Act and under the applicable securities laws of such states, or unless exemptions
from such registration requirements are available. In particular, Purchaser is aware that the Note falls within the definition
of “restricted securities,” as such term is defined in Rule 144 promulgated under the Securities Act. Purchaser further
understands that sale or transfer of the Note is further restricted by state securities laws and the provisions of this Agreement.


 


3.11
Entire Agreement. No representation or warranty has been made to Purchaser by the Company, or any officer, director, employee,
agent, affiliate or subsidiary of the Company other than those contained herein and, in purchasing the Note, Purchaser is not
relying upon any representations other than those contained herein.


 


3.12
Purchaser Information. Any information that Purchaser has previously furnished, or is now furnishing to the Company with
respect to Purchaser’s financial position and business experience is correct and complete as of the date of this Agreement
and, if there should be any material change in such information, Purchaser will immediately furnish revised or corrected information
to the Company.


 




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3.13
Legends. Purchaser understands and acknowledges that that the Note may be endorsed with substantially the following legend:


 


(i)
“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“ACT”), OR UNDER ANY
STATE SECURITIES LAW AND THESE SECURITIES MAY NOT BE PLEDGED, SOLD, ASSIGNED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT WITH RESPECT THERETO UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS THE COMPANY RECEIVES AN OPINION
OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.”; and


 


(ii)
any other legends required by applicable state or federal securities laws or any applicable state laws regulating the Company’s
business.


 


3.14
Non-Marketable Investments. Purchaser’s overall commitment to investments that are not readily marketable is not
disproportionate to Purchaser’s net worth, and an investment in the Note will not cause such overall commitment to become
excessive.


 


3.15
Finders. Purchaser has not retained any finder, broker, agent, financial advisor or other intermediary in connection with
the transactions contemplated by this Agreement and agrees to indemnify and hold harmless the Company, its officers, directors,
affiliates, subsidiaries, employees and agents from liability for any compensation to any such intermediary retained by Purchaser
and the fees and expenses of defending against such liability or alleged liability.


 


3.16
Survival. The foregoing representations, warranties and agreements shall survive the execution of this Agreement indefinitely.


 


4.
Covenants.


 


4.1
Use of Proceeds. The proceeds from the purchase and sale of the Note shall be used by the Company for general working capital
purposes.


 


4.2
Indemnification by the Company. The Company hereby agrees to reimburse, defend, indemnify and hold harmless Purchaser and
its affiliates and its and their respective directors, officers, employees, stockholders, members, managers, partners, agents,
attorneys, representatives, successors and permitted assigns (the “Purchaser Indemnified Parties”) from and
against any and all losses, damages, actions, proceedings, causes of action, liabilities, claims, encumbrances, penalties, demands,
assessments, settlements, judgments, costs and expenses, including court costs and reasonable attorneys’ fees and disbursements,
incurred by the Purchaser Indemnified Parties relating to, based upon, resulting from or arising out of (a) any inaccuracy or
breach of any of the representations or warranties made by the Company in this Agreement or (b) any breach of or failure to perform
any covenant or agreement made by the Company in this Agreement.


 




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5.
General Provisions.


 


5.1
Entire Agreement; Amendment and Waiver. This Agreement, together with the Note, constitutes the entire agreement between
the parties hereto with respect to the subject matter contained herein and supersedes all prior oral or written agreements, if
any, between the parties hereto with respect to such subject matter, and, except as otherwise expressly provided herein, is not
intended to confer upon any other person any rights or remedies hereunder. Any failure by the Company or Purchaser to enforce
any rights hereunder shall not be deemed a waiver of such rights. This Agreement may not be amended or modified or the provisions
hereof waived (either generally or in a particular instance and either retroactively or prospectively) without the prior written
consent of the party against whom such amendment, modification, or waiver is sought to be enforced.


