Document:

Exhibit 10.19

 

ASSET PURCHASE
AGREEMENT

 

by
and between

 

FIRST
SOUTH BANK

 

and

 

EMERALD
PORTFOLIO, LLC

 

Dated
As Of February 20, 2013

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	ARTICLE 1 DEFINITIONS	1
	 	 	 
	Section 1.1	Definitions.	1
	Section 1.2	Terms Generally.	9
	Section 1.3	Incorporation by Reference.	9
	 	 	 
	ARTICLE 2 PURCHASE
    AND SALE OF THE LOANS AND REAL ESTATE OWNED	9
	 	 	 
	Section 2.1	Agreement to Sell and Purchase the Loans and REO;
    Excluded Assets.	9
	Section 2.2	Excluded Assets and Seller Retained Liabilities.	11
	Section 2.3	Release and Transfer of Servicing.	12
	Section 2.4	Servicing Agreement.	12
	Section 2.5	Escrow.	13
	Section 2.6	Expenses.	13
	Section 2.7	Transfer Taxes and Title Costs.	14
	 	 	 
	ARTICLE 3 REPRESENTATIONS
    AND WARRANTIES	14
	 	 	 
	Section 3.1	Organization.	14
	Section 3.2	Authorization of Agreement.	15
	Section 3.3	Conflicts; Consents of Third Parties.	15
	Section 3.4	Litigation.	15
	Section 3.5	Financial Advisors.	15
	Section 3.6	Loans.	16
	Section 3.7	Real Estate Owned	19
	 	 	 
	ARTICLE 4 REPRESENTATIONS
    AND WARRANTIES OF BUYER	21
	 	 	 
	Section 4.1	Organization.	22
	Section 4.2	Authorization of Agreement.	22
	Section 4.3	Conflicts; Consents of Third Parties.	22
	Section 4.4	Litigation.	22
	Section 4.5	Financial Advisors.	23
	Section 4.6	No Other Representations.	23
	 	 	 
	ARTICLE 5 CLOSING OF
    PURCHASE OF LOANS	23
	 	 	 
	Section 5.1	Payment of Estimated Purchase Price; Post-Closing
    Adjustments.	23
	Section 5.2	Assignment and Delivery of Loan Documents.	24
	Section 5.3	Additional Conditions to Closing.	25
	Section 5.4	Transfer of Real Estate Owned.	25
	 	 	 
	ARTICLE 6 Indemnification	27
	 	 	 
	Section 6.1	Survival.	27
	Section 6.2	Indemnification.	27
	Section 6.3	Indemnification Procedures.	29
	Section 6.4	Certain Limitations on Indemnification.	30
	Section 6.5	Exclusivity; Equitable Remedies.	31
	 	 	 
	ARTICLE 7 MISCELLANEOUS
    PROVISIONS	31
	 	 	 
	Section 7.1	Expenses.	31
	Section 7.2	Submission to Jurisdiction; Consent to Service of
    Process.	31
	Section 7.3	Entire Agreement; Amendments and Waivers.	32

 

    	 

    	 

    

 

	Section 7.4	Governing Law.	32
	Section 7.5	Notices	32
	Section 7.6	Severability.	32
	Section 7.7	Binding Effect; Assignment.	32
	Section 7.8	Specific Performance; Remedies.	33
	Section 7.9	Non-Recourse.	33
	Section 7.10	Counterparts.	33
	Section 7.11	Waiver of Jury Trial.	33
	Section 7.12	Litigation Transition.	33
	Section 7.13	Insurance Policies.	34
	Section 7.14	Nondisclosure.	34
	Section 7.15	Further Assurances.	35
	Section 7.16	Disclosure Schedule.	35

 

EXHIBIT A – Master Asset Transfer
Schedule

EXHIBIT B – Assignment and Assumption
Agreement

EXHIBIT C – Bill of Sale

EXHIBIT D – Seller Disclosure Schedules

 

    	 

    	 

    

 

ASSET PURCHASE AGREEMENT

(Loans and Real Estate Owned)

 

THIS ASSET PURCHASE
AGREEMENT, is made and entered into as of February 20, 2013 (hereinafter referred to as the “Agreement”),
by and between FIRST SOUTH BANK, a banking corporation organized and existing under the laws of the state of North Carolina, as
seller (hereinafter referred to as “Seller”), and EMERALD PORTFOLIO, LLC, a Delaware limited liability
company, as buyer (hereinafter referred to as “Buyer”).

 

WITNESSETH

 

WHEREAS, Seller desires
to sell, transfer and assign to Buyer, and Buyer desires to acquire and assume from Seller, all of the Purchased Assets and Assumed
Obligations, all as more specifically provided herein; and

 

WHEREAS, in order to
effect an orderly transition of the servicing of the Purchased Assets following Buyer’s acquisition and assumption of the
Purchased Assets and the Assumed Obligations, Seller has agreed to service the Purchased Assets during the Interim Servicing Period,
as more specifically provided herein.

 

NOW, THEREFORE, in
consideration of the promises and of the mutual agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE
1

DEFINITIONS

 

Section
1.1           Definitions.

 

All words and phrases
shall have the respective meanings specified in this ARTICLE 1 for all purposes of this Agreement.

 

“Accepted
Servicing Practices” means the policies, procedures and practices of Seller applicable to the servicing of the Purchased
Assets by Seller in effect on the date of this Agreement, but using no less care and diligence than would be considered commercially
reasonable by prudent mortgage lenders, loan servicers and asset managers servicing, managing and administering similar loans and
properties.

 

“Action”
means any action, Claim, suit, arbitration, alternative dispute resolution mechanism, complaint, inquiry, investigation, litigation
or proceeding (judicial, administrative or arbitral) before any Governmental Body or arbitration or mediation authority.

 

“Accountant”
has the meaning set forth in Section 5.1(c).

 

“Affiliate”
means, when used with respect to a specified Person, another Person that either directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, the specified Person. For the purposes of this definition, the term
“control” (including the terms “controlled by” and “under common control with”) means the possession,
directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through
the ownership of voting securities, by contract or otherwise. A Person will be deemed to control a specified Person if the Person
directly or indirectly or acting through one or more other Persons owns, controls, or has the power to vote twenty-five percent
(25%) or more of any class of voting securities of the specified Person.

 

    	 

    	 

    

 

“Agreement”
has the meaning set forth in the introductory paragraph hereto.

 

“Allocated
Purchase Price” means the portion of the Purchase Price allocated to each Purchased Asset, expressed in U.S. dollars,
as set forth on the Allocated Purchase Price Schedule.

 

“Allocated Purchase Price Schedule”
means the schedule, either in written or electronic form, attached hereto as Exhibit E, which identifies the Allocated Purchase
Price for each of the Purchased Assets being sold by Seller to Buyer pursuant to this Agreement.

 

“Ancillary Documents” means the Master
Asset Transfer Schedule, the Assignment and Assumption Agreement and the Bill of Sale.

 

“Applicable Law” means any federal,
state, county, local or foreign statute, law, ordinance, Order or regulation or code of any Governmental Body of competent jurisdiction
relating to the Purchased Assets.

 

“Assignment
and Assumption Agreement” means the Assignment and Assumption Agreement in the form attached hereto as Exhibit
B.

 

“Assignment
of Mortgage” means, with respect to a Mortgage, an assignment of the Mortgage in recordable form, notice of transfer,
or equivalent instrument sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect
of record the sale and assignment of all of Seller’s right, title and interest in and to the Mortgage to Buyer, to be prepared
and executed by Seller in connection with each Loan purchased by Buyer hereunder that is secured by a Mortgage.

 

“Assignment
of Security Document” means, with respect to a Security Document, an assignment of the Security Document, notice
of transfer, or equivalent instrument sufficient under Applicable Law to reflect the sale and assignment of all of Seller’s
right, title, and interest in and to the related Collateral to Buyer, to be prepared and executed by Seller in connection with
each Loan purchased by Buyer hereunder that is secured by Collateral.

 

“Assumed
Obligations” has the meaning set forth in Section 2.1(b).

 

“Bill of
Sale” means the Bill of Sale in the form attached hereto as Exhibit C.

 

“Borrower”
means, with respect to a Note, the person(s) obligated to repay and perform any other obligations pursuant to the Note.

 

“Buyer”
has the meaning set forth in the introductory paragraph hereto.

 

“Buyer
Documents” shall have the meaning set forth in Section 4.2(a).

 

“Buyer
Indemnified Parties” shall have the meaning set forth in Section 6.2(a).

 

“Cash Flow”
means, for any period, the sum of (a) payments of principal, interest, fees or penalties actually received by Seller in respect
of any of the Loans and related Servicing Rights, (b) proceeds actually received by Seller under any insurance policies in respect
of any of the Loans or Real Estate Owned, (c) proceeds actually received by Seller from the sale or other disposition of any of
the Loans or Real Estate Owned, (d) recoveries actually received by Seller in respect of any charged-off Loans, (e) rents, license
fees and other income received by Seller or its Affiliates or Representatives on account of the Real Estate Owned, and (f) any
other amounts actually received by Seller or its Affiliates or Representatives on account of the Loans and/or Real Estate Owned.

 

    	2

    	 

    

 

“Claim”
means any claim, demand, assertion, legal proceeding, cause of action (whether tort, contract or any other basis), loss, penalty,
fine, forfeiture, judgment, order or decree in any legal or administrative proceedings (including, without limitation, bankruptcy
and foreclosure proceedings).

 

“close
of business” means, with respect to any date, 5:00 pm Eastern Time.

 

“Closing”
means, subject to the terms and conditions set forth in this Agreement, the consummation of the purchase and sale of the Purchased
Assets and the assumption of the Assumed Obligations as provided herein.

 

“Closing
Date” means the date on which the Closing occurs, but not later than March 1, 2013, provided that the conditions
set forth in ARTICLE 5 shall have been satisfied or waived (other than those conditions to be satisfied at the Closing but
subject to the satisfaction or waiver of those conditions), by such date.

 

“Closing
Date Statement” means a statement, in form and substance acceptable to Seller and Buyer, which contains the Estimated
Purchase Price.

 

“Collateral”
means the underlying personal property, if any, securing a Loan, including all proceeds thereof.

 

“Cut-Off
Date” means February 8, 2013.

 

“Document
Defect” means, with respect to any Loan, that any one (1) or more of the documents identified in clauses (i) and
(iii) of Section 5.2(a) either (a) are not delivered to Buyer or such other Person as Buyer shall designate to Seller in
writing or (b) fail to meet the applicable requirements of clauses (i) and (iii) of Section 5.2(a).

 

“Environmental
Laws” means, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
42 U.S.C. §§ 9601 et seq., (“CERCLA”) the Emergency Planning and Community Right-to-Know
Act of 1986, 42 U.S.C. §§ 11001 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901
et seq., (“RCRA”) the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et seq., the Clean
Air Act, 42 U.S.C. §§ 7401 et seq., and the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. §§ 1251
et seq., the Occupational Safety and Health Act, 29 U.S.C. §§ 651 et seq., and all rules and regulations promulgated
pursuant to any of the above statutes, and any federal, state, local, municipal, foreign or other law, statute, constitution, principle
of common law, resolution, ordinance, code, decree, order, rule, regulation, permit condition, ruling or requirement issued, enacted,
adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body, in each case
relating to Environmental Matters.

 

    	3

    	 

    

 

“Environmental Matters” means any
matters arising out of or relating to health and safety, or pollution or protection of the environment or workplace, including,
without limitation, the ambient and indoor air, surface and ground waters, land and soils, buildings, and indoor workplaces, and
any of the foregoing relating to the use, generation, transport, treatment, storage, or disposal of any Hazardous Substances.

 

“Escrow Agent” means an escrow agent
or title company mutually acceptable to Seller and Buyer.

 

“Estimated
Purchase Price” means Seller’s good faith estimate of the Purchase Price as of the Closing Date, as set forth
on the Closing Date Statement.

 

“Excluded
Asset” has the meaning set forth in Section 2.2.

 

“Expenses”
means, with respect to Purchased Assets, the sum of all reasonable and actual, out-of-pocket third party costs and expenses of
Seller arising out of or relating to the servicing and workout of the Purchased Assets; provided, however, that in
no event shall Expenses include any servicing fees, asset management fees, costs of funds or any other amounts payable to Seller
or any Affiliate or Representative of Seller. Amounts included in Expenses shall be pro-rated as applicable for amounts incurred
in respect of periods beginning prior to the beginning of the applicable period to which the Expenses relate or ending after the
end of the applicable period to which the Expenses relate.

 

“Final
Closing Statement” has the meaning set forth in Section 5.1(b).

 

“Governmental
Body” means any government or governmental, administrative or regulatory body thereof or political subdivision thereof,
or any governmental department, commission, board, bureau, agency or instrumentality or authority, whether foreign, federal, state
or local, or any court or arbitrator (public or private).

 

“Hazardous
Substance” means any hazardous waste, hazardous material, petroleum or petroleum byproducts, asbestos and asbestos-containing
materials, radioactive material, polychlorinated biphenyls, pollutant, contaminant, or other material or substance that is defined
by or regulated under any Environmental Law.

 

“Indemnification
Claim” has the meaning set forth in Section 6.3(a).

 

“Indemnified
Party” has the meaning set forth in Section 6.3(a).

 

“Indemnifying
Party” has the meaning set forth in Section 6.3(a).

 

“Impound
Amounts” means, with respect to any Loan, the amounts held by Seller for payment of Taxes, mortgage insurance premiums
and fire and hazard insurance premiums, insurance loss proceeds or any other amounts impounded or reserves held by Seller pursuant
to the Mortgage or Collateral or any other Loan Document, together with any interest accrued on the funds so reserved or impounded.

 

“Intellectual
Property Right” means trade secrets, patents and patent applications, trademarks (whether registered or unregistered
and including any goodwill acquired in such trade marks), service marks, trade names, business names, internet domain names, e-mail
address names, copyrights (including but not limited to rights in computer software), moral rights, database rights, design rights,
rights in know-how, rights in confidential information, rights in inventions (whether patentable or not) and all other intellectual
property and proprietary rights (whether registered or unregistered, and any application for the foregoing), and all other equivalent
or similar rights which may subsist anywhere in the world.

 

    	4

    	 

    

 

“Interim
Servicing Period” has the meaning set forth in Section 2.4.

 

“Law”
means any foreign, federal, state, provincial or local law, statute, code, ordinance, rule regulation or Order.

 

“Liability” means any and all debts,
liabilities and obligations of any kind or nature, whether accrued or fixed, absolute or contingent, matured or unmatured, or determined
or determinable.

 

“Lien”
means any lien, encumbrance, equity, pledge, mortgage, deed of trust, participation interest, security interest, claim, lease,
charge, option, right of first refusal, easement, servitude or transfer restriction or any other security interest of any nature.

 

“Loan”
means an individual loan sold by Seller and purchased by Buyer pursuant to this Agreement, provided that such loan is also
identified as such on the Master Asset Transfer Schedule.

 

“Loan Documents”
means with respect to a Loan, the originals or certified copies of all of the agreements, certificates, legal opinions or other
documents evidencing or related to such Loan, including the original Note, the original or certified copy of the recorded Mortgage
and Assignment of Mortgage (if the Loan is secured by a Mortgage), the original or certified copy of all Security Document(s) and
all Assignment(s) of Security Document (if the Loan is secured by Collateral), any other security documents, the Loan application,
the Borrower’s credit report, and the title report for the related Mortgaged Property (if the Loan is secured by a Mortgage).

 

“Loan File”
means, with respect to a Loan, the file containing the Loan Documents listed in Section 5.2(a) below.

 

“Losses”
has the meaning set forth in Section 6.2(a).

 

“Master
Asset Transfer Schedule” means the schedule, either in written or electronic form, attached hereto as Exhibit
A, which identifies the Purchased Assets being sold by Seller to Buyer pursuant to this Agreement, and includes certain information
regarding such Purchased Assets as of the Cut-Off Date specified therein. The information to be provided shall include at least
the following information: (a) the name of the Borrower; (b) the Unpaid Principal Balance of the Purchased Asset; (c) the property
address of the Mortgaged Property or Real Estate Owned (as applicable) (including the state and county); (d) the priority of the
Mortgage (if the Loan is secured by a Mortgage); (e) a description of the Collateral (if the Loan is secured by Collateral); (f)
Seller’s account number; (g) the monthly payment as of the Cut-Off Date; (h) the origination date; (i) the maturity date
as of the Cut-Off Date; (j) the date the next loan payment is due as of the Cut-Off Date.

 

“Mortgage”
means, with respect to a Loan secured by a lien on Mortgaged Property, the instrument, including a mortgage or deed of trust, securing
such Loan that creates a Lien on the related Mortgaged Property.

 

“Mortgaged
Property” means the underlying real property, if any, securing a Loan, including all improvements thereon.

 

“Note”
means, with respect to a Loan, the promissory note or other evidence of the obligation to repay such Loan.

 

“Order”
means any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award of a Governmental Body.

