Document:

Exhibit
4.8

 

FAT
BRANDS INC.

 

WARRANT
AGENCY AGREEMENT

([●],
2020)

 

This
WARRANT AGENCY AGREEMENT (this “Warrant Agreement”) dated as of [●], 2020 (the “Issuance
Date”) between FAT Brands Inc., a Delaware corporation (the “Company”), and VStock Transfer,
LLC, a California limited liability company (the “Warrant Agent”).

 

WHEREAS, pursuant
to the terms of that certain Underwriting Agreement (“Underwriting Agreement”), dated [●], 2020,
by and between the Company and ThinkEquity, a division of Fordham Financial Management, Inc., as representative of the underwriters
set forth therein, the Company is engaged in a public offering (the “Offering”) of 400,000 shares of
Series B Cumulative Preferred Stock of the Company and Warrants (the “Warrants”) to purchase 2,000,000
shares of common stock, par value $0.0001 per share (“Common Stock”), of the Company (the “Warrant
Shares”), including shares and Warrants issuable pursuant to the underwriters’ over-allotment option;

 

WHEREAS, the Company
has filed with the Securities and Exchange Commission (the “Commission”) a Registration Statement, No.
333-239032 on Form S-1 (as the same may be amended from time to time, the “Registration Statement”),
for the registration under the Securities Act of 1933, as amended (the “Securities Act”), of shares
of Series B Cumulative Preferred Stock, Warrants and Warrant Shares, and such Registration Statement was declared effective on
[●], 2020;

 

WHEREAS,
the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in accordance
with the terms set forth in this Warrant Agreement in connection with the issuance, registration, transfer, exchange and exercise
of the Warrants;

 

WHEREAS,
the Company desires to provide for the provisions of the Warrants, the terms upon which they shall be issued and exercised,
and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants;
and

 

WHEREAS,
all acts and things have been done and performed which are necessary to make the Warrants the valid, binding and legal obligations
of the Company, and to authorize the execution and delivery of this Warrant Agreement.

 

NOW,
THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:

 

1.
Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company with respect
to the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the express
terms and conditions set forth in this Warrant Agreement (and no implied terms or conditions).

 

2.
Warrants.

 

2.1
Form of Warrants. The Warrants shall be registered securities and shall be initially evidenced by a global Warrant certificate
(“Global Certificate”) in the form of Annex A to this Warrant Agreement, which shall be deposited
on behalf of the Company with a custodian for The Depository Trust Company (“DTC”) and registered in
the name of Cede & Co., a nominee of DTC. If DTC subsequently ceases to make its settlement system available for the Warrants,
the Company may instruct the Warrant Agent regarding making arrangements for book-entry settlement. In the event that the Warrants
are not eligible for, or it is no longer necessary to have the Warrants available in, registration in the name of Cede & Co.,
a nominee of DTC, the Company may instruct the Warrant Agent to provide written instructions to DTC to deliver to the Warrant
Agent for cancellation the Global Certificate, and the Company shall instruct the Warrant Agent to deliver to each Holder (as
defined below) separate certificates evidencing Warrants (“Definitive Certificates” and, together with
the Global Certificate, “Warrant Certificates”), in the form of Annex C to this Warrant Agreement. The
Warrants represented by the Global Certificate are referred to as “Global Warrants”.

 

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2.2.
Issuance and Registration of Warrants.

 

2.2.1.
Warrant Register. The Warrant Agent shall maintain books (“Warrant Register”) for the registration
of original issuance and the registration of transfer of the Warrants. Any Person in whose name ownership of a beneficial interest
in the Warrants evidenced by a Global Certificate is recorded in the records maintained by DTC or its nominee shall be deemed
the “beneficial owner” thereof, provided that all such beneficial interests shall be held through a Participant (as
defined below), which shall be the registered holder of such Warrants.

 

2.2.2.
Issuance of Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue the Global Certificate and
deliver the Warrants in the DTC settlement system in accordance with written instructions delivered to the Warrant Agent by the
Company. Ownership of beneficial interests in the Warrants shall be shown on, and the transfer of such ownership shall be effected
through, records maintained (i) by DTC and (ii) by institutions that have accounts with DTC (each, a “Participant”),
subject to a Holder’s right to elect to receive a Warrant in certificated form in the form of Annex C to this Warrant Agreement.
Any Holder desiring to elect to receive a Warrant in certificated form shall make such request in writing delivered to the Warrant
Agent pursuant to Section 2.2.8, and shall surrender to the Warrant Agent the interest of the Holder on the books of the Participant
evidencing the Warrants which are to be represented by a Definitive Certificate through the DTC settlement system. Thereupon,
the Warrant Agent shall countersign and deliver to the person entitled thereto a Warrant Certificate or Warrant Certificates,
as the case may be, as so requested.

 

2.2.3.
Beneficial Owner; Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant
Agent may deem and treat the person in whose name that Warrant shall be registered on the Warrant Register (the “Holder”)
as the absolute owner of such Warrant for purposes of any exercise thereof, and for all other purposes, and neither the Company
nor the Warrant Agent shall be affected by any notice to the contrary. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Warrant Agent or any agent of the Company or the Warrant Agent from giving effect to any written certification,
proxy or other authorization furnished by DTC governing the exercise of the rights of a holder of a beneficial interest in any
Warrant. The rights of beneficial owners in a Warrant evidenced by the Global Certificate shall be exercised by the Holder or
a Participant through the DTC system, except to the extent set forth herein or in the Global Certificate.

 

2.2.4.
Execution. The Warrant Certificates shall be executed on behalf of the Company by any authorized officer of the Company
(an “Authorized Officer”), which need not be the same authorized signatory for all of the Warrant Certificates,
either manually or by facsimile signature. The Warrant Certificates shall be countersigned by an authorized signatory of the Warrant
Agent, which need not be the same signatory for all of the Warrant Certificates, and no Warrant Certificate shall be valid for
any purpose unless so countersigned. In case any Authorized Officer of the Company that signed any of the Warrant Certificates
ceases to be an Authorized Officer of the Company before countersignature by the Warrant Agent and issuance and delivery by the
Company, such Warrant Certificates, nevertheless, may be countersigned by the Warrant Agent, issued and delivered with the same
force and effect as though the person who signed such Warrant Certificates had not ceased to be such officer of the Company; and
any Warrant Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such
Warrant Certificate, shall be an Authorized Officer of the Company authorized to sign such Warrant Certificate, although at the
date of the execution of this Warrant Agreement any such person was not such an Authorized Officer.

 

2.2.5.
Registration of Transfer. At any time at or prior to the Expiration Date (as defined below), a transfer of any Warrants
may be registered and any Warrant Certificate or Warrant Certificates may be split up, combined or exchanged for another Warrant
Certificate or Warrant Certificates evidencing the same number of Warrants as the Warrant Certificate or Warrant Certificates
surrendered. Any Holder desiring to register the transfer of Warrants or to split up, combine or exchange any Warrant Certificate
shall make such request in writing delivered to the Warrant Agent, and shall surrender to the Warrant Agent the Warrant Certificate
or Warrant Certificates evidencing the Warrants the transfer of which is to be registered or that is or are to be split up, combined
or exchanged. Thereupon, the Warrant Agent shall countersign and deliver to the person entitled thereto a Warrant Certificate
or Warrant Certificates, as the case may be, as so requested. The Warrant Agent may require reasonable and customary payment,
by the Holder requesting a registration of transfer of Warrants or a split-up, combination or exchange of a Warrant Certificate
(but, for purposes of clarity, not upon the exercise of the Warrants and issuance of Warrant Shares to the Holder), of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with such registration of transfer, split-up, combination
or exchange, together with reimbursement to the Warrant Agent of all reasonable expenses incidental thereto.

 

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2.2.6.
Loss, Theft and Mutilation of Warrant Certificates. Upon receipt by the Company and the Warrant Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Warrant Certificate, and, in case of loss, theft or destruction,
of indemnity or security in customary form and amount,  and reimbursement
to the Company and the Warrant Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant Agent and
cancellation of the Warrant Certificate if mutilated, the Warrant Agent shall, on behalf of the Company, countersign and deliver
a new Warrant Certificate of like tenor to the Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated.
The Warrant Agent may charge the Holder an administrative fee for processing the replacement of lost Warrant Certificates, which
shall be charged only once in instances where a single surety bond obtained covers multiple certificates. The Warrant Agent may
receive compensation from the surety companies or surety bond agents for administrative services provided to them.

 

2.2.7.
Proxies. The Holder of a Warrant may grant proxies or otherwise authorize any person, including the Participants and beneficial
holders that may own interests through the Participants, to take any action that a Holder is entitled to take under this Agreement
or the Warrants; provided, however, that at all times that Warrants are evidenced by a Global Certificate, exercise
of those Warrants shall be effected on their behalf by Participants through DTC in accordance the procedures administered by DTC.

 

2.2.8.
Warrant Certificate Request. A Holder has the right to elect at any time or from time to time a Warrant Exchange (as defined
below) pursuant to a Warrant Certificate Request Notice (as defined below). Upon written notice by a Holder to the Warrant Agent
for the exchange of some or all of such Holder’s Global Warrants for a Definitive Certificate evidencing the same number
of Warrants, which request shall be in the form attached hereto as Annex E (a “Warrant Certificate Request Notice”
and the date of delivery of such Warrant Certificate Request Notice by the Holder, the “Warrant Certificate Request Notice
Date” and the deemed surrender upon delivery by the Holder of a number of Global Warrants for the same number of Warrants
evidenced by a Definitive Certificate, a “Warrant Exchange”), the Warrant Agent shall promptly effect the Warrant
Exchange and shall promptly issue and deliver to the Holder a Definitive Certificate for such number of Warrants in the name set
forth in the Warrant Certificate Request Notice. Such Definitive Certificate shall be dated the original issue date of the Warrants,
shall be manually executed by an authorized signatory of the Company, shall be in the form attached hereto as Annex C, and shall
be reasonably acceptable in all respects to such Holder. In connection with a Warrant Exchange, the Company agrees to deliver,
or to direct the Warrant Agent to deliver, the Definitive Certificate to the Holder within the earlier of (i) two (2) Trading
Days and (ii) the number of Trading Days comprising the Standard Settlement Period of the Warrant Certificate Request Notice pursuant
to the delivery instructions in the Warrant Certificate Request Notice (“Warrant Certificate Delivery Date”). If the
Company fails for any reason to deliver to the Holder the Definitive Certificate subject to the Warrant Certificate Request Notice
by the Warrant Certificate 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 evidenced by such Definitive Certificate (based on the VWAP (as defined in the Warrants) of
the Common Stock on the Warrant Certificate Request Notice Date), $10 per Business Day for each Business Day after such Warrant
Certificate Delivery Date until such Definitive Certificate is delivered or, prior to delivery of such Warrant Certificate, the
Holder rescinds such Warrant Exchange. The Company covenants and agrees that, upon the date of delivery of the Warrant Certificate
Request Notice, the Holder shall be deemed to be the holder of the Definitive Certificate and, notwithstanding anything to the
contrary set forth herein, the Definitive Certificate shall be deemed for all purposes to contain all of the terms and conditions
of the Warrants evidenced by such Warrant Certificate and the terms of this Agreement, other than Sections 3(c) and 9 herein,
shall not apply to the Warrants evidenced by the Definitive Certificate.

 

2.2.9.
For purposes of clarity, if there is a conflict between the express terms of this Warrant Agreement and the Warrant certificate
in the form of Annex C hereto with respect to terms of the Warrants, the terms of the Warrant certificate shall govern and control.

 

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3.
Terms and Exercise of Warrants.

 

3.1. Exercise Price. Each Warrant shall
entitle the Holder, subject to the provisions of the applicable Warrant Certificate and of this Warrant Agreement, to purchase
from the Company the number of shares of Common Stock stated therein, at the price of $5.00 per whole share, subject to
the subsequent adjustments provided in Section 4 hereof. The term “Exercise Price” as used in this Warrant
Agreement refers to the price per share at which shares of Common Stock may be purchased at the time a Warrant is exercised.

 

3.2.
Duration of Warrants. Warrants may be exercised only during the period (“Exercise Period”) commencing
on the earlier of (i) the one-year anniversary of the Issuance Date or (ii) the FCCG Merger, and terminating at 5:00 P.M., New
York City time (the “close of business”) on [●], 2025 (the “Expiration Date”).
Each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect
thereof under this Warrant Agreement shall cease at the close of business on the Expiration Date. For purposes of this paragraph,
the “FCCG Merger” shall mean a merger, acquisition or other business combination transaction involving
Fog Cutter Capital Group, Inc. and the Company and/or its subsidiaries.

 

3.3.
Exercise of Warrants.

 

3.3.1.
Exercise and Payment.

 

(a)
Exercise of the purchase rights represented by a Warrant may be made, in whole or in part, at any time or times during the Exercise
Period by delivery to the Company or the Warrant Agent of the Notice of Exercise in the form annexed as Annex B hereto
(the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading
Days comprising the Standard Settlement Period following the date the Holder delivers the Notice 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 3.3.6 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 a Warrant Certificate to the Company until the Holder
has purchased all of the Warrant Shares available thereunder and the Warrant has been exercised in full, in which case, the Holder
shall surrender such Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise
is delivered to the Company. Partial exercises of a Warrant resulting in purchases of a portion of the total number of Warrant
Shares available thereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in
an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of
Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of a 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
thereof.

 

Notwithstanding
the foregoing in this Section 3.3.1 a holder whose interest in a Warrant is a beneficial interest in certificate(s) representing
such Warrant held in registered form through DTC (or another established clearing corporation performing similar functions), shall
effect exercises made pursuant to this Section 3.3.1 by delivering to DTC (or such other clearing corporation, as applicable)
the appropriate instruction form for exercise, complying with the procedures to effect exercise that are required by DTC (or such
other clearing corporation, as applicable), subject to a Holder’s right to elect to receive a Warrant in certificated form
pursuant to the terms of the Warrant Agency Agreement, in which case this sentence shall not apply.

 

3.3.2.
Issuance of Warrant Shares.

 

(a)
The Warrant Agent shall, on the Trading Day following the date of exercise of any Warrant, advise the Company, the transfer agent
and registrar for the Company’s Common Stock, in respect of (i) the number of Warrant Shares indicated on the Notice of
Exercise as issuable upon such exercise with respect to such exercised Warrants, (ii) the instructions of the Holder or Participant,
as the case may be, provided to the Warrant Agent with respect to the delivery of the Warrant Shares and the number of Warrants
that remain outstanding after such exercise and (iii) such other information as the Company or such transfer agent and registrar
shall reasonably request.

 

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(b)
The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting
the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit
or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either
(A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares
by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered
in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the
Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that
is the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period after
the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”).
Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant
Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within
the earlier of (i) two (2) Trading Days of and (ii) the number of Trading Days comprising the Standard Settlement Period following
delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to
a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and
not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date
of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such
liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are
delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST
program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with
respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.

 

3.3.3.
Valid Issuance. All Warrant Shares issued by the Company upon the proper exercise of a Warrant in conformity with this
Warrant Agreement shall be validly issued, fully paid and non-assessable.

 

3.3.4.
No Fractional Exercise. No fractional Warrant Shares will be issued upon the exercise of the Warrant. If, by reason of
any adjustment made pursuant to Section 4, a Holder would be entitled, upon the exercise of such Warrant, to receive a fractional
interest in a share, the Company shall, upon such exercise, round up or down, as applicable, to the nearest whole number the number
of Warrant Shares to be issued to such Holder.

 

3.3.5
No Transfer Taxes. 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 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.

 

3.3.6
Restrictive Legend Events; Cashless Exercise Under Certain Circumstances.

 

(i)
The Company shall use its reasonable best efforts to maintain the effectiveness of the Registration Statement and the current
status of the prospectus included therein or to file and maintain the effectiveness of another registration statement and another
current prospectus covering the Warrants and the Warrant Shares at any time that the Warrants are exercisable. The Company shall
provide to the Warrant Agent and each Holder prompt written notice of any time that the Company is unable to deliver the Warrant
Shares via DTC transfer or otherwise without restrictive legend because (A) the Commission has issued a stop order with respect
to the Registration Statement, (B) the Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement,
either temporarily or permanently, (C) the Company has suspended or withdrawn the effectiveness of the Registration Statement,
either temporarily or permanently, (D) the prospectus contained in the Registration Statement is not available for the issuance
of the Warrant Shares to the Holder or (E) otherwise (each a “Restrictive Legend Event”). To the extent
that the Warrants cannot be exercised as a result of a Restrictive Legend Event or a Restrictive Legend Event occurs after a Holder
has exercised Warrants in accordance with the terms of the Warrants but prior to the delivery of the Warrant Shares, the Company
shall, at the election of the Holder, which shall be given within five (5) days of receipt of such notice of the Restrictive Legend
Event, either (A) rescind the previously submitted Election to Purchase and the Company shall return all consideration paid by
registered holder for such shares upon such rescission or (B) treat the attempted exercise as a cashless exercise as described
in paragraph (ii) below and refund the cash portion of the exercise price to the Holder.

 

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(ii)
If a Restrictive Legend Event has occurred, the Warrant may also be exercisable on a cashless basis. Notwithstanding anything
herein to the contrary, the Company shall not be required to make any cash payments or net cash settlement to the Holder in lieu
of delivery of the Warrant Shares. Upon a “cashless exercise”, the Holder shall be entitled to receive the number
of Warrant Shares equal to the quotient (if such quotient would be a positive number) obtained by dividing (A-B) (X) by
(A), where:

 

(A)
= the last VWAP immediately preceding the date of exercise giving rise to the applicable “cashless exercise”, as set
forth in the applicable Election to Purchase (to clarify, the “last VWAP” will be the last VWAP as calculated over
an entire Trading Day such that, in the event that this Warrant is exercised at a time that the Trading Market is open, the prior
Trading Day’s VWAP shall be used in this calculation

 

(B)
= the Exercise Price of the Warrant, as adjusted as set forth herein; and

 

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

 

If the Warrant Shares are issued in such a
cashless exercise, the Company acknowledges and agrees 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 Company agrees not to take any position
contrary thereto. Upon receipt of an Election to Purchase for a cashless exercise, the Warrant Agent will promptly deliver a copy
of the Election to Purchase to the Company to confirm the number of Warrant Shares issuable in connection with the cashless exercise.
The Company shall calculate and transmit to the Warrant Agent in a written notice, and the Warrant Agent shall have no duty, responsibility
or obligation under this section to calculate, the number of Warrant Shares issuable in connection with any cashless exercise.
The Warrant Agent shall be entitled to rely conclusively on any such written notice provided by the Company, and the Warrant Agent
shall not be liable for any action taken, suffered or omitted to be taken by it in accordance with such written instructions or
pursuant to this Warrant Agreement. Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant
shall be automatically exercised via cashless exercise pursuant to this Section 3.3.6.

 

3.3.7
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number
of Warrant Shares issuable in connection with any exercise, the Company shall promptly deliver to the Holder the number of Warrant
Shares that are not disputed.

 

3.3.8
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available
to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with
the provisions of Section 3.3.2(b) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such
date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage
firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder
the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares
of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company
was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving
rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant
and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded)
or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with
its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price
of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving
rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required
to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in
respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s
right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.

 

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3.3.9
Beneficial Ownership Limitation. The Company shall not effect any exercise of this Warrant, and a Holder shall not have
the right to exercise any portion of a Warrant, pursuant to Section 3 or otherwise, to the extent that after giving effect to
such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates,
and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of
the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution
Parties shall include the number of shares of Common Stock issuable upon exercise of such 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,
non-exercised portion of such Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii)
exercise or conversion of the unexercised or non-converted portion of any other securities of the Company (including, without
limitation, any other securities of the Company which would entitle the holder thereof to acquire at any time shares of Common
Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, shares of Common Stock
(“Common Stock Equivalents”)) subject to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding
sentence, for purposes of this Section 3.3.9, 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 3.3.9 applies, the determination of whether a Warrant is exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which portion of a 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 a
Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties)
and of which portion of a 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 3.3.9, in determining the number of outstanding shares of Common Stock, a
Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic
or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a
more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.
Upon the written or oral request of a Holder, the Company shall within 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 such Warrant, by the Holder
or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported.
The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance
of any Warrants, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance
of shares of Common Stock issuable upon exercise of a Warrant. The Holder, upon notice to the Company, may increase or decrease
the Beneficial Ownership Limitation provisions of this Section 3.3.9, 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 3.3.9 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 3.3.9 to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary
or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor
holder of this Warrant.

 

    	7

    	 

    

 

4.
Adjustments.

 

4.1
Adjustment upon Subdivisions or Combinations. If the Company, at any time while the Warrants are 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 the Warrants), (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 each Warrant
shall be proportionately adjusted such that the aggregate Exercise Price of such Warrant shall remain unchanged. Any adjustment
made pursuant to this Section 4.1 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.

 

4.2
Adjustment for Other Distributions. (a) Subsequent Rights Offerings. In addition to any adjustments pursuant
to Section 4.1 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 a 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).

 

(b) Extraordinary Dividends.
If the Company, at any time during the Exercise Period, shall pay a dividend in cash, securities or other assets to the holders
of Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible), other than (i)
as described in Sections 4(1), 4.2(a) or 4(3), or (ii) regular quarterly or other periodic dividends (any such non-excluded event
being referred to herein as an “Extraordinary Dividend”), then the Exercise Price shall be decreased,
effective immediately after the effective date of such Extraordinary Dividend, by the quotient of the gross amount of cash and/or
fair market value (as determined by the Company’s Board of Directors, in good faith) of all securities or other assets paid
to the holders of Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible)
in respect of such Extraordinary Dividend divided by the number of shares of Common Stock (or other shares of the Company’s
capital stock into which the Warrants are convertible) outstanding at the time of the Extraordinary Dividend, provided, that the
Exercise Price shall not be reduced below zero.

