Document:

Exhibit 10.4

 

EXECUTION VERSION

 

SERVICING AGREEMENT

 

among

 

CONN’S RECEIVABLES FUNDING 2018-A,
LLC,

AS ISSUER,

 

CONN’S RECEIVABLES 2018-A TRUST,

AS RECEIVABLES TRUST,

 

CONN APPLIANCES, INC.,

AS SERVICER,

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

AS TRUSTEE

 

 

 

DATED AS OF AUGUST 15, 2018

 

     

     

    

 

TABLE OF CONTENTS

 

	 	 	Page
	ARTICLE I	DEFINITIONS	 
	 	 	 	 
	Section 1.01	 	Defined Terms	1
	 	 	 	 
	Section 1.02	 	Definitions	4
	 	 	 	 
	Section 1.03	 	Other Definitional Provisions	5
	 	 	 	 
	ARTICLE II	ADMINISTRATION AND SERVICING OF RECEIVABLES AND RELATED SECURITY	 
	 	 	 	 
	Section 2.01	 	Appointment of Servicer	5
	 	 	 	 
	Section 2.02	 	Duties of Servicer	7
	 	 	 	 
	Section 2.03	 	Purchase of Ineligible Receivables	13
	 	 	 	 
	Section 2.04	 	Purchase of Returned and Refinanced Receivables	13
	 	 	 	 
	Section 2.05	 	Rights After Designation of New Servicer	14
	 	 	 	 
	Section 2.06	 	Servicer Default	17
	 	 	 	 
	Section 2.07	 	Servicer Indemnification of Indemnified Parties	18
	 	 	 	 
	Section 2.08	 	Grant of License	19
	 	 	 	 
	Section 2.09	 	Servicing Compensation	19
	 	 	 	 
	Section 2.10	 	Representations and Warranties of the Servicer	20
	 	 	 	 
	Section 2.11	 	Reports and Records for the Trustee	22
	 	 	 	 
	Section 2.12	 	Reports to the Commission	22
	 	 	 	 
	Section 2.13	 	Affirmative Covenants of the Servicer	23
	 	 	 	 
	Section 2.14	 	Negative Covenants of the Servicer	24
	 	 	 	 
	Section 2.15	 	Sale of Defaulted Receivables	25
	 	 	 	 
	Section 2.16	 	Deemed Collections	26
	 	 	 	 
	ARTICLE III	RIGHTS OF NOTEHOLDERS AND ALLOCATION AND APPLICATION OF COLLECTIONS	 
	 	 	 	 
	Section 3.01	 	Establishment of Accounts	26
	 	 	 	 
	Section 3.02	 	Collections and Allocations	27
	 	 	 	 
	ARTICLE IV	OTHER SERVICER POWERS	 
	 	 	 	 
	Section 4.01	 	Appointment of Paying Agent	27
	 	 	 	 
	Section 4.02	 	[Reserved.]	27
	 	 	 	 
	ARTICLE V	OTHER MATTERS RELATING TO THE SERVICER	 
	 	 	 	 
	Section 5.01	 	Liability of the Servicer	27
	 	 	 	 
	Section 5.02	 	Limitation on Liability of the Servicer and Others	28
	 	 	 	 
	Section 5.03	 	Servicer Not to Resign	28
	 	 	 	 
	Section 5.04	 	Waiver of Defaults	28

 

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TABLE OF CONTENTS

 

	 	 	 	Page
	ARTICLE VI	ADDITIONAL OBLIGATION OF THE SERVICER WITH RESPECT TO THE TRUSTEE	 
	 	 	 	 
	Section 6.01	 	Successor Trustee	28
	 	 	 	 
	Section 6.02	 	Tax Returns	29
	 	 	 	 
	Section 6.03	 	Final Payment with Respect to Any Series	29
	 	 	 	 
	Section 6.04	 	Optional Purchase of Receivables Trust Estate	29
	 	 	 	 
	ARTICLE VII	MISCELLANEOUS PROVISIONS	 
	 	 	 	 
	Section 7.01	 	Amendment	30
	 	 	 	 
	Section 7.02	 	Protection of Right, Title and Interest to Receivables and Related Security	31
	 	 	 	 
	Section 7.03	 	Governing Law	32
	 	 	 	 
	Section 7.04	 	Notices	32
	 	 	 	 
	Section 7.05	 	Severability of Provisions	33
	 	 	 	 
	Section 7.06	 	Delegation	33
	 	 	 	 
	Section 7.07	 	Waiver of Trial by Jury	33
	 	 	 	 
	Section 7.08	 	Further Assurances	33
	 	 	 	 
	Section 7.09	 	No Waiver; Cumulative Remedies	33
	 	 	 	 
	Section 7.10	 	Counterparts	33
	 	 	 	 
	Section 7.11	 	Third-Party Beneficiaries	33
	 	 	 	 
	Section 7.12	 	Actions by Noteholders	34
	 	 	 	 
	Section 7.13	 	Rule 144A Information	34
	 	 	 	 
	Section 7.14	 	Merger and Integration	34
	 	 	 	 
	Section 7.15	 	Headings	34
	 	 	 	 
	Section 7.16	 	Rights of the Trustee	34
	 	 	 	 
	Section 7.17	 	Sales Tax Proceeds	34
	 	 	 	 
	Section 7.18	 	Limitation of Liability	35
	 	 	 	 
	EXHIBITS	 	 	 
	 	 	 	 
	Exhibit A	Form of Monthly Servicer Report	 
	Exhibit B	Form of Annual Servicer’s Certificate	 
	 	 	 	 
	SCHEDULES	 	 	 
	 	 	 	 
	Schedule 2.10(i)	Litigation	 

 

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SERVICING AGREEMENT dated
as of August 15, 2018 (the “Agreement”) by and among CONN’S RECEIVABLES FUNDING 2018-A, LLC, a
Delaware limited liability company, as issuer (the “Issuer”), CONN’S RECEIVABLES 2018-A TRUST,
a Delaware statutory trust, as receivables trust (the “Receivables Trust”), CONN APPLIANCES, INC., a
Texas corporation (“Conn Appliances”), as initial Servicer, and WELLS FARGO BANK, NATIONAL ASSOCIATION,
a national banking association, as trustee under the Indenture (defined below) (in such capacity, together with its successors
and assigns in such capacity, the “Trustee”).

 

WHEREAS, the Receivables
Trust has purchased from Conn Appliances Receivables Funding, LLC (the “Depositor”), and the Depositor purchased
from Conn Credit I, LP Contracts, Receivables and other Related Security relating to such Receivables pursuant to the terms of
and subject to the conditions set forth in the Second Receivables Purchase Agreement, dated as of August 15, 2018 between the Depositor
and the Receivables Trust;

 

WHEREAS, the Issuer is
entering into a Base Indenture and a supplement thereto, each dated as of August 15, 2018 (the Base Indenture, as amended, supplemented
or otherwise modified from time to time, the “Indenture”), between the Issuer and the Trustee, and each of the
other Transaction Documents to which it is a party, pursuant to which the Issuer plans to issue Notes in order to finance its purchase
of the Receivables Trust Certificate, which represents the ownership of the Receivables Trust, which owns the Contracts, Receivables
and other Related Security relating to such Receivables;

 

WHEREAS, the Servicer
is willing to service all Receivables and other Related Security acquired by the Receivables Trust, pursuant to the terms and subject
to the conditions set forth in this Agreement;

 

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

 

ARTICLE
I

 

DEFINITIONS

 

Section 1.01         Defined
Terms. As used in this Agreement, the following terms have the following meanings:

 

“Back-Up
Servicer” means Systems & Services Technologies, Inc., together with its permitted successors and assigns, in such
capacity.

 

“Back-Up
Servicing Agreement” is defined in Section 2.01(b).

 

“Conn
Appliances” is defined in the preamble.

 

“Consolidated
Net Worth” means at any date, with respect to any Person, the consolidated stockholders’ equity of such Person
and its consolidated Subsidiaries, minus (to the extent reflected in determining such consolidated stockholders’ equity)
all intangible assets (in each case, as determined in accordance with GAAP, applied on a basis consistent with the most recent
audited financial statements of such Person before the Closing Date).

 

     

     

    

 

“Custodian”
is defined in Section 2.02(a)(ii).

 

“Depositor”
is defined in the first recital.

 

“Field
Collections” is defined in Section 2.02(c).

 

“Indenture”
is defined in the second recital.

 

“In-Store
Payments” is defined in Section 2.02(c).

 

“Issuer”
is defined in the preamble.

 

“Issuer
Indemnified Parties” is defined in Section 2.07.

 

“Mail
Payments” is defined in Section 2.02(c).

 

“Optional
Purchase” is defined in Section 6.04.

 

“Optional
Purchase Price” means an amount equal to the fair market value of the Receivables on the date on which the Optional Purchase
will occur, provided, however, that the Optional Purchase Price shall not be less than the accrued and unpaid interest, if applicable,
then due on the Series 2018-A Notes and the aggregate unpaid principal, if any, of all of the outstanding Series 2018-A Notes plus
an amount sufficient to pay (A) the Servicing Fee (including to any successor servicer) for such Payment Date and all unpaid Servicing
Fees with respect to prior Payment Dates and (B) the Trustee, Receivables Trust Trustee, Back-Up Servicer and Issuer Fees and Expenses
for such Payment Date and all unpaid Trustee, Receivables Trust Trustee, Back-Up Servicer and Issuer Fees and Expenses with respect
to prior Payment Dates, after giving effect to the Available Funds for such Payment Date).

 

“Permitted
Modification” means any change to or modification (for the avoidance of doubt, any modification made solely as required
by applicable law shall be deemed to be a “Permitted Modification”) of the terms of a Receivable, including the timing
or amount of payments on the Receivable, so long as one of the following conditions has been satisfied:

 

		a.	any change or modification, individually and collectively with any other change or modification
proposed to be made with respect to the Receivable, is ministerial in nature;

 

		b.	any change or modification is (i) granted to an Obligor in accordance with the Servicer’s
Credit and Collection Policies and (ii) such change or modification (including when taken together with any other prior change
or modification) does not result in a Significant Modification;

 

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		c.	any change or modification where (i) the Obligor is in payment default or (ii) in the judgment
of the Servicer, in accordance with the Servicer’s Credit and Collection Policies, it is reasonably foreseeable that the
Obligor will default (it being understood that the Servicer may proactively contact any Obligor whom the Servicer believes may
be at higher risk of a payment default under the related Receivable); or

 

		d.	any extension, deferral, amendment, modification, alteration or adjustment, including a “payment
holiday” or “skip-a-pay” extension granted to an Obligor that is made (I) in accordance with the Servicer’s
Credit and Collection Policies and (II) with respect to which the Servicer has delivered an Opinion of Counsel to the Issuer, the
Receivables Trust, the Trustee and the Receivables Trust Trustee to the effect that such extension, deferral, amendment, modification,
alteration or adjustment, including a “payment holiday” or “skip-a-pay” extension will not result in or
not cause the Receivables Trust (or any part thereof) to be classified, for United States federal income tax purposes, as an association
(or a publicly traded partnership) taxable as a corporation or as other than a fixed investment trust described in Treasury Regulation
section 301.7701-4(c) that is treated as a grantor trust under subpart E, Part I of subchapter J of the Code.

 

“Post
Office Box” means post office box 815867, in Dallas, Texas, 75234, and, upon notice to Trustee, each other post office
box opened and maintained by the Receivables Trust or the Servicer for the receipt of Collections from Obligors and governed by
a Post Office Box Agreement reflecting that such post office box is in the name of the Receivables Trust, as any such post office
boxes may be closed from time to time by the Servicer with prior written notice to the Trustee (provided that (i) there shall at
all times be at least one post office box open to receive Collections, (ii) the Servicer takes customary and prudent procedures
to notify Obligors to make payments to such post office box and (iii) the closing or opening of any post office box is consistent
with the servicing standard set forth in Section 2.02(b)(ii)).

 

“Post
Office Box Agreement” means an agreement by and among the Servicer and the United States Postal Service, which is a standard
post office box agreement, specifying the rights of the parties in the Post Office Box.

 

“Purchase
Amount” shall have the meaning assigned to such term in Section 2.03.

 

“Purchase
Event” has the meaning assigned to that term in Section 2.03.

 

“Purchase
Payment” has the meaning assigned to that term in Section 2.03.

 

    	 	3	 

     

    

 

“Refinanced
Receivable” has the meaning assigned to that term in Section 2.04.

 

“Returned/Refinanced
Receivables” has the meaning assigned to that term in Section 2.04.

 

“Returned
Receivable” has the meaning assigned to that term in Section 2.04.

 

“Servicer”
is defined in Section 2.01(a).

 

“Servicer
Default” is defined in Section 2.06.

 

“Servicer
Indemnified Parties” is defined in Section 2.07.

 

“Servicing
Fee” is defined in Section 2.09.

 

“Significant
Modification” means any of the following changes (taking changes that occurred prior to acquisition of the Receivables
by the Receivables Trust into account) to a Receivable:

 

		a.	lowering the principal amount of a Receivable if the reduction lowers the yield of the Receivable
by more than the greater of (x) 25 basis points or (y) 5 percent of the annual yield of the unmodified Receivable;

 

		b.	making any change in interest rate of a Receivable or other payments which results in the change
in the annual yield of more than the greater of (x) 25 basis points or (y) 5 percent of the annual yield of the unmodified Receivable;
and

 

		c.	deferral of any payment on the Receivable beyond the due date for that payment that would result
in a deferral of payments for a period of more than the lesser of 5 years or 50% of the original term of the Receivable taking
into account, in the aggregate, all deferments and deferrals.

 

“Specified
Servicer Default” means any Servicer Default of the type specified in paragraph (d) of Section 2.06.

 

“SST”
means Systems & Services Technologies, Inc.

 

“Successor
Servicer” is defined in Section 2.01(b)(i).

 

“Trustee”
is defined in the preamble.

 

Section 1.02         Definitions.
Capitalized terms used but not defined herein shall have the respective meanings given to such terms in the Indenture and, to the
extent applicable, the Series Supplement.

 

    	 	4	 

     

    

 

Section 1.03         Other
Definitional Provisions.

 

(a)          All
terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.

 

(b)          Where
the character or amount of any asset or liability or item of income or expense is required to be determined, or any accounting
computation is required to be made, for the purpose of this Agreement, such determination or calculation shall be made in accordance
with GAAP. When used herein, the term “financial statement” shall include the notes and schedules thereto. All accounting
determinations and computations hereunder or under any other Transaction Documents shall be made without duplication.

 

(c)          [Reserved.]

 

(d)          The
words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and Section, subsection, Schedule
and Exhibit references contained in this Agreement are references to Sections, subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.

 

ARTICLE
II

 

ADMINISTRATION
AND SERVICING

OF
RECEIVABLES AND RELATED SECURITY

 

Section 2.01         Appointment
of Servicer.

 

(a)          The
servicing, administering and collection of the Receivables shall be conducted by such Person (the “Servicer”)
so designated from time to time in accordance with this Section 2.01. Until the Trustee gives notice to Conn Appliances
of the designation of a new Servicer pursuant to this Section 2.01, Conn Appliances is hereby designated as, and hereby
agrees to perform the duties and obligations of, the Servicer pursuant to the terms hereof. The Servicer may not delegate any of
its rights, duties or obligations hereunder, or designate a substitute Servicer, without the prior written consent of the Trustee
and the Receivables Trust; provided, however, that the Servicer shall be permitted to delegate its duties hereunder
to any of its Affiliates and may use subservicers, contractors or agents but will remain obligated and liable for the performance
of any such delegated duties as if it were performing such duties itself.

 

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(b)          (i)
After the occurrence of a Servicer Default, the Trustee may, and upon the direction of the Required Noteholders or in the case
of a Specified Servicer Default shall, in accordance with the provisions set forth in clause (ii) below, appoint the Back-Up
Servicer pursuant to the Back-Up Servicing Agreement dated as of the date hereof (as amended, supplemented or otherwise modified
from time to time, the “Back-Up Servicing Agreement”), among the Back-Up Servicer and the various other parties
thereto or any other successor servicer (SST, or any other successor servicer so appointed in accordance with the terms of Section
2.01(b)(ii) below, in such capacity, the “Successor Servicer”) to succeed to Conn Appliances as Servicer hereunder.

 

(ii)         If
(x) the Back-Up Servicer, on the date of its appointment as Successor Servicer or at any time following such appointment, fails
or is unable to perform the duties of the Servicer hereunder or has previously resigned or otherwise been terminated as Back-Up
Servicer, or (y) any other Person designated Successor Servicer in accordance with this Section 2.01 resigns, fails or
is unable to perform the duties of the Servicer hereunder following its appointment as Successor Servicer, the Trustee may
with the consent of the Required Noteholders, and upon the direction of the Required Noteholders shall, appoint as Servicer any
Person to succeed the then-current Servicer on the condition in each case that any such Person so appointed shall agree to perform
the duties and obligations of the Servicer pursuant to the terms hereof. Until such time as the Person so appointed becomes obligated
to begin acting as Servicer hereunder, the then current Servicer will continue to perform all servicing functions under this Agreement
and the other Servicer Transaction Documents. If the Trustee is not able to appoint a new Servicer to succeed Conn Appliances,
the Back-Up Servicer or any other Person then acting as Servicer, within a reasonable time following the date upon which it is
required to so appoint a successor to the Servicer pursuant to this Section 2.01 (but in any event not later than 30
days following such date), the Trustee shall at the expense of the Issuer (as Certificateholder of the Receivables Trust) petition
a court of competent jurisdiction to appoint as the Servicer hereunder any established financial institution having, a net worth
of not less than $25,000,000 and whose regular business includes the servicing of receivables comparable to the Receivables which
are the subject of this Agreement. Following any appointment of a Successor Servicer pursuant to this Section 2.01,
the Trustee will provide notice thereof to the Issuer, the Receivables Trust, the Depository, the Depositor and the Noteholders.

 

(c)          The
Trustee shall not be responsible for any differential between the Servicing Fee and any compensation paid to a Successor Servicer
hereunder.

 

    	 	6	 

     

    

 

Section 2.02         Duties
of Servicer.

