EXHIBIT 10.1


 




 





 


AGREEMENT AND
PLAN OF MERGER


 


BY AND AMONG


 


TAILWIND
FINANCIAL INC.,


 


TWF ACQUISITION CORPORATION,


 


AND


 


ASSET ALLIANCE CORPORATION


 


DATED AS OF JANUARY 8,
2008


 




 





 


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  	
  THE
  MERGER

  	
   

  	
  2

  
	
  1.1.

  	
   

  	
  The Merger

  	
   

  	
  2

  
	
  1.2.

  	
   

  	
  Closing

  	
   

  	
  2

  
	
  1.3.

  	
   

  	
  Effective Time

  	
   

  	
  3

  
	
  1.4.

  	
   

  	
  Effect

  	
   

  	
  3

  
	
  1.5.

  	
   

  	
  Certificate of Incorporation and Bylaws

  	
   

  	
  3

  
	
  1.6.

  	
   

  	
  Directors and Officers

  	
   

  	
  3

  
	
  1.7.

  	
   

  	
  Parent Charter and Bylaws

  	
   

  	
  4

  
	
  ARTICLE II

  	
   

  	
  EFFECT
  OF THE MERGER; EXCHANGE OF CERTIFICATES

  	
   

  	
  4

  
	
  2.1.

  	
   

  	
  Conversion of Company Shares

  	
   

  	
  4

  
	
  2.2.

  	
   

  	
  Exchange of Certificates

  	
   

  	
  5

  
	
  2.3.

  	
   

  	
  Escrow Agreement

  	
   

  	
  6

  
	
  2.4.

  	
   

  	
  Earnings Adjustment

  	
   

  	
  7

  
	
  2.5.

  	
   

  	
  Release of Indemnity Escrow

  	
   

  	
  8

  
	
  2.6.

  	
   

  	
  Performance Payments

  	
   

  	
  8

  
	
  2.7.

  	
   

  	
  Treatment of Options and Warrants

  	
   

  	
  9

  
	
  2.8.

  	
   

  	
  Withholding

  	
   

  	
  10

  
	
  2.9.

  	
   

  	
  Adjustments

  	
   

  	
  10

  
	
  2.10.

  	
   

  	
  Termination of Exchange Fund

  	
   

  	
  10

  
	
  2.11.

  	
   

  	
  No Liability

  	
   

  	
  10

  
	
  ARTICLE III

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES OF THE COMPANY

  	
   

  	
  11

  
	
  3.1.

  	
   

  	
  Organization and Qualification

  	
   

  	
  11

  
	
  3.2.

  	
   

  	
  Subsidiaries

  	
   

  	
  11

  
	
  3.3.

  	
   

  	
  Capitalization

  	
   

  	
  12

  
	
  3.4.

  	
   

  	
  Authority

  	
   

  	
  12

  
	
  3.5.

  	
   

  	
  No Conflict

  	
   

  	
  13

  
	
  3.6.

  	
   

  	
  Consents

  	
   

  	
  13

  
	
  3.7.

  	
   

  	
  Financial Statements and Internal Controls

  	
   

  	
  13

  
	
  3.8.

  	
   

  	
  No Undisclosed Liabilities

  	
   

  	
  15

  
	
  3.9.

  	
   

  	
  Absence of Certain Changes

  	
   

  	
  15

  



 


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  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.10.

  	
   

  	
  Assets and Properties

  	
   

  	
  15

  
	
  3.11.

  	
   

  	
  Intellectual Property

  	
   

  	
  15

  
	
  3.12.

  	
   

  	
  Contracts

  	
   

  	
  16

  
	
  3.13.

  	
   

  	
  Change of Control Payments to Employees

  	
   

  	
  17

  
	
  3.14.

  	
   

  	
  Interested Party Transactions

  	
   

  	
  17

  
	
  3.15.

  	
   

  	
  Compliance with Laws

  	
   

  	
  17

  
	
  3.16.

  	
   

  	
  Litigation

  	
   

  	
  20

  
	
  3.17.

  	
   

  	
  Insurance

  	
   

  	
  20

  
	
  3.18.

  	
   

  	
  Environmental Matters

  	
   

  	
  20

  
	
  3.19.

  	
   

  	
  Brokers’ and Finders’ Fees

  	
   

  	
  20

  
	
  3.20.

  	
   

  	
  Employment Matters

  	
   

  	
  21

  
	
  3.21.

  	
   

  	
  Tax Matters

  	
   

  	
  24

  
	
  3.22.

  	
   

  	
  Company Public Funds

  	
   

  	
  26

  
	
  3.23.

  	
   

  	
  Company Private Funds

  	
   

  	
  26

  
	
  3.24.

  	
   

  	
  Certain Payments

  	
   

  	
  27

  
	
  3.25.

  	
   

  	
  Privacy

  	
   

  	
  27

  
	
  3.26.

  	
   

  	
  Indemnification

  	
   

  	
  27

  
	
  ARTICLE IV

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES OF PARENT AND MERGER SUB

  	
   

  	
  28

  
	
  4.1.

  	
   

  	
  Organization of Parent and Merger Sub

  	
   

  	
  28

  
	
  4.2.

  	
   

  	
  Subsidiaries

  	
   

  	
  28

  
	
  4.3.

  	
   

  	
  Capitalization

  	
   

  	
  28

  
	
  4.4.

  	
   

  	
  Authority

  	
   

  	
  29

  
	
  4.5.

  	
   

  	
  No Conflict

  	
   

  	
  29

  
	
  4.6.

  	
   

  	
  Consents

  	
   

  	
  30

  
	
  4.7.

  	
   

  	
  SEC Filings; Financial Statements

  	
   

  	
  30

  
	
  4.8.

  	
   

  	
  No Undisclosed Liabilities

  	
   

  	
  31

  
	
  4.9.

  	
   

  	
  Absence of Certain Changes

  	
   

  	
  31

  
	
  4.10.

  	
   

  	
  Business Activities

  	
   

  	
  31

  
	
  4.11.

  	
   

  	
  Title to Properties

  	
   

  	
  32

  



 


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  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.12.

  	
   

  	
  Intellectual Property

  	
   

  	
  32

  
	
  4.13.

  	
   

  	
  Agreements, Contracts and Commitments.

  	
   

  	
  32

  
	
  4.14.

  	
   

  	
  Change of Control Payments to Employees

  	
   

  	
  32

  
	
  4.15.

  	
   

  	
  Interested Party Transactions

  	
   

  	
  32

  
	
  4.16.

  	
   

  	
  Compliance with Laws

  	
   

  	
  33

  
	
  4.17.

  	
   

  	
  Litigation

  	
   

  	
  33

  
	
  4.18.

  	
   

  	
  Insurance

  	
   

  	
  33

  
	
  4.19.

  	
   

  	
  Brokers’ and Finders’ Fees

  	
   

  	
  33

  
	
  4.20.

  	
   

  	
  Taxes

  	
   

  	
  33

  
	
  4.21.

  	
   

  	
  Board Approval

  	
   

  	
  35

  
	
  4.22.

  	
   

  	
  Trust Fund

  	
   

  	
  35

  
	
  4.23.

  	
   

  	
  Indemnification

  	
   

  	
  35

  
	
  ARTICLE V

  	
   

  	
  COVENANTS

  	
   

  	
  35

  
	
  5.1.

  	
   

  	
  Conduct

  	
   

  	
  35

  
	
  5.2.

  	
   

  	
  Authorizations

  	
   

  	
  37

  
	
  5.3.

  	
   

  	
  No Solicitation

  	
   

  	
  37

  
	
  5.4.

  	
   

  	
  Compliance with Obligations

  	
   

  	
  39

  
	
  5.5.

  	
   

  	
  Notices of Certain Events

  	
   

  	
  39

  
	
  5.6.

  	
   

  	
  Stockholders’ Meetings; Proxy Statements

  	
   

  	
  39

  
	
  5.7.

  	
   

  	
  Access to Information; Confidentiality

  	
   

  	
  42

  
	
  5.8.

  	
   

  	
  Reasonable Efforts; Regulatory Matters; Third-Party
  Consents

  	
   

  	
  42

  
	
  5.9.

  	
   

  	
  Fees and Expenses

  	
   

  	
  43

  
	
  5.10.

  	
   

  	
  Public Announcements

  	
   

  	
  43

  
	
  5.11.

  	
   

  	
  Affiliates

  	
   

  	
  43

  
	
  5.12.

  	
   

  	
  Quotation of Listing

  	
   

  	
  43

  
	
  5.13.

  	
   

  	
  Tax Treatment

  	
   

  	
  43

  
	
  5.14.

  	
   

  	
  Pre-Closing Confirmation

  	
   

  	
  44

  
	
  5.15.

  	
   

  	
  Stock Symbol

  	
   

  	
  44

  
	
  5.16.

  	
   

  	
  Parent Record Books

  	
   

  	
  44

  



 


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  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
  CONDITIONS
  PRECEDENT TO THE CLOSING

  	
   

  	
  44

  
	
  6.1.

  	
   

  	
  Conditions to Each Party’s Obligations

  	
   

  	
  44

  
	
  6.2.

  	
   

  	
  Conditions to the Obligation of Parent

  	
   

  	
  45

  
	
  6.3.

  	
   

  	
  Conditions to the Obligation of the Company

  	
   

  	
  46

  
	
  ARTICLE VII

  	
   

  	
  TERMINATION

  	
   

  	
  48

  
	
  7.1.

  	
   

  	
  Termination

  	
   

  	
  48

  
	
  7.2.

  	
   

  	
  Effect of Termination

  	
   

  	
  49

  
	
  7.3.

  	
   

  	
  Amendment

  	
   

  	
  49

  
	
  7.4.

  	
   

  	
  Extension; Waiver

  	
   

  	
  49

  
	
  ARTICLE VIII

  	
   

  	
  SURVIVAL
  OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION; LIMITATIONS

  	
   

  	
  50

  
	
  8.1.

  	
   

  	
  Survival of Representations, Warranties and
  Covenants

  	
   

  	
  50

  
	
  8.2.

  	
   

  	
  Indemnification

  	
   

  	
  50

  
	
  8.3.

  	
   

  	
  Limitations

  	
   

  	
  51

  
	
  8.4.

  	
   

  	
  Procedures

  	
   

  	
  52

  
	
  8.5.

  	
   

  	
  Company Representative; Power of Attorney

  	
   

  	
  54

  
	
  8.6.

  	
   

  	
  Parent Share Adjustment

  	
   

  	
  55

  
	
  ARTICLE IX

  	
   

  	
  DEFINITIONS,
  CONSTRUCTION, ETC

  	
   

  	
  55

  
	
  9.1.

  	
   

  	
  Definitions

  	
   

  	
  55

  
	
  9.2.

  	
   

  	
  Construction

  	
   

  	
  68

  
	
  ARTICLE X

  	
   

  	
  GENERAL
  PROVISIONS

  	
   

  	
  69

  
	
  10.1.

  	
   

  	
  Notices

  	
   

  	
  69

  
	
  10.2.

  	
   

  	
  Entire Agreement

  	
   

  	
  70

  
	
  10.3.

  	
   

  	
  Severability

  	
   

  	
  70

  
	
  10.4.

  	
   

  	
  Specific Performance

  	
   

  	
  70

  
	
  10.5.

  	
   

  	
  Successors and Assigns; Assignment; Parties in
  Interest

  	
   

  	
  70

  
	
  10.6.

  	
   

  	
  Waiver

  	
   

  	
  71

  
	
  10.7.

  	
   

  	
  Governing Law; Venue

  	
   

  	
  71

  
	
  10.8.

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  71

  
	
  10.9.

  	
   

  	
  No Claims Against Trust Account

  	
   

  	
  72

  
	
  10.10.

  	
   

  	
  Other Remedies

  	
   

  	
  72

  
	
  10.11.

  	
   

  	
  Counterparts; Facsimile Delivery

  	
   

  	
  72

  



 


iv

















 


Exhibits


 


	
  Exhibit A

  	
   

  	
  Board of Directors

  
	
  Exhibit B

  	
   

  	
  Form of Third Amended and Restated
  Certificate of Incorporation of Parent

  
	
  Exhibit C

  	
   

  	
  Form of Second Amended and Restated
  Bylaws of Parent

  
	
  Exhibit D

  	
   

  	
  Form of Letter of Transmittal

  
	
  Exhibit E

  	
   

  	
  Form of Escrow Agreement

  
	
  Exhibit F

  	
   

  	
  Form of Affiliate Letter

  
	
  Exhibit G-1

  	
   

  	
  Form of Lipnick Employment Agreement

  
	
  Exhibit G-2

  	
   

  	
  Form of Mintz Employment Agreement

  
	
  Exhibit G-3

  	
   

  	
  Form of Bondi Employment Agreement

  
	
  Exhibit H-1

  	
   

  	
  Form of Company Counsel Opinion

  
	
  Exhibit H-2

  	
   

  	
  Form of Opinion of General Counsel

  
	
  Exhibit I

  	
   

  	
  Form of Parent Counsel Opinion

  
	
  Exhibit J

  	
   

  	
  Form of Company Counsel Tax Opinion

  



 

















 


AGREEMENT
AND PLAN OF MERGER


 


THIS AGREEMENT AND PLAN OF MERGER, dated as of January 8,
2008 (this “Agreement”),
is by and among Tailwind Financial Inc., a Delaware corporation (“Parent”),
TWF Acquisition Corporation, a Delaware corporation and a wholly owned
subsidiary of Parent (“Merger Sub”) and Asset Alliance Corporation, a Delaware
corporation (the “Company”).


 


RECITALS


 


A.                                   Parent,
Merger Sub and the Company intend to effect a merger (the “Merger”) of
Merger Sub with and into the Company in accordance with this Agreement and the
General Corporation Law of the State of Delaware (the “DGCL”), with the
Company to be the surviving corporation of the Merger.


 


B.                                     Each
of the Boards of Directors of Parent and Merger Sub, the sole stockholder of
Merger Sub and the Board of Directors of the Company have unanimously approved
and declared advisable this Agreement and the Merger.


 


C.                                     As
a condition and inducement to Parent’s and Merger Sub’s willingness to
consummate the transactions contemplated by this Agreement, each of the Key
Employees will accept an offer of employment (contingent on the closing of the
transactions contemplated hereby) with the Parent or a subsidiary of Parent in
accordance with the terms agreed upon.


 


D.                                    The
parties intend, for federal income tax purposes, that the Merger qualify as a
reorganization as described in Section 368(a) of the Code and this
Agreement constitutes a “plan of reorganization” within the meaning of Section 1.368-1(c) of
the Treasury Regulations.


 


E.                                      Parent,
Merger Sub and the Company desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also to prescribe
various conditions to the Merger.


 


AGREEMENT


 


NOW,
THEREFORE, in consideration of the premises and of the mutual covenants,
representations, warranties, and agreements herein contained, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:


 


ARTICLE I

THE MERGER


 


1.1.                              The
Merger. At the Effective Time, and subject to and upon the terms and
conditions of this Agreement and the provisions of the DGCL, Merger Sub shall
be merged with and into the Company, the separate existence of Merger Sub shall
cease, and the Company shall continue as the surviving corporation (the “Surviving
Corporation”).


 


1.2.                              Closing. The closing (the “Closing”)
of the Merger shall take place as promptly as practicable, but no later than
three Business Days, following the satisfaction or waiver of the 


 

















 


conditions set forth in Article VI
(other than conditions that by their nature are to be satisfied at the Closing,
but subject to the satisfaction and waiver of such conditions) at 10:00 a.m.
at the offices of Bingham McCutchen LLP, 150 Federal Street, Boston, MA 02110
or at such other place, time and date as shall be agreed in writing between
Parent and the Company. The date on which the Closing occurs is referred to in
this Agreement as the “Closing Date.”


 


1.3.                              Effective Time. Prior to the
Closing, the parties shall prepare, and on the Closing Date the parties will
execute and file with the Delaware Secretary of State, a certificate of merger
(the “Certificate
of Merger”) executed in accordance with the relevant provisions of
the DGCL and shall make all other filings or recordings required under the DGCL
to give full effect to the Merger. The Merger shall become effective at such
time as the Certificate of Merger is duly filed with the Delaware Secretary of
State, or at such other time as Parent and the Company shall agree and specify
in the Certificate of Merger (the “Effective Time”).


 


1.4.                              Effect. At the Effective Time,
the effect of the Merger shall be as provided in this Agreement and the
applicable provisions of the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all rights and property
of the Company and Merger Sub shall vest in the Surviving Corporation, and all
debts and liabilities of the Company and Merger Sub shall become the debts and
liabilities of the Surviving Corporation.


 


1.5.                              Certificate
of Incorporation and Bylaws.


 


(a)                                  At
the Effective Time, the certificate of incorporation of Merger Sub, as in
effect immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by Applicable Law.


 


(b)                                 At
the Effective Time, the Bylaws of Merger Sub as in effect immediately prior to
the Effective Time shall be the Bylaws of the Surviving Corporation until
thereafter changed or amended as provided therein or by Applicable Law.


 


1.6.                              Directors
and Officers.


 


(a)                                  From
and after the Effective Time, each of Parent and the Surviving Corporation
shall be governed by a board of directors consisting of the persons identified
on Exhibit A  attached hereto, and each shall serve as
a member of the board of directors from and after the Effective Time until his
or her successor shall have been elected or appointed and shall have qualified
in accordance with Applicable Law and the Certificate of Incorporation or
Bylaws of Parent or the Surviving Corporation, as applicable. In order to
effectuate the foregoing Parent shall use its commercially reasonable efforts
to procure, in connection with the Closing, the seriatim resignation and
election of directors such that the composition of Parent’s board of directors
after giving effect to the Closing is consistent with the foregoing sentence.


 


(b)                                 From
and after the Effective Time, the officers of Parent and the Surviving
Corporation will consist of the officers of the Company at the Effective Time. Such
persons will continue as officers of Parent and the Surviving Corporation until
their successors have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in 


 


3

















 


accordance with the
Certificate of Incorporation and the Bylaws of Parent or the Surviving
Corporation, as applicable.


 


1.7.                              Parent
Charter and Bylaws.


 


(a)                                  Charter Amendment. The Parent Charter, as
in effect immediately prior to the Effective Time, shall be amended immediately
prior to the Effective Time, in substantially the form of Exhibit B attached hereto
(the “Charter
Amendment”), and, as so amended, shall be the certificate of
incorporation of Parent until thereafter changed or amended as provided therein
or by Applicable Law.


 


(b)                                 Bylaw Amendment. The Parent Bylaws, as in
effect immediately prior to the Effective Time, shall be in substantially the form of
Exhibit C attached
hereto, and shall be the bylaws of Parent until thereafter changed or amended
as provided therein or by Applicable Law.


 


ARTICLE II

EFFECT OF THE MERGER; EXCHANGE OF CERTIFICATES


 


2.1.                              Conversion of Company Shares. At
the Effective Time, by virtue of the Merger and without any action on the part of
the Company or Merger Sub:


 


(a)                                  Common Stock of Merger Sub. Each share of
common stock, par value $0.01 per share, of Merger Sub that is outstanding
immediately prior to the Effective Time, shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into
the right to receive one share of common stock, par value $0.01 per share of
the Surviving Corporation, so that at the Effective Time, Parent shall be the
holder of all of the issued and outstanding shares of the Surviving
Corporation.


 


(b)                                 Cancellation of Company Treasury Shares and Common
Stock Owned by Parent. Each share of the Company’s voting and
nonvoting common stock, par value $0.01 per share (the “Company Common
Stock”), held in the treasury of the Company and each share of
Company Common Stock owned by Parent, or any other direct or indirect, wholly
owned subsidiary of Parent immediately prior to the Effective Time shall be
automatically canceled and retired and shall cease to exist and no payment or
other consideration shall be made with respect thereto.


 


(c)                                  Conversion of Company Common Stock. Subject
to Section 2.1(b) and Section 2.3, each share of
Company Common Stock issued and outstanding immediately prior to the Effective
Time, shall be converted into (i) the right to receive a number of duly
authorized, validly issued, fully paid and nonassessable shares of Parent
Common Stock equal to the quotient obtained by dividing (A) 10,625,000
(the “Initial
Parent Shares”) by (B) the Outstanding Common Stock Number (the
“Exchange
Ratio”) plus (ii) the right to receive that number of shares of
Parent Common Stock issuable pursuant to Section 2.4(d) (if
any), divided by the Outstanding Common Stock Number plus (iii) the right
to receive that number (if any) of EBITDA Shares for each year with respect to
which EBITDA Shares are issuable equal to (A) the number of EBITDA Shares
issuable with respect to such year divided by (B) the Outstanding 


 


4

















 


Common Stock Number
(shares of Parent Common Stock issuable pursuant to this Section 2.1,
collectively, the “Parent Shares”).


 


2.2.                              Exchange
of Certificates.


 


(a)                                  Exchange Agent. Immediately following the
Effective Time, Parent shall deposit with American Stock Transfer &
Trust Company (or another comparable bank or trust company) (the “Exchange Agent”),
for the benefit of the holders of Company Common Stock, for exchange in
accordance with this Article II, through the Exchange Agent,
certificates representing the Initial Parent Shares issuable pursuant to Section 2.1,
less the Indemnity Escrow Amount and the Adjustment Escrow Amount, in exchange
for outstanding shares of Company Common Stock (such shares of Parent Common
Stock, together with any dividends or distributions with respect thereto, being
hereinafter referred to as the “Exchange Fund”). Upon the occurrence of
the Effective Time, Parent shall irrevocably instruct the Exchange Agent to
deliver, as soon as reasonably practicable, the Parent Common Stock
contemplated to be issued pursuant to Section 2.1 out of the
Exchange Fund in accordance with this Section 2.2.


 


(b)                                 Exchange Procedures. Upon the surrender of
a certificate that formerly represented shares of Company Common Stock in
accordance with the provisions of Section 2.2(c), the Exchange
Agent shall deliver to the holders of shares of Company Common Stock
certificates representing (i) the number of shares of Parent Common Stock
into which such shares shall have been converted in accordance with Section 2.1(c),
less (ii) the pro-rata portion of the Indemnity Escrow Amount and the
Adjustment Escrow Amount attributable to each such holder of shares of Company
Common Stock. Shares of Company Common Stock to be exchanged shall be delivered
under cover of a letter of transmittal in the form of Exhibit D, attached hereto.


 


(c)                                  No Further Ownership Rights in the Company.
At and after the Effective Time, each holder of shares of Company Common Stock
immediately prior to the Effective Time shall cease to have any rights as a
stockholder of the Company, except for the right to surrender such stockholder’s
certificates, which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock in exchange for receipt of Parent
Common Stock and the right to receive additional shares of Parent Common Stock
in accordance with Section 2.1(c). After the Effective Time, no
transfer of shares of Company Common Stock which were outstanding immediately
prior to the Effective Time shall be made on the stock transfer books of the
Company. Any certificates representing shares of Company Common Stock presented
after the Effective Time, for transfer shall be canceled and exchanged for
Parent Common Stock. Subject to the terms of Sections 2.3 and 2.6,
Parent shall have no obligation to deliver to any holder of Company Common
Stock his, her or its portion of the Parent Shares except to the extent that
such holder has caused certificates representing such holder’s shares of
Company Common Stock (or affidavits of lost certificates, together with a bond
in favor of Parent if requested by Parent, each in form, substance and amount acceptable
to Parent, if applicable) to be tendered to Parent.


 


(d)                                 Dissenting Shares. Shares of Company
Common Stock outstanding immediately prior to the Effective Time and held by a
holder who has not voted in favor of the Merger or consented thereto in writing
and who has demanded appraisal for such shares in 


 


5

















 


accordance with the DGCL
shall not be converted into a right to receive Parent Common Stock, unless such
holder fails to perfect, withdraws or otherwise loses such holder’s right to
appraisal under the DGCL. If, after the Effective Time, such holder fails to
perfect, withdraws or otherwise loses such holder’s right to appraisal, each
such share shall be treated as if it had been converted as of the Effective
Time into a right to receive Parent Common Stock. The Company shall give Parent
(i) prompt notice of (A) any demands for appraisal pursuant to the
DGCL received by the Company, (B) withdrawals of such demands, and (C) any
other instruments served pursuant to the DGCL and received by the Company in
connection with such demands and (ii) the opportunity to participate in
all negotiations and proceedings with respect to demands for appraisal under
the DGCL prior to the Effective Time. The Company shall not, except with the
prior written consent of Parent or as otherwise required by any Applicable Law,
make any payment with respect to any such demands for appraisal or offer to
settle or settle any such demands and shall not distribute any portion of the
Initial Parent Shares, Upward Adjustment Amount or amounts described in Section 2.6
or in Section 2.2(f) with respect to any of the foregoing
distributions to any holder that has not lost its appraisal rights.


