Document:

Exhibit 10.53

EXHIBIT 10.53

CONFIDENTIAL TREATMENT

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED

SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT

TO A REQUEST FOR CONFIDENTIAL TREATMENT

Supplemental Agreement No. 20

to

Purchase Agreement No. 2191

between

The Boeing Company

and

COPA Holdings, S.A., Inc.

Relating to Boeing Model 737 Aircraft

THIS SUPPLEMENTAL AGREEMENT No. 20 (“Supplemental Agreement 20”) is entered into as of
November 19, 2009 by and between THE BOEING COMPANY, a Delaware corporation with its principal
office in Seattle, Washington, (Boeing) and COPA HOLDINGS, S.A., INC. (Customer);

WHEREAS, the parties hereto entered into Purchase Agreement No. 2191 dated November 25, 1998 ,
(as amended and supplemented and together with all exhibits, schedules and letter agreements
pertaining thereto, the “Purchase Agreement”), relating to Boeing Model 737-7V3 and 737-8V3
aircraft (collectively, the “Aircraft” and each an “Aircraft”);

WHEREAS, **Material Redacted**;

WHEREAS, **Material Redacted**.

WHEREAS, Customer and Boeing have agreed **Material Redacted**; and,

WHEREAS, Customer and Boeing have agreed that **Material Redacted**;

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

1. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the
Purchase Agreement.

2. The “Table of Contents” of the Purchase Agreement is revised to reflect the changes
made by this Supplemental Agreement and a copy of such Table of Contents, as so revised is attached
hereto.

3. Table 1-10A entitled “Aircraft Delivery, Description, Price and Advance Payments”, is
revised so as to: **Material Redacted**. Table 1-10A as amended in accordance with this paragraph
3 is attached hereto.

			
	 	 	 
	PA No. 2191
	 	SA No. 20
	 
	 	Nov 2009

 

 

 

CONFIDENTIAL TREATMENT

4. Table 1-10B entitled “Aircraft Delivery, Description, Price and Advance Payments for
Exercised Options”, is revised so as to: (A) **Material Redacted**; (B) **Material Redacted**
and (C) add at the bottom the following note, “**Material Redacted**. The revised Table 1-10B as
amended in accordance with this paragraph 4 is attached hereto.

5. **Material Redacted**

6. Letter Agreement 6-1162-RLL-3958R1, Option Aircraft, is revised so as to **Material Redacted**.
The revised Letter Agreement 6-1162-RLL-3958R2 is attached hereto.

7. Letter Agreement 2191-03, Seller Purchased Agreement, is revised to **Material Redacted**. The
revised Letter Agreement 2191-034R1 is attached hereto.

8. Attachments A and B were inadvertently left out of the signed original of Letter Agreement
6-1162-KSW-6419, **Material Redacted**. Letter Agreement 6-1162-KSW-6419 including Attachments A
and B is attached hereto.

9. **Material Redacted**

10. **Material Redacted**

The Purchase Agreement will be deemed to be supplemented and revised to the extent herein provided
as of the date hereof and as so supplemented and revised will continue in full force and effect.

Boeing and Customer have each caused this Supplemental Agreement to be duly executed as of the day
and year first written above.

	 	 	 	 	 	 	 	 	 	 	 
	THE BOEING COMPANY	 	 	 	COPA HOLDINGS, S.A.	 	 

	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 

	 	 	 	 	 

	 	 
	 	Its:  

	Attorney-In-Fact
	 	 	 	 	Its:  
	Chief Executive Officer	 	 

			
	 	 	 
	PA No. 2191
	 	SA No. 20
	 
	 	Nov 2009

 

Page 2

 

CONFIDENTIAL TREATMENT

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	 	 	SA
	 	 	 	 	NUMBER
	ARTICLES	 	 
	 	 	 
	 	 
	1.	 	Quantity, Model and Description
	 	SA 3
	 	 	 
	 	 
	2.	 	Delivery Schedule
	 	 
	 	 	 
	 	 
	3.	 	Price
	 	 
	 	 	 
	 	 
	4.	 	Payment
	 	SA 3
	 	 	 
	 	 
	5.	 	Miscellaneous
	 	 
	 	 	 
	 	 
	TABLE	 	 
	 	 	 
	 	 
	1-1	 	Aircraft Information Table for Model 737-7V3 Aircraft
	 	SA 4
	1-2	 	Aircraft Information Table for Model 737-8V3 Aircraft
	 	SA 5
	1-3	 	Aircraft Information Table for Model 737-7V3 Aircraft
	 	SA 7
	1-4	 	Aircraft Information Table for Model 737-7V3 Aircraft
	 	SA 13
	1-5	 	Aircraft Information Table for Model 737-8V3 Aircraft
	 	SA 13
	1-6	 	Aircraft Information Table for Model 737-8V3 Aircraft
	 	SA 20
	1-7	 	Aircraft Information Table for Model 737-8V3 Aircraft
Option Aircraft
	 	SA 13
	1-8	 	Aircraft Information Table for Model 737-8V3 Aircraft
	 	SA 16
	1-9	 	Aircraft Information Table for Model 737-8V3 Aircraft
	 	SA 19
	1-10	 	Aircraft Information Table for Model 737-8V3 Aircraft
	 	SA 20
	1-11	 	Aircraft Information Table for Model 737-8V3 Option
Aircraft
	 	SA 20
	 	 	 
	 	 
	EXHIBIT	 	 
	 	 	 
	 	 
	A-1	 	Aircraft Configuration for Model 737-7V3 Aircraft
	 	SA 3
	A-2	 	Aircraft Configuration for Model 737-8V3 Aircraft
	 	SA 3
	A-3	 	Aircraft Configuration for Model 737-8V3 Aircraft
	 	SA 18
	 	 	 
	 	 
	B.	 	Aircraft Delivery Requirements and Responsibilities
	 	SA 3
	 	 	 
	 	 
	SUPPLEMENTAL EXHIBITS	 	 
	 	 	 
	 	 
	AE1.	 	Escalation Adjustment Airframe and Optional Features
	 	SA 10
	 	 	 
	 	 
	BFE1.	 	BFE Variables
	 	SA 18
	 	 	 
	 	 
	CS1.	 	Customer Support Variables
	 	SA 3
	 	 	 
	 	 
	EE1.	 	Engine Escalation/Engine Warranty and Patent Indemnity
	 	 
	 	 	 
	 	 
	SLP1.	 	Service Life Policy Components
	 	 

			
	 	 	 
	PA No. 2191
	 	SA No. 20
	 
	 	Nov 2009

 

i

 

CONFIDENTIAL TREATMENT

	 	 	 	 	 
	 	 	 	 	SA
	 	 	 	 	NUMBER
	LETTER AGREEMENTS	 	 
	 	 	 
	 	 
	2191-01	 	Demonstration Flight Waiver
	 	 
	2191-02	 	Escalation Sharing
	 	 
	2191-03	 	Seller Purchased Equipment
	 	 
	2191-03R1	 	Seller Purchased Equipment
	 	SA-20
	 	 	 
	 	 
	RESTRICTED LETTER AGREEMENTS	 	 
	 	 	 
	 	 
	6-1162-DAN-0123	 	Performance Guarantees
	 	 
	6-1162-DAN-0124	 	Special Matters
	 	 
	6-1162-DAN-0155	 	Airframe Escalation Revision
	 	 
	6-1162-DAN-0156	 	Year 2000 Ready Software, Hardware and Firmware
	 	 
	6-1162-DAN-0157	 	Miscellaneous Matters
	 	 
	6-1162-MJB-0017	 	Special Matters
	 	 
	6-1162-MJB-0030	 	Special Matters
	 	 
	6-1162-LAJ-874R	 	Special Matters
	 	SA 5
	6-1162-LAJ-874R1	 	Special Matters
	 	SA 6
	6-1162-LAJ-874R2	 	Special Matters
	 	SA 7
	6-1162-LAJ-982	 	Special Matters
	 	SA 8
	6-1162-LAJ-982R3	 	Special Matters
	 	SA 11
	6-1162-RLL-3852	 	737-800 Performance Guarantees
	 	SA 9
	6-1162-LAJ-982R4	 	Special Matters
	 	SA 13
	6-1162-RLL-3958	 	737-8V3 Option Aircraft
	 	SA 13
	6-1162-RLL-3958R1	 	737-8V3 Option Aircraft
	 	SA 18
	6-1162-RLL-3958R1	 	737-8V3 Option Aircraft
	 	SA 18
	6-1162-RLL-3958R2	 	737-8V3 Option Aircraft
	 	SA 20
	6-1162-LAJ-982R5	 	Special Matters
	 	SA 16
	6-1162-LAJ-982R6	 	Special Matters
	 	SA 17
	6-1162-LAJ-982R7	 	Special Matters
	 	SA 18
	**Material Redacted**	 	 
	 	 
	6-1162-RLL-4092	 	Advance Payment Matters for Aircraft Listed in Table 1-9
	 	SA 17
	6-1162-KSW-6417	 	Boeing Offer Related to New Interior
	 	SA 18
	6-1162-KSW-6419	 	**Material Redacted**
	 	SA 20

			
	 	 	 
	PA No. 2191
	 	SA No. 20
	 
	 	Nov 2009

 

ii

 

CONFIDENTIAL TREATMENT

	 	 	 
	SUPPLEMENTAL AGREEMENTS	 	DATED AS OF:
	Supplemental Agreement No. 1

	 	June 29, 2001
	Supplemental Agreement No. 2

	 	December 21, 2001
	Supplemental Agreement No. 3

	 	June 14, 2002
	Supplemental Agreement No. 4

	 	December 20, 1002
	Supplemental Agreement No. 5

	 	October 31, 2003
	Supplemental Agreement No. 6

	 	September 9, 2004
	Supplemental Agreement No. 7

	 	December 9, 2004
	Supplemental Agreement No. 8

	 	April 15, 2005
	Supplemental Agreement No. 9

	 	March 16, 2006
	Supplemental Agreement No. 10

	 	May 8, 2006
	Supplemental Agreement No. 11

	 	August 30, 2006
	Supplemental Agreement No. 12

	 	February 26, 2007
	Supplemental Agreement No. 13

	 	April 23, 2007
	Supplemental Agreement No. 14

	 	August 31, 2007
	Supplemental Agreement No. 15

	 	February 21, 2008
	Supplemental Agreement No. 16

	 	June 30, 2008
	Supplemental Agreement No. 17

	 	December 15, 2008
	Supplemental Agreement No. 18

	 	July 15, 2009
	Supplemental Agreement No. 19

	 	August __, 2009
	Supplemental Agreement No. 20

	 	November __, 2009

			
	 	 	 
	PA No. 2191
	 	SA No. 20
	 
	 	Nov 2009

 

iii

 

CONFIDENTIAL TREATMENT

Table 1-10A

Aircraft Information Table for Model 737-8V3 Aircraft

Delivery, Description and Advance Payments

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Airframe Model/MTOW:

	 	737-800
	 	174200 pounds
	 	Detail Specification:	 	 	 	 	 	 
	Engine Model/Thrust:

	 	CFM56-7B26
	 	26400 pounds
	 	Airframe Price Base Year/Escalation Formula:
	 	Jul-08
	 	ECI-MFG/CPI
	Airframe Price:

	 	 	 	**Material Redacted**
	 	Engine Price Base Year/Escalation Formula:
	 	N/A	 	N/A
	Optional Features:

	 	 	 	**Material Redacted**	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	Sub-Total of Airframe and Features:	 	**Material Redacted**	 	Airframe Escalation Data:	 	 	 	 	 	 
	Engine Price (Per Aircraft):	 	**Material Redacted**	 	Base Year Index (ECI):	 	 	103.1	 	 
	Aircraft Basic Price (Excluding BFE/SPE):	 	**Material Redacted**	 	Base Year Index (CPI):	 	 	208.2	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	Buyer Furnished Equipment (BFE) Estimate:	 	**Material Redacted**	 	 	 	 	 	 	 	 
	Seller Purchased Equipment (SPE) Estimate:	 	**Material Redacted**	 	 	 	 	 	 	 	 
	Refundable Deposit/Aircraft at Proposal Accept:	 	**Material Redacted**	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Escalation	 	 
	 	 	 	 	 	 	 	 	 	 	Estimate	 	Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
	 	 	 	 	Escalation	 	 	 	 	 	Adv Payment	 	 	 	 	 	21/18/12/9/6	 	 
	Delivery	 	Number of	 	Factor	 	Serial	 	 	 	Base	 	At Signing	 	24 Mos.	 	Mos.	 	Total
	Date	 	Aircraft	 	(Airframe)	 	Number	 	Escalation	 	**Material Redacted**	 	**Material Redacted**	 	**Material Redacted**	 	**Material Redacted**	 	**Material Redacted**
	**Material Redacted**
	 	**Material Redacted**
	 	**Material Redacted**
	 	**Material Redacted**
	 	**Material Redacted**
	 	**Material Redacted**
	 	**Material Redacted**
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	**Material Redacted**
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	 	**Material Redacted**
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	**Material Redacted**
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	Total:
	 	**Material Redacted**	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

			
	 	 	 
	PA No. 2191
	 	SA No. 20
	 
	 	Nov 2009

 

i 

 

CONFIDENTIAL TREATMENT

Table 1-11

Aircraft Information Table for Model 737-8V3 Option Aircraft

Delivery, Description and Advance Payments

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Airframe Model/MTOW:

	 	737-800
	 	174200 pounds
	 	Detail Specification:	 	 	 	 	 	 
	Engine Model/Thrust:

	 	CFM56-7B26
	 	26400 pounds
	 	Airframe Price Base Year/Escalation Formula:
	 	Jul-08
	 	ECI-MFG/CPI
	Airframe Price:

	 	 	 	**Material Redacted**
	 	Engine Price Base Year/Escalation Formula:
	 	N/A	 	N/A
	Optional Features:

	 	 	 	**Material Redacted**	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	Sub-Total of Airframe and Features:	 	**Material Redacted**	 	Airframe Escalation Data:	 	 	 	 	 	 
	Engine Price (Per Aircraft):	 	 	 	Base Year Index (ECI):	 	 	103.1	 	 
	Aircraft Basic Price (Excluding BFE/SPE):	 	**Material Redacted**	 	Base Year Index (CPI):	 	 	208.2	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	Buyer Furnished Equipment (BFE) Estimate:	 	**Material Redacted**	 	 	 	 	 	 	 	 
	Seller Purchased Equipment (SPE) Estimate:	 	**Material Redacted**	 	 	 	 	 	 	 	 
	 
	Non-Refundable Deposit/Aircraft at Def Agreemt:	 	**Material Redacted**	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Escalation	 	Advance Payment Per	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Estimate	 	Aircraft (Amts. Due/Mos.	 	 	 	 	 	 
	 	 	 	 	Escalation	 	 	 	 	 	Adv Payment	 	Prior to Delivery):	 	 	 	21/18/12/9/6	 	 
	Delivery	 	Number of	 	Factor	 	 	 	 	 	Base	 	At Signing	 	24 Mos.	 	Mos.	 	Total
	Date	 	Aircraft	 	(Airframe)	 	Serial Number	 	Escalation	 	Price Per A/P	 	**Material Redacted**	 	**Material Redacted**	 	**Material Redacted**	 	**Material Redacted**
	**Material Redacted**

	 	**Material Redacted**
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	Total:

	 	**Material Redacted**	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 
	PA No. 2191

	 	SA No. 20
	 

	 	Nov 2009

 

i

 

CONFIDENTIAL TREATMENT

	 	 	 
	 

	 	Boeing Commercial Airplanes

P.O. Box 3707

Seattle, WA 98124-2207
	 
	 	 

2191-03R1

COPA HOLDINGS, S.A.

Apartado 1572

Avenida Justo Arosemena y Calle 39

Panama 1

Panama

	 	 	 
	Subject:

	 	Seller Purchased Equipment
	 
	 	 
	Reference:

	 	Purchase Agreement No. 2191 (as supplemented and amended the
Purchase Agreement) between The Boeing Company (Boeing) and
COPA HOLDINGS, S.A. (Customer) relating to Model 737-7V3
aircraft (the Aircraft)

This Letter Agreement amends and supplements the Purchase Agreement and cancels and supercedes
Letter Agreement 2191-03. All terms used but not defined in this Letter Agreement have the same
meaning as in the Purchase Agreement.

Definition of Terms:

**Material Redacted**

	1.	 	Price.

Advance Payments. An estimated SPE price is included in the Advance Payment Base
Prices shown in Table 1 for the purpose of establishing the advance payments for the Aircraft.

	 	 	Aircraft Price. **Material Redacted**
	 
	2.	 	**Material Redacted**
	 
	3.	 	**Material Redacted**
	 
	4.	 	**Material Redacted**
	 
	5.	 	**Material Redacted**
	 
	6.	 	**Material Redacted**

P.A. 2191

SA-20

Option Aircraft

11/09

 

 

 

CONFIDENTIAL TREATMENT

COPA HOLDINGS, S.A

6-1162-RLL-3958R2

	7.	 	**Material Redacted**
	 
	8.	 	**Material Redacted**

Very truly yours,

THE BOEING COMPANY

	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	   	 	 
	 
	 	 	 	 	 	 
	 	 	Its Attorney-In-Fact	 	 
	 
	 	 	 	 	 	 
	ACCEPTED AND AGREED TO this	 	 
	 
	 	 	 	 	 	 
	Date:                                         , 2009	 	 
	 
	 	 	 	 	 	 
	COPA HOLDINGS, S.A.	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	   	 	 
	 
	 	 	 	 	 	 
	 

	 	Its	 	 	 	 
	 	 	 	 	   	 	 

			
	 	 	 
	P.A. 2191
	 	SA-20
	Option Aircraft
	 	11/09

 

2

 

CONFIDENTIAL TREATMENT

 
	 	 	 
	 

	 	Boeing Commercial Airplanes

P.O. Box 3707

Seattle, WA 98124-2207
	 
	 	 

6-1162-RLL-3958R2

COPA HOLDINGS, S.A.

Apartado 1572

Avenida Justo Arosemena y Calle 39

Panama 1, Panama

	 	 	 
	Subject:

	 	Option Aircraft
	 
	 	 
	Reference:

	 	Purchase Agreement No. 2191 (the Purchase Agreement) between
The Boeing Company (Boeing) and COPA HOLDINGS, S.A. (Customer)
relating to Model 737 aircraft (the Aircraft)

This Letter Agreement amends the Purchase Agreement and supersedes and replaces in its entirety
Letter Agreement 6-1162-RLL-3958R1. All terms used but not defined in this Letter Agreement have
the same meaning as in the Purchase Agreement.

**Material Redacted**

	1.	 	Aircraft Description and Changes

1.1 Aircraft Description: The Option Aircraft are described by the Detail
Specification listed in Table 1-11.

1.2 Changes: The Detail Specification will be revised to include:

	 	(i)	 	Changes applicable to the basic Model 737
aircraft which are developed by Boeing between the date of the Detail
Specification and the signing of the definitive agreement to purchase
the Option Aircraft;
	 
	 	(ii)	 	Changes required to obtain required regulatory
certificates; and
	 
	 	(iii)	 	Changes mutually agreed upon.

P.A. 2191

SA-20

Option Aircraft

11/09

 

 

 

 CONFIDENTIAL TREATMENT

COPA HOLDINGS, S.A

6-1162-RLL-3958R2

2. Price

	 	2.1	 	The pricing elements of the Option Aircraft are listed Table 1-11.
	 
	 	2.2	 	Price Adjustments.

2.2.1 Optional Features. The price for Optional Features selected for the Option
Aircraft will be adjusted to Boeing’s current prices as of the date of execution of the definitive
agreement for the Option Aircraft.

2.2.2 Escalation Adjustments. The Airframe Price and the price of Optional Features
for Option Aircraft will be escalated on the same basis as the Aircraft, and will be adjusted to
Boeing’s current escalation provisions as of the date of execution of the definitive agreement for
the Option Aircraft.

2.2.3 Base Price Adjustments. The Airframe Price of the Option Aircraft will be
adjusted to Boeing’s current price as of the date of execution of the definitive agreement for the
Option Aircraft.

3. Payment.

3.1 Customer will pay a deposit to Boeing in the amount shown in Table 1-11 for each Option
Aircraft (Deposit), on the date of this Letter Agreement. If Customer exercises an option, the
Deposit will be credited against the first advance payment due. If Customer does not exercise an
option, Boeing will retain the Deposit for that Option Aircraft.

3.2 Following option exercise, advance payments in the amounts and at the times listed in
Table 1-11 will be payable for the Option Aircraft. The remainder of the Aircraft Price for the
Option Aircraft will be paid at the time of delivery.

			
	 	 	 
	P.A. 2191
	 	SA-20
	Option Aircraft
	 	11/09

 

2

 

CONFIDENTIAL TREATMENT

COPA HOLDINGS, S.A

6-1162-RLL-3958R2

	4.	 	Option Exercise.

4.1 Customer may exercise an option by giving written notice to Boeing on or before the
**Material Redacted** in Table 1-11 (Option Exercise Date). For the two Quarterly Options
delivering in 2012 written notice of the Option Exercise **Material Redacted**.

	 	4.2	 	**Material Redacted**.

	5.	 	**Material Redacted**.
	 
	6.	 	Contract Terms.

Boeing and Customer will use their best efforts to reach a definitive agreement for the
purchase of an Option Aircraft, including the terms and conditions contained in this Letter
Agreement, in the Purchase Agreement, and other terms and conditions as may be agreed upon. In the
event the parties have not entered into a definitive agreement within 30 days following option
exercise, either party may terminate the purchase of such Option Aircraft by giving written notice
to the other within 5 days. If Customer and Boeing fail to enter into such definitive agreement,
Boeing will retain the Deposit for that Option Aircraft.

			
	 	 	 
	P.A. 2191
	 	SA-20
	Option Aircraft
	 	11/09

 

3

 

CONFIDENTIAL TREATMENT

COPA HOLDINGS, S.A

6-1162-RLL-3958R2

Very truly yours,

THE BOEING COMPANY

	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Its Attorney-In-Fact	 	 
	 
	 	 	 	 	 	 
	ACCEPTED AND AGREED TO this	 	 
	 
	 	 	 	 	 	 
	Date:                                         , 2009	 	 
	 
	 	 	 	 	 	 
	COPA HOLDINGS, S.A., INC.	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Its	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Attachment — Table 1-11	 	 
	 

			
			
	 P.A.
2191
	 	SA-20
	Option Aircraft
	 	11/09

 

4

 

CONFIDENTIAL TREATMENT

6-1162-KSW-6419

COPA HOLDINGS, S.A., INC.