 

(a)          (i)
The Servicer shall take or cause to be taken all such action as may be reasonably necessary or advisable to collect each Receivable
from time to time, all in accordance with applicable Laws, with reasonable care and diligence, and in accordance with the Credit
and Collection Policies and otherwise in accordance with the Servicer Transaction Documents. Each of the Receivables Trust, Issuer
(as Certificateholder of the Receivables Trust), each Noteholder by its acceptance of the related Notes and each of the other Secured
Parties, hereby appoints as its agent the Servicer, from time to time designated pursuant to Section 2.01 hereof, to enforce
its respective rights and interests in and under the Contracts, Receivables and Related Security, Collections and proceeds with
respect thereto. To the extent permitted by applicable law, each of the Receivables Trust and Conn Appliances (to the extent not
then acting as Servicer hereunder) hereby grants to any Servicer appointed hereunder all rights and powers of the Receivables Trust
and/or Conn Appliances, as the case may be, under the Contracts and with respect to the Related Security, and hereby grants an
irrevocable power of attorney to take in the Receivables Trust’s and/or Conn Appliances’ name and on behalf of the
Receivables Trust or Conn Appliances any and all steps necessary or desirable, in the reasonable determination of the Servicer,
to collect all amounts due under any and all Receivables, including, without limitation, to cancel any policy of insurance, make
demands for unearned premiums, commence enforcement proceedings, exercise other powers under a Contract, execute and deliver instruments
of satisfaction or cancellation, or full or partial discharge, with respect to Receivables, endorse the Receivables Trust’s,
the Issuer’s and/or Conn Appliances’ name on checks and other instruments representing Collections and enforce such
Receivables and the related Contracts. The Servicer shall, as soon as practicable following receipt thereof, turn over to Conn
Appliances any collections of any Indebtedness of any Person which is not on account of a Receivable. The Servicer shall not voluntarily
make the Receivables Trust, the Issuer, the Trustee, any Noteholder or any of their respective agents a party to any litigation
without the prior written consent of such Person other than any litigation adverse to such person. Without limiting the generality
of the foregoing and subject to Section 2.04, the Servicer is hereby authorized and empowered unless such power and authority
is revoked in writing by the Trustee (as designee of the Receivables Trust) pursuant to the terms of the Servicer Transaction Documents
(A) to make deposits into the Collection Account as set forth in this Agreement and the Indenture; provided, however, that with
respect to any Successor Servicer, nothing contained in any Servicer Transaction Document shall impose an obligation on such Successor
Servicer to make any withdrawals or payments from the Collection Account or any other Trust Account, (B) to instruct the Trustee
in writing, substantially in the form of the Monthly Servicer Report, to make deposits or withdrawals and payments from the Collection
Account, the Payment Account and any Series Account, in accordance with such instructions as set forth in the Indenture, (C) to
instruct or notify the Trustee in writing as set forth in this Agreement and, the Indenture, (D) to make all calculations, allocations
and determinations required of the Servicer under the Indenture and as required herein or to establish Series Accounts, (E) to
execute and deliver, on behalf of the Receivables Trust for the benefit of the Issuer and the Noteholders, any and all instruments
of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect
to the Receivables and the other Contracts and Related Security and, after any delinquency in payment relating to any Receivable,
to the extent permitted under and in compliance with applicable law and regulations, to commence enforcement proceedings with respect
thereto (including cancellation of the related insurance policy) and (F) in the case of the initial Servicer only, to make any
filings, reports, notices, applications, registrations with, and to seek any consents or authorizations from, the Securities and
Exchange Commission and any state securities authority on behalf of the Issuer as may be necessary or advisable to comply with
any federal or state securities or reporting requirements.

 

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(ii)         Subject
to the terms and conditions of this Section 2.02(a)(ii), the Servicer shall maintain custody and possession of the Receivable
Files on behalf of, and as bailee for, the Receivables Trust (for the benefit of the Trustee, the Issuer, the Noteholders and the
other Secured Parties) (in such capacity, together with its successors and assigns, the “Custodian”).

 

(iii)        To
the extent the Servicer has any duty or obligation to title or re-title the Receivables, the Servicer shall ensure that title is
properly reflected in the name of Conn’s Receivables 2018-A Trust.

 

(A)         Custodian
agrees to maintain possession of the related Receivable Files at its offices where they are presently maintained, at the offices
of the related subcustodians or at such other offices of Custodian as shall from time to time be identified to Trustee by written
notice. Custodian shall segregate physical Receivable Files from other files maintained by Custodian and shall, to the extent a
Receivable File is stored in electronic format, maintain an authoritative electronic copy of each Receivable File on a data tape
or other electronic media in a fire-resistant safe or room. The Receivables Trust hereby appoints Conn Appliances, and Conn Appliances
hereby agrees to act, as initial Custodian hereunder. Custodian may, at the Servicer’s request, temporarily deliver individual
Receivable Files or any portion thereof to Servicer without notice as necessary to conduct collection and other servicing activities
in accordance with the Credit and Collection Policies.

 

(B)         As
custodian and bailee, Custodian shall hold the Receivable Files (by itself and/or through subcustodians) on behalf of the Receivables
Trust (for the benefit of the Trustee, the Issuer, the Noteholders and the other Secured Parties) and, by agreeing to act as Custodian,
is deemed to have received notice of the security interests of the Secured Parties in the Contracts and related Receivables. As
custodian and bailee, Custodian shall maintain accurate records pertaining to each Receivable to enable it to comply with the terms
and conditions of this Agreement, maintain a current inventory thereof and conduct periodic physical inspections of Receivable
Files held by it under this Agreement and attend to all other details in connection with maintaining custody of the Receivable
Files.

 

    	 	8	 

     

    

 

(C)         In
performing its duties under this Section 2.02(a)(ii), Custodian agrees to act with reasonable care, using that degree
of skill and care that it exercises with respect to similar contracts owned and/or serviced by it. Custodian shall promptly report
to the Receivables Trust and the Trustee any material failure by it to hold the Receivable Files as herein provided and shall promptly
take appropriate action to remedy such failure. In acting as custodian of the Receivable Files, Custodian agrees further not to
assert, and shall cause each related subcustodian not to assert any beneficial ownership interests in the Receivables. Custodian
agrees to indemnify the Receivables Trust, Trustee, the Secured Parties and Issuer, and their respective officers, directors, employees,
partners and agents for any and all liabilities, obligations, losses, damages, payments, costs, or expenses of any kind whatsoever
which may be imposed on or incurred by any such Person arising from the negligence or willful misconduct of Custodian in maintaining
custody of the Receivable Files pursuant to this Section 2.02(a)(ii); provided, however, that Custodian will
not be liable to the extent that any such amount resulted from the negligence or willful misconduct of such Person.

 

(D)         The
appointment of Custodian shall terminate upon acceptance of the appointment of a Successor Servicer in accordance with this Agreement.
The Successor Servicer, by acceptance of its appointment, shall become the successor Custodian. Promptly following the appointment
of a successor Custodian, and in any event within five days of such appointment, the then-existing Custodian shall (at such Custodian’s
sole cost and expense if a Servicer Default shall have occurred or if such Custodian shall have been removed for cause) deliver
all of the Receivable Files in its possession, and all records maintained by it with respect thereto, to such successor Custodian.

 

(b)          (i)
Servicer shall service and administer the Receivables on behalf of the Receivables Trust (for the benefit of the Issuer, the Trustee
and the other Secured Parties) and shall have full power and authority, acting alone and/or through subservicers, contractors or
agents as provided in Section 2.02(b)(iii), to do any and all things which it may deem reasonably necessary or desirable
in connection with such servicing and administration and which are consistent with this Agreement and the other Servicer Transaction
Documents. Consistent with the terms of this Agreement and the other Servicer Transaction Documents, Servicer (or any agent on
Servicer’s behalf) may waive, modify or vary any term of any Receivable or consent to the postponement of strict compliance
with any such term or in any manner, grant indulgence to any Obligor if, in Servicer’s sole discretion, such waiver, modification,
postponement or indulgence will maximize collections on such Receivable; provided, however, that Servicer (or any
agent on Servicer’s behalf) may not permit any modification with respect to any Receivable unless such modification is a
Permitted Modification, is in accordance with the Credit and Collection Policies and, in the case of any extension of the final
maturity date of a Receivable, such extension does not extend beyond the Legal Final Payment Date and the total amount of extensions
of such Receivables is not in excess of twenty-four months unless such extension is as a result of or required by applicable law
or judicial order. Without limiting the generality of the foregoing, Servicer in its own name or in the name of the Receivables
Trust is hereby authorized and empowered by the Receivables Trust when Servicer believes it appropriate in its reasonable judgment
to execute and deliver, on behalf of the Receivables Trust, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge and all other comparable instruments, with respect to the Receivable.

 

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(ii)         Servicer
shall service and administer the Receivables by employing such procedures (including collection procedures) and degree of care,
in each case consistent with industry standards, as are customarily employed by Servicer in servicing and administering contracts
and notes owned or serviced by Servicer comparable to the Receivables.

 

(iii)        Servicer
may perform any of its duties pursuant to this Agreement, including those delegated to it pursuant to this Agreement, through subservicers,
contractors or agents appointed by Servicer. Such subservicers may include Affiliates of Servicer. Notwithstanding any such delegation
of a duty, Servicer shall remain obligated and liable for the performance of such duty as if Servicer were performing such duty.

 

(iv)        Servicer
may take such actions as are necessary to discharge its duties as Servicer in accordance with this Agreement, including the power
to execute and deliver on behalf of Issuer such instruments and documents as may be customary, necessary or desirable in connection
with the performance of Servicer’s duties under this Agreement (including consents, waivers and discharges relating to the
Receivable).

 

(v)         Servicer
shall keep separate records covering the transactions contemplated by this Agreement including the identity and collection status
of each Receivable.

 

(c)          Collections.
(i) On or prior to the Closing Date, initial Servicer shall have established and shall maintain thereafter the following system
of collecting and processing Collections of Receivables.  Servicer shall direct the Obligors to make payments of Receivables
only (A) by check mailed to the Post Office Box (such payments, upon receipt in such Post Office Box being referred to herein as
 “Mail Payments”), (B) by cash, credit card or check delivered in person or by phone at retail stores or other
business locations of initial Servicer (such payments, upon receipt by such stores, being referred to herein as “In-Store
Payments”), (C) by third party money wire transfer, ACH or other bill pay service that provides for the electronic deposit
of funds into an account of the Servicer on behalf of Obligors, (D) by utilizing the Servicer’s Webpay portal; or (E) by
cash, credit card or check delivered in person or by phone or by an agent of Conn Appliances at a service center of Conn Appliances
or, in the case of certain delinquent accounts, to employees of Conn Appliances operating out of a service center of Conn Appliances
or Servicer (such payments, upon receipt by the service center, being referred to herein as “Field Collections”). 
Notwithstanding anything to the contrary in this Section 2.02(c), any Successor Servicer shall collect and process Collections
of Receivables in any manner that is in accordance with the servicing standard set forth herein.

 

    	 	10	 

     

    

 

(ii)         Servicer’s
right of access to the Post Office Box and the Collection Account shall be revocable at the option of Trustee as designee of the
Receivables Trust (acting in its own discretion or at the direction of the Required Noteholders) upon the occurrence of any Default,
Event of Default or Servicer Default. In addition, after the occurrence of any Default, Event of Default or Servicer Default, Servicer
agrees that it shall, upon the written request of Trustee, notify all Obligors under Receivables to make payment thereof to (i)
one or more bank accounts and/or post-office boxes designated by Trustee and specified in such notice or (ii) any Successor Servicer
appointed hereunder. The Trustee may, and shall at the request of the Required Noteholders, if any Default, Event of Default or
Servicer Default has occurred, require the Servicer to establish a lockbox account pursuant to a lockbox agreement acceptable to
the Trustee, and with notice to the Notice Person, to direct all Obligors under Receivables to make payments to such lockbox account.

 

(iii)        Servicer
shall remove or cause all Mail Payments to be removed from the Post Office Box by the close of business on each Business Day. Servicer
shall process all such Mail Payments and all Field Collections on the date received by recording the amount of the payment received
from the Obligor and the applicable account number. Subject to Section 5.4(a) of the Indenture, no later than the close of
business on the second Business Day following the date on which Mail Payments are received in the Post Office Box or Field Collections
are received by Servicer, Servicer shall deposit or cause such Mail Payments and such Field Collections to be deposited in the
Collection Account. Subject to Section 5.4(a) of the Indenture, the Retailer and Servicer shall cause all In-Store Payments to
be (A) processed as soon as possible after such payments are received by the Retailer or Servicer but in no event later than the
Business Day after such receipt, and (B) deposited in the Collection Account no later than two Business Days following the date
of such receipt. Subject to Section 5.4(a) of the Indenture, Servicer shall deposit all Recoveries into the Collection Account
within two Business Days after the date of its receipt of such Recoveries.

 

(iv)        [Reserved.]

 

(v)         All
Collections received by Servicer in respect of Receivables will, pending remittance to the Collection Account as provided herein,
be held by Servicer in trust for the exclusive benefit of Trustee (on behalf of the Receivables Trust) and shall not, unless otherwise
permitted by the Servicer Transaction Documents, be commingled with any other funds or property of any Originator, Depositor or
Servicer except as otherwise permitted in accordance with Section 5.4 of the Indenture. Only Collections shall be deposited in
the Collection Account. The Servicer may cause to be withdrawn from the Collection Account such amounts that have been deposited
into the Collection Account in error not representing Collections or other proceeds of the Trust Estate and any amounts that are
deposited by Servicer that relate to checks rejected by the Obligor’s bank for insufficient funds.

 

    	 	11	 

     

    

 

(vi)        Each
of Depositor, the Receivables Trust, Issuer and Servicer hereby irrevocably waive any right to set off against, or otherwise deduct
from, any Collections.

 

(vii)       The
Receivables Trust, Issuer and initial Servicer hereby transfer, assign, pledge, set over and convey to Trustee all of their right,
title and interest in and to the Collection Account and the other Trust Accounts.

 

(viii)      All
payments or other amounts collected or received by Servicer in respect of a Receivable shall be applied to the Outstanding Receivables
Balance of such Receivable.

 

(d)          [Reserved.]

 

(e)          (i)
(A) [Reserved.]

 

(B)         If
SST is then acting as Successor Servicer, it shall cause a firm of independent certified public accountants, which may also render
other services to SST or its affiliates, to deliver to the Issuer, the Receivables Trust, and the Trustee, within 120 days after
the end of each fiscal year thereafter, commencing in the year after SST becomes Successor Servicer, (i) an opinion by a firm
of nationally recognized independent certified public accountants on the financial position of SST at the end of the relevant fiscal
year and the results of operations and changes in financial position of SST for such year then ended on the basis of an examination
conducted in accordance with generally accepted auditing standards, and (ii) a report from such independent certified public
accountants to the effect that based on an examination of certain specified documents and records relating to the servicing of
SST’s loan portfolio conducted substantially in compliance with SSAE 16 (the “Applicable Accounting Standards”),
such firm is of the opinion that such servicing has been conducted in compliance with the Applicable Accounting Standards except
for (a) such exceptions as such firm shall believe to be immaterial and (b) such other exceptions as shall be set forth
in such statement.

 

    	 	12	 

     

    

 

(ii)         The
Servicer will deliver to the Trustee and each Notice Person on or before the one year anniversary of the Closing Date and on each
anniversary thereof, a certificate in substantially the form of Exhibit B of an authorized officer of the Servicer stating
that (a) a review of the activities of the Servicer during the preceding year and of its performance under this Agreement was made
under the supervision of the officer signing such certificate and (b) to the best of such officer’s knowledge, based on such
review, the Servicer has fully performed in all material respects all of its obligations under this Agreement and each other applicable
Servicer Transaction Document to which it is a party throughout such period, or, if there has been a default in the performance
of any such obligation, specifying such default known to such officer and the nature and status thereof.

 

(f)          Notwithstanding
anything to the contrary contained in this Article II, the Servicer, if not Conn Appliances or any Affiliate of Conn Appliances,
shall have no obligation to collect, enforce or take any other action described in this Article II with respect to any Indebtedness
that is not included in the Trust Estate other than to deliver to the Issuer the collections and documents with respect to any
such Indebtedness as described in Section 2.02(a) hereof.

 

Section 2.03         Purchase
of Ineligible Receivables.

 

(a)          If
the representation and warranty of the initial Servicer contained in Section 2.10(d) was not true and correct with
respect to any Contract and related Receivable as of the Cut-Off Date in any material respect that materially and adversely impacts
such Contract and the related Receivable (any such Receivable, an “Ineligible Receivable”), the initial Servicer
shall, at the request of the Trustee, purchase such Ineligible Receivable within ten (10) Business Days after demand thereof (a
 “Purchase Event”) from the Receivables Trust for an amount (the “Purchase Amount”) equal
to the then Outstanding Receivables Balance of such Ineligible Receivable at the time of such purchase (any such payment, a “Purchase
Payment”).

 

(b)          The
initial Servicer and the Receivables Trust agree that after payment of the Purchase Amount for an Ineligible Receivable as provided
in clause (a) above, such Ineligible Receivable shall no longer constitute a Receivable for purposes of the Transaction
Documents.

 

(c)          Except
as expressly set forth herein, the initial Servicer shall not have any right under this Agreement, by implication or otherwise,
to purchase from the Receivables Trust any Receivables.

 

(d)          The
obligation of the initial Servicer to purchase an Ineligible Receivable pursuant to this Section 2.03 will survive the termination
of this Agreement or the earlier resignation or removal of the initial Servicer.

 

Section 2.04         Purchase
of Returned and Refinanced Receivables

 

(a)          Notwithstanding
anything to the contrary herein, the initial Servicer shall purchase any Receivable from the Receivables Trust to the extent that
(i) the Merchandise related to such Receivable is returned by an Obligor (a “Returned Receivable”), or (ii)
the Receivable is fully refinanced in connection with the purchase after the Cut-Off Date by the related Obligor of additional
Merchandise using the initial Servicer’s in-house credit (a “Refinanced Receivable,” and, together with
Returned Receivables, the “Returned/Refinanced Receivables”).

 

    	 	13	 

     

    

 

(b)          The
initial Servicer shall purchase any Returned/Refinanced Receivables pursuant to clause (a) for an amount equal to the Purchase
Amount for the applicable Returned/Refinanced Receivable.

 

(c)          The
initial Servicer and the Receivables Trust agree that after payment of the Purchase Amount for a Returned/Refinanced Receivables
as provided in clause (a) above, such Returned/Refinanced Receivable shall no longer constitute a Receivable for purposes
of the Transaction Documents

 

Section 2.05         Rights
After Designation of New Servicer. (a) At any time following the designation of a Successor Servicer (other than Conn Appliances
or an Affiliate thereof) pursuant to Section 2.01 hereof:

 

(i)          The
Trustee may, at its option, or shall, at the direction of the Required Noteholders, direct that payment of all amounts payable
under any Receivable be made directly to the Trustee or its designee.

 

(ii)         The
Receivables Trust shall, at the Trustee’s request, (A) assemble all of the records relating to the Receivables and other
Related Security, and shall make the same available to the Trustee or its designee at a place selected by the Trustee or its designee,
and (B) segregate all cash, checks and other instruments received by it from time to time constituting Collections of Receivables
in a manner acceptable to the Trustee and shall, promptly upon receipt, remit all such cash, checks and instruments, duly endorsed
or with duly executed instruments of transfer, to the Trustee or its designee.

 

(iii)        The
Receivables Trust hereby authorizes the Trustee and the Issuer (as Certificateholder of the Receivables Trust) to take any and
all steps in the Receivables Trust’s name and on behalf of the Receivables Trust necessary or desirable, in the reasonable
determination of the Trustee, to collect all amounts due under any and all Receivables, including, without limitation, endorsing
the Receivables Trust’s name on checks and other instruments representing Collections and enforcing such Receivables and
the related Contracts.

