Document:

Exhibit 4.2

 

EXECUTION COPY

AMENDED AND RESTATED

AGREEMENT BETWEEN NOTEHOLDERS

Dated as of May 18, 2021

by and among

BANK OF AMERICA, N.A.

(as the Holder of each Note A identified as owned by it herein)

WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE BENEFIT OF THE REGISTERED HOLDERS OF BANK 2020-BNK30, COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATES, SERIES 2020-BNK30

(as the Holder of each Note A identified as owned by it herein)

WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE BENEFIT OF THE REGISTERED HOLDERS OF BANK 2021-BNK31, COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATES, SERIES 2021-BNK31

(as the Holder of each Note A identified as owned by it herein)

WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE BENEFIT OF THE REGISTERED HOLDERS OF BANK 2021-BNK32, COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATES, SERIES 2021-BNK32

(as the Holder of each Note A identified as owned by it herein)

WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE ON BEHALF OF THE REGISTERED HOLDERS OF CSAIL 2021-C20 COMMERCIAL MORTGAGE TRUST,
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2021-C20

(as the Holder of each Note A identified as owned by it herein)

and

CF MDD HOLDINGS LLC

(as the Note B Holder)

Miami Design District

     

    	 

    

THIS AGREEMENT BETWEEN
NOTEHOLDERS (“Agreement”), dated as of May 18, 2021, by and between BANK OF AMERICA, N.A., a national banking
association (“BANA” and, together with its successors and assigns in interest, in its capacity as the owner
of the Note A-1, the “Note A-1 Holder”, in its capacity as the owner of the Note A-12, the “Note A-12
Holder”, in its capacity as the owner of the Note A-14, the “Note A-14 Holder”, and in its capacity
as the owner of the Note A-15, the “Note A-15 Holder”), WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE FOR
THE BENEFIT OF THE REGISTERED HOLDERS OF BANK 2020-BNK30, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2020-BNK30 (“BANK
2020-BNK30” and, together with its successors an assigns in interest, in its capacity as the owner of the Note A-3, the
“Note A-3 Holder”, and in its capacity as the owner of the Note A-6, the “Note A-6 Holder”),
WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE BENEFIT OF THE REGISTERED HOLDERS OF BANK 2021-BNK31, COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATES, SERIES 2021-BNK31 (“BANK 2021-BNK31” and, together with its successors and assigns
in interest, in its capacity as the owner of the Note A-2, the “Note A-2 Holder”, and in its capacity as the
owner of the Note A-7, the “Note A-7 Holder”), WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE BENEFIT
OF THE REGISTERED HOLDERS OF BANK 2021-BNK32, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2021-BNK32 (“BANK
2021-BNK32” and, together with its successors and assigns in interest, in its capacity as the owner of the Note A-4,
the “Note A-4 Holder”, in its capacity as the owner of Note A-8, the “Note A-8 Holder”, in
its capacity as the owner of Note A-10, the “Note A-10 Holder” and in its capacity as the owner of the Note
A-11, the “Note A-11 Holder”), WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE ON BEHALF OF THE REGISTERED
HOLDERS OF CSAIL 2021-C20 COMMERCIAL MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2021-C20 (“CSAIL
2021-C20” and, together with its successors and assigns in interest, in its capacity as the owner of the Note A-5, the
“Note A-5 Holder”, in its capacity as the owner of the Note A-9, the “Note A-9 Holder”, and
in its capacity as the owner of the Note A-13, the “Note A-13 Holder”), and CF MDD HOLDINGS LLC, a Delaware
limited liability company (together with its successors and assigns in interest, the “Note B Holder”). The Note
A-1 Holder, Note A-2 Holder, Note A-3 Holder, Note A-4 Holder, Note A-5 Holder, Note A-6 Holder, Note A-7 Holder, Note A-8 Holder,
Note A-9 Holder, Note A-10 Holder, Note A-11 Holder, Note A-12 Holder, Note A-13 Holder, Note A-14 Holder, and Note A-15 Holder,
are referred to in this Agreement each, as a “Note A Holder” and collectively, as the “Note A Holders”.
The Note A Holders and the Note B Holder are referred to in this Agreement each, as a “Noteholder” and collectively,
as the “Noteholders”.

W I T N E S S E T H:

WHEREAS, pursuant
to the Mortgage Loan Agreement (as defined herein) Bank of America, N.A. originated a certain loan described on the schedule attached
hereto as Exhibit A (the “Mortgage Loan Schedule”) (the “Mortgage Loan”) to the
mortgage loan borrowers described on the Mortgage Loan Schedule (collectively, the “Mortgage Loan Borrower”),
which was originally evidenced, inter alia, by that certain Amended, Restated and Consolidated Renewal and Future Advance
Promissory Note, dated as of February 28, 2020

     

    	 

    

made by the Mortgage Loan Borrower
in favor of BANA, in the original principal amount of $500,000,000 (the “Original Note”) and secured by, with
respect to each Mortgaged Property, that certain first priority Mortgage (or Deed of Trust or Deed to Secure Debt), Assignment
of Leases and Rents and Security Agreement (as amended, modified or supplemented, collectively, the “Mortgage”)
on one or more parcels of, or estates in, real property located as described on the Mortgage Loan Schedule (the “Mortgaged
Property”);

WHEREAS, BANA, then
the sole lender with respect to the Mortgage Loan, agreed, pursuant to a Second Loan Modification Agreement dated April 29, 2020,
to permit the Borrower to defer loan payments due to BANA under the Mortgage Loan for May 2020, June 2020 and July 2020 until the
maturity or earlier repayment of the Mortgage Loan (such payments collectively constituting the “May-July 2020 Deferred Interest
Payment” as defined herein);

WHEREAS, pursuant
to the Fourth Loan Modification Agreement effective of the December 3, 2020, the Original Note was split into the following sixteen
notes, each dated as of December 3, 2020 (as amended, modified or supplemented, each a “Note”), made by the
Mortgage Loan Borrower in favor of the applicable Initial Noteholder, and having the designations and principal balances, as set
forth in the chart below;

WHEREAS, BANA (together
with its successors and assigns in interest, in its capacity as initial owner of the Note A-1, the “Initial Note A-1 Holder”,
in its capacity as initial owner of the Note A-2, the “Initial Note A-2 Holder”, in its capacity as initial
owner of the Note A-3, the “Initial Note A-3 Holder”, in its capacity as initial owner of the Note A-4, the
“Initial Note A-4 Holder”, in its capacity as initial owner of the Note A-5, the “Initial Note A-5
Holder”, in its capacity as initial owner of the Note A-6, the “Initial Note A-6 Holder”, in its capacity
as initial owner of the Note A-7, the “Initial Note A-7 Holder”, in its capacity as initial owner of the Note
A-8, the “Initial Note A-8 Holder”, in its capacity as initial owner of the Note A-9, the “Initial
Note A-9 Holder”, in its capacity as initial owner of the Note A-10, the “Initial Note A-10 Holder”,
in its capacity as initial owner of the Note A-11, the “Initial Note A-11 Holder”, in its capacity as initial
owner of the Note A-12, the “Initial Note A-12 Holder”, in its capacity as initial owner of the Note A-13, the
“Initial Note A-13 Holder”, in its capacity as initial owner of the Note A-14, the “Initial Note A-14
Holder” and in its capacity as initial owner of the Note A-15, the “Initial Note A-15 Holder”, and
together with the Initial Note A-1 Holder, Initial Note A-2 Holder, Initial Note A-3 Holder, Initial Note A-4 Holder, Initial Note
A-5 Holder, Initial Note A-6 Holder, Initial Note A-7 Holder, Initial Note A-8 Holder, Initial Note A-9 Holder, Initial Note A-10
Holder, Initial Note A-11 Holder, Initial Note A-12 Holder, Initial Note A-13 Holder and Initial Note A-14 Holder, the “Initial
Note A Holder”, and in its capacity as the initial agent, the “Initial Agent”) and CF MDD HOLDINGS
LLC, a Delaware limited liability company (together with its successors and assigns in interest, the “Initial Note B Holder”,
and collectively with the Initial Note A Holder, the “Initial Noteholders”) entered into a co-lender agreement,
dated as of December 3, 2020 (the “Original Agreement”), to memorialize the terms under which the Initial Noteholders
would hold Note A-1, Note A-2, Note A-3, Note A-4, Note A-5, Note A-6, Note A-7, Note A-8, Note A-9, Note A-10, Note A-11, Note
A-12, Note A-13, Note A-14, Note A-15 and Note B, respectively;

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WHEREAS, BANA, as
the Initial Note A-3 Holder and the Initial Note A-6 Holder, transferred its right, title and interest in and to Note A-3 and Note
A-6 to Banc of America Merrill Lynch Commercial Mortgage Inc. (“BAMLCM”) pursuant to a Mortgage Loan Purchase
Agreement entered into in connection with the BANK 2020-BNK30, Commercial Mortgage Pass-Through Certificates, Series 2020-BNK30
transaction, between BAMLCM, as purchaser, and the Initial Note A-3 Holder and the Initial Note A-6 Holder, as seller, and BAMLCM
transferred its right, title and interest in and to each of Note A-3 and Note A-6 to Wilmington Trust, as trustee for the benefit
of the registered holders of BANK 2020-BNK30, Commercial Mortgage Pass-Through Certificates, Series 2020-BNK30, under a pooling
and servicing agreement, dated as of December 1, 2020, among BAMLCM, as depositor, Wells Fargo Bank, National Association, as general
master servicer, Greystone Servicing Company LLC, as general special servicer, National Cooperative Bank, N.A., as NCB master servicer
and NCB special servicer, Wilmington Trust, National Association, as trustee, Wells Fargo Bank, National Association, as certificate
administrator, certificate registrar, authenticating agent and custodian, and Park Bridge Lender
Services LLC, as operating advisor and asset representations reviewer;

WHEREAS, BANA, as
the Initial Note A-2 Holder and the Initial Note A-7 Holder, transferred its right, title and interest in and to Note A-2 and Note
A-7 to Wells Fargo Commercial Mortgage Securities, Inc. (“WFCMSI”) pursuant to a Mortgage Loan Purchase Agreement
entered into in connection with the BANK 2021-BNK31, Commercial Mortgage Pass-Through Certificates, Series 2021-BNK31 transaction,
between WFCMSI, as purchaser, and the Initial Note A-2 Holder and the Initial Note A-7 Holder, as seller, and WFCMSI transferred
its right, title and interest in and to each of Note A-2 and Note A-7 to Wilmington Trust, as trustee for the benefit of the registered
holders of BANK 2021-BNK31, Commercial Mortgage Pass-Through Certificates, Series 2021-BNK31, under a pooling and servicing agreement,
dated as of February 1, 2021, among WFCMSI, as depositor, Wells Fargo Bank, National Association, as general master servicer, KeyBank
National Association, as general special servicer, National Cooperative Bank, N.A., as NCB master servicer and as NCB special servicer,
Wells Fargo Bank, National Association, as certificate administrator, Wilmington Trust, National Association, as trustee, and Park
Bridge Lender Services LLC, as operating advisor and as asset representations reviewer;

WHEREAS, BANA, as
the Initial Note A-5 Holder, the Initial Note A-9 Holder and the Initial Note A-13 Holder, sold Note A-5, Note A-9 and Note A-13
to 3650 REIT LOAN FUNDING 1 LLC (“3650 REIT”) in a private transaction concluded on March 1, 2021;

WHEREAS, WHEREAS,
BANA, as the Note A-4 Holder, the Note A-8 Holder, the Note A-10 Holder and the Note A-11 Holder, transferred its right, title
and interest in and to Note A-4, Note A-8, Note A-10 and Note A-11 to Morgan Stanley Mortgage Capital I Inc. (“MSMCI”)
pursuant to a Mortgage Loan Purchase Agreement entered into in connection with the BANK 2021-BNK32, Commercial Mortgage Pass-Through
Certificates, Series 2021-BNK32 transaction, between MSMCI, as purchaser, and the Note A-4 Holder, the Note A-8 Holder, the Note
A-10 Holder and the Note A-11 Holder, as seller, and MSMCI transferred its right, title and interest in and to each of Note A-4,
Note A-8, Note A-10 and Note A-11 to Wilmington Trust, as trustee for the benefit of the registered holders of BANK 2021-BNK32,
Commercial Mortgage

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Pass-Through Certificates, Series 2021-BNK32,
under a pooling and servicing agreement, dated as of March 1, 2021, among MSMCI, as depositor, Wells Fargo Bank, National Association,
as general master servicer, Rialto Capital Advisors, LLC, as general special servicer, National Cooperative Bank, N.A. (“NCB”),
as NCB master servicer and as NCB special servicer, Wells Fargo Bank, National Association, as certificate administrator, Wilmington
Trust, National Association, as trustee (the “Trustee”), and Park Bridge Lender Services LLC, as operating advisor
and as asset representations reviewer;

WHEREAS, 3650 REIT,
as the Note A-5 Holder, the Note A-9 Holder and the Note A-13 Holder, transferred its right, title and interest in and to Note
A-5, Note A-9 and Note A-13 to Credit Suisse Commercial Mortgage Securities Corp. (“CSCMSC”) pursuant to a Mortgage
Loan Purchase Agreement entered into in connection with the CSAIL 2021-C20 Commercial Mortgage Trust, Commercial Mortgage Pass-Through
Certificates, Series 2021-C20 transaction, between CSCMSC, as purchaser, and the Note A-5 Holder, the Note A-9 Holder and the Note
A-13 Holder, as seller, and CSCMSC transferred its right, title and interest in and to each of Note A-5, Note A-9 and Note A-13
to Wells Fargo Bank, National Association, as trustee on behalf of the registered holders of CSAIL 2021-C20 Commercial Mortgage
Trust, Commercial Mortgage Pass-Through Certificates, Series 2021-C20, under a pooling and servicing agreement, dated as of March
1, 2021, among CSCMSC, as depositor, Midland Loan Services, a Division of PNC Bank, National Association, as master servicer, 3650
REIT Loan Servicing LLC, as special servicer, Wells Fargo Bank, National Association, as certificate administrator, Wells Fargo
Bank, National Association, as trustee, and Park Bridge Lender Services LLC, as operating advisor and as asset representations
reviewer;

WHEREAS, as of the
date hereof, the current Holders of each Note are as identified in the chart below (each Note shall be referred to herein by its
“Note Designation” as set forth in the chart below, and the Notes other than Note B shall be referred to herein collectively
as “Note A” or each, individually, a “Note A”);

 

 

	

Note 

Designation	

Initial Noteholder	

Current Noteholder	

Original Principal Balance
	Note A-1	BANA	BANA	$60,000,000
	Note A-2	BANA	BANK 2021-BNK31	$55,000,000
	Note A-3	BANA	BANK 2020-BNK30	$50,000,000
	Note A-4	BANA	BANK 2021-BNK32	$40,000,000
	Note A-5	BANA	CSAIL 2021-C20	$30,000,000
	Note A-6	BANA	BANK 2020-BNK30	$25,000,000
	Note A-7	BANA	BANK 2021-BNK31	$25,000,000
	Note A-8	BANA	BANK 2021-BNK32	$20,000,000
	Note A-9	BANA	CSAIL 2021-C20	$20,000,000
	Note A-10	BANA	BANK 2021-BNK32	$15,000,000
	Note A-11	BANA	BANK 2021-BNK32	$15,000,000

    4 

    	 

    

 

	Note A-12	BANA	BANA	$15,000,000
	Note A-13	BANA	CSAIL 2021-C20	$10,000,000
	Note A-14	BANA	BANA	$10,000,000
	Note A-15	BANA	BANA	$10,000,000
	Note B	CF MDD HOLDINGS LLC	CF MDD HOLDINGS LLC	$100,000,000

WHEREAS, the Noteholders
desire to enter into this Agreement to (a) memorialize the terms under which the Note A Holders and the Note B Holder are holding
each of their respective Notes in the Mortgage Loan, (b) correct the Original Agreement to account for the May-July 2020 Deferred
Interest Payment, and (c) amend, restate and supersede the terms of the Original Agreement;

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

Section 1.               
Definitions. References to a “Section” or the “recitals” are, unless otherwise specified,
to a Section or the recitals of this Agreement. Whenever used in this Agreement, the following terms shall have the respective
meanings set forth below unless the context clearly requires otherwise.

“Acceptable
Insurance Default”  shall have the meaning assigned to such term in (i) prior to the First Securitization, the Model
PSA; or (ii) from and after the First Securitization, the Securitization Servicing Agreement.

“Additional
Servicing Expenses” shall mean (a) all Servicing Advances, fees and/or reasonable, out-of-pocket and customary expenses
incurred by and reimbursable to any Servicer, Trustee or the fiscal agent pursuant to the Servicing Agreement, and (b) all interest
accrued on Advances made by (x) any Servicer, Trustee or the fiscal agent in accordance with the terms of the Servicing Agreement
or (y) any Non-Lead Servicer, Non-Lead Trustee or the fiscal agent in accordance with the terms of the Non-Lead Servicing Agreement;
provided that the aggregate special servicing administration fee (which fee is payable solely during the period that the
Mortgage Loan is a Specially Serviced Loan) shall not exceed an amount equal to 0.25% per annum of the outstanding principal
balance of the Mortgage Loan, the special servicing liquidation fee (or equivalent) shall not exceed 0.5% of the collections made
with respect to the Mortgage Loan or any sums received from proceeds from the disposition of the Mortgaged Property or the Mortgage
Loan, as the case may be, and the special servicing workout fee (or equivalent) shall not exceed 0.5% of the collections made with
respect to the Mortgage Loan while the Mortgage Loan is a performing or “corrected” loan (or such other analogous term
pursuant to the Servicing Agreement).

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“Advance
Interest Amount” shall mean interest payable on Advances, as specified in the Servicing Agreement or Non-Lead Servicing
Agreement, as applicable.

“Advances”
shall have mean any P&I Advance or Servicing Advance.

“Affiliate”
shall mean with respect to any specified Person any other Person that Controls, is Controlled by or under common Control with
such specified Person.

“Agent”
shall mean the Initial Agent or such Person to whom the Initial Agent shall delegate its duties hereunder, and from and after the
First Securitization shall mean the Master Servicer.

“Agent Office”
shall mean the designated office of the Agent, which office, as of the date of this Agreement, is the office of Wells Fargo Commercial
Mortgage Servicing listed under the notice information for the Note A-3 Holder and Note A-6 Holder on Exhibit B hereto,
which is the address to which notices to and correspondence with the Agent should be directed. The Agent may change the address
of its designated office by notice to the Noteholders.

“Agreement”
shall mean this Agreement between Noteholders, the exhibits and schedule hereto and all amendments hereof and supplements hereto.

“Appraisal
Reduction Amount” shall have the meaning assigned to such term or such other analogous term in the Servicing Agreement.

“Appraisal
Review Period” shall have the meaning assigned to such term in Section 5(j)(ii).

“Appraised-Out
Holder” shall have the meaning assigned to such term in Section 5(j)(i).

“Approved
Servicer” shall have the meaning assigned to such term in the definition of “Qualified Institutional Lender”.

“Asset Representations
Reviewer” shall mean the asset representations reviewer appointed pursuant to the Lead Securitization.

“Asset Status
Report” shall have the meaning assigned to such term in (i) prior to the First Securitization, the Model PSA; or (ii)
from and after the First Securitization, the Securitization Servicing Agreement.

“BANA”
shall mean Bank of America, N.A., together with its successors and assigns.

“Balloon
Payment” shall mean the payment of principal and interest payable on the maturity date of the Mortgage Loan by the Mortgage
Loan Borrower under the Mortgage Loan Documents.

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“Bankruptcy
Code” shall mean the United States Bankruptcy Code, as amended from time to time, any successor statute or rule promulgated
thereto.

“Business
Day” shall (i) prior to the First Securitization, mean any day other than (a) a Saturday or Sunday, or (b) a day on which
banking and savings and loan institutions in the State of North Carolina or the State of New York are authorized or obligated by
law, regulation or executive order to be closed; or (ii) on and after the First Securitization, have the meaning assigned to such
term in the Securitization Servicing Agreement or Non-Lead Servicing Agreement, as applicable.

“CDO Asset
Manager” with respect to any Securitization Vehicle which is a CDO, shall mean the entity which is responsible for managing
or administering the Note B as an underlying asset of such Securitization Vehicle or, if applicable, as an asset of any Intervening
Trust Vehicle (including, without limitation, the right to exercise any consent and control rights available to the holder of Note
B).

“Certificate
Administrator” shall mean the certificate administrator appointed pursuant to the Lead Securitization.

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

“Collection
Account” shall mean the trust account or accounts (including any sub-accounts) created and maintained by the Servicer.

“Companion
Distribution Account” shall mean the account established under the Securitization Servicing Agreement to facilitate payments
to Non-Lead Securitization Noteholders.

“Conduit”
shall have the meaning assigned to such term in Section 19(f).

“Conduit
Credit Enhancer” shall have the meaning assigned to such term in Section 19(f).

“Conduit
Inventory Loan” shall have the meaning assigned to such term in Section 19(f).

“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of an
entity, whether through the ability to exercise voting power, by contract or otherwise.

“Control
Appraisal Period” A “Control Appraisal Period” shall exist with respect to the Mortgage Loan, if and for
so long as:

(a)               
(1) the initial Principal Balance of Note B minus (2) the sum (without duplication) of (x) any payments of principal (whether
as principal prepayments or otherwise) allocated to, and received on, the Note B after the date of creation of the Note B, (y)
any Appraisal Reduction Amount for the Mortgage Loan that is allocated to the

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Note B and (z) any losses realized
with respect to any Mortgaged Property or the Mortgage Loan that are allocated to the Note B, is less than

(b)              
25% of the remainder of the (i) initial Principal Balance of Note B less (ii) any payments of principal (whether as principal
prepayments or otherwise) allocated to, and received by, the Note B Holder on the Note B after the date of creation of the Note
B.

“Controlling
Noteholder” shall mean as of any date of determination (i) the Note B Holder, unless a Control Appraisal Period has occurred
and is continuing or (ii) if a Control Appraisal Period has occurred and is continuing, the Note A-1 Holder; provided that
at any time the holder of Note B or Note A-1 is the Controlling Noteholder and such Note is included in the Lead Securitization,
references to the “Controlling Noteholder” herein shall mean the holders of the majority (or such lesser amount as
permitted under the terms of the Servicing Agreement) of the class of securities issued in the Lead Securitization designated as
the “controlling class” or such other class(es) otherwise assigned the rights to exercise the rights of the “Controlling
Noteholder” hereunder, as and to the extent provided in the Servicing Agreement; provided, further, that, if
the Noteholder of the Note B would be the Controlling Noteholder pursuant to the terms hereof, but any interest in the Note B is
held by the Mortgage Loan Borrower or a Mortgage Loan Borrower Related Party, or the Mortgage Loan Borrower or Mortgage Loan Borrower
Related Party would otherwise be entitled to exercise the rights of the Controlling Noteholder, a Control Appraisal Period shall
be deemed to have occurred. As of the date of this Agreement, the Controlling Noteholder is the Initial Note B Holder.

“Controlling
Noteholder Representative” shall have the meaning assigned to such term in Section 6(a).

“Cure Period”
shall have the meaning assigned to such term in Section 11(a).

“DBRS”
shall mean DBRS, Inc., and its successors in interest.

“Defaulted
Loan” shall have the meaning assigned to such term in (i) prior to the First Securitization, the Model PSA; or (ii) from
and after the First Securitization, the Securitization Servicing Agreement.

“Defaulted
Mortgage Loan Purchase Price” shall mean the sum, without duplication, of (a) the Principal Balance of Note A, (b) accrued
and unpaid interest thereon at the Senior Note Rate, from the date as to which interest was last paid in full by Mortgage Loan
Borrower up to and including the end of the interest accrual period relating to the Monthly Payment Date next following the date
the purchase occurred, (c) any other amounts due under the Mortgage Loan, other than Prepayment Premiums, default interest, late
fees, exit fees and any other similar fees, provided that if the Mortgage Loan Borrower or a Mortgage Loan Borrower Related
Party is the purchaser, the Defaulted Mortgage Loan Purchase Price shall include Prepayment Premiums, default interest, late fees,
exit fees and any other similar fees, (d) without duplication of amounts under clause (c), any unreimbursed property
protection or servicing Advances and any reasonable, out-of-pocket expenses incurred in enforcing the Mortgage Loan Documents (including,
without limitation, servicing Advances payable or reimbursable to any Servicer, and earned and unreimbursed special servicing fees
permitted to be

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paid or incurred pursuant to this Agreement),
(e) without duplication of amounts under clause (c), any accrued and unpaid Advance Interest Amount, (f) any amounts
payable in to the Asset Representations Reviewer in respect of the Mortgage Loan, (g) (i) if the Mortgage Loan Borrower or a Mortgage
Loan Borrower Related Party is the purchaser or (ii) if the Mortgage Loan is purchased after ninety (90) days after the first such
option becomes exercisable pursuant to Section 12 of this Agreement, any liquidation or workout fees payable under
the Servicing Agreement with respect to the Mortgage Loan and (h) any Recovered Costs not reimbursed previously to Note A pursuant
to this Agreement. Notwithstanding the foregoing, if the Note B Holder is purchasing from the Mortgage Loan Borrower or a Mortgage
Loan Borrower Related Party, the Defaulted Mortgage Loan Purchase Price shall not include the amounts described under clauses
(d) through (h) of this definition. If the Mortgage Loan is converted into a REO Property, for purposes of determining
the Defaulted Mortgage Loan Purchase Price, interest will be deemed to continue to accrue on Note A at the Senior Note Rate, as
if the Mortgage Loan were not so converted. In no event shall the Defaulted Mortgage Loan Purchase Price include amounts due or
payable to the Note B Holder under this Agreement.

“Defaulted
Note Purchase Date” shall have the meaning assigned to such term in Section 12.

“Default
Interest” shall mean interest on the Mortgage Loan at a rate per annum equal to the Note Default Interest Spread.

“Depositor”
shall mean the depositor under the Securitization Servicing Agreement.

“Directing
Certificateholder” shall have the meaning assigned to such term or such other analogous term in the Servicing Agreement.

“Event of
Default” shall mean, with respect to the Mortgage Loan, an “Event of Default” as defined in the Mortgage
Loan Documents.

“Final Recovery
Determination” shall have the meaning assigned to such term in (i) prior to the First Securitization, the Model PSA;
or (ii) from and after the First Securitization, the Securitization Servicing Agreement.

“First Securitization”
shall mean the BANK 2020-BNK30 securitization described in the recitals, which included Note A-3 and Note A-6.

“First Securitization
Note PSA” shall mean the pooling and servicing agreement entered into in connection with the First Securitization.

“Fitch”
shall mean Fitch, Inc., and its successors in interest.

“Fortress”
shall mean Fortress Investment Group, LLC, a Delaware limited liability company.

“Grace Period”
shall have the meaning assigned to such term in Section 11(a).

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“Guarantor”
shall have the meaning assigned to such term in the Mortgage Loan Documents.

“Indemnified
Items” shall mean, collectively, any claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments
and any other costs, liabilities, fees and expenses incurred in connection with the servicing and administration of the Mortgage
Loan and the Mortgaged Property (or, with respect to the Operating Advisor, incurred in connection with the provision of services
for the Mortgage Loan) under the Servicing Agreement.

“Indemnified
Parties” shall mean, collectively, (i) (as and to the same extent the Lead Securitization Trust is required to indemnify
each of the following parties in respect of other mortgage loans in the Lead Securitization Trust pursuant to the terms of the
Servicing Agreement) each of the Master Servicer, the Special Servicer, the Certificate Administrator, the Trustee, the Operating
Advisor, the Asset Representations Reviewer and the Depositor (and any director, officer, employee or agent of any of the foregoing,
to the extent such parties are identified as indemnified parties in the Securitization Servicing Agreement in respect of other
mortgage loans) and (ii) the Lead Securitization Trust.

“Initial
Agent” shall have the meaning assigned to such term in the preamble to this Agreement.

“Initial
Note Balance” shall mean, with respect to each Note, the principal balance of such Note set forth on the Mortgage Loan
Schedule.

“Initial
Note A Holder” shall have the meaning assigned to such term in the preamble to this Agreement.

“Initial
Note B Holder” shall have the meaning assigned to such term in the preamble to this Agreement.

“Initial
Noteholder” shall mean any of the Initial Note A Holder and/or the Initial Note B Holder.

“Insolvency
Proceeding” shall mean any proceeding under Title 11 of the United States Code (11 U.S.C. Sec. 101 et seq.) or any other
insolvency, liquidation, reorganization or other similar proceeding concerning the Mortgage Loan Borrower, any action for the dissolution
of the Mortgage Loan Borrower, any proceeding (judicial or otherwise) concerning the application of the assets of the Mortgage
Loan Borrower for the benefit of its creditors, the appointment of or any proceeding seeking the appointment of a trustee, receiver
or other similar custodian for all or any substantial part of the assets of the Mortgage Loan Borrower or any other action concerning
the adjustment of the debts of the Mortgage Loan Borrower, the cessation of business by the Mortgage Loan Borrower, except following
a sale, transfer or other disposition of all or substantially all of the assets of the Mortgage Loan Borrower in a transaction
permitted under the Mortgage Loan Documents; provided, however, that following any such permitted transaction affecting
the title to the Mortgaged Property, the Mortgage Loan Borrower for purposes of this Agreement shall be defined to mean the successor
owner of the Mortgaged Property from time to time as may be permitted pursuant to the Mortgage Loan Documents; provided,
further, however, that for the purposes of this definition, in the event that more than

    10 

    	 

    

one entity comprises the Mortgage Loan
Borrower, the term “Mortgage Loan Borrower” shall collectively refer to any such entity or entities.

“Insurance
and Condemnation Proceeds” shall have the meaning assigned to such term or any one or more analogous terms in the Servicing
Agreement.

“Intervening
Trust Vehicle” with respect to any Securitization Vehicle that is a CDO, shall mean a trust vehicle or entity which holds
Note B as collateral securing (in whole or in part) any obligation or security held by such Securitization Vehicle as collateral
for the CDO.

“KBRA”
shall mean Kroll Bond Rating Agency, LLC and its successors in interest.

“Lead Securitization”
shall mean (a) if the First Securitization includes Note A-1, such Securitization, and (b) if the First Securitization does not
include Note A-1, then (i) for the period beginning upon the closing of such First Securitization and ending upon the closing of
the Securitization that includes Note A-1, such First Securitization and (ii) on and after closing of the Securitization that includes
Note A-1, such Securitization.

“Lead Securitization
Note” shall mean (a) if the First Securitization includes Note A-1, such Note, and (b) if the First Securitization does
not include Note A-1, then (i) for the period beginning upon the closing of such First Securitization and ending upon the closing
of the Securitization that includes Note A-1, the Notes included in such First Securitization and (ii) on and after closing of
the Securitization that includes Note A-1, such Note.

“Lead Securitization
Noteholder” shall mean the holder of the Lead Securitization Note.

“Lender”
shall have the meaning assigned to such term in the Mortgage Loan Agreement.

“Liquidation
Proceeds” shall have the meaning assigned to such term in (i) prior to the First Securitization, the Model PSA; or (ii)
from and after the First Securitization, the Securitization Servicing Agreement.

“Lead Securitization
Trust” shall mean the Securitization Trust created in connection with the Lead Securitization.

“MAI”
shall have the meaning assigned to such term in Section 5(j)(i).

“Major Decisions”
shall mean any of the following actions:

(i)           
any proposed or actual foreclosure upon or comparable conversion (which shall include acquisition of REO Property) of the
ownership of the Mortgaged Property after the Mortgage Loan comes into and continues in default;

(ii)           
any modification, consent to a modification or waiver of any monetary term (other than late fees and Default Interest) or
material non-

    11 

    	 

    

monetary term of the Mortgage Loan
Documents (including, without limitation, the timing of payments and acceptance of discounted payoffs and the waiver of any Event
of Default) or any extension of the maturity date other than a one-time extension of up to 120 days in connection with a default
on the stated maturity date if the Mortgage Borrower has delivered to the Servicer a refinancing commitment (or other binding alternative
documentation as is customarily used by commercial real estate lenders for such purpose) or purchase and sale agreement from an
acceptable lender or purchaser, as applicable, and reasonably satisfactory in form and substance to the Servicer that provides
that a refinancing of the Mortgage Loan or sale of the Mortgaged Property (in each case, which would generate sufficient net proceeds
to repay the Mortgage Loan in full) will occur within 120 days after the date on which the Balloon Payment is due;

(iii)           
any sale of the Mortgage Loan, sale of REO Property or bid at a foreclosure sale in respect of the Mortgage Loan (other
than a (x) sale of the Mortgage Loan when it is a Defaulted Loan, (y) sale of REO Property or (z) bid at a foreclosure sale in
respect of the Mortgage Loan, in each case, for an amount equal to or greater than the Purchase Price);

(iv)           
any determination to bring the Mortgaged Property or REO Property into compliance with applicable environmental laws or
to otherwise address hazardous material located at the Mortgaged Property or REO Property;

(v)           
any determination not to enforce a “due-on-sale” or “due–on–encumbrance” clause (unless
such clause is not exercisable under applicable law or such exercise is reasonably likely to result in successful legal action
by the Mortgage Loan Borrower);

(vi)           
any property management company changes, including without limitation, approval of the termination of a manager and appointment
of a new property manager;

(vii)           
any modifications, waivers or amendments to any property management agreement for which the Lender has consent rights under
the Mortgage Loan Documents;

(viii)           
releases of any escrows or reserve accounts other than those required pursuant to the specific terms of the Mortgage Loan
Documents and for which there is no material lender discretion;

(ix)           
any transfer of the Mortgaged Property or any portion thereof, any transfer of any direct or indirect ownership interest
in the Mortgage Loan Borrower, or any acceptance of an assumption agreement or any other agreement permitting a transfer of interests
in the Mortgage Loan Borrower or guarantor releasing the Mortgage Loan Borrower or guarantor from liability, in each case, except
as expressly permitted by the Mortgage Loan Documents and for which no Lender discretion is afforded under the Mortgage Loan Documents;

    12 

    	 

    

(x)           
 any determination of an Acceptable Insurance Default with respect to the Mortgaged Property;

(xi)           
the approval of any Material Lease (as defined in the Mortgage Loan Agreement) or any other Lease (as defined in the Mortgage
Loan Agreement) or any modification, waiver, termination, release, exercise of remedy or otherwise with respect to such Material
Lease or other Lease, in each case to the extent the Lender has an approval right under the Mortgage Loan Agreement;

(xii)           
any incurring of additional debt by the Mortgage Loan Borrower, including the terms of any document evidencing or securing
any such additional debt and of any intercreditor or subordination agreement executed in connection therewith and any waiver of
or amendment or modification to the terms of any such document or agreement or incurring of mezzanine financing by any beneficial
owner of the Mortgage Loan Borrower, including the terms of any document evidencing or securing any such mezzanine debt and of
any intercreditor or subordination agreement executed in connection therewith and any waiver of or amendment or modification to
the terms of any such document or agreement (to the extent Lender’s approval is required by the Mortgage Loan Documents);

(xiii)           
requests for property or other collateral releases or substitutions, other than (A) grants of easements or rights of
way, (B) releases of non-material, non-income producing parcels of the Mortgaged Property, (C) subject to clause (xv),
consents to releases related to condemnation of parcels of the Mortgaged Property, or (D) the release of collateral securing
the Mortgage Loan in connection with defeasance of the collateral for the Mortgage Loan;

(xiv)           
agreeing to any modification, waiver, consent or amendment of the Mortgage Loan in connection with a defeasance if such
proposed modification, waiver, consent or amendment is with respect to (A) a modification of the type of defeasance collateral
required under the Mortgage Loan Documents such that defeasance collateral other than direct, non-callable obligations of the
United States of America would be permitted or (B) a modification that would permit a principal prepayment instead of defeasance
if the applicable loan documents do not otherwise permit such principal prepayment;

(xv)           
consent to actions and releases related to condemnation of parcels of the Mortgaged Property with respect to a material
parcel or a material income producing parcel or any condemnation that materially affects the use or value of the Mortgaged Property
or the ability of the Mortgage Loan Borrower to pay amounts due in respect of the Mortgage Loan when due;

(xvi)           
during an Event of Default, any exercise of remedies, including the acceleration of the Mortgage Loan or initiation of any
proceedings, judicial or otherwise, under the Mortgage Loan Documents;

    13 

    	 

    

(xvii)           
 approval of any waiver regarding the receipt of financial statements (other than immaterial timing waivers including late
financial statements which in no event relieve any borrower of the obligation to provide financial statements on at least a quarterly
basis) following three consecutive late deliveries of financial statements;

(xviii)           
the voting on any plan of reorganization, restructuring or similar plan in the bankruptcy of the Mortgage Loan Borrower;

(xix)           
solely to the extent of the Lender’s consent and/or approval rights (if any) under the Mortgage Loan Documents, any
modification or consent to a modification of, or any action with respect to (i) a Reciprocal Easement Agreement or (ii) any modifications
to the current version of the Amended Development Agreement provided to the Note B Holder on or about the date hereof (which version,
for the avoidance of doubt, has already been approved by the Lender), or (iii) any action which requires Lender’s approval
pursuant to Sections 5.1.25 of the Mortgage Loan Agreement;

(xx)           
approval of annual budgets (to the extent Lender approval is required); and

(xxi)           
consenting to any zoning reclassification of any portion of the Property to the extent that Lender has the right to consent
pursuant to the Loan Documents;

provided, however, that
upon the occurrence and during the continuance of a Control Appraisal Period, “Major Decision” shall have the meaning
given to such term in the Servicing Agreement.

“Master Servicer”
shall mean the master servicer appointed pursuant to the Lead Securitization.

“May-July
2020 Deferred Interest Payment” shall mean the aggregate amount owed by the Borrower in respect of each Debt Service
Payment Amount (as defined in the Mortgage Loan Agreement) due on the Payment Date (as defined in the Mortgage Loan Agreement)
occurring in each of May, June and July 2020, which amount was deferred for payment until the maturity of the Mortgage Loan pursuant
to the Second Loan Modification Agreement, dated April 29, 2020, between BANA and the Borrower. The amount of the May-July 2020
Deferred Interest Payment is $5,223,020.83.

“Model PSA”
shall mean the pooling and servicing agreement for the BANK 2019-BNK24 securitization.

“Monetary
Default” shall have the meaning assigned to such term in Section 11(a).

    14 

    	 

    

“Monetary
Default Notice” shall have the meaning assigned to such term in Section 11(a).

“Monthly
Payment” shall mean have the meaning assigned to such term in the Servicing Agreement.

“Monthly
Payment Date” shall mean the Payment Date (as defined in the Mortgage Loan Documents).

“Moody’s”
shall mean Moody’s Investors Service, Inc., and its successors in interest.

“Morningstar”
shall mean Morningstar Credit Ratings, LLC, and its successors in interest.

“Mortgage”
shall have the meaning assigned to such term in the recitals.

“Mortgaged
Property” shall have the meaning assigned to such term in the recitals.

“Mortgage
Loan” shall have the meaning assigned to such term in the recitals.

“Mortgage
Loan Agreement” shall mean the loan agreement, dated as of February 28, 2020, between the Mortgage Loan Borrower and
Bank of America, N.A., as lender, as modified by the (i) Loan Agreement Modification Agreement, effective as of March 1, 2020,
(ii) Second Loan Modification Agreement, effective as of April 29, 2020, (iii) Third Loan Modification Agreement, effective as
of October 8, 2020, and (iv) Fourth Loan Modification Agreement, effective as of December 3, 2020, and as the same may be amended,
restated, renewed, extended, modified or supplemented from time to time, subject to the terms hereof.

“Mortgage
Loan Borrower” shall have the meaning assigned to such term in the recitals.

“Mortgage
Loan Borrower Related Party” shall have the meaning assigned to such term in Section 18.

“Mortgage
Loan Documents” shall mean, with respect to the Mortgage Loan, the Mortgage, the Note(s) and all other documents now
or hereafter evidencing and securing or guaranteeing the Mortgage Loan.

“Mortgage
Loan Rate” shall mean, as of any date of determination, the weighted average of the Senior Note Rate and the Note B Rate.

“Mortgage
Loan Schedule” shall mean the Schedule attached hereto as Exhibit A.

“Net Note
B Rate” shall mean the Note B Rate minus the Servicing Fee Rate applicable to Note B.

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“Net Senior
Note Rate” shall mean, with respect to each Senior Note, the Senior Note Rate minus the Servicing Fee Rate applicable
to such Senior Note.

“New Notes”
shall have the meaning assigned to such term in Section 39.

“Non-Controlling
Class Representative” shall mean the holders of the majority of the class of securities issued in the Securitization
of the Non-Lead Securitization Note designated as the “controlling class” pursuant to the Non-Lead Servicing Agreement
or their duly appointed representative; provided that if 50% or more of the class of securities issued in the Non-Lead Securitization
designated as the “controlling class” or such other class(es) otherwise assigned the rights to exercise the rights
of the “Controlling Noteholder” is held by the Mortgage Loan Borrower or an Affiliate of the Mortgage Loan Borrower,
no person shall be entitled to exercise the rights of the Non-Controlling Class Representative.

“Non-Controlling
Note” shall mean the interest of the Non-Controlling Noteholder in its Note.

“Non-Controlling
Noteholder” means holder of a Note, other than the Controlling Note, including any New Note designated a “Non-Controlling
Note” hereunder pursuant to Section 39; provided that at any time any such related Notes are included in a
Securitization, references to the “Non-Controlling Noteholder” herein shall mean the “Directing Certificateholder”,
“Directing Holder”, “Controlling Class Representative” or any other party assigned the rights to exercise
the rights of the “Non-Controlling Noteholder”, as and to the extent provided in the related Non-Lead Servicing Agreement
and as to the identity of which the Lead Securitization Noteholder (and the Master Servicer and the Special Servicer) has been
given written notice; provided that, in each case, if at any time 50% or more of the related Note is held by the Mortgage
Loan Borrower or an Affiliate of the Mortgage Loan Borrower, no person shall be entitled to exercise the rights of the applicable
Non-Controlling Noteholder. With respect to any individual Non-Controlling Note, the Lead Securitization Noteholder (or the Master
Servicer or the Special Servicer acting on its behalf) shall not be required at any time to deal with more than one party exercising
the rights of the “Non-Controlling Noteholder” herein or under the Servicing Agreement and, (x) to the extent that
the related Non-Lead Servicing Agreement assigns such rights to more than one party or (y) to the extent the related Note is split
into two or more New Notes pursuant to Section 39 and notice thereof is not provided to the Lead Securitization Noteholder
(or, if applicable, the Master Servicer or the Special Servicer acting on its behalf), for purposes of this Agreement, the Non-Lead
Servicing Agreement or the holders of such New Notes shall designate one party with respect to each Non-Controlling Note to deal
with the Lead Securitization Noteholder (or the Master Servicer or the Special Servicer acting on its behalf) and provide written
notice of such designation to the Lead Securitization Noteholder (and the Master Servicer and the Special Servicer acting on its
behalf); provided that, in the absence of such designation and notice, the Lead Securitization Noteholder (or the Master
Servicer or the Special Servicer acting on its behalf) shall be entitled to treat the last party as to which it has received written
notice as having been designated as the Non-Controlling Noteholder, as the Non-Controlling Noteholder for all purposes of this
Agreement.

“Non-Exempt
Person” shall mean any Person other than a Person who is either (i) a U.S. Person or (ii) has on file with the Agent
for the relevant year such duly-executed form(s)

    16 

    	 

    

or statement(s) which may, from time
to time, be prescribed by law and which, pursuant to applicable provisions of (A) any income tax treaty between the United States
and the country of residence of such Person, (B) the Code or (C) any applicable rules or regulations in effect under clauses
(A) or (B) above, permit the Servicer on behalf of the Noteholders make such payments free of any obligation or liability
for withholding.

