Document:

Exhibit 10.1

 

Execution
Version   

 

 

FORMATION AGREEMENT

 

BY AND AMONG

 

GREEN PARK FINANCIAL LIMITED
PARTNERSHIP,

(a District of Columbia limited
partnership),

 

WALKER & DUNLOP, INC.,

(a Delaware corporation),

 

COLUMN GUARANTEED LLC,

(a Delaware limited liability
company),

 

and

 

WALKER & DUNLOP, LLC,

(a Delaware limited liability
company)

 

 

January 30, 2009

 

 

 Confidential

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  CONTRIBUTION
  AND EXCHANGE

  	
  14

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Agreement
  to Contribute and Exchange

  	
  14

  
	
   

  	
  2.2

  	
  Issuance
  of Company Units

  	
  17

  
	
   

  	
  2.3

  	
  Assumption
  of Liabilities

  	
  17

  
	
   

  	
  2.4

  	
  Post-Closing
  True-ups

  	
  19

  
	
   

  	
  2.5

  	
  Consent
  of Third Parties

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  CLOSING;
  EFFECTIVE DATE

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Location,
  Date

  	
  21

  
	
   

  	
  3.2

  	
  Deliveries

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  REPRESENTATIONS
  AND WARRANTIES WITH RESPECT TO THE GPF PARTIES

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Corporate
  Status

  	
  22

  
	
   

  	
  4.2

  	
  Authorization

  	
  23

  
	
   

  	
  4.3

  	
  Consents
  and Approvals

  	
  23

  
	
   

  	
  4.4

  	
  Stock
  Ownership

  	
  23

  
	
   

  	
  4.5

  	
  Financial
  Statements

  	
  23

  
	
   

  	
  4.6

  	
  Title
  to Contributed GPF Assets and Related Matters

  	
  24

  
	
   

  	
  4.7

  	
  Real
  Property

  	
  24

  
	
   

  	
  4.8

  	
  Accounts
  Receivable

  	
  25

  
	
   

  	
  4.9

  	
  Serviced
  Loans

  	
  25

  
	
   

  	
  4.10

  	
  Liabilities

  	
  26

  
	
   

  	
  4.11

  	
  Legal
  Proceedings and Compliance with Law

  	
  26

  
	
   

  	
  4.12

  	
  Contracts

  	
  27

  
	
   

  	
  4.13

  	
  Insurance

  	
  28

  
	
   

  	
  4.14

  	
  Intellectual
  Property

  	
  28

  
	
   

  	
  4.15

  	
  Employee
  Relations

  	
  29

  
	
   

  	
  4.16

  	
  ERISA

  	
  29

  
	
   

  	
  4.17

  	
  Absence
  of Certain Changes

  	
  30

  
	
   

  	
  4.18

  	
  Finder’s
  Fees

  	
  31

  
	
   

  	
  4.19

  	
  Additional
  Information

  	
  31

  
	
   

  	
  4.20

  	
  Taxes

  	
  31

  
	
   

  	
  4.21

  	
  Limitation
  of Representations and Warranties

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  REPRESENTATIONS
  AND WARRANTIES WITH RESPECT TO CGL

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Corporate
  Status

  	
  31

  
	
   

  	
  5.2

  	
  Authorization

  	
  32

  
	
   

  	
  5.3

  	
  Consents
  and Approvals

  	
  32

  
	
   

  	
  5.4

  	
  Capitalization

  	
  32

  
	
   

  	
  5.5

  	
  Financial
  Statements

  	
  32

  
	
   

  	
  5.6

  	
  Title
  to Contributed CGL Assets and Related Matters

  	
  33

  

 

i

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.7

  	
  Real
  Property

  	
  33

  
	
   

  	
  5.8

  	
  Accounts
  Receivable

  	
  33

  
	
   

  	
  5.9

  	
  Serviced
  Loans

  	
  34

  
	
   

  	
  5.10

  	
  Liabilities

  	
  35

  
	
   

  	
  5.11

  	
  Legal
  Proceedings and Compliance with Law

  	
  35

  
	
   

  	
  5.12

  	
  Contracts

  	
  36

  
	
   

  	
  5.13

  	
  Insurance

  	
  37

  
	
   

  	
  5.14

  	
  Intellectual
  Property

  	
  37

  
	
   

  	
  5.15

  	
  ERISA

  	
  38

  
	
   

  	
  5.16

  	
  Absence
  of Certain Changes

  	
  38

  
	
   

  	
  5.17

  	
  Finder’s
  Fees

  	
  39

  
	
   

  	
  5.18

  	
  Additional
  Information

  	
  39

  
	
   

  	
  5.19

  	
  Taxes

  	
  39

  
	
   

  	
  5.20

  	
  Limitation
  of Representations and Warranties

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  REPRESENTATIONS
  AND WARRANTIES WITH RESPECT TO THE COMPANY

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Organizational
  Status

  	
  40

  
	
   

  	
  6.2

  	
  Authorization

  	
  40

  
	
   

  	
  6.3

  	
  Consents
  and Approvals

  	
  40

  
	
   

  	
  6.4

  	
  Valid
  Issuance

  	
  40

  
	
   

  	
  6.5

  	
  Capitalization

  	
  40

  
	
   

  	
  6.6

  	
  Legal
  Proceedings and Compliance with Law

  	
  41

  
	
   

  	
  6.7

  	
  Absence
  of Liabilities

  	
  41

  
	
   

  	
  6.8

  	
  Finder’s
  Fees

  	
  41

  
	
   

  	
  6.9

  	
  Limitation
  of Representations and Warranties

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  COVENANTS
  OF THE PARTIES

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Conduct
  of Business

  	
  41

  
	
   

  	
  7.2

  	
  Access
  to Information

  	
  43

  
	
   

  	
  7.3

  	
  Satisfaction
  of Liabilities

  	
  43

  
	
   

  	
  7.4

  	
  No
  Solicitation

  	
  43

  
	
   

  	
  7.5

  	
  Update
  of Disclosure Letters

  	
  43

  
	
   

  	
  7.6

  	
  Fulfillment
  of Closing Conditions

  	
  44

  
	
   

  	
  7.7

  	
  Transfer
  of Affiliated Party Assets

  	
  45

  
	
   

  	
  7.8

  	
  Public
  Announcements

  	
  45

  
	
   

  	
  7.9

  	
  Tax
  Matters

  	
  45

  
	
   

  	
  7.10

  	
  Confidentiality

  	
  45

  
	
   

  	
  7.11

  	
  Expenses

  	
  46

  
	
   

  	
  7.12

  	
  Employees

  	
  46

  
	
   

  	
  7.13

  	
  CGL
  Credit Risk

  	
  46

  
	
   

  	
  7.14

  	
  Capmark
  Contract

  	
  46

  
	
   

  	
  7.15

  	
  FHA/HUD
  Operating Deficit

  	
  46

  
	
   

  	
  7.16

  	
  CGL
  Actual Losses Contribution

  	
  46

  
	
   

  	
  7.17

  	
  GPF
  Actual Losses Contribution

  	
  47

  
	
   

  	
  7.18

  	
  HUD
  Transfer Agreement; HUD Assets

  	
  47

  
	
   

  	
  7.19

  	
  Post-Signing
  Servicing Tapes

  	
  47

  

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.20

  	
  Additional
  Financial Statements; Reports

  	
  47

  
	
   

  	
  7.21

  	
  CGL
  Affiliate Transactions

  	
  47

  
	
   

  	
  7.22

  	
  Estimated
  CGL Closing Balance Sheet

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  CONDITIONS
  PRECEDENT TO OBLIGATIONS OF CGL

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Representations
  and Warranties

  	
  47

  
	
   

  	
  8.2

  	
  Agreements,
  Conditions and Covenants

  	
  48

  
	
   

  	
  8.3

  	
  Material
  Adverse Effect

  	
  48

  
	
   

  	
  8.4

  	
  Required
  Consents; Deliverables

  	
  48

  
	
   

  	
  8.5

  	
  Legality

  	
  48

  
	
   

  	
  8.6

  	
  Disclosure
  Letters

  	
  48

  
	
   

  	
  8.7

  	
  GPF
  Net Working Capital

  	
  48

  
	
   

  	
  8.8

  	
  Mortgage
  Program Sponsor Transfer Agreements Approval

  	
  48

  
	
   

  	
  8.9

  	
  Serviced
  Loan Portfolio

  	
  48

  
	
   

  	
  8.10

  	
  Legal
  Opinion

  	
  48

  
	
   

  	
  8.11

  	
  GPF
  Contribution

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  CONDITIONS
  PRECEDENT TO OBLIGATIONS OF THE GPF PARTIES

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Representations
  and Warranties

  	
  49

  
	
   

  	
  9.2

  	
  Agreements,
  Conditions and Covenants

  	
  49

  
	
   

  	
  9.3

  	
  Material
  Adverse Effect

  	
  49

  
	
   

  	
  9.4

  	
  Required
  Consents; Deliverables

  	
  49

  
	
   

  	
  9.5

  	
  Legality

  	
  49

  
	
   

  	
  9.6

  	
  CGL
  Disclosure Letter

  	
  49

  
	
   

  	
  9.7

  	
  CGL
  Contributions

  	
  50

  
	
   

  	
  9.8

  	
  Mortgage
  Program Sponsor Transfer Agreements Approval

  	
  50

  
	
   

  	
  9.9

  	
  Serviced
  Loan Portfolio

  	
  50

  
	
   

  	
  9.10

  	
  Legal
  Opinion

  	
  50

  
	
   

  	
  9.11

  	
  Commission
  Agreements

  	
  50

  
	
   

  	
  9.12

  	
  Retention
  Agreement

  	
  50

  
	
   

  	
  9.13

  	
  Ownership
  of CGL

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  CONDITIONS
  PRECEDENT TO OBLIGATIONS OF THE COMPANY

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Representations
  and Warranties

  	
  50

  
	
   

  	
  10.2

  	
  Agreements,
  Conditions and Covenants

  	
  50

  
	
   

  	
  10.3

  	
  Material
  Adverse Effect

  	
  51

  
	
   

  	
  10.4

  	
  Required
  Consents; Deliverables

  	
  51

  
	
   

  	
  10.5

  	
  Legality

  	
  51

  
	
   

  	
  10.6

  	
  Disclosure
  Letter

  	
  51

  
	
   

  	
  10.7

  	
  CGL
  Contributions

  	
  51

  
	
   

  	
  10.8

  	
  GPF
  Net Working Capital

  	
  51

  
	
   

  	
  10.9

  	
  Mortgage
  Program Sponsor Transfer Agreements Approval

  	
  51

  
	
   

  	
  10.10

  	
  CGL
  Serviced Loan Portfolio

  	
  51

  
	
   

  	
  10.11

  	
  GPF
  Serviced Loan Portfolio

  	
  51

  
	
   

  	
  10.12

  	
  Legal
  Opinions

  	
  51

  

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.13

  	
  GPF
  Contribution

  	
  52

  
	
   

  	
  10.14

  	
  Commission
  Agreements

  	
  52

  
	
   

  	
  10.15

  	
  Retention
  Agreement

  	
  52

  
	
   

  	
  10.16

  	
  Ownership
  of CGL

  	
  52

  
	
   

  	
  10.17

  	
  Estimated
  CGL Closing Balance Sheet

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  INDEMNIFICATION

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.1

  	
  By
  CGL

  	
  52

  
	
   

  	
  11.2

  	
  By
  the GPF Parties

  	
  52

  
	
   

  	
  11.3

  	
  Procedure
  for Claims

  	
  53

  
	
   

  	
  11.4

  	
  Claims
  Period

  	
  54

  
	
   

  	
  11.5

  	
  Third
  Party Claims

  	
  54

  
	
   

  	
  11.6

  	
  Effect
  of Investigation or Knowledge

  	
  55

  
	
   

  	
  11.7

  	
  Contingent
  Claims

  	
  55

  
	
   

  	
  11.8

  	
  Company
  Units in Satisfaction of Indemnification Claims

  	
  55

  
	
   

  	
  11.9

  	
  Exclusive
  Remedy

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  TERMINATION

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  Grounds
  for Termination

  	
  56

  
	
   

  	
  12.2

  	
  Effect
  of Termination

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  GENERAL
  MATTERS

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.1

  	
  Contents
  of Agreement

  	
  56

  
	
   

  	
  13.2

  	
  Amendment,
  Parties in Interest, Assignment, Etc.

  	
  56

  
	
   

  	
  13.3

  	
  Further
  Assurances

  	
  57

  
	
   

  	
  13.4

  	
  Interpretation

  	
  57

  
	
   

  	
  13.5

  	
  Counterparts

  	
  57

  
	
   

  	
  13.6

  	
  Disclosure
  Letters

  	
  57

  
	
   

  	
  13.7

  	
  Negotiated
  Agreement

  	
  58

  
	
   

  	
  13.8

  	
  Severability

  	
  58

  
	
   

  	
  13.9

  	
  Specific
  Performance

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  NOTICES

  	
  58

  
	
   

  	
   

  	
   

  
	
  15.

  	
  GOVERNING
  LAW

  	
  59

  
	
   

  	
   

  	
   

  
	
  16.

  	
  BREAK-UP
  FEE

  	
  59

  

 

iv

 

FORMATION AGREEMENT

 

This
FORMATION AGREEMENT (this “Agreement”) is made as of January 30,
2009, by and among Green Park Financial Limited Partnership, a District of
Columbia limited partnership (“GPF”), Walker & Dunlop, Inc.,
a Delaware corporation (“W&D”), Column Guaranteed LLC, a Delaware
limited liability company (“CGL”) and Walker & Dunlop, LLC, a
Delaware limited liability company (the “Company,” and together with
GPF, W&D and CGL, the “Parties,” and, individually, each a “Party”).  Certain other terms are used herein as
defined below in Section 1 or elsewhere in this Agreement.

 

Background

 

CGL
originates, underwrites, sells and services multifamily real estate loans.

 

GPF
originates, underwrites, sells and services multifamily real estate loans.

 

W&D
is an Affiliate of GPF that originates, underwrites, sells and services
commercial real estate loans, as well as services other third-party real-estate
mortgage portfolios.

 

The
GPF Parties and CGL desire to create the Company in order to create a vehicle
by which they may aggregate their assets and experience for the purpose of
enhancing the business of each of GPF, W&D and CGL.

 

This
Agreement sets forth the terms and conditions upon which the Parties will
contribute certain of their assets to the Company in exchange for Company Units
and the Parties will each undertake the various transactions that are
conditions precedent to the Closing.

 

Terms and Conditions

 

NOW,
THEREFORE, the Parties, intending to be legally bound hereby, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in consideration of the mutual covenants contained herein,
hereby agree as follows:

 

1.             Definitions.

 

For
convenience, certain terms used in more than one part of this Agreement are
listed in alphabetical order and defined or referred to below (such terms as
well as any other terms defined elsewhere in this Agreement shall be equally
applicable to both the singular and plural forms of the terms defined).

 

“Accounts
Receivable” means, as of any date, any trade accounts receivable, notes
receivable, bid, performance, lease, utility or other deposits, employee
advances and any other miscellaneous receivables of a Party (excluding any
employee loans to purchase stock).

 

“Acquisition
Proposal” is defined in Section 7.4.

 

“Action”
is defined in Section 11.5.

 

“Affiliates”
means, with respect to a particular Party, Persons or entities controlling,
controlled by or under common control with that Party, as well as any officers
and their nuclear family members, directors and their nuclear family members,
and majority-owned entities of that Party and of its other 

 

Confidential

 

 

 

Affiliates.
For the purposes of the foregoing, ownership, directly or indirectly, of any of
the voting stock or other equity interest shall be deemed to constitute
control.

 

“Agency
Documents” means, with respect to a Party, all of the Contracts with any Mortgage
Program Sponsor including but not limited to (i) any relating to Fannie
Mae special pool purchase Contracts, Fannie Mae negotiated Contracts, the
Fannie Mae DUS and Negotiated Transaction Programs (including the DUS
Agreements), (ii) any relating to the Freddie Mac Program Plus, Freddie
Mac Targeted Affordable Housing, and (iii) any relating to the multifamily
loan and mortgage backed securities program of HUD and Ginnie Mae, including
any terms incorporated by reference, such as the Fannie Mae, Freddie Mac, HUD
or Ginnie Mae Guides, Handbooks, Regulations and other announcements, under
which such Party originates, services, shares losses or has other obligations
with respect to such programs.

 

“Agreement”
means this Agreement, the Exhibits, the GPF Disclosure Letter, the CGL
Disclosure Letter and the Company Disclosure Letter.

 

“Assignment
and Assumption Agreements” means those assignment and assumption agreements by
and between the Company and each of GPF, W&D and CGL whereby the
contributions, assignments and assumptions contemplated by Article 2
shall be consummated, each in substantially the same form as Exhibit A.

 

“Assumed
CGL Liabilities” is defined in Section 2.3(c).

 

“Assumed
GPF Liabilities” is defined in Section 2.3(a).

 

“Benefit
Plan” means, with respect to a Party, all employment, compensation, vacation,
bonus, deferred compensation, incentive compensation, stock purchase, stock
option, stock appreciation right or other stock-based incentive, severance,
change-in-control, or termination pay, hospitalization or other medical,
disability, life or other insurance, supplemental unemployment benefits,
profit-sharing, pension or retirement 
plans, programs, arrangements, or employee benefit plans of such Party
within the meaning of Section 3(3) of ERISA, sponsored, maintained or
contributed to or required to be contributed to by such Party or any ERISA
Affiliate and any related or separate Contracts, plans, trusts, programs,
policies and arrangements that provide benefits of economic value to any
present or, to such Party’s knowledge, former employee of such Party or
director, or present or former beneficiary, dependent or assignee of any such
present or former employee or director.

 

“Bond”
means a federally tax-exempt or taxable revenue bond issued by a state or local
Governmental Body to provide for the financing of housing properties or other
programs that allow for the issuance of tax exempt bonds in connection with
housing.

 

“Business”
means the entire business, operations and facilities of a Party including the
goodwill appurtenant to such business and the furnishing of services to
customers thereof.

 

“Business
Day” means any day other than a Saturday or Sunday, or a day on which the
banking institutions of the City of New York are authorized or obligated by law
or executive order to close.

 

“CFI”
means Column Financial, Inc.

 

“CFI
Backstop Contribution” is defined in Section 7.13.

 

“CFI
Capmark Contribution” is defined in Section 7.14.

 

2

 

“CFI
Employee Contribution” is defined in Section 7.12.

 

“CFI
FHA Contribution” is defined in Section 7.15.

 

“CGL”
is defined above in the preamble.

 

“CGL
Actual Losses Contribution” is defined in Section 7.16.

 

“CGL
Actual Losses True-Up Contribution” is defined in Section 7.16.

 

“CGL
Balance Sheet” is defined in Section 5.5.

 

“CGL
Balance Sheet Date” is defined in Section 5.5.

 

“CGL
Closing Balance Sheet” is defined in Section 10.17.

 

“CGL
Closing Certificate” means a certificate of the Chief Executive Officer of CGL
to the effect set forth in Sections 9.1, 9.2, 9.7, 9.9, 9.13, 10.1, 10.2,
10.7, 10.10, and 10.16, insofar as such Sections relate to CGL, and
such certificate shall be deemed a representation of CGL for the purposes of Article 11.

 

“CGL
Contracts” is defined in Section 5.12(c).

 

“CGL
Disclosure Letter” means any of the disclosures hereto containing information
relating to CGL pursuant to Article 5 and other provisions hereof
that has been provided to the GPF Parties and the Company on the date hereof.

 

“CGL
Financial Statements” is defined in Section 5.5.

 

“CGL
Real Estate Leases” is defined in Section 5.7(b).

 

“CGL
Required Consents” is defined in Section 5.3.

 

“CGL
Servicing Tape” means CGL’s, or its service provider’s, electronic file
(including all tabs displayed therein) identified as “11-30-08 tape
12-8-2008DW.xls”  containing financial and
collateral mortgage loan terms and characteristics, and other relevant
information utilized by CGL in connection with the servicing of the Serviced
Loans, in each case as of November 30, 2008 and for each Serviced Loan as
to which CGL has Servicing Rights as of November 30, 2008, including for
each such Serviced Loan:  (a) the
original principal balance, (b) the principal amount outstanding at November 30,
2008, (c) the amount of the escrow and reserves in the custodial accounts,
(d) the escrow and reserve payment constants required (each shown
separately), (e) the interest rate, if any, paid to borrowers on escrow
and reserve balances, (f) the interest rate, (g) the interest only
period, if any, (h) the interest rate reset terms and timing, if floating
rate, (i) the servicing fee payable to CGL, (j) the amortization
term, (k) the loss-sharing levels, loss share percentages, tier and debt
service coverage ratios, if a Fannie Mae loan, and (l) the origination
date, maturity date, due date, grace period (if any) and other payment terms of
each such Serviced Loan, including prepayment limitations, defeasance
information, yield maintenance terms and dates, as applicable.

 

“CGL
Unrestricted Cash” shall mean, as of the relevant time of determination, cash
that is not restricted in any way; any cash pledged to a Mortgage Program
Sponsor or any other Person to secure any 

 

3

 

liquidity
or loss sharing obligations or for other reasons shall be deemed to be
restricted for the purposes of this definition.

 

“Charter
Documents” means a Person’s certificate or articles of incorporation,
certificate defining the rights and preferences of securities, articles of
organization, general or limited partnership agreement, certificate of limited
partnership, joint venture agreement or similar document governing the entity.

 

“Claim
Notice” is defined in Section 11.3(a).

 

“Claim
Response” is defined in Section 11.3(a).

 

“Closing”
is defined in Section 3.1.

 

“Closing
Certificates” means the GPF Closing Certificate, the CGL Closing Certificate
and the Company Closing Certificate delivered at the Closing pursuant to Section 3.2.

 

“Closing
Date” is defined in Section 3.1.

 

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

 

“Committed
Loans” means any loans for which a Party has issued a commitment letter to a
prospective borrower, but has not yet funded.

 

“Company”
is defined above in the preamble.

 

“Company
Closing Certificate” means a certificate of the Chief Executive Officer of the
Company to the effect set forth in Sections 8.1, 8.2, 9.1 and 9.2,
insofar as such Sections apply to the Company, and such certificate shall be
deemed a representation of the Company for the purposes of Article 11.

 

“Company
Disclosure Letter” means any of the disclosures hereto containing information
relating to the Company pursuant to Article 6 and other provisions
hereof that has been provided to the GPF Parties and CGL on the date hereof.

 

“Company
Required Consents” is defined in Section 6.3.

 

“Company
Units” means those membership interests of the Company that are designed as “Common
Units” in the Operating Agreement.

 

“Confidential
Information” means any confidential or proprietary information or Intellectual
Property of a Party, or that of any Affiliate of such Party, that is used in
its Business, including personnel information, know-how, data, databases,
advertising and marketing plans or systems, distribution and sales methods or
systems, sales and profit figures, customer and client lists, customer, client
information (including principal contacts, addresses and telephone numbers,
purchasing history, demographics, payment information and any other information)
and any relationships with customers, clients, suppliers and any other Persons
who have, or have had, business dealings with such Party’s Business, but shall
not include information that (i) was already in the receiving Party’s or
its representatives’ possession prior to the date of receipt of such
information, (ii) is or becomes available to the receiving Party or its
representatives from a source other than the disclosing Party, provided such
source is not known by the receiving Party to be bound by a confidentiality
agreement with the disclosing Party prohibiting such 

 

4

 

disclosure,
(iii) is or becomes generally available to the public and/or (iv) was
or is independently developed by the receiving Party or its representatives.

 

“Contingent
Claim” is defined in Section 11.7.

 

“Contract”
means any written or oral contract, agreement, lease, instrument, or other
document or commitment, arrangement, undertaking, practice or authorization
that is binding on any Person or its property under any applicable Law.

 

“Contributed
CGL Assets” is defined in Section 2.1(c).

 

“Contributed
GPF Assets” is defined in Section 2.1(a).

 

“Copyrights”
means any copyrights and registrations and applications therefore, including
all renewals and extensions thereof and rights corresponding thereto in both
published and unpublished works throughout the world, owned, used or licensed
by a Party or held for use by any Affiliate of a Party in connection with the
conduct of such Party’s Business.

 

“Court
Order” means any judgment, decree, injunction, order, ruling, writ citation or
award of any nature whatsoever of any Governmental Body or other authority that
is binding on any Person or its property under applicable Law.

 

“Custom
Software” means any computer software that has been developed or designed for
use in the Business of Party.

 

“Damages”
is defined in Section 11.1.

 

“Deductible
Amount” is defined in Section 11.3(d).

 

“Default”
means (a) a breach, default or violation, (b) the occurrence of an
event that with or without the passage of time or the giving of notice, or
both, would constitute a breach, default or violation or cause an Encumbrance
to arise, or (c) with respect to any Contract, the occurrence of an event
that with or without the passage of time or the giving of notice, or both,
would give rise to a right of termination, cancellation, amendment,
renegotiation or acceleration or a right to receive damages or a payment of
penalties.

 

“Document
File” means, with respect to any Serviced Loan, the legal files maintained by
the relevant Party or its service providers with respect to such Serviced Loan
(whether such files are maintained in paper based form or electronic form).

 

“DUS”
means Fannie Mae Delegated Underwriting and Servicing.

 

“DUS
Agreements” means, with respect to a Party, the Loss Sharing Agreements,
reserve agreements and other agreements entered into by such Party in respect
of DUS treatment of the origination, sale or servicing of Serviced Loans.

 

“Eligible
Employee” is defined in Section 7.12.

 

“Encumbrances”
means any lien, mortgage, security interest, pledge, restriction on
transferability, defect of title or other claim, charge or encumbrance of any
nature whatsoever on any property or 

 

5

 

property
interest, including any restriction on the use, voting, transfer, receipt of
income or other exercise of any attributes of ownership.

 

“Environmental
Condition” means any condition or circumstance, including a Release or the
presence of Hazardous Substances, whether created by a Party or any third
party, at or relating to any (a) premises at which the Business of such
Party has been conducted by such Party, any Affiliate thereof or any
predecessor of any of them, (b) at any property owned, leased or operated
at any time by such Party, any Person controlled by such Party or any
predecessor of any of them or (c) at any property at which wastes have
been deposited or disposed by or at the behest or direction of any of the
foregoing that does or could reasonably be expected to (i) require
abatement or correction under an Environmental Law, (ii) give rise to any
civil or criminal liability on the part of such Party under an Environmental
Law, or (iii) create a public or private nuisance.

 

“Environmental
Law” means all Laws and Court Orders relating to pollution or protection of the
environment as well as any principles of common law under which a Person may be
held liable for the Release or discharge of any Hazardous Substance into the
environment.

 

“Environmental
Liability” means any Liability relating to or arising out of any Environmental
Condition.

 

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

 

“ERISA
Affiliate” means, with respect to a Party, any Person that, together with such
Party, is or was at any time treated as a single employer under Section 414
of the Code or Section 4001 of ERISA.

 

“Excepted
Warranties” is defined in Section 11.3(d).

 

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

 

“Excluded
CGL Assets” is defined in Section 2.1(d).

 

“Excluded
CGL Liabilities” is defined in Section 2.3(d).

 

“Excluded
GPF Assets” is defined in Section 2.1(b).

 

“Excluded
GPF Liabilities” is defined in Section 2.3(b).

 

“Expiration
Date” is defined in Section 11.4.

 

“Fannie
Mae” means the Federal National Mortgage Association.

 

“Fannie
Mae Business” means, with respect to a Party, the origination, underwriting,
credit enhancement, financing, refinancing, loan sale and servicing activities
of such Party relating to the Serviced Loans, and the Fannie Mae special pool
purchase contracts, negotiated contracts, forward purchase contracts,
commitments or pipeline transactions of such Party in respect of the DUS and
other multifamily programs of Fannie Mae.

 

“Fannie
Mae Transfer Agreement” means a transfer agreement by and among Fannie Mae, a
GPF Party or CGL, as the case may be, and the Company, relating to the
assignment to and assumption by the Company of the GPF Party’s or CGL’s, as the
case may be, rights and Liabilities relating to the Fannie Mae Business.

 

6

 

“Freddie
Mac” means the Federal Home Loan Mortgage Corp.

 

“Freddie
Mac Business” means, with respect to a Party, the origination, underwriting,
credit enhancement, debt financing, refinancing, loan sale, and servicing
activities of such Party relating to the Serviced Loans, forward purchase
contracts, commitments or pipeline transactions of such Party in respect of the
Freddie Mac Multifamily Program Plus Seller/Servicer program, the Freddie Mac
Targeted Affordable Housing program, and the other multifamily programs of
Freddie Mac.

 

“Freddie
Mac Transfer Agreement” means a transfer agreement by and among Freddie Mac,
CGL and the Company, relating to the assignment to and assumption by the
Company of CGL’s rights and Liabilities relating to the Freddie Mac Business.

 

“GAAP”
means generally accepted U.S. accounting principles.

 

“Ginnie
Mae” means the Government National Mortgage Association.

 

“Governmental
Body” means any (a) nation, state, commonwealth, province, territory,
county, municipality, district or other jurisdiction of any nature, or any
political subdivision thereof, (b) federal, state, local, municipal,
foreign or other government or (c) governmental or quasi-governmental
authority of any nature (including any governmental division, department,
agency, commission, instrumentality, official, organization, regulatory body or
other entity and any court, arbitrator or other tribunal).

 

“Governmental
Permits” means any permits, licenses, registrations, certificates of occupancy,
approvals, privileges or other authorizations of any nature whatsoever,
granted, approved or allowed by any Governmental Body.

 

“GPF”
is defined above in the preamble.

 

“GPF
Actual Losses Contribution” is defined in Section 7.17.

 

“GPF
Balance Sheet” is defined in Section 4.5.

 

“GPF
Balance Sheet Date” is defined in Section 4.5.

 

“GPF
Closing Balance Sheet” is defined in Section 2.4(a).

 

“GPF
Closing Certificate” means a certificate of the Chief Executive Officer of GPF
and of the Chief Executive Officer of W&D to the effect set forth in Sections
8.1, 8.2, 8.7, 8.9, 8.11, 10.1, 10.2, 10.8, 10.11, and 10.13 insofar
as such Sections apply to the GPF Parties, and such certificate shall be deemed
a representation of the GPF Parties for the purposes of Article 11.

 

“GPF
Contracts” is defined in Section 4.12(c).

 

“GPF
Disclosure Letter” means any of the disclosures hereto containing information
relating to the GPF Parties pursuant to Article 4 and other
provisions hereof that has been provided to the Company and CGL on the date
hereof.

 

“GPF
Financial Statements” is defined in Section 4.5.

