Document:

Exhibit
10.5

 

ASSET
REPRESENTATIONS REVIEW AGREEMENT

 

among

 

HONDA
AUTO RECEIVABLES 2021-2 OWNER TRUST,

as Issuer,

 

AMERICAN
HONDA FINANCE CORPORATION,

as Sponsor and Servicer

 

and

 

CLAYTON
FIXED INCOME SERVICES LLC,

 

as
Asset Representations Reviewer

 

Dated
as of May 26, 2021

    

     

    

TABLE OF CONTENTS

 

	 	 	 	 	Page
	ARTICLE I 	USAGE AND DEFINITIONS	1
	 	Section 1.1.	 	Usage and Definitions	1
	 	Section 1.2.	 	Additional Definitions	2
	ARTICLE II 	ENGAGEMENT OF ASSET REPRESENTATIONS REVIEWER	2
	 	Section 2.1.	 	Engagement; Acceptance	2
	 	Section 2.2.	 	Confirmation of Scope	2
	ARTICLE III 	ASSET REPRESENTATIONS REVIEW PROCESS	3
	 	Section 3.1.	 	Review Notices	3
	 	Section 3.2.	 	Identification of Subject Receivables	3
	 	Section 3.3.	 	Review Materials	3
	 	Section 3.4.	 	Performance of Reviews	3
	 	Section 3.5.	 	Review Reports	4
	 	Section 3.6.	 	Limitations on Review Obligations	5
	ARTICLE IV 	ASSET REPRESENTATIONS REVIEWER	5
	 	Section 4.1.	 	Representations and Warranties	5
	 	Section 4.2.	 	Covenants	6
	 	Section 4.3.	 	Fees, Expenses and Indemnities	7
	 	Section 4.4.	 	Limitation on Liability	7
	 	Section 4.5.	 	Indemnification by Asset Representations Reviewer	8
	 	Section 4.6.	 	Indemnification of Asset Representations Reviewer	8
	 	Section 4.7.	 	Inspections of Asset Representations Reviewer	9
	 	Section 4.8.	 	Delegation of Obligations	9
	 	Section 4.9.	 	Confidential Information	9
	 	Section 4.10.	 	Personally Identifiable Information	11
	ARTICLE V 	RESIGNATION AND REMOVAL; SUCCESSOR ASSET REPRESENTATIONS
REVIEWER	13
	 	Section 5.1.	 	Eligibility Requirements for Asset Representations Reviewer	13
	 	Section 5.2.	 	Resignation and Removal of Asset Representations Reviewer	13
	 	Section 5.3.	 	Successor Asset Representations Reviewer	13
	 	Section 5.4.	 	Merger, Consolidation or Succession	14

    i

     

    

TABLE OF CONTENTS

(continued)

 

	 	 	 	 	Page
	ARTICLE VI 	OTHER AGREEMENTS	14
	 	Section 6.1.	 	Independence of Asset Representations Reviewer	14
	 	Section 6.2.	 	No Petition	14
	 	Section 6.3.	 	Limitation of Liability of Owner Trustee	15
	 	Section 6.4.	 	Termination of Agreement	15
	ARTICLE VII 	MISCELLANEOUS PROVISIONS	15
	 	Section 7.1.	 	Amendments	15
	 	Section 7.2.	 	Assignment; Benefit of Agreement; Third Party Beneficiaries	15
	 	Section 7.3.	 	Notices	16
	 	Section 7.4.	 	Governing Law; Submission to Jurisdiction; Waiver of Jury Trial	16
	 	Section 7.5.	 	No Waiver; Remedies	17
	 	Section 7.6.	 	Severability	17
	 	Section 7.7.	 	Headings	17
	 	Section 7.8.	 	Counterparts; Electronic Transmission	17

	Schedule A	Representations and Warranties, Review Materials and Tests	 

    ii

     

    

ASSET
REPRESENTATIONS REVIEW AGREEMENT, dated as of May 26, 2021 (this “Agreement”), among HONDA AUTO RECEIVABLES
2021-2 OWNER TRUST, a Delaware statutory trust, as Issuer (the “Issuer”), AMERICAN HONDA FINANCE CORPORATION,
a California Corporation (“AHFC”), as Sponsor and Servicer, and CLAYTON FIXED INCOME SERVICES LLC, a Delaware
limited liability company, as Asset Representations Reviewer (the “Asset Representations Reviewer”).

 

BACKGROUND

 

WHEREAS,
in the regular course of its business, AHFC acquires certain motor vehicle retail installment sale contracts secured by new and
used automobiles (including light-duty trucks) from motor vehicle dealers.

 

WHEREAS,
in connection with a securitization transaction sponsored by AHFC, AHFC sold a pool of Receivables consisting of retail installment
sale contracts to American Honda Receivables, LLC (the “Depositor”), who sold them to the Issuer.

 

WHEREAS,
the Issuer has granted a security interest in the pool of Receivables to the Indenture Trustee, for the benefit of the Holders
of Notes, as security for the Notes issued by the Issuer under the Indenture.

 

WHEREAS,
the Issuer desires to engage the Asset Representations Reviewer to perform reviews of certain Receivables for compliance with
the representations and warranties made by AHFC about the Receivables in the pool.

 

NOW,
THEREFORE, in consideration of the foregoing, other good and valuable consideration, and the mutual terms and conditions contained
herein, the parties hereto agree as follows.

 

ARTICLE
I

USAGE AND DEFINITIONS

 

Section
1.1.            Usage and Definitions. (a) Except as otherwise specified
herein or if the context may otherwise require, capitalized terms not defined in this Agreement shall have the respective meanings
assigned such terms set forth in Appendix A to the Sale and Servicing Agreement, dated as of the date hereof (the “Sale
and Servicing Agreement”), by and among the Depositor, as seller, AHFC, as servicer, RPA seller and sponsor, and Honda
Auto Receivables 2021-2 Owner Trust, as issuer.

 

(b)         
With respect to all terms in this Agreement, the singular includes the plural and the plural the singular; words importing any
gender include the other genders; references to “writing” include printing, typing, lithography and other means of
reproducing words in a visible form; references to agreements and other contractual instruments include all subsequent amendments,
amendments and restatements, and supplements thereto or changes therein entered into in accordance with their respective terms
and not prohibited by this Agreement; references to Persons include their permitted successors and assigns; references to laws
include their amendments and supplements, the rules and regulations thereunder and any successors thereto; the term “including”
means “including without limitation;” and the term “or” is not exclusive.

    

     

    

Section
1.2.            Additional Definitions. The following terms have
the meanings given below:

 

“Asset
Review” means the performance by the Asset Representations Reviewer of the testing procedures for each Test and each
Subject Receivable according to Section 3.4.

 

“Confidential
Information” has the meaning stated in Section 4.9(b).

 

“Information
Recipients” has the meaning stated in Section 4.9(a).

 

“Issuer
PII” has the meaning stated in Section 4.10(a).

 

“Personally
Identifiable Information” or “PII” has the meaning stated in Section 4.10(a).

 

“Review
Fee” has the meaning stated in Section 4.3(b).

 

“Review
Materials” means, for an Asset Review and a Subject Receivable, the documents and other materials for each Test listed
under “Review Materials” in Schedule A.

 

“Review
Report” means, for an Asset Review, the report of the Asset Representations Reviewer prepared according to Section
3.5.

 

“Test”
has the meaning stated in Section 3.4(a).

 

“Test
Complete” has the meaning stated in Section 3.4(c).

 

“Test
Fail” has the meaning stated in Section 3.4(a).

 

“Test
Incomplete” has the meaning stated in Section 3.4(a).

 

“Test
Pass” has the meaning stated in Section 3.4(a).

 

ARTICLE
II

ENGAGEMENT OF ASSET REPRESENTATIONS REVIEWER

 

Section
2.1.            Engagement; Acceptance. The Issuer engages Clayton
Fixed Income Services LLC to act as the Asset Representations Reviewer for the Issuer. Clayton Fixed Income Services LLC accepts
the engagement and agrees to perform the obligations of the Asset Representations Reviewer on the terms in this Agreement.

 

Section
2.2.            Confirmation of Scope. The parties confirm that
the Asset Representations Reviewer is not responsible for determining whether noncompliance with the representations or warranties
constitutes a breach of the Basic Documents.

    2

     

    

ARTICLE
III

ASSET REPRESENTATIONS REVIEW PROCESS

 

Section
3.1.            Review Notices. On receipt of a review notice from
the Indenture Trustee in accordance with Section 7.05 of the Indenture, the Asset Representations Reviewer will start an Asset
Review. The Asset Representations Reviewer will have no obligation to start an Asset Review until a review notice is received.

 

Section
3.2.            Identification of Subject Receivables. Within ten
(10) Business Days after receipt of a review notice, the Servicer will deliver to the Asset Representations Reviewer a list of
the Subject Receivables.

 

Section
3.3.            Review Materials.

 

(a)         
Access to Review Materials. The Servicer will give the Asset Representations Reviewer access to the Review Materials for
all of the Subject Receivables within sixty (60) calendar days after receipt of the review notice in one or more of the following
ways in the Servicer’s reasonable discretion: (i) by electronic posting of Review Materials to a password-protected website
to which the Asset Representations Reviewer has access, (ii) by providing originals or photocopies of documents relating to the
Subject Receivables at one of the properties of the Servicer or (iii) in another manner agreed by the Servicer and the Asset Representations
Reviewer. The Servicer may redact or remove PII from the Review Materials so long as all information in the Review Materials necessary
for the Asset Representations Reviewer to complete the Asset Review remains intact and unchanged.