“Non-Lead
Depositor” shall mean, with respect to each Non-Lead Securitization Note, the “depositor” under the related
Non-Lead Servicing Agreement.

“Non-Lead
Master Servicer” shall mean, with respect to each Non-Lead Securitization Note, the “master servicer”
under the related Non-Lead Servicing Agreement.

“Non-Lead
Operating Advisor” shall mean, with respect to each Non-Lead Securitization Note, the “trust advisor”,
“operating advisor” or other analogous term under the related Non-Lead Servicing Agreement.

“Non-Lead
Securitization Note” shall mean each Senior Note included in a securitization, other than the Lead Securitization Note
and any other Senior Note included in the same securitization as the Lead Securitization Note.

“Non-Lead
Securitization Noteholder” shall mean any holder of a Non-Lead Securitization Note.

“Non-Lead
Servicing Agreement” shall mean, with respect to each Non-Lead Securitization Note, the related pooling and servicing
agreement pursuant to which the related Non-Lead Securitization Trust is formed.

“Non-Lead
Securitization Trust” shall mean the Securitization Trust into which a Non-Lead Securitization Note is deposited.

“Non-Lead
Servicer” shall mean, with respect to each Non-Lead Securitization Note, the related Non-Lead Master Servicer or Non-Lead
Special Servicer, as applicable.

“Non-Lead
Special Servicer” shall mean, with respect to each Non-Lead Securitization Note, the “special servicer” under
the related Non-Lead Servicing Agreement.

“Non-Lead
Trustee” shall mean, with respect to each Non-Lead Securitization Note, the “trustee” under the related Non-Lead
Servicing Agreement.

“Non-Monetary
Default” shall have the meaning assigned to such term in Section 11(d).

“Non-Monetary
Default Cure Period” shall have the meaning assigned to such term in Section 11(d).

“Non-Monetary
Default Notice” shall have the meaning assigned to such term in Section 11(d).

    17 

    	 

    

“Nonrecoverable
Servicing Advance” shall have the meaning assigned to such term in (i) prior to the First Securitization, the Model PSA;
or (ii) from and after the First Securitization, the Securitization Servicing Agreement.

“Noteholder”
shall mean any holder of a Note.

“Noteholder
Purchase Notice” has the meaning assigned to such term in Section 12.

“Note”
shall mean any of the promissory notes described in the recitals and identified on Exhibit A hereto.

“Note A”
shall have the meaning assigned to such term in the recitals.

“Note A Holder”
each person identified in the recitals as a holder of a Note A, or any subsequent holder of a Note A, together with its successors
and assigns.

“Note B”
shall have the meaning assigned to such term in the recitals.

“Note B Holder”
shall mean the Initial Note B Holder, and its successors in interest, or any subsequent holder of Note B.

“Note B Default
Rate” shall mean a rate per annum equal to the Note B Rate plus the Note Default Interest Spread.

“Note B Rate”
shall mean the Note B Rate set forth on the Mortgage Loan Schedule.

“Note Default
Interest Spread” shall mean a rate per annum equal to three percent (3.0%); provided, however, that
if the weighted average of the Senior Note Default Rate and the Note B Default Rate would exceed the maximum rate permitted by
applicable law, the note default interest spread shall equal (i) the rate at which the weighted average of the Senior Note Default
Rate and the Note B Default Rate equals the maximum rate permitted by applicable law minus (ii) the Mortgage Loan Rate.

“Note Pledgee”
shall have the meaning assigned to such term in Section 19(e).

“Note Rate”
shall mean any of the Senior Note Rate and the Note B Rate, as applicable.

“Note Register”
shall have the meaning assigned to such term in Section 21.

“Operating
Advisor” shall mean the master servicer appointed pursuant to the Lead Securitization.

“P&I
Advance” shall mean an advance made by (a) a party to the Servicing Agreement in respect of a delinquent monthly debt
service payment on the Lead Securitization

    18 

    	 

    

Note or (b) a party to the Non-Lead
Servicing Agreement in respect of a delinquent monthly debt service payment on the Non-Lead Securitization Note.

“Penalty
Charges” shall mean any amounts actually collected on the Mortgage Loan that represent late payment charges or Default
Interest.

“Percentage
Interest” shall mean, with respect to each Note, a fraction, expressed as a percentage, the numerator of which is the
Principal Balance of such Note and the denominator of which is the sum of the Principal Balances of each Note; provided
that solely for purposes of Section 3(b), “Percentage Interest” shall mean with respect to each Note A, a fraction,
expressed as a percentage, the numerator of which is the Principal Balance of such Note and the denominator of which is the sum
of the Principal Balances of each Note A.

“Permitted
Fund Manager” shall mean any Person that on the date of determination is (i) one of the entities on Exhibit C
attached hereto and made a part hereof or any other nationally-recognized manager of investment funds investing in debt or equity
interests relating to commercial real estate, (ii) investing through a fund with committed capital of at least $500,000,000
and (iii) not subject to a proceeding relating to the bankruptcy, insolvency, reorganization or relief of debtors.

“Person”
shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political subdivision thereof.

“Pledge”
shall have the meaning assigned to such term in Section 19(e).

“Prepayment
Premium” shall mean, with respect to the Mortgage Loan, any prepayment premium, spread maintenance premium, yield maintenance
premium or similar fee required to be paid in connection with a prepayment of the Mortgage Loan pursuant to the Mortgage Loan Documents,
including any exit fee.

“Principal
Balance” shall mean, with respect to each Note, at any time of determination, the related Initial Note Balance, less
any payments of principal thereon received by the related holder of such Note or reductions in the Initial Note Balance pursuant
to Sections 3, 4 or 5, as applicable.

“Pro Rata
and Pari Passu Basis” shall mean with respect to each Note A and the related Noteholders, the allocation of any particular
payment, collection, cost, expense, liability or other amount between such Notes or such Noteholders, as the case may be, without
any priority of any such Note or any such Noteholder over another such Note or Noteholder, as the case may be, and in any event
such that each Note or Noteholder, as the case may be, is allocated its respective Percentage Interest of such particular payment,
collection, cost, expense, liability or other amount.

“Purchase
Price” shall have the meaning assigned to such term in (i) prior to the First Securitization, the Model PSA; or (ii)
from and after the First Securitization, the Securitization Servicing Agreement.

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“Qualified
Institutional Lender” shall mean BANA, Fortress and any other U.S. Person that is:

(a)               
(x) an entity Controlled (as defined herein) by, under common Control with or that Controls BANA, or (Y) an entity Controlled
by, under common Control with or that Controls Fortress, or

(b)              
the trustee on behalf of the trust certificates issued pursuant to a master trust agreement involving a CDO comprised of,
or other securitization vehicle involving, assets deposited or transferred by a Noteholder and/or one or more Affiliates (whether
with assets from others or not), provided that the securities issued in connection with such CDO or other securitization
vehicle are rated by one or more Rating Agencies that assigned a rating to one or more classes of securities issued in connection
with the Lead Securitization, or

(c)               
one or more of the following:

(i)           
an insurance company, bank, savings and loan association, investment bank, trust company, commercial credit corporation,
pension plan, pension fund, pension fund advisory firm, mutual fund, real estate investment trust, governmental entity or plan,
or

(ii)           
an investment company, money management firm or a “qualified institutional buyer” within the meaning of Rule
144A under the Securities Act of 1933, as amended, or an “accredited investor” within the meaning of Rule 501(a) (1),
(2), (3) or (7) of Regulation D under the Securities Act of 1933, as amended, or

(iii)           
a Qualified Trustee in connection with (a) the securitization of, (b) the creation of collateralized debt obligations
(“CDO”) secured by, or (c) a financing through an “owner trust” of, a Note or any interest
therein (any of the foregoing, a “Securitization Vehicle”), provided that (1) one or more classes of securities
issued by such Securitization Vehicle is initially rated at least investment grade by each of the Rating Agencies that assigned
a rating to one or more classes of securities issued in connection with such Securitization; (2) in the case of a Securitization
Vehicle that is not a CDO, the special servicer of such Securitization Vehicle has a Required Special Servicer Rating or is otherwise
acceptable to the Rating Agencies rating each Securitization (such entity, an “Approved Servicer”) and such
Approved Servicer is required to service and administer such Note or any interest therein in accordance with servicing arrangements
for the assets held by the Securitization Vehicle which require that such Approved Servicer act in accordance with a servicing
standard notwithstanding any contrary direction or instruction from any other Person; or (3) in the case of a Securitization
Vehicle that is a CDO, the CDO Asset Manager and, if applicable, each Intervening Trust Vehicle that is not administered and managed
by a CDO Asset Manager which is a Qualified Institutional Lender, are

    20 

    	 

    

each a Qualified Institutional Lender
under clauses (i), (ii), (iv) or (v) of this definition, or

(iv)           
an investment fund, limited liability company, limited partnership or general partnership having capital and/or capital
commitments of at least $250,000,000, in which (A) any Initial Noteholder, (B) a person that is otherwise a Qualified Institutional
Lender under clause (i), (ii) or (v) (with respect to an institution substantially similar to the entities
referred to in clause (i) or (ii) above), or (C) a Permitted Fund Manager, acts as a general partner, managing
member, or the fund manager responsible for the day-to-day management and operation of such investment vehicle and provided that
at least 50% of the equity interests in such investment vehicle are owned, directly or indirectly, by one or more entities that
are otherwise Qualified Institutional Lenders (without regard to the capital surplus/equity and total asset requirements set forth
below in the definition), or

(v)           
an institution substantially similar to any of the foregoing, and

in the case
of any entity referred to in clause (c)(i), (ii), (iv)(B) or (v) of this definition, (x) such
entity has at least $200,000,000 in capital/statutory surplus or shareholders’ equity including uncalled capital commitments
(except with respect to a pension advisory firm, asset manager or similar fiduciary) and at least $600,000,000 in total assets
including uncalled capital commitments (in name or under management), and (y) is regularly engaged in the business of making
or owning commercial real estate loans (or interests therein) similar to the Mortgage Loan (or mezzanine loans with respect thereto)
or owning or operating commercial real estate properties; provided that, in the case of the entity described in clause (iv)(B)
above, the requirements of this clause (y) may be satisfied by a general partner, managing member, or the fund manager
responsible for the day-to-day management and operation of such entity; or

(d)              
any entity Controlled by one or more of the entities described in clause (c)(i), (ii), (iv)(B)
or (v) above or approved by the Rating Agencies hereunder as a Qualified Institutional Lender for purposes of this Agreement,
or as to which the Rating Agencies have stated they would not review such entity in connection with the subject transfer.

For purposes of this
definition only, “Control” means the ownership, directly or indirectly, in the aggregate of more than fifty
percent (50%) of the beneficial ownership interests of an entity and the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of an entity, whether through the ability to exercise voting power, by contract
or otherwise (“Controlled” and “Controlling” have the meaning correlative thereto).

“Qualified
Trustee” means (i) a corporation, national bank, national banking association or a trust company, organized and doing
business under the laws of any state or the United States of America, authorized under such laws to exercise corporate trust powers
and to accept the trust conferred, having a combined capital and surplus of at least $100,000,000 and

    21 

    	 

    

subject to supervision or examination
by federal or state authority, (ii) an institution insured by the Federal Deposit Insurance Corporation or (iii) an institution
whose long-term senior unsecured debt is rated either of the then in effect top two rating categories of each of the applicable
Rating Agencies.

“Rating Agencies”
shall mean DBRS, Fitch, KBRA, Moody’s, Morningstar and S&P and their respective successors in interest or, if any of
such entities shall for any reason no longer perform the functions of a securities rating agency, any other nationally recognized
statistical rating agency reasonably designated by the Depositor or Non-Lead Depositor to rate the securities issued in connection
with the Securitization of a Senior Note, as applicable; provided, however, that, at any time during which any Note
A is an asset of one or more Securitizations, “Rating Agencies” or “Rating Agency” shall mean with respect
to each Note, only those rating agencies that are engaged by the Depositor or Non-Lead Depositor, as applicable, from time to time
to rate the securities issued in connection with the Securitization of such Note.

“Rating Agency
Confirmation” shall have the meaning given thereto or any analogous term in the Servicing Agreement or Non-Lead Servicing
Agreement, as applicable, including any deemed or waived Rating Agency Confirmation.

“Recovered
Costs” shall mean any amounts referred to in clauses (d) and/or (e) of the definition of “Defaulted
Mortgage Loan Purchase Price” that, at the time of determination, had been previously paid or reimbursed to any Servicer
from sources other than collections on or in respect of the Mortgage Loan or the Mortgaged Property (including, without limitation,
from collections on or in respect of loans other than the Mortgage Loan).

“Redirection
Notice” shall have the meaning assigned to such term in Section 19(e).

“Relative
Spread” shall mean, with respect to each Note, the ratio of the related Note Rate to the Mortgage Loan Rate.

“REMIC”
shall mean a real estate mortgage investment conduit within the meaning of Section 860D(a) of the Code.

“REMIC Provisions”
shall mean provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of subchapter M of Chapter 1 of the Code, and related provisions, and regulations (including any applicable proposed
regulations) and rulings promulgated thereunder, as the foregoing may be in effect from time to time.

“Required
Special Servicer Rating” shall mean with respect to a special servicer (i) in the case of Fitch, a rating of “CSS3”,
(ii) in the case of S&P, such special servicer is on S&P’s Select Servicer List as a U.S. Commercial Mortgage Special
Servicer, (iii) in the case of Moody’s, such special servicer is acting as special servicer for one or more loans included
in a commercial mortgage loan securitization that was rated by Moody’s within the twelve (12) month period prior to the date
of determination, and Moody’s has not downgraded or withdrawn the then-current rating on any class of commercial mortgage
securities or placed any class of

    22 

    	 

    

commercial mortgage securities on watch
citing the continuation of such special servicer as special servicer of such commercial mortgage loans, (iv) in the case of Morningstar,
(a) such special servicer is acting as special servicer in a commercial mortgage loan securitization that was rated by a Rating
Agency within the twelve (12) month period prior to the date of determination and (b) Morningstar has not qualified, downgraded
or withdrawn the then-current rating or ratings of one or more classes of CMBS certificates citing servicing concerns with the
special servicer as the sole or material factor in such rating action, (v) in the case of DBRS, (a) such special servicer is acting
as special servicer in a commercial mortgage loan securitization that was rated by a Rating Agency within the twelve (12) month
period prior to the date of determination and (b) DBRS has not qualified, downgraded or withdrawn the then-current rating or ratings
of one or more classes of CMBS certificates citing servicing concerns with the special servicer as the sole or material factor
in such rating action, and (vi) in the case of KBRA, KBRA has not cited servicing concerns of such special servicer as the sole
or material factor in any qualification, downgrade or withdrawal of the ratings (or placement on “watch status” in
contemplation of a ratings downgrade or withdrawal) of securities in a transaction serviced by such special servicer prior to the
time of determination.

“REO Property”
shall mean the Mortgaged Property after the Servicer has foreclosed on the Mortgaged Property or accepted a deed in lieu of foreclosure.

“Risk Retention
Requirements” shall mean the credit risk retention requirements of Section 15G of the Exchange Act (15 U.S.C. §78o-11),
as added by Section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. “Risk Retention Requirements”
shall mean the credit risk retention requirements of Section 15G of the Exchange Act (15 U.S.C. §78o-11), as added by Section
941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

“Risk Retention
Rules” shall mean the joint final rule that was promulgated to implement the Risk Retention Requirements (which such
joint final rule has been codified, inter alia, at 17 C.F.R. § 244), as such rule may be amended from time to time, and subject
to such clarification and interpretation as have been provided by the Office of the Comptroller of the Currency, the Board of Governors
of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Commission and
the Department of Housing and Urban Development in the adopting release (79 Fed. Reg. 77601 et seq.) or by the staff of any such
agency, or as may be provided by any such agency or its staff from time to time, in each case, as effective from time to time as
of the applicable compliance date specified therein.

“S&P”
shall mean Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, and its
successors in interest.

“Securitization”
shall mean one or more sales by the holder of a Note of all or a portion of such Note to a depositor, who will in turn include
such portion of such Note as part of a securitization of one or more mortgage loans.

“Securitization
Date” shall mean the effective date on which the Securitization of the Note A-1 or a portion thereof is consummated.

    23 

    	 

    

“Securitization
Servicing Agreement” shall mean, as of any date of determination, the pooling and servicing agreement that governs the
Securitization that is then the Lead Securitization; provided that during any period that the Mortgage Loan is no longer
subject to the provisions of the Securitization Servicing Agreement, the “Securitization Servicing Agreement” shall
be determined in accordance with the second paragraph of Section 2(a).

“Securitization
Trust” shall mean a trust formed pursuant to a Securitization pursuant to which Note A is held.

“Senior Note”
shall mean each Note, other than Note B.

“Senior Noteholder”
shall mean the holder of a Senior Note.

“Senior Note
Default Rate” shall mean a rate per annum equal to the Senior Note Rate plus the Note Default Interest Spread.

“Senior Note
Rate” shall mean, with respect to each Senior Note, the Senior Note Rate set forth on the Mortgage Loan Schedule.

“Sequential
Pay Event” shall mean any Event of Default with respect to an obligation to pay money due under the Mortgage Loan, any
other Event of Default for which the Mortgage Loan is actually accelerated or any other Event of Default which causes the Mortgage
Loan to become a Specially Serviced Loan, or any bankruptcy or insolvency event that constitutes an Event of Default; provided,
however, that unless the Servicer under the Servicing Agreement has notice or knowledge of such event at least ten (10)
Business Days prior to the applicable distribution date, distributions will be made sequentially beginning on the subsequent distribution
date; provided, further, that the aforementioned requirement of notice or knowledge will not apply in the case of
distribution of the final proceeds of a liquidation or final disposition of the Mortgage Loan. A Sequential Pay Event shall no
longer exist to the extent it has been cured (including any cure payment made by the Note B Holder (unless a Control Appraisal
Period has occurred and is continuing) in accordance with Section 11) and shall not be deemed to exist to the extent
the Note B Holder is exercising its cure rights under Section 11.

“Servicer”
shall mean the Master Servicer or the Special Servicer, as the context may require.

“Servicing
Advance” shall have the meaning given thereto in the Servicing Agreement.

“Servicing
Agreement” shall mean, with respect to the Mortgage Loan, prior to the First Securitization, the interim servicing agreement
utilized by the Note A-1 Holder, and, from and after the First Securitization, the Securitization Servicing Agreement, together
with any amendment, restatement, supplement, replacement or modification thereto entered into in accordance with the terms hereof
and thereof.

“Servicing
Fee Rate” shall mean (a) prior to the First Securitization, 0.00500% per annum, and (b) on and after the First
Securitization, the rate set forth in the Securitization Servicing Agreement and/or Non-Lead Servicing Agreement, as applicable,
(i) with respect to

    24 

    	 

    

each Note A, which shall not exceed
0.00500% per annum; and (ii) with respect to Note B, which shall not exceed 0.00250% per annum.

“Servicing
Standard” shall have the meaning assigned to such term in (i) prior to the First Securitization, the Model PSA; or (ii)
from and after the First Securitization, the Securitization Servicing Agreement.

“Servicing
Transfer Event” shall have the meaning assigned to such term in (i) prior to the First Securitization, the Model PSA;
or (ii) from and after the First Securitization, the Securitization Servicing Agreement.

“Special
Servicer” shall mean the special servicer appointed pursuant to the Lead Securitization.

“Special
Servicing Fees” shall have the meaning assigned to such term in the Securitization Servicing Agreement.

“Specially
Serviced Loan” shall have the meaning assigned to such term (or an analogous term) in (i) prior to the First Securitization,
the Model PSA; or (ii) from and after the First Securitization, the Securitization Servicing Agreement.

“Taxes”
shall mean any income or other taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature, now or hereafter
imposed by any jurisdiction or by any department, agency, state or other political subdivision thereof or therein.

“Threshold
Event Collateral” shall have the meaning assigned to such term in Section 5(h).

“Threshold
Event Cure” shall have the meaning assigned to such term in Section 5(h).

“Transfer”
shall mean any sale, assignment, transfer, pledge, syndication, participation, hypothecation, contribution, encumbrance or other
disposition (either (i) directly or (ii) indirectly through entering into a derivatives contract, excluding a repo financing
or a Pledge in accordance with Section 19(e)). For the avoidance of doubt, Transfer shall not include any direct or
indirect interest in a Noteholder.

“Trustee”
shall mean the trustee appointed pursuant to the Lead Securitization.

“U.S. Person”
shall mean a citizen or resident of the United States, a corporation or partnership (except to the extent provided in applicable
Treasury Regulations) created or organized in or under the laws of the United States, any State thereof or the District of Columbia,
including any entity treated as a corporation or partnership for federal income tax purposes, or an estate whose income is subject
to United States federal income tax regardless of its source, or a trust if a court within the United States is able to exercise
primary supervision over the administration of such trust, and one or more such U.S. Persons have the authority to control all
substantial decisions of such trust (or, to the extent provided in applicable Treasury Regulations, a trust in existence on August 20,
1996 that is eligible to elect to be treated as a U.S. Person).

    25 

    	 

    

“Workout”
shall mean any written modification, waiver, amendment, restructuring or workout of the Mortgage Loan or the Note entered into
with the Mortgage Loan Borrower in accordance with the Servicing Agreement, in each case, after the declaration of an Event of
Default or after any other event that would constitute a “Servicing Transfer Event” under the Model PSA, prior to the
First Securitization, or the Securitization Servicing Agreement, after the First Securitization.

“Workout
Fees” shall have the meaning assigned to such term in the Securitization Servicing Agreement.

“Whole Loan
Custodial Account” shall mean the custodial account or subaccount established for the Mortgage Loan pursuant to the Servicing
Agreement.

Section 2.               
Servicing.

(a)               
Each Noteholder acknowledges and agrees that, subject in each case to the terms of this Agreement, the Mortgage Loan shall
be serviced prior to the First Securitization under interim servicing arrangements as directed by the Note A-1 Holder and from
and after the First Securitization (except as otherwise set forth in Section 5(b)), pursuant to the Securitization
Servicing Agreement; provided that the Master Servicer shall not be obligated to advance monthly payments of principal or interest
in respect of the Notes other than the Notes included in the Lead Securitization (and each Non-Lead Master Servicer shall be required
to advance monthly payments of principal and interest on the applicable Non-Lead Securitization Note pursuant to the terms of the
related Non-Lead Servicing Agreement) if such principal or interest is not paid by the Mortgage Loan Borrower but shall be obligated
to advance delinquent real estate taxes, insurance premiums and other expenses related to the maintenance of the Mortgaged Property
and maintenance and enforcement of the lien of the Mortgage thereon, subject to the terms of the Securitization Servicing Agreement.
The Note B Holder acknowledges that each Senior Noteholder may elect, in its sole discretion, to include the related Senior Note
in a Securitization and agrees that it will, subject to Section 24, reasonably cooperate with such Noteholder, at such
Senior Noteholder’s sole cost and expense, to effect such Securitization. Subject to the terms and conditions of this Agreement,
each Noteholder hereby irrevocably and unconditionally consents to the appointment of the Master Servicer, Special Servicer and
the Trustee under the Securitization Servicing Agreement by the Depositor and agrees to reasonably cooperate with the Master Servicer
and the Special Servicer with respect to the servicing of the Mortgage Loan in accordance with this Agreement and the Securitization
Servicing Agreement. Each Noteholder hereby irrevocably appoints the Master Servicer, the Special Servicer and the Trustee in the
Securitization as such Noteholder’s attorney-in-fact to sign any documents reasonably required with respect to the administration
and servicing of the Mortgage Loan on its behalf under the Securitization Servicing Agreement (subject at all times to the rights
of the Noteholder set forth herein and in the Servicing Agreement). In no event shall the Servicing Agreement require the Servicer
to enforce the rights of any Noteholder or limit the Servicer in enforcing the rights of one Noteholder against the other Noteholder;
however, this statement shall not be construed to otherwise limit the rights of one Noteholder with respect to the other Noteholder.

    26 

    	 

    

(b)              
 In no event shall the Note B Holder be entitled to exercise any rights of the “directing certificateholder”,
“directing holder”, “controlling class representative” or any analogous class or holder under the Securitization
Servicing Agreement except to the extent the Note B Holder is given such rights expressly under the terms of this Agreement or
the Servicing Agreement in its capacity as the Controlling Noteholder.

(c)               
[INTENTIONALLY OMITTED]

(d)              
The Securitization Servicing Agreement shall (1) afford similar rights to Non-Lead Securitization Noteholders as the rights
afforded to companion noteholders under the Model PSA and (2) afford the Note B Holder the same rights, privileges and remedies
afforded to the Note B Holder hereunder (including (x) amounts payable to Note B Holder, (y) those in its capacity as Controlling
Noteholder, and (z) those that are set forth in the Model PSA and incorporated or referred to herein), in each case, subject to
minor variations that shall not adversely affect in more than a de minimis manner such Noteholders, and shall contain, among
other things, provisions to the effect that:

(i)           
any payments received on the Mortgage Loan shall be paid by the Master Servicer to each of the other Noteholders on the
“master servicer remittance date” under the Securitization Servicing Agreement;

(ii)           
the Note B Holder shall be entitled to receive, and the Master Servicer and the Special Servicer shall provide access to,
any information, relating to the Mortgage Loan, the Mortgage Loan Borrower or the Mortgaged Property as such Person may reasonably
request and in the possession of, or collected or known by, the Master Servicer or Special Servicer relating to the Mortgage Loan
and, in any event, all information that is required to be provided to the “Directing Certificateholder” or analogous
term under the Securitization Servicing Agreement but not limited to standard CREFC® reports, provided that if an
interest in Note B or the Note B Holder is held by the Mortgage Loan Borrower or a Mortgage Loan Borrower Related Party, then the
Note B Holder shall not be entitled to receive the Asset Status Report or any other information relating to the Special Servicer’s
workout strategy or any “Excluded Information” or analogous term under the Securitization Servicing Agreement;

(iii)           
each Noteholder is an intended third party beneficiary in respect of the rights afforded it under the Securitization Servicing
Agreement and may directly enforce such rights; and

(iv)           
the Securitization Servicing Agreement may not be amended without the consent of the Note B Holder if such amendment would
adversely affect in more than a de minimis manner the Mortgage Loan or the Note B Holder’s rights with respect thereto
(including (x) amounts payable to Note B Holder, (y) those in its capacity as Controlling Noteholder, and (z) those that are set
forth in the Model PSA and incorporated or referred to herein).

    27 

    	 

    

(e)               
 Notwithstanding anything to the contrary contained in this Agreement, any obligation of the Servicer pursuant to the terms
hereof shall be performed by the Master Servicer or the Special Servicer, as applicable, as set forth in the Servicing Agreement.

(f)               
At any time after the Securitization Date that the Note A-1 is no longer subject to the provisions of the Securitization
Servicing Agreement, the Note A-1 Holder shall (i) cause the Mortgage Loan to be serviced pursuant to a servicing agreement that
contains servicing provisions which are the same as or more favorable to the Non-Controlling Noteholders and Note B Holder,
in substance, to those in the Securitization Servicing Agreement, and (ii) cause the applicable Servicers to service and administer
the Mortgage Loan in accordance with the Servicing Standard as set forth in the Securitization Servicing Agreement, and all references
herein to the “Securitization Servicing Agreement” shall mean such subsequent servicing agreement; provided,
however, that until a replacement servicing agreement has been entered into, the Note A-1 Holder shall cause the Mortgage
Loan to be serviced in accordance with the servicing provisions set forth in the Securitization Servicing Agreement as if such
agreement was still in full force and effect with respect to the Mortgage Loan, provided, however, that the Servicer under the
Securitization Servicing Agreement shall have no further obligations to make P&I Advances; provided, further,
however, that if a Non-Lead Securitization Note is in a Securitization, then a Rating Agency Confirmation shall have been
obtained from each Rating Agency; provided, further, however, that until a replacement servicing agreement
is in place, the actual servicing of the Mortgage Loan may be performed by any nationally recognized commercial mortgage loan servicer
appointed by Note A-1 Holder and does not have to be performed by the service providers set forth under the Securitization Servicing
Agreement. The Note A-1 Holder shall provide the Non-Controlling Noteholders and Note B Holder with a reasonable opportunity
to review and comment on any replacement Servicing Agreement, and the Note B Holder agrees to reasonably negotiate the final terms
of such servicing agreement as promptly as reasonably possible upon receipt of any proposed revisions.

(g)              
If the Note B Holder exercises its purchase option in accordance with Section 12 hereof, upon the Mortgage Loan
being transferred to the Note B Holder, the Note B Holder shall be entitled to terminate the Servicing Agreement in its sole discretion
without payment of any termination fees.

(h)              
Each Non-Lead Securitization Noteholder, if its Non-Lead Securitization Note is included in a Securitization, shall cause
the applicable Non-Lead Servicing Agreement to contain provisions to the effect that:

(i)           
the Non-Lead Securitization Noteholder shall be responsible for its pro rata share of any Servicing Advances (and
advance interest thereon) and any additional trust fund expenses, but only to the extent that they relate to servicing and administration
of the Notes and the Mortgaged Property, including without limitation, any unpaid Special Servicing Fees, Liquidation Fees and
Workout Fees relating to the Notes, and that in the event that the funds received with respect to each respective Note are insufficient
to cover such Servicing Advances or additional trust fund expenses, (A) the Non-Lead Master Servicer will be required to, promptly
following notice from the Master Servicer or the Special Servicer, pay or reimburse the Master Servicer, the Special Servicer,
the Certificate Administrator, the Trustee, or the Lead Securitization Trust, as applicable, out

    28 

    	 

    

of general funds in the collection
account (or equivalent account) established under the Non-Lead Servicing Agreement for the Non-Lead Securitization Noteholder’s
pro rata share of any such Nonrecoverable Servicing Advances (together with advance interest thereon) and/or additional
trust fund expenses (including compensation due to the Master Servicer and the Special Servicer to the extent related to the servicing
and administration of the Mortgage Loan and the Mortgaged Property), and (B) if the Servicing Agreement permits the Master Servicer,
the Special Servicer, the Certificate Administrator or the Trustee to reimburse itself from the Lead Securitization Trust’s
general account, then the Master Servicer, the Special Servicer, the Certificate Administrator or the Trustee, as applicable, may
do so, and the Non-Lead Master Servicer will be required to, promptly following notice from the Master Servicer, the Special Servicer
or the Trustee, reimburse the Lead Securitization Trust out of general funds in the collection account (or equivalent account)
established under the Non-Lead Servicing Agreement for the Non-Lead Securitization Noteholder’s pro rata share of
any such Nonrecoverable Servicing Advances (together with advance interest thereon) and/or additional trust fund expenses (including
compensation due to the Master Servicer and the Special Servicer to the extent related to the servicing and administration of the
Mortgage Loan and the Mortgaged Property);

(ii)           
each of the Indemnified Parties shall be indemnified (as and to the same extent the Lead Securitization Trust is required
to indemnify each of such Indemnified Parties in respect of other mortgage loans in the Lead Securitization Trust pursuant to the
terms of Servicing Agreement and, in the case of the Lead Securitization Trust, to the extent of any additional trust fund expenses
with respect to the Mortgage Loan) by the Non-Lead Securitization Trust, against any of the Indemnified Items to the extent of
its pro rata share of such Indemnified Items, and to the extent amounts on deposit in the Whole Loan Custodial Account that
are allocated to the Non-Lead Securitization Note are insufficient for reimbursement of such amounts, the Non-Lead Master Servicer
will be required to reimburse each of the applicable Indemnified Parties for the Non-Lead Securitization Note’s pro rata
share of the insufficiency out of general funds in the collection account (or equivalent account) established under the Non-Lead
Servicing Agreement;

(iii)           
the Non-Lead Master Servicer will be required to deliver to the Trustee, the Certificate Administrator, the Special Servicer,
the Master Servicer and the Operating Advisor (i) promptly following the Securitization of the Non-Lead Securitization Note, notice
of the deposit of the Non-Lead Securitization Note into a Securitization Trust (which notice shall also provide contact information
for the trustee, the certificate administrator, the Non-Lead Master Servicer, the special servicer and the party designated to
exercise the rights of the “Non-Controlling Noteholder” under this Agreement), accompanied by a certified copy of the
executed Non-Lead Servicing Agreement and (ii) notice of any subsequent change in the identity of the Non-Lead Master Servicer
or the party designated to exercise the rights of the “Non-Controlling Noteholder” under this Agreement (together with
the relevant contact information);

(iv)           
any matter affecting the servicing and administration of the Mortgage Loan that requires delivery of a Rating Agency Confirmation
pursuant to the Servicing

    29 

    	 

    

Agreement shall also require delivery
of a Rating Agency Confirmation under the Non-Lead Servicing Agreement; and

(v)           
the Master Servicer, the Special Servicer, the Trustee and the Lead Securitization Trust shall be third party beneficiaries
of the foregoing provisions.

(i)                
The Servicing Agreement shall provide that compensating interest payments as defined therein with respect to the Senior
Notes will be allocated by the Master Servicer between the Senior Notes, pro rata, in accordance with their respective principal
amounts. The Master Servicer shall remit any compensating interest payment in respect of a Non-Lead Securitization Note to the
related Non-Lead Securitization Noteholder.

(j)                
In the event any filing is required to be made by any Non-Lead Depositor under the related Securitization Servicing Agreement
in order to comply with the Non-Lead Depositor’s requirements under the Securities Exchange Act of 1934, as amended, the
related Non-Lead Securitization Noteholder (including the related Non-Lead Depositor and related Non-Lead Trustee) shall use commercially
reasonable efforts to timely comply with any such filing.

Section 3.               
Subordination of the Note B; Payments Prior to a Sequential Pay Event. The Note B and the right of the Note B Holder
to receive payments of interest, principal and other amounts with respect to the Note B shall at all times be junior, subject and
subordinate to the Senior Notes and the right of each Senior Noteholder to receive payments of interest, principal and other amounts
with respect to its related Senior Note as set forth herein. If no Sequential Pay Event, as determined by the applicable Servicer,
shall have occurred and be continuing, all amounts tendered by the Mortgage Loan Borrower or otherwise available for payment on
or with respect to or in connection with the Mortgage Loan or the Mortgaged Property or amounts realized as proceeds thereof, whether
received in the form of Monthly Payments, the Balloon Payment, Penalty Charges, Liquidation Proceeds, proceeds under any guaranty,
letter of credit or other collateral or instrument securing the Mortgage Loan or Insurance and Condemnation Proceeds (other than
proceeds, awards or settlements to be applied to the restoration or repair of the Mortgaged Property or released to the Mortgage
Loan Borrower in accordance with the terms of the Mortgage Loan Documents, to the extent permitted by the REMIC Provisions), but
excluding all amounts for required reserves or escrows required by the Mortgage Loan Documents (to the extent, in accordance with
the terms of the Mortgage Loan Documents) to be held as reserves or escrows or received as reimbursements on account of recoveries
in respect of Advances then due and payable or reimbursable to the Servicer under the Servicing Agreement, shall be applied by
the Lead Securitization Noteholder (or its designee) and distributed by the Servicer (on its behalf) for payment in the following
order of priority without duplication (and payments shall be made at such times as are set forth in the Servicing Agreement):

(a)               
first, to each of the Senior Noteholders, pro rata, in an amount equal to the accrued and unpaid interest,
excluding the May-July 2020 Deferred Interest Payment, on the Principal Balance of the applicable Senior Note at the Net Senior
Note Rate;

(b)              
second, to each of the Senior Noteholders on a Pro Rata and Pari Passu Basis in an amount equal to their respective
Percentage Interests of principal payments received,

    30 

    	 

    

if any, with respect to such Monthly
Payment Date with respect to the Note A, until either (1) such principal payments received in respect of Note A have been so applied
pursuant to this Section 3 or (2) their Principal Balances have been reduced to zero;

(c)               
third, to each of the Senior Noteholders on a Pro Rata and Pari Passu Basis up to the amount of any unreimbursed
costs and expenses paid by such Senior Noteholders including any Recovered Costs, in each case to the extent reimbursable by the
Mortgage Loan Borrower but not previously reimbursed to such Noteholder (or paid or advanced by any servicer on its behalf and
not previously paid or reimbursed) with respect to the Mortgage Loan pursuant to this Agreement or the Servicing Agreement;

(d)              
fourth, to each of the Senior Noteholders on a Pro Rata and Pari Passu Basis in an amount equal to the product of
(i) the Percentage Interest of such Note multiplied by (ii) the applicable Relative Spread and (iii) any Prepayment
Premium to the extent paid by the Mortgage Loan Borrower and allocated to the Senior Notes;

(e)               
fifth, to the extent the Note B Holder has made any payments or advances to cure defaults pursuant to Section 11,
to reimburse the Note B Holder for all such cure payments;

(f)               
sixth, to the Note B Holder, in an amount equal to the accrued and unpaid interest, excluding the May-July 2020 Deferred
Interest Payment, on the Principal Balance of Note B at the Net Note B Rate;

(g)              
seventh, to the Note B Holder, in an amount equal to principal payments received, if any, with respect to such Monthly
Payment Date with respect to the Mortgage Loan, until the Principal Balance of Note B has been reduced to zero;

(h)              
eighth, to the Note B Holder in an amount equal to the product of (i) the Percentage Interest of such Note multiplied
by (ii) the applicable Relative Spread and (iii) any Prepayment Premium to the extent paid by the Mortgage Loan Borrower and allocated
to the Note B;

(i)                
ninth, if the proceeds of any foreclosure sale or any liquidation of the Mortgage Loan or Mortgaged Property exceed
the amounts required to be applied in accordance with the foregoing clauses (a)-(i) and, as a result of a Workout the Principal
Balance of Note B has been reduced, such excess amount shall be paid to the Note B Holder in an amount up to the reduction, if
any, of the Principal Balance of Note B, as a result of such Workout, plus interest on such amount at the related Note B Rate;

(j)                
tenth, (only to the extent not required to pay interest on Advances, to reimburse amounts paid as Servicing Advances,
to be applied to additional expenses of the Lead Securitization Trust or to be paid as additional servicing compensation to the
Master Servicer and/or the Special Servicer, as provided in the last paragraph of Section 4), to each Note A Holder and
each Note B Holder (or any Servicer or Trustee (if any), as applicable, on its behalf) its Percentage Interest of any Penalty Charges,
in each case to the extent actually paid by the Mortgage Loan Borrower;

    31 

    	 

    

(k)              
 eleventh, to the extent assumption or transfer fees actually paid by the Mortgage Loan Borrower are not required
to be otherwise applied under the Servicing Agreement, including, without limitation, to provide reimbursement for interest on
any Advances, to pay any Additional Servicing Expenses or to compensate a Servicer (in each case, provided that such reimbursements
or payments relate to the Mortgage Loan), any such assumption or transfer fees, to the extent actually paid by the Mortgage Loan
Borrower, shall be paid to each Senior Noteholder and the Note B Holder, pro rata, based on their respective Percentage
Interests;

(l)                
twelfth, if (x) all of the amounts described in the foregoing clauses (a)-(k) that are due and owing with
respect to the Loan have been paid in full, (y) the May-July 2020 Deferred Interest Payment has become due and payable pursuant
to the terms of the Mortgage Loan Agreement and (z) the Mortgaged Property is not an REO Property, then, to BANA, the May-July
2020 Deferred Interest Payment, until the May-July 2020 Deferred Interest Payment has been paid to BANA in full; and

(m)            
thirteenth, if any excess amount is available to be distributed in respect of the Mortgage Loan, and not otherwise
applied in accordance with the foregoing clauses (a)-(l), any such excess amount shall be paid pro rata to each Senior
Noteholder and the Note B Holder in accordance with their respective Percentage Interests; provided, however, that if the Mortgaged
Property is an REO Property, then the aggregate portion of such excess amount that would have been payable to the Senior Noteholders
pursuant to the foregoing provision of this priority thirteenth shall instead be applied first, to pay any unpaid amount
of the May-July 2020 Deferred Interest Payment to BANA, until the May-July 2020 Deferred Interest Payment has been paid to
BANA in full, and second, to pay any remainder of such portion of such excess amount to the Senior Noteholders pro rata
in accordance with their respective Percentage Interests.

Section 4.               
Payments Following a Sequential Pay Event. Payments of interest and principal shall be made to the Noteholders in
accordance with Section 3 of this Agreement; provided, if a Sequential Pay Event, as determined by the applicable
Servicer and as set forth in the Servicing Agreement, shall have occurred and be continuing, all amounts tendered by the Mortgage
Loan Borrower or otherwise available for payment on or with respect to or in connection with the Mortgage Loan or the Mortgaged
Property or amounts realized as proceeds thereof (including without limitation amounts received by the Master Servicer or Special
Servicer pursuant to the Servicing Agreement as reimbursements on account of recoveries in respect of Advances), whether received
in the form of Monthly Payments, any proceeds from the sale or distribution of any REO Property, the Balloon Payment, Penalty Charges,
Liquidation Proceeds, proceeds under any guaranty, letter of credit or other collateral or instrument securing the Mortgage Loan
or Insurance and Condemnation Proceeds (other than proceeds, awards or settlements to be applied to the restoration or repair of
the Mortgaged Property or released to the Mortgage Loan Borrower in accordance with the terms of the Mortgage Loan Documents, to
the extent permitted by the REMIC Provisions), but excluding all amounts for required reserves or escrows required by the Mortgage
Loan Documents deemed appropriate by the Servicer in accordance with the Servicing Standard to continue to be held as reserves
or escrows or received as reimbursements on account of recoveries in respect of Advances then due and payable or reimbursable to
the Servicer under Servicing Agreement, shall be distributed by the Servicer in

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the following order of priority without
duplication (and payments shall be made at such times as are set forth in the Servicing Agreement):

(a)               
first, to each of the Senior Noteholders, pro rata, in an amount equal to the accrued and unpaid interest,
excluding the May-July 2020 Deferred Interest Payment, on the Principal Balance of the applicable Senior Note at the Net Senior
Note Rate;

(b)              
second, to each of the Senior Noteholders, pro rata, based on their outstanding Principal Balances, until
their Principal Balances have been reduced to zero;

(c)               
third, to each of the Senior Noteholders on a Pro Rata and Pari Passu Basis up to the amount of any unreimbursed
costs and expenses paid by such Senior Noteholders including any Recovered Costs, in each case to the extent reimbursable by the
Mortgage Loan Borrower but not previously reimbursed to such Noteholder (or paid or advanced by any servicer on its behalf and
not previously paid or reimbursed) with respect to the Mortgage Loan pursuant to this Agreement or the Servicing Agreement;

(d)              
fourth, to each of the Senior Noteholders on a Pro Rata and Pari Passu Basis in an amount equal to the product of
(i) the Percentage Interest of such Note multiplied by (ii) the applicable Relative Spread, and (iii) any Prepayment Premium to
the extent paid by the Mortgage Loan Borrower and allocated to the Senior Notes;

(e)               
fifth, to the extent the Note B Holder has made any payments or advances to cure defaults pursuant to Section 11,
to reimburse the Note B Holder for all such cure payments;

(f)               
sixth, to the Note B Holder in an amount equal to the accrued and unpaid interest, excluding the May-July 2020 Deferred
Interest Payment, on the Principal Balance of Note B at the Net Note B Rate;

(g)              
seventh, to the Note B Holder until its Principal Balance has been reduced to zero;

(h)              
eighth, to the Note B Holder in an amount equal to the product of (i) the Percentage Interest of such Note multiplied
by (ii) the applicable Relative Spread, and (iii) any Prepayment Premium to the extent paid by the Mortgage Loan Borrower and allocated
to the Note B;

(i)                
ninth, if the proceeds of any foreclosure sale or any liquidation of the Mortgage Loan or Mortgaged Property exceed
the amounts required to be applied in accordance with the foregoing clauses (a)-(i) and, as a result of a Workout the Principal
Balance of Note B has been reduced, such excess amount shall be paid to the Note B Holder in an amount up to the reduction, if
any, of the Principal Balance of Note B, as a result of such Workout, plus interest on such amount at the related Note B Rate;

(j)                
tenth, (only to the extent not required to pay interest on Advances, to reimburse amounts paid as Servicing Advances,
to be applied to additional expenses of the Lead Securitization Trust or to be paid as additional servicing compensation to the
Master Servicer

    33 

    	 

    

and/or the Special Servicer, as provided
in the last paragraph of this Section 4), to each Note A Holder and each Note B Holder (or any Servicer or Trustee (if any),
as applicable, on its behalf) its Percentage Interest of any Penalty Charges, in each case to the extent actually paid by the Mortgage
Loan Borrower;

(k)              
eleventh, to the extent assumption or transfer fees actually paid by the Mortgage Loan Borrower are not required
to be otherwise applied under the Servicing Agreement, including, without limitation, to provide reimbursement for interest on
any Advances, to pay any Additional Servicing Expenses or to compensate a Servicer (in each case, provided that such reimbursements
or payments relate to the Mortgage Loan), any such assumption or transfer fees, to the extent actually paid by the Mortgage Loan
Borrower, shall be paid to each Senior Noteholder and the Note B Holder, pro rata, based on their respective Percentage
Interests;

(l)                
twelfth, if (x) all of the amounts described in the foregoing clauses (a)-(k) that are due and owing with
respect to the Loan have been paid in full, (y) the May-July 2020 Deferred Interest Payment has become due and payable pursuant
to the terms of the Mortgage Loan Agreement and (z) the Mortgaged Property is not an REO Property, then, to BANA, the May-July
2020 Deferred Interest Payment, until the May-July 2020 Deferred Interest Payment is paid to BANA in full; and

(m)            
thirteenth, if any excess amount is available to be distributed in respect of the Mortgage Loan, and not otherwise
applied in accordance with the foregoing clauses (a)-(l), any such excess amount shall be paid pro rata to each
Senior Noteholder and the Note B Holder in accordance with their respective Percentage Interests; provided, however, that if the
Mortgaged Property is an REO Property, then the aggregate portion of such excess amount that would have been payable to the Senior
Noteholders pursuant to the foregoing provision of this priority thirteenth shall instead be applied first, to pay any unpaid
amount of the May-July 2020 Deferred Interest Payment to BANA, until the May-July 2020 Deferred Interest Payment has been paid
to BANA in full, and second, to pay any remainder of such portion of such excess amount to the Senior Noteholders pro rata
in accordance with their respective Percentage Interests.

