Document:

executedamendmentno1toar

Execution Copy    148554138v6   AMENDMENT NO. 1 TO AMENDED AND RESTATED LOAN AGREEMENT  This AMENDMENT NO. 1, dated as of June 4, 2021 (this "Amendment"), is executed by  and among SCFC BUSINESS SERVICES LLC (the "Borrower"), CHARIOT FUNDING LLC  ("Chariot"), and JPMORGAN CHASE BANK, N.A. ("JPMorgan"), in its capacities as  administrative agent (in such capacity, the "Administrative Agent"), as a Committed Lender, and  as the Agent for the JPMorgan Lender Group (in such capacity, the "JPMorgan Agent"), and  amends the Amended and Restated Loan Agreement, dated as of December 31, 2020 (as  amended, restated, supplemented or otherwise modified from time to time, the "Loan  Agreement"), by and among the Borrower, Driveway Finance Corporation ("DFC"), as the  servicer and the collateral custodian, the lenders from time to time parties thereto, the agents   from time to time parties thereto, and JPMorgan, as Administrative Agent and as the account  bank.  Capitalized terms used, but not otherwise defined, herein shall have the meanings ascribed  thereto in the Loan Agreement.  WITNESSETH:  WHEREAS, as of the date of this Amendment, Chariot is the sole Conduit Lender under  the Loan Agreement and JPMorgan is the sole Committed Lender under the Loan Agreement  (Chariot and JPMorgan, together in such respective capacities, the "Lenders");    WHEREAS, the Borrower and the Lenders desire to amend the Loan Agreement, in  accordance with Section 13.01 thereof, on the terms set forth herein; and   NOW, THEREFORE, in consideration of the premises and the mutual agreements  hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of  which are hereby acknowledged, the parties hereto hereby agree as follows:  SECTION 1. Amendments to the Loan Agreement.  The Loan Agreement is  hereby amended as follows:  (a)  Section 1.01 is amended by deleting the definitions of "Adjusted Principal  Balance," "Alternate Base Rate," "Commitment Termination Date," "Default Rate," "Excess  Concentration Amounts," "Federal Funds Effective Rate," "Material Adverse Change," "Payment  Date," "Prime Rate," "Required Rate," "Serviced Portfolio," and "Weighted Average  Overcollateralization Percentage" set forth therein in their entirety and replacing them,  respectively, with the following:  "'Adjusted Principal Balance' means, as of any date for any Receivable, (i) if the  amount of Excess Spread as of such date is 3.75% or greater, the Principal  Balance of such Receivable as of such date, and (ii) if the amount of Excess  Spread as of such date is less than 3.75%, then (A) if the APR of such Receivable  is less than the Required Rate, the present value (calculated using a discount rate  equal to the Required Rate) of all Scheduled Payments (including past due  Scheduled Payments) remaining on such Receivable, assuming that all such  Scheduled Payments are paid on a timely basis after such date or (B) if the APR  of such Receivable is equal to or greater than the Required Rate, the Principal  Balance of such Receivable as of such date."  

 

   - 2 -  148554138v6  "'Alternate Base Rate' means, for any day, a rate per annum equal to the greatest  of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such  day plus 1⁄2 of 1% and (c) the Adjusted Eurodollar Rate for a one month Interest  Period on such day (or if such day is not a Business Day, the immediately  preceding Business Day) plus 1%; provided, that for the purpose of this  definition, the Adjusted Eurodollar Rate for any day shall be based on the LIBOR  Screen Rate (or if the LIBOR Screen Rate is not available for such one month  Interest Period, the Interpolated Rate) at approximately 11:00 a.m. London time  on such day.  Any change in the Alternate Base Rate due to a change in the Prime  Rate, the NYFRB Rate or the Adjusted Eurodollar Rate shall be effective from  and including the effective date of such change in the Prime Rate, the NYFRB  Rate or the Adjusted Eurodollar Rate, respectively.  If the Alternate Base Rate is  being used as an alternate rate of interest pursuant to Section 2.17 (for the  avoidance of doubt, only until the Benchmark Replacement has been determined  pursuant to Section 2.17(b)), then the Alternate Base Rate shall be the greater of  clauses (a) and (b) above and shall be determined without reference to clause (c)  above."    "'Commitment Termination Date' means June 5, 2023 or, with respect to any  Committed Lender, such later date to which the Commitment Termination Date  may be extended for such Committed Lender in accordance with Section 2.04(a)."  "'Default Rate' means a per annum rate equal to the sum of (i) the Alternate Base  Rate and (ii) 2.85%."  "'Excess Concentration Amounts' means, as of any date of determination and  without duplication, the sum of:  (i) the positive difference, if any, of (a) the aggregate  Adjusted Principal Balance of the Eligible Receivables for which  the related Obligor has a billing address in the State with the  highest concentration of Receivables by Obligor billing address as  of such date minus (b) an amount equal to the product of (1) 43.0%  times (2) the Eligible Pool Balance on such date;   (ii) the positive difference, if any, of (a) the aggregate  Adjusted Principal Balance of the Eligible Receivables for which  the related Obligor has a billing address in the State with the  second highest concentration of Receivables by Obligor billing  address as of such date minus (b) an amount equal to the product  of (1) 33.0% times (2) the Eligible Pool Balance on such date;  (iii) the positive difference, if any, of (a) the aggregate  Adjusted Principal Balance of the Eligible Receivables for which  the related Obligor has a billing address in the State with the third  highest concentration of Receivables by Obligor billing address as  of such date minus (b) an amount equal to the product of (1) 23.0%  times (2) the Eligible Pool Balance on such date;  

 

   - 3 -  148554138v6  (iv) the positive difference, if any, of (a) the aggregate  Adjusted Principal Balance of the Eligible Receivables for which  the related Obligor has a billing address in any State other than  those States accounted for in clauses (i), (ii), and (iii), above,  minus (b) an amount equal to the product of (1) 20.0% times (2)  the Eligible Pool Balance on such date;  (v) without duplication, the sum of (a) the positive  difference, if any, of (1) the aggregate Adjusted Principal Balance  of the Eligible Receivables for which the related Obligors had  FICO Scores of less than 700 minus (2) the product of (A) 85.0%  times (B) the Eligible Pool Balance as of such date plus (b) the  positive difference, if any, of (1) the aggregate Adjusted Principal  Balance of the Eligible Receivables for which the related Obligors  had FICO Scores of less than 620 minus (2) the product of (A)  25.0% times (B) the Eligible Pool Balance as of such date plus (c)  the positive difference, if any, of (1) the aggregate Adjusted  Principal Balance of the Eligible Receivables for which the related  Obligors had FICO Scores of less than 550 minus (2) the product  of (A) 10.0% times (B) the Eligible Pool Balance as of such date,  calculated in all cases with Receivables that do not have such  FICO Scores being deemed to have FICO Scores of zero;   (vi) the positive difference, if any, of (a) the aggregate  Adjusted Principal Balance of the Eligible Receivables for which  the related Obligors did not have a FICO Score or had a FICO  Score of zero minus (b) the product of (1) 5.0% times (2) the  Eligible Pool Balance as of such date;  (vii) the positive difference, if any, of (a) the aggregate  Adjusted Principal Balance of the Eligible Receivables for which  the related Loan-to-Value Ratios were greater than 125% at the  time of underwriting minus (b) the product of (1) 30.0% times (2)  the Eligible Pool Balance as of such date;  (viii) the positive difference, if any, of (a) the aggregate  Adjusted Principal Balance of the Eligible Receivables that had  original Principal Balances of greater than $40,000 minus (b) the  product of (1) 40.0% times (2) the Eligible Pool Balance as of such  date;  (ix) the positive difference, if any, of (a) the aggregate  Adjusted Principal Balance of the Eligible Receivables which or  on any prior date were (but which no longer are as of such date of  determination) Serviced Portfolio Defaulted Receivables minus (b)  the product of (1) 1.0% times (2) the Eligible Pool Balance as of  such date;  

 

   - 4 -  148554138v6  (x) the positive difference, if any, of (a) the aggregate  Adjusted Principal Balance of the Eligible Receivables for which  the related Financed Vehicle was a Used Vehicle at the time such  Receivable was originated minus (b) the product of (1) 60.0%  times (2) the Eligible Pool Balance as of such date;   (xi) the positive difference, if any, of (a) the aggregate  Adjusted Principal Balance of the Eligible Receivables for which  the original term to maturity was more than 75 months  minus (b)  the product of (1) 20.0% times (2) the Eligible Pool Balance as of  such date;  (xii)  the aggregate Adjusted Principal Balance of the  Eligible Receivables that had FICO Scores of less than 640 at the  time of their underwriting that would need to be subtracted from  the Eligible Pool Balance on such date in order to cause the  weighted average FICO Score of all Eligible Receivables  (excluding Receivables that do not have a FICO Score or have a  FICO Score of zero) to 640, with such weighted average calculated  using the FICO Score of each such Receivable at the time of its  underwriting;  (xiii) the aggregate Adjusted Principal Balance of the  Eligible Receivables that had Loan-to-Value Ratios at the time of  their underwriting of greater than 118% that would need to be  subtracted from the Eligible Pool Balance on such date in order to  cause the weighted average Loan-to-Value Ratio of all Eligible  Receivables at the time of their underwriting to equal 118%;  (xiv) the aggregate Adjusted Principal Balance of the  Eligible Receivables that had Payment-to-Income Ratios of greater  than 12.0% at the time of their underwriting that would need to be  subtracted from the Eligible Pool Balance on such date in order to  cause the weighted average Payment-to-Income Ratios of all  Eligible Receivables at the time of their underwriting to equal  12.0%;   (xv) the aggregate Adjusted Principal Balance of the  Eligible Receivables that had Debt-to-Income Ratios of greater  than 45.0% at the time of their underwriting that would need to be  subtracted from the Eligible Pool Balance on such date in order to  cause the weighted average Debt-to-Income Ratio of all Eligible  Receivables at the time of their underwriting to equal 45.0%; and  (xvi) the positive difference, if any, of (a) the aggregate  Adjusted Principal Balance of the Eligible Receivables for which  the related Financed Vehicle had an odometer reading of more than  125,000 miles at the time such Receivable was originated minus  

 

   - 5 -  148554138v6  (b) the product of (1) 2.0% times (2) the Eligible Pool Balance as  of such date. "  "'Federal Funds Effective Rate' means, for any day, the rate calculated by the  NYFRB based on such day’s federal funds transactions by depositary institutions,  as determined in such manner as  shall be set forth on the NYFRB’s Website   from time to time, and published on the next succeeding Business Day by the  NYFRB as the effective federal funds rate; provided that if the Federal Funds  Effective Rate as so determined would be less than 0%, such rate shall be deemed  to be 0% for the purposes of this Agreement."  "'Material Adverse Change' means any event or condition which would have a  material adverse effect on (i) the collectability of all or a material portion of the  Receivables, (ii) the condition (financial or otherwise), business or properties of  the Borrower, (iii) the ability of the Servicer to collect on the Receivables, (iv) the  condition (financial or otherwise), business or properties of DFC, or (v) the  condition (financial or otherwise), businesses or investments of the Performance  Guarantor.  For the avoidance of doubt, the following is a non-exclusive list of  changes to the Credit and Collection Policy which, if reasonably likely to  negatively impact the creditworthiness or collectability of any Receivables, will  be deemed to constitute a “Material Adverse Change” unless such changes are  made with the consent of the Administrative Agent in the manner set forth in this  Agreement:  changes that would modify any of (a) the maximum allowable  threshold limitations for substantial underwriting criteria, including but not  limited to those related to loan term, Debt-to-Income Ratio, Payment-to-Income  Ratio, and Loan-to-Value Ratio; (b) the categorization of receivables as  delinquent, non-performing, defaulted or charged-off; (c) material collection  processes relating, without limitation, to delinquent, non-performing, defaulted or  charged-off receivables, loan loss recognition, loan modification (including  extensions and deferrals), end-of-term recovery and processing, and collateral  recovery; (d) any provisions for credit exceptions; and (e) stated creditworthiness  thresholds required for obligors."  "'Payment Date' means (i) prior to June 2021 the 15th day of each calendar month  or, if any such day is not a Business Day, the next succeeding Business Day,  commencing September 15, 2020 and (ii) thereafter, the 20th day of each calendar  month, or if any such day is not a Business Day, the next succeeding Business  Day, commencing June 21, 2021."  "'Prime Rate' means the rate of interest last quoted by The Wall Street Journal as  the 'Prime Rate' in the U.S. or, if The Wall Street Journal ceases to quote such  rate, the highest per annum interest rate published by the Federal Reserve Board  in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the  'bank prime loan' rate or, if such rate is no longer quoted therein, any similar rate  quoted therein (as determined by the Administrative Agent) or any similar release  by the Federal Reserve Board (as determined by the Administrative Agent). Each  

 

   - 6 -  148554138v6  change in the Prime Rate shall be effective from and including the date such  change is publicly announced or quoted as being effective."  "'Required Rate' means, as of any date, the sum of (i) the Weighted Average  Hedge Rate as of such date plus (ii) the Program Fee Rate as of such date plus  (iii) the Servicing Fee Rate plus (iv) the Backup Servicing Fee Rate plus (v) the  greater of (a) zero percent (0.00%) and (b) the percentage which will result in  Excess Spread (Adjusted) that is at least equal to 3.75%."  "'Serviced Portfolio' means the Servicer's entire portfolio of motor vehicle retail  installment sale contracts and installment loans that (i) are originated, directly or  indirectly, by DFC in accordance with the Credit and Collection Policy, (ii) are  serviced by DFC, (iii) are owned by DFC or an Affiliate or a Subsidiary of DFC  and (iv) satisfy each of the eligibility requirements set forth on Schedule B hereto.   For the avoidance of doubt, no motor vehicle retail installment sale contracts or  installment loans that were originated, directly or indirectly, by DFC in  accordance with any predecessor set of credit policies and underwriting guidelines  to the Credit and Collection Policy shall not be included in the Serviced  Portfolio."  "'Weighted Average Overcollateralization Percentage' means, as of any date of  determination, the percentage equivalent of a fraction, (i) the numerator of which  equals the sum of (a) the product of (1) the applicable Required  Overcollateralization Percentage with respect to Prime Receivables as of such  date times (2) the difference of (A) the aggregate Adjusted Principal Balance of  all Prime Receivables that are Eligible Receivables as of such date minus (B) the  portion of the Excess Concentration Amount that is allocable to the Prime  Receivables as of such date plus (b) the product of (1) the applicable Required  Overcollateralization Percentage with respect to Near Prime Receivables as of  such date times (2) the difference of (A) the aggregate Adjusted Principal Balance  of all Near Prime Receivables that are Eligible Receivables as of such date minus  (B) the portion of the Excess Concentration Amount that is allocable to the Near  Prime Receivables as of such date plus (c) the product of (1) the applicable  Required Overcollateralization Percentage with respect to Subprime Receivables  as of such date times (2) the difference of (A) the aggregate Adjusted Principal  Balance of all Subprime Receivables that are Eligible Receivables as of such date  minus (B) the portion of the Excess Concentration Amount that is allocable to the  Subprime Receivables as of such date, and (ii) the denominator of which is equal  to the Net Eligible Pool Balance as of such date.  For purposes of calculating the  Weighted Average Overcollateralization Percentage on any date of determination,  the Excess Concentration Amount on such date shall be allocated among the  Prime Receivables, the Near Prime Receivables, and the Subprime Receivables  based on the percentage of the Eligible Pool Balance that is represented,  respectively, by the Adjusted Principal Balance of all Prime Receivables that are  Eligible Receivables as of such date, the Adjusted Principal Balance of all Near  Prime Receivables that are Eligible Receivables as of such date, and the Adjusted  

 

   - 7 -  148554138v6  Principal Balance of all Subprime Receivables that are Eligible Receivables as of  such date "    (b) Section 1.01 is further amended by adding the following definitions of  "Available Tenor," "Benchmark," "Benchmark Replacement," "Benchmark Replacement  Adjustment," "Benchmark Replacement Conforming Changes," "Benchmark Replacement  Date," "Benchmark Transition Event," "Benchmark Unavailability Period," "Corresponding  Tenor," "Daily Simple SOFR," "Early Opt-in Election," "FCA," "Floor," "Interpolated Rate,"  "ISDA Definitions," "NYFRB," "NYFRB Rate," "NYFRB's Website," "Overnight Bank Funding  Rate," "Reference Time," "Relevant Governmental Body," "SOFR," "SOFR Administrator,"  "SOFR Administrator's Website," "Term SOFR," "Term SOFR Notice," "Term SOFR Transition  Event," and "Unadjusted Benchmark Replacement" in appropriate alphabetical order:  "'Available Tenor' means, as of any date of determination and with respect to the  then-current Benchmark, as applicable, any tenor for such Benchmark (or  component thereof) or payment period for interest calculated with reference to  such Benchmark (or component thereof), as applicable, that is or may be used for  determining the length of an Interest Period for any term rate or otherwise, for  determining any frequency of making payments of interest calculated pursuant to  this Agreement as of such date."  "'Benchmark' means, initially, LIBOR; provided, that if a Benchmark Transition  Event, a Term SOFR Transition Event or an Early Opt-in Election, as applicable,  and its related Benchmark Replacement Date have occurred with respect to  LIBOR or the then-current Benchmark, then 'Benchmark' means the applicable  Benchmark Replacement to the extent that such Benchmark Replacement has  replaced such prior benchmark rate pursuant to clause (b) or clause (c) of Section  2.17."  "'Benchmark Replacement' means, for any Available Tenor, the first alternative  set forth in the order below that can be determined by the Administrative Agent  for the applicable Benchmark Replacement Date:  (1) the sum of: (a) Term SOFR and (b) the related Benchmark  Replacement Adjustment;  (2) the sum of: (a) Daily Simple SOFR and (b) the related Benchmark  Replacement Adjustment;  (3) the sum of: (a) the alternate benchmark rate that has been selected by  the Administrative Agent and the Borrower as the replacement for the  then-current Benchmark for the applicable Corresponding Tenor giving  due consideration to (i) any selection or recommendation of a replacement  benchmark rate or the mechanism for determining such a rate by the  Relevant Governmental Body or (ii) any evolving or then-prevailing  market convention for determining a benchmark rate as a replacement for  the then-current Benchmark for dollar-denominated syndicated credit  

 

   - 8 -  148554138v6  facilities at such time and (b) the related Benchmark Replacement  Adjustment;  provided, that in the case of clause (1), such Unadjusted Benchmark  Replacement is displayed on a screen or other information service that publishes  such rate from time to time as selected by the Administrative Agent in its  reasonable discretion; provided further, that notwithstanding anything to the  contrary in this Agreement or in any other Basic Document, upon the occurrence  of a Term SOFR Transition Event, and the delivery of a Term SOFR Notice, on  the applicable Benchmark Replacement Date the 'Benchmark Replacement' shall  revert to and shall be deemed to be the sum of (a) Term SOFR and (b) the related  Benchmark Replacement Adjustment, as set forth in clause (1) of this definition  (subject to the first proviso above).  If the Benchmark Replacement as determined pursuant to clause (1), (2) or  (3) above would be less than the Floor, the Benchmark Replacement will be  deemed to be the Floor for the purposes of this Agreement and the other Basic  Documents."  "'Benchmark Replacement Adjustment' means, with respect to any replacement of  the then-current Benchmark with an Unadjusted Benchmark Replacement for any  applicable Interest Period and Available Tenor for any setting of such Unadjusted  Benchmark Replacement:  (1) for purposes of clauses (1) and (2) of the definition of 'Benchmark  Replacement,' the first alternative set forth in the order below that can be  determined by the Administrative Agent:  (a) the spread adjustment, or method for calculating or determining  such spread adjustment, (which may be a positive or negative value or  zero) as of the Reference Time such Benchmark Replacement is first set  for such Interest Period that has been selected or recommended by the  Relevant Governmental Body for the replacement of such Benchmark  with the applicable Unadjusted Benchmark Replacement for the applicable  Corresponding Tenor;  (b) the spread adjustment (which may be a positive or negative  value or zero) as of the Reference Time such Benchmark Replacement is  first set for such Interest Period that would apply to the fallback rate for a  derivative transaction referencing the ISDA Definitions to be effective  upon an index cessation event with respect to such Benchmark for the  applicable Corresponding Tenor; and  (2) for purposes of clause (3) of the definition of 'Benchmark  Replacement,' the spread adjustment, or method for calculating or  determining such spread adjustment, (which may be a positive or negative  value or zero) that has been selected by the Administrative Agent and the  Borrower for the applicable Corresponding Tenor giving due  

 

   - 9 -  148554138v6  consideration to (i) any selection or recommendation of a spread  adjustment, or method for calculating or determining such spread  adjustment, for the replacement of such Benchmark with the applicable  Unadjusted Benchmark Replacement by the Relevant Governmental Body  on the applicable Benchmark Replacement Date and/or (ii) any evolving  or then-prevailing market convention for determining a spread adjustment,  or method for calculating or determining such spread adjustment, for the  replacement of such Benchmark with the applicable Unadjusted  Benchmark Replacement for dollar-denominated syndicated credit  facilities at such time;  provided, that in the case of clause (1) above, such adjustment is displayed  on a screen or other information service that publishes such Benchmark  Replacement Adjustment from time to time as selected by the Administrative  Agent in its reasonable discretion."  "'Benchmark Replacement Conforming Changes' means, with respect to any  Benchmark Replacement, any technical, administrative or operational changes  (including changes to the definition of 'Alternate Base Rate,' the definition of  'Business Day,' the definition of 'Interest Period,' timing and frequency of  determining rates and making payments of interest, timing of borrowing requests  or prepayment, conversion or continuation notices, length of lookback periods,  the applicability of breakage provisions, and other technical, administrative or  operational matters) that the Administrative Agent decides may be appropriate to  reflect the adoption and implementation of such Benchmark Replacement and to  permit the administration thereof by the Administrative Agent in a manner  substantially consistent with market practice (or, if the Administrative Agent  decides that adoption of any portion of such market practice is not  administratively feasible or if the Administrative Agent determines that no market  practice for the administration of such Benchmark Replacement exists, in such  other manner of administration as the Administrative Agent decides is reasonably  necessary in connection with the administration of this Agreement and the other  Basic Documents)."  "'Benchmark Replacement Date' means the earliest to occur of the following  events with respect to the then-current Benchmark:  (1) in the case of clause (1) or (2) of the definition of 'Benchmark  Transition Event,' the later of (a) the date of the public statement or  publication of information referenced therein and (b) the date on which the  administrator of such Benchmark (or the published component used in the  calculation thereof) permanently or indefinitely ceases to provide all  Available Tenors of such Benchmark (or such component thereof);  (2) in the case of clause (3) of the definition of 'Benchmark Transition  Event,' the first date on which such Benchmark (or the published  component used in the calculation thereof) has been determined and  

 

   - 10 -  148554138v6  announced by the regulatory supervisor for the administrator of such  Benchmark (or component thereof) to be no longer representative;  provided that such non-representativeness will be determined by reference  to the most recent statement or publication referenced in such clause (c)  and even if any Available Tenor of such Benchmark (or component  thereof) continues to be provided on such date; or  (3) in the case of a Term SOFR Transition Event, the date that is thirty  (30) days after the date a Term SOFR Notice is provided to the Lenders  and the Borrower pursuant to Section 2.17(c); or   (4) in the case of an Early Opt-in Election, the sixth (6th) Business Day  after the date notice of such Early Opt-in Election is provided to the  Lenders, so long as the Administrative Agent has not received, by 5:00  p.m. (New York City time) on the fifth (5th) Business Day after the date  notice of such Early Opt-in Election is provided to the Lenders, written  notice of objection to such Early Opt-in Election from Lenders comprising  the Required Lenders.  For the avoidance of doubt, (i) if the event giving rise to the Benchmark  Replacement Date occurs on the same day as, but earlier than, the Reference Time  in respect of any determination, the Benchmark Replacement Date will be deemed  to have occurred prior to the Reference Time for such determination and (ii) the  'Benchmark Replacement Date' will be deemed to have occurred in the case of  clause (1) or (2) with respect to any Benchmark upon the occurrence of the  applicable event or events set forth therein with respect to all then-current  Available Tenors of such Benchmark (or the published component used in the  calculation thereof)."  "'Benchmark Transition Event' means the occurrence of one or more of the  following events with respect to the then-current Benchmark:  (1) a public statement or publication of information by or on behalf of the  administrator of such Benchmark (or the published component used in the  calculation thereof) announcing that such administrator has ceased or will  cease to provide all Available Tenors of such Benchmark (or such  component thereof), permanently or indefinitely, provided that, at the time  of such statement or publication, there is no successor administrator that  will continue to provide any Available Tenor of such Benchmark (or such  component thereof);  (2) a public statement or publication of information by the regulatory  supervisor for the administrator of such Benchmark (or the published  component used in the calculation thereof), the Federal Reserve Board, the  NYFRB, an insolvency official with jurisdiction over the administrator for  such Benchmark (or such component), a resolution authority with  jurisdiction over the administrator for such Benchmark (or such  component) or a court or an entity with similar insolvency or resolution  

 

   - 11 -  148554138v6  authority over the administrator for such Benchmark (or such component),  which states that the administrator of such Benchmark (or such  component) has ceased or will cease to provide all Available Tenors of  such Benchmark (or such component thereof) permanently or indefinitely,  provided that, at the time of such statement or publication, there is no  successor administrator that will continue to provide any Available Tenor  of such Benchmark (or such component thereof); or  (3) a public statement or publication of information by the regulatory  supervisor for the administrator of such Benchmark (or the published  component used in the calculation thereof) announcing that all Available  Tenors of such Benchmark (or such component thereof) are no longer, or  as of a specified future date will no longer be, representative.  For the avoidance of doubt, a 'Benchmark Transition Event' will be  deemed to have occurred with respect to any Benchmark if a public statement or  publication of information set forth above has occurred with respect to each then- current Available Tenor of such Benchmark (or the published component used in  the calculation thereof)."  "'Benchmark Unavailability Period' means the period (if any) (x) beginning at the  time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that  definition has occurred if, at such time, no Benchmark Replacement has replaced  the then-current Benchmark for all purposes hereunder and under any Basic  Document in accordance with Section 2.17 and (y) ending at the time that a  Benchmark Replacement has replaced the then-current Benchmark for all  purposes hereunder and under any Basic Document in accordance with Section  2.17."  "'Corresponding Tenor' with respect to any Available Tenor means, as applicable,  either a tenor (including overnight) or an interest payment period having  approximately the same length (disregarding business day adjustment) as such  Available Tenor."  "'Daily Simple SOFR' means, for any day, SOFR, with the conventions for this  rate (which may include a lookback) being established by the Administrative  Agent in accordance with the conventions for this rate selected or recommended  by the Relevant Governmental Body for determining 'Daily Simple SOFR' for  business loans; provided, that if the Administrative Agent decides that any such  convention is not administratively feasible for the Administrative Agent, then the  Administrative Agent may establish another convention in its reasonable  discretion."  "'Early Opt-in Election' means, if the then-current Benchmark is LIBOR, the  occurrence of:  (1) a notification by the Administrative Agent to (or the request by the  Borrower to the Administrative Agent to notify) each of the other parties  

 

   - 12 -  148554138v6  hereto that at least five currently outstanding dollar-denominated  syndicated credit facilities at such time contain (as a result of amendment  or as originally executed) a SOFR-based rate (including SOFR, a term  SOFR or any other rate based upon SOFR) as a benchmark rate (and such  syndicated credit facilities are identified in such notice and are publicly  available for review), and  (2) the joint election by the Administrative Agent and the Borrower to  trigger a fallback from LIBOR and the provision by the Administrative  Agent of written notice of such election to the Lenders."  "'FCA' has the meaning assigned to such term in Section 2.05(c)."  "'Floor' means the benchmark rate floor, if any, provided in this Agreement  initially (as of the execution of this Agreement, the modification, amendment or  renewal of this Agreement or otherwise) with respect to LIBO Rate."  "'Interpolated  Rate' means, at any time, for any Interest Period, the rate per  annum (rounded to the same number of decimal places as the LIBO Screen Rate)  determined by the Administrative Agent (which determination shall be conclusive  and binding absent manifest error) to be equal to the rate that results from  interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest  period for which the LIBO Screen Rate is available) that is shorter than the  Impacted Interest Period; and (b) the LIBO Screen Rate for the shortest period  (for which that LIBO Screen Rate is available) that exceeds the Impacted Interest  Period, in each case, at such time."  "'ISDA Definitions' means the 2006 ISDA Definitions published by the  International Swaps and Derivatives Association, Inc. or any successor thereto, as  amended or supplemented from time to time, or any successor definitional booklet  for interest rate derivatives published from time to time by the International  Swaps and Derivatives Association, Inc. or such successor thereto."  "'NYFRB' means the Federal Reserve Bank of New York."  "'NYFRB Rate' means, for any day, the greater of (a) the Federal Funds Effective  Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on  such day (or for any day that is not a Business Day, for the immediately preceding  Business Day); provided, that if none of such rates are published for any day that  is a Business Day, the term 'NYFRB Rate' means the rate for a federal funds  transaction quoted at 11:00 a.m. on such day received by the Administrative  Agent from a federal funds broker of recognized standing selected by it; provided,  further, that if any of the aforesaid rates as so determined be less than 0%, such  rate shall be deemed to be 0% for purposes of this Agreement."  "'NYFRB's Website' means the website of the NYFRB at  http://www.newyorkfed.org, or any successor source."  

 

   - 13 -  148554138v6  "'Overnight Bank Funding Rate' means, for any day, the rate comprised of both  overnight federal funds and overnight Eurodollar borrowings by U.S.-managed  banking offices of depository institutions, as such composite rate shall be  determined by the NYFRB as set forth on the NYFRB’s Website from time to  time, and published on the next succeeding Business Day by the NYFRB as an  overnight bank funding rate."  "'Payment' has the meaning assigned to it in Section 10.09."  "'Payment Notice' has the meaning assigned to it in Section 10.09."  "'Reference Time' with respect to any setting of the then-current Benchmark  means (1) if such Benchmark is LIBOR, 11:00 a.m. (London time) on the day that  is two London banking days preceding the date of such setting, and (2) if such  Benchmark is not LIBOR, the time determined by the Administrative Agent in its  reasonable discretion."  "'Relevant Governmental Body' means the Federal Reserve Board or the NYFRB,  or a committee officially endorsed or convened by the Federal Reserve Board or  the NYFRB, or any successor thereto."  "'SOFR' means, with respect to any Business Day, a rate per annum equal to the  secured overnight financing rate for such Business Day published by the SOFR  Administrator on the SOFR Administrator’s Website on the immediately  succeeding Business Day."  "'SOFR Administrator' means the NYFRB (or a successor administrator of the  secured overnight financing rate)."  "'SOFR Administrator’s Website' means the NYFRB’s website, currently at  http://www.newyorkfed.org, or any successor source for the secured overnight  financing rate identified as such by the SOFR Administrator from time to time."  "'Term SOFR' means, for the applicable Corresponding Tenor as of the applicable  Reference Time, the forward-looking term rate based on SOFR that has been  selected or recommended by the Relevant Governmental Body."  "'Term SOFR Notice' means a notification by the Administrative Agent to the  Lenders and the Borrower of the occurrence of a Term SOFR Transition Event."  "'Term SOFR Transition Event' means the determination by the Administrative  Agent that (a) Term SOFR has been recommended for use by the Relevant  Governmental Body, (b) the administration of Term SOFR is administratively  feasible for the Administrative Agent and (c) a Benchmark Transition Event or an  Early Opt-in Election, as applicable, has previously occurred resulting in a  Benchmark Replacement in accordance with Section 2.17 that is not Term SOFR.   For the avoidance of doubt, the Administrative Agent shall not be required to  

 

   - 14 -  148554138v6  deliver a Term SOFR Notice after a Term SOFR Transition Event and may do so  in its sole discretion."  "'Unadjusted Benchmark Replacement' means the applicable Benchmark  Replacement excluding the related Benchmark Replacement Adjustment."  (c) Section 2.05 (Payments) is amended by deleting clause (c) thereof and  replacing it with the following:  "(c) The Interest on certain portions of the Loans Outstanding  hereunder is determined by reference to LIBOR.  LIBOR is intended to represent  the rate at which contributing banks may obtain short-term borrowings from each  other in the London interbank market.  On March 5, 2021, the U.K. Financial  Conduct Authority ('FCA') publicly announced that:  immediately after December  31, 2021, publication of the 1-week and 2-month U.S. Dollar LIBOR settings will  permanently cease; immediately after June 30, 2023, publication of the overnight  and 12-month U.S. Dollar LIBOR settings will permanently cease; and  immediately after June 30, 2023, the 1-month, 3-month and 6-month U.S. Dollar  LIBOR settings will cease to be provided or, subject to the FCA's consideration of  the case, be provided on a synthetic basis and no longer be representative of the  underlying market and economic reality they are intended to measure and that  representativeness will not be restored.  There is no assurance that dates  announced by the FCA will not change or that the administrator  of LIBOR and/or  regulators will not take further action that could impact the availability,  composition, or characteristics of LIBOR or the currencies and/or tenors for  which LIBOR is published.  Each party to this Agreement should consult its own  advisors to stay informed of any such developments.  Public and private sector  industry initiatives are currently underway to identify new or alternative reference  rates to be used in place of LIBOR.  Upon the occurrence of a Benchmark  Transition Event, a Term SOFR Transition Event or an Early Opt-in Election,  Sections 2.17(b) and (c) provide the mechanism for determining an alternative  rate of interest.  The Administrative Agent will promptly notify the Borrower,  pursuant to Section 2.17(e), of any change to the reference rate upon which the  interest rate on Eurodollar Loans is based.  However, the Administrative Agent  does not warrant or accept any responsibility for, and shall not have any liability  with respect to, the administration, submission, performance or any other matter  related to LIBOR or other rates in the definition of “LIBO Rate” or with respect  to any alternative or successor rate thereto, or replacement rate thereof (including,  without limitation, (i) any such alternative, successor or replacement rate  implemented pursuant to Section 2.17(b) or (c), whether upon the occurrence of a  Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in  Election, and (ii) the implementation of any Benchmark Replacement Conforming  Changes pursuant to Section 2.17(d)), including without limitation, whether the  composition or characteristics of any such alternative, successor or replacement  reference rate will be similar to, or produce the same value or economic  equivalence of, LIBOR or have the same volume or liquidity as did the London  interbank offered rate prior to its discontinuance or unavailability.  The  

 

   - 15 -  148554138v6  Administrative Agent and its affiliates and/or other related entities may engage in  transactions that affect the calculation of any successor or alternative rate  (including any Benchmark Replacement) and/or any relevant adjustments thereto,  in each case, in a manner adverse to the Borrower.  The Administrative Agent  may select information sources or services in its reasonable discretion to ascertain  any Benchmark or any component thereof, in each case pursuant to the terms of  this Agreement, and shall have no liability to the Borrower, any Lender or any  other person or entity for damages of any kind, including direct or indirect,  special, punitive, incidental or consequential damages, costs, losses or expenses  (whether in tort, contract or otherwise and whether at law or in equity), for any  error or calculation of any such rate (or component thereof) provided by any such  information source or service."  (d) The following Section 2.17 (Alternate Rate of Interest) is added  immediately following Section 2.16 (Defaulting Committed Lenders), and the Table of Contents  is amended to add a reference to Section 2.17 (Alternate Rate of Interest):  "SECTION 2.17.  Alternate Rate of Interest.     (a)  Subject to clauses (b), (c), (d) and (e) of this Section 2.17, if  prior to the commencement of any Interest Period:  (i) the Administrative Agent determines (which determination shall be  conclusive absent manifest error) that adequate and reasonable means do not exist  for ascertaining LIBOR (including because the LIBOR Screen Rate is not  available or published on a current basis), for such Interest Period; provided, that  no Benchmark Transition Event shall have occurred at such time; or   (ii) the Administrative Agent is advised by the Required Lenders that  LIBOR for such Interest Period will not adequately and fairly reflect the cost to  such Lenders (or Lender) of making or maintaining their Loans (or its Loan) for  such Interest Period;  then the Administrative Agent shall give notice thereof to the Borrower  and the Lenders by telephone, telecopy or electronic mail as promptly as  practicable thereafter and, until the Administrative Agent notifies the Borrower  and the Lenders that the circumstances giving rise to such notice no longer exist,  the interest rate applicable to the Loan(s) on each day will be the Alternate Base  Rate.  (b) Notwithstanding anything to the contrary herein or in any other Basic  Document (and any Hedging Agreement shall be deemed not to be a 'Basic  Document' for purposes of this Section 2.17) , if a Benchmark Transition Event or  an Early Opt-in Election, as applicable, and its related Benchmark Replacement  Date have occurred prior to the Reference Time in respect of any setting of the  then-current Benchmark, then (x) if a Benchmark Replacement is determined in  accordance with clause (1) or (2) of the definition of 'Benchmark Replacement'  for such Benchmark Replacement Date, such Benchmark Replacement will  

 

   - 16 -  148554138v6  replace such Benchmark for all purposes hereunder and under any Basic  Document in respect of such Benchmark setting and subsequent Benchmark  settings without any amendment to, or further action or consent of any other party  to, this Agreement or any other Basic Document and (y) if a Benchmark  Replacement is determined in accordance with clause (3) of the definition of  'Benchmark Replacement' for such Benchmark Replacement Date, such  Benchmark Replacement will replace such Benchmark for all purposes hereunder  and under any Basic Document in respect of any Benchmark setting at or after  5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date  notice of such Benchmark Replacement is provided to the Lenders without any  amendment to, or further action or consent of any other party to, this Agreement  or any other Basic Document so long as the Administrative Agent has not  received, by such time, written notice of objection to such Benchmark  Replacement from Lenders comprising the Required Lenders.  (c)  Notwithstanding anything to the contrary herein or in any other Basic  Document and subject to the proviso below in this paragraph, if a Term SOFR  Transition Event and its related Benchmark Replacement Date have occurred  prior to the Reference Time in respect of any setting of the then-current  Benchmark, then the applicable Benchmark Replacement will replace the then- current Benchmark for all purposes hereunder or under any Basic Document in  respect of such Benchmark setting and subsequent Benchmark settings, without  any amendment to, or further action or consent of any other party to, this  Agreement or any other Basic Document; provided, that this clause (c) shall not  be effective unless the Administrative Agent has delivered to the Lenders and the  Borrower a Term SOFR Notice.  (d)  In connection with the implementation of a Benchmark Replacement,  the Administrative Agent will have the right to make Benchmark Replacement  Conforming Changes from time to time and, notwithstanding anything to the  contrary herein or in any other Basic Document, any amendments implementing  such Benchmark Replacement Conforming Changes will become effective  without any further action or consent of any other party to this Agreement or any  other Basic Document.  (e)  The Administrative Agent will promptly notify the Borrower and the  Lenders of (i) any occurrence of a Benchmark Transition Event, a Term SOFR  Transition Event or an Early Opt-in Election, as applicable, (ii) the  implementation of any Benchmark Replacement, (iii) the effectiveness of any  Benchmark Replacement Conforming Changes, and (iv) the commencement or  conclusion of any Benchmark Unavailability Period. Any determination, decision  or election that may be made by the Administrative Agent or, if applicable, any  Lender (or group of Lenders) pursuant to this Section 2.17, including any  determination with respect to a tenor, rate or adjustment or of the occurrence or  non-occurrence of an event, circumstance or date and any decision to take or  refrain from taking any action or any selection, will be conclusive and binding  absent manifest error and may be made in its or their sole discretion and without  

 

   - 17 -  148554138v6  consent from any other party to this Agreement or any other Basic Document,  except, in each case, as expressly required pursuant to this Section 2.17."  (e) Section 7.13 (Servicer Termination Events) is amended by deleting  clauses (n) and (o) thereof and replacing them with the following:  "(n) as of any Reporting Date, the arithmetic mean of the Serviced Portfolio  Net Loss Ratio (Non-Prime) for the three previous Collection Periods is greater  than 13.50%;   (o) as of any Reporting Date, the arithmetic mean of the Serviced Portfolio  Deferral Ratio for the three previous Collection Periods is greater than 3.00%; or  (p) the audit described in Section 7.07(d) for calendar year 2021 is not  completed to the reasonable satisfaction of the Administrative Agent by  September 15, 2021."  (f) The following Section 10.09 (Erroneous Payments) is added immediately  following Section 10.08 (Successor Administrative Agent), and the Table of Contents is  amended to add a reference to Section 10.09 (Erroneous Payments):  "SECTION 10.09.  Erroneous Payments.     (a)  Each Lender hereby agrees that (x) if the Administrative Agent  notifies such Lender that the Administrative Agent has determined in its sole  discretion that any funds received by such Lender from the Administrative Agent  or any of its Affiliates (whether as a payment, prepayment or repayment of  principal, interest, fees or otherwise; individually and collectively, a 'Payment')  were erroneously transmitted to such Lender (whether or not known to such  Lender), and demands the return of such Payment (or a portion thereof), such  Lender shall promptly, but in no event later than one Business Day thereafter,  return to the Administrative Agent the amount of any such Payment (or portion  thereof) as to which such a demand was made in same day funds, together with  interest thereon in respect of each day from and including the date such Payment  (or portion thereof) was received by such Lender to the date such amount is repaid  to the Administrative Agent at the greater of the NYFRB Rate and a rate  determined by the Administrative Agent in accordance with banking industry  rules on interbank compensation from time to time in effect, and (y) to the extent  permitted by applicable law, such Lender shall not assert, and hereby waives, as  to the Administrative Agent, any claim, counterclaim, defense or right of set-off  or recoupment with respect to any demand, claim or counterclaim by the  Administrative Agent for the return of any Payments received, including without  limitation any defense based on “discharge for value” or any similar doctrine.  A  notice of the Administrative Agent to any Lender under this Section 10.09(a) shall  be conclusive, absent manifest error.    

 

   - 18 -  148554138v6  (b)  Each Lender hereby further agrees that if it receives a Payment from  the Administrative Agent or any of its Affiliates (x) that is in a different amount  than, or on a different date from, that specified in a notice of payment sent by the  Administrative Agent (or any of its Affiliates) with respect to such Payment (a  'Payment Notice') or (y) that was not preceded or accompanied by a Payment  Notice, it shall be on notice, in each such case, that an error has been made with  respect to such Payment.  Each Lender agrees that, in each such case, or if it  otherwise becomes aware a Payment (or portion thereof) may have been sent in  error, such Lender shall promptly notify the Administrative Agent of such  occurrence and, upon demand from the Administrative Agent, it shall promptly,  but in no event later than one Business Day thereafter, return to the  Administrative Agent the amount of any such Payment (or portion thereof) as to  which such a demand was made in same day funds, together with interest thereon  in respect of each day from and including the date such Payment (or portion  thereof) was received by such Lender to the date such amount is repaid to the  Administrative Agent at the greater of the NYFRB Rate and a rate determined by  the Administrative Agent in accordance with banking industry rules on interbank  compensation from time to time in effect.  (c)  The Borrower hereby agrees that (x) in the event an erroneous  Payment (or portion thereof) are not recovered from any Lender that has received  such Payment (or portion thereof) for any reason, the Administrative Agent shall  be subrogated to all the rights of such Lender with respect to such amount and (y)  an erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy  any Obligations owed by the Borrower.  (d)  Each party’s obligations under this Section 10.09 shall survive the  resignation or replacement of the Administrative Agent or any transfer of rights or  obligations by, or the replacement of, a Lender, the termination of the  Commitments or the repayment, satisfaction or discharge of all Obligations under  any Basic Document."  (g) Section 13.01 (Amendments and Waivers) is amended by adding the  following paragraph to the end thereof:  "Notwithstanding anything in this Section or in any Basic Document to the  contrary, following the determination of a Benchmark Replacement, this  Agreement may be amended by the Administrative Agent without the consent of  any other Person and, except as provided in Section 2.17(d), without satisfying  any other amendment provisions of this Agreement or any other Basic Document,  to implement a Benchmark Replacement and any Benchmark Replacement  Conforming Changes. For the avoidance of doubt, any Benchmark Replacement  Conforming Changes in any amendment to this Agreement may be retroactive  (including retroactive to, but not before, the Benchmark Replacement Date) and  this Agreement may be amended more than once in connection with any  Benchmark Replacement Conforming Changes."  

 

   - 19 -  148554138v6    (h) Schedule A (Lender Supplement (JPMorgan Lender Group)) is amended  by changing the amount listed as the "Commitment" from $150,000,000 to $400,000,000 and by  changing the amount listed as the "Mandatory Commitment" from $150,000,000 to  $300,000,000.  (i) Schedule B (Eligible Receivable Criteria) is amended by deleting Criteria  20 and 25 therefrom in their entirety and replacing them, respectively, with the following:  "20. which at the time of underwriting did not have a Loan-to-Value Ratio of  greater than 140%;"   "25. with respect to which the related Contract (a) was underwritten by DFC in  accordance with the Credit and Collection Policy in effect at the time of  underwriting of such Contract, (b) satisfied in all material respects the  requirements of the Credit and Collection Policy in effect at the time of  underwriting of such Contract, and (c) satisfied all Applicable Law in effect at the  time of origination;"  SECTION 2. Representations, Warranties and Confirmations.  The Borrower  hereby confirms that all representations and warranties made by it pursuant to Sections 5.01 and  5.02 of the Loan Agreement were true and correct as of the date as of which they were made and  that it is in compliance with all covenants made by it pursuant to the Loan Agreement as of the  date hereof.  By its acknowledgment of this Amendment, DFC hereby confirms that all  representations and warranties made by it pursuant to Section 5.03 of the Loan Agreement were  true and correct as of the date as of which they were made and that it is in compliance with all  covenants made by it pursuant to the Loan Agreement as of the date hereof.  Furthermore, the  Borrower and DFC each hereby represents and warrants as to itself that:  (a) It has the power to execute, deliver and perform this Amendment and the  transactions contemplated hereby.  (b) The execution and delivery of this Amendment and the performance of  this Amendment and the Loan Agreement (as amended hereby) have been duly authorized by it  by all necessary company action (including any necessary action by its members).  (c) This Amendment has been duly executed and delivered on its behalf.  This  Amendment and the Loan Agreement (as amended hereby) constitute its legal, valid and binding  obligations, enforceable against it in accordance with their respective terms, except as  enforcement of such terms may be limited by Insolvency Laws affecting the enforcement of  creditors' rights generally and by the availability of equitable remedies.   (d) It is in compliance in all material respects with all Applicable Laws.  

 

   - 20 -  148554138v6  SECTION 3. Effectiveness of Amendment.         (a) This Amendment shall be effective upon (i) the delivery of a fully  executed copy hereof to the Administrative Agent, (ii) the delivery of a fully executed copy of  the Second Amended and Restated Fee Letter, dated as of June 4, 2021 (as amended, restated,  supplemented or otherwise modified from time to time, the "New Fee Letter"), and (iii) payment  of all amounts described in the New Fee Letter that are due and payable thereunder upon  execution thereof.   (b) Except as expressly amended by the terms of this Amendment, all terms  and conditions of the Loan Agreement shall remain in full force and effect and are hereby  ratified and confirmed.  This Amendment is effective only for the specific purpose for which it is  given and shall not operate as a consent, waiver, amendment or other modification of any other  term or condition set forth in the Loan Agreement.  Upon the effectiveness of this Amendment,  (i) each reference in the Loan Agreement to "this Agreement" or "this Loan Agreement" or  words of like import shall mean and be references to the Loan Agreement as amended hereby,  (ii) each reference in any other Basic Document to the Loan Agreement or to any terms defined  in the Loan Agreement which are modified hereby shall mean and be references to the Loan  Agreement or to such terms as modified hereby, (iii) each reference in the Loan Agreement and  in any other Basic Document to the Fee Letter or to any terms defined in the Fee Letter shall  mean and be references to the New Fee Letter or to such terms as modified therein.  The parties  hereto acknowledge and agree that this Amendment and the New Fee Letter shall each constitute  a Basic Document.  This Amendment does not constitute a novation or termination of the Loan  Agreement or any other Basic Document and all obligations thereunder are in all respects  continuing with only the terms thereof being modified as provided herein.  SECTION 4. Amendments, etc.  No provision of this Amendment shall be  waived, amended or otherwise modified except as provided in Section 13.01 of the Loan  Agreement.  SECTION 5. GOVERNING LAW.  THIS AMENDMENT SHALL BE  GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,  THE LAWS OF THE STATE OF NEW YORK.  SECTION 6. Severability.  If one or more of the covenants, agreements,  provisions or terms of this Amendment shall be for any reason whatsoever held invalid, then  such covenants, agreements, provisions or terms shall be deemed severable from the remaining  covenants, agreements, provisions or terms of this Amendment and shall in no way affect the  validity or enforceability of the other provisions of this Amendment or the Loan Agreement as  amended hereby.  SECTION 7. Binding Effect.  This Amendment shall be binding upon and shall  be enforceable by the parties hereto and their respective successors and permitted assigns.  SECTION 8. Captions, etc.  The captions and section numbers appearing in this  Amendment are inserted only as a matter of convenience and do not define, limit, construe or  describe the scope or intent of the provisions of this Amendment.  

 

   - 21 -  148554138v6  SECTION 9. Counterparts.  This Amendment may be executed in any number of  counterparts and by different parties hereto in separate counterparts, each of which when so  executed shall be deemed to be an original and all of which when taken together shall constitute  one and the same agreement.  Delivery of an executed counterpart of a signature page to this  Amendment by facsimile or by electronic mail in a ".pdf" file shall be effective as delivery of a  manually executed counterpart of this Amendment.  Each party agrees that this Amendment and  any other documents to be delivered in connection herewith may be electronically signed, and  that any electronic signatures appearing on this Amendment or such other documents are the  same as handwritten signatures for the purposes of validity, enforceability, and admissibility.  [Signature Page Follows]  

 

 

 

[Signature Page to Amendment No. 1 to A&R Loan Agt. (SCFC Business Services LLC)] 148554138v3 CHARIOT FUNDING LLC,   as Conduit Lender By:  JPMORGAN CHASE BANK, N.A.,   as its attorney-in-fact By:   Name: Title: JPMORGAN CHASE BANK N.A.,   as JPMorgan Agent, as a Committed Lender,   and as Administrative Agent By:   Name: Title: Elizabeth S. Trainor  Executive Director Elizabeth S. Trainor  Executive Directorarc_ex41

 

Exhibit 4.1

 

 

COMMON STOCK PURCHASE WARRANT

 

 AMERICAN RESOURCES CORPORATION

 

 

Warrant Shares:
[_______]                                                                                                 

Initial Exercise
Date: June __, 2021

THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that,
for value received, [_____________] or its assigns (the
“Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date
hereof (the “Initial
Exercise Date”) and on or prior to 5:00 p.m. (New York
City time) on June ___, 2026 (the “Termination Date”) but
not thereafter, to subscribe for and purchase from American
Resources Corporation, a Florida corporation (the
“Company”), up to [______]
shares (as subject to adjustment hereunder, the “Warrant Shares”) of
Common Stock. The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in
Section 2(b).

 

Section
1.                                Definitions.
Capitalized terms used and not otherwise defined herein shall have
the meanings set forth in that certain Securities Purchase
Agreement (the “Purchase Agreement”),
dated June 7, 2021, among the Company and the purchasers signatory
thereto.

 

Section
2.                                Exercise.

 

a) Exercise of Warrant. Exercise
of the purchase rights represented by this Warrant may be made, in
whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to
the Company of a duly executed facsimile copy or PDF copy submitted
by e-mail (or e-mail attachment) of the Notice of Exercise in the
form annexed hereto (the “Notice of Exercise”).
Within the earlier of (i) two (2) Trading Days and (ii) the number
of Trading Days comprising the Standard Settlement Period (as
defined in Section 2(d)(i) herein) following the date of exercise
as aforesaid, the Holder shall deliver the aggregate Exercise Price
for the shares specified in the applicable Notice of Exercise by
wire transfer or cashier’s check drawn on a United States
bank unless the cashless exercise procedure specified in Section
2(c) below is specified in the applicable Notice of
Exercise. No
ink-original Notice of Exercise shall be required, nor shall any
medallion guarantee (or other type of guarantee or notarization) of
any Notice of Exercise be required. Notwithstanding anything herein
to the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company until the Holder has
purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three
(3) Trading Days of the date on which the final Notice of Exercise
is delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise
within one (1) Business Day of receipt of such notice.
Notwithstanding the foregoing, with respect to any Notice(s) of
Exercise delivered on or prior to 4:00 p.m. (New York City time) on
the Trading Date prior to the Initial Exercise Date, which may be
delivered at any time after the time of execution of the Purchase
Agreement, the Company agrees to deliver the Warrant Shares subject
to such notice(s) by 4:00 p.m. (New York City time) on the Initial
Exercise Date and the Initial Exercise Date shall be the Warrant
Share Delivery Date for purposes hereunder, provided that payment
of the aggregate Exercise Price (other than in the case of a
cashless exercise) is received by such Warrant Share Delivery Date.
The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason
of the provisions of this paragraph, following the purchase of a
portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be
less than the amount stated on the face hereof.

 

                                                             

1

 

b) Exercise Price. The exercise
price per share of Common Stock under this Warrant shall be
$3.50, subject to adjustment
hereunder (the “Exercise
Price”).

 

c) Cashless Exercise. If at the
time of exercise hereof there is no effective registration
statement registering, or the prospectus contained therein is not
available for the issuance of the Warrant Shares to the Holder,
then this Warrant may also be exercised, in whole or in part, at
such time by means of a “cashless exercise” in which
the Holder shall be entitled to receive a number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:

 

(A) =
as applicable: (i) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise if such
Notice of Exercise is (1) both executed and delivered pursuant to
Section 2(a) hereof on a day that is not a Trading Day or (2) both
executed and delivered pursuant to Section 2(a) hereof on a Trading
Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(68) of Regulation NMS promulgated under the
federal securities laws) on such Trading Day, (ii) at the option of
the Holder, either (y) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise or (z) the
Bid Price of the Common Stock on the principal Trading Market as
reported by Bloomberg L.P. (“Bloomberg”) as of the
time of the Holder’s execution of the applicable Notice of
Exercise if such Notice of Exercise is executed during
“regular trading hours” on a Trading Day and is
delivered within two (2) hours thereafter (including until two (2)
hours after the close of “regular trading hours” on a
Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on
the date of the applicable Notice of Exercise if the date of such
Notice of Exercise is a Trading Day and such Notice of Exercise is
both executed and delivered pursuant to Section 2(a) hereof after
the close of “regular trading hours” on such Trading
Day;

 

(B) =
the Exercise Price of this Warrant, as adjusted hereunder;
and

 

(X) =
the number of Warrant Shares that would be issuable upon exercise
of this Warrant in accordance with the terms of this Warrant if
such exercise were by means of a cash exercise rather than a
cashless exercise.

 

If Warrant Shares are issued in such a cashless exercise, the
parties acknowledge and agree that in accordance with Section
3(a)(9) of the Securities Act, the Warrant Shares shall take on the
characteristics of the Warrants being exercised.  The
Company agrees not to take any position contrary to this Section
2(c).

 

 

2

 

“Bid Price” means, for any
date, the price determined by the first of the following clauses
that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the bid price of the Common Stock for the time in
question (or the nearest preceding date) on the Trading Market on
which the Common Stock is then listed or quoted as reported by
Bloomberg (based on a Trading Day from 9:30 a.m. (New York City
time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or
OTCQX is not a Trading Market, the volume weighted average price of
the Common Stock for such date (or the nearest preceding date) on
OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for
the Common Stock are then reported on The Pink Open Market (or a
similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the
Common Stock so reported, or (d) in all other cases, the fair
market value of a share of Common Stock as determined by an
independent appraiser selected in good faith by the Purchasers of a
majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.

 

“VWAP” means, for any
date, the price determined by the first of the following clauses
that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the
Trading Market on which the Common Stock is then listed or quoted
as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) 
if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest
preceding date) on OTCQB or OTCQX as applicable, (c) if the Common
Stock is not then listed or quoted for trading on OTCQB or OTCQX
and if prices for the Common Stock are then reported on The Pink
Open Market (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share
of the Common Stock so reported, or (d) in all other cases,
the fair market value of a share of Common Stock as determined by
an independent appraiser selected in good faith by the Purchasers
of a majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.

 

Notwithstanding
anything herein to the contrary, on the Termination Date, this
Warrant shall be automatically exercised via cashless exercise
pursuant to this Section 2(c).

 

 

 

3

 

d)

Mechanics of
Exercise.

 

i. Delivery of Warrant Shares Upon
Exercise. The Company shall cause the Warrant Shares
purchased hereunder to be transmitted by the Transfer Agent to the
Holder by crediting the account of the Holder’s or its
designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system
(“DWAC”) if the Company is
then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by Holder or (B)
the Warrant Shares are eligible for resale by the Holder without
volume or manner of sale limitations pursuant to Rule 144 (assuming
cashless exercise of the Warrants), and otherwise by physical
delivery of 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 to the address specified by the Holder in the Notice of
Exercise by the date that is the earliest of (i) two (2) Trading
Days after the delivery to the Company of the Notice of Exercise,
(ii) one (1) Trading Day after delivery of the aggregate Exercise
Price to the Company and (iii) the number of Trading Days
comprising the Standard Settlement Period after the delivery to the
Company of the Notice of Exercise (such date, the
“Warrant Share
Delivery Date”). Upon delivery of the Notice of
Exercise, the Holder shall be deemed for all corporate purposes to
have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date
of delivery of the Warrant Shares, provided that payment of the
aggregate Exercise Price (other than in the case of a cashless
exercise) is received within the earlier of (i) two (2) Trading
Days and (ii) the number of Trading Days comprising the Standard
Settlement Period following delivery of the Notice of Exercise.
If the
Company fails for any reason to deliver to the Holder the Warrant
Shares subject to a Notice of Exercise by the Warrant Share
Delivery Date, the Company shall pay to the Holder, in cash, as
liquidated damages and not as a penalty, for each $1,000 of Warrant
Shares subject to such exercise (based on the VWAP of the Common
Stock on the date of the applicable Notice of Exercise), $10 per
Trading Day (increasing to $20 per Trading Day on the fifth Trading
Day after such liquidated damages begin to accrue) for each Trading
Day after such Warrant Share Delivery Date until such Warrant
Shares are delivered or Holder rescinds such exercise. The Company
agrees to maintain a transfer agent that is a participant in the
FAST program so long as this Warrant remains outstanding and
exercisable. As used herein, “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 Notice of
Exercise.

 

 

4

 

ii. Delivery of New Warrants Upon
Exercise. If this Warrant shall have been exercised in part,
the Company shall, at the request of a Holder and upon surrender of
this Warrant certificate, at the time of delivery of the Warrant
Shares, deliver to the Holder a new Warrant evidencing the rights
of the Holder to purchase the unpurchased Warrant Shares called for
by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.

 

iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to
transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will
have the right to rescind such exercise.

 

iv. Compensation for Buy-In on Failure to
Timely Deliver Warrant Shares Upon Exercise. In addition to
any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder the Warrant
Shares in accordance with the provisions of Section 2(d)(i) above
pursuant to an exercise on or before the Warrant Share Delivery
Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the
Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”), then the
Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2)
the price at which the sell order giving rise to such purchase
obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number
of Warrant Shares for which such exercise was not honored (in which
case such exercise shall be deemed rescinded) or deliver to the
Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a 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 shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms
hereof.

 

 

5

 

v. No Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. As to any fraction of
a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay
a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up
to the next whole share.

 

vi. Charges, Taxes and Expenses.
Issuance of Warrant Shares shall be made without charge to the
Holder for any issue or transfer tax or other incidental expense in
respect of the issuance of such Warrant Shares, all of which taxes
and expenses shall be paid by the Company, and such Warrant Shares
shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that, in the event
that Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by
the Holder and the Company may require, as a condition thereto, the
payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto. The Company shall pay all Transfer Agent fees
required for same-day processing of any Notice of Exercise and all
fees to the Depository Trust Company (or another established
clearing corporation performing similar functions) required for
same-day electronic delivery of the Warrant Shares.

 

vii. Closing
of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

 

 

 

6

 

e)

Holder’s Exercise
Limitations. The Company shall not effect any exercise of
this Warrant, and a Holder shall not have the right to exercise any
portion of this Warrant, pursuant to Section 2 or otherwise, to the
extent that after giving effect to such issuance after exercise as
set forth on the applicable Notice of Exercise, the Holder
(together with the Holder’s Affiliates, and any other Persons
acting as a group together with the Holder or any of the
Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below).  For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates and Attribution Parties shall
include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being
made, but shall exclude the number of shares of Common Stock which
would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of
its Affiliates or Attribution Parties and (ii) exercise or
conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other
Common Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates or Attribution
Parties.  Except as set forth in the preceding sentence, for
purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2(e), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding.  Upon the written or oral
request of a Holder, the Company shall within one Trading Day
confirm orally and in writing 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 or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The
“Beneficial
Ownership Limitation” shall be 4.99% (or, upon
election by a Holder prior to the issuance of any Warrants, 9.99%)
of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock
issuable upon exercise of this Warrant. The Holder, upon notice to
the Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(e), provided that the
Beneficial Ownership Limitation in no event exceeds 9.99% of the
number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon
exercise of this Warrant held by the Holder and the provisions of
this Section 2(e) shall continue to apply. Any increase in the
Beneficial Ownership Limitation will not be effective until the
61st day
after such notice is delivered to the Company. The provisions of
this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section
2(e) to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.

 

 

 

7

 

Section
3.                                Certain
Adjustments.

 

a) Stock Dividends and Splits. If
the Company, at any time while this Warrant is outstanding: (i)
pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or
equity equivalent securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any shares of
Common Stock issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (iii) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of
shares, or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case
the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of
this Warrant shall remain unchanged. Any adjustment made pursuant
to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to
receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.

 

 

 

8

 

b)

Adjustment Upon Issuance of Common
Stock. If and whenever on or after the Initial Exercise
Date, the Company grants, issues or sells, (or enters into any
agreement to grant, issue or sell), or in accordance with this
Section 3(b) is deemed to have issued or sold, any Common Stock
(including the issuance or sale of Common Stock owned or held by or
for the account of the Company, but excluding any Exempt Issuances
issued or sold or deemed to have been issued or sold) for a
consideration per share (the “New Issuance Price”) less
than a price equal to the Exercise Price in effect immediately
prior to such issuance or sale or deemed issuance or sale (such
Exercise Price then in effect is referred to herein as the
“Applicable Exercise Price”) (the foregoing a
“Dilutive Issuance”), then immediately after such
Dilutive Issuance, the Exercise Price then in effect shall be
reduced to an amount equal to the New Issuance Price. For all
purposes of the foregoing (including, without limitation,
determining the adjusted Exercise Price and the New Issuance Price
under this Section 3(b)), the following shall be
applicable:

 

1.       

Issuance of
Options. If the Company in any manner grants, issues or sells (or
enters into any agreement to grant, issue or sell) any options
(“options”) to purchase Common Stock or to purchase
securities that are convertible into or exercisable or exchangeable
for Common Stock (“convertible securities”) (other than
Exempt Issuances) and the lowest price per share for which one
share of Common Stock are at any time issuable upon the exercise of
any such option or upon conversion, exercise or exchange of any
convertible securities issuable upon exercise of any such option or
otherwise pursuant to the terms thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the
time of the granting, issuance or sale (or the time of execution of
such agreement to grant, issue or sell, as applicable) of such
option for such price per share. For purposes of this Section
3(b)(i), the “lowest price per share for which one share of
Common Stock is at any time issuable upon the exercise of any such
options or upon conversion, exercise or exchange of any convertible
securities issuable upon exercise of any such option or otherwise
pursuant to the terms thereof” shall be equal to (1) the
lower of (x) the sum of the lowest amounts of consideration (if
any) received or receivable by the Company with respect to any one
share of Common Stock upon the granting, issuance or sale (or
pursuant to the agreement to grant, issue or sell, as applicable)
of such option, upon exercise of such option and upon conversion,
exercise or exchange of any Convertible Security issuable upon
exercise of such opotion or otherwise pursuant to the terms thereof
and (y) the lowest exercise price set forth in such option for
which one Common Stock is issuable (or may become issuable assuming
all possible market conditions) upon the exercise of any such
options or upon conversion, exercise or exchange of any convertible
securities issuable upon exercise of any such option or otherwise
pursuant to the terms thereof minus (2) the sum of all amounts paid
or payable to the holder of such option (or any other Person) upon
the granting, issuance or sale (or the agreement to grant, issue or
sell, as applicable) such option, upon exercise of such option and
upon conversion, exercise or exchange of any Convertible Security
issuable upon exercise of such option or otherwise pursuant to the
terms thereof plus the value of any other consideration received or
receivable by, or benefit conferred on, the holder of such option
(or any other Person). Except as contemplated below, no further
adjustment of the Exercise Price shall be made upon the actual
issuance of such Common Stock or of such convertible securities
upon the exercise of such options or otherwise pursuant to the
terms of or upon the actual issuance of such Common Stock upon
conversion, exercise or exchange of such convertible
securities.

 

 

9

 

2.       

Issuance of
Convertible Securities. If the Company in any manner issues or
sells (or enters into any agreement to issue or sell) any
convertible securities (other than Exempt Issuances) and the lowest
price per share for which one Common Stock is at any time issuable
upon the conversion, exercise or exchange thereof or otherwise
pursuant to the terms thereof is less than the Applicable Price,
then such share of Common Stock shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the
issuance or sale (or the time of execution of such agreement to
issue or sell, as applicable) of such convertible securities for
such price per share. For the purposes of this Section 3(b)(ii),
the “lowest price per share for which one Common Stock is at
any time issuable upon the conversion, exercise or exchange thereof
or otherwise pursuant to the terms thereof” shall be equal to
(1) the lower of (x) the sum of the lowest amounts of consideration
(if any) received or receivable by the Company with respect to one
share of Common Stock upon the issuance or sale (or pursuant to the
agreement to issue or sell, as applicable) of the Convertible
Security and upon conversion, exercise or exchange of such
Convertible Security or otherwise pursuant to the terms thereof and
(y) the lowest conversion price set forth in such Convertible
Security for which one Common Stock is issuable (or may become
issuable assuming all possible market conditions) upon conversion,
exercise or exchange thereof or otherwise pursuant to the terms
thereof minus (2) the sum of all amounts paid or payable to the
holder of such Convertible Security (or any other Person) upon the
issuance or sale (or the agreement to issue or sell, as applicable)
of such Convertible Security plus the value of any other
consideration received or receivable by, or benefit conferred on,
the holder of such Convertible Security (or any other Person).
Except as contemplated below, no further adjustment of the Exercise
Price shall be made upon the actual issuance of such Common Stock
upon conversion, exercise or exchange of such convertible
securities or otherwise pursuant to the terms thereof, and if any
such issuance or sale of such convertible securities is made upon
exercise of any options for which adjustment of this Warrant has
been or is to be made pursuant to other provisions of this Section
3(b), except as contemplated below, no further adjustment of the
Exercise Price shall be made by reason of such issuance or
sale.

 

3.       

Change in option
Price or Rate of Conversion. If the purchase or exercise 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
Common Stock increases or decreases at any time (other than
proportional changes in conversion or exercise prices, as
applicable, in connection with an event referred to in Section
3(a)), the Exercise Price in effect at the time of such increase or
decrease shall be adjusted to the Exercise Price 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.
For purposes of this Section 3(b)(iii), if the terms of any option
or Convertible Security that was outstanding as of the Initial
Exercise Date are increased or decreased in the manner described in
the immediately preceding sentence, then such option or Convertible
Security and the Common Stock deemed issuable upon exercise,
conversion or exchange thereof shall be deemed to have been issued
as of the date of such increase or decrease. No adjustment pursuant
to this Section 3(b) shall be made if such adjustment would result
in an increase of the Exercise Price then in effect.

 

 

10

 

4.       

Calculation of
Consideration Received. If any option and/or Convertible Security
and/or Adjustment Right is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the
Company (as determined by the Holder, the “Primary
Security”, and such option and/or Convertible Security and/or
Adjustment Right, the “Secondary Securities” and
together with the Primary Security, each a “Unit”),
together comprising one integrated transaction, the aggregate
consideration per share of Common Stock with respect to such
Primary Security shall be deemed to be the lowest of (x) the
purchase price of such Unit, (y) if such Primary Security is an
option and/or Convertible Security, the lowest price per share for
which one Common Stock is at any time issuable upon the exercise or
conversion of the Primary Security in accordance with Section
3(b)(i) or 3(b)(ii) above and (z) the lowest VWAP of the Common
Stock on any Trading Day during the five (5) Trading Day period
(the “Adjustment Period”) immediately following the
public announcement of such Dilutive Issuance (for the avoidance of
doubt, if such public announcement is released prior to the opening
of the applicable Trading Market on a Trading Day, such Trading Day
shall be the first Trading Day in such five Trading Day period and
if this Warrant is exercised, on any given Exercise Date during any
such Adjustment Period, solely with respect to such portion of this
Warrant converted on such applicable Exercise Date, such applicable
Adjustment Period shall be deemed to have ended on, and included,
the Trading Day immediately prior to such Exercise Date). If any
Common Stock, options or convertible securities are issued or sold
or deemed to have been issued or sold for cash, the consideration
received therefor will be deemed to be the net amount of
consideration received by the Company therefor. If any Common
Stock, options or convertible securities are issued or sold for a
consideration other than cash, the amount of such consideration
received by the Company will be the fair value of such
consideration, except where such consideration consists of publicly
traded securities, in which case the amount of consideration
received by the Company for such securities will be the arithmetic
average of the VWAPs of such security for each of the five (5)
Trading Days immediately preceding the date of receipt. If any
Common Stock, options or convertible securities are issued to the
owners of the non-surviving entity in connection with any merger in
which the Company is the surviving entity, the amount of
consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving entity
as is attributable to such Common Stock, options or convertible
securities (as the case may be). The fair value of any
consideration other than cash or publicly traded securities will be
determined jointly by the Company and the Holder. If such parties
are unable to reach agreement within ten (10) days after the
occurrence of an event requiring valuation (the “Valuation
Event”), the fair value of such consideration will be
determined within five (5) Trading Days after the tenth (10th) day
following such Valuation Event by an independent, reputable
appraiser jointly selected by the Company and the Holder. The
determination of such appraiser shall be final and binding upon all
parties absent manifest error and the fees and expenses of such
appraiser shall be borne by the Company.

 

 

11

 

5.       

Record Date. If the
Company takes a record of the holders of Common Stock for the
purpose of entitling them (A) to receive a dividend or other
distribution payable in Common Stock, options or in convertible
securities or (B) to subscribe for or purchase Common Stock,
options or convertible securities, then such record date will be
deemed to be the date of the issuance or sale of the 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).

 

c) Subsequent Rights Offerings.
In addition to any adjustments
pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase
stock, warrants, securities or other property pro rata to the
record holders of any class of shares 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 on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
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 shares
of Common Stock are to be determined for the grant, issue 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 exceeding the
Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Purchase Right to such extent (or
beneficial ownership of such shares of Common Stock as a result of
such Purchase Right to such extent) and such Purchase Right to such
extent shall be held in abeyance for the Holder until such time, if
ever, as its right thereto would not result in the Holder exceeding
the Beneficial Ownership Limitation).

 

d) Pro
Rata Distributions. During such time as this Warrant is
outstanding, if 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 or options 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 on exercise hereof, including without limitation, the
Beneficial Ownership Limitation) 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 exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in
such Distribution to such extent (or in the beneficial ownership of
any shares of Common Stock as a result of such Distribution to such
extent) and the portion of such Distribution shall be held in
abeyance for the benefit of the Holder until such time, if ever, as
its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation). To
the extent that this Warrant has not been partially or completely
exercised at the time of such Distribution, such portion of the
Distribution shall be held in abeyance for the benefit of the
Holder until the Holder has exercised this
Warrant.

 

 

 

12

 

e)

Fundamental Transaction. If, at
any time while this Warrant is outstanding, (i) the Company,
directly or indirectly, in one or more related transactions effects
any merger or consolidation of the Company with or into another
Person, (ii) the Company or any Subsidiary, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance
or other disposition of all or substantially all of its assets in
one or a series of related transactions, (iii) any, direct or
indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been
accepted by the holders of fifty percent (50%) or more of the
outstanding Common Stock, (iv) the Company, directly or indirectly,
in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash
or property, or (v) the Company, directly or indirectly, in one or
more related transactions consummates a stock or share purchase
agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or
scheme of arrangement) with another Person or group of Persons
whereby such other Person or group acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of
Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making
or party to, such stock or share purchase agreement or other
business combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of
this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder (without regard to any
limitation in Section 2(e) on the exercise of this Warrant), the
number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder
of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall
apportion the Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such
Fundamental Transaction. Notwithstanding anything to the contrary,
in the event of a Fundamental Transaction, the Company or any
Successor Entity (as defined below) shall, at the Holder’s
option, exercisable at any time concurrently with, or within 30
days after, the consummation of the Fundamental Transaction (or, if
later, the date of the public announcement of the applicable
Fundamental Transaction), purchase
this Warrant from the Holder by paying to the Holder an
amount of cash equal to the Black Scholes Value (as defined below)
of the remaining unexercised portion of this Warrant on the date of
the consummation of such Fundamental Transaction; provided, however, that, if the
Fundamental Transaction is not within the Company's control,
including not approved by the Company's Board of Directors, Holder
shall only be entitled to receive from the Company or any Successor
Entity the same type or form of consideration (and in the same
proportion), at the Black Scholes Value of the unexercised portion
of this Warrant, that is being offered and paid to the holders of
Common Stock of the Company in connection with the Fundamental
Transaction, whether that consideration be in the form of cash,
stock or any combination thereof, or whether the holders of Common
Stock are given the choice to receive from among alternative forms
of consideration in connection with the Fundamental Transaction;
provided,
further, that if
holders of Common Stock of the Company are not offered or paid any
consideration in such Fundamental Transaction, such holders of
Common Stock will be deemed to have received common stock of the
Successor Entity (which Entity may be the Company following such
Fundamental Transaction) in such Fundamental Transaction.
“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 of
consummation of the applicable Fundamental Transaction for pricing
purposes and reflecting (A) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable Fundamental
Transaction and the Termination Date, (B) an expected volatility
equal to the greater of 100% and the 100 day volatility obtained
from the HVT function on Bloomberg (determined utilizing a 365 day
annualization factor) as of the Trading Day immediately following
the public announcement of the applicable Fundamental Transaction,
(C) the underlying price per share used in such calculation shall
be the greater of (i) the sum of the price per share being offered
in cash, if any, plus the value of any non-cash consideration, if
any, being offered in such Fundamental Transaction and (ii) the
highest VWAP during the period beginning on the Trading Day
immediately preceding the announcement of the applicable
Fundamental Transaction (or the consummation of the applicable
Fundamental Transaction, if earlier) and ending on the Trading Day
of the Holder’s request pursuant to this Section 3(e) and (D)
a remaining option time equal to the time between the date of the
public announcement of the applicable Fundamental Transaction and
the Termination Date and
(E) a zero cost of borrow. The payment
of the Black Scholes Value will be made by wire transfer of
immediately available funds (or such other consideration) within
the later of (i) five Business Days of the Holder’s election
and (ii) the date of consummation of the Fundamental
Transaction. The Company shall
cause any successor entity in a Fundamental Transaction in which
the Company is not the survivor (the “Successor Entity”) to
assume in writing all of the obligations of the Company under this
Warrant and the other Transaction Documents in accordance with the
provisions of this Section 3(e) pursuant to written agreements in
form and substance reasonably satisfactory to the Holder and
approved by the Holder (without unreasonable delay) prior to such
Fundamental Transaction and shall, at the option of the Holder,
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 which
is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to
the shares of Common Stock acquirable and receivable 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 (but 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
number of shares of capital stock and such exercise price being for
the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and
substance to the Holder. Upon the occurrence of any such
Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant and the
other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant and the other
Transaction Documents with the same effect as if such Successor
Entity had been named as the Company herein.

 

 

13

 

f)

Calculations. All calculations
under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of
this Section 3, the number of shares of Common Stock deemed to be
issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if
any) issued and outstanding.

 

g) Notice to Holder.

 

i. Adjustment to Exercise Price.
Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly deliver to the Holder
by facsimile or email a notice setting forth the Exercise Price
after such adjustment and any resulting adjustment to the number of
Warrant Shares and setting forth a brief statement of the facts
requiring such adjustment.

 

ii. Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any
other distribution in whatever form) on the Common Stock, (B) the
Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock, (C) the Company shall authorize the
granting to all holders of the Common Stock rights or warrants to
subscribe for or purchase any shares of capital stock of any class
or of any rights, (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the
Company (or any of its Subsidiaries) is a party, any sale or
transfer of all or substantially all of its assets, or any
compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property, or (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Company, then, in each case, the
Company shall cause to be delivered by facsimile or email to the
Holder at its last facsimile number or email address as it shall
appear upon the Warrant Register of the Company, at least 20
calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action
required to be specified in such notice. To the extent that any
notice provided in this Warrant constitutes, or contains, material,
non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K. The
Holder shall remain entitled to exercise this Warrant during the
period commencing on the date of such notice to the effective date
of the event triggering such notice except as may otherwise be
expressly set forth herein.

 

 

 

14

 

h) Voluntary Adjustment By
Company. Subject to the rules and regulations of the Trading
Market, the Company may at any time during the term of this
Warrant, subject to the prior written consent of the Holder, reduce
the then current Exercise Price to any amount and for any period of
time deemed appropriate by the board of directors of the
Company.

 

Section
4.                                Transfer
of Warrant.

 

a) Transferability. This Warrant and all rights hereunder
(including, without limitation, any registration rights) are
transferable, in whole or in part, upon surrender of this Warrant
at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in
the form attached hereto duly executed by the Holder or its agent
or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees, as
applicable, and in the denomination or denominations specified in
such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this
Warrant to the Company unless the Holder has assigned this Warrant
in full, in which case, the Holder shall surrender this Warrant to
the Company within three (3) Trading Days of the date on which the
Holder delivers an assignment form to the Company assigning this
Warrant in full. The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant
issued.

 

b) New Warrants. This Warrant may
be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written
notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which
may be involved in such division or combination, the Company shall
execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with
such notice. All Warrants issued on transfers or exchanges shall be
dated the initial issuance date of this Warrant and shall be
identical with this Warrant except as to the number of Warrant
Shares issuable pursuant thereto.

 

c) Warrant Register. The Company
shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”), in
the name of the record Holder hereof from time to time. The Company
may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent
actual notice to the contrary.

 

d) 

 

 

 

15

 

Section
5.                                Miscellaneous.

 

a) No Rights as Stockholder Until
Exercise; No Settlement in Cash. This Warrant does not
entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set
forth in Section 2(d)(i), except as expressly set forth in Section
3. Without limiting any rights of a Holder to receive Warrant
Shares on a “cashless exercise” pursuant to Section
2(c) or to receive cash payments pursuant to Section 2(d)(i) and
Section 2(d)(iv) herein, in no event shall the Company be required
to net cash settle an exercise of this Warrant.

 

b) Loss, Theft, Destruction or Mutilation
of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not
include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock
certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.

 

c) Saturdays, Sundays, Holidays,
etc. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein
shall not be a Business Day, then such action may be taken or such
right may be exercised on the next succeeding Business
Day.

 

d) Authorized Shares.

 

The
Company covenants that, during the period the Warrant is
outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of issuing the necessary
Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which
the Common Stock may be listed. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of
the purchase rights represented by this Warrant and payment for
such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

 

 

 

16

 

Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue 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, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to
such increase in par value, (ii) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations
under this Warrant.

 

Before
taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction
thereof.

 

e) Jurisdiction. All questions
concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.

 

f) Restrictions. The Holder
acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant, if not registered, and the Holder does not utilize
cashless exercise, will have restrictions upon resale imposed by
state and federal securities laws.

 

g) Nonwaiver and Expenses. No
course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such
right or otherwise prejudice the Holder’s rights, powers or
remedies. Without limiting any other provision of this Warrant or
the Purchase Agreement, if the Company willfully and knowingly
fails to comply with any provision of this Warrant, which results
in any material damages to the Holder, the Company shall pay to the
Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’
fees, including those of appellate proceedings, incurred by the
Holder in collecting any amounts due pursuant hereto or in
otherwise enforcing any of its rights, powers or remedies
hereunder.

 

 

17

 

h) Notices. Any notice, request or
other document required or permitted to be given or delivered to
the Holder by the Company shall be delivered in accordance with the
notice provisions of the Purchase Agreement.

 

i) Limitation of Liability. No
provision hereof, in the absence of any affirmative action by the
Holder to exercise this Warrant to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of the Holder, shall
give rise to any liability of the Holder for the purchase price of
any Common Stock or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the
Company.

 

j) Remedies. The Holder, in
addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this
Warrant and hereby agrees to waive and not to assert the defense in
any action for specific performance that a remedy at law would be
adequate.

 

k) Successors and Assigns. Subject
to applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors and permitted assigns of the Company
and the successors and permitted assigns of Holder. The provisions
of this Warrant are intended to be for the benefit of any Holder
from time to time of this Warrant and shall be enforceable by the
Holder or holder of Warrant Shares.

 

l) Amendment. This Warrant may be
modified or amended or the provisions hereof waived with the
written consent of the Company and the
Holder.

 

m) Severability. Wherever
possible, each provision of this Warrant shall be interpreted in
such manner as to be effective and valid under applicable law, but
if any provision of this Warrant shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this
Warrant.

 

n) Headings. The headings used in
this Warrant are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this
Warrant.

 

 

********************

 

(Signature Page Follows)

 

 

18

 

 

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized as of the date first above
indicated.

 

 

 

	

AMERICAN RESOURCES CORPORATION

 

 

	

By:__________________________________________

     Name:

     Title:

 

 

 

 

19

 

 

NOTICE OF EXERCISE

 

TO:            

AMERICAN
RESOURCES CORPORATION

 

(1) The undersigned
hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

 

(2) Payment shall take
the form of (check applicable box):

 

[ ] in
lawful money of the United States; or

 

[ ] [if
permitted the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number
of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c).

 

(3) Please issue said
Warrant Shares in the name of the undersigned or in such other name
as is specified below:

 

_______________________________

 

 

The
Warrant Shares shall be delivered to the following DWAC Account
Number:

 

_______________________________

 

_______________________________

 

_______________________________

 

 

[SIGNATURE
OF HOLDER]

 

Name of
Investing Entity:
________________________________________________________________________

Signature of Authorized Signatory of Investing
Entity:
_________________________________________________

Name of
Authorized Signatory:
___________________________________________________________________

Title
of Authorized Signatory:
____________________________________________________________________

Date:
________________________________________________________________________________________

 

 

 

 

 

20

 

 

 

  EXHIBIT B

 

ASSIGNMENT FORM

 (To assign the foregoing Warrant, execute this form and
supply required information. Do not use this form to purchase
shares.)

 

FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

 

	

Name:

	
 

	
 

	

(Please Print)

 

	

Address:

	
 

	

 

 

Phone Number:

Email Address:

 

	

(Please
Print)

______________________________________

______________________________________

 

	

Dated: _______________ __, ______

 

	
 

	

Holder’s
Signature:                                                                 

 

	
 

	

Holder’s
Address:                                                                 

 

	
 

 

 

 

21

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