 

(b)         
Missing or Insufficient Review Materials. The Asset Representations Reviewer will review the Review Materials to determine
if any Review Materials are missing or insufficient for the Asset Representations Reviewer to perform any Test. If the Asset Representations
Reviewer reasonably determines that any of the Review Materials are missing or insufficient for the Asset Representations Reviewer
to perform any Test, the Asset Representations Reviewer will notify the Servicer promptly, and in any event no less than twenty
(20) calendar days before completing the Review, and the Servicer will use reasonable efforts to provide the Asset Representations
Reviewer access to such missing Review Materials or other documents or information to correct the insufficiency within fifteen
(15) calendar days. If the missing or insufficient Review Materials have not been provided by the Servicer within sixty (60) calendar
days, the parties agree that the Subject Receivable will have a Test Incomplete for the related Test(s) and the Review Report
will indicate the reason for the Test Incomplete.

 

Section
3.4.            Performance of Reviews.

 

(a)         
Test Procedures. For an Asset Review, the Asset Representations Reviewer will perform for each Subject Receivable the procedures
listed under “Tests” in Schedule A for each representation and warranty (each, a “Test”),
using the Review Materials listed for each such Test in Schedule A. For each Test and Subject Receivable, the Asset Representations
Reviewer will determine in its reasonable judgment if the Test has been satisfied (a “Test Pass”), or if the
Test has not been satisfied (a “Test Fail”), or if the Test could not be concluded as a result of missing or
incomplete Review Materials (a “Test Incomplete”). The Asset Representations Reviewer will use such determination
for all Subject Receivables that are subject to the same Test.

    3

     

    

(b)         
Review Period. The Asset Representations Reviewer will complete the Review of all of the Subject Receivables within sixty
(60) calendar days after receiving access to the Review Materials under Section 3.3(a). However, if missing or additional
Review Materials are provided to the Asset Representations Reviewer under Section 3.3(b), the review period will be extended
for an additional thirty (30) calendar days.

 

(c)         
Completion of Review for Certain Subject Receivables. Following the delivery of the list of the Subject Receivables and
before the delivery of the Review Report by the Asset Representations Reviewer, the Servicer may notify the Asset Representations
Reviewer if a Subject Receivable is paid in full by the Obligor or purchased from the Issuer by the Sponsor, the Depositor or
the Servicer according to the applicable Basic Document. On receipt of notice, the Asset Representations Reviewer will immediately
terminate all Tests of such Receivables and the Review of such Receivables will be considered complete (a “Test Complete”).
In this case, the Review Report will indicate a Test Complete for the Receivables and the related reason.

 

(d)         
Previously Reviewed Receivable: Duplicative Tests. If any Subject Receivable was included in a prior Asset Review, the
Asset Representations Reviewer will not perform the same Tests on it, but will include the results of the previous Tests in the
Review Report for the current Asset Review.

 

(e)         
Duplicative Tests. If the same Test is required for more than one representation or warranty listed on Schedule A,
the Asset Representations Reviewer will only perform the Test once for each Review Receivable but will report the results of the
Test for each applicable representation or warranty on the Review Report.

 

(f)         
Termination of Review. If an Asset Review is in process and the Notes will be paid in full on the next Distribution Date,
the Servicer will notify the Asset Representations Reviewer and the Indenture Trustee no less than ten (10) calendar days before
that Distribution Date. On receipt of notice, the Asset Representations Reviewer will terminate the Asset Review immediately and
will have no obligation to deliver a Review Report.

 

Section
3.5.            Review Reports. (a) Within ten (10) calendar days
after the end of the Asset Review period under Section 3.4(b), the Asset Representations Reviewer will deliver to the Issuer,
the Sponsor, the Servicer and the Indenture Trustee a Review Report indicating for each Subject Receivable whether there was a
Test Pass or a Test Fail for each Test, or whether the Subject Receivable was a Test Complete and the related reason. The Review
Report will contain a summary of the findings and conclusions of the Asset Representations Reviewer with respect to the Asset
Review to be included in the Issuer’s Form 10-D report for the Collection Period in which the Review Report is received.
The Asset Representations Reviewer will ensure that the Review Report does not contain any Issuer PII. On the reasonable request
of the Servicer or the Indenture Trustee, acting solely on behalf of the Noteholders, the Asset Representations Reviewer will
provide additional details on the Test results.

 

(b)         
Questions About Review. The Asset Representations Reviewer will make appropriate personnel available to respond in writing
to written questions or requests for clarification of any Review Report from the Servicer or the Indenture Trustee, acting solely
on behalf of the Noteholders, until the earlier of (i) payment in full of the Notes and (ii) one year after the delivery of the
Review Report. The Asset Representations Reviewer will have no obligation to respond to questions or requests for clarification
from Noteholders or any Person other than the Servicer or the Indenture Trustee, acting solely on behalf of the Noteholders, and
will direct such Persons to submit written requests to the Servicer.

    4

     

    

Section
3.6.            Limitations on Review Obligations.

 

(a)         
Review Process Limitations. The Asset Representations Reviewer will have no obligation:

 

(i)           
to determine whether a Delinquency Trigger has occurred or whether the required percentage of Noteholders has voted to direct
an Asset Review under the Indenture, and may rely on the information in any review notice delivered by the Indenture Trustee;

 

(ii)          
to determine which Receivables are subject to an Asset Review, and may rely on the lists of Subject Receivables provided by the
Servicer;

 

(iii)         
to obtain or confirm the validity of the Review Materials and no liability for any errors in the Review Materials and may rely
on the accuracy and completeness of the Review Materials;

 

(iv)         
to obtain missing or insufficient Review Materials from any party or any other source; or

 

(v)          
to take any action or cause any other party to take any action under any of the Basic Documents or otherwise to enforce any remedies
against any Person for breaches of representations or warranties about the Subject Receivables.

 

ARTICLE
IV

ASSET REPRESENTATIONS REVIEWER

 

Section
4.1.            Representations and Warranties. The Asset Representations
Reviewer represents and warrants to the Issuer as of the Closing Date:

 

(a)         
Organization and Qualification. The Asset Representations Reviewer is duly organized and validly existing as a limited
liability company in good standing under the laws of the State of Delaware. The Asset Representations Reviewer is qualified as
a foreign limited liability company in good standing and has obtained all necessary licenses and approvals in all jurisdictions
in which the ownership or lease of its properties or the conduct of its activities requires the qualification, license or approval,
unless the failure to obtain the qualifications, licenses or approvals would not reasonably be expected to have a material adverse
effect on the Asset Representations Reviewer’s ability to perform its obligations under this Agreement.

 

(b)         
Power, Authority and Enforceability. The Asset Representations Reviewer has the power and authority to execute, deliver
and perform its obligations under this Agreement. The Asset Representations Reviewer has authorized the execution, delivery and
performance of this Agreement. This Agreement is the legal, valid and binding obligation of the Asset Representations Reviewer
enforceable against the Asset Representations Reviewer, except as may be limited by insolvency, bankruptcy, reorganization or
other laws relating to the enforcement of creditors’ rights or by general equitable principles.

    5

     

    

(c)          
No Conflicts and No Violation. The completion of the transactions contemplated by this Agreement and the performance of
the Asset Representations Reviewer’s obligations under this Agreement will not (A) conflict with, or be a breach or default
under, any indenture, loan agreement, guarantee or other agreement or instrument under which the Asset Representations Reviewer
is a debtor or guarantor, (B) result in the creation or imposition of any Lien on any of the properties or assets of the Asset
Representations Reviewer under the terms of any indenture, loan agreement, guarantee or other agreement or instrument, (C) violate
the organizational documents of the Asset Representations Reviewer or (D) violate any law or any order, rule or regulation of
a federal or State court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over
the Asset Representations Reviewer or its properties that applies to the Asset Representations Reviewer, which, in each case,
would reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform
its obligations under this Agreement.

 

(d)          
No Proceedings. There are no proceedings or investigations pending or, to the knowledge of the Asset Representations Reviewer,
threatened in writing before a federal or State court, regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Asset Representations Reviewer or its properties (A) asserting the invalidity of this Agreement,
(B) seeking to prevent the completion of the transactions contemplated by this Agreement or (C) seeking any determination or ruling
that would reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform
its obligations under, or the validity or enforceability of, this Agreement.

 

(e)          
Eligibility. The Asset Representations Reviewer meets the eligibility requirements in Section 5.1 and will notify
the Issuer and the Servicer promptly if it no longer meets, or reasonably expects that it will no longer meet, the eligibility
requirements in Section 5.1.

 

Section
4.2.            Covenants. The Asset Representations Reviewer covenants
and agrees that:

 

(a)          
Eligibility. It will notify the Issuer and the Servicer promptly if it no longer meets the eligibility requirements in
Section 5.1.

 

(b)          
Review Systems; Personnel. It will maintain business process management and/or other systems necessary to ensure that it
can perform each Test and, on execution of this Agreement, will load each Test into these systems. The Asset Representations Reviewer
will ensure that these systems allow for each Subject Receivable and the related Review Materials to be individually tracked and
stored as contemplated by this Agreement. The Asset Representations Reviewer will maintain adequate staff that is properly trained
to conduct Asset Reviews as required by this Agreement.

 

(c)          
Maintenance of Review Materials. It will maintain copies of any Review Materials, Review Reports and other documents relating
to an Asset Review, including internal correspondence and work papers, for a period of two years after the termination of this
Agreement or repayment of the Notes in full, whichever comes first.

    6

     

    

Section
4.3.            Fees, Expenses and Indemnities.

