Document:

Exhibit 10.1

 

SECURITIES
PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of June 30, 2020, is by and among Workhorse
Group Inc., a Nevada corporation with offices located at 100 Commerce Drive, Loveland, Ohio 45140 (the “Company”),
and each of the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively,
the “Buyers”).

 

RECITALS

 

A. The
Company has authorized a new series of 4.50% Senior Secured Convertible Notes in the form attached hereto as Exhibit A
(the “Convertible Notes”), which Convertible Notes shall be convertible into shares of the Company’s
common stock, par value $0.001 per share (together with any capital stock into which such common stock shall have been changed
or any share capital resulting from a reclassification of such common stock, the “Common Stock”) (such underlying
shares of Common Stock issuable pursuant to the terms of the Convertible Notes, including, without limitation, upon conversion,
redemption, payment of interest or otherwise, collectively, the “Conversion Shares”).

 

B. The
Company has authorized the issuance of shares of its Common Stock to the Buyers in connection with this Agreement.

 

C. Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the aggregate
principal amount of Convertible Notes set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers.

 

D. At
the Closing (as defined below), the parties hereto shall execute and deliver a Security Agreement, in the form attached hereto
as Exhibit B (the “Security Agreement”), pursuant to which the Company has agreed to grant a
first priority security interest to the holders of the Convertible Notes in substantially all of its assets.

 

E. At
or before the Closing, each of the officers and directors of the Company and Stephen S. Burns shall execute and deliver a Voting
Agreement, in the form attached hereto as Exhibit C (the “Voting Agreement”), pursuant to which
such parties shall agree to vote their shares of the Company’s Common Stock in favour of providing the Requisite Stockholder
Approval (as defined in the Convertible Notes).

 

F. The
Convertible Notes and Conversion Shares are collectively referred to herein as the “Securities.”

 

G. The
Company and each Buyer is executing and delivering this Agreement in reliance upon the effective registration statement on Form
S-3 (Commission File No. 333-237920) (the “Registration Statement”) filed by the Company with the United States
Securities and Exchange Commission (the “SEC”) pursuant to the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder (collectively, the “1933 Act”), for the registration of the Securities,
as such Registration Statement may be amended and supplemented from time to time (including pursuant to Rule 462(b) of the 1933
Act), including all documents filed as part thereof or incorporated by reference therein, and including all information deemed
to be a part thereof at the time of effectiveness pursuant to Rule 430B of the 1933 Act, and the prospectus supplement (the “Prospectus
Supplement”) complying with Rule 424(b) of the 1933 Act that is delivered by the Company to each Buyer in connection
with the execution and delivery of this Agreement, including the documents incorporated by reference therein, and that is filed
with the SEC.

 

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AGREEMENT

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:

 

		1.	PURCHASE
                                         AND SALE OF PURCHASEd SECURITIES.

 

(a) Purchase
of Purchased Securities. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the
Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on
the Closing Date the aggregate principal amount of Convertible Notes as is set forth opposite such Buyer’s name in column
(3) on the Schedule of Buyers (the “Purchased Securities”).

 

(b) Closing. 
The closing (the “Closing”) of the purchase of the Purchased Securities by the Buyers shall occur at the offices
of Latham & Watkins LLP, 885 Third Avenue, New York, NY 10022. The date and time of the Closing (the “Closing Date”)
shall be 10:00 a.m., New York time, on the first (1st) Business Day on which the conditions to the Closing set forth in Sections
6 and 7 below are satisfied or waived (or such other date as is mutually agreed to by the Company and each Buyer. As used herein
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York,
New York are authorized or required by law or executive order to close or be closed; provided, however,
for clarification, commercial banks in New York, New York shall not be deemed to be authorized or required by law or executive
order to close or be closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental
authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in New York, New
York are open for use by customers on such day.

 

(c) Securities
Purchase Price.  The aggregate purchase price for the Purchased Securities to be purchased by each Buyer (the “Purchase
Price”) shall be the amount set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers.

 

(d) Form of
Payment for Purchased Securities.  On the Closing Date, (i) each Buyer shall pay its respective Purchase Price to
the Company for the Purchased Securities to be issued and sold to such Buyer at the Closing set forth opposite such Buyer’s
name in column (4) on the Schedule of Buyers on the Closing Date, by wire transfer of immediately available funds in accordance
with the Flow of Funds Letter (as defined below) and (ii) the Company shall deliver to each Buyer the aggregate principal
amount of Convertible Notes as is set forth opposite such Buyer’s name in column (3) of the Schedule of Buyers, duly executed
on behalf of the Company and registered in the name of such Buyer or its designee.

 

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		2.	BUYER’S
                                         REPRESENTATIONS AND WARRANTIES.

 

Each
Buyer, severally and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof
and as of the Closing Date:

 

(a) Organization;
Authority.  Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.

 

(b) Validity;
Enforcement.  This Agreement and the Security Agreement have been duly and validly authorized, executed and delivered
on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer
in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally,
the enforcement of applicable creditors’ rights and remedies.

 

(c) No
Conflicts.  The execution, delivery and performance by such Buyer of this Agreement and the Security Agreement and the
consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the
organizational documents of such Buyer, or (ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities laws) applicable to such Buyer, except in the case
of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which could not, individually or
in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its obligations
hereunder.

 

		3.	REPRESENTATIONS
                                         AND WARRANTIES OF THE COMPANY.

 

The
Company represents and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:

 

(a) Compliance
with Registration Requirements. The Registration Statement has become effective under the 1933 Act. The Company has complied,
to the SEC’s satisfaction, with all requests of the SEC for additional or supplemental information, if any. No stop order
suspending the effectiveness of the Registration Statement is in effect and no proceedings for such purpose have been instituted
or are pending or, to the knowledge of the Company, are contemplated or threatened by the SEC. At the time the Company’s
Annual Report on Form 10-K for the year ended December 31, 2019 (the “Annual Report”) was filed with the SEC,
or, if later, at the time the Registration Statement was originally filed with the SEC, the Company met the then-applicable requirements
for use of Form S-3 under the 1933 Act. The documents incorporated or deemed to be incorporated by reference in the Registration
Statement, at the time they were or hereafter are filed with the SEC, or became effective under the Securities Exchange Act of
1934, as amended (the “1934 Act”), as the case may be, complied and will comply in all material respects with
the requirements of the 1934 Act.

 

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(b) Disclosure.
The Prospectus Supplement when filed complied in all material respects with the 1933 Act. Each of the Registration Statement and
any post-effective amendment thereto, at the time it became or becomes effective, complied and will comply in all material respects
with the 1933 Act and did not and will 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. The Prospectus Supplement (including any Prospectus
wrapper), as of its date, did not, and at the Closing Date, will not, contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading. There are no contracts or other documents required to be described in the Prospectus Supplement or
to be filed as an exhibit to the Registration Statement which have not been described or filed as required. No event, liability,
development or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the Company, any
of its Subsidiaries (as defined below) or any of their respective businesses, properties, liabilities, prospects, operations (including
results thereof) or condition (financial or otherwise), that (i) would be required to be disclosed by the Company under applicable
securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of
any shares of Common Stock and which has not been publicly announced, (ii) could have a material adverse effect on any Buyer’s
investment hereunder or (iii) could have a Material Adverse Effect (as defined below).

 

(c) Organization
and Qualification.  Each of the Company and each of its Subsidiaries are entities duly organized and validly existing
and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to
own their properties and to carry on their business as now being conducted.  Each of the Company and each of its Subsidiaries
is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect (as defined below). 
As used in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business,
properties, assets, liabilities, operations (including results thereof), or condition (financial or otherwise) of the Company
or its Subsidiaries, taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction Documents
or any other agreements or instruments to be entered into in connection herewith or therewith or (iii) the authority or ability
of the Company or any of its Subsidiaries to perform any of their respective obligations under any of the Transaction Documents. 
Other than the Persons (as defined below) set forth on Schedule 3(c), the Company has no significant Subsidiaries
within the meaning of Rule 1-02(w) of Regulation S-X.  “Subsidiaries” means any Person in which
the Company, directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity or similar interest
of such Person or (II) controls or operates all or any part of the business, operations or administration of such Person,
and each of the foregoing, is individually referred to herein as a “Subsidiary.”  For purposes of this
Agreement, “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization, any other entity and any Governmental Entity (as defined below) or any department or
agency thereof.

 

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(d) Authorization;
Enforcement; Validity.  The Company has the requisite power and authority to enter into and perform its obligations under
this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. 
Each Subsidiary has the requisite power and authority to enter into and perform its obligations under the Transaction Documents
to which it is a party.  The execution and delivery of this Agreement and the other Transaction Documents by the Company,
and the consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Convertible Notes and the reservation for issuance and issuance of the Conversion Shares issuable
upon conversion of the Convertible Notes) have been duly authorized by the Company’s board of directors, and (other than
(i) the filing with the SEC of the Prospectus Supplement in accordance with the requirements of this Agreement, (ii) any
filings as may be required by any state securities agencies and (iii) a Listing of Additional Shares Notification with the
Principal Market (as defined below) (collectively, the “Required Filings”)) no further filing, consent or authorization
is required by the Company, its Subsidiaries, their respective boards of directors or their stockholders or other governing body. 
This Agreement has been, and the other Transaction Documents to which it is a party will be prior to the Closing, duly executed
and delivered by the Company, and each constitutes the legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with its respective terms, except as such enforceability may be limited by general principles of equity
or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally,
the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution
may be limited by federal or state securities law.  “Transaction Documents” means, collectively, this
Agreement, the Convertible Notes, the Security Agreement, the Voting Agreement, the Irrevocable Transfer Agent Instructions (as
defined below) and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection
with the transactions contemplated hereby and thereby, as may be amended from time to time.

 

(e) Issuance
of Securities.  The issuance of the Securities is duly authorized and, when issued and delivered in accordance with the
terms of the Transaction Documents, the Securities shall be validly issued, fully paid and non-assessable and free from all preemptive
or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security
interests and other encumbrances (collectively “Liens”) with respect to the issuance thereof.  As of the
Closing, the Company shall have reserved from its duly authorized capital stock not less than 20,000,000 shares for issuance upon
the issuance of the Conversion Shares.  Upon issuance or conversion in accordance with the Convertible Notes, the Conversion
Shares when issued, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights or Liens
with respect to the issuance thereof, with the holders being entitled to all rights accorded to a holder of Common Stock.

 

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(f) No
Conflicts.  The execution, delivery and performance of the Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Convertible
Notes and the Conversion Shares and the reservation for issuance of the Conversion Shares) will not (i) result in a violation
of the Certificate of Incorporation (as defined below), Bylaws (as defined below), certificate of formation, memorandum of association,
articles of association, bylaws or other organizational documents of the Company or any of its Subsidiaries, or any capital stock
or other securities of the Company or any of its Subsidiaries, (ii)  conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries
is a party, or (iii) assuming the accuracy of the representations and warranties in Section 2, result in a violation
of any law, rule, regulation, order, judgment or decree (including, without limitation, foreign, federal and state securities
laws and regulations and the rules and regulations of the Nasdaq Capital Market (the “Principal Market”)
and including all applicable foreign, federal and state laws, rules and regulations) applicable to the Company or any of
its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, assuming, with
respect to clauses (ii) and (iii) above, the making of the Required Filings and except in the case of clauses (ii) and
(iii) above, for such breaches, violations or conflicts as would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect.

 

(g) Consents. 
Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or
registration with (other than the Required Filings and such consents, authorizations, filings or registrations the absence of
which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect), any Governmental
Entity or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its
respective obligations under or contemplated by the Transaction Documents, in each case, in accordance with the terms hereof or
thereof.  To the Company’s knowledge, other than the Required Filings, all consents, authorizations, orders, filings
and registrations which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will
be obtained or effected on or prior to the Closing Date, and neither the Company nor any of its Subsidiaries are aware of any
facts or circumstances which might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration,
application or filings contemplated by the Transaction Documents.  The Company is not in violation of the requirements of
the Principal Market and has no knowledge of any facts or circumstances which could reasonably lead to delisting or suspension
of the Common Stock.  “Governmental Entity” means any nation, state, county, city, town, village, district,
or other political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government, governmental or
quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any
court or other tribunal), multi-national organization or body; or body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature or instrumentality of any of
the foregoing, including any entity or enterprise owned or controlled by a government or a public international organization or
any of the foregoing.

 

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(h) Acknowledgment
Regarding Buyer’s Purchase of Securities.  The Company acknowledges and agrees that each Buyer is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
hereby and thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an
“affiliate” (as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge,
a “beneficial owner” of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of
the 1934 Act).  The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company
or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated
hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. 
The Company further represents to each Buyer that the Company’s and each Subsidiary’s decision to enter into the Transaction
Documents to which it is a party has been based solely on the independent evaluation by the Company, each Subsidiary and their
respective representatives.

 

(i) Placement
Agent.  The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees,
or brokers’ commissions (other than for Persons engaged by any Buyer or its investment advisor) relating to or arising out
of the transactions contemplated hereby.  The Company shall pay, and hold each Buyer harmless against, any liability, loss
or expense (including, without limitation, attorney’s fees and reasonable and documented out-of-pocket expenses) arising
in connection with any such claim.  Neither the Company nor any of its Subsidiaries has engaged any placement agent or other
agent in connection with the offer or sale of the Securities.

 

(j) No
Integrated Offering.  None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their
behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under
circumstances that would require approval of stockholders of the Company in connection with the offering of the Securities for
purposes of any applicable stockholder approval provisions, including, without limitation, under the rules and regulations
of any exchange or automated quotation system on which any of the securities of the Company are listed or designated for quotation. 
Except as contemplated by the terms of this Agreement, none of the Company, its Subsidiaries, their affiliates nor any Person
acting on their behalf will take any action or steps that would cause the offering of any of the Securities to be integrated with
other offerings of securities of the Company.

 

(k) Dilutive
Effect.  The Company understands and acknowledges that the number of Conversion Shares will increase in certain circumstances. 
The Company further acknowledges that its obligation to issue the Conversion Shares pursuant to the terms of the Convertible Notes
in accordance with this Agreement is absolute and unconditional regardless of the dilutive effect that such issuance may have
on the ownership interests of other stockholders of the Company.

 

(l) Application
of Takeover Protections.  The Company and its board of directors have taken or will take prior to the Closing Date all
necessary action, if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination,
poison pill, stockholder rights plan or other similar anti-takeover provision under the Certificate of Incorporation, Bylaws or
other organizational documents or the laws of the jurisdiction of its incorporation which is or could become applicable to
any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance
of the Securities and any Buyer’s ownership of the Securities. 

 

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(m) Financial
Statements.  During the one (1) year prior to the date hereof, the Company has timely filed all reports, schedules,
forms, proxy statements, statements and other documents required to be filed by it with the SEC (other than Section 16 ownership
filings) pursuant to the reporting requirements of the 1934 Act (reports filed in compliance with the time period specified in
Rule 12b-25 promulgated under the 1934 Act shall be considered timely for this purpose) (all of the foregoing filed prior
to the date hereof and all exhibits and appendices included therein and financial statements, notes and schedules thereto and
documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”).  The
Company has delivered or has made available to the Buyers or their respective representatives true, correct and complete copies
of each of the SEC Documents not available on the EDGAR system.  Except as set forth on Schedule 3(m), as of their
respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading.  As of their respective dates, the financial statements of the Company included in the SEC Documents complied
in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with
respect thereto as in effect as of the time of filing.  Such financial statements have been prepared in accordance with generally
accepted accounting principles (“GAAP”), consistently applied, during the periods involved (except (i) as
may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements,
to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects
the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either
individually or in the aggregate).  No other information provided by or on behalf of the Company to any of the Buyers which
is not included in the SEC Documents (including, without limitation, information referred to in the disclosure schedules to this
Agreement) contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the
statements therein not misleading, in the light of the circumstance under which they are or were made.  The Company is not
currently contemplating to amend or restate any of the financial statements (including, without limitation, any notes or any letter
of the independent accountants of the Company with respect thereto) included in the SEC Documents (the “Financial Statements”),
nor is the Company currently aware of facts or circumstances which would require the Company to amend or restate any of the Financial
Statements, in each case, in order for any of the Financials Statements to be in material compliance with GAAP and the rules and
regulations of the SEC.  The Company has not been informed by its independent accountants that they recommend that the Company
amend or restate any of the Financial Statements or that there is any need for the Company to amend or restate any of the Financial
Statements.