 

    	 	14	 

     

    

 

(iv)        Upon
delivery of a Notice of Appointment (as defined in the Back-Up Servicing Agreement) to the Back-Up Servicer, Conn Appliances shall
designate one or more employees acceptable to the Successor Servicer to assist the Successor Servicer with respect to In-Store
Payments so long as Conn Appliances continues to accept, or the Successor Servicer permits, In-Store Payments to be made as described
herein; provided, however, such employee of Conn Appliances shall in no event be deemed an employee, agent, custodian or nominee
of the Successor Servicer and the Successor Servicer shall have no responsibility or liability for any negligence or willful misconduct
of such employee or for such employee’s failure to assist the Successor Servicer (including without limitation any acts or
omissions unrelated to the transactions contemplated hereby). Upon the request of the Successor Servicer to the Trustee, 100% of
the Noteholders may direct the Successor Servicer to designate an employee of Successor Servicer to be assigned to any or all Conn
Appliances stores to oversee the collection of In-Store Payments at such stores. Each such employee shall be placed at such store
at the expense of the Issuer (as Certificateholder of the Receivables Trust) at the monthly rate reflected in the SST Fee Schedule.

 

(b)          The
Successor Servicer may accept and reasonably rely on all accounting and servicing records and other documentation provided to the
Successor Servicer by or at the direction of the predecessor Servicer, including documents prepared or maintained by any Originator,
or previous servicer, or any party providing services related to the Contracts, the Receivables and other Related Security (collectively,
 “third party”). The predecessor Servicer agrees to indemnify and hold harmless the related Successor Servicer, its
respective officers, employees and agents against any and all claims, losses, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, fees and expenses that the Successor Servicer may sustain in any way related to the negligence
or willful misconduct of any third party hired by or at the direction of such predecessor Servicer, any Affiliate of such predecessor
Servicer or any of their respective agents with respect to the Contracts, the Receivables and other Related Security. The Successor
Servicer shall have no duty, responsibility, obligation or liability (collectively, “liability”) for the acts or omissions
of any such third party. If any error, inaccuracy or omission (collectively, “error”) exists in any information provided
to the Successor Servicer and such errors cause or materially contribute to the Successor Servicer making or continuing any error
(collectively, “continuing errors”), the Successor Servicer shall have no liability for such continuing errors; provided,
however, that this provision shall not protect the Successor Servicer against any liability which would otherwise be imposed by
reason of willful misconduct or negligence in discovering or correcting any error or in the performance of its duties contemplated
herein.

 

In the event the Successor
Servicer becomes aware of errors and/or continuing errors that, in the opinion of the Successor Servicer, impair its ability to
perform its obligations hereunder, the Successor Servicer shall promptly notify the other parties hereto of such errors and/or
continuing errors. The Successor Servicer may undertake to reconstruct any data or records appropriate to correct such errors and/or
continuing errors and to prevent future continuing errors. The Successor Servicer shall be entitled to recover its costs thereby
expended from the predecessor Servicer.

 

    	 	15	 

     

    

 

Neither the Successor
Servicer nor any of the directors or officers or employees or agents of the Successor Servicer shall be under any liability to
the other parties hereto except as provided in this Agreement for any action taken or for refraining from the taking of any action
in good faith pursuant to this Agreement; provided, however, that this provision shall not protect the Successor Servicer
or any such Person against any liability that would otherwise be imposed by reason of willful misconduct, bad faith or negligence
in the performance of duties, by reason of reckless disregard of obligations and duties under this Agreement or any violation of
law by the Successor Servicer or such Person, as the case may be. The Successor Servicer and any director, officer, employee or
agent of the Successor Servicer may rely in good faith on the advice of counsel or on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising under this Agreement.

 

The Successor Servicer
will not be responsible for delays attributable to the predecessor Servicer’s failure to deliver information, defects in
the information supplied by such predecessor Servicer or other circumstances beyond the reasonable control of the Successor Servicer.
In addition, the Successor Servicer (and in the case of clauses (A) and (C) below, if a Servicing Officer of the Successor Servicer
has actual knowledge of errors, which in the reasonable opinion of the Successor Servicer impair its ability to perform its services
hereunder, after reasonable inquiry), shall have no responsibility and shall not be in default hereunder or incur any liability
for any act or omission, failure, error, malfunction or any delay in carrying out any of its duties under this Agreement for: (A) any
such failure or delay that results from the Successor Servicer acting in accordance with information prepared or supplied by a
Person other than any Person hired by the Successor Servicer, the Successor Servicer or the failure of any such other Person (including
without limitation the predecessor Servicer, but excluding any Person hired by the Successor Servicer) to prepare or provide such
information or other circumstances beyond the control of the Successor Servicer; (B) any act or failure to act by any third
party (other than those hired by the Successor Servicer), including without limitation the predecessor Servicer, the Receivables
Trust, the Issuer and the Trustee; (C) any inaccuracy or omission in a notice or communication received by the Successor Servicer
from any third parties (other than those hired by the Successor Servicer); (D) the invalidity or unenforceability of any Contracts,
the Receivables and Related Security under applicable law; (E) the breach or inaccuracy of any representation or warranty
made with respect to the Contracts, the Receivables and Related Security; or (F) the acts or omissions of any predecessor
or successor Servicer.

 

The Servicer, the Issuer
and the Receivables Trust agree to reasonably cooperate with the Successor Servicer in effecting the assumption of its responsibilities
and rights under this Agreement. The Servicer shall provide to the Successor Servicer all necessary servicing files and records
relating to the Contracts, the Receivables and Related Security (as deemed necessary by the Successor Servicer at such time on
a reasonable basis) and the initial Servicer shall use all commercially reasonable efforts to provide to the Successor Servicer
access to and transfer of records and use by the Successor Servicer of all licenses, servicing system, software, hardware, equipment,
telephony, personnel, employees, facilities or other accommodations necessary or desirable to collect the Contracts, in all cases,
subject to the terms of the Intercreditor Agreement, if applicable. The departing Servicer (if SST, only upon termination for cause)
shall be obligated to pay the costs associated with the transfer of servicing files and records to the Successor Servicer. The
Receivables Trust, the Issuer and the Trustee, and the Successor Servicer shall take such action, consistent with this Agreement,
as shall be necessary to effectuate any such succession.

 

    	 	16	 

     

    

 

Indemnification by
the Servicer under this Article shall be paid solely by the Servicer and not from the Trust Estate, and shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation. If the indemnifying party has made any indemnity
payments pursuant to this Section 2.05(b) and the recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts collected to the indemnifying party, without interest.

 

Section 2.06         Servicer
Default. The occurrence of any one or more of the following events shall constitute a Servicer default (each, a “Servicer
Default”):

 

(a)          failure
by the Servicer (or, for so long as Conn Appliances is the Servicer, Conn Appliances) to make any payment, transfer or deposit
under this Agreement or any other Servicer Transaction Document or to provide the Monthly Servicer Report to the Trustee to make
such payment, transfer, or deposit or any withdrawal on or before the date occurring five (5) days after the date such payment,
transfer or deposit is required to be made or given, as the case may be, under the terms of this Agreement or any other Servicer
Transaction Document (or in the case of a payment, transfer or deposit to be made or given with respect to any Interest Period,
by the related Payment Date);

 

(b)          failure
on the part of the Servicer (or, for so long as the Servicer is Conn Appliances, Conn Appliances) to duly observe or perform any
other covenants or agreements of the Servicer set forth in this Agreement or any other Servicer Transaction Document, which failure
continues unremedied for a period of thirty (30) days after the earlier of discovery by the Servicer or the date on which written
notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Trustee, the Receivables
Trust, the Receivables Trust Trustee or the Issuer; or the Servicer shall assign its duties under this Agreement, except as permitted
by Article II;

 

(c)          any
representation, warranty or certification made by the Servicer in this Agreement or any other Servicer Transaction Document or
in any certificate delivered pursuant to this Agreement or any other Servicer Transaction Document shall prove to have been incorrect
when made and which continues unremedied for a period of thirty (30) days after the date on which the Servicer has actual knowledge
thereof or on which written notice thereof, requiring the same to be remedied, shall have been given to the Servicer by the Trustee,
the Issuer, the Receivables Trust or the Receivables Trust Trustee;

 

(d)          the
Servicer shall become the subject of any Event of Bankruptcy or shall voluntarily suspend payment of its obligations;

 

(e)          for
so long as Conn Appliances is the Servicer, the failure of Consolidated Parent to maintain Consolidated Net Worth of at least the
sum of $250,000,000; or

 

(f)          at
any time that Conn Appliances is Servicer, a final judgment or judgments for the payment of money in excess of $7,500,000 in the
aggregate shall have been rendered against the Issuer or Conn Appliances and the same shall have remained unsatisfied and in effect,
without stay of execution, for a period of thirty (30) consecutive days after the period for appellate review shall have elapsed.

 

    	 	17	 

     

    

 

Section 2.07         Servicer
Indemnification of Indemnified Parties. (A) The Servicer (if other than SST as successor Servicer) will indemnify, defend and
hold harmless the Trustee, the Receivables Trust Trustee, the Issuer, the Receivables Trust, the Back-Up Servicer, the successor
Servicer and the Noteholders, and (B) SST as successor Servicer will indemnify and hold harmless the Trustee, on behalf of the
Noteholders, the Receivables Trust Trustee, on behalf of the holder of the Receivables Trust Certificate, the Issuer and the Receivables
Trust (in each case, together with their respective successors and permitted assigns) and each of their respective agents, officers,
members and employees (each, a “Servicer Indemnified Party” and, collectively, the “Servicer Indemnified Parties”),
from and against any claim, action, suit, loss, liability, expense, damage or injury suffered or sustained by reason of such Servicer’s
negligence in the performance of (or failure to perform) its duties or obligations under the Servicer Transaction Documents or
Servicer’s willful misconduct or breach by the Servicer of any of its representations or warranties contained in this Agreement,
including any judgment, award, settlement, reasonable attorneys’ fees and other costs or expenses reasonably incurred in
connection with the defense of any actual action, proceeding or claim and fees and expenses incurred in connection with the enforcement
of indemnification rights; provided, however, that the Servicer shall not indemnify any Servicer Indemnified Party
for any such acts or omissions attributable to the negligence or willful misconduct of such Servicer Indemnified Party. Any indemnification
pursuant to this Section shall be had only from the assets of the Servicer and shall not be payable from Collections except to
the extent such Collections are released to the Servicer in accordance with Section 5.15 of the Indenture in respect of
the Servicing Fee. The provisions of such indemnity shall run directly to and be enforceable by such Servicer Indemnified Parties.

 

The Issuer (as Certificateholder
of the Receivables Trust) will indemnify, defend and hold harmless the Servicer and its officers, directors, employees, representatives
and agents (each, an “Issuer Indemnified Party” and, collectively, the “Issuer Indemnified Parties”),
from and against and reimburse the Servicer for any and all claims, expenses, obligations, liabilities, losses, damages, injuries
(to person, property, or natural resources), penalties, stamp or other similar taxes, actions, suits, judgments, reasonable costs
and expenses (including reasonable attorney’s and agent’s fees and expenses) of whatever kind or nature regardless
of their merit, demanded, asserted or claimed against the Servicer directly or indirectly relating to, or arising from, claims
against the Servicer by reason of its participation in the transactions contemplated hereby, including without limitation all reasonable
costs required to be associated with claims for damages to persons or property, and reasonable attorneys’ and consultants’
fees and expenses and court costs and fees and expenses incurred in connection with the enforcement of indemnification rights;
provided, however, that the Issuer shall not indemnify any Issuer Indemnified Party for any such acts or omissions attributable
directly or indirectly to the negligence or willful misconduct of such Issuer Indemnified Party or, other than with respect to
SST as successor Servicer, for any breach by the Servicer of any of the Servicer Transaction Documents. The provisions of this
section shall survive the termination of this Agreement or the earlier resignation or removal of the Servicer.

 

    	 	18	 

     

    

 

Section 2.08         Grant
of License. For the purpose of enabling the Back-Up Servicer or any other Successor Servicer to perform the functions of servicing
and collecting the Receivables upon a Servicer Default, Conn Appliances hereby (i) assigns, to the extent not prohibited by law
or the terms of any agreement to which Conn Appliances is a party or by which it is deemed bound (by the terms thereof or by acceptance
of a license), to the Trustee for the benefit of the Secured Parties and shall be deemed to assign to the Trustee for the benefit
of the Secured Parties, the Back-Up Servicer or any other Successor Servicer all rights owned or hereinafter acquired by Conn Appliances
(by license, sublicense, lease, easement or otherwise) in and to any equipment used for servicing (or reasonable access thereto)
together with a copy of any software used in connection with the performance of its duties as Servicer and relating to the Servicing
and collecting of Receivables, (ii) agrees to use all reasonable efforts to assist the Trustee for the benefit of the Secured Parties,
the Back-Up Servicer or any other Successor Servicer to arrange licensing agreements with all software vendors and other applicable
persons in a manner and to the extent reasonably appropriate to effectuate the servicing of the Receivables, (iii) agrees
to deliver to the Trustee, the Back-Up Servicer or any Successor Servicer executed copies of any landlord waivers that may be necessary
to grant to the Trustee, the Back–Up Servicer or any other Successor Servicer access to any leased premises of Conn Appliances
for which the Trustee, the Back-Up Servicer or any other Successor Servicer may require access to perform the collection and administrative
functions to be performed by the Trustee, the Back-Up Servicer or any Successor Servicer under the Servicer Transaction Documents
and (iv) agrees that it will terminate its activities as Servicer hereunder in a manner which the Trustee the Back-Up Servicer
or any Successor Servicer reasonably believes will facilitate the transition of the performance of such activities to the Back-Up
Servicer or any other designated Successor Servicer, as applicable, and shall use commercially reasonable efforts to assist the
Trustee, the Back-Up Servicer or any Successor Servicer in such transition. The terms of this Section 2.08 shall all be subject
to the limitations on the Servicer’s rights as set forth in the Intercreditor Agreement.

 

Section 2.09         Servicing
Compensation. As compensation for its servicing and custodial activities hereunder and reimbursement for its expenses (in the
case of Conn Appliances only) as set forth in the immediately following paragraph, the Servicer shall be entitled to receive a
servicing fee (the “Servicing Fee”) as set forth in the Transaction Documents (including, with regards to SST
as Successor Servicer, as set forth on the SST Fee Schedule) prior to the Indenture Termination Date as described in Section 12.1
of the Indenture. The Servicing Fee shall be payable, with respect to each Series, at the times and subject to the limitations
set forth in the Indenture.

 

The initial Servicer’s
expenses include expenses incurred by the initial Servicer in connection with its activities hereunder; provided, that the
initial Servicer in its capacity as such shall not be liable for any liabilities, costs or expenses of the Receivables Trust, the
Issuer, the Noteholders or the Note Owners arising under any tax law, including without limitation any federal, state or local
income or franchise taxes or any other tax imposed on or measured by income or gross receipts (or any interest or penalties with
respect thereto or arising from a failure to comply therewith) except to the extent that such liabilities, taxes or expenses arose
as a result of the breach by the initial Servicer of its obligations under Section 6.02 hereof. In such case, the initial
Servicer shall be required to pay such expenses for its own account and shall not be entitled to any payment therefor other than
the Servicing Fee. The payment of the expenses of SST, as Successor Servicer, which with respect to SST are set forth in the SST
Fee Schedule attached to the Back-Up Servicing Agreement, shall be distributed on each Payment Date to the extent of funds available
therefor in accordance with Section 5.15 of the Indenture and the SST Fee Schedule. The provisions of this Section 2.09
shall survive the termination of this Agreement and the earlier resignation or removal of the Servicer.

 

    	 	19	 

     

    

 

Section 2.10         Representations
and Warranties of the Servicer. The Servicer hereby represents, warrants and covenants to and for the benefit of the Receivables
Trust, the Issuer, the Trustee, the Back-Up Servicer, the Successor Servicer and the Noteholders as of the date of this Agreement
and, in the case of the initial Servicer, as of the Closing Date and, in the case of any Successor Servicer, as of the date of
its appointment as Servicer:

 

(a)          Organization
and Good Standing, etc. Servicer has been duly organized and is validly existing and in good standing under the laws of its
state of organization, with power and authority to own its properties and to conduct its business as such properties are presently
owned and such business are presently conducted. Servicer is duly licensed or qualified to do business as a foreign entity in good
standing in the jurisdiction where its principal place of business and chief executive office are located and in each other jurisdiction
in which the failure to be so licensed or qualified would be reasonably likely to have a Material Adverse Effect.

 

(b)          Power
and Authority; Due Authorization. Servicer has (i) all necessary power, authority and legal right to execute, deliver
and perform, as applicable, its obligations under this Agreement and each of the other Servicer Transaction Documents, and (ii) duly
authorized, by all necessary action, the execution, delivery and performance, as applicable, of this Agreement and the other Servicer
Transaction Documents. Servicer has and in the case of the initial Servicer only, had at all relevant times, and now has, all necessary
power, authority and legal right to perform its duties as Servicer.

 

(c)          No
Violation. The consummation of the transactions contemplated by this Agreement and the other Servicer Transaction Documents
and the fulfillment of the terms hereof will not (i) conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time or both) a default under, (A) the organizational documents of Servicer,
or (B) (in the case of SST as successor Servicer, without investigation or inquiry) any material indenture, loan agreement, pooling
and servicing agreement, receivables purchase and sale agreement, mortgage, deed of trust, or other agreement or instrument to
which Servicer is a party or by which any of them or any of their respective properties is bound, (ii) in the case of the
initial Servicer only, result in or require the creation or imposition of any Adverse Claim upon any of its properties pursuant
to the terms of any such indenture, loan agreement, pooling and servicing agreement, receivables purchase and sale agreement, mortgage,
deed of trust, or other agreement or instrument, other than pursuant to the terms of the Servicer Transaction Documents, or (iii) violate
any law or any order, rule, or regulation applicable to Servicer or of any court or of any federal, state or foreign regulatory
body, administrative agency, or other governmental instrumentality having jurisdiction over Servicer or any of its properties.

 

    	 	20	 

     

    

 

(d)          Eligible
Receivable. Solely in the case of the initial Servicer, all Receivables in the Trust Estate are Eligible Receivables as of
the Cut-Off Date.

 

(e)          Validity
and Binding Nature. This Agreement is, and the other Servicer Transaction Documents when duly executed and delivered, as applicable,
by Servicer and the other parties thereto will be, the legal, valid and binding obligation of Servicer enforceable in accordance
with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar law affecting creditors’ rights generally and by general principles of equity.

 

(f)          Government
Approvals. No authorization or approval or other action by, and no notice to or filing with, any governmental authority or
regulatory body required for the due execution, delivery or performance by Servicer of any Servicer Transaction Document to which
it is a party remains unobtained or unfiled, except in the case of the initial Servicer for the filing of the financing statements
referred to in Section 7.02(a).

 

(g)          Margin
Regulations. Initial Servicer is not engaged in the business of extending credit for the purpose of purchasing or carrying
margin stock, and no proceeds of any Class A Notes, directly or indirectly, will be used for a purpose that violates, or would
be inconsistent with, Regulations T, U and X promulgated by the Federal Reserve Board from time to time.

 

(h)          Compliance
with Applicable Laws. Servicer is in compliance with the requirements of all applicable laws, rules, regulations, and orders
of all governmental authorities, a breach of any of which, individually or in the aggregate, would be reasonably likely to have
a Material Adverse Effect.