Apartado 1572

Avenida Justo Arosemena y Calle 39

Panama 1, Panama

	 	 	 
	Subject:

	 	**Material Redacted**
	 
	 	 
	Reference:

	 	**Material Redacted**

**Material Redacted**

Recitals:

**Material Redacted**

Agreement:

	1.	 	**Material Redacted**
	 
	2.	 	**Material Redacted**
	 
	3.	 	**Material Redacted**
	 
	4.	 	**Material Redacted**
	 
	5.	 	**Material Redacted**

6. The information contained herein represents confidential business information and has value
precisely because it is not available generally or to other parties. Customer will limit the
disclosure of its contents to employees of Customer with a need to know the contents for purposes
of helping Customer perform its obligations under the Purchase Agreement and who understand they
are not to disclose its contents to any other person or entity without the prior written consent of
Boeing.

Very truly yours,

THE BOEING COMPANY

	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Its Attorney-In-Fact	 	 

 

 

 

CONFIDENTIAL TREATMENT

COPA HOLDINGS, S.A., INC.

6-1162-KSW-6419

Page 2

	 	 	 	 	 	 	 
	ACCEPTED AND AGREED TO this	 	 
	 
	 	 	 	 	 	 
	Date:
                                        , 2009	 	 
	 
	 	 	 	 	 	 
	COPA HOLDINGS, S.A., INC.	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Its	 	 	 	 
	 

	 	 	 	 

	 	 

			
	P.A. No. 2191
	 	SA-18
	Fixing_Escalation_Factors	 	 
	07/09	 	 

Boeing Proprietary

 

 

 

CONFIDENTIAL TREATMENT

Attachment A to Letter Agreement 6-1162-KSW-6419

**Material Redacted**

**Material Redacted**

			
	 	 	 
	P.A. No. 2191
	 	SA-18
	 	 	 
	Fixing_Escalation_Factors
	 	07/09

Boeing Proprietary

 

 

 

CONFIDENTIAL TREATMENT

Boeing Commercial Airplanes

P.O. Box 3707

Seattle, Washington 98124-2207

U.S.A.

	 	 	 
	Reference:

	 	Purchase Agreement No. 2191 dated as of November 25, 1998,
between The Boeing Company (Boeing) and COPA HOLDINGS, S.A.,
INC. (the Purchase Agreement)
	 
	 	 
	Attention:

	 	Vice President — Contracts

Mail Code 21-34

**Material Redacted**

THE BOEING COMPANY

	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Its Attorney-in-Fact	 	 
	 

	Dated
	 	 	 	 	 	 
	 	 	   	 	 

			
	 	 	 
	P.A. No. 2191
	 	SA-18
	Fixing_Escalation_Factors
	 	07/09

Boeing Proprietaryexv10w12

Exhibit 10.12

PURCHASE AND SALE AGREEMENT

by and among

ALTISOURCE PORTFOLIO SOLUTIONS S.A.,

and

THE EQUITY INTERESTHOLDERS OF

THE MORTGAGE PARTNERSHIP OF AMERICA, L.L.C.

IDENTIFIED HEREIN

and

THE MANAGEMENT OWNERS IDENTIFIED HEREIN

Dated as of February 12, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	1. DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	2. ACQUISITION OF SHARES OF THE COMPANY
	 	 	1	 
	2.1.Purchase and Sale of Shares.
	 	 	1	 
	2.2.Purchase Price.
	 	 	2	 
	2.3.Payment of Purchase Price.
	 	 	2	 
	2.4.Time and Place of Closing.
	 	 	2	 
	2.5.Deliveries at the Closing.
	 	 	2	 
	2.6.Post-Closing Adjustment.
	 	 	3	 
	2.7.Allocation of Purchase Price.
	 	 	4	 
	 
	 	 	 	 
	3. REPRESENTATIONS AND WARRANTIES OF EACH SELLER AND EACH MANAGEMENT OWNER
	 	 	4	 
	3.1.Organization and Good Standing.
	 	 	4	 
	3.2.Authority; No Conflict.
	 	 	4	 
	3.3.Title to Properties; Capitalization of the Company; Security Interests.
	 	 	5	 
	3.4.Condition and Sufficiency of Assets; Company Records.
	 	 	6	 
	3.5.Taxes.
	 	 	7	 
	3.6.Employee Benefits.
	 	 	9	 
	3.7.Compliance with Legal Requirements; Governmental Authorizations.
	 	 	12	 
	3.8.Legal Proceedings; Orders.
	 	 	13	 
	3.9.Financial Statements.
	 	 	14	 
	3.10.Absence of Certain Changes and Events.
	 	 	14	 
	3.11.Contracts; No Defaults.
	 	 	15	 
	3.12.Insurance.
	 	 	16	 
	3.13.Facilities.
	 	 	16	 
	3.14.Employees.
	 	 	17	 
	3.15.Labor Relations; Compliance.
	 	 	17	 
	3.16.Intellectual Property.
	 	 	17	 
	3.17.Relationships with Related Persons.
	 	 	18	 
	3.18.Brokers or Finders.
	 	 	19	 
	3.19.Sophistication of Investors; Access to Information.
	 	 	19	 
	 
	 	 	 	 
	4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
	 	 	20	 
	4.1.Organization and Good Standing.
	 	 	20	 
	4.2.Authority; No Conflict.
	 	 	20	 
	4.3.Certain Proceedings.
	 	 	20	 
	4.4.Brokers or Finders.
	 	 	21	 
	4.5.SEC Reports.
	 	 	21	 
	4.6.Governmental Consents.
	 	 	21	 
	4.7.Litigation.
	 	 	21	 

i

 

	 	 	 	 	 
	5. POST-CLOSING COVENANTS
	 	 	21	 
	5.1.Litigation Support.
	 	 	21	 
	5.2.Tax Matters.
	 	 	21	 
	5.3.Restrictive Covenants.
	 	 	25	 
	5.4.Audited Financial Statements.
	 	 	27	 
	5.5.Access to Books and Records.
	 	 	28	 
	5.6.PIA Payments.
	 	 	28	 
	5.7.Titleserv Proceeding.
	 	 	30	 
	 
	 	 	 	 
	6. CONDITIONS PRECEDENT TO THE PURCHASER’S OBLIGATION TO CLOSE
	 	 	31	 
	6.1. Accuracy of Representations; Performance of the Sellers and the Management
Owners.
	 	 	31	 
	6.2. Release of Security Interests.
	 	 	33	 
	6.3. Additional Documents.
	 	 	33	 
	 
	 	 	 	 
	7. CONDITIONS PRECEDENT TO THE SELLERS’ AND THE MANAGEMENT OWNERS’ OBLIGATION TO CLOSE
	 	 	33	 
	7.1. Accuracy of Representations; the Purchaser’s Performance.
	 	 	34	 
	7.2. Additional Documents.
	 	 	34	 
	 
	 	 	 	 
	8. INDEMNIFICATION; REMEDIES
	 	 	35	 
	8.1. Survival.
	 	 	35	 
	8.2. Indemnification and Payment of Damages by the Sellers and the Management
Owners.
	 	 	35	 
	8.3. Indemnification and Payment of Damages by the Purchaser.
	 	 	36	 
	8.4. Time Limitations.
	 	 	36	 
	8.5. Limitations on Amount — the Sellers and the Management Owners.
	 	 	37	 
	8.6. Limitations on Amount —the Purchaser.
	 	 	37	 
	8.7. Indemnity Escrow Agreement.
	 	 	37	 
	8.8. Right of Set-Off.
	 	 	38	 
	8.9. Procedure for Indemnification — Third Party Claims.
	 	 	38	 
	8.10. Procedure for Indemnification — Other Claims.
	 	 	40	 
	8.11. Exclusive Remedy.
	 	 	40	 
	8.12. Determination of Damages Amount.
	 	 	40	 
	 
	 	 	 	 
	9. GENERAL PROVISIONS
	 	 	40	 
	9.1. Expenses.
	 	 	40	 
	9.2. Public Announcements.
	 	 	40	 
	9.3. Notices.
	 	 	41	 
	9.4. Jurisdiction; Service of Process.
	 	 	42	 
	9.5. Further Assurances.
	 	 	43	 
	9.6. Waiver.
	 	 	43	 
	9.7. Entire Agreement and Modification.
	 	 	43	 
	9.8. Disclosure Schedule.
	 	 	43	 
	9.9. Obligations; Assignments, Successors, and No Third-Party Rights.
	 	 	44	 
	9.10. Severability.
	 	 	44	 
	9.11. Section Headings; Construction.
	 	 	44	 

ii

 

	 	 	 	 	 
	9.12. Time of Essence.
	 	 	44	 
	9.13. Governing Law.
	 	 	45	 
	9.14. Specific Performance.
	 	 	45	 
	9.15. Counterparts.
	 	 	45	 
	9.16. Seller Representative.
	 	 	45	 
	9.17. Acknowledgment by the Purchaser.
	 	 	47	 
	9.18. Transfer Taxes.
	 	 	47	 
	9.19. Delivery by Electronic Means.
	 	 	47	 

ANNEXES, SCHEDULES AND EXHIBITS

	 	 	 
	Annex I

	 	Definitions
	Schedule 2.3

	 	Payment of Purchase Price
	Schedule 2.3(f)

	 	Pro-Rata Allocation of Purchase Price Payments
	Schedule 5.6(h)

	 	Payment of PIA Payments
	Schedule 6.1(h)

	 	Preferred Investor Agreement Renewals
	Exhibit A

	 	PIA Payments
	Exhibit B

	 	Purchase Price Allocation
	Exhibit C

	 	Required Approvals
	Exhibit D-1

	 	Form of Indemnity Escrow Agreement
	Exhibit D-2

	 	Form of Put Escrow Agreement
	Exhibit E-1

	 	Form of Rights Agreement
	Exhibit E-2

	 	Form of Put Option Agreement
	Exhibit F

	 	Form of Put Security Agreement
	Exhibit G

	 	Form of Put Pledge Agreement
	Exhibit H-1

	 	Form of Scott M. Stern Employment Agreement
	Exhibit H-2

	 	Form of Timothy C. Stern Employment Agreement
	Exhibit H-3

	 	Form of Barry O. Sandweiss Employment Agreement
	Exhibit I

	 	Form of Release Agreement
	Exhibit J

	 	Form of Collateral Agency Agreement

iii

 

PURCHASE AND SALE AGREEMENT

     This Purchase and Sale Agreement (this “Agreement”) is made as of February 12, 2010,
and is by and among ALTISOURCE PORTFOLIO SOLUTIONS S.A., an entity organized under the laws of
Luxembourg (the “Purchaser”); and SCOTT M. STERN REVOCABLE TRUST, a trust established under
the laws of the State of Missouri, TIMOTHY C. STERN, REVOCABLE TRUST, a trust established under the
laws of the State of Missouri, BARRY O. SANDWEISS REVOCABLE TRUST, a trust established under the
laws of the State of Missouri, THE THOMAS A. STERN REVOCABLE TRUST, a trust established under the
laws of the State of Missouri, EVAN HACKEL, an individual resident of the Commonwealth of
Massachusetts, and PARAMOUNT BOND & MORTGAGE CO., INC., a corporation organized under the laws of
the State of Missouri (each of the foregoing individuals and entities are referred to herein as a
“Seller”, and collectively referred to herein as the “Sellers”); and SCOTT M.
STERN, an individual resident of the State of Missouri, TIMOTHY C. STERN, an individual resident of
the State of Missouri, and BARRY O. SANDWEISS, an individual resident of the State of Missouri
(each of the foregoing individuals are referred to herein as a “Management Owner” and
collectively as the “Management Owners”). The Purchaser, the Sellers, and the Management
Owners are referred to in this Agreement individually as a “Party” and collectively, as the
“Parties”.

RECITALS

     In the manner described herein, the Sellers own all of the issued and outstanding limited
liability company interests of the Company. The Management Owners are beneficiaries of certain of
the trusts included in the Sellers. This Agreement contemplates a transaction in which the Sellers
shall sell, transfer, assign and deliver to the Purchaser, the Sellers’ entire right, title, and
interest in and to the Shares, and in connection therewith, the Sellers and the Management Owners
shall receive the consideration set forth herein.

AGREEMENT

     In consideration of the premises and the mutual promises herein made, and in consideration of
the representations, warranties, and covenants herein contained, the Parties hereto, intending to
be legally bound, hereby agree as follows:

1. DEFINITIONS

     For purposes of this Agreement, the capitalized terms not otherwise defined herein shall have
the meanings specified or referred to in Annex I.

2. ACQUISITION OF SHARES OF THE COMPANY

     2.1. Purchase and Sale of Shares.

          On the terms and subject to the conditions set forth in this Agreement, the Purchaser agrees
to purchase from the Sellers, and the Sellers agree to sell, transfer, convey, assign and deliver
to the Purchaser, all of the Shares at the Closing for the consideration specified in Section 2.2
below, free and clear of any Security Interest other than restrictions

 

 

pursuant to applicable securities laws, for the consideration specified in Section 2.2 below.

     2.2. Purchase Price.

          In accordance with the terms and conditions of this Agreement, (i) in consideration for the
sale, transfer, conveyance, assignment, and delivery of the Shares by the Sellers to the Purchaser,
the Sellers shall be entitled to receive, in the manner described in Section 2.3 below and subject
to the adjustments set forth in Section 2.6 below, (x) at Closing, cash in the amount of Twenty
Seven Million Nine Hundred Forty One Thousand Nine Hundred And Ninety Two Dollars ($27,941,992)
(such amount, the “Cash Payment”), and (y) at Closing, Nine Hundred Fifty Nine Thousand And
Eighty five (959,085) shares of common stock of the Purchaser, consisting of Four Hundred Eight
Six, Two Hundred And Forty Three (486,243) shares of Unrestricted Stock, and Four Hundred Seventy
Two Thousand, Eight Hundred And Forty Two (472,842) shares of Restricted Stock (the “Stock
Payment”), and (ii) in consideration for the covenants set forth in Section 5.3 below by the
Sellers and the Management Owners in favor of the Purchaser, the Sellers and the Management Owners
shall be entitled to receive, in the manner described in Section 2.3 below, cash in the amount of
One Million, Fifty Eight Thousand And Eight Dollars ($1,058,008) (the “Noncompete Payment”)
(such aggregate amount of the Cash Payment, the Stock Payment, and the Noncompete Payment, as
adjusted, the “Purchase Price”).

     2.3. Payment of Purchase Price.

          The Purchase Price which is payable at Closing shall be paid as set forth on Schedule
2.3, as further calculated and in accordance with the Funds Flow and Settlement Statement.

     2.4. Time and Place of Closing.

          The closing of the transactions contemplated by this Agreement (the “Closing”) shall
be effected by facsimile or other electronic exchange of documentation, and shall take place at the
offices of Gallop, Johnson & Neuman, L.C., Interco Corporate Tower, 101 S. Hanley Road, Suite 1700,
St. Louis, Missouri 63105, or such other mutually agreed location, or in such other mutually agreed
upon manner, at 9:00 a.m. on either (i) the second Business Day which follows the receipt by the
Parties of all Required Approvals, and follows the satisfaction of all other conditions precedent
to the consummation of the Contemplated Transactions, or (ii) such other date and time as the
Parties may mutually agree (the “Closing Date”). The Parties agree that the Closing shall
be effective as of the Effective Time. Failure to consummate the purchase and sale provided for in
this Agreement on the date and time and at the place determined pursuant to this Section 2.4 will
not result in the termination of this Agreement and will not relieve any Party of any obligation
under this Agreement.

     2.5. Deliveries at the Closing.

          At the Closing, the Sellers and the Management Owners will deliver to the Purchaser the
various certificates, instruments, and documents referred to in Section 6 below; the Purchaser will
deliver to the Sellers and the Management Owners the various certificates,

2

 

instruments, and documents referred to in Section 7 below; and the Purchaser will deliver
Purchase Price payable at Closing in accordance with Section 2.3 above.

     2.6. Post-Closing Adjustment.

          (a) The Purchase Price shall be increased or decreased, on a dollar-for-dollar basis, in
accordance with this Section 2.6. Any such increase or decrease shall be referred to as a
“Price Adjustment”.

          (b) No later than ninety (90) days after the Closing Date, the Purchaser shall deliver to the
Seller Representative the following:

     (i) a statement setting forth the Net Working Capital of the Company as of
11:59 PM Eastern Time on January 31, 2010 (the “Closing Net Working Capital
Statement”); and

     (ii) a separate statement showing any calculations with respect to any
necessary Price Adjustment (the “Final Adjustment Schedule”).

All accounting entries will be made regardless of their amount and all detected errors and
omissions will be corrected regardless of their materiality.

          (c) The Seller Representative shall, within thirty (30) days following its receipt of the
Closing Net Working Capital Statement and the Final Adjustment Schedule, accept or reject the Price
Adjustment submitted by Purchaser. If the Seller Representative disagrees with such calculation,
it shall give written notice to Purchaser of such disagreement and any reason therefor (the
“Notice of Disagreement with Price Adjustment”) within such thirty (30) day period. Should
the Seller Representative fail to provide Purchaser with a Notice of Disagreement with Price
Adjustment within such thirty (30) day period, the Sellers shall be deemed to agree with
Purchaser’s calculation. During the thirty (30) days immediately following the delivery of a
Notice of Disagreement with Price Adjustment, Purchaser and Seller Representative shall seek in
good faith to resolve in writing any differences which they may have with respect to the matters
specified in such Notice of Disagreement with Price Adjustment. If such differences have not been
resolved by the end of such thirty (30)-day period, the Purchaser and the Seller Representative
shall submit to the Indianapolis, Indiana office of Ernst & Young LLP (the “Arbitrator”)
for review and resolution of any and all matters which remain in dispute and which were included in
any Notice of Disagreement with Price Adjustment. The Arbitrator shall act as an arbitrator and
shall issue its report as to the contents of the Closing Net Working Capital Statement, and the
determination of the Price Adjustment reflected in the Final Adjustment Schedule, within sixty (60)
days after such dispute is referred to the Arbitrator. The Sellers on the one hand, and the
Purchaser on the other hand, shall bear all costs and expenses incurred by him or it in connection
with such arbitration, except that the fees and expenses of the Arbitrator hereunder shall be borne
by the Sellers and the Purchaser in such proportion as the Arbitrator shall determine based on the
relative merit of the position of the Parties. This provision for arbitration shall be
specifically enforceable by the Parties and the decision of the Arbitrator in accordance with the
provisions hereof shall be final and binding with respect to the matters so arbitrated and there
shall be no right of appeal therefrom.

3

 

          (d) If, based on the Final Adjustment Schedule as finally determined, (i) the Net Working
Capital of the Company as of 11:59 PM Eastern Time on January 31, 2010, is less than the Working
Capital Target, the Sellers, jointly and severally, shall pay to Purchaser such deficiency in cash
or other immediately available funds no later than two (2) Business Days following the date of such
final determination, or (ii) the Net Working Capital of the Company as of 11:59 PM Eastern Time on
January 31, 2010, is greater than the Working Capital Target, the Purchaser shall pay to the
Sellers such excess in cash or other immediately available funds no later than two (2) Business
Days following the date of such final determination.

     2.7. Allocation of Purchase Price.

          The Purchase Price will be allocated for all purposes (including Tax and financial accounting
purposes) as set forth (or in accordance with the methodology set forth) in Exhibit B
hereto (the “Purchase Price Allocation”). Unless prohibited by applicable Legal
Requirements, each of the Parties hereto will not take a position on any Tax Return, before any
Governmental or Regulatory Body charged with the collection of any Tax, or in any action or
Proceeding, that is in any way inconsistent with the Purchase Price Allocation and will cooperate
with each other in timely filing consistent with such allocation with the IRS.

3. REPRESENTATIONS AND WARRANTIES OF EACH SELLER AND EACH MANAGEMENT OWNER

     Subject to the limitations contained in Section 8 herein, each Management Trust and each
Management Owner, jointly and severally, and each Financial Investor, severally and not jointly,
represents and warrants to the Purchaser that the statements contained in this Section 3 are true,
correct and complete as of the Closing Date, except as specified to the contrary in the disclosure
schedules prepared by the Sellers accompanying this Agreement (the “Disclosure Schedule”).
The Disclosure Schedule will be arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Section 3, and in accordance with Section 9.8(a) below.

     3.1. Organization and Good Standing.

          (a) The Company is a limited liability company duly organized, validly existing, and in good
standing under the laws of its jurisdiction of organization, with full limited liability company
power and authority to conduct its business as it is now being conducted, and to own or use the
properties and assets that it purports to own or use in connection with the Business.

          (b) Each of the Sellers and the Management Owners has the full power and authority to perform
all of his or its obligations under the Transaction Documents. The Company is duly qualified to do
business as a foreign limited liability company and is in good standing under the laws of each
state or other jurisdiction in which the conduct of the Business requires such qualification,
except for those jurisdictions in which the failure to be so qualified would not result in a
material adverse effect on the Company or the Business.

     3.2. Authority; No Conflict.

          (a) This Agreement constitutes the legal, valid, and binding obligation of the Sellers and the
Management Owners, enforceable against the Sellers and the Management

4

 

Owners in accordance with its terms. Upon the execution and delivery by the Sellers and the
Management Owners of the Transaction Documents to which they are a party, the Transaction Documents
to which the Sellers and the Management Owners are a party will constitute the legal, valid, and
binding obligations of the Sellers and the Management Owners, enforceable against the Sellers and
the Management Owners in accordance with their respective terms except as enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the rights of creditors generally, and the availability of equitable remedies. The board
of directors, board of managers, shareholders, and members of the Sellers and the Company, who are
by applicable Legal Requirements required to approve and authorize the Transaction Documents and
the Contemplated Transactions, have approved and authorized the Transaction Documents and the
Contemplated Transactions, in each case without condition, limitation or restriction. The Sellers
and the Management Owners have the right, power, authority, and capacity to execute and deliver
this Agreement and the Transaction Documents to which he or it is a party and to perform his or its
obligations under this Agreement and the Transaction Documents to which he or it is a party.

