Document:

Exhibit 10.23

 

LOAN AND SECURITY AGREEMENT

 

 

 

This Loan and Security Agreement (the “Agreement”)
dated as of October 11, 2018, is among U.S. BANK NATIONAL ASSOCIATION, a
national banking association (“Bank”) and SHIFT
TECHNOLOGIES, INC., a Delaware corporation (“STI”) and SHIFT
OPERATIONS LLC, a Delaware limited liability company (“SOL”), as
co-obligors and co-borrowers and not as accommodation parties (unless otherwise specified herein, STI and SOL are each individually
a “Borrower” and collectively the “Borrowers”).

 

ARTICLE 1.
DEFINITIONS

 

In addition to the terms defined elsewhere in this Agreement,
the following terms have the meanings indicated for the purposes of this Agreement:

 

“Advance” means
a loan advance made to a Borrower or on a Borrower’s behalf under the line of credit provided in this Agreement.

 

“Advance Date”
means, with respect to any Advance for any Vehicle, the date the Advance was made by Bank to finance such Vehicle.

 

“Anti-Corruption Laws”
means all laws, rules, and regulations of any jurisdiction applicable to a Borrower or its Subsidiaries from time to
time concerning or relating to bribery or corruption.

 

“Beneficial Ownership
Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

 

“Beneficial Ownership
Regulation” means 31 C.F.R. § 1010.230.

 

“Business Day”
means a day, other than a Saturday or a Sunday, on which Bank is open for commercial business.

 

“Change in
Control” means, except pursuant to the Purchase Option Agreement or as otherwise permitted under the Lithia
Loan Agreement, the occurrence of any event or transaction, including the sale or exchange of outstanding shares of any
Borrower’s capital stock, or series of related events or transactions, resulting in (i) the holders of such outstanding
capital stock immediately before consummation of such event or transaction, or series of related events or transactions, not,
immediately after consummation of such event or transaction or series of related events or transactions, retaining, directly
or indirectly, capital stock representing at least 50% of the voting power of the surviving Person of such event or
transaction or series of related events or transactions, in each case without regard to whether such Borrower is the
surviving Person, other than issuance of shares of STI preferred stock for cash (or conversion of debt) to investors pursuant
to a bona fide round of equity financing in which STI issues and sells shares of its preferred stock, (ii) any Person or
“group” (other than a Person that is a stockholder on September 12, 2018) obtaining “beneficial
ownership” (as such terms are defined under Section 13d-3 of and Regulation 13D under the Securities Exchange Act of
1934), either directly or indirectly, of more than 50% of any Borrower’s outstanding capital stock having the right to
vote for the election of directors under ordinary circumstances, other than issuance of shares of STI’s preferred stock
for cash (or conversion of debt) to investors pursuant to a bona fide round of equity financing in which STI issues and sells
shares of its preferred stock, or (iii) STI ceasing to own and control all of the economic and voting rights associated with
all of the outstanding capital stock of its Subsidiaries. For purposes of this definition, “Purchase Option
Agreement” means that certain Purchase Option Agreement dated on or about September 12, 2018 by and among Lithia,
STI and the securityholders listed on Exhibit A thereto.

 

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“Commodity Exchange Act” means the Commodity
Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

“Excluded Swap Obligation” means, with respect
to any Guarantor, any Swap Obligation if, and only to the extent that, all or a portion of the Guaranty of such Guarantor of, or
the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal
under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application
or official interpretation of any thereof), including by virtue of such Guarantor’s failure for any reason to constitute
an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time
the Guaranty of such Guarantor or the grant of such security interest becomes effective with respect to such Swap Obligation. If
a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion
of such Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or becomes illegal.

 

“Expiration Date” means September 30, 2019,
or such earlier date as may be applicable due to acceleration of Obligations in accordance with the terms of this Agreement.

 

“Financed Vehicles” means Vehicles with respect
to which there is an outstanding Advance.

 

“GAAP” means generally accepted accounting
principles as then in effect in the United States.

 

“Guarantor” means each Person who at any
time executes a Guaranty for the benefit of Bank, including Lithia.

 

“Guaranty” means each guaranty of the Obligations
which is executed by any Person, if any.

 

“Lithia” means Lithia Motors, Inc., an Oregon
corporation.

 

“Lithia Intercreditor Agreement” means that
certain Intercreditor Agreement dated as of the date hereof by and among Bank, Lithia and Borrowers, as may be amended from time
to time.

 

“Lithia Loan Agreement” means the Delayed
Draw Term Loan Agreement, dated as of September 12, 2018, among the Borrowers and Shift Finance, LLC, as borrowers, and Lithia,
as lender, as may be amended from time to time.

 

“Loan Documents” means this
Agreement, the Security Documents, the Guaranty and any and all other agreements, notes, guaranties, security agreements,
pledge agreements, mortgages, deeds of trust, assignments, subordination agreements and all other documents previously,
concurrently or hereafter executed or delivered by any Person to or in favor of Bank evidencing, guarantying, securing or
otherwise related to any of the Obligations or the Collateral.

 

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“Loan Party” means each Borrower, each Guarantor,
any Person granting collateral security for any or all of the Obligations, and any other Person executing any Loan Document.

 

“Monthly Payment Date” means the tenth day
of each month.

 

“New Vehicle” means a Vehicle that has never
been owned except by a manufacturer, distributor or dealer; has never been registered; has not been driven more than 500 total
miles; and is of the current or immediately preceding model year.

 

“Obligations” means any and all of the following,
in each case arising under the Loan Documents: all Advances and all of each Borrower’s debts (except for consumer credit
if a Borrower is a natural person), liabilities, obligations, covenants, warranties, and duties to Bank and/or to any affiliate
of Bank (including, without limitation, any credit card debt, but specifically excluding any type of consumer debt), whether now
or hereafter existing or incurred, whether liquidated or unliquidated, whether absolute or contingent, and all other debts and
obligations of each Borrower due Bank under any lease, agricultural, real estate or other financing transaction, and regardless
of whether such obligations arise out of existing or future credit granted by Bank to any Borrower, to others guaranteed, endorsed
or otherwise secured by any Borrower or any property of any Borrower or to any debtor-in-possession or other successor-in-interest
of any Borrower, and including principal, interest, fees, expenses and charges relating to any of the foregoing, provided that
“Obligations” shall exclude all Excluded Swap Obligations.

 

“OFAC” means the U.S. Department of the Treasury’s
Office of Foreign Assets Control, and any successor thereto.

 

“PATRIOT Act” means the USA PATRIOT Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)), as amended from time to time, and any successor statute.

 

“Person” means any natural person, corporation,
limited liability company, partnership, joint venture, firm, association, trust, unincorporated organization, government or governmental
agency or political subdivision or any other entity, whether acting in an individual, fiduciary or other capacity.

 

“Related Principal Portion” means, with respect
to each Vehicle, the principal amount of the Advance made by Bank to finance that Vehicle.

 

“Sanctioned Country” means any country or
territory which is itself the subject or target of any comprehensive Sanctions.

 

“Sanctioned Person” means (a) any Person
or group listed in any Sanctions-related list of designated Persons maintained by OFAC or the U.S. Department of State, the United
Nations Security Council, the European Union or any EU member state, (b) any Person or group operating, organized or resident in
a Sanctioned Country, (c) any agency, political subdivision or instrumentality of the government of a Sanctioned Country, or (d)
any Person 50% or more owned, directly or indirectly, by any of the above.

 

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“Sanctions” means economic or
financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government,
including those administered by OFAC or the U.S. Department of State or (b) the United Nations Security Council, the European
Union or Her Majesty’s Treasury of the United Kingdom.

 

“Security Documents” means such security
agreements, financing statements, pledge agreements, assignments, mortgages, deeds of trust and other documents and instruments
which are given to Bank by any Borrower, any other Loan Party or any other Person to grant, preserve, protect and/or perfect Bank’s
security interests in any and all property (real or personal) granted to Bank as collateral security for any or all of the Obligations.

 

“Seller Agreement” means any agreement between
a Borrower and a distributor or other seller of Vehicles (including without limitation franchise agreements, distribution agreements,
auction agreements and the like) involving, for any particular agreement, aggregate consideration payable to or by such Borrower
in excess of $1,000,000 per month.

 

“Subordinated Debt” means indebtedness subordinated
to the Obligations on terms and conditions satisfactory to Bank, including without limiting the generality of the foregoing, subordination
of such indebtedness in right of payment to the prior payment in full of the Obligations, the subordination of the priority of
any lien securing such indebtedness to Bank’s liens in the Collateral and the subordination of the rights of the holder of
such indebtedness to enforce its junior lien following an event of default, pursuant to a written subordination agreement approved
by Bank.

 

“Subsidiary” and “Subsidiaries”
means, separately and collectively as the context requires, each and all entities in which any Borrower owns, directly or indirectly,
at least a 50% equity interest.

 

“Supplemental Floor Plan Collateral” means
any vehicles financed by any Supplemental Floor Plan Facility, and any identifiable cash proceeds or cash collateral related thereto,
in which any Borrower has granted a lien pursuant to such Supplemental Floor Plan Facility.

 

“Supplemental Floor Plan Facility” means
an additional asset-based vehicle floorplan facility (or facilities) having an aggregate capacity (subject to a borrowing base)
not to exceed $20.0 million that is entered into by one or both Borrowers with another lender or lenders (other than Bank) in the
event Bank does not provide the Incremental Increase as described in Sections 2.l(b) and (c) of this Agreement.

 

“swap” means any agreement, contract or transaction
that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

 

“Swap Counterparty” means, with respect to
any swap with Bank, any person or entity that is or becomes a party to such swap.

 

“Swap Obligation” means any obligation to
pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section
1a(47) of the Commodity Exchange Act between Bank and one or more Swap Counterparties.

 

“Title Documents” means all
manufacturers’ certificates of origin, manufacturers’ statements of origin, certificates of title, certificates
of ownership and any other documents evidencing ownership of a Financed Vehicle or the transfer of ownership of a Financed
Vehicle from a manufacturer or another dealer to a Borrower, and all warehouse receipts, bills of lading and other negotiable
documents of title.

 

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“Used Vehicle” means a Vehicle, other than
a New Vehicle, that is of the current or one of the immediately preceding ten (10) model years.

 

“Valuation Guide” means the Kelley Blue Book
Official Used Car Guide, NADA Official Used Car Guide, Black Book or other valuation guide acceptable to Bank.

 

“Vehicle” means an automobile or truck with
a gross vehicle weight of no more than 16,000 pounds, which satisfies the following requirements:

 

		(a)	The vehicle is owned by a Borrower, subject to a first
priority perfected security interest in favor of Bank, and free of any title defects, liens, security interests, leases, bailments,
consignments or other interests of any Person other than Bank, except as agreed by Bank in writing.

 

		(b)	Unless the vehicle is in transit from the seller, it is
permanently located at locations which a Borrower has disclosed to Bank and which are acceptable to Bank. If the vehicle is in
transit from a seller, then upon receipt by a Borrower it will be permanently located at one of such locations.

 

		(c)	The vehicle is held for sale or lease in the ordinary course
of a Borrower’s business.

 

		(d)	The vehicle is undamaged and of good and merchantable quality.

 

ARTICLE 2. FLOORING LINE OF CREDIT

 

2.1
Commitment; Incremental Increase.

 

		(a)	During the Availability Period (defined below), and subject
to the terms and conditions of this Agreement, Bank will make revolving loan Advances, provided that the aggregate unpaid principal
amount of all Advances at any one time outstanding shall not exceed $30,000,000 (the “Commitment”). Subject
to the terms and conditions of this Agreement, Borrowers may borrow, prepay and repay and reborrow the Advances. Advances may
be prepaid in part or in full at any time without charge, penalty or premium.

 

		(b)	Provided there exists no default under this Agreement,
upon prior written notice to Bank, Borrowers may request a one-time increase in the Commitment by an amount equal to $20,000,000
(the “Incremental Increase”); provided that (i) Bank shall have agreed to provide such Incremental Increase
(it being understood by the Borrowers that Bank shall not have any obligation to provide the Incremental Increase), (ii) in no
event shall the aggregate Commitment (after taking into account the Incremental Increase) exceed $50,000,000, (iii) Borrowers
shall have submitted a business plan in form and substance acceptable to Bank in its sole discretion, specifically outlining the
proposed new market expansion, (iv) Guarantor shall have consented to the Incremental Increase, and (v) contemporaneously with
requesting the Incremental Increase, Borrowers shall certify to the Bank that immediately before and immediately after giving
effect to the Incremental Increase, (A) Borrowers are in compliance with all of the terms, provisions, covenants and conditions
contained in this Agreement and the other Loan Documents and (B) no default under this Agreement has occurred and is continuing.
This Agreement will be amended by Borrowers and Bank to reflect the revised Commitment pursuant to amendment documents (including,
without limitation, the consent of Guarantor) in form and substance satisfactory to the Bank.

 

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		(c)	In the event Bank does not provide the Incremental Increase
within 45 calendar days following satisfaction of the requirements set forth in clause (b)(ii) through (v) above as determined
in Bank’s sole discretion and with respect to clause (b)(i) above, Bank has elected to not provide the Incremental Increase,
Bank will cooperate in good faith with any lender or lenders providing the Supplemental Floor Plan Facility by entering into an
intercreditor agreement or intercreditor agreements with such lenders in form and substance satisfactory to Bank in its reasonable
discretion.

 

2.2 Availability
Period. “Availability Period” means the period from the date of this Agreement to,
but not including, the earlier of (a) the Expiration Date or (b) the date on which Bank’s obligation to make Advances hereunder
is terminated pursuant to the terms of this Agreement.

 

2.3 Purpose
of Advances. Advances may be made and used only to finance, or reimburse, Borrowers for the purchase
of the following types of Used Vehicles, on the following terms.

 

		(a)	The principal amount of Advances made to finance Used Vehicles
shall not exceed $30,000,000 outstanding at any one time.

 

		(b)	No Advance to finance Used Vehicles shall exceed an amount
equal to:

 

		(i)	for Used Vehicles that are of the current or one of the
immediately preceding seven (7) model years, (A) 100% of a Borrower’s actual documented acquisition cost for such Used Vehicles
purchased at an auction; or (B) 100% of the wholesale value of such Used Vehicles, as determined by Bank with reference to an
acceptable Valuation Guide, for such other Used Vehicles;

 

		(ii)	for Used Vehicles that are of the eighth (8th) immediately
preceding model year (A) 75% of a Borrower’s actual documented acquisition cost for such Used Vehicles purchased at an auction;
or (B) 75% of the wholesale value of such Used Vehicles, as determined by Bank with reference to an acceptable Valuation Guide,
for such other Used Vehicles; and

 

		(iii)	for Used Vehicles that are of the ninth (9th) and tenth
(10th) immediately preceding model years (A) 50% of a Borrower’s actual documented acquisition cost for such Used Vehicles
purchased at an auction; or (B) 50% of the wholesale value of such Used Vehicles, as determined by Bank with reference to an acceptable
Valuation Guide, for such other Used Vehicles.