 


(e)                                  Distributions with Respect to Unexchanged Shares.
No dividends or other distributions with respect to Parent Common Stock with a
record date after the Effective Time shall be paid to a holder of shares of
Company Common Stock with respect to the shares of Parent Common Stock until
surrender of shares of Company Common Stock in accordance with this Article II.
Following surrender of any such shares of Company Common Stock, there shall be
paid to the holder of the certificate representing shares of Parent Common
Stock issued in exchange therefor, without interest, the amount of dividends or
other distributions with a record date after the Effective Time payable with
respect to such shares of Parent Common Stock.


 


(f)                                    Fractional Shares. No fraction of a share
of Parent Common Stock shall be issued in the Merger. In lieu of any fractional
shares, the fractional amount of Parent Common Stock to which any holder of
Company Common Stock is entitled to receive under Sections 2.1(c)(i), (ii) and
(iii) and 2.2(b) shall be rounded up to the nearest
whole number, and such holder shall receive a whole share of Parent Common
Stock in lieu of a fractional share.


 


2.3.                              Escrow Agreement. Immediately prior to the Effective
Time, the Company Representative, Parent, Merger Sub and the Company shall
enter into an Escrow Agreement in substantially the form of Exhibit E  attached hereto (the “Escrow Agreement”)
with American Stock Transfer & Trust Company, as escrow agent (the “Escrow Agent”).
At the Effective Time, Parent shall deposit with the Escrow Agent (i) ten
percent of the Initial Parent Shares (the “Indemnity Escrow Amount”), which will be
available to satisfy the indemnity obligations set forth in Article VIII
and (ii) five percent of the Initial Parent Shares (the “Adjustment
Escrow Amount”), which will be available to effectuate the downward
adjustment to the Initial Parent Shares described in Section 2.4(c).
The Indemnity Escrow Amount and the Adjustment Escrow Amount shall be held and
distributed pursuant to the Escrow Agreement. The number of shares of Parent Common
Stock (and any property in respect of or in substitution for such shares) on
deposit with the Escrow Agent from time to time shall be referred to as the “Escrow.”


 


6

















 


2.4.                              Earnings
Adjustment.


 


(a)                                  Within
120 days after the Closing Date, the Surviving Corporation shall prepare and
deliver, or cause to be prepared and delivered, to Parent a consolidated income
statement of the Company and its Subsidiaries prepared in accordance with GAAP
and consistent with past practice of the Company (the “Closing Income
Statement”), setting forth the consolidated Net income (loss) applicable to
common stockholders of the Company and its Subsidiaries from the Balance Sheet
Date through the Closing Date (i) excluding any costs and expenses
incurred by the Company in connection with the transactions contemplated by
this Agreement that would otherwise be taken into account in determining income
after taxes (including the net after tax effect of the following: (X) the
excess of the deferred compensation paid pursuant to the Incentive Plans in
connection with the Merger over the amount accrued by the Company therefore, (Y) excess
costs associated with the issuance of restricted stock and (Z) gain/loss
associated with impairment or valuation allowance for long-lived assets and
gain/loss on separations from affiliates) but (ii) including the Net
Contract Amount (the “After-Tax Earnings”), which Closing Income
Statement shall be accompanied by a report of the Company’s registered independent
public accounting firm (the “Accounting Firm”) prepared in accordance
with the requirements of SAS 70 as to such Closing Income Statement, as
adjusted for any difference noted in such report. The parties understand and
agree that accrued and unvested incentive fees, general partner allocations
will be included in the Closing Income Statement consistent with past practice
of the Company and that, if the Closing Date is other than on the first or last
day of a month, such fees and allocations will be pro-rated based on the number
of days actually elapsed. Within 10 days following receipt of the Closing
Income Statement, Parent shall deliver written notice (an “Objection Notice”)
to the Accounting Firm of any dispute it has with respect to the preparation or
content of the Closing Income Statement. An Objection Notice must describe in
reasonable detail the items contained in the Closing Income Statement that
Parent disputes and the basis for any such disputes. Any items not disputed in
the Objection Notice will be deemed to have been accepted by Parent. If Parent
does not deliver an Objection Notice with respect to the Closing Income
Statement within such 10-day period such statement shall be final, conclusive
and binding on the parties. If Parent delivers an Objection Notice, the
Accounting Firm shall, in good faith, take into account the items contained in
the Objection Notice and make a final determination as to the Closing Income
Statement. All determinations made by the Accounting Firm shall be final,
conclusive and binding on the parties.


 


(b)                                 For
purposes of complying with the terms of this Section 2.4, each
party shall cooperate with and make available to the other party and its
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 Closing Income
Statement and the resolution of any disputes under the Closing Income
Statement.


 


(c)                                  If
After-Tax Earnings (as determined pursuant to Section 2.4(a)) is
negative, then the Initial Parent Shares will be adjusted by the lesser of (i) the
amount of shares of Parent Common Stock equal to the amount of the shortfall
divided by the Parent Stock Price and (ii) the Adjustment Escrow Amount
(the “Downward Adjustment Amount”) and Parent shall deliver a written
authorization to the Escrow Agent within two Business Days from the date on
which After-Tax Earnings is determined pursuant to Section 2.4(a) authorizing
the Escrow Agent to release to Parent from the Adjustment Escrow Amount the
Downward Adjustment Amount.


 


7

















 


(d)                                 If
After-Tax Earnings (as determined pursuant to Section 2.4(a)) is
positive, then the Initial Parent Shares will be adjusted by the amount of
shares of Parent Common Stock equal to the amount by which After-Tax Earnings
is greater than zero divided by the Parent Stock Price (the “Upward
Adjustment Amount”) and Parent shall deliver to the Exchange Agent shares
of Parent Common Stock equal to the Upward Adjustment Amount in accordance with
Section 2.2 within five Business Days from the date on which
After-Tax Earnings is determined pursuant to Section 2.4(a). The
Exchange Agent will thereafter distribute such shares of Parent Common Stock to
the holders and former holders of certificates representing shares of Company
Common Stock pro rata in accordance with Section 2.2. The foregoing
notwithstanding, in no event shall the Upward Adjustment Amount exceed 3,750,000
shares of Parent Common Stock.


 


2.5.                              Release
of Indemnity Escrow. The Escrow Agent will release all or a portion, as
applicable, of the Indemnity Escrow Amount pursuant to the Escrow Agreement and
the provisions of Section 8.4. On the 18-month anniversary of the
Closing Date, the Escrow Agent will, in accordance with the Escrow Agreement,
release any remaining Indemnity Escrow Amount, except any amount that is
subject to a pending Claim Certificate, which amount shall be released pursuant
to the provisions of Section 8.4.


 


2.6.                              Performance
Payments.


 


(a)                                  If,
for the fiscal year ending December 31, 2008, the Surviving Corporation
has EBITDA equal to or greater than $18.0 million (less any costs and expenses
of the Company related to the transactions contemplated by this Agreement
otherwise taken into account in calculating EBITDA (including the excess of the
deferred compensation paid pursuant to the Incentive Plans in connection with
the Merger over the amount accrued by the Company therefor) and less the
product of (i) $500,000 multiplied by (ii) the number of full or
partial months between January 1, 2008 and the Closing Date (the “Adjustment
Amount”)), Parent shall issue, in accordance with Section 2.2,
an additional 1,250,000 shares of Parent Common Stock plus any additional
shares in respect of fractional shares issuable in accordance with Section 2.2(f).


 


(b)                                 If,
for the fiscal year ending December 31, 2009, the Surviving Corporation
has EBITDA equal to or greater than $28.0 million, Parent shall issue, in
accordance with Section 2.2, an additional 1,250,000 shares of
Parent Common Stock plus any additional shares in respect of fractional shares
issuable in accordance with Section 2.2(f).


 


(c)                                  Notwithstanding
the foregoing, if either of the EBITDA targets set forth in Sections 2.6(a) and
(b) are not met and if the Surviving Corporation has cumulative
EBITDA for the fiscal years ending December 31, 2008, 2009 and 2010 (“Cumulative
EBITDA”) equal to or greater than $84.0 million less the Adjustment Amount,
Parent shall issue, in accordance with Section 2.2, the excess, if
any, of (i) an additional 2,500,000 shares of Parent Common Stock plus any
additional shares in respect of fractional shares issuable in accordance with Section 2.2(f) over
(ii) any shares of Parent Common Stock issued pursuant to Sections 2.6(a) or
(b); provided that if Cumulative EBITDA is less than $84.0
million less the Adjustment Amount but greater than $74.0 million less the
Adjustment Amount, Parent shall issue, in accordance with Section 2.2,
the excess, if any, of (iii) a pro-rata amount of the additional 2,500,000
shares of 


 


8

















 


Parent Common Stock
issuable pursuant to this Section 2.6(c) plus any additional
shares in respect of fractional shares issuable in accordance with Section 2.2(f) over
(iv) any shares of Parent Common Stock issued pursuant to Sections 2.6(a) or
(b). By way of example, if Cumulative EBITDA is $75.0 million less the
Adjustment Amount, Parent will issue 10% of the additional 2,500,000 shares of
Parent Common Stock plus any additional shares in respect of fractional shares
issuable in accordance with Section 2.2(f) and minus any
shares of Parent Common Stock issued pursuant to Sections 2.6(a) or
(b).


 


(d)                                 The
EBITDA targets set forth in Sections 2.6(a) through (c) will
be reduced by 0.006% for each 1,250 shares or portion thereof of Parent Common
Stock with respect to which the Stockholders of Parent exercise their right of
redemption pursuant to the Parent Charter after the date hereof and prior to
the Closing Date and .6% for each amount of shares or portion thereof of
Company Common Stock having an aggregate value, as of the Closing Date, equal
to $1.0 million as to which dissenters rights have been exercised and not lost
on the date of calculation.


 


(e)                                  Parent
shall deliver to the Exchange Agent any Parent Common Stock issuable pursuant
to this Section 2.6 within ten Business Days following the
completion of Parent’s audited financial statements for the applicable fiscal
year. The Exchange Agent will thereafter distribute such shares of Parent
Common Stock to the holders and former holders of certificates representing
shares of Company Common Stock pro rata in accordance with Section 2.2.


 


2.7.                              Treatment
of Options and Warrants.


 


(a)                                  Upon
and subject to the conditions set forth in this Agreement, at the Effective
Time, each Company Option granted under any Company Option Plan and outstanding
immediately prior to the Effective Time shall be converted into an option to
acquire such number of shares of Parent Common Stock (a “Converted Option”)
equal to the product obtained by multiplying (i) the aggregate number of
shares of Company Common Stock that would have been issuable upon exercise of
such Converted Option immediately prior to the Effective Time by (ii) the
sum of the Exchange Ratio plus the Contingent Consideration Adjustment (as
defined below), rounded down to the nearest whole share. The terms and
conditions of the Converted Option, including the vesting schedule thereof
(except to the extent otherwise provided in any agreement between the Company
and the holder of such Converted Option), shall otherwise remain the same as
the terms and conditions of the Company Option, except that the exercise price
per share of each Converted Option shall be equal to the quotient obtained by
dividing (1) the exercise price per share of such Converted Option
immediately prior to the Effective Time by (2) the sum of the Exchange
Ratio plus the Contingent Consideration Adjustment, rounded up to the nearest
whole cent.


 


(b)                                 Promptly
following the Closing Date, Parent shall file a registration statement on Form S-3
or Form S-8, as the case may be (or any successor or other
appropriate forms), with respect to the shares of Parent Common Stock subject
to the Converted Options and shall use its commercially reasonable best efforts
to maintain the effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such Converted Options remain outstanding.


 


9

















 


(c)                                  Upon
and subject to the conditions set forth in this Agreement, at the Effective
Time, each Company Warrant outstanding immediately prior to the Effective Time
shall be converted into a warrant to acquire such number of shares of Parent
Common Stock (a “Converted Warrant”) equal to the product obtained by
multiplying (i) the aggregate number of shares of Company Common Stock
that would have been issuable upon exercise of such Converted Warrant
immediately prior to the Effective Time by (ii) the sum of the Exchange
Ratio plus the Contingent Consideration Adjustment, rounded down to the nearest
whole share. The terms and conditions of the Converted Warrant, including the
vesting schedule thereof (except to the extent otherwise provided in any
agreement between the Company and the holder of such Converted Warrant), shall
otherwise remain the same as the terms and conditions of the Company Warrant,
except that the exercise price per share of each Converted Warrant shall be
equal to the quotient obtained by dividing (1) the exercise price per
share of such Converted Warrant immediately prior to the Effective Time by (2) the
sum of the Exchange Ratio plus the Contingent Consideration Adjustment, rounded
up to the nearest whole cent.


 


(d)                                 For
purposes of this Agreement, the term “Contingent Consideration Adjustment”
means the quotient obtained by dividing (X) the number of shares that the
Board of Directors of the Company shall reasonably determine, not later than
ten (10) Business Days prior to the Effective Time and based on the advice
of an independent third party appraiser, to be the likely number of shares of
Parent Common Stock that will be issued pursuant to Sections 2.1(c)(ii) and
(iii), by (Y) the Outstanding Common Stock Number.


 


2.8.                              Withholding.
Each of Parent, the Surviving Corporation and the Company, as applicable, shall
be entitled to deduct and withhold from any amounts payable by it pursuant to
this Agreement any withholding Taxes or other amounts required by Law to be
deducted and withheld. To the extent that any such amounts are so deducted or
withheld, such amounts will be treated for all purposes of this Agreement as
having been paid prior to the Closing to the Person in respect of which such
deduction and withholding was made.


 


2.9.                              Adjustments.
The numbers of shares of Parent Common Stock issuable pursuant to this Article II
shall be equitably adjusted to reflect appropriately the effect of any stock
split, reverse stock split, stock dividend (including any dividend or
distribution of securities convertible into Parent Common Stock), extraordinary
cash dividends, reorganization, recapitalization, reclassification, combination,
exchange of shares or other like change with respect to Parent Common Stock
occurring on or after the date hereof.


 


2.10.                        Termination
of Exchange Fund. Any portion of the Exchange Fund that remains
undistributed to the holders of certificates representing shares of Company
Common Stock for one year after the Effective Time shall be delivered to the
Surviving Corporation or otherwise on the instruction of the Surviving
Corporation, and any holders of certificates representing shares of Company Common
Stock who have not theretofore complied with this Article II shall
thereafter look only to the Surviving Corporation and Parent (subject to
abandoned property, escheat or other similar laws) for Parent Shares with
respect to the shares of Company Common Stock formerly represented thereby to
which such holders are entitled pursuant to this Article II.


 


2.11.                        No
Liability. None of Parent, Merger Sub, the Company, the Surviving
Corporation or the Exchange Agent shall be liable to any Person in respect of any
Parent Shares 


 


10

















 


from the Exchange Fund
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.


 


ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY


 


Subject to
such exceptions as are disclosed in the disclosure letter dated the date hereof
and delivered herewith to Parent (the “Company Schedules”) referencing
the appropriate Section or subsection of this Article III
or otherwise readily apparent as responsive to any other Section of this Article III,
the Company hereby represents and warrants to each of Parent and Merger Sub as
of the date hereof and as of the Closing as follows (provided that the
representations and warranties set forth in this Article III that
apply to Company Private Funds managed by a Management Company shall only apply
thereto to the extent of the Company’s knowledge relating to such Company
Private Funds):


 


3.1.                              Organization
and Qualification. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Company has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business. The Company is duly
qualified or licensed to do business and is in good standing as a foreign
corporation in each jurisdiction in which the conduct of its business or the
ownership, leasing, holding or use of its properties makes such qualification
necessary, except such other jurisdictions where the failure to be so qualified
or licensed or in good standing would not reasonably be expected to have a
Company Material Adverse Effect. The Company has delivered to Parent a true and
correct copy of the Company Certificate of Incorporation and its Bylaws, each
as amended to date and in full force and effect on the date hereof. The Company
has not violated the Company Certificate of Incorporation or its Bylaws in any
material respect.


 


3.2.                              Subsidiaries.


 


(a)                                  Schedule 3.2(a) sets forth a correct and complete list, as of the
date of this Agreement, of (i) each Subsidiary of the Company and
indicates the type of entity and jurisdiction of organization of each such
Subsidiary and (ii) each equity investment or other investment of greater
than $2,000,000 of the Company or any Subsidiary of the Company in any Person
other than a Subsidiary of the Company. Each Subsidiary of the Company is duly
organized, validly existing and in good standing (to the extent applicable)
under the Laws of its jurisdiction of formation. Each Subsidiary of the Company
has all requisite power and authority to own, lease and operate its properties
and to carry on its business. Each Subsidiary of the Company is duly qualified
or licensed to do business and is in good standing (to the extent applicable)
as a foreign organization in each jurisdiction in which the conduct of its
business or the ownership, leasing, holding or use of its properties makes such
qualification necessary, except such other jurisdictions where the failure to
be so qualified or licensed or in good standing would not reasonably be
expected to have a Company Material Adverse Effect. The Company has delivered
to Parent a true and correct copy of each of its Subsidiaries’ certificate of
incorporation and bylaws (or other comparable organizational documents), each
as amended to date and in full force and effect on the date hereof. None of the Company’s Subsidiaries is in
violation of its certificate of incorporation or bylaws or comparable
organizational documents in any material respect.


 


11

















 


(b)                                 All of the outstanding capital stock of,
or other ownership interests in, each of the Company’s Subsidiaries is owned by
the Company, directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of such capital stock or other ownership
interests). There are no outstanding (i) securities of the Company or any
of its Subsidiaries convertible into or exchangeable for shares of capital
stock or other voting securities or ownership interests in any of the Company’s
Subsidiaries or (ii) options or other rights to acquire from the Company
or any of its Subsidiaries, or obligation on the part of the Company or
any of its Subsidiaries to issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable for
any capital stock, voting securities or ownership interests in, any Subsidiary
of the Company (the items in clauses (i) and (ii) being referred
to collectively as the “Subsidiary Securities”). There are no
outstanding obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any outstanding Subsidiary Securities. All
of the outstanding share capital of each of the Company’s Subsidiaries has been
duly authorized and validly issued and is fully paid and non-assessable.


 


3.3.                              Capitalization.


 


(a)                                  Schedule 3.3(a) sets
forth (i) the authorized Equity Securities of the Company and (ii) the
number of Equity Securities of the Company that are issued and outstanding and
the record owners thereof, in each case, as of the date hereof. All of the outstanding Equity Securities of
the Company are duly authorized, validly issued, fully paid and non-assessable
and were not issued in violation of, and are not subject to, any preemptive rights. Except as set forth in Schedule 3.3(a) and
except for rights granted to Parent under this Agreement, there are no
outstanding options, warrants, calls, demands, stock appreciation rights, Contracts or other rights of any
nature to purchase, obtain or acquire or otherwise relating to, or any
outstanding securities or obligations convertible into or exchangeable for, or
any voting agreements with respect to, any Equity Securities of the Company or any other securities of the
Company.


 


(b)                                 All
of the outstanding Equity Securities of the Company have been issued in
compliance in all material respects with all requirements of Laws and Contracts
applicable to the Company and the Equity Securities of the Company.


 


3.4.                              Authority.


 


(a)                                  The
Company has all requisite corporate power and authority to execute and deliver
this Agreement and each of the Transaction Agreements to be executed and
delivered by it and, subject to Section 3.6, to perform all of
its obligations under this Agreement and each of the Transaction Agreements. The
execution, delivery and performance by the Company of this Agreement and each
of the Transaction Agreements to which it is a party and the consummation of
the transactions contemplated to be performed by it under this Agreement and
the Transaction Agreements to which it is a party have been, subject to Section 3.6,
duly authorized by all necessary and proper corporate action on the part of
the Company.


 


(b)                                 This
Agreement and each of the Transaction Agreements to be executed and delivered
by the Company will be duly executed and delivered by the Company and, when 


 


12

















 


so executed and
delivered, will constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws relating to or affecting the
enforcement of creditors’ rights in general and by general principles of
equity.


 


3.5.                              No
Conflict. Assuming that the matters referred to in Section 3.6
are satisfied, none of the execution, delivery or performance by the Company of
this Agreement or any of the Transaction Agreements or the consummation by the
Company of the Transactions does or will, with or without the giving of notice
or the lapse of time or both, (a) result in the creation of any Lien upon
any of the properties or assets of the Company (except for Permitted Liens) or (b) conflict
with, or result in a breach or violation of or a default under, or give rise to
a right of amendment, termination, cancellation or acceleration of any
obligation or to a loss of a benefit under (i) the Company Certificate of
Incorporation or Bylaws, (ii) any Material Contract of the Company or any
of its Subsidiaries or (iii) any Law, License or Permit or other
requirement to which the Company, any of its Subsidiaries or any of their
respective properties or assets are subject, except, in the case of (a), (b)(ii) or
(b)(iii) for those which would not have a Company Material Adverse Effect.


 


3.6.                              Consents.
No consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, or notice to any court, regulatory authority
(including, without limitation, the UK Financial Services Authority),
administrative agency or commission or other federal, state, county, local or
foreign Governmental Entity, instrumentality, agency or commission (each, a “Governmental
Entity”) or other Person is required by, or with respect to, the Company or
any of its Subsidiaries in connection with the execution and delivery of this
Agreement and the Transaction Agreements to which the Company or any of its
Subsidiaries is a party or the consummation of the transactions contemplated
hereby and thereby, or for any Contract of the Company or its Subsidiaries to
remain in full force and effect without limitation, modification and alteration
after the Effective Time so as to preserve all material rights of, and benefits
to, the Company and its Subsidiaries, as the case may be, under such
Contract from and after the Effective Time, except for (i) the approval of
the stockholders of the Company referred to in Section 5.6(b); (ii) the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware; (iii) notices and filings as may be required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any other
applicable U.S. or foreign antitrust laws (collectively, “Antitrust Laws”);
(iv) any filings that are required under the U.S., state and foreign
securities laws; and (v) such consents, waivers, approvals, orders,
authorizations, registrations, declarations or filings the failure of which to
obtain or make, individually or in the aggregate, would not reasonably be
expected to have or result in a Company Material Adverse Effect.


 


3.7.                              Financial
Statements and Internal Controls.


 


(a)                                  Schedule 3.7(a) sets
forth (i) the audited consolidated balance sheets and the related audited
consolidated income statements and statements of stockholders’ equity/(deficit)
and of cash flows of the Company and the Company’s Subsidiaries for the fiscal
years ended December 31, 2004, 2005 and 2006 and the opinion of Ernst &
Young LLP (for the fiscal years ended December 31, 2004 and 2005) and
Deloitte & Touche LLP (for the fiscal year 


 


13

















 


ended December 31,
2006), the Company’s independent auditor, thereon, and (ii) the unaudited
consolidated balance sheet of the Company and its Subsidiaries (the “Company
Balance Sheet”) as of September 30, 2007 (the “Balance Sheet Date”)
and the related unaudited consolidated income statements and statements of
stockholders’ equity/(deficit) and of cash flows of the Company and the Company’s
Subsidiaries for the nine-month period then ended (the financial statements
referred to in items (i) and (ii), collectively, the “Company Financial
Statements”). The Company Financial Statements have been prepared from the
books and records of the Company and its Subsidiaries and in accordance with
generally accepted accounting principles effective in the United States (“GAAP”)
applied on a consistent basis throughout the periods indicated and consistent
with each other, except as noted and except for the absence of footnotes in the
case of the unaudited interim Company Financial Statements. The Company Financial
Statements fairly present, in all material respects, the consolidated financial
position, results of operations and cash flows of the Company and its
Subsidiaries as of the dates and for the periods indicated therein, subject, in
the case of the unaudited interim financial statements, to normal year-end
adjustments. The Company’s revenue recognition policy complies with GAAP.


 


(b)                                 The
Company and each of its Subsidiaries has in place systems and processes that
are (i) designed to (A) provide reasonable assurances regarding the
reliability of the Company Financial Statements and (B) accumulate and
communicate to the Company’s principal executive officer and principal
financial officer in a timely manner the type of information that is required
to be disclosed in the Company Financial Statements, and (ii) customary
and adequate for a company at the same stage of development as the Company. Neither
the Company nor any of its Subsidiaries nor, to the Company’s knowledge, any
Employee, auditor, accountant or representative of the Company or any of its
Subsidiaries has received or otherwise had or obtained knowledge of any
complaint, allegation, assertion or claim, whether written or oral, regarding
the inadequacy of such systems and processes or the accuracy of the Company
Financial Statements. To the Company’s knowledge, there have been no instances
of fraud, whether or not material, during any period covered by the Company
Financial Statements.


 


(c)                                  To
the Company’s knowledge, no Employee has provided or is providing information
to any Governmental Entity regarding the commission or possible commission of
any crime or the violation or possible violation of any Law applicable to the
Company, any of its Subsidiaries or any part of their respective
operations. To the Company’s knowledge, none of the Company, any of its
Subsidiaries or any Employee, contractor, consultant, subcontractor or agent of
the Company or any of its Subsidiaries has discharged, demoted, suspended,
threatened, harassed or in any other manner discriminated against an Employee
in the terms and conditions of employment because of any act of such Employee
described in 18 U.S.C. Section 1514A(a).


