Document:

Exhibit

	
		
	
	

	
				
	 
	 

	 
	 

	 
	 

	Dated as of April 30, 2018

	

HUNT MORTGAGE GROUP, LLC
and
FIVE OAKS INVESTMENT CORP.

	 
	MEMBERSHIP INTEREST PURCHASE AGREEMENT
	 

	
			
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TABLE OF CONTENTS
                                                                                                                                                                                             Page
ARTICLE I DEFINITIONS........................................................................................................................................................................ 2 
		
	Section 1.1
	Definitions ................................................................................................................................................................... 2

ARTICLE II SALE OF THE SELLER INTERESTS ................................................................................................................................ 4
		
	Section 2.1
	Sale of the Seller Interests ........................................................................................................................................... 4

		
	Section 2.2
	 Closing ......................................................................................................................................................................... 5

		
	Section 2.3
	 Payment of the Purchase Price .................................................................................................................................... 5

		
	Section 2.4
	 Payment of the Accrued Interest ................................................................................................................................. 5

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY ENTITIES5
		
	Section 3.1
	 Organization; Authority; Non‐Contravention; Compliance ........................................................................................ 5

		
	Section 3.2
	 Assets of the Company Entities; No Defaults or Delinquencies ................................................................................. 6

		
	Section 3.3
	 No Conflicts; Consents ................................................................................................................................................ 6

		
	Section 3.4
	 Capitalization of the Company Entities ....................................................................................................................... 6

Section 3.5 Licenses ....................................................................................................................................................................... 7
		
	Section 3.6
	 Liabilities ..................................................................................................................................................................... 7

		
	Section 3.7
	 CLO Co-Issuers ........................................................................................................................................................... 7

Section 3.8 Brokers and Finders ..................................................................................................................................................... 7
		
	Section 3.9
	 Litigation     ..................................................................................................................................................................... 7

Section 3.10 Taxes .......................................................................................................................................................................... 7
Section 3.11 No Employees ............................................................................................................................................................ 8
Section 3.12 Tax ............................................................................................................................................................................. 8
Section 3.13 Arm's Length Transaction .......................................................................................................................................... 8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER ....................................................................................... 8
		
	Section 4.1
	 Organization; Authority; Non‐Contravention; Compliance ........................................................................................ 8

		
	Section 4.2
	 No Conflicts; Consents ................................................................................................................................................ 9

		
	Section 4.3
	 Brokers and Finders ..................................................................................................................................................... 9

		
	Section 4.4
	 Arm's Length Transaction ............................................................................................................................................ 9

ARTICLE V SURVIVAL OF REPRESENTATIONS AND WARRANTIES; LIMITATION ON RECOVERIES ................................... 9
		
	Section 5.1
	 Survival ....................................................................................................................................................................... 9

Section 5.2 Limitation on Recoveries ............................................................................................................................................ 9
ARTICLE VI COVENANTS OF PURCHASER ....................................................................................................................................... 10
		
	Section 6.1
	Primary Guarantor ...................................................................................................................................................... 10

ARTICLE VII CONDITIONS TO CLOSING .......................................................................................................................................... 10
		
	Section 7.1
	Mutual Conditions ...................................................................................................................................................... 10

		
	Section 7.2
	 Conditions to Obligations of Seller ........................................................................................................................... 10

		
	Section 7.3
	 Conditions to Obligations of Purchaser ...................................................................................................................... 11

ARTICLE VIII MISCELLANEOUS ........................................................................................................................................................ 12
		
	Section 8.1
	Assignment; Binding Effect ....................................................................................................................................... 12

Section 8.2 Choice of Law ........................................................................................................................................................... 12
		
	Section 8.3
	 Consent to Jurisdiction and Service of Process; Waiver of Jury Trial and Certain Damages ................................... 12

		
	Section 8.4
	 Notices ....................................................................................................................................................................... 12

		
	Section 8.5
	 Headings .................................................................................................................................................................... 13

	
			
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	Section 8.6
	 Fees and Expenses; Transfer Taxes ............................................................................................................................ 13

		
	Section 8.7
	 Entire Agreement ....................................................................................................................................................... 14

		
	Section 8.8
	 Interpretation ............................................................................................................................................................. 14

		
	Section 8.9
	 Waiver and Amendment ............................................................................................................................................. 14

Section 8.10 Counterparts; Facsimile Signatures .......................................................................................................................... 14
Section 8.11 Third-Party Beneficiaries ......................................................................................................................................... 14
Section 8.12 Severability .............................................................................................................................................................. 14
Section 8.13 Publicity ................................................................................................................................................................... 14
Section 8.14 Tax Treatment ........................................................................................................................................................... 14
Section 8.15 Further Assurances ................................................................................................................................................... 15

	
			
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THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement"), dated as of April 30, 2018 by and between HUNT MORTGAGE GROUP, LLC, a Delaware limited liability company ("Seller"), an indirect wholly owned subsidiary of Hunt Companies, Inc., a Delaware corporation, and FIVE OAKS INVESTMENT CORP., a Maryland corporation ("Purchaser").  Each of Seller and Purchaser is a "Party" and are referred to collectively herein as the "Parties." 
RECITALS
WHEREAS, Seller is the owner of 100% of the outstanding equity interests (the "Seller Interests") in Hunt CMT Equity, LLC, a Delaware limited liability company (the "Company"), which is governed by that certain Limited Liability Company Agreement of the Company dated as of May 25, 2017 (the "LLC Agreement");
WHEREAS, the Company is the owner of all of the outstanding equity interests in and the sole trustee of Hunt Commercial Mortgage Trust, a Maryland real estate investment trust ("HCMT");
WHEREAS, as of the date hereof, HCMT owns all of the outstanding equity interests in: (i) Hunt CMT Finance, LLC, a Delaware limited liability company (the "HCMT Originator"), (ii) Hunt CRE 2017-FL1 Preferred, LLC, a Delaware limited liability company ("HCMT Preferred"), which owns all of the outstanding equity interests of Hunt CRE 2017-FL1, Ltd., a Cayman Islands corporation ("CLO Issuer"), and indirectly through CLO Issuer, Hunt CRE 2017-FL1, LLC, a Delaware limited liability company ("CLO Co-Issuer" and together with the CLO Issuer, the "CLO Co-Issuers"), which are collectively the co-issuers of certain commercial real estate collateralized loan obligations, (iii) Hunt CRE 2017-FL1 Seller, LLC, a Delaware limited liability company ("CLO Seller"), the seller of all mortgage assets to CLO Issuer, and obligor with respect to certain representations and warranties made to CLO Issuer relating to such sales and all future funding obligations related to participations acquired by CLO Issuer and (iv) Hunt CRE 2017-FL1 Advances, LLC, a Delaware limited liability company ("CLO Advances" and together with HCMT, HCMT Originator, CLO Seller, the CLO Co-Issuers and HCMT Preferred, collectively, the "Company Subsidiaries" and together with the Company, the "Company Entities"), the interest shortfall advancing agent;   
WHEREAS, solely for U.S. federal income tax purposes, each of the Company, HCMT, HCMT Originator, HCMT Preferred, CLO Seller and CLO Advances are properly classified as entities disregarded as separate from Hunt Companies, Inc.;
WHEREAS, entry into this Agreement by Purchaser and the transactions contemplated hereby have been unanimously approved by the independent directors of the board of directors of Purchaser; and
WHEREAS, Seller desires sell to Purchaser, and Purchaser agrees to purchase from  Seller, the Seller Interests, upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the representations, warranties, covenants and agreements set forth in this Agreement, and other good and valuable consideration, the adequacy and receipt of which is hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I 
 