 

“GPF
Net Working Capital” means, as of the relevant time of determination, (a) the
sum of (i) GPF Unrestricted Cash, (ii) any performance, good faith or
other deposits received from borrowers to the extent not included in (i), (iii) any
cash equivalents of any GPF Party valued at fair market, (iv) all 

 

7

 

Accounts
Receivable of any GPF Party that are fully-collectible, an obligation of an
unrelated party and due within six months, and (v) any prepaid expenses of
any GPF Party for a period of no more than six months; less (b) the
sum of (i) all accounts payable of any GPF Party due within six months to
an unrelated party, (ii) any accrued expenses of any GPF Party for a
period of no more than six months and (iii) any performance, good faith or
other deposits received from any GPF Party’s borrowers that relate to
Contributed GPF Assets; plus (c) the excess, if any, of (i) Loans
in Inventory expected to be sold by any GPF Party within 30 days over (ii) any
warehouse line of credit or other short term debt obligation used to finance such
Loans in Inventory.  For this purpose, “GPF
Unrestricted Cash” shall mean, as of the relevant time of determination, any
cash of any GPF Party (other than amounts in excess of what is required to
satisfy the GPF Net Working Capital Target,  which
amounts shall not be contributed to the Company pursuant to Section 2.1(a)(i))
that is not restricted in any way; any cash pledged to a Mortgage Program
Sponsor or any other Person to secure any liquidity or loss sharing obligations
or for other reasons.  The calculation of
GPF Net Working Capital shall be prepared in accordance with GAAP, consistent
with the principles and conventions adopted in the preparation of the GPF
Balance Sheet.

 

“GPF
Net Working Capital Calculation” is defined in Section 2.4(a).

 

“GPF
Net Working Capital Dispute Notice” is defined in Section 2.4(c).

 

“GPF
Net Working Capital Target” is $1.0 million, plus the amount of the GPF Actual
Losses Contribution, regardless of whether such contribution is made by GPF.

 

“GPF
Parties” means any of GPF and W&D.

 

“GPF
Post-Closing Payment” is defined in Section 2.4(b).

 

“GPF
Real Estate Leases” is defined in Section 4.7(b).

 

“GPF
Required Consents” is defined in Section 4.3.

 

“GPF
Servicing Tape” means the electronic files of GPF and W&D (including all
tabs displayed therein) identified as “WD-GPF Portfolio Servicing Tape as of
11-30-08.xls” containing financial and collateral mortgage loan terms and
characteristics, and other relevant information utilized by GPF in connection
with the servicing of the Serviced Loans, in each case as of November 30,
2008  and for each Serviced Loan as to
which any GPF Party has Servicing Rights as of November 30, 2008,
including for each such Serviced Loan: (a) the original principal balance,
(b)  the principal amount outstanding at November 30, 2008, (c) the
amount of the escrow and reserves in the custodial accounts, (d) the
escrow and reserve payment constants required (each shown separately), (e) the
interest rate, if any, paid to borrowers on escrow and reserve balances, (f) the
interest rate, (g) the interest only period, if any, (h) the interest
rate reset terms and timing, if floating rate, (i) the servicing fee
payable to GPF, (j) the amortization term, (k) the loss-sharing
levels, loss share percentages, tier and debt service coverage ratios, if a
Fannie Mae loan, and (l) the origination date, maturity date, due date,
grace period (if any) and other payment terms of each such Serviced Loan,
including prepayment limitations, defeasance information, yield maintenance
terms and dates, as applicable.

 

“Hazardous
Substances” means any toxic, carcinogenic or hazardous gaseous, liquid or
solid, material, substance, contaminant or waste that may or could pose a
hazard to the environment or human health or safety including (a) any “hazardous
substances” as defined by the federal Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. §§9601 et seq., (b) any “extremely
hazardous substance,” “hazardous chemical,” or “toxic chemical” as those terms
are defined by the federal Emergency Planning and Community Right-to-Know Act,
42 U.S.C. §§11001 et seq., (c) any 

 

8

 

“hazardous
waste,” as defined under the federal Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act, 42 U.S.C. §§6901 et seq., (d) any
“pollutant,” as defined under the federal Water Pollution Control Act, 33
U.S.C. §§1251 et seq., as any of such laws in foregoing clauses (a) through
(d) as amended, (e) any material, substance, contaminant or waste,
whether gaseous, liquid or solid that is regulated under any Laws or Court
Orders that have been or will be enacted, promulgated or issued by any federal,
state or local governmental authorities concerning protection of the
environment and (f) any asbestos, polychlorinated biphenyls, petroleum,
petroleum products and urea formaldehyde and mold.

 

“HUD”
means the United States Department of Housing and Urban Development.

 

“HUD
Assets” is defined in Section 2.1(c)(xiii).

 

“HUD
Business” means with respect to a Party, the origination, financing,
refinancing, loan sale, Ginnie Mae Mortgage Backed securities issuance and
servicing activities of such Party relating to the Serviced Loans and Contracts
with HUD or Ginnie Mae, commitments or pipeline transactions of such Party in
respect of the HUD and Ginnie Mae multifamily programs.

 

“HUD
Transfer Agreement” means such agreements, certificates, filings, forms and
other documents as are required by HUD, Ginnie Mae or any third party relating
to or affecting the assignment to and assumption by the Company of CGL’s rights
and Liabilities with respect to the HUD Business or the HUD Assets.

 

“Indemnification
Cap” is defined in Section 11.3(d).

 

“Indemnified
CGL Party” is defined in Section 11.2.

 

“Indemnified
GPF Party” is defined in Section 11.1.

 

“Indemnified
Party” is defined in Section 11.3(a).

 

“Indemnitor”
is defined in Section 11.3(a).

 

“Independent
Firm” is defined in Section 2.4(c).

 

“Independent
GPF Net Working Capital Valuation” is defined in Section 2.4(c).

 

“Intellectual
Property” means any Copyrights, Patents, Trademarks, Internet domain
names, technology rights and licenses, Trade Secrets, franchises, Software
Products, Custom Software formulae, inventions, invention disclosures, ideas,
discoveries, innovations and rights in research and development, and
commercially practiced processes and inventions, whether patentable or not in
any jurisdiction throughout the world and any other intellectual property or
any similar, corresponding or equivalent right to any of the foregoing, owned,
used or licensed by a Party or held for use by any Affiliate of a Party in
connection with the conduct of such Party’s Business.

 

“Knowledge,”
“to the knowledge of,” or phrases of similar import, with respect to an
individual, means an individual shall be deemed to have knowledge of a
particular fact or other matter if that individual is actually aware of that
fact or matter.

 

With
respect to a Person, other than an individual, “knowledge,” or phrases of
similar import, means a Person shall be deemed to have knowledge of a
particular fact or other matter if any individual 

 

9

 

who
is serving, or who has at any time served, as a director, officer, partner,
executor or trustee of that Person (or in any similar capacity) has, or at any
time had, actual knowledge of that fact or other matter.

 

“Law”
means any provision of any constitution, statute, law, treaty, ordinance,
regulation, charter  order, rule or
guideline of any Governmental Body, including those covering environmental,
energy, safety, health, transportation, bribery, record keeping, zoning,
antidiscrimination, antitrust, wage and hour, and price and wage control
matters, as well as any applicable principle of common law.

 

“Liability”
means any direct or indirect liability, indebtedness, obligation, expense,
debt, claim, loss, damage, deficiency, guaranty or endorsement of any nature,
of or by any Person, whether absolute or contingent, known or unknown, secured
or unsecured, recourse or non-recourse, filed or unfiled, accrued or unaccrued,
due or to become due, or liquidated or unliquidated.

 

“Liquidated
Claim Notice” is defined in Section 11.3(a).

 

“Litigation”
means any lawsuit, action, arbitration, administrative, quasi-administrative or
other proceeding, criminal prosecution or investigation or inquiry of any
Governmental Body.

 

“Loans
in Inventory” means any loan funded by a Party as of the Closing Date and not
yet purchased by an investor.

 

“Loss
Sharing Agreements” means with respect to a Party, the Fannie Mae Loss Sharing
Agreements by and between such Party and Fannie Mae (as such agreements may be
amended from time to time).

 

“Material
Adverse Effect” means, with respect to a Party, a material and adverse effect,
change or development (a) upon the Business, operations, prospects,
assets, liabilities, financial condition, value, operating results, cash flow,
net worth, reputation or projected profitability of such Party, or (b) adversely
affecting the ability of such Party to execute or deliver the Transaction
Documents, to perform any of their respective obligations under the Transaction
Documents or to consummate any of the transactions contemplated by this
Agreement or any other Transaction Document or the ability of Party to receive
the full benefit of the transactions contemplated by this Agreement; provided,
however, that none of the following shall be deemed, either alone or in
combination, to constitute, and none of the following shall be taken into
account in determining whether there has been or will be, a Material Adverse
Effect: (a) any failure by such Party to meet any internal or published
projections, forecasts, or revenue or earnings predictions for any period
ending on or after the date of this Agreement; (b) any adverse change,
effect, event, occurrence, state of facts or development to the extent
attributable to the announcement or pendency of the transactions contemplated
by this Agreement; (c) any adverse change, effect, event, occurrence,
state of facts or development attributable to conditions affecting the U.S.
economy as a whole; (d) any adverse change, effect, event, occurrence,
state of facts or development resulting from or relating to (i) compliance
with the terms of, or the taking of any action required by, this Agreement, (ii) any
change in accounting requirements or principles, or the interpretation or
enforcement thereof, (iii) actions required to be taken under applicable
laws, rules, or regulations, or agreements disclosed in such Party’s Disclosure
Letter, (iv) something consented to in writing by the Party’s entitled to
consent to such action, or (v) acts of war, terrorism, or other similar
material conflict.

 

“Minor
Contracts” means, with respect to a Party, any Contract by which such Party is
bound that (a) is not material to such Party’s Business, (b) may be
terminated upon 60-days’ notice or less, and (c) involves annual payment
of less than $10,000.

 

10

 

“Mortgage”
means a mortgage, deed of trust, pledge, or collateral assignment of a property
trust beneficiary interest or other instrument creating a Lien on or ownership
interest in a Mortgaged Property.

 

“Mortgage
Program Sponsor” means each of Fannie Mae, Freddie Mac, HUD and Ginnie Mae.

 

“Mortgage
Program Sponsors Transfer Agreements” means the Freddie Mac Transfer Agreement,
the Fannie Mae Transfer Agreements, and the HUD Transfer Agreement.

 

“Mortgaged
Property” means the underlying property or properties securing any Serviced
Loan.

 

“Non-Assignable
CGL Contract” is defined in Section 2.5(b).

 

“Non-Assignable
GPF Contract” is defined in Section 2.5(a).

 

“Operating
Agreement” means the form of Amended and Restated Operating Agreement of the
Company, in substantially the same form as Exhibit B.

 

“Ordinary
course” or “ordinary course of business” means, with respect to an action taken
by any Party, an action that (a) is consistent in nature, scope and
magnitude with the past practices of such Party and is taken in the ordinary
course of the normal, day-to-day operations of such Party, (b) does not
require authorization by the board of directors or shareholders of such Party
(or by any Person or group of Persons exercising similar authority) and does
not require any other separate or special authorization of any nature and (c) is
similar in nature, scope and magnitude to actions customarily taken, without
any separate or special authorization, in the ordinary course of the normal,
day-to-day operations of other Persons that are in the same line of business as
such Party.

 

“Parties”
is defined above in the preamble.

 

“Party”
is defined above in the preamble.

 

“Patents”
means any patents together with any extensions, reexaminations and reissues of
such patents, patents of addition, patent applications, divisions,
continuations, continuations-in-part, and any subsequent filings in any country
or jurisdiction claiming priority therefrom, owned, used or licensed by a Party
or held for use by any Affiliate of a Party in connection with the conduct of
such Party’s Business.

 

“PBGC”
means the Pension Benefit Guaranty Corporation.

 

“Permitted
Encumbrances” means, with respect to a Party, (a) except to the extent
identified as an Excluded GPF Liability or an Excluded CGL Liability,
Encumbrances for Taxes not yet due and payable, (b) statutory landlord’s,
mechanic’s, carrier’s, workmen’s, repairmen’s or other similar Encumbrances
arising or incurred in the ordinary course of business for amounts which are
not due and payable and which would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect on such Party’s Business
as currently conducted thereon, (c) Encumbrances arising from zoning
ordinances which would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect on such Party’s Business as
currently conducted thereon, and (d) the Encumbrances identified in Section 4.6
of the GPF Disclosure Letter.

 

“Person”
means any natural person, business trust, corporation, partnership, limited
liability company, joint stock company, proprietorship, association, trust,
joint venture, unincorporated association or any other legal entity of whatever
nature.

 

11

 

 

“Post-Signing
CGL Servicing Tape” is defined in Section 7.19(b).

 

“Post-Signing
CGL Financial Statements” is defined in Section 5.5.

 

“Post-Signing
GPF Financial Statements” is defined in Section 4.5.

 

“Post-Signing
GPF Servicing Tape” is defined in Section 7.19(a).

 

“Pre-Signing
CGL Financial Statements” is defined in Section 5.5.

 

“Pre-Signing
GPF Financial Statements” is defined in Section 4.5.

 

“Prime
Rate” means the prime lending rate as announced by the Federal Reserve Bank.

 

“Real
Property” means all rights and interests in or to real property (including any
real estate, land, building, condominium, town house or other real property of
any nature), including all shares or stock or other ownership interests in
cooperative or condominium associations, fee estates, leaseholds and
subleaseholds, purchase options, easements, licenses, privileges,
hereditaments, appurtenances thereto, rights to access and rights of way,
easement or prescriptive right and all Structures, owned by a Party or used in
the operation of such Party’s Business, together with any additions thereto or
replacements thereof.

 

“Release”
means any release, spill, emission, leaching, leaking, migration, dumping,
emptying, pumping, injection, deposit, disposal, discharge or dispersal into the
indoor or outdoor environment, or into or out of any property.

 

“Resolution
Period” is defined in Section 11.3(c).

 

“Response
Period” is defined in Section 11.3(a).

 

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

 

“Serviced
Loan” means, with respect to a Party, a loan that is secured by a Mortgage on a
property or a Bond, in each case, serviced by such Party under any (a) of
the mortgage programs of the Mortgage Program Sponsors or (b) other
Contracts with a third-party that is not a Mortgage Program Sponsor, or a loan
being held by any Party as of the Closing pending sale to a Mortgage Program
Sponsor or any other third-party.

 

“Servicing
Rights” means rights to service loans pursuant to agreements with a Mortgage
Program Sponsor or Contracts with any third party that is not a Mortgage
Program Sponsor.

 

“Subleases”
means those sublease agreements to be entered into by and between the Company
and CGL or CFI, as the case may be, for the sublease by the Company of the
properties located in Atlanta, Georgia, Plano, Texas and New Orleans, Louisiana
as contemplated by the Transition Services Agreement.

 

“Software
Products” means any computer software products which are, or may potentially
be, sold, distributed or marketed by a Party, other than “off-the-shelf
software,” including all computer operating, security or programming software,
that is owned by or licensed to such Party or used, in whole or in part,
directly or indirectly, or has been developed or designed for or is in the
process of being developed or designed for use, in whole or in part, directly
or indirectly, in the conduct of such Party’s 

 

12

 

Business
of any nature whatsoever, including all systems software, all applications
software, whether for general business usage (e.g., accounting, finance, word
processing, graphics, spreadsheet analysis, etc.) or specific,
unique-to-the-business usage (e.g., telephone call processing, etc.), and
any and all documentation and object and source codes related thereto.

 

“Tax
Return” means any return, declaration, report, claim for refund, or information
return or statement relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.

 

“Taxes”
means all taxes, duties, charges, fees, levies or other assessments (including
any similar obligation to pay, withhold or collect) imposed by any taxing
authority including income, gross receipts, value-added, excise, withholding,
personal property, real estate, sale, use, ad valorem, license, lease, service,
severance, stamp, transfer, payroll, employment, customs, duties, alternative,
add-on minimum, estimated and franchise taxes (including any interest,
penalties or additions attributable to or imposed on or with respect to any
such assessment).

 

“Termination
Date” is defined in Section 3.1.

 

“Trade
Secrets” means any know-how, trade secrets, formulae, specifications, technical
information, data, process technology, plans, drawings (including engineering
and auto-cad drawings), proprietary information, blue prints and all
documentation related to any of the foregoing, owned, used or licensed by a
Party, or held for use by any Affiliate of a Party, in connection with the
conduct of such Party’s Business, except for any such item that is generally
available to the public.

 

“Trademarks”
means any registered trademarks, registered service marks, trademark and
service mark applications and unregistered trademarks and service marks, brand
names, certification marks, trade names, logos, trade dress, and all goodwill
associated with the foregoing throughout the world and registrations in any
jurisdictions of, and applications in any jurisdiction to register, the
foregoing, including any extension, modification or renewal of any such
registration or application, owned, used or licensed by a Party or held for use
by any Affiliate of such Party in connection with the conduct of such Party’s
Business.

 

“Transaction
Documents” means this Agreement, the Assignment and Assumption Agreements, the
Mortgage Program Sponsors Transfer Agreements, the Operating Agreement, the
Transition Services Agreement and the Subleases.

 

“Transactions”
means the contribution of the Contributed GPF Assets and Contributed CGL Assets
and the assignment and assumption of the Assumed GPF Liabilities and Assumed
CGL Liabilities in exchange for the Company Units to be issued to each of GPF,
W&D and CGL, respectively, at the Closing and the other transactions
contemplated by the Transaction Documents.

 

“Transition
Services Agreement” means the agreement by which GPF, W&D and CGL will each
provide certain services to the Company after the Closing and the Company will
provide certain services to GPF, W&D and CGL after the Closing, in
substantially the same form as Exhibit C.

 

“U.S.”
means the United States of America.

 

“Unliquidated
Claim” is defined in Section 11.3(a).

 

13

 

“Walnut
Creek Lease” means that certain lease dated December 30, 2005, by and
among Fidelity Walnut Creek Limited Partnership, CGL and CFI for CGL’s
operations located at Two Ygnacio Center, 2033 North Main Street, Walnut Creek,
California.

 

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

 

“W&D”
is defined above in the preamble.

 

2.             Contribution
and Exchange.

 

2.1           Agreement to Contribute and
Exchange.

 

(a)           At the Closing, each of the
GPF Parties shall contribute, grant, convey, assign, transfer and deliver to
the Company, and the Company shall accept such contributions, grants,
conveyances, assignments, transfers and deliveries from such GPF Parties, all
right, title and interest of such GPF Party in and to all of such GPF Party’s
assets, properties, and rights of every kind, and description, real, personal
and mixed, tangible and intangible, wherever situated, constituting or used in
its Business on the Closing Date other than the Excluded GPF Assets (the “Contributed
GPF Assets”), free and clear of all Encumbrances, other than Permitted
Encumbrances, but including the following:

 

(i)                   all cash and cash
equivalents (other than amounts in excess of what is required to satisfy the
GPF Net Working Capital Target);

 

(ii)                  all Accounts Receivable;

 

(iii)                all fixed assets, furniture,
fixtures, and leasehold improvements;

 

(iv)                all records with respect to
suppliers, employees and other aspects of the GPF Business;

 

(v)                 all Confidential
Information;

 

(vi)                all telephone numbers and
facsimile numbers currently used in the GPF Business;

 

(vii)               all office supplies;

 

(viii)              all rights under the GPF
Real Estate Leases, and any easements, deposits or other rights pertaining
thereto, except to the extent specified in Section 2.5;

 

(ix)                 all rights under the
relevant Agency Documents, subject to the execution by the relevant parties of
each Mortgage Sponsor Transfer Agreement;

 

(x)                  all current and future
Servicing Rights, subject to the execution by the relevant parties of each
Mortgage Sponsor Transfer Agreement, including Servicing Rights to any GPF
Loans in Inventory and any loans made by GPF in California pursuant to the
Transition Services Agreement;

 

(xi)                 all revenues and premiums
earned, including warehouse net interest income for loans closed by GPF after
the Closing Date in California pursuant to the Transition Services Agreement;

 

14

 

(xii)                all rights to fund and close
any GPF Committed Loans (other than Committed Loans for properties in
California until such time as the Company obtains a valid license to make loans
in such state) and all rights to all performance, good faith or other deposits
received from borrowers with respect to such Committed Loans (including those
received in respect of Committed Loans for properties in California);

 

(xiii)               all rights under any
Governmental Permits, to the extent transferable, except to the extent
specified in Section 2.5;

 

(xiv)               all rights related to any
prepaid expenses;

 

(xv)                all rights under any
insurance Contracts; and

 

(xvi)               all rights and deposits
under any Contracts, except to the extent specified in Section 2.5.

 

(b)           Notwithstanding the
foregoing, the Contributed GPF Assets shall not include any of the following
(the “Excluded GPF Assets”):

 

(i)                   the corporate seals, Charter
Documents, minute books, partnership books, tax returns, books of account or
other records having to do with the organization of any GPF Party;

 

(ii)                  the rights that accrue or
will accrue to any GPF Party under any Transaction Document;

 

(iii)                 all rights of GPF under that
certain Warehousing Credit and Security Agreement dated December 5, 2005,
by and between GPF and Bank of America, N.A., a national banking association,
as amended, and related documents, and that certain Loan Agreement dated December 27,
2004, by and among GPF, National City Bank of Kentucky and Fleet National Bank,
as amended, and related documents;

 

(iv)                any GPF Loans in Inventory,
the transfer of which to the Company shall be governed by the Transition
Services Agreement, and until such time as the Company obtains a valid license
to make loans in California, all rights to fund and close Committed Loans for
properties in such state; or

 

(v)                 the assets specified on Schedule
2.1(b).

 

(c)           At the Closing, CGL shall
contribute, grant, convey, assign, transfer and deliver to the Company, and the
Company shall accept such contributions, grants, conveyances, assignments,
transfers and deliveries from CGL, all right, title and interest of CGL in and
to all of CGL’s assets, properties, and rights of every kind, and description,
real, personal and mixed, tangible and intangible, wherever situated,
constituting or used in CGL’s Business on the Closing Date other than the
Excluded CGL Assets (the “Contributed CGL Assets”), free and clear of
all Encumbrances, other than Permitted Encumbrances, but including the
following:

 

(i)                   $16,821,509, plus, if
applicable, the amount of the CGL Actual Losses True-Up Contribution, of CGL
Unrestricted Cash, and all cash equivalents;

 

(ii)                  all Accounts Receivable;

 

15

 

(iii)                all fixed assets, furniture,
fixtures, and leasehold improvements;

 

(iv)                all records with respect to
suppliers, employees and other aspects of CGL’s Business;

 

(v)                 all Confidential
Information;

 

(vi)                all telephone numbers and
facsimile numbers currently used in CGL’s Business;

 

(vii)               all office supplies;

 

(viii)              all rights under the Walnut
Creek Lease and any easements, deposits or other rights pertaining thereto,
except to the extent specified in Section 2.5;

 

(ix)                 all rights under any
Governmental Permits, to the extent transferable, except to the extent
specified in Section 2.5;

 

(x)                  all rights under the
relevant Agency Documents, subject to the execution by the relevant parties of
each Mortgage Sponsor Transfer Agreement;

 

(xi)                 all current and future
Servicing Rights, subject to the execution by the relevant parties of each
Mortgage Sponsor Transfer Agreement, including Servicing Rights to any CGL
Loans in Inventory;

 

(xii)                all rights to fund and close
any CGL Committed Loans and all performance, good faith or other deposits
received from borrowers with respect to such Committed Loans; or

 

(xiii)               the assets specified on Schedule
2.1(c)(xiii) (the “HUD Assets”), provided that such HUD Assets
shall be contributed to the Company at the time set forth in Section 2.1(e) if
the HUD Transfer Agreement has not been executed and delivered by all parties
thereto at or prior to Closing;

 

(xiv)               all rights related to any
prepaid expenses;

 

(xv)                all rights under any
insurance Contracts; and

 

(xvi)               all rights and deposits
under any Contracts, except to the extent specified in Section 2.5.

 

(d)           Notwithstanding the
foregoing, the Contributed CGL Assets shall not include any of the following
(the “Excluded CGL Assets”):

 

(i)                   the corporate seals, Charter
Documents, minute books, limited liability books, tax returns, books of account
or other records having to do with the organization of CGL;

 

(ii)                  the rights that accrue or
will accrue to CGL under any Transaction Document;

 

(iii)                 any CGL Loans in Inventory,
the transfer of which to the Company shall be governed by the terms of the
Transition Services Agreement; or

 

16

 

(iv)                the assets specified on Schedule
2.1(d).

 

(e)           Notwithstanding the
foregoing, if the HUD Transfer Agreement is not executed and delivered by all
parties thereto at or prior to Closing, then the HUD Assets shall governed by
Annex C to the Transition Services Agreement; provided that the
representations, warranties, covenants and agreements applicable to the HUD
Assets contained in this Agreement shall continue to apply to the HUD Assets.

 

2.2           Issuance of Company Units.

 

(a)           In consideration of grant,
sale, conveyance, assignment, transfer and delivery of the Contributed GPF
Assets to the Company and the assumption by the Company of the Assumed GPF
Liabilities, at the Closing the Company shall issue 299 Company Units to GPF
and 25 Company Units to W&D, free and clear of all Encumbrances.

 

(b)           In consideration of grant,
sale, conveyance, assignment, transfer and delivery of the Contributed CGL
Assets to the Company and the assumption by the Company of the Assumed CGL
Liabilities, at the Closing the Company shall issue 175 Company Units to CGL,
free and clear of all Encumbrances.

 

2.3           Assumption of Liabilities.

 

(a)           At the Closing, the Company
shall assume and agree to pay, discharge or perform, as appropriate, when due
only the Liabilities of the GPF Parties specifically identified below in this
subsection (a) (the “Assumed GPF Liabilities”):

 

(i)                   any Liabilities included in
the calculation of the GPF Net Working Capital, but only to the extent and up
to the amount included in the final and binding calculation thereof under Section 2.3;

 

(ii)                  any post-Closing executory
obligations under the GPF Contracts;

 

(iii)                 all Liabilities under the relevant
Agency Documents, subject to the execution by the relevant parties of each
Mortgage Program Sponsor Transfer Agreement;

 

(iv)                any post-Closing executory
obligations under the GPF Real Estate Leases; and

 

(v)                 any obligations under any
Governmental Permits of any GPF Party.

 

(b)           Notwithstanding subsection (a) above
or any other provision of this Agreement, the Company is not assuming under
this Agreement or any other Transaction Document any Liability that is not
specifically identified as an Assumed GPF Liability under subsection (a) above,
including any of the following (each, an “Excluded GPF Liability”): (i) Liabilities
arising out of any Default by any GPF Party of any provision of any Contract; (ii) any
Federal, state or local income or other Tax payable by or imposed with respect
to any GPF Party’s Business, the Contributed GPF Assets, other properties or
operations of any GPF Party, any Affiliate of any GPF Party, or any other party
for which any GPF Party might be liable (through law, equity, contract or
otherwise), for the period prior to the Closing Date (whether or not such Taxes
are due and payable as of or prior to the Closing);  (iii) Liabilities under or in connection
with any Excluded GPF Assets; (iv) Liabilities of any GPF Party arising or
incurred in connection with the negotiation, preparation and execution of the
Transaction Documents and the 

 

17

 

Transactions; (v) Liabilities arising from or
related to any Contracts of any GPF Party as to which a GPF Required Consent is
not obtained by the Closing Date regardless of whether the Company or CGL waive
delivery of such GPF Required Consent; (vi) Liabilities to give credits or
take other remedial actions for defective goods or services provided by any GPF
Party or any of their Affiliates; (vii) Liabilities for money borrowed; (viii) Liabilities
of any GPF Party or any of their Affiliates based upon an act or omission of
such Person prior to the Closing; (ix) Environmental Liabilities of any GPF
Party or any of their Affiliates; (x) Liabilities of any GPF Party or any
of their Affiliates relating to any grievance or other claim brought by any
current or former employee, member, manager, partner, equity holder or director
of any GPF Party or any of their Affiliates or an unrelated third-party
(including Governmental Bodies) in respect of any circumstance, condition,
occurrence, act or omission occurring on or before the Closing Date; and (xi) any
other Liabilities of any GPF Party or any of their Affiliates, regardless of
when made or asserted, that are not specifically assumed hereunder.

 

(c)           At the Closing, the Company
shall assume and agree to pay, discharge or perform, as appropriate, when due
only the Liabilities of CGL specifically identified below in this subsection (c) (the
“Assumed CGL Liabilities”):

 

(i)                   any Liabilities included set
forth on the CGL Closing Balance Sheet, but only to the extent and up to the
amounts set forth thereon;

 

(ii)                  any post-Closing executory
obligations under the CGL Contracts;

 

(iii)                 all Liabilities under the
relevant Agency Documents, subject to the execution by the relevant parties of
each Mortgage Program Sponsor Transfer Agreement;

 

(iv)                any post-Closing executory
obligations under the Walnut Creek Lease; and

 

(v)                 all obligations under any
Governmental Permits of CGL.

 

(d)           Notwithstanding subsection (c) above
or any other provision of this Agreement, the Company is not assuming under
this Agreement or any other Transaction Document any Liability that is not specifically
identified as an Assumed CGL Liability under subsection (c) above,
including any of the following (each, an “Excluded CGL Liability”): (i) Liabilities
arising out of any Default by CGL or any of its Affiliates of any provision of
any Contract; (ii) any Federal, state or local income or other Tax payable
by or imposed with respect to the Business of CGL, the Contributed CGL Assets,
or other properties or operations of CGL, any Affiliate of CGL; or any other
party for which CGL might be liable (through law, equity, contract or
otherwise), for the period prior to the Closing Date (whether or not such Taxes
are due and payable as of or prior to the Closing); (iii) Liabilities
under or in connection with any Excluded CGL Assets; (iv) Liabilities
arising prior to the Closing Date or as a result of the Closing for severance,
bonuses or any other form of compensation to any employees, agents or
independent contractors of CGL, whether or not employed by the Company after
the Closing and whether or not arising or under any applicable Law, CGL Benefit
Plan or other arrangement with respect thereto; (v) any Liability related
to the WARN Act or similar applicable Law, any labor dispute, unfair labor
practice, collective bargaining agreement or negotiations undertaken by CGL or
any Affiliate thereof with respect to the foregoing; (vi) Liabilities of
CGL arising or incurred in connection with the negotiation, preparation and
execution of the Transaction Documents and the Transactions; (vii) Liabilities
arising from or related to any Contracts of CGL as to which a CGL Required
Consent is not obtained by the Closing Date regardless of whether the Company
or any GPF Party waives delivery of such CGL Required Consent; (viii) Liabilities
to give credits or take other remedial actions for defective goods or services
provided by CGL or any of its Affiliates; (ix) Liabilities for money
borrowed; (x) Liability of 

 

18

 

CGL or any of its Affiliates based upon an act or
omission of such Person prior to the Closing; (xi) Environmental
Liabilities of CGL; (xii) Liabilities of CGL or any of its Affiliates
relating to any grievance or other claim brought by any current or former
employee, member, manager, partner, equity holder or director of CGL or its
Affiliates or an unrelated third party (including Governmental Bodies) in
respect of any circumstance, condition, occurrence, act or omission occurring
on or before the Closing Date; (xiii) any payables or expenses of CGL not
set forth on the CGL Closing Balance Sheet, or any amounts in excess of the
amounts set forth on the CGL Closing Balance Sheet; (xiv) any Liabilities
related to CGL’s treatment of individuals not categorized by CGL as its
employees, but who are providing or have provided services to CGL; and
(xv) any other Liabilities of CGL or its Affiliates, regardless of when
made or asserted, that are not specifically assumed hereunder.