 


(d)                                 During
the periods covered by the Company Financial Statements, the Company’s external
auditor with respect to such Company Financial Statements was independent of
the Company and its management. Schedule 3.7(d) lists each
report by the Company’s external auditors to the Company’s board of directors,
or any committee thereof, or the Company’s management concerning any of the
following and pertaining to any period covered by the Company Financial
Statements:  critical accounting
policies; internal controls; significant accounting estimates or judgments;
alternative accounting treatments; and any 


 


14

















 


required communications
with the Company’s board of directors, or any committee thereof, or with
management of the Company.


 


(e)                                  The
Company has not operated its and its Subsidiaries’ businesses outside of the
ordinary course of business since the Balance Sheet Date.


 


3.8.                              No
Undisclosed Liabilities. Neither the Company nor any of the Company’s
Subsidiaries has on the date of this Agreement: 
(i) any liability, indebtedness, obligation, expense, claim,
deficiency, guaranty or endorsement of any type, whether accrued, absolute,
contingent, matured, unmatured or other (whether or not required to be
reflected in the Company Financial Statements in accordance with GAAP but
excluding future obligations to perform pursuant to the terms of the
Contracts in accordance with the express terms of such Contracts), that (A) exceeds
$100,000 and (B) has not (1) been
reflected in the Company Balance Sheet, (2) arisen in the ordinary course
of the Company’s business consistent with past practices or (3) as set
forth in this Agreement or any of the Transaction Agreements since the Balance
Sheet Date, or (ii) any “off-balance sheet arrangements” (as such term is
defined in Item 303(a)(4) of Regulation S-K promulgated under the Exchange
Act).


 


3.9.                              Absence
of Certain Changes.


 


(a)                                  No
conditions, circumstances or facts exist, and since the Balance Sheet Date,
there have not been any events, occurrences, changes, developments or
circumstances, which would have a Company Material Adverse Effect.


 


(b)                                 The
Company and its Subsidiaries have not since the Balance Sheet Date and prior to
the date of this Agreement taken any action of the type referred to in Section 5.1,
except in the ordinary course of business consistent with past practices.


 


3.10.                        Assets
and Properties.


 


(a)                                  The
Company and its Subsidiaries have (i) good and valid title to all of their
respective material assets and properties (whether real, personal or mixed, or
tangible or intangible) (including all assets and properties recorded on the
Company Balance Sheet, other than assets and properties disposed of in the
ordinary course of business since the Balance Sheet Date) free and clear of any
Liens, other than Permitted Liens and (ii) valid leasehold interests in
all of the assets and properties which the Company or any of its Subsidiaries
lease, except where the failure to have such title or interest would not have a
Company Material Adverse Effect.


(b)                                 The
Company and its Subsidiaries do not own any real property.


 


(c)                                  Schedule 3.10(c),
contains a complete and accurate list of all material real estate leased,
subleased or occupied by the Company or any of its Subsidiaries pursuant to a
Lease as of the date of this Agreement (the “Leased Premises”). The Company and
its Subsidiaries enjoy peaceful and undisturbed possession of all Leased
Premises.


 


3.11.                        Intellectual
Property. Except as would not have a Company Material Adverse Effect:


 


15
















 


(a)                                  the
Company and each of its Subsidiaries owns or has a valid license or right to
use all Company Intellectual Property which it uses in the ordinary course of
business;


 


(b)                                 the
Company Intellectual Property is valid, enforceable and subsisting and nothing
has been done or omitted to be done which may cause any of it to cease to
be so;


 


(c)                                  no
activities or services or processes of the Company or any of its Subsidiaries
infringe or have infringed any Intellectual Property of any third party;


 


(d)                                 the
Company or one of its Subsidiaries is licensed or otherwise has the legal right
to use all computer programs owned by a third party which are used by the
Company or any of its Subsidiaries in the ordinary course of business (“Developed Software”);


 


(e)                                  The
Company or one of its Subsidiaries owns or has the legal right to use all
computer programs designed, written, developed or configured by, on behalf of,
or for the use of, the Company or any of its Subsidiaries which are used by it
or any of its Subsidiaries in the ordinary course of business, except for any
Developed Software; and


 


(f)                                    the
Company or one of its Subsidiaries owns or otherwise has the legal right to use
all information technology, telecommunications, network and peripheral
equipment used by the Company and any of its Subsidiaries.


 


3.12.                        Contracts.


 


(a)                                  Schedule 3.12(a) lists
all of the Material Contracts binding on the Company, any of its Subsidiaries
or the assets or property of the Company or any of its Subsidiaries as of the
date of this Agreement (“Company Material Contracts”).


 


(b)                                 The
Company and each of its Subsidiaries (and, to the Company’s knowledge, each of
the other party or parties thereto), has performed all obligations required to
be performed by it under each Company Material Contract, except for any failure
to perform that would not have a Company Material Adverse Effect. No event
has occurred or circumstance exists with respect to the Company or any of its
Subsidiaries or, to the Company’s knowledge, with respect to rights of or
against any other Person that (with or without lapse of time or the giving of
notice or both) does or may contravene, conflict with or result in a
violation or breach of or give the Company, any of its Subsidiaries or any
other Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity of, or to cancel, terminate or modify, any Company
Material Contract, except in each case as would not have a Company Material
Adverse Effect. No party to any Company Material Contract has repudiated any
material provision thereof or sought to terminate any Company Material Contract.
All Company Material Contracts are valid and binding on the Company and its
Subsidiaries and, to the Company’s knowledge, the other parties thereto, and are
in full force and effect, except made available in each case as would not have
a Company Material Adverse Effect. The Company has made available to Parent
true, accurate and complete copies of all Company Material Contracts.


 


(c)                                  (i) There
are no “change of control” or similar provisions or any obligations arising
under any Company Material Contract which are created, accelerated or triggered
by the execution, delivery or performance of this Agreement or any Transaction 


 


16

















 


Agreement or the
consummation of the Transactions and (ii) none of the execution, delivery
or performance of this Agreement or any Transaction Agreement or consummation
of the Transactions will, under the terms, conditions or provisions of any
Company Material Contract (A) result in any increase or decrease in any
payment or change in any material term or condition, (B) give rise to any
right of amendment, termination, cancellation or acceleration of any right or
obligation or to a loss of benefit or (C) grant any repayment or
repurchase rights to any Person, except any such provisions or obligations
which, individually or in the aggregate, would not have a Company Material
Adverse Effect.


 


(d)                                 Since
the Balance Sheet Date, none of the Company, its Subsidiaries or, to the
Company’s knowledge, any Management Company has waived, deferred or otherwise
agreed to a reduction in fees under any advisory agreement except in the
ordinary course of business.


 


3.13.                        Change
of Control Payments to Employees. Schedule 3.13 sets forth (a) each
plan or Contract of the Company or any of its Subsidiaries pursuant to which
more than $100,000 may become payable (whether currently or in the future)
to any Employee as a result of or in connection with the Merger or any of the
other transactions contemplated by this Agreement or the Transaction Agreements
and (b) a summary of the nature
and amounts that may become payable pursuant to each such plan or Contract.


 


3.14.                        Interested
Party Transactions.


 


(a)                                  To
the Company’s knowledge, no officer or director of the Company or any of its
Subsidiaries (nor any ancestor, sibling, descendant or spouse of any of such
Persons, or any trust, partnership or corporation in which any of such Persons
has an economic interest in excess of five percent (5%) of the ownership
interests therein), has, directly or indirectly, (i) an economic interest
in any Person which at any time since January 1, 2005 has furnished or
sold services or products that the Company or any of its Subsidiaries furnishes
or sells, or proposes to furnish or sell, (ii) an economic interest in any
Person that purchases from or sells or furnishes to, the Company or any of its
Subsidiaries, any goods or services or (iii) a beneficial interest in any
Contract to which the Company or any of its Subsidiaries is a party or by which
they or their properties are bound; provided, however, that
ownership of debt or equity interests not exceeding one percent (1%) of the
outstanding voting stock of an entity shall not be deemed an “economic interest
in any entity” for purposes of this Section 3.14.


 


(b)                                 There
are no receivables of the Company or any of its Subsidiaries owing by any
Employee or any consultant to the Company or any of the Company’s Subsidiaries
(or any ancestor, sibling, descendant, or spouse of any such Persons, or any
trust, partnership, or corporation in which any of such Persons has an economic
interest), other than advances in the ordinary and usual course of business for
reimbursable business expenses (as determined in accordance with the Company’s
established employee reimbursement policies and consistent with past practice).
None of the Stockholders has agreed to, or assumed, any obligation or duty to
guaranty or otherwise assume or incur any obligation or liability of the
Company or any of its Subsidiaries.


 


3.15.                        Compliance
with Laws. (a) The Company, each of its Subsidiaries and, to the
Company’s knowledge, each Management Company is and, since January 1, 2005
has been, in 


 


17

















 


material
compliance with all Applicable Laws. None of the Company, its Subsidiaries or,
to the Company’s knowledge, any Management Company has received any written
notice since January 1, 2005 (i) of any non-routine administrative,
civil or criminal investigation or audit (other than Tax audits) by any
Governmental Entity relating to the Company, any of its Subsidiaries or, to the
Company’s knowledge, any Management Company or (ii) from any Governmental
Entity alleging that the Company, any of its Subsidiaries or, to the Company’s
knowledge, any of the Management Companies are not in material compliance with
any Applicable Law or Judgment.


 


(b)                                 Each
of the Company, its Subsidiaries and, to the Company’s knowledge, the
Management Companies has in effect all permits, licenses, grants,
authorizations, easements, certificates, approvals, orders and franchises
(collectively, “Permits”) necessary for it to own, lease or otherwise
hold and operate its properties and assets and to carry on its businesses and
operations as now conducted. There are no defaults (with or without notice or
lapse of time or both) under, violations of, or events giving rise to any right
of termination, amendment or cancellation of, any such Permits.


 


(c)                                  The
financial statements for the Company Funds for all periods ending after January 1,
2005 have been prepared in all material respects in accordance with GAAP
(except as otherwise disclosed therein). Such financial statements for the
Company Funds fairly present, in all material respects, the results of
operations and changes in net assets of each such Company Fund for the
respective periods indicated, subject, in the case of unaudited financial
statements for the Company Funds, to the absence of footnotes and normal
year-end audit adjustments.


 


(d)                                 Each
Subsidiary of the Company and, to the Company’s knowledge, each Management
Company as of the date of this Agreement identified in Schedule 3.15(d) is,
and at all times required by Applicable Law has been, (i) duly registered
as an investment adviser under the Advisers Act or, in the case of Asset
Alliance International (UK) Ltd. or Wessex Asset Management Limited, is an
authorized person for the purposes of section 19 of the UK Financial
Services and Markets Act 2000 and (ii), duly registered, licensed or qualified
as an investment adviser (or similar entity) in each state or any other jurisdiction
where the conduct of its business requires such registration, licensing or
qualification, except where the failure to be so duly registered, licensed or
qualified would not reasonably be expected to have a Company Material Adverse
Effect. The Company is not, and none of its Subsidiaries or, to the Company’s
knowledge, any Management Company as of the date of this Agreement that is not
identified in Schedule 3.15(d), is an “investment adviser” (or
similar entity) required to register under the Advisers Act or any other
Applicable Law or is an “investment company” required to register under the
Investment Company Act. The Company, each of its Subsidiaries (other than Asset
Alliance International (UK) Ltd.) and, to the Company’s knowledge, each
Management Company identified in Schedule 3.15(d) (other than
Wessex Asset Management Limited) is in compliance in all material respects with
Rule 206(4)-7 under the Advisers Act.


 


(e)                                  Each
Subsidiary of the Company and, to the Company’s knowledge, each Management
Company as of the date of this Agreement identified in Schedule 3.15(e) is,
and at all times required by Applicable Law has been, duly registered, licensed
or qualified as a broker or dealer in each jurisdiction where the conduct of
its business required such registration,


 


18

















 


licensing or
qualification. The Company is not, and none of any of its Subsidiaries or, to
the Company’s knowledge, any Management Company as of the date of this
Agreement that are not identified in Schedule 3.15(e) is
required to be registered, licensed or qualified as a broker or dealer under
any Applicable Law.


 


(f)                                    Each
of the Company’s Subsidiaries and, to the Company’s knowledge, Management
Company as of the date of this Agreement, identified in Schedule 3.15(f) is,
and at all times required by Applicable Law, has been duly registered, licensed
or qualified as a commodity pool operator, futures commission merchant,
commodity trading advisor, bank, trust company, real estate broker, insurance
company, insurance broker or transfer agent in each jurisdiction where the
conduct of its business required such registration, licensing or qualification.
No other Subsidiary of the Company or, to the Company’s knowledge, Management
Company as of the date of this Agreement, is required to be so registered,
licensed or qualified.


 


(g)                                 (i) None
of the Company, any of its Subsidiaries, or, to the Company’s knowledge, any
Management Company or “affiliated person” (as defined in the Investment Company
Act) thereof is ineligible pursuant to Section 9(a) or 9(b) of
the Investment Company Act to serve in any capacity referred to in Section 9(a) thereof
to a registered investment company and (ii) none of the Company, any of
its Subsidiaries, or, to the Company’s knowledge, any Management Company, or,
to the Company’s knowledge, any Associated Person of any thereof is ineligible
pursuant to Section 203 of the Advisers Act or Section 15(b) of
the Exchange Act to serve as a registered investment adviser or as an
Associated Person of a registered investment adviser.


 


(h)                                 (i) Each
of the Company, the Company’s Subsidiaries and the Company Public Funds has
filed all registrations, reports, prospectuses, proxy statements, statements of
additional information, financial statements, sales literature, statements,
notices and other filings required to be filed by it with any Governmental
Entity, including all amendments or supplements to any of the above since January 1,
2005 (the “Filings”); (ii) each of the Filings when filed complied
with the requirements of Applicable Law; and (iii) no Filing when filed contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were or are made, not
misleading.


 


(i)                                     Except
for routine examinations conducted by any Governmental Entity in the ordinary
course of business of the Company, its Subsidiaries, Management Companies or Company
Funds, as applicable, since January 1, 2005 (i) to the Company’s
knowledge, no Governmental Entity has initiated any Legal Action relating to
the business of the Company, any of its Subsidiaries or any Company Fund and (ii) none
of the Company, any of its Subsidiaries or Company Funds has received any
written notice or communication (A) of any unresolved violation or
exception by any Governmental Entity with respect to any report or statement by
any Governmental Entity relating to any examination of the Company, any of its
Subsidiaries or any Company Fund, (B) threatening to revoke or condition
the continuation of any Permit or (C) restricting or disqualifying its
activities (except for restrictions generally imposed by rule, regulation or
administrative policy on similarly regulated Persons generally).


 


19

















 


3.16.                        Litigation.
(a) There is no Legal Action pending or, to the Company’s knowledge,
threatened against the Company or any of its Subsidiaries, any of their
respective properties or assets or, to the Company’s knowledge, any of their
respective Employees, nor, to the Company’s knowledge, is there any reasonable
basis therefor. None of the Company,
any of its Subsidiaries or their respective properties is subject to any order
that materially impairs the Company’s or such Subsidiary’s ability to operate. Schedule 3.16(a) lists
each Legal Action that has ever
been commenced by or against the Company or any of its Subsidiaries and
includes a brief description of each such Legal Action and the status or
outcome thereof of each such Legal Action.


 


(b)                                 To
the Company’s knowledge, there is no Legal Action pending or threatened against
or affecting any Company Private Fund, or its officers, directors or employees
or any facts or circumstances that would reasonably be expected to result in
any claims against, or liabilities of, the Company, any of its Subsidiaries or
any Company Private Fund, or that in any manner challenges or seeks to prevent,
alter or materially delay the Merger. To the Company’s knowledge, none of the
Company Private Funds or their offices, directors or employees (in their
capacities as such) is operating under or is subject to any order, writ,
judgment, injunction or decree of any Governmental Entity.


 


3.17.                        Insurance.
Schedule 3.17 sets forth as of the date of this Agreement all
insurance policies and fidelity bonds covering the assets, business, equipment,
properties, operations or Employees of the Company or any of its Subsidiaries,
including the type of coverage, the carrier, the amount of coverage, the term
and the annual premiums of such policies. There is no claim by the Company or
any of its Subsidiaries or any Affiliate thereof pending under any of such
policies or bonds as to which coverage has been questioned, denied or disputed
or that the Company has a reason to believe will be denied or disputed by the
underwriters of such policies or bonds. There is no pending claim that will
exceed the policy limits. All premiums due and payable under all such policies
and bonds have been paid (or if installment payments are due, will be paid if
incurred prior to the Closing) and the Company and its Subsidiaries are
otherwise in material compliance with the terms of such policies and bonds. The
Company has no knowledge of a threatened termination of, or premium increase
with respect to, any of such policies. None of the Company or any of its
Subsidiaries has ever maintained, established, sponsored, participated in or
contributed to any self-insurance plan or program.


 


3.18.                        Environmental
Matters. Neither the Company nor any of its Subsidiaries has any material
Liability under any applicable Environmental Law or under any Contract with
respect to or as a result of the presence, discharge, generation, treatment,
storage, handling, removal, disposal, transportation or Release of any
Hazardous Material.


 


3.19.                        Brokers’
and Finders’ Fees. Neither the Company nor any of its Subsidiaries has
incurred, or will incur, directly or indirectly, any liability for brokerage or
finders’ fees or agents’ commissions or any similar charges in connection with
this Agreement, the Merger or any other transaction contemplated hereby or by
the Transaction Agreements.


 


20

















 


3.20.                        Employment
Matters.


 


(a)                                  Neither
the Company nor any of its Subsidiaries is a party to any Contract regarding
collective bargaining or other Contract with or to any labor union or
association representing any employee of the Company or any of its
Subsidiaries, nor does any labor union or collective bargaining agent represent
any employee of the Company or any of its Subsidiaries. To the Company’s
knowledge, no Contract regarding collective bargaining has been requested by,
or is under discussion between management of the Company or any of its
Subsidiaries (or any management group or association of which the Company or
any of its Subsidiaries is a member or otherwise a participant) and, any group
of employees of the Company or any of its Subsidiaries nor are there any
representation proceedings or petitions seeking a representation proceeding
presently pending against the Company or any of its Subsidiaries with any labor
relations tribunal, nor are there any other current activities to organize any
employees of the Company or any of its Subsidiaries into a collective
bargaining unit. There are no unfair labor practice charges or complaints
pending or, to the Company’s knowledge, threatened against the Company or any
of its Subsidiaries that would have a Company Material Adverse Effect. During
the past three years there has not been any labor strike, slow-down, work stoppage or
arbitration involving the Company or any of its Subsidiaries, and no such labor
strike, slow-down, work stoppage or arbitration is now pending or, to the
Company’s knowledge, threatened against the Company of any of its Subsidiaries.
There are no claims for indemnification or expense reimbursement by or in
respect of any current or former officer, director or agent of the Company or
any of its Subsidiaries nor, to the knowledge of the Company, is there any
basis for such a claim.


 


(b)                                 Schedule 3.20(b) sets
forth each Company Employee Plan. Neither the Company nor any of its
Subsidiaries has any stated plan, intention or commitment to establish any new
Company Employee Plan, to modify any Company Employee Plan (except to the
extent required by Law or to conform any such Company Employee Plan to the
requirements of any Applicable Law, in each case as previously disclosed to
Parent in writing), or to enter into or terminate any Company Employee Plan.


 


(c)                                  The
Company has delivered or made available to Parent (i) correct and complete
copies of each Company Employee Plan, including all amendments thereto, (ii) the
three (3) most recent annual reports (Series 5500 and all schedules
thereto), if any, required under ERISA or the Code in connection with each
Company Employee Plan or related trust and (iii) if any Company Employee
Plan is funded, the most recent annual and periodic accounting of Company
Employee Plan assets.


 


(d)                                 The
Company and each of its Subsidiaries has performed in all material respects all
obligations required to be performed by it under each Company Employee Plan and
each Company Employee Plan has been established, maintained and operated in
accordance with its terms and in compliance with all Applicable Law, including
ERISA and the Code. Each Company Employee Plan intended to qualify under Section 401(a) of
the Code and each trust intended to qualify under Section 501(a) of
the Code is so qualified and has either received a favorable determination
letter or opinion letter from the IRS with respect to such Company Employee
Plan as to its qualified status under the Code, and nothing has occurred since
the date of the last such determination as to each Company Employee Plan which
has resulted or is likely to result in the revocation of such determination or
which requires or could require action under the compliance resolution programs
of the IRS to preserve such qualification. There are no 


 


21

















 


actions, suits or
claims pending, or, to the knowledge of the Company, threatened or anticipated
(other than routine claims for benefits) against any Company Employee Plan or
fiduciary thereto or against the assets of any Company Employee Plan. Each
Company Employee Plan can be amended, terminated or otherwise discontinued after
the Effective Time in accordance with its terms, without liability to the
Company, any of its Subsidiaries, Parent or any of its ERISA Affiliates (other
than ordinary administration expenses typically incurred in a termination
event). There are no audits, inquiries investigations or proceedings pending
or, to the knowledge of the Company, threatened by the IRS, DOL or other
Governmental Entity with respect to any Company Employee Plan. All annual
reports and other filings required by the DOL or the IRS to be made with
respect to each Company Employee Plan have been timely made.


 


(e)                                  None
of the Company, any of its Subsidiaries or any ERISA Affiliate now, or has
ever, maintained, established, sponsored, participated in, or contributed to,
any plan that is subject to Title IV of ERISA or Section 412 of the
Code. None of the Company, any of
its Subsidiaries or any ERISA Affiliate
has incurred, nor do they reasonably expect to incur, any liability with
respect to any transaction described in Section 4069 of ERISA. No Company
Employee Plan is a multiple employer plan as defined in Section 210 of
ERISA.


 


(f)                                    At
no time has the Company, any of its Subsidiaries or any ERISA Affiliate
contributed to or been requested to contribute to any “multiemployer plan,” as
defined in Section 3(37) of ERISA.


 


(g)                                 No
Company Employee Plan provides, or has any liability to provide, life
insurance, medical or other employee welfare benefits to any Employee upon his
or her retirement or termination of employment for any reason, except as may be
required by Law.


 


(h)                                 The
execution and delivery by the Company of this Agreement and any Transaction
Agreement to which the Company is a party, and the consummation of the
transactions contemplated hereby and thereby, will not conflict with or result
in any violation of or default under (with or without notice or lapse of time,
or both), or give rise to a right of termination, cancellation, modification or
acceleration of any obligation or loss of any benefit under, any Company
Employee Plan, trust or loan that could reasonably be expected to result in any
payment (whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any Employee.


 


(i)                                     The Company does not have and has not in the
past seven years had any Client that (i) is an employee benefit plan, as
defined in Section 3(3) of ERISA, or retirement account or other plan
that is or elects to be subject to Title I of ERISA or is or elects to be
subject to Section 4975 of the Code; (ii) is a Person the assets of
which are treated as including the assets of any plan described in clause (i) by
application of Section 3(42) of ERISA and/or 29 C.F.R. § 2510.3-101; (iii) is
a plan or entity that is subject to any federal, state or local law that is
substantially similar to Section 406 of ERISA or Section 4975 of the
Code (a “Similar Law”); or (iv) a Person acting on behalf of such a
plan (each such Client, plan, entity, or other person described in clauses
(i) - (iv) is referred to as an “ERISA Client”).


 


22

















 


(j)                                     The
Company has complied with the applicable requirements of ERISA, the Code
and Similar Laws with respect to each ERISA Client. Neither the
Company or any Subsidiary of the Company nor any of their respective employees
nor any Person acting on its behalf, with respect to an ERISA Client, has (i) breached
any applicable fiduciary duty under Part 4 of Title I of ERISA which could
subject it or them to liability under Sections 405 or 409 of ERISA, (ii) engaged
in any “prohibited transaction” within the meaning of Section 4975 of the
Code or ERISA for which no exemption exists under Section 4975 of the Code
and ERISA, (iii) incurred (and there is no pending or threatened
proceeding which could result in the incurrence or imposition of) any penalty,
excise tax, fee, disqualification or other similar result arising in connection
with or with respect to any ERISA Client or former client that would qualify as
an ERISA Client if it were a current client, (iv) filed or been asked to
assist in a filing under the “Voluntary Fiduciary Correction Program of the
Department of Labor” described in 71 Fed. Reg. 20,261 (April 19, 2006) or
any predecessor to that program, or (v) knowingly violated, been found by
a court of competent jurisdiction to have violated, or been accused by any
state or federal agency of violating any fiduciary obligation to an ERISA
Client.


 


(k)                                  No
basis exists such that the Company, any of its Subsidiaries or any of their
respective employees could reasonably be expected to become subject to
disqualification from holding “certain positions” pursuant to Section 411
of ERISA or any similar provision of other Law, or subject to disqualification
as a “qualified professional asset manager” within the meaning of DOL
prohibited transaction class exemption 84-14 by reason of Section I(e) or
Section I(g) of said exemption, and the consummation of the
transactions contemplated by this Agreement will not cause Parent or any of its
Affiliates to become subject to any such disqualification.