DEFINITIONS
Section 1.1    Definitions.  For purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires, the following terms, when used in this Agreement and other documents delivered in connection herewith, have the meanings assigned to them in this Section 1.1.
"Accrued Interest" is defined in Section 2.1(b).
"Affiliate" means, with respect to any specified Person, any Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person, through one or more intermediaries or otherwise.  For the purposes of this definition, "control" (including, with correlative meaning, the terms "controlling," "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of such Person through the ownership of the voting securities, by Contract or otherwise.  
"Agreement" is defined in the Preamble.
"Asset Manager" is defined in Section 7.2(e).
"Business Day" means a day other than Saturday, Sunday or any day on which banks located in the State of New York are authorized or obligated to close.
"CLO Advances" is defined in the Recitals.

	
			
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"CLO Co-Issuer" is defined in the Recitals.
"CLO Co-Issuers" is defined in the Recitals.
"CLO Contracts" is defined in Section 3.7.
"CLO Issuer" is defined in the Recitals.
"CLO Seller" is defined in the Recitals.
"Closing" is defined in Section 2.2(a).
"Closing Date" is defined in Section 2.2(a).
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" is defined in the Recitals.
"Company Entities" is defined in the Recitals.
"Company Subsidiaries" is defined in the Recitals.
"Contract" means all contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures and all other agreements, commitments and legally binding arrangements, whether written or oral.
"Employee Benefit Plan" means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) and any other employee benefit plan, program or arrangement.
"Encumbrance" means any claim, encumbrance, pledge, security interest, lien, option, mortgage, deed of trust, hypothecation, conditional sale, or restriction (whether on voting, sale, transfer, disposition, or otherwise), whether imposed by Contract or understanding or Law, except for (i) any restrictions with respect thereto arising under the organizational documents of any entity and (ii) any restrictions on transfer generally arising under any applicable federal or state securities Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"GAAP" means United States generally accepted accounting principles as in effect from time to time, consistently applied throughout the periods presented.
"Governmental Entity" means any nation, state, territory, province, county, city or other unit or subdivision thereof or any entity, authority, agency, department, board, commission, instrumentality, court or other judicial body authorized on behalf of any of the foregoing to exercise legislative, judicial, regulatory or administrative functions and any governmental or non‐governmental self‐regulatory organization of which Seller or Purchaser or any Affiliate of any of the foregoing Persons, as applicable, is a member or to whose regulations any of the foregoing Persons is subject.
"HCMT" is defined in the Recitals.
"HCMT Originator" is defined in the Recitals.
"HCMT Preferred" is defined in the Recitals.
"Law" means any statute or law, rule, treaty or regulation and any decree, injunction, judgment, order, ruling, assessment or writ of any applicable Governmental Entity.
"License" is defined in Section 3.5.
"LLC Agreement" is defined in the Recitals.
"Organizational Documents" means (a) in the case of a Person that is a corporation, its articles or certificate of incorporation and its by-laws, regulations or similar governing instruments required by the Laws of its jurisdiction of formation or organization; (b) in the case of a Person that is a partnership, its articles or certificate of partnership, formation or association, and its partnership agreement (in each case, limited, limited liability, general or otherwise); (c) in the case of a Person that is a limited liability company, its articles or certificate of formation or organization, and its limited liability company agreement or operating agreement; and (d) in the case of a Person that is none of a corporation, partnership (limited, 

	
			
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limited liability, general or otherwise), limited liability company or natural person, its governing instruments as required or contemplated by the Laws of its jurisdiction of organization.
"Party" is defined in the Preamble.
"Person" means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, governmental agency or instrumentality or other entity of any kind.
"Proceeding" means any legal, administrative, arbitral or other claim, judgment, order, ruling, writ, verdict, settlement, injunction, action, suit, audit, investigation, examination or inquiry by or before any Governmental Entity, or any other arbitration, mediation or similar proceeding.
"Purchaser" is defined in the Preamble.
"Purchase Price" is defined in Section 2.1(b).
"Purchaser Transaction Documents" is defined in Section 4.1(b).
"Seller" is defined in the Preamble.
"Seller Interests" is defined in the Recitals.
"Seller Transaction Documents" is defined in Section 3.1(b).
"Taxes" means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, 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 or fees, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.
"Tax Returns" means any return, declaration, report, claim for refund, information return, or statement, including any schedule or attachment thereto, and including any amendment thereof.
"Transaction Documents" means, collectively, the Seller Transaction Documents and the Purchaser Transaction Documents.
ARTICLE II     
 
SALE OF THE SELLER INTERESTS
Section 2.1    Sale of the Seller Interests.  Subject to the terms and conditions of this Agreement, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller, the Seller Interests. At the Closing:
(a)    Seller shall sell, assign and transfer to Purchaser the Seller Interests, free and clear of all Encumbrances; and
(b)    Purchaser shall pay, in consideration for its purchase of the Seller Interests pursuant to Section 2.1(a) hereof, an amount equal to $68,050,066 (the "Purchase Price").  Purchaser shall also pay, in consideration for its purchase of the Seller Interests pursuant to Section 2.1(a) hereof, an amount equal to the net accrued interest held by the CLO Co-Issuers, CLO Seller and CLO Advances as of and through 11:59 p.m. EST on the date immediately prior to the Closing Date (the "Accrued Interest").
Section 2.2    Closing. 
(a)    The closing of the transfer of the Seller Interests to Purchaser as contemplated by this Agreement (the "Closing") shall be consummated on the date of this Agreement (the "Closing Date") and concurrently with the execution and delivery thereof.
(b)    Deliveries by Seller.  At the Closing, Seller shall deliver or cause to be delivered to Purchaser all documents required to be delivered by Seller on or prior to the Closing Date pursuant to this Agreement.
(c)    Deliveries by Purchaser.  At the Closing, Purchaser shall deliver to Seller (i) the Purchase Price, as provided in Section 2.3 hereof; and (ii) all documents required to be delivered by Purchaser on or prior to the Closing Date pursuant to this Agreement.
Section 2.3    Payment of the Purchase Price.  On the Closing Date, Purchaser will pay the Purchase Price to Seller by wire transfer in immediately available funds to such bank account as is designated in writing by Seller to Purchaser.