Pursuant to the Securitization
Servicing Agreement, Penalty Charges actually paid by the Mortgage Loan Borrower shall be applied by the Master Servicer (prior
to allocation to the Noteholders under Section 3 or Section 4) for following purposes:

(1)               first,
(i) to pay the Master Servicer, the Trustee or the Special Servicer for each Noteholder’s pro rata share
of any interest accrued on any Servicing Advances and reimbursement of any Servicing Advances in accordance with the terms of the
Securitization Servicing Agreement; and (ii) to pay the Master Servicer or the Trustee or a Non-Lead Master Servicer or Non-Lead
Trustee the amount, if any, of interest accrued on any P&I Advance made with respect to any Note by such party;

(2)               second,
be used to reduce, on a pro rata basis, each Noteholder’s share of additional expenses of the Lead Securitization
Trust (including Special Servicing Fees,

    34 

    	 

    

unpaid Workout Fees and Liquidation
Fees) incurred with respect to the Mortgage Loan (as specified in the Securitization Servicing Agreement); and

(3)        third,
to the extent provided in the Securitization Servicing Agreement, to pay the Master Servicer and/or the Special Servicer as additional
servicing compensation.

Section 5.               
Administration of the Mortgage Loan.

(a)               
Subject to this Agreement (including, without limitation, Section 5(f) below) and the Servicing Agreement, the
Lead Securitization Noteholder (or the Servicer acting on behalf of the Lead Securitization Noteholder) shall have the sole and
exclusive authority with respect to the administration of, and exercise of rights and remedies with respect to, the Mortgage Loan,
including, without limitation, the sole authority to modify or waive any of the terms of the Mortgage Loan Documents or consent
to any action or failure to act by the Mortgage Loan Borrower or any other party to the Mortgage Loan Documents, call or waive
any Event of Default, accelerate the Mortgage Loan or institute any foreclosure action or other remedy and no other Noteholder
shall have any voting, consent or other rights whatsoever with respect to the Lead Securitization Noteholder’s administration
of, or exercise of its rights and remedies with respect to, the Mortgage Loan. Subject to this Agreement and the Servicing Agreement
(including, without limitation, Section 5(f) below), each of the Non-Controlling Noteholders and the Note B Holder
agrees that it shall have no right to, and hereby presently and irrevocably assigns and conveys to the Lead Securitization Noteholder
(or the Servicer acting on behalf of the Lead Securitization Noteholder) the rights, if any, that the Non-Controlling Noteholders
or Note B Holder has to, (i) call or cause the Lead Securitization Noteholder to call an Event of Default under the Mortgage
Loan, or (ii) exercise any remedies with respect to the Mortgage Loan or the Mortgage Loan Borrower, including, without limitation,
filing or causing the Lead Securitization Noteholder to file any bankruptcy petition against the Mortgage Loan Borrower. The Lead
Securitization Noteholder (or the Servicer acting on behalf of the Lead Securitization Noteholder) shall not have any fiduciary
duty to the Non-Controlling Noteholder or the Note B Holder in connection with the administration of the Mortgage Loan (but the
foregoing shall not relieve the Lead Securitization Noteholder from the obligation to make any disbursement of funds as set forth
herein).

(b)              
The administration of the Mortgage Loan shall be governed by this Agreement and the Servicing Agreement. The Note B Holder
agrees to be bound by the terms of the Servicing Agreement. The Lead Securitization Noteholder (or the Servicer on its behalf)
shall service the Mortgage Loan in accordance with the terms of this Agreement, including without limitation the rights of the
Note B Holder set forth in Section 5(f) below. Servicing of the Mortgage Loan shall be carried out by the Master Servicer
and, if the Mortgage Loan is a Specially Serviced Loan, by the Special Servicer, in each case pursuant to the Servicing Agreement
and this Agreement. Notwithstanding anything to the contrary contained herein, in accordance with the Servicing Agreement, the
Lead Securitization Noteholder shall cause the Master Servicer and the Special Servicer to service and administer the Mortgage
Loan in accordance with the Servicing Standard, taking into account the interests of the Lead Securitization Noteholder, the Non-Controlling
Noteholder, the Note B Holder (it being understood that the interest of the Note B Holder is a junior Note interest, subject to
the terms and conditions of this Agreement), and BANA (for purposes of this reference, solely with respect

    35 

    	 

    

to the May-July 2020 Deferred Interest
Payment, taking into account that the entitlement of BANA to receive the May-July 2020 Deferred Interest Payment is subordinate
to Note B subject to the terms and conditions of this Agreement), and any Non-Controlling Noteholder or Note B Holder or BANA,
so long as such Person is not the Mortgage Loan Borrower or a Mortgage Loan Borrower Related Party, shall be deemed a third party
beneficiary of such provisions of the Servicing Agreement. The foregoing provisions of this Section 5(b) shall not
limit or modify the rights of the Controlling Noteholder and/or the Controlling Noteholder Representative to exercise their respective
rights specifically set forth under this Agreement.

(c)               
Notwithstanding anything to the contrary contained herein, but subject to the terms and conditions of the Servicing Agreement
and this Agreement (including, without limitation, Section 6), if the Servicer (on behalf of the Noteholders) in connection
with a Workout of the Mortgage Loan modifies the terms thereof such that (i) the unpaid principal balance of the Mortgage
Loan is decreased, (ii) the Mortgage Loan Rate or scheduled amortization payments on such Mortgage Loan are reduced, (iii) payments
of interest or principal on such Mortgage Loan are waived, reduced or deferred or (iv) any other adjustment (other than an
increase in the Mortgage Loan Rate or increase in scheduled amortization payments) is made to any of the terms of the Mortgage
Loan, all payments to each Senior Noteholder pursuant to Section 3 and Section 4, as applicable, shall
be made as though such Workout did not occur, with the payment terms of each Senior Note remaining the same as they are on the
date hereof, the Note B (and the subordination to Note B of the entitlement of BANA to the May-July 2020 Deferred Interest Payment
in accordance with Section 3 and Section 4, as applicable, hereof) shall bear the full economic effect of all waivers, reductions
or deferrals of amounts due on the Mortgage Loan attributable to such Workout (up to the amount otherwise due on the Note B and
in respect of the May-July 2020 Deferred Interest Payment). Subject to the Servicing Agreement and this Agreement (including without
limitation Section 6), in the case of any modification or amendment described above, the Servicer (on behalf of the
Noteholders) will have the sole authority and ability to revise the payment provisions set forth in Section 3 and Section 4
above in a manner that reflects the subordination of the Note B (and the subordination to Note B of the entitlement of BANA to
the May-July 2020 Deferred Interest Payment in accordance with Section 3 and Section 4, as applicable, hereof) to
each Senior Note with respect to the loss that is the result of such amendment or modification, including: (i) the ability
to increase the Percentage Interest of each Senior Note and to reduce the Percentage Interest of the Note B in a manner that reflects
a loss in principal as a result of such amendment or modification and (ii) the ability to change the Senior Note Rate and
the Note B Rate, as applicable, in order to reflect a reduction in the Mortgage Loan Rate of the Mortgage Loan but shall not be
permitted to change the order of the clauses set forth in Section 3 and Section 4 hereof. Notwithstanding
the foregoing, if any Workout, modification or amendment of the Mortgage Loan extends the original maturity date of the Mortgage
Loan, for purposes of this paragraph, the Balloon Payment will be deemed not to be due on the original maturity date of the Mortgage
Loan but will be deemed due on the extended maturity date of the Mortgage Loan.

(d)              
All rights and obligations of the Lead Securitization Noteholder described hereunder may be exercised by the Servicer on
behalf of the Lead Securitization Noteholder in accordance with the Servicing Agreement and this Agreement. For the avoidance of
doubt, prior to the First Securitization, the Note A-1 Holder (or any servicer appointed by it under any interim servicing agreement)
shall have the sole and exclusive authority with respect to the

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administration of, and exercise of rights
and remedies with respect to, the Mortgage Loan, to the same extent as the Lead Securitization Noteholder’s authority on
and after the First Securitization.

(e)               
If any Note is included as an asset of a real estate mortgage investment conduit (a “REMIC”), within
the meaning of Section 860D(a) of the Code, then, any provision of this Agreement to the contrary notwithstanding: (i) the
Mortgage Loan shall be administered such that the Notes shall each qualify at all times as (or as interests in) a “qualified
mortgage” within the meaning of Section 860G(a)(3) of the Code, (ii) any real property (and related personal property)
acquired by or on behalf of the Noteholders pursuant to a foreclosure, exercise of a power of sale or delivery of a deed in lieu
of foreclosure of the Mortgage or lien on such property following a default on the Mortgage Loan shall be administered so that
the interests of the Noteholders therein shall at all times qualify as “foreclosure property” within the meaning of
Section 860G(a)(8) of the Code and (iii) the Lead Securitization Noteholder may not modify, waive or amend any provision of
the Mortgage Loan, consent to or withhold consent from any action of the Mortgage Loan Borrower, or exercise or refrain from exercising
any powers or rights which the Lead Securitization Noteholder may have under the Mortgage Loan Documents, if any such action would
constitute a “significant modification” of the Mortgage Loan, within the meaning of Section 1.860G 2(b) of the
regulations of the United States Department of the Treasury, more than three months after the earliest startup day of any REMIC
which includes a Note (or any portion thereof). The Noteholders agree that the provisions of this Section 5(e) shall
be effected by compliance by the Lead Securitization Noteholder or its assignees with this Agreement or the Servicing Agreement
or any other agreement which governs the administration of the Mortgage Loan or the Lead Securitization Noteholder’s interests
therein. All costs and expenses of compliance with this Section 5(e), to the extent that such costs and expenses relate
to administration of a REMIC or to any determination respecting the amount, payment or avoidance of any tax under the REMIC Provisions
or the actual payment of any REMIC tax or expense, shall be borne by each Note subject to a securitization on a pro rata
and pari passu basis.

Anything herein or
in the Servicing Agreement to the contrary notwithstanding, in the event that any Note is included in a REMIC and any other is
not, such other Noteholder shall not be required to reimburse the Noteholders that deposited a Note into a REMIC or any other Person
for payment of (i) any taxes imposed on such REMIC, (ii) any costs or expenses relating to the administration of such REMIC or
to any determination respecting the amount, payment or avoidance of any tax under such REMIC or (iii) any advances for any of the
foregoing or any interest thereon or for deficits in other items of disbursement or income resulting from the use of funds for
payment of any such taxes, costs or expenses or advances, nor shall any disbursement or payment otherwise distributable to the
other Noteholder be reduced to offset or make-up any such payment or deficit.

(f)               
If any consent, modification, amendment or waiver under or other action in respect of the Mortgage Loan (whether or not
a Servicing Transfer Event has occurred and is continuing) that would constitute a Major Decision has been requested or proposed,
or if the Master Servicer or Special Servicer otherwise intends to make a Major Decision, the Master Servicer or Special Servicer
shall provide written notice to the Controlling Noteholder (and any Controlling Noteholder Representative) of such proposed Major
Decision. The Master Servicer

    37 

    	 

    

or Special Servicer, as applicable,
shall not implement any decision with respect to such Major Decision until the written consent of the Controlling Noteholder (or
its Controlling Noteholder Representative) has been received; provided that such consent shall be deemed given if the Controlling
Noteholder (or its Controlling Noteholder Representative) fails to respond to the Master Servicer or Special Servicer, as applicable,
within ten (10) Business Days following receipt of such Servicer’s written recommendation and analysis with respect to such
Major Decision, together with all information reasonably requested by the Controlling Noteholder (or its Controlling Noteholder
Representative), and reasonably available to such Servicer, in order to evaluate the Major Decision.

Notwithstanding the
foregoing, following the occurrence of an extraordinary event with respect to any Mortgaged Property, or if a failure to take any
such action at such time would be inconsistent with the Servicing Standard, the Servicer may take actions with respect to such
Mortgaged Property before obtaining the consent of the Controlling Noteholder (or its Controlling Noteholder Representative) if
the Servicer reasonably determines in accordance with the Servicing Standard that failure to take such actions prior to such consent
would materially and adversely affect the interest of the Noteholders, and the Servicer has made a reasonable effort to contact
the Controlling Noteholder (or its Controlling Noteholder Representative). The foregoing shall not relieve the Lead Securitization
Noteholder (or Servicer acting on its behalf) of its duties to comply with the Servicing Standard.

Notwithstanding the
foregoing, the Servicer shall not follow any advice or consultation provided by the Controlling Noteholder (or its Controlling
Noteholder Representative) that would require or cause the Servicer to violate any applicable law, including the REMIC Provisions,
be inconsistent with the Servicing Standard, require or cause the Servicer to violate provisions of this Agreement or the Servicing
Agreement, require or cause the Servicer to violate the terms of the Mortgage Loan, or materially expand the scope of any Servicer’s
responsibilities under this Agreement.

(g)              
During the continuation of a Control Appraisal Period, the Lead Securitization Noteholder (or its Directing Certificateholder)
shall have, with respect to the Mortgage Loan, all of the same rights and powers of the Directing Certificateholder under the Servicing
Agreement with respect to the other mortgage loans included in the Lead Securitization, without limitation, the right to consent
and/or consult regarding Major Decisions and other servicing matters, the right to advise (1) the Special Servicer with respect
to all Specially Serviced Loans and (2) the Special Servicer with respect to non-Specially Serviced Loans as to all matters for
which the Master Servicer must obtain the consent or deemed consent of the Special Servicer, and the right to direct the Special
Servicer to take, or to refrain from taking, such other actions with respect to the Mortgage Loan as the Directing Certificateholder
may deem advisable or as to which provision is otherwise made therein, in each case subject to the terms and conditions of the
Servicing Agreement.

Notwithstanding the
foregoing, during the continuance of a Control Appraisal Period, the Lead Securitization Noteholder (or the Servicer acting on
its behalf) shall be required:

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(i) to provide copies
of any notice, information and report that it is required to provide to the Directing Certificateholder pursuant to the Servicing
Agreement with respect to any Major Decisions or the implementation of any recommended actions outlined in an Asset Status Report
relating to the Mortgage Loan, to each Non-Controlling Noteholder, within the same time frame it is required to provide to the
Directing Certificateholder (for this purpose, without regard to whether such items are actually required to be provided to the
Directing Certificateholder under the Servicing Agreement due to the occurrence of a Control Termination Event (as defined in the
Servicing Agreement) or a Consultation Termination Event (as defined in the Servicing Agreement)); and

(ii) to consult with
each Non-Controlling Noteholder on a strictly non-binding basis, to the extent having received such notices, information and reports,
such Non-Controlling Noteholder requests consultation with respect to any such Major Decisions or the implementation of any recommended
actions outlined in an Asset Status Report relating to the Mortgage Loan, and consider alternative actions recommended by such
Non-Controlling Noteholder; provided that after the expiration of a period of ten (10) Business Days from the delivery to the Non-Controlling
Noteholders by the Lead Securitization Noteholder of written notice of a proposed action, together with copies of the notice, information
and report required to be provided to the Directing Certificateholder, the Lead Securitization Noteholder (or the Servicer acting
on its behalf) shall no longer be obligated to consult with any Non-Controlling Noteholder, whether or not such Non-Controlling
Noteholder has responded within such ten (10) Business Day period (unless, the Lead Securitization Noteholder (or the Servicer
acting on its behalf) proposes a new course of action that is materially different from the action previously proposed, in which
case such ten (10) Business Day period shall be deemed to begin anew from the date of such proposal and delivery of all information
relating thereto).

Notwithstanding the
consultation rights of each Non-Controlling Noteholder set forth in the immediately preceding sentence, the Lead Securitization
Noteholder (or Servicer acting on its behalf) may make any Major Decision or take any action set forth in the Asset Status Report
before the expiration of the aforementioned ten (10) Business Day period if the Lead Securitization Noteholder (or Servicer acting
on its behalf) determines that immediate action with respect thereto is necessary to protect the interests of the Noteholders.
In no event shall the Lead Securitization Noteholder (or Servicer acting on its behalf) be obligated at any time to follow or take
any alternative actions recommended by any Non-Controlling Noteholder.

In addition to the
consultation rights of each Non-Controlling Noteholder (or its Non-Controlling Noteholder Representative) provided in the immediately
preceding paragraph, during the continuance of a Control Appraisal Period, each Non-Controlling Noteholder shall have the right
to attend annual meetings (either telephonically or in person, in the discretion of the Servicer) with the Lead Securitization
Noteholder (or the Servicer acting on its behalf) at the offices of the Servicer, as applicable, upon reasonable notice and at
times reasonably acceptable to the Servicer, as applicable, in which servicing issues related to the Mortgage Loan are discussed.

The Noteholders acknowledge
that the Securitization Servicing Agreement may contain certain provisions that give the Operating Advisor certain non-binding
consultation

    39 

    	 

    

rights with respect to Major Decisions
related to compliance with the Risk Retention Rules applicable to the Lead Securitization.

(h)  
The Note B Holder shall be entitled to avoid a Control Appraisal Period caused by application of an Appraisal Reduction
Amount upon satisfaction of the following (which must be completed within thirty (30) days of the receipt of a third party Appraisal
that indicates such Control Appraisal Period has occurred): (i) the Note B Holder shall have delivered as a supplement to the appraised
value of the Mortgaged Property, in the amount specified in clause (ii) below, to the Servicer, together with documentation
acceptable to the Servicer in accordance with the Servicing Standard to create and perfect a first priority security interest in
favor of the Servicer on behalf of the Senior Noteholder in such collateral (a) cash collateral for the benefit of, and acceptable
to, the Servicer or (b) an unconditional and irrevocable standby letter of credit with the Servicer as the beneficiary, issued
by a bank or other financial institutions the long term unsecured debt obligations of which are at all times rated at least “AA”
(or the equivalent) by each Rating Agency that rates such institution or the short term obligations of which are rated at least
“A-1+” by (or the equivalent) by each Rating Agency that rates such institution (either (a) or (b), the “Threshold
Event Collateral”), and (ii) the Threshold Event Collateral shall be in an amount which, when added to the appraised
value of the Mortgaged Property as determined pursuant to the Servicing Agreement, would cause the applicable Control Appraisal
Period not to occur. If the requirements of this paragraph are satisfied by the Note B Holder (a “Threshold Event
Cure”), no Control Appraisal Period caused by application of an Appraisal Reduction Amount shall be deemed to have occurred.
If a letter of credit is furnished as Threshold Event Collateral, the applicable Controlling Noteholder shall be required to renew
such letter of credit not later than thirty (30) days prior to expiration thereof or to replace such letter of credit with a substitute
letter of credit or other Threshold Event Collateral with an expiration date that is greater than forty-five (45) days from the
date of substitution; provided, however, that, if a letter of credit is not renewed prior to thirty (30) days prior
to the expiration date of such letter of credit, the letter of credit shall provide that the Servicer may (and at the direction
of the Note B Holder, shall) draw upon such letter of credit and hold the proceeds thereof as Threshold Event Collateral.
The Threshold Event Cure shall continue until (i) the appraised value of the Mortgaged Property plus the value of the Threshold
Event Collateral would not be sufficient to prevent a Control Appraisal Period from occurring; or (ii) the occurrence of a Final
Recovery Determination, as defined in the Servicing Agreement. If the appraised value of the Mortgaged Property, upon any redetermination
thereof (including any redetermination under Section 5(j)(ii)), is sufficient to avoid the occurrence of a Control
Appraisal Period without taking into consideration any, or some portion of, Threshold Event Collateral previously delivered by
the Note B Holder, any or such portion of Threshold Event Collateral held by the Servicer shall promptly be returned to such
Controlling Noteholder (at its sole expense). Upon a Final Recovery Determination with respect to the Mortgage Loan, such Threshold
Event Collateral shall be available to reimburse each Noteholder for any realized loss pursuant to Section 3 or Section 4,
as applicable, with respect to the Mortgage Loan after application of the net proceeds of liquidation, not in excess of the applicable
Principal Balance, each of the Notes, as the case may be, plus accrued and unpaid interest thereon at the applicable interest rate
and all other Additional Servicing Expenses reimbursable under this Agreement and under the Servicing Agreement. Any Threshold
Event Collateral shall be treated as an “outside reserve fund” for purposes of the REMIC Provisions and such property
(and the right to reimbursement of any amounts with respect thereto from a REMIC) shall be beneficially owned

    40 

    	 

    

by the posting Noteholder who shall
be taxed on all income with respect thereto. The entire amount of Threshold Event Collateral, without a haircut or other reduction,
shall be considered in determining the sufficiency of such Threshold Event Collateral to avoid a Control Appraisal Period.

(i)                
The Servicer or Special Servicer shall obtain appraisals that meet the requirements of, and at the times required pursuant
to, the terms of the Servicing Agreement.

(j)                
(i) The Note B Holder, if it is determined at any time of determination to no longer be the Controlling Noteholder (the
“Appraised-Out Holder”) as a result of the application of an Appraisal Reduction Amount, shall have the right,
at any time and from time to time, but no more than one time in any calendar quarter, at its sole expense, to require the Special
Servicer to order an additional appraisal with respect to the Mortgage Loan. The Special Servicer shall use commercially reasonable
efforts consistent with the Servicing Standard to ensure that such additional appraisal is delivered within thirty (30) days from
receipt of the Appraised-Out Holder’s written request and shall ensure that such appraisal is prepared on an “as-is”
basis by an Member of the Appraisal Institute (“MAI”) appraiser (provided that such MAI appraiser may
not be the same MAI appraiser that provided the appraisal in respect of which the Appraised-Out Holder is requesting the Special
Servicer to obtain an additional appraisal).

(ii) Upon receipt
of any additional appraisal pursuant to clause (i) above, the Special Servicer shall determine, in accordance with the Servicing
Standard, whether, based on such additional appraisal, any recalculation of the Appraisal Reduction Amount is warranted, and if
so warranted, the Special Servicer shall recalculate the Appraisal Reduction Amount based on such additional appraisal. If required
by such recalculation, the Appraised-Out Holder shall be reinstated as the Controlling Noteholder and, if applicable, shall have
the Principal Balance of Note B notionally restored to the extent required by such recalculation of the Appraisal Reduction Amount.
The Appraised-Out Holder requesting any additional appraisal pursuant to clause (i) above shall refrain from exercising
any direction, control, consent and/or similar rights of the Controlling Noteholder until such time, if any, as the Appraised-Out
Holder is reinstated as the Controlling Noteholder (such period beginning upon receipt by the Special Servicer of any request to
obtain a additional appraisal pursuant to clause (i) above to but excluding the date on which either (A) the Special Servicer
determines that no recalculation of the Appraisal Reduction Amount is warranted or (B) the Special Servicer recalculates the Appraisal
Reduction Amount based on the additional appraisal, the “Appraisal Review Period”). The rights of the Controlling
Noteholder during each Appraisal Review Period shall be exercised by the Note A-1 Holder.

(k)       Prior
to the First Securitization, Sections 3.14 and 3.15 of the Model PSA regarding governance and management of the REO Property are
hereby incorporated herein by reference for the benefit of Note B Holder (in its individual capacity and in its capacity as Controlling
Noteholder) and, in the event the Mortgaged Property becomes REO Property, the Master Servicer, the Special Servicer and/or the
Noteholders shall be bound by such provisions (as applicable to the Mortgage Loan and the REO Property), as though the Mortgaged
Property were a “Mortgaged Property” thereunder and the Note B Holder were a “Companion Holder” thereunder;
provided, however, that such provisions shall be subject to the rights of the Note B Holder hereunder. From and after the
First Securitization, the Securitization Servicing

    41 

    	 

    

Agreement shall contain substantially
similar provisions (and shall be similarly subject to the rights of Note B Holder hereunder).

Section 6.               
Appointment of Controlling Noteholder Representative.

(a)               
The Controlling Noteholder shall have the right at any time to appoint a representative in connection with the exercise
of its rights and obligations with respect to the Mortgage Loan (the “Controlling Noteholder Representative”).
The Controlling Noteholder shall have the right in its sole discretion at any time and from time to time to remove and replace
the Controlling Noteholder Representative. When exercising its various rights under Section 5 and elsewhere in this
Agreement, the Controlling Noteholder may, at its option, in each case, act through the Controlling Noteholder Representative.
The Controlling Noteholder Representative may be any Person (other than the Mortgage Loan Borrower, its principal or any Affiliate
of the Mortgage Loan Borrower), including, without limitation, the Controlling Noteholder, any officer or employee of the Controlling
Noteholder, any affiliate of the Controlling Noteholder or any other unrelated third party. No such Controlling Noteholder Representative
shall owe any fiduciary duty or other duty to any other Person (other than the Controlling Noteholder). All actions that are permitted
to be taken by the Controlling Noteholder under this Agreement may be taken by the Controlling Noteholder Representative acting
on behalf of the Controlling Noteholder. No Servicer, Operating Advisor, Asset Representations Reviewer, Trustee or Certificate
Administrator acting on behalf of the Lead Securitization Noteholder shall be required to recognize any Person as a Controlling
Noteholder Representative until the Controlling Noteholder has notified each Servicer, Operating Advisor, Trustee and Certificate
Administrator of such appointment and, if the Controlling Noteholder Representative is not the same Person as the Controlling Noteholder,
the Controlling Noteholder Representative provides each Servicer, Operating Advisor, Asset Representations Reviewer, Trustee and
Certificate Administrator with written confirmation of its acceptance of such appointment, an address and facsimile number for
the delivery of notices and other correspondence and a list of officers or employees of such person with whom the parties to this
Agreement may deal (including their names, titles, work addresses and facsimile numbers). The Controlling Noteholder shall promptly
deliver such information to each Servicer, Operating Advisor, Asset Representations Reviewer, Trustee and Certificate Administrator.

(b)              
Neither the Controlling Noteholder Representative nor the Controlling Noteholder will have any liability to the other Noteholders
or any other Person for any action taken, or for refraining from the taking of any action or the giving of any consent or the failure
to give any consent pursuant to this Agreement or the Servicing Agreement, or errors in judgment, absent any loss, liability or
expense incurred by reason of its willful misfeasance, bad faith or gross negligence. The Noteholders agree that the Controlling
Noteholder Representative and the Note B Holder (whether acting in place of the Controlling Noteholder Representative when
no Controlling Noteholder Representative shall have been appointed hereunder or otherwise exercising any right, power or privilege
granted to the Note B Holder hereunder) may take or refrain from taking actions, or give or refrain from giving consents,
that favor the interests of one Noteholder over the other Noteholder, and that the Controlling Noteholder Representative may have
special relationships and interests that conflict with the interests of a Noteholder and, absent willful misfeasance, bad faith
or gross negligence on the part of the Controlling Noteholder Representative or the Note B Holder, as the case may be, agree
to take no action against the

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Controlling Noteholder Representative,
the Note B Holder or any of their respective officers, directors, employees, principals or agents as a result of such special
relationships or interests, and that neither the Controlling Noteholder Representative nor the Note B Holder will be deemed
to have been grossly negligent or reckless, or to have acted in bad faith or engaged in willful misfeasance or to have recklessly
disregarded any exercise of its rights by reason of its having acted or refrained from acting, or having given any consent or having
failed to give any consent, solely in the interests of any Noteholder.

(c)               
If the Note A-1 Holder is the Controlling Noteholder, the Note B Holder acknowledges and agrees (i) all of the aforementioned
rights and obligations of the Note B Holder and the Controlling Noteholder Representative set forth in Section 5(f)
and 5(g) and this Section 6 shall be exercisable by the Note A-1 Holder (or the applicable Person specified
in the Servicing Agreement) to the extent set forth in the Servicing Agreement and (ii) the Directing Certificateholder may exercise
all rights with respect to the Mortgage Loan and any decisions or consents or other powers with respect thereto as are set forth
in the Servicing Agreement.

Section 7.               
Special Servicer. The Note B Holder (unless a Control Appraisal Period has occurred and is continuing) (or its Controlling
Noteholder Representative), at its expense, shall have the right to appoint the Special Servicer with respect to the Mortgage Loan
(for the avoidance of doubt, the expenses referenced are those of the newly appointed Special Servicer and any terminated special
servicer, including, without limitation, the reasonable costs and expenses of counsel to any third parties and costs and expenses
of the terminated Special Servicer, and excluding Special Servicing Fees and ongoing costs incurred in connection with administration
of the Mortgage Loan under the Servicing Agreement). The Note B Holder (unless a Control Appraisal Period has occurred and is continuing)
(or its Controlling Noteholder Representative) shall be entitled to terminate the rights and obligations of the Special Servicer
under the Servicing Agreement, with or without cause, upon at least ten (10) Business Days’ prior notice to the Special Servicer
(provided, however, that the Note B Holder (unless a Control Appraisal Period has occurred and is continuing), Controlling
Noteholder Representative and/or Note B Holder shall not be liable for any termination or similar fee in connection with the removal
of the Special Servicer in accordance with this Section 7); such termination not be effective unless and until (A)
each Rating Agency delivers Rating Agency Confirmation (to the extent the Mortgage Loan has been securitized) to the extent required
under the Servicing Agreement; (B) the initial or successor Special Servicer has assumed in writing (from and after the date
such successor Special Servicer becomes the Special Servicer) all of the responsibilities, duties and liabilities of the Special
Servicer under the Servicing Agreement from and after the date it becomes the Special Servicer as they relate to such Mortgage
Loan pursuant to an assumption agreement reasonably satisfactory to the Trustee; (C) the Trustee shall have received an opinion
of counsel reasonably satisfactory to the Trustee to the effect that (x) the designation of such replacement to serve as Special
Servicer is in compliance with the Servicing Agreement, (y) such replacement will be bound by the terms of the Servicing Agreement
with respect to such Mortgage Loan and (z) subject to customary qualifications and exceptions, the applicable servicing agreement
will be enforceable against such replacement in accordance with its terms; and (D) the Certificate Administrator and any applicable
Non-Lead Certificate Administrator shall have filed any Form 8-K filings required pursuant to the applicable rules and regulations
of the Securities Exchange Act of 1934 as a result of any such replacement of the Special Servicer. The Lead Securitization Noteholder
(or the Servicer on its behalf) shall promptly provide copies

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to any terminated Special Servicer of
the documents referred to in the preceding sentence. Prior to the Securitization, if the Mortgage Loan becomes a Specially Serviced
Loan, and if not later than thirty (30) days after the Mortgage Loan becomes a Specially Serviced Loan the Note B Holder (unless
a Control Appraisal Period has occurred and is continuing) (or its Controlling Noteholder Representative) elects to replace the
Special Servicer, then each Noteholder agrees that no liquidation fees or workout fees shall be payable to the Special Servicer
being replaced, unless such Special Servicer shall have either successfully completed a workout or a liquidation, in which case
such fees shall be payable as provided herein.

The Controlling Noteholder
agrees and acknowledges that the Securitization Servicing Agreement may contain provisions such that any Special Servicer could
be terminated under the Securitization Servicing Agreement based on a recommendation by the Operating Advisor if (A) the Operating
Advisor determines, in its sole discretion exercised in good faith, that (1) the Special Servicer has failed to comply with
the Servicing Standard and (2) a replacement of the Special Servicer would be in the best interest of the holders of securities
issued under the Securitization Servicing Agreement (as a collective whole) and (B) an affirmative vote of requisite certificateholders
is obtained. The Controlling Noteholder will retain its right to remove and replace the Special Servicer, but the Controlling Noteholder
may not restore a Special Servicer that has been removed in accordance with the preceding sentence.

In addition, if an
event that would constitute a “Servicing Transfer Event” under the Model PSA occurs with respect to the Mortgage Loan
prior to the First Securitization, then the parties agree to negotiate in good faith an amendment to the interim servicing agreement,
or a separate special servicing agreement, to govern the special servicing of the Mortgage Loan until the First Securitization
occurs, it being understood that the special servicer shall be selected by the Controlling Noteholder as provided in this Agreement
and that such special servicing agreement shall otherwise be consistent with the Model PSA and subject to this Agreement.

Section 8.               
Payment Procedure.

(a)               
The Lead Securitization Noteholder (or the Servicer on its behalf), in accordance with the priorities set forth in Section 3
or Section 4, as applicable, and subject to the terms of the Servicing Agreement, will deposit or cause to be deposited
all payments allocable to the Notes to the Collection Account or Companion Distribution Account for the Notes established pursuant
to the Servicing Agreement. The Lead Securitization Noteholder (or the Servicer acting on its behalf) shall deposit such amounts
to the applicable account within two (2) Business Days after receipt of properly identified funds by the Lead Securitization Noteholder
(or the Servicer acting on its behalf) from or on behalf of the Mortgage Loan Borrower.

(b)              
If the Lead Securitization Noteholder (or the Servicer on its behalf) determines, or a court of competent jurisdiction orders,
at any time that any amount received or collected in respect of a Note must, pursuant to any insolvency bankruptcy, fraudulent
conveyance, preference or similar law, be returned to the Mortgage Loan Borrower or paid to such Noteholder or any Servicer or
paid to any other Person, then, notwithstanding any other provision of this Agreement, the Lead Securitization Noteholder (or the
Servicer on its behalf) shall not be required to distribute any portion thereof to such Noteholder and such Noteholder will promptly
on demand by the Lead Securitization Noteholder (or the Servicer on its behalf)

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repay to the Lead Securitization Noteholder
(or the Servicer on its behalf) any portion thereof that the Lead Securitization Noteholder (or the Servicer on its behalf) shall
have theretofore distributed to such Noteholder together with interest thereon at such rate, if any, as the Lead Securitization
Noteholder (or the Servicer on its behalf) shall have been required to pay to any Mortgage Loan Borrower, the Lead Securitization
Noteholder, Master Servicer, Special Servicer or such other Person with respect thereto.

(c)               
If, for any reason, the Lead Securitization Noteholder (or the Servicer on its behalf) makes any payment to the Note B Holder
before the Lead Securitization Noteholder (or the Servicer on its behalf) has received the corresponding payment (it being understood
that the Lead Securitization Noteholder (or the Servicer on its behalf) is under no obligation to do so), and the Lead Securitization
Noteholder (or the Servicer on its behalf) does not receive the corresponding payment within three (3) Business Days of its payment
to the Note B Holder, the Note B Holder will, at the Lead Securitization Noteholder’s (or the Servicer’s on its behalf)
request, promptly return that payment to the Lead Securitization Noteholder (or the Servicer on its behalf).

(d)              
Each Noteholder agrees that if at any time it shall receive from any sources whatsoever any payment on account of the Mortgage
Loan in excess of its distributable share thereof, it will promptly remit such excess to the Lead Securitization Noteholder (or
the Servicer on its behalf) subject to this Agreement and the Servicing Agreement. The Lead Securitization Noteholder (or the Servicer
on its behalf) shall have the right to offset any amounts due hereunder from any Noteholder with respect to the Mortgage Loan against
any future payments due to such Noteholder under the Mortgage Loan, provided, that each Noteholder’s obligations under this
Section 8 are separate and distinct obligations from one another and in no event shall the Lead Securitization Noteholder
(or the Servicer on its behalf) enforce the obligations of one of the Noteholder against the other Noteholders. Each Noteholder’s
obligations under this Section 8 constitute absolute, unconditional and continuing obligations.

Section 9.               
Limitation on Liability of the Noteholders. No Noteholder (including any Servicer on a Noteholder’s behalf)
shall have any liability to any other Noteholder except with respect to losses actually suffered due to the gross negligence, willful
misconduct or breach of this Agreement on the part of such Noteholder.

The Note B Holder
acknowledges that, subject to the terms and conditions hereof and the obligation of the Lead Securitization Noteholder (including
any Servicer) to comply with, and except as otherwise required by, the Servicing Standard, the Lead Securitization Noteholder (including
any Servicer) may exercise, or omit to exercise, any rights that the Lead Securitization Noteholder may have under this Agreement
and the Servicing Agreement in a manner that may be adverse to the interests of the Note B Holder and that the Lead Securitization
Noteholder (including any Servicer) shall have no liability whatsoever to the Note B Holder in connection with the Lead Securitization
Noteholder’s exercise of rights or any omission by the Lead Securitization Noteholder to exercise such rights other than
as described above; provided, however, that the Servicer must act in accordance with the Servicing Standard.

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The Note B Holder
acknowledges that, subject to the terms and conditions hereof and the obligation of each Non-Controlling Noteholder (including
any Non-Lead Servicer) to comply with, and except as otherwise required by, the servicing standard, each Non-Controlling Noteholder
(including any Non-Lead Servicer) may exercise, or omit to exercise, any rights that each Non-Controlling Noteholder may have under
this Agreement and the Servicing Agreement in a manner that may be adverse to the interests of the Note B Holder and that such
Non-Controlling Noteholder (including any Non-Lead Servicer) shall have no liability whatsoever to the Note B Holder in connection
with such Non-Controlling Noteholder’s exercise of rights or any omission by such Non-Controlling Noteholder to exercise
such rights other than as described above; provided, however, that the Non-Lead Servicer must act in accordance with the servicing
standard under the Non-Lead Servicing Agreement.

The Senior Noteholders
acknowledge that, subject to the terms and conditions hereof, the Note B Holder may exercise, or omit to exercise, any rights that
the Note B Holder may have under this Agreement and the Servicing Agreement in a manner that may be adverse to the interests of
the Senior Noteholders and that the Note B Holder shall have no liability whatsoever to the Senior Noteholders in connection with
the Note B Holder’s exercise of rights or any omission by the Note B Holder to exercise such rights; provided, however, that
the Note B Holder shall not be protected against any liability to the Senior Noteholders that would otherwise be imposed by reason
of willful misfeasance, bad faith or negligence.

Section 10.           
Bankruptcy. Subject to the provisions of Section 5(f) hereof, each Non-Controlling Noteholder and the
Note B Holder hereby covenants and agrees that only the Lead Securitization Noteholder (or the Servicer on its behalf) have the
right to institute, file, commence, acquiesce, petition under Bankruptcy Code Section 303 or otherwise or join any Person
in any such petition or otherwise invoke or cause any other Person to invoke an Insolvency Proceeding with respect to or against
the Mortgage Loan Borrower or seek to appoint a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar
official with respect to the Mortgage Loan Borrower or all or any part of its property or assets or ordering the winding-up or
liquidation of the affairs of the Mortgage Loan Borrower. Subject to the provisions of Section 5(f) hereof, each Non-Controlling
Noteholder and the Note B Holder further agrees that only the Lead Securitization Noteholder, as a creditor, can make any election,
give any consent, commence any action or file any motion, claim, obligation, notice or application or take any other action in
any case by or against the Mortgage Loan Borrower under the Bankruptcy Code or in any other Insolvency Proceeding. Each Non-Controlling
Noteholder and the Note B Holder hereby appoints the Lead Securitization Noteholder as its agent, and grants to the Lead Securitization
Noteholder an irrevocable power of attorney coupled with an interest, and its proxy, for the purpose of exercising any and all
rights and taking any and all actions available to each Non-Controlling Noteholder and the Note B Holder in connection with any
case by or against the Mortgage Loan Borrower under the Bankruptcy Code or in any other Insolvency Proceeding, including, without
limitation, the right to file and/or prosecute any claim, vote to accept or reject a plan, to make any election under Section 1111(b)
of the Bankruptcy Code with respect to the Mortgage Loan, and to file a motion to modify, lift or terminate the automatic stay
with respect to the Mortgage Loan. Each Non-Controlling Noteholder and the Note B Holder in its capacity as such, hereby agrees
that, upon the request of the Lead Securitization Noteholder, such Non-Controlling Noteholder or Note B Holder, as applicable,
shall execute, acknowledge and deliver to the Lead Securitization Noteholder all and every such

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further deeds, conveyances and instruments
as the Lead Securitization Noteholder may reasonably request for the better assuring and evidencing of the foregoing appointment
and grant. All actions taken by the Servicer in connection with any Insolvency Proceeding are subject to and must be in accordance
with the Servicing Standard.

Section 11.           
Cure Rights of Controlling Noteholder.

(a)               
Subject to Section 11(b) below, in the event that the Mortgage Loan Borrower fails to make any payment of principal
or interest on the Mortgage Loan by the end of the applicable grace period (the “Grace Period”) for such payment
permitted under the applicable Mortgage Loan Documents (a “Monetary Default”), the Lead Securitization Noteholder
shall provide notice to the Note B Holder and the Controlling Noteholder Representative of such default (the “Monetary
Default Notice”). The Note B Holder shall have the right, but not the obligation, to cure such Monetary Default within
five (5) Business Days after receiving the Monetary Default Notice (the “Cure Period”) and at no other times.
The Monetary Default Notice shall contain a statement that the Note B Holder’s failure to cure such Monetary Default within
five (5) Business Days after receiving such notice will result in the termination of the right to cure such Monetary Default. At
the time a payment is made to cure a Monetary Default, the Note B Holder shall pay or reimburse the Lead Securitization Noteholder
for all unreimbursed Advances (whether or not recoverable with respect to Senior Notes, including principal and interest advances
made with respect to Non-Lead Securitization Notes under the Non-Lead Servicing Agreement), Advance Interest Amounts, any unpaid
fees to any Servicer specifically provided for in the Servicing Agreement and any Additional Servicing Expenses. The Note B Holder
shall not be required, in order to effect a cure hereunder, to pay any default interest or late charges under the Loan Documents.
So long as a Monetary Default exists for which a cure payment permitted hereunder is made, such Monetary Default shall not be treated
as an Event of Default by the Lead Securitization Noteholder (including for purposes of (i) the definition of “Sequential
Pay Event,” (ii) accelerating the Mortgage Loan, modifying, amending or waiving any provisions of the Mortgage Loan Documents
or commencing proceedings for foreclosure or the taking of title by deed-in-lieu of foreclosure or other similar legal proceedings
with respect to the Mortgaged Property; or (iii) treating the Mortgage Loan as a Specially Serviced Loan); provided that
such limitation shall not prevent the Lead Securitization Noteholder from collecting Default Interest or late charges from the
Mortgage Loan Borrower. Any amounts advanced by a Noteholder on behalf of the Mortgage Loan Borrower to effect any cure shall be
reimbursable to such Noteholder under Section 3 or Section 4, as applicable.

