exv10w17






Exhibit 10.17




      




ACQUISITION AGREEMENT




AND



PLAN OF MERGER



by and among



EVERBANK FINANCIAL CORP,



TITAN MERGER SUB, INC.,



TYGRIS COMMERCIAL FINANCE GROUP, INC.



and



AQUILINE CAPITAL PARTNERS LLC,

as Designated Monitor and solely for purposes of Sections 3.2, 3.7, 3.9, 3.13, Article

V, 8.6, 8.7, 9.1, 9.8, 10.2, Article XII, 13.1, 13.3, 13.6, 14.3, 14.4, Article XV, Article

XVI, Article XVII and Schedule V



Dated as of October 21, 2009



 




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I
	 	 	 	 
	 
	 	 	 	 
	DEFINITIONS; INTERPRETATION
	 	 	 	 
	 
	 	 	 	 
	Section 1.1 Definitions

	 	 	3	 
	Section 1.2 Interpretation and Construction

	 	 	27	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	 
	 	 	 	 
	THE MERGER
	 	 	 	 
	 
	 	 	 	 
	Section 2.1 The Merger

	 	 	28	 
	Section 2.2 Closing

	 	 	28	 
	Section 2.3 Effective Time

	 	 	28	 
	Section 2.4 Effects of the Merger

	 	 	28	 
	Section 2.5 Certificate of Incorporation and By-laws

	 	 	28	 
	Section 2.6 Directors and Officers of the Surviving Corporation

	 	 	29	 
	Section 2.7 Contribution of the Surviving Corporation

	 	 	29	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	 
	 	 	 	 
	EFFECT OF THE MERGER ON CAPITAL INTERESTS;
	 	 	 	 
	CLOSING MECHANICS
	 	 	 	 
	 
	 	 	 	 
	Section 3.1 Merger Consideration

	 	 	29	 
	Section 3.2 Tangible Book Value Adjustment

	 	 	31	 
	Section 3.3 Cancellation of Treasury Stock

	 	 	33	 
	Section 3.4 Merger Sub Common Stock

	 	 	33	 
	Section 3.5 Treatment of Company Options and Company SARs

	 	 	33	 
	Section 3.6 Treatment of Company RSUs

	 	 	34	 
	Section 3.7 Treatment of Company Warrants

	 	 	34	 
	Section 3.8 Deposit of Escrowed Assets

	 	 	35	 
	Section 3.9 Exchange Procedures

	 	 	35	 
	Section 3.10 Fractional Shares

	 	 	37	 
	Section 3.11 Lost, Stolen or Destroyed Certificates

	 	 	37	 
	Section 3.12 No Further Transfer of Shares

	 	 	37	 
	Section 3.13 Merger Consideration Schedule

	 	 	37	 
	Section 3.14 No Registration

	 	 	39	 
	Section 3.15 Appraisal Rights

	 	 	39	 
	Section 3.16 Determination of Multiple

	 	 	39	 






i









 






	 	 	 	 	 
	 	 	Page
	ARTICLE IV
	 	 	 	 
	 
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	 	 	 	 
	 
	 	 	 	 
	Section 4.1 Organization, Standing and Corporate Power

	 	 	41	 
	Section 4.2 Subsidiaries

	 	 	42	 
	Section 4.3 Capital Structure

	 	 	42	 
	Section 4.4 Authority; Noncontravention

	 	 	43	 
	Section 4.5 Company Financial Statements

	 	 	45	 
	Section 4.6 No Undisclosed Liabilities

	 	 	46	 
	Section 4.7 Absence of Changes

	 	 	46	 
	Section 4.8 Litigation

	 	 	46	 
	Section 4.9 Material Contracts

	 	 	46	 
	Section 4.10 Compliance with Laws

	 	 	48	 
	Section 4.11 Labor Relations and Other Employment Matters

	 	 	49	 
	Section 4.12 Company Employee Benefits Plans

	 	 	50	 
	Section 4.13 Taxes

	 	 	52	 
	Section 4.14 Environmental Matters

	 	 	54	 
	Section 4.15 Real and Personal Property

	 	 	55	 
	Section 4.16 Intellectual Property

	 	 	57	 
	Section 4.17 Related Party Transactions

	 	 	57	 
	Section 4.18 Insurance

	 	 	58	 
	Section 4.19 Loan and Lease Agreements

	 	 	58	 
	Section 4.20 Equipment and Collateral

	 	 	60	 
	Section 4.21 Interest Rate Risk Management Instruments

	 	 	61	 
	Section 4.22 Internal Controls

	 	 	61	 
	Section 4.23 Investment Company Act

	 	 	61	 
	Section 4.24 Private Placement

	 	 	61	 
	Section 4.25 Solvency

	 	 	62	 
	Section 4.26 Brokers and Other Advisors

	 	 	62	 
	Section 4.27 Takeover Laws

	 	 	62	 
	Section 4.28 No Other Representations or Warranties

	 	 	62	 
	Section 4.29 No Reliance on Forecasts

	 	 	62	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	 
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES OF THE DESIGNATED MONITOR
	 	 	 	 
	 
	 	 	 	 
	Section 5.1 Authority; Noncontravention

	 	 	63	 
	Section 5.2 No Other Representations or Warranties

	 	 	63	 






ii









 






	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	 
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
	 	 	 	 
	 
	 	 	 	 
	Section 6.1 Organization, Standing and Corporate Power

	 	 	64	 
	Section 6.2 Subsidiaries

	 	 	65	 
	Section 6.3 Capital Structure

	 	 	65	 
	Section 6.4 Authority; Noncontravention

	 	 	67	 
	Section 6.5 Parent Financial Statements

	 	 	68	 
	Section 6.6 No Undisclosed Liabilities

	 	 	69	 
	Section 6.7 Absence of Changes

	 	 	69	 
	Section 6.8 Litigation

	 	 	69	 
	Section 6.9 Material Contracts

	 	 	70	 
	Section 6.10 Compliance with Laws; Reports

	 	 	71	 
	Section 6.11 Related Party Transactions

	 	 	72	 
	Section 6.12 Interest Rate Risk Management Instruments

	 	 	73	 
	Section 6.13 Insurance

	 	 	73	 
	Section 6.14 Internal Controls

	 	 	73	 
	Section 6.15 Investment Company Act

	 	 	74	 
	Section 6.16 Brokers and Other Advisors

	 	 	74	 
	Section 6.17 No Reliance on Forecasts

	 	 	74	 
	Section 6.18 Takeover Laws

	 	 	74	 
	Section 6.19 Loans

	 	 	74	 
	Section 6.20 Parent Employee Benefits Plans

	 	 	74	 
	Section 6.21 Trust Preferred Securities

	 	 	76	 
	Section 6.22 No Other Representations or Warranties

	 	 	76	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	 
	 	 	 	 
	COMPANY COVENANTS
	 	 	 	 
	 
	 	 	 	 
	Section 7.1 Conduct of Business

	 	 	77	 
	Section 7.2 Distributions and Dividends

	 	 	80	 
	Section 7.3 Capital Calls

	 	 	80	 
	Section 7.4 Tax and Accounting Matters

	 	 	81	 
	Section 7.5 Related Party Transactions

	 	 	81	 
	Section 7.6 Unaudited Financial Statements; Portfolio Performance Reports

	 	 	81	 
	Section 7.7 Maintenance of Properties

	 	 	81	 
	Section 7.8 No Shop

	 	 	82	 
	Section 7.9 DGCL Notices

	 	 	82	 






iii









 






	 	 	 	 	 
	 	 	Page
	ARTICLE VIII
	 	 	 	 
	 
	 	 	 	 
	PARENT COVENANTS
	 	 	 	 
	 
	 	 	 	 
	Section 8.1 Conduct of Business
	 	 	82	 
	Section 8.2 Tax and Accounting Matters
	 	 	83	 
	Section 8.3 Obligations of Merger Sub
	 	 	84	 
	Section 8.4 Employee Matters
	 	 	84	 
	Section 8.5 Parent Certificate and Parent By-laws
	 	 	85	 
	Section 8.6 MarCap Property Taxes Claim
	 	 	85	 
	Section 8.7 Distribution of USXL Escrowed Assets
	 	 	85	 
	 
	 	 	 	 
	ARTICLE IX
	 	 	 	 
	 
	 	 	 	 
	COMPANY AND PARENT COVENANTS
	 	 	 	 
	 
	 	 	 	 
	Section 9.1 Efforts and Actions to Cause Closing to Occur
	 	 	86	 
	Section 9.2 Notification of Certain Matters
	 	 	89	 
	Section 9.3 Updates to Disclosure Schedule
	 	 	89	 
	Section 9.4 Access; Confidentiality
	 	 	90	 
	Section 9.5 Indemnification; Directors’ and Officers’ Liability Insurance
	 	 	90	 
	Section 9.6 Certain Existing Indebtedness
	 	 	92	 
	Section 9.7 Business Line Modification Plan
	 	 	92	 
	Section 9.8 Public Announcements
	 	 	93	 
	Section 9.9 Further Assurances
	 	 	93	 
	Section 9.10 Tax Status of the Merger
	 	 	93	 
	Section 9.11 2010 Bonus Opportunities
	 	 	93	 
	 
	 	 	 	 
	ARTICLE X
	 	 	 	 
	 
	 	 	 	 
	CONDITIONS
	 	 	 	 
	 
	 	 	 	 
	Section 10.1 Conditions to Each Party’s Obligations
	 	 	94	 
	Section 10.2 Conditions to Obligations of Parent and Merger Sub
	 	 	94	 
	Section 10.3 Conditions to Obligations of the Company
	 	 	94	 
	 
	 	 	 	 
	ARTICLE XI
	 	 	 	 
	 
	 	 	 	 
	TERMINATION
	 	 	 	 
	 
	 	 	 	 
	Section 11.1 Termination of this Agreement
	 	 	97	 
	Section 11.2 Effect of Termination
	 	 	99	 






iv









 





	 	 	 	 	 
	 	 	Page
	ARTICLE XII
	 	 	 	 
	 
	 	 	 	 
	SURVIVAL; INDEMNIFICATION
	 	 	 	 
	 
	 	 	 	 
	Section 12.1 Survival of Representations

	 	 	99	 
	Section 12.2 Indemnification by Company Stockholders

	 	 	99	 
	Section 12.3 Indemnification by Parent

	 	 	101	 
	Section 12.4 Third Party Claims

	 	 	101	 
	Section 12.5 Written Notice of Claims

	 	 	102	 
	Section 12.6 Limitations on Indemnification Obligations

	 	 	103	 
	Section 12.7 Adjustments to Losses; Insurance

	 	 	103	 
	Section 12.8 Recovery of Losses by Parent Indemnified Parties

	 	 	104	 
	Section 12.9 Remedies

	 	 	104	 
	Section 12.10 Treatment of Indemnification Payments

	 	 	104	 
	 
	 	 	 	 
	ARTICLE XIII
	 	 	 	 
	 
	 	 	 	 
	TAX MATTERS
	 	 	 	 
	 
	 	 	 	 
	Section 13.1 Tax Return Preparation

	 	 	104	 
	Section 13.2 Transfer Taxes

	 	 	106	 
	Section 13.3 Assistance and Cooperation

	 	 	106	 
	Section 13.4 Certain Tax Agreements

	 	 	106	 
	Section 13.5 Tax Indemnification

	 	 	107	 
	Section 13.6 Indemnification Procedures and Contest Provisions

	 	 	107	 
	Section 13.7 Allocation of Straddle Period Taxes

	 	 	109	 
	Section 13.8 Other Tax Matters

	 	 	109	 
	Section 13.9 Recovery of Losses by Parent

	 	 	110	 
	 
	 	 	 	 
	ARTICLE XIV
	 	 	 	 
	 
	 	 	 	 
	PORTFOLIO LOSS PROTECTION
	 	 	 	 
	 
	 	 	 	 
	Section 14.1 Indemnification for Portfolio Losses

	 	 	110	 
	Section 14.2 Calculation of Portfolio Losses

	 	 	110	 
	Section 14.3 Notification of Protected Annual Portfolio Losses

	 	 	110	 
	Section 14.4 Recovery of Protected Annual Portfolio Losses

	 	 	112	 
	Section 14.5 Treatment of Protected Annual Portfolio Losses

	 	 	112	 
	 
	 	 	 	 
	ARTICLE XV
	 	 	 	 
	 
	 	 	 	 
	DESIGNATED MONITOR
	 	 	 	 
	 
	 	 	 	 
	Section 15.1 Designated Monitor

	 	 	112	 
	Section 15.2 No Liability to Parent

	 	 	114	 






v









 






	 	 	 	 	 
	 	 	Page
	ARTICLE XVI
	 	 	 	 
	 
	 	 	 	 
	ESCROW
	 	 	 	 
	 
	 	 	 	 
	Section 16.1 Deposit and Administration of Escrowed Assets

	 	 		 
	Section 16.2 Payment of Parent Indemnity Claims

	 	 	114	 
	Section 16.3 Payment of Protected Portfolio Losses

	 	 	115	 
	Section 16.4 Escrow Step-Down

	 	 	116	 
	Section 16.5 Extraordinary Transactions

	 	 	116	 
	Section 16.6 Release of Escrowed Assets

	 	 	118	 
	Section 16.7 Stockholder Matters

	 	 	119	 
	Section 16.8 Transfer Restrictions

	 	 	119	 
	Section 16.9 Tax Treatment of Escrowed Assets

	 	 	120	 
	 
	 	 	 	 
	ARTICLE XVII
	 	 	 	 
	 
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 
	Section 17.1 Fees and Expenses

	 	 	120	 
	Section 17.2 Notices

	 	 	120	 
	Section 17.3 Consents and Approvals

	 	 	122	 
	Section 17.4 Entire Agreement; No Third-Party Beneficiaries

	 	 	122	 
	Section 17.5 Governing Law

	 	 	122	 
	Section 17.6 Assignment

	 	 	122	 
	Section 17.7 Specific Enforcement

	 	 	122	 
	Section 17.8 Consent to Jurisdiction

	 	 	123	 
	Section 17.9 Waiver of Jury Trial

	 	 	123	 
	Section 17.10 Severability

	 	 	124	 
	Section 17.11 Performance of Obligations

	 	 	124	 
	Section 17.12 Counterparts

	 	 	124	 
	Section 17.13 Amendment or Supplement

	 	 	124	 
	Section 17.14 Non-Recourse

	 	 	124	 
	 
	 	 	 	 
	Schedules
	 	 	 	 
	Schedule I – Accounting Methodologies
	 	 	 	 
	Schedule II – Business Line Modification Plan
	 	 	 	 
	Schedule III – Calculation of Portfolio Losses
	 	 	 	 
	Schedule IV – Warrant Holders
	 	 	 	 
	Schedule V – Designated Monitor Provisions
	 	 	 	 
	 
	 	 	 	 
	Exhibits
	 	 	 	 
	Exhibit A – Form of Escrow Agreement
	 	 	 	 
	Exhibit B – Form of Certificate of Incorporation of the Surviving Corporation
	 	 	 	 






vi









 






	 	 	 	 	 
	 	 	Page
	Exhibit C – Form of Amended and Restated Certificate of Incorporation of Parent
	 	 	 	 
	Exhibit D – Form of Amended and Restated By-laws of Parent
	 	 	 	 
	Exhibit E – Form of Merger Consideration Schedule
	 	 	 	 
	Exhibit F – Form of Merger Consideration Allocation Schedule
	 	 	 	 
	Exhibit G – Form of Letter of Transmittal
	 	 	 	 
	Exhibit H – Form of Warrant Escrow Agreement
	 	 	 	 
	Exhibit I – Form of DM Escrow Agreement
	 	 	 	 
	Exhibit J – Form of Warrant Termination Agreement
	 	 	 	 
	Exhibit K – Form of Management Termination of Warrants Agreement
	 	 	 	 
	Exhibit L – Form of Step Down Share Purchase Right Agreement
	 	 	 	 






vii









 






ACQUISITION AGREEMENT AND PLAN OF MERGER




          This Acquisition Agreement and Plan of Merger, dated as of October 21, 2009 (this
“Agreement”), is made by and among EverBank Financial Corp, a Florida corporation
(“Parent”), Titan Merger Sub, Inc., a Delaware corporation and a direct wholly-owned
Subsidiary of Parent (“Merger Sub”), Tygris Commercial Finance Group, Inc., a Delaware
corporation (the “Company”), and the Designated Monitor (as defined below), solely in its
capacity as Designated Monitor of the Company Stockholders (as defined below) and solely for
purposes of Sections 3.2, 3.7, 3.9, 3.13, Article V,
8.6, 8.7, 9.1, 9.8, 10.2, Article XII,
13.1, 13.3, 13.6, 14.3, 14.4, Article XV,
Article XVI, Article XVII and Schedule V.




RECITALS:




          WHEREAS, contemporaneously with the execution and delivery of this Agreement, Parent and the
Company are entering into a stock purchase agreement, dated the date hereof (the “Stock
Purchase Agreement”), pursuant to which the Company is purchasing (the “Initial
Investment”) the number of shares of voting common stock, par value $0.01 per share, of Parent
(“Parent Voting Common Stock”) described therein for an aggregate purchase price of
sixty-five million dollars ($65,000,000) (the “Initial Investment Amount”), of which a
portion thereof is being purchased on the date hereof for an aggregate purchase price of thirty
million dollars ($30,000,000) and the remaining portion thereof is being purchased for an aggregate
purchase price of thirty-five million dollars ($35,000,000), in accordance with the terms and
subject to the conditions set forth in the Stock Purchase Agreement, on the Second Closing (as
defined therein);




          WHEREAS, Parent desires to (i) acquire the Company, through the acquisition of 100% of the
issued and outstanding shares of capital stock of the Company pursuant to the merger of Merger Sub
with and into the Company (the “Merger”), with the Company continuing as the surviving
corporation of the Merger (the “Surviving Corporation”) and (ii) immediately following the
Merger, contribute all of the issued and outstanding shares of capital stock of the Surviving
Corporation to EverBank, a federal savings bank and a direct wholly-owned subsidiary of Parent
(“EverBank”), resulting in the Surviving Corporation becoming a direct wholly-owned
Subsidiary of EverBank;




          WHEREAS, the respective Boards of Directors of each of Parent, Merger Sub and the Company have
approved and declared advisable this Agreement and the Merger, upon the terms and subject to the
conditions set forth in this Agreement and in accordance with the General Corporation Law of the
State of Delaware (the “DGCL”) and the Florida Business Corporation Act (the
“FBCA”), respectively;




          WHEREAS, the respective Boards of Directors of each of Parent and the Company have determined
that it is advisable and in the best interests of their respective companies and stockholders to
consummate the Merger provided for herein;




 









 








          WHEREAS, Parent, as the sole stockholder of Merger Sub, has adopted this Agreement and
approved the transactions contemplated hereby, including the Merger;




          WHEREAS, Parent has received the requisite shareholder consent or vote to amend the Parent
Certificate in the form attached hereto as Exhibit C;




          WHEREAS, the Board of Directors of Parent has adopted, subject to the occurrence of the
Effective Time, the amended and restated by-laws of Parent in the form attached hereto as
Exhibit D;




          WHEREAS, contemporaneously with the execution and delivery of this Agreement, certain of the
holders (the “Company Voting Stockholders”) of outstanding shares of Company Voting Stock
(as defined below) have delivered to the Company irrevocable written consents (the “Irrevocable
Written Consents”) adopting this Agreement;




          WHEREAS, contemporaneously with the execution and delivery of this Agreement, Parent and the
Company have executed the Second Amended and Restated Stockholders Agreement (the “Stockholders
Agreement”);




          WHEREAS, contemporaneously with the execution and delivery of this Agreement, the Company
Voting Stockholders have executed and delivered to the Company, with a copy to Parent, a
stockholder waiver and release agreement (the “Stockholder Waiver and Release Agreement”)
pursuant to which the Company Voting Stockholders have executed a release in favor of Parent,
Merger Sub, the Company and the Surviving Corporation;




          WHEREAS, contemporaneously with the execution and delivery of this Agreement, (i) the Former
Warrant Holders (as defined herein) of Company Warrants (as defined herein) have entered into a
Warrant Termination Agreement in the form attached as Exhibit J (the “Warrant
Termination Agreement”) with the Company and (ii) certain holders of Company Warrants have
entered or will be requested to enter into an Agreement to Terminate Warrants in the form attached
as Exhibit K (“Management Termination of Warrants Agreement”), pursuant to which
all outstanding Company Warrants will be terminated and cancelled as of the Effective Time;




          WHEREAS, contemporaneously with the execution and delivery of this Agreement, the Former
Warrant Holders and the Designated Monitor have entered into a Step Down Share Purchase Right
Agreement in the form attached as Exhibit L (the “Step Down Share Purchase Right
Agreement”).




          WHEREAS, for United States federal income tax purposes, the parties hereto intend that the
Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated
thereunder, and this Agreement is hereby adopted as a plan of reorganization for purposes of
Section 368(a) of the Code and the Treasury Regulations promulgated thereunder;




2









 








          WHEREAS, the Company Voting Stockholders have delivered to Parent and Merger Sub written
commitments (the “Capital Commitments”) pursuant to which, in accordance with the terms and
subject to the conditions set forth therein, such Company Voting Stockholders, have committed to
fund, out of their existing capital commitments to the Company, their pro rata portion of any
capital calls made by the Company pursuant to this Agreement; and




          WHEREAS, as a condition to the consummation of the transactions contemplated hereby, Parent
and the Designated Monitor will enter into an escrow agreement, substantially in the form attached
hereto as Exhibit A (the “Escrow Agreement”), with the independent escrow agent
identified therein (the “Escrow Agent”), pursuant to which, among other things, at Closing,
the Escrow Agent will hold a portion of the Merger Consideration (as defined below) and the
Escrowed Cash (as defined below) to secure certain of Parent’s rights hereunder.




          NOW, THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements contained herein, and intending to be legally bound hereby,
Parent, Merger Sub, the Company and the Designated Monitor (solely for purposes of Sections
3.2, 3.7, 3.9, 3.13, Article V, 8.6, 8.7,
9.1, 9.8, 10.2, Article XII, 13.1, 13.3,
13.6, 14.3, 14.4, Article XV, Article XVI, Article
XVII and Schedule V) hereby agree as follows:




ARTICLE I




DEFINITIONS; INTERPRETATION



               Section 1.1 Definitions. For purposes of this Agreement, the following terms shall
have the following meanings:



          “Accounting Methodologies” means the accounting methodologies set forth in
Schedule I.




          “Actions” means any actions, suits, claims, hearings, proceedings, arbitrations,
mediations, audits, inquiries or investigations (whether civil, criminal, administrative or
otherwise).




          “Affiliate” means, with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common
Control with, such first Person.




          “Agreement” has the meaning ascribed to such term in the preamble.




          “Annual Escrow Distribution Date” has the meaning ascribed to such term in Section
16.3.




          “Annual Portfolio Loss Notice” has the meaning ascribed to such term in Section
14.3(a).




3









 








          “Annual Protection Period” has the meaning ascribed to such term in Schedule III.




          “Annual Verification Period” has the meaning ascribed to such term in Section
14.3(b).




          “Antitrust Laws” means the HSR Act, the Sherman Act, the Clayton Act, the Federal
Trade Commission Act, Foreign Antitrust Laws, and any other United States federal or state or
foreign Laws that are designed to prohibit, restrict or regulate actions having the purpose or
effect of monopolization or restraint of trade.




          “Applicable
Multiple” (i) in respect of any Assisted Acquisition, Other Cash Acquisition or Asset Sale Transaction shall equal zero and
(ii) in respect of any issuance of
Parent Equity Securities for cash shall equal a multiple determined using the formula , where:


     Q = The number of Parent Equity Securities (of the same class as the Parent Equity Securities
actually issued in such transaction) that would be issuable based on a valuation equal to Parent’s
Tangible Book Value immediately prior to such issuance of Parent Equity Securities (applying a
multiple of one) and giving effect to the dilutive effect of all dilutive securities of Parent
(applying the treasury stock method on the basis of a valuation equal to 1x Tangible Book Value in
the case of employee stock options and other dilutive securities); and




     R = The actual number of Parent Equity Securities issued in such transaction.




     In the event of any issuance of Parent Equity Securities in connection with any
merger, consolidation, share exchange or any similar transaction or in connection with any
acquisition of assets by Parent or any of its Subsidiaries, the Applicable Multiple in
respect of such transaction shall be computed in accordance with section 3.16.




     The Applicable Multiple shall equal no more than two (2) in respect of any issuance of
Parent Equity Securities to any officer, director or current direct or indirect shareholder
of Parent (each, an “Inside Purchaser”) (other than in connection with an exercise
of pre-emptive rights by any Inside Purchaser in
connection with an issuance of Parent Equity Securities to any Person other than an
Inside Purchaser).




     “Arbitration Firm” has the meaning ascribed to such term in Section 3.2(b).




     “Asset Sale Transaction” mean any material sale (or series of related sales)
of assets by Parent or any of its Subsidiaries not in the ordinary course of business.



4









 





          “Assisted Acquisition” means an acquisition by Parent or any of its Subsidiaries of
assets and liabilities of another depository institution from the FDIC, as receiver.




          “Average Protected Portfolio Assets” means, for any Annual Protection Period, the sum
of the Protected Portfolio Carrying Value of all Leases and Loans included in the Protected
Portfolio on (i) the date that is six (6) months prior to the last day of such period and (ii) the
last day of such period, divided by two (2).




          “BHCA” means the U.S. Bank Holding Company Act of 1956, as amended, and the
regulations of the Board of Governors of the Federal Reserve System promulgated thereunder.




          “Basket” has the meaning ascribed to such term in Section 12.6(a).




          “Burden” has the meaning ascribed to such term in Section 15.1(e).




          “Business Day” means any day that is not a Saturday, Sunday or other day on which
banking institutions are required or authorized by Law to be closed in Jacksonville, Florida or New
York, New York.




          “Business Line Modification Plan” means the interim operating plan of the Company
providing, among other things, for the winding down and closing of certain businesses of the
Company and the going forward operation of certain other businesses of the Company, as set forth on
Schedule II, as the same may be modified or amended from time to time as contemplated by
Section 9.7.




          “Business Line Modifications” means the actions to be taken by the Company pursuant to
the Business Line Modification Plan.




          “Cap” has the meaning ascribed to such term in Section 12.6(a).




          “Capital Commitments” has the meaning ascribed to such term in the recitals.




          “Capital Lease Obligations” means, as to any Person, the obligations of such Person
under a lease of (or other agreement conveying the right to use) real and/or personal property
which obligations are required to be classified and accounted for as a capital lease and
capitalized on the books of such Person in accordance with GAAP.




          “Capital Raise Transaction” means any (i) issuance by Parent of Parent Equity
Securities, including in any private placement or other sale or issuance or any merger,
consolidation, share exchange or other similar transaction, in consideration for any cash, assets,
property, or other contributed capital of any kind (ii) any Assisted Acquisition, (iii) any Other
Cash Acquisition or (iv) any Asset Sale Transaction.




          “Carrying Value” has the meaning ascribed to such term in Schedule III.





5









 








          “Certificate of Merger” has the meaning ascribed to such term in Section 2.3.




          “Certificates” has the meaning ascribed to such term in Section 3.9(a).




          “Claim Period” has the meaning ascribed to such term in Section 16.2(b).




          “Clayton Act” means the Clayton Act of 1914, as amended.




          “Closing” has the meaning ascribed to such term in Section 2.2.




          “Closing Certificates” has the meaning ascribed to such term in Section 12.1.




          “Closing Date” means the date on which the Closing occurs.




          “Closing Tangible Book Value” has the meaning ascribed to such term in Section
3.2(a).




          “Code” has the meaning ascribed to such term in the recitals.




          “Company” has the meaning ascribed to such term in the preamble.




          “Company Audited Financial Statements” has the meaning ascribed to such term in
Section 4.5.




          “Company Benefit Plans” has the meaning ascribed to such term in Section
4.12(a).




          “Company By-laws” has the meaning ascribed to such term in Section 4.1.




          “Company Certificate” has the meaning ascribed to such term in Section 4.1.




          “Company Closing Balance Sheet” means an audited consolidated balance sheet of the
Company and its Subsidiaries as of the Closing Date prepared in accordance with GAAP in the same
manner GAAP was used in the preparation of the Company’s December 31, 2008 audited balance sheet
and December 31, 2009 audited balance sheet (to the extent available) as if such Company Closing
Balance Sheet was prepared and audited as of a fiscal year end, and audited by Deloitte & Touche
LLP.




          “Company Common Stock” has the meaning ascribed to such term in Section 4.3.




          “Company Compensation Committee” means the compensation committee of the Company.





6









 








          “Company Disclosure Schedule” means the disclosure schedules, dated as of the date
hereof, as delivered by the Company to Parent simultaneously with the execution and delivery of
this Agreement.




          “Company Employees” means those individuals who are employed by the Company and its
Subsidiaries (i) as of the Closing Date or (ii) to the extent in accordance with Section
7.1(b), between the date hereof and the Closing Date.




          “Company Employment Agreements” has the meaning ascribed to such term in Section
4.12(a).




          “Company ERISA Affiliate” means any trade or business, whether or not incorporated,
that together with the Company would be deemed a “single employer” within the meaning of Section
4001(b) of ERISA.




          “Company Financial Statements” has the meaning ascribed to such term in Section
4.5.




          “Company Fundamental Representations” has the meaning ascribed to such term in
Section 12.1.




          “Company Indemnified Parties” has the meaning ascribed to such term in Section
12.3.




          “Company Intellectual Property” means all Intellectual Property owned by the Company
or any of its Subsidiaries.




          “Company Interim Financial Statements” has the meaning ascribed to such term in
Section 4.5.




          “Company Leased Real Property” has the meaning ascribed to such term in Section
4.15(a).




          “Company Material Adverse Effect” means any change, event, occurrence or development
that, individually or in the aggregate, is or would be reasonably likely to have a material adverse
effect on the business, assets, financial condition, Liabilities or results of operations of the
Company and its Subsidiaries, taken as a whole, excluding any such change, event, occurrence or
development resulting from or arising in connection with (i) changes in conditions generally
affecting the United States economy as a whole, or the domestic or international financial markets,
(ii) changes in Law or GAAP, (iii) changes in
the commercial small-ticket leasing and middle market equipment finance industry in the United States generally, (iv) any outbreak or escalation of
hostilities or war or any act of terrorism, (v) any change resulting from or arising out of
hurricanes, earthquakes, floods or other natural disasters; (vi) any failure to meet financial
projections, forecasts, estimates or budgets, or (vii) the announcement of the execution of this
Agreement or the transactions contemplated hereby or actions by Parent, Merger Sub or the Company
required to be taken pursuant to this Agreement; provided, that with respect




7









 







to clauses
(i), (iii) and (iv), such change, event, occurrence or development does not disproportionately
affect the Company and its Subsidiaries, taken as a whole, as compared to other participants of
similar size in the commercial small-ticket leasing and middle market equipment finance industry in
the United States generally.




          “Company Material Contract” has the meaning ascribed to such term in Section
4.9(a).




          “Company Options” means the stock options granted under the Company Stock Plan.




          “Company Preferred Stock” has the meaning ascribed to such term in Section
4.3(a).




          “Company Real Property Leases” means the real property leases, subleases, licenses or
other agreements, including all amendments, extensions, renewals, guaranties or other agreements
with respect thereto, pursuant to which the Company or any of its Subsidiaries is a party.




          “Company RSUs” means the restricted stock units granted under the Company Stock Plan.




          “Company SARs” means the stock appreciation rights granted under the Company Stock
Plan.




          “Company Stock Plan” means the Titan Commercial Finance Group, Inc. 2008 Long-Term
Incentive Plan.




          “Company Stockholders” means all of the holders of outstanding shares of Company
Common Stock.




          “Company Title IV Plan” has the meaning ascribed to such term in Section
4.12(a).




          “Company Voting Stock” has the meaning ascribed to such term in Section
4.3(a).




          “Company Voting Stockholders” has the meaning ascribed to such term in the recitals.




          “Company Warrants” means the warrants to purchase shares of Company Common Stock
issued by the Company to each of the parties listed on Schedule IV hereto on May 9, 2008.




          “Confidentiality Agreement” has the meaning ascribed to such term in Section
9.4(a).





8









 








          “Contract” means any loan or credit agreement, bond, debenture, note, mortgage,
indenture, lease, supply agreement, license agreement, development agreement or other contract,
agreement, arrangement, obligation, commitment or instrument, in each case, whether written or
oral, and including all amendments and modifications thereto.




          “Contributed Capital” in respect of (i) any issuance of Parent Equity Securities,
shall equal the amount of cash or book value (net of assumed liabilities) of assets or property, as
applicable, contributed to Parent in respect of such Capital Stock in consideration of the issuance
thereof (or the Tangible Book Value of any Person acquired by Parent in any merger, consolidation,
share exchange or similar transaction in which Parent issues shares of Capital Stock as
consideration), and (ii) any Assisted Acquisition, Other Cash Acquisition or Asset Sale
Transaction, the amount by which (x) Parent’s Tangible Book Value immediately following such
Assisted Acquisition, Other Cash Acquisition or Asset Sale Transaction and after giving effect
thereto exceeds (y) Parent’s Tangible Book Value immediately prior to such Assisted Acquisition,
Other Cash Acquisition or Asset Sale Transaction. Contributed Capital will be computed after
taking into account all purchase accounting adjustments and is intended to reflect the increase in
Tangible Book Value of Parent resulting from such Capital Raise Transaction.




          “Control” (including the terms “Controlled by” and “under common Control
with”) means, with respect to the relationship between or among two (2) or more Persons, the
possession, directly or indirectly or as trustee, personal representative or executor, of the power
to direct or cause the direction of the affairs or management of a Person, whether through the
ownership of voting securities, as trustee, personal representative or executor, by Contract,
credit arrangement or otherwise.




          “Covered Indemnified Party” has the meaning ascribed to such term in Section
12.4.




          “Covered Persons” has the meaning ascribed to such term in Section 9.5(a).




          “D&O Covered Persons” has the meaning ascribed to such term in Section 9.5(b).




          “DGCL” has the meaning ascribed to such term in the recitals.




          “Derivative Transaction” means any swap transaction, option, warrant, forward purchase
or sale transaction, futures transaction, cap transaction, floor transaction or collar transaction
relating to one or more currencies, commodities, bonds, equity securities, loans, interest rates,
catastrophe events, weather-related events, credit-related events or conditions or any indexes, or
any other similar transaction (including any option with respect to any of these transactions) or
combination of any of these transactions, including collateralized mortgage obligations or other
similar instruments or any debt or equity instruments evidencing or embedding any such types of
transactions, and any related credit support, collateral or other similar arrangements related to
such transactions.





9









 








          “Designated Monitor” means the Designated Monitor set forth in Schedule V.




          “Designated Monitor Fundamental Representations” has the meaning ascribed to such term
in Section 12.1.




          “Dispute” has the meaning ascribed to such term in Section 16.2(b).




          “Dissenting Shares” means shares of Company Common Stock that are issued and
outstanding immediately prior to the Effective Time and that are held by holders (a) who have not
voted in favor of or consented to the Merger and (b) demanded their rights to be paid the fair
value of such shares of Company Common Stock in accordance with Section 262 of the DGCL.




          “Dissenting Stockholder” has the meaning ascribed to such term in Section
3.15.




          “Distributions” has the meaning ascribed to such term in Section 16.7(a).




          “Distribution Assets” has the meaning ascribed to such term in Section
16.7(a).




          “DM Escrow Agreement” has the meaning ascribed to such term in Section
15.1(d).




          “DM Release” has the meaning ascribed to such term in Section 15.2.




          “Effective Time” has the meaning ascribed to such term in Section 2.3.




          “Environmental Laws” means all Laws relating to pollution or protection of human
health, the environment or natural resources, including Laws relating to Releases or threatened
Releases of Hazardous Materials or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, transport or handling of Hazardous Materials and all Laws and regulations
with regard to recordkeeping, notification, disclosure and reporting requirements respecting
Hazardous Materials.




          “Equipment” means all equipment, inventory and other property or assets, including
software, being leased pursuant to a Lease Agreement.




          “ERISA” has the meaning ascribed to such term in Section 4.12(a).




          “Escrow Account” shall mean the account to be created pursuant to the Escrow
Agreement.




          “Escrow Agent” has the meaning ascribed to such term in the recitals.




          “Escrow Agreement” has the meaning ascribed to such term in the recitals.




10









 








          “Escrow Claims” has the meaning ascribed to such term in Section 16.6(a).




          “Escrow Dispute Notice” has the meaning ascribed to such term in Section
16.2(b).




          “Escrow Value” means the value of the Escrowed Assets, comprised of (i) the dollar
value of Escrowed Cash, (ii) the Share Value of
Escrowed Shares, (iii) with respect to any Escrowed Assets replacing other Escrowed Assets,
the dollar value, Share Value or Fair Market Value, as applicable, of the Escrowed Assets being
replaced and (iv) with respect to all other Escrowed Assets, the Fair Market Value thereof.




          “Escrowed Assets” means the Escrowed Cash, the Escrowed Shares and any other assets as
may from time to time be deposited with the Escrow Agent in accordance with this Agreement and the
Escrow Agreement, including any dividends or distributions on the Escrowed Shares.




          “Escrowed Cash” has the meaning ascribed to such term in Section 3.8(a).




          “Escrowed Shares” has the meaning ascribed to such term in Section 3.8(b).




          “Estimated Tangible Book Value” means (i) with respect to the Company, its estimated
Tangible Book Value as of the most recent month-end that is no more than 45 days prior to the date
of delivery by the Company to Parent of its Statement of Estimated Tangible Book Value as adjusted
to reflect (x) any dividends reasonably expected by the Company to be paid to the Company
Stockholders prior to the Effective Time pursuant to Section 7.2 and (y) any capital call
reasonably expected by the Company to be funded by the Company Stockholders prior to the Effective
Time pursuant to Section 7.3 and (ii) with respect to Parent, its estimated Tangible Book
Value as of the most recent month-end that is no more than 45 days prior to the date of delivery by
Parent to the Company of its Statement of Estimated Tangible Book Value in accordance with
Section 3.1(c). The Estimated Tangible Book Value of the Company and of Parent shall be
prepared in accordance with the Accounting Methodologies and in accordance with GAAP in the same
manner GAAP was used in the preparation of the Company’s and Parent’s December 31, 2008 audited
balance sheet and December 31, 2009 audited balance sheet (to the extent available).




