Exhibit 10.2

 

SECURITIES PURCHASE AGREEMENT

 

between

 

FIVE OAKS INVESTMENT CORP.

 

and

 

HUNT COMPANIES EQUITY HOLDINGS, LLC

 

dated as of

 

January 18, 2018

 

 

 

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”), dated as of January 18,
2018 is entered into by and between Five Oaks Investment Corp., a Maryland
corporation (the “Company”) and Hunt Companies Equity Holdings, LLC (the
“Investor”).

 

RECITALS

 

WHEREAS, the Company wishes to sell to Investor, and Investor wishes to purchase
from the Company, 1,539,406 shares (the “Shares”) of the Company's common stock,
par value $0.01 per share, (the“ Common Stock”) subject to the terms and
conditions set forth herein;

 

WHEREAS, simultaneously and in connection with the execution and delivery of
this Agreement, the Company and the Investor desire to enter into the
Registration Rights Agreement (as defined below) and the Shareholder Agreement
(as defined below); and

 

WHEREAS, simultaneously with the execution and delivery of this Agreement, the
Company and XL Investments (as defined below) have entered into a Warrant
Termination Agreement (the “Warrant Termination Agreement”), pursuant to which
the Company and XL Investments have agreed to irrevocably cancel all of the
Warrants and terminate the Warrant Agreement, effective as of the Closing.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

ARTICLE I

 

DEFINITIONS

 

The following terms have the meanings specified or referred to in this ARTICLE
I:

 

“Action” means any claim, action, cause of action, demand, lawsuit, arbitration,
inquiry, audit, notice of violation, proceeding, litigation, citation, summons,
subpoena or investigation of any nature, civil, criminal, administrative,
regulatory or otherwise, whether at law or in equity.

 

“Affiliate” of a Person means any other Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such Person. The term “control” (including the terms
“controlled by” and “under common control with”), when used with respect to any
specified Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.

 

“Agreement” has the meaning set forth in the preamble.

 

“Audited Financial Statements” means the Company's audited financial statements
filed on the Form 10-K.

 

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“Benefit Plan” means any employment, consulting, pension, benefit, retirement,
compensation, profit-sharing, deferred compensation, incentive, performance
award, phantom equity, stock or stock-based, change in control, retention,
severance, vacation, paid time off, fringe-benefit and other similar agreement,
plan, policy, program or arrangement (and any amendments thereto), in each case
whether or not reduced to writing and whether funded or unfunded, including each
“employee benefit plan” within the meaning of Section 3(3) of ERISA, whether or
not tax-qualified and whether or not subject to ERISA, that is or has been
maintained, sponsored, contributed to, or required to maintained, sponsored, or
contributed to by the Company for the benefit of any current or former employee,
officer, director, retiree, independent contractor or consultant of the Company
or any spouse or dependent of such individual, or under which Company or any of
its Subsidiaries has or may have any liability, or with respect to which
Investor or any of its Affiliates would reasonably be expected to have any
liability, contingent or otherwise.

 

“Business Day” means any day except Saturday, Sunday or any other day on which
commercial banks located in New York City are authorized or required by Law to
be closed for business.

 

“Closing” has the meaning set forth in Section 2.03.

 

“Closing Date” has the meaning set forth in Section 2.03.

 

“Charter” means the Articles of Amendment and Restatement of the Company, filed
with the SEC on May 3, 2013.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Common Stock” has the meaning set forth in the recitals.

 

“Company” has the meaning set forth in the preamble.

 

“Current Financial Statements” means the consolidated financial statements of
Five Oaks, filed as an exhibit to Five Oaks’ Form 10-Q as of September 30, 2017.

 

“Disclosure Schedules” means the Disclosure Schedules delivered by the Company
concurrently with the execution and delivery of this Agreement.

 

“Encumbrance” means any charge, claim, community property interest, pledge,
condition, equitable interest, lien (statutory or other), option, security
interest, mortgage, easement, encroachment, right of way, right of first
refusal, or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income or exercise of any other attribute of ownership.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated thereunder.

 

“Financial Statements” means, collectively, the Audited Financial Statements and
the Current Financial Statements.

 

 2 

 

 

“Form 10-K” means the Company’s Annual Report on Form 10-K for the year ended
December 31, 2016.

 

“GAAP” means United States generally accepted accounting principles in effect
from time to time.

 

“Governmental Authority” means any federal, state, local or foreign government
or political subdivision thereof, or any agency or instrumentality of such
government or political subdivision, or any self-regulated organization or other
non-governmental regulatory authority or quasi-governmental authority (to the
extent that the rules, regulations or orders of such organization or authority
have the force of Law), or any arbitrator, court or tribunal of competent
jurisdiction.

 

“Governmental Order” means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.

 

“Investor” has the meaning set forth in the preamble.

 

“Knowledge” or any other similar knowledge qualification, means the actual or
constructive knowledge of any director or officer of such Person, in each case,
after due inquiry.

 

“Law” means any statute, law, ordinance, regulation, rule, code, order,
constitution, treaty, common law, judgment, decree, other requirement or rule of
law of any Governmental Authority.

 

“Losses” means losses, damages, liabilities, deficiencies, Actions, judgments,
interest, awards, penalties, fines, costs or expenses of whatever kind,
including reasonable attorneys’ fees and the cost of enforcing any right to
indemnification hereunder and the cost of pursuing any insurance providers;
provided, that “Losses” shall not include punitive damages, except in the case
of fraud or to the extent actually awarded to a Governmental Authority or other
third party.

 

“Management Agreement” has the meaning set forth in Section 3.07.

 

“Material Adverse Effect” means any event, occurrence, fact, condition or change
that is, or could reasonably be expected to become, individually or in the
aggregate, materially adverse to the business, results of operations, condition
(financial or otherwise) or assets of the Company.

 

“MGCL” has the meaning set forth in Section 3.06.