 

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(n) Absence
of Certain Changes.  Since the date of the Company’s most recent audited financial statements contained in a Form 10-K,
except as specifically set forth in a subsequent SEC Document filed prior to the date hereof, there has been no material adverse
change and no material adverse development in the business, assets, liabilities, properties, operations (including results thereof),
condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries.  Since the date of the Company’s
most recent audited financial statements contained in a Form 10-K, except as set forth on Schedule 3(n) or as
specifically set forth in a subsequent SEC Document filed prior to the date hereof, neither the Company nor any of its Subsidiaries
has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary
course of business or (iii) made any capital expenditures, individually or in the aggregate, outside of the ordinary course
of business.  Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law
or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or
any Subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy
proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so.  The Company and its Subsidiaries,
individually and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions contemplated
hereby to occur at the Closing, will not be Insolvent (as defined below).  For purposes of this Section 3(l), “Insolvent”
means, (i) with respect to the Company and its Subsidiaries, on a consolidated basis, (A) the present fair saleable
value of the Company’s and its Subsidiaries’ assets is less than the amount required to pay the Company’s and
its Subsidiaries’ total Indebtedness (as defined below), (B) the Company and its Subsidiaries are unable to pay their
debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the
Company and its Subsidiaries intend to incur or believe that they will incur debts that would be beyond their ability to pay as
such debts mature; and (ii) with respect to the Company and each Subsidiary, individually, (A) the present fair saleable
value of the Company’s or such Subsidiary’s (as the case may be) assets is less than the amount required to pay its
respective total Indebtedness, (B) the Company or such Subsidiary (as the case may be) is unable to pay its respective debts
and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the
Company or such Subsidiary (as the case may be) intends to incur or believes that it will incur debts that would be beyond its
respective ability to pay as such debts mature.

 

(o) Regulatory
Permits.  During the two years prior to the date hereof, (i) the Common Stock has been listed or designated for
quotation on the Principal Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market
and (iii) except as set forth on Schedule 3(o), the Company has received no communication, written or oral, from the
SEC or the Principal Market regarding the suspension or delisting of the Common Stock from the Principal Market.  The Company
and each of its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities
necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits
would not reasonably be likely to have, individually or in the aggregate, a Material Adverse Effect, and neither the Company nor
any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate,
authorization or permit.

 

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(p) Foreign
Corrupt Practices.  Neither the Company, any of the Company’s Subsidiaries or any director, officer, employee,
nor, to the Company’s knowledge, any agent or any other person acting for or on behalf of the foregoing (individually and
collectively, a “Company Affiliate”) have violated the U.S. Foreign Corrupt Practices Act or any other applicable
anti-bribery or anti-corruption laws, nor, to the Company’s knowledge, has any Company Affiliate offered, paid, promised
to pay, or authorized the payment of any money, or offered, given, promised to give, or authorized the giving of anything of value,
to any officer, employee or any other person acting in an official capacity for any Governmental Entity to any political party
or official thereof or to any candidate for political office (individually and collectively, a “Government Official”)
or to any person under circumstances where such Company Affiliate knew or was aware of a high probability that all or a portion
of such money or thing of value would be offered, given or promised, directly or indirectly, to any Government Official, for the
purpose of:

 

(i) (A) influencing
any act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official to do
or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such
Government Official to influence or affect any act or decision of any Governmental Entity, or

 

(ii) assisting
the Company or its Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company or its Subsidiaries.

 

(q) Sarbanes-Oxley
Act.  Except as disclosed in the SEC Documents, the Company and each Subsidiary is in material compliance with any
and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and any and all applicable rules and regulations
promulgated by the SEC thereunder.

 

(r) Transactions
With Affiliates.  Except as set forth on Schedule 3(r), no current or former employee, partner, director, officer
or shareholder (direct or indirect) of the Company or its Subsidiaries, or any associate, or, to the knowledge of the Company,
any affiliate of any thereof, or any relative with a relationship no more remote than first cousin of any of the foregoing, is
presently, or has ever been, (i) a party to any transaction with the Company or its Subsidiaries (including any contract, agreement
or other arrangement providing for the furnishing of services by, or rental of real or personal property from, or otherwise requiring
payments to, any such director, officer or shareholder or such associate or affiliate or relative Subsidiaries (other than for
ordinary course services as employees, officers or directors of the Company or any of its Subsidiaries)) or (ii) the direct or
indirect owner of an interest in any corporation, firm, association or business organization which is a competitor, supplier or
customer of the Company or its Subsidiaries (except for a passive investment (direct or indirect) in less than 5% of the common
stock or ordinary shares, as applicable, of a company whose securities are traded on or quoted through an Eligible Market (as
defined below)), nor does any such Person receive income from any source other than the Company or its Subsidiaries which relates
to the business of the Company or its Subsidiaries or should properly accrue to the Company or its Subsidiaries. No employee,
officer, shareholder or director of the Company or any of its Subsidiaries or member of his or her immediate family is indebted
to the Company or its Subsidiaries, as the case may be, nor is the Company or any of its Subsidiaries indebted (or committed to
make loans or extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement
for reasonable expenses incurred on behalf of the Company, and (iii) for other standard employee benefits made generally available
to all employees or executives (including share option agreements outstanding under any share option plan approved by the Board
of Directors of the Company).

 

    10

     

    

 

(s) Equity
Capitalization.

 

(i) Authorized
and Outstanding Capital Stock.  As of the date hereof, the authorized capital stock of the Company consists of (A) 250,000,000
shares of Common Stock, of which, 91,153,943 are issued and outstanding and 25,256,163 shares are reserved for issuance pursuant
to Convertible Securities (as defined below) (other than the Convertible Notes) exercisable or exchangeable for, or convertible
into, shares of Common Stock, and (B) 75,000,000 shares of Preferred Stock, of which (I) 10,000 are designated Series A Preferred
Stock, none of which are issued and outstanding, and (II) 1,250,000 are designated Series B Preferred Stock, all of which are
issued and outstanding.  No shares of Common Stock are held in the treasury of the Company.

 

(ii) Valid
Issuance; Available Shares; Affiliates.  All of such outstanding shares are duly authorized and have been, or upon issuance
will be, validly issued and are fully paid and nonassessable.  Schedule 3(s)(ii) sets forth the number of shares
of Common Stock that are (A) reserved for issuance pursuant to Convertible Securities (other than the Convertible Notes)
and (B) that are, as of the date hereof, owned by Persons who are “affiliates” (as defined in Rule 405 of
the 1933 Act (except pursuant to the Registration Rights Agreement, dated December 31, 2018, among the Company, Marathon Structured
Product Strategies Fund, LP, Marathon Blue Grass Credit Fund, LP, Marathon Centre Street Partnership, L.P. and TRS Credit Fund,
LP) and calculated based on the assumption that only officers, directors and holders of at least 10% of the Company’s issued
and outstanding Common Stock are “affiliates” without conceding that any such Persons are “affiliates”
for purposes of federal securities laws) of the Company or any of its Subsidiaries.  Except as set forth on Schedule 3(s)(ii),
to the Company’s knowledge, no Person owns 10% or more of the Company’s issued and outstanding shares of Common Stock
(calculated based on the assumption that all Convertible Securities, whether or not presently exercisable or convertible, have
been fully exercised or converted (as the case may be) taking account of any limitations on exercise or conversion (including
“blockers”) contained therein without conceding that such identified Person is a 10% stockholder for purposes of federal
securities laws).

 

(iii) Existing
Securities; Obligations.  Except as set forth on Schedule 3(s)(iii): (A) none of the Company’s or any
Subsidiary’s shares, interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered
or permitted by the Company or any Subsidiary; (B) other than stock options and restricted stock awarded to employees of
the Company under equity incentive plans adopted by the Company, there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares,
interests or capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable
for, any shares, interests or capital stock of the Company or any of its Subsidiaries; (C) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933
Act; (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption
or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of
its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (E) there are no
securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities;
and (F) neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement.

 

    11

     

    

 

(iv) Organizational
Documents.  The Company has furnished to the Buyers true, correct and complete copies of the Company’s Certificate
of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and
the Company’s bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of
all Convertible Securities and the material rights of the holders thereof in respect thereto.

 

(t) Indebtedness
and Other Contracts.  Except as set forth on Schedule 3(t), neither the Company nor any of its Subsidiaries (i) has
any material outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments
evidencing Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may
become bound, (ii) has any financing statements securing obligations in any amounts filed in connection with the Company
or any of its Subsidiaries; (iii) is in violation of any term of, or in default under, any contract, agreement or instrument
relating to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in
a Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the
performance of which, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect. 
Neither the Company nor any of its Subsidiaries have any liabilities or obligations required to be disclosed in the SEC Documents
which are not so disclosed in the SEC Documents, other than those incurred in the ordinary course of the Company’s or its
Subsidiaries’ respective businesses and which, individually or in the aggregate, do not or could not have a Material Adverse
Effect.  For purposes of this Agreement:  (x) “Indebtedness” of any Person means, without duplication,
(A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase
price of property or services (including, without limitation, “capital leases” in accordance with GAAP) (other than
trade payables entered into in the ordinary course of business consistent with past practice), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced
by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such
indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited
to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in
connection with GAAP, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness
referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract
rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the
payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the
kinds referred to in clauses (A) through (G) above; and (y) “Contingent Obligation” means, as
to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any Indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole
or in part) against loss with respect thereto.

 

    12

     

    

 

(u) Litigation. 
There is no material action, suit, arbitration, proceeding, inquiry or investigation before or by the Principal Market, any court,
public board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s or its Subsidiaries’
officers or directors, whether of a civil or criminal nature or otherwise, in their capacities as such, except as set forth in
Schedule 3(u).  To the knowledge of the Company, no director, officer or employee of the Company or any of its Subsidiaries
has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation of litigation.  Without limitation
of the foregoing, there has not been, and to the knowledge of the Company, there is not pending, contemplated or anticipated,
any inquiry or investigation by the SEC involving the Company, any of its Subsidiaries or any current or former director or officer
of the Company or any of its Subsidiaries.  The SEC has not issued any stop order or other order suspending the effectiveness
of any registration statement filed by the Company under the 1933 Act or the 1934 Act.  After reasonable inquiry of its officers
(as defined in Rule 16a-1(f) promulgated under the 1934 Act) and members of its board of directors, the Company is not
aware of any fact which might result in or form the basis for any such action, suit, arbitration, investigation, inquiry or other
proceeding.  Neither the Company nor any of its Subsidiaries is subject to any order, writ, judgment, injunction, decree,
determination or award of any Governmental Entity.

 

(v) Insurance. 
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. Neither the Company nor any of its Subsidiaries has been refused any insurance coverage sought
or applied for, and neither the Company nor any of its Subsidiaries has any reason to believe that it will be unable to renew
its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

    13

     

    

 

(w) Employee
Relations.  Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs
any member of a union.  The Company and its Subsidiaries believe that their relations with their employees are good. 
No executive officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company
or any of its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any
such Subsidiary or otherwise terminate such officer’s employment with the Company or any such Subsidiary.  To the knowledge
of the Company, no executive officer or other key employee of the Company or any of its Subsidiaries is, or is now expected to
be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each
such executive officer or other key employee (as the case may be) does not subject the Company or any of its Subsidiaries to any
liability with respect to any of the foregoing matters.  The Company and its Subsidiaries are in material compliance with
all applicable federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and
benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually
or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

(x) Title.
Each of the Company and its Subsidiaries holds good title to all real property, leases in real property, facilities or other interests
in real property owned or held by the Company or any of its Subsidiaries that is material to the business of the Company (the
“Real Property”).  Except as set forth on Schedule 3(x), the Real Property is free and clear of
all Liens and is not subject to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations
of any nature except for (a) Liens for current taxes not yet due, (b) zoning laws and other land use restrictions that
do not impair the present or anticipated use of the property subject thereto and (c) those that are not likely to result
in a Material Adverse Effect.  Any Real Property held under lease by the Company or any of its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere in any material respect
with the use made and proposed to be made of such property and buildings by the Company or any of its Subsidiaries.

 

(y) Fixtures
and Equipment.  Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold interest
in, the tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are
used by the Company or its Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”).
The Fixtures and Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which
they are being put, are not in need of maintenance or repairs except for ordinary, routine maintenance and repairs and are sufficient
for the conduct of the Company’s and/or its Subsidiaries’ businesses (as applicable) in the manner as conducted prior
to the Closing. Except as set forth on Schedule 3(y), each of the Company and its Subsidiaries owns all of its Fixtures
and Equipment free and clear of all Liens except for (a) Liens for current taxes not yet due and (b) zoning laws and other land
use restrictions that do not impair the present or anticipated use of the property subject thereto.

 

    14

     

    

 

(z) Intellectual
Property Rights.  The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications
and registrations therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses
as now conducted.  Except as set forth on Schedule 3(z), the Company does not have any knowledge of any infringement
by the Company or its Subsidiaries of Intellectual Property Rights of others.  Except as set forth on Schedule 3(z),
there is no claim, action or proceeding being made or brought, or to the knowledge of the Company or any of its Subsidiaries,
being threatened, against the Company or any of its Subsidiaries regarding its Intellectual Property Rights, except where such
claim, action or proceeding is not reasonably likely to result in a Material Adverse Effect.  Neither the Company nor any
of its Subsidiaries has received any notice alleging any such infringement or claim, action or proceeding.

 

(aa)Environmental
Laws.  (i) The Company and its Subsidiaries (A) are in compliance with any and all Environmental Laws (as defined
below), (B) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (C) are in compliance with all terms and conditions of any such permit, license or
approval where, except in each of the foregoing clauses (A), (B) and (C), where the failure to so comply or having such permits,
licenses or other approval would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 
The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection
of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

 

(ii) No
Hazardous Materials:

 

(A) to
the Company’s knowledge, have been disposed of or otherwise released from any Real Property of the Company or any of its
Subsidiaries in violation of any Environmental Laws; or

 

(B) to
the Company’s knowledge, are present on, over, beneath, in or upon any Real Property or any portion thereof in quantities
that would constitute a violation of any Environmental Laws.  No prior use by the Company or any of its Subsidiaries of any
Real Property has occurred that violates any Environmental Laws, which violation would have a material adverse effect on the business
of the Company or any of its Subsidiaries.

 

(iii) To
the Company’s knowledge, neither the Company nor any of its Subsidiaries knows of any other person who or entity which has
stored, treated, recycled, disposed of or otherwise located on any Real Property any Hazardous Materials, including, without limitation,
such substances as asbestos and polychlorinated biphenyls.

 

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(iv)
 To the knowledge of the Company, none of the Real Property is on any federal or state
“Superfund” list or Liability Information System (“CERCLIS”) list or any state environmental agency
list of sites under consideration for CERCLIS, nor subject to any environmental related Liens.

 

(bb)Tax
Status.  The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income
and all other tax returns, reports and declarations required by any jurisdiction to which it is subject through the date of this
Agreement or have requested extensions thereof (except where the failure to file would not, individually or in the aggregate,
have a Material Adverse Effect) and (ii) has timely paid all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good
faith and for which reserves required by GAAP have been created in the financial statements of the Company or for cases in which
the failure to pay would not have a Material Adverse Effect.  There is no tax deficiency that has been determined adversely
to the Company or any of its Subsidiaries which has had a Material Adverse Effect, nor does the Company or its Subsidiaries have
any knowledge or notice of any tax deficiency which could reasonably be expected to be determined adversely to the Company or
its Subsidiaries and which could reasonably be expected to have a Material Adverse Effect.

 

(cc)Internal
Accounting and Disclosure Controls.  Except as disclosed in the SEC Documents, the Company and each of its Subsidiaries
maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the 1934 Act) that
is effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP, including that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets
or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the
recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals
and appropriate action is taken with respect to any difference.  The Company maintains disclosure controls and procedures
(as such term is defined in Rule 13a-15(e) under the 1934 Act) that are effective in ensuring that information required
to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and
reported, within the time periods specified in the rules and forms of the SEC, including, without limitation, controls and
procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is accumulated and communicated to the Company’s management, including its principal executive officer
or officers and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure. 
Since the filing of the Annual Report, neither the Company nor any of its Subsidiaries has received any notice or correspondence
from any accountant, Governmental Entity or other Person relating to any potential material weakness or significant deficiency
in any part of the internal controls over financial reporting of the Company or any of its Subsidiaries.

 

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(dd)Off
Balance Sheet Arrangements.  There is no transaction, arrangement, or other relationship between the Company or any of
its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its
1934 Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

 

(ee)Investment
Company Status.  The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,”  or a company controlled by an “investment company” as such term is defined in the Investment
Company Act of 1940, as amended.