(b)              
Notwithstanding anything to the contrary contained in Section 11(a), the Note B Holder shall be limited to a
combined total of four (4) cures of Monetary Defaults, no more than three (3) of which may be consecutive, or Non-Monetary Defaults
over the term of the Mortgage Loan. Additional Cure Periods shall only be permitted with the consent of the Lead Securitization
Noteholder.

(c)               
No action taken by the Note B Holder in accordance with this Agreement shall excuse performance by the Mortgage Loan Borrower
of its obligations under the Mortgage Loan Documents and the Senior Noteholder’s rights under the Mortgage Loan Documents
shall not be waived or prejudiced by virtue of the Note B Holder’s actions under this Agreement. Subject to the terms of
this Agreement, the Note B Holder shall be subrogated to the Senior

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Noteholder’s rights to any payment
owing to the Senior Noteholders for which the Note B Holder makes a cure payment as permitted under this Section 11
but such subrogation rights may not be exercised against the Mortgage Loan Borrower until 91 days after the Note is paid in full.

(d)              
If an Event of Default (other than a Monetary Default) occurs and is continuing under the Mortgage Loan Documents (a “Non-Monetary
Default”), the Lead Securitization Noteholder shall promptly provide notice to the Note B Holder and the Controlling
Noteholder Representative (in each case, unless a Control Appraisal Period has occurred and is continuing) of such failure (the
“Non-Monetary Default Notice”) and the Note B Holder (unless a Control Appraisal Period has occurred and is
continuing) shall have the right, but not the obligation, to cure such Non-Monetary Default within the same period of time as the
Mortgage Loan Borrower under the Mortgage Loan Documents to cure such Non-Monetary Default; provided, however, if
such Non-Monetary Default is susceptible of cure but cannot reasonably be cured within such period and if curative action was promptly
commenced and is being diligently pursued by the Note B Holder (unless a Control Appraisal Period has occurred and is continuing),
the Note B Holder (unless a Control Appraisal Period has occurred and is continuing) shall be given an additional period of time
as is reasonably necessary to enable the Note B Holder (unless a Control Appraisal Period has occurred and is continuing) in the
exercise of due diligence to cure such Non-Monetary Default for so long as (i) the Note B Holder (unless a Control Appraisal Period
has occurred and is continuing) diligently and expeditiously proceeds to cure such Non-Monetary Default, (ii) the Note B Holder
(unless a Control Appraisal Period has occurred and is continuing) makes all cure payments that it is permitted to make in accordance
with the terms and provisions of Section 11(a) hereof, (iii) such additional period of time does not exceed ninety
(90) days, (iv) such Non-Monetary Default is not caused by an Insolvency Proceeding or during such period of time that the Note
B Holder (unless a Control Appraisal Period has occurred and is continuing) has to cure a Non-Monetary Default in accordance with
this Section 11(d) (the “Non-Monetary Default Cure Period”), an Insolvency Proceeding does not occur
and (v) during such Non-Monetary Default Cure Period, there is no material adverse effect on the Mortgage Loan Borrower or the
Mortgaged Property or the value of the Mortgage Loan as a result of such Non-Monetary Default or the attempted cure. The Non-Monetary
Default Notice shall contain a statement in boldface font that the Note B Holder’s or the Controlling Noteholder Representative’s
failure to cure such Non-Monetary Default within the applicable Non-Monetary Default Cure Period after receiving such notice will
result in the termination of the right to cure such Non-Monetary Default. The Note B Holder (unless a Control Appraisal Period
has occurred and is continuing) shall not contact the Mortgage Loan Borrower in order to effect any cures under Sections 11(a)
or this 11(d) unless it is in conjunction with the Special Servicer or the Note B Holder (unless a Control Appraisal Period
has occurred and is continuing) has obtained the prior written consent of the Lead Securitization Noteholder.

Section 12.           
Purchase of the Senior Notes By Note B Holder.

The Note B Holder
shall have the right, by written notice to each Senior Noteholder (a “Noteholder Purchase Notice”), delivered
at any time an Event of Default under the Mortgage Loan has occurred and is continuing, to purchase, in immediately available funds,
Senior Notes in whole but not in part at the applicable Defaulted Mortgage Loan Purchase Price. For avoidance of doubt, if the
Note B Holder elects to exercise its right to purchase a Note

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pursuant to this Section 12,
it must purchase each Senior Note. Upon the delivery of the Noteholder Purchase Notice to each Senior Note, each Senior Noteholder
shall sell (and the Note B Holder shall purchase) the Senior Notes (including, without limitation, any Notes therein) at the applicable
Defaulted Mortgage Loan Purchase Price, on a date (the “Defaulted Note Purchase Date”) not less than ten (10)
days and not more than sixty (60) days after the date of the Noteholder Purchase Notice, as shall be mutually established by the
Lead Securitization Noteholder and the Note B Holder. In the event that the Note B Holder’s shall fail to purchase the Senior
Note on or prior to the Defaulted Note Purchase Date, then the Note B Holder shall no longer have the right to purchase the Senior
Notes under this Section 12 (other than as a result of any failure to consummate such purchase on the part of a Senior
Noteholder or as a result of the conditions giving rise to such purchase ceasing to exist prior to the Defaulted Note Purchase
Date). The Note B Holder agrees that the sale of the Senior Notes shall comply with all requirements of the Servicing Agreement
and that all costs and expenses related thereto shall be paid by the Note B Holder. The Defaulted Mortgage Loan Purchase Price
shall be calculated by the Lead Securitization Noteholder (or the Servicer on its behalf) three (3) Business Days prior to the
Defaulted Note Purchase Date (and such calculation shall be accompanied by a listing of all amounts included in the Defaulted Mortgage
Loan Purchase Price), and shall, absent manifest error, be binding upon the Note B Holder. Concurrently with the payment to each
Senior Noteholder in immediately available funds of its respective portion of the applicable Defaulted Mortgage Loan Purchase Price,
each Senior Noteholder will execute at the sole cost and expense of the Note B Holder in favor of the Note B Holder assignment
documentation which will assign the applicable Senior Notes and the Mortgage Loan Documents without recourse, representations or
warranties (except each Senior Noteholder will represent and warrant that it had good and marketable title to, was the sole owner
and holder of, and had power and authority to deliver the Mortgage Loan or Note, as applicable, free and clear of all liens and
encumbrances (other than the interest created by Note B)). The right of the Note B Holder to purchase the Senior Notes shall automatically
terminate upon a foreclosure sale, sale by power of sale or delivery of a deed in lieu of foreclosure with respect to the Mortgaged
Property (and the Lead Securitization Noteholder shall give the Note B Holder ten (10) days’ prior written notice of its
intent with respect to such action). Notwithstanding the foregoing sentence, if title to the Mortgaged Property is transferred
to the Servicer (or other nominee on behalf of the Noteholders) less than ten (10) days after the acceleration of the Mortgage
Loan, the Lead Securitization Noteholder shall notify the Note B Holder of such transfer and the Note B Holder shall have a fifteen (15)
day period from the date of such notice from the Lead Securitization Noteholder to deliver the Noteholder Purchase Notice to each
Senior Noteholder, in which case the Note B Holder will be obligated to purchase the Mortgaged Property, in immediately available
funds, within such fifteen (15) day period at the applicable Defaulted Mortgage Loan Purchase Price.

Section 13.           
Representations of Note B Holder. The Note B Holder represents, solely as to itself and Note B, and it is specifically
understood and agreed, that it is acquiring the Note B for its own account in the ordinary course of its business and each Senior
Noteholder shall otherwise have no liability or responsibility to the Note B Holder except as expressly provided herein or for
actions that are taken or omitted to be taken by such Senior Noteholder that constitute gross negligence or willful misconduct
or that constitute a breach of this Agreement. The Note B Holder represents and warrants that the execution, delivery and performance
of this Agreement is within its corporate powers, has been duly authorized by all necessary corporate action, and does not contravene
its charter or any law or contractual

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restriction binding upon the Note B
Holder, and that this Agreement is the legal, valid and binding obligation of the Note B Holder enforceable against the Note B
Holder in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors’ rights generally, and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law), and except that the enforcement of rights with
respect to indemnification and contribution obligations may be limited by applicable law. The Note B Holder represents and warrants
that it is duly organized, validly existing, in good standing and possesses of all licenses and authorizations necessary to carry
on its business. The Note B Holder represents and warrants that (a) this Agreement has been duly executed and delivered by the
Note B Holder, (b) to the Note B Holder’s actual knowledge, all consents, approvals, authorizations, orders or filings of
or with any court or governmental agency or body, if any, required for the execution, delivery and performance of this Agreement
by the Note B Holder have been obtained or made and (c) to the Note B Holder’s actual knowledge, there is no pending action,
suit or proceeding, arbitration or governmental investigation against the Note B Holder, an adverse outcome of which would materially
and adversely affect its performance under this Agreement.

The Note B Holder
acknowledges that the Senior Noteholders do not owe the Note B Holder any fiduciary duty with respect to any action taken under
the Mortgage Loan Documents and, except as provided herein, need not consult with the Note B Holder with respect to any action
taken by a Senior Noteholder in connection with the Mortgage Loan.

The Note B Holder
expressly and irrevocably waives for itself and any Person claiming through or under the Note B Holder any and all rights that
it may have under Section 1315 of the New York Real Property Actions and Proceedings Law or the provisions of any similar
law which purports to give a junior loan Noteholder the right to initiate any loan enforcement or foreclosure proceedings.

Section 14.           
Representations of the Senior Noteholder. Each Senior Noteholder represents and warrants that the execution, delivery
and performance of this Agreement is within their corporate powers, has been duly authorized by all necessary corporate action,
and does not contravene such Senior Noteholder’s charter or any law or contractual restriction binding upon such Senior Noteholder,
and that this Agreement is the legal, valid and binding obligation of such Senior Noteholder enforceable against it in accordance
with its terms. Each Senior Noteholder represents and warrants that it is duly organized, validly existing, in good standing and
possession of all licenses and authorizations necessary to carry on their business. Each Senior Noteholder represents and warrants
that (a) this Agreement has been duly executed and delivered by such Senior Noteholder, (b) to such Senior Noteholder’s
actual knowledge, all consents, approvals, authorizations, orders or filings of or with any court or governmental agency or body,
if any, required for the execution, delivery and performance of this Agreement by such Senior Noteholder have been obtained or
made and (c) to such Senior Noteholder’s actual knowledge, there is no pending action, suit or proceeding, arbitration
or governmental investigation against such Senior Noteholder, an adverse outcome of which would materially and adversely affect
its performance under this Agreement.

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Section 15.           
Independent Analysis of the Note B Holder. The Note B Holder acknowledges that it has, independently and without
reliance upon the Senior Noteholders, except with respect to the representations and warranties provided by the Senior Noteholders
herein, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to
purchase the Note B and the Note B Holder accepts responsibility therefor. The Note B Holder hereby acknowledges that, other than
the representations and warranties provided herein, the Senior Noteholders have made no representations or warranties with respect
to the Mortgage Loan, subject to such representations and warranties as provided by the Senior Noteholders herein, and that the
Senior Noteholders shall have no responsibility for (i) the collectibility of the Mortgage Loan, (ii) the validity, enforceability
or legal effect of any of the Mortgage Loan Documents or the title insurance policy or policies or any survey furnished or to
be furnished to the Senior Noteholders in connection with the origination of the Mortgage Loan, (iii) the validity, sufficiency
or effectiveness of the lien created or to be created by the Mortgage Loan Documents, or (iv) the financial condition of the Mortgage
Loan Borrower. The Note B Holder assumes all risk of loss in connection with the Note B except as specifically set forth herein.

Section 16.           
No Creation of a Partnership or Exclusive Purchase Right. Nothing contained in this Agreement, and no action taken
pursuant hereto shall be deemed to constitute the relationship created hereby among any of the Noteholders as a partnership, association,
joint venture or other entity. No Senior Noteholder shall have any obligation whatsoever to offer to the Note B Holder the opportunity
to purchase a Note interest in any future loans originated by such Senior Noteholder or their Affiliates and if any Senior Noteholder
chooses to offer to the Note B Holder the opportunity to purchase a Note interest in any future mortgage loans originated by such
Senior Noteholder or their Affiliates, such offer shall be at such purchase price and interest rate as such Senior Noteholder chooses,
in its sole and absolute discretion. The Note B Holder shall not have any obligation whatsoever to purchase from such Senior Noteholder
a Note interest in any future loans originated by such Senior Noteholder or their Affiliates.

Section 17.           
Not a Security. The Note B shall not be deemed to be a security within the meaning of the Securities Act of 1933
or the Securities Exchange Act of 1934.

Section 18.           
Other Business Activities of the Noteholders. The Note B Holder acknowledges that each Senior Noteholder or their
respective Affiliates may make loans or otherwise extend credit to, and generally engage in any kind of business with, the Mortgage
Loan Borrower or any direct or indirect parent or Affiliate thereof, any entity that is a holder of debt secured by direct or indirect
ownership interests in the Mortgage Loan Borrower or any Affiliate thereof or any entity that is a holder of a preferred equity
interest in the Mortgage Loan Borrower or any Affiliate thereof (each, a “Mortgage Loan Borrower Related Party”),
and receive payments on such other loans or extensions of credit to Mortgage Loan Borrower Related Parties and otherwise act with
respect thereto freely and without accountability in the same manner as if this Agreement and the transactions contemplated hereby
were not in effect.

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Section 19.           
Sale of the Notes.

(a)               
The Note B Holder agrees that it will not Transfer all or any portion of Note B except in accordance with this Section 19.
The Note B Holder shall have the right, without the need to obtain the consent of the Senior Noteholders or any other Person, to
Transfer 49% or less (in the aggregate) of its interest in Note B to any Person; provided that any such Transfer shall be made
in accordance with the terms of Section 19(b) and (c). The Note B Holder shall have the right at any time to Transfer its Note,
or any portion thereof, to (i) a Qualified Institutional Lender without obtaining any Senior Noteholder’s prior written consent,
provided that promptly after such Transfer, each Senior Noteholder is provided with (x) a representation from a transferee or the
Note B Holder certifying that such transferee is a Qualified Institutional Lender, and (y) a copy of the assignment and assumption
agreement referred to in Section 19(b); or (ii) an entity that is not a Qualified Institutional Lender, provided that (x) if such
Transfer is prior to the First Securitization and is of more than 49% (in the aggregate) of the interest in Note B, each Senior
Noteholder’s prior written consent shall be required (which consent shall not be unreasonably withheld, conditioned or delayed),
and (y) after the First Securitization, no consent of applicable Senior Noteholder shall be required, but, if such Transfer is
of more than 49% (in the aggregate) of the interest in Note B, then the Note B Holder shall first obtain (and deliver to the applicable
Senior Noteholder) Rating Agency Confirmation. Notwithstanding the foregoing, no such transfer shall be permitted to the extent
it would cause Note B to be held by more than five persons, and, without each Senior Noteholder’s prior consent (which may
be withheld in such Senior Noteholder’s sole discretion), the Note B Holder shall not Transfer all or any portion of Note
B to the Mortgage Loan Borrower or a Mortgage Loan Borrower Related Party and any such Transfer shall be absolutely null and void
and shall vest no rights in the purported transferee.

(b)              
All Transfers under Section 19(a) shall be made upon written notice to the Senior Noteholders not later than
the date of such Transfer, and each transferee shall (i) execute an assignment and assumption agreement whereby such transferee
assumes all or a ratable portion, as the case may be, of the obligations of the Note B Holder hereunder with respect to Note B
from and after the date of such assignment (or, in the case, of a pledge, collateral assignment or other encumbrance made in accordance
with Section 19(e) by the Note B Holder of Note B solely as security for a loan to the Note B Holder made by a third-party
lender whereby the Note B Holder remains fully liable under this Agreement, on or before the date on which such lender succeeds
to the rights of the Note B Holder by foreclosure or otherwise, such third-party lender executes an agreement that such lender
shall be bound by the terms and provisions of this Agreement and the obligations of the Note B Holder hereunder) and (ii) agree
and acknowledge that the servicing of the Mortgage Loan shall be governed by the Servicing Agreement, unless the Servicing Agreement
is not then in effect with respect to the Mortgage Loan, in which event the parties will enter into or agree to be bound by any
replacement servicing agreement therefor in accordance with the provisions hereof. The Agent shall provide prompt written notice
to each Rating Agency of any Transfer of all or any portion of Note B. Upon the consummation of a Transfer of all or any portion
of Note B in accordance with this Agreement, the transferring Person shall be released from all liability arising under this Agreement
with respect to Note B (or the portion thereof that was the subject of such Transfer), for the period after the effective date
of such Transfer (it being understood and agreed that the foregoing release shall not apply in the case of a sale, assignment,
transfer or other disposition of

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a participation interest in Note B as
described in clause (c) below). The Note B Holder agrees it will pay the reasonable out-of-pocket expenses of each Senior
Noteholder (including all expenses of the Master Servicer and the Special Servicer) in connection with any such Transfer. If Note
B is held by more than one Noteholder at any time, the holders of Note B shall promptly appoint a representative to serve as the
sole point of contact on behalf of all such holders of Note B hereunder (which such representative may be replaced from time to
time by such holders upon written notice to each Servicer), which representative will also be the Controlling Noteholder Representative
hereunder when the Note B Holder is the Controlling Noteholder hereunder. Any such representative shall be either (i) a Qualified
Institutional Lender or (ii) a person that has been approved by the holders of any Senior Notes that have not been included in
a Securitization and as to which a Rating Agency Confirmation has been received with respect to any Senior Notes that have been
included in a Securitization. The Senior Noteholders need only recognize such representative for purposes of notices, consents
and other communications between the Senior Noteholders and the Note B Holder, and such representative shall be the only Person
recognized to exercise the rights of the Note B Holder (it being understood that (x) the holders of Note B collectively hold the
rights of the Note B Holder under this Agreement and may separately agree among themselves as to the manner in which such holders
direct such representative to exercise the rights of the Note B Holder under this Agreement and (y) the Senior Noteholders (and
any Servicer) shall have no responsibility for, under or otherwise with respect to any such separate agreement and shall be entitled
to rely solely on the statements and actions of such representative as regards the exercise of such rights).

(c)               
In the case of any sale, assignment, transfer or other disposition of a participation interest in a Note, (i) such
Noteholder’s obligations under this Agreement shall remain unchanged, (ii) such Noteholder shall remain solely responsible
for the performance of such obligations, (iii) the other Noteholder and any Persons acting on its behalf shall continue to
deal solely and directly with such Noteholder in connection with such Noteholder’s rights and obligations under this Agreement
and the Servicing Agreement, and (iv) all amounts payable hereunder shall be determined as if such Noteholder had not sold such
participation interest; provided, however, that if the applicable participant is a Qualified Institutional Lender
(and delivers to the other Noteholder a certification from an authorized officer confirming its status as a Qualified Institutional
Lender), such Noteholder, by written notice to the other Noteholder, may delegate to such participant such Noteholder’s right
to exercise the rights of the Note B Holder hereunder and under the Servicing Agreement; provided, further,
however, that upon the occurrence of a Control Appraisal Period with respect to Note B, the aforesaid delegation of rights
shall terminate and be of no further force and effect.

(d)              
Each Senior Noteholder agrees that it will not Transfer its related Note except to a Qualified Institutional Lender. Promptly
after the Transfer, each non-transferring Senior Noteholder shall be provided with (x) a representation from a transferee or the
applicable Senior Noteholder certifying that such transferee is a Qualified Institutional Lender (except in the case of a Transfer
to a Securitization (and the related pooling and servicing or similar agreement requires the parties thereto to comply with this
Agreement) or in accordance with the immediately following sentence) and (y) a copy of the assignment and assumption agreement
referred to in Section 19(b). If a Senior Noteholder intends to Transfer its respective Note, or any portion thereof, to
an entity that is not a Qualified Institutional Lender, it must first obtain (x) prior to a Securitization, the consent of each
non-transferring Senior Noteholder or (2) after a

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Securitization of a Senior Noteholder,
a Rating Agency Confirmation. Notwithstanding the foregoing, no Senior Noteholder shall Transfer all or any portion of its Note
A to the Mortgage Loan Borrower or a Mortgage Loan Borrower Related Party and any such Transfer shall be absolutely null and void
and shall vest no rights in the purported transferee; provided that the foregoing provision shall not preclude the Transfer
of any Note A into a Securitization so long as the related Securitization Servicing Agreement or Non-Lead Servicing Agreement
contains provisions limiting the rights of borrower affiliates to access certain information, consent to certain matters and act
as the special servicer that are comparable to the Model PSA.

(e)               
Notwithstanding any other provision hereof, any Noteholder may pledge (a “Pledge”) its Note to any entity
(other than the Mortgage Loan Borrower or any Affiliate thereof) which has extended a credit or repurchase facility to such Noteholder
and that is either a Qualified Institutional Lender or a financial institution whose long-term unsecured debt is rated at least
“A” (or the equivalent) or better by each Rating Agency (a “Note Pledgee”), on terms and conditions
set forth in this Section 19(e), it being further agreed that a financing provided by a Note Pledgee to a Noteholder
or any person which Controls such Noteholder that is secured by such Noteholder’s interest in the applicable Note and is
structured as a repurchase arrangement, shall qualify as a “Pledge” hereunder, provided that a Note Pledgee which is
not a Qualified Institutional Lender may not take title to the pledged Note without the consent of each other Noteholder of a Note
that is not in a Securitization, and, after the First Securitization, Rating Agency Confirmation. Upon written notice by the applicable
Noteholder to the other Noteholders and any Servicer that a Pledge has been effected (including the name and address of the applicable
Note Pledgee), each of the other holders agrees to acknowledge receipt of such notice and thereafter agrees: (i) to give Note
Pledgee written notice of any default by the pledging Noteholder in respect of its obligations under this Agreement of which default
such Noteholder has actual knowledge; (ii) to allow such Note Pledgee a period of ten (10) Business Days to cure a default
by the pledging Noteholder in respect of its obligations to the other Noteholder hereunder, but such Note Pledgee shall not be
obligated to cure any such default; (iii) that no amendment, modification, waiver or termination of this Agreement shall be
effective against such Note Pledgee without the written consent of such Note Pledgee, which consent shall not be unreasonably withheld,
conditioned or delayed; (iv) that such other Noteholder shall give to such Note Pledgee copies of any notice of default under
this Agreement simultaneously with the giving of same to the pledging Noteholder and accept any cure thereof by such Note Pledgee
which such pledging Noteholder has the right (but not the obligation) to effect hereunder, as if such cure were made by such pledging
Noteholder; (v) that such other Noteholder shall deliver to Note Pledgee such estoppel certificate(s) as Note Pledgee shall
reasonably request, provided that any such certificate(s) shall be in a form reasonably satisfactory to such other Noteholder;
and (vi) that, upon written notice (a “Redirection Notice”) to the other Noteholders and any Servicer by
such Note Pledgee that the pledging Noteholder is in default, beyond any applicable cure periods, under the pledging Noteholder’s
obligations to such Note Pledgee pursuant to the applicable credit agreement between the pledging Noteholder and such Note Pledgee
(which notice need not be joined in or confirmed by the pledging Noteholder), and until such Redirection Notice is withdrawn or
rescinded by such Note Pledgee, Note Pledgee shall be entitled to receive any payments that any Noteholder or Servicer would otherwise
be obligated to pay to the pledging Noteholder from time to time pursuant to this Agreement or any Servicing Agreement. Any pledging
Noteholder hereby unconditionally and absolutely releases the other Noteholders and any Servicer from any liability to the pledging
Noteholder on account of any

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Noteholder’s or Servicer’s
compliance with any Redirection Notice believed by any Servicer or any such other Noteholder to have been delivered by a Note Pledgee.
Note Pledgee shall be permitted to exercise fully its rights and remedies against the pledging Noteholder to such Note Pledgee
(and accept an assignment in lieu of foreclosure as to such collateral), in accordance with applicable law and this Agreement.
In such event, the Noteholders and any Servicer shall recognize such Note Pledgee (and any transferee other than the Mortgage Loan
Borrower or any Affiliate thereof which is also a Qualified Institutional Lender at any foreclosure or similar sale held by such
Note Pledgee or any transfer in lieu of foreclosure), and its successor and assigns, as the successor to the pledging Noteholder’s
rights, remedies and obligations under this Agreement, and any such Note Pledgee or Qualified Institutional Lender shall assume
in writing the obligations of the pledging Noteholder hereunder accruing from and after such Transfer (i.e., realization upon the
collateral by such Note Pledgee) and agrees to be bound by the terms and provisions of this Agreement. The rights of a Note Pledgee
under this Section 19(e) shall remain effective as to any Noteholder (and any Servicer) unless and until such Note
Pledgee shall have notified any such Noteholder (and any Servicer, as applicable) in writing that its interest in the pledged Note
has terminated.

(f)               
Notwithstanding any provisions herein to the contrary, if a conduit (“Conduit”) which is not a Qualified
Institutional Lender provides financing to a Noteholder then such Noteholder shall have the right to grant a security interest
in its Note to such Conduit notwithstanding that such Conduit is not a Qualified Institutional Lender, if the following conditions
are satisfied:

(i)           
The loan (the “Conduit Inventory Loan”) made by the Conduit to such Noteholder to finance the acquisition
and holding of its Note will require a third party (the “Conduit Credit Enhancer”) to provide credit enhancement;

(ii)           
The Conduit Credit Enhancer and conduit manager (if Moody’s rates the Securitization) will be a Qualified Institutional
Lender;

(iii)           
Such Noteholder will pledge (or sell, transfer or assign as part of a repurchase facility) its interest in the applicable
Note to the Conduit as collateral for the Conduit Inventory Loan;

(iv)           
The Conduit Credit Enhancer and the Conduit will agree that, if such Noteholder defaults under the Conduit Inventory Loan,
or if the Conduit is unable to refinance its outstanding commercial paper even if there is no default by such Noteholder, the Conduit
Credit Enhancer will purchase the Conduit Inventory Loan from the Conduit, and the Conduit will assign the pledge of such Noteholder’s
Note to the Conduit Credit Enhancer; and

(v)           
Unless the Conduit is in fact then a Qualified Institutional Lender, the Conduit will not, without obtaining the consent
of each other Noteholder, have any greater right to acquire the interests in the Note pledged by such Noteholder, by foreclosure
or otherwise, than would any other purchaser that is not a Qualified Institutional Lender at a foreclosure sale conducted by a
Note Pledgee.

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Section 20.           
Registration of Transfer. In connection with any Transfer of a Note (but excluding any participant and Pledgee unless
and until it realizes on its Pledge), a transferee shall execute an assignment and assumption agreement whereby such transferee
assumes all of the obligations of the applicable Noteholder hereunder with respect to such Note thereafter accruing and agrees
to be bound by the terms of this Agreement, including the restriction on Transfers set forth in Section 19, from
and after the date of such assignment. Notwithstanding the preceding sentence, a Trustee shall not be required to execute an assignment
and assumption agreement in connection with any Transfer of a Note if the obligations are assumed pursuant to the Servicing Agreement.
No transfer of a Note may be made unless it is registered on the Note Register, and the Agent shall not recognize any attempted
or purported transfer of any Note in violation of the provisions of Section 19 and this Section 20.
Any such purported transfer shall be absolutely null and void and shall vest no rights in the purported transferee. Each Noteholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the Agent and any other Noteholder against any liability
that may result if the transfer is not made in accordance with the provisions of this Agreement. Upon a Securitization, the Servicer
of the Lead Securitization shall automatically become and be the Agent.

Section 21.           
Registration of the Notes. The Agent shall keep or cause to be kept at the Agent Office books (the “Note
Register”) for the registration and transfer of the Notes. The Agent shall serve as the initial Note registrar and the
Agent hereby accepts such appointment. The names and addresses of the holders of the Notes and the names and addresses of any transferee
of any Note of which the Agent has received notice, in the form of a copy of the assignment and assumption agreement referred to
in Section 20, shall be registered in the Note Register. The Person in whose name a Note is so registered shall be
deemed and treated as the sole owner and holder thereof for all purposes of this Agreement, except in the case of the Initial Noteholders
who may hold their Notes through a nominee. Upon request of a Noteholder, the Agent shall provide such party with the names and
addresses of the Noteholders. To the extent another party is appointed as Agent hereunder, each Senior Noteholder and the Note
B Holder hereby designates such person as its agent under this Section 21 solely for purposes of maintaining the Note
Register.

Section 22.           
Statement of Intent. The Agent and each Noteholder intend that the Notes be classified and maintained as a grantor
trust under subpart E, part I of subchapter J of chapter 1 of the Code that is a fixed investment trust within the meaning of Treasury
Regulation §301.7701-4(c), and the parties will not take any action inconsistent with such classification. It is neither the
purpose nor the intent of this Agreement to create a partnership, joint venture, “taxable mortgage pool” or association
taxable as a corporation among the parties.

Section 23.           
No Pledge. This Agreement shall not be deemed to represent a pledge of any interest in any Mortgage Loan by any Noteholder
to another Noteholder. Except as otherwise provided in this Agreement and the Servicing Agreement, the Note B Holder shall not
have any interest in any property taken as security for any Mortgage Loan; provided, however, that if any such property
or the proceeds of any sale, lease or other disposition thereof shall be received, then the Note B Holder shall be entitled to
receive its share of such application in accordance with the terms of this Agreement and/or the Servicing Agreement.

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Section 24.           
Cooperation in Securitization.

(a)               
Each Noteholder acknowledges that any Noteholder may elect, in its sole discretion, to include its Note in a Securitization.
In connection with a Securitization of a Senior Note, at the request of the related Noteholder, each other Noteholder shall use
commercially reasonable efforts, at the requesting Noteholder’s expense, to satisfy, and to cooperate with the requesting
Noteholder in attempting to cause the Mortgage Loan Borrower to satisfy, the market standards to which the requesting Noteholder
customarily adheres or which may be reasonably required in the marketplace or by the Rating Agencies in connection with the Securitization,
including, entering into (or consenting to, as applicable) any modifications to this Agreement or the Mortgage Loan Documents and
to cooperate with the requesting Noteholder in attempting to cause the Mortgage Loan Borrower to execute such modifications to
the Mortgage Loan Documents, in any such case, as may be reasonably requested by the Rating Agencies to effect the Securitization;
provided, however, that either in connection with the Securitization or otherwise at any time prior to the Securitization no other
Noteholder shall be required to modify or amend this Agreement or any Mortgage Loan Documents (or consent to such modification,
as applicable) in connection therewith, if such modification or amendment would (i) change the interest allocable to, or the amount
of any payments due to or priority of any payments to be made to, such Noteholder, (ii) increase such Noteholder’s obligations
or decrease such Noteholder’s rights, remedies or protections hereunder or under any Mortgage Loan Document, or (iii) otherwise
adversely affect in more than a de minimis manner the rights and interests of such Noteholder. In connection with any such
Securitization of a Senior Note, each other Noteholder agrees to provide for inclusion in any disclosure document relating to the
related Securitization such customary non-confidential information concerning such Noteholder as the requesting Noteholder reasonably
determines to be necessary to satisfy its disclosure obligations in connection with its Securitization. Each Noteholder covenants
and agrees that if it is not the requesting Noteholder, it shall use commercially reasonable efforts to cooperate with the requests
of each Rating Agency and the requesting Noteholder in connection with the preparation of any offering documents in connection
with the Securitization, and to review and respond reasonably promptly with respect to any information relating to it in any Securitization
document, all at the cost and expense of the requesting Noteholder. Each Noteholder acknowledges that the information provided
by it to the requesting Noteholder pursuant to this Section 24 may be incorporated into the offering documents for a Securitization.
A requesting Senior Noteholder and each Rating Agency shall be entitled to rely on the information supplied by each other Noteholder
pursuant to this Section 24.

(b)              
The Senior Noteholder securitizing its Note may, at its election, deliver to each other Noteholder drafts of the preliminary
and final Securitization offering memoranda, prospectus, preliminary prospectus and any other disclosure documents and (in the
case of the Lead Securitization) the Servicing Agreement simultaneously with distributions of any such documents to the general
working group of the related Securitization. Each other Noteholder may, at its election, review and comment thereon insofar as
it relates to such other Noteholder and/or its Note, and, if such other Noteholder elects to review and comment, such other Noteholder
shall review and comment thereon as soon as possible (but in no event later than (i) in the case of the first draft thereof,
two (2) Business Days after receipt thereof and (ii) in the case of each subsequent draft thereof, the deadline provided to the
general working group of the related Securitization for review and comment), and if such other Noteholder fails to respond

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within such time, such other Noteholder
shall be deemed to have elected to not comment thereon. In the event of any disagreement between any such other Noteholder with
respect to the preliminary and final offering memoranda, prospectus, free writing prospectus or any other disclosure documents
the requesting Noteholder’s determination shall control. No such other Noteholder shall have any obligation or liability
with respect to any such offering documents other than the accuracy of any comments it elects to make regarding itself.

(c)               
Notwithstanding anything herein to the contrary, each Noteholder acknowledges and agrees that (i) no other Noteholder shall
be required to incur any out-of-pocket expenses in connection with its Securitization of such Note, and (ii) any such other Noteholder
shall only be required to disclose such customary non-confidential information reasonably determined by the requesting Noteholder
to be necessary to satisfy its disclosure obligations in connection with its Securitization.

(d)              
If the Mortgage Loan becomes a Specially Serviced Loan and the Special Servicer determines to sell any of the Lead Securitization
Note in accordance with the Securitization Servicing Agreement, it shall have the right and the obligation to sell all of the Notes
as notes evidencing one whole loan in accordance with the terms of the Securitization Servicing Agreement and this Agreement. In
connection with any such sale, the Special Servicer shall provide notice to each Non-Controlling Noteholder of the planned sale
and of such Non-Controlling Noteholder’s opportunity to bid on the Mortgage Loan.

Section 25.           
Governing Law; Waiver of Jury Trial. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED
TO THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AGREEMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND
DUTIES OF THE PARTIES TO THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

Section 26.           
Submission To Jurisdiction; Waivers. Each party hereto hereby irrevocably and unconditionally:

(a)               
SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK,
THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

(b)              
CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF

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ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

(c)               
AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED
OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH HEREIN OR AT SUCH OTHER
ADDRESS OF WHICH A PARTY HEREIN SHALL HAVE BEEN NOTIFIED; AND

(d)              
AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION.

Section 27.           
Modifications. This Agreement shall not be modified, cancelled or terminated except by an instrument in writing signed
by the parties hereto. The Agent shall provide two Business Days prior written notice to each Rating Agency of any material modification
to this Agreement. For as long as any Note is contained in a Securitization Trust, the Noteholders shall not amend or modify this
Agreement without first obtaining a Rating Agency Confirmation from each Rating Agency then rating securities of any Securitization;
provided that no such Rating Agency Confirmation shall be required in connection with a modification (i) to cure any ambiguity,
to correct or supplement any provisions herein that may be defective or inconsistent with any other provisions herein or with the
Securitization Servicing Agreement, or (ii) with respect to matters or questions arising under this Agreement, to make provisions
of this Agreement consistent with other provisions of this Agreement (including, without limitation, in connection with the creation
of New Notes pursuant to Section 39). Any amendment to the provisions of this Agreement relating to the May-July 2020 Deferred
Interest Payment shall require the prior written consent of BANA.

Section 28.           
Successors and Assigns; Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns. Except (i) for BANA at any time it is not otherwise a party to
this Agreement as a Noteholder and then only with respect to the provisions of this Agreement relate to the May-July 2020 Deferred
Interest Payment, and (ii) as otherwise provided herein, none of the provisions of this Agreement shall be for the benefit of or
enforceable by any Person not a party hereto. Subject to Section 19, each Noteholder may assign or delegate its rights
or obligations under this Agreement. Upon any such assignment, the assignee shall be entitled to all rights and benefits of the
applicable Noteholder hereunder, including, without limitation, the right to make further assignments and the creation of New Notes
pursuant to Section 39.

Section 29.           
Counterparts. This Agreement may be executed in counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute one and the same instrument, and the words “executed,”
“signed,” “signature,” and words of like import as used above and elsewhere in this Agreement or in any
other certificate, agreement or document related to this transaction shall include, in addition to manually executed signatures,
images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf”,
“tif” or “jpg”) and other

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electronic signatures (including, without
limitation, any electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed
or adopted by a person with the intent to sign the record). The use of electronic signatures and electronic records (including,
without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means)
shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping
system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any
state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.

Section 30.           
Captions. The titles and headings of the paragraphs of this Agreement have been inserted for convenience of reference
only and are not intended to summarize or otherwise describe the subject matter of the paragraphs and shall not be given any consideration
in the construction of this Agreement.

Section 31.           
Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable laws,
such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

Section 32.           
Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto with respect to the subject
matter contained in this Agreement and supersedes all prior agreements, understandings and negotiations between the parties.

Section 33.           
Withholding Taxes.

(a)               
If a Senior Noteholder or the Mortgage Loan Borrower shall be required by law to deduct and withhold Taxes from interest,
fees or other amounts payable to the Note B Holder with respect to the Mortgage Loan as a result of the Note B Holder constituting
a Non-Exempt Person, the Lead Securitization Noteholder, in its capacity as servicer, shall be entitled to do so with respect to
the Note B Holder’s interest in such payment (all withheld amounts being deemed paid to the Note B Holder), provided that
the Lead Securitization Noteholder shall furnish the Note B Holder with a statement setting forth the amount of Taxes withheld,
the applicable rate and other information which may reasonably be requested for purposes of assisting the Note B Holder to seek
any allowable credits or deductions for the Taxes so withheld in each jurisdiction in which the Note B Holder is subject to tax.

(b)              
The Note B Holder shall and hereby agrees to indemnify the Lead Securitization Noteholder against and hold the Lead Securitization
Noteholder harmless from and against any Taxes, interest, penalties and attorneys’ fees and disbursements arising or resulting
from any failure of the Lead Securitization Noteholder (or the Servicer on its behalf) to withhold Taxes from payment made to the
Note B Holder in reliance upon any representation, certificate, statement, document or instrument made or provided by the Note
B Holder to the Lead Securitization Noteholder in connection with the obligation of the Lead Securitization

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Noteholder to withhold Taxes from payments
made to the Note B Holder, it being expressly understood and agreed that (i) the Lead Securitization Noteholder shall be absolutely
and unconditionally entitled to accept any such representation, certificate, statement, document or instrument as being true and
correct in all respects and to fully rely thereon without any obligation or responsibility to investigate or to make any inquiries
with respect to the accuracy, veracity, correctness or validity of the same and (ii) the Note B Holder shall, upon request of the
Lead Securitization Noteholder and at its sole cost and expense, defend any claim or action relating to the foregoing indemnification
using counsel selected by the Lead Securitization Noteholder.

(c)               
The Note B Holder represents to the Senior Noteholders (for the benefit of the Mortgage Loan Borrower) that it is not a
Non-Exempt Person and that neither the Lead Securitization Noteholder nor the Mortgage Loan Borrower is obligated under applicable
law to withhold Taxes on sums paid to it with respect to the Mortgage Loan or otherwise pursuant to this Agreement. Contemporaneously
with the execution of this Agreement and from time to time as necessary during the term of this Agreement, the Note B Holder shall
deliver to the Lead Securitization Noteholder or Servicer, as applicable, evidence satisfactory to the Lead Securitization Noteholder
substantiating that the Note B Holder is not a Non-Exempt Person and that the Lead Securitization Noteholder is not obligated under
applicable law to withhold Taxes on sums paid to it with respect to the Mortgage Loan or otherwise under this Agreement. Without
limiting the effect of the foregoing, (i) if the Note B Holder is created or organized under the laws of the United States, any
state thereof or the District of Columbia, it shall satisfy the requirements of the preceding sentence by furnishing to the Lead
Securitization Noteholder an Internal Revenue Service Form W-9 and (ii) if the Note B Holder is not created or organized under
the laws of the United States, any state thereof or the District of Columbia, and if the payment of interest or other amounts by
the Mortgage Loan Borrower is treated for United States income tax purposes as derived in whole or part from sources within the
United States, the Note B Holder shall satisfy the requirements of the preceding sentence by furnishing to the Lead Securitization
Noteholder Internal Revenue Service Form W-8ECI, Form W-8IMY (with appropriate attachments) or Form W-8BEN, or successor forms,
as may be required from time to time, duly executed by the Note B Holder, as evidence of the Note B Holder’s exemption from
the withholding of United States tax with respect thereto. The Lead Securitization Noteholder shall not be obligated to make any
payment hereunder to the Note B Holder in respect of the Note B or otherwise until the Note B Holder shall have furnished to the
Lead Securitization Noteholder the requested forms, certificates, statements or documents.

Section 34.           
Custody of Mortgage Loan Documents. Prior to the First Securitization, the originals of all of the Mortgage Loan
Documents (except for the Notes) shall be held by a duly appointed custodian of the Initial Agent on behalf of the registered holders
of the Notes, and each of the Notes shall be held by its respective Noteholder or a duly appointed custodian of such Noteholder.
If the First Securitization includes Note A-1, on and after the Securitization Date, the originals of all of the Mortgage Loan
Documents (except for the Notes other than Note A-1 and any other Notes included in such First Securitization) shall be transferred
to and held in the name of the trustee (and held by a duly appointed custodian therefor) under the Securitization Servicing Agreement,
on behalf of the registered holders of the Notes. If the First Securitization does not include Note A-1, then (a) for the period
beginning upon the closing of such First Securitization and ending upon the Securitization Date, the

    61 

    	 

    

originals of all of the Mortgage Loan
Documents (except for the Notes other than the Notes included in such First Securitization) shall be held in the name of the trustee
(and held by a duly appointed custodian therefor) under the applicable First Securitization Note PSA, on behalf of the registered
holders of the Notes; and (b) on and after the Securitization Date, the originals of all of the Mortgage Loan Documents (except
for the Notes other than Note A-1 and any other Notes included in the Lead Securitization closing on the Securitization Date) shall
be transferred to and held in the name of the trustee (and held by a duly appointed custodian therefor) under the Securitization
Servicing Agreement, on behalf of the registered holders of the Notes.

Section 35.           
Notices. All notices required hereunder shall be given by (i) writing and personally delivered, (ii) reputable overnight
delivery service (charges prepaid), (iii) sent by electronic mail containing language requesting the recipient to confirm receipt
thereof if a party has provided an electronic mail address and only if such electronic mail is promptly followed by a written notice
or (iv) certified United States mail, postage prepaid return receipt requested, and addressed to the respective parties at their
addresses set forth on Exhibit B hereto, or at such other address as any party shall hereafter inform the other party by
written notice given as aforesaid. All written notices so given shall be deemed effective upon receipt.