 

2.4           Post-Closing True-ups.

 

(a)           Within 15 days after the
Closing Date, the GPF Parties shall prepare, or cause to be prepared, and
delivered to the Company and CGL a consolidated balance sheet of the GPF
Parties immediately prior to Closing (the “GPF Closing Balance Sheet”).  In connection with the preparation of the GPF
Closing Balance Sheet, the GPF Parties shall calculate the value of the GPF Net
Working Capital immediately prior to Closing (the “GPF Net Working Capital
Calculation”).

 

(b)           Within 10 days after the
date upon which the GPF Closing Balance Sheet and GPF Net Working Capital
Calculation are delivered to the Company and CGL, or, in the alternative,
within 20 days after the final resolution of any dispute of the GPF Net Working
Capital Calculation, the GPF Parties shall pay to the Company the amount, if
any, by which the GPF Net Working Capital is less than the GPF Net Working
Capital Target (the “GPF Post-Closing Payment”) by wire transfer of
immediately available funds pursuant to wire transfer instructions provided to
the GPF Parties by the Company in writing.

 

(c)           CGL may dispute the GPF Net
Working Capital Calculation in the manner provided for in this subsection
(f).  Within 10 days after CGL’s receipt
of the GPF Closing Balance Sheet, CGL shall give the GPF Parties notice of its
disagreement with the GPF Net Working Capital Calculation (the “GPF Net
Working Capital Dispute Notice”), and such notice shall specify in detail
the nature of the disagreement.  During
the 20 days after the day on which any GPF Net Working Capital Dispute Notice
is given, the GPF Parties and CGL shall attempt to resolve such dispute.  If they fail to reach a written agreement
regarding the dispute, CGL shall refer the matter to a firm of certified
independent accountants that is approved by GPF (the “Independent Firm”),
and request the Independent Firm to also determine the GPF Net Working Capital
(the “Independent GPF Net Working Capital Valuation”).  CGL and GPF shall be entitled to have their
respective independent accountants or other representatives observe the
Independent Firm’s methods of calculation and other activities in determining
the Independent GPF Net Working Capital Valuation.  In no event shall the GPF Net Working
Capital, as calculated by the Independent Firm, be more than the GPF Parties’
calculation of the GPF Net Working Capital, nor less than the GPF Net Working
Capital as calculated by CGL.  CGL shall
give the GPF Parties prompt notice of the results of the Independent GPF Net
Working Capital Valuation.  The GPF Net
Working Capital computed by the Independent Firm shall be the final and binding
GPF Net Working Capital for the purposes of determining the GPF Post-Closing
Payment.  CGL shall pay the fees and
expenses of the Independent Firm with respect to the Independent GPF Net
Working Capital Valuation unless the Independent GPF Net Working Capital
Valuation changes the amount of the GPF Net Working Capital as determined by
the GPF Net Working Capital Calculation by more than 15%, in which case the GPF
Parties shall pay such fees and expenses (such fees and expenses to be paid
92.3% by GPF and 7.7% by W&D).

 

19

 

(d)           Any rights accruing to any
Party under this Section 2.4 shall be in addition to and
independent of the rights to indemnification under Article 11 and
any payments made to any Party under this Section 2.4 shall not be
subject to the requirements of Article 11.

 

2.5           Consent of Third Parties.

 

(a)           Nothing in this Agreement
shall be construed as an attempt by any GPF Party to assign to the Company
pursuant to this Agreement any Contract, Governmental Permit, franchise, claim
or asset included in the Contributed GPF Assets that is by its terms or by Law
nonassignable without the consent of any other party or parties thereto, unless
such consent or approval shall have been given, or as to which all the remedies
for the enforcement thereof available to any GPF Party would not by Law pass to
the Company as an incident of the assignments provided for by this Agreement (a
“Non-Assignable GPF Contract”). 
To the extent that any GPF Required Consent in respect of, or a novation
of, a Non-Assignable GPF Contract shall not have been obtained on or before the
Closing Date, CGL and the Company may elect to proceed with the Closing, in
which case, the GPF Parties shall continue to use best reasonable efforts to
obtain any such GPF Required Consent or novation after the Closing Date until
such time as it shall have been obtained, and the GPF Parties shall cooperate
with the Company in any economically feasible arrangement to provide that the
Company shall receive the interest of any GPF Party in the benefits under such
Non-Assignable GPF Contract, including performance by the relevant GPF Party as
agent if economically feasible; provided that the Company shall
undertake to pay or satisfy the corresponding Liabilities under the terms of
such Non-Assignable GPF Contract to the extent that the Company would have been
responsible therefor if such consent or approval had been obtained.  Each GPF Party shall pay and discharge, and
shall indemnify and hold harmless the Company and its Affiliates from and
against, any and all out-of-pocket costs of seeking to obtain or obtaining any
such GPF Required Consent whether before or after the Closing Date.  Nothing contained in this Section 2.5
or elsewhere in this Agreement shall be deemed a waiver by the Company of its
right to have received on the Closing Date an effective assignment of all of
the Contributed GPF Assets or of the covenant of any GPF Party to obtain all of
GPF Required Consents, nor shall this Section 2.5 or any other
provision of this Agreement be deemed to constitute an agreement to exclude
from the Contributed GPF Assets any Contracts as to which a GPF Required
Consent may be necessary.

 

(b)           Nothing in this Agreement
shall be construed as an attempt by CGL to assign to the Company pursuant to
this Agreement any Contract, Governmental Permit, franchise, claim or asset
included in the Contributed CGL Assets that is by its terms or by Law
nonassignable without the consent of any other party or parties thereto, unless
such consent or approval shall have been given, or as to which all the remedies
for the enforcement thereof available to CGL would not by Law pass to the
Company as an incident of the assignments provided for by this Agreement (a “Non-Assignable
CGL Contract”).  To the extent that
any CGL Required Consent in respect of, or a novation of, a Non-Assignable CGL
Contract shall not have been obtained on or before the Closing Date, the GPF
Parties and the Company may elect to proceed with the Closing, in which case,
CGL shall continue to use best reasonable efforts to obtain any such CGL
Required Consent or novation after the Closing Date until such time as it shall
have been obtained, and CGL shall cooperate with the Company in any
economically feasible arrangement to provide that the Company shall receive the
interest of CGL in the benefits under such Non-Assignable CGL Contract,
including performance by CGL agent if economically feasible; provided
that the Company shall undertake to pay or satisfy the corresponding
Liabilities under the terms of such Non-Assignable CGL Contract to the extent
that the Company would have been responsible therefor if such consent or
approval had been obtained.  CGL shall
pay and discharge, and shall indemnify and hold harmless the Company and its
Affiliates from and against, any and all out-of-pocket costs of seeking to
obtain or obtaining any such CGL Required Consent whether before or after the
Closing Date.  Nothing contained in this Section 2.5
or elsewhere in this Agreement shall be deemed a waiver by the Company of its
right to have received on the Closing Date an effective assignment of all of
the Contributed CGL Assets or of 

 

20

 

the covenant of CGL to obtain all of CGL Required
Consents, nor shall this Section 2.5 or any other provision of this
Agreement be deemed to constitute an agreement to exclude from the Contributed
CGL Assets any Contracts as to which a CGL Required Consent may be necessary.

 

3.             Closing; Effective
Date.

 

3.1           Location, Date.  The closing for the Transactions (the “Closing”)
shall be held at the offices of Morgan, Lewis & Bockius LLP in
Washington, D.C., at 5:00 p.m. (local time) on the date on which there has
been a satisfaction or waiver of the conditions to the consummation of the
Transactions set forth in Articles 8, 9, and 10, but in any event not
later than January 30, 2009 (the “Termination Date”), unless the
Parties agree in writing to another date or place.  The date on which the Closing occurs is
referred to herein as the “Closing Date.”

 

3.2           Deliveries.  At the Closing, subject to the terms and
conditions contained herein:

 

(a)           the GPF Parties shall
deliver to each of the Company and CGL the following items:

 

(i)                   duly executed counterparts
to the Transaction Documents to which any GPF Party is a party;

 

(ii)                  those items that any GPF
Party is required to deliver as a condition precedent to the Closing of the
Transactions pursuant to Article 9;

 

(iii)                 the GPF Closing Certificate;

 

(iv)                [Reserved];

 

(v)                 those GPF Required Consents
(or in lieu thereof waivers) set forth on Schedule 3.2(a)(v).  Such GPF Required Consents (or in lieu
thereof, waivers) shall (A) be in form and substance reasonably
satisfactory to CGL, (B) not be subject to the satisfaction of any
condition that has not been satisfied or waived, and (C) be in full force
and effect; and

 

(vi)                such other instruments of
conveyance and transfer, in form reasonably satisfactory to CGL and its
counsel, as shall be necessary and effective to transfer and assign to, and
vest in, the Company all of any GPF Party’s right, title and interest in and to
the Contributed GPF Assets. 
Simultaneously with such deliveries, all such steps will be taken by any
GPF Party as may be required to put the Company in actual possession and
operating control of the Contributed GPF Assets.

 

(b)           CGL shall deliver to each of
the GPF Parties and the Company the following items:

 

(i)                   duly executed counterparts
to the Transaction Documents to which it is a party, other than the HUD
Transfer Agreement, which may be executed after the Closing;

 

(ii)                  those items that CGL is
required to deliver as a condition precedent to the Closing of the Transactions
pursuant to Article 8;

 

(iii)                 the CGL Closing Certificate;

 

21

 

 

(iv)                executed releases of any
Encumbrance identified on Section 5.6 of the CGL Disclosure Letter
in forms reasonably satisfactory to GPF;

 

(v)                 those CGL Required Consents
(or in lieu thereof waivers) set forth on Schedule 3.2(b)(v).  Such CGL Required Consents (or in lieu
thereof, waivers) shall (A) be in form and substance reasonably
satisfactory to GPF, (B) not be subject to the satisfaction of any
condition that has not been satisfied or waived, and (C) be in full force
and effect; and

 

(vi)                such other instruments of
conveyance and transfer, in form reasonably satisfactory to GPF and its
counsel, as shall be necessary and effective to transfer and assign to, and
vest in, the Company all of CGL’s right, title and interest in and to the
Contributed CGL Assets.  Simultaneously
with such deliveries, all such steps will be taken by CGL as may be required to
put the Company in actual possession and operating control of the Contributed
CGL Assets.

 

(c)           The Company shall deliver to
each of CGL and the GPF Parties the following items:

 

(i)                   duly executed counterparts
to the Transaction Documents to which it is a party, other than the HUD
Transfer Agreement, which may be executed after Closing;

 

(ii)                  those items that the Company
is required to deliver as a condition precedent to the Closing of the
Transactions pursuant to Article 10;

 

(iii)                the Company Closing
Certificate; and

 

(iv)                those Company Required
Consents (or in lieu thereof waivers) set forth on Schedule 3.2(c)(iv).  Such Company Required Consents (or in lieu
thereof, waivers) shall (A) be in form and substance reasonably
satisfactory to each of GPF and CGL, (B) not be subject to the
satisfaction of any condition that has not been satisfied or waived, and (C) be
in full force and effect.

 

(d)           The Parties shall also
deliver to each other the respective agreements, legal opinions and other
documents and instruments in addition to good standing certificates, certified
resolutions, cross receipts and such other items as may be reasonably
requested.

 

4.             Representations
and Warranties with Respect to the GPF Parties.

 

The
GPF Parties hereby, jointly and severally, represent and warrant to the Company
as of the date hereof and as of the Closing Date as follows:

 

4.1           Corporate Status.

 

(a)           GPF is a limited partnership
duly formed, validly existing and in good standing under the Laws of the
jurisdiction in which it was formed and is duly qualified or licensed to do
business as a foreign entity in any jurisdiction where the ownership of any of
its assets or the conduct of its Business would require it to be so qualified
or licensed, except where the failure to be so qualified or licensed would not
reasonably be expected to have a Material Adverse Effect.  The Charter Documents and bylaws of GPF that
have been delivered to CGL as of the date hereof are effective under applicable
Laws and are current, correct and complete.

 

(b)           W&D is a corporation
duly organized, validly existing and in good standing under the Laws of the
jurisdiction in which it was incorporated and is duly qualified or licensed to
do 

 

22

 

business as a foreign corporation in any
jurisdiction where the ownership of any of its assets or the conduct of its
Business would require it to be so qualified or licensed, except where the
failure to be so qualified or licensed would not reasonably be expected to have
a Material Adverse Effect.  The Charter
Documents and bylaws of W&D that have been delivered to CGL as of the date
hereof are effective under applicable Laws and are current, correct and
complete.

 

4.2           Authorization.

 

(a)           GPF has the requisite power
and authority to (i) own the Contributed GPF Assets, (ii) carry on
its Business, (iii) execute and deliver the Transaction Documents to which
it is or will be a party, (iv) perform the Transactions performed or to be
performed by it, and (v) satisfy or perform, as the case may be, its
obligations under those Transaction Documents to which it is or will be a
party. Such execution, delivery and performance by GPF has been, or upon their
execution and delivery will be, duly authorized by all necessary limited
partnership action.  Each Transaction
Document executed and delivered by GPF has been, or upon their execution and
delivery will be, duly executed and delivered by GPF and constitutes a valid
and binding obligation of GPF, enforceable against GPF in accordance with its
terms, except as such enforceability may be limited or affected by applicable
bankruptcy, insolvency, reorganization or other Laws or general application
relating to or affecting the rights of creditors and except as enforceability
may be limited by rules of Law governing specific performance, injunctive
relief or other equitable remedies.

 

(b)           W&D has the requisite
power and authority to (i) own or use its assets, as the case may be, (ii) carry
on its Business, (iii) execute and deliver the Transaction Documents to
which it is or will be a party, (iv) perform the Transactions performed or
to be performed by it, and (v) satisfy or perform, as the case may be, its
obligations under those Transaction Documents to which it is or will be a
party.  Such execution, delivery and
performance by W&D has been, or upon their execution and delivery will be,
duly authorized by all necessary corporate action.  Each Transaction Document executed and
delivered by W&D has been, or upon their execution and delivery will be,
duly executed and delivered by W&D and constitutes a valid and binding
obligation of W&D, enforceable against W&D in accordance with its
terms, except as such enforceability may be limited or affected by applicable
bankruptcy, insolvency, reorganization or other Laws or general application
relating to or affecting the rights of creditors and except as enforceability
may be limited by rules of Law governing specific performance, injunctive
relief or other equitable remedies.

 

4.3           Consents and Approvals.  Except for any notices, filings, consents or
approvals specified in Section 4.3 of the GPF Disclosure Letter
(collectively the “GPF Required Consents”), neither the execution and
delivery by any GPF Party of the Transaction Documents to which it is a party,
nor the performance of the Transactions performed or to be performed by any GPF
Party, require any notice filing, consent, renegotiation or approval,
constitute a Default, cause any payment obligation to arise under (a) any
Law or Court Order to which any GPF Party is subject, (b) the Charter
Documents or bylaws of any GPF Party, if not a natural Person, or (c) any
Contract, Governmental Permit or other document to which any GPF Party is a
party or by which the properties or other assets of any GPF Party may be bound.

 

4.4           Stock Ownership.  The record owners of all of the issued and
outstanding limited partnership interests of GPF and the outstanding stock of
W&D are as set forth on Section 4.4 of the GPF Disclosure Letter.

 

4.5           Financial Statements.  The GPF Parties have delivered to CGL correct
and complete copies of the following (a) audited Consolidated and Combined
Financial Statements of Walker & Dunlop, Inc. and Affiliates as
of and for the years ended December 31, 2005, 2006 and 2007, which 

 

23

 

include the Consolidating and Combining Balance
Sheets as of December 31, 2005, 2006 and 2007 and the Consolidating and
Combining Statements of Income for the years ended December 31, 2005, 2006
and 2007 of several companies including the GPF Parties, and (b) unaudited
Consolidated and Combined Financial Statements of Walker & Dunlop, Inc.
and its Affiliates as of and for the eleven-month period ended November 30,
2008, which include the Consolidating and Combining Balance Sheet as of November 30,
2008 and the Consolidating and Combining Statement of Income for the
eleven-month period ended November 30, 2008 of several companies including
the GPF Parties (the financial statements referred to in clauses (a) and (b) are
collectively referred to herein as the “Pre-Signing GPF Financial Statements”).  Complete and correct copies of the
Pre-Signing GPF Financial Statements are attached hereto as Section 4.5
of the GPF Disclosure Letter.  The
Pre-Signing GPF Financial Statements are, and those financial records of the
GPF Parties delivered to CGL after the date hereof pursuant to Section 7.20
(the “Post-Signing GPF Financial Statements”) will be consistent in all
material respects with the books and records of the GPF Parties, and there have
not been or will not be any material transactions that have not been or will
not be recorded in the accounting records underlying such financial
statements.  The Pre-Signing GPF
Financial Statements and the Post-Signing GPF Financial Statements are referred
to herein, together, as the “GPF Financial Statements.” The portions of
the Consolidating and Combining Statements of Income relating to the GPF
Parties included in the Pre-Signing GPF Financial Statements present, and the
Post-Signing GPF Financial Statements will present, accurately in all material
respects the results of operation of the Business of the GPF Parties for the periods
indicated thereon and the portions of the Consolidating and Combining Balance
Sheets relating to the GPF Parties included in the Pre-Signing GPF Financial
Statements present, and the Post-Signing GPF Financial Statements will present,
accurately in all material respects the financial position and assets and
liabilities of the GPF Parties as of the dates thereof, subject to normal
recurring year-end adjustments and the absence of notes in the case of
unaudited GPF Financial Statements.  The
Pre-Signing GPF Financial Statements have been, and the Post-Signing GPF
Financial Statements will be, prepared in accordance with GAAP consistently
applied.  The unaudited Pre-Signing GPF
Financial Statements are, and the Post-Signing GPF Financial Statements will be,
consistent with the audited financial statements of the GPF Parties.  The balance sheet of the GPF Parties as of November 30,
2008 that is included in the GPF Financial Statements is referred to herein as
the “GPF Balance Sheet,” and the date thereof is referred to as the “GPF
Balance Sheet Date.”

 

4.6           Title to Contributed GPF
Assets and Related Matters.  Except as otherwise set forth in Sections
4.7 or 4.14, a GPF Party has good title to, valid leasehold interests in or
valid licenses to use, all of the Contributed GPF Assets, free from any
Encumbrances, other than Permitted Encumbrances.  The Contributed GPF Assets constitute all of
the material assets, rights and services required for the continued
administration of the GPF Servicing Rights by the Company.  Except for the Excluded GPF Assets, there are
no assets or properties that are material to the operation of the Business of
any GPF Party that are owned by any Person other than a GPF Party that will not
be licensed or leased to the Company under valid, current license arrangements
or leases.

 

4.7           Real Property.

 

(a)           No GPF Party owns any Real
Property.

 

(b)           Each Contract by which any
GPF Party occupies or uses any Real Property (the “GPF Real Estate Leases”)
is in full force and effect and no GPF Party nor, to any GPF Party’s knowledge,
the landlord under any such GPF Real Estate Leases is in material Default
thereunder.  Current, correct and
complete copies of the GPF Real Estate Leases have been previously delivered to
CGL.

 

24

 

(c)           To the knowledge of each GPF
Party, each GPF Party has good and valid rights of physical and legal ingress
and egress to and from the Real Property occupied or used by it from and to the
public systems for all usual street, road and utility purposes and no
conditions exist that would result in the termination of such ingress and
egress.

 

(d)           The occupation or use by any
GPF Party of the Real Property occupied or used by it is in material compliance
with all applicable Laws.

 

4.8           Accounts Receivable.  The Accounts Receivable included in the
Contributed GPF Assets are bona fide Accounts Receivable created in the
ordinary course of any GPF Party’s Business. 
Except as noted on Section 4.8 of the GPF Disclosure Letter,
to any GPF Party’s knowledge, all of the Accounts Receivable included in the
Contributed GPF Assets are collectible within six months from the respective
dates of sale, net of any reserves specified in the GPF Balance Sheet.  Section 4.8 of the GPF Disclosure
Letter contains a complete and accurate list of all Accounts Receivable
included in the Contributed GPF Assets and sets forth the aging of each such
Account Receivable as of December 31, 2008.  To the knowledge of any GPF Party, there are
no facts or circumstances (other than general conditions affecting the U.S.
economy or any GPF Party’s industry and not disproportionately affecting such
GPF Party) that are likely to result in any increase in the uncollectibility of
such Accounts Receivable.

 

4.9           Serviced Loans.

 

(a)           Section 4.9(a) of
the GPF Disclosure Letter sets forth a list of any GPF Party’s
Serviced Loans as of November 30, 2008.

 

(b)           GPF or W&D is, and will
be, the sole legal, beneficial, equitable and record owner and holder of the
Servicing Rights in respect of any GPF Party Serviced Loans, free and clear of
any Encumbrances (other than Permitted Encumbrances and a security interest in
favor of Bank of America with respect to the servicing proceeds paid to GPF).

 

(c)           The Document File maintained
by the applicable GPF Party (or readily available to any GPF Party) for each
Serviced Loan of any GPF Party contains, or will contain, in all material
respects, an original or a complete and correct copy of each of the financing
documents that are required to be contained in such Document File in accordance
with such GPF Party’s underwriting policies in effect at the time of the
origination of the applicable Serviced Loan, and none of such financing
documents relating to any GPF Party’s Serviced Loan has, or will have, in any
material respects, been satisfied, canceled, rescinded, or subordinated in any
respect by any GPF Party, nor has any GPF Party waived, nor will it waive, any
material rights thereunder except as reflected in the Document File relating to
such Serviced Loan.

 

(d)           Except as set forth on Section 4.9(d) of
the GPF Disclosure Letter, no borrower is, or will be prior to Closing,
delinquent by more than 30 days in the payment of any material amounts due
under any GPF Party’s Serviced Loan.

 

(e)           Except as set forth on Section 4.9(e) of
the GPF Disclosure Letter, none of the GPF Party Serviced Loans are, or
will be prior to Closing, in foreclosure.

 

(f)            To the knowledge of any GPF
Party, the Serviced Loans listed on Section 4.9(a) of the GPF
Disclosure Letter and those loans closed by GPF after the date hereof (i) conformed,
or will conform, in all material respects, at the time such Serviced Loan was
originated, to the applicable Agency Documents or any other Contracts by which
a Serviced Loan was originated and applicable Law, in each case, as to the date
it was originated, except as otherwise noted, and (ii) have been, or will
be, serviced by 

 

25

 

the relevant GPF Party substantially in accordance
with the applicable Agency Documents or any other Contracts by which a Serviced
Loan is serviced and applicable Law, except as otherwise noted.

 

(g)           The unpaid principal balance
per the GPF Servicing Tape as of the last day of the month immediately
preceding the Closing Date shall be greater than $4.68 billion.

 

(h)           Each GPF Party has made
available to CGL a complete and correct copy of its Servicing Tape. The
information contained in the GPF Servicing Tape is, and the information
contained in the Post-Signing GPF Servicing Tape shall be, complete and correct
in all material respects as of the applicable dates for such information set
forth in the applicable clauses of the definition of “GPF Servicing Tape” with
respect to each Serviced Loan of any GPF Party as of such applicable dates. The
GPF Servicing Tape contains, and the Post-Signing GPF Servicing Tape shall
contain, all of the information listed in the clauses of the definition of “GPF
Servicing Tape” with respect to each Serviced Loan of any GPF Party as of the
applicable dates.

 

(i)            The information contained in
the GPF Servicing Tape shall be deemed to be disclosed to CGL and, to the
extent the GPF Servicing Tape contains information that should have been but
was not disclosed on Section 4.9 of the GPF Disclosure Letter, such
information shall be deemed to be incorporated by reference into Section 4.9
of the GPF Disclosure Letter and CGL shall have no rights under Article 11
with respect thereto.

 

4.10         Liabilities.  None of the GPF Parties have any Liabilities,
other than (a) as specified on Section 4.10 of the GPF Disclosure
Letter, (b) as specified in the GPF Balance Sheet (except as
heretofore paid or discharged), (c) as incurred in the ordinary course
since the GPF Balance Sheet Date that, individually or in the aggregate, are
not material to the Business of any GPF Party, or (d) those created
pursuant to this Agreement.

 

4.11         Legal Proceedings and
Compliance with Law.

 

(a)           Except as set forth on Section 4.11(a) of
the GPF Disclosure Letter, there is no Litigation that is pending or, to
any GPF Party’s knowledge, threatened against any GPF Party or any of its
Affiliates (i) against or involving, directly or indirectly, the Business
of any GPF Party or the Contributed GPF Assets, which, if adversely determined
against such GPF Party would not reasonably be expected to have a Material
Adverse Effect, or (ii) seeking to prevent or challenge any of the
Transactions.  Since January 1,
2004, there has been no material Default under any Laws, applicable to the
Business of any GPF Party or any Contributed GPF Asset and none of the GPF
Parties nor any of its Affiliates has received any written notices, or to the
knowledge of the GPF Parties, any oral notice from any Governmental Body since January 1,
2004, regarding any alleged Defaults applicable to the Business of any GPF
Party or any Contributed GPF Asset under any Law.  Since January 1, 2004, there has been no
material Default with respect to any Court Order applicable to the Business of
any GPF Party or any Contributed GPF Asset.

 

(b)           Without limiting the
generality of Section 4.11(a) of the GPF Disclosure Letter,
except as described in Section 4.11(b) of the GPF Disclosure
Letter, to the knowledge of any GPF Party, there has not been any
Environmental Condition (i) at the premises at which the Business of any
GPF Party has been conducted by any GPF Party or any Affiliate thereof or any
predecessor of either of them, (ii) at any Real Property owned, leased or
operated at any time by any GPF Party, any Person controlled by any GPF Party
or any predecessor of any of them, or (iii) at any property at which
wastes have been deposited or disposed by or at the behest or direction of any
of the foregoing, except any Environmental Condition which would not reasonably
be expected to have a Material Adverse Effect, nor has any GPF Party received
written notice of any such Environmental Condition.

 

26

 

(c)           Each GPF Party has obtained
and is in material compliance with all Governmental Permits relating to its
Business or any Contributed GPF Asset, all of which are listed in Section 4.11(c) of
the GPF Disclosure Letter along with their respective expiration dates,
that are required for the complete operation of its Business as currently operated.  All of such Governmental Permits are
currently valid and in full force and a GPF Party has filed such timely and
complete renewal applications as may be required with respect to such
Governmental Permits.  To the knowledge
of any GPF Party, no revocation, cancellation or withdrawal thereof has been
threatened.

 

(d)           Section 4.11(d) of
the GPF Disclosure Letter sets forth all reviews and audits conducted
by any Governmental Body or Mortgage Program Sponsor with respect to any GPF
Party or, to the extent relating to the Business of the GPF Parties or any
Contributed GPF Asset or Assumed GPF Liability, any of their Affiliates, in
each case, since January 1, 2004.

 

4.12         Contracts.

 

(a)           Section 4.12 of the GPF
Disclosure Letter lists all Contracts of the following types to which
any GPF Party is a party or by which it or a Contributed GPF Asset or Assumed
GPF Liability is bound, except for Minor Contracts:

 

(i)                   Contracts with any present
or former member, manager, officer, employee, partner or consultant of any GPF
Party or any Affiliate thereof;

 

(ii)                  Contracts with any Mortgage
Program Sponsor or Governmental Body;

 

(iii)                 any servicing or management
Contract or consultancy Contract;

 

(iv)                Contracts for the future
purchase of, or payment for, supplies or products, the performance of services
by a third party;

 

(v)                 Contracts for the lease of
any personal property, vehicles or other assets used in any GPF Party’s
Business;

 

(vi)                Contracts to sell or supply
products or to perform services;

 

(vii)               Contracts to lease to or to
operate for any other party any real or personal property;

 

(viii)              any notes, debentures,
bonds, conditional sale Contracts, equipment trust Contracts, letter of credit
agreements, reimbursement Contracts, loan Contracts or other Contracts for the
borrowing or lending of money (excluding loans to or from officers, directors,
partners, stockholders or Affiliates of any GPF Party or any members of their
immediate families), Contracts or arrangements for a line of credit or for a
guarantee of, or other undertaking in connection with, the indebtedness of any
other Person;

 

(ix)                 Contracts for any capital
expenditure or leasehold improvements;

 

(x)                  any Contracts under which
any Encumbrances exist;

 

(xi)                 any other Contract material
to the operation of any GPF Party’s Business; and

 

27

 

(xii)                any other Contracts (other
than Minor Contracts and those described in any of clauses (i) through (xi) above)
not made in the ordinary course of business.

 

(b)           The GPF Parties have
delivered to CGL complete and correct copies of all written Contracts of any
GPF Party (other than such Contracts which are Excluded GPF Assets), together
with all amendments, supplements or modifications thereto, and accurate
descriptions of all material terms of all oral Contracts, set forth or required
to be set forth on Section 4.12 of the GPF Disclosure Letter.

 

(c)           The Contracts listed on Section 4.12
of the GPF Disclosure Letter and the Minor Contracts excluded from Section 4.12
of the GPF Disclosure Letter are referred to herein as the “GPF
Contracts.”  No GPF Party is in
Default under any GPF Contracts (including any Real Estate Leases and Non-Real
Estate Leases).  No GPF Party has
received any communication from, or given any communication to, any other party
indicating that any GPF Party or such other party, as the case may be, is in
Default under any GPF Contract.  To the
knowledge of any GPF Party, (i) none of the other parties in any such GPF
Contract is in Default thereunder and (ii) each such GPF Contract is
enforceable against any other parties thereto in accordance with terms thereof,
except as such enforceability may be limited or affected by applicable
bankruptcy, insolvency, reorganization or other Laws of general application
relating to or affecting the rights of creditors and except as enforceability
may be limited by rules of Law governing specific performance, injunctive
relief or other equitable remedies. 
There are no renegotiations of, attempts to renegotiate or outstanding
rights to renegotiate any amounts paid or payable to any GPF Party under
current or contemplated Contracts with any Person having the contractual or
statutory right to demand or require such renegotiation and, to any GPF Party’s
knowledge, no such Person has made any demand for such negotiation.

 

4.13         Insurance.  Section 4.13 of the GPF Disclosure
Letter lists all policies or binders of insurance held by or on behalf of
any GPF Party, specifying with respect to each policy the insurer, the amount
of the coverage, the type of insurance, the risks insured, the expiration date,
the policy number and any pending claims thereunder.  There is no material Default with respect to
any such policy or binder, nor has there been any failure to give any notice or
present any claim under any such policy or binder in a timely fashion or in the
manner or detail required by the policy or binder.  No GPF Party has received written notice, nor
to the knowledge of the GPF Parties, oral notice of non-renewal or cancellation
with respect to, or disallowance of any claim under, any such policy or binder
that has been received by any GPF Party.

