Document:

Exhibit 10.1

 

Execution Version

SECOND
AMENDMENT TO CREDIT AGREEMENT

 

This
SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made and entered into as of April 1, 2019
by and among Workhorse Group Inc., a Nevada corporation (the “Borrower”), Wilmington Trust, National Association,
in its capacity as agent (the “Agent”), and the Lenders (as defined below) party hereto.

 

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

 

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

 

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

 

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

 

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

 

2. Amendment
to Section 1.1. The following definitions are hereby amended and restated as follows:

 

“Debt
Service Coverage Ratio” means the ratio, as of any date of determination, of (a) EBITDA for the period of four consecutive
Fiscal Quarters then most recently ended for which financial statements under Section 6.1.1 or Section 6.1.2, as applicable, have
been delivered (or are required to have been delivered), in each case for the Borrower and its Subsidiaries on a consolidated
basis to (b) the sum of (x) Interest Expense and (y) any payments in respect of operating leases, in each case of clauses (a)
and (b) for the Borrower and its Subsidiaries on a consolidated basis; provided that for purposes of calculating the Debt Service
Coverage Ratio (i) as of December 31, 2019, clause (a) above shall be calculated as (X) the consolidated EBITDA of the Borrower
and its Subsidiaries for the Fiscal Quarter ended December 31, 2019 multiplied by (Y) four, (ii) as of March 31, 2020,
clause (a) above shall be calculated as (X) the consolidated EBITDA of the Borrower and its Subsidiaries for the Fiscal Quarters
ended December 31, 2019 and March 31, 2020 multiplied by (Y) two, and (iii) as of June 30, 2020, clause (a) above shall
be calculated as (X) the consolidated EBITDA of the Borrower and its Subsidiaries for the Fiscal Quarters ended December 31, 2019,
March 31, 2020 and June 30, 2020 multiplied by (Y) four divided by three.

 

    -1-

     

    

 

“Interest
Period” means, with respect to each Loan, (a) initially, the period commencing on the date of the making of such Loan
and ending on the day before the Interest Payment Date immediately succeeding the date of the making of such Loan, and (b) thereafter,
the period commencing on the first day after the end of the previous Interest Period and ending on the earlier of (i) the day
before the immediately succeeding Interest Payment Date and (ii) the day before the Maturity Date; provided, however,
that (A) if any Interest Period would end on a day that is not a Business Day, such Interest Period shall be extended (subject
to clauses (C)-(D) below) to the next succeeding Business Day, (B) interest shall accrue at the applicable rate based upon the
LIBOR Rate from and including the first day of each Interest Period to and including the last day of the Interest Period, (C)
any Interest Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business
Day and (D) other than with respect to the initial Interest Period hereunder, with respect to an Interest Period that begins on
the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period), the Interest Period shall end on the last Business Day of the calendar month that is three
months after the date on which the Interest Period began, as applicable.

 

“Total
Leverage Ratio” means the ratio, as of any date of determination, of (a) Funded Debt as of such date to (b) EBITDA for
the period of four consecutive Fiscal Quarters then most recently ended for which financial statements under Section 6.1.1 or
Section 6.1.2, as applicable, have been delivered (or are required to have been delivered), in each case for the Borrower and
its Subsidiaries on a consolidated basis; provided that for purposes of calculating the Total Leverage Ratio (i) as of December
31, 2019, clause (b) above shall be calculated as (X) the consolidated EBITDA of the Borrower and its Subsidiaries for the Fiscal
Quarter ended December 31, 2019 multiplied by (Y) four, (ii) as of March 31, 2020, clause (b) above shall be calculated
as (X) the consolidated EBITDA of the Borrower and its Subsidiaries for the Fiscal Quarters ended December 31, 2019 and March
31, 2020 multiplied by (Y) two, and (iii) as of June 30, 2020, clause (b) above shall be calculated as (X) the consolidated
EBITDA of the Borrower and its Subsidiaries for the Fiscal Quarters ended December 31, 2019, March 31, 2020 and June 30, 2020
multiplied by (Y) four divided by three.