	
			
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Section 2.4    Payment of the Accrued Interest.  Within three Business Days of Purchaser's receipt of the Accrued Interest, Purchaser will pay the Accrued Interest to Seller by wire transfer in immediately available funds to such bank account as is designated in writing by Seller to Purchaser.
ARTICLE III     
 
REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY ENTITIES
Seller represents and warrants to Purchaser as of the date hereof as follows:
Section 3.1    Organization; Authority; Non‐Contravention; Compliance.
(a)    Organization.  Each Company Entity has been duly organized and is validly existing and in good standing under the Laws of the jurisdiction of its formation, and has all requisite power and authority to own its respective assets and to carry on its business as it is now being conducted.
(b)    Authority.  Seller has the requisite power and authority to enter into this Agreement and the other agreements to which it is or will be a party as contemplated by this Agreement (the "Seller Transaction Documents"), and to consummate the transactions contemplated hereby and thereby.  The execution and delivery by Seller of this Agreement and the other Seller Transaction Documents, the performance of its obligations hereunder and thereunder, and the consummation by Seller of the transactions contemplated hereby and thereby, have been duly and validly authorized by Seller, and no other proceedings or approvals on the part of Seller are necessary to authorize this Agreement or the other Seller Transaction Documents or to consummate the transactions contemplated hereby or thereby.  This Agreement and the other Seller Transaction Documents have been or will be at or prior to the Closing, duly executed and delivered by Seller and, assuming the due authorization, execution and delivery hereof by Purchaser, constitute, or will constitute at or prior to Closing, the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with their respective terms, subject to applicable Laws affecting the enforcement of creditors' rights generally or by general equitable principles (whether considered in a Proceeding at law or in equity).
(c)    Approvals.  No notice to, filing with, authorization of, exemption by, or consent or approval of, any Governmental Entity or any third party that has not been obtained or made is required to be obtained or made by Seller in connection with the execution and delivery of this Agreement and the other Seller Transaction Documents or the consummation by Seller of the transactions contemplated hereby and thereby.
Section 3.2    Assets of the Company Entities; No Defaults or Delinquencies.  As of the date hereof, the assets of the Company Entities consist of, in their entirety, those assets contained on Schedule A hereto, which Schedule is true and correct in all material respects.  Except as set forth on Schedule B hereto, no material defaults or delinquencies exist with respect to the assets of the Company Entities.        
Section 3.3    No Conflicts; Consents.  The execution, delivery and performance by Seller of this Agreement and the Seller Transaction Documents, 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 Seller or the Company Entities; (b) conflict with or result in a violation or breach of any provision of any Law applicable to Seller or the Company Entities; (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 to which Seller or the Company Entities is a party or by which Seller or the Company Entities is bound or to which any of their respective properties and assets are subject; or (d) result in the creation or imposition of any Encumbrance on any properties or assets of Seller or the Company Entities.  
Section 3.4    Capitalization of the Company Entities.  All of the outstanding equity interests of the Company Entities are validly issued, fully paid and nonassessable, have not been issued in violation of any preemptive or similar rights, and are owned by Seller, the Company or a Company Subsidiary as shown in the organizational chart attached as Schedule C hereto, free and clear of all Encumbrances.  There are no outstanding securities or indebtedness convertible into or exchangeable or exercisable for any equity interests of any Company Entity, any rights to subscribe for or to purchase, or any agreements providing for the issuance (contingent or otherwise) of any equity interests of any Company Entity.  Other than the Organizational Documents of the Company Entities, true and correct copies of which were provided or made available to the Purchaser prior to the date hereof, no Company Entity is a party to any right of first refusal, right of first offer, proxy, voting agreement, voting trust, registration rights agreement, limited liability company agreement or shareholders agreement, with respect to the sale or voting of any equity interests of any Company Entity or any securities convertible into or exchangeable or exercisable for any equity interests of any Company Entity.
Section 3.5    Licenses.  Except as set forth on Schedule D hereto, each Company Entity has obtained and currently possesses, and is in compliance in all material respects with, all licenses, or other authorizations of any Governmental Entity necessary to carry on its business in all material respects as currently conducted (the "Licenses").  
Section 3.6    Liabilities.  Except for liabilities of the Company Subsidiaries incurred in connection with the issuance of commercial real estate obligations and/or related acquisitions of mortgage assets in accordance with applicable transaction documents, the Company and the Company Subsidiaries do not have any material liabilities required to be disclosed on a consolidated balance sheet in accordance with GAAP.
Section 3.7    CLO Co-Issuers.  Attached as Schedule E hereto is a complete list of all of the Contracts to which the CLO Co-Issuers are a party that govern the commercial real estate collateralized loan obligations of either or both of the CLO Co-Issuers (the "CLO Contracts"). Each 

	
			