 

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Without limitation of the above provisions, no Borrower
will request any Advances, and no Borrower shall use, and each Borrower shall ensure that its Subsidiaries and its or their
respective directors, officers, employees and agents shall not use, any Advances (i) in furtherance of an offer, payment,
promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of
any Anti-Corruption Laws or (ii) in any manner that would result in the violation of any applicable Sanctions.

 

2.4 Requests
for Advances. Bank’s obligation to make any Advances is subject to all of the terms and
conditions of this Agreement. A Borrower may request an Advance to be deposited into such Borrower’s deposit account(s) with
Bank (i) in writing, (ii) by telephone promptly confirmed in writing, or (iii) using Bank’s internet based Dealer Access
System service (provided that use of such service shall be subject to the terms of an agreement between the applicable Borrower(s)
and Bank). Bank will (unless Bank determines that any applicable condition specified in Section 4 has not been satisfied) make
the Advance to Borrowers within five (5) Business Days of such request. Requests for Advances to be deposited or forwarded elsewhere
shall be in writing in such form and containing such information as Bank may require from time to time. Each Borrower has the responsibility
for ensuring that representatives of such Borrower contacting Bank to request Advances or submitting written requests for Advances
are authorized. Bank shall be entitled to act on the instructions of anyone identifying himself or herself as authorized to request
Advances and each Borrower shall be bound thereby in the same manner as if the person were actually so authorized. Bank is authorized
to credit any of a Borrower’s accounts with Bank (or any account a Borrower designates in writing) for Advances made to such
Borrower. A Borrower’s failure to confirm any telephonic request or otherwise comply with the provisions of this Section
2.4 shall not in any manner affect the obligation of such Borrower to repay such Advance in accordance with the terms of this Agreement.
Each Borrower agrees not to hold Bank liable for any errors or misunderstanding in complying with any written or oral directions
for Advances; and each Borrower agrees to indemnify and hold the Bank harmless from any and all claims, damages, liabilities, losses,
costs and expenses (including attorneys’ fees) which may arise or be created by the acceptance of instructions (telephonic
or otherwise) for making Advances by wire transfer or otherwise, or for application of payments.

 

2.5 Advances
in Excess of Limitations. Bank shall have no obligation whatsoever, and Bank has no present intention,
to make any Advance after the Expiration Date or which would cause the principal amount outstanding under this Agreement to exceed
the Commitment or any of the limitations stated in this Agreement. Notwithstanding the foregoing, Bank may from time to time, in
its sole and absolute discretion, make an Advance after the Expiration Date or which would cause the principal amount of Advances
outstanding under this Agreement to exceed the Commitment or any of the limitations stated in this Agreement. Each Borrower is
and shall be and remain unconditionally liable to Bank for, and each Borrower promises to pay to the order of Bank, the amount
of all Advances hereunder, including without limitation Advances in excess of the Commitment or any of such limitations and Advances
made after the Expiration Date. Immediately upon Bank’s demand, each Borrower shall pay to Bank the amount of (a) any Advances
in excess of the Commitment or any limitation contained in this Agreement, and (b) any Advances made after the Expiration Date,
together with interest on the principal amount of such Advances, for so long as such Advances are outstanding, at the interest
rate from time to time in effect for such Advances.

 

2.6 Authorization.
Each Borrower authorizes Bank (a) to furnish information about the lines of credit provided by
this Agreement to each manufacturer or distributor of financed Vehicles, and (b) to advise each such manufacturer or distributor
of any change or termination which may occur with respect to said lines of credit.

 

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2.7 Record of Advances. All
Advances and payments hereunder shall be recorded on Bank’s books, which shall be rebuttable presumptive evidence of
the amount of such Advances outstanding at any time hereunder. Bank will account monthly as to all Advances and
payments hereunder and each monthly accounting will be fully binding on each Borrower
absent manifest error or unless such Borrower provides Bank with a verifiable listing of exceptions. Notwithstanding any term
or condition of this Agreement to the contrary, the failure of Bank to record the date and amount of any Advance shall not
limit or otherwise affect the obligation of a Borrower to repay any such Advance. Bank, in its sole and absolute discretion,
may require each Borrower, and each Borrower agrees upon any such requirement, to execute and deliver to Bank one or more
promissory notes to evidence the Advances. Whether or not any promissory notes are so required or executed or delivered, each
Borrower promises to pay the Advances, all interest thereon, and all other Obligations under this Agreement pursuant to the
terms hereof.

 

2.8 Interest
Rate and Payment Schedule. Borrowers shall pay interest on the outstanding principal balance of each Advance at the
rates and according to the schedule set forth below; provided, however, in no event will the interest rate hereunder
exceed that permitted by applicable law. If any
interest or other charge is finally determined by a court of competent jurisdiction to exceed the maximum amount permitted by
law, the interest or charge shall be reduced to the maximum permitted by law, and Bank may credit any excess amount previously
collected against the balance due or refund the amount to Borrowers.

 

		(a)	Interest Rate. Unless
the Default Rate is applicable, interest on Advances shall accrue at an annual rate equal to the LIBOR Rate plus 2.00%.

 

“LIBOR Rate” means
the greater of (a) zero percent (0%) and (b) the one-month LIBOR rate quoted by Bank from Reuters Screen LIBOR0l Page or any successor
thereto which may be designated by Bank as provided below, which shall be that one-month LIBOR rate in effect two New York Banking
Days prior to the Reprice Date, adjusted for any reserve requirement and any subsequent costs arising from a change in government
regulation, and such rate to be reset monthly on each Reprice Date. The term “New York Banking
Day” means any date (other than a Saturday or Sunday) on which commercial banks are open for business in New York,
New York. The term “Reprice Date” means the first day of each month. If
the initial advance under this Note occurs other than on the Reprice Date, the initial one-month LIBOR rate shall be that
one-month LIBOR rate in effect two New York Banking Days prior to the date of the initial advance, which rate plus the percentage
described above shall be in effect until the next Reprice Date. Bank’s internal records of applicable interest rates (including
without limitation Bank’s designation of any successor interest rate index if the rate index described above shall become
temporarily unavailable or shall cease to exist) shall be determinative in the absence of manifest error.

 

		(b)	Interest Payment Schedule.
Interest payments shall be made monthly in an amount equal to all interest accrued during the prior calendar month.
Such interest payments shall be made each Monthly Payment Date commencing with the Monthly Payment Date in the month immediately
following the month this Agreement is executed and continuing thereafter. All accrued interest outstanding on the Expiration Date
is due and payable in full on the Expiration Date.

 

		(c)	Interest Computation.
Interest will be computed for the actual number of days principal is unpaid, using a daily factor obtained by dividing
the stated interest rate by 360.

 

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		(d)	Default Interest. During
the existence of any default hereunder, Bank may, at its option and subject to applicable law, increase any and all interest rates
applicable hereunder to a per annum rate equal to 5% plus the interest rate otherwise payable hereunder (the “Default
Rate”). Notwithstanding the foregoing and subject to applicable law, upon the occurrence of a default by any
Borrower involving bankruptcy, insolvency, receivership proceedings or an assignment for the benefit of creditors, the interest
rates applicable hereunder shall automatically increase to the applicable Default Rate.

 

2.9 Principal
Payments. In addition to any other principal payments required by any promissory note, Borrowers will repay the entire
outstanding principal amount of Advances on the Expiration Date, and also will repay Advances as follows:

 

		(a)	Sales of Vehicles. Borrowers
shall pay to Bank the entire Related Principal Portion for each financed Vehicle by 5 Business Days following the date of sale
of such Vehicle.

 

		(b)	Unsold Vehicles. Borrowers
shall pay to Bank the entire Related Principal Portion for any Used Vehicle not previously sold on the first Monthly Payment Date
which is at least 6 months after the Advance Date for such Used Vehicle.

 

		(c)	Deemed Sales. If a
Deemed Sale of a Vehicle occurs, Borrowers shall pay to Bank the Related Principal Portion for such Vehicle no later than 5 Business
Days following the date of the Deemed Sale. A “Deemed Sale” means any of the following:

 

		(i)	A Borrower disposes of a Vehicle by trade with another
dealer or other disposition, other than a sale in the ordinary course of such Borrower’s business, regardless of whether
any payment is due to be made by or to such Borrower in respect of such trade or other disposition.

 

		(ii)	The Vehicle ceases to meet the criteria contained in the
definition of Vehicle in this Agreement.

 

		(iii)	A Vehicle ceases to meet the criteria contained in the
applicable definition for such type of Vehicle in this Agreement.

 

		(iv)	Bank provides Borrowers with notice of its determination
that the fair market value of a Vehicle has significantly declined, regardless of the reason.

 

2.10 Fees
and Charges

 

		(a)	Late Payment Fee. Subject
to applicable law, if any payment is not made on or before its due date (other than payments of the entire outstanding principal
amount of the Advances due on the Expiration Date), Bank may collect a delinquency charge of 5% of the amount that is due and
unpaid. Collection of the late payment fee shall not be deemed to be a waiver of Bank’s right to declare a default hereunder.

 

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2.11 PR
Account. In addition to any payments otherwise required by or prepayments otherwise permitted by this Agreement, a
Borrower may reduce the principal balance outstanding under this Agreement by means of a flooring line principal reduction
account (the “PR Account”). At a Borrower’s request, Bank will
establish for such Borrower a PR Account for the sole purpose of recording voluntary reductions in principal under this
Agreement. The PR Account is not a deposit account, and no Borrower shall have right or interest in any balance in such
account, except as expressly provided in this Section 2.11. The PR Account is subject to the following provisions:

 

		(a)	PR Account Payments. A Borrower, at its discretion,
may make payments to the PR Account at any time subject to the provisions of subsections (c) and (f) of this Section 2.11 and
further subject to the following conditions:

 

		(i)	All payments into the PR Account must be made as transfers
of collected funds from a deposit account of Borrower with Bank.

 

		(ii)	Payments into the PR Account must be in amounts of at least
$100,000.

 

		(iii)	The total balance in the
PR Account may not exceed 50% of the aggregate outstanding Related Principal Portion for Used Vehicles calculated on a daily basis.
If the amount in the PR Account
exceeds the maximum amount permitted hereunder, Bank is authorized to make a PR Account Advance (defined below) in the amount
of any such excess and deposit such amount in any of such Borrower’s deposit accounts with Bank.

 

		(b)	PR Account Advances. A Borrower may re-borrow any
balance in the PR Account as an advance (a “PR Account Advance”) at any time during the term of this Agreement,
subject to the provisions of subsections (c) and (f) of this Section 2.11 and further subject to the following conditions:

 

		(i)	No default shall have occurred and be continuing under
this Agreement.

 

		(ii)	PR Account Advances shall be requested in accordance with
the provisions of Section 2.4, “Requests for Advances”.

 

		(iii)	PR Account Advances must be in amounts of at least $100,000,
except a Borrower may request a PR Account Advance in the amount of the remaining balance in the PR Account if the remaining balance
is less than $100,000; provided, however, that PR Account Advances made by Bank pursuant to subsections (a) and (f) of this Section
2.11 shall not be so limited.

 

		(c)	Limitation on Transactions
in PR Account. The total number of payments to and advances from the PR Account shall not exceed 8 transactions per calendar
month in the aggregate. If Bank
allows transactions in excess of such limitation in any given calendar month, Bank may charge a per transaction fee of $100 for
each transaction in excess of such limitation. Bank is authorized to charge such fee against any deposit account of Borrower with
Bank.

 

		(d)	Application of PR Account Balance. The balance in
the PR Account shall be applied to reduce the outstanding aggregate Related Principal Portion for Used Vehicles for the purpose
of computation of interest only, and shall in no way limit or modify the principal payment requirements set forth elsewhere in
this Agreement. Notwithstanding any other provision in this Section 2.11, the balance in the PR Account may not be used to reduce
any principal amount outstanding for purposes of determining any remaining availability under any line of credit under this Agreement
or any of the other limitations stated in this Agreement.

 

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		(e)	Record of PR Account. All
payments into the PR Account and all PR Account Advances shall be recorded on Bank’s books; and monthly account statements
shall be provided in accordance with the provisions of Section 2.7, “Record of Advances”.

 

		(f)	Termination of PR Account. Bank
and, provided that no default under this Agreement has occurred and is continuing, Borrowers may terminate this Section 2.11 at
any time by providing at least 5 calendar days written notice to the other. In addition, Bank may terminate this Section 2.11
without prior notice upon the occurrence (or at anytime during the continuation) of a default under this Agreement. Provided that
no default exists under this Agreement, upon termination of this Section 2.11, Bank shall make a PR Account Advance in an amount
equal to the balance in the PR Account and deposit such amount in any of a Borrower’s deposit accounts with Bank. If a default
has occurred and is continuing, then upon termination of this Section 2.11, no Borrower shall have further right to receive any
PR Account Advances and Bank may apply the balance in the PR Account to the Obligations in any manner or order that Bank, in its
sole discretion, may determine.

 

2.12 Capital
Adequacy; Yield Protection. Except to the extent the following are taken into account in determining
the LIBOR Rate, if there shall occur any adoption or implementation of, or change to, any Regulation, or interpretation or administration
thereof, which shall have the effect of imposing on Bank (or Bank’s holding company) any increase or expansion of or any
new: tax (excluding taxes on its overall income and franchise taxes), charge, fee, assessment or deduction of any kind whatsoever,
or reserve, capital adequacy, special deposits or similar requirements against credit extended by, assets of, or deposits with
or for the account of Bank or other-conditions affecting the extensions of credit under this Agreement; then Borrowers shall pay
to Bank such additional amount as Bank deems necessary to compensate Bank for any increased cost to Bank attributable to the extension(s)
of credit under this Agreement and/or for any reduction in the rate of return on Bank’s capital and/or Bank’s revenue
attributable to such extension(s) of credit. As used above, the term “Regulation” shall include any federal, state
or international law, governmental or quasi-governmental rule, regulation, policy, guideline or directive (including but not limited
to the Dodd-Frank Wall Street Reform and Consumer Protection Act and enactments, issuances or similar pronouncements by the Bank
for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices or any similar authority and
any successor thereto) that applies to Bank. Bank’s determination of the additional amount(s) due under this paragraph shall
be binding in the absence of manifest error, and such amount(s) shall be payable within 15 days of demand and, if recurring, as
otherwise billed by Bank, which billing or demand shall include a reasonable explanation of the charges.

 

ARTICLE 3.
SECURITY INTEREST; COLLATERAL

 

3.1 Grant
of Security Interest. To secure the payment and performance of all Obligations, each Borrower
hereby grants a security interest in and collaterally assigns the Collateral (defined below) to Bank. The intent of the parties
hereto is that the Collateral secures all Obligations.

