Document:

Execution
      Version

     

     

     

     

     

     

    ASSET
      PURCHASE AGREEMENT

     

    AMONG

     

    NEW
      YORK
      MORTGAGE TRUST, INC.,

     

    THE
      NEW
      YORK MORTGAGE COMPANY, LLC

     

    AND
      

     

    INDYMAC
      BANK, F.S.B.

     

    

     

    Dated
      as
      of February 6, 2007

     

     

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              Article
                I

            	
              DEFINITIONS

            	
              1

            
	
              1.1

            	
              Certain
                Definitions

            	
              1

            
	
              1.2

            	
              Terms
                Defined Elsewhere in this Agreement

            	
              8

            
	
              1.3

            	
              Other
                Definitional and Interpretive Matters

            	
              10

            
	
              Article
                II

            	
              PURCHASE
                AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

            	
              11

            
	
              2.1

            	
              Purchase
                and Sale of Assets

            	
              11

            
	
              2.2

            	
              Excluded
                Assets

            	
              12

            
	
              2.3

            	
              Assumption
                of Liabilities

            	
              13

            
	
              2.4

            	
              Excluded
                Liabilities

            	
              13

            
	
              2.5

            	
              Conditional
                Purchase and Assumption

            	
              14

            
	
              2.6

            	
              Further
                Conveyances and Assumptions; Consent of Third Parties

            	
              15

            
	
              2.7

            	
              Bulk
                Sales Laws

            	
              15

            
	
              2.8

            	
              Purchase
                Price Allocation

            	
              16

            
	
              2.9

            	
              Right
                to Control Payment

            	
              16

            
	
              2.10

            	
              Proration
                of Certain Expenses

            	
              16

            
	
              2.11

            	
              Copies
                and Access to Documents

            	
              16

            
	
              Article
                III

            	
              CONSIDERATION

            	
              17

            
	
              3.1

            	
              Purchase
                Price

            	
              17

            
	
              3.2

            	
              Estimated
                Purchase Price

            	
              17

            
	
              3.3

            	
              Closing
                Payment

            	
              17

            
	
              3.4

            	
              Final
                Book Value and Final Pipeline Premium Calculation

            	
              17

            
	
              3.5

            	
              Escrow

            	
              19

            
	
              Article
                IV

            	
              CLOSING
                AND TERMINATION

            	
              20

            
	
              4.1

            	
              Closing
                Date

            	
              20

            
	
              4.2

            	
              Termination
                of Agreement

            	
              20

            
	
              4.3

            	
              Effect
                of Termination

            	
              21

            
	
              Article
                V

            	
              REPRESENTATIONS
                AND WARRANTIES OF SELLER AND PARENT

            	
              21

            
	
              5.1

            	
              Organization
                and Good Standing

            	
              21

            
	
              5.2

            	
              Authorization
                of Agreement

            	
              21

            
	
              5.3

            	
              Conflicts;
                Consents of Third Parties

            	
              22

            
	
              5.4

            	
              Financial
                Statements

            	
              22

            
	
              5.5

            	
              No
                Undisclosed Liabilities

            	
              23

            
	
              5.6

            	
              Title
                to Purchased Assets; Sufficiency

            	
              23

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              5.7

            	
              Absence
                of Certain Developments

            	
              23

            
	
              5.8

            	
              Taxes.

            	
              25

            
	
              5.9

            	
              Real
                Property

            	
              26

            
	
              5.10

            	
              Tangible
                Personal Property

            	
              27

            
	
              5.11

            	
              Intellectual
                Property

            	
              28

            
	
              5.12

            	
              Material
                Contracts.

            	
              30

            
	
              5.13

            	
              Employee
                Benefits

            	
              32

            
	
              5.14

            	
              Labor

            	
              33

            
	
              5.15

            	
              Litigation

            	
              33

            
	
              5.16

            	
              Compliance
                with Laws; Permits

            	
              34

            
	
              5.17

            	
              Environmental
                Matters

            	
              34

            
	
              5.18

            	
              Insurance

            	
              34

            
	
              5.19

            	
              Loan
                Originations

            	
              35

            
	
              5.20

            	
              Loan
                Officers

            	
              37

            
	
              5.21

            	
              Related
                Party Transactions

            	
              37

            
	
              5.22

            	
              Financial
                Advisors

            	
              37

            
	
              Article
                VI

            	
              REPRESENTATIONS
                AND WARRANTIES OF PURCHASER

            	
              38

            
	
              6.1

            	
              Organization
                and Good Standing

            	
              38

            
	
              6.2

            	
              Authorization
                of Agreement

            	
              38

            
	
              6.3

            	
              Conflicts;
                Consents of Third Parties

            	
              38

            
	
              6.4

            	
              Litigation

            	
              38

            
	
              6.5

            	
              Financial
                Advisors

            	
              38

            
	
              6.6

            	
              Financing

            	
              39

            
	
              Article
                VII

            	
              COVENANTS

            	
              39

            
	
              7.1

            	
              Access
                to Information

            	
              39

            
	
              7.2

            	
              Conduct
                of the Business Pending the Closing

            	
              39

            
	
              7.3

            	
              Consents

            	
              41

            
	
              7.4

            	
              Regulatory
                Approvals

            	
              42

            
	
              7.5

            	
              Further
                Assurances

            	
              43

            
	
              7.6

            	
              No
                Shop

            	
              43

            
	
              7.7

            	
              Non-Competition;
                Non-Solicitation; Confidentiality

            	
              44

            
	
              7.8

            	
              Preservation
                of Records

            	
              45

            
	
              7.9

            	
              Publicity

            	
              46

            
	
              7.10

            	
              Notice
                to Pipeline Loan Mortgagors and Others

            	
              46

            
	
              7.11

            	
              Use
                of Name

            	
              46

            

    

     

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

     

    
      	
              7.12

            	
              Real
                Property Lease Portfolio

            	
              47

            
	
              Article
                VIII

            	
              EMPLOYEES
                AND EMPLOYEE BENEFITS

            	
              47

            
	
              8.1

            	
              Employment

            	
              47

            
	
              8.2

            	
              Personnel
                Files

            	
              50

            
	
              8.3

            	
              Standard
                Procedure

            	
              50

            
	
              8.4

            	
              Terminated
                Employees

            	
              50

            
	
              Article
                IX

            	
              CONDITIONS
                TO CLOSING

            	
              50

            
	
              9.1

            	
              Conditions
                Precedent to Obligations of Purchaser

            	
              50

            
	
              9.2

            	
              Conditions
                Precedent to Obligations of Seller

            	
              52

            
	
              Article
                X

            	
              INDEMNIFICATION

            	
              53

            
	
              10.1

            	
              Survival
                of Representations and Warranties

            	
              53

            
	
              10.2

            	
              Indemnification

            	
              53

            
	
              10.3

            	
              Indemnification
                Procedures

            	
              55

            
	
              10.4

            	
              Limitations
                on Indemnification

            	
              56

            
	
              10.5

            	
              Tax
                Treatment of Indemnity Payments

            	
              57

            
	
              Article
                XI

            	
              TAXES

            	
              57

            
	
              11.1

            	
              Transfer
                Taxes

            	
              57

            
	
              11.2

            	
              Prorations

            	
              57

            
	
              11.3

            	
              Cooperation
                on Tax Matters

            	
              58

            
	
              Article
                XII

            	
              MISCELLANEOUS

            	
              58

            
	
              12.1

            	
              Expenses

            	
              58

            
	
              12.2

            	
              Submission
                to Jurisdiction; Consent to Service of Process; Waiver of Jury
                Trial.

            	
              58

            
	
              12.3

            	
              Entire
                Agreement; Amendments and Waivers

            	
              59

            
	
              12.4

            	
              Governing
                Law

            	
              59

            
	
              12.5

            	
              Notices

            	
              59

            
	
              12.6

            	
              Severability

            	
              60

            
	
              12.7

            	
              Binding
                Effect; Assignment

            	
              60

            
	
              12.8

            	
              Knowledge

            	
              60

            
	
              12.9

            	
              Disclosure
                Memorandum

            	
              61

            
	
              12.10

            	
              Parent
                Agreements and Obligations

            	
              61

            
	
              12.11

            	
              Non-Recourse

            	
              61

            
	
              12.12

            	
              Counterparts

            	
              61

            

    

    

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

     

    Disclosure
      Memorandum

    

    
      	
              Section

            	 
	
              1.1(a)

            	
              [reserved]

            
	
              1.1(b)

            	
              Excluded
                Contracts

            
	
              1.1(c)

            	
              Excluded
                Real Property Leases

            
	
              1.1(d)

            	
              Other
                Purchased Contracts

            
	
              2.1(c)

            	
              Tangible
                Personal Property

            
	
              2.2
                

            	
              Excluded
                Assets

            
	
              2.5(a)

            	
              Conditional
                Assets -- Leases

            
	
              2.5(c)

            	
              Conditional
                Assets -- Contracts

            
	
              5.3(a)

            	
              Conflicts

            
	
              5.3(b)

            	
              Consents

            
	
              5.7(iii)

            	
              Absence
                of Certain Developments - Salary Increases

            
	
              5.7(vii)

            	
              Absence
                of Certain Developments - Capital Expenditures

            
	
              5.9(a)

            	
              Real
                Property

            
	
              5.10

            	
              Personal
                Property

            
	
              5.11(a)

            	
              Intellectual
                Property

            
	
              5.11(m)

            	
              Software

            
	
              5.12

            	
              Material
                Contracts

            
	
              5.13(a)

            	
              Employee
                Benefit Plans

            
	
              5.15

            	
              Litigation

            
	
              5.16(b)

            	
              Permits

            
	
              5.17

            	
              Environmental

            
	
              5.18

            	
              Insurance

            
	
              5.20

            	
              Loan
                Officers

            
	
              5.21(a),
                (b)

            	
              Related
                Party Transactions

            
	
              7.2(b)(xii)

            	
              Conduct
                of Business Pending Closing

            
	
              8.1(h)(1)

            	
              Severance
                Arrangements

            
	
              8.1(h)(2)

            	
              Assumed
                Employment and Change of Control Agreements

            
	
              8.5

            	
              Retention
                Bonus Arrangements

            
	
              9.1(l)

            	
              Employment
                Agreements

            
	
              9.1(m)

            	
              Transferred
                Employee Acceptance Threshold

            
	
              12.8

            	
              Knowledge
                of Seller and Knowledge of Parent

            
	 	 
	
              Exhibits

            	 
	
              3.4

            	
              Final
                Purchase Price Calculation

            
	
              5.19(b)(ii)

            	
              Pipeline
                Loan Representations and Warranties

            
	
              A

            	
              Duration
                Multiple and Market Movement Examples

            
	
              B

            	
              Transition
                Services Agreement

            
	
              C

            	
              Form
                of Escrow Agreement

            
	
              D

            	
              Form
                of Severance Agreement

            
	
              E

            	
              Form
                of Retention Bonus Agreement

            
	
              F

            	
              Form
                of Bill of Sale

            
	
              G

            	
              Form
                of Assignment and Assumption Agreement

            
	
              H

            	
              Form
                of Opinion of Seller Counsel

            

    

    

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

     

    ASSET
      PURCHASE AGREEMENT

     

    ASSET
      PURCHASE AGREEMENT, dated as of February 6, 2007 (the “Agreement”),
      among
      IndyMac Bank, F.S.B., a federal savings bank chartered under the laws of the
      United States, or its designated Affiliate (“Purchaser”),
      The
      New York Mortgage Company, LLC, a New York limited liability company
      (“Seller”),
      and
      New York Mortgage Trust, Inc., a Maryland corporation (“Parent”).

     

    BACKGROUND

     

    Seller
      presently conducts the Business, and Parent and Seller desire to sell, transfer
      and assign to Purchaser or its designated Affiliate or Affiliates, and Purchaser
      desires to (or to cause its designated Affiliate or Affiliates to) acquire
      and
      assume from Seller, all of the Purchased Assets and Assumed Liabilities, all
      as
      more specifically provided herein.

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants and
      agreements hereinafter contained, the parties, intending to be legally bound,
      hereby agree as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    1.1  Certain
      Definitions.

     

    For
      purposes of this Agreement, the following terms shall have the meanings
      specified in this Section 1.1:

     

    “Affiliate”
means,
      with respect to any Person, any other Person that, directly or indirectly
      through one or more intermediaries, controls, or is controlled by, or is under
      common control with, such Person, and the term “control” means the possession,
      directly or indirectly, of the power to direct or cause the direction of the
      management and policies of such Person, whether through ownership of a majority
      of such Person’s outstanding voting securities, by contract or otherwise, and
      the terms “controlled by” and “under common control with” have correlative
      meanings.

     

    “Agency”
means
      HUD or the applicable State Agency.

     

    “Aggregate
      Pipeline Loan Adjustment”
means
      the aggregate amount of all Pipeline Loan Adjustments.

     

    “Applicable
      Requirements”
means
      and includes, as of the time of reference, with respect to Seller’s and its
      Subsidiaries’ origination of Pipeline Loans, all contractual obligations of
      Seller and its Subsidiaries (including any contained in a Mortgage Loan
      Document).

     

    “Business”
means
      the business of Parent and its Affiliates (including Seller and the Subsidiaries
      of Parent and Seller) of marketing, soliciting, originating and selling
      residential mortgage loans on a retail or consumer basis throughout the United
      States.

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “COBRA”
means
      the Consolidated Omnibus Budget Reconciliation Act of 1985, as
      amended.

     

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

     

    “Consents”
shall
      mean any consents, registrations, approvals, declarations, permits, expiration
      of any applicable waiting periods or authorizations.

     

    “Contingent
      Workers”
means
      independent contractors, consultants, temporary employees, leased employees
      or
      other servants or agents classified by Parent or Seller as other than employees
      or compensated other than through wages paid by Parent or Seller and reported
      on
      a form W-4, that are employed or used with respect to the operation of the
      Business.

     

    “Contract”
means
      any contract, agreement, indenture, note, bond, loan, instrument, lease,
      commitment or other arrangement or understanding, whether written or
      oral.

     

    “Documents”
means
      all files, documents, instruments, papers, books, reports, records, tapes,
      microfilms, photographs, letters, budgets, forecasts, ledgers, journals, title
      policies, customer lists, regulatory filings, operating data and plans,
      technical documentation (design specifications, functional requirements,
      operating instructions, logic manuals, flow charts, etc), user documentation
      (installation guides, user manuals, training materials, release notes, working
      papers, etc.), marketing documentation (sales brochures, flyers, pamphlets,
      web
      pages, etc.), and other similar materials related to the Business and the
      Purchased Assets, in each case whether or not in electronic form.

     

    “Employee”
means
      all individuals (including common law employees, independent contractors and
      individual consultants), as of the date hereof, who are employed by Parent
      or
      Seller in connection with the Business, together with individuals who are hired
      in respect of the Business after the date hereof.

     

    “Environmental
      Law”
means
      any foreign, federal, state or local statute, regulation, ordinance, rule of
      common law or other legal requirement as now or hereafter in effect in any
      way
      relating to the protection of human health and safety, the environment or
      natural resources, including the Comprehensive Environmental Response,
      Compensation and Liability Act (42 U.S.C. § 9601 et seq.),
      the
      Hazardous Materials Transportation Act (49 U.S.C. App. § 1801
et seq.),
      the
      Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.),
      the
      Clean Water Act (33 U.S.C. § 1251 et seq.),
      the
      Clean Air Act (42 U.S.C. § 7401 et seq.),
      the
      Toxic Substances Control Act (15 U.S.C. § 2601 et seq.),
      the
      Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136
et seq.),
      and
      the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.),
      as
      each has been or may be amended and the regulations promulgated pursuant
      thereto.

     

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

     

    “Excess
      Severance Payments”
shall
      mean the amount by which severance or similar payments made to Transferred
      Employees by Purchaser pursuant to Section
      8.1(h)
      (together with the cost to Purchaser of any services provided by third-party
      outplacement service providers with respect to any dismissed Transferred
      Employees) on or prior to the first anniversary of the Closing Date exceed
      $500,000; provided, that, such Excess Severance Payments shall not exceed the
      Excess Severance Escrow Amount; provided further, that Excess Severance Payments
      shall not include any severance or similar payments made by Purchaser resulting
      from Purchaser’s sale or discontinuation of the Business.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “Excluded
      Contracts”
means
      the Contracts listed on Section
      1.1(b)
      of the
      Disclosure Memorandum.

     

    “Excluded
      Real Property Leases”
means
      the Real Property Leases listed on Section
      1.1(c)
      of the
      Disclosure Memorandum.

     

    “Foreclosure”
means
      the process culminating in the acquisition of title to a Mortgaged Property
      in a
      foreclosure sale or by a deed in lieu of foreclosure or pursuant to any other
      comparable procedure allowed under applicable Law.

     

    “Furniture
      and Equipment”
means
      all furniture, fixtures, furnishings, equipment, vehicles, leasehold
      improvements and other tangible personal property owned, leased or used by
      Seller or any Subsidiary in the conduct of the Business, including artwork,
      desks, chairs, tables, Hardware, copiers, telephone lines and numbers, telecopy
      machines and other telecommunication equipment, cubicles and miscellaneous
      office furnishings and supplies.

     

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

     

    “Governmental
      Body”
means
      any government or governmental or regulatory body thereof, or political
      subdivision thereof, whether foreign, federal, state, or local, or any agency,
      instrumentality or authority thereof, or any court or arbitrator (public or
      private).

     

    “Hardware”
means
      any and all computer and computer-related hardware, including computers, file
      servers, facsimile servers, scanners, color printers, laser printers and
      networks.

     

    “Hazardous
      Material”
means
      any substance, material or waste that is regulated, classified, or otherwise
      characterized under or pursuant to any Environmental Law as “hazardous,”
“toxic,” “pollutant,” “contaminant,” “radioactive,” or words of similar meaning
      or effect, including, without limitation, petroleum and its by-products,
      asbestos, polychlorinated biphenyls, radon, mold or other fungi, and urea
      formaldehyde insulation.

     

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

     

    “Independent
      Accountant”
means
      to an independent nationally recognized auditing firm selected by the Seller
      and
      Purchaser.

     

    “Insurer”
means
      a
      Person who insures or guarantees all or any portion of the risk of loss on
      any
      Mortgage Loan or Pipeline Loan, including any provider of PMI, standard hazard
      insurance, flood insurance, earthquake insurance or title insurance, with
      respect to any Mortgage Loan, Pipeline Loan or related Mortgaged
      Property.

     

    “Intellectual
      Property”
means,
      subject to the provisions of Section
      7.11,
      all
      right, title and interest in or relating to intellectual property and industrial
      property, whether protected, created or arising under the Laws of the United
      States or any other jurisdiction, including: (i) all patents and
      applications therefor, including all continuations, divisionals, and
      continuations-in-part thereof and patents issuing thereon, along with all
      reissues, reexaminations and extensions thereof (collectively, “Patents”),
      (ii) subject to the terms and conditions of Section
      7.11,
      all
      trademarks, service marks, trade names, service names, brand names, trade dress
      rights, logos, corporate names, trade styles, logos and other source or business
      identifiers and general intangibles of a like nature, together with the goodwill
      associated with any of the foregoing, along with all applications,
      registrations, renewals and extensions thereof (collectively, “Marks”),
      (iii)
      subject to the terms and conditions of Section
      7.11,
      all
      Internet domain names, (iv) all copyrights and all mask work, database and
      design rights, whether or not registered or published, all registrations and
      recordations thereof and all applications in connection therewith, along with
      all reversions, extensions and renewals thereof (collectively, “Copyrights”),
      (iv)
      trade secrets (“Trade
      Secrets”),
      (v)
      all other intellectual property and industrial property rights arising from
      or
      relating to Technology, and (vi) all Contracts granting any right relating
      to or
      under the foregoing.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    “Intellectual
      Property Licenses”
means
      (i) any grant to a third Person of any right relating to or under the Purchased
      Intellectual Property and (ii) any grant to (a) Seller or any Subsidiary of
      any
      right relating to or under any third Person’s Intellectual Property or (b)
      Parent or any of its Affiliates (other than Seller or any Subsidiary) of any
      right relating to or under any third Person’s Intellectual Property that is
      related to or used in connection with the Business.

     

    “IRS”
means
      the Internal Revenue Service.

     

    “Law”
means
      any federal, state, local, municipal, foreign, international, multinational,
      or
      other constitution, law, rule, standard, requirement, administrative ruling,
      order, ordinance, principle of common law, legal doctrine, code, regulation,
      statute, treaty or process, including, without limitation, those relating to
      consumer credit and mortgage lending or brokering (including but not limited
      to
      the Real Estate Settlement Procedures Act, the federal Truth in Lending Act,
      the
      Equal Credit Opportunity Act, the Fair Housing Act, the Fair Credit Reporting
      Act, the Fair Debt Collection Practices Act, the Home Mortgage Disclosure Act,
      the Federal Trade Commission Act, the Gramm-Leach-Bliley Act and all applicable
      state laws related to the foregoing) and laws covering predatory lending, fair
      housing and unfair and deceptive practices, the Code, state adaptions of the
      Uniform Commercial Code and the Uniform Consumer Credit Code, any Environmental
      Law, ERISA, the Securities Exchange Act of 1934, as amended, and the Securities
      Act of 1933, as amended.

     

    “Legal
      Proceeding”
means
      any judicial, administrative or arbitral actions, suits, proceedings (public
      or
      private) or claims or any proceedings by or before a Governmental Body,
      including any civil, criminal, investigative or informal actions, audits,
      demands, claims, hearings, litigations, disputes, inquiries, investigations
      or
      other proceedings of any kind or nature.

     

    “Liability”
means
      any debt, loss, damage, adverse claim, liability or obligation (whether direct
      or indirect, known or unknown, asserted or unasserted, absolute or contingent,
      accrued or unaccrued, liquidated or unliquidated, or due or to become due,
      and
      whether in contract, tort, strict liability or otherwise), and including all
      costs and expenses relating thereto.

     

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

     

    “LoanQuest
      Software”
means
      that certain software provided by MortgageFlex Systems, Inc. pursuant to that
      certain Corporate Software License and Maintenance Agreement identified at
      no. 8
      on Section
      5.11(m)
      of the
      Disclosure Memorandum. 

     

    “Material
      Adverse Effect”
means
      (i) a material adverse effect on the business, condition (financial or
      otherwise), assets or results of operations of the Business, taken as a whole,
      or (ii) a material impairment of, or delay in, Parent’s and Seller’s ability to
      effect the Closing or to perform their respective obligations under this
      Agreement; provided, that none of the following shall be deemed to constitute
      or
      shall be taken into account in determining whether there has been a “Material
      Adverse Effect”: any event, circumstance, change or effect arising out of or
      attributable to (a) changes in the economy or financial markets, including,
      prevailing interest rates and market conditions, generally in the United States
      or that are the result of acts of war or terrorism, except to the extent any
      of
      the same materially disproportionately affects Parent, Seller or any of their
      respective Subsidiaries as compared to other companies in the industry in which
      Parent, Seller and their respective Subsidiaries operate; (b) changes that
      are
      caused by factors generally affecting the industry in which Parent, Seller
      and
      their Subsidiaries operate, except to the extent any of the same materially
      disproportionately affects Parent, Seller or any of their Subsidiaries; (c)
      any
      loss of, or adverse change in, the relationship of Parent or Seller with their
      customers, employees or suppliers caused by the announcement of the transactions
      contemplated by this Agreement; (d) changes in, or in the application of, GAAP;
      (e) changes in applicable Laws except to the extent any of the same materially
      disproportionately affects Parent, Seller or any of their respective
      Subsidiaries as compared to other companies in the industry in which Seller
      and
      its Subsidiaries operate; and (f) so long as the condition set forth in
Section
      9.1(m)
      is
      satisfied, changes related to any Employee employed by Seller in a sales
      function (including loan officers and production managers) who are intended
      to
      become Transferred Employees.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    “Mortgage”
means
      a
      mortgage, deed of trust or other similar security instrument that creates a
      Lien
      on real property.

     

    “Mortgage
      Loan”
means
      any loan that is, or upon closing or funding, will be, evidenced by a Mortgage
      or Mortgage Note and secured by a Mortgaged Property.

     

    “Mortgage
      Loan Documents”
means
      the documents relating to Mortgage Loans or Pipeline Loans required by
      Applicable Requirements to originate the Mortgage Loans or Pipeline Loans,
      whether on hard copy, microfiche or its equivalent or in electronic format
      and,
      to the extent required by Applicable Requirements, credit and closing packages
      and disclosures.

     

    “Mortgage
      Loan Tape”
means,
      with respect to the Pipeline Loans, an electronic data file to be dated as
      of
      the day immediately prior to the Closing Date and furnished by Seller to
      Purchaser on such day in connection with the transactions contemplated by this
      Agreement. 

     

    “Mortgage
      Note”
means,
      with respect to a Mortgage Loan, a promissory note or notes, or other evidence
      of indebtedness, with respect to such Mortgage Loan secured by a Mortgage or
      Mortgages, together with any assignment, reinstatement, extension, endorsement
      or modification thereof.

     

    “Mortgaged
      Property”
means
      a
      fee simple property (or such other estate in real property as is commonly
      accepted as collateral for mortgage loans that are subject to secondary mortgage
      sales or securitizations) that secures a Mortgage Note and that is subject
      to a
      Mortgage.

     

    “MortgageWare
      Software”
means
      that certain software provided by Harland Financial Solutions pursuant to
      arrangement identified at no. 4 on Section
      5.11(m)
      of the
      Disclosure Memorandum.

     

    “Mortgagor”
means
      the obligor(s) on a Mortgage Note or owners of a Mortgaged
      Property.

     

    “Order”
means
      any order, injunction, judgment, decree, ruling, writ, assessment or arbitration
      award of a Governmental Body.

     

    “Ordinary
      Course of Business”
means
      the ordinary and usual course of normal day-to-day operations of the Business
      through the date hereof consistent with past practice (including consistent
      with
      Seller’s credit and underwriting policies as applicable). 

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    “Originator”
means,
      with respect to any Mortgage Loan or Pipeline Loan, each entity or individual
      that (i) took the relevant loan application or (ii) processed the relevant
      loan
      application.

     

    “Permits”
means
      any approvals, authorizations, Consents, licenses, permits or certificates
      of a
      Governmental Body.

     

    “Permitted
      Exceptions”
means
      (i) all defects, exceptions, restrictions, easements, rights of way and
      encumbrances disclosed in policies of title insurance which have been made
      available to Purchaser; (ii) statutory liens for current Taxes, assessments
      or
      other governmental charges not yet due and payable or the amount or validity
      of
      which is being contested in good faith by appropriate proceedings or the making
      of appropriate demands, notices or filings; provided that an appropriate reserve
      is established therefor against the carrying amount of the related assets;
      (iii)
      mechanics’, carriers’, workers’, repairers’ and similar Liens arising or
      incurred in the Ordinary Course of Business that are not material to the
      business, operations and financial condition of the Business that are not
      resulting from a breach, default or violation by Seller or any of the
      Subsidiaries of any Contract or Law; (iv) zoning, entitlement and other land
      use
      and environmental regulations by any Governmental Body provided that such
      regulations have not been violated; and (v) such other imperfections in title,
      charges, easements, restrictions and encumbrances which do not materially
      detract from the value of or materially interfere with the present use of any
      Seller Property subject thereto or affected thereby.

     

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

     

    “Pipeline
      Loan Adjustment”
means,
      for each Pipeline Loan that is subject to a rate-lock commitment on the Closing
      Date, the product obtained by multiplying (i) the Duration Multiple by (ii)
      the
      Market Movement of the Pipeline Loan from the date the Pipeline Loan is
      rate-locked to the Closing Date by (iii) the principal amount of such Pipeline
      Loan; provided, that for Pipeline Loans that are subject to a rate-lock
      commitment on the Closing Date and are to be sold subject to an acknowledged
      lock-in price by the investor to which they are designated to be sold, there
      will be no Pipeline Loan Adjustment as the
      investor
      price will be the market price.  For purposes of this Agreement the
“Duration
      Multiple”
means,
      for a Pipeline Loan, the duration multiple set forth on Exhibit
      A
      which
      most closely approximates the interest rate characteristic and amortization
      period that a Pipeline Loan represents.  For purposes of this Agreement,
      the “Market
      Movement”
means,
      for a Pipeline Loan the change in interest rates from the original rate-lock
      date to the Closing Date calculated in accordance with the examples set forth
      in
Exhibit
      A.

     

    “PMI”
means
      the default insurance provided by private mortgage insurance
      companies.

     

    “Pre-Closing
      Tax Period”
means
      any taxable year or period that ends on or before the Closing Date and, with
      respect to any taxable year or period beginning before and ending after the
      Closing Date, the portion of such taxable year or period ending on and including
      the Closing Date.

     

    “Purchased
      Contracts”
means:
      (i) all leases for Furniture and Equipment located at the Seller Properties;
      (ii) Personal Property Leases; (iii) Real Property Leases; (iv) Contracts
      relating to Software identified in Section
      5.11(m)
      of the
      Disclosure Memorandum; (v) any Contracts relating directly to the operation
      and
      maintenance of the Seller Properties that (A) require payments that are not
      material, (B) do not contain any restrictions prohibiting or limiting the
      ability of Seller to (1) engage in any line of business, (2) compete with,
      obtain products or services from, or provide services or products to, any
      Person, (3) carry on or expand the nature or geographical scope of the Business
      anywhere in the world or (4) enter into any Contract with any other Person,
      and
      (C) that may be terminated without penalty or fee upon not more than 90 days
      notice; and (vi) all other Contracts listed in Section
      1.1(d)
      of the
      Disclosure Memorandum, in each case excluding any Excluded Real Property Leases
      and Excluded Contracts.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    “Purchased
      Intellectual Property”
means
      all Intellectual Property owned by Parent and its Affiliates (including Seller
      and the Subsidiaries) related to or used in connection with the
      Business.

     

    “Purchased
      Technology”
means
      all Technology owned by Parent and its Affiliates (including Seller and the
      Subsidiaries) related to or used in connection with the Business.

     

    “SEC”
means
      the United States Securities and Exchange Commission.

     

    “Software”
means
      any and all (i) computer programs, including any and all software
      implementations of algorithms, models and methodologies, whether in source
      code
      or object code, (ii) databases and compilations, including any and all data
      and collections of data, whether machine readable or otherwise,
      (iii) descriptions, flow-charts and other work product used to design,
      plan, organize and develop any of the foregoing, screens, user interfaces,
      report formats, firmware, development tools, templates, menus, buttons and
      icons, and (iv) all documentation including user manuals and other training
      documentation related to any of the foregoing.

     

    “State
      Agency”
means
      any state agency or other entity with authority to regulate the activities
      of
      Seller or any of its Subsidiaries relating to the origination or servicing
      of
      Mortgage Loans or Pipeline Loans or to determine the investment or servicing
      requirements with regard to mortgage loan origination, purchasing, servicing,
      master servicing or certificate administration performed by Seller or any of
      its
      Subsidiaries.

     

    “Subsidiary”
means
      any Person of which a majority of the outstanding voting securities or other
      voting equity interests is owned, directly or indirectly, by
      Seller.

     

    “Tax”
or
      “Taxes”
means
      (i) any and all federal, state, local or foreign taxes, charges, fees,
      imposts, levies or other assessments, including, without limitation, all net
      income, gross receipts, capital, sales, use, ad valorem, value added, transfer,
      franchise, profits, inventory, capital stock, license, withholding, payroll,
      employment, social security, unemployment, excise, severance, stamp, occupation,
      property and estimated taxes, customs duties, fees, assessments and charges
      of
      any kind whatsoever imposed or administered by any Taxing Authority,
      (ii) all interest, penalties, fines, additions to tax or additional amounts
      imposed by any Taxing Authority in connection with any item described in
      clause (i), and (iii) any liability in respect of any items described in
      clauses (i) and/or (ii) payable by reason of contract, assumption,
      transferee liability, operation of law, Treasury Regulation Section 1.1502-6(a)
      (or any predecessor or successor thereof or any analogous or similar provision
      under law) or otherwise.