          (b) Neither the execution and delivery of this Agreement nor the consummation or performance
of any of the Contemplated Transactions will, directly or indirectly (with or without notice or
lapse of time): (i) contravene, conflict with, or result in a violation of (A) any provision of the
Organizational Documents of the Company or any Seller who is not a natural person, or (B) any
resolution or authorization adopted by the board of directors, board of managers, trustees,
shareholders or members (as the case may be) of the Company or any Seller who is not a natural
person; (ii) contravene, conflict with, or result in a violation of any of the terms or
requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel,
terminate, or modify, any material Governmental Authorization with respect to the Company; (iii)
contravene, conflict with, or result in a material violation or material breach of any provision
of, or give any Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate, or modify, any material
Contract to which the Company is a party; or (iv) except as specifically contemplated by the
Transaction Documents, result in the imposition or creation of any Security Interest upon or with
respect to any of the Shares, or any asset of the Company. Other than obtaining the Required
Approvals, and except as set forth on Schedule 3.2(b), none of the Sellers, the Management
Owners, or the Company are required to obtain any Consent from, or provide any notice to, any
Person in connection with the execution and delivery of this Agreement and the other Transaction
Documents or the consummation or performance of any of the Contemplated Transactions, or to permit
Purchaser and the Company to carry on the Business after Closing as it is currently conducted by
the Company.

          (c) The Sellers, the Management Owners, and the Company have taken all action so that the
entering into of this Agreement and the other Transaction Documents, and except as provided above,
the consummation of the Contemplated Transactions do not and will not result in the grant of any
rights to any Person under the Organizational Documents of the Company, or restrict the ability of
the Purchaser to otherwise exercise the rights of the Sellers with respect to the Shares.

     3.3. Title to Properties; Capitalization of the Company; Security Interests.

5

 

          (a) The Sellers have, and at Closing will have, good and valid title to all of the Shares.
The Shares constitute one hundred percent (100%) of the issued and outstanding limited liability
company interests of the Company.

          (b) The Shares will be transferred by the Sellers to the Purchaser at Closing, free and clear
of any Security Interest except as otherwise provided in this Agreement. After giving effect to
the Closing, the Purchaser will hold one hundred percent (100%) of the issued and outstanding
equity interests of the Company, free and clear of any Security Interest except as otherwise
provided in this Agreement. After giving effect to the Closing, the Company will have good and
valid title to all of its assets, free and clear of any Security Interest except as otherwise
provided in this Agreement.

          (c) The authorized, issued, and outstanding equity securities of the Company (including,
without limitation, Equity Rights) are owned, beneficially and of record, by the Persons and in the
amounts shown on Schedule 3.3(c). All such securities have been validly issued. No Person
other than the Purchaser has any oral or written agreement, option, warrant, right, privilege or
any other right, commitment or arrangement of any character capable of becoming any of the
foregoing (whether legal, equitable, contractual or otherwise) for the purchase, subscription or
issuance of the Shares or any other securities of the Company. Except for the Operating Agreement
of the Company and that certain Members Transfer Agreement dated as of September 21, 2000, there
are no shareholders’ agreements, pooling agreements, voting trusts, proxies or other similar
agreements, arrangements or understandings with respect to the ownership or voting of any of the
Shares or other securities of or interests in the Company. None of the outstanding equity
securities or other securities of the Company was issued in violation of the Securities Act of
1933, as amended (and the rules and regulations promulgated thereunder) or any other Legal
Requirement, as applicable.

          (d) Except as set forth on Schedule 3.3(d), the Company does not own, and does not
have any Contract to acquire, any equity securities or other securities of any Person or any direct
or indirect equity or ownership interest in any other business. Except as set forth on
Schedule 3.3(d), the Company does not have any direct or indirect subsidiaries or
Affiliates. The Company does not hold an equity interest in Springhouse. Except for the Company,
neither the Sellers nor the Management Owners have any Affiliates which are engaged in the business
of managing and operating a mortgage banking cooperative. Except as set forth on Schedule
3.3(d), the Company is not, nor has it agreed to become, a partner, member, owner, proprietor
or equity investor of or in any partnership, joint venture, co-tenancy or other similar
jointly-owned business undertaking. There is no agreement, option, or other right or privilege
outstanding in favor of any Person for the purchase of the assets of the Company.

          (e) Except as set forth on Schedule 3.3(e), the Company owns, or has a valid leasehold
interest in, all of the tangible and intangible assets and properties necessary or used by the
Company for the operation of the Business as conducted prior to the Closing Date.

     3.4. Condition and Sufficiency of Assets; Company Records.

          (a) The equipment of the Company is structurally sound, is in good operating condition and
repair, and is adequate for the uses to which it is being put, and none of such

6

 

equipment is in need of material maintenance or repairs except for ordinary wear and tear,
routine maintenance and repairs. Except as set forth on Schedule 3.4(a), the building,
facilities, structures, improvements, equipment and other tangible personal property of the Company
are sufficient for the continued conduct of the Business immediately after the Closing in
substantially the same manner as the Company presently conducts it.

          (b) The books of account and other records of the Company are substantially complete and
correct in all material respects and, except as set forth on Schedule 3.4(b), have been
maintained in accordance with sound business practices, including the maintenance of an adequate
system of internal controls, in each case as applicable to a privately-held company which is
similarly-situated to the Company.

          (c) A copy of the Organizational Documents of the Company has been delivered to the Purchaser
by the Management Owners on or before the Closing Date. Such Organizational Documents of the
Company as so delivered constitute all of the organizational documents of the Company, are complete
and correct and are in full force and effect in all material respects.

          (d) The original or true copies of all limited liability company records of the Company have
been made available to the Purchaser for review prior to the Closing Date. Such records have been
maintained in accordance with applicable Legal Requirements. All resolutions contained in such
records have been duly passed and all such meetings have been duly called and held, except where
the call for such meeting was waived. The share certificate books, register of members, register
of transfer and register of managers of the Company, as applicable, are complete and accurate and
applicable Taxes with respect to the Shares have been duly paid.

          (e) The list of managers and officers on Schedule 3.4(e) hereto constitutes a complete
and accurate list of all officers and managers of the Company on the date hereof.

          (f) Schedule 3.4(f) lists each Cooperative Member as of the Closing Date.

     3.5. Taxes.

     To the Knowledge of the Management Owners:

          (a) All Tax Returns that were required to be filed (taking into account any extensions of time
within which to file) by or with respect to the Company have been duly and timely filed, and all
such Tax Returns are true, correct, and complete in all material respects. All Taxes shown to be
due on the foregoing Tax Returns or that were otherwise due and payable by the Company have been
timely paid in full. All Taxes that the Company was obligated to withhold from amounts paid or
owing to any employee, creditor, partner or third party have been paid over to the proper
Governmental Body in a timely manner, to the extent due and payable, and any Tax Returns with
respect to such Taxes are true, correct, and complete in all material respects. No currently
effective extensions or waivers of statutes of limitation have been given by or requested with
respect to the filing of any Tax Returns by or with respect to the Company, or with respect to the
assessment of any Taxes due from the Company. No deficiencies or

7

 

adjustments for any Taxes have been proposed or assessed in writing with respect to the
Company, and there is no factual or legal basis for the assessment of any deficiency or adjustment
in Taxes with respect to the Company. There is no audit, examination or other proceeding with
respect to any Tax Return of the Company in progress, and no Governmental Body has notified the
Company that it intends to commence any audit, examination or other proceeding with respect to any
Tax Return of the Company. There are no matters under discussion with any Governmental Body with
respect to Taxes that could result in an additional amount of Taxes, and there is no threatened
action, suit, proceeding, investigation, audit, or claim for or relating to Taxes. No Security
Interests for Taxes exist with respect to any assets or properties of the Company except for
statutory liens and claims and charges for Taxes not yet due and payable. The Company has
disclosed on its Tax Returns all positions taken therein that could give rise to the
accuracy-related penalties of Section 6662 or Section 6662A of the IRC or to a similar penalty
under the Legal Requirements of any other taxing jurisdiction, and have otherwise properly
disclosed to the appropriate Governmental Body all positions or transactions relating to Taxes that
are required to be disclosed under the Legal Requirements of any jurisdiction to which the Company
is subject. The Company has heretofore delivered to the Purchaser in all material respects correct
and complete copies of all of the federal and state Tax Returns of the Company for the respective
tax years ended December 31, 2008, and December 31, 2007, and no amendments or other changes have
been made thereto since the date of such delivery.

          (b) The Company has made adequate provision in its financial statements (utilizing the accrual
method of accounting) for all unpaid Taxes of the Company, and the charges, accruals, and reserves
with respect to unpaid Taxes on the books of the Company are adequate and are at least equal to the
liabilities of the Company for unpaid Taxes. Since December 31, 2008, other than the transactions
contemplated in this Agreement, the Company has not incurred any liability for Taxes other than in
the Ordinary Course.

          (c) The Company is currently and has been characterized as a partnership for United States
federal income tax and state income tax purposes for all taxable periods since its organization.

          (d) The Company has never been a member of any affiliated, combined, unitary or similar group
filing a consolidated, combined, unitary or similar federal or state income Tax Return (other than
the group of which the Company is the common parent) and none of the assets of the Company could be
subject to levy for the Tax liabilities of the Company or any other person or entity (other than
the Company) under Treasury Regulations §1.1502-6 (or any similar provision of state, local or
foreign Law), including as a transferee or successor, by contract, or otherwise. The Company is
not a party to or bound by any Tax indemnity, Tax sharing, or Tax allocation agreements.

          (e) No claim has ever been made by an authority in a jurisdiction where the Company does not
file Tax Returns that the Company is or may be subject to taxation by that jurisdiction, nor is
there any factual or legal basis for any such claim.

          (f) Each Seller is not a “foreign person” within the meaning of Sections 1445 and 7701 of the
IRC. The Company has not been a United States real property holding corporation

8

 

within the meaning of Section 897(c)(2) of the IRC during the applicable period specified in
Section 897(c)(1)(A)(ii) of the IRC.

          (g) The Company is not required to make any adjustment under IRC Section 481(a) by reason of a
change in method of accounting.

     3.6. Employee Benefits.

     To the Knowledge of the Management Owners:

          (a) Except as disclosed on Schedule 3.6(a), no other corporation, trade, business, or
other entity, other than the Company, would, together with the Company, now or in the past
constitute a single employer within the meaning of Section 414 of the IRC. The Company and any
other entities which now or in the past constitute a single employer within the meaning of IRC
Section 414 are hereinafter collectively referred to as the “Company Group”.

          (b) Schedule 3.6(b) contains a complete list of all the following agreements or plans
which are presently in effect or which have previously been in effect and which cover employees of
any member of the Company Group (“Employees”), and indicating, with respect to each, the
plans for which the Company maintains or contributes to on behalf of its Employees:

     (i) Any employee benefit plan as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and any trust
or other funding agency created thereunder, or under which any member of the Company
Group, with respect to Employees, has any outstanding, present, or future obligation
or liability, or under which any Employee or former Employee has any present or
future right to benefits which are covered by ERISA; or

     (ii) Any other pension, profit sharing, retirement, deferred compensation,
stock purchase, stock option, incentive, bonus, vacation, severance, disability,
hospitalization, medical, life insurance or other employee benefit plan, program,
policy, or arrangement, whether written or unwritten, formal or informal, which any
member of the Company Group maintains or to which any member of the Company Group
has any outstanding, present or future obligations to contribute to, contingent or
otherwise, or to which any member of the Company Group has any liability.

The plans, programs, policies, or arrangements described in subparagraph (i) or (ii) above are
hereinafter collectively referred to as the “Company Plans”. The Company has delivered to
Purchaser true and complete copies of all written plan documents and contracts evidencing the
Company Plans, as they may have been amended to the date hereof, together with the following: (1)
all documents, including any insurance contracts and trust agreements, setting forth the terms of
the Company Plan, or if there are no such documents evidencing the Company Plan, a full description
of the Company Plan, (2) the ERISA summary plan description and any other summary of plan
provisions provided to participants or beneficiaries for each such Company Plan, (3) all documents,
including without limitation, Forms 5500, relating to any Company Plans required to have been filed
prior to the date hereof with governmental authorities for each

9

 

of the three most recently completed plan years with respect to each Company Plan, (4) each
favorable determination letter, opinion or ruling from the IRS for each Company Plan, the assets of
which are held in trust, to the effect that such trust is exempt from federal income tax, including
any outstanding request for a determination letter and (5) each opinion or ruling from the
Department of Labor or the Pension Benefit Guaranty Corporation (“PBGC”) with respect to
such Company Plans; (6) attorney’s response to an auditor’s request for information for each of the
three most recently completed plan years for each Company Plan; and (7) financial statements and
actuarial reports, if any for each Company Plan for the three most recently completed plan years.

          (c) Except as to those plans identified on Schedule 3.6(c) as tax-qualified Company
Plans (the “Company Qualified Plans”), no member of the Company Group maintains or
previously maintained a Company Plan which meets or was intended to meet the requirements of IRC
Section 401(a). Either (i) the IRS has issued favorable determination letters to the effect that
each Company Qualified Plan qualifies under IRC Section 401(a) and that any related trust is exempt
from taxation under IRC Section 501(a), and such determination letters remain in effect and have
not been revoked, (ii) an application for a favorable determination letter has been filed and is
pending with the IRS for a Company Plan, or (iii) the Company is entitled to rely on a favorable
opinion or advisory letter with respect to the Company Plan pursuant to the provisions of Section
8.02 of IRS Rev. Proc. 2010-6. Copies of the most recent determination letters and any outstanding
requests for a determination letter with respect to each Company Qualified Plan have been delivered
to Purchaser. Except as disclosed on Schedule 3.6(c), no Company Qualified Plan has been
amended since the issuance of each respective determination letter. The Company Qualified Plans
currently comply in form with the requirements under IRC Section 401(a), other than changes
required by statutes, regulations and rulings for which amendments are not yet required.

          (d) No issue concerning the qualification of the Company Qualified Plans is pending before or
is threatened by the IRS. The Company Qualified Plans have been administered according to their
terms (except for those terms which are inconsistent with the changes required by statutes,
regulations, and rulings for which changes are not yet required to be made, in which case the
Company Qualified Plans have been administered in accordance with the provisions of those statutes,
regulations and rulings) and in accordance with the requirements of IRC Section 401(a). No member
of the Company Group or any fiduciary of any Company Qualified Plan has done anything that would
adversely affect the qualified status of the Company Qualified Plans or the related trusts.

          (e) Any Company Qualified Plan which is required to satisfy IRC Section 401(k)(3) and
401(m)(2) has been tested for compliance with, and has satisfied the requirements of, IRC Sections
401(k)(3) and 401(m)(2) for each plan year ending prior to the Closing Date.

          (f) Each member of the Company Group is in compliance with the requirements prescribed by any
and all statutes, orders, governmental rules and regulations applicable to the Company Plans and
all reports and disclosures relating to the Company Plans required to be filed with or furnished to
any governmental entity, participants or beneficiaries prior to the Closing Date have been or will
be filed or furnished in a timely manner and in accordance with applicable Legal Requirements.

10

 

          (g) Except as expressly identified on Schedule 3.6(g), no termination or partial
termination of any Company Qualified Plan has occurred nor has a notice of intent to terminate any
Company Qualified Plan been issued by a member of the Company Group.

          (h) No member of the Company Group maintains or has maintained an “employee benefit pension
plan” within the meaning of ERISA Section 3(2) that is or was subject to Title IV of ERISA.

          (i) Except as listed in Schedule 3.6(i), any Company Plan can be terminated on or
prior to the Closing Date without liability to any member of the Company Group or the Purchaser,
including without limitation, any additional contributions, penalties, premiums, fees or any other
charges as a result of the termination, except to the extent of funds set aside for such purpose or
reflected as reserved for such purpose on the December 31, 2009, Financial Statements.

          (j) Each member of the Company Group has made full and timely payment of, or has accrued
pending full and timely payment, all amounts which are required under the terms of each of the
Company Plans and in accordance with applicable Legal Requirements to be paid as a contribution to
each Company Plan and no excise taxes are assessable as a result of any nondeductible or other
contributions made or not made to a Company Plan. The assets of all Company Plans which are
required under applicable Legal Requirements to be held in trust are in fact held in trust, and the
assets of each such Company Plan equal or exceed the liabilities of each such plan. The
liabilities of each other plan are properly and accurately reported on the financial statements and
records of the Company. The assets of each Company Plan are reported at their fair market value on
the books and records of each plan.

          (k) No member of the Company Group has any past, present, or future obligation or liability to
contribute to any multiemployer plan as defined in ERISA Section 3(37).

          (l) No member of the Company Group nor any other “disqualified person” or “party in interest”
(as defined in IRC Section 4975 and ERISA Section 3(14), respectively) with respect to the Company
Plans, has engaged in any “prohibited transaction” (as defined in IRC Section 4975 or ERISA Section
406). All members of the Company Group and all “fiduciaries” (as defined in ERISA Section 3(21))
with respect to the Company Plans, including any members of the Company Group which are fiduciaries
as to a Company Plan, have complied in all respects with the requirements of ERISA Section 404. No
member of the Company Group and no party in interest or disqualified person with respect to the
Company Plans has taken or omitted any action which could lead to the imposition of an excise tax
under IRC or a fine under ERISA. Except as set forth on Schedule 3.6(l), no member of the
Company Group is subject to any material liability, tax or penalty whatsoever to any person
whomsoever as a result of a member of the Company Group’s engaging in a prohibited transaction
under ERISA or the IRC, and there are no circumstances which reasonably might result in any such
material liability, tax or penalty as a result or a breach of fiduciary duty under ERISA.

          (m) Each member of the Company Group has complied with the continuation coverage requirements
of Section 1001 of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and
ERISA Sections 601 through 608. Each member of the Company

11

 

Group has also complied with the portability, access, and renewability provisions of Section
K, Chapter 100 of the IRC and Section 701 et. seq. of ERISA.

          (n) Except as disclosed on Schedule 3.6(n), no member of the Company Group has made or
is obligated to make any nondeductible contributions to any Company Plan. No member of the Company
Group is obligated, contingently or otherwise, under any agreement to pay any amount which would be
treated as a “parachute payment,” as defined in IRC Section 280G(b) (determined without regard to
IRC Section 280G(b)(2)(A)(ii)).

          (o) Other than routine claims for benefits, there are no actions, audits, investigations,
suits or claims pending, or threatened against any Company Plan, any trust or other funding agency
created thereunder, or against any fiduciary of any Company Plan or against the assets of any
Company Plan. Except as disclosed on Schedule 3.6(o), the consummation of the transactions
contemplated hereby will not accelerate or increase any liability under any Company Plan because of
an acceleration or increase of any of the rights or benefits to which Employees may be entitled
thereunder.

          (p) Except as listed in Schedule 3.6(p), no member of the Company Group has any
obligation to any retired or former employee or any current employee of the Company upon retirement
or termination of employment under any Company Plan. Except as listed in Schedule 3.6(p),
no member of the Company Group maintains, or has at any time established or maintained, or has at
any time been obligated to make, or made, contributions to or under any plan which provides
post-retirement medical or health benefits with respect to employees of the Company.

          (q) Except as disclosed on Schedule 3.6(q), no member of the Company Group has made
representations or warranties (whether written or oral, express or implied) contractually or
otherwise to any client or customer of a member of the Company Group that Employees rendering
services to such client or customer are not “leased employees” (within the meaning of Section
414(n) of the IRC) or that such Employees would not be required to participate under any pension
benefit plan (within the meaning of Section 3(2) of ERISA) (a “Pension Benefit Plan”) of
such client or customer relating either to (i) providing benefits to employees of the member of the
Company Group under a Pension Benefit Plan or (ii) making contributions to or reimbursing such
client or customer for any contributions made to a Pension Benefit Plan of such client or customer
on behalf of Employees.

          (r) Except as set forth on Schedule 3.6(r), the Company does not maintain any
“nonqualified deferred compensation plans” within the meaning of IRC Section 409A. Each
nonqualified deferred compensation plan that is subject to IRC Section 409A complies in form and in
operation with paragraphs (2), (3) and (4) of IRC Section 409A and no amount thereunder is or may
become subject to IRC Section 409A(1).

     3.7. Compliance with Legal Requirements; Governmental Authorizations.

          (a) Except as set forth in Schedule 3.7(a): (i) the Company has complied in all
material respects with each Legal Requirement that is or was applicable to it or to the conduct or
operation of the Business, or the ownership or use of any of the assets of the Company; (ii) to the

12

 

Knowledge of the Management Owners, no event has occurred or circumstance exists that (with or
without notice or lapse of time) may constitute or result in a material violation by the Company
of, or a failure on the part of the Company to comply with, any material Legal Requirement in the
conduct of the operation of the Business; and (iii) the Company has not received any notice or
other communication (whether oral or written) from any Governmental Body or any other Person
regarding any actual, alleged, possible, or potential violation of, or failure to comply with, any
material Legal Requirement in the conduct of the operation of the Business.

          (b) Schedule 3.7(b) contains a complete and accurate list of each material
Governmental Authorization that is held by the Company. Each material Governmental Authorization
listed or required to be listed in Schedule 3.7(b) is valid and in full force and effect.
Except as set forth in Schedule 3.7(b): (i) the Company has complied in all material
respects with all of the terms and requirements of each Governmental Authorization identified or
required to be identified in Schedule 3.7(b); (ii) to the Knowledge of the Management
Owners, no event has occurred or circumstance exists that may (with or without notice or lapse of
time) constitute or result directly or indirectly in a material violation of or a failure to comply
with any term or requirement of any Governmental Authorization listed or required to be listed in
Schedule 3.7(b); and (iii) the Company has not received any notice or other communication
(whether oral or written) from any Governmental Body regarding any actual, alleged, possible, or
potential violation of or failure to comply with any term or requirement of any material
Governmental Authorization.

          (c) The Company advises the Purchaser that certain legislation has been either proposed or
enacted as of the Closing Date which may affect the operations of the Business. By way of example
only, set forth on Schedule 3.7(c) is a list of examples of such proposed or enacted
legislation.