 

3. Amendment
to Section 2.3.3.
Section 2.3.3 of the Credit Agreement is hereby amended and restated as follows:

 

Computation
of Interest. Interest on the Unused Tranche Two Commitment and the Loans shall be computed on the basis of a 360-day year
for the actual number of days elapsed, from the first day to and including the last day of the Interest Period.

 

4. Amendment
to Section 2.4.2.
A new clause (c) to Section 2.4.2 of the Credit Agreement is hereby added as follows:

 

“(c)
If any Loan Party receives Net Cash Proceeds from a sale or disposition of Surefly, Inc. or any portion of its related business
and assets permitted by Section 7.4(b)(i), the Borrower shall notify the Lenders and the Agent thereof. Unless the Required
Lenders shall have sent written notice to the Borrower, by the fourth Business Day after the date on which the applicable Loan
Party received such proceeds, declining receipt of a prepayment under this Section 2.4.2(c), the Borrower shall prepay
outstanding Tranche One Loans within five Business Days after such receipt in an amount equal to 20% of such Net Cash Proceeds;
provided that any prepayment under this Section 2.4.2(c) shall in no event exceed the sum of (i) the Tranche One Loans
outstanding at the time of such prepayment, (ii) all accrued and unpaid interest on the principal amount of the Tranche One Loans
required to be prepaid and (iii) any Prepayment Premium Amount due, pursuant to Section 2.12.2, in connection with such
prepayment.”

 

    -2-

     

    

 

5. Amendment
to Section 2.7. Section 2.7 of the Credit Agreement is hereby amended and restated as follows:

 

“2.7
Application of Payments and Proceeds. Each prepayment of the outstanding Tranche One Loans pursuant to Section 2.4.1
shall be applied to the installments of principal on such Loan in the inverse order of maturity. Each prepayment of the outstanding
Loans pursuant to Section 2.4.2 shall be applied first to the installments of principal on the Tranche One Loans in the
inverse order of maturity and then to the installments of principal on the Tranche Two Loans in the inverse order of maturity;
provided that prepayments pursuant to Section 2.4.2(c) shall be applied only to the installments of principal on the Tranche
One Loans in the inverse order of maturity. Each prepayment of the outstanding Tranche One Loans and/or the Tranche Two Loans
as determined by the Borrower pursuant to Section 2.4.3 shall be applied to the installments of principal on such Loan
in the inverse order of maturity. The Tranche Two Commitment shall be permanently reduced in the amount of any prepayment of Tranche
Two Loans pursuant to Section 2.4.2. If no Loans are outstanding at a time that a mandatory prepayment of Loans is required
under Section 2.4.2(a) or Section 2.4.2(b), then the Tranche Two Commitment shall be permanently reduced in an amount
equal to the Loans that would have otherwise been required to be prepaid. For the avoidance of doubt, the Tranche Two Commitment
shall not be reduced by any prepayment of Tranche Two Loans pursuant to Section 6.9.”

 

6. Amendment
to Section 2.13. Clause (a) of Section 2.13 is hereby amended and restated as follows: “[Reserved.]”.

 

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

 

“7.19.1
Liquidity. Not suffer or permit the Liquidity of the Borrower and its Subsidiaries to be less than $4,000,000 at any time,
on or after April 30, 2019.”

 

8. Amendment
to Section 7.19.2. Section 7.19.2 of the Credit Agreement is hereby amended and restated as follows:

 

    -3-

     

    

 

“7.19.2.
Total Leverage Ratio. Not suffer or permit the Total Leverage Ratio as of the last day of any Fiscal Quarter, commencing
with the Fiscal Quarter ending December 31, 2019, to be greater than the maximum ratio set forth in the table below opposite such
date.