 

(i)          No
Proceedings. Except as described in Schedule 2.10(i), provided that such schedule shall only apply to the initial Servicer,

 

(i)          there
is no order, judgment, decree, injunction, stipulation or consent order of or with any court or other government authority to which
Servicer is subject, and there is no action, suit, arbitration, regulatory proceeding or investigation pending, or, to the actual
knowledge of Servicer, threatened, before or by any court, regulatory body, administrative agency or other tribunal or governmental
instrumentality, against Servicer that, individually or in the aggregate, is reasonably likely to have a Material Adverse Effect;
and

 

(ii)         there
is no action, suit, proceeding, arbitration, regulatory or governmental investigation, pending or, to the actual knowledge of Servicer,
threatened, before or by any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality (A) asserting
the invalidity of this Agreement or any other Servicer Transaction Document, or (B) seeking to prevent the consummation of
any of the other transactions contemplated by this Agreement or any other Servicer Transaction Document.

 

    	 	21	 

     

    

 

(j)          Accuracy
of Information. All information heretofore furnished by, or on behalf of, Servicer to the Receivables Trust, the Issuer, the
Trustee or any Noteholder in connection with any Servicer Transaction Document, or any transaction contemplated thereby, is true
and accurate in every material respect.

 

If SST is acting as Successor
Servicer, with respect to the representations set forth in Sections 2.10(a), 2.10(i) and 2.10(j), when determining whether any
Material Adverse Effect has occurred with respect to any matter described in such sections, clauses (ii) and (iii) of the definition
of “Material Adverse Effect” shall apply without reference to the effect of such matter on Depositor or on any Servicer
(other than SST as Successor Servicer).

 

Section 2.11         Reports
and Records for the Trustee. In addition to each of the reports required to be prepared and delivered by the Servicer pursuant
to Section 2.02(e) hereof, the Servicer shall prepare and deliver in accordance with this Section 2.11 each of the
following reports and notices:

 

(a)          Periodic
Reports. The Servicer shall prepare and forward to the Receivables Trust, the Issuer, the Back-Up Servicer and the Trustee
(i) on or prior to the Series Transfer Date with respect to each calendar month, a Monthly Servicer Report in substantially the
form set forth on Exhibit A-1 attached hereto as of the last day of the immediately preceding calendar month, and (ii)
as soon as reasonably practicable, from time to time, such other information in its possession as the Receivables Trust, the Trustee
or the Back-Up Servicer may reasonably request.

 

(b)          Monthly
Noteholders’ Statement. Unless otherwise stated in the Series Supplement, on each Determination Date the Servicer shall
forward to the Receivables Trust, the Trustee and the Back-Up Servicer a Monthly Noteholders’ Statement substantially in
the form set forth on Exhibit A-2 attached hereto prepared by the Servicer.

 

(c)          Issuer
Reports. The Servicer shall prepare and deliver the reports applicable to it and comply with all the provisions applicable
to it under Section 4.3 of the Indenture.

 

(d)          Series
Reports. The initial Servicer shall prepare and deliver any reports required to be prepared and delivered by the Servicer by
the terms of any agreements of the Issuer or the Servicer relating to the issuance or purchase of any of the Notes.

 

Section 2.12         Reports
to the Commission. The Issuer, the Receivables Trust and/or Conn Appliances, if the Issuer, the Receivables Trust and/or Conn
Appliances or any Affiliate of either of them is not acting as Servicer, shall, at the expense of the Issuer or Conn Appliances,
as applicable, cooperate in any reasonable request of the Trustee in connection with any filings required to be filed by the Trustee
under the provisions of the Securities Exchange Act of 1934 or pursuant to Section 4.3 of the Indenture.

 

    	 	22	 

     

    

 

Section 2.13         Affirmative
Covenants of the Servicer. At all times from the date hereof to the date on which the outstanding principal balance of all
Notes shall be equal to zero, unless the Required Noteholders shall otherwise consent in writing:

 

(a)          Credit
and Collection Policies. The Servicer will comply in all material respects with the Credit and Collection Policies in regard
to each Receivable and the related Contract.

 

(b)          Collections
Received. Subject to Section 5.4(a) of the Indenture, the Servicer shall set aside and deposit as soon as reasonably
practicable (but in any event no later than two (2) Business Days following its receipt thereof) into the Collection Account all
Collections received from time to time by the Servicer.

 

(c)          Notice
of Defaults, Events of Default, Potential Pay Out Event or Servicer Defaults. Within five (5) Business Days after the Servicer
obtains actual knowledge or receives written notice of the occurrence of each Default, Event of Default or Servicer Default, the
Servicer will furnish to the Trustee and each Rating Agency a statement of a Responsible Officer of the Servicer, setting forth
to the extent actually known by the Servicer, details of such Default, Event of Default or Servicer Default, and the action which
the Servicer, the Issuer or the Depositor proposes to take with respect thereto.

 

(d)          Conduct
of Business. The Servicer will do all things necessary to remain duly incorporated, validly existing and in good standing in
its jurisdiction of organization and maintain all requisite authority to conduct its business in each jurisdiction in which its
business is conducted to the extent that the failure to maintain such would have a Material Adverse Effect.

 

(e)          Compliance
with Laws. The Servicer will comply in all respects with all laws with respect to the Receivables to the extent that any non-compliance
would have a Material Adverse Effect.

 

(f)          Further
Information. The Servicer shall furnish or cause to be furnished to the Receivables Trust, the Trustee such other information
relating to the Receivables and readily available public information regarding the financial condition of the Servicer, as soon
as reasonably practicable, and in such form and detail, as the Trustee or the Receivables Trust may reasonably request.

 

    	 	23	 

     

    

 

(g)          Furnishing
of Information and Inspection of Records. The Servicer will furnish to the Receivables Trust, the Trustee and the Issuer from
time to time such information in its possession with respect to the Receivables as such Person may reasonably request, including,
without limitation, listings identifying the Outstanding Receivables Balance for each Receivable, together with an aging of Receivables.
The Servicer will, at any time and from time to time during regular business hours and, upon reasonable notice, permit the Trustee,
the Issuer, or its agents or representatives, (i) to examine and make copies of and abstracts from all Records relating to the
Receivables and (ii) to visit the offices and properties of the Servicer for the purpose of examining such Records, and to discuss
matters relating to Receivables or the Servicer’s performance hereunder and under the other Servicer Transaction Documents
with any Servicing Officer of the Servicer having knowledge of such matters. Upon a Default, Event of Default or Servicer Default,
the Trustee and the Issuer may have, without notice, reasonable access to all records and the offices and properties of the Servicer.

 

(h)          Risk
Retention.: The Servicer, in its capacity as “sponsor” within the meaning of 17 C.F.R. Part 246 (“Regulation
RR”), shall cause the Depositor to retain the “eligible horizontal residual interest” (as defined by Regulation
RR (the “Retained Interest”)) on the Closing Date and the Servicer will cause the Depositor and each Affiliate
of the Servicer not to sell, transfer, finance or hedge the Retained Interest in violation of Regulation RR.  This Section
2.13(h) shall survive the termination of this Agreement, and any resignation by, or termination of, the Servicer.

 

If SST is acting as
Successor Servicer, with respect to the covenants set forth in Sections 2.13(d), 2.13(e) and 2.14(c),
when determining whether any Material Adverse Effect has occurred with respect to any matter described in such sections, clauses
(ii) and (iii) of the definition of “Material Adverse Effect” shall apply without reference to the effect of such matter
on Depositor or on any Servicer (other than SST as Successor Servicer).       

 

Section 2.14         Negative
Covenants of the Servicer. At all times from the date hereof to the date on which the outstanding principal balance of all
Notes shall be equal to zero, unless the Required Noteholders shall otherwise consent in writing:

 

(a)          Modifications
of Receivables or Contracts. The Servicer shall not extend, amend, forgive, discharge, compromise, waive, cancel or otherwise
modify the terms of any Receivable or amend, modify or waive any term or condition of any Contract related thereto; except in accordance
with Section 2.02(b).

 

(b)          Merger
or Consolidation of, or Assumption of the Obligations of, the Servicer. (I) The Servicer shall not consolidate with or merge
into any other corporation or convey or transfer its properties and assets substantially as an entirety to any Person, unless:

 

(i)          the
entity formed by such consolidation or into which the Servicer is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Servicer substantially as an entirety shall be an entity organized and existing under the laws
of the United States of America or any State or the District of Columbia and, if the Servicer is not the surviving entity, such
corporation shall expressly assume, by an agreement supplemental hereto executed and delivered to the Trustee, and with the satisfaction
of the Rating Agency Condition, the performance of every covenant and obligation of the Servicer under the Servicer Transaction
Documents; and

 

    	 	24	 

     

    

 

(ii)         the
Servicer has delivered to the Trustee, each Notice Person and the Receivables Trust (if requested by such Person) an Opinion of
Counsel stating that such consolidation, merger, conveyance or transfer comply with this paragraph (b) and that all conditions
precedent herein provided for relating to such transaction have been complied with (and if an agreement supplemental hereto has
been executed as contemplated by clause (i) above, such opinion of counsel shall state that such supplemental agreement is a legal,
valid and standing obligation of the Servicer enforceable against the Servicer in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights
and to general equity principles).

 

(II) If SST
is acting as Servicer, any corporation or other entity into which SST may be merged or converted or with which it may be consolidated,
or any corporation or other entity resulting from any merger, conversion or consolidation to which SST shall be a party, or any
corporation or other entity succeeding to the business of SST must be the successor of SST hereunder without the execution or filing
of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer
or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding, and SST will not merge,
convert or consolidate if the resulting entity would not be the successor of SST hereunder.

 

(c)          No
Change in Business or the Credit and Collection Policies. The Servicer will not make any change in the character of its business
or in the Credit and Collection Policies, which change would, in either case, impair the collectability of any Receivable or otherwise
have a Material Adverse Effect, except to the extent such change is required as a result of a change in applicable Requirements
of Law.

 

Section 2.15         Sale
of Defaulted Receivables. The initial Servicer may sell, on behalf of the Receivables Trust, Defaulted Receivables that have
been Defaulted Receivables for no less than six months, as to which the initial Servicer shall have determined eventual payment
in full is unlikely, to an unaffiliated third party for the greatest market price available, if in its good faith judgment it determines
that the proceeds ultimately recoverable with respect to such Receivables would be increased by such sale. Notwithstanding the
foregoing, in no event may the aggregate sales of Defaulted Receivables (by Outstanding Receivables Balance of such Defaulted Receivable
as of the Cut-Off Date) pursuant to this Section 2.15 exceed 10% of the Outstanding Receivables Balance on the Cut-Off Date.

 

    	 	25	 

     

    

 

Section 2.16         Deemed
Collections. In the event that there is any breach of any of the representations, warranties or covenants of the initial Servicer
contained in Section 2.10(d), Section 2.13(a), Section 2.13(e), and Section 2.14(a) with respect
to any Receivable, and such Receivable becomes a Defaulted Receivable or the rights of the Secured Parties in, to or under such
Receivable or its proceeds are impaired or the proceeds of such Receivable are not available to the Trustee for the benefit of
the Secured Parties or the initial Servicer has released any Merchandise securing a Receivable from the lien created by such Receivable
(except as specifically provided in the Servicer Transaction Documents), then the initial Servicer shall be deemed to have received
on such day a collection of such Receivable in full, and the initial Servicer shall, on the Distribution Date, deposit into the
Collection Account, subject to Section 5.4(a) of the Indenture, an amount equal to the Outstanding Receivables Balance of such
Receivable, and such amount shall be allocated and applied by the initial Servicer as a Collection allocable to the Receivables
or Related Security in accordance with Section 5.11 (or the applicable section relating to allocation of Collections) of the Indenture.
In the event that the initial Servicer has paid to or for the benefit of the Noteholders or any other applicable Secured Party
the full Outstanding Receivables Balance of any Receivable pursuant to this paragraph, the Receivables Trust shall release and
convey all of such Person’s right, title and interest in and to the related Receivable to the initial Servicer, without representation
or warranty, but free and clear of all liens created by such Person, as applicable.

 

ARTICLE
III

 

RIGHTS
OF NOTEHOLDERS AND ALLOCATION

AND
APPLICATION OF COLLECTIONS

 

Section 3.01         Establishment
of Accounts.

 

(a)          The
Collection Account. The initial Servicer, for the benefit of the Secured Parties, shall establish and the Servicer shall maintain
the Collection Account in the state of New York or in the city in which the Corporate Trust Office is located, with a Qualified
Institution in the name of the Trustee, on behalf of the Secured Parties as designee of the Receivables Trust, a non-interest bearing
segregated account bearing a designation clearly indicating that the funds deposited therein are held in trust for the benefit
of the Secured Parties. Pursuant to authority granted to it pursuant to subsection 2.02(a), the Servicer shall have
the revocable power to cause to be withdrawn funds from the Collection Account for the purposes of carrying out its duties hereunder
and under the Indenture.

 

(b)          Series
Accounts. If so provided in the Series Supplement, the initial Servicer shall cause to be established and the Servicer shall
maintain in the name of the Trustee for the benefit of the Noteholders and the other Secured Parties as designee of the Receivables
Trust, one or more Series Accounts. Each such Series Account shall bear a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders and the other Secured Parties, to the extent applicable. Each such Series Account
will be a trust account, if so provided in the Series Supplement, and will have the other features and be applied as set forth
in the Series Supplement.

 

    	 	26	 

     

    

 

Section 3.02         Collections
and Allocations.

 

(a)          Collections.
Subject to subsection 5.4(a) of the Indenture, the Servicer shall deposit all Collections in the Collection Account as promptly
as possible after the date of receipt of such Collections, but in no event later than the second Business Day following such date
of receipt.

 

The Servicer shall allocate
such amounts in accordance with this Article III and Article 5 of the Indenture and the initial Servicer shall cause to be withdrawn
the required amounts from the Collection Account or pay such amounts to the Noteholders or other Persons entitled thereto in accordance
with this Article III and Article 5 of the Indenture, in both cases as modified by the Series Supplement. The initial Servicer
shall make such deposits or payments on the date indicated therein by wire transfer or as otherwise provided in the Series Supplement.

 

ARTICLE
IV

 

OTHER
SERVICER POWERS

 

Section 4.01         Appointment
of Paying Agent. Subject to Section 2.7 of the Indenture, the Servicer may, but shall not be obligated to, revoke
the power of the Paying Agent to withdraw funds from any account maintained for the benefit of the Secured Parties pursuant to
the Indenture and remove the Paying Agent, if the Servicer determines in its reasonable discretion that the Paying Agent shall
have failed to perform its obligations under the Indenture in any material respect or for other good cause. The Issuer shall promptly
notify each Rating Agency of the removal of any Paying Agent.

 

Section 4.02         [Reserved.]

 

ARTICLE
V

 

OTHER
MATTERS RELATING

TO
THE SERVICER

 

Section 5.01         Liability
of the Servicer. The Servicer hereby agrees to perform any and all duties and obligations set forth in the Indenture that are
specifically identified therein as duties of the Servicer. Subject to the foregoing, the Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically undertaken by it or required to be taken by it in such capacity herein
and in the other Servicer Transaction Documents.

 

    	 	27	 

     

    

 

Section 5.02         Limitation
on Liability of the Servicer and Others. The directors, officers, employees or agents who are natural persons of the Servicer
shall not be under any liability to the Issuer, the Receivables Trust, the Trustee, the Noteholders or any other Person hereunder
or pursuant to any document delivered hereunder for any action taken or for refraining from the taking of any action, it being
expressly understood that all such liability is expressly waived and released as a condition of, and as consideration for, the
execution of this Agreement and any supplement hereto. Except as provided in this Section 5.02 with respect to the
Issuer, the Receivables Trust, and the Trustee, and their respective officers, directors, employees and agents, the Servicer shall
not be under any liability to the Issuer, the Receivables Trust, the Trustee, their respective officers, directors, employees and
agents, the Noteholders or any other Person for any action taken or for refraining from the taking of any action in its capacity
as Servicer pursuant to this Agreement or any supplement hereto; provided, however, that this provision shall not
protect the Servicer against any liability which would otherwise be imposed by reason of (x) willful misconduct, bad faith or negligence
in the performance of duties or by reason of its reckless disregard of its obligations and duties hereunder or under the Series
Supplement or (y) breach of the express terms of any Servicer Transaction Document. The Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising hereunder.
The Servicer shall not be under any obligation to appear in, prosecute or defend any legal action which is not incidental to its
duties to service the Receivables or the other property in the Trust Estate in accordance with this Agreement, the Indenture and
the Series Supplement that in its reasonable opinion may involve it in any expense or liability.

 

Section 5.03         Servicer
Not to Resign. The Servicer shall not resign from the obligations and duties hereby imposed on it except upon determination
that (i) the performance of its duties hereunder is no longer permissible under applicable law and (ii) there is no reasonable
action which such Servicer could take to make the performance of its duties hereunder permissible under applicable law. Any such
determination permitting the resignation of any Servicer shall be evidenced as to clause (i) above by an Opinion of Counsel and
as to clause (ii) by a Conn Officer’s Certificate of the Servicer (or, if the Servicer is not Conn Appliances or an Affiliate
thereof, a certificate of a responsible officer of such Servicer), each to such effect delivered, and satisfactory in form and
substance, to the Trustee. No such resignation shall become effective until a Successor Servicer shall have assumed the responsibilities
and obligations of such Servicer in accordance with Section 2.01 hereof and the Rating Agency Condition shall have
been satisfied.

 

Section 5.04         Waiver
of Defaults. Any default by the Servicer in the performance of its obligations hereunder and its consequences may be waived
pursuant to Section 7.01. Upon any such waiver of a default, such default shall cease to exist, and any default arising
therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent expressly so waived.

 

ARTICLE
VI

 

ADDITIONAL
OBLIGATION OF THE

SERVICER
WITH RESPECT TO THE TRUSTEE

 

Section 6.01         Successor
Trustee.

 

(a)          If
the Trustee resigns or is removed pursuant to the terms of the Indenture or if a vacancy exists in the office of the Trustee for
any reason, the Servicer (or, if Conn Appliances is not the Servicer, the Issuer) shall promptly appoint a successor Trustee meeting
the requirements of Section 11.9 of the Indenture, by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor Trustee.

 

    	 	28	 

     

    

 

(b)          The
Servicer and the Issuer agree to execute and deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor Trustee all rights, powers, duties and obligations under the Indenture
and hereunder.

 

Section 6.02         Tax
Returns. The initial Servicer, on behalf of Issuer, or the Issuer shall prepare or shall cause to be prepared all tax information
required by law to be distributed to Noteholders and shall deliver such information to the Trustee at least five days prior to
the date it is required by law to be distributed to Noteholders. Except to the extent the initial Servicer or the Issuer breaches
its obligations or covenants contained in this Section 6.02, in no event shall the initial Servicer or the Issuer be
liable for any liabilities, costs or expenses of the Noteholders or the Note Owners arising under any tax law, including without
limitation federal, state, local or foreign income or excise taxes or any other tax imposed on or measured by income or gross receipts
(or any interest or penalty with respect thereto or arising from a failure to comply therewith).

 

Section 6.03         Final
Payment with Respect to Any Series. The initial Servicer or the Issuer shall provide any notice of termination as specified
for the Issuer in Section 12.5(a) of the Indenture and in accordance with the procedures set forth therein.