 

(ff)Acknowledgement
Regarding Buyers’ Trading Activity.  It is understood and acknowledged by the Company that (i) following the
public disclosure of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of
the Buyers have been asked by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any
of its Subsidiaries, to desist from effecting any transactions in or with respect to (including, without limitation, purchasing
or selling, long and/or short) any securities of the Company, or “derivative” securities based on securities issued
by the Company or to hold any of the Securities for any specified term; (ii) any Buyer, and counterparties in “derivative”
transactions to which any such Buyer is a party, directly or indirectly, presently may have a “short” position in
the Common Stock which was established prior to such Buyer’s knowledge of the transactions contemplated by the Transaction
Documents; (iii) each Buyer shall not be deemed to have any affiliation with or control over any arm’s length counterparty
in any “derivative” transaction; and (iv) each Buyer may rely on the Company’s obligation to timely deliver
shares of Common Stock upon conversion, exercise or exchange, as applicable, of the Securities as and when required pursuant to
the Transaction Documents for purposes of effecting trading in the Common Stock of the Company.  The Company further understands
and acknowledges that following the public disclosure of the transactions contemplated by the Transaction Documents pursuant to
the Press Release (as defined below) one or more Buyers may engage in hedging and/or trading activities (including, without limitation,
the location and/or reservation of borrowable shares of Common Stock) at various times during the period that the Securities are
outstanding, including, without limitation, during the periods that the value and/or number of the Conversion Shares deliverable
with respect to the Securities are being determined and such hedging and/or trading activities (including, without limitation,
the location and/or reservation of borrowable shares of Common Stock), if any, can reduce the value of the existing stockholders’
equity interest in the Company both at and after the time the hedging and/or trading activities are being conducted.  The
Company acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement,
the Convertible Notes or any other Transaction Document or any of the documents executed in connection herewith or therewith.

 

(gg)Manipulation
of Price.  Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting
on their behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of
the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities,
(iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the
Company or any of its Subsidiaries or (iv) paid or agreed to pay any Person for research services with respect to any securities
of the Company or any of its Subsidiaries.

 

(hh)U.S.
Real Property Holding Corporation.  Neither the Company nor any of its Subsidiaries is, or has ever been, and so long
as any of the Securities are held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning
of Section 897 of the Code, and the Company and each Subsidiary shall so certify upon any Buyer’s request.

 

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(ii) Transfer
Taxes.  All stock transfer or other taxes (other than income or similar taxes) which are required to be paid in connection
with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have been, fully paid
or provided for by the Company, and all laws imposing such taxes will be or will have been complied with; provided that the Company
shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any
Conversion Shares upon conversion of the Convertible Notes in a name other than that of the Buyer of such Convertible Notes, and
the Company shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting
the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.

 

(jj)Bank
Holding Company Act.  Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”).  Neither the Company nor any of its Subsidiaries owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity
of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.  Neither the Company nor any
of its Subsidiaries exercises a controlling influence over the management or policies of a bank or any entity that is subject
to the BHCA and to regulation by the Federal Reserve.

 

(kk)Shell
Company Status.  The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).

 

(ll)Illegal
or Unauthorized Payments; Political Contributions.  Neither the Company nor any of its Subsidiaries nor, to the best
of the Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees,
agents or other representatives of the Company or any of its Subsidiaries or affiliates, has, directly or indirectly, made or
authorized any payment, contribution or gift of money, property, or services, whether or not in contravention of applicable law,
(i) as a kickback or bribe to any Person or (ii) to any political organization, or the holder of or any aspirant to
any elective or appointive public office to influence official action or secure an improper advantage, except for personal political
contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.

 

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(mm)Money
Laundering.  The operations of the Company and its Subsidiaries are and have been conducted at all times in material
compliance with the USA Patriot Act of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations,
including, without limitation, the laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office
of Foreign Assets Control, including, but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled,
“Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism”
(66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31 CFR, Subtitle B, Chapter V.

 

(nn)Management. 
During the past five year period, no current or former officer or director, to the knowledge of the Company, has been the subject
of:

 

(i) a
petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before
the filing of such petition or such appointment, or any corporation or business association of which such person was an executive
officer at or within two years before the time of the filing of such petition or such appointment;

 

(ii) a
conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do
not relate to driving while intoxicated or driving under the influence);

 

(iii) any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining any such person from, or otherwise limiting, the following activities:

 

(1) Acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person
of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;

 

(2) Engaging
in any particular type of business practice; or

 

(3) Engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of securities
laws or commodities laws;

 

(iv) any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise
limiting for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph,
or to be associated with persons engaged in any such activity;

 

(v) a
finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities
law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently
reversed, suspended or vacated; or

 

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(vi) a
finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or
vacated.

 

(oo) Stock
Option Plans.  Except as set forth on Schedule 3(oo), each stock option granted by the Company was granted (i) in
accordance with the terms of the applicable stock option plan of the Company and (ii) with an exercise price at least equal
to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable
law.  To the Company’s knowledge, no stock option granted under the Company’s stock option plan has been backdated. 
The Company has not knowingly granted, and there is no and has been no policy or practice of the Company to knowingly grant, stock
options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement
of material information regarding the Company or its Subsidiaries or their financial results or prospects.

 

(pp)Cybersecurity. 
The Company and its Subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software,
websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform
in all material respects as required in connection with the operation of the business of the Company and its subsidiaries as currently
conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants that
would reasonably be expected to have a material adverse effect on the Company’s business. The Company and its Subsidiaries
have implemented and maintained commercially reasonable physical, technical and administrative controls, policies, procedures,
and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy
and security of all IT Systems and data, including “Personal Data,” used in connection with their businesses. “Personal
Data” means (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social
security number or tax identification number, driver’s license number, passport number, credit card number, bank information,
or customer or account number; (ii) any information which would qualify as “personally identifying information” under
the Federal Trade Commission Act, as amended; (iii) “personal data” as defined by the European Union General Data
Protection Regulation (“GDPR”) (EU 2016/679); (iv) any information which would qualify as “protected
health information” under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information
Technology for Economic and Clinical Health Act (collectively, “HIPAA”); and (v) any other piece of information
that allows the identification of such natural person, or his or her family, or permits the collection or analysis of any data
related to an identified person’s health or sexual orientation. There have been no breaches, violations, outages or unauthorized
uses of or accesses to same, except for those that have been remedied without material cost or liability or the duty to notify
any other person, nor any incidents under internal review or investigations relating to the same. The Company and its Subsidiaries
are presently in material compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of
any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the
privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized
use, access, misappropriation or modification.

 

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(qq)Compliance
with Data Privacy Laws.  The Company and its Subsidiaries are, and at all prior times were, in material compliance with
all applicable state and federal data privacy and security laws and regulations, including without limitation HIPAA, and the Company
and its Subsidiaries have taken commercially reasonable actions to prepare to comply with, and since May 25, 2018, have been and
currently are in compliance with, the GDPR (EU 2016/679) (collectively, the “Privacy Laws”). To ensure compliance
with the Privacy Laws, the Company and its Subsidiaries have in place, comply with, and take appropriate steps reasonably designed
to ensure compliance in all material respects with their policies and procedures relating to data privacy and security and the
collection, storage, use, disclosure, handling, and analysis of Personal Data (the “Policies”). The Company
and its Subsidiaries have at all times made all disclosures to users or customers required by applicable laws and regulatory rules
or requirements, and none of such disclosures made or contained in any Policy have, to the knowledge of the Company, been inaccurate
or in violation of any applicable laws and regulatory rules or requirements in any material respect. The Company further certifies
that neither it nor any Subsidiary: (i) has received notice of any actual or potential liability under or relating to, or actual
or potential violation of, any of the Privacy Laws, and has no knowledge of any event or condition that would reasonably be expected
to result in any such notice; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation,
or other corrective action pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement that imposes any
obligation or liability under any Privacy Law.

 

(rr)No
Additional Agreements.  The Company does not have any agreement or understanding with any Buyer with respect to the transactions
contemplated by the Transaction Documents other than as specified in the Transaction Documents.

 

(ss)Disclosure. 
The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents
or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement
and the other Transaction Documents.  The Company understands and confirms that each of the Buyers will rely on the foregoing
representations in effecting transactions in securities of the Company.  All disclosure provided to the Buyers regarding
the Company and its Subsidiaries, their businesses and the transactions contemplated hereby, including the schedules to this Agreement,
furnished by or on behalf of the Company or any of its Subsidiaries is true and correct and does not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading.  All of the written information furnished after the date hereof
by or on behalf of the Company or any of its Subsidiaries to each Buyer pursuant to or in connection with this Agreement and the
other Transaction Documents, taken as a whole, will be true and correct in all material respects as of the date on which such
information is so provided and will not contain any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.  The
Company acknowledges and agrees that no Buyer makes or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 2. Except for the representations and warranties contained
in this Section 3 (including the related portions of the Schedules) and in Section 2 of the Security Agreement, neither the
Company nor any other Person has made or makes any other express or implied representation or warranty, either written or oral,
on behalf of the Company.

 

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		4.	COVENANTS.

 

(a) Best
Efforts.  Each Buyer shall use its best efforts to timely satisfy each of the covenants hereunder and conditions to be
satisfied by it as provided in Section 6 of this Agreement.  The Company shall use its best efforts to timely satisfy each
of the covenants hereunder and conditions to be satisfied by it as provided in Section 7 of this Agreement.

 

(b) Blue
Sky.  The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for, or to, qualify the applicable Securities for sale to the Buyers at the Closing
pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to
obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyers on or prior
to the Closing Date.  Without limiting any other obligation of the Company under this Agreement, the Company shall timely
make all filings and reports relating to the offer and sale of the Securities required under all applicable securities laws (including,
without limitation, all applicable federal securities laws and all applicable “Blue Sky” laws), and the Company shall
comply with all applicable foreign, federal, state and local laws, statutes, rules, regulations and the like relating to the offering
and sale of the Securities to the Buyers.

 

(c) Use
of Proceeds.  The Company will use the net proceeds from the sale of the Securities for working capital and general corporate
purposes, but not, directly or indirectly, for (i) the redemption or repurchase of any securities of the Company or any of
its Subsidiaries or (ii) the settlement of any outstanding litigation that involves payment by the Company or $500,000 or
more.

 

(d) Listing. 
The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Conversion Shares
upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed or designated
for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing or designation for
quotation (as the case may be) of all Conversion Shares from time to time issuable under the terms of the Transaction Documents
on such national securities exchange or automated quotation system.  The Company shall maintain the Common Stock’s
listing or authorization for quotation (as the case may be) on the Principal Market, The New York Stock Exchange, the NYSE American,
the Nasdaq Global Market or the Nasdaq Global Select Market (each, an “Eligible Market”).  Neither the
Company nor any of its Subsidiaries shall take any action which could be reasonably expected to result in the delisting or suspension
of the Common Stock on an Eligible Market.  The Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 4(d).

 

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(e) Fees. The
Company shall pay for the due diligence and legal fees and expenses incurred by the Buyers in connection with the structuring,
documentation, negotiation, and closing of the transactions contemplated by the Transaction Documents (and the enforcement thereof
by the Buyers), including, without limitation, all reasonable legal fees and disbursements of Latham & Watkins LLP, counsel
to the lead Buyer, and due diligence and regulatory filings in connection therewith (the “Transaction Expenses”)
and such Transaction Expenses, to the extent they have not already been paid to the Buyer, may be withheld by the lead Buyer from
its Purchase Price at the Closing; provided, however, that the legal fees and expenses payable by the Company hereunder in connection
with the structuring, documentation, negotiation, and closing of the transactions contemplated by the Transaction Documents shall
not exceed $75,000. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees,
transfer agent fees, fees of the Depository Trust Company (“DTC”) or broker’s commissions (other than
for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby.  The Company shall
pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys’
fees and reasonable and documented out-of-pocket expenses) arising in connection with any claim relating to any such payment. 
Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own expenses in connection
with the sale of the Securities to the Buyers.

 

(f) Pledge
of Securities.  Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees
that the Securities may be pledged by a Buyer in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities.  The pledge of Securities shall not be deemed to be a transfer, sale or assignment of
the Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document.  The
Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection
with a pledge of the Securities to such pledgee by a Buyer.

 

(g) Disclosure
of Transactions and Other Material Information.

 

(i) Disclosure
of Transaction.  The Company shall, on or before 9:15 a.m., New York time, on the date of this Agreement, issue
a press release (the “Press Release”) reasonably acceptable to the Buyers disclosing all the material terms
of the transactions contemplated by the Transaction Documents.  No later than 5:30 p.m., New York time, on the fourth (4th)
Business Day after the date of this Agreement, the Company shall file a Current Report on Form 8-K describing all the material
terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching all the
material Transaction Documents (the “8-K Filing”).  From and after the issuance of the Press Release,
the Company shall have disclosed all material, non-public information (if any) provided to any of the Buyers by the Company or
any of its Subsidiaries or any of their respective officers, directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents.  In addition, effective upon the issuance of the Press Release, the Company acknowledges
and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company,
any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and
any of the Buyers or any of their affiliates, on the other hand, shall terminate.

 

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(ii) Limitations
on Disclosure.  Other than as required under the Transaction Documents (but subject to any other disclosure obligations
of the Company with respect thereto), the Company shall not, and the Company shall cause each of its Subsidiaries and each of
its and their respective officers, directors, employees and agents not to, provide any Buyer with any material, non-public information
regarding the Company or any of its Subsidiaries from and after the date hereof unless prior thereto such Buyer shall have consented
in writing to the receipt of such information and agreed with the Company to keep such information confidential.  To the
extent that the Company delivers any material, non-public information to a Buyer without such Buyer’s prior written consent,
the Company hereby covenants and agrees that such Buyer shall not have any duty of confidentiality with respect to, or a duty
not to trade on the basis of, such material, non-public information, provided that the Buyer shall remain subject to applicable
law.  Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any press releases or any
other public statements with respect to the transactions contemplated hereby; provided, however, the Company shall be entitled,
without the prior approval of any Buyer, to make the Press Release and any press release or other public disclosure with respect
to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is
required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the
Company in connection with any such press release or other public disclosure prior to its release).  Without the prior written
consent of the applicable Buyer (which may be granted or withheld in such Buyer’s sole discretion), the Company shall not
(and shall cause each of its Subsidiaries and affiliates to not) disclose the name of such Buyer in any filing, announcement,
release or otherwise, except in the 8-K filing and as otherwise may be required by applicable law.  Notwithstanding anything
contained in this Agreement to the contrary and without implication that the contrary would otherwise be true, the Company expressly
acknowledges and agrees that no Buyer shall have (unless expressly agreed to by a particular Buyer after the date hereof in a
written definitive and binding agreement executed by the Company and such particular Buyer (it being understood and agreed that
no Buyer may bind any other Buyer with respect thereto)), any duty of confidentiality with respect to, or a duty not to trade
on the basis of, any material, non-public information regarding the Company or any of its Subsidiaries.

 

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(h) Additional
Issuance of Securities. 

 

(i) So
long as any Convertible Notes remain outstanding, the Company will not, without the prior written consent of the Required Holders
(as defined below), issue any Convertible Notes (other than to the Buyers as contemplated hereby) and the Company shall not issue
any other securities that would cause a breach or default under the Convertible Notes.  The Company agrees that for the period
commencing on the date hereof and ending on the date immediately following the 45th calendar day after the Closing
Date (the “Restricted Period”), neither the Company nor any of its Subsidiaries shall directly or indirectly
(i) issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale,
grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security
(including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under
the 1933 Act), any Convertible Securities, any preferred stock or any purchase rights) (any such issuance, offer, sale, grant,
disposition or announcement (whether occurring during the Restricted Period or at any time thereafter) is referred to as a “Subsequent
Placement”) or (ii) submit or file any registration statement under the 1933 Act in respect of any of the foregoing. 
Notwithstanding the foregoing, this Section 4(h)(i) shall not apply during the Restricted Period in respect of the issuance
of (i) shares of Common Stock or standard options to purchase Common Stock, restricted stock, or other incentive equity awards
issued to directors, officers, consultants or employees of the Company in their capacity as such pursuant to an Approved Stock
Plan (as defined below), provided that (1) all such issuances (taking into account the shares of Common Stock issuable upon
exercise of such options) after the date hereof pursuant to this clause (i) do not, in the aggregate, exceed more than 5%
of the Common Stock issued and outstanding immediately prior to the date hereof and (2) the exercise price of any such options
is not lowered, none of such options are amended to increase the number of shares issuable thereunder and none of the terms or
conditions of any such options are otherwise materially changed in any manner that adversely affects any of the Buyers; (ii) shares
of Common Stock issued upon the conversion, exercise, or settlement of (or otherwise pursuant to the terms of) Convertible Securities
(other than standard options to purchase Common Stock or other incentive equity awards issued pursuant to an Approved Stock Plan
that are covered by clause (i) above) issued prior to the date hereof, provided that the conversion, exercise or other method
of issuance (as the case may be) of any such Convertible Security is made solely pursuant to the conversion, exercise or other
method of issuance (as the case may be) provisions of such Convertible Security that were in effect on the date immediately prior
to the date of this Agreement, the conversion, exercise or issuance price of any such Convertible Securities (other than standard
options to purchase Common Stock or other incentive equity awards issued pursuant to an Approved Stock Plan that are covered by
clause (i) above) is not lowered, none of such Convertible Securities (other than standard options to purchase Common Stock
issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are amended to increase the number of shares
issuable thereunder and none of the terms or conditions of any such Convertible Securities (other than standard options to purchase
Common Stock or other incentive equity awards issued pursuant to an Approved Stock Plan that are covered by clause (i) above)
are otherwise materially changed in any manner that adversely affects any of the Buyers; (iii) shares of the Company’s
capital stock issuable pursuant to shareholder rights plans; (iv) shares of Common Stock issued as matching contributions
under the Company’s 401(k) plan; (v) shares of Common Stock issued by the Company at a per share purchase price greater
than one hundred fifty percent (150%) of the Conversion Price (as defined in the Convertible Notes); and (vi) the Conversion
Shares.  In addition, notwithstanding the foregoing, the Company may file a prospectus supplement with the SEC and enter
into a sales agreement relating to an at-the-market offering program, provided that no shares may be offered or sold pursuant
to such at-the-market offering during the Restricted Period. “Approved Stock Plan” means any stock option plans,
equity incentive plans or employee benefit plans which have been approved by the board of directors of the Company prior to or
subsequent to the date hereof pursuant to which shares of Common Stock and standard options to purchase Common Stock, restricted
stock and other incentive equity awards may be issued to any employee, officer, consultant or director for services provided to
the Company in their capacity as such.  “Convertible Securities” means any capital stock or other security
of the Company or any of its Subsidiaries that is at any time and under any circumstances directly or indirectly convertible into,
exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or other security
of the Company (including, without limitation, Common Stock) or any of its Subsidiaries.

