Document:

Exhibit

EXECUTION VERSION

EXHIBIT 10.1

SHARED SERVICES AGREEMENT

BY AND BETWEEN

ALICO, INC.

AND

TRAFELET BROKAW CAPITAL MANAGEMENT, L.P.

July 23, 2018

    

THIS SHARED SERVICES AGREEMENT (this “Agreement”) is made and entered into as of this 23rd  day of July, 2018 by and between ALICO, INC., a corporation organized under the laws of the State of Florida (on behalf of itself and its affiliates and subsidiaries, hereinafter jointly referred to as “Purchaser”), and TRAFELET BROKAW CAPITAL MANAGEMENT, L.P., a limited liability partnership organized under the laws of the State of Delaware (“Supplier”). 
RECITALS
WHEREAS, Purchaser requires certain functions and administrative services in New York City, including in connection with Purchaser’s Office of the Chairman, Chief Financial Officer, support staff and certain Board and other meetings;
WHEREAS, Purchaser has requested that Supplier provide such Services (as hereinafter defined) on an at-cost basis;
WHEREAS, the intent and purpose of this Agreement is that Purchaser shall at all times obtain the Services at a cost equal to or less than Purchaser would be able to obtain equivalent services on an arm’s-length basis from a third party; and
WHEREAS, because Supplier is controlled by affiliates of Purchaser, the transactions contemplated herein have been approved by the Audit Committee of the Board of Directors of Purchaser (the “Audit Committee”).
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants hereinafter set forth, the parties agree as follows: 

ARTICLE I
SERVICES PROVIDED
1.1     Description of Services. Subject to all the terms and conditions hereof, during the term of this Agreement, Supplier shall provide or cause to be provided to Purchaser and its subsidiaries the following functional categories of services: 
		
	(a)
	Shared Office Services.  Supplier shall provide Purchaser with, and Purchaser shall purchase from Supplier, a license to use and occupy a portion of Supplier’s office space located at 410 Park Avenue, 17th Floor (or such other space as is mutually agreed by the parties hereto, the “Shared Office”) (the “Shared Office Services”); 

		
	(b)
	Administrative Support.  Supplier shall provide Purchaser with, and Purchaser shall purchase from Supplier, such other services as are attendant to the Shared Office Services, including reception, secretarial services and related facilities services, as requested by Purchaser. 

The above described services and products are referred to hereinafter, collectively, as the “Services.”

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1.2    Warranty Disclaimer.  EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH HEREIN, SUPPLIER MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES, INCLUDING, WITHOUT LIMITATION, WARRANTIES IMPLIED BY LAW OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, REGARDING THIS AGREEMENT, THE PERFORMANCE OF THE SERVICES CONTEMPLATED BY THIS AGREEMENT OR ANY TANGIBLE PROPERTY DELIVERED BY SUPPLIER PURSUANT TO THIS AGREEMENT. 

1.3    Limitation of Liability.  Subject to Section 1.2, neither party shall be liable to the other  or to any other person or entity for (a) any damages of any kind or nature (including compensatory damages) arising out of any act or omission of a party or any person or entity acting on behalf of a party  attributable to or arising in connection with the Services, whether negligent or otherwise, except for such damages attributable to a party’s  fraud, bad faith, gross negligence or willful misconduct or (b) any indirect, punitive, exemplary, remote, speculative or similar damages in excess of compensatory damages of the other arising in connection with the transactions contemplated hereby (other than any such liability with respect to a third-party claim).  

1.4    Information.  The Purchaser shall make available to Supplier any and all information which Supplier shall reasonably deem necessary in order to perform the Services hereunder.

ARTICLE II
COMPENSATION

2.1     Fees.

		
	(a)
	General Shared Service Fees.  In consideration of the Services, during the Term of this Agreement, Purchaser will pay Supplier an amount equal to Supplier’s actual costs of providing the Services as a base shared services fee.  Such base shared services fee shall include internal allocations, as determined by Supplier in consultation with Purchaser, and a prorated portion of any security deposit, rent, utilities, telecommunications, phone, information technology infrastructure and support, leasehold improvements, property taxes, office supplies and similar payments actually paid by Supplier in respect of the Shared Office determined by multiplying the amounts paid by Supplier by the percentage of the Shared Office used by Purchaser.  All such expenses and payments shall be fully supported with reasonable documentation and copies of all such documentation shall be provided to Purchaser upon Purchaser’s reasonable request to the extent required to support such expenses and payments.

		
	(b)
	On or before December 1 of each year of the Term of this Agreement, Supplier and Purchaser shall jointly agree on an estimate of Supplier’s fees for each functional category of Service set forth in Section 1.1(b) to be provided pursuant this Agreement for the next calendar year; provided, that to the extent such fees cannot be determined, as to such unknown fees, Supplier shall set out the basis on which they shall be charged.  It is understood and agreed that all fees charged 

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to Purchaser for any particular month shall be no greater than Supplier’s actual costs of providing such Services during such month, as determined pursuant to Section 2.1(a).  Attached as Annex A is an estimate of such costs, on a monthly basis, during the period beginning on January 1 and ending on December 31, 2018. 

2.2    Invoice and Payment Procedures.  Purchaser shall pay Supplier all fees described herein for Services hereunder on a quarterly basis by means of wire transfer of immediately available funds transfer from Purchaser’s account to Supplier’s designated account. Supplier shall provide Purchaser with a written invoice of charges for such fees and out-of-pocket and pre-paid expenses (unless such expenses are already included in the relevant fees) on a monthly basis. Purchaser shall pay each such invoice within thirty (30) days of receipt.  In the event of any dispute between Supplier and Purchaser over the amounts due for Services rendered, such disputed amounts shall, upon resolution of the dispute, be credited to or debited from Purchaser’s account against future payments for Services or paid in cash after termination of this Agreement.  

2.3    Purchaser Audit Rights.  As reasonably requested by Purchaser (not to exceed once per year) and at Purchaser’s sole expense, Purchaser or its independent auditor may reasonably audit Supplier’s charges or performance under this Agreement.  Purchaser will coordinate any such audits with Supplier and comply with Supplier’s reasonable policies and procedures regarding access to and use of confidential information.

