Document:

Exhibit 10.1

 

SUBSCRIPTION
AGREEMENT

 

This
Subscription Agreement (this “Subscription Agreement”) is dated as of April 30, 2019, by and between
Workhorse Group Inc., a Nevada corporation (the “Company”), and the investor identified on the
signature page hereto (including its successors and assigns, the “Investor”).

 

RECITALS

 

WHEREAS,
subject to the terms and conditions set forth in this Subscription Agreement and pursuant to the Company’s effective
registration statement under the Securities Act of 1933, as amended (the “Securities Act”), on Form
S-3 (File No. 333-213100), effective as of December 23, 2016 (as amended and/or supplemented from time to time, the “Registration
Statement”), the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the
Company, common shares of the Company (the “Securities”) as more fully described in this Subscription
Agreement.

 

NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Subscription Agreement, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

 

1.
Subscription.

 

(a)
The Investor agrees to buy, and the Company agrees to sell and issue to the Investor, an aggregate of $2,000,000 of Securities,
with the Investor purchasing the Securities in the amount equal to the Investor’s subscription amount at the price per share
as set forth on the signature page hereto executed by the Investor (the “Subscription Amount”).

 

(b)
The Securities have been registered on the Registration Statement. The Registration Statement has been declared effective by the
Securities and Exchange Commission (the “SEC”) and is effective on the date hereof. A final prospectus
supplement is attached hereto as Exhibit A and will be delivered to the Investor as required by law.

 

(c)
The completion of the purchase and sale of the Securities (the “Closing”) shall take place remotely
by facsimile transmission or other electronic means as the parties may mutually agree, on May 1, 2019, or such other date as agreed
between the Company and the Investor. At the Closing, (i) the Investor shall pay the Subscription Amount by wire transfer of immediately
available funds to the Company to such bank account or accounts as shall be designated by the Company, (ii) the Company shall
cause the Securities to be delivered to the Investor and shall provide the Investor with a certificate signed by a duly authorized
officer confirming: (a) that the representations and warranties of the Company set forth in Section 2 are true and correct as
of the Closing and (b) the absence of any material adverse change in the Company, its business, or prospects since the date of
this Subscription Agreement, (iii) the Company shall deliver such certificates and opinions of counsel as are customary for registered
direct transactions as may be reasonably requested by the Investor and (iv) the Company will have entered into that Third Amendment
to the Credit Agreement by and between the Company, Wilmington Trust and Marathon Asset Management LP.

 

2.
Representations and Warranties of the Company. The Company represents and warrants as of the date hereof to the Investor
as follows:

 

(a)
it has the full corporate power and authority to enter into this Subscription Agreement and to perform all of its obligations
hereunder;

  

(b)
this Subscription Agreement has been duly authorized and executed by, and when delivered in accordance with the terms hereof,
will constitute a valid and binding agreement of, the Company enforceable in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights and remedies of creditors
generally or subject to general principles of equity;

 

(c)
the execution and delivery of this Subscription Agreement and the consummation of the transactions contemplated hereby do not
conflict with or result in a breach of the Company’s charter or by-laws, as amended or restated to date, or any other organizational
documents;

  

(d)
the Securities, when issued and paid for in accordance with the terms of this Subscription Agreement, will be duly authorized,
validly issued, fully paid and non-assessable;

 

     

     

    

 

(e)
the Registration Statement, at the time it became effective, did not, and as of the time hereof and as of the Closing, does not,
contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading;

 

(f)
this Subscription Agreement, the Registration Statement, the Securities, and any associated materials and statements materially
comply with all applicable laws, rules, and regulations, including without limitation United States federal and state securities
laws; and

 

(g)
the Securities are being offered and sold pursuant to the Company’s effective registration statement under the Securities
Act of 1933, as amended (the “Securities Act”), on Form S-3 (File No. 333-213100), effective as of December
23, 2016.