 

	Date	 	Maximum Total

 Leverage Ratio
	 	 	 
	December 31, 2019	 	4.50:1.00
	March 31, 2020	 	3.50:1.00
	June 30, 2020	 	3.50:1.00
	September 30, 2020	 	3.50:1.00
	December 31, 2020	 	3.50:1.00
	March 31, 2021	 	2.50:1.00
	June 30, 2021	 	2.50:1.00
	September 30, 2021	 	2.50:1.00”

 

9. Amendment
to Section 7.19.3. Section 7.19.3 of the Credit Agreement is hereby amended and restated as follows:

 

“7.19.3.
Debt Service Coverage Ratio. Not suffer or permit the Debt Service Coverage Ratio as of the last day of any Fiscal Quarter,
commencing with the Fiscal Quarter ending December 31, 2019, to be greater than the maximum ratio set forth in the table below
opposite such date.

 

	Date	 	Debt Service 

Coverage Ratio
	 	 	 
	December 31, 2019	 	1.25:1.00
	March 31, 2020	 	1.50:1.00
	June 30, 2020	 	1.50:1.00
	September 30, 2020	 	1.50:1.00
	December 31, 2020	 	1.50:1.00
	March 31, 2021	 	1.50:1.00
	June 30, 2021	 	1.50:1.00
	September 30, 2021	 	1.50:1.00”

 

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

 

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

 

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

 

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

 

    -4-

     

    

 

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

 

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

 

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

 

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

 

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

 

[Remainder
of Page Intentionally Left Blank.]

 

    -5-

     

    

 

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

 

	WORKHORSE
                    GROUP INC.

as
the Borrower

	 
	 	 	 
	By:	/s/
    Duane Hughes	 
	 	Name:
    Duane Hughes	 
	 	Title:
    Chief Executive Officer	 

 

	MARATHON
                    STRUCTURED PRODUCT STRATEGIES FUND, LP

MARATHON
BLUE GRASS CREDIT FUND, LP

MARATHON
CENTRE STREET PARTNERSHIP, L.P.

TRS
CREDIT FUND, LP
 as Lenders

 

By:
Marathon Asset Management LP, the investment advisor to each of the entities listed above

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

 

	WILMINGTON
                    TRUST, NATIONAL ASSOCIATION
 as
                    the Agent

	 
	 	 	 
	By:	/s/
    Jamie Roseberg	 
	 	Name:
    Jamie Roseberg	 
	 	Title:
    Banking Officer	 

 

Signature Page to Second Amendment to
Credit Agreement

 

-6-Blueprint

  Exhibit
10.1

 

AMENDED AND RESTATED CREDIT FACILITY AGREEMENT

 

THIS AMENDED AND RESTATED CREDIT FACILITY
AGREEMENT (this “Agreement”), dated as of
March 28, 2019, by and among Flux Power, Inc., a California
corporation (“Borrower”), and Esenjay
Investments, LLC (“Esenjay”), Cleveland
Capital, L.P. (“Cleveland”) and
additional parties who may subsequently become a party to this
Agreement as a lender pursuant to Section 14 hereof
(“Additional
Lenders”, and together with Esenjay and Cleveland, the
“Lenders”).

 

WHEREAS, Borrower and Esenjay entered
into that certain Credit Facility Agreement (“Original
Agreement”), dated as of March 22, 2018 (“Effective
Date”), to provide Borrower with a line of credit (the
“LOC”)
in a maximum principal amount at any time outstanding of up to Five
Million Dollars ($5,000,000); and

 

WHEREAS, the parties hereto desire to
amend and restate the Original Agreement in its entirety to (i) add
Cleveland as an additional lender, (ii) increase the LOC from Five
Million Dollars ($5,000,000) to Seven Million Dollars ($7,000,000),
(iii) extend the maturity date under the Note (as defined below)
from March 31, 2019 to December 31, 2019; and (iv) provide for
additional parties to become a Lender under this
Agreement.