 

(a)          
Annual Fee. The Sponsor will pay the Asset Representations Reviewer, as compensation for agreeing to act as the Asset Representations
Reviewer under this Agreement, an annual fee equal to $5,000. The annual fee will be paid as agreed in Section 4.3(d) by
the Sponsor until this Agreement is terminated; provided, that in the year in which all Notes are paid in full, the annual
fee shall be reduced pro rata by an amount equal to the days of the year in which the Notes are no longer outstanding.

 

(b)          
Review Fee. Following the completion of an Asset Review and the delivery to the Indenture Trustee, the Sponsor and the
Servicer of the Review Report, or the termination of an Asset Review according to Section 3.4(e), and the delivery to the
Sponsor of a detailed invoice, the Asset Representations Reviewer will be entitled to a fee of up to $250 for each Account containing
a Subject Receivable (the “Review Fee”). However, no Review Fee will be charged for any Tests that were performed
in a prior Asset Representations Review or for any Asset Representations Review in which no Tests were completed prior to the
Asset Representations Reviewer being notified of a termination of the Asset Representations Review in accordance with Section
3.4(e). The Sponsor will pay the Review Fee to the Asset Representations Reviewer in accordance with the terms of Section
4.3(d) of this Agreement. If an Asset Review is terminated according to Section 3.4(e), the Asset Representations Reviewer
must submit its invoice for the Review Fee for the terminated Asset Review no later than five Business Days before the final Payment
Date to be reimbursed no later than the final Payment Date.

 

(c)          
Reimbursement of Travel Expenses. If the Servicer provides access to the Review Materials at one of its properties, the
Sponsor will reimburse the Asset Representations Reviewer for its reasonable travel expenses incurred in connection with the Asset
Review upon receipt of a detailed invoice.

 

(d)          
Payment of Fees and Indemnities. The Asset Representations Reviewer shall submit reasonably detailed invoices to the Sponsor
for any amounts owed to it under this Agreement. To the extent not paid by the Sponsor within sixty (60) calendar days following
the receipt of a detailed invoice, the fees provided for in this Section 4.3 and the indemnities provided for in Section
4.6(a) shall be paid by the Issuer pursuant to Section 4.06(c) of the Sale and Servicing Agreement; provided, that
prior to any such payment pursuant to the Sale and Servicing Agreement, the Asset Representations Reviewer shall notify the Sponsor
in writing that such payments have been outstanding for at least sixty (60) calendar days. For the avoidance of doubt, to the
extent that such owed amounts are not paid in full by the Sponsor or any other party, upon receipt of a detailed invoice, the
Asset Representations Reviewer shall be entitled to payment by the Sponsor of incurred but otherwise unpaid amounts.

 

Section
4.4.            Limitation on Liability. The Asset Representations
Reviewer will not be liable to any Person for any action taken, or not taken, in good faith under this Agreement or for errors
in judgment. However, the Asset Representations Reviewer will be liable for its willful misconduct, bad faith, breach of this
Agreement or negligence in performing its obligations under this Agreement. In no event will the Asset Representations Reviewer
be liable for special, indirect or consequential losses or damages (including lost profit), even if the Asset Representations
Reviewer has been advised of the likelihood of the loss or damage and regardless of the form of action.

    7

     

    

Section
4.5.            Indemnification by Asset Representations Reviewer.
The Asset Representations Reviewer will indemnify each of the Issuer, the Depositor, the Servicer, the Sponsor, the Owner Trustee
and the Indenture Trustee (each, an “Indemnified Party”) and their respective directors, officers, employees
and agents for all costs, expenses, losses, damages and liabilities (including any reasonable legal fees and expenses incurred
by an Indemnified Party in connection with the enforcement of any indemnification or other obligation of the Asset Representations
Reviewer) resulting from (a) the willful misconduct, bad faith or negligence of the Asset Representations Reviewer in performing
its obligations under this Agreement, (b) the Asset Representations Reviewer’s failure to comply with the requirements of
applicable federal, state or local laws and regulations in the performance of its duties hereunder or (c) the Asset Representations
Reviewer’s breach of any of its representations, warranties, covenants or other obligations in this Agreement. The Asset
Representations Reviewer’s obligations under this Section 4.5 will survive the termination of this Agreement, the
termination of the Issuer and the permitted resignation or removal of the Asset Representations Reviewer.

 

Section
4.6.            Indemnification of Asset Representations Reviewer.

 

(a)         
Indemnification. The Sponsor will indemnify the Asset Representations Reviewer and its officers, directors, employees and
agents (each, an “Indemnified Person”), for all costs, expenses, losses, damages and liabilities resulting
from the performance of the Asset Representations Reviewer’s obligations under this Agreement (including the costs and expenses
of defending itself against any loss, damage or liability), but excluding any cost, expense, loss, damage or liability resulting
from (i) the Asset Representations Reviewer’s willful misconduct, bad faith or negligence, (ii) the Asset Representations
Reviewer’s failure to comply with the requirements of applicable federal, state and local laws and regulations in the performance
of its duties hereunder or (iii) the Asset Representations Reviewer’s breach of any of its representations, warranties,
covenants or other obligations in this Agreement.

 

(b)         
Proceedings. Promptly on receipt by an Indemnified Person of notice of a Proceeding against it, the Indemnified Person
will, if a claim is to be made under Section 4.6(a), notify the Sponsor of the Proceeding. The Sponsor may participate
in and assume the defense and settlement of a Proceeding at its expense. If the Sponsor notifies the Indemnified Person of its
intention to assume the defense of the Proceeding with counsel reasonably satisfactory to the Indemnified Person, and the Sponsor
will not be liable for legal expenses of counsel to the Indemnified Person unless there is a conflict between the interests of
the Sponsor, and an Indemnified Person. If there is a conflict, the Sponsor will pay for the reasonable fees and expenses of separate
counsel to the Indemnified Person. No settlement of a Proceeding may be made without the approval of the Sponsor and the Indemnified
Person, which approval will not be unreasonably withheld.

    8

     

    

(c)          
Survival of Obligations. The Issuer’s obligations under this Section 4.6 will survive the permitted resignation
or removal of the Asset Representations Reviewer and the termination of this Agreement.

 

(d)         
Repayment. If the Sponsor makes any payment under this Section 4.6 and the Indemnified Person later collects any
of the amounts for which the payments were made to it from others, the Indemnified Person will promptly repay the amounts to the
Sponsor.

 

Section
4.7.            Inspections of Asset Representations Reviewer. The
Asset Representations Reviewer agrees that, with reasonable prior notice not more than once during any year, it will permit authorized
representatives of the Issuer, the Servicer or the Sponsor, during the Asset Representations Reviewer’s normal business
hours, to examine and review the books of account, records, reports and other documents and materials of the Asset Representations
Reviewer relating to (a) the performance of the Asset Representations Reviewer’s obligations under this Agreement, (b) payments
of fees and expenses of the Asset Representations Reviewer for its performance and (c) a claim made by the Asset Representations
Reviewer under this Agreement. In addition, the Asset Representations Reviewer will permit the Issuer’s, the Servicer’s
or the Sponsor’s representatives to make copies and extracts of any of those documents and to discuss them with the Asset
Representations Reviewer’s officers and employees. Each of the Issuer, the Servicer and the Sponsor will, and will cause
its authorized representatives to, hold in confidence any proprietary confidential information of the Asset Representations Reviewer
except if disclosure may be required by law or if the Issuer, the Servicer or the Sponsor reasonably determines that it is required
to make the disclosure under this Agreement or the other Basic Documents. Except as described in Section 4.2(c), the Asset
Representations Reviewer will maintain all relevant books, records, reports and other documents and materials for a period of
at least two years after the termination of its obligations under this Agreement.

 

Section
4.8.            Delegation of Obligations. The Asset Representations
Reviewer may not delegate or subcontract its obligations under this Agreement to any Person without the consent of the parties
to this Agreement.

 

Section
4.9.            Confidential Information.

 

(a)          
Treatment. The Asset Representations Reviewer agrees to hold and treat Confidential Information given to it under this
Agreement in confidence and under the terms and conditions of this Section 4.9, and will implement and maintain safeguards
to further assure the confidentiality of the Confidential Information. The Confidential Information will not, without the prior
consent of the Issuer, the Sponsor and the Servicer, be disclosed or used by the Asset Representations Reviewer, or its officers,
directors, employees, agents, representatives or affiliates, including legal counsel (collectively, the “Information
Recipients”) other than for the purposes of performing Asset Reviews of Subject Receivables or performing its obligations
under this Agreement. The Asset Representations Reviewer agrees that it will not, and will cause its Affiliates to not (i) purchase
or sell securities issued by AHFC or its Affiliates or special purpose entities on the basis of Confidential Information or (ii)
use the Confidential Information for the preparation of research reports, newsletters or other publications or similar communications.

    9

     

    

(b)         
Definition. “Confidential Information” means oral, written and electronic materials (irrespective of
its source or form of communication) furnished before, on or after the date of this Agreement to the Asset Representations Reviewer
for the purposes contemplated by this Agreement, including:

 

(i)           
lists of Subject Receivables and any related Review Materials;

 

(ii)          
origination and servicing guidelines, policies and procedures and form contracts; and

 

(iii)         
notes, analyses, compilations, studies or other documents or records prepared by the Sponsor or the Servicer, which contain information
supplied by or on behalf of the Sponsor or the Servicer or their representatives.

 

However,
Confidential Information will not include information that (A) is or becomes generally available to the public other than as a
result of disclosure by the Information Recipients, (B) was available to, or becomes available to, the Information Recipients
on a non-confidential basis from a Person or entity other than the Issuer, the Sponsor or the Servicer before its disclosure to
the Information Recipients who, to the knowledge of the Information Recipient is not bound by a confidentiality agreement with
the Issuer, the Sponsor or the Servicer and is not prohibited from transmitting the information to the Information Recipients,
(C) is independently developed by the Information Recipients without the use of the Confidential Information, as shown by the
Information Recipients’ files and records or other evidence in the Information Recipients’ possession or (D) the Issuer,
the Sponsor or the Servicer provides permission to the applicable Information Recipients to release.