 

“NYSE” New York Stock Exchange.

 

“OCCP” has the meaning set forth in Section 3.07.

 

“Permits” means all permits, licenses, franchises, approvals, authorizations,
registrations, certificates, variances and similar rights obtained, or required
to be obtained, from Governmental Authorities.

 

 3 

 

 

“Person” means an individual, corporation, partnership, joint venture, limited
liability company, Governmental Authority, unincorporated organization, trust,
association or other entity.

 

“Purchase Price” has the meaning set forth in Section 2.01.

 

“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of the date hereof, by and among the Company and the Investor as such
agreement may be amended, restated or modified from time to time.

 

“Restrictive Provision” has the meaning set forth in Section 3.06.

 

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

 

“SEC Filings” means the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2016 and all other reports filed by the Company pursuant to
the Exchange Act of 1934 since the filing of such Annual Report and prior to the
date hereof.

 

“Series A Preferred Stock” has the meaning set forth in Section 3.02(a).

 

“Shareholder Agreement” means the Shareholder Agreement, dated as of the date
hereof, by and among the Company and the Investor as such agreement may be
amended, restated or modified from time to time.

 

“Shares” has the meaning set forth in the recitals.

 

“Subsidiary” means any corporation, partnership, limited liability company or
other legal entity of which the Company (either alone or through or together
with any other Subsidiary) (A) directly or indirectly owns a majority of the
outstanding share capital, voting securities or other equity interests or (B) is
entitled, by contract or otherwise, to elect, appoint or designate a majority of
the members of the board of directors or managers or other governing body of
such legal entity.

 

“Tax Return” means any return, declaration, report, claim for refund,
information return or statement or other document relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.

 

“Taxes” means (a) all federal, state, local, foreign and other income, gross
receipts, sales, use, production, ad valorem, transfer, documentary, franchise,
registration, profits, license, lease, service, service use, withholding,
payroll, employment, unemployment, estimated, excise, severance, environmental,
stamp, occupation, premium, property (real or personal), real property gains,
windfall profits, customs, duties or other taxes, fees, assessments or charges
of any kind whatsoever, (b) any interest, additions or penalties with respect
thereto and any interest in respect of such additions or penalties, and (c) any
liability in respect of the items described in clauses (a) and (b) payable by
reason of successor, transferee or other liability, operation of law, Treasury
Regulations under section 1502 of the Code, or by contract, indemnity or
otherwise.

 

 4 

 

 

“Transaction Documents” means this Agreement, the Shareholder Agreement and the
Registration Rights Agreement and any other agreements, instruments and
documents required to be delivered at or prior to the Closing or entered into by
the parties at the Closing.

 

“Transfer Agent” means American Stock Transfer and Trust Company.

 

“Treasury Regulations” means any Treasury regulations promulgated under the
Code.

 

“Warrant Agreement” means that certain Warrant to Purchase the Designated Number
of Shares of Common Stock of the Company, dated as of September 29, 2012, by and
between XL Investments Ltd., a Bermuda limited liability company and the
Company, as amended and restated on August 18, 2014.

 

“Warrant Termination Agreement” has the meaning set forth in the recitals.

 

“Warrants” means those certain warrants to purchase 3,753,492 shares of Common
Stock pursuant to that certain Warrant Agreement.

 

“XL Investments” means XL Investments Ltd., a Bermuda limited liability company.

 

ARTICLE II

 

PURCHASE AND SALE

 

Section 2.01         Purchase and Sale. Subject to the terms and conditions set
forth herein, at the Closing, the Company shall issue and sell to Investor, and
Investor shall purchase from the Company, free and clear of all Encumbrances
(other than restrictions on transfer under (A) applicable federal and state
securities Laws and (B) the Charter), the Shares, for an aggregate purchase
price of $7,342,966.62 (the “Purchase Price”).

 

Section 2.02         Transactions Effected at the Closing.

 

(a)  At the Closing, Investor shall deliver to the Company:

 

(i)  the Purchase Price by wire transfer of immediately available funds to an
account of the Company designated in writing by the Company to Investor prior to
the date hereof; and

 

(ii)  the Transaction Documents and all other agreements, documents, instruments
or certificates required to be delivered by Investor at or prior to the Closing
pursuant to Section 5.02 of this Agreement.

 

(b)  At the Closing, the Company shall:

 

(i)  deliver to the Transfer Agent, with a copy to Investor, an irrevocable
instruction letter directing the Transfer Agent to issue the Shares to the
Investor, either in certificated or book-entry form, as directed by the
Investor; and

 

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(ii)  deliver to Investor the Transaction Documents and all other agreements,
documents, instruments or certificates required to be delivered by the Company
at or prior to the Closing pursuant to Section 5.01 or Section 7.07 of this
Agreement.

 

Section 2.03         Closing. Subject to the terms and conditions of this
Agreement, the purchase and sale of the Shares contemplated hereby shall take
place at a closing ("Closing") to be held at 7:30 a.m., New York time remotely
by electronic mail and/or facsimile at the offices of Paul, Weiss, Rifkind,
Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, NY 10019-6064.
The Closing shall take place simultaneously with the execution and delivery of
this Agreement on the date hereof unless another place or time is agreed to in
writing by the parties hereto (the day on which the Closing takes place, the
“Closing Date”).

 

Section 2.04         Use of Proceeds. The proceeds from the issuance of the
Shares shall be used by the Company for working capital and general corporate
purposes.

 

Section 2.05         Restrictive Provisions. The Company and its board of
directors shall use their respective reasonable best efforts (a) to take all
action necessary so that no Restrictive Provision (as defined below) is or
becomes applicable to this Agreement or any of the other Transaction Document or
the transactions contemplated hereby or thereby, and (b) if any such Restrictive
Provision becomes applicable to any of the foregoing, to take all action
necessary so that the transactions contemplated by this Agreement and the other
Transaction Documents may be consummated as promptly as practicable on the terms
contemplated hereby and thereby and otherwise to eliminate or minimize the
effect of such Restrictive Provision.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as set forth in the correspondingly numbered Section of the Disclosure
Schedules, the Company represents and warrants to Investor that the statements
contained in this ARTICLE III are true and correct as of the date hereof.