 

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3.2 Collateral.
“Collateral” means all of the following property of each Borrower, whether now
owned or existing or hereafter acquired and wherever located: all inventory (including, without limitation, all Vehicles,
automobiles, trucks and other motor vehicles of whatever make, model and description, trade ins, repossessions and
inventory held for display or demonstration purposes); equipment; fixtures, investment property; letter of credit rights;
letter of credit proceeds; accounts; instruments; documents; chattel paper; general intangibles; deposit accounts; contract
rights and other rights to payment; leases, rebates, credits, factory holdbacks, incentive payments and other payments from
any manufacturer, factory or distributor. In addition, “Collateral” includes all the following, whether now owned
or hereafter acquired, whether now existing or hereafter arising and wherever located: all attachments, accessions,
accessories, tools, parts, supplies, increases, and additions to and all replacements of and substitutions for any property
described in this Collateral section; all products and produce of any of the property described in this Collateral section;
all proceeds (including insurance proceeds) of any of the property described in this Collateral section; and all records and
data relating to any of the property described in this Collateral section, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with Borrower’s right, title and interest in and to all computer
software required to utilize, create, maintain, and process any such records or data on electronic media. Terms not otherwise
defined in this Collateral section shall have the meanings attributed to such terms in the Uniform Commercial Code, as
adopted in the state whose law governs this Agreement and as amended from time to time.

 

Notwithstanding the foregoing, the Collateral does not
include (i) any property that is nonassignable by its terms without the consent of the licensor thereof or another party (but
only to the extent such prohibition on transfer is enforceable under applicable law, including, without limitation, Sections
9406 and 9408 of the UCC), (ii) any property that the granting of a security interest therein is contrary to applicable law, provided that
upon the cessation of any such restriction or prohibition, such property shall automatically become part of the Collateral,
(iii) any property that constitutes the capital stock of a subsidiary that is not an entity organized under the laws of the
United States or any state thereof, in excess of sixty five percent (65%) of the voting power of all classes of capital stock
of such subsidiary, or (iv) any United States intent-to-use trademark or service mark application to the extent that, and
solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of
such intent-to-use trademark or service mark application under United States federal law.

 

3.3 Lithia
Intercreditor Agreement. Bank’s rights and remedies with respect to the Collateral are
subject to the Lithia Intercreditor Agreement and any intercreditor agreement covering a Supplemental Floor Plan Facility and,
notwithstanding anything to the contrary in this Agreement, Borrowers shall not be required to take any action that is inconsistent
with the terms of the Lithia Intercreditor Agreement or any intercreditor agreement covering a Supplemental Floor Plan Facility.

 

3.4 Release of Collateral upon
Payment of Obligations. At such time as the Commitment has terminated and all Obligations
(other than inchoate indemnity obligations) have been paid in full in cash, (i) all rights to the Collateral shall
automatically revert to the applicable Borrower, (ii) this Agreement, all other Loan Documents, and all guarantees and other
obligations (other than those expressly stated to survive such termination) of each Borrower shall terminate, and (iii) at
the request of any Borrower, and at the sole expense of such Borrower, Bank shall (x) promptly deliver to such Borrower any
Collateral of such Borrower held by Bank hereunder and (y) execute and deliver to such Borrower such documents as such
Borrower may reasonably request to evidence such termination (including, without limitation, UCC-3 amendments and
terminations, which such Borrower shall be authorized to file at such time).

 

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ARTICLE 4. CONDITIONS

 

4.1 Initial
Conditions. Bank shall have no obligation to make the initial Advance until each of the following
conditions (each an “Initial Condition”) has been satisfied:

 

		(a)	Receipt by Bank of:

 

		(i)	Executed originals of this Agreement, the Security Documents,
the Guaranty, and any other Loan Document required by Bank, all in form and content satisfactory to Bank.

 

		(ii)	All evidence of insurance, and if required by Bank, copies
of all leases covering any real property leased by a Borrower as lessee.

 

		(iii)	All organizational documents, resolutions, authorizations
and information Bank requests relating to the authority for and validity of this Agreement and the other Loan Documents, the due
organization, valid existence, qualification to do business and good standing of the Loan Parties, and any other related matters.

 

		(iv)	Such additional documents and information (including, if
required by Bank, attorney opinion letters) as Bank reasonably requires, each in form and content satisfactory to Bank, and evidence
that each Loan Party has satisfied such additional requirements, as Bank reasonably requires.

 

		(v)	All fees and expenses required to have been paid prior
to the initial Advance hereunder, if any.

 

		(vi)	An executed Lithia Intercreditor Agreement in form and
substance satisfactory to Bank.

 

		(b)	Bank has a valid and perfected security interest in the
Collateral, subject only to Permitted Liens (defined below) and has received satisfactory evidence of perfection and the priority
of its security interest, including without limitation such Uniform Commercial Code and other searches, signed termination statements
and other filings as it deems appropriate.

 

		(c)	Bank has conducted such audits of the Collateral as it
requires, the results of which are satisfactory to Bank.

 

		(d)	Bank has received copies of any Seller Agreements which
it has requested and has received such evidence as it requires that all Seller Agreements which are necessary for the conduct
of a Borrower’s business, are in full force and effect.

 

		(e)	Each Loan Party has satisfied any other requirements reasonably
required by Bank.

 

		(f)	Upon the reasonable request of Bank made at least ten days
prior to the closing date, each Borrower shall have provided to Bank the documentation and other information so requested in connection
with applicable “know your customer” and anti-money-laundering rules and regulations, including the PATRIOT Act, in
each case at least five days prior to the closing date.

 

		(g)	At least five days prior to the closing date, if any Borrower
qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, such Borrower shall deliver a Beneficial
Ownership Certification in relation to Borrower.

 

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4.2 Conditions to each Advance. Bank’s
agreement to make any Advance (including the initial Advance) is subject to satisfaction of the following conditions on the
date such Advance is to be made.

 

		(a)	All Initial Conditions have been satisfied.

 

		(b)	No default has occurred or will exist under this Agreement
or any other Loan Document after the making of the Advance.

 

		(c)	The representations and warranties in this Agreement are
true and correct as of such date (excluding, after the closing date, the representation and warranty set forth in Section 5.1(b).

 

		(d)	Receipt by Bank of such documents and information as Bank
reasonably requires including without limitation the following:

 

		(i)	For Advances made to finance previously owned Used Vehicles
purchased at an Auction. Invoice or auction receipt covering such Vehicle.

 

		(ii)	For Advances made to finance other previously owned
Used Vehicles. Copy of certificate of ownership or title showing a release by the previous registered and legal owners and
all security interest holders for the Vehicle, and acceptable evidence of the wholesale value of such Vehicle, determined with
reference to an acceptable Valuation Guide.

 

ARTICLE 5. WARRANTIES AND COVENANTS

 

In addition to all other warranties and covenants of Borrowers
under the other Loan Documents, all of which are expressly incorporated herein as part of this Agreement; and while any part of
any credit granted to Borrowers is available or any Obligations are unpaid or outstanding, each Borrower, as applicable, continuously
warrants and agrees as set forth below. Each request by a Borrower for an Advance shall be its representation and warranty that
(a) such Advance may be made without exceeding any applicable maximum amount permitted by this Agreement, (b) no default has occurred
or will exist under this Agreement or any other Loan Document after the making of such Advance, and (c) all representations and
warranties set forth in this Agreement and all other Loan Documents are true, accurate and complete as of, and are deemed made
as of, the date of such request.

 

5.1 Accuracy
of Information.

 

		(a)	All information, certificates or statements given to Bank
pursuant to this Agreement and the other Loan Documents, when taken as a whole, will be true and complete when given.

 

		(b)	As of the closing date, the information included in the
Beneficial Ownership Certification is true and correct in all respects.

 

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5.2 Organization; Authority; Validity
of Obligations; Litigation. If a Borrower is not an individual, such Borrower is
duly organized, validly existing, duly qualified and in good standing under the laws of its state of organization and in each
jurisdiction where qualification is required, and has all requisite power and authority, corporate or otherwise, and
possesses all licenses necessary, to conduct its business and own its properties. The execution, delivery and performance of
this Agreement and the other Loan Documents (i) are within each Borrower’s power; (ii) have been duly authorized by all
appropriate entity action; (iii) do not require the approval of any governmental agency, other entity or Person; and (iv)
will not violate any law, agreement or restriction by which such Borrower or its property is bound. This Agreement and the
other Loan Documents to which each Borrower is a party are the legal, valid and binding obligations of such Borrower,
enforceable against such Borrower in accordance with their terms. There is no litigation or administrative proceeding
threatened or pending against any Borrower which could reasonably be expected to have a material adverse effect on such
Borrower’s financial condition or its property.

 

5.3 Existence;
Business Activities; Assets. Each Borrower will (i) preserve its organizational existence, rights and franchises; (ii) not
make any material change in the nature or manner of its business activities; (iii) not liquidate, dissolve, merge or consolidate
with or into another entity or change its form of organization or change to or from any form of limited liability entity, and (iv)
not sell, lease, transfer or otherwise dispose of all or substantially all of its assets or acquire all or substantially all of
the assets or the business of any Person.

 

5.4 Use
of Proceeds; Margin Stock; Speculation. Advances by Bank will be used exclusively by Borrowers for the purposes set forth in
this Agreement. No Borrower will use any of the loan proceeds to purchase or carry “margin” stock (as defined in Regulation
U of the Board of Governors of the Federal Reserve System). No part of any of the proceeds will be used for speculative investment
purposes, including, without limitation, speculating or hedging in the commodities and/or futures market.

 

5.5 Environmental
Matters. Except as disclosed in a written schedule attached to this Agreement (if no schedule is attached, there are no exceptions),
there exists no, and no Borrower will permit to exist any, uncorrected violations by such Borrower of any federal, state or local
laws (including statutes, regulations, ordinances or other governmental restrictions and requirements) relating to the discharge
of air pollutants, water pollutants or process waste water or otherwise relating to the environment or Hazardous Substances as
hereinafter defined, whether such laws currently exist or are enacted in the future (collectively “Environmental Laws”).
The term “Hazardous Substances” means any hazardous or toxic wastes, chemicals or other substances, the
generation, possession or existence of which is prohibited or governed by any Environmental Laws. No Borrower is subject to any
judgment, decree, order or citation, or a party to (or threatened with) any litigation or administrative proceeding, which asserts
that such Borrower (i) has violated any Environmental Laws; (ii) is required to clean up, remove or take remedial or other action
with respect to any Hazardous Substances (collectively “Remedial Action”); or (iii) is required to pay all or
a portion of the cost of any Remedial Action, as a potentially responsible party. There are not now, nor to any Borrower’s
knowledge after reasonable investigation have there ever been, any Hazardous Substances (or tanks or other facilities for the storage
of Hazardous Substances) stored, deposited, recycled or disposed of on, under or at any real estate owned or occupied by any Borrower
during the periods that any Borrower owned or occupied such real estate, which if present on the real estate or in soils or ground
water, could require Remedial Action. To each Borrower’s knowledge, there are no proposed or pending changes in Environmental
Laws which would adversely affect such Borrower or its business, and there are no conditions existing currently or likely to exist
while the Loan Documents are in effect which would subject such Borrower to Remedial Action or other liability. Each Borrower currently
complies with and will continue to timely comply with all applicable Environmental Laws; and will provide Bank, immediately upon
receipt, copies of any correspondence, notice, complaint, order or other document from any source asserting or alleging any circumstance
or condition which requires or may require a financial contribution by Borrower or Remedial Action or other response by or on the
part of such Borrower under Environmental Laws, or which seeks damages or civil, criminal or punitive penalties from such Borrower
for an alleged violation of Environmental Laws.

 

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5.6 Compliance with Laws. Each Borrower
and each of its Subsidiaries is in compliance and will continue to comply with all Anti-Corruption Laws and applicable Sanctions.
Each Borrower and each of its Subsidiaries are in compliance and will continue to comply with all other laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it may be subject, and has all permits, licenses and approvals
required by such laws, copies of which have been provided to Bank, in each case except where non-compliance cannot reasonably
be expected to result in a material adverse effect on such Borrower or Subsidiary.

 

5.7 Restriction
on Indebtedness. No Borrower will create, incur, assume or have outstanding any indebtedness for borrowed money (including
capitalized leases) except Permitted Indebtedness. “Permitted Indebtedness” means, with respect to any Borrower
(i) any indebtedness owing to Bank, (ii) any other indebtedness outstanding on the date hereof and disclosed on Schedule 5.7,
(iii) Debt incurred for the acquisition of services, supplies or inventory on normal trade credit in the ordinary course of business,
(iv) indebtedness under the Lithia Loan Agreement, (v) indebtedness incurred under any Supplemental Floor Plan Facility, (vi) Subordinated
Debt; (vii) reimbursement obligations under corporate credit cards incurred in the ordinary course of business in an aggregate
amount outstanding not to exceed $300,000 at any time; (viii) reimbursement obligations with respect to letters of credit issued
as security for any Borrower’s dealers licenses; provided that the reimbursement obligations for such letters of credit
shall not exceed $500,000 in the aggregate at any time, (ix) reimbursement obligations with respect to letters of credit issued
as security for any Borrower’s obligations under leases of real property; provided that the reimbursement obligations
for such letters of credit shall not exceed $500,000 in the aggregate at any time, (x) indebtedness secured by purchase money liens
permitted by clause (n) of the definition of “Permitted Liens” set forth in Section 5.25 of this Agreement in an aggregate
amount not exceeding $300,000 outstanding at any time; (xi) extensions, refinancings, modifications, amendments and restatements
of any item of indebtedness permitted under clauses (i) through (xi) above, provided that the principal amount thereof is
not increased; (xii) indebtedness owing to any Borrower by any other Borrower or to Shift Finance, LLC; (xiii) indebtedness appearing
as a claims reserve (or similar term) on the balance sheet of STI and its Subsidiaries, which represents amounts which have been
received but which will be expended to pay warranty, return and service claims by customers of STI; and (xiv) other indebtedness
in an aggregate amount not exceeding $500,000 outstanding at any time.

 

5.8 Restriction
on Contingent Liabilities. No Borrower will guarantee or become a surety or otherwise contingently liable for any obligations
of others, except (i) guaranties by endorsement of negotiable instruments for deposit or collection in the ordinary course of business;
(ii) guaranties provided in the ordinary course of business that do not guarantee indebtedness, (iii) guaranties permitted under
Section 5.20 of this Agreement, and (iv) reimbursement obligation in favor of Lithia in connection with the applicable Guaranty
of the Borrowers’ Obligations hereunder or Lithia’s guaranty of any Supplemental Floor Plan Facility.