 

4.14         Intellectual Property.

 

(a)           Employees.

 

(i)                   To the knowledge of any GPF
Party, none of the employees or consultants of any GPF Party or any Affiliate
thereof is subject to any contractual or legal restrictions that might
interfere with the use of his or her best efforts to promote the interests of
any GPF Party.  To the knowledge of any
GPF Party, no employee of any GPF Party or Affiliate thereof has entered into
any Contract that restricts or limits in any way the scope or type of work in
which the employee may be engaged or requires the employee to transfer, assign
or disclose information concerning his or her work  to anyone other than a GPF Party.  Section 4.14(a)(i) of the GPF
Disclosure Letter lists all Contracts between or among any GPF Party, any
employee thereof and a third party that imparts or that imparted an obligation
of noncompetition, secrecy, confidentiality or non-disclosure upon any GPF
Party, any employee thereof or any third party.

 

28

 

(ii)                  To the knowledge of any GPF
Party, no employee or consultant of any of any GPF Party or any Affiliate
thereof (A) has used any other Persons’ Confidential Information in the
course of his or her work, other than such borrower information as is properly
used in the ordinary course of its business, or (B) is, or is currently
expected to be, in Default under any term of any Contract relating to any GPF
Party’s Confidential Information.

 

(b)           Know-How Necessary for the
Business.

 

(i)                   The Intellectual Property
included in the Contributed GPF Assets constitutes all of the Intellectual
Property that is necessary for the operation of any GPF Party’s Business as
operated by any GPF Party and their Affiliates during the past 12 months, other
than Intellectual Property contained in the Excluded GPF Assets, if any.  Each GPF Party is the owner of all right,
title and interest in and to each item of Intellectual Property owned by it
that is included in the Contributed GPF Assets. 
In the case of licensed Intellectual Property, each GPF Party has, to
any GPF Party’s knowledge, obtained all licenses necessary to freely use and
commercially exploit the Intellectual Property used by it that is included in
the Contributed GPF Assets, free and clear of any Encumbrances.  To the knowledge of any GPF Party, each GPF
Party has the right to use all of the Intellectual Property used by it that is
included in the Contributed GPF Assets without payment to a third party.

 

(ii)                  Set forth in Section 4.14(b)(ii) of
the GPF Disclosure Letter is a complete and correct list of all URLs that
are Contributed GPF Assets.

 

(iii)                 To the knowledge of any GPF
Party, none of its Intellectual Property that is a Contributed GPF Asset is
infringed or has been challenged or threatened in any way.  To the knowledge of any GPF Party it does not
infringe, nor has it been alleged to infringe, any of the Intellectual Property
or other proprietary right of any other Person.

 

(iv)                Except as set forth on Section 4.14(b)(iv) of
the GPF Disclosure Letter, each GPF Party has taken all reasonable
precautions to protect the secrecy, confidentiality and value of its
Confidential Information that is a Contributed GPF Asset.

 

4.15         Employee Relations.  Except as set forth on Section 4.15
of the GPF Disclosure Letter, no GPF Party is (a) a party to, involved
in or, to any GPF Party’s knowledge, threatened by, any labor dispute or unfair
labor practice charge, (b) currently negotiating any collective bargaining
agreement, or (c) currently a party to any collective bargaining
agreement.  No GPF Party has experienced
any work stoppage during the last three years.  Section 4.15 of the GPF Disclosure
Letter contains a complete and correct list of the names, current base
salaries and other cash compensation and bonuses paid in respect of performance
in the prior fiscal year of all employees (including officers) of any GPF Party
engaged in performing services for any GPF Party or who will have a right to
receive any cash consideration or other economic benefit as a result of the
consummation of any of the Transactions. 
No GPF Party has violated the WARN Act or a similar applicable Law.  During the 90 days prior to the date hereof,
the GPF Parties have terminated one employee.

 

4.16         ERISA.  For purposes of the following provisions of
this Section 4.16, the term “GPF” includes any ERISA Affiliate of
any GPF Party.

 

(a)           Section 4.16 of the GPF
Disclosure Letter contains a current, correct and complete list of
all Benefit Plans of any GPF Party.  The
GPF Parties have delivered to CGL true, correct, and complete copies of (i) all
documents constituting each Benefit Plan of any GPF Party, including trust
agreements, insurance policies, service agreements, formal and informal
amendments thereto, written and 

 

29

 

unwritten agreements relating to such Benefit Plan,
and (ii) all employee manuals or handbooks containing personnel or
employee relations policies.

 

(b)           No GPF Party currently
maintains or contributes to a multiemployer plan (as defined in section 3(37)
of ERISA), and no GPF Party has incurred any Liability with respect to, or
arising from, a multiemployer plan.

 

(c)           The IRS has issued a
favorable determination letter for each Benefit Plan identified as a “Qualified
Plan” on Section 4.16 of the GPF Disclosure Letter, and each
determination letter remains in effect and has not been revoked, nor has
anything occurred or failed to occur with respect to the operation or amendment
of such plans that could cause it to fail to meet section 401(a) of the
Code.

 

(d)           With respect to any Benefit
Plan of any GPF Party that is an employee welfare benefit plan (within the
meaning of Section 3(1) of ERISA) (i) there is no disqualified
benefit, and (ii) no welfare plan provides health or other benefits after
an employee’s or former employee’s retirement or other termination of
employment except as required by Section 4980B of the Code.

 

4.17         Absence of Certain Changes.  Except as contemplated by this Agreement and,
except as disclosed in Section 4.17 of the GPF Disclosure Letter,
each GPF Party has conducted its Business in the ordinary course since the GPF
Balance Sheet Date, and no GPF Party has:

 

(a)           experienced any change that
has had or could reasonably be expected to have a Material Adverse Effect;

 

(b)           made any distribution or
payment declared or made in respect of its membership interests by way of
distributions, dividends, purchase or redemption of interests or otherwise
(other than quarterly distributions made in the ordinary course of business);

 

(c)           increased the compensation
payable or to become payable to any director, officer, employee or agent,
except for increases for non-officer employees made in the ordinary course of
business, nor undertaken any other change in any employment or consulting
arrangement;

 

(d)           entered into or amended any
employment retention, severance, change in control or similar Contract with any
Person;

 

(e)           established or amended any
Benefit Plan;

 

(f)            sold, assigned or
transferred any Contributed GPF Assets, other than those made in the ordinary
course of business;

 

(g)           subjected any Contributed
GPF Asset to any Encumbrance, other than Permitted Encumbrances;

 

(h)           other than in the ordinary
course of business, waived or released of any claim or right or cancellation of
any debt held;

 

(i)            made any payments to any
Affiliate of a GPF Party, other than in the ordinary course of business;

 

30

 

(j)            entered into or terminated
any Contract outside the ordinary course of business; or

 

(k)           taken any action or omitted
to take any action that has had or could reasonably be expected to have a
Material Adverse Effect.

 

4.18         Finder’s Fees.  Other than Beekman Advisors, Inc., no
Person retained by any GPF Party is or will be entitled to any commission or
finder’s or similar fee in connection with the Transactions.

 

4.19         Additional Information.  Section 4.19 of the GPF Disclosure
Letter accurately lists the following:

 

(a)           the names of all officers,
directors and managers of each GPF Party;

 

(b)           the names and addresses of
every bank and other financial institution at which any GPF Party maintains an
account (whether checking, savings or otherwise), lock box or safety deposit
box, and the account numbers and names of the individuals having signing
authority or other access thereto;

 

(c)           the names of all Persons
authorized to borrow money or incur or guarantee indebtedness by or on behalf
of any GPF Party; and

 

(d)           the names of any Persons
holding powers of attorney from any GPF Party.

 

4.20         Taxes.  Attached to Section 4.20 of the GPF
Disclosure Letter are correct and complete copies of all federal, state,
local, and foreign income Tax Returns filed with respect to GPF or its Business
for taxable periods ended on or after January 1, 2004.  GPF has prepared and filed when due
(including any extensions) any Tax Returns that it was required to file in
connection with its Business or any Contributed GPF Asset. All Taxes owed by
GPF in connection with the Business or any Contributed GPF Asset have been
paid.

 

4.21         Limitation of
Representations and Warranties.  EACH OF CGL AND THE COMPANY HEREBY
ACKNOWLEDGES THAT IF THE CLOSING IS CONSUMMATED, EXCEPT AS MAY EXPRESSLY
BE SET FORTH HEREIN, THE, CONTRIBUTED GPF ASSETS AND ASSUMED GPF LIABILITIES
ARE BEING TRANSFERRED, ASSIGNED, AND CONVEYED TO THE COMPANY ON AN “AS IS,
WHERE IS” BASIS WITH ALL FAULTS, AND WITHOUT ANY WARRANTIES OR REPRESENTATIONS,
EITHER EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR CAUSE OR PURPOSE.

 

5.             Representations
and Warranties with Respect to CGL.

 

CGL
hereby represents and warrants to the Company as of the date hereof and as of
the Closing Date as follows:

 

5.1           Corporate Status.  CGL is a limited liability company duly
formed, validly existing and in good standing under the Laws of the
jurisdiction in which it was formed and is duly qualified or licensed to do
business as a foreign entity in any jurisdiction where the ownership of any of
its assets or the conduct of its Business would require it to be so qualified
or licensed, except where the failure to be so qualified or licensed would not
reasonably be expected to have a Material Adverse Effect.  The Charter

 

31

 

 

Documents of CGL that have been delivered to the GPF
Parties and the Company as of the date hereof are effective under applicable
Laws and are current, correct and complete.

 

5.2           Authorization.  CGL has the requisite power and authority to (i) own
or use the assets used in its Business, as the case may be, (ii) carry on
its Business, (iii) execute and deliver the Transaction Documents to which
it is or will be a party, (iv) perform the Transactions performed or to be
performed by it, and (v) satisfy or perform, as the case may be, its
obligations under those Transaction Documents to which it is or will be a
party. Such execution, delivery and performance by CGL has been, or upon their
execution and delivery will be, duly authorized by all necessary limited liability
company action.  Each Transaction
Document executed and delivered by CGL has been, or upon their execution and
delivery will be, duly executed and delivered by CGL and constitutes a valid
and binding obligation of CGL, enforceable against CGL in accordance with its
terms, except as such enforceability may be limited or affected by applicable
bankruptcy, insolvency, reorganization or other Laws or general application
relating to or affecting the rights of creditors and except as enforceability
may be limited by rules of Law governing specific performance, injunctive
relief or other equitable remedies.

 

5.3           Consents and Approvals.  Except for any notices, filings, consents or
approvals specified in Section 5.3 of the CGL Disclosure Letter
(collectively, the “CGL Required Consents”), neither the execution and
delivery by CGL of the Transaction Documents to which it is a party, nor the
performance of the Transactions performed or to be performed by CGL, require
any notice filing, consent, renegotiation or approval, constitute a Default,
cause any payment obligation to arise under (a) any Law or Court Order to
which CGL is subject, (b) the Charter Documents or bylaws of CGL, or (c) any
Contract, Governmental Permit or other document to which CGL is a party or by
which the properties or other assets of CGL may be bound.

 

5.4           Capitalization.

 

(a)           The entire authorized equity
interests of CGL and the record owners of all of the issued and outstanding
equity interests of CGL are as set forth on Section 5.4 of the CGL
Disclosure Letter.  Other than the
Charter Documents of CGL, there are no Contracts with any Person with respect
to the voting or transfer of any of CGL’s equity interests or with respect to
any other aspect of CGL’s affairs.

 

(b)           Except as set forth in CGL’s
Charter Documents, CGL is not subject to any option or Contract to repurchase
or otherwise acquire or retire any of its equity interests or any warrants,
options or other rights to acquire its equity interests.

 

5.5           Financial Statements.  CGL has delivered to the GPF Parties correct
and complete copies of the following (a) CGL’s audited balance sheet at December 31,
2005, 2006 and 2007 and the related statements of income and cash flows for the
years then ended, and (b) unaudited balance sheet at November 30,
2008, and the related statements of income and cash flows for the eleven-month
period then ended (the financial statements referred to in clauses (a) and
(b) are collectively referred to herein as the “Pre-Signing CGL
Financial Statements”).  Complete and
correct copies of the Pre-Signing CGL Financial Statements are attached hereto
as Section 5.5 of the CGL Disclosure Letter.  The Pre-Signing CGL Financial Statements are,
and those financial records of the CGL delivered to the GPF Parties after the
date hereof pursuant to Section 7.20 (the “Post-Signing CGL
Financial Statements”) will be consistent in all material respects with the
books and records of CGL, and there have not been or will not be any material
transactions that have not been or will not be recorded in the accounting
records underlying such financial statements. 
The Pre-Signing CGL Financial Statements and the Post-Signing CGL
Financial Statements are referred to herein, together, as the “CGL Financial
Statements.” The income statements included in the Pre-Signing CGL
Financial Statements present accurately in all material respects the 

 

32

 

results of operation of the Business of CGL for the
periods indicated thereon.  The Pre-Signing
CGL Financial Statements have been, and the Post-Signing CGL Financial
Statements will be, prepared in accordance with GAAP consistently applied, and
the Pre-Signing CGL Financial Statements present, and the Post-Signing CGL
Financial Statements will present, accurately in all material respects the
financial position and assets and liabilities of CGL as of the dates thereof,
and the results of its operations for the periods then ended, subject to normal
recurring year-end adjustments and the absence of notes in the case of
unaudited CGL Financial Statements.  The
unaudited Pre-Signing CGL Financial Statements are, and the Post-Signing CGL
Financial Statements will be, consistent with the audited financial statements
of CGL.  The balance sheet of CGL as of November 30,
2008 that is included in the CGL Financial Statements is referred to herein as
the “CGL Balance Sheet,” and the date thereof is referred to as the “CGL
Balance Sheet Date.”

 

5.6           Title to Contributed CGL
Assets and Related Matters.  Except as otherwise set forth in Sections
5.7 or 5.14, CGL has good title to, valid leasehold interests in or valid
licenses to use, all of the Contributed CGL Assets, free from any Encumbrances
other than Permitted Encumbrances and those specified in Section 5.6 of
the CGL Disclosure Letter.  The
Contributed CGL Assets constitute all of the material assets, rights and
services, required for the continued administration of CGL’s Servicing Rights
and closing of CGL’s Committed Loans and Loans in Inventory by the Company.  Except for the Excluded CGL Assets, there are
no assets or properties that are material to the operation of CGL’s Business
that are owned by any Person other than CGL that will not be licensed or leased
to the Company under valid, current license arrangements or leases.  CGL owns no fixed assets used in the
operation of CGL’s Business.

 

5.7           Real Property.

 

(a)           Neither CGL nor its
Affiliates owns any Real Property occupied by CGL or used in the operation of
CGL’s Business.

 

(b)           Each Contract by which CGL
occupies or uses any Real Property (including those Contracts of any Affiliate
of CGL relating to Real Property occupied by CGL or used by CGL in the
operation of CGL’s Business) (the “CGL Real Estate Leases”) is in full
force and effect and neither CGL, nor to CGL’s knowledge, the landlord under
such CGL Real Estate Lease is in material Default thereunder.  Current, correct and complete copies of the
CGL Real Estate Leases have been previously delivered to the GPF Parties and the
Company.

 

(c)           To CGL’s knowledge, CGL has
good and valid rights of physical and legal ingress and egress to and from the
Real Property occupied or used by it from and to the public systems for all
usual street, road and utility purposes and no conditions exist that would result
in the termination of such ingress and egress.

 

(d)           CGL’s occupation or use of
the Real Property occupied or used by it is in material compliance with all
applicable Laws.

 

5.8           Accounts Receivable.  The Accounts Receivable that are CGL
Contributed Assets are bona fide Accounts Receivable created in the ordinary
course of CGL’s Business.  To the
knowledge of CGL, all of the Accounts Receivable included in the CGL
Contributed Assets are collectible within six months from the respective dates
of sale, net of any reserves specified in the CGL Balance Sheet.  Section 5.8 of the CGL Disclosure
Letter contains a complete and accurate list of all Accounts Receivable
included in the CGL Contributed Assets and sets forth the aging of each such
Account Receivable as of December 31, 2008.  To the knowledge of CGL, there are no facts
or circumstances (other than general 

 

33

 

conditions affecting the U.S. economy or CGL’s
industry and not disproportionately affecting CGL) that are likely to result in
any increase in the uncollectibility of such Accounts Receivable.

 

5.9           Serviced Loans.

 

(a)           Section 5.9(a) of
the CGL Disclosure Letter sets forth a list of CGL Serviced Loans as
of November 30, 2008.

 

(b)           CGL is, and will be, the
sole legal, beneficial, equitable and record owner and holder of the Servicing
Rights in respect of its Serviced Loans, free and clear of any Encumbrances
(other than Permitted Encumbrances).

 

(c)           The Document File maintained
by CGL (or readily available to CGL) for each CGL Serviced Loan contains, or
will contain, in all material respects, an original or a true and correct copy
of each of the financing documents that are required to be contained in such
Document File in accordance with CGL’s underwriting policies in effect at the
time of the origination of the applicable Serviced Loan, and none such
financing documents relating to any CGL Serviced Loan has, or will have, in any
material respects, been satisfied, canceled, rescinded, or subordinated in any
respect by CGL, nor has CGL waived, nor will it waive, any material rights
thereunder except as reflected in the Document File relating to such CGL
Serviced Loan.

 

(d)           Except as set forth on Section 5.9(d) of
the CGL Disclosure Letter, no borrower is, or will be prior to Closing,
delinquent by more than 30 days in the payment of any material amounts due
under any CGL Serviced Loan.

 

(e)           Except as set forth on Section 5.9(e) of
the CGL Disclosure Letter, none of CGL’s Serviced Loans are, or will be
prior to Closing, in foreclosure.

 

(f)            To the knowledge of CGL, the
Serviced Loans listed on Section 5.9(a) of the CGL Disclosure
Letter and those closed by CGL after the date hereof (i) conformed, or
will conform, in all material respects, at the time such Serviced Loan was
originated, to the applicable Agency Documents or any other Contracts by which
a Serviced Loan was originated and applicable Law, in each case, as to the date
it was originated, except as otherwise noted, and (ii) have been, or will
be, serviced by CGL substantially in accordance with the applicable Agency
Documents or any other Contracts by which a Serviced Loan is serviced and
applicable Law, except as otherwise noted.

 

(g)           None of CGL’s Serviced Loans
are Freddie Mac Targeted Affordable Housing loans, nor (i) are there any
Contracts purporting to bind CGL to service or originate any Freddie Mac
Targeted Affordable Housing loans, or (ii) as of the Closing will there be
any Contracts purporting to bind CGL to service or originate any Freddie Mac
Targeted Affordable Housing loans .

 

(h)           The unpaid principal balance
as of the last day of the month immediately preceding the Closing Date shall be
greater than $4.63 billion.

 

(i)            CGL has made available the
Company and the GPF Parties a complete and correct copy of the CGL Servicing
Tape. The information contained in the CGL Servicing Tape is, and the
information contained in the Post-Signing CGL Servicing Tape shall be, complete
and correct in all material respects as of the applicable dates for such
information set forth in the applicable clauses of the definition of “CGL
Servicing Tape” with respect to each Serviced Loan serviced by CGL as of such
applicable dates.  The CGL Servicing Tape
contains, and the Post-Signing CGL Servicing Tape shall 

 

34

 

contain, all of the information listed in the
clauses of the definition of “CGL Servicing Tape” with respect to each CGL
Serviced Loan as of the applicable dates.

 

(j)            The information contained in
the CGL Servicing Tape shall be deemed to be disclosed to the GPF Parties and,
to the extent the CGL Servicing Tape contains information that should have been
but was not disclosed on Section 5.9 of the CGL Disclosure Letter,
such information shall be deemed to be incorporated by reference into Section 5.9
of the CGL Disclosure Letter and the GPF Parties shall have no rights under
Article 12 with respect thereto.

 

5.10         Liabilities.  CGL does not have any Liabilities, other than
(a) as specified on Section 5.10 of the CGL Disclosure Letter,
(b) as specified in the CGL Balance Sheet (except as heretofore paid or
discharged), (c) as incurred in the ordinary course since the CGL Balance
Sheet Date that, individually or in the aggregate, are not material to the CGL
Business, or (d) those created pursuant to this Agreement.

 

5.11         Legal Proceedings and
Compliance with Law.

 

(a)           Except as set forth on Section 5.11(a) of
the CGL Disclosure Letter, there is no Litigation that is pending or, to
CGL’s knowledge, threatened against CGL or any of its Affiliates (i) against
or involving, directly or indirectly, the Business of CGL or any of the assets
used in the operation of CGL’s Business which, if adversely determined against
CGL, would reasonably be expected to have a Material Adverse Effect, or (ii) seeking
to prevent or challenge any of the Transactions.  Since January 1, 2004, there has been no
material Default under any Laws, applicable to CGL’s Business or any of the
assets used in the operation of CGL’s Business and neither CGL nor any of its
Affiliates has received any written notices, or to knowledge of CGL, any oral
notice from any Governmental Body since January 1, 2004, regarding any
alleged Defaults applicable to CGL’s Business or any of the assets used in the
operation of CGL’s Business under any Law. 
Since January 1, 2004, there has been no material Default with
respect to any Court Order applicable to CGL’s Business or any of the assets
used in the operation of CGL’s Business.

 

(b)           Without limiting the
generality of Section 5.11(a) of the CGL Disclosure Letter,
except as described in Section 5.11(b) of the CGL Disclosure
Letter, to the knowledge of CGL, there has not been any Environmental
Condition (i) at the premises at which CGL’s Business has been conducted
by CGL or any of its Affiliates or any predecessor of either of them, (ii) at
any Real Property owned, leased or operated at any time by CGL, any Person
controlled by CGL or any predecessor of any of them, or (iii) at any
property at which wastes have been deposited or disposed by or at the behest or
direction of any of the foregoing, except any Environmental Condition which
would not reasonably be expected to have a Material Adverse Effect, nor has CGL
received written notice of any such Environmental Condition.

 

(c)           CGL has obtained and is in
material compliance with all Governmental Permits relating to CGL’s Business or
any of the assets used in the operation of CGL’s Business that are required for
the complete operation of the CGL’s Business as currently operated.  All of such Governmental Permits are
currently valid and in full force and CGL has filed such timely and complete
renewal applications as may be required with respect to such Governmental
Permits.  To the knowledge of CGL, no
revocation, cancellation or withdrawal thereof has been threatened.

 

(d)           CGL has provided to the GPF
Parties all of the reviews and audits of CGL or, to the extent relating to CGL’s
Business or any Contributed CGL Asset or Assumed CGL Liability, any of its
Affiliates, conducted by any Governmental Body or Mortgage Program Sponsor, in
each case, since January 1, 2004.

 

35

 

5.12         Contracts.

 

(a)           Section 5.12 of the CGL
Disclosure Letter lists all Contracts of the following types to which
CGL is a party or by which it or any Contributed CGL Asset or Assumed CGL
Liability is bound, except for Minor Contracts:

 

(i)                   Contracts with any present
or former member, manager, officer, employee, partner or consultant of CGL or
any Affiliate thereof;

 

(ii)                  Contracts with any Mortgage
Program Sponsor or Governmental Body;

 

(iii)                any servicing or management
Contract or consultancy Contract;

 

(iv)                Contracts for the future
purchase of, or payment for, supplies or products, or for the performance of
services by a third party;

 

(v)                 Contracts for the lease of
any personal property, vehicles or other assets used in CGL’s Business;

 

(vi)                Contracts to sell or supply
products or to perform services;

 

(vii)               Contracts to lease to or to
operate for any other party any real or personal property;

 

(viii)              any notes, debentures,
bonds, conditional sale Contracts, equipment trust Contracts, letter of credit
agreements, reimbursement Contracts, loan Contracts or other Contracts for the
borrowing or lending of money (including loans to or from officers, directors,
partners, stockholders or Affiliates of CGL or any members of their immediate
families), Contracts or arrangements for a line of credit or for a guarantee
of, or other undertaking in connection with, the indebtedness of any other
Person;

 

(ix)                 Contracts for any capital
expenditure or leasehold improvements;

 

(x)                  any Contracts under which
any Encumbrances exist;

 

(xi)                 any other Contract material
to the operation of CGL’s Business; and

 

(xii)                any other Contracts (other
than Minor Contracts and those described in any of clauses (i) through (xi) above)
not made in the ordinary course of business.

 

(b)           CGL has delivered to the
Company and the GPF Parties complete and correct copies of all written
Contracts of CGL (other than such Contracts which are Excluded CGL Assets),
together with all amendments, supplements or modifications thereto, and
accurate descriptions of all material terms of all oral Contracts, set forth or
required to be set forth on Section 5.12 of the CGL Disclosure Letter.

 

(c)           The Contracts listed on Section 5.12
of the CGL Disclosure Letter and the Minor Contracts excluded from Section 5.12
of the CGL Disclosure Letter are referred to herein as the “CGL
Contracts.”  CGL is not in Default
under any CGL Contracts (including any CGL Real Estate Leases and CGL Non-Real
Estate Leases).  CGL has not received any
communication from, or given any 

 

36

 

communication to, any other party indicating that
CGL or such other party, as the case may be, is in Default under any CGL
Contract.  To the knowledge of CGL, (i) none
of the other parties in any such CGL Contract is in Default thereunder and (ii) each
such CGL Contract is enforceable against any other parties thereto in
accordance with terms thereof, except as such enforceability may be limited or
affected by applicable bankruptcy, insolvency, reorganization or other Laws of
general application relating to or affecting the rights of creditors and except
as enforceability may be limited by rules of Law governing specific
performance, injunctive relief or other equitable remedies.  There are no renegotiations of, attempts to
renegotiate or outstanding rights to renegotiate any amounts paid or payable to
CGL under current or contemplated Contracts with any Person having the
contractual or statutory right to demand or require such renegotiation and, to
knowledge of CGL, no such Person has made any demand for such negotiation.

 

5.13         Insurance.  CGL has in place and maintains insurance
policies with nationally recognized insurers that are financially sound and
reputable.  Such policies are valid,
outstanding and enforceable and, when taken together, provide adequate
insurance for the CGL Business for all risks normally insured against by a
Person carrying on a similar business and are sufficient for compliance with
all regulatory requirements applicable to CGL’s Business. Such policies, when
taken together, will provide adequate coverages against any current claims and
any potential claims made against the CGL Business or CGL’s assets after the
date hereof. There is no material Default with respect to any such policy or
binder, nor has there been any failure to give any notice or present any claim
under any such policy or binder in a timely fashion or in the manner or detail
required by the policy or binder.  CGL
has not received written notice, nor to the knowledge of CGL, oral notice of
non-renewal or cancellation with respect to, or disallowance of any claim
under, any such policy or binder that has been received by CGL or the
policyholder thereof.

 

5.14         Intellectual Property.

 

(a)           Employees.

 

(i)                   To the knowledge of CGL,
none of the employees or consultants of CGL is subject to any contractual or
legal restrictions that might interfere with the use of his or her best efforts
to promote the interests of CGL.  To the
knowledge of CGL, no employee of CGL has entered into any Contract that
restricts or limits in any way the scope or type of work in which the employee
may be engaged or requires the employee to transfer, assign or disclose
information concerning his or her work to anyone other than CGL.  Section 5.14(a)(i) of the CGL
Disclosure Letter lists all Contracts between or among CGL, any employee
thereof and a third party that imparts or that imparted an obligation of
noncompetition, secrecy, confidentiality or non-disclosure upon CGL, any
employee thereof or any third party.

 

(ii)                  To the knowledge of CGL, no
employee or consultant of any of CGL or any Affiliate thereof (A) has used
any other Persons’ Confidential Information in the course of his or her work,
other than such borrower information as is properly used in the ordinary course
of its business, or (B) is, or is currently expected to be, in Default
under any term of any Contract relating to the CGL’s Confidential Information.

 

(b)           Know-How Necessary for the
Business.

 

(i)                   The Intellectual Property
included in the Contributed CGL Assets constitutes all of the Intellectual
Property that is necessary for the operation of CGL’s Business as operated by
CGL during the past 12 months, other than Intellectual Property contained in
the Excluded CGL Assets, if any.  CGL is
the owner of all right, title and interest in and to each item of Intellectual
Property owned by it that is included in the Contributed CGL Assets.  In the case of licensed Intellectual 

 

37

 

Property that is a Contributed CGL Asset, CGL has,
to CGL’s knowledge, obtained all licenses necessary to freely use and commercially
exploit the Intellectual Property used by it that is included in the
Contributed CGL Assets, free and clear of any Encumbrances.  To the knowledge of CGL, CGL has the right to
use all of the Intellectual Property used by it that is included in the Contributed
CGL Assets without payment to a third party.

 

(ii)                  Set forth in Section 5.14(b)(ii) of
the CGL Disclosure Letter is a complete and correct list of all URLs that
are Contributed CGL Assets and a description of all of CGL’s rights with
respect thereto.

 

(iii)                 To the knowledge of CGL,
none of its Intellectual Property that is a Contributed CGL Asset is infringed
or has been challenged or threatened in any way.  To the knowledge of CGL, CGL does not
infringe, nor has it been alleged to infringe, any of the Intellectual Property
or other proprietary right of any other Person.

 

(iv)                CGL has taken all reasonable
precautions to protect the secrecy, confidentiality and value of all
Confidential Information relating to CGL’s Business.

 

5.15         ERISA.  For purposes of the following provisions of
this Section 5.15, the term “CGL” includes any ERISA Affiliate of
CGL.

 

(a)           CGL does not currently
maintain or contribute to a multiemployer plan (as defined in section 3(37) of
ERISA), and CGL has not incurred any Liability with respect to, or arising
from, a multiemployer plan.

 

(b)           The IRS has issued a
favorable determination letter for each CGL Benefit Plan that is a “Qualified
Plan” and each determination letter remains in effect and has not been revoked,
nor has anything occurred or failed to occur with respect to the operation or
amendment of such plans that could cause it to fail to meet section 401(a) of
the Code.

 

(c)           As a result of the
Transactions, the Company will not be subject to any Liability with respect to
any CGL Benefit Plan under the requirements of ERISA, the Code or any other
applicable Laws, including the obligation to contribute to, or make payments or
provide benefits from, any CGL Benefit Plan or any Liability to the PBGC.

 

(d)           With respect to any CGL
Benefit Plan that is an employee welfare benefit plan (within the meaning of Section 3(1) of
ERISA) (i) there is no disqualified benefit, and (ii) no welfare plan
provides health or other benefits after an employee’s or former employee’s
retirement or other termination of employment except as required by Section 4980B
of the Code.