 

Section 3.01         Organization and Qualification of the Company. The Company
is a corporation duly organized, validly existing and in good standing under the
Laws of the state of Maryland and has full corporate power and authority to (a)
enter into this Agreement and each of the other Transaction Documents to which
the Company is or will be a party, to carry out its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby
and (b) own, operate or lease the properties and assets now owned, operated or
leased by it and to carry on its business as it has been and is currently
conducted. The execution and delivery by the Company of this Agreement and each
other Transaction Document to which the Company is or will be a party, the
performance by the Company of its obligations hereunder and thereunder and the
consummation by the Company of the transactions contemplated hereby and thereby
have been duly and validly authorized by all requisite corporate action on the
part of the Company, and no other corporate action on the part of the Company or
its board of directors, members or any equity holder is necessary to authorize
the execution, delivery and performance by the Company of this Agreement, or any
of the other Transaction Documents to which the Company is or will be a party.
This Agreement has been duly executed and delivered by the Company, and
(assuming due authorization, execution and delivery by Investor) this Agreement
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms. Each other Transaction
Document to which the Company is or will be a party has been duly executed and
delivered by the Company (assuming due authorization, execution and delivery by
each other party thereto), and such Transaction Document constitutes or will
constitute a legal and binding obligation of the Company enforceable against it
in accordance with its terms. There are no bankruptcy, insolvency,
reorganization or arrangement proceedings threatened or commenced by any Person,
or pending that involve the Company.

 

 6 

 

 

Section 3.02          Capitalization; Subsidiaries.

 

(a)          The authorized capital stock of the Company as of immediately prior
to the Closing consists of (i) 50,000,000 shares of Series A Cumulative
Redeemable Preferred Stock, par value $0.01 per share (the “Series A Preferred
Stock”), of which 1,610,000 shares are issued and outstanding, and (ii)
450,000,000 shares of Common Stock, of which (A) 22,143,758 shares are issued
and outstanding, (B) 27,437,250 shares are issued and outstanding on a
fully-diluted, as converted and as exercised basis, assuming exercise of all
Warrants, (C) no shares are reserved for issuance upon conversion of the Series
A Preferred Stock, and (D) no shares are reserved for issuance pursuant to the
Company's Manager Equity Plan.

 

(b)          The authorized capital stock of the Company as of immediately
following the Closing after giving effect to the transactions contemplated by
this Agreement (including the Warrant Termination Agreement) consists of (i)
50,000,000 shares of Series A Preferred Stock, of which 1,610,000 shares are
issued and outstanding, and (ii) 450,000,000 shares of Common Stock, of which
(A) 23,683,164 shares are issued and outstanding, (B) no shares are reserved for
issuance upon conversion of the Series A Preferred Stock, and (C) no shares are
reserved for issuance pursuant to the Company's Manager Equity Plan. Except as
set forth in the immediately preceding sentence, as of immediately following the
Closing, there are no securities convertible into, or exchangeable or
exercisable for, equity securities of the Company.

 

(c)          As of immediately following the Closing after giving effect to the
transactions contemplated by this Agreement (including the Warrant Termination
Agreement), (i) all of the issued and outstanding shares of capital stock of the
Company will have been duly authorized, validly issued, fully paid and
non-assessable, (ii) all of the issued and outstanding shares of capital stock
of, or other equity interests in, the Company will have been issued in
compliance with all applicable federal and state securities Laws, (iii) none of
the issued and outstanding shares of capital stock of the Company will have been
issued in violation of any agreement, arrangement or commitment to which the
Company or any of its Affiliates is a party or is subject to or in violation of
any preemptive or similar rights of any Person, and (iv) there are no
outstanding warrants to purchase any shares of capital stock, or other equity
interests in, the Company. The Shares are not, or upon issuance will not be,
subject to any preemptive rights. The issuance of the Shares does not contravene
the rules and regulations of the NYSE.

 

 7 

 

 

(d)          Exhibit 21.1 to the Form 10-K sets forth a complete and accurate
list of the name and jurisdiction of each Subsidiary of the Company. All of the
issued and outstanding shares of capital stock of, or other equity interests in,
each such Subsidiary (i) have been duly authorized, validly issued, and issued
in compliance with all applicable federal and state securities Laws, (ii) none
of the issued and outstanding shares of capital stock of any such Subsidiary
have been issued in violation of any agreement, arrangement or commitment to
which the Company, any Subsidiary of the Company or any of their respective
Affiliates is a party or is subject to or in violation of any preemptive or
similar rights of any Person, and (iii) are directly owned of record by the
Company or a Subsidiary of the Company, free and clear of all Encumbrances,
except as set forth in the Form 10-K.

 

(e)          Neither the Company nor any Subsidiary of the Company will at the
Closing directly or indirectly own, or have a direct or indirect ownership
interest in, any Person (other than a Subsidiary of the Company).

 

(f)          Except as set forth in the Form 10-K, there are no outstanding or
authorized options, warrants, convertible or exchangeable securities or other
rights, agreements, arrangements or commitments of any character relating to the
equity securities or capital stock of the Company or any of its Subsidiaries or
obligating the Company or any such Subsidiaries or any of their respective
Affiliates to issue or sell any membership interest, shares of capital stock or
any other interest in, the Company or any of its Subsidiaries. None of the
Company or any of its Subsidiaries has outstanding or authorized any stock
appreciation, phantom stock, profit participation or similar rights. Other than
the organizational documents of the Company and its Subsidiaries (including the
Charter), there are no voting trusts, stockholder agreements, proxies or other
agreements or understandings in effect with respect to the voting or transfer of
any of the equity capital of the Company or any of its Subsidiaries.