2.4    Certification to Audit Committee.  Once each year during the Term of this Agreement, Purchaser’s management shall certify to the Audit Committee that the Services are being provided by Supplier at cost.  Supplier shall reasonably cooperate with and provide information, upon Purchaser’s reasonable request, to assist Purchaser’s management in making such certification.

ARTICLE III
TERM AND TERMINATION

3.1    Term.   This Agreement shall take effect retroactive from January 1, 2018 and will continue in force until December 31, 2018 (“Initial Term”), subject to earlier termination as provided in Section 3.2 hereof, and thereafter, this Agreement will be automatically renewed for additional periods of one (1) year each (“Additional Term(s)”). 

3.2    Termination.  This Agreement or an entire functional category of Services may be terminated in accordance with the following provisions (Purchaser will have no right to terminate any Services within a specific functional category of Services):

(a)    Either party hereto may terminate this Agreement at any time upon the occurrence of an event of bankruptcy with respect to the other party;

(b)    Either party may terminate this Agreement, or a particular functional category of Services by giving notice in writing to the other party in the event the other party is in material breach of this Agreement and has failed to cure such breach within ninety (90) calendar days of receipt of written 

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notice thereof from the other party; provided, that, to the extent such material breach relates to a specific Service or specific Services, this Agreement may only be terminated with respect to such Service or Services;

(c)    This Agreement, any Service or functional category of Services may be terminated by the mutual written consent of the parties, which mutual consent may terminate this Agreement in its entirety or terminate this Agreement in part by terminating a specific functional category of Services; or
(d)    Purchaser may terminate any or all of the functional categories of Services, described in Section 1.1(b), and only such services, on written notice to Supplier.  The Section 1.1(b) Services that are the subject of such notice shall be terminated as of the last day of the calendar month in which notice is given; provided, that if notice is given after the fifteenth (15th) day of a calendar month, the Service shall terminate on the last day of the calendar month following the month in which notice is given.  In the event such termination would result in a breach by Supplier of a third party obligation, the parties agree to use commercially reasonable efforts to resolve or prevent the breach in a manner which will allow the Purchaser to proceed with termination of the Service.

3.3    Rights and Obligations on Termination.  In the event of termination of this Agreement or a particular functional category of Services for any reason, the parties will have the following rights and obligations:

(a)    Termination will not release either party from the obligation to make payment of all amounts then or thereafter due and owing for Services already provided; and 

(b)    The obligations hereunder which by their terms or clear intent extend beyond termination of this Agreement shall survive termination of this Agreement.

ARTICLE IV
RELATIONSHIP

4.1    General.  Nothing contained in this Agreement shall be construed to give either party the power to direct or control the day-to-day activities of the other party, nor to assume or create any obligation or responsibility, express or implied, on behalf of or in the name of the other party. In fulfilling its obligations under this Agreement, Supplier will be acting as an independent contractor.

ARTICLE V
MISCELLANEOUS
5.1    Notices.  All notices and other communications to be given to any party hereunder shall be sufficiently given for all purposes hereunder if in writing and delivered by hand, courier or overnight delivery service or five (5) days after being mailed by certified or registered mail, return receipt requested, with appropriate postage prepaid, or when received in the form of a facsimile or email transmission and shall be directed to the address set forth below (or at such other address or facsimile number as such party shall designate by like notice):

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As to Supplier:        
Trafelet Brokaw Capital Management, L.P.
410 Park Avenue, 17th Floor
New York, NY 10022 
Attention:  Andrew Loggia 
                
As to Purchaser:
Alico, Inc.
10070 Daniels Interstate Court, Suite 100
Fort Myers, FL 33913
Attention:  CFO John Kiernan
         
5.2    Entire Agreement; Amendments; Assignment.  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof.  This Agreement may not be modified, amended, rescinded, canceled or waived, in whole or in part, except by a written instrument duly executed by the parties hereto.  Neither party shall voluntarily or involuntarily assign its rights or obligations under this Agreement without the prior written approval of the other party. Any such prohibited assignment will be null and void.

5.3    Counterparts.  This Agreement may be executed simultaneously in two (2) or more counterparts, and each such counterpart will be deemed an original hereof, but all such counterparts together will constitute one and the same instrument.

5.4    Waiver.  No failure or delay by either party to take any action or assert any right or remedy hereunder or to enforce strict compliance with any provision hereof will be deemed to be a waiver of, or estopped with respect to, such right, remedy or noncompliance in the event of the continuation or repetition of the circumstances giving rise to such right, remedy or noncompliance. No waiver will be effective unless given in a duly executed written instrument.

5.5    Severability.  In the event that any of the terms or provisions of this Agreement are in conflict with any rule of law or statutory provision or otherwise unenforceable under the laws or regulations of any government or subdivision thereof having jurisdiction over this agreement, such terms or provisions will be deemed stricken from this Agreement to the extent necessary to avoid such conflict, but such invalidity or unenforceability will not invalidate any of the other terms or provisions of this agreement and the remainder of such terms or provisions and the remainder of this Agreement will continue in full force and effect, unless the invalidity or unenforceability of any such provisions hereof does substantial violence to, or where the invalid or unenforceable provisions comprise an integral part of, or are otherwise inseparable from, the remainder of this Agreement.

5.6    No Third-Party Beneficiaries.  This Agreement is for the sole benefit of the Parties and their permitted successors and assigns, and nothing in this Agreement express or implied shall give or be construed to give to any Person, other than the Parties and their permitted successors and assigns, any legal or equitable rights hereunder, whether as third-party beneficiaries or otherwise.

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5.7    Governing Law.  This Agreement shall be construed and enforced in accordance with the internal laws of the State of New York, United States of America, without regard to its principles of conflicts of law (except to the extent that the internal affairs doctrine or other requirements of statute or case law requires the application of the laws of the country or jurisdiction of organization of any entity).