 

    	5

    	 

    

 

“Ordinary
Course Transaction” means the modification or resolution of any Loan in the ordinary course of business by Seller
or its Representatives (acting in the ordinary course of business) consistent with past practice, Accepted Servicing Practices
and Applicable Law.

 

“Performing
Loans” means each Loan with respect to which, as of the Cut-off Date:

 

(a)          all
monthly payments due under the related Mortgage and Note through and including the Cut-off Date, have been made;

 

(b)          no
monthly payment required to be made under the related Mortgage and Note has been paid more than thirty (30) days after its due
date (excluding any applicable grace period) during the twelve (12) month period immediately preceding the Cut-off Date;

 

(c)          there
is no, and during the twelve (12) months immediately preceding Closing Date there has been no, event of acceleration or material
default, breach or violation existing under the Mortgage or the Note and no event that, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute such an event of acceleration or material default, breach or violation,
and Seller has not waived any such default, breach, violation or event of acceleration;

 

(d)          if
Seller requires Taxes and other governmental assessments (including assessments payable in future installments) to be impounded,
Taxes and all other governmental assessments, if and to the extent shown on the periodic Tax bill for the Mortgaged Property issued
by the county or municipal Tax collector, currently due and owing in respect of or affecting the related Mortgaged Property, (A)
have been paid or (B) are being contested in good faith and (ii) if amounts for such Taxes or assessments are not impounded by
Seller, Seller has not received notice of nonpayment thereof;

 

(e)          if
Seller requires insurance premiums to be impounded, all insurance premiums required to be paid currently due and owing have been
paid, and if Seller has not required insurance premiums to be impounded and Seller has received any notice of cancellation or non-renewal
with respect to any insurance coverage as may be required under the Loan Documents in respect of or affecting the related Mortgaged
Property, the related Mortgaged Property is under force-placed insurance coverage;

 

(f)          Seller
has not accelerated the Loan during the twelve (12) months immediately preceding the Closing Date;

 

(g)          Seller
has not advanced funds or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor, directly
or indirectly, for the payment of any amount required by the Mortgage or the Note;

 

(h)          Seller
has not re-aged such Loan except in compliance with Seller’s written policies and procedures applied on a consistent basis;
and

 

    	6

    	 

    

 

(i)          no
payments of other charges or payments due Seller have been capitalized under the Mortgage or the Note.

 

“Person”
means any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint-stock company,
trust, unincorporated organization, Governmental Body or other entity.

 

“Permitted
Lien” means (i) statutory landlord’s, mechanic’s, materialmen’s, carrier’s, workmen’s,
repairmen’s or other similar Liens arising or incurred in the ordinary course of business for amounts which are not yet due
and payable as of the Closing Date and which are not, individually or in the aggregate, material (as it relates to the individual
Loan or Real Estate Owned), (ii) Liens for Taxes not yet due and payable as of the Closing Date, (iii) Liens arising
from zoning ordinances which do not materially interfere with the benefits intended to be provided by the Mortgaged Property, (iv)
with respect to any Mortgaged Property, easements, rights of way, reservations, licenses, encroachments, variations or similar
restrictions, charges and encumbrances on title that do not secure monetary obligations and do not materially impair the use of
such property for its intended purposes or the value thereof, (v) liens arising from unpaid property Taxes that constitute Seller
Retained Liabilities, and (vi) Liens described on the Seller Disclosure Schedules.

 

“Protective
Advances” means amounts advanced by Seller out of its own funds to pay delinquent Taxes or insurance premiums with
respect to the Loans, which advances are ultimately reimbursable from the related Borrower under the Loan Documents.

 

“Purchased
Assets” has the meaning set forth in Section 2.1(a).

 

“Purchase
Price” means the amount equal to $25,068,842.44; plus for any Performing Loan, accrued but unpaid interest
and assessed but unpaid late fees due up to the Cut-Off Date but received after the Cut-Off Date; plus Protective Advances
and Expenses with respect to the Loans paid by Seller following the Cut-Off Date and before the Closing Date, minus all
Cash Flow for the period following the Cut-Off Date and before the Closing Date, minus the aggregate amount of the Related
Escrow Accounts and/or Impound Amounts, if any, pertaining to the Loans; provided, however, that Seller may, with
the consent of Buyer, where allowed by applicable laws, statutes, rules, and regulations of all federal, state, local, governmental,
or quasi-governmental entities or authorities having jurisdiction, wire transfer such amount from Seller to Buyer for the aggregate
amount of the Related Escrow Accounts and/or Impound Amounts in lieu of decreasing the Purchase Price hereunder. In any event,
Buyer and Seller shall comply with all applicable laws, statutes, rules, and regulations of all federal, state, local, governmental,
or quasi-governmental entities or authorities having jurisdiction with respect to the transfer of the Related Escrow Accounts and/or
Impound Amounts, and Buyer hereby assumes upon receipt of the credit to the Purchase Price or the payment from Seller to Buyer
for the Related Escrowed Accounts and/or Impound Amounts held by the Seller all obligations and duties with respect to the establishment,
holding and management of the Related Escrow Accounts and/or Impound Amounts from and after the Closing Date. Notwithstanding the
foregoing, in the event that any Related Escrow Accounts carry a negative balance at Closing, Seller shall not, under any circumstances,
be provided with a credit at Closing for such negative escrow amounts; provided, that if such negative escrow amounts are recovered
during the Interim Servicing Period, Seller shall be entitled to retain such amounts.

 

“Qualified
Assignee” means investment funds or accounts (or any subsidiary thereof) managed by Oaktree Capital Management, L.P.
or any Affiliate or subsidiary of Oaktree Capital Management, L.P.

 

    	7

    	 

    

 

“Real Estate
Owned” means real property acquired by Seller before the Closing Date by foreclosure or other means, and which is
being sold by Seller and purchased by Buyer pursuant to this Agreement, as identified in the Master Asset Transfer Schedule, including
without limitation the following: (a) any and all easements, appurtenances, covenants and other rights related to such Real Estate
Owned; (b) any and all fixtures, equipment and other personal property which at the Closing Date are placed in or attached to such
real property, to the extent transferable and not owned or leased by tenants or other occupants of such real property which are
not Affiliates or Representatives of Seller; (c) all causes of action, lawsuits, judgments, Claims and demands of any nature available
to or being pursued by or for the benefit of Seller or its Affiliates with respect to the Real Estate Owned or the ownership, use,
function, value of or other rights pertaining thereto, whether arising by way of counterclaim or otherwise; provided, however,
that the Real Estate Owned does not include any Seller Retained Liabilities, (d) all leases and licenses and other related or similar
agreements; (e) all income, payments, proceeds and other benefits of any and all of the foregoing, including but not limited to,
all accounts, cash and currency, chattel paper, electronic chattel paper, tangible chattel paper, copyrights, copyright licenses,
equipment, fixtures, general intangibles, instruments, commercial tort claims, deposit accounts, inventory, investment property,
letter of credit rights, software, supporting obligations, accessions, and other property consisting of, arising out of, or related
to the foregoing; and (f) all REO Files.

 

“Related
Escrow Accounts” means all funds held by Seller or its Affiliates or Representatives with respect to the Loans, if
any, including, but not limited to, all principal and interest funds and all buy down funds and all tax and insurance funds and
other mortgage escrow (including interest accrued thereon for the benefit of the Borrowers under the Loans) maintained by Seller
relating primarily to the Servicing Rights.

“REO File”
means all Loan Documents, leases, books, records, files and papers, whether in hard copy or computer format, pertaining to the
Real Estate Owned in the possession or control of Seller or its Affiliates or Representatives, including, without limitation, foreclosure
documentation, engineering information, photographs, data, sales and purchase correspondence, appraisals, lists of present and
former suppliers, accounts and account histories, invoices, insurance policies, environmental site assessments and any information
relating to any Tax imposed on the Real Estate Owned.

 

“Representative”
means, with respect to any Person, any and all directors, officers, partners, employees, consultants, financial advisors, counsel,
accountants, servicers, asset managers and other agents of such Person.

 

“Seller”
has the meaning set forth in the introductory paragraph hereto.

 

“Seller
Disclosure Schedules” means the Disclosure Schedules delivered by Seller to Buyer prior to the execution and delivery
of this Agreement, and attached hereto as Exhibit D.

 

“Seller
Documents” shall have the meaning set forth in Section 3.2(a).

 

“Security
Document” means, with respect to a Loan secured by Collateral, the security agreement and/or other documents and
instruments, if any, that grant and perfect a security interest in the Collateral to Seller.

 

“Seller
Indemnified Parties” shall have the meaning set forth in Section 6.2(b).

 

    	8

    	 

    

 

“Seller
Retained Liabilities” means (a) any Claims by any Borrower or any other Person relating to any wrongful act or omission
or violation of Applicable Law or Accepted Servicing Practices, or alleged act or omission or violation of Applicable Law or Accepting
Servicing Practices, or error, of Seller or any Affiliate or Representative of Seller, or any employee, agent or Representative
acting on their behalf, with respect to the origination, ownership, administration or servicing of any of the Purchased Assets,
or any document, agreement or instrument contained therein or relating thereto, occurring on or prior to the Closing Date, (b)
any Claims by any Borrower or any other Person relating to any breaches by Seller of any of the Loan Documents prior to the Closing
Date, and (c) any Claims involving property Taxes affecting any Mortgaged Property or Real Estate Owned, that are due and payable
as of the Closing Date and remain unpaid as of the Closing Date, and which are or may become a lien of priority equal to or senior
to the lien of the related Mortgage. Notwithstanding the foregoing, Seller Retained Liabilities shall not include any Claims by
any Borrower or any other Person arising out of or related to any action or omission of the Seller that was taken at the written
direction or with the prior written consent of the Buyer.

 

“Seller’s
Knowledge” means the actual knowledge of K. Gregory Britt, John F. Nicholson, Jr., and any other asset managers and/or
loan officers employed by Seller and/or its Affiliates and Representatives that are directly involved in the servicing or management
of the Purchased Assets.

 

“Servicer”
means any party who has agreed to service the Purchased Assets on behalf of Buyer.

 

“Servicing
Loan File” means, with respect to a Loan, the file containing originals or copies of all Loan Documents, except for
those Loan Documents included in the related Loan File, including, to the extent applicable, all loan files, credit files and any
other documentation, instruments, correspondence and records, in any form, primarily related to the Loan, the Mortgaged Property
and/or the Collateral to the extent in the possession or control of Seller or its Affiliates or Representatives, including without
limitation, all insurance policies, environmental site assessments, valuations, appraisals, underwriting files, loan history and
credit memoranda.

 

“Servicing
Rights” means, with respect to the Loans, the rights and obligations to administer, collect the payments for the
reduction of principal and application of interest, collect payments on account of Taxes and insurance, pay Taxes and insurance,
remit collected payments, modify, waive or amend any terms or provisions of the applicable Loan Documents, provide portfolio management,
foreclosure and default management services, and any other obligations with respect to or in connection with such Loans, together
with (a)  rights in all documents or contracts creating, defining or evidencing any such servicing rights to the extent
they relate to such servicing rights and all rights of Seller thereunder (other than contracts with an outside contractor, subcontractor
or third-party vendor that Seller uses to conduct the administration or servicing of the Loans), and (b) the right to receive
any fees arising from or connected to such Loans, and all rights, powers and privileges incident to any of the foregoing.

 

“Servicing
Transfer Date” means a date that is mutually agreeable to both Buyer and Seller, but in no event later than ninety
(90) days after the Closing Date.

 

“Tax” or “Taxes”
means any and all taxes, assessments, levies, tariffs, duties or other charges or impositions in the nature of a tax (together
with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental
Body, including income, estimated income, escheat, severance, gross receipts, profits, business, license, occupation, franchise,
capital stock, real or personal property, sales, use, transfer, value added, employment or unemployment, social security, disability,
alternative or add-on minimum, customs, excise, stamp, environmental, commercial rent or withholding taxes.

 

“Tax Return”
means any return, declaration, report or similar statement required to be filed with respect to any Tax (including any attached
schedules), including any information return, claim refund, amended return and declaration of estimated Tax.

 

“Transfer
Taxes” has the meaning set forth in Section 2.7

 

    	9

    	 

    

 

“Unpaid
Principal Balance” means (a) with respect to any Loan on any date, the unpaid principal balance of such Loan, not
including any accrued but unpaid interest or, for any Performing Loan, assessed but unpaid late fees; provided, for the
avoidance of doubt, that no loss reserves existing on the books of Seller in connection with such Loan shall be taken into account
in determining the Unpaid Principal Balance of the Loan, and (b) with respect to any Real Estate Owned, the “book value”
of such Real Estate Owned on Seller’s books.

 

Section
1.2           Terms Generally.

 

For all purposes of
this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

 

(a)          the
terms defined in this Article have the meanings assigned to them in this Article and include both the plural and the singular;

 

(b)          the
words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement
as a whole and not to any particular Article, Section or other subdivision; and

 

(c)          the
words “including” and “include” and other words of similar import shall be deemed to be followed by the
phrase “without limitation.”

 

Section
1.3           Incorporation by Reference.

 

All of the Exhibits
hereto are incorporated by reference and shall be deemed to be a part of this Agreement.

 

ARTICLE
2

PURCHASE
AND SALE OF THE LOANS and real estate owned

 

Section
2.1           Agreement to Sell and Purchase the Loans and Real Estate
Owned; Excluded Assets.

 

(a)          Upon
the terms and subject to the conditions set forth in this Agreement, at Closing, and in consideration for the payment of the Purchase
Price by Buyer to Seller by wire transfer of immediately available funds, Seller agrees to sell, transfer, assign and convey to
Buyer, and Buyer agrees to purchase, acquire and accept from Seller, all of Seller’s right, title and interest in, to and
under the Purchased Assets (other than Seller Retained Liabilities). The term “Purchased Assets” shall
mean the following assets of Seller:

 

(i)          the
Loans, including the security interests created by the related Mortgages and Security Documents, as applicable;

 

(ii)         all
Cash Flow from and after the Cut-Off Date;

 

(iii)        all
rights and benefits of Seller with respect to any title, flood and fire, hazard and extended coverage insurance policies that insure
any related Mortgaged Properties, Collateral, or Real Estate Owned, as applicable;

 

    	10

    	 

    

 

(iv)        the
related Loan Documents, including the Loan Files and Servicing Loan Files;

 

(v)         all
Servicing Rights with respect to the Loans;

 

(vi)        the
Real Estate Owned set forth in the Master Asset Transfer Schedule and the related REO Files;

 

(vii)       any
and all Claims that Seller may have against any borrower, any guarantor or any other obligor with respect to any Loan or Real Estate
Owned, including any judgments obtained against any borrower, guarantor or other obligor under any Loan prior to the date of this
Agreement; and

 

(viii)      all
proceeds in any way derived from any of the foregoing, all upon the terms and conditions set forth herein.

 

Notwithstanding the foregoing,
or anything else in this Agreement to the contrary, the Purchased Assets shall not include any Seller Retained Liabilities, all
of which are retained by Seller.

 

(b)          On
the Closing Date, and in consideration of the sale, transfer, assignment, and conveyance of the Purchased Assets by Buyer, Buyer
hereby agrees to assume from, and discharge Seller of, all obligations to be performed and Liabilities arising in connection with
the Purchased Assets arising after the Closing Date, including (subject to Section 2.4 below) the servicing of Loans (the
“Assumed Obligations”). Notwithstanding the foregoing, Seller and Buyer acknowledge and agree that the
Assumed Obligations do not (and shall not) include any Seller Retained Liabilities, all of which are retained by Seller.

 

(c)          All
Cash Flow received by Seller or its Affiliates or Representatives on account of the Purchased Assets after the Cut-Off Date shall
belong to Buyer and, if received by Seller or its Affiliates or Representatives and not credited against the Purchase Price due
at Closing, shall be sent by Seller to Buyer within fifteen (15) days of Seller’s (or Seller’s Affiliates or Representatives’)
receipt of any such Cash Flow.

 

Section
2.2           Excluded Assets and Seller Retained Liabilities.

 

Nothing herein contained
shall be deemed to sell, transfer, assign or convey the Excluded Assets or the Seller Retained Liabilities to Buyer, and Seller
shall retain all right, title and interest to, in and under the Excluded Assets and all liability for the Seller Retained Liabilities.
The term “Excluded Assets” shall mean all assets, properties, interests and rights of Seller other than
the Purchased Assets and shall include:

 

(a)          all
minute books, organizational documents, stock registers and such other books and records of Seller as pertain to ownership, organization
or existence of Seller;

 

(b)          all
Intellectual Property Rights of Seller; and

 

(c)          all
Tax Returns and any claim, right or interest of Seller in or to any refund, rebate, abatement or other recovery for Taxes (other
than Protective Advances) in each case relating to Seller’s business or the Purchased Assets for all taxable periods (or
portions thereof) ending on or prior to the Closing Date, together with any interest due thereon or penalty rebate arising therefrom.
For the absence of doubt, Seller and Buyer acknowledge and agree that Seller shall not be entitled to any reimbursement or recovery
of any Protective Advances or Expenses except for any deductions included in the calculation of the actual Purchase Price.