 

4.3. Fundamental Transaction. If, at
any time while the Warrants are 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 all 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 all outstanding shares of Common Stock
are 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 a 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 (without regard to any
limitation in Section 3.3.9 on the exercise of a 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 such amount of cash or any other consideration (collectively,
the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of
the number of shares of Common Stock for which a Warrant is exercisable immediately prior to such Fundamental Transaction (without
regard to any limitation in Section 3.3.9 on the exercise of a 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 a 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 the Warrants in accordance with the provisions of this Section 4.3 pursuant to written
agreements prior to or during such Fundamental Transaction. 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 the Warrants 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 the Warrants with the same effect as if
such Successor Entity had been named as the Company therein.

 

    	8

    	 

    

 

The
Company shall instruct the Warrant Agent in writing to mail by first class mail, postage prepaid, to each Holder, written notice
of the execution of any such amendment, supplement or agreement with the Successor Entity. Any supplemented or amended agreement
entered into by the successor corporation or transferee shall provide for adjustments, which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 4.3. The Warrant Agent shall have no duty, responsibility or
obligation to determine the correctness of any provisions contained in such agreement or such notice, including but not limited
to any provisions relating either to the kind or amount of securities or other property receivable upon exercise of warrants or
with respect to the method employed and provided therein for any adjustments, and shall be entitled to rely conclusively for all
purposes upon the provisions contained in any such agreement. The provisions of this Section 4.3 shall similarly apply to successive
reclassifications, changes, consolidations, mergers, sales and conveyances of the kind described above.

 

4.4.
Notices to Holder.

 

(a)
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 4, the
Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment
and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

(b)
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 delivered
by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register
of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants,
or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that
holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure
to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action
required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material,
non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with
the Commission pursuant to a Current Report on Form 8-K. Provided such notice occurs within the Exercise Period, 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.

 

    	9

    	 

    

 

4.5
Other Events. If any event occurs of the type contemplated by the provisions of Section 4.1 or 4.2 but not expressly provided
for by such provisions (including, without limitation, the granting of stock appreciation rights, Adjustment Rights, phantom stock
rights or other rights with equity features to all holders of Common Stock for no consideration), then the Company’s Board
of Directors will, at its discretion and in good faith, make an adjustment in the Exercise Price and the number of Warrant Shares
or designate such additional consideration to be deemed issuable upon exercise of a Warrant, so as to protect the rights of the
registered Holder. No adjustment to the Exercise Price will be made pursuant to more than one sub-section of this Section 4 in
connection with a single issuance.

 

4.6.
Notices of Changes in Warrant. Upon every adjustment of the Exercise Price or the number of Warrant Shares issuable upon
exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Exercise
Price resulting from such adjustment and the increase or decrease, if any, in the number of Warrant Shares purchasable at such
price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such
calculation is based. Upon the occurrence of any event specified in Sections 4.1 or 4.2, then, in any such event, the Company
shall give written notice to each Holder, at the last address set forth for such holder in the Warrant Register, as of the record
date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or
validity of such event. The Warrant Agent shall be entitled to rely conclusively on, and shall be fully protected in relying on,
any certificate, notice or instructions provided by the Company with respect to any adjustment of the Exercise Price or the number
of shares issuable upon exercise of a Warrant, or any related matter, and the Warrant Agent shall not be liable for any action
taken, suffered or omitted to be taken by it in accordance with any such certificate, notice or instructions or pursuant to this
Warrant Agreement. The Warrant Agent shall not be deemed to have knowledge of any such adjustment unless and until it shall have
received written notice thereof from the Company.

 

5.
Restrictive Legends; Fractional Warrants. In the event that a Warrant Certificate surrendered for transfer bears a restrictive
legend, the Warrant Agent shall not register that transfer until the Warrant Agent has received an opinion of counsel for the
Company stating that such transfer may be made and indicating whether the Warrants must also bear a restrictive legend upon that
transfer. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the
transfer of or delivery of a Warrant Certificate for a fraction of a Warrant.

 

6.
Other Provisions Relating to Rights of Holders of Warrants.

 

6.1.
No Rights as Stockholder. Except as otherwise specifically provided herein, a Holder, solely in its capacity as a holder
of Warrants, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Warrant Agreement be construed to confer upon a Holder, solely in its capacity as
the registered holder of Warrants, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent
to any corporate action (whether any reorganization, issue of stock, reclassification of share capital, consolidation, merger,
conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights or rights to participate in new
issues of shares, or otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive
upon the due exercise of Warrants.

 

6.2.
Reservation of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued
shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this
Warrant Agreement.

 

7.
Concerning the Warrant Agent and Other Matters.

 

7.1.
Any instructions given to the Warrant Agent orally, as permitted by any provision of this Warrant Agreement, shall be confirmed
in writing by the Company as soon as practicable. The Warrant Agent shall not be liable or responsible and shall be fully authorized
and protected for acting, or failing to act, in accordance with any oral instructions which do not conform with the written confirmation
received in accordance with this Section 7.1.

 

7.2.
(a) Whether or not any Warrants are exercised, for the Warrant Agent’s services as agent for the Company hereunder, the
Company shall pay to the Warrant Agent such fees as may be separately agreed between the Company and Warrant Agent and the Warrant
Agent’s out of pocket expenses in connection with this Warrant Agreement, including, without limitation, the fees and expenses
of the Warrant Agent’s counsel. While the Warrant Agent endeavors to maintain out-of-pocket charges (both internal and external)
at competitive rates, these charges may not reflect actual out-of-pocket costs, and may include handling charges to cover internal
processing and use of the Warrant Agent’s billing systems.

 

    	10

    	 

    

 

(b)
All amounts owed by the Company to the Warrant Agent under this Warrant Agreement are due within 30 days of the Company’s
receipt of an invoice. Delinquent payments are subject to a late payment charge of one and one-half percent (1.5%) per month commencing
45 days from the invoice date. The Company agrees to reimburse the Warrant Agent for any attorney’s fees and any other costs
associated with collecting delinquent payments.

 

(c)
No provision of this Warrant Agreement shall require Warrant Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties under this Warrant Agreement or in the exercise of its rights.

 

7.3
As agent for the Company hereunder, the Warrant Agent:

 

(a)
shall have no duties or obligations other than those specifically set forth herein or as may subsequently be agreed to in writing
by the Warrant Agent and the Company;

 

(b)
shall be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value, or genuineness
of the Warrants or any Warrant Shares;

 

(c)
shall not be obligated to take any legal action hereunder; if, however, the Warrant Agent determines to take any legal action
hereunder, and where the taking of such action might, in its judgment, subject or expose it to any expense or liability it shall
not be required to act unless it has been furnished with an indemnity reasonably satisfactory to it;

 

(d)
may rely on and shall be fully authorized and protected in acting or failing to act upon any certificate, instrument, opinion,
notice, letter, telegram, telex, facsimile transmission or other document or security delivered to the Warrant Agent and believed
by it to be genuine and to have been signed by the proper party or parties;

 

(e)
shall not be liable or responsible for any recital or statement contained in the Registration Statement or any other documents
relating thereto;

 

(f)
shall not be liable or responsible for any failure on the part of the Company to comply with any of its covenants and obligations
relating to the Warrants, including without limitation obligations under applicable securities laws;

 

(g)
may rely on and shall be fully authorized and protected in acting or failing to act upon the written, telephonic or oral instructions
with respect to any matter relating to its duties as Warrant Agent covered by this Warrant Agreement (or supplementing or qualifying
any such actions) of officers of the Company, and is hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder from the Company or counsel to the Company, and may apply to the Company, for advice or instructions
in connection with the Warrant Agent’s duties hereunder, and the Warrant Agent shall not be liable for any delay in acting
while waiting for those instructions; any applications by the Warrant Agent for written instructions from the Company may, at
the option of the Agent, set forth in writing any action proposed to be taken or omitted by the Warrant Agent under this Warrant
Agreement and the date on or after which such action shall be taken or such omission shall be effective; the Warrant Agent shall
not be liable for any action taken by, or omission of, the Warrant Agent in accordance with a proposal included in such application
on or after the date specified in such application (which date shall not be less than five business days after the date such application
is sent to the Company, unless the Company shall have consented in writing to any earlier date) unless prior to taking any such
action, the Warrant Agent shall have received written instructions in response to such application specifying the action to be
taken or omitted;

 

(h)
may consult with counsel satisfactory to the Warrant Agent, including its in-house counsel, and the advice of such counsel shall
be full and complete authorization and protection in respect of any action taken, suffered, or omitted by it hereunder in good
faith and in accordance with the advice of such counsel;

 

    	11

    	 

    

 

(i)
may perform any of its duties hereunder either directly or by or through nominees, correspondents, designees, or subagents, and
it shall not be liable or responsible for any misconduct or negligence on the part of any nominee, correspondent, designee, or
subagent appointed with reasonable care by it in connection with this Warrant Agreement;

 

(j)
is not authorized, and shall have no obligation, to pay any brokers, dealers, or soliciting fees to any person and

 

(k)
shall not be required hereunder to comply with the laws or regulations of any country other than the United States of America
or any political subdivision thereof.

 

7.4.
(a) In the absence of gross negligence or willful or illegal misconduct on its part, the Warrant Agent shall not be liable for
any action taken, suffered, or omitted by it or for any error of judgment made by it in the performance of its duties under this
Warrant Agreement. Anything in this Warrant Agreement to the contrary notwithstanding, in no event shall Warrant Agent be liable
for special, indirect, incidental, consequential or punitive losses or damages of any kind whatsoever (including but not limited
to lost profits), even if the Warrant Agent has been advised of the possibility of such losses or damages and regardless of the
form of action. Any liability of the Warrant Agent will be limited in the aggregate to the amount of fees paid by the Company
hereunder. The Warrant Agent shall not be liable for any failures, delays or losses, arising directly or indirectly out of conditions
beyond its reasonable control including, but not limited to, acts of government, exchange or market ruling, suspension of trading,
work stoppages or labor disputes, fires, civil disobedience, riots, rebellions, storms, electrical or mechanical failure, computer
hardware or software failure, communications facilities failures including telephone failure, war, terrorism, insurrection, earthquakes,
floods, acts of God or similar occurrences.

 

(b)
In the event any question or dispute arises with respect to the proper interpretation of the Warrants or the Warrant Agent’s
duties under this Warrant Agreement or the rights of the Company or of any Holder, the Warrant Agent shall not be required to
act and shall not be held liable or responsible for its refusal to act until the question or dispute has been judicially settled
(and, if appropriate, it may file a suit in interpleader or for a declaratory judgment for such purpose) by final judgment rendered
by a court of competent jurisdiction, binding on all persons interested in the matter which is no longer subject to review or
appeal, or settled by a written document in form and substance satisfactory to Warrant Agent and executed by the Company and each
such Holder. In addition, the Warrant Agent may require for such purpose, but shall not be obligated to require, the execution
of such written settlement by all the Holders and all other persons that may have an interest in the settlement.

 

7.5.
The Company covenants to indemnify the Warrant Agent and hold it harmless from and against any loss, liability, claim or expense
(“Loss”) arising out of or in connection with the Warrant Agent’s duties under this Warrant Agreement,
including the costs and expenses of defending itself against any Loss, unless such Loss shall have been determined by a court
of competent jurisdiction to be a result of the Warrant Agent’s gross negligence or willful misconduct.

 

7.6.
Unless terminated earlier by the parties hereto, this Agreement shall terminate 90 days after the earlier of the Expiration Date
and the date on which no Warrants remain outstanding (the “Termination Date”). On the business day following
the Termination Date, the Agent shall deliver to the Company any entitlements, if any, held by the Warrant Agent under this Warrant
Agreement. The Agent’s right to be reimbursed for fees, charges and out-of-pocket expenses as provided in this Section 8
shall survive the termination of this Warrant Agreement.

 

7.7.
If any provision of this Warrant Agreement shall be held illegal, invalid, or unenforceable by any court, this Warrant Agreement
shall be construed and enforced as if such provision had not been contained herein and shall be deemed an Agreement among the
parties to it to the full extent permitted by applicable law.

 

7.8.
The Company represents and warrants that (a) it is duly incorporated and validly existing under the laws of its jurisdiction of
incorporation, (b) the offer and sale of the Warrants and the execution, delivery and performance of all transactions contemplated
thereby (including this Warrant Agreement) have been duly authorized by all necessary corporate action and will not result in
a breach of or constitute a default under the articles of association, bylaws or any similar document of the Company or any indenture,
agreement or instrument to which it is a party or is bound, (c) this Warrant Agreement has been duly executed and delivered by
the Company and constitutes the legal, valid, binding and enforceable obligation of the Company, (d) the Warrants will comply
in all material respects with all applicable requirements of law and (e) to the best of its knowledge, there is no litigation
pending or threatened as of the date hereof in connection with the offering of the Warrants.

 

    	12

    	 

    

 

7.9.
In the event of inconsistency between this Warrant Agreement and the descriptions in the Registration Statement, as they may from
time to time be amended, the terms of this Warrant Agreement shall control.

 

7.10.
Set forth in Annex D hereto is a list of the names and specimen signatures of the persons authorized to act for the Company
under this Warrant Agreement (the “Authorized Representatives”). The Company shall, from time to time,
certify to you the names and signatures of any other persons authorized to act for the Company under this Warrant Agreement.

 

7.11.
Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the holder
of any Warrant to or on the Company shall be delivered by e-mail, hand or sent by registered or certified mail or overnight courier
service, addressed (until another address is filed in writing by the Company with the Warrant Agent) as set forth below and if
to any holder any notice, statement or demand shall be given to the last address set forth for such holder (if any) in the Warrant
Register:

 

FAT
Brands Inc.

9720
Wilshire Blvd., Suite 500

Beverly
Hills, CA 90212

Attn:
Corporate Secretary

Facsimile:
(310) 319-1863

Email:
_____________

 

Any
notice, statement or demand authorized by this Warrant Agreement to be given or made by the holder of any Warrant or by the Company
to or on the Warrant Agent shall be delivered by hand or sent by registered or certified mail or overnight courier service, addressed
(until another address is filed in writing by the Warrant Agent with the Company), as follows:

 

VStock
Transfer, LLC

18
Lafayette Place

Woodmere,
NY 11598

Facsimile:
_____________

Email:
_____________

 

7.12.
(a) This Warrant Agreement shall be governed by and construed in accordance with the laws of the State of New York. All actions
and proceedings relating to or arising from, directly or indirectly, this Warrant Agreement may be litigated in courts located
within the Borough of Manhattan in the City and State of New York. The Company hereby submits to the personal jurisdiction of
such courts and consents that any service of process may be made by certified or registered mail, return receipt requested, directed
to the Company at its address last specified for notices hereunder.

 

(b)
This Warrant Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties hereto. This
Warrant Agreement may not be assigned, or otherwise transferred, in whole or in part, by either party without the prior written
consent of the other party, which the other party will not unreasonably withhold, condition or delay; except that (i) consent
is not required for an assignment or delegation of duties by Warrant Agent to any affiliate of Warrant Agent and (ii) any reorganization,
merger, consolidation, sale of assets or other form of business combination by Warrant Agent or the Company shall not be deemed
to constitute an assignment of this Warrant Agreement.

 

(c)
No provision of this Warrant Agreement may be amended, modified or waived, except in a written document signed by both parties.
The Company and the Warrant Agent may amend or supplement this Warrant Agreement without the consent of any Holder for the purpose
of curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein or adding or changing
any other provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable
and that the parties determine, in good faith, shall not adversely affect the interest of the Holders. All other amendments and
supplements shall require the vote or written consent of Holders of at least 50.1% of the then outstanding Warrants, provided
that adjustments may be made to the Warrant terms and rights in accordance with Section 4 without the consent of the Holders.

 

    	13

    	 

    

 

7.13
Payment of Taxes. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company
or the Warrant Agent in respect of the issuance or delivery of Warrant Shares upon the exercise of Warrants, but the Company may
require the Holders to pay any transfer taxes in respect of the Warrants or such shares. The Warrant Agent may refrain from registering
any transfer of Warrants or any delivery of any Warrant Shares unless or until the persons requesting the registration or issuance
shall have paid to the Warrant Agent for the account of the Company the amount of such tax or charge, if any, or shall have established
to the reasonable satisfaction of the Company and the Warrant Agent that such tax or charge, if any, has been paid.

 

7.14
Resignation of Warrant Agent.

 

7.14.1.
Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties
and be discharged from all further duties and liabilities hereunder after giving thirty (30) days’ notice in writing to
the Company, or such shorter period of time agreed to by the Company. The Company may terminate the services of the Warrant Agent,
or any successor Warrant Agent, after giving thirty (30) days’ notice in writing to the Warrant Agent or successor Warrant
Agent, or such shorter period of time as agreed. If the office of the Warrant Agent becomes vacant by resignation, termination
or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent.
If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation
or incapacity by the Warrant Agent, then the Warrant Agent or any Holder may apply to any court of competent jurisdiction for
the appointment of a successor Warrant Agent at the Company’s cost. Pending appointment of a successor to such Warrant Agent,
either by the Company or by such a court, the duties of the Warrant Agent shall be carried out by the Company. Any successor Warrant
Agent (but not including the initial Warrant Agent), whether appointed by the Company or by such court, shall be a person organized
and existing under the laws of any state of the United States of America, in good standing, and authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any
successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor
Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed, and except
for executing and delivering documents as provided in the sentence that follows, the predecessor Warrant Agent shall have no further
duties, obligations, responsibilities or liabilities hereunder, but shall be entitled to all rights that survive the termination
of this Warrant Agreement and the resignation or removal of the Warrant Agent, including but not limited to its right to indemnity
hereunder. If for any reason it becomes necessary or appropriate or at the request of the Company, the predecessor Warrant Agent
shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority,
powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall
make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming
to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.

 

7.14.2.
Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice
thereof to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any
such appointment.

 

7.14.3.
Merger or Consolidation of Warrant Agent. Any person into which the Warrant Agent may be merged or converted or with which
it may be consolidated or any person resulting from any merger, conversion or consolidation to which the Warrant Agent shall be
a party or any person succeeding to the shareowner services business of the Warrant Agent or any successor Warrant Agent shall
be the successor Warrant Agent under this Warrant Agreement, without any further act or deed. For purposes of this Warrant Agreement,
“person” shall mean any individual, firm, corporation, partnership, limited liability company, joint venture, association,
trust or other entity, and shall include any successor (by merger or otherwise) thereof or thereto.

 

    	14

    	 

    

 

8.
Miscellaneous Provisions.

 

8.1.
Persons Having Rights under this Warrant Agreement. Nothing in this Warrant Agreement expressed and nothing that may be
implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation
other than the parties hereto and the Holders any right, remedy, or claim under or by reason of this Warrant Agreement or of any
covenant, condition, stipulation, promise, or agreement hereof.

 

8.2.
Examination of the Warrant Agreement. A copy of this Warrant Agreement shall be available at all reasonable times at the
office of the Warrant Agent designated for such purpose for inspection by any Holder. Prior to such inspection, the Warrant Agent
may require any such holder to provide reasonable evidence of its interest in the Warrants.

 

8.3.
Counterparts. This Warrant Agreement may be executed in any number of original, facsimile or electronic counterparts and
each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.

 

8.4.
Effect of Headings. The Section headings herein are for convenience only and are not part of this Warrant Agreement and
shall not affect the interpretation thereof.

 

9.
Certain Definitions.

 

As
used herein, the following terms shall have the following meanings:

 

(i)
“Adjustment Right” means any right granted with respect to any securities issued in connection with,
or with respect to, any issuance, sale or delivery (or deemed issuance, sale or delivery in accordance with Section 4) of Common
Stock (other than rights of the type described in Section 4.2 and 4.3 hereof) that could result in a decrease in the net consideration
received by the Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement
rights, cash adjustment or other similar rights) but excluding anti-dilution and other similar rights (including pursuant to Section
4.4 of this Agreement).

 

(ii)
“Trading Day” means any day on which the Common Stock is traded on the Trading Market, or, if the Trading
Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market
in the United States on which the Common Stock is then traded, provided that “Trading Day” shall not include any day
on which the Common Stock is are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common
Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does
not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00 P.M., New
York City time).

 

(iii)
“Trading Market” means 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).

 

(iv)
“VWAP” means, for any date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock
for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported
by Bloomberg 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 the Common Stock for such date (or the nearest preceding
date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and
if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to
the Company, the fees and expenses of which shall be paid by the Company.

 

[SIGNATURE
PAGE FOLLOWS]

 

    	15

    	 

    

 

IN
WITNESS WHEREOF, this Warrant Agency Agreement has been duly executed by the parties hereto as of the day and year first above
written.

 

	 	FAT
    Brands Inc.
	 	 	 
	 	By:
    	 
	 	Name:	 
	 	Title:	 

 

	 	Address for notices:
	 	Attention:	
	 	Telephone:	 
	 	Facsimile:	 
	 	E-mail:	 

 

	 	VStock
    Transfer, LLC
	 	As
    Warrant Agent
	 	 	 
	 	By:
    	     
	 	Name:	 
	 	Title:	 

 

Annex
A Form of Global Certificate

Annex
B Election to Purchase

Annex
C Form of Certificated Warrant

Annex
D Authorized Representatives

Annex
E Form of Warrant Certificate Request Notice

 

    	16

    	 

    

 

ANNEX
A

 

[FORM
OF GLOBAL CERTIFICATE]

 

UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.