 


5.2
Notices. All notices and other communications hereunder shall be in writing and shall be deemed given when delivered personally,
one day after being delivered to a nationally recognized overnight courier or on the business day received (or the next business
day if received after 5:00 p.m. local time or on a weekend or day on which banks are closed) when sent via facsimile (with a confirmatory
copy sent by overnight courier) to the parties at the following addresses (or at such other address for a party as shall be specified
by like notice):


 


If
to Purchaser:


 


Lone
Star Value Co-Invest I, LP


53 Forest Avenue, 1st Floor


Old
Greenwich, Connecticut 06870


Attn:
Jeffrey E. Eberwein, Manager


Fax:
(203) 990-0727


 


If
to the Company:


 


ATRM
Holdings, Inc.


5215
Gershwin Avenue N.


Oakdale,
Minnesota 55128


Attn:
Daniel M. Koch, President and Chief Executive Officer


Fax:
(651) 770-7975


 


With
a copy to (which shall not constitute notice):


 


Olshan Frome Wolosky LLP


1325
Avenue of the Americas


New York, New York 10019


Attn: Adam Finerman, Esq.


Fax:
(212) 451-2222


 







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5.3
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable
to contracts made and performed in such State, without reference to conflict of law rules that would require the application of
the laws of another jurisdiction.


 


5.4
Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. No assignment of this Agreement or of any rights or obligations hereunder may be made by the
Company or Purchaser, directly or indirectly (by operation of law or otherwise), without the prior written consent of the other
party hereto, and any attempted assignment without the required consents shall be void; provided, however, that
Purchaser may assign its rights, interests and obligations hereunder to any affiliate; provided, further, that no
assignment of any obligations hereunder shall relieve the parties hereto of any such obligations. Upon any such permitted assignment,
the references in this Agreement to Purchaser shall also apply to any such assignee unless the context otherwise requires.


 


5.5
Expenses; Litigation Costs. All costs and expenses incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the Company. In any action brought by a party hereto to enforce the obligations of any other party hereto,
the prevailing party shall be entitled to collect from the opposing party to such action such party’s reasonable litigation
costs and attorney’s fees and expenses (including court costs, reasonable fees of accountants and experts, and other expenses
incidental to the litigation).


 


5.6
Headings. The headings or captions contained in this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.


 


5.7
Pronouns. Whenever the pronouns “it” or “its” are used herein, they shall also be deemed to mean
“he” or “his” or “she” or “hers” whenever applicable. Words in the singular shall
be read and construed as though in the plural and words in the plural shall be read and construed as though in the singular in
all cases where they would so apply.


 


5.8
Severability. If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any
law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long
as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated
to the greatest extent possible.


 


5.9
Information Confidential. Purchaser acknowledges that the information received by it pursuant hereto may be confidential
and is for its use only. Purchaser agrees that it will not use such information in violation of the Securities Exchange Act of
1934, as amended, or reproduce, disclose or disseminate such information to any other person, unless the Company has made such
information available to the public generally.


 


5.10
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original
copy of this Agreement and all of which, when taken together, shall be deemed to constitute one and the same agreement, and photostatic,
..pdf or facsimile copies of fully-executed counterparts of this Agreement shall be given the same effect as originals.


 


[SIGNATURE
PAGE FOLLOWS]


 







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[SIGNATURE
PAGE TO SECURITIES PURCHASE AGREEMENT]


 


IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year first above written.


 





	 	ATRM
    HOLDINGS, INC.
	 	 	 
	 	By:	/s/
    Daniel M. Koch
	 	Name:	Daniel
    M. Koch
	 	Title:	President
                                         and Chief Executive

        Officer









 


	LONE
    STAR VALUE CO-INVEST I, LP	 
	 	 	 
	By:	LONE
    STAR VALUE INVESTORS GP, LLC,	 
	 	its
    General Partner	 
	 	 	 
	 	/s/
    Jeffrey E. Eberwein	 
	Name:	Jeffrey
    E. Eberwein	 
	Title:	Manager	 


 







    	 		 



    	 



    




 


Exhibit
A


 


Form
of Promissory Note