 

    25

     

    

 

(ii) In
addition, so long as any Convertible Notes remain outstanding, the Company and each Subsidiary shall be prohibited from effecting,
or entering into an agreement to effect, any Subsequent Placement involving a Variable Rate Transaction or any Convertible Notes
issued hereunder. “Variable Rate Transaction” means a transaction in which the Company or any Subsidiary (i)
issues or sells any Convertible Securities either (A) at a conversion, exercise or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance
of such Convertible Securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future
date after the initial issuance of such Convertible Securities or upon the occurrence of specified or contingent events directly
or indirectly related to the business of the Company or the market for the Common Stock, other than pursuant to a customary “weighted
average” anti-dilution provision or customary adjustments for stock splits, stock dividends, stock combinations, recapitalizations
and similar events or (ii) enters into any agreement (including, without limitation, an equity line of credit, but not including
an “at-the-market” offering) whereby the Company or any Subsidiary may sell securities at a future determined price
(other than standard and customary “preemptive” or “participation” rights); provided that neither the
Company nor any Subsidiary may offer or sell shares pursuant to an at-the-market offering during the Restricted Period.

 

(iii) Each
Buyer shall be entitled to obtain injunctive relief against the Company and its Subsidiaries to preclude any issuance prohibited
by this Section 4(h), which remedy shall be in addition to any right to collect damages.

 

(i) Reservation
of Shares.  So long as any of the Convertible Notes remain outstanding, the Company shall take all action necessary to
at all times have authorized, and reserved for the purpose of issuance, no less than a number of shares of Common Stock equal
to two hundred percent (200%) of a fraction, the numerator of which shall be (x) the then outstanding Principal Amount (as defined
in the Convertible Notes) of the Convertible Notes and the denominator of which shall be (y) the Market Stock Payment Price (as
defined in the Convertible Notes) then in effect (the “Required Reserve Amount”); provided that at no time
shall the number of shares of Common Stock reserved pursuant to this Section 4(i) be reduced other than in connection
with any stock combination, reverse stock split or other similar transaction or proportionally in connection with any conversion
and/or redemption, as applicable, of the Convertible Notes.  If at any time the number of shares of Common Stock authorized
and reserved for issuance is not sufficient to meet the Required Reserve Amount, the Company will promptly take all corporate
action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting
of stockholders to authorize additional shares to meet the Company’s obligations pursuant to the Transaction Documents,
in the case of an insufficient number of authorized shares, obtain stockholder approval (if required) of an increase in such authorized
number of shares, and voting the management shares of the Company in favor of an increase in the authorized shares of the Company
to ensure that the number of authorized shares is sufficient to meet the Required Reserve Amount.

 

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(j) Conduct
of Business.  The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance
or regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect.

 

(k) Passive
Foreign Investment Company.  The Company shall conduct its business, and shall cause its Subsidiaries to conduct their
respective businesses, in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment
company within the meaning of Section 1297 of the Code.

 

(l) Restriction
on Redemption and Cash Dividends.  Except for dividends required by the Company’s Class B Preferred Stock as of
the date of this Agreement, so long as any of the Convertible Notes are outstanding, the Company shall not, directly or indirectly,
redeem, or declare or pay any cash dividend or distribution on, any securities of the Company without the prior express written
consent of the Buyers (other than as required by the Convertible Notes or as required by the terms thereof as in effect on the
date hereof).

 

(m) Corporate
Existence.  So long as any Convertible Notes remain outstanding, the Company shall not be party to any Fundamental Change
(as defined in the Convertible Notes) unless the Company is in compliance with the applicable provisions governing Fundamental
Changes set forth in the Convertible Notes.

 

(n) Stock
Splits.  Until the Convertible Notes are no longer outstanding, the Company shall not effect any stock combination, reverse
stock split or other similar transaction (or make any public announcement or disclosure with respect to any of the foregoing)
without the prior written consent of the Required Holders, except as required by any Principal Market to provide for the eligibility
or continued eligibility of the Common Stock for listing or quotation on such market.

 

(o) Conversion
Procedures.  The form of conversion notice included in the Convertible Notes sets forth the totality of the procedures
required of the Buyers in order to convert the Convertible Notes.  No additional legal opinion, other information or instructions
shall be required of the Buyers to convert their Convertible Notes.  The Company shall honor conversions of the Convertible
Notes and shall deliver the Conversion Shares in accordance with the terms, conditions and time periods set forth in the Convertible
Notes.

 

(p) Regulation
M.  The Company will not take any action prohibited by Regulation M under the 1934 Act, in connection with the distribution
of the Securities contemplated hereby.

 

(q) Integration. 
None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act), or any person acting on behalf
of the Company or such affiliate will sell, offer for sale, or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the 1933 Act) which will be integrated with the sale of the Securities in a manner which would require
stockholder approval under the rules and regulations of the Principal Market and the Company will take all action that is
appropriate or necessary to assure that its offerings of other securities will not be integrated for purposes of the rules and
regulations of the Principal Market, with the issuance of Securities contemplated hereby.

 

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(r) Closing
Documents.  On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause
to be delivered, to each Buyer and Latham & Watkins LLP a complete closing set of the respective executed Transaction Documents,
Securities and any other document required to be delivered to any party pursuant to Section 7 hereof or otherwise (which may be
in photocopies or pdf versions of executed copies).

 

(s) Stockholder
Approval. Following the Closing, the Company agrees to use best efforts to obtain, at the next annual meeting of the stockholders
of the Company (at which a quorum is present), but in no event later than November 25, 2020 (the “Stockholder Meeting”),
the Requisite Stockholder Approval. The Company will prepare and file with the SEC a proxy statement to be sent to the Company’s
stockholders in connection with the Stockholder Meeting (the “Proxy Statement”). The Proxy Statement shall
include the Board of Directors’ recommendation that the holders of shares of the Company’s Common Stock vote in favor
of the Requisite Stockholder Approval. If the Requisite Stockholder Approval is not obtained at or prior to the Stockholder Meeting,
the Company will hold a special meeting of the stockholders of the Company for the purposes of obtaining such Requisite Stockholder
Approval no less often than every ninety (90) days following the date of the Stockholder Meeting until the Requisite Stockholder
Approval is obtained, and the Board of Directors will recommend that the holders of shares of the Company’s Common Stock
vote in favor of the Requisite Stockholder Approval at each such meeting.

 

(t) Legends.
Certificates and any other instruments evidencing the Securities shall not bear any restrictive or other legend.

 

(u) Voting
Agreements. The Company may not amend, modify or waive the terms of the Voting Agreements in any respect without the prior
written consent of the Required Holders.

 

		5.	REGISTER;
                                         TRANSFER AGENT INSTRUCTIONS.

 

(a) Register. 
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to each holder of Securities), a register for the Securities in which the Company shall record the name and address
of the Person in whose name the Purchased Securities have been issued (including the name and address of each transferee), the
aggregate number of the Convertible Notes held by such Person, the number of Conversion Shares issuable pursuant to the terms
of the Convertible Notes held by such Person.  The Company shall keep the register open and available at all times during
business hours for inspection of any Buyer or its legal representatives.

 

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(b) Transfer
Agent Instructions.  The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer
agent (as applicable) (the “Transfer Agent”) in a form acceptable to each of the Buyers (the “Irrevocable
Transfer Agent Instructions”) to credit shares to each such Buyer’s (or its designee’s) account at DTC through
its Deposit/Withdrawal At Custodian (“DWAC”) System or, if the DWAC System is not available, to issue certificates
to the applicable balance accounts at DTC, registered in the name of each Buyer or its respective nominee(s), for the Conversion
Shares in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Convertible Notes. 
The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in
this Section 5(b) will be given by the Company to the Transfer Agent with respect to the Securities, and that the Securities
shall otherwise be freely transferable on the books and records of the Company, as applicable, to the extent provided in this
Agreement and the other Transaction Documents.  If a Buyer effects a sale, assignment or transfer of the Securities, the
Company shall permit the transfer and shall promptly instruct the Transfer Agent to issue one or more certificates or credit shares
to the applicable balance accounts at DTC in such name and in such denominations as specified by such Buyer to effect such sale,
transfer or assignment.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to a Buyer.  Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this
Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions
of this Section 5(b), that a Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without
any bond or other security being required.  Any fees (with respect to the Transfer Agent, counsel to the Company or otherwise)
associated with the removal of any legends on any of the Securities shall be borne by the Company.

 

(c) FAST
Compliance.  While any Convertible Notes remain outstanding, the Company shall maintain a transfer agent that participates
in the DTC Fast Automated Securities Transfer Program.

 

		6.	CONDITIONS
                                         TO THE COMPANY’S OBLIGATION TO SELL THE PURCHASED SECURITIES.

 

(a) The
obligation of the Company hereunder to issue and sell the Purchased Securities to each Buyer at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice
thereof:

 

(i) Such
Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.

 

(ii) Such
Buyer and each other Buyer shall have delivered to the Company the Purchase Price for the Purchased Securities being purchased
by such Buyer at the Closing by wire transfer of immediately available funds in accordance with the Flow of Funds Letter.

 

(iii) The
representations and warranties of such Buyer shall be true and correct in all material respects (except for such representations
and warranties that are qualified by materiality or material adverse effect, which shall be true and correct in all respects)
as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties
that speak as of a specific date, which shall be true and correct as of such specific date), and such Buyer shall have performed,
satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by such Buyer at or prior to the Closing Date.

 

    29

     

    

 

		7.	CONDITIONS
                                         TO EACH BUYER’S OBLIGATION TO PURCHASE the purchased securities.

 

(a) The
obligation of each Buyer hereunder to purchase its Purchased Securities at the Closing is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit
and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:

 

(i) The
Company and each Subsidiary (as the case may be) shall have duly executed and delivered to such Buyer each of the Transaction
Documents to which it is a party and the Company shall have duly executed and delivered to such Buyer in accordance with Section
1(a) the Purchased Securities as set forth across from such Buyer’s name in column (3) of the Schedule of Buyers as being
purchased by such Buyer at the Closing pursuant to this Agreement.

 

(ii) Such
Buyer shall have received the opinion of Taft Stettinius & Hollister LLP, the Company’s counsel, dated as of the Closing
Date, in the form acceptable to such Buyer.

 

(iii) The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form acceptable to such
Buyer, which instructions shall have been delivered to and acknowledged in writing by the Transfer Agent.

 

(iv) The
Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company in such entity’s
jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of formation as of a date
within ten (10) days of the Closing Date.

 

(v) The
Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation as certified by the Delaware Secretary
of State within ten (10) days of the Closing Date.

 

(vi) The
Company shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by the Secretary of the
Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by
the Company’s board of directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation
of the Company and (iii) the Bylaws of the Company, each as in effect at the Closing.

 

    30

     

    

 

(vii) Each
and every representation and warranty of the Company shall be true and correct in all material respects (except for such representations
and warranties that are qualified by materiality or material adverse effect, which shall be true and correct in all respects)
as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties
that speak as of a specific date, which shall be true and correct as of such specific date) and the Company shall have performed,
satisfied and complied in all material respects with (except for covenants, agreements or conditions that are qualified by materiality
or material adverse effect, which shall be performed, satisfied and complied in all respects with) the covenants, agreements and
conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing Date.  Such Buyer
shall have received a certificate, duly executed by the Chief Executive Officer of the Company, dated as of the Closing Date,
to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form acceptable to such
Buyer.

 

(viii) The
Company shall have delivered to such Buyer a letter from the Transfer Agent certifying the number of shares of Common Stock outstanding
on the Closing Date immediately prior to the Closing.

 

(ix) The
Common Stock (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not
have been suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall
suspension by the SEC or the Principal Market have been threatened, as of the Closing Date, either (1) in writing by the
SEC or the Principal Market or (2) by falling below the minimum maintenance requirements of the Principal Market.

 

(x) The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Purchased Securities, including without limitation, those required by the Principal Market, if any.

 

(xi) No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.

 

(xii) Since
the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result
in a Material Adverse Effect.

 

(xiii) The
Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Conversion
Shares and confirmation from the Principal Market that no stockholder vote or other conditions under the rules of the Principal
Market shall apply to the sale of the Purchased Securities or the issuance of the Conversion Shares.

 

(xiv) Such
Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company,
setting forth the wire amounts of each Buyer and the wire transfer instructions of the Company (the “Flow of Funds Letter”).

 

(xv) The
Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to
the transactions contemplated by the Transaction Documents as such Buyer or its counsel may reasonably request.

 

    31

     

    

 

(xvi) The
Company shall have delivered to such Buyer the results of a recent lien, bankruptcy and judgment search in each relevant jurisdiction
with respect to the Company and its Subsidiaries and such search shall reveal no Liens on any of the Collateral (as such term
is defined in the Security Agreement) or other assets of the Company and its Subsidiaries except, in the case of assets other
than Collateral, for Permitted Liens (as such term is defined in the Convertible Notes) and except for Liens to be discharged
on or prior to the Closing Date pursuant to documentation reasonably satisfactory to the Buyer.

 

(xvii) The
Company shall have delivered to Buyer a duly completed and executed perfection certificate in the form attached hereto as Exhibit
D.

 

(xviii) The
Company shall have delivered to such Buyer executed copies of the Voting Agreements executed by each of the officers and directors
of the Company and Stephen S. Burns.

 

(xix) The
Company shall have entered into an intercreditor agreement with the secured party under the Workhorse Group Inc. Senior Secured
Convertible Note due 2022 dated as of December 9, 2010 (the “Existing Note”) in form and substance reasonably
satisfactory to the Buyers.

 

(xx) The
Company shall have entered into an amendment to the Existing Note to include the Convertible Notes as “Permitted Indebtedness”
under the Existing Note, in form and substance reasonably satisfactory to the Buyers.

 

		8.	TERMINATION.

 

In
the event that the Closing shall not have occurred with respect to a Buyer on or before July 15, 2020, then such Buyer shall have
the right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business
on such date without liability of such Buyer to any other party; provided however, (i) the right to terminate this Agreement
under this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement
to have been consummated by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment
of the sale and purchase of the Purchased Securities shall be applicable only to such Buyer providing such written notice; provided
further that no such termination shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the
expenses described in Section 4(e) above.  In the event that the Closing shall not have occurred with respect to a Buyer
on or before July 30, 2020, then the Company shall have the right to terminate its obligations under this Agreement with respect
to such Buyer at any time on or after the close of business on such date without liability of the Company to any other party;
provided however, the right to terminate this Agreement under this Section 8 shall not be available to the Company if the
failure of the transactions contemplated by this Agreement to have been consummated by such date is the result of the Company’s
breach of this Agreement; provided further that no such termination shall affect any obligation of the Company under this Agreement
to reimburse such Buyer for the expenses described in Section 4(e) above. Nothing contained in this Section 8 shall
be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or
the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations
under this Agreement or the other Transaction Documents.

 

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		9.	MISCELLANEOUS.

 

(a) Governing
Law; Jurisdiction; Jury Trial.  All questions concerning the construction, validity, enforcement and interpretation of
this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York.  The Company hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any
dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated
hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper.  Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party
at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in
any manner permitted by law.  Nothing contained herein shall be deemed or operate to preclude any Buyer from bringing suit
or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to such
Buyer or to enforce a judgment or other court ruling in favor of such Buyer.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY
OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY.