 

5.16         Absence of Certain Changes.  Except as contemplated by this Agreement and,
except as disclosed in Section 5.16 of the CGL Disclosure Letter,
CGL’s Business has been conducted in the ordinary course since the CGL Balance
Sheet Date, and since the CGL Balance Sheet Date, CGL has not:

 

(a)           experienced any change that
has had or could reasonably be expected to have a Material Adverse Effect;

 

(b)           made any distribution or payment
declared or made in respect of its membership interests by way of
distributions, dividends, purchase or redemption of interests or otherwise
(other than quarterly distributions made in the ordinary course of business);

 

38

 

(c)           increased the compensation
payable or to become payable to any manager, officer, employee or agent, except
for increases for non-officer employees made in the ordinary course of
business, nor undertaken any other change in any employment or consulting
arrangement;

 

(d)           entered into or amended any
employment retention, severance, change in control or similar Contract with any
Person;

 

(e)           established or amended any
CGL Benefit Plan, other than general amendments to those CGL Benefit Plans
maintained by Affiliates of CGL and in which CGL employees participate;

 

(f)            sold, assigned or
transferred any Contributed CGL Assets, other than those made in the ordinary
course of business;

 

(g)           subjected any Contributed
CGL Asset to any Encumbrance, other than those made in the ordinary course of
business;

 

(h)           other than in the ordinary
course of business, waived or released any claim or right or cancellation of
any debt held;

 

(i)            made any payments to any
Affiliate of CGL, other than in the ordinary course of business;

 

(j)            entered into or terminated
any Contract outside the ordinary course of business or inconsistent with past
practices; or

 

(k)           taken any action or omitted
to take any action that has or could reasonably be expected to have a Material
Adverse Effect.

 

5.17         Finder’s Fees.  Other than Credit Suisse Securities (USA)
LLC, no Person retained by CGL, or any Affiliate thereof, is or will be
entitled to any commission or finder’s or similar fee in connection with the
Transactions.

 

5.18         Additional Information.  Section 5.18 of the CGL Disclosure
Letter accurately lists the following:

 

(a)           the names of all officers
and managers of CGL; and

 

(b)           the names and addresses of
every bank and other financial institution at which CGL maintains an account
(whether checking, savings or otherwise), lock box or safety deposit box, and
the account numbers and names of the individuals having signing authority or
other access thereto.

 

5.19         Taxes.  Attached to Section 5.19 of the CGL
Disclosure Letter are correct and complete copies of all federal and state
income Tax Returns filed with respect to CGL or its Business for taxable
periods ended on or after January 1, 2004. 
CGL has prepared and filed when due (including any extensions) any Tax
Returns that it was required to file in connection with its Business or any CGL
Contributed Asset. All Taxes owed by CGL in connection with the Business or any
CGL Contributed Asset have been paid.

 

5.20         Limitation of
Representations and Warranties.  EACH GPF PARTY AND THE COMPANY HEREBY
ACKNOWLEDGES THAT IF THE CLOSING IS CONSUMMATED, EXCEPT AS MAY EXPRESSLY
BE SET FORTH HEREIN, THE CONTRIBUTED CGL ASSETS AND 

 

39

 

ASSUMED CGL LIABILITIES ARE BEING TRANSFERRED,
ASSIGNED, AND CONVEYED TO THE COMPANY ON AN “AS IS, WHERE IS” BASIS WITH ALL
FAULTS, AND WITHOUT ANY WARRANTIES OR REPRESENTATIONS, EITHER EXPRESS OR
IMPLIED, OF ANY NATURE WHATSOEVER INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR CAUSE OR PURPOSE.

 

6.             Representations
and Warranties with Respect to the Company.

 

The
Company hereby represents and warrants to each of CGL and the GPF Parties, as
follows:

 

6.1           Organizational Status.  The Company is a limited liability company
duly formed on November 5, 2008, validly existing and in good standing
under the Laws of the jurisdiction of its formation and is qualified to do
business in any jurisdiction where it is required to be so qualified.

 

6.2           Authorization.  The Company has the requisite power and
authority to execute and deliver the Transaction Documents to which it is a
party and to perform the Transactions performed or to be performed by it.  Such execution, delivery and performance by
the Company has been duly authorized by all necessary limited liability company
action.  Each Transaction Document
executed and delivered by the Company has been duly executed and delivered by
the Company and constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.

 

6.3           Consents and Approvals.  Except as set forth on Section 6.3 of
the Company Disclosure Letter (the “Company Required Consents”),
neither the execution and delivery by the Company of the Transaction Documents
to which it is a party, nor the performance of the Transactions performed or to
be performed by the Company, require any filing, consent or approval,
constitute a Default or cause any payment obligation to arise under (a) any
Law or Court Order to which the Company is subject, (b) the Charter
Documents or bylaws of the Company, or (c) any Contract, Governmental
Permit or other document to which the Company is a party or by which the
properties or other assets of the Company may be bound.

 

6.4           Valid Issuance.  Upon the closing of the Transactions and the
Company’s receipt of the contributions of CGL and GPF Parties contemplated by Section 2.2,
the Company Units to be issued to each of GPF, W&D and CGL shall be validly
issued and fully paid.  Upon such
issuance, (a) the Company Units shall not have been issued in violation of
any applicable pre-emptive right, right of first refusal, right of first offer
or similar right vested in any of the Company’s members, and (b) the
Company shall have obtained any waivers and given any notices required to be
obtained or given as result of such issuance, as the case may be, under any
contract to which the Company is a party. 
The issuance of the Company Units contemplated hereby will not violate
any federal or state securities Laws in connection with the offer, sale or
issuance of such Company Units.

 

6.5           Capitalization.  Immediately prior to the Closing, all of the
Company outstanding Company Units will be owned by GPF, and there are no
existing options, warrants, calls, Contracts, commitments or other rights of
any character (including conversion rights) relating to any other Company
Units, although it is likely that the Company will issue certain derivative
securities in the future.  At the
Closing, the Company will not have any outstanding equity interests or
securities convertible or exchangeable for any of its Company Units or
containing any profit participation features, nor any rights or options to
subscribe for or to purchase its Company Units or any securities convertible
into or exchangeable for its Company Units or any equity appreciation rights or
phantom equity plan other than the Company Units to be issued at Closing
pursuant to Section 2.2. 
Except as set forth in the Company’s Charter Documents, the Company is
not and will not be subject to any option or Contract to repurchase or
otherwise acquire or retire any of its Company Units or any warrants, options
or other rights to acquire its 

 

40

 

Company Units. 
Other than the Charter Documents of the Company, there are no Contracts
with any Person with respect to the voting or transfer of any Company Units or
with respect to any other aspect of the Company’s affairs.

 

6.6           Legal Proceedings and
Compliance with Law.  There is no
Litigation that is pending or threatened against the Company (a) involving,
directly or indirectly, the Business of the Company or any of its assets, or (b) seeking
to prevent or challenge any of the Transactions.

 

6.7           Absence of Liabilities.  Other than Liabilities incurred in connection
with its formation, state qualification and licensure and licensure by the
Mortgage Program Sponsors, its obligations under the Transaction Documents and
its Charter Documents, the Company has no Liabilities.

 

6.8           Finder’s Fees.  No Person retained by the Company is or will
be entitled to any commission or finder’s or similar fee in connection with the
Transactions.

 

6.9           Limitation of
Representations and Warranties.  EACH OF CGL AND THE GPF PARTIES HEREBY
ACKNOWLEDGE THAT IF THE CLOSING IS CONSUMMATED, EXCEPT AS MAY EXPRESSLY BE
SET FORTH HEREIN, THE COMPANY SHALL NOT BE DEEMED TO HAVE MADE ANY
REPRESENTATIONS OR WARRANTIES AS TO ITS BUSINESS, ASSETS AND LIABILITIES, INCLUDING
ANY WARRANTIES OR REPRESENTATIONS, EITHER EXPRESS OR IMPLIED, OF ANY NATURE
WHATSOEVER INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR CAUSE OR PURPOSE.

 

7.             Covenants of
the Parties.

 

7.1           Conduct of Business.  From the date hereof and up to and including
the Closing Date, except as contemplated or otherwise consented to in writing
by CGL, in the case of any GPF Party or the Company, and GPF and the Company,
in the case of CGL, each Party shall carry on its Business in the ordinary
course and preserve intact its Business as it is currently organized and shall
use commercially reasonable efforts (but shall not be required to increase
wages or benefits) to keep available the services of the current employees and
agents of such Party and to maintain its relations and goodwill with the
suppliers, customers, and any others having a business relation with such
Party.  In furtherance of and in addition
to such restriction:

 

(a)           no Party will,

 

(i)                   directly or indirectly do
any of the following:  (A) sell,
pledge, dispose of, or encumber (other than Permitted Encumbrances) any of its
assets other than sales of loans originated by such Party to a Mortgage Program
Sponsor or other third parties in the ordinary course of business and in
conformity with the applicable Agency Documents (as modified by appropriate
waivers and past practices accepted by the appropriate Mortgage Program
Sponsor) in all material respects, (B) amend or propose to amend its
Charter Documents, (C) split, combine or reclassify any outstanding shares
of its capital stock or other equity interest, or declare, set aside or pay any
dividend or distribution payable in cash, stock, equity interests, property or
otherwise with respect to such shares or other equity interest (other than
quarterly distributions made in the ordinary course of business), (D) redeem,
purchase, acquire or offer to acquire any shares of its capital stock or other
equity interest, or (E) enter into any agreement with respect to any of
the matters set forth in this Section 7.1;

 

41

 

 

 

(ii)                  (A) issue, sell,
pledge, or dispose of, or agree to issue, sell, pledge, or dispose of, any
additional shares or other equity interests of, or securities convertible into
or exchangeable for, or any options, warrants, or rights of any kind to acquire
any shares or other equity interests of, its capital stock of any class whether
pursuant to any rights agreement, stock or equity plan or otherwise, (B) acquire
(by merger, consolidation, or acquisition of stock or assets) any Person or
division thereof, (C) incur any debt or issue any debt securities, except
in connection with the origination of mortgage backed loans in conformity with
the applicable Agency Documents (as modified by appropriate waivers and past
practices accepted by the appropriate Mortgage Program Sponsor) in all material
respects in the ordinary course of business, or (D) dissolve or otherwise
alter its corporate, partnership, or limited liability company existence;

 

(iii)                 (A) enter into any
Contract with an Affiliate (or other insider, employee, officer or director) or
any other Contract except in the ordinary course of its business, (B) terminate,
modify, assign, waive, release or relinquish any Contract rights or amend any
material rights or claims not in the ordinary course of its business or except
as expressly provided herein, or (C) Default under, or take or fail to
take any action that (with or without notice or lapse of time or both) would
constitute a Default under any term or provision of any Contract;

 

(iv)                except as required to comply
with applicable Law, take any action to institute or modify any material
compensation arrangement, benefit plans, new severance or termination pay
practices with respect to any of its directors, managers officers or employees
who will provide ongoing services to the Company, or to increase the benefits
payable under its compensation, benefit, severance or termination pay practices
or otherwise with respect to such individuals;

 

(v)                 other than a change by CGL
to its tax accounting for revenue from mortgage servicing rights, make any Tax
election, change its method of Tax accounting or settle any claim relating to
Taxes, or take any action that could result in the loss or reduction of any
deferred tax treatment of such Party (other than losses or reductions arising
from changes in its loan portfolio in the ordinary course of business);

 

(vi)                except as otherwise
consented to by the Parties (which consent shall not be unreasonably withheld,
conditioned or delayed), hire any new employees;

 

(vii)               other than in the ordinary
course of business, make any loans, advances, capital expenditures or capital
commitments in excess of $10,000 in the aggregate, other than in respect of the
origination of mortgage backed loans in conformity with the applicable Agency Agreements
(as modified by appropriate waivers and past practices accepted by the
applicable Mortgage Program Sponsor);

 

(viii)              make any loans under the
Freddie Mac Targeted Affordable Housing program;

 

(ix)                 compromise, settle or
otherwise adjust any claim or Litigation, other than the litigation involving
Standard Mortgage Corporation;

 

(x)                  take any action or omit to
do any act, which action or omission will cause it to breach any obligation
contained in this Agreement or cause any of its representation or warranty not
to be true and correct as of the Closing Date;

 

(xi)                 grant any power of attorney;
or

 

42

 

(xii)                agree or otherwise commit,
whether in writing or otherwise, to do any of the foregoing.

 

(b)           each Party will: maintain
its accounting procedures, cash management practices and its policies,
practices and procedures with respect to collection of Accounts Receivable,
establishment of reserves for uncollectible accounts, accrual of Accounts
Receivable, inventory control, prepayment of expenses, payment of trade
accounts payable, accrual of other expenses, deferral of revenue, and
acceptance of customer deposits in accordance with its past customs and
practices under GAAP.

 

7.2           Access to Information.  From the date hereof and up to and including
the Closing Date, each Party shall give the other and its representatives
(including their respective accountants, counsel, consultants, employees and
such other representatives as a Party may designate from time to time), upon
reasonable notice and during normal business hours, reasonable access to the
Real Property, contracts, books, records and affairs of such Party; provided,
that such access does not interfere with the business or operations of a Party.  Each Party shall cause its officers and
employees to furnish to the requesting Party all documents, records and
information (and copies thereof) related to its Business as a requesting Party
or its representatives may reasonably request. 
Notwithstanding the foregoing, nothing in this Section 7.2
shall require any Party to provide access to any information that such Party
reasonably believes would impair or preclude its ability to operate its
business, or otherwise cause such Party to waive, any attorney/client privilege
or other right to confidentiality it may have asserted or that may be available
to it with respect to such information, nor shall it require any Party to
disclose any of the internal, confidential materials prepared by or for it in
connection with the Transactions.

 

7.3           Satisfaction of Liabilities.  After the Closing, CGL and its Affiliates
shall satisfy (by payment, forgiveness or otherwise) any Excluded CGL Liability
and the GPF Parties and their Affiliates shall satisfy (by payment, forgiveness
or otherwise) any Excluded GPF Liability, each in accordance with the terms
thereof.

 

7.4           No Solicitation.  From and after the date hereof and up to and
including the Termination Date, without the prior written consent of the other
Parties, no Party will, and each Party will cause its controlled Affiliates not
to, and will cause their respective directors, managers, officers, employees,
and other agents and representatives (including any investment banking, legal
or accounting firm retained by it or any of them and any individual member or
employee of the foregoing) not to: (a) initiate, encourage, solicit or
seek, directly or indirectly, any inquiries or the making or implementation of
any proposal or offer (including any proposal or offer to its stockholders or
any of them) with respect to a merger, acquisition, consolidation,
recapitalization, liquidation, dissolution, equity investment or similar
transaction involving, or any purchase or license of all or any substantial
portion of the assets or any securities of, such Party (any such proposal or
offer being hereinafter referred to as an “Acquisition Proposal”), (b) engage
in any negotiations concerning, or provide any confidential information or data
to, or have any substantive discussions with, any Person relating to an
Acquisition Proposal, (c) otherwise facilitate or cooperate in any effort
or attempt to make, implement or accept an Acquisition Proposal, or (d) enter
into Contract with any Person relating to an Acquisition Proposal.  If a Party receives any such inquiries,
offers or proposals it shall (a) notify the other Parties orally and in
writing of any such inquiries, offers or proposals (including the terms and
conditions of any such proposal and the identity of the Person making it),
within 24 hours of the receipt thereof, (b) keep the other Parties
informed of the status and details of any such inquiry, offer or proposal, and (c) give
the other Parties five days’ advance notice of any Contract to be entered into
with, or any information to be supplied to, any Person making such inquiry,
offer or proposal.

 

7.5           Update of Disclosure Letters.  Between the date hereof and the Closing Date:

 

43

 

(a)           CGL shall promptly disclose
to the Company and the GPF Parties in writing any information set forth in the
CGL Disclosure Letter that is no longer complete, true or applicable and any
information of the nature of that set forth in the CGL Disclosure Letter that
arises after the date hereof and that would have been required to be included
in the CGL Disclosure Letter if such information had been obtained on the date
of delivery thereof.  Any such updates
shall not have the effect of curing any breach as of the date hereof of any
representation or warranty contained herein and shall not affect any of GPF’s
or the Company’s rights under Article 12 with respect thereto.

 

(b)           the GPF Parties shall
promptly disclose to the Company and CGL in writing any information set forth
in the GPF Disclosure Letter that is no longer complete, true or applicable and
any information of the nature of that set forth in the GPF Disclosure Letter
that arises after the date hereof and that would have been required to be
included in the GPF Disclosure Letter if such information had been obtained on
the date of delivery thereof.  Any such
updates shall not have the effect of curing any breach as of the date hereof of
any representation or warranty contained herein and shall not affect any of CGL’s
or the Company’s rights under Article 12 with respect thereto.

 

7.6           Fulfillment of Closing
Conditions.

 

(a)           At and prior to the Closing,
each Party shall use commercially reasonable efforts to fulfill, and to cause
each other to fulfill, as soon as practicable before the Termination Date the
conditions specified in Articles 8, 9 and 10 to the extent that the
fulfillment of such conditions is within its or his control.  Additionally, each of the Parties shall cause
any other controlled Affiliate to take or refrain from taking any action that
may be necessary to carry out the Transactions. 
In connection with the foregoing, each Party will (i) refrain from
any actions that would cause any of its representations and warranties to be
inaccurate as of the Closing, and take any reasonable actions within its
control that would be necessary to prevent its representations and warranties
from being inaccurate as of the Closing, (ii) execute and deliver the
applicable agreements and other documents referred to in Articles 8, 9 and
10, (iii) comply with all applicable Laws in connection with its
execution, delivery and performance of this Agreement and the Transactions, (iv) use
commercially reasonable efforts to obtain in a timely manner all necessary
waivers, consents and approvals required under any Laws, Contracts or
otherwise, including obtaining any GPF Required Consents and CGL Required
Consents, and (v) use commercially reasonable efforts to take, or cause to
be taken, all other actions and to do, or cause to be done, all other things
reasonably necessary, proper or advisable to consummate and make effective as
promptly as practicable the Transactions.

 

(b)           Without limiting the
generality of the foregoing, each of the Parties shall use their commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done all things necessary, with respect to (i) seeking to
obtain prior to the Closing Date all Governmental Permits and Mortgage Program
Sponsor approvals as are necessary for the consummation of the Transactions,
including such clearances as may be required under any Mortgage Program
Sponsor, as set forth below and (ii) seeking to effect all necessary
registrations and other filings and submissions of information requested by any
Governmental Body or any Mortgage Program Sponsor in connection with this
Agreement and the Transactions; provided, however, that such
action shall not include commencing or participating in any Litigation or offer
or grant of any accommodation (financial or otherwise) to any third party; provided,
further, that no Party shall be obligated hereunder to divest, either
individually or in the aggregate, of any material portion of its or any of its
Affiliate’s assets, rights or properties owned prior to the Closing Date.  As promptly as practicable, each Mortgage
Program Sponsor the notifications and other information required to be filed
with any Mortgage Program Sponsor with respect to the Transactions.  Each of the Parties shall make available to
the other Parties such information relative to its business, assets and
property as the other may reasonably request in order to prepare filings or
submissions as required by any Mortgage Program Sponsor.  Each of the Parties shall keep the other 

 

44

 

Parties apprised in a timely manner of the status
and substance of all meaningful actions or communications between it (or its
advisors) and any Mortgage Program Sponsor relating to this Agreement or any of
the matters described in this subsection (b). 
None of the Parties shall take any meaningful actions or enter into any
accommodation, resolution or settlement with any such agency or Mortgage
Program Sponsor relating to this Agreement or any of the matters described in
this subsection (b) without first discussing it with the other
Parties.  Each of the Parties each hereby
acknowledge that (i) GPF will have primary authority for addressing and
resolving any issues with respect to the Transactions that may arise in the
course of the Fannie Mae review process and (ii) CGL will have primary
authority for addressing and resolving any issues with respect to the
Transactions that may arise in the course of the Freddie Mac review
process.  The Parties hereby mutually
commit to instruct their respective counsel to cooperate with each other and
use commercially reasonable efforts to facilitate and expedite the
identification and resolution of any such issues and, consequently, approval of
the Mortgage Program Sponsors at the earliest practicable date.  CGL shall pay the transfer fee in respect of
the Mortgage Program Sponsor Transfer Agreements.

 

7.7           Transfer of Affiliated Party
Assets.  From and after the date
hereof, to the extent that the Affiliates of any GPF Party, on the one hand,
and the Affiliates of CGL, on the other, own or hold for use an asset (other
than indebtedness) that is used by any GPF Party or CGL, respectively, in its
Business that is intended to be a Contributed GPF Asset or Contributed CGL
Asset, respectively, then the GPF Parties and their Affiliates or CGL and its
Affiliates, respectively, shall take such commercially reasonable steps as may
be necessary or appropriate so that (a) at Closing a GPF Party or CGL,
respectively, shall own or have valid and enforceable rights to convey such
asset to the Company, or, if such transfer cannot be completed prior to the
Closing, then, alternatively, (b) such asset is conveyed to the Company as
soon as is reasonably practicable after the Closing, including executing and
delivering such additional instruments of conveyance and transfer as may be
required to transfer ownership of such asset to the Company and otherwise put
the Company in possession of such asset.

 

7.8           Public Announcements.  The Parties shall consult with each other
before issuing any press release or making any public statement with respect to
this Agreement and the Transactions and, except as may be required by
applicable Law, none of the Parties nor any Affiliate thereof shall issue any
such press release or make any such public statement without the prior written
consent of the other Parties.

 

7.9           Tax Matters.  The GPF Parties and their Affiliates and CGL
and its Affiliates each shall: (a) provide all information regarding the
Contributed GPF Assets and the Assumed GPF Liabilities and Contributed CGL Assets
and Assumed CGL Liabilities, respectively, to the extent such information could
be relevant to any Tax Return to be filed by the Company or a Party, (b) make
or permit commercially reasonable accommodations with regard to any Assumed GPF
Liabilities and Assumed CGL Liabilities, respectively, to minimize gain
recognition under Section 731 of the Code, (c) promptly provide
notice to the Company and the other Party of any proposed adjustment by a
taxing authority for a period prior to the Closing Date with regard to the
Party’s Business or the contributed assets, and (d) cooperate fully in any
Tax Return required to be filed by the Company, a Party, or an Affiliate of a
Party.

 

7.10         Confidentiality.  If the Transactions are not consummated, each
Party and its representatives shall treat all Confidential Information as
confidential, will not disclose any Confidential Information except to its
representatives on a need-to-know basis or if required by law or requested by
judicial or regulatory process to be disclosed and shall immediately (a) cease
using the Confidential Information, (b) destroy or return to such other
Party or Affiliate all Confidential Information and all copies made by it
or its representatives of the Confidential Information provided by such other
Party or Affiliate (other than such documents and other materials as required
by any law or legal process, regulation or internal policies to be retained and
any computer records and files containing Confidential 

 

45

 

Information that have been created as a result of
automatic archiving or back-up procedures), and (c) destroy any and all
notes, analyses, compilations, studies or other documents prepared by it or any
of its Affiliates or representatives to the extent they contain or reflect any
Confidential Information. The return and/or destruction of Confidential
Information pursuant to this Section 7.10 shall be certified in
writing to the Party providing such Confidential Information by an authorized
officer supervising such return and destruction within three Business Days
after written request from such Party. Notwithstanding the return or
destruction of the Confidential Information pursuant to this Section 7.10,
each Party shall continue to be bound by the obligations of confidentiality and
other obligations hereunder with respect to such information.

 

7.11         Expenses.  Except as otherwise provided herein, the
Parties shall each pay all of their respective legal, accounting and other
expenses incurred by such Party in connection with the Transactions.

 

7.12         Employees.  Prior to Closing, each of the GPF Parties and
CGL shall provide the Company a true and correct list of all employees
performing services for the Business of the GPF Parties and CGL, respectively,
at any time during the past 12 months (“Eligible Employees”) identified
by name, U.S. social security number (if applicable, and, if not, a valid I-9 Form for
such employee), hire date and then current base salary.  Effective as of the Closing Date, each of the
GPF Parties and CGL shall terminate the employment of all Eligible Employees,
and the Company shall offer employment to all Eligible Employees.  Prior to the Closing, CGL shall have received
a contribution of $4,833,205 (the “CFI Employee Contribution”) from CFI
to be utilized following the Closing in the manner set forth in Sections 3.3.5,
3.3.6 and 3.3.7 of the Operating Agreement.

 

7.13         CGL Credit Risk.  Prior to the Closing, CGL shall cause the
$2.5 million letter of credit in favor of Fannie Mae established by HSBC Bank
USA to be replaced with $4,754,223.00, which will be contributed to CGL by CFI
(the “CFI Backstop Contribution”) to fully fund the capital and
liquidity required by Fannie Mae, which may equal or exceed the stated Fannie
Mae’s DUS capital standards for non-rated entities.

 

7.14         Capmark Contract.  Prior to the Closing, CGL shall have received
a contribution of cash from CFI in an amount equal to (a) pay $100,000 on
account of termination fee and other costs and expenses in connection with the
termination of the Company’s servicing contract with Capmark, plus (b) $400,000
to offset the costs of transferring the services previously provided by Capmark
to the Company (the “CFI Capmark Contribution”).  If there are fees that result from the actual
cancellation of the Capmark contract that are greater than the amount of the
CFI Capmark Contribution, then CGL shall promptly pay the amount of such fees
over the Company.

 

7.15         FHA/HUD Operating Deficit.  Prior to the Closing, CGL shall have received
a contribution of $750,000 from CFI to offset a portion of the operating
deficits in CGL’s FHA lending operation (the “CFI FHA Contribution”).  CGL may use the CFI FHA Contribution to pay
expenses incurred after the Closing related to the HUD Business in accordance
with the terms of the Transition Services Agreement.  Immediately following the execution and
delivery of the HUD Transfer Agreement by all parties thereto, CGL shall
provide GPF with a reasonably acceptable and detailed accounting of any
expenses paid by it and contribute the then remaining CFI FHA Contribution to
the Company.

 

7.16         CGL Actual Losses
Contribution.  Prior to
Closing, CGL shall have received a contribution of $2,534,081.00 to cover the
actual and estimated losses (as agreed to by the Parties) related to loans in
CGL’s Servicing Portfolio, or pre-funded such amount with the applicable
Mortgage Program Sponsor (“CGL Actual Losses Contribution”).  If the actual losses and estimated losses (as
agreed to by the Parties) related to loans in CGL’s Servicing Portfolio at
Closing is greater than the CGL Actual 

 

46

 

Losses Contribution, then immediately prior to
Closing, CGL shall have received a contribution in the amount of such
difference (“CGL Actual Losses True-Up Contribution”).

 

7.17         GPF Actual Losses
Contribution.  Prior to
the Closing, the GPF Parties shall have received a contribution to cover actual
losses, if known, or estimated losses, if not known, related to loans in the
GPF Parties’ Servicing Portfolio, in such amount as is agreed to by the
Parties, or pre-funded such amount with the applicable Mortgage Program Sponsor
(“GPF Actual Losses Contribution”).

 

7.18         HUD Transfer Agreement; HUD
Assets.  To the extent not executed and
delivered prior to Closing, the Parties will cooperate with each other in
accordance with the terms of the Transition Services Agreement to execute and
deliver the HUD Transfer Agreement by the time set forth therein.  Immediately following the execution and
delivery of the HUD Transfer Agreement by all parties thereto, CGL shall
contribute the HUD Assets to the Company.

 

7.19         Post-Signing Servicing Tapes.

 

(a)           Prior to the Closing, each
GPF Party shall deliver to the Company and CGL a complete and correct copy of
its electronic files containing the information specified in the definition of “GPF
Servicing Tape” as of December 31, 2008 (the “Post-Signing GPF
Servicing Tape”).

 

(b)           Prior to the Closing, CGL
shall deliver to the Company and each GPF Party a complete and correct copy of
its electronic files containing the information specified in the definition of “CGL
Servicing Tape” as of December 31, 2008 (the “Post-Signing CGL
Servicing Tape”).

 

7.20         Additional Financial
Statements; Reports.  Prior to
the Closing, CGL shall deliver to the Company and the GPF Parties an unaudited
balance sheet of CGL as of December 31, 2008 and the related statements of
income and cash flows for the year ended December 31, 2008, and the GPF
Parties shall deliver to CGL unaudited Consolidated and Combined Financial
Statements of Walker & Dunlop, Inc. and its Affiliates as of and
for the year ended December 31, 2008, which shall include the
Consolidating and Combining Balance Sheet as of December 31, 2008 and the
Consolidating and Combining Statement of Income for the year ended December 31,
2008 of several companies including the GPF Parties.

 

7.21         CGL Affiliate Transactions.  After the Closing, CGL and its Affiliates
shall continue to engage in such intra-company and affiliate transactions as
are necessary in order for CGL to satisfy (by payment, forgiveness or
otherwise) of its obligations under the Transaction Documents.

 

7.22         Estimated CGL Closing
Balance Sheet.  Prior to
the Closing, CGL shall provide the Company with a good faith estimate of the
CGL Closing Balance Sheet.

 

8.             Conditions
Precedent to Obligations of CGL.  All obligations of CGL to consummate the
Transactions are subject to the satisfaction (or waiver by CGL) prior thereto
of each of the conditions set forth in this Article 8. The waiver
by CGL of any condition based upon the accuracy of any representation or
warranty of any GPF Party or the Company or the performance of or compliance by
any GPF Party or the Company with any covenant or obligation to be performed or
complied with by such GPF Party or the Company, will not affect the right to
indemnification or reimbursement right or other remedy of CGL or the Company
based upon such representations, warranties, covenants and obligations.

 

8.1           Representations and
Warranties.  The
representations and warranties of each of the Company and the GPF Parties set
forth in this Agreement that are qualified by materiality (considered
collectively and individually) shall have been true and correct at and as of the
date hereof and shall be 

 

47

 

true and correct at and as of the Closing Date as if
made at and as of the Closing Date, and the representations and warranties that
are not so qualified (considered collectively and individually) shall have been
true and correct in all material respects at and as of the date hereof and
shall be true and correct in all material respects at and as of the Closing
Date as if made at and as of the Closing Date, except to the extent that such
representations and warranties refer specifically to an earlier date, in which
case such representations and warranties shall have been true and correct as of
such earlier date, in each case, without taking into account any qualifiers of
materiality or qualifiers of similar import or any updates to either of the GPF
Disclosure Letter or the Company Disclosure Letter made pursuant to Section 7.5.

 

8.2           Agreements, Conditions and
Covenants.  Each of the
Company and the GPF Parties shall have performed or complied with all
agreements, conditions and covenants required by this Agreement to be performed
or complied with or by them on or before the Closing Date.

 

8.3           Material Adverse Effect.  Since the GPF Balance Sheet Date, there shall
not have been any Material Adverse Effect with respect to any GPF Party or its
Business nor shall have there been any fact, circumstance or occurrence that
has had or could reasonably be expected to have a Material Adverse Effect on
any GPF Party or its Business that continues to exist on the Closing Date.

 

8.4           Required Consents;
Deliverables.  The GPF
Parties shall have received all of the GPF Required Consents set forth on Schedule
3.2(a)(v) and the Company shall have received all of the Company
Required Consents set forth on Schedule 3.2(c)(iv), each in form and
substance reasonably satisfactory to CGL, and the GPF Parties and the Company
shall each have delivered those items required to be delivered pursuant to Sections
3.2(a) and 3.2(c), respectively.