 

NOW, THEREFORE, in consideration of the
above recitals and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, Borrower and
Lenders hereby amend and restate the Original Agreement in its
entirety and agree as follows:

 

 

1.

Credit Facility.

 

(a) Subject to the sole
discretion of each individual Lender, and subject to the terms and
conditions of this Agreement, each of the Lenders severally agrees
to extend a LOC, in the aggregate, of up to Seven Million Dollars
($7,000,000) (the “Advances”) to Borrower
from time to time from the Effective Date until December 31, 2019.
The Advances shall be made pro rata in accordance with each
Lender’s percentage as set forth in Schedule A, subject to
any pro rata adjustments made for Additional Lenders, provided,
however, to the extent such Lender elects not to make an Advance or
the full amount of its right to make an Advance (each event, a
“Shortfall”), the other
Lenders may elect to make up the Shortfall, if any.

 

(b) The Advances shall
be evidenced by separate promissory notes of the Borrower in
substantially the form of Exhibits A-1 and A-2 attached hereto
dated of even date with this Agreement (except for the Note
evidencing Esenjay’s prior Advances to date, which shall be
in the form of the Amended and Restated Promissory Note in
substantially the form attached hereto as Exhibit A-3)
(collectively, the “Notes”), and completed
with appropriate insertions. One Note shall be payable to the order
of each Lender in the principal amount equal to the LOC commitment
or, if less, the outstanding amount of all Advances made by such
Lender, plus interest accrued thereon, as set forth below. All
Advances shall be made pursuant the terms and obligations set forth
in the Note.

 

(c) For the purposes of
the Advances, subject to the limitations, terms and conditions set
forth in the Notes, Borrower may, from time to time, prior to the
Due Date (as defined in the Note), draw down, repay, and re-borrow
on the Note, by giving notice to Lenders of the amount to be
requested to be drawn down.

 

 

 

 

(d) In order to secure
Borrower’s performance under the Note, Borrower will provide
the Lenders with a security interest in substantially all of
Borrower’s tangible and intangible assets in substantially
the form attached hereto as Exhibit B (the “Security Agreement”), the
terms of which are incorporated herein by this
reference.

 

(e) All Advances shall
be used by Borrower for the purchase of inventory and related
operational support expenses.

 

(f) The Note and the
Security Agreement, together with all of the other agreements,
documents, and instruments heretofore or hereafter executed in
connection therewith or with the Loan to be made under this
Agreement, as the same may be amended, supplemented or modified
from time to time, shall collectively be referred to herein as the
“Loan
Documents.”

 

2. Interest Rate and Fees.
Interest and fees shall accrue and be payable on the Loan as set
forth in the Note.

 

3. Representations and Warranties of
Borrower. Borrower represents and warrants to Lender
that:

 

(a) Corporate
Existence and Power.

 

(i) Borrower is a
corporation duly organized, validly existing and in good standing
under the laws of the State of California.

 

(ii) Borrower
has the power and authority to own its properties and assets and to
carry out its business as now being conducted.

 

(iii) Borrower
has the power and authority to execute, deliver and perform the
Loan Documents to which it is a party, to borrow and guaranty money
in accordance with the terms thereof, to execute, deliver and
perform its obligations under the Note and the other Loan Documents
to which it is a party and any other documents made by it as
contemplated hereby, and to grant to Lender liens and security
interests in the Collateral (as defined in the Security Agreement)
as hereby contemplated.

 

(b) Authorization
and Approvals. All corporate
action on the part of Borrower, its board of directors, and
shareholders necessary for the (a) authorization, execution,
delivery and performance by it of the Loan Documents to which it is
a party, and (b) the performance of its obligations under the Loan
Documents, has been taken or will be taken prior to this Agreement.
This Agreement and the other Loan Documents, when executed and
delivered by Borrower, shall constitute the valid and binding
obligations of Borrower, enforceable in accordance with their
respective terms.