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CLO Co-Issuer has performed its obligations under the CLO Contracts to which it is a party in all material respects and is in material compliance with all applicable Laws. The CLO Co-Issuers have not received, prior to the date hereof, any written notice from any Person claiming the CLO Co-Issuers are in breach of or have violated any of the CLO Contracts.  True and correct copies of the CLO Contracts have been provided or made available to Purchaser prior to the date hereof.  
Section 3.8    Brokers and Finders.  Seller has not entered into any agreement or arrangement entitling any agent, broker, investment banker, financial advisor or other Person to any broker's or finder's fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement.
Section 3.9    Litigation.  There are no Proceedings pending or, to Seller's knowledge, threatened against any of the Company Entities, or their respective assets, properties and businesses, at law or in equity, and the Company Entities are not subject to any outstanding judgment, order, injunction, ruling, arbitration award or decree of any court or other Governmental Entity.  There are no settlement or similar agreements with, and judgments, decrees, injunctions or orders of, any Governmental Entity to which the Company Entities or their respective assets, properties and businesses are bound.
Section 3.10    Taxes.  All material Tax Returns required to have been filed by the Company Entities have been filed (taking into account extensions), and all such Tax Returns were correct and complete in all material respects. All material Taxes shown to be due on such Tax Returns have been paid or will be paid by the due date thereof. There is no action, suit, proceeding, investigation, audit or claim pending or threatened in writing with respect to any material Taxes of the Company Entities. Each of the Company Entities has complied with all applicable Laws relating to the payment and withholding of material Taxes and has duly and timely withheld and paid over to the appropriate taxing authorities all material amounts required to be so withheld and paid over.
Section 3.11    No Employees.  The Company Entities do not have and have not had any employees and have not maintained and do not maintain any Employee Benefit Plan. The Company Entities have not had and do not have any liability to fund any Employee Benefit Plan.
Section 3.12    Tax.  Solely for U.S. federal income tax purposes, each of the Company, HCMT, HCMT Originator, HCMT Preferred, CLO Seller and CLO Advances are properly classified as entities disregarded as separate from Hunt Companies, Inc. 
Section 3.13    Arm's Length Transaction.  The Purchase Price for the Seller Interests was negotiated in an arm's length commercial transaction.  Seller further acknowledges that it has provided complete access to all information concerning the Company Entities that the Purchaser has requested in order for Purchaser to make, in its determination, an informed decision to enter into this Agreement and consummate the transactions contemplated hereby.
ARTICLE IV     
 
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as of the date hereof as follows:
Section 4.1    Organization; Authority; Non‐Contravention; Compliance.
(a)    Organization.  Purchaser is a corporation duly organized, validly existing and in good standing under the Laws of the State of Maryland.
(b)    Authority.  Purchaser has full corporate power and authority to enter into this Agreement and the other agreements to which it is or will be a party as contemplated by this Agreement (the "Purchaser Transaction Documents"), and to consummate the transactions contemplated hereby and thereby.  The execution and delivery by Purchaser of this Agreement and the other Purchaser Transaction Documents, the performance of its obligations hereunder and thereunder, and the consummation by Purchaser of the transactions contemplated hereby and thereby, have been duly and validly authorized by all requisite corporate action on the part of Purchaser, and no other proceedings or approvals on the part of Purchaser are necessary to authorize this Agreement or the other Purchaser Transaction Documents or to consummate the transactions contemplated hereby or thereby.  This Agreement and the other Purchaser Transaction Documents have been or will be at or prior to the Closing, duly executed and delivered by Purchaser and, assuming the due authorization, execution and delivery hereof by Seller, constitute, or will constitute at or prior to Closing, the legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with their respective terms, subject to applicable Laws affecting the enforcement of creditors' rights generally or by general equitable principles (whether considered in a Proceeding at law or in equity).
(c)    Approvals.  No notice to, filing with, authorization of, exemption by, or consent or approval of, any Governmental Entity or any third party that has not been obtained or made is required to be obtained or made by Purchaser in connection with the execution and delivery of this Agreement and the other Purchaser Transaction Documents or the consummation by Purchaser of the transactions contemplated hereby and thereby.
Section 4.2    No Conflicts; Consents.  The execution, delivery and performance by Purchaser of this Agreement and the Purchaser 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 Purchaser; (b) conflict with or 

	
			
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result in a violation or breach of any provision of any Law applicable to Purchaser; or (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 to which Purchaser is a party or by which Purchaser is bound or to which any of its properties and assets are subject.
Section 4.3    Brokers and Finders.  Purchaser has not entered into any agreement or arrangement entitling any agent, broker, investment banker, financial advisor or other Person to any broker's or finder's fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement.
Section 4.4    Arm's Length Transaction.  The Purchase Price for the Seller Interests was negotiated in an arm's length commercial transaction and Purchaser obtained an independent third-party valuation of the Seller Interests in connection with the transaction contemplated by this Agreement.  Purchaser further acknowledges that it has had complete access to all information concerning the Company Entities necessary to conduct any investigation that Purchaser (acting through its board of directors, including the unanimous action of the independent directors of Purchaser's board of directors) deemed necessary in order to make an informed decision to enter into this Agreement and consummate the transactions contemplated hereby.
ARTICLE V     
 
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; LIMITATION ON RECOVERIES
Section 5.1    Survival.  The representations and warranties contained in this Agreement are the only representations and warranties being made by each Party, and no other representations or warranties, express or implied, are being made or may be relied upon by either Party in connection with this Agreement or the consummation of the transactions contemplated hereby.  The representations and warranties of Seller contained in this Agreement shall survive the Closing for a period of one year.
Section 5.2    Limitation on Recoveries.  In connection with any breach or breaches by Seller of the representations, warranties or covenants contained in this Agreement, in no event shall (i) Seller or any of Affiliates be liable for any special, exemplary, punitive or consequential damages and (ii) the aggregate amount payable by Seller or any of its Affiliates for any such claims exceed $3,402,503.
ARTICLE VI     
 
COVENANTS OF PURCHASER
Section 6.1    Primary Guarantor.  Purchaser shall, at the direction of Seller, use commercially reasonable efforts to substitute itself or an Affiliate thereof as the primary guarantor in place of Seller and relieve Seller of any and all obligations related to: (a) the indemnification obligations of Seller under the CLO Contracts, and any Contracts entered into after the date hereof, relating to obligations of CLO Seller to make future advances; and (b) the guaranty and indemnification obligations of Seller under the CLO Contracts, and any Contracts entered into after the date hereof, relating to mortgage asset purchases by CLO Issuer from CLO Seller.  Seller agrees to give Purchaser prompt written notice of any Contracts entered into after the date hereof relating to (a) and/or (b) above.  
ARTICLE VII     
 