 

    	11

    	 

    

 

Section
2.3           Release and Transfer of Servicing.

 

On the Closing Date,
Seller shall sell and convey the Loans to Buyer on a whole Loan basis with servicing released to Buyer as of the Servicing Transfer
Date.

 

Section
2.4           Servicing Agreement.

 

During the period of
time starting on the Cut-Off Date and ending at the close of business on the Servicing Transfer Date (such period, the “Interim
Servicing Period”), Seller shall service the Loans and Real Estate Owned for the benefit of Buyer and in accordance
with Accepted Servicing Practices and Applicable Law. Seller shall have no obligation to service the Loans and Real Estate Owned
after the Servicing Transfer Date except as may be set forth in a separate agreement between Buyer and Seller. In addition, Seller
and Buyer hereby agree to the following additional rules and guidelines for servicing of the Loans and Real Estate Owned during
the Interim Servicing Period:

 

(a)          For
Period from Cut-Off Date Through Closing Date:

 

(i)          Seller
shall (and shall cause its Affiliates and Representatives to) (A) consult in good faith with Buyer and its designated Representatives
prior to entering into (or committing to enter into) any amendment, modification, waiver, forbearance, disposition, sale, or any
other action with respect to any of the Loans or Real Estate Owned, and (B) provide to Representatives of Buyer reasonable access
during normal business hours to Seller’s employees engaged in servicing the Loans and Real Estate Owned and the Loan Files
related to the Loans and the REO Files related to the Real Estate Owned;

 

(ii)         Seller
shall not take or commit to take (and shall cause Seller’s Affiliates and Representatives to not take or commit to take)
any action (or incur any material expense) with respect to the Loans or any Real Estate Owned outside of Ordinary Course Transactions
without the prior written consent of Buyer in its discretion, which shall not be unreasonably withheld; and

 

(iii)        with
respect to Ordinary Course Transactions, Seller shall not (and shall cause its Affiliates and Representatives to not) undertake
or accept (or commit to undertake or accept) any of the following actions without the prior written consent of Buyer (which shall
not be unreasonably withheld, conditioned or delayed): (A) a discounted payoff of any Loan or a sale of any Loan or Real Estate
Owned with an associated Unpaid Principal Balance as of the Cut-Off Date of $50,000 or more; (B) any amendment, modification, waiver
or forbearance of any of the terms or conditions of any Loan with an associated Unpaid Principal Balance as of the Cut-Off Date
of $50,000 or more, including without limitation, reductions of interest rate, changes to payment terms from current cash pay to
accrual or pay-in-kind or reductions to principal balance; (C) taking or accepting title to any property which is collateral for
a Loan as a result of judicial or non-judicial foreclosure, assignment or deed-in-lieu of foreclosure, power of sale, UCC sale
or otherwise; (D) entering into or modifying any leases, property management or leasing agreements, or other material agreements
with respect to Real Estate Owned or (E) incurring any expense in connection with any Loan or Real Estate Owned in excess of, on
an aggregate basis for each Loan or Real Estate Owned during the Interim Servicing Period, the lesser of (x) $5,000 or (y) 5% of
the Unpaid Principal Balance of such Loan or Real Estate Owned as of the Cut-Off Date.

 

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(b)          For
Period from Closing Date Through Servicing Transfer Date:

 

(i)          Seller
shall (and shall cause its Affiliates and Representatives to) (A) consult in good faith with Buyer and its designated Representatives
prior to entering into (or committing to enter into) any amendment, modification, waiver, forbearance, disposition, sale, or any
other action with respect to any of the Loans or Real Estate Owned or incurring any material expense with respect to any Loan or
Real Estate Owned, and (B) provide to Representatives of Buyer reasonable access during normal business hours to Seller’s
employees engaged in servicing the Loans and Real Estate Owned and the Loan Files related to the Loans and Real Estate Owned; and

 

(ii)         shall
not take or commit to take (and shall cause Seller’s Affiliates and Representatives to not take or commit to take) any action
with respect to the Loans or any Real Estate Owned without the prior written consent of Buyer in its sole and absolute discretion.

 

(c)          From
and after the Closing, upon the reasonable written request of Buyer and at no cost or expense to Buyer, Seller shall: (a) provide
to Buyer a single point of contact at Seller which contact shall be available upon reasonable notice and during normal business
hours for all reasonable servicing and IT questions and transition items for at least twelve (12) months after the Closing; (b)
as soon as is reasonably practicable after the Closing, in addition to the notice to Borrowers required pursuant to Section
5.2(a)(ix) (which notice shall be sent out prior to the Servicing Transfer Date at Seller’s expense), mail any customary
“good-bye” letters acceptable in form and substance to Buyer and conforming to Applicable Law and RESPA requirements
(if applicable); (c) provide Buyer with all reasonably available vendor information for each Purchased Asset (including, without
limitation, insurance information, tax service contracts and other information) for notification of the transfer of the Purchased
Assets; (d) produce any reasonably available data downloads for the Purchased Assets; (e) prepare final reports reasonably necessary
for transfer of the Purchased Assets by Buyer or its Servicer, such final reports to include, but not be limited to, to the extent
reasonably available, a trial balance, loan history, suspense funds listing, collateral reconciliation, and tax and insurance reporting;
(f) as soon as is reasonably practicable assemble and deliver to Buyer’s Servicer any applicable and reasonably available
records related to servicing, tax, insurance, collateral, asset and origination; (g) provide to Buyer and its Servicer all applicable
and reasonably available electronic/imaged documentation with respect to the Purchased Assets in the possession or control of Seller
or its Affiliates and Representatives; and (h) promptly send trailing documents and payments to Buyer or its Servicer after the
Closing.

 

Section
2.5           Escrow.

 

Except as set forth
on Schedule 2.5, there are no Related Escrow Accounts or Impound Amounts and Seller does not collect funds in connection
with the Loans that would constitute Related Escrow Accounts.

 

Section
2.6           Expenses.

 

Seller shall be responsible
for all Expenses of servicing the Loans and Real Estate Owned until close of business on the Cut-Off Date, including but not limited
to, any property taxes and assessments billed no later than the close of business on the Cut-Off Date with respect to Real Estate
Owned, if any; provided, however, that if any assessments are amortized and capable of being paid in installments, Seller
shall only be responsible for the payment of installments due and payable through the close of business on the Cut-Off Date. For
the avoidance of doubt, from and after the Cut-Off-Date, Buyer shall be solely responsible for all Expenses relating to servicing
the Loans and the Real Estate Owned, including without limitation, all legal fees, property management fees and care and preservation
fees incurred after the Cut-Off Date and payable to third parties; provided, however, that in no event shall Expenses
include any servicing fees, asset management fees, costs of funds or any other amounts payable to Seller or any Affiliate or Representative
of Seller. Amounts included in Expenses shall be pro-rated as applicable for amounts incurred in respect of periods beginning prior
to the beginning of the applicable period to which the Expenses relate or ending after the end of the applicable period to which
the Expenses relate.

 

    	13

    	 

    

 

Section
2.7           Transfer Taxes and Title Costs.

 

Notwithstanding anything
contained in this Agreement to the contrary, Buyer and Seller shall each pay 50% of any and all documentary, sales, use, registration,
value added, transfer, stamp, registration and similar Taxes, fees and costs, and all transfer, filing and recording fees otherwise
required to be paid by either Seller or Buyer in connection with the transactions contemplated hereby (collectively, “Transfer
Taxes”), and each of Buyer and Seller agrees to indemnify and hold the other harmless from and against any and
all claims, liability, costs and expenses arising out of or in connection with the failure of the either Buyer or Seller to pay
their respective 50% shares of all such amounts on a timely basis. In addition, Buyer and Seller shall each pay on the Closing
Date 50% of the costs to obtain endorsements to existing title insurance policies (in the case of Loans) or new title insurance
policies (in the case of Real Estate Owned) in favor of Buyer or its designee; provided that Seller shall not be
required to obtain endorsements to existing title insurance policies that contain successor language allowing such policies to
be assigned to Buyer or its designee.

 

ARTICLE
3

REPRESENTATIONS
AND WARRANTIES

 

As of the date of this
Agreement and as of the Closing Date and as an inducement to Buyer to purchase the Purchased Assets on such Closing Date, Seller
represents and warrants to Buyer that, except as otherwise set forth in the Seller Disclosure Schedules, Seller hereby represents
and warrants to Buyer that the statements contained in this ARTICLE 3 are true and correct as of the date of this Agreement
and will be true and correct as of the Closing Date as though made as of the Closing Date. Notwithstanding the foregoing, the Seller
Disclosure Schedules shall not include any exceptions to the representations and warranties set forth in subsections (a), (b),
(f), (m) or (u) of Section 3.6 or subsections (a), (b) or (q) of Section 3.7.

 

Section
3.1           Organization.

 

Seller is (and has
at all times during the time of its activities with respect to the origination, making, selling and servicing of the Loans and
Real Estate Owned been) a banking corporation organized and existing under the laws of the State of North Carolina, and Seller
has (and all times during the time of its activities with respect to the origination, making, selling and servicing of the Loans
and Real Estate Owned has had) all requisite power and authority to own, lease and operate its properties and to carry on its business.
Seller has (and had at the time of origination and servicing, as applicable) in full force and effect all material licenses, registrations
and qualifications in all appropriate jurisdictions reasonably necessary to conduct all activities performed with respect to the
origination, making, acquiring, selling, pooling and servicing of the Loans and Real Estate Owned, if and to the extent it performed
any such functions.

 

    	14

    	 

    

 

Section
3.2          Authorization of Agreement.

 

(a)          Seller
has full corporate power and authority to execute and deliver this Agreement and each other agreement (including the Ancillary
Documents), document, instrument or certificate contemplated by this Agreement to be executed by Seller in connection with the
transactions contemplated hereby and thereby (the “Seller Documents”) and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by Seller of this Agreement and each Seller Document have
been duly authorized by all necessary corporate action on behalf of Seller. This Agreement has been, and each Seller Document shall
be at or prior to the Closing, duly executed and delivered by Seller, and (assuming the due authorization, execution and delivery
by the other parties hereto and thereto) this Agreement constitutes, and each Seller Document when so executed and delivered shall
constitute, the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies
generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness,
public policy, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).

 

(b)          Seller
can perform each and every applicable covenant and other agreement contained in this Agreement, the Ancillary Documents delivered
in connection herewith and the Seller Documents.

 

Section
3.3          Conflicts; Consents of Third Parties.

 

(a)          None
of the execution and delivery by Seller of this Agreement, the consummation of the transactions contemplated hereby, or the compliance
by Seller with any of the provisions hereof, shall conflict with, or result in any violation of or default (with or without notice
or lapse of time or both) under, or give rise to a right of termination or, cancellation under, any provision of (i) the certificate
of incorporation and by-laws (or other organizational and governing documents) of Seller, (ii) any Order applicable to Seller
or by which any of the properties or assets of Seller are bound or (iii) any Applicable Law.

 

(b)          No
consent, waiver, approval, Order, permit or authorization of, or declaration or filing with, or notification to, any Person or
Governmental Body is required on the part of Seller in connection with the execution and delivery of this Agreement or any agreement
or certificate delivered in connection herewith, the compliance by Seller with any of the provisions hereof or thereof or the consummation
of the transactions contemplated hereby or thereby.

 

Section
3.4          Litigation.

 

There are no Actions
by any Person or Governmental Body pending or, to Seller’s knowledge, threatened (and, to Seller’s Knowledge, there
is no reasonable basis for any of the foregoing), against Seller or any of its Affiliates or Representatives, which Actions (i) relate
to the Purchased Assets or the Assumed Obligations, (ii) seek to restrain, enjoin or delay the consummation of the transactions
contemplated by this Agreement or any of the Ancillary Documents or seek damages in connection herewith or therewith or (iii) is
reasonably likely to affect the legality, validity or enforceability of this Agreement or the agreements or certifications delivered
in connection herewith, or Seller’s ability to perform its obligations hereunder or thereunder.

 

Section
3.5          Financial Advisors.

 

Except for Raymond
James & Associates, Inc., no Person has acted, directly or indirectly, as a broker, finder or financial advisor for Seller
in connection with the transactions contemplated by this Agreement, to which is owed any fee or commission or like payment in respect
thereof, other than any fee, commission or like payment for which Seller shall be solely responsible. Buyer shall have no obligation
to Raymond James & Associates, Inc., for any fee or commission or like payment under this Agreement or otherwise relating to
the transactions contemplated by this Agreement.

 

    	15

    	 

    

 

Section
3.6          Loans.

 

(a)          Ownership
of Loans. Seller has good and marketable title to, and is the sole owner and holder of, the Loans (or the proceeds thereof
with respect to those Loans which have been paid off in accordance with their terms or which have been disposed of by Seller in
accordance with this Agreement), free and clear of any and all liens, pledges, charges, or security interests of any nature other
than Permitted Liens. The transfer, assignment and delivery of the Loans in accordance with the terms and conditions of this Agreement
shall vest in Buyer all of Seller’s rights as owner of such Loans free and clear of any and all liens, pledges, charges,
or security interests of any nature, including, but not limited to, those of Seller, except as otherwise set forth in this Agreement.
The sale, transfer and assignment of the Loans and the Loan Documents are free and clear of any participation interest.

 

(b)          Authority
to Transfer Loans. Seller has full right and authority to sell, assign and transfer the Loans.

 

(c)          Title
Insurance. The lien of the related Mortgage for all Mortgages is insured by a mortgagee title insurance policy, or its equivalent
as adopted in the applicable jurisdiction, issued by a nationally recognized title insurance company, insuring the originator of
such Loan, its successors and assigns, as to the first priority lien or subordinated lien, as applicable, of the Mortgage in the
original principal amount of the Loan, subject only to Permitted Liens. The Master Asset Transfer Schedule sets forth and accurately
reflects the lien priority as to each title insurance policy with respect to each related Mortgage. Each title insurance policy
is in full force and effect, all premiums thereon have been paid and no material claims have been made thereunder, no claims have
been paid thereunder, and, to Seller’s Knowledge, no prior holder of the related Loan, including Seller, has done, by act
or omission, anything which would impair the coverage of any such mortgage title insurance policy.

 

(d)          Enforceability.
Each Loan secured by Mortgaged Property is evidenced by a Note and is duly secured by a valid lien on the related Mortgaged Property,
in each case, on forms and pursuant to terms that are in compliance with all material requirements of Applicable Laws at the time
of origination. Each related Note and each related Mortgage is the legal, valid and binding obligation of the maker thereof (subject
to any non-recourse provisions contained in any of the foregoing agreements and any applicable state anti-deficiency or market
value limit deficiency legislation), enforceable in accordance with its terms, except as such enforcement may be limited by Laws
relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement
is considered in a proceeding in equity or at law). To Seller’s Knowledge, no Loan is subject to any right of rescission,
set-off, recoupment, counterclaim or defense, including the defense of usury, that would render the Note or Mortgage unenforceable.

 

(e)          Disbursement.
All draws required to be funded have been funded in compliance with the terms and provisions of the Mortgage, Note and related
loan agreement, if any. The full original principal amount of each Loan has been fully disbursed or credited to the Borrower under
the related Note and there is no requirement for any lender to make future advances thereunder. To Seller’s Knowledge, all
material costs, fees and expenses incurred in making, closing or recording the related Mortgage were paid. Except for refunds or
amounts paid in accordance with Acceptable Servicing Practices, no Borrower is entitled to any refund or any amounts paid or due
to any lender pursuant to any related Note or related Mortgage.

 

(f)          Priority
of Lien. Each Mortgage has been duly acknowledged and recorded, and is a valid, enforceable and subsisting, perfected first
lien on the Mortgaged Property therein described except as set forth on the Master Asset Transfer Schedule, and the Mortgaged Property
is free and clear of all encumbrances and liens having priority over the lien of the Mortgage instrument except for Permitted Liens
and except for senior liens identified on the Master Asset Transfer Schedule.

 

    	16

    	 

    

 

(g)          Insurance.
All buildings and improvements upon the related Mortgaged Property are insured by a generally acceptable insurance carrier against
loss by a fire and extended perils policy providing coverage against loss or damage included within the “all risk of physical
loss” or the equivalent thereof and such other hazards as are customarily insured against in the area where each Mortgaged
Property is located, in an amount (subject to a customary deductible) at least equal to the outstanding principal amount of such
Loan. The Loan Documents require the Borrower to maintain (or to cause the applicable tenant to maintain) the insurance referred
to in this paragraph in respect of the Mortgaged Property. If any portion of the improvements on the related Mortgaged Property
is in an area identified in the Federal Register by the Federal Emergency Management Agency as having “special flood hazards,”
a flood insurance policy meeting any requirements of the current guidelines of the Federal Insurance and Mitigation Administration
is in effect with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of (1) the
outstanding principal amount of such Loan, (2) the full insurable actual cash value of such Mortgaged Property, (3) the
maximum amount of insurance available under the National Flood Insurance Act of 1968, as amended, and (4) 100% of the replacement
cost or value of the improvements located on such Mortgaged Property. The Loan Documents require the Borrower to maintain (or to
cause the applicable tenant to maintain) the insurance referred to in this paragraph in respect of the Mortgaged Property.