 

(c) Pre-existing
business relationship; Experience. Borrower has a
pre-existing business relationship with Lenders and has such
knowledge and experience in financial and business matters: (a) to
be capable of evaluating the merits and risks of the LOC, (b) to
make an informed decision relating thereto, and (c) to protect its
own interests in connection with the transaction contemplated by
this Agreement.

 

(d) Compliance with Laws, Etc. The
execution and delivery of this Agreement and the Note hereunder
does not and will not violate any requirement of law or any
contractual obligation of Borrower.

 

 

2

 

 

(e) Defaults. Borrower is not
currently in default of any contractual obligation that would have
a material adverse effect on Borrower’s business, assets or
financial condition.

 

(f) Litigation. There is no
litigation, arbitration or other proceedings taking place, pending
or to the knowledge of Borrower threatened against Borrower or any
of its assets which questions the validity of this Agreement or the
right of Borrower to enter into it or to consummate the
transactions contemplated hereby.

 

4. Representations and Warranties of Each
of the Lenders. Each of the Lenders severally represents and
warrants to Borrower that:

 

(a) Requisite Power and Authority.
Lender has all of the requisite power, authority, and capacity to
execute, deliver, and comply with the terms of this Agreement, and
such execution, delivery, and compliance does not conflict with, or
constitute a default under, any instruments governing Lender, any
law, regulation or order, or any agreement to which Lender is a
party or by which Lender may be bound. All action on Lender’s
part necessary for the execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby, and the
performance of all obligations of Lender hereunder has been taken.
This Agreement has been duly executed and delivered by
Lender.

 

(b) Pre-existing business relationship;
Experience. Lender has a pre-existing business relationship
with Borrower and has such knowledge and experience in financial
and business matters: (a) to be capable of evaluating the merits
and risks of the loan to Borrower, (b) to make an informed decision
relating thereto, and (c) to protect its own interests in
connection with the transaction contemplated by this
Agreement.

 

5. Notices. Any notice, request,
instruction, or other document to be given hereunder by any party
hereto to any other party will be in writing and will be given by
delivery in person, by facsimile transmission, by email or other
electronic communication, by overnight courier or by registered or
certified mail, postage prepaid (and will be deemed given when
delivered if delivered by hand, when transmission confirmation is
received if delivered by facsimile, three (3) days after mailing if
mailed by United States mail, and one (1) business day after
deposited with an overnight courier service if delivered by
overnight courier), as follows:

 

If to
Borrower:                   
Flux Power, Inc.

Attn:
President

985
Poinsettia Avenue, Suite A

Vista,
CA 92081

rdutt@fluxpwr.com

 

If to
Lender:                       
Esenjay Investments, LLC

Attn:
Howard Williams

500 N.
Water, Suite 1100S

Corpus
Christi, TX 78471

Williams@epc-cc.com

 

Cleveland Capital,
L.P.

Attn:
Wade Massad

1250
Linda St. Suite 304

Rocky
River, OH 44116

 

 

3

 

 

or at
such other address of which any party may, from time to time,
advise the other party by notice in writing given in accordance
with the foregoing. The date of receipt of any such notice shall be
deemed to be the date of delivery or facsimile (with confirmation)
thereof.

 

6. Entire Agreement. This
Agreement, the Loan Documents, and the other agreements entered
into in connection herewith supersede all prior negotiations and
agreements (whether written or oral) and constitute the entire
understanding among the parties hereto.

 

7. Successors. This Agreement
shall inure to the benefit of and be binding upon the parties named
herein and their respective successors and assigns.

 

8. Headings. The section headings
contained in this Agreement are for convenience only and shall not
control or affect the meaning or construction of any of the
provisions of this Agreement.

 

9. Governing Law. This Agreement
shall be construed and enforced in accordance with the laws of the
State of California without reference to principles of conflict of
law and, in the event of any litigation or other dispute in
connection with this Agreement or any of the exhibits attached
hereto, the venue and jurisdiction of which shall be in Los Angeles
County, California.