 

(g)          Neither the Company nor any Subsidiary thereof has any authorized
or outstanding bonds, debentures, notes or other indebtedness (i) the holders of
which have the right to vote or (ii) convertible into, exchangeable for, or
evidencing the right to subscribe for or acquire securities having the right to
vote, with, in each case, the equity holders of the Company or any of its
Subsidiaries on any matter. Except as set forth in the Form 10-K or as provided
in any of the organizational documents of the Company or any of its
Subsidiaries, there are no agreements or understandings to which the Company,
any of its Subsidiaries or any of their respective Affiliates is a party or by
which it is bound to (x) repurchase, redeem or otherwise acquire any shares of
capital stock or other equity interests of, or voting interest in, the Company
or any Subsidiary of the Company or (y) vote or dispose of any shares of capital
stock or other equity interests of, or voting interest in, the Company or any
Subsidiary of the Company, including any irrevocable proxies or voting
agreements with respect to any shares of capital stock or other equity interests
of, or voting interest in, the Company or any of its Subsidiaries.

 

 8 

 

 

Section 3.03         Non-Contravention. The execution, delivery and performance
by the Company of this Agreement or any other Transaction Document to which it
is or will be a party, and the consummation of the transactions contemplated
hereby or thereby, do not and will not: (a) conflict with or result in a
violation or breach of, or default under (or an event which, with the giving of
notice or the passage of time, or both, would constitute a breach), require any
consent, authorization, approval or exemption by, any Person under, or give to
others any rights of termination or amendment under, any provision of the
Charter other organizational documents of the Company or any of its
Subsidiaries; (b) conflict with or result in a violation or breach of any
provision of any Law or Governmental Order applicable to the Company or any of
its Subsidiaries; (c) require the consent, notice or other action by any Person
under, conflict with, result in a violation or breach of, constitute a default
or an event that, with or without notice or lapse of time or both, would
constitute a default under, result in the acceleration of, or create in any
party, the right to accelerate, terminate, modify or cancel any contract or
Permit to which the Company or any of its Subsidiaries is a party; or (d) result
in the creation or imposition of any Encumbrance on the Company, any of its
Subsidiaries or the Investor. Except for the filing of a Form 8-K with the SEC,
no consent, approval, Permit, Governmental Order, declaration or filing with, or
notice to, any Governmental Authority is required by or with respect to the
Company in connection with the execution and delivery of this Agreement or any
of the other Transaction Documents to which the Company is or will be a party,
and the consummation of the transactions contemplated hereby or thereby.

 

Section 3.04         SEC Filings, Financial Statements; Internal Controls.

 

(a)          the Company has timely filed with or otherwise furnished (as
applicable) to the SEC all filings required to be made by it pursuant to the
Exchange Act and the Securities Act, including the SEC Filings, since January 1,
2015.

 

(b)          As of their respective dates, the SEC Filings, including any
financial statements or schedules included or incorporated by reference therein,
at the time filed, complied as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, and the
rules and regulations of the SEC promulgated thereunder applicable to such SEC
Filings.

 

(c)          As of their respective dates, the SEC Filings, including any
financial statements or schedules included or incorporated by reference therein,
at the time filed, did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, and, in light of the circumstances under which they were
made, not misleading.

 

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(d)   The Financial Statements were prepared from the books and records of the
Company and its Subsidiaries in accordance with GAAP, subject, in the case of
any of the Current Financial Statements, to normal and recurring year-end
adjustments and the absence of notes (that, if included, would not differ
materially from those presented in the Audited Financial Statements). The
Financial Statements fairly present in all material respects the financial
condition of the Company and its Subsidiaries reflected therein as of the
respective dates they were prepared and the results of the operations and the
changes in the financial position of the Company and its Subsidiaries reflected
therein for the periods indicated and have been prepared in the ordinary course
of business, in accordance with past practices and consistently applied
throughout the periods indicated.

 

(e)  The Company has established and maintains a system of “internal controls”
over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the
Exchange Act) sufficient to provide reasonable assurance regarding the
reliability of their financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP.

 

Section 3.05         Undisclosed Liabilities. None of the Company nor any of its
Subsidiaries has any liabilities, obligations or commitments of a type required
to be reflected or reserved against on a balance sheet of the Company and its
Subsidiaries prepared in accordance with GAAP, except (a) those which are
adequately reflected or reserved against in the Financial Statements; (b) those
which have been disclosed to the Investor in writing; and (c) those which have
been incurred in the ordinary course of business, consistent with past practice,
since the date of the Current Financial Statements and which are not material in
amount.

 

Section 3.06         Anti-Takeover Provisions and Ownership Limitations. The
board of directors of the Company has taken all action necessary, if any (a) to
render inapplicable to the transactions contemplated by this Agreement and each
of the other Transaction Documents, the restrictions on business combinations
contained in Subtitle 6 of Title 3 of the Maryland General Corporation Law (the
“MGCL”) and Subtitle 7 of Title 3 of the MGCL, (b) so that the restrictions
contained in the organizational documents of the Company applicable to
“ownership limitations” (including Sections 7.2 and 7.3 of the Company’s
Articles of Amendment and Restatement) and/or “business combinations” will not
apply to the execution, delivery or performance of this Agreement or any other
Transaction Document or the consummation of the transactions contemplated hereby
or thereby, and (c) to irrevocably approve for all purposes the Investor and its
Affiliates and this Agreement and each of the other Transaction Documents to
exempt such Persons, agreements and transactions from, and to elect for the
Company, the Investor and their respective Affiliates not to be subject to, any
“moratorium,” “control share acquisition,” “fair price,” “interested
shareholder,” “affiliate transaction,” “business combination” or other
antitakeover Laws of any jurisdiction (each and any of (a), (b) or (c), a
“Restrictive Provision”) applicable to the Company, Investor or any of their
respective Affiliates or this Agreement or any of the other Transaction
Documents or with respect to any of the foregoing, which resolutions have not
been rescinded, modified or withdrawn in any way.