 

(b) Counterparts. 
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party.  In the event
that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file
of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

 

    33

     

    

 

(c) Headings;
Gender.  The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement.  Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof.  The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words “without limitation.”  The terms
“herein,” “hereunder,” “hereof” and words of like import refer to this entire Agreement instead
of just the provision in which they are found. Unless the context otherwise requires, references herein: (x) to Articles, Sections,
Schedules and Exhibits mean the Articles and Sections of, and Schedules and Exhibits attached to, this Agreement; (y) to an agreement,
instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time
to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time
and includes any successor legislation thereto and any regulations promulgated thereunder.

 

(d) Severability;
Maximum Payment Amounts.  If any provision of this Agreement is prohibited by law or otherwise determined to be invalid
or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable
shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so
modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof
and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the
respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise
be conferred upon the parties.  The parties will endeavor in good faith negotiations to replace the prohibited, invalid or
unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited,
invalid or unenforceable provision(s).  Notwithstanding anything to the contrary contained in this Agreement or any other
Transaction Document (and without implication that the following is required or applicable), it is the intention of the parties
that in no event shall amounts and value paid by the Company and/or any of its Subsidiaries (as the case may be), or payable to
or received by any of the Buyers, under the Transaction Documents (including without limitation, any amounts that would be characterized
as “interest” under applicable law) exceed amounts permitted under any applicable law.  Accordingly, if any obligation
to pay, payment made to any Buyer, or collection by any Buyer pursuant the Transaction Documents is finally judicially determined
to be contrary to any such applicable law, such obligation to pay, payment or collection shall be deemed to have been made by
mutual mistake of such Buyer, the Company and its Subsidiaries and such amount shall be deemed to have been adjusted with retroactive
effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the applicable law. 
Such adjustment shall be effected, to the extent necessary, by reducing or refunding, at the option of such Buyer, the amount
of interest or any other amounts which would constitute unlawful amounts required to be paid or actually paid to such Buyer under
the Transaction Documents.  For greater certainty, to the extent that any interest, charges, fees, expenses or other amounts
required to be paid to or received by such Buyer under any of the Transaction Documents or related thereto are held to be within
the meaning of “interest” or another applicable term to otherwise be violative of applicable law, such amounts shall
be pro-rated over the period of time to which they relate.

 

    34

     

    

 

(e) Entire
Agreement; Amendments.  This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto
and thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the
Buyers, the Company, its Subsidiaries, their affiliates and Persons acting on their behalf, including, without limitation, any
transactions by any Buyer with respect to Common Stock or the Securities, and the other matters contained herein and therein,
and this Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments
referenced herein and therein contain the entire understanding of the parties solely with respect to the matters covered herein
and therein; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed
to) (i) have any effect on any agreements any Buyer has entered into with, or any instruments any Buyer has received from,
the Company or any of its Subsidiaries prior to the date hereof with respect to any prior investment made by such Buyer in the
Company or (ii) waive, alter, modify or amend in any respect any obligations of the Company or any of its Subsidiaries, or
any rights of or benefits to any Buyer or any other Person, in any agreement entered into prior to the date hereof between or
among the Company and/or any of its Subsidiaries and any Buyer, or any instruments any Buyer received from the Company and/or
any of its Subsidiaries prior to the date hereof, and all such agreements and instruments shall continue in full force and effect. 
Except as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant
or undertaking with respect to such matters.  For clarification purposes, the Recitals are part of this Agreement. 
No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Required Holders,
and any amendment to any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall
be binding on all Buyers and holders of Securities, as applicable; provided that no such amendment shall be effective to the extent
that it (A) applies to less than all of the holders of the Securities then outstanding or (B) imposes any obligation
or liability on any Buyer without such Buyer’s prior written consent (which may be granted or withheld in such Buyer’s
sole discretion).  No waiver shall be effective unless it is in writing and signed by an authorized representative of the
waiving party, provided that the Required Holders may waive any provision of this Agreement, and any waiver of any provision of
this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all Buyers and holders
of Securities, as applicable, provided that no such waiver shall be effective to the extent that it (1) applies to less than
all of the holders of the Securities then outstanding (unless a party gives a waiver as to itself only) or (2) imposes any
obligation or liability on any Buyer without such Buyer’s prior written consent (which may be granted or withheld in such
Buyer’s sole discretion).  No consideration (other than reimbursement of legal fees) shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration
also is offered to all of the parties to the Transaction Documents and all holders of the Purchased Securities.  From the
date hereof and while any Purchased Securities are outstanding, the Company shall not be permitted to receive any consideration
from a Buyer or a holder of Purchased Securities that is not otherwise contemplated by the Transaction Documents in order to,
directly or indirectly, induce the Company or any Subsidiary (i) to treat such Buyer or holder of Purchased Securities in
a manner that is more favorable than to other similarly situated Buyers or holders of Purchased Securities, or (ii) to treat
any Buyer(s) or holder(s) of Purchased Securities in a manner that is less favorable than the Buyer or holder of Purchased
Securities that is paying such consideration; provided, however, that the determination of whether a Buyer has been treated more
or less favorably than another Buyer shall disregard any securities of the Company purchased or sold by any Buyer.  The Company
has not, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated
by the Transaction Documents except as set forth in the Transaction Documents.  Without limiting the foregoing, the Company
confirms that, except as set forth in this Agreement, no Buyer has made any commitment or promise or has any other obligation
to provide any financing to the Company, any Subsidiary or otherwise.  As a material inducement for each Buyer to enter into
this Agreement, the Company expressly acknowledges and agrees that (x) no due diligence or other investigation or inquiry conducted
by a Buyer, any of its advisors or any of its representatives shall affect such Buyer’s right to rely on, or shall modify
or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained in this Agreement
or any other Transaction Document and (y) unless a provision of this Agreement or any other Transaction Document is expressly
preceded by the phrase “except as disclosed in the SEC Documents,” nothing contained in any of the SEC Documents shall
affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s
representations and warranties contained in this Agreement or any other Transaction Document.  “Required Holders”
means (I) prior to the Closing Date, each Buyer entitled to purchase Purchased Securities at the Closing and (II) on
or after the Closing Date, holders of a majority of the Conversion Shares in the aggregate as of such time issued or issuable
hereunder or pursuant to the Convertible Notes.

 

    35

     

    

 

(f) Notices. 
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on
file by the sending party) or electronic mail (provided that such sent email is kept on file (whether electronically or otherwise)
by the sending party and the sending party does not receive an automatically generated message from the recipient’s email
server that such e-mail could not be delivered to such recipient); or (iii) one (1) Business Day after deposit with
an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. 
The addresses, facsimile numbers and e-mail addresses for such communications shall be:

 

If
to the Company:

 

		(i)	Workhorse
                                         Group Inc.

                                         100 Commerce Drive

                                         Loveland, Ohio 45140

                                         Attention: Stephen M. Fleming

                                         Facsimile: (516)-977-1209

                                         Email: smf@flemingpllc.com

 

with
a copy (for informational purposes only) to:

 

Taft
Stettinius & Hollister LLP

425
Walnut Street, Suite 1800

Cincinnati,
OH 45202

Attention:
David A. Zimmerman

Facsimile:
(513) 381-0205

Email:
dzimmerman@taftlaw.com

 

    36

     

    

 

If
to the Transfer Agent:

 

Empire
Stock Transfer, Inc.

1859
Whitney Mesa Drive

Henderson,
NV 89014

Telephone: 
(702) 818-5898

Facsimile:  (702) 974-1444

Attention: Brian Barthlow

E-mail: brian@empirestock.com

 

If
to a Buyer, to (i) its e-mail address set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as
set forth on the Schedule of Buyers and (ii) to Eric Helenek, High Trail Capital, 221 River Street, 9th Floor, Hoboken, NJ 07030
(telephone: (917) 414-1733)

 

with
a copy (for informational purposes only) to:

 

Latham
& Watkins LLP

12670 High Bluff Drive

San Diego, CA 92130

Telephone:  (858) 523-5400

Facsimile:  (858) 523-5450

Attention:  Michael E. Sullivan, Esq.

E-mail:  michael.sullivan@lw.com

 

or
to such other address, e-mail address and/or facsimile number and/or to the attention of such other Person as the recipient party
has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. 
Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically
or electronically generated by the sender’s facsimile machine or e-mail containing the time, date, recipient facsimile number
and, with respect to each facsimile transmission, an image of the first page of such transmission or (C) provided by
an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above, respectively.

 

(g) Successors
and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including any purchasers of any of the Purchased Securities.  The Company shall not assign this Agreement or
any rights or obligations hereunder without the prior written consent of the Required Holders, including, without limitation,
by way of a Fundamental Change (as defined in the Convertible Notes) (unless the Company is in compliance with the applicable
provisions governing Fundamental Changes set forth in the Convertible Notes).  A Buyer may assign some or all of its rights
hereunder in connection with any transfer of any of its Securities without the consent of the Company, provided such assignee
agrees in writing to be bound by the provisions hereof that apply to Buyers in which event such assignee shall be deemed to be
a Buyer hereunder with respect to such assigned rights.

 

(h) No
Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than
the Indemnitees referred to in Section 9(k). 

 

    37

     

    

 

(i) Survival. 
The representations, warranties, agreements and covenants shall survive the Closing.  Each Buyer shall be responsible only
for its own representations, warranties, agreements and covenants hereunder.

 

(j) Further
Assurances.  Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably
request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby.

 

(k) Indemnification. 

 

(i) In
consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless each Buyer and each holder of any Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives
(including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively,
the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any
misrepresentation or breach of any representation or warranty made by the Company or any Subsidiary in any of the Transaction
Documents, (ii) any breach of any covenant, agreement or obligation of the Company or any Subsidiary contained in any of
the Transaction Documents or (iii) any cause of action, suit, proceeding or claim brought or made against such Indemnitee
by a third party (including for these purposes a derivative action brought on behalf of the Company or any Subsidiary) or which
otherwise involves such Indemnitee that arises out of or results from (A) the execution, delivery, performance or enforcement
of any of the Transaction Documents, or (B) the status of such Buyer or holder of the Securities either as an investor in
the Company pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement (including,
without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief);
provided, however, that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability
or expense arise primarily out of or is based primarily upon the inaccuracy of any representations and warranties made by such
Buyer herein or the gross negligence or willful misconduct of such Buyer.  To the extent that the foregoing undertaking by
the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable law. 

 

    38

     

    

 

(ii) Promptly
after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including, without
limitation, any governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect
thereof is to be made against any indemnifying party under this Section 9(k), deliver to the indemnifying party a written notice
of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnitee; provided, however, that an Indemnitee shall have the right
to retain its own counsel with the fees and expenses of such counsel to be paid by the indemnifying party if: (i) the indemnifying
party has agreed in writing to pay such fees and expenses; (ii) the indemnifying party shall have failed promptly to assume the
defense of such Indemnified Liability and to employ counsel reasonably satisfactory to such Indemnitee in any such Indemnified
Liability; or (iii) the named parties to any such Indemnified Liability (including, without limitation, any impleaded parties)
include both such Indemnitee and the indemnifying party, and such Indemnitee shall have been advised by counsel that a conflict
of interest is likely to exist if the same counsel were to represent such Indemnitee and the indemnifying party (in which case,
if such Indemnitee notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the
indemnifying party, then the indemnifying party shall not have the right to assume the defense thereof and such counsel shall
be at the expense of the indemnifying party), provided further that in the case of clause (iii) above the indemnifying party shall
not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for such Indemnitee. The Indemnitee
shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such action or claim
by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnitee which
relates to such Indemnified Liability. The indemnifying party shall keep the Indemnitee reasonably apprised at all times as to
the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement
of any action, claim or proceeding effected without its prior written consent; provided, however, the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the
Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified
Liability, and such settlement shall not include any admission as to fault on the part of the Indemnitee. Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnitee with respect to all third
parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnitee under this Section 9(k), except to the extent that the indemnifying party is materially
and adversely prejudiced in its ability to defend such action. The indemnification required by this Section 9(k) shall be made
by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or
Indemnified Liabilities are incurred. The indemnity and contribution agreements contained herein shall be in addition to (i) any
cause of action or similar right of the Indemnitees against the indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law. 

 

    39

     

    

 

(l) Construction. 
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party.  No specific representation or warranty shall limit
the generality or applicability of a more general representation or warranty.  Each and every reference to share prices,
shares of Common Stock and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted
for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions that occur with respect
to the Common Stock after the date of this Agreement.  Notwithstanding anything in this Agreement to the contrary, for the
avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or a prohibition of, any actions
with respect to the borrowing of, arrangement to borrow, identification of the availability of, and/or securing of, securities
of the Company in order for such Buyer (or its broker or other financial representative) to effect short sales or similar transactions
in the future.

 

(m) Remedies. 
Each Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Securities, shall have
all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which such holders have under any law.  Any Person
having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other
rights granted by law.  Furthermore, the Company recognizes that in the event that it or any Subsidiary fails to perform,
observe, or discharge any or all of its or such Subsidiary’s (as the case may be) obligations under the Transaction Documents,
any remedy at law would be inadequate relief to the Buyers.  The Company therefore agrees that the Buyers shall be entitled
to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent
jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. 
The remedies provided in this Agreement and the other Transaction Documents shall be cumulative and in addition to all other remedies
available under this Agreement and the other Transaction Documents, at law or in equity (including a decree of specific performance
and/or other injunctive relief).

 

(n) Withdrawal
Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company or any
Subsidiary does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be),
any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

    40

     

    

 

(o) Payment
Set Aside; Currency.  To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to
any of the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such
payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy
law, foreign, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation
or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment
had not been made or such enforcement or setoff had not occurred.  Unless otherwise expressly indicated, all dollar amounts
referred to in this Agreement and the other Transaction Documents are in United States Dollars (“U.S. Dollars”),
and all amounts owing under this Agreement and all other Transaction Documents shall be paid in U.S. Dollars.  All amounts
denominated in other currencies (if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange
Rate on the date of calculation.  “Exchange Rate” means, in relation to any amount of currency to be converted
into U.S. Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant
date of calculation.

 

(p) Judgment
Currency.

 

(i) If
for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other Transaction
Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter
in this Section 9(p) referred to as the “Judgment Currency”) an amount due in U.S. Dollars under
this Agreement, the conversion shall be made at the Exchange Rate prevailing on the Business Day immediately preceding:

 

(1) the
date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date; or

 

(2) the
date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as
of which such conversion is made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the “Judgment
Conversion Date”).

 

(ii) If
in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(2)  above, there is a
change in the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due,
the applicable party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency,
when converted at the Exchange Rate prevailing on the date of payment, will produce the amount of U.S. Dollars which could have
been purchased with the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing
on the Judgment Conversion Date.

 

(iii) Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Agreement or any other Transaction Document.

 

    41

     

    

 

(q) Independent
Nature of Buyers’ Obligations and Rights.  The obligations of each Buyer under the Transaction Documents are several
and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the
obligations of any other Buyer under any Transaction Document.  Nothing contained herein or in any other Transaction Document,
and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges
that the Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or
create a presumption that the Buyers are in any way acting in concert or as a group or entity, and the Company shall not assert
any such claim with respect to such obligations or the transactions contemplated by the Transaction Documents or any matters,
and the Company acknowledges that the Buyers are not acting in concert or as a group, and the Company shall not assert any such
claim, with respect to such obligations or the transactions contemplated by the Transaction Documents.  The decision of each
Buyer to purchase Securities pursuant to the Transaction Documents has been made by such Buyer independently of any other Buyer. 
Each Buyer acknowledges that no other Buyer has acted as agent for such Buyer in connection with such Buyer making its investment
hereunder and that no other Buyer will be acting as agent of such Buyer in connection with monitoring such Buyer’s investment
in the Securities or enforcing its rights under the Transaction Documents.  The Company and each Buyer confirms that each
Buyer has independently participated with the Company and its Subsidiaries in the negotiation of the transaction contemplated
hereby with the advice of its own counsel and advisors.  Each Buyer shall be entitled to independently protect and enforce
its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. 
The use of a single agreement to effectuate the purchase and sale of the Securities contemplated hereby was solely in the control
of the Company, not the action or decision of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries
and not because it was required or requested to do so by any Buyer.  It is expressly understood and agreed that each provision
contained in this Agreement and in each other Transaction Document is between the Company, each Subsidiary and a Buyer, solely,
and not between the Company, its Subsidiaries and the Buyers collectively and not between and among the Buyers.

 

(r) Performance
Date.  If the date by which any obligation under any of the Transaction Documents must be performed occurs on a day other
than a Business Day, then the date by which such performance is required shall be the next Business Day following such date.

 

(s) Enforcement
Fees.  The Company agrees to pay all costs and expenses of the Buyers reasonably incurred as a result of enforcement
of the Transaction Documents and the collection of any amounts owed to the Buyers hereunder (whether in cash, equity or otherwise),
including, without limitation, reasonable attorneys’ fees and expenses.