 


(l)                                     No
employee of the Company or any of its Subsidiaries is receiving benefits
pursuant to workers’ compensation legislation or is on leave of absence, including
any leave of absence by reason of disability or pursuant to the Family and
Medical Leave Act of 1993 or the Uniformed Services Employment and Reemployment
Rights Act of 1994. No present or former employee or consultant of the Company
or of any Subsidiaries of the Company, and no present or former spouse or child
of any such individual, is receiving benefits under any Company Employee Plan
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”)
or is entitled to elect COBRA coverage under any Company Employee Plan as a
result of an event occurring prior to the date of this Agreement.


 


(m)                               Each International Plan has been
maintained in substantial compliance with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and
regulations (including any special provisions relating to qualified plans where
such International Plan was intended so to qualify) and has been
maintained in good standing with applicable regulatory authorities. There has
been no amendment to, written interpretation of or announcement (whether or not
written) by the Company or any of its Subsidiaries relating to, or change in
employee participation or coverage under, any International Plan that would
increase materially the expense of maintaining such International Plan above
the level of expense incurred in respect thereof for the most recent fiscal
year ended prior to the date hereof. According to the actuarial assumptions and
valuations most recently used for the purpose of funding each International
Plan (or, if the same has no such assumptions and valuations or is unfunded,
according to actuarial assumptions and valuations in use by the Pension Benefit



 


23

















 


Guaranty Corporation on the date hereof), the total amount or value of
the funds available under such Plan to pay benefits accrued thereunder or
segregated in respect of such accrued benefits, together with any reserve or
accrual with respect thereto, exceeded the present value of all benefits
(actual or contingent) accrued as of such date of all participants and past
participants therein in respect of which the Company or any of its Subsidiaries
has or would have after the Effective Time any obligation.


 


3.21.                        Tax
Matters.


 


(a)                                  The
Company and each of its Subsidiaries has filed all material Tax Returns
required to be filed by it (“Company Tax Returns”). All such Company
Tax Returns were correct and complete in all material respects. All Company Tax
Returns have been timely filed with the appropriate tax authorities in all
jurisdictions in which such Company Tax Returns are or were required to be
filed or requests for extensions have been timely filed and any such extensions
have been granted and have not expired.


 


(b)                                 All
Taxes due and owing by the Company and each of its Subsidiaries (whether or not
shown on any Company Tax Return) have been paid or adequate reserves therefor
have been established on the Company Balance Sheet in accordance with GAAP.


 


(c)                                  The
Company each of its Subsidiaries has timely withheld proper and accurate
amounts from their employees, customers, shareholders, creditors and others
from whom they are or were required to withhold Taxes in compliance with all
Applicable Laws and has timely paid all such withheld amounts to the
appropriate taxing authorities.


 


(d)                                 All
Taxes due with respect to any completed and settled audit, examination or
deficiency Action with any taxing authority for which the Company or any of its
Subsidiaries are liable have been paid in full.


 


(e)                                  No
taxing authority has given written notice of the commencement of any audit,
examination or deficiency Action pending or threatened with respect to any
Taxes that have not been resolved and paid. The Company has delivered to Parent
correct and complete copies of all examination reports, closing agreements and
statements of deficiencies assessed against or agreed to by the Company or any
of its Subsidiaries filed or received since December 31, 2003.


 


(f)                                    Neither
the Company nor any of its Subsidiaries has consented in writing to extend the
statutory period of limitations applicable to any claim for, or the period for
the collection or assessment of, Taxes of the Company or any of its
Subsidiaries due for any taxable period.


 


(g)                                 Neither
the Company nor any of its Subsidiaries has received written notice of any
claim by any taxing authority in a jurisdiction where such Company or
Subsidiary does not file Company Tax Returns that such Company or Subsidiary is
or may be subject to taxation by that jurisdiction.


 


(h)                                 No
Liens for Taxes exist with respect to any of the assets or properties of the
Company or any of its Subsidiaries, except for Permitted Liens.


 


24

















 


(i)                                     Neither
the Company nor any of its Subsidiaries are liable, nor does the Company nor
any of its Subsidiaries have any potential liability, for the Taxes of another
taxpayer (other than the Company or any of its Subsidiaries) (i) under any
applicable Tax Law, (ii) as a transferee or successor, or (iii) by
Contract, indemnity or otherwise.


 


(j)                                     Neither
the Company nor any of its Subsidiaries is a party to or bound by any Tax
indemnity agreement, Tax sharing agreement or Tax allocation agreement.


 


(k)                                  Neither
the Company nor any of its Subsidiaries is a party to any Contract, plan,
understanding or other arrangement which, individually or collectively with
respect to any Person, could give rise to the payment of any amount that would
not be deductible by the Company or any of its Subsidiaries by reason of Section 280G
of the Code (or any corresponding provision of U.S. or non-U.S. federal, state
and local Tax law) as a result of the Transactions.


 


(l)                                     The
Company and its Subsidiaries have collected all sales, use and value added
Taxes required to be collected, and has remitted, or will remit within the time
and in the manner prescribed by law, such amounts to the appropriate taxing
authority and has furnished properly completed exemption certificates for all
exempt transactions.


 


(m)                               Neither
the signing of this Agreement nor Closing will give rise to or result in a
material liability for Tax for Parent or the Surviving Corporation.


 


(n)                                 Neither
the Company nor any of its Subsidiaries has any liability for corporate income,
franchise or similar Tax in any jurisdiction based on or measured by income or
gain for any period in which the Company or such Subsidiary filed Tax reports
in such jurisdiction on the basis that it was a partnership or other
pass-through entity for Tax purposes so that the incidence of such Tax was
properly imposed on the partner or holder of an interest in the pass-through
entity, as the case may be.


 


(o)                                 Neither
the Company nor any of its Subsidiaries has engaged in any transaction that is (i) a
registration obligation with respect to any Person under Section 6111 of
the Code or the regulations thereunder, (ii) a list maintenance obligation
with respect to any Person under Section 6112 of the Code or the
regulations thereunder, (iii) a disclosure obligation as a “reportable
transaction” under Section 6011 of the Code and the regulations
thereunder, or (iv) any similar obligation under any predecessor or
successor law or regulation or comparable provision of state or local law.


 


(p)                                 In
the past five years, neither the Company nor any of its Subsidiaries is, or has
been, a U.S. real property holding company (as defined in Section 897(c)(2) of
the Code) during the applicable period specified in Section 897(c)(1)(A)(ii) of
the Code.


 


(q)                                 In
the past five years, neither the Company nor any of its Subsidiaries has ever
been either a “controlled corporation” or a “distributing corporation” (within
the meaning of Section 355(a)(1)(A) of the Code) with respect to a
transaction that was described in, or intended to qualify as a Tax-free
transaction pursuant to Section 355 of the Code.


 


(r)                                    Since
December 31, 2004, each plan, program, arrangement or agreement that
constitutes in any part a nonqualified deferred compensation plan within
the meaning of 


 


25

















 


Section 409A
of the Code has been operated and maintained in accordance with the
requirements of IRS Notice 2005-1 and a good faith, reasonable interpretation
of Section 409A of the Code with respect to amounts deferred (within the
meaning of Section 409A of the Code) after December 31, 2004.


 


(s)                                  Each
grant of a Company Option was duly authorized no later than the date on which
the grant of such Company Option was by its terms to be effective by all
necessary corporate action, including, as applicable, approval by the Company
Board (or a duly constituted and authorized committee thereof), or a duly
authorized delegate thereof, and any required stockholder approval by the
necessary number of votes or written consents, and the award agreement governing
such grant (if any) was duly executed and delivered by each party thereto no
later than the date of grant and each such grant was made in accordance with
the terms of the Company Option Plan and Applicable Law. The per share exercise
price of each Company Option was not less than the “fair market value” of a
share of Company Common Stock on the applicable “date of grant” as such terms
are defined in Sections 421 and 422 or Section 409A of the Code, as
applicable. Each such grant was properly accounted for in all material respects
in accordance with GAAP in the financial statements (including the related
notes) of the Company and Applicable Law.


 


3.22.                        Company
Public Funds.


 


(a)                                  Schedule 3.22(a) sets
forth a complete and correct list, as of the date of this Agreement, of each
Company Public Fund. Each Company Public Fund is, and at all times required
under Applicable Law has been, duly registered with all applicable Governmental
Entities as an investment company.


 


(b)                                 Each
Company Public Fund that is a juridical entity is (i) duly organized,
validly existing and, with respect to jurisdictions that recognize the concept
of “good standing,” in good standing under the laws of the jurisdiction of its
organization, and (ii) has the requisite corporate, trust, company or
partnership power and authority to own its properties and to carry on its business
as currently conducted, and is qualified to do business in each jurisdiction
where it is required to be so qualified under Applicable Law.


 


(c)                                  The
Company, each of its Subsidiaries and, to the Company’s knowledge, each
Management Company that acts as investment adviser or sub-adviser to a Company
Public Fund has a written Investment Advisory Contract pursuant to which such
Person serves as investment adviser or sub-adviser to such Company Public Fund.


 


(d)                                 Each
Company Public Fund (including, to the Company’s knowledge, any Management
Company) currently is, and has been since January 1, 2005, operated in
compliance with Applicable Law and with its respective investment objectives,
policies and restrictions, as set forth in the applicable prospectus and
registration statement for such Company Public Fund.


 


3.23.                        Company
Private Funds.


 


(a)                                  Schedule 3.23(a) sets
forth a correct and complete list of each of the Company Private Funds. None of
the Company or its Subsidiaries acts as investment adviser, investment
sub-adviser, general partner, managing member, manager or sponsor to any pooled



 


26

















 


investment vehicle
other than one or more of the Company Funds. To the Company’s knowledge, no
Company Private Fund is, or at any time since January 1, 2005 was,
required to register as an investment company or other investment vehicle under
the Investment Company Act or the comparable regulatory regime of any other
jurisdiction.


 


(b)                                 Each
Company Private Fund possesses all Permits necessary to entitle it in all
material respects to carry on its business as it is now conducted. Each Company
Private Fund is duly qualified, licensed or registered to do business in each
jurisdiction where it is required to do so under Applicable Law, except where
failure to be so duly organized, validly existing and in good standing would
not reasonably be expected to have a Company Material Adverse Effect. All outstanding
shares or units of each Company Private Fund have been issued and sold by such
Company Private Fund in compliance with Applicable Law.


 


3.24.                        Certain
Payments. Neither the Company, any of its Subsidiaries, any Company Fund
managed by such Subsidiary or, to the Company’ knowledge, any Management
Company or Company Fund managed by any Management Company, nor, to the Company’s
knowledge, any of their respective directors, officers, employees, agents, or
representatives, or any other Person associated with or acting for or on behalf
of the Company, any Subsidiary of the Company or any Company Fund, has directly
or indirectly in relation to the business of the Company, its Subsidiaries and
the Management Companies (a) made a contribution, bribe, rebate, payoff,
influence payment, kickback, or other payment to any Person, private or public,
regardless of form, whether in money, property, or services, (i) to obtain
favorable treatment in securing business, (ii) to pay for favorable
treatment for business secured, (iii) to obtain special concessions or for
special concessions already obtained, for or in respect of the Company, any of
its Subsidiaries, any Company Fund or any Affiliate of the Company, or (iv) in
violation of Applicable Law, or (b) established or maintained any fund or
asset that has not been recorded in the books and records of the Company, its
Subsidiaries or Management Companies, as applicable.


 


3.25.                        Privacy.
The Company, its Subsidiaries and the Company Funds (to the Company’s
knowledge, with respect to any Company Fund managed by a Management Company)
are currently, and during the past five years have been, operating in
compliance with all applicable U.S. federal and state privacy laws, including,
without limitation, Title V of the Gramm-Leach-Bliley Act, and any and all
applicable regulations implementing such Act.


 


3.26.                        Indemnification.
Other than pursuant to its certificate of incorporation or bylaws, neither the
Company nor any of its Subsidiaries is a party to any material indemnification
agreement with any of its present or former managers, officers, directors,
employees or other Persons who serve or served in any other official capacity
with the Company, any Subsidiary of the Company or any other enterprise at the
request of the Company (each, a “Company Covered Person”), and there are
no claims for which any Company Covered Person would be entitled to
indemnification by the Company or any of its Subsidiaries if such provisions
were deemed in effect.


 


27

















 


ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB


 


Subject to such exceptions as are disclosed
in the disclosure letter dated the date hereof and delivered herewith to the
Company (the “Parent Schedules”) referencing the appropriate Section or
subsection of this Article IV or otherwise readily apparent as
responsive to any other Section of this Article IV, Parent and
Merger Sub hereby represent and warrant to the Company as of the date hereof
and as of the Closing as follows:


 


4.1.                              Organization
of Parent and Merger Sub. Parent is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware. Merger
Sub is a corporation duly organized, validly existing and in good standing
under the Laws of the State of Delaware. Each of Parent and Merger Sub has all
requisite power and authority to own its properties and to carry on its
business as now being conducted and is duly qualified to do business and is in
good standing in each jurisdiction in which
the conduct of its business or the ownership, leasing, holding or use of its
properties makes such qualification necessary, except such jurisdictions where
the failure to be so qualified or licensed or in good standing would not reasonably
be expected to have a material adverse effect on the ability of Parent or Merger Sub to perform its obligations
pursuant to this Agreement and the Transaction Agreements and to consummate the
Merger and the transactions contemplated hereby and thereby in a timely manner
(a “Parent Material Adverse Effect”).


 


4.2.                              Subsidiaries.
Except for Merger Sub, Parent does not own, directly or indirectly, any capital
stock of or any other Equity Securities in, or control, directly or indirectly,
any other Person or any Subsidiary, and Parent is not directly or indirectly, a
party to, member of or participant in any partnership, joint venture or similar
business entity.


 


4.3.                              Capitalization.


 


(a)                                  Schedule 4.3(a) sets
forth (i) the authorized Equity Securities of Parent, which consist solely
of Parent Common Stock and Parent Preferred Stock, (ii) the number of
Equity Securities of Parent that are issued and outstanding, (iii) the
number of Equity Securities held in treasury, and (iv) the number of
Equity Securities of Parent that are reserved for issuance, in each case, as of
the date hereof.


 


(b)                                 All
of the outstanding shares of Parent Common Stock are duly authorized, validly
issued, fully paid and non-assessable and were not issued in violation of, and
are not subject to, any preemptive rights. Except for the rights granted under
this Agreement, there are no outstanding options, warrants, calls, demands,
stock appreciation rights, Contracts or other rights of any nature to purchase,
obtain or acquire or otherwise relating to, or any outstanding securities or
obligations convertible into or exchangeable for, or any voting agreements with
respect to, any shares of Parent Capital Stock or any other securities of
Parent.


 


(c)                                  As
of the Closing, the Parent Shares to be issued pursuant to this Agreement will
be duly authorized and when issued and delivered in accordance with the terms
of this Agreement will be validly issued, fully paid, non-assessable, free and
clear of all Liens of any kind, and not issued in violation of, and not subject
to, any preemptive right.


 


28

















 


(d)                                 Schedule 4.3(d) sets
forth (i) the authorized Equity Securities of Merger Sub, (ii) the
number of Equity Securities of Merger Sub that are issued and outstanding, (iii) the
number of Equity Securities held in treasury, and (iv) the number of
Equity Securities of Merger Sub that are reserved for issuance, in each case,
as of the date hereof and as of the Closing Date.


 


(e)                                  All
of the outstanding shares of common stock of Merger Sub are duly authorized,
validly issued, fully paid and non-assessable and were not issued in violation
of, and are not subject to, any preemptive rights. Except for the rights
granted under this Agreement, there are no outstanding options, warrants,
calls, demands, stock appreciation rights, Contracts or other rights of any
nature to purchase, obtain or acquire or otherwise relating to, or any
outstanding securities or obligations convertible into or exchangeable for, or
any voting agreements with respect to, any shares of capital stock of Merger
Sub or any other securities of Merger Sub.


 


4.4.                              Authority.


 


(a)                                  Each
of Parent and Merger Sub has all requisite corporate power and authority to
execute and deliver this Agreement and each of the Transaction Agreements to be
executed and delivered by it and, subject to Section 4.6, to perform all
of its obligations under this Agreement and each of the Transaction Agreements.
The execution, delivery and performance by each of Parent and Merger Sub of
this Agreement and each of the Transaction Agreements to which it is a party
and the consummation of the transactions contemplated to be performed by it
under this Agreement and the Transaction Agreements to which it is a party have
been, subject to Section 4.6, duly authorized by all necessary and
proper corporate action on the part of each of Parent and Merger Sub.


 


(b)                                 This
Agreement and each of the Transaction Agreements to be executed and delivered
by each of Parent and Merger Sub will be duly executed and delivered by Parent
and Merger Sub and, when so executed and delivered, will constitute the legal,
valid and binding obligation of each of Parent and Merger Sub, enforceable
against them in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar Laws relating to or affecting the enforcement of
creditors’ rights in general and by general principles of equity.


 


4.5.                              No
Conflict. Assuming that the matters referred to in Section 4.6
are satisfied, none of the execution, delivery or performance by Parent or
Merger Sub of this Agreement or any of the Transaction Agreements or the
consummation by Parent or Merger Sub of the Transactions does or will, with or
without the giving of notice or the lapse of time or both, (a) result in
the creation of any Lien upon any of the properties or assets of Parent or
Merger Sub (except for Permitted Liens) or (b) conflict with, or result in
a breach or violation of or a default under, or give rise to a right of
amendment, termination, cancellation or acceleration of any obligation or to a
loss of a benefit under (i) Parent’s or Merger Sub’s Certificate of
Incorporation or Bylaws, (ii) any Material Contract of Parent or Merger
Sub or (iii) any Law, License or Permit or other requirement to which
Parent or Merger Sub or any of their respective properties or assets are
subject, except, in the case of (a), (b)(ii) or (b)(iii) for those
which would not have a Parent Material Adverse Effect.


 


29

















 


4.6.                              Consents.
No consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, or notice to any Governmental Entity or other
Person is required by, or with respect to, Parent or Merger Sub in connection
with the execution and delivery of this Agreement and the Transaction
Agreements to which Parent or Merger Sub is a party or the consummation of the
transactions contemplated hereby and thereby, or for any Contract of Parent or
Merger Sub to remain in full force and effect without limitation, modification
or alteration after the Effective Time so as to preserve all material rights of
and benefits to, Parent and Merger Sub, as the case may be, under such
Contracts from the Effective Time, except for (i) the approval of the
stockholders of Parent and Merger Sub; (ii) the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware; (iii) notices
and filings as may be required under Antitrust Laws; (iv) any filings
that are required under the U.S., state and foreign securities laws; and (v) such
consents, waivers, approvals, orders, authorizations, registrations,
declarations or filings the failure of which to obtain or make, individually or
in the aggregate, would not reasonably be expected to have or result in a
Parent Material Adverse Effect.


 


4.7.                              SEC
Filings; Financial Statements.


 


(a)                                  Parent
has made available to the Company a correct and complete copy of each report,
registration statement and definitive proxy statement filed by Parent with the
SEC (the “Parent SEC Reports”), which are all the forms, reports and
documents required to be filed by Parent with the SEC prior to the date of this
Agreement and which were filed on a timely basis. As of their respective dates
the Parent SEC Reports: (i) were prepared in accordance and complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of
the SEC thereunder applicable to such Parent SEC Reports, and (ii) did not
at the time they were filed (and if amended or superseded by a filing prior to
the date of this Agreement then on the date of such filing and as so amended or
superseded) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.


 


(b)                                 Each
set of financial statements (including, in each case, any related notes
thereto) contained in the Parent SEC Reports (the “Parent Financial
Statements”), including each Parent SEC Report filed after the date hereof
until the Closing, complied or will comply as to form in all material
respects with the published rules and regulations of the SEC with respect
thereto, was or will be prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited statements, do not
contain footnotes) and each fairly presents or will fairly present in all
material respects the financial position of Parent at the respective dates
thereof and the results of its operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were, are or
will be subject to normal adjustments as would not individually or in the
aggregate reasonably be expected to have a Parent Material Adverse Effect.


 


(c)                                  Parent
has in place systems and processes that are (i) designed to (A) provide
reasonable assurances regarding the reliability of the Parent Financial
Statements and (B) accumulate and communicate to Parent’s principal
executive officer and principal financial officer in a timely manner the type
of information that is required to be disclosed in the Parent Financial
Statements, and (ii) customary and adequate for a public company. Neither
Parent nor 


 


30

















 


Merger Sub nor, to
Parent’s knowledge, any Employee, auditor, accountant or representative of
Parent or Merger Sub has received or otherwise had or obtained knowledge of any
complaint, allegation, assertion or claim, whether written or oral, regarding
the inadequacy of such systems and processes or the accuracy of the Parent
Financial Statements. To Parent’s knowledge, there have been no instances of
fraud, whether or not material, during any period covered by the Parent
Financial Statements.


 


(d)                                 During
the periods covered by the Parent Financial Statements, Parent’s external
auditor with respect to such Parent Financial Statements was independent of
Parent and its management. Schedule 4.7(d) lists each report
by Parent’s external auditors to Parent’s board of directors, or any committee
thereof, or Parent’s management concerning any of the following and pertaining
to any period covered by the Parent Financial Statements:  critical accounting policies; internal
controls; significant accounting estimates or judgments; alternative accounting
treatments; and any required communications with Parent’s board of directors,
or any committee thereof, or with management of Parent.


 


(e)                                  Parent
is in compliance in all material respects with the applicable listing and
corporate governance rules of AMEX.


 


4.8.                              No
Undisclosed Liabilities. Neither Parent nor Merger Sub has on the date of
this Agreement:  (i) any liability,
indebtedness, obligation, expense, claim, deficiency, guaranty or endorsement
of any type, whether accrued, absolute, contingent, matured, unmatured or other
(whether or not required to be reflected in the Parent Financial Statements in
accordance with GAAP but excluding future obligations to perform pursuant
to the terms of the Contracts in accordance with the express terms of such
Contracts), that (A) exceeds $100,000
and (B) has not (1) been reflected in the Parent Financial
Statements, (2) arisen in the ordinary course of Parent’s business
consistent with past practices or (3) as set forth in this Agreement or
any of the Transaction Agreements since the Balance Sheet Date, or (ii) any
“off-balance sheet arrangements” (as such term is defined in Item 303(a)(4) of
Regulation S-K promulgated under the Exchange Act).


 


4.9.                              Absence
of Certain Changes.


 


(a)                                  No
conditions, circumstances or facts exist, and since the Balance Sheet Date,
there have not been any events, occurrences, changes, developments or
circumstances, which would have a Parent Material Adverse Effect.


 


(b)                                 Parent
and Merger Sub have not since the Balance Sheet Date and prior to the date of
this Agreement taken any action of the type referred to in Section 5.1,
except in the ordinary course of business consistent with past practices.


 


4.10.                        Business
Activities. Since its organization, Parent has not conducted any business
activities other than activities directed toward the accomplishment of a
business combination. Except as set forth in the Parent Charter, there is no
agreement, commitment, judgment, injunction, order or decree binding upon
Parent or to which Parent is a party which has or could reasonably be expected
to have the effect of prohibiting or materially impairing any business practice
of Parent, any acquisition of property by Parent or the conduct of business by
Parent as 


 


31

















 


currently
conducted other than such effects as would not individually or in the aggregate
reasonably be expected to have a Parent Material Adverse Effect.


 


4.11.                        Title
to Properties. Parent does not own or lease any real property or personal
property. There are no options or other contracts under which Parent has a
right or obligation to acquire or lease any interest in real property or
personal property.


 


4.12.                        Intellectual
Property. Parent does not own, license or otherwise have any right, title
or interest in any Intellectual Property or Registered Intellectual Property.


 


4.13.                        Agreements,
Contracts and Commitments.


 


(a)                                  Except
as set forth in the Parent SEC Reports filed prior to the date of this
Agreement, there are no contracts, agreements, leases, mortgages, indentures,
notes, bonds, liens, licenses, permits, franchises, purchase orders, sales
orders or other understandings, commitments or obligations (including without
limitation outstanding offers or proposals) of any kind, whether written or
oral, to which Parent or Merger Sub is a party or by or to which any of the
properties or assets of Parent may be bound, subject or affected, which
either (i) creates or imposes a liability greater than $50,000, or (ii) may not
be cancelled by Parent on less than 30 days’ or less prior notice (“Parent
Contracts”). All Parent Contracts are set forth in Schedule 4.13(a) other
than those that are exhibits to the Parent SEC Reports.