     3.8. Legal Proceedings; Orders.

          (a) Except as set forth on Schedule 3.8, there is no pending Proceeding for which the
Company has received service of process (or to the Knowledge of the Management Owners, there is no
pending proceeding for which the Company has not received service of process): (i) that has been
commenced by or against the Company with respect to the Business, the Company, the Shares, or the
assets of the Company; or (ii) that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the Contemplated Transactions. To
the Knowledge of the Management Owners, (A) no such Proceeding has been threatened, and (B) no
event has occurred or circumstance exists that may give rise to or serve as a basis for the
commencement of any such Proceeding.

          (b) Except as set forth in Schedule 3.8: (i) there is no Order to which the Company or
the Business is subject; (ii) there is no Order to which the Sellers or the Shares is subject which
in any manner would affect or limit a Seller’s or a Management Owner’s ability to consummate the
Contemplated Transactions, and (iii) to the Knowledge of the Management Owners, no employee of the
Company is subject to any Order that prohibits such officer, manager, agent, or employee from
engaging in or continuing any conduct, activity, or practice relating to the Business.

13

 

     3.9. Financial Statements.

          (a) Schedule 3.9(a) sets forth the unaudited balance sheet of the Company as of
December 31, 2009, and December 31, 2008, and the related statement of income of the Company for
the fiscal year then ended, together with all related schedules and supporting information with
respect thereto (collectively referred to herein as the “Financial Statements”). The
Financial Statements (i) were prepared in accordance with the books of account and other financial
records of the Company, (ii) present fairly in all material respects the financial condition and
results of operations of the Company as of the dates thereof or for the periods covered thereby,
and (iii) were prepared on a basis consistent with the past practice of the Company.

          (b) The Company has no Liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise, whether due or to become due, whether known or unknown, and regardless of when asserted)
except for (i) Liabilities reflected and reserved against on the face (rather than in any notes
thereto) of the Financial Statements, (ii) trade accounts payable which have arisen after the
December 31, 2009, Financial Statements in the Ordinary Course or as a result of transactions
contemplated in this Agreement, and (iii) Liabilities that are disclosed on Schedule
3.9(b).

          (c) Schedule 3.9(c) sets forth a complete and accurate list and description of all
instruments or other documents relating to any direct or indirect Indebtedness of the Company, as
well as Indebtedness by way of lease-purchase arrangements, guarantees, undertakings on which
others rely in extending credit and all conditional sales contracts, chattel mortgages and other
security arrangements with respect to personal property used or owned by the Company. The Company
has made available to the Purchaser a correct and complete copy of each of the items required to be
listed on Schedule 3.9(c). After giving effect to the Closing, the Company will not have
any Indebtedness.

     3.10. Absence of Certain Changes and Events.

          (a) Since January 1, 2009, there has not been any material adverse change in the operations,
properties, assets, or condition of the Company.

          (b) Since January 1, 2009, except as set forth in Schedule 3.10, there has not been
any: (i) payments by the Company other than those accrued and accounted for in the 2009 Financial
Statements or other than in the Ordinary Course; (ii) increases in compensation by the Company of
any bonuses, salaries, or other compensation to any employee, except in the Ordinary Course; (iii)
or entry into any employment, severance, or similar Contract with any employee of the Company, (iv)
adoption of, or increase in the payments to or benefits under, any profit sharing, bonus, deferred
compensation, savings, insurance, pension, retirement, or other employee benefit plan for or with
any employees of the Company; (v) damage to or destruction or loss of any asset or property of the
Company, whether or not covered by insurance, adversely affecting the assets, business, financial
condition, or prospects of the Company or the Business; (vi) entry into, termination of, or receipt
of notice of termination of any material agreement with respect to operation of the Company or the
Business; (vii) sale, lease, or other disposition of any material amount of assets of the Company;
(viii) cancellation or waiver of any material claims or

14

 

rights with respect to the Company or the Business; (ix) change in the authorized or issued
equity securities of the Company; grant of any option or right to purchase equity securities of the
Company; issuance of any security convertible into such equity securities; grant of any
registration rights; purchase, redemption, retirement, or other acquisition by the Company of any
equity securities; or declaration or payment of any dividend or other distribution or payment in
respect of the equity securities of the Company; (x) amendment to the Organizational Documents of
the Company; (xi) commitment by the Company to expend material funds, except for such commitments
arising in the Ordinary Course; (xii) change in the accounting methods used by the Company; or
(xiii) agreement, whether oral or written, by the Company or the Sellers to do any of the
foregoing.

     3.11. Contracts; No Defaults.

          (a) Schedule 3.11(a) contains a complete and accurate list, and except for those
Contracts set forth on Schedule 3.11(a) which will be provided by the Management Owners to
the Purchaser within five (5) Business Days following the Closing, the Company has delivered to the
Purchaser true and complete copies, of: (i) each Contract that involves performance of services or
delivery of goods or materials by the Company of an amount or value in excess of Ten Thousand
Dollars ($10,000.00) or having a noncancellable term of more than 60 days; (ii) each Contract that
involves performance of services or delivery of goods or materials to the Company of an amount or
value in excess of Ten Thousand Dollars ($10,000.00) or having a noncancellable term of more than
60 days; (iii) each Contract between the Company and Springhouse; (iv) each Contract between the
Company and any cooperative (including, without limitation, the Cooperative); (v) each Contract
between the Company and any vendor of any cooperative (including, without limitation, the
Cooperative); (vi) each Contract to which the Company is a party which is a preferred investor
agreement; (vii) each Contract pursuant to which the Company licenses other persons to use any of
the assets of the Company or has agreed to support, maintain, upgrade, enhance, modify, or consult
with respect to any such assets; (viii) each Contract pursuant to which other persons license the
Company to use the Licensed Software; (ix) each Contract that was not entered into in the Ordinary
Course; (x) each license, lease, installment and conditional sale agreement, and other Contract
affecting the ownership of, leasing of, title to, use of, or any leasehold or other interest in,
any of the assets of the Company; (xi) each joint venture, partnership, and other Contract (however
named) involving a sharing of profits, losses, costs, or liabilities by the Company with any other
Person; (xii) each Contract containing covenants that in any way purport to materially restrict the
business activity of the Company, or limit the freedom of the Company to engage in any line of
business or to compete with any Person; (xiii) each power of attorney of the Company that is
currently effective and outstanding; (xiv) each Contract of the Company for capital expenditures;
(xv) each material written warranty, guaranty, and or other similar undertaking with respect to the
Company, its assets, or the Business; and (xvi) each Contract of the Company containing exclusivity
(or similar) provisions.

          (b) Except as set forth in Schedule 3.11(b): (i) the Company has complied with all
material terms and requirements of its Contracts; (ii) no event has occurred or circumstance exists
that (with or without notice or lapse of time) may contravene, conflict with, or result in a
violation or breach of, or give the Company or other Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or to cancel,

15

 

terminate, or modify, the Contracts of the Company; (iii) the Company has not given to or
received from any other Person any notice or other communication (whether oral or written)
regarding any actual, alleged, possible, or potential material violation or breach of, or default
under, the Contracts of the Company; (iv) each Contract of the Company is legal, valid, binding,
enforceable, and in full force and effect; (v) the Company has not, and to the Knowledge of the
Management Owners, no party to any Contract of the Company has, repudiated any material provision
thereof; and (vi) to the Knowledge of the Management Owners, there are no material disputes, oral
agreements, or forbearance programs in effect as to any Contract of the Company.

          (c) To the Knowledge of the Management Owners, except as set forth in Schedule
3.11(c), there are no material renegotiations of, attempts to renegotiate, or outstanding
rights to renegotiate any material amounts paid or payable to the Company under the Contracts of
the Company, with any Person and to the Knowledge of the Management Owners, no such Person has made
written demand for such renegotiation.

          (d) Schedule 3.11(d) clarifies certain pricing terms of that certain Management Agreement
dated December 21, 2000, as amended, between the Company and the Cooperative.

     3.12. Insurance.

          The Company has delivered to the Purchaser a complete summary of all policies of insurance to
which the Company currently is a party or under which the Company is currently covered.
Schedule 3.12 lists all insurance policies to which the Company is currently a party or
under which the Company is currently covered. Neither the Company nor the Sellers have received
(x) any refusal of coverage notice or any notice that a defense will be afforded with reservation
of rights, or (y) any notice of cancellation or any other notification that any insurance policy is
no longer in full force or effect or will not be renewed or that the issuer of any policy is not
willing or able to perform its obligations thereunder.

     3.13. Facilities.

          (a) The Company does not own any real property.

          (b) Schedule 3.13(b) describes the Facilities leased by the Company from third
parties. The Company does not lease any real property except the Facilities set forth on
Schedule 3.13(b). To the Knowledge of the Management Owners, no notice has been provided
to the Company that the current uses of the Facilities fail to comply with applicable Legal
Requirements in any material respect. To the Knowledge of the Management Owners, with respect to
the Facilities: (i) each Facility has received all approvals of Governmental Bodies (including
licenses and permits) required in connection with the operation thereof and has been operated and
maintained in all material respects in accordance with applicable Legal Requirements; (ii) there
are no material management, maintenance, service, and operating contracts or agreements affecting
any Facility or any portion hereof which shall survive Closing for which the Company shall have any
material obligation; (iii) there are no use and occupancy restrictions, rights of way, exceptions,
reservations, or limitations affecting any Facility other than those imposed by any local zoning
ordinances and building codes; and (iv) there are no assessments made against any portion of the
real property in respect to the Facilities by any

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Governmental Body which are unpaid (except ad valorem Taxes for the current year and current
utility charges), whether or not they have become Security Interests, and whether or not they are
due in installments.

     3.14. Employees.

          (a) Schedule 3.14(a) contains a list of the following information for each full-time,
part-time or temporary employee or manager of the Company, including each employee on leave of
absence or layoff status: name; job title; current employment status and current compensation.
Schedule 3.14(a) also contains a list of all Contracts of employment to which the Company
is a party, except for Contracts which can be terminated without liability upon not more than
thirty (30) days notice.

          (b) To the Knowledge of the Management Owners, no employee of the Company is a party to, or is
otherwise bound by, any agreement or arrangement, including any confidentiality, noncompetition, or
proprietary rights agreement, between such employee and any other Person that in any way adversely
affects or will affect (i) the performance of such employee’s duties as an employee, or (ii) the
ability to conduct the Business. To the Knowledge of the Management Owners, except as set forth on
Schedule 3.14(b), no key employee of the Company intends to terminate such employee’s
employment.

     3.15. Labor Relations; Compliance.

          (a) The Company is not a party to any collective bargaining or other labor contract, including
any obligation under any agreement regarding rates of pay or working conditions of any employees of
the Company. There has not been, there is not presently pending or existing, and to the Knowledge
of the Management Owners, there is not threatened with respect to the Company or the Business, (i)
any strike, slowdown, picketing, work stoppage, or employee grievance process, (ii) any pending
proceeding against or affecting the Company relating to the alleged violation of any Legal
Requirement pertaining to labor relations or employment matters, including any charge or complaint
filed by an employee or union with the National Labor Relations Board, the Equal Employment
Opportunity Commission, or any comparable Governmental Body, organizational activity, or other
labor or employment dispute against or affecting the Company, or (iii) any application for
certification of a collective bargaining agent. To the Knowledge of the Management Owners, no
event has occurred or circumstance exists that could provide the basis for any work stoppage or
other labor dispute. There is no lockout of any employees by the Company, and no such action is
contemplated. The Company has complied with all material Legal Requirements relating to
employment, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits,
collective bargaining, the payment of social security and similar Taxes, occupational safety and
health, and plant closing.

          (b) Schedule 3.15 contains a complete list of existing or threatened
employment-related lawsuits and/or governmental administrative proceedings to which the Company is
currently a party.

     3.16. Intellectual Property.

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          (a) Schedule 3.16(a)(i) sets forth a list of all Contracts relating to the
Intellectual Property Assets. There are no outstanding and, to the Knowledge of the Management
Owners, no threatened, disputes or disagreements with respect to any such Contract relating to the
Intellectual Property Assets. The Intellectual Property Assets owned or licensed by the Company
are all those necessary for the operation of the Business as currently conducted. Except as set
forth on Schedule 3.16(a)(ii), the Company does not have or use any Patents, Marks,
Copyrights, or Domain Names. Except for the Licensed Software or as set forth on Schedule
3.16(a)(iii), the Company does not use any patents, trademarks, service marks, trade secrets or
copyrights of any Person (other than the Company) with respect to the Business.

          (b) The Company has used reasonable commercial efforts to protect the secrecy,
confidentiality, and value of its Trade Secrets. To the Knowledge of the Management Owners, the
Company has good title and an absolute right to use the Trade Secrets. To the Knowledge of the
Management Owners, the Trade Secrets are not part of the public knowledge or literature (unless
disclosed in a patent), and have not been used, divulged, or appropriated either for the benefit of
any Person (other than the Company) or to the detriment of the Company. To the Knowledge of the
Management Owners, no Trade Secret is subject to any adverse claim or has been challenged or
threatened in any material way. To the Knowledge of the Management Owners, the Company has not
given any Person the right to use or disclose any Trade Secret at any time in the future.

          (c) The Company has all of the right, title, and interest in and to the source code and the
object code in respect to the Owned Software. The Licensed Software and the Owned Software
constitute all of the computer programs necessary to conduct the Business as currently conducted.
Except as specified in Schedule 3.16(c): (A) no agreement, license or other arrangement
pertaining to any of the Licensed Software to which the Company is a party will terminate or become
terminable by any party thereto as a result of the execution, delivery or performance of this
Agreement or the consummation of the Contemplated Transactions; and (B) all licenses covering
Licensed Software are of perpetual duration (subject to provisions allowing the Company to
terminate and provisions allowing the respective licensors to terminate in the event of a breach by
the Company).

          (d) The current use by the Company of any Intellectual Property Assets in the Business does
not (i) infringe on any patent, trademark, service mark, copyright or other right of any other
Person, (ii) constitute a misuse or misappropriation of any trade secret, know-how, process,
proprietary information or other right of any other Person or a violation of any relevant agreement
governing the license of the Licensed Software to the Company, or (iii) except in the case of fees
and royalties paid to the licensors of Licensed Software set forth on Schedule 3.16(c),
entitle any other Person to any interest therein, or right to compensation from the Company or any
of their successors or assigns, by reason thereof. The Company has not received any complaint,
assertion, threat or allegation or otherwise have notice of any lawsuit, claim, demand, proceeding
or investigation involving matters of the type contemplated by the immediately preceding sentence.

     3.17. Relationships with Related Persons.

          Except as set forth on Schedule 3.17, no Related Person of any Seller or any

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Management Owner has or has had, any interest in any property (whether real, personal, or
mixed and whether tangible or intangible) used in or pertaining to the Company or the Business.
Except as set forth on Schedule 3.17, no Related Person of any Seller or any Management
Owner owns or has owned (of record or as a beneficial owner) an equity interest or any other
financial or profit interest in, a Person that has had business dealings or a material financial
interest in any transaction with the Company or the Business.

     3.18. Brokers or Finders.

          Except for the fees and expenses payable to Milestone Advisors, LLC, which shall be paid by
the Sellers, neither the Company nor the Sellers have incurred any obligation or Liability,
contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar
payment in connection with this Agreement or the Contemplated Transactions.

     3.19. Sophistication of Investors; Access to Information.

          (a) Each Seller receiving the Stock Payment has had an opportunity to review all documents and
information provided by the Purchaser that such Seller has requested and considers material to his
or its decision to enter into this Agreement and to ask questions of the Purchaser or persons
acting on the Purchaser’s behalf, concerning the Purchaser, and all such questions, if any, have
been answered to the full satisfaction of such Seller. Each Seller receiving the Stock Payment has
made his or its own independent examination, investigation, analysis and evaluation of common stock
of the Purchaser included in the Stock Payment, including his or its own estimate of the value of
such common stock and has undertaken such due diligence as it deems adequate, including that
described above.

          (b) Each Seller receiving the Stock Payment is an “accredited investor”, as defined by
Regulation D promulgated under the Securities Act of 1933, as amended, and is a sophisticated
investor with such knowledge and experience in financial and business matters and investments in
restricted securities that such Seller is capable of evaluating the merits and risks of acquiring
the shares of common stock of the Purchaser to be issued to such Sellers in payment for the Shares.

          (c) Each Seller receiving the Stock Payment understands that the shares of common stock of the
Purchaser included in the Stock Payment (i) have not been registered under the Securities Act of
1933, as amended, or any state securities laws, and are being offered and sold in reliance upon
United States federal and state exemptions for transactions not involving any public offering, and
(ii) will bear appropriate legends with respect to transferability and registration requirements.

          (d) Each Seller receiving the Stock Payment (i) is aware that acquiring shares of common stock
of the Purchaser included in the Stock Payment is a speculative investment and that there is no
guarantee that such Seller will realize any gain from his or its investment, (ii) is, subject to
the fact that certain of the Shares are subject to a right to put shares to the Purchaser under the
Put Option Agreement, able to bear the economic risk of this investment, (iii) is able to hold the
shares of common stock of the Purchaser included in the Stock Payment indefinitely, (iv) has
consulted with his or its own attorney, accountant or investment adviser with respect to

19

 

the suitability of such investment, and (v) acknowledges that he or it is acquiring the shares
of common stock of the Purchaser included in the Stock Payment for investment purposes and not with
a view to, or intention to effect, the distribution thereof in violation of the Securities Act of
1933, as amended, or any state securities laws.

4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

     The Purchaser represents and warrants to the Sellers and the Management Owners that the
statements contained in this Section 4 are true, correct and complete as of the Closing Date, as
follows:

     4.1. Organization and Good Standing.

          The Purchaser is an entity duly organized, validly existing, and in good standing under the
laws of its jurisdiction of organization. The Purchaser has the authority to own all of its
properties and assets and to conduct its business.

     4.2. Authority; No Conflict.

          (a) This Agreement and the other Transaction Documents to which the Purchaser is a party
constitute the legal, valid, and binding obligation of the Purchaser, enforceable against the
Purchaser in accordance with its terms. The Purchaser has the right, power, and authority to
execute and deliver this Agreement and the other Transaction Documents to which it is a party, and
to perform its obligations under such Transaction Documents including, but not limited to, the
issuance of the Stock Payment and respective rights in favor of certain Sellers pursuant to the
Rights Agreement and the Put Option Agreement.

          (b) Neither the execution and delivery of the Transaction Documents by the Purchaser, nor the
consummation or performance of any of the Contemplated Transactions by the Purchaser, will give any
Person the right to prevent, delay, or otherwise interfere with any of the Contemplated
Transactions pursuant to: (i) any provision of the Organizational Documents of the Purchaser; (ii)
any resolution adopted by the board of directors or the shareholders of the Purchaser; or (iii) any
Legal Requirement or Order to which the Purchaser may be subject. Neither the execution and
delivery of the Transaction Documents by the Purchaser, nor the consummation or performance of any
of the Contemplated Transactions by the Purchaser, will result in the imposition or creation of any
Security Interest upon or with respect to any Purchaser shares included in the Stock Payment or any
other portion of the Purchase Price other than as specifically contemplated by this Agreement. The
approval of its board of directors has been obtained by the Purchaser and no further Consent is
required to be obtained by the Purchaser from any Person in connection with the execution and
delivery of this Agreement or the consummation or performance of any of the Contemplated
Transactions.

     4.3. Certain Proceedings.

          There is no pending Proceeding that has been commenced against the Purchaser that challenges,
or may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any
of the Contemplated Transactions. To the Knowledge of the Purchaser, no such Proceeding has been
threatened.

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     4.4. Brokers or Finders.

          Neither the Purchaser, nor its directors, officers and agents, have incurred any obligation or
liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other
similar payment in connection with this Agreement.

     4.5. SEC Reports.

          The Purchaser has filed with the SEC all forms, reports, schedules, definitive proxy
statements and other documents (collectively, the “Purchaser SEC Reports”) required to be
filed by the Purchaser with the SEC. The Purchaser SEC Reports have been compiled in all material
respects in accordance with the requirements of the SEC.

     4.6. Governmental Consents.

          The Purchaser is not required to submit any notice, report or other filing with any
Governmental Body in connection with the execution, delivery or performance by it of this Agreement
or the consummation of the transactions contemplated hereby. No consent, approval or authorization
of any Governmental Body or any other Person is required to be obtained by the Purchaser in
connection with its execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated hereby.

     4.7. Litigation.

          There are no actions, suits or proceedings pending or, to the Knowledge of the Purchaser,
overtly threatened against or affecting the Purchaser at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which would adversely affect the Purchaser’s performance
under this Agreement or the consummation of the transactions contemplated hereby.

5. POST-CLOSING COVENANTS

     5.1. Litigation Support.

          Following the Closing, in the event and for so long as any Party actively is contesting or
defending against any action, suit, proceeding, hearing, investigation, charge, complaint, claim or
demand in connection with: (i) any transaction contemplated under this Agreement; or (ii) as it
relates to the Company, any fact, situation, circumstance, status, condition, activity, practice,
plan, occurrence, event, incident, action, failure to act, or transaction on or prior to the
Closing Date involving any Party, each of the other Parties will reasonably cooperate with the
contesting or defending Party and his or its counsel in the contest or defense, make available at
reasonable times its personnel, and provide such testimony and access to its books and records at
reasonable times as shall be necessary in connection with the contest or defense, all at the sole
cost and expense of the contesting or defending Party (unless the contesting or defending Party is
entitled to indemnification therefor under Section 8 below).

     5.2. Tax Matters.

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          (a) General. For the sole purpose of appropriately apportioning any Taxes relating to
a Tax year or Tax period that begins before and ends after the Effective Time (a “Straddle
Period”), such apportionment shall be made assuming the Company had a taxable year that ended
immediately prior to the Effective Time. For federal and applicable state income tax purposes, the
Company shall treat the sale of the Company Interests as a termination of the partnership and file
a final U.S. Return of Partnership Income (as well as any applicable state income tax returns) for
the taxable period ending on the Closing Date, which return shall include the IRS Form 8038, Return
of a Sale or Exchange of Certain Partnership Interests, and such other forms or information as may
be required by the provisions of Section 751 and 6050K of the IRC and the Treasury Regulations
thereunder. In the case of property Taxes and other Taxes that apply ratably to a taxable period,
the amount of Taxes allocable to the portion of the Straddle Period ending at the Effective Time
shall equal the Tax for the period multiplied by a fraction, the numerator of which shall be the
number of days in the period up to and including the Effective Time, and the denominator of which
shall be the total number of days in the period. All other Taxes for any Tax Return that involves
a Straddle Period shall be based upon the actual events and transactions that occur within such
Straddle Period.