All notices and reports
(including, without limitation, Asset Status Reports) required to be delivered hereunder by the Lead Securitization Noteholder
(or the Servicer on its behalf) to the Controlling Noteholder (or its Controlling Noteholder Representative), or by the Controlling
Noteholder (or its Controlling Noteholder Representative) to the Lead Securitization Noteholder as a Non-Controlling Noteholder
(or any Servicer on its behalf), shall also be delivered by the applicable party to each other Noteholder (including to the Note
B Holder regardless of whether a Control Appraisal Period is continuing).

Section 36.           
Broker. Each Noteholder represents to each other Noteholder that no broker was responsible for bringing about this
transaction.

Section 37.           
Certain Matters Affecting the Agent.

(a)               
The Agent may request and/or rely upon and shall be protected in acting or refraining from acting upon any officer’s
certificate or assignment and assumption agreement delivered to the Agent pursuant to Section 20;

(b)              
The Agent may consult with counsel and any opinion of counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance with such opinion of counsel;

(c)               
The Agent shall be under no obligation to institute, conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the Noteholders pursuant to the provisions of this Agreement, unless it has received
indemnity reasonably satisfactory to it;

(d)              
The Agent or any of its directors, officers, employees, Affiliates, agents or “control” persons within the meaning
of the Act, shall not be personally liable for any action taken, suffered or omitted by it in good faith and reasonably believed
by the Agent to be authorized or within the discretion or rights or powers conferred upon it by this Agreement;

    62 

    	 

    

(e)               
 The Agent shall not be bound to make any investigation into the facts or matters stated in any officer’s certificate
or assignment and assumption agreement delivered to the Agent pursuant to Section 20; and

(f)               
The Agent may execute any of the powers hereunder or perform any duties hereunder either directly or by or through agents
or attorneys but shall not be relieved of its obligations hereunder.

Section 38.           
Termination of Agent. The Agent may be terminated at any time upon ten (10) days prior written notice from the Note
A-1 Holder. In the event that the Agent is terminated pursuant to this Section 38, all of its rights and obligations
under this Agreement shall be terminated, other than any rights or obligations that accrued prior to the date of such termination.

The Agent may resign
at any time upon notice, so long as a successor Agent, reasonably satisfactory to the Noteholders, has agreed to be bound by this
Agreement and perform the duties of the Agent hereunder. BANA, as Initial Agent, may transfer its rights and obligations to the
Servicer, as successor Agent, at any time without the consent of any Noteholder. BANA, as Initial Agent, shall promptly and diligently
attempt to cause such Servicer to act as successor Agent, and, if such Servicer declines to act in such capacity, shall promptly
and diligently attempt to cause a similar servicer to act as successor Agent. The termination or resignation of such Servicer,
as Servicer under the Servicing Agreement, shall be deemed a termination or resignation of such Servicer as Agent under this Agreement.

Section 39.           
Resizing. Notwithstanding any other provision of this Agreement, for so long as BANA or an affiliate thereof (an
“Original Entity”) is the owner of any Note that has not been included in a Securitization (each, an “Owned
Note”), such Original Entity shall have the right, subject to the terms of the Mortgage Loan Documents, to cause the
Mortgage Loan Borrower to execute amended and restated notes or additional notes (in each case, as applicable, “New Notes”)
reallocating the principal of an Owned Note to such New Notes; or severing an Owned Note into one or more further “component”
notes in the aggregate principal amount equal to the then outstanding principal balance of such Owned Note provided that (i) the
aggregate principal balance of all outstanding New Notes following such amendments is no greater than the aggregate principal of
such Owned Note prior to such amendments, (ii) all Notes continue to have the same weighted average interest rate as the Notes
prior to such amendments, (iii) all Notes pay pro rata and on a pari passu basis and such reallocated or component
notes shall be automatically subject to the terms of this Agreement and (iv) the Original Entity holding the New Notes shall notify
the Lead Securitization Noteholder, the Master Servicer, the Special Servicer, the Certificate Administrator and the Trustee in
writing of such modified allocations and principal amounts. If the Lead Securitization Noteholder so requests, the Original Entity
holding the New Notes (and any subsequent holder of such Notes) shall execute a confirmation of the continuing applicability of
this Agreement to the New Notes, as so modified. Except for the foregoing reallocation and for modifications pursuant to the Securitization
Servicing Agreement (as discussed in Section 5), no Note may be modified or amended without the consent of its holder and
the consent of the holder of each other Note. In connection with the foregoing (provided the conditions set forth in clauses
(i) through (iv) above are satisfied, as certified by the Original Entity, on which certification the Master Servicer
can rely), the Master

    63 

    	 

    

Servicer is hereby authorized and directed
to execute amendments to the Mortgage Loan Documents and this Agreement on behalf of any or all of the Noteholders, as applicable,
solely for the purpose of reflecting such reallocation of principal and that each New Note shall be a “Note” hereunder
and for the purpose of adding and modifying any definitions related thereto. If more than one New Note is created hereunder, for
purposes of exercising the rights of a Controlling Noteholder or Non-Controlling Noteholder hereunder, the “Controlling Noteholder”
or “Non-Controlling Noteholder”, as applicable, shall be as provided in the definitions of such terms in this Agreement;
provided that the Controlling Noteholder shall be entitled to designate any New Note created from the existing Controlling
Note to be a Non-Controlling Note hereunder.

[SIGNATURE PAGES FOLLOW]

    64 

    	 

    

IN WITNESS WHEREOF,
the Noteholders have caused this Agreement to be duly executed as of the day and year first above written.

 

	 	BANK OF AMERICA, N.A., as Note A-1 Holder, Note A-12 Holder, Note A-14 Holder and Note A-15 Holder
	 	By: 	/s/ Steven L. Wasser
	 	 	Name:  Steven L. Wasser
	 	 	Title:    Managing Director

Miami
Design District – Agreement Between Noteholders

 

     

    	 

    

 

	 	WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE BENEFIT OF THE REGISTERED HOLDERS OF BANK 2020-BNK30, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2020-BNK30, as Note A-3 Holder and Note A-6 Holder
	 	By:  WELLS FARGO BANK, NATIONAL ASSOCIATION, AS GENERAL MASTER SERVICER
	 	By: 	/s/ Crystal Edwards
	 	 	Name:  Crystal Edwards
	 	 	Title:    Director

Miami
Design District – Agreement Between Noteholders

 

     

    	 

    

 

	 	WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE BENEFIT OF THE REGISTERED HOLDERS OF BANK 2021-BNK31, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2021-BNK31, as Note A-2 Holder and Note A-7 Holder
	 	By:  WELLS FARGO BANK, NATIONAL ASSOCIATION, AS GENERAL MASTER SERVICER
	 	By: 	/s/ Crystal Edwards
	 	 	Name:  Crystal Edwards
	 	 	Title:    Director

Miami
Design District – Agreement Between Noteholders

 

     

    	 

    

 

	 	WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE BENEFIT OF THE REGISTERED HOLDERS OF BANK 2021-BNK32, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2021-BNK32, as Note A-4 Holder, Note A-8 Holder, Note A-10 Holder and Note A-11 Holder
	 	By:  WELLS FARGO BANK, NATIONAL ASSOCIATION, AS GENERAL MASTER SERVICER
	 	By: 	/s/ Crystal Edwards
	 	 	Name:  Crystal Edwards
	 	 	Title:    Director

Miami
Design District – Agreement Between Noteholders

 

     

    	 

    

 

	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE ON BEHALF OF THE REGISTERED HOLDERS OF CSAIL 2021-C20 COMMERCIAL MORTGAGE TRUST, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2021-C20, as Note A-5 Holder, Note A-9 Holder and Note A-13 Holder
	 	By: 	MIDLAND LOAN SERVICES, A DIVISION OF PNC BANK, NATIONAL ASSOCIATION, as Master Servicer
	 	By:	/s/ Scott Dunkley
	 	 	Name:  Scott Dunkley
	 	 	Title:    Vice Pesident

Miami
Design District – Agreement Between Noteholders

 

     

    	 

    

 

	 	CF MDD HOLDINGS LLC, as Note B Holder
	 	By: 	/s/ William Covino
	 	 	Name:  William Covino
	 	 	Title:    Chief Financial Officer

Miami
Design District – Agreement Between Noteholders

     

    	 

    

 

	ACKNOWLEDGED AND AGREED:
	3650 REIT LOAN FUNDING 1 LLC,
	as the former Holder of Note A-5, Note A-9
	and Note A-13 Holder
	By: 	/s/ Peter E. LaPointe
	 	Name:  Peter E. LaPointe
	 	Title:    Duly Authorized

Miami
Design District – Agreement Between Noteholders

 

     

    	 

    

EXHIBIT A

MORTGAGE LOAN SCHEDULE

A.       Description
of Mortgage Loan:

	Mortgage Loan:	Loan Agreement, dated as of February 28, 2020, between Bank of America, N.A., as Lender and Oak Plaza Associates (Del.) LLC, as Borrower, as modified by the (i) Loan Agreement Modification Agreement, effective as of March 1, 2020, (ii) Second Loan Modification Agreement, effective as of April 29, 2020, (iii) Third Loan Modification Agreement, effective as of October 8, 2020, and (iv) Fourth Loan Modification Agreement, effective as of December 3, 2020
	Mortgage Loan Borrower:	Oak Plaza Associates (Del.) LLC
	Date of the Mortgage Loan and the Mortgage:  	February 28, 2020
	Initial Principal Amount of Mortgage Loan:	$500,000,000
	Location of Mortgaged Property:	Miami, Florida
	Initial Maturity Date:	March 1, 2030

B.       Description
of Note Interests:

	Initial Note A-1 Principal Balance:	$60,000,000
	Initial Note A-2 Principal Balance:	$55,000,000
	Initial Note A-3 Principal Balance:	$50,000,000
	Initial Note A-4 Principal Balance:	$40,000,000
	Initial Note A-5 Principal Balance:	$30,000,000
	Initial Note A-6 Principal Balance:	$25,000,000

    A-1 

    	 

    

 

	Initial Note A-7 Principal Balance:	$25,000,000
	Initial Note A-8 Principal Balance:	$20,000,000
	Initial Note A-9 Principal Balance:	$20,000,000
	Initial Note A-10 Principal Balance:	$15,000,000
	Initial Note A-11 Principal Balance:	$15,000,000
	Initial Note A-12 Principal Balance:	$15,000,000
	Initial Note A-13 Principal Balance:	$10,000,000
	Initial Note A-14 Principal Balance:	$10,000,000
	Initial Note A-15 Principal Balance:	$10,000,000
	Initial Note B Principal Balance:	$100,000,000
	Senior Note Rate:	4.1325%
	Initial Note B Rate:	4.1325%

 

    A-2 

    	 

    

EXHIBIT B

1.     Note A-1
Holder, Note A-12 Holder, Note A-14 Holder, Note A-15 Holder:

(Prior to Securitization of the applicable Note A):

Bank of America, N.A.

NC1-030-21-01

620 South Tryon Street

Charlotte, North Carolina 28255

Attention: Steven L. Wasser

Email: steve.l.wasser@bofa.com

with a copy to:

 

W. Todd Stillerman, Esq.

Bank of America Legal Department

NC1-028-24-02

150 North College Street

Charlotte, North Carolina 28255

Email: todd.stillerman@bofa.com

 

and a copy by e-mail to:

 

cmbsnotices@bofa.com

Following Securitization of the applicable Note A, the
applicable notice addresses set forth in the related Pooling and Servicing Agreement.

2.     Note A-3
Holder and Note A-6 Holder:

Wells Fargo Bank, National Association

Commercial Mortgage Servicing

Three Wells Fargo

401 South Tryon Street, 8th Floor

MAC D1050-084

Charlotte, North Carolina 28202

Attention: BANK 2020-BNK30 Asset Manager

Facsimile number: (704) 715-0036

Email: commercial.servicing@wellsfargo.com

 

K&L Gates LLP

Hearst Tower

214 North Tryon Street

Charlotte, North Carolina 28202

Attention: Stacy G. Ackermann

    B-1 

    	 

    

Reference: BANK 2020-BNK30

 

3.     Note A-2
Holder and Note A-7 Holder:

Wells Fargo Bank, National Association

Commercial Mortgage Servicing

Three Wells Fargo

MAC D1050-084

401 South Tryon Street, 8th Floor

Charlotte, North Carolina 28202

Attention: BANK 2021-BNK31 Asset Manager

Email: commercial.servicing@wellsfargo.com

K&L Gates LLP

300 South Tryon Street, Suite 1000

Charlotte, North Carolina 28202

Attention: Stacy G. Ackermann

Facsimile Number: (704) 353-3190

 

    B-2 

    	 

    

 

4.     Note A-4
Holder, Note A-8 Holder, Note A-10 Holder and Note A-11 Holder:

Wells Fargo Bank, National Association

Commercial Mortgage Servicing

Three Wells Fargo

MAC D1050-084

401 South Tryon Street, 8th Floor

Charlotte, North Carolina 28202

Attention: BANK 2021-BNK32 Asset Manager

Email: commercial.servicing@wellsfargo.com

    B-3 

    	 

    

 

Wells Fargo Bank, National Association Legal Department

301 S. College St., TW 30

Charlotte, North Carolina 28202

Fax Number: (816) 412-9338

Attention: Commercial Mortgage Servicing Legal Support

Reference: BANK 2021-BNK32

K&L Gates LLP

300 South Tryon Street, Suite 1000

Charlotte, North Carolina 28202

Attention: Stacy G. Ackermann

Facsimile Number: (704) 353-3190

Reference: BANK 2021-BANK32

5.       Note A-5
Holder, Note A-9 Holder, Note A-13 Holder:

Wells Fargo
Bank, National Association

9062 Old Annapolis
Road

Columbia,
Maryland 21045

Attention: Corporate
Trust Services (CMBS) – CSAIL 2021-C20

E-mail: cts.cmbs.bond.admin@wellsfargo.com
and trustadministrationgroup@wellsfargo.com

with a copy to:
cts.cmbs.bond.admin@wellsfargo.com, and to trustadministrationgroup@wellsfargo.com

 

with copies to:

 

Credit Suisse Commercial
Mortgage Securities Corp.

11 Madison Avenue

New York, New York
10010

Attention: Chuck
Lee

Fax number: (212)
322-0965

E-mail: chuck.lee@credit-suisse.com

 

Credit Suisse Commercial
Mortgage Securities Corp.

11 Madison Avenue

New York, New York
10010

Attention: David
Tlusty

Fax number: (917)
256-7654

E-mail: david.tlusty@credit-suisse.com

 

Credit Suisse Commercial
Mortgage Securities Corp.

11 Madison Avenue

    B-4 

    	 

    

New York, New York
10010

Attention: N. Dante
La Rocca

Fax number: (646)
935-8520

E-mail: dante.larocca@credit-suisse.com

 

Credit Suisse Commercial
Mortgage Securities Corp.

11 Madison Avenue

New York, New York
10010

Attention: Barbara
Nottebohm

Fax number: (212)
743-2823

E-mail: barbara.nottebohm@credit-suisse.com;

 

with a copy via e-mail
to:

 

Credit Suisse Commercial
Mortgage Securities Corp.

11 Madison Avenue

New York, New York
10010

Attention: Julia
Powell

E-mail: julia.powell@credit-suisse.com;

 

Cadwalader, Wickersham
& Taft LLP

227 West Trade
Street

Charlotte, NC 28202

Attention: Kahn
D. Hobbs

E-mail: kahn.hobbs@cwt.com

    B-5 

    	 

    

 

Midland Loan Services,
a Division of PNC Bank, National Association, 10851 Mastin Street, Suite 700

Overland Park,
Kansas 66210

Attention: Executive
Vice President – Division Head,

Fax number: 1-888-706-3565

E-mail: NoticeAdmin@midlandls.com
(and solely with respect to notices under Section 3.13, with a copy to AskMidland@midlandls.com)

 

Stinson LLP

1201 Walnut Street

Suite 2900

Kansas City, Missouri
64106-2150

Fax Number: (816)
412-9338

Attention: Kenda
K. Tomes

E-mail: kenda.tomes@stinson.com

 

3650 REIT Loan
Servicing LLC

Attn.: General
Counsel

2977 McFarlane
Road, Suite 300

Miami, FL 33133

E-mail: mjefferis@3650REIT.com

6.       Note B Holder:

CF MDD Holdings LLC

c/o Fortress Investment Group LLC

One Market Plaza, Spear Tower, 42nd Floor

San Francisco, California 94105

Attention: General Counsel – Credit Funds

Email: GC.credit@fortress.com

with a copy to:

 

Fortress Credit Corp.

c/o Fortress Investment Group LLC

1345 Avenue of the Americas

New York, New York 10105

Attention: Dean Dakolias

Email: GC.credit@fortress.com

and with a copy to:

Gibson Dunn & Crutcher LLP

200 Park Avenue

New York, New York 10166

    B-6 

    	 

    

Attention: Aaron Beim,
Esq.

Email: abeim@gibsondunn.com

 

7.       Bank of
America, N.A.:

 

Bank of America, N.A.

NC1-030-21-01

620 South Tryon Street

Charlotte, North Carolina 28255

Attention: Steven L. Wasser

Email: steve.l.wasser@bofa.com

with a copy to:

 

W. Todd Stillerman, Esq.

Bank of America Legal Department

NC1-028-24-02

150 North College Street

Charlotte, North Carolina 28255

Email: todd.stillerman@bofa.com

 

and a copy by e-mail to:

 

    B-7 

    	 

    

EXHIBIT C

PERMITTED FUND MANAGERS

		1.	Alliance Bernstein

		2.	Annaly Capital Management

		3.	Apollo Real Estate Advisors

		4.	Archon Capital, L.P.

		5.	AREA Property Partners

		6.	Artemis Real Estate Partners

		7.	BlackRock, Inc.

		8.	Capital Trust, Inc.

		9.	Clarion Partners

		10.	Colony Capital, LLC / Colony Financial, Inc.

		11.	CreXus Investment Corporation/Annaly Capital Management

		12.	DLJ Real Estate Capital Partners

		13.	Dune Real Estate Partners

		14.	Eightfold Real Estate Capital, L.P.

		15.	Five Mile Capital Partners

		16.	Fortress Investment Group, LLC

		17.	Garrison Investment Group

		18.	Goldman, Sachs & Co.

		19.	H/2 Capital Partners LLC

		20.	Hudson Advisors

		21.	Investcorp International

		22.	iStar Financial Inc.

		23.	J.P. Morgan Investment Management Inc.

		24.	JER Partners

		25.	Lend-Lease Real Estate Investments

		26.	Libermax Capital LLC

		27.	LoanCore Capital

		28.	Lone Star Funds

		29.	Lowe Enterprises

		30.	Normandy Real Estate Partners

		31.	One William Street Capital Management, L.P.

		32.	Och-Ziff Capital Management Group/ OZ Management, L.P./ OZ Management II., L.P.

		33.	Praedium Group

		34.	Raith Capital Partners, LLC

		35.	Rialto Capital Management, LLC

		36.	Rialto Capital Advisors LLC

		37.	Rimrock Capital Management LLC

		38.	Rockpoint Group

		39.	Rockwood

		40.	RREEF Funds

		41.	Square Mile Capital Management

		42.	Starwood Capital Group/Starwood Financial Trust

		43.	The Blackstone Group

		44.	The Carlyle Group

		45.	Torchlight Investors

		46.	Walton Street Capital, L.L.C.

		47.	Westbrook Partners

		48.	WestRiver Capital

		49.	Wheelock Street Capital

		50.	Whitehall Street Real Estate Fund, L.P.

 

    C-1Execution Version

 

 

 

 

 

 

 

 

AGREEMENT AND PLAN OF REORGANIZATION

 

by and among AKERNA CORP.,

NAVIGATOR ACQUISITION CORP.

 

and

 

VIRIDIAN SCIENCES, INC.

 

March 10, 2021

 

	

	
	Table of Contents	

	
	
	Page
	
	
ARTICLE I SHARE EXCHANGE

	

	1.01	Share Consideration	1
	1.02	 Withholding 	1
	
	
ARTICLE II THE CLOSING

	

	2.01	 The Closing 	2
	2.02	 Effective Time; Closing Transactions 	2
	2.03	 Share Issuance 	3
	2.04	 Earnout Shares and Payments 	3
	2.05	 Share Consideration Adjustments 	4
	
	
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY

	

	3.01	 Organization and Good Standing; No Subsidiaries 	7
	3.02	 Due Authorization; Enforceability 	7
	3.03	 No Conflicts; Required Filings and Consents 	7
	3.04	 Title to Shares; Capitalization 	8
	3.05	 Financial Statements and Other Financial Matters; No Undisclosed Liabilities 	8
	3.06	 Absence of Certain Changes 	9
	3.07	 Tax Matters 	9
	3.08	 Contracts	11
	3.09	 Intellectual Property 	13
	3.10	 Legal Proceedings 	15
	3.11	 Orders 	15
	3.12	 Employee Benefit Plans 	15
	3.13	 Insurance 	16
	3.14	 Legal Requirements and Permits 	16
	3.15	 Environmental Matters 	17
	3.16	 Relationships with Related Persons 	17
	3.17	 Employees; Employment Matters and Independent Contractors 	17
	3.18	 Material Customers and Suppliers 	18
	3.19	 No Brokers 	18
	3.20	 Title, Condition and Sufficiency of Assets 	18
	3.21	 Data Protection and Privacy 	18
	3.22	 Company Information 	19
	
	
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER

	

	4.01	 Title to Company Shares 	20
	4.02	 Organization and Good Standing 	20
	4.03	 Due Authorization; Enforceability 	20

	i

	4.04	 No Conflicts; Consents 	20
	4.05	 Legal Proceedings 	21
	4.06	 Legal Requirements 	21
	4.07	 No Brokers 	21
	4.08	 Investment Information 	21
	
	
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER

	

	5.01	Organization and Good Standing	23
	5.02	Due Authorization; Enforceability	23
	5.03	No Conflicts; Consents	23
	5.04	Capitalization	24
	5.05	Subsidiaries	24
	5.06	Legal Proceedings	25
	5.07	SEC Filings and Financial Statements	25
	5.08	Legal Requirements	25
	5.09	No Brokers	26
	5.10	Buyer Information	26
	
	
ARTICLE VI COVENANTS

	

	6.01	Conduct of the Business	26
	6.02	Access to Books and Records	27
	6.03	Efforts to Consummate	28
	6.04	Exclusive Dealing	28
	6.05	Notification	28
	6.06	Non-Competition and Non-Solicitation	29
	6.07	Migration of Assets	30
	6.08	Transferred Employees	30
	
	
ARTICLE VII CONDITIONS TO CLOSING

	

	7.01	Conditions to Buyer’s Obligations	30
	7.02	Conditions to Seller’s and the Company’s Obligations	31
	
	
ARTICLE VIII INDEMNIFICATION

	

	8.01	Survival	31
	8.02	Indemnification	32
	8.03	Limitations	32
	8.04	Claim Procedures	33
	8.05	Determination of Amount	33
	8.06	Third Person Claims	33
	8.07	Tax Treatment of Indemnification Claims	34
	8.08	Escrow Release	34
	8.09	Exclusive Remedy	34

	ii

	
	
ARTICLE IX TERMINATION

	

	
	
	

	9.01	Termination	34
	9.02	Effect of Termination	35
	
	
	

	
	
ARTICLE X ADDITIONAL COVENANTS

	

	
	
	

	10.01	Disclosure Schedules	35
	10.02	Tax Matters	35
	10.03	Buyer Common Stock Matters	37
	
	
	

	
	
ARTICLE XI DEFINITIONS

	

	
	
	

	11.01	Definitions	38
	11.02	Other Definitional Provisions	46
	
	
	

	
	
ARTICLE XII MISCELLANEOUS

	

	
	
	

	12.01	Press Releases and Public Announcements	46
	12.02	Transfer Taxes	46
	12.03	Expenses	46
	12.04	Notices	46
	12.05	Succession and Assignment	47
	12.06	Severability	47
	12.07	References	48
	12.08	Construction	48
	12.09	Amendment and Waiver	48
	12.10	Entire Agreement	48
	12.11	Parties in Interest	48
	12.12	Delivery by Facsimile or Email	48
	12.13	Counterparts	49
	12.14	Governing Law	49
	12.15	Jurisdiction	49
	12.16	Specific Performance	49

	iii

	
INDEX OF EXHIBITS AND SCHEDULES

	
	

	Exhibit A:	Form of Escrow Agreement 
	Exhibit B:	Form of Lock-Up Agreement
	Exhibit C:	Form of Transition Services Agreement
	
	

	Schedule	Description
	3.03(b)	Required Filings and Consents
	3.04(a)	Capitalization
	3.05(a)	Financial Statements
	3.05(e)	Accounts Receivable Exceptions
	3.06	Absence of Certain Changes 

	3.07	
Tax Matters

	3.08(a)	Material Contracts
	3.08(b)	Material Contract Exceptions
	3.09	Company Intellectual Property
	3.10	Legal Proceedings 

	3.11	Orders
	3.12(i)	Employee Transaction Payments
	3.13	Insurance
	3.16	Relationships with Related Parties
	3.17(a)	Labor Union Matters
	3.18	Material Customers and Suppliers
	3.20	Title, Condition and Sufficiency of Assets
	6.08	Transferred Employees

	iv

GLOSSARY OF DEFINED TERMS

The location of the definition of each capitalized term used in this Agreement and not defined in Section 11.01 is set forth in this Glossary:

	Acquisition Proposal	28	
	Estimated Closing Working Capital	5
	Agreement	1	
	Expiration Date	31
	Basket Amount	33	
	Final Closing Consideration	5
	Business	1	
	Final Closing Statement	5
	Buyer	1	
	Independent Accountant	6
	Buyer Common Stock	1	
	Material Contract	11
	Buyer SEC Reports	25	
	Material Customer	18
	Buyer’s Representatives	27	
	Material Permits	16
	Cap	33	
	Material Supplier	18
	Claim Notice	33	
	Outside Date	35
	Closing	2	
	Parties	1
	Closing Date	2	
	Party	1
	Company	1	
	Permit	16
	Company Financial Statements	8	
	Post-Closing Adjustment	5
	Company Registered Intellectual Property	13	
	Property Taxes	36
	Company Shares	1	
	Resolution Period	5
	Competing Business	29	
	Restricted Period	29
	Disclosure Schedules	35	
	Restricted Service Provider	29
	Disputed Amounts	6	
	Review Period	5
	Earnout Payment	3	
	Rule 144	22
	Earnout Period	3	
	Schedule	35
	Earnout Resolution Period	4	
	Scheduled Company Intellectual Property 	13
	Earnout Review Period	3	
	SEC Filings	21
	Earnout Shares	3	
	Seller	1
	Earnout Statement	3	
	Share Consideration	1
	Earnout Statement of Objections	3	
	Share Exchange	1
	Escrow Amount	1	
	Statement of Objections	5
	Estimated Closing Consideration	5	
	Transferred Employees	30
	Estimated Closing Statement	4	
	
	

 

	5

AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (this “Agreement”), dated as of March 10, 2021, is made by and among Akerna Corp., a Delaware corporation (“Buyer”), Navigator Acquisition Corp., a Delaware corporation (“Seller”), and Viridian Sciences, Inc., a Delaware corporation and direct wholly owned Subsidiary of Seller (the “Company”). Buyer, Seller and the Company will each be referred to herein from time to time as a “Party” and, collectively, as the “Parties.” Capitalized terms used and not otherwise defined herein have the meanings set forth in Article XII below.

 

WHEREAS, Seller owns all of the issued and outstanding capital stock of the Company (the “Company Shares”);

 

WHEREAS, the Company provides business management software solutions for the seed-to-sale cannabis industry (the “Business”);

 

WHEREAS, in accordance with this Agreement, Buyer wishes to issue the Share Consideration (as defined below) to Seller in exchange for all of the Company Shares; and

 

WHEREAS, it is intended that the sale by Seller of the Company Shares to Buyer in exchange for the Share Consideration pursuant to this Agreement (the “Share Exchange”) shall be treated as a tax-free reorganization within the meaning of Section 368(a)(1)(B) of the Code.

 

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

ARTICLE I SHARE EXCHANGE

1.01           Share Consideration. In accordance with this Agreement, at the Closing Buyer shall acquire from Seller, and Seller shall transfer, assign and deliver to Buyer, all of the Company Shares, free and clear of all Encumbrances, in exchange for an aggregate consideration equal to $6,000,000 (the “Share Consideration, subject to adjustment pursuant to Section 2.05, payable in such number of fully paid and nonassessable shares of common stock, par value $0.0001 per share, of Buyer (“Buyer Common Stock”) equal to the Share Consideration based on the Buyer Price at Closing, less a number of shares of Buyer Common Stock equal to $600,000, which Buyer shall deposit with the Escrow Agent pursuant to the Escrow Agreement (the “Escrow Amount”).

 

1.02            Withholding. Notwithstanding any provision contained herein to the contrary, Buyer will be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement such amounts as it is required to deduct and withhold with respect to the making of such payment under any provision of applicable Tax Law; provided, however, that Buyer will provide Seller with advance notice of any proposed withholding and will reasonably cooperate with Seller to reduce or eliminate such withholding if permissible under applicable Tax Law. If Buyer so withholds amounts, such amounts will be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

	1

 

ARTICLE II 

THE CLOSING

 

2.01           The Closing. The closing (the “Closing”) shall occur by electronic exchange of documents no later than three (3) Business Days after the satisfaction or waiver (to the extent permitted by applicable Law) of the conditions set forth in Article VII (other than those conditions that by their nature are to be satisfied at the Closing but subject to the satisfaction or, to the extent permitted by applicable Law, waiver of all conditions as of the Closing), or at such other time and date as agreed t7 in writing by the Parties hereto. The date on which the Closing occurs is called the “Closing Date.”

 

2.02           Effective Time; Closing Transactions.

 

(a)                   At the Closing, Seller and the Company shall deliver the following agreements and documents to Buyer:

 

(i)                  a certificate of the Secretary of each of Seller and the Company, dated as of the Closing Date and in form and substance reasonably satisfactory to Buyer, certifying and attaching: (A) the Governing Documents of the Company, (B) the resolutions adopted by the Boards of Directors of Seller and the Company to authorize and adopt this Agreement and the other transactions contemplated hereby, and (C) the incumbency and signatures of the officers of Seller and the Company executing this Agreement and the other agreements, instruments and other documents executed by or on behalf of Seller and Company pursuant to this Agreement or otherwise in connection with the transactions contemplated hereby;

 

(ii)               written resignations of each officer and director of the Company, effective as of Closing, in form and substance satisfactory to Buyer;

 

(iii)             a fully completed Form W-9, duly executed by Seller;

 

(iv)              a stock power for the Company Shares in form and substance reasonably satisfactory to Buyer, duly executed in blank by Seller;

 

(v)                a copy of the Escrow Agreement, duly executed by Seller;

 

(vi)              a copy of the Lock-Up Agreement, duly executed by Seller;

 

(vii)            a copy of the Transition Services Agreement, duly executed by Seller;

 

(viii)          a license agreement relating to the iConnect software, duly executed by the Company and Navigator Business Solutions, Inc.; and

 

(ix)              such other instruments and documents as Buyer may reasonably request for the purpose of effectuating or evidencing the transactions contemplated by this Agreement.

 

(b)                   At the Closing, Buyer shall deliver the following agreements and

documents to Seller;

 

(i)                  a certificate of the Secretary of Buyer, dated as of the Closing Date and in form and substance reasonably satisfactory to Seller, certifying and attaching: (A) the resolutions adopted by the Board of Director of Buyer to authorize and adopt this Agreement and the other transactions

	2

contemplated hereby, and (B) the incumbency and signatures of the officers of Buyer executing this Agreement and the other agreements, instruments and other documents executed by or on behalf of Buyer pursuant to this Agreement or otherwise in connection with the transactions contemplated hereby;

 

(ii)               a copy of the Escrow Agreement, duly executed by Buyer;

 

(iii)             a copy of the Lock-Up Agreement, duly executed by Buyer;

 

(iv)              a copy of the Transition Services Agreement, duly executed by

Buyer;

 

(v)                such other instruments and documents as Seller may reasonably request for the purpose of effectuating or evidencing the transactions contemplated by this Agreement.

 

2.03           Share Issuance. At Closing, Buyer shall issue to Seller a share certificate representing the number of shares of Buyer Common Stock sufficient to deliver the Share Consideration, and, as promptly as practicable, credit in the stock ledger and other appropriate books and records of Buyer for the number of shares of Buyer issued to Seller in respect of the Share Consideration.

 

2.04           Earnout Shares and Payments.

 

(a)                   In addition to the Share Consideration payable pursuant to Section 1.01, Buyer shall be required to issue additional shares of Buyer Common Stock (such shares, the “Earnout Shares”) to Seller as provided in this Section 2.04: Buyer shall issue to Seller a number of Earnout Shares, valued at the Earnout Share Price, equal to the total dollar amount of Revenue generated by the Company in excess of $4 million (the “Earnout Payment”) during the twelve (12) months following Closing Date (the “Earnout Period”), and once the Earnout Shares are issued to Seller, Buyer shall have no further obligations pursuant to this Section 2.04(a).

 

(b)                   Buyer shall provide Seller with a statement setting forth the Revenue during the Earnout Period and the calculation of the Earnout Shares and the Earnout Payment (the “Earnout Statement”), supported by reasonable documentation, within 45 days following the completion of the Earnout Period. After receipt of the Earnout Statement, Seller shall have 30 days (the “Earnout Review Period”) to review the Earnout Statement. During the Earnout Review Period, Seller shall have full access to the books and records of the Company, to the employees and advisors of the Company, and work papers prepared by Buyer, to the extent that they relate to the Earnout Statement and Buyer’s calculations set forth therein and to such historical financial information (to the extent in Buyer’s possession) relating to the Earnout Statement as Seller may reasonably request for the purpose of reviewing the Earnout Statement and to prepare an Earnout Statement of Objections (defined below); provided, that such access shall be during normal working business hours and in a manner that does not interfere with the normal business operations of Buyer or the Company.

 

(c)                   On or prior to the last day of the Earnout Review Period, Seller may object to the Earnout Statement by delivering to Buyer a written statement setting forth Seller’s objections in reasonable detail, indicating each disputed item or amount and the basis for Seller’s disagreement therewith (the “Earnout Statement of Objections”). If Seller fails to deliver the Earnout Statement of Objections before the expiration of the Earnout Review Period, the Revenue, Earnout Shares and Earnout Payment reflected in the Earnout Statement shall be deemed to have been accepted by Seller as of the last day of the Earnout Review Period. If Seller delivers the Earnout Statement of Objections before the expiration of the Earnout Review Period, Buyer and Seller shall negotiate in good faith to resolve such objections within 30 days (or such period as they may mutually agree) after the delivery of the Earnout Statement of Objections

	3

(the “Earnout Resolution Period”), and, if the same are so resolved by written agreement of Buyer and Seller within the Earnout Resolution Period, the Revenue, Earnout Shares, Earnout Payment and the Earnout Statement with such changes (if any) as agreed to in writing by Buyer and Seller shall be final and binding.

 

(d)                   If Seller and Buyer fail to reach an agreement with respect to all of the matters set forth in the Earnout Statement of Objections before expiration of the Earnout Resolution Period, then any amounts remaining in dispute shall be submitted for resolution to the Independent Accountant according to the same process for resolving disputes relating to the Final Closing Statement pursuant to Section 2.05(d)(iii), (iv) and (v).

 

(e)                   Any  Earnout  Shares   that   Buyer   is   required   to   issue   pursuant   to Section 2.04(a) shall be issued to Seller (i) if no Earnout Statement of Objections is delivered, no later than 10 days following the completion of the Earnout Review Period, and (ii) if an Earnout Statement of Objections is delivered, no later than 10 days following the resolution of such dispute. Notwithstanding the foregoing, if Buyer sells the Company, its assets or the Business prior to the expiration of the Earnout Period, an Earnout Payment in the amount of $1,000,000 shall be due and payable to Seller no later than the closing of such sale transaction.

 

(f)                    The Parties understand and agree that (i) the contingent rights to receive any Earnout Shares pursuant to this Section 2.04 shall not be represented by any form of certificate or other instrument, are not transferable, except as specifically provided herein, and do not constitute an equity or ownership interest in Buyer or any of its Subsidiaries; (ii) Seller shall not have any rights as a securityholder of Buyer in respect of its contingent right to receive any Earnout Shares hereunder; and (iii) no interest is payable with respect to any Earnout Shares or cash payment pursuant to this Section 2.04. Buyer acknowledges and agrees that Buyer shall not, directly or indirectly, take any actions in bad faith for the sole purpose of avoiding or reducing any amount of Earnout Shares otherwise payable to Seller hereunder. Seller acknowledges and agrees that (A) the payments set forth in this Section 2.04 are speculative and not guaranteed; (B) none of Buyer, the Company nor any of their respective Affiliates or Representatives has promised or projected, and Seller has not  relied  on  any  statements  regarding,  any  payments  under this Section 2.04 or any projections for any period following the Closing; (C) other than the express covenants and agreements contained in this Agreement, none of Buyer, the Company nor any of their respective Affiliates or Representatives owe any fiduciary duties or any other duties (express or implied) to maximize the Revenue during the Earnout Period; and (D) the Parties solely intend the express provisions of this Agreement to govern their contractual relationship. In no event will the aggregate Earnout Payment exceed $1,000,000.

 

2.05           Share Consideration Adjustments.

 

(a)                   Share Consideration Adjustments. At the Closing, the Closing Consideration will be calculated by adjusting the Share Consideration in the following manner: either (i) increasing the Share Consideration by the amount, if any, by which the Estimated Closing Working Capital (as determined in accordance with Section 2.05(b)) is greater than the Target Working Capital, or (B) decreasing the Share Consideration by the amount, if any, by which the Estimated Closing Working Capital is less than the Target Working Capital; provided, that if the absolute value of the difference between the Estimated Closing Working Capital and the Target Working Capital is less than $50,000, there shall be no increase or decrease to the Share Consideration at the Closing.

 

(b)                   At least two (2) Business Days before the Closing, Seller shall prepare and deliver to Buyer a statement, together with supporting details (the “Estimated Closing Statement”), setting forth Seller’s good faith estimate of the balance sheet of the Company as of immediately prior to the Closing

	4

(without giving effect to the transactions contemplated hereby) and, based thereon, setting forth Seller’s good faith estimate of the Closing Consideration and Closing Working Capital (the “Estimated Closing Working Capital”), prepared consistently with Annex 1.

 

(c)                   Adjustments to Share Consideration.

 

(i)                  Within 30 days after the Closing Date, Buyer shall prepare and deliver to Seller a statement, together with supporting details (the “Final Closing Statement”), setting forth Buyer’s good faith calculation of (A) the Closing Consideration and Closing Working Capital and (B) the resulting adjustments, if any, required to be made to the Closing Consideration pursuant to Section 2.05(c)(ii), prepared consistently with Annex 1.

 

(ii)                If the Closing Consideration, as finally determined pursuant to this Section 2.05 (the “Final Closing Consideration”), is greater than or less than the Closing Consideration reflected in the Estimated Closing Statement (the “Estimated Closing Consideration”), there shall be an adjustment to the Closing Consideration (the “Post-Closing Adjustment”); provided, that there shall be no Post-Closing Adjustment with respect to the Closing Working Capital if the absolute value of the difference between the Closing Working Capital and the Target Working Capital is less than $50,000. Subject to the foregoing, the Post-Closing Adjustment shall be an amount equal to the Final Closing Consideration minus the Estimated Closing Consideration. In accordance with Section 2.05(d)(vi), if the Post-Closing Adjustment is a positive number, Buyer shall pay to Seller an amount equal to the Post-Closing Adjustment; if the Post-Closing Adjustment is a negative number, Seller shall pay to Buyer an amount equal to the absolute value of the Post-Closing Adjustment; or if the Post-Closing Adjustment is zero, no payment shall be made.

 

(d)                   Examination and Review for Working Capital.

 

(i)                  Examination. After receipt of the Final Closing Statement, Seller shall have 30 days (the “Review Period”) to review the Final Closing Statement. During the Review Period, Seller shall have full access to the books and records of the Company, to the employees and advisors of the Company, and work papers prepared by Buyer, to the extent that they relate to the Final Closing Statement and Buyer’s calculations set forth therein and to such historical financial information (to the extent in Buyer’s possession) relating to the Final Closing Statement as Seller may reasonably request for the purpose of reviewing the Final Closing Statement and to prepare a Statement of Objections (defined below); provided, that such access shall be during normal working business hours and in a manner that does not interfere with the normal business operations of Buyer or the Company.

 

(ii)                Objection. On or prior to the last day of the Review Period, Seller may object to the Final Closing Statement by delivering to Buyer a written statement setting forth Seller’s objections in reasonable detail, indicating each disputed item or amount and the basis for Seller’s disagreement therewith (the “Statement of Objections”). If Seller fails to deliver the Statement of Objections before the expiration of the Review Period, the Closing Working Capital Statement and the Post-Closing Adjustment, as the case may be, reflected in the Final Closing Statement shall be deemed to have been accepted by Seller as of the last day of the Review Period. If Seller delivers the Statement of Objections before the expiration of the Review Period, Buyer and Seller shall negotiate in good faith to resolve such objections within 30 days (or such period as they may mutually agree) after the delivery of the Statement of Objections (the “Resolution Period”), and, if the same are so resolved by written agreement of Buyer and Seller within the Resolution Period, the Post-Closing Adjustment and the Final Closing Statement with such changes (if any) as agreed to in writing by Buyer and Seller shall be final and binding.

	5

(iii)             Resolution of Disputes. If Seller and Buyer fail to reach an agreement with respect to all of the matters set forth in the Statement of Objections before expiration of the Resolution Period, then any amounts remaining in dispute (“Disputed Amounts”) shall be submitted for resolution to Moss Adams LLP or, if Moss Adams LLP declines to serve, the office of a nationally or regionally recognized firm of independent certified public accountants that Buyer and Seller shall appoint by mutual agreement; provided that in the event that Buyer and Seller are unable to mutually agree upon an independent certified public accounting firm within ten (10) days after the date that either Party discovers that Moss Adams LLP declines to serve, Buyer and Seller shall each select an independent certified public accounting firm within five (5) days thereafter and the two (2) independent certified public accounting firms shall mutually agree upon a nationally or regionally recognized independent certified public accounting firm within ten (10) days after being selected (the final independent public accounting firm (the “Independent Accountant”) who, acting as an expert and not an arbitrator, shall resolve the Disputed Amounts only and make adjustments (if any) to the Post-Closing Adjustment, and the Final Closing Statement. The Parties agree that all adjustments shall be made without regard to materiality. The Independent Accountant shall only decide the specific items under dispute by the Parties and their decision for each Disputed Amount must be within the range of values assigned to each such item in the Final Closing Statement and the Statement of Objections, respectively. Buyer and Seller shall each furnish to the Independent Accountant such work papers and other documents and information relating to the disputed issues, and shall provide interviews and answer questions, as such Independent Accountant may reasonably request.

 

(iv)              Fees of the Independent Accountant. The fees and expenses of the Independent Accountant shall be paid by Seller, on the one hand, and by Buyer, on the other hand, based upon the percentage that the amount actually contested but not awarded to Seller or Buyer, respectively, bears to the aggregate amount actually contested by Seller and Buyer. For clarity, if Seller’s Disputed Amount is $100,000 and the Independent Accountant awards Seller $30,000, Seller shall pay 70% of the fees of the Independent Accountant.

 

(v)                Determination by Independent Accountant. The Independent Accountant shall make a written determination with respect to each Disputed Item, which shall include an explanation in writing for the Independent Accountant’s reasons for the determinations set forth therein, as soon as practicable within 30 days (or such other time as the Parties shall agree in writing) after its engagement, and the Independent Accountant’s resolution of the Disputed Amounts and adjustments (if any) to the Final Closing Statement and/or the Post-Closing Adjustment shall be conclusive and binding upon the Parties.