     

    “Taxing
      Authority”
means
      the U.S. Internal Revenue Service and any other Governmental Body responsible
      for the administration of any Tax.

     

    “Tax
      Return”
means
      any return, report or statement required to be filed with respect to any Tax
      (including any attachments thereto, and any amendment thereof) including, but
      not limited to, any information return, claim for refund, amended return or
      declaration of estimated Tax, and including, where permitted or required,
      com-bined, consolidated or unitary returns for any group of entities that
      includes Seller, any of the Subsidiaries, or any of their
      Affiliates.

     

    “Technology”
means,
      collectively, all Software, information, designs, formulae, algorithms,
      procedures, methods, techniques, ideas, know-how, research and development,
      technical data, programs, subroutines, tools, materials, specifications,
      processes, inventions (whether patentable or unpatentable and whether or not
      reduced to practice), apparatus, creations, improvements, works of authorship
      and other similar materials, and all recordings, graphs, drawings, reports,
      analyses, and other writings, and other tangible embodiments of the foregoing,
      in any form whether or not specifically listed herein, and all related
      technology, that are used in, incorporated in, embodied in, displayed by or
      relate to, or are used in connection with the foregoing.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    “Transition
      Services Agreement”
means
      an agreement in substantially the form attached hereto as Exhibit
      B
      pursuant
      to which Parent and Seller will provide, or cause their respective subsidiaries
      to provide, certain transition services to Purchaser and its
      subsidiaries.

     

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

     

    1.2  Terms
      Defined Elsewhere in this Agreement.
      For
      purposes of this Agreement, the following terms have meanings set forth in
      the
      sections indicated:

     

    
      	
              Term

            	
              Section

            
	 	 
	
              Acquisition
                Transaction

            	
              7.6(a)

            
	
              Agreement

            	
              Recitals

            
	
              Antitrust
                Laws

            	
              7.4(b)

            
	
              Asset
                Acquisition Statement

            	
              2.8

            
	
              Assumed
                Liabilities

            	
              2.3

            
	
              Balance
                Sheet

            	
              5.4(a)

            
	
              Balance
                Sheet Date

            	
              5.4(a)

            
	
              Book
                Value

            	
              3.1

            
	
              Book
                Value Escrow Amount

            	
              3.5(b)

            
	
              Business
                Marks

            	
              7.11(a)

            
	
              Cap

            	
              10.4(c)

            
	
              Closing

            	
              4.1

            
	
              Closing
                Date

            	
              4.1

            
	
              Closing
                Payment

            	
              3.3

            
	
              Confidential
                Information

            	
              7.7(c)

            
	
              Copyrights

            	
              1.1
                (in Intellectual Property definition)

            
	
              Deductible

            	
              10.4(a)

            
	
              Disclosure
                Memorandum

            	
              12.9(a)

            
	
              Dispute
                Notice

            	
              Exhibit
                3.4

            
	
              Duration
                Multiple

            	
              1.1
                (in Pipeline Loan Adjustment definition)

            
	
              Employee
                Benefit Plans

            	
              5.13(a)

            
	
              Escrow
                Agent

            	
              3.5(a)

            
	
              Escrow
                Agreement

            	
              3.5(a)

            
	
              Escrow
                Amount

            	
              3.5(b)

            
	
              Estimated
                Book Value

            	
              3.2

            
	
              Estimated
                Closing Balance Sheet

            	
              3.2

            
	
              Estimated
                Pipeline Premium

            	
              3.2

            
	
              Estimated
                Purchase Price

            	
              3.2

            
	
              Excess
                Severance Escrow Amount

            	
              3.5(b)

            
	
              Excluded
                Assets

            	
              2.2

            
	
              Excluded
                Employee

            	
              8.1(b)

            
	
              Excluded
                Liabilities

            	
              2.4

            
	
              FDIC

            	
              6.3(b)

            

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      	
              Term

            	
              Section

            
	 	 
	
              Final
                Balance Sheet

            	
              Exhibit
                3.4

            
	
              Final
                Book Value

            	
              Exhibit
                3.4

            
	
              Final
                Pipeline Premium

            	
              Exhibit
                3.4

            
	
              Final
                Pipeline Premium Calculation Statement

            	
              Exhibit
                3.4

            
	
              Final
                Purchase Price

            	
              Exhibit
                3.4

            
	
              Final
                Purchase Price Adjustment

            	
              Exhibit
                3.4

            
	
              Financial
                Statements

            	
              5.4(a)

            
	
              FIRPTA
                Affidavit

            	
              9.1(g)

            
	
              Hedging
                Instrument

            	
              2.2(k)

            
	
              Indemnification
                Escrow Amount

            	
              3.5(b)

            
	
              knowledge

            	
              12.8

            
	
              Knowledge
                of Parent

            	
              12.8

            
	
              Knowledge
                of Seller

            	
              12.8

            
	
              Losses

            	
              10.2(a)(i)

            
	
              Market
                Movement

            	
              1.1
                (in Pipeline Loan Adjustment definition)

            
	
              Marks

            	
              1.1
                (in Intellectual Property definition)

            
	
              Material
                Contracts

            	
              5.12(a)

            
	
              Nonassignable
                Assets

            	
              2.6(c)

            
	
              OTS

            	
              6.1

            
	
              Parent

            	
              Recitals

            
	
              Parent
                Marks

            	
              7.11

            
	
              Parent
                URL

            	
              7.11

            
	
              Patents

            	
              1.1
                (in Intellectual Property definition)

            
	
              Personal
                Property Leases

            	
              5.10(b)

            
	
              Pipeline
                Loans

            	
              2.1(a)

            
	
              Pipeline
                Premium

            	
              3.1

            
	
              Pipeline
                Premium Escrow Amount

            	
              3.5

            
	
              Premium

            	
              3.1

            
	
              Purchased
                Assets

            	
              2.1

            
	
              Purchase
                Price

            	
              3.1

            
	
              Purchaser

            	
              Recitals

            
	
              Purchaser
                401(k) Plan

            	
              8.1(g)

            
	
              Purchaser
                Benefit Plans

            	
              8.1(d)

            
	
              Purchaser
                Documents

            	
              6.2

            
	
              Purchaser
                Indemnified Parties

            	
              10.2(a)

            
	
              Real
                Property Lease

            	
              5.9(a)

            
	
              Receivables

            	
              2.2(c)

            
	
              Representatives

            	
              7.6

            
	
              Resolution
                Period

            	
              Exhibit
                3.4

            
	
              Restricted
                Business

            	
              7.7(a)

            
	
              Revised
                Statements

            	
              2.8

            
	
              Seller

            	
              Recitals

            
	
              Seller
                Documents

            	
              5.2

            
	
              Seller
                Indemnified Parties

            	
              10.2(b)

            
	
              Seller
                Property

            	
              5.9(a)

            
	
              Severance
                Agreements

            	
              8.1(h)

            
	
              Survival
                Period

            	
              10.1

            
	
              Third
                Party Claim

            	
              10.3(b)

            

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	
              Term

            	
              Section

            
	 	 
	
              Trade
                Secrets

            	
              1.1
                (in Intellectual Property definition)

            
	
              Transfer
                Taxes

            	
              11.1

            
	
              Transferred
                Employees

            	
              8.1(a)

            

    

    

    1.3  Other
      Definitional and Interpretive Matters

     

    (a)  Unless
      otherwise expressly provided, for purposes of this Agreement, the following
      rules of interpretation shall apply:

     

    Calculation
      of Time Period.
      When
      calculating the period of time before which, within which or following which
      any
      act is to be done or step taken pursuant to this Agreement, the date that is
      the
      reference date in calculating such period shall be excluded. If the last day
      of
      such period is a non-Business Day, the period in question shall end on the
      next
      succeeding Business Day.

     

    Dollars.
      Any
      reference in this Agreement to $ shall mean U.S. dollars.

     

    Exhibits/Schedules.
      The
      Exhibits and Disclosure Memorandum to this Agreement are hereby incorporated
      and
      made a part hereof as if set forth in full herein and are an integral part
      of
      this Agreement. Any capitalized terms used in the Disclosure Memorandum or
      any
      Exhibit but not otherwise defined therein shall be defined as set forth in
      this
      Agreement.

     

    Gender
      and Number.
      Any
      reference in this Agreement to gender shall include all genders, and words
      imparting the singular number only shall include the plural and vice
      versa.

     

    Headings.
      The
      provision of a Table of Contents, the division of this Agreement into Articles,
      Sections and other subdivisions and the insertion of headings are for
      convenience of reference only and shall not affect or be utilized in construing
      or interpreting this Agreement. All references in this Agreement to any
“Section” are to the corresponding Section of this Agreement unless otherwise
      specified.

     

    Herein.
      The
      words such as “herein,”
      “hereinafter,”
      “hereof,”
and
      “hereunder”
refer
      to this Agreement as a whole and not merely to a subdivision in which such
      words
      appear unless the context otherwise requires.

     

    Including.
      The
      word “including”
or
      any
      variation thereof means “including,
      without limitation”
and
      shall not be construed to limit any general statement that it follows to the
      specific items immediately following it.

     

    (b)  The
      parties hereto have participated jointly in the negotiation and drafting of
      this
      Agreement and, in the event an ambiguity or question of intent or interpretation
      arises, this Agreement shall be construed as jointly drafted by the parties
      hereto and no presumption or burden of proof shall arise favoring or disfavoring
      any party by virtue of the authorship of any provision of this
      Agreement.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    ARTICLE
      II

     

    PURCHASE
      AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

     

    2.1  Purchase
      and Sale of Assets.
      On the
      terms and subject to the conditions set forth in this Agreement, at the Closing,
      Purchaser shall (or shall cause its designated Affiliate or Affiliates to)
      purchase, acquire and accept from Seller and the Subsidiaries, and Seller shall
      (and shall cause the Subsidiaries to) sell, transfer, assign, convey and deliver
      to Purchaser (or its designated Affiliate or Affiliates) all of Seller’s and the
      Subsidiaries’ right, title and interest in, to and under the Purchased Assets,
      free and clear of all Liens except, in the case of tangible property, for
      Permitted Exceptions. “Purchased
      Assets”
shall
      mean all of the business, assets, properties, contractual rights, goodwill,
      going concern value, rights and claims of Seller and the Subsidiaries related
      to
      the Business, wherever situated and of whatever kind and nature, real or
      personal, tangible or intangible, whether or not reflected on the books and
      records of Seller or the Subsidiaries (other than the Excluded Assets),
      including, without duplication, each of the following assets:

     

    (a)  Mortgage
      Loan applications (i) that have a “received” or greater status under Seller’s
      MortgageWare Software (or equivalent status under Seller’s LoanQuest Software)
      as of the Closing Date, (ii) which have not been denied, withdrawn or funded
      as
      of the Closing Date, and (iii) for which “three-day” disclosure packages have
      been sent to the potential borrower (the “Pipeline
      Loans”),
      together with all documentation and files related thereto;

     

    (b)  all
      escrowed deposits related to Pipeline Loans;

     

    (c)  all
      tangible personal property used in the Business, including Furniture and
      Equipment, in each case as listed on Section
      2.1(c)
      of the
      Disclosure Memorandum and other than such tangible personal property which
      is an
      Excluded Asset;

     

    (d)  all
      security deposits (including security for rent, electricity, telephone or
      otherwise) and prepaid charges and expenses, including any prepaid rent, prepaid
      insurance premiums, prepaid utility expenses and interest on subleases, of
      Seller and the Subsidiaries;

     

    (e)  all
      rights of Seller and the Subsidiaries under each Real Property Lease, together
      with all improvements, fixtures and other appurtenances thereto and rights
      in
      respect thereof;

     

    (f)  the
      Purchased Intellectual Property, including as set forth in Section
      5.11(a)
      of the
      Disclosure Memorandum, and the Purchased Technology, including as set forth
      in
Section
      5.11(m)
      of the
      Disclosure Memorandum;

     

    (g)  all
      rights of Seller and the Subsidiaries under the Purchased Contracts including
      all claims or causes of action with respect to the Purchased
      Contracts;

     

    (h)  subject
      to Section
      2.11,
      all
      Documents that are used in or related to the Business, including Documents
      relating to products, services, marketing, advertising, promotional materials,
      Pipeline Loans, Purchased Intellectual Property, Intellectual Property Licenses,
      personnel files for Transferred Employees and all files, customer files and
      past
      borrower data, and documents (including credit information), supplier lists,
      records, literature and correspondence, whether or not physically located on
      any
      of Seller’s or Parent’s premises, but excluding personnel files for Employees of
      Seller or the Subsidiaries who are not Transferred Employees; 

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (i)  all
      Permits, including environmental permits, used by Seller or any Subsidiary
      to
      conduct the Business and all rights and incidents of interest
      therein;

     

    (j)  all
      supplies owned by Seller or any Subsidiary and used in connection with the
      Business;

     

    (k)  all
      rights of Seller and the Subsidiaries under non-disclosure or confidentiality,
      non-compete, or non-solicitation agreements with employees and agents of Seller
      or any Subsidiary or with third parties to the extent relating to the Business
      or the Purchased Assets (or any portion thereof);

     

    (l)  all
      rights of Seller and the Subsidiaries under or pursuant to all warranties,
      representations and guarantees made by suppliers, manufacturers and contractors
      for the benefit of Seller or any Subsidiary with respect to any Purchased Assets
      or Assumed Liabilities;

     

    (m)  all
      third
      party property and casualty insurance proceeds, and all rights to third party
      property and casualty insurance proceeds, in each case to the extent received
      or
      receivable in respect of the Business; and 

     

    (n)  all
      goodwill and other intangible assets associated with the Business, including
      customer and supplier lists, prospective client lists, and the goodwill
      associated with the Purchased Intellectual Property.

     

    2.2  Excluded
      Assets.
      Nothing
      herein contained shall be deemed to sell, transfer, assign or convey the
      Excluded Assets to Purchaser, and Seller or a Subsidiary shall retain all right,
      title and interest to, in and under the Excluded Assets. “Excluded
      Assets”
shall
      mean each of the following assets:

     

    (a)  the
      Excluded Contracts; 

     

    (b)  all
      assets set forth in Section
      2.2
      of the
      Disclosure Memorandum;

     

    (c)  all
      accounts and accrued interest receivable of Seller and the Subsidiaries (the
      “Receivables”);

     

    (d)  any
      and
      all Contracts pursuant to which Seller previously sold or currently sells
      Mortgage Loans to investors, including any amounts due from such investors
      pursuant to such Contracts;

     

    (e)  Mortgage
      Loans held for sale, held in securitization trusts or held for
      investment;

     

    (f)  Mortgage
      Loans repurchased by Seller from any investor;

     

    (g)  cash,
      cash equivalents and restricted cash;

     

    (h)  investment
      securities available for sale;

     

    (i)  servicing
      rights and other servicing assets;

     

    (j)  tax
      assets, claims for Tax refunds, Tax Returns and Tax workpapers;

     

    (k)  all
      interest rate swaps, caps, floors, collars and option agreements or other
      interest rate risk management arrangements (collectively, “Hedging
      Instruments”);

     

    
      
         

      

      
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    (l)  all
      rights in connection with, and assets of, any Employee Benefit Plan, except
      to
      the extent otherwise provided in Article
      VIII
      hereof;

     

    (m)  Excluded
      Real Property Leases; and

     

    (n)  all
      minute books, organizational documents, stock registers and such other books
      and
      records of Seller or any Subsidiary as pertain to ownership, organization or
      existence of Seller and each Subsidiary and duplicate copies of such records
      as
      are necessary to enable Seller and the Subsidiaries to prepare or file Tax
      Returns.

     

    2.3  Assumption
      of Liabilities.
      On the
      terms and subject to the conditions set forth in this Agreement, at the Closing,
      Purchaser shall (or shall cause its designated Affiliate or Affiliates to)
      assume, effective as of the Closing, the following liabilities of Seller and
      the
      Subsidiaries (collectively, the “Assumed
      Liabilities”):

     

    (a)  all
      obligations of Seller and the Subsidiaries under the Pipeline
      Loans;

     

    (b)  except
      as
      specifically provided for in Section
      2.3(c),
      all
      Liabilities of Seller and the Subsidiaries under the Purchased Contracts that
      arise out of or relate to the period after the Closing;

     

    (c)  subject
      to the calculation of the Purchase Price set forth in Section
      3.1
      and the
      Excess Severance Escrow Amount, all severance and similar obligations arising
      after the Closing pursuant to those certain: (i) Severance Agreements with
      the
      Transferred Employees listed in Section
      8.1(h)(1)
      of the
      Disclosure Memorandum, and (ii) agreements listed in Section
      8.1(h)(2)
      of the
      Disclosure Memorandum.

     

    (d)  all
      Liabilities that relate directly to the Purchased Assets and that arise out
      of
      or relate to the conduct of the Business by Purchaser after the
      Closing.

     

    2.4  Excluded
      Liabilities.
      Purchaser will not assume or be liable for any Excluded Liabilities. Seller
      shall, and shall cause the Subsidiaries to, timely perform, satisfy and
      discharge in accordance with their respective terms all Excluded Liabilities.
      “Excluded
      Liabilities”
shall
      mean all Liabilities of Seller and the Subsidiaries arising out of or relating
      to the Business or the Purchased Assets prior to the Closing and all other
      Liabilities of Parent, Seller and the Subsidiaries other than the Assumed
      Liabilities, including the following Liabilities:

     

    (a)  all
      Liabilities in respect of any and all products (including Mortgage Loans) sold
      and/or services performed by Seller or the Subsidiaries prior to the
      Closing;

     

    (b)  except
      to
      the extent specifically provided in Article VIII,
      all
      Liabilities arising out of, relating to or with respect to (i) the
      employment or performance of services, or termination of employment or services
      by Seller or any of its Affiliates, of any individual employed by or engaged
      to
      provide services for or on behalf of Seller or any its Affiliates prior to
      the
      Closing, (ii) workers’ compensation claims against Seller or any of the
      Subsidiaries that relate to the period prior to the Closing, irrespective of
      whether such claims are made prior to or after the Closing or (iii) any Employee
      Benefit Plan;

     

    (c)  all
      Liabilities arising out of, under or in connection with the Excluded Real
      Property Leases and any Contracts that are not Purchased Contracts and, with
      respect to Purchased Contracts, Liabilities in respect of a breach by or default
      of Seller or any Subsidiary accruing under such Purchased Contracts with respect
      to any period prior to Closing;

     

    
      
         

      

      
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    (d)  all
      Liabilities arising out of, under or in connection with any indebtedness of
      Seller or any of the Subsidiaries for borrowed money or any other
      indebtedness;

     

    (e)  all
      Liabilities for (i) Taxes of Parent, Seller and the Subsidiaries, (ii) Taxes
      that relate to the Purchased Assets or the Assumed Liabilities for taxable
      periods (or portions thereof) ending on or before the Closing Date, including
      Taxes allocable to Seller and the Subsidiaries pursuant to Section
      11.2,
      and
      (iii) payments under any Tax allocation, sharing or similar agreement (whether
      oral or written);

     

    (f)  all
      Liabilities in respect of any pending or threatened Legal Proceeding, or any
      claim arising out of, relating to or otherwise in respect of (i) the operation
      of the Business to the extent such Legal Proceeding or claim relates to such
      operation prior to the Closing, including any claim for preferential payment
      by
      a bankruptcy trustee in respect of payment received by Seller or the
      Subsidiaries prior to the Closing or (ii) any Excluded Asset; 

     

    (g)  all
      Liabilities relating to any dispute with any client or customer of the Business
      existing as of the Closing or based upon, relating to or arising out of events,
      actions, or failures to act prior to the Closing; 

     

    (h)  any
      amounts due to investors in the Mortgage Loans, including servicing premium
      rebates, purchase price premium rebates, repurchase amounts and indemnification
      payments;

     

    (i)  any
      amounts due under any subordinated debentures issued by Seller to NYM Trust
      I
      and NYM Trust II;

     

    (j)  any
      derivative Liabilities and Liabilities under any Hedging
      Instruments;

     

    (k)  any
      amounts payable for securities purchased; and

     

    (l)  any
      amounts due to any Affiliate of Seller.

     

    2.5  Conditional
      Purchase and Assumption.
      Purchaser shall have the right, but not the obligation, to acquire any of the
      following assets and assume the related Liabilities, at the Closing on the
      terms
      set forth below:

     

    (a)  one
      or
      more of the leases relating to real property identified in Section
      2.5(a)
      of the
      Disclosure Memorandum; provided, that any such lease that Purchaser determines
      to acquire and assume shall be deemed to be a Real Property Lease for all
      purposes under this Agreement and that any such lease that Purchaser determines
      not to acquire or assume shall be deemed to be an Excluded Real Property Lease
      for all purposes under this Agreement;

     

    (b)  the
      shares of capital stock, units, membership interests or any other equity
      interests of any of Settlement Services of America, LLC, PIPCo Agency, LLC
      or
      any other Subsidiary of Seller; provided, that any such equity interests that
      Purchaser determines to acquire shall be deemed to be a Purchased Asset for
      all
      purposes under this Agreement and that any such equity interests that Purchaser
      determines not to acquire shall be deemed to be Excluded Assets for all purposes
      under this Agreement; 

     

    (c)  any
      Contract identified in Section
      2.5(c)
      of the
      Disclosure Memorandum; provided, that any Contract that Purchaser determines
      to
      acquire the rights and benefits of shall be deemed to be a Purchased Contract
      for all purposes under this Agreement and that any Contract that Purchaser
      determines not acquire the rights and benefits of shall be deemed to be an
      Excluded Contract for all purposes under this Agreement.

     

    
      
         

      

      
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    Purchaser
      shall make a written determination, in its sole discretion and without any
      impact on the Purchase Price, with respect to each of the items identified
      in
      this Section
      2.5
      no later
      than five Business Days prior to the Closing. 

     

    2.6  Further
      Conveyances and Assumptions; Consent of Third Parties.

     

    (a)  From
      time
      to time following the Closing and except as prohibited by Law, Seller shall,
      or
      shall cause its Affiliates to, make available to Purchaser such data in
      personnel records of Transferred Employees as is reasonably necessary for
      Purchaser to transition such employees into Purchaser’s records.

     

    (b)  From
      time
      to time following the Closing, Seller and Purchaser shall, and shall cause
      their
      respective Affiliates to, execute, acknowledge and deliver all such further
      conveyances, notices, assumptions, releases and acquittances and such other
      instruments, and shall take such further actions, as may be necessary or
      appropriate to assure fully to Purchaser and its respective successors or
      assigns, all of the properties, assets, rights, titles, interests, estates,
      remedies, powers and privileges intended to be conveyed to Purchaser under
      this
      Agreement and the Seller Documents and to assure fully to Seller and its
      Affiliates and their successors and assigns, the assumption of the liabilities
      and obligations intended to be assumed by Purchaser under this Agreement and
      the
      Seller Agreements, and to otherwise make effective the transactions contemplated
      hereby and thereby.

     

    (c)  Nothing
      in this Agreement nor the consummation of the transactions contemplated hereby
      shall be construed as an attempt or agreement to assign any Purchased Asset,
      including any Contract, Permit, certificate, approval, authorization or other
      right, which by its terms or by Law is nonassignable without the consent of
      a
      third party or a Governmental Body or is cancelable by a third party in the
      event of an assignment or purported assignment (“Nonassignable
      Assets”)
      unless
      and until such consent shall have been obtained. Seller shall, and shall cause
      its Affiliates to, use its commercially reasonable efforts to, with the
      cooperation of Purchaser, obtain at the earliest practical date all Consents
      and
      approvals required to consummate the transactions contemplated by this
      Agreement. To the extent permitted by applicable Law, in the event Consents
      to
      the assignment thereof cannot be obtained, such Nonassignable Assets shall
      be
      held, as of and from the Closing Date, by Seller or the applicable Affiliate
      of
      Seller in trust for Purchaser and the covenants and obligations thereunder
      shall
      be performed by Purchaser in Seller’s or such Affiliate’s name and all benefits
      and obligations existing thereunder shall be for Purchaser’s account. Seller
      shall take or cause to be taken at Purchaser’s expense such actions in its name
      or otherwise as Purchaser may reasonably request so as to provide Purchaser
      with
      the benefits of the Nonassignable Assets and to effect collection of money
      or
      other consideration that becomes due and payable under the Nonassignable Assets,
      and Seller or the applicable Affiliate of Seller shall promptly pay over to
      Purchaser all money or other consideration received by it after the Closing
      Date
      in respect of all Nonassignable Assets. As of and from the Closing Date, Seller
      on behalf of itself and its Affiliates authorizes Purchaser, to the extent
      permitted by applicable Law and the terms of the Nonassignable Assets, at
      Purchaser’s expense, to perform all the obligations and receive all the benefits
      of Seller or its Affiliates under the Nonassignable Assets and appoints
      Purchaser its attorney-in-fact to act in its name on its behalf or in the name
      of the applicable Affiliate of Seller and on such Affiliate’s behalf with
      respect thereto.

     

    2.7  Bulk
      Sales Laws.
      Purchaser hereby waives compliance by Seller and the Subsidiaries with the
      requirements and provisions of any “bulk-transfer” Laws of any jurisdiction that
      may otherwise be applicable with respect to the sale of any or all of the
      Purchased Assets to Purchaser; provided, that Seller agrees (i) to pay and
      discharge when due or to contest or litigate all claims of creditors which
      are
      asserted against Purchaser or the Purchased Assets by reason of such
      noncompliance, (ii) to indemnify, defend and hold harmless Purchaser from and
      against any and all such claims in the manner provided in Article
      X
      and
      (iii) to take promptly all necessary action to remove any Lien which is placed
      on the Purchased Assets by reason of such noncompliance. Any “bulk-transfer” Law
      that addresses Taxes shall be governed by Article
      X
      and not
      by this Section
      2.7.

     

    
      
         

      

      
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    2.8  Purchase
      Price Allocation.
      Not
      later than 60 days after the Closing Date, Purchaser shall prepare and
      deliver to Seller drafts of Form 8594 and any required exhibits thereto (the
      “Asset
      Acquisition Statement”)
      allocating the Purchase Price among the Purchased Assets in accordance with
      Code
      Section 1060 and the Treasury Regulations thereunder (and any similar provision
      of state, local or foreign Law, as appropriate) for Seller’s review and comment.
      Not later than 90 days after the Closing Date, Purchaser shall deliver to Seller
      copies of the Asset Acquisition Statement, reflecting such comments received
      from Seller that Purchaser considered in good faith, and in its reasonable
      discretion chooses to incorporate. Purchaser shall prepare and deliver to Seller
      from time to time revised copies of the Asset Acquisition Statement (the
“Revised
      Statements”)
      so as
      to report any matters on the Asset Acquisition Statement that need updating
      (including purchase price adjustments, if any). The Purchase Price paid by
      Purchaser for the Purchased Assets, and Assumed Liabilities (to the extent
      included in the amount realized for federal income tax purposes), shall be
      allocated in accordance with the Asset Acquisition Statement or, if applicable,
      the last Revised Statements, provided by Purchaser to Seller, and all income
      Tax
      Returns and reports filed by Purchaser and Seller shall be prepared consistently
      with such allocation; provided, that (i) Purchaser’s reported cost for the
      Purchased Assets may be greater than the amount allocated hereunder to reflect
      Purchaser’s acquisition costs not included in the total amount so allocated, and
      (ii) Seller’s reported amount realized may be less than the amount allocated
      hereunder to reflect Seller’s costs that reduce the amount realized. For
      purposes of this Section
      2.8,
      the
      Purchased Assets include the covenant not to compete as set forth in
Section
      7.7.

     

    2.9  Right
      to Control Payment.
      Purchaser shall have the right, but not the obligation, to make any payment
      due
      from Seller or the Subsidiaries with respect to any Excluded Liabilities which
      are not paid by Seller or the Subsidiaries within five Business Days following
      written request for payment from Purchaser; provided, that if Seller or the
      Subsidiaries advise Purchaser in writing during such five Business Day period
      that a good faith payment dispute exists or Seller or the Subsidiaries have
      valid defenses to non-payment with respect to such Excluded Liability, then
      Purchaser shall not have the right to pay such Excluded Liability. Seller and
      the Subsidiaries agree to reimburse Purchaser promptly and in any event within
      five Business Days following written notice of such payment by Purchaser for
      the
      amount of any payment made by Purchaser pursuant to this Section
      2.9.

     

    2.10  Proration
      of Certain Expenses.
      Subject
      to Section
      11.2
      with
      respect to Taxes, all expenses and other payments in respect of all rents and
      other payments due under the Real Property Leases and any other leases
      constituting part of the Purchased Assets shall be prorated between Seller
      and
      the Subsidiaries, on the one hand, and Purchaser, on the other hand, as of
      the
      Closing Date. Seller shall be responsible for all rents (including any
      percentage rent, additional rent and any accrued tax and operating expense
      reimbursements and escalations), charges and other payments of any kind accruing
      during any period under the Real Property Leases or any such other leases up
      to
      and including the Closing Date. Purchaser shall be responsible for all such
      rents, charges and other payments accruing during any period under the Real
      Property Leases (other than the Excluded Real Property Leases) or any such
      other
      leases that are Purchased Assets after the Closing Date. Purchaser shall pay
      the
      full amount of any invoices received by it and shall submit a request for
      reimbursement to Seller for Seller’s pro rata share of such expenses, along with
      any supporting documentation that Seller may reasonably request, and Seller
      shall pay the full amount of any invoices received by it and Purchaser shall
      reimburse Seller for Purchaser’s share of such expenses.

     

    2.11  Copies
      and Access to Documents.
      Seller
      may retain for its records and not for use, disclosure, sale or other
      dissemination to any Person or in any manner, except for any purpose reasonably
      related to Seller’s prior ownership of the Business, one copy of all of the
      Documents that constitute Purchased Assets. For a period of two years from
      the
      Closing Date, Purchaser agrees that it shall preserve and keep the Documents
      which constitute Purchased Assets and shall make such Documents available to
      Seller as may be reasonably required by Seller in connection with any legitimate
      business purpose including, among other things, any insurance claims by, legal
      proceedings by or against, or governmental investigations of, Seller or any
      of
      its Affiliates, or in order to enable Seller to comply with its obligations
      under this Agreement, subject in all cases to the restrictions, prohibitions
      and
      limitations set forth in this Agreement. 

     

    
      
         

      

      
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    ARTICLE
      III

     

    CONSIDERATION

     

    3.1  Purchase
      Price.
      The
purchase
      price (the “Purchase
      Price”)
      shall
      be an amount equal to the difference between (a) the sum of (i) the book value
      of the Purchased Assets as of the Closing Date less the book value of the
      Assumed Liabilities as of the Closing Date determined in accordance with GAAP
      applied on a consistent basis with the same accounting principles and practices
      used by Seller in the preparation of the Balance Sheet (but only to the extent
      consistent with GAAP) (the “Book
      Value”);
      plus
      (ii)
      Eight Million Dollars ($8,000,000) (the “Premium”);
      plus
      (iii)
      the sum of (A) the product obtained by multiplying (x) the aggregate principal
      balance of Pipeline Loans that fund within 60 days after the Closing Date by
      (y)
      0.0025 plus
      (B) the
      Aggregate Pipeline Loan Adjustment (the “Pipeline
      Premium”)
      and
      (b) the sum of (i) $936,371 plus
      (ii) the
      Excess Severance Payments. 

     

    3.2  Estimated
      Purchase Price.
      Seller
      shall furnish to Purchaser, at least five days prior to the Closing, an
      estimated balance sheet of the Business as of the opening of business on the
      Closing Date (the “Estimated
      Closing Balance Sheet”)
      and a
      statement detailing the estimated calculation of the Purchase Price
      (“Estimated
      Purchase Price”).
      The
      Estimated Purchase Price shall equal the difference between (a) the sum of
      (i)
      the Book Value as reflected in the Estimated Closing Balance Sheet (the
“Estimated
      Book Value”),
      plus
      (ii) the
      Premium, plus
      (iii)
      the product obtained by multiplying (x) the product obtained by multiplying
      (A)
      the aggregate principal balance of Pipeline Loans set forth on the Estimated
      Closing Balance Sheet by (B) 0.0025, by (y) .7 (the “Estimated
      Pipeline Premium”)
      and
      (b) the sum of (i) $936,371 plus
      (ii) the
      Excess Severance Escrow Amount. The Final Purchase Price shall be finally
      determined following the Closing in accordance with Section
      3.4
      and
Exhibit
      3.4
      attached
      hereto.

     

    3.3  Closing
      Payment.
      Purchaser
      agrees to pay to Seller (the “Closing
      Payment”)
      the
      difference between (x) the Estimated Purchase Price and (y) the difference
      between (i) the Escrow Amount, and (ii) the Excess Severance Escrow Amount,
      at
      the Closing by wire transfer of immediately available funds to an account of
      Seller designated to Purchaser at least five Business Days prior to the Closing.
      

     

    3.4  Final
      Book Value and Final Pipeline Premium Calculation. 
      Upon the
      earlier to occur of (i) the Parties’ agreement (or deemed agreement pursuant to
Section
      (b) of Exhibit 3.4
      attached
      hereto) with respect to the calculation of the Final Book Value and Final
      Pipeline Premium and (ii) the delivery of any report of the Independent
      Accountant as provided in Section
      (c) of Exhibit 3.4
      attached
      hereto with respect to the Final Book Value and the Final Pipeline Premium,
      as
      applicable:

     

    (a)  if
      the
      Estimated Book Value is greater than the Final Book Value or the Estimated
      Pipeline Premium is greater than the Final Pipeline Premium, and the amount
      of
      such difference is greater than the Book Value Escrow Amount or Pipeline Premium
      Escrow Amount, as applicable, then the Book Value Escrow Amount or Pipeline
      Premium Escrow Amount, as applicable, shall be reduced to zero and the Escrow
      Agent shall disburse the Book Value Escrow Amount or Pipeline Premium Escrow
      Amount, as applicable, to Purchaser by wire transfer of immediately available
      funds to such account or accounts of Purchaser as Purchaser specifies in writing
      to the Escrow Agent in the manner specified in the Escrow Agreement for the
      delivery of notices, and Seller shall pay to Purchaser, within five Business
      Days after the earlier to occur of the events described in clauses (i) and
      (ii)
      of the first sentence of this Section
      3.4,
      the
      amount by which the difference between the Estimate Book Value and Final Book
      Value or Estimated Pipeline Premium and Final Pipeline Premium, as applicable,
      exceeds the Book Value Escrow Amount or Pipeline Premium Escrow Amount, as
      applicable, plus simple interest on the amount of such difference from the
      Closing Date to the date of payment at an interest rate equal to six percent
      (6.0%) per annum by wire transfer of immediately available funds to such account
      or accounts of Purchaser as Purchaser specifies in writing to Seller in the
      manner specified herein for the delivery of notices;

     

    
      
         

      

      
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    (b)  if
      the
      Estimated Book Value is greater than the Final Book Value or the Estimated
      Pipeline Premium is greater than the Final Pipeline Premium, and the amount
      of
      such difference is less than the Book Value Escrow Amount or Pipeline Premium
      Escrow Amount, as applicable, then the Book Value Escrow Amount or Pipeline
      Premium Escrow Amount, as applicable, shall be reduced by the amount of such
      difference; or

     

    (c)  if
      the
      Final Book Value is greater than the Estimated Book Value or the Final Pipeline
      Premium is greater than the Estimated Pipeline Premium, then (A) Purchaser
      shall
      pay to Seller, within five Business Days after the earlier to occur of the
      events described in clauses (i) and (ii) of the first sentence of this
Section
      3.4,
      the
      amount of the difference between the Estimated Book Value and the Final Book
      Value or between the Estimated Pipeline Premium and the Final Pipeline Premium,
      as applicable, plus simple interest on the amount of such difference from the
      Closing Date to the date of payment at an interest rate equal to six percent
      (6.0%) per annum and (B) the remaining Book Value Escrow Amount, if any, and
      the
      remaining Pipeline Premium Escrow Amount, if any, shall be disbursed by wire
      transfer of immediately available funds to such account or accounts of Seller
      as
      Seller specifies in writing to the Escrow Agent in the manner specified in
      the
      Escrow Agreement for the delivery of notices.

     

    The
      Parties agree that in the event that the Book Value Escrow Amount or Pipeline
      Premium Escrow Amount are reduced pursuant to Sections
      3.4(a)
      or
3.4(b),
      then
      the amount by which the Book Value Escrow Amount or Pipeline Premium Escrow
      Amount is reduced shall be disbursed to Purchaser, and the remainder of the
      Book
      Value Escrow Amount or Pipeline Premium Escrow Amount shall be disbursed to
      Seller, in either case by wire transfer of immediately available funds to such
      account or accounts of Seller or Purchaser as Seller or Purchaser specifies
      in
      writing to the Escrow Agent in the manner specified in the Escrow Agreement
      for
      the delivery of notices. Exhibit
      3.4
      attached
      hereto sets forth certain defined terms used in this Section
      3.4,
      as well
      as certain agreements and procedures relating to the manner in which the Final
      Book Value and Final Pipeline Premium are to be determined.

     

    
      
         

      

      
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    3.5  Escrow.

     

    (a)  No
      later
      than ten days prior to the Closing Date, Purchaser and Seller shall mutually
      agree upon a financial institution, having a combined capital and surplus of
      at
      least $50,000,000 and subject to supervision or examination by Federal or state
      authority, to act as escrow agent (the “Escrow
      Agent”)
      with
      respect to the Escrow Amount. On or before the Closing Date, Seller and
      Purchaser shall enter into an agreement in substantially the form attached
      hereto as Exhibit
      C
      with the
      Escrow Agent (the “Escrow
      Agreement”)
      pursuant to which the Escrow Agent shall agree to hold and disburse the Escrow
      Amount, for the benefit of Seller and Purchaser, in accordance with the terms
      and conditions of this Agreement and the Escrow Agreement.

     

    (b)  On
      the
      Closing Date, Purchaser shall deposit with the Escrow Agent Two Million Three
      Hundred Thousand Dollars ($2,300,000) in cash (the “Escrow
      Amount”)
      for
      disbursement in accordance with the terms of this Agreement and the Escrow
      Agreement. The Escrow Amount will consist of (i) Five Hundred Thousand Dollars
      ($500,000), which will be held in escrow exclusively for payments due to either
      Purchaser or Seller upon determination of the Final Book Value (the
“Book
      Value Escrow Amount”),
      (ii)
      Six Hundred Thousand Dollars ($600,000), which will be held in escrow
      exclusively for payments due to either Purchaser or Seller upon determination
      of
      the Final Pipeline Premium (the “Pipeline
      Premium Escrow Amount”),
      (iii)
      Six Hundred Thousand Dollars ($600,000), which will be held in escrow
      exclusively for reimbursement of Excess Severance Payments made by Purchaser
      on
      or prior to the first anniversary of the Closing Date (the “Excess
      Severance Escrow Amount”),
      and
      (iv) Six Hundred Thousand Dollars ($600,000), which will be held in escrow
      exclusively for indemnification payments pursuant to Article
      X
      hereof
      (the “Indemnification
      Escrow Amount”).
      Purchaser and Seller agree that the Escrow Amount is part of the consideration
      paid to Seller and the obligation to release the Escrow Amount to Seller is
      absolute and unconditional, subject only to the terms and conditions of this
      Agreement and the Escrow Agreement. The Escrow Agreement shall provide that
      four
      events will trigger distribution of the Escrow Amount: (i) the determination
      of
      the Final Book Value, which shall only trigger distribution of the Book Value
      Escrow Amount, (ii) the determination of the Final Pipeline Premium, which
      shall
      only trigger distribution of the Pipeline Premium Escrow Amount, (iii) the
      obligation of the Purchaser to make any Excess Severance Payment, and (iv)
      a
      finally determined claim by Purchaser for indemnification payments under
Article
      X
      of this
      Agreement, which shall only trigger distribution of the Indemnification Escrow
      Amount. In addition, distribution of the Escrow Amount may occur (i) on the
      date
      that is six months after the Closing Date if the Excess Severance Escrow Amount
      exceeds Three Hundred Thousand Dollars ($300,000), then such excess amount
      shall
      be disbursed to Seller by wire transfer of immediately available funds to such
      account or accounts of Seller as Seller specifies in writing to the Escrow
      Agent
      in the manner specified in the Escrow Agreement for the delivery of notices,
      and
      (ii) any portion of the Excess Severance Escrow Amount remaining in escrow
      on
      the first Business Day following the first anniversary of the Closing shall
      be
      disbursed to Seller by wire transfer of immediately available funds to such
      account or accounts of Seller as Seller specifies in writing to the Escrow
      Agent
      in the manner specified in the Escrow Agreement for the delivery of notices.
      Any
      portion of the Indemnification Escrow Amount remaining in escrow on the first
      Business Day following the first anniversary of the Closing shall be disbursed
      to Seller by wire transfer of immediately available funds to such account or
      accounts of Seller as Seller specifies in writing to the Escrow Agent in the
      manner specified in the Escrow Agreement for the delivery of notices; provided,
      that if Purchaser has submitted a notice for indemnification on or prior to
      the
      first anniversary of the Closing and such indemnification claim is not finally
      determined until after the first anniversary of the Closing, then the
      Indemnification Escrow Amount shall remain subject to such indemnification
      claim
      and any remaining portion of the Indemnification Escrow Amount shall not be
      disbursed to Seller until after such indemnification claim shall have been
      finally determined and any indemnification payments to Purchaser have been
      made.
      The Escrow Agreement shall further provide that disbursement of the Book Value
      Escrow Amount and Pipeline Premium Escrow Amount shall be made in accordance
      with Section
      3.4
      and in
      accordance with the terms and conditions of the Escrow Agreement. Upon
      disbursement of the Escrow Amount (or such lesser amount of the Escrow Amount
      pursuant to the terms and conditions of this Agreement and the Escrow Agreement)
      to Seller or Purchaser in accordance with this Agreement, Purchaser shall have
      no other obligation to Seller with respect to the Escrow Amount.

     

    
      
         

      

      
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    ARTICLE
      IV

     

    CLOSING
      AND TERMINATION

     

    4.1  Closing
      Date.
      Subject
      to the satisfaction of the conditions set forth in Sections
      9.1
      and
9.2
      hereof
      (or the waiver thereof by the party entitled to waive that condition), the
      closing of the purchase and sale of the Purchased Assets and the assumption
      of
      the Assumed Liabilities provided for in Article II
      hereof
      (the “Closing”)
      shall
      take place at the offices of Alston & Bird LLP located at 90 Park Avenue,
      New York, New York 10016 (or at such other place as the parties may designate
      in
      writing) at 10:00 a.m. (New York City time) on a date to be specified by the
      parties, which date shall be the later of the date that is (i) 60 days following
      the date hereof, and (ii) the third Business Day after satisfaction or waiver
      of
      the conditions set forth in Article
      IX
      (other
      than conditions that by their nature are to be satisfied at the Closing, but
      subject to the satisfaction or waiver of such conditions), unless another time
      or date, or both, are agreed to in writing by the parties hereto. The date
      on
      which the Closing shall be held is referred to in this Agreement as the
“Closing
      Date.”

     

    4.2  Termination
      of Agreement.
      This
      Agreement may be terminated prior to the Closing as follows:

     

    (a)  At
      the
      election of Seller or Purchaser, on or after May 1, 2007, if the Closing shall
      not have occurred by the close of business on such date; provided, that the
      terminating party is not in material breach of any of its representations,
      warranties, covenants or agreements hereunder;

     

    (b)  by
      mutual
      written consent of Seller and Purchaser;

     

    (c)  by
      Purchaser upon written notice from Purchaser to Seller that there has been
      an
      event, change, occurrence or circumstance that has had or has a reasonable
      likelihood of having a Material Adverse Effect;

     

    (d)  by
      Seller
      or Purchaser if there shall be in effect a final nonappealable Order of a
      Governmental Body of competent jurisdiction restraining, enjoining or otherwise
      prohibiting the consummation of the transactions contemplated hereby, it being
      agreed that the parties hereto shall promptly appeal any adverse determination
      which is not nonappealable (and pursue such appeal with reasonable
      diligence);

     

    (e)  by
      Purchaser, if there shall have been a material breach by Seller of any
      representation, warranty, covenant or agreement of Seller set forth in this
      Agreement, which breach would give rise to a failure of a condition set forth
      in
Sections
      9.1(a)
      or
9.1(b)
      and is
      incapable of being cured or, if capable of being cured, shall not have been
      cured within 30 days following receipt by Seller of notice of such breach from
      Purchaser; or

     

    (f)  by
      Seller, if there shall have been a material breach by Purchaser of any
      representation, warranty, covenant or agreement of Purchaser set forth in this
      Agreement, which breach would give rise to a failure of a condition set forth
      in
Sections
      9.2(a)
      or
9.2(b)
      and is
      incapable of being cured or, if capable of being cured, shall not have been
      cured within 30 days following receipt by Purchaser of notice of such breach
      from Seller.

     

    
      
         

      

      
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    4.3  Effect
      of Termination.
      In the
      event that this Agreement is validly terminated as provided herein, then each
      of
      the parties shall be relieved of their duties and obligations arising under
      this
      Agreement after the date of such termination and such termination shall be
      without liability to Purchaser or Seller; provided, that (a) if this Agreement
      is terminated by Purchaser pursuant to Section
      4.2(e),
      Seller
      shall, or if this Agreement is terminated by Seller pursuant to Section
      4.2(f),
      Purchaser shall, in addition to any other Liabilities accruing hereunder, be
      liable for and pay within five Business Days of such termination (i) the cost
      of
      all filing or other fees paid by the terminating party to any Governmental
      Body
      in respect of the transactions contemplated by this Agreement and (ii) an amount
      equal to One Million Five Hundred Thousand Dollars ($1,500,000); (b) the
      obligations of the parties set forth in Sections
      7.7(c), (d) and (e)
      and
Articles
      XI
      and
XII
      hereof
      shall survive any such termination and shall be enforceable hereunder; and
      (c)
      nothing in this Section
      4.3
      shall
      relieve Purchaser or Seller of any Liability for a breach of this Agreement
      prior to the effective date of such termination.

     

    ARTICLE
      V

     

    REPRESENTATIONS
      AND WARRANTIES OF SELLER
      AND
      PARENT

     

    Seller
      and Parent, as applicable, hereby represent and warrant to Purchaser
      that:

     

    5.1  Organization
      and Good Standing.
      

     

    (a)  Each
      of
      Parent and Seller is duly organized, validly existing and in good standing
      under
      the laws of its respective jurisdiction of incorporation or organization, with
      full power and authority to conduct its business as it is now being conducted,
      to own or use the properties or assets that it purports to own or use, and
      to
      perform all of its respective obligations under the Purchased Contracts and
      the
      Material Contracts. Seller is duly qualified or licensed to do business as
      a
      foreign limited liability company and is in good standing as a foreign limited
      liability company in each jurisdiction in which either the ownership or use
      of
      the properties owned or used by it, or the nature of the activities conducted
      by
      it, requires such licensing, qualification or good standing, except for such
      failures to so qualify that would not, individually or in the aggregate,
      reasonably be expected to have a Material Adverse Effect on Seller.

     

    (b)  Parent
      and Seller have made available or delivered to Purchaser a true and complete
      copy of each of their certificates of incorporation or organization (or
      equivalent charter document), bylaws and limited liability company agreement,
      each as amended to date, and such documents are in full force and
      effect.

     

    5.2  Authorization
      of Agreement.
      Parent
      and Seller have all requisite power, authority and legal capacity to execute
      and
      deliver this Agreement and Parent, Seller and each of the Subsidiaries have
      all
      requisite power, authority and legal capacity to execute and deliver each other
      agreement, document, or instrument or certificate contemplated by this Agreement
      to be executed by Parent, Seller or the Subsidiaries in connection with the
      consummation of the transactions contemplated by this Agreement (the
“Seller
      Documents”),
      to
      perform their respective obligations hereunder and thereunder and to consummate
      the transactions contemplated hereby and thereby. The execution and delivery
      of
      this Agreement and the Seller Documents and the consummation of the transactions
      contemplated hereby and thereby have been duly authorized by all requisite
      corporate action on the part of Parent, Seller and each of the Subsidiaries.
      The
      approval of the stockholders of Parent is not required in connection with the
      execution and delivery of this Agreement by Parent or Seller or the consummation
      of the transactions contemplated hereby. This Agreement has been, and each
      of
      the Seller Documents will be at or prior to the Closing (other than such Seller
      Documents which are required to be duly and validly executed and delivered
      by
      Parent, Seller or any Subsidiary on a date after the Closing Date), duly and
      validly executed and delivered by Parent, Seller and each of the Subsidiaries
      which is a party thereto and (assuming the due authorization, execution and
      delivery by the other parties hereto and thereto) this Agreement constitutes,
      and each of the Seller Documents when so executed and delivered will constitute,
      legal, valid and binding obligations of Parent, Seller and each applicable
      Subsidiary, as the case may be, enforceable against it in accordance with their
      respective terms, subject to applicable
      bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
      creditors’ rights and remedies generally, and subject, as to enforceability, to
      general principles of equity, including principles of commercial reasonableness,
      good faith and fair dealing (regardless of whether enforcement is sought in
      a
      proceeding at law or in equity).

     

    
      
         

      

      
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    5.3  Conflicts;
      Consents of Third Parties. 

     

    (a)  Except
      as
      set forth in Section
      5.3(a)
      of the
      Disclosure Memorandum, none of the execution and delivery by Parent or Seller
      of
      this Agreement or by Parent, Seller and the Subsidiaries of the Seller
      Documents, the consummation of the transactions contemplated hereby or thereby,
      or compliance by Parent, Seller and the Subsidiaries with any of the provisions
      hereof or thereof will conflict with, or result in any violation of or default
      (with or without notice or lapse of time, or both) under, or give rise to a
      right of termination, cancellation or acceleration of any obligation or to
      loss
      of a material benefit under, or give rise to any obligation of Seller or the
      Subsidiaries to make any payment under, or to the increased, additional,
      accelerated or guaranteed rights or entitlements of any Person under, or result
      in the creation of any Liens upon any of the properties or assets of Seller
      or
      the Subsidiaries under, any provision of (i) the certificate of
      incorporation and by-laws or comparable organizational documents of Seller
      or
      any Subsidiary; (ii) any Contract or Permit to which Seller or any
      Subsidiary is a party or by which any of the properties or assets of Seller
      or
      any Subsidiary are bound; (iii) any Order of any Governmental Body applicable
      to
      Seller or any Subsidiary or by which any of the properties or assets of Seller
      or any Subsidiary are bound; or (iv) any applicable Law, except, with respect
      to
      clauses (ii) - (iv) above, for any such conflict, violation, default, right
      of
      termination, cancellation or acceleration that would not have, or be reasonably
      likely to have, a Material Adverse Effect.

     

    (b)  No
      Consent, waiver, approval, Permit or authorization of, or filing with,
      or notification to, any Person or Governmental Body is required on the part
      of Parent, Seller or any Subsidiary in connection with (i) the execution
      and delivery of this Agreement or the Seller Documents, the compliance by
      Parent, Seller or any Subsidiary with any of the provisions hereof or thereof,
      the consummation of the transactions contemplated hereby or thereby or the
      taking by Parent, Seller or any Subsidiary of any other action contemplated
      hereby or thereby or (ii) the continuing validity and effectiveness
      immediately following the Closing of any Contract or Permit of Seller or any
      Subsidiary, except (A) as set forth in Section
      5.3(b)
      of the
      Disclosure Memorandum and (B) where the failure to obtain such Consents,
      waivers, approvals, Permits or authorizations or to make such filings or
      notifications, would not result in, or be reasonably likely to result in, a
      Material Adverse Effect.

     

    5.4  Financial
      Statements.

     

    (a)  Seller
      has delivered to Purchaser copies of (i) the audited consolidated balance sheets
      of Seller and the Subsidiaries as at December 31, 2005 and 2004 and the related
      audited consolidated statements of income and of cash flows of Seller and the
      Subsidiaries for the years then ended and (ii) the unaudited consolidated
      balance sheets of Seller and the Subsidiaries as at each quarter end from March
      31, 2006 through December 31, 2006 and the related consolidated statements
      of
      income and cash flows of Seller and the Subsidiaries for each such quarter
      (such
      audited and unaudited statements, including the related notes and schedules
      thereto, are referred to herein as the “Financial
      Statements”).
      Each
      of the Financial Statements is complete and correct in all material respects,
      has been prepared in accordance with GAAP applied on a consistent basis
      throughout the periods presented (except as may be indicated in the notes
      thereto), subject, in the case of unaudited Financial Statements, to normal
      recurring year-end adjustments (the effect of which will not, individually
      or in
      the aggregate, be material in amount or effect) and the absence of notes (that,
      if presented, would not differ materially from those included in the audited
      Financial Statements), and presents fairly in all material respects the
      consolidated financial position, results of operations and cash flows of Seller
      and the Subsidiaries as at the dates and for the periods indicated.

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    For
      the
      purposes hereof, the unaudited consolidated balance sheet of Seller and the
      Subsidiaries as at December 31, 2006 is referred to as the “Balance
      Sheet”
and
      December 31, 2006 is referred to as the “Balance
      Sheet Date.”

     

    (b)  Seller
      and the Subsidiaries make and keep books, records and accounts which, in
      reasonable detail, accurately and fairly reflect the acquisitions and
      dispositions of their respective assets. Seller and the Subsidiaries maintain
      systems of internal accounting controls sufficient to provide reasonable
      assurances that: (i) transactions are executed in accordance with management’s
      general or specific authorization; (ii) transactions are recorded as necessary
      to permit the preparation of financial statements in conformity with GAAP and
      to
      maintain accountability for assets; (iii) access to assets is permitted
      only in accordance with management’s general or specific authorization; and
      (iv) the recorded accountability for assets is compared with the actual
      levels at reasonable intervals and appropriate action is taken with respect
      to
      any differences. The Financial Statements were compiled and will be compiled
      from and are and will be in accordance with the books and records of Seller.
      The
      books and records (including the books of account, minute books, stock record
      books and other records) of Seller, all of which have been made available to
      Purchaser, are true and complete, have been maintained in accordance with sound
      business practices and accurately present and reflect in all material respects
      all of the transactions and actions therein described. At the Closing, all
      of
      those books and records shall be in the possession of Seller.

     

    (c)  Seller
      has provided to Purchaser copies of all issued auditors’ reports, letters to
      management regarding accounting practices and systems of internal control,
      and
      responses to such letters from management, in each case to the extent relating
      to the Business and the operation thereof, whether the same are issued to
      Seller, Parent or any of their respective Affiliates.

     

    5.5  No
      Undisclosed Liabilities.
      Neither
      Seller nor any Subsidiary has any indebtedness, obligations or Liabilities
      of
      any kind other than those (i) that do not arise out of or relate to the
      Business, (ii) fully reflected in, reserved against or otherwise described
      in
      the Balance Sheet or the notes thereto or (iii) that are immaterial to Seller
      or
      any Subsidiary and incurred in the Ordinary Course of Business since the Balance
      Sheet Date.
      Parent
      has no material Liabilities secured by the membership interests or assets of
      Seller or which may give rise to any action, Order or Legal Proceeding to which
      Seller or the assets of Seller may become subject.

     

    5.6  Title
      to Purchased Assets; Sufficiency.
      Seller
      and the Subsidiaries own and have good title to each of the Purchased Assets,
      free and clear of all Liens other than Permitted Exceptions. The Purchased
      Assets constitute all of the assets used in or held for use in the Business
      and
      are sufficient for Purchaser to conduct the Business from and after the Closing
      Date in the Ordinary Course of Business and without interruption.

     

    5.7  Absence
      of Certain Developments.
      Except
      as expressly contemplated by this Agreement or as set forth in Section
      5.7
      of the
      Disclosure Memorandum, since the Balance Sheet Date (i) Seller has conducted
      the
      Business only in the Ordinary Course of Business and (ii) there has not occurred
      any event, change, effect or circumstance that has had or is reasonably likely
      to have a Material Adverse Effect. Without limiting the generality of the
      foregoing, except as set forth in Section
      5.7
      of the
      Disclosure Memorandum, since the Balance Sheet Date:

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    (i)  neither
      Seller nor any Subsidiary has incurred any Liabilities with respect to the
      Business or the Purchased Assets of any nature other than items incurred in
      the
      regular and Ordinary Course of Business, consistent with past practice, or
      increased (or experienced any change in the assumptions underlying or the
      methods of calculating) any bad debt, contingency, or other reserve with respect
      to the Business or the Purchased Assets, other than in the Ordinary Course
      of
      Business consistent with past practice;

     

    (ii)  there
      has
      not been any damage, destruction or loss, whether or not covered by insurance,
      with respect to the Seller Properties or any tangible personal property of
      Seller or the Subsidiaries that constitutes a Purchased Asset having a
      replacement cost of more than $50,000 for any single loss or $100,000 for all
      such losses;

     

    (iii)  neither
      Seller nor any Subsidiary has (A) except as set forth in Section
      5.7(iii)
      of the
      Disclosure Memorandum, increased the salary, bonus or other compensation (other
      than compensation increases not exceeding five percent (5%) per annum and
      otherwise made in the Ordinary Course of Business) of any Employee; (B)
      increased the benefits, waivers or variations for the benefit of any such
      Employee, or otherwise amended, or made payments or grants of awards that were
      not required, under any Employee Benefit Plan, or adopted or executed of any
      new
      Employee Benefit Plan (other than any such events in the Ordinary Course of
      Business); or (C) established, assumed, adopted or amended any collective
      bargaining agreement or recognized any labor organization as the collective
      bargaining representative of any Employees;

     

    (iv)  except
      as
      set forth in Section
      8.1(h)(1)
      and
Section
      8.1(h)(2)
      of the
      Disclosure Memorandum, neither Seller nor any Subsidiary has executed any
      employment, severance, change in control or similar agreements, other than
      in
      the Ordinary Course of Business;

     

    (v)  there
      has
      not been any (A) material change in the business organization of Seller
      (including all agency, brokerage and similar relationships of the Business);
      (B)
      change in the services provided by the advisors, managers, officers, Employees,
      underwriters, agents, brokers or sales representatives of Seller; (C) change
      in
      the relationships and goodwill with customers, suppliers, correspondents,
      investors, credit enhancers, attorneys, licensors, landlords, creditors,
      employees, agents, brokers, and others having business relationships with
      Seller; or (D) material change in the existing levels of insurance coverage
      of
      Seller, except, with respect to clauses (B) and (C), changes that have not
      had,
      and are not reasonably likely to have, a Material Adverse Effect;

     

    (vi)  neither
      Seller nor any Subsidiary has failed to pay and discharge current Liabilities
      except for Liabilities not material in amount that are disputed in good faith
      by
      appropriate proceedings;

     

    (vii)  except
      as
      set forth in Section
      5.7(vii)
      of the
      Disclosure Memorandum, neither Seller nor any Subsidiary has made any material
      capital expenditure or commitment for additions to property, plant, equipment,
      intangible property or capital assets or for any other purpose with respect
      to
      the Seller Properties or the Purchased Assets, other than for emergency repairs
      or replacement;

     

    (viii)  Seller
      has not made any capital investment in, any loan to, or any acquisition of
      the
      securities or assets of, any other Person with respect to the Business or the
      Purchased Assets other than in the Ordinary Course of Business;

     

    
      
         

      

      
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    (ix)  neither
      Seller nor any Subsidiary has permitted, allowed, or suffered any of its
      properties or assets (real, personal or mixed, tangible or intangible) that
      constitute Purchased Assets to be subjected to any Lien, other than Permitted
      Exceptions;

     

    (x)  neither
      Seller nor any Subsidiary has acquired any assets or sold, assigned,
      transferred, conveyed, leased or otherwise disposed of any assets of Seller
      or
      any Subsidiary with respect to the Business or the Purchased Assets, except
      for
      assets acquired or sold, assigned, transferred, conveyed, leased or otherwise
      disposed of in the Ordinary Course of Business;

     

    (xi)  neither
      Seller nor any Subsidiary has discharged or satisfied any Lien, or paid any
      obligation or liability (fixed or contingent), with respect to the Business
      or
      the Purchased Assets except in the Ordinary Course of Business and which, in
      the
      aggregate, would not be material to the Business taken as a whole;

     

    (xii)  neither
      Seller nor any Subsidiary has canceled or compromised any debt or claim with
      respect to the Business or the Purchased Assets or amended, modified, extended,
      canceled, terminated, relinquished, waived or released any Contract or right
      with respect to the Business or the Purchased Assets except for immaterial
      amendments or modifications to such Contract;

     

    (xiii)  neither
      Seller nor any Subsidiary has written down or written up the value of any
      Purchased Assets with a book value on the Balance Sheet in excess of $10,000,
      except for write-downs, write-ups, and write-offs in the Ordinary Course of
      Business, none of which is material in amount;

     

    (xiv)  neither
      Seller nor any Subsidiary has instituted or settled any material Legal
      Proceeding with respect to the Business or the Purchased Assets; 

     

    (xv)  Seller
      has not granted any license or sublicense of any rights under or with respect
      to
      any Purchased Intellectual Property; and

     

    (xvi)  Seller
      has not agreed, committed, arranged or entered into any understanding to do
      anything set forth in this Section
      5.7.

     

    5.8  Taxes.
       

     

    (a)  (i)
      All
      material Tax Returns that are or were required to be filed by or with respect
      to
      Seller or any of its Subsidiaries, either separately or as a member of an
      affiliated, combined, consolidated or unitary group, have been filed on a timely
      basis (taking into account all extensions of due dates) in accordance with
      applicable Law, (ii) all Tax Returns referred to in clause (i) are true and
      complete in all material respects, (iii) all material amounts of Taxes due
      for
      the periods covered by such Tax Returns (whether or not shown on any Tax
      Return), including any Taxes payable pursuant to any assessment made by the
      IRS
      or other Taxing Authorities in respect of such periods, have been paid in full,
      and (iv) all material amounts of estimated Taxes required to be paid in respect
      of Seller or any of its Subsidiaries have been paid in full when due in
      accordance with applicable Law. Seller has delivered or made available to
      Purchaser true and complete copies of all income Tax Returns and other material
      Tax Returns filed by Seller, any of its Subsidiaries, and any affiliated,
      combined, consolidated or unitary group of which Seller or any of its
      Subsidiaries is or was a member since the taxable year ended December 31,
      2004.

     

    (b)  (i)
      There
      is no material dispute or claim concerning any Tax liability of Seller or any
      of
      its Subsidiaries claimed or raised by any Taxing Authority in writing or of
      which any director or officer (or employee responsible for tax matters) of
      Seller is aware. All material deficiencies asserted or assessments made as
      a
      result of an examination of any Tax Return filed by Seller or any of its
      Subsidiaries have been paid in full, and no material issues that were raised
      by
      any Taxing Authority in connection with any such examination are currently
      pending. Neither Seller nor any of its Subsidiaries has given or been requested
      to give a currently effective waiver (or is subject to such a waiver given
      by
      any other Person) of any statute of limitations relating to Taxes or agreed
      to
      any currently effective extension of time with respect to a Tax assessment
      or
      deficiency. No unresolved claim has ever been made by an authority in any
      jurisdiction in which Seller or any of its Subsidiaries does not file Tax
      Returns that Seller or any of its Subsidiaries is or may be subject to taxation
      in such jurisdiction. There are no unresolved examinations of all Tax Returns,
      including a reasonably detailed description of the nature of each such
      examination, the adjustments made to such Tax Returns, and the resulting
      deficiencies asserted or assessments made by the IRS or other appropriate Taxing
      Authority.

     

    
      
         

      

      
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    (c)  No
      Tax is
      required to be withheld pursuant to Section 1445 of the Code as a result of
      the
      transfer contemplated by this Agreement. 

     

    (d)  There
      are
      no Liens, except for Permitted Exceptions, relating or attributable to Taxes
      with respect to, or in connection with, the Purchased Assets. There is no basis
      for the assertion of any claim for Taxes (excluding Taxes of Purchaser and
      its
      Affiliates) which, if adversely determined, would or is reasonably likely to
      result in the imposition of any Lien on the Purchased Assets or otherwise
      adversely affect Purchaser, the Business or Purchaser’s use of such
      assets.

     

    (e)  All
      material amounts of Taxes that Seller is or was required by Law to withhold
      or
      collect have been duly withheld or collected and, to the extent required by
      applicable Law, have been paid to the proper Governmental Body or other Person
      and all related Tax Returns, including Forms W-2 and 1099, have been properly
      completed and timely filed.

     

    5.9  Real
      Property.

     

    (a)  Section
      5.9(a)
      of the
      Disclosure Memorandum sets forth an accurate and complete list of all real
      property and interests in real property (including the location of the property,
      monthly rent, lease expiration and square footage), other than the real property
      subject to the Excluded Real Property Leases, leased by Seller and the
      Subsidiaries (individually, a “Real
      Property Lease”
and
      the
      real properties specified in such leases being referred to herein individually
      as a “Seller
      Property”
and
      collectively as the “Seller
      Properties”)
      as
      lessee or lessor which are currently used or currently held for use in
      connection with the Business by Seller or a Subsidiary and are necessary for
      the
      continued operation of the Business by Seller and the Subsidiaries as the
      Business is currently conducted. All of the Seller Properties, buildings,
      fixtures and improvements thereon owned or leased by Seller or a Subsidiary
      are
      in good operating condition and repair (subject to normal wear and tear). Seller
      has delivered or otherwise made available to Purchaser true, correct and
      complete copies of the Real Property Leases, together with all amendments,
      modifications or supplements thereto, including any assignments
      thereof.

     

    (b)  Seller
      and the Subsidiaries have a valid and enforceable leasehold interest under
      each
      of the Real Property Leases, subject to applicable bankruptcy, insolvency,
      reorganization, moratorium and similar laws affecting creditors’ rights and
      remedies generally and subject, as to enforceability, to general principles
      of
      equity (regardless of whether enforcement is sought in a proceeding at law
      or in
      equity). Each of the Real Property Leases is in full force and effect, and
      neither Seller nor any Subsidiary has received or given any notice of any
      default or event that with notice or lapse of time, or both, would constitute
      a
      default by Seller or any Subsidiary under any of the Real Property Leases and,
      to the Knowledge of Parent and Knowledge of Seller, no other party is in default
      thereof, and no party to any of the Real Property Leases has exercised any
      termination rights with respect thereto.

     

    
      
         

      

      
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    (c)  Seller
      and the Subsidiaries have all material certificates of occupancy and Permits
      of
      any Governmental Body necessary or useful for the current use and operation
      of
      each Seller Property, and Seller and the Subsidiaries have fully complied with
      all material conditions of the Permits applicable to them, except, in each
      case,
      where the failure to have such certificates or Permits has not had, and is
      not
      reasonably likely to have, a Material Adverse Effect. No default or violation,
      or event that with the lapse of time or giving of notice or both would become
      a
      default or violation, has occurred in the due observance of any Permit, except
      where such default or violation has not had, and is not reasonably likely to
      have, a Material Adverse Effect. 

     

    (d)  There
      does not exist any actual or, to the Knowledge of Parent and Knowledge of
      Seller, threatened or contemplated condemnation or eminent domain proceedings
      that affect any Seller Property or any part thereof, and neither Parent nor
      Seller has not received any notice, oral or written, of the intention of any
      Governmental Body or other Person to take or use all or any part
      thereof.

     

    (e)  Neither
      Seller nor any Subsidiary has received any notice from any insurance company
      that has issued a policy with respect to any Seller Property requiring
      performance of any structural or other repairs or alterations to such Seller
      Property.

     

    (f)  Neither
      Seller nor any Subsidiary owns or holds, and is not obligated under or a party
      to, any option, right of first refusal or other contractual right to purchase,
      acquire, sell, assign or dispose of any real estate or any portion thereof
      or
      interest therein.

     

    5.10  Tangible
      Personal Property.
      

     

    (a)  Seller
      and the Subsidiaries have good and marketable title to all of the items of
      tangible personal property reflected on the Final Balance Sheet that relate
      to
      the Business or the Purchased Assets (except as sold or disposed of subsequent
      to the date thereof in the Ordinary Course of Business), free and clear of
      any
      and all Liens, other than Permitted Exceptions. All such items of tangible
      personal property which, individually or in the aggregate, are material to
      the
      operation of the Business are in good condition and in a state of good
      maintenance and repair (ordinary wear and tear excepted) and are suitable for
      the purposes used.

     

    (b)  Section
      5.10
      of the
      Disclosure Memorandum sets forth all leases of personal property (“Personal
      Property Leases”)
      involving annual payments in excess of $10,000 relating to personal property
      that is located at a Seller Property and used by Seller or any of the
      Subsidiaries in the Business or by which any of the Purchased Assets are bound.
      All of the items of personal property under the Personal Property Leases are
      in
      good condition and repair and are suitable for the purposes used, and such
      property is in all material respects in the condition required of such property
      by the terms of the lease applicable thereto during the term of the lease.
      Seller has delivered or otherwise made available to the Purchaser true, correct
      and complete copies of the Personal Property Leases, together with all
      amendments, modifications or supplements thereto. 

     

    (c)  Seller
      and the Subsidiaries have a valid and enforceable leasehold interest under
      each
      of the Personal Property Leases under which it is a lessee, subject to
      applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
      affecting creditors’ rights and remedies generally and subject, as to
      enforceability, to general principles of equity (regardless of whether
      enforcement is sought in a proceeding at law or in equity). Each of the Personal
      Property Leases is in full force and effect. There is no default under any
      Personal Property Lease by the Seller or any of the Subsidiaries or, to the
      Knowledge of Parent and Knowledge of Seller, by any other party thereto, and
      no
      event has occurred that with the lapse of time or the giving of notice or both
      would constitute a default thereunder. No party to any of the Personal Property
      Leases has exercised any termination rights with respect thereto.

     

    
      
         

      

      
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    5.11  Intellectual
      Property 

     

    (a)  Section
      5.11(a)
      of the
      Disclosure Memorandum sets forth an accurate and complete list of all Patents,
      registered Marks, pending applications for registration of Marks, unregistered
      Marks, registered Copyrights, and pending applications for registration of
      Copyrights included in the Purchased Intellectual Property. Section 5.11(a)
      of the
      Disclosure Memorandum lists (i) the jurisdictions in which each such item of
      Purchased Intellectual Property has been issued, registered, otherwise arises
      or
      in which any such application for such issuance and registration has been filed
      and (ii) the registration or application date, as applicable. 

     

    (b)  Seller
      and the Subsidiaries are the sole and exclusive owners of all right, title
      and
      interest in and to all of the Purchased Intellectual Property and the Purchased
      Intellectual Property includes each of the Copyrights in any works of authorship
      prepared by or for Seller or any Subsidiary that resulted from or arose out
      of
      any work performed by or on behalf of Seller or a Subsidiary or by any employee,
      officer, consultant or contractor of any of them. To the Knowledge of Seller
      and
      Knowledge of Parent, Seller and the Subsidiaries are the sole and exclusive
      owners of, or have valid and continuing rights to use, sell and license, as
      the
      case may be, all other Purchased Intellectual Property as the same is used,
      sold
      and licensed in the Business as presently conducted and proposed to be
      conducted, free and clear of all Liens or obligations to others.

     

    (c)  The
      Purchased Intellectual Property, the manufacturing, licensing, marketing,
      importation, offer for sale, sale or use of any products and services in
      connection with the Business as presently and as currently proposed to be
      conducted, and the present and currently proposed business practices, methods
      and operations of Seller and the Subsidiaries do not infringe, constitute an
      unauthorized use, misappropriation or violation of any Copyright, Trade Secret
      or other similar right of any Person and, to the Knowledge of Seller and
      Knowledge of Parent, do not infringe, constitute an unauthorized use of,
      misappropriate, dilute or violate any other Intellectual Property or other
      right
      of any Person (including pursuant to any non-disclosure agreements or
      obligations to which Parent or any of its Affiliates (including Seller or any
      of
      the Subsidiaries) or any of their present or former employees is a party).
      The
      Purchased Intellectual Property and the Intellectual Property Licenses include
      all of the Intellectual Property necessary and sufficient to enable Seller
      and
      the Subsidiaries to conduct the Business in the manner in which such Business
      is
      currently being conducted and proposed by Seller to be conducted.

     

    (d)  Except
      with respect to licenses of commercial off-the-shelf Software available on
      reasonable terms for a license fee of no more than $10,000, none of Parent
      or
      any of its Affiliates (including Seller or any of the Subsidiaries) is required,
      obligated, or under any Liability whatsoever, to make any payment by way of
      royalties, fees or otherwise to any owner, licensor of, or other claimant to
      any
      Purchased Intellectual Property, or other third Person, with respect to the
      use
      thereof or in connection with the conduct of the Business as currently conducted
      or proposed by Seller to be conducted.

     

    (e)  There
      are
      no Contracts (i) to which Parent or any of its Affiliates (including Seller
      or
      any of the Subsidiaries) is a party (A) granting any Intellectual Property
      License, (B) containing a covenant not to compete or otherwise limiting its
      ability to (x) exploit fully any of the Purchased Intellectual Property or
      (y)
      conduct the Business in any market or geographical area or with any Person
      or
      (ii) to which Seller or any Subsidiary is a party containing an agreement to
      indemnify any other Person against any claim of infringement, unauthorized
      use,
      misappropriation, dilution or violation of Intellectual Property. 

     

    
      
         

      

      
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    (f)  Each
      of
      the Intellectual Property Licenses is in full force and effect and is the legal,
      valid and binding obligation of the Seller and/or the Subsidiaries, enforceable
      against them in accordance with its terms, subject to applicable bankruptcy,
      insolvency, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally and subject, as to enforceability, to general
      principles of equity (regardless of whether enforcement is sought in a
      proceeding at law or in equity). Neither Seller nor any Subsidiary is in default
      under any Intellectual Property License, nor, to the Knowledge of Seller and
      Knowledge of Parent, is any other party to an Intellectual Property License
      in
      default thereunder, and no event has occurred that with the lapse of time or
      the
      giving of notice or both would constitute a default thereunder. No party to
      any
      of the Intellectual Property Licenses has exercised any termination rights
      with
      respect thereto. Seller and the Subsidiaries have, and will transfer to
      Purchaser at the Closing, good and valid title to the Intellectual Property
      Licenses, free and clear of all Liens other than Permitted Exceptions. Seller
      has delivered or otherwise made available to Purchaser true, correct and
      complete copies of all of the Intellectual Property Licenses, together with
      all
      amendments, modifications or supplements thereto.

     

    (g)  No
      Trade
      Secret or any other non-public, proprietary information included in the
      Purchased Assets material to the Business as presently conducted and proposed
      to
      be conducted has been authorized to be disclosed or has been actually disclosed
      by Parent or any of its Affiliates (including Seller or any of the Subsidiaries)
      to any of their employees or any third Person other than pursuant to a
      non-disclosure agreement restricting the disclosure and use of the Purchased
      Intellectual Property. Parent and its Affiliates (including Seller and the
      Subsidiaries) have taken adequate security measures to protect the secrecy,
      confidentiality and value of all the Trade Secrets included in the Purchased
      Intellectual Property and any other non-public, proprietary information included
      in the Purchased Technology, which measures are reasonable in the industry
      in
      which the Business operates. Each employee, consultant and independent
      contractor of Parent and its Affiliates (including Seller and the Subsidiaries)
      has entered into a written non-disclosure and invention assignment agreement
      with them in a form reasonably acceptable to them and provided to Purchaser
      prior to the date hereof.

     

    (h)  As
      of the
      date hereof, none of Parent or its Affiliates (including Seller and the
      Subsidiaries) is the subject of any pending or, to the Knowledge of Seller
      and
      Knowledge of Parent, threatened Legal Proceedings which involve a claim of
      infringement, unauthorized use, misappropriation, dilution or violation by
      any
      Person against Seller or any of the Subsidiaries or challenging the ownership,
      use, validity or enforceability of any Purchased Intellectual Property. None
      of
      Parent or its Affiliates (including Seller and the Subsidiaries) has received
      written (including by electronic mail) notice of any such threatened claim
      and,
      to the Knowledge of Seller and Knowledge of Parent, there are no facts or
      circumstances that would form the basis for any such claim or challenge. The
      Purchased Intellectual Property, and all of Parent’s and its Affiliates’
(including Seller’s and the Subsidiaries’) rights in and to the Purchased
      Intellectual Property, are valid and enforceable.

     

    (i)  To
      the
      Knowledge of Seller and Knowledge of Parent, no Person is infringing, violating,
      misusing or misappropriating any Purchased Intellectual Property, and no such
      claims have been made against any Person by Parent or any of its Affiliates
      (including Seller or any of the Subsidiaries). 

     

    (j)  There
      are
      no Orders to which Parent or any of its Affiliates (including Seller or any
      of
      the Subsidiaries) is a party or by which they are bound which restrict, in
      any
      material respect, any rights to any Purchased Intellectual Property.

     

    (k)  The
      consummation of the transactions contemplated hereby will not result in the
      loss
      or impairment of Purchaser’s right to own or use any of the Purchased
      Intellectual Property.

     

    
      
         

      

      
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    (l)  No
      present or former employee of Parent or any of its Affiliates (including Seller
      or any of the Subsidiaries) has any right, title, or interest, directly or
      indirectly, in whole or in part, in any material Purchased Intellectual
      Property. To the Knowledge of Seller and Knowledge of Parent, no employee,
      consultant or independent contractor of Parent or any of its Affiliates
      (including Seller or any of the Subsidiaries) engaged in the Business is, as
      a
      result of or in the course of such employee’s, consultant’s or independent
      contractor’s engagement, in default or breach of any material term of any
      employment agreement, non-disclosure agreement, assignment of invention
      agreement or similar agreement.

     

    (m)  Section
      5.11(m)
      of the
      Disclosure Memorandum sets forth a complete and accurate list of (i) all
      Software included in the Purchased Technology owned or licensed exclusively
      by
      Seller and the Subsidiaries that is material to the operation of the Business
      and (ii) all other Software used in the Business that is not exclusively
      owned or licensed by Seller and the Subsidiaries, excluding
      commercial-off-the-shelf Software available on reasonable terms for a license
      fee of no more than $10,000.

     

    (n)  Immediately
      following the Closing, Parent and its Affiliates will not hold any material
      assets or rights of the Business including any rights to the Purchased
      Intellectual Property, except for (i) any Excluded Assets, (ii) such assets
      or
      rights that will be the subject of the Transition Services Agreement and (iii)
      any services currently provided to Seller or the Subsidiaries that Purchaser
      elects not to be the subject of the Transition Services Agreement.

     

    5.12  Material
      Contracts.
      

     

    (a)  Section
      5.12
      of the
      Disclosure Memorandum sets forth all of the following Contracts to which Seller
      or any of the Subsidiaries is a party or by which it is bound and which relate
      to the Business or the Purchased Assets, other than any Excluded Contracts
      (collectively, the “Material
      Contracts”):

     

    (i)  Contracts
      with any Affiliate or current or former officer, director, stockholder or
      Affiliate of Seller or any of the Subsidiaries or any loan officer, Affiliate
      of
      any loan officer, agent, broker or sales representative of Seller or any of
      the
      Subsidiaries that are currently in effect;

     

    (ii)  Contracts
      with any labor union or association representing any employees of Seller or
      any
      of the Subsidiaries;

     

    (iii)  Contracts
      for the sale of any of the assets of Seller or any of the Subsidiaries or for
      the grant to any Person of any preferential rights to purchase any of its assets
      other than in the Ordinary Course of Business and not material in amount in
      the
      aggregate;

     

    (iv)  Contracts
      for joint ventures, strategic alliances or partnerships or other Contract
      (however named) involving a sharing of profits, losses, costs or Liabilities
      by
      Seller or any Subsidiary with any other Person;

     

    (v)  Contracts
      prohibiting or limiting the ability of Seller to (A) engage in any line of
      business, (B) compete with, obtain products or services from, or provide
      services or products to, any Person, (C) carry on or expand the nature or
      geographical scope of the Business anywhere in the world or (D) disclose any
      confidential information in the possession of Seller (and not otherwise
      generally available to the public);

     

    
      
         

      

      
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    (vi)  Contracts
      relating to the acquisition by Seller or any of the Subsidiaries of any
      operating business or the capital stock of any other person;

     

    (vii)  Contracts
      relating to incurrence, assumption or guarantee of any indebtedness in excess
      of
      $100,000 or imposing a Lien on any of its assets;

     

    (viii)  Contracts
      involving (A) leases by Seller from or to any other Person of any tangible
      personal property or real property or (B) purchases or sales by Seller of
      materials, supplies, equipment or services and which, in the case of clauses
      (A)
      and (B), calls for future payments in excess of $25,000 in any
      year;

     

    (ix)  Contracts
      under which the Seller or any of the Subsidiaries has made advances or loans
      to
      any other Person other than (A) intercompany loans and (B) loans and advances
      made in the Ordinary Course of Business;

     

    (x)  Contracts
      providing for severance, retention, change in control or similar
      payments;

     

    (xi)  Contracts
      for the employment (including “at will” employment) of any individual on a
      full-time, part-time or consulting or other basis providing annual compensation
      in excess of $100,000;

     

    (xii)  outstanding
      agreements of guaranty, surety or indemnification, direct or indirect, by Seller
      or any of the Subsidiaries, other than master loan purchase agreements to which
      Seller or any Subsidiary is a party;

     

    (xiii)  Contracts
      (or a group of related contracts) which involve the expenditure of more
      than $50,000 annually or $100,000 in the aggregate or require
      performance by any party more than one year from the date hereof;
      and

     

    (xiv)  Contracts
      that are otherwise material to the Business.

     

    (b)  Each
      of
      the Material Contracts is in full force and effect and is the legal, valid
      and
      binding obligation of Seller and/or a Subsidiary, enforceable against them
      in
      accordance with its terms, subject to applicable bankruptcy, insolvency,
      reorganization, moratorium and similar laws affecting creditors’ rights and
      remedies generally and subject, as to enforceability, to general principles
      of
      equity (regardless of whether enforcement is sought in a proceeding at law
      or in
      equity). Neither Seller nor any Subsidiary is in material default under any
      Material Contract, nor, to the Knowledge of Parent and Knowledge of Seller,
      is
      any other party to any Material Contract in material default thereunder, and
      no
      event has occurred that with the lapse of time or the giving of notice or both
      would constitute a material default thereunder. No party to any of the Material
      Contracts has exercised any termination rights with respect thereto. Seller
      and
      the Subsidiaries have the right to, and will at the Closing, assign the Material
      Contracts to Purchaser. Seller has delivered or otherwise made available to
      Purchaser true, correct and complete copies of all of the Material Contracts,
      together with all amendments, modifications or supplements thereto.

     

    (c)  None
      of
      the Purchased Contracts contains any restrictions prohibiting or limiting the
      ability of Seller (or Purchaser following the Closing) to (1) engage in any
      line
      of business, (2) compete with, obtain products or services from, or provide
      services or products to, any Person, (3) carry on or expand the nature or
      geographical scope of the Business anywhere in the world, (4) disclose any
      confidential information in the possession of Seller (and not otherwise
      generally available to the public) or (5) enter into any Contract with any
      other
      Person.

     

    
      
         

      

      
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    5.13  Employee
      Benefits.
      

     

    (a)  Section
      5.13(a)
      of the
      Disclosure Memorandum sets forth a true and complete list of each
      profit-sharing, pension, severance, thrift, savings, incentive, change of
      control, employment, retirement, vacation, bonus, retention, equity, deferred
      compensation, life insurance and any medical, vision, dental or other health
      plan, flexible spending account, cafeteria plan, holiday, disability or any
      other employee benefit plan or fringe benefit plan, agreement, arrangement
      or
      commitment, whether written or unwritten (all of which are hereinafter referred
      to as the “Employee
      Benefit Plans”),
      which
      is maintained, contributed to or required to be contributed to by Parent or
      Seller on behalf of any current or former employee, director or consultant
      of
      Seller. Section
      5.13(a)
      of the
      Disclosure Memorandum identifies each of the Employee Benefit Plans which
      constitutes an “employee benefit plan” as defined in Section 3(3) of ERISA, in
      addition to any other plan, fund, policy, program, practice, custom,
      understanding or arrangement providing compensation or other benefits, whether
      or not such Employee Benefit Plan is or is intended to be (i) covered or
      qualified under the Code, ERISA or any other applicable Law, (ii) written or
      oral, (iii) funded or unfunded, (iv) actual or contingent, or (v) arrived at
      through collective bargaining or otherwise. Seller does not have any formal
      commitment, or intention communicated to employees, to create any additional
      Employee Benefit Plan or modify or change any existing Employee Benefit Plan.
      

     

    (b)  Parent
      or
      Seller has delivered to Purchaser true and complete copies of (i) the most
      recent plan documents (including all amendments thereto) of all Employee Benefit
      Plans and other writings setting forth the terms of such Employee Benefit Plans;
      (ii) the most recent summary plan description, together with each summary of
      material modifications of all Employee Benefit Plans; and (iii) written
      descriptions of all Employee Benefit Plans for which a plan document or other
      writing is not required or available. 

     

    (c)  Neither
      Parent, Seller nor any ERISA affiliate has ever maintained or participated
      in
      any Employee Benefit Plan which has been subject to title IV of ERISA or Code
      Section 412 or ERISA Section 302, including, but not limited to, any
“multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA). An
      ERISA affiliate for purposes of this Section
      5.13
      is any
      person or entity that would be considered, when combined with Seller, a single
      employer pursuant to Section 414 of the Code. 

     

    (d)  The
      consummation of the transactions contemplated by this Agreement and the Seller
      Documents will not (or will not upon termination of employment within a fixed
      period of time following such consummation) (i) entitle any employee, director
      or consultant to severance pay, unemployment compensation or any other payment,
      or (ii) accelerate the time of payment or vesting or increase the amount of
      payment with respect to any compensation due to any Employee, director or
      Contingent Worker. 

     

    (e)  Except
      as
      set forth in Section
      8.1(h)(1)
      and
Section
      8.5
      of the
      Disclosure Memorandum, no written, or, to the Knowledge of Seller and Knowledge
      of Purchaser, oral representation or communication with respect to any aspect
      of
      a Employee Benefit Plan has been made to any employee on or before the Closing
      Date that is not in accordance with the written or otherwise pre-existing terms
      and provisions of such plans.

     

    
      
         

      

      
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    5.14  Labor.

     

    (a)  There
      is
      no labor or collective bargaining agreement with any union or similar labor
      organization covering any Employee. 

     

    (b)  No
      petition for certification or union election is existing or pending with respect
      to any Employee and no union, labor organization or collective bargaining unit
      has sought certification or recognition within the preceding three (3) years
      with respect to any Employee. 

     

    (c)  All
      Employees are at-will employees.

     

    (d)  There
      are
      no (i) strikes, work stoppages, slowdowns, lockouts or arbitrations or
      (ii) material grievances or other labor disputes pending or, to the
      Knowledge of Parent and Knowledge of Seller, threatened against or involving
      Seller or any of the Subsidiaries involving any Employee. There are no unfair
      labor practice charges, grievances or complaints pending or, to the Knowledge
      of
      Parent and Knowledge of Seller, threatened by or on behalf of any
      Employee.

     

    5.15  Litigation.
      

     

    (a)  Except
      as
      set forth in Section 5.15
      of the
      Disclosure Memorandum, there is no Legal Proceeding pending or, to the Knowledge
      of Parent and Knowledge of Seller, threatened against Seller or any of the
      Subsidiaries (or to the Knowledge of Parent and Knowledge of Seller, pending
      or
      threatened, against any of the officers, directors or key employees of Seller
      or
      any of the Subsidiaries with respect to their business activities on behalf
      of
      Seller), or to which Seller or any of the Subsidiaries is otherwise a party,
      before any Governmental Body; nor, to the Knowledge of Parent and Knowledge
      of
      Seller, is there any reasonable basis for any such Legal Proceeding. Except
      as
      set forth in Section
      5.15
      of the
      Disclosure Memorandum, neither Seller nor any Subsidiary is subject to any
      Order. Except as set forth in Section
      5.15
      of the
      Disclosure Memorandum, neither Seller nor any Subsidiary is engaged in any
      legal
      action to recover monies due it or for damages sustained by it.

     

    (b)  There
      are
      no Legal Proceedings or Orders issued, pending or, to the Knowledge of Parent
      and Knowledge of Seller, threatened, against Parent, Seller or any of Seller’s
      assets, at law, in equity or otherwise, in, before, by, or otherwise involving,
      any Governmental Body, arbitrator or other Person that question or challenge
      the
      validity or legality of, or have the effect of prohibiting, preventing,
      restraining, restricting, delaying, making illegal or otherwise interfering
      with, this Agreement, the Seller Documents, the consummation of the transactions
      contemplated hereby or thereby or any action taken or proposed to be taken
      by
      Parent or Seller pursuant hereto or in connection with the transactions
      contemplated hereby or thereby. To the Knowledge of Parent and Knowledge of
      Seller, no event has occurred or circumstance exists that could reasonably
      be
      expected to give rise to or serve as a basis for the commencement of any such
      Legal Proceeding or the issuance of any such Order.

     

    (c)  Neither
      Parent nor Seller is a party to any written agreement, consent agreement or
      memorandum of understanding with or a party to any commitment letter or similar
      undertaking with, and the Board of Directors thereof has not adopted any
      resolutions at the request of, any Governmental Body that restrict the conduct
      of the Business or that are in any manner related to its capital adequacy,
      its
      credit policies, its management or the Business, nor have Parent or Seller
      been
      advised by any Governmental Body that the entity is considering requesting
      such
      an agreement, consent agreement, memorandum of understanding, commitment letter
      or similar undertaking, or Board of Directors resolutions.

     

    
      
         

      

      
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    5.16  Compliance
      with Laws; Permits.

     

    (a)  Seller
      and the Subsidiaries are in compliance in all respects with all Laws of every
      Governmental Body, including all licensing and escheat laws, applicable to
      the
      Purchased Assets or their conduct of the Business, except for such failure
      to
      comply that has not had, and is not reasonably likely to have, a Material
      Adverse Effect. Neither Seller nor any of the Subsidiaries has received any
      written or other notice of or been charged with the violation of any Law with
      respect to the Business or the Purchased Assets. To the Knowledge of Parent
      and
      Knowledge of Seller, neither Seller nor any of the Subsidiaries is under
      investigation with respect to the violation of any Law with respect to the
      Business or the Purchased Assets and there are no facts or circumstances which
      could form the basis for any such violation. 

     

    (b)  Section 5.16(b)
      of the
      Disclosure Memorandum contains a list of all Permits which are required for
      the
      operation of the Business as presently conducted. Seller and the Subsidiaries
      currently have all Permits which are required for the operation of the Business
      as presently conducted, except where the failure to have such Permits has not
      had, and is not reasonably likely to have, a Material Adverse Effect. Neither
      Seller nor any of the Subsidiaries is in default or violation in any material
      respect, and no event has occurred which, with notice or the lapse of time
      or
      both, would constitute a default or violation, in any material respect of any
      term, condition or provision of any Permit to which it is a party, to which
      the
      Business is subject or by which any of the Purchased Assets are bound and,
      to
      the Knowledge of Parent and Knowledge of Seller, there are no facts or
      circumstances which could form the basis for any such default or violation.
      All
      applications required to have been filed for the renewal of any Permit listed
      in
Section
      5.16(b)
      of the
      Disclosure Memorandum have been duly filed on a timely basis with the
      appropriate Governmental Body, and all other filings required to have been
      made
      with respect to any such Permit have been duly made on a timely basis with
      the
      appropriate Governmental Body, except where the failure to have timely made
      such
      filings has not had, and is not reasonably likely to have, a Material Adverse
      Effect.

     

    5.17  Environmental
      Matters.
      Except
      as set forth in Section 5.17
      of the
      Disclosure Memorandum hereto:

     

    (a)  no
      Hazardous Materials have been used, stored or otherwise handled in any manner
      by
      Parent, Seller or any of their Subsidiaries on, in, from or affecting any Seller
      Property except in compliance with applicable Environmental Laws; 

     

    (b)  to
      the
      Knowledge of Parent and the Knowledge of Seller, no Hazardous Materials have
      at
      any time been released into or stored on or in any Seller Property;

     

    (c)  neither
      Parent nor Seller has received any notice of any violations (and, to the
      Knowledge of Parent and Knowledge of Seller, there are no existing violations)
      of any applicable Law governing the use, storage, treatment, transportation,
      manufacture, refinement, handling, production or disposal of Hazardous Materials
      on, in, from or affecting any Seller Property and there are no Legal Proceedings
      pending or, to the Knowledge of Parent and Knowledge of Seller, threatened
      by
      any Person with respect to any such violations; and

     

    (d)  all
      Seller Properties are currently being, and have in the past been, operated
      by
      Parent or Seller in all material respects in accordance and in compliance with
      all applicable Environmental Laws.

     

    5.18  Insurance.
      Seller
      and the Subsidiaries have insurance policies in full force and effect for such
      amounts as are sufficient for all requirements of Law and all agreements to
      which Seller or any of the Subsidiaries is a party or by which it is bound
      to
      the extent applicable to the Business, the Seller Properties and the Purchased
      Assets. Set forth in Section
      5.18
      of the
      Disclosure Memorandum is a list of all insurance policies and all fidelity
      bonds
      held by or applicable to Seller or any of the Subsidiaries to the extent
      applicable to the Business, the Seller Properties and the Purchased Assets
      setting forth, in respect of each such policy, the policy name, policy number,
      carrier, term, type and amount of coverage and annual premium. Except as set
      forth in Section
      5.18
      of the
      Disclosure Memorandum, no event relating to Seller or any of the Subsidiaries
      has occurred which could reasonably be expected to result in a retroactive
      upward adjustment in premiums under any such insurance policies or which could
      reasonably be expected to result in a prospective upward adjustment in such
      premiums. Excluding insurance policies that have expired and been replaced
      in
      the Ordinary Course of Business and except as set forth in Section
      5.18
      of the
      Disclosure Memorandum, no insurance policy applicable to the Business, the
      Seller Properties or the Purchased Assets has been cancelled within the last
      two
      (2) years and, to the Knowledge of Parent and Knowledge of Seller, no threat
      has
      been made to cancel any such insurance policy of Seller or any of the
      Subsidiaries during such period. Except as noted in Section
      5.18
      of the
      Disclosure Memorandum, all such insurance will remain in full force and effect
      and all such insurance is assignable or transferable to Purchaser. No event
      has
      occurred, including the failure by Seller or any of the Subsidiaries to give
      any
      notice or information and none of Seller or any of the Subsidiaries has given
      any inaccurate or erroneous notice or information to any third party, which
      limits or impairs the rights of Seller or any of the Subsidiaries under any
      such
      insurance policies in a material adverse manner.

     

    
      
         

      

      
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    5.19  Loan
      Originations.
      

     

    (a)  Lender
      qualifications. Each of Seller and its Subsidiaries have been during the last
      three years, and are presently in, compliance with all Applicable Requirements,
      except where such failure to comply has not had, and is not reasonably likely
      to
      have, a Material Adverse Effect. Seller and its Subsidiaries have timely filed,
      or will have timely filed by the Closing Date, all reports that any Governmental
      Body or Insurer requires that it file with respect to the Business, except
      where
      such failure to make such filings has not had, and is not reasonably likely
      to
      have, a Material Adverse Effect. No Agency has indicated to Seller or any of
      its
      Subsidiaries in writing, or to the Knowledge of Parent and Knowledge of Seller,
      in any other manner, that it has terminated or intends to terminate its
      relationship with Seller or any such Subsidiary for poor performance, poor
      loan
      quality or concern with respect to Seller’s or any Subsidiary’s compliance with
      Laws or that Seller or any of its Subsidiaries is in default under or not in
      compliance with respect to any Applicable Requirements, except as would not,
      individually or in the aggregate, be materially adverse to Seller and its
      Subsidiaries.

     

    (b)  Seller
      conduct. The loan origination and underwriting processes, procedures and
      guidelines of Seller and its Subsidiaries that are used in the Business are
      adequate and are consistent with generally accepted industry standards, and
      Seller and its Subsidiaries have not taken any action or omitted to take any
      action in violation of such loan origination and underwriting processes,
      procedures and guidelines with respect to any of the Pipeline Loans. Neither
      Seller nor its Subsidiaries have done or caused to be done, or have failed
      to do
      or omitted to be done, any act, the effect of which would operate to invalidate
      or materially impair (1) any private mortgage insurance or commitment of any
      private mortgage insurer to insure, (2) any title insurance policy, (3) any
      hazard insurance policy, (4) any flood insurance policy, (5) any fidelity bond,
      direct surety bond, or errors and omissions insurance policy required by private
      mortgage insurers, or (6) any surety or guaranty agreement, in each case
      applicable to the Pipeline Loans or reasonably necessary to the operation of
      the
      Business. No Agency or private mortgage insurer has (x) claimed in writing
      or,
      to the Knowledge of Parent and Knowledge of Seller, intends to claim, that
      the
      Pipeline Loans, Seller or any of its Subsidiaries have violated or have not
      complied with the representations and warranties applicable with respect to
      any
      Pipeline Loans, or with respect to any sale of Mortgage Loans or mortgage
      servicing rights or (y) imposed restrictions on the activities (including
      commitment authority) of Seller or any Subsidiary, except where such
      restrictions have not had, and are not reasonably likely to have, a Material
      Adverse Effect.

     

    
      
         

      

      
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    (c)  Pipeline
      loans. 

     

    (i) Except
      as
      would not, individually or in the aggregate, reasonably be expected to have
      a
      Material Adverse Effect or a material adverse effect on the aggregate fair
      market value of the Pipeline Loans, each Pipeline Loan was advertised, solicited
      and originated by Seller in a manner consistent with all Applicable Requirements
      and applicable Laws, and with the intent and expectation that, upon closing
      or
      funding, it would be (1) eligible for sale to, and insurance by, or pooling
      to
      collateralize securities issued by an investor, Agency or Insurer; (2) evidenced
      by a Mortgage Note with such terms as are customary in the business; (3) duly
      secured by a Mortgage with such terms as are customary in the business and
      which
      grants the holder thereof either a first lien on the Mortgaged Property
      (including any improvements thereon) with respect to Pipeline Loans originated
      as first lien Mortgage Loans and with respect to Pipeline Loans originated
      as
      second lien Mortgage Loans, a second priority lien on the Mortgaged Property
      which constitutes a security interest that has been duly perfected and
      maintained (or is in the process of perfection in due course) and is in full
      force and effect and is insured by a title policy issued by a company acceptable
      to the applicable Agency or investor to the extent required by the applicable
      Agency or investor; (4) accompanied by a hazard insurance policy covering
      improvements on the Mortgaged Property subject to such Mortgage, with a loss
      payee clause in favor of Seller or one of its Subsidiaries or the assignee
      of
      Seller or one its Subsidiaries, which insurance policy or policies covers such
      risks as are customarily insured against in accordance with industry practice
      and in accordance with investor or Agency requirements, and which includes
      flood
      insurance and/or special hazard insurance where either is required by an
      investor or Agency; and (5) covered by a policy of private mortgage insurance,
      if required by the terms of any Applicable Requirement or any applicable Law.
      Neither Seller nor its Subsidiaries has engaged in any act or omission that
      would impair the coverage of such insurance described in this subsection, except
      as would not, individually or in the aggregate, reasonably be expected to have
      a
      material adverse effect on the Business, the Purchased Assets or the aggregate
      fair market value of the Pipeline Loans. The information set forth in the
      Mortgage Loan Tape with respect to the Pipeline Loans is complete, true and
      correct in all material respects as of the date specified in the Mortgage Loan
      Tape. In the event Purchaser changes or modifies the loan underwriting criteria
      employed by Seller with respect to any Pipeline Loan, and such change results
      in
      a Liability to Purchaser or a failure of the representations and warranties
      set
      forth in this Section
      5.19(b)(i)
      to be
      true and correct in all respects with respect to such Pipeline Loan, then the
      representations and warranties set forth in this Section
      5.19(b)(i)
      shall be
      of no force and effect with respect to such Pipeline Loan and Seller and Parent
      shall have no other obligation or Liability to Purchaser with respect to such
      Pipeline Loan.

     

    (ii) The
      representations and warranties set forth at Exhibit
      5.19(b)(ii)
      shall be
      true and correct with respect to each Pipeline Loan.

     

    (iii) Except
      as
      would not, individually or in the aggregate, reasonably be expected to have
      a
      material adverse effect on the Business, the Purchased Assets or the aggregate
      fair market value of the Pipeline Loans, but for the execution and delivery
      of
      this Agreement and the consummation of the transactions contemplated hereby,
      upon the closing and funding of the Pipeline Loans, Seller or its Subsidiaries
      would have been the sole owner of each of the Pipeline Loans and the sole owner
      or beneficiary of or under the related Mortgage Notes, Mortgages, guaranties,
      indemnities, financing statements, assignments, endorsement, bonds, letters
      of
      credit, accounts, insurance contracts and policies, credit reports, Tax Returns,
      appraisals, escrow documents, participation agreements (if applicable), loan
      files, servicing files and all other documents evidencing or securing the
      Pipeline Loans (the “Mortgage
      Files”).
      Except as would not, individually or in the aggregate, reasonably be expected
      to
      have a material adverse effect on the Business, the Purchased Assets or the
      aggregate fair market value of the Pipeline Loans, there exists no physical
      damage to any Mortgaged Property reflected in the Mortgage Files as securing
      any
      Pipeline Loan, which physical damage is not insured against in compliance with
      the Applicable Requirements or would cause any Pipeline Loan to become
      delinquent or adversely affect the value or marketability of any Pipeline
      Loan.

     

    
      
         

      

      
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    5.20  Loan
      Officers.
      Set
      forth in Section
      5.20
      of the
      Disclosure Memorandum is a true and complete list of each loan officer of Seller
      or its Subsidiaries as of the date hereof together with a true and complete
      copy
      of each form of any Contract between the Seller or such Subsidiary and such
      loan
      officers, including any compensation arrangements. Each Contract with a loan
      officer is in substantially the form, and contains all of the terms, conditions
      and provisions set forth in, one of the forms of such Contracts set forth in
      Section
      5.20
      of the
      Disclosure Memorandum. Seller enjoys good relations with its loan officers.
      Each
      of the Contracts between Seller and its loan officers is valid, binding and
      in
      full force and effect in accordance with its terms. Neither Seller nor, to
      the
      Knowledge of Parent and Knowledge of Seller, any other party to any such
      Contract is in default in any material respect with respect to any such Contract
      and no such Contract contains any provision providing that the other party
      thereto may terminate the same by reason of the transactions contemplated by
      this Agreement or the Seller Documents or any other provision which would be
      altered or otherwise become applicable by reason of such transactions.

     

    5.21  Related
      Party Transactions.

     

    (a)  Except
      as
      set forth in Section
      5.21(a)
      of the
      Disclosure Memorandum or as specifically described in the annual proxy statement
      of Parent as filed with the SEC under Section 14(a) of the Exchange Act on
      April
      26, 2006, none of Seller, any Subsidiary, any Affiliate of Seller or any of
      their respective officers, directors or employees (i) owns any direct or
      indirect interest of any kind in, or controls or is a director, officer,
      employee or partner of, or consultant to, or lender to or borrower from or
      has
      the right to participate in the profits of, any Person which is (A) a
      competitor, supplier, customer, landlord, tenant, creditor or debtor of Seller
      or any of the Subsidiaries with respect to the Business, (B) engaged in a
      business that is substantially similar to the Business, or (C) a
      participant in any transaction with respect to the Business to which Seller
      or
      any of the Subsidiaries is a party or (ii) is a party to any Contract with
      Seller or any of the Subsidiaries with respect to the Business.

     

    (b)  Except
      as
      set forth in Section
      5.21(b)
      of the
      Disclosure Memorandum, each Contract, agreement, or arrangement between Seller
      or any of the Subsidiaries on the one hand, and any Affiliate of Seller or
      any
      officer, director or employee of Seller on the other hand, with respect to
      the
      Business is on commercially reasonable terms no more favorable to the Affiliate,
      director, officer or employee of Seller than what any third party negotiating
      on
      an arms-length basis would expect.

     

    5.22  Financial
      Advisors.
      Except
      for Milestone Advisors LLC, whose fees shall be paid by Seller, no Person has
      acted, directly or indirectly, as a broker, finder or financial advisor for
      Seller or any of the Subsidiaries in connection with the transactions
      contemplated by this Agreement and no Person is entitled to any fee or
      commission or like payment in respect thereof.

     

    
      
         

      

      
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    ARTICLE
      VI

     

    REPRESENTATIONS
      AND WARRANTIES OF PURCHASER

     

    Purchaser
      hereby represents and warrants to Seller that:

     

    6.1  Organization
      and Good Standing.
      Purchaser is
      a
      federal savings and loan association chartered by the Office of Thrift
      Supervision (“OTS”),
      and
      is duly organized, validly existing and in good standing under the laws of
      the
      United States.

     

    6.2  Authorization
      of Agreement.
      Purchaser has full corporate power and authority to execute and deliver this
      Agreement and each other agreement, document, instrument or certificate
      contemplated by this Agreement or to be executed by Purchaser in connection
      with
      the consummation of the transactions contemplated hereby and thereby (the
“Purchaser
      Documents”),
      and
      to consummate the transactions contemplated hereby and thereby. The execution,
      delivery and performance by Purchaser of this Agreement and each Purchaser
      Document have been duly authorized by all necessary corporate action on behalf
      of Purchaser. This Agreement has been, and each Purchaser Document will be
      at or
      prior to the Closing, duly executed and delivered by Purchaser and
      (assuming the due authorization, execution and delivery by the other parties
      hereto and thereto) this Agreement constitutes, and each Purchaser Document
      when
      so executed and delivered will constitute, legal, valid and binding obligations
      of Purchaser, enforceable against Purchaser in accordance with their respective
      terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
      and similar laws affecting creditors’ rights and remedies generally, and
      subject, as to enforceability, to general principles of equity, including
      principles of commercial reasonableness, good faith and fair dealing (regardless
      of whether enforcement is sought in a proceeding at law or in
      equity).

     

    6.3  Conflicts;
      Consents of Third Parties.

     

    (a)  Neither
      of the execution and delivery by Purchaser of this Agreement and of the
      Purchaser Documents, nor the compliance by Purchaser with any of the provisions
      hereof or thereof will (i) conflict with, or result in the breach of, any
      provision of the charter or by-laws of Purchaser, (ii) conflict with,
      violate, result in the breach of, or constitute a default under any
      securitization, forward commitment, note, bond, mortgage, indenture, license,
      agreement or other obligation to which Purchaser is a party or by which
      Purchaser or its properties or assets are bound or (iii) violate any
      statute, rule, regulation or Order by which Purchaser is bound, except, in
      the
      case of clauses (ii) and (iii), for such violations, breaches or defaults
      as would not, individually or in the aggregate, have a material adverse effect
      on the ability of Purchaser to consummate the transactions contemplated by
      this
      Agreement.

     

    (b)  Except
      for filings of applications and notices with, receipt of approvals or
      nonobjections from, and expiration of related waiting periods required by the
      OTS and the Federal Deposit Insurance Corporation (“FDIC”),
      no
      Consent, waiver, approval, Order, Permit or authorization of, or declaration
      or
      filing with, or notification to, any Person or Governmental Body is required
      on
      the part of Purchaser in connection with the execution and delivery of this
      Agreement or the Purchaser Documents or the compliance by Purchaser with any
      of
      the provisions hereof or thereof.

     

    6.4  Litigation.
      There
      are no Legal Proceedings pending or, to the Knowledge of Purchaser, threatened
      that are reasonably likely to prohibit or restrain the ability of Purchaser
      to
      enter into this Agreement or consummate the transactions contemplated
      hereby.

     

    6.5  Financial
      Advisors.
      Except
      for Credit Suisse Securities (USA) LLC, no Person has acted, directly or
      indirectly, as a broker, finder or financial advisor for Purchaser in connection
      with the transactions contemplated by this Agreement and no Person is entitled
      to any fee or commission or like payment in respect thereof.

     

    
      
         

      

      
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    6.6  Financing.
      Purchaser
      has available, and on the Closing Date and at such other times pursuant to
      Section
      3.4
      and
Section
      3.5,
      will
      have available, sufficient funds, available lines of credit or other sources
      of
      immediately available funds necessary to pay the Estimated Purchase Price,
      the
      Escrow Amount, the difference between the Estimated Book Value and the Final
      Book Value and the difference between the Estimated Pipeline Premium and the
      Final Pipeline Premium, each as applicable, and to assume the Assumed
      Liabilities on the terms and conditions of this Agreement. Purchaser’s
      obligations hereunder are not subject to any conditions regarding Purchaser’s
      ability to obtain financing for the consummation of the transactions
      contemplated hereby.

     

    ARTICLE
      VII

     

    COVENANTS

     

    7.1  Access
      to Information.
      Seller
      shall, and shall cause the Subsidiaries to, afford Purchaser, its officers,
      employees, advisors, attorneys, accountants and representatives reasonable
      access to make such investigation of the properties, businesses and operations
      of Seller and the Subsidiaries as they relate to the Business or Purchased
      Assets and such examination of the books, records and financial condition of
      Seller and the Subsidiaries as they relate to the Business or Purchased Assets
      as it reasonably requests and to make extracts and copies of such books and
      records, except to the extent such disclosure of books and records is not
      permitted under applicable Law, and access to the members of management and
      personnel of the Business. Any such investigation, examination, discussion
      and
      review shall be conducted during the period prior to the Closing, during regular
      business hours and under reasonable circumstances and Seller shall cooperate
      fully therein. No investigation by Purchaser prior to or after the date of
      this
      Agreement shall diminish or obviate any of the representations, warranties,
      covenants or agreements of Seller contained in this Agreement or the Seller
      Documents. In order that Purchaser may have full opportunity to make such
      physical, business, accounting and legal review, examination or investigation
      as
      it may reasonably request of the affairs of Seller and the Subsidiaries as
      they
      relate to the Business or Purchased Assets, Seller shall cause the officers,
      employees, consultants, agents, accountants, attorneys and other representatives
      of Seller and the Subsidiaries to cooperate fully with such representatives
      in connection with such review and examination. 

     

    7.2  Conduct
      of the Business Pending the Closing.

     

    (a)  Except
      as
      otherwise expressly provided by this Agreement or with the prior written consent
      of Purchaser, Seller shall, and shall cause the Subsidiaries to:

     

    (i)  conduct
      the Business only in the Ordinary Course of Business;

     

    (ii)  use
      their
      commercially reasonable efforts to (A) preserve its present business operations,
      organization (including, without limitation, management and the sales force)
      and
      goodwill of Seller and the Subsidiaries as they relate to the Business or
      Purchased Assets and (B) maintain its present relationships with Persons having
      business dealings with Seller and the Subsidiaries (including, without
      limitation, customers, suppliers, officers, employees, underwriters, agents,
      brokers, sales representatives, correspondents, landlords and investors) with
      respect to the Business or the Purchased Assets;

     

    (iii)  maintain
      (A) all of the assets and properties of Seller and the Subsidiaries that relate
      to the conduct of the Business or the Purchased Assets in their current
      condition, ordinary wear and tear excepted and (B) insurance upon all of the
      assets and properties of Seller and the Subsidiaries that relate to the conduct
      of the Business or the Purchased Assets in such amounts and of such kinds
      comparable to that in effect on the date of this Agreement;

     

    
      
         

      

      
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    (iv)  (A)
      maintain the books, accounts and records of Seller and the Subsidiaries that
      relate to the conduct of the Business or the Purchased Assets in the Ordinary
      Course of Business, (B) continue to collect accounts receivable and pay accounts
      payable that relate to the conduct of the Business or the Purchased Assets
      utilizing normal procedures and without discounting or accelerating payment
      of
      such accounts, and (C) comply in all material respects with all contractual
      and
      other obligations applicable to the operation the Business and the Purchased
      Assets; 

     

    (v)  comply
      in
      all material respects with all applicable Laws that relate to the conduct of
      the
      Business or the Purchased Assets; 

     

    (vi)  pay
      all
      maintenance and similar fees and take all other appropriate actions as necessary
      to prevent the abandonment, loss or impairment of all Purchased Intellectual
      Property;

     

    (vii)  continue
      the existing credit collection control of delinquencies and other policies
      and
      practices relating to the conduct of the Business; and

     

    (viii)  not
      take
      any action which would adversely affect the ability of the parties to consummate
      the transactions contemplated by this Agreement.

     

    (b)  Except
      as
      otherwise expressly provided by this Agreement or with the prior written consent
      of Purchaser, Seller shall not, and shall not permit the Subsidiaries to, with
      respect to the Business or the Purchased Assets:

     

    (i)  except
      as
      set forth in Section
      5.12(x)
      of the
      Disclosure Memorandum, or as may be required by applicable Law, (A) increase
      the
      annual level of compensation of any Employee in an amount greater than $10,000,
      (B) grant any unusual or extraordinary bonus, benefit or other direct or
      indirect compensation to any Employee, director or consultant, or (C) increase
      the coverage or benefits with respect to any Employee available under any
      Employee Benefit Plan or create or enter into any new Employee Benefit
      Plan;

     

    (ii)  make
      any
      loan or advance to any Person other than in the Ordinary Course of
      Business;

     

    (iii)  incur
      or
      assume any indebtedness other than in the Ordinary Course of
      Business;

     

    (iv)  subject
      to any Lien or otherwise encumber or, except for Permitted Exceptions, permit,
      allow or suffer to be encumbered, any of the properties or assets (whether
      tangible or intangible) of Seller or any of the Subsidiaries;

     

    (v)  acquire
      any material properties or assets or sell, assign, license, transfer, convey,
      lease or otherwise dispose of any of the Purchased Assets of Seller and the
      Subsidiaries;

     

    (vi)  enter
      into or agree to enter into any merger or consolidation with, any corporation
      or
      other entity except for any merger or consolidation that is not adverse to
      the
      rights and interests of Purchaser set forth in this Agreement, and that would
      not have any adverse effects on, the Business or the Purchased Assets or the
      ability of Seller and its Subsidiaries to consummate the transactions
      contemplated by this Agreement, and not engage in any new business or invest
      in,
      make a loan, advance or capital contribution to, or otherwise acquire the
      securities of any other Person;

     

    
      
         

      

      
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    (vii)  cancel
      or
      compromise any debt or claim or waive or release any right of Seller or any
      of
      the Subsidiaries; 

     

    (viii)  except
      in
      the Ordinary Course of Business, deviate from or change in any respect the
      credit or underwriting policies or collateral eligibility standards of Seller
      or
      any Subsidiary; 

     

    (ix)  enter
      into, modify or terminate any labor or collective bargaining agreement or,
      through negotiation or otherwise, make any commitment or incur any liability
      to
      any labor organization with respect to any Employee;

     

    (x)  enter
      into any transaction or enter into, modify, amend, terminate or renew any
      Contract which by reason of its size, terms or otherwise is not in the Ordinary
      Course of Business;

     

    (xi)  enter
      into any Contract, understanding or commitment that restrains, restricts, limits
      or impedes the ability of the Business, or the ability of Purchaser, to compete
      with or conduct any business or line of business in any geographic
      area;

     

    (xii)  except
      as
      set forth in Section
      7.2(b)(xii)
      of the
      Disclosure Memorandum, terminate, amend, restate, supplement or waive any rights
      under any (A) Material Contract, Real Property Lease, Personal Property
      Lease or Intellectual Property License or (B) Permit; 

     

    (xiii)  enter
      into, modify or amend any agreement with any broker or
      correspondent;

     

    (xiv)  amend
      the
      certificate of organization or incorporation or by-laws (or other similar
      governing documents) of Seller or any Subsidiary in a manner that would
      adversely impact the consummation of the transactions contemplated hereby;
      or

     

    (xv)  agree
      to
      do anything (A) prohibited by this Section 7.2,
      (B)
      which would make any of the representations and warranties of Seller in this
      Agreement untrue or incorrect in any material respect or (C) that would
      reasonably be expected to have a Material Adverse Effect.

     

    7.3  Consents.
      Seller
      shall use (and shall cause each of the Subsidiaries to use) its commercially
      reasonable efforts, and Purchaser shall cooperate with Seller, to obtain at
      the
      earliest practicable date all Consents and approvals required to consummate
      the
      transactions contemplated by this Agreement, including, without limitation,
      the
      Consents and approvals referred to in Section 5.3(b).
      Seller
      shall bear the sole cost of obtaining such Consents and approvals except for
      those costs associated with obtaining consents to assignment or transfer of
      any
      Material Contract or Real Property Lease which costs shall be shared equally
      by
      Purchaser and Seller.

     

    
      
         

      

      
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    7.4  Regulatory
      Approvals.

     

    (a)  Each
      of
      Purchaser, Parent and Seller shall use commercially reasonable efforts to (i)
      make or cause to be made all filings required of each of them or any of their
      respective Subsidiaries or Affiliates under any Antitrust Laws with respect
      to
      the transactions contemplated hereby as promptly as practicable and, in any
      event, within ten Business Days after the date of this Agreement, (ii) comply
      at
      the earliest practicable date with any request under any Antitrust Laws for
      additional information, documents, or other materials received by each of them
      or any of their respective Subsidiaries from the FTC, the Antitrust Division
      or
      any other Governmental Body in respect of such filings or such transactions
      and
      (iii) cooperate with each other in connection with any such filing (including,
      to the extent permitted by applicable Law, providing copies of all such
      documents to the non-filing parties prior to filing and considering all
      reasonable additions, deletions or changes suggested in connection therewith)
      and in connection with resolving any investigation or other inquiry of any
      of
      the FTC, the Antitrust Division or other Governmental Body under any Antitrust
      Laws with respect to any such filing or any such transaction. Each such party
      shall use commercially reasonable efforts to furnish to each other all
      information required for any application or other filing to be made pursuant
      to
      any applicable Law in connection with the transactions contemplated by this
      Agreement. Each such party shall promptly inform the other parties hereto of
      any
      oral communication with, and provide copies of written communications with,
      any
      Governmental Body regarding any such filings or any such transaction. No party
      hereto shall independently participate in any formal meeting with any
      Governmental Body in respect of any such filings, investigation, or other
      inquiry without giving the other parties hereto prior notice of the meeting
      and,
      to the extent permitted by such Governmental Body, the opportunity to attend
      and/or participate. Subject to applicable Law, the parties hereto will consult
      and cooperate with one another in connection with any analyses, appearances,
      presentations, memoranda, briefs, arguments, opinions and proposals made or
      submitted by or on behalf of any party hereto relating to proceedings under
      any
      Antitrust Laws. 

     

    (b)  Each
      of
      Purchaser and Seller shall use commercially reasonable efforts to resolve such
      objections, if any, as may be asserted by any Governmental Body with respect
      to
      the transactions contemplated by this Agreement under the Sherman Act, as
      amended, the Clayton Act, as amended, the Federal Trade Commission Act, as
      amended, and any other United States federal or state or foreign statutes,
      rules, regulations, orders, decrees, administrative or judicial doctrines or
      other laws that are designed to prohibit, restrict or regulate actions having
      the purpose or effect of monopolization or restraint of trade (collectively,
      the
“Antitrust
      Laws”).
      In
      connection therewith, if any Legal Proceeding is instituted (or threatened
      to be
      instituted) challenging any transaction contemplated by this Agreement as in
      violation of any Antitrust Law, Seller shall use commercially reasonable
      efforts, and Purchaser shall cooperate with Seller, to contest and resist any
      such Legal Proceeding, and to have vacated, lifted, reversed, or overturned
      any
      decree, judgment, injunction or other order whether temporary, preliminary
      or
      permanent, that is in effect and that prohibits, prevents, or restricts
      consummation of the transactions contemplated by this Agreement, including
      by
      pursuing all available avenues of administrative and judicial appeal and all
      available legislative action, unless, by mutual agreement, Purchaser and Seller
      decide that litigation is not in their respective best interests. Each of
      Purchaser and Seller shall use reasonable efforts to take such action as may
      be
      required to cause the expiration of the notice periods under any Antitrust
      Laws
      with respect to such transactions as promptly as possible after the execution
      of
      this Agreement. Notwithstanding anything to the contrary provided herein,
      neither Purchaser nor any of its Affiliates shall be required (i) to hold
      separate (including by trust or otherwise) or divest any of its businesses,
      product lines or assets, or any of the Purchased Assets, (ii) to agree to
      any limitation on the operation or conduct of the Business, or (iii) to
      waive any of the conditions to this Agreement set forth in Section
      9.1.

     

    (c)  Each
      party hereto hereby agrees to cooperate with each other party and to promptly
       prepare
      and file all necessary filings, applications and other documents, to obtain
      as
      promptly as practicable all Consents of Governmental Bodies necessary or
      advisable to consummate the transactions contemplated hereby and to lift any
      injunction or other legal bar to the consummation of the transactions
      contemplated by this Agreement (and, in such case, to proceed with the
      consummation of the transactions contemplated by this Agreement as expeditiously
      as possible), including through all possible appeals; provided, that Purchaser
      shall not be required to consummate the transactions contemplated hereby if,
      in
      the reasonable good faith judgment of Purchaser, any conditions or restrictions
      imposed by any third party or Governmental Body in connection with any such
      Consent may reasonably be expected to materially impair the ability of Purchaser
      to consummate the transactions contemplated hereby or operate the Business
      or
      any other business operated by Purchaser or its Affiliates following the Closing
      in substantially the same manner it has been operated prior to the date of
      this
      Agreement. Subject to the timely receipt of all necessary information and
      materials from Parent and Seller, Purchaser shall, if necessary, file, on or
      prior to five Business Days after the date hereof, the appropriate application
      with the Office of Thrift Supervision necessary to obtain the appropriate
      Consent of the Office of Thrift Supervision required to consummate the
      transactions contemplated by this Agreement. Each party shall have the right
      to
      review in advance, and to the extent practicable each will consult the other
      on,
      in each case subject to applicable Laws relating to the exchange of information,
      all information relating to Purchaser, Seller or Parent, as the case may be,
      that is reasonably relevant to such party in terms of obtaining any Consents
      of
      Governmental Bodies and which appears in any filing made with, or other written
      materials submitted to, any third party or Governmental Body in connection
      with
      the transactions contemplated by this Agreement. In exercising the foregoing
      right, each of Purchaser and Seller shall act reasonably and as promptly as
      practicable. Purchaser and Seller agree that they will keep the other apprised
      of the status of matters relating to completion of the transactions contemplated
      by this Agreement, including, subject to applicable Laws relating to the
      exchange of information, promptly furnishing the other with copies of notice
      or
      other communications received by Purchaser, Seller or Parent, as the case may
      be, from any third party or Governmental Body with respect to the transactions
      contemplated hereby.

     

    
      
         

      

      
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    7.5  Further
      Assurances.
      

     

    (a)  Subject
      to Section
      7.4,
      each of
      Seller and Purchaser shall use its commercially reasonable efforts to (i) take
      all actions necessary or appropriate to consummate the transactions contemplated
      by this Agreement and (ii) cause the fulfillment at the earliest practicable
      date of all of the conditions to their respective obligations to consummate
      the
      transactions contemplated by this Agreement. 

     

    (b)  Parent
      will transfer all Purchased Intellectual Property owned by Parent and its
      Affiliates (other than Seller and the Subsidiaries) to Seller prior to the
      Closing. Seller, the Subsidiaries and Parent shall execute such additional
      documents and take such other actions as may be reasonably necessary or
      desirable to secure, record or perfect the assignment of the Purchased
      Intellectual Property to Purchaser and to allow Purchaser to register, maintain,
      defend, enforce and otherwise obtain the full benefits of the Purchased
      Intellectual Property.

     

    7.6  No
      Shop.

     

    (a)  Except
      with respect to the possible sale by Seller of the Excluded Assets, neither
      Parent nor Seller will, and will not permit any of the directors, officers,
      employees, representatives or agents of Seller or the Subsidiaries
      (collectively, the “Representatives”)
      to,
      directly or indirectly, (i) discuss, negotiate, undertake, authorize,
      recommend, propose or enter into, either as the proposed surviving, merged,
      acquiring or acquired corporation, any transaction involving a merger,
      consolidation, business combination, purchase or disposition of any amount
      of
      the Business or the Purchased Assets other than the transactions contemplated
      by
      this Agreement (an “Acquisition
      Transaction”),
      (ii) facilitate, encourage, solicit or initiate discussions, negotiations
      or submissions of proposals or offers in respect of an Acquisition Transaction,
      (iii) furnish or cause to be furnished, to any Person, any information
      concerning the Business or the Purchased Assets in connection with an
      Acquisition Transaction, or (iv) otherwise cooperate in any way with, or
      assist or participate in, facilitate or encourage, any effort or attempt by
      any
      other Person to do or seek any of the foregoing.

     

    
      
         

      

      
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    (b)  Parent
      and Seller shall notify Purchaser orally and in writing promptly (but in no
      event later than 24 hours) after receipt of any proposal or offer from any
      Person other than Purchaser to effect an Acquisition Transaction or any request
      for non-public information relating to the Business or for access to the
      properties, books or records of the Business by any Person other than Purchaser.
      Such notice shall indicate the identity of the Person making the proposal or
      offer, or intending to make a proposal or offer or requesting non-public
      information or access to the books and records of the Business, the material
      terms of any such proposal or offer, or modification or amendment to such
      proposal or offer and copies of any written proposals or offers or amendments
      or
      supplements thereto. Seller shall keep Purchaser informed, on a current basis,
      of any material changes in the status and any material changes or modifications
      in the material terms of any such proposal, offer, indication or
      request.

     

    (c)  Parent
      and Seller shall (and shall cause their Representatives to) immediately cease
      and cause to be terminated any existing discussions or negotiations with any
      Persons (other than Purchaser) conducted heretofore with respect to any of
      the
      foregoing. Parent and Seller agree not to release any third party from the
      confidentiality and standstill provisions of any agreement to which Seller
      or
      any of the Subsidiaries is a party, and, to the extent such agreements are
      not
      Purchased Contracts, to enforce such agreements on behalf of Purchaser at
      Purchaser’s request.

     

    7.7  Non-Competition;
      Non-Solicitation; Confidentiality.

     

    (a)  For
      a
      period from the date hereof until the date that is 18 months after the Closing
      Date, neither Parent nor Seller shall, and each shall cause its Affiliates
      not
      to, directly or indirectly, own, manage, operate, control or participate in
      the
      ownership, management, operation or control of any business, whether in
      corporate, proprietorship or partnership form or otherwise, engaged in the
      Business or that otherwise competes with the Business other than the purchase,
      sale or retention of Mortgage Loans by Parent or Seller (a “Restricted
      Business”)
      in
      North America; provided, that the restrictions contained in this Section
      7.7(a)
      shall
      not restrict Parent or Seller from acquiring, directly or indirectly, less
      than
      5% of the outstanding capital stock of any publicly traded company engaged
      in a
      Restricted Business. In addition, for the avoidance of doubt, the restrictions
      set forth in this Section
      7.7(a)
      or
      elsewhere in this Agreement shall in no way restrict Parent or Seller from
      (i)
      continuing to operate the businesses of Parent and Seller that are not included
      in the Business that is the subject of this Agreement or from engaging in any
      other business that does not constitute a Restricted Business, or (ii) entering
      into a definitive agreement with respect to, or consummating, the sale of
      Excluded Assets or the sale, merger, share exchange, consolidation or other
      business combination involving a change in control of Parent (regardless of
      whether the counterparty to any such definitive agreement engages in the
      Restricted Business); provided, that the purpose of such transaction is not
      to
      enter into the Restricted Business (either by Parent, Seller or the counterparty
      to any such agreement). The parties hereto specifically acknowledge and agree
      that the remedy at law for any breach of the foregoing will be inadequate and
      that Purchaser, in addition to any other relief available to it, shall be
      entitled to temporary and permanent injunctive relief without the necessity
      of
      proving actual damage or posting any bond whatsoever.

     

    (b)  For
      a
      period from the date hereof to the third anniversary of the Closing Date,
      neither Parent nor Seller shall, and each shall cause their respective
      Affiliates not to: (i) cause, solicit, induce or encourage any employees
      involved in the Business who are or become employees of Purchaser or its
      Affiliates to leave such employment or hire, employ or otherwise engage any
      such
      individual; or (ii) cause, induce or encourage any material actual or
      prospective client, customer, broker, correspondent, supplier, or licensor
      of
      the Business (including any existing or former client of Seller or the
      Subsidiaries and any Person that becomes a client of the Business after the
      Closing) or any other Person who has a material business relationship with
      the
      Business, to terminate or modify any such actual or prospective relationship.
      

     

    
      
         

      

      
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    (c)  Subject
      to Section
      7.9,
      from
      and after the date hereof, without the prior written consent of Purchaser (which
      consent shall not be unreasonably withheld), neither Parent nor Seller shall,
      and each shall cause their respective Affiliates and such Affiliates’ respective
      officers, and directors not to, directly or indirectly, disclose, reveal,
      divulge or communicate to any Person other than authorized officers, directors
      and employees of Purchaser or use or otherwise exploit for its own benefit
      or
      for the benefit of anyone other than the Purchaser, any Confidential Information
      (as defined below). Neither Parent nor Seller or their respective officers,
      directors and Affiliates shall have any obligation to keep confidential any
      Confidential Information if and to the extent disclosure thereof is specifically
      required by Law; provided, that in the event disclosure is required by
      applicable Law, Parent and Seller shall, to the extent reasonably possible,
      provide Purchaser with prompt notice of such requirement prior to making any
      disclosure so that Purchaser may seek an appropriate protective order. For
      purposes of this Section
      7.7(c),
      “Confidential
      Information”
shall
      mean any confidential information with respect to the Purchased Assets or the
      Business, including, methods of operation, customers, customer lists, broker
      and
      correspondent lists, products, prices, fees, costs, Technology, inventions,
      Trade Secrets, know-how, Software, marketing methods, plans, personnel,
      suppliers, competitors, markets or other specialized information or proprietary
      matters. “Confidential
      Information”
does
      not include, and there shall be no obligation hereunder with respect to,
      information that (i) is generally available to the public on the date of this
      Agreement or (ii) becomes generally available to the public other than as a
      result of a disclosure not otherwise permissible thereunder. 

     

    (d)  The
      covenants and undertakings contained in this Section
      7.7
      relate
      to matters which are of a special, unique and extraordinary character and a
      violation of any of the terms of this Section
      7.7
      will
      cause irreparable injury to the parties, the amount of which will be impossible
      to estimate or determine and which cannot be adequately compensated. Therefore,
      Purchaser will be entitled to an injunction, restraining order or other
      equitable relief from any court of competent jurisdiction in the event of any
      breach of this Section 7.7.
      The
      rights and remedies provided by this Section
      7.7
      are
      cumulative and in addition to any other rights and remedies which Purchaser
      may
      have hereunder or at law or in equity. In the event that Purchaser were to
      seek
      damages for any breach of this Section
      7.7,
      the
      portion of the Purchase Price which is allocated by the parties to the foregoing
      covenant shall not be considered a measure of or limit on such
      damages.

     

    (e)  The
      parties hereto agree that, if any court of competent jurisdiction in a final
      nonappealable judgment determines that a specified time period, a specified
      geographical area, a specified business limitation or any other relevant feature
      of this Section
      7.7
      is
      unreasonable, arbitrary or against public policy, then a lesser time period,
      geographical area, business limitation or other relevant feature which is
      determined to be reasonable, not arbitrary and not against public policy may
      be
      enforced against the applicable party.

     

    7.8  Preservation
      of Records.
      Seller
      and Purchaser each agrees that it shall preserve and keep the records held
      by it
      or its Affiliates relating to the Business for a period of three years from
      the
      Closing Date and shall make such records and personnel available to the other
      as
      may be reasonably required by such party in connection with, among other things,
      any insurance claims by, legal proceedings against or governmental
      investigations of Seller or any of its Affiliates or Purchaser or any of its
      Affiliates or in order to enable Seller or Purchaser to comply with its
      obligations under this Agreement and each other agreement, document or
      instrument contemplated hereby or thereby. In the event Seller wishes to destroy
      (or permit to be destroyed) such records after that time, Seller shall first
      give 90 days prior written notice to Purchaser and Purchaser shall have the
      right at its option and expense, upon prior written notice given to Seller
      within that 90 day period, to take possession of the records within 180 days
      after the date of such notice.

     

    
      
         

      

      
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    7.9  Publicity.
      The
      parties hereto shall consult in good faith with each other as to the form and
      substance of any press releases or other public announcements (including
      investor presentations and related presentations or outlines prepared or used
      by
      Parent or Seller), including any related question and answer guidelines prepared
      or used by Parent or Seller, related to the transactions contemplated hereby
      and
      any filings with any Governmental Body or with any national securities exchange
      or interdealer quotation service with respect thereto prior to issuing any
      press
      release or other public announcement or making any filing. Nothing in this
      Agreement shall be deemed to prohibit any party from making any disclosure
      or
      filing that it determines, upon the advice of counsel, is required by Law or
      by
      obligations pursuant to any listing agreement with or rules of any national
      securities exchange or interdealer quotation service or to prohibit Parent
      or
      Seller from making disclosures in connection with other discussions, questions
      or comments in connection with investor relations matters the principal focus
      of
      which is not specifically related to the transactions contemplated hereby
      provided that such disclosures or comments are not designed to adversely affect
      the reputation or business of Purchaser or its Affiliates.

     

    7.10  Notice
      to Pipeline Loan Mortgagors and Others.
      Purchaser and Seller shall notify each Mortgagor under the Pipeline Loans of
      the
      sale of the Pipeline Loans in accordance with applicable Laws. As promptly
      as
      reasonably practicable after the Closing Date or at such other times as may
      be
      required by applicable Law, Purchaser and Seller shall jointly notify the
      appropriate casualty and title insurance companies and agents, escrow companies,
      credit reporting agencies, appraisers and other service providers that the
      Pipeline Loans have been transferred, and instruct such entities to deliver
      all
      payments, notices, insurance statements and reports to Purchaser after the
      Closing Date.

     

    7.11  Use
      of
      Name.
      

     

    (a)  Seller
      hereby agrees that upon the consummation of the transactions contemplated
      hereby, Purchaser will operate the Business under the name “The New York
      Mortgage Company, a division of Indymac Bank, FSB” and shall have the sole right
      to the use of the trade name “The New York Mortgage Company” and any other trade
      names used in the Business and all similar names or any service marks,
      trademarks, trade names, identifying symbols, logos, emblems or signs containing
      or comprising the phrase “New York Mortgage Company,” including any name or mark
      confusingly similar thereto (collectively, the “Business
      Marks”)
      and
      Seller shall not, and shall not permit any Affiliate to, use such name or any
      variation or simulation thereof. In furtherance thereof, as promptly as
      reasonably practicable but in no event later than 180 days following the Closing
      Date, subject to Section
      7.11(b),
      Parent
      and Seller shall remove, strike over or otherwise obliterate all Business Marks
      from all materials owned by Parent and Seller and used or displayed publicly
      including, without limitation, any sales and marketing materials, displays,
      signs, promotional materials and other materials. 

     

    (b)  Notwithstanding
      the provisions of Section
      7.11(a),
      (i)
      Parent may refer to the name “The New York Mortgage Company, LLC” in any form,
      report and document (including all exhibits thereto) filed with the SEC, to
      the
      extent counsel to Parent advises Parent that such references are necessary
      or
      advisable, (ii) Parent may continue to use the name “New York Mortgage Trust,
      Inc.” and all similar names and service marks, trademarks, trade names,
      identifying symbols, logos, emblems and signs containing or comprising the
      phrase “New York Mortgage Trust” (collectively, the “Parent
      Marks”)
      and
      the domain name (the
      “Parent
      URL”)
      until
      the first anniversary of the Closing Date, (iii) Purchaser agrees to notify
      Parent promptly following any determination by Purchaser to discontinue the
      use
      of any of the Business Marks and, not less than 90 days prior to the first
      anniversary of the Closing Date, to notify Parent of Purchaser’s intentions with
      respect to the continued use or discontinued use, as the case may be, of the
      Business Marks with respect to Purchaser’s future operation of the Business,
      (iv) if Purchaser notifies Parent pursuant to clause (iii) hereof of its
      intention to continue the use of the Business Marks beyond the first anniversary
      of the Closing Date with respect to Purchaser’s operation of the Business,
      Parent and Seller (and any successor entities) shall take appropriate steps
      to
      change the name of Parent (or any successor entity) to a name that does not
      include the Parent Marks and to discontinue the use of, and transfer to
      Purchaser ownership of, the Parent Marks prior to the first anniversary of
      the
      Closing Date, provided that Parent will retain the ownership of and the right
      to
      use the Parent URL for the limited purpose of directing interested parties
      to
      the Parent’s or any successor’s new Internet website and URL, and (v) if
      Purchaser notifies Parent pursuant to clause (iii) hereof of its intention
      to
      discontinue the use of the Business Marks beyond the first anniversary of the
      Closing Date with respect to Purchaser’s operation of the Business, then Parent
      and Seller (and any successor entities) shall be permitted to continue to own
      and use the Parent Marks.

     

    
      
         

      

      
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    7.12  Real
      Property Lease Portfolio.
      Following the date of this Agreement, Seller and Purchaser shall use their
      commercially reasonable efforts to mutually agree upon a true and complete
      list
      (the “Final
      Lease Portfolio”)
      of all
      real estate-related documents compromising the leases and obligations (as such
      leases and obligations may have been amended, supplemented or otherwise
      modified) related to the Seller Properties identified in Section
      5.9(a)
      of the
      Disclosure Memorandum which Final Lease Portfolio shall be completed no later
      than 30 days after the date of this Agreement. Following the completion of
      such
      Final Lease Portfolio, Purchaser shall be entitled to remove any Seller Property
      from Section
      5.9(a)
      of the
      Disclosure Memorandum and the related real property lease shall be deemed an
      Excluded Real Property Lease for all purposes under this Agreement if: (i)
      the
      information identified in Section
      5.9(a)
      of the
      Disclosure Memorandum is materially inaccurate and such inaccuracy is reasonably
      likely to have an adverse effect on the intended operation of the Business
      at
      such location, (ii) the Final Lease Portfolio includes one or more documents
      with respect to the Seller Property that were not previously provided to
      Purchaser and which would materially increase the Liabilities to be assumed
      by
      Purchaser with respect to such property or would materially impair Purchaser’s
      intended operation of the Business at such location, or (iii) Purchaser and
      Seller are unable to mutually agree upon a true and complete list of the
      material real estate-related documents with respect to such Seller
      Property.

     

    ARTICLE
      VIII

     

    EMPLOYEES
      AND EMPLOYEE BENEFITS

     

    8.1  Employment.

     

    (a)  Transferred
      Employees.
      At
      least 15 Business Days prior to the Closing Date the parties shall mutually
      agree as to which of the Employees Purchaser may extend offers of employment
      to
      with such employment to commence immediately upon the Closing. At least five
      Business Days prior to the Closing, Purchaser shall deliver, in writing, an
      offer of employment (on an “at will” basis) to each of those mutually agreed
      upon Employees. Each such offer of employment shall be at comparable cash
      compensation levels as in effect immediately prior to the Closing Date. Such
      individuals who accept such offer by the Closing Date are hereinafter referred
      to as the “Transferred
      Employees.”
      Subject to applicable Laws, on and after the Closing Date, Purchaser shall
      have
      the right to dismiss any or all Transferred Employees at any time, with or
      without cause, and to change the terms and conditions of their employment
      (including compensation and employee benefits provided to them).

     

    (b)  Excluded
      Employees.
      Any
      Employee who is not offered employment by Purchaser prior to Closing or who
      does
      not accept an offer of employment by Purchaser and commence work with Purchaser
      immediately after the Closing, in each case pursuant to Section 8.1(a),
      is
      hereinafter referred to as an “Excluded
      Employee.”
      

     

    
      
         

      

      
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    (c)  Purchaser
      shall provide employee benefits (including, without limitation, health, life
      and
      disability insurance, but specifically excluding stock options, restricted
      stock
      or other plans involving the potential issuance of securities or equity rights)
      to Transferred Employees that are no less favorable in the aggregate to such
      Transferred Employees and any dependents and beneficiaries of such Transferred
      Employees, as appropriate, than those provided to a similarly situated employee
      of Purchaser or its Affiliates who is not a Transferred Employee, taking into
      account the employee’s performance and geographic location. Except as
      specifically set forth in the immediately preceding sentence with respect to
      benefits for Transferred Employees, nothing in this Agreement shall be construed
      as restricting Purchaser, Seller or any affiliate of the Purchaser, in the
      exercise of its independent business judgment, in modifying any of the terms
      and
      conditions of the employment of any employee following the Closing or
      terminating the employment of any employee, including any Transferred Employee,
      following the Closing. 

     

    (d)  With
      respect to the benefit plans of Purchaser in which any Transferred Employee
      participates after the Closing (each, a “Purchaser
      Benefit Plan”),
      Purchaser shall cause each such Purchaser Benefit Plan to recognize the service
      of each such Transferred Employee prior to the Closing with Seller and its
      Affiliates as employment with Purchaser and its Affiliates for purposes of
      eligibility and benefit entitlement, but not for purposes of benefit accrual,
      under each such Purchaser Benefit Plan. With respect to medical, dental and
      other health and welfare Purchaser Benefit Plans covering Transferred Employees
      as required herein, Purchaser shall waive any waiting periods or limitations
      or
      exclusions relating to pre-existing conditions to the extent that such periods,
      limitations or exclusions were not applicable to or had been satisfied by such
      Transferred Employees immediately prior to the Closing Date under applicable
      Employee Benefit Plans of Seller or its Affiliate.

     

    (e)  Purchaser
      shall not be responsible (and Seller shall be responsible) for any health and
      accident claims and expenses with respect to services provided to the
      Transferred Employees prior to the Closing. Seller shall not be responsible
      (and
      Purchaser shall be responsible) for any health and accident claims and expenses
      with respect to services provided to Transferred Employees from and after the
      Closing Date. Purchaser agrees to provide continuation coverage required by
      COBRA to all Transferred Employees and their covered beneficiaries who become
      entitled to COBRA coverage in connection with a “qualifying event” (as such term
      is defined in ERISA) that occurs after the Closing Date. Seller shall provide
      continuation coverage required by COBRA to all Transferred Employees and their
      covered beneficiaries who became entitled to COBRA coverage in connection with
      a
“qualifying event” that occurred on or before the Closing Date.

     

    (f)  Nothing
      in this Article
      VIII
      shall
      require Purchaser or Seller to provide or continue any specific plans, programs,
      policies or arrangements. Furthermore, Purchaser shall not assume any Employee
      Benefit Plan which is maintained, contributed to or required to be contributed
      to by Parent or Seller, and Seller shall retain all Liabilities and obligations
      for all benefits incurred, accrued, or legally committed to, if any, under
      such
      Employee Benefit Plans including, but not limited to, responsibility for all
      welfare plan claims incurred by Employees and all long or short-term disability
      claims arising from disabilities. For this purpose, a claim is incurred when
      the
      medical or other service giving rise to the claim is performed, except that
      in
      the case of death, a claim is incurred upon death. Seller shall retain all
      Liabilities and obligations to provide post-retirement health and life insurance
      benefits to former employees and Employees (and their covered spouses and
      dependents) incurred under the terms of the Employee Benefit Plans which is
      maintained, contributed to or required to be contributed to by Parent or
      Seller.

     

    
      
         

      

      
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    (g)  The
      Transferred Employees will be eligible to participate in a plan established,
      maintained or adopted by Purchaser which is described in Section 401(k) of
      the
      Code (individually a “Purchaser
      401(k) Plan”).
      To
      the extent permitted by the Purchaser 401(k) Plan, Section 401(k) of the Code
      and the regulations promulgated thereunder, Purchaser shall waive any applicable
      waiting period under the Purchaser 401(k) Plan with respect to the eligibility
      of such Transferred Employees to participate in such plan. To the extent
      permitted under Section 401(k) of the Code and the regulations promulgated
      thereunder, the Purchaser 401(k) Plan will provide that the Transferred
      Employees will have the right to make direct rollovers from Seller’s 401(k) plan
      to the applicable plan of their vested accounts in Purchaser’s 401(k) plan to
      the extent those rollovers constitute “eligible rollover distributions” within
      the meaning of Section 402(c)(4) of the Code. Such rollover distributions
      received by the Purchaser 401(k) Plan shall not include any participant loans.
      None of the assets involved in such rollover shall include shares of Parent
      stock. The Transferred Employees will receive credit under the Purchaser 401(k)
      Plan for all service with Seller or its Subsidiaries for purposes of satisfying
      any service requirement to participate in the applicable plan and any service
      requirement to earn a vested benefit under the applicable plan; however, such
      service shall not be credited for any other purpose under the Purchaser 401(k)
      Plan.

     

    (h)  Parent
      and Seller acknowledge that the transactions contemplated by this Agreement
      will
      require Parent or Seller to make, and Parent and Seller agree to make, certain
      payments to Excluded Employees under the Employee Benefit Plans and existing
      employment agreements, change of control agreements and severance or similar
      Contracts to which Parent or Seller are a party. Seller shall use commercially
      reasonable efforts to enter into severance agreements in the form attached
      hereto as Exhibit
      D
      (the
“Severance
      Agreements”)
      with
      the Employees listed in Section
      8.1(h)(1)
      of the
      Disclosure Memorandum obligating Seller to pay the amounts set forth in
Section
      8.1(h)(1)
      of the
      Disclosure Memorandum. Subject to the calculation of the Purchase Price
      contained in Section
      3.1
      and to
      the Excess Severance Escrow Amount, Purchaser agrees to assume (i) the Severance
      Agreements between Seller and any Employees listed in Section
      8.1(h)(1)
      of the
      Disclosure Memorandum that become Transferred Employees, and (ii) the agreements
      listed in Section
      8.1(h)(2)
      of the
      Disclosure Memorandum. Purchaser shall have no obligation to make severance
      or
      similar payments to any Excluded Employee or to any Transferred Employee other
      than those identified in Section
      8.1(h)(1)
      and
Section
      8.1(h)(2)
      of the
      Disclosure Memorandum.

     

    (i)  Seller
      shall remain liable and pay, perform and discharge any and all employment,
      compensation and employee benefit liabilities, responsibilities and obligations
      of Seller and its Affiliates including, without limitation, any and all claims
      of employment discrimination under any local, state, or federal law or
      ordinance, including, without limitation, Title VII of the Civil Rights Act
      of
      1964, as amended; the Civil Rights Act of 1991; the Americans with Disabilities
      Act of 1990; the Age Discrimination in Employment Act of 1967, as amended by
      the
      Older Workers Benefit Protection Act of 1990; and Section 510 of ERISA, which
      Liabilities, responsibilities and obligations are incurred as the result of
      incidents occurring prior to the Closing, regardless of whether claims are
      made
      or reported prior to the Closing. In the event that Purchaser or its Affiliate
      or any benefit plan maintained by Purchaser or any of its Affiliates directly
      or
      indirectly incurs any costs, liabilities, obligations or legal expenses related
      to any such incidents occurring prior to the Closing, Seller shall reimburse
      and
      indemnify Purchaser and its Affiliates for any and all such costs, liabilities,
      obligations and expenses immediately upon the demand of Purchaser.

     

    (j)  Purchaser
      shall become liable for and shall pay, perform and discharge any and all
      employment, compensation and employee benefit liabilities, responsibilities
      and
      obligations relating to the Transferred Employees including, without limitation,
      any and all claims of employment discrimination under any local, state, or
      federal law or ordinance, including, without limitation, Title VII of the Civil
      Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Americans
      with
      Disabilities Act of 1990; the Age Discrimination in Employment Act of 1967,
      as
      amended by the Older Workers Benefit Protection Act of 1990; and Section 510
      of
      ERISA, which Liabilities, responsibilities and obligations are incurred as
      the
      result of incidents occurring following the Closing.

     

    
      
         

      

      
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    (k)  Notwithstanding
      anything in this Agreement to the contrary, the terms of this Agreement shall
      not amend or have the effect of amending the terms of any Employee Benefit
      Plan
      or Purchaser Benefit Plan.

     

    8.2  Personnel
      Files.
      From
      time to time from and after the Closing Date, Seller and the Subsidiaries shall
      transfer and deliver to Purchaser the personnel files, with the exception of
      any
      medical records, of any Transferred Employee who consents to such transfer
      of
      files in writing pursuant to a consent and release in form and substance
      reasonably satisfactory to Seller (each, an “Employee Release”). Seller and the
      Subsidiaries shall have no obligation to transfer or deliver to Purchaser any
      personnel files of any Transferred Employee unless and until Seller receives
      a
      duly executed Employee Release from such Transferred Employee.

     

    8.3  Standard
      Procedure.
      Pursuant
      to the “Standard Procedure” provided in Section 4 of Revenue Procedure 96-60,
      1996-2 C.B. 399, (i) Purchaser and Seller shall report on a
      predecessor/successor basis as set forth therein, (ii) Seller will not be
      relieved from filing a Form W-2 with respect to any Transferred Employees,
      and
      (iii) Purchaser will undertake to file (or cause to be filed) a Form W-2
      for each such Transferred Employee only with respect to the portion of the
      year
      during which such Employees are employed by the Purchaser that includes the
      Closing Date, excluding the portion of such year that such Employee was
      employed
      by
      Seller or the Subsidiaries.

     

    8.4  Terminated
      Employees.
      At the
      Closing, Seller shall deliver to Purchaser a true and complete list of all
      Employees who suffered an “employment loss” as defined in WARN within 90 days
      prior to the Closing Date.

     

    8.5  Retention
      Plans.
      Seller
      shall use commercially reasonable efforts to enter into retention bonus
      agreements prior to the Closing in the form attached hereto as Exhibit
      E
      with the
      loan officers listed in Section
      8.5
      of the
      Disclosure Memorandum requiring payment of the amount for each loan officer
      set
      forth beside each loan officer’s name in Section
      8.5
      of the
      Disclosure Memorandum. 

     

    ARTICLE
      IX

     

    CONDITIONS
      TO CLOSING

     

    9.1  Conditions
      Precedent to Obligations of Purchaser.
      The
      obligation of Purchaser to consummate the transactions contemplated by this
      Agreement is subject to the fulfillment, on or prior to the Closing Date, of
      each of the following conditions (any or all of which may be waived by Purchaser
      in whole or in part to the extent permitted by applicable Law):

     

    (a)  the
      representations and warranties of Seller set forth in this Agreement that are
      qualified as to materially or that contain a Material Adverse Effect qualifier
      shall be true and correct, and those not so qualified shall be true and correct
      in all material respects, as of the date of this Agreement and as of the Closing
      as though made at and as of the Closing, except to the extent such
      representations and warranties expressly relate to an earlier date (in which
      case such representations and warranties that are qualified as to materiality
      or
      that contain a Material Adverse Effect qualifier shall be true and correct,
      and
      those not so qualified shall be true and correct in all material respects,
      on
      and as of such earlier date);

     

    (b)  Parent
      and Seller shall have performed and complied in all material respects with
      all
      obligations and agreements required in this Agreement to be performed or
      complied with by it prior to the Closing Date, and Purchaser shall have received
      copies of such corporate resolutions and other documents evidencing the
      performance thereof as Purchaser may reasonably request;

     

    
      
         

      

      
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    (c)  there
      shall not have been or occurred any event, change, occurrence or circumstance
      that has had or has a reasonable likelihood of having a Material Adverse Effect
      since the Balance Sheet Date;

     

    (d)  Purchaser
      shall have received a certificate signed by the Chief Executive Officer and
      Chief Financial Officer of Seller, each in form and substance reasonably
      satisfactory to Purchaser, dated the Closing Date, to the effect that each
      of
      the conditions specified above in Sections
      9.1(a)-(c)
      have
      been satisfied;

     

    (e)  no
      Legal
      Proceedings shall have been instituted or threatened or claim or demand made
      against Seller or Purchaser seeking to restrain or prohibit or to obtain
      substantial damages with respect to the consummation of the transactions
      contemplated hereby, and there shall not be in effect any Order by a
      Governmental Body of competent jurisdiction restraining, enjoining or otherwise
      prohibiting the consummation of the transactions contemplated
      hereby;

     

    (f)  Seller
      shall have obtained (i) any Consent, approval or authorization with respect
      to
      any significant Real Property Lease required to be obtained or made in
      connection with the execution and delivery of this Agreement or the performance
      of the transactions contemplated herein, (ii) any Consent, approval or
      authorization of any Person with respect to any Purchased Contract or Purchased
      Asset that is significant to the Business as currently conducted and that is
      required to be obtained or made in connection with the execution and delivery
      of
      this Agreement or the performance of the transactions contemplated herein,
      (iii)
      any other Consent, approval, Order or authorization of, or registration,
      declaration or filing with, any Governmental Body required to be obtained or
      made in connection with the execution and delivery of this Agreement or the
      performance of the transactions contemplated herein, and (iv) all Consents,
      waivers and approvals under all Antitrust Laws and those Consents, waivers
      and
      approvals referred to in Section
      5.3(b)
      in a
      form and substance satisfactory to Purchaser;

     

    (g)  Seller
      shall have provided Purchaser with one or more affidavits of non-foreign status
      of Seller and the Subsidiaries that complies with Section 1445 of the Code
      (a
“FIRPTA
      Affidavit”);

     

    (h)  Seller
      shall have delivered, or caused to be delivered, to Purchaser a duly executed
      bill of sale in the form of Exhibit
      F;

     

    (i)  Seller
      shall have delivered, or caused to be delivered, to Purchaser a duly executed
      assignment and assumption agreement in the form of Exhibit
      G
      and duly
      executed assignments of the registrations and applications included in the
      Purchased Intellectual Property, in a form reasonably acceptable to Purchaser
      and suitable for recording in the U.S. Patent and Trademark Office, U.S.
      Copyright Office or equivalent foreign agency, as applicable, and general
      assignments of all other Purchased Intellectual Property;

     

    (j)  Seller
      shall have delivered, or caused to be delivered, to Purchaser, opinions of
      the
      general counsel of Parent, Hunton & Williams LLP, counsel to Parent and
      Seller, and Venable LLP, as special counsel to Parent as to matters of Maryland
      law, in substantially the form of Exhibit H;
      

     

    (k)  Seller
      shall have delivered, or caused to be delivered, to Purchaser a duly executed
      Transition Services Agreement; 

     

    
      
         

      

      
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    (l)  Each
      of
      the individuals listed in Section
      9.1(l)
      of the
      Disclosure Memorandum shall have entered into employment agreements with
      Purchaser and such employment agreements shall be in full force and effect
      as of
      the Closing;

     

    (m)  Employees
      of Seller employed in a sales function (including loan officers and production
      managers) representing the threshold amount set forth in Section
      9.1(m)
      of the
      Disclosure Memorandum shall have agreed to accept employment with Purchaser
      and
      become Transferred Employees.

     

    (n)  Seller
      shall have delivered, or caused to be delivered, to Purchaser (i) certified
      copies of the resolutions of the Board of Directors of Seller and Parent, in
      each case authorizing and approving this Agreement and the consummation of
      the
      transactions contemplated hereby, (ii) a copy of the articles of organization
      or
      any other similar organizational or governing document of Seller and each
      Subsidiary certified as of a recent date by the Secretary of State of the
      jurisdiction of incorporation or organization of each such Person, (iii) a
      copy
      of the bylaws, partnership or limited liability company agreement, or any other
      similar organizational or governing document of Seller and each Subsidiary
      certified by the Secretary of Seller and each Subsidiary, and (iv) certificates
      of good standing for Seller and each Subsidiary from the Secretary of State
      of
      the state of their respective incorporation or organization, in each case dated
      not more than ten days prior to the Closing Date; 

     

    (o)  Seller
      shall have delivered, or caused to be delivered, to Purchaser the Escrow
      Agreement, duly executed by Seller and the Escrow Agent; and

     

    (p)  Seller
      shall have delivered, or caused to be delivered, to Purchaser such other
      documents as Purchaser may reasonably request in order to consummate the
      transactions contemplated under this Agreement.

     

    9.2  Conditions
      Precedent to Obligations of Seller.
      The
      obligations of Seller to consummate the transactions contemplated by this
      Agreement are subject to the fulfillment, prior to or on the Closing Date,
      of
      each of the following conditions (any or all of which may be waived by Seller
      in
      whole or in part to the extent permitted by applicable Law):

     

    (a)  the
      representations and warranties of Purchaser set forth in this Agreement that
      are
      qualified as to materiality or that contain a Material Adverse Effect qualifier
      shall be true and correct, and those not so qualified shall be true and correct
      in all material respects, as of the date of this Agreement and as of the Closing
      as though made at and as of the Closing, except to the extent such
      representations and warranties expressly relate to an earlier date (in which
      case such representations and warranties that are qualified as to materially
      or
      that contain a Material Adverse Effect qualifier shall be true and correct,
      and
      those not so qualified shall be true and correct in all material respects,
      on
      and as of such earlier date);

     

    (b)  Purchaser
      shall have performed and complied in all material respects with all obligations
      and agreements required by this Agreement to be performed or complied with
      by
      Purchaser on or prior to the Closing Date;

     

    (c)  there
      shall not be in effect any Order by a Governmental Body of competent
      jurisdiction restraining, enjoining or otherwise prohibiting the consummation
      of
      the transactions contemplated hereby;

     

    (d)  Purchaser
      shall have obtained any other Consent, approval, Order or authorization of,
      or
      registration, declaration or filing with, any Governmental Body, including
      the
      OTS and FDIC (if applicable), required to be obtained or made in connection
      with
      the execution and delivery of this Agreement or the performance of the
      transactions contemplated herein;

     

    
      
         

      

      
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    (e)  Purchaser
      shall have delivered, or caused to be delivered, to Seller evidence of the
      wire
      transfer referred to in Section
      3.3;
      

     

    (f)  Purchaser
      shall have delivered, or caused to be delivered, to Seller the Escrow Agreement,
      duly executed by Purchaser; and

     

    (g)  Purchaser
      shall have delivered, or caused to be delivered, to Seller a duly executed
      assignment and assumption agreement in the form attached hereto as Exhibit G.

     

    ARTICLE
      X

     

    INDEMNIFICATION

     

    10.1  Survival
      of Representations and Warranties.
      The
      representations and warranties of the parties contained in Articles
      V
      and
VI
      of this
      Agreement or any Seller Document or Purchaser Document shall survive the Closing
      through and including the second anniversary of the Closing Date; provided,
      that
      the representations and warranties (a) of Seller set forth in Sections
      5.1
      (organization), 5.2
      (authorization), 5.6
      (title)
      and 5.22
      (financial advisors) shall survive the Closing indefinitely, (b) of Seller
      set
      forth in Sections
      5.13
      (employee benefits), 5.17
      (environmental matters) and 5.19
      (loan
      origination) shall survive the Closing through and including the third
      anniversary of the Closing Date, (c) of Seller set forth in Section
      5.8
      (taxes)
      shall survive the Closing until sixty (60) days following the expiration of
      the
      applicable statute of limitations with respect to the particular matter that
      is
      the subject matter thereof and (d) of Purchaser set forth in Sections
      6.1
      (organization), 6.2
      (authorization) and 6.5
      (financial advisors) shall survive the Closing indefinitely (in each case,
      the
“Survival
      Period”);
      provided, further, that any obligation to indemnify and hold harmless shall
      not
      terminate with respect to any Losses as to which the Person to be indemnified
      shall have given notice (stating in reasonable detail the basis of the claim
      for
      indemnification) to the indemnifying party in accordance with Section
      10.3(a)
      before
      the termination of the applicable Survival Period. Unless a specified period
      is
      set forth in this Agreement (in which event such specified period will control),
      the covenants and other agreements in this Agreement will survive the Closing
      and remain in effect indefinitely.

     

    10.2  Indemnification.

     

    (a)  Subject
      to Sections
      10.1,
      10.4
      and
10.5,
      Seller
      hereby agrees to indemnify and hold Purchaser and its directors, officers,
      employees, Affiliates, stockholders, agents, attorneys, representatives,
      successors and assigns (collectively, the “Purchaser
      Indemnified Parties”)
      harmless from and against:

     

    (i)  any
      and
      all losses, Liabilities, claims, demands, judgments, obligations, damages
      (including incidental and consequential damages), costs and expenses (including
      reasonable costs of investigation and reasonable defense and attorneys’ and
      other professionals’ fees incurred in connection with the investigation and
      defense of any Third Party Claim and any other indemnification claim pursuant
      to
      which an indemnified party receives a payment or payments from the indemnifying
      party for such indemnification claim) (individually, a “Loss”
and,
      collectively, “Losses”)
      based
      upon, attributable to or resulting from the failure of any of the
      representations or warranties of Parent or Seller set forth in this Agreement
      or
      in any Seller Document to be true and correct in all respects at the date hereof
      and at the Closing Date;

     

    
      
         

      

      
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    (ii)  any
      and
      all Losses based upon, attributable to or resulting from the breach of any
      covenant or other agreement on the part of Parent or Seller under this Agreement
      or any Seller Document; 

     

    (iii)  any
      and
      all Losses attributable to any Transferred Employee resulting from or based
      upon
      (A) any employment-related Liability (statutory or otherwise) with respect
      to
      employment or termination of employment on or prior to the Closing Date, (B)
      except as set forth in the Transition Services Agreement, any Liability relating
      to, arising under or in connection with any Employee Benefit Plan, including
      any
      Liability under COBRA, whether arising prior to, on or within three years after
      the Closing Date and (C) any liability under WARN;

     

    (iv)  any
      Liabilities resulting from payment by Purchaser of retention payments pursuant
      to the retention bonus agreements contemplated by Section
      8.5
      in
      excess of the aggregate payments set forth in Section
      8.5
      of the
      Disclosure Memorandum; and

     

    (v)  any
      and
      all Losses arising out of, based upon or relating to any Excluded Asset,
      Excluded Liability or Excluded Employee or to Seller’s operation of the Business
      prior to the Closing.

     

    (b)  Subject
      to Sections
      10.1
      and
10.4,
      Purchaser hereby agrees to indemnify and hold Seller and its Affiliates,
      stockholders, agents, attorneys, representatives, successors and permitted
      assigns (collectively, the “Seller
      Indemnified Parties”)
      harmless from and against:

     

    (i)  any
      and
      all Losses based upon, attributable to or resulting from the failure of any
      of
      the representations or warranties of Purchaser set forth in this Agreement
      or
      any Purchaser Document, to be true and correct at the date hereof and at the
      Closing Date;

     

    (ii)  any
      and
      all Losses based upon, attributable to or resulting from the breach of any
      covenant or other agreement on the part of Purchaser under this Agreement or
      any
      Purchaser Document; and

     

    (iii)  any
      and
      all Losses arising out of, based upon or relating to any Assumed Liability;
      and

     

    (iv) any
      and
      all Losses arising out of, based upon or relating to Purchaser’s operation of
      the Business, any Purchased Asset, Assumed Liability or Transferred Employee,
      in
      each case arising after the Closing.

     

    (c)  The
      right
      to indemnification or any other remedy provided for herein based on
      representations, warranties, covenants and agreements in this Agreement shall
      not be affected by any investigation conducted with respect to, or any knowledge
      acquired (or capable of being acquired) at any time, whether before or after
      the
      execution and delivery of this Agreement or the Closing Date, with respect
      to
      the accuracy or inaccuracy of or compliance with, any such representation,
      warranty, covenant or agreement. 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 agreements, will not affect the right to
      indemnification or any other remedy provided for herein based on such
      representations, warranties, covenants and agreements.

     

    (d) The
      rights to indemnification set forth in this Section
      10.2
      are
      subject to the terms, conditions, procedures and limitations set forth in this
      Article
      X
      and will
      be the exclusive remedy of each Party against the other for money damages with
      respect to this Agreement or any of the transactions contemplated hereby;
      provided, that the limitations (including the immediately preceding clause
      providing for exclusivity of remedy) set forth in this Article
      X
      shall
      not apply to any Losses caused by the willful misconduct, fraud, or bad faith
      of
      any indemnifying party, and the indemnifying party shall be liable for all
      Losses with respect thereto.

     

    
      
         

      

      
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    10.3  Indemnification
      Procedures.

     

    (a)  A
      claim
      for indemnification for any matter not involving a third party claim may be
      asserted by written notice to the party from whom indemnification is sought,
      which notice shall include a reasonable description of the basis for the
      claim.

     

    (b)  In
      the
      event that any Legal Proceedings shall be instituted or that any claim or demand
      shall be asserted by any third party in respect of which payment may be sought
      under Section
      10.2
      hereof
      (“Third
      Party Claim”),
      the
      indemnified party shall reasonably and promptly cause written notice of the
      assertion of any Third Party Claim of which it has knowledge which is covered
      by
      this indemnity to be forwarded to the indemnifying party. The indemnifying
      party
      shall have the right, at its sole expense, to be represented by counsel of
      its
      choice, which must be reasonably satisfactory to the indemnified party, and
      to
      defend against, negotiate, settle or otherwise deal with any Third Party Claim
      which relates to any Losses for which indemnification is sought hereunder.
      If
      the indemnifying party elects to defend against, negotiate, settle or otherwise
      deal with any Third Party Claim which relates to any Losses for which
      indemnification is sought hereunder, it shall within ten days (or sooner, if
      the
      nature of the Third Party Claim so requires) notify the indemnified party of
      its
      intent to do so. If the indemnifying party elects not to defend against,
      negotiate, settle or otherwise deal with any Third Party Claim which relates
      to
      any Losses for which indemnification is sought hereunder, fails to notify the
      indemnified party of its election as herein provided the indemnified party
      may
      then, but only then, defend against, negotiate, settle or otherwise deal with
      such Third Party Claim. If the indemnified party defends any Third Party Claim,
      then the indemnifying party shall reimburse the indemnified party for the
      reasonable expenses of defending such Third Party Claim upon submission of
      periodic bills. If the indemnifying party shall assume the defense of any Third
      Party Claim, the indemnified party may participate, at his or its own expense,
      in the defense of such Third Party Claim; provided, that such indemnified party
      shall be entitled to participate in any such defense with separate counsel
      at
      the expense of the indemnifying party if (i) so requested by the indemnifying
      party to participate or (ii) in the reasonable opinion of counsel to the
      indemnified party a conflict or potential conflict exists between the
      indemnified party and the indemnifying party that would make such separate
      representation advisable; and provided, further, that the indemnifying party
      shall not be required to pay for more than one such counsel (and any appropriate
      local counsel) for all indemnified parties in connection with any Third Party
      Claim. The parties hereto agree to cooperate fully with each other in connection
      with the defense, negotiation or settlement of any such Third Party Claim.
      Notwithstanding anything in this Section
      10.3
      to the
      contrary, neither the indemnifying party nor the indemnified party shall,
      without the written consent of the other party, settle or compromise any Third
      Party Claim or permit a default or consent to entry of any judgment unless
      the
      claimant and such party provide to such other party an unqualified release
      from
      all liability in respect of the Third Party Claim. Notwithstanding the
      foregoing, if a settlement offer solely for money damages is made by the
      applicable third party claimant, and the indemnifying party notifies the
      indemnified party in writing of the indemnifying party’s willingness to accept
      the settlement offer and, subject to the applicable limitations of Section
      10.4,
      pay the
      amount called for by such offer, and the indemnified party declines to accept
      such offer, the indemnified party may continue to contest such Third Party
      Claim, free of any participation by the indemnifying party, and the amount
      of
      any ultimate liability with respect to such Third Party Claim that the
      indemnifying party has an obligation to pay hereunder shall be limited to the
      lesser of (A) the amount of the settlement offer that the indemnified party
      declined to accept plus the Losses of the indemnified party relating to such
      Third Party Claim through the date of its rejection of the settlement offer
      or
      (B) the aggregate Losses of the indemnified party with respect to such
      Third Party Claim. If the indemnifying party makes any payment on any Third
      Party Claim, the indemnifying party shall be subrogated, to the extent of such
      payment, to all rights and remedies of the indemnified party to any insurance
      benefits or other claims of the indemnified party with respect to such Third
      Party Claim.

     

    
      
         

      

      
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    (c)  After
      any
      final judgment or award shall have been rendered by a Governmental Body of
      competent jurisdiction and the expiration of the time in which to appeal
      therefrom, or a settlement shall have been consummated, or the indemnified
      party
      and the indemnifying party shall have arrived at a mutually binding agreement
      with respect to an Third Party Claim hereunder, the indemnified party shall
      forward to the indemnifying party notice of any sums due and owing by the
      indemnifying party pursuant to this Agreement with respect to such matter and
      the indemnifying party shall be required to pay all of the sums so due and
      owing
      to the indemnified party by wire transfer of immediately available funds within
      five Business Days after the date of such notice; provided, that Purchaser
      may
      cause a distribution from the Escrow Amount maintained by the Escrow Agent
      pursuant to Section
      3.5
      of this
      Agreement and the Escrow Agreement up to the Indemnification Escrow Amount
      in
      partial or total satisfaction of one or more indemnification payments due from
      Seller to Purchaser under this Article
      X.

     

    (d)  The
      failure of the indemnified party to give reasonably prompt notice of any Third
      Party Claim shall not release, waive or otherwise affect the indemnifying
      party’s obligations with respect thereto except to the extent that the
      indemnifying party can demonstrate actual loss and prejudice as a result of
      such
      failure.

     

    (e)  In
      the
      event that Purchaser repurchases any Pipeline Loans sold to investors or any
      other Person by Purchaser under facts or circumstances in which Seller would
      be
      obligated to indemnify Purchaser pursuant to this Agreement, then Seller may
      elect to repurchase such Pipeline Loans from Purchaser instead of indemnifying
      Purchaser pursuant to this Article
      X.
      To
      exercise its right to repurchase any Pipeline Loan under this Section
      10.3(e),
      Seller
      must provide Purchaser with written notice of such election within five Business
      Days of receipt of notice from Purchaser pursuant to this Section
      10.3
      of an
      indemnification claim for which Purchaser is seeking indemnification from
      Seller. The purchase price for any Pipeline Loan which Seller elects to
      repurchase from Purchaser pursuant to this Section
      10.3(e)
      shall be
      equal to the sum of (i) the purchase price paid by Purchaser to repurchase
      such
      Pipeline Loan plus
      (ii)
      Purchaser’s actual out-of-pocket costs and expenses for holding, servicing and
      administering such Pipeline Loan prior to the repurchase of such Pipeline Loan
      by Seller less
      (iii)
      any principal or interest paid by the borrower to Purchaser with respect to
      such
      Pipeline Loan. 

     

    10.4  Limitations
      on Indemnification.

     

    (a)  Seller
      shall not have any liability under Section
      10.2(a)(i)
      and
      Purchaser shall not have any liability under Section
      10.2(b)(i)
      unless
      and until the aggregate amount of Losses to the indemnified parties finally
      determined to arise thereunder based upon, attributable to or resulting from
      the
      failure of any of the representations or warranties (other than the
      representations and warranties set forth in Sections
      5.2
      (authorization), 5.6
      (title),
5.19(b)
      and (c)
      (loan
      originations), 5.22
      (financial advisors), 6.2
      (authorization) and 6.5
      (financial advisors)) to be true and correct exceeds $250,000 (the “Deductible”)
      and,
      in such event, the indemnifying party shall be required to pay only the amount
      of such Losses that exceeds the Deductible. No claim for Losses may be made
      for
      indemnification or aggregated with any other claim for indemnification pursuant
      to Section
      10.2(a)(i)
      or
Section
      10.2(b)(i)
      if the
      amount of such claim does not exceed $7,500 (the “Per
      Item Deductible”);
      provided, that the Per Item Deductible shall not apply to any claims for
      indemnification pursuant to Section
      10.2(a)(i)
      or
Section
      10.2(b)(i)
      based
      upon, attributable to or resulting from the failure of any of the
      representations and warranties set forth in Sections
      5.2
      (authorization), 5.6
      (title),
5.19(b)
      and (c)
      (loan
      originations), 5.22
      (financial advisors), 6.2
      (authorization) and 6.5
      (financial advisors) to be true and correct in all respects at the date hereof
      and at the Closing Date.

     

    
      
         

      

      
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    (b)  No
      claim
      for Losses may be made for indemnification or aggregated with any other claim
      for indemnification by Purchaser under Section
      10.2(a)(ii)
      or
      Seller under Section
      10.2(b)(ii)
      if the
      amount of such claim does not exceed the Per Item Deductible (other than the
      covenants, agreements and obligations set forth in Sections
      2.6
      (further
      conveyances and assumptions; consents of third parties), 2.7
      (bulk
      sales laws), 7.5
      (further
      assurances), 7.6
      (no
      shop), and 7.7
      (non-competition; non-solicitation; confidentiality)).

     

    (c)  Neither
      Seller nor Purchaser shall be required to indemnify, any Person under
Section
      10.2(a)(i)
      or
10.2(b)(i)
      for an
      aggregate amount of Losses exceeding 10% of the Purchase Price (the
“Cap”)
      in
      connection with Losses related to the breach of any of the representations
      and
      warranties of Seller or Purchaser in Articles V
      and
VI,
      respectively; provided, that the Cap limitation shall not apply to Losses
      related to the breach of any representation or warranty contained in
Sections
      5.2
      (authorization), 5.6
      (title),
5.19(b)
      and (c)
      (loan
      origination), 5.22
      (financial advisors), 6.2
      (authorization) and 6.5
      (financial advisors). Neither Seller nor Purchaser shall be required to
      indemnify, any Person under Sections
      10.2(a)(ii)
      or
10.2(b)(ii)
      for
      breaches of the covenants, agreements or obligations set forth in Section
      7.3
      (consents) (but only to the extent that any such breach occurred after the
      Closing), and Sections
      7.8
      (preservation of records), 7.9
      (publicity), 7.10
      (notice
      to pipeline loan mortgagors and others) and 7.11
      (use of
      name) for an aggregate amount of Losses exceeding 25% of the Purchase
      Price.

     

    (d)  For
      purposes of (i) determining whether any representation or warranty was true
      and
      correct on the date hereof or as of the Closing Date, (ii) determining whether
      any covenant, agreement or obligation under this Agreement was breached, or
      (iii) calculating Losses hereunder, any materiality or Material Adverse Effect
      qualifications in the representations, warranties, covenants and agreements
      shall be disregarded.

     

    10.5  Tax
      Treatment of Indemnity Payments.
      Seller
      and Purchaser agree to treat any indemnity payment made pursuant to this
Article
      X
      as an
      adjustment to the Purchase Price for all Tax purposes. Notwithstanding the
      treatment required by the preceding sentence, the
      Liability of the indemnifying party with respect to any Losses shall be reduced
      by the Tax benefit actually realized and any insurance proceeds received by
      the
      indemnified party as a result of any Losses upon which an indemnification claim
      is based, and shall include any Tax detriment actually suffered by the
      indemnified party as a result of such Losses and any payment under this
Article
      X.

     

    ARTICLE
      XI

     

    TAXES

     

    11.1  Transfer
      Taxes.
      Seller
      and Purchaser shall share equally any and all sales, use, stamp, documentary,
      filing, recording, transfer, real estate transfer, stock transfer, gross
      receipts, registration, duty, securities transactions or similar fees or taxes
      or governmental charges (together with any interest or penalty, addition to
      tax
      or additional amount imposed) as levied by any Taxing Authority in connection
      with the transactions contemplated by this Agreement (collectively,
“Transfer
      Taxes”),
      regardless of the Person liable for such Transfer Taxes under applicable Law.
      Seller shall timely file or caused to be filed, with the cooperation of
      Purchaser, all necessary documents (including all Tax Returns) with respect
      to
      Transfer Taxes.

     

    11.2  Prorations.
      All
      real property taxes, personal property taxes, or ad valorem obligations and
      similar recurring taxes and fees on the Purchased Assets for taxable periods
      beginning before, and ending after, the Closing Date, shall be prorated between
      Purchaser and Sellers as of the Closing Date. Seller shall be responsible for
      all such taxes and fees on the Purchased Assets accruing during any period
      up to
      and including the Closing Date. Purchaser shall be responsible for all such
      taxes and fees on the Purchased Assets accruing during any period after the
      Closing Date. With respect to Taxes described in this Section
      11.2,
      unless
      otherwise required by Law, Seller shall timely file all Tax Returns due before
      the Closing Date with respect to such Taxes and Purchaser shall prepare and
      timely file all Tax Returns due after the Closing Date with respect to such
      Taxes. If one party remits to the appropriate Taxing Authority payment for
      Taxes
      which are subject to proration under this Section
      11.2
      and such
      payment includes the other party’s share of such Taxes, such other party shall
      promptly reimburse the remitting party for its share of such Taxes upon demand
      therefor, accompanied by reasonably satisfactory evidence of such
      payment.

     

    
      
         

      

      
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    11.3  Cooperation
      on Tax Matters.
      Purchaser and Seller shall furnish or cause to be furnished to each other,
      as
      promptly as practicable, such information and assistance relating to the
      Purchased Assets and the Assumed Liabilities as is reasonably necessary for
      the
      preparation and filing of any Tax Return, claim for refund or other filings
      relating to Tax matters, for the preparation for any Tax audit, for the
      preparation for any Tax protest, and for the prosecution or defense of any
      suit
      or other proceeding relating to Tax matters.

     

    ARTICLE
      XII

     

    MISCELLANEOUS

     

    12.1  Expenses.
      Except
      as otherwise provided in this Agreement, each of Seller and Purchaser shall
      bear
      its own expenses incurred in connection with the negotiation and execution
      of
      this Agreement and each other agreement, document and instrument contemplated
      by
      this Agreement and the consummation of the transactions contemplated hereby
      and
      thereby.

     

    12.2  Submission
      to Jurisdiction; Consent to Service of Process; Waiver of Jury
      Trial.

     

    (a)  The
      parties hereto hereby irrevocably submit to the non-exclusive jurisdiction
      of
      any federal or state court located within the State of California over any
      dispute arising out of or relating to this Agreement or any of the transactions
      contemplated hereby and each party hereby irrevocably agrees that all claims
      in
      respect of such dispute or any suit, action proceeding related thereto may
      be
      heard and determined in such courts. The parties hereby irrevocably waive,
      to
      the fullest extent permitted by applicable Law, any objection which they may
      now
      or hereafter have to the laying of venue of any such dispute brought in such
      court or any defense of inconvenient forum for the maintenance of such dispute.
      Each of the parties hereto agrees that a judgment in any such dispute may be
      enforced in other jurisdictions by suit on the judgment or in any other manner
      provided by Law.

     

    (b)  EACH
      PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
      ARISE
      UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES,
      AND
      THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
      RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
      DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY
      DOCUMENT REFERRED TO IN THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
      AND THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE,
      AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
      THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
      THE
      FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE
      IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER
      VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
      AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
      THIS
      SECTION 12.2.

     

    
      
         

      

      
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    (c)  Each
      of
      the parties hereto hereby consents to process being served by any party to
      this
      Agreement in any suit, action or proceeding by the delivery of a copy thereof
      in
      accordance with the provisions of Section 12.5.

     

    12.3  Entire
      Agreement; Amendments and Waivers.
      This
      Agreement (including the schedules and exhibits hereto and the Disclosure
      Memorandum and Purchaser Disclosure Memorandum) represents the entire
      understanding and agreement between the parties hereto with respect to the
      subject matter hereof. This Agreement can be amended, supplemented or changed,
      and any provision hereof can be waived, only by written instrument making
      specific reference to this Agreement signed by the party against whom
      enforcement of any such amendment, supplement, modification or waiver is sought.
      No action taken pursuant to this Agreement, including any investigation by
      or on
      behalf of any party, shall be deemed to constitute a waiver by the party taking
      such action of compliance with any representation, warranty, covenant or
      agreement contained herein. The waiver by any party hereto of a breach of any
      provision of this Agreement shall not operate or be construed as a further
      or
      continuing waiver of such breach or as a waiver of any other or subsequent
      breach. No failure on the part of any party to exercise, and no delay in
      exercising, any right, power or remedy hereunder shall operate as a waiver
      thereof, nor shall any single or partial exercise of such right, power or remedy
      by such party preclude any other or further exercise thereof or the exercise
      of
      any other right, power or remedy. All remedies hereunder are cumulative and
      are
      not exclusive of any other remedies provided by Law.

     

    12.4  Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the law of
      the
      State of New York applicable to contracts made and performed in such
      State.

     

    12.5  Notices.
      All
      notices and other communications under this Agreement shall be in writing and
      shall be deemed given (i) when delivered personally by hand (with written
      confirmation of receipt), (ii) when sent by facsimile (with written confirmation
      of transmission) or (iii) one Business Day following the day sent by overnight
      courier (with written confirmation of receipt), in each case at the following
      addresses and facsimile numbers (or to such other address or facsimile number
      as
      a party may have specified by notice given to the other party pursuant to this
      provision):

     

    If
      to
      Parent or Seller, to:

     

    The
      New
      York Mortgage Company, LLC

    1301
      Avenue of the Americas, 7th Floor

    New
      York,
      NY 10019

    Facsimile:
      212-621-4523

    Attention:
      A. Bradley Howe, general Counsel

     

    With
      a
      copy to:

     

    Hunton
      & Williams LLP 

    Riverfront
      Plaza, East Tower 

    951
      East
      Byrd Street 

    Richmond,
      VA 23219-4074

    Facsimile:
      804-343-4543

    Attention:
      Daniel M. LeBey

     

    
      
         

      

      
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    If
      to
      Purchaser, to:

     

    IndyMac
      Bank, F.S.B.

    888
      East
      Walnut Street

    Pasadena,
      CA 91101

    Facsimile:
      626-432-8949

    Attention:
      Donald D. Bundy, Mortgage Bank General Counsel

     

    With
      a
      copy to:

     

    Alston
      & Bird LLP

    The
      Atlantic Building

    950
      F
      Street, N.W.

    Washington,
      D.C. 20004

    Facsimile:
      202-756-3333

    Attention:
      Michael P. Reed

     

    12.6  Severability.
      If any
      term or other provision of this Agreement is invalid, illegal, or incapable
      of
      being enforced by any law or public policy, all other terms or provisions of
      this Agreement shall nevertheless remain in full force and effect so long as
      the
      economic or legal substance of the transactions contemplated hereby is not
      affected in any manner materially adverse to any party. Upon such determination
      that any term or other provision is invalid, illegal, or incapable of being
      enforced, the parties hereto shall negotiate in good faith to modify this
      Agreement so as to effect the original intent of the parties as closely as
      possible in an acceptable manner in order that the transactions contemplated
      hereby are consummated as originally contemplated to the greatest extent
      possible.

     

    12.7  Binding
      Effect; Assignment.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective successors and permitted assigns. Nothing in this Agreement
      shall create or be deemed to create any third party beneficiary rights in any
      person or entity not a party to this Agreement except as provided below. No
      assignment of this Agreement or of any rights or obligations hereunder may
      be
      made by either Seller or Purchaser (by operation of law or otherwise) without
      the prior written consent of the other parties hereto and any attempted
      assignment without the required consents shall be void; provided, that Purchaser
      may assign this Agreement and any or all rights or obligations hereunder
      (including, without limitation, Purchaser’s rights to purchase the Purchased
      Assets and assume the Assumed Liabilities and Purchaser’s rights to seek
      indemnification hereunder) to any Affiliate of Purchaser, or any Person to
      which
      Purchaser or any of its Affiliates proposes to sell all or substantially all
      of
      the assets relating to the Business. Upon any such permitted assignment, the
      references in this Agreement to Purchaser shall also apply to any such assignee
      unless the context otherwise requires.

     

    12.8  Knowledge.
      When
      references are made in this Agreement to information being to the “Knowledge
      of Parent”
or
      “Knowledge
      of Seller”
or
      similar language, such knowledge shall refer to the knowledge of the individuals
      listed in Section
      12.8
      of the
      Disclosure Memorandum. Such individuals shall be deemed to have “knowledge”
of
      a
      particular fact or other matter if: (x) such individual is actually aware of
      such fact or other matter; or (y) a prudent individual could be expected to
      discover or otherwise become aware of such fact or other matter in the course
      of
      conducting a reasonably comprehensive investigation concerning the existence
      of
      such fact or other matter.

     

    
      
         

      

      
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    12.9  Disclosure
      Memorandum.
      

     

    (a)  Concurrently
      with the execution and delivery of this Agreement, Parent and Seller are
      delivering to Purchaser a disclosure memorandum (the “Disclosure
      Memorandum”)
      that
      sets forth all of the items that are necessary or appropriate either in response
      to an express disclosure requirement contained in a provision hereof or as
      an
      exception to one or more representations or warranties contained in Article
      V or
      to one or more of the covenants of Seller contained in this Agreement; provided,
      that the mere inclusion of an item in the Disclosure Memorandum as an exception
      to a representation or warranty shall not be deemed an admission by Parent
      or
      Seller that such item represents a material exception or event, state of facts,
      circumstance, development, change or effect or that such item is reasonably
      likely to have or result in a Material Adverse Effect; provided, further, that
      any disclosures made with respect to a section or subsection of this Agreement
      shall be deemed to qualify such sections or subsections specifically referenced
      or cross-referenced, as well as other sections or subsections to the extent
      such
      disclosure is readily apparent as constituting disclosure in respect of such
      other sections or subsections.

     

    (b)  In
      the
      event of an inconsistency between the statements in the body of this Agreement
      and those in such Disclosure Memorandum (other than an exception expressly
      set
      forth in the Disclosure Schedule with respect to a specifically identified
      section or subsection), the statements in the body of this Agreement will
      control.

     

    12.10  Parent
      Agreements and Obligations.
      

     

    (a)  Parent
      hereby agrees to be jointly and severally liable for the prompt and complete
      performance of Seller’s obligations under this Agreement, including its
      indemnification obligations under Article
      X,
      subject
      to the same terms, conditions, procedural requirements and limitations that
      apply to Seller’s obligations hereunder, as if Parent had delivered or made the
      same representations, warranties, covenants and agreements that Seller has
      delivered or made hereunder, on a joint and several basis. Parent’s obligations
      hereunder are unconditional (other than with respect to the conditions
      applicable to Seller hereunder) irrespective of any circumstances which might
      otherwise constitute, by operation of law, a discharge of a guarantor and it
      shall not be necessary for Purchaser to institute or exhaust any remedies or
      causes of action against Seller or any other Person as a condition to the
      obligations of Parent hereunder.

     

    (b)  Parent
      hereby irrevocably waives any right to receive a separate formal notification
      or
      to request that any other formalities or protest be accomplished as a condition
      to its obligations hereunder, and expressly undertakes not to exercise, and
      waives to the fullest extent lawful, any rights that it may have under
      applicable law.

     

    12.11  Non-Recourse.
      No
      past, present or future director, officer, employee, incorporator, member,
      partner, stockholder, Affiliate, agent, attorney or representative of Purchaser
      or its Affiliates shall have any liability for any obligations or liabilities
      of
      Purchaser under this Agreement or the Purchaser Documents of or for any claim
      based on, in respect of, or by reason of, the transactions contemplated hereby
      and thereby.

     

    12.12  Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which will be
      deemed to be an original copy of this Agreement and all of which, when taken
      together, will be deemed to constitute one and the same agreement.

     

    [Signatures
      on following page]

     

    
      
         

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      by
      their respective officers thereunto duly authorized as of the date first written
      above.

     

    
      	 	 	 
	 	INDYMAC
              BANK,
              F.S.B.
	 
 	 
 	 
 
	 	By:  	/s/ Michael W. Perry
	 	
              
Name:
              Michael W. Perry
	 	Title:
              Chairman and Chief Executive
              Officer 

    

     

    
      	 	 	 
	 	THE
              NEW YORK
              MORTGAGE COMPANY, LLC
	 
 	 
 	 
 
	 	By:  	/s/ Steven R. Mumma
	 	
              
Name:
              Steven R. Mumma
	 	Title:
              Chief Financial Officer 

    

     

    
      	 	 	 
	 	NEW
              YORK MORTGAGE
              TRUST, INC.
	 
 	 
 	 
 
	 	By:  	/s/ David A. Akre
	 	
              
Name:
              David A. Akre
	 	Title:
              Co-Chief Executive OfficerFACTORING
      AND SECURITY AGREEMENT

    $75,000.00
      FACTORING FACILITY

    

    This
      Factoring and Security Agreement, dated as of April 25, 2005 is between
      World-Am, Inc, a Nevada corporation, (the "Client") and J.J. Ellis, LLC, a
      Florida Limited Liability Company (the "Factor").

    

    In
      consideration of the respective promises, representations, warranties, covenants
      and agreements contained herein, Client and Factor agree as
      follows:

    

    1. PURCHASE
      AND SALE OF ACCOUNTS RECEIVABLE

    

    
      	(a)	
              Client
                hereby sells, assigns, transfers, conveys and delivers to Factor,
                and
                Factor purchases and accepts from Client upon the terms and conditions
                set
                forth herein, all of Client's right, title and interest in and to
                (i)
                accounts receivable which are accepted for purchase by Factor as
                described
                in Section 1(b) accounts receivable which are created by Client,
                which
                Factor accepts and purchases them, are defined herein as "Accounts";
                the
                term "Accepted Accounts" is defined herein as Accounts which are
                accepted
                for purchase by Factor) and (ii) all guarantees and security for
                Accepted
                Accounts, and all merchandise or Client services represented by Accepted
                Accounts, including all of Client's rights to returned goods and
                rights of
                stoppage in transit, replacement and reclamation as an unpaid vendor
                (with
                respect to each Accepted Account, such guarantees, security and rights
                are
                called "Rights").

            

    

     

    
      	(b)	
              Client
                shall submit Accounts to Factor, to be put on a schedule of accounts
                ("Schedule") in the form of Exhibit A. Factor is only obligated to
                purchase Accounts when it accepts the Accounts by signing the Schedule;
                any Accounts which are crossed out by Factor are not accepted for
                purchase. Factor may refuse to purchase any Account for any reason
                whatsoever, in Factor's sole discretion. It is hereby agreed and
                understood that Factor may verify, with the Account Debtor (each
                of the
                terms "Account Debtor" and "Debtor" is defined herein as a customer
                of
                Client), the amount, validity, due date and absence of adjustments
                and
                offsets, of some or all of the Accounts prior to Factor' acceptance
                of
                such Accounts.

            

    

    

    
      	(c)	
              At
                the time the Schedule is presented, Client shall also deliver to
                Factor
                the original and/or a copy of an invoice for each Account, together
                with
                evidence of shipment and the Account Debtor’s purchase
                order.