 

Section 3.07         Claims Against OCCP. None of the Company, any of its
Subsidiaries nor any of their respective Affiliates has any pending or
threatened claims, demands, damages or Actions (including with respect to any
matters that are indemnifiable under Section 9 of the Management Agreement,
dated as of May 16, 2012 (the “Management Agreement”), by and between the
Company and Oak Circle Capital Partners LLC (“Oak Circle”)) outstanding against
Oak Circle or any of its Affiliates, equity holders, members, partners,
managers, directors, officers, employees, agents, representatives or advisors,
of whatsoever kind or nature, whether with respect, arising under, related to or
in connection with the Management Agreement or otherwise.

 

 

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Section 3.08         Absence of Certain Changes, Events and Conditions. Other
than as disclosed in the SEC Filings, since the date of the Company's last
interim balance sheet, and other than in the ordinary course of business
consistent with past practice, there has not been, with respect to the Company
or any of its Subsidiaries, any:

 

(a)  event, occurrence or development that has had, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect;

 

(b)  amendment of the charter, by-laws or other organizational documents of the
Company (including the Charter) or any of its Subsidiaries;

 

(c)  split, combination or reclassification of any shares of its capital stock;

 

(d)  issuance, sale or other disposition of any of its capital stock, or grant
of any options, warrants or other rights to purchase or obtain (including upon
conversion, exchange or exercise) any of its capital stock;

 

(e)  declaration or payment of any dividends or distributions on or in respect
of any of its capital stock or redemption, purchase or acquisition of its
capital stock;

 

(f)  material change in any method of accounting or accounting practice of the
Company, except as required by GAAP or as disclosed in the notes to the
Financial Statements;

 

(g)  incurrence, assumption or guarantee of any indebtedness for borrowed money
except unsecured current obligations and liabilities incurred in the ordinary
course of business consistent with past practice;

 

(h)  transfer, assignment, sale or other disposition of any of the assets shown
or reflected in the interim balance sheet or cancellation, discharge or payment
of any material debts, liens or entitlements;

 

(i)  any capital investment in, or any loan to, any other Person;

 

(j)  acceleration, termination, material modification or amendment to or
cancellation of any material contract to which the Company is a party or by
which it is bound;

 

(k)  any material capital expenditures;

 

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(l)  imposition of any Encumbrance upon any of the properties, capital stock or
assets, tangible or intangible, of the Company or any of its Subsidiaries;

 

(m)  adoption, modification or termination of any: (i) material employment,
severance, retention or other agreement with any current or former employee,
officer, director, independent contractor or consultant, (ii) Benefit Plan or
(iii) collective bargaining or other agreement with a union, in each case
whether written or oral;

 

(n)  any loan to (or forgiveness of any loan to), or entry into any other
transaction with, any of its stockholders, directors, officers and employees;

 

(o)  entry into a new line of business or abandonment or discontinuance of
existing lines of business;

 

(p)  adoption of any plan of merger, consolidation, reorganization, liquidation
or dissolution or filing of a petition in bankruptcy under any provisions of
federal or state bankruptcy Law or consent to the filing of any bankruptcy
petition against it under any similar Law;

 

(q)  acquisition by merger or consolidation with, or by purchase of a
substantial portion of the assets or stock of, or by any other manner, any
business or any Person or any division thereof; or

 

(r)  any contract or commitment to do any of the foregoing, or any action or
omission that would result in any of the foregoing.

 

Section 3.09         Title to Assets. The Company has good and valid title to,
or a valid leasehold interest in, all property and other assets reflected in the
Financial Statements or acquired after the date of the last interim balance
sheet, other than properties and assets sold or otherwise disposed of in the
ordinary course of business consistent with past practice since the date of the
last interim balance sheet.

 

Section 3.10         Legal Proceedings; Governmental Orders.

 

(a)  There are no Actions pending or, to the Company’s Knowledge, threatened
against the Company, any of its Subsidiaries or any their respective assets,
properties or businesses by any Person that could, individually or in the
aggregate, reasonably be expected to be material and adverse to the Company or
could otherwise challenge or seek to prevent, enjoin or otherwise delay the
transactions contemplated hereby. No event has occurred or circumstances exist
that may give rise to, or serve as a basis for, any such Action.

 

(b)  There are no outstanding Governmental Orders and no unsatisfied judgments,
penalties or awards against, relating to or affecting the Company or any of its
Subsidiaries.

 

 12 

 

 

Section 3.11         Compliance With Laws; Permits.

 

(a)  The Company and each of its Subsidiaries has complied, and is in compliance
in all material respects, with all Laws applicable or related to it or their
respective properties or assets.

 

(b)  All Permits required for the Company’s and each of its Subsidiaries’
ownership and use of its assets are, in each case, valid and in full force and
effect. All fees and charges with respect to such Permits as of the date hereof
have been paid in full. No event has occurred that, with or without notice or
lapse of time or both, would reasonably be expected to result in the revocation,
suspension, lapse or limitation of any such Permit.

 

Section 3.12         ERISA. The Company is not (a) an “employee benefit plan”
within the meaning of Section 3(3) of ERISA that is subject to Title I of ERISA,
(b) a “plan” subject to Section 4975 of the Code, or (c) an entity the assets of
which constitute the assets of any “employee benefit plan” or “plan” described
in clauses (a) and (b) pursuant to Department of Labor Regulations § 2510.3-101,
et seq., as effectively modified by Section 3(42) of ERISA.

 

Section 3.13         Taxes.