          (b) Tax Indemnification.

     (i) The Sellers shall be responsible for and pay and shall indemnify and hold
harmless the Purchaser from and against all Taxes of the Company for any Tax year or
Tax period ending immediately prior to or before the Effective Time, and, in the
case of a Straddle Period, to the extent apportioned to the period that ends
immediately prior to the Effective Time in accordance with paragraph (a) of this
section, except to the extent that Taxes have been accrued as a liability that has
been included in the computation of Net Working Capital of the Company as of the
Effective Time.

     (ii) The Purchaser shall be responsible for and shall indemnify and hold
harmless the Sellers against all Taxes of the Company for all Tax years or Tax
periods beginning and ending after the Effective Time or, with respect to a Straddle
Period, to the extent apportioned to the period beginning at and ending after the
Effective Time in accordance with paragraph (a) of this section.

          (c) Tax Contests.

     (i) For periods following the Effective Time, the Purchaser on the one hand,
and the Sellers on the other hand (as the case may be) who receives notice of a Tax
proceeding shall promptly notify the other Party in writing of any proposed
assessment or the commencement of any tax contest or any demand or claim on the
Purchaser, its Affiliates, or the Company that, if determined adversely to the
taxpayer or after the lapse of time, could be grounds for an indemnification claim
by a Party against another Party under paragraph (b) of this section (a “Tax
Contest”). Such notice shall contain factual information (to the extent known
to the Purchaser and the Sellers, its Affiliates or the Company) describing the
asserted Tax liability in reasonable detail and shall include copies of any notice
or other document received from any taxing authority in respect of

22

 

any such asserted Tax liability.

     (ii) In the case of a Tax Contest that relates to taxable periods ending before
or immediately prior to the Effective Time, the Sellers shall have the sole right,
at their expense, to control the conduct of such Tax Contest; provided,
however, that the Seller Representative shall seek Purchaser’s prior written
consent of any settlement or compromise of such Tax Contest (which consent shall not
be unreasonably withheld or delayed) of any resolution of the Tax Contest if such
resolution materially adversely affects the computation of any item of income,
expense, deduction, taxable income, credit or Tax liability for any period ending
after the Effective Time.

     (iii) With respect to Straddle Periods, the Sellers may elect to direct and
control any Tax Contest to the extent it involves any asserted Tax liability with
respect to which indemnity may be sought from the Sellers pursuant to paragraph (b)
of this section. The Purchaser shall direct and control any other such Tax Contest
or portion thereof. If the Sellers elect to direct a Tax Contest, the Sellers shall
within ten (10) calendar days of receipt of the notice of asserted Tax liability
notify the Purchaser of their intent to do so, and the Purchaser shall cooperate and
shall cause the Company to fully cooperate, at the Sellers’ expense, in each phase
of such Tax Contest. If the Seller Representative elects to direct and control a
Tax Contest with respect to a Straddle Period, the Sellers may not settle or
compromise any asserted Tax liability that adversely affects the computation of any
material item of income, expense, deduction, taxable income, credit, or Tax
liability for any taxable period after the Closing Date without the prior written
consent of the Purchaser, which consent shall not be unreasonably withheld or
delayed. If the Sellers elect not to direct the Tax Contest, the Purchaser or the
Company may assume control of such Tax Contest (at the Purchaser’s own expense).
However, in such case, neither the Purchaser nor the Company may settle or
compromise any asserted Tax liability for which indemnification is to be sought
under this paragraph (c) of this section or which would give rise to any other claim
of indemnification without prior written consent of the Seller Representative;
provided, however, that consent to settlement or compromise shall not be
unreasonably withheld or delayed.

     (iv) The Purchaser and the Sellers agree to cooperate, and the Purchaser agrees
to cause the Company to cooperate, in the defense against or compromise of any claim
in any Tax Contest.

          (d) Tax Returns.

     (i) Purchaser, at its sole cost and expense, shall prepare, or cause to be
prepared, on a basis consistent with past tax accounting practices all Tax Returns
of the Company for all Tax periods ending on or prior to the Effective Time, and
shall provide, or cause to be provided, to the Seller Representative a substantially
final draft of each such Tax Return at least thirty (30) calendar days prior to the
due date, giving effect to extensions thereto, for filing such Tax Return, for

23

 

review and filing by the Purchaser. The Seller Representative shall notify
Purchaser within ten (10) calendar days of the receipt of such draft Tax Return of
any reasonable objections the Seller Representative may have to any items set forth
in such draft Tax Return, and the Seller Representative and the Purchaser agree to
consult and resolve in good faith any such objection and to mutually consent to the
filing of such Tax Return. The Purchaser shall timely file, or cause to be timely
filed, all such Tax Returns, and timely pay, or cause to be paid, when due, all
Taxes shown due on such returns. One Business Day prior to the date on which such
Tax Returns are filed, the Sellers shall pay the amount of Taxes shown due on such
returns, but reduced by any Taxes that have been accrued as a liability that has
been included in the computation of Net Working Capital of the Company as of the
Effective Time, to the Purchaser or a Person designated by the Purchaser.

     (ii) The Purchaser shall timely prepare and file, or cause to be timely
prepared on a basis consistent with past tax accounting practices (as it pertains to
Straddle Periods) and filed, all Tax Returns of the Company for all Tax periods
ending after the Effective Time (including Straddle Periods), and timely pay, or
cause to be paid, when due, all Taxes shown due on such returns. The Purchaser
shall provide, or cause to be provided, to the Seller Representative a substantially
final draft of each such Tax Return, but only such Tax Returns that include a
Straddle Period, with respect to which the Sellers may be responsible for the
payment of any Tax at least 30 calendar days prior to the due date, giving effect to
extensions thereto, for filing such Tax Return, for review by the Seller
Representative. The Seller Representative shall notify the Purchaser within ten
(10) calendar days of receipt of such Tax Return of any reasonable objections the
Seller Representative may have to any items set forth in such draft Tax Return, and
the Purchaser and the Seller Representative agree to consult and resolve in good
faith any such objection and to mutually consent to the filing of such Tax Return.
One Business Day prior to the date on which such Tax Returns are filed, the Sellers
shall pay to the Purchaser the amount of Taxes for which the Sellers are responsible
under paragraph (b) of this section, but reduced by any Taxes that have been accrued
as a liability that has been included in the computation of Net Working Capital of
the Company as of the Effective Time.

     (iii) Neither the Purchaser nor the Company nor any of the subsidiaries of the
Company shall file any amended Tax Return for any period that ends on or before the
Closing Date without the prior written consent of the Sellers (not to be
unreasonably withheld or delayed), except as required under applicable Legal
Requirements and after the receipt by Sellers Representative of a copy of such Tax
Return at least 30 days in advance of such filing.

          (e) Refunds. Any refunds, rebates, credits or overpayments of Taxes of the Company or
any of the subsidiaries of the Company for any taxable period ending on or before the Effective
Time shall be for the account of the Sellers. Any refunds, rebates, credits or overpayments of the
Company or any subsidiaries of the Company for any taxable period beginning after the Effective
Time shall be for the account of the Purchaser. Any refunds,

24

 

rebates, credits or overpayments of Taxes of the Company or any of their subsidiaries for a
Straddle Period shall be equitably apportioned between the Sellers and the Purchaser applying the
rules and regulations of the Governmental Body applicable to such Tax Return.

          (f) Cooperation. After the Closing, the Purchaser and the Sellers shall promptly make
available or cause to be made available to the other, as reasonably requested, and to any taxing
authority, all information, records or documents relating to Tax liabilities and potential Tax
liabilities relating to the Company for all periods prior to or including the Closing Date and
shall not destroy any such information, records and documents without the permission of the
Purchaser. Sellers shall prepare and provide to the Purchaser any Tax information packages
reasonably requested by Purchaser for the Purchaser’s use in preparing the Company’s Tax Returns,
or alternatively, will provide reasonable access to the books and records containing such
information. Such Tax information packages shall be completed by the Sellers and provided to
Purchaser, or such reasonable access shall be provided, within sixty (60) calendar days after the
request therefor. Each Party shall bear its own expenses in complying with the foregoing
provisions.

     5.3. Restrictive Covenants.

          In consideration for the Noncompete Payment paid by the Purchaser to each of the Sellers and
the Management Owners at Closing, the Sellers and the Management Owners agree as follows:

          (a) Commencing on the date of this Agreement, and ending on the fourth (4th)
anniversary of the Closing, the Sellers and the Management Owners will treat and hold as
confidential all of the Confidential Information of the Business, the Company, and the terms and
conditions contained in this Agreement and in respect to the Contemplated Transactions, refrain
from using any of the Confidential Information of the Business and of the Company, and deliver
promptly to the Purchaser or destroy, at the request and option of the Purchaser, all tangible
embodiments (and all copies) of the Confidential Information of the Business and of the Company
which are in his or its possession. In the event that any Seller or Management Owner is requested
or required (by oral question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information of the Business or of the Company, or the terms and conditions contained
in this Agreement and in respect to the Contemplated Transactions, such Seller or Management Owner
will notify the Purchaser promptly of the request or requirement so that the Purchaser may seek an
appropriate protective order or waive compliance with the provisions of this Section 5.3. If, in
the absence of a protective order or the receipt of a waiver hereunder, such Seller or Management
Owner is, on the advice of counsel, compelled to disclose any Confidential Information of the
Business or of the Company, or the terms and conditions contained in this Agreement and in respect
to the Contemplated Transactions, to any tribunal or else stand liable for contempt, such Seller or
Management Owner may disclose the Confidential Information of the Business or of the Company, or
the terms and conditions contained in this Agreement and in respect to the Contemplated
Transactions, as the case may be, to the tribunal; provided, however, that such Seller or
Management Owner shall use its or his reasonable efforts to obtain, at the reasonable request of
the Purchaser and at the sole expense of the Purchaser, an order or other assurance that
confidential treatment will be accorded to such portion of the

25

 

Confidential Information of the Business or of the Company, or the terms and conditions
contained in this Agreement and in respect to the Contemplated Transactions, as the case may be,
required to be disclosed as the Purchaser shall designate.

          (b) As a condition of the Purchaser entering into this Agreement, each of the Sellers and the
Management Owners expressly covenants and agrees that for a period of four (4) years from and after
the Closing Date within the Territory, each Seller and Management Owner will not, either directly
or indirectly, on its or his own behalf, or in the service or on behalf of others, engage in or
provide managerial, supervisory, sales, marketing, or consulting services or own (other than
ownership of less than one percent of the outstanding voting securities of an entity whose voting
securities are traded on a national securities exchange or quoted on the National Association of
Securities Dealers, Inc. Automated Quotation System, and other than ownership of any voting
securities of the Purchaser) a beneficial interest in, any Person which is engaged in, or is
competitive with, the Business; provided, however, that the foregoing (i) shall not prevent Evan
Hackel from providing services to any mortgage banking cooperative or serving on the board of
directors of a mortgage banking cooperative (provided such services do not entail creating,
forming, or managing any mortgage banking cooperative), or (ii) shall not prevent any Financial
Investor from providing purchasing support services, real estate mortgage origination services, and
other ancillary services, to the members of a mortgage banking cooperative, but only if such
Financial Investor was providing such services prior to the Effective Time.

          (c) For a period of four (4) years from and after the Closing Date, each of the Sellers and
the Management Owners will not, directly or indirectly, for itself, himself or for any other
Person, solicit any of the customers, vendors, or preferred investors of the Company, who were
customers, vendors, or preferred investors of the Company as of the Closing Date, for the purpose
of competing with the Purchaser or the Company in the Business in the Territory; provided, however,
that the foregoing (i) shall not prevent Evan Hackel from providing services to any mortgage
banking cooperative or serving on the board of directors of a mortgage banking cooperative
(provided such services do not entail creating, forming, or managing any mortgage banking
cooperative), or (ii) shall not prevent any Financial Investor from providing purchasing support
services, real estate mortgage origination services, and other ancillary services, to the members
of a mortgage banking cooperative, but only if such Financial Investor was providing such services
prior to the Effective Time.

          (d) For a period of four (4) years from and after the Closing Date, each of the Sellers and
the Management Owners will not, directly or indirectly, for itself, himself or for any other
Person, solicit any of the Cooperative Members, or any customers, vendors or preferred investors of
the Cooperative, who were Cooperative Members, or customers, vendors or preferred investors of the
Cooperative as of the Closing Date, for the purpose of competing with the Purchaser or the Company
in the Business in the Territory; provided, however, that the foregoing (i) shall not prevent Evan
Hackel from providing services to any mortgage banking cooperative or serving on the board of
directors of a mortgage banking cooperative (provided such services do not entail creating,
forming, or managing any mortgage banking cooperative), or (ii) shall not prevent any Financial
Investor from providing purchasing support services, real estate mortgage origination services, and
other ancillary services, to the members of a mortgage banking cooperative, but only if such
Financial Investor was providing such services prior to the

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Effective Time.

          (e) For a period of four (4) years from and after the Closing Date, each of the Sellers and
the Management Owners will not, directly or indirectly, for itself, himself, or for any other
Person, solicit, attempt to employ or enter into any contractual employment arrangement with any
employee or independent contractor of the Company, who is an employee or independent contractor of
the Company as of the Closing Date (other than employees terminated by the Company), for the
purpose of competing with the Purchaser or the Company in the Business in the Territory; provided,
however, that the foregoing (i) shall not prevent Evan Hackel from providing services to any
mortgage banking cooperative or serving on the board of directors of a mortgage banking cooperative
(provided such services do not entail creating, forming, or managing any mortgage banking
cooperative), or (ii) shall not prevent any Financial Investor from providing purchasing support
services, real estate mortgage origination services, and other ancillary services, to the members
of a mortgage banking cooperative, but only if such Financial Investor was providing such services
prior to the Effective Time.

          (f) Each Seller and Management Owner acknowledges that each Seller’s and Management Owner’s
agreement to the restrictive covenants contained in this Section 5.3 was a condition of the
Purchaser entering into this Agreement. Each Seller and Management Owner also acknowledges that
the covenants contained in this Section 5.3 are reasonable in scope and duration. If any covenant
in this Section 5.3 is held to be unreasonable, arbitrary, or against public policy, such covenant
will be considered to be divisible with respect to scope, time, and geographic area, and such
lesser scope, time or geographic area, or all of them, as a court of competent jurisdiction may
determine to be reasonable, not arbitrary, and not against public policy, will be effective,
binding, and enforceable against the Parties. Each Seller and Management Owner agrees and
acknowledges that money damages may not be an adequate remedy for any breach of the provisions of
this Section 5.3 and that the Purchaser may in its sole discretion apply to any court of law or
equity of competent jurisdiction for specific performance and/or injunctive relief in order to
enforce or prevent any violations of the provisions of this Section 5.3. Each Seller and
Management Owner hereby waives any requirement that the Purchaser post a bond or other security as
a condition to receiving injunctive relief hereunder.

          (g) Notwithstanding anything contained herein to the contrary, for purposes of this Section
5.3, nothing shall prohibit: (i) Paramount Bond & Mortgage Co., Inc. from providing retail mortgage
origination services; and (ii) Thomas Stern providing commercial real estate services; and (iii)
the Management Owners from becoming employees of any of the Gershman family companies as long as
there is no violation of the restrictive covenants set forth in Section 5.3.

     5.4. Audited Financial Statements.

          From and after the Closing, the Sellers shall, at the sole expense of the Purchaser, provide
any reasonable assistance requested by the Purchaser to enable to the Purchaser to prepare, and
file with the SEC no later than the seventy-fifth (75th) day following the Closing,
audited financial statements of the Company for the periods ending December 31, 2009, and December
31, 2008 (the “Audited Financial Statements”). The cost of obtaining the Audited Financial
Statements shall be at the sole cost and expense of the Purchaser and shall not be

27

 

charged to Sellers or the Company.

     5.5. Access to Books and Records.

          (a) From and after the Closing, Purchaser shall, and shall cause the Company to provide Seller
Representative, Sellers and their authorized representatives with reasonable access (for the
purpose of examining and copying), during normal business hours, the books and records of the
Company to the extent relating to periods prior to the Effective Time, in connection with any
Seller Tax filings, or for the purposes of defending any claim brought by any Person involving the
Sellers or pursuant to this Agreement or for any other reasonable purpose. Unless otherwise
consented to in writing by Seller Representative, Purchaser shall not permit the Company for a
period of seven (7) years following the Closing Date, to destroy, alter or otherwise dispose of any
books and records of the Company, relating to periods prior to the Effective Time without first
giving reasonable prior written notice to Seller Representative and offering to surrender to Seller
Representative such books and records or such portions thereof.

          (b) Within five (5) Business Days following the Closing Date, the Management Owners shall
provide to the Purchaser copies of (i) all declarations sheets with respect to the policies of
insurance to which the Company has been a party or under which the Company has been covered since
January 1, 2006, and (ii) those Contracts set forth on Schedule 3.11(a) which are
designated to be delivered to the Purchaser following the Closing.

     5.6. PIA Payments.

          (a) In the event that the Company shall enter into a PIA on or before the six (6) month
anniversary of the Closing Date, each of the Management Owners, collectively, may be entitled to
receive additional contingent payments (collectively, the “PIA Payments”) in the manner
described in this Section 5.6. It is acknowledged and agreed that for any period commencing after
the Measurement Period ending on the third (3rd) anniversary of the date of the PIA, no
new PIA Payments shall commence accruing or be payable.

          (b) The PIA Payments shall be calculated as follows:

     (i) As further described in this Section 5.6, following the end of each
Measurement Period, the Purchaser shall calculate (x) the EBITDA of the Company
during such Measurement Period, and (y) the Net Revenues during such Measurement
Period.

     (ii) Subject to the limitations contained in Section 5.6(b)(iii) below, with
respect to each respective Measurement Period, in the event that the EBITDA of the
Company equals an amount set forth in the left-hand column of the chart attached
hereto as Exhibit A, then each of the Management Owners, collectively, shall
be entitled to a PIA Payment equal to the amount set forth in the corresponding row
in the right-hand column of the chart attached hereto as Exhibit A.

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     (iii) Notwithstanding the provisions of Section 5.6(b)(ii) above, in the event
that (x) any one of Scott M. Stern, Timothy C. Stern, or Barry O. Sandweiss is not a
full-time employee of the Purchaser, the Company, or any of their Affiliates or is
under notice of resignation, as of the last day of the applicable Measurement
Period, then the PIA Payment otherwise payable pursuant to Section 5.6(b)(ii) above
shall be multiplied by 0.67, (y) any two of Scott M. Stern, Timothy C. Stern, or
Barry O. Sandweiss is not a full-time employee of the Purchaser, the Company, or any
of their Affiliates or is under notice of resignation, as of the last day of the
applicable Measurement Period, then the PIA Payment otherwise payable pursuant to
Section 5.6(b)(ii) above shall be multiplied by 0.33, and (z) each of Scott M.
Stern, Timothy C. Stern, and Barry O. Sandweiss is not a full-time employee of the
Purchaser, the Company, or any of their Affiliates or is under notice of
resignation, as of the last day of the applicable Measurement Period, then no PIA
Payment shall be payable hereunder; provided, however, that the provisions of this
Section 5.6(b)(ii) shall not apply if the employment of any such Management Owner is
terminated without cause (as such term is defined in the applicable Employment
Agreement), Purchaser or such other employer is in material breach of such
respective Employment Agreement (as determined by a court of competent jurisdiction
evidenced by a final non-appealable judgment), or due to the death or disability (as
such term is defined in the applicable Employment Agreement) of such Management
Owner.

          (c) Any amount or calculation to be made in connection with the PIA Payments shall be
determined or made in accordance with GAAP. All accounting entries will be made regardless of
their amount and all detected errors and omissions will be corrected regardless of their
materiality.

          (d) Within thirty (30) days following the last day of the calendar month in which the end of
each applicable Measurement Period occurs, the Purchaser shall, at its expense, conduct a financial
review of the Company, and in connection with such review, shall prepare a statement of the EBITDA
of the Company during such Measurement Period, and the Net Revenues during such Measurement Period,
and if applicable, a statement calculating the PIA Payment payable with respect to such Measurement
Period (the “PIA Statement”). Promptly after completion of the review and the preparation
of the PIA Statement (but in no event later than thirty (30) days following the last day of the
calendar month in which the end of the applicable Measurement Period occurs), the Purchaser shall
deliver to the Seller Representative a copy of such PIA Statement, together with copies of such
computations and all reasonable supporting documentation. During the thirty (30) days immediately
following receipt of the PIA Statement by the Seller Representative, the Seller Representative and
its accountants shall be entitled to review the PIA Statement and any working papers, trial
balances and similar materials relating to the PIA Statement prepared by the Purchaser or its
accountants, and the Purchaser shall provide the Seller Representative and its accountants with
reasonable access, during the Purchaser’s normal business hours, to the Purchaser’s personnel,
properties, books and records for the sole purpose of verifying the PIA Statement.

          (e) The PIA Statement shall become final and binding upon the Parties on the first
(1st) day following written notice from the Seller Representative that the PIA Statement
is

29

 

agreed to, or in the absence of such notice, on the thirty-first (31st) day
following delivery of such PIA Statement, unless the Seller Representative gives written notice to
the Purchaser of its disagreement with the PIA Statement (a “Notice of Disagreement with PIA
Statement”) prior to such date. Any Notice of Disagreement with PIA Statement shall specify in
reasonable detail the nature of any disagreement so asserted.

          (f) If a timely Notice of Disagreement with PIA Statement is received by the Purchaser with
respect to the PIA Statement, then the PIA Statement shall become final and binding upon the
Parties on the earlier of (i) the date the Purchaser and the Seller Representative resolve in
writing all differences they have with respect to the matters specified in a Notice of Disagreement
with PIA Statement, or (ii) the date the matters in dispute are finally resolved in writing by the
Arbitrator in the manner described in Section 5.6(g) below.