 

5.9 Insurance.
Each Borrower will maintain insurance to such extent, covering such risks and with such insurers as is satisfactory to Bank,
including insurance for fire and other risks insured against by extended coverage, public liability insurance and workers’
compensation insurance; and will designate Bank as loss payee with a “Lenders Loss Payable” endorsement on any casualty
policies and take such other action as Bank may reasonably request to ensure that Bank will receive (subject to no other interests)
the insurance proceeds on Bank’s Collateral. Each Borrower hereby assigns all insurance proceeds to and irrevocably directs,
while any Obligations remain unpaid, any insurer to pay to Bank the proceeds of all such insurance and any premium refund; and
authorizes Bank to endorse such Borrower’s name to effect the same, to make, adjust or settle, in such Borrower’s name,
any claim on any insurance policy relating to the Collateral; and, at the option of Bank, to apply such proceeds and refunds to
the Obligations or to restoration of the Collateral, returning any excess to Borrowers, as applicable.

 

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5.10 Taxes
and Other Liabilities. Each Borrower has filed and will continue to file all tax returns required to be filed or filed appropriate
extensions for the filing of such returns. Each Borrower will pay and discharge, when due, all of its taxes, assessments and other
liabilities, except when the payment thereof is being contested in good faith by appropriate procedures which will effectively
stay foreclosure of liens securing such items during the period of such contest, and with adequate reserves provided therefor.

 

5.11 Financial
Statements and Reporting. The financial statements and other information previously provided to Bank or provided to Bank in
the future are or will be complete and accurate in all material respects and, except as otherwise provided herein, prepared in
accordance with GAAP. There has been no material adverse change in any Borrower’s financial condition since such information
was provided to Bank. Each Borrower will (i) maintain accounting records in accordance GAAP consistently applied throughout the
accounting periods involved, (ii) provide Bank with such information concerning the business affairs and financial condition of
the Borrowers (including, without limitation, insurance coverage and agreements with manufacturers, distributors, wholesalers or
other sellers of Vehicles) as Bank may reasonably request and (iii) upon request and with such frequency as Bank may require, provide
Bank with a report containing a listing of all Financed Vehicles by serial number, the number of days it has remained unsold and
its Advance Date. In addition, Borrowers shall deliver to Bank each of the following:

 

		(a)	Within 45 calendar days after the end of each fiscal month,
Borrowers’ internally prepared consolidated balance sheet and income statement as of the end of and for such fiscal month,
and for the fiscal year to date;

 

		(b)	Within 60 calendar days after the end of each fiscal quarter,
Borrowers’ internally prepared consolidated balance sheet and income statement as of the end of and for such fiscal quarter,
and for the fiscal year to date;

 

		(c)	Within 120 calendar days after the end of each fiscal year
of Borrowers, a complete copy of the federal tax return for Borrowers, including all exhibits, K-1’s, schedules and attachments,
or, if Borrower has filed a request for extension of the filing date, a copy of each request for extension of the filing date,
provided that that such extended tax return is filed no later than October 15 of such fiscal year, with a copy of such return
provided to Bank;

 

		(d)	(i) On or before December 31, 2018 for the fiscal year
of Borrowers ending December 31, 2017, and (ii) within 180 calendar days after the end of each fiscal year of Borrowers commencing
December 31, 2018 and each fiscal year thereafter, Borrowers’ audited consolidated balance sheet and related statements
of income, cash flows and retained earnings as of the end of and for such fiscal year, in each case prepared by a certified public
accountant selected by Borrowers and reasonably acceptable to Bank; and a copy of such accountant’s management letter, if
any. No financial statement shall include a disclaimer or qualified opinion or other adverse accountants’ report, except
such as Bank in its sole discretion may determine to be immaterial; and

 

		(e)	With the delivery of the monthly financial information
required by Section 5.11(a) and at other times upon Bank’s request, a Compliance Certificate, substantially in the form
of Exhibit A attached hereto, showing the calculation of the financial covenant in Section 5.13 as of the end of such fiscal month
and if applicable, as of the end of the previous fiscal year; it being understood, that except as
otherwise specifically set forth in Section 5.13, each Borrower must comply with the financial covenant set forth therein at all
times.

 

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5.12 Inspection
of Properties, Collateral and Records; Fiscal Year. Each Borrower will permit representatives of Bank to visit and inspect
any of the properties of such Borrower, audit and inspect any of the Collateral and examine any of the books and records of such
Borrower (and make copies at such Borrower’s expense) wherever located, including, but not limited to, all manufacturers’
statements of origin, titles, demonstrator agreements, factory invoices, such Borrower’s purchase orders, buy-back agreements
and other agreements with manufacturers, distributors or other sellers of Vehicles and all other instruments, documents and records
at any reasonable time and as often as Bank may reasonably desire; and each Borrower shall assist Bank in so doing. Borrowers shall
pay to Bank a fee in the amount of $300 per location for each audit, visit or inspection. Borrowers will not change their fiscal
year.

 

5.13 Financial Covenant. As of
the first day of each calendar month during the term of this Agreement (each a “Determination Date”), Borrowers’
Liquidity as of such Determination Date shall equal or exceed four (4) times the Three-Month Cash Burn Amount as of such
date.

 

As used herein:

 

“Liquidity” means, as of any Determination
Date, an amount equal to the sum of (i) cash that would appear on Borrowers’ consolidated balance sheet as unrestricted on
such date plus (ii) the aggregate principal amount of loans that Borrowers could duly borrow and incur on such date and
that, under the terms of the loan agreement for such loans, Borrowers may use for any general corporate or general working capital
purpose (as opposed to loans that, under the terms of the loan agreement for such loans, Borrowers must use for a specific purpose),
including, without limitation, loans under the Lithia Loan Agreement to the extent the conditions for drawing such loans have been
satisfied.

 

“Three-Month Cash Burn Amount” means, as
of any Determination Date, an amount equal to the decrease, if any, in the amount of cash and cash equivalents held by Borrowers
and their Subsidiaries on such day as compared to the amount of cash and cash equivalents held by Borrowers and their Subsidiaries
as of the first day of the month three months prior thereto.

 

5.14 GAAP.
Except as otherwise provided in this Agreement or any other Loan Document, all accounting terms used in this Agreement or any
other Loan Document shall be construed, and all accounting and financial information or computations shall be prepared or computed,
in accordance with GAAP consistently applied.

 

5.15 Expenses and Attorneys’
Fees. Each Borrower will reimburse Bank for all attorneys’ fees of in-house and outside counsel and all other
costs, fees and out-of-pocket disbursements incurred by Bank in connection with the preparation, execution, delivery,
administration, defense and enforcement of this Agreement or any of the other Loan Documents, including fees and costs
related to any waivers or amendments with respect thereto (examples of costs and fees include but are not limited to fees and
costs for: filing, perfecting or confirming the priority of Bank’s lien, title searches or insurance, appraisals,
environmental audits, and other reviews related to such Borrower, any collateral securing the Obligations, or the loans
evidenced by the Loan Documents, if requested by Bank). Each Borrower will also reimburse Bank for all costs of collecting,
preserving and/or liquidating any collateral securing the Obligations and all costs of litigation or arbitration commenced to
enforce or construe any term of any Loan Document, before and after judgment, in any arbitration, trial, appellate
proceeding, proceeding under any bankruptcy code or receivership, which costs shall include, without limitation,
attorneys’ fees of in-house and outside counsel. Each Borrower specifically agrees to pay all out-of-pocket and
allocated costs incurred by Bank for Collateral audits (i) to the extent reimbursement thereof is required by Bank; and (ii)
to the extent such audits are conducted after the occurrence of a default.

 

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5.16 Other
Agreements. No Borrower is in breach of or in default under any agreement to which it is a party
or which is binding on it or any of its assets, which such breach or default would have a material adverse effect on its financial
condition or operations.

 

5.17 Agreements
with Sellers. Each Borrower is and will continue to be in full compliance with all agreements
between such Borrower and any distributor, wholesaler or other seller of Vehicles and all such agreements are in full force and
effect.

 

5.18 Management.
Each Borrower will maintain executive and management personnel with qualifications and experience
at least comparable to current executive and management personnel.

 

5.19 Notification.
Each Borrower will promptly notify Bank in writing of:

 

		(a)	The occurrence of any default hereunder or under any other
Loan Document, and if such default is then continuing, a certificate of such Borrower’s chief financial officer or other
authorized officer setting forth the details thereof and the action which it is taking or proposes to take with respect thereto.

 

		(b)	Any claim, lien, lawsuit, administrative proceeding or
judgment involving $250,000 or more that is threatened, instituted or completed against any Borrower.

 

		(c)	Any material change in the relationship between any Borrower
and distributor or wholesaler under any Seller Agreement.

 

		(d)	Any material adverse change in the financial condition
of any Borrower.

 

		(e)	Any material change in the condition or location of any
collateral securing the Obligations.

 

		(f)	Any change in the information provided in the Beneficial
Ownership Certification that would result in a change to the list of beneficial owners identified in parts (c) or (d) of such
certification.

 

5.20 Loans
and Investments. No Borrower shall make or contract to make any loan, advance or extension of
credit to any Person, or acquire any capital stock, assets, obligations, or other securities of, make any capital contributions
to, or otherwise invest in or acquire any interest in any Person, or participate as a partner or joint venturer with any other
Person; except:

 

(i) direct
obligations of the United States of America or any agency thereof backed by the full faith and credit of the United States of America
with maturities of one (1) year or less from the date of acquisition;

 

(ii) commercial
paper with maturities of one hundred eighty (180) days or less of a domestic issuer rated at least “A-1” by Standard
& Poor’s Rating Group, a division of McGraw-Hill Companies or “P-1” by Moody’s Investors Service, Inc.;

 

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(iii) certificates
of deposit with maturities of one (1) year or less from the date of acquisition issued by any commercial bank having capital and
surplus in excess of $1,000,000,000;

 

(iv) investments
existing on the date of this Agreement and disclosed on Schedule 5.20;

 

(v) so
long as no default(as set forth in Section 7.1 of this Agreement) has occurred and is continuing, temporary advances to employees
to cover incidental expenses to be incurred in the ordinary course of business, in an aggregate outstanding amount not to exceed
$100,000 at any time;

 

(vi) loans
to employees in the ordinary course of business and for tax liabilities in connection with stock option exercises in an aggregate
amount not to exceed $300,000 at any time;

 

(vii) investments
(including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement
of delinquent obligations of, or disputes with, customers or suppliers arising in the ordinary course of business;

 

(viii) deposit
accounts maintained in the ordinary course of business;

 

(ix) capital
expenditures in the ordinary course of business;

 

(x) investments
made by any Borrower in any other Borrower or Shift Finance, LLC;

 

(xi) loans
or advances to GT LLC, a company organized and existing under the laws of the country of Georgia, and a service provider to Borrowers,
in an aggregate amount at any time outstanding not to exceed $300,000;

 

(xii) extensions
of credit to customers made in the ordinary course of business and m connection with the sale or lease of inventory in the ordinary
course of business; and

 

(xiii) other
investments in an aggregate amount not to exceed $250,000 at any time outstanding.

 

5.21 Distributions.
No Borrower shall declare or pay any dividends or distributions (other than dividends payable solely in capital stock) or purchase,
redeem, retire, or otherwise acquire for value any of its capital stock or securities convertible into capital stock now or hereafter
outstanding, or make any distribution of assets to stockholders as such whether in cash, assets, or in obligations of such Borrower,
or allocate or otherwise set apart any sum for the payment of any dividend or distribution on, or for the purchase, redemption,
or retirement of any capital stock, or make any other distribution by reduction of capital or otherwise in respect of any capital
stock, or purchase or otherwise acquire for value any capital stock except (i) SOL can pay cash dividends to STI, and (ii) pursuant
to repurchase plans upon an employee’s, consultant’s or director’s death or termination of employment provided
the aggregate amount of all such repurchases does not exceed $250,000 in any fiscal year.

 

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5.22 Borrower’s Name, Location;
Notice of Location Changes. Each Borrower’s names and organizational structures have remained the same since
formation, except that prior to November 7, 2014, Shift Technologies, Inc. was known as
Shift Technologies Inc. during the past five years. Each Borrower will continue to use only the name set forth on the first
page of this Agreement unless such Borrower gives Bank prior written notice of any changes. Furthermore, no Borrower shall do
business under another name nor use any trade name without giving 10 calendar days’ prior written notice to Bank. No
Borrower will change its registration to another state without prior written notice to Bank. Each Borrower’s address
appearing on the signature page hereto is such Borrower’s chief executive office. No Borrower will change its chief
executive office without prior written notice to Bank. At Bank’s request, Borrowers will provide Bank with evidence
that no change in such Borrower’s name, location, jurisdiction of organization or organizational structure has
occurred.

 

5.23 Location
of Vehicles. Each Borrower shall keep all Financed Vehicles only at such Borrower’s regular dealer locations as approved
from time to time by Bank. Each Borrower will provide Bank with thirty (30) days’ prior written notice of any new location
where Financed Vehicles may be located.

 

5.24 Status
of Collateral. All Collateral is genuine and validly existing. Except for items of insignificant value or as otherwise reflected
in writing by Borrowers to Bank under a borrowing base or otherwise, (i) Collateral constituting inventory, equipment and fixtures
is in good condition, not obsolete and is either currently saleable or usable; and (ii) Collateral constituting accounts, contract
rights, notes, chattel paper and other third-party obligations to pay is fully enforceable in accordance with its terms and not
subject to return, dispute, setoff, credit allowance or adjustment, except for discounts for prompt payment. Unless Borrowers provide
Bank with written notice to the contrary, no Borrower has notice or knowledge of anything that would impair the ability of any
third-party obligor to pay any debt to such Borrower when due.