 

(a)  The Company and each its Subsidiaries has timely filed all Tax Returns that
it was required to file. All such Tax Returns were complete and correct in all
respects. All Taxes due and owing by the Company or any of its Subsidiaries
(whether or not shown on any Tax Return) have been timely paid.

 

(b)  The Company and each of its Subsidiaries has withheld and paid each Tax
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, customer, shareholder or
other party, and complied with all information reporting and backup withholding
provisions of applicable Law.

 

(c)  No extensions or waivers of statutes of limitations have been given or
requested with respect to any Taxes of the Company or any of its Subsidiaries.

 

(d)  All deficiencies asserted, or assessments made, against the Company or any
of its Subsidiaries as a result of any examinations by any taxing authority have
been fully paid.

 

(e)  Neither the Company nor any of its Subsidiaries is not a party to any
Action by any taxing authority. There are no pending or threatened Actions by
any taxing authority.

 

Section 3.14         Compliance with NYSE Continued Listing Requirements. The
Company is in compliance with applicable continued listing requirements of the
NYSE.  There are no claims, demands, actions, causes of action, suits,
proceedings, citations, summons, or subpoenas of any nature (civil, criminal,
administrative, regulatory or otherwise, whether at law or in equity),
complaint, judgment or decree or proceedings pending or, to the Knowledge of the
Company, threatened against the Company relating to the continued listing of the
Common Stock of the Company on the NYSE and the Company has not received any
currently pending notice of the delisting of the Common Stock from the NYSE.

 

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Section 3.15         Foreign Corrupt Practices Act. Neither the Company nor any
of its Subsidiaries nor, to the Company’s Knowledge, any other person associated
with or acting on behalf of the Company or any of its Subsidiaries, including,
without limitation, any director, officer, agent, employee or Affiliate of the
Company or any of its Subsidiaries has (a) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity or to influence official action; (b) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (c) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment; or (d) violated or is in violation
of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended,
and the rules and regulations thereunder. The Company has instituted and
maintains policies and procedures designed to ensure compliance therewith.

 

Section 3.16         Warrants. The Company has provided a true and complete copy
of the Warrant Termination Agreement to Investor, and the Warrant Termination
Agreement, upon its execution, will be valid, enforceable, and in full force and
effect.

 

Section 3.17         Financial Information. The financial and factual
information prepared or furnished by the Company to the Investor relating to the
Company and set forth on Section 3.16 of the Disclosure Schedules is, to the
Knowledge of the Company and the Knowledge of Oak Circle, true, correct,
complete and accurate and the Company has not failed to disclose to the Investor
any information that could reasonably be expected to impact the Investor’s
interpretation of such financial and factual information.  The Company
acknowledges and agrees that the Investor is relying, and has relied, on the
information set forth on Section 3.16 of the Disclosure Schedules including in
connection with the Investor’s acquisition of shares of the Company’s Common
Stock from the Company and from XL Investments and its Affiliates on the date
hereof.

 

Section 3.18         Finder’s Fees. The Company is not bound by or subject to
any contract, agreement or understanding with any Person which will result in
the Investor being obligated to pay any finder’s fees, brokerage or agent’s
commissions or other like payments in connection with the negotiations leading
to this Agreement or the consummation of the transactions contemplated hereby.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF INVESTOR

 

Investor represents and warrants to the Company that the statements contained in
this ARTICLE IV are true and correct as of the date hereof.

 

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Section 4.01         Organization and Authority of Investor. Investor is a
limited liability company duly organized, validly existing and in good standing
under the Laws of the state of Delaware. Investor has all necessary limited
liability company power and authority to enter into this Agreement and the other
Transaction Documents to which Investor is a party, to carry out its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by Investor of this Agreement and any
other Transaction Document to which Investor is a party, the performance by
Investor of its obligations hereunder and thereunder and the consummation by
Investor of the transactions contemplated hereby and thereby have been duly
authorized by all requisite limited liability company action on the part of
Investor. This Agreement has been duly executed and delivered by Investor, and
(assuming due authorization, execution and delivery by the Company) this
Agreement constitutes a legal, valid and binding obligation of Investor
enforceable against Investor in accordance with its terms. When each other
Transaction Document to which Investor is or will be a party has been duly
executed and delivered by Investor (assuming due authorization, execution and
delivery by each other party thereto), such Transaction Document will constitute
a legal and binding obligation of Investor enforceable against it in accordance
with its terms.

 

Section 4.02         No Conflicts; Consents. The execution, delivery and
performance by Investor of this Agreement and the other Transaction Documents to
which it is a party, and the consummation of the transactions contemplated
hereby and thereby, do not and will not: (a) conflict with or result in a
violation or breach of, or default under, any provision of the organizational
documents of Investor; (b) conflict with or result in a violation or breach of
any provision of any Law or Governmental Order applicable to Investor; or (c)
require the consent, notice or other action by any Person under any material
contract to which Investor is a party. No consent, approval, Permit,
Governmental Order, declaration or filing with, or notice to, any Governmental
Authority is required by or with respect to Investor in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.

 

Section 4.03         Investment Purpose. Investor is acquiring the Shares solely
for its own account for investment purposes and not with a view to, or for offer
or sale in connection with, any distribution thereof. Investor acknowledges that
the Shares are not registered under the Securities Act of 1933, as amended, or
any state securities laws, and that the Shares may not be transferred or sold
except pursuant to the registration provisions of the Securities Act of 1933, as
amended or pursuant to an applicable exemption therefrom and subject to state
securities laws and regulations, as applicable.

 

Section 4.04         Accredited Investor. Investor is an “accredited investor”
as defined in Rule 501 of Regulation D promulgated under the Securities Act of
1933.

 

Section 4.05         Finder’s Fees. The Investor is not bound by or subject to
any contract, agreement or understanding with any Person which will result in
the Company being obligated to pay any finder’s fees, brokerage or agent’s
commissions or other like payments in connection with the negotiations leading
to this Agreement or the consummation of the transactions contemplated hereby.