          (g) During the thirty (30) days immediately following the delivery of any Notice of
Disagreement with PIA Statement, the Purchaser and the Seller Representative shall seek in good
faith to resolve in writing any differences which they may have with respect to the matters
specified in such Notice of Disagreement with PIA Statement. If such differences have not been
resolved by the end of such thirty (30)-day period, the Purchaser and the Seller Representative
shall submit to the Arbitrator for review and resolution any and all matters which remain in
dispute and which were included in any Notice of Disagreement with PIA Statement, and the
Arbitrator shall reach a final, binding resolution of all matters which remain in dispute within
sixty (60) days after such dispute is referred to the Arbitrator. The Sellers on the one hand, and
the Purchaser on the other hand, shall bear all costs and expenses incurred by him or it in
connection with such arbitration, except that the fees and expenses of the Arbitrator hereunder
shall be borne by the Sellers and the Purchaser in such proportion as the Arbitrator shall
determine based on the relative merit of the position of the Parties. This provision for
arbitration shall be specifically enforceable by the Parties and the decision of the Arbitrator in
accordance with the provisions hereof shall be final and binding with respect to the matters so
arbitrated and there shall be no right of appeal therefrom.

          (h) If a PIA Payment is payable with respect to the applicable Measurement Period, the
Purchaser shall pay such PIA Payment to the Management Owners, subject to adjustment in Section
5.6(b)(iii), pro-rata based on the percentages set forth on Schedule 5.6(h) hereto, on the
fifth (5th) Business Day following the Seller Representative’s agreement to, or final
resolution of, the PIA Statement.

     5.7. Titleserv Proceeding.

          (a) In the event the Company shall not enter into the Titleserv Settlement on or before the
sixtieth (60th) day following the Closing Date, then each of the Management Trusts and
the Management Owners, jointly and severally, shall (i) on the first (1st) Business Day
following the sixtieth (60th) day following the Closing Date, pay to the Purchaser Fifty
Thousand Dollars ($50,000.00), and (ii) on the fifteenth (15th) day of each calendar
month following the payment in clause (i) above, for a period of fourteen (14) consecutive months,
pay to the Purchaser Twelve Thousand Five Hundred Dollars ($12,500.00); it being acknowledged that
if payments are due pursuant to this Section 5.7, then the aggregate payments to the Purchaser by
the Management Trusts and the Management Owners shall equal Two Hundred Twenty Five

30

 

Thousand Dollars ($225,000.00).

          (b) In the event the Company shall enter into the Titleserv Settlement on or before the
sixtieth (60th) day following the Closing Date, but the aggregate payments contemplated
by the Titleserv Settlement shall be less than Two Hundred Twenty Five Thousand Dollars
($225,000.00), then each of the Management Trusts and the Management Owners, jointly and severally,
shall on the fifth (5th) Business Day following the date of the Titleserv Settlement,
pay the Purchaser the difference between (x) Two Hundred Twenty Five Thousand Dollars
($225,000.00), less (y) the aggregate payments contemplated by the Titleserv Settlement.

6. CONDITIONS PRECEDENT TO THE PURCHASER’S OBLIGATION TO CLOSE

     The Purchaser’s obligation to effect the Closing and to take the other actions required to be
taken by the Purchaser at the Closing is subject to the satisfaction, at or prior to the Closing,
of each of the following conditions (any of which may be waived by the Purchaser in writing, in
whole or in part):

     6.1. Accuracy of Representations; Performance of the Sellers and the Management
Owners.

          (a) The representations and warranties of the Sellers and the Management Owners in this
Agreement must have been accurate in all respects as of the date of this Agreement.

          (b) The covenants and obligations that the Sellers and the Management Owners are required to
perform or to comply with pursuant to this Agreement at or prior to the Closing must have been duly
performed and complied with in all material respects.

          (c) The Sellers and the Management Owners must have delivered each of the following additional
executed documents:

     (i) certificates, in form suitable for transfer, registered in the name of the
Sellers, evidencing the Shares, endorsed in blank, and with all necessary transfer
tax stamps attached thereto;

     (ii) such instruments and documents as may be reasonably requested by the
Purchaser in order to complete the transfer of the Shares, including, without
limitation, stock powers, powers of attorney, and assignment and assumption
agreements, each in form and substance satisfactory to the Purchaser (collectively,
the “Conveyancing Documents”);

     (iii) resignations of each of the managers and officers of the Company, in form
and substance satisfactory to the Purchaser;

     (iv) a certificate executed by each of the Sellers and the Management Owners
representing and warranting to the Purchaser that each of the representations and
warranties of the Sellers and the Management Owners in this Agreement was accurate
in all respects as of the date of this Agreement;

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     (v) with respect to each Seller who is not a natural person other than a trust,
a certificate of the Secretary of such Person as to the incumbency of its officers,
a copy of a certificate evidencing the incorporation and good standing of such
Person, and a copy of the resolutions adopted by the board of directors, board of
managers, trustees, and the equity interestholders, of such Person with respect to
the Contemplated Transactions, and with respect to each Seller who is a trust, a
certificate of the trustee of such trust as to the authority of such trustee to act
on behalf of such trust with respect to the Contemplated Transactions, and
containing a copy of the trust agreement evidencing the same;

     (vi) an affidavit of each Seller, as provided in Section 1445(b)(2) of the IRC,
stating under penalties of perjury that such Seller is not a foreign person within
the meaning of Section 1445(f)(3) of the IRC;

     (vii) the Indemnity Escrow Agreement, executed by each Seller and the Escrow
Agent;

     (viii) the Put Escrow Agreement, executed by each of the Management Trusts and
the Escrow Agent;

     (ix) the Rights Agreement, executed by each Seller receiving the Stock Payment
at Closing;

     (x) the Put Option Agreement, executed by each of the Management Trusts;

     (xi) the Put Security Agreement, executed by each of the Company and Scott M.
Stern, as collateral agent;

     (xii) the Put Pledge Agreement, executed by each of the Company and Scott M.
Stern, as collateral agent;

     (xiii) Employment Agreements, executed by each of Scott M. Stern, Timothy C.
Stern, and Barry O. Sandweiss, respectively;

     (xiv) a Release Agreement, executed by the Company, each Seller and each
Management Owner;

     (xv) the Collateral Agency Agreement, executed by each of the Management Trusts
and Scott M. Stern, as collateral agent; and

     (xvi) the Funds Flow and Settlement Statement, executed by the Sellers and the
Management Owners.

          (d) The Required Approvals shall have been obtained.

          (e) The Company and/or the Sellers shall have paid in full all outstanding Indebtedness of the
Company.

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          (f) The Sellers shall have delivered to the Purchaser evidence reasonably satisfactory to the
Purchaser of the termination of all Equity Rights and the release of all Liability with respect to
the Equity Rights.

          (g) The Sellers shall have delivered to the Purchaser evidence reasonably satisfactory to the
Purchaser of the termination all Company Qualified Plans effective prior to the Closing Date,
including the adoption of plan amendments and appropriate resolutions by the board of managers of
the Company.

          (h) The Sellers shall have delivered to the Purchaser evidence reasonably satisfactory to the
Purchaser that each of those certain preferred investor agreements between the Company on the one
hand, and those third parties set forth on Schedule 6.1(h) on the other hand, have been
renewed and have terms which extend at least twelve (12) months following the date of such renewal
in 2010.

     6.2. Release of Security Interests.

          Subject to certain permitted obligations set forth in this Agreement, the Sellers shall have
satisfied, and shall have caused the Company to satisfy, all obligations owed to its respective
creditors necessary to release all Security Interests on the assets of the Company and on the
Shares, and otherwise permit the Purchaser to obtain clear title to, the Shares and the assets of
the Company or, at the Purchaser’s option, shall have obtained payoff letters and releases from
such creditors, in form and substance satisfactory to the Purchaser, which contain payoff and
release information with respect to the satisfaction such obligations and the release of all such
Security Interests, and provided such payoff letters to the Purchaser.

     6.3. Additional Documents.

          Each of the following documents shall have been delivered to the Purchaser:

          (a) all transfer ledgers and minute books of the Company; and

          (b) such other documents as the Purchaser may reasonably request for the purpose of (i)
evidencing the accuracy of the representations and warranties of the Sellers and the Management
Owners, (ii) evidencing the performance by the Sellers and the Management Owners of, or the
compliance by the Sellers and the Management Owners with, any covenant or obligation required to be
performed or complied with by the Sellers and the Management Owners, (iii) evidencing the
satisfaction of any condition referred to in this Section 6, or (iv) otherwise facilitating the
consummation or performance of any of the Contemplated Transactions.

7. CONDITIONS PRECEDENT TO THE SELLERS’ AND THE MANAGEMENT OWNERS’ OBLIGATION TO CLOSE

     The Sellers’ and the Management Owners’ obligation to effect the Closing and to take the other
actions required to be taken by the Sellers and the Management Owners at the Closing is subject to
the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may
be waived by the Seller Representative in writing, in whole or in part):

33

 

     7.1. Accuracy of Representations; the Purchaser’s Performance.

          (a) The Purchaser’s representations and warranties in this Agreement must have been accurate
in all respects as of the date of this Agreement.

          (b) The covenants and obligations that the Purchaser is required to perform or to comply with
pursuant to this Agreement at or prior to the Closing must have been performed and complied with in
all material respects.

          (c) The Purchaser must have delivered each of the following additional executed documents:

     (i) the Indemnity Escrow Agreement, executed by the Purchaser;

     (ii) the Put Escrow Agreement, executed by the Purchaser;

     (iii) the Rights Agreement, executed by the Purchaser;

     (iv) the Put Option Agreement, executed by the Purchaser;

     (v) the Put Pledge Agreement, executed by the Purchaser;

     (vi) the Employment Agreements, executed by Altisource Solutions, Inc. and the
Purchaser;

     (vii) the Funds Flow and Settlement Statement, executed by the Purchaser;

     (viii) the Conveyancing Documents, executed by the Purchaser, to the extent a
party thereto;

     (ix) a certificate executed by the Purchaser representing and warranting to the
Sellers and the Management Owners that each of the Purchaser’s representations and
warranties in this Agreement was accurate in all respects as of the date of this
Agreement; and

     (x) a certificate of an officer of the Purchaser as to the incumbency of its
officers, a copy of a certificate evidencing the incorporation and good standing of
the Purchaser, and a copy of the resolutions adopted by the board of directors of
the Purchaser with respect to the transactions contemplated by this Agreement.

          (d) The Required Approvals shall have been obtained.

     7.2. Additional Documents.

          The Purchaser must have caused to be delivered to the Sellers and the Management Owners such
other documents as the Sellers and the Management Owners may reasonably request for the purpose of
(i) evidencing the accuracy of any representation or warranty of the Purchaser, (ii) evidencing the
performance by the Purchaser of, or the

34

 

compliance by the Purchaser with, any covenant or obligation required to be performed or
complied with by the Purchaser, (iii) evidencing the satisfaction of any condition referred to in
this Section 7, or (iv) otherwise facilitating the consummation of any of the Contemplated
Transactions.

8. INDEMNIFICATION; REMEDIES

     8.1. Survival.

          All representations, warranties, covenants, rights, and obligations in this Agreement, the
Disclosure Schedule, the certificates delivered pursuant to Section 6.1(c)(iv) and Section
7.1(c)(ix), and any other certificate or document delivered pursuant to this Agreement will survive
the Closing, subject to the limitations described in this Section 8. The right to indemnification,
payment of Damages or other remedy based on such representations, warranties, covenants, and
obligations will 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 obligation. The waiver of any
condition based on the accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to indemnification, payment
of Damages, or other remedy based on such representations, warranties, covenants, and obligations.

     8.2. Indemnification and Payment of Damages by the Sellers and the Management Owners.

          After the Closing, subject to the limitations set forth in this Section 8, each of the
Management Trusts and each of the Management Owners, jointly and severally, and each of the
Financial Investors, severally and not jointly and limited to the amount of the Purchase Price
received by such Financial Investor, shall indemnify and hold harmless the Purchaser and its
Representatives, shareholders, controlling persons, and Affiliates (collectively, the
“Purchaser Indemnified Persons”) for, and will pay to the Purchaser Indemnified Persons the
amount of, any loss, Liability, claim, damage (including, but only with respect to claims asserted
by and paid to a third party, incidental, consequential, and punitive damages and diminution of
value), expense (including costs of investigation and defense and reasonable attorneys’ and
experts’ fees and disbursements), whether or not involving a third-party claim (collectively,
“Damages”), to the extent resulting from: (i) any breach of any representation or warranty
made by the Sellers and the Management Owners in Section 3 of this Agreement, the Disclosure
Schedule, or in the Transaction Documents delivered by the Sellers and the Management Owners
pursuant to this Agreement; (ii) any breach by the Sellers or the Management Owners of any covenant
or obligation of the Sellers or the Management Owners in this Agreement; (iii) any Liability of the
Company with respect to any Proceeding relating to circumstances, occurrences, events, acts, or
omissions occurring prior to the Effective Time, whether or not such Proceeding was commenced
before, at, or after the Effective Time, and including, without limitation, the Titleserv
Proceeding and those other Proceedings set forth on Schedule 3.8; (iv) any amount or
Liability which would have been reflected on the Financial Statements, had such Financial
Statements been prepared in accordance with GAAP; (v) any fact, circumstance, or Liability

35

 

which would have been included on the Disclosure Schedules, had all references to “Knowledge”,
“Knowledge of the Management Owners”, or words of similar import, been eliminated from Section 3.5
[Taxes] herein; (vi) any fact, circumstance, or Liability which would have been included on the
Disclosure Schedules, had all references to “Knowledge”, “Knowledge of the Management Owners”, or
words of similar import, been eliminated from Section 3.6 [Employee Benefits] herein; (vii) any
failure of Titleserv, Inc. to pay any amounts due or owing to the Company in accordance with the
terms of the Titleserv Settlement; or (viii) the failure or inability of the Company to resolve,
settle, or dismiss the matters in dispute pursuant to the Titleserv Proceeding on or prior to the
sixtieth (60th) day following the Closing Date.

     8.3. Indemnification and Payment of Damages by the Purchaser.

          After the Closing, subject to the limitations set forth in this Section 8, the Purchaser will
indemnify and hold harmless the Sellers and the Management Owners, and their respective
Representatives, members, controlling persons, and Affiliates (collectively, the “Seller
Indemnified Persons”) and will pay to the Seller Indemnified Persons the amount of any Damages
arising out of or otherwise by virtue of: (i) any breach of any representation or warranty made by
the Purchaser in Section 4 of this Agreement or in the Transaction Documents delivered by the
Purchaser pursuant to this Agreement; or (ii) any breach by the Purchaser of any covenant or
obligation of the Purchaser in this Agreement or the Transaction Documents.

     8.4. Time Limitations.

          (a) If the Closing occurs, the Sellers and the Management Owners will not have any liability
(for indemnification or otherwise) with respect to the Operational Representations or the
indemnification set forth in Section 8.2(iv) herein, unless on or before the twenty-four (24)-month
anniversary of the Closing Date, the Purchaser notifies the Sellers and the Management Owners of a
claim specifying the factual basis of that claim in reasonable detail to the extent then known by
the Purchaser. A claim with respect to any Ultra-Fundamental Representation, Fundamental
Representation, or a claim for indemnification or reimbursement based upon any other provision of
this Agreement other than the Operational Representations, or any covenant or obligation to be
performed and complied by the Sellers or the Management Owners, may be made at any time, subject to
the applicable statute of limitations. A claim with respect to any of the representations or
warranties of the Purchaser, or a claim for indemnification or reimbursement based upon any other
provision of this Agreement, or any covenant or obligation to be performed and complied by the
Purchaser, may be made at any time, subject to the applicable statute of limitations.

          (b) No claim for indemnification hereunder for breach of any representation, warranty or
covenant may be made after the expiration of the survival period applicable to such representation,
warranty or covenant; provided, that any representation, warranty, or covenant in respect of which
indemnity may be sought under Section 8.2 or under Section 8.3, and the indemnity with respect
thereto, shall survive the time at which it would otherwise terminate pursuant to Section 8.4(a) if
reasonably detailed written notice of the breach or potential breach thereof giving rise to such
right or potential right of indemnity shall have been given to the Person against whom such
indemnity may be sought prior to such time.

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     8.5. Limitations on Amount — the Sellers and the Management Owners.

          (a) The Sellers and the Management Owners shall have no liability for Damages with respect to
any claim for indemnification or reimbursement based on a breach of any Operational Representations
or with respect to the indemnification set forth in Section 8.2(iv) herein unless and until the
cumulative aggregate amount of all Damages which are otherwise recoverable by the Purchaser
Indemnified Persons as a result of breaches of the Operational Representations or with respect to
the indemnification set forth in Section 8.2(iv) herein, taken collectively, equals or exceeds One
Hundred Fifty Thousand Dollars ($150,000.00) (the “Basket”), in which case the Sellers and
the Management Owners shall be liable for only those Damages in excess of the Basket.

          (b) The Sellers’ and the Management Owners’ maximum liability for Damages with respect to a
claim for indemnification or reimbursement based upon a breach of the Operational Representations
or with respect to the indemnification set forth in Section 8.2(iv) herein shall be limited to and
shall not exceed, and shall be satisfied solely from, the General Escrow Amount. The Sellers’ and
the Management Owners’ maximum liability for Damages with respect to a claim for indemnification or
reimbursement based upon a breach of the Fundamental Representations, or with respect to the
indemnification set forth in Section 8.2(v) and Section 8.2(vi) herein, shall be limited to and
shall not exceed fifty percent (50%) of the Total Consideration. The Sellers’ and the Management
Owners’ maximum liability for Damages with respect to a claim for indemnification or reimbursement
based upon a breach of the Ultra-Fundamental Representations, or a claim for indemnification or
reimbursement based upon any other provision of this Agreement other than the Operational
Representations or the Fundamental Representations, or any covenant or obligation to be performed
and complied by the Sellers and the Management Owners, shall be limited to and shall not exceed the
Total Consideration. Notwithstanding anything contained herein to the contrary, the Parties
acknowledge and agree that (i) no Financial Investor shall be liable for any amounts under this
Agreement which exceed that portion of the Purchase Price paid to such Financial Investor, and (ii)
the aggregate liability of the Sellers and the Management Owners to the Purchaser under this
Agreement shall not exceed the Total Consideration.

     8.6. Limitations on Amount —the Purchaser.

          The Purchaser’s maximum liability for Damages with respect to a claim for indemnification or
reimbursement based on a breach of this Agreement shall be limited to and shall not exceed, in the
aggregate, the Total Consideration.

     8.7. Indemnity Escrow Agreement.

          As security for the indemnification obligations of the Sellers and the Management Owners under
this Agreement, the Purchaser, the Sellers, and the Escrow Agent shall enter into the Indemnity
Escrow Agreement as of the Closing Date, which shall be funded with (i) Three Hundred Fourteen
Thousand, One Hundred And Thirty-Five (314,135) shares of common stock at Closing, and (ii) such
amount of shares of common stock of Purchaser payable by Sellers within two (2) days after Closing
in order for the total number of shares in escrow valued at $16.84 per share to equal 10% of the
final Purchase Price, determined in accordance with

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GAAP (collectively, the “General Escrow Amount”). The amounts held in the Indemnity
Escrow Agreement shall be held for a period of twenty four (24) months; provided, however, that (i)
fifty percent (50%) of the General Escrow Amount, less the amount of any claims for Damages
asserted by the Purchaser in excess of the Basket (if applicable), shall be released to the Sellers
on the twelve (12) month anniversary of the Closing Date, and (ii) upon the expiration of such
twenty four (24) month anniversary of the Closing Date, an amount equal to the General Escrow
Amount, less the amount of any claims for Damages asserted by the Purchaser in excess of the Basket
(if applicable), shall be released to the Sellers. The unsatisfied claims for Damages asserted by
the Purchaser in excess of the Basket (if applicable) prior to the date thereof shall remain in
escrow pending resolution of such claims. For the purpose of calculating disbursements from the
General Escrow Amount, the Parties acknowledge and agree that each share of common stock of the
Purchaser shall have a value of Sixteen and 84/100 Dollars ($16.84), subject to adjustment for any
change in the number of shares of common stock of the Purchaser due to stock split, stock dividend,
or recapitalization. Amounts held under the Indemnity Escrow Agreement shall be the exclusive
source of indemnification for breaches of any of the Operational Representations or with respect to
the indemnification set forth in Section 8.2(iv) herein, but otherwise shall be a non-exclusive
source of indemnification hereunder.

     8.8. Right of Set-Off.

          (a) Each Seller and Management Owner acknowledges that, in the event of a breach of the
Ultra-Fundamental Representations, the Fundamental Representations, or the provisions of Section
5.3 [Restrictive Covenants] herein, the Purchaser shall have the right to set-off any money damages
suffered by the Purchaser from any amounts otherwise payable by the Purchaser to the Sellers or the
Management Owners pursuant to this Agreement, including, without limitation, any PIA Payment;
provided, however, Purchaser shall not have any right to set-off against any proceeds to be
received by a Management Owner under an applicable Employment Agreement.

          (b) The Purchaser acknowledges that, in the event of a breach of its representations and
warranties, or a claim for indemnification or reimbursement based upon any other provision of this
Agreement, or any covenant or obligation to be performed and complied by the Purchaser, the Sellers
and the Management Owners shall have the right to set-off any money damages suffered by the Sellers
and the Management Owners from any amounts otherwise payable by the Sellers or the Management
Owners to the Purchaser pursuant to this Agreement.

          (c) In the event the Purchaser, any Seller, or any Management Owner elects to exercise its
right of set-off pursuant to this Section 8.8, then amounts otherwise payable by a Party to such
other Party shall be paid to the Escrow Agent pursuant to a written escrow agreement which requires
any disbursement of such funds to be made by the Escrow Agent only pursuant to (i) a joint written
direction by each applicable Party, or (ii) a final non-appealable judgment issued by a court of
competent jurisdiction, or in the case of any action or proceeding relating to or arising out of
any breach of the Operational Representations, by those arbitrators contemplated by Section 9.4(a)
below.