 

(h)          Waivers
and Modifications. The terms of the related Mortgage and the related Note have not been impaired, waived, altered or modified
in any material respect, except as specifically set forth in the related Loan File. Seller has not: (a) agreed to any material
modification, extension or forbearance in connection with a Note or Mortgage; (b) released, satisfied or canceled any Note or Mortgage
in whole or in part; (c) subordinated any Mortgage in whole or in part; or (d) released any Mortgaged Property in whole or in part
from the lien of any Mortgage, unless a written instrument necessary to effect any of the foregoing is held in the related Loan
File and otherwise satisfies all Applicable Laws. Seller has not advanced its funds to cure a default or delinquency with respect
to any such Loans, except as specifically set forth on the Master Asset Transfer Schedule.

 

(i)          Related
Escrow Accounts. There are no Related Escrow Accounts maintained or established by Seller or any Affiliate or Representative
of Seller related to the Loans.

 

(j)          Application
of Funds. All payments received by Seller with respect to any Loan have been remitted and properly accounted for as required
by all Applicable Laws in all material respects. All funds received by Seller in connection with the satisfaction of Loans, including,
but not limited to, foreclosure proceeds, condemnation proceeds and insurance proceeds from hazard losses, have been deposited
in the appropriate principal and interest account or taxes and insurance account, and other than in the ordinary course consistent
with the past servicing practice of Seller, all such funds have been applied to reduce the principal balance of the Loans in question,
or for reimbursement of repairs to the Mortgaged Property in question, or as otherwise required by Applicable Laws. The Unpaid
Principal Balances of the Loans are not less than the amount set forth on the Master Asset Transfer Schedule.

 

(k)          Valid
Assignment. The assignment of the Mortgage related to each Loan, constitutes the legal, valid and binding assignment of such
mortgage from Seller to Buyer subject to the exceptions described in Section 3.6(d) above.

 

    	17

    	 

    

 

(l)            Loan
File. Each and every Loan File relating to a Loan contains (a) in all material respects, true, correct and complete copies
of all Loan Documents evidencing, securing, governing or otherwise relating to each Loan and such documents and instruments are
duly executed, original, genuine and in due and proper form, (b) each of the documents and instruments required to be maintained
by all Applicable Laws and this Agreement and such documents and instruments are duly executed, original, genuine and in due and
proper form, and (c) all other material documents and information relating to such Loan in the possession or control of Seller
or its Affiliates or Representatives.

 

(m)          Loan
Characteristics. The information set forth on the Master Asset Transfer Schedule is true and correct in all material respects,
except that the Unpaid Principal Balances set forth on the Master Asset Transfer Schedule shall be true and correct in all respects.

 

(n)           Servicing.
The servicing and collection practices used by Seller and its Affiliates and Representatives with respect to the Loans have at
all times complied in all material respects with Applicable Law and Accepted Servicing Practices.

 

(o)           Customary
Remedies. The related Mortgage or Note, together with Applicable Law, contains customary and enforceable provisions (subject
to the exceptions set forth in Section 3.6(d) above) such as to render the rights and remedies of the holders thereof adequate
for the practical realization against the related Mortgaged Property of the principal benefits of the security intended to be provided
thereby.

 

(p)           Deed
of Trust. If the related Mortgage is a deed of trust, to Seller’s Knowledge, a trustee, duly qualified under Applicable
Law to serve as such, is properly designated and serving under such Mortgage.

 

(q)           Lien
Releases. Except as otherwise set forth in the Loan Documents, the related Note or Mortgage does not require the holder thereof
to release all or any portion of the Mortgaged Property from the lien of the related Mortgage, except upon payment in full of all
amounts due under such Loan which have been allocated to such Mortgaged Property upon the payment of specified release consideration.

 

(r)            Environmental.
To Seller’s Knowledge, no Hazardous Substance has been installed, placed, disposed of, released, identified or dealt with
in any manner in, on, under, around or at any Mortgaged Property. To Seller’s Knowledge, no Mortgaged Property has been used
for the release, storage, treatment, generation or disposal of Hazardous Substances. To Seller’s Knowledge, no Hazardous
Substances are present in, on, under, around, at or below any Mortgaged Property in such a manner or concentration as to violate
any law, regulation or guideline. To Seller’s Knowledge, no Mortgaged Property, by itself or as part of any other property,
has been identified by any government agency as the site of a “release,” within the meaning of CERCLA or RCRA, of a
Hazardous Substance.

 

(s)           No
Litigation. There is no pending or, to Seller’s Knowledge, threatened in writing, litigation, court action, administrative
or regulatory action or arbitration proceeding against Seller and/or with respect to any Loan.

 

(t)            Due-on-Sale
Clauses. Each related Mortgage or Loan Document contains provisions for the acceleration of the unpaid balance of such Loan,
if, without prior consent of lender or satisfaction of certain conditions, the related Mortgaged Property is transferred, sold
or encumbered in connection with subordinate financing.

 

(u)           No
Cross-Collateralization or Cross-Default. None of the Loans are secured by the same property as any other loan held by Seller
or its Affiliates which is not being transferred pursuant to this Agreement, and none of the Loans are cross-defaulted or cross-collateralized
with any loan or other obligation that is not being transferred to Buyer as part of the Purchased Assets.

 

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(v)         Deposit
Account Collateral. To the extent that any of the Collateral for any of the Loans is deposit accounts or cash collateral accounts
or similar (the “Account Collateral”), Seller has a perfected security interest in the Account Collateral
pursuant to section 25-9-314 of the General Statutes of North Carolina by control of such Account Collateral pursuant to an authenticated
agreement among the applicable Borrower, Seller and the bank with which the Account Collateral is maintained in accordance with
the requirements of section 25-9-104 of the General Statutes of North Carolina, and such security interest will remain perfected
in favor of Buyer from and after the transfer of the applicable Loan to Buyer pursuant to this Agreement and the Seller Documents.

 

(w)          Consumer
Regulations. Seller has committed no material violation of Applicable Law relating to the collection of debts with respect
to efforts to collect the Loans. Seller has complied in all material respects with (and has not received written notice of any
violation by Seller of) any and all requirements of any federal, state or local law including, without limitation, the Truth-In-Lending
Act and Regulation Z, the Equal Credit Reporting Act and Regulation B, the Real Estate Settlement Procedures Act and Regulation
X, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, usury laws or disclosure laws, consumer credit protection
laws, fair housing laws or predatory and abusive lending laws applicable to the Loan (including its origination, purchase, funding
and servicing and any collection practices in connection therewith). The applicable Borrower has not notified Seller, and Seller
has no knowledge of any relief requested or allowed to any Borrower, under the Servicemembers Civil Relief Act. No Loan is subject
to the provisions of the Homeownership and Equity Protection Act of 1994 ("HOEPA") as amended or has an
"annual percentage rate" or "total points and fees" payable by the mortgagor (as each such term is defined
under HOEPA) that equal or exceed the applicable thresholds defined under HOEPA (Section 32 of Regulation Z, 12 C.F.R. Section
226.32(a)(1)(i) and (ii)) or is considered a "high cost," "predatory" or "abusive" loan (or a similarly
designated loan using different terminology) under any Applicable Laws.

 

(x)          No
MERS Loans. None of the Loans or related Loan Documents will be listed on the Mortgage Electronic Registration Systems (MERS).

 

(y)          Impound
Amounts. There are no Impound Amounts related to the Loans.

 

Section
3.7        Real Estate Owned

 

(a)          Ownership
of Real Estate Owned. Seller has good and marketable title to, and is the sole owner and holder of, the Real Estate Owned,
free and clear of any and all liens, pledges, charges, or security interests of any nature other than Permitted Liens. The transfer,
assignment and delivery of the Real Estate Owned in accordance with the terms and conditions of this Agreement shall vest in Buyer
all of Seller’s rights as owner of such Real Estate Owned free and clear of any and all liens, pledges, charges, or security
interests of any nature, including, but not limited to, those of Seller, except as otherwise set forth in this Agreement.

 

(b)          Authority
to Transfer Real Estate Owned. Seller has full right and authority to convey, assign and transfer the Real Estate Owned.

 

(c)          Title
Insurance. An American Land Title Association policy of title insurance, or equivalent coverage customarily approved by institutional
investors in the jurisdiction in which the Real Estate Owned is located, has been duly obtained by Seller or could be obtained
by Buyer from a nationally recognized title insurance company qualified to do business in the jurisdiction where the Real Estate
Owned is located in an amount not less than the Allocated Purchase Price of such Real Estate Owned and insuring, upon payment of
the applicable premium, that the Real Estate Owned is owned by Seller or Buyer, as the case may be, subject only to Permitted Liens.

 

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(d)          Taxes
and Assessments. There are no unpaid property Taxes affecting any Real Estate Owned, except for amounts to be paid by Seller
at, or prior to, the Closing.

 

(e)          Insurance.
All buildings and improvements upon the Real Estate Owned are insured by a generally acceptable insurance carrier against loss
by a fire and extended perils policy providing coverage against loss or damage included within the “all risk of physical
loss” or the equivalent thereof and such other hazards as are customarily insured against in the area where each Real Estate
Owned is located, in an amount (subject to a customary deductible) at least equal to the outstanding principal amount of the Loan
that previously encumbered the Real Estate Owned.

 

(f)          No
Material Encroachments. To Seller’s Knowledge, no improvement that was included for the purpose of determining the appraised
value of the related Real Estate Owned as of the last appraisal lay outside the boundaries and building restriction lines of such
property, and no improvements on adjoining properties encroached upon such Real Estate Owned.

 

(g)          Licenses,
Permits, Etc. All licenses, permits and authorizations required by Applicable Laws for the use of the Real Estate Owned as
it is currently operated have been obtained and maintained in accordance with Applicable Laws, except for such licenses, permits
and authorizations the failure of which to obtain would not materially adversely affect the value, use or operation of the Real
Estate Owned.

 

(h)          Eviction
Notices. To Seller’s Knowledge, any eviction proceeding relating to any Real Estate Owned has been properly commenced
and Seller is not aware of any valid defense or counterclaim with respect thereto. The Real Estate Owned has been serviced and
maintained in compliance with all Applicable Laws.

 

(i)          Agreements
with Governmental Authorities. Seller has not entered into any unrecorded commitment or agreement with any Governmental Body
affecting the Real Estate Owned and which could reasonably be expected to have a material adverse effect on the ownership, value
or operation of the Real Estate Owned.

 

(j)          Rights
to Purchase. There are no options, rights of first refusal or similar rights in favor of any person or entity to purchase or
otherwise acquire the Real Estate Owned or any portion thereof or interest therein.

 

(k)          Foreign
Person. Seller is not a “foreign person” within the meaning of Section 1445(f) of the Internal Revenue Code of
1986, as amended.

 

(l)          Personal
Property. The inventory of personal property related to the Real Estate Owned, if any, as attached to the bill of sale in connection
with the transaction will set forth an inventory of all of such personal property to be conveyed by Seller to Buyer pursuant to
the provisions of the Agreement. Seller owns title to all of the personal property related to the Real Estate Owned.

 

(m)          Violations.
Seller has not received written notice of any uncured violation of record from a Governmental Body having jurisdiction over the
Real Estate Owned concerning any zoning, building, fire, life/safety or health code, regulation, ordinance, statute or Applicable
Law with respect to the Real Estate Owned or any portion thereof. Further, to the Knowledge of Seller there are no violations of
record of any applicable legal requirements affecting all or any portion of the Real Estate Owned which would materially adversely
affect the value, use or operation of the Real Estate Owned.

 

    	20

    	 

    

 

(n)          Taxes
and Assessments. All material real property Taxes including supplemental or other Taxes, if any, insurance premiums, water,
sewer and municipal charges, condominium or cooperative charges and assessments, leasehold payments or ground rents, affecting
or related to the Real Estate Owned, which became due and payable on or before the Cut Off Date, have been or will be paid by Seller
at or prior to the Closing Date. There are no material delinquent Taxes affecting the Real Estate Owned and Seller is not currently
contesting such Taxes or rollback of any Taxes. For purposes of this representation and warranty, real property Taxes shall not
be considered unpaid until the date on which interest and/or penalties would be payable thereon.

 

(o)          Condition
of Property; Condemnation. To Seller’s Knowledge, the Real Estate Owned is free and clear of any damage that would materially
adversely affect the value, use or operation of the Real Estate Owned, and Seller has no knowledge of any other fact(s) relating
to the physical condition of the Real Estate Owned, which in Seller’s reasonable judgment has or would reasonably be expected
to materially adversely affect the value, use or operation of the Real Estate Owned. There are no pending proceedings, and Seller
has not received any notice of any threatened proceedings, for the condemnation, eminent domain or similar proceedings or actions
affecting any material portion of the Real Estate Owned.

 

(p)          REO
File. Each and every REO File relating to a Real Estate Owned contains (a) in all material respects, true, correct and complete
copies of all Loan Documents evidencing, securing, governing or otherwise relating to the related Loan and such documents and instruments
are duly executed, original, genuine and in due and proper form, (b) each of the documents and instruments required to be maintained
by all Applicable Laws and this Agreement and such documents and instruments are duly executed, original, genuine and in due and
proper form, and (c) all other material documents and information relating to such Real Estate Owned in the possession or control
of Seller or its Affiliates or Representatives.

 

(q)          Real
Estate Owned Characteristics. The information set forth on the Master Asset Transfer Schedule with respect to each Real Estate
Owned is true and correct in all material respects.

 

(r)          Environmental.
To Seller’s Knowledge, no Hazardous Substance has been installed, placed, disposed of, released, identified or dealt with
in any manner in, on, under, around or at any Real Estate Owned. To Seller’s Knowledge, no Real Estate Owned has been used
for the release, storage, treatment, generation or disposal of Hazardous Substances. To Seller’s Knowledge, no Hazardous
Substances are present in, on, under, around, at or below any Real Estate Owned in such a manner or concentration as to violate
any law, regulation or guideline. To Seller’s Knowledge, no Real Estate Owned, by itself or as part of any other property,
has been identified by any government agency as the site of a “release,” within the meaning of CERCLA or RCRA, of a
Hazardous Substance.

 

(s)          No
Litigation. There is no pending or, to Seller’s Knowledge, threatened in writing, litigation, court action, administrative
or regulatory action or arbitration proceeding against Seller and/or with respect to any Real Estate Owned.

 

ARTICLE
4

REPRESENTATIONS
AND WARRANTIES OF BUYER

 

Buyer hereby represents
and warrants to Seller as of the Closing Date that:

 

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Section
4.1        Organization.

 

Buyer is a duly organized
limited liability company under the laws of the state of its jurisdiction and has all requisite power and authority to own, lease
and operate its properties and to carry on its business.

 

Section
4.2        Authorization of Agreement.

 

(a)          Buyer
has full corporate power and authority to execute and deliver this Agreement and each other agreement (including the Ancillary
Documents), document, instrument or certificate contemplated by this Agreement to be executed by Buyer in connection with the transactions
contemplated hereby and thereby (the “Buyer Documents”) and to consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance by Buyer of this Agreement and each Buyer Document have been duly authorized
by all necessary limited liability company action on behalf of Buyer. This Agreement has been, and each Buyer Document shall be
at or prior to the Closing, duly executed and delivered by Buyer, and (assuming the due authorization, execution and delivery by
the other parties hereto and thereto) this Agreement constitutes, and each Buyer Document when so executed and delivered shall
constitute, the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, public policy,
good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).

 

(b)          Buyer
can perform each and every applicable covenant and other agreement contained in this Agreement, the Ancillary Documents delivered
in connection herewith and the Buyer Documents.

 

Section
4.3        Conflicts; Consents of Third Parties.

 

(a)          None
of the execution and delivery by Buyer of this Agreement, the consummation of the transactions contemplated hereby, or the compliance
by Buyer with any of the provisions hereof, shall conflict with, or result in any violation of or default (with or without notice
or lapse of time or both) under, or give rise to a right of termination or, cancellation under, any provision of (i) the certificate
of formation and limited liability company agreement (or other organizational and governing documents) of Buyer, (ii) any
Order applicable to Buyer or by which any of the properties or assets of Buyer are bound or (iii) any Applicable Law.

 

(b)          No
consent, waiver, approval, Order, permit or authorization of, or declaration or filing with, or notification to, any Person or
Governmental Body is required on the part of Buyer in connection with the execution and delivery of this Agreement or any agreement
or certificate delivered in connection herewith, the compliance by Buyer with any of the provisions hereof or thereof or the consummation
of the transactions contemplated hereby or thereby.

 

Section
4.4        Litigation.