 

Section 6.04         Optional
Purchase of Receivables Trust Estate.

 

(a)          The
initial Servicer will have the option to purchase (the “Optional Purchase”) the Receivables Trust Estate (other
than the Reserve Account) for an amount equal to the Optional Purchase Price from the Issuer on any Business Day if, as of the
last day of the previous Monthly Period, the Outstanding Receivables Balance has declined to 10% or less of the Outstanding Receivables
Balance as of the Cut-Off Date. The Optional Purchase Price will not be less than an amount sufficient to pay accrued and unpaid
interest then due on the Series 2018-A Notes and the aggregate unpaid Note Principal, if any, of all of the outstanding Series
2018-A Notes. The fair market value of the Receivables Trust Estate will be calculated based upon a reasonable valuation or appraisal
of the Receivables Trust Estate delivered at least five (5) Business Days prior to any exercise of the Optional Purchase by the
initial Servicer prepared by a nationally recognized third-party appraisal services firm or independent accounting firm in form
and substance satisfactory to the Trustee, which appraisal or other valuation report states (with supporting data and calculations)
the fair market value of the Receivables Trust Estate. To exercise such option, the initial Servicer shall deposit the Optional
Purchase Price into the Collection Account on the Redemption Date. The initial Servicer shall furnish written notice of its election
to exercise the Optional Purchase to the Trustee not later than twenty (20) days prior to the Optional Purchase date. If the initial
Servicer exercises the Optional Purchase, the Notes shall be redeemed and in each case in whole but not in part on the Redemption
Date for the Redemption Price.

 

    	 	29	 

     

    

 

(b)          Upon
exercise of the Optional Purchase, the Class R Notes will receive a final distribution equal to the sum of (i) any excess of the
fair market value of the Receivables on the date on which the Optional Purchase will occur over the accrued and unpaid interest
then due on the Series 2018-A Notes and the aggregate unpaid principal, if any, of all of the outstanding Series 2018-A Notes plus
an amount sufficient to pay (A) the Servicing Fee (including to any successor servicer) for such Payment Date and all unpaid Servicing
Fees with respect to prior Payment Dates and (B) the Trustee, Receivables Trust Trustee, Back-Up Servicer and Issuer Fees and Expenses
for such Payment Date and all unpaid Trustee, Receivables Trust Trustee, Back-Up Servicer and Issuer Fees and Expenses with respect
to prior Payment Dates, after giving effect to the Available Funds (other than any amounts on deposit in the Reserve Account) for
such Payment Date and (ii) any amount on deposit in the Reserve Account on such Payment Date (before giving effect to the applicable
priority of payments on such Payment Date). After such Payment Date, the Class R Noteholders will not be entitled to any additional
distributions.

 

ARTICLE
VII

 

MISCELLANEOUS
PROVISIONS

 

Section 7.01         Amendment.

 

(a)          This
Agreement may be amended in writing from time to time by the Issuer, the Receivables Trust, the Servicer and the Trustee,
without the consent of any of the Noteholders, to cure any ambiguity, to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein, or in the Offering Memorandum, or to add any other provisions with respect to matters
or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement; provided,
that such action, as evidenced to the Trustee by (i) an Opinion of Counsel, (ii) Conn’s Officer Certificate or (iii) satisfaction
of the Rating Agency Condition, shall not adversely affect in any material respect the interests of any Noteholder; provided, further
such action shall not adversely affect in any material respect the interests of the Back-Up Servicer (including as Successor Servicer)
without its prior written consent.

 

(b)          Any
provision of this Agreement may also be amended, supplemented, modified or waived in writing from time to time by the Issuer,
the Receivables Trust, the Servicer and the Trustee with the consent of the Required Noteholders for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of this Agreement or modifying in any manner the rights
of Noteholders of any Series then issued and outstanding; provided, however, that no such amendment, supplement,
modification or waiver shall (i) reduce in any manner the amount of, or delay the timing of, distributions which are required to
be made on any Notes without the consent of each Holder of Notes so affected, (ii) change the definition of or the manner of calculating
the Note Principal without the consent of each Holder of Notes, (iii) reduce the aforesaid percentage required to consent to any
such amendment, without the consent of each Holder of Notes adversely affected, (iv) adversely affect in any material respect
the interests of the Back-Up Servicer (including as Successor Servicer) without its prior written consent. The Trustee may, but
shall not be obligated to, enter into any such amendment which adversely affects the Trustee’s rights, duties or immunities
under this Agreement, the Indenture or otherwise.

 

    	 	30	 

     

    

 

(c)          Promptly
after the execution of any such amendment, the Issuer shall furnish notification of the substance of such amendment to each Rating
Agency.

 

(d)          Notwithstanding
anything herein to the contrary, no amendment to this Agreement shall be effective that would result in or cause (i) the Receivables
Trust or the Issuer to be classified as an association or publicly traded partnership taxable as a corporation, or (ii) the Receivables
Trust to be classified, for United States federal income tax purposes, as other than a fixed investment trust described in Treasury
Regulation Section 301.7701-4(c) that is treated as a grantor trust under Subpart E, Part I of subchapter J, Chapter I of Subtitle
A of the Code.

 

(e)          It
shall not be necessary for the consent of Noteholders under this Section 7.01 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization of the execution thereof by Noteholders shall be subject to such reasonable requirements
as the Trustee may prescribe.

 

(f)          In
connection with any amendment, the Trustee shall be entitled to receive an Opinion of Counsel (from an external law firm) from
the Issuer to the effect that the amendment complies with all requirements of this Agreement and the Indenture, except that such
counsel shall not be required to opine on factual matters.

 

(g)          Any
amendment which affects the rights, duties, immunities or liabilities of the Receivables Trust Trustee shall require the Receivable
Trust Trustee’s written consent.

 

Section 7.02         Protection
of Right, Title and Interest to Receivables and Related Security.

 

(a)          Conn
Appliances or the Issuer (if Conn Appliances is not the Servicer) shall cause this Agreement, the Indenture and the Series Supplement,
all amendments hereto and/or all financing statements and any other necessary documents covering the Noteholders’ and the
Trustee’s right, title and interest to the Trust Estate and the Receivables Trust’s right, title and interest in the
Receivables Trust Estate to be promptly recorded, registered and filed, and at all times to be kept recorded, registered and filed,
all in such manner and in such places as may be required by law fully to preserve and protect the Trustee’s Lien (granted
pursuant to the Indenture for the benefit of the Secured Parties) on the property comprising the Trust Estate and the Receivables
Trust’s interest in the Receivables Trust Estate. Conn Appliances or the Issuer shall deliver to the Trustee file-stamped
copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following
such recording, registration or filing. The Depositor shall cooperate fully with the Conn Appliances or the Issuer, as applicable,
in connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent
of this subsection 7.02(a).

 

    	 	31	 

     

    

 

(b)          The
Servicer will give the Trustee prompt written notice of any relocation of any office from which it services the Receivables and
Related Security or keeps records concerning such items or of its principal executive office and, in the case of the initial Servicer,
prompt written notice of whether, as a result of such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing statement or of any new financing statement and shall file such financing statements
or amendments as may be necessary to continue the Trustee’s security interest in the Trust Estate and the proceeds thereof
for the benefit of the Secured Parties. The Servicer will at all times maintain each office from which it performs custody, collection
and/or customer service obligations with respect to the Receivables, Related Security and other property in its possession and
part of the Trust Estate and its principal executive office within the United States of America.

 

Section 7.03         Governing
Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT
OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. EACH OF THE PARTIES TO THIS SERVICING AGREEMENT HEREBY
AGREES TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE
COURT HAVING JURISDICTION TO REVIEW THE JUDGMENT THEREOF. EACH OF THE PARTIES HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO
THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.

 

Section 7.04         Notices.
All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given if personally
delivered at, sent by facsimile to, sent by courier (overnight or hand-delivered) at or mailed by registered mail, return receipt
requested, to (a) in the case of the Issuer, to 2445 Technology Forest Blvd., Suite 800, The Woodlands, TX, 77381, (b) in the case
of the initial Servicer or Conn Appliances, to 2445 Technology Forest Blvd., Suite 800, The Woodlands, TX, 77381, (c) in the case
of the Trustee, to the Corporate Trust Office, (d) in the case of the Receivables Trust, to c/o Wilmington Trust, National Association,
as Receivables Trust Trustee, Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration – Conn’s Receivables 2018-A Trust and (e) in the case of each Rating Agency, the address specified in
the Series Supplement; or, as to each party, at such other address as shall be designated by such party in a written notice to
each other party. Unless otherwise provided in the Series Supplement or otherwise expressly provided herein, any notice required
or permitted to be mailed to a Noteholder shall be given by first class mail, postage prepaid, at the address of such Noteholder
as shown in the Note Register. Any notice so mailed or published, as the case may be, within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the Noteholder receives such notice.

 

    	 	32	 

     

    

 

Section 7.05         Severability
of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any reason
whatsoever be held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions
of this Agreement.

 

Section 7.06         Delegation.
Except as provided in Section 2.01, 2.02 or 2.14(b), the Servicer may not delegate any of its obligations
under this Agreement.

 

Section 7.07         Waiver
of Trial by Jury. To the extent permitted by applicable law, each of the parties hereto irrevocably waives all right of trial
by jury in any action, proceeding or counterclaim arising out of or in connection with this Agreement or the Transaction Documents
or any matter arising hereunder or thereunder.

 

Section 7.08         Further
Assurances. The Servicer agrees to do and perform, from time to time, any and all acts and to execute any and all further instruments
required or reasonably requested by the Trustee more fully to effect the purposes of this Agreement.

 

Section 7.09         No
Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Trustee, the Issuer, the
Receivables Trust, the Servicer, or the Noteholders, any right, remedy, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law.

 

Section 7.10         Counterparts.
This Agreement may be executed in two or more counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the same instrument.

 

Section 7.11         Third-Party
Beneficiaries. This Agreement will inure to the benefit of and be binding upon the parties hereto, the Secured Parties, the
Receivables Trust Trustee and their respective successors and permitted assigns. Except as provided in this Section 7.11,
no other Person will have any right or obligation hereunder; provided that the Issuer shall have the right to enforce all rights
of the Receivables Trust.

 

    	 	33	 

     

    

 

Section 7.12         Actions
by Noteholders.

 

(a)          Wherever
in this Agreement a provision is made that an action may be taken or a notice, demand or instruction given by Noteholders,
such action, notice or instruction may be taken or given by any Noteholder, unless such provision requires a specific percentage
of Noteholders or unless otherwise provided in the Series Supplement, in each case, as certified by such Noteholder. Notwithstanding
anything in this Agreement to the contrary, neither the Servicer nor any Affiliate thereof shall have any right to vote with respect
to any Note except as specifically provided in the Indenture.

 

(b)          Any
request, demand, authorization, direction, notice, consent, waiver or other act by a Noteholder shall bind such Noteholder and
every subsequent holder of such Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done or omitted to be done by the Trustee or the Servicer in reliance thereon, whether or not notation of
such action is made upon such Note.

 

Section 7.13         Rule
144A Information. For so long as any of the Notes are “restricted securities” within the meaning of Rule 144(a)(3)
under the Securities Act, the Issuer and the Trustee (if such information is in the Trustee’s possession) agree to provide
to any Noteholders and to any prospective purchaser of Notes designated by such a Noteholder upon the request of such Noteholder
or prospective purchaser, any information required to be provided to such holder or prospective purchaser to satisfy the condition
set forth in Rule 144A(d)(4) under the Securities Act, and the Servicer agrees to reasonably cooperate with the Issuer and the
Trustee in connection with the foregoing.

 

Section 7.14         Merger
and Integration. Except as specifically stated otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement.

 

Section 7.15         Headings.
The headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision
hereof.

 

Section 7.16         Rights
of the Trustee. The Trustee shall be entitled to all rights, powers, protection, privileges and immunities conferred on it
by the terms of the Indenture as if specifically set forth herein, and shall not be liable for any loss arising in connection with
the exercise of any such rights, powers, protections, privileges and immunities.

 

Section 7.17         Sales
Tax Proceeds. For the avoidance of doubt, (1) the initial Servicer hereby notifies each of the parties hereto that the Receivables
Trust, the R Noteholders, the Depositor, the Seller and the Issuer are each “assignees” of the right to receive the
Texas bad debt deduction for all applicable defaults as per Section 151.426(c) of the Texas Tax Code and (2) each of the initial
Servicer, the Depositor, the Seller, the Receivables Trust, the Class R Noteholders, the Issuer, and the Retailer of the Merchandise
will cooperate to obtain the Texas bad deduction for the assignees.

 

    	 	34	 

     

    

 

Section 7.18         Limitation
of Liability. It is expressly understood and agreed by the parties hereto that (a) this Agreement is executed and delivered
by Wilmington Trust, National Association (“WTNA”), not individually or personally but solely as Receivables
Trust Trustee of the Receivables Trust, in the exercise of the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the Receivables Trust is made and intended not as personal
representations, undertakings and agreements by WTNA but is made and intended for the purpose of binding only the Receivables Trust,
(c) nothing herein contained shall be construed as creating any liability on WTNA individually or personally, to perform any covenant
either expressed or implied contained herein of the Receivables Trust, all such liability, if any, being expressly waived by the
parties hereto and by any Person claiming by, through or under the parties herein, (d) WTNA has made no investigation as to the
accuracy or completeness of any representations and warranties made by the Receivables Trust in this Agreement and (e) under no
circumstances shall WTNA be personally liable for the payment of any indebtedness or expenses of the Receivables Trust or be liable
for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Receivables Trust under
this Agreement or any other related documents.

 

    	 	35	 

     

    

 

IN WITNESS WHEREOF, the
Issuer, the Servicer and the Trustee have caused this Servicing Agreement to be duly executed by their respective officers as of
the day and year first above written.

 

	 	CONN’S RECEIVABLES FUNDING 2018-A, LLC,
	 	as Issuer
	 	 	 
	 	By:	/s/ Lee A. Wright
	 	Name:	Lee A. Wright
	 	Title:	President
	 	 	 
	 	CONN’S RECEIVABLES 2018-A TRUST,
	 	as Receivables Trust
	 	 
	 	By: Wilmington Trust, National Association, not in its individual capacity but solely as Receivables Trust Trustee
	 	 	 
	 	By:	/s/ Clarice Wright
	 	Name:	Clarice Wright
	 	Title:	Assistant Vice President
	 	 	 
	 	CONN APPLIANCES, INC.,
	 	as Servicer
	 	 	 
	 	By:	/s/ Lee A. Wright
	 	Name:	Lee A. Wright
	 	Title:	Executive Vice President and Chief Financial Officer
	 	 	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION,
	 	not in its individual capacity, but solely as Trustee
	 	 	 
	 	By:	/s/ G. Brad Martin
	 	Name:	G. Brad Martin
	 	Title:	Vice President

 

    	 	S-1	Servicing Agreement

     

    

 

Exhibit A-1

Form of Monthly Servicer Report

 

FORM OF MONTHLY SERVICER REPORT

 

[ATTACHED]

 

    	 	A-1-1	Servicing Agreement

     

    

 

Exhibit A-2

Form of Monthly Noteholders’
Statement

 

FORM OF MONTHLY NOTEHOLDERS’ STATEMENT

 

[ATTACHED]

 

    	 	A-2-1	Servicing Agreement

     

    

 

Exhibit B

Form of Annual Servicer’s Certificate

 

FORM OF ANNUAL SERVICER’S CERTIFICATE

 

CONN APPLIANCES, INC.

 

The undersigned, a
duly authorized representative of Conn Appliances, Inc. (“Conn Appliances”), as Servicer pursuant to the Servicing
Agreement, dated as of August 15, 2018 (the “Servicing Agreement”) by and among Conn Appliances, Conn’s
Receivables Funding 2018-A, LLC, as issuer, Conn’s Receivables 2018-A Trust, Wells Fargo Bank, National Association, as trustee
(the “Trustee”), does hereby certify that:

 

1.          Conn
Appliances is a Servicer under the Servicing Agreement.

 

2.          The
undersigned is duly authorized pursuant to the Servicing Agreement to execute and deliver this certificate to the Trustee.

 

3.          This
certificate is delivered pursuant to Section 2.02(e)(ii) of the Servicing Agreement.

 

4.          A
review of the activities of the Servicer during (the period from the Closing Date until) (the twelve month period ended) _______,
20__ and of its performance under the Servicing Agreement was conducted under my supervision.

 

5.          Based
on such review, the Servicer has, to the best of my knowledge, fully performed in all material respects all of its obligations
under the Servicing Agreement and each other applicable Transaction Document to which it is a party throughout such period and
no default in the performance of such obligations has occurred or is continuing except as set forth in paragraph 6 below.

 

6.          The
following is a description of each default in the performance of the Servicer’s obligations under the provisions of the Servicing
Agreement and each other applicable Transaction Document to which it is a party, known to me to have been made during such period
which sets forth in detail (i) the nature of each such default, (ii) the action taken by the Servicer, if any, to remedy each such
default and (iii) the current status of each such default:

 

[If applicable, insert “None.”]

 

7.          Capitalized
terms used but not defined herein shall have the respective meanings given to such terms in the Servicing Agreement.

 

[signature page follows]

 

    	 	B-1	Servicing Agreement

     

    

 

IN WITNESS WHEREOF, the
undersigned has duly executed this certificate this ___ day of _______, ____.

 

	 	CONN APPLIANCES, INC.,
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

    	 	B-2	Servicing Agreement

     

    

 

Schedule 2.10(i)

Litigation

 

LITIGATION

 

None

 

    Schedule 2.10(i)-1EMPLOYMENT
AGREEMENT

 

This
Employment Agreement (“Agreement”) is effective as of August 20, 2018 (“Effective Date”),
by and between Xtant Medical Holdings, Inc., a Delaware corporation (the “Company”), and Kathie J. Lenzen,
an individual (“Employee”). The Company and Employee are sometimes referred to as the “Parties”
or “Party” in this Agreement, and the Company may designate a subsidiary to be the employer of the Employee.

 

In
consideration of the mutual promises, covenants and agreements contained in this Agreement, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1. EMPLOYMENT
AND DUTIES.

 

A. Job
Title and Responsibilities. The Company hereby employs Employee, and Employee hereby agrees to be employed, as Senior Vice
President, Finance & Administration and Chief Financial Officer (together with such other position or positions consistent
with Employee’s title as the Company’s Chief Executive Officer may specify from time to time), reporting to the Chief
Executive Officer and will have such duties and responsibilities commensurate with such title.

 

B. Full-Time
Best Efforts. Employee agrees to devote Employee’s full professional time and attention to the business of the Company
(and its subsidiaries, affiliates, or related entities) and the performance of Employee’s obligations under this Agreement,
and will at all times faithfully, industriously and to the best of Employee’s ability, experience and talent, perform all
of Employee’s obligations hereunder. Notwithstanding the foregoing, Employee may, subject to the approval of the Company
(i) serve on civil, charitable or non-profit boards or committees, and (ii) manage personal and family investments and affairs,
participate in industry organizations, so long as such service and activity, does not interfere, individually or in the aggregate,
with the performance of her responsibilities hereunder and subject to the Company’s code of conduct and other applicable
policies as in effect from time to time. The Company understands, acknowledges and agrees that Employee serves on the board of
directors of The Community Foundation for Carver County Board and St. Johns LCMS Strategic Planning Committee as of the date of
this Agreement.