          “EverBank” has the meaning ascribed to such term in the recitals.




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




          “Exchange Ratio” means means the ratio of one (1) share of Company Common Stock to X shares of Parent Common Stock, as determined pursuant to the following formula:




          , where:








11









 




 


	 		, where:






     A = (i) the aggregate number of shares of Parent Common Stock, on a
fully diluted basis assuming conversion in full of all outstanding shares of
Parent Preferred Stock, and accounting for shares of Parent Common Stock
issuable upon the exercise of any dilutive securities (including any employee
stock options) using the treasury stock method assuming a valuation of two
(2) times Parent Tangible Book Value, immediately prior to the Effective
Time, MINUS




     (ii) the aggregate number of Initial Investment Shares;




     T = the Company’s Tangible Book Value immediately prior to the Effective
Time (and after giving effect to the distribution of the Initial Investment
Shares to Company Stockholders pursuant to Section 7.2 and the
funding of the Escrowed Cash pursuant to Section 3.8);




     E = Parent’s Tangible Book Value immediately prior to the Effective Time
(without giving effect to any payments to be made or liabilities to be
assumed by Parent in respect of the Business Line Modifications pursuant to
Section 9.7 or the Covered Expenses pursuant to Section
17.1);




     I = the Initial Investment Amount;




     B = shall initially equal two (2) as of the date of this Agreement.
Thereafter, upon the consummation of any
Capital Raise Transaction, variable “B” will be adjusted
such that, after giving effect to such Capital Raise Transaction, it
equals , where:


     Eb = Parent’s Tangible Book Value immediately prior
to the consummation of such Capital Raise Transaction, MINUS
the Initial Investment Amount;




     Bb = variable “B” as in effect immediately prior to
the consummation of such Capital Raise Transaction;




     N = the Contributed Capital in respect of such Capital Raise
Transaction; and



12









 






     M = the Applicable Multiple in respect of such Capital Raise
Transaction.




     In the event of any merger, consolidation, share exchange or any
similar transaction or any other acquisition of assets by Parent or
any of its Subsidiaries for consideration consisting of a mix of
Parent Equity Securities and cash or other assets, such transaction
shall be deemed for purposes of computing variable “B” to consist of
two separate transactions consisting of (x) an acquisition, in
consideration of Parent Equity Securities with a value equal to the
Tangible Book Value associated with (if Parent Common Stock) or value
of such Parent Equity Securities, of a pro rata portion of the net
assets acquired by Parent and its Subsidiaries in such transaction in
the same proportion as the amount of Parent’s Tangible Book Value (if
Parent Common Stock) or value so attributed to such Parent Equity
Securities bears to the amount of cash or other assets paid by Parent
and its Subsidiaries in such transaction and (y) an acquisition, in
consideration of cash or other assets paid by Parent, of a pro rata
portion of the net assets acquired by Parent and its Subsidiaries in
such transaction in the same proportion as the amount of cash or
other assets paid by Parent in such transaction bears to the amount
of Parent’s Tangible Book Value (if Parent Common Stock) or value so
attributed to such Parent Equity Securities and (iii) in the event of
any capital raise transaction not specifically described herein or
the application of the foregoing provisions to which is uncertain the
parties shall work in good faith to determine an Applicable Multiple
in respect of such transaction in a manner consistent with the intent
of the parties (provided that if the parties cannot so agree in good
faith the Applicable Multiple will be determined by the Investment
Banking Firm in accordance with Section 3.16(e), (f) and (g)).



     Z = the number of shares of Company Common Stock outstanding immediately prior to the
Effective Time.



          “Fair Market Value” means as of any date of determination (i) as to securities that
are then listed on a national securities exchange, a price per security equal to the closing sales
price per security on the national securities exchange on which such securities are principally
traded for the last preceding date on which there was a sale of securities on such exchange, or
(ii) as to securities that are then traded in an over-the-counter market, a price per security
equal to the average of the closing bid and asked prices per security in such over-the-counter
market for the last






13









 







preceding date on which there was a sale of securities in such market, or (iii) as to
securities that are not then listed on a national securities exchange or traded in an
over-the-counter market, and as to any other asset, the fair market value thereof as reasonably
determined by Parent and the Designated Monitor in good faith on the basis of such information as
they consider appropriate; provided, however, that if Parent and the Designated
Monitor are unable to agree to the determination of fair market value, then Parent and the
Designated Monitor shall appoint a nationally recognized independent appraisal firm to determine
the fair market value.




          “FBCA” has the meaning ascribed to such term in the recitals




          “FDIC” has the meaning ascribed to such term in Section 6.1(c).




          “Final Tangible Book Value” has the meaning ascribed to such term in Section
3.2(b).




          “FMV of a Company Share” has the meaning ascribed to such term in Section
3.5(a).




          “Foreign Antitrust Laws” means the applicable requirements of antitrust competition or
other similar Laws, rules, regulations and judicial doctrines of jurisdictions other than the
United States and the European Union or of investment Laws relating to foreign ownership.




          “Former Warrant Holders” means TPG Partners VI, L.P., TPG Tortoise AIV, L.P., New
Mountain Partners III, L.P., Aquiline Financial Services Fund L.P., Aquiline Financial Services
Fund (Offshore) L.P., Diamond Castle Partners IV, L.P., Diamond Castle Partners IV-A, L.P. and Deal
Leaders Funds, L.P.




          “Funding I Indenture” means the Third Amended and Restated Indenture, dated as of May
28, 2008, among USXL Funding I, LLC, as issuer, Tygris Vendor Finance, Inc. (formerly known as US
Express Leasing, Inc.), as servicer, Lyon Financial Services, Inc. (d/b/a U.S. Bank Portfolio
Services), as back-up servicer, U.S. Bank National Association, as indenture trustee, and U.S. Bank
National Association, as custodian, as amended, restated, modified or supplemented as of the date
hereof.




          “Funding II Indenture” means the Indenture, dated as of November 1, 2006, among USXL
Funding II, LLC, as issuer, Tygris Vendor Finance, Inc. (formerly known as US Express Leasing,
Inc.), as servicer, Lyon Financial Services, Inc. (d/b/a U.S. Bank Portfolio Services), as back-up
servicer, U.S. Bank National Association, as indenture trustee, and U.S. Bank National Association,
as custodian, as amended, restated, modified or supplemented as of the date hereof.




          “GAAP” means the generally accepted accounting principles in the United States.




14









 








          “Governmental Entity” means any federal, state, local or foreign government, any
court, administrative, regulatory or other governmental agency, commission or authority or any
organized securities exchange, including the OTS and any other banking or financial services
regulatory authority.




          “Governmental Filing” means any filing or registration with, notification to, or
authorization, consent or approval of any Governmental Entity.




          “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.




          “Hazardous Materials” means any substance, material, pollutant or waste which is
regulated by Environmental Laws because of its hazardous or deleterious qualities, including any
material, substance or waste which is defined as a “hazardous waste,” “hazardous substance,”
“hazardous material,” “extremely hazardous waste,” “dangerous substance,” “explosive,”
“contaminant,” “pollutant,” “toxic substances and/or waste,” “inhalation hazard,” “industrial
residues” or by words of similar meaning under any provision of Environmental Law, and including
but not limited to petroleum, petroleum products, asbestos, asbestos-containing material, urea
formaldehyde, polychlorinated biphenyls (PCBs), toxic mold and carcinogen or suspected carcinogens.




          “HOLA” has the meaning ascribed to such term in Section 4.4(d).




          “Indebtedness” means, with respect to any Person, without duplication, all obligations
in respect of (i) borrowed money, (whether or not for cash and by any means) (ii) indebtedness
evidenced by bonds, notes, debentures or similar instruments, (iii) Capital Lease Obligations (for
the avoidance of doubt, in the case of the Company and its Subsidiaries, not including any Lease
Agreement or Loan Agreement), (iv) such Persons that are secured by any Lien on property owned or
acquired by such Persons, whether or not the obligations secured thereby have been assumed, (v) the
deferred purchase price of assets, services or securities (other than ordinary course trade
accounts payable not overdue for more than thirty (30) days), (vi) conditional sale, title,
retention or similar arrangements, (vii) all letters of credit issued for the account of such
Person, (viii) reimbursement obligations, whether contingent or matured, with respect to bankers’
acceptances, surety bonds, other financial guarantees and interest rate protection agreements
(without duplication of other indebtedness supported or guaranteed thereby), (ix) the net
Liabilities under any hedging transaction (x) interest, premium, penalties and other amounts owing
in respect of the items described in the foregoing clauses (i) through (ix), and (xi) the guaranty
of the Indebtedness of any other Person.




          “Indemnifying Party” has the meaning ascribed to such term in Section 12.4.




          “Initial Investment” has the meaning ascribed to such term in the recitals.




          “Initial Investment Amount” has the meaning ascribed to such term in the recitals.





15









 








          “Initial Investment Shares” means the shares of Parent Voting Common Stock purchased
by the Company pursuant to the Initial Investment.




          “Initial Public Offering” means the completion of an underwritten public offering of
shares of Parent Common Stock pursuant to an effective registration statement filed pursuant to the
Securities Act, in connection with which the Parent Common Stock is listed for trading on the New
York Stock Exchange, the NASDAQ Stock Market or other national securities exchange.




          “Intellectual Property” means, in any and all jurisdictions worldwide, all (i)
patents, utility models, inventions and discoveries, statutory invention registrations, mask works,
invention disclosures, and industrial designs, community designs and other designs, (ii)
Trademarks, (iii) works of authorship (including software) and copyrights, and moral rights therein
and thereto, (iv) trade secrets, (v) registrations, applications, renewals, continuations,
continuations-in-part, substitutions and extensions for any of the foregoing in (i)-(iv), and (vi)
any and all other intellectual property rights.




          “Investment Banking Firm” has the meaning ascribed to such term in Section
3.16.




          “Irrevocable Written Consents” has the meaning ascribed to such term in the recitals.




          “IRS” means the Internal Revenue Service.




          “Joint Escrow Notice” has the meaning ascribed to such term in Section
16.1(d).




          “Knowledge” means, as to a particular matter, the actual knowledge, after reasonable
inquiry, (i) with respect to the Company, of Frederick Wolfert, Laird Boulden, Tim Eichenlaub,
Douglas Hollowell, Steven Kluger, Sara McAuley, Jim McGrane, Martin McGrath, Jeff Hilzinger, Steve
O’Conner, Joanne Harmon, Bob Wille and Denis Stypulkoski and (ii) with respect to Parent and Merger
Sub, of Robert M. Clements, Blake Wilson, Gary Meeks, John Surface and Thomas A. Hajda.




          “Law” means any statute, law, ordinance, rule, regulation or code (federal, state,
regional, local, municipal or foreign) issued, promulgated, entered or authorized into by or with
any Governmental Entity.




          “Lease” means a lease subject to a Lease Agreement.




          “Lease Agreement” has the meaning ascribed to such term in Section 4.19(a).




          “Lease Documents” means a Lease Agreement, together with any amendments or other
instruments, agreements and documents executed and/or delivered in connection therewith.





16









 








          “Letter of Transmittal” has the meaning ascribed to such term in Section
3.9(a).




          “Liability” means any loss, liability, Indebtedness, obligation, deficiency, interest,
Tax, penalty, fine, demand, judgment, Action, damages cost or expense of any kind or nature
whatsoever, whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether fixed or unliquidated, and whether due or to
become due.




          “Liens” means any mortgage, pledge, hypothecation, assignment, mandatory deposit
arrangement, encumbrance, security interest, charge, lien (statutory or other), preference,
priority or other collateral agency agreement of any kind or nature whatsoever which has the
substantial effect of constituting a security interest, including, without limitation, (i) any
conditional sale or other title retention agreement, (ii) with respect to securities, any purchase
option, call or similar right of a third party with respect to such securities, and (iii) the
filing of any financing statement or similar instrument under the UCC or comparable law of any
jurisdiction, domestic or foreign.




          “Loan” means a loan subject to a Loan Agreement.




          “Loan Agreement” has the meaning ascribed to such term in Section 4.19(a).




          “Loan Documents” means with respect to any Loan Agreement, each amendment and each
other instruments, agreements or other documents executed and/or delivered in connection therewith.




          “Losses” has the meaning ascribed to such term in Section 12.2.




          “LT Documents” has the meaning ascribed to such term in Section 3.9(b).




          “Management Termination of Warrants Agreement” has the meaning ascribed to such term
in the recitals.




          “MarCap Escrow Agreement” means the Escrow Agreement, dated as of June 16, 2008, by
and among MarCap LLC, the Company and JPMorgan Chase Bank, National Association.




          “MarCap Property Taxes” means any personal property Taxes in respect of Equipment
acquired by the Company or any of its Subsidiaries pursuant to the Asset Purchase Agreement, dated
as of May 8, 2008, by and among MarCap LLC, the Company and Tygris Asset Finance Inc.




          “MarCap Property Taxes Claim” means claims relating to any Losses incurred by the
Company, the Surviving Corporation or any of their respective Subsidiaries or Affiliates with
respect to MarCap Property Taxes.





17









 








          “Market Value” has the meaning ascribed to such term in Section 3.16.




          “Material Company Intellectual Property” means Company Intellectual Property that is
material to the business of the Company or any of its Subsidiaries.




          “Merger” has the meaning ascribed to such term in the recitals.




          “Merger Consideration” has the meaning ascribed to such term in Section
3.1(a).




          “Merger Consideration Allocation Schedule” has the meaning ascribed to such term in
Section 3.13(c).




          “Merger Consideration Schedule” has the meaning ascribed to such term in Section
3.13(a).




          “Merger Consideration Dispute Notice” has the meaning ascribed to such term in
Section 3.13(a).




          “Merger Sub” has the meaning ascribed to such term in the preamble.




          “Merger Sub By-laws” has the meaning ascribed to such term in Section 6.1(a).




          “Merger Sub Certificate” has the meaning ascribed to such term in Section
6.1(a).




          “Merger Sub Common Stock” has the meaning ascribed to such term in Section
6.3(a).




          “Non-Consenting Stockholders” has the meaning ascribed to such term in Section
7.9.




          “No Recoverable Loss Notice” has the meaning ascribed to such term in Section
14.3(a).




          “Notice of Objection” has the meaning ascribed to such term in Section
14.3(b).




          “OTS” means the Office of Thrift Supervision and any successor thereto.




          “Obligor” means any lessee party, borrower, pledgor, guarantor, surety or other party
obligated to pay or perform any obligations under or in respect of a Lease Agreement or Loan
Agreement or the Equipment covered by a Lease Agreement (excluding the lessor party thereunder, but
otherwise including any guarantor of a Lease Agreement or any vendor, manufacturer or similar party
under a remarketing agreement, residual guaranty or similar agreement).





18









 








          “Order” means any order, writ, injunction, decree, judgment, ruling, arbitration award
or stipulation issued, promulgated or entered into by or with any Governmental Entity.




          “Ordinary Course” or “Ordinary Course of Business” means the ordinary and
usual course of day-to-day operations of the Company and its Subsidiaries consistent with past
practice since January 1, 2009; it being understood that work-outs with respect to Lease Agreements
and Loan Agreements are in the ordinary course of the Company’s and its Subsidiaries’ businesses.




          “Other Cash Acquisition” means any acquisition (other than an Assisted Acquisition) by
Parent or any of its Subsidiaries in which Parent or any such Subsidiary pays cash as consideration
as a result of which Parent’s Tangible Book Value immediately following and after giving effect to
such acquisition is greater than Parent’s Tangible Book Value immediately prior to such
acquisition.




          “PBGC” has the meaning ascribed to such term in Section 4.12(d).




          “Parent” has the meaning ascribed to such term in the preamble.




          “Parent Audited Financial Statements” has the meaning ascribed to such term in
Section 6.5.




          “Parent Benefit Plans” has the meaning ascribed to such term in Section
6.20(a).




          “Parent By-laws” has the meaning ascribed to such term in Section 6.1(a).




          “Parent Capital Stock” means, together, the issued and outstanding shares of Parent
Common Stock and Parent Preferred Stock.




          “Parent Certificate” has the meaning ascribed to such term in Section 6.1(a).




          “Parent Claim Amount” has the meaning ascribed to such term in Section
16.1(c).




          “Parent Claim Basis” has the meaning ascribed to such term in Section 16.1(c).




          “Parent Claim Notice” has the meaning ascribed to such term in Section
16.1(c).




          “Parent Claim Notice Date” has the meaning ascribed to such term in Section
16.1(c).




          “Parent Closing Balance Sheet” means an unaudited consolidated balance sheet of Parent
and its Subsidiaries as of the Closing Date prepared in accordance with




19









 







GAAP in the same manner
GAAP was used in the preparation of Parent’s December 31, 2008 audited balance sheet and December
31, 2009 audited balance sheet (to the extent available) as if such Parent Closing Balance Sheet
were prepared and audited as of a fiscal year end, and audited by Deloitte & Touche LLP.




          “Parent Common Stock” means Parent Voting Common Stock and Parent Non-Voting Common
Stock.




          “Parent Disclosure Schedule” means the disclosure schedules, dated as of the date
hereof, as delivered by Parent to the Company simultaneously with the execution and delivery of
this Agreement.




          “Parent Employment Agreements” has the meaning ascribed to such term in Section
6.20(a).




          “Parent Equity Securities” means Parent Common Stock, Parent Preferred Stock or any
other equity security of Parent, or any warrant, option, right or any other security or instrument
exercisable, convertible or exchangeable for or into, directly or indirectly, Parent Common Stock,
Parent Preferred Stock or any other equity security of Parent.




          “Parent ERISA Affiliate” means any trade or business, whether or not incorporated,
that together with Parent would be deemed a “single employer” within the meaning of Section 4001(b)
of ERISA.




          “Parent Financial Statements” has the meaning ascribed to such term in Section
6.5.




          “Parent Fundamental Representations” has the meaning ascribed to such term in
Section 12.1.




          “Parent Indemnified Parties” has the meaning ascribed to such term in Section
12.2.




          “Parent Indemnity Claim” has the meaning ascribed to such term in Section
16.1(c).




          “Parent Interim Financial Statements” has the meaning ascribed to such term in
Section 6.5.




          “Parent Material Adverse Effect” means any change, event, occurrence or development
that, individually or in the aggregate, is or would be reasonably likely to have a material adverse
effect on the business, assets, financial condition, Liabilities or results of operations of Parent
and its Subsidiaries, taken as a whole, excluding any such change, event, occurrence or development
resulting from or arising in connection with (i) changes in conditions generally affecting the
United States economy as a whole, or the domestic or international financial markets, (ii) changes
in
Law or GAAP, (iii) changes in




20









 







the banking or mortgage services industries generally, (iv) any
outbreak or escalation of hostilities or war or any act of terrorism, (v) any change resulting from
or arising out of hurricanes, earthquakes, floods or other natural disasters; (vi) any failure to
meet financial projections, forecasts, estimates or budgets, or (vii) the announcement of the
execution of this Agreement or the transactions contemplated hereby or actions by Parent, Merger
Sub or the Company required to be taken pursuant to this Agreement; provided, that with
respect to clauses (i), (iii) and (iv), such change, event, occurrence or development does not
disproportionately affect Parent and its Subsidiaries, taken as a whole, as compared to other
participants of similar size in the banking or mortgage services industries generally.




          “Parent Material Contract” has the meaning ascribed to such term in Section
6.9(a).




          “Parent Non-Voting Common Stock” means the non-voting common stock of Parent, par
value $0.01 per share, to be authorized in the amendment to the Parent Certificate contemplated in
Section 8.5.




          “Parent Preferred Stock” has the meaning ascribed to such term in Section
6.3(b).




          “Parent Series A Preferred Stock” has the meaning ascribed to such term in Section
6.3(b).




          “Parent Series B Preferred Stock” has the meaning ascribed to such term in Section
6.3(b).




          “Parent Title IV Plan” has the meaning ascribed to such term in Section
6.20(a).




          “Parent Voting Common Stock” has the meaning ascribed to such term in the recitals.




          “Parent Voting Stock” means the Parent Voting Common Stock and the Parent Preferred
Stock.




          “PayNet Agreement” has the meaning ascribed to such term in Section 9.1(d).




          “Permit” means all approvals, authorizations, certificates, filings, franchises,
licenses, notices and permits issued by any Governmental Entity.




          “Permitted Liens” means (i) Liens for Taxes, assessments and governmental charges or
levies not yet due and payable or due but not delinquent or, being contested in good faith by
appropriate proceedings and for which adequate reserves are maintained on the financial records of
the Company and its Subsidiaries; (ii) Liens imposed by Law, such as materialmen’s, mechanics’,
carriers’, workmen’s and repairmen’s liens and other similar Liens arising in the ordinary course
of business; (iii)




21









 







ordinary course pledges or deposits to secure obligations under workers’
compensation Laws or similar legislation or to secure public or statutory obligations; (iv)
deposits to secure the performance of bids, trade contracts (other than for borrowed money),
leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business consistent with past practice that,
individually or in the aggregate, are not material in amount; (v) with respect to real estate,
survey exceptions, easements minor defects or irregularities in title and other such encumbrances
on title to real property, provided, that such matters, individually or in the aggregate,
do not materially impair the current use, utility or value of the underlying real property; (vi)
with regard to Intellectual Property, gaps in the chain of title or other Liens that are readily
apparent from the records of the applicable intellectual property registries, including the United
States Patent and Trademark Office and the United States Copyright Office; (vii) all applicable
zoning, entitlement, conservation restrictions and other land use and environmental regulations
imposed (in each case) by a Governmental Entity, which do not materially impair the current use of
the underlying asset; and (viii) Liens securing the obligations of the Company or any of its
Subsidiaries under secured Indebtedness of the Company or any of its Subsidiaries, (ix) Liens
reflected or reserved against or otherwise disclosed in the most recent balance sheet, and (x) as
to any lease affecting Company Leased Real Property, any Liens affecting solely the interest of the
landlord thereunder and not the interest of the tenant thereunder, which do not materially impair
the value entity, or use of such Real Property Lease.




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




          “Portfolio Loss Protection Period” has the meaning ascribed to such term in
Section 14.1.




          “Portfolio Losses” means all Losses arising out of the Protected Portfolio.




          “Post-Indemnity MarCap Recovery” has the meaning ascribed to such term in Section
8.6.




          “Post-Closing Period” means a taxable period, excluding a Straddle Period that, to the
extent it relates to the Company or any of its Subsidiaries, begins after the Closing Date.




          “Pre-Closing Period” means a taxable period, excluding a Straddle Period, that, to the
extent such period relates to the Company or any of its Subsidiaries, ends on or before the Closing
Date.




          “Protected Annual Portfolio Losses” has the meaning ascribed to such term in
Schedule III.




          “Protected Portfolio” means, as reflected on the Company Closing Balance Sheet, all
(i) Leases and Loans, in each case, the receivables for which are reflected as “Equipment Lease and
Loan Receivables” and (ii) “Equipment under Operating Leases.”





22









 








          “Protected Portfolio Carrying Value” means the Carrying Value of the Leases and Loans
in the Protected Portfolio as of the relevant date.




          “Protected Portfolio Protected Value” means the Protected Value (as defined in
Schedule III) of the Leases and Loans in the Protected Portfolio as of the relevant date.




          “Refunds” has the meaning ascribed to such term in Section 13.6(e).




          “Registration Rights Agreement” means the registration rights agreement dated as of
the date hereof, by and between Parent and the Company.




          “Related Party Transaction” has the meaning ascribed to such term in Section
4.17(a).




          “Release” means any release, spill, emission, discharge, leaking, pumping, injection,
deposit, disposal, dispersal, leaching or migration into the indoor or outdoor environment
(including, without limitation, ambient air, surface water, groundwater and surface or subsurface
strata) or into or out of any property, including the movement of Hazardous Materials through or in
the air, soil, surface water, groundwater or property.




          “Release Date” has the meaning ascribed to such term in Section 16.1.




          “Replacement Escrowed Assets” has the meaning ascribed to such term in Section
16.5(b).




          “Representatives” means, with respect to any Person, such Person’s directors,
officers, managers, or employees or any investment banker, financial advisor, attorney, accountant
or other advisor, agent or representative.




          “Reserve” has the meaning ascribed to such term in Section 16.2(a).




          “Restraints” has the meaning ascribed to such term in Section 10.1(c).




          “Rollover Annual Portfolio Gain” has the meaning ascribed to such term in Schedule
III.




          “Scheduled Payments” means the monthly or periodic rental payments or installments of
principal and interest under the terms of the applicable Lease Agreement or Loan Agreement.




          “Securities Act” means the Securities Act of 1933, as amended.




          “Share Value” means a per-share amount equal to (i) variable T as computed pursuant to
the definition of “Exchange Ratio”, representing the Company’s Tangible Book Value immediately
prior to the Effective Time divided by (ii) variable Y as computed pursuant to the definition of
“Exchange Ratio”, representing the aggregate number of shares of Parent Common Stock included in
the Merger Consideration.





23









 








          “Sherman Act” means the Sherman Antitrust Act of 1890, as amended.




          “Standard Forms” has the meaning ascribed to such term in Section 4.19(e).




          “Statement” has the meaning ascribed to such term in Section 3.16.




          “Step-Down Date” has the meaning ascribed to such term in Section 16.4(b).




          “Step Down Share Purchase Right Agreement” has the meaning ascribed to such term in
the recitals.




          “Stock Purchase Agreement” has the meaning ascribed to such term in the recitals.




          “Stockholders Agreement” has the meaning ascribed to such term in the recitals.




          “Stockholder Waiver and Release Agreement” has the meaning ascribed to such term in
the recitals.




          “Straddle Period” means a taxable period that, to the extent it relates to the Company
or any of its Subsidiaries, includes, but does not end on, the Closing Date.




          “Subaccounts” has the meaning ascribed to such term in Section 16.1(b).




          “Subsidiary” means, with respect to any Person, any other Person, of which a majority
of the outstanding voting securities, other voting rights or voting partnership interests is owned
directly or indirectly by such first person (or, if there are no such voting interests, fifty
percent (50%) or more of the equity interests of which is owned directly or indirectly by such
first Person).




          “Survival Period” has the meaning ascribed to such term in Section 12.1.




          “Surviving Corporation” has the meaning ascribed to such term in the recitals.




          “TAF” has the meaning ascribed to such term in Section 4.19(c).




          “TAF Credit Agreement” means the Credit Agreement, dated as of June 16, 2008, among
TAF Funding I, LLC, as borrower, Tygris Asset Finance, Inc., as servicer, Deutsche Bank AG, New
York Branch and Tahoe Funding Corp., LLC, as term loan lenders and as revolving loan lenders, the
other financial institutions party thereto as term loan lenders and revolving loan lenders,
Deutsche Bank Securities Inc., as agent, Deutsche Bank AG, New York Branch, as Deutsche Bank
funding agent, the other funding agents party thereto, U.S. Bank National Association, as custodian
and depository bank, Deutsche Bank Securities Inc., as arranger, and Lyon Financial Services, Inc.
(d/b/a U.S.




24









 







Bank Portfolio Services), as back-up servicer, as amended, restated, modified or
supplemented as of the date hereof.




          “TAG” has the meaning ascribed to such term in Section 6.1(c).




          “TBV Dispute Notice” has the meaning ascribed to such term in Section 3.2(b).




          “Tangible Book Value” means, with respect to a Person, the total net asset value of
such Person and its Subsidiaries on a consolidated basis less goodwill, intangibles and, with
respect to the Company, Transaction Charges (as defined in Schedule I), in each case,
calculated in accordance with the Accounting Methodologies.




          “Tangible Book Value Statement” has the meaning ascribed to such term in Section
3.2(a).




          “Tax” or “Taxes” means (i) all federal, state, local or foreign taxes,
charges, fees, imposts, levies or other assessments, including without limitation, all income,
gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees,
assessments and charges of any kind whatsoever and (ii) all interest, penalties, fines, additions
to Tax or additional amounts imposed by any Taxing Authority in connection with any item described
in clause (i).




          “Tax Claim” has the meaning ascribed to such term in Section 13.6(a).




          “Taxing Authority” means a Governmental Entity or any subdivision, agency, commission
or authority thereof, or any quasi-governmental or private body having jurisdiction over the
assessment, determination, collection or imposition of any Tax (including the IRS).




          “Tax Return” means all returns and reports (including elections, declarations,
disclosures, schedules, estimates and information returns) required to be supplied to a Taxing
Authority relating to Taxes.




          “Termination Date” has the meaning ascribed to such term in Section 11.1(b).




          “Termination Date Extension Period” has the meaning ascribed to such term in
Section 11.1(b).




          “Third Party Claim” has the meaning ascribed to such term in Section 12.4.




          “Trademarks” means all trademarks, service marks, trade names, logos, slogans, trade
dress, Internet domain names and uniform resource
locators associated




25









 







therewith, whether registered or unregistered, including the goodwill
symbolized thereby or associated therewith.




          “Transfer Taxes” means all sales, use, real property transfer, real property gains,
transfer, stamp, registration, documentary, recording or similar taxes incurred in connection with
the purchase and sale of shares.




          “Trust Document” means any agreements, instruments and other documents executed and/or
delivered in connection with any trust preferred securities issued by Parent or any of its
Subsidiaries or Affiliates.




          “Titan Debt Facilities” means: (i) the Funding I Indenture, (ii) the Funding II
Indenture, (iii) the TAF Credit Agreement, and (iv) the TVF Loan Agreement.




          “TVF” has the meaning ascribed to such term in Section 4.19(c).




          “TVF Loan Agreement” means the Second Amended and Restated Loan and Security
Agreement, dated as of August 22, 2006, by and among Tygris Vendor Finance, Inc. (formerly known as
US Express Leasing, Inc.), as borrower, the lenders party thereto from time to time, and Wells
Fargo Foothill, Inc., as arranger and administrative agent, as amended, restated, modified or
supplemented as of the date hereof.




          “USXL Escrow Agreement” means the Escrow Agreement, dated as of May 28, 2008, among
the selling preferred stockholders of US Express Leasing, Inc., the Company and JPMorgan Chase
Bank, National Association, as escrow agent.




          “USXL Escrow Assets” has the meaning ascribed to such term in Section 8.7.




          “USXL Indemnity Claim” means the claim brought by the Company for recovery of escrow
amounts related to an alleged breach of representation and warranty by the sellers in the Preferred
Stock Purchase Agreement, dated April 30, 2008, among US Express Leasing, Inc., the Preferred
Stockholders of US Express Leasing, Inc. and the Company, as amended, in connection with the
acquisition of US Express Leasing, Inc.




          “WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988, as
amended.




          “Warrant Escrow Account” has the meaning ascribed to such term in Section
3.7(b).




          “Warrant Escrow Agent” has the meaning ascribed to such term in Section
3.7(b).




          “Warrant Escrow Agreement” has the meaning ascribed to such term in Section
3.7(b).





26









 








          “Warrant Termination Agreement” has the meaning ascribed to such term in the recitals.




               Section 1.2 Interpretation and Construction. Unless otherwise expressly provided, for
the purposes of this Agreement, the following rules of interpretation shall apply:




     (a) The article and section headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or interpretation hereof.




     (b) When a reference is made in this Agreement to an article or a section, paragraph,
exhibit or schedule, such reference shall be to an article or a section, paragraph, exhibit
or schedule hereof unless otherwise clearly indicated to the contrary.




     (c) Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without limitation.”




     (d) The words “hereof,” “herein” and “herewith” and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement.




     (e) The word “extent” in the phrase “to the extent” shall mean the degree to which a
subject or other thing extends, and such phrase shall not mean simply “if.”




     (f) The word “or” shall not be exclusive.




     (g) The meaning assigned to each term defined herein shall be equally applicable to
both the singular and the plural forms of such term, and words denoting any gender shall
include all genders. Where a word or phrase is defined herein, each of its other
grammatical forms shall have a corresponding meaning.




     (h) A reference to “$,” “U.S. dollars” or “dollars” shall mean the legal tender of the
United States of America.




     (i) A reference to any period of days shall be deemed to be to the relevant number of
calendar days, unless otherwise specified.




     (j) Unless otherwise defined, a reference to any accounting term shall have the
meaning as defined under GAAP.




     (k) The parties have participated jointly in the negotiation and drafting of this
Agreement (including the Schedules and Exhibits hereto). In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be



27









 







construed as if
drafted jointly by the parties, and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions hereof.



ARTICLE II




THE MERGER



               Section 2.1 The Merger. Upon the terms and subject to the conditions of this
Agreement, and in accordance with the DGCL, Merger Sub shall be merged with and into the Company at
the Effective Time. As a result of the Merger, the separate corporate existence of Merger Sub
shall cease and the Company shall continue as the Surviving Corporation and a direct wholly-owned
Subsidiary of Parent.



               Section 2.2 Closing. The closing of the Merger (the “Closing”) shall take
place at 10:00 a.m., prevailing Eastern Time, on the third Business Day following the day on which
each of the conditions set forth in Article X have been satisfied or (to the extent
permitted by applicable Law) waived, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP,
Four Times Square, New York, New York 10036-6522, or such other time, date or place as agreed to in
writing by Parent and the Company; provided, however, that the parties shall
cooperate in good faith to determine whether a month end closing is preferable.



               Section 2.3 Effective Time. Upon the terms and subject to the conditions of this
Agreement, at the Closing, the parties shall cause the Merger to be consummated by filing with the
Secretary of State of the State of Delaware a certificate of merger (the “Certificate of
Merger”), in such form as required by, and executed and acknowledged by the parties in
accordance with, the relevant provisions of the DGCL, and Parent shall make or cause to be made all
other filings or recordings required under the DGCL in connection with the Merger. The Merger
shall become effective upon the time when the Certificate of Merger has been duly filed with the
Secretary of State of the State of Delaware or at such later time as Parent and the Company shall
agree in writing and shall specify in the Certificate of Merger (the time at which the Merger
becomes effective being hereinafter referred to as the “Effective Time”).



               Section 2.4 Effects of the Merger. The Merger shall have the effects set forth herein
and in the applicable provisions of the DGCL. Without limiting the generality of the foregoing and
subject thereto and to the terms of this Agreement, at the Effective Time, all the property,
rights, privileges, immunities, powers and franchises of the Company and Merger Sub shall vest in
the Surviving Corporation and all debts, Liabilities and duties of the Company and Merger Sub shall
become the debts, Liabilities and duties of the Surviving Corporation.



               Section 2.5 Certificate of Incorporation and By-laws.




     (a) The Company Certificate, as in effect immediately prior to the Effective Time,
shall be the certificate of incorporation of the Surviving



28









 







Corporation. At the Effective
Time, the certificate of incorporation of the Surviving Corporation shall be amended and
restated in its entirety to read as set forth in Exhibit B hereto until thereafter
further amended or in accordance with the DGCL and as provided in such certificate of
incorporation.




     (b) The parties hereto shall take all actions necessary so that the by-laws of Merger
Sub, in effect immediately prior to the Effective Time shall be the by-laws of the
Surviving Corporation, until thereafter amended as provided therein or in accordance with
the DGCL.



               Section 2.6 Directors and Officers of the Surviving Corporation.




     (a) The directors of Merger Sub immediately prior to the Effective Time shall be the
directors of the Surviving Corporation until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case may be.




     (b) The officers of Merger Sub immediately prior to the Effective Time shall be the
officers of the Surviving Corporation until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case may be.


     Section 2.7 Contribution of the Surviving Corporation. Immediately following the Merger,
Parent shall contribute all of the issued and outstanding shares of capital stock of the Surviving
Corporation to EverBank, resulting in the Surviving Corporation becoming a direct wholly-owned
subsidiary of EverBank.




ARTICLE III




EFFECT OF THE MERGER ON CAPITAL INTERESTS;

CLOSING MECHANICS



               Section 3.1 Merger Consideration.




     (a) It is understood and agreed among the parties that the aggregate consideration
payable by Parent hereunder is the aggregate number of shares of Parent Common Stock
represented by variable Y as computed pursuant to the definition of “Exchange Ratio”,
subject to adjustment pursuant to Section 3.2 (the “Merger Consideration”).
Such Merger Consideration shall not be subject to adjustment based upon any changes in the
number of shares of Company Common Stock outstanding or the exercise or settlement of any
Company Options, Company Warrants or other securities issued by the Company, or any cash
payments in respect thereof.




     (b) At the Effective Time, by virtue of the Merger and without any action on the part
of the Company Stockholders, each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than



29









 







any shares of Company Common Stock
canceled pursuant to Section 3.3) shall be canceled and extinguished and converted
into the right to receive, upon the terms and subject to the conditions of this Agreement
(including the terms and conditions relating to the Escrow Account, the Warrant Escrow
Agreement and the Former Warrant Holders), the number of shares of Parent Voting Common
Stock as determined pursuant to the Exchange Ratio and set forth on the Merger
Consideration Schedule; provided, however, that Parent Non-Voting Common
Stock shall be issued in lieu of Parent Voting Common Stock to any Company Stockholder to
the extent required to ensure that, after giving effect to the issuance thereof, such
Company Stockholder (together with its Affiliates) (i) if subject to the BHCA or deemed
subject to the BHCA, would not own more than 4.9% of the outstanding Parent Voting Stock
(on the basis of the number of votes represented by such Parent Voting Stock) or (ii) in
any event, would not own more than 9.9% of the outstanding Parent Voting Stock (on the
basis of the number of votes represented by such Parent Voting Stock).




     (c) Not less than sixteen (16) days prior to the Closing Date, the Company shall
deliver to Parent and Parent shall deliver to the Company a statement of its Estimated
Tangible Book Value. Each of the parties shall consult the other party regarding the
calculation of its Estimated Tangible Book Value prior to delivery of its statement of
Estimated Tangible Book Value. If the Closing occurs, the Estimated Tangible Book Value of
the Company and the Estimated Tangible Book Value of Parent shall be used to determine the
Exchange Ratio for the purposes of the Merger Consideration payable as of the Effective
Time.