 

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Section 4.06         Legend.  The Investor understands that the Shares shall
bear the restrictive legend set forth below immediately following this
paragraph, and that the Shares shall bear such legend until such time as the
Investor requests to the Company in writing, accompanied by a written legal
opinion from Investor's counsel reasonably acceptable to the Company, that the
legend may be removed from the Shares under the Securities Act of 1933 or
applicable state securities laws.

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY OTHER
JURISDICTIONS.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
ACT AND THE APPLICABLE SECURITIES LAWS OF OTHER STATES AND JURISDICTIONS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. 

 

ARTICLE V

 

CONDITIONS TO CLOSING

 

Section 5.01         Conditions to Obligations of Investor. The obligations of
Investor to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment or Investor’s waiver thereof, at or prior to the
Closing, of each of the following conditions:

 

(a)  This Agreement and each of the other Transaction Documents to which the
Company is or will be a party shall have been executed and delivered by the
parties thereto and true and complete copies thereof shall have been delivered
to Investor.

 

(b)  Investor shall have received a certificate of the Secretary or an Assistant
Secretary (or equivalent officer) of the Company certifying:

 

(i)  that attached thereto are true and complete copies of all resolutions and
other consents adopted by the board of directors of the Company authorizing and
approving the execution, delivery, filing and performance of this Agreement and
each of the Transaction Documents and the consummation of the transactions
contemplated hereby and thereby, and that all such resolutions and consents are
in full force and effect as of the Closing;

 

(ii)  that attached thereto are true and complete copies of the Charter and
by-laws of the Company and that such organizational documents are in full force
and effect as of the Closing; and

 

(iii)  the names and signatures of the officers of the Company authorized to
sign this Agreement, the other Transaction Documents and the other documents to
be delivered hereunder and thereunder.

 

 

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(c)  The Company shall have delivered, or caused to be delivered, to the
Transfer Agent an irrevocable instruction letter directing the Transfer Agent to
issue the Shares to the Investor, either in certificated or book-entry form, as
directed by the Investor.

 

(d)  The Company shall have delivered, or caused to be delivered, to the
Investor, the Warrant Termination Agreement, duly executed by the Company and XL
Investments.

 

Section 5.02         Conditions to Obligations of the Company. The obligations
of the Company to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment or the Company’s waiver thereof, at or prior
to the Closing, of each of the following conditions:

 

(a)  This Agreement and each of the other Transaction Documents to which the
Investor is or will be a party shall have been executed and delivered by the
parties thereto and true and complete copies thereof shall have been delivered
to the Company.

 

(b)  Investor shall have delivered to the Company cash in an amount equal to the
Purchase Price by wire transfer in immediately available funds, to an account or
accounts designated in writing by the Company to Investor.

 

ARTICLE VI

 

INDEMNIFICATION

 

Section 6.01         Indemnification of Investor. Subject to the provisions of
this Section 6.01, the Company will indemnify and hold Investor and its
Affiliates (each, an “Investor Indemnitee”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation that any such Investor Indemnitee may
suffer or incur as a result of or relating to (a) any breach of any of the
representations, warranties, or agreements made by the Company in this Agreement
or any of the other Transactions Documents or (b) any action instituted against
the Investor Indemnitee in any capacity with respect to any of the transactions
contemplated by this Agreement or any of the other Transaction Documents (unless
such action is based upon a breach of such Investor Indemnitee’s representations
or warranties under this Agreement or any conduct by such Investor Indemnitee
which constitutes fraud, gross negligence or willful misconduct).

 

Section 6.02         Payments. Once a Loss is agreed to by the Company or
finally adjudicated to be payable pursuant to this Article VI, the Company shall
satisfy its obligations within 15 Business Days of such agreement or final,
non-appealable adjudication by wire transfer of immediately available funds. The
parties hereto agree that should the Company not make full payment of any such
obligations within such 15 Business Day period, any amount payable shall accrue
interest from and including the date of agreement of the Company or final,
non-appealable adjudication to but excluding the date such payment has been made
at a rate per annum equal to 5%. Such interest shall be calculated daily on the
basis of a 365-day year and the actual number of days elapsed, without
compounding.

 

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Section 6.03         Exclusive Remedies. Subject to Section 7.11, the parties
acknowledge and agree that their sole and exclusive remedy with respect to any
and all claims (other than claims arising from fraud, criminal activity or
willful misconduct on the part of a party hereto in connection with the
transactions contemplated by this Agreement) for any breach of any
representation, warranty, agreement or obligation set forth herein or otherwise
relating to the subject matter of this Agreement, shall be pursuant to the
indemnification provisions set forth in this ARTICLE VI. In furtherance of the
foregoing, each party hereby waives, to the fullest extent permitted under Law,
any and all rights, claims and causes of action for any breach of any
representation, warranty, agreement or obligation set forth herein or otherwise
relating to the subject matter of this Agreement it may have against the other
parties hereto and their Affiliates arising under or based upon any Law, except
pursuant to the indemnification provisions set forth in this ARTICLE VI. Nothing
in this 6.03 shall limit any Person’s right to seek and obtain any equitable
relief to which any Person shall be entitled or to seek any remedy on account of
any party’s fraudulent, criminal or intentional misconduct.