 

C. Duty
of Loyalty. Employee acknowledges that during Employee’s employment with the Company, Employee has participated in and
will participate in relationships with existing and prospective clients, customers, partners, suppliers, service providers and
vendors of the Company that are essential elements of the Company’s goodwill. The parties acknowledge that Employee owes
the Company a fiduciary duty to conduct all affairs of the Company in accordance with all applicable laws and the highest standards
of good faith, trust, confidence and candor, and to endeavor, to the best of Employee’s ability, to promote the best interests
of the Company.

 

D. Conflict
of Interest. Employee agrees that while employed by the Company, and except with the advance written consent of the Company’s
Board of Directors (the “Board”), Employee will not enter into, on behalf of the Company, or cause the Company
or any of its affiliates to enter into, directly or indirectly, any transactions with any business organization in which Employee
or any member of Employee’s immediate family may be interested as a shareholder, partner, member, trustee, director, officer,
employee, consultant, lender or guarantor or otherwise; provided, however, that nothing in this Agreement shall
restrict transactions between the Company and any company whose stock is listed on a national securities exchange or actively
traded in the over-the-counter market and over which Employee does not have the ability to control or significantly influence
policy decisions.

 

     

     

    

 

2. COMPENSATION.

 

A. Base
Pay. The Company agrees to pay Employee gross annual compensation of $320,000 (“Base Salary”), less usual
and customary withholdings, which shall be payable in arrears in accordance with the Company’s customary payroll practices.
The Base Salary will be subject to normal periodic review, and such review will consider Employee’s contributions to the
Company and the Company’s overall performance.

 

B. Bonus
and Incentive Compensation. Employee shall be eligible for bonus and incentive based compensation approved by the Board (or
a committee thereof) from time to time. The target annual bonus compensation will be 30% of Employee’s Base Salary, except
that for the 2018 calendar year, Employee shall only be eligible to receive a pro-rated bonus, with such proration based on Employee’s
start date, which bonus shall be contingent upon the achievement of performance objectives as established by the Board (or a committee
thereof) and communicated to Employee. Such bonus and incentive compensation shall be less all tax withholdings and other applicable
deductions the Company reasonably determines are required to be made. Except as otherwise provided in this Agreement, with respect
to the annual bonus compensation, Employee must remain continuously employed by the Company through the date such bonus compensation
is paid to be eligible to receive it and shall be paid no later than March 15 of the calendar year immediately following the calendar
year in which the bonus is being measured.

 

C. Equity
Award. Effective as of September 15, 2018, Employee shall be granted a Non-Statutory Stock Option (the “Option”),
as defined in the Xtant Medical Holdings, Inc. 2018 Equity Incentive Plan (the “Plan”), to purchase 130,000
shares of Common Stock (as defined in the Plan) at a per share exercise price equal to 100% of the Fair Market Value (as defined
in the Plan) of a share of Common Stock on September 15, 2018. The Option (i) shall have a term of ten (10) years from the Grant
Date; (ii) shall vest with respect to 25% of the shares of Common Stock purchasable thereunder on each of the one-year, two-year,
three-year and four-year anniversaries of the Grant Date, contingent upon Employee having continuously served as an employee of
the Company or one of its subsidiaries from the Grant Date until the respective vesting date; (iii) shall be subject to all of
the terms and conditions of the Plan; and (iv) shall be evidenced by an appropriate individual award agreement, in substantially
the form as previously approved by the Board. Employee will be eligible for another equity grant in 2020, subject to the Board’s
approval.

 

D. Benefits.
During Employee’s employment, Employee will be eligible to participate in the Company’s benefit programs, as summarized
and as governed by any plan documents concerning such benefits. Employee acknowledges that the Company may amend, modify or terminate
any of its benefit plans or programs at any time and for any reason. Employee will be eligible for 20 days of paid vacation per
year, subject to the Company’s carryover policy for unused vacation in effect from time to time. The Company will also provide
Employee with a $250,000 term life insurance policy during Employee’s employment.

 

E. Clawback.
Employee agrees that any compensation or benefits provided by the Company under this Agreement or otherwise will be subject to
recoupment or clawback by the Company under any applicable clawback or recoupment policy of the Company as may be in effect from
time-to-time or as required by applicable law, regulation or stock exchange listing requirement.

 

3. CONFIDENTIAL
INFORMATION.

 

A. Employee
understands that during Employee’s employment relationship with the Company, the Company intends to provide Employee with
information, including Confidential Information (as defined herein), without which Employee would not be able to perform Employee’s
duties to the Company. Employee agrees, at all times during the term of Employee’s employment relationship and thereafter,
to hold in strictest confidence, and not to use or disclose, except for the benefit of the Company to the extent necessary to
perform Employee’s obligations to the Company, any Confidential Information that Employee obtains, accesses or creates during
the term of the relationship, whether or not during working hours, until such Confidential Information becomes publicly and widely
known and made generally available through no wrongful act of Employee or of others under confidentiality obligations as to the
information involved. Employee understands that “Confidential Information” means information and physical material
not generally known or available outside the Company and information and physical material entrusted to the Company by third parties
under an obligation of non-disclosure or non-use or both. “Confidential Information” includes, without limitation,
inventions, technical data, trade secrets, clinical data, regulatory information and strategies, marketing ideas or plans, research,
product or service ideas or plans, business strategies, investments, investment opportunities, potential investments, market studies,
industry studies, historical financial data, financial information and results, budgets, identity of customers, forecasts (financial
or otherwise), possible or pending transactions, customer lists and domain names, price lists, and pricing methodologies.

 

    	2

    	 

    

 

B. At
all times, both during Employee’s employment and after its termination, Employee will keep and hold all such Confidential
Information in strict confidence and trust. Employee will not use or disclose any Confidential Information without the prior written
consent of the Company, except as may be necessary to perform Employee’s duties as an employee of the Company for the benefit
of the Company. Employee may disclose information that Employee is required to disclose by valid order of a government agency
or court of competent jurisdiction, provided that Employee will:

 

1. Notify
the Company in writing immediately upon learning that such an order may be sought or issued,

 

2. Cooperate
with the Company as reasonably requested if the Company seeks to contest such order or to place protective restrictions on the
disclosure pursuant to such order, and

 

3. Comply
with any protective restrictions in such order, and disclose only the information specified in the order.

 

C. Upon
termination of employment with the Company, Employee will promptly deliver to the Company all documents and materials of any nature
pertaining to Employee’s work with the Company.

 

D. Employee
agrees not to infringe the copyrights of the Company, its customers or third parties (including, without limitation, Employee’s
previous employer, customers, etc.) by unauthorized or unlawful copying, modifying or distributing of copyrighted material, including
plans, drawings, reports, financial analyses, market studies, computer software and the like.

 

4. COVENANT
NOT TO COMPETE.

 

A. Non-competition
Covenant. Employee agrees that during the Restricted Period (as defined below), without the prior written consent of the Company,
Employee shall not, directly or indirectly within the Territory (as defined below): (i) personally, by agency, as an employee,
independent contractor, consultant, officer, director, manager, agent, associate, investor (other than as a passive investor holding
less than five percent of the outstanding equity of an entity), or by any other artifice or device, engage in any Competitive
Business (as defined below), (ii) assist others, including but not limited to employees of the Company, to engage in any Competitive
Business, or (iii) own, purchase, finance, organize or take preparatory steps to own, purchase, finance, or organize a Competitive
Business. Notwithstanding the foregoing, nothing herein or otherwise will prohibit Employee following termination of her employment
from providing services to, holding an equity interest in, or receiving compensation from (i) any division, affiliate or subsidiary
of a Competitive Business or (ii) any private equity or hedge fund which owns or has an investment in a Competitive Business,
as long as Employee, in each case, is not providing services directly to the Competitive Business.

 

    	3

    	 

    

 

B. Definitions.

 

1. “Competitive
Business” means (i) any person, entity or organization which is engaged in or about to become engaged in research on
consulting regarding, or development, production, marketing or selling of any product, process, technology, device, invention
or service which resembles, competes with or is intended to resemble or compete with a product, process, technology, device, invention
or service under research or development or being promoted, marketed, sold or serviced by the Company or any subsidiary; or (ii)
any other line of business that was conducted by the Company or any subsidiary or that Employee knows or should reasonably know
is actively preparing to pursue at any time during the term of Employee’s employment with the Company.

 

2. “Territory”
means the United States of America.

 

3. “Restricted
Period” means the period of Employee’s employment with the Company and for a period of twelve (12) months following
the termination of Employee’s employment.

 

5. NON-SOLICITATION
AND NON-INTERFERENCE COVENANTS.

 

A. Non-solicitation
of Employees and Others. During the Restricted Period, (i) Employee shall not, directly or indirectly, solicit, recruit, or
induce, or attempt to solicit, recruit or induce any employee, consultant, independent contractor, vendor, supplier, or agent
to terminate or otherwise adversely affect her employment or other business relationship (or prospective employment or business
relationship) with the Company, and (ii) Employee shall not, directly or indirectly, solicit, recruit, or induce, or attempt to
solicit, recruit or induce any employee to work for Employee or any other person or entity, other than the Company or its affiliates
or related entities. Notwithstanding the foregoing, the Company understands, acknowledges and agrees that the mere solicitation
by Employee on behalf of herself or a new employer or agent of business from a vendor or supplier of the Company during the Restricted
Period would not violate this Section 5.A.

 

B. Non-solicitation
of Customers. During the Restricted Period, Employee shall not, directly or indirectly, solicit, recruit, or induce any Customer
(as defined below) for the purpose of (i) providing any goods or services related to a Competitive Business, or (ii) interfering
with or otherwise adversely affecting the contracts or relationships, or prospective contracts or relationships, between the Company
(including any related or affiliated entities) and such Customers. “Customer” means a person or entity with
which Employee had contact or about whom Employee gained information while an Employee of the Company, and to which the Company
was selling or providing products or services, was in active negotiations for the sale of its products or services, or was otherwise
doing business as of the date of the cessation of Employee’s employment with the Company or for whom the Company had otherwise
done business within the twelve (12) month period immediately preceding the cessation of Employee’s employment with the
Company.

 

6. ACKNOWLEDGEMENTS.
Employee acknowledges and agrees that:

 

A. The
geographic and duration restrictions contained in Paragraphs 4 and 5 of this Agreement are fair, reasonable, and necessary to
protect the Company’s legitimate business interests and trade secrets, given the geographic scope of the Company’s
business operations, the competitive nature of the Company’s business, and the nature of Employee’s position with
the Company;

 

    	4

    	 

    

 

B. Employee’s
employment creates a relationship of confidence and trust between Employee and the Company with respect to the Confidential Information,
and Employee will have access to Confidential Information (including but not limited to trade secrets) that would be valuable
or useful to the Company’s competitors;

 

C. The
Company’s Confidential Information is a valuable asset of the Company, and any violation of the restrictions set forth in
this Agreement would cause substantial injury to the Company;

 

D. The
restrictions contained in this Agreement will not unreasonably impair or infringe upon Employee’s right to work or earn
a living after Employee’s employment with the Company ends; and

 

E. This
Agreement is a contract for the protection of trade secrets under applicable law and is intended to protect the Confidential Information
(including trade secrets) identified above.

 

7. “BLUE
PENCIL” AND SEVERABILITY PROVISION. If a court of competent jurisdiction declares any provision of this Agreement invalid,
void, voidable, or unenforceable, the court shall reform such provision(s) to render the provision(s) enforceable, but only to
the extent absolutely necessary to render the provision(s) enforceable and only in view of the parties’ express desire that
the Company be protected to the greatest possible extent under applicable law from improper competition and the misuse or disclosure
of trade secrets and Confidential Information. To the extent such a provision (or portion thereof) may not be reformed so as to
make it enforceable, it may be severed and the remaining provisions shall remain fully enforceable.

 

8. INVENTIONS.

 

A. Inventions
Retained and Licensed. Attached as Exhibit A is a list describing all inventions and information created, discovered or developed
by Employee, whether or not patentable or registrable under patent, copyright or similar statutes, made or conceived or reduced
to practice or learned by Employee, either alone or with others before Employee’s employment with the Company (“Prior
Inventions”), which belong in whole or in part to Employee, and which are not being assigned by Employee to the Company.
Employee represents that Exhibit A is complete and contains no confidential or Confidential information belonging to a person
or entity other than Employee. Employee acknowledges and agrees that Employee has no rights in any Inventions (as that term is
defined below) other than the Prior Inventions listed on Exhibit A. If there is nothing identified on Exhibit A, Employee represents
that there are no Prior Inventions as of the time of signing this Agreement. Employee shall not incorporate, or permit to be incorporated,
any Prior Invention owned by Employee or in which she has an interest in a Company product, process or machine without the Company’s
prior written consent. Notwithstanding the foregoing, if, in the course of Employee’s employment with the Company, Employee
directly or indirectly incorporates into a Company product, process or machine a Prior Invention owned by Employee or in which
Employee has an interest, the Company is hereby granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual,
world-wide license to make, have made, modify, use, create derivative works from and sell such Prior Invention as part of or in
connection with such product, process or machine.

 

B. Assignment
of Inventions. Employee shall promptly make full, written disclosure to the Company, will hold in trust for the sole right
and benefit of the Company, and hereby irrevocably transfers and assigns, and agrees to transfer and assign, to the Company, or
its designee, all her rights, title and interest in and to any and all inventions, original works of authorship, developments,
concepts, improvements, designs, discoveries, ideas, trademarks (and all associated goodwill), mask works, or trade secrets, whether
or not they may be patented or registered under copyright or similar laws, which Employee may solely or jointly conceive or develop
or reduce to practice, or cause to be conceived or developed or reduced to practice, during Employee’s employment by the
Company (the “Inventions”). Employee further acknowledges that all original works of authorship which are made
by Employee (solely or jointly with others) within the scope of and during the period of her employment with the Company and which
may be protected by copyright are “Works Made For Hire” as that term is defined by the United States Copyright
Act. Employee understands and agrees that the decision whether to commercialize or market any Invention developed by Employee
solely or jointly with others is within the Company’s sole discretion and the Company’s sole benefit and that no royalty
will be due to Employee as a result of the Company’s efforts to commercialize or market any such invention.

 

    	5

    	 

    

 

Employee
recognizes that Inventions relating to her activities while working for the Company and conceived or made by Employee, whether
alone or with others, within one (1) year after cessation of Employee’s employment, may have been conceived in significant
part while employed by the Company. Accordingly, Employee acknowledges and agrees that such Inventions shall be presumed to have
been conceived during Employee’s employment with the Company and are to be, and hereby are, assigned to the Company unless
and until Employee has established the contrary.

 

The
requirements of this Paragraph 8B do not apply to any intellectual property for which no equipment, supplies, facility or trade
secret information of the Company was used, and which was developed entirely on the Employee’s own time, and (i) which does
not relate (x) directly to the Company’s business or (y) to the Company’s actual or demonstrably anticipated research
and development or (ii) which does not result from any work the Employee performed for the Company.

 

C. Maintenance
of Records. Employee agrees to keep and maintain adequate and current written records of all Inventions made by Employee (solely
or jointly with others) during her employment with the Company. The records will be in the form of notes, sketches, drawings and
any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company
at all times.

 

D. Patent,
Trademark and Copyright Registrations. Employee agrees to assist the Company, or its designee, at the Company’s expense,
in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, trademarks, service marks,
mask works, or any other intellectual property rights in any and all countries relating thereto, including, but not limited to,
the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications,
oaths, assignments and all other instruments the Company reasonably deems necessary in order to apply for and obtain such rights
and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title,
and interest in and to such inventions, and any copyrights, patents, trademarks, service marks, mask works, or any other intellectual
property rights relating thereto. Employee further agrees that her obligation to execute or cause to be executed, when it is in
her power to do so, any such instrument or paper shall continue after termination or expiration of this Agreement or the cessation
of her employment with the Company. If the Company is unable because of Employee’s mental or physical incapacity or for
any other reason, after reasonably diligent efforts, to secure Employee’s signature to apply for or to pursue any application
for any United States or foreign patents, trademarks or copyright registrations covering inventions or original works of authorship
assigned to the Company as above, then Employee hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as Employee’s agent and attorney-in-fact to act for and in her behalf and stead to execute and file
any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent, trademarks
or copyright registrations thereon with the same legal force and effect as if executed by Employee; this power of attorney shall
be a durable power of attorney which shall come into existence upon Employee’s mental or physical incapacity.

 

    	6

    	 

    

 

9. SURVIVAL
AND REMEDIES. Employee’s obligations of nondisclosure, non-solicitation, non-interference, and non-competition under
this Agreement shall survive the cessation of Employee’s employment with the Company and shall remain enforceable. In addition,
Employee acknowledges that upon a breach or threatened breach of any obligation of nondisclosure, non-solicitation, non-interference,
or noncompetition of this Agreement, the Company may suffer irreparable harm and damage for which money alone cannot fully compensate
the Company. Employee therefore agrees that upon such breach or threat of imminent breach of any such obligation, the Company
shall be entitled to seek a temporary restraining order, preliminary injunction, permanent injunction or other injunctive relief,
without posting any bond or other security, barring Employee from violating any such provision. This Paragraph shall not be construed
as an election of any remedy, or as a waiver of any right available to the Company under this Agreement or the law, including
the right to seek damages from Employee for a breach of any provision of this Agreement and the right to require Employee to account
for and pay over to the Company all profits or other benefits derived or received by Employee as the result of such a breach,
nor shall this Paragraph be construed to limit the rights or remedies available under state law for any violation of any provision
of this Agreement.

 

10. RETURN
OF COMPANY PROPERTY. All devices, records, reports, data, notes, compilations, lists, proposals, correspondence, specifications,
equipment, drawings, blueprints, manuals, DayTimers, planners, calendars, schedules, discs, data tapes, financial plans and information,
or other recorded matter, whether in hard copy, magnetic media or otherwise (including all copies or reproductions made or maintained,
whether on the Company’s premises or otherwise), pertaining to Employee’s work for the Company, or relating to the
Company or the Company’s Confidential Information, whether created or developed by Employee alone or jointly during her
employment with the Company, are the exclusive property of the Company. Employee shall surrender the same (as well as any other
property of the Company) to the Company upon its request or promptly upon the cessation of employment. Upon cessation of Employee’s
employment, Employee agrees to sign and deliver the “Termination Certificate” attached as Exhibit B,
which shall detail all Company property that is surrendered upon cessation of employment.