 

There are no Actions
by any Governmental Body pending or, to Buyer’s knowledge, threatened (and, to Buyer’s knowledge, there is no reasonable
basis for any of the foregoing), against Buyer or any of its Affiliates, which Actions (i) relate to the Purchased Assets
or the Assumed Obligations, (ii) seek to restrain, enjoin or delay the consummation of the transactions contemplated by this
Agreement or any of the Ancillary Documents or seek damages in connection herewith or therewith or (iii) is reasonably likely
to affect the legality, validity or enforceability of this Agreement or the agreements or certifications delivered in connection
herewith, or Buyer’s ability to perform its obligations hereunder or thereunder.

 

    	22

    	 

    

 

Section
4.5        Financial Advisors.

 

No Person has acted,
directly or indirectly, as a broker, finder or financial advisor for Buyer in connection with the transactions contemplated by
this Agreement, to which is owed any fee or commission or like payment in respect thereof, other than any fee, commission or like
payment for which Buyer shall be solely responsible.

 

Section
4.6        No Other Representations.

 

Buyer acknowledges
that Seller makes no representation or warranty whatsoever in connection with this Agreement or the transactions contemplated hereby,
including with respect to future performance of the Loans or any other information or documents made available to Buyer or its
counsel, accountants or advisors with respect to the Purchased Assets, except as expressly set forth in this Agreement and/or the
Seller Documents. Buyer acknowledges that no employee or representative of Seller has been authorized to make any statements or
representations, other than those specifically contained in this Agreement and/or the Seller Documents. Seller acknowledges that
Buyer makes no representation or warranty whatsoever in connection with this Agreement or the transactions contemplated hereby
except as expressly set forth in this Agreement and/or the Buyer Documents. Seller acknowledges that no employee or representative
of Buyer has been authorized to make any statements or representations, other than those specifically contained in this Agreement
and/or the Buyer Documents.

 

ARTICLE
5

CLOSING
OF PURCHASE OF LOANS and real estate owned

 

Section
5.1        Payment of Estimated Purchase Price; Post-Closing Adjustments.

 

(a)          On
the Closing Date, and in consideration of the sale of the Purchased Assets by Seller on such Closing Date, Buyer shall pay to Seller
the amount of the Estimated Purchase Price (as set forth in the Closing Date Statement delivered by Seller to Buyer, together with
reasonable supporting documentation, prior to the Closing Date) by wire transfer of immediately available funds to a bank account
that is designated by Seller in writing prior to the Closing Date. The payment of such aggregate Purchase Price by Buyer shall
be subject to the satisfaction of all of the conditions precedent set forth in Section 5.3 hereof.

 

(b)          Within
thirty (30) days after the Closing Date, Seller shall deliver to Buyer (i) a final closing statement in the same form as the Closing
Date Statement, updated to reflect actual Protective Advances and Expenses with respect to the Purchased Assets paid by Seller
following the Cut-Off Date and before the Closing Date and all Cash Flow for the period following the Cut-Off Date and before the
Closing Date (the “Final Closing Statement”), which shall be in the same format as the Closing Date Statement
and which shall set forth a calculation (together with any reasonable supporting documentation requested by Buyer) of the actual
Purchase Price.

 

(c)          Within
sixty (60) days after receipt of the Final Closing Statement, Buyer shall advise Seller in writing if it believes that the Final
Closing Statement did not accurately reflect the items required to be included therein, stating in reasonable detail each disagreement
therewith and the basis therefor. In the event Buyer delivers such an objection, Seller and Buyer shall attempt in good faith to
resolve their differences. In the event all differences are not resolved within sixty (60) days after Seller’s receipt of
Buyer’s objections to the proposed Final Closing Statement, then the issues remaining unresolved shall be determined by a
mutually agreed, nationally recognized accounting firm (the “Accountant”). The Accountant shall resolve
all disputed items in accordance with the provisions of this Agreement within thirty (30) days of receipt of such dispute. In making
its determination, the Accountant may only consider those items and amounts as to which Buyer and Seller have disagreed within
the time periods and on the grounds specified. The Accountant’s determination shall be conclusive and binding on Buyer and
Seller absent manifest error. Each party shall make available to the other parties hereto, and to the Accountant, its and its accountant’s
work papers (to the extent possible), schedules and other supporting data as may be reasonably requested by such other parties
to enable them to verify the amounts set forth in the Final Closing Statement. The fees of the Accountant shall be shared by Buyer,
on the one hand, and Seller, on the other hand, in proportion to the relative differences between their respective calculations
of the actual Purchase Price and the amount determined by the Accountant.

 

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(d)          If
the Estimated Purchase Price exceeds the actual Purchase Price (as finally determined under this Section 5.1), then Seller
shall, within fifteen (15) calendar days after the actual Purchase Price has been finally determined, pay such excess by wire transfer
of immediately available funds to Buyer. If the Estimated Purchase Price is less than the actual Purchase Price (as finally determined
under this Section 5.1), then Buyer shall, within fifteen (15) calendar days after the actual Purchase Price has been finally
determined, pay such deficiency by wire transfer of immediately available funds to Seller.

 

Section
5.2        Assignment and Delivery of Loan Documents.

 

(a)          Loan
File. On the Closing Date, Seller shall deliver to Buyer, or its designated custodian, the Loan File with respect to each Loan
sold to Buyer, which shall include the following Loan Documents:

 

(i)          The
original Note, or, if not available, a true, correct and complete copy of the Note and a lost note affidavit and indemnity in form
and substance acceptable to Buyer, endorsed to the order of Buyer pursuant to an allonge or endorsement in form and substance acceptable
to Buyer and signed, by facsimile or manual signature, in the name of Seller by an authorized officer of Seller;

 

(ii)         Original
policy of title insurance and all applicable endorsements thereto (or a true and correct copy thereof);

 

(iii)        Original
guaranty for each Mortgage and any Collateral, if any, or if not available, a true, correct and complete copy of the guaranty and
a lost guaranty affidavit and indemnity in form and substance acceptable to Buyer;

 

(iv)        Originals
of all modification or forbearance agreements (or true and correct copies thereof), if any;

 

(v)         If
the Loan is secured by a Mortgage: (A) the original Mortgage, with evidence of recording thereon, or a copy of the Mortgage
certified by the public recording office in those instances where the original recorded Mortgage has been lost or retained by the
public recording office, and (B) an original Assignment of Mortgage from Seller to Buyer in form and substance acceptable
to Buyer;

 

(vi)        If
the Loan is secured by Collateral: (A) all Security Documents or, if any original Security Document has been lost, a copy
of such Security Document certified as being a true, correct and complete copy by an authorized officer of Seller, (B) true, correct
and complete originals of stock certificates, certificates of deposit, etc. which make up the Collateral, and (C) the original
recorded Assignment of Security Document from Seller to Buyer in form and substance acceptable to Buyer;

 

    	24

    	 

    

 

 

(vii)       If
applicable, either: (A) originals of all recorded intervening assignments, if any, showing the ultimate transfer of title
from the originator to Seller, (with evidence of recording thereon, if applicable), or (B) copies of any recorded assignments
certified by the public recording office in any instances where the original recorded assignments have been lost or retained by
the public recording office;

 

(viii)      an
assignment of each UCC-1 financing statement related to the Loans conforming to applicable law and custom and acceptable in form
and substance to Buyer in its reasonably discretion; and

 

(ix)         On
or prior to the Servicing Transfer Date (and otherwise in compliance with all Applicable Laws, Seller shall send a letter advising
each Borrower of the assignment of the Loan to Buyer, in form and substance acceptable to Buyer.

 

(b)          Servicing
Loan File. On the Servicing Transfer Date, the Servicing Loan Files for the Loans shall be shipped by Seller to Buyer, or to
Buyer’s designated Servicer on behalf of Buyer.

 

Section
5.3        Additional Conditions to Closing.

 

(a)          Buyer’s
obligation to consummate the purchase of the Purchased Assets shall be subject to the satisfaction of the following conditions:

 

(i)          Buyer
shall have received the Closing Date Statement from Seller, and such Closing Date Statement shall be in form and substance acceptable
to Buyer.

 

(b)          Seller’s
obligation to consummate the sale of the Purchased Assets shall be subject to the satisfaction of the following conditions:

 

(i)          Seller
shall have received the aggregate Purchase Price for the Purchased Assets from Buyer.

 

Section
5.4        Transfer of Real Estate Owned.

 

(a)          Transfer
and Closing Documents. Subject to the conditions set forth in Section 5.3 above, at least one (1) business day prior
to the Closing Date, Seller will deliver to the Escrow Agent, to be held in trust pending satisfaction of Buyer’s closing
obligations, the following documents with respect to each piece of Real Estate Owned (executed and acknowledged by Seller, as applicable):

 

(i)          a
special warranty deed conforming to applicable law and custom and acceptable in form and substance to Buyer in its reasonable discretion;

 

(ii)         any
real property transfer form required by the municipality, county or state in which the Real Estate Owned is located;

 

(iii)        an
assignment and assumption of leases conforming to applicable law and custom and acceptable in form and substance to Buyer in its
reasonable discretion (if the Real Estate Owned is subject to one or more leases);

 

    	25

    	 

    

 

(iv)        an
assignment and assumption contracts conforming to applicable law and custom and acceptable in form and substance to Buyer in its
reasonable discretion (if the Real Estate Owned is subject to one or more contracts);

 

(v)         a
general assignment and bill of sale conforming to applicable law and custom and acceptable in form and substance to Buyer in its
reasonable discretion for any personal property at each piece of Real Estate Owned that is owned by Seller or any of its Affiliates
or Representatives;

 

(vi)        an
executed FIRPTA certificate;

 

(vii)       such
affidavits as may be reasonably required by the title company to issue the title insurance policy required hereunder; and

 

(viii)      the
related REO File for the Real Estate Owned and any of the following (to the extent that they exist and are in the possession or
control of Seller or its Affiliates or Representatives): warranties, insurance information, manuals and other similar information
related to the Real Estate Owned.

 

(b)          Title
Insurance. Seller shall cause the title company to deliver to Buyer at least one (1) business day prior to the Closing Date
a pro forma title insurance policy or marked-up title commitment showing title of the Real Estate Owned in Buyer, subject only
to Permitted Liens. Seller will pay the premium on the Closing Date for an ALTA owner’s title insurance policy on the Real
Estate Owned in the amount of the Allocated Purchase Price to the Escrow Agent.

 

(c)          Taxes,
Fees and Other Expenses.

 

(i)          Seller
acknowledges its liability for all real estate taxes, ad valorem taxes, personal property Taxes and other Taxes through the Cut-Off
Date, whether or not such Taxes are (i) due and payable as of the Cut-Off Date, (ii) delinquent as of the Cut-Off Date
or (iii) billed as of the Cut-Off Date. Buyer shall be liable for all Taxes on the Real Estate Owned accruing after the Cut-Off
Date. Taxes paid by Seller prior to the Closing Date with respect to periods that extend beyond the Cut-Off Date shall be prorated
and adjusted as set forth below. Any Tax payable for any period prior to the Cut-Off Date for which a bill has not yet been rendered
shall be prorated based on the Tax due for the prior billing period.

 

(ii)         With
respect to Real Estate Owned, the following items are to be paid by Seller through the Cut-Off Date: (A) utilities (including,
without limitation, heat, electric power, fuel, water and/or meter charges); (B) sewer and sanitary charges and taxes thereon;
(C) amounts prepaid or payable pursuant to insurance premiums, management or brokerage agreements, service, supply, security,
maintenance or similar agreements; (D) cooperative fees, condominium fees and charges and assessments, (E) any other similar
fees or expenses in connection with the servicing of the Real Estate Owned, and (F) and any other items customarily apportioned
in the jurisdiction in which the Real Estate Owned is located. Buyer shall be responsible for and shall pay any such charges that
relate to all periods after the Cut-Off Date, regardless of when such items are due and payable. Seller shall pay any fees or penalties
required to assign an assumed contract to Buyer or its designee. Buyer shall be entitled to any refunds received by Seller (or
any of its Affiliates or Representatives) after the Cut-Off Date with respect to insurance or other prepaid items on the Real Estate
Owned.

 

    	26

    	 

    

 

(iii)        If
any tenants occupy the Real Estate Owned, Seller shall grant Buyer a credit in the amount of any security deposits actually held
by Seller. All pre-paid rents shall be prorated between Buyer and Seller as of the Cut-Off Date.

 

(iv)        Buyer
and Seller shall each pay 50% of any and all documentary, sales, use, registration, value added, transfer, stamp, registration
and similar Taxes, fees and costs, including all escrow related fees, and all Transfer Taxes and each of Buyer and Seller agrees
to indemnify and hold the other harmless from and against any and all claims, liability, costs and expenses arising out of or in
connection with the failure of the either Buyer or Seller to pay their respective 50% shares of all such amounts on a timely basis.

 

ARTICLE
6

Indemnification

 

Section
6.1        Survival.

 

All of the representations
and warranties of the parties hereto contained in this Agreement or any Ancillary Document shall survive the Closing until the
date which is twelve (12) months following the Closing Date; provided, however, that the representations and warranties
contained in subsections (a), (b), (f), (m) and (u) of Section 3.6 and subsections (a), (b) and (q) of Section 3.7
shall survive for twenty-four (24) months following the Closing Date. All of the covenants or other agreements of the parties contained
in this Agreement shall survive until fully performed or fulfilled, unless and to the extent only that non-compliance with such
covenants or agreements is waived in writing by the party entitled to such performance. Notwithstanding the foregoing, any breach
of covenant, agreement, representation or warranty in respect of which indemnity may be sought under this Agreement shall survive
the time at which it would otherwise terminate pursuant to the preceding sentence, if (a) specific notice of the inaccuracy thereof
giving rise to such right of indemnity shall have been given in writing to the party against whom such indemnity may be sought
prior to such time; or (b) the breach was a product of fraud or willful misrepresentation by the party against whom such indemnity
may be sought;

 

Section
6.2        Indemnification.

 

Subject to Section
6.1, Section 6.4, and Section 6.5,

 

(a)          Indemnification
by Seller. Seller hereby agrees, from and after the Closing, to indemnify and hold Buyer and its directors, officers, employees,
Affiliates, agents, Representatives, successors and permitted assigns (collectively, the “Buyer Indemnified Parties”)
harmless from and against any and all losses, Liabilities, Claims, demands, judgments, damages, fines, Actions, costs and expenses
(but in the case of costs and expenses of a party hereto or its Affiliates, limited to the reasonable, actual out of pocket costs
and expenses of such party or its Affiliates) (individually, a “Loss” and collectively, “Losses”)
to the extent:

 

(i)          based
upon or arising from the failure of any of the representations or warranties made by Seller in this Agreement, any Ancillary Document
or any other Seller Documents to be true and correct in all respects;

 

(ii)         based
upon or arising from any Document Defect; provided that Seller shall have the option to cure such Document Defect within
a period of forty-five (45) days from the time it discovers or receives notice from Buyer of the existence of such defect;

 

    	27

    	 

    

 

(iii)        based
upon or arising from the breach of any covenant or other agreement contained herein on the part of Seller;

 

(iv)        based
upon or arising from any Seller Retained Liabilities; and

 

(v)         based
upon or arising from any Excluded Asset.

 

(b)          Indemnification
by Buyer. Buyer hereby agrees, from and after the Closing, to indemnify and hold Seller and its directors, officers, employees,
Affiliates, agents, Representatives, successors and permitted assigns (collectively, the “Seller Indemnified Parties”)
harmless from and against any and all Losses to the extent:

 

(i)          based
upon or arising from the failure of any of the representations or warranties made by Buyer in this Agreement, any Ancillary Document
or any other Buyer Documents to be true and correct in all respects;

 

(ii)         based
upon or arising from the breach of any covenant or other agreement contained herein on the part of Buyer; and

 

(iii)        based
upon or arising from any Assumed Obligation.

 

(c)          Repurchase
Option.

 

(i)          In
the event that Losses due to a breach of a representation or warranty for any individual Loan or individual piece of Real Estate
Owned exceed the greater of $100,000 or twenty percent (20%) of the Unpaid Principal Balance of such Loan or Real Estate Owned,
the Seller shall have the right to repurchase such Loan or Real Estate Owned from Buyer for an amount equal to (i) the Allocated
Purchase Price for such Loan or Real Estate Owned, plus (ii) actual costs and Expenses incurred by Buyer during the period
Buyer owned such Loan or Real Estate Owned; (provided that at the request of Seller, the Buyer shall provide Seller
reasonable supporting documentation of such costs and Expenses) minus (iii) in the case of a Loan, collections of principal
received with respect to such Loan since the Cut-Off Date, but only to the extent that, in the case of such Loan, such collections
result in the reduction of the outstanding principal balance of such Loan in accordance with the provisions of the Loan Documents.