 

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.01         All notices, demands or other communications provided for
or permitted hereunder shall be made in writing and shall be by registered or
certified first class mail, return receipt requested, telecopier, courier
service or personal delivery:

 

(a)if to the Company:

 

  Five Oaks Investment Corp.   540 Madison Avenue, 19th Floor   New York, NY
10022   Attention: David Oston   Fax: (212) 257-5099   Email:
doston@oakcirclecapital.com   With a copy to:       Dentons US LLP   1221 Avenue
of the Americas   New York, NY 10020-1089   Attention: Paul D. Tvetenstrand,
Esq.   Fax: (212) 768-6800   Email: paul.tvetenstrand@dentons.com

 

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(b)if to Investor:

 

  HUNT COMPANIES EQUITY HOLDINGS, LLC   230 Park Avenue   19th Floor   New York,
NY 10169   Phone: (212) 317-5731

  Attention: Mustafa Haque, Assistant General Counsel   Email:
Mustafa.Haque@huntcompanies.com         With a copy to:         Paul, Weiss,
Rifkind, Wharton & Garrison LLP   1285 Avenue of the Americas   New York, NY
10019-6064   Attention: Ross A. Fieldston, Esq.   Fax: (212) 492-0075   Email:
rfieldston@paulweiss.com

 

Section 7.02         Severability. If any term, provision, covenant or
restriction of this Agreement is determined by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any party hereto. Upon such a
determination, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner so that the transactions contemplated hereby
may be consummated as originally contemplated to the fullest extent possible.

 

Section 7.03         Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both oral and written,
between the parties with respect to such subject matter. This Agreement shall be
binding upon, and inure solely to the benefit of, each party hereto and their
respective successors and permitted assigns, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other Person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.

 

Section 7.04         Expenses. All fees and expenses incurred in connection with
this Agreement shall be paid by the party incurring such fees or expenses,
whether or not the transactions contemplated hereby are consummated.

 

Section 7.05         Public Announcements; Confidentiality. The initial press
release with respect to this Agreement and the transactions contemplated hereby
shall be mutually agreed to by the Investor and the Company. The Company and
Investor shall consult with each other before issuing, and provide each other
the opportunity to review and comment upon, any press release or other public
statements or disclosures with respect to the transactions contemplated hereby,
and shall not issue any such press release or make any such public statement or
disclosure prior to such consultation, except as may be required by applicable
Law, court process or by obligations pursuant to any listing agreement with any
national securities exchange.

 

 19 

 

 

Section 7.06         Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither party may assign its rights or
obligations hereunder without the prior written consent of the other party,
which consent shall not be unreasonably withheld or delayed. No assignment shall
relieve the assigning party of any of its obligations hereunder.

 

Section 7.07         Further Assurances. Subject to the terms and conditions of
this Agreement, each party hereto shall use its commercially reasonable efforts
to do and perform or cause to be done and performed all such further acts and
things and shall execute and deliver all such other agreements, certificates,
instruments and documents as any other party hereto reasonably may request in
order to carry out the intent and accomplish the purposes of this Agreement, the
other Transactions Documents and the consummation of the transactions
contemplated hereby or thereby.

 

Section 7.08         No Third-Party Beneficiaries. This Agreement is for the
sole benefit of the parties hereto and their respective successors and permitted
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other Person or entity any legal or equitable right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.

 

Section 7.09        Amendment and Modification; Waiver. This Agreement may only
be amended, modified or supplemented by an agreement in writing signed by each
party hereto. No waiver by any party of any of the provisions hereof shall be
effective unless explicitly set forth in writing and signed by the party so
waiving. No waiver by any party shall operate or be construed as a waiver in
respect of any failure, breach or default not expressly identified by such
written waiver, whether of a similar or different character, and whether
occurring before or after that waiver. No failure to exercise, or delay in
exercising, any right, remedy, power or privilege arising from this Agreement
shall operate or be construed as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.

 

Section 7.10         Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial.

 

(a)  This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York without giving effect to any choice or
conflict of law provision or rule (whether of the State of New York or any other
jurisdiction).

 

(b)  ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS
AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY MAY BE INSTITUTED IN THE STATE OR FEDERAL COURTS OF THE UNITED
STATES OF AMERICA, IN EACH CASE, LOCATED IN THE STATE OF NEW YORK AND EACH PARTY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH
SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER
DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE
SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH
COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE
LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND
IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

 

 20 

 

 

(c)  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER
TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION,
(B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 7.10(c).

 

Section 7.11          Specific Performance. The parties agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy to
which they are entitled at law or in equity.

 

Section 7.12         Interpretation. The headings contained in this Agreement
and in the table of contents to this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
Any terms used in any certificate or other document made or delivered pursuant
hereto but not otherwise defined therein shall have the meaning as defined in
this Agreement. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The word “will” shall be construed to have the same meaning as the
word “shall”. The words “include”, “includes” and “including” shall be deemed to
be followed by the phrase “without limitation”. The word “extent” in the phrase
“to the extent” shall mean the degree to which a subject or other thing extends,
and such phrase shall not mean simply “if”. The word “or” shall not be
exclusive. The phrase “date hereof” or “date of this Agreement” shall be deemed
to refer to January 18, 2018. Unless the context requires otherwise (i) any
definition of or reference to any Contract, instrument or other document or any
Law herein shall be construed as referring to such Contract, instrument or other
document or Law as from time to time amended, supplemented or otherwise
modified, (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof and
(iv) all references herein to Articles and Sections shall be construed to refer
to Articles and Sections of this Agreement. This Agreement shall be construed
without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted.

 

 21 

 

 

Section 7.13         Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall be deemed to be one and the same agreement. A signed copy of this
Agreement delivered by facsimile, e-mail or other means of electronic
transmission shall be deemed to have the same legal effect as delivery of an
original signed copy of this Agreement.

 

 

 22 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above by their respective officers thereunto duly
authorized.

 

    FIVE OAKS INVESTMENT CORP.           By /s/ David Carroll           Name:
David Carroll           Title: Chief Executive Officer

 

[Signature Page to Securities Purchase Agreement]

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above by their respective officers thereunto duly
authorized.

 

    HUNT COMPANIES EQUITY HOLDINGS, LLC           By: HCH HOLDINGS, LLC, its
sole member           /s/ James P. Flynn           Name:  James P. Flynn        
  Title:  President CIO

 

 2