 

11. NO
CONFLICTING AGREEMENTS OR IMPROPER USE OF THIRD-PARTY INFORMATION. During her employment with the Company, Employee shall
not improperly use or disclose any Confidential information or trade secrets of any former employer or other person or entity,
and Employee shall not bring on to the premises of the Company any unpublished document or Confidential information belonging
to any such former employer, person or entity, unless consented to in writing by the former employer, person or entity. Employee
represents that she has not improperly used or disclosed any Confidential information or trade secrets of any other person or
entity during the application process or while employed or affiliated with the Company. Employee also acknowledges and agrees
that she is not subject to any contract, agreement, or understanding that would prevent Employee from performing her duties for
the Company or otherwise complying with this Agreement. Notwithstanding the foregoing, the Company understands, acknowledges and
agrees that Employee has certain continuing obligations to her former employer as described to the Company prior to the date of
this Agreement. To the extent Employee violates this provision, or her employment with the Company constitutes a breach or threatened
breach of any contract, agreement, or obligation to any third party, Employee shall indemnify and hold the Company harmless from
all damages, expenses, costs (including reasonable attorneys’ fees) and liabilities incurred in connection with, or resulting
from, any such violation or threatened violation.

 

    	7

    	 

    

 

12. TERMINATION.

 

A. By
Either Party. Either Party may terminate the Employee’s at-will employment at any time with or without notice, and with
or without cause. Except as provided in this Paragraph 12, upon termination of employment, Employee shall only be entitled to
Employee’s accrued but unpaid Base Salary and other benefits earned under any Company-provided plans, policies and arrangements
for the period preceding the effective date of the termination of employment.

 

B. Termination
Without Cause. If the Company terminates Employee’s employment without Cause (defined below), Employee shall be entitled
to receive continuing severance pay at a rate equal to Employee’s Base Salary, as then in effect, for six (6) months from
the date of termination of employment, less all required tax withholdings and other applicable deductions, payable in accordance
with the Company’s standard payroll procedures, commencing on the effective date of a Separation Agreement and Release of
claims against the Company that has not been revoked, in substantially the form of Exhibit C attached hereto, the timely
execution and performance by Employee of which is specifically a condition to her receipt of any of the payments and benefits
provided under this Paragraph 12B; provided that (1) such Separation Agreement and Release shall be executed and be fully
effective within seventy (70) days of the Employee’s termination of employment; (2) the first payment shall include any
amounts that would have been paid to Employee if payment had commenced on the date of termination of employment; and (3) Employee
shall not be required to execute a release of any claims arising from the Company’s failure to comply with its obligations
under Paragraph 12A. If Employee timely and effectively elects continuation coverage under the Company’s group health plan
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or similar state law, the
Company will pay or reimburse the premiums for such coverage of Employee (and her dependents, as applicable) at the same rate
it pays for active employees for a period for twelve (12) months from the date of termination of employment; provided that
the Company’s obligation to make such payments shall immediately expire if Employee ceases to be eligible for continuation
coverage under COBRA or similar state law or otherwise terminates such coverage. Notwithstanding the foregoing, any of the foregoing
payments due under this Paragraph 12B shall commence within seventy (60) days of Employee's termination of employment, provided
that if such seventy (70)-day period spans two (2) calendar years, payments shall commence in the latter calendar year. In
addition to the foregoing and subject to Employee’s execution of a Separation Agreement and Release of claims against the
Company that has been executed and not revoked within any applicable rescission period that has expired within seventy (70) days
of the Employee’s termination of employment, Employee shall be entitled to the pro-rated amount of any unpaid bonus for
the calendar year in which her termination of employment occurs, if earned pursuant to the terms thereof (except for the provision
of remaining an employee through the date of payment thereof) and at such time and in such manner as determined by the Board (or
a committee thereof) in its sole discretion pursuant to the terms thereof, less any payments thereof already made during such
year.

 

C. Termination
Upon a Change in Control. If the Company or any successor in interest to the Company terminates Employee’s employment
without Cause in connection with or within twelve (12) months after a Change in Control (defined below) or if Employee terminates
her employment for Good Reason (defined below) within twelve (12) months after a Change in Control, Employee shall be entitled
to receive (i) her accrued but unpaid Base Salary and other benefits earned under any Company-provided plans, policies and arrangements
for the period preceding the effective date of the termination of employment, and (ii) a lump-sum payment equal to one times Employee’s
Base Salary, as then in effect, less all tax withholdings and other applicable deductions the Company reasonably determines are
required to be made, payable on the first regular payroll date after the effective date of a Separation Agreement and Release
that has been executed and not revoked within any applicable rescission period that has expired within seventy (70) days of the
Employee’s termination of employment, in substantially the form of Exhibit C attached hereto, the execution and performance
by Employee of which is specifically a condition to her receipt of any of the payments and benefits provided under this Paragraph
12C; provided that Employee shall not be required to execute a release of any claims arising from the Company’s failure
to comply with its obligations under Paragraph 12A. If Employee timely and effectively elects continuation coverage under the
Company’s group health plan pursuant to COBRA or similar state law, the Company will pay or reimburse the premiums for such
coverage of Employee (and her dependents, as applicable) at the same rate it pays for active employees for a period for twelve
(12) months from the date of termination of employment; provided that the Company’s obligation to make such payments
shall immediately expire if Employee ceases to be eligible for continuation coverage under COBRA or similar state law or otherwise
terminates such coverage. Notwithstanding the previous provisions of this Paragraph 12C, any payments due under this Paragraph
12C shall commence within seventy (70) days of Employee's termination of employment, provided that if such seventy (70)-day
period spans two calendar years, payments shall commence in the latter calendar year. In addition to the foregoing and subject
to Employee’s timely execution of a Separation Agreement and Release that has been executed and not revoked within any applicable
rescission period that has expired within seventy (70) days of the Employee’s termination of employment, Employee shall
be entitled to the pro-rated amount of any unpaid bonus for the calendar year in which her termination of employment occurs, if
earned pursuant to the terms thereof and at such time and in such manner as determined by the Board (or a committee thereof) in
its sole discretion (but consistent with other bonuses determined by the Board) pursuant to the terms thereof, less any payments
thereof already made during such year. The payments and benefits described in this Paragraph 12C are in lieu of, and not in addition
to, the payments and benefits described in Paragraph 12B, it being understood by Employee that she shall be paid and receive only
one set of severance payments and benefits.

 

    	8

    	 

    

 

D. Termination
for Cause, Death or Disability, or Resignation. If Employee’s employment with the Company terminates voluntarily by
Employee other than for Good Reason pursuant to Paragraph 12C above, for Cause by the Company or due to Employee’s death
or disability, then payments of compensation by the Company to Employee hereunder will terminate immediately (except as to amounts
already earned).

 

E. Definitions.

 

1. “Cause.”
For all purposes under this Agreement, “Cause” is defined as (i) gross negligence or willful failure to perform
Employee’s duties and responsibilities to the Company; (ii) commission of any act of fraud, theft, embezzlement, financial
dishonesty or any other willful misconduct that has caused or is reasonably expected to result in injury to the Company; (iii)
conviction of, or pleading guilty or nolo contendere to, any felony or a lesser crime involving dishonesty or moral turpitude;
or (iv) material breach by Employee of any of her obligations under this Agreement or any written agreement or covenant with the
Company, including the policies adopted from time to time by the Company applicable to all employees, that has not been cured
within thirty (30) days of notice of such breach.

 

2. “Good
Reason.” For all purposes under this Agreement, “Good Reason” is defined as Employee’s resignation
within thirty (30) days following the expiration of any Company cure period (discussed below) following the occurrence of one
or more of the following, without Employee’s express written consent: (i) a material reduction of Employee’s duties,
authority, reporting level, or responsibilities, relative to Employee’s duties, authority, reporting level, or responsibilities
in effect immediately prior to such Change in Control; (ii) a material reduction in Employee’s base compensation; or (iii)
the Company’s requiring of Employee to change the principal location at which Employee is to perform her services by more
than fifty (50) miles. Employee will not resign for Good Reason without first providing the Company with written notice within
thirty (30) days of the initial occurrence of the event that Employee believes constitutes “Good Reason” specifically
identifying the acts or omissions constituting the grounds for Good Reason and a reasonable cure period of not less than thirty
(30) days following the date of such notice during which such condition shall not have been cured.

 

    	9

    	 

    

 

3. “Change
in Control.” For all purposes under this Agreement, a “Change in Control” of the Company is as defined
in the Plan; provided, that a liquidation, dissolution or winding up of the Company or change in the state of the Company’s
incorporation shall not constitute a Change in Control event for purposes of this Agreement.

 

F. No
Other Benefits. In the event of a termination of Employee’s employment with the Company, the provisions of this Paragraph
12 are Employee’s exclusive right to severance benefits and are in lieu of participation in any other severance policy or
plan to which Employee might otherwise be entitled.

 

G. Termination
from any Offices Held. Upon her termination of employment with the Company, Employee agrees that and any and all offices held,
if applicable, shall be automatically terminated. Employee agrees to cooperate with the Company and execute any documents reasonably
required by the Company or competent authorities to effect this provision.

 

13. GENERAL
PROVISIONS.

 

A. Governing
Law; Consent To Personal Jurisdiction. The laws of the State of Minnesota shall govern the Employee’s employment and
this Agreement without regard to conflict of laws principles. Employee and the Company each hereby consents to the personal jurisdiction
of the state courts located in Hennepin County, State of Minnesota, and the federal district court sitting in Hennepin County,
State of Minnesota, if that court otherwise possesses jurisdiction over the matter, for any legal proceeding concerning Employee’s
employment or termination of employment, or arising from or related to this Agreement or any other agreement executed between
Employee and the Company.

 

B. Entire
Agreement. This Agreement, together with the Exhibits hereto, sets forth this entire Agreement between the Company (and any
of its related or affiliated entities, officers, agents, owners or representatives) and Employee relating to the subject matter
herein, and supersedes any and all prior discussions and agreements, whether written or oral, on the subject matter hereof, including
without limitation that certain Employment Offer Letter and Term Sheet dated July 9, 2018 provided to Employee by the Company
prior to the commencement of her employment with the Company and accepted by Employee on July 15, 2018. To the extent that this
Agreement may conflict with the terms of another written agreement between Employee and the Company, the terms of this Agreement
will control.

 

C. Modification.
No modification of or amendment to this Agreement will be effective unless in writing and signed by Employee and an authorized
representative of the Company.

 

D. Waiver.
The Company’s failure to enforce any provision of this Agreement shall not act as a waiver of its ability to enforce that
provision or any other provision. The Company’s failure to enforce any breach of this Agreement shall not act as a waiver
of that breach or any future breach. No waiver of any of the Company’s rights under this Agreement will be effective unless
in writing. Any such written waiver shall not be deemed a continuing waiver unless specifically stated, and shall operate only
as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to
any act other than that specifically waived.

 

    	10

    	 

    

 

E. Successors
and Assigns. This Agreement shall be assignable to, and shall inure to the benefit of and bind, the Company’s, affiliates,
subsidiaries, successors and assigns. Employee shall not have the right to assign her rights or obligations under this Agreement.

 

F. Construction.
The language used in this Agreement will be deemed to be language chosen by Employee and the Company to express their mutual intent,
and no rules of strict construction will be applied against either Party.

 

G. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be enforceable, and all of which together shall
constitute one agreement. Signatures of the parties that are transmitted in person or by facsimile or e-mail shall be accepted
as originals.

 

H. Further
Assurances. Employee agrees to execute any proper oath or verify any document required to carry out the terms of this Agreement.

 

I. Title
and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded
in interpreting or construing this Agreement.

 

J. Notices.
All notices and communications that are required or permitted to be given under this Agreement shall be in writing and shall be
sufficient in all respects if given and delivered in person, by electronic mail, by facsimile, by overnight courier, or by certified
mail, postage prepaid, return receipt requested, to the receiving Party at such Party’s address shown in the signature blocks
below or to such other address as such Party may have given to the other by notice pursuant to this Paragraph. Notice shall be
deemed given (i) on the date of delivery in the case of personal delivery, electronic mail or facsimile, or (ii) on the delivery
or refusal date as specified on the return receipt in the case of certified mail or on the tracking report in the case of overnight
courier.

 

K. Section
409A. The amounts payable under this Agreement are intended to be exempt from the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (“Section 409A”). Any payments due under this Agreement on account of a termination
of employment shall only be payable if the termination constitutes a “separation from service” within the meaning
of Section 409A. To the extent that any such payments are determined to be subject to Section 409A, (i) the terms of this Agreement
shall be interpreted to avoid incurring any penalties under Section 409A, (ii) any right to a series of installment payments is
to be treated as a right to a series of separate payments, and (iii) any payments due to a “specified employee” of
a publicly-traded company upon a separation from service shall be delayed until the first day of the seventh month following such
separation from service. Notwithstanding the foregoing, in no event shall the Company be responsible for any taxes or penalties
due under Section 409A.

 

14. EMPLOYEE’S
ACKNOWLEDGMENTS. Employee acknowledges that she is executing this Agreement voluntarily and without duress or undue influence
by the Company or anyone else and that Employee has carefully read this Agreement and fully understands the terms, consequences,
and binding effect of this Agreement.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK.]

 

    	11

    	 

    

 

IN
WITNESS WHEREOF, and intending to be legally bound, the Parties have executed this Employment Agreement as of the date first written
above.

 

	EMPLOYEE	 	XTANT
    MEDICAL HOLDINGS, INC.
	 	 	 	 
	Print
    Name:	Kathie
    J. Lenzen	 	/s/
    Carl D. O’Connell
	 	 	 	 
	Signature:	/s/
    Kathie J. Lenzen	 	Carl
    D. O’Connell
	 	 	 	 
	Date: Aug. 20, 2018	 	Chief
    Executive Officer
	 	 	 
	Address:
    1413 Fairway Court, Chaska, MN 55318	 	Date:
    August 20, 2018

 

	Phone:
    	 	 	 
	 	 	 	 
	Email:	 	 	 

 

    	12

    	 

    

 

EXHIBIT
A

LIST
OF PRIOR INVENTIONS AND ORIGINAL WORKS OF AUTHORSHIP

 

IS
A LIST ATTACHED? (PLEASE CHECK): _____YES _____NO

 

NOTE:
The following is a list of all Prior Inventions made, conceived, developed or reduced to practice by Employee prior to her employment
with the Company.

 

IF
NO SUCH LIST IS ATTACHED, THAT MEANS EMPLOYEE IS NOT ASSERTING THE EXISTENCE OF ANY PRIOR INVENTIONS.

 

    	13

    	 

    

 

EXHIBIT
B

 

TERMINATION
CERTIFICATE

 

I
hereby represent and certify that I have in all material respects complied with my obligations to the Company under the Employment
Agreement between the Company and me to which the form of this Certificate is attached as Exhibit B.

 

I
also represent that on or before my last day, I have specifically returned the following items:

 

	 	[  ]	Computer/laptop
	 	 	 
	 	[  ]	Keys/access
    cards
	 	 	 
	 	[  ]	Company
    credit card
	 	 	 
	 	[  ]	Other
equipment (please list) ____________________________________________
	 	________________________________________________________________________

 

    	14

    	 

    

 

EXHIBIT
C

 

FORM
OF SEPARATION AGREEMENT AND RELEASE

 

This
Separation Agreement (“Agreement”) and the Release, which is attached and incorporated by reference as Exhibit
A (“Release”), are made by and between Kathie J. Lenzen (“Employee”), and Xtant Medical
Holdings, Inc., its affiliates, related or predecessor corporations, subsidiaries, successors and assigns (“Employer”).

 

Employer
and Employee (collectively, “Parties”) wish to end their employment relationship in an honorable, dignified
and orderly fashion. Toward that end, the Parties have agreed to separate according to the following terms.

 

IN
CONSIDERATION OF THIS AGREEMENT, THE PARTIES AGREE AS FOLLOWS:

 

1.
Termination. Employee’s employment shall end on a date and time Employer shall determine (“Termination Date”).

 

2.
Consideration. Employer shall, (1) after receipt of a fully executed Agreement and Release; (2) after expiration of all
applicable rescission periods; and (3) provided Employee complies with her obligations under this Agreement, provide Employee
with separation benefits (“Consideration”) in compliance with Employee’s Employment Agreement (“Exhibit
B”):

 

3.
Termination of Benefits. Except as otherwise provided by this Agreement, Employee’s participation in Employer’s
employee benefits, bonus, and all other compensation or commission plans, will terminate on the Termination Date, unless otherwise
provided by law, or benefit plan. Employee shall receive no compensation or benefits under such plans, except as specifically
provided in Section 2 of this Agreement.

 

4.
Execution of Agreement and Release of all Claims. Employee agrees to fully execute this Agreement, and the Release attached
as Exhibit A, releasing any and all actual or potential claims which may have arisen at any time during her employment with or
termination from employment with Employer. Employee’s failure to execute this Agreement and/or Release, or any attempt to
rescind this Agreement or that Release, shall terminate this Agreement, and the Parties’ respective rights and obligations
under this Agreement.

 

5.
Satisfactory Performance and Cooperation During Transition. Employee shall fully cooperate with Employer in responding
to questions, providing assistance and information, and defending against claims of any type, and will otherwise assist Employer
as Employer may request through Employee’s Termination Date (“Transition Period”). More specifically:

 

(a)
During the Transition Period, Employee shall reasonably cooperate with Employer as it meets and otherwise communicates/works,
with Employer’s employees, customers, strategic relationships, consultants, and vendors on the transition of Employee’s
duties to other individuals. Employee shall be available, upon reasonable notice, during business hours to respond to Employer’s
questions and electronic communications. Employer shall reimburse Employee for Employee’s reasonable out-of-pocket expenses
(such reimbursement shall not include compensation for any such time or Employee’s attorney’s fees) incurred in accordance
with this paragraph upon submission of receipts to Employer for such expenses.

 

	 	 	 
	 	 	EMPLOYEE
                           INITIALS

 

    	 

    	 

    

 

(b)
Employee shall not, absent Employer’s specific approval, initiate any form of communication with Employer’s employees,
customers or strategic partners regarding Employer, Employer’s products or Employees, and shall communicate with such persons
in the above capacity only in conjunction with person(s) who Employer has designated to participate in such communications.

 

6.
Stipulation of No Charges. Employee affirmatively represents that she has not filed nor caused to be filed any charges,
claims, complaints, or actions against Employer before any federal, state, or local administrative agency, court, or other forum.
Except as expressly provided in this Agreement or required by law, Employee acknowledges and agrees that she has been paid all
wages, bonuses, compensation, benefits and other amounts that are due, with the exception of any vested right under the terms
of a written ERISA-qualified benefit plan. Employee waives any right to any form of recovery or compensation from any legal action,
excluding any action claiming this Agreement and Release violate the Age Discrimination in Employment Act (“ADEA”)
and/or the Older Workers Benefit Protection Act (“OWBPA”), filed or threatened to be filed by Employee or on
Employee’s behalf based on Employee’s employment, terms of employment, or separation from, Employer. Employee understands
that any Consideration paid to Employee pursuant to this Agreement may be deducted from any monetary award she may receive as
a result of a successful ADEA and/or OWBPA claim or challenge to this Agreement and Release. This does not preclude Employee from
eligibility for unemployment benefits, and does not preclude or obstruct Employee’s right to file a Charge with the Equal
Employment Opportunity Commission (“EEOC”).

 

7.
Return of Property. Employee shall return, on or before the Termination Date, all Employer property in Employee’s
possession or control, including but not limited to any drawings, orders, files, documents, notes, computers, laptop computers,
fax machines, cell phones, smart devices, access cards, fobs, keys, reports, manuals, records, product samples, correspondence
and/or other documents or materials related to Employer’s business that Employee has compiled, generated or received while
working for Employer, including all electronically stored information, copies, samples, computer data, disks, or records of such
materials. Employee must return to Employer, and Employee shall not retain, any Employer property as previously defined in this
section.