     8.9. Procedure for Indemnification — Third Party Claims.

38

 

          (a) Promptly after receipt of notice of the commencement of any Proceeding against an
indemnified party under Section 8.2 or Section 8.3, such indemnified party will, if a claim is to
be made against an indemnifying party, give notice to the indemnifying party of the commencement of
such claim, but the failure to notify the indemnifying party will not relieve the indemnifying
party of any liability that it may have to any indemnified party, except to the extent that the
indemnifying party demonstrates that the defense of such action is prejudiced by the indemnifying
party’s failure to give such notice.

          (b) If any Proceeding referred to in Section 8.9(a) is brought against an indemnified party
and it gives notice to the indemnifying party of the commencement of such Proceeding, the
indemnifying party will, unless the claim involves Taxes, be entitled to participate in such
Proceeding and, to the extent that it wishes (unless the indemnifying party is also a party to such
Proceeding and the indemnified party determines in good faith that joint representation would be
inappropriate), to assume the defense of such Proceeding with counsel reasonably satisfactory to
the indemnified party and, after notice from the indemnifying party to the indemnified party of its
election to assume the defense of such Proceeding, the indemnifying party will not, as long as it
diligently conducts such defense, be liable to the indemnified party under this Section 8 for any
fees of other counsel or any other expenses with respect to the defense of such Proceeding, in each
case subsequently incurred by the indemnified party in connection with the defense of such
Proceeding. If the indemnifying party assumes the defense of a Proceeding, (i) it will be
conclusively established for purposes of this Agreement that the claims made in that Proceeding are
within the scope of and subject to indemnification; (ii) no compromise or settlement of such claims
may be effected by the indemnifying party without the indemnified party’s consent unless (A) there
is no finding or admission of any violation of Legal Requirements or any violation of the rights of
any Person and no effect on any other claims that may be made against the indemnified party, and
(B) the sole relief provided is monetary damages that are paid in full by the indemnifying party;
and (iii) the indemnified party will have no liability with respect to any compromise or settlement
of such claims effected without its consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not, within ten business (10) days
after the indemnified party’s notice is given, give notice to the indemnified party of its election
to assume the defense of such Proceeding, the indemnifying party will be bound by any determination
made in such Proceeding or any compromise or settlement effected by the indemnified party provided
such indemnified party acts in good faith in the assumption of such defense of such Proceeding.

          (c) Notwithstanding the foregoing, if an indemnified party determines in good faith that there
is a reasonable probability that a Proceeding may adversely affect it or its Affiliates other than
as a result of monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the indemnifying party, assume the exclusive
right to defend, compromise, or settle such Proceeding, but the indemnifying party will not be
bound by any determination of a Proceeding so defended or any compromise or settlement effected
without its consent (which may not be unreasonably withheld).

          (d) The Parties hereby consent to the non-exclusive jurisdiction of any court in which a
Proceeding is brought against any indemnified party for purposes of any claim that an indemnified
party may have under this Agreement with respect to such Proceeding or the matters

39

 

alleged therein, and agree that process may be served on such Persons with respect to such a
claim anywhere in the world.

     8.10. Procedure for Indemnification — Other Claims.

          A claim for indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.

     8.11. Exclusive Remedy.

          Notwithstanding anything contained in this Agreement to the contrary, after the Closing, other
than with respect to an intentional misrepresentation or fraud, the indemnification provisions of
this Section 8 shall constitute the sole and exclusive remedy of the Parties for any and all
Damages or other claims relating to or arising from this Agreement. In no event shall any
indemnified party be entitled to recover or make a claim for any amounts in respect of punitive
damages, consequential damages, incidental damages or any other damages other than actual damages;
provided, however, that pursuant to a claim asserted by and paid to a third-party, an indemnified
party shall be entitled to recover or make a claim for those actual damages, punitive damages,
consequential damages, incidental damages or any other damages asserted by and paid to such third
party.

     8.12. Determination of Damages Amount.

          Notwithstanding any other provision set forth herein to the contrary, the amount of any
indemnification payable under any of the provisions of this Agreement shall be net of any insurance
proceeds or other recoveries from third parties actually paid to the indemnified Party by reason of
the facts and circumstances giving rise to such indemnification. Notwithstanding anything herein
to the contrary, (i) in no event shall the total recovery exceed the Damages incurred by the
indemnified party, and (ii) in no event shall the Purchaser recover Damages from the Sellers or the
Management Owners if such Damages were set forth on the face of the Closing Net Working Capital
Statement, or were taken into account when preparing the Closing Net Working Capital Statement in
accordance with GAAP.

9. GENERAL PROVISIONS

     9.1. Expenses.

          Except as otherwise expressly provided in this Agreement, each Party will bear its own
expenses incurred in connection with the preparation, negotiation, execution, and performance of
this Agreement and the Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants (whether consummated or not).

     9.2. Public Announcements.

          No Party shall issue any press release or make any public announcement relating to the subject
matter of this Agreement or the Contemplated Transactions without the prior written approval of the
other Party, except that either the Seller Representative or the Purchaser, upon prior written
notice to the other, may make any public disclosure it believes in good faith is

40

 

required by applicable Legal Requirements, or in the case of the Purchaser, any listing or
trading agreement concerning the publicly-traded securities of the Purchaser; provided, however,
the Purchaser and the Seller Representative shall each have the right to review such press release,
announcement or communication prior to its issuance, distribution or publication.

     9.3. Notices.

          All notices, consents, waivers, and other communications under this Agreement must be in
writing and will be deemed to have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by telecopier (with written confirmation of receipt), or (c)
when received by the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier numbers set forth
below (or to such other addresses and telecopier numbers as a party may designate by notice to the
other Parties):

If to the Sellers or the Management Owners:

Scott M. Stern,

as Seller Representative

801 Newcastle

St. Louis, Missouri 63132

Telephone: (314) 292-7935

Telecopier: (314) 567-4355

with a copy to:

Gallop, Johnson & Neuman, L.C.

Interco Corporate Tower

101 S. Hanley Road, Suite 1700

St. Louis, Missouri 63105

Attention: Robert H. Epstein, Esq. and Richard A. Yawitz, Esq.

Telephone: (314) 615-6000

Telecopier: (314) 615-6001

If to the Purchaser, to:

Altisource Portfolio Solutions S.A.

2 rue Jean Bertholet

L-1233 Luxembourg

Attention: William B. Shepro and Kevin J. Wilcox

Telephone: +(352) 2469-7902

Telecopier: +(352) 2744-9499

with a copy to:

Bryan Cave LLP

One Atlantic Center, Fourteenth Floor

41

 

1201 West Peachtree Street, N.E.

Atlanta, Georgia 30309-3488

Attention: Richard H. Miller, Esq. and Louis C. Spelios, Esq.

Telephone: (404) 572-6600

Telecopier: (404) 572-6999

     9.4. Jurisdiction; Service of Process.

          (a) Any action or proceeding relating to or arising out of any breach of the Operational
Representations shall be settled by arbitration as hereinafter provided which shall be the sole and
exclusive procedure for the resolution of any such dispute. Within ten (10) calendar days after
receipt of written notice from the Purchaser on the one hand, or the Seller Representative on the
other hand (each, a “Submitting Person”) that it is submitting the matter to arbitration,
each Submitting Person shall designate in writing one arbitrator to resolve the dispute who shall,
in turn, jointly select a third arbitrator within twenty (20) calendar days of their designation or
if they fail to do so, with the third arbitrator to be selected as promptly as practicable in
accordance with the procedure established by the American Arbitration Association at such time.
The arbitrators so designated shall each be a lawyer experienced in commercial and business affairs
who is not an employee, consultant, officer or director of any party or any Affiliate of any Party
and who has not received any compensation, directly or indirectly, from any Party hereto or any
Affiliate of any Party during the two (2) year period preceding the notice of arbitration. The
arbitration shall be governed by the Commercial Arbitration Rules of the American Arbitration
Association. The arbitrators shall have sole discretion with regard to the admissibility of
evidence. The arbitration panel shall have the right to grant equitable relief in their
discretion, and to award claims for specific performance. The right of each Submitting Person to
move for preliminary injunction or other temporary relief before any court having jurisdiction to
preserve its rights hereunder shall remain unaffected. The arbitrators shall use their best
efforts to rule on each disputed issue within thirty (30) calendar days after the completion of the
hearings. The determination of the arbitrators as to the resolution of any dispute shall be
binding and conclusive upon all Parties hereto. All rulings of the arbitrators shall be in
writing, with the reasons for the ruling given, and shall be delivered to the Parties hereto. Each
Submitting Person shall pay the fees of its respective designated arbitrator and its own costs and
expenses of the arbitration. The fees of the third arbitrator shall be paid fifty percent (50%) by
each of the Submitting Persons. Any arbitration pursuant to this Section 9.4(a) shall be conducted
in English in Wilmington, Delaware. Any arbitration award may be entered in and enforced by any
court having jurisdiction thereof and the parties hereby consent and commit themselves to the
jurisdiction of the courts of any competent jurisdiction for purposes of the enforcement of any
arbitration award.

          (b) Except as provided in Section 9.4(a) above, any action or proceeding seeking to enforce
any provision of, or based on any right arising out of, this Agreement shall be brought against any
of the parties in the courts of the State of Delaware, or, if it has or can acquire jurisdiction,
in the United States District Court for the District of Delaware, and each of the Parties consents
to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any Party anywhere in the world. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND

42

 

ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     9.5. Further Assurances.

          The Parties agree, without further compensation, (a) to furnish upon request to each other
such further information, (b) to execute and deliver to each other such other documents, and (c) to
do such other acts and things, all as the other Party may reasonably request for the purpose of
carrying out the intent of this Agreement, the documents referred to in this Agreement, and the
Contemplated Transactions.

     9.6. Waiver.

          The rights and remedies of the Parties are cumulative and not alternative. Neither the failure
nor any delay by any Party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement or the documents referred to in this Agreement can be
discharged by one Party, in whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by each other Party; (b) no waiver that may be given by a Party will be
applicable except in the specific instance for which it is given; and (c) no notice to or demand on
one Party will be deemed to be a waiver of any obligation of such Party or of the right of the
Party giving such notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.

     9.7. Entire Agreement and Modification.

          This Agreement supersedes all prior agreements between the Parties (except for confidentiality
agreements or similar agreements executed with respect to the Contemplated Transactions) with
respect to its subject matter and constitutes (along with the documents referred to in this
Agreement) a complete and exclusive statement of the terms of the agreement between the Parties
with respect to its subject matter. This Agreement may not be amended except by a written agreement
executed by each of the Parties.

     9.8. Disclosure Schedule.

          (a) If and to the extent any information required to be furnished in a particular Disclosure
Schedule attached hereto is contained in this Agreement or in any other Disclosure Schedule (or
updated schedule), such information shall be deemed to be included in such particular schedule to
the extent that it is reasonably apparent on its face that the disclosure in such other schedule
(or updated schedule) applies to the information requirement for the particular schedule. The
inclusion of any information in any Disclosure Schedule (or updated schedule) shall not be deemed
to be an admission or acknowledgment by the Sellers or the Management Owners, in and of itself,
that such information is material or outside the Ordinary Course.

43

 

          (b) In the event of any inconsistency between the statements in the body of this Agreement and
those in the Disclosure Schedule (other than an exception set forth in the Disclosure Schedule in
accordance with Section 9.8(a) above), the statements in the body of this Agreement will control.

          (c) No due diligence conducted by the Purchaser shall limit or be used as a defense by the
Sellers or the Management Owners with respect to any claim of breach of a representation, warranty
or covenant by the Sellers or the Management Owners under this Agreement.

     9.9. Obligations; Assignments, Successors, and No Third-Party Rights.

          The obligations and liabilities of the Management Trusts and the Management Owners under the
Transaction Documents shall be joint and several. No Party may assign all or any portion of its
rights under this Agreement without the prior consent of the other Parties, except that the
Purchaser may assign any of its rights under this Agreement to any Affiliate of the Purchaser
without the consent of the Sellers or the Management Owners, but no such assignment will release
the Purchaser from any obligations hereunder. This Agreement will apply to, be binding in all
respects upon, and inure to the benefit of the successors and permitted assigns of the Parties.
The acquisition by the Purchaser of the Shares, and the transfer thereof by the Sellers, shall in
no way expand the rights or remedies of any third party against the Purchaser or its officers,
directors, employees, stockholders, and advisors as compared to the rights and remedies which such
third party would have had against the Sellers had the Purchaser not acquired the Shares. Nothing
expressed or referred to in this Agreement will be construed to give any Person other than the
Parties any legal or equitable right, remedy, or claim under or with respect to this Agreement or
any provision of this Agreement. This Agreement and all of its provisions and conditions are for
the sole and exclusive benefit of the Parties and their successors and permitted assigns.

     9.10. Severability.

          If any provision of this Agreement is held invalid or unenforceable by any court of competent
jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.

     9.11. Section Headings; Construction.

          The headings of Sections in this Agreement are provided for convenience only and will not
affect its construction or interpretation. All references to “Section” or “Sections” refer to the
corresponding Section or Sections of this Agreement. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless otherwise expressly
provided, the word “including” does not limit the preceding words or terms.

     9.12. Time of Essence.

          With regard to all dates and time periods set forth or referred to in this

44

 

Agreement, time is of the essence.

     9.13. Governing Law.

          This Agreement will be governed by the laws of the State of Delaware without regard to
conflicts of laws principles.

     9.14. Specific Performance.

          Each of the Parties acknowledges and agrees that the other Party would be damaged irreparably
in the event any of the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties agrees that the other
Party shall be entitled to an injunction or injunctions to prevent breaches of the provisions of
this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in
any action instituted in any court of the United States or any state thereof having, in accordance
with the terms of this Agreement, jurisdiction over the Parties and the matter, in addition to any
other remedy to which it may be entitled, at law or in equity.

     9.15. 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.

     9.16. Seller Representative.

          (a) Each of the Sellers and the Management Owners hereby irrevocably constitutes and appoints
the Seller Representative, acting as hereinafter provided, as his and its attorney-in-fact and
agent in its name, place and stead in connection with the transactions contemplated by this
Agreement and matters arising therefrom subsequent to the date hereof, and acknowledges that such
appointment is coupled with an interest. By executing and delivering this Agreement, the Seller
Representative hereby (i) accepts his appointment and authorization as Seller Representative to act
as attorney-in-fact and agent in the name, place and stead of each of the Sellers and the
Management Owners in accordance with the terms of this Agreement, and (ii) agrees to perform his
duties and obligations hereunder.

          (b) Each Seller and Management Owner authorizes the Seller Representative in the name and on
behalf of such Seller and Management Owner:

     (i) to give and receive any notice required or permitted under this Agreement;

     (ii) to exercise any rights and to take any action required or permitted to be
taken under this Agreement;

     (iii) to negotiate, execute and deliver any amendment to or modification of
this Agreement or any of the provisions hereof and any waiver or consent hereunder;

45

 

     (iv) to dispute or to refrain from disputing any claim made by the Purchaser
under this Agreement and any other agreements, instruments and documents to be
delivered by or on behalf of such Seller or Management Owner pursuant to this
Agreement;

     (v) to negotiate and compromise any dispute which may arise, and to exercise or
refrain from exercising remedies available under this Agreement and the other
agreements, instruments and documents delivered or to be delivered by or on behalf
of such Seller or Management Owner pursuant to this Agreement and to sign any
releases or other documents with respect to any such dispute or remedy; and

     (vi) to give such instructions and to do such other things and refrain from
doing such other things as the Seller Representative shall deem necessary or
appropriate to carry out the provisions of this Agreement and any other agreements,
instruments and documents delivered or to be delivered by or on behalf of such
Seller or Management Owner pursuant to this Agreement.

          (c) Each of the Sellers and Management Owners agrees to be bound by all agreements and
determinations made, and agreements, documents and instruments negotiated, executed and delivered
by the Seller Representative under this Agreement.

          (d) Each of the Sellers and Management Owners hereby expressly acknowledges and agrees that
the Seller Representative is authorized to act in his and its name and on his and its behalf with
respect to the matters expressly set forth in this Agreement to be performed by Seller
Representative. Notwithstanding any dispute or disagreement among the Sellers, the Management
Owners, and/or the Seller Representative, subject to the limitation in the preceding sentence, the
Purchaser shall be entitled in good faith to rely on any and all action taken by the Seller
Representative under this Agreement and the other agreements, instruments and documents to be
delivered by or on behalf of the Sellers and the Management Owners pursuant to this Agreement
without any liability to, or obligation to inquire of, any of the Sellers or the Management Owners.
The Purchaser is hereby expressly authorized in good faith to rely on the genuineness of the
signatures of the Seller Representative, and upon receipt of any writing which reasonably appears
to have been signed by the Seller Representative, the Purchaser may act upon the same in good faith
without any further duty of inquiry as to the genuineness of the writing.

          (e) If Scott M. Stern, as the Seller Representative, ceases to function for any reason
whatsoever, then Timothy C. Stern shall serve as the successor Seller Representative; if Timothy C.
Stern ceases to function as the Seller Representative for any reason whatsoever, then Sellers who
prior to the transactions contemplated by this Agreement held (or their successors in interest) a
majority of the equity interests of the Company may appoint a successor; provided,
however, that if for any reason no successor has been appointed pursuant to the foregoing
within thirty (30) days, then the Purchaser shall have the right but not the obligation to petition
a court of competent jurisdiction for appointment of a successor.

          (f) The authorization of the Seller Representative shall be effective until such rights and
obligations under this Agreement terminate by virtue of the termination of any and all

46

 

obligations of the Sellers and the Management Owners hereunder.

          (g) The Seller Representative shall not be liable for any acts or omissions under this Section
9.16 except for his own gross negligence or willful misconduct. Each Seller and Management Owner
agrees to indemnify and to save and hold harmless the Seller Representative of, from, against and
in respect of any claim, action, cause of action, cost, liability or expense suffered or incurred
by or asserted against the Seller Representative based upon or arising out of the performance by
the Seller Representative of any act, matter or thing pursuant to the appointment herein made,
except that no Seller or Management Owner shall be held or required to indemnify or to save or hold
harmless the Seller Representative for the gross negligence or willful misconduct of the Seller
Representative in the performance of his duties hereunder.

     9.17. Acknowledgment by the Purchaser.

          THE PURCHASER ACKNOWLEDGES THAT THE REPRESENTATIONS AND WARRANTIES BY THE SELLERS AND THE
MANAGEMENT OWNERS CONTAINED IN THIS AGREEMENT CONSTITUTE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND
WARRANTIES OF THE SELLERS AND THE MANAGEMENT OWNERS TO THE PURCHASER IN CONNECTION WITH THE
CONTEMPLATED TRANSACTIONS, AND THE PURCHASER UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT ALL OTHER
REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE EXPRESS OR IMPLIED (INCLUDING, BUT NOT LIMITED
TO, ANY RELATING TO THE FUTURE OR HISTORICAL FINANCIAL CONDITION, RESULTS OF OPERATIONS, ASSETS OR
LIABILITIES OF THE COMPANY) ARE SPECIFICALLY DISCLAIMED BY THE SELLERS AND THE MANAGEMENT OWNERS.

     9.18. Transfer Taxes.

          Notwithstanding anything herein to the contrary, the Sellers will pay, and will indemnify and
hold the Purchaser harmless against, any transfer, stamp, stock transfer, recording or other
similar tax imposed on the transfer of the Shares, whether assessed against the Company or one or
more Sellers as a result of the Contemplated Transactions (collectively, “Transfer Taxes”),
and any penalties or interest with respect to the Transfer Taxes. The Purchaser agrees to
cooperate with the Sellers in the filing of any returns with respect to the Transfer Taxes,
including promptly supplying any information in their possession that is reasonably necessary to
complete such returns.

     9.19. Delivery by Electronic Means.

          This Agreement, the agreements referred to herein, and each other agreement or instrument
entered into in connection herewith or therewith or contemplated hereby or thereby, and any
amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or
other electronic means, shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if it were the original
signed version thereof delivered in person. At the request of any Party hereto or to any such
agreement or instrument, each other Party hereto or thereto shall re-execute original forms thereof
and deliver them to all other Parties. No Party hereto or to any such

47

 

agreement or instrument shall raise the use of a facsimile machine or other electronic means
to deliver a signature or the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine or other electronic means as a defense to the
formation or enforceability of a contract and each such Party forever waives any such defense.

[The Remainder of this Page has been Intentionally Left Blank]

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

	 	 	 	 	 
	 	The “Purchaser”:

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

 	 
	 	By:  	 	 
	 	 	Name: 
	 
	 	 	Title: 
	 
	 

	 	 	 	 	 
	 	The “Sellers”:

SCOTT M. STERN REVOCABLE TRUST

 	 
	 	By:  	 	 
	 	 	Scott M. Stern 	 
	 	 	Trustee 	 
	 

	 	 	 	 	 
	 	TIMOTHY C. STERN, REVOCABLE TRUST

 	 
	 	By:  	 	 
	 	 	Timothy C. Stern 	 
	 	 	Trustee 	 
	 

	 	 	 	 	 
	 	BARRY O. SANDWEISS REVOCABLE TRUST

 	 
	 	By:  	 	 
	 	 	Barry O. Sandweiss 	 
	 	 	Trustee 	 
	 

	 	 	 	 	 
	 	THE THOMAS A. STERN REVOCABLE TRUST

 	 
	 	By:  	 	 
	 	 	Thomas A. Stern 	 
	 	 	Trustee 	 
	 

[Signatures Continued on Following Page]

49

 

[Signatures Continued from Previous Page]

	 	 	 	 	 
	 	 	 
	 	 	 
	 	EVAN HACKEL 	 
	 	 	 	 
	 
	 	PARAMOUNT BOND & MORTGAGE CO., INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 
	 	The “Management Owners”:

 	 
	 	 	 
	 	SCOTT M. STERN 	 
	 	 	 	 
	 
	 	 	 
	 	 	 
	 	TIMOTHY C. STERN 	 
	 	 	 	 
	 
	 	 	 
	 	 	 
	 	BARRY O. SANDWEISS 	 
	 	 	 	 
	 

50

 

ANNEX I

          “Affiliate” — used to indicate a relationship to a specified person, firm,
corporation, partnership, limited liability company, association or entity, and means any person,
firm, corporation, partnership, limited liability company, association or entity that, directly or
indirectly or through one or more intermediaries, controls, is controlled by or is under common
control with such person, firm, corporation, partnership, limited liability company, association or
entity.