 

(c)         
Protection. The Asset Representations Reviewer will use reasonable measures to protect the secrecy of and avoid disclosure
and unauthorized use of Confidential Information, including those measures that it takes to protect its own confidential information
and not less than a reasonable standard of care. The Asset Representations Reviewer acknowledges that Personally Identifiable
Information is also subject to the additional requirements in Section 4.9.

 

(d)         
Disclosure. If the Asset Representations Reviewer is required by applicable law, regulation, rule or order issued by an
administrative, governmental, regulatory or judicial authority to disclose part of the Confidential Information, it may disclose
the Confidential Information. However, before a required disclosure, the Asset Representations Reviewer, if permitted by law,
regulation, rule or order, will use its reasonable efforts to provide the Issuer, the Sponsor and the Servicer with notice of
the requirement and will cooperate, at the Sponsor’s expense, in the Issuer’s and the Sponsor’s pursuit of a
proper protective order or other relief for the disclosure of the Confidential Information. If the Issuer or the Sponsor is unable
to obtain a protective order or other proper remedy by the date that the information is required to be disclosed, the Asset Representations
Reviewer will disclose only that part of the Confidential Information that it is advised by its legal counsel it is legally required
to disclose.

 

(e)         
Responsibility for Information Recipients. The Asset Representations Reviewer will be responsible for a breach of this
Section 4.9 by its Information Recipients.

    10

     

    

(f)          
Violation. The Asset Representations Reviewer agrees that a violation of this Agreement may cause irreparable injury to
the Issuer, the Sponsor and the Servicer and the Issuer, the Sponsor and the Servicer may seek injunctive relief in addition to
legal remedies. If an action is initiated by the Issuer or the Servicer to enforce this Section 4.9, the prevailing party
will be reimbursed for its fees and expenses, including reasonable attorney’s fees, incurred for the enforcement.

 

Section
4.10.        Personally Identifiable Information.

 

(a)         
Definitions. “Personally Identifiable Information” or “PII” means information in
any format about an identifiable individual, including, name, address, phone number, e-mail address, account number(s), identification
number(s), vehicle identification number(s) or “VIN(s)”, any other actual or assigned attribute associated with or
identifiable to an individual and any information that when used separately or in combination with other information could identify
an individual. “Issuer PII” means PII furnished by the Issuer, the Servicer or their Affiliates to the Asset
Representations Reviewer and PII developed or otherwise collected or acquired by the Asset Representations Reviewer in performing
its obligations under this Agreement.

 

(b)         
Use of Issuer PII. The Issuer does not grant the Asset Representations Reviewer any rights to Issuer PII. None of the Issuer,
the Sponsor or the Servicer intend to share, provide or supply any Issuer PII to the Asset Representations Reviewer. However,
if the Asset Representations Reviewer receives any Issuer PII, the Asset Representations Reviewer will promptly (i) notify the
Servicer and (ii) delete and destroy such Issuer PII in accordance with Section 4.10(c). Notwithstanding the foregoing,
the Asset Representations Reviewer must comply with all laws applicable to PII, Issuer PII and the Asset Representations Reviewer’s
business, including any legally required codes of conduct, including those relating to privacy, security and data protection.
The Asset Representations Reviewer will implement and maintain reasonable and appropriate practices, procedures and systems, including
administrative, technical and physical safeguards designed to (i) protect the security, confidentiality and integrity of Issuer
PII, (ii) ensure against anticipated threats or hazards to the security or integrity of Issuer PII, (iii) protect against unauthorized
access to or use of Issuer PII and (iv) otherwise comply with its obligations under this Agreement. These safeguards include a
written data security plan, employee training, information access controls, restricted disclosures, systems protections (e.g.,
intrusion protection, data storage protection and data transmission protection) and physical security measures.

 

(c)         
Additional Limitations. In addition to the use and protection requirements described in Section 4.10(b), the Asset
Representations Reviewer’s disclosure of Issuer PII is also subject to the following requirements:

 

(i)           
The Asset Representations Reviewer will not disclose Issuer PII to its personnel or allow its personnel access to Issuer PII except
(A) for the Asset Representations Reviewer personnel who require Issuer PII to perform an Asset Review, (B) with the prior consent
of the Issuer or (C) as required by applicable law. When permitted, the disclosure of or access to Issuer PII will be limited
to the specific information necessary for the individual to complete the assigned task. The Asset Representations Reviewer will
inform personnel with access to Issuer PII of the confidentiality requirements in this Agreement and train its personnel with
access to Issuer PII on the proper use and protection of Issuer PII.

    11

     

    

(ii)          
The Asset Representations Reviewer will not sell, disclose, provide or exchange Issuer PII with or to any third party without
the prior consent of the Issuer.

 

(d)         
Notice of Breach. The Asset Representations Reviewer will notify the Issuer promptly in the event of an actual or reasonably
suspected security breach, unauthorized access, misappropriation or other compromise of the security, confidentiality or integrity
of Issuer PII and, where applicable, immediately take action to prevent any further breach.

 

(e)         
Return or Disposal of Issuer PII. Except where return or disposal is prohibited by applicable law, promptly on the earlier
of the completion of the Asset Review or the request of the Issuer, all Issuer PII in any medium in the Asset Representations
Reviewer’s possession or under its control will be (i) destroyed in a manner that prevents its recovery or restoration or
(ii) if so directed by the Issuer, returned to the Issuer without the Asset Representations Reviewer retaining any actual or recoverable
copies, in both cases, without charge to the Issuer. Where the Asset Representations Reviewer retains Issuer PII, the Asset Representations
Reviewer will limit the Asset Representations Reviewer’s further use or disclosure of Issuer PII to that required by applicable
law.

 

(f)         
Compliance; Modification. The Asset Representations Reviewer will cooperate with and provide information to the Issuer
regarding the Asset Representations Reviewer’s compliance with this Section 4.10. The Asset Representations Reviewer
and the Issuer agree to modify this Section 4.10 as necessary from time to time for either party to comply with applicable
law.

 

(g)         
Affiliates and Third Parties. If the Asset Representations Reviewer processes the PII of the Issuer’s Affiliates
or a third party when performing an Asset Review, and if such Affiliate or third party is identified to the Asset Representations
Reviewer, such Affiliate or third party is an intended third-party beneficiary of this Section 4.10, and this Agreement
is intended to benefit the Affiliate or third party. The Affiliate or third party will be entitled to enforce the PII related
terms of this Section 4.10 against the Asset Representations Reviewer as if each were a signatory to this Agreement.

 

(h)         
Audit of Asset Representations Reviewer. The Asset Representations Reviewer will permit the Issuer and its authorized representatives
to audit the Asset Representations Reviewer’s compliance with this Agreement during the Asset Representations Reviewer’s
normal business hours on reasonable advance notice to the Asset Representations Reviewer, and not more than once during any year
unless circumstances necessitate additional audits. The Issuer agrees to make reasonable efforts to schedule any audit described
in this Section 4.10 with the inspections described in Section 4.7. The Asset Representations Reviewer will also
permit the Issuer and its authorized representatives during normal business hours on reasonable advance written notice to audit
any service providers used by the Asset Representations Reviewer with the Sponsor’s prior written consent to fulfill the
Asset Representations Reviewer’s obligations under this Agreement.

    12

     

    

ARTICLE
V

RESIGNATION AND REMOVAL;

SUCCESSOR ASSET REPRESENTATIONS REVIEWER

 

Section
5.1.            Eligibility Requirements for Asset Representations Reviewer.
The Asset Representations Reviewer must be a Person who (a) is not Affiliated with the Sponsor, the Depositor, the Servicer, the
Indenture Trustee, the Owner Trustee or any of their Affiliates and (b) was not, and is not Affiliated with a Person that was,
engaged by the Sponsor or any Underwriter to perform any due diligence on the Receivables prior to the Closing Date.

 

Section
5.2.            Resignation and Removal of Asset Representations Reviewer.

 

(a)         
No Resignation of Asset Representations Reviewer. The Asset Representations Reviewer will not resign as Asset Representations
Reviewer unless (a) the Asset Representations Reviewer no longer meets the eligibility requirements in Section 5.1 or (b)
upon determination that the performance of its duties under this Agreement is no longer permissible under applicable law. The
Asset Representations Reviewer will notify the Issuer and the Servicer of its resignation as soon as practicable after it determines
it is required to resign and stating the resignation date and including an Opinion of Counsel supporting its determination.

 

(b)        
Removal of Asset Representations Reviewer. If any of the following events occur, the Sponsor, by notice to the Asset Representations
Reviewer, may remove the Asset Representations Reviewer and terminate its rights and obligations under this Agreement:

 

(i)           
the Asset Representations Reviewer no longer meets the eligibility requirements in Section 5.1;

 

(ii)          
the Asset Representations Reviewer breaches of any of its representations, warranties, covenants or obligations in this Agreement;
or

 

(iii)         
an Insolvency Event of the Asset Representations Reviewer occurs.

 

(c)         
Notice of Resignation or Removal. The Sponsor will notify the Issuer, the Owner Trustee and the Indenture Trustee of any
resignation or removal of the Asset Representations Reviewer.

 

(d)        
Continue to Perform After Resignation or Removal. No resignation or removal of the Asset Representations Reviewer will
be effective, and the Asset Representations Reviewer will continue to perform its obligations under this Agreement, until a successor
Asset Representations Reviewer has accepted its engagement according to Section 5.3(b).