 

8.
Agreement Not to Seek Future Employment. Employee agrees that she will never knowingly seek nor accept employment or a
consulting/independent contractor relationship with Employer, nor any other entity owned by Xtant Medical Holdings, Inc., either
directly or through a consulting firm.

 

9.
Withholding For Amounts Owed to Employer. Execution of this Agreement shall constitute Employee’s authorization for
Employer to make deductions from Employee’s Consideration, for Employee’s indebtedness to Employer, or to repay Employer
for unaccrued Paid Time Off already taken, employee purchases, wage or benefit overpayment, or other Employer claims against Employee,
to the extent permitted by applicable law.

 

10.
Non-Disparagement. Employee agrees that, unless it is in the context of an EEOC or other civil rights or other government
enforcement agency investigation or proceeding, Employee will make no critical, disparaging or defamatory comments regarding Employer
or any Released Party, as defined in the Release, in any respect or make any comments concerning the conduct or events which precipitated
Employee’s separation. Furthermore, Employee agrees not to assist or encourage in any way any individual or group of individuals
to bring or pursue a lawsuit, charge, complaint, or grievance, or make any other demands against Employer or any Released Party.
This provision does not prohibit Employee from participating in an EEOC or other civil rights or other government enforcement
agency charge, investigation or proceeding, or from providing testimony or documents pursuant to a lawful subpoena or as otherwise
required by law.

 

	 	 	 
	 	 	EMPLOYEE INITIALS

 

    	 	2	 

    	 

    

 

11.
Compliance with Employment Agreement and Protection of Confidential Information. Employee agrees to comply with the provisions
of and the restrictions set forth in her Employment Agreement (Exhibit B). Employee agrees to never divulge or use any trade secrets,
confidential information, or other proprietary information of Employer which Employee obtained or to which Employee had access
during her employment with Employer. For purposes of this latter obligation, “Confidential Information” means
information that is not generally known and that is proprietary to Employer or that Employer is obligated to treat as proprietary.
It includes, but is not limited to, information or data of Employer concerning its business, financial statements, patient contact
information and data, products, plans, ideas, drawings, designs, concepts, inventions, discoveries, improvements, patent applications,
know-how, trade secrets, prototypes, processes, techniques and other proprietary information. It does not include information
that Employee can establish: (i) is already lawfully in the possession of Employee through independent means at the time of disclosure
thereof; (ii) is or later becomes part of the public domain through no fault of Employee; (iii) is lawfully received by Employee
from a third party having no obligations of confidentiality to Employer; or (iv) is required to be disclosed by order of a governmental
agency or by a court of competent jurisdiction. Any information that Employee knows or should reasonably know is Confidential
Information, or that Employer treats as Confidential Information, will be presumed to be Confidential Information.

 

12.
Confidentiality. It is the intent of Employer and Employee that the terms of this Agreement be treated as Confidential,
except to the extent this Agreement is required to be disclosed under applicable federal securities laws, as determined by Employer.
Employee warrants that she has not and agrees that she will not in the future disclose the terms of this Agreement, or the terms
of the Consideration to be paid by Employer to Employee as part of this Agreement, to any person other than her attorney, tax
advisor, spouse, or representatives of any state or federal regulatory agency, who shall be bound by the same prohibitions against
disclosure as bind Employee, and Employee shall be responsible for advising those individuals or agencies of this confidentiality
provision. Employee shall not provide or allow to be provided to any person this Agreement, or any copies thereof, nor shall Employee
now or in the future disclose the terms of this Agreement to any person, with the sole exception of communications with Employee’s
spouse, attorney and tax advisor, unless otherwise ordered to do so by a court or agency of competent jurisdiction.

 

13.
Invalidity. In case any one or more of the provisions of this Agreement or Release shall be held invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining provisions contained in this Agreement and Release
will not in any way be affected or impaired thereby.

 

14.
Non-Admissions. The Parties expressly deny any and all liability or wrongdoing and agree that nothing in this Agreement
or the Release shall be deemed to represent any concession or admission of such liability or wrongdoing or any waiver of any defense.

 

15.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of ___________________, without
reference to its choice of law rules. Any action for breach of this Agreement shall be brought in the federal or state court,
as appropriate, located in _________________.

 

16.
Voluntary and Knowing Action. Employee acknowledges that she has had sufficient opportunity to review the terms of this
Agreement and attached Release, and that she has voluntarily and knowingly entered into this Agreement. Employer shall not be
obligated to provide any Consideration to Employee pursuant to this Agreement in the event Employee elects to rescind/revoke the
Release. The Release becomes final and binding on the Parties upon expiration of the rescission/revocation period, provided Employee
has not exercised her option to rescind/revoke the Release. Any attempt by Employee to rescind any part of the Release obligates
Employee to immediately return all Consideration under this Agreement to counsel for Employer.

 

	 	 	 
	 	 	EMPLOYEE INITIALS

 

    	 	3	 

    	 

    

 

17.
Legal Counsel and Fees. Except as otherwise provided in this Agreement and the Release, the Parties agree to bear their
own costs and attorneys’ fees, if any. Employee acknowledges that Employer, by this Agreement, has advised her that she
may consult with an attorney of her choice prior to executing this Agreement and the Release. Employee acknowledges that she has
had the opportunity to be represented by legal counsel during the negotiation and execution of this Agreement and the Release,
and that she understands she will be fully bound by this Agreement and the Release.

 

18.
Modification. This Agreement may be modified or amended only by a writing signed by both Employer and Employee.

 

19.
Successors and Assigns. This Agreement is binding on and inures to the benefit of the Parties’ respective successors
and assigns.

 

20.
Notices. Any notice, request or demand required or desired to be given hereunder shall be in writing and shall be addressed
as follows:

 

	 	If
    to Employer:	Carl
    D. O’Connell
	 	 	Chief
    Executive Officer
	 	 	Xtant
    Medical Holdings, Inc.
	 	 	664
    Cruiser Lane
	 	 	Belgrade,
    MT 59714
	 	 	 
	 	With
    a copy to:	Thomas
    A. Letscher
	 	 	Fox
    Rothschild LLP
	 	 	Campbell
    Mithun Tower - Suite 2000
	 	 	222
    South Ninth Street
	 	 	Minneapolis,
    MN 55402-3338
	 	 	 
	 	If
    to Employee:	Kathie
    J. Lenzen
	 	 	1413
    Fairway Court
	 	 	Chaska,
    MN 55318

 

Either
party may change its address by giving the other Party written notice of its new address.

 

21.
Waivers. No failure or delay by either Party in exercising any right or remedy under this Agreement will waive any provision
of this Agreement.

 

22.
Miscellaneous. This Agreement may be executed simultaneously in counterparts, each of which shall be an original, but all
of which shall constitute but one and the same agreement.

 

23.
Entire Agreement. Except for any continuing, post-employment, obligations under Exhibit B, or employment related Employer
policy, or as otherwise provided in this Agreement, this Agreement, the attached Release, and Exhibit B are the entire Agreement
between Employer and Employee relating to her employment and her separation. Employee understands that this Agreement and the
Release cannot be changed unless it is done in writing and signed by both Employer and Employee.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK.]

 

	 	 	 
	 	 	EMPLOYEE INITIALS

 

    	 	4	 

    	 

    

 

	 	EMPLOYEE
	 	 
	 	 
	 	 
	 	Kathie
    J. Lenzen
	 	Print Name
	 	 	 
	 	Dated:	___________,
    20____
	 	 	 
	 	XTANT MEDICAL HOLDINGS, INC.
	 	 	 
	 	By:	
	 	Its:	
	 	Dated:	___________,
    20____

 

	 	 	 
	 	 	EMPLOYEE INITIALS

 

    	 	5	 

    	 

    

 

EXHIBIT
A

 

RELEASE

 

	I.	Definitions.
    I, Kathie J. Lenzen, intend all words used in this release (“Release”) to have their plain meanings in
    ordinary English. Technical legal words are not needed to describe what I mean. Specific terms I use in this Release have
    the following meanings: 

 

	 	A.	“I,”
    “Me,” and “My” individually and collectively mean Kathie J. Lenzen and anyone who has
    or obtains or asserts any legal rights or claims through Me or on My behalf.
	 	 	 
	 	B.	“Employer”
    as used in this Release, shall at all times mean Xtant Medical Holdings, Inc. and any affiliates, related or predecessor corporations,
    parent corporations or subsidiaries, successors and assigns.
	 	 	 
	 	C.	“Released
    Party” or “Released Parties” as used in this Release, shall at all times mean Xtant Medical Holdings,
    Inc. and its affiliates, related or predecessor corporations, subsidiaries, successors and assigns, present or former officers,
    directors, shareholders, agents, employees, representatives and attorneys, whether in their individual or official capacities,
    and its affiliates, related or predecessor corporations, parent corporations or subsidiaries, successors and assigns, present
    or former officers, directors, shareholders, agents, employees, representatives and attorneys, whether in their individual
    or official capacities, benefit plans and plan administrators, and insurers, insurers’ counsel, whether in their individual
    or official capacities, and the current and former trustees or administrators of any pension, 401(k), or other benefit plan
    applicable to the employees or former employees of Employer, in their official and individual capacities.
	 	 	 
	 	D.	“My
    Claims” mean any and all of the actual or potential claims of any kind whatsoever I may have had, or currently may
    have against Employer or any Released Party, whether known or unknown, that are in any way related to My employment with or
    separation from employment with Employer, including, but not limited to any claims for: invasion of privacy; breach of written
    or oral, express or implied, contract; fraud; misrepresentation; violation of the Age Discrimination in Employment Act of
    1967 (“ADEA”), 29 U.S.C. § 626, as amended; the Genetic Information Nondiscrimination Act of 2008
    (“GINA”), 42 U.S.C. § 2000, et seq., the Older Workers Benefit Protection Act of 1990 (“OWBPA”),
    29 U.S.C. § 626(f), Title VII of the Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. § 2000e,
    et seq., the Americans with Disabilities Act (“ADA”), 29 U.S.C. § 2101, et seq., and as amended
    (“ADAAA”), the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended,
    29 U.S.C. § 1001, et seq., Equal Pay Act (“EPA”), 29 U.S.C. § 206(d), the Worker Adjustment
    and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101, et seq., the Family and Medical
    Leave Act (“FMLA”), 29 U.S.C. § 2601, et seq.; National Labor Relations Act, 29 U.S.C. §
    141, et seq., the False Claims Act, 31 U.S.C. § 3729, et seq., Anti-Kickback Statute, 42 U.S.C. §
    1320a, et seq., the Minnesota Human Rights Act, Minn. Stat. § 363A.01, et seq., Minn. Stat. § 181,
    et seq., the Minnesota Whistleblower Act, Minn. Stat. § 181.931, et seq., the Montana Human Rights Act,
    Mont. Code Ann. § 49-1-101, et seq., the Montana Wrongful Discharge for Employment Act, Mont. Code Ann. §
    39-2-901, et seq., the Montana Wage Payment Act, Mont. Code Ann. § 39-3-201, et. seq., or any and all other
    Minnesota, Montana, and other state human rights or fair employment practices statutes, administrative regulations, or local
    ordinances, and any other Minnesota, Montana, or other federal, state, local or foreign statute, law, rule, regulation, ordinance
    or order, all as amended. This includes, but is not limited to, claims for violation of any civil rights laws based on protected
    class status; claims for assault, battery, defamation, intentional or negligent infliction of emotional distress, breach of
    the covenant of good faith and fair dealing; promissory estoppel; negligence; negligent hiring; retention or supervision;
    retaliation; constructive discharge; violation of whistleblower protection laws; unjust enrichment; violation of public policy;
    and, all other claims for unlawful employment practices, and all other common law or statutory claims. 

 

	 	 	 
	 	 	EMPLOYEE INITIALS

 

    	 	Ex. A-1	 

    	 

    

 

	II.	Agreement
    to Release My Claims. Except as stated in Section V of this Release, I agree to release all My Claims and waive any
    rights to My Claims. I also agree to withdraw any and all of My charges and lawsuits against Employer; except that
    I may, but am not required to, withdraw or dismiss, or attempt to withdraw or dismiss, any charges that I may have pending
    against Employer with the Employment Opportunity Commission (“EEOC”) or other civil rights enforcement
    agency. In exchange for My agreement to release My Claims, I am receiving satisfactory Consideration from Employer to which
    I am not otherwise entitled by law, contract, or under any Employer policy. The Consideration I am receiving is a full and
    fair consideration for the release of all My Claims. Employer does not owe Me anything in addition to what I will be receiving
    according to the Separation Agreement which I have signed.
	 	 
	III.	Unknown
    Claims. In waiving and releasing any and all actual, potential, or threatened claims against Employer, whether or
    not now known to me, I understand that this means that if I later discover facts different from or in addition to those facts
    currently known by me, or believed by me to be true, the waivers and releases of this Release will remain effective in all
    respects – despite such different or additional facts and my later discovery of such facts, even if I would not have
    agreed to the Separation Agreement and this Release if I had prior knowledge of such facts.
	 	 
	IV.	Confirmation
    of No Claims, Etc. I am not aware of any other facts, evidence, allegations, claims, liabilities, or demands relating
    to alleged or potential violations of law that may give rise to any claim or liability on the part of any Released Party under
    the Securities Exchange Act of 1934, the Sarbanes–Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer
    Protection Act, the False Claims Act, the Anti-kickback Statute. I understand that nothing in this Release interferes with
    My right to file a complaint, charge or report with any law enforcement agency, with the Securities and Exchange Commission
    (“SEC”) or other regulatory body, or to participate in any manner in an SEC or other governmental investigation
    or proceeding under any such law, statute or regulation, or to require notification or prior approval by Employer of any such
    a complaint, charge or report. I understand and agree, however, that I waive My right to recover any whistleblower award under
    the Securities Exchange Act of 1934, the Sarbanes–Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer
    Protection Act, or other individual relief in any administrative or legal action whether brought by the SEC or other governmental
    or law enforcement agency, Me, or any other party, unless and to the extent that such waiver is contrary to law. I agree that
    the Released Parties reserve any and all defenses which they might have against any such allegations or claims brought by
    Me or on My behalf. I understand that Employer is relying on My representations in this Release and related Separation Agreement.
	 	 
	V.	Exclusions
    from Release.

 

	 	A.	The
    term “Claims” does not include My rights, if any, to claim the following: unemployment insurance benefits; workers
    compensation benefits; claims for My vested post-termination benefits under any 401(k) or similar retirement benefit plan;
    My rights to group medical or group dental insurance coverage pursuant to section 4980B of the Internal Revenue Code of 1986,
    as amended (“COBRA”); My rights to enforce the terms of this Release; or My rights to assert claims that
    are based on events occurring after this Release becomes effective.

 

	 	 	 
	 	 	EMPLOYEE INITIALS

 

    	 	Ex. A-2	 

    	 

    

 

	 	B.	Nothing
    in this Release interferes with My right to file or maintain a charge with the Equal Employment Opportunity Commission or
    other local civil rights enforcement agency, or participate in any manner in an EEOC or other such agency investigation or
    proceeding. I, however, understand that I am waiving My right to recover individual relief including, but not limited to,
    back pay, front pay, reinstatement, attorneys’ fees, and/or punitive damages, in any administrative or legal action
    whether brought by the EEOC or other civil rights enforcement agency, Me, or any other party.
	 	 	 
	 	C.	Nothing
    in this Release interferes with My right to challenge the knowing and voluntary nature of this Release under the ADEA and/or
    OWBPA.
	 	 	 
	 	D.	I
    agree that Employer reserves any and all defenses, which it has or might have against any claims brought by Me. This includes,
    but is not limited to, Employer’s right to seek available costs and attorneys’ fees as allowed by law, and to
    have any monetary award granted to Me, if any, reduced by the amount of money that I received in consideration for this Release.

 

	VI.	Older
    Workers Benefit Protection Act. The Older Workers Benefit Protection Act applies to individuals age 40 and older and
    sets forth certain criteria for such individuals to waive their rights under the Age Discrimination in Employment Act in connection
    with an exit incentive program or other employment termination program. I understand and have been advised that, if applicable,
    the above release of My Claims is subject to the terms of the OWBPA. The OWBPA provides that a covered individual cannot waive
    a right or claim under the ADEA unless the waiver is knowing and voluntary. If I am a covered individual, I acknowledge that
    I have been advised of this law, and I agree that I am signing this Release voluntarily, and with full knowledge of its consequences.
    I understand that Employer is giving Me twenty-one (21) days from the date I received a copy of this Release to decide whether
    I want to sign it. I acknowledge that I have been advised to use this time to consult with an attorney about the effect of
    this Release. If I sign this Release before the end of the twenty-one (21) day period it will be My personal, voluntary decision
    to do so, and will be done with full knowledge of My legal rights. I agree that material and/or immaterial changes to the
    Separation Agreement or this Release will not restart the running of this consideration period. I also acknowledge that the
    Separation Agreement, this Release and any other attachments or exhibits have each been written in a way that I understand.

 

	 	 	 
	 	 	EMPLOYEE INITIALS

 

    	 	Ex. A-3	 

    	 

    

 

	VII.	Right
    to Rescind and/or Revoke. I understand that insofar as this Release relates to My rights under the Minnesota Human
    Rights Act, it shall not become effective or enforceable until fifteen (15) days after I sign it. Any such revocation must
    be in writing and hand-delivered to Employer or, if sent by mail, postmarked within the applicable time period, sent by certified
    mail, return receipt requested, and addressed as follows:

 

	 	A.	post-marked
    within the fifteen (15) day revocation period;	 
	 	 	 	 
	 	B.	properly
    addressed to:	 
	 	 	 	 
	 	 	Carl
    D. O’Connell	 
	 	 	Chief
    Executive Officer	 
	 	 	Xtant
    Medical Holdings, Inc.	 
	 	 	664
    Cruiser Lane	 
	 	 	Belgrade,
    MT 59714	 
	 	 	 	 
	 	 	and	 
	 	 	 	 
	 	C.	sent
    by certified mail, return receipt requested.	 

 

	 	I
    understand that the Consideration I am receiving for settling and releasing My Claims is contingent upon My agreement to be
    bound by the terms of this Release. Accordingly, if I decide to rescind or revoke this Release, I understand that I am not
    entitled to the Consideration described in the Separation Agreement. I further understand that if I attempt to rescind or
    revoke My release of any claim, I must immediately return to Employer all Consideration I have received under My Agreement.
	 	 
	VIII.	I
    Understand the Terms of this Release. I have had the opportunity to read this Release carefully and understand all
    its terms. I have had the opportunity to review this Release with My own attorney. In agreeing to sign this Release, I have
    not relied on any oral statements or explanations made by Employer, including its employees or attorneys. I understand and
    agree that this Release and the attached Agreement contain all the agreements between Employer and Me. We have no other written
    or oral agreements.

 

	 	 
	 	Kathie
    J. Lenzen
	 	Dated:
    ____________, 20___

 

	 	 	 
	 	 	EMPLOYEE INITIALS

 

    	 	Ex. A-4	 

    	 

    

 

EXHIBIT
B

 

AGREEMENT

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