CONDITIONS TO CLOSING
Section 7.1    Mutual Conditions.  The obligations of each of the Parties to effect the Closing shall be subject to the satisfaction (or waiver, in whole or in part, to the extent permitted by applicable Law, by each of the Parties jointly) on and as of the Closing Date of each of the following conditions:
(a)    all authorizations, consents, orders, declarations or approvals of, or filings with, or terminations or expirations of waiting periods imposed by any Law or Governmental Entity, necessary or required in order for the consummation of any of the transactions contemplated by this Agreement and which, if not obtained, made or occurring, would make any of the transactions contemplated hereby illegal, shall have been obtained, made or occurred;
(b)    in addition to the approvals specified above, any other required or necessary third party approvals in connection with the consummation of the transactions contemplated herein (including any necessary approvals from the Company) shall have been obtained and shall be in full force and effect; and
(c)    there shall not be in force any decree, injunction, judgment, order, ruling, assessment or writ of any applicable Governmental Entity, or any statute, rule or regulation issued or threatened by any applicable Governmental Entity, or any other action, Proceeding or litigation, in each case restraining, enjoining, prohibiting or materially delaying (or seeking to restrain, enjoin, prohibit or materially delay) the consummation of the transactions contemplated by this Agreement or the Transaction Documents.
Section 7.2    Conditions to Obligations of Seller.  The obligations of Seller to effect the Closing shall be subject to the satisfaction (or waiver, in whole or in part, to the extent permitted by applicable Law, by Seller) on and as of the Closing Date of each of the following conditions:

	
			
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(a)    The representations and warranties of Purchaser shall be true and correct as of the Closing Date; 
(b)    Purchaser shall have delivered the Purchase Price, and all other documents required to be delivered by Purchaser at or prior to the Closing under the terms of this Agreement;
(c)    Purchaser shall have delivered or caused to be delivered to Seller the Indemnification and Reimbursement Agreements, dated as of the date hereof, executed by Purchaser in favor of Seller; 
(d)    Purchaser shall have delivered or caused to be delivered to Seller an Amendment to the Asset Management Agreement, dated as of the date hereof, between Hunt Investment Management, LLC, a Delaware limited liability company ("Asset Manager"), and Purchaser, in substantially the form attached hereto as Exhibit A; and 
(e)    Purchaser shall have delivered or caused to be delivered to Seller a certificate of the Secretary or Assistant Secretary, as of the Closing Date, of Purchaser certifying (i) the Organizational Documents, (ii) good standing under the Laws of the jurisdiction of its formation, (iii) the minutes of the meeting of the independent directors of the board of directors, (iv) the minutes of the meeting of the full board of directors and (v) the names and signatures of the officers authorized to sign this Agreement and any other documents required to be delivered under the terms of this Agreement.
Section 7.3    Conditions to Obligations of Purchaser.  The obligations of Purchaser to effect the Closing shall be subject to the satisfaction (or waiver, in whole or in part, to the extent permitted by applicable Law, by Purchaser) on and as of the Closing Date of each of the following conditions:
(a)    The representations and warranties of Seller shall be true and correct as of the Closing Date in all material respects; 
(b)    Seller shall have delivered or caused to be delivered all documents required to be delivered by Seller at or prior to the Closing under the terms of this Agreement;
(c)    Seller has arranged to be delivered to Purchaser the tax advice of Clifford Chance US LLP, counsel for Seller, addressing a modification to the tax guidelines utilized by Asset Manager in substantially the form attached hereto as Exhibit B;
(d)    Seller shall have delivered or caused to be delivered to Purchaser an Amendment to the Asset Management Agreement, dated as of the date hereof, between Asset Manager and Purchaser, in substantially the form attached hereto as Exhibit A; and
(e)    Seller shall have delivered or caused to be delivered to Purchaser a certificate of the Secretary or Assistant Secretary, as of the Closing Date, of each of Seller, CLO Issuer and Asset Manager certifying (i) the Organizational Documents, (ii) good standing under the Laws of the jurisdiction of its formation, (iii) the consent, resolution or minutes of the members, shareholders, board of trustees or board of directors, as applicable, and (iv) the names and signatures of the officers authorized to sign this Agreement and any other documents required to be delivered under the terms of this Agreement.       
ARTICLE VIII     
 
MISCELLANEOUS
Section 8.1    Assignment; Binding Effect.  This Agreement and the rights hereunder are not assignable by either Party unless such assignment is consented to in writing by the other Party.  Subject to the preceding sentence, this Agreement and all the provisions hereof shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns.
Section 8.2    Choice of Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF (OTHER THAN SECTION 5‐1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
Section 8.3    Consent to Jurisdiction and Service of Process; Waiver of Jury Trial and Certain Damages.  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE PARTIES ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK, COUNTY OF NEW YORK.  BY EXECUTING AND DELIVERING THIS AGREEMENT, THE PARTIES IRREVOCABLY (I) ACCEPT GENERALLY AND UNCONDITIONALLY THE EXCLUSIVE JURISDICTION AND VENUE OF THESE COURTS, (II) WAIVE ANY OBJECTIONS WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (I) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (III) AGREE THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH PARTY AT THEIR RESPECTIVE ADDRESSES PROVIDED IN ACCORDANCE WITH SECTION 8.4, AND (IV) AGREE THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE 

	
			
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CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.  THE PARTIES IRREVOCABLY WAIVE, AND AGREE TO CAUSE THEIR SUBSIDIARIES TO WAIVE, THE RIGHT TO TRIAL BY JURY IN ANY ACTION TO ENFORCE OR INTERPRET THE PROVISIONS OF THIS AGREEMENT.
Section 8.4    Notices.  All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, when sent by email, when sent by overnight courier service or when mailed by certified or registered mail, return receipt requested, with postage prepaid to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):
If to Seller:
Hunt Mortgage Group, LLC 
230 Park Avenue, 19th Floor 
New York, New York 10169 
Attention: Michael Larsen and Mustafa Haque
Email:    michael.larsen@huntcompanies.com 
    mustafa.haque@huntcompanies.com 
    
With copies to:
Clifford Chance US LLP 
31 West 52nd Street 
New York, New York 10019 
Attention: Steven Kolyer, Esq., Jay Bernstein, Esq. and Mike Kessler, Esq. 
Email:    steven.kolyer@cliffordchance.com 
    jay.bernstein@cliffordchance.com 
    mike.kessler@cliffordchance.com
If to Purchaser:
Five Oaks Investment Corp.
c/o Hunt Investment Management, LLC
230 Park Avenue, 19th Floor
New York, New York 10169
Attention: Lead Independent Director

With copies to:
Dentons US LLP
1221 Avenue of the Americas
New York, New York 10020
Attention: Paul Tvetenstrand
Email: paul.tvetenstrand@dentons.com
Section 8.5    Headings.  The headings contained in this Agreement are inserted for convenience only and shall not be considered in interpreting or construing any of the provisions contained in this Agreement.
Section 8.6    Fees and Expenses; Transfer Taxes.  Except as otherwise agreed by the Parties, each Party will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.  Any sales, use, stock transfer, real property transfer, real property gains, transfer, stamp, registration, documentary, recording or similar taxes together with any interest thereon, penalties, fines, fees, additions to tax or additional amounts with respect thereto arising out of the transactions contemplated hereby shall be borne equally by both Parties (and Purchaser shall prepare and file all necessary documentation and tax returns with respect to such taxes).
Section 8.7    Entire Agreement.  This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings between the Parties with respect to such subject matter.
Section 8.8    Interpretation.  Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The word "Agreement" shall mean this Agreement as amended or supplemented.  The titles and headings herein are for reference purposes only and shall not in any manner limit the construction of this Agreement which shall be considered as a whole.  The word "Dollar" and the symbol "$" mean United States Dollars.  A reference to any legislation or to any provision of any legislation shall include any amendment to, any modification or re‐enactment thereof, any legislative provision substituted therefor and all regulations and statutory instruments issued thereunder or pursuant thereto.