 

5.25 Ownership;
Maintenance of Collateral; Restrictions on Liens and Dispositions. Borrowers are the sole owners of the Collateral free of
all liens, claims, other encumbrances and security interests except Permitted Liens (defined below). Each Borrower shall: (i) maintain
the Collateral in good condition and repair (reasonable wear and tear excepted), and not permit its value to be impaired; (ii)
not permit waste, removal or loss of identity of the Collateral; (iii) keep the Collateral free from all liens, executions, attachments,
claims, encumbrances and security interests (other than Bank’s security interest and Permitted Liens); (iv) defend the Collateral
against all claims and legal proceedings by Persons other than Bank and other Persons holding Permitted Liens; (v) pay and discharge
when due all taxes, levies and other charges or fees upon the Collateral except for payment of taxes contested by such Borrower
in good faith by appropriate proceedings so long as no levy or lien has been imposed upon the Collateral; (vi) not lease, sell
or transfer the Collateral to any party nor move it to any new location outside of the ordinary course of business; (vii) not permit
the Collateral, without the consent of Bank, to become a fixture or an accession to other goods; (viii) not permit the Collateral
to be used in violation of any applicable law, regulation or policy of insurance; and, (ix) as to the Collateral consisting of
instruments and chattel paper, preserve Bank’s rights in it against all other parties not holding Permitted Liens. Notwithstanding
the above, each Borrower may sell, lease or transfer inventory in the ordinary course of its business provided that no sale, lease
or transfer shall include any transfer or sale in satisfaction (partial or complete) of a debt owed by such Borrower; title will
not pass to buyer until such Borrower physically delivers the goods to buyer or such Borrower ships the goods F.O.B. to buyer’s
destination; and sales and/or leases to such Borrower’s affiliates shall be for fair market value, cash on delivery, with
the proceeds of Financed Vehicles remitted to Bank. The following constitute the only “Permitted Liens”:

 

(a) liens
in favor of Bank;

 

(b) liens
for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings, provided that Borrowers maintain adequate reserves in accordance with GAAP;

 

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(c) liens
securing claims or demands of materialmen, artisans, mechanics, carriers, warehousemen, landlords and other like Persons arising
in the ordinary course of a Borrower’s business and imposed without action of such parties, provided that the payment
thereof is not delinquent for more than 30 days or that is subject to a good faith dispute;

 

(d) liens
arising from judgments, decrees or attachments in circumstances which do not constitute a default under Section 7.1 of this Agreement;

 

(e) the
following pledges or deposits, to the extent made in the ordinary course of a Borrower’s business: deposits under worker’s
compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids, tenders or
contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or other similar bonds for the performance
of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure statutory obligations (other than liens
arising under ERISA or environmental liens) or surety or appeal bonds, or to secure indemnity, performance or other similar bonds;

 

(f) liens
on insurance proceeds in favor of insurance companies granted solely as security for financed premiums;

 

(g) liens
in favor of Lithia securing Borrowers’ obligations under the Lithia Loan Agreement and obligations to reimburse Lithia for
any payments made by Lithia under the Lithia Guaranty or any guaranty covering a Supplemental Floor Plan Facility;

 

(h) liens
in favor of any lender arising under any Supplemental Floor Plan Facility on Supplemental Floor Plan Collateral provided that any
such lender has entered into an intercreditor agreement in form and substance satisfactory to Bank in its reasonable discretion;

 

(i) liens
in favor of customs and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the
importation of goods;

 

(j) liens in favor of financial institutions arising in connection
with deposit or securities accounts held at such financial institutions, provided that such liens only secure fees and service
charges and customary chargebacks or reversals of credits associated with such accounts;

 

(k) liens
against cash to secure reimbursement obligations under corporate credit cards permitted under this Agreement;

 

(l) liens
against cash to secure letter of credit reimbursement obligations permitted under this Agreement;

 

(m) liens
existing on the date hereof and disclosed on Schedule 5.25;

 

(n) purchase
money liens on any equipment or other fixed assets hereafter acquired or the assumption of any liens on any such property existing
at the time of such acquisition, or a lien incurred in connection with any conditional sale or other title retention agreement
or a capital lease;

 

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(o) other liens not described above
securing obligations other than indebtedness, provided that such liens do not secure obligations in excess of $250,000 in
the aggregate at any time; and

 

(p) liens
incurred in connection with the extension, renewal or refinancing of the indebtedness secured by liens of the type described in
clauses (f) and (g) above, provided that any extension, renewal or replacement lien shall be limited to the property encumbered
by the existing lien and the principal amount of the Indebtedness being extended, renewed or refinanced (as may have been reduced
by any payment thereon) does not increase.

 

5.26 Maintenance
of Security Interest; Purchase Money Security Interests. Each Borrower shall take any action
requested by Bank to preserve the Collateral, to establish the value of the Collateral, and to establish the priority of, to perfect,
to continue the perfection of or to enforce Bank’s interest in the Collateral and Bank’s rights under this Agreement;
and shall pay all costs and expenses thereof. Each Borrower shall also cooperate with Bank in obtaining control (for purposes of
perfection under the Uniform Commercial Code) of any Collateral consisting of deposit accounts, investment property, letter of
credit rights, electronic chattel paper and any other collateral where Bank may obtain perfection through control. Each Borrower
and Bank intend to maintain the full effect of any purchase money security interest granted in favor of Bank notwithstanding the
fact that the Collateral so purchased is also pledged as security for other Obligations under the Loan Documents.

 

5.27 Collateral
Records, Reports and Statements. Each Borrower shall keep accurate and complete records respecting
the Collateral in such form as Bank may approve. At such times as Bank may require, each Borrower shall furnish to Bank any records
and information Bank might require, including, without limitation, a statement certified by such Borrower and in such form and
containing such information as may be prescribed by Bank showing the current status and value of the Collateral.

 

5.28 Chattel
Paper; Instruments. Chattel paper and instruments (including, without limitation, all drafts,
notes, acceptances, and other writings which evidence a right to the payment of money) shall be on forms satisfactory to Bank.
Upon request of Bank, each Borrower shall promptly deliver all original chattel paper and instruments to Bank or, alternatively,
at Bank’s option, promptly add a legend to all such chattel paper and all instruments indicating that such items have been
“assigned to U.S. Bank National Association”.

 

5.29 Government
Contracts. If any
account debtor or contract obligor is the United States of America or any state or any department, agency or instrumentality of
the United States or any state, then, at Bank’s request, each Borrower shall promptly notify Bank and execute and deliver
to Bank all such additional documents and take all such additional steps as may be required by Bank to assign all payments due
and to become due under such accounts and/or contract rights to Bank (including, without limitation, all documents that may be
required under the Federal Assignment of Claims Act of 1940, as amended, or under any replacement act) and shall cooperate with
Bank in obtaining the acknowledgment and acceptance of the assignment by the appropriate government officers.

 

5.30 Title
Documents. During a default, Bank may require each Borrower to deliver all Title Documents to
Bank. Until such time, all original Title Documents shall be maintained by each Borrower in a manner acceptable to Bank. All Title
Documents shall be available for inspection by Bank at any reasonable time. If
required by Bank during a default, Bank’s security interest shall be noted on all certificates of title. Notwithstanding
the foregoing, (a) Bank’s security interest shall be noted on the Title Document covering any Financed Vehicle, if such notation
is required to perfect a security interest in such Vehicle, and (b) all warehouse receipts, bills of lading and other negotiable
documents of title shall be delivered to Bank.

 

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5.31 Landlord
Consents. Within ninety (90) days of this Agreement, each Borrower shall use commercially reasonable efforts to obtain and
deliver to Bank an agreement, release and consent to the security interest of Bank in the Collateral, substantially in the form
of Exhibit B attached hereto and incorporated herein by reference (each a “Landlord Consent”) from each owner
or landlord of any real property leased by such Borrower as lessee.

 

5.32 [Reserved].

 

5.33 Anti-Corruption
Laws; Sanctions; Anti-Terrorism Laws; PATRIOT Act.

 

		(a)	Each Borrower and its Subsidiaries, and to the knowledge
of Borrower the directors, agents, officers and employees of such Borrower and its Subsidiaries, are in compliance with Anti-Corruption
Laws and applicable Sanctions in all material respects. None of any Borrower, any Subsidiary or to the knowledge of such Borrower
or such Subsidiary any of their respective directors, officers or employees is a Sanctioned Person. No Advance, use of proceeds
or other transactions contemplated hereby will violate Anti-Corruption Laws or applicable Sanctions.

 

		(b)	Neither the making of the Advances hereunder nor the use
of the proceeds thereof will violate the PATRIOT Act, the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation
or executive order relating thereto or successor statute thereto. Each Borrower and its Subsidiaries are in compliance in all
material respects with the PATRIOT Act.

 

		(c)	Each Borrower shall, and shall cause each Subsidiary to,
provide such information and take such actions as are reasonably requested by Bank in order to assist Bank in maintaining compliance
with the PATRIOT Act.

 

ARTICLE 6. RIGHTS AND DUTIES OF BANK

 

6.1 Authority
to Perform for Borrower. Each Borrower presently appoints any officer of Bank as such Borrower’s attorney-in-fact (coupled
with an interest and irrevocable while any Obligations remain unpaid) to do any of the following during the existence of a default
by a Borrower hereunder: (i) to file, endorse or place the name of such Borrower on any invoice or document of title relating to
accounts, drafts against customers, notes, acceptances, assignments of government contracts, instruments, financing statements,
checks, drafts, money orders, insurance claims or payments or other documents evidencing payment or a security interest relating
to the Collateral; (ii) to do all such other acts and things necessary to carry out such Borrower’s duties under this Agreement
and the other Loan Documents; and (iii) to perfect, protect and/or realize upon Bank’s interest in the Collateral. If
the Collateral includes funds or property in depository accounts, each Borrower authorize each of its depository institutions
to remit to Bank, without liability to Borrowers, all of such Borrower’s funds on deposit with such institution upon written
direction by Bank after default by any Borrower hereunder. All acts by Bank are hereby ratified and approved, and Bank shall not
be liable for any acts of commission or omission, or for any errors of judgment or mistakes of fact or law.

 

6.2 Verification and Notification;
Bank’s Rights. Bank may verify Collateral in any manner, and Borrowers shall assist Bank in so doing. During the
existence of a default hereunder, Bank may at any time and Borrowers shall, upon request of Bank, notify the account debtors
to make payment directly to Bank; and Bank may enforce collection of, sell, settle, compromise, extend or renew the
indebtedness of such account debtors; all without notice to or the consent of Borrowers. Until such account debtors are so
notified, Borrowers, as agents of Bank, shall make collections on the Collateral. Bank may at any time notify any bailee
possessing Collateral to tum over the Collateral to Bank.

 

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6.3 Collateral Preservation. Bank
shall use reasonable care in the custody and preservation of any Collateral in its physical possession but in determining
such standard of reasonable care, each Borrower expressly acknowledges that Bank has no duty to: (i) insure the Collateral
against hazards; (ii) ensure that the Collateral will not cause damage to property or injury to third parties; (iii) protect
it from seizure, theft or conversion by third parties’ claims or acts of God; (iv) give to Borrowers any notices
received by Bank regarding the Collateral; (v) perfect or continue perfection of any security interest in favor of Borrowers;
(vi) perform any services, complete any work-in-process or take any other action in connection with the management or
maintenance of the Collateral or preserve the value of any Collateral; (vii) sue or otherwise effect collection upon any
accounts even if Bank shall have made a demand for payment upon individual account debtors; or (viii) preserve any rights
against any prior party to any chattel paper or instrument of which Bank has possession or control. Notwithstanding any
failure by Bank to use reasonable care in preserving the Collateral, each Borrower agrees that Bank shall not be liable for
consequential or special damages arising therefrom.

 

6.4 Credit
Balances; Setoff. As additional security for the payment of the Obligations, each Borrower hereby grants to Bank a security
interest in, a lien on and an express contractual right to set off against all depository account balances, cash and any other
property of Borrowers now or hereafter in the possession of Bank and the right to refuse to allow withdrawals from any account
(collectively “Setoff’). Bank may at any time during the existence of a default hereunder (notwithstanding any
notice requirements under this or other agreements between any Borrower and Bank) Setoff against the Obligations whether or not
the Obligations (including future installments) are then due or have been accelerated, all without any advance or contemporaneous
notice or demand of any kind to Borrowers, such notice and demand being expressly waived. Bank will endeavor to provide notice
to Borrowers after any such setoff, provided that Bank’s failure to provide any such notice shall not in any manner impact
Bank’s rights and remedies under this Section 6.4.

 

6.5 Expenditures
by Bank. If any Borrower fails to discharge or pay
when due any amounts any Borrower is required to pay or discharge under this Agreement or if any Borrower fails to obtain and maintain
any required insurance, Bank may (but shall not be obligated to) discharge or pay all taxes, liens, security interests, encumbrances
and other claims at any time levied or placed on the Collateral and pay all costs for insuring, maintaining and preserving the
Collateral. Any insurance obtained by Bank may, at Bank’s option, be “single interest insurance” covering only
Bank’s interest in the Collateral. All such expenditures incurred or paid by Bank will become a part of the Obligations and
will be payable on demand, together with interest at the highest rate applicable to the Obligations from the date incurred or paid
by Bank to the date of repayment by Borrowers. Any action by Bank hereunder shall not be construed as curing any default so as
to bar Bank from any remedy that it would otherwise have.

 

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ARTICLE 7. DEFAULTS

 

7.1 Defaults.
Notwithstanding any cure periods described below, Borrowers will immediately notify Bank in writing when any Borrower obtains
knowledge of the occurrence of any default specified below. Regardless of whether any Borrower has given the required notice, the
occurrence of one or more of the following will constitute a default:

 

		(a)	Nonpayment. Any
Borrower shall fail to pay (i) any interest or any fees, charges, costs or expenses under the Loan Documents by 5 calendar days
after the same becomes due or (ii) any outstanding principal amount under this Agreement or any of the Loan Documents when due.

 

		(b)	Nonperformance. Any
Borrower or any Guarantor or other Loan Party shall fail to perform or observe any agreement, term, provision, condition, or covenant
(other than a default otherwise specifically described in this Section 7.1) required to be performed or observed by any Borrower,
any Guarantor or other Loan Party hereunder or under any other Loan Document and, if capable of cure, such default continues for
more than thirty (30) days after Bank mails written notice to Borrower of such default.

 

		(c)	Misrepresentation. Any
financial information, statement, certificate, representation or warranty given to Bank by any Borrower, any Guarantor or other
Loan Party (or any of their representatives) in connection with entering into this Agreement or any other Loan Document and/or
any borrowing hereunder or thereunder, or required to be furnished under the terms hereof or thereof, shall prove untrue or misleading
in any material respect (as determined by Bank in the exercise of its reasonable judgment) as of the time when given.

 

		(d)	Default on Other Obligations.
Borrowers shall be in default under the terms of any loan agreement, promissory note, lease, conditional sale contract
or other agreement, document or instrument evidencing, governing or securing any indebtedness owing by any Borrower to Bank or
any affiliate of Bank or U.S. Bancorp, or any indebtedness in excess of $250,000 in the aggregate owing by Borrowers to any third
party, and the period of grace, if any, to cure said default shall have passed.

 

		(e)	Judgments. Any
judgment shall be obtained against Borrowers which, together with all other outstanding unsatisfied judgments against Borrowers,
shall exceed the sum of $250,000 in the aggregate for Borrowers (in excess of insurance coverage) and shall remain unvacated,
unbonded or unstayed for a period of 30 calendar days following the date of entry thereof.