 

10. Delay, Etc. No delay or
omission to exercise any right, power or remedy accruing to any
party hereto shall impair any such right, power or remedy of such
party nor be construed to be a waiver of any such right, power or
remedy, nor constitute any course of dealing or performance
hereunder.

 

11. Costs and Attorneys’
Fees. If any action, suit, arbitration proceeding or other
proceeding is instituted arising out of this Agreement, the
prevailing party shall recover all of such party’s costs,
including, without limitation, the court costs and reasonable
attorneys’ fees incurred therein, including any and all
appeals or petitions therefrom.

 

12. Waiver and Amendment. Any of
the terms and provisions of this Agreement may be waived at any
time by the party that is entitled to the benefit thereof, but only
by a written instrument executed by such party. This Agreement may
be amended only by an agreement in writing executed by the parties
hereto, provided however, the admission of an “Additional
Lender” shall not require any consent or approval from the
Lenders, and Schedule
A may be amended by the Company from time to time to provide
for Additional Lenders who join as a party to this
Agreement with no consent
or approval required from the Lenders. Upon the admission of a new
Additional Lender, the Company shall provide the existing Lenders
with notice of new Additional Lender and updated Schedule A with the new
adjusted Lender Percentages.

 

13. Consent to Amendment and Restatement;
Effect of Amendment and Restatement. Esenjay, as the
original Lender under the Original Agreement, hereby consents to
the amendment and restatement of the Original Agreement pursuant to
the terms of this Agreement and the amendment or amendment and
restatement of the other Loan Documents. Upon the execution by all
parties to this Agreement, the Original Agreement shall be amended
and restated in its entirety by this Agreement, and the Original
Agreement shall thereafter be of no further force and effect and
shall be deemed replaced and superseded in all respects by this
Agreement.

 

14. Additional Lenders.
Notwithstanding anything to the contrary contained herein, a party
may become a Lender under this Agreement by executing and
delivering an additional counterpart signature page to this
Agreement and thereafter shall be deemed an “Lender”
for all purposes hereunder.

 

15. Counterparts; Electronic
Transmission. This Agreement may be executed in one or more
counterparts (any of which may be delivered by fax or electronic
mail transmission), each of which will for all purposes be deemed
to be an original and all of which will constitute the same
instrument.

 

 

 

4

 

 

IN
WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement effective as of the date first above
written.

 

	
 

	

BORROWER:

 

Flux
Power, Inc.,

a
California corporation

 

 

By:

       Ronald
F. Dutt, Chief Executive Officer

 

 

LENDERS:

 

Esenjay
Investments, LLC

 

 

By:

 

___________________________________

Name

___________________________________

Title

 

 

Cleveland
Capital, L.P.

 

By:

 

___________________________________

Name

___________________________________

Title

 

 

 

 

 

 

	
 

	

ADDITIONAL
LENDER*

 

_____________________________________________

Print
Name

 

By:__________________________________________

Name:                                                                            

Title:___________________                                                                            

Address: 

 

Date:_________________________________________

 

 

 

 

 

 

 

 

 

 

*Pursuant
to Section 14 of the Amended and Restated Credit Facility Agreement
dated March 28, 2019.

 

 

 

 

SCHEDULE A

 

LENDER PERCENTAGES

 

 

 

	

Lenders

 

	

Percentages

 

	

Esenjay
Investments, LLC

 

	

51%*

 

	

Cleveland
Capital, L.P.

 

	

49%*

 

	

__________________________

*Subject
to adjustments based on admission of Additional Lenders from time
to time by the Company.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

EXHIBIT A-1

 

FORM OF SECURED PROMISSORY NOTE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT A-2

 

SECURED PROMISSORY NOTE

 

Cleveland Capital, L.P.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT A-3

 

AMENDED AND RESTATED PROMISSORY NOTE

 

Esenjay Investments, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT B

 

 

SECURITY AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00294-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00294-of-00352.parquet"}]]