            

    

    

    
      	(d)	
              Each
                and every payment on each and every Accepted Account by an Account
                Debtor,
                or any other person or entity, is the sole property of
                Factor.

            

    

    

    
      	(e)	
              Prior
                to Factor's acceptance and purchase of any Account from a particular
                Account Debtor, Client shall deliver to Factor an agreement in the
                form of
                Exhibit B hereto ("Customer
                Agreement").

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	(f)	
              Invoices
                should plainly state on their face that the amounts payable thereunder
                have been assigned to and are payable to J.J. Ellis, LLC. C/O Island
                Capital Management, 100 First Avenue South, Suite 212 St., Petersburg,
                FL,
                33701 and billing on such invoice shall constitute an assignment
                to J.J.
                Ellis, LLC. of the accounts thereby represented whether or not a
                specific
                written assignment was executed.

            

    

    

    
      	(g)	
              Upon
                signing this Agreement, Client shall pay to Factor a one-time Factoring
                and documentation origination fee $2,500 payable in equivalent free
                trading stock and Warrants to purchase shares $25,000.00 of Clients
                common
                stock for a period of three years. The number of Warrants to be received
                by Factor shall be determined by dividing $25,000 by the lesser of
                a 20%
                discount on the bid price on the day of execution or the lowest reported
                bid price of the Clients common stock during a 365 day period following
                the date of this agreement (the “Pricing Period”). If the Factor wishes to
                exercise the warrants prior to the termination of the Pricing Period,
                then
                the number of warrants received will be calculated based on the lesser
                of
                the lowest reported bid price of the Clients Common Stock since the
                date
                of the agreement or a 20% discount on the bid price on the day of
                execution. The warrants will have a cashless exercise provision.
                

            

    

    

    2. PURCHASE
      PRICE.

     

    The
      Purchase Price (Advance) for each Accepted Account shall be equal to (i) the
      face amount of such Accepted Account less (ii) the Commission, and less (iii)
      the Factor's Fee (Discount), and less (iv) the amount of any trade or cash
      discounts, credits or allowances, set-offs or any other reductions or
      adjustments to such Accepted Account. The Commission for each Accepted Account
      shall equal 2% of the face amount of the Accepted Account, and shall compensate
      Factor for Factor's purchase and handling of the Accepted Account. The Factor's
      Fee (Discount) compensates Factor or factor’s agent for Factor's administration,
      monitoring, collection and reporting activities with respect to each Accepted
      Account and shall be determined by the number of days from the date of Factor's
      Initial Payment (as defined below) on the Accepted Account to Client to the
      date
      of Account Debtor's full payment of the Accepted Account to Factor as follows:
      

    

    The
      Discount of 5% shall be retained by The Factor from the collection of all
      invoice payments set forth in each schedule. However, Client shall be entitled
      to a rebate, regarding each transaction, for prompt payment of the invoices
      by
      said account debtors, as set forth in the REBATE TABLE below, provided Client
      has not breached or violated this agreement or any other agreement between
      Factor and Client. The Collection Periods set forth in the REBATE TABLE
      correspond to the number of days from the date of each Initial Payment,
      regarding each transaction, through and including the transaction closing date,
      defined as the date upon which Factor shall receive the closing check (plus
      three (3) business days to allow for check clearance), defined as the check
      in
      payment of the account listed on the schedule which shall result in the
      aggregate moneys collected by Factor, regarding each transaction, being equal
      to
      or greater than the closing amount, defined as the sum of the Initial payment
      plus the Discount less the Rebate, if applicable. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    REBATE
      TABLE

     

    
      	
              0
                to 30 days

            	
              30
                to 60 days

            	
              60
                to 90 days

            
	
              3%

            	
              2%

            	
              1%

            

    

    

    Upon
      purchase of an Accepted Account from Client, Factor shall make an initial
      payment of the Purchase Price to Client ("Initial Payment") in the amount of
      80%
      of the face amount of such Accepted Account. The difference between the face
      amount of an Accepted Account and the Initial Payment shall go into the Reserve
      Account (as defined in Section 4 below). "Full payment" of an Accepted Account
      by an Account Debtor shall occur when Factor receives a check for the full
      amount of the Accepted Account from the Account Debtor and such check clears
      and
      becomes available for Factor's use.

    

    Client
      agrees to sell and assign to Factor a minimum of $20,000 of accounts receivable
      for each month that this Agreement is in effect beginning with April 2005 and
      if
      such minimum isn't met, Factor will charge Client an amount equal to 1.25%
      times
      $20,000 less the actual amount of receivables sold for each such month, either
      by charging the Reserve Account or invoicing Client. Client and Factor agree
      that Client's right to terminate the Agreement pursuant to Section 11 is subject
      to the minimums in this paragraph. Interest on any unpaid Accepted Account
      will
      accrue at 18% per annum calculated daily from the 121st
      day
      until full payment has been effected.

    

    3. RECOURSE
      PROVISIONS.

    

    
      	(a)	
              All
                Accepted Accounts shall be purchased by Factor with recourse against
                Client. The term "Recourse Event" shall include, without limitation,
                the
                following: (i) a breach of any representation or warranty or covenant
                of
                this Agreement by Client; (ii) the existence of any dispute of any
                kind,
                regardless of validity, now or hereafter arising, between Client
                and an
                Account Debtor, or between an Account Debtor and Factor, that is
                asserted
                by an Account Debtor as a basis for refusing to pay all or part of
                any
                Accepted Account ("Dispute"); (iii) the assertion by any Account
                Debtor,
                or by a bankruptcy trustee or any other party which is acting for
                an
                Account Debtor, of a claim of loss, counterclaim, refund, credit,
                return
                of goods, return of payment or offset of any kind against Client
                or Factor
                ("Claim"); and (iv) non-payment by the Account Debtor of the full
                amount
                of any Accepted Account 121 days after the purchase of such Accepted
                Account by Factor, or, if Factor believes, in Factor's sole judgment,
                at
                any time prior to such 121st day, that the Account Debtor may be
                unable or
                unwilling to pay any Accepted Account; Client and Factor hereby agree
                that
                any Accepted Account covered by clause (iv) is a "defective good".
                Upon
                the occurrence of any event described in clauses (i), (ii), (iii)
                or (iv)
                of the preceding sentence, Client will immediately pay to Factor,
                on the
                Accepted Account which is subject to the Recourse Event, the amount
                of the
                Initial Payment on the Accepted Account plus the Commission and Factor's
                Fee on the Accepted Account calculated at the time of Client's payment.
                If
                Factor does not receive an immediate payment from Client, Factor
                may, in
                addition to any other remedies available to Factor under this Agreement,
                immediately charge back to Client any Accepted Account which is subject
                to
                a Recourse Event by taking funds out of the Reserve Account, or
                immediately exercise the remedies described in Section 10. With Factor's
                agreement, Client may assign other accounts receivable which are
                acceptable to Factor, in substitution for an Accepted Account which
                is
                subject to a Recourse Event.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)

            	
              Factor
                may charge the Reserve Account with the amount of any Account Debtor
                Repayment (as defined below). An "Account Debtor Repayment" shall
                refer to
                a payment made by Factor to an Account Debtor of Client to reimburse
                the
                Account Debtor for a payment theretofore made by the Account Debtor
                to the
                Factor other than on account of an Accepted
                Account.

            

    

    

    
      	
              (c)

            	
              Client
                shall notify Factor of any Recourse Event
                immediately.

            

    

    

    
      	
              (d)

            	
              Factor
                may settle any Dispute or Claim directly with Account Debtor; such
                settlement does not relieve Client of final responsibility for payment
                of
                any such Accepted Account.

            

    

    

    4. RESERVE
      ACCOUNT.

    

    
      	(a)	
              Factor
                shall create and maintain at all times a reserve account ("Reserve
                Account") for all Accepted Accounts. The reserve account will be
                funded by
                Client according to the schedule
                below:

            

    

    

    
      	
              Factored
                Balance

            	 	
              Funds
                held in Reserve

            	 
	
              $0
                - $20,000

            	 	
              $

            	
              2,000

            	 
	
              $20,000
                - $50,000

            	 	
              $

            	
              4,000

            	 
	
              $50,000
                - $75,000

            	 	
              $

            	
              6,000

            	 

    

    

    Factor
      may, in addition to any other remedies available to Factor under this Agreement,
      charge back to Client by taking funds out of the Reserve Account, any amount
      for
      which Client may be obligated to Factor at any time; such amounts include (i)
      any amounts which Client is obligated to pay Factor pursuant to the recourse
      provisions of Section 3, (ii) any damages suffered by Factor as a result of
      Client's breach of any provision of Section 5 hereof, (iii) any amount charged
      back to Client pursuant to Section 10 hereof, (iv) any other offsets or
      adjustments to any Accepted Account, and (v) reasonable attorneys fees and
      disbursements related to any of the foregoing. If Factor receives payment on
      an
      Accepted Account from Account Debtor subsequent to the Accepted Account being
      charged against the Reserve Account pursuant to the preceding sentence, Factor
      will credit the Reserve Account by the amount of such payment.

    

    
      	
              (b)

            	
              The
                Reserve Account shall be calculated and maintained on a regular basis,
                and
                any funds which are credited by Factor to Client's Reserve Account
                as a
                result of collected invoices for Client, less all funds charged back
                to
                Client pursuant to this Section 4 ("Excess Reserve") shall be paid
                to
                Client weekly; provided, however, that Factor shall not be obligated
                to
                pay the Excess Reserve to Client if a Recourse Event or an Event
                of
                Default has occurred and is continuing. If Client shall cease selling
                Accounts to Factor, Factor shall not pay the Reserve Account to Client
                until all Accepted Accounts have been collected in full or charged
                against
                the Reserve Account, and all Commissions and Factor's Fees and other
                sums
                due Factor hereunder have been paid; if the Reserve Account has a
                negative
                balance after such collections, charges and fees, then Client shall
                make
                the applicable payment to Factor.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	(c)	
              Factor
                may, at Factor's sole option and discretion, return payments for
                Client's
                account to the applicable account debtor, and deduct such items from
                the
                Reserve Account; Client shall then seek such payments from the applicable
                account debtor.

            

    

    

    5. CLIENT'S
      REPRESENTATIONS AND WARRANTIES.

    

    Client
      represents and warrants to Factor that:

    

    
      	
              (a)

            	
              Client
                is the sole owner and holder of each and every Account and all related
                Rights, and, upon Factor's purchase of any Account, Factor shall
                become
                the sole owner and holder of such Account and its related Rights;
                and each
                Account is free and clear of all liens, encumbrances, charges, security
                interests, rights to purchase, or other claims of any kind or nature,
                and
                none of such Accounts have been previously sold or assigned to any
                person
                or entity;

            

    

    

    
      	
              (b)

            	
              There
                are no financing statements now on file in any public office governing
                any
                property of Client of any kind, real or personal, in which Client
                is named
                in or has signed as the debtor, except the financing statement or
                statements filed or to be filed with respect to this Agreement, or
                those
                statements now on file that have been disclosed in writing by Client
                to
                Factor. Client will not execute any financing statement in favor
                of any
                other person or entity, except Factor, during the term of this
                Agreement;

            

    

    

    
      	
              (c)

            	
              The
                full amount of each Account is due and owing to Client, and each
                Account
                is an accurate statement of a bona fide sale and delivery by Client
                and
                acceptance by an Account Debtor of merchandise or services. Each
                Account
                is due and payable within 90 days or less, and is not contingent
                upon the
                fulfillment by Client of any further performance of any
                nature;

            

    

    

    
      	
              (d)

            	
              The
                application ("Application") made by Client in connection with this
                Agreement, and the statements made in such Application are true and
                correct as of the time that this Agreement is
                executed;

            

    

    

    
      	
              (e)

            	
              There
                are no actions, suits, proceedings, attachment proceedings, orders,
                or
                arbitration proceedings, pending or threatened, at law or in equity,
                against Client or any affiliate of Client or affecting the Accounts,
                before any federal, state, municipal or other governmental court,
                department, commission, board, agency or instrumentality. Client
                will
                immediately notify Factor if any matter described in the preceding
                sentence arises; and

            

    

    

    
      	(f)	
              Client
                is a corporation duly organized, validly existing and in good standing
                under the laws of Nevada. This Agreement and transactions contemplated
                hereby have been duly authorized by all necessary action by
                Client.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    6. AFFIRMATIVE
      COVENANTS BY CLIENT.

    

    Client
      covenants and agrees that, from the date hereof and until termination of this
      Agreement and payment in full of all Accepted Accounts to Factor, Client
      will:

    

    
      	
              (a)

            	
              Pay
                all taxes or fees in relation to the Accounts and all goods sold
                or
                services rendered which give rise to
                Accounts;

            

    

    

    
      	
              (b)

            	
              Hold
                in trust for Factor, and immediately notify and turn over to Factor,
                any
                payment on an Accepted Account whenever any such payment comes into
                Client's possession, whether such payment is by cash, check (payable
                to
                Client, Factor or both), money order, credit card, debit card or
                other
                form of payment. Client shall also, where such payment is issued
                to the
                order of Client, immediately endorse the payment to the order of
                Factor.
                If Client comes into possession of a check or other payment which
                consists
                of payments owing to both Client and Factor (i.e. the payment covers
                both
                Accepted Accounts and Accounts which were not purchased by Factor
                or other
                amounts owing to Client from Account Debtor), Client shall immediately
                endorse the check or other payment to Factor and turn it over to
                Factor
                who will then credit Client's portion to Client's Reserve Account.
                Client
                acknowledges that an Event of Default pursuant to Section 10 shall
                have
                occurred, and that Client will become subject to criminal prosecution
                and
                civil actions, if Client does not immediately turn over to Factor
                each and
                every payment on an Accepted Account which comes into Client's possession.
                IN ADDITION, IF CLIENT DEPOSITS OR OTHERWISE NEGOTIATES A CHECK OR
                OTHER
                PAYMENT, OR ACCEPTS A CREDIT CARD OR DEBIT CARD PAYMENT, WHICH, BY
                THE
                TERMS OF THIS SECTION 6 (B), SHOULD HAVE BEEN TURNED OVER TO FACTOR,
                CLIENT SHALL PAY FACTOR A MISDIRECTED PAYMENT FEE EQUAL TO 20% OF
                THE
                AMOUNT OF THE CHECK, CREDIT OR DEBIT CARD PAYMENT, OR OTHER
                PAYMENT;

            

    

    

    
      	
              (c)

            	
              Not
                factor, sell, transfer, pledge or give a security interest in any
                of its
                Accounts, other accounts receivable or other Collateral to any person
                or
                entity other than Factor;

            

    

    

    
      	
              (d)

            	
              Notify
                Factor immediately if Account Debtor returns to Client any goods
                giving
                rise to an Accepted Account, and deliver such goods to Factor. Client
                shall not intermingle such goods with Client's other property, as
                the
                goods are the property of Factor;

            

    

    

    
      	
              (e)

            	
              Client
                shall not change its mailing address, principal place of business,
                chief
                executive office or its legal structure (i.e. from a proprietorship
                to a
                corporation, etc.), or merge with or acquire any other entity, or
                be
                acquired, without Factor's prior written
                consent;

            

    

    

    
      	
              (f)

            	
              Immediately
                notify Factor of (i) any development which would materially and adversely
                affect the business, properties or financial condition of Client
                or any
                Account Debtor, the Accounts or the ability of Client to perform
                its
                obligations under this Agreement, and/or (ii) any actual or potential
                insolvency of Client or any Account
                Debtor;

            

    

    

    
      	(g)	
              Give
                Factor not less than ten days prior written notice of any bankruptcy
                filing by Client; and

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (h)

            	
              Client
                will provide to Factor monthly accounts receivable and accounts payable
                agings and customer contact information, and proof of payment of
                payroll
                and other taxes, for the term of this
                Agreement.

            

    

    

    7. SECURITY
      INTEREST AND COLLATERAL

    

    In
      order
      to secure the payment and performance of all obligations of Client to Factor,
      whether presently existing or hereafter arising, Client hereby grants to Factor
      a security interest in and lien upon all of Client's right, title and interest
      in the Client's assets as follows, which include, without limitation, (i) the
      Reserve Account and all payments (if any) due or to become due to Client from
      the Reserve Account, and all other sums due from factors, and (ii) the proceeds
      of any insurance policies covering any of the foregoing (collectively, the
      "Collateral"). Client agrees to comply with all appropriate laws in order to
      perfect Factor's security interest in and to the Collateral and to execute
      and
      deliver to Factor and/or file UCC-1 Financing Statements and any other financing
      statement(s) or documents that Factor may require.

    

    8. COLLECTION
      OF ACCOUNTS.

    

    Factor
      shall have the sole and exclusive power and authority to collect ach Account,
      through legal action or otherwise, and may, in its sole discretion, settle,
      compromise or assign (in whole or in part) any Account, or otherwise exercise
      any other right now existing or hereafter arising with respect to any Account.
      Without Factor's prior written consent, Client shall not

    (a)
      attempt to collect any Account, (b) attempt to collect other non-factored
      accounts receivable when Factor has unpaid Accepted Accounts from the same
      Account Debtor, or (c) violate any of the terms of Exhibit B hereof with respect
      to any applicable Account Debtor. Any violation of this Section 8 is an Event
      of
      Default hereunder.

    

    9. POWER
      OF
      ATTORNEY.

    Client
      grants to Factor an irrevocable power of attorney authorizing and permitting
      Factor, at its option, without notice to Client, to do any or all of the
      following:

    

    
      	(a)	
              Endorse
                the name of Client on any checks or other forms of payment whatsoever
                that
                may come into the possession of Factor regarding Accepted Accounts,
                any
                other accounts or Collateral;

            

    

    

    
      	(b)	
              Pay,
                settle, compromise, prosecute or defend any Claim, Dispute, action,
                or
                other proceeding relating to Accepted Accounts or
                Collateral;

            

    

    

    
      	(c)	
              To
                extend the time of payment of any or all Accepted Accounts and to
                make any
                discounts, offsets, allowances or other adjustments with reference
                thereto;

            

    

    

    
      	(d)	
              Execute
                and file on behalf of Client any financing statement deemed necessary
                or
                appropriate by Factor to protect Factor's interest in and to the
                Accepted
                Accounts or Collateral, or under any provision of this Agreement;
                and

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	(e)	
              To
                do all things necessary and proper in order to carry out this
                Agreement.

            

    

    

    The
      power
      of attorney and authority granted to Factor herein is irrevocable until this
      Agreement is terminated and all Accepted Accounts have been paid in full and
      Client has satisfied in full all other obligations owed to Factor.

    

    10. DEFAULTS
      AND REMEDIES

    

    
      	(a)	
              An
                event of default ("Event of Default") shall be deemed to have occurred
                under this Agreement upon the happening of one or more of the
                following:

            

    

    

    
      	
            	(A)	
              Client
                shall fail to pay as and when due any amount of money owed to
                Factor;

            

    

    

    
      	
            	(B)	
              There
                shall be commenced by or against Client any voluntary or involuntary
                case
                under the federal Bankruptcy Code, or any assignment for the benefit
                of
                creditors, or any appointment of a receiver or custodian or trustee
                for
                any of Client's assets;

            

    

    

    
      	
            	(C)	
              Client
                shall become insolvent, or Client admits in writing its inability
                to pay
                its debts as they mature;

            

    

    

    
      	
            	(D)	
              A
                material and adverse change shall have occurred in Client's financial
                condition, business or operations, or Factor, in Factor's sole discretion
                deems its position insecure or determines that the Collateral has
                lost
                value;

            

    

    

    
      	
            	(E)	
              Client
                shall have a federal, state or local tax lien filed against any of
                its
                properties, or shall fail to pay any federal, state or local tax
                when due,
                or shall fail to file any federal, state or local tax form as and
                when
                due, or shall have a notice of seizure against it sent out by any
                federal
                or state taxing authority;

            

    

    

    
      	
            	(F)	
              Any
                check or other payment described in Section 6(b) comes into Client's
                possession and Client does not immediately endorse and turn over
                such
                check or payment to Factor;

            

    

    

    
      	
            	(G)	
              A
                Recourse Event shall occur;

            

    

    

    
      	
            	(H)	
              Client
                shall stop selling and assigning new Accounts to Factor, or Factor
                shall
                stop purchasing new Accounts from
                Client;

            

    

    

    
      	
            	(I)	
              Client
                violates any provision of Section 8 hereof;
                or

            

    

    

    
      	
            	(J)	
              Any
                event described in Section 12(h) and/or Section 12(i)
                occurs.

            

    

    

    
      	(b)	
              If
                an Event of Default occurs, Factor may immediately exercise any and
                all of
                its rights and remedies with respect to Accounts and Collateral under
                this
                Agreement, the Uniform Commercial Code, and applicable law, which
                rights
                and remedies include, without limitation: (A) the right to declare
                any
                amount owed by Client to Factor immediately due and payable; (B)
                enforcement of the security interest given hereunder pursuant to
                the
                Uniform Commercial Code or any other law; (C) entering the premises
                of
                Client and taking possession of the Collateral and of the records
                pertaining to the Accounts and the Collateral; (D) granting extensions,
                compromising claims and settling Accounts for less than face value,
                without prior notice to Client; (E) collecting and depositing all
                of
                Client's accounts receivable, and the proceeds thereof, whether such
                accounts were purchased by Factor or not, (F) retaining any surplus
                realized from asset sales and holding Client liable for any deficiency
                as
                provided in the Uniform Commercial Code; and (G) without limiting
                Factor's
                rights pursuant to Sections 3 and 4, to charge back to Client any
                and all
                amounts or obligations owed by Client to Factor by taking funds out
                of the
                Reserve Account. Client shall also pay Factor immediately upon demand
                for
                all damages, costs and losses caused to Factor which are in any way
                related to an Event of Default and/or Recourse Event, including,
                without
                limitation, all attorney's fees, court costs, disbursements, other
                collection expenses and all other expenses and costs incurred or
                paid by
                Factor to obtain performance or to enforce any covenant or agreement
                of
                Client hereunder. In order to satisfy any amount owed by Client to
                Factor
                pursuant to this Agreement, Factor is hereby authorized by Client
                to
                initiate electronic debit or credit entries through the ACH system
                to each
                and every deposit account maintained by Client wherever such accounts
                are
                located.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
11. TERM

    

    
      	(a)	
              This
                Agreement shall become effective on the date hereof and shall continue
                in
                full force and effect for a period of one (1) year from the date
                hereof
                and will be automatically renewed for like periods thereafter, unless
                terminated by Client as of any anniversary date, by Client giving
                not less
                than thirty (30) days prior written notice to Factor or unless terminated
                by Factor at any time. Notwithstanding the foregoing, Client may
                terminate
                this Agreement early at any time by giving Factor not less than thirty
                (30) days prior written notice, and Factor may terminate this Agreement
                early at any time without notice should any Event of Default or Recourse
                Event occur, provided that in either event, Client will be obligated
                to
                pay Factor in full for all amounts owing to Factor pursuant to this
                Agreement and for an additional early termination fee equal to the
                amounts
                calculated pursuant to the second paragraph of Section 2 for each
                and
                every remaining month of the term. After termination of this Agreement
                and/or termination of Factor's lien on the Collateral, Client shall
                remain
                fully responsible to Factor for any and all representations, warranties
                and covenants contained herein, and for any asserted claims and/or
                payment
                demands described in Section 12(h) and/or Section 12(i) no matter
                when
                such demands arise.

            

    

    

    
      	(b)	
              This
                Agreement and all covenants, agreements, representations and warranties
                made herein, shall survive the purchase by Factor of the Accounts
                hereunder, and shall continue in full force and effect after termination
                of this Agreement. Once this Agreement has been terminated and (i)
                Factor
                has received payment in full for all Accepted Accounts and all other
                amounts owing to Factor pursuant to this Agreement, (ii) Client has
                met
                all obligations to Factor hereunder as of such time, and (iii) Client
                executes and delivers a written release to Factor, in a form provided
                by
                and acceptable to Factor, releasing Factor from all liabilities hereunder,
                then Factor shall promptly terminate Factor's lien on the
                Collateral.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
12. MISCELLANEOUS

    

    
      	(a)	
              Client
                shall pay Factor $20.00 for each wire transfer made by Factor to
                Client,
                $20.00 for each FedEx, $2.00 for each cashier's check, $5.22 for
                each
                certified piece of mail, standard postage rates for the mailing of
                invoices, $28.00 for each Dun & Bradstreet report, all amounts billed
                to Factor by Factor's lawyers in matters related to the Client, and
                all
                costs related to Factor's ongoing UCC and tax lien searches on Client;
                provided, however that if Factor's cost for the preceding items increases,
                Client shall also pay an additional amount equal to such
                increase.

            

    

    

    
      	(b)	
              This
                Agreement and the Exhibits and attachments hereto constitute the
                entire
                agreement between the parties pertaining to the subject matter contained
                in it and supersede all prior and contemporaneous agreements, commitments,
                negotiations and understandings of the parties. No supplement,
                modification or amendment of this Agreement or any part thereof shall
                be
                binding unless executed in writing by both parties. This Agreement
                may not
                be assigned by Client without the prior written consent of Factor.
                This
                Agreement may be assigned by Factor without notice to or the consent
                of
                Client.

            

    

    

    
      	(c)	
              All
                rights, remedies and powers granted to Factor in this Agreement,
                or in any
                other instrument or document given by Client to Factor, are cumulative
                and
                may be exercised singularly or concurrently with such other rights
                as
                Factor may have. No waiver of any of the provisions of this Agreement
                shall be deemed, or shall constitute, a waiver of any other provisions,
                whether or not similar, nor shall any waiver constitute a continuing
                waiver. No waiver shall be binding unless executed in writing by
                the party
                making the waiver.

            

    

    

    
      	(d)	
              Whenever
                possible, each provision of this Agreement will be interpreted in
                such a
                manner as to be effective and valid under applicable law, but if
                any
                provision of this Agreement is held to be prohibited by or invalid
                under
                applicable law, such provision will be ineffective only to the extent
                of
                such prohibition or invalidity, without invalidating the remainder
                of such
                provision or the remaining provisions of this
                Agreement.

            

    

    

    
      	(e)	
              Client
                shall hold Factor harmless against any Customer ill will arising
                from (i)
                Factor's verification or collection of, or attempts to collect, any
                Account, and/or (ii) any other actions of Factor pursuant to this
                Agreement. Factor may cease attempts to collect any Accepted Account
                at
                any time.

            

    

    

    
      	(f)	
              All
                notices, requests, demands and other communications under this Agreement
                shall be in writing and shall be deemed sufficiently given only if
                served
                personally on the party to whom notice is to be given, or sent by
                facsimile (followed by a phone call which confirms receipt) or mailed
                to
                the party to whom notice is to be given, by first class mail, registered
                or certified, postage prepaid, and properly addressed as
                follows:

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    To
      Client:

    World-Am,
      Inc

    1400
      West
      122nd Avenue, Ste 104

    Westminster,
      Colorado, 80234

    Attn:
      Jim
      Alexander

    Phone:
      (303) 452-0022

    Fax:
      (303) 452-6626

    

    To
      Factor:

    J.J.
      Ellis, LLC

    C/O
      Island Stock Transfer

    100
      First
      Avenue South, Suite 212, St. Petersburg, Florida 33701

    Attn:
      Carl Dilley

    Phone:
      (727) 287-1512

    Fax:
      (727) 287-1612

    

    or
      to
      such other address as the party may have specified in a notice duly given to
      the
      other party as provided herein. Such notice or communication will be deemed
      to
      have been given as of the date so delivered or faxed (and confirmed) or three
      days after the date so mailed.

    

    
      	(g)	
              This
                Agreement and the legal relations between the parties shall be governed
                by
                and construed in accordance with the laws of the State of Florida
                without
                regard to principles of conflicts of laws otherwise applicable to
                such
                determinations. Client and Factor agree that any suit, action or
                proceeding arising out of the subject matter hereof, or the
                interpretation, performance or breach of this Agreement, shall, if
                Factor
                so elects, be instituted in any court sitting in Florida (the "Acceptable
                Forums"). Client and Factor agree that the Acceptable Forums are
                convenient to it, and each party irrevocably submits to the jurisdiction
                of the Acceptable Forums, irrevocably agrees to be bound by any judgment
                rendered thereby in connection with this Agreement, and waives any
                and all
                objections to jurisdiction or venue that it may have under the laws
                of
                Florida or otherwise in those courts in any such suit, action or
                proceeding. Should such proceeding be initiated in any other forum,
                Client
                waives any right to oppose any motion or application made by Factor
                as a
                consequence of such proceeding having been commenced in a forum other
                than
                an Acceptable Forum.

            

    

    

    
      	(h)	
              If
                an Account Debtor of Client files for or is forced into bankruptcy,
                receivership or any other similar protection or status, and there
                is the
                possibility of a preference or other similar action or claim against
                Factor by a trustee in bankruptcy, debtor in possession, receiver,
                custodian or other party related to payments received by Factor,
                then a
                Recourse Event under this Agreement shall have occurred and, in addition
                to other rights and remedies hereunder, then Factor may, at Factor's
                option, hold or pay over to the trustee in bankruptcy, debtor in
                possession, receiver, custodian or other party, Client's Reserve
                Account
                in an amount equal to the total amount of payments received by Factor
                for
                which there is a possibility of such a preference or other similar
                action
                or claim; and if Factor elects to hold such amount in the Reserve
                Account,
                Factor may continue to hold such amount until all applicable statutes
                of
                limitation for such preference or other similar actions or claims
                have
                expired. Furthermore, if a trustee in Bankruptcy, debtor in possession,
                receiver, custodian or other party demands that any payment received
                by
                Factor be returned and/or given to such party or to a bankruptcy
                estate,
                then a Recourse Event under this Agreement shall have occurred and
                Client
                shall owe Factor any and all amounts demanded by such trustee in
                bankruptcy, debtor in possession, receiver, custodian or other party,
                and
                Client shall pay such amounts to Factor immediately upon Factor's
                demand.
                Client also agrees to indemnify Factor and hold Factor harmless from
                and
                against any such preference or other similar action or claim, regardless
                of whether such action or claim is brought during the term of this
                Agreement or after termination of this Agreement. This Section (h)
                shall
                survive the termination of this Agreement and shall remain in effect
                for
                seven years after termination of this Agreement. (i) If Factor receives
                a
                payment from an Account Debtor and such Account Debtor demands that
                the
                payment be returned, for any reason whatsoever, then a Recourse Event
                under this Agreement shall have occurred and Client shall owe Factor
                any
                and all amounts demanded by such Account Debtor, and Client shall
                pay such
                amounts to Factor immediately upon Factor's demand. In addition,
                Client
                agrees to indemnify and hold harmless Factor against any claims asserted
                by any person or entity related in any way to the factoring relationship
                or any payment made to Factor, whether or not such claims are asserted
                before or after termination of this Agreement. This Section (i) shall
                survive the termination of this Agreement and shall remain in effect
                for
                seven years after termination of this Agreement (j) Each of Client
                and
                Factor hereby (1) waive any right it may have to a jury trial, or
                any
                right to claim or recover in any litigation any special, exemplary,
                punitive or consequential damages, or damages other than, or in addition
                to, actual damages, plus interest and fees, and (2) acknowledge that
                it
                has been induced to enter into this Agreement and the transactions
                contemplated hereby by, among other things, the mutual waivers contained
                in this subsection.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

    
      	FACTOR:	 	 	 
	 	 	 	 
	J.J. ELLIS, LLC.	 	 	 
	 	 	 	 
	 	 	 	 
	By: /s/
              G. Raymond Pironti, Jr.	 	 	
            
	
              
                
G.
                Raymond Pironti, Jr.

            	 	 	
            
	
              Title:
                Partner

            	 	 	
            

    
      	CLIENT:	 	 	 
	 	 	 	 
	WORLD AM, INC.	 	 	 
	 	 	 	 
	By: /s/
              James Alexander	 	 	
            
	
              
                
James
                Alexander

            	 	 	
            
	
              Title:
                President and CEO

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