 

Section
5.3.            Successor Asset Representations Reviewer.

 

(a)         
Engagement of Successor Asset Representations Reviewer. Following the resignation or removal of the Asset Representations
Reviewer, the Sponsor will appoint a successor Asset Representations Reviewer who meets the eligibility requirements of Section
5.1.

    13

     

    

(b)         
Effectiveness of Resignation or Removal. No resignation or removal of the Asset Representations Reviewer will be effective
until the successor Asset Representations Reviewer has executed and delivered to the Issuer and the Servicer an agreement accepting
its engagement and agreeing to perform the obligations of the Asset Representations Reviewer under this Agreement or entered into
a new agreement with the Issuer on substantially the same terms as this Agreement.

 

(c)         
Transition and Expenses. If the Asset Representations Reviewer resigns or is removed, the Asset Representations Reviewer
will cooperate with the Issuer and take all actions reasonably requested to assist the Issuer in making an orderly transition
of the Asset Representations Reviewer’s rights and obligations under this Agreement to the successor Asset Representations
Reviewer. The Asset Representations Reviewer will pay the reasonable expenses (including the fees and expenses of counsel) of
transitioning the Asset Representations Reviewer’s obligations under this Agreement and preparing the successor Asset Representations
Reviewer to take on such obligations on receipt of an invoice with reasonable detail of the expenses from the Issuer or the successor
Asset Representations Reviewer.

 

Section
5.4.            Merger, Consolidation or Succession. Any Person
(a) into which the Asset Representations Reviewer is merged or consolidated, (b) resulting from any merger or consolidation to
which the Asset Representations Reviewer is a party or (c) succeeding to the business of the Asset Representations Reviewer, if
that Person meets the eligibility requirements in Section 5.1, will be the successor to the Asset Representations Reviewer
under this Agreement. Such Person will execute and deliver to the Issuer and the Servicer an agreement to assume the Asset Representations
Reviewer’s obligations under this Agreement (unless the assumption happens by operation of law).

 

ARTICLE
VI

OTHER AGREEMENTS

 

Section
6.1.            Independence of Asset Representations Reviewer.
The Asset Representations Reviewer will be an independent contractor and will not be subject to the supervision of the Issuer,
the Owner Trustee or the Indenture Trustee for the manner in which it accomplishes the performance of its obligations under this
Agreement. Unless authorized by the Issuer, the Owner Trustee, or the Indenture Trustee, respectively, the Asset Representations
Reviewer will have no authority to act for or represent the Issuer, the Owner Trustee or the Indenture Trustee and will not be
considered an agent of the Issuer, the Owner Trustee or the Indenture Trustee. None of the Issuer, the Owner Trustee or the Indenture
Trustee will be responsible for monitoring the performance of the Asset Representations Reviewer or liable to any Person for the
failure of the Asset Representations Reviewer to perform its obligations hereunder. Nothing in this Agreement will make the Asset
Representations Reviewer and any of the Issuer, the Owner Trustee or the Indenture Trustee members of any partnership, joint venture
or other separate entity or impose any liability as such on any of them.

 

Section
6.2.            No Petition. Each of the parties, by entering into
this Agreement, agrees that, before the date that is one year and one day (or, if longer, any applicable preference period) after
payment in full of (a) all securities issued by the Depositor or by a trust for which the Depositor was a depositor (including,
without limitation, the Issuer) or (b) the Notes, it will not start or pursue against, or join any other Person in starting or
pursuing against (i) the Depositor or (ii) the Issuer, respectively, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other proceedings under any bankruptcy or similar law. This Section 6.2 will survive the termination
of this Agreement.

    14

     

    

Section
6.3.            Limitation of Liability of Owner Trustee. This Agreement
has been signed on behalf of the Issuer by The Bank of New York Mellon not in its individual capacity but solely in its capacity
as Owner Trustee of the Issuer. In no event will The Bank of New York Mellon in its individual capacity be liable for the Issuer’s
obligations under this Agreement. For all purposes under this Agreement, the Owner Trustee will be subject to, and entitled to
the benefits of, the Trust Agreement.

 

Section
6.4.            Termination of Agreement. This Agreement will terminate,
except for the obligations under Section 4.5 or as otherwise stated in this Agreement, on the earlier of (a) the payment
in full of all outstanding Notes and the satisfaction and discharge of the Indenture and (b) the date the Issuer is terminated
under the Trust Agreement.

 

ARTICLE
VII

MISCELLANEOUS PROVISIONS

 

Section
7.1.            Amendments.

 

(a)         
This Agreement can be modified in a written document executed by the parties hereto without the consent of the Noteholders or
any other Person; provided, that, except with respect to amendments (i) to clarify an ambiguity, correct an error or correct or
supplement any term of this Agreement that may be defective or inconsistent with the other terms of this Agreement or to provide
for, or facilitate the acceptance of this Agreement by, a successor Asset Representations Reviewer or (ii) to convert or supplement
any provision in a manner consistent with the intent of this Agreement, either (a) such amendment shall not, as evidenced by an
opinion of counsel or officer’s certificate, materially and adversely affect the interests of the holders of any outstanding
Note or (b) the Rating Agency Condition is satisfied with respect to such amendment. With respect to any amendment for which clauses
(a) or (b) of the immediately preceding sentence cannot be satisfied, this Agreement can be amended with the consent of the Noteholders
of a majority of the Outstanding Principal Balance of the Notes of each adversely affected Series.

 

(b)         
Notice of Amendments. The Servicer will notify the Rating Agencies in advance of any amendment. Promptly after the execution
of an amendment, the Servicer will deliver a copy of the amendment to the Rating Agencies and the Indenture Trustee.

 

Section
7.2.            Assignment; Benefit of Agreement; Third Party Beneficiaries.

 

(a)         
Assignment. Except as stated in Section 5.4, this Agreement may not be assigned by the Asset Representations Reviewer
without the consent of the parties to this Agreement.

 

(b)         
Benefit of Agreement; Third-Party Beneficiaries. This Agreement is for the benefit of and will be binding on the parties
and their permitted successors and assigns. The Owner Trustee and the Indenture Trustee, for the benefit of the Noteholders, will
be third-party beneficiaries of this Agreement and entitled to enforce this Agreement against the Asset Representations Reviewer.
No other Person will have any right or obligation under this Agreement.

    15

     

    

Section
7.3.            Notices.

 

(a)         
Delivery of Notices. All notices, requests, demands, consents, waivers or other communications to or from the parties must
be in writing and will be considered given:

 

(i)           
For overnight mail, on delivery or, for a letter mailed by registered first class mail, postage prepaid, three days after deposit
in the mail;

 

(ii)          
for a fax, when receipt is confirmed by telephone, reply email or reply fax from the recipient;

 

(iii)         
for an email, when receipt is confirmed by telephone or reply email from the recipient; and

 

(iv)         
for an electronic posting to a password-protected website to which the recipient has access, on delivery (without the requirement
of confirmation of receipt) of an email to that recipient stating that the electronic posting has occurred.

 

(b)         
Notice Addresses. Any notice, request, demand, consent, waiver or other communication will be delivered or addressed to:
(i) (a) in the case of the Sponsor and the Servicer, to American Honda Finance Corporation, 1919 Torrance Blvd. 5th
Floor, Torrance, CA 90501, Attention: Treasury Capital Markets, (b) in the case of the Issuer or the Owner Trustee, to Honda Auto
Receivables 2021-2 Owner Trust, c/o The Bank of New York Mellon, 240 Greenwich Street, Floor 7 West, New York, NY 10286, Attention:
Asset Backed Securities Unit – Honda Auto Receivables 2021-2, (c) in the case of the Indenture Trustee, to U.S. Bank National
Association, 190 South LaSalle Street, 7th Floor, Chicago, Illinois 60603, Attention: Corporate Trust Services Honda
Auto Receivables 2021-2 and (d) in the case of the Asset Representations Reviewer via electronic mail to ARRNotices@clayton.com,
and to Clayton Fixed Income Services LLC, 2638 South Falkenburg Road, Riverview, FL 33578, Attention: SVP; with a copy to Covius
Services, LLC, 720 S. Colorado Blvd, Suite 200, Glendale, CO 80246, Attention: Legal Department or, (ii) as to each party, at
such other address or email as shall be designated by such party in a written notice to each other party.

 

Section
7.4.            Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.

    16

     

    

Each
of the parties hereto hereby submits to the exclusive jurisdiction of the United States District Court for the Southern District
of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. Each of the parties hereto hereby further irrevocably waives any claim
that any such courts lack jurisdiction over such party, and agrees not to plead or claim, in any legal action or proceeding with
respect to this Agreement in any of the aforesaid courts, that any such court lacks jurisdiction over such party. Each of the
parties hereto irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to
the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum.

 

Each
party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect
of any litigation directly or indirectly arising out of, under or in connection with this agreement.

 

Section
7.5.           No Waiver; Remedies. No party’s failure or
delay in exercising a power, right or remedy under this Agreement will operate as a waiver. No single or partial exercise of a
power, right or remedy will preclude any other or further exercise of the power, right or remedy or the exercise of any other
power, right or remedy. The powers, rights and remedies under this Agreement are in addition to any powers, rights and remedies
under law.

 

Section
7.6.           Severability. If a part of this Agreement is held
invalid, illegal or unenforceable, then it will be deemed severable from the remaining Agreement and will not affect the validity,
legality or enforceability of the remaining Agreement.

 

Section
7.7.           Headings. The headings in this Agreement are included
for convenience and will not affect the meaning or interpretation of this Agreement.

 

Section
7.8.           Counterparts; Electronic Transmission.

 

(a)          
This Agreement may be executed in multiple counterparts. Each counterpart will be an original and all counterparts will together
be one document. Delivery of an executed counterpart of a signature page of this Agreement by telecopy, e-mailed .pdf or any other
electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed
counterpart of this Agreement. The words “execution,” “signed,” “signature,” “delivery,”
and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated
hereby shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which
shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the
use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including
the Federal Electronic Signatures in Global and National Commerce Act or any other similar state laws based on the Uniform Electronic
Transactions Act.

    17

     

    

(b)         
The Indenture Trustee, the Owner Trustee, the Delaware Trustee and the Issuer are authorized to accept written instructions, directions,
reports, notices or other communications signed manually, by way of faxed signatures, or delivered by Electronic Transmission.
In the absence of bad faith or negligence on its part, each of the Indenture Trustee, the Owner Trustee, the Delaware Trustee
and the Issuer may conclusively rely on the fact that the Person sending instructions, directions, reports, notices or other communications
or information by Electronic Transmission is, in fact, a Person authorized to give such instructions, directions, reports, notices
or other communications or information on behalf of the party purporting to send such Electronic Transmission and, in the absence
of bad faith or negligence, shall not have any liability for any losses, liabilities, costs or expenses incurred or sustained
by any party as a result of such reliance upon or compliance with such instructions, directions, reports, notices or other communications
or information to the Indenture Trustee, the Owner Trustee, the Delaware Trustee or the Issuer, including, without limitation,
the risk of either the Indenture Trustee, the Owner Trustee, the Delaware Trustee or the Issuer acting on unauthorized instructions,
notices, reports or other communications or information, and the risk of interception and misuse by third parties.

 

[Remainder
of Page Left Blank]

    18

     

    

EXECUTED
BY:

 

	 	HONDA AUTO RECEIVABLES 2021-2
    OWNER TRUST, as Issuer
	 	 	 	 
	 	By:	The Bank of New York Mellon, not
    in its individual capacity, but solely as Owner Trustee
	 	 	 	 
	 	By:	/s/ Rita Duggan
	 	 	Name:	 Rita Duggan
	 	 	Title:	 Vice President
	 	 	 	 
	 	AMERICAN HONDA FINANCE CORPORATION,
	 	 	as Sponsor and Servicer
	 	 	 	 
	 	By:	/s/ Paul C. Honda
	 	 	Name:	Paul C. Honda
	 	 	Title:	Vice President and Assistant Secretary
	 	 	 	 
	 	CLAYTON FIXED INCOME SERVICES
    LLC,
	 	 	as Asset Representations Reviewer
	 	 	 	 
	 	By:	/s/ Susan Connally
	 	 	Name:	Susan Connally
	 	 	Title:	Vice President

 

HAROT
2021-2

ARR
Agreement

    S-1

     

    

Schedule
A

 

Representations
and Warranties, Review Materials and Tests

 

	Representations
                                         and Warranty

        	Review
                                         Materials and Tests

	(i)         Characteristics
                                         of Receivables. Each Receivable

        (a)  
        was originated by a Dealer located in the United States for the sale of the related Financed Vehicle, fully executed or
        electronically authenticated by the Obligor thereto, purchased by AHFC from such Dealer under an existing agreement with
        AHFC, assigned by such Dealer to the RPA Seller and subsequently sold by the RPA Seller to the Purchaser pursuant to the
        Receivables Purchase Agreement,

        (b)  
        has created or shall create a first priority security interest in favor of the RPA Seller in the related Financed Vehicle,
        which security interest has been assigned by the RPA Seller to the Purchaser and shall be assignable, and shall be so
        assigned, by the Purchaser to the Issuer,

        (c)  
        contains provisions that permit the repossession and sale of the Financed Vehicle upon a default under the Receivable
        by the Obligor,

        (d)  
        except as otherwise provided in this Agreement, provides, at the time of origination, for level Monthly Payments (provided
        that the first and last payments in the life of the Receivable may be different from but in no event more than two times
        the level payment) that fully amortize the Amount Financed over its original term,

        (e)  
        allows for prepayment,

        (f)   
        is not listed on the Servicer’s records as a federal, state or local governmental entity and

        (g)  
        is a retail installment sales contract.

        	Review
                                         Materials:

        (a)   
        Title documents

        (b)    Installment sales contract

        (c)   
        Receivable Files

        (d)   
        Servicer’s Records/Data file

        Tests:

        (a)    Origination

        i.     
        Review the contract and confirm that the Dealer address is a United States address.

        ii.    
        Review the contract and confirm that it was signed by the Obligor.

        iii.   
        Review the contract and confirm that AHFC (or an acceptable variation of the name) is listed as an assignee within the
        assignment section.

        iv.   
        Review the contract and confirm the Vehicle Identification Number (VIN) on the contract matches the VIN on the Certificate
        of Title or Application for Title.

        v.    
        Confirm the Dealer signed the assignment section of the contract.

        (b)    Security Interest Enforcement

        i.     
        Review the Receivable File and confirm that the security interest has not been subordinated and the Receivable maintains
        an enforceable security interest in favor of AHFC for the Financed Vehicle.

        (c)   
        Repossession

        i.     
        Review the contract and confirm that it contains language permitting the repossession and sale of the Financed Vehicle
        upon default by the Obligor.

        (d)   
        Fully Amortizing Payment Schedule

        i.     
        Review the contract and confirm that all payments are equivalent with the possible exception of the first and last payments,
        which may be two times the level payment.

        ii.    
        Review the Truth-in-Lending section of the contract and calculate the product of the Amount of Payments with the Number
        of Payments and confirm that this amount is equal to the Total of Payments.

        (e)   
        Prepayments

        i.     
        Review the contract and confirm that the terms conform to the representation.

        (f)     No governmental obligors

        i.     
        Review the contract and confirm that the Obligor does not appear to be a governmental entity and that the Servicer’s
        records do not otherwise indicate that the Obligor is a governmental entity.

        

    

     

    

	 	(g)  
        Retail installment sale contract

        i.      
        Review the contract and confirm that the contract terms conform to the representation.

        (h)  
        If (a) through (g) are confirmed, then Test Pass.

	(ii)        Compliance
    with Law.  At the time it was originated, the Receivable complied in all material respects with all requirements
    of law in effect at the time and applicable to such Receivable.	Review
                                         Materials:

        (a)  
        Installment sales contract

        (b)   AHFC’s list of approved contract forms.

        Tests:

        (a)  
        Review the contract form number and revision date and confirm that they are both on AHFC’s list of approved contract
        forms.

        (b)  
        If (a) is confirmed, then Test Pass.

        
	(iii)       Binding
    Obligation.  Each Receivable is on a form contract that includes the legal and binding payment obligation in
    writing of the related Obligor, enforceable by the holder thereof, except as enforceability may be subject to or limited by
    bankruptcy, insolvency, reorganization, moratorium, liquidation or other laws affecting the enforcement of creditors’
    rights and by general principles of equity, consumer protection laws and the Servicemembers Civil Relief Act.	Review
                                         Materials:

        (a)  
        Installment sales contract

        (b)  
        AHFC’s list of approved contract forms.

        Tests:

        (a)   Review the contract form number and revision date and confirm that they are both on AHFC’s list of approved contract
        forms.

        (b)  
        Confirm the Obligor signed the contract.

        (c)  
        If (a) and (b) are confirmed, then Test Pass.

        
	(iv)       Receivables
    in Force.  According to the Servicer’s Receivables system, the Receivable shall not have been satisfied,
    subordinated or rescinded, nor shall the Financed Vehicle have been released in whole or in part from the lien granted by
    the related Receivable on the Cutoff Date.	Review
                                         Materials:

        (a)  
        Receivable Files

        (b)  
        Title documents

        (c)   Servicer’s Records/Data file

        Tests:

        (a)  
        Confirm that there is no indication in the Servicer’s Records or Receivable Files that the Receivable was subordinated
        or rescinded.

        (b)  
        Confirm that there is no indication in the Servicer’s Records or Receivable Files that the Receivable was satisfied
        prior to the Cut-off Date.

        (c)  
        Confirm that there is no indication in the Servicer’s Records or Receivable Files that the Financed Vehicle has
        been released from the lien in whole or in part.

        (d)  
        If (a) through (c) are confirmed, then Test Pass.

        
	(v)       
    No Defenses.  To the RPA Seller’s knowledge, no right of rescission, setoff, counterclaim or defense
    has been asserted or threatened in writing by any Obligor against the Receivable.	Review
                                         Materials:

        (a)  
        Receivable Files

        (b)  
        Receivable system

        Tests:

        (a)  
        Review the Receivable Files and confirm that there is no indication the Receivable is subject to rescission, setoff, counterclaim
        or defense that would cause the Receivable to become invalid, or, if so, confirm such indications were not present as
        of the Cut-off Date.

        (b)  
        If (a) is confirmed, then Test Pass.

        
	(vi)       No
    Defaults.  Except for payment delinquencies that, as of the Cutoff Date, were not more than thirty (30) days,
    according to the accounting records of the RPA Seller, no payment default existed under the terms of any Receivable as of
    the Cutoff Date.	Review
                                         Materials:

        (a)  
        Servicer’s Records/Data file

        Tests:

        (a)  
        Confirm that there is no indication of a payment default, other than payment delinquencies of not more than thirty (30)
        days, or if so, confirm such defaults were not present as of the Cut-off Date.

        (b)  
        If (a) is confirmed, then Test Pass.