 

3.
Representations, Warranties and Acknowledgments of the Investor.

 

(a)
The Investor hereby represents and warrants as of the date hereof to the Company as follows:

 

(i)
it has the full right, power and authority to enter into this Subscription Agreement and to perform all of its obligations hereunder;

 

(ii)
this Subscription Agreement has been duly authorized and executed by the Investor and, when delivered in accordance with the terms
hereof, will constitute a valid and binding agreement of the Investor enforceable against the Investor in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the rights and remedies of creditors generally or subject to general principles of equity;

 

(iii)
the execution and delivery of this Subscription Agreement and the consummation of the transactions contemplated hereby do not
conflict with or result in a breach of the Investor’s governing or organizational documents;

 

(iv)
the Investor has had full access to the prospectus included in the Registration Statement and the Company’s periodic reports
and other information incorporated by reference therein, and was able to read, review, download and print such materials, if desired;

 

(v)
it has had no position, office or other material relationship within the past three years with the Company (which, for the avoidance
of doubt, excludes ownership of Securities);

 

(vi)
it is not a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) as of the Closing;

 

(vii)
the Investor has taken no action which would give rise to any claim by any person for brokerage commissions, finders’ fees
or the like relating to this Subscription Agreement or the transactions contemplated hereby;

 

(viii)
the Investor is not relying on the Company or any of its respective employees or agents with respect to the legal, tax, economic
and related considerations of an investment in the Securities, and the Investor has relied on the advice of, or has consulted
with, only its own advisors; and

 

(ix)
neither the Investor nor any group of investors (as identified in a public filing made with the SEC) of which the Investor is
a part in connection with the offering of the Securities, acquired, or obtained the right to acquire, twenty percent (20%) or
more of the Company’s common shares (or securities convertible into or exercisable for common shares) or the voting power
of the Company on a post-transaction basis.

  

    2

     

    

 

(b)
The Investor hereby also represents and warrants as of the date hereof to the Company that, other than the transactions contemplated
hereunder, the Investor has not, directly or indirectly, nor has any person acting on behalf of or pursuant to any understanding
with the Investor, executed any transactions in securities of the Company, including “short sales” as defined in Rule
200 of Regulation SHO under the Exchange Act (“Short Sales”), during the period commencing from the
time that the Investor first became aware of the proposed transactions contemplated hereunder until the date hereof (the “Discussion
Time”). The Investor has maintained the confidentiality of all disclosures made to it in connection with this transaction
(including the existence and terms of this transaction).

  

(c)
The Investor acknowledges and agrees that the issuance by the Company of the Securities will be conditional upon receipt of all
necessary regulatory approvals, including those of the Nasdaq Capital Market.

   

4.
Miscellaneous.

 

(a)
Each party shall pay the fees and expenses of its advisors, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance of this Subscription Agreement. The Company shall pay all transfer
agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the
Company), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Investor.

 

(b)
This Subscription Agreement constitutes the entire understanding and agreement among the parties with respect to its subject matter,
and there are no agreements or understandings with respect to the subject matter hereof which are not contained in this Subscription
Agreement.

 

(c)
This Subscription Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and
the same instrument and shall become effective when counterparts have been signed by each party and delivered to the other party
hereto, it being understood that the parties need not sign the same counterpart. Execution may be made by delivery by facsimile
or by e-mail delivery of a “.pdf” format data file.

 

(d)
The provisions of this Subscription Agreement are severable and, in the event that any court or officials of any regulatory agency
of competent jurisdiction shall determine that any one or more of the provisions or part of the provisions contained in this Subscription
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of this Subscription Agreement and this Subscription
Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision,
had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible,
so long as such construction does not materially adversely affect the economic rights of either party hereto.

  

(e)
All communications hereunder, except as may be otherwise specifically provided herein, shall be in writing and shall be mailed,
hand delivered, sent by a recognized overnight courier or sent via facsimile or by e-mail delivery and confirmed by letter, to
the party to whom it is addressed at the following addresses or such other address as such party may advise the other in writing:

 

To
the Company: as set forth on the signature page hereto.

 

To
the Investor: as set forth on the Investor’s signature page hereto.

 

All
notices hereunder shall be effective upon receipt by the party to which it is addressed.

 

(f)
No provision of this Subscription Agreement may be waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and the Investor, in the case of a waiver, by the party against whom enforcement
of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Subscription
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 either party to exercise any right hereunder in
any manner impair the exercise of any such right.

 

(g)
This Subscription Agreement shall be governed by and interpreted in accordance with the laws of the State of New York for contracts
to be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws. 

 

[Remainder
of Page Intentionally Left Blank]

 

    3

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

 

	 	WORKHORSE GROUP INC.
	 	 	 