 

FAT
BRANDS INC.

WARRANT
CERTIFICATE

NOT
EXERCISABLE AFTER [●], 2025

 

This certifies that the
person whose name and address appears below, or registered assigns, is the registered owner of the number of Warrants set forth
below. Each Warrant entitles its registered holder to purchase from FAT Brands Inc., a Delaware corporation (the “Company”),
at any time prior to 5:00 P.M. (New York City time) on [●], 2025, one share of common stock, par value $0.0001 per share,
of the Company (each, a “Warrant Share” and collectively, the “Warrant Shares”), at an exercise
price of $5.00 per share, subject to possible adjustments as provided in the Warrant Agreement (as defined below).

 

This
Warrant Certificate, with or without other Warrant Certificates, upon surrender at the designated office of the Warrant Agent,
may be exchanged for another Warrant Certificate or Warrant Certificates evidencing the same number of Warrants as the Warrant
Certificate or Warrant Certificates surrendered. A transfer of the Warrants evidenced hereby may be registered upon surrender
of this Warrant Certificate at the designated office of the Warrant Agent by the registered holder in person or by a duly authorized
attorney, properly endorsed or accompanied by proper instruments of transfer, a signature guarantee, and such other and further
documentation as the Warrant Agent may reasonably request and duly stamped as may be required by the laws of the State of New
York and of the United States of America.

 

The
terms and conditions of the Warrants and the rights and obligations of the holder of this Warrant Certificate are set forth in
the Warrant Agency Agreement dated as of [●], 2020 (the “Warrant Agreement”) between the Company and
VStock Transfer, LLC (the “Warrant Agent”). A copy of the Warrant Agreement is available for inspection during
business hours at the office of the Warrant Agent.

 

This
Warrant Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by an authorized signatory
of the Warrant Agent.

 

WITNESS
the facsimile signature of a proper officer of the Company.

 

	 	FAT
    Brands Inc.
	 	 	 
	 	By:
    	 
	 	Name:	 
	 	Title:	 

 

Dated: [●], 2020 

Countersigned: 

 

	VStock
    Transfer, LLC	 
	As
    Warrant Agent	 
	 	 	 
	By:
    	    	 
	Name:	 	 
	Title:
    	 	 

 

PLEASE
DETACH HERE

——————————————————————————————————————

 

Certificate
No.:_________ Number of Warrants:__________

 

WARRANT
CUSIP NO.: ___________

 

	 	 	FAT
    Brands Inc.
	 	 	 
	[Name
    & Address of Holder]	 	VStock
    Transfer, LLC, Warrant Agent
	 	 	 
	 	 	By
    Mail:
	 	 	 
	 	 	 
	 	 	By
    hand or overnight courier:
	 	 	 

 

    	17

    	 

    

 

ANNEX
B

 

NOTICE
OF EXERCISE

 

	 	TO:	FAT BRANDS 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 issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

	 	 	 

 

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

 

	 	 	 
	 	 	 
	 	 	 

 

[SIGNATURE
OF HOLDER]

 

 

Name
of Investing Entity: ________________________________________________________________

 

Signature
of Authorized Signatory of Investing Entity: __________________________________________

 

Name
of Authorized Signatory: ____________________________________________________________

 

Title
of Authorized Signatory: _____________________________________________________________

 

Date:
________________________________________________________________________________

 

    	18

    	 

    

 

ANNEX
C

 

[FORM
OF CERTIFICATED WARRANT]

 

COMMON
STOCK PURCHASE WARRANT

 

FAT
BRANDS INC.

 

	Warrant
    Shares: _______	 	Issuance
    Date: [●], 2020	 
	 	 	 	 
	 	 	CUSIP: ______________
	 	 	ISIN: _______________

 

THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its
assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time during the period (the “Exercise Period”) commencing on
the earlier of (i) the one-year anniversary of the Issuance Date or (ii) the FCCG Merger, and terminating at 5:00 P.M., New York
City time on [●], 2025, to subscribe for and purchase from FAT Brands Inc., a Delaware corporation (the “Company”),
up to [●] shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The
purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
This Warrant shall initially be issued and maintained in the form of a security held in book-entry form and the Depository Trust
Company or its nominee (“DTC”) shall initially be the sole registered holder of this Warrant, subject
to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement,
in which case this sentence shall not apply.

 

Section
1. Definitions. In addition to the terms defined elsewhere in this Warrant, 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 except any Saturday, any Sunday, any day which is a federal legal holiday in the United States
or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.

 

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

 

“Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into
which such securities may hereafter be reclassified or changed.

 

“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof
to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other
instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock

 

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

 

“FCCG
Merger” shall mean a merger, acquisition or other business combination transaction involving Fog Cutter Capital
Group, Inc. and the Company and/or its subsidiaries.

 

“Liens”
means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“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.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

 

    	19

    	 

    

 

“Registration
Statement” means the Company’s registration statement on Form S-1 (File No. 239032).

 

“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 Common Stock is traded on a Trading Market.

 

“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).

 

“Transfer
Agent” means VStock Transfer, LLC, with a mailing address of 18 Lafayette Place, Woodmere, NY 11598 and a facsimile
number of (516) ___________, and any successor transfer agent of the Company.

 

“Warrant
Agency Agreement” means that certain Warrant Agency Agreement, dated as of the Issuance Date, between the Company
and the Warrant Agent.

 

“Warrant
Agent” means the Transfer Agent and any successor warrant agent of the Company.

 

“Warrants”
means this Warrant and other Common Stock Purchase Warrants issued by the Company pursuant to the Registration Statement.

 

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 during the
Exercise Period by delivery to the Company of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise
in the form annexed hereto. Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the
Standard Settlement Period 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 three (3) 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 within one (1) Trading Day 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.

 

Notwithstanding
the foregoing in this Section 2(a), a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing
this Warrant held in book-entry form through DTC (or another established clearing corporation performing similar functions), shall
effect exercises made pursuant to this Section 2(a) by delivering to DTC (or such other clearing corporation, as applicable) the
appropriate instruction form for exercise, complying with the procedures to effect exercise that are required by DTC (or such
other clearing corporation, as applicable), subject to a Holder’s right to elect to receive a Warrant in certificated form
pursuant to the terms of the Warrant Agency Agreement, in which case this sentence shall not apply.

 

    	20

    	 

    

 

b)
Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $5.00, subject
to adjustment hereunder (the “Exercise Price”).

 

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

 

(A)
= the last VWAP immediately preceding the time of delivery of the Notice of Exercise giving rise to the applicable “cashless
exercise”, as set forth in the applicable Notice of Exercise (to clarify, the “last VWAP” will be the last VWAP
as calculated over an entire Trading Day such that, in the event that this Warrant is exercised at a time that the Trading Market
is open, the prior Trading Day’s VWAP shall be used in this calculation);

 

(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.

 

Notwithstanding
anything herein to the contrary, the Company shall not be required to make any cash payments or net cash settlement to the Holder
in lieu of delivery of the Warrant Shares. 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. The Company agrees not to take any position contrary to this Section 2(c).

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg 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 the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common
Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d)
in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the
fees and expenses of which shall be paid by the Company.

 

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

  

    	21

    	 

    

 

d)
Mechanics of Exercise.

 

i.
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted
by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with
The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company
is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, 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 earlier of (i) two (2) Trading Days after the delivery to the Company
of the Notice of Exercise and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to
the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery
of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant
Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided
that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received the earlier of (i) two
(2) Trading Days of and (ii) the number of Trading Days comprising the Standard Settlement Period following the delivery of the
Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise
by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty,
for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable
Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages
begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder
rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this
Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement
period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock
as in effect on the date of delivery of the Notice of Exercise.

 

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

 

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

 

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

 

    	22

    	 

    

 

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 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.

 

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

 

    	23

    	 

    

 

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.

 

b)
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).

 

c) Extraordinary
Dividends. If the Company, at any time during the Exercise Period, shall pay a dividend in cash, securities or other assets to
the holders of Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible), other
than (i) as described in Sections 3(a), 3(b) or 3(d), or (ii) regular quarterly or other periodic dividends (any such non-excluded
event being referred to herein as an “Extraordinary Dividend”), then the Exercise Price shall be decreased,
effective immediately after the effective date of such Extraordinary Dividend, by the quotient of the gross amount of cash and/or
fair market value (as determined by the Company’s Board of Directors, in good faith) of all securities or other assets paid
to the holders of Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible)
in respect of such Extraordinary Dividend divided by the number of shares of Common Stock (or other shares of the Company’s
capital stock into which the Warrants are convertible) outstanding at the time of the Extraordinary Dividend, provided, that the
Exercise Price shall not be reduced below zero.

 

d) 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 all 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 all outstanding shares of Common Stock
are 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 (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 such amount of cash or any other consideration (collectively,
the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of
the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without
regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion
the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any exercise of this Warrant following such Fundamental Transaction. 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(d) pursuant to written
agreements prior to or during such Fundamental Transaction. 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 the Warrants 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 the Warrants with the same effect as if
such Successor Entity had been named as the Company therein.

 

    	24

    	 

    

 

e)
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.

 

f)
Notice to Holder.

 

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

 

ii.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company 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 delivered
by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register
of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants,
or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that
holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure
to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action
required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material,
non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with
the Commission pursuant to a Current Report on Form 8-K. Provided such notice occurs within the Exercise Period, 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. This Warrant and all rights hereunder 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.

 

    	25

    	 

    

 

b)
New Warrants. If this Warrant is not held in global form through DTC (or any successor depository), 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 original 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 Warrant Agent shall register this Warrant, upon records to be maintained by the Warrant Agent for
that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The
Company and the Warrant Agent 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.

 

Section
5. 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), except as expressly set forth
in Section 3.

 

b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such
Warrant or stock certificate.

 

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

 

d)
Authorized Shares.

 

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

 

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 non-assessable 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.

 

    	26

    	 

    

 

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)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflict of laws thereof. Each party agrees that all legal Proceedings concerning the interpretation, enforcement
and defense of this Warrant shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan
(the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction
of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any provision hereunder), and hereby irrevocably waives,
and agrees not to assert in any suit, action or Proceeding, any claim that it is not personally subject to the jurisdiction of
such New York Courts, or such New York Courts are improper or inconvenient venue for such Proceeding. If any party shall commence
an action or Proceeding to enforce any provisions of this Warrant, then the prevailing party in such action or Proceeding shall
be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation
and prosecution of such action or Proceeding.

 

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, 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 and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Exercise, shall be in writing and delivered personally, by facsimile or by e-mail, or sent by a nationally
recognized overnight courier service, addressed to the Company, at 9720 Wilshire Blvd., Suite 500, Beverly Hills, CA 90212, Attn:
Corporate Secretary, facsimile number: (310) 319-1863, email address: [_____________], or such other facsimile number, email address
or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a
nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of such Holder appearing
on the books of the Warrant Agent. Any notice or other communication or deliveries hereunder shall be deemed given and effective
on the earliest of (i) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number
or e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading
Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or e-mail
at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time)
on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. Notwithstanding any other
provision of this Warrant, where this Warrant provides for notice of any event to the Holder, if this Warrant is held in global
form by DTC (or any successor depositary), such notice shall be sufficiently given if given to DTC (or any successor depositary)
pursuant to the procedures of DTC (or such successor depositary), subject to a Holder’s right to elect to receive a Warrant
in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence shall not apply.

 

    	27

    	 

    

 

i)
Warrant Agency Agreement. If this Warrant is held in global form through DTC (or any successor depositary), this Warrant
is issued subject to the Warrant Agency Agreement. To the extent any provision of this Warrant conflicts with the express provisions
of the Warrant Agency Agreement, the provisions of this Warrant shall govern and be controlling.

 

j)
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.

 

k)
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.

 

l)
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.

 

m)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company,
on the one hand, and either: (i) the Holder or the beneficial owner of this Warrant, on the other hand, or (ii) the vote or written
consent of the Holders of at least 50.1% of the then outstanding Warrants issued pursuant to the Warrant Agency Agreement, on
the other hand, provided that adjustments may be made to the Warrant terms and rights of this Warrant in accordance with Section
3 of this Warrant without the consent of any Holder or beneficial owner of the Warrants..

 

n)
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.

 

o)
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)

 

    	28

    	 

    

 

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.

 

	 	FAT
    Brands inc. 
	 	 	 
	 	By:	      
	 	Name:	 
	 	Title:	 

 

    	29

    	 

    

 

NOTICE
OF EXERCISE

 

	 	TO:	FAT BRANDS 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 issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

	 	 	 

 

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

 

	 	 	 
	 	 	 
	 	 	 

 

[SIGNATURE
OF HOLDER]

 

Name
of Investing Entity: ________________________________________________________________

 

Signature
of Authorized Signatory of Investing Entity: __________________________________________

 

Name
of Authorized Signatory: ____________________________________________________________

 

Title
of Authorized Signatory: _____________________________________________________________

 

Date:
________________________________________________________________________________

 

    	30

    	 

    

 

ASSIGNMENT
FORM

 

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

 

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

 

	Name:	 	 	 
	 	 	(Please
    Print)	 
	 	 	 	 
	Address:	 	 	 
	 	 	(Please
    Print)	 
	 	 	 	 
	Phone
    Number:	 	 	 
	 	 	 	 
	Email
    Address:	 	 	 
	 	 	 	 
	Dated:
    _____________________ __, ______	 	 	 
	 	 	 	 
	Holder’s
    Signature:	 	 	 	 
	 	 	 	 	 
	Holder’s
    Address:	 	 	 	 

 

    	31

    	 

    

 

ANNEX
D

 

AUTHORIZED
REPRESENTATIVES

 

	Name	 	Title	 	Signature
	 	 	 	 	 

 

    	32

    	 

    

 

Annex
E: Form of Warrant Certificate Request Notice

 

WARRANT
CERTIFICATE REQUEST NOTICE

 

	To:	VStock
    Transfer, LLC, as Warrant Agent for FAT Brands Inc. (the “Company”)

 

The
undersigned Holder of Common Stock Purchase Warrants (“Warrants”) in the form of Global Warrants issued by the Company
hereby elects to receive a Definitive Certificate evidencing the Warrants held by the Holder as specified below:

 

	1	Name
    of Holder of Warrants in form of Global Warrants:
	 	 
	2)	Name
    of Holder in Definitive Certificate (if different from name of Holder of Warrants in form of Global Warrants):
	 	 
	3)	Number
    of Warrants in name of Holder in form of Global Warrants:
	 	 
	4)	Number
    of Warrants for which Definitive Certificate shall be issued:
	 	 
	5)	Number
    of Warrants in name of Holder in form of Global Warrants after issuance of

 

Definitive
Certificate, if any:

 

	6)	Definitive
    Certificate shall be delivered to the following address:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

The
undersigned hereby acknowledges and agrees that, in connection with this Warrant Exchange and the issuance of the Definitive Certificate,
the Holder is deemed to have surrendered the number of Warrants in form of Global Warrants in the name of the Holder equal to
the number of Warrants evidenced by the Definitive Certificate.

 

[SIGNATURE
OF HOLDER]

 

Name
of Investing Entity: _____________________________________

 

Signature
of Authorized Signatory of Investing Entity: _____________________________

 

Name
of Authorized Signatory: _____________________________________

 

Title
of Authorized Signatory: _____________________________________

 

Date:____________________________________

 

    	33cvia-ex101_6.htm

Exhibit 10.1

Execution Version

THIS AMENDED AND RESTATED RESTRUCTURING SUPPORT AGREEMENT IS NOT AN OFFER OR ACCEPTANCE WITH RESPECT TO ANY SECURITIES OR A SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN WITHIN THE MEANING OF SECTION 1125 OF THE BANKRUPTCY CODE.  ANY SUCH OFFER OR SOLICITATION WILL COMPLY WITH ALL APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE BANKRUPTCY CODE.  Nothing contained in thIS AMENDED AND RESTATED RESTRUCTURING SUPPORT AGREEMENT shall be an admission of fact or liability OR, UNTIL THE OCCURRENCE OF THE AGREEMENT EFFECTIVE DATE ON THE TERMS DESCRIBED HEREIN, DEEMED BINDING ON ANY OF THE PARTIES HERETO.

AMENDED AND RESTATED RESTRUCTURING SUPPORT AGREEMENT

This AMENDED AND RESTATED RESTRUCTURING SUPPORT AGREEMENT (including all exhibits, annexes, and schedules hereto in accordance with Section 16.02, this “Agreement”) is made and entered into as of July 7, 2020 (the “Execution Date”), by and among the following parties (each of the following described in sub-clauses (i) through (ii) of this preamble, collectively, the “Parties”):1

	
 
	
i.
	
Covia Holdings Corporation, a company incorporated under the Laws of Delaware (“Covia”) and certain of its direct and indirect subsidiaries that are or become parties to this Agreement (the Entities in this clause (i), collectively, the “Company Parties”); and

	
 
	
ii.
	
the undersigned holders of Term Loan Claims that have executed and delivered counterpart signature pages to this Agreement, a Joinder, or a Transfer Agreement to counsel to the Company Parties (collectively, the “Consenting Stakeholders”). 

RECITALS

WHEREAS, on June 29, 2020, the Debtors commenced voluntary cases under chapter 11 of the Bankruptcy Code in the Bankruptcy Court (the cases commenced, the “Chapter 11 Cases”);

WHEREAS, the Company Parties and the Consenting Stakeholders entered into that certain Restructuring Support Agreement, dated as of June 29, 2020 (the “Original Agreement”), upon the terms and conditions set forth therein, pursuant to which the Company Parties and the Consenting Stakeholders intended to effectuate the transactions contemplated by the Original Agreement;

WHEREAS, the Company Parties and the Consenting Stakeholders have in good faith and at arms’ length negotiated or been apprised of certain restructuring transactions with respect to the existing debt of, existing equity interests in, and certain other obligations of the Company Parties on the terms set forth in this Agreement and as specified in the term sheet attached as Exhibit A 

	
	 

	
1
	
Capitalized terms used but not defined in the preamble and recitals to this Agreement have the meanings ascribed to them in Section 1.

 

 

hereto (the “Restructuring Term Sheet” and, such transactions as described in this Agreement and the Restructuring Term Sheet, the “Restructuring Transactions”);

WHEREAS, the Parties have agreed to amend and restate the Original Agreement to, among other things, (i) implement the Restructuring Transactions, including through the Chapter 11 Cases, and (ii) take certain actions in support of the Restructuring Transactions on the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the covenants and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Party, intending to be legally bound hereby, agrees as follows:

AGREEMENT

Definitions and Interpretation

.

1.01.Definitions.  The following terms shall have the following definitions: 

“Ad Hoc Term Lender Group” means the ad hoc group of holders of Term Loan Claims that is represented by Paul, Weiss, Porter Hedges and Centerview. 

“Agent” means any administrative agent, collateral agent, or similar Entity under the Term Loan Credit Agreement, including any successors thereto.

“Agreement” has the meaning set forth in the preamble to this Agreement and, for the avoidance of doubt, includes all the exhibits, annexes, and schedules hereto in accordance with Section 16.02 (including the Restructuring Term Sheet).

“Agreement Effective Date” means the date on which the conditions set forth in Section 2 have been satisfied or waived by the appropriate Party or Parties in accordance with this Agreement.

“Agreement Effective Period” means, with respect to a Party, the period from the Agreement Effective Date to the Termination Date applicable to that Party.

“Alternative Restructuring Proposal” means any inquiry, proposal, offer, bid, term sheet, discussion, or agreement with respect to a sale, disposition, new-money investment, restructuring, reorganization, merger, amalgamation, acquisition, consolidation, dissolution, debt investment, equity investment, liquidation, asset sale, share issuance, exchange offer, tender offer, recapitalization, plan of reorganization, share exchange, business combination, joint venture, or similar transaction involving any one or more Company Parties or the debt, equity, or other interests in any one or more Company Parties that is an alternative to one or more of the Restructuring Transactions.

“Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§ 101–1532, as amended.

2

 

“Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of Texas (Houston Division) presiding over the Chapter 11 Cases or other court having jurisdiction over the Chapter 11 Cases, including to the extent of any withdrawal of reference under 28 U.S.C.  157, the United States District Court for the Southern District of Texas.

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure promulgated under section 2075 of the Judicial Code and the general, local, and chambers rules of the Bankruptcy Court. 

“Business Day” means any day other than a Saturday, Sunday, or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state of New York.

“Cash Collateral Documents” has the meaning set forth in Section 3.01. 

“Cash Collateral Order” means any order entered by the Bankruptcy Court in the Chapter 11 Cases authorizing the use of cash collateral (whether interim or final).

“Centerview” means Centerview Partners LLC, as financial advisor and investment banker to the Ad Hoc Term Lender Group. 

“Chapter 11 Cases” has the meaning set forth in the recitals to this Agreement.

“Claim” has the meaning ascribed to it in section 101(5) of the Bankruptcy Code.

“Company Claims/Interests” means any Claim against, or Equity Interest in, a Company Party, including the Term Loan Claims.

“Company Parties” has the meaning set forth in the recitals to this Agreement.

“Confidentiality Agreement” means an executed confidentiality agreement, including with respect to the issuance of a “cleansing letter” or other public disclosure of material non-public information agreement, in connection with any proposed Restructuring Transactions.

“Confirmation Documents” has the meaning set forth in Section 3.01. 

“Confirmation Hearing” means the hearing held by the Bankruptcy Court on confirmation of the Plan, pursuant to Bankruptcy Rule 3020(b)(2) and sections 1128 and 1129 of the Bankruptcy Code, as such hearing may be continued from time to time.

 “Confirmation Order” means the order entered by the Bankruptcy Court in the Chapter 11 Cases confirming the Plan.