        

    

     

    

	(vii)      Insurance.  Each
    Obligor of a Receivable has been required to obtain physical damage insurance covering the related Financed Vehicle and is
    required under the terms of the related Receivable to maintain such insurance.	Review
                                         Materials:

        (a)  
        Installment sale contract

        Tests:

        (a)  
        Confirm that the contract contains language that requires the Obligor to obtain and maintain insurance against physical
        damage to the Financed Vehicle.

        (b)  
        If (a) is confirmed, then Test Pass.

        
	(viii)     Lawful
    Assignment.  The terms of the Receivable do not limit the right of the owner of the Receivable to sell the Receivable.	Review
                                         Materials:

        (a)  
        Installment sale contract

        Tests:

        (a)  
        Review the contract and confirm that there is no language present that limits the rights of the owner of the Receivable
        to sell the Receivable.

        (b)  
        If (a) is confirmed, then Test Pass.

        
	(ix)       Chattel
    Paper.  The Receivable is either “tangible chattel paper” or “electronic chattel paper”
    within the meaning of the applicable UCC and (A) if the Receivable is tangible chattel paper, there is only one executed or
    otherwise authenticated original of such Receivable or (B) if the Receivable is electronic chattel paper, there is only one
    authoritative copy of the record or records (as defined in the UCC) comprising such Receivable.  If the Receivable
    constitutes electronic chattel paper, AHFC has “control” of such electronic chattel paper within the meaning of
    Section 9-105 of the applicable UCC.	Review
                                         Materials:

        (a)  
        Installment sale contract

        (b)  
        AHFC’s list of approved contract forms

        (c)  
        Title documents

        Tests:

        (a)  
        Review the contract form number and revision date and confirm that it is on AHFC’s list of approved contract forms.

        (b)  
        Confirm there is a signature under the each of the Obligor’s and seller’s name within the contract.

        (c)  
        Confirm there is no indication the contract was voided or is otherwise not the original authenticated copy.

        (d)  
        If (a) through (c) are confirmed, then Test Pass.

        
	(x)        Security
    Interest.  The RPA Seller has, or the Servicer has, started procedures that will result in the RPA Seller having
    a perfected, first priority security interest in the Financed Vehicle within then (10) days of the Closing Date, which security
    interest was validly created and is assignable by the RPA Seller to the Purchaser.	Review
                                         Materials:

        (a)  
        Installment sales contract

        (b)   Title documents

        Tests:

        (a)  
        Confirm the Title documents report AHFC (or an acceptable variation of the name) as the first lien holder.

        (b)  
        Confirm that the Obligor name on the contract matches the name on the title documents.

        (c)  
        Confirm that the Vehicle Identification Number (VIN) on the contract matches the vehicle identification number as reported
        on the title documents.

        (d)  
        If (a) through (c) are confirmed, then Test Pass.

        
	(xi)       Individual
                                         Characteristics. Each Receivable has the following individual characteristics as
                                         of the Cutoff Date:

        (a)  
        is not listed on the Servicer’s records as the subject of a pending bankruptcy proceeding;

        (b)  
        had an original maturity of not greater than 72 payments;

        (c)  
        provides for the payment of a finance charge or shall yield interest calculated on the basis of a Contract Rate of at
        least 0.50%;

        (d)  
        has a Scheduled Payment that is not more than thirty (30) days past due;

        	Review
                                         Materials:

        (a)  
        Installment sales contract

        (b)  
        Servicer’s Records/Data file

        (c)  
        Receivable Files

        Tests:

        (a)  
        Bankruptcy

        i.     
        Review the Servicer’s records and confirm that the Obligor was not the subject of a bankruptcy proceeding as of
        the Cutoff Date.

        (b)  
        Original Maturity

        i.     
        Confirm that the number of payments as stated within the contract does not exceed 72 payments.

        

    

     

    

	
        (e)  
        the Financed Vehicle to which the Receivable relates is a new or used Honda or Acura automobile or light-duty truck; and

        (f)  
        the Obligor under each Receivable had a billing address in the United States or its territories or possessions, according
        to the records of the Servicer.
	(c)   Contract Rate

        i.     
        Confirm that the Contract Rate stated within the contract is greater than or equal to 0.50% as of the Cutoff Date.

        (d)   Past Due

        i.     
        Review the Servicer’s records and confirm that the Receivable was not more than thirty (30) days past due as of
        the Cutoff Date.

        (e)   New or Used Honda or Acura

        i.     
        Confirm the Financed Vehicle is a new or used automobile or light-duty truck as stated within the New/Used section of
        the contract.

        (f)    Billing Address

        i.     
        Confirm the Receivable Files indicate that the Obligor’s address is located within the United States or its territories
        or possessions as of the Cutoff Date.

        (g)   If (a) through (f) are confirmed, then Test Pass.Exhibit 4.1 Form of Representative’s Warrant

 

Exhibit 4.1

 

Form of Representative’s Warrant Agreement

 

THE REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE, OR BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE, PUT, OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION OF THIS PURCHASE WARRANT OR THE UNDERLYING SECURITIES FOR A PERIOD OF ONE HUNDRED EIGHTY (180) DAYS IMMEDIATELY FOLLOWING THE COMMENCEMENT DATE (DEFINED BELOW) EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE, OR BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE, PUT, OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION OF, THIS PURCHASE WARRANT OR THE UNDERLYING SECURITIES FOR A PERIOD OF ONE HUNDRED EIGHTY (180) DAYS IMMEDIATELY FOLLOWING THE COMMENCEMENT DATE TO ANYONE OTHER THAN (I) MAXIM PARTNERS LLC OR ANY UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF MAXIM PARTNERS LLC, OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.

 

THIS PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO [________________] [DATE THAT IS 180 DAYS FROM THE COMMENCEMENT DATE OF THE OFFERING]. VOID AFTER 5:00 P.M., EASTERN TIME, [___________________] [DATE THAT IS FIVE (5) YEARS FROM THE COMMENCEMENT DATE OF THE OFFERING].

 

WARRANT TO PURCHASE COMMON STOCK

 

ZIVO BIOSCIENCE, INC.

 

	Warrant Shares: [______]1

	Initial Issuance Date: [_______], 2021 

	  

	Initial Exercise Date: [_______], 2021 

  

THIS WARRANT TO PURCHASE COMMON STOCK (the “Warrant”) certifies that, for value received, [Maxim Partners, LLC][_____], or its assigns (the “Holder”), is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after ________, 2021 [DATE THAT IS 180 DAYS FROM THE COMMENCEMENT DATE] (the “Initial Exercise Date”) and, in accordance with FINRA Rule 5110(g)(8)(A), prior to at 5:00 p.m. (New York time) on [______], 2026, the date that is five (5) years following the Commencement Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from ZIVO BIOSCIENCE, INC., a Nevada corporation (the “Company”), up to [______]1 shares of common stock, par value $0.001 per share, of the Company (the “Warrant Shares”), as subject to adjustment hereunder. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

  

Section 1.Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings indicated in this Section 1:  

  

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act. 

  

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided that banks shall not be deemed to be authorized or obligated to be closed due to a “shelter in place,” “non-essential employee” or similar closure of physical branch locations at the direction of any governmental authority if such banks’ electronic funds transfer systems (including for wire transfers) are open for use by customers on such day. 

  

“Commission” means the United States Securities and Exchange Commission. 

 

“Commencement Date” means the date that is one hundred eighty (180) days immediately following the commencement of sales of the securities issued in the Offering.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 

_______________

1Equal to 8% of the Closing Shares included in the Closing Units sold in the Offering (excluding the Closing Warrants and any Securities issued pursuant to the over-allotment option). 

1

 

 

“Offering” shall have the meaning ascribed to such term in Section 2.1(c) of the Underwriting Agreement.

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 

  

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. 

  

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 

  

“Trading Day” means a day on which the New York Stock Exchange is open for trading. 

  

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing). 

  

“Underwriting Agreement” means the underwriting agreement for the Offering, dated [____], 2021, by and between the Company and Maxim Group LLC, as representative of the underwriters set forth therein. 

 

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

 

2

 

 

Section 2.Exercise.  

  

a)Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise Form annexed hereto. Within two (2) Trading Days following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within five (5) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within two (2) Business Days of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.  

  

b)Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $[__]2, subject to adjustment hereunder (the “Exercise Price”).  

  

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

  

(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; 

  

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

  

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

  

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

  

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

  

_______________

2110% of the public offering per Unit price sold in the Offering. 

3

 

 

d)Mechanics of Exercise.  

  

i.Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by its transfer agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder, or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 and, in either case, the Warrant Shares have been sold by the Holder prior to the Warrant Share Delivery Date (as defined below), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is two (2) Trading Days after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). If the Warrant Shares can be delivered via DWAC, the transfer agent shall have received from the Company, at the expense of the Company, any legal opinions or other documentation required by it to deliver such Warrant Shares without legend (subject to receipt by the Company of reasonable back up documentation from the Holder, including with respect to affiliate status) and, if applicable and requested by the Company prior to the Warrant Share Delivery Date, the transfer agent shall have received from the Holder a confirmation of sale of the Warrant Shares (provided the requirement of the Holder to provide a confirmation as to the sale of Warrant Shares shall not be applicable to the issuance of unlegended Warrant Shares upon a cashless exercise of this Warrant if the Warrant Shares are then eligible for resale pursuant to Rule 144(b)(1)). The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the second Trading Day following the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after the second Trading Day following such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.  

 

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

  

iii.Rescission Rights. If the Company fails to cause its transfer agent to deliver to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise; provided, however, that the Holder shall be required to return any Warrant Shares or Common Stock subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to the Company for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).  

  

4

 

 

iv.Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause its transfer agent to transmit to the Holder the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.  