	 	By:	                   
	 	Name: Duane Hughes
	 	Title: CEO
	 	Address: 100 Commerce Dr., Loveland, Ohio 45140

 

[Company
Signature Page to Subscription Agreement]

 

 

    4

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

 

Name
of Investor: _____________________________________________________________

 

Signature
of Authorized Signatory of Investor: _______________________________________

 

Name
of Authorized Signatory: _____________________________________________________

 

Title
of Authorized Signatory: _____________________________________________________

 

Email
Address of Authorized Signatory: _____________________________________________

 

Facsimile
Number of Authorized Signatory: __________________________________________

 

Address
for Notice to Investor:

 

Address
for Delivery of Securities to Investor (if not same as address for notice) / DWAC Account Number:

 

Subscription
Amount: _____________

 

Price
per Common Share: $_____________

 

Common
Shares: _____________

 

EIN
Number:

 

[Investor
Signature Page to Subscription Agreement]

 

    5

     

    

 

Exhibit
A

 

AttachedExhibit
10.2

  

THIRD
AMENDMENT TO CREDIT AGREEMENT

 

This
THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made and entered into as of April 30, 2019
by and among Workhorse Group Inc., a Nevada corporation (the “Borrower”), Wilmington Trust, National Association,
in its capacity as agent (the “Agent”), and the Lenders (as defined below) party hereto.

 

WHEREAS,
the Borrower, the financial institutions from time to time party thereto as lenders (collectively, with their permitted successors
and assignees, the “Lenders”), and the Agent are party to that certain Credit Agreement, dated as of December
31, 2018 (as amended by that certain First Amendment to Credit Agreement, dated as of March 13, 2019, and that certain Second
Amendment to Credit Agreement, dated as of April 1, 2019, the “Credit Agreement”), pursuant to which the Lenders
have extended credit to the Borrower on the terms set forth therein;

 

WHEREAS,
pursuant to Section 10.1 of the Credit Agreement, the Credit Agreement may be amended by an instrument in writing signed by the
Borrower and the Lenders; and

 

WHEREAS,
the Borrower and the Lenders desire to amend certain provisions of the Credit Agreement.

 

NOW,
THEREFORE, in consideration of the mutual agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1. Definitions;
Loan Document. Capitalized terms used herein without definition shall have the meanings assigned to such terms in the
Credit Agreement. This Amendment shall constitute a Loan Document for all purposes of the Credit Agreement and the other Loan
Documents.

 

2. Amendment
to Section 7.19.1. Section 7.19.1 of the Credit Agreement is hereby amended and restated as follows:

 

“7.19.1
Liquidity. Not suffer or permit the Liquidity of the Borrower and its Subsidiaries to be less than $4,000,000 at any time
at or after May 31, 2019; provided that if Liquidity of the Borrower and its Subsidiaries is less than $4,000,000 at any
time at or after May 31, 2019, the Borrower shall provide written notice thereof to the Agent within one Business Day of such
occurrence, and, other than with respect to any such occurrence on the last day of any calendar month, if Liquidity of the Borrower
and its Subsidiaries is increased to $4,000,000 on or prior to five Business Days after such occurrence, then there shall be no
breach for such occurrence under this Section 7.19.1; provided further that if the Liquidity of the Borrower and its Subsidiaries
is less than $4,000,000 at any time prior to May 31, 2019, the Borrower shall provide written notice thereof to Agent within one
Business Day of each such occurrence.”

 

3. Conditions
to Effectiveness of Amendment. This Amendment shall become effective upon receipt by the Agent and the Lenders of counterpart
signatures to this Amendment duly executed and delivered by the Agent, the Lenders and the Borrower.

  

    -1-

     

    

 

4. Expenses.
The Borrower agrees to pay on demand all expenses of the Lender (including, without limitation, the fees and out-of-pocket expenses
of Covington & Burling LLP, counsel to the Lenders, and Duane Morris LLP, counsel to the Agent) incurred in connection with
the negotiation, preparation, execution and delivery of this Amendment.

 

5. Representations
and Warranties. The Borrower represents and warrants to the Lenders and the Agent as follows:

 

(a) After
giving effect to this Amendment, the representations and warranties of the Loan Parties contained in the Credit Agreement or any
other Loan Document shall be true and correct in all material respects (without duplication of any materiality qualifier contained
therein) as of the date hereof (or as of a specific earlier date if such representation or warranty expressly relates to an earlier
date).