 

[signature
pages follow]

 

    42

     

    

 

IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Agreement to be duly
executed as of the date first written above.

 

	 	COMPANY:
	 	 
	 	WORKHORSE
    GROUP INC.
	 	 
	 	By:	 
	 	 	Name: 	 Duane
    A. Hughes
	 	 	Title:	 Chief
    Executive Officer

 

    43

     

    

 

IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Agreement to be duly
executed as of the date first written above.

 

	 

        
	BUYER:
	 	 
	 	HT
    INVESTMENTS MA, LLC
	 	 	 
	 	By:	 
	 	 	Name: 	  Eric
    Helenek
	 	 	Title:	  Authorized
    Signatory

 

 

    44

     

    

 

SCHEDULE
OF BUYERS

 

	(1)	 	(2)	 	 	(3)		 	 	(4)		 	(5)
	Buyer	 	Address and Facsimile Number	 	 	Aggregate Principal Amount of Convertible Notes	 	 	 	Aggregate Purchase Price of Convertible Notes	 	 	Legal Representative’s Address and Facsimile Number
	HT Investments MA, LLC	 	High Trail Capital
 221 River Street, 9th Floor
 Hoboken, NJ 07030
 Attn: Eric Helenek
 E-Mail: notices@hightrailcap.com
	 	$	70,000,000	 	 	$	69,000,000	 	 	Latham & Watkins LLP 12670 High Bluff Drive 
San Diego, CA 92130 
Telephone: (858) 523-5400 
Facsimile: (858) 523-5450 
Attention: Michael E. Sullivan, Esq.
	TOTAL	 	 	 	$	70,000,000	 	 	$	69,000,000	 	 	 

 

    45

     

    

 

Exhibit
A

 

Form
of Senior Secured Convertible Note

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

     

    

 

Exhibit
B

 

Form
of Security Agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

     

    

 

Exhibit
C

 

Form
of Voting Agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

     

    

 

Exhibit
D

 

Form
of Perfection Certificatecik1811414-ex41_12.htm

Exhibit 4.1

WARRANT AGREEMENT

between

KENSINGTON CAPITAL ACQUISITION CORP.

and

CONTINENTAL STOCK TRANSFER & TRUST COMPANY

THIS WARRANT AGREEMENT (this “Agreement”), dated as of June 25, 2020, is by and between Kensington Capital Acquisition Corp., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”, also referred to herein as the “Transfer Agent”).

WHEREAS, on June 25, 2020, the Company entered into that certain Private Placement Warrants Purchase Agreement with Kensington Capital Sponsor LLC, a Delaware limited liability company (the “Sponsor”), pursuant to which the Sponsor will purchase 5,975,000 redeemable warrants (or up to 6,575,000 redeemable warrants if the Over-allotment Option (as defined below) in connection with the Offering (as defined below) is exercised in full) simultaneously with the closing of the Offering bearing the legend set forth in Exhibit B hereto (the “Private Placement Warrants”) at a purchase price of $1.00 per Private Placement Warrant; and

WHEREAS, in order to finance the Company’s transaction costs in connection with an intended initial Business Combination (as defined below), the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as the Company may require, of which up to $1,500,000 of such loans may be convertible into up to an additional 1,500,000 Private Placement Warrants at a price of $1.00 per warrant (the “Working Capital Warrants”); and

WHEREAS, the Company is engaged in an initial public offering (the “Offering”) of units of the Company’s equity securities, each such unit comprised of one share of Common Stock (as defined below) and one-half of one Public Warrant (as defined below) (the “Units”) and, in connection therewith, has determined to issue and deliver up to 10,000,000 warrants (or up to 11,500,000 warrants if the Over-allotment Option is exercised in full) to public investors in the Offering (the “Public Warrants” and, together with the Private Placement Warrants and the Working Capital Warrants, the “Warrants”).  Each whole Warrant entitles the holder thereof to purchase one share of Class A common stock of the Company, par value $0.0001 per share (“Common Stock”), for $11.50 per share, subject to adjustment as described herein; and

WHEREAS, the Company has filed with the Securities and Exchange Commission (the “Commission”) registration statements on Form S-1, Nos.  333-239053 and 333-239445 (together, the “Registration Statement”), and prospectus (the “Prospectus”), for the registration, under the Securities Act of 1933, as amended (the “Securities Act”), of the Units, and the Public Warrants and the Common Stock included in the Units; and

 

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, redemption and exercise of the Warrants; and

WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and

WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent (if a physical certificate is issued), as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:

1.Appointment of Warrant Agent.  The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.

2.Warrants.

2.1Form of Warrant.  Each Warrant shall initially be issued in registered form only.  All of the Public Warrants shall initially be represented by one or more book-entry certificates (each, a “Book-Entry Warrant Certificate”).

2.2Effect of Countersignature.  If a physical certificate is issued, unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant represented by such physical certificate shall be invalid and of no effect and may not be exercised by the holder thereof.

2.3Registration.

2.3.1Warrant Register.  The Warrant Agent shall maintain books (the “Warrant Register”), for the registration of original issuance and the registration of transfer of the Warrants.  Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company.  Ownership of beneficial interests in the Public Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by institutions that have accounts with The Depository Trust Company (the “Depositary”) (such institution, with respect to a Warrant in its account, a “Participant”).

If the Depositary subsequently ceases to make its book-entry settlement system available for the Public Warrants, the Company may instruct the Warrant Agent regarding making other arrangements for book-entry settlement.  In its sole discretion, the Company may instruct the 

2

 

Warrant Agent to deliver to the Depositary (i) written instructions to deliver to the Warrant Agent for cancellation each book-entry Public Warrant and (ii) definitive certificates in physical form evidencing such Warrants (each, a “Definitive Warrant Certificate”) which shall be in the form annexed hereto as Exhibit A.

Physical certificates, if issued, shall be signed by, or bear the facsimile signature of, the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, Secretary or other principal officer of the Company.  In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.

2.3.2Registered Holder.  Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant is registered in the Warrant Register (the “Registered Holder”) as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on any physical certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.

2.4Detachability of Warrants.  The Common Stock and Public Warrants comprising the Units shall begin separate trading on the 52nd day following the date of the Prospectus or, if such 52nd day is not on a day, other than a Saturday, Sunday or federal holiday, on which banks in New York City are generally open for normal business (a “Business Day”), then on the immediately succeeding Business Day following such date, or earlier (the “Detachment Date”) with the consent of UBS Securities LLC and Stifel, Nicolaus & Company, Incorporated, as representatives of the underwriters of the Offering, but in no event shall the Common Stock and the Public Warrants comprising the Units be separately traded until (A) the Company has filed a Current Report on Form 8-K with the Commission containing an audited balance sheet reflecting the receipt by the Company of the gross proceeds of the Offering, including the proceeds received by the Company from the exercise by the underwriters of their right to purchase additional Units in the Offering (the “Over-allotment Option”), if the Over-allotment Option is exercised prior to the filing of the Current Report on Form 8-K, and (B) the Company issues a press release and files with the Commission a Current Report on Form 8-K announcing when such separate trading shall begin.

2.5No Fractional Warrants Other Than as Part of Units.  The Company shall not issue fractional Warrants other than as part of Units, each of which is comprised of one share of Common Stock and one-half of one Public Warrant.  If, upon the detachment of Public Warrants from Units or otherwise, a holder of Warrants would be entitled to receive a fractional Warrant, the Company shall round down to the nearest whole number the number of Warrants to be issued to such holder.

3

 

2.6Private Placement and Working Capital Warrants.  The Private Placement Warrants and Working Capital Warrants shall be identical to the Public Warrants, except that so long as they are held by the Sponsor or initial lender, as applicable or any of their respective Permitted Transferees (as defined below), the Private Placement Warrants and Working Capital Warrants: (i) may be exercised for cash or on a cashless basis, pursuant to subsection 3.3.1(c) hereof, (ii) may not be transferred, assigned or sold until thirty (30) days after the completion by the Company of an initial Business Combination (as defined below), and (iii) shall not be redeemable by the Company pursuant to Section 6.1 hereof; provided, however, that in the case of (ii), the Private Placement Warrants, Working Capital Warrants and any shares of Common Stock held by the Sponsor or any of its Permitted Transferees and issued upon exercise of the Private Placement Warrants or Working Capital Warrants may be transferred by the holders thereof:

(a)to the Company’s officers or directors, any affiliates or family members of any of the Company’s officers or directors, any members of the Sponsor or any affiliates of the members of the Sponsor, any affiliates of the Sponsor or any employees of such affiliates;

(b)in the case of an individual, transfers by gift to a member of  the individual’s immediate family, to a trust, the beneficiary of which is a member of the individual’s immediate family or an affiliate of such person, or to a charitable organization;

(c)in the case of an individual, transfers by virtue of laws of descent and distribution upon death of the individual;

(d)in the case of an individual, transfers pursuant to a qualified domestic relations order;

(e)transfers by private sales or transfers made in connection with the consummation of a Business Combination at prices no greater than the price at which the Warrants were originally purchased;

(f)in the event of the Company’s liquidation prior to the completion of the Company’s initial Business Combination; or

(g)by virtue of the laws of the State of Delaware or the Sponsor’s limited liability company agreement upon dissolution of the Sponsor; or

(h)to the Company for no value for cancellation in connection with the consummation of the Company’s initial Business Combination; or

(i)in the event of the Company’s liquidation, merger, capital stock exchange, reorganization or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property subsequent to the completion of the Company’s initial Business Combination;

4

 

provided, however, that in the case of clauses (a) through (g), these permitted transferees (the “Permitted Transferees”) must enter into a written agreement agreeing to be bound by the transfer restrictions in this Agreement and the other restrictions contained in the letter agreement, dated as of the date hereof, by and among the Company, the Sponsor and the Company’s directors and officers and by the same agreements entered into by the Sponsor with respect to such securities (including provisions relating to voting, the trust account and liquidation distributions described elsewhere in the Prospectus).

2.7Working Capital Warrants.  Each of the Working Capital Warrants shall be identical to the Private Placement Warrants.

3.Terms and Exercise of Warrants.

3.1Warrant Price.  Each Warrant shall, when countersigned by the Warrant Agent (if a physical certificate is issued), entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $11.50 per share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1.  The term “Warrant Price” as used in this Agreement shall mean the price per share at which shares of Common Stock may be purchased at the time a Warrant is exercised.  The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of not less than twenty (20) Business Days, provided, that the Company shall provide at least twenty (20) days prior written notice of such reduction to Registered Holders of the Warrants and, provided further that any such reduction shall be identical among all of the Warrants.

3.2Duration of Warrants.  A Warrant may be exercised only during the period (the “Exercise Period”) commencing on the later of: (i) the date that is thirty (30) days after the first date on which the Company completes a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination, involving the Company and one or more businesses (a “Business Combination”), and (ii) the date that is twelve (12) months from the date of the closing of the Offering, and terminating at 5:00 p.m., New York City time on the earliest to occur of: (x) the date that is five (5) years after the date on which the Company completes its initial Business Combination, (y) the liquidation of the Company if the Company fails to complete a Business Combination, and (z) other than with respect to the Private Placement Warrants and Working Capital Warrants then held by the Sponsor or initial lender, as applicable, or any of their respective Permitted Transferees in connection with a redemption pursuant to Section 6.1 hereof, the Redemption Date (as defined below) as provided in Section 6.3 hereof (the “Expiration Date”); provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in subsection 3.3.2 below with respect to an effective registration statement.  Except with respect to the right to receive the Redemption Price (as defined below) (other than with respect to a Private Placement Warrant or a Working Capital Warrant held by the Sponsor or initial lender, as applicable, or their respective Permitted Transferees, in connection with a redemption pursuant to Section 6.1 hereof) in the event of a redemption (as set forth in Section 6 hereof), each Warrant (other than a Private Placement Warrant or a Working Capital Warrant held by the Sponsor or initial lender, or their respective Permitted Transferees, in the event of a redemption pursuant 

5

 

to Section 6.1 hereof) not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at 5:00 p.m.  New York City time on the Expiration Date.  The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, that the Company shall provide at least twenty (20) days prior written notice of any such extension to Registered Holders of the Warrants and, provided further that any such extension shall be identical in duration among all the Warrants.

3.3Exercise of Warrants.

3.3.1Payment.  Subject to the provisions of the Warrant and this Agreement, a Warrant may be exercised by the Registered Holder thereof by delivering to the Warrant Agent, or at the office of its successor as Warrant Agent, in the Borough of Manhattan, City and State of New York (i) the Definitive Warrant Certificate evidencing the Warrants to be exercised, or, in the case of a Book-Entry Warrant Certificate, the Warrants to be exercised on the records of the Depositary to an account of the Warrant Agent at the Depositary designated for such purposes in writing by the Warrant Agent to the Depositary from time to time, (ii) an election to purchase shares of Common Stock pursuant to the exercise of a Warrant, properly completed and executed by the Registered Holder on the reverse of the Definitive Warrant Certificate or, in the case of a Book-Entry Warrant Certificate, properly delivered by the Participant in accordance with the Depositary’s procedures, and (iii) payment in full of the Warrant Price for each full share of Common Stock as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, the exchange of the Warrant for the shares of Common Stock and the issuance of such shares of Common Stock, as follows:

(a)in lawful money of the United States, in good certified check or good bank draft payable to the Warrant Agent or by wire transfer of immediately available funds;

(b)in the event of a redemption pursuant to Section 6.1 hereof in which the Company’s board of directors (the “Board”) has elected to require all holders of the Warrants to exercise such Warrants on a “cashless basis,” by surrendering the Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the excess of the “Fair Market Value”, as defined in this subsection 3.3.1(b), over the Warrant Price by (y) the Fair Market Value.  Solely for purposes of this subsection 3.3.1(b), Section 6.2 and Section 6.4, the “Fair Market Value” shall mean the average last reported sale price of the Common Stock for the ten (10) trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of the Warrants, pursuant to Section 6 hereof;

6

 

(c)with respect to any Private Placement Warrant or Working Capital Warrant, so long as such Private Placement Warrant or Working Capital Warrant is held by the Sponsor or initial lender, as applicable, or their respective Permitted Transferees, by surrendering the Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the excess of the “Sponsor Fair Market Value”, as defined in this subsection 3.3.1(c), over the Warrant Price by (y) the Sponsor Fair Market Value.  Solely for purposes of this subsection 3.3.1(c), the “Sponsor Fair Market Value” shall mean the average last reported sale price of the Common Stock for the ten (10) trading days ending on the third trading day prior to the date on which notice of exercise of the Private Placement Warrant or Working Capital Warrant is sent to the Warrant Agent;

(d)as provided in Section 6.2 with respect to a Make-Whole Exercise; or

(e)as provided in Section 7.4 hereof.

3.3.2Issuance of Shares of Common Stock on Exercise.  As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company shall issue to the Registered Holder of such Warrant a book-entry position or certificate, as applicable, for the number of full shares of Common Stock to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new book-entry position or countersigned Warrant, as applicable, for the number of shares of Common Stock as to which such Warrant shall not have been exercised.  Notwithstanding the foregoing, the Company shall not be obligated to deliver any shares of Common Stock pursuant to the exercise of a Warrant and shall have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Common Stock underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company’s satisfying its obligations under Section 7.4, or a valid exemption from registration is available.  No Warrant shall be exercisable and the Company shall not be obligated to issue shares of Common Stock upon exercise of a Warrant unless the Common Stock issuable upon such Warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the Registered Holder of the Warrants.  The Company may require holders of Public Warrants to settle the Warrant on a “cashless basis” pursuant to Section 7.4.  If, by reason of any exercise of warrants on a “cashless basis”, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share of Common Stock, the Company shall round down to the nearest whole number, the number of shares of Common Stock to be issued to such holder.

3.3.3Valid Issuance.  All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and non-assessable.

7

 

3.3.4Date of Issuance.  Each person in whose name any book-entry position or certificate, as applicable, for shares of Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares of Common Stock on the date on which the Warrant, or book-entry position representing such Warrant, was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate in the case of a certificated Warrant, except that, if the date of such surrender and payment is a date when the share transfer books of the Company or book-entry system of the Warrant Agent are closed, such person shall be deemed to have become the holder of such shares of Common Stock at the close of business on the next succeeding date on which the share transfer books or book-entry system are open.