  

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

  

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

  

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

  

viii.Signature. This Section 2 and the exercise form attached hereto set forth the totality of the procedures required of the Holder in order to exercise this Purchase Warrant. Without limiting the preceding sentences, no ink-original exercise form shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any exercise form be required in order to exercise this Purchase Warrant. No additional legal opinion, other information or instructions shall be required of the Holder to exercise this Purchase Warrant. The Company shall honor exercises of this Purchase Warrant and shall deliver Shares underlying this Purchase Warrant in accordance with the terms, conditions and time periods set forth herein.  

5

 

 

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

 

6

 

 

Section 3.Certain Adjustments.  

  

a)Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. For the purposes of clarification, the Exercise Price of this Warrant will not be adjusted in the event that the Company or any Subsidiary thereof, as applicable, sells or grants any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents, at an effective price per share less than the Exercise Price then in effect.  

  

b)[RESERVED]  

  

c)Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).  

 

d)Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash dividends) or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.  

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e)Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable by holders of Common Stock as a result of such Fundamental Transaction for each share of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.  

 

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

  

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g)Notice to Holder.  

  

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

  

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

  

Section 4.Transfer of Warrant.  

  

a)Transferability. Pursuant to FINRA Rule 5110(e)(1)(A), neither this Warrant nor any Warrant Shares issued upon exercise of this Warrant shall be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the Commencement Date or commencement of sales of the offering pursuant to which this Warrant is being issued, except the transfer of any security:  

  

i.by operation of law or by reason of reorganization of the Company;  

  

ii.to any FINRA member firm participating in the offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period;  

  

iii.if the aggregate amount of securities of the Company held by the Holder or related person do not exceed 1% of the securities being offered;  

  

iv.that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10% of the equity in the fund; or  

  

v.the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period.  

  

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Subject to the foregoing restriction, any applicable securities laws and the conditions set forth in Section 4(d), this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued. 

  

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

  

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

  

d)Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.  

  

Section 5.Registration Rights.  

  

a)Demand Registration 

 

 i.Grant of Right. The Company, upon written demand (a “Demand Notice”) of the Holder(s) of at least 51% of the Warrants and/or the underlying Warrant Shares (“Majority Holders”), agrees to register (a “Demand Registration”), on two occasions, all or any portion of the Warrant Shares underlying the Warrants (collectively, the “Registrable Securities”). Upon such Demand Registration, the Company will file a registration statement with the Commission covering the Registrable Securities within thirty (30) days after receipt of a Demand Notice and use its commercially reasonable efforts to have the registration statement declared effective promptly thereafter, subject to compliance with review by the Commission; provided, however, that the Company shall not be required to comply with a Demand Notice if the Company has filed a registration statement with respect to which the Holder is entitled to piggyback registration rights pursuant to Section 5(b) hereof and either: (i) the Holder has elected to participate in the offering covered by such registration statement, or (ii) if such registration statement relates to an underwritten primary offering of securities of the Company, until the offering covered by such registration statement has been withdrawn or until thirty (30) days after such offering is consummated. Either Demand Registration may be made at any time beginning on the Initial Exercise Date and expiring on the fifth anniversary of the Commencement Date in accordance with FINRA Rule 5110(g)(8)(C). The Company covenants and agrees to give written notice of its receipt of any Demand Notice by any Holder(s) to all other registered Holders of the Warrants and/or the Registrable Securities within ten (10) days after the date of the receipt of any such Demand Notice. 

 

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ii.Terms. The Company shall bear all fees and expenses attendant to the first Demand Registration of the Registrable Securities pursuant to Section 5(a), but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. The Holders shall bear all fees and expenses attendant to the second Demand Registration of the Registrable Securities pursuant to Section 5(a), including any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. A registration will not count as a Demand Registration until the registration statement filed with the Commission with respect to such Demand Registration has been declared effective and the Company has complied with all of its obligations under hereunder with respect thereto; provided, however, that if, after such registration statement has been declared effective, the offering of the Registrable Securities pursuant to a Demand Registration is interfered with by any stop order or injunction of the Commission or any other governmental agency or court, the registration statement with respect to such Demand Registration will be deemed not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) the Holder thereafter elect to continue the offering. The Company agrees to use its commercially reasonable efforts to cause the filing required herein to become effective promptly and to qualify or register the Registrable Securities in such States as are reasonably requested by the Holder(s); provided, however, that in no event shall the Company be required to register the Registrable Securities in a State in which such registration would cause: (i) the Company to be obligated to register or license to do business in such State or submit to general service of process in such State, or (ii) the principal stockholders of the Company to be obligated to escrow their shares of capital stock of the Company. The Company shall cause any registration statement filed pursuant to the Demand Registration right granted under Section 5(a) to remain effective for a period of at least twelve (12) consecutive months after the date that the Holders of the Registrable Securities covered by such registration statement are first given the opportunity to sell all of such securities. The Holders shall only use the prospectuses provided by the Company to sell the Warrant Shares covered by such registration statement, and will immediately cease to use any prospectus furnished by the Company if the Company advises the Holder that such prospectus may no longer be used due to a material misstatement or omission. The Holder shall be entitled to a maximum of two (2) Demand Registrations under this Section 5(a)(ii) on only two (2) occasions described herein and such Demand Registration rights shall terminate on the fifth (5th) anniversary of the Commencement Date in accordance with FINRA Rule 5110(g)(8)(C). 

 

b)“Piggy-Back” Registration.  

  

i.Grant of Right. The Holder shall have the right, for a period of no more than three (3) years from the Initial Exercise Date in compliance with applicable FINRA Rule rules, to include the Registrable Securities as part of any other registration of securities filed by the Company (other than in connection with a transaction contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to Form S-8 or any equivalent form); provided, however, that if, solely in connection with any primary underwritten public offering for the account of the Company, the managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of Shares which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such Registration Statement only such limited portion of the Registrable Securities with respect to which the Holder requested inclusion hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made pro rata among the Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought to be included by such Holders; provided, however, that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities.  

 

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ii.Terms. The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 5(b)(i) hereof, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Registrable Securities with not less than thirty (30) days written notice prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each registration statement filed by the Company during the three (3) year period following the Initial Exercise Date until such time as all of the Registrable Securities have been sold by the Holder. The holders of the Registrable Securities shall exercise the “piggy-back” rights provided for herein by giving written notice within ten (10) days of the receipt of the Company’s notice of its intention to file a registration statement. Except as otherwise provided in this Warrant, there shall be no limit on the number of times the Holder may request registration under this Section 5(b)(ii); provided, however, that such registration rights shall terminate on the third (3rd) anniversary of the Commencement Date in accordance with FINRA Rule 5110(g)(8)(D).  

  

c)General Terms  

  

i.Indemnification. The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the Underwriters contained in Section 6.1 of the Underwriting Agreement. The Holder(s) of the Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section 6.2 of the Underwriting Agreement pursuant to which the Underwriters have agreed to indemnify the Company.  

 

ii Exercise of Warrants. Nothing contained in this Warrant shall be construed as requiring the Holder(s) to exercise their Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.  

  

iii.Documents Delivered to Holders. The Company shall furnish to each Holder participating in any of the foregoing offerings and to each underwriter of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an opinion of counsel to the Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold comfort” letter dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter dated the date of the closing under the underwriting agreement) signed by the independent registered public accounting firm which has issued a report on the Company’s financial statements included in such registration statement, in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in underwritten public offerings of securities. The Company shall also deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with applicable securities laws or rules of FINRA. Such investigation shall include access to books, records and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable times as any such Holder shall reasonably request.  

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iv.Underwriting Agreement. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any Holders whose Registrable Securities are being registered pursuant to this Section 5, which managing underwriter shall be reasonably satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder and such managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be parties to any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option, require that any or all the representations, warranties and covenants of the Company to or for the benefit of such underwriters shall also be made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or agreements with the Company or the underwriters except as they may relate to such Holders, their Warrant Shares and their intended methods of distribution.  

  

v.Documents to be Delivered by Holder(s). Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.  

 

vi.Damages. Should the registration or the effectiveness thereof required by Sections 5(a) hereof be delayed by the Company or the Company otherwise fails to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief available to the Holder(s), be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the necessity of posting bond or other security.  

  

Section 6.Miscellaneous.  

  

a)No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).  

  

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

  

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

  

d)Authorized Shares.  

  

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

  

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

 

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

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

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

  

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

14

 

 

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

 

 

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

  

(Signature Page Follows) 

 

15

 

 

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

  

	ZIVO BIOSCIENCE, INC. 

	  

	  

	  

	  

	By: 

	  

	Name:

	 

	Title:

	 

  

16

 

 

NOTICE OF EXERCISE

 

TO: ZIVO BIOSCIENCE, INC.  

  

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

  

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

  

[   ] in lawful money of the United States; or  

  

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

  

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

  

	  

	  

  

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to: 

  

	  

	  

	  

	  

	  

	  

	  

	  

	  

	  

 

(4)Accredited Investor. If the Warrant is being exercised via cash exercise, the undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended  

 

[SIGNATURE OF HOLDER]

 

	Name of Investing Entity: 

	  

	Signature of Authorized Signatory of Investing Entity: 

	  

	Name of Authorized Signatory: 

	  

	Title of Authorized Signatory: 

	  

	Date: 

	  

  

17

 

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to 

  

	 

	whose address is

	  

	 

	 

	 

	 

	 

	 

	 

	  

	 

	Dated: _____________, _______ 

 

  

	Holder’s Signature: 

	  

	  

	  

	Holder’s Address: 

	  

	  

	  

	  

	  

  

  

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant. 

  

 

18

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