 

		(f)	Inability to Perform;
Bankruptcy/Insolvency. (i) Any Borrower or any Guarantor shall die or cease to exist; or (ii) any Guarantor shall attempt
to revoke or repudiate any Guaranty; or (iii) any Guaranty or other Loan Document ceases to be or is asserted not to be in full
force and effect, or becomes or is asserted to be unenforceable; or (iv) any bankruptcy, insolvency or receivership proceedings,
or an assignment for the benefit of creditors, shall be commenced under any federal or state law by or against any Borrower or
any Guarantor or any other Loan Party; or (v) any Borrower or any Guarantor is unable or admits in writing its inability to pay
its debts as they mature.

 

		(g)	Adverse Change; Insecurity.
(i) There is a material adverse change in the business, properties, financial condition or affairs of any Borrower
or any Guarantor, or in any collateral securing the Obligations; or (ii) Bank in good faith deems itself insecure.

 

		(h)	Default under Seller Agreements.
Any Loan Party fails to pay, perform or comply with any term, condition or obligation in any Seller Agreement, or any
Seller Agreement ceases to be, or is asserted by any Person not to be, in full force and effect.

 

		(i)	Change in Control. The
occurrence of a Change in Control.

 

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7.2 Termination
of Loans; Additional Bank Rights. Upon the occurrence of any of the events identified in Section 7.1, Bank may at any
time (notwithstanding any notice requirements or grace/cure periods under this or other agreements between any Borrower and Bank)
(i) immediately terminate its obligation, if any, to make additional loans to any Borrower; (ii) Setoff, and/or (iii) take such
other steps to protect or preserve Bank’s interest in any collateral securing the Obligations, including without limitation,
notifying account debtors to make payments directly to Bank, advancing funds to protect any collateral securing the Obligations
and insuring collateral securing the Obligations at each Borrower’s expense; all without demand or notice of any kind, all
of which are hereby waived.

 

7.3 Acceleration
of Obligations. Upon the occurrence of any of the events identified in Section 7.1 (other than Section 7.l(f)), and
the passage of any applicable cure periods, Bank may at any time thereafter, by written notice to Borrowers, declare the unpaid
principal balance of any Obligations, together with the interest accrued thereon and other amounts accrued hereunder and under
the other Loan Documents, to be immediately due and payable; and the unpaid balance will thereupon be due and payable, all without
presentation, demand, protest or further notice of any kind, all of which are hereby waived. Upon the occurrence of any event under
Section 7.l(f), the unpaid principal balance of any Obligations, together with all interest accrued thereon and other amounts accrued
hereunder and under the other Loan Documents, will thereupon be immediately due and payable, all without presentation, demand,
protest or notice of any kind, all of which are hereby waived, and notwithstanding anything to the contrary contained herein or
in any of the other Loan Documents. Nothing contained in this Article will limit Bank’s
right to Setoff as provided in this Agreement or any set off rights otherwise available to Bank in law or by agreement.

 

7.4 Additional
Remedies. In addition to the remedies for default set forth above or in the other Loan Documents, Bank shall have all
other rights and remedies for default provided by the Uniform Commercial Code, as well as any other applicable law, INCLUDING,
WITHOUT LIMITATION, THE RIGHT TO REPOSSESS, RENDER UNUSABLE AND/OR DISPOSE OF THE COLLATERAL WITHOUT JUDICIAL PROCESS. The rights
and remedies specified herein are cumulative and are not exclusive of any rights or remedies which Bank would otherwise have. With
respect to such rights and remedies:

 

		(a)	Assembling Collateral;
Storage; Use of a Borrower’s Name/Other Property. Bank may require any Borrower to assemble the Collateral and
to make it available to Bank at any convenient place designated by Bank. Each Borrower recognizes that Bank will not have an adequate
remedy in law if this obligation is breached and, accordingly, such Borrower’s obligation to assemble such Collateral shall
be specifically enforceable. Bank shall have the right to take immediate possession of any Collateral and each Borrower irrevocably
authorizes Bank to enter any of the premises wherever such Collateral shall be located and to store, repair, maintain, assemble,
manufacture, advertise and sell, lease or dispose of (by public sale or otherwise) the same on said premises until sold, all without
charge or rent to Bank. Bank is hereby granted an irrevocable license to use, without charge, each Borrower’s equipment,
inventory, labels, patents, copyrights, franchises, names, trade secrets, trade names, trademarks and advertising matter and any
property of a similar nature; and each Borrower’s rights under all licenses and franchise agreements shall inure to Bank’s
benefit. Further, each Borrower releases Bank from obtaining a bond or surety with respect to any repossession and/or disposition
of the Collateral.

 

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		(b)	Notice of Disposition. Written notice, when required
by law, sent to any address of a Borrower in this Agreement, at least 10 calendar days (counting the day of sending) before the
date of a proposed disposition of the Collateral is reasonable notice. Notification to account debtors by Bank shall not be deemed
a disposition of the Collateral.

 

		(c)	Possession of Collateral/Commercial Reasonableness. Bank shall not, at any time, be obligated either to take or
                                                                                 retain possession or control of the Collateral. With respect to Collateral in the possession or control of Bank, each
                                                                                 Borrower and Bank agree that as a standard for determining commercial reasonableness, Bank need not liquidate, collect, sell
                                                                                 or otherwise dispose of any of the Collateral if Bank believes, in good faith, that disposition of the Collateral would not
                                                                                 be commercially reasonable, would subject Bank to third-party claims or liability, that other potential purchasers could be
                                                                                 attracted or that a better price could be obtained if Bank held the Collateral for up to one year; and Bank shall not then be
                                                                                 deemed to have retained the Collateral in satisfaction of the Obligations. Bank may sell Collateral without giving any
                                                                                 warranties and may specifically disclaim any warranties of title or the like. Furthermore, Bank may sell the Collateral on
                                                                                 credit (and reduce the Obligations only when payment is received from the buyer), at wholesale and/or with or without an
                                                                                 agent or broker; and Bank need not complete, process or repair the Collateral prior to disposition.

 

7.5 Other
Remedies. Nothing herein is intended to restrict Bank’s rights under any of the Loan Documents or at law, including its
rights with respect to any Collateral in accordance with any applicable intercreditor agreement to which Bank is a party, and Bank
may exercise all such rights and remedies as and when they are available.

 

ARTICLE 8. MISCELLANEOUS

 

8.1 Delay;
Waiver; Cumulative Remedies. No delay or omission on the part of Bank in exercising any right, power or privilege hereunder
or under any of the other Loan Documents and no course of dealing between the Borrowers and the Bank, the making of any Advances
hereunder or the acceptance by the Bank at any time or from time to time of partial payment on the Obligations will operate as
a waiver of such right, power or privilege, nor will any single or partial exercise of any right, power or privilege preclude other
or further exercise thereof or the exercise of any other right, power or privilege. Bank may waive any default at any time after
the occurrence of such default without waiving any other subsequent or prior default. No waiver of any default (whether or not
Bank knows or should have known of such default) or consent to any departure by the Borrowers from any of the terms of this Agreement
shall be deemed to have occurred unless Bank has expressly agreed in writing. No amendment, modification or waiver of, or consent
with respect to, any provision of this Agreement shall in any event be effective unless the same shall be in writing and signed
and delivered by the Bank. Any such waiver of any provision of this Agreement, and any consent to any departure by the Borrower
from the terms of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose
for which given. No notice to or demand on the Borrowers not required hereunder shall in any event entitle the Borrowers to any
other or further notice or demand in similar or other circumstances or constitute a waiver of the right of the Bank to any other
or further action in any circumstances without notice or demand. The rights and remedies herein specified are cumulative and are
not exclusive of any rights or remedies which Bank would otherwise have at law or in equity or otherwise by any other instrument,
document, or agreement now existing or hereafter arising.

 

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8.2 Relationship to Other Documents.
The warranties, covenants and other obligations of Borrowers (and the rights and remedies of Bank) that are outlined in this
Agreement and the other Loan Documents are intended to supplement each other. In the event of any inconsistencies in any of the
terms in the Loan Documents, all terms will be cumulative so as to give Bank the most favorable rights set forth in the conflicting
documents, except that if there is a direct conflict between any preprinted terms and specifically negotiated terms (whether included
in an addendum or otherwise), the specifically negotiated terms will control.

 

8.3 Participations;
Guarantors. Each Borrower agrees that Bank may, at its option, sell all or any interests in this Agreement and other Loan Documents
to other Persons (each a “Participant”), and in connection with such sales (and thereafter) disclose any information
(financial or otherwise) Bank may have concerning any Borrower to any such Participant or potential Participant instructed to keep
the information confidential. Borrowers also agree that, from time to time, Bank may, in its discretion and without obligation
to any Borrower, any Guarantor, surety or other accommodation party or any other Loan Party, disclose information about a Borrower
and the loans evidenced by the Loan Documents to any Guarantor, surety or other accommodation party or any other Loan Party. This
provision does not obligate Bank to supply any information or release any Borrower from the obligation to provide such information,
and each Borrower agrees to keep all Guarantors and other Loan Parties advised of its financial condition and other matters which
may be relevant to such Guarantor’s or other Loan Party’s obligations to Bank.

 

8.4 Successors.
The rights, options, powers and remedies granted in this Agreement and the other Loan Documents will extend to Bank and to
its successors and assigns, will be binding upon Borrowers and their respective successors and assigns and will be applicable hereto
and to all renewals and/or extensions hereof. No Borrower may assign or transfer any of its rights or obligations under any Loan
Documents without the prior written consent of Bank. Bank may assign its rights or obligations under any of the Loan Documents,
provided, however, that so long as no default or event of default has occurred under
this Agreement, Borrowers’ consent must be obtained for any such assignment, such consent not to be unreasonably withheld
or delayed.

 

8.5 Indemnification.
Except for harm arising from Bank’s willful misconduct or gross negligence as determined by a court of competent jurisdiction
in a final nonappealable order, each Borrower hereby indemnifies and agrees to defend and hold Bank harmless from any and all losses,
costs, damages, claims and expenses of any kind suffered by or asserted against Bank relating to claims by third parties arising
out of the financing provided under the Loan Documents or related to any collateral securing the Obligations (including, without
limitation, any Borrower’s failure to perform its obligations relating to any environmental matters). This indemnification
and hold harmless provision will survive the termination of the Loan Documents and the satisfaction of the Obligations.

 

8.6 Notice
of Claims Against Bank; Limitation of Certain Damages. In order to allow Bank to mitigate any damages to any Borrower from
Bank’s alleged breach of its duties under the Loan Documents or any other duty, if any, to any Borrower, each Borrower agrees
to give Bank written notice of any claim or defense it has against Bank, whether in tort or contract, relating to any action or
inaction by Bank under the Loan Documents, or the transactions related thereto, or of any defense to payment of the Obligations
for any reason. Each Borrower agrees to provide such notice to Bank within 60 days after such Borrower has knowledge of such
action or inaction by Bank or has knowledge of such defense to payment. The requirement of providing such notice to Bank represents
such Borrower’s agreed-to standard of performance. If a Borrower does not timely deliver such notice to Bank, such Borrower
shall not assert and shall be deemed to have waived any such claim or defense. Notwithstanding any claim that a Borrower may
have against Bank, Bank will not be liable to any Borrower for consequential and/or special damages arising therefrom.

 

    29

     

    

 

8.7 Notices.
Although any notice required to be given hereunder or under any of the other Loan Documents might be accomplished by other
means, notice will always be deemed given when hand-delivered, deposited in the United States Mail, with postage prepaid, sent
by overnight delivery service, or sent by telex or facsimile, in each case to the address set forth below or as amended from time
to time by written notice to the other party or parties to this Agreement.

 

8.8 Order
of Payments; Application of Proceeds. Payments due hereunder and under other Loan Documents will be made in lawful money of
the United States, and Bank is authorized to charge payments due under the Loan Documents against any account of Borrowers with
Bank. All payments may be applied by Bank to principal, interest and other amounts due under the Loan Documents in any order which
Bank elects.

 

8.9 Applicable
Law and Jurisdiction; Interpretation. This Agreement and all other Loan Documents will be governed by and interpreted in accordance
with the internal laws of the State of Oregon, except to the extent superseded by federal law. Invalidity of any provisions of
this Agreement will not affect any other provision. BORROWERS HEREBY CONSENT TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL
COURT SITUATED IN THE COUNTY OR FEDERAL JURISDICTION OF THE STATE OF OREGON, AND WAIVES ANY RIGHT TO CLAIM THAT THE FORUM IS NOT
CONVENIENT, WITH REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS AGREEMENT, ANY PROMISSORY NOTE, THE COLLATERAL,
ANY OTHER LOAN DOCUMENT, OR ANY TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF THE FOREGOING. Nothing
herein will affect Bank’s rights to serve process in any manner permitted by law, or limit Bank’s right to bring proceedings
against any Borrower in the competent courts of any other jurisdiction or jurisdictions. This Agreement, the other Loan Documents
and any amendments hereto (regardless of when executed) will be deemed effective and accepted only upon Bank’s receipt of
the executed originals thereof.

 

8.10 Waiver
of Jury Trial. EACH BORROWER AND BANK HEREBY JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
RELATING TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS THEREUNDER, ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY TRANSACTION
ARISING THEREFROM OR CONNECTED THERETO. EACH BORROWER AND BANK EACH REPRESENTS TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY
AND VOLUNTARILY GIVEN.

 

8.11 Joint
and Several Liability.

 

(a) If
there is more than one Borrower, the liability of Borrowers will be joint and several, and each reference to “Borrower”
will be deemed to refer to all Borrowers jointly and severally.

 

    30

     

    

 

8.12 Guaranty
Provisions.

 

(a) Each Borrower
hereby agrees that it is jointly and severally liable for all of the Liabilities as a primary obligor and not merely as
surety. Each Borrower hereby absolutely and unconditionally guarantees to Bank, the prompt payment and performance when due,
whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Obligations, including,
without limitation, all court costs and attorneys’ and paralegals’ fees and expenses, and all other costs paid or
incurred by Bank in endeavoring to collect all or any part of the Obligations from, or in prosecuting any action against, any
Loan Party (such guaranteed liabilities and obligations are the “Guaranteed
Liabilities”). Each Borrower further agrees that the Guaranteed Liabilities may be extended or renewed in
whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding
any such extension or renewal. The guaranty provided hereunder is a guaranty of payment and not of collection. Each Borrower
waives any right to require Bank to sue any other Borrower, or otherwise to enforce its payment against any collateral
securing all or any part of the Guaranteed Liabilities. Each Borrower is jointly and severally liable for all amounts due to
Bank under this Agreement and the other Loan Documents, regardless of which Borrower actually receives the benefit of the
Advances or other extensions of credit hereunder or the amount of such Advances received or the manner in which Bank accounts
for such Advances or other extensions of credit on its books and records. Each Borrower acknowledges that such Borrower is
jointly and severally liable for such Advances issued by Bank.

 

(b) Bank
shall not be required or obligated to take any of the following action prior to pursuing any rights or remedies Bank may have against
any Borrower: (1) take any action to collect from, or to file any claim of any kind against, any other Borrower or any other person
or entity liable, jointly or severally, for the full and timely payment and performance of the Guaranteed Liabilities; (2) take
any steps to protect, enforce, take possession of, perfect any interest in, foreclose or realize on any collateral or security,
if any, securing the Guaranteed Liabilities; or (3) in any other respect, exercise any diligence whatsoever in enforcing, collecting
or attempting to collect any of the Guaranteed Liabilities by any means.

 

(c) Each
Borrower unconditionally and irrevocably waives each and every defense (other than the indefeasible payment and satisfaction in
full in cash of the Guaranteed Liabilities) which would otherwise impair, restrict, diminish or affect any of the Guaranteed Liabilities.
Without limiting the foregoing, Bank shall have the exclusive right from time to time without impairing, restricting, diminishing
or affecting any of the Guaranteed Liabilities, and without notice of any kind to all Borrowers, to (1) provide additional financial
accommodations to any Borrower; (2) accept partial payments on the Guaranteed Liabilities; (3) take and hold collateral or security
to secure the Guaranteed Liabilities, or take any other guaranty to secure the Guaranteed Liabilities; (4) in its sole discretion,
apply any such collateral or security, and direct the order or manner of sale thereof, and the application of the proceeds thereof;
(5) release any Borrower or other co-obligor of the Guaranteed Liabilities; and (6) settle, release, compromise, collect or otherwise
liquidate the Guaranteed Liabilities or exchange, enforce, sell, lease, use, maintain, impair and release any collateral or security
therefor in any manner, without affecting or impairing any of the Guaranteed Liabilities hereunder.

 

(d) Each
Borrower hereby unconditionally waives (1) notice of any default by any Borrower in the full and prompt payment and performance
of the Guaranteed Liabilities, and (2) presentment, notice of dishonor, protest, demand for payment and any other notices of any
kind.

 

(e) Each
Borrower assumes full responsibility for keeping informed of (1) the financial condition of the other Borrowers; (2) the extent
of the Guaranteed Liabilities; and (3) all other circumstances bearing upon the other Borrowers or the risk of non-payment of the
Guaranteed Liabilities. Each Borrower agrees that Bank shall have no duty or obligation to advise, furnish or supply such Borrower
of or with any information known to Bank, including, but not limited to, the financial condition of the other Borrowers, any other
circumstances relating to non-payment of the Guaranteed Liabilities or otherwise. If Bank,
in its sole discretion, provides any advice or information to any Borrower, Bank shall be under no obligation to investigate the
matters contained in such advice or information, or to correct such advice or information if Bank
thereafter knows or should have known that such advice or information is misleading or untrue, in whole or in part, or to update
or provide any other advice or information in the future.

 

    31

     

    

 

(f) Each
Borrower acknowledges and agrees that it may have a right of indemnification, subrogation, contribution and reimbursement from
the other Borrowers or Bank based upon its execution of this Loan Agreement. Each Borrower understands the benefits of having such
rights, including, but not limited to, (1) such Borrower’s right to reimbursement from the other Borrowers of all monies
expended for the payment of the Guaranteed Liabilities; and (2) such Borrower’s subrogation to the rights of Bank after payment
of the Guaranteed Liabilities. No Borrower shall exercise any such rights of indemnification, subrogation, contribution or reimbursement
from the other Borrowers or Bank prior to the indefeasible payment and satisfaction in full to Bank of the Guaranteed Liabilities.

 

(g) Each
Borrower appoints each other Borrower as its agent for all purposes relevant to this Loan Agreement and the Other Agreements, including,
without limitation, the giving and receipt of notices and execution and delivery of all documents, instruments and certificates
contemplated herein and all modifications hereto. Any acknowledgment, consent, direction, certification or other action which might
otherwise be valid or effective only if given or taken by all of the Borrowers or any Borrower acting singly, shall be valid and
effective if given or taken only by one Borrower, whether or not the other Borrowers join therein.

 

(h) The
successful operation and condition of each of the Borrowers is dependent on the continued successful performance of the functions
of the group of the Borrowers as a whole and the successful operation of each of the Borrowers is dependent on the successful performance
and operation of each other Borrower. Each Borrower expects to derive benefit (and its board of directors or other governing body
has determined that it may reasonably be expected to derive benefit), directly and indirectly, from (i) successful operations of
each of the other Borrowers and (ii) the credit extended by the Bank to Borrowers hereunder, both in their separate capacities
and as members of the group of companies. Each Borrower acknowledges and agrees that the proceeds of any Advances made to Borrowers
that are subsequently advanced to such Borrower will be used by such Borrower for its working capital and accordingly each such
Borrower is benefitted by the Advances provided by Bank to Borrowers hereunder. Each Borrower has determined that execution, delivery,
and performance of this Loan Agreement and any other Loan Documents to be executed by such Borrower is within its purpose, will
be of direct and indirect benefit to such Borrower, and is in its best interest.

 

(i) Notwithstanding
any provision of the guaranty set forth in this Section 8.12 (this “Guaranty”) to the contrary, it is intended
that this Guaranty, and any Liens granted by each Borrower to secure this Guaranty, not constitute a “Fraudulent Conveyance”
(as defined below). Consequently, each Borrower agrees that if this Guaranty, or any liens or security interests securing this
Guaranty, would, but for the application of this sentence, constitute a Fraudulent Conveyance, this Guaranty and each such Lien
shall be valid and enforceable only to the maximum extent that would not cause this Guaranty or such Lien to constitute a Fraudulent
Conveyance, and this Guaranty shall automatically be deemed to have been amended accordingly at all relevant times. For purposes
hereof, “Fraudulent Conveyance” means a fraudulent conveyance under Section 548 of the “Bankruptcy Code”
(as hereinafter defined) or a fraudulent conveyance or fraudulent transfer under the provisions of any applicable fraudulent conveyance
or fraudulent transfer law or similar law of any state, nation or other governmental unit, as in effect from time to time.

 

(j) Notwithstanding
the foregoing, no Borrower shall be deemed to be a guarantor of any Swap Obligations of any other Borrower owing to Bank if
such Borrower is not an “Eligible Contract Participant” as defined in §l(a)(18) of the Commodity Exchange
Act and the applicable rules issued by the Commodity Futures Trading Commission and/or the Securities and Exchange Commission
(collectively, and as now or hereafter in effect, “the ECP Rules”) to the extent that the providing of such
guaranty by such Borrower would violate the ECP Rules or any other applicable law or regulation.

 

    32

     

    

 

8.13 Sharing
of Information with Affiliates. Each Borrower hereby consents to the sharing of information concerning or provided by such
Borrower or its affiliates by and among Bank, U.S. Bancorp, and their present and future affiliates, and their respective present
and future officers, directors, employees, agents and advisors.

 

8.14 Additional
Acts. Upon request by Bank, Borrowers will, and will cause each other Loan Party to, from time to time provide such information
(including without limitation copies of Seller Agreements), execute such documents and do such acts as may reasonably be required
by Bank in connection with any indebtedness or obligations of any Loan Party to Bank.

 

8.15 Documents
Satisfactory to Bank. All information, documents and instruments required to be executed or delivered to Bank shall be in form
and substance satisfactory to Bank.

 

8.16 Attachments.
All documents attached hereto, including any appendices, schedules, riders, and exhibits to this Agreement, are hereby expressly
incorporated into this Agreement by reference.

 

8.17 References.
References to this Agreement, any Security Document or any other Loan Document shall mean such Loan Document as amended, modified,
supplemented or extended from time to time, and any number of substitutions, renewals and replacements thereof or therefor.

 

8.18 Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of said
counterparts taken together shall constitute one document.

 

8.19 Copies.
Each Borrower hereby acknowledges the receipt of a copy of this Agreement and all other Loan Documents. Bank may, on behalf
of any Borrower, create a microfilm or optical disk or other electronic image of this Agreement and any or all of the Loan Documents.
Bank may store the electronic image of such Agreement and Loan Documents in its electronic form and then destroy the paper original
as part of Bank’s normal business practices, with the electronic image deemed to be an original.

 

8.20 Integration.
This Agreement supersedes and replaces any previous loan agreements or letters of understanding relating to Borrowers’
flooring lines of credit with Bank. This Agreement and the promissory notes, if any, executed by Borrowers in connection with this
Agreement may renew promissory notes previously executed by Borrowers but shall not be deemed to be in satisfaction of, or to constitute
a novation of, such previously executed promissory notes. Except as amended, renewed, or replaced in writing prior to or concurrently
with this Agreement, all terms and conditions of any existing Loan Documents remain in full force and effect.

 

8.21 Entire
Agreement; Modification. This Agreement constitutes the entire understanding and agreement of the parties as to the matters
set forth herein. No modification or amendment to this Agreement shall be effective unless in writing signed by the party or parties
sought to be charged or bound by such modification or amendment.

 

UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY US CONCERNING
ANY LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER’S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY US TO BE ENFORCEABLE.

 

Signature pages follow.

 

    33

     

    

 

	SHIFT TECHNOLOGIES, INC.	 	U.S. BANK NATIONAL ASSOCIATION
	 	 	 
	By:	/s/ Irakly George Arison Areshidze	 	By:	 /s/ Gilmore Hector
	Name:  	Irakly George Arison Areshidze	 	Name: 	 Gilmore Hector
	Title:	 Co-Chief Executive Officer	 	Title:	Vice President

 

	Address:	2500 Market Street	 	Address: 	Dealer Commercial Services
	 	San Francisco, CA 94114	 	 	13010 SW 68th Pkwy, Ste. 100
	 	 	 	Portland, OR 97223
	 	 	 
	Telecopier:	(___) ____-______	 	Telecopier: 	503-603-2961

 

	SHIFT OPERATIONS LLC	 	 
	 	 	 
	By: Shift Technologies, Inc., Managing Member	 	 
	 	 	 
	By:	/s/ Irakly George Arison Areshidze	 	 	 
	Name:	Irakly George Arison Areshidze	 	 	 
	Title:	 Co-Chief Executive Officer	 	 	 

 

	Address:	2500 Market Street	 	 	 
	 	San Francisco, CA 94114	 	 	 
	 	 	 
	Telecopier:	 (___) ____-______	 	 

 

Notice of Force Placed Insurance.
Oregon law requires the following warning:

 

WARNING

 

Unless you (Borrower) provide us (Bank) with evidence of
insurance coverage as required by our loan agreement, we may purchase insurance at your expense to protect our interest. This insurance
may, but need not, also protect your interest. If the collateral
becomes damaged, the coverage we purchase may not pay any claim you make or any claim made against you. You may later cancel this
coverage by providing evidence that you have obtained property coverage elsewhere.

 

You are responsible for the cost of any insurance purchased
by us. The cost of this insurance may be added to your loan balance. If
the cost is added to your loan balance, the interest rate on the underlying loan will apply to this added amount. The effective
date of coverage may be the date your prior coverage lapsed or the date you failed to provide proof of coverage.

 

The coverage we purchase may be considerably more expensive
than insurance you can obtain on your own and may not satisfy any need for property damage coverage or any mandatory liability
insurance requirements imposed by applicable law.

 

By signing below, the undersigned Borrower acknowledges receipt
of the above notice as of 10/11/18.

 

	Date:	October 11, 2018	 	/s/ Irakly George Arison Areshidze
	 	 	 	Printed Name: 	Irakly George Arison Areshidze
	 	 	 	 	Co-Chief Executive Officer

 

    34

     

    

 

EXHIBIT A

 

Compliance Certificate

 

This Compliance Certificate is executed
and delivered by SHIFT TECHNOLOGIES, INC., a Delaware corporation (“STI”), and SHIFT OPERATIONS LLC,
a Delaware limited liability company (“SOL” and together with STI, individually referred to herein as a “Borrower”
and collectively “Borrowers”) to U.S. BANK NATIONAL ASSOCIATION (“Bank”) pursuant to the requirements
of the Loan and Security Agreement dated as of October 11, 2018, among Borrowers and Bank (“Loan Agreement”). Any
capitalized terms used herein and not defined herein shall have the meanings given to such terms in the Loan Agreement. This Compliance
Certificate shows the calculation of the financial covenants as of _________, ______ (“Calculation Date”).

 

Attached are the calculations showing whether Borrowers were
in compliance with Section 5.13 of the Loan Agreement as of the Calculation Date. Each such calculation is derived from Borrowers’
books and records and correctly reflects whether Borrowers are in compliance with the applicable provisions of the Loan Agreement.

 

This Compliance Certificate is executed on ___________, __________.

 

	 	SHIFT TECHNOLOGIES, INC.
	 	 	                         
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 
	 	SHIFT OPERATIONS LLC
	 	 
	 	By: Shift Technologies, Inc., its Managing Member
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    35

     

    

 

EXHIBIT B

 

LESSOR’S/LANDLORD’S CONSENT

 

U.S. BANK NATIONAL ASSOCIATION (hereinafter “Bank”),
whose address is 13010 SW 68th Pkwy Ste. 100, Portland, OR 97223 I PD-OR-LEAS, Attn: Dealer Commercial Services, has or is
about to acquire a security interest in the following property (hereinafter the “Collateral”) of the lessee(s)
identified below (hereinafter the “Lessee”):

 

All of the following whether now owned or existing or hereafter
created or acquired, wheresoever located, together with all additions and accessions thereto and all proceeds and products thereof.
All inventory, including all goods held for sale, lease or demonstration or to be furnished under contracts of service, goods leased
to others, trade-ins and repossessions, raw materials, work-in-process and materials and supplies used or consumed in Lessee’s
business; all equipment and fixtures, all spare and repair parts, all tools, all accessions, parts and all appurtenances.

 

Some or all of the Collateral may now or hereafter be located
at _____________________________ (hereinafter the “Premises”) which is subject to a lease and/or agreement (hereinafter
the “Lease”) by and between the undersigned (hereinafter the “Lessor”) and the Lessee. A
copy of said Lease (if in writing) is annexed hereto as Attachment A.

 

Lessor hereby irrevocably and
unconditionally disclaims any and all interest, claim or right in and to the Collateral however arising (including, without
limitation, any lien for rent or otherwise against the Collateral provided or allowed under applicable state law) while the
Lessee is indebted to Bank; agrees not to foreclose or levy against the Collateral while the Lessee is indebted to Bank; and
waives any claim against Bank based on marshalling of assets or other equitable principles.

 

Upon reasonable prior notice, Bank may enter the Premises and
inspect, maintain, store, sell and remove the Collateral without bond or surety or court order, provided that any damage to the
Premises caused by said removal (reasonable wear and tear excepted) shall be the responsibility of the Lessee and Bank. Lessor
also agrees to provide Bank with a copy of any notice of default or termination of the Lease given to Lessee. If Lessor obtains
possession of the Premises and any Collateral remains on the Premises, Bank shall be entitled to lease that part of the Premises
where the Collateral is located for up to thirty (30) days for the purpose of storing, selling and/or processing such Collateral,
and Bank agrees to pay the monthly rental stated in the Lease for such use of the Premises for each month.