 


(b)                                 Each
Parent Contract is in full force and effect and is valid, binding and enforceable in accordance with its terms
and is not in default thereunder, nor to the knowledge of Parent is any party
obligated to Parent pursuant to any such Contract in default thereunder. Parent
or Merger Sub is in compliance with and has not breached, violated or defaulted
under, or received notice that it has breached, violated or defaulted under,
any of the terms or conditions of any such Parent Contract, nor does Parent
have knowledge of any event or occurrence that would reasonably be expected to
constitute such a breach, violation or default (with or without the lapse of
time, giving of notice or both). Parent has made available to the Company
accurate and complete copies of all Parent Contracts.


 


4.14.                        Change
of Control Payments to Employees. Schedule 4.14 sets forth (a) each
plan or Contract of Parent or Merger Sub pursuant to which more than $100,000 may become
payable (whether currently or in the future) to any Employee as a result of or
in connection with the Merger or any of the other transactions contemplated by
this Agreement or the Transaction Agreements and (b) a summary of the nature and amounts that may become
payable pursuant to each such plan or Contract.


 


4.15.                        Interested
Party Transactions.


 


(a)                                  To
Parent’s knowledge, no officer or director of Parent or Merger Sub (nor any
ancestor, sibling, descendant or spouse of any of such Persons, or any trust,
partnership or corporation in which any of such Persons has or has had an
economic interest in excess of five percent (5%) of the ownership interests
therein), has, directly or indirectly, (i) an economic interest in any
Person which at any time since January 1, 2005 has furnished or sold
services or products that Parent or Merger Sub furnishes or sells, or proposes
to furnish or sell, (ii) an economic interest in any Person that purchases
from or sells or furnishes to, Parent or Merger 


 


32

















 


Sub, any goods or services or (iii) a beneficial
interest in any Contract to which Parent or Merger Sub is a party or by which
they or their properties are bound; provided, however, that
ownership of debt or equity interests not exceeding one percent (1%) of the
outstanding voting stock of an entity shall not be deemed an “economic interest
in any entity” for purposes of this Section 4.15.


 


(b)                                 There
are no receivables of Parent or Merger Sub owing by any Employee or any
consultant to Parent or Merger Sub (or any ancestor, sibling, descendant, or
spouse of any such Persons, or any trust, partnership, or corporation in which
any of such Persons has an economic interest), other than advances in the
ordinary and usual course of business for reimbursable business expenses (as
determined in accordance with Parent’s established employee reimbursement policies
and consistent with past practice). None of the stockholders of Parent has
agreed to, or assumed, any obligation or duty to guaranty or otherwise assume
or incur any obligation or liability of Parent or Merger Sub.


 


4.16.                        Compliance
with Laws. Parent has complied with and is in material compliance with, and
has not violated and is not in violation of, and has not received any notices
of violation with respect to, any Law. Parent has not received any written
notice from any Governmental Entity or any other Person regarding any actual,
alleged, possible or potential violation of or failure to comply with any Law.


 


4.17.                        Litigation.
There is no action, suit, proceeding or investigation of any nature pending or,
to Parent’s knowledge, threatened against Parent, any of its properties or
assets, nor, to the knowledge of Parent, is there any reasonable basis
therefor.


 


4.18.                        Insurance.
Except for directors’ and officers’ liability insurance, Parent does not
maintain any insurance policies.


 


4.19.                        Brokers’
and Finders’ Fees. Neither Parent nor Merger Sub has incurred, or will
incur, directly or indirectly, any liability for brokerage or finders’ fees or
agents’ commissions or any similar charges in connection with this Agreement,
the Merger or any other transaction contemplated hereby or by the Transaction
Agreements.


 


4.20.                        Taxes.


 


(a)                                  Parent
has filed all material Tax Returns required to be filed by it (“Parent Tax Returns”).
All such Parent Tax Returns were correct and complete in all material respects.
All Parent Tax Returns have been timely filed with the appropriate tax
authorities in all jurisdictions in which such Parent Tax Returns is or was
required to be filed or requests for extensions have been timely filed and any
such extensions have been granted and have not expired.


 


(b)                                 All
Taxes due and owing by the Parent (whether or not shown on any Parent Tax
Return) have been paid or adequate reserves therefor have been established on
Parent’s balance sheets included in the audited financial statements for the
most recent fiscal year end in accordance with GAAP.


 


(c)                                  Parent
has timely withheld proper and accurate amounts from its employees, customers,
shareholders, creditors and others from whom its is or was required to 


 


33

















 


withhold Taxes in
compliance with all Applicable Laws and has timely paid all such withheld
amounts to the appropriate taxing authorities.


 


(d)                                 All
Taxes due with respect to any completed and settled audit, examination or
deficiency Action with any taxing authority for which Parent is liable have
been paid in full.


 


(e)                                  No
taxing authority has given written notice of the commencement of any audit,
examination or deficiency Action pending or threatened with respect to any
Taxes that have not been resolved and paid. Parent has delivered to the Company
correct and complete copies of all examination reports, closing agreements and
statements of deficiencies assessed against or agreed to by Parent filed or
received since December 31, 2003.


 


(f)                                    Parent
has not consented in writing to extend the statutory period of limitations
applicable to any claim for, or the period for the collection or assessment of,
Taxes of Parent due for any taxable period.


 


(g)                                 Parent
has not received written notice of any claim by any taxing authority in a
jurisdiction where Parent does not file Parent Tax Returns that Parent is or may be
subject to taxation by that jurisdiction.


 


(h)                                 No
Liens for Taxes exist with respect to any of the assets or properties of
Parent, except for Permitted Liens.


 


(i)                                     Parent
is not liable, and Parent does not have any potential liability, for the Taxes
of another taxpayer (other than Parent or any of its Subsidiaries) (i) under
any applicable Tax Law, (ii) as a transferee or successor, or (iii) by
Contract, indemnity or otherwise.


 


(j)                                     Parent
has collected all sales, use and value added Taxes required to be collected,
and has remitted, or will remit within the time and in the manner prescribed by
law, such amounts to the appropriate taxing authority and has furnished
properly completed exemption certificates for all exempt transactions.


 


(k)                                  Parent
has no liability for corporate income, franchise or similar Tax in any
jurisdiction based on or measured by income or gain for any period in which Parent
filed Tax reports in such jurisdiction on the basis that it was a partnership
or other pass-through entity for Tax purposes so that the incidence of such Tax
was properly imposed on the partner or holder of an interest in the
pass-through entity, as the case may be.


 


(l)                                     Neither
the signing of this Agreement nor Closing will give rise to or result in a
material liability for Tax for the Company or any of its Subsidiaries.


 


(m)                               Parent
has not engaged in any transaction that is (i) a registration obligation
with respect to any Person under Section 6111 of the Code or the
regulations thereunder, (ii) a list maintenance obligation with respect to
any Person under Section 6112 of the Code or the regulations thereunder, (iii) a
disclosure obligation as a “reportable transaction” under Section 6011 of
the Code and the regulations thereunder, or (iv) any similar obligation 


 


34

















 


under any
predecessor or successor law or regulation or comparable provision of state or
local law.


 


(n)                                 Parent
is not, or has not been, a U.S. real property holding company (as defined in Section 897(c)(2) of
the Code) during the applicable period specified in Section 897(c)(1)(A)(ii) of
the Code.


 


(o)                                 In
the past five years, Parent has never been either a “controlled corporation” or
a “distributing corporation” (within the meaning of Section 355(a)(1)(A) of
the Code) with respect to a transaction that was described in, or intended to
qualify as a Tax-free transaction pursuant to Section 355 of the Code.


 


4.21.                        Board
Approval. The board of directors of Parent (including any required
committee or subgroup of the board of directors of Parent) has, as of the date
of this Agreement (i) determined that the merger is fair to, and in the
best interests of Parent and its stockholders, and (ii) duly approved this
Agreement and the transactions contemplated hereby.


 


4.22.                        Trust
Fund. As of the date hereof and at the Closing Date, Parent has and will
have no less than $100.0 million (the “Trust Fund”) invested in United
States Government securities or in money market funds meeting certain
conditions under Rule 2a-7 promulgated under the Investment Company Act in
a trust account (the “Trust Account”) administered by The American Stock
Transfer and Trust Company (the “Trustee”) pursuant to the Investment
Management Trust Agreement, dated as of April 17, 2007, between Parent and
the Trustee (the “Trust Agreement”), less (i) any Taxes paid or (ii) working
capital draws made in accordance with the Trust Agreement.


 


4.23.                        Indemnification.
Other than pursuant to its certificate of incorporation or bylaws, neither
Parent nor Merger Sub is a party to any material indemnification agreement with
any of its present or former managers, officers, directors, employees or other
Persons who serve or served in any other official capacity with Parent, Merger
Sub or any other enterprise at the request of Parent (each, a “Parent
Covered Person”), and there are no claims for which any Parent Covered
Person would be entitled to indemnification by Parent or Merger Sub if such
provisions were deemed in effect.


 


ARTICLE V

COVENANTS


 


5.1.                              Conduct.
(a)  From the date hereof until the earlier of the Closing Date and the
termination of this Agreement in accordance with its terms, each of Parent and
the Company shall, and shall cause its Subsidiaries to, operate in the ordinary
course of business. Without limiting the generality of the foregoing, from the
date hereof until the Closing, except as contemplated hereby or as set forth in
Schedule 5.1, without the written consent of either the Company or
Parent, as the case may be (any request of such consent to be considered
in good faith), each of Parent and the Company shall not and shall cause its
Subsidiaries to not, take or agree or resolve to take any of the following
actions except in the ordinary course of business and consistent with past
practice:


 


35

















 


(i)                                     incur,
assume or otherwise become liable for any additional Debt (including by way of
guarantee or the issuance and sale of debt securities or rights to acquire debt
securities) or enter into or modify any Contract with respect to the foregoing
other than, in the case of the Company, for the purposes permitted by this Section 5.1;


 


(ii)                                  sell,
lease, transfer, license, mortgage, pledge or otherwise dispose of or encumber,
except for any Permitted Liens, any of the material properties or assets of
itself or its Subsidiaries;


 


(iii)                               (A) incur
or commit to any material capital expenditures, obligations or liabilities; (B) acquire
or agree to acquire by merging or consolidating with, or acquire or agree to
acquire by purchasing a substantial portion of the Equity Securities or assets
of, or in any other manner, any business or Person; (iv) wind up,
liquidate or dissolve; or (v) materially breach any provision of this
Agreement;


 


(iv)                              change
its auditor or change its methods of accounting in effect as of the date hereof
except as required by changes in GAAP;


 


(v)                                 (A) make
any material tax election, (B) amend any material Tax Return, (C) settle
or compromise any material income Tax liability, Tax claim or Tax assessment, (D) enter
into any closing agreement respecting a material amount of Taxes, (E) surrender
any right to claim a material Tax refund, (F) fail to make the payments or
consent to any extension or waiver of the limitations period applicable to any
material Tax claim or assessment, (G) adopt or change any of its methods
of accounting with respect to Taxes; or (H) change its fiscal year;


 


(vi)                              (A) settle
or compromise, or agree to settle or compromise, any Legal Action on terms
which require it or any of its Subsidiaries to take any material action or
assume any material liability or forego any material right or opportunity or (B) waive
or release any material right or claim of itself or any of its Subsidiaries
other than in the ordinary course or as disclosed in Schedule 5.1;


 


(vii)                           (A) enter
into, amend, modify or renew any Contract regarding employment, consulting,
severance or similar arrangements with any of its directors or senior officers,
or grant any material salary, wage or other increase materially in compensation
or increase materially any employee benefit (including incentive, profit
sharing or bonus payments, (B) grant any severance or termination pay to
any senior officers except pursuant to written agreements or severance policies
in effect of the date hereof and as disclosed in the applicable Schedules or (iii) adopt
or amend any Company Employee Plan;


 


(viii)                        enter into
or materially modify any material transaction or arrangement with, or for the
benefit of any of its Affiliates who control it or any of its directors, former
directors, officers or shareholders of any such Affiliate;


 


(ix)                                take
any action that would reasonably be expected to constitute a Company Material
Adverse Effect or Parent Material Adverse Effect, as applicable; or


 


36

















 


(x)                                   sell,
lease, license or otherwise dispose of any of the material assets or properties
of itself or any of its Subsidiaries other than in the ordinary course of
business.


 


(b)                                 The
foregoing notwithstanding, during the period from the date of this Agreement
and until the earlier of the Closing Date and the termination of this Agreement
in accordance with its terms, except as (x) expressly contemplated by this
Agreement, (y) set forth in Schedule 5.1 to the Parent
Schedules or the Company Schedules or (z) consented to in writing by
either the Company or Parent, as the case may be (any request of such
consent to be considered in good faith), each of Parent and the Company shall
not:


 


(i)                                     amend
the Constitutional Documents of itself or any of its Subsidiaries;


 


(ii)                                  make
any distribution or declare, pay or set aside any dividend with respect to, or
split, combine, redeem, reclassify, purchase or otherwise acquire directly, or
indirectly, any equity interests or shares of capital stock of, or other equity
or voting interest in itself or any of its Subsidiaries; or


 


(iii)                               authorize
for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver
(i) any equity interests or capital stock of or other equity or voting
interest in itself or any of its Subsidiaries, or (ii) security
convertible into, exchangeable for or evidencing the right to subscribe for or
acquire either (A) any equity interests or shares of capital stock of, or
other equity or voting interest in, or (B) any securities convertible
into, exchangeable for, or evidencing the right to subscribe for or acquire,
any shares of the capital stock of, or other equity or voting interest in
itself or any of its Subsidiaries except for equity interests issued upon
exercise of currently outstanding Company Options or Company Warrants.


 


(c)                                  The
foregoing notwithstanding, the provisions of this Section 5.1 shall
not be interpreted as requiring the Company to cause Alternative
Investment Partners, LLC to obtain consent from the Company or any other Person (including Parent) with
respect to any action that Alternative Investment Partners, LLC otherwise may take
without the consent of the Company under the terms of the limited liability
company agreement of Alternative Investment Partners, LLC or requiring the Company to cause Capintro
Partners Limited to obtain consent from the Company or any other Person
(including Parent) with respect to any action that it otherwise can take
without the consent of the Company or Asset Alliance International (UK) Limited
under the terms of the agreement between Capintro Partners Limited and Asset
Alliance International (UK) Limited.


 


5.2.                              Authorizations.
To the extent that the affirmative Consent of any Person is necessary to effect
the Merger, the Company or Parent, as the case may be, shall use its
commercially reasonable efforts to cause such third party to provide or obtain
such affirmative Consent.


 


5.3.                              No
Solicitation. (a) Until the earlier of the Effective Time and the date
of termination of this Agreement pursuant to Section 7.1 hereof,
without the prior written consent of Parent in its sole discretion, the Company
shall not (nor shall the Company permit any of its 


 


37

















 


Subsidiaries or
any of their respective Employees, Stockholders, advisors, agents,
representatives or Affiliates to), directly or indirectly, take any of the
following actions with any Person other than Parent and its designees:  (i) solicit, encourage, seek, entertain,
support, assist, initiate or participate in any inquiry, negotiations or
discussions, or enter into any agreement, with respect to any offer or proposal
to acquire all or any material part of the business, assets or
technologies of the Company or any of its Subsidiaries, or any amount of the
Company Capital Stock or any Subsidiary Securities (whether or not already
outstanding), whether by merger, purchase of assets, purchase of securities,
tender offer, license or otherwise, or effect any such transaction (a “Company
Proposal”), (ii) disclose any confidential information to any Person
concerning the business, technologies or properties of the Company or its
Subsidiaries (other than in the ordinary course of business in connection with
sales of its products), or afford to any Person access to their respective
properties, technologies, books or records, not customarily afforded such
access, (iii) assist or cooperate with any Person to make any Company
Proposal, or (iv) enter into any agreement with any Person with respect to
a Company Proposal. Except with the prior written consent of Parent in its sole
discretion, the Company shall immediately cease and cause to be terminated any
such negotiations, discussions or agreements (other than with Parent) that are
the subject matter of clause (i), (ii), (iii) or (iv) above. In
the event that the Company or any of the Company’s Affiliates shall receive, prior to the Effective Time or the
termination of this Agreement, any offer, proposal, or request, directly or
indirectly, with respect to a Company Proposal, or any request for disclosure
or access as referenced in clause (ii) above, except with the prior
written consent of Parent in its sole discretion, the Company shall immediately
(A suspend any discussions with such offeror or Person with regard to such
offer, proposal, or request and (B) notify Parent thereof, including
information as to the material terms of the Company Proposal and the identity
of the Person making such Company Proposal or request.


 


(b)                                 Until
the earlier of the Effective Time and the date of termination of this Agreement
pursuant to Section 7.1 hereof, Parent shall not (nor shall Parent
permit any of its Subsidiaries or any of their respective Employees,
stockholders, advisors, agents, representatives or Affiliates to), directly or
indirectly, take any of the following actions with any Person: (i) solicit,
encourage, seek, entertain, support, assist, initiate or participate in any
inquiry, negotiations or discussions, or enter into any agreement, with respect
to any offer or proposal to acquire all or any material part of the
business, assets or technologies of any Person (other than the Company), or any
amount of the capital stock of any Person (other than the Company) (whether or
not already outstanding), whether by merger, purchase of assets, purchase of
securities, tender offer, license or otherwise, or effect any such transaction
(a “Parent Proposal”), (ii) receive any confidential information
from any Person (other than the Company) concerning the business, technologies
or properties of such Person (other than the Company and other than in the
ordinary course of business in connection with sales of its products), (iii) assist
or cooperate with any Person to make any Parent Proposal, or (iv) enter
into any agreement with any Person with respect to a Parent Proposal. Parent
shall immediately cease and cause to be terminated any such negotiations,
discussions or agreements (other than with the Company) that are the subject
matter of clause (i), (ii), (iii) or (iv) above. In the event
that Parent or any of the Parent’s Affiliates
shall receive, prior to the Effective Time or the termination of this
Agreement, any offer, proposal, or request, directly or indirectly, with
respect to a Parent Proposal, Parent shall immediately suspend any discussions
with such Person with regard to such offer, proposal, or request.


 


38
















 


(c)                                  The
parties hereto agree that irreparable damage would occur in the event that the
provisions of this Section 5.3 were not performed in accordance
with their specific terms or were otherwise breached.  It is accordingly agreed by the parties
hereto that the Company or Parent, as the case may be, shall be entitled to an
immediate injunction or injunctions, without the necessity of proving the
inadequacy of money damages as a remedy and without the necessity of posting
any bond or other security, to prevent breaches of the provisions of this Section 5.3
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which such Person may be entitled at law or in equity.  Without limiting the foregoing, it is
understood that any violation of the restrictions set forth above by (A) any
Employee, Stockholder, agent, advisor, representative or Affiliate of the
Company shall be deemed to be a breach of this Agreement by the Company and (B) any
employee, stockholder, agent, advisor, representative or Affiliate of Parent
shall be deemed to be a breach of this Agreement by Parent.


 


5.4.                              Compliance
with Obligations.  Prior to the
Closing Date, each of Parent and the Company shall and shall cause its
Subsidiaries to comply in all material respects with (a) all Applicable
Laws, (b) all Contracts by which it, its properties or its assets may be
bound, and (c) all decrees, orders, writs, injunctions, judgments, statutes,
rules and regulations applicable to it, its Subsidiaries and its and their
properties or assets.


 


5.5.                              Notices
of Certain Events.  From the date
hereof until the Closing Date, each of Parent and the Company shall promptly
notify the other 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 Merger;


 


(b)                                 any
notice or other communication from any Governmental Entity in connection with
itself or any of its Subsidiaries or the Transactions;


 


(c)                                  the
occurrence of a Company Material Adverse Effect or Parent Material Adverse
Effect, as applicable;


 


(d)                                 any
event of default (as defined in the applicable Contract) which has occurred
under any Material Contract; and


 


(e)                                  any
Legal Actions commenced or, to it’s knowledge, threatened against itself or any
of its Subsidiaries or relating to or involving itself or any of its
Subsidiaries, and promptly notify the other of any other Legal Action commenced
or threatened, that relate to the consummation of the Transactions.


 


5.6.                              Stockholders’
Meetings; Proxy Statements.


 


(a)                                  The
Company shall take all action necessary under Applicable Law to call, give
notice of and hold a meeting of the holders of Company Capital Stock to vote on
a proposal to adopt this Agreement and the transactions contemplated hereby
(the “Company
Stockholders’ Meeting”), and shall submit such proposal to such
holders at the Company Stockholders’ Meeting. 
The Company (in consultation with Parent) shall set a record date for
Persons entitled to notice of, and to vote at, the Company Stockholders’
Meeting, which shall be held no later


 


39

















 


than twenty five (25) days after the Registration
Statement has been declared effective under the Securities Act.  The Company shall ensure that all proxies
solicited in connection with the Company Stockholders’ Meeting are solicited in
compliance with Applicable Law.


 


(b)                                 The Company shall submit the proposal
at the Company Stockholders’ Meeting pursuant to a proxy statement (the “Company Proxy
Statement”).  Subject to the
terms of this Agreement and subject to its fiduciary obligations under
Applicable Law, the Board of Directors of the Company shall recommend to the
Company’s stockholders the approval of such matters and shall use reasonable
best efforts to solicit such approval.


 


(c)                                  As
soon as practicable following the date of this Agreement, Parent shall, with
the cooperation of the Company, prepare and file with the SEC a proxy statement
or consent solicitation statement relating to the Parent Stockholder Approval
(the “Parent Proxy Statement” and, together with the Company Proxy
Statement, the “Proxy Statement”) in preliminary form, and each of the
Company and Parent shall use its commercially reasonable efforts to respond as
promptly as practicable to any comments of the SEC with respect thereto. Parent
shall use its reasonable best efforts to (i) prepare and file with the SEC
the definitive Proxy Statement, (ii) cause the Proxy Statement and the
prospectus to be included in the Registration Statement, including any
amendment or supplement thereto, and (iii) cause the definitive Proxy
Statement to be mailed to Parent’s stockholders as promptly as practicable
after the Registration Statement is declared effective by the SEC.  Parent shall also take any action required to
be taken under any applicable state securities laws in connection with the
issuance of Parent Common Stock in the Merger. 
The parties shall notify each other promptly of the receipt of any
comments from the SEC or its staff and of any request by the SEC or its staff
for amendments or supplements to the Proxy Statement or for additional
information and shall supply each other with copies of all correspondence
between such party or any of its representatives, on the one hand, and the SEC
or its staff, on the other hand, with respect to the Proxy Statement or the
Merger.


 


(d)                                 As
soon as practicable following the date of this Agreement, Parent, with the cooperation
of the Company, shall prepare and file with the SEC a registration statement on
Form S-4 pursuant to which the Parent Shares to be issued will be
registered (as supplemented or amended, the “Registration Statement”),
in which the Proxy Statement shall be included as part of the prospectus, and
the parties hereto shall use all reasonable efforts to have the Registration
Statement declared effective by the SEC as promptly as practicable after such
filing.  Parent shall obtain and furnish
the information required to be included in the Registration Statement and,
after consultation with the Company, respond promptly to any comments made by
the SEC with respect to the Registration Statement.  Parent shall allow the Company’s full
participation in the preparation of the Registration Statement and any
amendment or supplement thereto and shall consult with the Company and its
advisors concerning any comments from the SEC with respect thereto.


 


(e)                                  If,
prior to the Effective Time, any event occurs with respect to the Company, or
any change occurs with respect to other information supplied by the Company for
inclusion in the Proxy Statement or Registration Statement, which is required
to be described in an amendment of, or a supplement to, the Proxy Statement or
Registration Statement, the Company shall promptly notify Parent of such event,
and the Company and Parent shall


 


40

















 


cooperate in the prompt filing with the SEC of any
necessary amendment or supplement to the Proxy Statement or Registration
Statement and, as required by Law, in disseminating the information contained
in such amendment or supplement to Parent’s stockholders.


 


(f)                                    If,
prior to the Effective Time, any event occurs with respect to Parent or Merger
Sub, or any change occurs with respect to other information supplied by Parent
for inclusion in the Proxy Statement or Registration Statement, which is
required to be described in an amendment of, or a supplement to, the Proxy
Statement or Registration Statement, Parent shall promptly notify the Company
of such event, and Parent and the Company shall cooperate in the prompt filing
with the SEC of any necessary amendment or supplement to the Proxy Statement or
Registration Statement and, as required by Law, in disseminating the
information contained in such amendment or supplement to Parent’s stockholders.


 


(g)                                 Parent
shall, promptly after the date hereof, take all action necessary to duly call,
give notice of, convene and hold a meeting of its stockholders (the “Parent
Stockholders’ Meeting”) as soon as practicable after the
Registration Statement is declared effective. 
Parent shall consult with the Company on the date for the Parent
Stockholders’ Meeting.  Parent shall use
its commercially reasonable efforts to cause the Proxy Statement to be mailed
to the Parent’s stockholders as soon as practicable after the Registration
Statement is declared effective.  Subject
to the terms of this Agreement and subject to its fiduciary obligations under
Applicable Law, the Board of Directors of Parent shall recommend to Parent’s
stockholders the approval of such matters and shall use reasonable best efforts
to solicit such approval.