 

8.5           Legality.  No Law or Court Order shall have been enacted,
entered, promulgated or enforced by any Governmental Body that is in effect and
(a) has the effect of making the Transactions illegal or otherwise
prohibiting the consummation of the Transactions, or (b) has a reasonable
likelihood of causing a Material Adverse Effect.  CGL shall have received any consent,
approval, waiver, clearance or authorization from any Governmental Body or
Mortgage Program Sponsor that may be required to consummate the Transactions,
including those required by any Mortgage Program Sponsor, and all terminations
or expirations or waiting periods imposed by any Governmental Body or Mortgage
Program Sponsor necessary for the consummation of the Transactions shall have
occurred.

 

8.6           Disclosure Letters.  CGL, in its sole discretion, shall be
satisfied with the form and substance of any updates to the GPF Disclosure
Letter and the Company Disclosure Letter delivered pursuant to Section 7.5.

 

8.7           GPF Net Working Capital.  The GPF Net Working Capital shall be equal to
or greater than $1.0 million and CGL shall have received a certificate of the
Chief Executive Officer of GPF and of the Chief Executive Officer of W&D
certifying as to such fact.

 

8.8           Mortgage Program Sponsor
Transfer Agreements Approval.  Each Mortgage Program Sponsor Transfer
Agreement shall have been executed by the applicable Mortgage Program Sponsor,
other than the HUD Transfer Agreement, which may be executed after the Closing.

 

8.9           Serviced Loan Portfolio.  The unpaid principal balance per the
Post-Signing GPF Servicing Tape shall be greater than $4.68 billion, and CGL
shall have received a certificate of the Chief Executive Officer of GPF and of
the Chief Executive Officer of W&D certifying as to such effect.

 

8.10         Legal Opinion.  CGL shall have received the written opinion
of Morgan, Lewis & Bockius LLP, counsel to GPF, in form and substance
reasonably acceptable to CGL and its counsel.

 

48

 

8.11         GPF Contribution.  The GPF Parties shall have received or
pre-funded the GPF Actual Losses Contribution and the GPF Parties shall have
provided evidence of such contribution or pre-funding, as applicable, to CGL.

 

9.             Conditions
Precedent to Obligations of the GPF Parties.  All obligations of the GPF Parties to
consummate the Transactions are subject to the satisfaction (or waiver by the
GPF Parties) prior thereto of each of the conditions set forth in this Article 9.
The waiver by any GPF Party of any condition based upon the accuracy of any
representation or warranty of CGL or the performance of or compliance by CGL
with any covenant or obligation to be performed or complied with by CGL, will
not affect the right to indemnification or reimbursement right or other remedy
of any GPF Party or the Company based upon such representations, warranties,
covenants and obligations.

 

9.1           Representations and
Warranties.  The
representations and warranties of each of the Company and CGL set forth in this
Agreement that are qualified by materiality (considered collectively and
individually) shall have been true and correct at and as of the date hereof and
shall be true and correct at and as of the Closing Date as if made at and as of
the Closing Date, and the representations and warranties that are not so qualified
(considered collectively and individually) shall have been true and correct in
all material respects at and as of the date hereof and shall be true and
correct in all material respects at and as of the Closing Date as if made at
and as of the Closing Date, except to the extent that such representations and
warranties refer specifically to an earlier date, in which case such
representations and warranties shall have been true and correct as of such
earlier date, in each case, without taking into account any qualifiers of
materiality or qualifiers of similar import or any updates to either of the
Company Disclosure Letter or the CGL Disclosure Letter made pursuant to Section 7.5.

 

9.2           Agreements, Conditions and
Covenants.  Each of the
Company and CGL shall have performed or complied with all agreements,
conditions and covenants required by this Agreement to be performed or complied
with or by them on or before the Closing Date.

 

9.3           Material Adverse Effect.  Since the CGL Balance Sheet Date, there shall
not have been any Material Adverse Effect with respect to CGL’s Business nor
shall have there been any fact, circumstance or occurrence that has had or
could reasonably be expected to have a Material Adverse Effect on CGL’s
Business that continues to exist on the Closing Date.

 

9.4           Required Consents;
Deliverables.  CGL shall
have received all of the CGL Required Consents set forth on Schedule
3.2(b)(v), in form and substance reasonably satisfactory to the GPF
Parties, and CGL shall have delivered those items required to be delivered
pursuant to Section 3.2(b).

 

9.5           Legality.  No Law or Court Order shall have been
enacted, entered, promulgated or enforced by any Governmental Body that is in
effect and (a) has the effect of making any of the Transactions illegal or
otherwise prohibiting the consummation of such purchase and sale, or (b) has
a reasonable likelihood of causing a Material Adverse Effect.  The GPF Parties shall have received any
consent, approval, waiver, clearance or authorization from any Governmental
Body or Mortgage Program Sponsor that may be required to consummate the
Transactions, including those required by any Mortgage Program Sponsor, and all
terminations or expirations or waiting periods imposed by any Governmental Body
or Mortgage Program Sponsor necessary for the consummation of the Transactions
shall have occurred.

 

9.6           CGL Disclosure Letter.  The GPF Parties, in their sole discretion,
shall be satisfied with the form and substance of any updates to the CGL
Disclosure Letter delivered pursuant to Section 7.5.

 

49

 

9.7           CGL Contributions.  CFI shall have made or pre-funded, as
applicable, the CFI Employee Contribution, CFI Capmark Contribution, CFI FHA
Contribution, CFI Backstop Contribution, CGL Actual Losses Contribution and, if
applicable, the CGL Actual Losses True-Up Contribution and CGL shall have
provided evidence of such contributions or pre-funding, as applicable, to the
GPF Parties.

 

9.8           Mortgage Program Sponsor
Transfer Agreements Approval.  Each Mortgage Program Sponsor Transfer
Agreement shall have been executed by the applicable Mortgage Program Sponsor,
other than the HUD Transfer Agreement, which may be executed by HUD after the
Closing.

 

9.9           Serviced Loan Portfolio.  The unpaid principal balance per the
Post-Signing CGL Servicing Tape shall be greater than $4.63 billion, and the
GPF Parties shall have received a certificate of the Chief Executive Officer of
CGL certifying to such effect.

 

9.10         Legal Opinion.  GPF shall have received the written opinion
of Ballard Spahr Andrews & Ingersoll, LLP, counsel to the CGL, in form
and substance reasonably acceptable to GPF and its counsel.

 

9.11         Commission Agreements.  GPF shall have received counterpart signature
pages executed by CGL’s loan production personnel to commission agreements
between the Company and such personnel, such agreements to be on terms
reasonably satisfactory to the GPF Parties.

 

9.12         Retention Agreement.  GPF shall have received counterpart signature
pages executed by Verne Murray and Jeff Burns to commission and retention
agreements between such personnel and the Company, such agreements to be on
terms reasonably satisfactory to the GPF Parties.

 

9.13         Ownership of CGL.  CFI or its Affiliates shall own 100% of the membership
interests of CGL.

 

10.           Conditions Precedent to Obligations of the Company.  All obligations of the Company to consummate
the Transactions are subject to the satisfaction (or waiver by the Company)
prior thereto of each of the conditions set forth in this Article 10.
The waiver by the Company of any condition based upon the accuracy of any
representation or warranty of any of CGL or the GPF Parties or the performance
of or compliance by any of CGL or the GPF Parties with any covenant or
obligation to be performed or complied with by any of CGL or the GPF Parties,
will not affect the right to indemnification or reimbursement right or other
remedy of the Company based upon such representations, warranties, covenants
and obligations.

 

10.1         Representations and
Warranties.  The
representations and warranties of any of CGL or the GPF Parties set forth in
this Agreement that are qualified by materiality (considered collectively and
individually) shall have been true and correct at and as of the date hereof and
shall be true and correct at and as of the Closing Date as if made at and as of
the Closing Date, and the representations and warranties that are not so
qualified (considered collectively and individually) shall have been true and
correct in all material respects at and as of the date hereof and shall be true
and correct in all material respects at and as of the Closing Date as if made
at and as of the Closing Date, except to the extent that such representations
and warranties refer specifically to an earlier date, in which case such
representations and warranties shall have been true and correct as of such
earlier date, in each case, without taking into account any qualifiers of
materiality or qualifiers of similar import or any updates to the CGL Disclosure
Letter or GPF Disclosure Letter made pursuant to Section 7.5.

 

10.2         Agreements, Conditions and
Covenants.  CGL and the
GPF Parties shall have performed or complied with all agreements, conditions
and covenants required by this Agreement to be performed or complied with or by
them on or before the Closing Date.

 

50

 

10.3         Material Adverse Effect.  Since the CGL Balance Sheet Date, there shall
not have been any Material Adverse Effect with respect to CGL or its Business
nor shall have there been any fact, circumstance or occurrence that has had or
could reasonably be expected to have a Material Adverse Effect on CGL or its
Business that continues to exist on the Closing Date.

 

10.4         Required Consents; Deliverables.  CGL and the GPF Parties shall have received
all of the CGL Required Consents set forth on Schedule 3.2(b)(v) and
GPF Required Consents set forth on Schedule 3.2(a)(v), respectively, in
form and substance reasonably satisfactory to the Company, and the GPF Parties
and CGL shall have delivered those items required to be delivered pursuant to Sections
3.2(a) and 3.2(b), respectively.

 

10.5         Legality.  No Law or Court Order shall have been
enacted, entered, promulgated or enforced by any Governmental Body that is in
effect and (a) has the effect of making any of the Transactions illegal or
otherwise prohibiting the consummation of such purchase and sale, or (b) has
a reasonable likelihood of causing a Material Adverse Effect.  The Company shall have received any consent,
approval, waiver, clearance or authorization from any Governmental Body or
Mortgage Program Sponsor that may be required to consummate the Transactions,
including those required by any Mortgage Program Sponsor, and all terminations
or expirations or waiting periods imposed by any Governmental Body or Mortgage
Program Sponsor necessary for the consummation of the Transactions shall have
occurred.

 

10.6         Disclosure Letter.  The Company, in its sole discretion, shall be
satisfied with the form and substance of any updates to the CGL Disclosure
Letter and the GPF Disclosure Letter delivered pursuant to Section 7.5.

 

10.7         CGL Contributions.  CFI shall have made or pre-funded, as
applicable, the CFI Employee Contribution, CFI Capmark Contribution, CFI FHA
Contribution, CFI Backstop Contribution, CGL Actual Losses Contribution, and,
if applicable, the CGL Actual Losses True-Up Contribution and provided evidence
of such contributions or pre-funding, as applicable, to the Company.

 

10.8         GPF Net Working Capital.  The GPF Net Working Capital shall be $1.0
million and the Company shall have received a certificate of the Chief
Executive Officer of GPF and of the Chief Executive Officer of W&D
certifying as to such fact.

 

10.9         Mortgage Program Sponsor
Transfer Agreements Approval.  Each Mortgage Program Sponsor Transfer
Agreement shall have been executed by the applicable Mortgage Program Sponsor,
other than the HUD Transfer Agreement, which may be executed by HUD after the
Closing.

 

10.10       CGL Serviced Loan Portfolio.  The unpaid principal balance per the
Post-Signing CGL Servicing Tape shall be greater than $4.63 billion, and the
Company shall have received a certificate of the Chief Executive Officer of CGL
certifying to such effect.

 

10.11       GPF Serviced Loan Portfolio.  The unpaid principal balance per the
Post-Signing GPF Servicing Tape shall be greater than $4.68 billion, and the
Company shall have received a certificate of the Chief Executive Officer of GPF
and of the Chief Executive Officer of W&D certifying to such effect.

 

10.12       Legal Opinions.  The Company shall have received a written
opinion of Morgan, Lewis & Bockius LLP, counsel to GPF, and from
Ballard Spahr Andrews & Ingersoll, LLP, counsel to CGL, in each case,
in form and substance reasonably acceptable to the Company and its counsel.

 

51

 

 

10.13      GPF Contribution.  The GPF Parties shall have received or
pre-funded the GPF Actual Losses Contribution and the GPF Parties shall have
provided evidence of such contribution or pre-funding, as applicable, to the
Company.

 

10.14      Commission Agreements.  CGL shall have delivered counterpart
signature pages executed by CGL’s loan production personnel to commission
agreements between the Company and such personnel, such agreements to be on
terms reasonably satisfactory to the Company.

 

10.15      Retention Agreement.  CGL shall have delivered counterpart
signature pages executed by Verne Murray and Jeff Burns to commission and
retention agreements between the Company and such personnel, such agreements to
be on terms reasonably satisfactory to the Company.

 

10.16      Ownership of CGL.  CFI or its Affiliates shall own 100% of the
membership interests of CGL.

 

10.17      Estimated CGL Closing
Balance Sheet.  CGL shall
have delivered a pro-forma balance sheet in the form of the balance sheet set
forth on Schedule 10.17, which shall be in form and substance acceptable
to the Company (the “CGL Closing Balance Sheet”).

 

11.          Indemnification.

 

11.1        By CGL.  From and after the Closing Date, CGL shall
indemnify and hold harmless the Company and its officers, directors, managers,
employees, stockholders, members, partners, agents and Affiliates (other than
CGL and its respective officers, directors, employees, stockholders, members,
partners and agents) (each, an “Indemnified GPF Party”) from and against
any liabilities, claims, demands, judgments, losses, costs, damages or expenses
whatsoever (including reasonable attorneys’, consultants’ and other
professional fees and disbursements) of every kind, nature and description
incurred by such Indemnified GPF Party in connection therewith, including
consequential, special, punitive damages and lost profits and diminution in
value (collectively, “Damages”) that such Indemnified GPF Party may
sustain, suffer or incur and that result from, arise out of or relate to (a) any
breach of any of the representations and warranties of CGL contained in this
Agreement or any other Transaction Document or in the Closing Certificates, (b) any
breach of the covenants or agreements of CGL contained in this Agreement or any
other Transaction Document or the Closing Certificates, (c) a request or
requirement by a third-party that the Company repurchase a Serviced Loan
originated by CGL, (d) any Excluded CGL Liability, (e) any Liability
of CGL involving any Excluded CGL Asset and (f) SMC being a member of the
Company.

 

11.2        By the GPF Parties.  From and after the Closing Date, the GPF
Parties, jointly and severally, shall indemnify and hold harmless the Company
and its officers, directors, managers, employees, stockholders, members,
partners, agents, and Affiliates (other than the GPF Parties and their
respective officers, directors, employees, stockholders, members, partners and
agents) (each, an “Indemnified CGL Party”) from and against any Damages
that such Indemnified CGL Party may sustain, suffer or incur and that result
from, arise out of or relate to (a) any breach of any of the respective
representations or warranties of any GPF Party contained in this Agreement or
any other Transaction Document or in the Closing Certificates, (b) any
breach of the respective covenants or agreements of any GPF Party contained in
this Agreement or any other Transaction Document or in the Closing
Certificates, (c) a request or requirement by a third-party that the
Company repurchase a Serviced Loan originated by a GPF Party, (d) any
Excluded GPF Liability, and (e) any Liability of any of the GPF Parties
involving any Excluded GPF Asset.

 

52

 

11.3        Procedure for Claims.

 

(a)           Any Person who desires to
seek indemnification under any part of this Article 11 (each, an “Indemnified
Party”) shall give written notice in reasonable detail (a “Claim Notice”)
to each Party responsible or alleged to be responsible for indemnification
hereunder (an “Indemnitor”).  Such
notice shall briefly explain the nature of the claim and the parties known to
be invoked, and shall specify the amount thereof.  If the matter to which a claim relates shall
not have been resolved as of the date of the Claim Notice, the Indemnified
Party shall estimate the amount of the claim in the Claim Notice, but also
specify therein that the claim has not yet been liquidated (an “Unliquidated
Claim”).  If an Indemnified Party
gives a Claim Notice for an Unliquidated Claim, the Indemnified Party shall
also give a second Claim Notice (the “Liquidated Claim Notice”) within
60 days after the matter giving rise to the claim becomes finally resolved, and
the Second Claim Notice shall specify the amount of the claim.  Each Indemnitor to which a Claim Notice is
given shall respond to any Indemnified Party that has given a Claim Notice (a “Claim
Response”) within 30 days (the “Response Period”) after the later of
(i) the date that the Claim Notice is given or (ii) if a Claim Notice
is first given with respect to an Unliquidated Claim, the date on which the
Liquidated Claim Notice is given.  Any
Claim Response shall specify whether or not the Indemnitor giving the Claim
Response disputes the claim described in the Claim Notice.  If any Indemnitor fails to give a Claim
Response within the Response Period, such Indemnitor shall be deemed not to
dispute the claim described in the related Claim Notice.  If any Indemnitor elects not to dispute a
claim described in a Claim Notice, whether by failing to give a timely Claim
Response in accordance with the terms hereof or otherwise, then the amount of
such claim shall be conclusively deemed to be an obligation of such Indemnitor.

 

(b)           If any Indemnitor shall be
obligated to indemnify an Indemnified Party pursuant to this Article 11,
such Indemnitor shall pay to such Indemnified Party the amount to which such
Indemnified Party shall be entitled within 15 Business Days after the day on
which such Indemnitor became so obligated to the Indemnified Party.  If any Indemnitor fails to pay all or part of
any indemnification obligation when due, then such Indemnitor shall also be
obligated to pay to the applicable Indemnified Party interest on the unpaid
amount for each day during which the obligation remains unpaid at an annual
rate equal to the Prime Rate plus 5%.

 

(c)           If, during the Response
Period, an Indemnified Party receives a Claim Response from the Indemnitor,
then for a period of 45 days (the “Resolution Period”) after the
Indemnified Party’s receipt of such Claim Response, the Indemnified Party and
the Indemnitor shall endeavor to resolve any dispute arising therefrom.  In the event that the parties fail to reach a
resolution during the Resolution Period, either party shall be entitled to file
an action with a court of competent jurisdiction.  If such dispute is resolved by the parties
during the Resolution Period, the amount that the parties have specified as the
amount to be paid by the Indemnitor, if any, as settlement for such dispute
shall be conclusively deemed to be an obligation of such Indemnitor.

 

(d)           Notwithstanding any other
provision of this Article 11, except as provided below in this
subsection (d), the Indemnified GPF Parties, on the one hand, and the
Indemnified CGL Parties, on the other hand, shall be entitled to
indemnification hereunder with respect to the breach of a representation or
warranty by CGL, on the one hand, or by any of the GPF Parties, on the other,
only when the aggregate of all Damages to such indemnified Parties from all
such breach of representations or warranties exceeds $150,000 (the “Deductible
Amount”) and then only to the extent of such excess amount.  The foregoing limitation with respect to the
Deductible Amount shall not apply, however, to (a) any breach of the
representations or warranties under Sections 4.1, 4.2, 4.3, 4.4, or 4.18,
or the first sentence of Section 4.6, in the case of
indemnification sought by an Indemnified CGL Party, or Sections 5.1, 5.2,
5.3, 5.4(a), or 5.17, or the first sentence of Section 5.6, in
the case of indemnification sought by an Indemnified GPF Party, and, in each
case, in the related provisions of the Closing Certificates, and (b) a
breach of any representations or warranties of a Party to this Agreement that
were made with an intent to mislead or defraud or with a reckless disregard of
the accuracy thereof (collectively, the “Excepted 

 

53

 

Warranties”).  In addition, in the case of the claim for
Damages that may be made based on a breach of a representation or warranty as
well as on any other item described in clauses (b) through (f) of Section 11.1
or in clauses (b) through (e) of Section 11.2, such
limitations regarding the Deductible Amount, and the Indemnification Cap shall
not apply to the extent that such claim is not based solely on an asserted
breach of a representation or warranty. Other than in the case of the Excepted
Warranties, the maximum limitation for claims arising out of or related to any
matters set forth in clause (a) of the first sentence of Sections 11.1
and 11.2 shall be $10.0 million (the “Indemnification Cap”).  In addition, the calculation of the
Deductible Amount and the Sub-Deductible Amount shall include any Damages
incurred by an Indemnified Party for which the Indemnified Party would have
been entitled to claim indemnification under this Article 11 with
respect to a breach of a representation or warranty but for such claim being
excluded as a result of the qualification of such representation or warranty by
materiality or Material Adverse Effect. 
If the Damages for breaches of a Party’s representations or warranties
incurred by the Indemnified GPF Parties, on the one hand, or the Indemnified
CGL Parties, on the other hand, exceed the Deductible Amount, then such
Indemnified GPF Parties, on the one hand, or the Indemnified CGL Parties, on
the other hand, may only make claims based upon breaches of representations or
warranties that, in each individual case, exceed $10,000 (the “Sub-Deductible
Amount”); provided that the foregoing limitation shall not apply to
Excepted Warranties.  No claim may be
made by an Indemnified Party for Damages arising with respect to breaches of Sections
4.9(c), (f) or (h), or by an Indemnified GPF Party for Damages arising
with respect to breaches of Sections 5.9(c), (f) or (h), unless
such Damages are related to claims or actions by a third-party.

 

11.4        Claims Period.  The representations and warranties of the
Parties shall survive the Closing.  Any
claim for indemnification under this Article 11 shall be made by
giving a Claim Notice under Section 11.3 on or before the
applicable date (each, an “Expiration Date”) specified below in this Section 11.4,
or the claim under this Article 11 shall be invalid.  The following claims shall have the following
respective Expiration Dates:

 

(a)           the 18-month anniversary of
the Closing Date for any claims that are not specified in any of the succeeding
subsections;

 

(b)           the later of the third
anniversary of the Closing Date or the date on which the applicable statute of
limitations expires for any Damages that result from, arise out of, or relate
to (i) any breach of any covenant or agreement contained herein, or (ii) any
breach of the Excepted Warranties;

 

(c)           the tenth anniversary of the
Closing Date that result from, arise out of, or relate to any of the items in
clause (c) of the first sentence of Sections 11.1 or 11.2; and

 

(d)           in perpetuity for any
Damages that result from, arise out of, or relate to any of the items in
clauses (d) and (e) of the first sentence of Sections 11.1 or 11.2.

 

If
more than one of such Expiration Dates applies to a particular claim, the
latest of such Expiration Dates shall be the controlling Expiration Date for
such claim.  So long as an Indemnified
Party gives a Claim Notice for an Unliquidated Claim on or before the
applicable Expiration Date, such Indemnified Party shall be entitled to pursue
its rights to indemnification regardless of the date on which such Indemnified
Party gives the related Liquidated Claim Notice.

 

11.5        Third Party Claims.  An Indemnified Party that desires to seek
indemnification under any part of this Article 11 with respect to
any actions, suits or other administrative or judicial proceedings (each, an “Action”)
that may be instituted by a third party shall give each Indemnitor prompt notice
of a third party’s institution of such Action. 
After such notice, any Indemnitor may, or if so requested by such
Indemnified Party, any Indemnitor shall, participate in such Action or assume
the defense thereof, with 

 

54

 

counsel satisfactory to such Indemnified Party; provided,
however, that such Indemnified Party shall have the right to participate
at its own expense in the defense of such Action; provided, further, that the
Indemnified Party shall not consent to the entry of any judgment or enter into
any settlement, except with the written consent of the Indemnitor (which
consent shall not be unreasonably withheld). 
Any failure to give prompt notice under this Section 11.5
shall not bar an Indemnified Party’s right to claim indemnification under this Article 11,
except to the extent that an Indemnitor shall have been harmed by such failure.

 

11.6        Effect of Investigation or
Knowledge.  Any claim
by a Party for indemnification shall not be adversely affected by any
investigation by or opportunity to investigate afforded to such Party, nor
shall such a claim be adversely affected by such Party’s knowledge on or before
the Closing Date of any breach of the type specified in the first sentence of Sections
11.1 or 11.2 or of any state of facts that may give rise to such a breach;
any such claim shall survive the Closing until the applicable Expiration
Date.  The waiver of any condition based
on the accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not adversely affect the right
to indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants or obligations.

 

11.7        Contingent Claims.  Nothing herein shall be deemed to prevent an
Indemnified Party from making a claim hereunder for potential or contingent
claims or demands (a “Contingent Claim”); provided that the Claim
Notice sets forth the specific basis for any such Contingent Claim to the
extent then feasible and the Indemnified Party has reasonable grounds to
believe in good faith that such a claim may be made.

 

11.8        Company Units in
Satisfaction of Indemnification Claims.  If any Indemnitor agrees that it is obligated
to indemnify an Indemnified Party pursuant to this Article 11, is
deemed to be obligated to indemnify an Indemnified Party pursuant to Section 11(a),
or is found by a court of competent jurisdiction to be obligated to indemnify
an Indemnified Party pursuant to this Article 11, and such Indemnitor
shall have failed to pay all or any portion of such indemnification obligation
within 60 days of the date on which such Indemnitor became so obligated to the
Indemnified Party, then the Indemnified Party may elect to have all or any
portion of such unpaid claim satisfied by:

 

(i)                   with respect to claims for
which the Company is the Indemnified Party, the cancellation of Company Units
of which the applicable Indemnitor is the record owner.

 

(ii)                  with respect to claims for
which the Indemnified Party is a Person other than the Company, the transfer of
Company Units of which the applicable Indemnitor is the record owner.

 

The
number of Company Units that shall be so cancelled or transferred, as
applicable, in satisfaction of such claims shall be equal to (x) the
amount of such claim for which the Indemnitor has elected to receive or have
cancelled, as applicable, Company Units of the Indemnitor, divided by (y) $153,714;
provided  that, to the extent Company Units of GPF are cancelled
or transferred pursuant to this Section 11.8, the number of Company
Units so cancelled or transferred shall not result in GPF owning less than 1
Company Unit.  Each Party hereby
authorizes the Company to effect cancellations and transfers, as applicable, of
Company Units of which such Party is the record owner in accordance with this Section 11.8
and to amend Exhibit A of the Company’s Operation Agreement to reflect
such cancellations or transfers.

 

11.9        Exclusive Remedy.  Except as set forth in Section 13.9
or as otherwise specifically set forth in this Agreement, the indemnification
rights under this Article 11 are the exclusive rights and 

 

55

 

remedies the Parties may have at law or otherwise
for any misrepresentation, breach of warranty or failure to fulfill any
agreement or covenant hereunder on the part of any Party.

 

12.          Termination.

 

12.1        Grounds for Termination.  The Parties may terminate this Agreement at
any time before the Closing as provided below:

 

(a)           by mutual written consent of
each of CGL and GPF;

 

(b)           by any Party, if the Closing
shall not have been consummated on or before the Termination Date; provided,
however, that the right to terminate this Agreement under this
subsection (b) shall not be available to any Party whose failure to
fulfill any obligation under this Agreement has been the cause of, or resulted
in, the failure of the Closing to occur on or before the Termination Date;

 

(c)           by any Party, if a
Governmental Body shall have issued a Court Order (which Court Order the
parties shall use commercially reasonable efforts to lift) that permanently
restrains, enjoins or otherwise prohibits the Transactions, and such Court
Order shall have become final and nonappealable;

 

(d)           by GPF, if CGL shall have
breached, or failed to comply with, any of its obligations under this Agreement
or any representation or warranty made by CGL shall have been incorrect when
made, and such breach, failure or misrepresentation is not cured within 20 days
after notice thereof, and in either case, any such breaches, failures or
misrepresentations, individually or in the aggregate, results or would
reasonably be expected to result in a Material Adverse Effect on CGL or its
Business; or

 

(e)           by CGL, if any GPF Party or
the Company shall have breached, or failed to comply with any of its
obligations under this Agreement or any representation or warranty made by it
shall have been incorrect when made, and such breach, failure or
misrepresentation is not cured within 20 days after notice thereof, and in
either case, any such breaches, failures or misrepresentations, individually or
in the aggregate, results or would reasonably be expected to result in a
Material Adverse Effect on any GPF Party or its Business.

 

12.2        Effect of Termination.  If this Agreement is terminated pursuant to Section 12.1,
the agreements contained in Sections 7.10, 7.11, 15 and 16  shall survive the termination hereof and any
Party may pursue any legal or equitable remedies that may be available if such
termination is based on a breach of another Party.

 

13.          General Matters.

 

13.1        Contents of Agreement.  This Agreement, together the other
Transaction Documents, sets forth the entire understanding of the Parties with
respect to the Transactions and supersedes all prior agreements or
understandings among the parties regarding those matters.

 

13.2        Amendment, Parties in
Interest, Assignment, Etc.  This Agreement may be amended, modified or
supplemented only by a written instrument duly executed by each of the Parties.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective heirs, legal representatives, successors and
permitted assigns of the Parties. 
Nothing in this Agreement shall confer any rights upon any Person other
than the Parties and their respective heirs, legal representatives, successors
and permitted assigns, except as provided in Article 11.  No Party shall assign this Agreement 

 

56

 

or any right, benefit or obligation hereunder.  Any term or provision of this Agreement may
be waived at any time by the Party entitled to the benefit thereof by a written
instrument duly executed by such Party.  Neither
the failure nor the delay by any Party in exercising any right, power or
privilege hereunder shall operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right, power or
privilege shall preclude any other or further exercise of any such right, power
or privilege or the exercise of any other right, power or privilege.  To the maximum extent permitted by applicable
Law, (a) no waiver that may be given by a Party shall be applicable except
in the specific instance for which it was given, and (b) no notice to or
demand on one Party shall be deemed to be a waiver of any obligation of such
Party or the right of the Party giving such notice or demand to take further
action without notice or demand as provided in this Agreement or the other
Transaction Documents.

 

13.3        Further Assurances.  At and after the Closing, the Parties shall
execute and deliver any and all documents and take any and all other actions
that may be deemed reasonably necessary by their respective counsel to complete
the Transactions.

 

13.4        Interpretation.  Unless the context of this Agreement clearly
requires otherwise, (a) references to the plural include the singular, the
singular the plural, the part the whole, (b) references to any gender
include all genders, (c) “including” has the inclusive meaning frequently
identified with the phrase “but not limited to,” and (d) references to “hereunder”
or “herein” relate to this Agreement. 
Any determination as to whether a situation is material shall be made by
taking into account the effect of all other provisions of this Agreement that
contain a qualification with respect to materiality so that the determination
is made after assessing the aggregate effect of all such situations.  The section and other headings contained in
this Agreement are for reference purposes only and shall not control or affect
the construction of this Agreement or the interpretation thereof in any
respect.  Section, subsection, Schedule
and Exhibit references are to this Agreement unless otherwise
specified.  Each accounting term used
herein that is not specifically defined herein shall have the meaning given to
it under GAAP.  Any reference to a Party’s
being satisfied with any particular item or to a Party’s determination of a
particular item presumes that such standard will not be achieved unless such
Party shall be satisfied or shall have made such determination in its sole or
complete discretion.

 

13.5        Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be binding as of the date first written
above, and, when delivered, all of which shall constitute one and the same
instrument.  This Agreement and any
documents delivered pursuant hereto, and any amendments hereto or thereto, to
the extent signed and delivered by means of a facsimile machine or as an
attachment to an electronic mail message in “pdf” or similar format, shall be
treated in all manner and respects as an original agreement or instrument and
shall be considered to have the same binding legal effect as if it were the
original signed version thereof delivered in person.  At the request of any party hereto or to any
such agreement or instrument, each other Party shall re-execute original forms
thereof and deliver them to all other Parties. 
No Party to any such agreement or instrument shall raise the use of a
facsimile machine or electronic mail attachment in “pdf” or similar format to
deliver a signature or the fact that any signature or agreement or instrument
was transmitted or communicated through the use of a facsimile machine or as an
attachment to an electronic mail message as a defense to the formation of a
contract and each such party forever waives any such defense.  A facsimile signature or electronically
scanned copy of a signature shall constitute and shall be deemed to be
sufficient evidence of a Party’s execution of this Agreement, without necessity
of further proof.  Each such copy shall
be deemed an original, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one such counterpart.

 

13.6        Disclosure Letters.  Any items listed or described on a Party’s
Disclosure Letter shall be listed or described under a caption that
specifically identifies the Section(s) of this Agreement to which the item
relates (which, in each case, shall constitute the only valid disclosure with
respect to such 

 

57

 

Section(s)); provided, that if it is readily
apparent from a reading of a disclosure that it is applicable to another
Section(s), it shall be deemed to qualify such Section(s).

 

13.7        Negotiated Agreement.  The Parties hereby acknowledge that the terms
and language of this Agreement were the result of negotiations among the
Parties and, as a result, there shall be no presumption that any ambiguities in
this Agreement shall be resolved against any particular Party.  Any controversy over construction of this
Agreement shall be decided without regard to events of authorship or
negotiation.

 

13.8        Severability.  If any term or other provision of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal
or incapable of being enforced under any applicable Law in any particular
respect or under any particular circumstances, then, so long as the economic or
legal substance of the Transactions is not affected in any manner materially
adverse to any Party, (a) such term or provision shall nevertheless remain
in full force and effect in all other respects and under all other
circumstances, and (b) all other terms, conditions and provisions of this
Agreement shall remain in full force and effect.  Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the Parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in an acceptable manner
so that the Transactions are fulfilled to the fullest extent possible.

 

13.9        Specific Performance.  Each of the Parties hereby acknowledges that
the other Parties may be damaged irreparably in the event any provision of this
Agreement or any other Transaction Document is not performed in accordance with
its specific terms or is otherwise breached. 
Accordingly, notwithstanding anything contained in this Agreement to the
contrary, each of the Parties hereby acknowledges that the other Parties may be
entitled to seek an injunction or injunctions to prevent breaches of the
provisions of this Agreement and any other Transaction Document and to seek to
enforce specifically this Agreement and any other Transaction Document and the
terms and provisions thereof in any action instituted in any court in the
United States or in any state having jurisdiction over the parties and the
matter in addition to any other equitable remedy to which a Party may be entitled
pursuant hereto, including specific performance, rescission or restitution.

 

14.          Notices.

 

All
notices that are required or permitted hereunder shall be in writing and shall
be sufficient if personally delivered or sent by registered or certified mail,
facsimile message or Federal Express or other nationally recognized overnight
delivery service.  Any notices shall be
deemed given upon the earlier of the date when received at, or the third day
after the date when sent by registered or certified mail or the day after the
date when sent by Federal Express or facsimile to, the address or facsimile
number set forth below, unless such address or facsimile number is changed by
notice to the other Parties:

 

	
  If
  to CGL:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Column
  Financial, Inc.

  	
   

  	
   

  
	
  11
  Madison Avenue

  	
   

  	
   

  
	
  New
  York, NY 10010-3624

  	
   

  	
   

  
	
  Attn:

  	
  Anand N. Gajjar

  	
   

  	
   

  
	
  FAX:

  	
  212.538.2200

  	
   

  	
   

  

 

58

 

	
  with
  a required copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Credit
  Suisse

  	
   

  	
   

  
	
  1
  Madison Avenue

  	
   

  	
   

  
	
  New
  York, NY 10010

  	
   

  	
   

  
	
  Attn:

  	
  Legal
  and Compliance Division

  	
   

  	
   

  
	
  Fax:

  	
  212.325.8282

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Ballard
  Spahr Andrews & Ingersoll, LLP

  	
   

  	
   

  
	
  601
  13th Street, NW

  	
   

  	
   

  
	
  Suite 1000
  South

  	
   

  	
   

  
	
  Washington,
  DC 20005-3807

  	
   

  	
   

  
	
  Attn:

  	
  Allan
  R. Winn, Esquire

  	
   

  	
   

  
	
  FAX:

  	
  202.626.9031

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If
  to any GPF Party or the Company:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Green
  Park Financial Limited Partnership

  	
   

  	
   

  
	
  7501
  Wisconsin Avenue, Suite 1200

  	
   

  	
   

  
	
  Bethesda,
  MD 20814-6531

  	
   

  	
   

  
	
  Attn:

  	
  Chief
  Financial Officer

  	
   

  	
   

  
	
  FAX:

  	
  301.634.2151

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  with
  a required copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Morgan,
  Lewis & Bockius LLP

  	
   

  	
   

  
	
  1701
  Market Street

  	
   

  	
   

  
	
  Philadelphia,
  PA 19103

  	
   

  	
   

  
	
  Attn:

  	
  Michael
  N. Peterson, Esquire

  	
   

  	
   

  
	
  FAX:

  	
  877.432.9652

  	
   

  	
   

  
					

 

15.          Governing Law.

 

This
Agreement shall be construed and interpreted in accordance with the internal
laws of the State of Delaware without regard to any choice of law or conflict of
law, choice of forum or provision, rule or principle that might otherwise
refer construction or interpretation of this Agreement to the substantive law
of another jurisdiction.  The Parties
hereby irrevocably (a) submit themselves to the non-exclusive jurisdiction
of the state and federal courts sitting in the State of Delaware, and (b) waive
the right and hereby agree not to assert by way of motion, as a defense or
otherwise in any action, suit or other legal proceeding brought in any such
court, any claim that it, he or she is not subject to the jurisdiction of such
court, that such action, suit or proceeding is brought in an inconvenient forum
or that the venue of such action, suit or proceeding is improper.  EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF.

 

16.          Break-up Fee.  CFI shall reimburse the GPF Parties’ actual
costs and expenses incurred after December 1, 2008 as a break-up fee in
the event the Closing does not occur on or before January 30, 2009,
provided that, the breach or failure of the GPF Parties to comply with their
obligations under this Agreement is not the sole cause for the failure of such
closing to occur.  CFI shall reimburse
the GPF 

 

59

 

Parties for such costs and expenses within five business
days of receiving documentation thereof from the GPF Parties.

 

{Signature Pages to Follow}

 

60

 

IN
WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of
the day and year first written above.

 

 

	
   

  	
  GREEN
  PARK FINANCIAL LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Walker
  & Dunlop GP, LLC, its Managing

  
	
   

  	
   

  	
  General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William M. Walker

  
	
   

  	
  Name:

  	
  William
  M. Walker

  
	
   

  	
  Title:

  	
  Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WALKER
  & DUNLOP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William M. Walker

  
	
   

  	
  Name:

  	
  William
  M. Walker

  
	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COLUMN
  GUARANTEED LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Anand N. Gajjar

  
	
   

  	
  Name:

  	
  Anand
  N. Gajjar

  
	
   

  	
  Title:

  	
  Authorized
  Person

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WALKER
  & DUNLOP, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William M. Walker

  
	
   

  	
  Name:

  	
  William
  M. Walker

  
	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  

 

{Signature Page to Formation Agreement}Exhibit 10.7

 

	
  Walker,
  W.

  	
  2008

  

 

INCENTIVE DEFERRED BONUS COMPENSATION AGREEMENT

 

THIS
AGREEMENT (“Agreement”), made as of the 16th day of June,
2008, by and between Walker & Dunlop GP, LLC (“Employer”) and William
M. Walker (“Employee”).

 

WITNESSETH
THAT:

 

WHEREAS,
Employer has a substantial investment and ownership interest in Green Park
Financial Limited Partnership (“Green Park”) which acts as an approved Fannie
Mae multifamily lender under the DUS program; and

 

WHEREAS,
Employee is serving as Employer’s President and CEO and, in that capacity has
senior management responsibility for Green Park’s operations and an important
role in Green Park’s success; and

 

WHEREAS,
in order to maximize the returns it derives from its substantial investment and
ownership in Green Park, Employer desires to provide Employee with an incentive
to contribute to the growth of the business and profitability of Green Park
and, to that end, the parties desire to enter into this Agreement.

 

NOW,
THEREFORE, in consideration of the foregoing and of the mutual promises
hereinafter set forth and of other good and valuable consideration, the
sufficiency and receipt of which prior to the execution of these presents is
hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:

 

1

 

ARTICLE I

 

Definitions

 

Section 1.1
Definitions.

 

When
used in this Agreement, the following terms will have the meanings set forth
below:

 

(A)          “Base Fiscal Year” means the Fiscal
Year to which a Deferred Bonus relates (e.g., Fiscal Year 2008 shall be the
Base Fiscal Year for any Deferred Bonus potentially payable to Employee for
Fiscal Year 2008).

 

(B)            “Beneficiary” means
one or more individuals designated by Employee to receive benefits payable
hereunder upon Employee’s death (whether voluntary or involuntary). Employee
shall designate his Beneficiary in writing on a form provided by Employer.
Employee may change his designated Beneficiary by filing a new form with
Employer (at least ten (10) business days prior to the effective date of
such change). If no Beneficiary designated by Employee survives Employee, or if
Employee fails to designate a Beneficiary, any payments due hereunder upon
Employee’s death shall be paid to Employee’s executor or other legal
representative.

 

(C)          “Change in Control”
shall mean the occurrence of any one or more of the following without Employee’s
prior consent (which consent can be conditioned or withheld, with or without
cause, in Employee’s sole discretion): (i) the sale or other disposition
of all, or substantially all, of the assets of Green Park or Employer; or (ii) the
sale or other transfer within any period of twelve (12) consecutive calendar
months (either in one transaction or in a series of transactions within such
twelve (12) month period) of partnership interests (or stock or other forms of
ownership interests, as the case may be) representing 

 

2

 

more than fifty percent (50%) of all partnership
interests (or all stock or all other forms of ownership interests) in either
Green Park or Employer; but not if stock is transferred to a family trust or
other entity designed principally to facilitate estate planning.

 

(D)          “Deferred Bonus”
means the amount of the deferred bonus potentially payable to Employee on
account of a particular Base Fiscal Year in accordance with the provisions
hereof.

 

(E)           (i)            “Deferred Bonus Earn-Out Period”
means, with respect to each Deferred Bonus for each Base Fiscal Year, the
period beginning on the first day of the Base Fiscal Year and terminating on
various dates as determined in accordance with the following provisions:

 

(a)           If Employee remains
continuously in Employer’s employ for a period of three (3) years commencing
with the first day of a Base Fiscal Year, or if Employee’s employment with
Employer terminates as a result of Employee’s Intentional Death or Disability
occurring within a three (3) year period commencing on the first day of a
Base Fiscal Year, the last day of the Deferred Bonus Earn-Out Period applicable
to that Base Fiscal Year shall be the last day of the three (3) year
period commencing with the first day of the Base Fiscal Year;

 

(b)          If
Employee’s employment with Employer terminates as a result of Employee’s
Unintentional Death or Disability occurring within a three (3) year period
commencing on the first day of a Base Fiscal Year, the last day of the Deferred
Bonus Earn-Out Period applicable to that Base Fiscal Year shall be the date on
which Employee’s Unintentional Death or Disability occurs;

 

(c)          If
Employee’s employment with Employer terminates as a result of a Termination
Without Cause occurring within a three (3) year period commencing on the
first day of a Base Fiscal Year, the last day of the Deferred Bonus Earn-

 

3

 

Out Period applicable to that Base Fiscal
Year shall be the date on which the Termination Without Cause occurs;

 

(d)          If
Employee’s employment with Employer terminates as a result of a Change in
Control occurring within a three (3) year period commencing on the first
day of a Base Fiscal Year, the last day of the Deferred Bonus Earn-Out Period
applicable to that Base Fiscal Year shall be the date on which the Change in
Control occurs; and

 

(e)          If
a Deferred Bonus Earn-Out Period terminates upon the occurrence of an event
(such as, by way of example, a Termination Without Cause of Employee’s
employment), that termination (and all consequences associated therewith under
the provisions hereof) shall not be affected by the subsequent occurrence of
another event (such as, by way of example, a Change in Control) which, but for
the prior occurrence of the first event, also would have resulted in a
termination of that Deferred Bonus Earn-Out Period.

 

(ii)             As hereinafter
appears, Employee shall not be entitled to receive a Deferred Bonus, and there
shall be no Deferred Bonus Earn-Out Period, for any particular Base Fiscal Year
if Employee’s employment with Employer terminates as a result of either a
Voluntary Resignation or a Termination With Cause which occurs within a three (3) year
period commencing on the first day of that Base Fiscal Year.

 

(F)             “Disability” means
disability as a result of an accident, illness or mental disorder which results
in Employee’s unwillingness or inability, for a period of ninety (90) days (in
the aggregate) during any period of twelve (12) consecutive months,
substantially to perform the duties assigned to Employee by Employer
immediately prior to the commencement of the Disability. For all purposes
hereof:

 

4

 

(i)            Employee’s
Disability shall be deemed to have occurred as of the last day of the foregoing
period of ninety (90) days;

 

(ii)           If Employer and
Employee disagree as to whether a Disability has occurred or as to when a
period of Disability has begun or ended, and if the disagreement cannot be
resolved within fifteen (15) business days after it has first arisen, Employer
and Employee shall each, within fifteen (15) business days after the expiration
of the first period of fifteen (15) business days, appoint a qualified
physician or other medical professional (hereinafter in this Section 1.1(F)(ii) collectively
a “Doctor”) (and if either Employer or Employee fails timely to make such an
appointment, the Doctor appointed by or for the other party shall resolve all
disagreements regarding Disability). The two Doctors (or, if applicable, the
one Doctor) shall, as promptly as possible, make a written determination as to all
disagreements with respect to the Employee’s Disability; provided, however,
that if two Doctors are timely appointed and cannot agree on all matters
respecting Employee’s Disability within a period of thirty (30) days after the
second of them has been timely appointed, the two of them shall, as promptly as
possible thereafter, appoint a third Doctor and all disagreements as to
Employee’s Disability shall be determined in writing by a majority of the three
Doctors. All good faith decisions made by one or more Doctors regarding
Employee’s Disability shall be conclusive and binding on Employer and Employee.
If such decisions are made by a single Doctor, all fees and expenses of such
Doctor shall be borne equally by Employer and Employee. Otherwise, Employer and
Employee shall each pay the fees and expenses of any Doctor appointed by or for
it or him and shall, if applicable, bear equally the fees and expenses of any
third Doctor.

 

(G)          “Employee” means
Donna Mighty and, where appropriate, shall also be deemed to mean his executor,
guardian or other legal representative.

 

5

 

(H)            “Employer” means Walker &
Dunlop GP, LLC and any successor to, or assignee of, Walker & Dunlop
GP, LLC to which Employee has consented, in Employee’s sole discretion.

 

(I)            “Fiscal Year” means
a fiscal year of Green Park (presently a calendar

 

year).

 

(J)            “Intentional Death
or Disability” means the death or Disability of Employee which results from an
injury or illness that is intentionally self-inflicted by Employee or
intentionally inflicted upon Employee by a third Person acting, or failing to
act, under the control, or at the direction, of Employee.

 

(K)          “Person” means, as the context
requires, an individual, partnership, corporation, trust, unincorporated
association, joint stock company, or other legal entity or association.

 

(L)           “Schedules” means,
collectively, the Schedules attached, or to be attached, hereto.

 

(M)         “Termination With Cause” means the
termination by Employer of Employee’s employment with Employer on account of (i) his
conviction for the commission of a felony in the course of his employment with
Employer, or (ii) his gross, willful and intentional misconduct in
connection with his employment with Employer which causes a material decrease
in the net profits of Green Park for the Fiscal Year within which such
misconduct occurs.

 

(N)          “Termination Without Cause” means the
termination by Employer of Employee’s employment with Employer without Employee’s
consent for any reason which does not constitute Termination With Cause.

 

6

 

(0)           “Unintentional Death
or Disability” means the death or disability of Employee which results from any
reason which does not constitute Employee’s Intentional Death or Disability.

 

(P)           “Voluntary Resignation” means the
voluntary decision or election by Employee to terminate his employment with
Employer for any reason whatsoever other than a material breach by Employer of
this Agreement which is not cured within any applicable grace period specified
herein.

 

Section 1.2 Certain Other Definitions.

 

When
used herein with its initial letter(s) capitalized, a term which is not
defined in Section 1.1 shall be given the definition assigned to it
elsewhere in this Agreement.

 

Section 1.3 Schedules and Exhibits.

 

Attached
hereto and forming an integral part of this Agreement are various Schedules and
Exhibits, all of which are incorporated into this Agreement as fully as if the
contents thereof were set out in full herein at each point of reference
thereto. The provisions of the immediately preceding sentence shall also apply
to any Schedules, Exhibits or other attachments which, pursuant to the
provisions hereof, are to be prepared and attached hereto in the future. Notwithstanding
any other provision hereof, if there is any conflict or inconsistency between
the provisions contained in this Agreement and the provisions contained in any
Schedule or Exhibit attached hereto (either now or in the future), the
provisions of the Schedule or Exhibit shall govern and prevail.

 

7

 

ARTICLE II

 

Determination Of Deferred Bonus

 

Section 2.1
In General.

 

(A)          (i)            As
a general matter (unless otherwise agreed by Employer and Employee), Employee’s
Deferred Bonus for each Base Fiscal Year commencing after the date hereof shall
depend on two factors, namely, the achievement of a base financial target (the “Base
Financial Target”) during each such Base Fiscal Year and the achievement of an
annualized financial target (the “Annualized Financial Target”) during the
Deferred Bonus Earn-Out Period applicable to such Base Fiscal Year. Commencing
sixty (60) days prior to the commencement of each Base Fiscal Year commencing
after the date hereof, Employer and Employee shall negotiate in good faith
regarding the Base Financial Target for such Base Fiscal Year as well as the
Annualized Financial Target for the Deferred Bonus Earn-Out Period (the
foregoing Base Financial Target and Annualized Financial Target being
hereinafter collectively referred to as “Targets”). If Employer and Employee
agree upon the Targets for a Base Fiscal Year commencing after the date hereof,
the Targets for that Base Fiscal Year shall be incorporated in a Schedule which
shall be attached hereto and shall become a part hereof. If, despite good faith
negotiations, Employer and Employee are unable to agree on the Targets for a
Base Fiscal Year commencing after the date hereof prior to the first day of
such Base Fiscal Year, the last set of Targets agreed upon (as set out in the
last Schedule attached hereto) shall be deemed to be the Targets for that Base
Fiscal Year; provided, however, that the foregoing provisions of this sentence
shall not be deemed or construed to preclude Employer and Employee from
continuing to negotiate (or to agree) regarding the Targets for a particular
Base Fiscal Year after the commencement of such Base Fiscal Year if the parties
agree to such continued negotiations (or agreement).

 

8

 

(ii)           Notwithstanding the
provisions of Section 2.1(A)(i):

 

(a)           If Employee’s
employment with Employer terminates (for any reason other than a Voluntary
Resignation or a Termination With Cause) during (and not after) a particular Base
Fiscal Year, the Base Fiscal Target for that Base Fiscal Year shall be
pro-rated by multiplying such Target by a fraction, the numerator of which
shall be the number of months (rounded to the nearest whole number) Employee
was employed by Employer during such Base Fiscal Year and the denominator of
which shall be twelve (12). The pro-rated Base Fiscal Target shall then be
compared with Employer’s actual financial performance (or with the other
relevant actual financial data) during the portion of the Base Fiscal Year that
Employee was employed by Employer in determining whether the pro-rated Base
Financial Target was met during such portion of such Base Fiscal Year. In such
event, if the pro-rated amount of the Base Financial Target does not exceed
Employer’s actual financial performance (or the other relevant actual financial
data) during the period of Employee’s employment during the Base Fiscal Year,
Employee shall not be entitled to a Deferred Bonus for such Base Fiscal Year.
If the pro-rated amount of the Base Financial Target does exceed Employer’s
actual financial performance (or the other relevant actual financial data)
during such period, Employee’s Deferred Bonus shall (subject to all vesting and
other applicable provisions hereof) be based on the amount of such excess and
shall not be adjusted as a result of Employer’s actual financial performance
(or the other relevant actual financial data) during the remainder of such Base
Fiscal Year. In the circumstances described in the first sentence of this Section 2.1(A)(ii),
the period within which Employer shall determine whether the Base Financial
Target has been met (as provided in Section 2.1(B) hereof) shall
commence as of the date of the termination of Employee’s employment and the
other provisions of this Agreement shall otherwise continue to apply. Without
in any way limiting the generality of the foregoing, the termination of
Employee’s employment as a

 

9

 

result of Intentional Death or Disability during
the Base Fiscal Year shall not accelerate or otherwise modify the Deferred
Bonus Earn-Out Period applicable to such Base Fiscal Year. Where necessary or
appropriate, references in this Agreement to the Base Financial Target shall be
deemed to be references to the pro-rated Base Financial Target provided for in
this Section 2.1(A)(ii)(a); and

 

(b)           If the last day of a
Deferred Bonus Earn-Out Period occurs during, rather than after, the Base
Fiscal Year (if, for example, Employee is the subject of a Termination Without
Cause during the Base Fiscal Year), any Annualized Financial Target for the
Deferred Bonus Earn-Out Period for such Base Fiscal Year will be pro-rated by
multiplying such Target by a fraction, the numerator of which shall be the
number of months (rounded to the nearest whole number) Employee was employed by
Employer during such Base Fiscal Year and the denominator of which shall be
twelve (12). The pro-rated Annualized Fiscal Target shall then be compared with
Employer’s actual financial performance (or with the other relevant actual
financial data) during the portion of the Base Fiscal Year that Employee was
employed by Employer in determining whether the pro-rated Annualized Financial
Target was met. Where necessary or appropriate, references in this Agreement to
the Annualized Financial Target shall be deemed to be references to the
pro-rated Annualized Financial Target provided for in this Section 2.1(A)(ii)(b).

 

(B)            As soon as may be
practicable, and in any event within sixty (60) days, after the expiration of
each Base Fiscal Year, Employer shall determine whether the Base Financial
Target was met during such Base Fiscal Year and, if so, the amount of the
Deferred Bonus that Employee may receive with respect to such Base Fiscal Year
(provided that any applicable Annualized Financial Target, as well as all other
applicable vesting requirements, are met during the Deferred Bonus Earn-Out
Period applicable to such Base Fiscal Year). Employer shall promptly advise
Employee as to whether the Base Financial Target has been 

 

10

 

met during the Base Fiscal Year in question
and, if so, the amount of the Deferred Bonus for that Base Fiscal Year as
computed by Employer. Employee shall be entitled to review all financial and
other records relevant to Employer’s determinations with respect to the
achievement of the Base Financial Target, the amount of Employee’s Deferred
Bonus, if any, and all related computations. Employer shall give careful and
good faith consideration to any bona fide questions raised by Employee
regarding Employer’s foregoing determinations and shall make any adjustments
therein as Employer deems necessary or appropriate in the light of such
questions. Employer’s good faith determination as to the amount of Employee’s
Deferred Bonus (either as originally computed or as adjusted) shall, however,
be binding and conclusive on Employer and Employee unless the amount in
question or controversy as to the size of the Deferred Bonus exceeds $25,000
(in which event such question or controversy shall be referred to, and
determined by, arbitration in accordance with Section 4.3 hereof). Once
the final amount of Employee’s Deferred Bonus for any Base Fiscal Year has been
computed, agreed or determined, such amount shall be memorialized in an
addendum which shall also be attached hereto and shall be deemed a part hereof
and such amount shall not then thereafter change.

 

(C)          Notwithstanding the foregoing provisions of Sections 2.1 (A) and
(B), it is acknowledged and agreed that Green Park has agreed to pay, or
reimburse, Employer for any Deferred Bonus Employer pays to Employee pursuant
to this Agreement and that this Agreement is premised on the assumption that
this payment or reimbursement arrangement shall continue as between Green Park
and Employer. If Green Park should refuse to pay or reimburse Employer for any
Deferred Bonus attributable to a Base Fiscal Year that is to commence after the
date of such refusal by Green Park, Employer shall have the right, in its sole
discretion, not to pay Employee any Deferred Bonus for that Base Fiscal Year or
to agree upon Targets for that Base Fiscal Year. The provisions of the
immediately preceding

 

11

 

sentence shall not, however, apply to the
current Fiscal Year (Fiscal Year 2008) or to any subsequent Base Fiscal Year
that commences prior to the date, if any, on which Green Park refuses to pay or
reimburse Employer for Employee’s Deferred Bonus (it being expressly
acknowledged and agreed that, as between Employer and Employee, Employer shall
assume the risk of any breach by Green Park of any agreement to reimburse or
pay Employer for Employee’s Deferred Bonus as well as the risk that Green Park
shall refuse to pay or reimburse Employer for Employee’s Deferred Bonus for a
particular Base Fiscal Year after the commencement of that Base Fiscal Year).
Employer further agrees with Employee that Employer shall not, in its capacity
as a partner in Green Park, vote in favor of, or otherwise approve, any action
by Green Park to modify, terminate or cancel Green Park’s agreement to pay or
reimburse Employer for Employee’s Deferred Bonus for any subsequent Base Fiscal
Year.

 

Section 2.2
Fiscal Year 2008.

 

Employer and Employee have agreed upon the Targets for the computation
of Employee’s Deferred Bonus for Fiscal Year 2008 (which Targets are set out in
Schedule 1-2008 which is attached hereto and hereby made a part hereof).

 

12

 

ARTICLE III

 

Vesting,
Payment and Nonvesting of Deferred Bonus

 

Section 3.1
Vesting of Deferred Bonus.

 

Except as otherwise provided in Section 3.3, Employee’s Deferred
Bonus for any particular Base Fiscal Year shall become vested (i.e., shall be
deemed fully earned, and not subject to lapse), and shall be payable to or for
an Employee in accordance with Section 3.2 in accordance with the
following provisions:

 

(A)          If the last day of the Deferred Bonus
Earn-Out Period for a Deferred Bonus for a particular Base Fiscal Year is the
last day of the three (3) year period commencing with the first day of
that Base Fiscal Year (under the circumstances specified in Section 1.1(E)(i)(a)),
and if Green Park meets the Annualized Financial Target during that Deferred
Bonus Earn-Out Period, then the Deferred Bonus for that Base Fiscal Year shall
be deemed fully earned and vested as of the date on which the Deferred Bonus
Earn-Out Period terminates;

 

(B)          If the last day of the Deferred Bonus
Earn-Out Period for a Deferred Bonus for a particular Base Fiscal Year is the
day on which Employee’s Unintentional Death or Disability occurs (under the
circumstances specified in Section 1.1(E)(i)(b)), and if Green Park meets
at least Sixty-Five Percent (65%) of the Annualized Financial Target during
that Deferred Bonus Earn-Out Period, then the Deferred Bonus for that Base
Fiscal Year shall be deemed fully earned and vested as of the date on which the
Deferred Bonus Earn-Out Period terminates;

 

(C)          If the last day of the Deferred Bonus
Earn-Out Period for a Deferred Bonus for a particular Base Fiscal Year is the
date on which a Termination Without Cause of Employee’s employment occurs
(under the circumstances specified in Section 1.1(E)(i)(c)), 

 

13

 

and if Green Park meets at least Seventy-Five
Percent (75%) of the Annualized Financial Target during such Deferred Bonus
Earn-Out Period, then the Deferred Bonus for that Base Fiscal Year shall be
deemed fully earned and vested as of the date on which the Deferred Bonus
Earn-Out Period terminates; and

 

(D)          If the last day of the Deferred Bonus
Earn-Out Period for a Deferred Bonus for a particular Base Fiscal Year is the
date on which a Change in Control occurs (under the circumstances specified in Section 1.1(E)(i)(d)),
then, whether or not Green Park meets the Annualized Financial Target, or any
portion thereof, during such Deferred Bonus Earn-Out Period, the Deferred Bonus
for that Base Fiscal Year shall be deemed fully earned and vested as of the
date on which the Deferred Bonus Earn-Out Period terminates.

 

Section 3.2 Payment of Vested Deferred Bonus.

 

(A)          Employer shall pay Employee (or, if
applicable, his Beneficiary) the amount of any Deferred Bonus which vests
pursuant to the provisions of Section 3.1 in accordance with the following
provisions:

 

(i)             If Employee’s
rights to a Deferred Bonus for a Base Fiscal Year vest pursuant to Section 3.1(A),
Section 3.1(B) or Section 3.1(C), that Deferred Bonus shall,
subject to the provisions of Sections 3.2(B) and 3.2(C), be paid to
Employee (or, if applicable, his Beneficiary) within sixty (60) days after the
last day of the taxable year in which Employee’s rights to that Deferred Bonus
vest; and

 

(ii)            If Employee’s
rights to a Deferred Bonus for a Base Fiscal Year vest pursuant to Section 3.1(D),
that Deferred Bonus shall be paid to Employee within sixty (60) days after the
date on which Employee’s rights to that Deferred Bonus vest.

 

(B)           (i)            Notwithstanding the provisions of Section 3.2(A)(i),
when the vesting of Employee’s rights to a Deferred Bonus (pursuant to Section 3.1(A),
Section 3.1(B) or 

 

14

 

Section 3.1(C)) depends upon the meeting
by Green Park of all, or a specified percentage, of an Annualized Financial
Target, the payment period of sixty (60) days specified in Section 3.2(A)(i) shall
be extended if, and to the extent, necessary in order for a determination to be
made (in accordance with the provisions of Section 3.2(C)) as to whether
all, or the specified percentage, of the Annualized Financial Target has been
met; provided that payment shall be made no later than 2-1/2 months after the
last day of the taxable year in which Employee’s rights to the Deferred Bonus
vest. An extension of the period within which a vested Deferred Bonus shall be
paid shall not extend or defer the date as of which such Deferred Bonus shall
be deemed to have vested.

 

(ii)             If the last day
of a Deferred Bonus Earn-Out Period falls on a day that is other than the last
day of a fiscal quarter, Employer may, solely for the purpose of determining
whether the relevant Annualized Financial Target has, or has not, been met
during that Deferred Bonus Earn-Out Period, assume that the relevant financial
reports or data for Green Park as of the end of the fiscal quarter that is
closest in time to the last day of that Deferred Bonus Earn-Out Period is the
same as the relevant financial reports or data for Green Park as of the actual
last day of that Deferred Bonus Earn-Out Period. To illustrate: assume that the
first day of the Deferred Bonus Earn-Out Period for the fiscal Year in question
is January 1 and that, because of a Change in Control, the last day of
that Deferred Bonus Earn-Out Period is May 25. For the sake of
convenience, Employer may use the relevant financial reports or data for Green
Park as of June 30 (the end of the fiscal quarter that is closest in time
to the actual last day of the Deferred Bonus Earn-Out Period in question) as
constituting the relevant financial reports or data for Green Park as of May 25
for the purpose of determining whether the Annualized Financial Target for that
Deferred Bonus Earn-Out Period has been met. Similarly, if the last day of a
Deferred Bonus Earn-Out 

 

15

 

Period is October 10, Employer may use
the relevant financial reports or data for Green Park as of September 30
for computation purposes as aforesaid.

 

(iii)          If the period for the payment of a
vested Deferred Bonus is extended pursuant to the preceding provisions of this Section 3.2(B),
Employer shall pay interest on the amount of the Deferred Bonus at an annual
rate equal to the Prime Rate plus 1% (or, if lower, at the highest percentage
rate allowed by law) during the period such Deferred Bonus is due and unpaid;
and provided further that if Employer shall fail timely to pay Employee (or his
Beneficiary) a vested Deferred Bonus once Employee’s entitlement thereto has
been determined, Employee (or his Beneficiary) shall be entitled to receive
interest on the amount of such Deferred Bonus at an annual rate equal to the
Prime Rate plus 5% (or, if lower, the highest percentage interest rate allowed
by law) during the period such Deferred Bonus is due and unpaid. (For all purposes
hereof “Prime Rate” means the prime rate of interest published (on the date
from which the Prime Rate is to accrue) by The
Wall Street Journal as the base rate for corporate loans posted by a
number (normally expressed as a percentage) of the largest banks in the United
States of America.)

 

(C)          Whenever the payment of a Deferred
Bonus is dependent upon the meeting by Green Park of all, or a specified
percentage, of an Annualized Financial Target during a Deferred Bonus Earn-Out
Period, Employer shall, as promptly as may be practicable after the date on
which the Deferred Bonus Earn-Out Period for such Deferred Bonus terminates and
Employer has received such financial reports or data relating to Green Park
which are needed in order to determine whether all, or the specified percentage
of the Annualized Financial Target has been met, make a written determination
as to whether all, or the specified percentage, of such Annualized Financial
Target has been met and shall provide Employee with a copy of such written
determination. Employee shall have the right to review all financial and other
records relevant to such determination. Employer shall give careful and 

 

16

 

good faith consideration to any bona fide
questions raised by Employee regarding Employer’s
determination and shall, if necessary or appropriate, adjust Employer’s
determination in light of such questions. Employer’s good faith determination
(either as initially made or as thereafter adjusted) as to whether Green Park
has met all, or the specified percentage, of the Annualized Financial Target
shall, however, be binding and conclusive upon Employer and Employee unless the
amount of the Deferred Bonus in question or controversy exceeds $25,000 (in which
event all questions or controversies as to whether or not the Deferred Bonus in
question has vested shall be referred to, and determined by, arbitration
pursuant to Section 4.3 hereof).

 

Section 3.3
Nonvesting of Deferred Bonus.

 

If
(A) Employee’s employment with Employer terminates as a result of a
Termination With Cause or a Voluntary Resignation at any time during the three (3) year
period commencing with the first day of a Base Fiscal Year, or if (B) the
Base Financial Target is not met during the Base Fiscal Year, or if (C) vesting
of a particular Deferred Bonus is dependent upon the meeting by Green Park of
all, or a specified percentage, of an Annualized Financial Target during the
Deferred Bonus Earn-Out Period applicable to such Deferred Bonus and Green Park
fails to meet such Annualized Financial Target (or the specified percentage
thereof), then, in each of such events, the Deferred Bonus for such Base Fiscal
Year shall not vest or become earned and all of Employee’s rights, title and
interest in or with respect to such Deferred Bonus shall lapse and be of no
further force and effect. The nonvesting of Employee’s rights as to a Deferred
Bonus for any particular Base Fiscal Year shall not prejudice or adversely
affect in any way Employee’s rights, if any, to receive (or retain) a Deferred
Bonus for another Base Fiscal Year.

 

17

 

ARTICLE IV

Other Provisions

 

Section 4.1
Funding; Tax Advances.

 

(A)          Within sixty (60)
days after the amount of a Deferred Bonus for a Base Fiscal Year has been
determined pursuant to Section 2.1(B) (and assuming that Employee’s
rights thereto have not previously lapsed or vested pursuant to any of the
provisions of Article III), Employer shall pay the amount of such Deferred
Bonus to the trustee of Employer’s Deferred Bonus Trust (the “Trust”), for the
account of Employer and Employee, as their respective interests may appear,
such payment to be held, administered and disbursed in accordance with the
terms of this Agreement and the Trust. Where appropriate, all references to “Employer”
in Section 3.2 hereof shall be deemed to be references to the “Trust.”

 

(B)          If Employee’s rights
to a Deferred Bonus for a Base Fiscal Year vest under circumstances in which
the amount of the Deferred Bonus is deemed to be taxable income to the Employee
for Federal, State or local income tax purposes and Employee is, or may be,
liable to pay taxes on such deemed income before the Deferred Bonus is paid to
Employee, the Trust shall make an advance to Employee in an amount sufficient
to permit Employee to pay the full amount
of all taxes on such deemed income before such taxes shall become due. Any such
advance shall not bear interest, may be repaid to the Trust, in whole or in
part, at any time and shall, in any event, be repaid to the Trust in full at the same time the Deferred Bonus
is paid to Employee.

 

Section 4.2 No Employment Agreement.

 

This
Agreement does not constitute an employment agreement between Employer and
Employee but instead is only intended to set out the respective rights and
obligations of 

 

18

 

the parties with respect to Deferred Bonuses
for Fiscal Year 2008 and subsequent Fiscal Years. Without in any way limiting
the generality of the foregoing, it is expressly acknowledged and agreed that
Employee does not have an employment agreement with Employer and that, unless
or until the parties otherwise agree, Employee is an at-will employee of
Employer; provided, however, that Employee’s status as an at-will employee
shall not prejudice or adversely affect any of Employer’s vested rights
hereunder upon any Termination of Employment.

 

Section 4.3
Arbitration.

 

(A)          Any disagreements
which, under the provisions of Sections 2.1(B) or 3.2(C) hereof, are
referable to arbitration, shall be referred to, and finally determined by,
arbitration pursuant to the applicable Rules of Commercial Arbitration (“Rules”)
of the American Arbitration Association (“AAA”), subject to the provisions of
this Section 4.3. Employer and Employee shall each attempt to resolve any
disagreement which is referable to arbitration pursuant to Sections 2.1(B) or
3.2(C) hereof by agreement and each party agrees to negotiate in good
faith for a period of at least fifteen (15) business days after any such
disagreement has arisen. If, despite such good faith negotiations, the parties
are unable to resolve any such disagreement by agreement, then either party
may, at any time after the expiration of the foregoing period of fifteen (15)
business days, demand arbitration of such disagreement.

 

(B)          If the amount in
controversy in the arbitrable disagreement is One Hundred Thousand Dollars
($100,000) or less, the arbitration shall be conducted before a single
arbitrator selected by Employer and Employee within thirty (30) days after
service of the initial demand for arbitration. If the amount in controversy
exceeds One Hundred 

 

19

 

Thousand Dollars ($100,000), the arbitration
shall be conducted before three (3) arbitrators, one of whom shall be
selected by Employer within thirty (30) days after service of the initial
demand for arbitration, one of whom shall be selected by Employee within the
foregoing thirty (30) day period and one of whom shall be selected by the two
arbitrators selected by the parties within thirty (30) days after the second of
such arbitrators is selected. Each arbitrator selected pursuant to this Section 4.3(B) shall
be independent of both Employer and Employee and shall have at least fifteen
(15) years experience in the subject matter of the disagreement to be
arbitrated. If any arbitrator is not timely selected within the periods
provided for in this Section 4.3(B), such arbitrator shall be appointed by
the AAA pursuant to the Rules. Any arbitration pursuant to this Section 4.3
shall be conducted in Bethesda, Maryland, or in such other location as may then
be agreed by the parties. A judgment upon the award rendered in any such
arbitration shall be final and binding upon the parties and may be entered in
any court of competent jurisdiction. All fees and expenses of the arbitrator(s) and
all administrative costs of the arbitration shall be borne equally by the
parties unless the arbitrator(s) otherwise direct(s). This agreement to
arbitrate shall be specifically enforceable.

 

Section 4.4
Governing Law.

 

This
Agreement and the rights and liabilities of the parties hereunder shall be
governed by, and construed in accordance with, the laws of the State of
Maryland without regard to such State’s principles of conflicts of law.

 

20

 

Section 4.5
No Third Party Beneficiary; Spendthrift Clause.

 

(A)          This Agreement is made solely and
specifically between and for the benefit of the parties hereto and (subject to Section 4.6)
their Beneficiaries, heirs, successors, assigns and legal representatives. No
other Person whatsoever shall have any rights, interests or claims hereunder or
be entitled to any benefits under or on account of this Agreement as a third
parry beneficiary or otherwise.

 

(B)            To the maximum extent permitted by
law, neither Employee nor any Beneficiary shall have any power to dispose of or
to charge by way of anticipation any vested, potential or other right, title or
interest hereunder, and any vested Deferred Bonus payable to Employee or any
Beneficiary shall be free and clear of his debts, contracts, dispositions, and
anticipations, and shall not be taken or reached by any legal or equitable
process.

 

Section 4.6
Benefit and Burden.

 

This
Agreement, and the respective rights and obligations of the parties hereunder,
may not be assigned, sold, hypothecated, or otherwise transferred, either
outright or as security, without the prior written consent of the other party
which may be delayed, withheld or conditioned in the sole and absolute
discretion of such other party; provided, however, that Employee may designate
a Beneficiary without Employer’s consent. Any transfer, or attempted transfer,
in violation of the provisions of this Section 4.6 shall be null and void ab initio. Subject to the foregoing
provisions of this Section 4.6, the provisions of this Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto, the
Employee’s Beneficiary and their respective heirs, successors, legal
representatives and permitted assigns.

 

21

 

Section 4.7
Computation of Time.

 

In
computing any notice or other period of time prescribed or allowed by any
provision of this Agreement, the day of the act, event, or default from which
the designated period of time begins to run shall not be included. The last day
of the period so computed shall be included, unless it is a Saturday, Sunday or
a legal holiday in Bethesda, Maryland, in which event the period runs until the
end of the next, day which is not a Saturday, Sunday or such legal holiday. All
notice or other periods expire as of 5:00 p.m. (local time in Bethesda,
Maryland; on. the last day of the notice or other period.

 

Section 4.8
Entire Agreement; Amendment.

 

(A)          This Agreement contains the entire
understanding between Employer and Employee regarding the subject matter hereof
and supersedes any prior or contemporaneous understandings or agreements
between them respecting such subject matter. There are no representations,
warranties, agreements, arrangements or understandings, oral, written or expressed
by, or based upon, conduct, between the parties relating to the subject matter
hereof which are not fully expressed herein.

 

(B)           This Agreement, including the
Schedules hereto, may not be amended, modified, waived, terminated or
discharged except by an instrument in writing which is duly executed by the
party sought to be charged with any such amendment, modification, waiver,
termination or discharge.

 

Section 4.9
Construction.

 

(A)          Common nouns and pronouns shall be
deemed to refer to the masculine, feminine, neuter, singular and plural, as the
context may require.

 

22

 

(B)           All headings herein
are inserted only for convenience and ease of reference and are not to be
considered in the construction or interpretation of this Agreement.

 

(C)           Numbered or lettered
Articles, sections, subsections, subparts and subparagraphs herein contained
refer to Articles, sections, subsections, subparts and subparagraphs of this
Agreement unless otherwise expressly stated. The words “herein,” “hereof,” “hereunder,”
“hereby,” “this Agreement” and other similar references shall be construed to
mean and include this Agreement and all amendments of, supplements to, and
Schedules and other attachments to this Agreement unless the context shall
clearly indicate or require otherwise.

 

(D)           Employer and
Employee have both participated extensively in the negotiation and drafting of
this Agreement. Accordingly, this Agreement shall not be interpreted or
construed for or against either party as the draftsman hereof.

 

Section 4.10
Notices.

 

Any
notices, demands, consents, requests or other communications (hereinafter
collectively referred to in this Section 4.10 as “notice”) provided for or
permitted to be given pursuant to this Agreement shall be in writing, and shall
be delivered by hand, by first-class mail, postage prepaid (with a return
receipt requested), or by Federal Express, or by some other commercial
overnight delivery service, to the parties at the following addresses:

 

	
  (i) If
  to Employer:

  	
  Walker &
  Dunlop GP, LLC

  
	
   

  	
  7501
  Wisconsin Avenue, Suite 1200

  
	
   

  	
  Bethesda,
  Maryland 20814-6531

  
	
   

  	
  Attn:
  Mr. William M. Walker

  

 

23

 

	
  (ii) If
  to Employee:

  	
  Mr. William
  M. Walker

  
	
   

  	
  2708
  36th Street, NW

  
	
   

  	
  Washington,
  DC 20007

  

 

 

Each
notice shall be deemed given on the day it is received or on the day its
delivery is refused by or for the addressee, whichever is earlier. Each party
may change its address or addressee for notice by giving notice thereof in the
manner provided above (such notice to be given at least five (5) business
days prior to its effective date).

 

IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first above written.

 

	
   

  	
  WALKER & DUNLOP GP, LLC

  
	
   

  	
   

  
	
   

  	
  (“Employer”)

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  June 16,
  2008

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mitchell M. Gaynor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mitchell
  M. Gaynor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Senior
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  William M. Walker (“Employee”)

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  June 16,
  2008

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William Walker

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  William
  M. Walker

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  President
  and CEO

  

 

24

 

SCHEDULE
1-2008

 

Formulae
for Computation of Deferred Bonus

 

1.            (A) The
following is a summary of key defined terms for 2008:

 

(i)                                     Employee:
William M. Walker

 

(ii)                                  Base Fiscal Year: January 1,
2008 - December 31, 2008

 

(iii)                               Financial target: The
attainment by Green Park of Adjusted Net Income of $15,144,697.00 (representing
the 2008 Budget adjusted upward by 80% of sub-servicing costs, and downward by
servicing advances)

 

(iv)                              Employee
Percentage: 6.5%.

 

(B)            Employee shall be
entitled to a Deferred Bonus in the amount equal to (i) the Employee
Percentage times (ii) the amount by which Green Park’s Adjusted Net Income
in the Base Fiscal Year exceeds the Base Financial Target, subject to all
applicable vesting provisions set forth in the foregoing and attached Incentive
Deferred Bonus Compensation Agreement (“Agreement”) of which this Schedule
1-2008 is a part. In no event shall the Deferred Bonus be less than zero.

 

2.              Green Park’s Adjusted
Net Income during any Base Fiscal Year or during any Deferred Bonus Earn-Out
Period applicable to such Base Fiscal Year (hereinafter referred to in this
Schedule 1-2008 as a “Period”) shall be determined as follows:

 

(A)            The starting point
for the determination of such Adjusted Net Income shall be Green Park’s net
income for the relevant Fiscal Year, or the relevant Period, as the case may
be, determined in accordance with generally accepted accounting principles (“Net
Income”) (such Net Income to be based on audited figures, if available, or to
become 

 

25

 

available in the ordinary course of business.
If there has not been, or is not to be in the ordinary course of business, an
independent audit to establish Green Park’s audited net income for a particular
Fiscal Year or Period, Green Park’s net income for such Fiscal Year or Period
shall be determined by Employer in accordance with generally accepted
accounting principles and all customary procedures normally utilized in
determining Green Park’s audited net income.)

 

(B)           Green Park’s Net
Income for Fiscal Year, or during a Period, shall be (i) increased by (a) any
reserves or provisions for future loan losses deducted in the computation of
such Net Income (except that any actual loan losses deducted in computing such
Net Income shall not be added back to such Net Income); and (b) any
recoveries or reimbursements received as a result of previously delinquent loan
(to the extent not already expensed or deducted in the computation of Net
Income); and (c) 80% of any subservicing fees paid to Walker &
Dunlop to service Green Park’s loans; and (ii) decreased by the amount of
net servicing and delinquency advances made as a result of delinquent loans (to
the extent not already expensed or deducted in the computation of Net Income.)

 

(C)           Green Park’s Net
Income during a Fiscal Year, as adjusted in accordance with the provisions of
Paragraph 2(B), shall be Green Park’s “Adjusted Net Income” for that Fiscal
Year for the purposes of this Schedule 1-2008.

 

(D)            Green Park’s Net Income during a
Period, as adjusted in accordance with the provisions of Paragraph 2(B), shall
be Green Park’s Net Income” for that Period for the purposes of this Schedule
1-2008.

 

(E)             Green Park’s
Adjusted Net Income during a Period shall be multiplied by a fraction, the
numerator of which shall be twelve (12) and the denominator of which shall be
the number of full calendar months in the Period, and the product of such
multiplication 

 

26

 

shall be Green Park’s “Average Adjusted Net
Income” for that Period for the purposes of this Schedule I-2008.

 

3.              The Annualized
Financial Target during the Period applicable to the Base Fiscal Year shall be
the attainment by Green Park of an Average Adjusted Net Income equal to, or
greater than the Base Financial Target.

 

4.              The operation of
the formulae set out in this Schedule 1-2008 may be illustrated by the
following examples: for these examples only, assume the following facts: (i) the
Base Fiscal Year is January 1, 2002-December 31, 2002; (ii) the
Base Financial Target is $10,000,000; and (iii) the Employee Percentage is
10%:

 

(A)            Assume that Employee remains in
Employer’s employ from January 1, 2002 until November 30, 2003, on
which date Employee has a Voluntary Resignation. Inasmuch as Employee’s
employment with Employer terminated due to a Voluntary Resignation prior to the
end of the Period applicable to the Base Fiscal Year, Employee is not entitled
to his Deferred Bonus for the Base Fiscal Year (even if Green Park achieves
both the Base Financial Target and the Annualized Financial Target.)

 

(B)           Assume that Employee remains in the
Employer’s employ throughout the Base Fiscal Year and that Green Park’s Adjusted
Net Income during the Base Fiscal Year is $11,000,000 (or $1,000,000 more than
the Base Financial Target of $10,000,000 for the Base Fiscal Year.) On these
assumptions, Employee’s Deferred Bonus for the Base Fiscal Year is $100,000
(10% [the Employee Percentage] time $1,000,000), subject to all applicable
vesting provisions set out in the Agreement.

 

(C)           Assume that Employee remains in
Employer’s employ from January 1, 2002 through June 30, 2003, on
which date Employee’s Intentional Death or Disability occurs. Further assume
that Green Park has Adjusted Net Income of $11,000,000 between January 1,
2002, and December 31, 2002, Adjusted Net Income of $10,500,000 between 

 

27

 

January 1, 2003, and December 31,
2003, and Adjusted Net Income of $10,000,000 between January 1, 2003, and December 31,
2004. On these assumptions:

 

(i)              Employee’s
Deferred Bonus for the Base Fiscal Year is $100,000 (see Paragraph 4(B) above.)

 

(ii)           Green Park’s
Average Adjusted Net Income during the Period is $10,500,000. This is
determined by multiplying $31,500,000 (Green Park’s Adjusted Net Income during
the relevant Period (which began on January 1, 2002, and ended on December 31,
2004) by a fraction, the numerator of which is twelve (12) and the denominator
of which is thirty-six (36) (the number of calendar months in the Period),
(i.e., $31,500,000 x 12/36 = $10,500,000). Since the Annualized Financial
target for the Period is the attainment by Green Park of an Average Adjusted Net
Income of $10,000,000 during the Period, and since, on the assumed facts, Green
Park’s actual Average Adjusted Net Income is $10,500,000 during the Period, the
Annualized Financial Target has been bet. Moreover, since the Base Financial
Target was exceeded during the Base Fiscal Year (i.e., Green Park had net
Annualized Income during the Base Fiscal Year in excess of $10,000,000) and
Employee’s employment with Employer did not terminate as a result of a
Voluntary Resignation or a Termination With Cause during the Period, Employee’s
rights to a Deferred Bonus Earn-Out Period ended.) Pursuant to Section 3.2(A)(i) of
the Agreement, the Deferred Bonus shall be due and payable to Employee’s legal
representative or Beneficiary within sixty (60) days after December 31,
2004 (unless the time for payment is extended pursuant to Sections 3.2(B) and
(C) of the Agreement in order to permit Employer to determine whether the
Annualized Financial Target was met during the applicable Period.)

 

(D)          Assume that Employee remains in
Employer’s employ from January 1, 2002, through June 30, 2003, on
which date Employee’s Unintentional Death or Disability occurs. Further assume
that Green Park has Adjusted Net Income of 

 

28

 

$11,000,000 between January 1, 2002 and December 31,
2002, and Adjusted Net Income of $2,500,000 between January 1, 2003, and June 30,
2003. On these assumptions:

 

(i)            Employee’s Deferred
Bonus for the Base Fiscal Year is $100,000 (see Paragraph 4(B) above.)

 

(ii)           Because Employee’s employment
terminated as a result of his/her Unintentional Death or Disability which
occurred on June 30,2003, the applicable Period for the Base Fiscal Year
began on January 1, 2002, and ended on June 30, 2003.

 

(iii)          Green Park’s Average Adjusted Net
Income during the applicable Period is $9,000,000. This is determined by
multiplying $13,500,000 (Green Park’s Adjusted Net Income during the Period)
times twelve (12) divided by eighteen (18) (the number of calendar months in
the Period), (i.e., $13,500,000 x 12/18 = $9,000,000). This Average Net Income
is less than the Annualized Financial Target (which is an Average Adjusted Net
Income of $10,000,000). However, since Employee’s employment terminated as a
result of his/her Unintentional Death or Disability, it is only necessary that
Green Park attain 65% of the Annualized Financial Target (or an Average
Adjusted Net Income of $6,500,000 ($10,000,000 x 65%) during the Period). Green
Park’s actual Average Adjusted Net Income during the Period ($9,000,000)
exceeds 65% of the Annualized Financial Target during the Period ($6,500,000)
and, therefore, on the assumed facts, the Annualized Financial Target has been
met.

 

(iv)          On the assumed facts, Employee’s
employment did not terminate as a result of a Voluntary Resignation or a
Termination With Cause occurring within the Period. As a result, on the assumed
facts, Employee’s rights to a Deferred Bonus for the Base Fiscal Year vested on
June 30, 2003 (the last day of the Period). Because the applicable Period
ended as a result of Employee’s Unintentional Death or Disability, Employee’s
Deferred Bonus for the Base Fiscal Year shall be due and payable to Employee’s 

 

29

 

legal representative or Beneficiary within
sixty (60) days after December 31, 2004 pursuant to Section 3.1(C) of
the Agreement (unless the time for payment is extended in order to permit
Employer to determine whether the Annualized Financial Target was met during
the Period).

 

(E)            Assume that
Employee remains in Employer’s employ from January 1, 2002, through December 31,
2004. Further assume that Green Park has Adjusted Net Income of $11,000,000
between January 1, 2002, and December 31, 2002, Adjusted Net Income
of $10,500,000 between January 1, 2003, and December 31, 2003, and
Adjusted Net Income of $10,000,000 between January 1, 2004, and December 31,
2004. On these assumptions:

 

(i)            Employee’s Deferred
Bonus for the Base Fiscal Year is $100,000 (see Paragraph 4(B) above.)

 

(ii)           Green Park’s
Average Adjusted Net Income during the Period is $10,500,000 (see Paragraph
4(C)(ii) above.) Since the Annualized Financial Target for the Period is
the attainment by Green Park of an Average Adjusted Net Income of $10,000,000
during the Period, and since, on the assumed facts, Green Park’s actual Average
Adjusted Net Income is $10,500,000 during the Period, the Annualized Financial
Target has been met. Pursuant to Section 3.2(A)(i) of the Agreement,
the Deferred Bonus shall be due and payable to Employee within sixty (60) days
after December 31, 2004 (unless the time for payment is extended pursuant
to Sections 3.2(B) and (C) of the Agreement in order to permit
Employer to determine whether the Annualized Financial Target was met during
the applicable Period).

 

5.             The foregoing examples under
Paragraph 4 of this Schedule 1-2008 assume that Employee remains in Green Park’s
employ throughout the first year of the Period (i.e., throughout the Base
Fiscal Year) and that Employee’s employment with Green Park is then terminated
at some point during the remainder of such Period. If Employee’s employment 

 

30

 

with Green Park is terminated during the
first year of such Period (or at any other time during such Period) as a result
of a Voluntary Termination or a Termination With Cause, then Employee is not
entitled to his Deferred Bonus for the Base Fiscal Year. If Employee’s
employment with Green Park is terminated during the first year of such Period
for any reason other than a Voluntary Termination or a Termination With Cause,
then the computations regarding the amount of Employee’s Deferred Bonus for the
Base Fiscal Year are first made as set out in Paragraphs 1 through 3 of this
Schedule 1-2008 as adjusted by the provisions of Section 2. 1 (A)(ii)(a) of
the Agreement. The foregoing may be illustrated by the following example:

 

(A)        Assume
that the Base Financial Target and the Employee Percentage are as set out in
Paragraph 4 above; that Employee remains in Employer’s employ from January 1,
2002 until June 25, 2002, on which date Employee’s Intentional Death or
Disability occurs. Further assume that Green Park has Adjusted Net Income of
$5,500,000 between January 1, 2002, and June 30, 2002; Adjusted Net
Income of $11,000,000 between January 1, 2002 and December 31, 2002;
Adjusted Net Income of $10,500,000 between January 1, 2003 and December 31,
2003; and Adjusted Net Income of $10,000,000 between January 1, 2004 and December 31,
2004. On these assumptions:

 

(i)            Green Park’s Base
Financial Target for the Base Fiscal Year is first pro-rated pursuant to Section 2.
1 (A)(ii)(a) of the Agreement by multiplying that Target ($10,000,000 of
Adjusted Net Income) by six (6) (the number of months, rounded to the
nearest whole number, that Employee was employed by Green Park during the Base
Fiscal Year) and then dividing by twelve (12). The result (or $5,000,000 of
Adjusted Net Income) is the pro-rated Base Financial Target for Employee’s
Deferred Bonus for the Base Fiscal Year.

 

(ii)            The pro-rated Base
Financial Target for the Base Fiscal Year (or $5,000,000 of Adjusted Net
Income) is then compared with Green Park’s actual Adjusted

 

31

 

Net Income between January 1, 2002 and June 30,
2002 (or $5,500,000). Since the adjusted Target was exceeded, the amount of
Employee’s potential Deferred Bonus for the first six months of the Base Fiscal
Year is 10% (the Employee Percentage) of the excess (or $500,000) of actual
Adjusted Net Income over the adjusted Base Financial Target amount during that
six-month period, or $50,000.

 

(iii)         Notwithstanding
Employee’s Intentional Death or Disability during the Base Fiscal Year, the
other vesting and payout provisions of the Agreement are not affected (see
Agreement, Section 2. 1 (A)(ii)(b)). Since Employee’s termination of
employment was caused by his/her Intentional Death or Disability, his Deferred
Bonus is only payable under these circumstances if Green Park meets its
Annualized Financial Target during the three year Period attributable to the
Base Fiscal Year (see Agreement, Sections 1. 1 (E)(i)(a), 2. 1 (A)(ii)(b)). On
the assumed facts, Green Park meets its Annualized Financial Target during the
latter Period and, accordingly, Employee’s Deferred Bonus of $50,000 for the
Base Fiscal Year is payable to Employee’s legal representative or Beneficiary
pursuant to the Agreement (see Paragraph 4(D)(iv) above).

 

(B)            Under the example given in Paragraph
5(A), Employee’s employment with Green Park terminated (for a reason other than
a Voluntary Resignation or a Termination With Cause) during the Base Fiscal
Year but the Period attributable to that Base Fiscal Year continued beyond the
end of the Base Fiscal Year. Under certain circumstances, however, Employee’s
employment may terminate during a Base Fiscal Year and the Period applicable to
such Base Fiscal Year will also terminate during that Base Fiscal Year. In this
event, Employee’s entitlement to his Deferred Bonus is determined in accordance
with Paragraphs 1 through 3 of this Schedule 1-2005, as adjusted by the
provisions of Section 2. 1 (A)(ii)(b) of the Agreement. The foregoing
may be illustrated by the following example:

 

32

 

(Percentage are as set out in Paragraph 4 above;
that Employee remains in Employer’s employ from January 1, 2002 until June 30,
2002, at which time a Termination Without Cause occurs; and that Green Park has
Adjusted Net Income in the amounts and for the periods set out in Paragraph 5(A) above.

 

(ii)            On these
assumptions, the adjusted Base Financial Target is met for the first six months
of the Base Fiscal Year and Employee’s potential Deferred Bonus for that period
is $50,000 (see Paragraph 5(A)(ii)).

 

(i) Assume
that the Base Financial Target and the Employee Percentage are as set out in
Paragraph 4 above; that Employee remains in Employer’s employ from January 1,
2002 until June 30, 2002, at which time a Termination Without Cause occurs;
and that Green Park has Adjusted Net Income in the amounts and for the periods
as set out in Paragraph 5(A) above.

 

(ii) On
these assumptions, the adjusted Base Financial Target is met for the first six
months of the Base Fiscal Year and Employee’s potential Deferred Bonus for that
period if $50,000 (see Paragraph 5(A)(ii)).

 

(iii) Because
Employee’s employment terminated as of June 30, 2002 as a result of a
Termination Without Cause, the Period attributed to the Base Fiscal Year also
terminated as of June 30, 2002 (see Agreement, Section 1.1(E)(i)(c)).
The Annualized Financial Target for the Base Fiscal Year must, therefore, be
pro-rated by multiplying that Target ($10,000,000 of Adjusted Net Income) times
six (6) (the number of months rounded, if necessary, to the nearest whole
number, that Employee was employed by Green Park during the Base Fiscal Year)
and then dividing by twelve (12) (see Agreement, Section 2. 1 (A)(ii)(b)).
The result (or $5,000,000 of Adjusted Net Income) is the pro-rated Annualized
Financial Target for the Period attributable to the Base Fiscal Year.

 

33

 

(iv)          The pro-rated Annualized Financial
Target for the Period attributable to the Base Fiscal Year (or $5,000,000 of
Adjusted Net Income) is then compared with Green Park’s actual Adjusted Net
Income during that Period (or $5,500,000). Since the adjusted Target was
exceeded, and since the Employee’s employment during the Period was not
terminated as a result of a Voluntary Retirement or a Termination With Cause,
Employee’s Deferred Bonus for the Base Fiscal Year vests of June 30, 2002,
and is payable to him in accordance with the terms of the Agreement.

 

6.
Unless otherwise defined in this Schedule 1-2008, all capitalized words and phrases
in this Schedule 1-2008 shall have the same meanings as are ascribed to them in
the Agreement.

 

APPROVED AND ACCEPTED:

 

 

	
  /s/ Mitchell M. Gaynor

  	
   

  	
  June 16, 2008

  
	
   

  	
   

  	
   

  
	
  Mitchell
  M. Gaynor

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  Senior
  Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ William Walker

  	
   

  	
  June 16,
  2008

  
	
   

  	
   

  	
   

  
	
  William
  M. Walker

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  President
  and CEO

  	
   

  	
   

  

 

34

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