          “Arbitrator” — as defined in Section 2.6(c).

          “Audited Financial Statements” — as defined in Section 5.4.

          “Baseline EBITDA” — means the EBITDA of the Company during the period commencing at
12:00 AM Eastern Time on January 1, 2009, and ending at 11:59 PM Eastern Time on December 31, 2009,
as determined based on the Audited Financial Statements.

          “Business” — means the business of the Company as conducted at and prior to Closing,
which is the business of (i) managing and operating a mortgage banking cooperative, and (ii)
providing purchasing support services, real estate mortgage origination services, and other
ancillary services, to the members of such mortgage banking cooperative.

          “Business Day” — means any day except Saturday, Sunday or any day on which banks are
generally not open for business in New York, New York.

          “Cash Payment” — as defined in Section 2.2.

          “Closing” — as defined in Section 2.4.

          “Closing Date” — as defined in Section 2.4.

          “Closing Net Working Capital Statement” — as defined in Section 2.6(b)(i).

          “Collateral Agency Agreement” — means that certain Collateral Agency Agreement by and
among the Management Trusts and Scott M. Stern, as collateral agent, the form of which is attached
hereto as Exhibit J.

          “Company” — means The Mortgage Partnership of America, L.L.C., a limited liability
company organized under the laws of the State of Missouri.

          “Company Group” — as defined in Section 3.6(a).

          “Company Plans” — as defined in Section 3.6(b).

          “Company Qualified Plans” — as defined in Section 3.6(c).

          “Confidential Information” — information with respect to the terms of the
transactions contemplated by this Agreement, and trade secrets, discoveries, ideas, concepts,
know-how, techniques, designs, specifications, data, computer programs, pricing information,

 

 

interpretations, financial statements, forecasts, reports, records, plans, studies and other
technical and business information of the disclosing party, whether in oral, written, graphic,
electronic or other form as well as analyses, compilations, studies or other documents, whether or
not prepared by the receiving party or its representatives, which contain or otherwise reflect such
information. Notwithstanding the foregoing, the following information shall not be Confidential
Information: (i) information which has become generally available to the general public other than
as a result of a disclosure by the receiving party or its representatives, (ii) information which
is known or was available to the receiving party prior to disclosure to the receiving party
pursuant to the Contemplated Transactions, or (iii) information which becomes available to the
receiving party on a non-confidential basis from a third party who was itself not prohibited from
transmitting the information to the receiving party by a contractual, legal or fiduciary
obligation.

          “Consent” — any approval, consent, ratification, waiver, expiration of waiting
period, or other authorization (including any Governmental Authorization).

          “Contemplated Transactions” — all of the transactions contemplated by this Agreement,
including, but not limited to, (a) the acquisition of the Shares by the Purchaser from the Sellers
and the payment of the Purchase Price therefor; (b) the execution and delivery of the Transaction
Documents; and (c) the performance by the Parties hereto and thereto of their respective covenants
and obligations under the Transaction Documents.

          “Contract” — any agreement, contract, obligation, promise, or undertaking (whether
written or oral and whether express or implied) that is legally binding.

          “Conveyancing Documents” — as defined in Section 6.1(c)(ii).

          “Cooperative” — means Best Partners Mortgage Cooperative, Inc., a Delaware
corporation.

          “Cooperative Members” — means those Persons who are members of the Cooperative.

          “Damages” — as defined in Section 8.2.

          “Disclosure Schedule” — as defined in Section 3.

          “EBITDA” — means, with respect to the applicable Measurement Period, (A) the Net
Income of the Company, plus to the extent such charges are deducted in determining Net
Income of the Company, (i) any interest on Indebtedness attributable to the Company, (ii) all
income Taxes attributable to the Company, (iii) any depreciation expenses attributable to the
Company, (iv) any amortization of goodwill and other intangibles attributable to the Company, and
(v) solely with respect to the period commencing on the Effective Time, and ending on the three (3)
month anniversary of the Closing Date, those restructuring and transition costs which are approved
by the Purchaser and which are legitimately attributable to the integration of the Company with the
Purchaser’s business operations, plus (B) the product of (x) the Gross Revenue earned by
the Purchaser and its Affiliates (other than the Company) from the Cooperative Members, multiplied
by (y) 0.2.

 

 

          “Effective
Time” — means _________  Eastern Time on the Closing Date.

          “Employees” — as defined in Section 3.6(b).

          “Employment Agreements” — means each of those certain employment agreements between
Altisource Solutions, Inc., a Delaware corporation, on the one hand, and each of Scott M. Stern,
Timothy C. Stern, and Barry O. Sandweiss, on the other hand, the forms of which are attached hereto
as Exhibit H-1, Exhibit H-2, and Exhibit H-3, respectively.

          “Equity Rights” — means (a) all plans or agreements permitting the issuance of the
equity securities of the Company, (b) options to acquire the equity securities of the Company, (c)
securities, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any
kind to which the Company is a party or by which they are bound obligating the Company to issue,
sell, redeem or otherwise acquire equity securities of the Company, and (d) other rights to acquire
equity securities of the Company that are valued in whole or in part by reference to the equity
securities of the Company or that may be settled in the equity securities of the Company.

          “ERISA” — as defined in Section 3.6(b)(i).

          “Escrow Agent” — means Bank of New York Mellon Trust Company.

          “Facility” or “Facilities”— any plant, structure, improvement, land or other
real property, whether owned, leased or otherwise, of the Company.

          “Final Adjustment Schedule” — as defined in Section 2.6(b)(ii).

          “Financial Investors” — means each of the following Sellers: The Thomas A. Stern
Revocable Trust; Evan Hackel; and Paramount Bond & Mortgage Co., Inc.

          “Financial Statements” — as defined in Section 3.9.

          “Fundamental Representations” — means those representations and warranties of the
Sellers and the Management Owners contained in Section 3.5 [Taxes] and Section 3.6 [Employee
Benefits].

          “Funds Flow and Settlement Statement” — means the Funds Flow and Settlement Statement
dated as of the Closing Date and entered into by and among the Parties, with regard to any
adjustments to, and the payment of, the Purchase Price.

          “GAAP” — United States generally accepted accounting principles, consistently
applied, as in effect on the date hereof.

          “General Escrow Amount” — as defined in Section 8.7.

          “Good Faith Efforts” — the efforts that a prudent Person desirous of achieving a
result would use in similar circumstances to ensure that such result is achieved as reasonably
expeditiously as possible.

 

 

          “Governmental Authorization” — any approval, consent, license, permit, waiver, or
other authorization issued, granted, given, or otherwise made available by or under the authority
of any Governmental Body or pursuant to any Legal Requirement.

          “Governmental Body” — any federal, state, local, municipal, foreign, or other
government, or governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, department, official, or entity and any court or other tribunal).

          “Gross Revenue” — means gross revenue, as determined in accordance with GAAP.

          “Indebtedness” — (i) all indebtedness for borrowed money or for the deferred purchase
price of property or services (including, without limitation, reimbursement and all other
obligations with respect to surety bonds, letters of credit and bankers’ acceptances, whether or
not matured), including the current portion of such indebtedness, but excluding trade payables
incurred by the Company in the Ordinary Course, (ii) all obligations evidenced by notes, bonds,
debentures or similar instruments, and (iii) all capital lease obligations; it being acknowledged
that Indebtedness does not include operating lease obligations.

          “Indemnity Escrow Agreement” — means the Escrow Agreement dated as of the Closing
Date, entered into by and among the Purchaser, the Sellers, and the Escrow Agent with respect to
the indemnification obligations of the Sellers and the Management Owners under Section 8 of this
Agreement, the form of which is attached hereto as Exhibit D-1.

          “Intellectual Property Assets” — the term “Intellectual Property Assets” includes:

          (i) the name, all fictional business names, trade names, styles, registered and unregistered
trademarks, service marks, and trademark applications of the Company (collectively,
“Marks”);

          (ii) all patents, patent applications, and inventions and discoveries that may be patentable
of the Company (collectively, “Patents”);

          (iii) all copyrights in both published works and unpublished works of the Company
(collectively, “Copyrights”);

          (iv) all confidential know-how, trade secrets, confidential information, confidential
technical information, confidential data, confidential process technology, confidential plans,
confidential drawings, and confidential blue prints owned, used, or licensed by the Company
(collectively, “Trade Secrets”);

          (v) all computer programs (source code or object code) owned by the Company (collectively,
“Owned Software”);

          (vi) all license agreements covering computer programs (source code or object code) licensed
to the Company by a third party, whether as integrated or bundled with any of the computer programs
of the Company or as a separate stand-alone product (including any off-the-

 

 

shelf computer program licensed under a shrink-wrap license) (collectively, “Licensed
Software”);

          (vii) all Internet domain names (“Domain Names”);

          (viii) all other proprietary rights of the Company; and

          (ix) all copies and tangible embodiments of the foregoing (in whatever form or medium).

          “IRC” — the Internal Revenue Code of 1986, as amended, or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code of 1986, as amended, or any
successor law.

          “IRS” — the United States Internal Revenue Service and, to the extent relevant, the
United States Department of the Treasury and, to the extent relevant, the counterpart agencies of
other countries.

          “Knowledge” — with respect to the Sellers and/or the Management Owners shall mean the
actual or constructive knowledge as of the date hereof of the Management Owners. Constructive
knowledge shall be that which a prudent individual would be expected to discover or otherwise
become aware of such fact or other matter in the course of conducting a reasonable investigation
concerning the existence of such fact or other matter.

          “Legal Requirement” — any federal, state, local, municipal, foreign, international,
multinational, or other administrative order, constitution, law, decree, code, ordinance, principle
of common law, rule, regulation, statute, or treaty.

          “Liability” — any liability (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due), including any liability for Taxes.

          “Management Owners” — as defined in the first paragraph of this Agreement.

          “Management Trusts” — means each of the following Sellers: Scott M. Stern Revocable
Trust; Timothy C. Stern, Revocable Trust; and Barry O. Sandweiss Revocable Trust.

          “Measurement Period” — means, respectively, (i) the period commencing at 12:00 AM
Eastern Time on the date of the PIA, and ending at 11:59 PM Eastern Time on the first anniversary
of the date of the PIA, (ii) the period commencing at 12:00 AM Eastern Time on the first day
following the first anniversary of the date of the PIA, and ending at 11:59 PM Eastern Time on the
second anniversary of the date of the PIA, and (iii) the period commencing at 12:00 AM Eastern Time
on the first day following the second anniversary of the date of the PIA, and ending at 11:59 PM
Eastern Time on the third anniversary of the date of the PIA.

          “Net Income” — means (x) net income, less (y) the amount of all PIA Payments
calculated and payable to each of the Management Owners hereunder during the Measurement Period in
which net income is calculated, as determined in accordance with GAAP.

 

 

          “Net Revenues” — means net revenues received by the Company following the Closing
pursuant to the terms of the PIA, as determined in accordance with GAAP; provided, that net
revenues (i) shall be calculated using the accrual method of accounting, it being acknowledged that
reserves and write-downs shall be deducted for the purpose of calculating Net Revenues, and (ii)
shall include only net revenues related to the Company’s pro-rata portion of the amount of the
improved loan sale execution achieved for the Company’s Cooperative Members (it being acknowledged
that all other net revenues under the PIA shall be excluded from the calculation of Net Revenues).

          “Net Working Capital” — with respect to the Company, the excess of current assets
(excluding the current portion of any amounts paid or payable to the Company pursuant to the
Titleserv Settlement, and excluding any cash or cash equivalents paid or distributed to any Seller
prior to the Effective Time) over current liabilities (excluding the current portion of
long-term Indebtedness), in each case (x) determined in accordance with GAAP, and (y) incurred in
the Ordinary Course.

          “Noncompete Payment” — as defined in Section 2.2.

          “Notice of Disagreement with PIA Statement” — as defined in Section 5.6(e).

          “Notice of Disagreement with Price Adjustment” — as defined in Section 2.6(c).

          “Operational Representations” — means those representations and warranties of the
Sellers and the Management Owners contained in Section 3 of this Agreement which are not
Ultra-Fundamental Representations or Fundamental Representations.

          “Order” — any award, decision, injunction, judgment, order, ruling, subpoena, or
verdict entered, issued, made, or rendered by any court, administrative agency, or other
Governmental Body or by any arbitrator.

          “Ordinary Course” — an action taken by the Company will be deemed to have been taken
in the “Ordinary Course” only if such action is consistent with the past practices of the Company
and is taken in the ordinary course of the normal day-to-day operations of the Company.

          “Organizational Documents” — means (a) the articles or certificate of incorporation
of, the bylaws of, and any shareholder agreement relating to, a corporation; (b) the partnership
agreement and any statement of partnership of a general partnership; (c) the limited partnership
agreement and the certificate of limited partnership of a limited partnership; (d) the articles or
certificate of formation and operating agreement of a limited liability company; (e) any trust
agreement adopted in connection with any trust; and (f) any amendment to any of the foregoing.

          “Party” and “Parties” — as defined in the first paragraph of this Agreement.

          “PBGC” — as defined in Section 3.6(b).

 

 

          “Pension Benefit Plan” — as defined in Section 3.6(q).

          “Person” — any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or Governmental Body.

          “PIA” — means a preferred investor agreement executed by the Company and either Bank
of America or Wells Fargo (whichever occurs first, but not both), which contains terms and
conditions which are materially consistent with preferred investor agreements executed by the
Company prior to Closing with similarly-situated clients.

          “PIA Payments” — as defined in Section 5.6(a).

          “PIA Statement” — as defined in Section 5.6(d).

          “Price Adjustment” — as defined in Section 2.6(a).

          “Proceeding” — any action, arbitration, audit, hearing, charge, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or informal)
commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body
or arbitrator.

          “Purchase Price” — as defined in Section 2.2.

          “Purchase Price Allocation” — as defined in Section 2.7.

          “Purchaser” — as defined in the first paragraph of this Agreement.

          “Purchaser Indemnified Person” — as defined in Section 8.2.

          “Purchaser SEC Reports” — as defined in Section 4.5.

          “Put Escrow Agreement” — means the Put Right Escrow Agreement dated as of the Closing
Date, entered into by and among the Purchaser, the Management Trusts, and the Escrow Agent with
respect to certain of the obligations of the Purchaser under the Put Option Agreement, the form of
which is attached hereto as Exhibit D-2.

          “Put Option Agreement” — means that certain Put Option Agreement by and among the
Purchaser and the Management Trusts, the form of which is attached hereto as Exhibit E-2.

          “Put Pledge Agreement” — means that certain pledge and security agreement by the
Purchaser in favor of the Management Trusts, and acknowledged by the Company and Scott M. Stern, as
collateral agent, with respect to the Purchaser’s obligations arising under the Put Option
Agreement, the form of which is attached hereto as Exhibit G.

          “Put Security Agreement” — means that certain security agreement by the Company in
favor of the Management Trusts, and acknowledged by Scott M. Stern as collateral

 

 

agent, with respect to the Purchaser’s obligations arising under the Put Option Agreement, the
form of which is attached hereto as Exhibit F.

          “Related Person” — means with respect to a particular individual: (a) each other
member of such individual’s Family; (b) any Person that is directly or indirectly controlled by
such individual or one or more members of such individual’s Family; (c) any Person in which such
individual or members of such individual’s Family hold (individually or in the aggregate) a
Material Interest; and (d) any Person with respect to which such individual or one or more members
of such individual’s Family serves as a director, manager, officer, partner, executor, or trustee
(or in a similar capacity). With respect to a specified Person other than an individual: (A) any
Person that directly or indirectly controls, is directly or indirectly controlled by, or is
directly or indirectly under common control with such specified Person; (B) any Person that holds a
Material Interest in such specified Person; (C) each Person that serves as a director, manager,
officer, partner, executor, or trustee of such specified Person (or in a similar capacity); (D) any
Person in which such specified Person holds a Material Interest; (E) any Person with respect to
which such specified Person serves as a general partner or a trustee (or in a similar capacity);
and (F) any Related Person of any individual described in clause (B) or (C).

          For purposes of this definition, (a) the “Family” of an individual includes (i) the
individual, (ii) the individual’s spouse, (iii) any other natural person who is related to the
individual or the individual’s spouse within the second degree, and (iv) any other natural person
who resides with such individual, and (b) “Material Interest” means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of
voting securities or other voting interests representing at least 10% of the outstanding voting
power of a Person or equity securities or other equity interests representing at least 10% of the
outstanding equity securities or equity interests in a Person.

          “Release Agreement” — means each of those certain mutual release agreements by the
Company, each of the Sellers and each of the Management Owners, the form of which is attached
hereto as Exhibit I.

          “Representative” — with respect to a particular Person, any director, manager,
officer, employee, agent, consultant, advisor, or other representative of such Person, including
legal counsel, accountants, and financial advisors.

          “Required Approvals” — each matter, and each approval from each Person, specifically
identified in Exhibit C.

          “Restricted Stock” — means shares of common Stock of the Purchaser issued as part of
the Stock Payment hereunder, which are not Unrestricted Stock.

          “Rights Agreement” — means that certain Rights Agreement by and among the Purchaser
and the Sellers receiving the Stock Payment at Closing, the form of which is attached hereto as
Exhibit E-1.

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

          “Security Interest” — means any charge, claim, community property interest,

 

 

equitable interest, encumbrance, mortgage, lien, option, pledge, security interest, right of
first refusal, or restriction of any kind, including any restriction on use, voting, transfer,
receipt of income, or exercise of any other attribute of ownership other than restrictions pursuant
to applicable securities laws.

          “Seller Indemnified Person” — as defined in Section 8.3.

          “Seller Representative” — means Scott M. Stern, who as a result of the due
authorization of this Agreement by the Sellers and the Management Owners, has been appointed by the
Sellers and the Management Owners for the purpose of acting on behalf of the Sellers and the
Management Owners with respect to the transactions contemplated by this Agreement, and making
decisions with respect to indemnity claims and amendments to the Agreement or any ancillary
agreements.

          “Sellers” — as defined in the first paragraph of this Agreement.

          “Shares” — means one hundred percent (100%) of the issued and outstanding limited
liability company interests of the Company.

          “Springhouse” — means Springhouse, LLC, a Missouri limited liability company.

          “Stock Payment” — as defined in Section 2.2.

          “Straddle Period” — as defined in Section 5.2(a).

          “Submitting Person” — as defined in Section 9.4(a).

          “Tax” — means all tax (including, but not limited to, income tax, payroll tax,
capital gains tax, tax imposed under IRC Section 1374, value added tax, excise tax, sales tax,
property tax, escheat tax, or unclaimed property tax), levy, assessment, tariff, duty (including,
but not limited to, customs duty), deficiency or other fee and any related charge or amount
(including, but not limited to, fine, penalty and interest) imposed, assessed or collected by or
under the authority of any Governmental Body.

          “Tax Contest” — as defined in Section 5.2(c)(i).

          “Tax Item” — means any item of income, gain, loss, deduction, credit, recapture of
credit or any other item that increases or decreases Taxes paid or payable.

          “Tax Return” — means any return (including, but not limited to, any information
return), report, statement, schedule, notice, form, or other document or information filed with or
submitted to, or required to be filed with or submitted to, any Governmental Body in connection
with the determination, assessment, collection, or payment of any Tax or in connection with the
administration, implementation, or enforcement of or compliance with any Legal Requirement relating
to any Tax.

          “Territory” — means the United States of America.

 

 

          “Titleserv Proceeding” — means that certain action styled The Mortgage
Partnership of America v. Titleserv, Inc., Cause No. 08SL-CC03387, in the Circuit Court of St.
Louis County, Missouri.

          “Titleserv Settlement” — means any Contract entered into between or on behalf of the
Company and Titleserv, Inc., and/or its designated agent, either before, on, or after the Closing,
which is in respect to the settlement or dismissal of the Titleserv Proceeding.

          “Total Consideration” — means the sum of the Purchase Price, plus the aggregate
amount of all PIA Payments.

          “Transaction Documents” — means each of this Agreement, the Indemnity Escrow
Agreement, the Put Escrow Agreement, the Rights Agreement, the Put Option Agreement, the Put
Security Agreement, the Put Pledge Agreement, each Employment Agreement, each Release Agreement,
the Collateral Agency Agreement, the Conveyancing Documents, and each other document, instrument,
and certificate delivered in connection with the transfer of Shares.

          “Transfer Taxes” — as defined in Section 9.18.

          “Ultra-Fundamental Representations” — means those representations and warranties of
the Sellers and the Management Owners contained in Section 3.1 [Organization and Good Standing],
Section 3.2 [Authority; No Conflict], Section 3.3 [Title to Properties; Capitalization of the
Company; Security Interests], Section 3.18 [Brokers or Finders], and Section 3.19 [Sophistication
of Investors; Access to Information].

          “Unrestricted Stock” — means shares of common Stock of the Purchaser issued as part
of the Stock Payment hereunder, which are not subject to any restriction pursuant to the terms of
the Transaction Documents other than the restriction on the volume of shares which may be sold and
applicable restrictions arising under securities Legal Requirements. Without limiting the
foregoing, the Unrestricted Stock will be lettered stock and must be held for six (6) months after
the Closing Date and will be subject to applicable limitations pursuant to Rule 144 promulgated
under the Securities Act of 1933, as amended.

          “Working Capital Target” — means Zero Dollars ($0.00).

 

 

Schedule 2.3

[OMITTED]

Schedule 2.3(f)

[OMITTED]

Schedule 5.6(h)

[OMITTED]

Schedule 6.1(h)

[OMITTED]

Exhibit A

[OMITTED]

Exhibit B

[OMITTED]

Exhibit C

[OMITTED]

Exhibit D-1

Form of Indemnity Escrow Agreement

Exhibit D-2

Form of Put Escrow Agreement

Exhibit E-1

Form of Rights Agreement

Exhibit E-2

Form of Put Option Agreement

Exhibit F

Form of Put Security Agreement

 

 

Exhibit G

Form of Put Pledge Agreement

Exhibit H-1

Form of Scott M. Stern Employment Agreement

Exhibit H-2

Form of Timothy C. Stern Employment Agreement

Exhibit H-3

Form of Barry O. Sandweiss Employment Agreement

Exhibit I

Form of Release Agreement

Exhibit J

Form of Collateral Agency Agreement

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