 


(h)                                 None
of the information supplied or to be supplied by the Company for inclusion or
incorporation by reference in the Proxy Statement will, at the date it is first
mailed to the Parent stockholders or at the time of the Parent Stockholders’
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not misleading.  None of the information
supplied or to be supplied by the Company for inclusion in the Registration
Statement shall, at the time such document is filed, at the time amended or
supplemented and at the time the Registration Statement is declared effective
by the SEC, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.


 


(i)                                     The
Company (i) shall use reasonable best efforts to deliver to Parent within
thirty (30) days after the date of this Agreement historical unaudited and, to
the extent required, audited financial statements of the Company necessary for
the Parent Proxy Statement (provided, that in the case of audited financial
statements as of and for the year ended December 31, 2007, such thirty
(30) days after the date of this Agreement shall be sixty (60) days after December 31,
2007) and shall cooperate with Parent in connection with the preparation of
related pro forma financial statements, in each case that comply with either (A) the
requirements of Regulation S-X under the rules and regulations of the SEC
(as interpreted by the staff of the SEC) for financial statements that would be
required to be included in a Definitive Proxy Statement filed pursuant to
Regulation 14A of the Exchange Act or (B) the requirements set forth in
clause 1 except as the staff of the SEC may permit Parent by waiver of such


 


41

















 


requirements (in either case (A) or (B), together
with customary reports and “comfort” letters of the Company’s independent
public accountants) and (ii) shall provide and make reasonably available
upon reasonable notice the senior management employees of the Company to
discuss the materials prepared and delivered pursuant to this Section 5.6(i).


 


5.7.                              Access
to Information; Confidentiality. 
Each of the Company and Parent shall, and shall cause each of its
respective Subsidiaries to, afford to the other party and to the officers,
employees, accountants, counsel, financial advisors and other representatives
of such other party, reasonable access during normal business hours during the
period prior to the Effective Time to all their respective properties, books,
Contracts, personnel and records and, during such period, each of the Company
and Parent shall, and shall cause each of its respective subsidiaries to,
furnish promptly to the other party a copy of each report, schedule,
registration statement and other document filed by it during such period
pursuant to the requirements of federal or state securities laws.  All information exchanged pursuant to this Section 5.7
shall be subject to the confidentiality agreement, dated as of August 30,
2007, between the Company and Parent (the “Confidentiality
Agreement”).


 


5.8.                              Reasonable
Efforts; Regulatory Matters; Third-Party Consents.


 


(a)                                  Upon
the terms and subject to the conditions set forth in this Agreement, each of
the parties hereto shall use commercially reasonable efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other Transactions, including, without
limitation, to prepare and file, as promptly as practicable, all necessary
documentation, to effect all applications, notices, petitions and filings, and
to obtain as promptly as practicable all Consents of all third parties and
Governmental Entities set forth in Sections 3.6 and 4.6 and
related schedules or that are necessary or advisable to consummate the Merger
or the other Transactions; provided, however, that (i) no party shall be required to make any
payment to obtain any Consent from a third party (or Governmental Entity), and (ii) neither
Parent nor Company nor any of their Subsidiaries shall agree orally or in
writing to any material amendments to any Material Contract (whether to have
effect prior to or after the Closing), in each case, in connection with
obtaining any Consents from any private third-party or Governmental Entity
without obtaining the prior written consent of the other party.


 


(b)                                 If
any required Consent of any third party (excluding any Governmental Entity) is
not obtained prior to the Closing, the parties hereto, each without cost,
expense or liability to the other (except as provided in Article VI
hereof), shall cooperate in good faith to seek, if possible, alternative
arrangement to achieve the economic results intended.


 


(c)                                  Subject
to Applicable Law and any applicable confidentiality restrictions, Parent and
its counsel, on the one hand, and the Company and its counsel, on the other
hand, shall have the right to review (in advance to the extent practicable) any
information relating to the other that appears in any filing made with, or
written materials submitted to, any Governmental Entity in connection with the
Merger or the other Transactions, provided that nothing contained herein shall
be deemed to provide any party to this Agreement with a right to review any
such information provided to any Governmental Entity on a confidential basis in


 


42

















 


connection with the Merger or the other
Transactions.  The parties may also, as
each deems reasonably necessary, designate any competitively sensitive material
provided to the other under this Section 5.8 as “outside counsel
only.” Such materials and the information contained therein shall be given only
to the outside legal counsel of the recipient and will not be disclosed by such
outside counsel to employees, officers, or directors of the recipient unless
express permission is obtained in advance from the source of the materials or
its legal counsel.


 


(d)                                 The
Company and Parent shall give prompt notice to the other, of (i) any
representation or warranty made by it contained in any Transaction Agreement
becoming untrue or inaccurate in any respect or (ii) the failure by it to
comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under any Transaction
Agreement, provided, however, that such notification pursuant to this Section 5.8(d) shall
not limit or otherwise effect the remedies available hereunder to the party
receiving such notice.


 


5.9.                              Fees and Expenses.  In the event the Merger is not consummated,
all fees and expenses incurred in connection with the Merger, including all
legal, accounting, tax and financial advisory, consulting, investment banking
and all other fees and expenses of third parties incurred by a party in
connection with the negotiation and effectuation of the terms and conditions of
this Agreement and the transactions contemplated hereby shall be the obligation
of the party incurring such fees and expenses.


 


5.10.                        Public Announcements.  Parent and Merger Sub, on the one
hand, and the Company, on the other hand, shall consult with each other before
issuing, and provide each other the opportunity to review and comment upon, any
press release or other public statements with respect to the Merger and the
other Transactions and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by
Applicable Law or court process.


 


5.11.                        Affiliates.  Prior to the Closing Date, the Company
shall deliver to Parent Schedule 5.11 hereto identifying all persons who
are expected by the Company to be, at the date of the Parent Stockholders’
Meeting, “affiliates” of the
Company for purposes of Rule 145 under the Securities Act.  The Company shall use its reasonable efforts
to cause each such person to deliver to Parent on or prior to the Closing Date
a written agreement substantially in the form of Exhibit F  attached
hereto (the “Affiliate
Letters”).


 


5.12.                        Quotation of Listing. 
Parent shall use its commercially reasonable efforts to cause the Parent
Shares to be approved for listing on The American Stock Exchange LLC (the “AMEX”),
subject to official notice of issuance, prior to the Effective Time.


 


5.13.                        Tax Treatment.  The parties intend the Merger to
qualify as a reorganization within the meaning of Section 368(a) of
the Code.  The parties to this Agreement
hereby adopt this Agreement as a “plan of reorganization” within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury
Regulations.  Each of Parent, Merger Sub
and the Company shall not take any action and shall not fail to take any action
or suffer to exist any condition which action or failure to act or condition
would prevent, or would be reasonably


 


43

















 


likely to prevent, the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.


 


5.14.                        Pre-Closing
Confirmation.


 


(a)                                  Promptly
after the date hereof, Parent shall give to the Trustee the notice attached as Exhibit A
to the Trust Agreement.


 


(b)                                 Not
later than 48 hours prior to the Closing, Parent shall (i) give the
Trustee advance notice of the Effective Time, and (ii) cause the Trustee
to provide a written confirmation to the Company confirming the dollar amount
of the Trust Fund balance held by the Trustee in the Trust Account that will be
released to Parent upon consummation of the Merger.


 


5.15.                        Stock Symbol.  As of and after the Effective Time, Parent
shall (a) change the name of Parent to “Asset Alliance Corporation” and (b) cause
the symbol under which the Parent Common Stock and any warrants to purchase
Parent Common Stock are traded on the AMEX to change to a symbol as determined
by the Company that, if available, is reasonably representative of the
corporate name or business of the Company.


 


5.16.                        Parent
Record Books.  At Closing, Parent
shall deliver all of the corporate records relating to Parent and Merger Sub to
the Surviving Corporation.


 


ARTICLE VI

CONDITIONS PRECEDENT TO THE CLOSING


 


6.1.                              Conditions
to Each Party’s Obligations.  The
obligations of the Company, on the one hand, and Parent and Merger Sub, on the
other hand, to consummate the Merger are subject to the fulfillment, on or before
the Closing Date, of the following conditions:


 


(a)                                  Stockholder Approval.  Parent shall have obtained the Parent
Stockholder Approval, and the Company shall have obtained the requisite
approval of the Stockholders.


 


(b)                                 Effectiveness of the Registration Statement.  The Registration Statement shall have been
declared effective; no stop order suspending the effectiveness of the
Registration Statement or the use of the Proxy Statement shall have been issued
by the SEC, and no proceedings for that purpose shall have been initiated or,
to the knowledge of Parent or the Company, threatened by the SEC.


 


(c)                                  Antitrust Approvals. 
All approvals, authorizations or clearances required under any
applicable Antitrust Laws with respect to any Antitrust Filings shall have been
obtained and all requirements thereunder shall have been satisfied.


 


(d)                                 No Injunctions or Restraints.  No temporary restraining order, preliminary
or permanent injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; provided, however,
that prior to asserting this condition, subject to Section 5.8,
each of the


 


44

















 


parties shall have used commercially reasonable
efforts to prevent the entry of any such injunction or other order and to
appeal as promptly as possible any such injunction or other order that may be
entered.


 


(e)                                  Conversion Rights.  At
or prior to the Parent Stockholders’ Meeting, holders of less than thirty
percent (30%) of the IPO Shares shall have demanded that Parent convert their
IPO Shares into cash pursuant to the terms of the Parent Charter.


 


(f)                                    Net Assets.  The Board
of Directors of Parent shall have determined that the fair market value of the
Company immediately prior to the Effective Time is at least eighty percent
(80%) of the net assets of Parent immediately prior to the Effective Time
(excluding the amount held in the Trust Account representing a portion of the
compensation of the underwriters in connection with Parent’s initial public
offering).


 


(g)                                 Governmental Approvals. 
The Governmental Approvals required to be made or obtained in connection
with executing and delivering this Agreement or consummating the Merger have
been made or obtained, on terms reasonably acceptable to the party obtaining
the Governmental Approval (or whose Affiliate obtained the Governmental
Approval).


 


6.2.                              Conditions
to the Obligation of Parent.  The
obligation of Parent to consummate the Merger is subject to the satisfaction,
on or before the Closing Date, of each of the following further conditions, any
one or more of which may be waived in writing by Parent:


 


(a)                                  (i) 
The Company shall have performed in all material respects its obligations
hereunder required to be performed by it on or prior to the Closing Date; (ii) the
representations and warranties of the Company contained in this Agreement and
in any certificate or other writing delivered by the Company pursuant hereto
shall be true and correct in all material respects at and as of the Closing
Date, as if made at and as of such date except to the extent such
representations and warranties speak as of a specific date or as of the date of
this Agreement and except for those failures to be so true and correct as would
not reasonably be expected to have, in the aggregate, a Company Material
Adverse Effect; and (iii) Parent shall have received a certificate signed
by the Chief Executive Officer of the Company to the foregoing effect.


 


(b)                                 The
Company shall have obtained all Consents necessary to the consummation of the
Merger including any Consents necessary for the valid continuation of any
Contract, except those Consents the failure of which to obtain would not,
individually or in the aggregate, have or be expected to have a Company
Material Adverse Effect, and the Company shall have delivered to Parent
executed counterparts of all such Consents.


 


(c)                                  No
event, occurrence, change, effect or condition of any character shall have occurred
that, individually or in the aggregate, has had or would reasonably be expected
to have a Company Material Adverse Effect.


 


(d)                                 The
Company shall have delivered to Parent duly executed copies of the following
and each of the following shall be in full force and effect:


 


45

















 


(i)                                     The
Employment Agreements of Bruce Lipnick, Arnold Mintz and Stephen Bondi
(collectively, the “Key Employees”) in the form of Exhibits G-1, G-2
and G-3, respectively;


 


(ii)                                  the
Escrow Agreement; and


 


(iii)                               such
other documents, certificates, corporate proceedings, opinions and other items
as Parent shall reasonably request.


 


(e)                                  Parent
shall have received an opinion of Skadden, Arps, Slate, Meagher, &
Flom LLP, counsel to the Company, to the effect set forth in Exhibit H-1
and an opinion of the General Counsel of the Company to the effect set forth in
Exhibit H-2.


 


(f)                                    Stockholders
holding not more than ten percent (10%) of the outstanding shares of Company
Capital Stock shall have exercised or shall have continuing rights to exercise
dissenters’ rights under the DGCL with respect to the transactions contemplated
by this Agreement.


 


(g)                                 Parent
shall have received from the Company a certificate in form and substance
reasonably satisfactory to Parent, duly executed and acknowledged, certifying
that the transactions contemplated by this Agreement are exempt from
withholding under Section 1445 of the Code.


 


(h)                                 All
Company Options held by Bruce Lipnick, Arnold Mintz and Stephen Bondi and all
Company Warrants held by Bruce Lipnick and Arnold Mintz shall have been
cancelled and Parent shall have received documentation reasonably satisfactory
to it and its counsel to the foregoing effect.


 


(i)                                     The
Stockholder Agreements and all other investors rights granted by the Company to
its stockholders shall have been terminated and Parent shall have received
documentation reasonably satisfactory to it and its counsel to the foregoing
effect.


 


(j)                                     The
Company shall have redeemed or converted all outstanding shares of Series F
Preferred Stock in accordance with the Certificate of Designations of the Series F
Preferred Stock, and Parent shall have received documentation reasonably
satisfactory to it and its counsel to the foregoing effect.


 


(k)                                  Asset
Alliance Investment Services, Inc. shall have received the required
approval of the Financial Industry Regulatory Authority and Parent shall have
received documentation reasonably satisfactory to it and its counsel to the
foregoing effect.


 


(l)                                     Parent and any other controllers (as defined in the UK
Financial Services Authority’s Handbook of Rules and Guidance, as amended
from time to time) of Parent shall have obtained the approval of the UK
Financial Services Authority.


 


6.3.                              Conditions
to the Obligation of the Company. 
The obligation of the Company to consummate the Merger is subject to the
satisfaction, on or before the Closing Date, of each of


 


46

















 


the following further conditions, any one or more of
which may be waived in writing by the Company:


 


(a)                                  (i) Parent
shall have performed in all material respects its obligations hereunder
required to be performed by it at or prior to the Closing Date; (ii) the
representations and warranties of Parent contained in this Agreement and in any
certificate or other writing delivered by Parent pursuant hereto shall be true
and correct in all material respects at and as of the Closing Date, as if made
at and as of such date except to the extent such representations and warranties
speak as of a specific date or as of the date of this Agreement and except for
those failures to be so true and correct as would not reasonably be expected to
have, in the aggregate, a Parent Material Adverse Effect; and (ii) the
Company shall have received a certificate signed by the Chief Executive Officer
of Parent to the foregoing effect.


 


(b)                                 Parent
shall have obtained all Consents necessary to the consummation of the Merger
including any Consents necessary for the valid continuation of any Contract,
except those Consents the failure of which to obtain would not, individually or
in the aggregate, have or be expected to have a Parent Material Adverse Effect,
and Parent shall have delivered to the Company executed counterparts of all
such Consents.


 


(c)                                  No
event, occurrence, change, effect or condition of any character shall have
occurred that, individually or in the aggregate, has had or would reasonably be
expected to have a Parent Material Adverse Effect.


 


(d)                                 At
the Effective Time, Parent shall have in the Trust Account no less than an
amount equal to $100.0 million less (i) any Taxes paid or (ii) working
capital draws made in accordance with the Trust Agreement.


 


(e)                                  Parent
shall have established and reserved pursuant to an option plan approved by the
Company an amount of Parent Shares equal to 4,400,000 and shall have approved
the grant, effective on the Closing Date, with an exercise price equal to fair
market value on the date of grant, (i) options to purchase 2,450,000
Parent Shares to Bruce Lipnick, Arnold
Mintz and Stephen Bondi on such terms as are set forth in their respective
employment agreements and (ii) options to purchase up to 1,050,000 Parent
Shares to current Employees of the Company or its Subsidiaries with such
options to be subject to three-year cliff vesting; provided, however,
that the number of shares reserved pursuant hereto shall be reduced by the
number of Parent Shares underlying the Converted Options; provided, further,
that there shall be a minimum of 500,000 Parent Shares reserved pursuant to the
option plan for future issuances.


 


(f)                                    The
Company shall have received an opinion of Bingham McCutchen LLP, counsel to
Parent, to the effect set forth in Exhibit I and an opinion as to
tax matters of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to
the Company, to the effect set forth in Exhibit J.


 


(g)                                 The
board of directors of Parent shall be constituted as determined pursuant to the
first sentence of Section 1.6.


 


47

















 


ARTICLE VII

TERMINATION


 


7.1.                              Termination.  This Agreement may be terminated and the
Merger abandoned at any time prior to the Closing Date regardless of whether
this Agreement and/or the Merger have been approved by the Stockholders:


 


(a)                                  by
written agreement of the Company, Parent and Merger Sub;


 


(b)                                 by
either Parent or the Company if:  (i) the
Closing Date has not occurred by June 15, 2008 (the “Initial
Termination Date”); provided, that as long as Parent is not
in breach of the covenant set forth in Section 5.6, Parent, in its
sole discretion, may (A) extend the Initial Termination Date until September 15,
2008 and (B) thereafter extend such date until November 15, 2008, if,
in the case of subsection (B) only, the SEC has not declared the
Registration Statement effective (the Initial Termination Date as may be so
extended, the “Termination Date”) provided, further the
right to terminate this Agreement under this Section 7.1(b)(i) shall
not be available to any party whose failure to fulfill any obligation hereunder
has been the cause of, or resulted in, the failure of the Closing Date to occur
on or before the Termination Date and such action or failure constitutes a
breach of this Agreement; (ii) there shall be a final non-appealable order
of a Governmental Entity in effect prohibiting consummation of the Merger; or (iii) there
shall be any Law enacted, promulgated or issued or deemed applicable to the
Merger by any Governmental Entity that would make consummation of the Merger
illegal;


 


(c)                                  by
Parent or the Company if there shall have been any action taken, or any Law
enacted, promulgated or issued or deemed applicable to the Merger, by any
Governmental Entity, which would:  (i) prohibit
Parent’s or the Company’s ownership or operation of any material portion of the
business of the Company or (ii) compel Parent or the Company to dispose of
or hold separate, as a result of the Merger, any material portion of the
business or assets of the Company or Parent;


 


(d)                                 by
Parent if it is not in material breach of its obligations under this Agreement
and there has been a breach of any representation, warranty, covenant or
agreement contained in this Agreement on the part of the Company and as a
result of such breach the conditions set forth in Sections 6.1 or 6.2,
as the case may be, would not then be satisfied; provided, that if such breach is curable by the Company
prior to the Termination Date through the exercise of its commercially
reasonable efforts, then Parent may not terminate this Agreement under this Section 7.1(d) prior
to the earlier of the Termination Date or that date which is 15 days following
the Company’s receipt of written notice from Parent of such breach, it being
understood that Parent may not terminate this Agreement pursuant to this Section 7.1(d) if
such breach by the Company is cured within such 15-day period so that the
conditions would then be satisfied; or


 


(e)                                  by
the Company if it is not in material breach of its obligations under this
Agreement and there has been a breach of any representation, warranty, covenant
or agreement contained in this Agreement on the part of Parent or Merger Sub
and as a result of such breach the conditions set forth in Sections 6.1
or 6.3, as the case may be, would not then be satisfied;


 


48

















 


provided, that if such breach
is curable by Parent prior to the Termination Date through the exercise of its
commercially reasonable efforts, then the Company may not terminate this
Agreement under this Section 7.1(e) prior to the earlier of
the Termination Date or that date which is 15 days following Parent’s receipt
of written notice from the Company of such breach, it being understood that the
Company may not terminate this Agreement pursuant to this Section 7.1(e) if
such breach by Parent is cured within such 15-day period so that the conditions
would then be satisfied.


 


Where action is taken to terminate this Agreement pursuant to this Section 7.1,
it shall be sufficient for such action to be authorized by the board of
directors of the party taking such action.


 


7.2.                              Effect
of Termination.  Except as otherwise
set forth in this Section 7.2, any termination of this Agreement
under Section 7.1 will be effective immediately upon the delivery
of written notice of the terminating party to the other parties hereto.  In the event of the termination of this
Agreement as provided in Section 7.1, this Agreement shall be of no
further force or effect, except (i) as set forth in Sections 5.7
and 5.9, this Section 7.2, Section 7.3 and Articles
VIII, IX and X, each of which shall survive the termination of this
Agreement, and (ii) nothing herein shall relieve any party from liability
for any willful breach of this Agreement. 
No termination of this Agreement shall affect the obligations of the
parties contained in the Confidentiality Agreement, all of which obligations
shall survive termination of this Agreement.


 


7.3.                              Amendment.  Except as is otherwise required by Applicable
Law, prior to the Closing this Agreement may be amended by the parties hereto
at any time by execution of an instrument in writing signed by Parent, Merger
Sub and the Company.  Except as is
otherwise required by Applicable Law, after the Closing this Agreement may be
amended at any time by execution of an instrument in writing signed by Parent
and the Surviving Corporation and approved by a majority of the independent
directors of Parent; provided, however, that after stockholder approval no
provision affecting the amount or value of the Merger consideration payable
pursuant to Article II shall be modified without approval by a majority of
the voting power of the shares of capital stock of the party whose stockholders
would be adversely affected by such amendment.


 


7.4.                              Extension;
Waiver.  At any time prior to the
Effective Time, Parent and Merger Sub, on the one hand, and the Company, on the
other, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations of the other party hereto, (ii) waive
any inaccuracies in the representations and warranties made to such party
contained herein or in any document delivered pursuant hereto, or (iii) waive
compliance with any of the agreements or conditions for the benefit of such
party contained herein.  Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if, and to the extent that, set forth in an instrument in writing signed on
behalf of such party.


 


49

















 


ARTICLE VIII

SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS;

INDEMNIFICATION; LIMITATIONS


 


8.1.                              Survival
of Representations, Warranties and Covenants.


 


(a)                                  The
representations and warranties of the Company, Parent and Merger Sub set forth
in this Agreement (including the Company Schedules or the Parent Schedules, as
applicable) or in any certificate, document or other instrument delivered by or
on behalf of the Company, Parent or Merger Sub, as applicable, pursuant to or
in connection with this Agreement shall survive the execution and delivery of
this Agreement, any investigation by or on behalf of the Company, Parent or
Merger Sub, as applicable, and the Effective Time and shall terminate at 5:00
PM Eastern time on the 18-month anniversary of the Closing Date except, in all
cases, with respect to any Loss, claim or breach of which any Indemnified Party
shall have provided written notice to the Company Representative or Parent, as
applicable, prior to such termination.


 


(b)                                 The
respective covenants, agreements and obligations of the Company, Parent and
Merger Sub set forth in this Agreement or in any certificate, document or other
instrument delivered pursuant to or in connection with this Agreement shall
survive the execution and delivery of this Agreement, any investigation by or
on behalf of any party hereto, and the Effective Time in accordance with their
terms.


 


8.2.                              Indemnification.  Subject to the other provisions of this Article VIII,
the Indemnity Escrow Amount shall be available to indemnify, defend and hold
harmless Parent, Merger Sub, the Surviving Corporation and each of their
respective officers, directors, employees, partners, members, agents and
Affiliates (the “Indemnified Parties”) against any and all Losses
incurred or suffered by any such Indemnified Parties directly or indirectly as
a result of, with respect to or in connection with:


 


(a)                                  the
failure of any representation or warranty of the Company set forth herein
(including the Company Schedules) or in any certificate, document or other
instrument delivered pursuant to or in connection with this Agreement to be
true and correct in all respects as of the date of this Agreement and as of the
Closing (except in the case of any representation and warranty that speaks only
as of the date of this Agreement or a specific date or dates, which such representation
and warranty shall be true and correct as of such date or dates and
disregarding for purposes of clause (i) of this Section 8.2
any “material,” “in all material respects,” “Company Material Adverse Effect,”
or similar qualification contained in any such representation or warranty or
with respect thereto for purposes of calculating Losses);


 


(b)                                 any
failure by the Company to fully perform, fulfill or comply with any covenant
set forth herein to be performed, fulfilled or complied with prior to the
Effective Time; or


 


(c)                                  any
Taxes of or owed by the Company or (to the extent of the Company’s allocation
thereof) any of its Subsidiaries in respect of any full or partial Tax period
ending on or prior to the Closing Date to the extent not paid or accrued for in
accordance with prior practices or any Losses relating to such Taxes; provided, that
for purposes of applying this Section 8.2(c), the parties shall
use appropriate methods to allocate liability in respect of any Taxes of the
Company or any of its Subsidiaries attributable to any Tax period that includes
but ends after the Closing Date (each, a “Straddle
Period”), which appropriate methods shall include the following:  (i) for any income Taxes or any
transactional Taxes, including Taxes based on sales or revenue, the allocation
of Taxes to pre- and post-Closing portions of a Straddle Period shall be
determined using a closing-of-the-books method assuming that the applicable
Straddle Period consists of two


 


50

















 


taxable periods, one ending at the close of the
Closing Date and one beginning at the opening of the calendar day after the
Closing Date; and (ii) for any Taxes based on net worth, capital,
intangibles, or similar items, and for any real estate Taxes or other property
or tangible asset-based Taxes, the allocation of Taxes to pre- and post-Closing
portions of a Straddle Period shall be determined on a per-diem basis taking
into account the number of days in the Straddle Period through and including the
Closing Date and the number of days in the entire Straddle Period.