5.8    Security Deposit.  While this Agreement remains in effect, Purchaser will provide to Supplier a security deposit in cash.  The amount of this is security deposit will be calculated annually by multiplying $300,000 by the annual   Alico Allocation for Shared Services percentage which is shown in Annex A.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their authorized representatives effective as of the date first above written.

ALICO, INC.                TRAFELET BROKAW CAPITAL MANAGEMENT, L.P.

By:                            By:                        

Its:                                Its:                        

[Signature Page to Shared Services Agreement]

[Signature Page to Shared Services Agreement]

Annex A

    
	
						
	ALICO Shared Services Allocation
	2018-20

	 
	 

	- Lease up Jun 30, 2020 (6,073 RSF).
	 

	- TBCM put up $300k LOC in Feb 2018.
	 

	 
	 

	Trafelet Brokaw & Co. Office Costs:
	 

	 
	 
	 
	 

	     Occupancy
	 
	 
	$
	510,539
	

	     Communications & Technology (internet only)
	19,200
	

	     General office expense
	 
	1,300
	

	 
	 
	 
	542,739
	

	 
	 
	 
	 

	 
	 
	 
	 

	Alico Allocation for Shared Services:
	 
	 

	 
	 
	 
	 

	Office Overhead Costs:
	 
	72.79
	%

	 
	 
	 

	     Total office overhead allocation
	 
	395,076
	

	 
	 
	 
	 

	Staff Support:
	 
	 
	 

	Administrative Assistance
	 
	223,399
	

	     Total Staff Support
	 
	 
	223,399
	

	 
	 
	 
	 

	Total Annual Alico Allocation for Shared Services
	$
	618,476Exhibit 4.28

 

WORKHORSE GROUP INC.

 

Warrant
To Purchase Common Stock

 

Warrant No.:

Number of Shares of Common Stock: 

Date of Issuance: _____ __, 2018 (“Issuance Date”)

CUSIP No. 98138J 115

 

Workhorse Group Inc.,
a company organized under the laws of Nevada (the “Company”), hereby certifies that, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, __________________, a Cayman exempted limited partnership
(“Arosa”), the registered holder hereof or its permitted assigns (the “Holder”), is entitled,
subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, at
any time or times on or after the Issuance Date (the “Initial Exercisability Date”), but not after 11:59 p.m.,
New York time, on the Expiration Date, (as defined below), Five million three-hundred fifty eight (5,000,358 ) fully paid
non-assessable shares of Common Stock (as defined below), subject to adjustment as provided herein (the “Warrant Shares”).
Except as otherwise defined herein, capitalized terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase
Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”), shall have the meanings set
forth in Section 16. This Warrant is one of the Warrants to purchase Common Stock (the “Warrants”) issued in
connection with that certain Loan Agreement dated as of July 6, 2018 (the “Loan Agreement”) between Company,
as Borrower and Arosa, as Lender, and certain other parties thereto.

 

1. EXERCISE OF
WARRANT.

 

(a) Mechanics of
Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section
1(e)), this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability Date, in whole
or in part, by delivery (whether via facsimile, electronic mail or otherwise) of a written notice, in the form attached hereto
as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within
one (1) Trading Day following delivery of the Exercise Notice, the Holder shall make payment to the Company of an amount equal
to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant
is being exercised (the “Aggregate Exercise Price”) in cash by wire transfer of immediately available funds.
The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder, nor shall any ink-original
signature or medallion guarantee (or other type of guarantee or notarization) with respect to any Exercise Notice be required.
Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as
cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant
Shares. On or before the first (1st) Trading Day following the date on which the Company has received the applicable
Exercise Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of the
Exercise Notice, in the form attached to the Exercise Notice, to the Holder and the Company’s transfer agent (the “Transfer
Agent”). So long as the Holder delivers the Aggregate Exercise Price on or prior to the first (1st) Trading
Day following the date on which the Exercise Notice has been delivered to the Company, then on or prior to the earlier of (i)
the second (2nd) Trading Day and (ii) the Standard Settlement Period (as defined below), in each case following the
date on which the Exercise Notice has been delivered to the Company, or, if the Holder does not deliver the Aggregate Exercise
Price on or prior to the first (1st) Trading Day following the date on which the Exercise Notice has been delivered
to the Company, then on or prior to the first (1st) Trading Day following the date on which the Aggregate Exercise
Price is delivered (the “Share Delivery Date”), the Company shall (X) provided that the Transfer Agent is participating
in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number
of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance
account with DTC through its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent is not participating in the
DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in the Exercise
Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number
of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall be responsible for all fees and
expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any, including
without limitation for same day processing. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate
purposes to have become the holder of record and beneficial owner of the Warrant Shares with respect to which this Warrant has
been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery
of the certificates evidencing such Warrant Shares, as the case may be. If this Warrant is physically delivered to the Company
in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted
for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable
and in no event later than three (3) Trading Days after any exercise and at its own expense, issue and deliver to the Holder (or
its designee) a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares
issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant
is exercised. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of Warrant
Shares to be issued shall be rounded to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance
and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) which may be payable
with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company’s obligations to
issue and deliver Warrant Shares in accordance with the terms and subject to the conditions hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision
hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment,
limitation or termination; provided, however, that the Company shall not be required to deliver Warrant Shares with
respect to an exercise prior to the Holder’s delivery of the Aggregate Exercise Price with respect to such exercise.

 

     

     

    

 

(b) Exercise Price.
For purposes of this Warrant, “Exercise Price” means $2.00, subject to adjustment as provided herein.

 

(c) Company’s
Failure to Timely Deliver Securities. If either (I) the Company shall fail for any reason or for no reason to issue to the
Holder on or prior to the applicable Share Delivery Date, if (x) the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, a certificate for the number of shares of Common Stock to which the Holder is entitled and register
such Common Stock on the Company’s share register or (y) if the Transfer Agent is participating in the DTC Fast Automated
Securities Transfer Program, to credit the Holder’s balance account with DTC, for such number of shares of Common Stock
to which the Holder is entitled upon the Holder’s exercise of this Warrant, (II) the Company shall not within thirty (30)
days after the Issuance Date file with the SEC a registration statement for the resale by the Holder or any transferee therefrom
of the Warrant Shares (which registration statement shall be declared effective by the SEC no later than seventy five (75) days
after the Issuance Date, the “Registration Statement”), (III) the Company shall not within sixty (60) days
after the Issuance Date have obtained shareholder approval, in accordance with the rules and regulations of the Principal Market,
for the issuance of the Warrant Shares and any other issuance of shares of Common Stock by the Company as contemplated by the
Transaction Documents, or (IV) a registration statement (which may be the Registration Statement) covering the issuance or resale
of the Warrant Shares that are the subject of the Exercise Notice (the “Exercise Notice Warrant Shares”) is
not available for the issuance or resale, as applicable, of such Exercise Notice Warrant Shares and (x) the Company fails to promptly,
but in no event later than one (1) Business Day after such registration statement becomes unavailable, to so notify the Holder
and (y) the Company is unable to deliver the Exercise Notice Warrant Shares electronically without any restrictive legend by crediting
such aggregate number of Exercise Notice Warrant Shares to the Holder’s or its designee’s balance account with DTC
through its Deposit / Withdrawal At Custodian system (the event described in the immediately foregoing clause (IV) is hereinafter
referred as a “Notice Failure” and together with the events described in clauses (I), (II) and (IV) above,
an “Exercise Failure”), then, in addition to all other remedies available to the Holder, if on or prior to
the applicable Share Delivery Date either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, the Company shall fail to issue and deliver a certificate to the Holder and register such shares of Common Stock
on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer
Program, credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled
upon the Holder’s exercise hereunder or pursuant to the Company’s obligation pursuant to clause (ii) below or (II)
a Notice Failure occurs, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise)
Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the
Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3) Trading
Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal
to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the
shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to
deliver such certificate (and to issue such shares of Common Stock) or credit such Holder’s balance account with DTC for
such shares of Common Stock shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates
representing such shares of Common Stock or credit such Holder’s balance account with DTC, as applicable, and pay cash to
the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common
Stock, times (B) any trading price of the Common Stock selected by the Holder in writing as in effect at any time during the period
beginning on the applicable Exercise Date and ending on the applicable Share Delivery Date. Nothing shall limit the Holder’s
right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing
Warrant Shares (or to electronically deliver such Warrant Shares) upon the exercise of this Warrant as required pursuant to the
terms hereof. While this Warrant is outstanding, the Company shall cause its transfer agent to participate in the DTC Fast Automated
Securities Transfer Program. In addition to the foregoing rights, (i) if the Company fails to deliver the applicable number of
Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery Date, then the Holder shall have the right
to rescind such exercise in whole or in part and retain and/or have the Company return, as the case may be, any portion of this
Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an exercise shall not affect
the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section
1(c) or otherwise, and (ii) if a registration statement (which may be the Registration Statement) covering the issuance or resale
of the Warrant Shares that are subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such
Exercise Notice Warrant Shares and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability
of such registration statement and the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically
without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to
such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian
system, the Holder shall have the option, by delivery of notice to the Company, to rescind such Exercise Notice in whole or in
part and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such
Exercise Notice; provided that the rescission of an Exercise Notice shall not affect the Company’s obligation to make any
payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise.

 

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(d) Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 11.

 

(e) Limitation on Exercise.
The Company and Holder acknowledge and agree that, until the Company obtains the required shareholder approval under NASDAQ Marketplace
Rule 5635 (the “Approval”), (a) the total
number of shares of Common Stock resulting from the exercise of this Warrant by the Holder or its assigns cannot exceed 19.99%
of the total number of shares of Common Stock outstanding immediately prior to the date hereof (as adjusted for any stock dividend,
stock split, stock combination, reclassification or similar transaction), and (b) the holders of the shares of Common Stock
resulting from the exercise of this Warrant cannot be entitled to more than 19.99% of the total voting power of the Company’s
equity securities outstanding immediately prior to the date hereof (as adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction). Upon obtaining the Approval, if needed, as soon as reasonably practicable, and immediately
after the Approval is obtained, the limitations under this Section 1(e) shall no longer apply. Notwithstanding the foregoing,
nothing contained in this Section shall modify Holders’ absolute right to Warrant Shares or Additional Warrant Shares, as
set forth in this Agreement.

 

(f) Required Reserve
Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this
Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as shall be
necessary to satisfy the Company’s obligation to issue shares of Common Stock under the Warrants then outstanding (without
regard to any limitations on exercise) (the “Required Reserve Amount”); provided that at no time shall
the number of shares of Common Stock reserved pursuant to this Section 1(f) be reduced other than in connection with any exercise
of Warrants or such other event covered by Section 2(c) below. The Required Reserve Amount (including, without limitation, each
increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Warrants based on the number
of shares of Common Stock issuable upon exercise of Warrants held by each holder thereof on the Issuance Date (without regard
to any limitations on exercise) (the “Authorized Share Allocation”). In the event that a holder shall sell
or otherwise transfer any of such holder’s Warrants, each transferee shall be allocated a pro rata portion of such holder’s
Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Warrants
shall be allocated to the remaining holders of Warrants, pro rata based on the number of shares of Common Stock issuable upon
exercise of the Warrants then held by such holders thereof (without regard to any limitations on exercise).

 

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(g) Insufficient
Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of
authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance the Required Reserve Amount
(an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the
Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve
Amount for this Warrant then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after
the date of the occurrence of an Authorized Share Failure, but in no event later than seventy-five (75) days after the occurrence
of such Authorized Share Failure, the Company shall hold a meeting of its shareholders for the approval of an increase in the
number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each shareholder with
a proxy statement and shall use its best efforts to solicit its shareholders’ approval of such increase in authorized shares
of Common Stock and to cause its board of directors to recommend to the shareholders that they approve such proposal. Notwithstanding
the foregoing, if any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority
of the shares of its issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares
of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an Information
Statement on Schedule 14C.

 

(h) Beneficial Ownership.
Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any portion of this Warrant,
and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this
Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such
exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 9.99% (the “Maximum
Percentage”) of the number of 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 the Holder and the other
Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus
the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining,
unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise
or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation,
any convertible notes or convertible preferred stock or warrants, including the other Warrants) beneficially owned by the Holder
or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this
Section 1(h), and notwithstanding anything to the contrary contained herein, any such unexercised portion of such Warrant and/or
unexercised or unconverted portion of any other securities referred to in clauses (A) and (B) above, shall be deemed not to be
exercisable or convertible, as the case may be, for sixty-one (61) days after the related date of determination. For purposes
of this Section 1(h), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. For purposes
of this Warrant, in determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this
Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected
in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and Current Reports on Form 8-K
or other public filing with the Securities and Exchange Commission (the “SEC”), as the case may be, (y) a more
recent public announcement by the Company or (3) any other written notice by the Company or the Transfer Agent setting forth the
number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Company receives
an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported
Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding
and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant
to this Section 1(h), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares
to be purchased pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the “Reduction
Shares”) and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid
by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder, the Company
shall within one (1) Business Day confirm orally and in writing or by electronic mail to the 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 securities of the Company, including this Warrant, by the Holder and any other Attribution Party
since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of Common Stock
to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially
own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under
Section 13(d) of the Exchange Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’
aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and
void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon
as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the
Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder
may from time to time increase or decrease the Maximum Percentage to any other percentage as specified in such notice; provided
that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after
such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution
Parties and not to any other holder of Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the shares
of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially
owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. No prior
inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of
this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(h) to the extent necessary to
correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership
limitation contained in this Section 1(h) or to make changes or supplements necessary or desirable to properly give effect to
such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.

 

    	 	4	 

     

    

 

2. ADJUSTMENT OF
EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from time
to time as follows:

 

(a) Adjustment upon
Issuance of Shares of Common Stock. If and whenever during the Adjustment Period, the Company issues or sells any shares of
Common Stock or Common Stock Equivalents (including the issuance or sale of shares of Common Stock owned or held by or for the
account of the Company, but excluding shares of Common Stock issued by the Company in connection with any Excluded Securities),
both of the following shall apply: (I) additional Warrant Shares (“Additional Warrant Shares”) shall be issuable
in respect of this Warrant such that the amount of Additional Warrant Shares issuable will be equal to 10% of the proforma number
of shares equal to the sum of (x) the Company’s Common Stock or Common Stock Equivalents (on an as converted basis) being
issued or sold, and (y) the outstanding Common Stock and Common Stock Equivalents (on an as-converted basis) immediately before
such issuance or sale, and (II) in the event the sale price (on an as converted basis, if applicable, in accordance with this
Section 2) is lower than the then-existing Exercise Price, the Exercise Price with respect to such Additional Warrant Shares shall
be adjusted to the Adjusted Exercise Price (which for the avoidance of doubt, shall only apply to such Additional Warrant Shares);
otherwise the then-existing Exercise Price shall also apply to such Additional Warrant Shares. Additional Warrant Shares to be
issued as a result of issuances of shares of Common Stock under the Sales Agreement commencing as of the date hereof, shall be
issued promptly at the end of each fiscal quarter.

 

(b) Change in Option
Price or Rate of Conversion. During the Adjustment Period, if the purchase price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases
at any time, then the Adjusted Exercise Price and/or Exercise Price, as applicable, in effect at the time of such increase or
decrease shall be adjusted to the Adjusted Exercise Price and/or Exercise Price, as applicable, which would have been in effect
at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration
or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. No adjustment pursuant
to this Section 2 shall be made if such adjustment would result in an increase of the Adjusted Exercise Price or Exercise Price
then in effect or a decrease in the number of Additional Warrant Shares or Warrant Shares.

 

(c) Record Date.
If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase
shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of subscription or purchase, as the case may be.

 

(d) Voluntary Adjustment
By Company. Subject to the prior consent of the Principal Market, the Company may at any time during the term of this Warrant
reduce the then current Exercise Price or Adjusted Exercise Price to any amount and for any period of time deemed appropriate
by the Board of Directors of the Company.

 

(e) Adjustment Upon
Subdivision or Combination of Common Stock. If the Company at any time on or after the Issuance Date subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater
number of shares, the Exercise Price and Adjusted Exercise Price in effect immediately prior to such subdivision will be proportionately
reduced and the number of Warrant Shares and Additional Warrant Shares will be proportionately increased. If the Company at any
time on or after the Issuance Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding
shares of Common Stock into a smaller number of shares, the Exercise Price and Adjusted Exercise Price in effect immediately prior
to such combination will be proportionately increased and the number of Warrant Shares and Additional Warrant Shares will be proportionately
decreased. Any adjustment under this Section 2(e) shall become effective at the close of business on the date the subdivision
or combination becomes effective.

 

(f) Issuance of Options.
If, during the Adjustment Period, the Company in any manner grants or sells any Options except to the extent that Excluded Securities
are issued, the Holder shall be entitled to receive Options on the same date or dates and with the same terms, in an amount such
that the amount of Common Stock into which such Options would be exercised into would keep the Holder with the same as-converted
equity ownership as before the issuance of the Options granted or sold by the Company. No further adjustment of the Exercise Price
or Adjusted Exercise Price or the number of Warrant Shares or Additional Warrant Shares shall be made upon the actual issuance
of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options or upon the actual issuance
of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.

 

(g) Other Events.
If, during the Adjustment Period, any event occurs of the type contemplated by the provisions of this Section 2 but not expressly
provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights
or other rights with equity features), then the Company’s Board of Directors will, in good faith, make an appropriate adjustment
in the Exercise Price or Adjusted Exercise Price, as applicable, and the number of Warrant Shares or Additional Warrant Shares,
as applicable, as mutually determined by the Company’s Board of Directors and the Required Holders, each acting in good
faith, so as to protect the rights of the Holder; provided that no such adjustment pursuant to this Section 2(g) will increase
the Exercise Price or Adjusted Exercise Price, as applicable, or decrease the number of Warrant Shares or Additional Warrant Shares,
as applicable, as otherwise determined pursuant to this Section 2.

 

    	 	5	 

     

    

 

3. RIGHTS UPON
DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if, on or after the Issuance Date and
on or prior to the Expiration Date, the Company shall declare or make any dividend or other distribution of its assets (or rights
to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by way of
a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant,
including without limitation, the Maximum Percentage) immediately before the date of which a record is taken for such Distribution,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the
participation in such Distribution (provided, however, that to the extent that the Holder’s right to participate
in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the
Holder shall not be entitled to participate in such Distribution to such extent (and shall not be entitled to beneficial ownership
of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to such extent) and the portion of
such Distribution shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would
not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder
shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution
held similarly in abeyance) to the same extent as if there had been no such limitation).

 

4. PURCHASE RIGHTS;
FUNDAMENTAL TRANSACTION.

 

(a) Purchase Rights.
In addition to any adjustments pursuant to Section 2 above, if at any time on or after the Issuance Date and on or prior to the
Expiration Date the Company (i) grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise
of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation,
the Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant,
issuance or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s right to
participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage,
then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial
ownership of such Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase
Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would
not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder
shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent
Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation), or (ii) conducts
any Pro Rata Repurchase Offer, the Holder shall be permitted to (but shall not be obligated to) participate, in whole or in part,
on an as-converted basis, provided that, notwithstanding any other provision hereof, such participation may at the election of
the Holder be conditioned upon the consummation of such transaction, in which case such participation shall not be deemed to be
effective until immediately prior to the consummation of such transaction.

 

    	 	6	 

     

    

 

(b) Fundamental Transactions.
The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing, pursuant
to written agreements in form and substance satisfactory to the Required Holders, all of the obligations of the Company under
this Warrant and all other Transaction Documents in accordance with the provisions of this Section 4(b), including agreements
to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant, but which is exercisable for a corresponding number of shares of capital stock
equivalent to the shares of Common Stock issuable upon exercise of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder
to such shares of capital stock (taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such
exercise price being for the purpose of appropriately reflecting the economic value of this Warrant immediately prior to the consummation
of such Fundamental Transaction). Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to,
and be substituted for the Company (so that from and after the date of such Fundamental Transaction, each and every provision
of this Warrant referring to the “Company” shall instead refer to the Successor Entity), and the Successor Entity
may exercise every prior right and power of the Company and shall assume all prior obligations of the Company under this Warrant
with the same effect as if the Successor Entity had been named as the Company in this Warrant. On or prior to the consummation
of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon
exercise of this Warrant at any time after the consummation of the Fundamental Transaction, in lieu of the shares of Common Stock
(or other securities, cash, assets or other property purchasable upon the exercise of this Warrant prior to such Fundamental Transaction),
such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription
rights), which for purposes of clarification may continue to be shares of Common Stock, if any, that the Holder would have been
entitled to receive upon the happening of such Fundamental Transaction or the record, eligibility or other determination date
for the event resulting in such Fundamental Transaction, had this Warrant been exercised immediately prior to such Fundamental
Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction (without
regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding
the foregoing, and without limiting the provisions of Section 1(f) hereof, the Holder may elect, at its sole discretion, by delivery
of a written notice to the Company, to permit a Fundamental Transaction without the required assumption of this Warrant. In addition
to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to
which holders of Common Stock are entitled to receive securities, cash, assets or other property with respect to or in exchange
for Common Stock (a “Corporate Event”), the Company shall make appropriate provision to ensure that, and any
applicable Successor Entity shall ensure that, the Holder will thereafter have the right to receive upon exercise of this Warrant
at any time after the consummation of the Corporate Event, shares of Common Stock or capital stock of the Successor Entity or,
if so elected by the Holder, in lieu of the shares of Common Stock (or other securities, cash, assets or other property) (except
such items still issuable under Sections 3 and 4(a), which shall continue to be receivable thereafter) issuable upon exercise
of this Warrant prior to such Corporate Event, such shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the consummation
of such Corporate Event or the record, eligibility or other determination date for the event resulting in such Corporate Event,
had this Warrant been exercised immediately prior to such Corporate Event or the record, eligibility or other determination date
for the event resulting in such Corporate Event (without regard to any limitations on exercise of this Warrant). Provision made
pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder. The provisions of this
Section 4(b) shall apply similarly and equally to successive Fundamental Transactions and Corporate Events.

 

(c) Notwithstanding
the foregoing, in the event of Fundamental Transaction in which the aggregate consideration to the Holders as a result of its
Warrant Shares (including any Additional Warrant Shares) would be less than $15,000,000, at the request of the Holder delivered
before the ninetieth (90th) day after the consummation of such Fundamental Transaction, the Company (or the Successor
Entity) shall purchase this Warrant from the Holder by paying to the Holder, within five (5) Business Days after such request
(or, if later, on the effective date of the Fundamental Transaction), cash in an amount equal to the Black Scholes Value of the
remaining unexercised portion of this Warrant on the date of such Fundamental Transaction.

 

5. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation or Bylaws, or
through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to
protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par
value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii)
shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock,
solely for the purpose of effecting the exercise of the Warrants, the number of shares of Common Stock as shall from time to time
be necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise).

 

    	 	7	 

     

    

 

6. WARRANT HOLDER
NOT DEEMED A SHAREHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s capacity
as a holder of this Warrant, shall not be entitled to vote or be deemed the holder of capital stock of the Company for any purpose,
nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity as
the Holder of this Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to
any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance
or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices
and other information given to the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders.

 

7. REISSUANCE OF
WARRANTS.

 

(a) Transfer of Warrant.
If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request,
representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number
of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being transferred.

 

(b) Lost, Stolen
or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder
to the Company in customary form (but without the obligation to post a bond) and, in the case of mutilation, upon surrender and
cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d))
representing the right to purchase the Warrant Shares then underlying this Warrant.

 

(c) Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender.

 

(d) Issuance of New
Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.

 

    	 	8	 

     

    

 

8. NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in writing,
(i) if delivered (a) from within the domestic United States, by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, electronic mail or by facsimile or (b) from outside the United States, by International
Federal Express, electronic mail or facsimile, and (ii) will be deemed given (A) if delivered by first-class registered or certified
mail domestic, three (3) Business Days after so mailed, (B) if delivered by nationally recognized overnight carrier, one (1) Business
Day after so mailed, (C) if delivered by International Federal Express, two (2) Business Days after so mailed and (D) if delivered
by electronic mail, when sent (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) and (E) if delivered by facsimile, upon electronic confirmation of receipt of
such facsimile, and will be delivered and addressed as follows:

 

		(i)	if to the Company,
                                         to:

 

Workhorse Group Inc.

100 Commerce Drive

Loveland, Ohio 45140

 

Attention: Chief Financial Officer

Fax:

E-Mail:       paul.gaitan@workhorse.com

 

		(ii)	if to the Holder,
                                         at such address or other contact information delivered by the Holder to Company or as
                                         is on the books and records of the Company.

 

The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action
and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder
(i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation
of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record
(A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or
sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of
shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation;
provided in each case that such information shall be made known to the public prior to or in conjunction with such notice
being provided to the Holder. It is expressly understood and agreed that the time of exercise specified by the Holder in each
Exercise Notice shall be definitive and may not be disputed or challenged by the Company.

 

9. AMENDMENT AND
WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may take
any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Holder.

 

10. GOVERNING LAW;
JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Warrant 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 with any transaction
contemplated hereby or discussed herein, 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. The Company 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 the Company at the address set forth in Section 8(i) above or such other address as the Company subsequently delivers to the
Holder 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 the Holder from bringing suit or taking other legal action against the Company in any other
jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for
such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

    	 	9	 

     

    

 

11. DISPUTE RESOLUTION.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within two (2) Business
Days of receipt of the Exercise Notice or other event giving rise to such dispute, as the case may be, to the Holder. If the Holder
and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within
three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company
shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination of the Exercise Price
to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic
calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its expense
the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company
and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations.
Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.

 

12. REMEDIES, OTHER
OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to
all other remedies available under this Warrant and any other Transaction Documents, at law or in equity (including a decree of
specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual
damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.

 

13. TRANSFER; DTC.
This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of the
Company. Promptly, but in no event later than thirty (30) days after the Issuance Date, the Company shall undertake to provide
for this Warrant to be eligible and subject to the DTC system.

 

14. SEVERABILITY;
CONSTRUCTION; HEADINGS. If any provision of this Warrant 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 Warrant so long as this Warrant 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). This Warrant shall be deemed to be jointly drafted by the Company and all the Buyers and shall not be construed
against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part
of, or affect the interpretation of, this Warrant.

 

15. DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in
good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the
Company or its subsidiaries, the Company shall contemporaneously with any such receipt or delivery publicly disclose such material,
nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains
material, nonpublic information relating to the Company or its subsidiaries, the Company so shall indicate to such Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters
relating to such notice do not constitute material, nonpublic information relating to the Company or its subsidiaries.

 

    	 	10	 

     

    

 

16. CERTAIN DEFINITIONS.
For purposes of this Warrant, the following terms shall have the following meanings:

 

(a) “Adjusted
Exercise Price” means, with respect to any sale of Common Stock or Common Stock Equivalents, as contemplated by Section
2(a), the sum of (A) the sale or issuance price of such Common Stock or Common Stock Equivalents, and (B) the product of (x) 5%
and (y) the sale or issuance price of such Common Stock or Common Stock Equivalents; provided however, that the Adjusted Exercise
Price with respect to Additional Warrant Shares issued under the Sales Agreement during any fiscal quarter shall be the sum of
(A) the weighted average sale or issuance price of such Common Stock during such fiscal quarter, and (B) the product of (x) 5%
and (y) the weighted average sale or issuance price of such Common Stock during such fiscal quarter.

 

(b) “Adjustment
Period” mean, the period beginning on the Issuance Date up to and including the Obligations Satisfaction Date; provided,
however that with respect to Common Stock issued under the Sales Agreement, the Adjustment Period will be deemed to be up to and
including the last day of the fiscal quarter in which the Obligations Satisfaction Date occurred.

 

(c) “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person, it being understood for purposes of this definition that “control” of a Person means the
power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors
of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

(d) “Approved
Stock Plan” means any employee benefit plan which has been approved by a majority of the disinterested members of the
Board of Directors of the Company, pursuant to which the Company’s securities may be issued to any employee, officer, consultant
or director for services provided to the Company.

 

(e) “Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds,
feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised
by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the
Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder
or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could
be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For
clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.

 

(f) “Black
Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg determined as of the day immediately following the first public announcement of the applicable Fundamental
Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated,
for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to
the remaining term of this Warrant as of such date of request, (ii) an expected volatility equal to the greater of 75% and the
100 day volatility obtained from the HVT function on Bloomberg as of the day immediately following the public announcement of
the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental
Transaction is consummated, (iii) the underlying price per share used in such calculation shall be the greater of (A) the sum
of the price per share being offered in cash, if any, plus the per share value of any non-cash consideration, if any, being offered
in the Fundamental Transaction and (B) the one (1) day Weighted Average Price the date immediately following the public announcement
of the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental
Transaction is consummated, (iv) a zero cost of borrow and (v) a 360 day annualization factor.

 

    	 	11	 

     

    

 

(g) “Bloomberg”
means Bloomberg Financial Markets.

 

(h) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.

 

(i) “Common
Stock” means (i) the Company’s Common Stock, par value $0.001 per share, and (ii) any capital stock into which
such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.

 

(j) “Common
Stock Equivalents” means either preferred stock or subordinated convertible debt, that is in each case (x)is convertible
into Common Stock and (y) that has either a maturity of at least three (3) years (with no redemption at the option of the holder
prior to such maturity) or in the case of preferred stock, is perpetual.

 

(k) “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.

 

(l) “Eligible
Market” means The NASDAQ Capital Market, the NYSE American LLC, The NASDAQ Global Select Market, The NASDAQ Global Market
or The New York Stock Exchange, Inc.

 

(m) “Excluded
Securities” means any shares of Common Stock issued or issuable, or deemed issued or issuable pursuant to Section 2(a):
(i) in connection with any Approved Stock Plan, (ii) upon exercise of the Warrants; provided, that the terms of such Warrants
are not amended, modified or changed on or after the Issuance Date, and (iii) upon conversion, exercise or exchange of any Options
or Convertible Securities which are outstanding on the day immediately preceding the Issuance Date; provided, that the
terms of such Options or Convertible Securities are not amended, modified or changed on or after the Issuance Date.

 

(n) “Expiration
Date” means the date sixty (60) months after the Initial Exercisability Date or, if such date falls on a day other than
a Business Day or on which trading does not take place on the Principal Market (a “Holiday”), the next day
that is not a Holiday.

 

(o) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or
otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving
corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of
the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X), which shall expressly exclude Surefly, Inc., to one or more Subject Entities, or (iii) make, or allow one or more Subject
Entities to make, or allow the Company to be subject to or have its shares of Common Stock be subject to or party to one or more
Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the
outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock
held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender
or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or
party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively
the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock,
or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually
or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding
shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated
with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding;
or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined
in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize
or reclassify its shares of Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject Entities in
the aggregate to be or become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding
shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement,
reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the
aggregate ordinary voting power represented by issued and outstanding shares of Common Stock, (y) at least 50% of the aggregate
ordinary voting power represented by issued and outstanding shares of Common Stock not held by all such Subject Entities as of
the Issuance Date calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a
percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity
securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction
requiring other shareholders of the Company to surrender their Common Stock without approval of the shareholders of the Company
or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the
issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents,
the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition
which may be defective or inconsistent with the intended treatment of such instrument or transaction.

 

    	 	12	 

     

    

 

(p) “Group”
means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.

 

(q) “Obligations
Satisfaction Date” means the date, on which all of the Obligations (as such term is defined in the Loan Agreement) under
the Loan Agreement have been satisfied in full.

 

(r) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(s) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity
whose common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Holder, any
other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity
designated by the Holder or in the absence of such designation, such Person or entity with the largest public market capitalization
as of the date of consummation of the Fundamental Transaction.

 

(t) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.

 

(u) “Principal
Market” means The NASDAQ Capital Market.

 

(v) “Pro Rata
Repurchase Offer” means any offer to purchase shares of Common Stock by the Company or any Affiliate thereof pursuant
to (i) any tender offer or exchange offer subject to Section 13(e) or 14(e) of the Exchange Act or Regulation 14E promulgated
thereunder or (ii) any other offer available to substantially all holders of Common Stock (subject to satisfaction of any conditions
to participation therein such as those relating to minimum holding percentages or accredited status) to purchase or exchange their
shares of Common Stock, in the case of both clauses (i) and (ii), whether for cash, shares of capital stock of the Company, other
securities of the Company, evidences of indebtedness of the Company or any other Person, or any other property (including, without
limitation, shares of capital stock, other securities or evidences of indebtedness of a Subsidiary of the Company), or any combination
thereof, effected while the Warrants are outstanding. The “effective date” of a Pro Rata Repurchase Offer shall mean
the date of acceptance of shares for purchase or exchange by the Company under any tender or exchange offer which is a Pro Rata
Repurchase Offer or the date of purchase with respect to any Pro Rata Repurchase Offer that is not a tender or exchange offer.

 

    	 	13	 

     

    

 

(w) “Required
Holders” means the holders of the Warrants representing at least a majority of the shares of Common Stock underlying
the Warrants then outstanding.

 

(x) “Sales
Agreement” means the Company’s At-the-Market Offering Program Sales Agreement with Cowen and Company, dated June
22, 2017.

 

(y) “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s
primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Exercise Notice.

 

(z) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.

 

(aa) “Successor
Entity” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the
Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.

 

(bb) “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded.

 

(cc) “Transaction
Documents” means any agreement entered into by and between the Company and the Holder, as applicable.

 

(dd) “Weighted
Average Price” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market
on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest Closing Bid Price and the
lowest closing ask price of any of the market makers for such security as reported in the OTC Link or “pink sheets”
by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security
on a particular date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair
market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the
fair market value of such security, then such dispute shall be resolved pursuant to Section 11 with the term “Weighted Average
Price” being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation
period.

 

[Signature Page Follows]

 

    	 	14	 

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

	
	WORKHORSE GROUP INC.
	 	 
	 	By:	                   
	 	Name:	 
	 	Title:	 

 

     

     

    

 

EXHIBIT
A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

WORKHORSE GROUP INC.

 

The undersigned holder
hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of
Workhorse Group Inc., a company organized under the laws of the State of Nevada (the “Company”), evidenced
by the attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.

 

1. Form of Exercise
Price. The Holder intends that payment of the Exercise Price shall be made as:

 

    ____________ a “Cash
Exercise” with respect to _________________ Warrant Shares; and/or

 

2. Payment of Exercise
Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.

 

3. Delivery of Warrant
Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant.

 

Date: _______________ __, ______

 

________________________________

Name of Registered Holder

 

	By:	 	 
	Name: 	 	 
	Title:	 	 

 

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this Exercise Notice and hereby directs [TRANSFER AGENT] to issue the above indicated number of shares of Common
Stock on or prior to the applicable Share Delivery Date.

 

	
	WORKHORSE GROUP INC.
	 	 
	 	By:	               
	 	Name:	 
	 	Title:

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