     (d) In the event that Parent, after the date hereof and prior to the Effective Time in
accordance with this Agreement, consummates any direct or indirect sale, merger, business
combination, consolidation, or other transaction that is similar in form, substance or
purpose affecting the Parent Common Stock (other than such a transaction in which Parent is
a continuing corporation and which does not result in any reclassification of, cancellation
of or change (other than a subdivision of its outstanding shares of the Parent Common Stock
into a greater number of shares or consolidation of its outstanding shares into a smaller
number of shares or a change in nominal value thereof) in, its outstanding shares of Parent
Common Stock or any sale of all or substantially all of the stock or assets of Parent (any
such event, a “Parent Sale Transaction”), then, effective upon the consummation of such
Parent Sale Transaction, each Company Stockholder shall have the right to receive, as of
the Effective Time and upon the terms and subject to the conditions set forth herein, only
the kind and amount of shares of stock and other securities and property (including cash)
that such Company Stockholder would have been entitled to receive upon consummation of such
Parent Sale Transaction as if the Effective Time had occurred immediately prior to such
Parent Sale Transaction.



30









 





               Section 3.2 Tangible Book Value Adjustment. The Merger Consideration shall be subject
to an adjustment as follows:




     (a) Within ninety (90) days after the Closing Date, Parent shall prepare or cause to
be prepared and delivered to the Designated Monitor (or its designee) (i) the Company
Closing Balance Sheet and the Parent Closing Balance Sheet and (ii) a statement (the
“Tangible Book Value Statement”) setting forth the actual Tangible Book Value of
each of Parent and the Company as of the Closing Date as derived from the Company Closing
Balance Sheet and the Parent Closing Balance Sheet in accordance with the Accounting
Methodologies (the “Closing Tangible Book Value”) and including in reasonable
detail the manner in which Closing Tangible Book Value has been calculated.




     (b) During the thirty (30) days immediately following the Designated Monitor’s receipt
of the Tangible Book Value Statement, the Designated Monitor and its Representatives will
be entitled to review the working papers of Parent and its Subsidiaries (including the
Surviving Corporation) and their respective accountants to the extent related to the
Company Closing Balance Sheet and the Parent Closing Balance Sheet and the Tangible Book
Value Statement in accordance with Section 3.2(c). If the Designated Monitor
disputes the Tangible Book Value Statement as to either or both the Parent’s Tangible Book
Value or the Company’s Tangible Book Value, then the Designated Monitor shall, within
thirty (30) days following receipt of the Tangible Book Value Statement from Parent,
deliver a written notice to Parent of such dispute (“TBV Dispute Notice”) setting
forth in reasonable detail the basis for that dispute. If the Designated Monitor does not
deliver to Parent a TBV Dispute Notice within such thirty (30)-day period, the Closing
Tangible Book Value of each of Parent and the Company, as set forth on the Tangible Book
Value Statement, shall be deemed to be final, conclusive and binding on the parties. In
the event the Designated Monitor timely delivers a TBV Dispute Notice, Parent and the
Designated Monitor shall negotiate in good faith to resolve such dispute; provided,
however, that if Parent and the Designated Monitor fail to resolve such dispute
within ten (10) days after receipt by Parent of the TBV Dispute Notice, then Parent and the
Designated Monitor shall promptly engage an independent certified public accounting firm of
nationally recognized standing (which shall be reasonably acceptable to Parent and the
Designated Monitor) (the “Arbitration Firm”) to resolve such dispute;
provided, further, that if Parent and the Designated Monitor are unable to
select such accounting firm within twenty (20) days after receipt by Parent of the TBV
Dispute Notice, either party may request the American Arbitration Association to appoint,
as soon as possible from the date of such request, a senior partner from an independent
certified public accounting firm of nationally recognized standing (which shall be
thereafter the “Arbitration Firm” for purposes of this Section 3.2). Each
party may make a written submission to the Arbitration Firm in support of its position. In
resolving any disputed item, the Arbitration Firm shall make all determinations in
accordance with this Agreement, shall consider only those items and amounts that
Parent and the Designated Monitor have disputed within the time periods and on



31









 







the terms
specified above, and may rely only upon information submitted to it by Parent and the
Designated Monitor. The Arbitration Firm shall be instructed to use commercially
reasonable efforts to deliver to Parent and the Designated Monitor a written report setting
forth the resolution of each disputed matter within thirty (30) days of submission of such
disputed matter to it and, in any case, as promptly as practicable after such submission.
The Designated Monitor (on behalf of the Company Stockholders) shall, out of the DM Escrow
Account, bear a portion of the fees and expenses relating to the engagement of the
Arbitration Firm in respect of its services pursuant to this Section 3.2(b) in
proportion to the aggregate amount unsuccessfully disputed by the Designated Monitor over
the aggregate amount of disputed items submitted by the Designated Monitor to the
Arbitration Firm, as determined by the Arbitration Firm. All such fees and expenses not
borne by the Designated Monitor (on behalf of the Company Stockholders), out of the DM
Escrow Account, in accordance with the preceding sentence, shall be borne by Parent. All
determinations made by the Arbitration Firm will be final, conclusive and binding on the
parties and may be enforced by any court of competent jurisdiction in accordance with
Section 17.8. The Closing Tangible Book Value of each of Parent and the Company,
as set forth on the Tangible Book Value Statement or, if disputed, as finally determined by
resolution of the parties or by the Arbitration Firm, in each case, in accordance with this
Section 3.2(b), shall be the “Final Tangible Book Value” of each of Parent
and the Company.




     (c) Each of the parties shall cooperate with and make available to the other party and
its Representatives all information, records, data and work papers, and shall permit access
to its facilities and personnel, as may be reasonably required in connection with the
preparation and analysis of the Estimated Tangible Book Value, the Company Closing Balance
Sheet and the Tangible Book Value Statement and the resolution of any disputes thereunder
(including the review by the Designated Monitor and its Representatives of the Tangible
Book Value Statements); provided, however, that neither party’s external
accountants shall be obligated to make any work papers so available unless and until the
recipient thereof has signed a customary confidentiality agreement relating to such access
to work papers in form and substance reasonably acceptable to such accountants.




     (d) If the Final Tangible Book Value of either the Company or Parent differs from the
Estimated Tangible Book Value of such party, then, the Exchange Ratio shall be recalculated
using the Final Tangible Book Value of such party and the Merger Consideration shall be
adjusted based on such recalculated Exchange Ratio. If the Merger Consideration has
increased as a result of such recalculation, Parent shall issue and deliver a number of
additional shares of Parent Common Stock, equal to the difference between the number of
            shares of Parent Common Stock issued as Merger Consideration on the Closing Date and the
number of shares of Parent Common Stock constituting the Merger Consideration as so
recomputed, to the Company Stockholders in accordance with the Merger Consideration
Allocation Schedule. If the Merger Consideration has decreased as



32









 







a result of such
recalculation, Parent shall cancel an appropriate number of shares of Parent Common Stock,
equal to the difference between the number of shares of Parent Common Stock issued as
Merger Consideration on the Closing Date and the number of shares of Parent Common Stock
constituting the Merger Consideration as so recomputed, based upon the Share Value, in
accordance with the Merger Consideration Allocation Schedule.



               Section 3.3 Cancellation of Treasury Stock. Each share of Company Common Stock that
is directly owned by the Company or any of its Subsidiaries immediately prior to the Effective Time
automatically shall be canceled and shall cease to exist, and no consideration shall be delivered
in exchange therefor.



               Section 3.4 Merger Sub Common Stock. Each share of Merger Sub Common Stock issued and
outstanding immediately prior to the Effective Time shall, at the Effective Time, be canceled and
extinguished and converted into one validly issued, fully paid and nonassessable share of common
stock of the Surviving Corporation.



               Section 3.5 Treatment of Company Options and Company SARs.




     (a) At the Effective Time, each outstanding Company Option, whether vested or
unvested, shall be cancelled and shall only entitle the holder thereof to receive from
Parent, as soon as practicable after the Effective Time (but in no event more than 10 days
after the Effective Time), an amount in cash equal to the product of (i) the total number
of shares of Company Common Stock subject to the Company Option and (ii) an amount per
share of Company Common Stock equal to the excess, if any, of (A) the fair market value of
a share of Company Common Stock, which shall equal the implied value of a share of Company
Common Stock reflected in the estimated Exchange Ratio as determined pursuant to
Section 3.1(c) (the “FMV of a Company Share”) over (B) the exercise price per share
of Company Common Stock under such Company Option, less applicable Taxes required to be
withheld with respect to such payment. The “implied value” for purposes of the definition
of FMV of a Company Share means the Company’s Estimated Tangible Book Value divided by the
number of shares of Company Common Stock outstanding as used to calculate the estimated
Exchange Ratio. Notwithstanding the foregoing, (x) if there is no such excess of the
amount referred to in clause (A) over the amount referred to in clause (B), the holder of a
Company Option shall not be entitled to any payment in respect thereof and (y) to the
extent the Company Compensation Committee determines that the performance metrics
applicable to any performance vested Company Options have not been achieved as of the
Effective Time, such Company Options shall be forfeited without any payment therefor at the
Effective Time.




     (b) At the Effective Time, each outstanding Company SAR, whether vested or unvested,
shall be cancelled and shall only entitle the holder thereof to receive from Parent, as
soon as practicable after the Effective Time (but in no



33









 







event more than 10 days after the
Effective Time), an amount in cash equal to the product of (i) the total number of shares
of Company Common Stock subject to the Company SAR and (ii) the excess, if any, of (A) the
FMV of a Company Share over (B) the reference price per share of Company Common Stock under
such Company SAR, less applicable Taxes required to be withheld with respect to such
payment. Notwithstanding the foregoing, (x) if there is no such excess of the amount
referred to in clause (A) over the amount referred to in clause (B), the holder of a
Company SAR shall not be entitled to any payment in respect thereof and (y) to the extent
the Company Compensation Committee determines that the performance metrics applicable to
any performance vested Company SARs have not been achieved as of the Effective Time, such
Company SARs shall be forfeited without any payment therefor at the Effective Time.



               Section 3.6 Treatment of Company RSUs. At the Effective Time, each Company RSU shall
be cancelled and shall only entitle the holder thereof to receive from Parent, as soon as
practicable after the Effective Time (but in no event more than 10 days after the Effective Time),
an amount in cash equal to (i) the number of shares of Company Common Stock subject to such Company
RSU immediately prior to the Effective Time times (ii) the FMV of a Company Share, less applicable
Taxes required to be withheld with respect to such payment. Notwithstanding the foregoing, to the
extent the Company Compensation Committee determines that the performance metrics applicable to any
performance vested Company RSUs have not been achieved as of the Effective Time, such Company RSUs
shall be forfeited without any payment therefor at the Effective Time.



               Section 3.7 Treatment of Company Warrants.




     (a) Pursuant to the Warrant Termination Agreement and the Management Termination of
Warrants Agreement, (i) all of the outstanding Company Warrants shall terminate and be
cancelled immediately prior to the Effective Time without any further action by the Company
or any holder of Company Warrants and (ii) upon such termination and cancellation, each
Company Warrant shall be void and shall be of no further force and effect.




     (b) From and after the Effective Time, pursuant to the terms and subject to the
conditions of the Step Down Share Purchase Right Agreement, the Warrant Escrow Agreement
and the Escrow Agreement, the Former Warrant Holders shall have the right to acquire
Escrowed Assets on the terms and subject to the conditions set forth in the Step Down Share
Purchase Right Agreement, the Warrant Escrow Agreement and the Escrow Agreement.
Immediately prior to the Effective Time, the Designated Monitor will enter into the Escrow
Agreement and an escrow agreement with respect to the Step Down Share Purchase Right
Agreement (the “Warrant Escrow Agreement”) with an escrow agent (the “Warrant
Escrow Agent”) with respect to an escrow account (the “Warrant Escrow Account”)
substantially in the form of Exhibit H.



34









 






     (c) The parties acknowledge and agree that each of (i) the Step Down Share Purchase
Right Agreement and the Warrant Escrow Agreement is by an among the Designated Monitor on
behalf of the Company Stockholders and the Former Warrant Holders and (ii) the Company is
not a party thereto. Notwithstanding anything to the contrary contained herein, in the
Step Down Share Purchase Right Agreement, the Warrant Escrow Agreement or in any other
document or agreement contemplated or referenced herein, in no event shall the Step Down
Share Purchase Right Agreement or the Warrant Escrow Agreement or any term or provision
thereof or rights created thereby be binding upon or result in any liability to Parent,
Merger Sub, the Company or the Surviving Corporation.



               Section 3.8 Deposit of Escrowed Assets.




     (a) Immediately prior to the Effective Time, the Company shall deposit or cause to be
deposited with the Escrow Agent, in the escrow account maintained at the Escrow Agent and
specified in the Escrow Agreement, fifty million dollars ($50,000,000) in cash (such
amount, together with any interest earned thereon in accordance with the Escrow Agreement,
the “Escrowed Cash”) subject to the terms of the Escrow Agreement.




     (b) At the Effective Time, a number of shares of Parent Common Stock to be issued to
the Company Stockholders as part of the Merger Consideration such that the value of such
shares (the “Escrowed Shares”), based upon the Share Value, equals seventeen and a
half percent (17.5%) of the Protected Portfolio Carrying Value shall be deposited with the
Escrow Agent subject to the terms of the Escrow Agreement. The Escrowed Assets shall be
applied by the Escrow Agent in accordance with the terms of this Agreement and the Escrow
Agreement to pay amounts (if any) owing under Article XIV and Article XVI
and shall otherwise be released in accordance with the Escrow Agreement.



               Section 3.9 Exchange Procedures.




     (a) Parent shall act as agent for the purpose of exchanging certificates representing shares of the Company Common Stock (the “Certificates”) for the Merger
Consideration. Prior to the Closing Date, the Company shall send, to each Company
Stockholder at the Effective Time, a letter of transmittal in the form attached as
Exhibit G (the “Letter of Transmittal”) (including a substitute Form W-9)
and instructions (which shall specify that the delivery shall be effected, and risk of loss
and title shall pass, only upon proper delivery of the Certificates to Parent) for use in
such exchange.




     (b) Each holder of shares of Company Common Stock that have been converted into the
right to receive the Merger Consideration shall be entitled to receive, upon surrender to
Parent of a Certificate (or affidavit of loss in accordance with Section 3.11),
together with a properly completed Letter of Transmittal, a joinder to the Stockholders
Agreement, a joinder to the Registration Rights Agreement, a duly executed Stockholder
Waiver and Release, an executed



35









 







Designated Monitor indemnity agreement, a duly executed
Termination and Release Agreement, a duly executed Request for Taxpayer Identification
Number and Certification on Form W-9 or W-8 and such other documents as Parent may
reasonably require (the “LT Documents”), the Merger Consideration in respect of the
Company Common Stock represented by such Certificate, but subject to Section 3.8,
in each case, as set forth on the Merger Consideration Schedule delivered pursuant to
Section 3.13. Until so surrendered or transferred, as the case may be, each such
Certificate shall represent after the Effective Time for all purposes only the right to
receive such Merger Consideration. Upon receipt of a Certificate and a properly completed
Letter of Transmittal, and the LT Documents (and such other documents as Parent may
reasonably require), after the Effective Time, Parent shall pay the Merger Consideration to
such holder, in exchange therefor, by recording in the stock ledger of Parent the issuance
to such holder of that number of shares of Parent Common Stock to which such holder is
entitled and, upon final resolution of the Tangible Book Value adjustment in accordance
with Section 3.2 and release of the Escrowed Shares in accordance with
Article XVI, delivering to such holder a certificate representing that number of
 shares of Parent Common Stock to which such holder is entitled pursuant to this Article
III (after taking into account such resolution of the Tangible Book Value and release
of the Escrowed Shares), which certificate shall bear the legend set forth in the
Stockholders Agreement; it being understood that the Escrowed Shares shall be issued and
deposited with the Escrow Agent in book entry form and shall be certificated only at such
time as such Escrowed Shares are released to the Company Stockholders or the Former Warrant
Holders pursuant to the Escrow Agreement and the Warrant Escrow Agreement.




     (c) If any portion of the Merger Consideration is to be paid to a Person other than
the Person in whose name the surrendered Certificate is registered, it shall be a condition
to such payment that (i) such Certificate shall be properly endorsed or shall otherwise be
in proper form for transfer and (ii) the Person requesting such payment shall pay to Parent
any Transfer Taxes required as a result of such payment to a Person other than the
registered holder of such Certificate or establish to the reasonable satisfaction of Parent
that such Transfer Taxes have been paid or is not payable.




     (d) Parent shall not be liable to any Company Stockholder for any amounts paid to a
public official pursuant to applicable abandoned property, escheat or similar Laws. Any
amounts remaining unclaimed by Company Stockholders two years after the Effective Time (or
such earlier date, immediately
prior to such time when the amounts would otherwise escheat to or become property of
any Governmental Entity) shall become, to the extent permitted by applicable Law, part of
the Escrowed Assets.




     (e) No dividends or other distributions with respect to Parent Common Stock
constituting part of the Merger Consideration shall be paid to the holder of any
Certificates not surrendered until such Certificates are surrendered as provided



36









 







in this
Section 3.9. Following such surrender, there shall be paid, without interest, to
the Person in whose name the shares of Parent Common Stock have been registered, at the
time of such surrender or transfer the amount of all dividends or other distributions, if
any, with a record date after the Effective Time previously paid or payable on the date of
such surrender with respect to such shares of Parent Common Stock; provided,
however, that all dividends and distributions with respect to the Escrowed Shares
shall be held by the Escrow Agent together with the associated Escrowed Shares as part of
the Escrowed Assets.



               Section 3.10 Fractional Shares. Notwithstanding any other provision of this
Agreement, no fractional shares of Parent Common Stock will be issued and any Company Stockholder
entitled to receive a fractional share of Parent Common Stock but for this Section 3.10
shall be entitled to receive a cash payment in lieu thereof equal to such holder’s proportionate
interest in a share of Parent Common Stock based on the Share Value. Notwithstanding the foregoing,
Parent may issue fractional shares with respect to the Escrowed Shares to the Subaccounts and shall
exchange Escrowed Shares for fractional shares and subdivide existing shares or fractional shares
that are Escrowed Shares to the extent necessary pursuant to Article XVI, the Warrant Escrow
Agreement and the Escrow Agreement.



               Section 3.11 Lost, Stolen or Destroyed Certificates. In the event any Certificates
shall have been lost, stolen or destroyed, Parent shall issue and pay, in accordance with this
Article III, in exchange for such lost, stolen or destroyed Certificates, upon the making
of an affidavit of that fact by the holder thereof, the portion of the Merger Consideration payable
pursuant to Section 3.1 with respect to shares of Company Common Stock represented by such
Certificates; provided, however, that Parent may, in its discretion and as a
condition precedent to the issuance and payment thereof, require the owner of such lost, stolen or
destroyed Certificates to deliver to Parent an affidavit of loss, theft or destruction in form
reasonably satisfactory to Parent and the posting by such owner of a bond in customary amount and
upon such terms as reasonably required by Parent as indemnity against any claim that may be made
against Parent, Merger Sub, the Surviving Corporation, the Company or any of their respective
Representatives with respect to Certificates alleged to have been lost, stolen or destroyed.



               Section 3.12 No Further Transfer of Shares. After the Effective Time, there shall be
no transfers of shares of Company Common Stock that were outstanding immediately prior to the
Effective Time on the stock transfer books of the Surviving Corporation. If, after the Effective
Time, any Certificate is presented to the Surviving Corporation for transfer, it shall be canceled
and exchanged for the Merger
Consideration as provided in this Article III. At the close of business on the day of
the Effective Time, the stock ledger of the Company shall be closed.



               Section 3.13 Merger Consideration Schedule.




     (a) Not later than five (5) Business Days prior to the Closing and after consultation
with Parent, the Company shall deliver to Parent a schedule setting forth, as of the
Effective Time, a calculation of the aggregate amount of the



37









 







Merger Consideration
calculated in accordance with Section 3.1 on the basis of the Estimated Tangible
Book Value of each of the Company and Parent in the form substantially as set forth in
Exhibit E (the “Merger Consideration Schedule”) and the Company’s
calculation of the Exchange Ratio. If Parent disputes the Merger Consideration Schedule or
such Exchange Ratio calculation (it being understood that the parties shall not have the
right to dispute the Estimated Tangible Book Value calculated in accordance with
Section 3.1(c)), then Parent shall within two (2) Business Days following receipt
of the Merger Consideration Schedule, deliver a written notice to the Company of such
dispute (the “Merger Consideration Dispute Notice”) setting forth in reasonable
detail the basis for that dispute. Parent and the Company shall negotiate in good faith
and shall resolve such dispute as promptly as practicable. If Parent does not deliver to
the Company a Merger Consideration Dispute Notice within such two-day period, or when
Parent and the Company resolve such dispute, the Merger Consideration Schedule and such
Exchange Ratio shall be deemed to be conclusive and binding on the parties, subject to any
adjustment pursuant to Section 3.13(c).




     (b) Not later than two (2) Business Days following final determination of the Merger
Consideration Schedule pursuant to Section 3.13(a), and after consultation with
Parent, the Company shall deliver to Parent a schedule substantially in the form attached
as Exhibit F setting forth, as of the Effective Time, a reasonably detailed
calculation of: (i) the number of shares of Company Common Stock (and the class thereof)
held by each Company Stockholder, (ii) the number of shares of Parent Common Stock (and the
class thereof) to be issued as Merger Consideration to each Company Stockholder based on
the Exchange Ratio, (iii) as to the number of shares of Parent Common Stock to be delivered
to the Escrow Agent as Escrowed Shares and (iv) the number and holder of each of the
Company Options, Company SARs and Company RSUs and the amount of any payment required to be
made at or after the Effective Time in respect thereof (the “Merger Consideration
Allocation Schedule”), which shall be approved by the board of directors of the Company
and accompanied by a certificate of an officer of the Company certifying such approval.




     (c) Following determination of the Final Tangible Book Value pursuant to Section
3.2, the Designated Monitor, in consultation with Parent, shall
update the Merger Consideration Schedule and Merger Consideration Allocation Schedule
to reflect any required adjustments resulting from such determination.




     (d) In the event that any Escrowed Shares are released to Company Stockholders after
the Closing, all such Escrowed Shares shall be released to the Company Stockholders
consistent with the allocations set forth on the Merger Consideration Allocation Schedule.
In the event that any Escrowed Shares are released to Former Warrant Holders after the
Closing, all such Escrowed Shares shall be released to the former Warrant Holders
consistent with instructions delivered by the Designated Monitor to the Escrow Agent and
the Warrant Escrow



38









 







Agent in accordance with the Step Down Share Purchase Right Agreement,
the Escrow Agreement and the Warrant Escrow Agreement.



          Section 3.14 No Registration. The shares of Parent Common Stock to be issued to the
Company Stockholders as Merger Consideration or to the Former Warrant Holders pursuant to the Step
Down Share Purchase Right Agreement will not be registered under the Securities Act at the Closing
Date and may not be transferred other than pursuant to an effective registration statement under
the Securities Act or in accordance with an exemption from the registration requirements of the
Securities Act.




          Section 3.15 Appraisal Rights. Notwithstanding anything in this Agreement to the
contrary, Dissenting Shares shall not be converted into the right to receive Merger Consideration
but shall instead be converted into the right to receive such consideration as may be determined to
be due with respect to such Dissenting Shares pursuant to Section 262 of the DGCL. The Company
shall give Parent prompt notice of any demand for appraisal of any holder of Company Common Stock,
attempted withdrawals of such demands, and any other instruments received by the Company related to
any rights of appraisal. Each holder of Dissenting Shares (a “Dissenting Stockholder”)
who, pursuant to the applicable provisions of the DGCL, becomes entitled to payment of the “fair
value” for their shares of Company Common Stock shall receive payment therefor (but only after the
value therefor shall have been agreed upon or finally determined pursuant to such provisions). If,
after the Effective Time, any Dissenting Stockholder shall fail to perfect or shall effectively
waive, withdraw or lose such Dissenting Stockholder’s rights under Section 262 of the DGCL, then
such person’s Dissenting Shares shall thereupon cease to be Dissenting Shares and shall be deemed
to have been canceled at the Effective Time, and the Surviving Corporation shall issue and deliver,
upon surrender by such holder of such holder’s Certificates and other documents referred to in
Section 3.9, the portion of the Merger Consideration to which such holder would otherwise
theretofore have been entitled under this Agreement.




          Section 3.16 Determination of Multiple.





     (a) In the event of any issuance, between the date hereof and the Closing Date, of
Parent Equity Securities, or any combination of Parent Equity Securities and any other
consideration, by Parent or any of its Subsidiaries in connection with any merger,
consolidation, share exchange or any similar transaction (excluding the Merger) or in
connection with any acquisition of assets
by Parent or any of its Subsidiaries, the Applicable Multiple in respect of each such
Capital Raise Transaction shall equal:




     (i) The fair market value of the entity or entities or net assets acquired in
such Capital Raise Transaction, determined in accordance with reasonably accepted
valuation methodologies (the “Market Value”); DIVIDED BY




     (ii) The Contributed Capital in respect of such Capital Raise Transaction.



39









 






     (b) As soon as practicable but in no event less than ten (10) days following the
completion of a Capital Raise Transaction of a type referred to in clause (a) between the
date of this Agreement and the Closing Date, Parent shall deliver to the Company a
statement (a “Statement”) setting forth its computation, together with supporting
materials in reasonable detail setting forth the basis therefor, of the Market Value and
Contributed Capital in respect of such Capital Raise Transaction. In the event that the
Company does not submit a notice of objection to such Statement within thirty (30) days
following its receipt thereof, the Market Value set forth in such Statement shall be the
Market Value used to determine the Applicable Multiple in respect of such Capital Raise
Transaction.




     (c) The Company shall have a period of thirty (30) days to review such Statement, and
during such time shall have reasonable access to the books, records, facilities and
personnel of Parent, including, without limitation, documents relating to the valuations of
the parties to such Capital Raise Transaction, for the purpose of its review and
investigation of the Statement and the calculations set forth therein.




     (d) In the event that the Company objects to the Market Value set forth in the
Statement, the Company shall give Parent a written notice setting forth in reasonable
detail the basis for such objection within such thirty (30) day period and the parties will
work together in good faith for a period of fifteen (15) days to resolve such objection.
In the event that the parties resolve such objection within such fifteen (15) day period,
the Market Value as so agreed shall be the Market Value used to determine the Applicable
Multiple in respect of such Capital Raise Transaction.




     (e) In the event that the parties are unable to agree in good faith to the Market
Value in respect of such Capital Raise Transaction within such fifteen (15) day period,
they shall refer any remaining disagreements to an investment banking firm of national
standing jointly selected by Parent and the Company, or if such parties cannot so agree, to
an investment banking firm of national standing jointly selected by an investment banking
firm of national standing selected by Parent and an investment banking firm of national
standing selected by the Company (the “Investment Banking Firm”), who, acting as
experts and not as arbitrators, shall determine, only with respect to the remaining
differences so submitted, the
computation of the Market Value. Prior to the Investment Banking Firm rendering its
determination, each of Parent and the Company shall have the opportunity to present its
explanation of its proposed calculation of the Market Value. Parent and the Company shall
instruct the Investment Banking Firm to deliver its written determination to Parent and the
Company no later than thirty (30) days after the referral of the dispute to the Investment
Banking Firm. The final determination by the Investment Banking Firm as to the Market
Value shall (in the absence of manifest error) be conclusive and binding upon the Company,
the Designated Monitor, Parent, the Surviving Corporation and their respective Affiliates
and



40









 







shall be the Market Value used to determine the Applicable Multiple in respect of such
Capital Raise Transaction.




     (f) The fees and disbursements of the Investment Banking Firm shall be borne by
Parent.




     (g) Each of Parent and the Company shall make readily available to the Investment
Banking Firm all relevant books, records, personnel and work papers relating to the dispute
submitted to the Investment Banking Firm.




     (h) The parties acknowledge that the Investment Banking Firm will not be requested to
make any investigation or determination or settle any disputes in respect of the
calculation of Contributed Capital in respect of any Capital Raise Transaction, which shall
be determined in accordance with Section 3.2.




     (i) Following the Effective Time, the Designated Monitor shall have all rights of the
Company to receive notices and to commence or continue any challenge to the extent set
forth in this Section 3.16.



ARTICLE IV




REPRESENTATIONS AND WARRANTIES OF THE COMPANY



               Except as set forth in the corresponding sections or subsections of the Company Disclosure
Schedule (it being agreed that, except with regard to Section 4.7(i), disclosure of any item in any
section or subsection of the Company Disclosure Schedule shall be deemed disclosure with respect to
any other section or subsection to which the relevance of such item to such other sections or
subsections is readily apparent on the face of the disclosure), the Company hereby represents and
warrants to Parent and Merger Sub as follows:



               Section 4.1 Organization, Standing and Corporate Power. The Company and each of its
Subsidiaries has been duly organized, is validly existing and in good standing (with respect to
jurisdictions that recognize such concept) under the Laws of the jurisdiction of its incorporation
or formation, as the case may be, and has all requisite corporate or other power and authority and
possesses all Permits necessary to enable it to use its corporate or other name and to own, lease
or otherwise hold and operate its properties and other assets and to carry on its business as
currently conducted,
except where the failure to possess such Permits, individually or in the aggregate, would not
have a Company Material Adverse Effect or prevent or materially impair the ability of the Company
to perform its obligations under this Agreement or prevent or materially impede, hinder or delay
the consummation of the Merger or the other transactions contemplated hereby. Section 4.1
of the Company Disclosure Schedule identifies each jurisdiction where the Company is
qualified or licensed to do business. The Company and each of its Subsidiaries is duly qualified
or licensed to do business and is in good standing (with respect to jurisdictions that recognize
such concept) in each jurisdiction in which the nature of its business or the ownership, leasing or
operation of its properties makes such



41









 







qualification, licensing or good standing necessary, except
where the failure to be so qualified or licensed , individually or in the aggregate, would not have
a Company Material Adverse Effect or prevent or materially impair the ability of the Company to
perform its obligations under this Agreement or prevent or materially impede, hinder or delay the
consummation of the Merger or the other transactions contemplated hereby. The Company has made
available to Parent, prior to the date of this Agreement, complete and accurate copies of its
Amended and Restated Certificate of Incorporation (the “Company Certificate”) and Amended
and Restated By-laws (the “Company By-laws”), in each case as amended to the date hereof.



               Section 4.2 Subsidiaries. Section 4.2 of the Company Disclosure
Schedule lists, as of the date hereof, each Subsidiary of the Company, including its state of
incorporation or formation and each jurisdiction in which such Subsidiary is qualified or licensed
to do business. All of the outstanding capital stock of, or other equity interests in, each
Subsidiary of the Company is directly or indirectly owned by the Company. All the issued and
outstanding shares of capital stock of, or other equity interests in, each such Subsidiary owned by
the Company have been validly issued and are fully paid and nonassessable and are owned directly or
indirectly by the Company free and clear of all Liens, and free of any restriction on the right to
vote, sell or otherwise dispose of such capital stock or other equity interests. Except for the
capital stock of, or voting securities or equity interests in, its Subsidiaries, the Company does
not own, directly or indirectly, as of the date hereof, any capital stock of, or other voting
securities or equity interests in, any Person. Copies of the charter and by-laws or comparable
organizational documents and any amendments thereto for each of the Company’s Subsidiaries were
furnished to Parent and are true, complete and correct copies of such documents as in effect on the
date of this Agreement.



               Section 4.3 Capital Structure.




     (a) The authorized capital stock of the Company consists of three hundred million
(300,000,000) shares of voting common stock, par value $0.01 per share (the “Company
Voting Stock”) and three hundred million (300,000,000) shares of non-voting common
stock, par value $0.01 per share (together with the Company Voting Stock, the “Company
Common Stock”) and one hundred million (100,000,000) shares of preferred stock, par
value $0.01 per share (the “Company
Preferred Stock”). At the close of business on October 16, 2009: (i)
36,717,995 shares of Company Common Stock were issued and outstanding (which number
includes 32,543,337 shares of Company Voting Stock, 4,174,658 shares of non-voting Company
Common Stock and 0 shares of Company Common Stock held by the Company in its treasury; (ii)
3,813,563 Company Options were issued and outstanding, 289,000 Company SARs were issued and
outstanding, and 133,906 Company RSUs were issued and outstanding; and (iii) no shares of
Company Common Stock were owned by Subsidiaries of the Company. At the close of business
on October 16, 2009, no shares of Company Preferred Stock were issued and outstanding.
Each outstanding share of Company Common Stock is duly authorized, validly issued, fully
paid, nonassessable and free of preemptive rights



42









 







or similar rights and issued in
compliance with applicable state and federal securities Laws.




     (b) Section 4.3(b) of the Company Disclosure Schedule sets forth a
true, complete and correct list, as of the date of this Agreement, of the record owners of
the shares of the (i) Company Common Stock, (ii) Company Options, (iii) Company SARs and
(iv) Company RSUs, in each case, indicating the number of such shares or units held of
record by each such Person and, as applicable, the exercise price, conversion rate or price
and vesting details of such shares or units. After the Effective Time, no Company Options
or Company SARs will be outstanding and all payments (if any) payable pursuant to (x)
Section 3.5 in respect of the Company Options and the Company SARs and (y)
Section 3.6 in respect of the Company RSUs will, in each case, have been accrued on
the Company Closing Balance Sheet.




     (c) Except for the Company Warrants, there are not issued, reserved for issuance or
outstanding (i) any securities of the Company convertible into or exchangeable or
exercisable for shares of Company Common Stock or other voting securities or equity
interests of the Company or (ii) any warrants, restricted stock units, calls, options or
other rights to acquire from the Company, and no obligation of the Company to issue, any
capital stock, voting securities, equity interests or securities convertible into or
exchangeable or exercisable for Company Common Stock or voting securities of the Company.
Except for the Company Warrants, there are not any outstanding obligations of the Company
to repurchase, redeem or otherwise acquire any such securities or to issue, deliver or
sell, or cause to be issued, delivered or sold, any such securities. The Company is not a
party to any voting Contract with respect to the voting of any such securities.




     (d) There are no bonds, debentures, notes or other Indebtedness of the Company having
the right to vote (or convertible into, or exchangeable for, securities having the right to
vote) on any matters on which Company Stockholders may vote.




     (e) Each of the Former Warrant Holders is also a Company Stockholder. The Warrant
Termination Agreement provides that no Former Warrant Holder may transfer, sell or
otherwise dispose of its rights thereunder.



               Section 4.4 Authority; Noncontravention.




     (a) The Company has all requisite corporate or other power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company and no other corporate or other proceedings on
the part of the Company is necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and



43









 







delivered by
the Company and, assuming the due authorization, execution and delivery by each of the
other parties hereto, constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or similar Laws
affecting the rights of creditors generally and the availability of equitable remedies
(regardless of whether such enforceability is considered in a proceeding in equity or at
Law).




     (b) The board of directors of the Company, by resolutions duly adopted at a meeting
duly called and held, has unanimously (i) approved, and declared advisable, the agreement
of merger (within the meaning of Section 251 of the DGCL) contained in this Agreement; (ii)
determined that the terms of this Agreement are fair to, and in the best interests of, the
Company and its stockholders; and (iii) recommended that the Company Stockholders adopt
this Agreement, which resolutions have not as of the date hereof been subsequently
rescinded, modified or withdrawn in any way.




     (c) The execution and delivery of this Agreement by the Company does not, and the
consummation by the Company of the Merger and the other transactions contemplated hereby
and compliance by the Company with the provisions of this Agreement will not, conflict
with, or result in any violation or breach of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of, or result in, termination,
modification, cancellation or acceleration of any obligation or to the loss of a benefit
under, or result in the creation of any Lien (other than a Permitted Lien) in or upon any
of the properties or other assets of the Company or any of its Subsidiaries under; (i) the
Company Certificate or the Company By-laws or the comparable organizational documents of
any of its Subsidiaries; (ii) any Company Material Contract to which the Company or any of
its Subsidiaries is a party or any of their respective properties or other assets is
subject; or (iii) assuming (solely with respect to performance of this Agreement and
consummation of the Merger and the other transactions contemplated hereby) compliance with
the matters referred to in Section 4.4(d),
any (A) Law applicable to the Company or any of its Subsidiaries or any of their
respective properties or other assets, or (B) Order applicable to the Company or any of the
Company’s Subsidiaries or any of their respective properties or other assets.




     (d) No consent, approval, Order or authorization or Permit of, action by or in respect
of, registration, declaration or filing with, or notification to any Governmental Entity is
required by the Company or any of its Subsidiaries in connection with the execution and
delivery of this Agreement by the Company or the consummation of the Merger or the other
transactions contemplated hereby, except for (i) (A) the filing of premerger notifications
and report forms under the HSR Act and the expiration or termination of the waiting period
required thereunder, and (B) the receipt, termination or expiration, as applicable, of
approvals or waiting periods required under any other applicable Antitrust Law; (ii)



44









 







consents, approvals, Orders or authorizations or Permits of, actions by or in respect of,
registration, declaration or Permits of, actions by or in respect of, registration,
declaration or filing with, or notification to any federal or state banking authority,
including applications and notices under the Home Owners’ Loan Act of 1933, as amended
(“HOLA”) and other applicable rules, regulations, Orders and banking Laws of any
federal or state banking authority of other Governmental Entity; (iii) applicable
requirements of the Securities Act, the Exchange Act, and state securities takeover and
“blue sky” laws, as may be required in connection with this Agreement and the transactions
contemplated hereby; and (iv) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware. As of the date hereof, to the Knowledge of the Company,
there is no circumstance, condition or event regarding the Company that is reasonably
likely to cause the conditions in Section 10.1(b) and Section 10.2 (h) to
fail to be satisfied.



               Section 4.5 Company Financial Statements. Attached to Section 4.5 of the
Company Disclosure Schedule are (a) audited consolidated balance sheets for the Company,
Titan Asset Finance, Inc. (including its Subsidiary) and Titan Vendor Finance, Inc. (including its
Subsidiaries), in each case, as of December 31, 2008 and audited consolidated statements of
operations for the period January 22, 2008 (date of inception) through December 31, 2008 (such
financial statements, including the footnotes contained therein, if any, the “Company Audited
Financial Statements”), and the reports thereon of independent certified public accountants,
and (b) an unaudited consolidated balance sheet for the Company and each of its Subsidiaries (to
the extent that such Subsidiary balance sheets are generally prepared) as of September 30, 2009 and
an unaudited consolidated statement of operations for the nine-month period ended September 30,
2009 (such financial statements, including the footnotes contained therein, if any, are referred to
as the “Company Interim Financial Statements,” and, together with the Company Audited
Financial Statements, the “Company Financial Statements”). Each of the Company Financial
Statements has been prepared in accordance with GAAP consistently applied throughout the periods
covered by each such statement, is consistent with the books and records of the Company, and
fairly presents, in all material respects, the consolidated financial condition of the Company as
of the respective dates and the results of operations and cash flows of the Company for the
respective periods then ended, as applicable, subject to, in the case of the Company Interim
Financial Statements (i) the absence of notes and schedules, and (ii) normal year-end adjustments.



               Section 4.6 No Undisclosed Liabilities. Except as set forth in Section 4.6 of
the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has any
Liabilities or obligations of any nature (absolute, accrued, contingent or otherwise) that are
required to be reflected or reserved against in the Company Financial Statements or in the notes
thereto in accordance with GAAP, other than (i) Liabilities so reflected or reserved against in the
Company Financial Statements in accordance with GAAP or (ii) Liabilities that have arisen since the
date of the Company Interim Financial Statements, in the ordinary and usual course of business
consistent with past practice.



45









 





               Section 4.7 Absence of Changes. Since the date of the Company Audited Financial
Statements, except to comply with specific items set forth in the Business Line Modification Plan
after the date of this Agreement, (i) there has not been a Company Material Adverse Effect, (ii)
the Company and its Subsidiaries have conducted their respective businesses in all material
respects in the Ordinary Course and (iii) the Company and its Subsidiaries have not taken any
action or omitted to take any action that, if taken or omitted to be taken after the date hereof
without the consent of Parent, would constitute a violation of Sections 7.1(b)(iv), (v), (vi),
(vii), (xiii), (xiv), (xvii), (xviii) and (xix).



               Section 4.8 Litigation.




     (a) There are no Actions pending or, to the Knowledge of the Company, threatened
against the Company or any of its Subsidiaries or any of the executive officers or
directors of the Company in their capacities as such, or any Actions to which the Company
or any of its Subsidiaries is otherwise a named party.




     (b) Neither the Company nor any of its Subsidiaries nor any of their respective
properties or assets is or are subject to any Order, writ, judgment, injunction,
settlement, decree or award of any Governmental Entity.



               Section 4.9 Material Contracts.




     (a) Section 4.9 of the Company Disclosure Schedule sets forth all of
the following Contracts to which the Company or any of its Subsidiaries is a party other
than Loan Agreements or Lease Agreements that are subject to Section 4.19 and other
than Company Benefit Plans and Company Employment Agreements that are subject to
Section 4.12 (each, a “Company Material Contract”):




     (i) any Contract with any Affiliate (other than portfolio companies of any
Company Stockholder or Person that directly or indirectly beneficially owns equity
of any Company Stockholder, except to the extent within the Knowledge of the
Company), employee, current or former director, officer or stockholder of the
Company or any of its Subsidiaries or with a family member of any of the foregoing
or with an entity in which any of the foregoing is a controlling Person;




     (ii) any Contract relating to the disposition or acquisition of any material
assets, the disposition or acquisition of any business or any entity or any merger
or other business combination, other than dispositions in the Ordinary Course of
Business of loans, leases and residual assets;




     (iii) any Contract pursuant to which the Company or any of its Subsidiaries
establishes a joint venture or partnership involving a sharing of profits, Losses,
costs, or Liabilities by the Company or any of its Subsidiaries with any other
Person;



46









 






     (iv) any trust indenture, mortgage, note, promissory note, bond, loan or
credit agreement or other Contract relating to Indebtedness of the Company or any
of its Subsidiaries, any currency exchange, commodities or other hedging
arrangement, or any leasing transaction of the type required to be capitalized by
the Company or any of its Subsidiaries in accordance with GAAP;




     (v) any Contract that is primarily a Contract of guarantee, support,
assumption or endorsement of, or any similar commitment with respect to Liabilities
of any other Person involving a dollar value in excess of two hundred thousand
dollars ($200,000);




     (vi) any Contract that the Company reasonably anticipates will involve
aggregate payments or consideration furnished by or to the Company or any of its
Subsidiaries of more than two hundred thousand dollars ($200,000) in any year;




     (vii) any Contract for capital expenditures in excess of two hundred thousand
dollars ($200,000) in the aggregate;




     (viii) any Contract with any Governmental Entity;




     (ix) any Contract containing covenants not to compete in any line of business
or with any other Person in any geographical area, or covenants of any other Person
not to compete with the Company in any line of business or in any geographical area
or covenants that in any way purport to limit the ability of the Company or Parent
or any of its Affiliates (after the Closing Date) to compete with any Person or
engage in any line of business;




     (x) any material Contract containing a change of control provision,
termination right or material fee, or any other restriction or material penalty
that would be triggered by a change in ownership or Control of the Company or any
of its Subsidiaries;




     (xi) any Contract providing for the indemnification by the Company or any of
its Subsidiaries of any Person, except for any such Contract that is (x) not
material to the Company or any of its Subsidiaries and (y) entered into in the
Ordinary Course of Business;




     (xii) any Contract relating to Company Leased Real Property;




     (xiii) any Contract that grants any right of first refusal or right of first
offer or similar right or that limits or purports to limit the ability of the
Company to own, operate, sell, transfer, pledge or otherwise dispose of any
material amount of its assets or its business;



47









 






     (xiv) any Contract that contains a “most favored nation” clause or requires
any type of exclusive dealing or similar arrangement involving the Company or any
of its Subsidiaries;




     (xv) any Contracts and related materials evidencing the Company Stockholders’
existing capital commitments to the Company; and




     (xvi) any other Contract that is material to the Company or any of its
Subsidiaries.




     (b) Copies of all such Company Material Contracts referred to in Section
4.9(a) previously have been delivered to or made available for inspection by Parent,
and such copies are complete and correct. (i) Each Company Material Contract is a valid
and binding obligation of the Company and is in full force and effect, (ii) the Company has
performed in all material respects all obligations required to be performed by it to date
under each Company Material Contract and is not (with or without the lapse of time or the
giving of notice, or both) in material breach or default thereunder, (iii) to the Knowledge
of the Company, each of the other parties to each Company Material Contract has performed
in all material respects all obligations required to be performed by it to date under such
Company Material Contract and is not (with or without the lapse of time or the giving of
notice, or both) in material breach or default thereunder, and (iv) the Company has
received no notice from any other party of its intent to cancel or terminate any Company
Material Contract.



               Section 4.10 Compliance with Laws. The Company and its Subsidiaries:




     (a) have complied in all material respects with all Laws and Orders applicable to them
or to the employees conducting their businesses;




     (b) have all Permits that are required in order to permit the Company and each of its
Subsidiaries to carry on its business as currently conducted, as listed on Section
4.10(b) of the Company Disclosure Schedule; all such Permits are in full force
and effect and the Company and each of its Subsidiaries are in compliance therewith in all
material respects, and no suspension, revocation or cancellation of any such Permits has
occurred or, to the Knowledge of the Company, is threatened; and




     (c) have received no notification or communication from any Governmental Entity (i)
asserting that the Company or any of its Subsidiaries is not in compliance with any Laws or
Orders, (ii) threatening to revoke any Permit or other governmental authorization, or (iii)
failing to approve any proposed transaction, or stating its intention not to approve
transactions, proposed to be effected by the Company within a certain period of time or
indefinitely.



48









 





               Section 4.11 Labor Relations and Other Employment Matters.




     (a) Neither the Company nor any of its Subsidiaries is party to, bound by, or in the
process of negotiating a collective bargaining agreement with any labor union or labor
organization.




     (b) To the Knowledge of the Company, (i) there is no organizational effort currently
being made or, threatened in writing by or on behalf of any labor union or labor
organization to organize any employees of the Company or any of its Subsidiaries; (ii) no
demand for recognition of any employees of the Company or any of its Subsidiaries has been
made by or on behalf of any labor union or labor organization; (iii) no petition has been
filed, nor has any proceeding been instituted by any employee of the Company or any of its
Subsidiaries or group of employees of the Company or any of its Subsidiaries with any labor
relations board or commission seeking recognition of a collective bargaining
representative.




     (c) There is no pending or threatened strike, lockout, work stoppage, slowdown, labor
picketing or material labor dispute with respect to or involving any employees of the
Company or any of its Subsidiaries.




     (d) Neither the Company nor any of its Subsidiaries has received (i) notice of any
unfair labor practice charge or complaint pending or threatened before the National Labor
Relations Board or any other Governmental Entity against them, (ii) notice of any
complaints, material grievances or arbitrations arising out of any collective bargaining
agreements, (iii) notice of any charge or complaint with respect to or relating to them
pending before the Equal
Employment Opportunity Commission or any other Governmental Entity responsible for the
prevention of unlawful employment practices, (iv) written notice of the intent of any
Governmental Entity responsible for the enforcement of labor, employment, wages and hours
of work, child labor, immigration or occupational safety and health Laws to conduct an
investigation with respect to or relating to them or written notice that such investigation
is in progress, or (v) written notice of any Actions pending, or to the Knowledge of the
Company, threatened in any forum by or on behalf of any present or former employee of such
entities, any applicant for employment or classes or representatives of the foregoing
alleging breach of any express or implied contract of employment, any applicable Law
governing employment or the termination thereof or other discriminatory, wrongful or
tortious conduct in connection with the employment relationship.




     (e) No employee of the Company or any of its Subsidiaries has experienced an
“employment loss,” as defined by the WARN Act or any similar applicable state, local or
foreign Law, requiring notice to employees in the event of a closing or layoff, within the
past ninety (90) days.




     (f) The Company and its Subsidiaries are not, and have not been, (i) a “contractor” or
“subcontractor” (as defined by Executive Order 11246), (ii)



49









 







required to comply with
Executive Order 11246, or (iii) required to maintain an affirmative action plan.




     (g) The Company and its Subsidiaries have not (i) improperly classified and treated
any worker, under applicable Law, as an employee or independent contractor, or (ii)
improperly classified and treated any employee, under applicable Law, as exempt or
non-exempt from overtime wage requirements (including in respect of each Company Benefit
Plan).




     (h) Each employee of the Company and its Subsidiaries is employed by the entity to
which such employee renders services.



               Section 4.12 Company Employee Benefits Plans.




     (a) Section 4.12(a) of the Company Disclosure Schedule contains a true
and complete list of (i) each deferred compensation and each incentive compensation, stock
purchase, stock option and other equity compensation plan, program, agreement or
arrangement; each severance or termination pay, medical, surgical, hospitalization, life
insurance and other “welfare” plan, fund or program (within the meaning of Section 3(1) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)); each
profit-sharing, stock bonus or other “pension” plan, fund or program (within the meaning of
Section 3(2) of ERISA); and each other employee benefit plan, fund, program, agreement or
arrangement, in each case, that is sponsored, maintained or contributed to or required to
be contributed to by the Company or any Subsidiary for the benefit of any employee or
former employee of the Company or any Subsidiary or any
current or former director of the Company (the “Company Benefit Plans”) and
(ii) each employment, termination or severance agreement (the “Company Employment
Agreements”). Each of the Company Benefit Plans that is subject to Section 302 or
Title IV of ERISA or Section 412 of the Code is hereinafter referred to in this Section
4.12 as a “Company Title IV Plan.” The Company has made available to Parent a
true and complete copy of each Company Benefit Plan and each Company Employment Agreement
and a true and complete copy of the following items (in each case, only if applicable) (i)
each trust or other funding arrangement, (ii) each summary plan description and summary of
material modifications, (iii) the most recently filed annual report on the IRS Form 5500,
and (iv) the most recently received IRS determination letter.




     (b) Each Company Benefit Plan has been operated and administered in accordance with
its terms and is in substantial compliance with applicable Laws, including, without
limitation, to ERISA and the Code. Neither the Company nor any of its Subsidiaries has a
contract, plan or commitment, whether legally binding or not, to create any additional
Company Benefit Plan, Company Employment Agreement, or any plan, agreement or arrangement
that would be a Company Benefit Plan if adopted or to modify any existing Company Benefit
Plan or Company Employment Agreement, except as required by applicable law. Except as
required by applicable Law, there are no limitations or restrictions on the right



50









 







of the
Company or, after the consummation of the transactions contemplated hereby, Parent, to
merge, amend or terminate any of the Company Benefit Plans.




     (c) With respect to each Company Benefit Plan intended to be “qualified” within the
meaning of Section 401(a) of the Code, (i) each such Company Benefit Plan has been
determined to be so qualified and has received a favorable determination letter from the
IRS with respect to its qualification, (ii) the trusts maintained thereunder have been
determined to be exempt from taxation under Section 501(a) of the Code, and (iii) to the
Knowledge of the Company, its Subsidiaries and any Company ERISA Affiliate, no event has
occurred that could reasonably be expected to result in disqualification or adversely
affect such exemption.




     (d) No Liability under Title IV or Section 302 of ERISA has been incurred by the
Company or any Company ERISA Affiliate that has not been satisfied in full, and no
condition exists that presents a material risk to the Company or any Company ERISA
Affiliate of incurring any such Liability, other than Liability for premiums due the
Pension Benefit Guaranty Corporation (“PBGC”) (which premiums have been paid when
due). No Company Title IV Plan or any trust established thereunder has incurred any
“accumulated funding deficiency” (as defined in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, as of the last day of the most recent fiscal year of each
Company Title IV Plan ended prior to the date hereof.




     (e) No Company Benefit Plan (including for this purpose, any employee benefit plan
described in ERISA Section 3(3) that the Company, any Subsidiary or any Company ERISA
Affiliate maintained, sponsored or contributed to within the six-year period preceding the
date hereof) is (i) a “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA),
(ii) a “multiple employer plan” (within the meaning of Section 413(c) of the Code) or (iii)
a Company Title IV Plan.




     (f) There are no material pending or threatened claims by or on behalf of any Company
Benefit Plan, by any employee or former employee or beneficiary covered under any such
Company Benefit Plan, or otherwise involving any such Company Benefit Plan (other than
routine claims for benefits).




     (g) No Company Benefit Plan provides benefits, including without limitation, death or
medical benefits (whether or not insured), beyond retirement or other termination of
service, other than (i) coverage mandated solely by applicable Law, (ii) death benefits or
retirement benefits under any “employee pension benefit plan” (as defined in Section 3(2)
of ERISA) or (iii) benefits, the full costs of which are borne by the participant or his or
her beneficiary.




     (h) Each Company Benefit Plan and each Company Employment Agreement that is a
“nonqualified deferred compensation plan” (as defined for purposes of Section 409A(d)(1) of
the Code) has (i) been maintained and operated



51









 







since January 1, 2005 in good faith
compliance with Section 409A of the Code and all applicable IRS guidance promulgated
thereunder so as to avoid any Tax, penalty or interest under Section 409A of the Code and,
as to any such plan in existence prior to January 1, 2005, has not been “materially
modified” (within the meaning of IRS Notice 2005-1) at any time after October 3, 2004, and
(ii) since January 1, 2009, been in documentary and operational compliance with Section
409A of the Code and all applicable IRS guidance promulgated thereunder.




     (i) Neither the execution of this Agreement nor the consummation of the transactions
contemplated hereby will, either alone or in combination with another event, (i) entitle
any current or former employee, officer or director of the Company or any Company ERISA
Affiliate to severance pay, unemployment compensation or any other payment, except as
expressly provided in this Agreement, or (ii) accelerate the time of payment or vesting, or
increase the amount of compensation due any such employee, officer, or director. Neither
the Company nor any Company ERISA Affiliate is party to any contract or arrangement that
could result, separately or in the aggregate, in the payment of any “excess parachute
payments” within the meaning of Section 280G of the Code.




     (j) (i) Each Company Employment Agreement is a valid and binding obligation of the
Company or its Subsidiaries and is in full force and effect, (ii) the Company or its
Subsidiaries have performed in all material respects all obligations required to be
performed by it to date under each Company Employment Agreement and is not (with or without
the lapse of time or the giving of notice, or
both) in material breach or default thereunder, and (iii) to the Knowledge of the
Company, each of the other parties to each Company Employment Agreement has performed in
all material respects all obligations required to be performed by it to date under such
Company Employment Agreement and is not (with or without the lapse of time or the giving of
notice, or both) in material breach or default thereunder.



               Section 4.13 Taxes.




     (a) (i) All material United States federal income and other material Tax Returns
required to be filed by or on behalf of or with respect to the Company and each of its
Subsidiaries have been timely filed with the appropriate Taxing Authority and all such Tax
Returns are true and complete in all material respects, and (ii) the Company has, or has
caused each of its Subsidiaries to, duly and timely pay all material Taxes and other
charges due or claimed to be due and to make all required estimated payments of Taxes.




     (b) The Company and each of its Subsidiaries have timely collected or withheld in all
material respects all Taxes required to be collected or withheld with respect to their
employees, independent contractors, creditors, stockholder or other third parties and have
paid over to the appropriate Taxing Authority all such Taxes. All deficiencies or
assessments made in writing as a result of any audit, examination or investigation of any
Taxing Authority of Tax Returns of the



52









 







Company and its Subsidiaries have been fully paid,
and no other audits, examination or investigations by any Taxing Authority relating to any
Tax Returns of the Company and its Subsidiaries are in progress. Neither the Company nor
any of its Subsidiaries have received written notice from any Taxing Authority of the
commencement of any audit, examination or investigation not yet in progress.




     (c) Neither the Company nor any of its Subsidiaries is a party to any Tax
indemnification, Tax allocation or Tax sharing agreements pursuant to which the Company or
any of its Subsidiaries, as applicable, will have any obligation to make any payments after
the Closing Date. Neither the Company nor any of its Subsidiaries is or could be liable
for Taxes of any Person (other than of a member of the affiliated group for United States
federal income tax purposes of which the Company is the common parent) (i) under Section
1.1502-6 of the Treasury Regulations (or any similar provision of state, local or foreign
Law), (ii) as a transferee or successor, (iii) by agreement or (iv) otherwise, for any
taxable period for which the applicable statute of limitations (including extensions) is
not closed.




     (d) There are no Tax rulings, requests for rulings or closing agreements relating to
or with respect to the income and/or assets of the Company or any of its Subsidiaries that
could affect the liability for Taxes of the Company or any of its Subsidiaries, as
applicable, for any period (or portion thereof) ending on or after the Closing Date.




     (e) Neither the Company nor any of its Subsidiaries is or will be required to include
a material item of income, or exclude a material item of deduction, for any period (or
portion thereof) ending on or after the Closing Date, as a result of, on or before the
Closing Date, any (i) transaction treated as an installment sale under Section 453 of the
Code (or any similar provision of state, local or foreign Law), (ii) transaction treated as
an open transaction for any Tax purpose, (iii) receipt of a prepaid amount or deposit, (iv)
change in method of accounting or similar adjustment under Section 481(a) of the Code (or
any similar provision of state, local or foreign Law) that the Company or any of its
Subsidiaries has agreed to, requested, or was required to make, or (v) agreement entered
into with any Taxing Authority.




     (f) There are no material Liens for Taxes upon any assets of the Company or any of its
Subsidiaries other than Permitted Liens.




     (g) No written claim has ever been made by a Taxing Authority in any jurisdiction
where the Company or any of its Subsidiaries does not file Tax Returns that the Company or
any of its Subsidiaries is or may be subject to taxation by such jurisdiction.




     (h) Neither the Company nor any of its Subsidiaries has granted any waiver, extension
or comparable consent regarding the application of the statute of limitations with respect
to any material amount of Taxes or material Tax Return



53









 







that is outstanding, nor has any
request for any such waiver, extension or consent been made.




     (i) Neither the Company nor any of its Subsidiaries is or has ever been required to
make any disclosure to the IRS pursuant to Section 6111 of the Code or Section 1.6011 of
the Treasury Regulations.




     (j) Neither the Company nor any of its Subsidiaries has entered into any agreements or
arrangements (whether written or oral) with respect to the performance of services for
which payment thereunder would result in a nondeductible expense to such Company or any of
its Subsidiaries pursuant to Section 162(m) or Section 280G of the Code or any similar
provision of state, local or foreign Law.




     (k) Neither the Company nor any of its Subsidiaries will be required to include any
material item of income in, or exclude any material item of deduction from, taxable income
for any taxable period (or portion thereof) ending on or after the Closing Date as a result
of any intercompany transactions or excess loss account described in section 1.1502 of the
Treasury Regulations (or any corresponding or similar provision of state, local or foreign
Law).




     (l) There are no material restrictions on the deductibility of a material amount of
interest payable by the Company or any of its subsidiaries for federal income, state, local
and foreign Tax purposes.




     (m) Neither the Company nor any of its Subsidiaries has been a distributing or
controlled corporation in a transaction to which Section 355 of the Code applies that would
reasonably be expected to be treated as part of a “plan (or series of related
transactions)” (within the meaning of Section 355 of the Code) that includes the
acquisition of any stock of the Company or any of its Subsidiaries.




     (n) Neither the Company nor any of its Subsidiaries has participated in a “listed
transaction” within the meaning of Section 1.6011-4(b)(2) of the Treasury Regulations (or
any corresponding or similar provision of state, local or foreign Law).



               Section 4.14 Environmental Matters.




     (a) The Company is in compliance in all material respects with all applicable
Environmental Laws (which compliance includes, but is not limited to, the possession by the
Company of all Permits required under applicable Environmental Laws, and compliance with
the terms and conditions thereof) and no event has occurred or condition exists which
constitutes or, that with notice or lapse of time or both, would constitute, a violation
pursuant to Environmental Law and, to the Knowledge of the Company, there are no
circumstances that are expected to prevent such material compliance in the future.



54









 






     (b) There is no material environmental claim pending or, to the Knowledge of the
Company, threatened against the Company or, to the Knowledge of the Company, against any
Person whose Liability for any such environmental claim the Company has retained or assumed
either contractually or by operation of Law.




     (c) There are no past or present Actions, or to the Knowledge of the Company,
circumstances, conditions or incidents, including, without limitation, the Release of any
Hazardous Material, that could reasonably be expected to form the basis of a material
environmental claim against the Company, or, to the Knowledge of the Company, against any
Person whose Liability for any such environmental claim the Company has or may have
retained or assumed either contractually or by operation of Law, and without in any way
limiting the generality of the foregoing, other than in material compliance with all
Environmental Laws, no properties owned, operated or leased by the Company contain any:
(i) underground storage tanks; (ii) asbestos; or (iii) toxic molds.




     (d) There is no cleanup of Hazardous Materials occurring or, to the Knowledge of the
Company required at any property currently or formerly owned, operated or leased by the
Company, and to the Knowledge of the Company, there is no cleanup required in relation to
any property for which the Company has retained or assumed Liability either contractually
or by operation of law which in either case above could reasonably be expected to result in
material Liability to the Company.




     (e) The Company and its subsidiaries have made available to Parent copies of any
material reports, studies, analyses, tests or monitoring possessed by or in the reasonable
control of the Company or its subsidiaries pertaining to Hazardous Materials in, on or
beneath any property operated or leased by the Company.




     (f) Notwithstanding any other representation or warranty in this Agreement, the
representations and warranties in this Section 4.14 constitute the sole representations and
warranties of the Company concerning any Liability or compliance relating to any
Environmental Law or any Hazardous Material.



               Section 4.15 Real and Personal Property.




     (a) Section 4.15(a) of the Company Disclosure Schedule identifies a
list of all real property leased or operated by the Company and its Subsidiaries
(including all leasehold, sub-leasehold, ground leasehold, or other rights to use or occupy
any land, buildings, structures, improvements, fixtures, or other interest in real
property) (the “Company Leased Real Property”) that is complete and accurate in all
material respects.



55









 






     (b) Neither the Company nor any of its Subsidiaries owns a fee interest in real
property (including any land, buildings, structures, improvements, fixtures or easements).




     (c) Each of the leases relating to Company Leased Real Property is a valid and
subsisting leasehold interest of the Company or any of its Subsidiaries free of
sub-tenancies and other occupancy rights and Liens (other than Permitted Liens), and is a
valid and binding obligation of the Company or any of its Subsidiaries, enforceable against
the Company or any of its Subsidiaries in accordance with its terms.




     (d) Other than as set forth in the leases listed in Section 4.15(d) of the
Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is a
party to or obligated under any option, right of first refusal or other contractual right
to sell, dispose of or lease any of the Company Leased Real Property or any portion thereof
or interest therein to any Person (other than pursuant to this Agreement). Neither the
Company nor any of its Subsidiaries is a party to any agreement or option to purchase any
real property or interest therein.




     (e) With respect to the Company Leased Real Property:




     (i) true, correct and complete copies of the Company Real Property Leases have
been delivered to Parent prior to the date hereof and such Company Real Property
Leases have not been amended or modified since that date;




     (ii) neither the Company, nor, to the Knowledge of the Company, any other
party to each Company Real Property Lease is in material breach or default under
such Company Real Property Lease, and no event has occurred or failed to occur or
circumstance exists which, with the delivery of notice, the passage of time or
both, would constitute such a material breach or default, or permit the
termination, modification or acceleration of rent under such Company Real Property
Lease;




     (iii) none of the Company Leased Real Property has been pledged or assigned by
the Company or any of its Subsidiaries or is subject to any Liens (other than
pursuant to this Agreement or Permitted Liens);




     (iv) the Company does not owe, nor will it owe in the future, any brokerage
commissions or finder’s fees with respect to any Real Property Lease; and




     (v) other than as set forth in Section 4.15(e) of the Company
Disclosure Schedule, the Company has not subleased, licensed or otherwise
granted any Person the right to use or occupy any Company Leased Real Property or
any portion thereof.



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     (f) Except for Company Intellectual Property, which is the subject of Section
4.16 of this Agreement, the Company and its Subsidiaries have good and valid title to
all of their respective assets and personal property (tangible and intangible) that they
purport to own, including all assets and personal property reflected in the Company
Financial Statements (other than to the extent such assets or properties were sold by the
Company since the date of the Company Financial Statements in the Ordinary Course of
Business) and have valid leasehold interests in all leased personal property, in each case
free and clear of all Liens of any kind or character, except for Permitted Liens.



               Section 4.16 Intellectual Property.




     (a) Section 4.16(a) of the Company Disclosure Schedule sets forth a
list, as of the date of this Agreement, of all Intellectual Property that is the subject of
a registration or application for registration before the United States Patent and
Trademark Office, the United States Copyright Office or any foreign equivalent, that is
complete and accurate in all material respects.




     (b) The Company or a Subsidiary of the Company owns, has a license or otherwise
possesses rights to use all Intellectual Property that is material to the conduct of the
business of the Company or any of its Subsidiaries free and clear of all Liens other than
Permitted Liens.




     (c) To the Knowledge of the Company, use by the Company and its Subsidiaries of any
Company Intellectual Property, and the conduct of their business as currently conducted,
has not since the Company’s formation, and does
not infringe, misappropriate, dilute or otherwise violate any rights of any person in
any material respect.




     (d) To the Knowledge of the Company, no person is infringing, misappropriating, or
otherwise violating any rights of the Company or any of its Subsidiaries in or to any
Material Company Intellectual Property. No Actions are pending, or have been threatened or
asserted in writing since the Company’s formation, by the Company or any of its
Subsidiaries against any person with regard to the ownership, use, infringement,
misappropriation, dilution, or violation, of any Company Intellectual Property.




     (e) The Company and its Subsidiaries take reasonable actions to protect the
confidentiality of trade secrets and other confidential business information contained in
the Material Company Intellectual Property.



               Section 4.17 Related Party Transactions.




     (a) Neither the Company nor any of its Subsidiaries is a party to any Contract,
arrangement or transaction with any employee, current or former director, officer or
manager, any stockholder or other equity security holder, of the Company or any of its
Affiliates (other than portfolio companies of any Company



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Stockholder or Person that
directly or indirectly beneficially owns equity of any Company Stockholder, except to the
extent within the Knowledge of the Company) (each, a “Related Party Transaction”
and, collectively, the “Related Party Transactions”). Notwithstanding the
foregoing, Related Party Transactions shall not include any Company Benefit Plans and
Company Employment Agreements.




     (b) Section 4.17(b) of the Company Disclosure Schedule sets forth a
true and complete list of (i) any and all loans or other extensions of credit made or
guaranteed by the Company or any of its Subsidiaries to or for the benefit of any current
or former director, officer, stockholder or employee of the Company or any of its
Affiliates (other than portfolio companies of any Company Stockholder or Person that
directly or indirectly beneficially owns equity of any Company Stockholder, except to the
extent within the Knowledge of the Company), other than advances of business expenses in
the Ordinary Course of Business and (ii) any and all loans, guarantees, or other extensions
of credit of any amount made to or for the benefit of the Company by any of such Persons.



               Section 4.18 Insurance. The Company and each of its Subsidiaries have been and
presently are insured, for reasonable amounts with financially sound and reputable insurance
companies against such risks as companies engaged in a similar business would, in accordance with
good business practice, customarily be insured. Copies of all material insurance policies
maintained by the Company and its Subsidiaries as of the date of this Agreement, including fire and
casualty, general liability, product liability, business interruption, directors and officers and
other professional liability policies, have been made available to Parent. All such insurance
policies are in full force
and effect. Neither the Company nor any of its Subsidiaries is in material breach or default,
and neither the Company nor any of its Subsidiaries has taken any action or failed to take any
action which, with notice or lapse of time or both, would constitute such a material breach or
default, or permit a termination or modification of any of the material insurance policies of the
Company and its Subsidiaries.



               Section 4.19 Loan and Lease Agreements.




     (a) The Company has provided Parent a data tape setting forth a true and complete list,
as of the end of the calendar month immediately preceding the date of this Agreement, of all
(i) Contracts governing a loan extended by the Company or any of its Subsidiaries (each, a
“Loan Agreement”), and (ii) Contracts with respect to lease agreements by the Company
or its Subsidiaries to lessees (each, a “Lease Agreement”).




     (b) All of the Loan Agreements, together with any related Loan Documents, and all of the
Lease Agreements, together with any related Lease Documents, are valid, binding and
enforceable obligations of the Company or one of its Subsidiaries, and to the Knowledge of
the Company, the other parties thereto, in accordance with their respective terms, except as
the enforceability thereof may be stayed, delayed or avoided in connection with any
bankruptcy, insolvency, reorganization or debt moratorium proceeding to which the Obligor
thereunder is



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subject and subject to fraudulent transfer, moratorium and similar Laws of
general applicability relating to or affecting creditors’ rights and to general equity
principles.




     (c) Section 4.19(c) of the Company Disclosure Schedule sets forth a
schedule of (i) any failure to procure insurance in accordance with the terms of any Loan
Agreement or related Loan Document or any Lease Agreement or related Lease Document, as known
by the Company and reported in the Company internal tracking system known as “TAF
Tracker” (for Titan Asset Finance, Inc. and its subsidiaries (“TAF”)) or reported
to the Company by third party provider Premier Lease and Loan Services (for Titan Vendor
Finance, Inc. and its subsidiaries (“TVF”)),and (ii) any failure to pay Taxes by the
borrower under any Loan Agreement or related Loan Document in accordance with the terms
thereof or by the lessee under any Lease Agreement or related Lease Document in accordance
with the terms thereof, other than the MarCap Property Taxes.




     (d) Section 4.19(d) of the Company Disclosure Schedule, identifies the
Obligors in respect of any Loan Agreement or related Loan Documents or any Lease Agreement or
related Lease Document that, to the Knowledge of the Company, are the subject of a
bankruptcy, insolvency or similar proceeding.




     (e) Except as set forth on Section 4.19(e) of the Company Disclosure
Schedule, substantially all of the Loan Agreements and Lease Agreements have been entered
into on either forms (i) substantially similar to the
Company’s standard forms (copies of such standard forms are annexed on Section
4.19(e)(I) (for TAF) or Section 4.19(e)(II) (for TBV) of the Company Disclosure
Schedules) (the “Standard Forms”), or (ii) which (x) contain terms and conditions
that are standard for the type of transactions purported to be covered thereby, (y) include
representations from the Obligor thereunder that the obligation thereunder was entered into
primarily for business or commercial purposes and not for personal, family or household
purposes, (z) contain an express waiver, to the extent permitted by applicable law, of any
and all rights and remedies conferred upon a lessee by Article 2A of the Uniform Commercial
Code, to the extent that the transactions thereunder are governed by Article 2A of the
Uniform Commercial Code, and (iv) do not contain any exception or waiver of the benefits of a
Lessor under a finance lease governed by Article 2A of the Uniform Commercial Code, if
applicable.




     (f) Except as set forth in Section 4.19(f) of the Company Disclosure
Schedule, to the Knowledge of the Company, substantially all of the Loan Agreements and
substantially all of the Lease Agreements have the following characteristics: (i) each such
Loan Agreement or Lease Agreement was originated in the United States and the Scheduled
Payments thereunder are payable in U.S. dollars by each Obligor party thereto that was
domiciled in the United States at the time of origination , and (ii) no Obligor in respect of
any Loan Agreement or Lease Agreement is an Affiliate of the Company (excluding, for this
purpose, any portfolio company of a Company Stockholder).



59









 




     Section 4.20 Equipment and Collateral.


     (a) With respect to TVF, (i) TVF has a valid, perfected and enforceable first priority
security interest with respect to the collateral (which, for the purposes of this provision,
shall mean the primary items of Equipment being leased by TAF and not supplemental
collateral) with respect to which the creation and perfection of a security interest thereon
is governed by Article 9 of the Uniform Commercial Code intended to secure the obligations of
each Obligor under Loan Agreements, provided that the aggregate original principal amount of
such obligations was more than $25,000, and (ii) with respect to Equipment (which, for the
purposes of this provision, shall mean the primary items of Equipment being leased by TAF and
not supplemental collateral) subject to a Lease Agreement, (A) with respect to Leases other
than those governed by Article 9 of the Uniform Commercial Code, the Company, or the
applicable Subsidiary of the Company, has good and marketable title to such Equipment free
and clear of all Liens other than the Lien of such Lease and other Liens permitted under the
applicable Lease Agreements and (B) provided that the aggregate original equipment cost of
all Equipment leased to an Obligor is more than $25,000, with respect to Leases governed by
Article 9 of the Uniform Commercial Code, all notices to or filings with (including, without
limitation, precautionary Uniform Commercial Code financing statements) any Governmental
Entity that are necessary for the protection
or perfection of TVF’s security interest in the leased property have been made and are
in full force and effect.




     (b) With respect to TAF, (i) for Loan Agreements and Lease Agreements governed by
Article 9 of the Uniform Commercial Code, TAF has a valid, perfected and enforceable first
priority security interest with respect to collateral (which, for the purposes of this
provision, shall mean the primary items of Equipment being leased by TAF and not supplemental
collateral) with respect to which the creation and perfection of a security interest thereon
is governed by Article 9 of the Uniform Commercial Code and for which a first priority
security interest can be perfected by filing in the appropriate non-real property filing
office (subject to Liens permitted by the related Loan Agreement or Lease Agreement) and (ii)
with respect to Equipment (which, for the purposes of this provision, shall mean the primary
items of Equipment being leased by TAF and not supplemental collateral) under Lease
Agreements not governed by Article 9 of the Uniform Commercial Code, (A) the Company, or the
applicable Subsidiary of the Company, has good and marketable title to such Equipment free
and clear of all Liens other than the Lien of such Lease and other Liens permitted under the
applicable Lease Agreement, and (B) all notices to or filings (including, without
limitation, precautionary Uniform Commercial Code financing statements) with any Governmental
Entity that are necessary for the perfection of TAF’s security interest in the leased
property have been made and, to the Knowledge of the Company, are in full force and effect.



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               Section 4.21 Interest Rate Risk Management Instruments. All Derivative Transactions
entered into by the Company or any of its Subsidiaries or for the account of any of its customers
were entered into only in the Ordinary Course of Business and in all material respects in
accordance with applicable Laws, and in all material respects in accordance with the investment,
securities, commodities, risk management and other policies, practices and procedures employed by
the Company and its Subsidiaries, and were entered into with counterparties believed at the time to
be financially responsible and able to understand (either alone or in consultation with their
advisers) and to bear the risks of such Derivative Transactions. The Company and its Subsidiaries
have duly performed all of their material obligations under the Derivative Transactions to the
extent that such obligations to perform have accrued, and, to the Knowledge of the Company, there
are no breaches, violations or defaults or allegations or assertions of such by any party
thereunder.



               Section 4.22 Internal Controls. The Company and its Subsidiaries have devised and
maintain a system of internal accounting controls sufficient to provide reasonable assurances
regarding the reliability of the preparation of financial statements in accordance with GAAP. The
Company has disclosed, based on its most recent evaluation prior to the date hereof, to the
Company’s auditors and the audit committee of the Board of Directors of the Company any fraud,
whether or not material, that involves management or other employees who have a significant role in
the Company’s internal controls.



               Section 4.23 Investment Company Act. The Company is not an “investment company” or an
entity “controlled” by an “investment company” as such terms are defined in the Investment Company
Act of 1940, as amended.



               Section 4.24 Private Placement.




     (a) The Company understands and acknowledges that the issuance of the shares of Parent
Common Stock for the Merger Consideration pursuant to the Merger will not be registered
under the Securities Act and that any shares of Parent Common Stock will be issued to the
Company Stockholders in a private placement transaction effected in reliance on an
exemption from the registration requirements of the Securities Act and in reliance on
exemptions from the registration or qualification requirements of applicable Blue Sky Laws.
The Company acknowledges that any shares of Parent Common Stock so issued to the Company
Stockholders will be “restricted securities” within the meaning of Rule 144(a)(3) under the
Securities Act. To the Knowledge of the Company, each of the Company Stockholders is an
“accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated by the
Securities and Exchange Commission under the Securities Act.




     (b) The Company understands that no public market now exists for any of the securities
issued by Parent and that there is no assurance that a public market ever will exist for
the Parent Common Stock issued as Merger Consideration.



61









 






     (c) The Company has had an opportunity to discuss Parent’s business, management, and
financial affairs with Parent’s management and the opportunity to review Parent’s
facilities and business plan. The Company also has had an opportunity to ask questions of
officers of Parent. The Company acknowledges that it has had an opportunity to conduct its
own independent due diligence investigation of Parent.



               Section 4.25 Solvency. As of the date hereof and through the Effective Time, (i) the
amount of the “fair saleable value” of the assets of each of the Company and its Subsidiaries will
exceed (A) the value of all liabilities of the Company and such Subsidiaries, and (B) the amount
that will be required to pay the probable liabilities of the Company and such Subsidiaries on their
existing debts (including contingent liabilities) as such debts become absolute and matured, (ii)
each of the Company and its Subsidiaries will not have an unreasonably small amount of capital for
the operation of the businesses in which it is engaged, and (iii) each of the Company and its
Subsidiaries will be able to pay its liabilities, including contingent and other liabilities, as
they mature. For purposes of the foregoing, “not have an unreasonably small amount of capital for
the operation of the businesses in which it is engaged” and “able to pay its liabilities, including
contingent and other liabilities, as they mature” means that such Person will be able to generate
enough cash from operations, asset dispositions or refinancing including capital calls, or a
combination thereof, to meet its obligations as they become due.



               Section 4.26 Brokers and Other Advisors. No broker, investment banker, financial
advisor or other Person (other than Goldman, Sachs & Co.) is entitled to any broker’s, finder’s,
financial advisor’s or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of the Company.



               Section 4.27 Takeover Laws. No “fair price,” “affiliated transactions,” “moratorium,”
“control share acquisitions,” “business combination” or other similar anti-takeover statute,
provision or regulation (including Section 203 of the DGCL) enacted under state or federal law in
the United States applicable to the Company is applicable to the Merger or the other transactions
contemplated by this Agreement.



               Section 4.28 No Other Representations or Warranties. Except for the representations
and warranties contained in this Article IV, neither the Company nor any other Person makes
any express or implied representation or warranty on behalf of the Company or with respect to the
Company and any of the transactions contemplated hereby.



               Section 4.29 No Reliance on Forecasts. The Company acknowledges and agrees that neither
Parent nor any of its Subsidiaries makes or has made any representations or warranties regarding,
and neither the Company nor any of the Company Stockholders is relying upon, any financial
projections, forecasts, estimates of budgets, or future revenues, profits, results or operations,
cash flows or financial condition (or components thereof) or the future value or liquidity of the
Parent Common Stock.



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ARTICLE V




REPRESENTATIONS AND WARRANTIES OF THE DESIGNATED MONITOR



          The Designated Monitor represents and warrants to Parent and Merger Sub as follows:




               Section 5.1 Authority; Noncontravention.




     (a) The Designated Monitor has all requisite corporate or other power and authority to
execute and deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by the Designated Monitor and the consummation
by the Designated Monitor of the transactions contemplated hereby have been duly authorized
by all necessary corporate or other action on the part of the Designated Monitor and no
other corporate or other proceedings on the part of the Designated Monitor is necessary to
authorize this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Designated Monitor and, assuming the
due authorization, execution and delivery by each of the other parties hereto, constitutes
a legal, valid and binding obligation of the Designated Monitor, enforceable against the
Designated Monitor in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent transfer, moratorium, reorganization or similar Laws affecting the
rights of creditors
generally and the availability of equitable remedies (regardless of whether such
enforceability is considered in a proceeding in equity or at Law).




     (b) The execution and delivery of this Agreement by the Designated Monitor does not,
and the consummation by the Designated Monitor of the Merger and the other transactions
contemplated hereby and compliance by the Designated Monitor with the provisions of this
Agreement will not, conflict with, or result in any violation or breach of, or default
under any Law applicable to the Designated Monitor or its properties or other assets, or
Order applicable to the Designated Monitor of its properties or other assets.



               Section 5.2 No Other Representations or Warranties. Except for the representations
and warranties contained in this Article V, neither the Designated Monitor nor any other
Person makes any express or implied representation or warranty on behalf of the Designated Monitor
or with respect to the Designated Monitor and any of the transactions contemplated hereby.



ARTICLE VI




REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB



          Except as set forth in the corresponding sections or subsections of Parent Disclosure Schedule
(it being agreed that, except with regard to Section 6.7(i), disclosure of any item in any
section or subsection of Parent Disclosure Schedule shall be deemed




63









 







disclosure with respect to any
other section or subsection to which the relevance of such item is readily apparent on the face of
the disclosure to such other sections or subsections), Parent hereby represents and warrants to the
Company as follows:




               Section 6.1 Organization, Standing and Corporate Power.




     (a) Parent and each of its Subsidiaries has been duly organized, is validly existing
and in good standing (with respect to jurisdictions that recognize such concept) under the
Laws of the jurisdiction of its incorporation or formation, as the case may be, and has all
requisite corporate or other power and authority and possesses all Permits necessary to
enable it to use its corporate or other name and to own, lease or otherwise hold and
operate its properties and other assets and to carry on its business as currently
conducted, except where the failure to possess such Permits, individually or in the
aggregate, would not have a Parent Material Adverse Effect or prevent or materially impair
the ability of Parent to perform its obligations under this Agreement or prevent or
materially impede, hinder or delay the consummation of the Merger or the other transactions
contemplated hereby. Parent and each of its Subsidiaries is duly qualified or licensed to
do business and is in good standing (with respect to jurisdictions that recognize such
concept) in each jurisdiction in which the nature of its business or the ownership, leasing
or operation of its properties makes such qualification, licensing or good standing
necessary, except where the failure to be so qualified or licensed, individually or in the
aggregate, would not have a Parent Material Adverse Effect or prevent or
materially impair the ability of Parent to perform its obligations under this
Agreement or prevent or materially impede, hinder or delay the consummation of the Merger
or the other transactions contemplated hereby. Parent is duly registered as a savings and
loan holding company under HOLA. Parent has made available to the Company, prior to the
date of this Agreement, complete and accurate copies of its Amended and Restated
Certificate of Incorporation (the “Parent Certificate”) and Amended and Restated
By-laws (the “Parent By-laws”), the Certificate of Incorporation of Merger Sub (the
“Merger Sub Certificate”) and the By-laws of Merger Sub (the “Merger Sub
By-laws”), in each case as amended to the date hereof.




     (b) Except for its ownership of EverBank, Parent does not own, beneficially or of
record, either directly or indirectly any voting securities or equity interests in any
depository institution (as defined in 12 U.S.C. Section 1813(c)(1) (other than shares held
in trust accounts, managed accounts and the like for the benefit of customers).




     (c) EverBank is a federal savings association, duly organized and licensed, validly
existing and in good standing under HOLA. The deposit accounts of EverBank are insured by
the Federal Deposit Insurance Corporation (the “FDIC”) through the Deposit
Insurance Fund to the fullest extent permitted by Law, provided, however,
that EverBank has not elected to extend its participation in the FDIC’s Transaction Account
Guarantee component of the Temporary



64









 







Liquidity Guarantee Program (“TAG”), under
which noninterest-bearing transaction accounts are insured without limit by the FDIC.
EverBank’s participation in TAG will expire on December 31, 2009, at which time such
noninterest-bearing transaction accounts will be insured by the FDIC in accordance with
other applicable Law, including regulations of the FDIC. All premiums and assessments
required to be paid in connection therewith have been timely paid.



               Section 6.2 Subsidiaries. Section 6.2 of the Parent Disclosure
Schedule lists, as of the date hereof, each Subsidiary of Parent, including its state of
incorporation or formation and each jurisdiction in which such Subsidiary is qualified or licensed
to do business. All of the outstanding capital stock of, or other equity interests in, each
Subsidiary of Parent is directly or indirectly owned by Parent. All the issued and outstanding
shares of capital stock of, or other equity interests in, each such Subsidiary owned by Parent have
been validly issued and are fully paid and nonassessable and are owned directly or indirectly by
Parent, free and clear of all Liens, and free of any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other equity interests. Except for the capital stock
of, or voting securities or equity interests in, its Subsidiaries, Parent does not own, directly or
indirectly, as of the date hereof, any capital stock of, or other voting securities or equity
interests in, any Person. Copies of the charter and by-laws or comparable organizational documents
and any amendments thereto
for each of Parent’s Subsidiaries were furnished to the Company and are true, complete and
correct copies of such documents as in effect on the date of this Agreement.



               Section 6.3 Capital Structure.




     (a) The authorized capital stock of Merger Sub consists of one hundred (100) shares of
common stock, par value $0.01 per share (the “Merger Sub Common Stock”). As of the
date hereof, Parent beneficially owns each issued and outstanding share of Merger Sub
Common Stock and, at the Effective Time, Merger Sub will be a direct or indirect wholly
owned Subsidiary of Parent. Merger Sub has not incurred nor prior to the Closing shall it
incur any liabilities or obligations, except those incurred in connection with its
organization and the negotiation of this Agreement and the performance hereof, and the
consummation of the transactions contemplated hereby, including the Merger. Except as
contemplated by this Agreement, Merger Sub has not engaged in any business activities of
any type or kind whatsoever, or entered into any agreements or arrangements with any
Person, or become subject to or bound by any obligation or undertaking.




     (b) The authorized capital stock of Parent consists of five million (5,000,000) shares
of common stock, par value $0.01 per share (the “Parent Common Stock”) and one
million (1,000,000) shares of preferred stock, par value $0.01 per share (the “Parent
Preferred Stock”). As of the date of this Agreement: (i) 2,748,269 shares of Parent
Common Stock are issued and outstanding (none of which were held by Parent in its
treasury); and (ii) no shares of Parent Common



65









 







Stock are owned by Subsidiaries of Parent.
As of the date of this Agreement, (i) 250,000 shares of Parent Preferred Stock are
designated by Parent as Series A 6% Cumulative Convertible Preferred Stock (the “Parent
Series A Preferred Stock”), of which 186,744 are issued and outstanding and (ii)
150,000 shares of Parent Preferred Stock are designated by Parent as 4% Series B Cumulative
Participating Perpetual Pay in Kind Preferred Stock (the “Parent Series B Preferred
Stock”), of which 129,614.25 shares were issued and outstanding. As of the date of
this Agreement the outstanding shares of Parent Series A Preferred Stock are in the
aggregate convertible into 186,744 shares of Parent Common Stock and the outstanding shares
of Parent Series B Preferred Stock are convertible into 1,010,317 shares of Parent Common
Stock. As of the close of business on October 16, 2009, 657,753 Parent stock options were
issued and outstanding. Each outstanding share of Parent Common Stock and Merger Sub
Common Stock is duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights or similar rights and issued in compliance with applicable state and
federal securities Laws.




     (c) Each outstanding share of Parent Common Stock to be issued as Merger Consideration
pursuant to this Agreement will be duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights or similar rights and
issued in compliance with applicable state and federal securities Laws. Parent has
reserved from its duly authorized capital stock sufficient shares of Parent Common Stock
for issuance in order to meet its obligations pursuant to this Agreement and the
transactions contemplated hereby.




     (d) Section 6.3(d) of the Parent Disclosure Schedule sets forth a
true, complete and correct list, as of the date of this Agreement, of the record owners of
the shares of (i) the Parent Common Stock, (ii) the Parent Preferred Stock, (iii) options
to purchase Parent Common Stock or Parent Preferred Stock and (iv) restricted stock units
in respect of the Parent Common Stock and the Parent Preferred Stock, in each case
indicating the number of such shares or units held of record by each such Person and, as
applicable, the exercise price, conversion rate or price and vesting details of such shares
or units.




     (e) There are not issued, reserved for issuance or outstanding (i) any securities of
Parent or Merger Sub convertible into or exchangeable or exercisable for shares of Parent
Common Stock or Merger Sub Common Stock, respectively, other voting securities or equity
interests of Parent or Merger Sub or (ii) any warrants, calls, options or other rights to
acquire from Parent or Merger Sub, and no obligation of Parent or Merger Sub to issue any
capital stock, voting securities, equity interests or securities convertible into or
exchangeable or exercisable for Parent Common Stock, Merger Sub Common Stock or voting
securities of Parent or Merger Sub. There are not any outstanding obligations of Parent or
Merger Sub to repurchase, redeem or otherwise acquire any such securities or to issue,
deliver or sell, or cause to be issued, delivered or sold, any such securities. Neither
Parent




66











 






nor Merger Sub is a party to any voting Contract with respect to the voting of any
such securities.




     (f) Parent has obtained all necessary waivers such that no holder of any capital stock
of Parent has any preemptive rights or other rights to purchase additional shares of Parent
in connection with the Merger and any of the transactions contemplated hereby, including
without limitation the Initial Investment and the distribution of the Merger Consideration
to the Company Stockholders.




     (g) There are no bonds, debentures, notes or other Indebtedness of Parent or Merger
Sub having the right to vote (or convertible into, or exchangeable for, securities having
the right to vote) on any matters on which stockholders of Parent or Merger Sub,
respectively, may vote.



               Section 6.4 Authority; Noncontravention.




     (a) Each of Parent and Merger Sub has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by Parent and Merger Sub and the consummation
by Parent and Merger Sub of the
transactions contemplated hereby have been duly authorized by all necessary corporate
action on the part of Parent and Merger Sub and by all necessary shareholder action on the
part of Parent’s shareholders and no other corporate proceedings on the part of Parent and
Merger Sub are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by each of Parent
and Merger Sub and, assuming the due authorization, execution and delivery by each of the
other parties hereto, constitutes a legal, valid and binding obligation of Parent and
Merger Sub, enforceable against Parent and Merger Sub, as applicable, in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, moratorium,
reorganization or similar Laws affecting the rights of creditors generally and the
availability of equitable remedies (regardless of whether such enforceability is considered
in a proceeding in equity or at Law).




     (b) The board of directors of each of Parent and Merger Sub, by resolutions duly
adopted at a meeting duly called and held, has unanimously (i) approved, and declared
advisable, the agreement of merger (within the meaning of Section 607.1104 of the FBCA and
Section 251 of the DGCL, respectively) contained within this Agreement, (ii) determined
that the terms of this Agreement are fair to, and in the best interests of, Parent and
Merger Sub, respectively, and their respective stockholders and (iii) recommended that the
shareholders of Parent approve the Amended and Restated Certificate of Incorporation of
Parent and that Parent, as the sole stockholder of Merger Sub, adopt this Agreement and
approve the transactions contemplated hereby, which resolutions have not as of the date
hereof been subsequently rescinded, modified or withdrawn in any way.



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     (c) The execution and delivery of this Agreement by Parent and Merger Sub do not, and
the consummation by Parent and Merger Sub of the Merger and the other transactions
contemplated hereby and compliance by Parent and Merger Sub with the provisions of this
Agreement will not, conflict with, or result in any violation or breach of, or default
(with or without notice or lapse of time, or both) under, or give rise to a right of, or
result in, termination, modification, cancellation or acceleration of any obligation or to
the loss of a benefit under, or result in the creation of any Lien (other than a Permitted
Lien) in or upon any of the properties or other assets of Parent and Merger Sub under;
(i) the Parent Certificate, Merger Sub Certificate, Parent By-laws or the Merger Sub
By-laws or the comparable organizational documents of any of the Subsidiaries of Parent;
(ii) any Parent Material Contract to which Parent or any of its Subsidiaries is a party or
any of their respective properties or other assets is subject; or (iii) assuming (solely
with respect to performance of this Agreement and consummation of the Merger and the other
transactions contemplated hereby) compliance with the matters referred to in Section
6.4(d) any (A) Law applicable to Parent or any of its Subsidiaries or any of their
respective properties or other assets, or (B) Order applicable to Parent or any of its
Subsidiaries or any of their respective properties or other assets.




     (d) No consent, approval, Order or authorization or Permit of, action by or in respect
of, registration, declaration or filing with, or notification to any Governmental Entity is
required by Parent or any of its Subsidiaries in connection with the execution and delivery
of this Agreement by Parent and Merger Sub, respectively, or the consummation of the Merger
or the other transactions contemplated hereby, except for (i) (A) the filing of premerger
notifications and report forms under the HSR Act and the expiration or termination of the
waiting period required thereunder, and (B) the receipt, termination or expiration, as
applicable, of approvals or waiting periods required under any other applicable Antitrust
Law; (ii) consents, approvals, Orders or authorizations or Permits of, actions by or in
respect of, registration, declaration or Permits of, actions by or in respect of,
registration, declaration or filing with, or notification to (A) the OTS pursuant to 12
C.F.R. § 559.11 and 12 C.F.R. § 563.41(b), referencing the Federal Reserve Regulation W, 12
C.F.R. § 223.31(d), and (B) the FDIC pursuant to 12 C.F.R. § 362.15 and; (iii) applicable
requirements of the Securities Act, the Exchange Act, and state securities takeover and
“blue sky” laws, as may be required in connection with this Agreement and the transactions
contemplated hereby; and (iv) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware. As of the date hereof, to the Knowledge of Parent, there is
no circumstance, condition or event regarding Parent that is reasonably likely to cause the
condition in Section 10.1(b) and Section 10.2(h) to fail to be satisfied.



               Section 6.5 Parent Financial Statements. Attached to Section 6.5 of the
Parent Disclosure Schedule are (a) audited consolidated balance sheets for Parent and each
of its Subsidiaries as of December 31, 2008 and audited consolidated statements of operations for
the fiscal years ended December 31, 2008 (such financial



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statements, including the footnotes
contained therein, the “Parent Audited Financial Statements”), and the reports thereon of
independent certified public accountants, and (b) an unaudited consolidated balance sheet for
Parent and each of its Subsidiaries (to the extent that such Subsidiary’s balance sheets are
generally prepared) as of September 30, 2009 and an unaudited consolidated statement of operations
for the nine (9) month period ended September 30, 2009 (such financial statements, including the
footnotes contained therein, are referred to as the “Parent Interim Financial Statements,”
and, together with the Parent Audited Financial Statements, the “Parent Financial
Statements”). Each of the Parent Financial Statements has been prepared in accordance with
GAAP consistently applied throughout the periods covered by each such statement, is consistent with
the books and records of Parent and its Subsidiaries, and fairly present, in all material respects,
the consolidated financial condition of Parent and each of its Subsidiaries as of the respective
dates and the results of operations and cash flows of Parent and its each of Subsidiaries for the
respective periods then ended, as applicable, subject to, in the case of the Parent Interim
Financial Statements (i) the absence of notes and schedules, and (ii) normal year-end adjustments.



               Section 6.6 No Undisclosed Liabilities. Except as set forth in Section 6.6 of
the Parent Disclosure Schedule, neither Parent nor any of its Subsidiaries
has any Liabilities or obligations of any nature (absolute, accrued, contingent or otherwise)
that are required to be reflected or reserved against in the Parent Financial Statements or in the
notes thereto in accordance with GAAP, other than (i) Liabilities so reflected or reserved against
in the Parent Financial Statements in accordance with GAAP or (ii) Liabilities that have arisen
since the date of the Parent Interim Financial Statements, in the ordinary and usual course of
business consistent with past practice.



               Section 6.7 Absence of Changes. Since the date of the Parent Audited Financial
Statements, (i) there has not been a Parent Material Adverse Effect; (ii) Parent and its
Subsidiaries have conducted their respective businesses in all material respects in the ordinary
course consistent with past practice and (iii) Parent and its Subsidiaries have not taken any
action or omitted to take any action that, if taken or omitted to be taken after the date hereof,
would constitute a violation of Section 8.1.



               Section 6.8 Litigation.




     (a) There are no Actions pending or, to the Knowledge of Parent, threatened against
Parent or any of its Subsidiaries or any of the executive officers or directors of Parent
in their capacities as such, or any Actions to which Parent or any of its Subsidiaries is
otherwise a named party.




     (b) Neither Parent nor any of its Subsidiaries nor any of their respective properties
or assets is or are subject to any Order, writ, judgment, injunction, settlement, decree or
award of any Governmental Entity.



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               Section 6.9 Material Contracts.




     (a) Section 6.9 of the Parent Disclosure Schedule sets forth all of
the following Contracts to which Parent or any of its Subsidiaries is a party, other than
Parent Benefit Plans and Parent Employment Agreements that are subject to Section
6.20 (“Parent Material Contract”):




     (i) any Contract with any Affiliate, employee, current or former director,
officer or stockholder of Parent or any of its Subsidiaries or with a family member
of any of the foregoing or with an entity in which any of the foregoing is a
controlling Person;




     (ii) any Contract relating to the disposition or acquisition of any material
assets, the disposition or acquisition of any business or any entity or any merger
or other business combination, other than dispositions in the ordinary course of
business of loans and mortgage assets;




     (iii) any Contract pursuant to which Parent or any of its Subsidiaries
establishes a joint venture or partnership involving a sharing of profits, Losses,
costs, or Liabilities by Parent or any of its Subsidiaries with any other Person;




     (iv) any trust indenture, mortgage, note, promissory note, bond, loan or
credit agreement or other Contract relating to Indebtedness of Parent, any currency
exchange, commodities or other hedging arrangement, or any leasing transaction of
the type required to be capitalized by Parent or any of its Subsidiaries in
accordance with GAAP;




     (v) any Contract that is primarily a Contract of guarantee, support,
assumption or endorsement of, or any similar commitment with respect to Liabilities
of any other Person involving a dollar value in excess of two hundred thousand
dollars ($200,000);




     (vi) any Contract that Parent reasonably anticipates will involve aggregate
payments or consideration furnished by or to Parent or any of its Subsidiaries of
more than two hundred thousand dollars ($200,000) in any year;




     (vii) any Contract for capital expenditures in excess of two hundred thousand
dollars ($200,000) in the aggregate;




     (viii) any Contract with any Governmental Entity;




     (ix) any Contract providing for the indemnification by Parent or any of its
Subsidiaries of any Person, except for any such Contract that is (x) not material
to Parent or any of its Subsidiaries and (y) entered into in the ordinary course of
business;



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     (x) any Contract that grants any right of first refusal or right of first
offer or similar right or that limits or purports to limit the ability of Parent to
own, operate, sell, transfer, pledge or otherwise dispose of any material amount of
its assets or its business;




     (xi) any Contract that contains a “most favored nation” clause or requires any
type of exclusive dealing or similar arrangement involving Parent or any of its
Subsidiaries; and




     (xii) any other Contract that is material to Parent or any of its
Subsidiaries.




     (b) Copies of all such Parent Material Contracts referred to in Section 6.9(a)
previously have been delivered to or made available for inspection by the Company, and such
copies are complete and correct. (i) Each Parent Material Contract is a valid and binding
obligation of Parent and is in full force and effect, (ii) Parent has performed in all
material respects all obligations required to be performed by it to date under each Parent
Material Contract and is not (with or without the lapse of time or the giving of notice, or
both) in material breach or default thereunder, (iii) to the Knowledge of Parent, each of
the other parties to each Parent Material Contract has performed all obligations required
to be
performed by it to date under such Parent Material Contract and is not in all material
respects (with or without the lapse of time or the giving of notice, or both) in material
breach or default thereunder, and (iv) Parent has received no notice from any other party
of its intent to cancel or terminate any Parent Material Contract.



               Section 6.10 Compliance with Laws; Reports. Parent and each of its Subsidiaries:




     (a) have complied in all material respects with all Laws and Orders applicable to them
or to the employees conducting their businesses, including but not limited to the Federal
Reserve Act, the Equal Credit Opportunity Act, the Fair Housing Act, HOLA, the Community
Reinvestment Act, the Home Mortgage Disclosure Act, the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
the Consumer Credit Protection Act, the Homeowners Ownership and Equity Protection Act, the
Truth-in-Lending Act and Regulation Z, the Real Estate Settlement Procedures Act and
Regulation X, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the
Federal Deposit Insurance Act, the Currency and Foreign Transactions Reporting Act of 1970
and all other applicable federal, state and local usury, consumer and mortgage lending and
insurance Laws;




     (b) have all material Permits that are required in order to permit Parent and each of
its Subsidiaries to carry on its business as currently conducted, as listed on Section
6.10(b) of the Parent Disclosure Schedule; all such Permits are in full force
and effect and Parent and each of its Subsidiaries are in compliance



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therewith in all
material respects, and no suspension, revocation or cancellation of any such Permits has
occurred or, to the Knowledge of Parent, is threatened;




     (c) except for examinations conducted by the OTS, have received no notification or
communication from any Governmental Entity (i) asserting that Parent or any of its
Subsidiaries is not in compliance with any Laws or Orders, (ii) threatening to revoke any
material Permit or other governmental authorization, (iii) threatening or contemplating
revocation or limitation of, or which would have the effect of revoking or limiting, FDIC
deposit insurance or (iv) failing to approve any proposed transaction, or stating its
intention not to approve transactions, proposed to be effected by Parent or any such
Subsidiary within a certain period of time or indefinitely;




     (d) are not a party to or subject to any Order, agreement, memorandum of understanding
or similar arrangement with, or a commitment letter, supervisory letter or similar
submission to, and have not adopted any board resolution at the request of, any
Governmental Entity charged with the supervision or regulation of depository institutions
or engaged in the insurance of deposits or the supervision or regulation of Parent or any
of its Subsidiaries that currently restricts in any material respect the conduct of any of
their businesses or that in any material manner relates to any of their capital adequacy,
liquidity and funding policies and
practices, ability to pay dividends, credit, risk management or compliance policies,
internal controls, management or operations, and neither Parent nor any of its Subsidiaries
has been advised since January 1, 2007 by any such Governmental Entity that such
Governmental Entity is contemplating issuing or requesting Parent or any such Subsidiary
(or is considering the appropriateness of issuing or requesting) any such Order, agreement,
memorandum of understanding, commitment letter, supervisory letter or similar submission or
request. To the Knowledge of Parent, there are no investigations relating to any material
regulatory matters pending before any Governmental Entity with respect to Parent or its
Subsidiaries; and




     (e) have, since January 1, 2007, timely filed (other than any immaterial failures to
timely file) all material Governmental Filings that they were required to file with (i) the
OTS, (ii) the FDIC, and (iii) other applicable Governmental Entities, and have paid all
material fees and assessments due and payable in connection therewith. As of their
respective dates, such Governmental Filings complied in all material respects with all
applicable Laws and were complete and accurate in all material respects.



               Section 6.11 Related Party Transactions.




     (a) Neither Parent nor any of its Subsidiaries is a party to any Contract, arrangement
or transaction with any employee, current or former director, officer or manager, any
stockholder or other equity security holder, of Parent or any of its Affiliates.



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     (b) Section 6.11(b) of the Parent Disclosure Schedule sets forth a
true and complete list of (i) any and all loans or other extensions of credit made or
guaranteed by Parent or any of its Subsidiaries to or for the benefit of any current or
former director, officer, stockholder or employee of Parent or any of its Affiliates (other
than advances of business expenses in the ordinary course of business consistent with past
practice) and (ii) any and all loans, guarantees, or other extensions of credit of any
amount made to or for the benefit of Parent by any of such Persons.



               Section 6.12 Interest Rate Risk Management Instruments. All Derivative Transactions
entered into by Parent or any of its Subsidiaries or for the account of any of its customers were
entered into only in the ordinary course of business and in all material respects in accordance
with applicable Laws, and in all material respects in accordance with the investment, securities,
commodities, risk management and other policies, practices and procedures employed by Parent and
its Subsidiaries, and were entered into with counterparties believed at the time to be financially
responsible and able to understand (either alone or in consultation with their advisers) and to
bear the risks of such Derivative Transactions. Parent and its Subsidiaries have duly performed
all of their obligations under the Derivative Transactions to the extent that such obligations to
perform have accrued, and, to the Knowledge of Parent, there are no breaches, violations or
defaults or allegations or assertions of such by any party thereunder.



               Section 6.13 Insurance. Parent and each of its Subsidiaries have been and presently
are insured, for reasonable amounts with financially sound and reputable insurance companies
against such risks as companies engaged in a similar business would, in accordance with good
business practice, customarily be insured. Copies of all material insurance policies maintained by
Parent and its Subsidiaries as of the date of this Agreement, including fire and casualty, general
liability, product liability, business interruption, directors and officers and other professional
liability policies, have been made available to the Company. All such insurance policies are in
full force and effect. Neither Parent nor any of its Subsidiaries is in material breach or
default, and neither Parent nor any of its Subsidiaries has taken any action or failed to take any
action which, with notice or lapse of time or both, would constitute such a material breach or
default, or permit a termination or modification of any of the material insurance policies of
Parent and its Subsidiaries.



               Section 6.14 Internal Controls. Parent and its Subsidiaries have devised and maintain
a system of internal accounting controls sufficient to provide reasonable assurances regarding the
reliability of the preparation of financial statements in accordance with GAAP. Parent has
disclosed, based on its most recent evaluation prior to the date hereof, to Parent’s auditors and
the audit committee of the Board of Directors of Parent any fraud, whether or not material, that
involves management or other employees who have a significant role in Parent’s internal controls.



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               Section 6.15 Investment Company Act. Parent is not an “investment company” or an
entity “controlled” by an “investment company” as such terms are defined in the Investment Company
Act of 1940, as amended.



               Section 6.16 Brokers and Other Advisors. No broker, investment banker, financial
advisor or other Person (other than Merrill Lynch, Pierce, Fenner & Smith Incorporated and The Alta
Group, LLC) is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or
commission in connection with the transactions contemplated hereby based upon arrangements made by
or on behalf of Parent or Merger Sub.



               Section 6.17 No Reliance on Forecasts. Parent acknowledges and agrees that neither the
Company nor any of its Subsidiaries makes or has made any representations or warranties regarding,
and Parent is not relying upon, any financial projections, forecasts, estimates of budgets, or
future revenues, profits, results of operations, cash flows or financial condition (or components
thereof).



               Section 6.18 Takeover Laws. No “fair price,” “affiliated transactions,” “moratorium,”
“control share acquisitions,” “business combination” or other similar anti-takeover statute,
provision or regulation (including Section 607.0901 and 607.0902 of the FBCA) enacted under state
or federal law in the United States applicable to Parent is applicable to the Merger or the other
transactions contemplated by this Agreement.



               Section 6.19 Loans. Each loan reflected as an asset on the Parent Financial
Statements with an original principal amount in excess of $500,000 (a) constitutes the legal, valid
and binding obligation of the obligor named therein and of all guarantors of such loan, in each
case enforceable in accordance with its terms, and (b) if such loan is secured, Parent or all of
its applicable Subsidiaries have been granted a security interest in all collateral for such loan
with the priority and with respect to the collateral specified in the applicable credit approval
documents, which security interest has been perfected in accordance with applicable Laws, except in
the case of each of clauses (a) and (b) to the extent that the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws
of general applicability relating to or affecting creditors’ rights and to general equity
principles. All such loans referred to in the immediately preceding sentence originated by Parent
or any of its Subsidiaries, and all such loans purchased by Parent or any of its Subsidiaries, were
made or purchased in all material respects in accordance with applicable Laws.



               Section 6.20 Parent Employee Benefits Plans.




     (a) Section 6.20(a) of the Parent Disclosure Schedule contains a true
and complete list of (i) each deferred compensation and each incentive compensation, stock
purchase, stock option and other equity compensation plan, program, agreement or
arrangement; each severance or termination pay, medical, surgical, hospitalization, life
insurance and other “welfare” plan, fund or program



74









 







(within the meaning of Section 3(1) of
ERISA); each profit-sharing, stock bonus or other “pension” plan, fund or program (within
the meaning of Section 3(2) of ERISA); and each other employee benefit plan, fund, program,
agreement or arrangement, in each case, that is sponsored, maintained or contributed to or
required to be contributed to by Parent or any Subsidiary for the benefit of any employee
or former employee of Parent or any Subsidiary or any current or former director of Parent
(the “Parent Benefit Plans”) and (ii) each employment, termination or severance
agreement (the “Parent Employment Agreements”). Each of the Parent Benefit Plans
that is subject to Section 302 or Title IV of ERISA or Section 412 of the Code is
hereinafter referred to in this Section 6.20 as a “Parent Title IV Plan.”
Parent has made available to the Company a true and complete copy of each Parent Benefit
Plan and each Parent Employment Agreement and a true and complete copy of the following
items (in each case, only if applicable) (i) each trust or other funding arrangement, (ii)
each summary plan description and summary of material modifications, (iii) the most
recently filed annual report on the IRS Form 5500, and (iv) the most recently received IRS
determination letter.




     (b) Each Parent Benefit Plan has been operated and administered in accordance with its
terms and is in substantial compliance with applicable Laws, including, without limitation,
ERISA and the Code. With respect to each Parent Benefit Plan intended to be “qualified”
within the meaning of Section 401(a) of the Code, (i) each such Parent Benefit Plan has
been determined to be so qualified and
has received a favorable determination letter from the IRS with respect to its
qualification, (ii) the trusts maintained thereunder have been determined to be exempt from
taxation under Section 501(a) of the Code, and (iii) to the Knowledge of Parent, its
Subsidiaries and any Parent ERISA Affiliate, no event has occurred that could reasonably be
expected to result in disqualification or adversely affect such exemption.




     (c) No Liability under Title IV or Section 302 of ERISA has been incurred by Parent or
any Parent ERISA Affiliate that has not been satisfied in full, and no condition exists
that presents a material risk to Parent or any Parent ERISA Affiliate of incurring any such
Liability, other than Liability for premiums due the PBGC (which premiums have been paid
when due). No Parent Title IV Plan or any trust established thereunder has incurred any
“accumulated funding deficiency” (as defined in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, as of the last day of the most recent fiscal year of each
Parent Title IV Plan ended prior to the date hereof.




     (d) No Parent Benefit Plan (including for this purpose, any employee benefit plan
described in ERISA Section 3(3) that Parent, any Subsidiary or any Parent ERISA Affiliate
maintained, sponsored or contributed to within the six-year period preceding the date
hereof) is (i) a “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA), (ii) a
“multiple employer plan” (within the meaning of Section 413(c) of the Code) or (iii) a
Parent Title IV Plan.



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     (e) There are no material pending or threatened claims by or on behalf of any Parent
Benefit Plan, by any employee or former employee or beneficiary covered under any such
Parent Benefit Plan, or otherwise involving any such Parent Benefit Plan (other than
routine claims for benefits).




     (f) No Parent Benefit Plan provides benefits, including without limitation, death or
medical benefits (whether or not insured), beyond retirement or other termination of
service, other than (i) coverage mandated solely by applicable Law or (ii) benefits, the
full costs of which are borne by the participant or his or her beneficiary.




     (g) Each Parent Benefit Plan and Parent Employment Agreement that is a “nonqualified
deferred compensation plan” (as defined for purposes of Section 409A(d)(1) of the Code) has
(i) been maintained and operated since January 1, 2005 in good faith compliance with
Section 409A of the Code and all applicable IRS guidance promulgated thereunder so as to
avoid any Tax, penalty or interest under Section 409A of the Code and, as to any such plan
in existence prior to January 1, 2005, has not been “materially modified” (within the
meaning of IRS Notice 2005-1) at any time after October 3, 2004, and (ii) since January 1,
2009, been in documentary and operational compliance with Section 409A of the Code and all
applicable IRS guidance promulgated thereunder.




     (h) Neither the execution of this Agreement nor the consummation of the transactions
contemplated hereby will, either alone or in combination with another event, (i) entitle
any current or former employee, officer or director of Parent or any Parent ERISA Affiliate
to severance pay, unemployment compensation or any other payment, except as expressly
provided in this Agreement, or (ii) accelerate the time of payment or vesting, or increase
the amount of compensation due any such employee, officer, or director.



               Section 6.21 Trust Preferred Securities. (i) Each Trust Document is in full force and
effect and constitutes the valid, binding, legally enforceable and non-cancelable obligations of
Parent or one of its Subsidiaries, and to the Knowledge of Parent, the other parties thereto,
enforceable in accordance with its terms and (ii) the issuance of the trust preferred securities
under the Trust Documents was in compliance in all material respects with all applicable Laws.



               Section 6.22 No Other Representations or Warranties. Except for the representations
and warranties contained in this Article VI, neither Parent nor any other Person makes any
express or implied representation or warranty on behalf of Parent or with respect to Parent and the
transactions contemplated hereby.



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ARTICLE VII




COMPANY COVENANTS



               Section 7.1 Conduct of Business.




     (a) Except as otherwise expressly permitted or required by this Agreement or as set
forth in the Business Line Modification Plan or as set forth in Section 7.1 of the
Company Disclosure Schedule, during the period commencing on the date hereof and
ending on the earlier of the Effective Time, and the date on which this Agreement is
terminated pursuant to Section 11.1, the Company shall:




     (i) conduct its operations in the Ordinary Course of Business and, to the
extent consistent therewith, to preserve intact its business organizations and
maintain satisfactory relationships with the Company’s customers and each other
Person having material business relationships with the Company;




     (ii) pay all of its Liabilities and Taxes when due (subject to good faith
dispute thereof); and




     (iii) maintain the financial books, accounts, and records of the Company
consistent with the policies, practices and procedures as used in the preparation
of the Company Financial Statements.




     (b) Without limiting the generality of the foregoing, except as otherwise expressly
permitted or required by this Agreement or as set forth in the
Business Line Modification Plan or set forth in Section 7.1 of the Company
Disclosure Schedule, during the period referred to in Section 7.1(a), the
Company shall not effect, or permit any of its Subsidiaries to effect, any of the following
without the prior written consent of Parent (which shall not be unreasonably withheld or
delayed):




     (i) make or permit to be made any change in or amendment to the Company
Certificate or the Company By-laws or any charter or by-laws or comparable
organizational documents of any of its Subsidiaries;




     (ii) issue or sell, or authorize to issue or sell, any shares of Company
Common Stock or any capital stock of its Subsidiaries or any other ownership
interests, or issue or sell, or authorize to issue or sell, any securities
convertible into or exchangeable for, or options, warrants or rights to purchase or
subscribe for, or enter into any arrangement or Contract with respect to the
issuance or sale of, any shares of its or its Subsidiaries’ securities or any other
ownership interests or amend or modify any of the foregoing outstanding on the date
hereof;



77









 






     (iii) split, combine, redeem or reclassify, purchase or otherwise acquire any
shares of Company Common Stock or capital stock of its Subsidiaries;




     (iv) enter into any commitment in respect of, or take any other action in
furtherance of, any actual or proposed direct or indirect merger, consolidation,
stock purchase, tender offer, exchange offer, issuance, sale, distribution, other
disposition, recapitalization, restructuring, spin-off or any similar transaction
of or involving the Company or any of its Subsidiaries (whether as merger partner,
purchaser or seller) or any of the securities (or options, rights or warrants to
purchase, or securities convertible into, such securities) of the Company or any of
its Subsidiaries, or any transaction that is similar in form, substance or purpose
to any of the foregoing transactions;




     (v) enter into any new line of business or change its risk and asset liability
management and other material operating policies, except as required by applicable
Law;




     (vi) make any investment in, acquisition of capital stock or assets of, or
capital contributions to, any Person (other than between itself and any of its
direct and indirect wholly-owned Subsidiaries) or pursuant to any existing Contract
identified in Section 7.1(b)(vi) of the Company Disclosure Schedule
or any Lease Agreement or Loan Agreement;




     (vii) other than assets that relate to Company Intellectual Property, which
shall be subject to Section 7.1(b)(xviii) below, except in the Ordinary
Course of Business (A) mortgage, pledge or subject to any
Lien any of its or its Subsidiaries’ properties or assets, (B) acquire any
assets or (C) sell, assign, transfer, convey, lease, distribute or otherwise
dispose of any assets of the Company or any of its Subsidiaries, except for such
dispositions in connection with (1) any obsolete, expired, damaged or worn out
properties or assets or (2) any Loan Agreements or Lease Agreements,
provided that (x) the consideration received for any assets sold or
disposed of in connection with any such Loan Agreements or Lease Agreement shall be
in an amount at least equal to the fair market value thereof (determined in good
faith by the management of the Company) and (y) no less than one hundred percent
(100%) of the consideration received therefore shall be paid in cash);




     (viii) declare or pay any dividend or distribution, except as provided under
Section 7.2;




     (ix) enter into, amend, terminate, assign, transfer or extend (x) any Company
Material Contract other than in the Ordinary Course of Business or (y) any Contract
that would require consent in connection with this Agreement, the Merger



78









 







or any
other transaction contemplated hereby or any other Contract imposing a material
restriction on the Company or its Affiliates;




     (x) incur or become contingently liable with respect to any Indebtedness; or
make any loan or advance to any other Person, other than advances of business
expenses to employees or in the Ordinary Course of Business;




     (xi) enter into any commitment or transaction (including any borrowing,
capital expenditure or purchase, sale or Lease of assets) requiring a capital
expenditure, or make any capital expenditures, capital additions or capital
improvements or any other capital expenditure in excess of two hundred thousand
dollars ($200,000);




     (xii) accept any capital contribution or otherwise increase the Company’s
capital, except as set forth in Section 7.3, Section V.3(c) of
Schedule V or for the purposes of the Initial Investment;




     (xiii) settle or compromise any Action (whether or not commenced prior to the
date of this Agreement) other than settlements or compromises thereof providing
solely for monetary relief (not including any settlement or compromise related to
Taxes) where the amount paid in settlement or compromise does not exceed five
hundred thousand dollars ($500,000), individually or in the aggregate, for all such
Actions, and does not involve any other obligation of the Company or any of its
Subsidiaries other than a customary release with respect to such Action;




     (xiv) engage in, enter into, amend or extend any Related Party Transaction,
except as set forth in Section 7.5;




     (xv) hire any employee, unless (x) the purpose of the hiring is to fill any
position vacated after the date the hereof and such vacated position is not
contemplated by the Business Line Modification Plan and (y) such employee’s
aggregate annual base compensation does not exceed one hundred thousand ($100,000)
or such employee is employed on an “at will” basis;




     (xvi) grant or agree to grant to any current or former employee or officer of
the Company or any of its Subsidiaries any increase in wages or bonus, severance,
profit sharing, retirement, deferred compensation, insurance or other compensation
or benefits, establish any new compensation or benefit plans, agreements or
arrangements or amend, terminate or extend any existing employee benefit plan or
any Contract between the Company (or any of its Subsidiaries), or any
representative(s) of such employee(s), on the one hand, and any employee of the
Company, on the other hand, except (i) as required under applicable Law, or (ii) as



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may be required under the provisions of any Company Benefit Plan or Company
Employment Agreements existing on the date hereof;




     (xvii) except as set forth in Section 9.11, establish or agree to
establish any performance goals or targets in respect of any annual bonus
opportunities for fiscal year 2010 or thereafter for any Company Employee;




     (xviii) (A) dispose of or permit to lapse any rights to, any Material Company
Intellectual Property, provided that neither the expiration of a patent on
its scheduled expiration date nor the abandonment of an application for
registration of a Trademark in connection with a third party opposition proceeding
shall be deemed a breach of the foregoing, or (B) except in the Ordinary Course of
Business, grant to unaffiliated third parties any rights to any Material Company
Intellectual Property;




     (xix) adopt a plan of complete or partial liquidation or dissolution; or




     (xx) authorize any of, or commit or agree to take any of, the foregoing
actions.




     (c) Notwithstanding anything to the contrary contained herein, subject to applicable
Law, it is understood and agreed by the parties that, prior to the Closing, the Company
will use commercially reasonable efforts to implement the Business Line Modification Plan
to the extent related to periods prior to the Effective Time, as the same may be modified
from time to time by mutual written agreement of Parent and the Company pursuant to Section
9.7.



               Section 7.2 Distributions and Dividends.




     (a) The Company shall declare and make, prior to the Effective Time, a distribution to
the Company Stockholders of all of the Initial Investment Shares.




     (b) In the event that, based upon the Estimated Tangible Book Value of the Company, as
set forth on the statement delivered by the Company pursuant to Section 3.1(c), the
Company’s Tangible Book Value would be greater than four hundred seventy million dollars
($470,000,000) as of the Closing Date, the Company shall declare and pay, immediately prior
to the Effective Time, a cash dividend per outstanding share of Company Common Stock (all
or a portion of which may be used by the Company Stockholders to satisfy the Company’s
obligation to fund the deposit of the Escrowed Cash pursuant to Section 3.8), so
that, after giving effect to the payment of such cash dividend, the Company’s Estimated
Tangible Book Value is four hundred seventy million dollars ($470,000,000).



               Section 7.3 Capital Calls. Not less than sixteen (16) days prior to the anticipated
Closing Date, the Company shall issue a capital call notice to the



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Company Stockholders for, and
use commercially reasonable efforts to obtain, additional capital contributions from Company
Stockholders, pursuant to the terms of their existing capital commitments to the Company, to the
extent necessary to enable the Company to (i) deliver to the Escrow Agent the Escrowed Cash or (ii)
satisfy the Tangible Book Value condition set forth in Section 10.2(f) in the event that,
based upon the Estimated Tangible Book Value of the Company, as set forth on the statement
delivered by the Company pursuant to Section 3.1(c), the Company’s Tangible Book Value
would be less than four hundred seventy million dollars ($470,000,000) as of the Closing Date.



               Section 7.4 Tax and Accounting Matters. The Company shall not, without the prior
written consent of Parent, (i) change any material Tax or financial accounting principle, method or
practice (including any principles, methods or practices relating to the estimation of reserves or
other Liabilities), (ii) increase the Carrying Value of any asset for financial accounting
purposes, other than changes required by GAAP or applicable Law, (iii) make or revoke any material
Tax election, (iv) prepare any material Tax Returns in a manner inconsistent with past practice or
(v) consent to any extension or waiver of any statute of limitations with respect to any material
amount of Tax.



               Section 7.5 Related Party Transactions. Except as set forth in Schedule 7.5
of the Company Disclosure Schedule, the Company shall terminate the Related Party
Transactions set forth on Section 4.17(b) of the Company Disclosure Schedule
effective as of the Closing and obtain from each Person (other than the Company) party to such
Related Party Transaction a full and irrevocable release of any and all claims relating to such
Related Party Transaction; it being understood that failure to obtain any such release
notwithstanding such commercially reasonable efforts pursuant to this Section 7.5 shall not
constitute a breach of this Section 7.5.



               Section 7.6 Unaudited Financial Statements; Portfolio Performance Reports. Prior to
the Closing, the Company shall furnish Parent within fifteen (15) days following the end of each
calendar month after the date hereof (i) copies of the unaudited financial statements of the
Company for the month ended or ending as of the end of such prior month. In addition, the Company
shall provide any other financial statements, reports or related information describing the
financial and business activities and performance of the Company, as Parent may reasonably request
from time to time and (ii) a portfolio performance report for the Company and its Subsidiaries, if
any, produced in the Ordinary Course of Business.



               Section 7.7 Maintenance of Properties. Other than as set forth in the Business Line
Modification Plan, the Company shall, and shall cause each of its Subsidiaries to maintain or
cause to be maintained in good repair, working order and condition, ordinary wear and tear
excepted, all assets with fair market value in excess of two hundred thousand dollars ($200,000)
used in the business of the Company or its Subsidiaries and all Company Leased Real Property, and
from time to time will make or cause to be made all appropriate repairs, renewals and replacements
thereof. For the avoidance of doubt, this Section 7.7 does not apply to any collateral,
portfolio asset or



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Equipment, in the possession of any lessee under a Lease Agreement or any
borrower under a Loan Agreement.



               Section 7.8 No Shop. Until the earlier of the termination of this Agreement and the
Closing, the Company shall not and shall cause its Representatives not to, directly or indirectly,
(i) solicit any inquiries or proposals, or enter into any discussions, negotiations,
understandings, arrangements or Contracts, relating to the direct or indirect disposition, whether
by sale, merger or otherwise, of all or any material portion of the Company or any of its
Subsidiaries or their respective businesses or (ii) knowingly disclose, directly or indirectly, to
any Person any confidential information concerning the Company or any of its Subsidiaries or their
respective businesses, except in respect of this clause (ii) as necessary to conduct the respective
businesses in the Ordinary Course of Business and/or in accordance with the Business Line
Modification Plan. In the event that the Company or any of its Affiliates (other than portfolio
companies of any Company Stockholder or Person that directly or indirectly beneficially owns equity
of any Company Stockholder, except to the extent within the Knowledge of the Company) receives an
offer for such a transaction, the Company will provide Parent with notice thereof as soon as
practical after receipt thereof, which notice shall include the identity of the prospective buyer
or soliciting party.



               Section 7.9 DGCL Notices. Promptly following, and in any event, within ten (10) days
of, execution of this Agreement, the Company shall prepare and distribute to all Company
Stockholders who did not deliver an Irrevocable Written Consent (the “Non-Consenting
Stockholders”):




     (a) a notice in form and substance as required by Section 228 of the DGCL;




     (b) a notice in the form and substance as required by Section 262(d)(2) of the DGCL
which shall include (i) notification of the availability of appraisal rights, and (ii) a
copy of Section 262(d)(2) of the DGCL; and




     (c) a disclosure statement containing material information regarding the Merger and
the other transactions contemplated hereby.


The Company shall provide Parent with a copy of each of the foregoing notices for its review and
comment prior to such distribution.




ARTICLE VIII




PARENT COVENANTS



               Section 8.1 Conduct of Business.




     (a) Except as otherwise expressly permitted or required by this Agreement, during the
period commencing on the date hereof and ending on the earlier of the Effective Time, and
the date on which this Agreement is terminated



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pursuant to Section 11.1, Parent
shall, and shall cause each of its Subsidiaries to, carry on its business in the ordinary
course of business and, to the extent consistently therewith, maintain and preserve its and
such Subsidiary’s business (including its organization, assets, properties, goodwill and
insurance coverage) and preserve its business relationships with customers, strategic
partners, suppliers, distributors and others having business dealings with it;
provided that nothing in this sentence shall limit or require any actions that
Parent’s Board of Directors may, in good faith, determine to be inconsistent with their
duties or Parent’s obligations under applicable Law. Notwithstanding the foregoing, Parent
may engage in acquisitions or dispositions of assets, businesses or entities, or other
strategic transactions, provided that any such transaction (A) would not prevent or
materially delay or impair consummation of the transactions contemplated by this Agreement
and (B) would not require any Company Stockholder or the Designated Monitor to (i) file any
rebuttal or submit any filing as an applicant or notificant with any bank regulatory
authority, including under the Savings and Loan Holding Company Act, the Change in Bank
Control Act or Part 574 of 12 C.F.R. or (ii) register or become licensed under any state
insurance laws.




     (b) During the period referred to in Section 8.1(a), without the prior written
consent of the Company (which shall not be unreasonably withheld or delayed), Parent shall




     (i) not declare or pay any dividend or distribution on Parent Capital Stock,
other than with respect to the Parent Series A Preferred Stock or the Parent Series
B Preferred Stock, any dividends payable pursuant to the terms of such securities
as in effect on the date hereof;




     (ii) maintain consistent accounting principles unless otherwise required by
applicable Law or GAAP;




     (iii) not enter into any transaction with any Affiliate of Parent that is not
on terms and conditions that are no less favorable to Parent than those available
on arms length terms with an unaffiliated third party; and




     (iv) not take any action that would require any adjustment to be made under
Section 3.1(d), unless Parent makes appropriate adjustments with respect to
the Merger Consideration pursuant to Section 3.1(d).




     (v) not make or permit to be made any change in or amendment to the Parent
Certificate or the Parent By-laws except as set forth in Section 8.5.



               Section 8.2 Tax and Accounting Matters. Except as necessary to comply with GAAP or
applicable Law, Parent shall not, without the prior written consent of the Company, change any
material Tax or financial accounting principle, method or practice (including any principles,
methods or practices relating to the estimation of reserves or other Liabilities).



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               Section 8.3 Obligations of Merger Sub. Parent shall take all action necessary to
cause Merger Sub to perform its obligations under this Agreement in accordance with the terms
hereof.



               Section 8.4 Employee Matters.




     (a) During the period commencing as of the Effective Time and ending on December 31,
2010, so long as the Company Employees are employed by Parent or its Subsidiaries, Parent
and its Subsidiaries shall provide the Company Employees with (i) the same salary and
annual bonus opportunities (excluding any long-term incentive opportunities and equity
incentives) as were provided to such Company Employees immediately prior to the Effective
Time, and (ii) the employee welfare and pension benefits (made available under an employee
welfare benefit plan (within the meaning of Section 3(1) of ERISA) or employee pension
benefit plan (within the meaning of Section 3(2) of ERISA)) (x) that were provided to such
Company Employees under a Company Benefit Plan as of immediately prior to the Effective
Time or (y) as may be provided to similarly-situated employees of Parent and its
Subsidiaries under a Parent Benefit Plan following the Effective Time, to be determined by
Parent in its sole discretion. Parent will cause any employee benefit plans which the
Company Employees are eligible to participate in to take into account for purposes of
eligibility, vesting and benefit accrual thereunder (other than for purposes of benefit
accruals under any defined benefit pension plan), and except to the extent it would result
in a duplication of benefits, service by the Company Employees as if such service were with
Parent and its Subsidiaries. To the extent any Company Employees participate in the
medical plans of Parent and its Subsidiaries, Parent will use
commercially reasonable efforts to cause its third-party insurance providers or
third-party administrators to ensure that such employees will receive credit under such
medical plans for the calendar year in which the Closing occurs towards applicable
deductibles and annual out-of-pocket limits for expenses incurred for the calendar year in
which the Closing occurs under the corresponding medical plans sponsored by the Company or
its Subsidiaries.




     (b) No provision of this Section 8.4 (i) creates any third-party beneficiary
or other rights, including any rights of continued employment or rights to a particular
term of employment, for any employee of the Company or its Subsidiaries (including any
beneficiary or dependent thereof) other than Parent, the Company and their respective
successors and assigns, (ii) constitutes an employment agreement or an amendment to or
adoption of any employee benefit plan of or by any member of Parent, the Company or their
Subsidiaries, or (iii) shall alter or limit the ability of Parent, the Company or any of
their respective Subsidiaries and Affiliates to amend, modify or terminate any benefit
plan, program, agreement or arrangement at any time assumed, established, sponsored or
maintained by any of them in accordance with the terms of such plan, program, agreement or
arrangement and applicable Law



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     (c) From and after the Closing, Parent shall deposit in the Escrow Account any
severance amounts reflected as payables or for which a reserve or accrual was established
on the Company’s Closing Balance Sheet to the extent Parent, in good faith, determines such
amounts were over-accrued or over –reserved on the Company’s Closing Balance Sheet or are
otherwise no longer payable to former Company Employees, and such amounts shall thereafter
be Escrowed Assets for all purposes under the Escrow Agreement.



               Section 8.5 Parent Certificate and Parent By-laws. Parent shall use commercially
reasonable efforts to make effective prior to the Closing the amendment to Parent Certificate and
the amendment to Parent By-laws in the forms attached hereto as Exhibit C and Exhibit
D, respectively.



               Section 8.6 MarCap Property Taxes Claim. Unless otherwise agreed by Parent and the
Designated Monitor, from and after the Closing Date until the one (1) year anniversary of the
Closing Date, Parent shall cause the Surviving Corporation to use commercially reasonable efforts
to pursue, together with the Designated Monitor, the MarCap Property Tax Claims against the
indemnification escrow under the MarCap Escrow Agreement in consultation with the Designated
Monitor, and shall not take any action that would reasonably be expected to cause such
indemnification escrow to be unenforceable or otherwise unavailable, unless such action is taken in
consultation with the Designated Monitor. Notwithstanding the foregoing, Parent shall not waive or
terminate, or cause to be terminated, any right to indemnification under the MarCap Escrow
Agreement without the Designated Monitor’s prior written consent; provided,
however, that the foregoing shall not obligate Parent to commence or pursue any litigation
in connection with the MarCap Property Tax Claims and the foregoing shall not limit
Parent’s rights under Section 13.5(a). After the one (1) year anniversary of the
Closing Date, Parent may take such actions or omit to take such actions as Parent determines, in
its reasonable business judgment, are appropriate with respect to the MarCap Property Taxes and
Parent’s rights under Article XII and Article XIII shall not be diminished by any
such actions or failure to act. The Company Stockholders shall be subrogated to the Surviving
Corporation’s rights with respect to the indemnification escrow under the MarCap Agreement in
connection with the MarCap Property Taxes. In the event that any amounts are recovered by Parent
or any of its Subsidiaries from the indemnification escrow under the MarCap Agreement after Parent
or any of its Subsidiaries previously has received indemnity payments in respect thereof pursuant
to Article XII and Article XIII (a “Post-Indemnity MarCap Recovery”), then
Parent and the Surviving Corporation shall cause such an amount of such Post-Indemnity MarCap
Recovery, up to the amount previously received by Parent or any of its Subsidiaries in such
indemnity payments, to be delivered to the Escrow Agent, for deposit into the Subaccounts of the
respective Company Stockholders on a pro rata basis in accordance with the Escrow Agreement, and
thereafter such amount shall be deemed Escrowed Shares, Escrowed Cash or other Escrowed Assets, as
applicable, and held in escrow until released in accordance with the Escrow Agreement.



               Section 8.7 Distribution of USXL Escrowed Assets.



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     (a) In the event that, following the Effective Time, any amount of Parent Common Stock
or cash (or any other assets being held in escrow pursuant to the USXL Escrow Agreement) is
released to Parent or the Surviving Corporation in full or partial satisfaction of the USXL
Indemnity Claim (“USXL Escrow Assets”), Parent and the Surviving Corporation shall
cause such Parent Common Stock or other assets to be delivered to the Escrow Agent, for
deposit into the Subaccounts of the respective Company Stockholders on a pro rata basis in
accordance with the Escrow Agreement, and thereafter such USXL Escrow Assets or other
assets shall be deemed Escrowed Shares, Escrowed Cash or other Escrowed Assets, as
applicable, and held in escrow until released in accordance with the Escrow Agreement.




     (b) In the event that USXL Escrow Assets are so delivered to the Escrow Agent, Parent
and the Designated Monitor shall jointly instruct the Escrow Agent to release such USXL
Escrow Assets from the Escrow Account as promptly as reasonably practicable (but in any
event no later than 30 days after the USXL Escrow Assets are delivered to the Escrow
Agent), without being subject to the rights of the Former Warrant Holders, and in no event
shall such USXL Escrow Assets be available to offset Parent’s or its Subsidiaries’ Losses
under Article XII, Article XIII or Article XVI. From and after the
Effective Time, the Designated Monitor shall have the right, in consultation with Parent,
and at the expense of the Company Stockholders out of the DM Escrow Account, to take all
reasonable actions with regard to the USXL Indemnity Claim on behalf of Parent and the
Surviving Corporation, and Parent and the Surviving Corporation shall take such actions as
may be reasonably requested by the Designated Monitor (and at the expense of the Company
Stockholders out of the DM Escrow Account) in
furtherance thereof; provided, however, that the Designated Monitor
shall not be an agent of Parent or the Surviving Corporation and shall not enter into any
Contract or execute any other document in the name of or on behalf of Parent or the
Surviving Corporation.



ARTICLE IX




COMPANY AND PARENT COVENANTS



               Section 9.1 Efforts and Actions to Cause Closing to Occur.




     (a) Prior to the Closing, upon the terms and subject to the conditions of this
Agreement, Parent, Merger Sub and the Company shall use their respective commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and assist and cooperate with other parties and with each other in order to do all
things necessary, proper or advisable (subject to applicable Law) to consummate and make
effective the Closing and the transactions contemplated hereby, including the Merger, as
promptly as practicable, including, without limitation, the preparation and filing of all
documentation to effect all filings, notices, petitions, statements, registrations,
submissions of information,



86









 







applications and other documents (including the delivery of any
notices to be provided by the Company to the Company Stockholders pursuant to the DGCL)
necessary to consummate the Closing and the transactions contemplated hereby, including the
Merger, and the taking of such actions as are necessary to obtain any requisite Permits.
In furtherance and not in limitation of the foregoing, Parent and the Company shall as
promptly as practicable after the date hereof (to the extent not made prior to the date
hereof) and, with respect to clause (i) hereof, in any event within ten days after the date
hereof (i) make or cause to be made the filings required of such party in order to obtain
all Permits required in connection with the Merger and other transactions contemplated
hereby, including written notices to the OTS and the FDIC (or any other applicable banking
regulator) and under the HSR Act (and any other applicable Antitrust Laws), and (ii) comply
with any request of any such Governmental Entity (including the OTS, FDIC and any other
applicable banking regulator) and under the HSR Act for additional information, documents
or other materials received by such party from any Governmental Entity in respect of such
filings or such transactions. Notwithstanding anything in this Agreement to the contrary,
none of the Company, any Company Stockholder or the Designated Monitor shall be obligated
to file any rebuttal or submit any filing as an applicant or notificant with any bank
regulatory authority including under the Savings and Loan Holding Company Act, the Change
in Bank Control Act or Part 574 of 12 C.F.R.




     (b) Parent shall take the lead in and control all discussions, negotiations and other
communications with all Governmental Entities in connection with any such Permits described
in paragraph (a) above. To the extent not expressly prohibited by applicable Law, each of
the Company and Parent shall cooperate,
and cause its respective Representatives to cooperate, with each other and any
Governmental Entity in taking all actions, and furnishing all information, reasonably
necessary to obtain the approval of such Governmental Entity, and shall comply promptly
with all legal requirements that may be imposed on it with respect to the Closing. In
connection with the actions and procedures referenced in this Section 9.1, each of
the Company and Parent shall, and shall cause its respective Representatives to, (i)
promptly and fully inform the other of any written or material oral communication received
from or given to any Governmental Entity, (ii) permit the other to review any filings or
other documentation to be submitted by the Company or Parent, as the case may be, to any
Governmental Entity, (iii) consult with the other in advance of any meeting, material
conference or material discussion with any Governmental Entity, and (iv) if permitted to do
so by the relevant Governmental Entity, give the other the opportunity to attend and
participate in such meetings, conferences and discussions. To the extent that transfers,
amendments or modifications of Permits are required as a result of the execution of this
Agreement or consummation of the transactions contemplated hereby, including the Merger,
the Company and Parent shall use their commercially reasonable efforts to effect such
transfers, amendments or modifications.



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     (c) The Company shall use its commercially reasonable efforts to obtain, prior to the
Closing, the unconditional consent, in form and substance reasonably satisfactory to
Parent, to the Closing and the transactions contemplated hereby, including the Merger, of
(i) each Person holding a material mortgage or lien on material personal property owned or
leased by the Company, (ii) each lessor of material real or material personal property
leased by the Company, (iii) the issuer of each material insurance policy referred to in
the Company Disclosure Schedule and (iv) each party to each Company Material Contract, in
each case to the extent required under or in connection with such mortgage, lien, lease,
policy or Company Material Contract; provided that the Company shall not be
obligated to make any material payment or concession in connection with the foregoing
unless such action is conditioned on the consummation of the transactions contemplated
hereby, including the Merger; provided further that the Company has no
obligation to obtain any waiver or consent under the TVF Loan Agreement, the TAF Credit
Agreement or the Funding I Indenture. All such consents shall be in writing and executed
counterparts thereof shall be delivered to Parent at or prior to the Closing. The Company
shall bear all costs associated with obtaining any of the consents described in this
Section 9.1(c). Notwithstanding the foregoing, the failure to obtain any such
consents notwithstanding such commercially reasonable efforts pursuant to this Section
9.1(c) shall not result in a failure of the condition set forth in Section
10.2(b) or result in any claim under Section 12.2(b).




     (d) In the event the Company is unable to obtain from PayNet, Inc. any consents that
would be necessary in connection with the consummation of the Merger under the May 1, 2004
agreement between PayNet, Inc. and the Company (assumed from US Express Leasing, Inc. on
November 18, 2008) (as it may be
amended or modified from time to time, the “PayNet Agreement”), the Company
shall take all such actions necessary to ensure that the Surviving Corporation shall have,
from and after the Effective Time, functionality and services, of the type that were
provided under the PayNet Agreement that are adequate in the Company’s reasonable business
judgment for the conduct of the businesses of the Company and its Subsidiaries (taking into
account the implementation of the Business Line Modification Plan), either through an
alternative third party provider or through the Company itself. All costs associated
with the foregoing (including any one-time development costs or third party license fees
but not including any service fees or royalty fees that are consistent with the fees
payable under the PayNet Agreement to the extent relating to periods from and after the
Effective Time) shall be borne by the Company.




     (e) Notwithstanding anything to the contrary in this Agreement, Parent shall not be
required to take or agree to take any other action or agree to any limitation or
restriction that Parent reasonably determines would impose materially burdensome
restrictions on the operation of the business of Parent and its Subsidiaries on a
consolidated basis.



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               Section 9.2 Notification of Certain Matters. Each of the Company and Parent shall
give written notice to the other promptly (and in any event no more than two (2) Business Days)
after becoming aware of:




     (a) any notice or other communication from any Person alleging that the consent of
such Person is or may be required in connection with the transactions contemplated hereby;




     (b) any notice or other communication from any Governmental Entity in connection with
the transactions contemplated hereby;




     (c) any Actions, suits, claims, investigations or proceedings commenced or, to its
Knowledge, threatened against, relating to or involving or otherwise affecting such party
and any of its Subsidiaries, that relate to the consummation of the transactions
contemplated hereby;




     (d) any inaccuracy of any representation or warranty of that party contained in this
Agreement at any time during the term hereof that could reasonably be expected to cause the
condition set forth in this Article IX, as applicable, not to be satisfied; and




     (e) any material failure of that party to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;


provided,
that the delivery of any notice pursuant to this Section 9.2 shall not
limit or otherwise affect the remedies available hereunder to the party receiving that notice;
provided, further, that failure to deliver any notice pursuant to this Section 9.2 shall
not
result in a failure of any condition set forth in Article X, or result in any claim
under Section 12.2(b) and Section 12.3(b).


               Section 9.3 Updates to Disclosure Schedule. Five (5) Business Days prior to each of
the Termination Date (prior to any Termination Date Extension Period) and the Closing Date, each of
the Company and Parent shall promptly deliver to Parent or the Company, as applicable, an update to
the Company Disclosure Schedule or Parent Disclosure Schedule, as applicable; provided,
however, that any Losses attributable to any event, condition, fact or circumstance under
the representation and warranty to which such section of the Company Disclosure Schedule or Parent
Disclosure Schedule relates shall not result in any claim under this Section 9.3 for
purposes of Section 12.2(b) and Section 12.3(b). No such update shall be deemed to
supplement or amend the Company Disclosure Schedule or Parent Disclosure Schedule, as applicable,
for the purpose of determining (i) the accuracy of any representation or warranty made by the any
of the parties as of the date hereof, (ii) whether any of the conditions set forth in Section
10.2(a) or Section 10.3(a) has been satisfied, or (iii) whether any of the parties have
breached its representations and warranties under this Agreement.

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               Section 9.4 Access; Confidentiality.




     (a) Prior to Closing, each party hereto shall: (i) give the other party hereto and
its respective Representatives reasonable access to its and its Subsidiaries’ offices,
properties, books and records, (ii) furnish to the other party hereto, and its
Representatives such financial and operating data and other information as such Persons may
reasonably request, (iii) instruct its Representatives and its Subsidiaries’
Representatives to cooperate with the other party hereto in connection therewith, and (iv)
cooperate in good faith with the other party hereto, its Representatives (including in
connection with Parent’s transition planning activities); provided, that (A) the
provision of access pursuant to this Section 9.4 shall be during normal business
hours, following a reasonable advance request for such access and shall not interfere
unreasonably with the conduct of the business of any Person; (B) the party requesting such
access shall reimburse the other party promptly for any reasonable out-of-pocket expenses
it incurs in complying with any such request; and (C) the provision of access pursuant to
this Section 9.4 shall, in the case of any Person other than a party or its
employees, be conditioned on (x) any such Person entering into an agreement in favor of the
other party hereto on terms no less favorable to such party than the Confidentiality
Agreement, dated June 2, 2009, by and between Parent and Company (the “Confidentiality
Agreement”) or (y) as an alternative in the case of a Representative of a party, such
Representative having agreed to comply with the terms of the Confidentiality Agreement
protecting the other party’s information. No information or knowledge obtained in any
investigation pursuant to this Section 9.4 shall be deemed to modify or affect any
representation or warranty made by any party hereunder.




     (b) All information provided pursuant to this Agreement shall remain subject in all
respects to the Confidentiality Agreement.



               Section 9.5 Indemnification; Directors’ and Officers’ Liability Insurance.




     (a) From and after the Effective Time, each of Parent and the Surviving Corporation
agrees that it will indemnify and hold harmless each director and officer of the Company or
any of its Subsidiaries (in each case, when acting in such capacity) holding such office
immediately prior to the Effective Time (the “Covered Persons”), against any Losses
(subject to Section 9.5(d) and the provisos of Section 9.5(c)) incurred in
connection with any Action, arising out of matters existing or occurring at or prior to the
Effective Time, whether asserted or claimed prior to, at or after the Effective Time, to
the fullest extent that the Company would have been permitted under applicable Law and the
Company Certificate or the Company by laws in effect on the date hereof to indemnify such
Person (and Parent or the Surviving Corporation also shall advance expenses as incurred to
the fullest extent permitted by applicable Law, provided the Covered Person to whom
expenses are advanced provides an undertaking to repay such advances if it is



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ultimately
determined that such Covered Person is not entitled to indemnification); and
provided, further, that any determination required to be made with respect
to whether an officer’s or director’s conduct complies with the standards set forth under
applicable Law and the Company’s certificate of incorporation and bylaws in effect on the
date hereof shall be made by independent counsel selected by the Surviving Corporation or
Parent, as the case may be.




     (b) The Company and Parent agree that all rights to indemnification, advancement of
expenses and exculpation now existing in favor of each individual who, as of the Effective
Time, is a present or former director or officer of the Company (the “D&O Covered
Persons”) as provided in the Company Certificate and the Company By-laws, in effect as
of the date hereof, shall, with respect to matters occurring prior to the Effective Time,
survive the Merger and continue in full force and effect after the Effective Time. Until
the sixth anniversary of the Effective Time or, if any Actions are then pending against any
D&O Covered Person, such later date as such Action is no longer pending and is finally
resolved, the Certificate of Incorporation and By-laws of the Surviving Corporation shall,
with respect to matters occurring prior to the Effective Time, contain provisions no less
favorable with respect to indemnification, advancement of expenses and exculpation of the
D&O Covered Persons than are set forth in the Company Certificate and the Company By-laws,
in effect as of the date hereof, and such provisions shall not be amended, repealed or
otherwise modified prior to the sixth anniversary of the Effective Time in any manner that
would adversely affect the rights thereunder, as of the Effective Time, of any D&O Covered
Persons, with respect to matters occurring prior to the Effective Time.




     (c) Prior to the Closing, the Company shall obtain a “tail policy” to the Company’s
existing directors’ and officers’ liability insurance policy (to be effective as of the
Effective Time), which “tail policy” shall provide coverage for a period of six (6) years
from the Effective Time to those individuals who are currently covered by the Company’s
directors’ and officers’ liability insurance policy (a correct and complete copy of each of
which has been delivered to Parent) with coverage in amount and scope substantially similar
to those of the applicable policies in effect on the date hereof; provided that any
Covered Persons shall use commercially reasonable efforts to take necessary steps to pursue
any and all claims under said “tail policy” before such Covered Persons take any Action
against Parent or the Surviving Corporation; provided, further, that the
foregoing shall not obligate the Covered Persons, prior to receiving any advancement as
contemplated in Section 9.5(a) and (b), commence or pursue any litigation
in connection with any claim under said “tail policy,” but thereafter shall cooperate with
Parent and the Surviving Corporation in pursuing any such litigation in connection with the
“tail policy”. In no event shall the Company be required to expend for such “tail policy”
an amount in excess of $1,500,000. The Covered Persons shall not take any steps to
compromise or release any claims under said “tail policy” without the prior express written
consent of Parent or the Surviving Corporation.



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     (d) In order to clarify the respective obligations of Parent and the Surviving
Corporation, on the one hand, and the insurer under the tail policy contemplated in Section
9.5(c), on the other hand, in respect of any Losses covered by such tail policy, the
parties agree that the insurer in respect of such tail policy shall be the indemnitor of
first resort, and shall make indemnity payments in respect of such policy on a primary
basis, and Parent and the Surviving Corporation shall be indemnitors of second resort, and
the insurer in respect of such tail policy shall therefore not be entitled to contribution
from Parent or the Surviving Corporation in respect of any Losses covered by such tail
policy. The foregoing shall not limit the right of any Covered Person to seek
indemnification from Parent and the Surviving Corporation so long as it has satisfied its
obligations set forth in the provisos to Section 9.5(c).



               Section 9.6 Certain Existing Indebtedness. The parties acknowledge and agree that it
would be in their mutual best interests to refinance the Titan Debt Facilities on commercially
reasonable terms; and, accordingly, the parties shall cooperate in good faith to pursue cost
effective alternatives for such a refinancing. In furtherance thereof, Parent shall: (a) at or
immediately following the Closing, prepay all of the obligations arising under the TVF Loan
Agreement and related transaction documents and terminate the commitments thereunder in accordance
with its terms; (b) at or immediately following the Closing, prepay all of the obligations arising
under the Funding I Indenture and discharge the Funding I Indenture in accordance with its terms;
(c) at or immediately following the Closing, prepay all of the obligations arising under the TAF
Credit Agreement and discharge the TAF Credit Agreement in accordance with its terms; and (d) prior
to the Closing, use its commercially reasonable efforts to refinance, at or
after the Closing, the Funding II Indenture (subject to receipt of any consents or waivers, in
form and substance reasonably acceptable to Parent, required in connection therewith).



               Section 9.7 Business Line Modification Plan.




     (a) Between the date hereof and the Closing Date, Parent and the Company shall
cooperate and work in good faith to modify and expand the Business Line Modification Plan
to further develop the plan. Such plan, insofar as it relates to post-Closing periods,
shall be designed to facilitate the Surviving Corporation’s ability to use its commercially
reasonable efforts to maximize the economic value of the Protected Portfolio. All changes
to the Business Line Modification Plan shall be agreed in writing. At the Closing, the
parties shall mutually execute and deliver the Business Line Modification Plan as so
modified and expanded through the Closing Date.




     (b) After the Effective Time, Parent shall (i) cause the Surviving Corporation to use
its commercially reasonable efforts to implement the Business Line Modification Plan
delivered at Closing in accordance with its terms, (ii) submit, and cause its Subsidiaries
to submit, any proposed amendment to the Business Line Modification Plan to Parent’s board
of directors for approval and (iii) cause its management to provide periodic updates on the
implementation of



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the Business Line Modification Plan to Parent’s board of directors.
Parent and its Subsidiaries (including the Surviving Corporation) shall use their
commercially reasonable efforts to maximize the economic value of the Protected Portfolio.



               Section 9.8 Public Announcements. Neither Parent, Merger Sub, the Company nor the
Designated Monitor, nor any of their respective Representatives or Affiliates (other than portfolio
companies of any Company Stockholder or Person that directly or indirectly beneficially owns equity
of any Company Stockholder, except to the extent within the Knowledge of the Company), without the
approval of Parent, in the case of the Company and the Designated Monitor and the Company, in the
case of Parent or Merger Sub, shall issue any press releases or otherwise make any public
statements with respect to the transactions contemplated by this Agreement, including the Merger,
except as may be required by applicable Law, including federal securities Laws, in which case the
party required to make the release or announcement shall allow the other parties an opportunity (to
the extent practical) to comment on such release or announcement in advance of such issuance and to
consider such comments in good faith.



               Section 9.9 Further Assurances. At and after the Effective Time, the officers and
directors of the Surviving Corporation shall be authorized to execute and deliver, in the name and
on behalf of the Company or Merger Sub, any deeds, bills of sale, assignments or assurances and to
take and do, in the name and on behalf of the Company or Merger Sub, any other actions and things
to vest, perfect or otherwise in the Surviving Corporation any and all right, title and interest
in, to and under any of the rights, properties or assets of the Company acquired or to be acquired
by the Surviving Corporation as a result of, or in connection with, the Merger.



               Section 9.10 Tax Status of the Merger. The parties hereto intend that the Merger shall
qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and the Treasury
Regulations promulgated thereunder, and this Agreement is hereby adopted as a plan of
reorganization for purposes of Section 368(a) of the Code and the Treasury Regulations promulgated
thereunder. In furtherance of the foregoing, neither party shall take any action inconsistent with
the transactions contemplated by this Agreement qualifying as a reorganization within the meaning
of the Code. To the extent the Company reasonably determines that there is a meaningful risk that
the transactions (as structured as of the date hereof) will not qualify as a reorganization within
the meaning of the Code, the parties shall use commercially reasonable efforts to structure the
transactions contemplated by this Agreement to qualify as a reorganization within the meaning of
the Code. For the avoidance of doubt, commercially reasonable efforts shall include, without
limitation, restructuring if Parent is unable to acquire control of the Company within the meaning
of 368(c) of the Code.



               Section 9.11 2010 Bonus Opportunities. Between the date hereof and the Closing Date, the
Company will establish, in good faith consultation with Parent, performance goals or targets in
respect of annual bonus opportunities for Company Employees for fiscal year 2010; provided
that such goals or targets shall be qualitatively and quantitatively consistent with the Company’s
past practices.



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ARTICLE X




CONDITIONS



               Section 10.1 Conditions to Each Party’s Obligations. The respective obligation of
each party to effect the Merger and consummate the other transactions contemplated hereby is
subject to the satisfaction or (to the extent permitted by Law) waiver by Parent and the Company on
or prior to the Closing Date of the following conditions:




     (a) Antitrust. The waiting period (and any extension thereof) applicable to
the Merger under the HSR Act shall have been terminated or shall have expired.




     (b) Governmental Consents and Approvals. All filings with, notices to, and
all consents, approvals and authorizations of, any Governmental Entity, including the OTS
and the FDIC, required to be made or obtained by the Company, Parent or any of their
Subsidiaries to consummate the Merger as set forth on Section 10.1(b) of the
Company Disclosure Schedule and the Parent Disclosure Schedule, respectively, shall
have been made or obtained.




     (c) No Injunctions or Restraints. No temporary restraining order, preliminary
or permanent injunction or other judgment or order issued by any court or agency of
competent jurisdiction or other Law, rule, legal restraint or prohibition (collectively,
“Restraints”) shall be in effect preventing the consummation of the Merger.




     (d) Third Party Consents. All of the third party consents set forth on
Section 10.1(d) of the Company Disclosure Schedule shall have been obtained
in a form reasonably satisfactory to the parties.



               Section 10.2 Conditions to Obligations of Parent and Merger Sub. The obligations of
Parent and Merger Sub to effect the Merger and consummate the other transactions contemplated
hereby are further subject to the satisfaction or (to the extent permitted by Law) waiver by Parent
on or prior to the Closing Date of the following conditions:




     (a) Representations and Warranties. All representations and warranties of the
Company contained in this Agreement (without taking into account any limitation for
“Company Material Adverse Effect”, materiality or similar term or limitation therein) shall
be true and correct as of the date of this Agreement and as of the Closing Date, as though
made on and as of such date (or, in the case of those representations and warranties that
are made as of an earlier date, which shall be true and correct as of such earlier date),
except where the failure of such representations and warranties of the Company to be so
true and correct, individually or in the aggregate, (i) has not had or would not have a
Company Material Adverse Effect or (ii) is consistent with specific items set forth in the



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Business Line Modification Plan; provided, however, representations and
warranties of the Company contained in Section 4.3 (Capital Structure), Section
4.4(a) (Corporate Authority) and Section 4.27 (Takeover Laws) of this Agreement
must be true and correct in all material respects. Parent shall have received a
certificate signed on behalf of the Company by an executive officer of the Company to such
effect dated as of the Closing Date.




     (b) Performance of Obligations of the Company. The Company shall have
performed and complied with, in all material respects, all covenants, agreements and
obligations required to be performed or complied with by it under this Agreement at or
prior to the Closing Date, and Parent shall have received a certificate signed on behalf of
the Company by an executive officer of the Company to such effect as of the Closing Date.




     (c) No Company Material Adverse Effect. Except for specific items set forth
in the Business Line Modification Plan, since the date of this Agreement, no Company
Material Adverse Effect shall have occurred.




     (d) No Litigation. There shall not be pending any Action by (i) any
Governmental Entity, (ii) any Person seeking to restrain or prohibit the consummation of
the Merger or any other transaction contemplated hereby or seeking to obtain a material
amount of damages from the Company, Parent, Merger Sub or any other Affiliate of
Parent either (x) in an Action commenced by any Company Voting Stockholder or (y) in
connection with the Merger or any other transaction contemplated hereby, (iii) any Person
seeking to prohibit Parent or any of its Affiliates from effectively controlling the
business or operations of the Company or any of its Subsidiaries, or (iv) any Person
against the Company,
which, if adversely determined, would have a Company Material Adverse Effect, other
than, in the case of clauses (ii)(y) and (iv), any such Action brought by
any management employee of the Company or any of its Subsidiaries or any such Action that
Parent, acting reasonably and in good faith, determines is frivolous.




     (e) Company Warrants. There shall be no Company Warrants outstanding as of
the Effective Time.




     (f) Company Tangible Book Value. The Company’s Estimated Tangible Book Value
as of the Closing Date shall be equal to four hundred seventy million dollars
($470,000,000). Parent shall have received a certificate signed on behalf of the Company
by an executive officer of the Company to such effect dated as of the Closing Date, which
shall include a reasonably detailed calculation of the Company’s Estimated Tangible Book
Value as of such date (it being understood that, for purposes of this Section
10.2(f), the adjustments in clauses (x) and (y) in the definition of Estimated Tangible
Book Value shall only be made to the extent any such dividends have actually been paid or
any such capital call has actually been funded).



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     (g) Stockholders Agreement. Concurrently with the execution and delivery of
this Agreement, each of the Company Voting Stockholders shall have executed and delivered a
counterpart copy of the Stockholders Agreement.




     (h) Absence of Material Restrictions. No condition shall have been imposed in
connection with the receipt of any regulatory approvals and consents, including, without
limitation, the OTS or the FDIC, that, in the reasonable judgment of Parent, imposes a
materially burdensome restriction on the operation of the business of Parent and its
Subsidiaries on a consolidated basis.




     (i) FIRPTA. Parent shall have received from the Company a certificate that
the Company is not a U.S. real property holding company within the meaning of Section 897
of the Code and Treasury Regulations thereunder; provided, however, that if
this condition is not satisfied on or prior to the Closing Date, at the option of Parent,
Parent shall proceed with the Merger and withhold a portion of the Merger Consideration in
respect of any Taxes as required by applicable Law.




     (j) Escrow Arrangements. The Escrow Agreement shall have been duly executed
and delivered by the Designated Monitor and the Escrow Agent. The Escrow Account shall
have been funded pursuant to Section 3.8 of this Agreement.




     (k) Appraisal Rights. Not more than 5% of the outstanding shares of the
Company Common Stock shall constitute Dissenting Shares.




     (l) Additional Closing Deliverables. Parent shall have received (i) the DM
Release, (ii) a true, correct and complete copy of the resolutions of the board
of directors of the Company and each of its Subsidiaries authorizing the execution,
delivery and performance of this Agreement, the Merger and all other transactions
contemplated thereby, and (iii) a long-form good standing certificate for the Company and
each of its Subsidiaries, dated as of the date hereof or another date prior to the Closing
Date, from the Secretary of State of the State of Delaware.



               Section 10.3 Conditions to Obligations of the Company. The obligation of the Company
to effect the Merger and consummate the other transactions contemplated hereby are further subject
to the satisfaction or (to the extent permitted by Law) waiver by the Company on or prior to the
Closing Date of the following conditions:




     (a) Representations and Warranties. All representations and warranties of
Parent and the Merger Sub contained in this Agreement (without taking into account any
limitation for “Parent Material Adverse Effect”, materiality or similar term or limitation
therein) shall be true and correct as of the date of this Agreement and as of the Closing
Date, as though made on and as of such date (or, in the case of those representations and
warranties that are made as of an earlier date, which shall be true and correct as of such
earlier date), except where the failure of such representations and warranties of Parent
and Merger Sub to be so true and correct,



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individually or in the aggregate, has not had or
would not have a Parent Material Adverse Effect; provided, however,
representations and warranties of Parent and Merger Sub contained in Section 6.3
(Capital Structure), Section 6.4(a) (Corporate Authority), and Section 6.18
(Takeover Laws) of this Agreement must be true and correct in all material respects. The
Company shall have received a certificate signed on behalf of Parent and Merger Sub by an
executive officer of Parent to such effect dated as of the Closing Date.




     (b) Performance of Obligations of Parent and Merger Sub. Parent shall have
performed and complied with, in all material respects, all covenants, agreements and
obligations required to be performed or complied with by it under this Agreement and the
Letter Agreement between Parent and the Company, dated as of the date hereof, at or prior
to the Closing Date, and the Company shall have received a certificate signed on behalf of
Parent by an executive officer of Parent to such effect as of the Closing Date.




     (c) No Parent Material Adverse Effect. Since the date of this Agreement, no
Parent Material Adverse Effect shall have occurred.




     (d) Parent Certificate Amendment. The amendment to the Parent Certificate in
the form of Exhibit D shall be effective.




     (e) Parent By-law Amendment. The amendment to the Parent By-laws in the form
of Exhibit E shall be effective.




     (f) Escrow Agreement. The Escrow Agreement shall have been duly executed and
delivered by Parent and the Escrow Agent.




     (g) Stockholders Agreement. The Stockholders Agreement shall be in full force
and effect.




     (h) Additional Closing Deliverables. The Company shall have received (i) a
true, correct and complete copy of the resolutions of the board of directors of Parent and
Merger Sub authorizing the execution, delivery and performance of this Agreement, the
Merger and all other transactions contemplated thereby and (ii) a certificate of active
status for Parent, dated as of the date hereof or another date prior to the Closing Date,
from the Secretary of State of the State of Florida.



ARTICLE XI




TERMINATION



               Section 11.1 Termination of this Agreement. At any time prior to the Effective Time,
this Agreement may be terminated as follows:




     (a) by mutual written consent of Parent and the Company;



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     (b) by the written notice of either the Company or Parent if the Closing shall not
have occurred by April 20, 2010 (the “Termination Date”); provided,
however, that if the Closing has not occurred by the Termination Date by reason of
nonsatisfaction of the condition set forth in Section 10.1(b) and all other
conditions set forth in Article X have been satisfied or waived or are then capable
of being satisfied at the Closing, then either Parent or the Company may elect to extend
the Termination Date for up to an additional two-month period (the “Termination Date
Extension Period”) by providing written notice to the other party (and the extended
termination date shall be the “Termination Date”); provided,
further, however, the right to terminate this Agreement under this
Section 11.1(b) shall not be available to any party whose failure to perform or
comply with any covenant or agreement of such party under this Agreement shall have been
the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to
such date;




     (c) by the written notice of either the Company or Parent if any Restraint having the
effect set forth in Section 10.1(c) shall be in effect and shall have become final
and nonappealable;




     (d) by the written notice of the Company to Parent (provided that the Company
is not then in material breach of any representation, warranty, covenant or agreement
contained herein) if Parent or Merger Sub shall have breached or failed to perform or
comply with in any material respect their representations, warranties, covenants or
agreements contained herein, which breach or failure to perform or comply with (i) would
(if it occurred or was continuing as of the Closing Date) result in a failure of the
condition set forth in Section 10.3(a) to be satisfied and (ii) is not cured within
thirty (30) days following written notice to
Parent of such breach or failure or, by its nature, cannot be cured prior to the
Termination Date;




     (e) by the written notice of Parent to the Company (provided that Parent and
Merger Sub are not then in material breach of any representation, warranty, covenant or
agreement contained herein) if the Company shall have breached or failed to perform or
comply with in any material respect its representations, warranties, covenants or
agreements contained herein, which breach or failure to perform or comply with (i) would
(if it occurred or was continuing as of the Closing Date) result in a failure of the
condition set forth in Section 10.2(a) to be satisfied, and (ii) is not cured
within thirty (30) days following written notice to Parent of such breach or failure or, by
its nature, cannot be cured prior to the Termination Date; or




     (f) by the written notice of Parent to the Company if Parent or any of its Affiliates
or Representatives receives written notice from or is otherwise notified by, the OTS or the
FDIC that such Governmental Entity will not grant any of the consents, approvals or
authorizations specified in Section 10.1(b) or that Parent should withdraw its
application seeking any such consent, approval or



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authorization and, in the case of
non-written notice, Parent has concluded, after a good faith discussion with its counsel
regarding such notice, that the requisite consents, approvals or authorizations will not be
granted.



               Section 11.2 Effect of Termination. In the event of termination of this Agreement as
provided in Section 11.1, this Agreement shall become void and there shall be no Liability
on the part of any party hereto except Section 9.4(b), this Section 11.2 and
Sections 17.1, 17.2, 17.4, 17.5, 17.6, 17.7,
17.8, 17.9, 17.10, 17.12 and Section 17.13 shall survive
such termination. Nothing contained in this Section 11.2 shall relieve any party from
Liability for fraud or breach of this Agreement occurring on or prior to such termination.



ARTICLE XII




SURVIVAL; INDEMNIFICATION



               Section 12.1 Survival of Representations. The representations and warranties of the
parties, including the representations set forth in the officers certificates delivered at Closing
pursuant to Section 10.2(a) and Section 10.3(a) (“Closing Certificates”)
shall survive the Effective Time until the next Business Day after the date that is twenty four
(24) months from the Closing Date (the “Survival Period”); provided,
however, that (a) the representations and warranties of (i) the Company contained in
Section 4.1 (Organization, Standing and Corporate Power), Section 4.2
(Subsidiaries), Section 4.3 (Capital Structure), Section 4.4(a) and (b)
(Authority; Noncontravention) and Section 4.26 (Brokers and Other Advisors) (“Company
Fundamental Representations”), (ii) the representations and warranties of the Designated
Monitor contained in Section 5.1 (Authority; Noncontravention) (“Designated Monitor
Fundamental Representations”), and (iii) the representations and warranties of Parent
and Merger Sub contained in Section 6.1 (Organization, Standing and Corporate Power),
Section 6.2 (Subsidiaries), Section 6.3 (Capital Structure) and Section
6.4(a) and (b) (Authority; Noncontravention) (“Parent Fundamental
Representations”) shall survive the Closing indefinitely and (b) the representations and
warranties of the Company in Section 4.13 (Taxes) shall survive the Closing until the date
that is sixty (60) days following the applicable statute of limitations related thereto. If any
party makes a claim with respect to any specific representation or warranty within the time period
described in the preceding sentences, and such claim is not fully and finally resolved prior to the
expiration of such time period, such representation and warranty shall survive until such claim is
finally and fully resolved. Nothing contained herein shall limit any covenant or agreement of any
party.



               Section 12.2 Indemnification by Company Stockholders. Except with respect to Taxes,
which shall be governed by Article XIII, from and after the Closing, the Company
Stockholders shall indemnify and hold harmless Parent and its Subsidiaries (including the Surviving
Corporation) (collectively, the “Parent Indemnified Parties”) from, against and in respect
of, and will cause the Escrow Agent to pay from the Escrow Account in accordance with Article
XVI and the Escrow Agreement to the Parent



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Indemnified Parties the amount of any Liability,
charges, assessments, claims, demands, Actions, settlements, interest, penalties and expenses
(including reasonable costs of investigation and reasonable attorneys’ fees and expenses)
(collectively, “Losses”), incurred or suffered by the Parent Indemnified Parties, whether
in respect of Third Party Claims (as defined below), or claims between the parties hereto, arising
out of or relating to any of the following:




     (a) the breach or failure to be true and correct of any representation or warranty of
the Company or the Designated Monitor set forth in this Agreement or the Closing
Certificates, as of the date hereof and as of the Closing Date (except to the extent
expressly made as of an earlier date, in which case the failure of such representations and
warranties to be so true and correct shall be measured as of such earlier date);
provided, however, that in the case of any such representation or warranty
that is limited by materiality, Company Material Adverse Effect or any similar term or
limitation, except for the Company Fundamental Representations, and the Designated Monitor
Fundamental Representations, the occurrence of a breach of such representation or warranty
and the amount of Losses shall be determined as if such materiality, Company Material
Adverse Effect or any similar term or limitation were not included therein;




     (b) the breach or violation of any covenant or agreement of the Company or the
Designated Monitor contained in this Agreement;




     (c) errors, misstatements or inaccuracies contained in, or omissions from, the Merger
Consideration Allocation Schedule or any claim by a Company
Stockholder challenging the allocations set forth on the Merger Consideration
Allocation Schedule;




     (d) any claim by a current or former Company Stockholder or current or former holder
of any other security of the Company, in its capacity as such, challenging this Agreement,
the Merger or the other transactions contemplated hereby;




     (e) any amount paid to any Company Stockholder with respect to Dissenting Shares in
excess of the Share Value of such Dissenting Shares, and all Losses incurred by Parent or
its Subsidiaries in connection with the exercise or attempted exercise by any Company
Stockholder of any dissenter’s rights, including, without limitation, all reasonable
counsel fees and reasonable litigation costs incurred in connection therewith; and




     (f) any claim by a Company Stockholder who has not executed and delivered a
Stockholder Waiver and Release Agreement to the extent such claim would have been released
thereby or prohibited thereunder.


it being understood that, for purposes of this Article XII, the
Company Stockholders shall not be liable for any Loss to the extent (i) the full dollar amount of
such Loss has been taken into account in calculating the Company’s Closing Tangible Book Value or
(ii)


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Parent has been indemnified for such Loss pursuant to Article XIV, except to the
extent limited by the terms of Article XIV, including the application of the “waterfall”
provisions set forth in Paragraph 2 of Section 4 of Schedule III.




               Section 12.3 Indemnification by Parent. From and after the Closing, Parent shall
indemnify and hold harmless, without duplication, the Company Stockholders (collectively, the
“Company Indemnified Parties”) from, against and in respect of, and will pay to the Company
Indemnified Parties through the Designated Monitor the amount of, any Losses incurred or suffered
by the Company Indemnified Party, whether in respect of Third Party Claims, or claims between the
parties hereto arising out of or relating to any of the following:




     (a) the breach or failure to be true and correct of any representation or warranty of
Parent or Merger Sub set forth in this Agreement, as of the date hereof and as of the
Closing Date (except to the extent expressly made as of an earlier date, in which case the
failure of such representations and warranties to be so true and correct shall be measured
as of such earlier date); provided, however, that in the case of any such
representation or warranty that is limited by materiality, Parent Material Adverse Effect
or any similar term or limitation, except for the Parent Fundamental Representations, the
occurrence of a breach of such representation or warranty and the amount of Losses shall be
determined as if such materiality, Parent Material Adverse Effect or any similar term or
limitation were not included therein; and




     (b) the breach of any covenant or agreement of Parent or Merger Sub contained in this
Agreement;


it being understood that the Company Stockholders can only execute any
claim pursuant to this Section 12.3 against Parent through the Designated Monitor but
Losses subject to a claim by the Designated Monitor shall be determined on the basis of Losses
suffered by the Company Stockholders.




               Section 12.4 Third Party Claims. Promptly upon the receipt by a Parent Indemnified
Party or a Company Indemnified Party (a “Covered Indemnified Party”) of any notice of the
commencement of any Action brought by a Person not a party hereto other than a claim for Taxes,
which shall be governed by Article XIII (a “Third Party Claim”), such Covered
Indemnified Party shall promptly, but in no event more than thirty (30) days following such Covered
Indemnified Party’s receipt of a Third Party Claim, give notice of such Third Party Claim to the
Designated Monitor (if such Covered Indemnified Party is a Parent Indemnified Party) or to Parent
and the Designated Monitor (if such Covered Indemnified Party is a Company Indemnified Party) (the
party receiving such notice, the “Indemnifying Party”; it being understood, in the case of
any claim by a Parent Indemnified Party, that the Designated Monitor is authorized pursuant to
Article XV to act in its capacity as Designated Monitor hereunder but that the Company
Stockholders, and not the Designated Monitor (in its capacity as such), are the only Persons with
any Liability to the Parent Indemnified Parties under this Article XII), but the failure to give
such notice shall not relieve the Indemnifying Party or any indemnitor



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hereunder of any Liability
it may have to such Person, except to the extent the Indemnifying Party (or such indemnitor) is
materially prejudiced thereby. If a Covered Indemnified Party gives such notice, the Indemnifying
Party, upon giving notice to such Covered Indemnified Party, will be entitled to assume the defense
of such Third Party Claim with counsel reasonably satisfactory to the Covered Indemnified Party at
the Indemnifying Party’s sole cost and expense and the Indemnifying Party will be entitled to
prosecute, appeal, negotiate, resolve, settle, compromise, arbitrate or otherwise pursue such Third
Party Claim, in whole or in part, subject to and in accordance with the provisions of this
Agreement. If the Indemnifying Party exercises its rights to assume the defense of such Third
Party Claim, the Indemnifying Party shall have no obligation to indemnify or pay for or reimburse
any Covered Indemnified Party for any attorneys’ fees or expenses incurred by the Covered
Indemnified Party after the assumption of the defense of such Third Party Claim; provided,
however, that the reasonable fees and expenses of one (1) counsel to all of the Covered
Indemnified Parties involved in such Third Party Claim will be indemnifiable hereunder if, in the
reasonable opinion of counsel to such Covered Indemnified Parties, (i) a conflict of interest
exists between the Indemnifying Party and any Covered Indemnified Party or (ii) there may be legal
defenses available to any Covered Indemnified Party that are different from or additional to those
available to the Indemnifying Party. The Indemnifying Party agrees that it will not, without the
prior written consent of the Covered Indemnified Party, settle, compromise or consent to the entry
of any judgment in any pending or threatened Third Party Claim relating to the matters contemplated
hereby if any Covered Indemnified Party is a party
thereto or, to the knowledge of the Indemnifying Party or, in the case of the Company
Stockholders, to the knowledge of the Designated Monitor, has been threatened to be made a party
thereto, unless such settlement, compromise or consent includes an unconditional release of each
such Covered Indemnified Party from all Liability arising or that may arise out of such Third Party
Claim and provides solely for monetary relief satisfied or to be satisfied by the Indemnifying
Party. If the Indemnifying Party does not exercise such right to assume the defense, the Covered
Indemnified Party may assume the defense thereof by counsel of the Covered Indemnified Party’s
choosing. Notwithstanding the foregoing, no Third Party Claim relating to Taxes may be settled,
compromised or otherwise resolved without the consent of the Surviving Corporation to the extent
that such settlement, compromise or other resolution would adversely affect Parent or its
Subsidiaries, including the Surviving Corporation. The Indemnifying Party shall not be liable for
any Losses in connection with any settlement of any Third Party Claim by the Covered Indemnified
Party without the Indemnifying Party’s prior written consent.



               Section 12.5 Written Notice of Claims. No claim may be asserted under this
Article XII against Parent or the Company Stockholders for breach of any representation or
warranty, unless written notice of such claim is received by such Parent or the Designated Monitor,
as the case may be, on or prior to the date on which the representation or warranty on which such
claim is based ceases to survive as set forth in Section 12.1.



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               Section 12.6 Limitations on Indemnification Obligations.




     (a) Notwithstanding the foregoing, or anything in this Agreement to the contrary,
(i) the aggregate amount payable to the Parent Indemnified Parties with respect to claims
under Section 12.2 shall not exceed fifty million dollars ($50,000,000) (the
“Cap”) and (ii) no indemnity shall be payable to any Parent Indemnified Party with
respect to any claim under Section 12.2(a) unless and until the aggregate of all
Losses for which claims are made under Section 12.2(a) exceeds two million five
hundred thousand dollars ($2,500,000) (the “Basket”), and then only to the extent
such Losses exceed the Basket; provided, however, that the foregoing
clauses (i) and (ii) shall not be applicable to, and the Parent Indemnified Parties shall
be indemnified in full for, Losses (x) arising out of, relating to or resulting from
breaches or inaccuracies in the representations and warranties contained in the Company
Fundamental Representations and the Designated Monitor Fundamental Representations, or (y)
Losses arising out of or resulting from fraud or intentional misrepresentation by the
Company.




     (b) Notwithstanding the foregoing, or anything in this Agreement to the contrary,
(i) the aggregate amount payable to Company Indemnified Parties with respect to claims
under Section 12.3 shall not exceed the Cap and (ii) no indemnity shall be payable
to the Company Indemnified Parties with respect to any claim under Section 12.3(a)
unless and until the aggregate of all Losses for which a
claim is made under Section 12.3(a) exceeds the Basket, and then only to the
extent such Losses exceed the Basket; provided, however, that the foregoing
clauses (i) and (ii) shall not be applicable to, and the Company Indemnified Parties shall
be indemnified in full for, Losses (x) arising out of, relating to or resulting from
breaches or inaccuracies in the representations and warranties contained in the Parent
Fundamental Representations or (y) Losses arising out of or resulting from fraud or
intentional misrepresentation by Parent or Merger Sub.




     (c) Notwithstanding anything to the contrary contained in this Agreement, no Person
shall be liable under this Article XII for any consequential, punitive, special,
incidental or indirect damages, including lost profits or diminution of value.



               Section 12.7 Adjustments to Losses; Insurance.




     (a) In calculating the amount of any Losses, the proceeds actually received (net of
costs) by the Covered Indemnified Party under any insurance policy in respect of the same
Losses shall be deducted. Notwithstanding the foregoing, except as otherwise set forth in
Section 8.6, no Covered Indemnified Party shall be obligated to seek recovery for
any Losses from any third party before seeking indemnification under this Agreement and in
no event shall Parent’s or the Company Stockholders’, as the case may be, obligation to
indemnify and hold harmless the Covered Indemnified Party pursuant to this Article
XII be conditioned upon the status of the recovery of any offsetting amounts from any
such third party; provided, however, that Parent or the



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Company
Stockholders, as the case may be, may require a Covered Indemnified Party to assign the
rights to seek recovery in respect of any such third party claim; provided,
further, however, that if Parent or the Company Stockholders, as the case may be,
becomes subrogated to a Covered Indemnified Party’s rights in respect of any such third
party claim, Parent or the Company Stockholders, as the case may be, thereafter will be
responsible for pursuing any such third party claim at their own expense and the Covered
Indemnified Party shall provide such assistance in connection therewith as is reasonably
requested by Parent or the Designated Monitor (on behalf of the Company Stockholders), as
the case may be.




     (b) If, prior to the Release Date, a Covered Indemnified Party recovers an amount
under any insurance policy in respect of Loss that is the subject of indemnification
hereunder after all or a portion of such Loss has been paid by Parent or the Company
Stockholders, as the case may be, pursuant to this Article XII, the Covered
Indemnified Party (i) if a Parent Indemnified Party, shall promptly deposit such amount in
the Escrow Account or (ii) if a Company Indemnified Party, shall promptly remit such amount
to Parent, it being understood that the obligations of the Company Stockholders shall be
several and not joint in this respect.



               Section 12.8 Recovery of Losses by Parent Indemnified Parties. All Parent Indemnity
Claims under this Article XII shall be satisfied only out of the Escrowed Assets in
accordance with Article XVI and the Escrow Agreement.



               Section 12.9 Remedies. The rights and remedies of the Company Stockholders and Parent
under this Article XII are exclusive and in lieu of any and all other rights and remedies
that the Company Stockholders and Parent may have under this Agreement or otherwise against each
other with respect to the Merger or with respect to any breach of any representation or warranty or
any failure to perform any covenant or agreement set forth in this Agreement and the Company
Stockholders and Parent each expressly waives any and all other rights, remedies and causes of
action it or its Affiliates may have against the other party or its Affiliates now or in the future
under any Law with respect to this Article XII in all events, other than as set forth in
Section 17.7.



               Section 12.10 Treatment of Indemnification Payments. The parties agree that any
indemnity payments pursuant to this Article XII will be treated for Tax purposes as an
adjustment to the Merger Consideration, unless otherwise required by applicable Law.



ARTICLE XIII




TAX MATTERS



               Section 13.1 Tax Return Preparation.




     (a) Pre-Closing Tax Returns. The Designated Monitor shall prepare and file,
or cause to be prepared and filed, all Tax Returns required to be filed by



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or on behalf of
or in respect of the Company or any of its Subsidiaries, as applicable, for any Pre-Closing
Period; provided, however, such Tax Returns shall not include any Tax
Returns with respect to MarCap Property Taxes designated by Parent, in its sole discretion.
The Designated Monitor shall furnish Parent with a completed copy of such Tax Returns for
review by Parent no later than one hundred and seventy (170) Business Days (in the case of
any non-income Tax Returns) or one hundred and fifty (150) Business Days (in the case any
income Tax Returns) after the Closing Date and the Designated Monitor shall consider in
good faith any amendments to such Tax Returns reasonably requested by Parent prior to the
filing of such Tax Returns. All such Tax Returns shall be prepared in a manner consistent
with past practice or as otherwise required by Law. The Company Stockholders
shall pay, out of the Escrow Account, to the relevant Taxing Authority all amounts
required to be paid in respect of such Tax Returns.




     (b) All Other Tax Returns. Parent shall prepare and file, or cause to be
filed, all Tax Returns other than those described in Section 13.1(a) above required
to be filed by or on behalf of or in respect of the Company and its Subsidiaries including
any Tax Returns with respect to MarCap Property Taxes which Parent has elected, in its sole
discretion to file pursuant to Section 13.1(a). To the extent that any such Tax
Returns reflect any Taxes for which the Company Stockholders
are liable pursuant to this Agreement, Parent shall furnish the Designated Monitor
with a completed copy of such Tax Returns for its review and approval (which approval shall
not be unreasonably withheld, conditioned, or delayed), no later than ten (10) Business
Days (in the case of any non-income Tax Returns) or sixty (60) Business Days (in the case
any income Tax Returns) before the due date of such Tax Return (including extensions).
Within ten (10) Business Days after receipt of a copy of the Tax Return, the Company
Stockholders shall pay, out of the Escrow Account, to Parent the amount of Tax
for which the Company Stockholders are responsible pursuant to this Agreement. All such
Tax Returns shall be prepared in a manner consistent with past practice or as otherwise
required by applicable Law. Parent shall pay to the relevant Taxing Authority all amounts
required to be paid in respect of such Tax Returns.




     (c) Parent shall not be permitted to (and shall not cause or permit the Company or any
of its Subsidiaries to) amend, re-file or otherwise modify any Tax Return relating in whole
or in part to the Company or any of its Subsidiaries with respect to any Pre-Closing Period
(or with respect to the pre-Closing portion of any Straddle Period) without the prior
written consent of the Designated Monitor if such amendment, re-filing or modification
would result in any material increased Liability for Taxes of the Company Stockholders in
respect of a Pre-Closing Period. For the avoidance of doubt, Parent shall, without the
prior written consent of the Designated Monitor, be permitted to (and shall cause or permit
the Company or any of its Subsidiaries to) file amended Tax Returns for Pre-Closing Periods
for the purpose of carrying back any Loss or similar item realized for a Post-Closing
Period to a Pre-Closing Period.



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               Section 13.2 Transfer Taxes. Any Transfer Taxes shall be borne fifty percent (50%) by
Parent and fifty percent (50%) by the Company Stockholders out of the Escrow Account. The Person
so required by applicable Law shall file all necessary Tax Returns and other documentation with
respect to all Transfer Taxes, and, if required by the applicable Law, the other parties shall, and
shall cause their Affiliates (other than any portfolio company of any Company Stockholder or Person
that directly or indirectly beneficially owns equity of any Company Stockholder) to join in the
execution of any such Tax Returns and other documentation.



               Section 13.3 Assistance and Cooperation. After the Closing Date, each of the Company,
Parent and their respective Affiliates (other than any portfolio company of any Company Stockholder
or Person that directly or indirectly beneficially owns equity of any Company Stockholder) and the
Designated Monitor shall:




     (a) assist the other party in preparing any Tax Returns which such other party is
responsible for preparing and filing in accordance with this Section 13.3;




     (b) cooperate fully with the other party in preparing for any audits of, or disputes
with Taxing Authorities regarding, any Tax Returns which such other party is responsible
for preparing and filing in accordance with this Section 13.3;




     (c) make available to the other party and to any Taxing Authority as reasonably
requested all information, records, and documents relating to Taxes of the Company and its
Subsidiaries;




     (d) provide timely notice to the other in writing of any pending or threatened Tax
audits or assessments of the Company and its Subsidiaries for taxable periods for which the
other may have a liability under this Section 13.3;




     (e) furnish the other with copies of all correspondence received from any Taxing
Authority in connection with any Tax audit or information request with respect to any
taxable period for which the other party may have a Liability under this Section
13.3;




     (f) timely sign and deliver such certificates or forms as may be necessary or
appropriate to establish an exemption from (or otherwise reduce), or file Tax Returns or
other reports with respect to, Transfer Taxes; and timely provide the other party with
powers of attorney or similar authorizations necessary to carry out the purposes of this
Section 13.3.



               Section 13.4 Certain Tax Agreements. As of the Closing Date, all Tax indemnification,
Tax allocation and Tax sharing agreements to which the Company or any of its Subsidiaries is a
party shall be terminated and after the Closing Date neither the Company nor any of its
Subsidiaries shall have any further obligations under any such Tax indemnification, Tax allocation
or Tax sharing agreement.



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               Section 13.5 Tax Indemnification.




     (a) The Company Stockholders shall be responsible for, and shall indemnify on an
after-tax basis, and hold harmless Parent for, out of the Escrow Account and without
duplication, any Losses, except to the extent such Losses have been taken into account in
calculating the Company’s Tangible Book Value or are addressed by Article XIV
(whether or not any payment is made pursuant to Article XIV with respect thereto),
attributable to (i) Taxes imposed on the Company or any of its Subsidiaries (x) relating or
attributable to any Pre-Closing Period and, with respect to any Straddle Period, the
portion of such Straddle Period deemed to end on and include the Closing Date, (y) relating
or attributable to the income, operations or assets of the Company or any of its
Subsidiaries for any Pre-Closing Period and, with respect to any Straddle Period, the
portion of such Straddle Period deemed to end on and include the Closing Date and/or (z)
relating or attributable to any MarCap Property Taxes; (ii) Taxes imposed on the Company or
any of its Subsidiaries under Section 1.1502-6 of the Treasury Regulations (or any
corresponding or similar provision state, local, or foreign Law or regulation) as a result
of being a member or successor of a member of any consolidated, unitary, combined or
similar group for any Pre-Closing Period or period that includes the Closing Date; (iii)
Taxes of any Person imposed on the Company or any of its Subsidiaries or any other
liability imposed under any Tax sharing, Tax indemnity, Tax allocation or similar
agreements (whether or not written) under or
to which the Company or any of its Subsidiaries was obligated, or was a party, on or
prior to the Closing Date; and (iv) any breach of any representation or warranty contained
in Section 4.13 or of any covenant contained in this Article XIII.




     (b) Parent shall be responsible for, and shall indemnify on an after-tax basis, and
hold harmless the Company Stockholders for, any Losses attributable to Taxes imposed on the
Company or any of its Subsidiaries relating or attributable to any Post-Closing Period and,
with respect to any Straddle Period, the portion of such Straddle Period deemed to begin
after the Closing Date.




     (c) Any payment made pursuant to this Section 13.5 shall be treated as an
adjustment to the Merger Consideration for all Tax purposes unless otherwise required by
applicable Law.



               Section 13.6 Indemnification Procedures and Contest Provisions.




     (a) If a notice of deficiency, proposed adjustment, adjustment, assessment, audit,
examination or other administrative or court proceeding, suit, dispute or other claim (a
“Tax Claim”) shall be delivered or sent to or commenced or initiated against the
Company or any of its Subsidiaries by any Taxing Authority with respect to Taxes or Tax
Returns of the Company or any of its Subsidiaries for which Parent or its Affiliates may
reasonably be entitled to indemnification pursuant to Section 13.5 above, Parent or
its Affiliates shall promptly notify the Designated Monitor in writing of the Tax Claim;
provided that a failure to provide such notice shall not limit Parent’s right to
indemnification



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hereunder unless the Designated Monitor’s right to contest such Tax on
behalf of the Company Stockholders is materially prejudiced thereby.




     (b) With respect to Tax Claims of or relating solely to Taxes of the Company or any of
its Subsidiaries for any Pre-Closing Period, the Designated Monitor may, upon written
notice to Parent, assume and control the defense of such Tax Claim at the cost and expense
of the Company Stockholders and with its own counsel. Parent may retain separate
co-counsel at its sole cost and expense and participate in the defense of the Tax Claim
(including participation in any relevant meetings and conference calls). The Designated
Monitor shall not enter into any settlement with respect to any such Tax Claim without
Parent’s prior written consent, which shall not be unreasonably delayed or withheld, and
the Designated Monitor shall keep Parent informed of all developments and events relating
to such Tax Claim (including promptly forwarding copies to Parent of any related
correspondence).




     (c) The Designated Monitor and Parent shall jointly control and participate in all
proceedings taken in connection with any Tax Claim relating to any Straddle Period, and
shall bear their own respective costs and expenses (it being understood that the Designated
Monitor’s costs and expenses shall be borne by the Company Stockholders). Neither the
Designated Monitor nor Parent shall settle any such Tax Claim without the prior written
consent of the other party.




     (d) With respect to Tax Claims of or relating solely to Taxes of the Company or any of
its Subsidiaries for any Post-Closing Period, Parent shall assume and control the defense
of such Tax Claim at its own cost and expense and with its own counsel.




     (e) The amount or economic benefit of any refunds, credits or offsets
(“Refunds”) of Taxes of the Company or any of its Subsidiaries for any Pre-Closing
Period shall be for the account of the Company Stockholders. Notwithstanding the
foregoing, any such Refunds shall be for the account of Parent to the extent such Refunds
are attributable to the carryback from a Post-Closing Period of items of loss, deduction or
credit, or other Tax items, of the Company or any of its Subsidiaries (or any of their
respective Affiliates, including Parent). The amount or economic benefit of any Refunds of
the Company or its Subsidiaries for any Post-Closing Period shall be for the account of
Parent. The amount or economic benefit of any Refunds of Taxes of the Company or any of
its Subsidiaries for any Straddle Period shall be equitably apportioned between Parent and
the Company Stockholders. Each party shall forward, and shall cause its Affiliates (other
than portfolio companies of any Company Stockholder or Person that directly or indirectly
beneficially owns equity of any Company Stockholder, except to the extent within the
Knowledge of the Company) to forward, to the party entitled to receive the amount or
economic benefit of a Refund to Tax the amount of such refund, or the economic benefit of
such credit or offset to Tax,



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within ten (10) Business Days after such refund is received
or after such credit or offset is allowed or applied against another Tax Liability, as the
case may be.




     (f) Any payment required to be made pursuant to this Section 13.6 shall be
made within thirty (30) Business Days after the indemnified party makes written demand upon
the indemnifying party, but in no case earlier than five (5) Business Days after the date
on which the relevant Taxes are paid to the relevant Taxing Authority. Any payment not
timely made shall accrue interest at the rate equal to the Prime Rate as published in the
Wall Street Journal, compounded quarterly.



               Section 13.7 Allocation of Straddle Period Taxes. For purposes of this Article
XIII, in order to apportion appropriately any Taxes relating to a Straddle Period, the parties
shall, to the extent permitted or required under any applicable Law, treat the Closing Date as the
last day of the taxable year or period of the Company or relevant Subsidiary for all Tax purposes.
In any case where the applicable Law does not permit the Company or relevant Subsidiary to treat
the Closing Date as the last day of the taxable year or period, the portion of any Taxes that are
allocable to the portion of the Straddle Period ending on the Closing Date shall be:




     (a) in the case of Taxes that are imposed on a periodic basis, deemed to be the amount
of such Taxes for the entire period multiplied by a fraction the numerator of which is the
number of calendar days in the Straddle Period ending
on and including the Closing Date and the denominator of which is the number of
calendar days in the entire relevant Straddle Period; and




     (b) in the case of Taxes not described in clause (b) (such as Taxes that are either
(x) based upon or related to income or receipts, or (y) imposed in connection with any sale
or other transfer or assignment of property), deemed equal to the amount that would be
payable if the taxable year or period ended on the Closing Date.



               Section 13.8 Other Tax Matters.




     (a) The indemnification provided for in this Article XIII shall be the sole
remedy for any claim in respect of Taxes for which an indemnity is provided under this
Article XIII (including the representations with respect to Taxes set forth in
Section 4.13), and the provisions of Article XII shall not apply to such
claims. To the extent the provisions of this Article XIII are inconsistent with
the provisions of any other provision of this Agreement, the provisions of this Article
XIII shall govern with respect to Taxes.




     (b) Any claim for indemnity under this Article XIII may be made only at a time
until the date that is sixty (60) days following the statute of limitations with respect to
the relevant taxable period (including any extensions).



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               Section 13.9 Recovery of Losses by Parent. All Parent Indemnity Claims under this
Article XIII shall be satisfied only out of the Escrowed Assets in accordance with
Article XVI and the Escrow Agreement.



ARTICLE XIV




PORTFOLIO LOSS PROTECTION



               Section 14.1 Indemnification for Portfolio Losses. The Company Stockholders, in
accordance with the terms and subject to the limitations set forth in this Article XIV,
shall indemnify and hold harmless Parent and its Subsidiaries (including the Surviving Corporation)
from, against and in respect of any Protected Annual Portfolio Losses during the period from and
including the Closing Date until the last day prior to the (5th) anniversary of the Closing Date
(the “Portfolio Loss Protection Period”).



               Section 14.2 Calculation of Portfolio Losses. Except as otherwise agreed in writing
by Parent and the Designated Monitor, Protected Annual Portfolio Losses shall be calculated for
purposes of this Agreement and the Escrow Agreement in accordance the calculation of Protected
Annual Portfolio Losses methodology set forth on Schedule III.



               Section 14.3 Notification of Protected Annual Portfolio Losses.




     (a) Within thirty (30) days following each Annual Protection Period (or, in respect of
the fifth Annual Protection Period, within thirty (30) days following the date that is six
(6) months following the end of such Annual Protection Period), Parent shall deliver to the
Designated Monitor, with a copy to the Escrow Agent, either (i) a notice (a “No
Recoverable Loss Notice”) stating that there are no Protected Annual Portfolio Losses
or that there is a Rollover Annual Portfolio Gain for such Annual Protection Period, as
applicable or (ii) a notice (an “Annual Portfolio Loss Notice”) setting forth the
calculation of the Protected Annual Portfolio Losses for such Annual Protection Period. The
No Recoverable Loss Notice or Annual Portfolio Loss Notice, as applicable, shall set forth
in reasonable detail a calculation of the Protected Portfolio Carrying Value and Protected
Portfolio Protected Value at the end of the applicable Portfolio Loss Protection Period.




     (b) The Designated Monitor shall have thirty (30) Business Days following delivery of
the Annual Portfolio Loss Notice or No Recoverable Loss Notice, as applicable, to review
the calculation of the Protected Annual Portfolio Losses or Rollover Annual Portfolio Gain,
as applicable, and the calculation of the Protected Portfolio Carrying Value and Protected
Portfolio Protected Value calculated therein (the “Annual Verification Period”).
During the Annual Verification Period and at the Designated Monitor’s sole expense, the
Designated Monitor shall cause such verification as the Designated Monitor shall deem
useful to be performed with respect to the Protected Annual Portfolio Losses, or Rollover
Annual Portfolio Gain, Protected Portfolio Carrying Value and Protected Portfolio



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Protected
Value, as applicable. On the basis of that review, the Designated Monitor, no later than
ten (10) Business Days following the Annual Verification Period, may submit a notice to
Parent (the “Notice of Objection”) disputing the calculation of the Protected
Annual Portfolio Losses, Rollover Annual Portfolio Gain, Protected Portfolio Carrying Value
or Protected Portfolio Protected Value, as applicable, and proposing such adjustments, if
any, of the amounts reflected in such Annual Portfolio Loss Notice or No Recoverable Loss
Notice, as applicable, including the calculation of the Protected Portfolio Carrying Value
and Protected Portfolio Protected Value, that the Designated Monitor, in its good faith
judgment, believes are required. The Notice of Objection shall contain evidence and/or
substantiation of the basis of the Designated Monitor’s dispute.




     (c) The parties shall cooperate with and make available to the other parties and their
respective Representatives all information, records, data and working papers, and shall
permit access to its facilities and personnel, as may be reasonably required in connection
with the preparation and analysis of the No Recoverable Loss Notice or the Annual Portfolio
Loss Notice, as applicable, and the resolution of any disputes thereunder.




     (d) If, within ten (10) Business Days following the Annual Verification Period, the
Designated Monitor has not given Parent a Notice of Objection, then the No Recoverable Loss
Notice or the Annual Portfolio Loss Notice, as applicable, shall become final and binding
on the parties.




     (e) If the Designated Monitor has given Parent a Notice of Objection, the parties
shall attempt in good faith to resolve the disputed issues and to agree on the disputed
amounts, as promptly as practicable.




     (i) If the parties are not able to reach agreement within fifteen (15)
Business Days from receipt by Parent of the Notice of Objection, the disputed
issues shall be submitted for resolution to the Arbitration Firm. The Arbitration
Firm shall be instructed to determine the calculation of the amounts in a manner
consistent with Section 14.2.




     (ii) The Arbitration Firm shall limit its inquiry to those items which the
Designated Monitor disputed in the Notice of Objection.




     (iii) The Arbitration Firm shall determine disputed amounts and shall notify
the parties of its decision (it being understood that such notice shall include a
statement of the basis of the Arbitration Firm’s decision), within fifteen (15)
Business Days after its appointment.




     (iv) The Company Stockholders shall bear a portion of the fees and expenses
relating to the engagement of the Arbitration Firm in respect of its services
pursuant to this Section 14.3(e) in proportion to the aggregate amount
unsuccessfully disputed by the Designated Monitor over the aggregate amount of
disputed items submitted by the Designated



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Monitor to the Arbitration Firm, as
determined by the Arbitration Firm. All such fees and expenses not borne by the
Company Stockholders in accordance with the preceding sentence shall be borne by
Parent.




     (f) The amount of the Protected Annual Portfolio Losses or Rollover Annual Portfolio
Gain, as applicable, and Protected Portfolio Carrying Value and Protected Portfolio
Protected Value, set forth in Annual Portfolio Loss Notice or No Recoverable Loss Notice,
as applicable, (i) if no timely Notice of Objection has been delivered by the Designated
Monitor, as originally submitted by Parent, or (ii) if a timely Notice of Objection has
been delivered by the Designated Monitor, as determined pursuant to the resolution of such
dispute in accordance with Section 14.3(e), shall be the final amount of the
Protected Annual Portfolio Losses or Rollover Annual Portfolio Gain, as applicable,
Protected Portfolio Carrying Value and Protected Portfolio Protected Value.



               Section 14.4 Recovery of Protected Annual Portfolio Losses. In the event of a
determination of any final Protected Annual Portfolio Losses in accordance with this Article
XIV, as promptly as practicable, but in no event later that two (2)
Business Days after such determination, Parent and the Designated Monitor shall deliver to the
Escrow Agent a Joint Escrow Notice providing that such final amount of Protected Annual Portfolio
Losses shall be distributed to Parent from the then-remaining Escrowed Assets in accordance with
Article XVI.



               Section 14.5 Treatment of Protected Annual Portfolio Losses. The parties agree that
any indemnity payments pursuant to this Article XIV will be treated for Tax purposes as an
adjustment to the Merger Consideration, unless otherwise required by applicable Law.



ARTICLE XV




DESIGNATED MONITOR



               Section 15.1 Designated Monitor.




     (a) Set forth in Schedule V to this Agreement are the provisions governing the
arrangements between the Company Stockholders, the Former Warrant Holders and the
Designated Monitor, pursuant to which, among other things, the Designated Monitor has been
authorized and directed to act and take any and all actions required or permitted to be
taken in such capacity as Designated Monitor.




     (b) Parent, Merger Sub and the Company shall be able to rely conclusively on the
decisions, actions, consents or instructions of the Designated Monitor as to any decisions,
actions, consents or instructions taken or given by the Designated Monitor under this
Agreement and the Escrow Agreement, and may rely upon any such decision, action, consent or
instruction of the Designated



112









 







Monitor as being the decision, action, consent or instruction
of each such Company Stockholder.




     (c) The parties hereby agree that (i) the Designated Monitor may assign its rights and
delegate its obligations to an Affiliate, (ii) any successor of Designated Monitor in
accordance with Section V.6 of Schedule V shall be deemed to be the
Designated Monitor for the purposes of this Agreement, and (iii) subject to Section
11.2, upon the earlier of the termination of this Agreement in accordance with its
terms and the DM Termination Date, the Designated Monitor shall have no further
responsibilities hereunder or authority to act; it being understood that following any
termination of this Agreement, the Company’s obligation to reimburse the Designated Monitor
for its reasonable expenses under Schedule V shall survive until the expiration of
the applicable statute of limitations.




     (d) Prior to the Effective Time, (i) the Designated Monitor shall execute an escrow
agreement substantially in the form attached as Exhibit I (the “DM Escrow
Agreement”), the Warrant Escrow Agreement and the Escrow Agreement and (ii) the Company
shall fund or reimburse the amounts required by Section V.3 of Schedule V.




     (e) If as a result of the arrangement related to the Designated Monitor, any
Governmental Entity concludes that the Designated Monitor shall be subject to any Law or
regulation that would impose a material restriction or burden on the Designated Monitor or
any of its Affiliates (a “Burden”), the Designated Monitor and Parent shall
cooperate and negotiate in good faith alternative arrangements, and enter into such
alternative arrangements, that give effect to the intent of such arrangements without
imposing any Burden. The Designated Monitor shall have all power and authority to enter
into such alternative arrangements and to perform its duties and obligations thereunder.




     (f) Parent and Merger Sub acknowledge and agree that the Designated Monitor shall have
the right and authority, from and after the Effective Time, to enforce on behalf of the
Company Stockholders all obligations of Parent and its Affiliates hereunder.



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               Section 15.2 No Liability to Parent. Notwithstanding anything in this Agreement to the
contrary, the provisions set forth in Schedule V are for the benefit of each of the Company
Stockholders, the Former Warrant Holders and the Designated Monitor and are (other than with
respect to the reimbursement of the Designated Monitor’s pre-Closing expenses by the Company and
the requirement of the Company to make a capital call, in each case, prior to the Effective Time
pursuant to Section V.3 of Schedule V) between the Company Stockholders, the former
Warrant Holders and the Designated Monitor. In no event shall any of the provisions set forth in
Schedule V be binding upon or result in any liability to Parent, Merger Sub, the Surviving
Corporation or any of their respective directors, managers, officers, employees, agents,
stockholders or Affiliates (except to the extent that any such directors, managers, officers,
employees, agents, stockholders or Affiliates is a Company Stockholder and then only in their
capacity as a Company Stockholder) and the Designated Monitor shall execute a release in form and
substance reasonably satisfactory to Parent (the “DM Release”) at the Closing releasing
Parent, Merger Sub, the Surviving Corporation or any of their respective directors, managers,
officers, employees, agents, stockholders or Affiliates (except to the extent that any such
directors, managers, officers, employees, agents, stockholders or Affiliates is a Company
Stockholder and then only in their capacity as a Company Stockholder) from any such liability,
except that Parent shall cause the Surviving Corporation to pay the Designated Monitor any expenses
incurred prior to the Effective Time pursuant to Section V.3 of Schedule V to the
extent such amounts have been reserved or accrued on the Company’s Closing Balance Sheet.



ARTICLE XVI




ESCROW



               Section 16.1 Deposit and Administration of Escrowed Assets.




     (a) In accordance with the terms and subject to the conditions set forth herein and in
the Escrow Agreement, the Escrow Agent shall accept the deposit of the Escrowed Assets into
the Escrow Account, and shall administer the Escrowed
Assets until the termination or expiration of the Escrow Agreement (the date of such
termination or expiration, the “Release Date”).




     (b) Pursuant to the Escrow Agreement, the Escrow Agent shall establish the subaccounts
contemplated by the Escrow Agreement (the “Subaccounts”). Notwithstanding anything
to the contrary herein or in the Escrow Agreement, the existence of the Subaccounts is for
administrative purposes only with respect to the Escrow Agent’s ability to allocate
releases of Escrowed Assets among the Company Stockholders, and in no event shall the
existence of the Subaccounts delay, impede or otherwise adversely affect in any manner
Parent’s ability to receive the full amount of Escrowed Assets to which it is entitled
pursuant to the terms of this Agreement and the Escrow Agreement.




     (c) If a Parent Indemnified Party believes in good faith that it is entitled to
indemnification for Losses under Article XII or Article XIII, as the case
may be



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(in any such case, a “Parent Indemnity Claim”), then Parent or such other
Parent Indemnified Party may provide written notice (a “Parent Claim Notice”) to
the Designated Monitor and the Escrow Agent of the dollar amount of such Parent Indemnity
Claim (the “Parent Claim Amount”), and describing in reasonable detail the basis
upon which Parent asserts that such Parent Indemnity Claim is required to be satisfied
through a release and distribution of a portion of the Escrowed Assets (the “Parent
Claim Basis”). Delivery of an Annual Portfolio Loss Notice pursuant to Section
14.3(a) shall constitute delivery of a Parent Claim Notice hereunder. The date on which
a Parent Claim Notice is received by the Escrow Agent is referred to as the “Parent
Claim Notice Date.” The Parent Claim Notice shall be treated as set forth in
Section 16.2.




     (d) As promptly as practicable upon determination that a Parent or another Parent
Indemnified Party is entitled to recovery from the Escrowed Assets for a Parent Indemnity
Claim under Article XII or Article XIII, as the case may be, Parent and the
Designated Monitor shall deliver a joint written notice to the Escrow Agent (a “Joint
Escrow Notice”) providing that the amount of such Parent Indemnity Claim shall be paid
to Parent from the then-remaining Escrowed Assets in accordance with this Article
XVI.



               Section 16.2 Payment of Parent Indemnity Claims.




     (a) Upon receipt of a Parent Claim Notice from Parent or another Parent Indemnified
Party pursuant to Section 16.1(b), the Escrow Agent shall set aside and hold as a
reserve to cover such Parent Indemnity Claim Escrowed Assets having an Escrow Value equal
to the Parent Claim Amount set forth in the Parent Claim Notice (a “Reserve”) until
there is a final resolution of such Parent Indemnity Claim.




     (b) If the Escrow Agent does not receive from the Designated Monitor a written notice
(an “Escrow Dispute Notice”) disputing the Parent Claim Basis and/or all or any
part of the Parent Claim Amount specified in such Parent Claim Notice (a “Dispute”)
within forty-five (45) days after the applicable Parent Claim Notice Date (the “Claim
Period”), then the Escrow Agent shall release and distribute to Parent, in accordance
with Section 16.6, no sooner than five (5) Business Days and no later than ten (10)
Business Days after the end of the Claim Period, Escrowed Assets having an Escrow Value
equal to the Parent Claim Amount.




     (c) If the Escrow Agent receives, within the Claim Period, from the Designated Monitor
(with a copy to Parent) an Escrow Dispute Notice setting forth a Dispute then, to the
extent applicable, the Escrow Agent shall release and distribute to Parent or another
Parent Indemnified Party, in accordance with Section 16.6, only Escrowed Assets
having an Escrow Value equal to the uncontested portion of the Parent Claim Amount, if any,
no sooner than five (5) Business Days and no later than ten (10) Business Days after
receipt of such Escrow Dispute Notice.



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     (d) Unless Parent and the Designated Monitor deliver a Joint Escrow Notice to the
Escrow Agent modifying the provisions of such Parent Claim Notice, the portion of the
Parent Claim Amount subject to a Dispute and not distributed as provided in Section
16.2(c) shall continue to be held by the Escrow Agent as a Reserve until the earlier of
such time as (i) Parent and the Designated Monitor have delivered to the Escrow Agent a
Joint Escrow Notice advising the Escrow Agent as to how such Dispute shall be resolved or
(ii) such Dispute is resolved in accordance with Article XII or Article
XIII, as the case may be, of this Agreement, in which event Parent and the Designated
Monitor shall deliver a Joint Escrow Notice to the Escrow Agent notifying the Escrow Agent
of the outcome of such dispute, and, no sooner than five (5) Business Days and no later
than ten (10) Business Days after receipt by the Escrow Agent of a Joint Escrow Notice
contemplated by clause (i) or clause (ii) of this sentence, the Escrow Agent shall release
and distribute, in accordance with Section 16.6, Escrowed Assets having an Escrow
Value equal to the Parent Indemnity Claim as so fully determined.



               Section 16.3 Payment of Protected Portfolio Losses. Upon receipt of a Joint Escrow
Notice of Protected Annual Portfolio Losses pursuant to Section 14.4, the Escrow Agent
shall release and distribute, in accordance with Section 16.6, no sooner than five (5)
Business Days and no later than ten (10) Business Days after receipt of such Joint Escrow Notice,
Escrowed Assets having an Escrow Value equal to the Protected Annual Portfolio Losses. Each date
on which Escrowed Assets are distributed from the Escrow Account in respect of Protected Annual
Portfolio Losses is referred to herein as an “Annual Escrow Distribution Date.”



               Section 16.4 Escrow Step-Down.




     (a) Except as set forth herein, the Escrowed Assets shall remain in escrow until the
Release Date, unless earlier released and distributed to Parent or another Parent
Indemnified Party in accordance with Section 16.6.




     (b) On the sixth (6th) or twenty-first (21st) Business Day, as applicable pursuant to
the Step Down Share Purchase Right Agreement, following as applicable, (i) receipt by the
Escrow Agent of a No Recoverable Loss Notice or (ii) the Annual Escrow Distribution Date
with respect to each Annual Protection Period during the Portfolio Loss Protection Period
(each, a “Step-Down Date”), a portion of the unreserved Escrowed Shares shall be
released from escrow to the Company Stockholders and to the Former Warrant Holders and the
Warrant Escrow Account in accordance with the Escrow Agreement and the Warrant Escrow
Agreement to the extent that, following the release of such Escrowed Shares, the aggregate
value of the Escrowed Shares remaining with the Escrow Agent immediately following such
release, based upon the Share Value, is equal to seventeen and a half percent (17.5%) of
the Average Protected Portfolio Assets in respect of the prior Annual Protection Period.
Except as set forth in Section 16.4(c) below, there will be no step-downs of
Escrowed Cash.



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     (c) On each Step-Down Date prior to expiration of the Portfolio Loss Protection
Period, if the amount of Escrowed Cash not subject to a Reserve exceeds the Carrying Value
of Loans and Leases in the Protected Portfolio as of such Step-Down Date, an amount of
Escrowed Cash equal to such excess will be released from escrow to the Company Stockholders
and to the Former Warrant Holders and the Warrant Escrow Account in accordance with the
Escrow Agreement and the Warrant Escrow Agreement.




     (d) Notwithstanding the foregoing, in the event that, upon a Step-Down Date, the
Release Date or the consummation of an Initial Public Offering or other transaction
pursuant to this Section 16.4, as the case may be, there shall be any outstanding
Parent Indemnity Claims, then any Escrowed Shares subject to the related Reserve shall not
be available for potential distribution or release to the Company Stockholders or the
Former Warrant Holders and the Warrant Escrow Account in accordance with the Escrow
Agreement and the Warrant Escrow Agreement on such Step-Down Date, Release Date or Initial
Public Offering or other transaction pursuant to Section 16.5, as the case may be.




     (e) The Average Protected Portfolio Assets used to calculate the amount of Escrowed
Shares released on any Step Down Date (or in connection with an Initial Public Offering in
accordance with Section 16.5(a)) shall be based upon the Protected Portfolio
Carrying Value determined in accordance with Section 14.3(f).




     (f) In the event that Escrowed Shares are substituted or replaced with other Escrowed
Assets or the Escrowed Assets include any amount of distributions, interest or earnings in
respect of any Escrowed Shares or such replacement Escrowed Assets, such replacement
Escrowed Assets shall be released at such times in accordance with this Section
16.4 (or in connection with an Initial Public Offering, in accordance with Section
16.5(a)) as would apply to the Escrowed Shares replaced by such replacement Escrowed
Assets.




     (g) Each Reserve or release under this Section 16.4 or Section 16.6
shall be made on a pro rata basis from each Subaccount to each Company Stockholder, subject
to the Step Down Share Purchase Right Agreement and in accordance with the Escrow Agreement
and the Warrant Escrow Agreement.



               Section 16.5 Extraordinary Transactions.




     (a) In the event that Parent consummates an Initial Public Offering during the
Portfolio Loss Protection Period, on the sixth (6th) or twenty-first (21st) Business Day,
as applicable pursuant to the Step Down Share Purchase Right Agreement, following the
closing of such Initial Public Offering, a portion of the unreserved Escrowed Shares shall
be released from escrow to the Company Stockholders and to the Former Warrant Holders and
the Warrant Escrow Account in accordance with the Escrow Agreement and the Warrant Escrow
Agreement to the extent that, following the release of such Escrowed Shares, the aggregate
value



117









 







of the Escrowed Shares remaining with the Escrow Agent immediately following such
release, based upon the Share Value, is equal to seventeen and a half percent (17.5%) of
the Average Protected Portfolio Assets in respect of the prior twelve-month period. No
Escrowed Cash will be released upon an Initial Public Offering of Parent.




     (b) In the event of any Parent Sale Transaction during the Portfolio Loss Protection
Period, Parent shall cause to be delivered to the Escrow Agent in respect of each Escrowed
Share the cash, assets or shares of common stock or other securities of the surviving or
successor Person of such Parent Transaction (or the ultimate parent thereof) that are
received by holders of shares of Parent Common Stock for each such share of Parent Common
Stock upon consummation of such Parent Transaction (“Replacement Escrowed Assets”).
Replacement Escrowed Assets shall be released from escrow to the Company Stockholders to
and the Former Warrant Holders and the Warrant Escrow Account in accordance with the Escrow
Agreement and the Warrant Escrow Agreement at the same times and in the same amounts as
would be applicable to the Escrowed Shares replaced by the Replacement Escrowed Assets.



               Section 16.6 Release of Escrowed Assets.




     (a) In the event that any Escrowed Assets are required to be released and distributed
to a Parent Indemnified Party in satisfaction of Protected Annual
Portfolio Losses or Parent Indemnity Claims (in either case, “Escrow Claims”),
such Escrowed Assets shall be released and distributed to such Parent Indemnified Party as
follows:




     (i) First, Escrow Claims shall be paid by the release and distribution to
Parent by the Escrow Agent of such number of Escrowed Shares, rounded to the
nearest whole share, equal to a fraction (x) the numerator of which is the dollar
amount of such Escrow Claims and (y) the denominator of which is the Share Value
per Escrowed Share;




     (ii) Second, following depletion of all Escrowed Shares, unsatisfied Escrow
Claims shall be paid by the release and distribution to Parent by the Escrow Agent
of Escrowed Cash having an Escrow Value equal to the dollar amount of such Escrow
Claims;




     (iii) Third, following depletion of the Escrowed Cash, unsatisfied Escrow
Claims shall be paid by the release and distribution to Parent by the Escrow Agent
of other Escrowed Assets, if any, having an Escrow Value equal to the dollar amount
of such Escrow Claims.




     (b) Notwithstanding the foregoing, if the Parent Indemnified Party is not Parent then,
at Parent’s election, the release of the Escrowed Assets pursuant to clause (a) shall be
either (i) paid in accordance with Section 16.6(a) or (ii) paid to Parent in which
case Parent shall pay the equivalent of such Escrow Claim in cash



118









 







in an amount equal to the
Escrow Value of the Escrowed Assets that otherwise would have been released under
Section 16.6(a).




     (c) No sooner than five (5) or twenty (20) Business Days, as applicable pursuant to
the Step Down Share Purchase Right Agreement, and no later than ten (10) or twenty five
(25) Business Days, respectively, after the Release Date, the Escrow Agent shall release
and distribute to the Company Stockholders and the Former Warrant Holders and the Warrant
Escrow Account in accordance with the Escrow Agreement all Escrowed Assets not previously
released and distributed to Parent, less any Escrowed Assets subject to a Reserve.




     (d) Following the Release Date, upon resolution of any Dispute, the Escrowed Assets
subject to a related Reserve shall be released and distributed in accordance with such
resolution as set forth in a Joint Escrow Notice.



               Section 16.7 Stockholder Matters.




     (a) All shares of capital stock (including, without limitation, by way of dividend,
reclassification, readjustment, stock split or reverse stock split) and all earnings,
dividends or other amounts (including any amounts resulting from the redemption of any
Escrowed Assets), whether in cash or otherwise, distributed by Parent and received by the
Escrow Agent from time to time with respect to the Escrowed Assets
(“Distributions”), shall be held by the
Escrow Agent upon the same terms and conditions as the Escrowed Assets as follows:
(i) any distributions of Parent Common Stock shall be treated as Escrowed Shares, (ii) any
cash distributions shall be treated as Escrowed Cash and (iii) any distributions of other
securities or other assets (“Distribution Assets”) shall be treated as other Escrow
Assets.




     (b) For so long as the Escrowed Shares remain in escrow, Parent shall deliver or cause
to be delivered to the Company Stockholders or their permitted successors or assigns copies
of any notices, proxies and proxy materials in connection with any meeting of stockholders,
or copies of any written consents in connection with any such solicitation. The Company
Stockholders shall have the right to vote all their respective Escrowed Shares, to the
extent such Escrowed Shares are Parent Voting Common Stock, in connection with any such
meeting or written consent subject to the terms of any stockholder or similar agreement to
which the Company Stockholders are party.



               Section 16.8 Transfer Restrictions.




     (a) The Escrowed Shares shall not be registered under the Securities Act at the
Closing Date and, other than release and distribution of such shares by the Escrow Agent to
Company Stockholders, Former Warrant Holders or the Warrant Escrow Account, may not be
transferred, sold or otherwise disposed of by any holder thereof except pursuant to an
effective registration statement under the



119









 







Securities Act or in accordance with an
exemption from the registration requirements of the Securities Act.




     (b) The Escrowed Shares shall not be sold, pledged or otherwise transferred except
pursuant to and in accordance with the provisions of the Parent Certificate and the
Stockholders Agreement, and any amendments thereto, or pursuant to the Escrow Agreement or
the Warrant Escrow Agreement in connection with the Step Down Share Purchase Right
Agreement. Any such transferred Escrowed Shares shall be subject to the terms of this
Agreement, the Escrow Agreement. the Warrant Escrow Agreement and the Step Down Share
Purchase Right Agreement.



               Section 16.9 Tax Treatment of Escrowed Assets. The Escrowed Assets shall be treated
by the Company, Designated Monitor, Company Stockholders, Parent (or any other Parent Indemnified
Party), Former Warrant Holders, and the Escrow Agent as owned by the Company Stockholders for all
Tax purposes. Any Escrowed Assets that are released and distributed to Parent (or any other Parent
Indemnified Party) pursuant to the terms of this Agreement shall, immediately after such release
for all tax purposes, cease to be treated as owned by the Company Stockholders and shall, at such
time, be treated as owned by Parent (or any other Parent Indemnified Party). Any Escrowed Assets
that are released and distributed to the Former Warrant Holders or the Warrant Escrow Account
pursuant to the terms of this Agreement shall, immediately after such release for all tax purposes,
cease to be treated as owned by the Company Stockholders and shall, at such time, be treated as
owned by the relevant Former Warrant
Holder, it being understood that any shares released from the Warrant Escrow Account to the
Company Stockholders shall thereafter be treated as owned by such Company Stockholders. Any
release and distribution of Escrowed Assets to Parent (or any other Parent Indemnified Party) shall
be treated for Tax purposes as an adjustment to the Merger Consideration.



ARTICLE XVII




MISCELLANEOUS



               Section 17.1 Fees and Expenses. Except as otherwise set forth on Schedule I, and as
otherwise provided herein, all costs and expenses incurred in connection with this Agreement will
be paid by the party incurring such cost or expense.



               Section 17.2 Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or sent by overnight courier (providing proof of delivery) to the parties at the
following addresses (or at such other address for a party as shall be specified by like notice):



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	 	(a)	 	if to Parent or Merger Sub, to:
	 
	 	 	 	EverBank Financial Corp.

501 Riverside Avenue 12th Floor

Jacksonville, Florida 32202

Facsimile: (904) 623-8191

Attention: General Counsel
	 
	 	 	 	with a copy to (which copy shall not constitute notice):
	 
	 	 	 	Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036-6522

Facsimile: (212) 735-2000

Attention: Patricia Moran
	 
	 	(b)	 	if to the Company, to:
	 
	 	 	 	Tygris Commercial Finance Group, Inc.

10 Waterview Boulevard

Parsippany, New Jersey 07054

Facsimile: (973) 576-0500

Attention: General Counsel






	 	 	 	with a copy to (which copy shall not constitute notice):






	 	 	 	Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004-2498

Facsimile: (212) 558-3588

Attention: Mark J. Menting

                   Melissa Sawyer
	 
	 	(c)	 	if to the Designated Monitor, to:
	 
	 	 	 	Aquiline Capital Partners LLC

535 Madison Avenue, 24th floor

New York, NY 10016

Facsimile: (212) 624-9510

Attention: Mitchell Leidner




121









 












	 	 	 	with a copy to (which copy shall not constitute notice):






	 	 	 	Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Facsimile: (212) 455-2502

Attention: Catherine M. Kidd





               Section 17.3 Consents and Approvals. For any matter under this Agreement requiring
the consent or approval of any party to be valid and binding on the parties hereto, such consent or
approval must be in writing.



               Section 17.4 Entire Agreement; No Third-Party Beneficiaries. This Agreement
(including the Exhibits and Schedules), together with the Confidentiality Agreement, the
Stockholders Agreement, the Stock Purchase Agreement and the Registration Rights Agreement in
connection with the Initial Investment constitute the entire agreement, and supersede all prior
agreements and understandings, both written and oral, among the parties with respect to the subject
matter of this Agreement. This Agreement is not intended to and does not confer upon any Person
other than the parties any legal or equitable rights or remedies (except with respect to any (i)
Parent Indemnified Party or Company Indemnified Party solely for purposes of Article XII,
and (ii) any Covered Person and D&O Covered Person solely for purposes of Section 9.5). No
representation, warranty, inducement, promise, understanding or condition not set forth in this
Agreement has been made or relied upon by any of the parties of this Agreement.



               Section 17.5 Governing Law. This Agreement and any claim, controversy or dispute
arising under or related thereto, the relationship of the parties, and/or the interpretation and
enforcement of the rights and duties of the parties, whether arising in law or in equity, in
contract, tort or otherwise, shall be governed by, and construed and interpreted in accordance
with, the Laws of the State of Delaware, without
regard to its rules regarding conflicts of law to the extent that the application of the Laws
of another jurisdiction would be required thereby.



               Section 17.6 Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, in whole or in part by any of the parties without the
prior written consent of the other parties (other than designation by the Designated Monitor of and
assignment of its corresponding rights, interests and obligations in its capacity as Designated
Monitor to, a successor Designated Monitor as provided pursuant to the terms hereof, including
Schedule V), and any assignment without such consent shall be null and void. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.



               Section 17.7 Specific Enforcement. The parties agree that irreparable damage would
occur and that the parties would not have an adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance with their specific terms or were
otherwise breached. Accordingly, it is



122









 







agreed that the parties shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement exclusively in the Delaware Court of Chancery or any state appellate
court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to
accept jurisdiction over a particular matter, any state or federal court within the State of
Delaware), this being in addition to any other remedy to which they are entitled at law or in
equity; for the avoidance of doubt, it being understood that the Designated Monitor’s rights under
this Section 17.7 shall be determined by reference to the potential harm suffered by, and
the adequacy of damages to, the Company Stockholders.



               Section 17.8 Consent to Jurisdiction. In addition, each of the parties hereto
irrevocably agrees that any legal action or proceeding with respect to this Agreement and the
rights and obligations arising hereunder, or for recognition and enforcement of any judgment in
respect of this Agreement and the rights and obligations arising hereunder brought by the other
party hereto or its successors or assigns, shall be brought and determined exclusively in the
Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware
(or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter,
any state or federal court within the State of Delaware). Each of the parties hereto hereby
irrevocably submits with regard to any such action or proceeding for itself and in respect of its
property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and
agrees that it will not bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than the aforesaid courts. Each of the parties hereto hereby
irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason other than the
failure to serve in accordance with this Section 17.8, (b) any claim that it or its
property is exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice,
attachment prior to judgment, attachment in aid of execution of judgment, execution of
judgment or otherwise), and (c) to the fullest extent permitted by the applicable Law, any claim
that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the
venue of such suit, action or proceeding is improper, or (iii) this Agreement, or the subject
matter hereof, may not be enforced in or by such courts.



               Section 17.9 Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF ANY
ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND
THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER



123









 







INTO THIS AGREEMENT, BY, AMONG OTHER THINGS,
THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 17.9.



               Section 17.10 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full force and effect.
Upon such determination that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the fullest extent permitted by
applicable Law and in an acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.



               Section 17.11 Performance of Obligations. Parent shall cause Merger Sub to perform
all of its obligations under this Agreement.



               Section 17.12 Counterparts. This Agreement may be executed in two or more
counterparts (including by facsimile), all of which shall be considered one and the same agreement
and shall become effective when such counterparts have been signed by each of the parties and
delivered to the other parties.



               Section 17.13 Amendment or Supplement. This Agreement may be amended, modified, or
supplemented in any and all respects, solely by written agreement of: (a) prior to the Effective
Time, all of the parties hereto; and (b) from and after the Effective Time, Parent, the Surviving
Corporation and the Designated Monitor.



               Section 17.14 Non-Recourse. The parties agree and acknowledge that the Escrowed
Assets are the sole and exclusive source of funds for satisfaction of all claims by the Parent
Indemnified Parties in connection with, arising out of or resulting from the subject matter of this
Agreement and the transactions contemplated herein, and any such claims shall be non-recourse to
any Company Stockholder (except to the extent of its interest in the Escrowed Assets) and the
Designated Monitor.



[Remainder of Page Intentionally Left Blank.]




124









 





     IN WITNESS WHEREOF, Parent, Merger Sub, the Company and the Designated Monitor have signed
this Agreement or caused this Agreement to be signed by their respective officers hereunto duly
authorized, all as of the date first written above.



	 	 	 	 	 	 	 

	 	 	EVERBANK FINANCIAL CORP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert M. Clements	 	 
	 	 	Name: Robert M. Clements	 	 
	 	 	Title: Chairman and Chief Executive Officers	 	 
	 
	 	 	 	 	 	 
	 	 	TITAN MERGER SUB, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Blake Wilson	 	 
	 	 	Name: Blake Wilson	 	 
	 	 	Title: President	 	 
	 
	 	 	 	 	 	 
	 	 	TYGRIS COMMERCIAL FINANCE GROUP, INC.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Douglas Hollowell	 	 
	 	 	Name: Douglas Hollowell	 	 
	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	AQUILINE CAPITAL PARTNERS LLC AND SOLELY 

FOR PURPOSES OF SECTION 3.2, 3.7, 3.9, 3.13, 

Article V, 8.6, 8.7, 9.1, 9.8, 10.2, Article XII, 13.1, 13.3, 

13.6, 14.3, 14.4, Article XV, Article XVI, Article XVII 

AND Schedule V	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Geoffrey Kalish	 	 
	 	 	Name: Geoffrey Kalish	 	 
	 	 	Title: Authorized Signatory