 

(ii)         Upon
the repurchase of a Loan or Real Estate Owned, Buyer shall convey to Seller all of Buyer’s right, title and interest in and
to such Loan or Real Estate Owned and Seller shall assume all liabilities and obligations with respect to such Loan or Real Estate
Owned; provided that, in no event shall Seller assume any liabilities or obligations with respect to such Loan or
Real Estate Owned that arise during the period Buyer owned the Loan or Real Estate Owned. Buyer shall endorse, transfer, convey
or assign to Seller the Loan and/or Real Estate Owned in the same manner as such Loan Documents were transferred and assigned from
Seller to Buyer by documentation in the same form as that delivered from Seller to Buyer, but mutatis mutandis. Seller shall
be responsible for, and shall pay when due and payable, all transfer, filing and recording fees and taxes, costs and expenses,
and any state or county documentary taxes, if any, with respect to the filing or recording of any document or instrument contemplated
hereby in connection with such repurchase, and shall be responsible for recording any documents evidencing the transfers contemplated
in connection with such repurchase. After repurchase hereunder, Buyer shall immediately endorse, assign over and deliver to Seller
any and all payments received after repurchase by Seller from or on behalf of any obligor on the repurchased Loan or Real Estate
Owned.

 

    	28

    	 

    

 

Section
6.3        Indemnification Procedures.

 

(a)          Each
Person entitled to indemnification under this Article 6 (the “Indemnified Party”) shall give written
notice to the Person required to provide indemnification (the “Indemnifying Party”) promptly after such
Indemnified Party receives written notice of any claim, event or matter as to which indemnity may be sought; provided that
the failure of the Indemnified Party to give notice as provided in this Section 6.3(a) shall not relieve any Indemnifying
Party of its obligations under ARTICLE 6, except to the extent that such failure materially prejudices the rights of any
such Indemnifying Party. If the Indemnified Party makes a claim on account of a Loss which may be covered by third party indemnification
or insurance, the Indemnified Party shall undertake diligent and good faith efforts to pursue recovery available under such third
party indemnification or insurance policy and shall keep the Indemnifying Party reasonably informed of such efforts, but shall
not be required to make any claim or exhaust any remedies under any third party indemnification or insurance policy as a condition
to making a claim under this Agreement. The Indemnifying Party shall have the right, at its sole option and expense, to be represented
by counsel of its choice, which must be reasonably satisfactory to the Indemnified Party; and, if the Indemnifying Party agrees
(without conceding responsibility for indemnification hereunder) that the subject matter of such claim is within the scope of the
indemnification provisions under the terms of this Agreement (an “Indemnification Claim”), the Indemnifying
Party shall have the right to defend against, negotiate, settle or otherwise deal with such Indemnification Claim. If the Indemnifying
Party elects to defend against, negotiate, settle or otherwise deal with any Indemnification Claim, it shall within thirty (30)
days (or sooner, if the nature of the Indemnification Claim so requires) notify the Indemnified Party of its intent to do so. If
the Indemnifying Party elects not to defend against, negotiate, settle or otherwise deal with any Indemnification Claim, then the
Indemnified Party may defend against, negotiate, settle or otherwise deal with such Indemnification Claim. If the Indemnifying
Party shall assume the defense of any Indemnification Claim, then the Indemnified Party may participate, at his or its own expense,
in the defense of such Indemnification Claim; provided that such Indemnified Party shall be entitled to participate in any
such defense with separate counsel at the expense of the Indemnifying Party if (A) so requested by the Indemnifying Party
to participate or (B) in the written opinion of counsel to the Indemnified Party a conflict exists between the Indemnified
Party and the Indemnifying Party that the assumption of such defense by the Indemnifying Party would be inappropriate; provided
further that the Indemnifying Party shall not be required to pay for more than one (1) such counsel (plus any appropriate local
counsel) for all Indemnified Parties in connection with any Indemnification Claim. The parties hereto agree to cooperate fully
with each other in connection with the defense, negotiation or settlement of any such Indemnification Claim.

 

(b)          Notwithstanding
anything in this Section 6.3 to the contrary, neither the Indemnifying Party nor the Indemnified Party shall, without the
written consent of the other party, settle or compromise any Indemnification Claim or permit a default or consent to entry of any
judgment unless the third party claimant and such party provide to such other party an unqualified release from all Liability in
respect of the Indemnification Claim and such other party is not required to make any payment in connection with such settlement.
Notwithstanding the foregoing, if a settlement offer solely for money damages is made by the applicable third party claimant, and
the Indemnifying Party notifies the Indemnified Party in writing of the Indemnifying Party’s willingness to accept the settlement
offer and pay the amount called for by such offer, and the Indemnified Party declines to accept such offer, then the Indemnified
Party may continue to contest such Indemnification Claim, free of any participation by the Indemnifying Party, and the amount of
any ultimate Liability with respect to such Indemnification Claim that the Indemnifying Party has an obligation to pay hereunder
shall be limited to the lesser of (A) the amount of the settlement offer that the Indemnified Party declined to accept plus, without
duplication, the aggregate reasonable out-of-pocket fees and expenses incurred by the Indemnified Party in connection with the
defense of such Indemnification Claim through the date of its rejection of the settlement offer, to the extent such fees would
be due and payable pursuant to Section 6.3(a)(A) or (B), and (B) the Losses suffered by the Indemnified Party in connection with
such Indemnification Claim. If the Indemnifying Party makes any payment on any Indemnification Claim, then the Indemnifying Party
shall be subrogated, to the extent of such payment, to all rights and remedies of the Indemnified Party to any insurance benefits
or other claims of the Indemnified Party with respect to such Indemnification Claim.

 

    	29

    	 

    

 

(c)          After
any decision, judgment or award shall have been rendered by a Governmental Body of competent jurisdiction, or a settlement shall
have been consummated in accordance with this ARTICLE 6, or the Indemnified Party and the Indemnifying Party shall have
arrived at a mutually binding agreement with respect to an Indemnification Claim hereunder, the Indemnified Party shall forward
to the Indemnifying Party notice of any sums due and owing by the Indemnifying Party pursuant to this Agreement with respect to
such matter.

 

(d)          Each
party shall reasonably cooperate, and cause their respective Affiliates reasonably to cooperate, in the defense or prosecution
of any Indemnification Claim and shall furnish or cause to be furnished such records, information and testimony, and attend such
conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith, it being
understood that the party requesting such cooperation shall promptly reimburse the other party for any reasonable out-of-pocket
expenses incurred by the cooperating party (including reasonable out-of-pocket travel expenses to and from and attending conferences,
discovery proceedings, hearings, trials or appeals).

 

Section
6.4        Certain Limitations on Indemnification.

 

(a)          Each
of the parties hereto agrees to take all reasonable steps to mitigate their respective Losses that are indemnifiable hereunder,
but the provisions of this Section 6.4 shall not require an Indemnified Party to exhaust any remedies against a third party
Indemnitor or insurance prior to making a claim under this Agreement against an Indemnifying Party. If any party receives an insurance
payment or a recovery from a third party in respect of its Loss after payment has been made under any indemnification provision
of this Agreement in respect of that Loss, the Indemnified Party shall pay to the Indemnifying Party the amount of such insurance
payment or third party recovery received by the Indemnified Party (less the Indemnified Party’s reasonable costs incurred
to secure such insurance payment or third party recovery) within five (5) business days after such insurance payment or third party
recovery is received; provided that, for the avoidance of doubt, Buyer shall not be required to pay over to Seller any tax
benefit by virtue of the foregoing provision.

 

(b)          Subject
to Section 6.4(d) below, Seller shall not be liable for Losses under Section 6.2(a)(i), and Buyer shall not be liable
for Losses under Section 6.2(b)(i) unless the amount of Losses under the applicable Section exceeds five thousand dollars
($5,000) in the aggregate, provided, that in the event the Losses under Section 6.2(a)(i) or Section 6.2(b)(i), as
applicable, exceed such amount, then Seller or Buyer, as the case may be, shall be liable for all of such Losses, including the
first five thousand dollars ($5,000) (i.e., the $5,000 is a threshold not a deductible).

 

(c)          Subject
to Section 6.4(d) below, Seller shall not be liable for Losses under Section 6.2(a)(i), and Buyer shall not be liable
for Losses under Section 6.2(b)(i) to the extent such Losses exceed five percent (5.0%) of the aggregate Purchase Price
for all Loans and Real Estate Owned. In furtherance of the foregoing, Seller and Buyer acknowledge and agree that if any Loan or
piece of Real Estate Owned is repurchased by Seller pursuant to Section 6.2(c) above, fifty percent (50%) of the amounts
payable by Seller under Section 6.2(c) to repurchase the applicable Loan or piece of Real Estate Owned shall apply towards
(and count against) the cap on maximum liability contained in this Section 6.4(c); provided, however, that
any amounts payable by Seller to repurchase a Loan or piece of Real Estate Owned related to a breach of the representations and
warranties contained in subsections (a), (b), (f), (m), (u), and (v) of Section 3.6 and subsections (a), (b) and (q) of Section
3.7 shall not apply towards (or count against) the cap on maximum liability contained in this Section 6.4(c).

 

    	30

    	 

    

 

(d)          Notwithstanding
anything to the contrary contained herein, Losses that result from (a) actual fraud or intentional misrepresentation by Seller
or its Affiliates or Representatives, (b) breaches of the representations and warranties contained in subsections (a), (b), (f),
(m), (u), and (v) of Section 3.6 or subsections (a), (b) and (q) of Section 3.7, or (c) any Seller Retained Liabilities,
will not be subject to any of the limitations contained in this Section 6.4 or elsewhere in this Agreement and any Losses
related to the foregoing shall not apply towards (or count against) the cap on maximum liability contained in Section 6.4(c).

 

(e)          IN
NO EVENT SHALL ANY PARTY HAVE ANY LIABILITY TO THE OTHER FOR ANY SPECIAL OR PUNITIVE DAMAGES, LOST PROFITS, DIMINUTION IN VALUE
NOT RELATED TO REAL ESTATE OWNED OR COLLATERAL OR MORTGAGED PROPERTY UNDERLYING THE LOANS, OR CONSEQUENTIAL DAMAGES; PROVIDED THAT
THE FOREGOING WILL NOT APPLY TO THE EXTENT THAT THE INDEMNIFYING PARTY IS REQUIRED TO INDEMNIFY HEREUNDER FOR DAMAGES REQUIRED
TO BE PAID TO A THIRD PARTY.

 

Section
6.5        Exclusivity; Equitable Remedies.

 

Buyer and Seller agree
that the rights of the parties hereto to indemnification under this ARTICLE 6 shall be the exclusive rights and remedies
of the parties hereto for the recovery of any Losses for which a party may be entitled to recover under this Agreement or in connection
with the transactions contemplated hereby; provided that nothing in this Agreement will preclude or prevent any party hereto
from seeking and obtaining equitable remedies or relief not involving the recovery of money damages from any court of competent
jurisdiction (such as the remedies of injunctive relief or specific performance) for any breach or violation of this Agreement
or otherwise in connection with such transactions.

 

ARTICLE
7

MISCELLANEOUS
PROVISIONS

 

Section
7.1        Expenses.

 

Except as otherwise
provided in this Agreement, each of Seller and Buyer shall bear its own expenses incurred in connection with the negotiation and
execution of this Agreement and each other agreement, document and instrument contemplated by this Agreement and the consummation
of the transactions contemplated hereby and thereby.

 

Section
7.2        Submission to Jurisdiction; Consent to Service of Process.

 

(a)          The
parties hereby irrevocably submit to the non-exclusive jurisdiction of any federal court located within the State of North Carolina
over any dispute arising out of or relating to this Agreement or any of the transactions contemplated hereby and each party hereby
irrevocably agrees that all claims in respect of such dispute or any Action related thereto may be heard and determined in such
courts. The parties hereto hereby irrevocably waive, to the fullest extent permitted by Applicable Law, any objection which they
may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum
for the maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by Law.

 

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(b)          Each
of the parties hereto hereby consents to process being served by any party to this Agreement in any Action by the delivery of a
copy thereof in accordance with the provisions of Section 7.5.

 

Section
7.3        Entire Agreement; Amendments and Waivers.

 

This Agreement and
the Ancillary Documents (including any certificates referred to herein or therein) represent the entire understanding and agreement
between the parties hereto with respect to the subject matter hereof and thereof. This Agreement can be amended, supplemented or
changed, and any provision hereof can be waived, only by written instrument making specific reference to this Agreement signed
by the party against whom enforcement of any such amendment, supplement, modification or waiver is sought. No action taken pursuant
to this Agreement, including any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representation, warranty, covenant or agreement contained herein. The waiver by any party
of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach
or as a waiver of any other or subsequent breach. No failure on the part of any party to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right,
power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

 

Section
7.4        Governing Law.

 

This Agreement shall
be governed by and construed in accordance with the Laws of the State of North Carolina applicable to contracts made and performed
in such State without giving effect to the choice of law principles of such State that would require or permit the application
of the Laws of another jurisdiction.

 

Section
7.5        Notices. All notices
and other communications under this Agreement shall be in writing and shall be deemed given (i) when delivered personally
by hand (with written confirmation of receipt), (ii) when sent by electronic mail (with confirmation of receipt by the recipient)
or (iii) one (1) business day following the day sent by overnight courier (with written confirmation of receipt), in each
case at the addresses and email addresses set forth on Schedule 7.5 (or to such other address or email addresses as a party may
have specified by notice given to the other party pursuant to this provision).

 

Section
7.6        Severability.

 

If any term or other
provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms or
provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, 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 in order
that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

 

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Section
7.7        Binding Effect; Assignment.

 

This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Nothing in
this Agreement shall create or be deemed to create any third party beneficiary rights in any Person not a party to this Agreement
except as provided below. No assignment of this Agreement or of any rights or obligations hereunder may be made by either Buyer
or Seller, directly or indirectly (by operation of Law or otherwise), without the prior written consent of the other party and
any attempted assignment without the required consents shall be void. No assignment of any obligations hereunder shall relieve
the parties hereto of any such obligations. Notwithstanding the foregoing, upon written notice to Seller (but without any requirement
for Seller consent), Buyer shall have the right to (a) assign its rights and obligations under this Agreement to a Qualified Assignee,
or (b) collaterally assign its rights under this Agreement to a lender in connection with a loan or loans secured in whole or in
part by the Loans.

 

Section
7.8        Specific Performance; Remedies.

 

The parties hereto
expressly recognize and acknowledge that immediate, extensive and irreparable damage may result in the event that any provision
of Agreement is breached. Therefore, in addition to, and not in limitation of, any other remedy available to the non-breaching
party, the non-breaching party shall be entitled to seek to enforce its rights under this Agreement in any court of equity by decree
of specific performance, and appropriate injunctive relief may be sought in connection therewith. Such remedy of specific performance
and any and all other remedies provided for in this Agreement shall, except as provided in Section 6.5, be cumulative in
nature and not exclusive and shall be in addition to any other remedies whatsoever that a non-breaching party may otherwise have.

 

Section
7.9        Non-Recourse.

 

No past, present or
future director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney or representative of
Seller, Buyer or any of their respective Affiliates shall have any Liability for any obligations or liabilities of Seller or Buyer
(as applicable) under this Agreement or the Ancillary Documents or for any claim based on, in respect of, or by reason of, the
transactions contemplated hereby and thereby.

 

Section
7.10      Counterparts.

 

This Agreement may
be executed in one (1) or more counterparts, each of which shall be deemed to be an original copy of this Agreement and all of
which, when taken together, shall be deemed to constitute one and the same agreement. Such counterparts may be delivered by facsimile
or other electronic transmission.

 

Section
7.11      Waiver of Jury Trial.

 

The parties hereto
each hereby waive trial by jury in any judicial proceeding involving, directly or indirectly, any matters (whether sounding in
tort, contract or otherwise) in any way arising out of, related to or connected with this Agreement or the transactions contemplated
hereby.

 

    	33

    	 

    

 

Section
7.12      Litigation
Transition.

 

Prior to Closing, Seller
shall deliver written notification to Buyer of (i) the Purchased Assets in litigation including the names, addresses, telephone
numbers and e-mail addresses of all parties involved in such litigation and (ii) all documents related to such litigation. Within
five (5) business days after Closing, Seller shall (i) notify the clerk of the court and all counsel of record involved in such
litigation that ownership of the Purchased Asset in question has been transferred from Seller to Buyer, (ii) through its attorney,
if requested by Buyer and in cooperation with Buyer’s attorney, file appropriate pleadings with the court that will (x) substitute
Buyer’s attorney for Seller’s attorney, and (y) remove Seller as a party to the litigation and substitute Buyer as
the real party in interest. If Seller fails to substitute Buyer’s attorney for Seller’s attorney or to remove Seller
as a party in interest, then Seller shall pay continued legal expenses in such litigation until such time as the substitution is
effected. In no event shall (i) Buyer be liable for any contingency arrangements of Seller with Seller’s attorneys or (ii)
such substitution shall include (or be otherwise construed as) any assumption by Buyer of any Seller Retained Liabilities; provided,
that in the event any settlement or other resolution of litigation involves or creates a Seller Retained Liability, Buyer shall
obtain Seller’s prior written consent to such settlement or resolution. For the period from and after the Closing Date, Seller
consents to the engagement by Buyer of counsel to Seller in connection with any litigation or other matter relating to the Purchased
Assets or otherwise, subject to appropriate limitations on the scope of such engagement, an agreement between such counsel and
Seller satisfactory to Seller, and maintenance of the attorney-client privilege as to all communications between the Seller and
such counsel prior to the Closing; provided that (a) no such counsel shall represent either Seller or Buyer in connection with
any dispute under this Agreement or between Seller and Buyer and (b) Buyer agrees that Seller may retain such counsel for any new
matters unrelated to such litigation or other matters.