 

(vi)              Payments of Post-Closing Adjustment. Except as otherwise provided herein, any payment of the Post-Closing Adjustment shall (A) be due (x) if there are not Disputed Amounts, within ten (10) Business Days after acceptance of the Final Closing Statement or (y) if there are Disputed Amounts, then within ten (10) Business Days after the resolution described in clause (v) above; and (B) (1) if a payment is required to be made to Buyer, then Buyer will be entitled to receive out of the Escrow Amount, the amount of Buyer Common Stock valued at the Buyer Price equal to such payment, or if the amount of such payment due to Buyer exceeds the Escrow Amount, such excess amount shall be withheld from the Earnout Payment, if any, and (2) if a payment is required to be made to Seller, Buyer shall issue to Seller the amount of Buyer Common Stock valued at the Buyer Price equal to the amount of such payment due to Seller.

 

(e)                   Adjustments for Tax Purposes. Any payments made pursuant to this Section 2.05 will be treated as an adjustment to the Share Consideration by the Parties for Tax purposes, unless otherwise required by Law.

	6

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company hereby represents and warrants to Buyer as follows in this Article III.

 

3.01            Organization and Good Standing; No Subsidiaries. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite corporate power and authority to own, lease and operate the properties and assets it owns, leases and operates and to carry on its Business as such Business is conducted. The Company is qualified to do business as a foreign entity in each jurisdiction in which its ownership of property or the conduct of Business as now conducted requires it to qualify, except where failure to be so duly qualified would not reasonably be expected to, individually or in the aggregate, adversely affect the Company in any material respect. The Company has made available to Buyer an accurate and complete copy of each Governing Document of the Company, in each case, as in effect as of the date of this Agreement. Such Governing Documents are in full force and effect. The Company has not been dissolved or wound up and there are no reasons that would justify an administrative cancellation of the Company. The Company has no Subsidiaries and the Company does not own any securities of any other Person.

 

3.02           Due Authorization; Enforceability.

 

(a)                   The Company has the full requisite corporate power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party, and to perform its obligations under this Agreement and the other Transaction Documents to which it is a party, and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement and the other Transaction Documents to which the Company is a party (or will be a party at the Closing) and the consummation of the transactions contemplated hereby and thereby have been (or will be prior to the Closing) duly and validly authorized by all required organizational action on behalf of the Company.

 

(b)                   This Agreement and each of the other Transaction Documents to which the Company is a party (or will be a party at the Closing) constitutes (or will constitute) the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other Legal Requirements relating to or affecting creditors’ rights generally or by equitable principles (regardless of whether enforcement is sought at law or in equity).

 

3.03            No Conflicts; Required Filings and Consents.

 

(a)                   The execution and delivery of this Agreement by the Company and the execution and delivery of the other Transaction Documents to which the Company is a party does not and will not, and the performance and compliance with the terms and conditions hereof and thereof by the Company and the consummation of the transactions contemplated hereby and thereby by the Company will not (with or without notice or passage of time, or both) conflict with, result in any breach of, constitute a default under or an event creating rights of acceleration, termination or cancellation or loss of right under, result in a violation of, result in the creation of any Encumbrance under any assets of the Company or require any authorization, consent, approval, exemption or other action by or notice to any Governmental Entity or other third party, under: (i) the Governing Documents of the Company; (ii) any Law or Order applicable to the Company or by which any property or asset of the Company is bound or affected; or (iii) any Material Contract; except, in the case of clause (ii) or (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually or in the aggregate, reasonably be expected to adversely affect the Company in any material respect.

 

	7

(b)                   Except (i) as set forth on Schedule 3.03(b), (ii) for the federal securities Laws and any U.S. state securities or “blue sky” laws and (iii) as would not reasonably be expected to adversely affect the Company in any material respect, the Company is not required to submit any notice, report or other filing with any Governmental Entity in connection with the execution, delivery or performance by it of this Agreement or the consummation of the transactions contemplated hereby and no consent, approval or authorization of any Governmental Entity or any other party or Person is required to be obtained by the Company in connection with the Company’s execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

 

3.04            Title to Shares; Capitalization. The authorized and outstanding equity interests of the Company are as set forth in Schedule 3.04(a). The Company Shares represent all of the issued and outstanding equity interests of the Company and Seller is the sole owner of the Company. The Company Shares were duly and validly issued and are fully paid and non-assessable. Seller owns all of the issued and outstanding equity interests of the Company, free and clear of all Encumbrances. There are no outstanding, issued or authorized obligations, options, warrants, convertible securities, stock appreciation rights, profit interests, capital stock or other rights, agreements, arrangements or commitments of any kind relating to the equity interests of the Company or obligating the Company to issue or sell any equity interests, shares of capital stock of, or any other interest in, the Company. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any equity interests of the Company or to provide funds to, or make any investment in, any other Person. There are no agreements or understandings in effect with respect to the voting or transfer of any of the equity interests of the Company.

 

3.05           Financial Statements and Other Financial Matters; No Undisclosed Liabilities.

 

(a)                   Attached as Schedule 3.05(a) are the financial statements of the Company (collectively, the “Company Financial Statements”).

 

(b)                   The Company Financial Statements have been prepared on a consistent basis with the Company’s past practices, and fairly present in all material respects the financial condition and results of operations and cash flows of the Company at the respective dates included therein. Since December 31, 2020, the Company has not changed its accounting policies, principles, methods or practices in any material respect.

 

(c)                   There are no debts, obligations or liabilities (whether accrued, absolute, asserted or unasserted, known or unknown, primary or secondary, direct or indirect, contingent or otherwise), other than any such debts, obligations or liabilities (i) incurred in the Ordinary Course of Business since December 31, 2020 (none of which results from or arises out of any material breach of or material default under any contract, material breach of warranty, tort, material infringement or material violation of law), (ii) reflected or reserved against on the Company Financial Statements or (iii) that would not, individually or in the aggregate, reasonably be expected to be material to the Company.

 

(d)                   The Company has no Indebtedness outstanding as of the date hereof.

 

(e)                   Except as set forth in Schedule 3.05(e), all of the Accounts Receivable (i) represent legal, valid and binding obligations that arose in bona fide transactions from products sold or services rendered by the Company in the Ordinary Course of Business, (ii) are not the subject of any Legal Proceedings, and (iii) are fully collectible in the Ordinary Course of Business. To the Knowledge of the Company, there are no contests, claims, counterclaims, rights of set off or other defenses with respect to the Accounts Receivable.

 

	8

3.06           Absence of Certain Changes. During the period from December 31, 2020 to the date hereof, except as set forth in Schedule 3.06, the Company has conducted its Business in the Ordinary Course of Business and there has not been a Material Adverse Effect.

 

3.07           Tax Matters. Except as set forth in Schedule 3.07:

 

(a)                   all Taxes (whether or not shown on any Tax Return) for which the Company may be liable have been timely paid;

 

(b)                   all Tax Returns required to have been filed by or with respect to the Company have been timely filed, and all such Tax Returns are complete and accurate and disclose all Taxes required to be paid by or with respect to the Company for the periods covered thereby;

 

(c)                   no extension of time within which to file any Tax Return required to have been filed by or with respect to the Company is in effect;

 

(d)                   no waiver of any statute of limitations relating to Taxes for which the Company may be liable is in effect, and no written request for such a waiver is outstanding;

 

(e)                   Schedule 3.07(e) sets forth a schedule of the Tax Returns referred to in Section 3.07(b) with respect to which neither the appropriate Governmental Entity has completed its examination (with all issues finally resolved) nor the period for assessment of the associated Taxes (taking into account all applicable extensions and waivers) has expired;

 

(f)                    there is no action, suit, investigation, audit, claim or assessment pending or proposed or threatened with respect to Taxes for which the Company may be liable;

 

(g)                   no Governmental Entity (whether within or without the United States) in which the Company has not filed a particular type of Tax Return or paid a particular type of Tax has asserted in writing that the Company is required to file such Tax Return or pay such type of Tax in such taxing jurisdiction;

 

(h)                   all deficiencies asserted or assessments made as a result of any examination of the Tax Returns referred to in Section 3.07(b) have been paid in full or otherwise finally resolved;

 

(i)                     the charges, accruals and reserves for Taxes with respect to the Company reflected on the books of the Company (excluding any provision for deferred income taxes) are adequate to cover tax liabilities accruing through the end of the last period for which the Company have recorded items on their respective books, and since the end of the last period for which the Company have recorded items on their respective books, none of the Company has incurred any Tax liability, engaged in any transaction, or taken any other action, other than in the Ordinary Course of Business;

 

(j)                     there are no Tax rulings, requests for rulings, or closing agreements relating to Taxes for which the Company may be liable that could affect the Company’s liability for Taxes for any taxable period ending after the Closing Date;

 

(k)                the Company will not be required to include or accelerate the recognition of any item in income, or exclude or defer any deduction or other tax benefit, in each case in any taxable period (or portion thereof) after Closing, as a result of any (i) installment sale or open transaction disposition made on or prior to the Closing Date, (ii) prepaid, advance payment, or deposit amount received or deferred

 

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revenue accrued on or prior to the Closing Date, (iii) improper use of accounting method or change in method of accounting for a taxable period ending on or prior to the Closing Date (including, for the avoidance of doubt, any 481 adjustment pursuant to Section 13221(d) of U.S. P.L. 115-97), (iv) “closing agreement” as described in Section 7121 of the Code (or any similar provision of state, local or foreign income Tax laws) executed on or prior to the Closing Date, (v) election made under Section 108(i) of the Code on or prior to the Closing Date, (vi) intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding provision of state, local or foreign Tax law), or (vii) income inclusion pursuant to Sections 951 or 951A of the Code with respect to any interest held in a “controlled foreign corporation” (as that term is defined in Section 957 of the Code) on or before the Closing Date including, without limitation, any currently owing, accrued or deferred items of income pursuant to Section 965 of the Code, and the IRS has not proposed to any Company Entity in writing any such adjustment or change in accounting method;

 

(l)                  the Company has not (i) deferred the amount of the employer’s share of any “applicable employment taxes” under Section 2302 of the CARES Act, (ii) not received or claimed any Tax credits under Sections 7001 through 7005 of the Families First Act, and (iii) has not received or claimed any Tax credits under Section 2301 of the CARES Act.

 

(m)              no election has been made under Section 336(e) of the Code or the Treasury Regulations thereunder that will affect any item of income, gain, loss or deduction of the Company after the Closing;

 

(n)                all Tax Sharing Arrangements and Tax indemnity arrangements relating to the Company (other than this Agreement) will terminate prior to the Closing Date the Company will not have any liability thereunder on or after the Closing Date;

 

(o)                there are no liens for Taxes upon the assets of the Company except statutory liens relating to current Taxes not yet due;

 

(p)                all Taxes which the Company are required by law to withhold or to collect for payment have been duly withheld and collected and have been paid to the appropriate Governmental Entity, and the Company has complied with all information reporting (including Internal Revenue Service Forms W-2 and 1099) and backup withholding requirements, including maintenance of required records with respect thereto;

 

(q)                the Company has not been a member of any Company Group, and the Company presently has not or has not had any direct or indirect ownership interest in any corporation, partnership, joint venture or other entity;

 

(r)                 the Company has no liability for Taxes of another Person under Treasury Regulation § 1.1502-6 (or any similar provision of state, local or foreign law), under any agreement or arrangement, as a transferee or successor, or by contract or otherwise;

 

(s)                 the Company has not participated in any “listed transaction” within the meaning of Treasury Regulation § 1.6011-4(b)(2) and, with respect to each transaction in which the Company has participated that is a “reportable transaction” within the meaning of Treasury Regulation § 1.6011-4(b)(1), such participation has been properly disclosed on IRS Form 8886 (Reportable Transaction Disclosure Statement) and on any corresponding form required under state, local or other Law;

 

(t)                  any powers of attorney granted by the Company prior to the Closing relating to Taxes will terminate and be of no effect following the Closing;

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(u)                during the last three years, the Company has not been a party to any transaction treated by the parties thereto as one to which Section 355 of the Code (or any similar provision of state, local or foreign law) applied;

 

(v)                no attributes of the Company will be reduced or reattributed pursuant to Treasury Regulation § 1.1502-36;

 

(w)              the Company is not and during the past 12-month period has not been, a United States shareholder (within the meaning of Section 951(b) of the Code) of a controlled foreign corporation (within the meaning of Section 957 of the Code);

 

(x)                the Company has not and has not ever had a permanent establishment in any country other than the country of its incorporation;

 

(y)                there are no Tax credits, grants or similar amounts that are or could be subject to clawback or recapture as a result of (1) the transactions contemplated by this Agreement or (2) a failure by the Company to satisfy one or more requirements on which the credit, grant or similar amount is or was conditioned; and

 

(z)                the Company has not been required to establish a Subpart F income recapture account within the meaning of Treasury Regulation § 1.952-1(f) with respect to the Company.

 

3.08            Contracts.

 

(a)                   Schedule 3.08(a) sets forth a correct and complete list of the following Contracts to which the Company is a party or bound as of the date hereof, other than those that have terminated or have been fully performed in accordance with their terms or that have no material, continuing rights or obligations thereunder (each, as amended to date, a “Material Contract”):

 

(i)                  Company Employee Benefit Plan;

 

(ii)               each lease or agreement under which the Company is lessee of, or holds or operates any personal property owned by any other party, for which the annual rental exceeds

$75,000;

 

(iii)             each Contract or group of related Contracts that involves future payments, performance or services or delivery of goods or materials to or by the Company of any amount or value reasonably expected to exceed $75,000 in the 2019 fiscal year or the 2020 fiscal year;

 

(iv)              requiring or providing for any capital expenditure in excess of

$75,000;

 

(v)                each joint venture, partnership, strategic alliance or licensing arrangement (other than licenses of Intellectual Property) with a third party;

 

(vi)              except for Off-the-Shelf Software and non-exclusive software end-user agreements granted to customers by Company in the Ordinary Course of Business, any Contract for purchase, sale or license, or joint ownership of Intellectual Property from any third party to the Company or from the Company to any third party

 

(vii)            Contracts with any Affiliate of the Company;

 

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(viii)          each Contract that prohibits the Company from competing in any line of business, in any field of use or in any geographic area or that restricts the Company’s ability to solicit or hire any person as an employee;

 

(ix)              each Contract with any current or former director, officer, employee or equity holder of the Company (other than Contracts relating to any person’s employment with the Company);

 

(x)                each Contract under which the Company has made advances or loans to another Person, other than with respect to employee advances for business expenses in the Ordinary Course of Business;

 

(xi)              each Contract relating to the incurrence, assumption or guarantee

of any Indebtedness;

 

(xii)            each Contract for the sale of products by the Company that (A) contains “most favored nation” pricing or similar pricing terms or any exclusive or preferential rights to provide, sell or distribute any product of the Company to any Person or any other exclusive provisions running in favor or against the Company or (B) contains any terms providing for a special or extended warranty;

 

(xiii)          each Contract with a term of three (3) years or more following the Closing Date that is not subject to termination, in the sole discretion of the Company, upon not more than sixty (60) days’ notice with no termination fee;

 

(xiv)          each Contract relating to an acquisition, sale, merger or divestiture of or by the Company (or any current or former Affiliates thereof) that contains any ongoing covenants or indemnification obligation by or for the benefit of the Company (or any of its Affiliates);

 

(xv)            each Contract that gives any counterparty thereof rights to audit the Company and allows such counterparty or their representatives to enter the premises of the Company in connection with such audit;

 

(xvi)          each Contract with a Governmental Authority;

 

(xvii)        each Contract with a Material Customer or Material Supplier;

 

(xviii)      each Contract with any labor union or collective bargaining association representing any employee of the Company, including any foreign equivalent thereof;

 

(xix)          each Contract for the sale of any of the material assets of the Company or for the grant to any Person of any preferential purchase rights to purchase any of its material assets;

 

(xx)            each Real Property Lease; and

 

(xxi)          any other contract that is material to the operation of the

Company, taken as a whole.

 

(b)                   With respect to each Material Contract, and except as set forth in Schedule 3.08(b), (i) such Material Contract is the legal and valid obligation of the Company, and, to the Knowledge

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of the Company, of each other party thereto, enforceable against each of the Company and, to the Knowledge of the Company, each other party thereto, in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other Legal Requirements relating to or affecting creditors’ rights generally or by equitable principles (regardless of whether enforcement is sought at law or in equity), (ii) such Material Contract is in full force and effect, and Company has performed all material obligations required to be performed by it under the Material Contracts and the Company is not in breach of, or default under, any Material Contract in any material respect, and to the Knowledge of the Company no other party to any Material Contract is in breach or default thereunder in any material respect, and (iii) the Company has not received or given a written notice of its intent to terminate, modify, amend or otherwise materially alter the terms and conditions of any Material Contract or has received any written claim of default under any Material Contract. Seller has furnished or made available to Buyer true and complete copies of all Material Contracts, including any amendments, waivers or other changes to such Material Contracts.

 

3.09           Intellectual Property.

 

(a)                   Except as set forth on Schedule 3.09(a), the Company solely owns, or licenses or otherwise possesses all legal rights to all Intellectual Property used in the business of the Company.

 

(b)                   Schedule 3.09(b) lists all: (i) Intellectual Property owned by the Company that is the subject of any application or registration before any Governmental Entity or other registry responsible for the registration of Intellectual Property right (“Company Registered Intellectual Property”), and any material Intellectual Property owned by the Company that is not the subject of any pending application or registration (collectively “Scheduled Company Intellectual Property”), including whether each such item of Intellectual Property is solely owned or co-owned and, where applicable, the jurisdictions, both domestic and foreign, in which each such item of Intellectual Property has been issued or registered or in which any application for such issuance and registration has been filed; (ii) licenses, sublicenses and other agreements as to which the Company is a party and pursuant to which any Person is authorized to use any Intellectual Property owned by the Company, other than Standard Outbound IP Licenses; (iii) licenses, sublicenses and other agreements to which the Company is a party and pursuant to which the Company is authorized to use any third party’s Intellectual Property that is incorporated or used in any product of the Company or which is material to its operations, and royalties owed under any such agreement, including agreements with contractors for the creation of Intellectual Property and licenses for Open Source Software, but excluding Standard Inbound IP Licenses; and (iv) all agreements to which the Company is a party that provide for an optional or contingent license, sublicense or other agreement as described in clauses (ii) or (iii) above in this paragraph.

 

(c)                   All Scheduled Company Intellectual Property is valid, enforceable, has, with respect to the Company Registered Intellectual Property, been duly maintained, is in full force and effect, and has not been cancelled, expired or abandoned other than as indicated in Schedule 3.09(b). The Company is not obligated to pay any royalties and/or fees to any third party with respect to any Intellectual Property license, other than under those licenses listed in Schedule 3.09(b). None of the Company Patent Rights were developed under a funding agreement with the Government of the United States of America or with any state governments, pursuant to which the government of the United States of America or with any state governments has rights relative thereto.

 

(d)                   Except as set forth on Schedule 3.09(d), the Company has not received (i) any notice from, or demand or claim by, any third party that any of the Scheduled Company Intellectual Property is not solely owned by the Company, except as identified in Schedule 3.09(b), or any Intellectual

 

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Property Owned by the Company is subject to a compulsory license, or (ii) any notice challenging the validity or enforceability of any Intellectual Property Rights owned by the Company.

 

(e)                   No Company Patent Rights listed in Schedule 3.09(b) or subject matter thereof is subject to any competing or interfering claims by any third party. No Company Patent Rights has been the subject of any interference, re-examination, opposition, or other proceedings placing into question the validity, ownership, or scope of such rights and, to the Knowledge of the Company, there is no reasonable basis for any such interference, reexamination, opposition, or other proceedings placing into question the validity, ownership, or scope of such rights.

 

(f)                    The Company has taken all action necessary to maintain the enforceability and registration of all Scheduled Company Intellectual Property material to the operation of the Business of the Company.

 

(g)                   The Company has taken commercially reasonable measures to maintain and protect the secrecy, confidentiality and value of the Trade Secrets of the Company. To the Knowledge of the Company, no unauthorized disclosure of any such Trade Secret has been made. To the Knowledge of the Company, no Trade Secrets or proprietary information is part of public knowledge or literature, and no Trade Secret or other proprietary information has been devolved or appropriated for the benefit of any person than the Company or to the detriment of the Company.

 

(h)                   Except as set forth in Schedule 3.09(h), the Company has not received any invitation to license or written charge, complaint, claim, demand, or notice that the Company has infringed, misappropriated, or acted in conflict with any of the Intellectual Property owned by any third party.

 

(i)                     To the Knowledge of the Company, the Company is not in violation or infringement of any Intellectual Property of any third party. To the Knowledge of the Company, no person has infringed, diluted, misappropriated, violated or engaged in any unlawful competition with respect to the Company or any Intellectual Property owned by the Company.

 

(j)                     Except as disclosed on Schedule 3.09(j), to the Knowledge of the Company, there has been no, and there is no, unauthorized use, disclosure, infringement or misappropriation of any Scheduled Company Intellectual Property, or any third party Intellectual Property rights to the extent licensed to the Company, by any third party. The Company has not sent to any third Person any written charge, complaint, claim, demand or notice asserting that such Person has infringed, misappropriated, or acted in conflict with any of the Intellectual Property owned by the Company.

 

(k)                   Subject to any necessary notices and consents, the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and thereby will not result in the forfeiture, cancellation, termination or other material impairment, or breach of, or give rise to any right of any Person to cancel, terminate or otherwise impair the right of the Company to own or use or otherwise exercise any other rights that the Company currently have with respect to any Scheduled Company Intellectual Property that is, individually or in the aggregate, material to the Company.

 

(l)                     Except as set forth on Schedule 3.09(l), each current and former officer, employee and consultant of the Company or its Affiliate has executed and delivered to the Company or its Affiliate a written agreement in substantially the form or forms made available by Seller or the Company to Buyer, providing that the Company or its Affiliate will become or may elect to become the owner or assignee of any Intellectual Property such Person creates within the scope of his or her employment or in the case of a non-employee, from the services such Person performs for the Company or its Affiliate, unless

 

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or except to the extent that the Company or its Affiliate is entitled to become or elects to become the owner or assignee of such Intellectual Property by operation of Law.

 

(m)                 The Company or its Affiliate has entered into written confidentiality agreements with all employees and third parties to whom the Company or its Affiliate has disclosed material confidential Intellectual Property. To the Knowledge of the Company, there has been no breach or other violation of such agreements.

 

(n)                   No person other than Company possesses any current or contingent rights of any kind to any source code included in the Intellectual Property owned by the Company, and Company has not granted any current or contingent rights of any kind to any source code that is part of any license to any third party.

 

(o)                   Schedule 3.09(b)(iii) contains a complete and accurate list of all Open Source Software incorporated into, embedded in, or distributed in connection with any Software owned by the Company that is material to the Business. Except as set forth in Schedule 3.09(o), no Software incorporated into, embedded in, or distributed in connection with any Company owned Intellectual Property, or any Company service is, in whole or in part, subject to or governed by an any license that requires, as a condition of use, modification or distribution of Software subject to such license, that (i) such Software or other Software linked, combined or distributed with such Software be disclosed or distributed in source code form, or (ii) such Software or other Software linked, combined or distributed with such Software or any associated Intellectual Property be made available by Company without cost (including for the purpose of making additional copies or derivative works). Company has taken all commercially reasonable steps to ensure that no Company employee, consultant or contractor uses any Open Source Software in any manner that would create any Material Adverse Effect. Schedule 3.09(o) describes, to the Knowledge of the Company, any use of any Open Source Software by any Company employee, consultant or contractor that could reasonably be expected to adversely affect any material Intellectual Property Owned by the Company or Company’s rights thereto.

 

3.10           Legal Proceedings. Except as set forth in Schedule 3.10, there are no, and since January 1, 2020 there have not been any, Legal Proceedings pending, nor, to the Knowledge of the Company, is there any Legal Proceeding threatened against the Company.

 

3.11           Orders. Except as set forth in Schedule 3.11, there is no judgment, order, writ, injunction, decree or other similar award outstanding (whether rendered by a court, administrative agency or other Governmental Entity, or by arbitration) against the Company or by which the Company is bound that involves an unsatisfied monetary obligation or otherwise materially affects the ongoing Business or any material assets or properties of the Company, and the Company is not in breach of any such judgment, order, writ, injunction, decree or similar award; provided that the representation in this sentence is not intended to cover Permits (which are covered in Section 3.14).

 

3.12           Employee Benefit Plans.

 

(a)                   The Company does not maintain, contribute to, have any obligation to contribute to, or have any Liability under or with respect to any Company Employee Benefit Plan.

 

(b)                   None of the Company nor any ERISA Affiliate of the Company sponsor, maintain, contribute to or have any Liability (contingent or current) with respect to a plan subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code (or done so or had any such Liability at any time since December 23, 2019). None of the Company nor any ERISA Affiliate of the Company contributes to or has an obligation to contribute to, nor at any time within the four years prior to the Closing

 

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Date contributed to, had an obligation to contribute to, or was a participating employer in any “multiemployer plan” as defined in Section 3(37) of ERISA or Section 414(f) of the Code or a “multiple employer plan” within the meaning of Section 210(a) of ERISA or Section 413(c) of the Code.

 

(c)                   The Company has no Liability to provide, nor has the Company ever had Liability to provide to any Person, post-termination welfare benefits, other than as required by Section 4980B of the Code. The Company has no Liability with respect to, a “multiple employer welfare arrangement” (as defined in Section 3(40)(A) of ERISA).

 

(d)                   The Company has not been required to withhold or pay any Taxes as a result of a failure to comply with Section 409A of the Code. The Company has no obligation to make a “gross-up” or similar payment in respect of any Taxes that may become payable under Section 409A of the Code.

 

(e)                   Except as set forth in Schedule 3.12(i), neither the execution, delivery, nor performance of this Agreement or any other transaction contemplated by this Agreement will or can reasonably be expected to (either alone or upon the occurrence of any additional or subsequent events) entitle any current or former employee, officer, director, or consultant or independent contractor of the Company to any payment (including severance pay or similar compensation), cancellation of Indebtedness, or increase in compensation. No amount paid or payable (whether in cash, property, or the form of benefits) in connection with any transaction contemplated by this Agreement will or may (either alone or upon the occurrence of any additional or subsequent events) be an “excess parachute payment” (within the meaning of Section 280G of the Code), or would constitute an “excess parachute payment” if such amount was subject to the provisions of Section 280G of the Code. The Company has no obligation to make a “gross- up” or similar payment with respect to any Taxes that may become payable under Section 4999 of the Code.

 

3.13            Insurance. Schedule 3.13 sets forth a list of all policies of insurance maintained by, or for the benefit of, the Company (specifying the insurer and type of insurance) and also lists each claim (other than a claim that resulted in coverage of less than $50,000) made by or for the benefit of the Company since January 1, 2018 (including with respect to insurance obtained but not currently maintained). Except as set forth in Schedule 3.13, all insurance coverage maintained with respect to the Company is occurrence-based. With respect to each insurance policy listed in Schedule 3.13 neither the Company nor, to the Knowledge of the Company, any insurer, is in breach or default (including with respect to the payment of premiums or the giving of notices), under such policy. All such policies are in full force and effect and no notice of early cancellation or early termination has been received by the Company with respect to any such policy.

 

3.14           Legal Requirements and Permits.

 

(a)                   The Company is, and has been, in compliance in all material respects with all applicable Legal Requirements. To the Knowledge of the Company, the Company is not under investigation by any Governmental Entity with respect to any alleged material violation of any applicable Legal Requirements. To the Knowledge of the Company, the Company has not received any subpoena, written demand, inquiry, information request, complaint, allegation or notice of non-compliance with or violation of any Legal Requirements, including any Health Care Laws.

 

(b)                   The Company has been granted all licenses, permits, consents, approvals, franchises and other authorizations under any Legal Requirement (each a “Permit”) necessary for and material to the conduct of the Business as conducted as of the date hereof, taken as a whole (collectively, the “Material Permits”). The Material Permits are valid and in full force and effect and the Company is in material compliance with all of its Material Permits. There is no lawsuit or similar proceeding pending or,

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to the Knowledge of the Company, threatened, to revoke, suspend, withdraw or terminate any Material Permit.

 

3.15           Environmental Matters.

 

(a)                   The Company is, and at all times has been, in compliance in all material respects with all applicable Environmental Laws.

 

(b)                   There is no material Environmental Claim pending or, to the Knowledge of the Company, threatened against the Company.

 

(c)                   The Company has not entered into or is subject to any Order relating to compliance with, or the Release or cleanup of Hazardous Materials under, any applicable Environmental Laws.

 

(d)                   The Company has not assumed or provided indemnity against any material liability of any other Person under any Environmental Laws.

 

3.16            Relationships with Related Persons. Except as set forth in Schedule 3.16, the Company is not party to any Contracts with any Affiliate, shareholder, employee, officer or director of the Company other than Contracts governing an individual’s provision of services to the Company and employee benefits. The Company has not loaned any amounts that remain outstanding to any director, officer, shareholder, member, manager or employee of the Company, and the Company has not borrowed funds from any of the foregoing that remains outstanding. There are no loans, advances or Indebtedness incurred by the Company from any director, officer, shareholder, member, manager, employee or Affiliate of the Company. Except as set forth on Schedule 3.16, no Affiliate (other than Seller) of the Company, (i) owns any material property right, tangible or intangible, which is used by the Company in the conduct of its Business or (ii) owns, directly or, to the Knowledge of the Company, indirectly, any Person that is a material customer, supplier, competitor or lessor of the Company.

 

3.17           Employees; Employment Matters and Independent Contractors.

 

(a)                   The Company does not have, and has never had, any employees.

 

(b)                   The Company is not bound by or subject to any collective bargaining agreement or other Contract with any labor union. To the Knowledge of the Company, except as set forth in Schedule 3.17(a), as of the date hereof, no labor union has requested or has sought to represent any of the employees of the Business in the United States. As of the date hereof and within the 12 months prior to the date hereof, there is no, nor has there been any strike, lockout, work stoppage, slowdown, picketing or other labor dispute involving the employees of the Business in the United States pending or, to the Knowledge of the Company, threatened against the Company. The Company has not engaged in any plant closing or employee layoff activities that would violate or require notice under the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any similar state or local plant closing or mass layoff statute, rule or regulation, and the Company has not any outstanding liability under any such Law.

 

(c)                   The Business is in compliance in all material respects with all applicable Laws respecting labor, employment, fair employment practices (including equal employment opportunity laws), terms and conditions of employment, classification of employees (as exempt or non-exempt for overtime purposes), workers’ compensation, occupational safety and health, immigration, affirmative action, employee and data privacy, plant closings, and wages and hours, and the Company has no liability under any such Laws.

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(d)                   To the Knowledge of the Company, no senior executive or other key employee of the Business is party to any confidentiality, non-competition, non-solicitation, proprietary rights or other such agreement that would materially restrict the performance of such Person’s employment duties with the Business or the ability of the Company to conduct its Business.

 

(e)                   There are no employees of the Business outside the United States.

 

(f)          The Company has no liability or obligations under any applicable Law, including under or on account of any Company Employee Benefit Plan, arising out of the misclassification of any person as a consultant, independent contractor or temporary employee, as applicable, and no such person is entitled to any compensation or benefits in any amount from the Company under any applicable Law or Company Employee Benefit Plan that he or she has not received.

 

3.18            Material Customers and Suppliers. Schedule 3.18 sets forth a true and complete list of (a) the 20 largest customers of the Company on a consolidated basis (based on aggregate gross revenues) (each, a “Material Customer”) and (b) the 10 largest suppliers of the Company on a consolidated basis (based on dollar volume of purchases from such suppliers) (each. a “Material Supplier”), in each case, for the 12- month period ended December 31, 2020. To the Knowledge of the Company, there exists no condition or event that, after notice or passage of time or both, would constitute a material default by any party to any Material Contract with a Material Customer or Material Supplier. Except as set forth on Schedule 3.18, since January 1, 2020, no Material Customer has notified the Company in writing of any complaint concerning the products and services provided to such Material Customer and no Material Customer or Material Supplier has notified the Company in writing that it intends to terminate, discontinue or materially and adversely change its relationship with the Company.

 

3.19            No Brokers. Except as due to Solganick & Co., Inc., the Company is not liable for any investment banking fee, finder’s fee, brokerage payment or other like payment in connection with the origination, negotiation or consummation of the transactions contemplated herein that will be the obligation of Buyer or the Company (following the Closing).

 

3.20           Title, Condition and Sufficiency of Assets. Except as set forth on Schedule 3.20, the Company owns good title to, or holds pursuant to valid and enforceable leases, all of the items of tangible, personal property shown to be owned or leased by it on the Company Financial Statements, free and clear of all Encumbrances, except for Permitted Liens, except for items that have been sold or disposed of subsequent to the date hereof in the Ordinary Course of Business consistent with past practices.

 

3.21            Data Protection and Privacy.

 

(a)                   The Company: (i) complies in all material respects with applicable Company Privacy Policies and Data Protection Laws, including through adopting all appropriate technical and organizational security measures to protect Personal Data against a Data Breach; (ii) obtains and maintains all material registrations and notifications required under applicable Data Protection Laws, and any processing of personal data by or on its behalf is in accordance with such registrations and notifications in all material respects; (iii) duly provides data subjects with privacy policies and acquires any necessary consent of data subjects to the processing of their data, as required under applicable Data Protection Laws, and any processing of Personal Data by or on its behalf is in accordance with such policies and consents in all material respects; and (iv) has in place written agreements with any third party which it has authorized to have access to Personal Data, including processors, to ensure that the third party respects and maintains the confidentiality and security of the Personal Data and complies at all times with applicable Data Protection Laws in all material respects and such written agreements with such processors include processing provisions as required under Data Protection Laws.

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(b)                   As at the date hereof: (i) the Company is in compliance in all material respects with the terms of all Contracts to which it is a party relating to data privacy, security, or breach notification (including provisions that impose conditions or restrictions on the collection, use, storage, transfer or disposal of Personal Data); (ii) the Company has not received a written notice (including any enforcement notice), letter or complaint from a regulator or supervisory authority, any data subject or any third party alleging breach by it of any Data Protection Laws nor has it been involved in any litigation with respect to its processing of Personal Data; (iii) no data subject has been awarded compensation by a regulator or supervisory authority or by a court of law from the Company under any Data Protection Laws;

(iv) no request has been made by a data subject to, or order has been made by a regulator or supervisory authority or a court of law against, the Company for access to, the rectification, restriction, blocking, erasure or destruction of any Personal Data under any Data Protection Laws; and (v) the Company has not transferred Personal Data outside of the EEA, Switzerland, the United Kingdom or any other country other than in compliance with Data Protection Laws.

 

(c)                   Neither the execution, delivery or performance of this Agreement or any of the other agreements referred to in this Agreement, nor the consummation of any of the transactions contemplated by this Agreement or any such other agreements, nor Seller’s provision to Buyer of Personal Data or any other data or information in the databases of the Company, will result in any material violation of Seller or Company Privacy Policy, contract, or any Data Protection Laws or other Laws pertaining to privacy, Personal Data, data security, or spyware.

 

(d)                   The Company has established and is in material compliance with a written information security program that: (i) includes administrative, technical and physical safeguards designed to safeguard the security, confidentiality, and integrity of the Information Technology Systems and the data hosted therein; (ii) is designed to protect against unauthorized access to the Information Technology Systems and the systems of any third party service providers that have access to the Information Technology Systems and the data hosted therein; and (iii) complies with applicable Data Protection Laws and meets generally-accepted standards in the industry of the Company.

 

(e)                   To the Knowledge of the Company, the Company has not ever suffered a Data Breach with respect to the Information Technology Systems and no material breach or material violation of any security program described above has occurred, and there has been no unauthorized or illegal use of or access to the Information Technology Systems and the data hosted therein. To the Knowledge of the Company, no third party service provider working on behalf of the Company has had a Data Breach with respect to any data collected or used in connection with the operation of the Business. The Company has not notified, nor been required to notify, any data subject or supervisory authority of any Data Breach.

 

For purposes of this Section 3.21, the words “data subject”, “processing” and “processor” shall have the meaning given to them under Data Protection Laws.

 

3.22            Company Information. None of the information supplied or to be supplied by any of Seller or the Company or any of their respective Affiliates relating to the Company and/or their respective stockholders, members, control Persons and Representatives expressly for inclusion or in the filings with the SEC and mailings to Buyer’s stockholders with respect to the transactions contemplated by this Agreement, any supplements thereto and/or in any other document filed with any Governmental Entity in connection herewith, will, at the date of filing and/or mailing, as the case may be, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading (subject to the qualifications and limitations set forth in the materials provided by Seller or the Company or that are included in such filings and/or mailings). No representation or warranty is made by Seller or the Company

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or any of their respective Affiliates with respect to statements made or incorporated by reference therein based on information supplied or to be supplied by, or on behalf of, Buyer or any of its respective Affiliates.

 

ARTICLE IV 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

4.01           Title to Company Shares. Seller has good and valid title to the Company Shares. Seller is the sole owner of the Company. The Company Shares, when sold and delivered in accordance with and for the consideration set forth in this Agreement, will be free and clear of all Encumbrances and free of restrictions on transfer other than restrictions on transfer under the Transaction Documents and applicable state and federal securities Laws.

 

4.02            Organization and Good Standing. Seller is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. Seller has all requisite organizational power and authority to own, lease and operate the properties and assets it owns, leases and operates and to carry on its business as such business is conducted, except where failure to be so duly qualified would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect. Seller is qualified to do business as a foreign entity in each jurisdiction in which its ownership of property or the conduct of business as now conducted requires it to qualify, except where failure to be so duly qualified would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect. There is no pending, or to Seller’s Knowledge, threatened, action for the dissolution, liquidation or insolvency of Seller.

 

4.03            Due Authorization; Enforceability.

 

(a)                   Seller has the full requisite organizational power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party, and to perform its obligations under this Agreement and the other Transaction Documents to which it is a party, and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement by Seller and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action, and no other proceedings on their part are necessary to authorize the execution, delivery or performance of this Agreement.

 

(b)                   This Agreement and each of the other Transaction Documents to which Seller is a party (or will be a party at the Closing) has been (or will be prior to Closing) duly executed and delivered by Seller and, assuming that this Agreement is a valid and binding obligation of Buyer, this Agreement and each of the other Transaction Documents to which Seller is a party (or will be a party at the Closing) constitutes (or will constitute) a valid and binding obligation of Seller, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other Legal Requirements relating to or affecting creditors’ rights generally or by equitable principles (regardless of whether enforcement is sought at law or in equity).

 

4.04            No Conflicts; Consents. The execution and delivery of this Agreement by Seller and the execution and delivery of the other Transaction Documents to which Seller is a party does not and will not conflict with, result in any breach of, constitute a default under or an event creating rights of acceleration, termination or cancellation or loss of right under, result in a violation of, result in the creation of any Encumbrance under any assets of Seller or require any authorization, consent, approval, exemption or other action by or notice to any Governmental Entity or other third party, under: (i) the Governing Documents of Seller, or (ii) any Law or Order applicable to Seller, or by which any property or asset of Seller is bound or affected; except, in the case of clause (ii), for any such conflicts, violations, breaches, defaults or other

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occurrences that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

4.05           Legal Proceedings. There are no material Legal Proceedings pending or, to the knowledge of Seller, threatened, that (a) challenge the validity or enforceability of Seller’s, obligations under this Agreement or the other Transaction Documents to which Seller is a party, (b) seek to prevent, delay or otherwise would reasonably be expected to materially and adversely affect the consummation by Seller of the transactions contemplated herein or therein or (c) would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

4.06           Legal Requirements. Except as would not, individually or in the aggregate, have a Material Adverse Effect, Seller is, and since December 23, 2019 has been, in compliance with all applicable Legal Requirements. Except as would not, individually or in the aggregate, have a Material Adverse Effect, none of Seller or its Subsidiaries is under investigation by any Governmental Entity with respect to any alleged material violation of any applicable Legal Requirements.

 

4.07           No Brokers. Except as due to Solganick & Co., Inc., there are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement based on any agreement made by or on behalf of Seller.

 

4.08           Investment Information.

 

(a)                   Seller has been given access to certain information regarding Buyer, including Buyer’s filings with the United States Securities and Exchange Commission available at www.sec.gov (“SEC Filings”), which includes the current financial condition of Buyer and the risks associated with an investment therein, and has utilized such access to its satisfaction for the purpose of obtaining investment information about Buyer.

 

(b)                   Seller acknowledges that an investment in the Buyer Common Stock involves a high degree of risk and Seller has read and understands the SEC Filings, including the risk factors included in Buyer’s most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q. Seller is in a financial position to hold the Buyer Common Stock indefinitely and is able to bear the economic risk and withstand a complete loss of an investment in the Common Stock.

 

(c)                   Seller has obtained, to the extent Seller deems necessary, professional advice with respect to the risks inherent in the investment in the Buyer Common Stock, the condition and business of Buyer, and the suitability of the investment in the Buyer Common Stock in light of Seller’s financial condition and investment objectives.

 

(d)                   Seller, either alone or with the assistance of Seller’s professional advisor(s), if any, is a sophisticated investor, is able to fend for itself in the transactions contemplated by this Agreement, and has such knowledge and experience in financial and business matters that Seller is capable of evaluating the merits and risks of the prospective investment in the Buyer Common Stock.

 

(e)                   The Buyer Common Stock will be acquired for investment purposes for Seller’s own account, not as a nominee or agent, and not with a view to the distribution of any part thereof. Seller has no present intention of selling, granting any participation in or otherwise distributing the same in a manner contrary to the Securities Act, or any applicable state securities or blue sky law, and Seller does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect to any of the Buyer Common Stock.

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(f)                    Seller has been solely responsible for Seller’s own due diligence investigation of Buyer and its business, and Seller’s analysis of the merits and risks of the investment made pursuant to this Agreement, and is not relying on anyone else’s analysis or investigation of Buyer, its business or the merits and risks of the Buyer Common Stock, other than professionals employed or engaged specifically by Seller to assist Seller in taking any action or performing any role relative to the arranging of the investments being made pursuant to this Agreement.

 

(g)                   Seller realizes that: (a) the issuance of the Buyer Common Stock has not been, and will not be, registered under the Securities Act or under the securities laws of any state or other jurisdiction, and the Buyer Common Stock is characterized under the Securities Act as a “restricted security” and therefore, cannot be sold or transferred unless such resale is subsequently registered under the Securities Act or an exemption from such registration is available. In connection with this subject, Seller represents that Seller is familiar with Rule 144 promulgated under the Securities Act (“Rule 144”), as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

 

(h)                   Seller has been advised that the issuance of the Buyer Common Stock is not being registered under the Securities Act or any other applicable state securities laws, and is being offered and sold pursuant to exemptions from such laws, and that Buyer’s reliance upon such exemptions is predicated in part on Seller’s representations contained herein. Seller represents that it is an “accredited investor” as defined under Rule 501(a) of Regulation D under the Securities Act, has not been organized for the specific purpose of investing in the Buyer Common Stock and is not purchasing the Buyer Common Stock as the result of any “general solicitation” or “general advertising” as those terms are used in Regulation D under the Securities Act.

 

(i)                     Without in any way limiting the representations set forth above or Buyer’s covenants in Section 10.03, Seller further agrees that it may not make any disposition of all or any portion of the Buyer Common Stock unless and until:

 

(i)                  There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement;

 

(ii)                Seller shall have notified Buyer of the proposed disposition and shall have furnished Buyer with a detailed statement of the circumstances surrounding the proposed disposition, and Seller shall have furnished Buyer with an opinion of counsel, reasonably satisfactory to Buyer, that such disposition will not require registration of such shares under the Securities Act; or

 

(iii)             Buyer shall be satisfied that such proposed disposition complies in all respects with Rule 144 or any successor rule providing a safe harbor for such dispositions without registration and Seller shall have furnished Buyer with an opinion of counsel, reasonably satisfactory to Buyer, that such disposition is in accordance with Rule 144.