 


8.3.                              Limitations.


 


(a)                                  In
no event shall the indemnification obligations under Section 8.2
exceed the Indemnity Escrow Amount.


 


(b)                                 No
claims shall be made by any Indemnified Party for indemnification pursuant to
clause (a) of Section 8.2 hereof, unless and until the
aggregate amount of Losses for which the Indemnified Parties seek to be
indemnified pursuant to clause (a) of Section 8.2 exceeds
$1,000,000 (the “Deductible Amount”), at which time the Indemnified
Parties shall be entitled to indemnification for all such Losses in excess of
the Deductible Amount).  Notwithstanding
the foregoing, the Deductible Amount shall not apply to any indemnification
obligations relating to Losses arising under clauses (b) or (c) of Section 8.2.


 


(c)                                  The
representations, warranties, covenants and obligations of the Company, and the
rights and remedies that may be exercised by the Indemnified Parties based on
such representations, warranties, covenants and obligations, will not be
limited or affected by any investigation conducted by Parent or Merger Sub or
any agent of Parent or Merger Sub with respect to, or any knowledge acquired
(or capable of being acquired) by Parent or Merger Sub or any agent of Parent
or Merger Sub at any time, whether before or after the execution and delivery
of this Agreement or the Closing, with respect to the accuracy or inaccuracy of
or compliance with any such representation, warranty, covenant or obligation.  The waiver by Parent or Merger Sub of any
conditions set forth in Article VI will not affect or limit the
provisions of this Article VII in any manner.


 


(d)                                 No
claim may be asserted nor may any proceedings be commenced against the
Indemnity Escrow Amount pursuant to Section 8.2 to the extent that (i) the
Indemnified Party had a reasonable opportunity, but failed, in good faith to
mitigate the Loss or (ii) such Loss arises from or was caused by actions
taken or failed to be taken by the Indemnified Party after the Closing.


 


(e)                                  Parent,
Merger Sub and the Indemnified Parties agree that their sole and exclusive
remedy for money damages for any matters relating to this Agreement, the Escrow
Agreement and any certificate or instrument delivered pursuant hereto shall be
the rights to indemnification set forth in this Article VIII.


 


(f)                                    Notwithstanding
anything in this Article VIII to the contrary, nothing in this
Agreement shall limit (i) any right or remedy for fraud, intentional
misrepresentation or willful breach or misconduct or (ii) any equitable
remedy, including a preliminary or permanent injunction or specific
performance.


 


51

















 


(g)                                 The
amount of any Losses subject to indemnification under Section 8.2
shall be reduced by the amounts actually recovered by the Indemnified Parties
under applicable insurance policies with respect to claims related to such
Losses.


 


(h)                                 Except
as otherwise permitted by Section 8.3(f) or in respect of
Third Party Claims, the Company shall not be liable under Section 8.2
to any Indemnified Party for any consequential, incidental or punitive Losses
or Losses for lost profits.


 


8.4.                              Procedures.


 


(a)                                  General.  Promptly
after the discovery by any Indemnified Party of any Loss or Losses, claim or
breach, including any claim by a third party (a “Third Party Claim”),
that reasonably would be expected to give rise to a claim for indemnification
hereunder, the Indemnified Party shall deliver to the Company Representative a
certificate (a “Claim Certificate”) that:


 


(i)                                     states
that the Indemnified Party has paid or properly accrued Losses, or reasonably
anticipates that it may or will incur liability for Losses, for which such
Indemnified Party is entitled to indemnification pursuant to this Agreement;
and


 


(ii)                                  specifies
in reasonable detail, to the extent practicable, each individual item of Loss
included in the amount so stated, the date (if any) such item was paid or
properly accrued, the basis for any anticipated liability and the nature of the
misrepresentation, default, breach of warranty or breach of covenant or claim
to which each such item is related and, to the extent computable, the
computation of the amount to which such Indemnified Party claims to be entitled
hereunder;


 


provided, that
no delay on the part of the Indemnified Party in notifying the Company
Representative shall diminish the rights of the Indemnified Parties to obtain
recovery therefor except to the extent that the delay shall increase the amount
of such claim or loss, and then only to such extent.


 


(b)                                 If
the Company Representative objects to the indemnification of an Indemnified
Party in respect of any claim or claims specified in any Claim Certificate, the
Company Representative shall deliver a written notice to such effect to the
Indemnified Party within 30 days after receipt by the Company Representative of
such Claim Certificate.  Thereafter, the
Company Representative and the Indemnified Party shall attempt in good faith to
agree upon the rights of the respective parties within 30 days of receipt by
the Indemnified Party of such written objection with respect to each of such
claims to which the Company Representative has objected.  If the Indemnified Party and the Company
Representative agree with respect to any of such claims, the Indemnified Party
and the Company Representative shall promptly prepare and sign a memorandum
setting forth such agreement and, if applicable, an instruction to the Escrow
Agent.  Should the Indemnified Party and
the Company Representative fail to agree within ten (10) Business Days as
to any particular item or items or amount or amounts, then each party shall be
entitled to pursue its available remedies for resolving the claim for
indemnification; provided, however, that if the amount of such
claim has not been finally determined or become an Agreed Claim prior to the
18-month anniversary of the Closing Date,


 


52

















 


the Indemnified Party and the Company Representative
shall jointly engage an independent mediator (the “Mediator”) to resolve
such dispute.  Such Mediator shall be
JAMS, provided that JAMS agrees upon its engagement to render a decision
regarding the claim within twenty (20) Business Days following the expiration
of the thirty (30) calendar day period in the next sentence, and if JAMS shall
not so agree, the Mediator shall be an independent third party mutually
agreeable to the Indemnified Party and the Company Representative which shall
agree to render a decision within such time period.   The Indemnified Party and the Company
Representative shall each be entitled to submit a presentation to the Mediator
not later than thirty (30) calendar days after such anniversary.   The Mediator shall choose one of the parties’
positions based solely upon the presentations by the Indemnified Party and the
Company Representative during such twenty (20) Business Day period.  If only one submission is made, the Mediator
will choose that position and if no submissions are made, the Company
Representative’s position shall be conclusive and binding.  Parent and the Surviving Corporation (out of
the Escrow Account as an Agreed Claim) will split equally the fees and expenses
of the Mediator and the expenses, if any, of making such presentations.  All determinations made by the Mediator will
be final, conclusive and binding on the parties and such claim shall thereafter
be treated as an Agreed Claim for the amount determined in accordance with this
Section 8.4(b) for purposes of Section 8.4(e).


 


(c)                                  Third Party Claims. 
The Indemnified Party shall have the right in its sole discretion to
conduct the defense of any Third Party Claim; provided, however, that
no indemnification of any Indemnified Party shall be available for any
settlement of any such Third Party Claim effected without the prior written
consent of the Company Representative, which consent shall not be unreasonably
withheld, conditioned or delayed.  If any
such action or claim is settled with the prior written consent of the Company
Representative, or if there be a final judgment for the plaintiff in any such
action, the Indemnified Party shall be entitled to indemnification for the
amount of any Loss relating thereto.


 


(d)                                 Company  Defense; Settlement.  In the event the Indemnified Party elects not
to defend the Third Party Claim, the Company Representative may cause the
Surviving Corporation to defend such claim at its expense subject to
reimbursement out of the Indemnity Escrow Amount.  In such event, neither the Surviving Corporation
nor the Company Representative shall have any right to settle, adjust or
compromise such Third Party Claim without the prior written consent of the
Indemnified Party against whom the Third Party Claim has been asserted, which
consent shall not be unreasonably withheld, conditioned or delayed.


 


(e)                                  Agreed Claims; Mediator Failure to Render Decision.  Claims for Losses specified in any Claim
Certificate to which the Company Representative did not object in writing
within 30 days of receipt of such Claim Certificate, claims for Losses covered by
a memorandum of agreement of the nature described in Section 8.4(b) and
claims for Losses the validity and amount of which have been the subject of
resolution by arbitration or of a final non-appealable judicial determination
are hereinafter referred to, collectively, as “Agreed Claims.”  The Indemnified Party shall be entitled to
payment from the Surviving Corporation for any Agreed Claims cumulatively in
excess of the Deductible Amount and cumulatively not in excess of the Indemnity
Escrow Amount within 10 Business Days of the determination of the amount of any
such Agreed Claims and the number of shares of Parent Company Stock having a
market value equal at such time to the amount of such Agreed Claim shall be
released to Parent and retired.


 


53

















 


All property subject to the Escrow that is not
required to satisfy an Agreed Claim and is not subject to a pending Claim
Certificate shall be released to the former stockholders of the Company not
later than the third Business Day after the thirtieth (30th) day after the
18-month anniversary of the Closing Date. 
If the Mediator shall fail to render a decision regarding a Claim
Certificate within the twenty (20) Business Day period set forth in Section 8.4(b) and
shall thereafter fail to render a decision regarding such claim within the
following thirty (30) calendar days, the Indemnified Party and the Company
Representative shall promptly prepare and sign a memorandum setting forth an
instruction to the Escrow Agent to release to the former stockholders of the
Company the property subject to the Escrow which is subject to a pending Claim
Certificate with respect to the matter in dispute.


 


8.5.                              Company
Representative; Power of Attorney.


 


(a)                                  Appointment; Authority. 
The Company hereby initially appoints, as of immediately prior to the
Effective Time, Bruce H. Lipnick (together with his permitted successors, the “Company
Representative”), as its true and lawful agent and attorney-in-fact to
enter into as of the Effective Time any Transaction Agreement and any other
agreement in connection with the transactions contemplated by this Agreement,
and as of the Effective Time to:  (i) give
and receive notices and communications to or from Parent (on behalf of itself
or any other Indemnified Party) and/or the Escrow Agent relating to this
Agreement, the Escrow Agreement or any of the transactions and other matters
contemplated hereby or thereby (except to the extent that this Agreement or the
Escrow Agreement expressly contemplates that any such notice or communication
shall be given or received by such Stockholders individually); (ii) authorize
deliveries (including by means of not objecting to claims) to Parent of Parent
Shares from the Indemnity Escrow Amount; (iii) object to any claims
pursuant to Section 8.4; (iv) consent or agree to, negotiate,
enter into settlements and compromises of, and agree to arbitration and comply
with orders of courts and awards of arbitrators with respect to, such claims; (v) assert,
negotiate, enter into settlements and compromises of, and agree to arbitration
and comply with orders of courts and awards of arbitrators with respect to, any
other claim by any Indemnified Party, against the Indemnity Escrow Amount, in
each case relating to this Agreement, the Escrow Agreement or the transactions
contemplated hereby or thereby; (vi) to the extent permitted by Section 7.3
and the terms of such other agreement, amend this Agreement, the Escrow
Agreement or any other Transaction Agreement or any other agreement referred to
herein or contemplated hereby; and (vii) take all actions necessary or
appropriate in the judgment of the Company Representative for the
accomplishment of the foregoing, in each case without having to seek or obtain
the consent of any Person under any circumstance.  The Person serving as the Company
Representative may be replaced upon his death, incapacity or resignation by a
majority of the independent directors of Parent (as defined by the rules of
AMEX) from and of the former stockholders of the Company.  No bond shall be required of the Company
Representative, and the Company Representative shall receive no compensation
for his services.  The Company Representative
accepts his appointment hereunder.


 


(b)                                 No Liability.  The
Company Representative shall not be liable to any Person for any act done or
omitted hereunder as the Company Representative while acting in good faith and
any act done or omitted pursuant to the advice of counsel shall be conclusive
evidence of such good faith.  The Surviving
Corporation shall indemnify the Company Representative and hold it harmless
against any loss, liability or expense incurred without gross


 


54

















 


negligence or bad faith on the part of the Company
Representative and arising out of or in connection with the acceptance or
administration of his duties hereunder. 
The Company Representative shall be reimbursed for reasonable expenses
incurred in the performance of his duties (including the reasonable fees of
counsel), and such fees shall be paid by the Surviving Corporation.


 


8.6.                              Parent
Share Adjustment.  The Company,
Parent and the Stockholders agree to treat each indemnification payment
pursuant to this Article VIII as an adjustment to the Parent Shares
for all Tax purposes and shall take no position contrary thereto unless
required to do so by applicable Tax Law pursuant to a determination as defined
in Section 1313(a) of the Code.


 


ARTICLE IX

DEFINITIONS, CONSTRUCTION, ETC.


 


9.1.                              Definitions.  For purposes of this Agreement:


 


“Accounting Firm” is
defined in Section 2.4(a).


 


“Action” means any legal,
administrative, governmental or regulatory proceeding or other action, suit,
proceeding, claim, arbitration, mediation, alternative dispute resolution
procedure, inquiry or investigation by or before any arbitrator, mediator,
court or other Governmental Entity.


 


“Adjustment Amount” is
defined in Section 2.6(a).


 


“Adjustment Escrow Amount”
is defined in Section 2.3.


 


“Advisers Act” means the
Investment Advisers Act of 1940, as amended.


 


“Affiliate” means, with
respect to the Person to which it refers, a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by or is under
common control with, such Person.


 


“Affiliate Letters” is
defined in Section 5.11.


 


“After-Tax Earnings” is
defined in Section 2.4(a).


 


“Agreed Claims” is
defined in Section 8.4(e).


 


“Agreement” is defined
in the Preamble.


 


“AMEX” is defined in Section 5.12.


 


“Antitrust Laws” is
defined in Section 3.6.


 


“Applicable Law” means,
with respect to any Person, any international, national, federal, provincial,
state or local law (statutory or common), constitution, treaty, convention, ordinance,
code, rule, regulation or other similar requirement enacted, adopted,
promulgated or applied by a


 


55

















 


Governmental
Entity that is binding upon or applicable to such Person, as amended unless
expressly specified otherwise.


 


“Associated Person” of
the Company, any of its Subsidiaries or another other Person has the same
meaning set forth in Section 202(a)(17) of the Advisers Act and/or Section 4k(2) or
(3) of the Commodity Exchange Act.


 


“Balance Sheet Date” is
defined in Section 3.7(a).


 


“Business Day” means any
day of the year on which national banking institutions in the State of New York
are open to the public for conducting business and are not required to close.


 


“CERCLA” means the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended.


 


“Certificate of Merger”
is defined in Section 1.3.


 


“Charter Amendment” is
defined in Section 1.7(a).


 


“Claim Certificate” is
defined in Section 8.4(a).


 


“Client”
means any Person to which the Company or any Subsidiary provides investment
advisory, administration, brokerage, trust, other fiduciary or distribution
services on the date hereof.


 


“Closing” is defined in Section 1.2.


 


“Closing Date” is
defined in Section 1.2.


 


“Closing Income Statement”
is defined in Section 2.4(a).


 


“COBRA” is defined in Section 3.20(l).


 


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


 


“Commodity Exchange Act”
means the Commodity Exchange Act (as amended through P.L. 106-580, on December 29,
2000), as amended, and the rules and regulations promulgated thereunder.


 


“Company” is defined in
the Preamble.


 


“Company Balance Sheet”
is defined in Section 3.7(a).


 


“Company Board” means
the board of directors of the Company.


 


“Company Capital Stock”
means the Company Common Stock and the Company Preferred Stock, collectively.


 


56

















 


“Company Certificate of
Incorporation” means the Company’s Certificate of Incorporation, as
amended.


 


“Company Common Stock”
is defined in Section 2.1(b).


 


“Company Covered Person”
is defined in Section 3.26.


 


“Company Employee Plan”
means any plan, program, policy, practice, contract, agreement or other
arrangement (written or oral) providing for deferred compensation, profit
sharing, bonus, severance, termination pay, performance awards, stock option,
share appreciation right or other stock-related awards, fringe benefits, group
or individual health, dental, medical, life insurance, survivor benefit or
other welfare, pension or other employee benefits or remuneration of any kind,
whether formal or informal, funded or unfunded, including each “employee
benefit plan” within the meaning of Section 3(3) of ERISA, whether or
not subject to ERISA, which is or has been maintained, contributed to, or
required to be contributed to, by the Company or any of its Subsidiaries or
ERISA Affiliates for the benefit of any Employee, or pursuant to which the
Company or any of its Subsidiaries has or may have any liability, contingent or
otherwise.


 


“Company Financial
Statements” is defined in Section 3.7(a).


 


“Company Fund” means any
Company Private Fund and any Company Public Fund.


 


“Company Intellectual
Property” means any Intellectual Property that has been used, is used, or
is held for use in the business of the Company or any of its Subsidiaries as
previously conducted, as currently conducted or as currently proposed to be
conducted, including the User Account Information.


 


“Company Material Adverse
Effect” means a material adverse effect on (a) the business, assets,
liabilities, condition (financial or other), operations or results of
operations of the Company and its Subsidiaries taken as a whole or (b) the
ability of the Company to perform its obligations pursuant to this Agreement
and the Transaction Agreements and to consummate the Merger and the transactions
contemplated hereby and thereby in a timely manner.


 


“Company Material Contract”
is defined in Section 3.12(a).


 


“Company Option” means
each option to purchase Company Common Stock then outstanding granted under any
Company Option Plan.


 


“Company Option Plan”
means, collectively, the Company’s 1996 Stock Option Plan and 2007 Stock Option
Plan, as amended and in effect on the date hereof.


 


“Company Preferred Stock”
means the blank check preferred stock, par value, $0.01 per share, of the
Company.


 


“Company Private Fund”
means any investment vehicle other than an investment company registered under
the Investment Company Act or any series thereof that is or has been


 


57

















 


sponsored,
formed, controlled, advised, subadvised or managed by the Company or any of its
Subsidiaries or any Management Company.


 


“Company Proposal” is
defined in Section 5.3(a).


 


“Company Proxy Statement”
is defined in Section 5.6(b).


 


“Company Public Fund”
means any investment company or other investment vehicle (including each
portfolio or series thereof, if any) sponsored by the Company or any of its
Subsidiaries for which the Company or any of its Subsidiaries or any Management
Company acts as investment adviser, investment sub-adviser or manager and that
is registered as such with any Governmental Entity.


 


“Company Representative”
is defined in Section 8.5(a).


 


“Company Schedules” is
defined in Article III.


 


“Company Stockholders’
Meeting” is defined in Section 5.6(a).


 


“Company Stock Rights”
means: (i) all outstanding Company Options, (ii) all outstanding
Company Warrants and (iii) all other outstanding subscriptions, options,
calls, warrants or any other rights, whether or not currently exercisable, to
acquire any shares of Company Capital Stock or that are or may become
convertible into or exchangeable for any shares of Company Capital Stock or
another Company Stock Right.  For
purposes of this definition, shares of Company Preferred Stock shall not be
considered Company Stock Rights.


 


“Company Tax Returns” is
defined in Section 3.21(a).


 


“Company Warrant” means
any outstanding warrant to purchase Company Capital Stock.


 


“Confidentiality Agreement”
is defined in Section 5.7.


 


“Consents” means
approvals, consents (including negative consents), waivers, filings,
authorizations, licenses, permits, notices, reports or similar items.


 


“Constitutional Document”
means, as to any Person, the constitutional or organizational documents of such
Person, including any charter, certificate of incorporation, certificate of
formation, articles of association, bylaws, trust instrument, partnership
agreement, limited liability company agreement or similar document.


 


“Contingent Consideration
Adjustment” is defined in Section 2.7(d).


 


“Contract” means any legally
binding agreement, contract, mortgage, indenture, lease, license,
understanding, arrangement, instrument, note, guaranty, indemnity,
representation, warranty, deed, assignment, power of attorney, certificate,
purchase order, work order, insurance policy, benefit plan, commitment,
covenant, assurance or undertaking of any nature, whether written, oral or
implied, and each and every amendment, extension, exhibit, attachment,


 


58

















 


schedule,
addendum, appendix, statement of work, change order, and any other similar
instrument or document relating thereto.


 


“Converted Option” is
defined in Section 2.7(a).


 


“Converted Warrant” is
defined in Section 2.7(c).


 


“Cumulative EBITDA” is
defined in Section 2.6(c).


 


“Debt” means, without
duplication, with respect to any Person (i) all obligations for borrowed
money or extensions of credit (including bank overdrafts and advances), (ii) all
obligations evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations as lessee capitalized in accordance with
GAAP, (v) all obligations of others secured by a Lien on any asset,
whether or not such obligations are assumed, (vi) all obligations,
contingent or otherwise, directly or indirectly guaranteeing any obligations of
any other Person, all obligations to reimburse the issuer in respect of letters
of credit or under performance or surety bonds, or other similar obligations, (vii) all
obligations in respect of bankers’ acceptances and under reverse repurchase
agreements, and (viii) all obligations in respect of futures contracts,
swaps, other financial contracts and other similar obligations (determined on a
net basis as if such contract or obligation was being terminated early on such
date).


 


“Deductible Amount” is
defined in Section 8.3(b).


 


“Developed Software” is
defined in Section 3.11(d).


 


“DGCL” is defined in Recital
A.


 


“Downward Adjustment Amount”
is defined in Section 2.4(b).


 


“EBITDA” means the
Company’s and its Subsidiaries’ net income as reflected in the consolidated
audited financial statements for the relevant period, excluding any extraordinary
gains or losses, and increased by the amount reflected in such financial
statements as expenses incurred for interest, Taxes, depreciation and
amortization of any intangible assets, but only to the extent that such items
were deducted in computing the Company’s and its Subsidiaries’ net income; provided
that for purposes of calculating EBITDA, earnings will exclude gain/loss
associated with impairment or valuation allowance for long-lived assets and
gain/loss on separations from affiliates.


 


“EBITDA Shares” means
any shares of Parent Common Stock issued pursuant to Section 2.6.


 


“Effective Time” is
defined in Section 1.3.


 


“Employee” means any
current, former, or retired employee of the Company or any of its Subsidiaries.


 


59

















 


“Employment Agreement”
means each employment agreement between the Company or any of its Subsidiaries
and any Employee.


 


“Environmental Law”
means any and all Applicable Laws and Permits issued, promulgated or entered
into by any Governmental Entity relating to the environment, the protection or
preservation of human health or safety, including the health and safety of
employees, the preservation or reclamation of natural resources, or the
treatment, storage, disposal, management, Release or threatened Release of
Hazardous Materials, in each case as in effect on the date hereof and as may be
issued, promulgated or amended from time to time.


 


“Equity Securities”
means, with respect to any Person, any of its capital stock, partnership
interests (general or limited), limited liability company interests, trust
interests or other securities which entitle the holder thereof to participate
in the earnings of such Person or to receive dividends or distributions on
liquidation, winding up or dissolution of such Person, or to vote for the
election of directors or other management of such Person, or to exercise other
rights generally afforded to stockholders of a corporation.


 


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


 


“ERISA Affiliate” means
any Person that, together with the Company or any of its Subsidiaries, would be
treated as a single employer under Section 414 of the Code or Section 4001
of ERISA and the regulations thereunder within the past 7 years.


 


“ERISA Client” is
defined in Section 3.20(i).


 


“Escrow” is defined in Section 2.3.


 


“Escrow Agent” is
defined in Section 2.3.


 


“Escrow Agreement” is
defined in Section 2.3.


 


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


 


“Exchange Agent” is
defined in Section 2.2(a).


 


“Exchange Fund” is
defined in Section 2.2(a).


 


“Exchange Ratio” is
defined in Section 2.1(c).


 


“Filings” is defined in Section 3.15(h).


 


“GAAP” is defined in Section 3.7(a).


 


“Governmental Approval”
means any consent, approval, authorization, waiver, permit, grant, franchise,
concession, agreement, license, certificate, exemption, order, decree,
judgment, injunction, registration, declaration, filing, report or notice of,
with or to any Governmental Entity.


 


“Governmental Entity” is
defined in Section 3.6.


 


60
















 


“Hazardous
Material” means those materials, substances, biogenic materials or wastes
that are regulated by, or form the basis of liability under, any
Environmental Law, including PCBs, pollutants, solid wastes, explosive,
radioactive or regulated materials or substances, hazardous or toxic materials,
substances, wastes or chemicals, petroleum (including crude oil or any fraction
thereof) or petroleum distillates, asbestos or asbestos containing materials,
materials listed in 49 C.F.R. Section 172.101 and materials defined as
hazardous substances pursuant to Section 101(14) of CERCLA.


 


“Incentive
Plans” means the Company’s 2004 Incentive Award Plans, 2005 Incentive Award
Plans, 2006 Incentive Award Plans and 2007 Incentive Award Plans as described
on Schedule 3.5.


 


“Indemnity
Escrow Amount” is defined in Section 2.3.