	
			
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Section 8.9    Waiver and Amendment.  Any provisions of this Agreement may be waived in writing at any time by a Party, and any of the provisions of this Agreement may be amended at any time by the mutual written agreement of the Parties.  No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law.
Section 8.10    Counterparts; Facsimile Signatures.  This Agreement may be executed in any number of counterparts, each of which when executed, shall be deemed to be an original and all of which together will be deemed to be one and the same instrument binding upon all of the Parties notwithstanding the fact that all Parties are not signatory to the original or the same counterpart.  For purposes of this Agreement email signatures shall be deemed originals.
Section 8.11    Third-Party Beneficiaries.  Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any Person, other than the Parties, any right or remedies under or by reason of this Agreement.
Section 8.12    Severability.  If any provision of this Agreement or the application of any such provision to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof.
Section 8.13    Publicity.  Unless otherwise required by applicable Law or national securities exchange on which the securities of any of the Parties are listed or designated, no public announcement of, or any other statement or communication of any kind or nature regarding, this transaction shall be made without the express written mutual consent of the Parties.
Section 8.14    Tax Treatment.  The Parties agree to treat, for U.S. federal income tax purposes, the transactions described in Section 2.1: (a) as a taxable sale by Hunt Companies, Inc. of all of the assets of the HCMT Originator, HCMT Preferred, CLO Seller and CLO Advances, including the equity and Class E Notes issued by CLO Issuer; and (b) immediately thereafter, a tax-deferred liquidation of CLO Issuer under Section 332 of the Code, resulting in CLO Issuer becoming a "qualified REIT subsidiary" of Purchaser within the meaning of Section 856(i) of the Code.
Section 8.15    Further Assurances.  Each Party shall, from time to time, at the request of the other Party and without further consideration, execute and deliver further instruments and take such other actions as the requesting Party may reasonably require to effectuate the transactions as contemplated by the Transaction Documents and otherwise satisfy the obligations of the Parties hereunder.
[Remainder of Page Intentionally Left Blank]

	
			
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written.
SELLER:
HUNT MORTGAGE GROUP, LLC, 
a Delaware limited liability company
		
	By:
	/s/ Michael Larsen     
Name: Michael Larsen
Title: Chief Financial Officer

PURCHASER:
FIVE OAKS INVESTMENT CORP., 
a Maryland corporation
		
	By:
	/s/ James P. Flynn     
Name:  James P. Flynn
Title: Chief Executive Officer

[Signature Page to Membership Interest Purchase Agreement]

EXHIBIT A

Exhibit A

EXHIBIT B

Exhibit B

SCHEDULE A

Schedule A

SCHEDULE B

Schedule B

SCHEDULE C

Schedule C

SCHEDULE D

Schedule D

SCHEDULE E

Schedule EExhibit

Exhibit 4.1

THIS SECURITY (AS DEFINED HEREIN) IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS A NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC” OR “THE DEPOSITORY”). THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES HEREINAFTER DESCRIBED. UNLESS AND UNTIL THIS SECURITY IS SO EXCHANGED, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR TO DTC OR A NOMINEE OF SUCH SUCCESSOR TO DTC. 
NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS GLOBAL SECURITY SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON EXCEPT PURSUANT TO THE PROVISIONS HEREOF. 
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY (AS DEFINED HEREIN) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE TO BE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY AMOUNT PAYABLE THEREUNDER IS MADE PAYABLE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
No. 1 
$350,000,000 
CUSIP No.: 427866 AY4
ISIN: US427866AY40
THE HERSHEY COMPANY 
$350,000,000 2.900% NOTE DUE MAY 15, 2020 
The Hershey Company, a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor corporation), for value received, hereby promises to pay to Cede & Co., as a nominee of The Depository Trust Company, or its registered assigns, the principal sum of THREE HUNDRED FIFTY MILLION Dollars ($350,000,000) on May 15, 2020 and to pay interest thereon semi-annually in arrears on May 15 and November 15 (the “Interest Payment Dates”) in each year, commencing November 15, 2018, at the rate of 2.900% per annum until the principal hereof is paid or made available for payment. Interest on this Security shall be computed on the basis of a 360-day year comprised of twelve 30-day months. Notwithstanding the foregoing, this Security shall bear interest from the most recent Interest Payment Date to which interest in respect hereof has been paid or duly provided for, unless (i) the date hereof is such an Interest Payment Date, in which case from the date hereof, provided, however, that if the Company shall default in the payment of interest due on the date hereof, then this Security shall bear interest from the next preceding Interest Payment Date to which interest has been paid or, if no interest has been paid on this Security, from May 10, 2018, or (ii) no interest has been paid on this Security, in which case from May 10, 2018. Notwithstanding the foregoing, if the date hereof is after May 1 or November 1 (whether or not a Business Day) (the “Record Date”), as the case may be, next preceding an Interest Payment Date and before such Interest Payment Date, this Security shall bear interest from such Interest Payment Date, which interest shall be payable on the next succeeding Interest Payment Date; provided, however, that if the Company shall default in the payment of interest due on such Interest Payment Date, then this Security shall bear interest from the next preceding Interest Payment Date to which interest has been paid or, if no interest has been paid on this Security, from May 10, 2018. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, subject to certain exceptions provided in the Indenture referred to on the reverse hereof, be paid to the Person in whose name this Security is registered at the close of business on the Record Date next preceding such Interest Payment Date. 

    

Payment of the principal of and any such interest on this Security will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth on the face hereof. 
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 

[Signature page follows.]

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 
Dated: May 10, 2018 
 
	
					
	 
	 
	 
	 
	 

	THE HERSHEY COMPANY

	 
	 
	 

	 
	 
	By:
	 
	   

	 
	 
	Name: Patricia A. Little

	 
	 
	Title:   Senior Vice President,
            Chief Financial Officer

	 
	 
	 

	 
	 
	By:
	 
	 

	 
	 
	Name: Bjork Hupfeld

	 
	 
	Title:   Treasurer

[Signature Page to Note]

TRUSTEE’S CERTIFICATE OF AUTHENTICATION 
This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture. 
Dated: May 10, 2018
 
	
			
	 
	 
	 

	U.S. BANK NATIONAL ASSOCIATION,

	 
	 
	as Trustee

	 
	 

	By:
	 
	 

	 
	 
	Authorized Signatory

 [REVERSE OF NOTE] 
THE HERSHEY COMPANY 
This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of May 14, 2009 (herein called the “Indenture”), between the Company and U.S. Bank National Association, as Trustee (herein called the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Company, the Trustee and the holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof limited (except as provided in the Indenture) in aggregate principal amount to $350,000,000. The separate series of Securities may be issued in various aggregate principal amounts, may mature at different times, may bear interest, if any, at different rates, may be subject to different redemption provisions (if any), may be subject to different sinking funds (if any), may be subject to different covenants and Events of Default (as defined in the Indenture) and may otherwise vary as in the Indenture provided. The Indenture further provides that the Securities of a single series may be issued at various times, with different maturity dates and may bear interest at different rates. 
If an Event of Default with respect to Securities of this series shall occur and be continuing, then the Trustee or the holders of not less than 25% in aggregate principal amount of the Securities of this series then Outstanding may declare the principal of the Securities of this series and accrued interest thereon, if any, to be due and payable in the manner and with the effect provided in the Indenture. 
The Indenture permits, with certain exceptions as therein provided, the amendment or supplementing thereof and the modification of the rights and obligations of the Company and the rights of the holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the holders of not less than a majority in aggregate principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults or Events of Default under the Indenture and the consequences of any such defaults or Events of Default. Any such consent or waiver (unless revoked as provided in the Indenture) shall be conclusive and binding upon the holder and upon all future holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. 
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest, if any, on this Security at the times, place and rate, if any, and in the coin or currency, herein prescribed. 

This Security shall be exchangeable for Securities registered in the names of Persons other than the Depository with respect to such series or its nominee only as provided in this paragraph. This Security shall be so exchangeable if (x) the Depository notifies the Company that it is unwilling or unable to continue as Depository for such series or at any time ceases to be a clearing agency registered as such under the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”) (y) the Company executes and delivers to the Trustee an Officers’ Certificate providing that this Security shall be so exchangeable or (z) there shall have occurred and be continuing an Event of Default with respect to the Securities of such series. Securities so issued in exchange for this Security shall be of the same series, having the same interest rate, if any, and maturity and having the same terms as this Security, in authorized denominations and in the aggregate having the same principal amount as this Security and registered in such names as the Depository for such Global Security shall direct. 
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of a Security of the series of which this Security is a part is registrable in the Security register, upon due presentment of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and interest, if any, on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security registrar, duly executed by the holder hereof or his attorney duly 

authorized in writing, and thereupon one or more new Securities of this series, having the same interest rate, if any, and maturity and having the same terms as this Security, of any authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
The Securities of the series of which this Security is a part are issuable only in registered form without coupons in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series of a different authorized denomination having the same interest rate, if any, and maturity and having the same terms as such Securities, as requested by the holder surrendering the same. 
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue and notwithstanding any notation of ownership or other writing hereon, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 
No recourse for the payment of the principal of or interest, if any, on this Security, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any indenture supplemental thereto or in any Security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, official or director, as such, past, present or future, of the Company or of any successor entity, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released; provided, that nothing contained herein or in the Indenture shall be taken to prevent recourse to and the enforcement of the liability, if any, of any stockholder or subscriber to capital stock upon or in respect of shares of capital stock not fully paid. 
Optional Redemption
The Securities shall be redeemable at the option of the Company at any time and from time to time (a “Redemption Date”), in whole or in part, at a redemption price (the “Redemption Price”) equal to the sum of (i) the principal amount of the Securities being redeemed plus accrued and unpaid interest, if any, up to but excluding the Redemption Date and (ii) the Make Whole Amount (as defined below), if any. 
If the Company has given notice as provided in the Indenture and funds for the redemption of the Securities called for redemption have been made available on the Redemption Date, such Securities shall cease to bear interest on the Redemption Date. Thereafter, the only right of the holders of the Securities shall be to receive payment of the Redemption Price. 
The Company shall give notice of any optional redemption to holders of the Security at their addresses, as shown in the security register for the Securities, not more than 45 nor less than 30 days prior to the Redemption Date. The notice of redemption shall specify, among other items, the Redemption Price and the principal amount of the Securities held by such holder to be redeemed. 
If less than all of the Securities are to be redeemed, the Company shall give the Trustee at least 60 days’ prior notice of the Redemption Date and of the aggregate principal amount of the Securities to be redeemed, and the Trustee shall select the Securities or portions of Securities to be redeemed either pro rata or by such method as the Trustee shall deem fair and appropriate; provided that if, at the time of redemption, such Securities are registered as Global Securities, the Depository shall determine, in accordance with its procedures, the principal amount of such Securities held by each owner of beneficial interests in Global Securities to be redeemed. The Trustee may select for redemption Securities and portions of Securities in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. 

“Make-Whole Amount” means the present value, on the Redemption Date, of the principal being redeemed or paid and the amount of interest (exclusive of interest accrued to the Redemption Date or accelerated payment) that would have been payable if such redemption had not been made. The present value shall be determined by discounting, on a semiannual basis, such principal and interest at the Reinvestment Rate (as defined below and as determined on the third Business Day preceding the date such notice of redemption is given or declaration of acceleration is made) from the respective dates on which such principal and interest would have been payable if such redemption or accelerated payment had not been made. 
“Reinvestment Rate” for the Securities means 0.100%, plus the arithmetic mean of the yields under the respective heading “Week Ending” published in the most recent Statistical Release (as defined below) under the caption “Treasury Constant Maturities” for the maturity (rounded to the nearest month) corresponding to the remaining life to maturity, as of the payment date of the principal being redeemed or paid. If no maturity exactly corresponds to such maturity, yields for the two published maturities most closely corresponding to such maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For the purpose of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used. 
“Statistical Release” means the statistical release designated “H.15(519)” or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded United States government securities adjusted to constant maturities, or, if such statistical release is not published at the time of any determination under the Indenture, then such other reasonably comparable index which shall be designated in good faith by the Company. 
Change of Control Offer
If a Change of Control Triggering Event (defined below) occurs, unless the Company has exercised its option to redeem the Securities as provided for herein, the Company shall be required to make an offer (a “Change of Control Offer”) to each holder of the Securities to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that holder’s Securities on the terms set forth herein. In a Change of Control Offer, the Company shall be required to offer payment in cash equal to 101% of the aggregate principal amount of Securities repurchased, plus accrued and unpaid interest, if any, on the Securities repurchased to the date of repurchase (a “Change of Control Payment”). 
Within 30 days following any Change of Control Triggering Event or, at the Company’s option, prior to any Change of Control (defined below), but after public announcement of the transaction that constitutes or may constitute the Change of Control, the Company shall mail or cause to be mailed to holders of the Securities a notice describing the transaction that constitutes or may constitute the Change of Control Triggering Event and offering to repurchase such Securities on the date specified in the notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (a “Change of Control Payment Date”). The notice shall, if mailed prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date. 

In order to accept any Change of Control Offer, a holder shall be required to comply with instructions for tendering contained in the Company’s notice of such Change of Control Offer as well as the applicable procedures of the Depositary. 
On the Change of Control Payment Date, the Company shall, to the extent lawful: (i) accept for payment all Securities or portions of such Securities properly tendered pursuant to the Change of Control Offer; (ii) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Securities or portions of such Securities properly tendered; and (iii) deliver or cause to be delivered to the Trustee the Securities properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Securities or portions of such Securities being repurchased. 

On the Change of Control Payment Date, the Paying Agent shall pay, from funds deposited by the Company for such purpose, to each holder of Securities properly tendered the Change of Control Payment for such Securities, and the Trustee will authenticate and mail (or cause to be transferred by book-entry) to each holder a new Security equal in principal amount to any unpurchased portion of such holder’s Securities surrendered. 
The Company shall not be required to make a Change of Control Offer upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and the third party purchases all Securities properly tendered and not withdrawn under its offer. In addition, the Company shall not repurchase any Securities if there has occurred and is continuing on the Change of Control Payment Date an Event of Default under the Indenture, other than a default in the payment of the Change of Control Payment upon a Change of Control Triggering Event. 
To the extent that the requirements of Rule 14e-1 under the Securities Exchange Act or any other securities laws or regulations thereunder that are applicable in connection with the repurchase of the Securities conflict with the Change of Control Offer provisions hereof, the Company shall comply with those securities laws and regulations and shall not be deemed to have breached its obligations under the Change of Control Offer provisions of the Securities by virtue of any such conflict. 
For purposes of the Change of Control Offer, the following have the meanings ascribed to them as set forth below: 
“Change of Control” means the occurrence of any of the following: (1) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and the assets of its subsidiaries, taken as a whole, to any Person (defined below), other than to the Company, one of its subsidiaries or the Milton Hershey School Trust (defined below); (2) the consummation of any transaction or series of related transactions (including, without limitation, any merger or consolidation) the result of which is that any Person, other than the Milton Hershey School Trust, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act), directly or indirectly, of more than 50% of the Company’s outstanding Voting Stock (defined below) or other Voting Stock into which the Company’s Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares; (3) the Company consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, the Company, in any such event pursuant to a transaction in which any of the Company’s outstanding Voting Stock or the Voting Stock of such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction where the shares of the Company’s Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock (measured by voting power rather than number of shares) of the surviving Person or any direct or indirect parent company of the surviving Person immediately after giving effect to such transaction; (4) the adoption of a plan relating to the Company’s liquidation or dissolution; or (5) the consummation of a so-called “going private/Rule 13e-3 transaction” that results in any of the effects described in paragraph (a)(3)(ii) of Rule 13e-3 under the Securities Exchange Act (or any successor provision), following which the Milton Hershey School Trust beneficially owns, directly or indirectly, more than 50% of the Company’s Voting Stock, measured by voting power rather than number of shares. 
Notwithstanding the foregoing, a transaction effected to create a holding company will not be deemed to involve a Change of Control if (i) the Company becomes a direct or indirect wholly-owned subsidiary of such holding company and (ii) the holders of the Voting Stock of such holding company immediately following that transaction, as measured by voting power rather than number of shares, are substantially similar to the holders of the Company’s Voting Stock, as measured by voting power rather than number of shares, immediately prior to such a transaction. 
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Rating Event (defined below). 
“Investment Grade Rating” means a rating of Baa3 or higher by Moody’s (as defined below) (or its equivalent under any successor rating category of Moody’s) and BBB- or higher by S&P (defined below) (or its equivalent under any successor rating category of S&P), and the equivalent investment grade credit rating from any replacement Rating Agency (as defined below) selected by the Company. 

“Milton Hershey School Trust” means either or both of (1) Hershey Trust Company, a Pennsylvania corporation, as trustee for the trust established by Milton S. Hershey and Catherine S. Hershey for the benefit of Milton Hershey School, or any successor trustee, and (2) Milton Hershey School, a Pennsylvania not-for-profit corporation. 
“Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its successors. 
“Person” has the meaning used in Section 13(d) of the Securities Exchange Act. 
“Rating Agencies” means each of Moody’s and S&P; provided that if either of Moody’s or S&P ceases to rate the Securities or fails to make a rating of the Securities publicly available for reasons outside of the Company’s control, the Company may appoint (as certified by a resolution of its Board of Directors) a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Securities Exchange Act as replacement for such Rating Agency, or all of them, as the case may be. 

“Rating Event” means the rating on the Securities is lowered by any Rating Agency and the Securities are rated below an Investment Grade Rating by both Rating Agencies on any day during the period (which period will be extended so long as the rating of the Securities is under publicly announced consideration for a possible downgrade by any Rating Agency) commencing on the first public notice or announcement of an arrangement that could result in a Change of Control and ending on the 60th day following the occurrence of such Change of Control; provided, that a Rating Event shall not be deemed to have occurred in respect of a particular Change of Control (and, thus, shall not be deemed a Rating Event) if the Rating Agencies lowering the rating on the Securities to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at its request that the lowering was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control. 
“S&P” means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc., and its successors. 
“Voting Stock” means, with respect to any Person as of any date, the capital stock of such Person that is at the time entitled to vote in the election of the board of directors of such Person. 
General
All terms used in this Security and not otherwise defined herein which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 
This Security shall be governed by and construed in accordance with the laws of the State of New York.

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