3.3.5Maximum Percentage.  A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions contained in this subsection 3.3.5; however, no holder of a Warrant shall be subject to this subsection 3.3.5 unless he, she or it makes such election.  If the election is made by a holder, the Warrant Agent shall not effect the exercise of the holder’s Warrant, and such holder shall not have the right to exercise such Warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the Warrant Agent’s actual knowledge, would beneficially own in excess of 4.8% or 9.8% (or such other amount as a holder may specify) (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such exercise.  For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such person and its affiliates shall include the number of shares of Common Stock issuable upon exercise of the Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock that would be issuable upon (x) exercise of the remaining, unexercised portion of the Warrant beneficially owned by such person and its affiliates and (y) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such person and its affiliates (including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein.  Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  For purposes of the Warrant, in determining the number of outstanding shares of Common Stock, the holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Commission as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  For any reason at any time, upon the written request of the holder of the Warrant, the Company shall, within two (2) Business Days, confirm orally and in writing to such holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of equity securities of the Company by the holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported.  By written notice to the Company, the holder of a Warrant may from time to time increase or decrease the Maximum Percentage applicable to such holder to any other percentage specified in such notice; provided, however, that any such increase shall not be effective until the sixty-first (61st) day after such notice is delivered to the Company.

8

 

4.Adjustments.

4.1Stock Dividends.

4.1.1Split-Ups.  If after the date hereof, and subject to the provisions of Section 4.6 below, the number of outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a split-up of shares of Common Stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in the outstanding shares of Common Stock.  A rights offering to holders of the Common Stock entitling holders to purchase shares of Common Stock at a price less than the “Fair Market Value” (as defined below) shall be deemed a stock dividend of a number of shares of Common Stock equal to the product of (i) the number of shares of Common Stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for the Common Stock) multiplied by (ii) one (1) minus the quotient of (x) the price per share of Common Stock paid in such rights offering divided by (y) the Fair Market Value.  For purposes of this subsection 4.1.1, (i) if the rights offering is for securities convertible into or exercisable for Common Stock, in determining the price payable for Common Stock, there shall be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “Fair Market Value” means the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the shares of Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.

4.1.2Extraordinary Dividends.  If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a distribution in cash, securities or other assets to the holders of the Common Stock on account of such shares of Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible), other than (a) as described in subsection 4.1.1 above, (b) Ordinary Cash Dividends (as defined below), (c) to satisfy the redemption rights of the holders of the Common Stock in connection with a proposed initial Business Combination, (d) to satisfy the redemption rights of the holders of the Common Stock in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the shares of Common Stock included in the Units sold in the Offering if the Company has not completed its initial Business Combination within 24 months from the closing of the Offering or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity, or (e) in connection with the redemption of the shares of Common Stock included in the Units sold in the Offering upon the failure of the Company to complete its initial Business Combination and any subsequent distribution of its assets upon its liquidation (any such non-excluded event being referred to herein as an “Extraordinary Dividend”), then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and/or the fair market value (as determined by the Board, in good faith) of any securities or other assets paid on each share of Common Stock in respect of such Extraordinary Dividend.  For purposes of this subsection 4.1.2, “Ordinary Cash Dividends” means any cash dividend or 

9

 

cash distribution which, when combined on a per share basis, with the per share amounts of all other cash dividends and cash distributions paid on the Common Stock during the 365-day period ending on the date of declaration of such dividend or distribution to the extent it does not exceed $0.50 (being 5% of the offering price of the Units in the Offering) (as adjusted to appropriately reflect any of the events referred to in other subsections of this Section 4 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number of shares of Common Stock issuable on exercise of each Warrant).  Solely for purposes of illustration, if the Company, at a time while the Warrants are outstanding and unexpired, pays a cash dividend of $0.35 per share and previously paid an aggregate of $0.40 of cash dividends and cash distributions on the shares of Class A Common Stock during the 365-day period ending on the date of declaration of such $0.35 per share dividend, then the Warrant Price will be decreased, effectively immediately after the effective date of such $0.35 per share dividend, by $0.25 (the absolute value of the difference between $0.75 per share (the aggregate amount of all cash dividends and cash distributions paid or made in such 365-day period, including such $0.35 dividend) and $0.50 per share (the greater of (x) $0.50 per share and (y) the aggregate amount of all cash dividends and cash distributions paid or made in such 365-day period prior to such $0.35 dividend)).

4.2Aggregation of Shares.  If after the date hereof, and subject to the provisions of Section 4.6 hereof, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock.

4.3Adjustments in Exercise Price.

4.3.1Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in subsection 4.1.1 or Section 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.

4.3.2If (x) the Company issues additional shares of Common Stock or securities convertible into or exercisable or exchangeable for shares of Common Stock for capital raising purposes in connection with the closing of an initial Business Combination at an issue price or effective issue price of less than $9.20 per share (as adjusted for stock splits, stock dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) (with such issue price or effective issue price to be determined in good faith by the Board (and in the case of any such issuance to the Sponsor, the initial stockholders or their affiliates, without taking into account any founder shares (as defined in the Prospectus) held by such stockholders or their affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of an initial Business Combination on 

10

 

the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Common Stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates an initial Business Combination (such price, the “Market Value”) is below $9.20 per share (as adjusted for stock splits, stock dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like), the Warrant Price will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price under Section 6.1 will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.

4.4Replacement of Securities upon Reorganization, etc.  In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change under subsections 4.1.1 or 4.1.2 or Section 4.2 hereof or that solely affects the par value of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the holders of the Warrants shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the Warrants would have received if such holder had exercised his, her or its Warrant(s) immediately prior to such event (the “Alternative Issuance”); provided, however, that (i) if the holders of the Common Stock were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets constituting the Alternative Issuance for which each Warrant shall become exercisable shall be deemed to be the weighted average of the kind and amount received per share by the holders of the Common Stock in such consolidation or merger that affirmatively make such election, and (ii) if a tender, exchange or redemption offer shall have been made to and accepted by the holders of the Common Stock (other than a tender, exchange or redemption offer made by the Company in connection with redemption rights held by stockholders of the Company as provided for in the Company’s amended and restated certificate of incorporation or as a result of the repurchase of shares of Common Stock by the Company if a proposed initial Business Combination is presented to the stockholders of the Company for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act (or any successor rule)) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act (or any successor rule)) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act (or any successor rule)) more than 50% of the outstanding shares of Common Stock, the holder of a Warrant shall be entitled to receive as the Alternative Issuance, the highest amount of cash, securities or other property to which such holder would actually have been entitled as a 

11

 

stockholder if such Warrant holder had exercised the Warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the Common Stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in this Section 4; provided, further, however, that if less than 70% of the consideration receivable by the holders of the Common Stock in the applicable event is payable in the form of shares of Common Stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the Registered Holder properly exercises the Warrant within thirty (30) days following the public disclosure of the consummation of such applicable event by the Company pursuant to a current report on Form 8-K filed with the Commission, the Warrant Price shall be reduced by an amount (in dollars) (but in no event less than zero) equal to the difference of (i) the Warrant Price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined below) minus (B) the Black-Scholes Warrant Value (as defined below).  The “Black-Scholes Warrant Value” means the value of a Warrant immediately prior to the consummation of the applicable event based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets (“Bloomberg”).  For purposes of calculating such amount, (1) Section 6 of this Agreement shall be taken into account, (2) the price of each share of Common Stock shall be the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the effective date of the applicable event, (3) the assumed volatility shall be the 90-day volatility obtained from the HVT function on Bloomberg determined as of the trading day immediately prior to the day of the announcement of the applicable event, and (4) the assumed risk-free interest rate shall correspond to the U.S. Treasury rate for a period equal to the remaining term of the Warrant.  “Per Share Consideration” means (i) if the consideration paid to holders of the Common Stock consists exclusively of cash, the amount of such cash per share of Common Stock, and (ii) in all other cases, the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the effective date of the applicable event.  If any reclassification or reorganization also results in a change in shares of Common Stock covered by subsection 4.1.1, then such adjustment shall be made pursuant to subsection 4.1.1 or Sections 4.2, 4.3 and this Section 4.4.  The provisions of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers.  In no event will the Warrant Price be reduced to less than the par value per share issuable upon exercise of the Warrant.

4.5Notices of Changes in Warrant.  Upon every adjustment of the Warrant Price or the number of shares of Common Stock issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares of Common Stock purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.  Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, the Company shall give written notice of the occurrence of such event to each holder of a Warrant, at the last address set forth for such holder in the Warrant Register, of the record date or the effective date of the event.  Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.

12

 

4.6No Fractional Shares.  Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares of Common Stock upon the exercise of Warrants.  If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round down to the nearest whole number the number of shares of Common Stock to be issued to such holder.

4.7Form of Warrant.  The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares of Common Stock as is stated in the Warrants initially issued pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.

4.8Other Events.  In case any event shall occur affecting the Company as to which none of the provisions of preceding subsections of this Section 4 are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i) avoid an adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case, the Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national standing, which shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to effectuate the intent and purpose of this Section 4 and, if they determine that an adjustment is necessary, the terms of such adjustment.  The Company shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in such opinion.

4.9No Adjustment.  For the avoidance of doubt, no adjustment shall be made to the terms of the Warrants solely as a result of an adjustment to the conversion ratio of the Class B common stock of the Company (the “Class B Common Stock”) into Common Stock or the conversion of the Class B Common Stock into Common Stock, in each case, pursuant to the Company’s amended and restated certificate of incorporation, as amended from time to time.

5.Transfer and Exchange of Warrants.

5.1Registration of Transfer.  The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, in the case of certificated warrants, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer.  Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent.  In the case of certificated warrants, the Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.

13

 

5.2Procedure for Surrender of Warrants.  Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend (as in the case of the Private Placement Warrants and Working Capital Warrants), the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange thereof until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend.

5.3Fractional Warrants.  The Warrant Agent shall not be required to effect any registration of transfer or exchange which shall result in the issuance of a warrant certificate or book entry position for a fraction of a warrant, except as part of the Units.

5.4Service Charges.  No service charge shall be made for any exchange or registration of transfer of Warrants.

5.5Warrant Execution and Countersignature.  If a physical certificate is issued, the Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, shall supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.

5.6Transfer of Warrants.  Prior to the Detachment Date, the Public Warrants may be transferred or exchanged only together with the Unit in which such Warrant is included, and only for the purpose of effecting, or in conjunction with, a transfer or exchange of such Unit.  Furthermore, each transfer of a Unit on the register relating to such Units shall operate also to transfer the Warrants included in such Unit.  Notwithstanding the foregoing, the provisions of this Section 5.6 shall have no effect on any transfer of Warrants on and after the Detachment Date.

6.Redemption.

6.1Redemption of Warrants for when the price per share of Common Stock equals or exceeds $18.00.  Subject to Section 6.5 hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time while they are exercisable and prior to their expiration, at the office of the Warrant Agent, upon notice to the Registered Holders of the Warrants, as described in Section 6.3 below, at the price (the “Redemption Price”) of $0.01 per Warrant, provided that the last reported sales price of the Common Stock (or security other than Common Stock into which the Common Stock has been converted or exchanged for in the event that the Company is not the surviving company in its initial Business Combination) reported has been at least $18.00 per share (subject to adjustment in compliance with Section 4 hereof), on each of twenty (20) trading days within the thirty (30) trading-day period ending on the third Business Day prior to the date on which notice of the redemption is given and provided that there is an effective registration statement covering the issuance of the shares of Common Stock (or security other than Common Stock into which the Common Stock 

14

 

has been converted or exchanged for in the event that the Company is not the surviving company in its initial Business Combination) issuable upon exercise of the Warrants, and a current prospectus relating thereto, available throughout the 30-day Redemption Period (as defined in Section 6.3 below) or the Company has elected to require the exercise of the Warrants on a “cashless basis” pursuant to subsection 3.3.1.

6.2Redemption of Warrants when the price per share of Common Stock equals or exceeds $18.00.  Not less than all of the outstanding Warrants may be redeemed, at the option of the Company, commencing ninety (90) days after they are first exercisable and prior to their expiration, at the office of the Warrant Agent, upon notice to the Registered Holders of the Warrants, as described in Section 6.3 below, at a Redemption Price of $0.10 per Warrant, provided that the last reported sales price of the Common Stock (or security other than Common Stock into which the Common Stock has been converted or exchanged for in the event that the Company is not the surviving company in its initial Business Combination) reported has been at least $10.00 per share (subject to adjustment in compliance with Section 4 hereof), on the trading day prior to the date on which notice of the redemption is given, provided that the Private Placement warrants are also concurrently called for redemption at the same price as the outstanding Public Warrants, and provided that there is an effective registration statement covering the issuance of the Common Stock (or security other than Common Stock into which the Common Stock has been converted or exchanged for in the event that the Company is not the surviving company in its initial Business Combination) issuable upon exercise of the Warrants, and a current prospectus relating thereto, available throughout the 30-day Redemption Period (as defined in Section 6.3 below).  During the Redemption Period in connection with a redemption pursuant to this Section 6.2, Registered Holders of the Warrants may elect to exercise their Warrants on a “cashless basis” pursuant to subsection 3.3.1 and receive a number of shares of Common Stock (or security other than Common Stock into which the Common Stock has been converted or exchanged for in the event that the Company is not the surviving company in its initial Business Combination) determined by reference to the table below, based on the Redemption Date (calculated for purposes of the table as the period to expiration of the Warrants) and the “Fair Market Value” (as such term is defined in subsection 3.3.1(b)) (a “Make-Whole Exercise”).

15

 

 

	
 
	
Fair Market Value of Class A Common Stock

	
Redemption Date (period to expiration of warrants)
	
≤$10.00
	
$11.00
	
$12.00
	
$13.00
	
$14.00
	
$15.00
	
$16.00
	
$17.00
	
≥$18.00

	
57 months
	
0.257
	
0.277
	
0.294
	
0.310
	
0.324
	
0.337
	
0.348
	
0.358
	
0.365

	
54 months
	
0.252
	
0.272
	
0.291
	
0.307
	
0.322
	
0.335
	
0.347
	
0.357
	
0.365

	
51 months
	
0.246
	
0.268
	
0.287
	
0.304
	
0.320
	
0.333
	
0.346
	
0.357
	
0.365

	
48 months
	
0.241
	
0.263
	
0.283
	
0.301
	
0.317
	
0.332
	
0.344
	
0.356
	
0.365

	
45 months
	
0.235
	
0.258
	
0.279
	
0.298
	
0.315
	
0.330
	
0.343
	
0.356
	
0.365

	
42 months
	
0.228
	
0.252
	
0.274
	
0.294
	
0.312
	
0.328
	
0.342
	
0.355
	
0.364

	
39 months
	
0.221
	
0.246
	
0.269
	
0.290
	
0.309
	
0.325
	
0.340
	
0.354
	
0.364

	
36 months
	
0.213
	
0.239
	
0.263
	
0.285
	
0.305
	
0.323
	
0.339
	
0.353
	
0.364

	
33 months
	
0.205
	
0.232
	
0.257
	
0.280
	
0.301
	
0.320
	
0.337
	
0.352
	
0.364

	
30 months
	
0.196
	
0.224
	
0.250
	
0.274
	
0.297
	
0.316
	
0.335
	
0.351
	
0.364

	
27 months
	
0.185
	
0.214
	
0.242
	
0.268
	
0.291
	
0.313
	
0.332
	
0.350
	
0.364

	
24 months
	
0.173
	
0.204
	
0.233
	
0.260
	
0.285
	
0.308
	
0.329
	
0.348
	
0.364

	
21 months
	
0.161
	
0.193
	
0.223
	
0.252
	
0.279
	
0.304
	
0.326
	
0.347
	
0.364

	
18 months
	
0.146
	
0.179
	
0.211
	
0.242
	
0.271
	
0.298
	
0.322
	
0.345
	
0.363

	
15 months
	
0.130
	
0.164
	
0.197
	
0.230
	
0.262
	
0.291
	
0.317
	
0.342
	
0.363

	
12 months
	
0.111
	
0.146
	
0.181
	
0.216
	
0.250
	
0.282
	
0.312
	
0.339
	
0.363

	
9 months
	
0.090
	
0.125
	
0.162
	
0.199
	
0.237
	
0.272
	
0.305
	
0.336
	
0.362

	
6 months
	
0.065
	
0.099
	
0.137
	
0.178
	
0.219
	
0.259
	
0.296
	
0.331
	
0.362

	
3 months
	
0.034
	
0.065
	
0.104
	
0.150
	
0.197
	
0.243
	
0.286
	
0.326
	
0.361

	
0 months
	
___
	
___
	
0.042
	
0.115
	
0.179
	
0.233
	
0.281
	
0.323
	
0.361

 

The exact Fair Market Value and Redemption Date (as defined below) may not be set forth in the table above, in which case, if the Fair Market Value is between two values in the table or the Redemption Date is between two redemption dates in the table, the number of shares of Common Stock to be issued for each Warrant exercised in a Make-Whole Exercise will be determined by a straight-line interpolation between the number of shares set forth for the higher and lower Fair Market Values and the earlier and later redemption dates, as applicable, based on a 365- or 366-day year, as applicable.