“Consenting Stakeholders” has the meaning set forth in the preamble to this Agreement.

“Debtors” means the Company Parties that commence Chapter 11 Cases.

“Definitive Documents” means the documents listed in Section 3.01.

3

 

“DIP Documents” has the meaning set forth in Section 3.01. 

“Disclosure Statement” means the disclosure statement in support of the Plan and any exhibits and schedules thereto, as may be amended or supplemented from time to time in accordance with the terms of this Agreement.

“Entity” shall have the meaning set forth in section 101(15) of the Bankruptcy Code.

“Equity Interests” means, collectively, the shares (or any class thereof), common stock, preferred stock, limited liability company interests, and any other equity, ownership, or profits interests of any Company Party, and options, warrants, rights, or other securities or agreements to acquire or subscribe for, or which are convertible into the shares (or any class thereof) of, common stock, preferred stock, limited liability company interests, or other equity, ownership, or profits interests of any Company Party (in each case, whether or not arising under or in connection with any employment agreement and including any “equity security” (as such term is defined in section 101(16) of the Bankruptcy Code) in a Company Party).

“Execution Date” has the meaning set forth in the preamble to this Agreement.

“Exit Facility” has the meaning set forth in the Restructuring Term Sheet. 

“Exit Facility Documents” has the meaning set forth in Section 3.01. 

“First Day Pleadings” means the “first-day” pleadings that the Company Parties file upon commencement of the Chapter 11 Cases, and any orders related thereto.

“Go-Forward Railcar Leases” mean any leases, documents, agreements or instruments entered into or assumed (including as amended) by any Company Party with any Strategic Partner;

“Joinder” means a joinder to this Agreement substantially in the form attached hereto as Exhibit C.

“Law” means any federal, state, local, or foreign law (including common law), statute, code, ordinance, rule, regulation, order, ruling, or judgment, in each case, that is validly adopted, promulgated, issued, or entered by a governmental authority of competent jurisdiction (including the Bankruptcy Court).

“MIP Documents” has meaning set forth in Section 3.01. 

“Milestones” has the meaning set forth in the Restructuring Term Sheet. 

“New Employment Agreements” has the meaning set forth in Section 3.01. 

“New Organizational Documents” has the meaning set forth Section 3.01. 

“New Term Loan” has the meaning set forth in the Restructuring Term Sheet. 

“New Term Loan Documents” has the meaning set forth in Section 3.01. 

4

 

“New Term Loan Facility” means the senior secured term loan facility in respect of the New Term Loan pursuant to the New Term Loan Documents. 

“Parties” has the meaning set forth in the preamble to this Agreement.

“Paul, Weiss” means Paul, Weiss, Rifkind, Wharton & Garrison LLP, as lead counsel to the Ad Hoc Term Lender Group. 

“Permitted Transferee” means each transferee of any Company Claims/Interests who meets the requirements of Section 9.01.

“Petition Date” means the first date any of the Company Parties commences a Chapter 11 Case.

“Plan” means the joint plan of reorganization, including any exhibits and schedules thereto, filed by the Debtors under chapter 11 of the Bankruptcy Code, that embodies the Restructuring Transactions (as may be amended or supplemented from time to time in accordance with the terms of this Agreement). 

“Plan Effective Date” means the occurrence of the Effective Date (as defined in the Plan) of the Plan according to its terms. 

“Plan Supplement” means the compilation of documents and forms of documents, agreements, schedules, and exhibits to the Plan (in each case, as may be altered, amended, modified, or supplemented from time to time in accordance with this Agreement and in accordance with the Bankruptcy Code and Bankruptcy Rules) to be filed by the Debtors with the Bankruptcy Court.

“Porter Hedges” means Porter Hedges LLP as local counsel to the Ad Hoc Term Lender Group.

“Qualified Marketmaker” means an entity that (a) holds itself out to the public or the applicable private markets as standing ready in the ordinary course of business to purchase from customers and sell to customers Company Claims/Interests (or enter with customers into long and short positions in Company Claims/Interests), in its capacity as a dealer or market maker in Company Claims/Interests and (b) is, in fact, regularly in the business of making a market in claims against issuers or borrowers (including debt securities or other debt).

“Railcar Leases” means the unexpired railcar leases (excluding the Go-Forward Railcar Leases), including any amendments or modifications thereto, entered into by any Company Party as of the Petition Date. 

“Releases” has the meaning set forth in the Restructuring Term Sheet. 

“Required Consenting Stakeholders” means, as of the relevant date, Consenting Stakeholders holding at least 60.01% of the aggregate outstanding principal amount of approximately $1.559 billion Term Loans that are held by Consenting Stakeholders.

5

 

“Restructuring Expenses” means the reasonable and documented fees and expenses, subject to the terms of any applicable engagement letter or reimbursement letter as the case may be. 

“Restructuring Term Sheet” has the meaning set forth in the recitals to this Agreement and attached hereto as Exhibit A.

“Restructuring Transactions” has the meaning set forth in the recitals to this Agreement.

“Rules” means Rule 501(a)(1), (2), (3), and (7) of the Securities Act.

“Second Day Pleadings” means the “second-day” pleadings that the Company Parties file in the Chapter 11 Cases, and any orders related thereto.

“Securities Act” means the Securities Act of 1933, as amended.

“Sibelco” has the meaning set forth in Section 5.01. 

“Solicitation Materials” means all solicitation materials in respect of the Plan. 

“Strategic Partners” means the go-forward railcar lessor partners whom the Company Parties have entered into (or will enter into on or around the Petition Date) letters of intent regarding the terms and conditions of such go-forward arrangements.

“Term Loan” means loans outstanding under the Term Loan Credit Agreement. 

“Term Loan Claims” means any Claim on account of, arising under, derived from, or based upon the Term Loan Documents, including Claims for all principal amounts outstanding, interest, fees, expenses, costs, and other charges arising thereunder or related thereto.

“Term Loan Credit Agreement” means that certain Credit and Guaranty Agreement, dated June 1, 2018, by and among Covia, as borrower, certain subsidiaries of Covia, as guarantors; Barclays Bank PLC and BNP Paribas Securities Corp., as joint lead arrangers and joint bookrunners; Barclays Bank PLC, as administrative agent and collateral agent; ABN Amro Capital USA LLC, HSBC Bank USA, National Association, KBC Bank N.V. and PNC Bank, National Association, as co-syndication agents; Keybank National Association and Wells Fargo Bank, N.A., as co-documentation agents; and Citizens Bank, N.A., as managing agent, as may be amended, restated, amended and restated, supplemented, or other otherwise modified from time to time.

“Term Loan Documents” means, collectively, the Term Loan Credit Agreement and all instruments, security agreements, collateral agreements, guaranty agreements, intercreditor agreements, pledges, and other documents with respect to the Term Loan. 

“Termination Date” means the date on which termination of this Agreement as to a Party is effective in accordance with Sections 12.01, 12.02, 12.03, or 12.04.

6

 

“Transfer” means to sell, resell, reallocate, use, pledge, assign, transfer, hypothecate, participate, donate or otherwise encumber or dispose of, directly or indirectly (including through derivatives, options, swaps, pledges, forward sales or other transactions).

“Transfer Agreement” means an executed form of the transfer agreement providing, among other things, that a transferee is bound by the terms of this Agreement and substantially in the form attached hereto as Exhibit B.

1.02. Interpretation.  For purposes of this Agreement:

(a)in the appropriate context, each term, whether stated in the singular or the plural, shall include both the singular and the plural, and pronouns stated in the masculine, feminine, or neuter gender shall include the masculine, feminine, and the neuter gender;

(b)capitalized terms defined only in the plural or singular form shall nonetheless have their defined meanings when used in the opposite form;

(c)unless otherwise specified, any reference herein to a contract, lease, instrument, release, indenture, or other agreement or document being in a particular form or on particular terms and conditions means that such document shall be substantially in such form or substantially on such terms and conditions;

(d)unless otherwise specified, any reference herein to an existing document, schedule, or exhibit shall mean such document, schedule, or exhibit, as it may have been or may be amended, restated, supplemented, or otherwise modified from time to time; provided that any capitalized terms herein which are defined with reference to another agreement, are defined with reference to such other agreement as of the date of this Agreement, without giving effect to any termination of such other agreement or amendments to such capitalized terms in any such other agreement following the date hereof;

(e)unless otherwise specified, all references herein to “Sections” are references to Sections of this Agreement;

(f)the words “herein,” “hereof,” and “hereto” refer to this Agreement in its entirety rather than to any particular portion of this Agreement;

(g)captions and headings to Sections are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation of this Agreement;

(h)references to “shareholders,” “directors,” and/or “officers” shall also include “members” and/or “managers,” as applicable, as such terms are defined under the applicable limited liability company Laws; 

(i)the use of “include” or “including” is without limitation, whether stated or not; and

(j)the phrase “counsel to the Consenting Stakeholders” refers in this Agreement to each counsel specified in Section 16.10 other than counsel to the Company Parties.

7

 

Effectiveness of this Agreement

.  This Agreement shall become effective and binding upon each of the Parties at 12:00 a.m., prevailing Eastern Time, on the Agreement Effective Date, which is the date on which all of the following conditions have been satisfied or waived in accordance with this Agreement:

(a)each of the Company Parties shall have executed and delivered counterpart signature pages of this Agreement to counsel to each of the Parties; 

(b)holders of at least 50.01% of the aggregate outstanding principal amount under the Term Loan Credit Agreement shall have executed and delivered counterpart signature pages of this Agreement to counsel to each of the Parties; and

(c)the Company Parties shall have paid, or caused to be paid, all Restructuring Expenses of the Ad Hoc Term Lender Group, in each case for which an invoice has been received by the Company Parties.

Definitive Documents

.

3.01.The Definitive Documents governing the Restructuring Transactions shall include all documents (including any related orders, agreements, instruments, schedules, or exhibits) that are contemplated by this Agreement and that are otherwise necessary to implement, or otherwise relate to the Restructuring Transactions, including, without limitation, the following:  (A) the Plan; (B) the Disclosure Statement; (C) the order of the Bankruptcy Court approving the Disclosure Statement and the other Solicitation Materials; (E) the First Day Pleadings; (F) the Second Day Pleadings; (G) the Plan Supplement; (H) the motion(s) and related pleadings seeking the use of cash collateral and the Cash Collateral Order (the “Cash Collateral Documents”); (I) the agreement with respect to the New Term Loan Facility and any agreements, commitment letters, documents, or instruments related thereto (collectively, the “New Term Loan Documents”); (J) the agreement with respect to the Exit Facility and any agreements, commitment letters, documents, or instruments related thereto (the “Exit Facility Documents”); (K) any shareholder agreement, organizational documents, evidence of equity interests (including share certificates or other mutually agreed evidence of equity interests to be issued in accordance with the Plan) or other governance documents for the reorganized Debtors (the “New Organizational Documents”); (L) the definitive documentation with respect to any management incentive plan (the “MIP Documents”); (M) any new, amended, or assumed employment agreements or documents with respect to the Company Parties’ officers (the “New Employment Agreements”); (N) any motion(s), orders and related pleadings seeking approval of the Debtors’ incurrence of postpetition financing, if necessary, and all agreements, documents, interim and final orders and/or amendments in connection therewith (the “DIP Documents”); (O) the motion(s) and related pleadings seeking confirmation of the Plan and the Confirmation Order (the “Confirmation Documents”); (P) any such other agreements, pleadings, orders, and documentation desired or necessary to consummate and document the Restructuring Transactions; and (Q) any other document that has or may have a material impact on the legal or economic rights of the Consenting 

8

 

Stakeholders.  For the avoidance of doubt, Definitive Documents shall not include the Go-Forward Railcar Leases. 

3.02.The Definitive Documents not executed or in a form attached to this Agreement as of the Execution Date remain subject to negotiation and completion.  Upon completion, the Definitive Documents and every other document, deed, agreement, filing, notification, letter or instrument related to the Restructuring Transactions shall contain terms, conditions, representations, warranties, and covenants consistent in all respects with the terms of this Agreement (as it may be modified, amended, or supplemented in accordance with Section 14), including the Restructuring Term Sheet.  Further, the Definitive Documents not executed or in a form attached to this Agreement as of the Execution Date shall be in form and substance reasonably acceptable to the Company Parties and the Required Consenting Stakeholders. 

Section 4.Milestones.  The Restructuring Transactions shall be implemented in accordance with the Milestones set forth in the Restructuring Term Sheet, each of which shall be subject to extension by mutual agreement between the Company Parties and the Required Consenting Stakeholders.

Commitments of the Consenting Stakeholders

. 

5.01.General Commitments.

(a)During the Agreement Effective Period, each Consenting Stakeholder agrees, in respect of all of its Company Claims/Interests, to:

(i)support the Restructuring Transactions and act in good faith and take all commercially reasonable actions necessary to implement and consummate the Restructuring Transactions in accordance with the terms, conditions, and applicable deadlines set forth in this Agreement and the Plan, as applicable; 

(ii)use commercially reasonable efforts to assist the Company Parties to oppose any party or person from taking any actions contemplated in Section 5.01(b); and 

(iii)negotiate in good faith and use commercially reasonable efforts to execute and implement the Definitive Documents and any other required agreements to effectuate and consummate the Restructuring Transactions as contemplated by this Agreement and the Plan to which it is required to be a party.

(b)During the Agreement Effective Period, each Consenting Stakeholder agrees, in respect of all of its Company Claims/Interests, that it shall not directly or indirectly: 

(i)object to, delay, impede, or take any other action to interfere with acceptance, implementation, or consummation of the Restructuring Transactions;

(ii)propose, file, support, or vote for any Alternative Restructuring Proposal; provided, however, that notwithstanding any provisions to contrary herein, the Consenting Stakeholders have the right to continue to diligence, analyze, negotiate, and agree to an Alternative Restructuring Proposal with Sibelco NV (“Sibelco”) within thirty (30) days after the Petition Date; 

9

 

(iii)file any motion, pleading, or other document with the Bankruptcy Court or any other court (including any modifications or amendments thereof) that, in whole or in part, is not materially consistent with this Agreement or the Plan;

(iv)initiate, or have initiated on its behalf, any litigation or proceeding of any kind with respect to the Chapter 11 Cases, this Agreement, or the other Restructuring Transactions contemplated herein against the Company Parties or the other Parties other than to enforce this Agreement or any Definitive Document or as otherwise permitted under this Agreement; 

(v)exercise, or direct any other person to exercise, any right or remedy for the enforcement, collection, or recovery of any of Company Claims/Interests; 

(vi)object to, delay, impede, or take any other action to interfere with the Company Parties’ ownership and possession of their assets, wherever located, or interfere with the automatic stay arising under section 362 of the Bankruptcy Code; or

(vii)object to the Company Parties’ (a) retention of any professionals in connection with the Restructuring Transactions, if applicable, and (b) payment of the reasonable and documented fees and expenses incurred by such professionals in connection with the Restructuring Transactions; provided that such fees and expenses are incurred pursuant to and in accordance with the terms of the engagement letters between such professionals and the Company Parties.

5.02.Commitments with Respect to Chapter 11 Cases.

(a)During the Agreement Effective Period, each Consenting Stakeholder that is entitled to vote to accept or reject the Plan pursuant to its terms agrees that it shall, subject to receipt by such Consenting Stakeholder, whether before or after the commencement of the Chapter 11 Cases, of the Solicitation Materials:

(i)vote each of its Company Claims/Interests to accept the Plan by delivering its duly executed and completed ballot accepting the Plan on a timely basis following the commencement of the solicitation of the Plan and its actual receipt of the Solicitation Materials and the ballot; 

(ii)use commercially reasonable efforts to cooperate with and assist the Company Parties in obtaining additional support for the Restructuring Transactions from the Company Parties’ other stakeholders;

(iii)to the extent it is permitted to elect whether to opt out of the releases set forth in the Plan, elect not to opt out of the releases set forth in the Plan by timely delivering its duly executed and completed ballot(s) indicating such election; 

(iv)use any commercially reasonably efforts to give, subject to applicable Laws, any notice, order, instruction, or direction to the applicable Agents necessary to give effect to the Restructuring Transactions; and

10

 

(v)not change, withdraw, amend, or revoke (or cause to be changed, withdrawn, amended, or revoked) any vote or election referred to in clauses (i) and (ii) above unless a Termination Date has occurred. 

(b)During the Agreement Effective Period, each Consenting Stakeholder, in respect of each of its Company Claims/Interests, will support, and will not directly or indirectly object to, delay, impede, or take any other action to interfere with any motion or other pleading or document filed by a Company Party in the Bankruptcy Court that is consistent with this Agreement and the Plan.

Additional Provisions Regarding the Consenting Stakeholders’ Commitments

.  Notwithstanding anything contained in this Agreement, nothing in this Agreement shall: (a) be construed to prohibit any Consenting Stakeholder from contesting whether any matter, fact, or thing is a breach of, or is inconsistent with, this Agreement or the Definitive Documentation, or exercising its rights or remedies specifically reserved herein or in the Definitive Documentation; (b) be construed to prohibit or limit any Consenting Stakeholder from appearing as a party-in-interest in any matter to be adjudicated in the Chapter 11 Cases, so long as, from the Agreement Effective Date until the occurrence of a Termination Date, such appearance and the positions advocated in connection therewith are not inconsistent with this Agreement, are not prohibited by this Agreement and are not for the purpose of hindering, delaying, or preventing the consummation of the Restructuring Transaction; or (c) affect the ability of any Consenting Stakeholder to consult with any other Consenting Stakeholder, the Company Parties, or any other party in interest in the Chapter 11 Cases (including any official committee and the United States Trustee). 

Commitments of the Company Parties

.  

7.01.Affirmative Commitments.  Except as set forth in Section 8, during the Agreement Effective Period, the Company Parties agree to:

(a)support and take all steps reasonably necessary and desirable to consummate the Restructuring Transactions in accordance with this Agreement;

(b)to the extent any legal or structural impediment arises that would prevent, hinder, or delay the consummation of the Restructuring Transactions contemplated herein, take all steps reasonably necessary and desirable to address any such impediment;

(c)support and seek approval of the Releases; 

(d)use commercially reasonable efforts to obtain any and all required governmental, regulatory and/or third-party approvals for the Restructuring Transactions; 

(e)promptly pay all Restructuring Expenses of the Ad Hoc Term Lender Group, in each case for which an invoice has been received by the Company Parties; 

(f)inform counsel to the Consenting Stakeholders as soon as reasonably practicable (i) the occurrence, or failure to occur, of any event of which any Company Party has actual knowledge which occurrence or failure would be likely to cause or likely to result in, or has caused or resulted in (A) any representation or warranty of the Company Parties contained in this 

11

 

Agreement to be false in any material respect, (B) any covenant of any Company Party contained in this Agreement not to be satisfied in any material respect, or (C) any applicable condition precedent contained in the Plan or this Agreement, not to occur or become impossible to satisfy, (ii) receipt of any written notice from any third party alleging that the consent of such party is or may be required in connection with the transactions contemplated by the Restructuring Transactions, (iii) receipt of any written notice from any governmental or regulatory body in connection with this Agreement or the Restructuring Transactions, (iv) receipt of any written notice of any proceeding (including any insolvency proceeding) commenced, or, to the actual knowledge of the Company Parties, threatened against the Company, relating to or involving or otherwise affecting in any material respect the Restructuring Transactions, and (v) any matter or circumstance which is likely to be a material impediment to the implementation or consummation of the Restructuring Transactions; 

(g)provide to the Consenting Stakeholders, the Ad Hoc Term Lender Group, Paul, Weiss and Centerview: (i) reasonable access during normal business hours to the books, records, and facilities of the Company Parties, (ii) reasonable access to the management of and advisors to the Company Parties for the purpose of evaluating the Company Parties’ finances and operations and participating in the planning process with respect to the Restructuring Transactions, (iii) timely updates regarding the Restructuring Transactions, including any material developments or any material conversations with parties in interest, (iv) status of obtaining any necessary or desirable authorizations (including any consents) from any competent judicial body, governmental authority, banking, taxation, supervisory, or regulatory body, and (v) any other reasonable information related to the Restructuring Transactions reasonably requested by the Consenting Stakeholders in writing (e-mail shall suffice); 

(h)to the extent applicable, object to any motion filed with the Bankruptcy Court by any person (i) seeking the entry of an order terminating the Debtors’ exclusive right to file and/or solicit acceptances of a plan of reorganization or (ii) seeking the entry of an order terminating, annulling, or modifying the automatic stay (as set forth in section 362 of the Bankruptcy Code) with regard to any material asset that, to the extent such relief was granted, would have an adverse effect on the consummation of the Restructuring Transactions; 

(i)use its commercially reasonable efforts to (i) operate the business of the Company Parties in the ordinary course and in a manner consistent with past practices and this Agreement and (ii) preserve its material relationships with customers, suppliers, licensors, licensees, distributors, and others having material business dealings with the Company Parties, in each case, taking into account the effect of filing for chapter 11 and the Company Parties’ status as debtors-in-possession; 

(j)negotiate in good faith and use commercially reasonable efforts to execute and deliver the Definitive Documents and any other required agreements to effectuate and consummate the Restructuring Transactions as contemplated by this Agreement; 

(k)use commercially reasonable efforts to seek additional support for the Restructuring Transactions from their other material stakeholders to the extent reasonably prudent; and

12

 

(l)to the extent practicable, provide to Paul, Weiss draft copies of all Definitive Documents and any other documents that the Company Parties intend to file with the Bankruptcy Court that may affect the Consenting Stakeholders at least two (2) Business Days prior to the date when such Company Party intends to file or execute such document and shall, without limiting any approval rights set forth in this Agreement, consult in good faith with Paul, Weiss regarding the form and substance of such proposed filing with the Bankruptcy Court.