 

ARTICLE V 

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Except as disclosed in the Buyer SEC Reports filed with or furnished to the SEC after January 1, 2018 and prior to the date of this Agreement (other than any information that is contained solely in the “Risk Factors” section of such Buyer SEC Reports), or in the Buyer Disclosure Schedule, Buyer hereby represents and warrants to Seller and the Company as follows:

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5.01            Organization and Good Standing. Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. Buyer has all requisite corporate power and authority to own, lease and operate the properties and assets it owns, leases and operates and to carry on its business as such business is conducted, except where failure to be so duly qualified would not reasonably be expected to, individually or in the aggregate, have a Buyer Material Adverse Effect. Buyer is qualified to do business as a foreign entity in each jurisdiction in which its ownership of property or the conduct of business as now conducted requires it to qualify, except where failure to be so duly qualified would not reasonably be expected to, individually or in the aggregate, have a Buyer Material Adverse Effect. There is no pending, or to Buyer’s Knowledge, threatened, action for the dissolution, liquidation or insolvency of Buyer.

 

5.02           Due Authorization; Enforceability.

 

(a)                   Buyer has the full requisite corporate power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party, and to perform its obligations under this Agreement and the other Transaction Documents to which it is a party, and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement by Buyer and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action, and no other proceedings on their part are necessary to authorize the execution, delivery or performance of this Agreement.

 

(b)                   This Agreement and each of the other Transaction Documents to which Buyer is a party (or will be a party at the Closing) has been (or will be prior to Closing) duly executed and delivered by Buyer and, assuming that this Agreement is a valid and binding obligation of Seller, this Agreement and each of the other Transaction Documents to which Buyer is a party (or will be a party at the Closing) constitutes (or will constitute) a valid and binding obligation of Buyer, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other Legal Requirements relating to or affecting creditors’ rights generally or by equitable principles (regardless of whether enforcement is sought at law or in equity).

 

5.03            No Conflicts; Consents.

 

(a)                   The execution and delivery of this Agreement by Buyer and the execution and delivery of the other Transaction Documents to which Buyer is a party does not and will not conflict with, result in any breach of, constitute a default under or an event creating rights of acceleration, termination or cancellation or loss of right under, result in a violation of, result in the creation of any Encumbrance under any assets of Buyer or require any authorization, consent, approval, exemption or other action by or notice to any Governmental Entity or other third party, under: (i) the Governing Documents of Buyer; or (ii) any Law or Order applicable to Buyer, or by which any property or asset of Buyer is bound or affected; except, in the case of clause (ii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect.

 

(b)                   Except (a) for the federal securities Laws and any U.S. state securities or “blue sky” laws, (b) for the rules and regulations of Nasdaq, (c) as would not have a Buyer Material Adverse Effect, Buyer is not required to submit any notice, report or other filing with any Governmental Entity in connection with the execution, delivery or performance by it of this Agreement or the consummation of the transactions contemplated hereby and no consent, approval or authorization of any Governmental Entity or any other party or Person is required to be obtained by Buyer in connection with its execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

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5.04           Capitalization.

 

(a)                   The authorized capital stock of Buyer consists of 75,000,000 shares of Buyer Common Stock and 5,000,000 shares of Buyer Preferred Stock. As of January 13, 2021, 21,597,355 shares of Buyer Common Stock were issued and outstanding, and 0 shares of Buyer Preferred Stock were issued or outstanding. As of January 13, 2021, there were 7,297,105 shares of common stock reserved for issuance upon conversion of our outstanding senior secured convertible notes, 1,730,466 shares of our common stock issuable upon exchange of outstanding exchangeable shares, 5,874,439 shares of our common stock issuable upon exercise of our outstanding warrants, 824,143 shares of common stock underlying restricted stock units that are issued and outstanding but remain subject to vesting conditions, 590,615 shares available for issuance upon grant of awards under our 2019 long term equity incentive plan, and 0 shares of Buyer Common Stock were held in treasury.

 

(b)                   Except as set forth above in Section 5.04(a), as of January 1, 2021 no shares of capital stock of Buyer are issued and outstanding and Buyer does not have outstanding, and there are no, any securities convertible into or exchangeable for any shares of capital stock of Buyer, any rights to subscribe for or to purchase or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or known claims of any other character relating to the issuance of, any capital stock of Buyer, or any stock or securities convertible into or exchangeable for any capital stock of Buyer; and Buyer is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire, or to register under the Securities Act, any shares of capital stock of Buyer. Buyer does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or are convertible into or exercisable for securities having the right to vote) with the stockholders of Buyer on any matter. Except as set forth above in Section 5.04(a), as of January 13, 2021 there are no outstanding stock options, restricted stock units, restricted stock, stock appreciation rights, “phantom” stock rights, performance units, or other compensatory rights or awards (in each case, issued by Buyer or any of its Subsidiaries), that are convertible into or exercisable for a share of Buyer Common Stock on a deferred basis or otherwise or other rights that are linked to, or based upon, the value of Buyer Common Stock.

 

(c)                   The issued and outstanding shares of Buyer Common Stock (i) have been duly authorized and validly issued and are fully paid and nonassessable and free of preemptive rights,

(ii)  were issued in compliance with all applicable U.S. federal and state securities Laws, and (iii) subject to the Lock-Up Agreement, are freely tradable. Buyer has no rights plan, “poison-pill” or other similar agreement or arrangement or any anti-takeover provision in its Governing Documents that is, or at Closing shall be, applicable to Buyer, the Buyer Common Stock or the other transactions contemplated by this Agreement.

 

5.05           Subsidiaries. Buyer and its Subsidiaries do not directly or indirectly own, or hold any rights to acquire, any material capital stock or any other material securities, interests or investments in any other Person other than (a) their Subsidiaries or (b) investments in marketable securities acquired in the ordinary course of business in accordance with Buyer’s investment policy or that constitute cash or cash equivalents. Schedule 5.05 sets forth, as of the date of this Agreement, each of Buyer’s material Subsidiaries and the ownership interest of Buyer in each such material Subsidiary. The outstanding shares of capital stock, or membership interests or other ownership interests of, each material Subsidiary of Buyer, as applicable, are validly issued, fully paid and nonassessable and are owned of record and beneficially by Buyer, directly or indirectly. Buyer owns, beneficially and of record, directly or indirectly, all of the shares of capital stock of, or membership interests or other ownership interests in, each material Subsidiary of Buyer, free and clear of any Encumbrances other than Permitted Liens. Such outstanding shares of capital stock of, or membership interests or other ownership interests in, each material Subsidiary of Buyer, as applicable, are the sole outstanding securities of such Subsidiaries. The material Subsidiaries of Buyer do not have

	24

outstanding any securities convertible into or exchangeable for any capital stock of, or membership interests or other ownership interests in, such Subsidiaries, any rights to subscribe for or to purchase or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any other character relating to the issuance of, any capital stock of, or membership interests or other ownership interests in, such Subsidiaries, or any stock or securities convertible into or exchangeable for any capital stock of, or membership interests or other ownership interests in, such Subsidiaries; and neither Buyer nor any of its material Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire, or to register under the Securities Act, any capital stock of, or membership interests or other ownership interests in, any Subsidiary of Buyer.

 

5.06           Legal Proceedings. There are no material Legal Proceedings pending or, to the knowledge of Buyer, threatened, that (a) challenge the validity or enforceability of Buyer’s, obligations under this Agreement or the other Transaction Documents to which Buyer is a party, (b) seek to prevent, delay or otherwise would reasonably be expected to materially and adversely affect the consummation by Buyer of the transactions contemplated herein or therein or (c) would reasonably be expected to have, individually or in the aggregate, a Buyer Material Adverse Effect.

 

5.07           SEC Filings and Financial Statements. Buyer and its Subsidiaries have filed each report and definitive proxy statement (together with all amendments thereof and supplements thereto) required to be filed by Buyer or any of its Subsidiaries pursuant to the Exchange Act with the SEC since January 1, 2018 (as such documents and documents furnished to the SEC since January 1, 2018 have since the time of their filing been amended or supplemented and to the extent publicly available, the “Buyer SEC Reports”). As of their respective dates, after giving effect to any amendments or supplements thereto filed prior to the date hereof, the Buyer SEC Reports (i) complied in all material respects with the requirements of the Exchange Act and (ii) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received from the staff of the SEC with respect to any of the Buyer SEC Reports, and, to the knowledge of Buyer, none of the Buyer SEC Reports is subject to ongoing SEC review. The audited consolidated financial statements and unaudited interim consolidated financial statements (including, in each case, the notes and schedules thereto) included in the Buyer SEC Reports at the time they were filed or furnished (i) complied in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, (ii) were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto and except with respect to unaudited statements as permitted by Form 10-Q of the SEC) and (iii) fairly present (subject, in the case of the unaudited interim financial statements included therein, to normal year-end adjustments and the absence of complete footnotes) in all material respects the consolidated financial position of Buyer and its consolidated Subsidiaries as of the respective dates thereof and the consolidated results of their operations and cash flows for the respective periods then ended.

 

(d) Buyer has heretofore furnished to Seller complete and correct copies of all amendments and modifications that have not been filed by Buyer with the SEC to all agreements, documents and other instruments that previously had been filed by Buyer with the SEC and are currently in effect.

 

5.08            Legal Requirements. Except as would not, individually or in the aggregate, have a Buyer Material Adverse Effect, each of Buyer and its Subsidiaries is, and since January 1, 2018 has been, in compliance with all applicable Legal Requirements. Except as would not, individually or in the aggregate,

	25

have a Buyer Material Adverse Effect, none of Buyer or its Subsidiaries is under investigation by any Governmental Entity with respect to any alleged material violation of any applicable Legal Requirements.

 

5.09            No Brokers. Except for those due to A.G.P., there are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement based on any agreement made by or on behalf of Buyer.

 

5.10  Buyer Information. None of the information supplied or to be supplied by Buyer or any of its Affiliates expressly for inclusion in the Buyer SEC Reports, mailings to Buyer’s shareholders with respect to the transactions contemplated by this Agreement, any supplements thereto and/or in any other document filed with any Governmental Entity in connection herewith, will, at the date of filing and/or mailing, as the case may be, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading (subject to the qualifications and limitations set forth in the materials provided by Buyer or that is included in the applicable filings). No representation or warranty is made by Buyer with respect to statements made or incorporated by reference therein based on information supplied or to be supplied by, the Company, Seller or any of their respective Affiliates.

 

ARTICLE VI 

COVENANTS

 

6.01           Conduct of the Business.

 

(a)                   From the date hereof until the earlier of the termination of this Agreement and the Closing Date, except (i) if Buyer will have consented or (ii) as otherwise expressly contemplated by this Agreement, Seller will cause the Company to conduct its Business in the Ordinary Course of Business, and Seller shall cause the Company to use its commercially reasonable efforts to preserve intact the current business organization and ongoing operations of the Company, maintain relations and goodwill with suppliers and customers with whom the Company has a relationship, perform in all material respects its obligations under the Material Contracts, and maintain the properties and assets of the Company in their current state of repair and condition (excluding normal wear and tear). Without Buyer’s consent, with respect to the Company, Seller will not, and will not permit the Company to:

 

(i)                  issue, sell or deliver any of the Company’s equity securities or issue or sell any securities convertible into, or options with respect to, or warrants to purchase or rights to subscribe for, any of the Company’s equity securities;

 

(ii)                recapitalize, reclassify, combine, split, subdivide or redeem, declare any stock or equity dividend, purchase or otherwise acquire or otherwise make any change in, directly or indirectly, the Company’s equity interests or make any other change with respect to the Company’s capital structure;

 

(iii)             amend its Governing Documents;

 

(iv)              make any redemption or purchase of its equity interests;

 

(v)                create any new Subsidiary;

 

(vi)              (A) sell, assign or transfer any material portion of its tangible assets, or (B) mortgage, encumber, pledge, or impose any Encumbrance upon any of its assets;

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(vii)            incur or guaranty any Indebtedness, or amend and restate any

existing Indebtedness;

 

(viii)          adopt a plan of complete or partial liquidation, dissolution, merger or consolidation of the Company;

 

(ix)              sell, assign, transfer or exclusively license any material patents, trademarks, trade names or copyrights;

 

(x)                terminate, cause the termination of, amend or modify any Material Contract in any material respect, or waive or release any rights or claims thereunder;

 

(xi)              pay, discharge or satisfy any material claims or liabilities, or fail to pay or otherwise satisfy (except if being contested in good faith) any material accounts payable, liabilities, or obligations when due and payable outside the Ordinary Course of Business;

 

(xii)            directly or indirectly, merge with or into, consolidate with or acquire any material asset out of the ordinary course of, make any capital contributions to, or investments in, or any advance or loan to, or acquire the securities of, any other Person;

 

(xiii)          enter into any other transaction with any of its directors, officers or employees outside the Ordinary Course of Business consistent with past practice;

 

(xiv)          prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods (including positions, elections or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions to periods ending on or before the Closing Date), file any amended Tax Return, settle or otherwise compromise any claim relating to Taxes, enter into any closing agreement or similar agreement relating to Taxes, otherwise settle any dispute relating to Taxes, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, or request any ruling or similar guidance with respect to Taxes; or

 

(xv)            agree, whether orally or in writing, to do any of the foregoing, or agree, whether orally or in writing, to any action or omission that would result in any of the foregoing.

 

(b)                   From the date hereof until the earlier of the termination of this Agreement and the Closing Date, without the prior written approval of Buyer (which approval may be given or denied in Buyer’s sole discretion), the Company shall not, directly or indirectly, declare or pay any dividend on, or make any payment on account of, the purchase, redemption, defeasance, retirement or other acquisition of, any of its capital stock or common shares, as applicable, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property.

 

6.02            Access to Books and Records. From the date hereof until the earlier of the termination of this Agreement and the Closing Date, Seller will provide Buyer and its authorized representatives (the “Buyer’s Representatives”) with reasonable access during normal business hours, and upon reasonable notice, to the offices, properties, personnel, and all financial books and records of the Company in order for Buyer to have the opportunity to make such investigation as it will reasonably desire in connection with the consummation of the transactions contemplated hereby; provided, however, that in exercising access rights under this Section 6.02, Buyer and the Buyer’s Representatives will not be permitted to interfere unreasonably with the conduct of the Business of the Company. Notwithstanding anything contained herein

	27

to the contrary, no such access or examination will be permitted to the extent that it would require the Company to disclose information subject to attorney-client privilege or attorney work-product privilege or violate any applicable Law.

 

6.03            Efforts to Consummate. Subject to the terms and conditions herein provided, from the date hereof until the earlier of the termination of this Agreement and the Closing Date, Buyer and Seller will use their commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement (including the satisfaction, but not a waiver, of the closing conditions set forth in Section 7.02). The Parties acknowledge and agree that nothing contained in this Section 6.03 will limit, expand or otherwise modify in any way any efforts standard explicitly applicable to any Party’s obligations under this Agreement. During the period prior to the Closing Date, each Party shall act diligently and reasonably and shall use its respective commercially reasonable efforts to secure any consents, waivers and approvals of any third party required to be obtained to consummate the transactions contemplated by this Agreement.

 

6.04           Exclusive Dealing.

 

(a)                   Seller shall not, and shall not authorize or permit any Affiliates (including the Company) or any of its or their Representatives to, directly or indirectly, (i) encourage, solicit, initiate or facilitate inquiries regarding an Acquisition Proposal; (ii) enter into discussions or negotiations with, or provide any information to, any Person concerning a possible Acquisition Proposal; or (iii) enter into any agreements or other instruments (whether or not binding) regarding an Acquisition Proposal. The Company and Seller do not have any Acquisition Proposal as of the date of this Agreement. Seller shall immediately cease and cause to be terminated, and shall cause its Affiliates (including the Company) and all of its and their Representatives to immediately cease and cause to be terminated, all existing discussions or negotiations with any Persons conducted heretofore with respect to, or that would reasonably be expected to lead to, an Acquisition Proposal. For purposes hereof, “Acquisition Proposal” shall mean any bona fide inquiry, proposal or offer from any Person (other than Buyer or any of its Affiliates) concerning (x) a merger, consolidation, liquidation, recapitalization, share exchange or other business combination transaction involving the Company; (y) the issuance or acquisition of shares of capital stock or other equity securities of the Company; or (z) the sale, lease, exchange or other disposition of any significant portion of the Company’s properties or assets.

 

(b)                   The Company agrees that the rights and remedies for noncompliance with this Section 6.04 shall include having such provision specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to Buyer and that money damages would not provide an adequate remedy to Buyer.

 

6.05           Notification.

 

(a)                   From the date hereof until the earlier of the termination of this Agreement and the Closing Date, if after the date hereof Seller or the Company becomes aware of any fact or condition arising after the date hereof that constitutes a material breach of any representation or warranty made by the Company in Article III or Seller in Article IV or of any covenant that would cause the conditions set forth in Section 7.01(a) or Section 7.01(b), as applicable, not to be satisfied as of the Closing Date in any material respect, Seller will disclose in writing to Buyer such breach. If Seller fails to notify Buyer under this Section 6.05, (a) Buyer shall only be entitled to seek indemnification for breach of this Section 6.05 if Buyer is otherwise entitled to indemnification pursuant to Section 8.02 for breach of a representation and warranty or covenant and (b) a failure to comply with this Section 6.05 shall not cause the failure of any condition set forth in Section 7.01(a) or Section 7.01(b) to be satisfied unless the underlying change, event

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or development would independently result in the failure of a condition set forth in Section 7.01(a) or Section 7.01(b) to be satisfied.

 

(b)                   From the date hereof until the earlier of the termination of this Agreement and the Closing Date, if after the date hereof Buyer has knowledge of any fact or condition that constitutes a material breach of any representation or warranty made in Article V or any covenant that would cause the conditions set forth in Section 7.02(a) or Section 7.02(b), as applicable, not to be satisfied as of the Closing Date, Buyer will disclose in writing to Seller such breach. If Buyer fails to notify Seller under this Section 6.05, a failure to comply with this Section 6.05 shall not cause the failure of any condition set forth in Section 7.02(a) or Section 7.02(b) to be satisfied unless the underlying change, event or development would independently result in the failure of a condition set forth in Section 7.02(a) or Section 7.02(b) to be satisfied.

 

6.06           Non-Competition and Non-Solicitation.

 

(a)                   In furtherance of the transactions contemplated by this Agreement and to more effectively protect the value and goodwill of the Business, Seller covenants and agrees that, for a period commencing the Closing Date and ending on the first (1st) anniversary of the Closing Date (the “Restricted Period”), Seller shall not, directly or indirectly:

 

(i)                  throughout the United States, (A) sell or provide or offer any products or services that are the same or substantially similar to those sold, provided or offered by the Business (a “Competing Business”) or (B) own, acquire, or control any interest, financial or otherwise, in a Competing Business, other than ownership of 2% or less of the equity of a publicly-traded company; or

 

(ii)                (A) solicit or service, engage or contract with or take any action, in each case, that is intended to interfere with, impair, subvert, disrupt or alter the relationship, contractual or otherwise, between the Company and any current customer, supplier, vendor or other material business relation of the Company; provided, that Seller or its Affiliates may provide ByDesign services to CV Sciences and Slang World Wide, (B) solicit, induce, or recruit any Transferred Employees (a “Restricted Service Provider”) to terminate their relationship with the Company (it being understood that any such Restricted Service Provider’s response to a digital or print advertisement or recruiter solicitation for employment or engagement that is general in nature and not specifically directed to any such Restricted Service Provider shall not be deemed a “solicitation”, “inducement” or “recruitment” by Seller or its Affiliates), (C) intentionally divert or take away the business or patronage (with respect to the Business) of any of the clients, customers or accounts, or prospective clients, customers or accounts, of the Company or

(D) attempt to do any of the foregoing. Nothing in this Section 6.06(a)(ii) shall prevent Seller or any of its Affiliates from soliciting, inducing or recruiting (x) any Restricted Service Provider whose employment or engagement has been terminated by the Company or Buyer prior to any such solicitation, inducement or recruitment or (y) any Restricted Service Provider whose employment has been terminated by the Restricted Service Provider at least three (3) months prior any such solicitation, inducement or recruitment.

 

(b)                   Seller has carefully considered the nature and extent of the restrictions placed upon Seller by this Section 6.01, and hereby acknowledges and agrees that the same are reasonable in time, scope and territory, supported by adequate consideration and necessary for the protection of Buyer and are an essential inducement to Buyer consummating this Agreement and the transactions contemplated hereby. Seller further acknowledges and agrees that any violation of these restrictions could cause immediate and irreparable injury to Buyer and the Company for which there may be no adequate monetary damages. Seller recognizes and agrees that, other than as set forth in this Agreement or any Transaction Document, the restrictions herein and therein supersede and control over any prior restrictive covenants that Seller may have previously entered into with the Company, and also consents and agrees that the

	29

restrictions herein shall be enforceable by any successors or assigns of Buyer and the Company, as applicable.

 

(c)                   In the event of a breach or a threatened breach by Seller of such restrictions, Seller acknowledges and agrees that either or both of the Company and Buyer is entitled to seek specific performance and/or injunctive or other relief to enforce, or prevent any violations of, the provisions of this Section 6.01 without the requirement of posting bond, in addition to any other remedy to which Buyer may be entitled at Law or in equity.

 

(d)                   If any court determines that any provision of this Section 6.01 is unenforceable, such court will have the power to reduce the duration or scope of such provision, as the case may be, until, in such reduced form, such provision is enforceable.

 

6.07           Migration of Assets. Prior to Closing, Seller (to the extent Seller or its Affiliates participate in or provides services or assets reasonable necessary for the operation of the Business) shall transfer all operations, Intellectual Property and any other assets of Seller or its Affiliates that are used exclusively in the operation of the Business to the Company.

 

6.08            Transferred Employees. Seller shall terminate (or shall cause the termination of) the employment of those employees listed on Schedule 6.08 (the “Transferred Employees”) as of the Closing. Buyer shall offer employment to all of the Transferred Employees on substantially the same terms as such Transferred Employees were employed by the Business, subject in all cases, to Buyer’s standard hiring practices and policies. Seller shall use commercially reasonable efforts to assist Buyer in hiring Transferred Employees. The parties agree to cooperate with each other with respect to all oral or written communications or meetings with Transferred Employees primarily regarding future employment.

 

ARTICLE VII 

CONDITIONS TO CLOSING

 

7.01           Conditions to Buyer’s Obligations. The obligations of Buyer to consummate the transactions contemplated by this Agreement are subject to the satisfaction (or, if permitted by applicable Law, waiver by Buyer in writing) of the following conditions as of the Closing Date:

 

(a)                   The Fundamental Representations shall be true and correct in all material respects at and as of the date hereof and the Closing Date as though made at and as of the Closing Date (except to the extent expressly made as of an earlier date, in which case only as of such date) and (ii) all other representations and warranties of the Company and Seller contained in this Agreement shall be true and correct at and as of the date hereof and the Closing Date as though made at and as of the Closing Date (except to the extent expressly made as of an earlier date, in which case only as of such date), except, in the case of this clause (ii), where the failure of such representations and warranties to be so true and correct has not had, and would not have, a Material Adverse Effect;

 

(b)                   Seller and the Company will have performed and complied with in all material respects all of the covenants and agreements required to be performed by it under this Agreement at or prior to the Closing;

 

(c)                   No judgment, decree or order will have been entered that prevents the performance of this Agreement or the consummation of any of the transactions contemplated hereby, declares unlawful the transactions contemplated by this Agreement or causes such transactions to be rescinded;

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(d)                   There will not have been a Company Material Adverse Effect since the

date hereof;

 

(e)                   The Company will have delivered to Buyer a certificate of an authorized officer of the Company in his or her capacity as such, dated as of the Closing Date, stating that the conditions specified in Section 7.01(a) and Section 7.01(b) have been satisfied; and

 

(f)                    SAP SE, or an affiliate thereof, shall have approved Buyer as a partner for the purpose of selling the BusinessOne product.

 

7.02            Conditions to Seller’s and the Company’s Obligations. The obligation of Seller and the Company to consummate the transactions contemplated by this Agreement is subject to the satisfaction (or, if permitted by applicable Law, waiver by Seller and the Company in writing) of the following conditions as of the Closing Date:

 

(a)                   the representations and warranties contained in this Agreement will be true and correct in all material respects at and as of the date hereof and the Closing Date as though made at and as of the Closing Date (except to the extent expressly made as of an earlier date, in which case only as of such date), except where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to “materiality” or “Buyer Material Adverse Effect” set forth therein) has not had, and would not have, a Buyer Material Adverse Effect;

 

(b)                   Buyer will have performed and complied with in all material respects all the covenants and agreements required to be performed by them under this Agreement at or prior to the Closing;

 

(c)                   No judgment, decree or order will have been entered that prevents the performance of this Agreement or the consummation of any of the transactions contemplated hereby, declares unlawful the transactions contemplated by this Agreement or causes such transactions to be rescinded;

 

(d)                   the Buyer Common Stock issuable as the Share Consideration shall have been authorized for listing on Nasdaq subject to official notice of issuance; and

 

(e)                   Buyer will have delivered to Seller and the Company a certificate of an authorized officer of Buyer in his or her capacity as such, dated as of the Closing Date, stating that the preconditions specified in Section 7.02(a) and Section 7.02(b) have been satisfied.

 

ARTICLE VIII 

INDEMNIFICATION

 

8.01           Survival.

 

(a)                   Survival. Subject to Section 8.01(a) through Section 8.01(c) and 9.01(e), the representations and warranties made by Seller and the Company in this Agreement shall survive Closing until the date that is 12 months following the Closing Date (the “Expiration Date”); provided, however, that if, at any time on or prior to the Expiration Date, any Buyer Indemnitee delivers to Seller a written notice alleging the existence of an inaccuracy in or a breach of any of such representations and warranties and asserting a claim for recovery under Section 8.02 based on such alleged inaccuracy or breach, then the claim asserted in such notice shall survive the Expiration Date until such time as such claim is fully and finally resolved.

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(b)                   Fraud, Etc. Notwithstanding anything to the contrary contained in this Agreement, the limitations set forth in Section 8.01(a) and Section 8.01(b) shall not apply in the event of Fraud on the part of Seller or the Company.

 

(c)                   Buyer Representations. All representations and warranties made by Buyer shall terminate and expire as of the date that is 12 months following the Closing Date.

 

8.02           Indemnification.

 

(a)                   By Seller. From and after Closing (but subject to Section 8.01), Seller shall indemnify, defend, and hold harmless each of the Buyer Indemnitees from and against, and shall compensate and reimburse each of the Buyer Indemnitees for, any Damages that are directly or indirectly suffered or incurred at any time by any of the Buyer Indemnitees or to which any of the Buyer Indemnitees may otherwise directly or indirectly become subject at any time (regardless of whether or not such Damages relate to any third party claim) and that arise directly or indirectly from or as a result of, or are directly or indirectly connected with:

 

(i)                  any inaccuracy in or breach of any representation or warranty made by Seller or the Company in this Agreement or any of the Transaction Documents;

 

(ii)               any breach of any covenant or obligation of Seller required to be performed at or after Closing; and

 

(iii)             any Losses incurred by Buyer arising from the Cresco Labs Matter (as such term is defined in the Disclosure Schedule).

 

(b)                   By Buyer. From and after Closing (but subject to Section 8.01), Buyer shall indemnify, defend, and hold harmless each of the Seller Indemnitees from and against, and shall compensate and reimburse each of the Seller Indemnitees for, any Damages that are directly or indirectly suffered or incurred at any time by any of the Seller Indemnitees or to which any of the Seller Indemnitees may otherwise directly or indirectly become subject at any time (regardless of whether or not such Damages relate to any third party claim) and that arise directly or indirectly from or as a result of, or are directly or indirectly connected with:

 

(i)                  any inaccuracy in or breach of any representation or warranty made by Buyer in this Agreement or any of the Transaction Documents; and

 

(ii)               any breach of any covenant or obligation of Buyer or the Company in this Agreement required to be performed at or after Closing.

 

(c)                   Damage to Buyer. The parties acknowledge and agree that, if the Company suffers, incurs or otherwise becomes subject to any Damages as a result of or in connection with any inaccuracy in or breach of any representation, warranty, covenant or obligation, then (without limiting any of the rights of the Company as a Buyer Indemnitee) Buyer shall also be deemed, by virtue of its ownership of the Company, to have incurred Damages as a result of and in connection with such inaccuracy or breach.

 

8.03           Limitations.

 

(a)                   Basket. Subject to Section 8.03(b), Seller shall not be required to make any indemnification payment pursuant to Section 8.02(a)(i) for any inaccuracy in or breach of any representation or warranty in this Agreement until such time as the total amount of all Damages (including

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the Damages arising from such inaccuracy or breach and all other Damages arising from any other inaccuracies or breaches of any representations or warranties) that have been directly or indirectly suffered or incurred by any one or more of the Buyer Indemnitees, or to which any one or more of the Buyer Indemnitees has or have otherwise directly or indirectly become subject, exceeds $50,000 in the aggregate (the “Basket Amount”). If the total amount of such Damages exceeds the Basket Amount, then the Buyer Indemnitees shall be entitled to be indemnified against and compensated and reimbursed for the amount of such Damages, including the Basket Amount.

 

(b)                   Applicability of Basket. The limitations set forth in Section 8.03(a) shall not apply: (i) in the event of Fraud (whether on the part of Seller or the Company) or (ii) to inaccuracies in or breaches of any of the Fundamental Representations.

 

(c)                   Cap. Subject to Section 8.03(d), the maximum liability of Seller to the Buyer Indemnitees for monetary Damages resulting from the matters referred to in Section 8.02(a) shall be limited to the Escrow Amount (the “Cap.)”

 

(d)                   Applicability of Cap. The Cap shall not apply in the case of Damages arising from Fraud, which shall be payable by Seller from the amount of any issuance of Earnout Shares to be issued to Seller.

 

8.04           Claim Procedures. Any Indemnitee seeking indemnification hereunder shall promptly give to the Indemnifying Party a notice (a “Claim Notice”) describing in reasonable detail the facts giving rise to the claim for indemnification hereunder and shall include in such Claim Notice (if then known) the amount or the method of computation of the amount of such claim, and a reference to the provision of this Agreement or any other agreement, document or instrument executed hereunder or in connection herewith upon which such claim is based; provided, however, that a Claim Notice in respect of any Action by or against a third Person as to which indemnification will be sought shall be given promptly after the Action is commenced. The failure to give notice as provided in this Section 8.04 shall not relieve the Indemnifying Party of its obligations hereunder except to the extent it shall have been materially prejudiced by such failure.

 

8.05           Determination of Amount. After the giving of any Claim Notice pursuant to Section 8.04, the amount of indemnification to which an Indemnitee shall be entitled under this Article VIII shall be determined: (i) by the written agreement between Buyer and Seller; (ii) by a final judgment or decree of any court of competent jurisdiction; or (iii) by any other means to which Buyer and Seller shall agree. The judgment or decree of a court shall be deemed final when the time for appeal, if any, shall have expired and no appeal shall have been taken or when all appeals taken shall have been finally determined.

 

8.06           Third Person Claims.

 

(a)                   Any Indemnitee seeking indemnification provided for under this Agreement in respect of, arising out of or involving a claim or demand made by any third Person against the Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the third Person claim promptly after receipt by such Indemnitee of written notice of the third Person claim (including personal service of process). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by  the Indemnitee relating to the third Person claim. The failure to give notice as provided in this   Section 8.06 shall not relieve the Indemnifying Party of its obligations hereunder except to the extent it shall have been materially prejudiced by such failure.

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(b)                   In the event of the initiation of any Action against the Indemnitee by a third Person for which the Indemnitee is seeking indemnification provided for under this Agreement, the Indemnitee shall then have the right, using counsel reasonably satisfactory to the Indemnifying Party, to investigate, contest, or settle such third Person claim. The Indemnifying Party may thereafter participate in (but not control) the defense of any such third Person claim with its own counsel at its own expense. The Indemnitee may not settle any such claim which settlement obligates either party to pay money, to perform obligations or admit liability without the consent of the other party, such consent not to be unreasonably withheld, conditioned or delayed.

 

8.07            Tax Treatment of Indemnification Claims. Buyer and Seller agree to report each indemnification payment made in respect of Damages as an adjustment to the Share Consideration for federal income Tax purposes unless the indemnified party determines in good faith that such reporting position is incorrect (it being understood that if any reporting position is later disallowed in any administrative or court proceedings, the indemnifying party shall indemnify the indemnified party for the effects of such disallowance).

 

8.08           Escrow Release. In accordance with the terms of the Escrow Agreement, on the date that is twelve (12) months after the date hereof, any remaining portion of the Escrow Amount that is not subject to an outstanding Claim Notice shall be released to Seller.

 

8.09           Exclusive Remedy. Except for equitable remedies (including injunctive relief) and as expressly set forth in the Transaction Documents other than this Agreement, as applicable, and in the absence of Fraud, the parties acknowledge and agree that indemnification under this Article VIII shall be the sole and exclusive remedy of the parties with respect to Damages for any breach or liability under this Agreement and the transactions contemplated hereby.

 

ARTICLE IX 

TERMINATION

 

9.01           Termination. This Agreement may be terminated at any time prior to the Closing:

 

(a)                   by the mutual written consent of Buyer, Seller and the Company;

 

(b)                   by Buyer by written notice to Seller and the Company, if any of the representations or warranties of Seller and the Company set forth in Article III and Article IV will not be true and correct, or if Seller or the Company has failed to perform any covenant or agreement on the part of Seller or the Company set forth in this Agreement (including an obligation to consummate the Closing), such that the conditions to the Closing set forth in either Section 7.01(a) or Section 7.01(b) would not be satisfied at or prior to the Outside Date and the breach or breaches causing such representations or warranties not to be true and correct, or the failure to perform any covenant or agreement, as applicable, are not cured (if capable of being cured) within 30 days after written notice thereof is delivered to Seller and the Company;

 

(c)                   by Seller and the Company by written notice to Buyer, if any of the representations or warranties of Buyer set forth in Article V will not be true and correct, or if Buyer has failed to perform any covenant or agreement on the part of Buyer set forth in this Agreement (including an obligation to consummate the Closing), such that the conditions to the Closing  set  forth  in  either Section 7.02(a) or Section 7.02(b) would not be satisfied at or prior to the Outside Date and the breach or breaches causing such representations or warranties not to be true and correct, or the failures to perform any covenant or agreement, as applicable, are not cured (if capable of being cured) within 30 days after written notice thereof is delivered to Buyer; and

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(d)                   by Buyer or Seller and the Company by written notice to Seller and the Company or Buyer, as applicable, if the Closing has not occurred on or prior to April 30, 2021 (such date, the “Outside Date”) and the Party seeking to terminate this Agreement pursuant to this Section 9.01(e) will not have breached in any material respect its obligations under this Agreement in any manner that will have proximately caused the failure to consummate the transactions contemplated by this Agreement on or prior to the Outside Date.

 

9.02            Effect of Termination. In the event of the termination of this Agreement pursuant to Section 9.01, all obligations of the Parties hereunder (other than this Section 9.02, Section 11.01, and Article XI hereof, which will survive the termination of this Agreement) will terminate without any liability of any Party to any other Party; provided that no termination will relieve a Party from any liability arising from or relating to any willful and material breach of a representation or a covenant by such Party prior to termination.

 

ARTICLE X 

ADDITIONAL COVENANTS

 

10.01        Disclosure Schedules. All schedules attached hereto (each, a “Schedule” and, collectively, the “Disclosure Schedules”) are incorporated herein and expressly made a part of this Agreement as though completely set forth herein. All references to this Agreement herein or in any of the Schedules will be deemed to refer to this entire Agreement, including all Schedules. The Schedules have been arranged for purposes of convenience in separately numbered sections corresponding to the sections of this Agreement; however, any item disclosed in any part, subpart, section or subsection of the Schedule referenced by a particular section or subsection in this Agreement will be deemed to have been disclosed with respect to every other part, subpart, section and subsection in another Schedule if the relevance of such disclosure to such other part, subpart, section or subsection is reasonably apparent on its face, notwithstanding the omission of an appropriate cross-reference. Any item of information, matter or document disclosed or referenced in, or attached to, the Schedules will not (a) be used as a basis for interpreting the terms “material,” “Material Adverse Effect” or other similar terms in this Agreement or to establish a standard of materiality, (b) be deemed or interpreted to expand the scope of Seller’s, the Company’s or Buyer’s respective representations and warranties, obligations, covenants, conditions or agreements contained herein or (c) constitute, or be deemed to constitute, an admission to any third party concerning such item or matter. No disclosure in the Schedules relating to any possible breach or violation of any agreement or Law will be construed as an admission or indication that any such breach or violation exists or has actually occurred. Capitalized terms used in the Schedules and not otherwise defined therein have the meanings given to them in this Agreement.

 

10.02        Tax Matters.

 

(a)                   Income Tax Treatment. For all federal and analogous state income Tax purposes, the Parties intend for the Share Exchange to qualify as a Tax-free reorganization under Section 368(a)(1)(B) of the Code. The Parties shall report the Share Exchange for all United States income tax purposes consistent therewith, and shall not take any position inconsistent with this Section 8.02(a) in the course of any Tax audit, Tax review or Tax litigation matter relating hereto.

 

(b)                   Liability for Taxes.

 

(i)                  Seller shall indemnify, defend and hold harmless each of the Buyer Indemnitees from and against, and shall compensate and reimburse each of the Buyer Indemnitees for, any Damages that are directly or indirectly suffered or incurred at any time by any of the Buyer Indemnitees or to which any of the Buyer Indemnitees may otherwise directly or indirectly become subject

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at any time (regardless of whether or not such Damages relate to any third party claim) and that from or as a result of (A) Taxes imposed on the Company, or for which the Company may otherwise be liable, as a result of having been a member of a Company Group on or before the Closing Date and (B) Taxes imposed on the Company, or for which the Company may otherwise be liable, for any taxable year or period that ends on or before the Closing Date and, with respect to any Straddle Period, the portion of such Straddle Period ending on and including the Closing Date; provided, that indemnification under this Section 8.02(b)(i) shall not include any amounts resulting from any extraordinary transaction or event occurring on the Closing Date after the Closing.

 

(ii)                For purposes of Section 10.02(b)(i), whenever it is necessary to determine the liability for Taxes of the Company for a Straddle Period, the determination of the Taxes of the Company for the portion of the Straddle Period ending on and including the Closing Date shall be determined by assuming that the Straddle Period consisted of two taxable years or periods, one which ended at the close of the Closing Date and the other which began at the beginning of the day following the Closing Date and items of income, gain, deduction, loss or credit of the Company for the Straddle Period shall be allocated between such two taxable years or periods on a “closing of the books basis” by assuming that the books of the Company were closed at the close of the Closing Date; provided, however, that exemptions, allowances, deductions or Taxes that are calculated on an annual basis, such as ad valorem and other similar Taxes imposed on property (“Property Taxes”), franchise based solely on capital, and depreciation deductions, shall be apportioned between such two taxable years or periods on a daily basis. In determining whether a Property Tax is attributable to a Tax period ending on or before the Closing Date or a Straddle Tax Period (or portion thereof), any Property Tax shall be deemed a Property Tax attributable to the taxable period specified on the relevant Property Tax bill .

 

(c)                   Tax Returns.

 

(i)                  Seller shall timely file or cause to be timely filed when due (taking into account all extensions properly obtained) (x) all Tax Returns that are required to be filed by or with respect to the Company on a combined, consolidated or unitary basis with Seller and (y) all other Tax Returns that are required to be filed by or with respect to the Company on or prior to the Closing Date. In each case Seller shall remit or cause to be remitted any Taxes due in respect of such Tax Returns. Buyer shall timely file or cause to be timely filed when due (taking into account all extensions properly obtained) all other Tax Returns that are required to be filed by or with respect to the Company after the Closing Date and, subject to Section 10.02(b)(i) Buyer shall remit or cause to be remitted any Taxes due in respect of such Tax Returns.

 

(ii)                All Tax Returns that Seller is required to file or cause to be filed in accordance with this Section 10.02(c) shall be prepared and filed in a manner reasonably consistent with past practice and, on such Tax Returns, no position shall be taken, election made or method adopted that is inconsistent with material positions taken, elections made or methods used in preparing and filing similar Tax Returns in prior periods (including positions, elections or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions to periods ending on or before the Closing Date) unless otherwise required by applicable Law.

 

(d)                   Contest Provisions.

 

(i)                  Buyer shall notify Seller in writing upon receipt by Buyer, any of its Affiliates or, after the Closing Date, the Company, of notice of any pending or threatened federal, state, local or foreign Tax audits or assessments relating to any taxable period ending on or before the Closing Date or to any Straddle Period.

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(ii)                Buyer shall have the sole right to represent the Company’s interests in any Tax audit or administrative or court proceeding relating to a Tax liability for which Seller would be required to indemnify Buyer Indemnitees pursuant to Section 10.02(a) and that relates solely to a taxable year or period ending on or before the Closing Date, and to employ counsel of Seller’s choice at Seller’s expense; provided, however, that Seller and its representatives shall be permitted, at Buyer’s expense, to be present at, and participate in, any such audit or proceeding; provided, further, Buyer shall not compromise or settle such audit or proceeding without the Consent of Seller, which consent shall not be unreasonable withheld, conditioned or delayed.

 

(iii)             Nothing herein shall be construed to impose on Buyer any obligation to defend the Company in any Tax audit or administrative or court proceeding.

 

(e)                   Assistance and Cooperation. After the Closing Date, each of Seller and Buyer shall (and shall cause their respective Affiliates to):

 

(i)                  timely sign and deliver such certificates or forms as may be necessary or appropriate to establish an exemption from (or otherwise reduce), or file Tax Returns or other reports with respect to, Taxes described in Section 12.02 (relating to sales, transfer and similar Taxes);

 

(ii)                assist the other party in preparing any Tax Returns which such other party is responsible for preparing and filing in accordance with Section 10.02(c), and in connection therewith, provide the other party with any necessary powers of attorney;

 

(iii)             cooperate fully in preparing for and defending any audits of, or disputes with taxing authorities regarding, any Tax Returns of the Company;

 

(iv)              make available to the other and to any taxing authority as reasonably requested all information, records, and documents relating to Taxes of the Company; and

 

(v)                furnish the other with copies of all correspondence received from any taxing authority in connection with any Tax audit or information request with respect to any Taxes or Tax Returns of the Company; provided, that Buyer shall only be obligated to furnish copies of such correspondence to Seller to the extent such audit or information request relates to Taxes for which Seller may be liable under the terms of this Agreement.

 

(f)                    Termination of Tax Allocation Arrangements. Any Tax Sharing Arrangement entered into by Seller or any Affiliate of Seller, on the one hand, and the Company, on the other hand, shall be terminated as to the Company on or prior to the Closing, and after the Closing the Company shall not have any liability thereunder.

 

(g)                   Survival of Obligations. Notwithstanding anything to the contrary in this Agreement, the obligations of the parties set forth in this Section 10.02 shall survive until sixty (60) days after the expiration of all applicable statutes of limitation (taking into account extensions thereof).