The stock prices set forth in the column headings of the table above shall be adjusted as of any date on which the number of shares issuable upon exercise of a Warrant is adjusted pursuant to Section 4.  The adjusted stock prices in the column headings shall equal the stock prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise of a Warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a Warrant as so adjusted.  The number of shares in the table above shall be adjusted in the same manner and at the same time as the number of shares issuable upon exercise of a Warrant.  In no event will the number of shares issued in connection with a Make-Whole Exercise exceed 0.365 shares of Common Stock per Warrant (subject to adjustment).

6.3Date Fixed for, and Notice of, Redemption.  In the event that the Company elects to redeem all of the Warrants pursuant to Section 6.1 or 6.2, the Company shall fix a date for the redemption (the “Redemption Date”).  Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than thirty (30) days prior to the Redemption Date (the “30-day Redemption Period”) to the Registered Holders of the Warrants to be redeemed at their last addresses as they shall appear on the registration books.  Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Registered Holder received such notice.

16

 

6.4Exercise After Notice of Redemption.  The Warrants may be exercised, for cash (or on a “cashless basis” in accordance with subsection 3.3.1(b) or Section 6.2 of this Agreement) at any time after notice of redemption shall have been given by the Company pursuant to Section 6.3 hereof and prior to the Redemption Date.  In the event that the Company determines to require all holders of Warrants to exercise their Warrants on a “cashless basis” pursuant to subsection 3.3.1, the notice of redemption shall contain the information necessary to calculate the number of shares of Common Stock to be received upon exercise of the Warrants, including the “Fair Market Value” (as such term is defined in subsection 3.3.1(b) hereof) in such case.  On and after the Redemption Date, the record holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.

6.5Exclusion of Private Placement Warrants and Working Capital Warrants.  The Company agrees that the redemption rights provided in Section 6.1 hereof shall not apply to the Private Placement Warrants or the Working Capital Warrants if at the time of the redemption such Private Placement Warrants or the Working Capital Warrants continue to be held by the Sponsor, the initial lender, as applicable, or their respective Permitted Transferees.  However, once such Private Placement Warrants or Working Capital Warrants are transferred (other than to Permitted Transferees in accordance with Section 2.5), the Company may redeem the Private Placement Warrants and the Working Capital Warrants pursuant to Section 6.1 hereof, provided that the criteria for redemption are met, including the opportunity of the holder of any such Private Placement Warrants and Working Capital Warrants to exercise the Private Placement Warrants or Working Capital Warrants prior to redemption pursuant to Section 6.4.  Private Placement Warrants or Working Capital Warrants that are transferred to persons other than Permitted Transferees shall upon such transfer cease to be Private Placement Warrants or Working Capital Warrants and shall become Public Warrants under this Agreement.

7.Other Provisions Relating to Rights of Holders of Warrants.

7.1No Rights as Stockholder.  A Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter.

7.2Lost, Stolen, Mutilated, or Destroyed Warrants.  If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed.  Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.

7.3Reservation of Common Stock.  The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.

17

 

7.4Registration of Common Stock; Cashless Exercise at Company’s Option.

7.4.1Registration of the Common Stock.  The Company agrees that as soon as practicable, but in no event later than twenty (20) Business Days after the closing of its initial Business Combination, it shall use its commercially reasonable efforts to file with the Commission a registration statement for the registration, under the Securities Act, of the issuance of the shares of Common Stock issuable upon exercise of the Warrants.  The Company shall use its commercially reasonable efforts to cause the same to become effective within sixty (60) days after the closing of the Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Warrants in accordance with the provisions of this Agreement.  If any such registration statement has not been declared effective by the 60th Business Day following the closing of the Business Combination, holders of the Warrants shall have the right, during the period beginning on the 61st Business Day after the closing of the Business Combination and ending upon such registration statement being declared effective by the Commission, and during any other period when the Company shall fail to have maintained an effective registration statement covering the shares of Common Stock issuable upon exercise of the Warrants, to exercise such Warrants on a “cashless basis,” by exchanging the Warrants (in accordance with Section 3(a)(9) of the Securities Act (or any successor rule) or another exemption) for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the excess of the “Fair Market Value” (as defined below) over the Warrant Price by (y) the Fair Market Value.  Solely for purposes of this subsection 7.4.1, “Fair Market Value” shall mean the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the date that notice of exercise is received by the Warrant Agent from the holder of such Warrants or its securities broker or intermediary.  The date that notice of cashless exercise is received by the Warrant Agent shall be conclusively determined by the Warrant Agent.  In connection with the “cashless exercise” of a Public Warrant, the Company shall, upon request, provide the Warrant Agent with an opinion of counsel for the Company (which shall be an outside law firm with securities law experience) stating that (i) the exercise of the Warrants on a cashless basis in accordance with this subsection 7.4.1 is not required to be registered under the Securities Act and (ii) the shares of Common Stock issued upon such exercise shall be freely tradable under United States federal securities laws by anyone who is not an affiliate (as such term is defined in Rule 144 under the Securities Act (or any successor rule)) of the Company and, accordingly, shall not be required to bear a restrictive legend.  Except as provided in subsection 7.4.2, for the avoidance of any doubt, unless and until all of the Warrants have been exercised, the Company shall continue to be obligated to comply with its registration obligations under the first three sentences of this subsection 7.4.1.

18

 

7.4.2Cashless Exercise at Company’s Option.  If the Common Stock is at the time of any exercise of a Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act (or any successor rule), the Company may, at its option, (i) require holders of Public Warrants who exercise Public Warrants to exercise such Public Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act (or any successor rule) as described in subsection 7.4.1 and (ii) in the event the Company so elects, the Company shall (x) not be required to file or maintain in effect a registration statement for the registration, under the Securities Act, of the Common Stock issuable upon exercise of the Warrants, notwithstanding anything in this Agreement to the contrary, and (y) use its best efforts to register or qualify for sale the Common Stock issuable upon exercise of the Public Warrants under the blue sky laws of the state of residence of the exercising Public Warrant holder to the extent an exemption is not available.

8.Concerning the Warrant Agent and Other Matters.

8.1Payment of Taxes.  The Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of the Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares of Common Stock.

8.2Resignation, Consolidation, or Merger of Warrant Agent.

8.2.1Appointment of Successor Warrant Agent.  The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company.  If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent.  If the Company shall fail to make such appointment within a period of thirty (30) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant (who shall, with such notice, submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost.  Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority.  After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.

19

 

8.2.2Notice of Successor Warrant Agent.  In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the Transfer Agent for the Common Stock not later than the effective date of any such appointment.

8.2.3Merger or Consolidation of Warrant Agent.  Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act.

8.3Fees and Expenses of Warrant Agent.

8.3.1Remuneration.  The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and shall, pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.

8.3.2Further Assurances.  The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.

8.4Liability of Warrant Agent.

8.4.1Reliance on Company Statement.  Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer, Chief Financial Officer, Secretary or Chairman of the Board of the Company and delivered to the Warrant Agent.  The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.

8.4.2Indemnity.  The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith.  The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement, except as a result of the Warrant Agent’s gross negligence, willful misconduct or bad faith.

20

 

8.4.3Exclusions.  The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof).  The Warrant Agent shall not be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant.  The Warrant Agent shall not be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares of Common Stock shall, when issued, be valid and fully paid and non-assessable.

8.5Acceptance of Agency.  The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all monies received by the Warrant Agent for the purchase of shares of Common Stock through the exercise of the Warrants.

8.6Waiver.  The Warrant Agent has no right of set-off or any other right, title, interest or claim of any kind (“Claim”) in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date hereof, by and between the Company and the Warrant Agent as trustee thereunder) and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever.  The Warrant Agent hereby waives any and all Claims against the Trust Account and any and all rights to seek access to the Trust Account.

9.Miscellaneous Provisions.

9.1Successors.  All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.

9.2Notices.  Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:

Kensington Capital Acquisition Corp.
1400 Old Country Road

Suite 301
Westbury, New York 11590
Attention: Daniel Huber

With a copy in each case to:

Hughes Hubbard & Reed LLP
One Battery Park Plaza
New York, New York 10004
Attn: Charles A. Samuelson
Gary J. Simon

21

 

Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:

Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Compliance Department

With a copy in each case to:

Hughes Hubbard & Reed LLP
One Battery Park Plaza
New York, New York 10004
Attn: Charles A. Samuelson
Gary J. Simon

and

Skadden, Arps, Slate, Meagher & Flom LLP
One Manhattan West
New York, New York 10001
Attn: David J. Goldschmidt
Gregg A. Noel

and

UBS Securities LLC

1285 Avenue of Americas

New York, New York 10019

Attn: Carlos Alvarez

and

Stifel, Nicolaus & Company, Incorporated

787 7th Avenue, 11th Floor

New York, New York 10019

Attn: Syndicate

9.3Applicable Law.  The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.  The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.  The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

22

 

9.4Persons Having Rights under this Agreement.  Nothing in this Agreement shall be construed to confer upon, or give to, any person or corporation other than the parties hereto and the Registered Holders of the Warrants any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof.  All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants.

9.5Examination of the Warrant Agreement.  A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the Registered Holder of any Warrant.  The Warrant Agent may require any such holder to submit his Warrant for inspection by it.

9.6Counterparts.  This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

9.7Effect of Headings.  The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.

9.8Amendments.  This Agreement may be amended by the parties hereto without the consent of any Registered Holder for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the Registered Holders.  All other modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period, shall require the vote or written consent of the Registered Holders of 50% of the then outstanding Public Warrants, and, solely with respect to any amendment to the terms of, or any provision of this Agreement with respect to the Private Placement Warrants or Working Capital Warrants, 50% of the number of then outstanding Private Placement Warrants or Working Capital Warrants, as applicable.  Notwithstanding the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively, without the consent of the Registered Holders.

9.9Severability.  This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof.  Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

Exhibit A Form of Warrant Certificate

Exhibit B Legend — Private Placement Warrants

23

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

	
 
	
 
	
 

	
KENSINGTON CAPITAL ACQUISITION CORP.

	
 
	
 

	
By:
	
 
	
 /s/ Daniel Huber

	
Name:
	
 
	
Daniel Huber

	
Title:
	
 
	
CFO

	
 

	
CONTINENTAL STOCK TRANSFER &

	
TRUST COMPANY, as Warrant Agent

	
 
	
 

	
By:
	
 
	
 /s/ Ana Gois

	
Name:
	
 
	
Ana Gois

	
Title:
	
 
	
Vice President

 

24

 

EXHIBIT A

Form of Warrant Certificate

[FACE]

Number

Warrants

 

THIS WARRANT SHALL BE VOID IF NOT EXERCISED PRIOR TO

THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR

IN THE WARRANT AGREEMENT DESCRIBED BELOW

KENSINGTON CAPITAL ACQUISITION CORP.

Incorporated Under the Laws of the State of Delaware

CUSIP [•]

Warrant Certificate

This Warrant Certificate certifies that             , or registered assigns, is the registered holder of             warrant(s) evidenced hereby (the “Warrants” and each, a “Warrant”) to purchase shares of Class A common stock, $0.0001 par value per share (“Common Stock”), of Kensington Capital Acquisition Corp., a Delaware corporation (the “Company”).  Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and non-assessable shares of Common Stock as set forth below, at the exercise price (the “Exercise Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless exercise” as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement.

Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.

Each whole Warrant is initially exercisable for one fully paid and non-assessable share of Common Stock.  No fractional shares will be issued upon exercise of any Warrant.  If, upon the exercise of a Warrant, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number of the number of shares of Common Stock to be issued to the holder.  The number of shares of Common Stock issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.

The initial Exercise Price per share of Common Stock for any Warrant is equal to $11.50 per share.  The Exercise Price is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.  The Warrants may be redeemed subject to certain conditions as set forth in the Warrant Agreement.

A-1

 

Subject to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such Exercise Period, such Warrants shall become void.

Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully set forth at this place.

This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.

This Warrant Certificate shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles thereof.

 

	
 
	
 
	
 

	
KENSINGTON CAPITAL ACQUISITION CORP.

	
 
	
 
	
 

	
 
	
 

	
By:
	
 
	
 

	
Name:
	
 
	
Daniel Huber

	
Title:
	
 
	
CFO

	
 
	
 
	
 

	
 

	
CONTINENTAL STOCK TRANSFER

	
& TRUST COMPANY, as Warrant Agent

	
 
	
 
	
 

	
 
	
 

	
By:
	
 
	
 

	
Name:
	
 
	
Ana Gois

	
Title:
	
 
	
Vice President

 

A-2

 

Form of Warrant Certificate

[Reverse]

The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive shares of Common Stock and are issued or to be issued pursuant to a Warrant Agreement dated as of June 25, 2020 (the “Warrant Agreement”), duly executed and delivered by the Company to Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words “holders” or “holder” meaning the Registered Holders or Registered Holder) of the Warrants.  A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company.  Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.

Warrants may be exercised at any time during the Exercise Period set forth in the Warrant Agreement.  The holder of Warrants evidenced by this Warrant Certificate may exercise them by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon properly completed and executed, together with payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless exercise” as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent.  In the event that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number of Warrants not exercised.

Notwithstanding anything else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement covering the shares of Common Stock to be issued upon exercise is effective under the Securities Act, or a valid exemption from registration is available, and (ii) a prospectus thereunder relating to the shares of Common Stock is current, except through “cashless exercise” as provided for in the Warrant Agreement.

The Warrant Agreement provides that upon the occurrence of certain events the number of shares of Common Stock issuable upon exercise of the Warrants set forth on the face hereof may, subject to certain conditions, be adjusted.  If, upon exercise of a Warrant, the holder thereof would be entitled to receive a fractional interest in a share of Common Stock, the Company shall, upon exercise, round down to the nearest whole number of shares of Common Stock to be issued to the holder of the Warrant.

Warrant Certificates, when surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate a like number of Warrants.

A-3

 

Upon due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in connection therewith.

The Company and the Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.  Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.

A-4

 

Election to Purchase

(To Be Executed Upon Exercise of Warrant)

The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive                shares of Common Stock and herewith tenders payment for such shares of Common Stock to the order of Kensington Capital Acquisition Corp.  (the “Company”) in the amount of $                 in accordance with the terms hereof.  The undersigned requests that a certificate for such shares of Common Stock be registered in the name of                , whose address is                and that such shares of Common Stock be delivered to                 whose address is                .  If said number of shares of Common Stock is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares of Common Stock be registered in the name of                 , whose address is                 and that such Warrant Certificate be delivered to                , whose address is                .

In the event that the Warrant has been called for redemption by the Company pursuant to Section 6 of the Warrant Agreement and the Company has required cashless exercise pursuant to Section 6.4 of the Warrant Agreement, the number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(b) and Section 6.4 of the Warrant Agreement.

In the event that the Warrant has been called for redemption by the Company pursuant to Section 6.2 of the Warrant Agreement and a holder thereof elects to exercise its Warrant pursuant to a Make-Whole Exercise, the number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with Section 6.2 of the Warrant Agreement.

In the event that the Warrant is a Private Placement Warrant that is to be exercised on a “cashless” basis pursuant to subsection 3.3.1(c) of the Warrant Agreement, the number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(c) of the Warrant Agreement.

In the event that the Warrant is to be exercised on a “cashless” basis pursuant to Section 7.4 of the Warrant Agreement, the number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the Warrant Agreement.

In the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares of Common Stock that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive shares of Common Stock.  If said number of shares is less than all of the shares of Common Stock purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares of Common Stock be registered in the name of                 , whose address is                and that such Warrant Certificate be delivered to                 , whose address is                 .

[Signature Page Follows]

A-5

 

 

	
 
	
 
	
 
	
 
	
 

	
Date:             , 20
	
 
	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(Signature)

	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

(Address)

	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

(Tax Identification Number)

	
 
	
 
	
 

	
Signature Guaranteed:
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C.  RULE 17Ad-15 (OR ANY SUCCESSOR RULE)).

 

A-6

 

EXHIBIT B

LEGEND

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.  IN ADDITION, SUBJECT TO ANY ADDITIONAL LIMITATIONS ON TRANSFER DESCRIBED IN THE LETTER AGREEMENT BY AND AMONG KENSINGTON CAPITAL ACQUISITION CORP.  (THE “COMPANY”), KENSINGTON CAPITAL SPONSOR LLC AND THE OTHER PARTIES THERETO, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE THAT IS THIRTY (30) DAYS AFTER THE DATE UPON WHICH THE COMPANY COMPLETES ITS INITIAL BUSINESS COMBINATION (AS DEFINED IN SECTION 3 OF THE WARRANT AGREEMENT REFERRED TO HEREIN) EXCEPT TO A PERMITTED TRANSFEREE (AS DEFINED IN SECTION 2 OF THE WARRANT AGREEMENT) WHO AGREES IN WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.

SECURITIES EVIDENCED BY THIS CERTIFICATE AND SHARES OF CLASS A COMMON STOCK OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.”

 

	
No.
	
  
	
Warrants

 

B-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00311-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00311-of-00352.parquet"}]]