 

(b) After
giving effect to this Amendment, no Default or Event of Default under the Credit Agreement is continuing.

 

6. No
Implied Amendment or Waiver. Except as expressly set forth in this Amendment, this Amendment shall not, by implication
or otherwise, limit, impair, constitute a waiver of or otherwise affect any rights or remedies of the Agent or the Lenders under
the Credit Agreement or the other Loan Documents, or alter, modify, amend or in any way affect any of the terms, obligations or
covenants contained in the Credit Agreement or the other Loan Documents, all of which shall continue in full force and effect.
Nothing in this Amendment shall be construed to imply any willingness on the part of the Agent or the Lenders to agree to or grant
any similar or future amendment, consent or waiver of any of the terms and conditions of the Credit Agreement or the other Loan
Documents.

 

    -2-

     

    

 

7. Release.
The Borrower hereby acknowledges and agrees that: (a) to its knowledge neither it nor any of its Affiliates have any claim or
cause of action against any Lender or the Agent (or any of their respective Affiliates, officers, directors, employees, attorneys,
consultants or agents) under the Credit Agreement as of the date hereof and (b) to its knowledge, as of the date hereof, the Lenders
and the Agent have heretofore properly performed and satisfied in a timely manner all of their respective obligations to the Borrower
under the Credit Agreement. Notwithstanding the foregoing, the Agent and the Lenders wish to eliminate any possibility that any
past conditions, acts, omissions, events or circumstances would impair or otherwise adversely affect any of the Agent’s
or the Lenders’ rights, interests and/or remedies under the Credit Agreement. Accordingly, for and in consideration of the
agreements contained in this Amendment and other good and valuable consideration, the Borrower (for itself and its Affiliates
and the successors and assigns of each of the foregoing) (each a “Releasor” and collectively, the “Releasors”)
does hereby fully, finally, unconditionally and irrevocably release and forever discharge the Agent and the Lenders and each of
their respective Affiliates, officers, directors, employees, attorneys, consultants and agents (each a “Released Party”
and collectively, the “Released Parties”) from any and all debts, claims, obligations, damages, costs, attorneys’
fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, whether known or unknown, contingent
or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under contract, tort, statute
or otherwise, in each case that exist or have occurred on or prior to the date of this Amendment which any Releasor has heretofore
had or now shall or may have against any Released Party by reason of any act, omission or thing whatsoever done or omitted to
be done, except for a Released Party’s gross negligence or willful misconduct as determined by a final, nonappealable judgment
of a court of competent jurisdiction, prior to the date hereof arising out of, connected with or related in any way to the Credit
Agreement, or any act, event or transaction related or attendant thereto, or the Agent’s or the Lenders’ agreements
contained therein, or the possession, use, operation or control in connection therewith of any of the assets of the Borrower,
or the making of any advance thereunder, or the management of such advance, in each case on or prior to the date of this Amendment.

 

8. Counterparts.
This Amendment may be executed by the parties hereto in several counterparts, each of which shall be an original and all of which
shall constitute together but one and the same agreement. Delivery of an executed counterpart of a signature page of this Amendment
by e-mail (e.g., “pdf” or “tiff”) or fax transmission shall be effective as delivery of a manually executed
counterpart of this Amendment.

 

9. Governing
Law. THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE PREPARED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

[Remainder
of Page Intentionally Left Blank.]

  

    -3-

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly
authorized as of the day and year first above written.

  

	WORKHORSE GROUP INC.

as the Borrower

	 	 
	By:	 /s/ Duane A. Hughes	 
	Name:	Duane A. Hughes	 
	Title:	CEO	 

 

	MARATHON STRUCTURED PRODUCT STRATEGIES FUND, LP

MARATHON BLUE GRASS CREDIT FUND, LP

MARATHON CENTRE STREET PARTNERSHIP, L.P.

TRS CREDIT FUND, LP
 as Lenders

 

By: Marathon Asset Management LP, the investment

 advisor to each of the entities listed above

	 	 
	By:	/s/ Louis Hanover	 
	Name: 	Louis Hanover	 
	Title:	CIO, Co-Managing Partner	 

 

	WILMINGTON TRUST, NATIONAL ASSOCIATION
 as the Agent
	 	 
	By:	/s/ Jamie Roseberg	 
	Name: 	Jamie Roseberg	 
	Title:	Banking Officer	 

  

Signature
Page to Third Amendment to Credit Agreement

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