 


“Indemnified
Parties” is defined in Section 8.2.


 


“Initial
Parent Shares” is defined in Section 2.1(c).


 


“Initial
Termination Date” is defined in Section 7.1(b).


 


“Intellectual
Property” means any or all of the following and all rights in, arising out
of, or associated therewith:  (i) all
United States, international and foreign patents and applications therefor and
all reissues, divisions, divisionals, renewals, extensions, provisionals,
continuations and continuations-in-part thereof, and all patents,
applications, documents and filings claiming priority to or serving as a basis
for priority thereof; (ii) all inventions (whether or not patentable),
invention disclosures, improvements, trade secrets, proprietary process
information, computer software programs (in both source code and object code
form), technology, business methods, technical data and customer lists,
tangible or intangible proprietary information, and all documentation relating
to any of the foregoing; (iii) all copyrights, copyrights registrations
and applications therefor, and all other rights corresponding thereto
throughout the world; (iv) all industrial designs and any registrations
and applications therefor throughout the world; (v) all trade names,
logos, common law trademarks and service marks, trademark and service mark
registrations and applications therefor throughout the world; (vi) all
databases and data collections and all rights therein throughout the world; (vii) all
moral and economic rights of authors and inventors, however denominated,
throughout the world; (viii) all Web addresses, sites and domain names and
numbers; and (ix) any similar or equivalent rights to any of the foregoing
anywhere in the world.


 


“International Plan”
means any employment, severance or similar contract or arrangement (whether or
not written) or any plan, policy, fund, program or arrangement or contract
providing for severance, insurance coverage (including any self-insured
arrangements), workers’ compensation, disability benefits, supplemental
unemployment benefits, vacation benefits, pension or retirement benefits or for
deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation rights or other forms of incentive compensation or post-retirement
insurance, compensation or benefits that is entered into, maintained,
administered or contributed to by the Company or any of its Subsidiaries or
Affiliates for the benefit of any 


 


61

















 


non-United States employee or
former employee of the Company or any of its Subsidiaries or Affiliates.


 


“IPO Shares”
means the shares of Parent Common Stock issued as part of Parent’s initial
public offering.


 


“IRS”
means the United States Internal Revenue Service.


 


“Investment
Advisory Contract” means any Contract constituting an agreement or
arrangement for the performance of investment management and/or advisory or
subadvisory services.


 


“Investment
Company Act” means the Investment Company Act of 1940, as amended, and the
SEC’s rules and regulations promulgated thereunder.


 


“Judgment”
means, with respect to any Person, any final non-appealable order, injunction,
judgment, decree, ruling or other similar requirement enacted, adopted,
promulgated or applied by a Governmental Entity or arbitrator that is binding
upon or applicable to such Person.


 


“Key
Employees” is defined in Section 6.2(d).


 


“knowledge
of the Company” or “Company’s knowledge” (including any derivation
thereof such as “known” or “knowing”) means the actual knowledge, after due
inquiry, of any of (i) the officers and directors of the Company and its
Subsidiaries and (ii) Michael Wu, or any facts or circumstances that would
be known after due inquiry by a Person holding a comparable office or job with
comparable experience and responsibility of any of the foregoing persons.


 


“Law”
means any federal, state, foreign, or local law, statute, ordinance, rule,
wage, order, regulation, writ, injunction, directive, order, judgment,
administrative interpretation, treaty, decree, administrative or judicial
decision and any other executive, legislative, regulatory or administrative
proclamation.


 


“Lease”
means all leases, subleases, licenses, rights to occupy or use and other
Contracts with respect to real property, including, in each case, all
amendments, modifications and supplements thereto and waivers and consents
thereunder.


 


“Leased
Premises” is defined in Section 3.10(c).


 


“Legal
Action” means any action, cause of action, claim, demand, suit, proceeding,
citation, summons, subpoena, inquiry or investigation of any nature, civil,
criminal, administrative, regulatory or otherwise, in Law or in equity, pending
or threatened, by or before any court, tribunal, arbitrator or other
Governmental Entity.


 


“Liability”
means any and all claims, debts, liabilities, obligations and commitments of
whatever nature, whether known or unknown, asserted or unasserted, fixed,
absolute or contingent, matured or unmatured, accrued or unaccrued, liquidated
or unliquidated or due or to become due, and whenever or however arising
(including those arising out of any Contract or 


 


62

















 


tort, whether based on negligence, strict liability or otherwise) and
whether or not the same would be required by GAAP to be reflected as a
liability in financial statements or disclosed in the notes thereto.


 


“Licenses”
means all Consents, notifications, licenses, permits, certificates, variances,
exemptions, franchises and other approvals or authorizations issued, granted,
given, required or otherwise made available by any Governmental Entity.


 


“Lien”
means any lien, pledge, mortgage, deed of trust, security interest, claim,
lease, license, charge, option, right of first refusal, easement, restriction,
reservation, servitude, proxy, voting trust or agreement, transfer restriction
under any stockholder or similar agreement, or encumbrance of any nature
whatsoever.


 


“Losses”
shall mean, without duplication for purposes of recovery, claims, losses,
liabilities, deficiencies, royalties, damages, diminution of value, reduction
in net operating losses for tax purposes, interest and penalties, costs and
expenses, including attorneys’ fees and expenses, and expenses of investigation
and defense.


 


“Management
Companies” means each of Wessex Asset Management Limited (UK), Trust
Advisors LLC, JMG Capital Management LLC, Pacific Assets Management LLC, P/E
Investments LLC, Spencer Capital Management LC, Spencer Capital Offshore
Partners, LLC, Spencer Capital Partners LLC, Alternative Investment Partners,
LLC, Group G Capital Partners, LLC and Bricoleur Capital Management LLC, except
for any such company that is a Subsidiary of the Company.


 


“Material
Contract” means with respect to the Company and its Subsidiaries:


 


(i)                                     any
collective bargaining Contract;


 


(ii)                                  any
Employment Agreement involving compensation in excess of $100,000 per year;


 


(iii)                               any
Contract or plan, including any stock option plan, stock appreciation rights
plan or stock purchase plan, any of the benefits of which will be increased, or
the vesting of benefits of which will be accelerated, by the occurrence of the
Merger or any of the other transactions contemplated by this Agreement and the
Transaction Agreements or the value of any of the benefits of which will be
calculated on the basis of the Merger or any of the other transactions
contemplated by this Agreement or the Transaction Agreements;


 


(iv)                              any
lease of personal property having a value individually in excess of  $100,000;


 


(v)                                 any
Contract of guaranty to any third party in excess of $50,000;


 


(vi)                              any
Contract containing any covenant limiting the freedom of the Company or any of
its Subsidiaries to engage in any line of business or in any geographic
territory or to compete with any Person, or which grants to any Person any
exclusivity to any geographic territory, any customer, or any product or
service;


 


63

















 


(vii)                           any
Contract relating to capital expenditures and involving future payments in
excess of $100,000 in the
aggregate;


 


(viii)                        any
Contract not already fully performed relating to the acquisition or disposition
of assets or any interest in any business enterprise outside the ordinary
course of the Company’s or any of its Subsidiaries’ businesses or any Contract
relating to the acquisition of assets or any interest in any business
enterprise;


 


(ix)                                any
Contract relating to the borrowing of money or the extension of credit or
evidencing any Debt or securing such Debt;


 


(x)                                   any
Contract pursuant to which the Company or any of its Subsidiaries has advanced
or loaned any amount to any Stockholder or any Employee or consultant thereof
or any of its Subsidiaries, other than business travel advances in the ordinary
course of business consistent with past practice;


 


(xi)                                any
joint venture, partnership, strategic alliance or other Contract involving the
sharing of profits, losses, costs or liabilities with any Person;


 


(xii)                             any
Investment Advisory Contract;


 


(xiii)                          any
active Contract constituting an agreement or arrangement for the sale or
promotion of investment management and/or advisory services;


 


(xiv)                         any
Contract relating to custody arrangements, transfer agent agreements and
similar agreements; or


 


(xv)                            any
other Contract that involves $100,000
or more.


 


“Mediator” is
defined in Section 8.4(b).


 


“Merger”
is defined in Recital A.


 


“Merger Sub”
is defined in the Preamble.


 


“Net
Contract Amount” means (i) the sum of the amount payable by the Company pursuant to
the Agreement, dated as of July 26, 2007, between the Company and
Ladenburg Thalmann & Co. Inc. and the Agreement, dated as of September 17,
2007, between the Company and Torsiello Capital Advisors minus (ii) amounts
payable by Parent pursuant to the Services Agreement between Parent and Wagjag, Inc.,
dated as of June 7, 2007.


 


“Objection
Notice” is defined in Section 2.4(a).


 


“Outstanding
Common Stock Number” means the sum of the total number of shares of Company
Common Stock issued and outstanding immediately prior to the Effective Time.


 


“Parent”
is defined in the Preamble.


 


“Parent
Bylaws” means the Bylaws of Parent.


 


64

















 


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


 


“Parent
Charter” means the Certificate of Incorporation of Parent.


 


“Parent
Common Stock” means the common stock, $0.001 par value per share, of
Parent.


 


“Parent
Contracts” is defined in Section 4.13(a).


 


“Parent
Covered Person” is defined in Section 4.23.


 


“Parent
Financial Statements” is defined in Section 4.7(b).


 


“Parent
Material Adverse Effect” is defined in Section 4.1.


 


“Parent
Preferred Stock” means the preferred stock, $0.01 par value per share, of
Parent.


 


“Parent
Proposal” is defined in Section 5.3(b).


 


“Parent
Proxy Statement” is defined in Section 5.6(c).


 


“Parent
Schedules” is defined in Article IV.


 


“Parent SEC
Reports” is defined in Section 4.7(a).


 


“Parent
Shares” is defined in Section 2.1(c).


 


“Parent
Stockholder Approval” means the vote of holders of Parent Common Stock
necessary to approve the Merger, this Agreement and the Charter Amendment.


 


“Parent
Stockholders’ Meeting” is defined in Section 5.6(g).


 


“Parent
Stock Price” means $8.00 per share of Parent Common Stock.


 


“Parent Tax
Returns” is defined in Section 4.20(a).


 


“Parent
Units” means those units consisting of one share of Parent Common Stock and
one Parent Warrant issued in connection with Parent’s initial public offering.


 


“Parent
Warrants” means the warrants to purchase one share of Parent Common Stock
issued in connection with Parent’s initial public offering.


 


“Performance
Fee” means any fee, allocation, carried interest or other payment or
distribution receivable by the Company or a Subsidiary of the Company as
investment adviser, manager, general partner, managing member or shareholder
based upon a share of capital gains or capital appreciation of the funds or any
portion of the funds invested in a Company Private Fund or managed account.


 


“Permits”
is defined in Section 3.15(b).


 


65

















 


“Permitted Liens”
means, with respect to any Person, Liens for (a) Taxes, assessments and
other governmental charges, if such Taxes, assessments or charges shall not be
due and payable or which the Person is contesting in good faith and for which
adequate reserves have been established; and (b) inchoate workmen’s,
repairmen’s or other similar Liens arising or incurred in the ordinary course
of business consistent with past practices in respect of obligations which are
not overdue, minor title defects and recorded easements, which workmen’s,
repairmen’s or other similar Liens, minor title defects and recorded easements
do not, individually or in the aggregate, impair the continued use, occupancy,
value or marketability of title of the property to which they relate or the
business of the Company and its Subsidiaries, assuming that the property is
used on substantially the same basis as such property is currently being used
by the Company and its Subsidiaries and any Lien against or affecting leased
property which is not a violation of the lease for such property.


 


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


 


“Pro Rata
Share” with respect to any Stockholder means (a) the Parent Shares
divided by the Outstanding Common Stock Number multiplied by (b) the
number of shares of Common Stock owned by such Stockholder.


 


“Proxy Statement”
is defined in Section 5.6(c).


 


“Registered
Intellectual Property” means all United States, international and foreign: (i) patents
and patent applications (including provisional applications and design patents
and applications) and all reissues, divisions, divisionals, renewals,
extensions, counterparts, continuations and continuations-in-part thereof,
and all patents, applications, documents and filings claiming priority thereto
or serving as a basis for priority thereof; (ii) registered trademarks,
service marks, applications to register trademarks, applications to register
service marks, intent-to-use applications, or other registrations or
applications related to trademarks; (iii) registered copyrights and
applications for copyright registration; (iv) domain name registrations
and Internet number assignments; and (v) any other Intellectual Property
that is the subject of an application, certificate, filing, registration or
other document issued, filed with, or recorded by any Governmental Entity.


 


“Registration
Statement” is defined in Section 5.6(d).


 


“Release”
has the meaning set forth in Section 101(22) of CERCLA.


 


“SEC”
means the Securities and Exchange Commission.


 


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


 


 “Series F Preferred Stock” means
the Series F Convertible Preferred Stock, par value $0.01 per share, of
the Company.


 


“Similar
Law” is defined in Section 3.20(i).


 


66

















 


“Stockholder
Agreements” means (i) the Stockholder Agreement, dated as of September 30,
1999, among the Company, Bruce H. Lipnick, Arnold L. Mintz, Frederick G.
Freundlich, as Trustee of the Cambridge II Trust U/A/D April 22, 1996,
Arnold L. Mintz and Eileen Mintz, as Trustees of the Trust Indenture dated September 5,
1997, and Arnold L. Mintz, Eileen Mintz and Robert Obeiter, as Trustees of the
Ross Douglas Mintz 1997 Trust dated September 5, 1997 and (ii) the
Amended and Restated Shareholders Agreement, dated as of April 12, 2002,
among Bruce H. Lipnick, Arnold L. Mintz, AJG Financial Services, Inc.,
Arthur J. Gallagher & Co., Greystone Capital Partners I, L.P., Nikko
Cordial Securities Inc. and the Company, as amended.


 


“Stockholders”
means the holders of shares of Company Capital Stock.


 


“Straddle
Period” is defined in Section 8.2(c).


 


“Subsidiary”
of any Person means another Person, an amount of the voting securities, other
voting ownership or voting partnership interests of which is sufficient to
elect at least a majority of its Board of Directors or other governing body
(or, if there are no such voting interests, a majority of the Equity Securities
of which) is owned directly or indirectly by such first Person.


 


“Subsidiary
Securities” is defined in Section 3.2(b).


 


“Surviving
Corporation” is defined in Section 1.1.


 


“Tax”
means any federal, state, local and foreign net income, alternative or add-on
minimum, estimated, gross income, gross receipts, sales, use, ad valorem, value
added, transfer, franchise, capital profits, lease, service, license,
withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property, environmental or windfall profit tax, customs duty or other
tax, governmental fee or other like assessment or charge of any kind whatsoever
(including
any Tax imposed under Section 1374, and any liability incurred or borne by
virtue of the application of Treasury Regulation Section 1.1502-6 (or any
similar or corresponding provision of state, local or foreign Law),as a
transferee or successor, by contract or otherwise), together with all interest,
penalties, additions to tax and additional amounts with respect thereto.


 


“Tax
Returns” means all returns, declarations, reports, claims for refund,
information statements and other documents relating to Taxes, including all
schedules and attachments thereto, and including all amendments thereof.


 


“Termination
Date” is defined in Section 7.1(b).


 


“Third
Party Claim” is defined in Section 8.4(a).


 


“Transactions”
means the Merger, the issuance by Parent of shares of Parent Common Stock in
connection with the Merger, the Charter Amendment (as defined herein) and the
other transactions contemplated by this Agreement.


 


“Transaction
Agreements” means this Agreement, together with the Certificate of
Merger, Escrow Agreement and the Affiliate Letters and any other agreements or
documents contemplated by this Agreement.


 


67

















 


“Trust
Account” is defined in Section 4.22.


 


“Trust
Agreement” is defined in Section 4.22.


 


“Trust
Claim” is defined in Section 10.9.


 


“Trustee”
is defined in Section 4.22.


 


“Trust Fund”
is defined in Section 4.22.


 


“Upward
Adjustment Amount” is defined in Section 2.4(d).


 


“User
Account Information” shall mean any and all data, content and information
provided by any user of the Company’s website(s) in connection with any
activity on the Company’s website(s) (including any personally-identifying
information, and any information disclosing that a user accessed the Company’s
website(s) including, without limitation, the user name, user id and
encrypted password for each active account on the Company’s website(s).


 


9.2.                              Construction.


 


(a)                                  For
purposes of this Agreement, whenever the context requires:  the singular number shall include the plural,
and vice versa; the masculine gender shall include the feminine and neuter
genders; the feminine gender shall include the masculine and neuter genders;
and the neuter gender shall include the masculine and feminine genders.


 


(b)                                 Any
rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not be applied in the construction or
interpretation of this Agreement.


 


(c)                                  The
words “include” and “including,” and variations thereof, shall not be deemed to
be terms of limitation, but rather shall be deemed to be followed by the words “without
limitation.”


 


(d)                                 Except
as otherwise indicated, all references in this Agreement to “Sections,” “Exhibits”
and “Schedules” are intended to refer to Sections of this Agreement, and
Exhibits and Schedules to this Agreement or to the Company Schedule and
Parent Schedule, as the context may require. The Company Schedules and
Parent Schedules shall be deemed a part of, and is incorporated by
reference into, this Agreement.


 


(e)                                  The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.


 


(f)                                    Whenever
this Agreement requires the disclosure of an agreement on the Company Schedule or
the delivery to Parent of an agreement, that disclosure requirement or delivery
requirement, as applicable, shall also require the disclosure or delivery of
each and every amendment, extension, exhibit, attachment, schedule, addendum,
appendix, statement of work, change order, and any other similar instrument or
document relating to that agreement.


 


68

















 


ARTICLE X

GENERAL PROVISIONS


 


10.1.                        Notices.
All notices and other communications hereunder shall be in writing and shall be
deemed given if properly addressed:  (i) if
delivered personally, by commercial delivery service or by facsimile (with
acknowledgment of a complete transmission), on the day of delivery or (ii) if
delivered by internationally recognized courier (appropriately marked for next
day delivery), one Business Day after dispatch or (iii) if delivered by
registered or certified mail (return receipt requested) or by first class mail,
3 Business Days after mailing. Notices shall be deemed to be properly addressed
to any party hereto if addressed to the following addresses (or at such other
address for a party as shall be specified by like notice):


 


(a)                                  if
to Parent or Merger Sub, to:


 


Tailwind Financial Inc.


BCE Place, 181 Bay Street


Suite 2040


Toronto, ON M5J 2T3


Attention: Gordon A. McMillan


Facsimile: 416.401.2423


 


with a copy (which shall not constitute
notice) to:


 


Bingham McCutchen LLP


399 Park Avenue 

New York, NY 10022-4689


Attention: 
Floyd I. Wittlin


Facsimile: 212.702.3625


 


(b)                                 if
to the Company, to:


 


Asset Alliance Corporation


800 Third Avenue, Suite 2200


New York, NY 10022


Attention: 
Bruce H. Lipnick


Facsimile: 
212.207.8785


 


with a copy (which shall not constitute
notice) to:


 


Asset Alliance Corporation


800 Third Avenue, Suite 2200


New York, NY 10022


Attention: 
Xiao-Hong Jing


Facsimile: 
212.207.8785


 


and


 


Skadden Arps, Slate, Meagher & Flom, LLP


 


69

















 


Four Times Square


New York, New York 10036


Attention: Richard T. Prins


Facsimile: 917.777.2790


 


(c)                                  if
to the Company Representative to:


 


Bruce H.
Lipnick


800 Third Avenue, Suite 2200


New York, NY
10022


Facsimile:
212.207.8785


 


10.2.                        Entire
Agreement. Except for the Confidentiality Agreement, this Agreement, the
Schedules and Exhibits hereto, and the documents and instruments and other
agreements among the parties hereto referenced herein constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof.


 


10.3.                        Severability.
In the event that any provision of this Agreement or the application thereof
becomes or is declared by a court of competent jurisdiction to be illegal, void
or unenforceable, the remainder of this Agreement will continue in full force
and effect and the application of such provision to other Persons or
circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that will
achieve, to the greatest extent possible, the economic, business and other
purposes of such void or unenforceable provision.


 


10.4.                        Specific
Performance. The parties hereto agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly 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 hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at Law or in equity.


 


10.5.                        Successors
and Assigns; Assignment; Parties in Interest.


 


(a)                                  This
Agreement shall be binding upon each Stockholder and each of their respective
personal representatives, executors, administrators, estates, heirs, successors
and assigns (if any), and Parent and Merger Sub and their respect successors
and assigns, if any. This Agreement shall inure to the benefit of the parties
hereto and their respective successors and assigns (if any). No obligation of
the Company in this Agreement shall become an obligation of the Surviving
Corporation after the Effective Time.


 


(b)                                 No
party may assign any of its rights or delegate any of its obligations
under this Agreement without the prior written consent of Parent and the
Company, except that Parent may assign its rights and delegate its
obligations hereunder to any Affiliate without the 


 


70

















 


Company’s consent, but
Parent shall remain jointly and severally liable with any such assignee(s) with
respect to all obligations of Parent hereunder.


 


(c)                                  Except
as provided in the following sentence, nothing in this Agreement, express or
implied, is intended to or shall confer upon any Person other than a party
hereto any rights, interests, benefits or other remedies of any nature under or
by reason of this Agreement. The indemnification provisions of this Agreement
are intended to benefit the Indemnified Parties, each Indemnified Party shall
be deemed a third-party beneficiary of such provisions of this Agreement and
this Agreement shall be enforceable by the Indemnified Parties to that extent. Except
as set forth in this Section 10.5(c), none of the provisions of
this Agreement is intended to provide any rights or remedies to any Person
other than the parties and their respective successors and assigns, if any.


 


10.6.                        Waiver.
No failure on the part of any Person to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or remedy;
and no single or partial exercise of any such power, right privilege or remedy
shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy.


 


10.7.                        Governing
Law; Venue.


 


(a)                                  This
Agreement shall be construed in accordance with, and governed in all respects
by, the internal Laws of the State of Delaware, except that the DGCL shall
apply to the extent required in connection with the Merger.


 


(b)                                 Unless
otherwise explicitly provided in this Agreement, any action, claim, suit or
proceeding relating to this Agreement or the enforcement of any provision of
this Agreement shall be brought or otherwise commenced in any state or federal
court located in the State of Delaware. Each party hereto (i) expressly
and irrevocably consents and submits to the jurisdiction of each such court,
and each appellate court located in the State of Delaware, in connection with
any such proceeding; (ii) agrees that each such court shall be deemed to
be a convenient forum; and (iii) agrees not to assert, by way of motion,
as a defense or otherwise, in any such proceeding commenced in any such court,
any claim that such party is not subject personally to the jurisdiction of such
court, that such proceeding has been brought in an inconvenient forum, that the
venue of such proceeding is improper or that this Agreement or the subject
matter of this Agreement may not be enforced in or by such court.


 


10.8.                        Waiver
of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT
MAY ARISE UNDER THIS AGREEMENT OR ANY TRANSACTION AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, ANY TRANSACTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. EACH OF THE COMPANY, PARENT AND MERGER SUB (A) CERTIFIES
THAT NO REPRESENTATIVE, 


 


71

















 


AGENT OR ATTORNEY OF THE
OTHER PARTIES HAS REPRESENTED, EXPRESSLY OR OTHERWISE THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 10.8.


 


10.9.                        No
Claims Against Trust Account. The Company hereby agrees that (a) the
Company does not have any right, title, interest or claim of any kind against
the Trust in or to any monies in the Trust Account (“Trust Claim”) and
hereby waives any Trust Claim it may have in the future as a result of, or
arising out of, this Agreement or any Transaction Agreement and (b) the Company will not
seek recourse against the Trust Account for any reason whatsoever.


 


10.10.                  Other
Remedies. Except as otherwise provided herein, any and all remedies herein
expressly conferred upon a party will be deemed cumulative with and not
exclusive of any other remedy conferred hereby, or by law or equity upon such
party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.


 


10.11.                  Counterparts;
Facsimile Delivery. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any signature page delivered
by facsimile or electronic image transmission shall be binding to the same
extent as an original signature page. Any party that delivers a signature page by
facsimile or electronic image transmission shall deliver an original counterpart to
any other party that requests such original counterpart.


 


72

















 


IN WITNESS
WHEREOF, each of the parties to this Agreement has executed and delivered this
Agreement, or caused this Agreement to be executed and delivered by its duly
authorized representative, as of the date first written above.


 


	
   

  	
  TAILWIND
  FINANCIAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Andrew A. McKay

  	
   

  
	
   

  	
   

  	
  Name:  Andrew
  A. McKay

  	
   

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TWF
  ACQUISITION CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Andrew A. McKay

  	
   

  
	
   

  	
   

  	
  Name:
    Andrew A. McKay

  	
   

  
	
   

  	
   

  	
  Title:
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ASSET
  ALLIANCE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Bruce H. Lipnick

  	
   

  
	
   

  	
   

  	
  Name:   Bruce
  H. Lipnick

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer