Document:

Exhibit 10.4

 

	World
    Omni Financial Corp.,
	as
    Servicer
	 
	WORLD
    OMNI LT,
	as
    Titling Trust 
	 
	and
    
	 
	AL
    Holding Corp., 

    as Closed-End Collateral Agent 
	 
	Exchange
    Note Servicing Supplement 2022-A TO 

    CLOSED-END SERVICING AGREEMENT 
	 
	Dated
    as of April 13, 2022

 

     

     

    

 

Table
of Contents

 

Page

 

	Article XI
    DEFINITIONS	2
	 	 	 
	Section 11.1	DEFINITIONS	2
	 	 	 
	Article XII
    REPRESENTATIONS AND WARRANTIES OF THE SERVICER	2
	 	 	 
	Section 12.1	EXISTENCE AND POWER	2
	Section 12.2	AUTHORIZATION AND NO CONTRAVENTION	3
	Section 12.3	NO CONSENT REQUIRED	3
	Section 12.4	BINDING EFFECT	3
	Section 12.5	ACCURACY OF INFORMATION	3
	Section 12.6	NO PROCEEDINGS	3
	 	 	 
	Article XIII
    SPECIFIC REQUIREMENTS FOR ADMINISTRATION
    AND SERVICING OF THE REFERENCE POOL	3
	 	 	 
	Section 13.1	APPOINTMENT OF THE SERVICER	3
	Section 13.2	SERVICER BOUND BY CLOSED-END
    SERVICING AGREEMENT	4
	Section 13.3	APPLICATION OF PROCEEDS	5
	Section 13.4	SERVICER CERTIFICATE	5
	Section 13.5	SERVICER FEE	6
	Section 13.6	INSURANCE LAPSES; REPAIRS	6
	Section 13.7	LICENSING OF TITLING TRUST	6
	Section 13.8	COMMUNICATION BETWEEN NOTEHOLDERS	6
	Section 13.9	PAYMENT OF FEES AND EXPENSES	6
	Section 13.10	ANNUAL INDEPENDENT PUBLIC
    ACCOUNTANTS’ SERVICING REPORT	7
	Section 13.11	ANNUAL OFFICER’S
    CERTIFICATE	7
	Section 13.12	POST-MATURITY TERM EXTENSION	8
	Section 13.13	INSURANCE POLICIES; ADDITIONAL
    INSUREDS	8
	Section 13.14	SECURITY DEPOSITS	8
	 	 	 
	Article XIV
    TERMINATION OF THE SERVICER	8
	 	 	 
	Section 14.1	TERMINATION OF THE SERVICER
    AS TO THE SERIES 2022-A REFERENCE POOL	8
	Section 14.2	NO EFFECT ON OTHER PARTIES	10
	 	 	 
	Article XV
    OPTIONAL PURCHASE OF THE CLOSED-END EXCHANGE
    NOTE	10
	 	 	 
	Section 15.1	OPTIONAL PURCHASE OF THE
    CLOSED-END EXCHANGE NOTE	10

 

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	Article XVI
    MISCELLANEOUS	11
	 	 	 
	Section 16.1	AMENDMENT	11
	Section 16.2	GOVERNING LAW	12
	Section 16.3	NOTICES	12
	Section 16.4	THIRD-PARTY BENEFICIARIES	12
	Section 16.5	SEVERABILITY	13
	Section 16.6	BINDING EFFECT	13
	Section 16.7	ARTICLE AND SECTION HEADINGS	13
	Section 16.8	EXECUTION IN COUNTERPARTS;
    ELECTRONIC SIGNATURES	13
	Section 16.9	FURTHER ASSURANCES	13
	Section 16.10	EACH EXCHANGE NOTE SEPARATE;
    ASSIGNEES OF EXCHANGE NOTE	14
	Section 16.11	NO PETITION	14
	Section 16.12	SUBMISSION TO JURISDICTION;
    WAIVER OF JURY TRIAL	15
	Section 16.13	LIMITATION OF LIABILITY
    OF VT INC	15
	Section 16.14	INFORMATION REQUESTS	15
	Section 16.15	REGULATION AB	15
	Section 16.16	CREDIT RISK RETENTION	15
	Section 16.17	EU AND UK RISK RETENTION	16

 

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Exchange
Note Servicing Supplement 2022-A TO

CLOSED-END SERVICING AGREEMENT

 

THIS
Exchange Note Servicing Supplement 2022-A TO CLOSED-END SERVICING AGREEMENT (as amended,
modified or supplemented from time to time, the “Exchange Note Servicing Supplement”), dated as of April 13,
2022, is among (i) WORLD OMNI FINANCIAL CORP., a Florida corporation (“World Omni”), as servicer (in such
capacity, the “Servicer”), (ii) WORLD OMNI LT, a Delaware statutory trust (the “Titling Trust”)
and (iii) AL HOLDING CORP., a Delaware corporation, as collateral agent (“ALHC” or the “Closed-End Collateral
Agent”).

 

RECITALS

 

The
Titling Trust, the Closed-End Collateral Agent and the Servicer have entered into that certain Fifth Amended and Restated Closed-End
Servicing Agreement, dated as of December 15, 2009, as amended, to provide that such agreement will constitute the “Closed-End
Servicing Agreement” (as defined in the Titling Trust Agreement) with respect to the Closed-End Collateral Specified Interest,
which provides, among other things, for the servicing of the Titling Trust Assets by the Servicer.

 

The
Titling Trust, as Borrower, the Closed-End Collateral Agent, Bank of America, N.A., as Deal Agent, U.S. Bank National Association,
as Closed-End Administrative Agent, and the other Secured Parties named therein entered into a Fourth Amended and Restated Collateral
Agency Agreement, dated as of December 15, 2009 (as amended, modified or supplemented from time to time, the “Collateral
Agency Agreement”).

 

The
Collateral Agency Agreement contemplates that from time to time the Titling Trustee, on behalf of the Titling Trust and at the
direction of the Initial Beneficiary, will identify and allocate on the Titling Trust’s books and records certain Titling Trust
Assets within separate Reference Pools and create and issue to the Initial Beneficiary a Closed-End Exchange Note.

 

Concurrently herewith, World
Omni Auto Leasing LLC (the “Depositor”) will purchase the Exchange Note, which represents the 2022-A Reference Pool,
from the Initial Beneficiary and World Omni Automobile Lease Securitization Trust 2022-A, a Delaware statutory trust (the “Issuing
Entity”), will purchase the Exchange Note, which represents the 2022-A Reference Pool, from the Depositor. The Issuing Entity
is expected to fund such purchase from proceeds of the issuance of the Notes and Certificates.

 

Concurrently
herewith, the Issuing Entity is entering into an asset-backed financing transaction pursuant to, among other agreements, an Indenture,
dated as of the date hereof, (the “Indenture”) with Wilmington Trust, National Association, as indenture trustee
(the “Indenture Trustee”), pursuant to which the Issuing Entity will issue asset-backed notes and will grant a security
interest to the Indenture Trustee in certain of its assets.

 

Concurrently
herewith, the Titling Trust, the Closed-End Collateral Agent, the Closed-End Administrative Agent, and the other Secured Parties
named therein are entering into that certain Exchange Note Supplement 2022-A to the Collateral Agency Agreement (as amended, modified
or supplemented from time to time, the “Exchange Note Supplement”) to supplement the terms of the Collateral Agency
Agreement (i) to cause the Titling Trustee to identify and allocate Titling Trust Assets to a particular Reference Pool (the “Reference
Pool”), which shall consist of Titling Trust Assets which shall constitute Exchange Note Assets, (ii) to create and issue
to Auto Lease Finance LLC a Closed-End Exchange Note and (iii) to set forth the terms and conditions thereof.

 

     

     

    

 

The Titling Trust desires
to retain the Servicer to provide certain services with respect to the 2022-A Reference Pool allocated to the Closed-End Exchange Note
owned by the Issuing Entity, and the parties hereto desire, pursuant to this Exchange Note Servicing Supplement, to supplement the terms
of the Closed-End Servicing Agreement insofar as they apply to the 2022-A Reference Pool, providing for specific servicing obligations
that will benefit the Issuing Entity, as holder of the Closed-End Exchange Note, and the Indenture Trustee, as the pledgee of the Closed-End
Exchange Note on behalf of the Noteholders.

 

NOW THEREFORE, in consideration
of the premises and the mutual covenants herein contained and in the Closed-End Servicing Agreement, the parties hereto agree to the
following supplemental obligations with regard to the Closed-End Exchange Note:

 

Article XI

DEFINITIONS

 

Section 11.1     DEFINITIONS.
For all purposes of this Exchange Note Servicing Supplement, except as otherwise expressly provided or unless the context otherwise requires,
(a) unless otherwise defined herein, all capitalized terms used herein shall have the meanings attributed to them (i) by Appendix
A to the Indenture, (ii) if not defined therein, by Appendix A to the Collateral Agency Agreement or (iii) if not
defined therein, by the Titling Trust Agreement, (b) the capitalized terms defined in this Exchange Note Servicing Supplement have
the meanings assigned to them in this Exchange Note Servicing Supplement and include (i) all genders and (ii) the plural as
well as the singular, (c) all references to words such as “herein”, “hereof” and the like shall refer to
this Exchange Note Servicing Supplement as a whole and not to any particular article or section within this Exchange Note Servicing Supplement,
(d) the term “include” and all variations thereon shall mean “include without limitation”, and (e) the
term “or” shall include “and/or”.

 

Article XII

REPRESENTATIONS AND WARRANTIES OF THE SERVICER

 

The Servicer represents and
warrants to the Depositor, the Issuing Entity and the Indenture Trustee on behalf of the Noteholders as follows:

 

Section 12.1     EXISTENCE
AND POWER. The Servicer is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida
and has all power and authority required to carry on its business as it is now conducted. The Servicer has obtained all necessary licenses
and approvals in all jurisdictions where the failure to do so would materially and adversely affect the business, properties, financial
condition or results of operations of the Servicer, taken as a whole.

 

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Section 12.2     AUTHORIZATION
AND NO CONTRAVENTION. The execution, delivery and performance by the Servicer of each Transaction Document to which it is a party
(i) have been duly authorized by all necessary corporate action and (ii) do not violate or constitute a default under (A) any
applicable law, rule or regulation, (B) its organizational instruments or (C) any agreement, contract, order or other
instrument to which it is a party or its property is subject and (iii) will not result in any Adverse Claim on any Transaction Unit
or Closed-End EN Collected Amounts with respect to the 2022-A Reference Pool or give cause for the acceleration of any indebtedness of
the Servicer.

 

Section 12.3     NO
CONSENT REQUIRED. No approval, authorization or other action by, or filing with, any Governmental Authority is required in connection
with the execution, delivery and performance by the Servicer of any Transaction Document, other than UCC filings and other than approvals
and authorizations that have previously been obtained and filings which have previously been made.

 

Section 12.4     BINDING
EFFECT. Each Transaction Document to which the Servicer is a party constitutes the legal, valid and binding obligation of the Servicer
enforceable against the Servicer in accordance with its terms, except as limited by bankruptcy, insolvency, or other similar laws of
general application relating to or affecting the enforcement of creditors’ rights generally and subject to general principles of
equity.

 

Section 12.5     ACCURACY
OF INFORMATION. All information heretofore furnished by or on behalf of the Servicer in writing to the Closed-End Administrative
Agent for purposes of or in connection with this Agreement or any transaction contemplated hereby is true and accurate in all material
respects on and as of the date such information was furnished (except to the extent that such furnished information relates solely to
an earlier date, in which case such information is true and accurate in all material respects on and as of such earlier date).

 

Section 12.6     NO
PROCEEDINGS. There is no action, suit, proceeding or investigation pending or, to the knowledge of the Servicer, threatened against
the Servicer which, either in any one instance or in the aggregate, would result in any material adverse change in the business, operations,
financial condition, properties or assets of the Servicer, or in any material impairment of the right or ability of the Servicer to carry
on its business substantially as now conducted, or in any material liability on the part of the Servicer, or which would render invalid
this Agreement or the Transaction Units or the obligations of the Servicer contemplated herein, or which would materially impair the
ability of the Servicer to perform under the terms of this Agreement or any other Transaction Document.

 

Article XIII

SPECIFIC REQUIREMENTS FOR

ADMINISTRATION AND SERVICING OF THE

REFERENCE POOL

 

Section 13.1     APPOINTMENT
OF THE SERVICER.

 

(a)            The
Servicer shall manage, service and administer the Exchange Note Assets for the benefit of each holder and pledgee of the Closed-End Exchange
Note and shall make collections on the Transaction Units in accordance with its Credit and Collection Policy in effect from time to time,
using the same degree of skill and attention that the Servicer exercises with respect to all comparable retail automotive leases that
it services for itself or others.

 

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(b)            The
Servicer may delegate its duties and obligations as Servicer in accordance with Section 3.5 of the Closed-End Servicing Agreement.

 

(c)            If
the Servicer shall commence a legal proceeding to enforce a Transaction Unit, the Titling Trust shall thereupon be deemed to have automatically
assigned, solely for the purpose of collection, such Transaction Unit to the Servicer. If in any enforcement suit or legal proceeding
it shall be held that the Servicer may not enforce a Transaction Unit on the ground that it is not a real party in interest or a holder
entitled to enforce such Transaction Unit, the Closed-End Collateral Agent shall, at the Servicer’s expense and direction, take
steps to enforce such Transaction Unit, including bringing suit in its name.

 

(d)            The
Servicer shall account for the Transaction Units allocated to the 2022-A Reference Pool separately from any Other Reference Pool, any
Unencumbered Reference Pool and the Warehouse Facility Pool.

 

Section 13.2     SERVICER
BOUND BY CLOSED-END SERVICING AGREEMENT.

 

(a)            The
Servicer shall continue to be bound by all provisions of the Closed-End Servicing Agreement with respect to the Transaction Units allocated
to the 2022-A Reference Pool, including the provisions of Article VI thereof relating to the administration and servicing
of Closed-End Leases; and the provisions set forth herein shall operate either as additions to or modifications of the existing obligations
of the Servicer under the Closed-End Servicing Agreement, as the context may require. In the event of any conflict between the provisions
of this Exchange Note Servicing Supplement and the Closed-End Servicing Agreement with respect to the Closed-End Exchange Note, the provisions
of this Exchange Note Servicing Supplement shall prevail; provided, however, that Section 5.1(d) of the
Servicing Agreement shall at all times govern the Required Deposit Amount.

 

(b)            For
purposes of determining the Servicer’s obligations with respect to the servicing of the 2022-A Reference Pool under this Exchange
Note Servicing Supplement, general references in the Closed-End Servicing Agreement to: (i) a Reference Pool shall be deemed to
refer more specifically to the 2022-A Reference Pool; (ii) an Exchange Note Servicing Supplement shall be deemed to refer more specifically
to this Exchange Note Servicing Supplement; and (iii) an Exchange Note Supplement shall be deemed to refer more specifically to
the Exchange Note Supplement related to the 2022-A Reference Pool.

 

(c)            Notwithstanding
any other provision of this Exchange Note Servicing Supplement or the Servicing Agreement, including Section 6.7 thereof,
the Servicer shall not in connection with any early lease termination program terminate or permit any Closed-End Obligor to terminate
any Closed-End Lease and remove the related Closed-End Vehicle from the 2022-A Reference Pool in connection with such termination unless
there shall have been deposited into the Exchange Note Collection Account an amount equal to the Securitization Value of such Closed-End
Vehicle as of the termination date of such Closed-End Lease, provided, however, that the Servicer may at any time prior
to the Maturity Date of a Closed-End Lease, agree to terminate such Closed-End Lease, provided the related Closed-End Obligor has made
all remaining scheduled payments with respect to such Closed-End Lease and surrendered the related Closed-End Vehicle.

 

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Section 13.3     APPLICATION
OF PROCEEDS.

 

(a)            Prior
to the satisfaction and discharge of the Indenture with respect to the Collateral and subject to the provision of Section 5.1(d) of
the Closed-End Servicing Agreement, the Servicer shall deposit an amount equal to all Closed-End Exchange Note Collections received in
respect of the 2022-A Reference Pool during any Closed-End EN Collection Period into the Exchange Note Collection Account on or prior
to 2:00 p.m., New York City time, on the Business Day immediately preceding the related Closed-End Exchange Note Payment Date; provided,
however, that if the Monthly Remittance Condition is not satisfied, the Servicer will be required to deposit an amount equal to
all Closed-End Exchange Note Collections into the Exchange Note Collection Account within two Business Days after receipt (including
receipt of proper instructions regarding where to allocate such payment), (it being understood that, with respect to Relinquished Vehicle
Proceeds, the Servicer shall remit the Relinquished Vehicle Proceeds in accordance with Section 5.1(d) of the Closed-End
Servicing Agreement). The “Monthly Remittance Condition” shall be deemed to be satisfied if (i) World Omni is
the Servicer, (ii) no Exchange Note Servicer Default has occurred and is continuing, and (iii) after providing prior notice,
World Omni receives notice from the Rating Agencies that the cessation of daily deposits will not result in a reduction or withdrawal
of the then current rating of the Notes. Pending deposit into the Exchange Note Collection Account, Closed-End Exchange Note Collections
may be used by the Servicer at its own risk and for its own benefit and will not be segregated from its own funds.

 

(b)            After
the satisfaction and discharge of the Indenture with respect to the Collateral, the Servicer shall deposit an amount equal to Closed-End
Exchange Note Collections in accordance with the instructions provided from time to time by the holder of the Exchange Note.

 

(c)            Notwithstanding
anything to the contrary contained in this Agreement, for so long as the Monthly Remittance Condition has been satisfied, the Servicer
shall be permitted to deposit into the Exchange Note Collection Account only the net amount distributable to the Issuing Entity, as holder
of the Exchange Note, and to retain any reimbursement for outstanding Servicing Fees, on the Closed-End Exchange Note Payment Date. The
Servicer shall, however, account for all Closed-End Exchange Note Collections as if all of the deposits and distributions described herein
were made individually.

 

Section 13.4     SERVICER
CERTIFICATE. On or before the close of business on each Determination Date prior to the satisfaction and discharge of the Indenture
with respect to the Collateral, the Servicer shall make available to the Indenture Trustee, the Issuing Entity, the Administrator, the
Closed-End Administrative Agent, the Closed-End Collateral Agent, the Owner Trustee and the Paying Agent at https://via.intralinks.com/,
or such other website or distribution service or provider as the Servicer shall designate by written notice to the Indenture Trustee,
the Issuing Entity, the Administrator, the Closed-End Administrative Agent, the Closed-End Collateral Agent, the Owner Trustee and the
Paying Agent, a Servicer Certificate reflecting information as of the close of business of the Servicer for the immediately preceding
Closed-End EN Collection Period containing the information described in Section 8.3 of the Indenture.

 

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Section 13.5     SERVICER
FEE. Notwithstanding anything to the contrary in Section 3.9(b) of the Closed-End Servicing Agreement, on each Closed-End
Exchange Note Payment Date, the Titling Trust will cause the Closed-End Administrative Agent to pay to the Servicer in accordance with
Section 13.2 of the Exchange Note Supplement, the Servicing Fee for the immediately preceding Closed-End EN Collection Period
as compensation for its services. In addition, the Servicer may retain any Supplemental Servicing Fees. The Servicer may, as long as
it believes that sufficient collections will be available on one or more future Closed-End Exchange Note Payment Dates to pay the Servicing
Fee, by notice to the Closed-End Administrative Agent on or before a Closed-End Exchange Note Payment Date, elect to defer all or a portion
of the Servicing Fee with respect to the related Closed-End EN Collection Period, without interest. If the Servicer defers all of the
Servicing Fee, the Servicing Fee for such related Closed-End EN Collection Period will be deemed to equal zero.

 

Section 13.6     INSURANCE
LAPSES; REPAIRS. The Servicer shall have no liability in the event that any Closed-End Obligor fails to maintain, in full force and
effect, a physical damage insurance policy covering any Transaction Unit or naming the Titling Trust as loss payee. Without limiting
the foregoing, in no event shall the Servicer be obligated to perform or be liable for any repairs or maintenance with respect to any
Transaction Unit.

 

Section 13.7     LICENSING
OF TITLING TRUST. The Servicer shall cause the Titling Trust to apply for and maintain at all times all licenses and permits necessary
to carry on the Titling Trust’s leasing business in each jurisdiction in which the Titling Trust operates, except where the failure
to have any license or permit would not materially and adversely affect the business, properties, financial condition or results of operation
of the Titling Trust, taken as a whole.

 

Section 13.8     COMMUNICATION
BETWEEN NOTEHOLDERS. The Servicer will comply with its obligations under Section 7.2(e) of the Indenture to include in
the Form 10-D filed by the Issuing Entity with the Commission for the Collection Period the information described in such Section.

 

Section 13.9     PAYMENT
OF FEES AND EXPENSES. The Servicer shall pay all expenses incurred in connection with the administration and servicing of the 2022-A
Reference Pool and the Transaction Units, including, without limitation, expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of the Titling Trustee, independent accountants, taxes imposed on the Servicer and any Titling Trustee
indemnity claims.

 

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Section 13.10     ANNUAL
INDEPENDENT PUBLIC ACCOUNTANTS’ SERVICING REPORT.

 

(a)            On
or before the 90th day following the end of each fiscal year, beginning with the fiscal year ending December 31, 2022, the Servicer
shall cause a firm of independent public accountants (who may also render other services to the Servicer, the Depositor or their respective
Affiliates) to furnish to the Indenture Trustee, the Servicer (who promptly shall provide the assessment described in this Section 13.10(a) to
each Rating Agency) and the Depositor each attestation report on assessments of compliance with the Servicing Criteria with respect to
the Servicer or any affiliate thereof during the related fiscal year delivered by such accountants pursuant to paragraph (c) of
Rule 13a-18 or Rule 15d-18 of the Exchange Act and Item 1122 of Regulation AB. The certification required by this paragraph
may be replaced by any similar certification using other procedures or attestation standards which are now or in the future in use by
servicers of comparable assets or which otherwise comply with any rule, regulation, “no action” letter or similar guidance
promulgated by the Commission. The obligation to furnish each such report shall be deemed satisfied upon the Servicer making each such
report available at https://via.intralinks.com/, or such other website or distribution service or provider as the Servicer shall designate
by written notice to the Indenture Trustee and the Depositor.

 

(b)            Deliveries
pursuant to this Section 13.10 may be delivered by electronic mail.

 

Section 13.11     ANNUAL
OFFICER’S CERTIFICATE.

 

(a)            The
Servicer will make available to the Rating Agencies, the Issuing Entity and the Indenture Trustee on or before the 90th day following
the end of each fiscal year, beginning with the fiscal year ending December 31, 2022, at https://via.intralinks.com/, or such other
website or distribution service or provider as the Servicer shall designate by written notice to the Rating Agencies, the Issuing Entity
and the Indenture Trustee, an Officers’ Certificate providing such information as is required under Item 1123 of Regulation AB.

 

(b)            The
Servicer will make available to the Issuing Entity and the Indenture Trustee, on or before the 90th day following the end of each fiscal
year, beginning with the fiscal year ending December 31, 2022, at https://via.intralinks.com/, or such other website or distribution
service or provider as the Servicer shall designate by written notice to the Issuing Entity and the Indenture Trustee, a report regarding
the Servicer’s assessment of compliance with the Servicing Criteria during the immediately preceding calendar year including disclosure
of any material instance of non-compliance identified by the Servicer, as required under paragraph (b) of Rule 13a-18,
Rule 15d-18 of the Exchange Act and Item 1122 of Regulation AB.

 

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Section 13.12     POST-MATURITY
TERM EXTENSION. Consistent with its Credit and Collection Policy, the Servicer may, in its discretion, grant a Post-maturity Term
Extension with respect to any Closed-End Lease in the 2022-A Reference Pool. If the Servicer grants a Post-maturity Term Extension with
respect to a Closed-End Lease in the 2022-A Reference Pool beyond the month immediately preceding the month in which the Final Scheduled
Payment Date of the most subordinate class of Notes occurs, then the Servicer shall direct the Titling Trustee to reallocate the Transaction
Unit related to such Closed-End Lease from the 2022-A Reference Pool to the Warehouse Facility Pool or any Unencumbered Reference Pool
on the Closed-End Exchange Note Payment Date following the beginning of the Closed-End EN Collection Period during which such Post-maturity
Term Extension was granted. In consideration for such reallocation, the Servicer shall make a payment to the Issuing Entity equal to
the Securitization Value of such Transaction Unit as of the end of the Closed-End EN Collection Period preceding such Closed-End Exchange
Note Payment Date by depositing such amount into the Exchange Note Collection Account prior to 2:00 p.m., New York City time, on the
Business Day immediately preceding such Closed-End Exchange Note Payment Date. None of the Servicer, the Titling Trustee, the Closed-End
Collateral Agent, the Closed-End Administrative Agent, the Issuing Entity, the Owner Trustee, the Indenture Trustee, the Asset Representations
Reviewer, the Seller, the Depositor or the Administrator will have an obligation to investigate whether a breach or other event has occurred
that would require the reallocation of any Transaction Unit under this Section 13.12 or whether any Transaction Unit is required
to be reallocated under this Section 13.12.

  

Section 13.13     INSURANCE
POLICIES; ADDITIONAL INSUREDS. The Servicer shall at all times comply with Section 3.7(a) of the Closed-End Servicing
Agreement.

 

Section 13.14     SECURITY
DEPOSITS. In accordance with Section 5.1(d) of the Closed-End Servicing Agreement, on the Closed-End Exchange Note
Payment Date related to the Closed-End EN Collection Period in which a Security Deposit becomes a Closed-End Exchange Note Collection
with respect to the 2022-A Reference Pool, the Servicer shall deposit such amounts (including, as applicable, any Required Deposit Amount)
in the Exchange Note Collection Account.

 

Article XIV

TERMINATION OF THE SERVICER

 

Section 14.1     TERMINATION
OF THE SERVICER AS TO THE SERIES 2022-A REFERENCE POOL.

 

(a)            Notwithstanding
Section 8.3(a) of the the Closed-End Servicing Agreement, as used herein “Exchange Note Servicer Default”
means the occurrence and continuance of the following events:

 

(i)            Any
failure by the Servicer to deliver to the Closed-End Administrative Agent any proceeds or payment required to be delivered with respect
to the Exchange Note, which failure continues unremedied for more than five Business Days after the earlier of notice from the Closed-End
Administrative Agent is received by the Servicer or an Authorized Officer of the Servicer obtains actual knowledge of such failure; provided,
that if such delay in or failure of performance referred to in this clause is caused by Force Majeure, such five Business Day grace period
shall be extended for an additional 60 days; or

 

(ii)            Any
failure by the Servicer to duly observe or to perform in any material respect any other covenant or agreement of the Servicer in this
Exchange Note Servicing Supplement or the Closed-End Servicing Agreement with respect to the Exchange Note which materially and adversely
affects the rights of the Closed-End Administrative Agent or the Exchange Noteholder and which continues unremedied for more than 90
days after notice of such failure is received by the Servicer from the Closed-End Administrative Agent or the Exchange Noteholder; provided,
that if such delay in or failure of performance referred to in this clause is caused by Force Majeure, such 90 day grace period shall
be extended for an additional 60 days.

 

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(b)            Upon
the occurrence and continuation of any Exchange Note Servicer Default, the Servicer shall provide to the Indenture Trustee, the Issuing
Entity, the Administrator, the Closed-End Collateral Agent and each Rating Agency prompt notice specifying such Exchange Note Servicer
Default, together with a description of its efforts to perform its obligations. The Servicer shall use all commercially reasonable efforts
to perform its obligations under this Exchange Note Servicing Supplement and the Closed-End Servicing Agreement. The Servicer may not
resign except in accordance with Section 8.4 of the Closed-End Servicing Agreement.

 

(c)            If
an Exchange Note Servicer Default shall have occurred and be continuing, the Titling Trustee on behalf of the holder of the Exchange
Note, shall, at the direction of the Required Related Holders, by notice given to the Servicer (who promptly shall provide such notice
to each Rating Agency), the Issuing Entity, the Indenture Trustee, the Closed-End Collateral Agent, the Titling Trust Administrator and
the Administrator, terminate the rights and obligations of the Servicer under this Exchange Note Servicing Supplement and the Closed-End
Servicing Agreement with respect to the Exchange Note and the Included Units. In the event the Servicer is removed or resigns as Servicer
with respect to servicing the Exchange Note Assets, the Required Related Holders shall appoint a successor Servicer. With respect to
any Exchange Note Servicer Default, the Closed-End Administrative Agent, acting on the direction of the Required Related Holders may
waive any default of the Servicer. For purposes of this Section, so long as the Lien of the Indenture is in place, the “Required
Related Holders” shall be deemed to be the Indenture Trustee, acting at the direction of the Holders of not less than 66 2/3%
of the Outstanding Notes and thereafter, the Issuing Entity, acting at the direction of the Majority Certificateholders.

 

(d)            If
replaced, the Servicer agrees that it will use commercially reasonable efforts to effect the orderly and efficient transfer of the servicing
of the Transaction Units to a successor Servicer.

 

(e)            Upon
the effectiveness of the assumption by the successor Servicer of its duties pursuant to this Section 14.1, the successor
Servicer shall be the successor in all respects to the Servicer in its capacity as Servicer under the Closed-End Servicing Agreement
with respect to the 2022-A Reference Pool, and shall be subject to all the responsibilities, duties and liabilities relating thereto,
except with respect to the obligations of the predecessor Servicer that survive its termination as Servicer as set forth in this Section 14.1(f).
No Servicer shall resign or be relieved of its duties under the Closed-End Servicing Agreement, as Servicer of the 2022-A Reference Pool,
until a newly appointed Servicer for the 2022-A Reference Pool shall have assumed the responsibilities and obligations of the resigning
or terminated Servicer under this Exchange Note Servicing Supplement. In the event of a replacement of World Omni as Servicer, the Required
Related Holders shall cause the successor Servicer to agree to indemnify World Omni against any losses, liabilities, damages or expenses
(including attorneys’ fees) as a result of the negligence or willful misconduct of such successor Servicer.

 

(f)            No
termination or resignation of the Servicer as to the 2022-A Reference Pool shall affect the obligations of the Servicer pursuant to Section 3.3(c) of
the Closed-End Servicing Agreement; provided that following the replacement of the Servicer pursuant to this Section 14.1,
such Servicer shall have no duties, responsibilities or other obligations hereunder with respect to matters arising after such replacement.

 

    9 

     

    

 

Section 14.2     NO
EFFECT ON OTHER PARTIES. Upon any termination of the rights and powers of the Servicer with respect to the 2022-A Reference Pool
pursuant to Section 14.1 hereof, or upon any appointment of a successor Servicer with respect to the 2022-A Reference Pool,
all the rights, powers, duties and obligations of the Titling Trustees, the Initial Beneficiary and World Omni under the Titling Trust
Agreement, the Closed-End Servicing Agreement, the Exchange Note Supplement, any other supplement, any other Exchange Note Servicing
Supplement, any other Basic Document or Transaction Document shall remain unaffected by such termination or appointment and shall remain
in full force and effect thereafter, except as otherwise expressly provided herein or therein.

 

Article XV

OPTIONAL PURCHASE OF THE CLOSED-END EXCHANGE NOTE

 

Section 15.1     OPTIONAL
PURCHASE OF THE CLOSED-END EXCHANGE NOTE.

 

(a)            If
the Outstanding Amount of the Notes is equal to or less than 5% of the Initial Note Balance on the last day of any Closed-End EN Collection
Period, the Servicer shall have the option to purchase the Closed-End Exchange Note on the immediately following Closed-End Exchange
Note Payment Date (and on each Closed-End Exchange Note Payment Date thereafter) and direct the Issuing Entity to redeem the Notes pursuant
to Section 10.1 of the Indenture (an “Optional Redemption”). To exercise such option, the Servicer shall
deposit pursuant to Section 13.3 hereof into the Trust Collection Account an amount, as calculated by the Servicer, equal
to the Exchange Note Balance and all accrued interest thereon up to but not including the Redemption Date (the “Exchange Note
Purchase Price”), and shall succeed to all interests in and to the Issuing Entity. Notwithstanding the foregoing, the Servicer
shall not be permitted to exercise such option unless the amount to be deposited into the Trust Collection Account pursuant to the preceding
sentence is greater than or equal to the sum of the Outstanding Amount of the Notes, and all accrued but unpaid interest (including any
overdue interest and premium) thereon and all amounts owing to the Asset Representations Reviewer under the Asset Representations Review
Agreement.

 

(b)            As
described in Section 9.01(c) of the Trust Agreement, notice of any termination of the Issuing Entity shall be given
by the Servicer to the Owner Trustee, the Closed-End Collateral Agent and the Indenture Trustee as soon as practicable after the Servicer
has received notice thereof.

 

    10 

     

    

 

Article XVI

MISCELLANEOUS

 

Section 16.1     AMENDMENT.

 

(a)            Notwithstanding
any provision of the Closed-End Servicing Agreement, the Closed-End Servicing Agreement, as supplemented by this Exchange Note Servicing
Supplement, to the extent that it deals solely with the 2022-A Reference Pool, may be amended in accordance with this Section 16.1.

 

(b)            Any
term or provision of the Closed-End Servicing Agreement or this Exchange Note Servicing Supplement may be amended by the Servicer, without
the consent of any other Person; provided that (i) any amendment that materially and adversely affects the interests of the
Exchange Noteholder shall require the consent of the Exchange Noteholder, (ii) any amendment that materially and adversely affects
the interests of the Closed-End Collateral Agent shall require the consent of the Closed-End Collateral Agent, and (iii) any amendment
that materially and adversely affects the interests of the Titling Trustee shall require the prior written consent of the Titling Trustee.
An amendment shall be deemed not to materially and adversely affect the interests of the Exchange Noteholder if the Rating Agency Condition
is satisfied with respect to such amendment.

 

(c)            Notwithstanding
the foregoing, no amendment shall reduce the interest rate or principal amount of any Exchange Note, or delay the final scheduled payment
date of any Exchange Note without the consent of the holder of such Exchange Note.

 

(d)            Notwithstanding
anything herein to the contrary, any term or provision of this Exchange Note Servicing Supplement may be amended by the Servicer without
the consent of any of the Exchange Noteholder or any other Person to add, modify or eliminate any provisions as may be necessary or advisable
in order to comply with or obtain more favorable treatment under or with respect to any law or regulation or any accounting rule or
principle (whether now or in the future in effect); it being a condition to any such amendment that the Rating Agency Condition shall
have been satisfied.

 

(e)            It
shall not be necessary for the consent of any Person pursuant to this Section for such Person to approve the particular form of
any proposed amendment, but it shall be sufficient if such Person consents to the substance thereof.

 

(f)            Prior
to the execution of any amendment to this Exchange Note Servicing Supplement, the Servicer shall provide each Rating Agency with written
notice of the substance of such amendment. No later than 10 Business Days after the execution of any amendment to this Exchange Note
Servicing Supplement, the Servicer shall furnish a copy of such amendment to each Rating Agency, the Titling Trustee, the Closed-End
Administrative Agent and the Closed-End Collateral Agent.

 

(g)            Prior
to the execution of any amendment to this Exchange Note Servicing Supplement, the Titling Trustee and the Closed-End Administrative Agent
shall be entitled to receive upon request and conclusively rely upon an Opinion of Counsel stating that the execution of such amendment
is authorized or permitted by the Closed-End Servicing Agreement or this Exchange Note Servicing Supplement and that all conditions precedent
to the execution and delivery of such amendment have been satisfied.

 

    11 

     

    

 

Section 16.2     GOVERNING
LAW. THIS EXCHANGE NOTE SERVICING SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL, SUBSTANTIVE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE RULES THEREOF RELATING TO CONFLICTS OF LAW AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 16.3     NOTICES.
The notice provisions of the Closed-End Servicing Agreement shall apply equally to this Exchange Note Servicing Supplement. All demands,
notices and communications hereunder shall be in writing and shall be delivered or mailed by registered or certified first-class United
States mail, postage prepaid, hand delivery, any prepaid courier service, or by telecopier or by electronic mail (if designated by a
party to the other parties), and addressed in each case as follows: (a) if to the Servicer, 250 Jim Moran Blvd., Deerfield Beach,
Florida 33442, Attention: Treasurer; Facsimile: (954) 429-2685; (b) if to the Titling Trustee, 190 S. LaSalle Street, 7th Floor,
Chicago, Illinois 60603, Attention: Chris Nuxoll; Email: christopher.nuxoll@usbank.com; Facsimile: (312) 332-7994; (c) if to
the Delaware Trustee, 1011 Centre Road, Suite 203, Wilmington, Delaware 19805, Attention: Chris Nuxoll; Email: christopher.nuxoll@usbank.com;
Facsimile: (312) 332-7994; (d) if to the Closed-End Administrative Agent, 1011 Centre Road, Suite 203, Wilmington, Delaware
19805, Attention: Chris Nuxoll; Email: christopher.nuxoll@usbank.com; Facsimile: (312) 332-7994; (e) if to the Collateral Agent,
c/o U.S. Bank National Association, 190 S. LaSalle Street, 7th Floor, Chicago, Illinois 60603, Attention: Chris Nuxoll; Email: christopher.nuxoll@usbank.com;
Facsimile: (312) 332-7994; or (f) if to the Closed-End Collateral Agent, c/o Lord Securities Corporation, 48 Wall Street, 27th Floor,
New York, New York 10005, Attention: World Omni Program Manager; Email: al.fioravanti@tmf-group.com; or, as to each party, at such other
address or electronic mail address as shall be designated by such party in a written notice to each other party. All notices and demands
shall be deemed to have been given upon actual receipt thereof to any officer of the Person entitled to receive such notices and demands
at the address of such Person for notices hereunder. Notwithstanding the foregoing, with the consent of the appropriate party under this
Agreement, the obligations of World Omni and any Affiliate of World Omni to deliver or provide any demand, delivery, notice, communication
or instruction to such party other than a Noteholder shall be satisfied by World Omni or such Affiliate, as the case may be, making such
demand, delivery, notice, communication or instruction available at https://via.intralinks.com/, or such other website or distribution
service or provider as World Omni or such Affiliate, as applicable, shall designate by written notice to the other parties hereto. If
World Omni is no longer the Servicer, the successor Servicer shall provide any required Rating Agency notices under this Agreement to
the Depositor, who promptly shall provide such notices to the Rating Agencies.

 

Section 16.4     THIRD-PARTY
BENEFICIARIES. The Issuing Entity and the Indenture Trustee, as holder and pledgee, respectively, of the Closed-End Exchange Note,
and their respective successors, permitted assigns and pledgees are third-party beneficiaries of the obligations of the parties hereto
and may directly enforce the performance of any of such obligations hereunder.

 

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Section 16.5     SEVERABILITY.
If one or more of the provisions of this Exchange Note Servicing Supplement shall be for any reason whatever held invalid or unenforceable,
such provisions shall be deemed severable from the remaining covenants, agreements and provisions of this Exchange Note Servicing Supplement,
and such invalidity or unenforceability shall in no way affect the validity or enforceability of such remaining covenants, agreements
and provisions, or the rights of any parties hereto. To the extent permitted by law, the parties hereto waive any provision of law that
renders any provision of this Exchange Note Servicing Supplement invalid or unenforceable in any respect.

  

Section 16.6     BINDING
EFFECT. The provisions of the Closed-End Servicing Agreement and this Exchange Note Servicing Supplement, insofar as they relate
to the 2022-A Reference Pool, shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the
parties hereto.

 

Section 16.7     ARTICLE AND
SECTION HEADINGS. The article and section headings herein are for convenience of reference only, and shall not limit or otherwise
affect the meaning hereof.

 

Section 16.8     EXECUTION
IN COUNTERPARTS; ELECTRONIC SIGNATURES. This Exchange Note Servicing Supplement may be executed in any number of counterparts, each
of which so executed and delivered shall be deemed to be an original, but all of which shall together constitute but one and the same
instrument. Each of the parties agree that this Exchange Note Servicing Supplement and any other documents to be delivered in connection
herewith may be electronically signed, that any digital or electronic signatures (including pdf, facsimile or electronically imaged signatures
provided by DocuSign or any other digital signature provider) appearing on this Exchange Note Servicing Supplement or such other documents
are the same as handwritten signatures for the purposes of validity, enforceability and admissibility, and that delivery of any such
electronic signature to, or a signed copy of, this Exchange Note Servicing Supplement and such other documents may be made by facsimile,
email or other electronic transmission.

 

Section 16.9     FURTHER
ASSURANCES. Each party will do such acts, and execute and deliver to any other party such additional documents or instruments, as
may be reasonably requested in order to effect the purposes of this Exchange Note Servicing Supplement and to better assure and confirm
unto the requesting party its rights, powers and remedies hereunder.

 

    13 

     

    

 

Section 16.10     EACH
EXCHANGE NOTE SEPARATE; ASSIGNEES OF EXCHANGE NOTE. Each party hereto acknowledges and agrees (and each holder or pledgee of the
Exchange Note, by virtue of its acceptance of such Exchange Note or pledge thereof acknowledges and agrees) that (a) the Closed-End
Collateral Specified Interest is a separate series of the Titling Trust as provided in Section 3806(b)(2) of Chapter 38 of
Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., (b) the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to (i) the Exchange Note or the related 2022-A Reference Pool shall be enforceable
against such Reference Pool only and not against any Other Reference Pool, the Warehouse Facility Pool or any Unencumbered Reference
Pool and (ii) any Other Exchange Note, any Other Reference Pool, the Warehouse Facility Pool or any Unencumbered Reference Pool
shall be enforceable against such Other Exchange Note, Other Reference Pools, the Warehouse Facility Pool or Unencumbered Reference Pool
only, as applicable, and not against the Exchange Note or any Closed-End Units included in the 2022-A Reference Pool, (c) except
to the extent required by law, the Closed-End Units included in the Warehouse Facility Pool, Closed-End Units included in any Unencumbered
Reference Pool or Closed-End Units included in any Other Reference Pool with respect to any Other Exchange Note (other than the Exchange
Note transferred hereunder which is related to the 2022-A Reference Pool) shall not be subject to the claims, debts, liabilities, expenses
or obligations arising from or with respect to the Exchange Note in respect of such claim, (d) no creditor or holder of a claim
relating to (i) the Exchange Note or the related 2022-A Reference Pool shall be entitled to maintain any action against or recover
any assets allocated to any Other Reference Pool, the Warehouse Facility Pool, any Unencumbered Reference Pool or any Other Exchange
Note or the assets allocated thereto, and (ii) any Other Reference Pool, the Warehouse Facility Pool, any Unencumbered Reference
Pool or any Other Exchange Note other than the Exchange Note related to the 2022-A Reference Pool shall be entitled to maintain any action
against or recover any assets allocated to the 2022-A Reference Pool, and (e) any purchaser, assignee or pledgee of an interest
in the 2022-A Reference Pool or, the Exchange Note, must, prior to or contemporaneously with the grant of any such assignment, pledge
or security interest, (i) give to the Titling Trust a non-petition covenant substantially similar to that set forth in Section 11.10
of the Titling Trust Agreement, and (ii) execute an agreement for the benefit of each holder, assignee or pledgee from time to time
of any Other Exchange Note to release all claims to the assets of the Titling Trust allocated to the Warehouse Facility Pool, any Unencumbered
Reference Pool and each Other Reference Pool and, in the event that such release is not given effect, to fully subordinate all claims
it may be deemed to have against the assets of the Titling Trust allocated to the Warehouse Facility Pool, any Unencumbered Reference
Pool and each Other Reference Pool. Pursuant to Section 3.1(a) of the Intercreditor Agreement, on the date hereof, each
party hereto shall enter into a Joinder Agreement to the Intercreditor Agreement as a new Interest Holder, and shall deliver an executed
copy of such Joinder Agreement to each party to the Intercreditor Agreement.

  

Section 16.11     NO
PETITION. With respect to each Bankruptcy Remote Party, each party hereto (and each holder and pledgee of the Closed-End Exchange
Note, by virtue of its acceptance of such Closed-End Exchange Note or pledge thereof) agrees that, prior to the date which is one year
and one day after payment in full of all obligations under each Financing, (i) no party hereto shall authorize such Bankruptcy Remote
Party to commence a voluntary winding-up or other voluntary case or other proceeding seeking liquidation, reorganization or other relief
with respect to such Bankruptcy Remote Party or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect
in any jurisdiction or seeking the appointment of an administrator, trustee, receiver, liquidator, custodian or other similar official
with respect to such Bankruptcy Remote Party or any substantial part of its property or to consent to any such relief or to the appointment
of or taking possession by any such official in an involuntary case or other proceeding commenced against such Bankruptcy Remote Party,
or to make a general assignment for the benefit of any party hereto or any other creditor of such Bankruptcy Remote Party, and (ii) none
of the parties hereto shall commence or join with any other Person in commencing any proceeding against such Bankruptcy Remote Party
under any bankruptcy, reorganization, liquidation or insolvency law or statute now or hereafter in effect in any jurisdiction.

 

    14 

     

    

 

Section 16.12     SUBMISSION
TO JURISDICTION; WAIVER OF JURY TRIAL. Each of the parties hereto hereby irrevocably and unconditionally:

 

(a)            submits
for itself and its property in any legal action or proceeding relating to this Agreement or any documents executed and delivered in connection
herewith, or for recognition and enforcement of any judgment in respect thereof, to the nonexclusive general jurisdiction of the courts
of the State of New York, the courts of the United States of America for the Southern District of New York and appellate courts from
any thereof;

 

(b)            consents
that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue
of such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;

 

(c)            agrees
that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to such Person at its address determined in accordance with Section 16.3
of this Exchange Note Servicing Supplement; and

 

(d)            agrees
that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right
to sue in any other jurisdiction.

 

Section 16.13     LIMITATION
OF LIABILITY OF VT INC. Notwithstanding anything contained herein to the contrary, this Exchange Note Servicing Supplement has been
signed by VT Inc. not in its individual capacity but solely in its capacity as Titling Trustee and in no event shall VT Inc. in its individual
capacity have any liability for the representations, warranties, covenants, agreements or other obligations of the Titling Trust hereunder,
as to all of which recourse shall be had solely to the assets of the Titling Trust.

 

Section 16.14     INFORMATION
REQUESTS. The parties hereto shall provide any information reasonably requested by the Servicer, the Issuing Entity, the Depositor
or any of their Affiliates, in order to comply with or obtain more favorable treatment under any current or future law, rule, regulation,
accounting rule or principle.

 

Section 16.15     REGULATION
AB. The Servicer shall cooperate fully with the Depositor and the Issuing Entity to deliver to the Depositor and the Issuing Entity
(including any of its assignees or designees) any and all statements, reports, certifications, records and any other information necessary
in the good faith determination of the Depositor or the Issuing Entity to permit the Depositor to comply with the provisions of Regulation
AB, together with such disclosures relating to the Servicer and the Transaction Units, or the servicing of the Transaction Units, reasonably
believed by the Depositor to be necessary in order to effect such compliance.

 

Section 16.16     CREDIT
RISK RETENTION. World Omni shall comply in all material respects with all requirements imposed on the “Sponsor of a Securitization”
in accordance with the Credit Risk Retention Rules, including its requirements to (i) retain, either directly or through a “majority-owned
affiliate” (as such term is defined in the Credit Risk Retention Rules) of World Omni, an economic interest in the Exchange Note
in accordance with the Credit Risk Retention Rules and shall not, and shall cause any such majority-owned affiliate to not, sell,
pledge or hedge such interest except as permitted under the Credit Risk Retention Rules and (ii) satisfy the disclosure requirements
set forth in the Credit Risk Retention Rules without any involvement from the underwriters.

 

    15 

     

    

 

Section 16.17     EU
AND UK RISK RETENTION. World Omni hereby represents and confirms, covenants and agrees, in connection with the Securitisation Rules as
in effect and applicable on the Closing Date, on an ongoing basis, so long as any Notes remain Outstanding, that:

 

(a)            it,
as “originator” (as such term is defined for the purposes of each of the Securitisation Regulations), will retain, upon issuance
of the Notes and on an ongoing basis and for so long as the Notes remain Outstanding, a material net economic interest (the “Retained
Interest”) in the asset-backed financing transaction described in the Prospectus, in accordance with option (d) of Article 6(3) of
each of the Securitisation Regulations, by holding (i) indirectly, all the limited liability company interests in the Depositor
(or one or more wholly-owned special purpose subsidiaries of World Omni), which in turn will retain the Certificates to be issued by
the Issuing Entity, and (ii) the residual interest in the 2022-A Reference Pool, such Certificates and interest collectively representing
at least 5% of the aggregate Securitization Value of the Transaction Units in the 2022-A Reference Pool;

 

(b)            it
will not (and will not permit the Depositor or any of its other Affiliates to) hedge or otherwise mitigate its credit risk under or associated
with the Retained Interest, or sell, transfer or otherwise surrender all or part of the rights, benefits or obligations arising from
the Retained Interest, except, in each case, to the extent permitted in accordance with the Securitisation Rules;

 

(c)            it
will not change the manner in which it retains or the method of calculating the Retained Interest while any of the Notes are Outstanding,
except under exceptional circumstances, and to the extent permitted in accordance with the Securitisation Rules;

 

(d)            it
will provide ongoing confirmation of its continued compliance with its obligations in the foregoing clauses (a), (b) and (c), (i) in
or concurrently with the delivery of each Servicer Certificate, (ii) upon the occurrence of any Event of Default (as defined in
the Indenture) and (iii) from time to time upon request by any Noteholder in connection with (x) any change in the structural
features of the asset-backed financing transaction described in the Prospectus that could materially impact the performance of the Notes,
(y) any change in the performance of the asset-backed financing transaction described in the Prospectus, the risk characteristics
of the asset-backed financing transaction or of the Transaction Units which, in any case, could materially impact the performance of
the Notes, or (z) any material breach of the Transaction Documents;

 

(e)            it
will promptly notify the Issuing Entity in writing if for any reason it fails to comply with any of the covenants set out in paragraphs
(a), (b) and (c) above; and

 

(f)            it
was not established for, and does not operate for, the sole purpose of securitizing exposures.

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

    16 

     

    

 

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

 

	 	AL HOLDING CORP., as
    Closed-End Collateral Agent
	 	 
	 	By:	                       

	 	Name:	 

	 	Title:	 

 

    S - 1 

     

    

 

	 	WORLD OMNI FINANCIAL CORP., as
    Servicer and, with respect to Sections 16.16 and 16.17, individually

 

	 	By:	                       

	 	Name:	 

	 	Title:	 

 

    S - 2 

     

    

 

	 	WORLD OMNI LT

	 	 
	 	By:	VT, Inc., not in its individual
    capacity but solely as Titling Trustee

 

	 	By:	                       

	 	Name:	 

	 	Title:	 

 

    S - 3Exhibit 4.2
​
OCEANPAL INC.
2021 EQUITY INCENTIVE PLAN
(effective November 8, 2021, as amended and restated on March 23, 2022)
ARTICLE I
General
1.1        Purpose
The OceanPal Inc. 2021 Equity Incentive Plan (the “Plan”) is designed to provide certain Key Persons (as defined below), whose initiative and efforts are deemed to be important to the successful conduct of the business of OceanPal Inc. (the “Company”), with incentives to (a) acquire a proprietary interest in the success of the Company, (b) maximize their performance in respect of the provision of their services to the Company, a Subsidiary (as defined below) and/or an Affiliate (as defined below) and (c) enhance the long-term performance of the Company.
1.2        Administration
(a)        Administration.  The Plan shall be administered by the Compensation Committee of the Company’s Board of Directors (the “Board”) or such other committee of the Board as may be designated by the Board to administer the Plan (the Compensation Committee or such other committee, as applicable, the “Administrator”); provided  that (i) in the event the Company is subject to Section 16 of the U.S. Securities Exchange Act of 1934, as amended (the “1934 Act”), the Administrator shall be composed of two or more directors, each of whom is a “Non-Employee Director” (a “Non-Employee Director”) under Rule 16b-3 (as promulgated and interpreted by the Securities and Exchange Commission (the “SEC”) under the 1934 Act, or any successor rule or regulation thereto as in effect from time to time (“Rule 16b-3”)), and (ii) the Administrator shall be composed solely of two or more directors who are “independent directors” under the rules of any stock exchange on which the Company’s Common Stock (as defined below) is traded; provided further, however,  that, (A) prior to the date of the consummation of an initial listing of the Company’s Common Stock, if any, the Administrator may be composed of one or more members of the Board, as determined by the Board, (B) the requirement in the preceding clause (i) shall apply only when required to exempt an Award (as defined below) intended to qualify for an exemption under the applicable provisions referenced therein, (C) the requirement in the preceding clause (ii) shall apply only when required pursuant to the applicable rules of the applicable stock exchange and (D) if at any time the Administrator is not so composed as required by the preceding provisions of this sentence, that fact will not invalidate any grant made, or action taken, by the Administrator hereunder that otherwise satisfies the terms of the Plan.  Subject to the terms of the Plan, applicable law and the applicable rules and regulations of any stock exchange on which the Common Stock is listed for trading, and in addition to other express powers and authorizations conferred on the Administrator by the Plan, the Administrator shall have the full power and authority to: (1)
​

1

​
designate the Key Persons to receive Awards under the Plan; (2) determine the types of Awards granted to a participant under the Plan; (3) determine the number of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards; (4) determine the terms and conditions of any Awards; (5) determine whether, and to what extent, and under what circumstances, Awards may be settled or exercised in cash, shares, other securities, other Awards or other property, or cancelled, forfeited or suspended, and the methods by which Awards may be settled, exercised, cancelled, forfeited or suspended; (6) determine whether, to what extent, and under what circumstances cash, shares, other securities, other Awards, other property and other amounts payable with respect to an Award shall be deferred, either automatically or at the election of the holder thereof or the Administrator; (7) construe, interpret and implement the Plan and any Award Agreement (as defined below); (8) prescribe, amend, rescind or waive rules and regulations relating to the Plan, including rules governing its operation, and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (9) correct any defect, supply any omission and reconcile any inconsistency in the Plan or any Award Agreement; and (10) make any other determination and take any other action that the Administrator deems necessary or desirable for the administration of the Plan.  Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Administrator, may be made at any time and shall be final, conclusive and binding upon all Persons (as defined below).
(b)               General Right of Delegation.  Except to the extent prohibited by applicable law, the applicable rules of a stock exchange or any charter, by-laws or other agreement governing the Administrator, the Administrator may delegate all or any part of its responsibilities to any Person or Persons selected by it; provided, however,  that in no event shall an officer of the Company be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (i) individuals who are subject to Section 16 of the 1934 Act, to the extent applicable, or (ii) officers of the Company to whom authority to grant or amend Awards has been delegated hereunder or directors of the Company; provided, further,  that any delegation of administrative authority shall only be permitted to the extent it is permissible under applicable securities laws (including, without limitation, Rule 16b-3, to the extent applicable) and the rules of any applicable stock exchange.  Any delegation hereunder shall be subject to the restrictions and limits that the Administrator specifies at the time of such delegation, and the Administrator may at any time rescind the authority so delegated or appoint a new delegatee.  At all times, the delegatee appointed under this Section 1.2(b) shall serve in such capacity at the pleasure of the Administrator.
(c)                Indemnification.  No member of the Board, the Administrator or any officer or employee of the Company or any Subsidiary or any Affiliate or any of their agents (each such Person, a "Covered Person") shall be liable for any action taken or omitted to be taken, or any determination made, in good faith on behalf of the Company with respect to the Plan or any Award hereunder.  Each Covered Person shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability or expense (including attorneys' fees) that may be imposed upon or incurred by such Covered Person in connection with or resulting from any action, suit or proceeding to which such Covered Person may be a party or in which such Covered Person may be involved by reason of any action taken or omitted to be taken under the Plan or any Award Agreement and (ii) any and all amounts paid by such Covered Person, with
​

2

​
the Company's approval, in settlement thereof, or paid by such Covered Person in satisfaction of any judgment in any such action, suit or proceeding against such Covered Person; provided  that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and, once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company's choice.  The foregoing right of indemnification shall not be available to a Covered Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case not subject to further appeal, determines that the acts or omissions of such Covered Person giving rise to the indemnification claim resulted from such Covered Person's bad faith, fraud or willful criminal act or omission or that such right of indemnification is otherwise prohibited by law or by the Company's articles of incorporation or bylaws (in each case, as amended and/or restated).  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which Covered Persons may be entitled under the Company's articles of incorporation or bylaws (in each case, as amended and/or restated), as a matter of law, or otherwise, or any other power that the Company may have to indemnify such Persons or hold them harmless.
(d)               Delegation of Authority to Senior Officers.  The Administrator may, in accordance with and subject to the terms of Section 1.2(b), delegate, on such terms and conditions as it determines, to one or more senior officers of the Company the authority to make grants of Awards to Key Persons who are employees of the Company or any Subsidiary (including any such prospective employee) and consultants or service providers to (including Persons who are employed by or provide services to any entity that is itself a consultant or service provider to) the Company or any Subsidiary.
(e)                Awards to Non-Employee Directors.  Notwithstanding anything to the contrary contained herein, the Board may, in its sole discretion, at any time and from time to time, grant Awards to Non-Employee Directors or administer the Plan with respect to such Awards.  In any such case, the Board shall have all the authority and responsibility granted to the Administrator herein with respect to such Awards.
1.3        Persons Eligible for Awards
The Persons eligible to receive Awards under the Plan are those directors, officers and employees (including any prospective officer or employee) of the Company or a Subsidiary or an Affiliate and consultants and service providers to (including Persons who are employed by or provide services to any entity that is itself a consultant or service provider to) the Company or a Subsidiary or an Affiliate (collectively, “Key Persons”) as the Administrator shall select.
1.4        Types of Awards
Awards may be made under the Plan in the form of (a) non-qualified stock options (i.e., stock options that are not “incentive stock options” for purposes of Sections 421 and 422 of the Code (as defined below)), (b) stock appreciation rights, (c) restricted stock, (d) restricted stock units, (e) unrestricted stock, (f) other equity-based or equity-related awards, (g) dividend equivalents and (h) cash awards, all as more fully set forth in the Plan.  The term “Award” means any of the foregoing that are granted under the Plan.
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1.5        Shares Available for Awards; Adjustments for Changes in Capitalization
(a)                Maximum Number. Subject to adjustment as provided in Section 1.5(c):
(i)  the maximum aggregate number of shares of common stock of the Company, par value $0.01 (“Common Stock”), that may be delivered pursuant to Awards granted under the Plan shall be 1,000,000 and the maximum aggregate number of shares of 8.0% Series C Cumulative Convertible Perpetual Preferred Stock of the Company, par value $0.01 per share (“Preferred Stock”), that may be delivered pursuant to Awards granted under the Plan shall be 10,000.  The following shares of Common Stock and Preferred Stock shall again become available for Awards under the Plan: (i) any shares that are subject to an Award under the Plan and that remain unissued upon the cancellation or termination of such Award for any reason whatsoever; (ii) any shares of restricted stock forfeited pursuant to the Plan or the applicable Award Agreement; provided  that any dividend equivalent rights with respect to such shares that have not theretofore been directly remitted to the grantee are also forfeited; and (iii) any shares in respect of which an Award is settled for cash without the delivery of shares to the grantee.  Any shares that are held back to satisfy the exercise price or tax withholding obligation pursuant to any stock options or stock appreciation rights granted under the Plan shall again become available to be delivered pursuant to Awards under the Plan.   Awards that are payable solely in cash shall not be counted against the aggregate number of shares of Common Stock and Preferred Stock available for Awards under the Plan.
(b)        Source of Shares.  Shares issued pursuant to the Plan may be authorized but unissued Common Stock, Preferred Stock or treasury shares. The Administrator may direct that any stock certificate or book entry interest evidencing shares issued pursuant to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such shares.
(c)        Adjustments. (i)  In the event that any dividend or other distribution (whether in the form of cash, Company shares, other securities or other property), stock split, reverse stock split, reorganization, merger, consolidation, split-up, combination, repurchase or exchange of Company shares or other securities of the Company, issuance of warrants or other rights to purchase Company shares or other securities of the Company, or other similar corporate transaction or event affects the Company shares such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, then, subject to the provisions of Section 1.5(c)(iv) below, the Administrator shall, in such manner as it may deem equitable, adjust any or all of the number of shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted under the Plan.
(ii)        The Administrator shall make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or infrequently occurring events (including the events described in Section 1.5(c)(i) or the occurrence of a Change in Control (as defined below), subject to the provisions of Section 1.5(c)(iv) below) affecting the Company, a Subsidiary or an Affiliate, or the financial statements of the Company, a Subsidiary or an Affiliate, or of changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange, accounting principles or law, whenever the
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Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, including providing for (A) adjustment to (1) the number of shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards or to which outstanding Awards relate and (2) the Exercise Price (as defined below) with respect to any Award and (B) a substitution or assumption of Awards, accelerating the exercisability or vesting of, or lapse of restrictions on, Awards, or accelerating the termination of Awards by providing for a period of time for exercise prior to the occurrence of such event, or, if deemed appropriate or desirable, providing for a cash payment to the holder of an outstanding Award in consideration for the cancellation of such Award (it being understood that, in such event, any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value (as defined below) of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); provided, however,  that with respect to options and stock appreciation rights, unless otherwise determined by the Administrator, such adjustment shall be made in accordance with the provisions of Section 424(h) of the Code.
(iii)       In the event of (A) a dissolution or liquidation of the Company, (B) a sale of all or substantially all the Company’s assets or (C) a merger, reorganization or consolidation involving the Company or a Subsidiary, the Administrator shall have the power to:
(1)    provide that outstanding options, stock appreciation rights, restricted stock units (including any related dividend equivalent right) and/or other Awards granted under the Plan shall either continue in effect, be assumed or an equivalent award shall be substituted therefor by the successor entity or a parent or subsidiary entity;
(2)    cancel, effective immediately prior to the occurrence of such event, options, stock appreciation rights, restricted stock units (including each dividend equivalent right related thereto) and/or other Awards granted under the Plan outstanding immediately prior to such event (whether or not then exercisable) and, in full consideration of such cancellation, pay to the holder of such Award a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Administrator) of the shares subject to such Award (or the value of such Award, as determined by the Administrator, if not based on the Fair Market Value of shares) over the aggregate Exercise Price of such Award (or the grant price of such Award, if any, if applicable)(it being understood that, in such event, any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); or
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(3)     notify the holder of an option or stock appreciation right in writing or electronically that each option and stock appreciation right shall be fully vested and exercisable for a period of 30 days from the date of such notice, or such shorter period as the Administrator may determine to be reasonable, and the option or stock appreciation right shall terminate upon the expiration of such period (which period shall expire no later than immediately prior to the consummation of the corporate transaction).
(iv)       In connection with the occurrence of any Equity Restructuring (as defined below), and notwithstanding anything to the contrary in this Section 1.5(c):
(A)       The number and type of securities or other property subject to each outstanding Award and the Exercise Price or grant price thereof, if applicable, shall be equitably adjusted; and
(B)       The Administrator shall make such equitable adjustments, if any, as the Administrator may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustment of the limitation set forth in Section 1.5(a)). The adjustments provided under this Section 1.5(c)(iv) shall be nondiscretionary and shall be final and binding on the affected participant and the Company.
1.6        Definitions of Certain Terms
(a)       “Affiliate” shall mean (i) any entity that, directly or indirectly, is controlled by, controls or is under common control with, the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Administrator.
(b)       Unless otherwise specifically set forth in the applicable Award Agreement, in connection with a termination of employment or consultancy/service relationship, for purposes of the Plan, the term “for Cause” shall be defined as follows:
(i)                 if there is an employment, severance, consulting, service, change in control or other agreement governing the relationship between the grantee, on the one hand, and the Company or a Subsidiary or an Affiliate, on the other hand, that contains a definition of “cause” (or similar phrase), for purposes of the Plan, the term “for Cause” shall mean those acts or omissions that would constitute “cause” under such agreement; or
(ii)               if the preceding clause (i) is not applicable to the grantee, for purposes of the Plan, the term "for Cause" shall mean any of the following:
		(A)
	any failure by the grantee substantially to perform the grantee’s employment or consulting/service or Board membership duties;

		(B)
	any excessive unauthorized absenteeism by the grantee;

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		(C)
	any refusal by the grantee to obey the lawful orders of the Board or any other Person to whom the grantee reports;

		(D)
	any act or omission by the grantee that is or may be injurious to the Company or any Subsidiary or any Affiliate, whether monetarily, reputationally or otherwise;

		(E)
	any act by the grantee that is inconsistent with the best interests of the Company or any Subsidiary or any Affiliate;

		(F)
	the grantee’s gross negligence that is injurious to the Company or any Subsidiary or any Affiliate, whether monetarily, reputationally or otherwise;

		(G)
	the grantee’s material violation of any of the policies of the Company or any Subsidiary or any Affiliate, as applicable, including, without limitation, those policies relating to discrimination or sexual harassment;

		(H)
	the grantee’s material breach of his or her employment or service contract with the Company or any Subsidiary or any Affiliate;

		(I)
	the grantee’s unauthorized (1) removal from the premises of the Company or any Subsidiary or any Affiliate of any document (in any medium or form) relating to the Company or any Subsidiary or any Affiliate or the customers or clients of the Company or any Subsidiary or any Affiliate or (2) disclosure to any Person of any of the Company’s, any Subsidiary’s or any Affiliate’s confidential or proprietary information;

		(J)
	the grantee’s being convicted of, or entering a plea of guilty or nolo contendere to, any crime that constitutes a felony or involves moral turpitude; and

		(K)
	the grantee’s commission of any act involving dishonesty or fraud.

Any rights the Company or any Subsidiary or any Affiliate may have under the Plan in respect of the events giving rise to a termination “for Cause” shall be in addition to any other rights the Company or any Subsidiary or any Affiliate may have under any other agreement with a grantee or at law or in equity.  Any determination of whether a grantee’s employment or consultancy/service relationship is (or is deemed to have been) terminated “for Cause” shall be made by the Administrator.  If, subsequent to a grantee’s voluntary termination of employment or consultancy/service relationship or involuntary termination of employment or consultancy/service relationship without Cause, it is discovered that the grantee’s employment or consultancy/service relationship could have been terminated “for Cause”, the Administrator may deem such grantee’s employment or consultancy/service relationship to have been terminated “for Cause” upon such discovery and determination by the Administrator.
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(c)“Code” shall mean the Internal Revenue Code of 1986, as amended.
(d)Unless otherwise specifically set forth in the applicable Award Agreement, “Disability” shall mean the grantee’s being unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or the grantee’s, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the grantee’s employer. The existence of a Disability shall be determined by the Administrator.
(e)“Equity Restructuring” shall mean a non-reciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the shares of Common Stock (or other securities of the Company) or the share price thereof and causes a change in the per share value of the shares underlying outstanding Awards.
(f)“Exercise Price” shall mean (i) in the case of options, the price specified in the applicable Award Agreement as the price-per-share at which such share can be purchased pursuant to the option or (ii) in the case of stock appreciation rights, the price specified in the applicable Award Agreement as the reference price-per-share used to calculate the amount payable to the grantee.
(g)The “Fair Market Value” of a share of Common Stock on any day shall be the closing price on the Nasdaq Capital Market, or such other primary stock exchange upon which such shares are then listed, as reported for such day in The Wall Street Journal (or, if not reported in The Wall Street Journal, such other reliable source as the Administrator may determine), or, if no such price is reported for such day, the average of the high bid and low asked price of Common Stock as reported for such day. If no quotation is made for the applicable day, the Fair Market Value of a share of Common Stock on such day shall be determined in the manner set forth in the preceding sentence for the next preceding trading day. Notwithstanding the foregoing, if there is no reported closing price or high bid/low asked price that satisfies the preceding sentences, or if otherwise deemed necessary or appropriate by the Administrator, the Fair Market Value of a share of Common Stock on any day shall be determined by such methods and procedures as shall be established from time to time by the Administrator. The “Fair Market Value” of any property other than Common Stock shall be the fair market value of such property determined by such methods and procedures as shall be established from time to time by the Administrator.
(h)“Person” shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind.
(i)“Repricing” shall mean (i) lowering the Exercise Price of an option or a stock appreciation right after it has been granted, (ii) the cancellation of an option or a stock appreciation right in exchange for cash or another Award when the Exercise Price exceeds the
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Fair Market Value of the underlying shares subject to the Award and (iii) any other action with respect to an option or a stock appreciation right that is treated as a repricing under (A) generally accepted accounting principles or (B) any applicable stock exchange rules.
(j)“Subsidiary” shall mean any entity in which the Company, directly or indirectly, has a 50% or more equity interest.
ARTICLE II
Awards Under The Plan
2.1        Agreements Evidencing Awards
Each Award granted under the Plan shall be evidenced by a written certificate (“Award Agreement”), which shall contain such provisions as the Administrator may deem necessary or desirable and which may, but need not, require execution or acknowledgment by a grantee.  The Award shall be subject to all of the terms and provisions of the Plan and the applicable Award Agreement.
2.2        Grant of Stock Options and Stock Appreciation Rights
(a)                Stock Option Grants.  The Administrator may grant non-qualified stock options (“options”) to purchase shares of Common Stock from the Company to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  No option will be treated as an “incentive stock option” for purposes of the Code.  It shall be the intent of the Administrator to not grant an Award in the form of stock options to any Key Person who is then subject to the requirements of Section 409A of the Code with respect to such Award if the Common Stock underlying such Award does not then qualify as “service recipient stock” for purposes of Section 409A.  Furthermore, it shall be the intent of the Administrator, in granting options to Key Persons who are subject to Sections 409A and/or 457A of the Code, to structure such options so as to comply with the requirements of Sections 409A and/or 457A of the Code, to the extent applicable.
(b)               Stock Appreciation Right Grants; Types of Stock Appreciation Rights.  The Administrator may grant stock appreciation rights to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  The terms of a stock appreciation right may provide that it shall be automatically exercised for a payment upon the happening of a specified event that is outside the control of the grantee and that it shall not be otherwise exercisable. Stock appreciation rights may be granted in connection with all or any part of, or independently of, any option granted under the Plan.  It shall be the intent of the Administrator to not grant an Award in the form of stock appreciation rights to any Key Person (i) who is then subject to the requirements of Section 409A of the Code with respect to such Award if the Common Stock underlying such Award does not then qualify as “service recipient stock” for purposes of Section 409A or (ii) if such Award would create adverse tax consequences for such Key Person under Section 457A of the Code.  Furthermore, it shall be the intent of the Administrator, in granting stock appreciation rights to Key Persons who are
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subject to Sections 409A and/or 457A of the Code, to structure such stock appreciation rights so as to comply with the requirements of Sections 409A and/or 457A of the Code, to the extent applicable.
(c)                Nature of Stock Appreciation Rights.  The grantee of a stock appreciation right shall have the right, subject to the terms of the Plan and the applicable Award Agreement, to receive from the Company an amount equal to (i) the excess of the Fair Market Value of a share of Common Stock on the date of exercise of the stock appreciation right over the Exercise Price of the stock appreciation right, multiplied by (ii) the number of shares with respect to which the stock appreciation right is exercised.  Each Award Agreement with respect to a stock appreciation right shall set forth the Exercise Price of such Award and, unless otherwise specifically provided in the Award Agreement, the Exercise Price of a stock appreciation right shall equal the Fair Market Value of a share of Common Stock on the date of grant; provided  that in no event may such Exercise Price be less than the greater of (A) the Fair Market Value of a share of Common Stock on the date of grant and (B) the par value of a share of Common Stock.  Payment upon exercise of a stock appreciation right shall be in cash or in shares of Common Stock (valued at their Fair Market Value on the date of exercise of the stock appreciation right) or any combination of both, all as the Administrator shall determine.  Repricing of stock appreciation rights granted under the Plan shall not be permitted (1) to the extent such action could cause adverse tax consequences to the grantee under Section 409A or 457A of the Code, to the extent applicable, or (2) without prior shareholder approval, to the extent such approval would be required to be obtained by the Company pursuant to the applicable rules of any applicable stock exchange on which the Common Stock is then listed, and any action that would be deemed to result in a Repricing of a stock appreciation right shall be deemed null and void if it would cause such adverse tax consequences or if any requisite shareholder approval related thereto is not obtained prior to the effective time of such action.  Upon the exercise of a stock appreciation right granted in connection with an option, the number of shares subject to the option shall be reduced by the number of shares with respect to which the stock appreciation right is exercised.  Upon the exercise of an option in connection with which a stock appreciation right has been granted, the number of shares subject to the stock appreciation right shall be reduced by the number of shares with respect to which the option is exercised.
(d)               Option Exercise Price.  Each Award Agreement with respect to an option shall set forth the Exercise Price of such Award and, unless otherwise specifically provided in the Award Agreement, the Exercise Price of an option shall equal the Fair Market Value of a share of Common Stock on the date of grant; provided  that in no event may such Exercise Price be less than the greater of (i) the Fair Market Value of a share of Common Stock on the date of grant and (ii) the par value of a share of Common Stock.  Repricing of options granted under the Plan shall not be permitted (1) to the extent such action could cause adverse tax consequences to the grantee under Section 409A or 457A of the Code, to the extent applicable, or (2) without prior shareholder approval, to the extent such approval would be required to be obtained by the Company pursuant to the applicable rules of any applicable stock exchange on which the Common Stock is then listed, and any action that would be deemed to result in a Repricing of an option shall be deemed null and void if it would cause such adverse tax consequences or if any requisite shareholder approval related thereto is not obtained prior to the effective time of such action.
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2.3        Exercise of Options and Stock Appreciation Rights
Subject to the other provisions of this Article II and the Plan, each option and stock appreciation right granted under the Plan shall be exercisable as follows:
(a)                Timing and Extent of Exercise.  Options and stock appreciation rights shall be exercisable at such times and under such conditions as determined by the Administrator and set forth in the corresponding Award Agreement, but in no event shall any portion of such Award be exercisable subsequent to the tenth anniversary of the date on which such Award was granted.  Unless the applicable Award Agreement otherwise specifically provides, an option or stock appreciation right may be exercised from time to time as to all or part of the shares as to which such Award is then exercisable.
(b)               Notice of Exercise.  An option or stock appreciation right shall be exercised by the filing of a written notice with the Company or the Company’s designated exchange agent (the “Exchange Agent”), on such form and in such manner as the Administrator shall prescribe.
(c)                Payment of Exercise Price.  Any written notice of exercise of an option shall be accompanied by payment for the shares being purchased.  Such payment shall be made: (i) by certified or official bank check (or the equivalent thereof acceptable to the Company or its Exchange Agent) for the full option Exercise Price; (ii) with the consent of the Administrator, which consent shall be given or withheld in the sole discretion of the Administrator, by withholding of shares of Common Stock having a Fair Market Value (determined as of the exercise date) equal to all or part of the option Exercise Price and a certified or official bank check (or the equivalent thereof acceptable to the Company or its Exchange Agent) for any remaining portion of the full option Exercise Price; or (iii) at the sole discretion of the Administrator and to the extent permitted by law, by such other provision, consistent with the terms of the Plan, as the Administrator may from time to time prescribe (whether directly or indirectly through the Exchange Agent), or by any combination of the foregoing payment methods.
(d)               Delivery of Certificates Upon Exercise.  Subject to Sections 3.2, 3.4 and 3.13, promptly after receiving payment of the full option Exercise Price, or after receiving notice of the exercise of a stock appreciation right for which the Administrator determines payment will be made partly or entirely in shares, the Company or its Exchange Agent shall (i) deliver to the grantee, or to such other Person as may then have the right to exercise the Award, a certificate or certificates for the shares of Common Stock for which the Award has been exercised or, in the case of stock appreciation rights, for which the Administrator determines will be made in shares or (ii) establish an account evidencing ownership of the stock in uncertificated form for the shares of Common Stock for which the Award has been exercised or, in the case of stock appreciation rights, for which the Administrator determines will be made in shares.  If the method of payment employed upon an option exercise so requires, and if applicable law permits, an optionee may direct the Company or its Exchange Agent, as the case may be, to deliver the stock certificate(s) to the optionee’s stockbroker.
(e)                No Stockholder Rights.  No grantee of an option or stock appreciation right (or other Person having the right to exercise such Award) shall have any of the rights of a
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stockholder of the Company with respect to shares subject to such Award until the issuance of a stock certificate to such Person for such shares or an account in the name of the grantee evidences ownership of stock in uncertificated form. Except as otherwise provided in Section 1.5(c), no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such stock certificate is issued or the date an account evidencing ownership of the stock in uncertificated form notes receipt of such stock.
2.4       Termination of Employment/Service; Death Subsequent to a Termination of Employment/Service
(a)                General Rule.  Except to the extent otherwise provided in paragraphs (b), (c), (d), (e) or (f) of this Section 2.4 or Section 3.5(b)(iii), a grantee who incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates may exercise any outstanding option or stock appreciation right on the following terms and conditions: (i) exercise may be made only to the extent that the grantee was entitled to exercise the Award on the date of termination of employment or consultancy/service relationship, as applicable; and (ii) exercise must occur within three months after termination of employment or consultancy/service relationship but in no event after the original expiration date of the Award; it being understood that then outstanding options and stock appreciation rights shall not be affected by a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the grantee continues to be a director, officer or employee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that is itself a consultant or service provider to), the Company or any of its Subsidiaries or Affiliates.
(b)               Termination “for Cause”.  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates “for Cause”, all options and stock appreciation rights not theretofore exercised (whether vested or unvested) shall immediately terminate upon such termination of employment or consultancy/service relationship.
(c)                Retirement.  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as the result of his or her retirement (as defined below), then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such retirement, remain exercisable for a period of three years after such retirement; provided  that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.  For this purpose, unless otherwise specifically set forth in the applicable Award Agreement, “retirement” shall mean a grantee’s resignation of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates, with the Company’s or its applicable Subsidiary’s or Affiliate’s prior consent, on or after (i) his or her 65th birthday, (ii) the date on which he or she has attained age 60 and completed at least five years of service with the Company or one or more of its Subsidiaries or Affiliates (using any method of calculation the Administrator deems appropriate) or (iii) if approved by the Administrator, on or after his or her having completed at least 20 years of service with the
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Company or one or more of its Subsidiaries or Affiliates (using any method of calculation the Administrator deems appropriate).
(d)               Disability.  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates by reason of a Disability, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such termination, remain exercisable for a period of one year after such termination; provided  that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.
(e)                Death.
(i)         Termination of Employment/Service as a Result of Grantee’s Death.  If a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as the result of his or her death, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such death, remain exercisable for a period of one year after such death; provided  that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.
(ii)        Restrictions on Exercise Following Death.  Any exercise of an Award following a grantee’s death shall be made only by the grantee’s executor or administrator or other duly appointed representative reasonably acceptable to the Administrator, unless the grantee’s will specifically disposes of such Award, in which case such exercise shall be made only by the recipient of such specific disposition.  If a grantee’s personal representative or the recipient of a specific disposition under the grantee’s will shall be entitled to exercise any Award pursuant to the preceding sentence, such representative or recipient shall be bound by all the terms and conditions of the Plan and the applicable Award Agreement which would have applied to the grantee.
(f)                Administrator Discretion.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.4, subject to Section 3.1(c).
2.5       Transferability of Options and Stock Appreciation Rights
Except as otherwise specifically provided in this Plan or the applicable Award Agreement evidencing an option or stock appreciation right, during the lifetime of a grantee, each such Award granted to a grantee shall be exercisable only by the grantee, and no such Award may be sold, assigned, transferred, pledged or otherwise encumbered or disposed of other than by will or by the laws of descent and distribution.  The Administrator may, in any applicable Award Agreement evidencing an option or stock appreciation right, permit a grantee to transfer all or some of the options or stock appreciation rights to (a) the grantee’s spouse, children or grandchildren (“Immediate Family Members”), (b) a trust or trusts for the exclusive benefit of such Immediate Family Members or (c) other parties approved by the Administrator.  Following any such transfer, any transferred options and stock appreciation rights shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer.
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2.6       Grant of Restricted Stock
(a)                Restricted Stock Grants. The Administrator may grant restricted shares of Common Stock and Preferred Stock to such Key Persons, in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions as the Administrator shall determine, subject to the provisions of the Plan.  A grantee of a restricted stock Award shall have no rights with respect to such Award unless such grantee accepts the Award within such period as the Administrator shall specify by accepting delivery of a restricted stock Award Agreement in such form as the Administrator shall determine.
(b)               Issuance of Stock Certificate. Promptly after a grantee accepts a restricted stock Award in accordance with Section 2.6(a), subject to Sections 3.2, 3.4 and 3.13, the Company or its Exchange Agent shall issue to the grantee a stock certificate or stock certificates for the shares of Common Stock and Preferred Stock covered by the Award or shall establish an account evidencing ownership of the stock in uncertificated form.  Upon the issuance of such stock certificates, or establishment of such account, the grantee shall have the rights of a stockholder with respect to the restricted stock, subject to: (i) the nontransferability restrictions and forfeiture provisions described in the Plan (including paragraphs (d) and (e) of this Section 2.6); (ii) in the Administrator’s sole discretion, a requirement, as set forth in the Award Agreement, that any dividends paid on such shares shall be held in escrow and, unless otherwise determined by the Administrator, shall remain forfeitable until all restrictions on such shares have lapsed; and (iii) any other restrictions and conditions contained in the applicable Award Agreement.
(c)                Custody of Stock Certificate. Unless the Administrator shall otherwise determine, any stock certificates issued evidencing shares of restricted stock shall remain in the possession of the Company (or such other custodian as may be designated by the Administrator) until such shares are free of any restrictions specified in the applicable Award Agreement.  The Administrator may direct that such stock certificates bear a legend setting forth the applicable restrictions on transferability.
(d)               Nontransferability. Shares of restricted stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of prior to the lapsing of all restrictions thereon, except as otherwise specifically provided in this Plan or the applicable Award Agreement.  The Administrator at the time of grant shall specify the date or dates (which may depend upon or be related to the attainment of performance goals and other conditions) on which the nontransferability of the restricted stock shall lapse.
(e)                Consequence of Termination of Employment/Service. Unless otherwise specifically set forth in the applicable Award Agreement, (i) a grantee’s termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates for any reason other than death or Disability shall cause the immediate forfeiture of all shares of restricted stock that have not yet vested as of the date of such termination of employment or consultancy/service relationship and (ii) if a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as the result of his or her death or Disability, all shares of restricted stock that have not yet vested as of the date of such termination shall immediately vest as of such date; it being
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understood that then outstanding restricted stock Awards shall not be affected by a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the grantee continues to be a director, officer or employee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that is itself a consultant or service provider to), the Company or any of its Subsidiaries or Affiliates.   All dividends paid on shares forfeited under this Section 2.6(e) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under which such dividends are held or otherwise.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.6(e), subject to Section 3.1(c).
2.7       Grant of Restricted Stock Units
(a)                Restricted Stock Unit Grants.  The Administrator may grant restricted stock units to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  A restricted stock unit granted under the Plan shall confer upon the grantee a right to receive from the Company, conditioned upon the occurrence of such vesting event as shall be determined by the Administrator and specified in the Award Agreement, the number of such grantee’s restricted stock units that vest upon the occurrence of such vesting event multiplied by the Fair Market Value of a share of Common Stock or Preferred Stock, as applicable, on the date of vesting.  Payment upon vesting of a restricted stock unit shall be in cash or in shares of Common Stock or Preferred Stock, as applicable (valued at their Fair Market Value on the date of vesting) or both, all as the Administrator shall determine, and such payments shall be made to the grantee at such time as provided in the Award Agreement, which the Administrator shall intend to be (i) if Section 409A of the Code is applicable with respect to Awards granted to the grantee, within the period required by Section 409A such that it qualifies as a “short-term deferral” pursuant to Section 409A and the Treasury Regulations issued thereunder, unless the Administrator shall provide for deferral of the Award intended to comply with Section 409A, (ii) if Section 457A of the Code is applicable with respect to Awards granted to the grantee, within the period required by Section 457A(d)(3)(B) such that it qualifies for the exemption thereunder, or (iii) if Sections 409A and 457A of the Code are not applicable with respect to Awards granted to the grantee, at such time as determined by the Administrator.
(b)               Dividend Equivalents. The Administrator may include in any Award Agreement with respect to a restricted stock unit a dividend equivalent right entitling the grantee to receive amounts equal to the ordinary dividends that would be paid, during the time such Award is outstanding and unvested, and/or, if payment of the vested Award is deferred, during the period of such deferral following such vesting event, on the shares of Common Stock or Preferred Stock underlying such Award if such shares were then outstanding.  In the event such a provision is included in a Award Agreement, the Administrator shall determine whether such payments shall be (i) paid to the holder of the Award, as specified in the Award Agreement, either (A) at the same time as the underlying dividends are paid, regardless of the fact that the restricted stock unit has not theretofore vested, (B) at the time at which the Award’s vesting event occurs, conditioned upon the occurrence of the vesting event, (C) once the Award has vested, at the same time as the underlying dividends are paid, regardless of the fact that
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payment of the vested restricted stock unit has been deferred, and/or (D) at the time at which the corresponding vested restricted stock units are paid, (ii) made in cash, shares of Common Stock, shares of Preferred Stock or other property and (iii) subject to such other vesting and forfeiture provisions and other terms and conditions as the Administrator shall deem appropriate and as shall be set forth in the Award Agreement.
(c)No Stockholder Rights. No grantee of a restricted stock unit shall have any of the rights of a stockholder of the Company with respect to such Award unless and until a stock certificate is issued with respect to such Award upon the vesting of such Award or an account in the name of the grantee evidences ownership of stock in uncertificated form (it being understood that the Administrator shall determine whether to pay any vested restricted stock unit in the form of cash or Company shares or both), which issuance shall be subject to Sections 3.2, 3.4 and 3.13. Except as otherwise provided in Section 1.5(c), no adjustment to any restricted stock unit shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such stock certificate, if any, is issued or the date an account evidencing ownership of the stock in uncertificated form notes receipt of such stock.
(d)Nontransferability. No restricted stock unit granted under the Plan may be sold, assigned, transferred, pledged or otherwise encumbered or disposed of, except as otherwise specifically provided in this Plan or the applicable Award Agreement.
(e)Consequence of Termination of Employment/Service. Unless otherwise specifically set forth in the applicable Award Agreement, (i) a grantee’s termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates for any reason other than death or Disability shall cause the immediate forfeiture of all restricted stock units that have not yet vested as of the date of such termination of employment or consultancy/service relationship and (ii) if a grantee incurs a termination of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates as the result of his or her death or Disability, all restricted stock units that have not yet vested as of the date of such termination shall immediately vest as of such date; it being understood that then outstanding restricted stock units shall not be affected by a change of employment or consultancy/service relationship with the Company and its Subsidiaries and Affiliates so long as the grantee continues to be a director, officer or employee of, or a consultant or service provider to (or a Person employed by or providing services to any entity that is itself a consultant or service provider to), the Company or any of its Subsidiaries or Affiliates.  All dividend equivalent rights on any restricted stock units forfeited under this Section 2.7(e) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under which such dividends are held or otherwise.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.7(e), subject to Section 3.1(c).
2.8       Grant of Unrestricted Stock
The Administrator may grant (or sell at a purchase price at least equal to par value) shares of Common Stock or Preferred Stock free of restrictions under the Plan to such Key Persons and in such amounts and subject to such forfeiture provisions as the Administrator shall
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determine. Shares may be thus granted or sold in respect of past services or other valid consideration.
2.9       Other Equity-Based or Equity-Related Awards
Subject to the provisions of the Plan (including, without limitation, Section 3.16), the Administrator shall have the sole and complete authority to grant to Key Persons other equity-based or equity-related Awards in such amounts and subject to such terms, conditions, restrictions and forfeiture provisions as the Administrator shall determine; provided  that any such Awards must comply with applicable law and, to the extent deemed desirable by the Administrator, Rule 16b-3.
2.10     Dividend Equivalents
Subject to the provisions of the Plan (including, without limitation, Section 3.16), in the discretion of the Administrator, an Award, other than an option or stock appreciation right, may provide the Award recipient with dividends or dividend equivalents, payable in cash, shares, other securities, other Awards or other property, on a current or deferred basis, on such terms and conditions as may be determined by the Administrator, including, without limitation, payment directly to the Award recipient, withholding of such amounts by the Company subject to vesting of the Award, or reinvestment in additional shares, restricted shares or other Awards.
2.11     Grant of Cash Awards
The Administrator may grant Awards that are payable solely in cash to such Key Persons and in such amounts and subject to such terms, conditions, restrictions and forfeiture provisions as the Administrator shall determine.  Cash Awards may be thus granted in respect of past services or other valid consideration.
ARTICLE III
Miscellaneous
3.1       Amendment of the Plan; Modification of Awards
(a)                Amendment of the Plan.  The Board may from time to time suspend, discontinue, revise or amend the Plan in any respect whatsoever, except that no such suspension, discontinuation, revision or amendment shall materially impair any rights or materially increase any obligations under any Award theretofore made under the Plan without the consent of the grantee (or, upon the grantee’s death, the Person having the rights to the Award).  For purposes of this Section 3.1, any action of the Board or the Administrator that in any way alters or affects the tax treatment of any Award shall not be considered to materially impair any rights of any grantee.
(b)               Stockholder Approval Requirement.  If required by applicable rules or regulations of a national securities exchange or the SEC, the Company shall obtain stockholder approval with respect to any amendment to the Plan that (i) expands the types of Awards available under the Plan, (ii) materially increases the aggregate number of shares which may be issued under the Plan, except as permitted pursuant to Section 1.5(c), (iii) materially increases
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the benefits to participants under the Plan, including any material change to (A) permit, or that has the effect of, a Repricing of any outstanding Award, (B) reduce the price at which shares or options to purchase shares may be offered or (C) extend the duration of the Plan, or (iv) materially expands the class of Persons eligible to receive Awards under the Plan.
(c)                Modification of Awards.  The Administrator may cancel any Award under the Plan. The Administrator also may amend any outstanding Award Agreement, including, without limitation, by amendment which would: (i) accelerate the time or times at which the Award becomes unrestricted, vested or may be exercised; (ii) waive or amend any goals, restrictions or conditions set forth in the Award Agreement; or (iii) waive or amend the operation of Section 2.4, 2.6(e) or 2.7(e) with respect to the termination of the Award upon termination of employment or consultancy/service relationship; provided, however, that no such amendment shall be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the Award.  However, any such cancellation or amendment (other than an amendment pursuant to Section 1.5, 3.5 or 3.16) that materially impairs the rights or materially increases the  obligations of a grantee under an outstanding Award shall be made only with the consent of the grantee (or, upon the grantee’s death, the Person having the rights to the Award).  In making any modification to an Award (e.g., an amendment resulting in a direct or indirect reduction in the Exercise Price or a waiver or modification under Section 2.4(f), 2.6(e) or 2.7(e)), the Administrator may consider the implications, if any, of such modification under the Code with respect to Sections 409A and 457A of the Code in respect of Awards granted under the Plan to individuals subject to such provisions of the Code.
3.2       Consent Requirement
(a)                No Plan Action Without Required Consent.  If the Administrator shall at any time determine that any Consent (as defined below) is necessary or desirable as a condition of, or in connection with, the granting of any Award under the Plan, the issuance or purchase of shares or other rights thereunder, or the taking of any other action thereunder (each such action being hereinafter referred to as a “Plan Action”), then such Plan Action shall not be taken, in whole or in part, unless and until such Consent shall have been effected or obtained to the full satisfaction of the Administrator.
(b)               Consent Defined.  The term “Consent” as used herein with respect to any Plan Action means (i) any and all listings, registrations or qualifications in respect thereof upon any securities exchange or under any Federal, state or local law, rule or regulation, (ii) any and all written agreements and representations by the grantee with respect to the disposition of shares, or with respect to any other matter, which the Administrator shall deem necessary or desirable to comply with the terms of any such listing, registration or qualification or to obtain an exemption from the requirement that any such listing, qualification or registration be made and (iii) any and all consents, clearances and approvals in respect of a Plan Action by any governmental or other regulatory bodies or any other Person.
3.3       Nonassignability; Successors
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Except as provided in Section 2.4(e), 2.5, 2.6(d) or 2.7(d), (a) no Award or right granted to any Person under the Plan or under any Award Agreement shall be assignable or transferable other than by will or by the laws of descent and distribution and (b) all rights granted under the Plan or any Award Agreement shall be exercisable during the life of the grantee only by the grantee or the grantee’s legal representative or the grantee’s permissible successors or assigns (as authorized and determined by the Administrator).  The rights, duties and obligations under the Plan and any applicable Award Agreement shall be assignable by the Company to any successor entity, including any entity acquiring all, or substantially all, of the assets of the Company.  All terms and conditions of the Plan and the applicable Award Agreements will be binding upon any permitted successors or assigns.
3.4       Taxes
(a)                Withholding.   A grantee or other Award holder under the Plan shall be required to pay, in cash, to the Company, and the Company, its Subsidiaries and Affiliates shall have the right and are hereby authorized to withhold from any Award, from any cash or other payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to such grantee or other Award holder, the amount of any applicable withholding taxes in respect of an Award, its grant, its exercise, its vesting, or any payment or transfer under an Award or under the Plan, up to the maximum statutory rates in the applicable jurisdiction with respect to the Award, as determined by the Company, and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for payment of such taxes.  Whenever shares of Common Stock or Preferred Stock are to be delivered pursuant to an Award under the Plan, with the approval of the Administrator, which the Administrator shall have sole discretion whether or not to give, the grantee may satisfy the foregoing condition by electing to have the Company withhold from delivery shares having a value equal to the amount of the applicable withholding taxes as determined in accordance with this Section 3.4(a).  Such shares shall be valued at their Fair Market Value as of the date on which the amount of tax to be withheld is determined.  Fractional share amounts shall be settled in cash.  Such a withholding election may be made with respect to all or any portion of the shares to be delivered pursuant to an Award as may be approved by the Administrator in its sole discretion.
(b)               Liability for Taxes.  Grantees and holders of Awards are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with Awards (including, without limitation, any taxes arising under Sections 409A and 457A of the Code) and the Company shall not have any obligation to indemnify or otherwise hold any such Person harmless from any or all of such taxes.  The Administrator shall have the discretion to organize any deferral program, to require deferral election forms, and to grant or, notwithstanding anything to the contrary in the Plan or any Award Agreement, to unilaterally modify any Award in a manner that (i) conforms with the requirements of Sections 409A and 457A of the Code (to the extent applicable), (ii) voids any participant election to the extent it would violate Section 409A or 457A of the Code (to the extent applicable) and (iii) for any distribution event or election that could be expected to violate Section 409A of the Code, make the distribution only upon the earliest of the first to occur of a "permissible distribution event" within the meaning of Section 409A of the Code or a distribution event that the participant elects in accordance with Section 409A of the Code, all in such a way so as to retain, to the maximum extent possible, the originally intended economic and tax benefits under the Award.  The
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Administrator shall have the sole discretion to interpret the requirements of the Code, including, without limitation, Sections 409A and 457A, for purposes of the Plan and all Awards.
3.5       Change in Control
(a)                Change in Control Defined.  Unless otherwise specifically set forth in the applicable Award Agreement, for purposes of the Plan, “Change in Control” shall mean the occurrence of any of the following:
(i)         any “person” (as defined in Section 13(d)(3) of the 1934 Act), company or other entity acquires “beneficial ownership” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of twenty-five percent (25%) or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company; provided, however, that no Change in Control shall have occurred in the event of such an acquisition by (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary or Affiliate, (C) any company or other entity owned, directly or indirectly, by the holders of the voting stock ordinarily entitled to elect directors of the Company in substantially the same proportions as their ownership of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such acquisition, (D) Mrs. Semiramis Paliou or any entity that she directly or indirectly “controls” (as defined in Rule 12b-2 under the 1934 Act), or (E) Diana Shipping Inc. or to any of its Affiliates or successors;
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(ii)        the sale of all or substantially all the Company's assets in one or more related transactions to any “person” (as defined in Section 13(d)(3) of the 1934 Act), company or other entity; provided, however, that no Change in Control shall have occurred in the event of such a sale (A) to a Subsidiary which does not involve a material change in the equity holdings of the Company, (B) to an entity (the “Acquiring Entity”) which has acquired all or substantially all the Company’s assets if, immediately following such sale, 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity) is beneficially owned by the holders of the voting stock ordinarily entitled to elect directors of the Company immediately prior to such sale in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such sale or (C) to Mrs. Semiramis Paliou or any entity that she directly or indirectly “controls” (as defined in Rule 12b-2 under the 1934 Act) or (D) Diana Shipping Inc. or to any of its Affiliates or successors;
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(iii)       any merger, consolidation, reorganization or similar event of the Company or any Subsidiary; provided, however, that no Change in Control shall have occurred in the event 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity) is beneficially owned by the holders of the voting stock ordinarily entitled to elect directors of the Company immediately prior to such event in substantially the same
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proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such event;
(iv)       the approval by the Company’s stockholders of a plan of complete liquidation or dissolution of the Company; or
(v)        during any period of 12 consecutive calendar months, individuals:
(A)      who were directors of the Company on the first day of such period, or
(B)      whose election or nomination for election to the Board was recommended or approved by at least a majority of the directors then still in office who were directors of the Company on the first day of such period, or whose election or nomination for election were so approved,
shall cease to constitute a majority of the Board.
Notwithstanding the foregoing, unless otherwise specifically set forth in the applicable Award Agreement, (1) in no event shall a Change in Control be deemed to have occurred in connection with an initial listing of Common Stock, and (2) for each Award subject to Section 409A of the Code, a Change in Control shall be deemed to have occurred under this Plan with respect to such Award only if a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A of the Code, provided  that such limitation shall apply to such Award only to the extent necessary to avoid adverse tax effects under Section 409A of the Code.
(b)Effect of a Change in Control.  Unless the Administrator specifically provides otherwise in an Award Agreement, upon the occurrence of a Change in Control:
(i)any Award then outstanding shall become fully vested and any forfeiture provisions thereon imposed pursuant to the Plan and the applicable Award Agreement shall lapse and any Award in the form of an option or stock appreciation right shall be immediately exercisable;
(ii)to the extent permitted by law and not otherwise limited by the terms of the Plan, the Administrator may amend any Award Agreement in such manner as it deems appropriate; and
(iii)a grantee who incurs a termination of employment or consultancy/service relationship for any reason, other than a termination “for Cause”, concurrent with or within one year following the Change in Control may exercise any outstanding option or stock appreciation right, but only to the extent that the grantee was entitled to exercise the Award on the date of his or her termination of employment or consultancy/service relationship, until the earlier of (A) the original expiration date of the Award and (B) the later of (x) the date provided for under the terms of Section 2.4 without
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reference to this Section 3.5(b)(iii) and (y) the first anniversary of the grantee’s termination of employment or consultancy/service relationship.
(c)                Miscellaneous.  Whenever deemed appropriate by the Administrator, any action referred to in paragraph (b)(ii) of this Section 3.5 may be made conditional upon the consummation of the applicable Change in Control transaction.
3.6       Operation and Conduct of Business
Nothing in the Plan or any Award Agreement shall be construed as limiting or preventing the Company, any Subsidiary or any Affiliate from taking any action with respect to the operation and conduct of its business that it deems appropriate or in its best interests, including any or all adjustments, recapitalizations, reorganizations, exchanges or other changes in the capital structure of the Company, any Subsidiary or any Affiliate, any merger or consolidation of the Company, any Subsidiary or any Affiliate, any issuance of Company shares or other securities or subscription rights, any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or other securities or rights thereof, any dissolution or liquidation of the Company, any Subsidiary or any Affiliate, any sale or transfer of all or any part of the assets or business of the Company, any Subsidiary or any Affiliate, or any other corporate act or proceeding, whether of a similar character or otherwise.
3.7       No Rights to Awards
No Key Person or other Person shall have any claim to be granted any Award under the Plan.
3.8       Right of Discharge Reserved; Service Relationship
(a)Nothing in the Plan or in any Award Agreement shall confer upon any grantee the right to continue his or her employment with the Company, any Subsidiary or any Affiliate, his or her consultancy/service relationship with the Company, any Subsidiary or any Affiliate, or his or her position as an officer or director of the Company, any Subsidiary or any Affiliate, or affect any right that the Company, any Subsidiary or any Affiliate may have to terminate such employment or consultancy/service relationship.
(b)For the avoidance of doubt, for purposes of the Plan, reference to (i) a service relationship shall include service as a director or officer and (ii) a termination of a service relationship shall include a removal or resignation as a director or officer.
3.9       Non-Uniform Determinations
The Administrator’s determinations and the treatment of Key Persons and grantees and their beneficiaries under the Plan need not be uniform and may be made and determined by the Administrator selectively among Persons who receive, or who are eligible to receive, Awards under the Plan (whether or not such Persons are similarly situated).  Without limiting the generality of the foregoing, the Administrator shall be entitled, among other things, to make non-uniform and selective determinations, and to enter into non-uniform and selective Award Agreements, as to (a) the Persons to receive Awards under the Plan, (b) the types of Awards
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granted under the Plan, (c) the number of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards and (d) the terms and conditions of Awards.
3.10     Other Payments or Awards
Nothing contained in the Plan shall be deemed in any way to limit or restrict the Company or any Subsidiary from making any award or payment to any Person under any other plan, arrangement or understanding, whether now existing or hereafter in effect.
3.11     Headings
Any section, subsection, paragraph or other subdivision headings contained herein are for the purpose of convenience only and are not intended to expand, limit or otherwise define the contents of such section, subsection, paragraph or subdivision.
3.12     Effective Date and Term of Plan
(a)                Adoption; Stockholder Approval.  The Plan was adopted by the Board on November 8, 2021 and amended and restated on March 23, 2022.  The Board may, but need not, make the granting of any Awards under the Plan subject to the approval of the Company’s stockholders.
(b)               Termination of Plan.  The Board may terminate the Plan at any time.  All Awards made under the Plan prior to its termination shall remain in effect until such Awards have been satisfied or terminated in accordance with the terms and provisions of the Plan and the applicable Award Agreements.  No Awards may be granted under the Plan following the tenth anniversary of the date on which the Plan was adopted by the Board (i.e., November 8, 2031).
3.13     Restriction on Issuance of Stock Pursuant to Awards
The Company shall not permit any shares of Common Stock or Preferred Stock to be issued pursuant to Awards granted under the Plan unless such shares of Common Stock or Preferred Stock are fully paid and non-assessable under applicable law.  Notwithstanding anything to the contrary in the Plan or any Award Agreement, at the time of the exercise of any Award, at the time of vesting of any Award, at the time of payment of shares of Common Stock or Preferred Stock in exchange for, or in cancellation of, any Award, or at the time of grant of any unrestricted shares under the Plan, the Company and the Administrator may, if either shall deem it necessary or advisable for any reason, require the holder of an Award (a) to represent in writing to the Company that it is the Award holder’s then-intention to acquire the shares with respect to which the Award is granted for investment and not with a view to the distribution thereof or (b) to postpone the date of exercise until such time as the Company has available for delivery to the Award holder a prospectus meeting the requirements of all applicable securities laws; and no shares shall be issued or transferred in connection with any Award unless and until all legal requirements applicable to the issuance or transfer of such shares have been complied with to the satisfaction of the Company and the Administrator.  The Company and the Administrator shall have the right to condition any issuance of shares to any Award holder
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hereunder on such Person’s undertaking in writing to comply with such restrictions on the subsequent transfer of such shares as the Company or the Administrator shall deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof, and all share certificates delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Company or the Administrator may deem advisable under the Plan, the applicable Award Agreement or the rules, regulations and other requirements of the SEC, any stock exchange upon which such shares are listed, and any applicable securities or other laws, and certificates representing such shares may contain a legend to reflect any such restrictions.  The Administrator may refuse to issue or transfer any shares or other consideration under an Award if it determines that the issuance or transfer of such shares or other consideration might violate any applicable law or regulation or entitle the Company to recover the same under Section 16(b) of the 1934 Act, and any payment tendered to the Company by a grantee or other Award holder in connection with the exercise of such Award shall be promptly refunded to the relevant grantee or other Award holder.  Without limiting the generality of the foregoing, no Award granted under the Plan shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Administrator has determined that any such offer, if made, would be in compliance with all applicable requirements of any applicable securities laws.
3.14     Requirement of Notification of Election Under Section 83(b) of the Code
If an Award recipient, in connection with the acquisition of Company shares under the Plan, makes an election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Section 83(b) of the Code), the grantee shall notify the Administrator of such election within ten days of filing notice of the election with the U.S. Internal Revenue Service, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code.
3.15     Severability
If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to the applicable laws or, if it cannot be construed or deemed amended without, in the determination of the Administrator, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
3.16     Sections 409A and 457A
To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Sections 409A and 457A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder.  Notwithstanding any provision of the Plan or any applicable Award Agreement to the contrary, in the event that the Administrator determines that any Award may be subject to Section 409A or 457A of the Code, the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or
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adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (i) exempt the Plan and Award from Sections 409A and 457A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (ii) comply with the requirements of Sections 409A and 457A of the Code and related Department of Treasury guidance and thereby avoid the application of penalty taxes under Sections 409A and 457A of the Code, all in such a way so as to retain, to the maximum extent possible, the originally intended economic and tax benefits under the Award.
3.17     Forfeiture; Clawback
The Administrator may, in its sole discretion, specify in the applicable Award Agreement that any realized gain with respect to options or stock appreciation rights and any realized value with respect to other Awards shall be subject to forfeiture or clawback, in the event of (a) a grantee’s breach of any non-competition, non-solicitation, confidentiality or other restrictive covenants with respect to the Company, any Subsidiary or any Affiliate, (b) a grantee’s breach of any employment or consulting agreement with the Company, any Subsidiary or any Affiliate, (c) a grantee’s termination of employment or consultancy/service relationship for Cause or (d) a financial restatement that reduces the amount of compensation under the Plan previously awarded to a grantee that would have been earned had results been properly reported.
3.18     No Trust or Fund Created
Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company, any Subsidiary or any Affiliate and an Award recipient or any other Person.  To the extent that any Person acquires a right to receive payments from the Company, any Subsidiary or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company, Subsidiary or Affiliate.
3.19     No Fractional Shares
No fractional shares shall be issued or delivered pursuant to the Plan or any Award, and the Administrator shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional shares or whether such fractional shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.
3.20     Governing Law
The Plan will be construed and administered in accordance with the laws of the State of New York, without giving effect to principles of conflict of laws.

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