7.02.Negative Commitments.  Except as set forth in Section 8, during the Agreement Effective Period, each of the Company Parties shall not directly or indirectly:

(a)object to, delay, impede, or take any other action to interfere with acceptance, implementation, or consummation of the Restructuring Transactions; 

(b)take any action that is inconsistent in any material respect with, or is intended to frustrate or impede approval, implementation and consummation of the Restructuring Transactions described in, this Agreement or the Plan;

(c)file any pleading seeking entry of an order and/or fail to timely object to any motion filed with the Bankruptcy Court by any person seeking the entry of an order (i) directing the appointment an examiner or a trustee, (ii) converting the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, (iii) dismissing the Chapter 11 Cases, or (iv) for relief that (A) is inconsistent with this Agreement in any material respect or (B) would reasonably be expected to frustrate the purposes of this Agreement; 

(d)seek to (i) assume (including as amended) or (ii) liquidate, settle, allow any Claims related to, any unexpired lease or executory contract with a Strategic Partner, without (A) consulting in good faith with the Consenting Stakeholders and (B) using commercially reasonable efforts to obtain such Strategic Partner’s agreement to express and provide public support for the Restructuring Transactions; provided, however, that for the avoidance of doubt, the Consenting Stakeholders have the right to oppose and object with respect to the foregoing;

(e)seek to (i) reject or assume (including as amended) or (ii) liquidate, settle, allow, or object to Claims related to, any unexpired leases or executory contracts, including the Railcar Leases but excluding the Go-Forward Railcar Leases, without the prior written consent of the Required Consenting Stakeholders, with such consent not to be unreasonably withheld;

(f)except in the ordinary course of business consistent with past practice, enter into or amend, adopt, restate, supplement, or otherwise modify or accelerate any material (i) deferred compensation, incentive, retention, bonus or other compensatory arrangements, policies, programs, practices, plans or agreements, including, without limitation, offer letters, employment agreements, consulting agreements, severance arrangements, or change in control agreements with or for the benefit of any employee or (ii) any contracts, arrangements, or commitments that entitle any current or former director, officer, employee, manager, or agent to indemnification from the Company, in each case, without the prior written consent of the Required Consenting Stakeholders;

(g)subject to Section 8.01 and Section 8.02 of this Agreement, directly or indirectly propose, file, support, vote for, consent to, encourage, or take any other action in furtherance of the negotiation or formulation of any Alternative Restructuring Transaction;

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(h)enter into any settlement over $1 million regarding any Claims against or Interests in any Company Party without the prior written consent of the Required Consenting Stakeholders, with such consent not to be unreasonably withheld;

(i)modify the Plan, in whole or in part, in a manner that is not consistent with this Agreement, without the prior written consent of the Required Consenting Stakeholders; or

(j)file any motion, pleading, or Definitive Documents with the Bankruptcy Court or any other court (including any modifications or amendments thereof) that, in whole or in part, is not materially consistent with this Agreement or the Plan.

Additional Provisions Regarding Company Parties’ Commitments

.

8.01.Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement shall require a Company Party or the board of directors, board of managers, or similar governing body of a Company Party, after consulting with counsel, to take any action or to refrain from taking any action with respect to the Restructuring Transactions to the extent taking or failing to take such action would be inconsistent with applicable Law or its fiduciary obligations under applicable Law, and any such action or inaction pursuant to this Section 8.01 shall not be deemed to constitute a breach of this Agreement.

8.02.Notwithstanding anything to the contrary in this Agreement (but subject to Section 8.01), each Company Party and their respective directors, officers, employees, investment bankers, attorneys, accountants, consultants, and other advisors or representatives shall have the rights to:  (a) consider, respond to, and facilitate Alternative Restructuring Proposals received by any Company Party; (b) provide access to non-public information concerning any Company Party to any Entity or enter into Confidentiality Agreements or nondisclosure agreements with any Entity; (c) maintain or continue discussions or negotiations with respect to Alternative Restructuring Proposals; (d) otherwise cooperate with, assist, participate in, or facilitate any inquiries, proposals, discussions, or negotiation of Alternative Restructuring Proposals; and (e) enter into or continue discussions or negotiations with holders of Claims against or Equity Interests in a Company Party (including any Consenting Stakeholder), any other party in interest in the Chapter 11 Cases (including any official committee and the United States Trustee), or any other Entity regarding the Restructuring Transactions or Alternative Restructuring Proposals.  Subject to Section 8.01, if any Company Party receives a written or oral proposal or expression of interest regarding any Alternative Restructuring Proposal, within two (2) Business Days, the Company Party shall notify (with email being sufficient) Paul, Weiss and Centerview of any such proposal or expression of interest, with such notice to include a copy of such proposal, if it is in writing or otherwise provide a summary of the material terms thereof.  If the board of directors (or similar governing body) of any Company Party determines, in the exercise of its fiduciary duties, to pursue an Alternative Restructuring Proposal, such Company Party shall notify Paul, Weiss and Centerview within two (2) Business Days of such determination.  

8.03.Nothing in this Agreement shall: (a) impair or waive the rights of any Company Party to assert or raise any objection permitted under this Agreement in connection with the Restructuring Transactions; or (b) prevent any Company Party from enforcing this Agreement or contesting whether any matter, fact, or thing is a breach of, or is inconsistent with, this Agreement. 

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Transfer of Interests and Securities

.

9.01.During the Agreement Effective Period, no Consenting Stakeholder shall Transfer any ownership (including any beneficial ownership as defined in the Rule 13d-3 under the Securities Exchange Act of 1934, as amended) in any Company Claims/Interests to any affiliated or unaffiliated party, including any party in which it may hold a direct or indirect beneficial interest, unless:  

(a)in the case of any Company Claims/Interests, the authorized transferee is either (1) a qualified institutional buyer as defined in Rule 144A of the Securities Act, (2) a non-U.S. person in an offshore transaction as defined under Regulation S under the Securities Act, (3) an institutional accredited investor (as defined in the Rules), or (4) a Consenting Stakeholder; and

(b)either (1) the transferee executes and delivers to counsel to the Company Parties, at or before the time of the proposed Transfer, a Transfer Agreement or (2) the transferee is a Consenting Stakeholder thereof and the transferee provides notice of such Transfer (including the amount, type of Company Claims/Interests Transferred, and identity of the transferor) to counsel to the Company Parties at or before the time of the proposed Transfer. 

9.02.Upon compliance with the requirements of Section 9.01, the transferor shall be deemed to relinquish its rights (and be released from its obligations) under this Agreement to the extent of the rights and obligations in respect of such transferred Company Claims/Interests.  Any Transfer in violation of Section 9.01 shall be void ab initio. 

9.03.This Agreement shall in no way be construed to preclude the Consenting Stakeholders from acquiring additional Company Claims/Interests; provided, however, that (a) such additional Company Claims/Interests shall automatically and immediately upon acquisition by a Consenting Stakeholder be deemed subject to the terms of this Agreement (regardless of when or whether notice of such acquisition is given to counsel to the Company Parties or counsel to the Consenting Stakeholders) and (b) such Consenting Stakeholder must provide notice of such acquisition (including the amount, type of Company Claim/Interest acquired, and identity of the transferor) to counsel to the Company Parties within two (2) Business Days of such acquisition.  

9.04.This Section 9 shall not impose any obligation on any Company Party to issue any “cleansing letter” or otherwise publicly disclose information for the purpose of enabling a Consenting Stakeholder to Transfer any of its Company Claims/Interests.  Notwithstanding anything to the contrary herein, to the extent a Company Party and another Party have entered into a Confidentiality Agreement, the terms of such Confidentiality Agreement shall continue to apply and remain in full force and effect according to its terms, and this Agreement does not supersede any rights or obligations otherwise arising under such Confidentiality Agreements.

9.05.Notwithstanding Section 9.01, any Consenting Stakeholder may Transfer any Company Claim/Interest to a Qualified Marketmaker and a Qualified Marketmaker that acquires any Company Claims/Interests with the purpose and intent of acting as a Qualified Marketmaker for such Company Claims/Interests shall not be required to execute and deliver a Transfer Agreement in respect of such Company Claims/Interests, in each case, if (i) such Qualified 

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Marketmaker subsequently transfers such Company Claims/Interests (by purchase, sale assignment, participation, or otherwise) within five (5) Business Days of its acquisition to a transferee that is an entity that is not an affiliate, affiliated fund, or affiliated entity with a common investment advisor; (ii) the transferee otherwise is a Permitted Transferee under Section 9.01; and (iii) the Transfer otherwise is a permitted Transfer under Section 9.01.  To the extent that a Consenting Stakeholder is acting in its capacity as a Qualified Marketmaker, it may Transfer (by purchase, sale, assignment, participation, or otherwise) any right, title or interests in Company Claims/Interests that the Qualified Marketmaker acquires from a holder of the Company Claims/Interests who is not a Consenting Stakeholder without the requirement that the transferee be a Permitted Transferee.

9.06.Notwithstanding anything to the contrary in this Section 9, the restrictions on Transfer set forth in this Section 9 shall not apply to the grant of any liens or encumbrances on any claims and interests in favor of a bank or broker-dealer holding custody of such claims and interests in the ordinary course of business and which lien or encumbrance is released upon the Transfer of such claims and interests.

Representations and Warranties of Consenting Stakeholders

.  Each Consenting Stakeholder severally, and not jointly, represents and warrants that, as of the date such Consenting Stakeholder executes and delivers this Agreement and as of the Plan Effective Date:

(a)it is the beneficial or record owner of the face amount of the Company Claims/Interests or is the nominee, investment manager, or advisor for beneficial holders of the Company Claims/Interests reflected in, and, having made reasonable inquiry, is not the beneficial or record owner of any Company Claims/Interests other than those reflected in, such Consenting Stakeholder’s signature page to this Agreement, a Joinder, or a Transfer Agreement, as applicable (as may be updated pursuant to Section 9);

(b)it has the full power and authority to act on behalf of, vote and consent to matters concerning, such Company Claims/Interests;

(c)such Company Claims/Interests are free and clear of any pledge, lien, security interest, charge, claim, equity, option, proxy, voting restriction, right of first refusal, or other limitation on disposition, transfer, or encumbrances of any kind, that would adversely affect in any way such Consenting Stakeholder’s ability to perform any of its obligations under this Agreement at the time such obligations are required to be performed; 

(d)it has the full power to vote, approve changes to, and transfer all of its Company Claims/Interests referable to it as contemplated by this Agreement subject to applicable Law; 

(e)solely with respect to holders of Company Claims/Interests, (i) it is either (A) a qualified institutional buyer as defined in Rule 144A of the Securities Act, (B) not a U.S. person (as defined in Regulation S of the Securities Act), or (C) an institutional accredited investor (as defined in the Rules), and (ii) any securities acquired by the Consenting Stakeholder in connection with the Restructuring Transactions will have been acquired for investment and not with a view to distribution or resale in violation of the Securities Act; and

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(f)solely with respect to holders of Company Claims/Interests, it acknowledges that (i) the offer and sale of any securities will not be registered under the Securities Act and (ii) the offering and issuance of any securities is intended to be exempt from registration under the Securities Act pursuant to (A) Section 1145 of the Bankruptcy Code or (B) Section 4(a)(2) of the Securities Act and/or Regulation D thereunder.

Mutual Representations, Warranties, and Covenants

.  Each of the Parties represents, warrants, and covenants to each other Party, as of the date such Party executed and delivers this Agreement, on the Plan Effective Date:

(a)it is validly existing and in good standing under the Laws of the state of its organization, and this Agreement is a legal, valid, and binding obligation of such Party, enforceable against it in accordance with its terms, except as enforcement may be limited by applicable Laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability;

(b)except as expressly provided in this Agreement, the Plan, and the Bankruptcy Code, no consent or approval is required, other than any consent or approval obtained prior to, or contemporaneously with, the Agreement Effective Date, by any other person or entity in order for it to effectuate the Restructuring Transactions contemplated by, and perform its respective obligations under, this Agreement;

(c)the entry into and performance by it of, and the transactions contemplated by, this Agreement do not, and will not, conflict in any material respect with any Law or regulation applicable to it or with any of its articles of association, memorandum of association or other constitutional documents;

(d)except as expressly provided in this Agreement, it has (or will have, at the relevant time) all requisite corporate or other power and authority to enter into, execute, and deliver this Agreement and to effectuate the Restructuring Transactions contemplated by, and perform its respective obligations under, this Agreement; and

(e)except as expressly provided by this Agreement, it is not party to any restructuring or similar agreements or arrangements with the other Parties to this Agreement that have not been disclosed to all Parties to this Agreement.

Termination Events

.

12.01.Consenting Stakeholder Termination Events.   This Agreement may be terminated by the Required Consenting Stakeholders by the delivery to the Company Parties of a prior written notice in accordance with Section 16.10 hereof upon the occurrence and continuation of the following events:

(a)the breach in any material respect by a Company Party of any of the representations, warranties, obligations, or covenants of the Company Parties set forth in this Agreement that (i) is adverse to the Consenting Stakeholders seeking termination pursuant to this provision and (ii) remains uncured for five (5) Business Days after the Required Consenting Stakeholders transmit 

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a written notice to the Company Parties in accordance with Section 16.10 hereof detailing any such breach; 

(b)the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any final, non-appealable ruling or order that (i) enjoins the consummation of a material portion of the Restructuring Transactions and (ii) remains in effect for ten (10) Business Days after the Required Consenting Stakeholders transmit a written notice to the Company Parties in accordance with Section 16.10 hereof detailing any such issuance; provided, that this termination right may not be exercised by any Party that sought or requested such ruling or order in contravention of any obligation set out in this Agreement; 

(c)the Bankruptcy Court enters an order denying confirmation of the Plan and such order remains in effect for five (5) Business Days after entry of such order; 

(d)the entry of an order by the Bankruptcy Court, or the filing of a motion or application by any Company Party seeking an order (without the prior written consent of the Required Consenting Stakeholders, not to be unreasonably withheld), (i) converting one or more of the Chapter 11 Cases of a Company Party to a case under chapter 7 of the Bankruptcy Code, (ii) appointing an examiner with expanded powers beyond those set forth in sections 1106(a)(3) and (4) of the Bankruptcy Code or a trustee in one or more of the Chapter 11 Cases of a Company Party, or (iii) rejecting this Agreement;

(e)the failure to meet a Milestone, which has not been waived or extended in a manner consistent with this Agreement, unless such failure is the result of any act, omission, or delay on the part of the terminating Consenting Stakeholder in violation of its obligations under this Agreement; 

(f)the occurrence of an event of default that is not otherwise waived or cured under any Cash Collateral Document and/or DIP Document, as applicable;  

(g)any Company Party (i) files, amends, or modifies, or files a pleading seeking approval of, any Definitive Document or authority to amend or modify any Definitive Document, in a manner inconsistent with, or that constitutes a  breach of, this Agreement without the prior written consent of the Required Consenting Stakeholders, (ii) withdraws the Plan without the prior written consent of the Required Consenting Stakeholders, or (iii) publicly announces its intention to take any such acts listed in the foregoing clauses (i) and (ii); 

(h)any Company Party (i) withdraws the Plan, (ii) makes a public announcement that it intends to accept an Alternative Restructuring Proposal or withdraw the Plan or (iii) enters into a definitive agreement with respect to an Alternative Restructuring Proposal; 

(i)the Bankruptcy Court grants relief that is inconsistent with this Agreement or the Plan that is materially adverse to the Consenting Stakeholders, unless the Company Parties have sought a stay of such relief within five (5) Business Days after the date such relief has been granted, and such order is stayed, reversed, or vacated within ten (10) Business Days after the date such relief has been granted; or

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(j)the Required Consenting Stakeholders agree to an Alternative Restructuring Proposal with Sibelco, consistent with Section 5.01(b)(ii).

12.02.Company Party Termination Events.  Any Company Party may terminate this Agreement as to all Parties upon prior written notice to all Parties in accordance with Section 16.10 hereof upon the occurrence of any of the following events:

(a)the breach in any material respect of any provision set forth in this Agreement by one or more of the Consenting Stakeholders holding an amount of Term Loan Claims that would result in non-breaching Consenting Stakeholders holding less than two-thirds (66.67%) of the aggregate outstanding principal amount of Term Loans that remains uncured for a period of ten (10) Business Days after the receipt by the Consenting Stakeholders of notice of such breach;

(b)the board of directors, board of managers, or such similar governing body of any Company Party determines, subject to Section 8.01 and Section 8.02 of this Agreement, after consulting with counsel, (i) that proceeding with any of the Restructuring Transactions would be inconsistent with the exercise of its fiduciary duties under applicable Law or (ii) in the exercise of its fiduciary duties, to pursue an Alternative Restructuring Proposal; 

(c)the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any final, non-appealable ruling or order that (i) enjoins the consummation of a material portion of the Restructuring Transactions and (ii) remains in effect for thirty (30) Business Days after such terminating Company Party transmits a written notice in accordance with Section 16.10 hereof detailing any such issuance; provided, that this termination right shall not apply to or be exercised by any Company Party that sought or requested such ruling or order in contravention of any obligation or restriction set out in this Agreement; or

(d)the Bankruptcy Court enters an order denying confirmation of the Plan. 

12.03.Mutual Termination.  This Agreement, and the obligations of all Parties hereunder, may be terminated by mutual written agreement among all of the following:  (a) the Required Consenting Stakeholders; and (b) each Company Party.

12.04.Automatic Termination.  This Agreement shall terminate automatically without any further required action or notice immediately after the Plan Effective Date.

12.05.Effect of Termination.  Upon the occurrence of a Termination Date as to a Party, this Agreement shall be of no further force and effect as to such Party and each Party subject to such termination shall be released from its commitments, undertakings, and agreements under or related to this Agreement and shall have the rights and remedies that it would have had, had it not entered into this Agreement, and shall be entitled to take all actions, whether with respect to the Restructuring Transactions or otherwise, that it would have been entitled to take had it not entered into this Agreement, including with respect to any and all Claims or causes of action.  Upon the occurrence of a Termination Date prior to the Confirmation Order being entered by a Bankruptcy Court, any and all consents or ballots tendered by the Parties subject to such termination before a Termination Date shall be deemed, for all purposes, to be null and void from the first instance and shall not be considered or otherwise used in any manner by the Parties in connection with the Restructuring Transactions and this Agreement or otherwise; provided, however, any Consenting 

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Stakeholder withdrawing or changing its vote pursuant to this Section 12.05 shall promptly provide written notice of such withdrawal or change to each other Party to this Agreement and, if such withdrawal or change occurs on or after the Petition Date, file notice of such withdrawal or change with the Bankruptcy Court.  Nothing in this Agreement shall be construed as prohibiting a Company Party or any of the Consenting Stakeholders from contesting whether any such termination is in accordance with its terms or to seek enforcement of any rights under this Agreement that arose or existed before a Termination Date.  Except as expressly provided in this Agreement, nothing herein is intended to, or does, in any manner waive, limit, impair, or restrict (a) any right of any Company Party or the ability of any Company Party to protect and reserve its rights (including rights under this Agreement), remedies, and interests, including its claims against any Consenting Stakeholder, and (b) any right of any Consenting Stakeholder, or the ability of any Consenting Stakeholder, to protect and preserve its rights (including rights under this Agreement), remedies, and interests, including its claims against any Company Party or Consenting Stakeholder.  No purported termination of this Agreement shall be effective under this Section 12.05 or otherwise if the Party seeking to terminate this Agreement is in material breach of this Agreement, except a termination pursuant to Section 12.02(b) or Section 12.02(d).  Nothing in this Section 12.05 shall restrict any Company Party’s right to terminate this Agreement in accordance with Section 12.02(b).

Section 13.Disclosure; Publicity. 

The Company Parties shall, to the extent reasonably practicable and permitted by applicable law, regulation or legal or regulatory process or requirement, submit drafts to counsel to the Consenting Stakeholders of any press releases, public documents, and any and all filings with the Bankruptcy Court, the Securities Exchange Commission, or otherwise that constitute disclosure of the existence or terms of this Agreement or any amendment to the terms of this Agreement at least forty-eight hours prior to making any such disclosure, and shall afford them a reasonable opportunity under the circumstances to comment on such documents and disclosures and shall consider any such comments in good faith.  This Agreement, as well as its terms, its existence, and the existence of the negotiation of its terms are expressly subject to any existing confidentiality agreements executed by and among any of the Parties as of the date hereof; provided, however, that after the Petition Date, the Parties may disclose the existence of, or the terms of, this Agreement or any other material term of the Restructuring Transactions without the express written consent of the other Parties; provided, further, that (a) before the Petition Date, if such disclosure is required by law, subpoena, or other legal process or regulation, the disclosing Party shall afford the relevant Party a reasonable opportunity to review and comment in advance of such disclosure and shall take all reasonable measures to limit such disclosure (the expense of which, if any, shall be borne by the relevant disclosing Party) and (b) the foregoing shall not prohibit the disclosure of the aggregate percentage or aggregate principal amount of Term Loan Claims held by all the Consenting Stakeholders collectively. Any public filing of this Agreement, with the Bankruptcy Court or otherwise, that includes executed signature pages to this Agreement shall include such signature pages in redacted form with respect to the amount of Term Loan Claims held by each Consenting Stakeholder and, if so requested, with respect to the specific name of each Consenting Stakeholder (provided that the signature pages may be filed in unredacted form with the Bankruptcy Court under seal).  Notwithstanding the provisions in this Section 13, any Party may disclose, to the extent expressly consented to in writing by a Consenting Stakeholder, such Consenting Stakeholder’s identity and individual holdings.

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Amendments and Waivers.

Section 15.

(a)This Agreement may not be modified, amended, or supplemented, and no condition or requirement of this Agreement may be waived, in any manner except in accordance with this 14.

(b)This Agreement may be modified, amended, or supplemented, or a condition or requirement of this Agreement may be waived, in a writing signed by:  (1) each Company Party and (2) the Required Consenting Stakeholders; provided, however, that (i) if the proposed modification, amendment, waiver, or supplement has a material, disproportionate, and adverse effect on any of the Company Claims/Interests held by a Consenting Stakeholder, then the consent of each such affected Consenting Stakeholder shall also be required to effectuate such modification, amendment, waiver or supplement; (ii) any waiver, modification, amendment, or supplement to the definition of Required Consenting Stakeholders shall require the prior written consent of each applicable Consenting Stakeholder that is a member of the Ad Hoc Term Lender Group; and (iii) any waiver, modification, amendment, or supplement to this Section 14 shall require the prior written consent of each Party.  Any consent required to be provided pursuant to this Section 14 may be delivered by email from counsel. Any proposed modification, amendment, waiver or supplement that does not comply with this Section 14 shall be ineffective and void ab initio.

(c)The waiver by any Party of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach.  No failure on the part of any Party to exercise, and no delay in exercising, any right, power or remedy under this Agreement shall operate as a waiver of any such right, power or remedy or any provision of this Agreement, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise of such right, power or remedy or the exercise of any other right, power or remedy.  All remedies under this Agreement are cumulative and are not exclusive of any other remedies provided by Law.

Survival

.

Notwithstanding the termination of this Agreement pursuant to Section 12, the agreements and obligations of the Parties set forth in the following Sections: Section 1, Section 12.05, Section 15, and Section 16 (and any defined terms used in any such Sections) shall survive such termination and shall continue in full force and effect for the benefit of the Consenting Stakeholders in accordance with the terms hereof; provided that any liability of a Party for failure to comply with the terms of this Agreement shall survive such termination. 

 

Miscellaneous

.

16.01.Acknowledgement.  Notwithstanding any other provision herein, this Agreement is not and shall not be deemed to be an offer with respect to any securities or solicitation of votes for the acceptance of a plan of reorganization for purposes of sections 1125 and 1126 of the Bankruptcy Code or otherwise.  Any such offer or solicitation will be made only in compliance 

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with all applicable securities Laws, provisions of the Bankruptcy Code, and/or other applicable Law.

16.02.Exhibits Incorporated by Reference; Conflicts.  Each of the exhibits, annexes, signatures pages, and schedules attached hereto is expressly incorporated herein and made a part of this Agreement, and all references to this Agreement shall include such exhibits, annexes, and schedules. In the event of any inconsistency between this Agreement (without reference to the exhibits, annexes, and schedules hereto) and the exhibits, annexes, and schedules hereto, this Agreement (without reference to the exhibits, annexes, and schedules thereto) shall govern. 

16.03.Further Assurances.  Subject to the other terms of this Agreement, the Parties agree to execute and deliver such other instruments and perform such acts, in addition to the matters herein specified, as may be reasonably appropriate or necessary, or as may be required by order of the Bankruptcy Court, from time to time, to effectuate the Restructuring Transactions, as applicable.

16.04.Complete Agreement.  Except as otherwise explicitly provided herein, this Agreement constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior agreements, oral or written, among the Parties with respect thereto, other than any Confidentiality Agreement. 

16.05.GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF FORUM.  THIS AGREEMENT IS TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.  Each Party hereto agrees that it shall bring any action or proceeding in respect of any claim arising out of or related to this Agreement, to the extent possible, in the Bankruptcy Court, and solely in connection with claims arising under this Agreement:  (a) irrevocably submits to the exclusive jurisdiction of the Bankruptcy Court; (b) waives any objection to laying venue in any such action or proceeding in the Bankruptcy Court; and (c) waives any objection that the Bankruptcy Court is an inconvenient forum or does not have jurisdiction over any Party hereto.

16.06.Trial by Jury Waiver.  EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

16.07.Execution of Agreement.  This Agreement may be executed and delivered in any number of counterparts and by way of electronic signature and delivery, each such counterpart, when executed and delivered, shall be deemed an original, and all of which together shall constitute the same agreement.  Except as expressly provided in this Agreement, each individual executing this Agreement on behalf of a Party has been duly authorized and empowered to execute and deliver this Agreement on behalf of said Party.

16.08.Rules of Construction.  This Agreement is the product of negotiations among the Company Parties and the Consenting Stakeholders, and in the enforcement or interpretation hereof, 

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is to be interpreted in a neutral manner, and any presumption with regard to interpretation for or against any Party by reason of that Party having drafted or caused to be drafted this Agreement, or any portion hereof, shall not be effective in regard to the interpretation hereof.  The Company Parties and the Consenting Stakeholders were each represented by counsel during the negotiations and drafting of this Agreement and continue to be represented by counsel.  

16.09.Successors and Assigns; Third Parties.  This Agreement is intended to bind and inure to the benefit of the Parties and their respective successors and permitted assigns, as applicable.  There are no third party beneficiaries under this Agreement, and the rights or obligations of any Party under this Agreement may not be assigned, delegated, or transferred to any other person or entity. 

16.10.Notices.  All notices hereunder shall be deemed given if in writing and delivered by electronic mail to the following addresses (or at such other addresses as shall be specified by like notice):

(a)if to a Company Party, to:

Covia Holdings Corporation
3 Summit Park Drive, Suite 700

Independence, OH 44131
Attention: Chadwick P. Reynolds, EVP, Chief Legal Officer and Secretary
E-mail: chad.reynolds@coviacorp.com

 

with copies to:

Kirkland & Ellis LLP
300 North LaSalle Street
Chicago, IL 60654
Attention: Benjamin M. Rhode; Scott J. Vail
E-mail: benjamin.rhode@kirkland.com; scott.vail@kirkland.com

 

and

Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Attention: Jonathan S. Henes, P.C. 
E-mail: jhenes@kirkland.com

(b)if to a Consenting Stakeholder, to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019

Attn: Brian S. Hermann; Andrew M. Parlen; Sean A. Mitchell 

E-mail: bhermann@paulweiss.com; aparlen@paulweiss.com; smitchell@paulweiss.com

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16.11.Independent Due Diligence and Decision Making.  Each Consenting Stakeholder hereby confirms that its decision to execute this Agreement has been based upon its independent investigation of the operations, businesses, financial and other conditions, and prospects of the Company Parties.

16.12.Enforceability of Agreement.  Each of the Parties to the extent enforceable waives any right to assert that the exercise of termination rights under this Agreement is subject to the automatic stay provisions of the Bankruptcy Code, and expressly stipulates and consents hereunder to the prospective modification of the automatic stay provisions of the Bankruptcy Code for purposes of exercising termination rights under this Agreement, to the extent the Bankruptcy Court determines that such relief is required.

16.13.Waiver.  If the Restructuring Transactions are not consummated, or if this Agreement is terminated for any reason, the Parties fully reserve any and all of their rights.  Pursuant to Federal Rule of Evidence 408 and any other applicable rules of evidence, this Agreement and all negotiations relating hereto shall not be admissible into evidence in any proceeding other than a proceeding to enforce its terms or the payment of damages to which a Party may be entitled under this Agreement.

16.14.Specific Performance.  It is understood and agreed by the Parties that money damages would be an insufficient remedy for any breach of this Agreement by any Party, and each non-breaching Party shall be entitled to specific performance and injunctive or other equitable relief (without the posting of any bond and without proof of actual damages) as a remedy of any such breach, including an order of the Bankruptcy Court or other court of competent jurisdiction requiring any Party to comply promptly with any of its obligations hereunder.

16.15.Several, Not Joint, Claims.  Except where otherwise specified, the agreements, representations, warranties, and obligations of the Parties under this Agreement are, in all respects, several and not joint.

16.16.Severability and Construction.  If any provision of this Agreement shall be held by a court of competent jurisdiction to be illegal, invalid, or unenforceable, the remaining provisions shall remain in full force and effect if essential terms and conditions of this Agreement for each Party remain valid, binding, and enforceable.

16.17.Remedies Cumulative.  All rights, powers, and remedies provided under this Agreement or otherwise available in respect hereof at Law or in equity shall be cumulative and not alternative, and the exercise of any right, power, or remedy thereof by any Party shall not preclude the simultaneous or later exercise of any other such right, power, or remedy by such Party.

16.18.Capacities of Consenting Stakeholders.  Each Consenting Stakeholder has entered into this agreement on account of all Company Claims/Interests that it holds (directly or through discretionary accounts that it manages or advises) and, except where otherwise specified in this Agreement, shall take or refrain from taking all actions that it is obligated to take or refrain from taking under this Agreement with respect to all such Company Claims/Interests.  

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16.19.Email Consents.  Where a written consent, acceptance, approval, or waiver is required pursuant to or contemplated by this Agreement, pursuant to Section 3.02, Section 13, or otherwise, including a written approval by the Company Parties or the Required Consenting Stakeholders, such written consent, acceptance, approval, or waiver shall be deemed to have occurred if, by agreement between counsel to the Parties submitting and receiving such consent, acceptance, approval, or waiver, it is conveyed in writing (including electronic mail) between each such counsel without representations or warranties of any kind on behalf of such counsel. 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and year first above written. 

 

 

[Signature Page Follows.]

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COVIA HOLDINGS CORPORATION

 

	
	
Alpha Resins, LLC

	
Best Sand Corporation

	
Best Sand of Pennsylvania, Inc.

	
Bison Merger Sub I, LLC

	
Black Lab LLC

	
Cheyenne Sand Corp.

	
Construction Aggregates Corporation of Michigan, Inc.

	
Covia Finance Company LLC

	
Covia Holdings Corporation

	
Covia Specialty Minerals Inc.

	
Fairmount Logistics LLC

	
Fairmount Minerals, LLC

	
Fairmount Santrol Inc.

	
FML Resin, LLC

	
FML Sand, LLC

	
FML Terminal Logistics, LLC

	
FMSA Inc.

	
Mineral Visions Inc.

	
Self-Suspending Proppant LLC

	
Shakopee Sand LLC

	
Specialty Sands, Inc.

	
Standard Sand Corporation

	
TechniSand, Inc.

	
Wedron Silica Company

	
West Texas Housing LLC

	
Wexford Sand Co.

	
Wisconsin Industrial Sand Company L.L.C.

	
Wisconsin Specialty Sands, Inc.

 

 

By: /s/ Andrew Eich

Name: Andrew Eich, EVP and Chief Financial Officer 

Authorized Signatory 

 

[Company Parties Signature Page]

 

[Consenting Stakeholder Signature Pages Intentionally Excluded]

 

 

[Consenting Stakeholder Signature Page]

 

Execution Version

 

EXHIBIT A

Restructuring Term Sheet

 

 

 

 

______________________________________________________________________________

 

Covia Holdings Corporation

 

Amended and Restated Restructuring Term Sheet

 

July 7, 2020

______________________________________________________________________________

This Amended and Restated Term Sheet (including the exhibits attached hereto, this “Term Sheet”)2 sets forth the principal terms of a restructuring (the “Restructuring”) of the existing debt, existing equity interests in, and certain other obligations of Covia Holdings Corporation (“Covia”) on behalf of itself and certain of its subsidiaries listed on Annex 1 hereto (collectively with Covia, the “Company” or the “Debtors”), through a chapter 11 plan of reorganization (the “Plan”) to be filed by the Company in connection with commencing cases (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”).  Following the occurrence of the effective date of the Plan according to its terms (the “Restructuring Effective Date”), Covia shall be referred to herein as “Reorganized Covia”.  This Term Sheet incorporates the rules of construction as set forth in section 102 of the Bankruptcy Code.

THIS TERM SHEET DOES NOT CONSTITUTE (NOR SHALL IT BE CONSTRUED AS) AN OFFER WITH RESPECT TO ANY SECURITIES OR A SOLICITATION OF ACCEPTANCES OR REJECTIONS AS TO ANY EXCHANGE OR PLAN OF REORGANIZATION, IT BEING UNDERSTOOD THAT SUCH A SOLICITATION, IF ANY, SHALL BE MADE ONLY IN COMPLIANCE WITH section 4(a)(2) of the securities act of 1933 and/or Section 1145 of the Bankruptcy Code and APPLICABLE PROVISIONS OF SECURITIES, BANKRUPTCY, AND/OR OTHER APPLICABLE Statutes, Rules, and LAWS.

THIS TERM SHEET DOES NOT ADDRESS ALL MATERIAL TERMS THAT WOULD BE REQUIRED IN CONNECTION WITH ANY POTENTIAL RESTRUCTURING AND ANY AGREEMENT IS SUBJECT TO THE EXECUTION OF DEFINITIVE DOCUMENTATION IN FORM AND SUBSTANCE CONSISTENT WITH THIS TERM SHEET AND OTHERWISE REASONABLY ACCEPTABLE TO the Consenting STAKEHOLDERS (as defined herein) AND THE COMPANY in the manner set forth in the rsa.

THIS TERM SHEET HAS BEEN PRODUCED FOR DISCUSSION AND SETTLEMENT PURPOSES ONLY AND IS SUBJECT TO RULE 408 OF THE FEDERAL RULES OF EVIDENCE AND OTHER SIMILAR APPLICABLE STATE AND FEDERAL 

	
	 

	
2  
	
Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Amended and Restated Restructuring Support Agreement (the “RSA”) to which this Term Sheet is attached as Exhibit A.

29

 

statutes, RULES, and laws.  THIS TERM SHEET AND THE INFORMATION CONTAINED HEREIN ARE STRICTLY CONFIDENTIAL AND SHALL NOT BE SHARED WITH ANY OTHER PARTY without THE PRIOR WRITTEN CONSENT OF THE COMPANY.

 

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Restructuring Summary

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Claims and Interests to be Restructured
	
Term Loan Claims: In a principal amount not less than $1.559 billion, plus all interest accrued and unpaid from time to time or capitalized as provided in the Term Loan Agreement (as defined below), fees, and other expenses arising and payable under that certain Credit and Guaranty Agreement, dated as of June 1, 2018 (as amended, modified, or otherwise supplemented from time to time, the “Term Loan Agreement”), by and among Covia, as borrower, certain subsidiaries of Covia, as guarantors, Barclays Bank plc, as administrative agent (the “Term Loan Agent”), and the lenders party thereto from time to time (together with the other Secured Parties (as defined in Term Loan Agreement), the “Term Loan Lenders”).  The claims under the Term Loan Agreement are referred to herein as the “Term Loan Claims”.

Receivables Financing Claims: Consisting of up to $37.0 million in principal or face amount, including reimbursement obligations in respect of letters of credit, plus accrued and unpaid interest (at the non-default rate), fees, and other expenses arising and payable under that certain Receivables Financing Agreement, dated as of March 31, 2020 (as amended, modified, or otherwise supplemented from time to time, the “Receivables Financing Agreement”), by and among non-Debtor Covia Financing LLC, as borrower, PNC Bank, National Association, as administrative agent, the lenders party thereto from time to time, and certain other parties thereto.  The claims under the Receivables Financing Agreement are referred to herein as the “Receivables Financing Claims”.

Swap Agreement Claims: Consisting of a net liability on a present value basis, as of June 22, 2020, of approximately $35.8 million in obligations under five separate interest rate swap agreements that were entered into pursuant to one of the following master swap agreements: (i) that certain ISDA 2002 Master Agreement, dated as of May 30, 2018, by and among BNP Paribas and Covia, as successor in interest to Unimin Corporation (the “BNP Swap Agreement”) or (ii) that certain ISDA Master Agreement, dated as of June 28, 2018, by and among Barclays Bank PLC and Covia (the “Barclays Swap Agreement”, and collectively with the BNP Swap Agreement, the “Swap Agreements”).  The claims under the Swap Agreements are referred to herein as the “Swap Agreement Claims”.

Other Secured Debt: Approximately $16 million in aggregate principal amount, consisting of a $10 million industrial revenue bond and $6 million in other debt (collectively, the “Other Secured 

Debt”).  The claims under the Other Secured Debt are referred to herein as the “Other Secured Claims”.

HoldCo General Unsecured Claims:  Consisting of any prepetition claim against Covia that is not a Term Loan Claim, a Receivables Financing Claim, a Swap Agreement Claim, an Other Secured Claim, or a claim that is secured, subordinated, or entitled to priority under the Bankruptcy Code (the “Holdco General Unsecured Claims”).

Non-HoldCo General Unsecured Claims:  Consisting of any prepetition claim against the Company other than Covia that is not a Term Loan Claim, a Receivables Financing Claim, a Swap Agreement Claim, an Other Secured Claim, or a claim that is secured, subordinated, or entitled to priority under the Bankruptcy Code (the “Non-Holdco General Unsecured Claims”).

General Unsecured Claims: Consisting of HoldCo General Unsecured Claims and Non-HoldCo General Unsecured Claims (the “General Unsecured Claims”).

Equity Interests: As used herein, “Equity Interests” shall have the meaning ascribed to such term in the RSA.

	
	 

	
3
	
“Measurement Date” means the date of the last available month-end balance sheet information as of the date which is ten (10) business days prior to the date upon which the Company emerges from the Chapter 11 Cases in the Bankruptcy Court (“Emergence Date”).

	
“Net Working Capital Adjustment” shall equal the Target Net Working Capital Balance less the Actual Net Working Capital Balance. A Net Working Capital Adjustment greater than $0 shall increase the Minimum Liquidity at Emergence and Minimum Cash at Emergence requirements on a dollar for dollar basis and a Net Working Capital Adjustment smaller than $0 shall decrease the Minimum Liquidity at Emergence and Minimum Cash at Emergence requirements on a dollar for dollar basis.
	

	
“Target Net Working Capital Balance” shall equal the target Trade Receivables Balance plus the target Inventories Balance less the target Accounts Payable Balance as implied by the Business Plan dated May 12, 2020 (as included in the file titled “NWC Adjustment June 24, 2020.xlsx”) as of the Measurement Date.
	

	
“Actual Net Working Capital Balance” shall equal the actual Trade Receivables Balance plus the actual Inventories Balance less the actual Accounts Payable Balance as stated on Covia’s balance sheet as of the Measurement Date. 
	

	
For avoidance of doubt, the “Trade Receivables Balance” shall be equal to the sum of the following general ledger accounts on Covia’s balance sheet: Trade Receivables – Third Parties (#230010), Allowance for Doubtful Accounts (#230030), and Trade Receivables – Intra Group (#230049).
	

	
For avoidance of doubt, the “Inventories Balance” shall be equal to the sum of the following general ledger accounts on Covia’s balance sheet: Raw Materials Inventory (#210010), Work in Progress Inventory (#210030), Finished Goods Inventory (#210040), Inventory Reserve (#210041), and Parts & Supplies Inventory (#210060).
	

	
For avoidance of doubt, the “Payables Balance” shall be equal to the absolute value of the sum of the following general ledger accounts on Covia’s balance sheet: Accounts Payable (includes freight) (#530010), I/C (Payable) Receivable-Unimin Group (#190083), I/C (Payable) Receivable-Sibelco Subsidiaries (#190086).
	

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4
	
As of the Restructuring Effective Date, Covia will distribute to the Term Loan Lenders and holders of Swap Agreement Claims all excess cash on the Company’s balance sheet in excess of $175 million of total Liquidity (“Minimum Liquidity at Emergence”) and $75 million of total available cash and cash equivalents plus all cash posted to collateralize letters of credit (“Minimum Cash at Emergence”), in each case subject to adjustment for the Net Working Capital Adjustment and subject to upward adjustment for any proceeds associated with early receipt of the CARES Act Tax Refunds (to the extent scheduled to be received in FY 2021 have been received as of the Measurement Date; for the avoidance of doubt, any CARES Act Tax Refunds adjustment cannot exceed the amount included in FY 2021 in the Covia management business plan dated May 12, 2020) (the “Excess Cash Distribution”).  If the Excess Cash Distribution is (i) less than $90 million (the “Termination Threshold”), then the Consenting Stakeholders may terminate the RSA or (ii) more than $110 million, such Excess Cash Distribution will reduce the amount of New Term Loans on a dollar-for-dollar basis, subject to a maximum New Term Loan reduction of $25 million (i.e., minimum New Term Loan amount of $800 million and no cap on maximum Excess Cash Distribution) (the “Cash Adjustment”).

	
“Liquidity” means total available cash and cash equivalents plus all cash posted to collateralize letters of credit plus the lesser of the total borrowing base and the total commitment amount pursuant to the New Revolving Credit Facility less the face value of any letters of credit outstanding as of the Measurement Date. 
	

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Overview of the Restructuring
	
The Restructuring will be implemented through prearranged Chapter 11 Cases by the Company to pursue confirmation of the Plan.  Votes on the Plan will be solicited from (i) the Term Loan Lenders and holders of Swap Agreement Claims and (ii) certain holders of General Unsecured Claims.

As a component of the Restructuring, (i) the Term Loan Lenders and holders of Swap Agreement Claims will receive, in exchange for their Term Loan Claims and Swap Agreement Claims, respectively, their pro rata share of (a) all excess cash on the Company’s balance sheet as of the Measurement Date pro forma for all remaining professional fees expected to be paid through the Emergence Date, subject to the Minimum Liquidity at Emergence and the Minimum Cash at Emergence requirements, which shall be (x) increased or decreased by the Net Working Capital Adjustment3 and (y) increased if any proceeds associated with 

early receipt of the CARES Act Tax Refunds scheduled to be received in FY 2021 have been received as of the Measurement Date (for the avoidance of doubt, any CARES Act Tax Refunds adjustment cannot exceed the amount included in FY 2021 in the Covia management business plan dated May 12, 2020);4 (b) $825 million in New Term Loans pursuant to the New Term Loan Facility (each as defined below) and (c) 100% of Reorganized Covia Equity (as defined below), subject to adjustment for treatment of General Unsecured Claims and dilution from the MIP (as defined below); (ii) the holders of Other Secured Claims will have such claims reinstated; (iii) the holders of HoldCo General Unsecured Claims will receive their pro rata share of an amount to be determined of the Reorganized Covia Equity, subject to dilution from the MIP; and (iv) holders of Non-HoldCo General Unsecured Claims will receive their pro rata share of an amount to be determined of the Reorganized Covia Equity, subject to dilution from the MIP

On or around the Petition Date, the Receivables Financing Agreement shall be terminated and replaced with a letter of credit facility (the “L/C Facility”) pursuant to an interim order (the “L/C Facility Order”) authorizing, among other things, (i) Covia’s funding of a new letter of credit collateral account held at non-Debtor Covia Financing LLC, (ii) entry into the Payoff and Reassignment Agreement, dated as of June [__], 2020, among Covia, Covia Financing LLC, the Sub Originators5, PNC Bank, National Association, and PNC Capital Markets LLC (the “Payoff Agreement”), (iii) Covia’s and the Sub-Originators’ entry into and performance of their respective obligations under the Payoff Agreement and the Reimbursement Agreement for Cash-Collateralized Standby Letters of Credit, dated as of June [__], 2020, among PNC Bank, National Association, Covia Financing LLC, and Covia (the “Reimbursement Agreement” and, together with the Payoff Agreement, the “Letter of Credit Agreements”), and (iv) execution of the transactions contemplated by the Letter of Credit Agreements.

As of the Restructuring Effective Date, the Term Loan Claims, General Unsecured Claims and Equity Interests will be cancelled, released, and extinguished and will be of no further force and effect, the L/C Facility may be reinstated (or refinanced with the Exit Facility), and the Other Secured Claims will be reinstated.

	
	 

	
5  
	
The “Sub-Originators” include Debtors Best Sand Corporation, Covia Specialty Minerals Inc., Fairmount Santrol Inc., FML Sand, LLC, FML Terminal Logistics, LLC, Mineral Visions Inc., TechniSand, Inc., Wedron Silica Company, and Wisconsin Industrial Sand Company L.L.C.

	
6
	
For the avoidance of doubt, the Company may elect the PIK and cash option (the “PIK/Cash Election”) beginning on, from and after the Restructuring Effective Date through March 31, 2023 (the “Election Period”), if the Company’s pro forma FCCR is < 2.00x.  The FCCR shall be tested on a quarterly trailing twelve-month basis as if Covia had paid the all-in cash interest rate for that twelve-month period. If Covia is eligible to make the PIK/Cash Election and decides to make the PIK/Cash Election, the all-in interest rate will be LIBOR + 450 bps (100 bps floor), with 2.75% PIK and LIBOR + 175 bps (100 bps floor) payable in cash.  During any period where Covia is not eligible for the PIK/Cash Election and any time after March 31, 2023, or if Covia is eligible to make the PIK/Cash Election and decides not to make the PIK/Cash Election, in each case, the all-in interest rate will be LIBOR + 400 bps (100 bps floor), payable in cash.  During any periods in which Covia has not made the PIK/Cash Election, Covia may, at its option, pursue open market repurchases of debt with any liquidity in excess of $175 million (measured at the end of each fiscal year).

	
“FCCR” shall be calculated as a quotient, (i) the numerator of which is LTM Adj. EBITDA (provided, that such amount shall only reflect non-cash adjustments to EBITDA) minus LTM capex minus LTM cash taxes paid (for the avoidance of doubt, any LTM tax refunds shall not be included in the calculation of LTM cash taxes paid) and (ii) the denominator of which is LTM cash interest at all-cash rate of LIBOR + 400 bps (100 bps floor); provided, that, if the applicable date of determination is less than 12 months following the Restructuring Effective Date, “LTM cash interest” for purposes of the preceding clause (ii) shall be deemed to be the interest payments made or due on or prior to such date of determination (but, in each case, following the Restructuring Effective Date) at an all-cash rate of LIBOR + 400 bps (100 bps floor), on an annualized basis.
	

34

 

		
	
Post-Emergence Capital Structure
	
•As of the Restructuring Effective Date, the Company pro forma exit capital structure will consist of the following:

•New Term Loan: A $825 million senior secured term loan facility (the “New Term Loan Facility” and the loans issued thereunder, the “New Term Loans”), subject to the Cash Adjustment, with an interest rate of LIBOR + 400 bps (100 bps floor), payable in cash unless the Company elects the PIK and cash option6. The New Term Loans shall be subject to a 

minimum liquidity covenant of $50 million, to be tested quarterly and shall mature on July 31, 2026.  The Company shall be required to obtain ratings for the New Term Loans from S&P and Moody’s. Further, the New Term Loan will have other terms reasonably acceptable to the Company and the Required Consenting Stakeholders, and set forth in the Plan Supplement.

•The New Term Loans shall be secured by liens on substantially all assets of Reorganized Covia and each of its direct and indirect subsidiaries (including, for the avoidance of doubt, subsidiaries domiciled in Canada and Mexico) and shall be guaranteed by each of its direct and indirect subsidiaries of Reorganized Covia (including, for the avoidance of doubt, subsidiaries domiciled in Canada and Mexico). 

•New Revolving Credit Facility: At least a $100 million senior secured revolving credit facility (the “Exit Facility”) on terms reasonably acceptable to the Company and the Required Consenting Stakeholders, and set forth in the Plan Supplement, sufficient to replace existing letters of credit and fund the ongoing liquidity needs of Reorganized Covia and its subsidiaries.7

•Reorganized Covia Equity:  Reorganized Covia shall issue equity (the “Reorganized Covia Equity”) on the Restructuring Effective Date to the Term Loan Lenders, the holders of Swap Agreement Claims and holders of General Unsecured Claims in the amounts set forth below.

	
Proposed Treatment of Claims and Interests Under the Plan

	
	 

	
7
	
See footnote 2 for Minimum Liquidity at Emergence and Minimum Cash at Emergence.

35

 

		
	
Administrative, Priority Tax, Other Priority Claims, and Other Secured Claims
	
On or as soon as reasonably practicable following the Restructuring Effective Date, each holder of an administrative, priority tax, other priority claim, or other secured claim will receive, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for such claim:

•payment in full in cash;

•reinstatement pursuant to section 1124 of the Bankruptcy Code;

•delivery of the collateral securing any such secured claim and payment of any interest required under section 506(b) of the Bankruptcy Code; or

•such other treatment rendering such claim unimpaired.

	
Term Loan Claims and Swap Agreement Claims
	
The Term Loan Lenders and holders of Swap Agreement Claims shall receive, in full and final satisfaction of their Term Loan Claims and Swap Agreement Claims, respectively, their pro rata share of the following consideration in accordance with the Plan:

•all excess cash on the Company’s balance sheet as of the Measurement Date pro forma for all remaining professional fees expected to be paid through the Emergence Date, subject to Minimum Liquidity at Emergence and Minimum Cash at Emergence requirements, which shall be (a) increased or decreased by the Net Working Capital Adjustment, and which shall be (b) increased if any proceeds associated with early receipt of the CARES Act Tax Refunds scheduled to be received in FY 2021 have been received as of the Measurement Date (for the avoidance of doubt, any CARES Act Tax Refunds adjustment cannot exceed the amount included in FY 2021 in the Covia management business plan dated May 12, 2020); 

•$825 million in New Term Loans pursuant to the New Term Loan Facility, subject to the Cash Adjustment; and

•100% of the Reorganized Covia Equity, less an amount that is acceptable to the Required Consenting Stakeholders and Covia on account of the treatment of General Unsecured Claims and dilution from the MIP.

•

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Receivables Financing Claims
	
All Receivables Financing Claims (other than certain indemnifications surviving under the Receivables Financing Agreement) shall be terminated pursuant to the L/C Facility Order.  Among other forms of relief, the L/C Facility Order:

•authorizes Covia to make a cash capital contribution to Covia Financing LLC in an amount sufficient to pay all obligations under the Receivables Financing Agreement and to fund an L/C collateral account held at Covia Financing LLC with cash to secure Covia Financing LLC’s 

reimbursement obligations under the Reimbursement Agreement in an amount at all times equal to 105% of the undrawn face amount of the outstanding letters of credit;

•authorizes Covia to make cash capital contributions to Covia Financing LLC in the future to cash collateralize additional letters of credit in accordance with the Reimbursement Agreement in amounts up to 105% of the undrawn face amount of such future letters of credit;

•authorizes Covia to accept the transfer from Covia Financing LLC of the pool receivables held by Covia Financing LLC in connection with the Receivables Financing;8 and

•pursuant to section 364(c)(1) of the Bankruptcy Code, grants (i) PNC Bank, National Association superpriority administrative claims with priority in payment with respect to the indemnity obligations of Covia under the Reimbursement Agreement and (ii) Covia Financing LLC and the PNC Bank, National Association superpriority administrative claims with priority in payment with respect to indemnity obligations of the applicable Debtors under the Receivables Financing Agreement, in each case over any and all administrative expenses of the kinds specified in sections 503(b) and 507(b) of the Bankruptcy Code, other than with respect to the “Carve Out” (as to be defined in the Cash Collateral Order).

	
HoldCo General Unsecured Claims
	
The holders of HoldCo General Unsecured Claims shall receive, in full and final satisfaction of their HoldCo General Unsecured Claims, their pro rata share of an amount to be determined of the Reorganized Covia Equity, subject to dilution from the MIP.

	
Non-HoldCo General Unsecured Claims
	
The holders of Non-HoldCo General Unsecured Claims shall receive, in full and final satisfaction of their Non-HoldCo General Unsecured Claims, their pro rata share of an amount to be determined of the Reorganized Covia Equity, subject to dilution from the MIP.

	
	 

	
8  
	
For the avoidance of doubt: (a) nothing contained in the L/C Facility Order will require (or be construed to require) Covia to transfer any of the A/R Assets (as defined in the L/C Facility Order) to any Sub-Originator following the A/R Assets Transfer (as defined in the L/C Facility Order); and (b) nothing contained in the L/C Facility Order shall prohibit (or be construed to prohibit) Covia from transferring any of the A/R Assets to any Sub-Originator following the A/R Assets Transfer.

37

 

		
	
Section 510(b) Claims
	
On the Restructuring Effective Date, all claims arising under section 510(b) of the Bankruptcy Code shall be discharged without any distribution.

	
Equity Interests
	
The Equity Interests will be cancelled, released and extinguished as of the Restructuring Effective Date and will be of no further force or effect, and the holders of Equity Interests will not receive any share of the Reorganized Covia Equity.

	
Intercompany Claims
	
All claims held by one Debtor or an affiliate thereof in any other Debtor or an affiliate thereof will be, at the option of Reorganized Covia with the consent of the Required Consenting Stakeholders, (a) reinstated or (b) distributed, contributed, set off, settled, cancelled and released, or otherwise addressed at the option of the Debtors; provided that no distributions shall be made on account of any such Intercompany Claims.

	
Intercompany Interests
	
All interests held by one Debtor in any other Debtor will be, at the option of Covia, (a) reinstated or (b) cancelled, released, and extinguished without any distribution at the Debtors’ election with the consent of the Required Consenting Stakeholders.

	
Implementation 

	
Structuring
	
The Restructuring contemplated by this Term Sheet, including the corporate structure of Reorganized Covia and its direct and indirect subsidiaries, shall be subject to further negotiation and definitive documentation and structured in a manner as determined by Covia and the Required Consenting Stakeholders to be tax efficient.

	
	 

	
9  
	
All motions and orders (including the Plan, Disclosure Statement, and motion for approval of the Disclosure Statement) that are specified opposite “Milestones” above shall be in form and substance reasonably acceptable to Covia and the Required Consenting Stakeholders as provided in the RSA.

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Milestones9
	
The Restructuring must conform to the following timetable (each event, a “Milestone”); provided that such Milestones may be extended by written agreement between the Company and the Required Consenting Stakeholders:

•the Plan, Disclosure Statement, and a motion for approval of the Disclosure Statement shall be filed in the Chapter 11 Cases within 30 days of the Petition Date;

•a motion for an order setting the claims bar date in the Chapter 11 Cases shall be filed within 14 days of the Petition Date;

•an order setting the general claims bar date in the Chapter 11 Cases shall be entered by the Bankruptcy Court within 60 days of the Petition Date;

•an order approving the Railcar Lease Rejection Motion shall be entered by the Bankruptcy Court within 60 days of the Petition Date, unless the Bankruptcy Court grants an extension of the period contemplated by Section 365(d)(5) of the Bankruptcy Code, in which case this 60 day period shall be correspondingly extended;

•an order approving the Disclosure Statement shall be entered by the Bankruptcy Court within 60 days of the filing of the Plan and Disclosure Statement;

•an order confirming the Plan shall be entered by the Bankruptcy Court within 45 days of the entry of an order approving the Disclosure Statement; and

•the Restructuring Effective Date shall occur within 150 days of the Petition Date (the “Outside Date”).

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Conditions Precedent to the Restructuring Effective Date
	
The occurrence of the Restructuring Effective Date shall be subject to the following conditions precedent:

•the orders approving the Disclosure Statement and the Plan shall have been entered and such orders shall not have been stayed, modified, or vacated on appeal;

•the Definitive Documents shall be approved by the parties thereto, consistent with their consent and approval rights set forth in the RSA;

•the RSA shall not have been terminated and the RSA shall remain in full force and effect in accordance with its terms;

•entry into the New Term Loan and the Exit Facility (in each case, with all conditions precedent thereto having been satisfied or waived);

•issuance of the Reorganized Covia Equity;

•establishment of a professional fee escrow account funded in the amount of estimated accrued but unpaid professional fees incurred by the Company during the Chapter 11 Cases;

•payment of all reasonable and documented fees and expenses incurred at any time in connection with the Company by (a) the Term Loan Agent, (b) Paul Weiss, Rifkind Wharton & Garrison LLP, as lead counsel to the ad hoc group of Term Loan Lenders, (c) Porter Hedges LLP as local counsel to the ad hoc group of Term Loan 

Lenders, (d) Centerview Partners LLC, as financial advisor to the ad hoc group of Term Loan Lenders, (e) Lyons, Benenson & Company Inc. as compensation consultant to the ad hoc group of Term Loan Lenders, and (f) any other professional retained by the ad hoc group of Term Loan Lenders with the Company’s prior written consent; and

•all authorizations, consents, regulatory approvals, rulings, or documents that are necessary to implement and effectuate the Plan shall have been obtained.

	
Corporate Governance and Employee Matters

	
Board of Directors
	
The constitution and size of the board of directors of Reorganized Covia (the “Reorganized Board”) shall be determined by the Required Consenting Stakeholders; provided, that the Reorganized Board shall include the Chief Executive Officer of Reorganized Covia

The members of the Reorganized Board will be identified at or prior to the hearing to consider confirmation of the Plan.  The senior management team of Covia will have consultation rights with respect to the post-emergence governance of Reorganized Covia.

	
Corporate Governance Documents
	
In connection with the Restructuring Effective Date, and consistent with section 1123(a)(6) of the Bankruptcy Code, Reorganized Covia shall adopt customary corporate governance documents, including amended and restated certificates of incorporation, bylaws, and shareholders’ agreements in form and substance acceptable to the Required Consenting Stakeholders, in consultation with Covia.

40

 

		
	
Employment Obligations
	
Unless otherwise amended or modified as set forth in the Plan Supplement, and subject to the terms attached hereto as Annex 2, all employee wages, compensation, benefits, severance plans, and incentive programs in place with the Company as of the Restructuring Effective Date (including, but not limited to, the Company’s non-qualified deferred compensation plans) shall be assumed by Reorganized Covia and shall remain in place as of the Restructuring Effective Date, and Reorganized Covia will continue to honor such agreements, arrangements, programs, and plans, in each case, so long as current or future liabilities associated with such programs have been disclosed to the advisors to the Ad Hoc Term Lender Group prior to the Restructuring Effective Date (including, for the avoidance of doubt, any of the foregoing entered into or otherwise made effective after the date 

of the RSA but prior to the Restructuring Effective Date).  Notwithstanding the foregoing, pursuant to section 1129(a)(13) of the Bankruptcy Code, from and after the Restructuring Effective Date, all retiree benefits (as such term is defined in section 1114 of the Bankruptcy Code), if any, shall continue to be paid in accordance with applicable law.

	
Employment Agreements
	
The Plan shall provide for the entry by certain members of the senior management team of Covia into new employment agreements, which shall be on the terms set forth in the Employment Agreement Term Sheet attached hereto as Annex 2.

	
Indemnification of Prepetition Directors, Officers, Managers, et al.
	
Under the Restructuring, all indemnification provisions currently in place (whether in the by-laws, certificates of incorporation or formation, limited liability company agreements, other organizational documents, board resolutions, indemnification agreements, employment contracts, or otherwise) for the current and former directors, officers, managers, employees, attorneys, accountants, investment bankers, and other professionals of the Company, as applicable, shall be assumed and survive the effectiveness of the Restructuring.

	
Management Incentive Plan (“MIP”)
	
Reorganized Covia shall adopt and implement a MIP as described in Annex 2.

	
Miscellaneous Provisions

	
Debtor Releases, Third-Party Releases, and Exculpation
	
The exculpation provisions, the Company releases, and the “third-party” releases to be included in the Plan will be as set forth in Annex 3 hereto in all material respects.

The foregoing exculpation and releases shall be subject to the applicable releasee’s support of the Restructuring Transactions.

	
Executory Contracts and Unexpired Leases
	
On the Restructuring Effective Date, except as otherwise provided herein, each Executory Contract and Unexpired Lease (to be scheduled and attached to the Plan) shall be deemed assumed as of the Restructuring Effective Date by the applicable Debtor pursuant to sections 365 and 1123 of the Bankruptcy Code, unless such Executory Contract or Unexpired Lease:  (i) was previously assumed, assumed and assigned, or rejected by the Company; (ii) previously expired or terminated pursuant to its own terms; (iii) is identified on the Rejected Executory Contract and Unexpired Lease List (to be appended as a schedule to the Plan); or (iv) is the subject of a motion to reject that is pending on the Restructuring Effective Date.

41

 

		
	
Regulatory Requirements
	
All parties shall abide by, and use their reasonable best efforts to obtain, any regulatory and licensing requirements or approvals to 

consummate the Restructuring as promptly as practicable including, but not limited to, requirements or approvals that may arise as a result of such party’s equity holdings in Reorganized Covia.

	
Exemption from SEC Registration
	
The issuance of all securities in connection with the Plan will be exempt to the extent permitted under section 1145 of the Bankruptcy Code and otherwise pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, or Regulation D thereunder.

	
Registration Rights
	
Customary registration rights will be provided to Consenting Stakeholders that, at the time the Plan is consummated, are unable to sell under Rule 144 without being limited by the volume limitations thereunder; provided that such registration rights will fall away for any such Consenting Stakeholder at the time such Consenting Stakeholder is able to sell under Rule 144 without being limited by the volume limitations thereunder.

 

 

42

 

Annex 1

Debtors

Alpha Resins, LLC

Best Sand Corporation

Best Sand of Pennsylvania, Inc.

Bison Merger Sub I, LLC

Black Lab LLC

Cheyenne Sand Corp.

Construction Aggregates Corporation of Michigan, Inc.

Covia Finance Company LLC

Covia Specialty Minerals Inc.

Fairmount Logistics LLC

Fairmount Minerals, LLC

Fairmount Santrol Inc.

FML Resin, LLC

FML Sand, LLC

FML Terminal Logistics, LLC

FMSA Inc.

Mineral Visions Inc.

Self-Suspending Proppant LLC

Shakopee Sand LLC

Specialty Sands, Inc.

Standard Sand Corporation

Technisand, Inc.

Wedron Silica Company

West Texas Housing LLC

Wexford Sand Co.

Wisconsin Industrial Sand Company L.L.C.

Wisconsin Specialty Sands, Inc.

 

 

Annex 2

Employment Agreement Term Sheet

(See attached.)

 

 

FINAL

COVIA HOLDINGS CORPORATION

MANAGEMENT EMPLOYMENT CONTRACTS

This term sheet (the “Term Sheet”) summarizes the proposed management employment contracts for Covia Holdings Corporation (the “Company”).

	
Overview:
	
General.  Prior to the date on which the Plan Supplement is filed (the “Plan Supplement Date”), the requisite term loan lenders that are parties to the RSA (the “Lenders”) will notify each member of the Company’s executive leadership team identified on Exhibit A to this Term Sheet (each, an “Executive”) whether the Executive is expected to continue in employment with the Company following the effective date of the Company’s Plan of Reorganization (the “Emergence Date”).  If the Executive is expected to continue in employment, then the Company and such Executive will enter into an employment contract (the “Agreement”) that will be effective on the Emergence Date and that is consistent in all material respects with this Term Sheet.  If the Executive is not expected to continue in employment, then the Executive will be promptly terminated by the Company following the Emergence Date, and will receive the Executive’s Change in Control Severance (as described below) on the terms and conditions set forth in this Term Sheet. 

Term.  Each Agreement shall have an initial term of three (3) years that automatically extends for consecutive twelve (12)-month periods unless either party provides at least sixty (60) days’ prior written notice of non-renewal (the period the Agreement is in effect, the “Term”).

	
Position:
	
Title.  Each Executive will have the title and position specified on Exhibit A to this Term Sheet and will have the duties and responsibilities customarily associated with such position in a company of the size and nature of the Company.