 

Section
7.13      Insurance Policies.

 

To the extent the Loan
Documents contain casualty insurance policies, credit life or disability policies, private insurance guarantor policies, or other
similar types of documents (the “Policies”), Seller agrees to (a) deliver the original Policies (or if
original Policies are not available, copies of such Policies) to Buyer on or before the Servicing Transfer Date, (b) prior to the
Servicing Transfer Date, notify each of the insurance carriers of the sale of the applicable Loans to Buyer and cause the applicable
insurance carrier to substitute Buyer or its designee as the new loss payee on each of the Policies as of the Closing Date to the
extent required by the terms of each such Policy, and (c) otherwise cooperate with Buyer (at no cost or expense to Buyer) to substitute
Buyer or Buyer’s designee as loss payee for any Policies in which the Seller is listed as loss payee as of the Closing Date.

 

Section
7.14      Nondisclosure.

 

Buyer and Seller agree
to maintain the Purchase Price and the portion of the Purchase Price allocated to each Purchased Asset, any non-public information
contained in the Disclosure Schedule, and all negotiations relating to the subject matter of this Agreement as confidential between
the parties. Notwithstanding anything to the contrary in this Agreement, any party (or its Affiliates) may disclose such confidential
information to its lenders, in the course of its (or its Affiliates’) normal reporting practices to its (or their) regulators
or direct or indirect owners, or if required by applicable law or regulations, including but not limited to federal securities
laws and regulations, or any rule of any stock exchange (in each case, including pursuant to a registration statement or other
document filed with a governmental authority under applicable law) or if necessary for it to perform any of its duties or obligations
hereunder, all as determined by such party in its discretion. Notwithstanding anything in this Agreement to the contrary, Buyer
shall have the right to (x) disclose to those Persons directly related to the Purchased Assets (for example, Borrowers, guarantors,
title companies, tenants, etc.) that Buyer has purchased the Purchased Assets and shall have the right without the consent of Seller
or any other Person to disclose such confidential information as may be necessary or desirable to inform such Persons that Buyer
is the owner of the Purchased Assets and/or to enforce the related Loan Documents; (y) Buyer and its agents and Affiliates shall
have the right to disclose confidential information that is necessary or desirable in Buyer’s opinion to enforce its rights
under the Purchased Assets and related Loan Documents, and (z) Buyer shall have the right to disclose to any potential buyer, lender,
bondholder or rating agency such confidential information as may be necessary or desirable to disclose in connection with a sale,
transfer, secured or unsecured financing or securitization of the Purchased Assets by Buyer or its Affiliates.

 

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Section
7.15      Further Assurances.

 

At any time, and from
time to time hereafter, upon the reasonable request of Buyer, Seller will do, execute, acknowledge and deliver, and will cause
to be done, executed, acknowledged and delivered, all such further acts, deeds, assignments, transfers, conveyances, powers of
attorney, recordings and assurances as may be reasonably required in order to assign, transfer, grant, convey, assure and confirm
to Buyer, or to permit Buyer to collect and reduce to possession, any or all of the Purchased Assets sold hereunder and to effectuate
and evidence the assignment of judgments related thereto. All instruments relating to the purchase and sale of the Purchased Assets
pursuant to this Agreement, and all proceedings taken in connection with this Agreement and the transactions contemplated hereby,
shall be in form and substance mutually satisfactory to Buyer and Seller.

 

Section
7.16      Disclosure Schedule.

 

Seller has set forth
information on the Disclosure Schedule in a section thereof that corresponds to the section of this Agreement to which it relates.
A matter set forth in one section of the Disclosure Schedule need not be set forth in any other section so long as its relevance
to such other section of the Disclosure Schedule or section of the Agreement is reasonably apparent on the face of the information
disclosed therein to the Person to which such disclosure is being made. The parties hereto acknowledge and agree that (a) the
Disclosure Schedule may include certain items and information solely for informational purposes for the convenience of Buyer and
(b) the disclosure by Seller of any matter in the Disclosure Schedule shall not be deemed to constitute an acknowledgment
by Seller that the matter is required to be disclosed by the terms of this Agreement or that the matter is material.

 

[Signature page
follows.]

 

    	35

    	 

    

 

IN WITNESS WHEREOF,
each of the undersigned parties has caused to be duly executed in its name by its duly authorized officer this Asset Purchase Agreement
as of the date set forth in the opening paragraph.

 

	 	SELLER:
	 	 
	 	FIRST SOUTH BANK
	 	 	 
	 	By: 	/s/ Bruce W. Elder	 
	 	Name: Bruce W. Elder
	 	Title: President and CEO
	 	 	 
	 	BUYER:
	 	 
	 	EMERALD PORTFOLIO, LLC
	 	 	 	 	 
	 	By:	Emerald Loan Grand Avenue Partners, Ltd.
	 	Its:	Managing Member
	 	 	 	 
	 	 	By:	Oaktree Capital Management, L.P.
	 	 	Its:	Director	 
	 	 	 	 	 
	 	 	 	By:	/s/ Brian Lalbow	 
	 	 	 	Name: Brian Lalbow
	 	 	 	Title: Managing Director
	 	 	 	 	 
	 	 	 	By:	/s/ Mark Jacobs	 
	 	 	 	Name: Mark Jacobs
	 	 	 	Title: Managing Director

 

Disclosure schedules and exhibits are not
filed herewith pursuant to Item 601(b)(2) of Regulation S-K. The Company will provide a copy of such schedules or exhibits to the
Commission upon request.GENSPERA, INC.

 

2009 EXECUTIVE COMPENSATION PLAN

As Amended on March 25, 2013

 

1.    
      Purposes of the Plan. The purposes of this Plan are:

 

•          to attract
and retain the best available personnel for positions of substantial responsibility,

 

•          to provide
additional incentive to Executive Employees, and

 

•          to promote
the success of the Company’s business.

 

The Plan permits
the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock, Stock Appreciation Rights, Restricted Stock
Units, Performance Units, Performance Shares and Other Stock Based Awards.

 

2.      
    Definitions. As used herein, the following definitions will apply:

 

(a)          “Administrator”
means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the Plan.

 

(b)          “Applicable
Laws” means the requirements relating to the administration of equity-based awards or equity compensation plans under
U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted
under the Plan.

 

(c)          “Award”
means, individually or collectively, a grant under the Plan of Options, SARs, Restricted Stock, Restricted Stock Units, Performance
Units, Performance Shares or Other Stock Based Awards.

 

(d)          “Award
Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award
granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.

 

(e)          “Award
Transfer Program” means any program instituted by the Administrator which would permit Participants the opportunity to
transfer any outstanding Awards to a financial institution or other person or entity selected by the Administrator.

 

(f)          “Awarded
Stock” means the Common Stock subject to an Award.

 

(g)          “Board”
means the Board of Directors of the Company.

 

(h)          “Change
in Control” means the occurrence of any of the following events:

 

(i)          Any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner”
(as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company’s then outstanding voting securities and within three
(3) years from the date of such acquisition, a merger or consolidation of the Company with or into the person (or affiliate
thereof) holding such beneficial ownership of securities of the Company is consummated; or

 

    	1

    	 

    

 

(ii)         The
consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets;

 

(iii)        A
change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors
are Incumbent Directors. “Incumbent Directors” means directors who either (A) are Directors as of the effective
date of the Plan, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority
of the Incumbent Directors at the time of such election or nomination (but will not include an individual whose election or nomination
is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); or

 

(iv)        The
consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately
after such merger or consolidation.

 

For purposes of this
Section, “affiliate” will mean, with respect to any specified person, any other person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person (“control,”
“controlled by” and “under common control with” will mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities,
by contact or credit arrangement, as trustee or executor, or otherwise).

 

(i)          “Code”
means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference to any successor
or amended section of the Code.

 

(j)          “Committee”
means a committee of Directors or other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4
of the Plan.

 

(k)         “Common
Stock” means the Common Stock of the Company, or in the case of Performance Units and certain Other Stock Based Awards,
the cash equivalent thereof.

 

(l)          “Company”
means GenSpera, Inc., a Delaware corporation, or any successor thereto.

 

(m)         [Intentionally
Left Blank]

 

(n)          “Director”
means a member of the Board.

 

(o)          “Disability”
means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of Awards other
than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists
in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.

 

(p)          “Dividend
Equivalent” means a credit, made at the discretion of the Administrator, to the account of a Participant in an amount
equal to the cash dividends paid on one Share for each Share represented by an Award held by such Participant.

 

(q)          “Employee”
means any person employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment
of a director’s fee by the Company will be sufficient to constitute “employment” by the Company.

 

    	2

    	 

    

 

(r)          “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(s)         “Exchange
Program” means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for Awards
of the same type (which may have lower exercise prices and different terms), Awards of a different type, and/or cash, and/or (ii) the
exercise price of an outstanding Award is reduced. The terms and conditions of any Exchange Program will be determined by the Administrator
in its sole discretion.

 

(t)          “Fair
Market Value” means, as of any date and unless the Administrator determines otherwise, the value of Common Stock determined
as follows:

 

(i)          If
the Common Stock is listed on any established stock exchange or a national market system, its Fair Market Value will be the closing
sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the day of
determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

 

(ii)         If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value
of a Share of Common Stock will be the mean between the high bid and low asked prices for the Common Stock for the day of determination,
as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

 

(iii)        In
the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator.

 

(iv)        Notwithstanding
the preceding, for federal, state, and local income tax reporting purposes and for such other purposes as the Administrator deems
appropriate, the Fair Market Value shall be determined by the Administrator in accordance with uniform and nondiscriminatory standards
adopted by it from time to time.

 

(u)        
  “Fiscal Year” means the fiscal year of the Company.

 

(v)       
  “Incentive Stock Option” means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

 

(w)         “Individual
Objectives” means as to a Participant, the objective and measurable goals set by a “management by objectives”
process and approved by the Committee (in its discretion).

 

(x)          “Nonstatutory
Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock
Option.

 

(y)          “Officer”
means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

 

(z)          “Option”
means a stock option granted pursuant to the Plan.

 

(aa)         “Other
Stock Based Awards” means any other awards not specifically described in the Plan that are valued in whole or in part
by reference to, or are otherwise based on, Shares and are created by the Administrator pursuant to Section 12.

 

(bb)         “Outside
Director” means a Director who is not an Employee.

 

(cc)         “Parent”
means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

 

    	3

    	 

    

 

(dd)         “Participant”
means the holder of an outstanding Award granted under the Plan.

 

(ee)         “Performance
Goals” means the goal(s) (or combined goal(s)) determined by the Committee (in its discretion) to be applicable to a
Participant with respect to an Award. The Performance Goals may differ from Participant to Participant and from Award to Award.
Any criteria used may be measured, as applicable, in absolute or relative terms (including passage of time and/or against another
company or companies), on a per share basis, against the performance of the Company as a whole or any segment of the Company, and
on a pre-tax or after-tax basis.

 

(ff)       
  “Performance Share” means an Award granted to a Service Provider pursuant to Section 10
of the Plan.

 

(gg)         “Performance
Unit” means an Award granted to a Service Provider pursuant to Section 10 of the Plan.

 

(hh)         “Period
of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions
and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time,
the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.

 

(ii)      
   “Plan” means this 2009 Executive Compensation Plan.

 

(jj)    
     “Restricted Stock” means shares of Common Stock issued pursuant to a
Restricted Stock award under Section 8, Section 11 or Section 12 of the Plan or issued pursuant to the early
exercise of an Option.

 

(kk)         “Restricted
Stock Unit” means an Award that the Administrator permits to be paid in installments or on a deferred basis pursuant
to Section 11 of the Plan.

 

 

(ll)   
       “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.

 

(mm)       “Section
16(b)” means Section 16(b) of the Exchange Act.

 

(nn)         “Service
Provider” means an executive Employee.

 

(oo)         “Share”
means a share of the Common Stock, as adjusted in accordance with Section 15 of the Plan.

 

(pp)         “Stock
Appreciation Right” or “SAR” means an Award, granted alone or in connection with an Option, that pursuant
to Section 9 of the Plan is designated as a SAR.

 

(qq)         “Subsidiary”
means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code.

 

(rr)         “Unvested
Awards” means Options or Restricted Stock that (i) were granted to an individual in connection with such individual’s
position as a Service Provider and (ii) are still subject to vesting or lapsing of Company repurchase rights or similar restrictions.

 

    	4

    	 

    

 

3.     
     Stock Subject to the Plan.

 

(a)          Stock
Subject to the Plan. The maximum number of Shares that may be issued under the Plan is 6,000,000. The Shares may be authorized,
but unissued, or reacquired Common Stock. Shares shall not be deemed to have been issued pursuant to the Plan (i) with respect
to any portion of an Award that is settled in cash, or (ii) to the extent such Shares are withheld in satisfaction of tax
withholding obligations. Upon payment in Shares pursuant to the exercise of an Award, the number of Shares available for issuance
under the Plan shall be reduced only by the number of Shares actually issued in such payment. If a Participant pays the exercise
price (or purchase price, if applicable) of an Award through the tender of Shares, the number of Shares so tendered shall again
be available for issuance pursuant to future Awards under the Plan. Notwithstanding anything in the Plan, or any Award Agreement
to the contrary, Shares attributable to Awards transferred under any Award Transfer Program shall not be again available for grant
under the Plan.

 

(b)          Lapsed
Awards. If any outstanding Award expires or is terminated or canceled without having been exercised or settled in full, or
if Shares acquired pursuant to an Award subject to forfeiture or repurchase are forfeited or repurchased by the Company, the Shares
allocable to the terminated portion of such Award or such forfeited or repurchased Shares shall again be available for grant under
the Plan.

 

4.     
     Administration of the Plan.

 

(a)          Procedure.

 

(i)          Section 162(m).
To the extent that the Administrator determines it to be desirable and necessary to qualify Awards granted hereunder as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two
or more “outside directors” within the meaning of Section 162(m) of the Code.

 

(ii)         Rule
16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3.

 

(iii)        Other
Administration. Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee,
which committee will be constituted to satisfy Applicable Laws.

 

(iv)      Delegation
of Authority for Day-to-Day Administration. Except to the extent prohibited by Applicable Law, the Administrator may delegate
to one or more individuals the day-to-day administration of the Plan and any of the functions assigned to it in this Plan. Such
delegation may be revoked at any time.

 

(b)          Powers
of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:

 

(i)          to
determine the Fair Market Value;

 

(ii)         to
select the Service Providers to whom Awards may be granted hereunder;

 

(iii)        to
determine the number of Shares to be covered by each Award granted hereunder;

 

(iv)        to
approve forms of agreement for use under the Plan;

 

(v)         to
determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based
on performance criteria), any vesting acceleration or waiver of forfeiture or repurchase restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator, in its sole discretion,
will determine;

 

    	5

    	 

    

 

(vi)        to
reduce the exercise price of any Award to the then current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Award shall have declined since the date the Award was granted;

 

(vii)       to
institute an Exchange Program;

 

(viii)      to
construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

 

(ix)        to
prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of satisfying applicable foreign laws and/or qualifying for preferred tax treatment under applicable
foreign tax laws;

 

(x)         to
modify or amend each Award (subject to Section 18(c) of the Plan), including the discretionary authority to extend the post-termination
exercisability period of Awards longer than is otherwise provided for in the Plan;

 

(xi)        to
allow Participants to satisfy withholding tax obligations by electing to have the Company withhold from the Shares or cash to be
issued upon exercise or vesting of an Award that number of Shares or cash having a Fair Market Value equal to the minimum amount
required to be withheld. The Fair Market Value of any Shares to be withheld will be determined on the date that the amount of tax
to be withheld is to be determined. All elections by a Participant to have Shares or cash withheld for this purpose will be made
in such form and under such conditions as the Administrator may deem necessary or advisable;

 

(xii)       to
authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted
by the Administrator;

 

(xiii)      to
allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant
under an Award;

 

(xiv)      to
implement an Award Transfer Program;

 

(xv)       to
determine whether Awards will be settled in Shares, cash or in any combination thereof;

 

(xvi)      to
determine whether Awards will be adjusted for Dividend Equivalents;

 

(xvii)     to
create Other Stock Based Awards for issuance under the Plan;

 

(xviii)    to
establish a program whereby Service Providers designated by the Administrator can reduce compensation otherwise payable in cash
in exchange for Awards under the Plan;

 

(xix)       to
impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by
a Participant or other subsequent transfers by the Participant of any Shares issued as a result of or under an Award, including
without limitation, (A) restrictions under an insider trading policy, and (B) restrictions as to the use of a specified
brokerage firm for such resales or other transfers; and

 

(xx)        to
make all other determinations deemed necessary or advisable for administering the Plan.

 

(c)          Effect
of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations will be final and
binding on all Participants and any other holders of Awards.

 

    	6

    	 

    

 

5.     
     Eligibility. Nonstatutory Stock Options, Restricted Stock, Stock Appreciation Rights,
Performance Units, Performance Shares, Restricted Stock Units and Other Stock Based Awards may be granted to Service
Providers. Incentive Stock Options may be granted only to Employees.

 

6.      
    Limitations.

 

(a)          ISO
$100,000 Rule. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory
Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with
respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options will be treated as Nonstatutory Stock Options.
For purposes of this Section 6(a), Incentive Stock Options will be taken into account in the order in which they were granted.
The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted.

 

(b)          No
Rights as a Service Provider. Neither the Plan nor any Award shall confer upon a Participant any right with respect to continuing
his or her relationship as a Service Provider, nor shall they interfere in any way with the right of the Participant or the right
of the Company or its Parent or Subsidiaries to terminate such relationship at any time, with or without cause.

 

(c)          162(m)
Limitation. For purposes of qualifying Awards as “performance-based compensation” under Section 162(m) of
the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance
Goals shall be set by the Administrator on or before the latest date permissible to enable the Award to qualify as “performance-based
compensation” under Section 162(m) of the Code. In granting Awards which are intended to qualify under Section 162(m)
of the Code, the Administrator shall follow any procedures determined by it from time to time to be necessary or appropriate to
ensure qualification of the Award under Section 162(m) of the Code (e.g., in determining the Performance Goals).

 

7.       
   Stock Options.

 

(a)          Term
of Option. The term of each Option will be stated in the Award Agreement. In the case of an Incentive Stock Option, the term
will be ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in
the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any
Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter
term as may be provided in the Award Agreement.

 

(b)          Option
Exercise Price and Consideration.

 

(i)          Exercise
Price. The per Share exercise price for the Shares to be issued pursuant to exercise of an Option will be determined by the
Administrator, subject to the following:

 

(1)          In
the case of an Incentive Stock Option

 

(A)         granted
to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less
than 110% of the Fair Market Value per Share on the date of grant.

 

(B)         granted
to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price will be
no less than 100% of the Fair Market Value per Share on the date of grant.

 

    	7

    	 

    

 

(2)         In
the case of a Nonstatutory Stock Option, the per Share exercise price will be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as “performance-based compensation” within the meaning of Section 162(m)
of the Code, the per Share exercise price will be no less than 100% of the Fair Market Value per Share on the date of grant.

 

(3)         Notwithstanding
the foregoing, Incentive Stock Options may be granted with a per Share exercise price of less than 100% of the Fair Market Value
per Share on the date of grant pursuant to a merger or other corporate transaction.

 

(ii)         Waiting
Period and Exercise Dates. At the time an Option is granted, the Administrator will fix the period within which the Option
may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.

 

(c)          Form
of Consideration. The Administrator will determine the acceptable form of consideration for exercising an Option, including
the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration
at the time of grant. Such consideration to the extent permitted by Applicable Laws may consist entirely of:

 

(i)          cash;

 

(ii)         check;

 

(iii)        promissory
note;

 

(iv)        other
Shares which meet the conditions established by the Administrator to avoid adverse accounting consequences (as determined by the
Administrator);

 

(v)         consideration
received by the Company under a cashless exercise program implemented by the Company in connection with the Plan;

 

(vi)        a
reduction in the amount of any Company liability to the Participant, including any liability attributable to the Participant’s
participation in any Company-sponsored deferred compensation program or arrangement;

 

(vii)       any
combination of the foregoing methods of payment; or

 

(viii)      such
other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.

 

(d)          Exercise
of Option.

 

(i)          Procedure
for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option
may not be exercised for a fraction of a Share.

 

    	8

    	 

    

 

An Option will be deemed
exercised when the Company receives: (x) written or electronic notice of exercise (in accordance with the Award Agreement)
from the person entitled to exercise the Option, and (y) full payment for the Shares with respect to which the Option is exercised.
Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award
Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested
by the Participant, in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a stockholder will exist with respect to the Awarded Stock, notwithstanding the exercise of the Option.
The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for
a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 15
of the Plan or the applicable Award Agreement.

 

Exercising an Option
in any manner will decrease the number of Shares thereafter available for sale under the Option, by the number of Shares as to
which the Option is exercised.

 

(ii)         Termination
of Relationship as a Service Provider. If a Participant ceases to be a Service Provider, other than upon the Participant’s
death or Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement
to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such
Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain
exercisable for three (3) months following the Participant’s termination. Unless otherwise provided by the Administrator,
if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option will revert to the Plan on the date one (1) month following the Participant’s termination. If
after termination the Participant does not exercise his or her Option within the time specified by the Administrator, the Option
will terminate, and the Shares covered by such Option will revert to the Plan.

 

(iii)        Disability
of Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant
may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested
on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement).
In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following
the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant
is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan
on the date one (1) month following the Participant’s termination. If after termination the Participant does not exercise
his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert
to the Plan.

 

(iv)        Death
of Participant. If a Participant dies while a Service Provider, the Option may be exercised following the Participant’s
death within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of
death (but in no event may the option be exercised later than the expiration of the term of such Option as set forth in the Award
Agreement), by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to Participant’s
death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option
may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred
pursuant to the Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified
time in the Award Agreement, the Option will remain exercisable for twelve (12) months following Participant’s death.
Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option will immediately revert to the Plan on the date one (1) month following
the Participant’s death. If the Option is not so exercised within the time specified herein, the Option will terminate, and
the Shares covered by such Option will revert to the Plan.

 

(e)          Buyout
Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously granted
based on such terms and conditions as the Administrator shall establish and communicate to the Participant at the time that such
offer is made.

 

    	9

    	 

    

 

8.     
     Restricted Stock.

 

(a)          Grant
of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time,
may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.
Subject to any restrictions specifically provided for in this Plan, the Administrator shall have complete discretion to determine
(i) the number of Shares subject to a Restricted Stock award granted to any Participant, and (ii) the conditions, if
any, that must be satisfied, which typically will be based principally or solely on continued provision of services but may include
a performance-based component, upon which is conditioned the grant, vesting or issuance of Restricted Stock.

 

(b)          Restricted
Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction,
the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine.
Unless the Administrator determines otherwise, Shares of Restricted Stock will be held by the Company as escrow agent until the
restrictions on such Shares have lapsed.

 

(c)          Transferability.
Except as provided in this Section 8, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise

 

(d)          Other
Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as
it may deem advisable or appropriate.

 

(e)          Removal
of Restrictions. Except as otherwise provided in this Section 8, Shares of Restricted Stock covered by each Restricted
Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction.
The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.

 

(f)          Voting
Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise
full voting rights with respect to those Shares, unless the Administrator determines otherwise.

 

(g)          Dividends
and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled
to receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in the Award Agreement.
If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability
and forfeitability as the Shares of Restricted Stock with respect to which they were paid.

 

(h)          Return
of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have
not lapsed will revert to the Company and again will become available for grant under the Plan.

 

9.  
        Stock Appreciation Rights.

 

(a)          Grant
of SARs. Subject to the terms and conditions of the Plan, a SAR may be granted to Service Providers at any time and from time
to time as will be determined by the Administrator, in its sole discretion.

 

(b)          Number
of Shares. Subject to Section 6(c)(i) of the Plan, the Administrator will have complete discretion to determine the number
of SARs granted to any Service Provider.

 

(c)          Exercise
Price and Other Terms. The Administrator, subject to the provisions of the Plan, will have complete discretion to determine
the terms and conditions of SARs granted under the Plan.

 

    	10

    	 

    

 

(d)          Exercise
of SARs. SARs will be exercisable on such terms and conditions as the Administrator, in its sole discretion, will determine.

 

(e)          SAR
Agreement. Each SAR grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the SAR,
the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.

 

(f)          Expiration
of SARs. An SAR granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and
set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Sections 7(d)(ii), 7(d)(iii) and 7(d)(iv) also will
apply to SARs.

 

(g)          Payment
of SAR Amount. Upon exercise of an SAR, a Participant will be entitled to receive payment from the Company in an amount determined
by multiplying:

 

(i)          The
difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times

 

(ii)         The
number of Shares with respect to which the SAR is exercised.

 

At the discretion
of the Administrator, the payment upon SAR exercise may be in cash, in Shares of equivalent value, or in some combination thereof.

 

(h)          Buyout
Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares a Stock Appreciation Right previously
granted based on such terms and conditions as the Administrator shall establish and communicate to the Participant at the time
that such offer is made.

 

10.         Performance
Units and Performance Shares.

 

(a)          Grant
of Performance Units/Shares. Subject to the terms and conditions of the Plan, Performance Units and Performance Shares may
be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion.
Subject to any restrictions specifically provided for in this Plan, the Administrator will have complete discretion in determining
the number of Performance Units and Performance Shares granted to each Participant.

 

(b)          Value
of Performance Units/Shares. Each Performance Unit will have an initial value that is established by the Administrator on or
before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date
of grant.

 

(c)          Performance
Objectives and Other Terms. The Administrator will set performance objectives in its discretion which, depending on the extent
to which they are met, will determine the number or value of Performance Units/Shares that will be paid out to the Service Providers.
The time period during which the performance objectives must be met will be called the “Performance Period.” Each Award
of Performance Units/ Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms
and conditions as the Administrator, in its sole discretion, will determine. The Administrator may set performance objectives based
upon the achievement of Company-wide, divisional, or individual goals, applicable federal or state securities laws, or any other
basis determined by the Administrator in its discretion.

 

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(d)          Earning
of Performance Units/Shares. After the applicable Performance Period has ended, the holder of Performance Units/Shares will
be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period,
to be determined as a function of the extent to which the corresponding performance objectives have been achieved. After the grant
of a Performance Unit/Share, the Administrator, in its sole discretion, may reduce or waive any performance objectives for such
Performance Unit/Share.

 

(e)          Form
and Timing of Payment of Performance Units/Shares. Payment of earned Performance Units/Shares will be made as soon after the
expiration of the applicable Performance Period at the time determined by the Administrator. The Administrator, in its sole discretion,
may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the
value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination thereof.

 

(f)          Cancellation
of Performance Units/Shares. On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares
will be forfeited to the Company, and again will be available for grant under the Plan.

 

11.         Restricted
Stock Units. Restricted Stock Units shall consist of a Restricted Stock, Performance Share or Performance Unit Award that the
Administrator, in its sole discretion permits to be paid out in installments or on a deferred basis, in accordance with rules and
procedures established by the Administrator.

 

12.         Other
Stock Based Awards. Other Stock Based Awards may be granted either alone, in addition to, or in tandem with, other Awards granted
under the Plan and/or cash awards made outside of the Plan. The Administrator shall have authority to determine the Service Providers
to whom and the time or times at which Other Stock Based Awards shall be made, the amount of such Other Stock Based Awards, and
all other conditions of the Other Stock Based Awards including any dividend and/or voting rights.

 

13.         Leaves
of Absence. Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during any unpaid
leave of absence and will resume on the date the Participant returns to work on a regular schedule as determined by the Company;
provided, however, that no vesting credit will be awarded for the time vesting has been suspended during such leave of absence.
A Service Provider will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options,
no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract.
If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three months following
the 91 st day of such leave any Incentive Stock Option held by the Participant will cease to be treated as an Incentive
Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.

 

14.         Non-Transferability
of Awards. Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred,
or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime
of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award will contain such additional
terms and conditions as the Administrator deems appropriate.

 

15.         Adjustments;
Dissolution or Liquidation; Merger or Change in Control.

 

(a)          Adjustments.
In the event that any dividend (excluding an ordinary dividend) or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure
of the Company affecting the Shares occurs, then the Administrator shall appropriately adjust the number and class of Shares which
may be delivered under the Plan, the 162(m) annual share issuance limits under Section 6(c) of the Plan, and the number, class,
and price of Shares subject to outstanding Awards. Notwithstanding the preceding, the number of Shares subject to any Award always
shall be a whole number.

 

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(b)          Dissolution
or Liquidation. In the event that any dividend (excluding an ordinary dividend) or other distribution (whether in the form
of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other
change in the corporate structure of the Company affecting the Shares occurs then the Administrator shall appropriately adjust
the number and class of Shares which may be delivered under the Plan, the 162(m) annual share issuance limits under Section 6(c)
of the Plan, and the number, class, and price of Shares subject to outstanding Awards. Notwithstanding the preceding, the number
of Shares subject to any Award always shall be a whole number.

 

(c)          Merger
or Change in Control.

 

(i)          Stock
Options and SARS. In the event of a merger or Change in Control, each outstanding Option and SAR shall be assumed or an equivalent
option or SAR substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. Unless determined
otherwise by the Administrator, in the event that the successor corporation refuses to assume or substitute for the Option or SAR,
the Participant shall fully vest in and have the right to exercise the Option or SAR as to all of the Awarded Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option or SAR is not assumed or substituted in the event
of a merger or Change in Control, the Administrator shall notify the Participant in writing or electronically that the Option or
SAR shall be exercisable, to the extent vested, for a period of up to fifteen (15) days from the date of such notice, and
the Option or SAR shall terminate upon the expiration of such period. For the purposes of this paragraph, the Option or SAR shall
be considered assumed if, following the merger or Change in Control, the option or stock appreciation right confers the right to
purchase or receive, for each Share of Awarded Stock subject to the Option or SAR immediately prior to the merger or Change in
Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by
holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration
received in the merger or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator
may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option
or SAR, for each Share of Awarded Stock subject to the Option or SAR, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or Change
in Control. Notwithstanding anything herein to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of
one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals
without the Participant’s consent; provided, however, a modification to such performance goals only to reflect the successor
corporation’s post-merger or post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid
Award assumption.

 

(ii)         Restricted
Stock, Performance Shares, Performance Units, Restricted Stock Units and Other Stock Based Awards. In the event of a merger
or Change in Control, each outstanding Restricted Stock, Performance Share, Performance Unit, Other Stock Based Award and Restricted
Stock Unit awards shall be assumed or an equivalent Restricted Stock, Performance Share, Performance Unit, Other Stock Based Award
and Restricted Stock Unit award substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.
Unless determined otherwise by the Administrator, in the event that the successor corporation refuses to assume or substitute for
the Restricted Stock, Performance Share, Performance Unit, Other Stock Based Award or Restricted Stock Unit award, the Participant
shall fully vest in the Restricted Stock, Performance Share, Performance Unit, Other Stock Based Award or Restricted Stock Unit
including as to Shares which would not otherwise be vested. For the purposes of this paragraph, a Restricted Stock, Performance
Share, Performance Unit, Other Stock Based Award and Restricted Stock Unit award shall be considered assumed if, following the
merger or Change in Control, the award confers the right to purchase or receive, for each Share subject to the Award immediately
prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in
the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common stock of
the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the
consideration to be received, for each Share and each unit/right to acquire a Share subject to the Award, to be solely common stock
of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common
Stock in the merger or Change in Control. Notwithstanding anything herein to the contrary, an Award that vests, is earned or paid-out
upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies
any of such performance goals without the Participant’s consent; provided, however, a modification to such performance goals
only to reflect the successor corporation’s post-merger or post-Change in Control corporate structure will not be deemed
to invalidate an otherwise valid Award assumption.

 

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16.         Date
of Grant. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination
granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided
to each Participant within a reasonable time after the date of such grant.

 

17.         Term
of Plan. Subject to Section 22 of the Plan, the Plan will become effective upon its adoption by the Board. The Plan will
continue in effect for a term ending on the 10 year anniversary of the date the Plan is adopted, unless terminated earlier under
Section 18 of the Plan.

 

18.         Amendment
and Termination of the Plan.

 

(a)          Amendment
and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.

 

(b)          Stockholder
Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

 

(c)          Effect
of Amendment or Termination. Subject to Section 20 of the Plan, no amendment, alteration, suspension or termination of
the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator,
which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s
ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such
termination.

 

19.         Conditions
Upon Issuance of Shares.

 

(a)          Legal
Compliance. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance
and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company
with respect to such compliance.

 

(b)          Investment
Representations. As a condition to the exercise or receipt of an Award, the Company may require the person exercising or receiving
such Award to represent and warrant at the time of any such exercise or receipt that the Shares are being purchased only for investment
and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation
is required.

 

20.         Severability.
Notwithstanding any contrary provision of the Plan or an Award to the contrary, if any one or more of the provisions (or any part
thereof) of this Plan or the Awards shall be held invalid, illegal or unenforceable in any respect, such provision shall be modified
so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions (or any
part thereof) of the Plan or Award, as applicable, shall not in any way be affected or impaired thereby.

 

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21.         Inability
to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve
the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will not
have been obtained.

 

    	15

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