 

Lessor represents to Bank that he/she/it has the authority to
enter into this agreement with Bank and, furthermore, that Lessor knows of no other parties who could claim an interest in the
Collateral through Lessor. Lessor will retain a copy of this agreement for Lessor’s records.

 

This agreement constitutes the entire agreement of the parties,
and its terms shall not be modified or waived except by a writing signed by Bank and Lessor. The validity, interpretation and enforcement
of this agreement shall be governed by and interpreted in accordance with the laws of the state where the Premises is located.

 

All documents attached hereto, including any appendices,
schedules, riders, and exhibits to this Lessor’s/Landlord’s Consent, are hereby expressly incorporated by reference.

 

	Dated:	 	 
	 	 	 
	[LANDLORD]	 
	 	               	 
	By	 	 
	Name:	 	 
	Title:	 	 

 

LESSEE’S WAIVER

 

The undersigned, Lessee, hereby consents to the foregoing in
its entirety; and waives any claims against Lessor for complying with the terms of the foregoing agreement or acting at the request
of Bank.

 

	[_______________________]
    (“Lessee”)	 
	 	                                                            	 
	By	 	 
	Name: 	 	 
	Title:	 	 

 

    36

     

    

 

ATTACHMENT A

(Attach Lease)

 

    37

     

    

 

SCHEDULE
5.7

 

PERMITTED INDEBTEDNESS

 

None

 

    38

     

    

 

SCHEDULE S.20

 

PERMITTED INVESTMENTS

 

STI has made a loan in the amount of $246,820.57 to Co-Chief
Executive Officer Tobias Russell to satisfy a portion of the exercise price of certain of his stock options and related withholding
taxes. The loan is evidenced by a nine-year partial recourse promissory note and secured by a stock pledge agreement both dated
July 30, 2018.

 

    39

     

    

 

SCHEDULE 5.25

 

PERMITTED LIENS

 

None

 

 

40Exhibit
10.24

 

AMENDMENT
NUMBER 1 TO 

LOAN AND SECURITY AGREEMENT

 

  

This
Amendment Number 1 to Loan and Security Agreement dated as of February 14, 2019, among U.S. BANK NATIONAL ASSOCIATION (“Bank”)
and SHIFT TECHNOLOGIES, INC., a Delaware corporation (“STI”) and SHIFT OPERATIONS LLC, a Delaware
limited liability company (“SOL”), as co-obligors and co-borrowers and not as accommodation parties (unless otherwise
specified herein, STI and SOL are each individually a “Borrower” and collectively the “Borrowers”)
(this “Amendment”) amends the Loan and Security Agreement among Borrowers and Bank dated as of October 11,
2018 (the “Loan Agreement”).

 

In
consideration of the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Borrowers and Bank hereby agree as follows:

 

		1.	Definitions.

 

		(a)	Capitalized
terms not otherwise defined in this Amendment shall have the meanings given such terms in the Loan Agreement.

 

		(b)	The
following defined terms are hereby added to Article 1 of the Loan Agreement in proper alphabetical order as follows:

 

“Equity
Interests” means all shares, interests or other equivalents, however designated, of or in a corporation, limited liability company, or partnership, whether or not voting, including but not limited to common stock, member interests, partnership
interests, warrants, preferred stock, convertible debentures, and all agreements, instruments and documents convertible, in whole
or in part, into any one or more or all of the foregoing.

 

“Subsidiary”
and “Subsidiaries” means, separately and collectively as the context requires, each and all entities in which
a Borrower owns, directly or indirectly, at least a 50% equity interest.

 

		2.	Amendments.

 

		(a)	Section
                                         2.3(b) (Flooring Line of Credit: Purpose of Advances) of
                                         the Loan Agreement is deleted and replaced with the following:

 

		(b)	No
Advance to finance Used Vehicles shall exceed an amount equal to: (A) for Used Vehicles purchased at an auction 100% of a Borrower’s
actual documented acquisition cost; or (B) for other Used Vehicles, 100% of the wholesale value of such Used Vehicles, as determined
by Bank with reference to an acceptable Valuation Guide.

 

		(b)	Section
                                         2.11 (Flooring Line of Credit: PR Account Advances) of
                                         the Loan Agreement is deleted and replaced with the following:

 

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 2.11 Commercial Sweep Amount. In addition to any payments otherwise required by this Agreement, a Borrower may reduce the principal balance outstanding under this Agreement by means of a commercial sweep subject to the following provisions:

 

 (a) The commercial sweep, the deposit account in which the commercial sweep occurs and the entire commercial sweep process are governed by the relevant terms of a treasury management services agreement with Bank (the “TMS Agreement”), except as expressly provided in this Section 2.11.

 

(b) The
aggregate amount transferred pursuant to a commercial sweep (the “Commercial Sweep Amount”) may not exceed 50%
of such Borrower’s aggregate outstanding Related Principal Portion for Used Vehicles, calculated on a daily basis.

 

(c) If
the aggregate Commercial Sweep Amount exceeds the maximum amount permitted hereunder, Bank is authorized to transfer the amount
of any such excess to the deposit account in which the commercial sweep occurs.

 

		(c)	Section
                                         2.12 (Flooring Line of Credit: Capital Adequacy; Yield Protection) of the Loan
                                         Agreement is deleted and replaced with the following:

 

2.12
Capital Adequacy; Yield Protection. If there shall occur any Change in Law which shall have the effect of imposing on
Bank (or Bank’s holding company) any increase or expansion of or any new: tax (excluding taxes on its overall income and
franchise taxes), charge, fee, assessment or deduction of any kind whatsoever, or reserve, capital adequacy, special deposits
or similar requirements against credit extended by, assets of, or deposits with or for the account of Bank or
other-conditions affecting the extensions of credit under this Agreement; then each Borrower shall pay to Bank such
additional amount as Bank deems necessary to compensate Bank for any increased cost to Bank attributable to the extension(s)
of credit under this Agreement and/or for any reduction in the rate of return on Bank’s capital and/or Bank’s revenue
attributable to such extension(s) of credit. “Change in Law” means the occurrence, after the date of this
Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any
governmental authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the
force of law) by any governmental authority; provided that notwithstanding anything herein to the contrary, (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United
States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a
“Change in Law,” regardless of the date enacted, adopted or issued. Bank’s determination of the additional
amount(s) due under this paragraph shall be binding in the absence of manifest error, and such amount(s) shall be payable
within 10 days of demand and, if recurring, as otherwise billed by Bank. Failure or delay on the part of Bank to demand
compensation pursuant to this Section shall not constitute a waiver of the Bank’s right to demand such
compensation.

 

    2 of 6

     

    

 

		(d)	Section
                                         5.11(b) (Warranties and Covenants: Financial Statements and Reporting) of the
                                         Loan Agreement is deleted and replaced with the following:

 

		(b)	[Reserved].

 

		(e)	Section
5.13 (Warranties and Covenants: Financial Covenant) of the Loan Agreement is deleted and replaced with the following:

 

5.13
Financial Covenant. As of the last day of each calendar month during the term of this Agreement (each a “Determination
Date”), Borrowers’ Liquidity as of such Determination Date shall
equal or exceed four (4) times the Three-Month Cash Burn Amount as of such date.

 

As
used herein:

 

“Liquidity” means,
as of any Determination Date, an amount equal to the sum of (i) cash that would appear on Borrowers’ consolidated balance
sheet as unrestricted on such date plus (ii) the aggregate principal amount of loans that Borrowers could duly borrow
and incur on such date and that, under the terms of the loan agreement for such loans, Borrowers may use for any general
corporate or general working capital purpose (as opposed to loans that, under the terms of the loan agreement for such loans,
Borrowers must use for a specific purpose), including, without limitation, loans under the Lithia Loan Agreement to the
extent the conditions for drawing such loans have been satisfied.

 

“Three-Month
Cash Burn Amount” means, as of any Determination Date, an amount equal to the decrease, if any, in the amount of cash
and cash equivalents held by Borrowers and their Subsidiaries on such day as compared to the amount of cash and cash equivalents
held by Borrowers and their Subsidiaries as of the last day of the month three months prior thereto.

 

		(f)	Section
5.31 (Warranties and Covenants: Landlord Consents) of the Loan Agreement is deleted and replaced with the following:

 

5.31
Landlord Consents. On or before February 28, 2019, each Borrower shall use commercially reasonable efforts to obtain and deliver
to Bank an agreement, release and consent to the security interest of Bank in the Collateral, substantially in the form of Exhibit
B attached hereto and incorporated herein by reference (each a “Landlord Consent”) from each owner or landlord
of any real property leased by such Borrower as lessee.

 

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		(g)	Section
5.33 (Warranties and Covenants: Anti-Corruption Laws; Sanctions; Anti-Terrorism Laws; PATRIOT Act) of the Loan Agreement
is deleted and replaced with the following:

 

5.33 Anti-Corruption
Laws; Sanctions. Each Borrower, its Subsidiaries and their respective officers and employees and to the knowledge of each
Borrower, its directors and agents are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects.
Each Borrower has implemented and maintains in effect for itself and its Subsidiaries policies and procedures to ensure compliance
by Borrower, its Subsidiaries, and their respective officers, employees, directors, and agents with Anti-Corruption Laws and applicable
Sanctions. No Borrower, any of its Subsidiaries or any director, officer, employee, agent, or affiliate of any Borrower or any
of its Subsidiaries is an individual or entity that is, or is 50% or more owned (individually or in the aggregate, directly or
indirectly) or controlled by individuals or entities (including any agency, political subdivision or instrumentality of any government)
that are (i) the target of any Sanctions or (ii) located, organized or resident in a country or territory that is, or whose government
is, the subject of Sanctions (currently Crimea, Cuba, Iran, North Korea and Syria). No Borrower will request any Advance, and
will not use, and each Borrower will ensure that its Subsidiaries and its or their respective directors, officers, employees and
agents shall not use, the proceeds of any Advance in fu1therance of an offer, payment, promise to pay, or authorization of the
payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws. No Borrower will,
directly or indirectly, use the proceeds of any Advance, or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other Person, (i) to fund any activities or business of or with any Person, or in any country
or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions, or (ii) in any other manner
that would result in a violation of Sanctions by any Person (including any Person participating in the Loans, whether as underwriter,
advisor, investor, or otherwise). No Borrower will use or allow any tenants or subtenants to use, or permit any Subsidiary to
use or allow any tenants or subtenants to use, its prope1ty for any business activity that violates any federal or state law or
that supports a business that violates any federal or state law. Each Borrower shall, and shall cause each Subsidiary to, provide
such information and take such actions as are reasonably requested by Bank to assist Bank in maintaining compliance with anti-money
laundering laws and regulations.

 

		(h)	The
following is hereby added to the Loan Agreement as Section 5.34 (Warranties and Covenants: Divisions) thereof:

 

5.34 Divisions.
For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any
comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes
the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original
Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been
organized on the first date of its existence by the holders of its Equity Interests at such time.

 

		3.	Effectiveness.
The effectiveness of this Amendment is subject to execution by all parties to the Loan Agreement and satisfaction by Borrowers
of such other requirements as Bank may require.

 

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		4.	Representations
and Warranties. Each Borrower and by signing below, Guarantor, reaffirms the representations and warranties made by such Borrower
and Guarantor, respectively, in each of the Loan Documents and agrees that (a) each of such representations and warranties are
true and correct as though made on the date hereof, except for changes that are permitted by the terms of such Loan Document;
(b) except as amended hereby or otherwise amended in writing signed by all parties thereto, the Loan Agreement and the other Loan
Documents remain unmodified and in full force and effect in accordance with their terms and (c) neither Borrowers nor any other
Loan Party has any defenses, setoffs, counterclaims or claims against the Bank related to any of the Loan Documents or any of
the indebtedness or obligations related thereto.

 

		5.	Miscellaneous.

 

(a)
Counterparts. This Amendment may be executed in any number of counterparts all
of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Amendment
by signing any such counterpart.

 

(b) Copies.
The Loan Agreement, together with all amendments thereto from time to time, is a “transferable record” as defined
in applicable law relating to electronic transactions. Therefore, Bank may, on behalf of Borrowers, create a microfilm or optical
disk or other electronic image of the Loan Agreement (and all amendments thereto including, without limitation, this Amendment)
that is an authoritative copy of the Loan Agreement as defined in such law. Bank may store the authoritative copy of the Loan
Agreement in its electronic form and then destroy the paper original as part of Bank’s normal business practices. Bank, on its
own behalf, may control and transfer such authoritative copy as permitted by such law.

 

 (c) References. Any and all references to the Loan Agreement in any instrument or document are hereby amended to refer to the Loan Agreement as amended by this Amendment.

 

 (d) Expenses. Each Borrower agrees to reimburse Bank upon demand for all attorneys’ fees of in-house and outside counsel and all other costs, fees and out-of-pocket expenses incurred by Bank in connection with the preparation, negotiation, execution, and delivery of this Amendment and any other document required to be furnished herewith and in enforcing each Borrower’s obligations hereunder.

 

		6.	Entire
Agreement; Modification. This Amendment constitutes the entire understanding and agreement of the parties as to the matters
set forth herein. No modification or amendment to any of the Loan Documents shall be effective unless in writing signed by the
party or parties sought to be charged or bound by such modification or amendment.

 

UNDER
OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY US CONCERNING ANY LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT
FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER’S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION
AND BE SIGNED BY US TO BE ENFORCEABLE.

 

Signature
page follows.

 

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	SHIFT
    TECHNOLOGIES, INC.	 	U.S.
    BANK NATIONAL ASSOCIATION
	 	 	 
	By:	/s/ Irakly George Arison Areshidze	 	By: 	/s/ Gilmore Hector
	Name: 	Irakly George Arison Areshidze	 	Name:  	Gilmore Hector
	Title: 	Co-Chief Executive Officer	 	Title: 	Vice President

 

	SHIFT
    OPERATIONS LLC	 
	 	 
	By:
    Shift Technologies, Inc., Managing Member	 
	 	 
	By:	/s/
    Irakly George Arison Areshidze	 
	Name: 
    	Irakly
    George Arison Areshidze	 
	Title:
    	Co-Chief
    Executive Officer	 

 

ACKNOWLEDGEMENT
AND CONSENT OF GUARANTOR

 

Guarantor
hereby acknowledges, consents, and agrees to all terms and conditions of the foregoing Amendment.

 

	LITHIA
    MOTORS, INC.	 
	 	 
	By	/s/
    John F. North, III	 
	Name: 
    	John
    F. North, III	 
	Title:
    	Senior
    Vice President and Chief Financial Officer	 

 

 

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