	
Compensation and Benefits:
	
Base Salary.  Each Executive’s base salary (“Base Salary”) is set forth on Exhibit A to this Term Sheet.

Annual Bonus.  Each Executive’s target bonus opportunity (“Target Bonus”) is set forth on Exhibit A to this Term Sheet.  Each Executive will earn an annual bonus based on the achievement of reasonably attainable performance goals established in good faith by the Company’s Compensation Committee of the board of directors of the reorganized Company.

Benefit Plans.  Each Executive will be entitled to participate in any employee benefit plan that the Company has adopted or may adopt, maintain or contribute to for the benefit of its employees generally and/or for the benefit of its executives, subject to satisfying the applicable eligibility requirements, except to the extent such plans are duplicative of the benefits otherwise provided in the Agreement.

Long-Term Incentive Compensation.  Each Executive who is employed by the Company on the applicable grant date or has not indicated an intention to terminate due to Constructive Termination prior to the grant date will receive one or more awards under a cash- and equity-based management incentive plan (the “MIP”).  The detailed terms of the MIP shall provide for an incentive pool (covering a specified aggregate percentage of the Company’s post-Emergence Date equity that will be included in the Plan Supplement), emergence grants, individual allocations of emergence and future grants, conditions of emergence and future grants, and other MIP terms and conditions, as established by the board of directors of the reorganized Company within 90 days after the Emergence Date. 

 

 

	
Termination:
	
General.  Each Executive’s employment will terminate (i) automatically upon Executive’s death, (ii) due to Executive becoming disabled within the meaning of the Company’s long-

term disability plan applicable to the Executive (a “Disability”), (iii) upon written notice by the Company with or without Cause, or (iv) upon written notice by Executive whether or not due to a Constructive Termination.

Severance.10  Upon a termination of Executive’s employment (i) by the Company without Cause, (ii) by Executive due to a Constructive Termination or (iii) upon expiration of the Term due to non-renewal of the Agreement by the Company (each, a “Qualifying Termination”), Executive will receive: (A) a cash lump sum severance payment equal to the product of (x) the severance multiple specified for Executive on Exhibit A to this Term Sheet and (y) the sum of Executive’s Base Salary and Target Bonus, (B) a pro rata annual bonus for the performance period in which such termination occurs, with the pro-ration determined based on the number of days that Executive was employed by the Company during the performance period and the amount of the annual bonus determined based on actual performance for the entire performance period (a “Pro Rata Bonus”), (C) reimbursement of premiums under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for the number of months specified for Executive on Exhibit A to this Term Sheet, and (D) outplacement assistance services for the number of months specified for Executive on Exhibit A to this Term Sheet.  Notwithstanding the current definition of Constructive Termination, during the four (4)-month period immediately following the Emergence Date, if an Executive chooses to quit as a result of being dissatisfied with the MIP opportunity provided by the new Board, the Company will treat such resignation as a Constructive Termination and pay such Executive the standard (non-enhanced) severance. 

Change in Control Severance.  If Executive’s Qualifying Termination occurs within the four (4)-month period immediately preceding, or the two (2)-year period immediately following, a Change in Control (to be defined in a customary manner for restructuring MIP arrangements and included in the definitive documentation governing the MIP), then (A) Executive’s severance multiple will be increased as set forth on Exhibit A to this Term Sheet, and (B) the Pro Rata Bonus will be determined based on deemed achievement of the performance criteria at target levels.  The Agreement will include an explicit waiver that the emergence will not be deemed a Change in Control; however, if the Executive’s employment is terminated by the Company without Cause or by the Executive due to a Constructive Termination (other than as a result of being dissatisfied with the MIP opportunity provided by the new Board), in either case, within the four (4)-month period immediately following the Emergence Date, then the Company will pay such Executive the Change in Control Severance.

Disability Severance.  Upon a termination of Executive’s employment due to Executive’s death or Disability, Executive will receive a Pro Rata Bonus.

Release.  Executive will be required to execute and not revoke a customary release of claims that will be attached to the Agreement.

Section 280G.  Section 280G and 4999 language to be included, to substantively match the Executive Severance Plan language.

	
Restrictive Covenants:
	
General.  The Agreement will include customary confidentiality, trade secret, Company property, non-compete, employee non-solicit/non-hire, and non-disparagement covenants.

	
	 

	
10     
	
Note to Draft:  Severance terms for Agreement with C. Jones may vary from this Term Sheet in order to accommodate terms of existing retention agreement. 

 

 

 

	
Dispute Resolution Provisions:
	
Governing Law.  Ohio

Choice of Forum.  Ohio

Dispute Resolution.  Arbitration

Attorney’s Fees.  The Company will reimburse the Executive for costs and expenses (including reasonable attorneys’ fees) for claims based on events occurring within 120 days after the Emergence Date if the Executive substantially prevails on a material issue.  For all other claims, each party will bear its own costs and expenses.

	
Definitions:
	
“Cause,” “Disability” and “Constructive Termination” will have the meanings set forth in the Covia Executive Severance Plan.

	
Final Documentation:
	
The final documentation related to the Agreements will not contain any material restrictions, limitations or additional obligations that are not set forth herein.  

 

 

 

 

EXHIBIT A

	
Name

(Title & Position)
	
Base Salary
	
Target Bonus Percentage
	
Severance Multiple
	
Change in Control Severance Multiple
	
Benefits Continuation Period
	
Outplacement Assistance Services

	
Richard Navarre (Chairman, President and Chief Executive Officer)
	
$1,050,000
	
115%
	
2.0x
	
2.99x
	
24 months
	
18 months

	
Campbell Jones (EVP, Chief Operating Officer)
	
$725,000
	
75%
	
1.5x
	
2.0x
	
18 months
	
12 months

	
Andrew Eich (EVP, Chief Financial Officer)
	
$550,000
	
75%
	
1.5x
	
2.0x
	
18 months
	
12 months

	
Brian Richardson (EVP, Chief Transformation Officer)
	
$475,000
	
75%
	
1.5x
	
2.0x
	
18 months
	
12 months

	
Chad Reynolds (EVP, Chief Legal Officer and Secretary)
	
$462,000
	
75%
	
1.5x
	
2.0x
	
18 months
	
12 months

	
Cameron Berry (EVP, Energy)
	
$330,000
	
60%
	
1.5x
	
2.0x
	
18 months
	
12 months

	
Paolo Gennari (EVP, Industrial)
	
$330,000
	
60%
	
1.5x
	
2.0x
	
18 months
	
12 months

	
[●]

(SVP)
	
$[●]
	
[●]%
	
1.0x
	
1.5x
	
12 months
	
9 months

	
[●]

(VP)
	
$[●]
	
[●]%
	
0.75x
	
1.0x
	
9 months
	
6 months

 

 

 

 

 

 

Annex 3

Debtor Releases, Third-Party Releases, and Exculpation

		
	
Definitions
	
The following terms shall have the following definitions for purposes of this Annex 3:

•“Exculpated Parties” means, collectively, and in each case in its capacity as such: (a) each of the Debtors; (b) each of the Reorganized Debtors11; (c) each of the Consenting Stakeholders; (d) the Term Loan Agent; (e) each current and former Affiliate12 of each Entity in clauses (a) through (d); and (f) each Related Party13 of each Entity in clauses (a) through (e).

•“Released Parties” means, collectively, and in each case in its capacity as such: (a) each of the Debtors; (b) each of the Reorganized Debtors; (c) each of the Consenting Stakeholders; (d) the Term Loan Agent; (e) each current and former Affiliate of each Entity in clauses (a) through (d); and (f) each Related Party of each Entity in clauses (a) through (e); provided that any holder of a Claim against or Equity Interest in the Debtors that votes against or objects to the Plan or opts out of the Third Party Release14 shall not be a Released Party.

•“Releasing Parties” means, collectively, and in each case in its capacity as such: (a) each of the Debtors; (b) each of the Reorganized Debtors; (c) each of the Consenting Stakeholders; (d) the Term Loan Agent; (e) each holder of Claims or Equity Interests that (i) votes in favor of the Plan or (ii) abstains from voting, is not entitled to vote, or votes to reject the Plan and does not opt out of the Third Party Release on a timely submitted ballot or opt-out form; (f) each current and former Affiliate of each Entity in clauses (a) through (e); and (g) each Related Party of each Entity in clauses (a) through (f).

	
	 

	
11  
	
“Reorganized Debtor” means, collectively, and each in its capacity as such, the Debtors, as reorganized pursuant to and under the Plan or any successor thereto, by merger, consolidation, or otherwise, on or after the Restructuring Effective Date, and from and after the Restructuring Effective Date, shall include (without limitation) Reorganized Covia.

	
12  
	
“Affiliate” has the meaning set forth in section 101(2) of the Bankruptcy Code.

	
13  
	
“Related Party” means, collectively, current and former directors, managers, officers, equity holders (regardless of whether such interests are held directly or indirectly), affiliated investment funds or investment vehicles, predecessors, participants, successors, assigns, subsidiaries, affiliates, managed accounts or funds, partners, limited partners, general partners, principals, members, management companies, fund advisors, employees, agents, advisory board members, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, and other professionals.

	
14  
	
“Third Party Release” means the release provided by the Releasing Parties in favor of the Released Parties as set forth in this Annex 3.

 

			
	
 
	
 
	
 

 

 

		

	
	 

	
15  
	
“Estate” means, as to each Debtor, the estate created for such Debtor in the Chapter 11 Cases pursuant to section 541 of the Bankruptcy Code upon the commencement of the Chapter 11 Cases.

	
16  
	
“Causes of Action” means claims, interests, damages, remedies, causes of action, demands, rights, actions, controversies, proceedings, agreements, suits, obligations, liabilities, accounts, defenses, offsets, powers, privileges, licenses, Liens, indemnities, guaranties, and franchises of any kind or character whatsoever, whether known or unknown, foreseen or unforeseen, existing or hereinafter arising, contingent or non-contingent, liquidated or unliquidated, secured or unsecured, assertable, directly or derivatively, matured or unmatured, suspected or unsuspected, in contract, tort, law, equity, or otherwise.  Causes of Action also include: (a) all rights of setoff, counterclaim, or recoupment and claims under contracts or for breaches of duties imposed by law or in equity; (b) the right to object to or otherwise contest Claims or Equity Interests; (c) claims pursuant to section 362 or chapter 5 of the Bankruptcy Code; (d) such claims and defenses as fraud, mistake, duress, and usury, and any other defenses set forth in section 558 of the Bankruptcy Code; and (e) any Avoidance Action.

	
“Lien” has the meaning set forth in section 101(37) of the Bankruptcy Code.
	

	
“Avoidance Actions” means any and all actual or potential avoidance, recovery, subordination, or other Claims, Causes of Action, or remedies that may be brought by or on behalf of the Debtors or their Estates or other authorized parties in interest under the Bankruptcy Code or applicable non-bankruptcy law, including Claims, Causes of Action, or remedies under sections 502, 510, 542, 544, 545, 547 through 553, and 724(a) of the Bankruptcy Code or under similar local, state, federal, or foreign statutes and common law, including fraudulent transfer laws.
	

 

			
	
 
	
 
	
 

 

 

		
	
Releases by the Debtors
	
Pursuant to section 1123(b) of the Bankruptcy Code, on and after the Restructuring Effective Date, in exchange for good and valuable consideration, including the obligations of the Debtors under the Plan and the contributions of the Released Parties to facilitate and implement the Plan, to the fullest extent permissible under applicable law, as such law may be extended or integrated after the Restructuring Effective Date, each Released Party is deemed conclusively, absolutely, unconditionally, irrevocably, and forever released and discharged by each and all of the Debtors, the Reorganized Debtors, and their Estates15, in each case on behalf of themselves and their respective successors, assigns, and representatives, and any and all other Entities who may purport to assert any Cause of Action16, directly or derivatively, by, through, for, or because of the foregoing Entities, from any and all Causes of Action, including any derivative claims asserted or assertable on behalf of any of the Debtors, whether known or unknown, foreseen or unforeseen, matured or unmatured, existing or hereafter arising, in law, equity, contract, tort, or otherwise, that the Debtors, the Reorganized Debtors, or their Estates or Affiliates, as applicable, would have been legally entitled to assert in its own right (whether individually or collectively) or on behalf of the holder of any Claim against or Equity Interest in the Debtors or other Entity, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Debtors’ capital structure, the assertion or enforcement of rights and remedies against the Debtors, the Debtors’ in- or out-of-court restructuring efforts, intercompany transactions between or among the Debtors and/or their Affiliates, the purchase, sale, or rescission of the purchase or sale of any Equity Interest of the Debtors or the Reorganized Debtors, the subject matter of, or the transactions or events giving rise to, any Claim against or Equity Interest in the Debtors that is treated in the Plan, the business or contractual arrangements between any 

Debtor and any Released Party, the Term Loan Agreement or documents ancillary thereto, the Chapter 11 Cases and related adversary proceedings, the formulation, preparation, dissemination, negotiation, filing, or consummation of the RSA, the Disclosure Statement, the Plan, the Plan Supplement, any Definitive Documents, or any Restructuring Transaction, contract, instrument, release, or other agreement or document created or entered into in connection with the RSA, the Disclosure Statement, the Plan, the Plan Supplement, or the Definitive Documents, the filing of the Chapter 11 Cases, the pursuit of Confirmation17, the pursuit of Consummation18, or the administration and implementation of the Plan, including providing any legal opinion requested by any Entity regarding any transaction, contract, instrument, document, or other agreement contemplated by the Plan or the reliance by any Released Party on the Plan or the Confirmation Order in lieu of such legal opinion, the issuance or distribution of securities pursuant to the Plan, or the distribution of property under the Plan or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or other occurrence taking place on or before the Restructuring Effective Date related to or related to any of the foregoing.  Notwithstanding anything to the contrary in the foregoing, the releases set forth above do not release any obligations of any Entity arising after the Restructuring Effective Date under the Plan, the Confirmation Order, any Restructuring Transaction, or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan.

	
	 

	
17  
	
“Confirmation” means the Bankruptcy Court’s entry of the Confirmation Order on the docket of the Chapter 11 Cases.

	
18  
	
“Consummation” means the occurrence of the Restructuring Effective Date.

 

			
	
 
	
 
	
 

 

 

		
	
Releases by Holders of Claims and Equity Interests
	
On and after the Restructuring Effective Date, in exchange for good and valuable consideration, including the obligations of the Debtors under the Plan and the contributions of the Released Parties to facilitate and implement the Plan, to the fullest extent permissible under applicable law, as such law may be extended or integrated after the Restructuring Effective Date, each of the Releasing Parties is deemed to have conclusively, absolutely, unconditionally, irrevocably, and forever released and discharged each Debtor, Reorganized Debtor, and Released Party from any and all Causes of Action, whether known or unknown, foreseen or unforeseen, matured or unmatured, existing or hereafter arising in law, equity, contract, tort, or otherwise, including any derivative claims asserted or assertable on behalf of any of the Debtors, the Reorganized Debtors, or their Estates or Affiliates, as applicable, that such Entity would have been legally entitled to assert in its own right (whether individually or collectively) or on behalf of the holder of any Claim against or Equity Interest in the Debtors or other Entity, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Debtors’ capital structure, the assertion or enforcement of rights and remedies against the Debtors, the Debtors’ in- or out-of-court restructuring efforts, intercompany transactions between or among the 

Debtors and/or their Affiliates, the purchase, sale, or rescission of the purchase or sale of any Equity Interest of the Debtors or the Reorganized Debtors, the subject matter of, or the transactions or events giving rise to, any Claim against or Equity Interest in the Debtors that is treated in the Plan, the business or contractual arrangements between any Debtor and any Released Party, the Term Loan Agreement or documents ancillary thereto, the Chapter 11 Cases and related adversary proceedings, the formulation, preparation, dissemination, negotiation, filing, or consummation of the RSA, the Disclosure Statement, the Plan, the Plan Supplement, any Definitive Document, or any Restructuring Transaction, contract, instrument, release, or other agreement or document created or entered into in connection with the RSA, the Disclosure Statement, the Plan, the Plan Supplement, or any Definitive Document, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, or the administration and implementation of the Plan, including providing any legal opinion requested by any Entity regarding any transaction, contract, instrument, document, or other agreement contemplated by the Plan or the reliance by any Released Party on the Plan or the Confirmation Order in lieu of such legal opinion, the issuance or distribution of securities pursuant to the Plan, or the distribution of property under the Plan or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or other occurrence taking place on or before the Restructuring Effective Date related or relating to any of the foregoing.  Notwithstanding anything to the contrary in the foregoing, the releases set forth above do not release any obligations of any Entity arising after the Restructuring Effective Date under the Plan, the Confirmation Order, any Restructuring Transaction, or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan.

 

			
	
 
	
 
	
 

 

 

		
	
Exculpation
	
Notwithstanding anything herein to the contrary, and upon entry of the Confirmation Order, no Exculpated Party shall have or incur, and each Exculpated Party is released and exculpated from any Cause of Action for any Claim related to any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, the formulation, preparation, dissemination, negotiation, filing, or consummation of the RSA, the Disclosure Statement, the Plan, or any Restructuring Transaction, contract, instrument, release, or other agreement or document created or entered into in connection with the RSA, the Disclosure Statement, the Plan, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, or the administration and implementation of the Plan, including providing any legal opinion requested by any Entity regarding any transaction, contract, instrument, document, or other agreement contemplated by the Plan or the reliance by any Exculpated Party on the Plan or the Confirmation Order in lieu of such legal opinion, the issuance or distribution of securities pursuant to the Plan or the distribution of property under the Plan or any other agreement (whether or not such issuance or distribution occurs following the Restructuring Effective Date), negotiations 

regarding or concerning any of the foregoing, or the administration of the Plan or property to be distributed hereunder, except for Causes of Action related to any act or omission that is determined by the Final Order19 to have constituted actual fraud, willful misconduct, or gross negligence, but in all respects such Entities shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to the Plan.  The Exculpated Parties have, and upon Consummation of the Plan shall be deemed to have, participated in good faith and in compliance with the applicable laws with regard to the solicitation of votes and distribution of consideration pursuant to the Plan and, therefore, are not, and on account of such distributions shall not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan.

 

 

 

 

 

 

 

 

	
	 

	
19  
	
“Final Order” means an order or judgment of the Bankruptcy Court, or court of competent jurisdiction with respect to the subject matter that has not been reversed, stayed, modified, or amended, as entered on the docket in any Chapter 11 Case or the docket of any court of competent jurisdiction, and as to which the time to appeal, or seek certiorari or move for a new trial, reargument, or rehearing has expired and no appeal or petition for certiorari or other proceedings for a new trial, reargument, or rehearing has been timely taken, or as to which any appeal that has been taken or any petition for certiorari that has been or may be timely filed has been withdrawn or resolved by the highest court to which the order or judgment was appealed or from which certiorari was sought or the new trial, reargument, or rehearing will have been denied, resulted in no stay pending appeal of such order, or has otherwise been dismissed with prejudice; provided that the possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule under the Bankruptcy Rules, may be filed with respect to such order will not preclude such order from being a Final Order.

	
“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure promulgated under section 2075 of the Judicial Code and the general, local, and chambers rules of the Bankruptcy Court, each, as amended from time to time.
	

	
“Judicial Code” means title 28 of the United States Code, 28 U.S.C. §§ 1–4001, as amended from time to time.
	

 

			
	
 
	
 
	
 

 

 

EXHIBIT B

Provision for Transfer Agreement

The undersigned (“Transferee”) hereby acknowledges that it has read and understands the Amended and Restated Restructuring Support Agreement, dated as of July 7, 2020 (the “Agreement”),20 by and among Covia Holdings Corporation and its subsidiaries bound thereto and the Consenting Stakeholders, including [____], the transferor to the Transferee of any Company Claims/Interests (each such transferor, a “Transferor”), and agrees to be bound by the terms and conditions thereof to the extent the Transferor was thereby bound, and shall be deemed a “Consenting Stakeholder” under the terms of the Agreement.

The Transferee specifically agrees to be bound by the terms and conditions of the Agreement and makes all representations and warranties contained therein as of the date of the Transfer, including the agreement to be bound by the vote of the Transferor if such vote was cast before the effectiveness of the Transfer discussed herein.

Date Executed:

______________________________________
Name: 
Title: 
Address: 
E-mail address(es): 

 

			
	
Aggregate Amounts Beneficially Owned or Managed on Account of:

	
Claims/Interests
	
Amount
	
Transferor

	
Term Loan
	
$[●]
	
[●]

 

	
	 

	
20  
	
Capitalized terms used but not otherwise defined herein shall having the meaning ascribed to such terms in the Agreement.

 

 

Exhibit C

Form of Joinder

The undersigned (“Joinder Party”) hereby acknowledges that it has read and understands the Amended and Restated Restructuring Support Agreement, dated as of July 7, 2020 (the “Agreement”),21 by and among Covia Holdings Corporation and its subsidiaries bound thereto and the Consenting Stakeholders, and agrees to be bound by the terms and conditions thereof to the extent the other Parties are thereby bound, and shall be deemed a “Consenting Stakeholder” under the terms of the Agreement.

The Joinder Party specifically agrees to be bound by the terms and conditions of the Agreement and makes all representations and warranties contained therein as of the date hereof and any further date specified in the Agreement.

Date Executed:

______________________________________
Name: 
Title: 
Address: 
E-mail address(es): 

 

			
	
Aggregate Amounts Beneficially Owned or Managed on Account of:

	
Claims/Interests
	
Amount
	
Transferor

	
Term Loan
	
$[●]
	
[●]

 

 

 

 

	
	 

	
21  
	
Capitalized terms used but not otherwise defined herein shall having the meaning ascribed to such terms in the Agreement.

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