 

10.03        Buyer Common Stock Matters. From the Closing Date until the 18-month anniversary thereof, Buyer shall (a) use its best efforts to continue the listing of the Buyer Common Stock on Nasdaq or a comparable exchange and comply in all respects with Buyer’s reporting, filing and other obligations under the rules of such exchange; (b) make and keep public information available, as those terms are understood and defined in Rule 144, at all times so long as Buyer remains subject to the periodic reporting requirements under Sections 13 or 15(d) of the Exchange Act, (c) timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by Buyer after the Closing

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Date pursuant to Section 13(a) or 15(d) of the Exchange Act, (d) furnish to Seller, so long as Seller owns any Buyer Common Stock, forthwith upon request a written statement by Buyer as to its compliance with its obligations under clause (c), and (e) take such further action as Seller may reasonably request from time to time to enable Seller to sell shares of Buyer Common Stock without registration under the Securities Act pursuant to Rule 144. Buyer shall instruct its legal counsel to provide a blanket opinion of counsel to Buyer’s transfer agent to permit the sale of the Buyer Common Stock, and shall cause such blanket opinion to be delivered to Buyer’s transfer agent no later than the date that is six months following the Closing Date. The provisions of this Section 10.03 shall inure to the benefit of, and be enforceable by, the successor holders, transferees or assignees of Buyer Common Stock originally issued to Seller pursuant to this Agreement.

 

ARTICLE XI 

DEFINITIONS

 

11.01        Definitions. For purposes hereof, the following terms when used herein will have the respective meanings set forth below:

 

“Affiliate” of any particular Person means any other Person controlling, controlled by, or under common control with, such particular Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, contract or otherwise.

 

“Business Day” means a day that is neither a Saturday or a Sunday nor any other day on which banking institutions in Denver, Colorado are authorized or obligated by Law to close.

 

“Buyer Disclosure Schedule” means a Schedule referencing the appropriate section or clause of this Agreement and delivered by Buyer to Seller on or prior to the date hereof.

 

“Buyer Indemnitees” means the following Persons: (a) Buyer; (b) Buyer’s current and future Affiliates; (c) the respective Representatives of the Persons referred to in clauses “(a)” and “(b)” above; and (d) the respective successors and assigns of the Persons referred to in clauses “(a),” “(b)” and “(c)” above; provided, however, that the Company shall not be deemed to be a “Buyer Indemnitee.”

 

“Buyer Material Adverse Effect” means any change, effect, event, occurrence, state of facts or development that, individually or in the aggregate, has had or would have a material adverse effect on the ability of Buyer to consummate the transactions contemplated hereby.

 

“Buyer Price” means $6.00 per share, which amount, following the Closing, shall be appropriately adjusted to proportionately reflect any split, combination, stock dividend or other stock distribution of the Buyer Common Stock.

 

“Buyer’s Knowledge” or any similar phrase, with respect to Buyer, means the actual knowledge of John Fowle.

 

“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act, and the rules and regulations promulgated thereunder.

 

“Closing Consideration” means the Share Consideration, as adjusted in accordance with Section

2.05(a).

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“Closing Working Capital” means: (a) the Current Assets of the Company, less (b) the Current Liabilities of the Company, determined as of immediately preceding Closing (without giving effect to the transactions contemplated hereby) based on the methodology and procedures used in preparation of the projected working capital calculation set forth on Annex 1.

 

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

 

“Company Employee Benefit Plan” means each “employee benefit plan” within the meaning of Section 3 of ERISA and all other retirement, welfare, equity and equity-based, severance, retention, employment, individual consulting, change-of-control, bonus, incentive, deferred compensation, pension, employee loan, fringe benefit, and other benefit or compensation plan, agreement, program, practice, arrangement, or policy, whether written or unwritten, sponsored, maintained, contributed to, or required to be contributed to, by the Company or its ERISA Affiliate for the benefit of any current or former officer, employee, director, consultant, other service provider, or beneficiary or dependent thereof, of the Company, to which the Company is a party or for which the Company has or could reasonably be expected to have any Liability.

 

“Company Group” means any group of entities filing Tax Returns on a combined, consolidated, unitary or similar basis that, at any time on or before the Closing Date, includes or has included the Company or any direct or indirect predecessor of the Company.

 

“Company Privacy Policy” means each external or internal privacy policy, as of the date hereof, of the Company, including any policy relating to: (a) the privacy of individuals in connection with any Company website or product of the Company; (b) the collection, storage, disclosure, and transfer of any Personal Data; and (c) any employee information.

 

“Contract” means any agreement, contract, arrangement, lease, loan agreement, security agreement, license, indenture or other similar instrument or obligation to which the party in question is a party.

 

“Current Assets” means accounts receivable, inventory and prepaid expenses, but excluding (i) the portion of any prepaid expense of which Buyer will not receive the benefit following the Closing, and (ii) receivables from any of the Company’s Affiliates, directors, managers, employees, officers or any of their respective Affiliates or Representatives, calculated using the accounting methods, practices, principles, policies and procedures that were used in the preparation of the Company Financial Statements.

 

“Current Liabilities” shall include accounts payable, accrued Taxes, accrued expenses and deferred revenue, but excluding payables to any of the Company’s Affiliates, managers, employees or officers, calculated using the accounting methods, practices, principles, policies and procedures that were used in the preparation of the Company Financial Statements.

 

“Damages” means any loss, damage, injury, decline in value, lost opportunity, Liability, claim, demand, settlement, judgment, award, fine, penalty, Tax, fee (including reasonable attorneys’ fees), charge, cost (including costs of investigation) or expense of any nature.

 

“Data Breach” means the unauthorized access, use, disclosure, acquisition, or modification of Personal Data or any other data security incident requiring notification to impacted persons or regulators under applicable Privacy Requirements.

 

“Data Protection Laws” means any and all applicable data protection and privacy laws in force from time to time in those parts of the world in which the Company is established, operates or processes

	39

Personal Data (either directly or via a third party), including the provisions of the following that set forth privacy or data security requirements that apply to Personal Data: the Federal Trade Commission Act, 15

U.S.C. § 45; the CAN-SPAM Act of 2003, 15 U.S.C. §§ 7701 et seq.; the Telephone Consumer Protection Act, 47 U.S.C. § 227; California Online Privacy Protection Act, Cal. Bus. & Prof. Code § 22575, et seq.; laws governing the privacy or security of health or medical information, including biometric information, including the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and HITECH implementing regulations, including the Standards for Privacy of Individually Identifiable Health Information, codified at 45 C.F.R. Parts 160 and 164, Subparts A and E (the “Privacy Rule”), the Security Standards for the Protection of Electronic Protected Health Information, codified at 45 C.F.R. Parts 160 and 164, Subpart A and C (the “Security Rule”), Notification in the Case of Breach of Unsecured Protected Health Information, codified at 45 C.F.R. Parts 160 and 164, Subpart D (the “Breach Notification Rule”), and the Standards for Electronic Transactions and Code Sets, codified at 45 C.F.R. Parts 160 and 162 (the “Electronic Transactions and Code Sets Rule”); laws governing notification to consumers, employees or other individuals and regulatory authorities following Data Breaches, including without limitation Cal. Civ. Code

§ 1798.82, N.Y. Gen. Bus. Law § 899-aa, and Mass. Gen. Law 93H; federal, state, and local laws governing data security, including without limitation Massachusetts Gen. Law Ch. 93H, 201 C.M.R. 17.00, and Nev. Rev. Stat. 603A; Cal Civ. Code § 1798.83; local, state, and federal, and privacy, data protection, information security, or related laws relating to the collection, processing, storage, disclosure, disposal, or other handling of Personal Data; international laws, including but not limited to the European Union’s Directive on Privacy and Electronic Communications (2002/58/EC), General Data Protection Regulation (2016/679), as implemented by countries in the European Economic Area and the UK.

 

“Earnout Shares” means the number of shares (rounded to the nearest whole share) of Buyer Common Stock with an aggregate value of up to $1,000,000 based on the Earnout Share Price.

 

“Earnout Share Price” means the volume weighted average closing trading price of the Buyer Common Stock on the Nasdaq for the last twenty (20) days prior to the issuance of the Earnout Shares.

 

“Encumbrance” means any lease, pledge, option, easement, deed of trust, right of way, encroachment, conditional sales agreement, security interest, mortgage, adverse claim, encumbrance, covenant, condition, restriction of record, title defect, charge or restriction of any kind (except for restrictions on transfer under the Securities Act and applicable state securities laws), including any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership, whether voluntarily incurred or arising by operation of Law, and includes any agreement to give any of the foregoing in the future.

 

“Environmental Claim” means any claim, action, Legal Proceeding, cause of action, investigation or written notice by any Person alleging potential liability (including, without limitation, potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, or penalties) arising out of, based on or resulting from (a) the actual or alleged presence, Release or threatened Release of any Hazardous Materials at any location, whether or not owned or operated by the Company, or (b) any actual or alleged violation of any Environmental Law.

 

“Environmental Laws” means all federal, state, local and foreign Legal Requirements (including common law) or Orders of any Governmental Entity relating to pollution or protection of human health and safety or the environment, including all those relating to the generation, handling, transportation, treatment, storage, disposal, distribution, labeling, discharge, Release, threatened Release, control, or cleanup of any Hazardous Materials.

	40

“Environmental Permit” means any permit, license, authorization, registration, exemption, exception, certification or other governmental consent required by or from a Governmental Entity under Environmental Laws.

 

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

 

“ERISA Affiliate” means any entity, trade or business treated as a single employer with the Company for purposes of Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(l) of ERISA.

 

“Escrow Agent” means Continental Stock Transfer & Trust Company.

 

“Escrow Agreement” means the escrow agreement between Buyer, Seller and the Escrow Agent, in substantially the form attached hereto as Exhibit A.

 

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

 

“Families First Act” means the Families First Coronavirus Response Act, and the rules and regulations promulgated thereunder.

 

“Former Real Property” means all real property formerly owned, leased or operated by the Company.

 

“Fraud” means a material false statement, representation or warranty made with actual intent to deceive, rather than with mere negligence or recklessness with respect to the truth or falsity of such statement, representation or warranty.

 

“Fundamental Representations” means the representations and warranties of the Company and Seller set forth in Section 3.01 (Organization and Good Standing; No Subsidiaries), Section 3.02(a) (Due Authorization), Section 3.03 (No Conflicts; Required Filings and Consents), Section 3.05(c) (Indebtedness), Section 3.07 (Taxes), Section 3.09 (Intellectual Property), Section 3.12 (Employee Benefit Plans), Section 3.15 (Environmental Matters), Section 3.19 (No Brokers), Section 3.20 (Title to Assets), Section 4.01 (Title to Company Shares), Section 4.02 (Organization and Good Standing), Section 4.03(a) (Due Authorization), Section 4.04 (No Conflicts; Required Filings and Consents) and Section 4.07 (No Brokers).

 

“GAAP” means the United States generally accepted accounting principles, at the time in effect, applied consistently with the Company’s historical practices.

 

“Governing Documents” means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs. For example, the “Governing Documents” of a corporation are its certificate of incorporation and by-laws, the “Governing Documents” of a limited partnership are its limited partnership agreement and certificate of limited partnership and the “Governing Documents” of a limited liability company are its operating agreement and certificate of formation.

 

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

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“Hazardous Materials” means (i) any chemical, constituent, material, pollutant, contaminant, substance or waste that is regulated by any Governmental Entity or for which liability or standards of care are imposed under any Environmental Law; (ii) petroleum or petroleum products; and (iii) radioactive materials, explosives, asbestos or asbestos containing materials, polychlorinated biphenyls, radon, and infectious or medical wastes.

 

“Indebtedness” means, as of any time of determination, without duplication, the aggregate consolidated indebtedness of the Company, including, without duplication, (i) any obligations under any indebtedness for borrowed money, (ii) any obligations evidenced by any note, bond, debenture or other debt security, (iii) any payment obligations in respect of banker’s acceptances or letters of credit or any other commitment by which a Person assures a financial institution against loss, (iv) any off-balance sheet financing, including synthetic leases and project financing, (v) all obligations under leases that have been, recorded as capital leases, (vi) any obligations with respect to interest rate swaps, collars, caps and similar hedging obligations (including any applicable breakage costs), (vii) in respect of “earn-out” obligations and all other obligations for the deferred and unpaid purchase price of property or services (other than trade payables and accrued expenses incurred in the ordinary course of business), (viii) any obligations referred to in the foregoing clauses (i) through (vii) of any Person which are either guaranteed or secured by any Encumbrance upon the Company or any of its assets or properties and (ix) accrued and unpaid or declared and unpaid interest of any such foregoing obligation and all premiums, penalties, charges, fees, expenses and other amounts that are or would be due (including with respect to early termination) in connection with the payment and satisfaction in full of such obligations. Notwithstanding the foregoing, “Indebtedness” does not include any intercompany obligations exclusively between or among the Company.

 

“Information Technology Systems" means all communications systems and computer systems used by the Company, including all hardware, software and websites (but excluding networks generally available to the public).

 

“Intellectual Property” means all intellectual property, regardless of form, including: (i) patents and patent applications, design patents or registrations, design applications, inventions and discoveries, including articles of manufacture, business methods, compositions of matter, improvements, machines, methods, and processes and new uses for any of the preceding items (“Patent Rights”); (ii) published and unpublished works of authorship, including audiovisual works, collective works, computer programs, Software, compilations, databases, derivative works, literary works, mask works, and sound recordings;

(iii)  words, names, symbols, devices, designs, and other designations, and combinations of the preceding items, used to identify or distinguish a business, good, group, product, or service or to indicate a form of certification, including logos, product designs, and product features (“Trademarks”); and (iv) confidential and proprietary information, and know-how, including confidential processes, algorithms, data, Software, schematics, databases, formulae, drawings, prototypes, models, designs, know-how, concepts, methods, devices, technology, research and development results and records, inventions, compositions, reports, data, mailing lists, business plans, and customer lists, in each case, to the extent protectable under applicable Law as a trade secret (“Trade Secrets”).

 

“Knowledge of the Company” means the actual knowledge of Grant Fraser and Chris Nielsen as of the date hereof, after reasonable inquiry of their direct reports.

 

“Law” means any foreign, federal, state or local statute, law, ordinance, regulation, rule, code, injunction, judgment, decree or order enacted, adopted, issued, promulgated or enforced by any Governmental Entity.

 

“Legal Proceeding” means any claim, action, audit, hearing, investigation, litigation, suit, arbitration or proceeding (whether civil, criminal, administrative, judicial or investigative, whether formal

	42

or informal, whether public or private) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Entity or arbitrator.

 

“Legal Requirement” means all applicable Laws, statutes, rules, regulations, codes, ordinances, agency guidance, Permits, bylaws, variances, judgments, injunctions, orders, conditions and licenses of a Governmental Entity having jurisdiction over the assets or the properties of any Party or the Company and the operations thereof.

 

“Lock-Up Agreement” means the Lock-Up Agreement between Buyer and Seller, in substantially the form attached hereto as Exhibit B.

 

“Material Adverse Effect” means any event, change, occurrence, fact, development or effect that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, condition (financial or otherwise) or results of operations of the Company, taken as a whole, other than any event, change, occurrence, fact, development or effect arising out of, attributable to or resulting from (i) general business or economic changes or developments in any of the industries in which the Company operate, (ii) changes in regional, national or international political conditions (including any outbreak or escalation of hostilities, any acts of war or terrorism or any other national or international calamity, crisis or emergency) or in general economic, business, regulatory, political or market conditions or in national or international financial markets, (iii) natural disasters or calamities or (iv) changes in any applicable Laws or applicable accounting regulations or principles or interpretations thereof; provided, that in the case of each of the clauses (i) through (iv) set forth above, only to the extent that any such event, change, occurrence, fact, development or effect has not had, and would not reasonably be expected to have, individually or in the aggregate, a disproportionate effect on the Company relative to other companies in the Company’ industry).

 

“Nasdaq” means The Nasdaq Stock Market.

 

“Open Source Software” means Software or other materials that are distributed as “free software” (as defined by the Free Software Foundation), “open source software” (meaning software distributed under any license approved by the Open Source Initiative as set forth at www.opensource.org) or under a similar licensing or distribution model.

 

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

 

“Ordinary Course of Business” means, with respect to any Person, actions that are consistent in all material respects with the past practices of such Person, taken in the ordinary course of the normal day- to-day operations of such Person, taking into account the effects of the COVID-19 pandemic.

 

“Permitted Liens” means (a) statutory liens for current Taxes or other governmental charges not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings by the Company and for which appropriate reserves have been established; and (b) mechanics’, carriers’, workers’, repairers’ and similar statutory liens arising or incurred in the Ordinary Course of Business for amounts that are not delinquent, unless being contested in good faith by appropriate proceedings and for which adequate accruals or reserves have been established.

 

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a Governmental Entity or any department, agency or political subdivision thereof.

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“Personal Data” means a natural person’s name, street address or specific geolocation information, date of birth, telephone number, e mail address, online contact information, photograph, biometric data, social security number, driver’s license number, passport number, tax identification number, any government-issued identification number, financial account number, credit card number, any information that would permit access to a financial account, a user name and password that would permit access to an online account, any persistent identifier such as customer number held in a cookie, an Internet Protocol address, a processor or device serial number, or a unique device identifier, any data that, if it were subject to a Data Breach, would require notification under Data Protection Laws, or any other piece of information that allows the identification of a natural person.

 

“Real Property Leases” means all leases, subleases, licenses, concessions and other Contracts applicable to the Leased Real Property, and any ancillary documents pertaining thereto, including, for example, amendments, modifications, supplements, exhibits, schedules, addenda and restatements thereto and thereof.

 

“Regulatory Approvals” means any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity.

 

“Related Party” means: (a) any (i) shareholder of Seller or any Affiliate of any such shareholder;

(b)  any employee, officer, director, stockholder, partner or member of any Person listed in clause (a) of this definition; (c) any spouse, sibling or descendant (including natural or adoptive descendants) of any individual listed in clauses (a) or (b) of this definition; and (d) any Affiliate of one or more of the Persons listed in clauses (a), (b) and (c) of this definition.

 

“Release” means any release, spill, emission, discharge, leak, pumping, injection, deposit, disposal, dispersal, leaching or migration into the environment (including, without limitation, ambient air, surface water, groundwater and surface or subsurface strata) or into or out of any property, including the movement of Hazardous Materials through or in the air, soil, surface water, groundwater or property.

 

“Representatives” means the officers, directors, managers, employees, attorneys, accountants, advisors, representatives, consultants and agents of a Person.

 

“Revenue” means, for the applicable calculation period, the net revenue of the Company and the Business, as conducted by Buyer after the Closing.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Software” means any and all (a) computer programs, including any and all software implementation of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, (b) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (c) descriptions, flow charts and other work products used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons, and (d) all documentation including user manuals and other training documentation relating to any of the foregoing.

 

“Standard Inbound IP Agreements” means (i) non-disclosure agreements granting to the Company a limited right to use a third party’s confidential information entered into by the Company in the ordinary course of its business, consistent with past practice, (ii) "shrink wrap" and similar generally

	44

available commercial end-user licenses to software that is not redistributed with the Company products (“Off-the Shelf Software”), (iii) employment agreements pursuant to which the Company obtains rights to Intellectual Property created in the scope of such employment for the Company, and (iv) agreements granting the Company a right to use the third party Trademarks in connection with the Group Company’s marketing or advertising of Company products or such third party’s products.

 

“Standard Outbound IP Agreements” means (i) non-disclosure agreements granting to a third party a limited right to use the Company’s confidential information entered into by the Company in the ordinary course of its business, consistent with past practice, and (ii) agreements granting a third party a right to use the Company’s Trademarks in connection with such third party’s marketing or advertising of Company products.

“Straddle Period” means any taxable period that includes (but does not end on) the Closing Date. “Subsidiary” means, with respect to any Person, any corporation of which a majority of the total

voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in

the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof, or any partnership, limited liability company, association or other business entity of which a majority of the partnership, limited liability company or other similar ownership interest is at the time owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person or a combination thereof. For purposes of this definition, a Person is deemed to have a majority ownership interest in a partnership, limited liability company, association or other business entity if such Person is allocated a majority of the gains or losses of such partnership, limited liability company, association or other business entity or is or controls the managing member or general partner or similar position of such partnership, limited liability company, association or other business entity.

 

“Target Working Capital” means $184,000.

 

“Tax” or “Taxes” means: (i) any federal, state, local or foreign net income, gross income, gross receipts, windfall profit, severance, property, production, sales, use, license, excise, franchise, employment, payroll, withholding on amounts paid to or by any Person, alternative or add-on minimum, ad valorem, value-added, transfer, stamp, or environmental tax (including taxes under Code Section 59A), escheat payments or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty, addition to tax or additional amount imposed by any Governmental Entity and (ii) any liability for the payment of amounts determined by reference to amounts described in clause (i) as a result of being or having been a member of any group of corporations that files, will file, or has filed Tax Returns on a combined, consolidated, unitary or similar basis, as a result of any obligation under any agreement or arrangement (including any Tax Sharing Arrangement), as a result of being a transferee or successor, or by contract or otherwise.

 

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

 

“Tax Sharing Arrangement” means any written or unwritten agreement or arrangement providing for the allocation or payment of Tax liabilities or for Tax benefits between or among members of any group of corporations that files, will file, or has filed Tax Returns on a combined, consolidated or unitary basis.

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“Transaction Documents” means, collectively, this Agreement, the Escrow Agreement, the Lock- Up Agreement, the Transition Services Agreement and all of the certificates, instruments and agreements required to be delivered by any of the Parties at the Closing.

 

“Transition Services Agreement” means the Transition Services Agreement between Buyer and Seller, in substantially the form attached hereto as Exhibit C.

 

11.02        Other Definitional Provisions.

 

(a)                   Accounting Terms. Accounting terms that are not otherwise defined in this Agreement have the meanings given to them under GAAP. To the extent that the definition of an accounting term defined in this Agreement is inconsistent with the meaning of such term under GAAP, the definition set forth in this Agreement will control.

 

(b)                   Successor Laws. Any reference to any particular Code section or Law will be interpreted to include any revision of or successor to that section regardless of how it is numbered or classified.

 

ARTICLE XII 

MISCELLANEOUS

 

12.01        Press Releases and Public Announcements. No Party will issue any press release or make any similar public announcement relating to the subject matter of this Agreement without the prior written approval of Buyer and Seller; provided, however, that any Party may (a) make any public disclosure it believes in good faith is required by applicable Law or the rules of a securities exchange upon which a Party’s securities are traded (in which case the disclosing Party will use its commercially reasonable efforts to advise the other Parties in writing prior to making the disclosure), or (b) issue press releases, make public announcements and communicate with investors, employees, customers and suppliers without the consent or participation of the other party, provided that no party shall make any disclosure of the Share Consideration or other financial terms contained in this Agreement or the Transaction Documents without the prior written approval of Buyer or Seller, as applicable, except in connection with fund raising, marketing, information or reporting activities of the kind customarily provided with respect to investments of this kind.

 

12.02        Transfer Taxes. All transfer Taxes, recording fees and other similar Taxes that are imposed on any of the Parties hereto by any Governmental Entity incurred in connection with the consummation of the transactions contemplated by this Agreement, shall be paid by 50% by Seller and 50% by Buyer.

 

12.03        Expenses. Each party shall pay its own fees and expenses arising in connection with this Agreement, including, but not limited to, attorneys’ fees, accountants’ fees, and fees of investment bankers, brokers lenders or other representatives and consultants.

 

12.04        Notices. Unless otherwise provided herein, all notices, requests, demands, claims, consents, approvals and other communications hereunder will be in writing. Any notice, request, demand, claim, consent, approval or other communication hereunder will be deemed duly given (a) when delivered personally to the recipient, (b) one Business Day after being sent to the recipient by reputable overnight courier service (charges prepaid), or (c) three Business Days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and addressed to the intended recipient as set forth below:

 

Notices to Buyer:

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Akerna Corp.

1630 Welton St., 4th Floor Denver, Colorado

Attn: Scott Sozio

Email: scott.sozio@akerna.com

with a copy to (which will not constitute notice): Dorsey & Whitney LLP

Attention: David Mangum 1400 Wewatta Street, Suite 400

Denver, Colorado 80202 mangum.david@dorsey.com

 

Notices to Seller:

 

Navigator Acquisition Corp. c/o Alerion Capital Group, LLC

7702 East Doubletree Ranch Road, Suite 350 Scottsdale, AZ 85258

Attn: Ricardo DeAvila

Email: rickdeavila@alerion.com

 

with a copy to (which will not constitute notice):

 

Ballard Spahr LLP

1 East Washington Street Suite 2300

Phoenix, AZ 85004-2555 Attn: Karen McConnell

Email: McConnellK@ballardspahr.com

 

Any Party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

 

12.05        Succession and Assignment. This Agreement will inure to the benefit of, and be binding upon, the successors and assigns of the Parties. Neither this Agreement nor any of the rights, interests or obligations hereunder will be assignable by Buyer or Seller; provided, however, that Buyer may assign its rights under this Agreement in whole or in part and/or charge the benefit of this Agreement to an Affiliate of Buyer, provided that in the event such assignee or chargee is ceases to be an Affiliate of Buyer, such assignee or chargee shall prior to such cessation reassign the assigned or charged rights or benefits to an Affiliate of Buyer; and provided, further, that Seller may assign any shares of Buyer Common Stock issued pursuant to this Agreement, including Earnout Shares, to its owners or Affiliates, so long as such owners or Affiliates agree to be bound by the terms of this Agreement and the Lock-Up Agreement.

 

12.06        Severability. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement

	47

shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

 

12.07        References. The table of contents and the section and other headings and subheadings contained in this Agreement and the exhibits hereto are solely for the purpose of reference, are not part of the agreement of the Parties, and will not in any way affect the meaning or interpretation of this Agreement or any exhibit hereto. All references to days (excluding Business Days) or months will be deemed references to calendar days or months. All references to “$” will be deemed references to United States dollars. Unless the context otherwise requires, any reference to a “Section,” “Exhibit,” “Disclosure Schedule” or “Schedule” will be deemed to refer to a section of this Agreement, an exhibit to this Agreement or a schedule to this Agreement, as applicable. The words “hereof,” “herein” and “hereunder” and words of similar import referring to this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “including” or any variation thereof means “including, without limitation” and will not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it. Any reference to any federal, state, local or foreign statute or law will be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. All terms defined in this Agreement will have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term.

 

12.08        Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

 

12.09        Amendment and Waiver. Any provision of this Agreement or the Disclosure Schedules hereto may be amended or waived only in a writing signed (a) in the case of any amendment, by Buyer and Seller and (b) in the case of a waiver, by the Party or Parties waiving rights hereunder. No waiver of any provision hereunder or any breach or default thereof will extend to or affect in any way any other provision or prior or subsequent breach or default.

 

12.10        Entire Agreement. This Agreement and the Transaction Documents constitute the entire agreement among the Parties and supersedes any prior understandings, agreements or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof. The exhibits and schedules identified in this Agreement are incorporated herein by reference and made a part hereof as if set forth in full herein.

 

12.11        Parties in Interest. Other than with respect to indemnification matters, this Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

12.12        Delivery by Facsimile or Email. This Agreement and any signed agreement entered into in connection herewith or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or scanned pages via electronic mail, will be treated in all manner and respect as an original contract and will be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person.

	48

12.13        Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original, but all of which will constitute one agreement. Execution and delivery of this Agreement by exchange of electronically transmitted counterparts bearing the signature of a Party will be equally as effective as delivery of a manually executed counterpart of such Party.

 

12.14        Governing Law. All issues and questions concerning the construction, validity, interpretation and enforceability of this Agreement and the exhibits and schedules hereto will be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to any choice of Law or conflict of Law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Delaware.

 

12.15        Jurisdiction. Any Legal Proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby will be brought and determined exclusively in the Delaware Court of Chancery of the State of Delaware; provided that if the Delaware Court of Chancery does not have jurisdiction, any such Legal Proceeding will be brought exclusively in the United States District Court for the District of Delaware or any other court of the State of Delaware, and each of the Parties hereby consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such Legal Proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or hereafter have to the laying of the venue of any such Legal Proceeding in any such court or that any such Legal Proceeding that is brought in any such court has been brought in an inconvenient forum. Process in any such Legal Proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each Party agrees that service of process on such Party as provided in Section 12.04 will be deemed effective service of process on such Party.

 

12.16        Specific Performance. Each Party agrees that irreparable damage would occur and that the Parties would not have any adequate remedy at Law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, in addition to any other remedies available under this Agreement, the Parties agree that, prior to the termination of this Agreement, each Party will be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent the other Party’s breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement (including the Party’s obligation to consummate the transactions contemplated by this Agreement if required to do so hereunder). Each Party agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief when expressly available pursuant to the terms of this Agreement, and hereby waives (i) any defenses in any Legal Proceeding for an injunction, specific performance or other equitable relief, including the defense that the other Parties have an adequate remedy at Law or an award of specific performance is not an appropriate remedy for any reason at Law or equity and (ii) any requirement under Law to post a bond, undertaking or other security as a prerequisite to obtaining equitable relief.

 

*   *   *  *  *

	49

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

 

	
	BUYER

	
	Akerna Corp.
	
	
	

	
	By:	/s/ Jessica Billingsley
	
	Its:	Chief Executive Officer

	
	SELLER

	
	Navigator Acquisition Corp.
	
	
	

	
	By:	/s/ James A. Unruh
	
	Its:	President

	
	THE COMPANY

	
	Viridian Sciences, Inc.
	
	
	

	
	By:	/s/ James A. Unruh
	
	Its:	Vice President

 

[Signature Page to Agreement and Plan of Reorganiztion]

	

 

Exhibit A 

Escrow Agreement

 

See attached.

 

	

ESCROW AGREEMENT

 

THIS ESCROW AGREEMENT (“Agreement”) is made and entered into as of [●], 2021, by and among: Akerna Corp., a Delaware corporation (“Buyer”); Navigator Acquisition Corp., a Delaware corporation (“Seller”); and Continental Stock Transfer & Trust Company, a New York corporation (the “Escrow Agent”).

 

RECITALS

 

WHEREAS, Buyer, Seller and Viridian Sciences, Inc., a Delaware corporation (the “Company”), are party to that certain Agreement and Plan of Reorganization, dated March 10, 2021 (the “Agreement and Plan of Reorganization”), pursuant to which, among other things, Buyer will acquire all of the issued and outstanding stock of the Company in exchange for shares of Buyer’s common stock. A copy of the Agreement and Plan of Reorganization is attached hereto as Exhibit A; and

 

WHEREAS, the Agreement and Plan of Reorganization contemplates the establishment of an escrow fund to secure certain rights of Buyer to indemnification, compensation and reimbursement as provided in Article VIII of the Agreement and Plan of Reorganization.

 

AGREEMENT

 

The parties, intending to be legally bound, agree as follows:

 

Section 1. Defined Terms.

 

Capitalized terms used and not defined in this Agreement shall have the meanings given to them in the Agreement and Plan of Reorganization.

 

Section 2. Escrow and Indemnification.

 

2.1              Shares Placed in Escrow. At Closing, in accordance with the Agreement and Plan of Reorganization, Buyer shall issue a certificate for the Escrow Amount registered in the name of Seller evidencing the shares of Buyer Common Stock to be held in escrow under this Agreement, which shall be an amount equal to $600,000, based on the Buyer Price, and shall cause such certificate to be delivered to the Escrow Agent.

 

2.2              Escrow Funds. The Escrow Amount being held in escrow pursuant to this Agreement shall collectively constitute an escrow fund (the “Escrow Fund”) securing the indemnification, compensation and reimbursement rights of Buyer and the other Buyer Indemnitees under the Agreement and Plan of Reorganization. The Escrow Agent agrees to accept delivery of the Escrow Funds and hold them in an account (the “Escrow Account”), subject to the terms and conditions of this Agreement and the Agreement and Plan of Reorganization.

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2.3              Voting of Escrow Shares. The record owner of the Escrow Amount shall be entitled to exercise all voting rights with respect to such shares comprising the Escrow Amount. The Escrow Agent is not obligated to distribute to Seller any proxy materials and other documents relating to the Escrow Amount received by the Escrow Agent from Buyer.

 

2.4              Investments. The Escrow Agent shall not invest the Escrow Amount.

 

2.5              Interest, Etc. Buyer and Seller agree that any interest accruing on or income otherwise earned (including any ordinary cash dividends paid in respect to the Escrow Amount) on any investment of any funds in the Escrow Account shall be held by the Escrow Agent in the Escrow Account. The aggregate amount of all interest and other income earned on any investment of any funds in the Escrow Account shall be distributed by the Escrow Agent as set forth in Section 3.

 

2.6              Dividends, Etc.  Buyer and Seller agree that any shares of Buyer Common Stock or other property (including ordinary cash dividends) distributable or issuable (whether by way of dividend, stock split or otherwise) in respect of or in exchange for shares comprising the Escrow Amount (including pursuant to or as a part of a merger, consolidation, acquisition of property or stock, reorganization or liquidation involving Buyer) shall not be distributed or issued to Seller, but rather shall be distributed or issued to and held by the Escrow Agent in the Escrow Account as part of the Escrow Fund. Any securities or other property received by the Escrow Agent in respect of any Escrow Amount held in escrow as a result of any stock split or combination of shares of Buyer Common Stock, payment of a stock dividend or other stock distribution in or on shares of Buyer Common Stock, or change of Buyer Common Stock into any other securities pursuant to or as a part of a merger, consolidation, acquisition of property or stock, reorganization or liquidation involving Buyer, or otherwise, shall be held by the Escrow Agent as part of the Escrow Fund.

 

2.7              Transferability.  Except as provided for herein or by operation of law, and except for assignments or transfers to the owners or Affiliates of Seller, the rights of Seller in the Escrow Fund shall not be assignable or transferable.

 

2.8              Trust Fund. The Escrow Fund shall be held as trust funds and shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of Seller or Buyer, respectively, or of any party hereto. The Escrow Agent shall hold and safeguard the Escrow Fund until the Termination Date (as defined in Section 6) or earlier distribution in accordance with this Agreement.

 

Section 3. Release of Escrow Amount.

 

3.1              General. Within 5 Business Days after receiving either (a) joint written instructions from Buyer and Seller (“Joint Instructions”), (b) a decision and/or award from the Arbitrator (an “Arbitration Award”) or (c) an order issued by a court of competent jurisdiction (a “Court Order”) relating to the release of any shares comprising the Escrow Amount from the Escrow Fund, the Escrow Agent shall release or cause to be released any such shares comprising the Escrow Amount and any other amounts from the Escrow Fund in the amounts, to the Persons

	2

and in the manner set forth in such Joint Instructions, Arbitration Award or Court Order. Unless otherwise specified in Joint Instructions, the number of shares released from the Escrow Fund at any time shall be based on the Buyer Price.

 

3.2              Release of Escrow Amount. Within 5 Business Days following the date that is 12 months after the date hereof (the “Escrow Release Date”), if there are no Claims against the Escrow Fund that have not been finally resolved and paid, the Escrow Agent shall deliver to Seller the balance of shares of Buyer Common Stock and other property held in the Escrow Account at such time that are not subject any Claims against the Escrow Fund that have not been finally resolved and paid at such time. The number of shares, if any, retained in the Escrow Fund related to unresolved Claims shall be based on the Buyer Price.

 

3.3              Disputes. All disputes, claims, or controversies arising out of or relating to Section 3 of this Agreement that are not resolved by mutual agreement between Buyer and Seller shall be resolved solely and exclusively as set forth in Section 12.15 of the Agreement and Plan of Reorganization.

 

Section 4. Fees and Expenses.

 

The Escrow Agent shall be entitled to receive, from time to time, fees in accordance with Schedule 1. In accordance with Schedule 1, the Escrow Agent will also be entitled to reimbursement for reasonable and documented out-of-pocket expenses incurred by the Escrow Agent in the performance of its duties hereunder and the execution and delivery of this Agreement. All such fees and expenses shall be paid by Buyer.

 

Section 5. Limitation of Escrow Agent’s Liability.

 

5.1              The Escrow Agent undertakes to perform such duties as are specifically set forth in this Agreement only and shall have no duty under any other agreement or document, and no implied covenants or obligations shall be read into this Agreement against the Escrow Agent. The Escrow Agent shall incur no liability with respect to any action taken by it or for any inaction on its part in reliance upon any notice, direction, instruction, consent, statement or other document believed by it in good faith to be genuine and duly authorized, nor for any other action or inaction except for its own negligence or willful misconduct. In all questions arising under this Agreement, the Escrow Agent may rely on the advice of counsel, and for anything done, omitted or suffered in good faith by the Escrow Agent based upon such advice the Escrow Agent shall not be liable to anyone.  In no event shall the Escrow Agent be liable for incidental, punitive or consequential damages.

 

5.2              Buyer and Seller hereby agree to indemnify the Escrow Agent and its officers, directors, employees and agents for, and hold it and them harmless against, any loss, liability or expense incurred without negligence or willful misconduct on the part of Escrow Agent, arising out of or in connection with the Escrow Agent’s carrying out its duties hereunder. This right of indemnification shall survive the termination of this Agreement and the resignation of the Escrow Agent. 

	3

Section 6. Termination.

 

This Agreement shall terminate upon the release by the Escrow Agent of the final amounts held in the Escrow Fund in accordance with Section 3 (the date of such release being referred to as the “Termination Date”).

 

Section 7. Successor Escrow Agent.

 

In the event the Escrow Agent becomes unavailable or unwilling to continue as escrow agent under this Agreement, the Escrow Agent may resign and be discharged from its duties and obligations hereunder by giving its written resignation to the parties to this Agreement. Such resignation shall take effect not less than 30 days after it is given to all the other parties hereto. In such event, Buyer may appoint a successor Escrow Agent (acceptable to Seller, acting reasonably). If Buyer fails to appoint a successor Escrow Agent within 15 days after receiving the Escrow Agent’s written resignation, the Escrow Agent shall have the right to apply to a court of competent jurisdiction for the appointment of a successor Escrow Agent. The successor Escrow Agent shall execute and deliver to the Escrow Agent an instrument accepting such appointment, and the successor Escrow Agent shall, without further acts, be vested with all the estates, property rights, powers and duties of the predecessor Escrow Agent as if originally named as Escrow Agent herein. The Escrow Agent shall act in accordance with written instructions from Buyer and Seller as to the transfer of the Escrow Funds to a successor Escrow Agent.

 

Section 8. Miscellaneous.

 

8.1              Notices. Any notice or other communication required or permitted to be delivered to any party under this Agreement shall be in writing and shall be deemed properly delivered, given and received when delivered (by hand, by registered mail, by courier or express delivery service or by facsimile) to the address or facsimile telephone number set forth beneath the name of such party below (or to such other address or facsimile telephone number as such party shall have specified in a written notice given to the other parties hereto):

 

if to Buyer:

 

Akerna Corp.

1630 Welton St., 4th Floor Denver, Colorado

Attn: Scott Sozio

Email: scott.sozio@akerna.com

with a copy to (which will not constitute notice): Dorsey & Whitney LLP

Attention: David Mangum 1400 Wewatta Street, Suite 400

Denver, Colorado 80202

	4

mangum.david@dorsey.com

 

if to Seller:

 

Navigator Acquisition Corp. c/o Alerion Capital Group, LLC

7702 East Doubletree Ranch Road, Suite 350 Scottsdale, AZ 85258

Attn: Ricardo DeAvila

Email: rickdeavila@alerion.com

 

with a copy to (which will not constitute notice): Ballard Spahr LLP

1 East Washington Street Suite 2300

Phoenix, AZ 85004-2555 Attn: Karen McConnell

Email: McConnellK@ballardspahr.com

 

if to the Escrow Agent:

 

Continental Stock Transfer & Trust Company 1 State Street, 30th Floor

New York, NY 10004

	
	Attention	
	
	

	
	Facsimile:	
	
	

 

Notwithstanding the foregoing, notices addressed to the Escrow Agent shall be effective only upon receipt. If any notice or other document is required to be delivered to the Escrow Agent and any other Person, the Escrow Agent may assume without inquiry that notice or other document was received by such other Person on the date on which it was received by the Escrow Agent.

 

8.2              Headings. The bold-faced headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

 

8.3              Counterparts and Exchanges by Facsimile or Other Electronic Transmission. This Agreement may be executed in several counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one agreement. The exchange of a fully executed Agreement (in counterparts or otherwise) by facsimile or other means of electronic transmission shall be sufficient to bind the parties to the terms and conditions of this Agreement.

 

8.4              Applicable Law; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that

	5

might otherwise govern under applicable principles of conflicts of laws thereof. Subject to Section 3.3 of this Agreement, in any action between the parties arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement: (a) each of the parties irrevocably and unconditionally consents and submits to the non-exclusive jurisdiction and venue of the state and federal courts located in the State of New York; (b) if any such action is commenced in a state court, then, subject to applicable law, no party shall object to the removal of such action to any federal court located in the State of New York; and (c) each of the parties irrevocably waives the right to trial by jury.

 

8.5              Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of each of the parties hereto and each of their respective permitted successors and assigns, if any. .

 

8.6              Waiver. No failure on the part of any Person to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any Person in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. No Person shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such Person; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.

 

8.7              Amendment. This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument duly executed and delivered on behalf of Buyer, Seller and the Escrow Agent.

 

8.8              Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the parties hereto agree that the court making such determination shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified. In the event such court does not exercise the power granted to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.

 

8.9              Parties in Interest. Except as expressly provided herein, none of the provisions of this Agreement, express or implied, is intended to provide any rights or remedies to any Person other than the parties hereto and their respective successors and assigns, if any.

	6

8.10          Entire Agreement. This Agreement and the Agreement and Plan of Reorganization set forth the entire understanding of the parties hereto relating to the subject matter hereof and supersede all prior agreements and understandings among or between any of the parties relating to the subject matter hereof.

 

8.11          Waiver of Jury Trial. Each of the parties hereto hereby irrevocably waives any and all right to trial by jury in any action arising out of or related to this Agreement or the transactions contemplated hereby.

 

8.12          Tax Reporting Information. Buyer agrees to provide the Escrow Agent with a certified tax identification number for Buyer and Seller agrees to provide the Escrow Agent with a certified tax identification number for Seller by furnishing appropriate form W-9 (and any other forms and documents that the Escrow Agent may reasonably request (collectively, “Tax Reporting Documentation”) to the Escrow Agent within 30 days after the date hereof. The parties hereto understand that, if such Tax Reporting Documentation is not so furnished to the Escrow Agent, the Escrow Agent shall be required by the Code to withhold a portion of any interest or other income earned on the investment of monies held by the Escrow Agent pursuant to this Agreement, and to immediately remit such withholding to the Internal Revenue Service.

 

8.13          Cooperation. Buyer and Seller agree to cooperate fully with each other and the Escrow Agent and to execute and deliver such further documents, certificates, agreements, stock powers and instruments and to take such other actions as may be reasonably requested by Buyer, Seller or the Escrow Agent to evidence or reflect the transactions contemplated by this Agreement and to carry out the intent and purposes of this Agreement.

 

8.14          Construction.

 

(a)               For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neutral genders; the feminine gender shall include the masculine and neutral genders; and the neutral gender shall include masculine and feminine genders.

 

(b)               The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.

 

(c)                As used in this Agreement, the words “include” and “including,” and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words “without limitation.”

 

(d)               Except as otherwise indicated, all references in this Agreement to “Sections”, “Schedules” and “Exhibits” are intended to refer to Sections of this Agreement, Schedules to this Agreement and Exhibits to this Agreement.

 

[Remainder of page intentionally left blank]

	7

IN WITNESS WHEREOF, the parties have duly caused this Agreement to be executed as of the day and year first above written.

	
	AKERNA CORP., a Delaware corporation

	
	
	

	
	By:	/s/ Jessica Billingsley
	
	Name:	Jessica Billingsley
	
	Title:	Chief Executive Officer

	
	NAVIGATOR ACQUISITION CORP., a Delaware corporation 

	
	
	

	
	By:	

	
	Name:	

	
	Title:	

	
	CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York corporation

	
	
	

	
	By:	

	
	Name:	

	
	Title:	

 

 

 

 

 

[Escrow Agreement Signature Page]

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